Document:

EXHIBIT 10.19

 

	
 
    	
[*]   Certain   confidential information contained in this document, marked by brackets, has   been omitted and filed separately with the Securities and Exchange Commission   pursuant to Rule 406 of the Securities Act of 1933, as amended.
    

 

DEVELOPMENT, LICENSE AND COMMERCIALIZATION AGREEMENT

 

This Development, License and Commercialization Agreement (this “Agreement”) is entered into as of October 18, 2006 (the “Effective Date”) between Corium International, Inc., a Delaware corporation having its principal place of business at 2686 Middlefield Road, Redwood City, CA 94063, (“Corium”), and Agile Therapeutics, Inc., a Delaware corporation, having its principal place of business at 366 Wall Street, Princeton, NJ 08540, (“Agile”).

 

RECITALS

 

A.            Corium has developed expertise in developing, formulating and manufacturing transdermal drug delivery systems, and Corium owns or has valid license rights to certain intellectual property related thereto;

 

B.            Agile is in the process of developing a transdermal delivery system containing ethinyl estradiol and levonorgestrel for female contraception (as more specifically described in this Agreement), and Agile owns or has valid license rights to certain intellectual property related thereto;

 

C.            In order to assist Agile in completing the development of Agile’s transdermal delivery system product and obtaining regulatory clearance, Agile wishes to engage Corium to provide certain development services, clinical supplies of the developed product, and license rights associated with the product, and Corium is willing to provide those services, supplies and license rights, all as more specifically provided in this Agreement and subject to the terms and conditions set forth herein; and

 

D.            In consideration of the services, supplies and license rights to be provided by Corium to Agile, Agile is willing to pay Corium the compensation described in this Agreement and also to engage Corium as Agile’s exclusive supplier of the product to be developed hereunder for at least [*] after commercial launch, all as more specifically provided in this Agreement and subject to the terms and conditions set forth herein.

 

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

 

*Confidential Treatment Requested.

 

 

ARTICLE 1 - DEFINITIONS

 

For purposes of this Agreement, the following terms shall have the respective meanings set forth below:

 

1.01        “Affiliate” shall mean, with respect to any party, a corporation or any other entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, that party, but only for so long as the relationship exists. “Control” shall mean ownership of shares of stock having at least 50% of the voting power entitled to vote for the election of directors in the case of a corporation.

 

1.02        “Agile Background Technology” means all Inventions that are owned, either partially or wholly, by Agile as of the Effective Date of this Agreement.

 

1.03        “Agile Intellectual Property” means the Agile Background Technology, the Agile Foreground Inventions (as defined in Section 5.1(b)), and any other Agile-owned intellectual property rights (whether patented or not).

 

1.04        “cGMP” shall mean those Current Good Manufacturing Practices required by the FDA and all other relevant regulatory agencies to be followed in connection with the manufacture of pharmaceutical products, as defined from time to time by the United States Federal Food, Drug and Cosmetic Act and similar regulations, as amended, or any successor laws or regulations governing the manufacture, handling, storage and control of the Product in the Territory (but only to the extent the foregoing apply to Corium by virtue of Corium’s manufacturing activities in the applicable jurisdiction or exporting Products into such jurisdiction).

 

1.05        “Corium Background Technology” means all Inventions that are owned, either partially or wholly, by Corium as of the Effective Date of this Agreement.

 

1.06        “Corium Intellectual Property” means the Corium Background Technology, the Corium Foreground Inventions (as defined in Section 5.1(a)), and any other Corium-owned intellectual property rights (whether patented or not).

 

1.07        “FDA” shall mean the United States Food and Drug Administration or any successor United States governmental agency performing similar functions with respect to pharmaceutical products.

 

1.08        “Gross Sales” shall mean the total amounts invoiced by Agile, any Sublicensee, or any of their Affiliates for sales of the Product in the Territory to third parties in bona fide, arms-length transactions, for a given calendar quarter, but not including any revenues arising from the sale of Product units that were manufactured by Corium under this Agreement.

 

1.09        “Inventions” means inventions, technologies, Know-How, works of authorship, developments, and intellectual property rights (including but not limited to patent and trade-secret rights).

 

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1.10        “Know-How” means confidential and/or proprietary technical information, formulations, techniques, processes, trade secrets, methods, data, substances and materials, and other information in a party’s possession that is not generally available to the public.

 

1.11        “Launch Date” shall mean the date of first commercial sale of the Product in the Territory by Agile or its Affiliates.

 

1.12        “NDA” shall mean a New Drug Application (as defined in Title 21 of the U.S Code of Federal Regulations) submitted to the FDA requesting approval to market the Product.

 

1.13        “Net Sales” shall mean the Gross Sales, adjusted as necessary so as not to include: (i) [*]; (ii) [*]; (iii) [*]; (v) [*]; (vi) [*]; and (vii) [*].

 

1.14        “Product” shall mean Agile’s proprietary transdermal delivery system for female contraception, whose active ingredients are ethinyl estradiol and levonorgestrel, whether labeled, packaged and marketed as a brand-name product or as an authorized generic of such product.

 

1.15        “Product Specification” shall mean a manufacturing, testing, labeling, storage and quality control specification, to be established in the course of the parties’ activities under this Agreement and updated or otherwise modified from time to time, for a transdermal delivery system product that conforms to the product description set forth in the attached Exhibit A, as it may be amended from time to time in accordance with this Agreement and as such specification is set forth in the NDA and approved by the FDA (as applicable), and as such specification may be amended for Products to be sold in jurisdictions outside the United States to comply with regulatory requirements of those respective jurisdictions.

 

1.16        “Sublicensee” shall have the meaning set forth in Section 5.2(b).

 

1.17        “Territory” shall mean the entire world.

 

1.18        “Third Party” shall mean an entity or person that is not a party to this Agreement or an Affiliate of a party to this Agreement.

 

1.19        “Third Party Manufacturer” shall mean a Third Party that enters into a manufacture and supply agreement with Agile for the manufacture and supply of the Product as contemplated by the terms of this Agreement.

 

 

ARTICLE 2 - DEVELOPMENT PROGRAM

 

2.1          The Development Program.  The parties shall undertake a development and manufacturing scale-up program for the Product, as described in the attached Exhibits B and C, with the overall objective of creating commercial-scale manufacturing capability and obtaining all regulatory approvals necessary for the commercialization of the Product (hereinafter, the

 

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“Development Program”).  Subject to the terms and conditions of this Agreement, including but not limited to Section 2.8 below, the parties will cooperate with each other using commercially reasonable good faith efforts to accomplish the goals of the Development Program; however, if the Product or associated processes are not successfully developed, neither party shall be liable to the other party solely by reason of that fact.

 

2.2          Commencement of the Development Program.  The Development Program shall commence promptly after Agile pays Corium the non-refundable pre-commencement payment identified in the attached Exhibit D (the “Prepayment”).

 

2.3          Tasks and Timeline for the Development Program.  The tasks and estimated timeline for the portion of the Development Program designated as “Stage 1” are set forth in Exhibit B attached hereto (the Stage 1 “Tasks” and “Timeline” respectively).  The parties recognize that certain later portions of the Development Program (particularly the portion designated in Exhibit C as “Stage 2”) cannot be adequately estimated in terms of specific tasks and timelines as of the Effective Date.  As relevant data and experience are obtained through the performance of Stage 1 Tasks, the parties will cooperate, using the mechanisms described in Section 2.5 below, to establish and refine reasonable tasks and timelines for Stage 2 (the Stage 2 “Tasks” and “Timeline” respectively) consistent with such newly obtained data and experience. The parties will use commercially reasonable efforts and will devote personnel each party reasonably believes are sufficient in number, skills and experience to complete the Tasks in accordance with the applicable Timeline, as set forth in Exhibit B (for Stage 1) and as established in accordance with this Section (for Stage 2).  In the event that Corium is unable to satisfy a milestone or other Task or Timeline requirement as estimated, the parties will, consistent with the provisions of Sections 2.5 through 2.7 below, consider appropriate changes to the Milestones, Tasks and/or Timelines.

 

2.4          Exchange of Information; Reporting.

 

(a)           Generally.  The parties will use good faith efforts to keep each other informed with respect to material activities directly related to their performance of the Development Program.  Information that Agile will provide to Corium includes, without limitation, any Agile information, data, or research results with respect to third party patents that may cover or relate to the Product.  Corium shall provide Agile with regular written reports as reasonably necessary to keep Agile apprised of Corium’s progress under the Development Program, and respond to any questions raised by Agile from time to time.

 

(b)           Specific Product Information.  In addition to the information identified in Section 2.4(a) above, Corium agrees to maintain a confidential dossier including information concerning the composition of the Product; the manufacturing process; quality control testing and release methods; scale-up and process validation data; and batch release and stability data.  Corium shall provide such information (or right of reference thereto such as a right of reference to a Drug Master File) as required by law or as necessary to obtain regulatory approval for the manufacture of the Product to (i) Agile or (ii) the applicable regulatory agency, at Agile’s election.  Corium shall also provide to Agile any information (including but not limited to analytical methodology and assays) available to Corium and necessary for Agile to determine

 

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compliance with the Product Specification and to perform quality control and batch release functions.

 

2.5          Joint Steering Committee.

 

(a)           Purpose.  A joint supervisory committee will be established to oversee the Development Program (the “Joint Steering Committee”). The duties of the Joint Steering Committee will include, but not be limited to, the following:

 

(i)            general oversight of all aspects of the Development Program;

 

(ii)           development and approval of budgets and any revisions thereto;

 

(iii)          revision of the Tasks and Timeline if the estimated timing schedule for the development of a Product has not been followed or must be revised; and

 

(iv)          initial forum for the resolution of disputes arising under this Agreement.

 

(b)           Membership.  The Joint Steering Committee will consist of a minimum of two representatives from Corium and two representatives from Agile.  A party’s members of the Joint Steering Committee will be appointed by the party at its sole discretion.  Substitute employees may be appointed at any time.  The parties will appoint their respective members of the Joint Steering Committee, and each party will disclose such members to the other party in writing, promptly after the Effective Date.  If the Joint Steering Committee is unable to reach agreement on a matter within twenty (20) business days of either party’s request, the matter will be submitted for resolution to the parties’ respective chief executive officers.

 

(c)           Meetings.  The Joint Steering Committee will meet quarterly or more frequently as requested by either party to maintain Development Program progress.  Representatives of either party, or both, in addition to members of the Joint Steering Committee, may attend such meetings at the invitation of either party.  The Joint Steering Committee may hold meetings in person or by teleconference or videoconference.

 

(d)           Records.  Records of all significant decisions of the Joint Steering Committee, such as decisions regarding budgets and changes in Tasks and Timelines, will be reflected in written minutes of meetings that will be circulated to all Joint Steering Committee members for review and comment before being filed as final records of the Joint Steering Committee.

 

2.6          Working Committee.  In addition to the Joint Steering Committee described above, in order to coordinate and monitor day-to-day progress on the Development Program, Corium and Agile shall each appoint a minimum of two of their representatives (who may or may not also be involved in the Joint Steering Committee) to serve on a joint working committee.  The working committee shall meet or hold teleconferences at least every two weeks or more frequently as needed to maintain progress.  Issues that cannot be resolved by the

 

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working committee (that is, any disputes) will be referred to the Joint Steering Committee for resolution or escalation in accordance with Section 2.5.

 

2.7          Development Budget.

 

(a)           Generally.  The estimated budget for the Development Program is set forth in Exhibit C attached hereto (the “Budget”).  The parties agree that the Budget is an estimate of the costs for the Development Program, based on currently anticipated Tasks, Timelines and expenses, and that the actual costs of the Development Program may differ from the costs estimated in the Budget.

 

(b)           Changes.  The parties acknowledge that the Budget has been based in part upon certain assumptions, as specified in Exhibit C.  Any failure of those assumptions, or any change to the Development Program itself (including without limitation any changes to the Tasks, Timeline, nature of the Product being developed, or obligations of the parties hereunder), may result in a change to the costs of the Development Program such that a modification of the Budget is warranted.  Either party may propose, and the other party will in good faith consider and, where appropriate, promptly approve, changes to the Budget to account for any such changes or failed assumptions.  Agile acknowledges that in no event will Corium be obligated to perform any tasks or incur any expenses that are not identified in the Budget except to the extent the parties agree in writing upon additional compensation to be paid to Corium in connection with such tasks or expenses.

 

2.8          Development Compensation and Payment.

 

(a)           Compensation.  Agile will pay Corium the non-refundable Prepayment, milestone payments and other fees and expenses associated with Corium’s efforts under the Development Program, as specifically set forth in the attached Exhibit D, which Exhibit shall be updated as needed to reflect any Budget changes that are made pursuant to Section 2.6(b) above. Whether or not specified in Exhibit D, Agile agrees to pay Corium for: (i) all material and supplies purchased by Corium under an Agile-approved purchase request (which purchase requests may be made by Corium and/or approved by Agile either verbally or in writing) in performance of the Development Program, which will be billed to Agile at Corium’s cost plus [*]; (ii) the purchase of dedicated equipment identified in the Budget, which will be billed to Agile at Corium’s cost; and (iii) any travel or other incidental reasonable and appropriate expenses incurred in performance of the Development Program, which will be billed to Agile at Corium’s cost.  Amounts described in the preceding sentence may be invoiced as they are incurred by Corium.

 

(b)           Payment Terms.  Except as expressly specified in this Agreement or as otherwise agreed to in writing by the parties, Agile will pay any fees, expenses, transfer prices, and other charges payable to Corium hereunder within [*] following the date of Corium’s invoice.  Late payments will accrue interest at a rate of [*].  Agile will bear its own costs and expenses incurred in fulfilling its obligations with respect to the Development Program.

 

2.9          Regulatory Filings; Clinical Trials.  Agile shall, at its own expense, draft, submit and maintain any appropriate NDA for the Product, including all amendments and supplements

 

*Confidential Treatment Requested.

 

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to the FDA, and use reasonable efforts to obtain FDA approval for the commercialization of the Product as progress under the Development Program permits. Agile shall also be responsible, at its own expense, for any pre-clinical, clinical and other trials and tests of the Product, except as expressly stated otherwise in the Development Program.  In the event Agile desires to obtain regulatory approval of the Product outside of the United States, such efforts will be at Agile’s cost and expense unless otherwise negotiated.  With respect to filings reasonably required by Agile in connection with regulatory approval matters (including without limitation any updates to the CMC information) and any recordkeeping, audits and inspections required, or requests or inquiries made, by regulatory authorities relating to the manufacture of the Product by Corium hereunder, Corium will reasonably and timely cooperate with Agile to provide such information and support as Agile shall reasonably request.  Reasonable costs incurred by Corium in supporting Agile’s regulatory activities described in this Section 2.9 shall be reimbursed by Agile.

 

ARTICLE 3 — MANUFACTURE AND SUPPLY OF PRODUCT

 

3.1          Manufacturing Responsibility.  Subject to the terms and conditions of this Agreement, Corium will use commercially reasonable efforts: (i) to supply quantities of the Product to Agile, in accordance with the Development Program, for pre-Launch-Date testing and clinical studies as Agile shall from time to time request; and (ii) after the Launch Date of the Product and throughout the remainder of the Term, to maintain Corium’s manufacturing capability for the Product and to sell Products to Agile as necessary to satisfy Agile’s quantity requirements of such Products, as such requirements are reflected in forecasts submitted by Agile to Corium as provided in Section 3.3(b).

 

3.2          Exclusivity.  For a period of [*] after the Launch Date or such longer period as the parties may mutually agree upon in writing (the “Exclusive Supply Period”), Agile shall purchase all of its requirements of the Product exclusively from Corium, subject to the provisions of Section 3.4 below.

 

3.3          Supply Terms.  The parties will negotiate in good faith to establish definitive, commercially reasonable terms and conditions applicable to the commercial supply of Products by Corium to Agile (the “Supply Terms”).  Such terms and conditions shall be appended to this Agreement as an exhibit, which shall become binding upon the parties’ mutual execution thereof, and shall apply to all subsequent orders of Products during the Term, unless expressly amended or otherwise agreed by the parties in writing.  The parties hereby agree that the following minimum terms and conditions will apply to Corium’s supply of Products hereunder, and the Supply Terms shall include provisions that are consistent with each of the following.

 

(a)           Pricing and Payment.  The parties will work in good faith to establish mutually agreeable Product transfer prices.  In order to facilitate such agreement for post-Launch-Date sales, Agile will provide Corium with a good-faith, non-binding sales forecast of Products for the [*] period following the Launch Date.  Such non-binding sales forecast shall be updated as Agile’s anticipated volume requirements change, and in any event, Agile will provide Corium with an updated forecast [*] prior to the Launch Date.  Payments for Products will be made in accordance with Section 2.8(b).  Agile will be responsible for all packing, shipping,

 

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customs and similar charges, as well as all taxes payable by either party with respect to the purchase, sale or delivery of the Products (other than Corium’s income taxes).

 

(b)           Forecasting.  Beginning [*] prior to the Launch Date, Agile will provide Corium, on a quarterly basis, with written rolling forecasts of Agile’s quantity requirements for the Product for each of the next [*] (the “Purchase Forecast”).  Corium may utilize the Purchase Forecast to purchase material so ordered in good faith in sufficient volumes reasonably required to meet production requirements for the Product during all or part of the forecasted period or any longer forecasted period that the parties may agree to.   In the event that the materials are not used in Product purchased by Agile within [*] after the forecast in respect of which such purchases have been made, Agile will pay to Corium its costs thereof and, in the event such materials are incorporated into Product subsequently purchased by Agile, Agile will receive credit for any such costs previously paid to Corium by Agile.

 

(c)           Ordering.  Agile shall place firm (i.e. non-cancelable) purchase orders (“Purchase Orders”) at least [*] prior to the Launch Date for the first quarter’s Product requirements.  Following the Launch Date, Agile shall place firm Purchase Orders for each quarter’s Product requirements in accordance with the current Purchase Forecast, which Purchase Orders shall be placed [*] in advance of the first required ship date for such quarter’s Product requirements.  Each Purchase Order must reference this Agreement and include ordering information such as Product identifier, quantity, unit price, requested delivery dates and delivery locations, shipping and packaging instructions, and any special terms and conditions applicable to the Products (collectively, “Ordering Information”).  Beginning [*] after the Launch Date, Agile must actually purchase at least [*] of the quantities specified in the most recent Purchase Forecast when placing Purchase Orders for the applicable quarter, and Corium shall have no obligation to fulfill orders for more than [*] of such quantities unless previously approved by Corium in writing, which approval may be conditioned on the payment by Agile of reasonable additional compensation to account for costs or expenses reasonably incurred by Corium in connection with or resulting from the out-of-forecast order.

 

(d)           Acceptance of Orders.  Within [*] following Corium’s receipt of each Purchase Order, Corium will acknowledge receipt thereof and accept the delivery dates set forth in the Purchase Order or provide alternate delivery dates.  Within [*] following Agile’s receipt of any such alternate delivery dates, Agile will either: (i) notify Corium that it rejects such dates (in which case the Purchase Order will be deemed cancelled and of no effect); or (ii) accept such dates by issuing a confirming Purchase Order, which will be deemed accepted by Corium upon receipt.  Once Corium has accepted a Purchase Order, such Purchase Order will not be cancelable or modifiable.

 

(e)           No Conflicting Terms.  Except for Ordering Information, any terms and conditions contained in a Purchase Order or in Corium’s quotation or order acknowledgment forms that are inconsistent with or in addition to the terms and conditions of this Agreement (including the Supply Terms) are hereby rejected by Corium and will be deemed null and of no effect.

 

(f)            Minimum Order Quantities.  Agile’s orders must meet or exceed certain minimum quantity requirements, which the parties will mutually establish in the Supply Terms to

 

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account for Corium’s ongoing costs associated with maintaining production capability for the Products.

 

(g)           Delivery, Invoice and Payment.  For all shipments of Products to Agile, Corium may choose the mode of shipment and carrier.  All Products shall be packed for shipping as mutually agreed by the parties, and marked for delivery to Agile, FOB Corium’s manufacturing facility.  Risk of loss shall pass to Agile upon carrier’s receipt of the Products from Corium.  Agreed upon delivery dates are estimates only.  Corium will use commercially reasonable efforts to meet those delivery dates but shall not be liable to Agile for delayed delivery.  Corium may invoice Agile for Products upon Corium’s shipment of such Products in accordance with this paragraph, and Agile shall pay such invoices on the terms set forth in Section 2.8(b).

 

(h)           Acceptance of Products.  Agile will have a period of [*] business days following the receipt of each shipment of the Products to notify Corium of any discrepancies in the shipment quantity.  Agile will have a period of [*] days following the receipt of the Products to test and inspect the Products and to notify Corium of: (i) any nonconformities of the Product with the applicable Product Specification; or (ii) any defects in material or workmanship; provided that Agile may, upon Corium’s prior approval (not to be unreasonably withheld), extend such [*] if reasonably necessary to complete Product testing.  Agile will notify Corium in writing of its acceptance or rejection of any portion of any delivery of the Products prior to the expiration of such [*]period unless extended as permitted above.  Any Products not rejected within such period, as it may be so extended, will be deemed accepted.

 

(i)            Warranty.  The Supply Terms shall create no Product-related warranties beyond those set forth in Section 7.3.

 

(j)            Disclaimer and Limitations of Liability.  The parties’ activities relating to the supply of Products to Agile shall be subject to the disclaimers, limitations of liability, exclusions of damages, and other terms set forth in Section 7.5 and Article 9 hereof.

 

3.4          Agile’s Manufacturing Right.

 

(a)           Qualification of Second Source.  Agile will have the right to manufacture the Product itself or qualify one or more Third Party Manufacturers as a second source for supply of the Product, at Agile’s expense; provided, however, that for the duration of the Exclusive Supply Period, such Third Party Manufacturer may supply Agile with Products for commercial sale, and Agile may manufacture Products for commercial sale, only to the extent expressly permitted in clause (b) below.  In support of such second-source qualification, Agile may provide the Third Party Manufacturer with any data and documentation created under the Agreement that is specific to the Product and reasonably necessary for its manufacture.  Any such disclosure shall be made in confidence and shall, at a minimum, be subject to the provisions of Section 4.3 below.

 

(b)           Second-Source Manufacturing.  Agile shall have the right to manufacture the Product, and/or have the Product manufactured by an Affiliate or a Third Party Manufacturer qualified as a second source as permitted above, in the event that: (i) [*] (“Supply Failure”) and

 

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(ii) Corium fails to cure such Supply Failure within an additional [*] after Agile’s written request for cure.  Notwithstanding the foregoing, Corium may resume manufacturing Product no later than [*] after Corium provides written notice to Agile that it has cured the Supply Failure problem and is able to manufacture Product.  If the Supply Failure was caused by a force majeure event (as that term is used in Section 11.7 below) such resumed manufacturing shall be on an exclusive basis for the remainder of the Exclusive Supply Period.  In all other cases, such resumed manufacturing shall be on a non-exclusive basis (meaning that Agile may also continue to manufacture the Product or purchase Product from its Third Party Manufacturer), provided in any event that Agile will source no less than [*] of its Product requirements to Corium for the duration of the Exclusive Supply Period after such resumption of manufacturing.

 

(c)           Technical Support.  To facilitate an orderly transfer of the manufacture of the Product to a qualified second source in the event Agile exercises its rights under Section 3.4(b), Corium shall provide the Third Party Manufacturer with all necessary technical assistance in the form of reasonable consulting services to be provided by Corium personnel at Agile’s or the Third Party Manufacturer’s facility.  Such consulting services shall not require Corium to divulge any proprietary Know-How unless pursuant to specific licensing, confidentiality and compensation terms and conditions expressly agreed to by Corium in advance.

 

(d)           Supporting License.  Corium shall grant to Agile and/or its designated Affiliate or Third Party Manufacturers, as directed by Agile, a non-exclusive, non-transferable, non-sublicensable, limited right to use and practice the Corium Intellectual Property during the Exclusive Supply Period, but solely to the extent necessary to enable Agile and/or such Affiliate or Third Party Manufacturer to manufacture the Product for Agile pursuant to Section 3.4(b).   The license granted under this Section 3.4(d) shall [*] unless and until such time as Corium resumes manufacture of the Product as provided in Section 3.4(b), at which time such license shall [*].

 

3.5          Manufacturing Audit.  Agile, either itself or through or with its representatives, shall have the right, once each calendar year, or more often if there is a legitimate basis for unusual concern (such as a change in, or material noncompliance with, applicable laws, regulations and governmental guidelines), upon reasonable notice and during normal business hours, to subject the manufacturing facilities where Corium manufactures, or has manufactured, Product to a cGMP audit or inspection at Agile’s expense.  This inspection shall be conducted to ensure compliance with all requirements of applicable laws and regulations, including cGMPs, and all applicable guidelines promulgated by the FDA and other relevant regulatory agencies, as well as applicable evolving standards required by the FDA and other relevant regulatory agencies.  Such inspection and auditing shall be permitted upon reasonable notice and during normal business hours, taking into account Corium’s manufacturing cycle of Product.

 

3.6          Notice of Inspections.  Corium shall immediately notify Agile of any inspection of its or any of its Affiliates’ facilities (or of any facilities of its or their licensees, distributors, contractors, subcontractors or agents) related to the Product or the API by any regulatory agency, including the FDA, and shall send Agile copies of any written reports or correspondence to or from any regulatory agency relating to such inspection.  Such reports may exclude any trade secrets of Corium that are unrelated to the activities under this Agreement.  Corium shall permit

 

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the relevant governmental authorities to inspect its facilities and records in connection with the activities contemplated by this Agreement.

 

ARTICLE 4 — CONFIDENTIALITY AND LEGAL DUTIES

 

4.1                               Definition.  “Confidential Information” means: (a) all information related to the Products, including, without limitation, documentation, drawings, designs and specifications; (b) any non-public information of a party, including, without limitation, any information relating to a party’s technology, techniques, know-how, research, designs, finances, accounts, procurement requirements, manufacturing, customer lists, business forecasts and marketing plans; (c) any other information of a party that is disclosed in writing or electronically and is designated as “Confidential” or “Proprietary” at the time of disclosure, in the covering letter or transmission or otherwise, or that if disclosed orally, is identified as “Confidential” or “Proprietary” at the time of disclosure and confirmed as such in a writing sent by the disclosing party to the receiving party within thirty (30) days of any such disclosure; and (d) the specific terms and pricing of this Agreement (including any Product transfer prices).

 

4.2                               Exclusions.  The obligations in Section 4.3 will not apply to the extent that it can be demonstrated that any Confidential Information: (a) is or becomes generally known to the public through no fault of or breach of this Agreement by the receiving party; (b) was rightfully in the receiving party’s possession at the time of disclosure, without an obligation of confidentiality; (c) is independently developed by the receiving party without use of the disclosing party’s Confidential Information; or (d) is rightfully obtained by the receiving party from a third party without restriction on use or disclosure.

 

4.3                               Obligations.  For the term of this Agreement and for [*] thereafter, each party agrees not to use the other party’s Confidential Information, except as necessary for the performance of this Agreement, and shall not disclose such Confidential Information to any third party, except to those of its employees and subcontractors who need to know such Confidential Information for the performance of this Agreement or as otherwise expressly permitted in this Agreement, provided that each such employee, subcontractor, and other authorized third party is subject to a written agreement that includes binding use and disclosure restrictions that are at least as protective as those set forth herein.  Each party will use all reasonable efforts to maintain the confidentiality of the other party’s Confidential Information in its possession or control, but in no event less than the efforts that it ordinarily uses with respect to its own confidential information of similar nature and importance.  The foregoing obligations will not restrict either party from: (i) disclosing Confidential Information pursuant to the order or requirement of a court, administrative agency, or other governmental body, provided that the party required to make such disclosure gives reasonable notice to the other party to enable it to contest such order or requirement; or (ii) disclosing the terms or pricing of this Agreement, in confidence, to its business and legal advisors or to investors or acquirers who are engaged in active due diligence regarding a financing or acquisition of such party.

 

4.4                               Compliance with Laws. Each party agrees to comply with all material laws and regulations applicable to it and to use its commercially reasonable efforts to perform its responsibilities and duties as described in this Agreement.  Each party represents that neither it nor any of its current employees has been debarred or is subject to debarment proceedings by the

 

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FDA.  If any such proceedings are commenced against a party hereto (or any of its employees) during the Term, such party shall notify the other party in writing within five business days of the commencement of such proceedings, and shall keep the other party informed, on a regular basis, of the status of such proceedings. Neither Corium nor Agile shall employ any persons or entities that have been debarred, or that are subject to debarment proceedings, for any aspect of the development, manufacturing or testing of the Products.

 

ARTICLE 5 — IP OWNERSHIP AND LICENSE

 

5.1                               Intellectual Property Ownership.

 

(a)                                 Corium Background Technology and Inventions.  Corium is and will be the sole and exclusive owner of:  (i) the Corium Background Technology; and (ii) except as otherwise set forth in Section 5.1(c) hereof, any Inventions that relate to the Corium Background Technology, including but not limited to any improvements or enhancements to such Corium Background Technology, that are developed solely or jointly by either or both of the parties in connection with this Agreement (“Corium Foreground Inventions”); and (iii) all intellectual property rights in and to any of the foregoing.  Agile agrees to assign, and does hereby irrevocably assign, any and all of its right, title, and interest in and to all of the foregoing to Corium.

 

(b)                                 Agile Background Technology and Inventions.  Agile is and will be the sole and exclusive owner of: (i) the Agile Background Technology; (ii) except as otherwise set forth in Section 5.1(c) hereof, any Inventions that relate to the Agile Background Technology, including but not limited to any improvements or enhancements to such Agile Background Technology, that are developed solely or jointly by either or both of the parties in connection with this Agreement (“Agile Foreground Inventions”); and (iii) all intellectual property rights in and to any of the foregoing.  Corium agrees to assign, and does hereby assign, any and all of its right, title, and interest in and to all of the foregoing to Agile.

 

(c)                                  Dual Background Inventions.  Any Inventions that relate to both the Corium Background Technology and the Agile Background Technology that are developed solely or jointly by either or both parties in connection with this Agreement (“Dual Background Inventions”) shall be considered a Corium Foreground Invention for all purposes under this Agreement, except that the use of such Invention in the Product shall not, by itself, trigger a royalty obligation under Sections 5.2(b) and 6.1.

 

(d)                                 Other Inventions.  The parties will jointly own any Inventions that do not relate to either Corium’s Background Technology or Agile’s Background Technology that both parties’ employees or contractors jointly develop or invent in connection with this Agreement (“Joint Inventions”).  A party will solely own any Inventions that do not relate to either Corium’s Background Technology or Agile’s Background Technology that are solely developed or invented by such party in connection with the Agreement.

 

(e)                                  Resolution of Certain Ownership Conflicts.  Notwithstanding clauses (a) and (b) of this Section 5.1, in the event that both parties in good faith claim ownership of the same Invention under those Sections, each party shall disclose the basis of such claim (including

 

12

 

documentary support where applicable) to the other party, and the parties shall in good faith meet and confer to agree upon the ownership of such Invention and the parties’ respective rights to practice or exploit such Invention.  Such discussions and agreement will take into account the parties’ relative roles in the development of the Invention, the degree to which the Invention relates to each party’s background technology and each party’s business in general, and any relevant contractual obligations of either party that predate this Agreement.  The parties will execute such assignments and other documents as are appropriate to give effect to any agreement reached under this Section 5.1(e).  Unless otherwise agreed by the parties, the Invention at issue shall, for purposes of this Agreement, be considered a Corium Foreground Invention if it is determined through the process described above that the Invention should be owned solely by Corium, an Agile Foreground Invention if it is determined through the process described above that the Invention should be owned solely by Agile, a Dual Background Invention if it is determined through the process described above that the Invention relates to both the Corium Background Technology and the Agile Background Technology, and a Joint Invention if it is determined through the process described above that the Invention does not relate to either the Corium Background Technology or the Agile Background Technology and should be owned by the parties jointly.  Pending resolution of conflicting ownership claims under this clause, however, the Invention at issue shall be considered a Corium Foreground Invention for all purposes under this Agreement, except that the Invention shall not be considered to be part of the Corium Intellectual Property for purposes of Sections 5.2(b) and 6.1 (that is, the use of such Invention in the Product shall not trigger a royalty obligation under those Sections).

 

5.2                               Licenses to Agile.

 

(a)                                 During Exclusive Supply Period.  During the Exclusive Supply Period, and subject to the terms and conditions of this Agreement, Corium hereby grants to Agile an exclusive, transferable (but only as permitted in Section 11.6), non-sublicensable, royalty-free license under the Corium Intellectual Property to use, market, sell (directly or through multiple tiers of distribution), offer to sell and otherwise commercially exploit Product manufactured by Corium (or by another party in accordance with Section 3.4(b)) in the Territory.

 

(b)                                 After Exclusive Supply Period.  After the Exclusive Supply Period, Corium hereby grants to Agile an exclusive, transferable (but only as permitted in Section 11.6), royalty-bearing license under all of the Corium Intellectual Property, subject to the terms and conditions of this Agreement and Agile’s payment of all royalties due under Article 6, to make, have made, market, sell (directly or through multiple tiers of distribution), offer to sell, use, import and otherwise commercially exploit the Product in the Territory.  Agile may sublicense these rights to any one or more third parties (each of the foregoing, a “Sublicensee”), but only if: (i) such sublicense is granted in furtherance of an active strategic relationship between Agile and the Sublicensee for the cooperative manufacture, marketing, sale or offer to sell the Product in the Territory; (ii) the Sublicensee agrees in writing to be bound by all of the obligations, limitations and restrictions applicable to Agile’s license rights under this Agreement to the extent applicable, including but not limited to the royalty and audit provisions hereof, which agreement must name Corium as a third-party beneficiary of such obligations, limitations and restrictions; (iii) such Sublicensee is prohibited from granting any further sublicenses under any of the Corium Intellectual Property; and (iv) Agile does not grant more than [*] such sublicenses and

 

*Confidential Treatment Requested.

 

13

 

no more than [*] such sublicense in any geographic territory.  To the extent Agile requests approval to grant sublicenses to more than [*] Sublicensees, Corium shall not unreasonably withhold, delay or condition such approval as long as the additional Sublicensees are limited to [*] per geographic area. For the avoidance of doubt, the parties acknowledge and agree that a sublicense granted to an entity acting for and on behalf of itself and its subsidiaries and/or other Affiliates shall be considered to be granted to a single Sublicensee for purposes of this Section and that the “have made” license granted hereunder shall permit a Sublicensee to have Products manufactured by a third party contract manufacturer (but solely for and on behalf of that Sublicensee).  In support of the license granted in this Section 5.2(b), Agile may provide any Sublicensee with any data and documentation created under the Agreement that is specific to the Product and reasonably necessary for its manufacture.  Any such disclosure shall be made in confidence and shall, at a minimum, be subject to the provisions of Section 4.3 above.  To facilitate an orderly transfer of the manufacture of the Product pursuant to the license granted in this Section 5.2(b), Agile may request, and Corium may (in its sole discretion) elect whether to provide, technical assistance in the form of reasonable consulting services at Agile’s or the Sublicensees’ facilities.  Agile shall bear the cost of any such technical assistance.  Neither this Section, nor Corium’s election to provide any assistance requested hereunder, shall be construed as obligating Corium to divulge any proprietary Know-How unless pursuant to specific licensing, confidentiality and additional compensation terms and conditions expressly agreed to by Corium in advance.

 

(c)                                  Nature of Exclusivity.  For the avoidance of doubt, the parties acknowledge that the exclusivity of the licenses under Sections 5.2(a) and 5.2(b) shall apply even as to Corium, meaning that Corium shall not make any use of Corium Intellectual Property to develop or manufacture the Product for any third party without Agile’s express authorization.  The parties further acknowledge that such exclusivity will be limited and apply only to the Product, and shall not be construed as granting any rights to Agile, or as limiting Corium’s ability to practice or license the Corium Intellectual Property, with respect to any products or services other than the Product as specifically defined in this Agreement.  This limitation on exclusivity shall not, however, be construed as: (i) granting to Corium any ownership or other rights (other than those expressly granted under the terms of this Agreement) with respect to the Agile Background Technology, Agile Foreground Inventions, or any other Agile Intellectual Property (including but not limited to Agile’s proprietary permeation enhancer technologies); or (ii) prohibiting Agile from practicing or exploiting any of the same in other products and applications.

 

5.3                               License to Corium.  Agile grants to Corium, during the Term of this Agreement and subject to the terms and conditions hereof, an exclusive, royalty-free, transferable (but only as permitted in Section 11.6) license to practice the Agile Intellectual Property in order to manufacture the Product and to perform Corium’s other obligations under this Agreement.  The exclusivity of the foregoing license shall be subject to a reservation of rights by Agile to practice the Agile Intellectual Property, or to authorize any Affiliate or Third Party Manufacturer to do the same, in the course of manufacturing the Products solely as permitted under Section 3.4 above.

 

*Confidential Treatment Requested.

 

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5.4                               License Limitations and Restrictions.  Each party’s rights with respect to the intellectual property (including but not limited to Know-How and other Inventions) of the other party are limited to those licenses expressly granted under this Agreement.  No license or other rights are granted by implication, estoppel, or otherwise.  Neither party shall make any use of the other’s intellectual property (including but not limited to its Know-How and other Inventions) except as expressly authorized in this Agreement or as subsequently and expressly authorized by the other party in writing.

 

ARTICLE 6 - ROYALTIES

 

6.1                               Royalties Generally.  Until the later to occur of the later of the following, on a jurisdiction-by-jurisdiction basis: (i) [*]and (ii) [*] after the first commercial sale of the Product, Agile will pay Corium a royalty on Net Sales at a rate to be established by mutual written agreement ([*]) with respect to all Products that are not manufactured by Corium under this Agreement provided that Corium Intellectual Property is embodied in the Product or utilized in its manufacture.  For the avoidance of doubt, the parties acknowledge that sales of Product units manufactured by Corium under this Agreement do not accrue Gross Sales, and accordingly, no royalties shall be payable by Agile on account of such units.

 

6.2                               Timing and Manner of Payment. All royalties accruing under this Agreement shall be paid no later than [*] after the end of the calendar quarter in which such royalties accrued, and shall be accompanied by a written report (and such backup documentation as Corium may reasonably request) demonstrating the computation of such royalty payment.  Payments shall be made in United States dollars without any deduction or withholding for or on account of any taxes, duties, levies, fees or charges except those taxes or duties levied against Corium which are legally required to be withheld by Agile.  Late payments will accrue interest at a rate of [*] per month.

 

6.3                               Books of Account; Audit. Agile shall maintain, and cause its Affiliates and Sublicensees to maintain (if applicable), true and complete books of account containing an accurate record of all data necessary for the proper computation of royalties due from it under this Agreement. So long as any royalties accrue under this Agreement and for a period of [*] thereafter, upon at least [*]business days prior written notice to Agile and prearrangement, Corium will have the right to have an independent auditor selected by Corium audit Agile’s, its Affiliates’, and its Sublicensees’ (if applicable) books, records and accounts for the purpose of verifying the accuracy of the amount of royalties reported by Agile.  Any such audit shall be conducted during the normal business hours of the audited party and no more frequently than once per year (except as provided below).  If the auditor concludes that additional royalties were owed during the audited period, Agile will pay such additional royalties plus interest calculated in accordance with Section 6.2, within thirty (30) calendar days of the date Corium delivers the auditor’s written report to Agile.  If the auditor concludes that that royalties were overpaid during the audited period, Corium will, within thirty (30) days after the audit report, refund to Agile all amounts overpaid.  Corium will pay the fees and expenses charged by the auditor; provided, however, if the audit indicates that the royalties payable by Agile for the audited period are more than [*] of the amounts actually paid for such period, then Agile will pay the reasonable fees and expenses charged by the auditor.

 

*Confidential Treatment Requested.

 

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ARTICLE 7 — REPRESENTATIONS AND WARRANTIES

 

7.1                               Mutual Representations and Warranties.  Each of Agile and Corium represents and warrants to the other that: (i) such party has all requisite corporate power to enter into this Agreement, (ii) neither the execution and delivery by such party of this Agreement nor the consummation by such party of the transactions contemplated hereby nor the compliance by such party with any of the provisions hereof will violate any order, writ, injunction, decree, law, statute, rule, regulation, agreement or other restriction applicable to it or require the consent, approval, permission or other authorization of, or qualification or filing with or notice to, any court, arbitrator or other tribunal or any governmental, administrative, regulatory or self-regulatory agency or any other third party, and (iii) this Agreement has been duly executed and delivered by such party and constitutes the legal, valid and binding agreement of such party, enforceable against it in accordance with its terms.

 

7.2                               Non-Infringement Warranties.  Agile represents and warrants that, to the best of its knowledge as of the Effective Date, no third-party intellectual property rights are or will be infringed or otherwise violated by the Agile Background Technology or its use in the manner contemplated by this Agreement.  Corium represents and warrants that, to the best of its knowledge as of the Effective Date, no third-party intellectual property rights are or will be infringed or otherwise violated by the Corium Background Technology or its use in the manner contemplated by this Agreement.

 

7.3                               Product Warranty.  Corium warrants that all Products supplied by Corium shall meet the applicable Product Specification, shall be free from material defects in materials or workmanship, and shall be manufactured in compliance with all applicable laws and cGMP.  Subject to Sections 7.4 and 8.1 below (and without limiting the remedies and indemnification obligations set forth therein), Agile’s sole and exclusive remedy for breach of warranty shall be for Corium, at its election, to replace the non-conforming Products or refund Agile’s purchase price for such Products.

 

7.4                               Recalls and Market Withdrawals.  In the event Agile determines an event, incident or circumstance has occurred that may result in the need for a recall or market withdrawal of any Products manufactured by Corium under this Agreement, and any such recall or similar action is required as a result of Corium’s improper manufacture or packaging of the Product, Corium shall bear the expenses of such recall or similar action, up to a limit of: (i) [*] (ii) [*].  Such expenses of recall shall include, without limitation and without duplication (but subject to the limit identified above), [*].  The rights of Agile under this Section 7.4 shall be in addition to, and not in lieu of, any other rights that Agile may have under this Agreement.

 

7.5                               Disclaimer.  THE WARRANTIES SET FORTH IN SECTION 7.3 ABOVE ARE CORIUM’S EXCLUSIVE WARRANTIES TO AGILE WITH RESPECT TO THE PRODUCT AND CORIUM’S MANUFACTURE THEREOF, AND ARE GIVEN AND ACCEPTED IN LIEU OF ANY AND ALL OTHER WARRANTIES, GUARANTEES, CONDITIONS AND REPRESENTATIONS, EXPRESS OR IMPLIED, CONCERNING THE PRODUCT OR ITS MANUFACTURE.  IN PARTICULAR, AND WITHOUT LIMITING THE FOREGOING, CORIUM DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE.

 

*Confidential Treatment Requested.

 

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ARTICLE 8 - INDEMNIFICATION; INSURANCE

 

8.1                               By Corium.  Corium agrees to defend, indemnify and hold Agile, its officers, employees and agents harmless from and against any and all losses, damages, fines, costs, claims, demands, judgments and liability to, from and in favor of third parties resulting from, or relating to: (i) Corium’s breach of its representations or warranties under Sections 7.1 through 7.3 of this Agreement, or (ii) the gross negligence or willful misconduct of Corium or any of its employees, contractors or agents related to the development, manufacture, packaging or testing of the Product, in each case except to the extent that any such losses, damages, fines, costs, claims, demands, judgments and liability are due to the negligence or wrongful act(s) of Agile, its officers, employees or agents.

 

8.2                               By Agile.  Agile agrees to defend, indemnify and hold Corium, its officers, employees and agents harmless from and against any and all losses, damages, fines, costs, claims, demands, judgments and liability to, from and in favor of third parties resulting from, or relating to: (i) Agile’s breach of its representations or warranties under Article 7 of this Agreement, (ii) any actions or omissions of Agile or any of its employees, contractors, licensees, Sublicensees, customers or agents related to the development, testing, manufacture, marketing, sale, commercialization, use, or misuse of the Product, including without limitation clinical studies and trials, or (iii) any product liability claims relating to the Product, in each case except to the extent that any of the foregoing losses, damages, fines, costs, claims, demands, judgments and liability are due to the negligence or wrongful act(s) of Corium, its officers, employees or agents.

 

8.3                               Procedure.  To obtain indemnification under this Article, the party seeking indemnification must: (i) promptly notify the other party of the claim; (ii) tender full authority and control over the defense and settlement of the claim to the indemnifying party; and (iii) provide the indemnifying party (at the latter’s request and expense) with all reasonably necessary information and cooperation in such defense and settlement.  The indemnifying party shall not enter into any settlement that adversely affects the other party’s interests without such other party’s prior consent.  The indemnified party shall be entitled to participate in any proceedings on its own behalf and at its own expense.

 

8.4                               Insurance.  Corium shall maintain appropriate general liability and products liability insurance at all times necessary to insure its indemnification obligations under this Agreement.  Each such policy shall name Agile as an additional insured.

 

ARTICLE 9 - LIMITATION OF LIABILITY

 

9.1                               Exclusion of Damages.  EXCEPT FOR LIABILITY ARISING UNDER SECTION 7.4 (WHICH IS SUBJECT TO THE SEPARATE LIMITATION SET FORTH THEREIN) AND EXCEPT FOR THE PARTIES’ INDEMNIFICATION OBLIGATIONS UNDER ARTICLE 8 OR CONFIDENTIALITY OBLIGATIONS UNDER ARTICLE 4, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, OR FOR COSTS OF PROCURING SUBSTITUTE PRODUCTS, WHETHER THE CLAIM IS BASED UPON CONTRACT, WARRANTY, TORT, NEGLIGENCE, PRODUCT LIABILITY, OR STRICT

 

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LIABILITY THEORIES OR OTHERWISE RELATES TO THE FAILURE TO PERFORM ANY OBLIGATIONS SET FORTH HEREIN.

 

9.2                               Liability Limitation.  EXCEPT FOR LIABILITY ARISING UNDER SECTION 7.4 (WHICH IS SUBJECT TO THE SEPARATE LIMITATION SET FORTH THEREIN) AND EXCEPT FOR CORIUM’S INDEMNIFICATION OBLIGATIONS UNDER ARTICLE 8 OR BREACH OF ITS CONFIDENTIALITY OBLIGATIONS UNDER ARTICLE 4, IN NO EVENT SHALL CORIUM’S LIABILITY TO AGILE IN CONNECTION WITH THIS AGREEMENT FOR ALL CAUSES OF ACTION AND UNDER ALL THEORIES OF LIABILITY EXCEED [*].

 

9.3                               Scope of Exclusions and Limitations.  THE FOREGOING LIMITATIONS AND EXCLUSIONS ARE AN ESSENTIAL BASIS OF THE BARGAIN BETWEEN PARTIES, AND THE PARTIES AGREE THAT THESE LIMITATIONS WILL SURVIVE AND APPLY WHETHER OR NOT A PARTY HAS BEEN NOTIFIED OF THE POSSIBILITY OF ANY PARTICULAR DAMAGES, AND EVEN IF ANY LIMITED REMEDY SPECIFIED IN THIS AGREEMENT IS FOUND TO HAVE FAILED OF ITS ESSENTIAL PURPOSE OR OTHERWISE.  THIS ARTICLE 9 SHALL NOT, HOWEVER, BE CONSTRUED AS LIMITING EITHER PARTY’S LIABILITY FOR INFRINGEMENT OR MISAPPROPRIATION OF THE OTHER PARTY’S INTELLECTUAL PROPERTY RIGHTS.

 

ARTICLE 10 - TERM AND TERMINATION: MODIFICATION OF RIGHTS

 

10.1                        Term.  The term of this Agreement (the “Term”) shall commence on the Effective Date and shall continue until the earlier of (i) termination pursuant to Section 10.2, or (ii) the end of the Exclusive Supply Period.

 

10.2                        Termination Events. This Agreement shall be terminated only in the following manner, upon the occurrence of any of the events set forth in this Section 10.2:

 

(a)                                 The parties may terminate this Agreement at any time by written mutual agreement.

 

(b)                                 Either party may terminate this Agreement upon a material breach by the other party; provided that the terminating party shall provide the breaching party with a written notice reasonably detailing such breach and such breach or default is not cured within [*] after receipt of such notice.

 

(c)                                  Agile may terminate this Agreement upon ten (10) days’ prior written notice to Corium upon the occurrence of any of the following events: (i) [*]; (ii) [*]; or (iii) [*].

 

10.3                        Effect of Termination.  Upon expiration or termination of this Agreement: (i) the Exclusive Supply Period shall be deemed to have ended notwithstanding anything to the contrary herein; (ii) at the request of Agile, Corium will deliver any work-in-process and Agile-owned equipment to Agile; (iii) Agile will pay Corium any earned but unpaid milestone payments and reimburse Corium, at Corium’s standard rates, for any uncompensated labor, materials, supplies, equipment, and incidental costs (to the extent such costs were consistent with the Development

 

*Confidential Treatment Requested.

 

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Program and then-current Budget and were incurred prior to the expiration or termination date); and (iv) subject to Sections 10.4, 10.5 and 10.6 below, all of the parties’ other rights and obligations under this Agreement shall cease.

 

10.4                        Survival of Licenses.  The licenses granted to Agile under Section 5.2(b) shall survive expiration or termination of this Agreement on a perpetual basis; provided, however, that the license granted to Agile under Section 5.2(b) shall remain subject to Agile’s continuing payment of all applicable royalties and its ongoing compliance with the other conditions, restrictions and limitations of such license.  Agile acknowledges that the license granted under Section 5.2(b) is subject to termination, independent of the rest of this Agreement, in the event that Agile violates any of those conditions, restrictions or limitations (including but not limited to Agile’s royalty obligations, as applicable).  Notwithstanding anything to the contrary set forth in this Agreement, Agile may terminate the license granted to Agile under Section 5.2(b) at any time upon written notice to Corium.

 

10.5                        Survival.  The following provisions shall survive any termination or expiration of this Agreement:  Article 1, Section 2.8 (to the extent of any unpaid amounts), Section 2.9, Article 4, Section 5.1, Section 5.2(b) and (c) (subject to Section 10.4 above), Section 5.4, Articles 6 through 9, Sections 10.2(b) through 10.6, and Article 11.

 

10.6                        Rights on Termination.  Expiration or termination of this Agreement for any reason shall be without prejudice to (i) either party’s rights under this Agreement with respect to claims arising out of events occurring prior to such expiration or termination; (ii) Corium’s right to receive all payments owed or accrued under this Agreement for periods prior to the date of expiration or termination; and (iii) any other remedies which either party may otherwise have.

 

ARTICLE 11 — MISCELLANEOUS

 

11.1                        Waiver and Amendment. Any waiver by any party hereto of a breach of any provisions of this Agreement shall not be implied and shall not be valid unless such waiver is recited in writing and signed by such party. Failure of any party to require, in one or more instances, performance by the other party in strict accordance with the terms and conditions of this Agreement shall not be deemed a waiver or relinquishment of the future performance of any such terms or conditions or of any other terms and conditions of this Agreement. A waiver by either party of any term or condition of this Agreement shall not be deemed or construed to be a waiver of such term or condition for any other term. All rights, remedies, undertakings, obligations and agreements contained in this Agreement shall be cumulative and none of them shall be a limitation of any other remedy, right, undertaking, obligation or agreement of either party. This Agreement may not be amended except in writing, signed by both parties.

 

11.2                        Relationship of the Parties. For all purposes of this Agreement, Corium and Agile shall be deemed to be independent entities and anything in this Agreement to the contrary notwithstanding, nothing herein shall be deemed to constitute Corium and Agile as partners, joint ventures, co-owners, an association or any entity separate and apart from each party itself, nor shall this Agreement constitute any party hereto an employee or agent, legal or otherwise, of the other party for any purposes whatsoever. Neither party hereto is authorized to make any statements or representations on behalf of the other party or in any way obligate the other party,

 

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except as expressly authorized in writing by the other party. Anything in this Agreement to the contrary notwithstanding, no party hereto shall assume nor shall be liable for any liabilities or obligations of the other party, whether past, present or future.

 

11.3                        Headings. The headings set forth at the beginning of the various Articles of this Agreement are for reference and convenience and shall not affect the meanings of the provisions of this Agreement.

 

11.4                        Notices. Notices required under this Agreement shall be in writing and sent by registered or certified mail, postage prepaid, or by telex or facsimile and confirmed by registered or certified mail and addressed as follows:

 

If to Agile:                                      Agile Therapeutics, Inc.

366 Wall Street

Princeton, NJ  08540

Facsimile:  (609) 347-5860

Attention: President

 

with a copy to:

Kathleen M. Shay, Esq.

Duane Morris LLP

30 South 17th Street

Philadelphia, PA 19103-4196

Facsimile: (215) 979-1020

 

If to Corium:                        Corium International, Inc.

2686 Middlefield Road

Redwood City, CA 94063

Facsimile: (650) 298-8012

Attention: President

 

With a copy to:

Ralph Pais, Esq.

Fenwick & West LLP

Silicon Valley Center

801 California Street

Mountain View, CA 94041

Facsimile:  (650) 938-5200

 

All notices shall be deemed to be effective five days after the date of mailing or upon receipt if sent by telex or facsimile (but only if followed by certified or registered confirmation). Either party may change the address at which notice is to be received by written notice pursuant to this Section.

 

11.5                        Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, it shall be stricken and the remaining provisions shall remain in full force and effect; provided, however, that if a provision is stricken so as to

 

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significantly alter the economic arrangements of this Agreement, the parties agree to negotiate in good faith modifications to this Agreement to effectuate the initial intent of this Agreement.

 

11.6        Assignment. This Agreement shall not be assigned by either party without the prior written consent of the other party, which consent shall not be unreasonably withheld, delayed or conditioned, except that either party may assign this Agreement, in whole or in part, to any successor (including the surviving company in any consolidation, reorganization or merger) or assignee of all or substantially all of its assets or business.  Any attempted assignment in violation of the foregoing shall be void and without effect.  This Agreement will be binding upon any permitted assignee of either party.  No assignment shall have the effect of relieving any party to this Agreement of any of its obligations hereunder.

 

11.7        Event of Force Majeure.  Except with respect to the payment of money due, neither party shall be responsible or liable to the other hereunder for the failure or delay in the performance of this Agreement due to any civil unrest, war, fire, earthquake, hurricane, accident or other casualty, or any labor disturbance or act of God or the public enemy, or any other contingency beyond the party’s reasonable control. In the event of the applicability of this Section 11.7, the party failing or delaying performance shall use its commercially reasonable efforts to eliminate, cure and overcome any of such causes and resume the performance of its obligations. Upon the occurrence of an event of force majeure, the party failing or delaying performance shall promptly notify the other party, in writing, setting forth the nature of the occurrence, its expected duration and how such party’s performance is affected. The failing or delaying party shall resume performance of its obligations hereunder as soon as practicable after the force majeure event ceases.

 

11.8        Public Disclosure. Neither party shall disclose to third parties, nor originate any publicity, news release or public announcement, written or oral, whether to the public, the press, stockholders or otherwise, referring to the existence or terms of this Agreement, the subject matter to which it relates, the performance under it or any of its specific terms and conditions, except as required by law, without the prior written consent of the other party. If a party decides to make an announcement, it will give the other party such notice as is reasonably practicable and an opportunity to comment upon the announcement.

 

11.9        Injunctive Relief.  Each party acknowledges that any breach of its confidentiality obligations or any license conditions, limitations or restrictions set forth in this Agreement will cause the other party irreparable harm that may not be remedied by money damages alone.  Accordingly, either party shall be entitled to obtain interim and/or permanent injunctive relief in any court of competent jurisdiction to prevent or remedy any threatened or actual breach of the nature describe above.

 

11.10      Non-Solicitation.  Each party agrees that, during the term of this Agreement and for a period of one (1) year thereafter, it will not: (i) solicit, directly or indirectly, the employment, hiring, engagement as a consultant, or other retention of any employee of the other party; or (ii) induce any such employee to leave the employ of the other party.  This Section shall not be construed as prohibiting either party from generally advertising its employment opportunities (for example, on its website, in general newspaper ads, or at job fairs) or from hiring any employee of the other party who responds to such advertisements.

 

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11.11      Entire Agreement. This Agreement, including the exhibits hereto, sets forth the entire understanding between the parties hereto as to the subject matter hereof and supersedes all other documents, agreements (including any pre-existing confidentiality agreement between the parties, except that the Confidential Information provided under such confidentiality agreement shall be deemed to have been provided hereunder), verbal consents, arrangements and understandings by or between the parties with respect to the subject matter hereof.

 

11.12      Governing Law. This Agreement shall be governed by, and construed, and enforced in accordance with the substantive laws of the State of New York, without giving effect to its rules concerning conflicts of laws.

 

11.13      Dispute Resolution.  The parties recognize that a bona fide dispute as to certain matters may arise from time to time during the term of this Agreement that may relate to the parties’ rights and obligations hereunder.  The parties agree that they shall use reasonable efforts to resolve any dispute that may arise in an amicable matter, which efforts will include without limitation those procedures specified in Section 2.5, for a minimum of thirty (30) days prior to seeking legal recourse on account of such dispute.  This Section shall not be construed as prohibiting either party from seeking immediate injunctive or other equitable relief in order to protect its confidentiality or intellectual property interests, as contemplated above.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their duly authorized representatives.

 

 

	
CORIUM INTERNATIONAL, INC.
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
/s/   Adrian Faasse
    	
 
    
	
 
    	
Name:
    	
Adrian   Faasse
    	
 
    
	
 
    	
Title:
    	
Chairman   & CEO
    	
 
    
	
 
    	
Date:
    	
10/17/06
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
AGILE THERAPEUTICS, INC.
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
/s/   Thomas M. Rossi
    	
 
    
	
 
    	
Name:
    	
Thomas   M. Rossi
    	
 
    
	
 
    	
Title:
    	
CEO   & President
    	
 
    
	
 
    	
Date:
    	
18   OCT 06
    	
 
    

 

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EXHIBIT A

 

PRODUCT DESCRIPTION

 

The Product will comply with the following [*] Specifications and subsequent revisions:

 

[*]

 

In addition, the following minimum quality standards are applicable:

 

·                  Compliance with the Active formulation quantitative compositional label claims and ranges.

 

·                  Compliance with qualitative compositional label claims for overall patch construction.

 

·                  GMP adherence to filed ICH stability programs as set forth in Agile’s IND and/or other Regulatory submission(s) and agreed upon by the Working Committee.

 

·                  Additional agreed upon, but not regulatory attributes or specifications that exist or are developed in response to the project development plan.  For example, [*].

 

·                  Conduct of component and product testing, release and stability assessment according to accepted cGMP standards including such attributes as linearity, precision, accuracy, recovery, transferability, and, general stability-indicating characteristics.

 

·                  Product “in process” and finished product manufacturing controls that meet minimal US Regulatory (FDA) standards of cGMP or requirements established by other regulatory submission(s) and agreed upon by the Working Committee.

 

·                  Adherence to cGMP record keeping requirements to facilitate complete and rapid review of expected raw material records, batch records, testing, release, and, stability data associated with either a General GMP or Pre-Approval Inspection of the Corium facilities or Product-specific documentation.

 

The Specifications for the integrated overlay system are as follows:

 

The integrated overlay system, including packaging design, will be developed as part of this agreement.  Corium and Agile agree to develop mutually acceptable specifications with the following general targets:

 

·                  [*]

 

*Confidential Treatment Requested.

 

23

 

EXHIBIT B

 

TASKS AND TIMELINE [*]

 

Confidential treatment is requested for the following three pages.

 

*Confidential Treatment Requested.

 

24

 

EXHIBIT C

 

BUDGET

 

Stage 1

 

Process Development, Analytical Validation and Phase II/II Manufacture

Estimated Time: [*]

 

	
Deliverables
    	
 
    	
Budget
    
	
Project   Management  

·      Project   timeline & budget management 

·      Project   deliverable and critical path tracking 

·      Project   oversight and review 

·      GMP   document tracking and management
    	
 
    	
[*]
    
	
 
    	
 
    	
 
    
	
Phase   II/III Process Development and Materials Optimization  

[*]
    	
 
    	
[*]
    
	
 
    	
 
    	
 
    
	
Process   Development Stability  

·      [*]
    	
 
    	
[*]
    
	
 
    	
 
    	
 
    
	
Engineering   Support and Equipment Qualification  

[*]
    	
 
    	
[*]
    
	
 
    	
 
    	
 
    
	
Manufacture   and Release of Phase II or III Supplies  

[*]
    	
 
    	
[*]
    
	
 
    	
 
    	
 
    
	
Regulatory/QA  

·      Regulatory oversight of clinical manufacturing and   qualifications, including deviation, non-conformance, corrective action and   all other guidance and support per cGMP compliance. 

·      Unexecuted batch record review and approval 

·      IND documentation gathering and approval, including   product/process development reports and all other IND Support documentation. 

·      Cleaning validation/verification protocol review and approval
    	
 
    	
[*]
    
	
 
    	
 
    	
 
    
	
Phase   II/III Stability  
    	
 
    	
[*]
    
	
·      [*]
    	
 
    	
 
    

 

*Confidential Treatment Requested.

 

25

 

	
Analytical 
    	
 
    	
[*]
    
	
·      [*]
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Materials &   Supplies  

·      R&D,   analytical, and production supplies 

·      Includes all materials for process development, equipment   qualification and Phase III manufacturing 

·      May also include miscellaneous costs such as testing of   incoming materials at outside laboratories for full compendial testing on   Phase III materials or safety supplies used in the handling of Levo and EE 

·      [*] of each chemical raw material will be ordered
    	
 
    	
[*]
    
	
 
    	
 
    	
 
    
	
Equipment   (Dedicated equipment is owned by Agile)  

[*]
    	
 
    	
[*]
    
	
 
    	
 
    	
 
    
	
Total
    	
 
    	
Labor   = [*]

Ded   Equip = [*] 

M&S   = [*]
    

 

Assumptions

 

·                  Budget assumes material vendors are identified and no supply chain issues exist.

·                  Costs for equipment shipping, installation and shipping insurance will be passed through to Agile.

·                  Microbial Limits Testing (“MLT”) will be conducted by an outside lab and costs will be passed through to Agile.

·                  Corium will perform raw material testing for all materials within their capabilities and capacities; testing for other materials will be outsourced to approved contract laboratories and costs will be passed through to Agile.

·                  All clinical trial costs are the responsibility of Agile.

·                  Budget and timeline are contingent on final product configuration as outlined in the schedule.  [*].  If an alternative integrated system is required due to integrated design, Corium and Agile will review and agree upon final costs once design is final.

 

*Confidential Treatment Requested.

 

26

 

Stage 2

 

Clinical Evaluation, Production Scale Up & NDA Approval

Estimated Time: [*]

 

The following is an estimated budget for post-Phase III production and release requested by Agile.  This budget will be finalized as a deliverable of Stage 1 activities and based on the scope of work moving forward.  This budget represents a draft forecast of estimated costs between Phase III and commercial production and will be impacted significantly by finished product design and planned NDA filing timeline.

 

	
Deliverable
    	
 
    	
Estimated Budget
    
	
Project   Management  

·      Project   timeline & budget management 

·      Project   deliverable and critical path tracking 

·      Project   oversight and review 

·      GMP   document tracking and management
    	
 
    	
[*]
    
	
 
    	
 
    	
 
    
	
Commercialization   Process Development 
    	
 
    	
[*]
    
	
·      Scale   up to commercial quantities and batch sizes. 

·      Commercial   scale batch records
    	
 
    	
Formal   Process Validation will be billed as part of piece price for validation lots.   Annual FDA stability will be billed as part of commercial piece price.
    
	
 
    	
 
    	
 
    
	
Engineering   Support and Equipment Qualification  

·      Includes   the installation of commercial equipment and tooling.
    	
 
    	
[*]
    
	
 
    	
 
    	
 
    
	
Regulatory/QA  

·      NDA   filing support 

·      PAI reparation   and review 

·      Unexecuted   commercial batch record review and approval
    	
 
    	
[*]
    

 

*Confidential Treatment Requested.

 

27

 

	
Equipment
    	
 
    	
[*]
    
	
 
    	
 
    	
 
    
	
Materials &   Supplies  

·      R&D, analytical, and production supplies 

·      Includes all materials for process development, equipment   qualification and commercial manufacturing 

·      May also include miscellaneous costs, such as testing of   incoming materials at outside laboratories for full compendial testing on   Phase III materials or safety supplies used in the handling of   Levo-norgestrel and Ethinyl Estradiol. 

·      Agile will be billed only for costs incurred [*]. Any costs   above this will be approved in advance.
    	
 
    	
[*]
    
	
 
    	
 
    	
 
    
	
Total
    	
 
    	
Labor = [*]

Ded Equip = [*]
    
	
 
    	
 
    	
M&S = [*]
    

 

*Confidential Treatment Requested.

 

28

 

EXHIBIT D

 

MILESTONES AND PAYMENTS

 

Corium shall invoice Agile for the following expenses and Agile shall pay Corium for such expenses as set forth in Section 2.8.

 

Labor

 

Agile shall make the following milestone payments totaling [*] to Corium for its labor expense under the Agreement:

 

1.              A non-refundable Prepayment of [*] to commence the Development Program (representing [*] of the total labor budget) due upon Effective Date. Corium will issue a credit to Agile for any expenses incurred by Corium and reimbursed by Agile for activities covered in this Agreement that were invoiced by Corium prior to the Effective Date.

 

2.              [*] (representing [*] of the total labor budget) upon completion of Milestone 1 set forth in Exhibit B.

 

3.              [*] (representing [*] of the total labor budget) upon completion of Milestone 2 set forth in Exhibit B.

 

4.              Four (4) equal quarterly payments of [*] (each representing [*] of the total labor budget) with the first payment beginning [*] days after Effective Date.

 

5.              [*] (representing [*] of the total labor budget) upon completion of Milestone 3 and Milestone 4 set forth in Exhibit B.

 

6.              [*] (representing [*] of the total labor budget) upon completion of Milestone 5 set forth in Exhibit B, provided however, in the event that Agile requests that Corium delay the initiation of stability of active lots 2 and 3 for longer than [*] from the initiation of stability on active lot 1, such milestone payment will be due [*] from the completion of [*] commercial-scale stability on active lot 1.

 

7.              [*] (representing [*] of the total labor budget) upon completion of Milestone 6 set forth in Exhibit B, provided however, in the event that Agile requests that Corium delay the initiation of stability of active lots 2 and 3 for longer than [*]from the initiation of stability on active lot 1, such milestone payment will be due [*] from the completion of [*]commercial-scale stability on active lot 1.

 

In addition to the milestone payments for Corium’s labor expense under the Agreement, Agile shall pay for the following additional expenses:

 

*Confidential Treatment Requested.

 

29

 

Materials and Supplies

 

All materials and supplies purchased by Corium in the performance of the Development Program will be billed to Agile at Corium’s cost plus [*].

 

Equipment

 

The purchase of equipment identified in Exhibit C will be billed to Agile at Corium’s cost.

 

Other Expenses

 

Travel and other out-of-pocket expenses incurred by Corium in the performance of the Development Program will be billed to Agile at Corium’s cost.

 

*Confidential Treatment Requested.

 

30

 

Addendum to the Development, License and Commercialization Agreement

 

This Addendum to Development, License and Commercialization Agreement is made and entered into as of January 10, 2012, by and between Agile Therapeutics, Inc. (“Agile”) and Corium International, Inc. (“Corium”).

 

Recitals

 

A.    Agile and Corium entered into the Development, License and Commercialization Agreement dated effective October 18, 2006 (the “DLC Agreement”), relating to the development, license manufacture and supply of a certain product now known as AG200-15, a transdermal contraceptive patch that delivers levonorgestrel and ethinyl estradiol (“AG200-15”).  Unless otherwise defined in this Addendum capitalized terms used herein will have the same meaning as in the DLC Agreement.

 

B.    The parties have agreed to certain clarifications and modifications to the DLC Agreement, as set forth in this Addendum.

 

NOW, THEREFORE, in consideration of the above premises and mutual covenants contained herein, and intending to be mutually bound thereby, Agile and Corium hereby agree to amend the DLC Agreement as follows:

 

1.     AG900 Product.  The parties agree that the levonorgestrel-only transdermal contraceptive product that was the subject of the Phase 1 Clinical Supply Agreement dated March 13, 2009 between the parties, and which is now referred to as AG900, and any formulation variant of such product that arises as a result of Agile’s development activities of that specific transdermal contraceptive product (collectively, the “AG900 Product”) shall be included as a “Product” under the DLC Agreement on substantially the same basis as the AG200-15 Product, with appropriate adjustments to provisions relating to the Development Program to reflect the status of the AG900 Product as mutually agreed upon by the parties in writing.  The AG 900 Product, after its first commercial sale, will be included in the calculation of the number of units manufactured for purposes of Section 3.2.

 

2.     Exclusivity.  Section 3.2 of the DLC Agreement is replaced in its entirety with the following:

 

“3.2  Exclusivity.  During the “Exclusive Supply Period” (as defined below), or such other period as the parties may mutually agree upon in writing, Agile will purchase all of its requirements of Product exclusively from Corium in consideration of Corium’s agreement to supply the Products pursuant to Section 3.1, and subject to the provisions of Section 3.4 below.  The “Exclusive Supply Period” means the period commencing with the Launch Date and continuing until Corium has manufactured and released for commercial use, from each of the [*] coating lines used for commercial manufacture the Product, [*] units of Product.  (For the purposes of this provision, a “unit” means one patch; and “Product” refers to the AG200-15 Product and the AG900 Product.)  If Product demand exceeds the capacity of the [*] coating lines prior to reaching the [*] unit level referred to above, Agile and Corium will work together in good faith to ensure that the market continues to be supplied.”

 

3.     Supply Terms.  Section 3.3(f) of the DLC Agreement shall be amended by adding the following at the end of that section:

 

“With each order, Agile will purchase a minimum of [*] of finished Product (which will have an estimated quantity of [*]).  Following Product launch, Corium will maintain a minimum amount of raw material inventory to support the supply provisions described in Section 3.3(c).  In the event Agile requires Corium to carry a stock of peripheral laminate material beyond the requirements of Section 3.3(c), Agile will issue separate orders for such peripheral laminate quantities and pay Corium on an “up front” basis to manufacture and maintain inventory of the peripheral laminate, which payments will be credited to Agile in Corium’s invoices for finished Product that incorporates such peripheral laminate, when the finished Product orders are filled.”

 

4.     Additional Provisions.  The parties have also identified the following areas for which they agree to discuss and negotiate in good faith provisions to be incorporated in an additional addendum to the DLC Agreement by [*]; mechanisms for covering the costs of idle time in manufacturing operations, and provisions regarding the use, 

 

*Confidential Treatment Requested.

 

 

maintenance and repair of Agile-owned equipment.  The parties will also review and discuss whether other provisions should be included in a future addendum to the DLC Agreement.

 

5.     Conflicting Terms, Binding Effect.  In the event of any inconsistency or conflict between the DLC Agreement and this Addendum, the terms, conditions and provisions of this Addendum shall govern and control.  Except as expressly modified by this Addendum, the DLC Agreement remains in full force and effect.  The terms of this Addendum are binding on any successor in interest of either party to the same extent as set forth in the DLC Agreement.

 

6.     Counterparts; Signatures.  This Addendum may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.  This Addendum may be executed and delivered by facsimile and upon such delivery the facsimile signature will be deemed to have the same effect as if the original signature had been delivered to the other party.

 

IN WITNESS WHEREOF, the undersigned have executed this Addendum as of the date set forth above.

 

 

	
Agile Therapeutics, Inc.
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   AL ALTOMARI
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
AL   ALTOMARI
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
CEO
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Corium International, Inc.
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Peter D Staple
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Peter   D Staple
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
President   & CEO
    	
 
    

 

2

 

Addendum No. 2 to Development, License and Commercialization Agreement

 

This Addendum No. 2 to Development, License and Commercialization Agreement is made and entered into as of February 6, 2013, by and between Agile Therapeutics, Inc. (“Agile”) and Corium International, Inc. (“Corium”).

 

Recitals

 

A.    Agile and Corium entered into the Development, License and Commercialization Agreement dated effective October 18, 2006, and amended such agreement with an Addendum dated January 10, 2012 (together, as amended, the “DLC Agreement”), relating to the development, license, manufacture and supply of a certain product now known as AG200-15, a transdermal contraceptive patch containing levonorgestrel and ethinyl estradiol (“AG200- 15”).  Unless otherwise defined in this Amendment, capitalized terms used herein will have the same meaning as in the DLC Agreement.  The parties have also entered into an agreement adopting a Commercial Proposal dated as of March 22, 2012 (the “Commercial Proposal”), pursuant to which the parties agreed upon a plan and financial terms relating to the preparations required for Corium to manufacture the AG200-15 product for the commercial launch and subsequent ongoing commercial supply of the AG200-15 product.

 

B.    As provided in the DLC Agreement, the parties will negotiate in good faith a comprehensive amended and restated agreement that incorporates the commercial terms that are included in the DLC Agreement, as amended, and such additional terms as the parties agree are appropriate.

 

C.    In accordance with the Commercial Proposal, both parties are making substantial investments and ongoing commitments in facilities, equipment and personnel in order to prepare for the commercial launch of AG200-15.  In the case of Corium, such investments and commitments are being made after discussion and review with Agile, and are based on Agile’s plans and projections for AG200-15.  The parties agreed in the Commercial Proposal that certain charges would be applicable relating to the costs of the idle facilities, and have agreed to supplement the provisions of the DLC Agreement and the Commercial Proposal with this Amendment in order to provide clarity and assurance to the parties to facilitate such further investments.

 

NOW, THEREFORE, in consideration of the above premises and mutual covenants contained herein, and intending to be mutually bound thereby, Agile and Corium hereby agree to amend the DLC Agreement as follows:

 

1.              Program Continuity; Program Delay Charges.

 

With respect to the pre-launch activities that are provided for under the Commercial Proposal, Agile has requested that Corium delay the process validation activities to be consistent with a [*] commercial launch (instead of the initially planned [*] launch).  All other activities under the Commercial Proposal, with the exception of ancillary equipment and material purchase orders greater than $5000, will continue to completion without delays.  Before making any additional commitments for the purchase of materials or ancillary equipment over $5000, Corium will obtain written approval from Agile.  To accommodate this revised schedule, and assure program continuity, the Parties agree to operate under the following terms leading up to the initiation of process validation:

 

a.         Pre Validation.  Agile will pay Corium monthly “Delay Costs” starting [*], until such time that the Purchase Order(s) for Validation lots (“Validation Purchase Orders”) are issued to Corium.  This Delay Cost is [*] and is intended to reimburse Corium Building 51 facility costs to include rent, utilities, etc.  Such Delay Costs will also be in effect for any period of delay initiated by Agile after the issuance of the Validation Purchase Orders and before completion of process validation.  In the month that the first Purchase Order(s) for Validation lots are accepted by Corium, the monthly Delay Cost for that month will be prorated back to the PO date.  If there is a delay to Validation Purchase Order(s) acceptance by Corium due to negligent actions of Corium, the payment of Delay Costs will be suspended for the period of such delay caused by Corium.  If Validation Purchase Order(s) are not issued by Agile prior to the expected completion date of the commercial equipment qualifications, Building 51 facility qualifications, and commercial process development report [*], the monthly delay cost will be increased to account for program-critical personnel who remain on staff.  This increased incremental amount will not exceed [*].  

 

*Confidential Treatment Requested.

 

 

Corium will use reasonable efforts to redeploy these personnel to minimize cost to Agile after agreement by Agile on the timeline impacts of such redeployment.  At the end of each quarter, Corium will invoice Agile and provide a detailed breakdown of the Delay Costs for such billing period.  Agile shall pay this incremental increase amount within [*] after receipt of such notice from Corium.

 

2.              Validation Purchase Orders.

 

a.         Validation.  Note that the three validation activities shown below, which are designated by reference to the primary coating machine (CL3 or CL4), include all related upstream and downstream processing.  Agile will place the Purchase Order(s) for Validation, as referenced in the Commercial Proposal, as follows:

 

(1)         CL4 – Process Validation of [*] – Process validation cost estimate is [*]5.  This cost will be covered by Agile through the issuance of purchase order(s) [*] prior to scheduled release of process validation batches.  Purchase order payment will be as follows: [*] due upon [*], [*] for [*].  The balance [*] is due upon[*] .

(2)         CL3 – Process Validation of [*] – Process validation cost estimate is [*].  This cost will be covered by Agile through the issuance of purchase order(s) [*] prior to scheduled release of process validation batches.  Purchase order payment will be as follows: [*] due upon [*], [*] for [*].  The [*] is due upon [*].

(3)         CL3 – Process Validation of [*] – Process validation cost estimate is [*].  This cost will be covered by Agile through the issuance of purchase order(s) [*] prior to scheduled release of process validation batches.  Purchase order payment will be as follows: [*] due upon [*], [*] for [*].  The balance of [*] is due upon [*].

 

3.              Program Continuity: Post-Validation Idle Facility Charges.

 

a.              Post Validation.  This phase begins after the completion of process validation through completion and approval of Corium’s process validation report for AG200-15 (for all, steps of the commercial manufacturing process except for the [*] validation on CL-4).  During this initial commercial production phase Agile agrees to purchase at a minimum annual rate of [*] AG200-15 patches.  As used herein, patch quantity includes all patch production from a production lot, including salable and non-salable (e.g. sample, demonstrator) patches.  In the event that Agile orders fewer patches than the minimum [*], Agile will pay “Idle Facility Charges” (IFC) based on Building 51 “Facility Costs” (FC) incurred during such calendar quarter (see calculation below).  Facilities costs will be pro-rated against the calculation below for any partial calendar quarter.  As used herein, Facility Costs are defined as fully allocated Building 51 facility and operations costs related to preparing for and manufacturing of the AG200-15 product (including [*]).  At the end of each quarter, Corium will invoice Agile for IFC and provide a detailed breakdown of the Facility Costs for the period in question.  Agile shall pay IFC amounts within [*] after receipt of such notice from Corium.

 

Idle Facility Charges will be calculated as follows:

 

Quarterly orders >[*]patches per quarter, no IFC

 

Quarterly orders > [*] patches per quarter to < [*] patches per quarter, IFC calculated as follows:

 

[*]

 

Quarterly orders < [*]M patches per quarter, payment of full IFC as defined in 3a.

 

4.              Transfer Pricing.

 

a.              Final transfer pricing on the AG200-15 product manufactured on commercial equipment located in Building 51 shall be determined upon completion of process validation.  It is noted that the initial launch quantities of product may be produced using some existing production equipment.  A credit will be 

 

*Confidential Treatment Requested.

 

2

 

applied by Corium to cover the cost of any materials that were previously paid for under the terms of the Commercial Proposal and subsequently used in the manufacture of any process validation or commercially salable product.  Pricing used for initial purchase orders prior to determination of final price is shown below (transfer price per finished patch):

 

	
 
    	
 
    	
Quarterly Production Rate
    	
 
    
	
Material Source
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    
	
CL3 PL CL4 Active
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    
	
CL4 PL CL4 Active
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    

 

5.              Mitigation of Costs.  The parties will discuss in good faith, at the time Delay Costs are payable by Agile, any potential steps that could be taken to reasonably mitigate Delay Costs, and any such steps will be subject to prior agreement of the parties.

 

6.              Non-Compete.  During the exclusivity period as described in the DLC Agreement (and provided Agile either continues to order and purchase product as provided in the DLC Agreement or pays Idle Facility Charges as outlined in Section 3a of this agreement), Corium shall not develop or manufacture a product that is a generic equivalent to AG200-15 or AG890.

 

7.              Survival; Termination.  The provisions of Section 1 and 2 of this Amendment shall continue in effect for five years from the effective date of this Addendum shown above.  The provisions of section 3, 4, 5 and 6 of this Amendment shall continue in effect for five years following the commercial launch of AG200-15, provided that the provisions of sections 3, 5 and 6 shall not extend beyond the period of exclusive supply as described in the DLC Agreement.  The parties further acknowledge and agree that, considering the advanced state of development of the AG200-15 product, no termination of the DLC agreement shall occur or be recognized under Section 10.2(c) of the DLC Agreement.

 

8.              Conflicting Terms, Binding Effect.  In the event of any inconsistency or conflict between the DLC Agreement and this Amendment, the terms, conditions and provisions of this Amendment shall govern and control.  Except as expressly modified by this Amendment, the DLC Agreement remains in full force and effect.  The terms of this Amendment are binding on any successor in interest of either party to the same extent as set forth in the DLC Agreement.

 

9.              Counterparts; Signatures.  This Amendment may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.  This Amendment may be executed and delivered by facsimile and upon such delivery the facsimile signature will be deemed to have the same effect as if the original signature had been delivered to the other party.

 

*Confidential Treatment Requested.

 

3

 

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date set forth above.

 

	
Agile Therapeutics, Inc.
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   AL ALTOMARI
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
AL   ALTOMARI
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
CEO
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Corium International, Inc.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Peter D Staple
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Peter   D Staple
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
President   & CEO
    	
 
    

 

4EXHIBIT 10.20

 

	
 
    	
[*]   Certain   confidential information contained in this document, marked by brackets, has   been omitted and filed separately with the Securities and Exchange Commission   pursuant to Rule 406 of the Securities Act of 1933, as amended.
    

 

DEVELOPMENT, MANUFACTURING AND COMMERCIALIZATION AGREEMENT

 

This Development, Manufacturing and Commercialization Agreement (the “Agreement”) is entered into as of May 5, 2004 (the “Effective Date”) between Corium International, Inc., a Delaware corporation having its principal place of business at 2686 Middlefield Road, Redwood City, CA 94063 and its manufacturing operations at 4558 50th Street, S.E., Grand Rapids, MI  49512, including its Affiliates (“Corium”), and Barr Laboratories, Inc., a Delaware corporation, having its principal place of business at 2 Quaker Road, Pomona, New York 10970-0519, including its Affiliates (including but not limited to Duramed Pharmaceuticals, Inc.) (“Barr”).

 

RECITALS

 

WHEREAS, Corium is in the business of developing and manufacturing  pharmaceutical products and wishes to develop, formulate and prepare the Products (as defined herein) for FDA approval of an ANDA for each Product, and to supply Barr with the Products for the purpose of marketing the Products in the Territory for the joint benefit of Corium and Barr; and

 

WHEREAS, Barr is in the business of developing, manufacturing and marketing pharmaceutical products and wishes to obtain FDA approval of an ANDA for each Product and to market the Products in the Territory for the joint benefit of Corium and Barr;

 

NOW THEREFORE, in consideration of the mutual covenants and promises contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Corium and Barr agree as follows:

 

ARTICLE 1 – DEFINITIONS

 

For purposes of this Agreement, the following terms shall have the respective meanings set forth below:

 

1.01        “Act” shall mean the United States Federal Food, Drug and Cosmetic Act, as amended from time to time, and the regulations promulgated thereunder.

 

 

1.02        “Affiliate” shall mean a corporation or any other entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the designated Party, but only for so long as the relationship exists. “Control” shall mean ownership of shares of stock having at least 50% of the voting power entitled to vote for the election of directors in the case of a corporation.

 

1.03        “ANDA” shall mean, with respect to a Product, an abbreviated New Drug Application (as defined in Title 21 of the U.S Code of Federal Regulations) submitted to the FDA requesting approval to market the Product.

 

1.04        A “Bankruptcy Event” shall mean with respect to a party, any of the following events: (i) such Party files a voluntary petition for relief under Title 11 of the United States Code (the “Bankruptcy Code”); or (ii) there is filed against such Party an involuntary or ancillary petition for relief under the Bankruptcy Code, and either (x) such petition is not dismissed within sixty (60)days after its filing or (y) an order for relief is entered against such Party in such petition; (iii) an action or proceeding is filed with regard to such Party in any court or with any agency in each case having jurisdiction thereof under any statute or regulation (other than the Bankruptcy Code) of any state or country, which is a petition in bankruptcy or insolvency or for the general reorganization of the Party’s financial affairs; or for the appointment of a receiver or trustee over such Party or its assets, and, in the case of a filing against such Party, the action or proceeding is not stayed or dismissed within sixty (60) days after the filing thereof, or (iv) such Party files for dissolution or adopts a plan of liquidation, or (v) such Party makes a general assignment for the benefit of creditors.

 

1.05        “Calendar Quarter” shall mean any of the three-month periods beginning January 1, April 1, July 1 and October 1 of any calendar year.

 

1.06        “Catapres TTS Product” shall mean a clonidine patch, the generic equivalent of Catapres TTS, a product of Boehringer Ingleheim.

 

1.07        “cGMP”“ shall mean those Current Good Manufacturing Practices required by the FDA to be followed in connection with the manufacture of pharmaceutical products, as defined from time to time by the Act and related regulations, as amended, or any successor laws or regulations governing the manufacture, handling, storage and control of the Products in the United States.

 

1.08        “Commercialization” shall mean, with respect to a Product, the activities undertaken to market, promote, sell, and service the Product or have it marketed, promoted, sold or serviced in the Territory.

 

1.09        “Committee” shall have the meaning set forth in paragraph 2.1 herein.

 

1.10        “Confidential Information” shall mean the Corium Know-How, and Technical Information and information pertaining to Corium’s and Barr’s business, products, marketing plans, marketing activities, market projections and related 

 

2

 

matters, in each case provided in writing or otherwise by one Party to the other pursuant to or in furtherance of this Agreement.  Confidential Information shall not include any information which is (i) already known to the recipient prior to the date of disclosure as evidenced by its written records made prior to such date; (ii) publicly known prior to or after disclosure other than through unauthorized acts or omissions of the recipient; (iii) disclosed in good faith to the recipient by a Third Party lawfully and contractually entitled to make such disclosure; (iv) developed by or for the receiving Party without the use of any Confidential Information of the disclosing Party, as evidenced by the receiving Party’s written records; or (v) as set forth in Article III herein. Each Party to this Agreement has the right to use its own Confidential Information, for any purpose, except as specifically restricted herein.

 

1.11        “Development Budget” shall have the meaning set forth in Section 3.1(a) herein.

 

1.12        “Development Costs” shall mean, with respect to a Product, all reasonable out of pocket costs associated with the development of the Product prior to the Launch Date and any related predetermined and agreed upon overheads, whether incurred by Corium or Barr pursuant to the terms and conditions hereof. It is acknowledged and agreed that Corium has incurred Development Costs prior to the Effective Date as set forth on Schedule 1.11 that shall be included in Development Costs pursuant to Section 3.1.

 

1.13        “Development Plans” shall have the meaning set forth in Section 3.2(a).

 

1.14        “Distribution Costs” shall mean, with respect to a Product, the total costs incurred by Barr for a given Calendar Quarter to warehouse and to distribute such Product in the Territory, including but not limited to, freight-out costs and insurance costs. The Parties agree that such Distribution Costs will be deemed to be equal to [*].

 

1.15        “FDA” shall mean the United States Food and Drug Administration or any successor United States governmental agency performing similar functions with respect to pharmaceutical products.

 

1.16        “Fully Allocated Costs” shall mean, with respect to a Product, Corium’s fully allocated cost to manufacture the Product sold in the Territory, including, but not limited to [*].  This cost will be computed by Corium in a manner that is consistent with the then current methods and practices used by Corium to determine the cost of other products manufactured by Corium at its facilities; provided, however, that in any case such methods must be in accordance with U.S. GAAP.

 

1.17        “Gross Sales” shall mean, with respect to a Product, the total amount invoiced by Barr or its Affiliates for sales of the Product in the Territory to third parties, in bona fide arms length transactions, for a given Calendar Quarter.

 

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1.18        “Innovator” shall mean with respect to (i) [*]; (ii) Catapres TTS, Boehringer Ingleheim; (iii) [*], and (iv) with respect to [*].

 

1.19  “Know-How” with respect to a Party shall mean any and all product specifications, processes, product designs, plans, trade secrets, ideas, concepts, manufacturing engineering and other manuals and drawings, standard operating procedures, flow diagrams, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, safety, efficacy, stability, quality assurance, quality control and clinical data, technical information, data, research records, compositions, annual product reviews, process validation reports, analytical method validation reports, specifications for stability trending and process controls, testing and reference standards for impurities and degredation products, technical data packages, chemical and physical characterizations, dissolution test methods and results, formulations for administration, clinical trial reports, regulatory communications and labeling and all other confidential or proprietary technical information that are owned or controlled by such Party and that relate to the Products.

 

1.20        “Launch Date” shall mean, with respect to a Product, the date of first commercial sale of such Product in the Territory by Barr or its Affiliates.

 

 1.21       “Letter of Intent” shall mean that letter of intent agreement dated December 9, 2003 between Barr and Corium.

 

1.22        [*]Product” shall mean a [*] patch, the generic equivalent of [*]a product of [*]

 

1.23        “Listed Patents” shall mean any and all United States Patents listed in Approved Drug Products with Therapeutic Equivalence Evaluation covering a Product or its Active Drug Substance in any of its forms, including United States [*] and [*].

 

1.24        “Net Income” shall mean, with respect to a Product, the Net Sales, less:

 

(a) [*];

(b) [*];

(c) [*];

(d) [*];

(e) [*]; and

(f) [*].

 

1.24        “Net Sales” shall mean, with respect to a Product, the Gross Sales, less accrued costs related to:

 

(a) [*] ;

 

(b) [*];

 

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(c) [*].

 

Notwithstanding the foregoing, sales between Barr and its Affiliates shall be excluded from the calculation of Net Sales unless such Affiliates are end users.

 

1.25        “Orange Book” shall mean the Approved Drug Products book published by 
 the FDA most recently and for subsequent years during the term of this Agreement, including its printed, monthly supplements, and the electronic version of the Orange Book found at http://www.fda.gov/cder/ob/default.htm, or as the site address is amended.

 

1.26        [*] Product” shall mean (i) [*]patch, the generic equivalent of [*], a product of [*].

 

1.27        “Products” shall mean (i) [*]Product, the  Catapres TTS Product and the [*] Product and (ii) the [*] Product, if Barr and Corium decide by December 31, 2004 to develop the [*] Product.

 

1.28        “Product Specification” shall mean, with respect to a Product, the manufacturing, testing, labeling, storage and quality control specification for such Product as set forth in the ANDA as approved by the FDA and in the USP, plus any additional specifications agreed upon in writing by the Parties.

 

1.29        “Program” shall have the meaning set forth in Section 3.1 (a) herein.

 

1.30        “Sales and Marketing Costs” shall mean, with respect to a Product, the total costs incurred by Barr in a given Calendar Quarter to sell the Product in the Territory, including but not limited to, [*]. The Parties agree that such Sales and Marketing Costs will be (i) deemed to be equal to [*], or  (ii) in the event a Third Party markets the Product,  the actual payments made by Barr to the Third Party for such sales or marketing activities.

 

1.31        “Target Achievement Date” shall have the meaning set forth in Section 3.1(a) herein.

 

1.32        “Technical Information” shall mean any and all know-how, patents, patent applications, copyrights, trademarks, trade secrets, inventions, data (including Regulatory Data), technology, processes and information, including improvements and modifications thereto, processes and analytical methodology (“Intellectual Property Rights”) used in the development, testing, analysis and manufacture and medical, bioequivalence and other scientific data prepared or otherwise generated by Corium or Barr, respectively, related to the Products or pursuant to this agreement.

 

1.33        “Territory” shall mean Canada and the United States and its possessions and territories.

 

1.34        “Third Party” shall mean an entity or person that is not a Party to this Agreement or an Affiliate of a Party to this Agreement.

 

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1.35        “Third Party Manufacturer” shall mean a Third Party that enters into a manufacture and supply agreement with Corium or Barr for the manufacture and supply of a Product pursuant to the terms of this Agreement.

 

1.36        “[*] Product” shall mean a [*]patch, the generic equivalent of [*], a product of [*].

 

1.37        “Unit” shall mean, with respect to a Product, one unit of the Product meeting the Product Specifications, which is manufactured in accordance with cGMP, and which is neither adulterated nor misbranded.

 

1.38        “U.S. GAAP” shall mean United States of America generally accepting accounting principles applied on a consistent basis.

 

ARTICLE II  ADVISORY COMMITTEE

 

2.1          Establishment and Composition.  Within thirty (30) days of the Effective Date, the Parties shall establish an advisory committee (the “Committee”), with Corium having the right to appoint up to two (2) representatives on the Committee and Barr having the right to appoint up to two (2) representatives. Such representatives shall include individuals within the management of each Party with expertise in drug development, regulatory, or accounting. Any member of the Committee may designate a substitute to attend and perform the functions of that member at any meeting of the Committee. Each Party may change its representatives so designated at any time at its sole discretion, by providing written notice to the other Party.  Barr shall designate one of its representatives as the chairperson for the Committee.  The Committee shall serve as a monitoring and coordination body for the Program as needed and will attempt to agree on all matters related to the Program; however Barr shall have the authority to make final decisions related to the Program.

 

2.2          Meetings.  The Committee shall meet from time to time as determined by Barr; but no less often than once every six months.  The meetings may be held either in person, or if requested by a Committee member, by phone or video-conference.

 

ARTICLE III - DEVELOPMENT PROGRAM

 

3.1          The Program.  The Parties shall undertake a Development Program with the overall objective of obtaining all FDA approvals necessary for the commercialization of the Products (hereinafter, the “Program”).

 

(a)           Development Plans. Corium began development of the [*]Product upon the signing of the LOI.  Upon the signing of this Agreement, Corium will begin development of the Catapress TTS Product, and within thirty (30) days of the Effective Date, Corium will begin development of the [*] Product.  The Parties are in the process of determining, and will mutually decide by December 31, 2004, whether or not they will develop the [*]Product.  Attached to this Agreement as Exhibits A, B, C, and D respectively are the 

 

*Confidential Treatment Requested.

 

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Target Achievement Date and Timeline (the “Development Plan”), a development budget, (the “Budget”), payment schedule (the “Payment Schedule”), and milestone payment schedule (the “Milestone Payment Schedule”) with respect to each Product.

 

(b)           Development.  Corium shall use its commercially reasonable efforts to develop the Products, in accordance with the Development Plan for each Product.

 

 (c)          Regulatory Filings and Communications.  Barr shall use commercially reasonable efforts to draft, submit and maintain any appropriate ANDA for the Products, including all amendments and supplements to the FDA, and obtain FDA approval for the commercialization of each Product.

 

3.2.        Development Progress Reports. Corium shall submit to Barr a report (the 
 “Development Progress Report”) detailing the progress of the development of each Product within ten (10) days following the end of each calendar month.  Such report shall include an updated Development Budget, by quarter, for the remainder of the Development Program for each Product.  To the extent the updated Development Budget deviates from the prior Development Budget submitted for such Product, Barr shall review the reasons for such deviation and decide whether to amend the Development Budget accordingly.  Barr acknowledges that if the parties do develop the [*]Product that the parties plan to develop under this Agreement, then the Budget for the [*] Product will be [*], which represents [*]of the Budget.  If Barr decides to amend the Development Budget, the Development Budget, as amended by Barr, shall constitute the “Amended Development Budget.”

 

3.3    Reimbursement of Development Costs. Corium shall use commercially reasonable efforts to control Development Costs and remain within the Development Budget or Amended Development Budget as the case may be.  At the end of each month, Corium shall issue an invoice to Barr for the Development Costs actually incurred during such month with respect to the Products. Barr shall reimburse Corium within [*] of receiving the invoice from Corium, provided that the Development Cost for such month did not exceed the approved Development Budget or Amended Development Budget for that month as the case may be, and subject to the Audit Rights set forth in Section 10.4.

 

  Corium shall promptly notify Barr when a Target Achievement Date is not likely to be achieved during a quarter, or in the event that the Development Cost for such quarter exceeds or is likely to exceed the approved Development Budget or Amended Development Budget as the case may be. Corium, in the Development Progress Report, shall propose an additional time frame and/or budget required to achieve such Target Achievement Date.  Barr shall review the reasons for such budget increase or time delay, and if Barr does not approve such additional budget, Barr shall not be responsible for, in part or in whole, any costs in excess of the Development Budget or Amended Development Budget.

 

3.4   Prepayments.  Upon execution of the  letter of intent between Barr and Corium, dated  December 9, 2004, Barr paid Corium an advance payment of [*] for labor, material and supplies to begin development on a generic [*] Product (the “First Development Payment”).  Barr has also paid Corium [*]within the thirty days following December 9, 2003 to continue the development of the [*] Product (the “Second Development Payment”).  

 

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The First and Second Development Payments shall be referred to collectively as the “Development Pre-Payments.”  The Development Pre-Payments shall be credited towards amounts Barr owes Corium under this Agreement for labor, materials, and supplies of the [*] Product during the duration of the Development Program for the [*] Product until such payments have been fully applied. Any balance of such payments remaining after Corium has been reimbursed for all labor, materials, and supplies of the [*] Product it incurred will be refunded by Corium to Barr if Barr determines in its sole discretion that the patent analysis makes it economically infeasible to pursue the development of the [*] Product or otherwise terminates this Agreement.

 

3.5   Milestone Payments.  In addition to Barr paying Corium the Development Pre-Payments, Barr will pay Corium the Milestone Payments further described in Exhibit D upon Corium achieving each of the following milestones with respect to a particular Product: (a) submission of a lead formulation which shows comparable in vitro skin permeation, (b) manufacture and shipment of clinical batch, (c) manufacture and shipment of BE batch, and (d) completion of CMC section of ANDA

 

3.6          Inspections.   Each Party’s representatives shall have the right, from time to time during normal business hours and upon reasonable notice, to visit the other Party’s facilities, as appropriate, to review and/or audit such other Party’s quality, regulatory, cGMP, Good Clinical Practices and other compliance systems and activities related to the Products. Unless otherwise mutually agreed upon by the Parties, after the first twelve (12) months of commercial manufacturing of the last of the Products to be manufactured, visits shall occur no more frequently than [*]. Each Party shall reasonably cooperate in such activities, and shall make available such personnel and documents (including, without limitation, batch records, clinical study records, and standard operating procedures) as the requesting Party may reasonably request in connection therewith.

 

ARTICLE IV - CAPITAL EQUIPMENT/FACILITIES

 

4.1          Capital Expenditure Payments. – Barr or one of its Affiliates shall pay all costs for manufacturing equipment and facility improvements pertaining to the Products and Barr or such Affiliate shall own such manufacturing equipment.  Barr agrees to maintain adequate insurance for such manufacturing equipment and Corium agrees to be responsible for the servicing and maintenance of such manufacturing equipment.  Corium also agrees to use such manufacturing equipment for Barr and the Products only (unless Corium has purchased such equipment from Barr in which case Corium can then use the equipment for any purpose it desires except that Corium shall give priority use of the equipment for Barr and the Products).  However, Corium may request from time to time, permission from Barr to use such manufacturing equipment for other customers and other products.  For as long as Barr owns the equipment, neither Corium nor Barr shall assign, transfer, pledge, hypothecate or otherwise dispose of the equipment or any interest therein.  Barr will execute such documents and authorize such filings as Corium shall reasonably request to Barr’s creditors of Corium’s right to purchase the equipment under this Agreement.  A detailed capital 

 

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expenditure budget, timeline and schedule for the payment of such costs is attached as Exhibit C.  Corium shall select third party vendors for all manufacturing equipment purchases and Corium shall place all manufacturing equipment orders.  The vendors shall invoice Barr directly for such manufacturing equipment purchases and Barr shall forward a copy of such invoices to Corium.  Barr shall pay the vendors in accordance with all manufacturing equipment invoices by the payment due dates specified in such invoices.  If Corium wishes to purchase any or all of the manufacturing equipment owned by Barr, Corium may do so at any time by reimbursing Barr for the actual costs paid by Barr for all of the equipment or each individual piece of equipment that Corium wishes to purchase.

 

4.2   Capital Equipment Pre-Payments.  Upon execution of the Letter of Intent between the Parties, Barr paid Corium an advance, nonrefundable payment of [*] dollars for equipment (the “Equipment Pre-Payment”).  Additionally, pursuant to the letter agreement dated April 15, 2004 between Barr and Corium, Barr paid Corium an amount in the sum of  [*] for the purchase of equipment on Barr’s behalf (the “Equipment Payments”).

 

ARTICLE V - DISCLOSURE OF INFORMATION; PERFORMANCE OF DUTIES

 

5.1          Disclosure. Upon execution of this Agreement and during the Term, each Party shall disclose to the other Party Confidential Information and Program Information necessary or useful to proceed with the Program. Each Party shall, at the reasonable request of the other Party, allow personnel of the other Party to consult with its staff at mutually agreeable times, to discuss and review such Confidential Information and Program Information.

 

5.2          Confidentiality. Except as specifically authorized by this Agreement, each Party shall, for the Term and for five (5) years after its expiration or termination for any reason, keep confidential, not disclose to others and use only for the purposes provided for or permitted under this Agreement, the other Party’s Confidential Information. Notwithstanding the foregoing, such information may be (i) disclosed to governmental agencies and others where such Confidential Information is required to be included in regulatory filings permitted under the terms of this Agreement or in patent applications filed within the United States Patent and Trademark Office or corresponding international patent offices; (ii) provided to Third Parties under appropriate terms and conditions including confidentiality provisions substantially equivalent to those in this Agreement, in connection with the receiving Party’s clinical or bio-equivalence testing, consulting, regulatory activities, manufacturing and marketing activities with respect to the Product undertaken pursuant to or as permitted by this Agreement; (iii) published, if and to the extent such publication has been approved by both Parties; or (iv) disclosed to the extent required by applicable laws or regulations or as ordered by a court or other regulatory body having competent jurisdiction. In each of the foregoing cases, the recipient will use its commercially reasonable efforts to limit the disclosure and maintain confidentiality to the extent possible. In the case of a required disclosure under clause (iv) above, the Party required to make the disclosure shall promptly notify the original disclosing Party and shall 

 

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provide reasonable assistance, if requested by the original disclosing Party, to assist the original disclosing Party in its attempts to prevent or limit the disclosure.

 

5.3          Ownership. Ownership of Confidential Information shall remain with the disclosing Party. Nothing herein is intended to transfer the ownership of any Confidential Information.

 

5.4          Compliance with Laws. Each Party agrees to comply with all material laws and regulations applicable to it and to use its commercially reasonable efforts to perform its responsibilities and duties as described in this Agreement.  Each Party represents that neither it nor any of its employees has been debarred or is subject to debarment proceedings by the FDA.  If any such proceedings are commenced against a Party hereto (or any of its employees) during the Term, such Party shall notify the other Party in writing within five business days of the commencement of such proceedings, and shall keep the other Party informed, on a regular basis, of the status of such proceedings. Neither Corium nor Barr shall employ any persons or entities that have been debarred, or that are subject to debarment proceedings, for any aspect of the development, manufacturing or testing of the Products.

 

ARTICLE VI - LICENSE AND OWNERSHIP

 

6.1          Intellectual Property Ownership. Barr shall own  all of the interest, title and right in and to the ANDA for each Product and shall retain the exclusive control of such ANDA, including all amendments, supplements and all other communications with the FDA.  Each party shall be the sole owner of the Technical Information of which only its employees and third party contractors are inventors during the term of this Agreement.  Each party will jointly own the Technical Information of which both parties employees or contractors are joint inventors during the term of this agreement, provided, however, that each party will solely own any Technical Information or Know-How developed or invented, solely or jointly with the other party, in connection with this Agreement that relates to any Intellectual Property Rights or Know-How that such party owned or controlled as of the Effective Date of this Agreement (“Background Intellectual Property”).  In the event Corium itself or through a Third Party commercialize any Products outside the Territory, Corium shall pay Barr a royalty of [*] of its net sales for such Product or any AB rated generic equivalent of such Product, outside the Territory.  Barr hereby grants to Corium (a) an exclusive, royalty-free, right and license under the ANDA and the Technical Information to develop, manufacture and supply the Products pursuant to Corium’s obligations under this Agreement, and (b) an exclusive right  (even as to Barr) to commercialize the Products outside the Territory subject to the foregoing royalty obligation.

 

6.2          License in a Bankruptcy Event.  In the event of a Bankruptcy Event with regard to Corium, Corium will use reasonable commercial efforts to continue to supply Barr with the Products on substantially similar terms and conditions as Barr received prior to Corium’s Bankruptcy Event.  In the event that (a) Corium becomes the debtor in a case under Chapter 7 of Title 11, U.S. Code  (the “Bankruptcy Code”) or (b) Corium both (i) becomes the debtor in a case under Chapter 11 of the Bankruptcy Code and (ii) is unable to meet Barr’s forecasted demand for Products for a period of sixty (60) continuous days, then

 

*Confidential Treatment Requested.

 

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in case of either (a) or (b), Corium hereby grants to Barr a non-exclusive, non-transferable, non-sublicensable (except as permitted pursuant to Section 7.4(c)), license to Corium’s Know-How to make the Products solely to the extent necessary to enable Barr to continue Commercialization of the Products in the Territory in accordance with this Agreement.  In exchange for any license rights granted pursuant to this Section 6.2, Barr will pay Corium a royalty of [*]on its Net Sales of the [*] and the [*] Products.  For the avoidance of doubt, Barr will not have a license to use Corium’s Know-How to make, have made, sell, use, or otherwise exploit any other products.   Barr shall be responsible for all costs, including all costs incurred by Corium, to transfer any Corium Know-How to Barr to enable Barr to exercise the license described in this Section 6.2.  Barr covenants and agrees that it will forebear from exercising any of the rights granted under this Section 6.2 unless and until the conditions described clauses (a) or (b)(i) and (b)(ii) of this Section 6.2 have been met.

 

ARTICLE VII - MANUFACTURE OF THE PRODUCTS

 

7.1       Manufacturing Responsibility.

 

(a)           Prior to the Launch Date of a Product, Corium shall use commercially reasonable efforts to manufacture the Products for the pivotal bioequivalence studies and the product process validation batches.

 

(b)           After the Launch Date of a Product and during the Term, Corium shall manufacture, test, release and supply Products to Barr in accordance with this Agreement.

 

(c)           Corium shall supply exclusively to Barr, and Barr shall purchase exclusively from Corium for use and distribution in the Territory, all of Barr’s requirements for the Products.  Corium shall not supply the Products to any Person, other than to Barr and its Affiliates, unless such Persons have agreed not to promote, market, sell or distribute the Products or any AB rated generic equivalent of such Products in the Territory.  In the event that any such Person fails to comply with such restrictions, Corium shall immediately notify Barr and shall cause such Person to cease such activities.

 

7.2          Obligations of Corium.  Without limiting the foregoing, Corium shall be responsible for, directly or through a Third Party Manufacturer:

 

(a)           filing and qualifying with the FDA the manufacturing site of Corium;

 

(b)           filing and maintaining distribution shipping records for the Products; irrespective of the Party selected to manufacture the Product:

 

(c)           conducting all required testing including, without limitation, stability testing for each batch of Product manufactured for use in bioequivalence studies contemplated under this Agreement; and conducting, as required by the ANDA, cGMPs, and FDA regulations, as amended, any and all such testing for all validation batches and all commercial batches of Product; and

 

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(d)           manufacturing and packaging the Products according to any guidelines provided reasonably required by Barr and consistent with the ANDA and all applicable FDA regulations, as amended.  Barr shall have the exclusive right to define (i) the shape, color, size, embossing and imprinting of each Unit or Product, and (ii) packaging, cartoning, labeling, including package inserts, and all related artwork for containers and any advertising.

 

7.3          Subcontracting Manufacturing. Corium shall be entitled to engage a Third Party Manufacturer to satisfy its manufacturing commitments pursuant to this Article 7. In such event Corium shall promptly notify Barr, and shall identify and upon Barr’s approval engage and qualify such Third Party Manufacturer to satisfy such manufacture commitments. Corium will bear the sole responsibility for entering into a supply agreement for the Product between Corium and such Third Party, and shall continue to be responsible to Barr for all the obligations imposed on Corium herein. All compensation paid by Corium to such Third Party Manufacturer in consideration for the manufacture of the Products shall be included in Fully Allocated Costs; provided that such compensation shall be commercially reasonable and comparable to similar transactions in the like industry.

 

7.3       Barr’s Manufacturing Right.

 

(a)           Barr shall have the right to qualify a second source for supply of the Products, at Barr’s own expense, provided that such second source may only supply Barr with Products either (i) in accordance with Section 7.4(b) below or (ii) [*].  Corium shall provide Barr with reasonable assistance at the request and expense of Barr, in qualifying such second source for supply of the Products.

 

(b)           Barr shall have the right to manufacture the Product, or have the Products manufactured by its Affiliates and/or a Third Party Manufacturer in the event that [*].   Any Product manufactured by Barr, its Affiliates or Third Party Manufacturer pursuant to this Section 7.4 shall be included for purposes of calculating Gross Sales for such Product; provided that the costs incurred by Barr or its Affiliates or paid to Third Party Manufacturers shall be calculated as part of the Fully Allocated Costs.

 

Corium shall grant to Barr, its Affiliates and/or such Third Party Manufacturer as directed by Barr, a non-exclusive right to [*]solely to the extent necessary to enable Barr, such Affiliates and/or such Third Party Manufacturer to manufacture the Product pursuant to Section 7.4 (b) for so long as (i) [*], (ii) [*], and (iii) [*].

 

7.5          Expiration Dates.  Products supplied by Corium shall, at the time of Delivery to Barr, be dated such that the expiration of such Products shall not occur until at least [*] from such date of delivery to Barr, provided, however, that Corium shall use commercially reasonable efforts to provide Products to Barr with the longest possible expiration date.

 

7.6          Quality Control.  Corium shall manufacture, test, label, package, and ship all Product, or cause the Products to be manufactured, tested, labeled, packaged, and shipped in accordance with the respective ANDA, Product specifications, cGMP, and the Act, as amended.

 

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7.7            Manufacturing Changes.  Corium shall notify Barr in the event it desires to make any changes in the manufacturing process as set forth in the applicable ANDA for the Products.  No such change shall be made unless Barr authorizes such change.

 

7.8            Manufacturing Audit.  Barr, either itself or through or with its representatives, shall have the right, twice each calendar year, or more often if a reasonable basis exists therefore (such as, by way of example and not limitation, a change in, or material noncompliance with, applicable laws, regulations and governmental guidelines), upon reasonable notice and during normal business hours, to subject the manufacturing facilities where Corium manufactures, or has manufactured, Products to a cGMP audit or inspection at Barr’s expense.  This inspection shall be conducted to ensure compliance with all requirements of applicable laws and regulations, including cGMPs, and all guidelines promulgated by the FDA as well as evolving standards required by the FDA.  Such inspection and auditing shall be permitted upon reasonable notice and during normal business hours, taking into account Corium’s manufacturing cycle of Products.

 

(a)             Notice of Inspections.  Corium shall immediately notify Barr of any inspection of its or any of its Affiliates’ facilities (or of any facilities of its or their licensees, distributors, contractors, subcontractors or agents) related to any of the Products or the API by any regulatory agency, including the FDA, and shall send Barr copies of any written reports or correspondence to or from any regulatory agency relating to such inspection.   Such reports may exclude any trade secrets of Corium that are unrelated to the activities under this Agreement.  Corium shall permit the relevant governmental authorities to inspect its facilities and records in connection with the activities contemplated by this Agreement.

 

ARTICLE VIII - PATENT ISSUES

 

8.1          Patent Review.

 

(a)           Barr shall use commercially reasonable efforts to obtain a review and analysis by Barr’s outside patent counsel of the validity and/or enforceability of the Listed Patents for the Products, and Corium’s formulation and technology proposed to be used to manufacture the Products, and recommended measures to avoid infringement of such patents and other patents in the field.  If Barr’s outside patent counsel is unable to recommend measures to avoid infringement or Corium is unable to make such a change to the Product, as determined by Barr in Barr’s sole discretion, Barr may terminate this Agreement pursuant to Section 14.2(d) herein.

 

(b)           During the term of this Agreement, each Party shall promptly disclose to the other Party, with respect to a Product, any other patents, patent applications or inventions that may affect the development and commercialization of the Product that come to such Party’s attention.  Within ninety (90) days of such disclosure, Barr shall use commercially reasonable efforts to obtain a review and analysis by Barr’s outside Patent counsel of whether the Product as developed and manufactured by Corium, including Corium’s formulation, process and/or API material, would infringe on an issued, non-expired (as of the intended date of launch of the Product) United States patent. If, in such opinion, such Product does read on such a claim or claims, Corium shall propose any non-infringing 

 

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changes to the Product, including reformulating the Product. If Corium is unable to make such a change to the Product, as determined by Barr in Barr’s sole discretion, Barr may terminate this Agreement pursuant to Section 14.2(d) herein.

 

8.2          Patent Paragraph IV Certification. The Parties recognize and agree that the [*] and [*]Product ANDAs are intended to be filed certifying (a “Paragraph IV Certification”) that they are not infringing on patents filed by the Innovators in the Orange Book or that such Orange Book patents are invalid pursuant to 21 CFR. In the event that Barr and/or Corium is involved in litigation in the United States regarding the validity and enforceability of any patents for the Product, Barr shall direct and control, and shall make commercially reasonable efforts to conduct to a successful conclusion, the litigation including, but not limited to, any settlement of all or part of such litigation.

 

8.3        Patent Costs. The costs associated with the patent review, settlement, and litigation activities conducted pursuant to Sections 8.1 and 8.2 hereof shall be paid by Barr.

 

8.4        Cooperation. Subject to assuring that any and all defense and/or legal privileges remain intact, each Party shall provide reasonable cooperation to the other Party in its efforts to defend against any patent claims or patent suits relating to a Product. When reasonably requested by Barr, Corium shall enter into a joint defense agreement with Barr.  Corium’s counsel, at Corium’s own cost and expense, may monitor the cases as well as any patent review described herein and Barr will reasonably cooperate with such counsel.

 

8.5        Settlement.  Barr shall retain complete control of any settlement that results from a litigation between a Party and a Third Party regarding any patents covering a Product; provided that in conducting the negotiations for such settlement Barr shall use commercially reasonable efforts to maximize the economic benefit to the parties.

 

ARTICLE IX – COMMERCIALIZATION AND SUPPLY.

 

9.1          Commercialization. Barr shall have the exclusive right, even as to Corium, to Commercialize the Products in the Territory. Corium shall have the exclusive right, even as to Barr, to Commercialize the Products outside of the Territory subject to Corium’s royalty obligations under Section 6.1 hereof. Upon final approval by the FDA for the ANDA for a Product and as soon as practicable after the Products may be manufactured and sold in the United States free from any and all restrictions, as determined by Barr in its sole and exclusive discretion, Barr shall use commercially reasonable efforts to Commercialize the Product in the Territory. Barr shall have the sole and exclusive right to establish and control the prices and all other terms and conditions for the sales of the Product in the Territory.

 

9.2          Regulatory Responsibilities. Following the approval by the FDA of an ANDA, Barr shall be solely responsible, with Corium’s reasonable assistance, for maintaining the ANDA for the Products including any necessary periodic reporting requirements. Furthermore, Barr shall be responsible for all adverse event reporting as required by the Act. Barr agrees to perform these activities in conformance with cGMP, the ANDA specifications and the Act. Barr shall provide Corium with copies of all material 

 

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correspondence from or to regulatory authorities in the Territory relating to the maintenance of the ANDA.

 

9.3          Supply.  Upon the approval by the FDA of an ANDA, Corium shall use its commercially reasonable efforts to supply Barr with its requirements for the Product in the Territory.  Corium shall maintain inventory levels for such Products, consistent with its normal practices, giving due consideration to the forecasts submitted by Barr hereunder.

 

9.4          Forecasts.   The Barr and Corium advisory committee (Committee) will meet at least [*] prior to the Launch Date of each Product for the purpose of  planning a successful Product launch.  Corium will prepare a Production Launch Plan for each Product based on Barr’s estimated launch quantity and estimated launch date within [*] after receipt of non-binding estimated launch quantities and launch date from Barr.  Barr will place firm purchase orders for the Product(s) far enough in advance to meet Barr’s launch requirements based on Corium’s Production Launch Plan.

 

After the Launch Date of a particular Product within the Territory, [*]prior to the beginning of each [*], Barr shall provide to Corium [*] worth of forecasts for the Product as follows: (1) a binding purchase order for Products for the coming [*], (2) a firm forecast (the “Firm Forecast”) for the[*], and (3) a forecast of its estimated requirements for Products in the [*] thereafter, along with requested shipment dates for Products.  Barr’s purchase order for the [*] shall be binding upon Barr, and shall be accepted by Corium provided that the quantities ordered are within the amounts forecast by Barr for such [*]. The total amount of each Product actually ordered by Barr for the [*] may not be less than [*]or exceed[*] of Barr’s Firm Forecast for such Product for the [*]. All other amounts specified for the following [*] are considered a non-binding but good faith forecast.  No change may be made in the binding purchase order for Products or the shipment dates requested therefor without the prior consent of Corium (such consent not to be unreasonably withheld).

 

9.5          Excess Over Forecast.  If Barr’s orders for Products exceed the amounts forecasted by Barr pursuant to Section 9.4.  Corium shall use commercially reasonable efforts to supply the amounts of Products so ordered by Barr.

 

9.6          Purchase Orders.  Barr’s purchase orders to Corium shall set forth with respect to each Product:  (i) the quantity or amount ordered, (ii) shipping arrangements, and (iii) the requested delivery date to Barr (each, a “Purchase Order”).  Following a Product’s Launch Date, Corium shall not be required to fulfill any Purchase Order requesting a delivery date earlier than [*] after receipt of a Purchase Order.  Within [*] of its receipt of any Purchase Order, Corium shall send a written acknowledgement of such receipt to Barr and include in such notice, if necessary, the fact that Corium is unable to fulfill such Purchase Order (without limiting any of Barr’s rights or remedies under this Agreement or otherwise).  The terms and conditions of this Agreement shall supersede and control any terms and conditions in any form of Purchase Order or any other business forms used by the Parties for the purposes of ordering, acknowledging, invoicing or shipping.

 

9.7          Delivery.  Corium shall deliver Products ordered pursuant to a Purchase Order to Barr via regular freight in accordance with the delivery instructions set forth in 

 

*Confidential Treatment Requested.

 

15

 

such Purchase Order.  Title and risk of loss will pass to Barr when the Products are delivered to Barr’s designated carrier.  Barr shall have the right to cancel any Purchase Order, in whole or in part, which is delayed more than [*]from the date of delivery requested by Barr.

 

9.8          Non-Conforming Product.  Barr shall inspect the Products that are delivered by Corium pursuant to this Agreement according to Barr’s standard inspection guidelines, prior to their distribution and sale by Barr or sublicensees or distributors.  If a shipment of Products, or any portion thereof, is adulterated, damaged, defective or otherwise non-conforming, then Barr shall have the right to reject such shipment, or the portion thereof that fails to so conform, as the case may be, upon written notice to Corium, specifying the grounds for such rejection, within [*] following the date on which Barr receives from Corium the invoice relating to such shipment of Products.  If no notice of rejection is given by Barr within such [*] period or with respect to a shipment of Products, then such shipment shall be deemed to have been accepted; provided, however, that any failure to provide a notice of rejection by Barr shall not be deemed to be an acceptance in the event that any reason for rejection exists that could not be discovered during a reasonable inspection of such shipment.  In the event of any such rejection[*].  If Corium agrees with Barr’s claim, [*].  If Barr and Corium are unable to resolve their differences, then either Barr or Corium may refer the matter to a certified analytical firm of international reputation independent of and acceptable to both Parties for final analysis using a sample from such shipment provided by Barr, which shall be binding on Barr and Corium.  The fees and disbursements of such firm shall be paid by the Party whose contention is rejected by the firm.

 

9.9          ANDA Specifications.  Barr shall comply with the specifications set forth in the ANDA, the applicable law, and any written specifications provided by Corium, concerning the packaging, labeling, storage, handling, and transportation of the Products.  Neither Barr nor any employee or person acting on behalf of Barr shall make any modification to the Products, Product packaging or labeling of the Products as delivered by Corium.

 

9.10        OTC.  In the event a Product becomes available over the counter (the “OTC”), the Parties shall negotiate in good faith any amendment to the Parties rights and obligations in relation to such Product as it pertains to OTC status.

 

ARTICLE X - PAYMENTS

 

10.1        Allocation and Distribution of Profits.  Within [*] following the close of each Calendar Quarter, Barr shall pay Corium an amount equal to (i) [*] of Net Income from Barr’s sales of the [*] Product in the Territory (ii) [*] of Net Income from Barr’s sales of the [*]Product in the Territory; (iii) [*] of Net Income from Barr’s sales of the Catapress TTS Product in the Territory; and (iv) [*] of Net Income from Barr’s sales of the [*] Product in the Territory.

 

10.2        Transfer Price.  The transfer price for the Products Corium supplies to Barr pursuant to Section 9.3  (hereinafter, the “Transfer Price”) shall be equal to the [*].

 

*Confidential Treatment Requested.

 

16

 

10.3          Manner of Payment. All payments due hereunder shall be made in United States dollars without any deduction or withholding for or on account of, any taxes, duties, levies, fees or charges except those taxes or duties levied against Corium which are legally required to be withheld by Barr. All taxes levied on account of any payment accruing to Corium under this Agreement which constitutes income to Corium shall be the obligation of Corium, and, if provision is made in law or regulation for withholding, such tax shall be deducted by Barr from any payment then due, Barr shall pay such tax to the proper taxing authority, and receipt for payment of the tax shall be promptly sent to Corium by Barr. However, Corium shall have the right to appeal to the appropriate tax authority any such withholding and payments of any such tax.

 

10.4          Books of Account; Audit. Each Party shall maintain true and complete books of account containing an accurate record of all data necessary for the proper computation of amounts charged by it and payments due from it under this Agreement. Upon [*] prior written notice, each Party shall have the right, through the independent certified public accountants engaged by the requesting Party, to conduct its regular annual audit, or through a firm of independent public accountants selected by mutual agreement of the Parties, to examine the books and records of the other Party as they relate to this Agreement, at any time within [*] after the date of the payment or charges to which they relate [*] for the purpose of verifying the amount of such payments or charges and the accuracy of such books and records. Such examination shall be made during normal business hours at the place of business of the Party whose books and records are being examined. The Parties agree that information furnished as a result of any such examination shall be limited to a written statement by such certified public accountants to the effect that they have reviewed the books and records of such Party and either (i) the amounts paid or charged under this Agreement are in conformity with such books and records and the applicable provisions of this Agreement, or (ii) setting forth any required adjustments. The fees and expenses of the accountants performing such verification shall be borne by the Party requesting the examination. If any such examination shows any underpayment or overpayment, or overcharge or undercharge, a correcting payment or refund shall be made within [*] after receipt of the written statement described above providing the non-challenging Party agrees with the findings of the challenging Party. If the non-challenging Party disagrees with the finding of the challenging Party, the Parties will attempt, in good faith, to resolve the difference. If after [*] the Parties fail to settle the difference, the dispute resolution provisions of Article 14 will be followed. Notwithstanding the foregoing, if any such examination indicates that there was any underpayment with respect to any Calendar Quarter of more than [*] of the payment actually due or the amount that should actually have been charged, then the Party whose books are being examined shall bear all costs of the examination.

 

ARTICLE XI – REPRESENTATIONS AND WARRANTIES

 

11.1                        Corium Warranties.

 

(a)           Corium warrants that it shall use its commercially reasonable efforts to ensure that its employees working on the Program hereunder will not use information or knowledge which is proprietary to a Third Party.

 

*Confidential Treatment Requested.

 

17

 

(b)           Corium further warrants that any Product manufactured by it hereunder (i) shall be manufactured in accordance with the Product ANDA and the Product specification, and shall meet the Product specification for its shelf life as set forth in the ANDA; (ii) shall not, at the time of delivery to Barr’s designated carrier, be adulterated or misbranded within the meaning of the Act, or any applicable laws in which the definitions of adulteration and misbranding are substantially the same as those contained in the Act, as the Act and laws are constituted and effective at the time of such delivery; and (iii) shall be manufactured in accordance with cGMP, and all other similar applicable United States laws and regulations, as amended.  Except as set forth in Section 12.1, Barr’s sole remedy for breach of the warranty contained in this subsection 11.1(b) shall be the replacement of such non-complying Product.

 

CORIUM’S WARRANTIES SET FORTH IN THIS SECTION 11.1 ARE ITS EXCLUSIVE WARRANTIES TO BARR WITH RESPECT TO THE PRODUCT, AND ARE GIVEN AND ACCEPTED IN LIEU OF ANY AND ALL OTHER WARRANTIES, GUARANTEES, CONDITIONS AND REPRESENTATIONS, EXPRESS OR IMPLIED, CONCERNING THE PRODUCT, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE.

 

ARTICLE XII - INDEMNIFICATIONS

 

12.1        Corium Indemnity.  Corium shall indemnify, defend and hold harmless Barr and its Affiliates, employees or directors from any and all costs, expenses, damages, judgments and liabilities (including reasonable attorneys’ fees and the cost of any recalls) incurred by or rendered against Barr, or its Affiliates, employees or directors in any Third Party claim made or suit brought from a breach by Corium of its representations and warranties pursuant to this Agreement, except to the extent that such claim or suit is based on (i) Barr’s breach of its representations and warranties, or (ii) an action which Barr provided its written consent to, or (iii) any allegation that the Products, or any part thereof, infringe or violate any patent, copyright, trademark, or misappropriate any trade secret (other than misappropriations of which Corium knew or reasonably should have known). Barr shall give prompt written notice of any such claim or suit, and Corium shall undertake the defense thereof. Barr shall cooperate in such defense, to the extent reasonably requested by Corium, at Corium’s expense. Barr shall have the right to participate in such defense, at its own expense, to the extent that in its judgment Barr may be prejudiced thereby.  In any claim made or suit brought for which Barr seeks indemnification under this Section 12.1, neither Party shall settle, offer to settle, or admit liability or damages without the prior written consent of the other Party.

 

12.2        Barr Indemnity. Barr shall indemnify, defend and hold harmless Corium and its Affiliates, employees or directors from any and all costs, expenses, damages, judgments and liabilities (including reasonable attorneys’ fees and the cost of any recalls) incurred by or rendered against Corium, or its Affiliates, employees or directors in any Third Party claim made or suit brought that is (i) based on damages resulting from the clinical testing, use or sale of the Product, (ii) an allegation that the Products, or any part thereof, infringe or violate any patent, copyright or trademark of a third party or misappropriate any trade secret of a 

 

*Confidential Treatment Requested.

 

18

 

third party (other than misappropriations of which Corium knew or reasonably should have known), or (iii) results from Barr’s negligence or Barr’s breach of its obligations pursuant to this Agreement; except to the extent that such claim or suit is based on Corium’s breach of its representations or warranties under this Agreement. Corium shall give prompt written notice of any such claim or suit, and Barr shall undertake the defense thereof. Corium shall cooperate in such defense, to the extent reasonably requested by Corium, at Barr’s expense. Corium shall have the right to participate in such defense, at its own expense, to the extent that in its judgment Corium may be prejudiced thereby.  In any claim made or suit brought for which Corium seeks indemnification under this Section 12.2, neither Party shall settle, offer to settle, or admit liability or damages without the prior written consent of the other Party.

 

12.3        Mitigation. In the event of any occurrence which may result in either Party becoming liable under this Article, each Party shall use commercially reasonable efforts to mitigate the damages that may be payable by the other Party hereunder.

 

12.4        Insurance Requirements. For the Term and [*] thereafter Corium shall maintain, or cause to be maintained, at its own expense, product-liability, general liability and excess policy insurance in an amount not less than [*] per occurrence.  In addition, Barr and Corium shall maintain workers compensation and property, inventory and business interruption insurance as is commercially reasonable.  Upon a Party’s written request from time to time, each Party shall furnish to the other Party one or more Certificates of Insurance reflecting coverage under such insurance and shall name such other Party as an additional insured on such policy.

 

ARTICLE XIII - LIMITATION OF LIABILITY

 

13.1        Limits of Liability. Except for Parties’ indemnification obligations under Article XII or confidentiality obligations under Article V in no event, other than as set forth herein, shall either Party be liable to the other Party for special, incidental, consequential or punitive damages, or for costs of procuring substitute products, whether the claim is based upon contract, warranty, tort, negligence, product liability, or strict liability theories or otherwise relates to the failure to perform any obligations set forth herein.  Except for Corium’s indemnification obligations under Article XII or confidentiality obligations under Article V in no event, other than as set forth herein, shall Corium’s liability to Barr in connection with this agreement for all causes of action and under all theories of liability exceed [*]. The parties have agreed that these limitations will survive and apply even if any limited remedy specified in this agreement is found to have failed of its essential purpose.

 

ARTICLE XIV - TERM AND TERMINATION: MODIFICATION OF RIGHTS

 

14.1        Term. The term of this Agreement (the “Term”) shall, with respect to a Product, commence on the Effective Date and shall continue until the earlier of (i) a termination pursuant to Section 14.2 with respect to such Product, or (ii) the conclusion of the last day of the tenth (10) full calendar year following the Launch Date of the Product (the “Initial Term”), and shall thereafter be automatically renewed for additional one-year 

 

*Confidential Treatment Requested.

 

19

 

terms (each a “Renewal Term”), unless either Party, not less than three (3) months prior to expiration of the Initial Term or any Renewal Term, terminates the Agreement by written notice to the other.

 

14.2        Termination Events. This Agreement shall only be terminated in the following manner, upon the occurrence of any of the events set forth in this Section 14.2 (each a “Termination Event”):

 

(a)           The Parties may terminate this Agreement at any time by written mutual agreement.

 

(b)           Either Party may terminate this Agreement upon a material breach by the other Party; provided that the terminating Party shall provide the breaching Party with a written notice reasonably detailing such breach and such breach or default is not cured within sixty (60) days after receipt such notice.

 

(c)           [*].

 

(d)           [*]

 

(i) [*];

 

 (ii) [*];

 

(iii) [*];

 

 (iv) [*]; or

 

  (v) [*].

 

14.3                        Effect of Termination.

 

(a)           In the event that Barr terminates this Agreement pursuant to Sections 14.2 (d) (i), (iv) or (v), the following shall apply:

 

(i)            Barr shall and hereby does grant Corium an exclusive (even as to Barr), royalty-free, freely transferable, irrevocable and perpetual license in the Territory to use all Technical Information, and all other technology, know how and information, including all manufacturing know how, owned by Barr as of the date of such Termination and that is necessary for the development and Commercialization of the Products to continue the development and Commercialization of the Products as contemplated by this Agreement for the sole benefit of  Corium.

 

(ii)           Barr shall cooperate with Corium and take all action reasonably necessary to transfer control to Corium of any litigation being conducted by Barr pursuant to a filing for Paragraph IV certification of the Product.

 

*Confidential Treatment Requested.

 

20

 

(b)                                 In the event that either party terminates this Agreement pursuant to Section 14.1, or for breach of the other party pursuant to Section 14.2(b), or Barr terminates this Agreement pursuant to Section 14.2 (d) (ii) or (iii), or Corium terminates this Agreement for [*] pursuant to Section 14.2(c), the non-terminating party shall and hereby does grant such terminating party an exclusive (even as to such non-terminating party), freely transferable, irrevocable and perpetual license in the Territory to use all Technical Information, and all other technology, Know- How and information, including all manufacturing know how and regulatory data and information, owned by such non-terminating party as of the date of such Termination and that is necessary for the development and Commercialization of the Products to continue the development and Commercialization of the Products as contemplated by this Agreement for the sole benefit of such party.

 

(c) In the event that Barr terminates this Agreement for [*] pursuant to Section 14.2(c), then Barr shall be granted a license to Corium’s Know-How in accordance with Section 6.2.

 

14.4                        Post-Termination Use of ANDA.  If this Agreement is terminated due to a breach by Barr pursuant to Section 14.2 (b), or Barr terminates this Agreement at the end of the Initial Term or any subsequent Renewal Term pursuant to Section 14.1, or Barr terminates this Agreement pursuant to Subsections 14.2 (d)(i)(iv) or (v):

 

(a)                                 Barr shall cease the Commercialization of the Product upon the termination or expiration of this Agreement; provided, however, Barr shall be entitled to continue to sell its remaining inventory, on the terms of this Agreement.  For any sale of remaining inventory of the Product, Barr shall continue to make payments to Corium as provided in Section 9.1; and

 

(b)                                 In the event that an ANDA has been filed for a particular Product the development of which is terminated by Barr, Barr shall assign such ANDA to Corium.

 

14.5                        Rights on Termination. Termination of this Agreement for any reason shall be without prejudice to (i) either Party’s rights under this Agreement with respect to claims arising out of events occurring prior to such termination; (ii) Corium’s right to receive all payments owed or accrued under this Agreement for periods prior to the date of termination; and (iii) any other remedies which either Party may otherwise have.

 

ARTICLE XV - MISCELLANEOUS

 

15.1                        Waiver and Amendment. Any waiver by any Party hereto of a breach of any provisions of this Agreement shall not be implied and shall not be valid unless such waiver is recited in writing and signed by such Party. Failure of any Party to require, in one or more instances, performance by the other Party in strict accordance with the terms and conditions of this Agreement shall not be deemed a waiver or relinquishment of the future performance of any such terms or conditions or of any other terms and conditions of this Agreement. A waiver by either Party of any term or condition of this Agreement shall not be deemed or construed to be a waiver of such term or condition for any other term. All rights, remedies,

 

*Confidential Treatment Requested.

 

21

 

undertakings, obligations and agreements contained in this Agreement shall be cumulative and none of them shall be a limitation of any other remedy, right, undertaking, obligation or agreement of either Party. This Agreement may not be amended except in writing, signed by both Parties.

 

15.2                        Relationship of the Parties. For all purposes of this Agreement, Corium and Barr shall be deemed to be independent entities and anything in this Agreement to the contrary notwithstanding, nothing herein shall be deemed to constitute Corium and Barr as partners, joint ventures, co-owners, an association or any entity separate and apart from each Party itself, nor shall this Agreement constitute any Party hereto an employee or agent, legal or otherwise, of the other Party for any purposes whatsoever. Neither Party hereto is authorized to make any statements or representations on behalf of the other Party or in any way obligate the other Party, except as expressly authorized in writing by the other Party. Anything in this Agreement to the contrary notwithstanding, no Party hereto shall assume nor shall be liable for any liabilities or obligations of the other Party, whether past, present or future.

 

15.3                        Headings. The headings set forth at the beginning of the various Articles of this Agreement are for reference and convenience and shall not affect the meanings of the provisions of this Agreement.

 

15.4                        Notices. Notices required under this Agreement shall be in writing and sent by registered or certified mail, postage prepaid, or by telex or facsimile and confirmed by registered or certified mail and addressed as follows:

 

	
If   to Barr:
    	
Barr   Laboratories, Inc.
    
	
 
    	
2   Quaker Road
    
	
 
    	
Pomona,   NY 10970-0519
    
	
 
    	
Facsimile:   (845) 362-2774
    
	
 
    	
Attention:   President
    
	
 
    	
with   a copy to: General Counsel
    
	
 
    	
 
    
	
If   to Corium:
    	
Corium   International, Inc.
    
	
 
    	
2686   Middlefield Road
    
	
 
    	
Redwood   City, CA 94063
    
	
 
    	
Facsimile:   (650) 298-8012
    
	
 
    	
Attention:   CEO
    
	
 
    	
 
    
	
 
    	
With   a copy to: Ralph Pais, Esq.
    
	
 
    	
Fenwick &   West LLP
    
	
 
    	
Silicon   Valley Center
    
	
 
    	
801   California Street
    
	
 
    	
Mountain   View, CA 94041
    
	
 
    	
Facsimile:   (650) 938-5200
    

 

22

 

All notices shall be deemed to be effective five days after the date of mailing or upon receipt if sent by telex or facsimile (but only if followed by certified or registered confirmation). Either Party may change the address at which notice is to be received by written notice pursuant to this Section 15.4.

 

15.5                        Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, it shall be stricken and the remaining provisions shall remain in full force and effect; provided, however, that if a provision is stricken so as to significantly alter the economic arrangements of this Agreement, the Parties agree to negotiate in good faith modifications to this Agreement to effectuate the initial intent of this Agreement.

 

15.6                        Assignment. This Agreement shall not be assigned by either Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld, except that either Party may assign this Agreement, in whole or in part, to any successor (including the surviving company in any consolidation, reorganization or merger) or assignee of all or substantially all of its business, or to a wholly owned subsidiary or Affiliate. This Agreement will be binding upon any permitted assignee of either Party.  No assignment shall have the effect of relieving any Party to this Agreement of any of its obligations hereunder.

 

15.7                        Event of Force Majeure.  Neither Party shall be responsible or liable to the other hereunder for the failure or delay in the performance of this Agreement due to any civil unrest, war, fire, earthquake, hurricane, accident or other casualty, or any labor disturbance or act of God or the public enemy, or any other contingency beyond the Party’s reasonable control. In the event of the applicability of this Section 15.7, the Party failing or delaying performance shall use its commercially reasonable efforts to eliminate, cure and overcome any of such causes and resume the performance of its obligations. Upon the occurrence of an event of force majeure, the Party failing or delaying performance shall promptly notify the other Party, in writing, setting forth the nature of the occurrence, its expected duration and how such Party’s performance is affected. The failing or delaying Party shall resume performance of its obligations hereunder as soon as practicable after the force majeure event ceases.

 

15.8                        Public Disclosure. Neither Party shall disclose to third Parties, nor originate any publicity, news release or public announcement, written or oral, whether to the public, the press, stockholders or otherwise, referring to the existence or terms of this Agreement the subject matter to which it relates, the performance under it or any of its specific terms and conditions, except as required by law, without the prior written consent of the other Party. If a Party decides to make an announcement, it will give the other Party such notice as is reasonably practicable and an opportunity to comment upon the announcement.

 

15.9                        Survival. Sections 4.1, 5.3, 5.4, 6.1, 8.3, 8.4, 8.5, 10.1, 10.3, 10.4, 14.3, 14.4, 14.5, and Articles 1, XI, XII, XIII, and XV shall survive the termination for any reason of this Agreement. Section 5.2 shall survive the expiration or termination of this Agreement for five (5) years. Any payments due under this Agreement with respect to any period prior to its termination shall be made notwithstanding the termination of this Agreement.

 

23

 

15.10                 Effects of Insolvency or Bankruptcy on Licenses.  The Parties acknowledge and agree that all rights and licenses to intellectual property granted to a licensee pursuant to this Agreement (other than with respect to Trademarks) are, for all purposes of Section 365(n) of the Bankruptcy Code, licenses of rights to “intellectual property” as defined in the Bankruptcy Code, and that in the event a Party who is a licensor becomes a debtor in bankruptcy, the provisions of Section 365(n) of the Bankruptcy Code shall apply and the other Party shall continue to have rights under such licenses as long as such Party continues to fulfill all of its obligations, including its obligations to pay royalties, under this Agreement, as and to the extent provided in Section 365(n).  Each Party, in its capacity as licensor of such rights under this Agreement (as applicable), acknowledges and agrees that the other Party, in its capacity as licensee of such rights under this Agreement (as applicable), shall retain and may fully exercise all of such other Party’s rights and elections as and to the extent provided in the Bankruptcy Code.

 

15.11                 No Conflict. Each Party represents that neither this Agreement nor any of its obligations hereunder will conflict or result in a breach of any arrangement or agreement between such Party and any Third Party.

 

15.12                 Entire Agreement. This Agreement, including the exhibits hereto, sets forth the entire understanding between the Parties hereto as to the subject matter hereof and supersedes all other documents, agreements (including the Confidentiality Agreement, except that the Confidential Information provided under the Confidentiality Agreement shall be deemed to have been provided hereunder), verbal consents, arrangements and understandings by or between the Parties with respect to the subject matter hereof.

 

15.13                 Limitation of Grant. Nothing in this Agreement shall be construed as granting by implication, estoppel, or otherwise, any license or rights than otherwise set forth herein.

 

15.14                 Governing Law. This Agreement shall be governed by, and construed, and enforced in accordance with the substantive laws of the State of New York, without giving effect to its rules concerning conflicts of laws.

 

15.15                 Dispute Resolution.  The parties recognize that a bona fide dispute as to certain matters may arise from time to time during the term of this Agreement that may relate to the parties’ rights and obligations hereunder.  The parties agree that they shall use reasonable efforts to resolve any dispute that may arise in an amicable matter.

 

15.16                 Escalation.  If the parties are unable to resolve such a dispute within thirty (30) days, then before either Party shall be entitled to file a lawsuit in connection with such dispute, either Party within fifteen (15) days, may by written notice to the other Party, require the Parties to submit any such disputed matter to the Chief Executive Officers of the Parties, who shall meet and use good faith efforts to negotiate a resolution within thirty (30) days of receipt of such notice.  In the event that the Chief Executive Officers are unable to resolve such dispute within such 30-day period, either Party shall be entitled to seek all legal recourse available to it in connection therewith.  The Chief Executive Officers shall issue their resolution in writing.

 

24

 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date first written above by their duly authorized representatives.

 

 

	
CORIUM   INTERNATIONAL, INC.
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Gary W. Cleary
    	
 
    
	
 
    	
Name:   Gary W. Cleary
    	
 
    
	
 
    	
Title:   President
    	
 
    
	
 
    	
Date:   May 5, 2004
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
BARR   LABORATORIES, INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Paul M. Bisaro
    	
 
    
	
 
    	
Name:   Paul M. Bisaro 
    	
 
    
	
 
    	
Title:   President
    	
 
    
	
 
    	
Date:   5/5/04
    	
 
    

 

25

 

Exhibit A

FAST-TRACK TIMELINE

 

	
PRODUCT
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Generic   Catapres-TTS
    Bioequivalent Product
   No remaining product or patent exclusivity
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
[*]
    Bioequivalent Product
   No remaining product or patent exclusivity
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    

 

*-ANDA approval timeline is estimate only

**- [*]development timeline will be adjusted based on Barr’s official approval to move forward on the product

 

*Confidential Treatment Requested.

 

1

 

Exhibit A (con’t)

 

Generic [*] and [*]

Bio-equivalent Patch Development Plan and Timeline

 

I.                                        Development and Prototype production [*]

 

a.              [*]

 

II.                                   Pilot manufacturing and manufacturing development [*]

 

[*]

 

III.                              Clinical study, stability and ANDA filing [*]

 

IV.                               ANDA approval [*]

 

a.              Manufacturing development for commercial product

 

V.                                    Commercial launch [*]

 

Exhibit A (con’t)

 

Generic Catapres-TTS® and [*]

Bio-Equivalent Patch Development Plan and Timeline

 

I.                                        Development and Prototype production [*]

 

[*]

 

II.                                          Pilot manufacturing and manufacturing development [*]

 

[*]

 

III.                                     Clinical study, stability and ANDA filing [*]

 

IV.                               ANDA approval [*]

 

a.                 Manufacturing development for commercial product

 

V.                                    Commercial launch [*]

 

*Confidential Treatment Requested.

 

2

 

Exhibit B

Estimated Budget 4-1-04

 

The Budget

 

1.              The budget is based on the development of four products concurrently.

2.              No allowance has been made for specialized material handling and safety equipment that some compounds may require.

3.              Preclinical and Clinical studies are not included in the budget.

4.              Preparation of the CMC section of the ANDA is included in the budget.

5.              Budget for [*] reflects a [*] discount for four products in development at the same time.

 

Budget Summary

 

	
Labor, Materials and
   Supplies Budget Summary
    	
 
    	
R&D
    	
 
    	
Manufacturing
    	
 
    	
Total Budget
    
	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Generic   Catapres-TTS
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Generic [*] (reflects [*] discount)
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Total Budget
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    

 

	
Capital Equipment and
   Facility Upgrades Budget
   Summary
    	
 
    	
R&D
    	
 
    	
Manufacturing
    	
 
    	
Total Budget
    
	
[*] Generic Catapres-TTS [*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Total Budget
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    

 

*Confidential Treatment Requested.

 

3

 

Exhibit B (con’t)

 

Detailed Generic [*]Development Budget

 

	
Development Labor
    	
 
    	
R&D
    	
 
    	
Manufacturing
    	
 
    	
Total Budget
    
	
Analytical
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Formal   Post Approval Stability
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Formulation
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Process   Development
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
BE   Production
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Manufacturing   Scale-Up/Validations
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Clinical   and Regulatory
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Legal
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Materials   and Supplies
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Development
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Analytical
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Process   Development
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
BE   Production
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Total Budget
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    

 

Detailed Generic Catapres-TTS Development Budget

 

	
Development Labor
    	
 
    	
R&D
    	
 
    	
Manufacturing
    	
 
    	
Total Budget
    
	
Analytical
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Formal   Post Approval Stability
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Formulation
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Process   Development
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
BE   Production
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Manufacturing   Scale-Up/Validations
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Clinical   and Regulatory
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Materials   and Supplies
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Development
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Analytical
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Process   Development
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
BE   Production
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Total Budget
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    

 

*Confidential Treatment Requested.

 

4

 

Exhibit B (con’t)

 

Detailed Generic [*] Development Budget

 

	
Development Labor
    	
 
    	
R&D
    	
 
    	
Manufacturing
    	
 
    	
Total Budget
    
	
Analytical
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Formal   Post Approval Stability
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Formulation
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Process   Development
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
BE   Production
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Manufacturing   Scale-Up/Validations
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Clinical   and Regulatory
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Materials   and Supplies
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Development
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Analytical
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Process   Development
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
BE   Production
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Budget
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Total Budget [*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    

 

Detailed [*] Development Budget

 

	
Development Labor
    	
 
    	
R&D
    	
 
    	
Manufacturing
    	
 
    	
Total Budget
    
	
Analytical
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Formal   Post Approval Stability
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Formulation
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Process   Development
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
BE   Production
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Manufacturing   Scale-Up/Validations
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Clinical   and Regulatory
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Materials   and Supplies
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Development
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Analytical
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Process   Development
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
BE   Production
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Total Budget
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    

 

*Confidential Treatment Requested.

 

5

 

Exhibit B (con’t)

 

Detailed Capital Equipment and Facility Upgrades Budget for [*], Generic Catapres-TTS and  [*]

 

	
Manufacturing Equipment
    	
 
    	
R&D
    	
 
    	
Manufacturing
    	
 
    	
Total Budget
    
	
Mix   Tanks
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Coating   Die & Pumps
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Coating   Line
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Air   Handling
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Inspect/Rewind
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Die   Cutting
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Pouch
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Carton
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Contingency
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Analytical Equipment
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Dissolution   Bath
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
HPLC
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Stability   Chamber
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Headspace   GC
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Facilities   Upgrades
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Coating   Area
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Finishing   and Packaging Area
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Total Budget
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    

 

*Confidential Treatment Requested.

 

6

 

Exhibit B (con’t)

 

Detailed Capital Equipment and Facility Upgrades Budget for [*]

 

	
Manufacturing Equipment
    	
 
    	
R&D
    	
 
    	
Manufacturing
    	
 
    	
Total Budget
    
	
Mix   Tanks
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Extrusion   Die & Pumps
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Extrusion   Line
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Inspection   Rewind
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Die   Cut
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Pouch
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Contingency
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Analytical Equipment
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Skin   Permeation
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Dissolution   Bath
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Stability   Chamber
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Facilities   Upgrades*
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Coating   Area
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Finishing   and Packaging Area
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Total Budget
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    

 

*If [*] project is dropped, facilities charge for [*]/Catapres/[*] will [*]

 

*Confidential Treatment Requested.

 

7

 

Exhibit C

[*]

 

*Confidential Treatment Requested.

 

8

 

Exhibit D

Milestone Payments

 

	
Milestone
    	
 
    	
[*][*]
    	
 
    	
Catapres-TTS
   [*]***
    	
 
    	
[*]***
   [*]
    	
 
    	
[*][*]
    
	
Submission   of Formulation showing comparable skin permeation and primary dermal   irritation** to reference product
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Manufacture   and QA Approval of BE Batch
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    
	
Completion   of CMC section of ANDA
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    	
 
    	
[*]
    

 

*Dates and Timing of [*] milestones to be added pending final resolution of project start date.

 

** [*]

 

*** Catapres-TTS start date to be adjusted based on date Definitive Agreement is signed and [*] start date will be adjusted to 30 days post Definitive Agreement date.  All subsequent milestone dates for Catapres-TTS and [*] will be adjusted accordingly.

 

*Confidential Treatment Requested.

 

9

 

Administrative Offices:

Teva North America

1090 Horsham Road, PO Box 1090

North Wales, PA 19454-1090

 

Phone: (215) 591-30000

Toll Free: 888 TEVA USA

 

September 8, 2009

 

VIA FEDERAL EXPREESS and FACSIMILE (650-298-8012)

 

Corium International, Inc. 
 Attn: Mr. Peter Staple, President and CEO
 235 Constitution Drive
 Menlo Park, CA  94025

 

Re:                             Development, Manufacturing and Commercialization Agreement between Barr Laboratories, Inc. (“Barr”) and Corium International, Inc. (“Corium”) dated May 5, 2004 relating to [*] (generic [*](the “Agreement”)

 

Dear Mr. Staple:

 

Pursuant to Section 14.2(d)(i) of the Agreement, Barr hereby notifies Corium that Barr wishes to terminate the Agreement  Please accept this letter as Barr’s formal sixty (60) days prior written termination notice.  Consequently, the Agreement will terminate effective October 7, 2009.  In addition, pursuant to Section 14.4(b) of the Agreement, Barr shall assign the ANDA relating to [*] (generic [*]to Corium.

 

Except with respect to the foregoing paragraph and with respect to those provisions that survive termination pursuant to Section 159 of the Agreement, each party and such party’s affiliates and its and their respective officers, directors, employees, shareholders, agents, advisors, consultants, independent contractors and successors and assigns (“Releasors”) hereby releases and discharges the other party, and such party’s affiliates and its and their officers, directors, employees, shareholders, agents, advisors, consultants, independent contractors and successors and assigns (“Releasees”) from any and all claims, causes of action, demands or liabilities whatsoever, whether asserted or unasserted, known or unknown or suspected to exist by a Releasor, which any such Releasor ever had or may now have against any Releasee, from the beginning of time to the date of this letter, in any way arising under or relating to the Agreement.

 

*Confidential Treatment Requested.

 

 

Please do not hesitate to contact us should you have any questions.

 

Thank you.

 

	
 
    	
Regards,
    
	
 
    	
 
    
	
 
    	
/s/   Darren Alkins
    
	
 
    	
 
    
	
 
    	
Darren   Alkins
    
	
 
    	
VP,   Business Development
    

 

	
Acknowledged   and accepted this
    	
 
    
	
18th day of September
    	
 
    
	
 
    	
 
    
	
Corium   International, Inc.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Peter D. Staple
    	
 
    
	
 
    	
Name:   
    	
 
    
	
 
    	
Title:   
    	
 
    

 

	
cc:
    	
Fenwick &   West LLP
    	
 
    
	
 
    	
Attn:   Ralph Pais, Esq.
    	
 
    
	
 
    	
Silicon   Valley Center
    	
 
    
	
 
    	
801   California Street
    	
 
    
	
 
    	
Mountain   View, CA 94041
    	
 
    
	
 
    	
Facsimile   (650-938-5200)
    	
 
    

 

2

 

 

Administrative Offices:

Teva North America

1090 Horsham Road, PO Box 1090

North Wales, PA 19454-1090

 

Phone: (215) 591-30000

Toll Free: 888 TEVA USA

 

June 21, 2010

 

VIA FEDERAL EXPRESS and FACSIMILE (650-298-8012)

 

Corium International, Inc.

Attn: Mr.  Peter Staple, President and CEO

235 Constitution Drive

Menlo Park, CA 94025

 

Re:          Development, Manufacturing and Commercialization Agreement between Barr Laboratories, Inc. (“Barr”) and Corium International, Inc. (“Corium”) dated May 5, 2004 (the “Agreement”).

 

Dear Mr. Staple,

 

This letter is being sent to you to confirm that pursuant to Section 14.2(a) of the Agreement Barr and Corium have mutually agreed to terminate the Agreement with respect to the [*] Product.  The parties agree that the effective date of such termination is June 21, 2010.  Notwithstanding anything contained in the Agreement to the contrary, with respect to the [*] Product only, Barr and Corium each shall retain all right, title and interest in and to all Technical Information, other technology, Know-How and information (i) owned by it on or prior to the Effective to and (ii) developed during the Term and for which development such party paid, and for the avoidance of doubt, Barr and Corium each will have the right to pursue development of a [*] Product utilizing formulations in the ranges which were developed and disclosed in the [*].

 

Except with respect to the following provisions, which shall survive termination: Sections 5.2 and 5.3, and Articles I, X1I, XIII and XV, each party and such party’s affiliates and its and their respective officers, directors, employees, shareholders, agents, advisors, consultants, independent contractors and successors and assigns (“Releasors”) hereby releases and discharges the other party, and such party’s affiliates and its and their officers, directors, employees, shareholders, agents, advisors, consultants, independent contractors and successors and assigns (“Releasees”) from any and all claims, causes of actions, demands or liabilities whatsoever, whether asserted or unasserted, known or unknown or suspected to exist by a Releasor, which any such Releasor ever had or may now have against any Releasee, from the beginning of time to the date of this letter, in any way arising under or relating to the Generic Lidoderm Product development program under the Agreement.  For avoidance of doubt, this release does not affect products other than the [*] Product, and each party will have the right to make reference to the [*].

 

Please do not hesitate to contact us should you have any questions.

 

*Confidential Treatment Requested.

 

 

	
Thank   you.
    	
 
    
	
 
    	
Regards,
    
	
 
    	
 
    
	
 
    	
/s/   Darren Alkins
    
	
 
    	
VP,   Business Development & Alliance Management
    

 

	
Acknowledged   and accepted this 22nd day of June
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Peter D. Staple
    	
 
    
	
 
    	
Peter   D. Staple
    	
 
    
	
 
    	
 
    
	
cc:
    	
Fenwick &   West LLP
    	
 
    
	
 
    	
Attn:   Ralph Pais, Esq.
    	
 
    
	
 
    	
Silicon   Valley Center
    	
 
    
	
 
    	
801   California Street
    	
 
    
	
 
    	
Mountain   View, CA 94041
    	
 
    
	
 
    	
Facsimile   (650-938-5200)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00227-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00227-of-00352.parquet"}]]