Document:

exv10w21

EXHIBIT 10.21

     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.

COPROMOTION AGREEMENT

By and between

IMPAX LABORATORIES, INC.

and

WYETH

acting through its

WYETH PHARMACEUTICALS DIVISION

July 16, 2008

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	1. DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	2. APPOINTMENT AND OBLIGATIONS
	 	 	11	 
	2.1. Appointment
	 	 	11	 
	2.2. Adjustment to Initiation Date
	 	 	11	 
	2.3. Wyeth’s Option to Designate Substitute Products
	 	 	11	 
	2.4. Permitted Subcontractors
	 	 	13	 
	2.5. Undertaking not to Compete
	 	 	13	 
	2.6. Obligations of Impax
	 	 	14	 
	2.7. Obligations of Wyeth
	 	 	22	 
	2.8. Coordination Meetings
	 	 	24	 
	2.9. Ownership of Product
	 	 	25	 
	2.10. No Distribution
	 	 	27	 
	 
	 	 	 	 
	3. PAYMENTS
	 	 	27	 
	3.1. Detail Fee
	 	 	27	 
	3.2. Adjustments to Detail Price
	 	 	27	 
	3.3. No Payment for Extra Details
	 	 	28	 
	3.4. Incentive Fee
	 	 	28	 
	3.5. Taxes and Withholding
	 	 	28	 
	3.6. Currency
	 	 	28	 
	 
	 	 	 	 
	4. RECORD KEEPING; REPORTING AND AUDITS
	 	 	28	 
	4.1. Impax Records and Audits
	 	 	28	 
	4.2. Impax Reports
	 	 	29	 
	4.3. Market Research
	 	 	30	 
	4.4. Wyeth Records and Audits
	 	 	30	 
	 
	 	 	 	 
	5. RELATIONSHIP AND PUBLICITY
	 	 	31	 
	5.1. Relationship of Parties
	 	 	31	 
	5.2. Public Announcements
	 	 	31	 
	 
	 	 	 	 
	6. REGULATORY COMPLIANCE
	 	 	31	 
	6.1. Marketing Authorization
	 	 	31	 
	6.2. Recalls
	 	 	31	 
	6.3. Returns
	 	 	31	 
	6.4. Adverse Drug Experiences
	 	 	31	 
	6.5. Product Complaints
	 	 	33	 
	6.6. Product Inquiries
	 	 	34	 
	6.7. Communications with FDA
	 	 	35	 
	6.8. Additional Responsibilities of the Parties
	 	 	35	 

 

 

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	7. REPRESENTATIONS, WARRANTIES AND COVENANTS
	 	 	35	 
	7.1. Mutual Representations and Warranties
	 	 	35	 
	7.2. Impax Representations and Warranties
	 	 	36	 
	7.3. Wyeth Representations and Warranties
	 	 	36	 
	7.4. Wyeth Covenants
	 	 	37	 
	7.5. Other Opportunities
	 	 	37	 
	 
	 	 	 	 
	8. INDEMNIFICATION AND INSURANCE
	 	 	37	 
	8.1. Indemnification by Impax
	 	 	37	 
	8.2. Indemnification by Wyeth
	 	 	38	 
	8.3. Defense of Actions; Settlements
	 	 	38	 
	8.4. Limitation of Liability
	 	 	38	 
	8.5. Insurance Requirements
	 	 	39	 
	 
	 	 	 	 
	9. TERM AND TERMINATION
	 	 	39	 
	9.1. Term
	 	 	39	 
	9.2. Termination for Cause
	 	 	39	 
	9.3. Termination by Wyeth
	 	 	39	 
	9.4. Termination without Cause by Impax
	 	 	39	 
	9.5. Effect of Termination
	 	 	39	 
	9.6. Survival of Certain Provisions
	 	 	40	 
	 
	 	 	 	 
	10. SAMPLES
	 	 	40	 
	10.1. Provision of Samples
	 	 	40	 
	10.2. Shipping and Distribution of Samples
	 	 	40	 
	10.3. Compliance with PDMA
	 	 	41	 
	10.4. Sample Carry Program
	 	 	42	 
	10.5. Sampling Activity System Audit
	 	 	44	 
	10.6. Investigation, Corrective & Preventative Actions
	 	 	44	 
	10.7. Monitoring & Auditing Programs
	 	 	44	 
	10.8. Responsibility for Compliance
	 	 	45	 
	10.9. In-Transit Losses
	 	 	45	 
	10.10. Improper Handling
	 	 	45	 
	10.11. Indemnity for Failure to Comply
	 	 	45	 
	10.12. Additional Requirements
	 	 	45	 
	 
	 	 	 	 
	11. CONFIDENTIALITY
	 	 	46	 
	11.1. Nondisclosure and Nonuse Obligations
	 	 	46	 
	11.2. Permitted Disclosures
	 	 	46	 
	11.3. Return of Confidential Information
	 	 	47	 
	11.4. Disclosure of Agreement
	 	 	47	 
	11.5. Equitable Relief
	 	 	47	 
	 
	 	 	 	 
	12. MISCELLANEOUS
	 	 	48	 
	12.1. Force Majeure
	 	 	48	 
	12.2. Severability
	 	 	48	 
	12.3. Assignability
	 	 	48	 

ii

 

	 	 	 	 	 
	 	 	Page	 
	 	 	 	 	 
	12.4. Notices
	 	 	49	 
	12.5. Governing Law; Jurisdiction
	 	 	49	 
	12.6. Dispute Resolution
	 	 	49	 
	12.7. No Waiver
	 	 	49	 
	12.8. Headings; Defined Terms
	 	 	50	 
	12.9. Counterparts
	 	 	50	 
	12.10. Entire Agreement; Amendments
	 	 	50	 
	12.11. Further Actions
	 	 	50	 

iii

 

SCHEDULES

	 	 	 	 	 
	Schedule 1.79

	 	—
	 	Sample Receipt Forms
	 
	 	 	 	 
	Schedule 1.94

	 	—
	 	Wyeth Sales Training Program for the Initial Product
Exhibit A to Schedule 1.94
	 
	 	 	 	 
	Schedule 3.4

	 	—
	 	Sample Calculation of Incentive Fee
	 
	 	 	 	 
	Schedule 7.3

	 	—
	 	Initial Product Patents
	 
	 	 	 	 
	Schedule 6.4.6

	 	—
	 	Wyeth Form 1747(b)
	 
	 	 	 	 
	Schedule 6.6

	 	—
	 	Wyeth Form 8202

iv

 

COPROMOTION AGREEMENT

     This Copromotion Agreement (the “Agreement”) is made and entered into as of July 16, 2008 (the
“Effective Date”), by and between Wyeth, acting through its Wyeth Pharmaceuticals Division, having
a place of business at 500 Arcola Road, Collegeville, Pennsylvania 19426 (“Wyeth”) and Impax
Laboratories, Inc., having a place of business at 30831 Huntwood Avenue, Hayward, California 94544
(“Impax”). Wyeth and Impax may each be referred to herein individually as a “Party” and
collectively as the “Parties.”

     WHEREAS, Wyeth owns and/or controls marketing and proprietary rights to the Product (as
defined below); and

     WHEREAS, Impax has a sales and marketing organization that promotes certain pharmaceutical
products to physicians and other health care professionals;

     WHEREAS, the Parties desire that Impax participate in detailing the Product to Neurologists
(as defined below) in the United States;

     WHEREAS, the Parties have agreed to amicably settle patent litigation currently ongoing
between them, and on June 9, 2008, Wyeth and Impax entered into a Settlement and Release Agreement
(the “Settlement Agreement”) in connection therewith; and

     WHEREAS, the Settlement Agreement requires the Parties, upon the Settlement Date (as such term
is defined in the Settlement Agreement), to enter into this Agreement and a License Agreement (the
“License Agreement”) for the grant by Wyeth to Impax of a non-exclusive license under the Licensed
Patents (as such term is defined in the License Agreement) under which Impax would be permitted to
make, have made, use, sell, offer for sale, import, market, promote and/or distribute the 37.5 mg,
75 mg and 150 mg dosage strength extended release venlafaxine hydrochloride capsules that are the
subject of ANDA 78-057 filed by Impax on or about December 15, 2005 with the FDA for the treatment
of
XXXXX,
subject to the terms and
conditions of the License Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties
hereto agree as follows:

	1.	 	DEFINITIONS.
	 
	 	 	The following capitalized terms shall have the following meanings for all purposes of this
Agreement:

	 	1.1.	 	“Affiliate” of any Party shall mean any Person, directly or indirectly
controlling, controlled by, or under common control with such Party. For purposes of
this Section 1.1, “control” shall mean (a) in the case of corporate entities, direct or
indirect ownership of more than fifty percent (50%) of the stock or shares having the
right to vote for the election of directors and (b) in the case of non-corporate
entities, direct or indirect ownership of at least fifty percent (50%) of the equity

 

 

	 	 	 	interest with the power to direct the management and policies of such non-corporate
entity, provided, however, for purposes of this Agreement, the term “Affiliate”
shall 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.
	 
	 	1.2.	 	“Agency” shall mean any applicable supra-national, federal, national, regional,
state or local regulatory agencies, departments, bureaus, commissions, councils or
other government entities regulating or otherwise exercising authority with respect to
the Marketing, sale, distribution or Promotion of the Product.
	 

	 	1.3.	 	XXXXX.

	 

	 	1.4.	 	XXXXX.

	 
	 	1.5.	 	“Applicable Laws” shall mean (a) the American Medical Association Guidelines on
Gifts to Physicians from Industry, (b) the PhRMA Code on Interactions with Healthcare
Professionals, (c) the FD&C Act and all other federal, state and local laws, and (d)
the rules, regulations, guidance, guidelines and requirements of all Agencies in effect
from time to time applicable to the manufacture, marketing, advertising, promotion,
distribution and sale of the Product, in each case as applicable to a Party’s
obligations hereunder.
	 

	 	1.6.	 	XXXXX.

	 

	 	1.7.	 	XXXXX.

	 
	 	1.8.	 	“Breach” shall have the meaning set forth in Section 9.2.
	 
	 	1.9.	 	“Breaching Party” shall have the meaning set forth in Section 9.2.

2

 

	 	1.10.	 	“Business Day” shall mean any day other than (a) a day which is a Saturday or
a Sunday or (b) a day on which banks in New York City, New York are authorized or
obligated by law or executive order to not open or remain closed.
	 
	 	1.11.	 	“Calendar Quarter” shall mean the respective periods of three (3) consecutive
calendar months ending on March 31, June 30, September 30, or December 31, for so long
as this Agreement is in effect.
	 
	 	1.12.	 	“Claims” shall have the meaning set forth in Section 8.1.
	 
	 	1.13.	 	“Commercially Reasonable Efforts” shall mean commercially reasonable efforts
and resources.
	 
	 	1.14.	 	“Competing Product” shall mean any product that is labeled to treat one or
more indications, illnesses or conditions that the then-current Product is also labeled
to treat.
	 
	 	1.15.	 	“Confidential Information” shall mean any proprietary technical, business and
Marketing information of the other Party (including, without limitation, all sales and
Marketing plans) disclosed by one Party to the other under this Agreement after the
Effective Date, and whether or not such information is identified as confidential at
the time of disclosure. This Agreement (including the existence and terms and
conditions thereof) shall be considered Confidential Information of each Party.
	 
	 	1.16.	 	“Contract Year” shall mean any of Contract Year 1, Contract Year 2 or Contract
Year 3.
	 
	 	1.17.	 	“Contract Year 1” shall mean the period beginning on the Initiation Date and
ending on the day prior to the first anniversary of the Initiation Date.
	 
	 	1.18.	 	“Contract Year 2” shall mean the period beginning on the first day following
Contract Year 1 and ending on the day prior to the second anniversary of the Initiation
Date.
	 
	 	1.19.	 	“Contract Year 3” shall mean the period beginning on the first day following
Contract Year 2 and ending on the day prior to the third anniversary of the Initiation
Date.
	 
	 	1.20.	 	“CPI” shall mean the Consumer Price Index for All Urban Consumers (CPI-U):
U.S. City Average, published by the U.S. Department of Labor.
	 
	 	1.21.	 	“Cumulative Detail Maximum” shall have the meaning set forth m Section
2.6.12(a).
	 

	 	1.22.	 	“Cumulative Details” shall mean, with respect to a given period of time
period, the XXXXX actually performed during such
period.

3

 

	 	1.23.	 	“Detail” shall mean a face-to-face meeting, in an individual or group practice
setting, between a Neurologist and one or more Impax PSRs during which a complete
Product presentation that is consistent with Wyeth’s marketing and promotional
strategies as communicated to Impax, is communicated to such Neurologist, and which
meeting may also involve Sampling. When used as a verb, “Detail” shall mean to engage
in a Detail. A complete Product presentation made to more than one neurologist shall
constitute a separate Detail for each participating Neurologist (e.g., a complete
presentation made to three Neurologists simultaneously shall constitute three Details.)
	 
	 	1.24.	 	“Detailed Product” shall mean the Product and all prior products designated by
Wyeth as the Product pursuant to this Agreement, including, without limitation, the
Initial Product.
	 
	 	1.25.	 	“Disclosing Party” shall mean the Party who is disclosing its Confidential
Information to the Receiving Party.
	 
	 	1.26.	 	“Early Initiation Notice” shall have the meaning set forth in Section 2.2.
	 
	 	1.27.	 	“Extra Detail” shall have the meaning set forth in Section 2.6.12(b).
	 
	 	1.28.	 	“FDA” shall mean the United States Food and Drug Administration, or any
successor entity thereto.
	 
	 	1.29.	 	“FD&C Act” shall mean the United States Federal Food, Drug, and Cosmetic Act,
as amended, and the rules and regulations promulgated thereunder.
	 

	 	1.30.	 	“Impax Baseline PSR Cost” shall mean the Impax PSR Cost for the
XXXXX
 the Initiation Date.

	 

	 	1.31.	 	“Impax Cost Adjustment” shall mean, with respect to any Contract Year,
XXXXX.

	 

	 	1.32.	 	“Impax Cost Increase” shall mean, with respect to any Contract Year,
XXXXX.

	 
	 	1.33.	 	“Impax Director of Sales” shall mean Impax’s Vice President of Sales and
Marketing, or a position of similar seniority occupied by a full-time employee of
Impax, which position has primary oversight responsibility for the implementation of
Impax’s obligations under this Agreement, for leading and supervising the Impax Sales
Management Team and, in conjunction with the Impax Sales Management Team, for leading
and supervising the Impax PSRs.

4

 

	 	1.34.	 	“Impax Personnel” shall mean the Impax PSRs, the Impax Sales Management Team
and any other employee, representative or agent of Impax or any Permitted Subcontractor
that is involved in performing Impax’s obligations under this Agreement.
	 
	 	1.35.	 	“Impax PSR” shall mean a professional sales representative who is an employee
of either (a) Impax or (b) a Permitted Subcontractor (in accordance with Section 2.4
below), which professional sales representative is responsible for Detailing the
Product to Neurologists in accordance with this Agreement.
	 

	 	1.36.	 	“Impax PSR Cost” shall mean, with respect to any Contract Year, for the Impax
Baseline Cost, with respect to the twelve (12) month period ending on the Initiation
Date,
XXXXX.
 In the event that, during any Contract Year, Impax provides Impax
PSRs who are employees of Impax rather than employees of a Permitted Subcontractor, the
Parties shall agree in good faith on a method for
XXXXX.

	 
	 	1.37.	 	“Impax Regional Manager” shall mean a full time employee of Impax who is
responsible for supervising Impax PSRs in a specified collection of sales territories.
	 
	 	1.38.	 	“Impax Sales Force” shall mean the Impax PSRs and the Impax Sales Management
Team.
	 
	 	1.39.	 	“Impax Sales Management Team” shall mean (a) the Impax Regional Managers; (b)
Impax’s Director of Sales Operations or equivalent thereof; and (c) the Impax Director
of Sales.
	 

	 	1.40.	 	“Impax Supervisory Costs” shall mean, with respect to any Contract Year, that
portion of XXXXX, determined in accordance with GAAP on a consistent basis.

	 
	 	1.41.	 	“IMS” shall mean IMS Health Incorporated.
	 
	 	1.42.	 	“Incentive Fee” shall have the meaning set forth in Section 3.4.

5

 

	                                                       
	 	1.43.	 	“XXXXX” shall mean, with respect to any
Product and any Contract Year, the XXXXX.

	                                                        
	 

	 	1.44.	 	“XXXXX” shall mean, XXXXX:

	 	(a)	 	XXXXX, and
	 
	 	(b)	 	XXXXX.

	 	 	 	In the case of any Product that is Detailed under this Agreement for only a portion
of a Contract Year (a “Partial Contract Year”), XXXXX shall be
determined by reference to such Partial Contract Year by determining the following
on the basis of such Partial Contract Year rather than the full Contract Year: XXXXX.

	 
	 	1.45.	 	“Indemnified Party” shall have the meaning set forth in Section 8.3.
	 
	 	1.46.	 	“Indemnifying Party” shall have the meaning set forth in Section 8.3.
	 

	 	1.47.	 	“Initial Product” shall mean XXXXX  under the brand
name XXXXX in the Territory.

	 
	 	1.48.	 	“Initial Training” shall have the meaning set forth in Section 2.6.8(a).
	 

	 	1.49.	 	“Initiation Date” shall mean XXXXX, or such earlier date as may be
established pursuant to Section 2.2.

	 
	 	1.50.	 	“Market” shall mean, when used as a verb, to market, sell, distribute,
Promote, or advertise a product.
	 

	 	1.51.	 	“XXXXX” shall mean, with respect to any Product and any period, the
XXXXX for the Product in the Territory during such period
XXXXX
 in the Territory during such period, XXXXX
 for the Initial Product shall be the XXXXX.

	 
	 	1.52.	 	“Minimum Detail Requirement” shall have the meaning set forth in Section
2.6.12(a).
	 
	 	1.53.	 	“Monthly Detail Report” shall mean, collectively, the raw data, written report
and other information that Impax is required to deliver to Wyeth on a monthly basis
pursuant to Section 4.2.

6

 

	 	1.54.	 	“XXXXX” shall mean the
XXXXX.

	 
	 	1.55.	 	“Neurologist” shall mean a medical doctor who is (a) licensed to practice
medicine in the Territory, (b) certified in the practice of neurology by the American
Board of Psychiatry and Neurology and (c) identified as a neurologist or as practicing
any subspecialty of neurology, other than pediatric neurology or any pediatric
subspecialty, based on the American Medical Association specialty code contained within
the monthly prescriber log delivered by IMS (or such other Third Party vendor as Wyeth
may utilize). “Neurologist” shall also include any nurse practitioner or physician’s
assistant having prescribing authority and acting under the supervision of a
Neurologist, provided, however, that for the purpose of determining the number of
Details, (i) any nurse practitioner or physician’s assistant together with his or her
supervising Neurologist shall be treated as a single Neurologist and (ii) any nurse
practitioner or physician’s assistant shall be treated as being under the supervision
of only one Neurologist.
	 
	 	1.56.	 	“New Hire Training” shall have the meaning set forth in Section 2.6.8(b).
	 
	 	1.57.	 	“Non-Breaching Party” shall have the meaning set forth in Section 9.2.
	 

	 	1.58.	 	“XXXXX” shall mean a
XXXXX.

	 

	 	1.59.	 	“Permissible Initiation Dates” shall mean each of the following:
XXXXX.

	 
	 	1.60.	 	“Permitted Subcontractor” shall have the meaning set forth in Section 2.4.

7

 

	 	1.61.	 	“Person” shall mean an individual, a corporation, a partnership, an
association, a trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
	 
	 	1.62.	 	“Prescribing Information” shall mean the prescribing information published by
Wyeth in connection with the Marketing of the Product.
	 

	 	1.63.	 	“Primary Detail” shall mean a Detail in which Product information is
communicated by an Impax PSR to a XXXXX, in
each case subject to the provisions of Section 2.6.12(b), with the specified content as
defined from time to time by Wyeth within its reasonably exercised discretion, where
(a) such information is the first such product information communicated by such Impax
PSR, (b) the predominant portion of time and emphasis during such communication is
focused on the Product and (c) such Detail involves the communication of information
with respect to no more than three (3) products.

	 
	 	1.64.	 	“Primary Detail Price” shall have the meaning set forth in Section 3.1.
	 
	 	1.65.	 	“Product” shall mean the Initial Product or such other product as Wyeth may
designate from time to time pursuant to Section 2.3 to have Detailed by Impax for Wyeth
under this Agreement.
	 
	 	1.66.	 	“Product Substitution Notice” shall have the meaning set forth in Section
2.3.1.
	 
	 	1.67.	 	“Promotion” shall mean those activities, including, without limitation,
detailing and distributing samples of a product, normally undertaken by a
pharmaceutical company’s sales force to implement marketing plans and strategies aimed
at encouraging the appropriate use of a particular prescription pharmaceutical product.
When used as a verb, “Promote” shall mean to engage in such activities.
	 

	 	1.68.	 	“Quarterly Detail Minimum” shall mean XXXXX (XXXXX) Cumulative Details (such
amount to be prorated for any partial period of three consecutive calendar months,
including that portion of such period during which there is a downward adjustment as
provided in this Section 1.68), provided that the Quarterly Detail Minimum shall be
adjusted XXXXX.

	 
	 	1.69.	 	“Quarterly Details” shall mean the number of Cumulative Details performed by
Impax during a given Calendar Quarter.

8

 

	 	1.70.	 	“Quarterly Meeting” shall mean those meetings between Impax and Wyeth as
described in Section 2.8.
	 
	 	1.71.	 	“Receiving Party” shall mean the Party who is receiving Confidential
Information from the Disclosing Party.
	 
	 	1.72.	 	“Refresher Training” shall have the meaning set forth in Section 2.7.6(c).
	 
	 	1.73.	 	“Retired Neurologist” shall mean a Neurologist that is deceased or is no
longer practicing in the Territory.
	 
	 	1.74.	 	“Sales Call” shall mean an interaction between an Impax PSR and a Neurologist
in which the Product is the subject of either a Primary Detail or a Secondary Detail.
	 
	 	1.75.	 	“Sales Call Plan” shall mean the plan established from time to time pursuant
to Section 2.6.11, which sets forth the Detailing reach (i.e., number of Neurologists)
and frequency (i.e., number of Details per Neurologist and the relevant timing of such
Details) objectives for the Impax PSRs.
	 
	 	1.76.	 	“Sample” shall mean a unit of the Product packaged as a sample, as used by
Wyeth, that is not intended to be sold and is intended to promote the sale of the
Product. When used as a verb, “Sample” shall mean to provide Samples to Neurologists.
	 
	 	1.77.	 	“Sample Audit” shall have the meaning set forth in Section 10.5.
	 
	 	1.78.	 	“Sample Carry Program” shall have the meaning set forth in Section 10.4.
	 
	 	1.79.	 	“Sample Receipt Forms” shall mean those multi-part forms, whether paper or
electronic, supplied by Impax or Impax’s Permitted Subcontractor for the purpose of
recording Detail and Sample activity performed by Impax PSRs during Sales Calls. These
forms shall also be used as Sample receipts on which to obtain a Neurologist’s
signature in acknowledgment of receipt of Samples. Each Sample Receipt Form shall
include, at a minimum, the information set forth in Schedule 1.79.
	 

	 	1.80.	 	“Secondary Detail” shall mean a Detail in which information about the Product
is communicated by an Impax PSR to a XXXXX, in
each case subject to the provisions of Section 2.6.12(b), with the specified content as
defined from time to time by Wyeth within its reasonably exercised discretion, where
(a) such information is the second product information communicated by such Impax PSR,
(b) the amount of time and emphasis of such communication is less than that for the
communication of information of the product that is the subject of the primary Detail
during such communication, but is more than that for the communication of information
with respect to any other product that is promoted during such Sales Call and (c) such

9

 

	 	 	 	Detail involves the communication of information with respect to no more than three
(3) products.
	 
	 	1.81.	 	“Secondary Detail Price” shall have the meaning set forth in Section 3.1.
	 
	 	1.82.	 	“Substitution Date” shall have the meaning set forth in Section 2.3.1.
	 

	 	1.83.	 	“XXXXX” shall have the meaning set forth in Section 2.7.3.

	 

	 	1.84.	 	“XXXXX” shall mean, with respect to any Product and
any period, the
XXXXX during such period XXXXX.

	 

	 	1.85.	 	“XXXXX” shall mean the
XXXXX.

	 

	 	1.86.	 	“XXXXX” shall mean the
XXXXX identified by Wyeth from time to time as XXXXX.

	 

	 	1.87.	 	“XXXXX” shall mean any XXXXX other than a
XXXXX.

	 
	 	1.88.	 	“Term” shall have the meaning set forth in Section 9.1.
	 
	 	1.89.	 	“Territory” shall mean the fifty (50) states of the United States and the
District of Columbia.
	 
	 	1.90.	 	“Therapeutic Category” shall mean, with respect to any Product, the
therapeutic category or categories for which IMS reports prescriptions written for such
Product and other products included in the same category or categories.
	 
	 	1.91.	 	“Third Party” shall mean any Person other than Wyeth, Impax or any of their
respective Affiliates.
	 
	 	1.92.	 	“Trademark” shall have the meaning set forth in Section 2.9.2.
	 
	 	1.93.	 	“Wyeth Improvements” shall have the meaning set forth in Section 2.9.6.
	 
	 	1.94.	 	“Wyeth Policy on Sales and Marketing Practices” shall mean Wyeth’s promotion
guidelines for the Product, as the same may be amended from time to time by Wyeth, in
its sole discretion.

10

 

	 	1.95.	 	“Wyeth Sales Training Program” shall mean the sales training program described
in Schedule 1.95.

	2.	 	APPOINTMENT AND OBLIGATIONS

	 	2.1	 	Appointment. Wyeth hereby appoints Impax, on a non-exclusive basis, and Impax
agrees, to Detail the Product in the Territory to Neurologists, as of the Initiation
Date and thereafter during the Term in accordance with the terms and conditions of this
Agreement. Impax, without charge or expense to Wyeth (other than as expressly set
forth in Article 3 of this Agreement), shall provide all facilities, personnel
(including management and sales representatives) and other resources as are reasonably
necessary to successfully perform Impax’s obligations under this Agreement. The
Parties specifically agree that, without Wyeth’s written consent, which Wyeth may
withhold in its sole discretion, Impax shall not intentionally Detail the Product to
any physician other than a Neurologist, sell or distribute the Product, place journal
or other advertisements for the Product, issue press releases regarding the Product,
conduct opinion leader development activity in connection with the Product, establish
or participate in advisory boards concerning the Product, participate in or conduct
peer selling activity concerning the Product, enter into or discuss with customers or
potential customers (including, without limitation, managed care organizations)
contracts for the sale of or discounts or rebates on the sale of the Product, conduct
other general marketing activities with respect to the Product, or initiate, conduct or
participate in any studies for the Product other than Detailing of the Product to the
extent expressly permitted by this Agreement.
	 

	 	2.2	 	Adjustment to Initiation Date. Impax shall begin Detailing the Product in
accordance with this Agreement no later than XXXXX. In the event that Impax
procures the necessary resources and is prepared to begin Detailing the Product prior
to XXXXX, Impax shall promptly notify Wyeth in writing (such notice referred to
herein as the “Early Initiation Notice”). If Wyeth receives the Early Initiation
Notice XXXXX, then the Initiation Date shall
automatically be adjusted to July 1, 2008. If Wyeth receives the Early Initiation
Notice at any other time prior to XXXXX, then the Initiation Date shall
automatically be adjusted XXXXX
 following Wyeth’s receipt of such Early Initiation Notice,
provided that in no event shall the Initiation Date occur after XXXXX.
Notwithstanding any provision of this Section 2.2 to the contrary, in no event shall
Impax permit any member of the Impax Sales Force to begin Detailing the Product before
such individual has successfully completed all training required pursuant to Section
2.6.8.

	 
	 	2.3	 	Wyeth’s Option to Designate Substitute Products.

	 	2.3.1	 	General. During the Term, Wyeth may, from time to time and in
its sole discretion, elect to designate an alternate product as the Product
that is to be Detailed by Impax under this Agreement, provided that (a)

11

 

	                                                       
	 	 	 	any such alternate product must (i) be indicated for the treatment of one
or more neurological conditions or (ii) target one or more illnesses or
conditions commonly treated by Neurologists, and (b) Wyeth may not
designate more than one (1) Product to be Detailed under this Agreement at
any given time during the Term. In the event Wyeth elects to substitute
an alternate product as the Product pursuant to this Section 2.3.1, Wyeth
shall notify Impax in writing of such substitution (each such notice
referred to herein as a “Product Substitution Notice”) no later than sixty
(60) days prior to the date specified in such Product Substitution Notice
as the date that such alternate product is to first be Detailed pursuant
to this Agreement which date shall be the later of the date of resolution
of any dispute under Section 2.3.2 and the date of the completion of
Initial Training for the substituted Product (the “Substitution Date”).
For the avoidance of doubt, Wyeth may elect to substitute an alternate
product as the Product under this Agreement on one or more occasions
during the Term, in its sole discretion provided that, without Impax’s
consent, such substitution shall not occur more than once in any
XXXXX period. Notwithstanding the foregoing limitation, in the event
that a Product undergoes a recall or voluntary withdrawal from the market
due to one or more adverse events, regulatory action, potential or actual
infringement of any patent or other intellectual property right of any
Third Party, or other reasons outside of Wyeth’s control, Wyeth may, and
shall, promptly designate a substitute Product. In such event and subject
to the limitations set forth in Section 2.6.12(a), with respect to the
time period for which Impax is not able to Detail any Product, Wyeth shall
pay to Impax
XXXXX.
	                                                        

	 
	 	2.3.2	 	Designation of Competitive Products. Notwithstanding any
provision of Section 2.3.1 to the contrary, if at the time Wyeth delivers a
Product Substitution Notice (a) Impax owns or otherwise controls a product (i)
that Impax is detailing to Neurologists or Promoting, selling or marketing;
(ii) for which Impax or any of its Affiliates has filed or, during the Term,
expects to file, an accepted marketing approval application with the FDA; and
which Impax reasonably expects to detail, Promote, sell or market during the
Term or (b) Impax has previously entered into an agreement with a Third Party
that obligates Impax to detail, Promote, sell or market one or more products on
behalf of such Third Party, and Impax believes that the Product Substitution
Notice can reasonably be expected to conflict with Impax’s activities under
clauses (a) and/or (b), above then Impax shall so notify Wyeth with five (5)
business days of delivery of such Product Substitution Notice. Within thirty
(30) business days after receipt of Impax’s notification, Wyeth will advise
Impax whether it agrees that such a conflict is reasonably likely. If Wyeth
agrees, Wyeth may elect, in its sole discretion, to either (i) designate
another substitute product as the

12

 

	 	 	 	Product pursuant to Section 2.3.1 or (ii) require Impax to continue
detailing the then-current Product. If Wyeth disagrees as to whether a
conflict is reasonably likely, the matter will be referred to the Wyeth
Pharmaceuticals President, U.S., Pharmaceuticals and Women’s Health Care
and the President of Impax Pharmaceuticals for further review, which
review shall be completed within ten (10) Business Days after such
referral. If after such referral, either Party, in its reasonable
judgment, believes a conflict is reasonably likely, Wyeth may elect, in
its sole discretion, to either (i) designate another substitute product as
the Product pursuant to Section 2.3.1 or (ii) require Impax to continue
detailing the then-current Product.
	 
	 	2.3.3	 	Alternate Product Training. Following Wyeth’s delivery of a
Product Substitution Notice, each Party shall use Commercially Reasonable
Efforts to complete their respective Impax PSR training obligations under
Sections 2.6.8 and 2.7.6(a) with respect to the alternate product designated in
such Product Substitution Notice prior to the relevant Substitution Date.
Impax shall ensure that no Impax PSR engages in the Detailing of such alternate
product before such individual has successfully completed all training required
pursuant to Section 2.6.8.

	 	2.4	 	Permitted Subcontractors. Impax may enter into written agreements with one or
more nationally recognized contract sales organizations, whether such organization is a
Third Party or an Affiliate of Impax, having experience in the promotion and detailing
of pharmaceutical products (each a “Permitted Subcontractor”) whereby each such
Permitted Subcontractor provides professional sales representatives to serve as Impax
PSRs for purposes of Detailing the Product hereunder; it being understood and agreed
that XXXXX (“XXXXX”) shall be a Permitted Subcontractor. The identity of any such
Permitted Subcontractor shall be subject to Wyeth’s prior approval, not to be
unreasonably withheld. Impax shall provide Wyeth with a copy of any such written
agreement and all amendments thereto with such Permitted Subcontractor no later than
ten (10) days after execution of such agreement or amendment thereto so that Wyeth can
confirm that such agreement or amendment complies with the terms of this Agreement.
Impax may redact the financial terms of any such agreement to the extent that such
redaction does not relate to any obligation of Impax to Wyeth hereunder. Without
limiting Wyeth’s ability to withhold approval for other valid reason, any such
agreement or any amendment or modification thereto shall provide for such Permitted
Subcontractor to fulfill the obligations imposed under this Agreement on Impax and/or
its Permitted Subcontractors and shall name Wyeth as a Third Party beneficiary with
direct enforcement rights against the Permitted Subcontractor.
	 
	 	2.5	 	Undertaking not to Compete. During the Term, Impax shall not Promote to
physicians, sell or market, and Impax shall cause its Affiliates and each member of the
Impax Sales Force not to Promote to physicians, in the Territory, any Competing
Product, provided, however, that Impax shall not be prohibited under

13

 

	 	 	 	this Section 2.5 from (i) exercising its rights to sell, market and distribute
XXXXX to the extent
permitted under the XXXXX even if a XXXXX would otherwise be
considered to be a Competing Product under this Agreement, provided that any such
XXXXX is not being Promoted by any member of the Impax Sales Force that
is Detailing the Product under this Agreement, or (ii) selling, marketing or
distributing any generic product that is AB rated to another product XXXXX
 that, if sold,
marketed or distributed by Impax, would otherwise be a Competing Product under this
Agreement, provided such generic product is not AB rated to the Product under this
Agreement, in each case provided that any such product is not being Promoted by any
member of the Impax Sales Force that is Detailing the Product under this Agreement.
Any breach of this provision shall constitute a basis for termination by Wyeth
pursuant to Section 9.2.

	 
	 	2.6	 	Obligations of Impax.

	 	2.6.1	 	Impax Sales Force. Impax shall, at its sole expense,
diligently Detail the Product in the Territory in accordance with the terms and
conditions of this Agreement. In connection therewith, Impax shall maintain,
in the Territory, a sales force trained in accordance with this Agreement of
full-time Impax PSRs to Detail the Product using promotional materials supplied
to Impax by Wyeth. Impax shall not permit any Impax PSR to Detail the Product
until such Impax PSR has been trained in accordance with Section 2.6.8 below
and has been certified in accordance with all certification standards
established by Wyeth. All Details provided by Impax PSRs shall be either
Primary Details or Secondary Details, subject to the limitations set forth in
Section 2.6.12. Impax shall supervise the sales force provided by it hereunder
and be responsible for its remuneration and incentives. Impax shall be an
independent contractor hereunder as further described in Section 5.1 and the
Impax PSRs shall remain exclusively under the authority of Impax and/or Impax’s
relevant Permitted Subcontractor.
	 
	 	2.6.2	 	Removal of Impax Personnel. Impax shall promptly remove any
Impax Personnel from having any responsibilities relating to the Detailing of
the Product under this Agreement if required by any Applicable Laws. Further,
Wyeth may request Impax to promptly remove any Impax Personnel from such
responsibilities if any material events relating to the Detail of the Product
have occurred to justify such removal (e.g., failure of such Impax Personnel to
comply, in connection with the performance of such responsibilities, with any
Applicable Laws or the Wyeth Policy on Sales and Marketing Practices). Impax
shall honor any such request to the extent that Impax is permitted to do so
pursuant to applicable laws.

14

 

	 	2.6.3	 	Sales Management. Impax shall be responsible for supervising
the Impax PSRs, whether they are employees of Impax or a Permitted
Subcontractor. In connection therewith, Impax shall provide a sufficient
number of full time Impax employees to serve as Impax Regional Managers, such
that the average ratio of Impax Regional Managers to Impax PSRs shall be no
greater than XXXXX. Impax may, but shall not be obligated to appoint one or
more full time Impax employees to serve as regional directors having the
responsibility for supervising a group of Impax Regional Managers in a
particular geographic region of the Territory. Additionally, Impax shall
designate a full time Impax employee as the Impax Director of Sales who will be
responsible for (i) leading and supervising the Impax Sales Management Team,
(ii) together with the Impax Sales Management Team, leading and supervising the
Impax PSRs, (iii) the implementation of Impax’s responsibilities hereunder and
(iv) serving as Impax’s primary point of contact for communications between
Wyeth and Impax regarding the Detailing of the Product by Impax hereunder.

	 
	 	2.6.4	 	Impax Personnel. Impax Personnel shall, at all times during
the Term, be employees of Impax or a Permitted Subcontractor for which Impax or
such Permitted Subcontractor shall have all responsibilities as an employer,
including hiring, firing, compensation and promotions. Impax Personnel shall
not be, and shall not be considered to be, “employees” or “joint employees” of
Wyeth for any purpose as a result of their activities under this Agreement.
Wyeth shall not be responsible for the control of any members of the Impax
Personnel, Impax and, as applicable, its Permitted Subcontractors, shall be
solely responsible for determining all conditions of employment of all Impax
Personnel. Impax shall and, as applicable, shall cause its Permitted
Subcontractors to, (i) maintain all necessary personnel and payroll records for
all Impax Personnel; (ii) compute wages for all Impax Personnel and withhold
applicable federal, state, and local taxes and Federal FICA payments; (iii)
remit employee withholdings to the proper governmental authorities and make
employer contributions for federal FICA and federal and state unemployment
insurance payments; (iv) pay net wages and fringe benefits, if any, directly to
the Impax Personnel; and (v) provide for liability and Workers’ Compensation
insurance coverage for all Impax Personnel.
	 
	 	2.6.5	 	No Wyeth Benefits. Impax acknowledges and agrees that none of
the Impax Personnel, nor anyone acting on its or their behalf, shall receive
any employee benefits of any kind from Wyeth in connection with their
activities under this Agreement. In addition, Impax (on behalf of itself and
the Impax Personnel) declines any offer now or hereafter made to participate in
any of Wyeth’s benefit plans or programs. The acknowledgment and declination
set forth in this Section 2.6.5 is intended to apply even if Wyeth is
determined to be a co-employer or

15

 

	 	 	 	common law or statutory law employer of any of the Impax Personnel,
including the members of the Impax Sales Force, notwithstanding the
Parties’ express agreement to the contrary. Wyeth shall not maintain or
procure any workers’ compensation or unemployment compensation insurance
for or on behalf of the Impax Personnel.
	 
	 	2.6.6	 	Equal Opportunity Employer. Impax shall not and shall cause
its Permitted Subcontractors to not discriminate because of race, color,
religion, sex, age, national origin, disability, or status as a Vietnam
veteran, as defined and prohibited by applicable laws, in the recruitment,
selection, training, utilization, promotion, termination, or other
employment-related activities concerning the Impax Personnel. In addition,
Impax represents and warrants that both it and its Permitted Subcontractors
each are and shall continue to be during the Term an equal opportunity employer
and shall comply with all applicable federal, state and local laws and
regulations including, to the extent required by such laws and regulations,
Title VII of the Civil Rights Act of 1964; the Equal Pay Act of 1963; the Age
Discrimination in Employment Act of 1967; the Immigration Reform and Control
Act of 1986; the Americans with Disabilities Act; Executive Order 11246; the
Rehabilitation act of 1972; the Vietnam Era Veterans Readjustment Assistance
Act of 1975; and any applicable additions or amendments to any of the
foregoing.
	 
	 	2.6.7	 	Compliance with Applicable Laws. In connection with the
Detailing of the Product in the Territory, Impax shall comply and shall cause
each of its employees, representatives, Permitted Subcontractors and agents,
including, without limitation, all Impax Personnel, to comply with all
Applicable Laws and shall do nothing which Impax knows would jeopardize the
goodwill or reputation of Wyeth or the reputation of the Product. Any material
breach of this provision shall constitute a basis for termination by Wyeth of
this Agreement, at Wyeth’s option, pursuant to Section 9.2.
	 
	 	2.6.8	 	Sales Training.

	 	(a)	 	Promptly following Impax’s delivery of an Early
Initiation Notice pursuant to Section 2.2, but in no event later than
the Initiation Date, Impax shall cause all members of the Impax Sales
Force to attend and complete the Wyeth Sales Training Program (whether
in person or remotely, as determined in Wyeth’s sole discretion), as
described in Section 2.7.6, to educate the Impax Sales Force on the
Product and the Detailing thereof. At any time that Wyeth elects to
designate an alternate product as the Product pursuant to Section 2.3,
Impax shall, promptly following its receipt of the applicable Product
Substitution Notice but in no event later than the Substitution Date
specified therein, cause all members of the

16

 

	 	 	 	Impax Sales Force to attend and complete the Wyeth Sales Training
Program with respect to such alternate product (such training for the
initial Product or an alternate Product, the “Initial Training”).
Impax shall ensure, record and track that each member of the Impax
Sales Force has successfully completed the Wyeth Sales Training
Program and is certified to Detail the Product by the Wyeth Sales
Training Department before such individual is permitted to engage in
any activity relating to the Detailing of the then-current Product.
Any Initial Training described in this Section 2.6.8(a) shall be held
at a location of Wyeth’s choosing that is reasonably acceptable to
Impax (unless Wyeth elects to hold such Initial Training remotely).
Impax shall bear the cost of all travel, lodging, meals, compensation
and ancillary expenses of all Impax Personnel who attend any Initial
Training. Wyeth shall bear the cost of delivering any Initial
Training pursuant to Section 2.7.6(a).
	 
	 	(b)	 	After the Initial Training has occurred. Impax
shall ensure, record and track that each new member of the Impax Sales
Force has successfully completed the Wyeth Sales Training Program (“New
Hire Training”) and is certified to Detail the Product by the Wyeth
Sales Training Department before such individual is permitted to engage
in any activity relating to the Detailing of the then-current Product.
All New Hire Training shall be conducted by experienced Impax sales
training personnel who have themselves been trained by Wyeth’s sales
training personnel with respect to the Product and the Detailing
thereof. Impax shall offer New Hire Training three (3) times per
Contract Year, or more frequently as reasonably necessary based on
turnover of the Impax Sales Force. Impax shall be responsible for all
expenses incurred in connection with New Hire Training.
	 
	 	(c)	 	On an ongoing basis during the Term, Impax
shall ensure, record and track that each member of the Impax Sales
Force successfully completes at least four (4) hours of Refresher
Training every six (6) months. All Refresher Training shall be
conducted by experienced Impax sales training personnel who have
themselves been trained by Wyeth’s sales training personnel with
respect to the Product and the Detailing thereof. Impax shall be
responsible for all expenses incurred in connection with Refresher
Training.
	 
	 	(d)	 	In the event Impax conducts any sales training
meetings related to the Product, Impax shall provide Wyeth with
reasonable notice and shall allow Wyeth to have one or more Wyeth
representatives attend such training at Wyeth’s expense.

17

 

	 	2.6.9	 	Adverse Event or Experience Reporting Procedures. Impax shall
maintain standard operating procedures consistent with and comparable to
Wyeth’s standard operating procedures for handling AEs and shall conduct
periodic training of the Impax Sales Force in all aspects of AE reporting and
maintain training records of such trainings. At Impax’s request, Wyeth will
provide training to the Impax Sales Force on standard operating procedures for
handling AEs.
	 
	 	2.6.10	 	Meetings. At Wyeth’s request, Impax shall cause (i) the members of the Impax
Sales Management Team, other than the Impax Regional Managers, to attend, at
Impax’s expense, that portion of Wyeth’s senior sales management meetings
during which the Product is discussed and (ii) the Impax Regional Managers to
attend that portion of the semi-annual Wyeth district managers plan of action
(“POA”) meetings during which the Product is discussed. After attending each
such meeting, each Impax Regional Manager shall meet with the Impax PSRs under
his or her supervision to discuss the Product POA content. Impax shall provide
reasonable notice to Wyeth of similar meetings conducted by Impax during which
the Product is discussed and shall permit Wyeth representatives to attend any
such meeting at Wyeth’s expense.
	 

	 	2.6.11	 	Sales Call Plan. No later than thirty (30) days prior to the Initiation
Date, Impax shall provide Wyeth with a copy of the proposed initial Sales Call
Plan. Such Sales Call Plan shall govern the Detailing efforts of the Impax
PSRs and the Impax Regional Managers. Thereafter, Impax shall propose
modifications to the Sales Call Plan from time to time, but not later than
sixty (60) days prior to the effective date of such modified Sales Call Plan,
to reflect Wyeth’s changes to the XXXXX and as otherwise necessary to
enable Impax to satisfy its obligations pursuant to Section 2.6.12.

	 
	 	2.6.12	 	Performance of Details.

	 	(a)	 	General. During the Term, Impax shall complete
no less than XXXXX (XXXXX) Cumulative Details (the “Minimum Detail
Requirement”) and no more than XXXXX (XXXXX) Cumulative Details (the
“Cumulative Detail Maximum”) of the Product to Neurologists in
accordance with the terms of this Agreement and the then current Sales
Call Plan. Without limiting the foregoing, in no event shall Impax
deliver less than XXXXX (XXXXX) or more than XXXXX (XXXXX) Cumulative
Details pursuant to this Agreement during any Calendar Quarter without
Wyeth’s prior written consent. For the avoidance of doubt, Details
completed with respect to more than one Product in the event Wyeth
elects to substitute an alternate Product pursuant to Section 2.3 shall
be aggregated for the purposes of determining the foregoing amounts of
Cumulative Details.

18

 

	 	(b)	 	Detail Allocation. Impax shall ensure that at
least XXXXX percent (XXXXX%) of the Quarterly Details delivered by
Impax in each Calendar Quarter are delivered to XXXXX.
Impax shall Detail each XXXXX at least XXXXX
every Calendar Quarter, but in no event XXXXX and (ii) with respect to
XXXXX. In the event that
Impax elects to Detail any XXXXX, Impax shall not
Detail such XXXXX per Calendar
Quarter. Any Details performed in excess of the limitations set forth
in this Section 2.6.12 or otherwise in contravention of any provision
of this Agreement (each, an “Extra Detail”) shall not be considered a
Detail performed by Impax under this Agreement for any purpose,
including, without limitation, for purposes of determining whether
Impax has delivered the minimum number of Details that it is required
to deliver during a given period. Further, notwithstanding any
provision of this Agreement to the contrary, Wyeth shall have no
obligation to pay Impax any amount with respect to the performance of
any Extra Detail.

	 
	 	(c)	 	Detail Standards. Impax shall ensure that each
Detail performed hereunder is conducted in strict accordance with the
then-current Wyeth Policy on Sales and Marketing Practices and the
terms of this Agreement. Impax shall cause each Impax PSR when
conducting each Detail to leave a business card with each Neurologist
Detailed by such Impax PSR, which business card shall identify the
Impax PSR as an employee or representative of Impax. In no event shall
any member of the Impax Sales Force or any other Impax Personnel at any
time identify, either expressly or through implication, themselves as a
an employee or agent of Wyeth.

	 	2.6.13	 	Data Collection and Reporting Systems. Impax shall, at no expense to Wyeth,
establish and, during the Term and the three (3) year period following the
expiration or earlier termination of this Agreement, maintain data collection
and reporting systems, for all Details performed and all Samples distributed by
any member of the Impax Sales Force, which systems and the corresponding data
collection and reporting procedures shall be in compliance with Wyeth’s
accountability requirements, as the same may be communicated to Impax by Wyeth
in writing from time to time. In connection therewith, Impax, at its own
expense, shall provide each Impax Regional Manager and each Impax PSR with a
laptop computer and the necessary software to enable recording, reporting and
regular transmission of data over a secured line consistent with Wyeth
standards. Additionally, Impax, at its own expense, shall provide each member
of the Impax Sales Force with email and voicemail access for use by Impax, each
of its Permitted

19

 

	 	 	 	Subcontractors and Wyeth in communicating with the Impax Sales Force, as
the same may be communicated to Impax by Wyeth in writing from time to
time. Wyeth and Impax shall agree on a data format to provide for transfer
of Detail and Sample activity from Impax to Wyeth no later than sixty (60)
days prior to the Initiation Date. Wyeth shall provide Impax a file
format for the purpose of sending Impax PSR information to Wyeth no later
than thirty (30) days prior to the initiation of the Initial Training.
	 
	 	2.6.14	 	Promotional Claims. Impax shall limit the claims of efficacy and safety for
the Product made by Impax Personnel to those which are consistent with (i)
Wyeth’s approved labeling for the Product in the Territory and (ii) the Wyeth
Sales Training Program. Impax shall not add, delete or modify claims of
efficacy or safety in its Detailing of the Product nor make any changes in
Promotion materials and literature provided by Wyeth. Impax’s Detailing of the
Product shall be in strict adherence to all regulatory, professional and legal
requirements including, without limitation, FDA’s regulations and guidelines
concerning the advertising and promotion of prescription drug products, the
American Medical Association’s Guidelines on Gifts to Physicians, the PhRMA
Code on Interactions with Health Care Professionals, the ACCME Standards for
Commercial Support of Continuing Medical Education, the Wyeth Policy on Sales
and Marketing Practices, and any amendments or updates applicable to any of the
foregoing. Upon notice to Impax of any breach of this Section 2.6.14, Impax
shall ensure that there is no continuance of any such offending activity.
Without limiting any other provision of this Agreement or any remedy Wyeth may
have hereunder, any breach of the previous sentence or any intentional breach
by Impax of the other provisions of this Section 2.6.14 by Impax shall
constitute a material breach for the purposes of Section 9.2.
	 
	 	2.6.15	 	Promotional Materials. The determination of the content and the quantity of
any promotional materials related to the Product shall, subject to Section
2.7.7, be the sole responsibility of Wyeth. Wyeth shall send such promotional
material, at its own expense, to Impax at a single location within the
Territory and Impax shall be responsible, at its own expense, for distributing
such promotional materials to the Impax Sales Force. In connection with the
Detailing of the Product, Impax shall use only promotional materials provided
by Wyeth which shall be used only for the purposes of this Agreement and all
unused quantities of such promotional materials shall be returned to Wyeth upon
expiration or earlier termination of this Agreement. Impax shall not, and
shall cause its Permitted Subcontractors, each member of the Impax Sales Force
to not, alter, in any way, any promotional materials provided by Wyeth
hereunder. All copyright and other intellectual property rights in said
promotional materials shall remain vested solely in Wyeth. Impax shall not
create, distribute or use sales, promotion or

20

 

	 	 	 	other similar material relating to the Product without the prior written
consent of Wyeth. If any promotional materials provided to Impax by Wyeth
need to be withdrawn from use for any reason, Wyeth shall notify Impax of
such withdrawal and Impax shall cooperate with Wyeth in effectuating any
such withdrawal. Wyeth shall reimburse Impax for any reasonable and
documented incremental out-of-pocket costs incurred by Impax in connection
with conducting such withdrawal, except to the extent the withdrawal is
attributable to (a) the breach of this Agreement by Impax or (b) the
negligence or intentional misconduct of Impax or any of the Impax
Personnel, in which event Impax shall (i) bear its own costs in connection
with taking such actions and (ii) reimburse Wyeth for any reasonable and
documented out-of-pocket costs incurred by Wyeth in connection with
conducting such withdrawal to the extent that such withdrawal is
attributable to such breach, negligence or intentional misconduct.
	 
	 	2.6.16	 	Sample Receipt Forms. Each Impax PSR shall complete a Sample Receipt Form
with respect to each Sample disbursed by such Impax PSR. In each instance
where a Sample is disbursed, the Impax PSR providing such Sample shall ensure
that the Neurologist receiving such Sample signs the applicable Sample Receipt
Form in acknowledgment of receipt of such Sample. Each Impax PSR shall mail to
Impax or Impax’s Permitted Subcontractor (as determined by Impax), in
pre-addressed, postage-paid envelopes provided by Impax, or send via electronic
means, on a regular basis no less frequently than quarterly the original
completed Sample Receipt Forms for Sample disbursements performed by such Impax
PSR during the period covered by the report. A copy of all such Sample Receipt
Forms shall be kept by Impax or its Permitted Subcontractor. Impax shall
ensure that each Impax PSR fills out the Sample Receipt Forms accurately,
completely and timely. For the avoidance of doubt, the foregoing obligations
are in addition to the procedures set forth in Article 10.
	 
	 	2.6.17	 	Communications with Sales Representatives. Impax shall have full
responsibility for the dissemination of information regarding the Product to
the Impax Sales Force based on information provided by Wyeth. All written
communications from Impax to any member of the Impax Sales Force containing any
substantive drug information about the Product other than the Product name,
description and price shall be subject to prior written approval by Wyeth.
Communications such as tactical memos, competitive alerts and other routine
business reports which contain no substantive drug information about the
Product shall not require approval by Wyeth.
	 
	 	2.6.18	 	Sales Force Compensation Plan. Impax shall establish and, throughout the
Term, maintain a sales force compensation and incentive plan. The Impax sales
force compensation and incentive plan may provide for

21

 

	 	 	 	compensation based, in part, on activities outside of Impax’s
responsibilities under this Agreement (e.g., the promotion of other
pharmaceutical products by the Impax PSRs to the extent permitted by this
Agreement), provided, however, that such sales force compensation and
incentive plan shall include, for each member of the Impax Sales Force, as
part of the total target bonus compensation available to be earned, a
target bonus compensation based on
XXXXX, and
provided, further, that the percentage of such target bonus compensation
based on activities under this Agreement shall in no event be XXXXX
percent (XXXXX%).

	 	2.7	 	Obligations of Wyeth.

	 	2.7.1	 	Marketing Planning, Strategy and Content. Wyeth shall have
exclusive responsibility and authority for all Marketing planning and strategy
for the Product and the content of promotional message(s) for the Product.
Wyeth reserves the right, at its sole discretion and at any time, to change the
Marketing and sales strategy and tactics for the Product, the promotional
message(s) for the Product and the marketing budget for the Product.
	 
	 	2.7.2	 	Product Promotion Guidelines. Wyeth shall provide Impax with
a complete copy of the Wyeth Policy on Sales and Marketing Practices no later
than thirty (30) days prior to the Initiation Date. Wyeth may subsequently
revise the Wyeth Policy on Sales and Marketing Practices upon written notice to
Impax, which notice shall specify all relevant revisions to the then-current
Wyeth Policy on Sales and Marketing Practices.
	 

	 	2.7.3	 	XXXXX. Wyeth shall have exclusive responsibility
and authority for the establishment and maintenance of a
XXXXX.
Impax shall provide Wyeth with Impax’s
XXXXX the Initiation Date. Wyeth shall provide the
XXXXX to Impax at least thirty (30) days prior to the Initiation
Date, with the Parties’ expectation being that substantially all of the
XXXXX shall have been selected from
XXXXX. For clarity, any individual who is included on the XXXXX shall be
deemed a XXXXX, regardless of whether such individual’s
credentials meet the technical definition of the term “Neurologist” in Section
1.55. Wyeth shall update the XXXXX

22

 

	 	 	 	on a semi-annual basis such that the
XXXXX. The XXXXX
may be modified by Wyeth on a more frequent basis from time to time within
its reasonably exercised discretion upon sixty (60) days prior written
notice to Impax.

	 
	 	2.7.4	 	Pricing. Wyeth shall have exclusive responsibility and
authority with respect to the pricing of the Product. Wyeth shall inform Impax
of list price increases or decreases for the Product in the Territory at the
time such information is generally announced to the trade by Wyeth.
	 
	 	2.7.5	 	Distribution and Sale of Product. Except to the extent that
Impax distributes Samples of the Product to Neurologists in accordance with
this Agreement, Wyeth shall have the sole right and responsibility to arrange
for all distribution of the Product in the Territory, to effect and account for
all sales of the Product in the Territory, and to establish and modify the
terms and conditions with respect to the sale of the Product in the Territory,
including any terms and conditions relating to or affecting the price at which
the Product will be sold, any discount attributable to payments on receivables,
distribution of the Product, credit to be granted or refused and the like.
	 
	 	2.7.6	 	Training.

	 	(a)	 	Wyeth shall cause its sales trainers to conduct
an Initial Training of all of the members of the Impax Sales Force with
respect to the Product and the Detailing thereof in accordance with the
Wyeth Sales Training Program, it being understood and agreed that Impax
is responsible for general sales training. Any Initial Training shall
be provided at such times and locations as Wyeth may designate and may
be conducted remotely at Wyeth’s election; provided that such times and
locations provide Impax with a reasonable opportunity to comply with
Impax’s obligations under Section 2.6.8(a). In connection with any
Initial Training, Wyeth shall provide training materials relating to
the initial training in sufficient quantities to adequately train the
Impax Sales Force. Wyeth shall be responsible for all expenses that it
incurs in connection with delivering training pursuant to this Section
2.7.6(a). Pursuant to Section 2.6.8(a), Impax shall bear the cost of
all travel, lodging, meals, compensation and incidental expenses of all
Impax Personnel who attend any such training.
	 
	 	(b)	 	Within a reasonable period of time after the
Initiation Date and at reasonable intervals throughout the Term, Wyeth
shall cause one or more of Wyeth’s sales trainers to train Impax’s
designated professional sales trainers, who, in turn, will conduct New
Hire

23

 

	 	 	 	Training and Refresher Training of the Impax Sales Force with respect
to the Product and the Detailing thereof.
	 
	 	(c)	 	From time to time during the Term, Wyeth shall
provide electronic training materials containing new information
relating to the Product or the Detailing thereof as Wyeth deems
necessary or appropriate to enable Impax to conduct ongoing training of
the Impax Sales Force in regard thereto (“Refresher Training”).

	 	2.7.7	 	Promotional Materials. Wyeth shall use its Commercially
Reasonable Efforts to provide Impax with promotional materials for Detailing
the Product to Neurologists (in such quantities as Wyeth shall reasonably
determine, taking into account the number of Details such Impax PSRs are
expected to deliver and which are the same as or comparable to the promotional
materials Wyeth supplies to its own Sales Force with respect to the Product).
Impax shall be responsible, at its own expense, for distributing such
promotional materials to the Impax PSRs in accordance with Section 2.6.15.
	 
	 	2.7.8	 	Samples. Wyeth shall use Commercially Reasonable Efforts to
provide Impax with Samples for distribution to Neurologists as set forth in
Article 10 of this Agreement
	 

	 	2.7.9	 	Promotion by Wyeth. Wyeth shall use Commercially Reasonable
Efforts (i) to minimize any targeted detailing of the Product to
XXXXX
 and (ii) not to include
XXXXX for use by Wyeth or any of its Affiliates or Third Parties
for use in Promoting the Product. Except as expressly provided herein, Wyeth
reserves the right to Promote, detail or distribute Samples of the Product to
any physician or other health care provider, at any time during the Term and/or
to retain one or more of its Affiliates and/or one or more Third Parties to
Promote, detail or distribute Samples of the Product to any such physician or
other health care provider.

	 	2.8	 	Coordination Meetings. Two (2) or more representatives of Wyeth and Impax
shall meet periodically as needed, but in no event less than once during each Calendar
Quarter during the Term, to discuss strategies relating to Promoting the Product,
including, without limitation, Detailing, field funding and program opportunities.
Each Party shall appoint a primary contact person (which, in Impax’s case, shall be the
Impax Director of Sales and, in Wyeth’s case, shall be Wyeth’s Global Business Manager
for the Product) to coordinate on its behalf meetings and communications between the
Parties. Each Party’s primary contact person shall involve such Party’s functional
experts as required to discuss any issues that arise under this Agreement. Wyeth shall
consider, in good faith, input from Impax in reaching its decisions; however, Wyeth
shall have final authority

24

 

	 	 	 	and responsibility for the Product’s Promotional strategy, identification of
 XXXXX and for the content and selection of the sales and Promotional material
which it shall provide Impax under the terms of this Agreement.

	 
	 	2.9	 	Ownership of Product.

	 	2.9.1	 	Ownership of Product. Wyeth retains and shall retain all
proprietary and property interests in and to the Product. Without limiting the
foregoing, Wyeth shall retain title to all Samples until delivered to
Neurologists in accordance with this Agreement. Impax shall not have nor
represent that it has any control over or proprietary or property interests in
the Product or any Samples thereof. Nothing contained in this Agreement shall
be deemed to grant to Impax, its Affiliates or any Third Party any license,
right, title or interest in or to any patent, trademark, copyright, domain
name, trade secret or other similar property of Wyeth except as may be
authorized, in writing, by Wyeth, as applicable, for Impax to Detail the
Product pursuant to this Agreement.
	 
	 	2.9.2	 	Trademark. The initial Product shall be Detailed by Impax
under the trademark XXXXX owned by Wyeth. Any replacement product designated
by Wyeth pursuant to Section 2.3 shall be Detailed by Impax under the trademark
designated for such product in the relevant Product Substitution Notice. This
Agreement does not grant to Impax any property right or interest including
goodwill in the trademark XXXXX or any other trademarks, designs, logos,
slogans, taglines, trade names, domain names or trade dress which Wyeth or any
of its Affiliates own, use or control (collectively, the “Wyeth Trademarks”),
it being understood and agreed that Impax does not require any such right or
interest to fulfill its obligations under this Agreement. Impax recognizes the
validity of the right, title and interest of the Wyeth Trademarks, in any
country in connection with the Product, whether registered or not. Impax shall
not use, and shall cause its Affiliates and Permitted Subcontractors not to
use, or register in any way any Wyeth Trademark or any trademarks, designs,
logos, slogans, taglines, trade names, domain names or trade dress in the
course of performing Impax’s obligations under this Agreement which are
confusingly similar to any Wyeth Trademark.
	 
	 	2.9.3	 	Trademark Infringement. Impax shall promptly advise Wyeth of
all cases of Third Party infringement of trademarks associated with the Product
that come to Impax’s attention, and shall, at the specific written request of
Wyeth, render all assistance reasonably requested in connection with any action
taken by Wyeth in relation to any alleged trademark infringement. The control
of such action, including whether to initiate action and/or to settle, shall
solely be under the control of Wyeth and Wyeth shall retain for its own account
any damages or other

25

 

	 	 	 	monetary relief in connection with such action. Impax shall not undertake
any action with respect to infringement of such trademarks or trade names
without Wyeth’s prior written consent.
	 
	 	2.9.4	 	Patents and Patent Infringement. This Agreement does not
grant to Impax, its Affiliates or any other Third Party any license, right,
title or interest in or to any Patent Right owned or controlled by Wyeth or its
Affiliates. Impax shall promptly advise Wyeth of all cases of Third Party
infringement of patents associated with the Product that come to Impax’s
attention, in the course of performing Impax’s obligations under this Agreement
and shall, at the written request of Wyeth and, as between Impax and Wyeth, at
Wyeth’s cost, provide any information or documents generated or obtained in
connection with this Agreement as may be requested by Wyeth for use by Wyeth in
connection with actions taken or to be taken by Wyeth in relation to such
alleged patent infringement. The control of such action, including whether to
initiate action and/or to settle, shall solely be under the control of Wyeth.
	 
	 	2.9.5	 	No Implied Licenses. Except as expressly set forth in this
Agreement, this Agreement provides Impax with no right, title or interest,
either express or implied, by estoppel or otherwise, in or to any intellectual
property rights owned or controlled by Wyeth or any of Wyeth’s Affiliates,
including, without limitation, any Patent Right, trademark, copyright, domain
name, trade secret or know-how.
	 
	 	2.9.6	 	Ownership of Improvements. Wyeth or its designee shall own
all right, title and interest in and to any and all inventions, discoveries,
know how and other intellectual property, including any improvements thereto,
that are conceived, reduced to practice or otherwise made by Impax or any of
its employees or agents (whether solely or jointly with others) as a result of
or in connection with the performance of its obligations under this Agreement
to the extent related to any of the Detailed Products and any patent, trade
secret or other intellectual property rights with respect thereto
(collectively, the “Wyeth Improvements”). Impax shall promptly (a) disclose to
Wyeth in writing the conception, reduction to practice or making of any Wyeth
Improvements, as the same are conceived of, reduced to practice or made and (b)
without additional consideration, and, at Wyeth’s expense (for reasonable and
documented out-of-pocket costs incurred), assign and transfer, and cause each
of its employees and agents to assign and transfer, to Wyeth or its designee
any and all right, title and interest they each may have in and to such Wyeth
Improvements throughout the world.
	 
	 	2.9.7	 	No Distribution. It is recognized by the Parties that Impax
and/or its Permitted Subcontractors may from time to time receive orders for
the Product directly from Third Parties. In such event, Impax promptly

26

 

	 	 	 	shall advise or shall cause the Impax PSRs to advise the customer that
neither Impax nor its Permitted Subcontractors are authorized to accept
orders for the Product, but that Impax will forward the order to Wyeth for
acceptance or rejection at Wyeth’s sole discretion. Immediately
thereafter, Impax shall transmit said orders and purchase order numbers
promptly to Wyeth for acceptance or rejection at Wyeth’s sole discretion.

	3.	 	PAYMENTS.

	 	3.1	 	Detail Fee. In consideration for Impax’s Detailing of the Product during the
Term, subject to Section 3.3, Wyeth shall pay to Impax a fee (the “Detail Fee”) in the
amount of (i) XXXXX dollars ($XXXXX) for each Primary Detail (the “Primary Detail Price”) and
(ii) XXXXX dollars ($XXXXX) for each Secondary Detail (the “Secondary Detail Price”), each
amount as adjusted as provided in Section 3.2, delivered by the Impax PSRs during the
Term, provided that in the event that at the conclusion of any Calendar Quarter during
the Term Impax certifies to Wyeth in the applicable Monthly Detail Report that the

XXXXX, subject to adjustment as provided in Section 3.2. Each Detail Fee shall
be due and payable within thirty (30) days after Impax delivers an invoice to Wyeth
stating the Detail Fee that is due for the relevant Calendar Quarter.

	 
	 	3.2	 	Adjustments to Detail Price. At the beginning of Contract Year 2 and Contract
Year 3, the Primary Detail Price and Secondary Detail Price shall each be increased by
the amount, if any, of the Impax Cost Adjustment.

	 	3.2.1	 	For example, XXXXX.

27

 

	 	3.2.2	 	Impax shall report to Wyeth Impax’ calculation of the proposed
Impax Cost Adjustment for any applicable Contract Year, together with all
relevant back-up information, within sixty (60) days of the beginning of such
Contract Year.

	 	3.3	 	No Payment for Extra Details. Wyeth shall have no obligation to pay Impax any
amount with respect to the performance of any Extra Detail.
	 

	 	3.4	 	Incentive Fee. Within ninety (90) days after the end of each Contract Year,
Wyeth shall report to Impax
XXXXX and the basis for Wyeth’s
calculation thereof. Together with such report, Wyeth shall pay to Impax an amount
XXXXX (the
“Incentive Fee”) for such Contract Year. For the avoidance of doubt, the Incentive Fee
shall not be due for a partial Contract Year in the event this Agreement is terminated
pursuant to Section 9.2 or Impax terminates this Agreement pursuant to Section 9.3. By
way of example only, a sample calculation of the Incentive Fee is set forth on Schedule
3.4.

	 
	 	3.5	 	Taxes and Withholding. Impax shall be solely responsible for all taxes that
may be due to any governmental authority in connection with the payments made to it by
Wyeth hereunder. All payments under this Agreement will be made without any deduction
or withholding for or on account of any tax unless such deduction or withholding is
required by Applicable Laws. If Wyeth is so required to deduct or withhold, Wyeth will
(a) promptly notify Impax of such requirement, (b) pay to the relevant authorities the
full amount required to be deducted or withheld promptly upon the earlier of
determining that such deduction or withholding is required or receiving notice that
such amount has been assessed against Impax, and (c) promptly forward to Impax an
official receipt (or certified copy) or other documentation reasonably acceptable to
Impax evidencing such payment to such authorities.
	 
	 	3.6	 	Currency. All amounts payable and calculations hereunder shall be in United
States dollars.

	4.	 	RECORD KEEPING; REPORTING AND AUDITS.

	 	4.1	 	Impax Records and Audits. Impax shall keep complete and accurate records of
(i) all Details delivered by the Impax Sales Force, (ii) with respect to Samples
delivered by the Impax Sales Force, the quantity and dates of delivery of such Samples
to each Neurologist and (iii) all information required to determine any Impax Cost
Increase (including any information required to determine any Impax PSR Cost). Impax
also shall keep its copies of the completed Sample Receipt Forms. All such records
shall be retained for not less than three (3) years following the Contract Year in
which they are generated and, at Wyeth’s request, made available for review and copying
by Wyeth or its designees during normal

28

 

	 	 	 	business hours at an Impax facility in the United States. Wyeth, either itself or
using an Affiliate or Third Party auditor designated by Wyeth and reasonably
acceptable to Impax, shall have the right to audit Impax’s Detail and Sample
distribution activity reporting system to determine whether or not the reports
submitted by Impax to Wyeth under Section 4.2 are complete and accurate. Wyeth may
conduct such an audit once per year or more often as may be warranted in the event
of regulatory inquiries regarding Sample distribution or Detail activity or in the
event of discrepancies arising from market research activity conducted pursuant to
Section 4.3. If any audit or review conducted pursuant to this Section 4.1 reveals
an over-payment by Wyeth of any amount payable by Wyeth pursuant to Article 3, Impax
shall reimburse Wyeth the amount of such overpayment within thirty (30) days
following the date Wyeth delivers to Impax notice of such overpayment. Wyeth shall
bear any costs that it incurs with conducting any audit pursuant to this Section 4.1
unless such audit determines that Wyeth has overpaid by more than five percent (5%)
with respect to the payments subject to Wyeth’s audit, in which case Impax shall
reimburse Wyeth for the costs of the audit.

	 	4.2	 	Impax Reports. Following the Initiation Date and during the Term, within
twenty-one (21) Business Days after the end of each calendar month, Impax shall provide
to Wyeth the raw electronic data generated in connection with Sales Call activity and
Sample disbursements (if any) and a written report, each formatted in such manner as
requested by Wyeth, setting forth:

	 	(i)	 	an updated list of full names, addresses and geographic sales
territory covered (identified by zip code(s)) with respect to each member of
the Impax Sales Force active during such calendar month;
	 
	 	(ii)	 	the number of Primary Details, the number of Secondary Details
and the total number of Cumulative Details delivered by each member of the
Impax Sales Force during such calendar month and Contract Year-to-date, and on
a cumulative basis for all members of the Impax Sales Force for such calendar
month;
	 

	 	(iii)	 	the number of Primary Details, the number of Secondary Details
and the total number of Cumulative Details delivered by the members of the
Impax Sales Force to each Neurologist during such calendar month and Contract
Year-to-date, sorted by XXXXX;

	 
	 	(iv)	 	if applicable, the total number of Samples delivered by each
member of the Impax Sales Force during such calendar month, Contract
Year-to-date, and on a cumulative basis for all members of the Impax Sales
Force during such calendar month;
	 
	 	(v)	 	if applicable, the total number of Samples delivered to each
Neurologist by the Impax Sales Force during such calendar month and Contract
Year-

29

 

	 	 	 	to-date, which report shall also identify each such Neurologist
XXXXX;

	 
	 	(vi)	 	if applicable, the number of Samples remaining in Impax’s
inventory and/or in the possession of authorized Impax Personnel on the last
day of such calendar month;
	 

	 	(vii)	 	XXXXX during such
calendar month and for the Contract Year-to-date;

	 
	 	(viii)	 	the identity of any Third Party products Promoted by the Impax PSRs during
such calendar month; and
	 
	 	(ix)	 	the number of Cumulative Details since the Initiation Date as
of the end of such calendar month.

	 	 	 	Wyeth shall treat each such Monthly Detail Report as Impax’s Confidential
Information pursuant to Article 11 of this Agreement.
	 
	 	4.3	 	Market Research. Detailing performance by the Impax PSRs also may be measured
through review of market research. Without limiting Impax’s obligation under Section
2.6.12 and Wyeth’s rights under Sections 2.6.12, 9.2 or 9.3, in the event such review
reveals a discrepancy with the performance reported by Impax in accordance with Section
4.2 above, the Parties, upon Wyeth’s request, and in addition to Wyeth’s rights
pursuant to Section 4.1, shall promptly meet to discuss the matter and agree upon a
plan or mechanism to address the discrepancy.
	 

	 	4.4	 	Wyeth Records and Audits. Wyeth shall keep complete and accurate records of
all information required to determine XXXXX and any resulting
Incentive Fee. All such records shall be retained for not less than three (3) years
following the Contract Year in which they are generated and, at Impax’s request, made
available for review and copying by an independent third party auditor reasonably
acceptable to both Parties during normal business hours at a Wyeth facility in the
United States. Impax, either itself or using an Affiliate or Third Party auditor
designated by Impax and reasonably acceptable to Wyeth, shall have the right to audit
Wyeth’s records of XXXXX to determine whether or not the reports submitted by Wyeth
to Impax under Section 4.2 are complete and accurate. Impax may conduct such an audit
once per year. If any audit or review Wyeth conducted pursuant to this Section 4.4
reveals an under-payment by Wyeth of any amount payable by Wyeth pursuant to Section
3.4. Wyeth shall pay Impax the amount of such underpayment within thirty (30) days
following the date Impax delivers to Wyeth notice of such underpayment. Impax shall
bear any costs that it incurs with conducting any audit pursuant to this Section 4.4
unless such audit determines that Wyeth has underpaid by more than five percent (5%)

30

 

	 	 	 	with respect to the payments subject to Impax’s audit, in which case Wyeth shall
reimburse Impax for the costs of the audit.

	5.	 	RELATIONSHIP AND PUBLICITY.

	 	5.1	 	Relationship of Parties. Neither Party shall have any responsibility for the
hiring, termination, compensation or benefits of the other Party’s employees. No
employees or representatives of either Party shall have any authority to bind or
obligate the other Party for any sum or in any manner whatsoever, or to create or
impose any contractual or other liability on the other Party without said Party’s
authorized written approval. For all purposes, and notwithstanding any provision of
this Agreement to the contrary, Impax’s legal relationship under this Agreement to
Wyeth shall be that of independent contractor.
	 
	 	5.2	 	Public Announcements. Subject to the provisions of Section 11.4, and except as
otherwise required by applicable laws or the terms of this Agreement, neither Party
shall distribute or have distributed any publicity or information which bears the name
of the other without the prior written approval of the other. Notwithstanding the
foregoing, but still subject to Section 11.4, either Party, to the extent required by
applicable laws, may issue a press release or other public announcement to announce the
Detailing arrangement contemplated hereunder, provided that the content thereof is
subject to prior review by the other Party, and that the announcing Party shall not
unreasonably refuse comments from the reviewing Party and shall redact any requested
Confidential Information of the reviewing Party.

	6.	 	REGULATORY COMPLIANCE.

	 	6.1	 	Marketing Authorization. As between the Parties, Wyeth shall have the sole
right and responsibility to take, and shall take, all actions with respect to the
Product as would normally be taken in accordance with the accepted business practices
and legal requirements in order to maintain the authorization to Market the Product as
a pharmaceutical product in the Territory.
	 
	 	6.2	 	Recalls. At Wyeth’s reasonable request and, as between Wyeth and Impax, at
Wyeth’s cost, Impax shall reasonably assist Wyeth in handling any recalls or voluntary
withdrawal of the Product. Impax shall make available to Wyeth, upon request, all
pertinent records of Impax which Wyeth may reasonably request to assist Wyeth in
effecting any such recall.
	 
	 	6.3	 	Returns. Any Product returned to Impax shall be shipped to a location
designated by Wyeth, with any reasonable direct cost to be paid by Wyeth.
	 
	 	6.4	 	Adverse Drug Experiences. For the reporting of adverse drug experiences, the
responsibilities of the Parties are as follows:

	 	6.4.1	 	Wyeth shall be responsible for follow-up of all reports of
adverse events or experiences (“AEs”) or Other Information Reportable to Wyeth
(as

31

 

	 	 	 	hereinafter defined) and for the preparation and submission to the FDA of
all safety reports required per US Code of Federal Regulations (CFR),
title 21 § 314.80.
	 
	 	6.4.2	 	An AE is any untoward, undesired, or unplanned event in the
form of signs, symptoms, disease, or laboratory or physiological observations
occurring in a person administered any Detailed Product or in a clinical study.
The event or experience does not need to be causally related to such Detailed
Product or clinical study. An AE includes, but is not limited to:

	 	(a)	 	Any clinically significant worsening of a
pre-existing condition;
	 
	 	(b)	 	An AE occurring from Detailed Product overdose
(i.e., a dose higher than that prescribed by a healthcare professional
for clinical reasons, or a dose higher than that described on the
Detailed Product label) whether accidental or intentional;
	 
	 	(c)	 	An AE occurring from abuse (e.g., use for
non-clinical reasons) of the Detailed Product;
	 
	 	(d)	 	An AE occurring from discontinuation of the
Detailed Product (Detailed Product withdrawal); and
	 
	 	(e)	 	Any failure of expected pharmacological action.

	 	6.4.3	 	“Other Information Reportable to Wyeth” means information not
meeting the definition of an AE and includes:

	 	(a)	 	Abuse (e.g., use for non-clinical reasons)
without an AE;
	 
	 	(b)	 	Inadvertent or accidental exposure, without an
AE;
	 
	 	(c)	 	An unexpected therapeutic or clinical benefit
from use of the product;
	 
	 	(d)	 	A case involving a pregnancy exposure to the
product;
	 
	 	(e)	 	Overdose without an AE;
	 
	 	(f)	 	Drug exposure through breast-feeding without an
AE;
	 
	 	(g)	 	Medication errors without an AE;
	 
	 	(h)	 	Any failure of expected pharmacological action;
or
	 
	 	(i)	 	AEs of special interest as designated by Wyeth
or regulatory authority.

32

 

	 	6.4.4	 	To the extent Impax, any Permitted Subcontractor or any of the
Impax Personnel, including, without limitation, any member of the Impax Sales
Force, becomes aware of or receives any information regarding an AE related to
the use of any Detailed Product, Impax shall promptly provide Wyeth with such
information within two (2) Business Days of the date received by Impax, such
Permitted Subcontractor or any of the Impax Personnel, including, without
limitation, any member of the Impax Sales Force.
	 
	 	6.4.5	 	For all AEs, Impax shall not, and shall cause its Permitted
Subcontractors and the Impax Personnel not to, make any statement or give any
opinion (written or verbal) to anyone that could be construed as an admission
of fault on Wyeth’s part or a promise that Wyeth will compensate anyone.
Impax, Impax’s Permitted Subcontractors, and the Impax Personnel may only
promise to report the AE and follow the appropriate procedures as outlined
herein.
	 
	 	6.4.6	 	AE related information shall be forwarded (by fax or overnight
mail) to:
	 
	 	 	 	Wyeth Global Safety Surveillance, Epidemiology and Labeling (GSSEL)
on a Wyeth 1747(b) Form (a sample of which is attached hereto as Schedule
6.4.6):

	 	a.	 	Facsimile: 610-989-5544; or
	 	b.	 	Overnight courier to:
	 
	 	 	 	Global Safety Surveillance & Epidemiology

GSSE Triage Unit

Wyeth Research

Dock E

500 Arcola Road

Collegeville, PA 19426

	 	6.4.7	 	Wyeth and Impax shall each appoint a contact person to address
AE reporting issues as they arise.

	 	6.5	 	Product Complaints. In the event Impax receives any complaints regarding any
Detailed Product, Impax’s responsibilities shall be as follows:

	 	6.5.1	 	If any of the Impax Personnel, including without limitation,
any Impax PSR, receives a complaint concerning any Detailed Product, such
employee shall call Wyeth’s Product Quality Department at (800) 99-WYETH [(800)
999-9384] to report such complaint and follow Wyeth’s instructions regarding
the return and replacement of any Samples distributed by such employee.

33

 

	 	6.5.2	 	If any of the Impax Personnel, including, without limitation,
any Impax PSR, receives notice of a serious Detailed Product tampering, Wyeth
Product Quality should be immediately contacted by:

	 	(a)	 	E-mail at: PQProd@Wyeth.com
	 
	 	(b)	 	Phone at: 1-800-99-WYETH ((800) 999-9384);
	 
	 	(b)	 	Any other individuals as Wyeth may designate from time to time by
written notice to Impax.

	 	6.5.3	 	If any of the Impax Personnel, including, without limitation,
any Impax PSR, receives notice of or information concerning any incident that
causes any Detailed Product or its labeling to be mistaken for, or applied to
another article, the following should be called during business hours:

	 	(a)	 	PQProd@Wyeth.com, or 1-800-99-WYETH ((800)
999-9384);
	 
	 	(b)	 	Any other individuals as Wyeth may designate
from time to time by written notice to Impax.

	 	6.6	 	Product Inquiries. In the event that any of the Impax Personnel, including,
without limitation, any Impax PSR, receives any inquiries about any Detailed Product,
Impax’s responsibilities shall be as follows:

	 	6.6.1	 	For questions which Impax PSRs are unable to answer concerning
Detailed Product identification, Detailed Product ingredients or
stability/storage information, Impax and/or Impax’s Permitted Subcontractor(s)
shall contact Wyeth Product Quality, at (800) 999-9384 or at P.O. Box 26609,
Richmond, VA 23261-6609 (or such other person(s), address(es) and phone
number(s) as Wyeth may designate from time to time by written notice to Impax).
	 
	 	6.6.2	 	For medical inquiries, including those related to information
outside of labeling or which Impax PSRs are unable to answer, a form 8202 —
Health Care Professional Request for Medical Information (a sample of which is
attached hereto as Schedule 6.6) or equivalent (which equivalent is acceptable
to Wyeth) (any such form, an “RPI Form”) must be completed (including the
signature of the health care professional and such health care professional’s
complete mailing address, telephone number and email address or fax number) and
faxed to (800) 955-2534 or (888) 237-3389, or mailed to Wyeth Global Medical
Communications, P.O. Box 8299, Philadelphia, PA 19101 (or such other address as
Wyeth may designate from time to time by written notice to Impax). For
emergency medical inquiries, call 800-934-5556 (or such other phone number as
Wyeth may designate from time to time by written notice to Impax). Impax shall
not, and shall cause the Impax

34

 

	 	 	 	PSRs to not, (i) solicit such medical inquiries and (ii) submit adverse
event information on an RPI Form.
	 
	 	6.6.3	 	All responses to form 8202 inquiries from the medical
profession or other Third Parties shall be given solely by Wyeth, Impax shall
provide reasonable assistance to Wyeth to the extent deemed necessary by Wyeth
to fully respond to such communications.

	 	6.7	 	Communications with FDA. All communications with FDA concerning any Detailed
Product shall be the sole responsibility of Wyeth. Impax shall provide reasonable
assistance to Wyeth to the extent deemed necessary by Wyeth to fully respond to such
communications.
	 
	 	6.8	 	Additional Responsibilities of the Parties.

	 	6.8.1	 	Impax and Wyeth shall keep each other advised of significant
market, economic, regulatory and other developments which may affect the
Promotion or Detailing of the Product in the Territory during the Term.
	 
	 	6.8.2	 	Impax shall report promptly to Wyeth all other significant
information concerning any complaint of any kind regarding any Detailed
Product, its labeling, quality or packaging, including, but not limited to, any
adverse drug experience not reported pursuant to Section 6.4 above.
	 
	 	6.8.3	 	It is understood and agreed that the reporting requirements
set forth in this Article 6 are based on Wyeth policies and procedures and
regulatory reporting requirements. Accordingly, in the event of changes to
regulatory requirements or Wyeth policies and procedures, Impax agrees to
comply with all reasonable revised notification procedures as requested in
writing by Wyeth. Wyeth shall promptly advise Impax in the event of the change
of the person or phone number for any of the contacts specified above.
	 
	 	6.8.4	 	Wyeth shall retain sole responsibility for communicating with
all government agencies, including, without limitation, the FDA, and satisfying
all requirements regarding maintenance of approvals to Market any Detailed
Product in the Territory.

	7.	 	REPRESENTATIONS, WARRANTIES AND COVENANTS.

	 	7.1	 	Mutual Representations and Warranties. As of the Effective Date, each of Impax
and Wyeth hereby represents, warrants, and covenants to the other Party hereto as
follows:

	 	(a)	 	it is a corporation or entity duly organized
and validly existing under the laws of the state or other jurisdiction
of its incorporation or formation;

35

 

	 	(b)	 	the execution, delivery and performance of this
Agreement by such Party has been duly authorized by all requisite
corporate action and does not require any shareholder action or
approval;
	 
	 	(c)	 	it has the power and authority to execute and
deliver this Agreement and to perform its obligations hereunder;
	 
	 	(d)	 	the execution, delivery and performance by such
Party of this Agreement and its compliance with the terms and
provisions hereof does not and will not conflict with or result in a
breach of any of the terms and provisions of or constitute a default
under (i) a loan agreement, guaranty, financing agreement, agreement
affecting a product or other agreement or instrument binding or
affecting it or its property; (ii) the provisions of its charter or
operative documents or bylaws; or (iii) any order, writ, injunction or
decree of any court or governmental authority entered against it or by
which any of its property is bound; and
	 
	 	(e)	 	it shall at all times comply with all
Applicable Laws relating to its activities under this Agreement.

	 	7.2	 	Impax Representations and Warranties. In addition to the representations,
warranties and covenants made by Impax elsewhere in this Agreement, Impax hereby
represents, warrants, and covenants to Wyeth that it has not been debarred and is not
subject to debarment and that it shall not use in any capacity, in connection with the
performance of its obligations under this Agreement, any Person who has been debarred
pursuant to Section 306 of the FD&C Act or who is the subject of a conviction described
in such section. Impax shall notify Wyeth in writing immediately if it or any of the
Impax Personnel is debarred or is the subject of a conviction described in Section 306
of the FD&C Act, or if any action, suit, claim, investigation, or legal or
administrative proceeding is pending or, to the best of Impax’s knowledge, is
threatened, relating to the debarment or conviction of Impax or any of the Impax
Personnel. Impax shall notify Wyeth in writing immediately if any Third Party
(including any agency) alleges that Impax’s Detailing activities pursuant to this
Agreement are not in compliance with Applicable Laws.
	 
	 	7.3	 	Wyeth Representations and Warranties. In addition to the representations,
warranties and covenants made by Wyeth elsewhere in this Agreement, Wyeth hereby
represents and warrants to Impax that, as of the Effective Date:

	 	(a)	 	Ownership. Wyeth is the sole and exclusive
owner of the entire right, title and interest in and to (i) the patents
listed on Schedule 7.3 (the “Initial Product Patents”), which
patents are listed by Wyeth in the FDA’s Approved Drug Products with
Therapeutic Equivalence Evaluations (the “Orange Book”) claiming the
Initial Product or the method of using the Initial Product, as required
by

36

 

	 	 	 	the FD&C Act, and are existing as of the Effective Date and (ii) the
Wyeth Trademarks,
	 
	 	(b)	 	Non-Infringement. To Wyeth’s knowledge, the
manufacture, use or sale of the Initial Product in the Territory or the
use of the Wyeth Trademarks in the Territory do not infringe or
misappropriate, and the Detailing by Impax as contemplated by this
Agreement will not infringe or misappropriate, the patent rights, trade
secret or other intellectual property rights of any Third Party.

	 	7.4	 	Wyeth Covenants.

	 	(a)	 	Compliance with Law. Wyeth will perform its
obligations under this Agreement in accordance with all Applicable
Laws, including without limitation provision of Promotional Materials
and the labeling of the Product or the Samples in compliance with all
Applicable Laws
	 
	 	(b)	 	Samples. The Samples provided by Wyeth to Impax
are not unfit for distribution under any Applicable Laws (including,
but not limited to, not being adulterated or misbranded as defined
under the FD&C Act or an article that may not, under the FD&C Act, be
introduced into interstate commerce).

	 	7.5	 	Other Opportunities. The Parties, within ninety (90) days after the Effective
Date, and with no obligation as to outcome, shall meet to discuss other potential
opportunities on which they may collaborate.

	8.	 	INDEMNIFICATION AND INSURANCE.

	 	8.1	 	Indemnification by Impax. Impax shall indemnify, defend and hold Wyeth, and its
officers, directors, agents, employees, and Affiliates, harmless from any claims,
damages, actions, liabilities, losses, costs and expenses, including attorneys’ fees
incurred in defending against them, (hereinafter, “Claims’’) of a Third Party, which
arise out of or in connection with (i) the breach by Impax, any Permitted Subcontractor
or any of the Impax Personnel of any of Impax’s representations, warranties or
obligations under this Agreement; (ii) any claims or cause of action brought by or on
behalf of any of the Impax Personnel in connection with their employment (including,
without limitation, the reassignment of any Impax PSR or other employee pursuant to
Section 2.6.2 as a result of a product liability claim) or the performance of Impax’s
obligations under this Agreement; (iii) any negligent or wrongful act or omission of
Impax, any Permitted Subcontractor, any member of the Impax Sales Force or any other
Impax Personnel; or (iv) a failure to comply with the PDMA or other Applicable Laws in
its Detailing of the Product under this Agreement, including any off-label promotion of
the Product or mishandling or improper distribution of Samples,

37

 

	 	 	 	except to the extent that such Claims are subject to indemnification by Wyeth
pursuant to Section 8.2 below.
	 
	 	8.2	 	Indemnification by Wyeth. Wyeth shall indemnify, defend and hold Impax, its
officers, directors, agents, employees, and Affiliates, harmless from any Claims of a
Third Party, which arise out of or in connection with (i) the breach by Wyeth of any of
its representations, warranties or obligations under this Agreement, (ii) the
manufacture, sale, or use of the Product and the manufacture or use of the Promotional
Materials, (iii) infringement or misappropriation of any Third Party patent, trade
secret or trademark by the Product or the Wyeth Trademarks, or (iv) any negligent or
wrongful act or omission of Wyeth, except to the extent that such Claims are subject to
indemnification by Impax pursuant to Section 8.1 above.
	 
	 	8.3	 	Defense of Actions; Settlements. Any Party seeking to be indemnified hereunder
(the “Indemnified Party”) shall provide prompt written notice to the other Party (the
“Indemnifying Party”) no later than thirty (30) days after becoming aware of any actual
claim in respect of which indemnification may be sought; provided, however, that the
failure by the Indemnified Party to provide such prompt notice to the Indemnifying
Party shall only be a bar to recovering losses to the extent that the Indemnifying
Party is actually prejudiced and directly damaged by such failure. The Indemnified
Party shall permit the Indemnifying Party, at the Indemnifying Party’s expense, to
assume the complete defense of any Claims with a full authority to conduct such defense
and to settle or otherwise dispose of the Claims. The Indemnified Party will fully
cooperate in such defense and shall provide the Indemnifying Party with all information
in its possession and shall provide assistance necessary to enable the indemnifying
Party to defend such claims. The Indemnifying Party will not, except with the consent
of the Indemnified Party, not to be unreasonably withheld, consent to the entry of any
judgment or enter into any settlement which provides for any relief other than the
payment of monetary damage and which does not include as an unconditional term thereof
the giving by the claimant or plaintiff to the Indemnified Party a release from all
liability in respect thereof. The Indemnifying Party shall not be responsible for or
bound by any settlement made by the Indemnified Party without the prior written consent
of the Indemnifying Party.
	 
	 	8.4	 	Limitation of Liability. WITH RESPECT TO ANY CLAIM BY ONE PARTY AGAINST THE
OTHER ARISING OUT OF THE PERFORMANCE OR FAILURE OF PERFORMANCE OF THE OTHER PARTY UNDER
THIS AGREEMENT, THE PARTIES EXPRESSLY AGREE THAT THE LIABILITY OF SUCH PARTY TO THE
OTHER PARTY FOR SUCH BREACH SHALL BE LIMITED UNDER THIS AGREEMENT OR OTHERWISE AT LAW
OR EQUITY TO DIRECT DAMAGES ONLY AND IN NO EVENT SHALL A PARTY BE LIABLE FOR, PUNITIVE,
EXEMPLARY OR CONSEQUENTIAL DAMAGES. THE LIMITATIONS SET FORTH IN THIS SECTION 8.4 SHALL
NOT APPLY WITH RESPECT TO THE OBLIGATIONS OF EITHER PARTY UNDER ARTICLE 11 OR THEIR
OBLIGATION TO INDEMNIFY THE OTHER PARTY UNDER SECTIONS 8.1 OR 8.2 IN CONNECTION WITH A

38

 

	 	 	 	LIABILITY TO A THIRD PARTY OR IMPAX’S OBLIGATION TO INDEMNIFY WYETH UNDER SECTION
10.11.
	 

	 	8.5	 	Insurance Requirements. Impax shall obtain, and maintain during the Term, a
Commercial General Liability Insurance policy, including Products Liability Insurance,
on a claims made basis, with liability limits of no less than
XXXXX. Such insurance policy shall be procured
from insurers having an A.M. Best Rating of A-VII or better and shall name Wyeth as an
additional insured. Impax shall provide Wyeth, upon request, with a certificate of
insurance evidencing its liability coverage.

	9.	 	TERM AND TERMINATION.

	 	9.1	 	Term. This Agreement shall be effective as of the Effective Date and shall
continue in effect until the third anniversary of the Initiation Date, unless
terminated earlier as set forth in this Article 9 (the “Term”).
	 
	 	9.2	 	Termination for Cause. Without prejudice to any remedy or claim it may have
against the other Party for material breach or non-performance of this Agreement,
either Party (the “Non-Breaching Party”) may terminate this Agreement for cause in the
event that the other Party (the “Breaching Party”) fails to materially comply with or
perform any material provision of this Agreement (a “Breach”) in accordance with the
following provisions:

	 	(a)	 	The Non-Breaching Party shall notify the
Breaching Party of any such Breach in writing, specifying such Breach
in reasonable detail and stating such Non-Breaching Party’s intention
to terminate this Agreement for cause (the “Notification”).
	 
	 	(b)	 	In the event that the Breaching Party fails to
cure such Breach within a period of thirty (30) days following receipt
by the Breaching Party of such Notification, this Agreement shall
terminate upon written notice by the Non-Breaching Party.

	 	9.3	 	Termination by Wyeth. In the event Impax fails to meet the Quarterly Detail
Minimum during any period of three consecutive calendar months, Wyeth may terminate
this Agreement effective immediately on notice to Impax, such right to be exercisable
within a period of  XXXXX following the date on which Wyeth receives from
Impax the report due under Section 4.2 that discloses such failure.

	 

	 	9.4	 	Termination without Cause by Impax. Impax shall have the right to terminate
this Agreement at any time, without cause, upon no less than XXXXX
 prior
written notice to Wyeth.

	 
	 	9.5	 	Effect of Termination. Upon any termination or expiration of this Agreement,
Impax will immediately cease any and all Detailing of the Product and Impax will
cooperate with Wyeth in the collection and return to Wyeth of all promotional

39

 

	 	 	 	materials, items and literature, Samples, and other sales or sales training
materials in the possession of, or under the control of, Impax, Impax’s Permitted
Subcontractor(s), and/or any of the Impax Personnel as promptly as practicable after
the date thereof. Additionally, in the event this Agreement is terminated pursuant
to this Article 9, Impax shall be due no compensation under Sections 3.1 or 3.4 or
under any other provision of this Agreement for any activity conducted by Impax
after the effective date of such termination. Except as expressly provided otherwise
in this Section 9.5 or any other provision of this Agreement, termination of this
Agreement shall be without prejudice to (a) any remedies which any Party may then or
thereafter have hereunder or at law, (b) Impax’s right to receive any amounts
accrued under this Agreement prior to the effective date of termination but which
are unpaid or become payable thereafter and (c) either Party’s right to obtain
performance of any obligation provided for in this Agreement which shall survive
termination.
	 
	 	9.6	 	Survival of Certain Provisions. The provisions of this Agreement set forth in
Articles 1 (to the extent definitions are embodied in the following Articles and
Sections), 5, 8, 11 and 12 and Sections 2.6.13, 2.9, 2.10, 4.1, 4.2, 6.1-6.7, 9.6 and
10.11, to the extent applicable, and any remedies for the breach thereof, shall survive
the expiration or any termination of this Agreement.

	10.	 	SAMPLES.

	 	10.1	 	Provision of Samples. Wyeth shall use Commercially Reasonable Efforts to make
available to Impax Samples of the Product for use in Promoting the Product to
Neurologists as provided in Section 2.7.8 and as described in this Article 10. Subject
to availability of Samples, Wyeth shall provide Samples to Impax
XXXXX.

	 

	 	10.2	 	Shipping and Distribution of Samples. Wyeth shall send Samples to Impax, on a
periodic basis, such quantities of Samples of the Product as Wyeth shall reasonably
determine, to a single location within the Territory designated by Impax. Impax shall
further distribute such Samples, in the case of the Sample Carry Program described in
Section 10.4 below, to the Impax Sales Force and shall cause the Samples to be
distributed to Neurologists in accordance with good business practices, strict first to
expire/first-out inventory practices and the applicable Sales Call Plan (to the extent
such Sales Call Plan addresses the distribution of Samples); provided, however, that
XXXXX. The storage by Impax, Permitted Subcontractor(s),
and any of the Impax Personnel of such Samples shall be at Impax’s expense and Impax
shall be responsible for storing such Samples or causing such Samples to be stored
under environmental conditions that assure the integrity of the Product in accordance
with its labeled storage conditions and with adequate security to maintain the

40

 

	 	 	 	integrity and usability of such Samples. All Samples which are in the possession of
Impax, Permitted Subcontractor(s) or the Impax Personnel and which are undistributed
prior to three months prior to their expiration date shall be returned by Impax, at
Impax’s expense, to Impax’s or such Permitted Subcontractor’s preferred destruction
vendor reasonably agreeable to Wyeth. Destruction of expired Samples shall be at
Wyeth’s expense, provided, however, that if Impax has not adhered to first to
expire/first out inventory practices, such destruction shall be at Impax’s expense.
Destruction of Samples which are returned as the result of a recall shall, as
between Impax and Wyeth, be at Wyeth’s expense, provided however, that if the Sample
recall is the result of Impax’s or its Permitted Subcontractor(s)’ omission or
commission, such expense shall be Impax’s responsibility.
	 
	 	10.3	 	Compliance with PDMA.

	 	10.3.1	 	Designation as Authorized Distributor. Impax and Impax’s Permitted
Subcontractor(s) shall be an Authorized Distributor of Record solely for the
Product for purposes of the requirements of the Prescription Drug Marketing Act
of 1987 (“PDMA”) and shall comply with the PDMA, FDA regulations and applicable
state law requirements regarding the Marketing, sale and distribution of the
Product, including but not limited to applicable wholesale drug distribution
licensing guidelines and requirements. Impax and Impax’s Permitted
Subcontractor(s) shall indicate that it is a Wyeth Authorized Distributor
solely for the Products on Sample Receipt Forms and Sample Request Forms, if
any. Impax and Impax’s Permitted Subcontractor(s) shall not attempt to source,
purchase, trade, exchange or otherwise obtain Wyeth products or Products from
entities other than Wyeth and shall not represent to others that its Authorized
Distributor status for any product other than with the Products.
	 
	 	10.3.2	 	Compliance with PDMA. Impax shall take all steps necessary to ensure that its
Permitted Subcontractor(s), each member of the Impax Sales Force and all other
Impax Personnel comply with the requirements of the PDMA, all regulations
promulgated thereunder, and each State’s companion PDMA statutes and
regulations which relate to the distribution of samples of a prescription drug
product utilizing the Sample Carry Program set forth below in Sections 10.4.
	 
	 	10.3.3	 	Compliance with Company Procedures. Impax shall take all steps necessary to
ensure that Impax’s Permitted Subcontractor(s), each member of the Impax Sales
Force and all other Impax Personnel comply with all Impax rules, policies and
standard operating procedures for product sampling utilizing the Sample Carry
Program as more specifically outlined below in Sections 10.4.

41

 

	 	10.4	 	Sample Carry Program. Impax and Impax’s Permitted Subcontractor(s) shall
implement the following program for samples (“Sample Carry Program”) that includes the
following elements and shall operate such program in accordance with Applicable Law and
regulations and its company standard operating procedures for product sampling.

	 	10.4.1	 	Impax and Impax’s Permitted Subcontractor(s) shall receive sample shipments
from Wyeth at its licensed facility and immediately upon deliver of the
Products, to examine the Products to determine and confirm the quantities
delivered and that the Products are not damaged. If Impax or Impax’s Permitted
Subcontractor(s) determine that there are damages evident at the time of
delivery or shortages it shall make a notation on the delivery receipt and
immediately notify Wyeth Customer Service within seven (7) Business Days of
receipt of the Product at Impax or Impax’s Permitted Subcontractor(s)’ licensed
facility.
	 
	 	10.4.2	 	Impax and Impax’s Permitted Subcontractor(s) shall store, implement and
maintain appropriate inventory management practices to ensure that the product
is handled, transported and distributed in accordance with current Good
Manufacturing Practices and that the inventory of the Product is secured and
protected against theft, tampering, and diversion during storage and transport
to the Impax Sales Force.
	 
	 	10.4.3	 	Impax and Impax’s Permitted Subcontractor(s) shall distribute samples of the
Product to the Impax PSRs in sufficient quantities to support the Sales Call
Plan, Impax and Impax’s Permitted Subcontractor(s) shall track sample
distributions to the Impax Sales Force by lot number, sufficient to permit the
tracking of Sample units to the point of a licensed practioner.
	 

	 	10.4.4	 	Each member of the Impax Sales Force shall (i) in accordance with the party’s
standard operating procedures, secure the samples of the Product against theft,
tampering, and diversion during storage and transport by such member of the
Impax Sales Force and (ii) carry in their automobile or on their person only
those quantities of samples of the Product that can be used during
XXXXX, provided that the Samples are stored in a controlled
temperature environment outside of normal detailing hours.

	 

	 	10.4.5	 	Prior to distribution of any samples of the Products by any Impax PSR, such
Impax PSR shall: (i) visually check the Product expiration date to ensure that
the sample has a reasonable dating period remaining; (ii) verify, in accordance
with its standard operating procedures for product sampling the
XXXXX Neurologist’s identity as a practitioner authorized by
Applicable Law to receive drug samples; (iii) confirm that Product packaging is
intact and includes the designation

42

 

	 	 	 	“sample” and package insert; (iv) obtain an executed sample request form
or electronic equivalent from such Neurologist in accordance with PDMA
requirements; and (v) confirm Product identity to be accurate by visual
inspection of the Product packaging, At the time of delivery, such Impax
PSR shall obtain a Sample Receipt Form (which may be electronic) from the
XXXXX Neurologist executed in accordance with the
requirements of the PDMA.

	 
	 	10.4.6	 	Impax and Impax’s Permitted Subcontractor(s) shall notify the FDA of
falsification of drug sample records, diversion, significant loss and theft of
drug samples according to its standard operating procedures and in compliance
with Applicable Laws. If the diversion, significant loss or theft involves
samples of the Product, Impax and Impax’s Permitted Subcontractor(s) shall
notify Wyeth by providing copies of all correspondence with the FDA regarding
the event within forty-eight (48) hours after delivery of the notification to
the FDA on the initial report and provide a copy of the draft follow-up report
to Wyeth twenty-four (24) hours prior to its submission to FDA.
	 

	 	10.4.7	 	Impax and Impax’s Permitted Subcontractor(s) shall provide Wyeth with monthly
drug accountability/inventory reports for each Impax PSR with respect to
samples of the Product within five (5) days after the end of each calendar
month. At least annually, Impax and Impax’s Permitted Subcontractor(s) shall
reconcile each Impax PSR’s quarterly or annual inventory with respect to
samples of the Product. In addition, Impax and Impax’s Permitted
Subcontractor(s) shall make drug accountability/inventory reports, information,
Sample Request and Sample Receipt Forms and any other records pertaining to
samples of the Products or matters relating to PDMA available to Wyeth within
XXXXX after a request from Wyeth for such information.

	 
	 	10.4.8	 	When an Impax PSR leaves the sales force of either Impax or Impax’s Permitted
Subcontractor(s) that is detailing or had detailed the Product, Impax and
Impax’s Permitted Subcontractor(s) shall conduct a “close-out” inventory of
carried samples of the Product in accordance with its standard operating
procedures and reconcile such close-out inventory.
	 
	 	10.4.9	 	Upon reasonable advance notice to Impax and Impax’s Permitted
Subcontractor(s) and not more than once during any Calendar Year, Wyeth shall
be entitled, at the expense of Wyeth, to conduct an inspection and audit of
Impax’s and Impax’s Permitted Subcontractor(s) inventory of samples of the
Products (including samples held by any Impax PSR or Impax’s Permitted
Subcontractor(s), documents, records, and policies and procedures to ensure
compliance with the provisions of the Section 10.4.

43

 

	 	10.4.10	 	Impax shall maintain and provide to Wyeth an updated list of full names and
addresses of each member of the Impax Sales Force as well as the address of the
site(s) where Samples are stored. Impax shall provide Wyeth, on a monthly
basis, notice of any changes to this list including any change in employment
status or change of address.

	 	10.5	 	Sampling Activity System Audit. Impax and Impax’s Permitted Subcontractor(s)
shall not conduct any sampling activity with respect to the Product until the Parties
agree that appropriate systems are in place with respect to such activity to ensure
compliance with Applicable Law and appropriate reporting. Impax and Impax’s Permitted
Subcontractor(s) shall each submit to audits by Wyeth or by an outside auditor hired by
Wyeth to assess Impax and Impax’s Permitted Subcontractor(s) standard operating
procedures and distribution operations with respect to its sampling activities, and its
compliance with respect thereto, prior to Wyeth making Samples available to Impax. Upon
request by Wyeth. Impax shall provide to Wyeth copies of a certificate of compliance
with PDMA, state registration certificate as a licensed distribution center and state
board of pharmacy inspection report, DEA inspection report or similar governmental
inspection report for any agent that Impax intends to use as a distribution facility
for handling of the Product. Impax understands that no samples shall be shipped until
such agent is verified by Wyeth to be in compliance with PDMA. Further, at any time
during the Term, Impax and Impax’s Permitted Subcontractor(s) shall each submit to
audits by Wyeth or by an outside auditor hired by Wyeth to assess Impax and Impax’s
Permitted Subcontractor(s) standard operating procedures and distribution operations
with respect its sampling activities, and its compliance with respect thereto. If Wyeth
has a concern with respect to the results of the sample audit, then Wyeth shall submit
its concerns in writing to Impax and Impax’s Permitted Subcontractor(s) for review and
discussion. The Parties shall work to resolve such concerns. If Impax is not able to
resolve any material concerns Wyeth has with respect to the Sample Audit of Impax, then
Wyeth shall have the right in its sole discretion, to immediately terminate Impax’s
right to sample under this Article 10 or terminate this Agreement pursuant to Section
9.2. For the sake of clarity, a Sample Audit shall not be deemed an audit pursuant to
Section 4.1. All documentation of Sample transactions in the possession of Impax
and/or Impax’s Permitted Subcontractor(s) shall be provide to Wyeth no later than sixty
(60) days after expiration or any termination of this Agreement.
	 
	 	10.6	 	Investigation, Corrective & Preventative Actions. Impax and Impax’s Permitted
Subcontractor(s) shall each maintain its own investigation, corrective and preventive
action program for the handling of samples of Product in accordance with its internal
policies and procedures, applicable to its Sample Carry Program.
	 
	 	10.7	 	Monitoring & Auditing Programs. Impax and Impax’s Permitted Subcontractor(s)
shall each maintain its own monitoring and auditing programs

44

 

	 	 	 	capable of detecting losses, potential diversion and falsification of records
related to samples of the Product.
	 
	 	10.8	 	Responsibility for Compliance. Impax and Impax’s Permitted Subcontractor(s)
shall each be responsible for its own compliance with Applicable Law with respect to
Product samples and shall bear its own cost relating to such compliance.
	 
	 	10.9	 	In-Transit Losses. Impax shall notify Wyeth immediately upon learning that any
Samples shipped by Wyeth to Impax have been lost or have not been received as
scheduled.
	 
	 	10.10	 	Improper Handling. Each Party shall notify the other Party immediately upon
learning information which could raise a suspicion that any of the subject Samples had
not been properly handled or had been handled in a manner prohibited by law. Impax
shall take all steps necessary to conduct a full investigation of any suspected
mishandling of any Samples in accordance with the procedures referenced in Section
10.6, and shall notify Wyeth of the results of each such investigation promptly upon
completion thereof. Additionally, upon Wyeth’s request, Impax shall take all steps
necessary to aid and support Wyeth in any investigation of any suspected mishandling of
any Samples that Wyeth may elect to conduct.
	 
	 	10.11	 	Indemnity for Failure to Comply. In the event that Impax or any Impax
Personnel fail to comply or cause Wyeth to fail to comply with applicable legal
requirements and as a direct result a penalty(ies) is assessed against Wyeth or any of
its Affiliates or employees, then Impax shall hold harmless and indemnify Wyeth, its
Affiliates or its employees from any such civil or criminal penalty or other damages or
losses related thereto, including reasonable attorneys’ fees, costs and expenses
	 
	 	10.12	 	Additional Requirements.

	 	10.12.1	 	Pursuant to Section 2.6.13, Impax and its Permitted Subcontractor(s) shall
exchange with Wyeth data to enable the Parties to produce accurate and timely
reports and analysis of Impax’s Detailing and Sample distribution activities.
Data requirements, file formats and frequency of exchange shall be as
determined by Wyeth.
	 
	 	10.12.2	 	In the event of a request by FDA to Wyeth for any of the foregoing
information, Impax shall, immediately upon request from Wyeth, provide such
information to Wyeth’s Regulatory Affairs Department for submission to FDA.
Such information shall only be used by Wyeth to submit to FDA pursuant to 21
U.S.C.A. §353(d). Impax acknowledges Wyeth’s obligation to provide such
information to FDA within forty eight (48) hours of FDA’s request.

45

 

	 	10.12.3	 	Wyeth shall not initiate any direct communication between Wyeth and any
Impax PSR regarding the Promotion of the Product without the prior approval of
Impax, which shall not be unreasonably withheld or delayed.
	 
	 	10.12.4	 	Neither Party shall recruit or attempt to recruit any employee of the other
Party or any agent of the other Party (including, in the case of Impax, any
Permitted Subcontractor) who is engaged in performing activities under this
Agreement, unless such employee resigns without solicitation from the Party, is
terminated by the other Party or is responding to a general solicitation to the
public, general advertising or untargeted advertisements for employment

	11.	 	CONFIDENTIALITY.

	 	11.1	 	Nondisclosure and Nonuse Obligations. Each of Impax and Wyeth shall use
Confidential Information of the Disclosing Party only in accordance with and as
expressly Permitted by this Agreement and shall not disclose to any Third Party (except
as expressly provided in Section 11.2) any Confidential Information of the Disclosing
Party, in each case without the prior written consent of the Disclosing Party, which
consent may be provided or withheld in the Disclosing Party’s sole discretion. The
foregoing obligations shall survive the expiration or earlier termination of this
Agreement for a period of ten (10) years. The foregoing non-disclosure and non-use
obligations shall not apply to specific Confidential Information of a Disclosing Party
that the Receiving Party can demonstrate: (i) is known by the Receiving Party at the
time of its receipt other than through a prior disclosure by the Disclosing Party, as
documented by business records; (ii) is at the time of disclosure or thereafter becomes
published or otherwise part of the public domain without breach of this Agreement by
the Receiving Party; (iii) is subsequently disclosed to the Receiving Party by a Third
Party who has the right to make such disclosure not in confidence; (iv) is developed by
the Receiving Party independently of access to or use of any Confidential Information
received from the Disclosing Party and such independent development can be documented
by the Receiving Party; or (v) is required by law, regulation, rule, act or order of
any governmental authority or agency to be disclosed by the Receiving Party to a Third
Party, provided that to the extent practicable notice is promptly delivered to the
Disclosing Party and the Receiving Party agrees to reasonably assist the Disclosing
Party in order to provide an opportunity to seek a protective order or other similar
order with respect to such Confidential Information and thereafter the Receiving Party
discloses to the requesting entity only the minimum Confidential Information required
to be disclosed in order to comply with the request, whether or not a protective order
or other similar order is obtained by the Disclosing Party.
	 
	 	11.2	 	Permitted Disclosures. The Receiving Party may disclose specific Confidential
Information of the Disclosing Party to its (and, with respect to Wyeth, Wyeth’s
Affiliate’s, or, with respect to Impax, Impax’s Permitted Subcontractor’s)

46

 

	 	 	 	employees, consultants or professional advisors, only to the extent reasonably
required to accomplish the purposes of this Agreement and only if the Receiving
Party obtains prior written agreement from such employees, consultants and
professional advisors (other than legal counsel who are otherwise required to
maintain confidentiality) to hold in confidence and not make use of such
Confidential Information for any purpose other than those permitted by this
Agreement. The Receiving Party will use at least the same standard of care (but in
no event less than a reasonable standard of care) as it uses to protect its own
proprietary or confidential information of a similar nature to ensure that such
employees, agents, consultants or suppliers do not disclose or make any unauthorized
use of the Confidential Information of the Disclosing Party. Additionally, a
Receiving Party may use or disclose specific Confidential Information of the
Disclosing Party to the extent it is necessary to do so to take action against the
Receiving Party to enforce its rights under this Agreement.
	 
	 	11.3	 	Return of Confidential Information. Upon expiration or earlier termination of
this Agreement for any reason, the Receiving Party, upon receipt of a written request
from the Disclosing Party, shall return to the Disclosing Party all copies of the
Confidential Information received from the Disclosing Party hereunder, provided,
however, that the Receiving Party’s legal counsel may retain one copy of such
Confidential Information in a secure location solely for purposes of determining the
Receiving Party’s continuing obligations under this Article 11.
	 
	 	11.4	 	Disclosure of Agreement. The Parties agree that, except as expressly provided
herein, neither Party shall disclose to any Third Party the terms and conditions of
this Agreement. Subject to the provisions of this Section 11.4, either Party may
disclose this Agreement and the terms and conditions thereof to (i) such Party’s
auditors in connection with such auditors’ audit of such Party’s financial statements;
(ii) to such Party’s legal counsel and financial advisors; (iii) to any permitted
assignee in connection with a permitted assignment by such Party and/or (iv) as
required by law, regulation, rule, act or order of any governmental authority or agency
to be disclosed, provided that to the extent practicable notice is promptly delivered
to the other Party and the disclosing Party seeks, and to allows the other Party to
seek, a protective order or other similar order with respect to any information to be
disclosed and that the disclosing Party discloses to the requesting entity only the
minimum information required to be disclosed in order to comply with the request,
whether or not a protective order or other similar order is obtained. Either Party may
make an announcement disclosing entry into this Agreement, with the prior approval of
the other Party, not to be unreasonably withheld or delayed.
	 
	 	11.5	 	Equitable Relief. The Parties acknowledge and agree that the restrictions set
forth in Section 11.1 are reasonable and necessary to protect the legitimate interests
of the Parties and that any material breach of Section 11.1 may result in irreparable
injury to the other Party for which there would be no adequate remedy at law. In the
event of an uncured material breach of Section 11.1 by a Party, the other Party shall
be authorized and entitled to seek from any court of competent

47

 

	 	 	 	jurisdiction injunctive relief, whether preliminary or permanent or specific
performance and the breaching Party agrees to waive any requirement that the
non-breaching Party post a bond or other security as a condition for obtaining any
such relief. Nothing in this Section 11.5 is intended, or shall be construed, to
limit the Parties’ rights to equitable relief or any other remedy for a breach of
any provision of this Agreement.

	12.	 	MISCELLANEOUS

	 	12.1	 	Force Majeure. Neither Party shall be liable to the other for delays in
delivery of Product or failure to perform any other provision of this Agreement if such
failure or delay results from an act of God, war conditions, sabotage, governmental
regulations or actions, embargo, fire, strike, labor trouble or any other cause beyond
the affected Party’s reasonable control. Upon the occurrence of any such event which
results or will result in failure or delay to perform hereunder as described above, the
Party whose performance is hereby prevented or delayed shall immediately give notice of
such occurrence and the effect and/or anticipated effect of such occurrence on the
performance of such Party to the other Party. The Party whose performance is so
affected shall use Commercially Reasonable Efforts to minimize disruptions in
performance and to resume full performance hereunder as soon as possible under the
circumstances.
	 
	 	12.2	 	Severability. If any provision of this Agreement or the application thereof to
any Party or circumstance will, to any extent, be held to be invalid or unenforceable,
then (i) the remainder of this Agreement, or the application of such provision to
Parties or circumstances other than those as to which it is held invalid or
unenforceable, will not be affected thereby and each provision of this Agreement will
be valid and be enforced to the fullest extent permitted by law, and (ii) the Parties
covenant and agree to renegotiate any such provision in good faith in order to provide
a reasonably acceptable alternative to such provision or the application thereof that
is invalid or unenforceable, it being the intent of the Parties that the basic purposes
and business intent of this Agreement are to be effectuated, with the consequence that
this Agreement shall terminate in full if the Parties are unable to renegotiate and
agree on such provision.
	 
	 	12.3	 	Assignability. Impax shall not assign, including by operation of law, this
Agreement or any of its rights or obligations hereunder to any Person without the prior
written consent of Wyeth, which consent may be provided or withheld in Wyeth’s sole
discretion, provided, however, that Impax may assign this Agreement and all of its
rights and obligations hereunder (a) to a Third Party successor in interest to all or
substantially all of the business of the Impax Pharmaceuticals division or (b) to any
of Impax’s Affiliates, provided, however, that any such assignee under (a) or (b) above
XXXXX. Any such permitted assignment shall not relieve Impax of any of its
responsibilities for performance of its obligations under this Agreement. Any
assignment attempted in contravention of this Section 12.3 shall be void and
unenforceable. For the

48

 

	 	 	 	avoidance of doubt, Wyeth may assign this Agreement and its rights and obligations
hereunder without the consent of Impax.
	 
	 	12.4	 	Notices. All notices given under this Agreement shall be in writing and
delivered by hand or sent by nationally recognized overnight delivery service, prepaid
registered or certified air mail, or by facsimile confirmed by prepaid first class,
registered or certified mail letter, and shall be deemed to have been properly served
to the addressee upon receipt of such written communication, Notices to Wyeth shall be
sent to: Wyeth Pharmaceuticals 500 Arcola Road Collegeville, Pennsylvania 19426 Attn:
Senior Vice President, Corporate Business Development Fax: (484) 865-6476 with a copy
to: Wyeth 5 Giralda Farms Madison, New Jersey 07940 Attn: General Counsel Fax: (973)
660-7156 Notices to Impax shall be sent to: Impax Laboratories, Inc. 30831 Huntwood
Avenue Hayward, CA 94544 Attn: President, Impax Pharmaceuticals Fax: (510) 471-1595
with a copy to: Impax Laboratories, Inc. 30831 Huntwood Avenue Hayward, CA 94544 Attn:
Legal Department Fax: (510) 476-2092. In the event that either Party changes its
address, such Party shall promptly notify and update the other Party in writing as to
such change.
	 
	 	12.5	 	Governing Law; Jurisdiction. This Agreement is subject to and governed by the
laws of the State of New York, excluding its conflict of laws provisions. Each of the
Parties hereby submits to the exclusive general jurisdiction of the courts of the State
of Delaware and the courts of the United States of America for the District of Delaware
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 irrevocably waives (i) any defense of
inconvenient forum to the maintenance of any such action or proceeding and (ii) its
right to a jury trial.
	 
	 	12.6	 	Dispute Resolution. In the event of the occurrence of a dispute, either Party
may, by written notice to the other Party, have such dispute referred to their
respective officers (designated below) or their successors or designees for attempted
resolution by good faith negotiations within thirty (30) days after such notice is
received. Said designated officers are as follows: For Wyeth: Wyeth Pharmaceuticals
President, U.S., Pharmaceuticals and Women’s Health Care For Impax: President, Impax
Pharmaceuticals. In the event the designated officers are not able to resolve such
dispute through good faith negotiations within such thirty (30) day period, either
Party may pursue any legal or equitable remedies available to it by filing a claim in
the state or federal courts designated in Section 12.5. Notwithstanding the foregoing,
nothing in this Section 12.6 shall prohibit a Party from seeking temporary or
injunctive relief from any state or federal court pending the resolution of a dispute
in accordance with the provisions of this Section 12.6.
	 
	 	12.7	 	No Waiver. The failure of either Party to require performance by the other
Party of any of that other Party’s obligations hereunder shall in no manner affect the
right of such Party to enforce the same at a later time. No waiver by any Party of

49

 

	 	 	 	any condition, or of the breach of any provision, term, representation or warranty
contained in this Agreement, whether by conduct or otherwise, in any one or more
instances, shall be deemed to be or construed as a further or continuing waiver of
any such condition or breach, or of any other condition or of the breach of any
other provision, term, representation or warranty hereof.
	 
	 	12.8	 	Headings; Defined Terms. The headings and captions used in this Agreement are
solely for the convenience of reference and shall not affect its interpretation. The
term “including” means “including, without limitation,” and “herein”, “hereof’, and
“hereunder” refer to this Agreement as a whole. The word “will” shall be construed to
have the same meaning and effect as the word “shall”. All references herein to
Articles, Sections, Exhibits or Schedules shall be construed to refer to Articles,
Sections, Exhibits and Schedules of this Agreement, and references to this Agreement
include all Exhibits and Schedules hereto.
	 
	 	12.9	 	Counterparts. This Agreement may be executed in one or more counterparts each
of which shall be an original and all of which shall constitute together the same
document. Facsimile execution and delivery of this Agreement by either Party shall
constitute a legal, valid and binding execution and delivery of this Agreement.
	 

	 	12.10	 	Entire Agreement; Amendments. This Agreement (including all of the attached
Exhibits), and all the covenants, promises, agreements, warranties, representations,
conditions and understandings contained herein and therein, sets forth the complete,
final and exclusive agreement between the Parties with respect to the subject matter
hereof and supersedes and terminates all prior and contemporaneous agreements and
understandings between the Parties, whether oral or in writing, including the
XXXXX, with respect to the subject matter
hereof. There are no covenants, promises, agreements, warranties, representations,
conditions or understandings, either oral or written, between the Parties with respect
to the subject matter of this Agreement other than as are set forth in this Agreement.
No subsequent alteration, amendment, change, waiver or addition to this Agreement shall
be binding upon the Parties unless reduced to writing and signed by an authorized
officer of each Party. No understanding, agreement, representation or promise, not
explicitly set forth herein, has been relied on by either Party in deciding to execute
this Agreement. Notwithstanding the foregoing, this Agreement shall not relieve either
Party of any existing obligation under
XXXXX.

	 
	 	12.11	 	Further Actions. Each Party agrees to execute, acknowledge and deliver such
further instruments, and to do all other acts, as may be necessary or appropriate in
order to carry out the purposes and intent of this Agreement.

[Remainder of page intentionally left blank]

50

 

     IN WITNESS WHEREOF, the Parties hereto have caused this Copromotion Agreement to be executed
by their duly authorized officers as of the Effective Date.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	IMPAX LABORATORIES, INC.	 	 	 	WYETH, acting through its Wyeth

Pharmaceuticals Division	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Larry Hsu	 	 	 	By:	 	/s/ Gregory Norden	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	Larry Hsu
	 	 	 	 	 	Name:
	 	Gregory Norden	 	 
	 

	 	Title:
	 	President & CEO
	 	 	 	 	 	Title:
	 	Senior Vice President and CFO, Wyeth	 	 

51

 

SCHEDULE 1.79

Sample Receipt Forms

     Sample Receipt Forms utilized by Impax for distribution of Samples under this Agreement shall
contain the following information:

	                                                       
	 	 	 	XXXXX
	                                                        

 

 

SCHEDULE 1.94

Wyeth Sales Training Program for the Initial Product

     XXXXX.

 

 

Exhibit A to Schedule 1.94

	 	 	 	 	 	 	 	 	 	 	 	 	 
	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX	 	XXXXX
	þ
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	XXXXX:
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 

	 	XXXXX:
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 

	 	XXXXX:
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 

	 	XXXXX:
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 

	 	XXXXX:
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 

	 	XXXXX:
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 

	 	XXXXX:
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 

	 	XXXXX:
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 

	 	XXXXX:
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 

	 	XXXXX:
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 

	 	XXXXX:
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 

	 	XXXXX:
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 

	 	XXXXX:
	 	XXXXX
	 	XXXXX
	 	 	 	XXXXX
	 	XXXXX
	 

	 	XXXXX:
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 

	 	XXXXX:
	 	XXXXX
	 	XXXXX
	 	 	 	XXXXX
	 	XXXXX
	 

	 	XXXXX:
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 

	 	XXXXX:
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 

	 	XXXXX:
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 

	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 

	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 

	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 

	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX
	 	XXXXX

2

 

SCHEDULE 3.4

Sample Calculation of Incentive Fee

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	XXXXX	 	XXXXX	 	XXXXX
	XXXXX 

	 	 	XXXXX
	 	 	 	XXXXX	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	XXXXX 

	 	 	XXXXX	 	 	 	XXXXX	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	XXXXX 

	 	 	XXXXX
	%	 	 	XXXXX
	%	 	 	XXXXX	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	XXXXX 

	 	 	XXXXX
	 	 	 	XXXXX	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	XXXXX 

	 	 	XXXXX
	 	 	 	XXXXX	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	XXXXX 

	 	 	XXXXX
	%	 	 	XXXXX
	%	 	 	XXXXX	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	
XXXXX 

	 	 	 	 	 	 	 	 	 	 	XXXXX	 
	 
	
XXXXX

	 	 	 	 	 	 	 	 	 	 	XXXXX	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	XXXXX 

	 	 	 	 	 	 	 	 	 	$	XXXXX	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	XXXXX 

	 	 	 	 	 	 	 	 	 	 	XXXXX	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	XXXXX 

	 	 	 	 	 	 	 	 	 	$	XXXXX	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	
XXXXX

	 	 	 	 	 	 	 	 	 	$	XXXXX	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	XXXXX

	 	 	 	 	 	 	 	 	 	$	XXXXX	 

XXXXX

XXXXX

3

 

4

 

Confidential

SCHEDULE 6.4.6

Wyeth Form 1747(b)

SEE ATTACHED

XXXXX

5

 

Confidential

SCHEDULE 6.6

Wyeth Form 8202

SEE ATTACHED

XXXXX

14

 

SCHEDULE 7.3

Initial Product Patents

     U.S. Patent XXXXX

     U.S. Patent XXXXX

16exv10w1

Exhibit 10.1

EMPLOYMENT AGREEMENT

Amended and Restated as of November 11, 2008

     EMPLOYMENT AGREEMENT (the “Agreement”) dated as of November 11, 2008 by and between
K-TRON INTERNATIONAL, INC., a New Jersey corporation (“K-Tron”), and EDWARD B. CLOUES, II,
a resident of Pennsylvania (the “Employee”).

     K-Tron and the Employee are parties to an Employment Agreement dated as of October 6, 1997, as
amended (the “Existing Agreement”).

     K-Tron and the Employee desire to amend the Existing Agreement in various respects, including
to comply with section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree that the
Existing Agreement is amended and restated as follows:

     1. Employment. K-Tron agrees to employ the Employee, and the Employee accepts such
employment and agrees to perform his duties and responsibilities hereunder, in accordance with the
terms, conditions and other provisions hereinafter set forth.

     1.1 Employment Term. The employment term (the “Employment Term”) under the
Existing Agreement commenced on January 5, 1998. Under this Agreement, the Employment Term shall
continue until terminated in accordance with Section 8 or 9 hereof, provided that if a Change of
Control (as defined in Section 9.1(a) hereof) occurs, the Employment Term will end on the first to
occur of (i) the date that is one year after the Change of Control or (ii) March 15 following the
end of the calendar year in which the Change of Control occurs, unless earlier terminated in
accordance with Section 8 or 9 hereof.

     1.2 Duties and Responsibilities. During the Employment Term, the Employee shall serve
as the Chairman of the Board and Chief Executive Officer of K-Tron, and he shall perform all duties
and accept all responsibilities incident to such positions.

     1.3 Extent of Service. During the Employment Term, the Employee shall use his
reasonable best efforts in the performance of his duties and responsibilities hereunder, and he
shall devote such time and attention thereto as may be necessary to perform such duties and
responsibilities, it being understood that substantially all of his business time shall be devoted
to K-Tron and to other activities of a type that might typically be performed by the chairman and
chief executive officer of a company such as K-Tron. Without limiting other activities in which the
Employee may be or become involved, it is recognized by K-Tron that the Employee shall continue as
the non-executive Chairman of the Board of AMREP Corporation.

     1.4 Compensation and Benefits.

          (a) For all the services rendered during the Employment Term by the Employee hereunder, K-Tron
shall pay the Employee a base salary (“Base Salary”) at an annual

 

 

rate not less than the rate in effect immediately before the date of this amendment and restatement
of the Existing Agreement, which shall be payable in installments at such times as K-Tron
customarily pays its other senior level executives (but in no event less often than monthly). Such
Base Salary may be increased from time to time during the Employment Term in the sole discretion of
the Board of Directors of K-Tron (the “K-Tron Board”) or any duly authorized committee
thereof, and any such increased salary shall thereafter be the Employee’s new Base Salary for all
purposes of this Agreement. The Employee shall also be entitled to receive bonus payments in the
sole discretion of the K-Tron Board or any duly authorized committee thereof.

          (b) In addition to such annual salary and bonus payments (if any), the Employee shall be
entitled to a car allowance (“Car Allowance”) of not less than $12,000 annually, which
shall be earned in bi-weekly installments. The Employee shall also be entitled to an annual
physical examination by a physician selected by the Employee and annual paid vacation of six weeks
per year, and he shall also be entitled to participate in such employee benefit plans of K-Tron as
may exist from time to time on the same basis as other senior level executives of K-Tron.

          (c) In addition to the foregoing, the Employee shall be reimbursed for the premiums which he
pays for (i) a term life insurance policy having a death benefit of $1,000,000, which shall be in
addition to any group term life insurance which the Employee may be required to accept or may
receive under any K-Tron group plan, and (ii) disability insurance providing coverage equal to
$30,000 per month (or a lesser amount, if the Employee so agrees) through age 70, and he shall also
be reimbursed for the estimated federal, state and local income and FICA taxes to be incurred on
such reimbursements. The definition of disability shall be that the Employee is unable to perform
his duties as the chief executive officer of K-Tron. K-Tron and the Employee acknowledge that the
term life and disability coverages under this Section 1.4(c) are satisfied by the term life
insurance policy which the Employee has purchased from AXA Equitable and the QQ series Disability
Income Policy which the Employee has purchased from Northwestern Mutual Life.

     1.5 Location. Without his express written consent, the Employee shall not be
obligated to relocate outside of the greater Philadelphia metropolitan area.

     2. Reimbursement of Expenses. K-Tron shall reimburse the Employee for all ordinary
and necessary out-of-pocket business expenses incurred by him in connection with the discharge of
his duties and responsibilities hereunder in accordance with K-Tron’s expense approval procedures
then in effect and upon presentation by the Employee of an itemized account of such expenses.

     3. Developments. The Employee shall disclose fully, promptly and in writing to K-Tron
any and all inventions, discoveries, improvements, modifications and the like, whether patentable
or not, which he conceives, makes or develops, solely or jointly with others, while employed by
K-Tron and which (a) relate to the business, work or activities of K-Tron or any of its
subsidiaries (K-Tron and its subsidiaries as they may exist from time to time are collectively
referred to herein as the “K-Tron Group”, and each is sometimes individually referred to
herein as a “member” of the K-Tron Group) or (b) result from or are suggested by the

 - 2 - 

 

carrying out of his duties hereunder, or from or by any information which he may receive while
employed by K-Tron. The Employee hereby assigns, transfers and conveys to K-Tron or its designee
all of his right, title and interest in and to any and all such inventions, discoveries,
improvements, modifications and the like and agrees to take all such actions as may be requested by
K-Tron at any time with respect to any such invention, discovery, improvement, modification or the
like to confirm or evidence such assignment, transfer and conveyance. Furthermore, at any time and
from time to time, upon the request of K-Tron, the Employee shall execute and deliver to K-Tron, or
to another member of the K-Tron Group designated by K-Tron, any and all instruments, documents and
papers, give evidence and do any and all other acts which, in the opinion of counsel for K-Tron,
are or may be necessary or desirable to document such assignment, transfer and conveyance or to
enable K-Tron or such other member of the K-Tron Group to file and prosecute applications for and
to acquire, maintain and enforce any and all patents, trademark registrations or copyrights under
United States or foreign law with respect to any such inventions, discoveries, improvements,
modifications or the like or to obtain any extension, validation, reissue, continuance or renewal
of any such patent, trademark or copyright. K-Tron or such other member of the K-Tron Group shall
be responsible for the preparation of any such instruments, documents and papers and for the
prosecution of any such proceedings and shall reimburse the Employee for all reasonable expenses
incurred by him in compliance with the provisions of this Section 3.

     4. Confidential Information. The Employee acknowledges that, by reason of his
employment by K-Tron, he will have access to confidential information of the K-Tron Group,
including, without limitation, information and knowledge pertaining to business strategies,
financial performance, products, inventions, discoveries, improvements, innovations, designs,
ideas, trade secrets, proprietary information, manufacturing, packaging, advertising, distribution
and sales methods, customer and client lists and relationships between members of the K-Tron Group
and dealers, distributors, sales representatives, wholesalers, customers, clients, suppliers and
others who have business dealings with such members (“Confidential Information”). The
Employee acknowledges that such Confidential Information is a valuable and unique asset of K-Tron
and the other members of the K-Tron Group and covenants that, both during and after the Employment
Term, he will not disclose any such Confidential Information to any person, except in connection
with the performance of his duties and responsibilities hereunder, without the prior written
authorization of the K-Tron Board. The obligation of confidentiality imposed by this Section 4
shall not apply to information which appears in issued patents or printed publications, which
otherwise becomes generally known in the industry through no act of the Employee in breach of this
Agreement or which is required to be disclosed by court order or applicable law.

     5. Non-Competition.

          (a) During (i) the Employment Term and (ii) for (A) two years thereafter only in the event
that such Employment Term is terminated under Section 8.2 (Disability) or 8.5 (Cause) hereof or (B)
one year thereafter if the Employee terminates employment with K-Tron with or without giving any
required notice (but excluding any termination by the Employee which is a Termination upon a Change
of Control as defined in Section 9.1(c) hereof) or if the Employment Term is terminated by K-Tron
under Section 8.6 (Without Cause) hereof, the Employee shall not, unless acting as an employee
pursuant hereto or with the prior written consent of the K-Tron Board, directly or indirectly, own,
manage, operate,

 - 3 - 

 

finance, join, control or participate in the ownership, management, operation, financing or
control of, or be connected as an officer, director, employee, partner, principal, agent,
representative, consultant or otherwise with, or use or permit his name to be used in connection
with, any business or enterprise engaged in the business of designing, engineering, manufacturing,
marketing, selling or distributing feeding, pneumatic conveying or size reduction equipment, or in
any other business then engaged in by K-Tron or any other member of the K-Tron Group, within (i)
any state of the United States or the District of Columbia or (ii) any other country in which
K-Tron or any member of the K-Tron Group has engaged in any such business within the prior year;
provided, however, that notwithstanding the foregoing, the Employee shall not be prohibited from
acting in any capacity for or with respect to any such entity if the Employee is not involved in
any way with that part of the entity which is engaged in the competitive activity; and further
provided, that this provision shall not be construed to prohibit the passive ownership by the
Employee of not more than 1% of the equity of any entity which is engaged in any of the foregoing
businesses having a class of securities registered pursuant to the Securities Exchange Act of 1934,
as amended (the “Exchange Act”). In the event that the provisions of this Section 5(a)
should ever be adjudicated to exceed the time, geographic, product or other limitations permitted
by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such
jurisdiction to the maximum time, geographic, product or other limitations permitted by applicable
law.

          (b) Nothing in Section 5(a) above shall be construed to prohibit the Employee from being
connected as a partner, principal, shareholder, associate, special counsel, of counsel or otherwise
with another lawyer or a law firm, including Morgan, Lewis & Bockius LLP, which performs services
for clients engaged in any business or enterprise that is competitive with any business or
enterprise in which K-Tron or any member of the K-Tron Group is engaged, provided that the Employee
is not personally and knowingly involved in performing services for any such clients during the
period specified in Section 5(a) with respect to any part of their businesses that would be so
competitive. The parties further agree that, with respect to the confidentiality obligations of
Section 4 of this Agreement, the Employee’s knowledge of such confidential information shall not be
imputed to any other lawyer or law firm with which the Employee may be or become connected.

     6. No Solicitation. During (a) the Employment Term and (b) for (i) two years
thereafter only in the event that such Employment Term is terminated under Section 8.2 (Disability)
or 8.5 (Cause) hereof or (ii) one year thereafter if the Employee terminates employment with K-Tron
with or without giving any required notice (but excluding any termination by the Employee which is
a Termination upon a Change of Control as defined in Section 9.1(c) hereof) or if the Employment
Term is terminated by K-Tron under Section 8.6 (Without Cause) hereof, the Employee shall not,
unless acting as an employee pursuant hereto or with the prior written consent of the K-Tron Board,
(A) call on or solicit, either directly or indirectly, any person, firm, corporation or other
entity who or which is, or within two years prior thereto had been, a customer of any member of the
K-Tron Group, with respect to any matters involving the designing, engineering, manufacturing,
marketing, selling or distributing of feeding, pneumatic conveying or size reduction equipment or
involving any other business then engaged in by any member of the K-Tron Group, or (B) knowingly
solicit for employment any person who is an employee of any member of the K-Tron Group (or who was
such an employee within six months prior to any such termination).

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     7. Equitable Relief.

          (a) The Employee acknowledges that the restrictions contained in Sections 3, 4, 5 and 6 hereof
are, in view of the nature of the business of K-Tron and the other members of the K-Tron Group,
reasonable and necessary to protect the legitimate interests of the K-Tron Group, that K-Tron would
not have entered into this Agreement in the absence of such restrictions, that the business of the
K-Tron Group is international in scope and that any violation of any provision of those Sections
could result in irreparable injury to K-Tron and the other members of the K-Tron Group.

          (b) The Employee agrees that in the event of any violation of the restrictions referred to in
Section 7(a) above, K-Tron shall be entitled to preliminary and permanent injunctive relief,
without the necessity of posting a bond or proving actual damages, and to an equitable accounting
of all earnings, profits and other benefits arising from any such violation, which rights shall be
cumulative and in addition to any other rights or remedies to which K-Tron may be entitled.

          (c) The Employee irrevocably and unconditionally agrees that in the event of any violation of
the restrictions referred to in Section 7(a) above, an action may be commenced for preliminary and
permanent injunctive relief and other equitable relief in any federal or state court of competent
jurisdiction sitting in Gloucester or Camden County, New Jersey or in any other court of competent
jurisdiction. The Employee hereby waives, to the fullest extent permitted by law, any objection
that he may now or hereafter have to such jurisdiction or to the laying of the venue of any such
suit, action or proceeding brought in such a court and any claim that such suit, action or
proceeding has been brought in an inconvenient forum. The Employee agrees that effective service of
process may be made upon him by mail under the notice provisions contained in Section 14 hereof and
that all pleadings, notices and other papers may be served upon him in the same manner.

          (d) The non-competition and no solicitation provisions of Sections 5(a) and 6 above shall be
extended by any time period during which the Employee is in violation of any of such provisions.

          (e) The Employee may provide, and any member of the K-Tron Group may similarly provide, a copy
of Sections 3, 4, 5 and 6 of this Agreement to any business or enterprise (i) which the Employee
may directly or indirectly own, manage, operate, finance, join, control or participate in the
ownership, management, operation, financing or control of, or (ii) with which he may be connected
as an officer, director, employee, partner, principal, agent, representative, consultant or
otherwise, or in connection with which he may use or permit his name to be used; provided, however,
that this provision shall not apply in respect of Sections 5 and 6 of this Agreement after
expiration of the time periods set forth therein.

          (f) The Employee represents and acknowledges that (i) he has been advised by K-Tron to consult
his own legal counsel in respect of this Agreement and (ii) he has had full opportunity to do so.

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     8. Termination.

     8.1 By Employee. Except where a different time period may be specified in a
particular Section of this Agreement, the Employee may terminate the Employment Term effective upon
not less than 90 days prior written notice to K-Tron. Should the Employee elect to terminate the
Employment Term on this basis, K-Tron shall not have any liability or obligation to the Employee
hereunder after the date on which the Employment Term ends except for any earned but unpaid Base
Salary and Car Allowance, any unpaid bonus previously awarded by the K-Tron Board or any committee
thereof (an “Unpaid Awarded Bonus”) and any benefits or payments (excluding any severance
benefits or payments) payable to the Employee under any applicable formal policy or plan of K-Tron
which covers the Employee at the time of his termination, and also except as provided below with
respect to a Termination upon a Change of Control or as provided in Sections 8.4 and 8.7 hereof
with respect to a Good Reason (as defined below) termination.

     8.2 Partial or Total Disability. If in the good faith judgment of the K-Tron Board,
based upon the advice of two disinterested physicians, the Employee is unable to perform his duties
and responsibilities hereunder by reason of illness, injury or incapacity for six consecutive
months, or for six months during any 12 month period, during which time K-Tron shall continue to
compensate the Employee hereunder, the Employment Term may be terminated by K-Tron. In the event
the Employee is terminated for disability as aforesaid, he shall be entitled to receive a lump sum
amount equal to two years (“Disability Period”) of his then-annual Base Salary and Car
Allowance plus any Unpaid Awarded Bonus, provided that the lump sum Base Salary amount shall be
reduced by the present value of any payments that are expected to be made to the Employee during
the Disability Period under any applicable disability benefit programs, including Social Security
disability, worker’s compensation and disability retirement benefits. All amounts payable to the
Employee following a termination of employment on account of disability shall be paid to the
Employee within 30 days after his Termination Date (as defined in Section 9.1(b) hereof). Except
as provided above and in Section 8.8 hereof, and except for any earned but unpaid Base Salary and
Car Allowance and any benefits or payments (excluding any other severance benefits or payments)
payable to the Employee under any applicable formal policy or plan of K-Tron which covered the
Employee at the termination date of the Employment Term, K-Tron shall not have any other liability
or obligation to the Employee in the event of the termination of the Employment Term due to his
disability.

     8.3 Death. In the event that the Employee dies during the Employment Term, K-Tron
shall pay to his executors, administrators or personal representatives, as appropriate, an amount
equal to (i) his then-annual Base Salary which he would otherwise have earned for the month in
which he dies and for three months thereafter plus (ii) any Unpaid Awarded Bonus. The Employee’s
death benefit shall be paid in a lump sum payment within 30 days after his death. K-Tron shall not
have any other liability or obligation hereunder to the Employee’s executors, administrators,
personal representatives, heirs, assigns or any other person claiming under or through him, except
for any earned but unpaid Base Salary and Car Allowance and any benefits or other payments
(excluding any severance benefits or payments) payable to the Employee under any applicable formal
policy or plan of K-Tron which covered the Employee at the time of his death.

 - 6 - 

 

     8.4 For Good Reason. The Employment Term may be terminated at any time by the
Employee for the failure of K-Tron to observe or perform any of the material terms or provisions
hereof, provided that the Employee has given written notice of such failure to K-Tron and such
failure has continued for 30 days thereafter (“Good Reason”). In order for the Employee to
terminate employment for Good Reason, the Employee must provide written notice to K-Tron specifying
the event that constitutes Good Reason within 90 days of the initial occurrence of such event.
K-Tron shall have 30 days following the receipt of such notice in which to remedy such event. If
K-Tron does not remedy such event within such 30-day cure period, the Employee’s employment must
terminate within 60 days after the end of the 30-day cure period in order for the termination to be
on account of Good Reason.

     8.5 For Cause. The Employment Term may be terminated at any time by K-Tron, by action
taken in good faith by the K-Tron Board, for “Cause.” For purposes of this Agreement,
“Cause” shall mean the failure of the Employee to observe or perform (other than by reason
of illness, injury or incapacity) any of the material terms or provisions of this Agreement
provided that the Employee has been given written notice of such failure by the K-Tron Board and
such failure has continued for 30 days thereafter, conviction of a felony or other crime involving
moral turpitude, misappropriation of K-Tron funds, habitual insobriety, habitual substance abuse or
the commission of an act of dishonesty by the Employee resulting in or intended to result in
wrongful personal gain or enrichment at the expense of K-Tron. Upon such notice, K-Tron shall not
have any further liability or obligation to the Employee hereunder after the date of termination of
the Employment Term except for (i) any earned but unpaid Base Salary and Car Allowance accrued to
such date and any Unpaid Awarded Bonus, and (ii) any benefits or payments (excluding any severance
benefits or payments) payable to the Employee under any applicable formal policy or plan of K-Tron
which covers the Employee at that time.

     8.6 Without Cause. K-Tron, by action of the K-Tron Board, may terminate the
Employment Term without Cause upon not less than 30 days prior written notice to the Employee.

     8.7 Payment in the Event of Termination without Cause or for Good Reason. If K-Tron
terminates the Employee’s employment without Cause or the Employee terminates his employment for
Good Reason during the Employment Term, K-Tron shall pay to the Employee a lump sum amount equal to
200% of the Employee’s then-annual Base Salary and Car Allowance. The lump sum payment shall be
made upon the Employee’s Termination Date. Upon such payment, K-Tron shall not have any further
liability or obligation to the Employee hereunder after the date of termination of the Employment
Term except for (i) any earned but unpaid Base Salary and Car Allowance accrued to such date and
any Unpaid Awarded Bonus, (ii) any benefits or payments (excluding any other severance benefits or
payments) payable to the Employee under any applicable formal policy or plan of K-Tron which covers
the Employee at that time and (iii) the benefits provided under Section 8.8 hereof.

     8.8 Payment in Lieu of Health Coverage. Notwithstanding any other provision of this
Agreement, in the event of the termination of the Employment Term for partial or total disability
under Section 8.2 hereof, by the Employee for Good Reason under Section 8.4 hereof or by K-Tron
without Cause under Section 8.6 hereof, K-Tron shall pay the Employee a lump sum cash payment equal
to the cost that would be incurred by the Employee to continue

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medical and other health care benefits for the period following the Employee’s Termination
Date through the second anniversary of the Termination Date, less the cost paid by active K-Tron
employees for comparable coverage. The lump sum payment shall be paid within 30 days after the
Employee’s Termination Date. The cost of medical and other health care benefits shall be
calculated pursuant to the cost sharing arrangement relating to medical and other health care
benefits in effect between K-Tron and the Employee immediately before the Termination Date. K-Tron
shall also pay to the Employee an amount equal to the estimated federal, state and local income and
FICA taxes on the amount paid to the Employee under this Section 8.8, on the same payment date as
the lump sum payment described above.

     9. Special Compensation Provisions.

     9.1 Definitions. For purposes hereof, the following terms shall have the following
meanings unless the context clearly otherwise requires:

          (a) As used in this Section 9, a “Change of Control” shall be deemed to have occurred
if:

               (i) a liquidation or dissolution of K-Tron or the sale (excluding transfers to subsidiaries)
of all or a substantial majority of the assets of K-Tron or the K-Tron Group occurs;

               (ii) as a result of a tender offer, exchange offer, stock purchase (excluding a redemption
approved by the K-Tron Board which is not in connection with any of the other events mentioned in
this clause (ii)), other stock acquisition, merger, consolidation, recapitalization, reverse stock
split, sale or transfer of assets or other transaction, any person or group (as such terms are used
in and under Section 13(d) of the Exchange Act) other than the Employee or a group which includes
the Employee becomes the beneficial owner (as defined in Rule 13-d under the Exchange Act),
directly or indirectly, of securities of K-Tron representing more than 15% of the common stock of
K-Tron or the combined voting power of K-Tron’s then outstanding securities; or

               (iii) during any period of two consecutive years, individuals who, at the beginning of such
period, constitute the K-Tron Board cease for any reason to constitute at least a majority thereof,
unless the election, or the nomination for election by K-Tron’s shareholders, of at least
two-thirds of the directors who were not directors at the beginning of such period was approved by
a vote of at least two-thirds of the directors then still in office who were either directors at
the beginning of the period or who, in connection with their election or nomination, received the
foregoing two-thirds approval.

          (b) “Termination of Employment” means the termination of the Employee’s actual
employment relationship with K-Tron, which constitutes a separation from service under section 409A
of the Code, and “Termination Date” means the date of such termination.

          (c) “Termination upon a Change of Control” means a Termination of Employment that
occurs during the period beginning on the date of a Change of Control and

 - 8 - 

 

ending on the first to occur of (i) the date that is one year after the Change of Control or
(ii) March 1 following the end of the calendar year in which the Change of Control occurs, and is
either:

               (i) initiated by K-Tron or any successor thereto for any reason other than a valid Termination
of Employment permitted under any of Sections 8.2, 8.3 or 8.5 hereof; or

               (ii) initiated by the Employee in his sole discretion and without regard to the reason.

     9.2 Compensation upon Termination Involving a Change of Control. In the event of the
Employee’s Termination upon a Change of Control, K-Tron shall:

          (a) pay to the Employee in a single lump sum cash payment:

               (i) an amount equal to three times the Employee’s annual Base Salary and Car Allowance in
effect either immediately prior to the Termination Date or immediately prior to the Change of
Control, whichever is higher; and

               (ii) unless the Employee notifies K-Tron in writing that he intends to retain his options, an
amount in redemption of such options equal to the amount, if any, by which the aggregate exercise
price of all stock options held by the Employee under any K-Tron stock option or similar plan which
have an exercise price below the fair market value of the shares subject to such options (whether
or not such options are exercisable at the Termination Date) is less than the aggregate fair market
value of the shares of stock subject to such options, with all computations based upon the average
closing market price of a share of such stock for the five trading days immediately preceding the
Termination Date (or, if higher, the highest cash amount per share paid by the acquiror in
connection with any tender offer, stock purchase, other stock acquisition, merger, consolidation or
other event which constituted the applicable Change of Control);

          (b) pay to the Employee, in a single lump sum cash payment, an amount equal to the cost that
would be incurred by the Employee for medical and other health care benefits that were provided to
the Employee immediately prior to his Termination Date or immediately prior to the Change of
Control, whichever is higher, for the period following the Employee’s Termination Date through the
second anniversary of such Termination Date, less the cost paid by active K-Tron employees for
comparable coverage. The cost of medical and other health care benefits shall be calculated
pursuant to the cost sharing arrangement relating to such medical and other health care benefits in
effect between K-Tron and the Employee immediately before the applicable Termination Date or Change
of Control date. K-Tron shall also pay to the Employee an amount equal to the estimated federal,
state and local income and FICA taxes on the amount paid to the Employee under this Section 9.2(b),
with such amount being paid on the same date as the lump sum payment described above; and

          (c) pay to the Employee, in a single lump sum cash payment, an amount equal to the cost that
would be incurred by the Employee to continue his then existing

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life insurance and disability insurance coverages maintained under Section 1.4(c) above or
otherwise for the period following the Employee’s Termination Date through the second anniversary
of the Termination Date. The annual cost of such welfare benefits shall be calculated based on
K-Tron’s most recent annual premium cost or reimbursement cost with respect to the life insurance
and disability insurance coverages in effect for the Employee as of the Termination Date, less, in
the case of group term life insurance, the monthly premium charge that is paid by active K-Tron
senior executives for similar coverage, as in effect as of Employee’s Termination Date. K-Tron
shall also pay to the Employee an amount equal to the estimated federal, state and local income and
FICA taxes on the amount paid to the Employee under this Section 9.2(c), on the same payment date
as the lump sum payment described above.

     The lump sum payments described in this Section 9.2 shall be paid within five business days
after the Termination Date, but in no event later than March 15 following the end of the calendar
year in which the Change of Control occurs.

     In the event of the Employee’s Termination upon a Change of Control, the Employee shall
receive the benefits of this Section 9.2 in lieu of any other post-termination severance payments
to which he might otherwise be entitled under this Agreement on account of the termination of his
Employment Term. In addition, the Employee shall be entitled to receive within five business days
of the Termination Date any earned but unpaid Base Salary and Car Allowance accrued to the date of
such termination and any Unpaid Awarded Bonus, and thereafter the Employee shall also be entitled
to receive any additional or other benefits or payments (excluding any other severance benefits or
payments) payable to the Employee under any applicable formal policy or plan of K-Tron which
covered the Employee at the time of his termination.

     9.3 Enforcement. In the event that K-Tron shall fail or refuse to make payment of any
amount due the Employee under Section 9.2 above within the time described therein or to provide the
Employee any of the other benefits described in Section 9.2 above, K-Tron shall pay to the
Employee, in addition to the payment of any other sums provided in this Agreement:

          (a) interest, compounded quarterly, on any amount remaining unpaid from the date payment is
required under such Section 9.2 until paid to the Employee, at the rate from time to time announced
by Citibank N.A. (or any successor) as its “prime rate” plus 3%, each change in such rate to take
effect on the effective date of the change in such prime rate; and

          (b) on demand, the amount necessary to reimburse the Employee in full for all expenses
(including all attorneys’ fees and expenses) incurred by the Employee in enforcing any of the
obligations of K-Tron under Section 9.2.

     9.4 Certain Increase in Payments.

          (a) Anything in this Agreement to the contrary notwithstanding, in the event that it shall be
determined that any payment or distribution by K-Tron to or for the benefit of the Employee,
whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or
otherwise (the “Payment”), would constitute an “excess parachute payment”

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within the meaning of Section 280G of the Code, or any similar successor provision or statute,
the Employee shall be paid an additional amount (the “Gross-Up Payment”) such that the net
amount retained by the Employee after deduction of (i) any excise tax imposed under Section 4999 of
the Code, or any similar or successor provision, and (ii) all federal, state and local income, wage
and employment taxes and excise taxes imposed upon the Gross-Up Payment, shall be equal to the
Payment. For purposes of determining the amount of the Gross-Up Payment, the Employee shall be
deemed to pay federal income tax and employment taxes at the highest marginal rate of federal
income and employment taxation in the calendar year in which the Gross-Up Payment is to be made and
state and local taxes at the highest marginal rate of taxation in the state and locality of the
Employee’s residence on the Termination Date, net of the maximum reduction in federal income taxes
that may be obtained from the deduction of such state and local taxes.

          (b) All determinations to be made under this Section 9.4 shall be made by K-Tron’s independent
public accounting firm immediately prior to the Change of Control (the “Accounting Firm”),
which firm shall provide its determinations and supporting calculations to both K-Tron and the
Employee within 10 days of the Termination Date. Any such determination by the Accounting Firm
shall be binding upon K-Tron and the Employee. Within five days after the Accounting Firm’s
determination, K-Tron shall pay the Gross-Up Payment to or for the benefit of the Employee.

          (c) In the event that upon any audit by the Internal Revenue Service, or by any state or local
taxing authority, of the Payment or Gross-Up Payment, a change is finally determined to be required
in the amount of taxes paid by the Employee, appropriate adjustments shall be made under this
Agreement such that the net amount which is payable to the Employee after taking into account the
provisions of Section 4999 of the Code, or any similar or successor provision, shall reflect the
intent of the parties as expressed in subsection (a) above, in the manner determined by the
Accounting Firm.

          (d) All of the fees and expenses of the Accounting Firm in performing the determinations
referred to in subsections (b) and (c) above shall be borne solely by K-Tron. K-Tron agrees to
indemnify and hold harmless the Accounting Firm of and from any and all claims, damages and
expenses resulting from or relating to its determinations pursuant to subsections (b) and (c)
above, except for claims, damages or expenses resulting from the gross negligence or willful
misconduct of the Accounting Firm.

          (e) Any Gross-Up Payment shall be paid in any event no later than the date on which K-Tron
remits the related taxes to the taxing authorities, in accordance with section 409A of the Code.

     10. Survivorship. The respective rights and obligations of the parties under this
Agreement shall survive any termination of the Employee’s employment to the extent necessary for
the intended preservation of such rights and obligations.

     11. Mitigation. The Employee shall not be required to mitigate the amount of any
payment or benefit provided for in this Agreement by seeking other employment or otherwise, and
there shall be no offset against amounts due the Employee under this Agreement

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on account of any remuneration attributable to any subsequent or other employment that the
Employee may have or obtain.

     12. Arbitration; Expenses. In the event of any dispute under the provisions of this
Agreement other than a dispute in which the primary relief sought is an equitable remedy such as an
injunction, the parties shall be required to have the dispute, controversy or claim settled by
arbitration in the City of Philadelphia, Pennsylvania in accordance with National Rules for the
Resolution of Employee Disputes then in effect of the American Arbitration Association (the
“AAA”) (or, if no such rules be in effect, then under the regular rules of the AAA), before
a panel of three arbitrators, one of whom shall be selected by K-Tron, one of whom shall be
selected by the Employee, and the third of whom shall be selected by the other two arbitrators. Any
award entered by the arbitrators shall be final, binding and nonappealable (except as provided by
applicable statutory law), and judgment may be entered thereon by either party in accordance with
applicable law in any court of competent jurisdiction. This arbitration provision shall be
specifically enforceable. The arbitrators shall have no authority to modify any provision of this
Agreement or to award a remedy for a dispute involving this Agreement other than a benefit
specifically provided under or by virtue of the Agreement. If the Employee prevails on any material
issue which is the subject of such arbitration or lawsuit, K-Tron shall be responsible for all of
the fees of the AAA and the arbitrators and any expenses relating to the conduct of the arbitration
(including K-Tron’s and the Employee’s reasonable attorneys’ fees and expenses). Otherwise, each
party shall be responsible for its or his own expenses relating to the conduct of the arbitration
(including reasonable attorneys’ fees and expenses) and shall share the fees of the AAA and the
arbitrators.

     13. Withholding. K-Tron may withhold from any payments under this Agreement all
federal, state and local taxes as K-Tron is required to withhold pursuant to any law or
governmental rule or regulation. Except as otherwise specifically provided herein, the Employee
shall bear all expense of and be solely responsible for, all federal, state and local taxes due
with respect to any payment received under this Agreement.

     14. Notices. All notices and other communications hereunder shall be in writing and
deemed to have been given when hand delivered, in person or by a recognized courier or delivery
service, or when mailed by registered or certified mail, return receipt requested, as follows
(provided that notice of change of address shall be deemed given only when received):

If to K-Tron, to:

K-Tron International, Inc.

Routes 55 and 553

Pitman, NJ 08071

Attention: Corporate Secretary

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If to the Employee, to:

Edward B. Cloues, II

1133 Forest Hill Drive

Lower Gwynedd, PA 19002

or to such other name or address as any designated recipient shall specify by notice to the other
designated recipient in the manner specified in this Section 14. Any communication delivered in
another manner shall be deemed given when actually received by the intended recipient.

     15. Governing Law. This Agreement shall be governed by and interpreted under the laws
of the State of New Jersey, without giving effect to any conflict of laws provisions.

     16. Contents of Agreement, Amendment and Assignment.

          (a) This Agreement sets forth the entire understanding of the parties with respect to the
subject matter hereof, supersedes any prior employment agreement between the parties and shall not
be changed, modified or terminated except upon written amendment executed by a duly authorized
officer of K-Tron and the Employee.

          (b) Employee acknowledges that from time to time K-Tron and other members of the K-Tron Group
may establish, maintain and distribute employee manuals or handbooks or personnel policy manuals,
and officers or other representatives of K-Tron or other members of the K-Tron Group may make
written or oral statements relating to personnel policies and procedures. Such manuals, handbooks
and statements are intended only for general guidance. No policies, procedures or statements of any
nature by or on behalf of any member of the K-Tron Group (whether written or oral, and whether or
not contained in any employee manual or handbook or personnel policy manual), and no acts or
practices of any nature, shall be construed to modify this Agreement.

          (c) All of the provisions of this Agreement shall be binding upon and inure to the benefit of
and be enforceable by the respective heirs, executors, administrators, personal representatives,
successors and assigns of the parties hereto, except that the duties and responsibilities of the
Employee hereunder are of a personal nature and shall not be assignable or delegable in whole or in
part by the Employee. K-Tron shall require any successor (whether direct or indirect, by purchase,
merger, consolidation, reorganization or otherwise) to all or substantially all of the business or
assets of K-Tron, by agreement in form and substance satisfactory to the Employee, expressly to
assume and agree to perform this Agreement in the same manner and to the same extent that K-Tron
would be required to perform if no such succession had taken place.

     17. Severability. If any provision of this Agreement or the application thereof to
anyone or any circumstance is held invalid or unenforceable in any jurisdiction, the remainder of
this Agreement, and the application of such provision to such person or entity or such circumstance
in any other jurisdiction or to other persons, entities or circumstances in any

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jurisdiction, shall not be affected thereby, and to this end the provisions of this Agreement
are severable.

     18. Remedies Cumulative; No Waiver. Except as expressly stated herein, no remedy
conferred upon any party by this Agreement is intended to be exclusive of any other remedy, and
each and every such remedy shall be cumulative and in addition to any other remedy given hereunder
or now or hereafter existing at law or in equity. No delay or omission by any party in exercising
any right, remedy or power hereunder or existing at law or in equity shall be construed as a waiver
thereof, and any such right, remedy or power may be exercised by such party from time to time and
as often as may be deemed expedient or necessary by such party in its or his sole discretion.

     19. Beneficiaries/References. The Employee shall be entitled, to the extent permitted
under any applicable law, to select and change a beneficiary or beneficiaries to receive any
compensation or benefit payable under this Agreement following the Employee’s death by giving
K-Tron written notice thereof. In the event of the Employee’s death or a judicial determination of
the Employee’s incompetence, reference in this Agreement to the Employee shall be deemed, where
appropriate, to refer to the Employee’s beneficiary, estate or other legal representative.

     20. Miscellaneous. The masculine pronoun whenever used shall include the feminine and
the singular shall be construed as the plural, where applicable. All section headings are for
convenience only. This Agreement may be executed in several counterparts each of which shall be an
original. It shall not be necessary in making proof of this Agreement or any counterpart hereof to
produce or account for any of the other counterparts.

     21. Section 409A.

          (a) Section 409A Compliance. This Agreement is intended to comply with the
requirements of the “short-term deferral” exemption from section 409A of the Code or another
exemption and shall in all respects be administered in accordance with section 409A or an
exemption. Notwithstanding anything in this Agreement to the contrary, distributions upon
termination of employment may only be made upon a “separation from service” as determined under
section 409A. Each payment under this Agreement shall be treated as a separate payment for
purposes of section 409A. In no event may the Employee, directly or indirectly, designate the
calendar year of any payment to be made under this Agreement. All reimbursements and in-kind
benefits provided under this Agreement shall be made or provided in accordance with the
requirements of section 409A of the Code.

          (b) Payment Delay. Notwithstanding anything in this Agreement to the contrary, if
required by section 409A of the Code and if the Employee is a “specified employee” of a publicly
traded corporation as determined under section 409A, any payments under this Agreement that are
required to be postponed pursuant to section 409A shall be postponed for a period of six months
after separation from service, as required by section 409A. The accumulated postponed amount, with
interest as described below, shall be paid in a lump sum payment within ten days after the end of
the six-month period. If the Employee dies during the postponement period prior to the payment of
the postponed amount, the amounts withheld on

 - 14 - 

 

account of section 409A, with interest, shall be paid to the personal representative of the
Employee’s estate within 60 days after the date of his death. If amounts are postponed on account
of section 409A, the postponed amounts will be credited with interest for the postponement period
at the rate described in Section 9.3(a) hereof.

     IN WITNESS WHEREOF, K-Tron and the Employee have executed this Agreement as of the date first
above written.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Attest:	 	K-TRON INTERNATIONAL, INC.	 	 
	 
	 	 	 	 	 	 
	/s/ Mary E. Vaccara

	 	By:
	 	/s/ Ronald R. Remick	 	 
	 

	 	 	 	 	 	 
	Mary E. Vaccara

	 	 	 	Ronald R. Remick	 	 
	As its Secretary

	 	 	 	As its Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	EMPLOYEE	 	 
	 
	 	 	 	 	 	 
	/s/ Lukas
Guenthardt	 	/s/ Edward B. Cloues, II	 	 
	 	 	 	 	 
	Witness	 	Edward B. Cloues, II	 	 

Approved by the Compensation and Human

Resources Committee of the K-Tron

International, Inc. Board of Directors

	 	 	 	 	 
	By:

	 	/s/ Norman Cohen
	 	 
	 

	 	 	 	 
	 

	 	Norman Cohen	 	 
	 

	 	As its Chairman	 	 

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