Document:

EX-10.1

 

Exhibit 10.1

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DEVELOPMENT AND TOLL

MANUFACTURING AGREEMENT

between

JAVELIN PHARMACEUTICALS

and

BAXTER HEALTHCARE CORPORATION

 

 

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TABLE OF CONTENTS

	 	 	 	 	 
	1. DEFINITIONS
	 	 	3	 
	 
	 	 	 	 
	2. SUPPLY
	 	 	6	 
	 
	 	 	 	 
	3. SUPPLY OF API
	 	 	8	 
	 
	 	 	 	 
	4. MANUFACTURE
	 	 	9	 
	 
	 	 	 	 
	5. PRODUCT SPECIFICATIONS; CERTIFICATE OF ANALYSIS
	 	 	10	 
	 
	 	 	 	 
	6. LABELING AND PACKAGING
	 	 	10	 
	 
	 	 	 	 
	7. FORECASTS
	 	 	11	 
	 
	 	 	 	 
	8. PURCHASE ORDERS
	 	 	11	 
	 
	 	 	 	 
	9. DELIVERY
	 	 	13	 
	 
	 	 	 	 
	10. PRICE AND PAYMENTS
	 	 	13	 
	 
	 	 	 	 
	11. INSPECTION OF PRODUCT
	 	 	14	 
	 
	 	 	 	 
	12. ACCESS TO MANUFACTURING FACILITY AND RECORDS
	 	 	15	 
	 
	 	 	 	 
	13. REPRESENTATIONS AND WARRANTIES; DISCLAMERS;
	 	 	 	 
	 
	 	 	 	 
	LIMITATION OF LIABILITY
	 	 	16	 
	 
	 	 	 	 
	14. INDEMNIFICATION
	 	 	18	 
	 
	 	 	 	 
	15. RECALLS
	 	 	19	 
	 
	 	 	 	 
	16. TERM AND TERMINATION
	 	 	20	 
	 
	 	 	 	 
	17. CONFIDENTIALITY
	 	 	21	 
	 
	 	 	 	 
	18. INSURANCE
	 	 	23	 
	 
	 	 	 	 
	19. MISCELLANEOUS
	 	 	23	 

 

 

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	SCHEDULE 1.9

	 	API SPECIFICATIONS
	 
	 	 
	SCHEDULE 1.24

	 	NOVEL EXCIPIENT SPECIFICATIONS
	 
	 	 
	SCHEDULE 1.26

	 	PRODUCT SPECIFICATIONS
	 
	 	 
	SCHEDULE 1.28

	 	QUALITY AGREEMENT
	 
	 	 
	SCHEDULE 2.1

	 	DEVELOPMENT PLAN
	 
	 	 
	SCHEDULE 2.2

	 	PRODUCT DEVELOPMENT WORK AND BUDGET
	 
	 	 
	SCHEDULE 10.1

	 	PRICING

 

 

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DEVELOPMENT AND TOLL MANUFACTURING AGREEMENT

     This Development and Toll Manufacturing Agreement (this “Agreement”) is entered into as of
this 25 day of April, 2007 (the “Effective Date”) by and between Javelin Pharmaceuticals, a
Delaware corporation, having its principal place of business at 125 CambridgePark Drive, Cambridge,
MA 02140 (“Purchaser”), and Baxter Healthcare Corporation, a Delaware corporation, having a place
of business at 95 Spring Street, New Providence, NJ 07974 (“Supplier”).

     WHEREAS, Supplier manufactures certain pharmaceutical products;

     WHEREAS, Purchaser intends to distribute and market finished dosage pharmaceutical products,
including, without limitation, a certain intravenous dosage product sometimes currently known as
“Diclofenac Sodium Injection (the “Product”); and

     WHEREAS, Purchaser wishes to procure from Supplier, and Supplier wishes to provide certain
product development support and to supply to Purchaser, certain quantities of the Product in vials
on the terms and conditions set forth in this Agreement.

     NOW, THEREFORE, in consideration of the covenants and obligations expressed herein, and
intending to be legally bound hereby, the parties agree as follows:

1. DEFINITIONS. As used in this Agreement, the following terms shall have the following respective
meanings:

	 	1.1	 	“Acceptable Product” has the meaning assigned thereto in Section 11.1.
	 
	 	1.2	 	“Act” means the United States Food, Drug, and Cosmetic Act, as the same may be
amended from time to time, and rules and regulations promulgated there under.
	 
	 	1.3	 	“Activities” has the meaning assigned thereto in Section 4.3.
	 
	 	1.4	 	“Affiliate” means any individual or entity directly or indirectly
controlling, controlled by, or under common control with a party. For purposes of this
definition, “control” means the direct or indirect ownership of at least fifty percent
(50%) of the outstanding voting securities of a party, or the right to control the
policy decisions of such party. Notwithstanding the foregoing, the term “Affiliate”
does not include subsidiaries in which a party or its Affiliates owns a majority of
the ordinary voting power to elect a majority of the board of

 

 

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	 	 	 	directors, but is restricted from electing such majority by contract or otherwise,
until such time as such restrictions are no longer in effect.
	 
	 	1.5	 	“Alternate Presentation” means any injectible pharmaceutical other than
two mL of Product in a two mL vial.
	 
	 	1.6	 	“Alternative Source Period” has the meaning assigned thereto in Section
8.7.
	 
	 	1.7	 	“Annual Period” means a period of twelve (12) calendar months beginning
on the date of the Regulatory Approval by the FDA for the Product, and each 12-month
period thereafter during the Term.
	 
	 	1.8	 	“API” means the active pharmaceutical ingredient diclofenac sodium USP.
	 
	 	1.9	 	“API Specifications” means the specifications for or concerning the
manufacturing, testing, and packaging of bulk API set forth in Schedule 1.9 attached
hereto, as the same may be amended from time to time upon written agreement of the
parties.
	 
	 	1.10	 	“Binding Forecast” has the meaning assigned thereto in Section 7.2.
	 
	 	1.11	 	“Calendar Year” means a period of twelve (12) calendar months,
beginning each January 1 and ending on the subsequent December 31 during the Term.
	 
	 	1.12	 	“Certificate of Analysis” has the meaning assigned thereto in Section
5.2.
	 
	 	1.13	 	“cGMP” means current good manufacturing practice promulgated by the
FDA, including, without limitation, the Act, 21 C.F.R. Parts 210 and 211, and all
applicable FDA rules, regulations, policies and guidelines in effect at a given time.
	 
	 	1.14	 	“Claim” has the meaning assigned thereto in Section 14.3.
	 
	 	1.15	 	“Commercially Reasonable Efforts” means efforts and resources normally
used by a party for a compound or product owned by it or to which it has rights, which
is of similar market potential at a similar stage in its product life, taking into
account the competitiveness of the marketplace, the proprietary position of the
compound or product, the regulatory structure involved, the profitability of the
applicable product, and other relevant factors.
	 
	 	1.16	 	“Confidential Information” means all proprietary and confidential
information of a party, including, without limitation, trade secrets, technical
information, business information, sales information, customer and potential customer
lists and

 

 

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identities, product sales plans, license and sublicense agreements, inventions,
developments, discoveries, know-how, methods, techniques, formulae, data,
processes, and other proprietary ideas, whether or not protectable under patent,
trademark, copyright, or other legal principles, that the other party has access
to or receives, but does not include information that (a) is or becomes publicly
available through no breach of this Agreement by the receiving party; (b) was
already known to the receiving party at the time it was disclosed to the receiving
party hereunder; (c) is independently developed by employees of the receiving party
without the aid, use, or application of Confidential Information received from the
disclosing party hereunder; or (d) is received from a Third Party which is under no
obligation of confidentiality to the disclosing party.

1.17 “FDA” means the United States Food and Drug Administration, or any
successor entity.

1.18 “Force Majeure Event” has the meaning assigned thereto in Section 19.7.

1.19 “Indemnitee” has the meaning assigned thereto in Section 14.3.

1.20 “Indemnitor” has the meaning assigned thereto in Section 14.3.

1.21 “Manufacturing Facility” means Supplier’s facility located at 2
Esterbrook Lane, Cherry Hill, New Jersey 08003.

1.22 “Materials” means any or all chemical substances, inactive ingredients,
excipients other than the Novel Excipient, components, labels, packaging materials, and
other consumable materials used in the manufacture of the Product; provided, however,
that the term “Materials” shall not include any equipment used in the manufacture of
the Product.

1.23 “Novel Excipient” means Kleptose(r) HPB (hydroxypropylbetadex).

1.24 “Novel Excipient Specifications” means the specifications for or
concerning the manufacturing, testing, and packaging of the Novel Excipient set forth
in Schedule 1.24 attached hereto, as the same may be amended from time to time upon
written agreement of the parties.

1.25 “Product” means the pharmaceutical product currently known as
Diclofenac Sodium Injection or Dyloject(r) containing the API.

1.26 “Product Specifications” means the specifications for or concerning the
manufacturing, testing, and packaging of Product set forth in Schedule 1.26

 

 

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	 	 	 	attached hereto, as the same may be amended from time to time upon written agreement
of the parties.
	 
	 	1.27	 	“Proposed Response” has the meaning assigned thereto in Section 12.2.
	 
	 	1.28	 	“Quality Agreement” means the applicable agreement, dated as of the
date hereof, between Supplier and Purchaser, in the form of Schedule 1.28 attached
hereto relating to the Product manufactured at Cherry Hill, New Jersey.
	 
	 	1.29	 	“Reasonable Steps” has the meaning assigned thereto in Section 17.1.
	 
	 	1.30	 	“Recall” means any action by Purchaser and its Affiliates, or Supplier
and its Affiliates, to recover title or possession or halt distribution, prescription,
or consumption of Product sold or shipped to Third Parties. The term “Recall” also
applies to Product that would have been subject to recall if it had been shipped.
	 
	 	1.31	 	“Regulatory Approvals” means all authorizations by the appropriate
Regulatory Authorities that are required for the manufacture (other than manufacturing
facility licenses, approvals, or authorizations), marketing, promotion, pricing, and
sale of the Product in the Territory.
	 
	 	1.32	 	“Regulatory Authority” means any national, supra-national, regional,
state, or local regulatory agency, department, bureau, commission, council, or other
governmental entity in the Territory involved in the granting of Regulatory Approval
for the Product, including, without limitation, the FDA.
	 
	 	1.33	 	“Rolling Forecast” has the meaning assigned thereto in Article 7.
	 
	 	1.34	 	“Seizure” means any action by the FDA to detain or destroy Product or
prevent the distribution, prescription, consumption, or release of Product.
	 
	 	1.35	 	“Technical Coordinator” has the meaning assigned thereto in Section
2.2.1 hereof.
	 
	 	1.36	 	“Term” has the meaning assigned thereto in Section 16.1.
	 
	 	1.37	 	“Territory” means the United States and its commonwealths and
territories (including, without limitation, Puerto Rico).
	 
	 	1.38	 	“Third Party” means any person or entity other than Supplier,
Purchaser, and their respective Affiliates.
	 
	 	1.39	 	“Unit” means each two mL vial.

 

 

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2. BAXTER OBLIGATIONS FOR DEVELOPMENT AND SUPPLY.

	 	2.1	 	Process or Development Tasks. Supplier shall provide Purchaser with a
timeline, milestones and FDA submission documentation that support internal product and
process development tasks described in the development plan set forth in Schedule 2.1
(“Development Plan”). Purchaser and Supplier will agree upon those tasks that each will
perform and the associated timelines. Supplier will develop price estimates for each
major milestone. Purchaser will provide purchase orders to cover Supplier’s pricing for
each major milestone.
	 
	 	2.2	 	Development Work and Budget. Supplier shall perform the development
and scale-up work described in the Development Plan (“Product Development Work”).
Purchaser shall make payments to Supplier for its performance of the Product
Development Work in accordance with the budget and payment schedule (the “Budget”)
established with respect to the Product Development Work, as described in the
Development Plan within [***] days of the later to occur of (i) completion of the
relevant portion of the Product Development Work triggering such payment pursuant to
the Budget, to Purchaser’s reasonable satisfaction, and (ii) receipt of a detailed
invoice with respect to same.
	 
	 	2.3	 	Obligation to Supply Product. During the Term, Supplier shall
manufacture and supply Product to Purchaser, and Purchaser shall purchase Product from
Supplier, pursuant to the provisions of this Agreement.
	 
	 	2.4	 	Technical Coordinator.
	 
	 	2.4.1	 	Appointment. Purchaser shall appoint an authorized technical
representative and a back-up technical representative by providing written notice of
such representatives to Supplier (each, a “Technical Coordinator”). Purchaser may
replace either of its Technical Coordinators at any time, with or without cause, by
providing written notice thereof to Supplier.
	 
	 	2.4.2	 	Responsibilities of Technical Coordinators. The Technical
Coordinators shall be responsible for communications, other than legal notices, between
the parties in matters of quality, manufacturing, project management, and compliance
with respect to the Product. The Technical Coordinators shall be available on a regular
basis for consultation during the Term regarding Supplier’s performance under this
Agreement, and compliance with applicable Specifications, Purchaser’s quality
requirements, the quality requirements of applicable laws or Regulatory Authorities
having jurisdiction over the manufacture of Product hereunder, cGMPs, and all other
applicable regulatory requirements.

 

 

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	 	2.5	 	Notification. Supplier shall immediately notify Purchaser of any event
that is reasonably likely to cause a breach by Supplier of its obligations under this
Agreement or of any issue that might result in a supply interruption of any duration,
	 
	 	2.6	 	[***]
	 
	 	2.7	 	Right of First Refusal for Additional Territories. Purchaser also
grants to Supplier, under similar terms and conditions listed herein, and as may need
to be modified by mutual agreement of the parties (including pricing), the right of
first refusal to produce the Product, in the current presentation or in alternate
presentations for distribution and sale in countries outside the Territory.

3. API. NOVEL EXCIPIENT AND MATERIALS.

	 	3.1	 	Supply of API and Materials. Purchaser has chosen those suppliers of
API, Novel Excipient and Materials identified in it regulatory filing for the Product.
During the Term, Supplier shall purchase API, Novel Excipient and Materials, from
those companies included in the regulatory filing for Product, for use by Supplier in
the manufacture of Product to be supplied to Purchaser under this Agreement.
	 
	 	3.2	 	Testing of API and Novel Excipient. Supplier shall test API and Novel
Excipient, in accordance with the procedures identified in Schedules 1.9 and 1.26 to
verify that the API meets the API Specifications and that the Novel Excipient meets
the Novel Excipient Specifications.
	 
	 	3.3	 	Failure to Meet API Specifications or Novel Excipient Specifications.
If the API provided by the API supplier fails to meet the API Specifications, or the
Novel Excipient provided by the Novel Excipient supplier fails to meet the Novel
Excipient Specifications, Supplier agrees to notify Purchaser immediately in writing,
which notice shall state with particularity the reasons such API fails to meet the API
Specifications or such Novel Excipient fails to meet the Novel Excipient
Specifications, and shall include copies of any documentation in

 

 

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	 	 	 	support of Supplier’s conclusion. Purchaser shall timely cooperate with Supplier in
addressing the failure, and if such failure cannot be remedied, in identifying and
qualifying an alternate API supplier or Novel Excipient supplier. Such
qualification shall be at Purchaser’s expense.
	 
	 	3.4	 	Audit of API, Novel Excipient and Material suppliers. Supplier shall
conduct routine audits, at Supplier’s expense, of all suppliers of API, Novel
Excipient and Materials, as required to comply with the provisions of the Act. Major
findings will be remediated or alternate suppliers will be identified by Purchaser and
will be qualified at Purchaser’s expense. Any additional non-routine audits will be
conducted by Supplier at Purchaser’s expense.
	 
	 	3.5	 	Change Controls. Supplier shall require that API supplier, Novel
Excipient supplier and suppliers of Materials will provide notice of any proposed
change to the API, Novel Excipient or Materials, including process specifications,
validation and/or controls, as well as the manufacturing and/or packaging of the API,
Novel Excipient or Materials. Supplier shall not be responsible for any failure by any
supplier to provide such notice. Purchaser shall cooperate with Supplier in addressing
the failure, and if it cannot be remedied, in identifying and qualifying an alternate
supplier. Such qualification shall be at Purchaser’s expense.

4. MANUFACTURE.

	 	4.1	 	Manufacturing Facility. Supplier shall manufacture all Product
supplied to Purchaser pursuant to this Agreement at the Manufacturing Facility.
	 
	 	4.2	 	Manufacture of Product. Supplier agrees to manufacture and supply the
Product in accordance with (a) the Product Specifications, (b) the applicable
Regulatory Approvals, as the same may be amended from time to time, (c) cGMP
requirements, and (d) all other applicable laws, rules, regulations and internal
specifications. Upon either Party becoming aware of any proposed changes in the
Regulatory Approvals, it shall promptly notify the other Party and shall consult with
the other party regarding the proposed changes and activities. Supplier shall not have
the right to decline to implement any change in the Regulatory Approvals.
	 
	 	4.3	 	Manufacturing Changes. The Product Specifications shall be amended as
(a) reasonably requested by Purchaser or (b) necessary to conform such Product
Specifications to the regulatory requirements necessary to obtain and maintain
Regulatory Approvals with respect to the Product in the reasonable discretion of
Purchaser. If any change in the Product Specifications, or if any change in the
Regulatory Approvals, applicable laws, rules, or regulations or sources of

 

 

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	 	 	 	Materials requires either (a) a change in the Product manufacturing process, or (b)
Supplier to conduct development, testing, or other activities (e.g., process
development stability testing, validation of new specifications) (collectively,
“Activities”) in addition to those activities Supplier conducted or is required to
conduct in its manufacture of the Product prior to such change being requested or
required, Purchaser shall reimburse Supplier for all commercially reasonable
documented costs incurred by Supplier in connection with such change. If Supplier
requires regulatory changes to support improved process or yield improvements, then
Purchaser, in consultation with Supplier, agrees to submit such changes to the FDA,
as required, and Supplier shall pay for such changes. Changes implemented to
support improved process or yield improvements shall not result in interruption in
the supply or quality of the Product.
	 
	 	4.4	 	Procurement of Materials. Supplier shall timely procure and maintain
adequate inventories of all API, Novel Excipient and Materials necessary for the
production of Product. Title to all such Materials shall reside in Supplier.
	 
	 	4.5	 	Regulatory Filings. Each party shall provide the other, as applicable,
with all Regulatory Approval submissions, annual reports, and correspondence to the
FDA on issues reasonably related to the performance of Supplier’s obligations as set
forth in this Agreement.
	 
	 	4.6	 	Compliance with Laws and Regulations. While the Product is in its
possession or under its control, Supplier shall comply with all applicable federal,
state, and local statutory and regulatory requirements regarding the manufacture,
handling, and storage of the Product.

	5.	 	PRODUCT SPECIFICATIONS: CERTIFICATE OF ANALYSIS.

	 	5.1	 	Product Specifications and Release Testing. As of the time of delivery
by Supplier, each batch of Product shall conform to the Product Specifications.
Supplier shall perform release testing according to the testing methods set forth in
the Product Specifications.
	 
	 	5.2	 	Certificate of Analysis. Supplier shall provide to Purchaser a
Certificate of Analysis with each shipment of Product to Purchaser or its designated
recipient stating that the Product conforms to the Product Specifications. The
Certificate of Analysis shall be in a format agreed upon by Supplier and Purchaser,
and such Certificate of Analysis shall include the results of release testing
conducted by Supplier on the Product. At Purchaser’s expense, ([***] per page)
Supplier shall also provide Purchaser with a copy of the manufacturing and controls
information for the applicable batch(es) delivered.

 

 

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	6.	 	LABELING AND PACKAGING. All Product shipped and delivered by Supplier to Purchaser,
under this Agreement shall be packaged and labeled in accordance with this Agreement, the
then-current packaging and labeling specifications provided by Purchaser, and cGMPs. Prior to
the Effective Date, Purchaser supplied Supplier with labeling for the Product {including the
NDC number(s) for the Product). Supplier shall print, either directly or through a Third
Party, labels and other printed material to be included as part of the Product, From time to
time, Purchaser may provide Supplier with modified labeling and upon receipt thereof, Supplier
shall use its Commercially Reasonable Efforts to incorporate such new labeling on the Product
in accordance with Purchaser’s requested schedule therefore. Purchaser shall provide Supplier
with any modifications to the labeling for the Product as promptly as possible in order to
ensure compliance with any and all applicable regulations. Purchaser shall reimburse Supplier
for all commercially reasonable costs incurred by Supplier in making modifications to
labeling, branding, or imprinting packaging and/or manufacturing processes to accommodate
Purchaser’s new labeling or to accommodate any other changes requested by Purchaser and agreed
to by Supplier. Such reimbursement shall be made pursuant to invoices submitted by Supplier to
Purchaser, which invoices shall be payable within [***] days after Purchaser’s receipt
thereof. Upon Purchaser’s request, Supplier shall promptly enter into a separate written label
agreement with Purchaser, setting forth Supplier’s obligations relating to the labeling of
Product hereunder.
	 
	7.	 	FORECASTS. Throughout the Term, Purchaser, shall provide Supplier with a rolling one
(1) year forecast by calendar month (the “Rolling Forecast”) of its expected purchases of
Product as follows:

	 	7.1	 	Forecasts. On or before each January 1, April 1, July 1, and October 1
during the Term after Purchaser receives Regulatory Approval for the Product from the
FDA, Purchaser shall provide Supplier with a written forecast of Purchaser’s expected
purchases of Product for a period of [***] calendar months beginning on the date
of such forecast. [***] percent ([***]%) of the forecast for the [***] calendar
months and [***] percent ([***]%) of the forecast for the [***] calendar months
shall be binding on Purchaser, subject to Section 8.3, and the forecast for the [***]calendar months shall not be binding on Purchaser.
	 
	 	7.2	 	Binding Forecasts. The portion of each Rolling Forecast that is binding
on Purchaser as provided in Section 7.1 shall be a “Binding Forecast.” The portion of
each Rolling Forecast that is not binding on Purchaser as provided in Section 7.1
shall be used by Supplier and Purchaser solely for planning purposes.

 

 

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	8.	 	PURCHASE ORDERS.

	 	8.1	 	Placement of Purchase Orders. From time to time during the Term,
Purchaser shall place purchase orders with Supplier, in a format chosen by Purchaser,
specifying the quantity of Product desired (in full lots of Product), and the place(s)
to which and the manner and dates by which delivery is to be made; said delivery dates
to be no earlier than [***] calendar days after the purchase order date. All
purchase orders shall be sent by Purchaser to the following address:

Baxter Healthcare Corporation

2 Esterbrook Lane

Cherry Hill, New Jersey 08003

Attn.: Lawrence Katz

Tel.: 856-489-2243

Fax: 856-424-2592

	 	 	 	or to such other addresses as Supplier may notify Purchaser from
time to time.
	 
	 	8.2	 	Acceptance of Purchase Orders. Purchase orders made in accordance with
this Article 8 shall be deemed to be accepted by Supplier if Supplier has not rejected
said purchase orders within [***] business days after receipt of the same;
provided, however, that Supplier shall not reject any purchase order specifying
quantities which purchase orders are otherwise in accordance with the provisions of
this Article 8.
	 
	 	8.3	 	Quantity Limitations. Supplier shall execute all accepted purchase
orders for quantities of Product ordered up to and including [***]percent ([***]%) of
the quantity of Product set forth in the applicable Binding Forecast for each calendar
month. Supplier shall use its Commercially Reasonable Efforts to fulfill orders for
quantities of Product greater than [***] percent ([***]%) of the quantity set forth in
the applicable Binding Forecast for each calendar month.
	 
	 	8.4	 	Minimum Purchase Requirements. Following receipt of Regulatory
Approval for the Product from the FDA, Purchaser shall purchase a Minimum of [***]
Units in the first Annual Period and [***] Units during each Annual Period thereafter.
In any Annual Period in which Purchaser does not purchase the Minimum Units,
Purchaser shall pay to Supplier [***].

 

 

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	 	8.5	 	Pre-Approval Manufacturing. Purchaser may, at its own financial risk,
place purchase orders for commercial launch quantities prior to Purchaser’s final FDA
drug approval, subject to Supplier’s acceptance of such order, which acceptance shall
not be unreasonably withheld or delayed. Such pre-approval purchase orders shall have
a delivery date at least [***] days from the date of the purchase order. Product will
not ship from the Supplier’s manufacturing site or Supplier’s distribution centers
until a copy of the final FDA drag approval letter is delivered to the Supplier.
Payment for pre-approval purchase orders actually manufactured and fulfilled by
Supplier will become due [***] days after the scheduled delivery date, whether or not
Regulatory Approval from the FDA has been received.
	 
	 	8.6	 	Conflict. In the event of any conflict between the provisions of this
Agreement and any purchase order, the provisions of this Agreement shall control.
	 
	 	8.7	 	Failure to Supply. In the event (i) Supplier cannot or does not
properly satisfy all of Purchaser’s Orders for Product on a timely basis in accordance
with this Section 8 for a period of [***] days, and such failure is not attributable
to a failure to properly supply API, Novel Excipient or Materials by the suppliers, or
(ii) any facility involved in the manufacture or storage of Product hereunder is
prohibited from, or materially adversely affected in its ability to, produce, store,
or otherwise be involved in the provision of Product to Purchaser under this Agreement
by the appropriate regulatory authorities, and such material adverse event is not a
Force Majeure Event, Purchaser can qualify an alternate manufacturing source and
purchase Product from such alternate source until such time as Supplier can resume
manufacture of the Products (the “Alternate Source Period”). Supplier shall, as
requested by Purchaser and at Supplier’s expense, provide the technical transfer
package for the Product to Purchaser and/or third parties designated by Purchaser to
manufacture Product in accordance with all legal and regulatory requirements as
quickly as possible. [***]

	9.	 	DELIVERY. Supplier shall execute all accepted purchase orders by delivering the
appropriate quantity of Product to Supplier’s designated mutually agreeable carrier at the
Manufacturing Facility no later than the delivery dates provided in the applicable purchase
order. Title and risk of loss shall pass to Purchaser when each order of Product

 

 

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PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

is delivered to the designated carrier at the Manufacturing Facility. Supplier shall
instruct the designated carrier to deliver the Product to such address as Purchaser may
provide to Supplier from time to time.

	10.	 	PRICE AND PAYMENTS.

	 	10.1	 	Price. Purchaser shall purchase from Supplier, and Supplier shall sell
to Purchaser, Product at the purchase price set forth in Schedule 10.1 attached. The
pricing may be adjusted annually, beginning on [***] and each [***] thereafter during
the Initial Term, as defined in Section 16.1, and any renewals, by a percentage equal
to the percentage change in the [***] during the 12-
month period ending the preceding [***] (or if discontinued such equivalent index as
is mutually agreed to by the parties). [***]
	 
	 	10.2	 	Freight, Insurance, and Taxes. Purchaser shall pay all actual freight,
insurance, and government sales tax imposed on purchasers for resale, and duties and
other fees (except tax on income to Supplier) incurred in connection with the sale and
shipment of Product to Purchaser.
	 
	 	10.3	 	Payment. Payments to Supplier for the purchase price of Product, as
well as any other payment due from Purchaser to Supplier pursuant to this Agreement,
shall be made by Purchaser within [***] days after the later of the date of invoice or
the receipt of the Product covered by such invoice, except as to orders for Product
that are rejected by Purchaser in accordance with the procedures set forth in Article
11 or that the parties dispute are in conformance with the Specifications. In the
event that Product is rejected by Purchaser, but is determined to be Acceptable
Product pursuant to Section 11.2, the payment for such Product shall be due and
payable within [***] days after the determination with respect to such Product is made
in accordance with Section 11.2 hereof.

 

 

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PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

	11.	 	INSPECTION OF PRODUCT.

	 	11.1	 	Inspection; Rejection of Product. Purchaser may analyze representative
samples of each lot of Product delivered hereunder for purposes of determining whether
the same meets the Specifications and was manufactured in accordance with cGMP
(“Acceptable Product”), and, if performed, shall do so within [***] days from the date
of delivery of such Product to the designated carrier (or, in the case of a latent
defect, within [***] days after discovery of such latent defect). Purchaser shall
notify Supplier in writing within said [***] days of rejection of any of the Product
that Purchaser is rejecting said Product because it is not Acceptable Product.
	 
	 	11.2	 	Third Party Analysis. If Supplier, after good faith consultation with
Purchaser, disputes any finding by Purchaser that Product is not Acceptable Product,
representative samples of such Product shall be forwarded to a Third Party jointly
selected by Supplier and Purchaser for analysis, which analysis shall be performed in
compliance with applicable FDA regulations for re-testing of pharmaceutical products.
The findings of such Third Party regarding whether the Product was Acceptable Product
shall be binding upon Supplier and Purchaser. The cost of such analysis by such Third
Party shall be borne by the party whose findings differed from those generated by such
Third Party,
	 
	 	11.3	 	Replacement of Product. Unless any nonconformity is caused by a
negligent or wrongful act or omission by Purchaser or its agents, Supplier shall, at
no cost to Purchaser, and at Purchaser’s election: (a) replace any Product order, or
portion thereof, that is not Acceptable Product within [***] days; or (b) cancel any
order or portion of an order for which non-Acceptable Product was delivered.
	 
	 	11.4	 	Disposition of Rejected Product. Supplier shall instruct Purchaser as
to the disposition of any Product order or portion thereof determined not to be
Acceptable Product. At the sole option of Supplier, said Product may be returned to
Supplier, at Supplier’s expense, including shipping costs, or destroyed in an
environmentally acceptable manner, at Supplier’s expense.

	12.	 	ACCESS TO MANUFACTURING FACILITY AND RECORDS.

	 	12.1	 	Inspection by Regulatory Authorities. Upon the request of the FDA or
other Regulatory Authority, such Regulatory Authority shall have access to observe and
inspect the Manufacturing Facility and procedures used for the manufacture, testing,
labeling, packaging and/or warehousing of the Product and to audit such facilities for
compliance with cGMP and/or other applicable regulatory standards.

 

 

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SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

	 	12.2	 	Notification of Inquiries and Inspections. Supplier shall notify
Purchaser within two (2) business days of any written or oral inquiries,
notifications, or inspection activity by the FDA or other regulatory agency in regard
to any Product. Supplier shall provide a complete description of any such governmental
inquiries, notifications or inspections promptly after such visit or inquiry. Supplier
shall furnish to Purchaser (a) within two (2) business days after receipt, any report
or correspondence issued by the FDA or other governmental agency in connection with
such visit or inquiry, including, but not limited to, any FDA Form 483 (list of
Inspectional Observations) or applicable portions of any FDA Warning Letters that
pertain to the Product in the Territory, and (b) not later than five (5) business days
prior to the time it provides to the FDA or other regulatory agency, copies of
proposed responses or explanations relating to items set forth above (each, a
“Proposed Response”), in each case redacted of trade secrets or other confidential or
proprietary information of Supplier that are unrelated to its obligations under this
Agreement or to Product. Supplier shall discuss with Purchaser and consider in good
faith any comments provided by Purchaser on the Proposed Response. After the filing of
a response with the FDA or other regulatory agency, Supplier shall notify Purchaser
and provide Purchaser with copies of any further contacts with such agency relating to
the subject matter of the response.
	 
	 	12.3	 	Inspection by Purchaser. Supplier shall permit Purchaser or Purchaser’s
designee to inspect once annually that portion of the Manufacturing Facility where
Product is manufactured and review such documents as is reasonably necessary for the
purpose of assessing Supplier’s compliance with the Product Specifications and
applicable regulations. Such inspection and document review shall be conducted upon
reasonable prior notice by Purchaser, but not less than thirty (30) days prior to the
proposed inspection, at a time and date mutually agreeable to Supplier and Purchaser,
and shall be coordinated by the Technical Coordinators. Purchaser shall also have a
right to inspect the Manufacturing Facility as set forth in this Section 12.3 at any
time during the Term if Purchaser has reasonable cause to be concerned with whether
the Manufacturing Facility complies with applicable regulations.

	13.	 	REPRESENTATIONS AND WARRANTIES; DISCLAIMERS; LIMITATION OF LIABILITY.

	 	13.1	 	Representations and Warranties by Supplier. Supplier hereby represents,
warrants and covenants that:

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

 

 

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SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

	 	(b)	 	the execution, delivery, and performance of this Agreement by
Supplier has been duly authorized by all requisite corporate action and does
not require any shareholder action or approval;
	 
	 	(c)	 	it has the power and authority to execute and deliver this
Agreement and to perform its obligations hereunder;
	 
	 	(d)	 	the execution, delivery, and performance by Supplier of this
Agreement and its compliance with the provisions of this Agreement does not
and shall not conflict with or result in a breach of any of the terms and
provisions of or constitute a default under (i) any other Agreement to which it
is a party; (ii) the provisions of its charter or operative documents or
bylaws; or (iii) any order, writ, injunction, or decree of any court or
governmental authority entered against it or by which any of its property is
bound;
	 
	 	(e)	 	it shall at all times comply with all applicable material laws
and regulations relating to its activities under this Agreement;
	 
	 	(f)	 	all Product supplied hereunder conforms to the Product
Specifications and any manufacturing, packaging, labeling or storage
specifications provided by Purchaser to Supplier, has been and shall be
manufactured, packaged, labeled and stored in accordance with the applicable
Regulatory Approvals and cGMP, and was not adulterated or misbranded while in
Supplier’s possession or at any time prior to delivery of such Product by
Supplier hereunder; and
	 
	 	(g)	 	it has not and shall not use in any capacity the services of
any persons debarred or convicted under 21 U.S.C. § 335(a) or 335(b) in
connection with the manufacture of the Product,

	 	13.2	 	Representations and Warranties by Purchaser. Purchaser hereby
represents, warrants and covenants that:

	 	(a)	 	it is a corporation or entity duly organized and validly
existing under the laws of the state of its incorporation;
	 
	 	(b)	 	the execution, delivery, and performance of this Agreement by
Purchaser has been duly authorized by all requisite corporate action and does
not require any shareholder action or approval;
	 
	 	(c)	 	it has the power and authority to execute and deliver this
Agreement and to perform its obligations hereunder;

 

 

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SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

	 	(d)	 	the execution, delivery, and performance by Purchaser of this
Agreement and its compliance with the provisions of this Agreement does not
and shall not conflict with or result in a breach of any of the terms and
provisions of or constitute a default under (i) any other Agreement to which
it is a party; (ii) the provisions of its charter or operative documents or
bylaws; or (iii) any order, writ, injunction, or decree of any court or
governmental authority entered against it or by which arty of its property is
bound; and
	 
	 	(e)	 	it shall at all times comply with all applicable material laws
and regulations relating to its activities under this Agreement.

	 	13.3	 	Disclaimer of Warranties by Supplier. EXCEPT AS EXPRESSLY SET FORTH IN
THIS AGREEMENT, SUPPLIER HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED, OR
STATUTORY, WITH RESPECT TO THE PRODUCT AND THE MANUFACTURING FACILITY, INCLUDING, BUT
NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, TITLE, AND NON-INFRINGEMENT.
	 
	 	13.4	 	Disclaimer of Warranties by Purchaser. EXCEPT AS EXPRESSLY SET FORTH
IN THIS AGREEMENT, PURCHASER EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED, OR
STATUTORY, WITH RESPECT TO THE API OR PRODUCT, INCLUDING, BUT NOT LIMITED TO, ANY
IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, AND
NON-INFRINGEMENT.
	 
	 	13.5	 	Limitation of Liability. EXCEPT IN CONNECTION WITH A BREACH BY EITHER
PARTY OF ARTICLE 17, THE INDEMNIFICATION OBLIGATION OF SUPPLIER UNDER SECTION 14.1, AND
THE INDEMNIFICATION OBLIGATION OF PURCHASER UNDER SECTION 14.2, NEITHER SUPPLIER NOR
PURCHASER SHALL BE LIABLE FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY, OR
INCIDENTAL DAMAGES (INCLUDING, BUT NOT LIMITED TO, LOSS OF REVENUE, LOSS OF PROFITS,
COST OF REPLACEMENT, OR COMMERCIAL LOSS) ARISING OUT OF OR RELATED TO THIS AGREEMENT,
HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY (INCLUDING, WITHOUT LIMITATION,
NEGLIGENCE), EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

 

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SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

	14.	 	INDEMNIFICATION.

	 	14.1	 	Indemnification by Supplier. Supplier shall indemnify and hold
harmless Purchaser, its Affiliates, and its and their officers, directors, employees,
and agents from and against any and all losses, claims, damages, liabilities,
obligations, penalties, judgments, awards, costs, expenses, and disbursements,
including, without limitation, the costs, expenses, and disbursements, as and when
incurred, of investigating, preparing, or defending any action, suit, proceeding, or
investigation asserted by a Third Party (including, without limitation, reasonable
attorneys’ fees and expenses), caused by, relating to, based upon, arising out of, or
in connection with (a) any failure of Product supplied hereunder to conform to the
Product Specifications; (b) any failure of Product supplied hereunder to be
manufactured in accordance with applicable Regulatory Approvals and cGMP; (c) any
adulteration of Product supplied hereunder while in Supplier’s possession; (d) breach
of any of Supplier’s representations, warranties, or covenants under this Agreement;
or (e) Supplier’s willful misconduct or negligence.
	 
	 	14.2	 	Indemnification by Purchaser. Purchaser shall indemnify and hold harmless
Supplier and its officers, directors, employees, and agents from and against any and
all losses, claims, damages, liabilities, obligations, penalties, judgments, awards,
costs, expenses, and disbursements, including, without limitation, the costs,
expenses, and disbursements, as and when incurred, of investigating, preparing, or
defending any action, suit, proceeding, or investigation asserted by a Third Party
(including, without limitation, reasonable attorneys’ fees and expenses), caused by,
relating to, based upon, arising out of, or in connection with (a) breach of any of
Purchaser’s representations, warranties, or covenants under this Agreement; or (b)
Purchaser’s willful misconduct or negligence.
	 
	 	14.3	 	Procedure for Indemnification. Each party seeking to be reimbursed,
indemnified, defended, and/or held harmless under Sections 14.1 or 14.2 (each, an
‘indemnitee”) shall (a) provide the party obligated to indemnify such Indemnitee (the
“Indemnitor”) with prompt, written notice of any claim, suit, demand, or other action
for which such Indemnitee seeks to be reimbursed, indemnified, defended, and/or held
harmless (each, a “Claim”), which notice shall include a reasonable identification of
the alleged facts giving rise to such Claim; (b) grant such party reasonable authority
and control over the defense and settlement of any such Claim; and (c) reasonably
cooperate with such party and its agents in defense of any such Claim, at the
Indemnitor’s expense. Each Indemnitee shall have the right to participate in the
defense of any Claim for which Indemnitee seeks to be reimbursed, indemnified,
defended, or held harmless, by using attorneys of such Indemnitee’s choice, at such
Indemnitee’s expense. Any settlement of a Claim for which any Indemnitee seeks to be

 

 

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SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

	 	 	 	reimbursed, indemnified, defended, and/or held harmless under this Article 14 shall
be subject to the prior written approval of such Indemnitee, which approval shall
not be unreasonably withheld, conditioned, or delayed.

	15.	 	RECALLS.

	 	15.1	 	Recall. In the event of an actual or threatened Recall of API or
Product required or recommended by a governmental agency or authority of competent
jurisdiction within the Territory, or if Recall of API or Product is reasonably deemed
advisable by Purchaser, or jointly deemed advisable by Purchaser and Supplier, such
Recall shall be promptly implemented and administered by Purchaser in a manner which
is appropriate and reasonable under the circumstances and in conformity with accepted
trade practices. Supplier shall assist Purchaser as requested by Purchaser to ensure a
timely, accurate, and complete Recall. The costs of any such Recall shall be borne by
the party or parties whose actions or omissions caused the Recall to be necessary.
Supplier shall have no obligation to pay costs of Recalls of API. Supplier shall have
no obligation to pay costs of Recalls of Product to the extent such recalls are (a)
caused by actions of Third Parties occurring after such Product is sold by Purchaser;
(b) due to design defects in the specifications, packaging or labeling or (c) due to
any other breach by Purchaser of its duties under this Agreement, unless such Recall
is due to a breach by both Purchaser and Supplier of their duties under this
Agreement.
	 
	 	15.2	 	Duty to Inform. Each party shall keep the other party fully and
promptly informed of any notification, event, or other information, whether received
directly or indirectly, which might affect the marketability, safety, or effectiveness
of Product or might result in a Recall or Seizure of API or Product by the FDA.
	 
	 	15.3	 	Recall Due to Supplier Breach. In the event of any Recall or Seizure
arising out of or resulting from Supplier’s breach of this Agreement, Supplier shall,
at the election of Purchaser, either:

	 	(a)	 	supply Product, without charge to Purchaser, in an amount
sufficient to replace the amount of Product Recalled or Seized; or
	 
	 	(b)	 	refund to Purchaser, or give credit to Purchaser against
outstanding receivables due from Purchaser, against the price of Product to be
delivered to Purchaser in the future, in amounts equal to the price paid by
Purchaser to Supplier for Product so Recalled or Seized plus the reasonable
transportation costs incurred by Purchaser and not otherwise recovered by
Purchaser in respect of such Recalled or Seized Product.

 

 

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SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

	 	 	 	Supplier shall also pay to Purchaser Purchaser’s reasonable out-of-pocket expenses
incurred in connection with such Recall or Seizure.
	 
	 	15.4	 	Recall Not Due to Supplier Breach. In the event of any Recall or
Seizure not arising out of or resulting from Supplier’s breach of this Agreement,
Purchaser shall pay to Supplier Supplier’s reasonable out-of-pocket expenses incurred
in connection with such Recall or Seizure.

	16.	 	TERM AND TERMINATION.

	 	16.1	 	Term and Renewal. This Agreement shall begin on the Effective Date and
shall continue for three (3) years from the date of the final FDA drug approval letter
for the Product (the “Initial Term”). There after, the Agreement will be automatically
extended for consecutive [***] year terms unless either party notifies the other
party in writing [***] months in advance of its desire not to extend the Agreement.
	 
	 	16.2	 	Termination for Breach. Either party may terminate this Agreement
immediately by giving notice to the other party in the event that the other party
commits a breach of any material provision of this Agreement that is not cured within
[***] days after notice thereof by the non- breaching party.
	 
	 	16.3	 	Termination for Insolvency. Either party may terminate this Agreement
immediately in the event that the other party becomes the subject of a voluntary or
involuntary proceeding relating to insolvency, receivership, liquidation, or
composition for the benefit of creditors.
	 
	 	16.4	 	Termination for Failure to Acquire FDA Approval. Either party may
terminate this Agreement if the FDA has not approved the Product by [***]. However,
prior to exercising this termination right, if the Product is still under review by
the FDA on [***], the parties will negotiate in good faith to continue the Agreement.
	 
	 	16.5	 	Upon Expiration or Termination.
	 
	 	16.5.1	 	Confidential Information. Upon expiration or termination of this Agreement,
all Confidential Information shall be returned to the disclosing party or destroyed
unless otherwise specified or permitted elsewhere under this Agreement. The parties may
retain one (1) copy of Confidential Information for archival purposes only.

 

 

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SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

	 	16.5.2	 	Materials. Upon expiration or termination of this Agreement, Supplier shall
deliver all Materials purchased by Supplier in anticipation of manufacture of Product
hereunder in accordance with the Rolling Forecasts, at Purchaser’s expense. Supplier
shall submit an invoice to Purchaser for the reasonable cost of such Materials, and
Purchaser shall pay such invoice within [***] days after the invoice date.
	 
	 	16.5.3	 	Survival. The following provisions shall survive termination or expiration of
this Agreement: Articles 13-15, this Section 16.5.3, Articles 17-19, any payment
obligations of the parties accruing hereunder prior to the expiration or termination
of this Agreement, and any other provision that is necessary to interpret the
respective rights and obligations of the parties hereunder.

	17.	 	CONFIDENTIALITY.

	 	17.1	 	Confidentiality Obligations. Except as permitted elsewhere under this
Agreement, during the Term and thereafter until the third (3rd) anniversary of the
effective date of termination or expiration of this Agreement, each party agrees to
take Reasonable Steps (as defined in this Section 17.1) (a) to receive and maintain
the Confidential Information of the other party in confidence, (b) not to disclose
such Confidential Information to any third party, and (c) to promptly notify the
disclosing party upon learning of any law, rule, regulation, or court order that
purports to compel disclosure of any Confidential Information of the disclosing party
and to reasonably cooperate with the disclosing party, at the disclosing party’s
expense, in the exercise of the disclosing party’s right to protect the
confidentiality of such Confidential Information. Neither party hereto shall use all
or any part of the Confidential Information of the other party for any purpose other
than to perform its obligations under this Agreement. The parties shall take
Reasonable Steps (as defined in this Section 17.1) to ensure that their employees,
representatives, and agents comply with this provision, and shall be responsible for
any breach by such employees, representatives, and agents. As used herein, “Reasonable
Steps” means at least the same degree of care that the receiving party uses to protect
its own Confidential Information, and in, no event, no less than reasonable care.
	 
	 	17.2	 	Exclusions. Nothing contained herein shall prevent a party from
disclosing Confidential Information pursuant to any applicable law, rule, regulation,
or court order; provided, however, that such party complies with the notice provisions
of Section 17.1 (c) to the extent permissible under applicable laws, rules,
regulations, or court orders. Such disclosure shall not alter the status of such
information hereunder for all other purposes as Confidential Information. In addition,
nothing contained herein shall prevent a party from disclosing Confidential
Information that:

 

 

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SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

	 	(a)	 	is generally known to the public at the time of disclosure or
becomes generally known through no wrongful act on the part of the Recipient;
	 
	 	(b)	 	can be shown by writing to have been in the Recipient’s
possession at the time of disclosure otherwise than as a result of any prior
confidential disclosure by the Disclosing Party or another party or the
Recipient’s breach of any legal obligation;
	 
	 	(c)	 	becomes known to the Recipient through disclosure by sources
other than the Disclosing Party having no duty of confidentiality with respect
to such Confidential Information, whether to the Disclosing Party or another
party, and having the legal right to disclose such Confidential Information;
or
	 
	 	(d)	 	is independently developed by the Recipient without reference
to or reliance upon the Confidential Information.

	 	17.3	 	Remedies. Each party acknowledges and agrees that the provisions of
this Article 17 are reasonable and necessary to protect the other party’s interests in
its Confidential Information, that any breach of the provisions of this Article 17 may
result in irreparable harm to such other party, and that the remedy at law for such
breach may be inadequate. Accordingly, in the event of any breach or threatened breach
of the provisions of this Article 17 by a party hereto, the other party, in addition to
any other relief available to it under this Agreement, at law, in equity, or
otherwise, shall be entitled to seek temporary and permanent injunctive relief
restraining the breaching party from engaging in and/or continuing any conduct that
would constitute a breach of this Article 17, without the necessity of proving actual
damages or posting a bond or other security.

	18.	 	INSURANCE.

	 	18.1	 	Each party shall obtain and keep in force during the term of this Agreement,
general comprehensive liability insurance and product liability insurance covering
occurrence of bodily injury and property damage in an amount of not less than [***]
combined single limit; provided, however, that Supplier may self-insure for this type
of coverage.
	 
	 	18.2	 	Each party shall carry the insurance coverage set forth herein during the term
of this Agreement and through the later of [***] years following termination of this
Agreement or [***] following the expiration of the last to expire Product made in
accordance with this Agreement. Each party shall have the right to request from the
other party certificates of insurance and shall require at least

 

 

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	 	 	 	thirty (30) days written notice to such party prior to any cancellation, nonrenewal
or material change in coverage.

	19.	 	MISCELLANEOUS

	 	19.1	 	Assignment. During the term of this Agreement the rights of either
party under this Agreement shall not be assigned, nor shall the performance of either
party’s duties be delegated without the other party’s prior written consent, such
consent to not be unreasonably withheld, except either party may assign this agreement
to an Affiliate or a purchaser of all or substantially all of such party’s business.
Notice of assignment shall be given to other party at least thirty (30) days prior to
the effective date of said assignment.
	 
	 	19.2	 	Entire Agreement. This Agreement, together with the referenced
schedules, embodies and shall constitute the entire agreement and understanding of the
parties relating to the subject matter of this Agreement and shall supercede all prior
oral or written agreements, contracts, understandings, representations, or
arrangements, whether oral or written, between them, relating to the subject matter of
this Agreement.
	 
	 	19.3	 	Modification. No change or addition may be made to this Agreement or
any schedule attached hereto except in writing, signed by a duly- authorized
representative of each party, and expressly stating that it is a modification of this
Agreement.
	 
	 	19.4	 	Notices. All communications between the parties with respect to any of
the provisions of this Agreement shall be sent to the addresses set forth below, or to
such other addresses as designated by one party to the other party by notice pursuant
to this Section 19.4, by nationally recognized courier or by prepaid certified mail, or
by facsimile transmission or other electronic means of communications, with
confirmation by letter given by the close of business on or before the next following
business day. All notices provided hereunder shall be effective upon receipt.

If to Purchaser, to:

Javelin Pharmaceuticals

125 CambridgePark Drive

Cambridge, MA 02140

Attn: VP — Clinical & Commercial Manufacturing

Tel: 212-554-4362

Fax: 212-554-4554

 

 

[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

with a copy, which copy shall not constitute notice, to:

Javelin Pharmaceuticals

125 CambridgePark Drive

Cambridge, MA 02140

Attn: General Counsel

Tel: 617-349-4512

Fax: 617-349-4505

If to Supplier, to:

Baxter Healthcare Corporation

2 Esterbrook Lane

Cherry Hill, New Jersey 08003-4099

Attn.: Managing Director

Tel: 856-489-2100

Fax: 856-424-8747

with a copy, which copy shall not constitute notice, to:

Baxter Healthcare Corporation

One Baxter Parkway

Deerfield, II 60015

Attn.: General Counsel

Tel: 847-948-2600

Fax: 847-948-2450

	 	19.5	 	Severability. If any provision of this Agreement is held to be void or
unenforceable by a court of competent jurisdiction, such finding(s) shall not be
construed to render any other provision of this Agreement either void or
unenforceable, and all other provisions shall remain in full force and effect. Upon
any such determination, the parties shall make such amendments to this Agreement as
necessary to remove the invalid or unenforceable part of any such provision, but
otherwise achieve to the maximum extent permissible, the economic, legal, and
commercial intent and objectives of the original provision.
	 
	 	19.6	 	Waiver. Failure or delay by either party in exercising or enforcing any
provision, right, or remedy under this Agreement, or waiver of any remedy hereunder,
in whole or in part, shall not be deemed a waiver thereof, or prevent the subsequent
exercise of that or any other rights or remedy,
	 
	 	19.7	 	Force Majeure. Neither Purchaser nor Supplier shall be in breach of
this Agreement if there is any failure of performance under this Agreement

 

 

[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

	 	 	 	occasioned by any act of God, fire, act of government or state, war, civil
commotion, insurrection, embargo, prevention from or hindrance in obtaining energy
or other utilities, labor disputes of whatever nature, failure by a supplier to
supply API, Novel Excipient or Materials or any other reason beyond the control and
without the fault or negligence of the party affected thereby (a “Force Majeure
Event”). Such excuse shall continue as long as the Force Majeure Event continues.
Upon cessation of such Force Majeure Event, the affected party shall promptly
resume performance hereunder. Each party agrees to give the other party prompt
written notice of the occurrence of any Force Majeure Event, the nature thereof,
and the extent to which the affected party will be unable fully to perform its
obligations hereunder. Each party further agrees to use reasonable efforts to
correct the Force Majeure Event as quickly as possible and to give the other party
prompt written notice when it is again fully able to perform such obligations. In
the event any Force Majeure event prevents Supplier from supplying Product for a
period longer than one hundred twenty (120) days, Purchaser shall have the right to
source the Product from Third Parties or to appoint another supplier of the
Product.
	 
	 	19.8	 	Headings. The headings and captions used in this Agreement are solely
for the convenience of reference and shall not affect its interpretation.
	 
	 	19.9	 	Independent Contractors. The parties acknowledge, agree and declare
that the relationship hereby established between them is solely that of provider and
recipient of manufacturing services and that each party hereto is an independent
contractor with respect to the other.
	 
	 	19.10	 	Maintenance of Agreement. Supplier shall keep a copy of this Agreement
and any amendments hereto at the Manufacturing Facility, and at any other location
permitted in accordance with this Agreement where the Product is packaged or labeled,
during the Term and for a period of two (2) years following the date of the final
shipment of Product from such facility or location. Supplier shall make such copy of
the Agreement and any amendments hereto available for inspection at any reasonable
hour to any officer or employee of the FDA who requests such copy in the course of
performing his or her duties for the FDA.
	 
	 	19.11	 	Choice of Law: Jurisdiction. The provisions of this Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without regard to conflict of laws principles. Any and all disputes between the
parties arising out of or related to this Agreement shall be heard in the state and
federal courts located in the State of Delaware, and the parties hereby consent and
submit to the jurisdiction of such courts.

 

 

[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

	 	19.12	 	Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute together the same document.

[SIGNATURE PAGE FOLLOWS]

 

 

[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

     IN WITNESS WHEREOF, the parties hereto, by their authorized officers, have executed this
Agreement as of the Effective Date.

	 	 	 	 	 	 	 
	JAVELIN PHARMACEUTICALS	 	BAXTER HEALTHCARE CORPORATION
	 
	 	 	 	 	 	 
	By:

	 	/s/ Daniel B. Carr	 	By:	 	/s/ Daniel Tasse 
	 

	 	 
	 	 	 	 
	Name:

	 	Daniel B. Carr, M.D. 	 	Name:	 	Daniel Tasse
	 

	 	 
	 	 	 	 
	Title:

	 	CEO/CMD 	 	Title:	 	GM-BPT 
	 

	 	 
	 	 	 	 

 

 

[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

SCHEDULE 1.9

API SPECIFICATIONS

See attached specifications.

To be added by the Parties upon completion of the Regulatory Services work under Schedule 2.2.

 

 

[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

SCHEDULE 1.24

NOVEL EXCIPIENT SPECIFICATIONS

See attached specifications.

To be added by the Parties upon completion of the Regulatory Services work under Schedule 2.2.

 

 

[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

SCHEDULE 1.26

PRODUCT SPECIFICATIONS

[***]

 

 

[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

SCHEDULE 1.28

QUALITY AGREEMENT

[***]

 

 

[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

SCHEDULE 2.1

DEVELOPMENT PLAN

[***]

 

 

[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

SCHEDULE 2.2

PRODUCT DEVELOPMENT WORK AND BUDGET*

[***]

 

 

[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH
PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

SCHEDULE 10.1

PRICING

[***]EX-10.1

 

Exhibit 10.1

AMENDED AND RESTATED SENIOR EXECUTIVE EMPLOYMENT AGREEMENT

          This Amended and Restated Senior Executive Employment Agreement (the “Agreement”) is
entered into as of this 8th day of August, 2007 (the “Effective Date”) by and between Mark
F. O’Neil (“Executive”) and DealerTrack Holdings, Inc, a Delaware corporation
(“Employer”) with principal offices at 1111 Marcus Avenue, Suite M04, Lake Success, NY
11042.

          WHEREAS, Executive and Employer are parties to a senior executive employment agreement, dated
as of May 26, 2005 (the “Existing Employment Agreement”); and

          WHEREAS,
the parties hereto wish to amend and restate the Existing Employment Agreement
pursuant to this Agreement;

          NOW, THEREFORE, in consideration of the promises and the agreements hereinafter set forth, the
parties hereto hereby agree that, upon the effectiveness of this Agreement, the Existing Employment
Agreement is hereby amended and restated in its entirety as follows:

          Section 1. Term

          Employer shall continue to employ Executive and Executive agrees to continue such employment,
upon the terms and conditions hereinafter set forth, from the Effective Date through and including
August 8, 2008 (the “Initial Term”). This Agreement shall renew automatically for
successive one year periods (each, a “Renewal Term”) unless one party gives notice to the
other party, in writing, at least sixty (60) days prior to the expiration of this Agreement (or any
renewal) of its desire to terminate the Agreement. The term of this Agreement, including the
Initial Term and any Renewal Term, shall be referred to herein as the “Term”.

          Section 2. Executive’s Duties

          (a) Executive shall be Chairman and Chief Executive Officer and shall report directly to the
Board of Directors of Employer (the “Board”). Executive shall faithfully and diligently
perform his duties at the direction of the Board, or a committee of the Board, to the best of
Executive’s ability. Executive shall (i) devote his best efforts, skill, and ability and full
business time and attention to the performance of the services customarily incident to such office,
subject to vacations and sick leave as provided herein and in accordance with Employer policy, (ii)
carry out his duties in a competent and professional manner; and (iii) generally promote the
interests of Employer. Subject to applicable law, Executive shall not knowingly participate in any
activity that is detrimental to the interests of Employer or any of its affiliates, including,
without limitation, any public criticism or disparagement of any type by Executive, through the
media or otherwise, of Employer or any of its affiliates or employees, except in connection with
the exercise of Executive’s rights against Employer or any of its affiliates.

 

          (b) Executive agrees to abide by all policies applicable to senior executive officers of
Employer promulgated from time to time by Employer, which policies are enforced uniformly and
applicable to all similar executives of Employer.

          (c) Except for such business travel as may be incident to his duties hereunder, Executive
shall perform his duties at Employer’s offices at the address set forth in the preamble to this
Agreement or at such other location as may be approved by Employer.

          Section 3. Compensation for Executive’s Services

          In consideration of the duties and services to be performed by Executive pursuant to Sections
1 and 2 hereof, Executive shall receive:

          (a) Salary. Executive shall earn salary (the “Salary”) at the annual rate of
Five Hundred Ten Thousand Dollars ($510,000) (the “Minimum Salary”), less all applicable
federal, state, and local tax withholdings. Such Salary shall be earned and shall be payable in
periodic installments in accordance with Employer’s payroll practices. During the Term, the Board
or the Compensation Committee of the Board (the “Compensation Committee”) will review the
Salary annually and may in its discretion increase the Salary, but may not reduce it during the
Term unless Employer institutes salary reductions across the board; provided, however, that in no
event shall the Salary be reduced below the Minimum Salary without Executive’s written consent.

          (b) Bonus. For each fiscal year of Employer (each, a “Fiscal Year”),
Executive shall be entitled to receive a cash performance bonus (a “Bonus”) which shall be
based on the achievement of certain performance benchmarks by Employer during such Fiscal Year
which shall be determined by the Board. The Board shall review the target Bonus on an annual basis
and, in its sole discretion, may increase such target Bonus for any Fiscal Year. The target Bonus
shall not be decreased except in connection with company-wide bonus reductions. The target Bonus
for any Fiscal Year shall be at least eighty (80%) percent of the Salary for such Fiscal Year. The
Bonus for each Fiscal Year shall be paid, if at all, to Executive on a schedule consistent with
Employer’s bonus payments to its other similarly situated senior executive officers by no later
than two and one half (21/2) months following the end of such Fiscal Year. Executive understands and
agrees that the Bonus is established in part as an inducement for Executive to remain employed by
Employer and except as provided in Section 5(c) of this Agreement, or in the Employer’s sole
discretion, in the event that Executive’s employment is terminated prior to the end of any Fiscal
Year during the Term, then Executive shall not receive payment of any Bonus for such year.

          (c) Equity. In connection with Executive’s employment, Executive has been and may
continue to be granted stock options (“Stock Options”) to purchase equity securities of
Employer pursuant to the terms of DealerTrack Holdings, Inc. 2001 Stock Option Plan, effective as
of August 10, 2001, as amended (“Stock Option Plan”) or may be granted Stock Options or
other equity based awards pursuant to the terms of the DealerTrack Holdings, Inc. 2005 Incentive
Award Plan, effective as of May 26, 2005, as amended (the “2005 Incentive Award Plan”), or
any other successor equity incentive plans (collectively, the “Stock Incentive Plans”).
Except as otherwise provided herein, the terms of the Stock Options shall be governed by the

2

 

Stock Incentive Plans. Executive shall be credited with twenty-four (24) months accelerated
vesting of his Stock Options upon termination of Executive’s employment by: (1) Employer without
Cause (as defined below); or (2) Executive for Good Reason (as defined below). Executive shall be
credited with thirty-six (36) months accelerated vesting of his Stock Options upon a Change of
Control (defined below). Executive shall be credited with full acceleration and vesting of his
Stock Options upon the earlier of: (1) the elimination of Executive’s position or a termination of
Executive’s employment, in either event, within twelve (12) months after a Change of Control; (2) a
material negative change in Executive’s compensation or responsibilities within twelve (12) months
after a Change of Control; or (3) the requirement that Executive be based at a location which is
more than fifty (50) miles from Employer’s offices at the address set forth in the preamble to this
Agreement within twelve (12) months after a Change of Control. Anything in the Stock Incentive
Plans to the contrary notwithstanding, if Executive’s employment is terminated by Executive with
Good Reason or by Employer without Cause, or under circumstances described above which would result
in certain accelerated vesting of any unvested Stock Options held by Executive, the unexercised
portion of any Stock Options held by Executive will not terminate until the twelve (12) month
anniversary of the date of termination of Executive’s employment. In the event Employer elects to
grant equity based awards other than Options, such grants shall, where appropriate, be subject to
equivalent acceleration provisions as set forth in this Section 3(c). For purposes hereof, a
“Change of Control” shall mean and includes each of the following:

     (i) A transaction or series of transactions (other than an offering of shares of
Employer to the general public through a registration statement filed with the Securities
and Exchange Commission) whereby any “person” or related “group” of “persons” (as such terms
are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended)
(other than the Employer, any of its subsidiaries, an employee benefit plan maintained by
the Employer or any of its subsidiaries or a “person” that, prior to such transaction,
directly or indirectly controls, is controlled by, or is under common control with, the
Employer) directly or indirectly acquires beneficial ownership (within the meaning of Rule
13d-3 under the Securities Exchange Act of 1934, as amended) of securities of the Employer
possessing more than 50% of the total combined voting power of the Employer’s securities
outstanding immediately after such acquisition; or

     (ii) During any period of two consecutive years, individuals who, at the beginning of
such period, constitute the Board together with any new director(s) (other than a director
designated by a person who shall have entered into an agreement with the Company to effect a
transaction described in Section 3(c)(i) or Section 3(c)(iii)) whose election by the Board
or nomination for election by the Employer’s stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at the beginning
of the two-year period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof; or

     (iii) The consummation by the Employer (whether directly involving the Employer or
indirectly involving the Employer through one or more intermediaries) of (x) a merger,
consolidation, reorganization, or business combination or (y) a sale or other disposition of
all or substantially all of the Employer’s assets in any single transaction or

3

 

series of related transactions or (z) the acquisition of assets or stock of another
entity, in each case other than a transaction:

     (A) Which results in the Employer’s voting securities outstanding immediately
before the transaction continuing to represent (either by remaining outstanding or
by being converted into voting securities of the Employer or the person that, as a
result of the transaction, controls, directly or indirectly, the Employer or owns,
directly or indirectly, all or substantially all of the Employer’s assets or
otherwise succeeds to the business of the Employer (the Employer or such person, the
“Successor Entity”)) directly or indirectly, at least a majority of the
combined voting power of the Successor Entity’s outstanding voting securities
immediately after the transaction, and

     (B) After which no person or group beneficially owns voting securities
representing 50% or more of the combined voting power of the Successor Entity;
provided, however, that no person or group shall be treated for purposes of this
Section 3(c)(iii) as beneficially owning 50% or more of combined voting power of the
Successor Entity solely as a result of the voting power held in the Employer prior
to the consummation of the transaction; or

     (iv) The Employer’s stockholders approve a liquidation or dissolution of the Employer.

The Board or its designee shall have full and final authority, which shall be exercised in its
discretion, to determine conclusively whether a Change of Control of the Employer has occurred, and
the date of the occurrence of such Change of Control and any incidental matters relating thereto.

          (d) Benefits. Employer shall provide Executive with the right to participate in and
receive benefits from all life, accident, disability, medical and pension plans, and all similar
benefits as are from time to time in effect and are generally made available to similar situated
senior executive officers of Employer. The amount and extent of benefits to which Executive is
entitled shall be governed by the specific benefit plan, as it may be amended from time to time.

          (e) Expenses. Employer shall promptly reimburse Executive for reasonable expenses for
cellular telephone usage, entertainment, travel, meals, lodging and similar items incurred in the
conduct of Employer’s business. Such expenses shall be reimbursed in accordance with Employer’s
expense reimbursement policies and guidelines.

          (f) Vacation; Sick Leave. During the Term, Executive shall be entitled to four weeks
(4) weeks vacation per year, paid holidays, sick leave, and similar benefits, to be earned and used
in accordance with Employer’s policy and procedure for other similarly situated senior executive
officers.

          (g) Modification. Employer reserves the right to modify, suspend or discontinue any
and all of the above plans, practices, policies and programs referenced in Sections 3(d) and (e) at
any time in its discretion without recourse by Executive so long as such action is taken generally
with respect to other similarly situated senior executive officers. Any

4

 

such modification, suspension or discontinuance of the plans, practices and policies
referenced in Section 3(e) will not apply to otherwise reimbursable expenses incurred by Executive
prior to any such modification, suspension or discontinuance.

          Section 4. Termination of Employment

          (a) Resignation. Executive may voluntarily terminate his employment with Employer, at
any time, with or without Good Reason, upon written notice to Employer.

          (b) Termination. Employer may terminate Executive’s employment at any time, with or
without Cause, upon written notice to Executive.

          (c) Death or Disability. Executive’s employment shall terminate immediately upon
Executive’s death. In the event Employer, in good faith, determines that Executive is unable to
perform the functions of his position due to a Disability (as defined below), it may notify
Executive in writing of its intention to terminate Executive’s employment and Executive’s
employment with Employer shall terminate effective on the thirtieth (30th) day after receipt of
such notice by Executive. For the purposes of this Agreement, “Disability” shall mean a
physical or mental impairment that substantially limits a major life activity of Executive and
renders Executive unable to perform the essential functions of his position even with reasonable
accommodation (that does not impose an undue hardship on Employer), and which has lasted at least
(i) sixty (60) consecutive days, (ii) the balance of Executive’s entitlement to leave, if any,
under the Family and Medical Leave Act, or other similar statute or (iii) the balance of any
election period under the Employer’s long term disability program (without regard to whether
Executive is awarded benefits under such program), whichever is longer.

          (d) Cause. Employer may immediately terminate Executive’s employment for
“Cause” by giving written notice to Executive. For purposes of this Agreement,
“Cause” shall mean:

	 	(1)	 	Executive’s commission of an act of fraud or
embezzlement upon Employer or any of its affiliates; or
	 
	 	(2)	 	Executive’s commission of any willful act
intended to injure the reputation, business, or any business
relationship of Employer or any of its affiliates; or
	 
	 	(3)	 	Executive is found by a court of competent
jurisdiction to have committed a felony; or
	 
	 	(4)	 	the refusal or failure of Executive to perform
Executive’s duties with Employer in a competent and professional manner
that is not cured by Executive within ten (10) business days after a
written demand therefor is delivered to Executive by the Board which
specifically identifies the manner in which the Board believes that
Executive has not substantially performed Executive’s duties; provided,
further, however, that if the Board, in good faith, determines that the
refusal or failure by Executive is egregious in

5

 

	 	 	 	nature or is not susceptible of cure, then no cure period shall be
required hereunder; or
	 
	 	(5)	 	the refusal or failure of Executive to comply
with any of his material obligations under this Agreement (including
any exhibit hereto) that is not cured by Executive within ten (10)
business days after a written demand therefor is delivered to Executive
by the Board which specifically identifies the manner in which the
Board believes Executive has materially breached this Agreement;
provided, further, however, that if the Board, in good faith,
determines that the refusal or failure by Executive is egregious in
nature or is not susceptible of cure, then no cure period shall be
required hereunder.

          (e) Good Reason. Executive may terminate his employment for “Good Reason,” by
delivering written notice of such termination (“Employer Default Notice”) to Employer
within sixty (60) days of the occurrence of any of the following events, each of which shall
constitute Good Reason: (i) Employer’s material breach of any provision of this Agreement, the
Stock Incentive Plans or any agreements thereunder, which has not been cured within the allotted
time; (ii) a material reduction of Executive’s then current title, status, authority,
responsibility or duties or the assignment to Executive of any duties materially inconsistent with
Executive’s then current position; (iii) any material reduction in Executive’s salary or benefits;
(iv) the failure of any successor entity to assume the terms of this Agreement upon any Change of
Control; (v) the relocation of Executive to a facility or location more than fifty (50) miles from
Employer’s principal offices at the address set forth in the preamble to this Agreement; or (vi)
the failure of Employer to renew this Agreement upon the expiration of the Initial Term or any
Renewal Term. The Employer Default Notice shall specify the reason for Executive’s belief that an
event constituting Good Reason has occurred. Notwithstanding the foregoing, any material breach of
this Agreement by Employer, or other event constituting Good Reason, shall not constitute Good
Reason if any such breach or other event is cured or corrected by Employer within thirty (30) days
following delivery to Employer of the Employer Default Notice.

          (f) Continuing Obligations. Executive acknowledges and agrees that any termination
under this Section 4 is not intended, and shall not be deemed or construed, to affect in any way
any of Executive’s covenants and obligations contained in Sections 6, 7, and 8 hereof, which shall
continue in full force and effect beyond such termination for any reason.

          Section 5. Termination Obligations

          (a) Resignation. If Executive’s employment is terminated voluntarily by Executive
without Good Reason, Executive’s employment shall terminate without further obligations to
Executive other than for payment of the sum of any unpaid Salary determined by the Board and
reimbursable expenses and vacation accrued and owing to Executive prior to the termination. The
sum of such amounts shall hereinafter be referred to as the “Accrued Obligations,” which
shall be paid to Executive or Executive’s estate or beneficiary within thirty (30) days of the date
of termination. If Executive voluntarily terminates his employment without

6

 

Good Reason and within (30) days of such termination, Employer determines that it would have
had Cause to terminate Executive pursuant to Section 4(d), Executive shall be deemed to have been
terminated for Cause and the terms of Section 5(b) shall apply.

          (b) Cause. If Executive’s employment is terminated by Employer for Cause, this
Agreement shall terminate without further obligations to Executive other than for the timely
payment of Accrued Obligations. If it is subsequently determined by an arbitrator, pursuant to
Section 19 hereof, that Employer did not have Cause for termination, then Employer’s decision to
terminate shall be deemed to have been made without Cause and the terms of Section 5(c) shall
apply.

          (c) By Employer Other than for Cause; Death or Disability; By Executive for Good
Reason.

               (1) If (A) Employer terminates Executive’s employment for (x) a reason other than Cause, or
(y) due to Executive’s death or Disability, or (B) Executive terminates his employment for Good
Reason, Employer shall have no further obligations to Executive other than for (i) the payment of
Accrued Obligations, (ii) severance pay in an amount equal to twelve (12) months of Salary and
payable within thirty (30) days of the Severance Commencement Date; provided, however, that in the
event that Executive’s termination of employment is within twelve (12) months after a Change of
Control, such severance pay shall be increased to an amount equal to twenty four (24) months of
Salary, (iii) a pro rata bonus calculated based on multiplying the percentage of the year Executive
worked for Employer during the year of his termination by Executive’s target Bonus for such year
and payable within thirty (30) days of the Severance Commencement Date, and (iv) the reimbursement
of premiums otherwise payable by Executive pursuant to COBRA for a period of up to 12 months, or
until Executive no longer is eligible for COBRA continuation coverage, whichever is earlier. For
purposes of this Section 5, “Severance Commencement Date” shall mean (x) if any stock of
Employer or its affiliates is publicly traded on an established securities market or otherwise and
the Board (or its delegate) determines that as of the date of termination of Executive’s employment
that the Executive is a “key employee” (within the meaning of Section 416(i) of the Internal
Revenue Code of 1986, as amended (the “Code”), as interpreted in accordance with Section
409A of the Code and Department of Treasury regulations and other interpretive guidance issued
thereunder) and that Section 409A of the Code applies with respect to payments to Executive
pursuant to Section 5(c)(1)(ii) and (iii), the six-month anniversary of the date of the Executive’s
“separation from service” (within the meaning of section 409A of the Code); or (y) if the Board (or
its delegate) determines that Executive is not such a “key employee” as of date of Executive’s
termination of employment (or that Section 409A of the Internal Revenue Code does not apply with
respect to payments to the Executive pursuant to Section 5(c)(1)(ii) and (iii)), the date of
Executive’s termination of employment. The payments described in this Section 5(c)(1)(i) shall be
made within thirty (30) days of the date of Executive’s termination of employment.

               (2) If Executive terminates his employment for Good Reason and it is subsequently determined
by an arbitrator, pursuant to Section 20 hereof, that Executive did not have Good Reason for
termination, then Executive’s decision to terminate for Good Reason shall be deemed to have been a
voluntary resignation, the terms of Section 5(a) shall apply, and all

7

 

monies paid to Executive pursuant to this Section 5(c)(1), except for those monies paid
pursuant to Section 5(c)(1)(i), shall be immediately returned to Employer.

               (3) The amounts payable pursuant to Section 5(c)(1) shall be the only amounts Executive shall
receive for termination in accordance with this Section 5(c); provided, however, that no amounts
shall be payable pursuant to this section 5(c) on or following the date Executive breaches any of
Sections 7, 8 or 9 of this Agreement.

          (d) Release. Notwithstanding anything to the contrary contained herein, no severance
payments required hereunder shall be made by Employer until such time as Executive shall execute a
general release for the benefit of Employer and its affiliates in a form satisfactory to Employer.
Such general release shall not apply to (i) Executive’s rights under any Stock Incentive Plan award
agreements or (ii) Executive’s rights, as applicable, to indemnification under Employer’s charter
or bylaws, any indemnification agreement or applicable law.

          (e) Equity Compensation Awards. Except as expressly provided herein, except for the
provisions of Section 3(c) of this Agreement, the terms of the Stock Incentive Plans and any
related award agreements and/or notice of grant shall govern the termination, vesting, and/or
exercise of Executive’s stock options or other equity awards upon the termination of Executive’s
employment for any reason.

          (f) Exclusive Remedy. Executive agrees that the payments set forth in this Agreement
shall constitute the exclusive and sole remedy for any termination of Executive’s employment and
Executive covenants not to assert or pursue any other remedies, at law or in equity, with respect
to this Agreement.

          (g) Termination of Executive’s Office. Following the termination of Executive’s
employment for any reason, Executive shall hold no further office or position with Employer or any
of its affiliates.

          Section 6. Parachute Payments.

          (a) If it is determined by a nationally recognized United States public accounting firm
selected by the Employer and approved in writing by the Executive (which approval shall not be
unreasonably withheld) (the “Auditors”) that any payment or benefit made or provided to the
Executive in connection with this Agreement or otherwise (including without limitation any Stock
Option or other equity based award vesting) (collectively, a “Payment”), would be subject
to the excise tax imposed by Section 4999 of the Code (the “Parachute Tax”), then the
Employer shall pay to the Executive, prior to the time the Parachute Tax is payable with respect to
such Payment, an additional payment (a “Gross-Up Payment”) in an amount such that, after
payment by the Executive of all taxes (including any Parachute Tax) imposed upon the Gross-Up
Payment, the Executive retains an amount of the Gross-Up Payment equal to the Parachute Tax imposed
upon the Payment. The amount of any Gross-Up Payment shall be determined by the Auditors, subject
to adjustment, as necessary, as a result of any Internal Revenue Service position. For purposes of
making the calculations required by this Agreement, the Auditors may make reasonable assumptions
and approximations concerning applicable taxes and may rely on reasonable, good faith
interpretations concerning the application of Sections

8

 

280G and 4999 of the Code, provided that the Auditors’ determinations must be made with
substantial authority (within the meaning of Section 6662 of the Code).

          (b) The federal tax returns filed by the Executive (and any filing made by a consolidated tax
group which includes the Employer) shall be prepared and filed on a basis consistent with the
determination of the Auditors with respect to the Parachute Tax payable by the Executive. The
Executive shall make proper payment of the amount of any Parachute Tax, and at the request of the
Employer, provide to the Employer true and correct copies (with any amendments) of his federal
income tax return as filed with the Internal Revenue Service, and such other documents reasonably
requested by the Employer, evidencing such payment. If, after the Employer’s payment to the
Executive of the Gross-Up Payment, the Auditors determine in good faith that the amount of the
Gross-Up Payment should be reduced or increased, or such determination is made by the Internal
Revenue Service, then within ten (10) business days of such determination, the Executive shall pay
to the Employer the amount of any such reduction, or the Employer shall pay to the Executive the
amount of any such increase; provided, however, that in no event shall the Executive have
any such refund obligation if it is determined by the Employer that to do so would be a violation
of the Sarbanes-Oxley Act of 2002, as it may be amended from time to time; and provided, further,
that if the Executive has prior thereto paid such amounts to the Internal Revenue Service, such
refund shall be due only to the extent that a refund of such amount is received by the Executive;
and provided, further, that (i) the fees and expenses of the Auditors (and any other legal and
accounting fees) incurred for services rendered in connection with the Auditor’s determination of
the Parachute Tax or any challenge by the Internal Revenue Service or other taxing authority
relating to such determination shall be paid by the Employer and (ii) the Employer shall indemnify
and hold the Executive harmless on an after-tax basis for any interest and penalties imposed upon
the Executive to the extent that such interest and penalties are related to the Auditor’s
determination of the Parachute Tax or the Gross-Up Payment. Notwithstanding anything to the
contrary herein, the Executive’s rights under this Section 6 shall survive the termination of his
employment for any reason and the termination or expiration of this Agreement for any reason.

          Section 7. Restrictions Respecting Confidential Information

          Executive hereby covenants and agrees that, during his employment and thereafter, Executive
will not, under any circumstance, disclose in any way any Confidential Information (as defined
below) to any other person other than (i) at the direction of and for the benefit of Employer, (ii)
to his attorney or other advisers in connection with Executive’s enforcement of his rights
hereunder, provided such individuals or entities agree to be bound by the confidentiality
restrictions herein contained, and if such Confidential Information is relevant to such enforcement
action, to the court or arbitrator, as applicable, subject to a protective order. For the purposes
of the foregoing, “Confidential Information” means any information pertaining to the
assets, business, creditors, vendors, manufacturers, customers, data, employees, financial
condition or affairs, formulae, licenses, methods, operations, procedures, reports, suppliers,
systems and technologies of Employer and its affiliates, including (without limitation) the
contracts, patents, trade secrets and customer lists developed or otherwise acquired by Employer
and its affiliates; provided, however, that Confidential Information shall exclude any information
that was, is, or becomes publicly available other than through disclosure by Executive or any other
person known to Executive to be subject to confidentiality obligations to Employer. All

9

 

Confidential Information is and will remain the sole and exclusive property of Employer and
its affiliates. Following the termination of his employment, Executive shall return all documents
and other tangible items containing Confidential Information to Employer, without retaining any
copies, notes or excerpts thereof.

          Section 8. Proprietary Matters

          Executive expressly understands and agrees that any and all improvements, inventions,
discoveries, processes, or know-how that are generated or conceived by Executive during the Term
(collectively, the “Inventions”) will be the sole and exclusive property of Employer, and
Executive will, whenever requested to do so by Employer (either during the Term or thereafter),
execute and assign any and all applications, assignments and/or other instruments and do all things
which Employer may deem necessary or appropriate in order to apply for, obtain, maintain, enforce
and defend patents, copyrights, trade names or trademarks of the United States or of foreign
countries for said Inventions, or in order to assign and convey or otherwise make available to
Employer the sole and exclusive right, title, and interest in and to said Inventions, applications,
patents, copyrights, trade names or trademarks; provided, however, that the provisions of this
Section 8 shall not apply to an Invention that Executive developed entirely on his own time without
using Employer’s Confidential Information except for those Inventions that either (i) directly and
materially relate, at the time of conception or reduction to practice of the invention, to
Employer’s business, or actual or demonstrably anticipated research or development of Employer, or
(ii) directly and materially result from any work performed by Executive for Employer. Executive
shall promptly communicate and disclose to Employer all Inventions conceived, developed or made by
him during his employment by Employer, whether solely or jointly with others, and whether or not
patentable or copyrightable, (a) which relate to any matters or business of the type carried on or
being developed by Employer, or (b) which result from or are suggested by any work done by him in
the course of his employment by Employer. Executive shall also promptly communicate and disclose
to Employer all material other data obtained by him concerning the business or affairs of Employer
in the course of his employment by Employer.

          Section 9. Nonsolicitation/Non-Compete

          (a) Executive agrees that throughout his employment and for a period of two (2) years
following the termination of his employment for any reason, he will not directly or indirectly,
own, manage, operate, control, or participate in the ownership, management, operation, or control
of, or be connected with, or have any financial interest in, any Competitor. Ownership, for
personal investment purposes only, of not to exceed (i) individually, two (2%) percent of the
outstanding capital stock of any privately held entity, or (ii) voting stock of any publicly held
corporation shall not constitute a violation hereof. For purposes of this Agreement, the term
“Competitor” shall mean any individual or entity, present or future, then providing any of
the following products or services: (1) a multi-finance source automotive finance portal, (2)
electronic contracting for automotive finance or lease transactions, other than at a financing
source entity that purchases electronic contracts or leases from automotive dealers, (3) automotive
lease, retail and/or balloon payment comparison or desking tools, (4) dealer management systems
(DMS), (5) any other sales or finance and insurance-related products or services for automotive
dealerships similar to any products or services offered by Employer or

10

 

any of its affiliates, or (6) any other products or services similar to any products or
services offered by Employer or any of its affiliates and which product or service category
accounts for at least 15% of the consolidated revenues for the last fiscal quarter of Employer.

          (b) Executive agrees that during his employment with Employer and for a period of two (2)
years following the termination of his employment for any reason, he will not actively solicit for
employment, consulting or any other arrangement any employee of Employer or any of its present or
future affiliates (while an affiliate).

          (c) Executive agrees that during his employment with Employer and for a period of two (2)
years following the termination of his employment for any reason, he will not influence or attempt
to influence customers of Employer or any of its present or future affiliates, either directly or
indirectly, to divert their business to any Competitor.

          (d) The restrictions contained in this Section 9 are necessary for the protection of the
business and goodwill of Employer and are considered by Executive to be reasonable for such
purpose. Further, Executive represents that these restrictions will not prevent him from earning a
livelihood during the restricted period.

          (e) This Section 9 shall survive the termination or expiration of this Agreement.

          Section 10. Equitable Relief

          Executive acknowledges and agrees that Employer will suffer irreparable damage which cannot be
adequately compensated by money damages in the event of a breach, or threatened breach, of any of
the terms and provisions of Sections 7, 8 and 9 of this Agreement, and that, in the event of any
such breach, or threatened breach, Employer will not have an adequate remedy at law. It is
therefore agreed that Employer, in addition to all other such rights, powers, privileges and
remedies that it may have, shall be entitled to injunctive relief, specific performance or such
other equitable relief as Employer may request to enforce any of those terms and provisions and to
enjoin or otherwise restrain any act prohibited thereby, and Executive will not raise and hereby
waives any objection or defense that there is an adequate remedy available at law. Notwithstanding
the provisions of Section 20 of this Agreement, Executive agrees that Employer shall be entitled to
seek such injunctive relief, without bond, in a court of competent jurisdiction and Executive
hereby consents to the jurisdiction of the state and federal courts of New York for purposes of
such an action. Executive agrees that any claim he may have against Employer or any of its
affiliates shall not constitute a defense against the issuance of any such equitable relief. The
foregoing shall not constitute a waiver of any of Employer’s rights, powers, privileges and
remedies against or in respect of a breaching party or any other person or thing under this
Agreement, or applicable law.

          Section 11. Notice

          Any notice, request, demand or other communication hereunder shall be in writing, shall be
delivered by hand or sent by registered or certified mail or by reputable overnight delivery
service, postage prepaid, to the addressee at the address set forth below (or at

11

 

such other address as shall be designated hereunder by written notice to the other party
hereto) and shall be deemed conclusively to have been given when actually received by the
addressee.

          All notices and other communications hereunder shall be addressed as follows:

               If to Executive at the address set forth in the Employer’s
payroll records.

               If to Employer:

               DealerTrack Holdings, Inc.

               1111 Marcus Avenue, Suite M04

               Lake Success, NY 11042

               With a copy to:

               General Counsel

               DealerTrack Holdings, Inc.

               1111 Marcus Avenue, Suite M04

               Lake Success, NY 11042

or to such other address as either party shall have furnished to the other in writing in accordance
herewith.

          Section 12. Legal Counsel

          In entering into this Agreement, the parties represent that they have relied upon the advice
of their attorneys, who are attorneys of their own choice, and that the terms of this Agreement
have been completely read and explained to them by their attorneys, and that those terms are fully
understood and voluntarily accepted by them.

          Section 13. Section and Other Headings

          The section and other headings contained in this Agreement are for reference purposes only and
shall not affect the meaning or interpretation of this Agreement.

          Section 14. Governing Law

          This Agreement has been executed and delivered, and shall be governed by and construed in
accordance with the applicable laws pertaining, in the State of New York, without regard to
conflicts of laws principles.

          Section 15. Severability

          In the event that any term or provision of this Agreement shall be finally determined to be
superseded, invalid, illegal or otherwise unenforceable pursuant to applicable law by a
governmental authority having jurisdiction and venue, that determination shall not impair or
otherwise affect the validity, legality or enforceability, to the maximum extent

12

 

permissible by law, (a) by or before that authority of the remaining terms and provisions of
this Agreement, which shall be enforced as if the unenforceable term or provision were deleted, or
(b) by or before any other authority of any of the terms and provisions of this Agreement.

          Section 16. Counterparts

          Section 17. This Agreement may be executed in two counterpart copies of the entire document or
of signature pages to the document, each of which may be executed by one of the parties hereto, but
all of which, when taken together, shall constitute a single agreement binding upon both of the
parties hereto.

          Section 18. Benefit

          This Agreement shall be binding upon and inure to the benefit of the respective parties hereto
and their legal representatives, successors and assigns. Insofar as Executive is concerned, this
Agreement, being personal, cannot be assigned; provided, however, that should Executive become
entitled to payment pursuant to Section 5 hereof, he may assign his rights to such payment to his
legal representatives, successors, and assigns. Without limiting the generality of the foregoing,
all representations, warranties, covenants and other agreements made by or on behalf of Executive
in this Agreement shall inure to the benefit of the successors and assigns of Employer.

          Section 19. Modification

          This Agreement may not be amended or modified other than by a written agreement executed by
all parties hereto.

          Section 20. Entire Agreement

          Except as provided in Section 5(e) hereof, this Agreement contains the entire agreement of the
parties and supersedes all other representations, warranties, agreements and understandings, oral
or otherwise, among the parties with respect to the matters contained herein, including any prior
employment agreements between Executive and Employer or any affiliate of Employer.

          Section 21. Arbitration

          (a) Executive agrees that any dispute or controversy arising out of, relating to, or in
connection with this Agreement or the termination thereof, or the interpretation, validity,
construction, performance, breach, or termination thereof, shall be settled by expedited, binding
arbitration to be held in New York, New York in accordance with the National Rules for the
Resolution of Employment Disputes then in effect of the American Arbitration Association (the
“Rules”). The arbitrator may grant injunctions or other relief in such dispute or
controversy. The decision of the arbitrator shall be final, conclusive and binding on the parties
to the arbitration. Judgment may be entered on the arbitrator’s decision in any court having
jurisdiction. The arbitrator may award the prevailing party its reasonable attorney’s fees.

13

 

          (b) The arbitrator shall apply New York law to the merits of any dispute or claim, without
reference to rules of conflicts of law. The arbitration proceedings shall be governed by federal
arbitration law and by the Rules, without reference to state arbitration law.

          (c) EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EXECUTIVE
UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE IS AGREEING TO SUBMIT ANY CLAIMS ARISING OUT
OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY,
CONSTRUCTION, PERFORMANCE, BREACH OF TERMINATION THEREOF, TO BINDING ARBITRATION, AND THAT THIS
ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE’S RIGHT TO A JURY TRIAL AND RELATES TO THE
RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EMPLOYEE RELATIONSHIP INCLUDING,
BUT NOT LIMITED TO, STATUTORY DISCRIMINATION CLAIMS.

          Section 22. Representations and Warranties of Executive

          In order to induce Employer to enter into this Agreement, Executive represents and warrants to
Employer, to the best of his knowledge after the review of his personnel files, that: (a) the
execution and delivery of this Agreement by Executive and the performance of his obligations
hereunder will not violate or be in conflict with any fiduciary or other duty, instrument,
agreement, document, arrangement or other understanding to which Executive is a party or by which
he is or may be bound or subject; and (b) Executive is not a party to any instrument, agreement,
document, arrangement or other understanding with any person (other than Employer) requiring or
restricting the use or disclosure of any confidential information or the provision of any
employment, consulting or other services.

          Section 23. Waiver of Breach

          Except as may specifically provided herein, the failure of a party to insist on strict
adherence to any term of this Agreement on any occasion shall not be considered a waiver or deprive
that party of the right thereafter to insist upon strict adherence to that term or any term of this
Agreement. Any waiver hereto must be in writing.

[signature page follows]

14

 

          IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the
date first written above.

	 	 	 	 	 
	 	EXECUTIVE:

 	 
	 	
 	 
	 	Mark F. O’Neil	 
	 	

EMPLOYER:

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Date:  	 	 
	 

15

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