<PAGE>
Note: Certain portions of this document have been marked "[C.I.]"
to indicate
that confidential treatment has been requested for this
confidential
information. The confidential portions have been omitted and filed
separately
with the Securities and Exchange Commission.
EXHIBIT 10(H)
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S>
<C>
1.
DEFINITIONS..........................................................
1
2. THE DEVELOPMENT AND
COMMERCIALIZATION PROGRAMS....................... 5
2.1
Overview of the
Development Program............................ 5
2.2
Altana
Responsibilities under the Development Program..........
5
2.3
Company
Responsibilities under the Development Program.........
6
2.4
Overview of the
Commercialization Program...................... 6
2.5
Company
Responsibilities under the Commercialization Program...
6
2.6
Altana
Responsibilities under each Commercialization Program...
7
2.7
Conduct of
Development Program and Commercialization
Activities.....................................................
7
2.8
Manufacture and
Supply of the Product.......................... 7
2.9
Non-Conforming
Deliveries...................................... 9
2.10
Payment
Responsibilities.......................................
9
3.
GOVERNANCE...........................................................
9
3.1
General........................................................
9
3.2
Certain
Matters................................................
9
4. ROYALTIES; MINIMUM
ROYALTIES......................................... 10
4.1
Royalties to
Altana............................................ 10
4.2
Bartering
Prohibited........................................... 10
4.3
Minimum
Royalties..............................................
10
5. PAYMENTS AND
REPORTS.................................................
10
5.1
Payments.......................................................
10
5.2
Royalty
Payments...............................................
10
5.3
Payment of
Development Costs................................... 11
5.4
Mode of
Payment................................................
11
5.5
Records
Retention..............................................
11
5.6
Audits.........................................................
11
5.7
Taxes..........................................................
12
6. INTELLECTUAL
PROPERTY................................................
12
6.1
License Grant to
the Company................................... 12
6.2
License Grant to
Altana........................................ 12
6.3
Altana's
Ownership............................................. 12
6.4
Company's
Ownership............................................ 12
6.5
Patent
Prosecution and Maintenance of Inventions...............
12
6.6
Patent and
Trademark Enforcement............................... 13
6.7
Infringement
Actions by Third Parties.......................... 13
7. ADVERSE REACTION
REPORTING........................................... 14
7.1
Adverse Reaction
Reporting..................................... 14
8. REPRESENTATIONS AND
WARRANTIES....................................... 14
8.1
Representations
and Warranties of Both Parties................. 14
8.2
Warranties by
Altana........................................... 15
8.3
Warranties by
the Company...................................... 15
8.4
Disclaimer.....................................................
15
9. PRODUCT
RECALLS......................................................
15
9.1
...............................................................
15
9.2
...............................................................
15
9.3
...............................................................
15
10. PUBLICATION;
CONFIDENTIALITY.........................................
15
</TABLE>
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<TABLE>
<S>
<C>
10.1
Notification and
Review with Respect to Altana and the
Company........................................................
15
10.2
Confidentiality:
Exceptions.................................... 16
10.3
Exceptions to
Obligation....................................... 16
10.4
Remedies.......................................................
17
11. INDEMNIFICATION;
INSURANCE........................................... 17
11.1
By
Altana......................................................
17
11.2
By the
Company.................................................
17
11.3
Notice.........................................................
17
11.4
Complete
Indemnification....................................... 17
11.5
Limitation on
Liability........................................ 17
11.6
Insurance......................................................
18
12. TERM;
TERMINATION....................................................
18
12.1
Term...........................................................
18
12.2
Termination for
Cause.......................................... 18
12.3
Termination in
Connection with Bankruptcy...................... 18
12.4
Effect of Expiration
or Termination............................ 18
12.5
Accrued Rights:
Surviving Obligations.......................... 19
13. FORCE
MAJEURE........................................................
19
14.
MISCELLANEOUS........................................................
19
14.1
Relationship of
Parties........................................ 19
14.2
Assignment.....................................................
19
14.3
Books and
Records.............................................. 19
14.4
Further
Actions................................................
19
14.5
Notice.........................................................
20
14.6
Use of
Name....................................................
20
14.7
Public
Announcements...........................................
20
14.8
Waiver.........................................................
21
14.9
Compliance with
Law............................................ 21
14.10
Severability...................................................
21
14.11
Amendment......................................................
21
14.12
Governing Law..................................................
21
14.13
Arbitration....................................................
21
14.14
Entire Agreement...............................................
22
14.15
Parties in Interest............................................
22
14.16
Descriptive Headings...........................................
22
14.17
Counterparts...................................................
22
</TABLE>
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EXHIBIT 10(H)
THIS
DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT (this "Agreement"),
dated
the _____ day of __________ 2005 (the "Effective Date"), is entered
into by and
between Sirius Laboratories Inc., a corporation organized and
existing under the
laws of the State of Illinois, having offices located at 100
Fairway Drive,
Suite 130, Vernon Hills, Illinois 60061, (the "Company" or
"Sirius") and Altana
Inc., a corporation organized and existing under the laws of New
York with
offices located at 60 Baylis Rd, Melville, New York 11747
("Altana").
PRELIMINARY STATEMENTS
A.
Altana owns and has all right, title and interest in, or has
acquired
the exclusive rights to the Altana Product IP (as defined
below).
B.
The Company owns and has all right, title and interest in, or
has
acquired the exclusive rights to the Company Technology IP (as
defined below).
C.
Altana and the Company collectively possess specialized skills,
knowledge, and expertise in the development, marketing and sale of
products used
in the treatment of diseases of the human skin, including without
limitation,
[c.i.] and desire to enter into a development and license agreement
regarding
the further development and the marketing of certain such products,
the initial
development of which has been undertaken by Altana.
D.
In return for certain rights in the Product (as defined below),
the
Company will, subject to the terms and conditions of this
Agreement, (1) support
the Development Program (as defined below) financially as well as
by providing a
license under the Company Technology IP (as defined below), and (2)
pay Altana
certain royalties as provided for herein.
E.
Altana desires to continue its development of the Product and to
apply
its skills, knowledge, and expertise in assisting the Company in
obtaining the
regulatory approval of the Product under the terms and conditions
set forth in
this Agreement.
F.
The Company desires to obtain an exclusive license to sell, offer
to
sell and distribute the Product in the Territory (as defined
below), and Altana
desires to grant such license to the Company and supply the Company
with its
requirements of the Product, pursuant to the terms and conditions
of this
Agreement.
NOW,
THEREFORE, in consideration of the foregoing Preliminary
Statements
and the mutual agreements and covenants set forth herein, the
Parties hereby
agree as follows:
1.
DEFINITIONS.
As
used in this Agreement and unless otherwise defined herein, the
following terms shall have the meanings set forth in this Section
1:
"Agreement" shall have the meaning assigned to such term in the
introductory paragraph of this Agreement.
"Affiliate" with respect to any Party, shall mean any entity
controlling,
controlled by, or under common control with, such Party, for only
so long as
such control exists. For these purposes, "control" shall refer to:
(i) the
possession, directly or indirectly, of the power to direct the
management or
policies of an entity, whether through the ownership of voting
securities, by
contract or otherwise, or (ii) the ownership, directly or
indirectly, of more
than [c.i.] of the voting securities or other ownership interest of
an entity.
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<PAGE>
"Allocable Overhead" shall have the meaning assigned to such term
in the
Financial Appendix.
"Altana" shall have the meaning assigned to such term in the
introductory
paragraph of this Agreement.
"Altana Product IP" shall mean, with respect to the Product, all
Know-how,
trademarks and Patents owned or licensed by Altana as of the
Effective Date, to
the extent relating to such Product.
"Audited Party" shall have the meaning assigned to such term in
Section
5.6(a).
"Auditing Party" shall have the meaning assigned to such term in
Section
5.6(a).
"Breaching Party" shall have the meaning assigned to such term in
Section
11.2.
"cGMP" shall mean current good manufacturing practices, as
established by
the FDA and all other applicable laws and regulations that apply
and are in
effect at the time and place of manufacture, including without
limitation, Good
Manufacturing Practice as defined in Parts 210 and 211 of Title 21
of the Code
of Federal Regulations, as may be amended from time to time, or any
successor
thereto.
[c.i.]
"[c.i.] Invention" shall mean any new or useful process,
compound,
composition of matter, method of use or Know-how, whether or not
patentable,
related to the Product, and any improvement, enhancement,
modification or
derivative work to any Company Technology Product IP; in each case,
(a) which is
not a Product Invention, and (b) which is conceived or first
reduced to practice
or first demonstrated to have utility during the term of this
Agreement by
either Party in connection with the development or
commercialization activities
contemplated in this Agreement.
"Combination Sales" mean sales of a Product which are sold bundled
in a
transaction with any other products or any service by the Company
or its
Affiliates.
"Commercialization Plan" shall have the meaning assigned to such
term in
Section 2.4(a).
"Company" shall have the meaning assigned to such term in the
introductory
paragraph of this Agreement.
"Company Technology IP" shall mean, the Company's intellectual
property
with respect to [c.i.], all Know-how, trademarks and Patents owned
or licensed
by the Company as of the Effective Date, to the extent relating to
[c.i.] and
its use with the Altana Product IP.
"Cost Estimate" shall mean the estimated costs of undertaking
the
Development Plan as set forth in Section 2.1(b) and approved by the
Parties from
time to time.
"Confidential Information" shall have the meaning assigned to such
term in
Section 9.2.
"Development Costs" shall have the meaning assigned to such term in
the
Financial Appendix.
"Development Program" shall mean the Development Program defined in
Section
2.1(a).
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"Development Plan" shall have the meaning assigned to such term in
Section
2.1(b).
"Effective Date" shall have the date first written above.
"Expert" shall have the meaning set forth in Section
13.13(b)(i).
"FDA" shall mean the United States Food and Drug
Administration.
"Field" shall mean the use of the Product(s) for the treatment of
[c.i.].
"Financial Appendix" shall mean Exhibit A hereto.
"Firm Order" shall have the meaning set forth in Section
2.8(c).
"First Commercial Sale" shall have the meaning assigned to such
term in the
Financial Appendix.
"Forecast" shall have the meaning set forth in Section 2.8(b).
"Fully Absorbed Manufacturing Cost" shall have the meaning assigned
to such
term in the Financial Appendix.
"Fully Loaded Costs" shall have the meaning assigned to such term
in the
Financial Appendix.
"GAAP" shall mean generally accepted accounting principles in the
United
States, consistently applied by the Parties.
"Improvements" shall mean any and all new developments by the
Company or
Altana relating to the Product(s) intended to enhance the
performance and/or
improve the methods of manufacture and production techniques of the
Product(s).
Improvements shall also include, without limitation, all developed
or to be
developed formulations of the Product(s) under this Agreement
pursuant to the
Development Plan.
"IND" shall mean an effective Notice of a Claimed Investigational
New Drug
Exemption as defined in Title 21 of the Code of Federal
Regulations.
"Indemnitee" shall have the meaning assigned to such term in
Section 10.3.
"Infringement" shall have the meaning assigned to such term in
Section
6.5(c).
"Know-how" shall mean any and all unpatented formulae, processes,
trade
secrets, technologies and know-how, whether or not patentable,
including,
without limitation, synthesis, preparation, recovery and
purification processes
and techniques, control methods and assays, chemical data,
toxicological and
pharmacological data and techniques, clinical data, medical uses,
product forms
and product formulations and specifications.
"Minimum Net Sales" shall have the meaning assigned to such term in
Section
2.8.
"Net
Sales" shall have the meaning assigned to such term in the
Financial
Appendix.
"Non-breaching Party" shall have the meaning assigned to such term
in
Section 11.2.
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"Party" shall mean, as applicable, Altana or Sirius and, when used
in the
plural, shall mean Altana and the Company.
"Patents" shall mean the patents and patent applications relating
to
products in the Territory, together with any patents that may issue
thereafter
in the Territory, including any and all extensions, renewals,
continuations,
continuations-in-part, divisions, patents-of-additions, reissues;
and a Patent
shall be any one of the foregoing.
"Payment Period" shall have the meaning assigned to such term in
Section
5.2(a).
"Product(s)" shall mean Altana's pharmaceutical composition having
[c.i.]
as its sole active pharmaceutical ingredient, [c.i.] by the Parties
under this
Agreement pursuant to the Development Plan.
"Product Invention" shall mean any new or useful process,
compound,
composition of matter, method of use or Know-low, whether or not
patentable,
related to the Product, and any Improvement, enhancement,
modification or
derivative work to any Altana Product IP; in each case, conceived
or first
reduced to practice or first demonstrated to have utility during
the term of
this Agreement by either Party in connection with the development
or
commercialization activities contemplated in this Agreement.
"Registration" shall mean final approval of the Registration
Application
for a Product in the Field which approval would allow the marketing
and sale of
such Product in the Field in the Territory.
"Registration Application" shall mean any filing(s) made with the
FDA for
regulatory approval of the manufacture and sale of the Product in
the Field in
the Territory.
"Sales Costs" shall have the meaning assigned to such term in the
Financial
Appendix.
"Serious Adverse Drug Experience" shall have the meaning assigned
to such
term in Section 7.1(b).
"Special Arbitration Provisions" shall have the meaning assigned to
such
term in Section 13.13(b).
"Specifications" shall mean the approved specifications for raw
materials
and manufacturing procedures of the Product as either specified by
Altana from
time to time or as approved or required by FDA, as applicable and
appropriate,
including, without limitation: (i) raw material specifications
(including
approved suppliers, art proofs, chemical, micro, and packaging
specifications);
(ii) sampling requirements (i.e., lab, chemical, and micro); (iii)
compounding
module, including compounding process and major equipment; (iv)
intermediate
specifications; (v) packaging module (including packaging
procedures, torque and
fill weights); (vi) finished Product specifications release
criteria including
Altana Acceptable Quality Limits ("AQL's"); (vii) stability
specifications; and
(viii) test methods.
"Steering Committee" shall have the meaning assigned to such term
in
Section 3.1.
"Territory" with respect to the Product shall mean [c.i.] including
[c.i.].
"Third Party" shall mean any person who or which is neither a Party
nor an
Affiliate of a Party.
"Term" shall have the meaning assigned to such term in Section
11.1.
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<PAGE>
"Units" shall have the meaning assigned to such term in the
Financial
Appendix.
2. THE
DEVELOPMENT AND COMMERCIALIZATION PROGRAMS.
2.1
Overview of the Development Program.
(a) The "Development Program" for the Product in the Territory
shall
be comprised of all research, development, and regulatory
activities related to
such Product in the Field and all filings, reports and related
regulatory
interactions. Altana shall have responsibility for the execution of
the
Development Program.
(b) During the Term up to and including the Registration of the
Product, from time to time Altana shall, from time to time, prepare
a proposed
Development Plan which shall be submitted to the Company for review
and comment.
Such "Development Plan" shall mean the plan of research,
development, and
regulatory activities to be undertaken as part of the Product's
Development
Program as well as the estimated costs of undertaking such
activities ("Cost
Estimate"). Altana shall take into good faith consideration the
comments
received from the Company regarding any Development Plan. The
Company's prior
approval of a Development Plan shall be required only to the extent
a
Development Plan allocates responsibility to the Company for
undertaking
activities as part of the Development Program. The initial
Development Plan is
attached hereto as Exhibit B.
2.2
Altana Responsibilities under the Development Program. As part of
the
Development Program for the Product, in accordance with the
Development Plan,
Altana shall:
(a) use [c.i.] to conduct such research and development activities
in
the Field [c.i.] to obtain Registration for the Product in the
Territory,
including, (i) [c.i.]; (ii) [c.i.], including manufacture and
supply of the
Product for use in the Development Program [c.i.]; (iii) [c.i.]
outlined in the
Development Plan; and (iv) as specified in the Development Program,
[c.i.].
(b) conduct the Development Program in good scientific manner, and
in
compliance in all material respects with all requirements of
applicable laws,
rules and regulations, and all other requirements of any applicable
cGMP, good
laboratory practice and current good clinical practice and to use
[c.i.] to
achieve the objectives of the Development Program;
(c) maintain records, in sufficient detail and in good
scientific
manner, which shall be complete and accurate and shall fully and
properly
reflect all work done and results achieved in connection with the
Development
Program in the form required under all applicable laws and
regulations. The
Company shall have the right, during normal business hours and upon
reasonable
prior written notice, to inspect all such records at its own
expense, so long as
doing so is not unreasonably disruptive. The Company shall maintain
such records
and information contained therein in confidence in accordance with
Section 9 and
shall not use such records or information except to the extent
otherwise
permitted by this Agreement;
(d) use [c.i.] to submit Registration Applications and obtain
Registrations for the Product in the Field in the Territory;
(e) prepare and file response to inquiries of Regulatory
Authorities
arising during review of the Product' dossier; and
(f) use [c.i.] to perform such other responsibilities with respect
to
the Development Program as may be mutually agreed upon by the
Parties from time
to time.
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2.3
Company Responsibilities under the Development Program. As part of
the
Development Program for the Product, in accordance with the
Development Plan,
the Company shall:
(a) use [c.i.] to assist Altana in conducting such research and
development activities in the Field necessary or desirable to
obtain
Registration for the Product in the Territory and undertake [c.i.]
relating to
the use [c.i.] in the Product;
(b) assist and support Altana with respect to those regulatory
filings
necessary to obtain Registration to manufacture, market and sell
the Product in
the Field in the Territory; and
(c) perform such responsibilities with respect to the
Development
Program as may be mutually agreed upon by the Parties from time to
time.
2.4
Overview of the Commercialization Program.
(a) The "Commercialization Program" for the Product shall be
comprised
of (i) all marketing, advertising, promotional, launch (including
pre-launch
marketing) sales activities and sales representative detailing plan
for such
Product in the Field in the Territory including, without
limitation, planned
budgets and expenditure; and (ii) all filings, reports and related
regulatory
interactions and Phase IV studies, if any, required by the FDA to
maintain
Registration in the Territory after the Registration of such
Product in the
Field in the Territory. The Commercialization Program shall be
undertaken in
accordance with a commercialization plan which, from time to time,
shall be
proposed by the Company and submitted to Altana for review and
comment (the
"Commercialization Plan"). The Company shall take into good faith
consideration
the comments received from Altana regarding any Commercialization
Plan. Altana's
prior approval of a Commercialization Plan shall be required only
to the extent
a Commercialization Plan allocates responsibility to Altana for
undertaking
activities as part of the Commercialization Program.
(b) The Company, either itself and/or by and through its
Affiliates,
shall be responsible for all activities comprising the
Commercialization Program
for the Product.
2.5
Company Responsibilities under the Commercialization Program. As
part
of the Commercialization Program for a Product, in accordance with
the
Commercialization Plan, the Company shall:
(a) perform pre-commercialization analysis, planning, market
preparation and related marketing activities in the Territory;
(b) carry out the distribution, marketing and sales of the Product
in
the Territory using a level of diligence and resources
substantially similar to
those that the Company applies to comparable products of the
Company in the
Territory;
(c) conduct [c.i.] and marketing [c.i.] for the Product in the
Territory;
(d) conduct the Commercialization Program in compliance in all
material respects with applicable laws, rules and regulations;
(e) maintain records, which shall be complete and accurate in
all
material respects and shall fully and properly reflect all revenues
in
connection with the Commercialization Program. Altana shall have
the right,
[c.i.] and [c.i.], to inspect all such records, so long as doing so
[c.i.].
[c.i.] shall bear any [c.i.] incurred by it in connection with
any
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such inspection. Altana shall maintain such records and information
contained
therein in confidence in accordance with Section 9 and shall not
use such
records or information except to the extent otherwise permitted by
this
Agreement; and
(f) undertake, and have primary responsibility for all
communication
with the FDA, if required by FDA, in connection with the Company's
marketing and
sales activities in the Territory, including the submission to the
FDA for
approval all marketing materials used in the Territory.
2.6
Altana Responsibilities under each Commercialization Program. As
part
of the Commercialization Program for a Product Altana shall, in
accordance with
the Commercialization Plan, [c.i.] to:
(a) support the Company in the Company's efforts in maintaining
Registration for the Product in the Field in the Territory;
(b) manufacture or have manufactured by Third Party the Product
for
commercial sale in the Territory in accordance with such
Product's
specifications set forth in the applicable Registration and cGMP in
such
quantities as the Company shall notify Altana as necessary and
appropriate to
meet market demand in the Territory; and
(c) perform such other activities with respect to the
Commercialization Program as the Parties mutually agree in writing
are necessary
or useful from time to time; provided, that, any such activities
undertaken by
Altana with respect to the Commercialization Program shall (unless
otherwise
agreed by the Parties) [c.i.] the Company at $[c.i.] per [c.i.],
other than
[c.i.] which shall be invoiced and paid in accordance with Section
2.8(i). The
Company shall pay such invoices within [c.i.] days after receipt of
same.
2.7
Conduct of Development Program and Commercialization Activities.
Each
Party, acting in accordance with this Section 2 when applicable,
the Development
Plan and Commercialization Plan, when applicable, shall:
(a) reasonably cooperate with the other Party, as requested by
the
other Party with primary responsibility over the applicable
development or
commercialization activities, as the case may be, to implement all
such
activities and such other activities that, from time to time, the
Parties agree
are necessary or useful for the commercial success of the
Development Program
and the Commercialization Program; and
(b) allow representatives of the other Party, upon [c.i.] notice
and
[c.i.], to visit such Party's facilities where any Development
Program or
Commercialization Program is being conducted, and consult, during
such visits
and by telephone, with such Party's personnel performing work on
any Development
Program or Commercialization Program, so long as such visits and
consultations
[c.i.]. The other Party shall maintain any information received
(whether by
observation or otherwise) during such visit in confidence in
accordance with
Section 9 and shall not use such information except to the extent
otherwise
permitted by this Agreement.
2.8
Manufacture and Supply of the Product.
(a) Altana shall manufacture the Product to cGMP standards in
accordance with the applicable specifications and in accordance
with applicable
laws and regulations; provided however in the event of any future
changes in
cGMP standards, applicable specifications, and/or applicable laws
and
regulations, any of which individually, or which cumulatively, have
a material
adverse effect on the Fully Absorbed Manufacturing Cost for the
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Product, the Parties shall [c.i.]. Altana shall provide the Company
with a
certificate of analysis and/or certificate of conformance for each
batch of the
Product delivered to the Company.
(b) Company shall submit to Altana, at least [c.i.] prior to
the
[c.i.] during the Term, [c.i.] rolling forecast ("Forecast") of the
quantity of
the Product the Company expects to order for manufacture during
such period. The
Company shall make all Forecasts in good faith given market
conditions and other
information available to the Company. Each Forecast shall [c.i.],
with [c.i.]
reflected therein, which [c.i.], and Company shall place firm
orders [c.i.] with
[c.i.] of each Forecast.
(c) Altana shall use [c.i.] to manufacture and deliver to the
Company
the Product that Company has ordered pursuant to a firm order by
the requested
delivery date, provided that, the firm order was given at least
[c.i.] prior to
the desired delivery date (each such order, a "Firm Order"). In any
event, the
Company shall be required to place Firm Orders [c.i.]: (i) at least
[c.i.]
pieces of the [c.i.] of the Product; and (ii) at least [c.i.]
pieces of the
[c.i.] of the Product or multiples thereof. A Firm Order may not be
cancelled,
and Company shall be obligated to pay the Purchase Price for said
order.
(d) Each Firm Order shall specify the Product, the quantity of
the
Product ordered, the destination to which the Product is to be
delivered and the
time and manner of delivery (including the carrier to be used) in
accordance
with Section 2.8(h).
(e) In the event that the quantity of the Product ordered by
Company
pursuant to Section 2.8(c) for delivery in any month is more than
the quantity
of the Product reflected in the most recent Forecast for such
month, Altana
shall use [c.i.], but [c.i.]
(f) Altana may reject any order upon the grounds that such order
sets
forth a manufacture and delivery schedule that is inconsistent with
this Section
2.8.
(g) The Product shall be packaged and labeled in accordance with
FDA
approved labeling as instructed by the Company, and shall be
accompanied by
appropriate certificates of analysis. Product shall be
appropriately labeled
with a traceable batch number and date of manufacture. Altana shall
ship each
shipment, [c.i.], to the Company, or the Company's designee, at the
location
specified in the applicable Firm Order, as instructed by the
Company. All
[c.i.], as well as any special packing expenses, shall be borne by
[c.i.]. The
risk of loss, delay or damage in transit shall be with [c.i.] from
and after
[c.i.].
(h) Subject to Section 2.8(g), Altana shall invoice Company at
the
time of shipment for the applicable Purchase Price for the Product
then shipped.
Each such invoice shall state the quantity of the Product contained
in the
shipment in question. The Purchase Price for the Product until
[c.i.] shall be
as follows: $[c.i.] per [c.i.] of the Product and [c.i.] per [c.i.]
of the
Product. After [c.i.], the Purchase Price for the Product shall
[c.i.] but by no
more than [c.i.] and with the result price being no more than
[c.i.] Altana's
Fully Absorbed Manufacturing Cost for the Product. Altana shall
give the Company
notice of each such price increase within [c.i.] following each
[c.i.] and
[c.i.] shall be [c.i.].
(i) The Company or its designee shall confirm the quantity of
the
Product contained in any shipment. In the event the quantity of the
Product
shipped is greater or less than the quantity reflected in Altana'
invoice for
such shipment, then within [c.i.] after Company's or its designee's
receipt of
such shipment, the Company shall notify Altana concerning such
overage or
shortage. Unless Altana disputes such notice, the amount of such
invoice
automatically shall be increased or reduced, as the case may be, to
reflect the
actual quantity of the Product contained in such shipment.
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<PAGE>
2.9
Non-Conforming Deliveries.
(a) Product delivered by a Party to the other Party pursuant to
Sections 2.8 or 2.9 that does not conform with the applicable
manufacturing
standards (as may be in effect from time to time) for any reason
shall be deemed
to be non-conforming. It is the responsibility of the receiving
Party to test or
cause to be tested all Product, as the case may be, upon receipt
and to notify
the other Party of any alleged non-conformity within [c.i.] after
receipt of the
shipment. A shipment will be considered accepted by the receiving
Party unless
it gives such notice within such [c.i.] time period.
(b) The delivering Party shall have the right to examine and test
any
batch of the Product, as the case may be, that the receiving Party
claims is
non-conforming and shall notify the receiving Party in writing of
its findings.
In the event the Parties cannot agree as to whether any such batch
is
non-conforming, the Parties shall designate an independent testing
laboratory to
determine same, the findings of which shall be binding on the
Parties, absent
manifest error. Expenses of such laboratory testing shall be borne
by [c.i.].
(c) In the event that any such batch is ultimately agreed or found
to
be non-conforming, the delivering Party shall [c.i.] such shipment
at its
expense.
2.10
Payment Responsibilities.
(a) The Company shall pay for all Development Costs incurred by
the
Parties under the Development Program from the Effective Date and
the costs and
expenses for each Commercialization Program. All Development Costs
shall be
reported and paid pursuant to Section 5.3 and the Financial
Appendix attached
hereto. If in any contract year the total Development Costs
reported by Altana
to the Company exceed the Cost Estimates set forth in the
Development Plan, then
Altana will review and report to the Company the reasons for the
increased
expenditure and the Parties will consider revising such Cost
Estimate upwards
and approving the increased expenditure.
(b) Altana will undertake development work at a charge-out rate
of
U.S. [c.i.] [c.i.] plus [c.i.].
3.
GOVERNANCE.
3.1
General. The Parties shall in good faith consult and communicate
with
one another as reasonably necessary and appropriate in undertaking
the
activities contemplated by the Development Program and the
Commercialization
Program so as to efficiently and expeditiously achieve the goals of
the
Development Program and the Commercialization Program.
3.2
Certain Matters. Without limiting the generality of Section 3.1,
upon
the request of a Party, the Parties shall:
(a) undertake a formal review and comparison of the status of
the
Product's Development Program to the current Development Plan,
including,
without limitation the applicable timelines (such formal review to
be conducted,
if at all, no more frequently than [c.i.]);
(b) undertake a formal review and comparison of the status of
the
Product's Commercialization Program to the current
Commercialization Plan,
including, without limitation the applicable timelines (such formal
review to be
conducted, if at all, no more frequently than [c.i.]);
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<PAGE>
(c) discuss or meet in an attempt to reasonably resolve disputes
or
disagreements between the Parties relating to any aspect of the
Development
Program or the Commercialization Program;
(d) discuss or meet to decide whether and how to institute patent
and
trademark Infringement actions against Third Parties in connection
with the
Product; or
(e) discuss or meet to determine a course of action in the event
of
threatened or actual litigation in connection with Third Party
Infringement
claims.
4. ROYALTIES;
MINIMUM ROYALTIES.
4.1
Royalties to Altana. As consideration to Altana for the license
and
other rights granted to the Company under this Agreement, in
addition to the
Purchase Price for Product, the Company agrees to pay Altana
royalties on Net
Sales of the Product as follows:
(a) [c.i.] of all Net Sales of the Product in respect of such
Net
Sales in each marketing year that are less than or equal to [C.I.];
and
(b) [c.i.] of all Net Sales of the Product in respect of such
Net
Sales in each calendar year that are greater than [C.I.].
4.2
Bartering Prohibited. The Company and its Affiliates shall not
accept
or solicit any bartered goods or serv
