EXHIBIT 10.29
DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT
by and between
CIMA LABS INC.
and
ALAMO PHARMACEUTICALS, LLC
dated as of March 2, 2001
DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT
This DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT ("this Agreement"),
dated and effective as of March 2, 2001 (the "Effective Date"), is by and
between CIMA LABS INC., a Delaware corporation ("CIMA"), and ALAMO
PHARMACEUTICALS, LLC, a California Limited Liability Company ("Alamo").
W I T N E S S E T H
WHEREAS, CIMA is engaged, among other things, in the business of
research, development, manufacturing and commercialization of pharmaceutical
products through its proprietary drug delivery technologies;
WHEREAS, Alamo is engaged, among other things, in the business of
developing, marketing and selling of pharmaceutical products;
WHEREAS, subject to the terms and conditions set forth in this
Agreement, CIMA and Alamo wish to collaborate in the development, registration,
marketing and sale of a certain prescription product; and
WHEREAS, subject to the terms and conditions set forth in this
Agreement, CIMA wishes to license to Alamo and Alamo wishes to license from CIMA
rights to CIMA's DuraSolv(TM) technology for use with such prescription product.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
SECTION 1
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
meanings set forth below:
"Activities" shall mean the development, manufacturing, marketing,
selling and distributing of the Product in the Territory as contemplated by this
Agreement.
"Affiliates" shall mean, with respect to any Person, any Persons
directly or indirectly controlling, controlled by, or under common control with,
such other Person. For purposes hereof, the term "controlled" (including the
terms "controlled by" and "under common control with"), as used with respect to
any Person, shall mean the direct or indirect ability or power to direct or
cause the direction of management policies of such Person or otherwise
direct the affairs of such Person, whether through ownership of voting
securities or otherwise.
"Alamo" shall have the meaning given in the preamble and shall include
its Affiliates.
"Alamo Trademarks" shall have the meaning given in Section 9.11(d).
"Annual Net Sales" shall mean, for any Calendar Year, the Net Sales for
such Year.
"Active Pharmaceutical Ingredient (API) "shall mean the active
ingredient [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***].
"cGMP" shall mean the then-current standards for the manufacture of
pharmaceuticals, as set forth in the United States Federal Food, Drug and
Cosmetics Act and applicable regulations promulgated thereunder, as amended from
time to time, and such standards of good manufacturing practice as are required
by the European Union and other organizations and governmental agencies in
countries in which Product is intended to be sold, to the extent such standards
are not inconsistent with United States cGMP.
"CIMA" shall have the meaning given in the preamble and shall include
its Affiliates.
"CIMA Intellectual Property" shall mean, collectively, 1) the CIMA
Patents, 2) the CIMA Technology and 3) the CIMA Trademarks.
"CIMA Patents" shall mean United States Patent No. 6,024,981 (entitled
"Rapidly Dissolving Robust Dosage Form") and any patents, patent applications,
and foreign counterparts or equivalents relating thereto, including any
extension, reissue, renewal, reexamination, divisional, continuation or
continuation-in-part of such patents or patent applications.
"CIMA Technology" shall mean all of CIMA's Patents, trade secrets,
technology, know-how and all other information necessary for the manufacture of
the Product including, without limitation that related to CIMA's DuraSolv(TM)
technology.
"CIMA Trademarks" shall mean the CIMA(R) (logo), CIMA LABS INC.(R),
DuraSolv(TM), and Meltabs(R) trademarks.
"Damages" shall mean any and all actions, costs, losses, claims,
liabilities, fines, penalties, demands, damages and expenses, court costs, and
reasonable fees and disbursements of counsel, consultants and expert witnesses
incurred by a party hereto
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(including interest which may be imposed in connection therewith), but shall
not include incidental, consequential, special or punitive damages.
"Defective" shall mean, as to the Product, Product samples or Product
placebos, as the case may be, the failure of such to strictly conform to the
Specifications, this Agreement and all applicable law, including, without
limitation, all FDA regulatory filings and regulations.
"Development Schedule" shall mean the schedule of development
activities set forth on Schedule B hereto.
"DuraSolv(TM)" shall mean CIMA's orally disintegrating tablet
formulations as described in the CIMA Patents
"FDA" shall mean the United States Food and Drug Administration.
"Force Majeure" shall mean acts of God, explosion, fire, flood,
tornadoes, thunderstorms, earthquake or tremor, war whether declared or not,
civil strife, riots or embargo, or changes in applicable laws, regulations or
orders by any government, governmental agency or instrumentality, or other
similar circumstances beyond the control of each party, in each case having the
effect of preventing or prohibiting a party from performing its obligations
hereunder.
"GAAP" shall mean generally accepted accounting principles in the
United States as in effect from time to time.
"Indemnified Party" shall have the meaning given in Section 10.2
hereof.
"Indemnifying Party" shall have the meaning given in Section 10.2
hereof.
"Launch" shall mean the date of first commercial shipment of the
Product by Alamo or its sublicensees to any unaffiliated third party.
"Licensed Assets" shall have the meaning set forth in Section 2.1
hereof.
"Net Sales" means the gross invoice price for Product sold by Alamo or
its sublicensees or subcontractors to a third party customer less the reasonable
and customary accrual-basis deductions from such gross amounts for: (i) normal
and customary trade, cash and other discounts, allowances and credits actually
allowed and taken directly with respect to sales of Product, (ii) credits of
allowances actually granted for damaged goods, returns or rejections of Product;
(iii) sales or similar taxes (including duties or other governmental charges
levied on, absorbed or otherwise imposed directly on the sales of Product,
including, without limitation, value added taxes or other governmental charges
otherwise measured by
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the billing amount) which are included in any billing amount, and excluding any
taxes imposed on or measured by the net income or profits of the selling party;
(iv) uncollectable accounts; (v) charge back payments and rebates granted to
managed health care organizations or to federal, state and local governments,
their agencies, and purchasers and reimbursers or to trade customers, including
but not limited to, wholesalers and chain and pharmacy buying groups; and (vi)
rebates (or equivalents thereof) that are granted to or charged by national,
state, provincial or local governmental authorities in countries other than the
United States. Such amounts shall be determined from the books and records of
Alamo and its sublicensees and subdistributors maintained in accordance with
U.S. GAAP consistently applied, and such amounts shall be calculated using the
same accounting principles used for other Alamo products. Sales between or among
Alamo, its Affiliates and its sublicensees and subdistributors shall be excluded
from the computation of Net Sales if such Affiliates or sublicensees and
subdistributors are not end-users, but Net Sales shall include the subsequent
final sales to third parties by any such Affiliates or sublicensees and
subdistributors. Where (i) Product is sold by Alamo, its Affiliates or their
respective sublicensees and subdistributors other than in an arms-length sale or
as one of a number of items without a separate invoiced price; or (ii)
consideration for Product shall include any non-cash element, the Net Sales
applicable to any such transaction shall be deemed to be Alamo's average Net
Sales price for the applicable quantity of to the Product at that time.
"PDMA" shall mean the Prescription Drug Marketing Act of 1987, as
amended from time to time, together with any rules or regulations promulgated
thereunder.
"Person" shall mean a natural person, a corporation, a partnership, a
trust, a joint venture, a limited liability company, any governmental authority
or any other entity or organization.
"Product" shall mean a pharmaceutical product containing
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] or such other amounts as may be
requested by Alamo, as the case may be, of [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] formulated in DuraSolv(TM).
"Quarter" shall mean, as the case may be, the three months ending on
March 31, June 30, September 30 or December 31 in any Year.
"Specifications" shall mean, at any time, the specifications for the
Product that are included in the Technical Agreement Addendum set forth on
Schedule F.
"Territory" shall mean the world.
"Year" shall mean a calendar year during the term of this Agreement.
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SECTION 2
GRANT OF LICENSES; LICENSE OPTION
2.1 Grant of Licenses.
(a) CIMA hereby grants to Alamo an exclusive license for the term of
this Agreement under the following assets to market, distribute and sell the
Product in the Territory (such assets are referred to herein collectively as the
"Licensed Assets"):
(i) all current and future regulatory filings, approvals,
registrations and governmental authorizations that
relate to the Product in the Territory; and
(ii) the CIMA Intellectual Property.
(b) The license to Alamo will be exclusive in that CIMA will not grant
any licenses of the Licensed Assets to any other Person with respect to the
Product during the term of this Agreement, except as provided in Section 2.1(c).
(c) In the event that Product is not commercially available in any
country of the Territory [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] from the date
of Launch of the Product in the United States, CIMA and Alamo agrees as follows:
(i) CIMA shall be entitled to solicit interest of third
parties in making the Product commercially available in
any such country or countries;
(ii) prior to granting a license to a third party for
Product, CIMA shall provide Alamo a notice of its intent
to grant such license ("License Notice") in a specific
country or countries and shall identify such country or
countries in the License Notice;
(iii) Subject to the provisions of clauses (iv) and (v) below,
Alamo shall provide CIMA a notice within forty-five (45)
days of the License Notice that either: A) Alamo does
not intend to market the Product in such country or
countries, in which case Alamo's license to that country
or countries shall terminate and CIMA shall be free to
license the Product to such third party; or B) Alamo
does intend to market the Product in such country or
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countries, in which case Alamo shall have
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] from the date of its notice to CIMA to
demonstrate significant progress in developing the
Product to market in such country or countries. If Alamo
fails to demonstrate significant progress within
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] or fails thereafter to demonstrate
continued active development in such country or
countries, Alamo's license to the Product in that country
or countries will terminate in 30 days after
re-notification by CIMA that they desire to solicit
interested third parties in such country or countries and
with written agreement by Alamo, such agreement shall not
be unreasonably withheld.
(iv) In the event that CIMA licenses the product to a third
party under this Section 2.1(c), Alamo shall be entitled
to receive reimbursement of [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] of its
out-of-pocket cost for developing the Product (as
determined in accordance with sub paragraph (v) below,
including amounts paid to CIMA) and [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of any
royalties received by CIMA from sales of the Product
under such license to a third party, provided that Alamo
cooperates with CIMA and such third party in obtaining
regulatory approval for the Product, including providing
access to any clinical data available to Alamo and any
patent or other licenses necessary to commercialize the
Product in any country or countries covered under the
license from CIMA.
(v) CIMA and Alamo shall negotiate in good faith the total
amount of Alamo's out-of-pocket cost for developing the
Product and a schedule for reimbursement of such costs.
The reimbursement schedule shall be based on the scope of
the license or licenses granted by CIMA to the third
party or parties and the potential market for the Product
in the country or countries.
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2.2 Sublicenses. Alamo shall have the right to extend the licenses
granted pursuant to this Section 2 in whole or in part to any Affiliate of
Alamo, provided that Alamo is not then in material default with respect to any
of its obligations to CIMA under this Agreement. All the terms and provisions of
this Agreement shall apply to the Affiliate to which this license has been
extended to the same extent as they apply to Alamo, and the operations of the
Affiliate shall be deemed to be the operations of Alamo. In addition, Alamo
shall have the right to extend the licenses granted pursuant to this Section 2
in whole or in part to Persons who are not Affiliates of Alamo with the prior
written consent of CIMA, such consent not to be unreasonably withheld or
delayed.
2.3 Developments, Marketing, Distribution and Sale. After the Launch,
Alamo shall use its commercially reasonable efforts to market, distribute and
sell the Product in the Territory. Such efforts shall be consistent with
industry norms, given the product profile, product potential and the state of
the market, in each case, as existing from time to time.
2.4 Minimum Annual Royalties. Alamo shall endeavor to meet or exceed
the minimum annual royalty targets set forth on Schedule A hereto. Any provision
in this Agreement to the contrary notwithstanding, in the event that CIMA has
performed all of its obligations hereunder and Alamo fails to pay the minimum
annual royalty amounts set forth on Schedule A hereto for any Year following the
Year in which the Product is Launched, then the royalty rate which Alamo pays to
CIMA for such Year shall be modified as noted in Schedule C.
SECTION 3
PRODUCT DEVELOPMENT
3.1 Obligations of CIMA. CIMA shall be responsible for the successful
performance of each of the development activities set forth on Schedule B within
the respective time periods set forth on Schedule B.
3.2 Obligations of Alamo. Alamo shall upon execution hereof pay CIMA
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] which represents the sum of both
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] of the Phase I cost and [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] of the Phase II cost as set forth on the Development
Schedule included as Schedule B and Alamo shall, in a timely fashion following
successful performance by CIMA of each Phase I and Phase II development activity
set forth on Schedule B, pay CIMA the balance of the development fees set forth
in
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Schedule B with respect to such development activity for Phase II. Prior to the
commencement of the development activities in each of Phases III, IV, V and VII,
Alamo shall pay CIMA [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of the development
fees for such phase and shall, in a timely fashion following successful
performance of the development activity or activities for each such phase, pay
CIMA the balance of the development fees set forth in Schedule B with respect to
such development activity or activities for such phase. Alamo shall also
reimburse CIMA for CIMA's certified out-of-pocket costs plus [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] (net of any rebates, credits or refunds) for the
acquisition of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] necessary for CIMA
to perform the development activities described on Schedule B and the supply
activities described in Sections 5.1 and 5.5.
3.3 Regulatory Matters. CIMA represents and warrants that all Product
supplied to Alamo shall be produced under cGMP and in accordance with the
Specifications. CIMA shall furnish Alamo with a Certificate of Analysis with a
cGMP statement to demonstrate that each shipment of Product has been
manufactured under cGMP and other FDA guidelines and that the Specifications
have been met. In addition, Alamo may, at its own expense, audit the facilities
of CIMA, including its processes, records and other facets of the operation as
may be necessary to assure that all applicable regulations have been complied
with, and the Specifications have been met. CIMA shall permit duly authorized
representatives of Alamo to audit all manufacturing and processing operations
related to this Agreement at reasonable times with a prior appointment. The
right to audit shall commence with the Effective Date. These audits will be
conducted to assure compliance with all pertinent acts, regulations, and
guidelines promulgated by the FDA and other regulatory authorities, as well as
standards then in effect in the regulatory environment. Such audits will be
permitted during normal business hours and will be performed with a minimum of
disruption. Alamo's exercise or failure to exercise any of its rights to audit
CIMA's facilities and/or records pursuant to this Section 3.3 shall in no way
alter or affect CIMA's obligations under this Agreement.
SECTION 4
ROYALTY AND MILESTONE PAYMENTS
4.1 Royalty, and Milestone Payments.
(a) Subject to CIMA's supply of Product in accordance with Section 5
hereof, Alamo shall make royalty payments to CIMA in the amounts
set forth on Schedule C.
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(b) Alamo shall make milestone payments to CIMA as set forth on
Schedule D upon successful completion of each milestone listed
therein.
(c) On the Effective Date, Alamo shall pay the License Payment set
forth on Schedule D hereto, which License Payment shall be
refundable on a pro-rata basis if Alamo terminates this Agreement
prior to the second anniversary date hereof by reason of CIMA's
failure to successfully complete any of the development activities
for which it is responsible under the Development Schedule. In such
event, Alamo shall be entitled to a refund of, and CIMA shall
promptly pay to Alamo, an amount equal to the product obtained by
multiplying the License Payment by a fraction, the numerator of
which shall be the number of calendar days remaining between the
date of termination and the second anniversary of this Agreement
and the denominator of which shall be 730.
4.2 Records and Audit. Alamo and its Affiliates shall keep full, true
and accurate books of account containing all particulars that may be necessary
for the purpose of showing the amounts payable to CIMA hereunder. Such books of
account shall be kept at Alamo's principal place of business or the principal
place of business of the appropriate Affiliate of Alamo to which this Agreement
relates. Such books and the supporting data shall be open, at all reasonable
times and upon reasonable notice during the term of this Agreement and for two
(2) years after its termination, to the inspection by a firm of certified public
accountants selected by CIMA and reasonably acceptable to Alamo, for the limited
purpose of verifying Alamo's royalty statements; provided, however, that such
examination shall not take place more often than once each Year, shall not cover
more than the preceding two (2) Years, with no right to audit any period
previously audited and shall not occur during the 90-day period following the
end of Alamo's fiscal Year. Except as otherwise provided in this Section, the
cost of any such examination shall be paid by CIMA. In the event that any such
inspection reveals a deficiency in excess of [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] of the reported royalty for the period covered by the
inspection, Alamo shall promptly pay CIMA the deficiency, plus interest at the
rate of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] per annum (which interest shall
accrue from the date any such deficiency payment is due), and shall reimburse
CIMA for the reasonable fees and expenses paid to such accountants in connection
with their inspection for such period. In the event that any such inspection
reveals a deficiency that is less than [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] of the reported royalty for the period covered by the
inspection, Alamo shall promptly pay CIMA the deficiency, plus interest at the
rate of [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] per
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annum (which interest shall accrue from the date any such deficiency payment is
due). In the event that any such inspection reveals an overpayment, CIMA shall
promptly pay Alamo the overpayment. The parties agree that neither party shall
be required to retain books and records with respect to the above other than
books and records relating to the current Year and the immediately preceding two
(2) Years.
4.3 Quarterly Reports and Payment of Royalties. In any Year following
Launch of the Product, Alamo shall, within sixty (60) days after the end of the
first, second and third Quarter, deliver to CIMA reports, certified by an
authorized official of Alamo, setting forth the Net Sales and total royalties
due under Section 4.1(a) for such Quarter. Alamo shall pay such royalties within
sixty-five (65) days after the end of each Quarter by wire transfer, at CIMA's
cost, or such other method as CIMA may designate. In any Year following Launch
of the Product, Alamo shall, within forty-five (45) days after the end of the
fourth (4th) Quarter, deliver to CIMA reports, certified by an authorized
official of Alamo, setting forth the Net Sales and total royalties due under
Section 4.1(a). Alamo shall pay such royalties within sixty-five (65) days
after the end of the fourth (4th) Quarter by wire transfer, at CIMA's cost, or
such other method as CIMA may designate. If no royalties are due, Alamo shall so
report.
SECTION 5
SUPPLY OF PRODUCT
5.1 Supply of Product.
(a) Subject to Section 5.7, for the term of this Agreement, Alamo
agrees to purchase from CIMA and CIMA agrees to supply Alamo with all of Alamo's
requirements for the Product, Product samples and Product placebos for their
subsequent use, sale, offer for sale, lease or transfer by Alamo.
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] shall be responsible for procurement of
all API necessary for the satisfaction of its obligations under this Agreement.
(b) Alamo agrees to initiate purchases of the Product, Product samples
and Product placebos hereunder by issuing CIMA binding purchase orders not less
than [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***] prior to the required shipping date
set forth therein. CIMA agrees to accept any order issued in accordance with
this Section 5.1(b) and to meet the delivery dates specified therein. All
purchase orders hereunder shall be on Alamo's standard purchase order form (a
copy of which is attached as Schedule E hereto and which shall not, for purposes
of this Agreement
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only, be modified in any material respect without CIMA's prior written consent,
such consent not to be unreasonably withheld or delayed) and shall be directed
to CIMA at the address set forth below. The terms and conditions of purchase
enumerated on the reverse side of such standard purchase order form shall
prevail over any inconsistent or conflicting language as may exist on invoices,
confirmation or order acknowledgment forms of CIMA, provided, however, that in
the event any terms thereof are in conflict, or are inconsistent with any terms
of this Agreement, the terms and conditions hereof shall prevail. No Product
delivered by CIMA shall have a shelf life that is more than [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] less than the maximum shelf life of such product; and,
in any case, all Product delivered by CIMA shall have at least [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] of shelf life remaining upon delivery to Alamo (other
than batches that were under investigation and batches for validation which
shall have at least [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of shelf life
remaining upon delivery to Alamo).
(c) Purchase order quantities shall be equivalent to the batch size of
the Product, Product samples or Product placebos which shall be determined
during the development activities, approximately [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] tablets for the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] dose,
and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***] tablets for the [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] dose, in the aggregate for any single purchase order,
unless otherwise mutually agreed by the parties. The delivery quantity of
tablets for trade shall not exceed a total of 4 batches in any one calendar
month, unless otherwise agreed to by the Parties.
(d) Purchase orders shall clearly state that the order is for tablets
for sale, tablets for samples or placebos, as well as the shipping destination
and address. Alamo agrees that the maximum quantity of tablets for samples shall
not exceed [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] percent of the
quantity of trade tablets in any year, unless otherwise agreed to by the
Parties.
5.2 Identification. Alamo may market the Product under its name, with
its packaging and logo; Alamo will, however, identify CIMA as the supplier in a
fair manner, reasonably acceptable to CIMA. Alamo may use CIMA's name and
derivations thereof in
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promoting, marketing and selling the Product in the Territory; provided,
however, that the particular formulation of any reference to CIMA's name in any
promotional material shall be subject to CIMA's review and consent; and
provided, further, that once the formulation of any such reference has been
reviewed and consented to by CIMA, any subsequent reference to CIMA's name using
such formulation shall not be subject to the further review or consent of CIMA.
All samples shall be clearly marked "for sample use only" or some similar
phrasing suggested by Alamo. CIMA shall design and develop labels for the bulk
tablet containers and Alamo shall review and approve such labels. Such approval
shall not be unreasonably withheld.
5.3 Trade and Sample Product Price. CIMA shall supply Product, Product
samples and Product placebos to Alamo at the price set forth on Schedule G,
subject to adjustment as set forth therein.
5.4 Forecasts, Delivery and Quality.
(a) Alamo shall provide CIMA with 12-month non-binding forecasts within
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] after the end of each Quarter. Such
forecasts shall be revised and extended in each succeeding Quarter.
(b) Delivery of the Product, Product samples and Product placebos shall
be in accordance with the means of transportation, destination and dates set
forth in Alamo's purchase order, and shipped in full batch sized quantities.
CIMA shall arrange for the transportation and insurance of the Product, Product
samples and Product placebos and shall ensure that the transporter maintains the
Product, Product samples and Product placebos in accordance with the labeling of
such Product, Product samples and Product placebos. Delivery shall be F.O.B.
destination, freight prepaid (delivered) and insured and Alamo shall reimburse
CIMA for the cost of transportation and insurance of the Product, Product
samples and Product placebos. Title and risk of loss to all Product, Product
samples or Product placebos shall pass to Alamo upon delivery of the Product,
Product samples or Product placebos to Alamo or its designated agent.
(c) All deliveries of the Product hereunder shall include a Certificate
of Analysis provided by the quality assurance manager of CIMA attesting to the
fact that the Product (i) has been manufactured by a process which complies with
cGMP and (ii) are of quality which is in accordance with criteria established in
the Specifications and all FDA requirements.
(d) The Product, Product samples and Product placebos supplied
hereunder shall have been manufactured by a process which complies with the
Technical Agreement Addendum set forth on Schedule F.
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5.5 Rejection, Replacement and Arbitration.
(a) In the event that Alamo determines that any Product, Product
samples or Product placebos as manufactured and/or packaged by CIMA is
Defective, then: i) [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] from shipment of
Product, Product samples or Product placebos to Alamo or to Alamo's designated
agent for final packaging; or ii) in the event that such Product, Product
samples or Product placebos is Defective [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***], Alamo shall provide to CIMA a written notice of rejection,
specifying in reasonable detail the manner in which the Product is Defective
(the "Notice of Rejection"). If no written Notice of Rejection is given to CIMA
by Alamo within the period specified in clauses (i) and (ii), such Product,
Product samples or Product placebos shall be deemed to have been accepted by
Alamo, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***].
(b) Upon receipt of a Notice of Rejection from Alamo and in order to
minimize any hardship to Alamo's customers, CIMA shall use reasonable commercial
efforts to promptly supply to Alamo a quantity of replacement Product, Product
samples or Product placebos meeting the Specifications equal to the size of the
lot which Alamo claims was Defective so that such replacement Product shall be
received by Alamo within [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] following
CIMA's receipt of Alamo's Notice of Rejection. In the event that such Defective
Product, Defective Product samples or Defective Product placebos are due to: i)
faulty manufacture; faulty release; faulty primary packaging or labeling of the
relevant batch(es) of the Product; or ii) improper shipping to Alamo's
designated agent for final packaging, which fact shall be established on the
basis of the corresponding sealed samples retained by CIMA and/or Alamo's
designated agent for final packaging, utilizing an outside independent
laboratory if necessary, the cost of which is borne by both parties and whose
findings shall be binding or on the basis of process deviation documentation
provided to Alamo, CIMA shall replace such batches free of charge, otherwise
Alamo shall promptly pay CIMA for all such Product, Product samples or Product
placebos, including any Defective Product.
5.6 Invoices and Payment. Upon CIMA's shipment to Alamo or its
designated agent of any Product, Product samples, or Product placebos CIMA shall
be entitled to submit an invoice to Alamo, and Alamo agrees to remit payment
with respect to such invoice within [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] from
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receipt of both such invoice and the shipment to which such invoice relates,
unless within such [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] period Alamo sends
notice of rejection to CIMA; provided, that payment of any invoice pursuant to
this Section 5.6 shall not constitute or be deemed to constitute acceptance of
any Product, Product samples or Product placebos or in any way limit Alamo's
rights to inspect and/or reject any of the foregoing pursuant to Section 5.5
hereof . Within [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of delivery of the
Product, Product samples, or Product placebos Alamo or its designated agent
shall acknowledge the delivery of Product, Product samples, or Product placebos
and shall notify CIMA's shipping department of any obvious shipping damage;
provided, that failure to provided any such notice shall not constitute a waiver
or in any way limit Alamo's rights under Section 5.5 with respect to such
shipment. There will be a [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], of invoice
price, penalty per month, for each month a payment is past due. Such penalty
shall not exceed [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] per annum.
5.7 Supply Disruption; Alternate Manufacturing Site.
(a) CIMA shall supply Alamo with the Product, Product samples and
Product placebos in a timely manner in accordance with the orders and forecasts
received by CIMA pursuant to Sections 5.1(b) and 5.4(a), respectively. In any
consecutive [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] period, should CIMA
fail to supply Alamo with substantially all of the Product, Product samples or
Product placebos ordered for such [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] period
pursuant to Section 5.1(b), Alamo shall have the right to require CIMA to
transfer the manufacture of the Product to another manufacturing facility
designated by Alamo and approved by CIMA, such approval not to be unreasonably
withheld, which manufacturing facility agrees to be bound by Section 9.4 hereof.
CIMA will assume all costs of, take all actions and grant all rights (on a
royalty-free, exclusive, worldwide basis with the right to grant sub-licenses)
with respect to CIMA Technology as shall be necessary to effect such transfer.
Should CIMA cure its failure to supply within [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] of the end of such [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
period, CIMA shall have the right to resume the manufacture of the Product and
Alamo and CIMA shall, at CIMA's expense, transfer the manufacture of the Product
back to CIMA
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within a commercially reasonable amount of time and all rights granted under the
sublicense shall terminate.
(b) If at any time following the Launch CIMA shall not have a second
manufacturing facility, capable of supplying the Product in accordance with the
terms of this Agreement, CIMA and Alamo shall, as soon as practicable following
the date of Launch, qualify a manufacturing plant designated by Alamo as an
alternate FDA approved manufacturing and packaging site for the Product. The
costs of obtaining such approval shall be [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***].
5.8 CIMA's Obligation to Continue Manufacture. If this Agreement
terminates or expires through no breach of Alamo, CIMA shall reasonably
cooperate with Alamo in transferring the manufacture of the Product to Alamo,
its Affiliate or a third-party appointed by Alamo (which manufacturing facility
agrees to be bound by Section 9.4 hereof) and CIMA shall, if requested by Alamo,
continue to supply the Product to Alamo pursuant to the terms of this Agreement
until [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] from the date this Agreement is
terminated or expires pursuant to Section 11.1.
5.9 EXCEPT AS SPECIFICALLY PROVIDED HEREIN, THE PRODUCT WILL BE
SUPPLIED BY CIMA WITH NO WARRANTIES, EXPRESS OR IMPLIED, OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
SECTION 6
[RESERVED]
SECTION 7
REPRESENTATIONS AND WARRANTIES OF CIMA
CIMA hereby represents and warrants to Alamo that:
7.1 Organization, Power and Authority. CIMA is a corporation duly
organized and validly existing under the laws of the State of Delaware. CIMA has
all necessary corporate power and authority to enter into, and be bound by the
terms and conditions of, this Agreement, and to license the Licensed Assets to
Alamo pursuant hereto.
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7.2 Due Authority; No Breach. The execution, delivery and performance
by CIMA of this Agreement and each agreement or instrument contemplated by this
Agreement, and the performance of the transactions contemplated hereby and
thereby, have been duly authorized by all necessary corporate action by CIMA.
This Agreement is, and each agreement or instrument contemplated by this
Agreement, when executed and delivered by CIMA in accordance with the provisions
hereof, will be (assuming the due execution and delivery hereof and thereof by
Alamo) the legal, valid and binding obligation of CIMA, in each case enforceable
against CIMA in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium, reorganization, or
similar laws from time to time in effect which affect the enforcement of
creditors' rights generally and by legal and equitable limitations on the
availability of specific performance and other equitable remedies against CIMA.
All persons who have executed this Agreement on behalf of CIMA, or who will
execute on behalf of CIMA any agreement or instrument contemplated by this
Agreement, have been duly authorized to do so by all necessary corporate action.
Neither the execution and delivery of this Agreement or any such other agreement
or instrument by CIMA, nor the performance of the obligations contemplated
hereby and thereby, will (i) conflict with or result in any violation of or
constitute a breach of any of the terms or provisions of, or result in the
acceleration of any obligation under, or constitute a default under any
provision of the articles of incorporation or by-laws of CIMA or any material
contract or any other material obligation to which CIMA is a party or to which
it is subject or bound, or (ii) violate any judgment, order, injunction, decree
or award of any court, administrative agency, arbitrator or governmental body
against, or affecting or binding upon, CIMA or upon the securities, property or
business of CIMA, or (iii) constitute a violation by CIMA of any applicable law
or regulation of any jurisdiction as such law or regulation relates to CIMA, or
to the property or business of CIMA except for such conflict, acceleration,
default, breach or violation that is not reasonably likely to have a material
adverse effect on CIMA's ability to perform its obligations under this Agreement
or under any agreement or instrument contemplated hereby.
7.3 Intellectual Property. CIMA is the lawful owner of the Licensed
Assets, CIMA can license the Licensed Assets without the consent of any third
party, there is no pending or overtly threatened claim against CIMA asserting
that any of the Licensed Assets infringes or violates the rights of third
parties or that Alamo, by practicing under the Licensed Assets in performing the
Activities, would violate any of the intellectual property rights of any third
party, and nothing has come to the attention of CIMA which has, or reasonably
should have, led CIMA to believe that any of the Licensed Assets infringes or
violates the right of third parties. CIMA has not given any notice to any third
parties asserting infringement by such third parties upon any of the Licensed
Assets. CIMA is not aware of and has not received any communications challenging
the ownership, validity, enforceability or effectiveness of any of the Licensed
Assets. CIMA has not granted any right to any third party relating to the
Activities which would violate the terms of or conflict with the rights granted
to Alamo pursuant to this Agreement.
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7.4 [RESERVED]
7.5 Litigation. There are no pending or, to the best of CIMA's
knowledge, threatened judicial, administrative or arbitral actions, claims,
suits or proceedings pending as of the date hereof against CIMA relating to the
Activities, or the Licensed Assets which, either individually or together with
any other, would have a material adverse effect on the Activities, the Licensed
Assets, or the ability of CIMA to perform its obligations under this Agreement
or any agreement or instrument contemplated hereby. There are no pending, and
CIMA does not presently contemplate bringing, any actions or suits relating to
the Activities, or the Licensed Assets against others.
7.6 Governmental Approval. No consent, approval, waiver, order or
authorization of, or registration, declaration or filing with, any governmental
authority is required in connection with the execution, delivery and performance
of this Agreement, or any agreement or instrument contemplated by this
Agreement, by CIMA or the performance by CIMA of its obligations contemplated
hereby and thereby.
7.7 Brokerage. No broker, finder or similar agent has been employed by
or on behalf of CIMA, and no Person with which CIMA has had any dealings or
communications of any kind is entitled to any brokerage commission, finder's fee
or any similar compensation, in connection with this Agreement or the
transactions contemplated hereby.
SECTION 8
REPRESENTATIONS AND WARRANTIES OF ALAMO
Alamo represents and warrants to CIMA that:
8.1 Organization, Power and Authority. Alamo is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of California . Alamo has all necessary power and authority to enter
into, and be bound by the terms and conditions of, this Agreement and to license
the Licensed Assets.
8.2 Due Authority; No Breach. The execution, delivery and performance
by Alamo of this Agreement, and each agreement or instrument contemplated by
this Agreement, and the performance of the transactions contemplated hereby and
thereby, have been duly authorized by all necessary action by Alamo. This
Agreement is, and each agreement or instrument contemplated by this Agreement,
when executed and delivered by Alamo in accordance with the provisions hereof,
will be (assuming due execution and delivery hereof and thereof by CIMA) the
legal, valid and binding obligation of Alamo, in each case enforceable against
Alamo in accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, moratorium,
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reorganization, or similar laws from time to time in effect which affect the
enforcement of creditor's rights generally and by legal and equitable
limitations on the availability of specific performance and other equitable
remedies against Alamo. All persons who have executed this Agreement on behalf
of Alamo, or who will execute on behalf of Alamo any agreement or instrument
contemplated by this Agreement, have been duly authorized to do so by all
necessary action. Neither the execution and delivery of this Agreement by Alamo,
or any such other agreement or instrument by Alamo, nor the performance of the
obligations contemplated hereby and thereby, will (i) conflict with or result in
any violation of or constitute a breach of any of the terms or provisions of, or
result in the acceleration of any obligation under, or constitute a default
under any provision of its articles of organization or other governing documents
or any material contract or any other material obligation to which Alamo is a
party or to which it is subject or bound, or (ii) violate any judgment, order,
injunction, decree or award of any court, administrative agency, arbitrator or
government body against, or affecting or binding upon, Alamo or upon the
securities, property or business of Alamo, or (iii) constitute a violation by
Alamo of any applicable law or regulation of any jurisdiction as such law or
regulation relates to Alamo or to the property or business of Alamo, except for
such conflict, acceleration, default, breach or violation that is not reasonably
likely to have a material adverse effect on Alamo's ability to perform its
obligations under this Agreement or any agreement or instrument contemplated
hereby.
8.3 Brokerage. No broker, finder or similar agent has been
employed by or on behalf of Alamo and no Person with which Alamo has had any
dealings or communications of any kind is entitled to any brokerage commission,
finder's fee or any similar compensation, in connection with this Agreement or
the transactions contemplated hereby.
8.4 Litigation. There are no pending or, to the best of Alamo's
knowledge, threatened judicial, administrative or arbitral actions, claims,
suits or proceedings pending as of the date hereof against Alamo which, either
individually or together with any other, will have a material adverse effect on
the ability of Alamo to perform its obligations under this Agreement or any
agreement or instrument contemplated hereby.
8.5 Governmental Approval. No consent, approval, waiver, order or
authorization of, or registration, declaration or filing with, any governmental
authority is required in connection with the execution, delivery and performance
of this Agreement, or any agreement or instrument contemplated by this
Agreement, by Alamo or the performance by Alamo of its obligations contemplated
hereby and thereby.
SECTION 9
ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES
9.1 Governmental Filings. CIMA and Alamo each agree to prepare and file
whatever filings, listings, requests or applications are required to be filed
with any
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governmental authority in connection with this Agreement or the Product and to
cooperate with one another as reasonably necessary to accomplish the foregoing.
9.2 Compliance with Law. Alamo and CIMA shall each comply with all
federal, state and local laws and regulations applicable to developing,
approving, manufacturing, marketing and selling the Product in the Territory and
the Licensed Assets or the performance of their respective obligations
hereunder. CIMA and Alamo each shall keep all records and reports required to be
kept by applicable laws and regulations, and each shall make its facilities
available at reasonable times during business hours for inspection by
representatives of governmental agencies. CIMA and Alamo each shall notify the
other within forty-eight (48) hours of receipt of any notice or any other
indication what so ever of any FDA or other governmental agency inspection,
investigation or other inquiry, or other material notice or communication of any
type, involving the Product. Alamo and CIMA shall cooperate with each other
during any such inspection, investigation or other inquiry including, but not
limited to, allowing upon request a representative of the other to be present
during the applicable portions of any such inspection, investigation or other
inquiry and providing copies of all relevant documents. Alamo and CIMA shall
discuss any written response to observations or notifications received in
connection with any such inspection, investigation or other inquiry and each
shall give the other an opportunity to comment upon any proposed response before
it is made. In the event of disagreement concerning the form or content of such
response, however, CIMA shall be responsible for deciding the appropriate form
and content of any response with respect to any of its cited activities and
Alamo shall be responsible for deciding the appropriate form and content of any
response with respect to any of its cited activities.
9.3 Recall. Alamo and CIMA shall consult with one another as to all
decisions concerning recall or withdrawal of the Product from the market,
including, but not limited to, determining whether or not to make any such
recall or withdrawal, the timing and scope thereof, and the means of conducting
any recall or withdrawal. The party requesting any recall or withdrawal must
receive the prior written consent of the other party, such consent not to be
unreasonably withheld, prior to initiating such recall or withdrawal. No consent
shall be necessary if the recall or withdrawal is requested by the FDA or other
governmental authority. CIMA shall bear the costs (including but not limited to,
shipping and product credits) for any recall or withdrawal due to CIMA's failure
to comply with this Agreement, including Product failure relating to CIMA's cGMP
or CIMA's failure to meet the Specifications . The costs for any other recall or
withdrawal shall be the responsibility of Alamo.
9.4 Confidentiality. Alamo shall treat as confidential the Licensed
Assets and all other information of CIMA of which Alamo becomes aware in
connection with this Agreement (collectively, "CIMA Proprietary Information").
Alamo shall neither disclose CIMA Proprietary Information to any third party nor
use CIMA Proprietary Information for any purpose other than as set forth in this
Agreement. CIMA shall treat as confidential all
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other information of Alamo of which CIMA became aware of prior to the Effective
Date or becomes aware in connection with this Agreement (collectively, "Alamo
Proprietary Information"). CIMA shall neither disclose Alamo Proprietary
Information to any third party nor use Alamo Proprietary Information for any
purpose other than as set forth in this Agreement.
Nothing contained herein will in any way restrict or impair either
party's (the "Using Party's") right to use, disclose or otherwise deal with any
Proprietary Information of the other party which:
(a) at the time of disclosure is known to the public or
thereafter becomes known to the public by publication or otherwise
through no fault of the Using Party;
(b) the Using Party can establish was in its possession prior
to the time of the disclosure and was not obtained directly or
indirectly from the other party;
(c) is independently made available to the Using Party by a
third party who is not thereby in violation of a confidential
relationship with the other party known to the Using Party;
(d) is developed by the Using Party independently of the
Proprietary Information received from the other party and the Using
Party can establish such development; or
(e) is information required to be disclosed by legal or
regulatory process; provided, in each case the Using Party timely
informs the other party and uses reasonable efforts to limit the
disclosure and maintain confidentiality to the extent possible and
permits the other party to intervene and contest or attempt to limit
the disclosure.
Alamo shall obtain no right or license of any kind under the CIMA Proprietary
Information except as set forth in this Agreement. CIMA shall obtain no right or
license of any kind under the Alamo Proprietary Information except as set forth
in this Agreement.
9.5 Expenses. CIMA and Alamo shall each bear their own direct and
indirect expenses incurred in connection with the negotiation and preparation of
this Agreement and, except as set forth in this Agreement, the performance of
the obligations contemplated hereby.
9.6 Reasonable Efforts. CIMA and Alamo each hereby agrees to use all
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done all things necessary or proper to make effective the
transactions contemplated by this
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Agreement, including such actions as may be reasonably necessary to obtain
approvals and consents of governmental Persons and other Persons.
9.7 Publicity. Except as expressly contemplated hereby, the parties
agree that no publicity release or announcement concerning the transactions
contemplated hereby shall be issued without the advance written consent of the
other, which consent shall not be unreasonably withheld or delayed, except as
such release or announcement may be required by law, including but not limited
to the Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended, in which case the party making the release or announcement
shall, before making any such release or announcement, afford the other party a
reasonable opportunity to review and comment upon such release or announcement;
provided, that the party making the release or announcement or otherwise
disclosing this Agreement to any governmental agency in accordance with the
foregoing exception shall use its best efforts to obtain confidential treatment
of the terms hereof to the fullest extent permitted by applicable law.
9.8 Cooperation. If either party shall become engaged in or participate
in any investigation, claim, litigation or other proceeding with any third
party, including the FDA, relating in any way to the Product or any of the
Licensed Assets the other party shall cooperate in all reasonable respects with
such party in connection therewith, including, without limitation, using its
reasonable efforts to make available to the other such employees who may be
helpful with respect to such investigation, claim, litigation or other
proceeding, provided that, for purposes of this provision, reasonable efforts to
make available any employee shall be deemed to mean providing a party with
reasonable access to any such employee at no cost for a period of time not to
exceed 24 hours (e.g., three 8-hour business days). Thereafter, any such
employee shall be made available for such time and upon such terms and
conditions (including, but not limited to, compensation) as the parties may
mutually agree.
9.9 Competition; No Sale for Resale. Neither Alamo nor any sub-licensee
of Alamo shall knowingly sell any Product to anyone in the Territory for
subsequent distribution or resale outside the Territory and each shall take all
reasonable precautions to prevent such distribution or resale outside the
Territory. Except as provided in 2.1(c), CIMA shall not knowingly sell any
Product to anyone in the Territory or outside the Territory for subsequent
distribution or resale in the Territory and CIMA shall take all reasonable
precautions to prevent such distribution or resale in the Territory.
9.10 Conflicting Rights. CIMA shall not grant any right to any third
party relating to the Activities which would violate the terms of or conflict
with the rights granted to Alamo pursuant to this Agreement.
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9.11 Patent and Trademark Maintenance.
(a) CIMA hereby represents and warrants that, to the best of
its knowledge, the CIMA Technology, when used with the Active
Pharmaceutical Ingredient, includes all the technology, patents,
know-how, trade secrets and other intellectual property necessary to
manufacture the Product. Any improvement (whether or not patentable) in
the technology used in manufacturing the Product shall be owned by the
Party who discovers or invents such improvement.
(b) CIMA shall be solely responsible for filing, prosecuting,
and maintaining all of the CIMA Patents, and CIMA shall pay the costs
associated therewith. CIMA shall file, prosecute, and maintain all CIMA
Patents so as to fully continue the benefits under the licenses granted
to Alamo hereunder. CIMA may, however, discontinue prosecuting or
maintaining any CIMA Patent if (i) CIMA has a valid business reason to
do so, and (ii) CIMA notifies Alamo of this decision in which event,
Alamo shall have the right, but not the obligation, to prosecute or
maintain any such patent, with the full cooperation of CIMA, in Alamo's
name and at Alamo's expense.
(c) CIMA shall be solely responsible for filing, prosecuting,
and maintaining all CIMA Trademarks, and CIMA shall pay the costs
associated therewith. All registrations, variations, logos, goodwill
and other rights under or acquired through use of the CIMA Trademarks
shall accrue and belong to CIMA. Except as provided herein, Alamo shall
have no rights to use the CIMA Trademarks. Alamo will not use in its
business, in or outside of the Territory, any other ▇▇▇▇ or name which
is similar to or nearly resembles any of the CIMA Trademarks in use by
CIMA to indicate the source and origin of the CIMA Technology as to be
likely to cause deception or confusion. Alamo recognizes that CIMA is
the owner of all CIMA Trademarks used in commerce to indicate the
source of the CIMA Technology and agrees that the CIMA Trademarks shall
remain vested in CIMA both during the term of this Agreement and
thereafter. Alamo shall not contest the validity of the CIMA Trademarks
or CIMA's ownership of the CIMA Trademarks. Use of the CIMA Trademarks
by Alamo in conjunction with the manufacture, use, and sale of the
Product and all goodwill related thereto shall inure to the benefit of
CIMA for purposes of building the longevity and extent of use of the
CIMA Trademarks.
(d) Alamo shall be solely responsible for filing, prosecuting,
and maintaining all trademarks it develops or owns for the Product (the
"Alamo Trademarks"), and Alamo shall pay the costs associated
therewith. All registrations, variations, logos, goodwill and other
rights under or acquired through use of the Alamo Trademarks shall
accrue and belong to Alamo. CIMA shall have no rights to use the Alamo
Trademarks. CIMA will not use in its business, in or outside of the
Territory, any other ▇▇▇▇ or name which is similar to or nearly
resembles the Alamo
-22-
Trademarks in use by Alamo in a manner that is likely to cause
deception or confusion. CIMA recognizes that Alamo is the owner of all
of the Alamo Trademarks used in commerce to indicate the source of the
Product and agrees that the Alamo Trademarks shall remain vested in
Alamo both during the term of this Agreement and thereafter. CIMA shall
not contest the validity of the Alamo Trademarks or Alamo's ownership
of the Alamo Trademarks. Use of the Alamo Trademarks by Alamo in
conjunction with the manufacture, use, and sale of the Product and all
goodwill related thereto shall inure to the benefit of Alamo for
purposes of building the longevity and extent of use of the Alamo
Trademarks.
(e) Alamo and CIMA agree that, where applicable and
appropriate, all packaging of the Product shall identify (i) the number
of the CIMA Patents and CIMA as the owner thereof and (ii) Alamo as the
owner of the Alamo Trademarks.
(f) Any provisions in this Agreement to the contrary
notwithstanding, Alamo acknowledges that, for all purposes, CIMA is the
owner of the CIMA Technology.
9.12 Infringement; Enforcement of Proprietary Rights.
(a) Infringement of Patent Rights. Each party shall promptly
notify the other of any alleged infringement by third parties of any
CIMA Patent and provide any information available to that party
relating to such alleged infringement.
(i) Within a reasonable time (not to exceed 30 days)
following such notification, the parties shall meet to discuss
a desirable response to such infringement and enter into good
faith negotiations to determine an agreed upon course of
action to end such infringement and the appropriate allocation
of any costs or recoveries associated therewith.
(ii) If the parties are unable to agree upon the
course of action or the appropriate allocation of any costs
associated therewith, CIMA [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] such alleged
infringement and [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] any infringement of such rights that
materially affect Alamo's rights pursuant to this Agreement,
including, but not limited to, bringing suit against such
third party infringer. In the event that CIMA does not bring
suit against such third party infringer, Alamo may bring suit
against such third party infringer on CIMA's behalf and Alamo
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE
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SECURITIES AND EXCHANGE COMMISSION.***] in bringing such suit
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] to
CIMA under this agreement.
(b) Procedures. No settlement, consent judgment or other
voluntary final disposition of any suit contemplated by Section 9.12(a)
may be entered into without the consent of each party, which consent
shall not be unreasonably withheld or delayed. Unless otherwise agreed
by the parties, to the extent that any suit contemplated by Section
9.12(a) is directly related to the Product, any recovery of Damages to
the extent related to the Product (net of the respective out-of-pocket
legal fees and associated costs) in any such suit shall be allocated
among the parties hereto assuming that such Damages constitute Net
Sales by Alamo hereunder. In the event of any infringement suit against
a third party brought by either party pursuant to this Section 9.12,
the party not bringing such suit shall cooperate in all respects,
execute any documents reasonably necessary to permit the other party to
prosecute such suit, and to the extent reasonable, shall make available
its employees and relevant records to provide evidence for such suit.
9.13 Referral of Orders and Inquiries. Except as provided in 2.1(c),
CIMA shall refer all Persons sending orders or making inquiries regarding the
Product within the Territory to Alamo and shall promptly notify Alamo of the
name of each such Person and the nature of the inquiry of such Person.
SECTION 10
INDEMNIFICATION
10.1 Indemnification.
(a) CIMA shall indemnify, defend and hold Alamo (and its directors,
officers, employees, and Affiliates) harmless from and against any and all
Damages incurred or suffered by Alamo (and its directors, officers, employees,
and Affiliates) as a consequence of:
(i) any breach of any representation, warranty
or covenant made by CIMA in this Agreement or any agreement,
instrument or document delivered by CIMA pursuant to the terms
of this Agreement;
(ii) any failure to perform to perform duly and
punctually any covenant, agreement or undertaking on
the part of Alamo contained in this Agreement; or
-24-
(iii) any act or omission of CIMA with respect to
the operation of CIMA's business, or handling,
manufacturing, or use of the Product by CIMA; or
(iv) any claim or demand that the manufacture,
use, sale or offer for sale of the Product by reason
of CIMA Technology infringes any United States or
foreign patent.
(b) Alamo shall indemnify, defend and hold CIMA (and its
directors, officers, employees, and Affiliates) harmless from and against any
and all Damages incurred or suffered by CIMA (and its directors, officers,
employees, and Affiliates) as a consequence of:
(i) any breach of any representation, warranty
or covenant made by Alamo in this Agreement or any agreement,
instrument or document delivered by Alamo pursuant to the
terms of this Agreement;
(ii) any failure to perform to perform duly and
punctually any covenant, agreement or undertaking on
the part of Alamo contained in this Agreement; or
(iii) [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] of Alamo with respect to the
operation of Alamo's business or the handling, manufacturing,
sale, consumption or use of the Product by Alamo.
10.2 Notice and Opportunity To Defend. Promptly after receipt by a
party hereto of notice of any claim which could give rise to a right to
indemnification pursuant to Section 10.1. such party (the "Indemnified Party")
shall give the other party (the "Indemnifying Party") written notice describing
the claim in reasonable detail. The failure of an Indemnified Party to give
notice in the manner provided herein shall not relieve the Indemnifying Party of
its obligations under this Section, except to the extent that such failure to
give notice materially prejudices the Indemnifying Party's ability to defend
such claim. The Indemnifying Party shall have the right, at its option, to
compromise or defend, at its own expense and by its own counsel, any such matter
involving the asserted liability of the party seeking such indemnification. If
the Indemnifying Party shall undertake to compromise or defend any such asserted
liability, it shall promptly (and in any event not less than 10 days after
receipt of the Indemnified Party's original notice) notify the Indemnified Party
in writing of its intention to do so, and the Indemnified Party agrees to
cooperate fully with the Indemnifying Party and its counsel in the compromise or
defense against any such asserted liability. All reasonable costs and expenses
incurred in connection with such cooperation shall be borne by the Indemnifying
Party, as incurred by the Indemnified Party.
-25-
If the Indemnifying Party elects not to compromise or defend the asserted
liability, fails to notify the Indemnified Party of its election to compromise
or defend as herein provided, fails to admit its obligation to indemnify under
this Agreement with respect to the claim, or, if in the reasonable opinion of
the Indemnified Party, the claim could result in the Indemnified Party becoming
subject to injunctive relief or relief other than the payment of money damages
that could materially adversely affect the ongoing business of the Indemnified
Party in any manner, the Indemnified Party shall have the right, at its option,
to pay, compromise or defend such asserted liability by its own counsel and its
reasonable costs and expenses shall be included as part of the indemnification
obligation of the Indemnifying Party hereunder. Notwithstanding the foregoing,
neither the Indemnifying Party nor the Indemnified Party may settle or
compromise any claim over the objection of the other. In any event, the
Indemnified Party and the Indemnifying Party may participate, at their own
expense, in the defense of such asserted liability. If the Indemnifying Party
chooses to defend any claim, the Indemnified Party shall make available to the
Indemnifying Party any books, records or other documents within its control that
are necessary or appropriate for such defense. Notwithstanding anything to the
contrary in this Section 10.2, (i) the party conducting the defense of a claim
shall (A) keep the other party informed on a reasonable and timely basis as to
the status of the defense of such claim (but only to the extent such other party
is not participating jointly in the defense of such claim), and (B) conduct the
defense of such claim in a prudent manner, and (ii) the Indemnifying Party shall
not cease to defend, settle or otherwise dispose of any claim without the prior
written consent of the Indemnified Party (which consent shall not be
unreasonably withheld). Upon the final determination of liability and the amount
of the indemnification payment under this Section 10, the appropriate party
shall pay to the other, as the case may be, within 10 business days after such
determination, the amount of any claim for indemnification made hereunder.
10.3 Survival. The provisions of Section 10 shall survive any
termination of this Agreement. Each Indemnified Party's rights under Section 10
shall not be deemed to have been waived or otherwise affected by such
Indemnified Party's waiver of the breach of any representation, warranty,
agreement or covenant contained in or made pursuant this Agreement, unless such
waiver expressly and in writing also waives any or all of the Indemnified
Party's right under Section 10.
10.4 Insurance. Alamo shall maintain throughout the term of this
Agreement comprehensive general liability insurance, including product liability
insurance underwritten by an insurance company reasonably acceptable to CIMA.
This insurance coverage shall provide protection of not less than ten ($10)
million, combined single limit for personal injury and property damage (on a per
occurrence basis) with CIMA named as an additional insured. Such liability
insurance shall be maintained on an occurrence basis to provide such protection
after expiration or termination of the policy itself and/or this Agreement.
Alamo shall furnish to CIMA certificates issued by the insurance company setting
forth the amount of the liability insurance and a provision that CIMA shall
receive thirty (30) days written notice prior to termination, reduction or
modification of coverage.
-26-
SECTION 11
TERMINATION
11.1 Termination. The term of this Agreement shall begin upon the
Effective Date and, unless sooner terminated as hereinafter provided, shall end
upon the expiration of the last CIMA Patent to expire or, if later, the
expiration of any other patent resulting from the development process
contemplated hereby. Upon expirationof this Agreement, CIMA will, if requested
by Alamo, grant Alamo on a royalty free basis a license to continue to use the
CIMA Intellectual Property formerly covered by the CIMA Patents for the
manufacture of Product and, should Alamo desire to have CIMA continue the
manufacture of Product beyond the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] period
provided for in Section 5.8, CIMA agrees to enter into good faith negotiations
with Alamo to discuss terms of manufacture. Notwithstanding the foregoing, this
Agreement may be terminated as follows:
(a) Termination for Insolvency. If either Alamo or CIMA (i)
makes a general assignment for the benefit of creditors or becomes
insolvent; (ii) files an insolvency petition in bankruptcy; (iii)
petitions for or acquiesces in the appointment of any receiver, trustee
or similar officer to liquidate or conserve its business or any
substantial part of its assets; (iv) commences under the laws of any
jurisdiction any proceeding involving its insolvency, bankruptcy,
reorganization, adjustment of debt, dissolution, liquidation or any
other similar proceeding for the release of financially distressed
debtors; or (v) becomes a party to any proceeding or action of the type
described above in (iii) or (iv) and such proceeding or action remains
undismissed or unstayed for a period of more than 60 days, then the
other party may by written notice terminate this Agreement in its
entirety with immediate effect.
(b) Termination for Default. In addition to Alamo's rights
under Section 4.1(c), Alamo and CIMA each shall have the right to
terminate this Agreement for default upon the other's failure to comply
in any material respect with the terms and conditions of this
Agreement. At least 60 days prior to any such termination for default,
the party seeking to so terminate shall give the other written notice
of its intention to terminate this Agreement in accordance with the
provisions of this Section 11.1(b), which notice shall set forth the
default(s) which form the basis for such termination. If the defaulting
party fails to correct such default(s) within 60 days after receipt of
notification, then such party immediately may terminate this Agreement.
Notwithstanding the foregoing, if Alamo fails to pay any invoice for
development fees payable pursuant to Section 3.2 above with respect to
one of the development activities set forth on the Development Schedule
within 45 days after receipt of such invoice following the successful
completion of such development
-27-
activity, CIMA shall have the right to terminate this Agreement by
delivering written notice of such election to terminate and this
Agreement shall terminate on the thirtieth (30th) day following the
receipt of such notice by Alamo, unless prior to such thirtieth (30th)
day Alamo shall have cured such failure to pay or shall have delivered
to CIMA written notice that it disputes that such development activity
has been successfully completed. This Section 11.1(b) shall not be
exclusive and shall not be in lieu of any other remedies available to a
party hereto for any default hereunder on the part of the other party.
(c) Continuing Obligations. Termination of this Agreement
for any reason shall not relieve the parties of any obligation accruing
prior thereto with respect to the Product and any ongoing obligations
hereunder with respect to the remaining Product and shall be without
prejudice to the rights and remedies of either party with respect to
any antecedent breach of the provisions of this Agreement. Without
limiting the generality of the foregoing, no termination of this
Agreement, whether by lapse of time or otherwise, shall serve to
terminate the obligations of the parties hereto under Sections 9.3,
9.4, 9.6, 9.8, 10, 11.1(c) and 12 hereof, and such obligations shall
survive any such termination.
SECTION 12
MISCELLANEOUS
12.1 Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns; provided, however, that neither CIMA nor Alamo
may assign any of its rights, duties or obligations hereunder without the prior
written consent of the other, except that no prior written consent shall be
required in the event that a third party acquires substantially all of the
assets or outstanding shares of, or merges with, Alamo or CIMA, as the case may
be.
12.2 Notices. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given if delivered by hand or facsimile and confirmed in writing, or
mailed first class, postage prepaid, by registered or certified mail, return
receipt requested (mailed notices and notices sent by facsimile shall be deemed
to have been given on the date received) as follows:
If to CIMA, as follows:
CIMA LABS INC.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
Attention: President and CEO
-28-
If to Alamo, as follows:
Alamo Pharmaceuticals, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
with a copy to:
Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
or in any case to such other address or addresses as hereafter shall be
furnished as provided in this Section 12.2 by any party hereto to the other
party.
12.3 Waiver; Remedies. Any term or provision of this Agreement may
be waived at any time by the party entitled to the benefit thereof by a written
instrument executed by such party. No delay on the part of CIMA or Alamo in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of either CIMA or Alamo of any right,
power or privilege hereunder operate as a waiver of any other right, power or
privilege hereunder nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder.
12.4 Survival of Representations. Each of the representations and
warranties made in this Agreement shall survive the term of this Agreement.
12.5 Independent Contractors. The parties hereto are independent
contractors and nothing contained in this Agreement shall be deemed to create
the relationship of partners, joint venturers, or of principal and agent,
franchiser and franchisee, or of any association or relationship between the
parties other than as expressly provided in this Agreement. Alamo acknowledges
that it does not have, and Alamo shall not make representations to any third
party, either directly or indirectly, indicating that Alamo has any authority to
act for or on behalf of CIMA or to obligate CIMA in any way whatsoever. CIMA
acknowledges that it does not have, and it shall not make any representations to
any third party, either directly or indirectly, indicating that it has any
authority to act for or on behalf of Alamo or to obligate Alamo in any way
whatsoever.
-29-
12.6 Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements or understandings of the parties relating
thereto.
12.7 Amendment. This Agreement may be modified or amended only by
written agreement of the parties hereto.
12.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute a single instrument.
12.9 Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of New York excluding any choice of law
rules which may direct the application of the law of another state.
12.10 Dispute Resolution. To the extent a dispute arises with
respect to a term or provision of this Agreement which is not subject to a
specific time period or remedy, the Parties will use all reasonable efforts to
resolve in an amicable fashion any dispute, claim or controversy that may arise
relating to the terms or performance of this Agreement. If the Parties are
unable to resolve such dispute within thirty (30) days after initial notice,
either party, by notice to the other, have such dispute referred to a senior
officer of each company. Such officers shall attempt to resolve the dispute by
good faith negotiation within thirty (30) days after receipt of such notice.
12.11 Captions. All section titles or captions contained in this
Agreement, in any Schedule referred to herein or in any Exhibit annexed hereto,
and the table of contents, if any, to this Agreement are for convenience only,
shall not be deemed a part of this Agreement and shall not affect the meaning or
interpretation of this Agreement.
12.12 No Third-Party Rights. No provision of this Agreement shall be
deemed or construed in any way to result in the creation of any rights or
obligation in any Person not a party or not affiliated with a party to this
Agreement.
12.13 Severability. If any provision of this Agreement is found or
declared to be invalid or unenforceable by any court or other competent
authority having jurisdiction, such finding or declaration shall not invalidate
any other provision hereof, and this Agreement shall thereafter continue in full
force and effect.
12.14 Attachments. All Schedules, Exhibits and other attachments to
this Agreement are by this reference incorporated herein and made a part of this
Agreement.
-30-
12.15 Force Majeure. In the event that a party is prevented from
carrying out its obligations under this Agreement by an event of Force Majeure,
then such party's performance of its obligations under this Agreement shall be
excused during the period of such event and for a subsequent reasonable period
of recovery.
-31-
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered on the day and year first above written.
CIMA LABS INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇ Ph.D.
Title: President and CEO
ALAMO PHARMACEUTICALS, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Financial Officer
Schedule A
to Development, License
and Supply Agreement
Minimum Annual Royalty Targets
Pursuant to Section 4.1(c), Alamo shall endeavor to meet or exceed the minimum
annual royalty targets set forth below. References to Years below are to full
calendar years commencing at least six (6) months after the date on which the
Product is launched.
Minimum Annual Royalty Targets
----------------------------------------------------------------
YEAR MINIMUM ROYALTY TARGETS
----------------------------------------------------------------
1 $[***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]
----------------------------------------------------------------
2 $[***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]
----------------------------------------------------------------
3 $[***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]
----------------------------------------------------------------
4 $[***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]
----------------------------------------------------------------
5 $[***CONFIDENTIAL TREATMENT REQUESTED,
and thereafter PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***]
----------------------------------------------------------------
Schedule B
to Development, License
and Supply Agreement
Development Schedule
-------------------------------------------------------
ACTIVITY DURATION COST
Phase
-------------------------------------------------------
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]
Schedule C
to Development, License
and Supply Agreement
Royalty Rates
Pursuant to Section 4.3, Alamo shall pay to CIMA a percentage of Annual
Net Sales, if any, actually recorded during such Year, as indicated on the
following schedule. If Alamo does not meet the Minimum Annual Royalty Target set
forth in Schedule A for any Year, then the royalty rate paid for such Year shall
be that rate noted in Tier 2
--------------------------------------------------------------------
TIER ROYALTY RATE
--------------------------------------------------------------------
Tier 1 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] of Net Sales
--------------------------------------------------------------------
Tier 2 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] of Net Sales
--------------------------------------------------------------------
Schedule D
to Development, License
and Supply Agreement
License and Milestone Payments
Pursuant to Section 4.1, Alamo shall pay CIMA the License Payment of
$[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] upon the Effective Date and the
milestone payments set forth below (each a "Milestone Payment") within thirty
(30) days of successful completion of each research and development milestones.
MILESTONE ACTIVITY MILESTONE PAYMENT
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]
Schedule E
to Development, License
and Supply Agreement
Alamo Purchase Order
[See Attached]
Schedule F
to Development, License
and Supply Agreement
Technical Agreement Addendum
CIMA will be accountable for all aspects of the Product research and
development and manufacturing other than (i) the design and conduct of clinical
trials, (ii) the assembly and filing of the regulatory documents and (iii) the
final packaging and sales of Product. Specifications will be mutually agreed by
both parties on or prior to the final regulatory filing. To the extent that a
more detailed allocation of pharmaceutical responsibility is required in
connection with the final packaging and/or marketing of the product in any
jurisdiction in the Territory, the Parties shall amend this Schedule F as
necessary.
Schedule G
to Development, License
and Supply Agreement
Cost of Goods
Pursuant to Sections 5.1, 5.3 and 5.6, Alamo shall pay to CIMA the
amounts indicated on the following schedule in respect of CIMA's manufacturing
obligations hereunder.
TRADE and SAMPLES (cost per tablet)
---------------------------------------------------------------
POTENCY TOTAL COST(1)(2)(3) PACKAGING
---------------------------------------------------------------
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
1) The cost per tablet does not include the cost of [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***], as noted in Section 3.2.
2) Per tablet costs may be reviewed annually. Any increase in cost will
reflect documented increase in raw material(s) and be subject to
Alamo's acceptance, but increases shall not exceed the PPI increase for
that year.
3) Final cost per tablet will be determined upon completion of
formulation development and shall not exceed the costs noted in this
table
PLACEBOS (cost per tablet)
---------------------------------------------------------------
PLACEBO TOTAL COST* PACKAGING
TYPE
---------------------------------------------------------------
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
TABLE OF CONTENTS
SCHEDULES
Schedule A Minimum Annual Royalty Targets
Schedule B Development Schedule
Schedule C Royalty Rates
Schedule D License and Milestone Payments
Schedule E Alamo Purchase Order
Schedule F Technical Agreement Addendum
Schedule G Cost Of Goods
i
AMENDMENT #1 TO DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT
Whereas, CIMA LABS INC. (CIMA) and Alamo Pharmaceuticals Inc. (Alamo) have
entered into a Development License and Supply Agreement dated March 2, 2001
(DLSA) regarding the development, licensing and supply of a pharmaceutical
product containing [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] and CIMA's
DuraSolv(TM) technology;
Whereas, CIMA has been conducting research according to Schedule B of the DLSA
and such research has indicated that CIMA's DuraSolv technology [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***]; and
Whereas, CIMA and Alamo have decided to utilize CIMA's OraSolv(R) technology to
develop a pharmaceutical product containing [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] and that certain changes to the DLSA will therefore be required;
Therefore, for good and valid consideration, the Parties agree as follows:
1) Schedule G of the DLSA is hereby replaced by Schedule G-1 of this
Amendment;
2) Schedule B of the DLSA is hereby replaced by Schedule B-1 of this
Amendment
3) Schedule D of the DLSA is hereby replaced by Schedule D-1 of this
Amendment;
4) In the definition of "CIMA Patents" replace "United States Patent No.
6,024,981 (entitled "Rapidly Dissolving Robust Dosage Form")" with
"United States Patent No. 5,178,878 (entitled "Effervescent Dosage
Form with Microparticles")";
5) In the definition of "CIMA Technology" replace "DuraSolv(TM)" with
"OraSolv(R)";
6) In the definition of "CIMA Trademarks" replace "DuraSolv(TM)" with
"OraSolv(R)";
7) In the definition of "DuraSolv(TM)" replace "DuraSolv(TM)" with
"OraSolv(R)"; and
8) In the definition of "Product" replace "DuraSolv(TM)" with
"OraSolv(R)".
9) In all other respects, the terms and conditions of the Development
License and Supply Agreement dated March 2, 2001 shall remain in full
force and effect. Capitalized terms in this Amendment shall have the
same meaning as in the Development License and Supply Agreement.
CIMA LABS INC. Alamo Pharmaceuticals, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------- -------------------------------
(Signature) (Signature)
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------- -------------------------------
(Print or Type Name) (Print or Type Name)
Title: President & CEO Title: Director
------------------------ ------------------------
Date: 4 January 2002 Date: 15 January 2002
------------------------- -------------------------
SCHEDULE B-1
Development Schedule
---------------------------------------------------------------------------
ACTIVITY DURATION COST
PHASE
---------------------------------------------------------------------------
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]
SCHEDULE G-1
TRADE AND SAMPLES (COST PER TABLET)
------------------------------------------------------------------------
POTENCY TOTAL COST(1)(2)(3) PACKAGING
------------------------------------------------------------------------
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]
(1) The cost per tablet does not include the cost of [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***], as noted in Section 3.2.
(2) Per tablet costs may be reviewed annually. Any increase in cost will
reflect documented increase in raw material(s) and be subject to
Alamo's acceptance, but increases shall not exceed the PPI increase
for that year.
(3) Final cost per tablet will be determined upon completion of
formulation development and shall not exceed the costs noted in this
table.
Placebos (cost per tablet)
---------------------------------------------------------------
POTENCY TOTAL COST PACKAGING
---------------------------------------------------------------
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]
SCHEDULE D-1
Pursuant to Section 4.1, Alamo shall pay CIMA the License Payment of
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] upon the Effective Date and the
milestone payments set forth below (each a "Milestone Payment") with in thirty
(30) days of successful completion of each research and development milestones.
Milestone Activity Milestone
Payment
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]
* 1/10th scale batches will be manufactured using equipment that is identical in
design and principle to full-scale equipment per regulatory requirements