exv10w15w1






EXHIBIT 10.15.1




     XXXXX INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED.
ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.



AMENDMENT NO. 3

TO

LICENSING, CONTRACT MANUFACTURING AND SUPPLY AGREEMENT

BETWEEN

SCHERING CORPORATION

AND

IMPAX LABORATORIES, INC.




     This Amendment No. 3, effective as of the last date of signature appearing below (the
“Effective Date”), is entered into by and between Schering Corporation, (hereafter called
“Schering”), and Impax Laboratories, Inc., (hereafter called “Impax”).



Purpose




     WHEREAS Schering and Impax are the parties to the Licensing, Contract Manufacturing and Supply
Agreement with an effective date of June 18, 2002 as subsequently amended by Amendment No. 1 dated
November 22, 2002, and Amendment No. 2 dated December 4, 2002 (the “License Agreement”); and



     WHEREAS Schering and Impax desire, in accordance with Section 16.7 of the License Agreement to
amend certain aspects and provisions of the License Agreement related to the Pricing and Supply of
the Product, the License granted by Impax to Schering and the responsibility for reporting Adverse
Event information as set forth below;



     NOW THEREFORE, in consideration of the foregoing premises and the mutual covenants contained
herein and intending to be legally bound hereby, the parties hereby agree as follows:



     1. Unless otherwise expressly defined herein, all capitalized terms used herein have the
meaning as defined in the License Agreement.



     2. Section 1.17 is amended to read in its entirety as follows:




     The term “Initial Term” shall mean the period of time beginning on the Effective Date
of the License Agreement and ending February 28, 2008.



     3. Section 1.29 is amended to read in its entirety as follows:



 









 






     The term “Price” shall mean the Price set forth in Section 6.1 hereof.



     4. Section 1.32 is amended to read in its entirety as follows:




     The term “Supply Failure” shall mean Impax’s failure to Manufacture and deliver to
Schering on more than one occasion at least 95% of the amount of Product ordered by Schering
pursuant to the forecasts referred to in Section 3.3, for one calendar month by the delivery
date set forth in Schering’s purchase order.



     5. Section 2.1, License Fee, is amended by adding the following new Sections 2.1(d),
(e) and(f):



     (d) In consideration of the Royalty Amount set forth in Section 2.1(e) below, Impax hereby
grants to Schering, effective upon the earlier of: (a) the delivery by Impax of the XXXXX tablets,
as provided in Section 3.1 (as such amount may be adjusted in accordance with Section 5.4(a)), or
(b) approval by FDA to allow Schering or its designated party to manufacture the Product under
Impax’s ANDA or (c) such other date as otherwise agreed to by the parties, a non-exclusive,
transferable, assignable, irrevocable, non-expiring license under Impax’s ANDA, Know-How, and other
intellectual property as they relate to the Product and the other rights granted to Schering under
the Agreement, including, but not limited to rights to manufacture, market, and distribute the
Product. So long as Impax is supplying the Product to another customer, Impax shall not withdraw
the ANDA, and shall be obligated to, and shall perform at its own expense, all acts necessary to
maintain the ANDA in full force and effect, it being understood that Schering shall continue to
furnish Impax with the information required for those portions of the ANDA specific to Schering.
Within thirty (30) days after written notification from Impax that Impax is no longer required to
maintain the ANDA for its other customer, Schering shall notify Impax if it desires Impax to
continue to maintain the ANDA and Impax shall, until otherwise notified by Schering, perform, at
Schering’s expense, all acts necessary to maintain the ANDA in full force and effect. In such event
and at Schering’s request, the parties shall enter into good faith negotiations regarding the
transfer of the ANDA to Schering, and Schering shall have the right of first refusal in connection
with any transfer or other disposition of the Impax ANDA, other than a transfer or other
disposition to an Affiliate of Impax. In the alternative, Schering may choose to file for its own
ANDA using Impax Know-How, in which case Impax shall be obligated to maintain at Schering’s
expense, the Impax ANDA for the Product until Schering receives FDA approval for Schering’s ANDA.
In any event, the amount, if any, that Impax may charge to Schering for maintaining the Impax ANDA
pursuant to this Section 2.1(d) shall be limited to the reasonable, actual, documented costs
incurred by Impax for maintaining the ANDA. Invoices for any such amount charged to Schering shall
be sent by Impax on an annual basis, and shall be accompanied by a detailed statement itemizing the
costs. Such invoices shall be paid by Schering within 30 days of receipt. Impax shall keep records
sufficient in detail to enable Schering to verify the amounts charged. Schering shall have the
right, at its discretion and expense, to inspect, during ordinary business hours of Impax, records
as may be necessary to verify the amounts charged by Impax pursuant to this Section 2.1(d). Without
limiting the generality of the foregoing, Impax shall, subject to the provisions of Section 7.6, be
responsible for filing any and all ADE (as herein defined) reports.



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     (e) In consideration of the license rights granted pursuant to Section 2.1(d), Schering agrees
to pay Impax a total of $XXXXX per XXXXX tablets of Product produced by Schering and sold by it,
net of any and all returns (the “Royalty Amount”), during the course of the 24 months following the
date of the completion of the Technology Transfer (as hereinafter defined), provided that Impax is
no longer obligated to supply the Product to Schering, or if so obligated, the date on which Impax
has delivered to Schering a total of XXXXX tablets (subject to any adjustment in accordance with
Section 5.4 (a))of the Product and is no longer required to deliver any additional Product to
Schering. Schering shall pay the Royalty Amount to Impax on a quarterly basis within 45 days of the
close of the preceding calendar quarter. Upon payment of this amount and notwithstanding any other
provision in the License Agreement to the contrary, Schering shall not be obligated to make any
further payments for the license rights granted to it by Impax pursuant to Section 2.1(d) herein.



     (f) Payments due under Section 2.1(e) shall be accompanied by a statement detailing the number
of tablets manufactured by Schering and sold by it, net of any and all returns, and the calculation
of the payment owed to Impax. Schering shall keep records in sufficient detail to enable Impax to
verify the calculation of the payment. Impax has the right, at its discretion and expense, but no
more frequently than one (1) time per calendar year, to inspect, during ordinary business hours of
Schering, records as may be necessary to verify Schering’s calculation of any payment due under
Section 2.1(e).



     6. Section 3.1, Supply of Product, is amended to read in its entirety as follows:



     Subject to the terms and conditions of the License Agreement as amended, Impax shall
Manufacture and supply to Schering, and Schering shall purchase from Impax, the Product in
accordance with Impax’s ANDA and in amounts to be determined by Schering in its sole discretion
(but no less than batch size quantities); provided that, and subject to Section 5.4(a), Impax shall
Manufacture and supply to Schering, and Schering shall purchase from Impax, a minimum total of
XXXXX tablets of the Product during the period beginning March 1, 2004 and ending February 28,
2008; provided further, however, that in the event that FDA or any other Regulatory Authority shall
take any action, the effect of which is to prevent or prohibit Schering from marketing and
distributing the Product, Schering shall be relieved of its obligation to purchase any minimum
quantity of the Product.



     During calendar year 2004, Impax agrees to manufacture and deliver to Schering XXXXX tablets
of the Product per calendar month for each of the calendar months of March, April, May, June, July
and August; provided, however, that Impax may deliver the XXXXX tablets due for the month of April,
2004 to Schering by May 10, 2004. Impax shall thereafter be obligated to produce up to XXXXX
tablets of the Product for any remaining calendar year of the Initial Term. Impax shall deliver
Schering’s requirements of the Product as per Schering’s delivery dates on Schering’s Purchase
Orders. Impax represents and warrants that it has and will maintain the capacity to Manufacture up
to XXXXX tablets per month for the duration of the Initial Term, and further represents and
warrants that it will Manufacture and deliver to Schering at least XXXXX tablets in any given
month, subject to receipt of forecasts and purchase orders in accordance with Sections 3.3 and 3.4
of the Agreement. Notwithstanding the foregoing, Impax will use its Commercially Reasonable
efforts, during the Initial Term, to supply Schering with more than XXXXX tablets, up to XXXXX
tablets, in any given calendar month, subject to



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receipt of forecasts and purchase orders. Nothing herein shall be construed as restricting or
limiting Schering’s right to manufacture the Product at Schering’s or its Affiliate’s facilities
for use and/or sale.



     7. Section 3.7, Alternative Supply, is amended to read in its entirety as follow:



     Impax agrees to fully cooperate with Schering, at Schering’s request and expense, to establish
a back-up facility for the manufacture of the Product at one of Schering’s, its Affiliate’s or
Third Party’s manufacturing sites. Upon such request, Impax shall promptly initiate a complete
technology transfer of the manufacturing process, procedures and standards used by Impax to
Manufacture the Product (the “Technology Transfer”), so as to enable the back-up facility to
manufacture the Product in accordance with the applicable Health Registrations for the Product.
Impax and Schering shall use diligent efforts to ensure that the Technology Transfer is completed
as soon as reasonably practicable.



     8. Section 7.2, Cost Reductions, is hereby deleted in its entirety.



     9. Section 5.4(a), Delay and Failure to Supply, is amended to read in its entirety as
follows:



     (a) In the event that Impax shall have reason to believe that it will be unable to supply
Schering in a timely manner with the full quantity of the Product forecasted to be ordered or
actually ordered by Schering, Impax shall promptly (and in any event within five (5) business days)
notify Schering thereof. If Impax shall so notify Schering, or if Impax shall fail to provide
Schering with adequate assurances of timely performance upon Schering’s request therefore
(regardless of whether past performance has complied herewith or not), Schering and Impax shall
promptly meet to discuss how to thereafter supply the Product in a timely manner.


If at any time Schering determines in its reasonable judgment that there will be a Supply Failure,
or that there is a Supply Failure, then Schering or an Affiliate of Schering may (but shall not be
obligated to) Manufacture such quantity of the Product or its equivalent that Impax is unable to
produce or has failed to deliver or, Schering or its Affiliate may enter into a Supply Agreement
with a Third Party to manufacture such quantity of the Product or its equivalent that Impax is
unable to produce and deliver (taking into account minimum batch sizes and pricing efficiencies of
such supplier), upon such terms and conditions as Schering shall determine in its sole discretion.
If the Cure Price for the Supply Failure is in excess of the Price, Schering shall invoice Impax
for an amount equal to the excess of the Cure Price over the Price and provide reasonable
documentation evidencing the Cure Price to Impax with such invoice. Impax shall pay such invoice
within 30 days and such payment obligation shall constitute Impax’s sole and exclusive liability
for claims under this Section 5.4(a) where Schering elects to either Manufacture the Product itself
or enter into an agreement with a Third Party to do so.



Notwithstanding the foregoing, with regard to any supply agreement or the Manufacture of the
Product by Schering or an Affiliate of Schering, Impax shall pay the Cure Price in excess of the
Price for the longer of three (3) months from the date of a Supply Failure or the date that Impax
advises Schering that it is able to resume deliveries of the Product in the amounts referred to in
Section 3.1.




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In the event a Supply Failure occurs in any given month (“Short Month”), and Schering elects not to
Manufacture the Product or to enter into an agreement with a Third Party to do so, then



(i) In addition to delivering the full quantity of Schering’s order for the immediately following
month, Impax shall also deliver to Schering the amount of any shortage from the Short Month (“Cure
Amount”) in the immediately following calendar month (“Cure Month”), unless otherwise directed by
Schering. Subject to subparagraph (ii) below, pricing for all Product delivered during any Short
Month and any Cure Month shall be $XXXXX per XXXXX tablets of the Product.



(ii) Should Impax fail to deliver any given full Cure Amount, then pricing shall be at the price of
$ XXXXX per XXXXX tablets (the “Amended Cure Price”), which Amended Cure Price shall remain in
effect for a minimum of the next three months (the “Minimum Cure Period”) and in any event, until
the full Cure Amount(s) and all amounts required pursuant to Schering’s regular orders have been
delivered. Upon delivery of all Schering’s requirements pursuant to its regular orders and the full
Cure Amount(s), or the expiration of the Minimum Cure Period, whichever is later, the price to be
paid by Schering for Product ordered and delivered thereafter shall revert back to $ XXXXX per
XXXXX tablets.



(iii) In addition to, and notwithstanding the foregoing cure obligations of Impax, Schering shall
be relieved from the minimum purchase obligation established pursuant to the Amended Section 3.1
set forth above. Subject to the provisions of Section 3.1, Impax shall nevertheless be required for
the remainder of the Initial Term to Manufacture and supply to Schering, and Schering shall
purchase from Impax, the Product, in amounts to be determined by Schering in its sole discretion
(but no less than current batch size quantities), at the price set forth in subparagraph
5.4(a)(ii), above, as applicable.




     10. Section 6.1, Price, is hereby amended to read in its entirety as follows:



     Beginning March 1, 2004, and subject to Section 5.4(a), the Price to be paid by Schering to
Impax for the Product during the Initial Term shall be $ XXXXX per XXXXX tablets, and shall be made
in United States dollars within 30 days from date of receipt of invoice therefore for Product
received by Schering. After February 28, 2008, the Price to be paid by Schering to Impax for the
Product may be increased for any increase in the United States Consumer Price Index for material,
labor and overhead costs during the immediate preceding year, but in no event shall such cost
increase be more than a total of three percent (3%) for such year over the Price at the end of the
immediate preceding year.



     11. Section 7.6 of the Agreement, Adverse Events, is hereby amended to read in its
entirety as follows:



     Commencing no later than February 1, 2005, Impax shall be responsible for, and shall bear the
expense of collecting and reporting to FDA in accordance with the applicable laws and regulations,
all Adverse Drug Experiences (ADEs) regarding the Product; until such date, Impax shall only be
responsible for reporting to FDA all ADEs. In the event Schering shall receive an ADE for the
Product, Schering shall notify Impax within five (5) business days if the ADE is



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serious or unexpected, and on a quarterly basis with respect to any non-serious or expected
ADEs.



     12. Section 8.4, Retention of Samples, is hereby amended by adding the following Section
8.4(a):



     Until such time as Schering or its designated party receives approval by FDA to manufacture
the Product under Impax’s ANDA, Impax shall be responsible for, and shall bear the expense of,
conducting all ongoing stability requirements in accordance with applicable laws and regulations
and all applicable Schering requirements for all presentations of the Product marketed by Schering.
Notwithstanding the foregoing, Impax shall only be required to bear the expense of the conduct of
on-going stability testing for the initial three (3) batches of Product heretofore manufactured for
Schering and for one (1) batch of Product manufactured during each year of the Initial Term. If
Schering shall require the conduct of additional stability testing, Schering shall pay to Impax the
sum of $ XXXXX for each batch tested.



     13. All other terms and conditions of the License Agreement are hereby confirmed and shall
remain in full force and effect. In the event of any conflict with the provisions of this Amendment
No. 3 and any of the provisions of the License Agreement, the provision of this Amendment No. 3
shall control.



	 	 	 	 	 	 	 	 	 
	SCHERING CORPORATION	 	 	 	IMPAX LABORATORIES, INC.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Jerry Martino
	 	 	 	By:
	 	/s/ David S. Doll
	 

	 	 
	 	 	 	 	 	 
	 

	 	Jerry Martino
	 	 	 	 	 	David S. Doll
	 

	 	Vice President
	 	 	 	 	 	Sr. Vice President
	 

	 	 	 	 	 	 	 	Sales and Marketing
	 
	 	 	 	 	 	 	 	 
	Date:

	 	7/19/04
	 	 	 	Date:
	 	7/23/04







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