EXHIBIT 10.38.1
 

CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF
THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY
FILED WITH THE COMMISSION.***

 
COLLABORATION AGREEMENT
 
THIS COLLABORATION AGREEMENT (this “Agreement”) is entered into and effective as
of this 8th day of September, 2005 (the “Effective Date”), by and between KING
PHARMACEUTICALS, INC., a Tennessee corporation (“King”), and INYX, INC., a
Nevada corporation (“Inyx”).
 
WHEREAS, King owns certain technology and proprietary materials related to the
drugs Intal and Tilade;
 
WHEREAS, Inyx is a developer and manufacturer of pharmaceutical aerosol
products; and
 
WHEREAS, the parties desire to enter into a collaboration for the purpose of
developing, marketing, and promoting Products (as defined herein);
 
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
 
1.
DEFINITIONS

 

 
1.1
Definitions. In addition to the terms defined elsewhere herein, as used in this
Agreement, the following terms have the meanings specified below when used in
this Agreement:

 
***
 
***
 
“AAA” has the meaning set forth in Section 2.7(d).
 
“Act” means the United States Federal Food, Drug and Cosmetic Act, as amended.
 
“Affiliate(s)” means, with respect to any Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. A Person will be
regarded as in control of another Person if such Person owns, or directly or
indirectly controls, more than fifty percent (50%) of the voting securities (or
comparable equity interests) or other ownership interests of the other Person,
or if such Person directly or indirectly possesses the power to direct or cause
the direction of the management or policies of the other Person, whether through
the ownership of voting securities, by contract, or any other means whatsoever,
provided, however, that, for purposes of this Agreement, the term “Affiliate”
will not include subsidiaries in which a party or its Affiliates owns a majority
of the ordinary voting power to elect a majority of the Board of Directors, but
is restricted from electing such majority by contract or otherwise, until such
time as such restrictions are no longer in effect.
 
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“Agreement” means this Agreement, together with all appendices, exhibits, and
schedules referenced herein or attached hereto, and as the same may be amended
or supplemented from time to time hereafter pursuant to the provisions hereof.
 
“Alliance Management Committee” or “AMC” has the meaning set forth in Section
2.1.
 
“Approved New Product” has the meaning assigned to it in the Development
Agreement.
 
“Assignors” has the meaning set forth in Section 5.3.
 
“Audited Party” has the meaning set forth in Section 10.2(a).
 
“Auditing Party” has the meaning set forth in Section 10.2(a).
 
“Calendar Quarter” means, with respect to the first such Calendar Quarter, the
period beginning on the Effective Date and ending on the last day of the
calendar quarter within which the Effective Date falls and, thereafter, each
successive period of three (3) consecutive calendar months ending on March 31,
June 30, September 30, or December 31.
 
“Calendar Year” means, (a) with respect to the first Calendar Year, the period
beginning on the Effective Date and ending on December 31, 2005 and, (b) with
respect to the second Calendar Year and Calendar Year thereafter, the period
commencing on January 1 and ending on December 31.
 
“Change of Control” means any sale of voting securities or sale of assets
(whether by sale, merger, consolidation, share exchange, or otherwise in one
transaction or a series of transactions) in or by a party hereto that, directly
or indirectly, results in any Third Party becoming the beneficial owner,
directly or indirectly, of securities or assets of such first party representing
over fifty percent (50%) of the combined voting power of such Person's then
outstanding securities or over fifty percent (50%) of such first party's total
assets.
 
“Change of Control Notice” has the meaning set forth in Section 11.3(b).
 
“COGS” means the fully absorbed manufacturing costs, which includes direct costs
and allocated costs, but not indirect and overhead costs, attributable to and
directly in connection with the manufacture of a Product and includes the costs
of all direct material (excluding the Initial Bulk Form), direct labor, direct
services costs, and any other direct or allocated costs of all goods
manufactured; provided that such costs, together with any ***, will in no event
be more than *** of Net Sales. All reports submitted pursuant to Section 3.2(b)
will include a detailed description of all COGS incurred by each party, and, in
addition to the audit rights set forth in Article 10, King may audit Inyx's
books and records with respect to such COGS from time to time upon request.
 
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“Collaboration Costs” means, to the extent approved by the AMC, the sum of (a)
for so long as the Marketing and Promotion Agreement is in effect, ***, (b) ***,
(c) ***, (d) ***, (e) ***, as contemplated by the Manufacturing and Supply
Agreement, (f) any other cost or expense expressly stated to be a Collaboration
Cost in the Collaboration Documents or under a Marketing Plan and Budget, (g)
quantity, trade, or cash discounts, chargebacks, returns, allowances, rebates
(including any and all federal, state, or local government rebates, such as
Medicaid rebates), costs incurred in connection with processing the foregoing,
and price adjustments, to the extent actually allowed in any invoice relating to
Products (to the extent not already deducted as part of the calculation of Net
Sales), (h) sales and other excise taxes and duties or similar governmental
charges directly related to the sale of Products (to the extent not already
deducted as part of the calculation of Net Sales), and (i) any other direct and
allocable internal costs and direct and allocable external costs incurred in
conducting the Collaboration Program, all calculated in accordance with GAAP and
all approved by the AMC. Notwithstanding anything to the contrary contained
herein, Collaboration Costs will not include (i) indirect costs, overhead,
general, and administrative costs and other similar costs, (ii) any costs that
relate to the business of a party as a whole without specifically referencing a
Product, (iii) * * * , or (iv) any Excluded New Product Costs. In calculating
the Collaboration Costs, the following principles will apply: (x) there will be
no double counting of any costs or expenses or of any revenues, and (A) to the
extent a cost or expense has been included in one category or sub-category, it
will not be included in another, (B) to the extent any revenue has been taken
into account in one category or sub-category, it will not be taken into account
in another, and * * *
 
“Collaboration Documents” means, collectively, this Agreement, the Quality
Agreement, the Technology Transfer Agreement, the Manufacturing and Supply
Agreement, the Marketing and Promotion Agreement, and the Development Agreement.
 
“Collaboration Program” means the association of King and Inyx established
pursuant to this Agreement and the other Collaboration Documents.
 
“Competitor Product” means any product for the treatment of asthma or any other
product that is targeted for an indication covered by any Product.
 
“Confidential Information” has the meaning set forth in Section 12.1(a).
 
“Consultant” means a Third Party who has entered into or hereafter enters into a
written agreement with King or Inyx or both to provide consulting services with
respect to the Collaboration Program, as determined by the AMC, which written
agreement (a) includes an assignment of all right, title, and interest in and to
all work product and all inventions arising from the performance of such
services, and all intellectual property rights attaching thereto, to Inyx or
King, as applicable, and (b) binds the relevant Third Party by obligations of
confidentiality and non-use with respect to all such work product, inventions,
Confidential Information, and intellectual property rights that are at least as
stringent as those set forth herein.
 
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“Development Agreement” has the meaning set forth in Section 3.4(d).
 
“Discretionary Funding” has the meaning set forth in Section 3.3(b).
 
“Effective Date” has the meaning set forth in the recitals.
 
“Excluded New Product” means a New Product excluded from the Collaboration
Program pursuant to Section 4.2 of the Development Agreement.
 
“Excluded New Product Costs” has the meaning assigned to it in the Development
Agreement.
 
“Excluded Patent Costs” has the meaning assigned to it in the Development
Agreement.
 
“FDA” means the United States Food and Drug Administration or any successor
organization and all agencies under their direct control.
 
“GAAP” means United States generally accepted accounting principles.
 
“Improvement(s)” means any inventions, discoveries, improvements, trade secrets,
know-how, and proprietary methods and materials that are conceived, made, or
developed in the course of carrying out the Collaboration Program, in each case
(a) whether or not patentable and (b) whether developed or conceived by
employees of, or Consultants to, King or Inyx, alone or jointly with each other
or with permitted Third Parties, including permitted sublicensees. The term
“Improvements” will include the following: (i) any modification of, improvement
to, or derivative work of a Product or Excluded New Product or then-existing
Patent Rights or Technology, (ii) any integration of a Product or Excluded New
Product into other products, (iii) any information, materials, records, or
reports developed in connection with, or related to, the items in clauses (i)
and (ii), and (iv) any trade secrets, know-how, or intellectual property rights
with respect to the items in clauses (i) through (iii). The term “Improvements”
will not include any Inyx Respiratory Products.
 
“IND” means (a) an Investigational New Drug Application (as defined in 21 CFR §
312.3) that is required to be filed with the FDA before beginning clinical
testing of a product in human subjects, or any successor application or
procedure, or (b) any counterpart of a U.S. Investigational New Drug Application
that is required in any other country or region in the Territory before
beginning clinical testing of a product in human subjects in such country or
region.
 
“indemnitee” has the meaning set forth in Section 13.3.
 
“indemnitor” has the meaning set forth in Section 13.3.
 
“Infringement” has the meaning set forth in Section 6.3(a)(i).
 
“Infringement Notice” has the meaning set forth in Section 6.3(a)(i).
 
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* * *
 
“Intal” means (a) the cromolyn sodium inhaler pharmaceutical product in a
chloro-fluoro-carbon (CFC) propellant driven inhaler and more particularly
identified as NDA No. 18-887 and (b) the cromolyn sodium inhaler pharmaceutical
product in a hydro-fluoro-alkane (HFA) propellant driven inhaler and more
particularly identified as pending NDA 20-957, and amendments thereto (the
product described in this clause (b), “Intal HFA”).
 
“Inyx” has the meaning set forth in the recitals.
 
“Inyx Respiratory Products” has the meaning set forth in Section 7.2.
 
“King” has the meaning set forth in the recitals.
 
“King Respiratory Product” has the meaning set forth in Section 8.3.
 
“Manufacturing and Supply Agreement” has the meaning set forth in
Section 3.4(b).
 
“Manufacturing Offer Notice” has the meaning set forth in Section 8.3.
 
“market” or “marketing” means any and all activities directed to the marketing
and promotion of a product for commercial sale and will include pre-launch and
post-launch marketing, promoting, distributing, offering to sell, and selling a
product, importing a product for sale, and any and all clinical and marketing
studies conducted after obtaining marketing approval for any product (but not
including any preclinical studies), and interacting with Regulatory Authorities
regarding the foregoing.
 
“Marketing and Promotion Agreement” has the meaning set forth in Section 3.4(c).
 
“Marketing Costs” means the sum of (a) all reasonable out-of-pocket costs and
expenses incurred by a party directly attributable to the following functions
for the sale, promotion, and marketing of a Product in the Territory: (i) market
research on such Product or relevant indications, (ii) marketing communications
and Product advertising, (iii) corporate accounts, (iv) managed care, (v) sales
force training, (vi) product hotlines, (vii) reimbursement support, (viii)
contracting, (ix) pricing, (x) telemarketing services, (xi) distribution costs,
including freight, insurance, warehousing, order entry, and billing, (xii) the
cost of Product detailing of a party's sales force plus reasonable out-of-pocket
costs and expenses paid to Third Parties for product details provided by such
Third Parties, (xiii) patient registries, if required, (xiv) the cost of Product
samples, and (xv) all reasonable out-of-pocket costs and expenses incurred by a
party and directly attributable to the promotion of a Product in the Territory
and (b) Personnel Costs incurred by a party directly attributable to marketing
personnel and support staff working (either full time or part of the time) on
the marketing of Products in the Territory. Examples of functions that would be
included in the marketing headcount cost are: marketing, marketing
communications, clinical research and educational managers, clinical support
managers, corporate accounts, managed care, product hotlines, sales forecasting,
reimbursement support (government economic managers), marketing research,
contracting, and pricing.
 
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“Marketing Plan and Budget” has the meaning set forth in Section 3.1(a).
 
“NDA” means a New Drug Application pursuant to Section 505 of the Act (21 U.S.C.
Section 355) related to a product, including the Products, submitted to the FDA
or any successor application or procedure or any foreign counterpart of a U.S.
New Drug Application for approval to market, including, where applicable,
applications for pricing and reimbursement approval, and all supplements and
amendments thereto.
 
“Net Sales” means the gross amount, computed in accordance with GAAP,  received
for the Products by a party or its Affiliates from Third Parties in the
Territory, less returns and less the following amounts to the extent deducted
from invoice or absorbed or accrued by the party or its Affiliates:
(a) customary quantity, trade, or cash discounts (including inventory management
agreement fees and discounts), chargebacks, returns, allowances, rebates
(including any and all federal, state, or local government rebates, e.g.,
Medicaid rebates), and price adjustments allowed or given (including retroactive
price reductions); (b) sales and other excise taxes, tariffs, and duties
directly related to the sale, to the extent such items are included in the gross
amount received; (c) amounts actually refunded due to rejected, spoiled,
damaged, outdated, or returned Product or for sales that become the subject of a
subsequent temporary or partial recall by a Regulatory Authority for safety or
efficacy reasons outside the control of the parties; and (d) freight, shipment,
postage, insurance, and other transportation costs actually incurred in shipping
Product to a Third Party purchaser. If any Product is sold to a Third Party in a
transaction that is not at arm's length between the buyer and seller, then the
gross amount to be included in the calculation of Net Sales for such sale will
be the amount that would have been invoiced had the transaction been conducted
at arm's length, which amount will be determined, whenever possible, by
reference to the average selling price of the relevant Product in arm's-length
transactions in the country of sale at the time of sale. If any Product is sold
to a Third Party for consideration other than cash or for consideration that is
not readily ascertainable, then the gross amount to be included in the
calculation of Net Sales for such sale will be determined based on the
reasonable value of the consideration given, taking into account the average
selling price of the relevant Product in arm's-length transactions in the
country of sale at the time of sale. Any goods or services provided in exchange
of the supply of Products, disposal of Product, or use of Product in clinical or
preclinical trials or as free samples (such samples to be in quantities common
in the industry for this sort of Product) will not give rise to any deemed sale
under this definition. For purposes of Section 4.3(c) of the Development
Agreement, the foregoing definition will apply to Unmarketed Excluded New
Products.
 
“New Product” means any new diagnostic or therapeutic compound, formulation, or
product that includes Intal or Tilade and any derivatives of Intal or Tilade, or
combinations thereof, and that treats asthma or any other indication, whether
respiratory or otherwise, and that are developed under the Collaboration
Program.
 
“Offered Product” has the meaning set forth in Section 8.1.
 
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“Patent Rights” means the rights and interests in and to issued patents and
pending patent applications (which for purposes of this Agreement will be deemed
to include certificates of invention and applications for certificates of
invention and priority rights) in any country in the Territory, including all
provisional applications, substitutions, continuations, continuations-in-part,
divisions, and renewals, all letters patent granted thereon, and all reissues,
reexaminations and extensions thereof, that in each case relate to (a) any
Product or Excluded New Product or any methods of using and making a Product or
Excluded New Product or (b) any Improvement.
 
“Person” means an individual, corporation, partnership, limited liability
company, trust, business trust, association, joint stock company, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization, governmental
authority, or any other form of entity not specifically listed herein.
 
“Personnel Costs” means the reasonable costs of employment of personnel employed
by or under contract to a party, including salaries, benefits (including the
costs of cars or allowances therefor), travel, lodging, meals, and office and
computing supplies.
 
“Product(s)” means any pharmaceutical product containing Intal or Tilade, and
will include any Approved New Product but will not include an Excluded New
Product.
 
“Product Offer Notice” has the meaning set forth in Section 8.1.
 
“Program Plans” means any written plans (which may include a detailed strategy
and proposed timelines) describing the activities to be carried out by each
party during each Calendar Year pursuant to this Agreement or any other
Collaboration Document that are approved by the AMC, or a committee thereof,
during the Term.
 
“Quality Agreement” has the meaning set forth in Section 3.4(e).
 
“Regulatory and IP Costs” means Personnel Costs, reasonable out-of-pocket costs
and expenses (e.g., filing fees, user fees, annual product and facility
registration fees, permit fees, and the like) incurred by a party directly
attributable (a) to obtaining or maintaining Regulatory Approvals for a Product
(including any device incorporating the Product) (including, for example,
communications and meetings with Regulatory Authorities) and satisfying all
registration and other requirements of Regulatory Authorities within the
Territory (including, for example, adverse event reporting and Product pricing
approvals) in connection with each party's activities under the Collaboration
Program and (b) to preparing, filing, prosecuting, maintaining, enforcing, and
defending Patent Rights or Technology with respect to Products as contemplated
in Article 6 hereof.
 
“Regulatory Approval” means the technical, medical, and scientific licenses,
registrations, authorizations, and approvals (including approvals of NDAs,
supplements and amendments, pre- and post- approvals, pricing and third party
reimbursement approvals, and labeling approvals) of any Regulatory Authority
necessary for the development (including the conduct of clinical trials),
manufacture, distribution, marketing, promotion, offer for sale, use, import,
export, or sale of a Product in a regulatory jurisdiction in the Territory.
 
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“Regulatory Authority” means the FDA or any counterpart of the FDA outside the
United States, or other national, supra-national, regional, state, or local
regulatory agency, department, bureau, commission, council, or other
governmental entity with authority over the distribution, importation,
exportation, manufacture, production, use, storage, transport, or clinical
testing, pricing, or sale of a product (including a Product), including any
device incorporating the product.
 
“Regulatory Filings” means, collectively, any and all INDs and drug master files
(DMFs), NDAs, applications for any device incorporating a product (including a
Product), applications for designation of a product as an “Orphan Product(s)”
under the Orphan Drug Act or any other similar filings (including any foreign
equivalents and further including any related correspondence and discussions),
and all data contained therein, as may be required by or submitted to any
Regulatory Authority for the Regulatory Approval.
 
“Requested Party” has the meaning set forth in Section 10.3(a).
 
“Requesting Party” has the meaning set forth in Section 10.3(a).
 
“Respiratory Offer Notice” has the meaning set forth in Section 7.2.
 
“Technology” means and includes all inventions, discoveries, improvements, trade
secrets, know-how, and proprietary methods and materials, whether or not
patentable, relating to the Products or Excluded New Products (including (a)
samples of, methods of production, or use of, and structural and functional
information pertaining to, chemical compounds, proteins, or other biological
substances, and (b) data, formulations, techniques, and know-how), in each case
that (i) are useful with respect to the Collaboration Program and (ii) (A) are
controlled by King as of the Effective Date or (B) developed or conceived by
employees of, or Consultants to, King or Inyx, alone or jointly with each other
or with permitted Third Parties, in the conduct of the Collaboration Program,
including all Improvements.
 
“Technology Transfer Agreement” has the meaning set forth in Section 3.4(a).
 
“Term” has the meaning set forth in Section 11.1.
 
“Terminated Agreement” has the meaning set forth in Section 11.8.
 
“Territory” means the United States and Canada, including any of their states,
provinces, territories, possessions, and protectorates, the District of
Columbia, and the Commonwealth of Puerto Rico.
 
“Third Party” means any Person other than King and Inyx and their respective
Affiliates.
 
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* * * .
 
“Tilade” means (a) the nedocromil sodium inhaler pharmaceutical product in a
chloro-fluoro-carbon (CFC) propellant driven inhaler and more particularly
identified in NDA No. 19-660 and (b) a nedocromicl sodium inhaler pharmaceutical
product in a hydro-fluoro-alkane (HFA) propellant driven inhaler (the product
described in this clause (b), “Tilade HFA”).
 
“Trademark” will have the meaning assigned to it in the Marketing and Promotion
Agreement.
 
* * * .
 
1.2 Interpretation. When a reference is made in this Agreement to Articles,
Sections, Exhibits, or Schedules, such reference will be to an Article or
Section of or Exhibit or Schedule to this Agreement unless otherwise indicated.
The headings contained in this Agreement are for reference purposes only and
will not affect in any way the meaning or interpretation of this Agreement.
Whenever the words “include,”“includes,” or “including” are used in this
Agreement, they will be deemed to be followed by the words “without limitation.”
Unless the context otherwise requires, (i) ”or” is disjunctive but not
necessarily exclusive, (ii) words in the singular include the plural and vice
versa, and (iii) the use in this Agreement of a pronoun in reference to a party
hereto includes the masculine, feminine, or neuter, as the context may require.
The Schedules and Exhibits hereto will be deemed part of this Agreement and
included in any reference to this Agreement. This Agreement will not be
interpreted or construed to require any Person to take any action, or fail to
take any action, if to do so would violate any applicable law.
 
2.
ADMINISTRATION OF THE COLLABORATION

 

 
2.1
Establishment and Function of AMC. Inyx and King will establish an alliance
management committee (the “Alliance Management Committee” or “AMC”) within
thirty (30) days of the Effective Date to plan, administer, and monitor the
activities of the parties under the Collaboration Program, including all
activities set forth in the Program Plans, if any. In particular, the AMC will
review and approve, or recommend revisions to, any Program Plans, review and
monitor the progress of the Collaboration Program, and recommend necessary
adjustments to the Collaboration Program. In planning, administering, and
monitoring the Collaboration Program, the AMC will allocate tasks and
responsibilities, taking into account each party's respective specific
capacities and expertise in order to avoid duplication and to enhance synergies,
as well as comply with the requirements of this Agreement and the other
Collaboration Documents.

 

 
2.2
Membership of the AMC. Each party will appoint three (3) representatives of such
party to the AMC. One of King's senior representatives will chair the AMC, but
such chair shall not have a casting or tie-breaking vote. Both parties will have
the right from time to time to substitute individuals, on a permanent or
temporary basis, for any of its previously designated members of the AMC. The
members appointed by each party will be vested with appropriate decision-making
authority and power by such party. Members of the AMC will be senior executives
of the parties (or their Affiliates), respectively, and will not be outside
consultants, independent contractors, or outside legal counsel, but such Persons
are permitted to attend meetings of the AMC. Each party will bear its own costs
associated with its participation on the AMC.

 
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2.3
Committees. The AMC will have the right and power to appoint and delegate its
responsibilities to committees as reasonably needed to accomplish its work and
the composition and eligibility requirements for the same will be agreed by the
members of the AMC. Such committees may include regulatory,
clinical/development, sales and marketing, and manufacturing committees. Except
as otherwise mandated by the AMC in its minutes, each committee established by
the AMC will be governed by the rules and guidelines applicable to the AMC set
forth in this Agreement. The AMC will set forth clearly each such committee's
decision making responsibilities that have been delegated to it by the AMC. Any
member of a committee may send a designee to observe a committee if such member
is unable to attend, but such observer will not vote in such member's place
unless given a written proxy from such member of the committee. Each party will
have the right at any time to substitute individuals, on a permanent or
temporary basis, for any of its previously designated representatives to any
committee, by giving written notice thereof to the other party. If an issue to
be addressed by a committee appears to fall within the oversight and
administration of more than one committee, such committees will confer with each
other to determine which committee will oversee and administer such issue.

 

 
2.4
Responsibilities of the AMC. The AMC will be solely responsible for making all
decisions not specifically reserved to either party hereunder, including
decisions with respect to the following matters:

 

 
(i)
the definition, review, approval, and amendment (not less than annually) of the
Program Plans, if any, and all related strategy and objectives (but not the
actual conduct of such plans);

 

 
(ii)
definition, review, and approval of and changes to the strategy and objectives
(but not the actual conduct) of the Collaboration Program;

 

 
(iii)
management and allocation of resources of the Collaboration Program;

 

 
(iv)
proposal of all budgets for the Collaboration Program, including as described in
Article 3;

 
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(v)
review and approval of all agreements required or entered into in connection
with the Collaboration Program, and any and all amendments thereto; and

 

 
(vi)
performance of such other functions as appropriate to further the purposes of
this Agreement and the Collaboration Program as determined from time to time by
the parties.

 

 
2.5
AMC Meetings. During the Term of this Agreement, the AMC will meet: (a) at least
once each Calendar Quarter on a date and at a location to be agreed to by the
AMC in advance, and (b) upon written notice by either party to the other that a
meeting is required or requested, in which case a meeting will be held within
thirty (30) calendar days of such notice on a date and at a location to be
agreed to by the parties, or sooner if warranted by circumstances. Notice
requesting a meeting will include adequate information describing the activity
to be reviewed. Any meetings of the AMC may be held in person at a location to
be agreed to by the parties, or by videoconference or teleconference. Other
representatives of the parties may attend AMC meetings as participants. At least
one week prior to any meeting of the AMC, each of the parties will provide the
other party with a proposed agenda of the matters to be discussed at such
meeting. The parties will agree, at the first meeting of the AMC, upon
procedures for maintaining meeting minutes.

 

 
2.6
Vote and Approval. The AMC may take action on a matter at a meeting only if a
quorum exists with respect to that matter. The attendance of at least two (2)
members of the AMC of each party at a meeting will constitute a quorum for the
transaction of business. Each member of the AMC will be entitled to cast one (1)
vote on any matter to be acted upon at any meeting of the AMC. All decisions
made by the AMC will require *** by the members of the AMC present at the
meeting. Any action required or permitted to be taken at any meeting of the AMC
may be taken without a meeting if the action is taken by all members of the AMC.
The action must be evidenced by one or more written consents describing the
action taken and signed by each member of the AMC.

 

 
2.7
Dispute Resolution. (a) The parties recognize that disputes as to certain
matters may from time to time arise during the Term of this Agreement that
relate to either party's rights or obligations hereunder. It is the objective of
the parties to establish procedures to facilitate the resolution of disputes
arising under this Agreement or any other Collaboration Document in an expedient
manner by mutual cooperation and without resort to litigation. To accomplish
this objective, the parties agree to follow the procedures set forth in this
Section 2.7 if and when a dispute arises under any Collaboration Document.

 

 
(b)
Unless otherwise specifically recited in a particular Collaboration Document,
disputes between the parties under such Collaboration Document will be first
referred to the AMC by either party as soon as reasonably possible after such
dispute has arisen. If the AMC is unable to resolve such a dispute within
fifteen (15) days of being requested by a party to resolve such dispute, either
party may, by written notice to the other, have such dispute referred to their
respective executive officers designated below or their designees, for attempted
resolution by negotiations within fifteen (15) days after such notice is
received. The designated officers are as follows:

 
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For Inyx: Dr. Jack Kachkar, Chairman & CEO
 
For King: Brian Markison, President & CEO
 

 
(c)
In the event such designated officers are unable to resolve such dispute within
such 15-day period, then

 

 
(i)
to the extent the dispute relates to a clinical or development activity or
issue, then such matter will be finally decided by King,

 

 
(ii)
to the extent the dispute relates to a regulatory activity or issue, then such
matter will be finally decided by King,

 

 
(iii)
to the extent the dispute relates to a marketing activity or issue, then such
matter will be finally decided by King, or

 

 
(iv)
***

 
Notwithstanding the foregoing, this subsection (c) will not apply to
determinations as to whether either party is in breach of any of its obligations
under this Agreement.
 

 
(d)
Disputes not subject to the final decision-making authority of either party, as
described in Section 2.7(c)(iv) above, will be resolved by binding arbitration
in accordance with the rules of the American Arbitration Association (the “AAA”)
and the provisions of this Section 2.7(d).

 

 
(i)
The party desiring to initiate an arbitration proceeding will send a written
notice to the other party requesting the commencement of the arbitration
proceeding and specifying the issue to be resolved. Within fifteen (15) days
from the date such notice is sent, each party will designate one neutral
arbitrator. Within fifteen (15) days thereafter, the first two arbitrators will
designate a third. Each arbitrator will by training, education, or experience
have knowledge of the subject matter of the dispute. If either party fails to
choose an arbitrator within the foregoing time period, the AAA will choose an
arbitrator on behalf of that party. Disputes about arbitration procedure will be
resolved by the arbitrators or, failing agreement, by the AAA in New York, New
York. Unless otherwise agreed by the parties, the arbitration proceedings will
be conducted in New York, New York.

 
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(ii)
Within 5 days of the selection of the final arbitrator, the parties will deliver
to the arbitrators a joint letter (A) stating each of the issues that is the
subject of the dispute, (B) setting forth each party's final position with
respect to each such issue, and (C) directing the arbitrators to resolve the
dispute by selecting the final position of one of the parties; provided that, if
the parties cannot agree on a joint letter, each party will submit a letter
setting forth its position on each issue, and the failure of any party to submit
such a joint letter will not prevent the arbitration from proceeding. In
addition, each party may submit with the joint letter supporting documentation
for such party's final position. In resolving the dispute, the arbitrators will
have no authority to make a decision on any issue other than by selecting the
final position of one of the parties.

 

 
(iii)
An arbitration decision will be rendered in writing within 30 days of the
submission of the letter described above, which award will be final and binding
on the parties and will be deemed enforceable in any court having concurrent
jurisdiction of the subject matter hereof and the parties. In selecting the
final position of one of the Parties, the arbitrators will have the authority to
grant specific performance and allocate costs between the parties (excluding
attorneys' fees, which each party must bear itself); provided that the
arbitrators will have no authority to award punitive damages or any damages in
excess of the limitations contained in this Agreement.

 
3.
Budget; Collaboration Costs; Collaboration Documents

 

 
3.1
Marketing Plan and Budget. (a) On or prior to October 1 of each year during the
Term of this Agreement, the AMC will agree upon expense contributions to the
Collaboration Program to be made by each party and will approve a marketing plan
and budget for the following Calendar Year (each a “Marketing Plan and Budget”);
provided that the Marketing Plan and Budget for the period between the Effective
Date and December 31, 2005 will be approved by the AMC within one month of the
Effective Date. If the parties are unable to agree on a Marketing Plan and
Budget prior to October 1, the Marketing Plan and Budget applicable to the
current Calendar Year will apply to the following Calendar Year until such time
as the parties are able to agree on a new Marketing Plan and Budget. The initial
draft of the Marketing Plan and Budget will be developed by King and Inyx for
final approval by the AMC, with King developing the portions of the Marketing
Plan and Budget relating to clauses (i) through (v) and (xi) in Section 3.1(b)
below, and Inyx developing the portions relating to clauses (vi) through (x)
below.

 
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(b)
Each Marketing Plan and Budget will set forth the manner in which the Products
are to be promoted during the period to which the Marketing Plan and Budget
relates and will include, at a minimum: (i) the Collaboration Costs to be
incurred in connection with the Collaboration Program; (ii) Products
positioning, strategy, and tactics with supporting advertising and promotional
activity to be undertaken; (iii) any training or sampling programs to be
conducted; (iv) medical and education programs to be conducted; (v) public
relations activities; (vi) the minimum number of quarterly and annual details to
be provided by each party and targets therefor that will be allocated in a
professionally equitable manner; (vii) the number of sales representatives to
Detail the Products; (viii) identification of physician targets; (ix)
determination of data and materials required to assess sales representatives;
(x) Product weighting; and (xi) such other information relating to the marketing
of the Products as deemed advisable by the AMC. Neither party will make any
material change in any previously approved Marketing Plan and Budget without the
prior written approval of the AMC.

 

 
3.2
Collaboration Costs.

 

 
(a)
Allocation. All Collaboration Costs incurred by a party on and after the
Effective Date through the Term of this Agreement ***.

 

 
(b)
Accounting. Within fifteen (15) days following the end of each Calendar Quarter,
Inyx and King will submit to the AMC, or any finance committee thereof, an
accounting of all Collaboration Costs incurred by it with respect to all
Products and the Collaboration Program in the relevant time period. Within
fifteen (15) days thereafter, the AMC will produce a report setting forth the
calculation of Collaboration Costs and their allocation between the parties in
accordance with Section 3.2(a) above. The report will also set forth the amount
of any payments that a party must make to the other party in order to achieve
*** of the Collaboration Costs as provided in Section 3.2(a) above. All such
payments will be made within sixty (60) days following the end of the applicable
Calendar Quarter. Within thirty (30) days after the end of the Calendar Year
relevant to such Calendar Quarters, the AMC will produce a report setting forth
the calculation of aggregate Collaboration Costs incurred over the relevant
Calendar Year and the allocation between the parties in accordance with Section
3.2(a) above. The report will also set forth the amount of any payments that a
party must make to the other party in order to achieve *** of the Collaboration
Costs as provided in Section 3.2(a) above. All such payments will be made within
sixty (60) days following the end of the applicable Calendar Year.

 
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(c)
Advance Payments and Offset. Each of the parties will fund projected
Collaboration Costs on a monthly, prospective basis, such that all anticipated
Collaboration Costs identified in the Marketing Plan and Budget for a given
month, or that are otherwise determined by the AMC to be reasonably likely to be
incurred in such month, will be allocated between the parties *** in accordance
with Section 3.2(a). At the end of each Calendar Quarter, the parties will
reconcile their respective funding payments pursuant to Section 3.2(b) hereof,
and, at the discretion of the party who has funded an amount greater than the
Collaboration Costs allocable to such party for the relevant Calendar Quarter,
such party will be reimbursed by the other party within ten (10) days after the
end of such Calendar Quarter or, at its discretion, will receive a credit
against Collaboration Costs payable by that party in the subsequent Calendar
Quarter(s), which credit amount will be carried forward until fully credited.

 

 
(d)
Currency Conversion. All Collaboration Costs incurred in currencies other than
U.S. Dollars will be converted to U.S. Dollars based on the exchange rate quoted
in The Wall Street Journal, NY Edition on the last business day of the
applicable Calendar Quarter.

 

 
3.3
Collaboration Costs Overruns and Additional Expenditures. (a) Each party will
use commercially reasonable efforts to complete all tasks assigned to it
pursuant to the Collaboration Program in accordance with the funding allocated
to such tasks in the Marketing Plan and Budget. In the event either party
anticipates or becomes aware that the actual costs of any given task assigned to
it may or will likely exceed the funds allocated to such task, such party will
promptly notify the AMC. The AMC and any committee charged with primary
oversight responsibility for the task in question will work together in good
faith for up to thirty (30) days to determine whether to readjust the Marketing
Plan and Budget to allocate additional funds to such task, to revise the scope
of such task to permit satisfactory completion at the then-budgeted funding
level, or both.

 

 
(b)
Notwithstanding the foregoing, either party may, in its discretion, spend
additional amounts above and beyond those allocated in the Marketing Plan and
Budget (“Discretionary Funding”) on any task assigned to such party pursuant to
the Collaboration Program or on any other task the AMC has approved. In such
event, the party wishing to expend Discretionary Funding will first inform the
other party of its intent to do so. If such other party consents to such
Discretionary Funding being deemed a Collaboration Cost, such Discretionary
Funding will constitute a Collaboration Cost, and the rights and obligations of
the parties with respect to such Collaboration Costs will be determined in
accordance with the terms and conditions of the Collaboration Documents as they
apply to the Collaboration Program. If such other party does not consent, then
such Discretionary Funding will not constitute a Collaboration Cost but will be
borne solely by the party undertaking the Discretionary Funding, and the parties
will negotiate in good faith, prior to the expenditure of the Discretionary
Funding, the rights and obligations of the parties with respect to such
Discretionary Funding.

 
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(c)
Notwithstanding Section 2.7(c), except to the extent this Agreement or any other
Collaboration Document expressly provides for payments that do not require AMC
approval, and except to the extent the AMC has approved any payment hereunder,
neither party will (i) be obligated to incur any costs or expend any funds that
have not been approved by such party or (ii) have the authority to cause the
other party to incur any costs or expend any funds that have not been approved
by such other party.

 

 
3.4
Collaboration Documents. In furtherance of the Collaboration Program,
concurrently herewith, the parties are executing the following agreements:

 

 
(a)
a Technology Transfer Agreement, in the form attached hereto as Exhibit A (the
“Technology Transfer Agreement”);

 

 
(b)
a Manufacturing and Supply Agreement, in the form attached hereto as Exhibit B
(the “Manufacturing and Supply Agreement”);

 

 
(c)
a Marketing and Promotion Agreement, in the form attached hereto as Exhibit C
(the “Marketing and Promotion Agreement”);

 

 
(d)
a Development Agreement, in the form attached hereto as Exhibit D (the
“Development Agreement”); and

 

 
(e)
a Quality Agreement, in the form attached hereto as Exhibit E (the “Quality
Agreement”).

 
4.
Licenses

 

 
4.1
License Grant. Subject to the terms and conditions of this Agreement, beginning
on the Effective Date and thereafter during the Term, King hereby grants to Inyx
a non-exclusive limited license (without a right to sublicense except as
provided in Section 4.2) under the Technology and Patent Rights to make, use,
sell, offer for sale, and import Products in the Territory, which license will
be exercisable by Inyx only as part of the Collaboration Program and only for
the conduct of the activities required in the performance of its obligations or
exercise of its rights under the Collaboration Documents.

 
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4.2
Sublicenses. Inyx may not sublicense any of the rights granted to it pursuant to
this Agreement or the other Collaboration Documents, or utilize subcontractors
in the performance thereof, except to wholly owned subsidiaries of Inyx. In the
event of a grant of a sublicense to any such subsidiary (or any other Person
with King's consent), Inyx acknowledges and agrees that it will remain liable
for all obligations, including obligations to perform, under the Collaboration
Documents and for all actions of such subsidiaries (or other sublicensee) under
any such sublicense. All such sublicensees must agree, in writing, to be bound
by the terms of the Collaboration Documents, including the confidentiality and
assignment provisions thereof. Inyx will notify King, in writing, of any such
subsidiary sublicense promptly upon granting of such sublicense.

 

 
4.3
Consultants. Inyx, with the prior written consent of the AMC, may use individual
Consultants in connection with the performance of its duties and the exercise of
its rights under this Agreement and the other Collaboration Documents. Inyx
acknowledges and agrees that it will remain liable for all obligations,
including obligations to perform, under the Collaboration Documents and for all
actions of such Consultants pursuant thereto, and Inyx will indemnify and hold
King harmless from and against any and all other claims or liabilities for costs
and expenses incurred by reason of any action of any Consultants.

 

 
4.4
Termination of Collaboration Documents. Inyx understands and agrees that the
scope of the license granted in Section 4.1 will be reduced from time to time as
each of the Collaboration Documents expires or terminates.

 
5.
Intellectual Property Rights

 

 
5.1
Inventions Disclosure and Generally. Each party will promptly provide the AMC
with written notice concerning all Improvements that are conceived, made, or
developed by employees or Consultants of such party or its Affiliates, whether
alone or jointly with the other party or its Affiliates or with permitted Third
Parties. Such notice will be treated as the Confidential Information of King
hereunder.

 

 
5.2
Ownership. King will have sole and exclusive ownership of all right, title, and
interest on a worldwide basis, with full rights to license or sublicense,
subject to the licenses granted Inyx in the Collaboration Documents, in and to
any and all

 

 
(a)
the Products and New Products;

 

 
(b)
Technology transferred to Inyx's facilities pursuant to the Technology Transfer
Agreement;

 

 
(c)
Technology and Patent Rights as they exist as of the Effective Date; and

 
CONFIDENTIAL TREATMENT

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(d)
any Improvements to the Technology and all associated Patent Rights, developed
during the Term, whether developed by King or Inyx or jointly by King and Inyx
and any permitted Third Parties, including all rights to any Technology and
Patent Rights related to Excluded New Products;

 
provided that such ownership of right, title, and interest does not extend to
the Inyx Respiratory Products.
 

 
5.3
Assignment. Inyx agrees to, and hereby does, and will cause each of its
employees, Consultants, Affiliates, and permitted sublicensees (collectively
with Inyx, the “Assignors”) to, transfer, assign, and convey exclusively to
King, its successors and assigns, forever, the entire right, title, and interest
in and to all Improvements developed by each such Assignor, alone or jointly
with each other or King, including all intellectual property rights associated
therewith. Inyx further agrees, and will cause the other Assignors, (i) to
promptly provide King with written notice, in sufficient detail, of any
Improvements such Assignor makes pursuant to the Collaboration Documents and
(ii) to provide King with such additional information and to execute and
deliver, and to cause the other Assignors to execute and deliver, any documents
or take any other actions or otherwise cooperate with King as may reasonably be
necessary, or as King may reasonably request, to document, enforce, protect, or
otherwise perfect King's rights in any Improvements, including filing any
applicable patent applications.

 

 
5.4
Employees. Inyx agrees to have each employee enter into a written agreement with
Inyx that includes an assignment to Inyx, or directly to King with respect to
all Improvements, of all right, title, and interest in and to all work product
and all inventions arising during the course of his or her employment with Inyx
in connection with such Improvements or the Collaboration Program, and all
intellectual property rights attaching thereto.

 
6.
FILING, PROSECUTION, AND MAINTENANCE OF PATENT RIGHTS

 

 
6.1
Patent Filing, Prosecution, and Maintenance. During the Term of this Agreement,
with respect to any Patent Rights arising hereunder:

 

 
(a)
King, acting through patent attorneys or agents of its choice, will be
responsible for the preparation, filing, prosecution, and maintenance of all
patents and patent applications, whether related to Technology or Patent Rights.
At King's request, Inyx will reasonably cooperate with and assist King in
connection with such activities.

 

 
(b)
Except as expressly provided herein, King makes no warranty with respect to the
validity, perfection, or dominance of any patent or other proprietary right or
with respect to the absence of rights in Third Parties that may be infringed by
the manufacture or sale of any Product. Each party agrees to bring to the
attention of the AMC any patent or patent application it discovers that relates
to the Collaboration Program.

 
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(c)
Except as provided in the Development Agreement with respect to Excluded Patent
Costs, all reasonable fees and expenses of counsel and other reasonable costs
and expenses of each party attributable to the filing, prosecution, and
maintenance of Patent Rights or Technology used or reasonably expected, in the
judgment of the AMC, to be used or useful in the Collaboration Program will be
deemed Regulatory and IP Costs.

 

 
6.2
Information and Cooperation. King will keep the AMC regularly informed of the
status of the Patent Rights and will provide to Inyx's legal counsel, subject to
appropriate confidentiality or common interest agreements, with (a) copies of
all filings and correspondence with the patent offices, administrative boards,
or courts that King sends or receives in connection with filing, prosecution,
maintenance, and defense of the Patent Rights, and (b) copies of filings and
correspondence under clause (a) sufficiently in advance of the due date so as to
give Inyx's legal counsel sufficient time to comment; provided nothing herein
will limit King's sole right to file, prosecute, maintain, and defend the Patent
Rights in its sole discretion.

 

 
6.3
Legal Action.

 

 
(a)
Actual or Threatened Infringement.

 

 
(i)
In the event either party becomes aware of any possible infringement or
unauthorized possession, knowledge, or use of any Patent Right, Technology, or
any Trademarks (collectively, an “Infringement”), that party will promptly
notify the AMC and the other party and provide them with full details (an
“Infringement Notice”). The AMC will make a recommendation as to which actions
should be taken with respect to such matters; provided that King will have the
final decision as to whether to follow such recommendation. King will be under
no obligation to prosecute or prevent the Infringement of or relating to Patent
Rights, Technology, or Trademarks.

 

 
(ii)
If the matter relates to an Excluded New Product and if King does not commence
an action to prosecute, or otherwise take steps to prevent or terminate, the
Infringement within one hundred eighty (180) days from any Infringement Notice,
expressly excluding any immaterial infringement, then Inyx will have the right
and option to take such action as Inyx will consider appropriate to prosecute or
prevent such Infringement, but only if such Infringement is in the Territory. No
suit instituted by Inyx pursuant to this clause (ii) may be settled without the
approval of the AMC.

 
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(iii)
All reasonable costs and expenses expended by a party in connection herewith
will be deemed Collaboration Costs to the extent the same are related to a
Product. All monies or other assets recovered by a party pursuant hereto will be
allocated first to offset all costs and expenses of such suit, and all remaining
amounts will be retained by King.

 

 
(iv)
If either party determines that it is necessary or desirable for the other to
join any such suit, action, or proceeding, the other party will, upon written
notice from the prosecuting party, execute all papers and perform such other
acts as may be reasonably required in the circumstances.

 

 
(v)
Each party will always have the right to be represented by counsel of its own
selection in any suit instituted under this Section 6.3 by the other party for
Infringement. If either party lacks standing and the other party has standing to
bring any such suit, action, or proceeding, then such other party will bring
such suit at the request of the first party.

 

 
(vi)
In any action under this Section 6.3, the parties will fully cooperate with and
assist each other.

 

 
(b)
Defense of Claims.

 

 
(i)
In the event that any action, suit, or proceeding is brought against King or
Inyx or any Affiliate of either party alleging the infringement of the
technology or intellectual property rights of a Third Party by reason of any
party's activities performed pursuant to the Collaboration Documents, the AMC
will determine how the parties will defend themselves in such action. All costs
related to the same will be deemed Regulatory and IP Costs. Each party will have
the right to separate counsel in any such action or proceeding. The parties will
cooperate with each other in the defense of any such suit, action, or
proceeding; provided, however, that King will have the option to assume control
of the defense of any action, suit, or proceeding. The parties will give each
other prompt written notice of the commencement of any such suit, action, or
proceeding or claim of infringement and will furnish each other a copy of each
communication relating to the alleged infringement. King, in its sole
discretion, may compromise, litigate, settle, or otherwise dispose of any such
suit, action, or proceeding. If the defending party agrees that the other party
should institute or join any suit, action, or proceeding pursuant to this
Section 6.3, the defending party may join the other party as a party to the
suit, action, or proceeding, and the party so joined will execute all documents
and take all other actions, including giving testimony, that may reasonably be
required in connection with the prosecution of such suit, action, or proceeding.

 
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(ii)
If as a consequence of such action, suit, or proceeding by a Third Party
claiming that the discovery, development, manufacture, use, or sale of a Product
or Excluded New Product infringes such Third Party's intellectual property
rights, the parties will examine and discuss in good faith the consequences of
such prohibition or restriction or other conditions on this Agreement and the
other Collaboration Documents and on possible modifications thereto.

 

 
6.4
Trademark Prosecution. King will be responsible for the filing, prosecution,
defense, and maintenance before all trademark offices of any Trademarks
applicable to the Products and the Excluded New Products, and all related and
reasonable costs and expenses will be deemed Regulatory and IP Costs.

 
7.
Obligations OF INYX

 

 
7.1
* * *

 

 
7.2
* * *

 
8.
Obligations OF KING

 

 
8.1
* * *

 

 
8.2
* * *

 

 
8.3
Manufacturing Right of First Negotiation. Subject to the terms and conditions of
this Section 8.3, during the Term, King grants to Inyx a right of first
negotiation with respect to the manufacture of any products of King in the
respiratory field not already manufactured pursuant to the Manufacturing and
Supply Agreement (a “King Respiratory Product”). In the event that King elects
to have a party other than King or its Affiliates manufacture a King Respiratory
Product, King will deliver to Inyx a written notice (the “Manufacturing Offer
Notice”) identifying the King Respiratory Product and the price and terms, if
any, upon which King proposes to have such King Respiratory Product
manufactured. Inyx will have fifteen (15) business days following the receipt of
any such Manufacturing Offer Notice to notify King in writing of Inyx's election
to negotiate with King. Upon receipt of Inyx's election, King will negotiate
exclusively with Inyx for a period of forty-five (45) days with respect to the
manufacture of such King Respiratory Product, based on the price and terms, if
any, set out in the Manufacturing Offer Notice. In the event the parties fail to
come to terms regarding the manufacture of the King Respiratory Product within
the aforesaid period, or, if having agreed to terms, the parties are unable to
enter definitive agreements within thirty (30) days following such agreement,
then King will be free to enter into an agreement with a Third Party to
manufacture such King Respiratory Product on terms and conditions agreed to by
King and such Third Party.

 
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8.4
***

 
9.
CERTAIN REGULATORY MATTERS

 

 
9.1
Regulatory Filings. King will be responsible for filing, obtaining, and
maintaining Regulatory Approvals in connection with the Collaboration Program,
including all Excluded New Products and including making all Regulatory Filings;
and all such approvals, including any NDAs and INDs, will be owned by and held
in the name of King.

 

 
9.2
AMC Oversight. King will provide the AMC with reports on the progress of all
Regulatory Filings and communications with Regulatory Authorities in the
Territory and, if requested by the AMC, with (i) copies of all Regulatory
Filings relating to the Territory and (ii) copies of all correspondence with
Regulatory Authorities in the Territory. To the extent practicable and
consistent with applicable laws, King will afford Inyx a reasonable opportunity
to comment on such Regulatory Filings; provided that nothing herein will limit
King's sole right to oversee such Regulatory Filings.

 

 
9.3
Inyx's Responsibilities. Inyx agrees to cooperate with King with respect to the
activities hereunder, including as follows:

 

 
(a)
to make Inyx's personnel reasonably available, upon reasonable notice of King,
at such personnel's place of employment to consult with King on issues arising
related to the activities conducted in accordance with this Article 9 or
otherwise relating to regulatory matters involving the Products or Excluded New
Products, including any request from any Regulatory Authority, including
regulatory, scientific, technical, and clinical testing issues, or otherwise;

 

 
(b)
to cooperate with King, at King's request, to comply with specific requests of a
Regulatory Authority with respect to data supplied or to be supplied for filing
with such Regulatory Authority, or with respect to Products supplied by King;
and

 

 
(c)
from time to time, or upon reasonable request, during the term of this
Agreement, to transfer to King all previously undisclosed data relating to the
Products and Excluded New Products that is in Inyx's possession or control.

 
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9.4
Regulatory Costs. All costs and expenses associated with filing, obtaining, and
maintaining Regulatory Approvals in connection with the Collaboration Program
will be deemed Regulatory and IP Costs.

 

 
9.5
Licenses. Each party hereto will, at its sole cost and expense, maintain in full
force and effect all necessary licenses, permits, and other authorizations
required by law, regulation, ordinance, or statute to carry out its duties and
obligations under the Collaboration Documents.

 
10.
RECORDKEEPING AND AUDITS

 

 
10.1
Maintenance of Books and Records. Each party will maintain complete and accurate
books and records in sufficient detail, in accordance with GAAP and all
applicable laws, rules, ordinances, and regulations, to enable verification of
the performance of such party's obligations under the Collaboration Documents
and verification of the Collaboration Costs incurred by such party. Such records
will be maintained for a period of twenty-four (24) months after the end of the
Term or longer if required by applicable law.

 

 
10.2
Payment Audits. (a) Either party (herein, the “Auditing Party”) may demand, no
more than once during any Calendar Year from the Effective Date until two (2)
years following the end of the Term, an audit of the relevant books and records
of the other party (herein, the “Audited Party”) in order to verify the Audited
Party's reports with respect to Collaboration Costs and any payments required
under the Collaboration Documents. Upon no less than fifteen (15) days' prior
written notice to the Audited Party, the Audited Party will grant access to the
relevant books and records of the Audited Party to members of a nationally
recognized independent public accounting firm selected by the Auditing Party in
order to conduct a review or audit thereof. Such access will be available during
normal business hours. The accountants will report their conclusions and
calculations to the Auditing Party and the Audited Party; provided that in no
event will the accountants disclose any information of the Audited Party except
to the extent necessary to verify the Audited Party's reporting and other
compliance with the terms of this Agreement, and, at the request of the Audited
Party, such accountants will execute appropriate non-disclosure agreements.
Except as hereinafter set forth, the Auditing Party will bear the full cost of
the performance of any such audit.

 

 
(b)
If, as a result of any audit of the books and records of Audited Party, it is
shown that the payments from one party to the other under this Agreement with
respect to the period of time audited were less than or more than the amount
that should have been paid, or it is shown that the Collaboration Costs claimed
by the Audited Party were overstated, then the parties will reconcile the
amounts owed by each party to the other. In addition, if such audit demonstrates
that Collaboration Costs were overstated or revenue underreported by more than
*** for the period audited, then the Audited Party will also reimburse the
Auditing Party for its documented reasonable out-of-pocket costs and expenses
incurred in connection with the audit.

 
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10.3
Compliance Audits. (a) In addition to the access and audit rights of the parties
set forth in Section 10.2, no more than once during any Calendar Year during the
Term, upon reasonable prior notice, each party (the “Requested Party”) will, and
will cause its Affiliates to, afford to the other party (the “Requesting Party”)
reasonable access during normal business hours (and at such other times as the
parties may mutually agree) to such of the Requested Party's relevant books,
records, and other information as the Requesting Party may reasonably request in
order to monitor the Requested Party's compliance with such party's obligations
under the Collaboration Program. Such access will be available during normal
business hours. Any inspection conducted by either party pursuant to this
Section 10.3 will be at the sole cost and expense of the Requesting Party.

 
11.
TERM AND TERMINATION

 

 
11.1
Term of Agreement. The term of this Agreement (the “Term”) will commence as of
the Effective Date hereof and will continue, unless terminated sooner or
extended as provided below, until the earlier of (i) the later of December 31,
2015 and the last date on which any Approved New Product is sold and (ii)
expiration or termination of the last of the other Collaboration Documents.

 

 
11.2
Termination by Either Party. (a) Each party will have the right to terminate
this Agreement at any time upon written notice to the other party, if such other
party breaches in a material way any of the representations, warranties,
covenants, or agreements set forth in this Agreement or otherwise materially
defaults in the performance of any of its duties or obligations under this
Agreement, which breach or default is not cured within sixty (60) days after
written notice is given to the breaching party specifying the breach or default.

 

 
(b)
Each party may, by written notice delivered to the breaching party, terminate
this Agreement if there are two or more similar or substantially similar
material breaches of this Agreement by the breaching party within any 12-month
period, which termination will be effective thirty (30) days following such
written notice; provided, however, that any failure of a non-breaching party to
exercise this termination right with respect to certain breaches will not be
deemed a waiver of the ability of such non-breaching party to exercise this
right upon any subsequent breach.

 

 
(c)
To the extent permitted by law, each party will have the right to terminate this
Agreement immediately upon notice to the other party, if such other party is
declared bankrupt or insolvent, if there is an assignment for the benefit of
creditors, or if a receiver is appointed or proceedings commenced (and not
dismissed within sixty (60) days), voluntarily or involuntarily, under any
bankruptcy or similar law.

 
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11.3
Termination by King. (a) King will have the right to terminate this Agreement
immediately upon written notice to Inyx if (i) subject to the terms of Section
11.3(b) below, there is a Change of Control of Inyx, or (ii) the Manufacturing
and Supply Agreement terminates.

 

 
(b)
* * *

 

 
11.4
Effects of Termination. (a) Upon termination or expiration of this Agreement,
all other Collaboration Documents, except the Manufacturing and Supply Agreement
and the Quality Agreement, and the Development Agreement (to the extent provided
in Section 7.3 of such agreement), will concurrently terminate.

 

 
(b)
Neither the termination nor expiration of this Agreement will release or operate
to discharge either party from any liability or obligation that may have accrued
prior to such termination or expiration. Any termination of this Agreement as
provided herein will not be an exclusive remedy but will be in addition to any
remedies whatsoever that may be available to the terminating party.

 

 
(c)
Notwithstanding the giving of any notice of termination pursuant to this Article
11, each party will continue to fulfill its obligations under this Agreement at
all times until the effective date of any such termination.

 

 
11.5
Actions Upon Termination. Upon the termination or expiration of this Agreement
for any reason,

 

 
(a)
Except as provided in a concurrently terminating Collaboration Document, Inyx
will immediately cease all uses of the license granted hereunder;

 

 
(b)
Inyx will deliver to King all Improvements and all documents, material, data,
records, analyses, and information related thereto; and

 

 
(c)
The parties will cooperate with each other, including by making their personnel
and other resources reasonably available to each other as necessary, for a
period of ninety (90) days to effect an orderly termination of the Collaboration
Program and an orderly transition of Collaboration Program responsibilities to
King.

 

 
11.6
Survival. The provisions of Articles 2 (to the extent necessary for the AMC to
perform the actions assigned to it following termination or expiration of this
Agreement or any other Collaboration Document), 5, 11, 12, 13, and 15 and
Sections 10.1, 10.2, and 14.3 will survive any expiration or termination of this
Agreement.

 

 
11.7
Payments Upon Termination. (a) The expiration or termination of this Agreement
pursuant to this Article 11 will not release either party from any obligation to
pay to the other party any amounts accrued under any of the Collaboration
Documents in connection with activities completed, Collaboration Costs incurred,
and revenue realized with respect to the period prior to the effective date of
such expiration or termination.

 
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(b)
Within thirty (30) days after the expiration or termination of this Agreement,
each party will provide to the other (i) a reasonably detailed statement of
Collaboration Costs incurred by such party during the period of January 1 of the
Calendar Year in which such expiration or termination occurs through the
effective date of such expiration or termination; and (ii) any final reports
with respect to revenue or Net Sales relating to the Products during such
period, as required by any of the other Collaboration Documents.

 

 
(c)
Within thirty (30) days after receipt of such information, the AMC will
determine the net amounts due and or payable by Inyx and King, and such amounts
will be paid by the parties within thirty (30) days after such AMC
determination.

 

 
11.8
Effects of Termination of any Collaboration Document. Upon termination or
expiration of any Collaboration Document (the “Terminated Agreement”), except to
the extent of the survival of any provisions thereof, all references to
Collaboration Documents herein will not include a reference to such Terminated
Agreement.

 
12.
CONFIDENTIALITY; Announcements

 

 
12.1
Confidential Information. (a) Each party acknowledges that it may receive
confidential or proprietary information (the “Confidential Information”) of the
other party in the performance of the Collaboration Documents, including
information obtained or reviewed in connection with any audits or investigations
performed pursuant to Section 10.2 or Section 10.3 of this Agreement. Each party
will hold confidential and will not, directly or indirectly, disclose, publish,
or use for the benefit of any Third Party or itself, except in carrying out its
duties under the Collaboration Documents, any confidential or proprietary
information of the other party or confidential or proprietary information
jointly developed by the parties, without first having obtained the furnishing
party's written consent to such disclosure or use. “Confidential Information”
will include know-how, scientific information, clinical data, efficacy and
safety data, adverse event information, formulas, methods and processes,
specifications, pricing information (including discounts, rebates, and other
price adjustments), and other terms and conditions of sales, customer
information, business plans, and all other intellectual property. The Patent
Rights and Technology will be deemed the Confidential Information of King. The
restrictions in this Article 12 will not apply to any information that:

 
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(i)
is or becomes part of the public domain other than by unauthorized acts of the
receiving party or its Affiliates, sublicensees, Consultants, and contractors,
as applicable;

 

 
(ii)
can be shown by written documentation to have been disclosed to the receiving
party or its Affiliates or sublicensees by a Third Party who was not otherwise
prohibited from transmitting the information to the receiving party by a
contractual, legal, or fiduciary obligation of confidence to the disclosing
party;

 

 
(iii)
prior to disclosure under this Agreement, was already in the possession of the
receiving party or its Affiliates or sublicensees, provided such information was
not obtained directly or indirectly from the other party hereto pursuant to a
confidentiality agreement;

 

 
(iv)
can be shown by written documentation to have been independently developed by
the receiving party or its Affiliates without breach of any of the provisions of
this Agreement, including without reference to the Confidential Information of
the disclosing party;

 

 
(v)
is disclosed by the receiving party pursuant to oral questions, interrogatories,
requests for information or documents, subpoena, or a civil investigative demand
of a court or governmental agency; provided, however, that the receiving party
notifies the other party promptly following receipt thereof so that the other
may seek a protective order or other appropriate remedy to prevent or limit such
disclosure; and provided further that the receiving party furnishes only that
portion of the information that it is advised by counsel is legally required and
imposes such obligations of secrecy as are possible in that regard;

 

 
(vi)
is required or permitted to be disclosed by the receiving party under any
statutory, regulatory, or similar legislative requirement or any rule of any
stock exchange to which it or any Affiliate is subject; provided, however, that
the other party will be allowed to review the proposed disclosure and the
receiving party agrees to consider in good faith any proposed revisions thereof
provided to the receiving party within two (2) business days of the other
party's receipt of the proposed disclosure, and the parties will seek
confidential treatment for such disclosure as permitted by applicable law; or

 

 
(vii)
is required by authorities to obtain Regulatory Approval.

 
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(b)
The receiving party agrees that it will disclose the Confidential Information
only to its employees and Consultants who need to know such Confidential
Information for such party to perform its obligations hereunder. The receiving
party agrees (i) to inform all of its employees and Consultants who receive
Confidential Information of the confidential nature thereof and to direct all
such employees and Consultants to treat the Confidential Information
confidentially in accordance with this Agreement; (ii) to be responsible for any
breach of the Agreement by any of its employees and Consultants; and (iii) to
make all reasonable, necessary, and appropriate efforts to safeguard the
Confidential Information from disclosure other than as permitted hereby, which
will include requiring all employees and Consultants who have access to
Confidential Information of the disclosing party to execute written obligations
to maintain the same in confidence and not to use such information except as
expressly permitted under the Collaboration Documents. Each party agrees to
enforce confidentiality obligations to which its employees and Consultants are
obligated.

 

 
(c)
Upon the expiration or termination of this Agreement or upon request of the
disclosing party, the receiving party will return to the disclosing party any
and all Confidential Information of the disclosing party and any reproductions
thereof.

 

 
(d)
The obligations set forth in this Article 12 will survive the termination or
expiration of this Agreement for a period of five (5) years (or, in the case of
any Confidential Information identified as a trade secret by the disclosing
party at the time of disclosure, for so long as such trade secret Confidential
Information is susceptible of remaining a trade secret). 

 

 
12.2
Public Announcements. The form and content of any public announcement to be made
by one party regarding this Agreement, any of the other Collaboration Documents,
or the Collaboration Program, or the subject matter contained in the
Collaboration Documents, will be subject to the prior written consent of the
other party (which consent will not be unreasonably withheld, delayed, or
conditioned), except as may be required by applicable law (including disclosure
requirements of the Securities and Exchange Commission, the New York Stock
Exchange, NASDAQ, or any other stock exchange), in which event such party will
endeavor to give the other party reasonable advance notice and review of any
such disclosure.

 
13.
INDEMNIFICATION AND INSURANCE

 

 
13.1
Indemnification by Inyx. Inyx will defend, indemnify, and hold King and its
Affiliates, and their respective officers, directors, employees, agents,
successors, and assigns, harmless from and against any and all Third Party
claims, liabilities, losses, costs, actions, suits, judgments, damages, and
expenses (including attorneys' fees and costs) arising out of: (a) any breach by
Inyx of any representation, warranty, or covenant contained in the Collaboration
Documents; (b) the negligence or willful misconduct of Inyx, its Affiliates, or
their respective employees or agents in the performance of any obligation under
the Collaboration Documents; and (c) any claims relating to the performance or
nonperformance of Inyx's obligations under the Collaboration Documents;
provided, however, that Inyx will not be required to indemnify King with respect
to any such claim, liability, loss, cost, action, suit, damage, or expense
hereunder to the extent the same is caused primarily by any breach of contract,
negligent act or omission or intentional misconduct by King or any or its
Affiliates or is otherwise covered by King's indemnification obligation in
Section 13.2.

 
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13.2
Indemnification by King. King will defend, indemnify, and hold Inyx and its
Affiliates, and their respective officers, directors, employees, agents,
successors, and assigns, harmless from and against any and all Third Party
claims, liabilities, losses, costs, actions, suits, judgments, damages, and
expenses (including attorneys' fees and costs) arising out of: (a) any breach by
King of any representation, warranty, or covenant contained in the Collaboration
Documents; (b) the negligence or willful misconduct of King, its Affiliates, or
their respective employees or agents in the performance of any obligation under
the Collaboration Documents; and (c) any claims relating to the performance or
nonperformance of King's obligations under the Collaboration Documents;
provided, however, that King will not be required to indemnify Inyx with respect
to any such claim, liability, loss, cost, action, suit, damage, or expense
hereunder to the extent the same is caused primarily by any breach of contract,
negligent act or omission or intentional misconduct by Inyx or any or its
Affiliates or is otherwise covered by Inyx's indemnification obligation in
Section 13.1.

 

 
13.3
Claims Procedures. A party (the “indemnitee”) that intends to claim
indemnification under this Article 13 will notify the other party (the
“indemnitor”) within a reasonable time in writing of any action, claim, or
liability in respect of which the indemnitee believes it is entitled to claim
indemnification; provided that the failure to give timely notice to the
indemnitor will not release the indemnitor from any liability to the indemnitee
except to the extent the indemnitor is actually prejudiced thereby. The
indemnitor will have the right, by notice to the indemnitee, to assume the
defense of any such action or claim within the fifteen (15) day period after the
indemnitor's receipt of notice of any action or claim with counsel of the
indemnitor's choice and at the sole cost of the indemnitor. If the indemnitor
does not so assume the defense of such Third Party claim, the indemnitee may
assume such defense with counsel of its choice and at the sole cost of the
indemnitor. If the indemnitor so assumes such defense, the indemnitee may
participate therein through counsel of its choice, but at the sole cost of the
indemnitee. The party not assuming the defense of any such claim will render all
reasonable assistance to the party assuming such defense, and all reasonable
out-of-pocket costs of such assistance will be for the account of the
indemnitor. No such claim will be settled other than by the party defending the
same, and then only with the consent of the other party, which will not be
unreasonably withheld; provided that the indemnitee will have no obligation to
consent to any settlement of any such action or claim that imposes on the
indemnitee any liability or obligation that cannot be assumed and performed in
full by the indemnitor, and the indemnitee will have no right to withhold its
consent to any settlement of any such action or claim if the settlement involves
only the payment of money by the indemnitor or its insurer.

 
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13.4
Insurance. During the Term, each party will maintain insurance (either through
purchase of a policy from a nationally recognized Third Party insurer or through
maintenance of a self-insurance program) against such risks and upon such terms
(including coverages, deductible limits, and self-insured retentions) as is
customary for the activities to be conducted by such party under this Agreement
and is appropriate to cover its indemnification obligations hereunder. Each
party will name the other as an additional insured on such party's relevant
insurance policies and will furnish to the other party evidence of such
insurance, upon request.

 

 
13.5
Limited Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT OR
ANY OTHER COLLABORATION DOCUMENT, NEITHER KING NOR INYX WILL BE LIABLE WITH
RESPECT TO ANY SUBJECT MATTER OF THE COLLABORATION DOCUMENTS UNDER ANY CONTRACT,
NEGLIGENCE, STRICT LIABILITY, OR OTHER LEGAL OR EQUITABLE THEORY FOR (I) ANY
INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES OR (II) COST
OF PROCUREMENT OF SUBSTITUTE GOODS, TECHNOLOGY, OR SERVICES.

 
14.
REPRESENTATIONS AND WARRANTIES

 

 
14.1
By Inyx. Inyx represents and warrants to King that:

 

 
(a)
the execution, delivery, and performance of each Collaboration Document by Inyx
does not conflict with, or constitute a breach of or under, any order, judgment,
agreement, or instrument to which Inyx is a party;

 

 
(b)
the execution, delivery, and performance of each Collaboration Document by Inyx
does not require the consent of any Person or the authorization of (by notice or
otherwise) any governmental or regulatory authority;

 

 
(c)
each Collaboration Document is a legal, valid, and binding obligation of Inyx
enforceable against it in accordance with its terms and conditions, except as
enforceability may be limited by bankruptcy, insolvency, or other laws affecting
the enforcement of creditors' rights generally, and except that the availability
of the remedy of specific performance or other equitable relief is subject to
the discretion of the court before which any proceeding therefor may be brought;
and

 
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(d)
As of the Effective Date, neither Inyx nor any of its employees or agents, in
their capacity as such, have been disqualified or debarred by the FDA, pursuant
to 21 U.S.C. §§ 335(a) or (b), or been charged with or convicted under United
States law for conduct relating to the development or approval, or otherwise
relating to the regulation of any Product under the Generic Drug Enforcement Act
of 1992, or any other relevant law, rule, or regulation or been disbarred,
disqualified, or convicted under or for any equivalent or similar applicable
foreign law, rule, or regulation.

 

 
14.2
By King. King represents and warrants to Inyx that:

 

 
(a)
the execution, delivery, and performance of each Collaboration Document by King
does not conflict with, or constitute a breach of or under, any order, judgment,
agreement, or instrument to which King is a party;

 

 
(b)
the execution, delivery, and performance of each Collaboration Document by King
does not require the consent of any Person or the authorization of (by notice or
otherwise) any governmental or regulatory authority;

 

 
(c)
each Collaboration Document is a legal, valid, and binding obligation of King
enforceable against it in accordance with its terms and conditions, except as
enforceability may be limited by bankruptcy, insolvency, or other laws affecting
the enforcement of creditors' rights generally, and except that the availability
of the remedy of specific performance or other equitable relief is subject to
the discretion of the court before which any proceeding therefor may be brought;
and

 

 
(d)
As of the Effective Date, neither King nor any of its employees or agents, in
their capacity as such, have been disqualified or debarred by the FDA, pursuant
to 21 U.S.C. §§ 335(a) or (b), or been charged with or convicted under United
States law for conduct relating to the development or approval, or otherwise
relating to the regulation of any Product under the Generic Drug Enforcement Act
of 1992, or any other relevant law, rule, or regulation or been disbarred,
disqualified, or convicted under or for any equivalent or similar applicable
foreign law, rule, or regulation.

 

 
14.3
Warranty Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT,
NEITHER PARTY MAKES ANY WARRANTY WITH RESPECT TO ANY TECHNOLOGY, GOODS,
SERVICES, RIGHTS, OR OTHER SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND
NONINFRINGEMENT WITH RESPECT TO ANY AND ALL OF THE FOREGOING.

 
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15.
MISCELLANEOUS PROVISIONS

 

 
15.1
Notices. Except as otherwise specifically provided herein, any notice or other
documents to be given under this Agreement will be in writing and will be deemed
to have been duly given if sent by registered post, nationally recognized
overnight courier, or confirmed facsimile transmission to a party (followed by
hard copy by mail), or delivered in person to a party at the address or
facsimile number set out below for such party or such other address as the party
may from time to time designate by written notice to the other:

 
If to King:

 
King Pharmaceuticals, Inc.
501 Fifth Street
Bristol, Tennessee 37620
Attn: President
Facsimile: (423) 989-8006
 
with a copy to:

 
King Pharmaceuticals, Inc.
501 Fifth Street
Bristol, Tennessee 37620
Attn: Executive Vice President and General Counsel
Facsimile: (423) 989-6282
 
and
 
Jones Day
222 East 41st Street
New York, New York 10017
Attn: John J. Hyland, Esq.
Facsimile: (212) 755-7306
 
If to Inyx:

 
Inyx, Inc.
825 Third Avenue
40th Floor
New York, New York 10022
Attn: Chairman and CEO
Facsimile: (212) 838-0060

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with a copy to:

 
Bennett Jones LLP
10th Floor, 10035-105 Street
Edmonton, Alberta
Canada T5J 3T2
Attn: Enzo J. Barichello, Q.C.
Facsimile: (780) 421-7951
 
Any such notice or other document will be deemed to have been received by the
addressee three (3) business days following the date of dispatch of the notice
or other document by post or, where the notice or other document is sent by
overnight courier, by hand, or is given by facsimile, simultaneously with the
transmission or delivery thereof.
 

 
15.2
Assignment. Inyx may not assign or otherwise transfer this Agreement or any
interest herein or right hereunder without the prior written consent of King,
and any such purported assignment, transfer, or attempt to assign or transfer
any interest herein or right hereunder will be void and of no effect. King may
freely assign and otherwise transfer this Agreement or any interest herein or
right hereunder without Inyx's consent. Subject to the foregoing, this Agreement
will be binding upon and inure to the benefit of the parties hereto and their
respective permitted successors and assigns.

 

 
15.3
Governing Law. This Agreement will be construed under and in accordance with,
and governed in all respects by, the laws of the State of New York, without
regard to its conflicts of law principles.

 

 
15.4
Non-Waiver. The failure of either party to enforce or to exercise, at any time
or for any period of time, any term of or any right arising pursuant to this
Agreement does not constitute, and will not be construed as, a waiver of such
term or right, and will in no way affect that party's right later to enforce or
exercise such term or right.

 

 
15.5
Entire Agreement. This Agreement, together with the other Collaboration
Documents, contains all of the terms agreed to by the parties regarding the
subject matter hereof and thereof and supersede any prior agreements,
understandings, or arrangements between them, whether oral or in writing. This
Agreement may not be amended, modified, altered, or supplemented except by means
of a written agreement or other instrument executed by both of the parties
hereto. No course of conduct or dealing between the parties will act as a
modification or waiver of any provisions of this Agreement.

 

 
15.6
Consent to Jurisdiction. Each of the parties hereby submits to the exclusive
general jurisdiction of the courts of the State of New York and the courts of
the United States of America for the Eastern District of New York in any action
or proceeding arising out of or relating to this Agreement and to the
jurisdiction of the appellate courts to which appeals are required to be taken
from any of the foregoing. Each of the parties waives any defense of
inconvenient forum to the maintenance of any such action or proceeding. Any
party may make service on any other party by sending or delivering a copy of the
process to the party to be served at the address and in the manner provided for
the giving of notices in Section 15.1 above. Nothing in this Section 15.6,
however, will affect the right of any party to serve legal process in any other
manner permitted by law or equity.

 
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15.7
Equitable Relief. Each party acknowledges that a breach by it of the provisions
of this Agreement, including the provisions of Articles 5 and 12 and Section
7.1, cannot reasonably or adequately be compensated in damages in an action at
law and that such a breach may cause the other party irreparable injury and
damage. By reason thereof, each party agrees that the other party is entitled to
seek, in addition to any other remedies it may have under this Agreement or
otherwise, preliminary and permanent injunctive and other equitable relief to
prevent or curtail any breach of this Agreement by the other party; provided,
however, that no specification in this Agreement of a specific legal or
equitable remedy will be construed as a waiver or prohibition against the
pursuing of other legal or equitable remedies in the event of such a breach.
Each party agrees that the existence of any claim, demand, or cause of action of
it against the other party, whether predicated upon this Agreement, or
otherwise, will not constitute a defense to the enforcement by the other party,
or its successors or assigns, of the covenants contained in this Agreement.

 

 
15.8
Severability. In the event that any of the provisions or a portion of any
provision of this Agreement is held to be invalid, illegal, or unenforceable by
a court of competent jurisdiction or a governmental authority, such provision or
portion of provision will be construed and enforced as if it had been narrowly
drawn so as not to be invalid, illegal, or unenforceable, and the validity,
legality, and enforceability of the enforceable portion of any such provision
and the remaining provisions will not be adversely affected thereby.

 

 
15.9
Relationship of the Parties. The parties hereto are acting and performing as
independent contractors, and nothing in this Agreement creates the relationship
of partnership, joint venture, sales agency, or principal and agent. Neither
party is the agent of the other, and neither party may hold itself out as such
to any other party. All financial obligations associated with each party's
business will be the sole responsibility of such party.

 

 
15.10
Counterparts. This Agreement will become binding when any one or more
counterparts hereof, individually or taken together, will bear the signatures of
each of the parties hereto. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original as against the party
whose signature appears thereon, but all of which taken together will constitute
but one and the same instrument.

 
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15.11
Force Majeure. Neither party will be liable to the other party for any failure
to perform as required by this Agreement if the failure to perform is due to
circumstances reasonably beyond such party's control including acts of God,
civil disorders or commotions, acts of aggression, fire, explosions, floods,
drought, war, sabotage, embargo, utility failures, material shortages, a
national health emergency, or appropriations of property. A party whose
performance is affected by a force majeure event will take prompt action using
its reasonable best efforts to remedy the effects of the force majeure event.
If, as a result of a force majeure event, a party is unable to fully perform its
obligations hereunder for any consecutive period of one hundred eighty (180)
days, the other party will have the right to terminate this Agreement, upon
providing written notice to the nonperforming party, such termination to be
effective thirty (30) days from the date of such notice.

 

 
15.12
Interpretation. The parties hereto acknowledge and agree that: (a) each party
and its representatives have reviewed and negotiated the terms and provisions of
this Agreement and have contributed to its revision; and (b) the terms and
provisions of this Agreement will be construed fairly as to each party hereto
and not in favor of or against either party regardless of which party was
generally responsible for the preparation or drafting of this Agreement.

 

 
15.13
Certain Expenses and Commissions. Except as otherwise expressly set forth in
this Agreement or the other Collaboration Documents, the parties hereto will
each pay all their costs and expenses, including legal and accounting fees,
incurred in connection with the preparation, negotiation, execution, and
delivery of the Collaboration Documents and will indemnify and hold the other
harmless from and against any and all other claims or liabilities for such costs
and expenses incurred by reason of any action taken by any such party.

 

 
15.14
Further Assurances. Each of Inyx and King agrees to duly execute and deliver, or
cause to be duly executed and delivered, such further instruments and do and
cause to be done such further acts and things, including the filing of such
additional assignments, agreements, documents, and instruments, that may be
necessary or as the other party hereto may at any time and from time to time
reasonably request in connection with the Collaboration Documents or to carry
out more effectively the provisions and purposes of, or to better assure and
confirm unto such other party its rights and remedies under, the Collaboration
Documents.

 

 
15.15
Conflict. In the event of a conflict between the terms, conditions, and
provisions of this Agreement and any other Collaboration Document, the terms,
conditions, and provisions of this Agreement shall govern.

 

 
15.16
Third Party Beneficiaries. This Agreement is not intended to confer upon any
non-party rights or remedies hereunder, except as may be received or created as
part of a valid assignment.

 
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15.17
Use of Party's Name. Except as expressly provided or contemplated hereunder and
except as otherwise required by applicable law, no right is granted pursuant to
this Agreement to either party to use in any manner the trademarks or name of
the other party, or any other trade name, service mark, or trademark owned by or
licensed to the other party in connection with the performance of the Agreement.
Notwithstanding the above, either party will be permitted to use the other
party's name and marks, as may be required under applicable law, in connection
with securities or other public filings.

 
IN WITNESS WHEREOF, the parties have duly executed this Collaboration Agreement
as of the first date written above.
 

        KING PHARMACEUTICALS, INC.  
   
   
    By:   /s/ Brian Markison  

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Brian Markison   President and CEO

 

        INYX, INC.  
   
   
    By:   /s/ Jack Kachkar  

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Jack Kachkar   Chairman and CEO

 
 

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EXHIBIT A
 
TECHNOLOGY TRANSFER AGREEMENT
 

CONFIDENTIAL TREATMENT

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EXHIBIT B
 
MANUFACTURING AND SUPPLY AGREEMENT
 

CONFIDENTIAL TREATMENT

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EXHIBIT C
 
MARKETING AND PROMOTION AGREEMENT
 

CONFIDENTIAL TREATMENT

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EXHIBIT D
 
DEVELOPMENT AGREEMENT
 

CONFIDENTIAL TREATMENT

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EXHIBIT E
 
QUALITY AGREEMENT
 

CONFIDENTIAL TREATMENT

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