Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with
the Securities and Exchange Commission pursuant to Rule 24b-2 of
the Securities Exchange Act of 1934, as amended.
Exhibit 10.66
SALES AND MARKETING AGREEMENT
This Sales And Marketing Services Agreement (the
"Agreement") is made effective as of the 5th day of May, 1999
(the "Effective Date") by and between CV Therapeutics, Inc., a
Delaware corporation having its principal place of business at
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("CVT") and
Innovex Inc., a Delaware corporation with its principal place of
business at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
("Innovex"), each on behalf of itself and its Affiliates. CVT
and Innovex are sometimes referred to herein individually as a
"Party" and collectively as the "Parties." Quintiles
Transnational Corp., a North Carolina corporation with its
principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Quintiles"),
the parent corporation of Innovex, is a party for purposes of
Article 8.
In consideration of the following covenants, promises and
obligations, CVT, Innovex and Quintiles agree as follows.
ARTICLE 1
SERVICES OVERVIEW; INNOVEX EXCLUSIVITY
1.1 Definitions. Capitalized terms used but not defined in the
text of this Agreement shall have the meanings ascribed to them
on Exhibit A hereto.
1.2 Overview; CVT Engagement of Innovex. Pursuant to this
Agreement, the Parties will collaborate to develop and sustain a
market for and promote the CVT pharmaceutical product known as
ranolazine (as defined in Exhibit A, the "Product") in the
Territory. Quintiles shall provide financial assistance to CVT
in connection with the Product Launch of the Product pursuant to
the Stock Purchase Agreement and Loan Agreement referred to and
defined in Article 8, and CVT shall engage Innovex to provide
marketing and sales services for the Product, including the
recruiting and deployment of a dedicated sales force, all as
provided herein. In recognition of the various undertakings
provided by Quintiles and Innovex herein, CVT shall pay Innovex
the Sales and Marketing Fee and other compensation set forth in
Sections 9.1, 9.3, 9.5, 9.7 and 10.3. While the Parties have
allocated their respective responsibilities under this Agreement,
the Parties intend this program to be broadly collaborative, and
seek to achieve consensus-based decision making to the extent
practical, with the common objective of maximizing the short-term
and long-term commercial success of the Product in the Territory,
subject to the terms and conditions of this Agreement.
1.3 Innovex Exclusive Rights. During the Term, except as
provided in Section 14.5, Innovex shall have the exclusive right
to provide Sales Force services for the Product in the
Territory. Other marketing, advertising and promotional activities
related to the Product in the Territory shall be conducted jointly by the
Parties in accordance with this Agreement. Innovex shall not
have any rights with respect to the Product outside of the
Territory.
1.4 Retained Rights by CVT. Except as otherwise expressly
provided in Section 1.3, CVT shall retain all right, title and
interest in and to the Product including, but not limited to,
owning all clinical trial data and designs, protocols, regulatory
filings for the Product and data in support thereof, the NDA for
the Product, the Drug Master File for the Product, and all
manufacturing, distribution, patent, copyright, trade secret and
trademark rights relating to the Product. No license is granted
to Innovex hereunder, either directly or by implication. Innovex
acknowledges that any study sponsored by or under the direction
of CVT is a proprietary program of CVT, containing trademarks,
trade secrets and other intellectual property of CVT, whether or
not such rights are utilized in the marketing, promotion or sale
of the Product.
1.5 Additional Indications. In the event CVT intends during the
Term of this Agreement to submit an NDA for ranolazine [ * ], CVT
shall provide Innovex with written notice at least [ * ] days
prior to the then current estimated filing date of the NDA
therefor, and the Parties shall negotiate in good faith the
minimum sales and marketing effort which will be required
therefor. If the Parties reach an agreement thereon within [ * ]
days after commencement of such [ * ] day period prior to the
then current estimated NDA filing date, ranolazine [ * ] shall be
added to the definition of Product under this Agreement, and the
corresponding provisions for minimum Innovex sales and marketing
efforts under this Agreement shall be revised. If the Parties do
not reach agreement within such time period, the definition of
Product shall not be expanded.
ARTICLE 2
COMMITTEES
2.1 Joint Steering Committee ("JSC").
2.1.1 Formation; Purposes and Principles. The JSC shall have
overall responsibility for the success of the matters related to
the Product in the Territory as established by this Agreement,
including without limitation: (i) to determine the overall
strategy for marketing, promotion and sales of the Product in the
Territory; (ii) to advise, provide input and determine strategy
for Phase IIIB/IV Studies; (iii) to plan and coordinate the
Parties' activities hereunder related to sales and marketing of
the Product in the Territory; (iv) to approve plans and budgets
for the services under this Agreement, including the Marketing
Plan, consistent with the maximization of long-term profits
derived from the sale of the Product in the Territory and any
other activities related to sales and marketing of the Product in
the Territory the JSC shall deem appropriate to achieve the
Parties' objectives under this Agreement; and (v) to resolve
disputes of the Parties arising under Section 2.1.1, except as
provided by Article 16. Notwithstanding the foregoing, the JSC
shall have no authority: (a) to determine the annual value of
marketing and promotional expenses to be incurred by Innovex; (b)
to determine the total size of the Sales Force to be placed in
the field by Innovex; or (c) to determine, interpret or alter the
terms and conditions or rights and obligations of the Parties
with respect to this Agreement, the Loan Agreement or the Stock
Purchase Agreement.
2.1.2 Membership. The JSC will be comprised of three (3)
representatives appointed by Innovex and three (3)
representatives appointed by CVT, with at least one (1)
representative from each Party being a corporate officer of such
Party. The JSC shall be chaired by a representative of CVT.
Either Party may appoint, substitute or replace members of the
JSC to serve as their representatives upon notice to the other
Party. The Parties shall appoint the initial members of the JSC
within thirty (30) days after the Effective Date.
2.1.3 Meetings. The JSC shall meet in person on a calendar
quarter basis or more frequently as may be agreed upon, to review
the progress of the Parties in performing the functions and
obligations under this Agreement. Each Party shall bear all
travel and related costs for its representatives, without
reimbursement under this Agreement. Location of meetings shall
alternate between CVT headquarters in Palo Alto and Innovex
headquarters in New Jersey. In order for a meeting of the JSC to
be convened, such meeting must include at least one (1) committee
member of each Party who is a corporate officer of such Party.
2.1.4 Decision Making in the JSC. The JSC shall seek to
operate by consensus. The representatives of CVT shall
collectively be entitled to one (1) vote and the representatives
of Innovex shall collectively be entitled to one (1) vote on any
matter before the JSC. Notwithstanding the foregoing, the two (2)
senior representatives on the JSC, one (1) from each Party, shall
have the authority to make decisions on behalf of the JSC. CVT
shall have the right to decide any matter properly before the JSC
that the JSC cannot decide by unanimous vote of the CVT and
Innovex representatives. With respect to the total annual value
of marketing and promotional expenses to be incurred by Innovex
or the total size of the Sales Force to be placed in the field by
Innovex, Innovex shall have the final responsibility for making
such decision, provided that the requirements of Section 4.5 must
be satisfied.
2.1.5 Disputes. Disagreements within the JSC shall be
resolved as set forth in Section 2.1.4. In the event of a
dispute regarding compliance with this Agreement, the JSC shall
not have authority to resolve such dispute, which shall be
handled in the manner set forth in Article 16. In the event the
JCC refers a dispute to the JSC for resolution, the JSC shall
convene a meeting either in person or by teleconference to
resolve such dispute within five (5) days from the date upon
which the JCC notifies the matter to the JSC.
2.2 Joint Commercialization Committee ("JCC").
2.2.1 Formation; Purposes and Principles. The JCC will be
responsible for development and implementation of the Marketing
Plan as well as any other matters required for the sales and
promotion of the Product in the Territory, except to the extent
that certain matters are solely the responsibility of a single
Party under this Agreement. The JCC will additionally oversee
any other activities the JCC shall deem appropriate to achieve
its objectives consistent with this Agreement. In overseeing the
operational aspects of commercialization, the JCC shall,
consistent with Section 2.1.1, without limitation: (i) oversee
Phase IIIB marketing trials which commence after the NDA Filing
for the Product, and Phase IV marketing trials for the Product,
(ii) plan the marketing and sales of the Product in the Territory
consistent with Marketing Plans; (iii) monitor, review and
comment on costs incurred by the Parties in connection with such
activities; (iv) review and comment on other commercialization
and Launch plans for the Product in the Territory; (v) receive
and supply the Parties' sales, pricing, and financial reports
pertaining to Pre- and Post-Approval Marketing Activities; (vi)
review the Marketing Plan; and (vii) facilitate the flow of
information among the Parties, including coordinating sales
activity with manufacturing schedules and distribution.
2.2.2 Membership. The size of the JCC may vary from time to
time in the reasonable discretion of the chair of the JCC,
provided that there are at least three (3) representatives
appointed by CVT and at least three (3) representatives appointed
by Innovex. The JCC shall be chaired by a representative of
Innovex. Either Party may appoint, substitute or replace members
of the JCC to serve as their representatives upon notice to the
other Party. The Parties shall appoint the initial members of
the JCC within thirty (30) days after the Effective Date.
2.2.3 Meetings. The JCC shall meet in person or by
teleconference on a monthly basis or more frequently as may be
agreed upon, to review the progress of the Parties in performing
the functions and obligations under this Agreement. Subject to
Section 2.4, each Party shall bear all travel and related costs
for its representatives. Location of meetings shall alternate
between CVT headquarters in Palo Alto and Innovex headquarters in
New Jersey.
2.2.4 Decision Making; Quorum. The JCC shall seek to operate
by consensus. The representatives of CVT shall collectively be
entitled to one vote and the representatives of Innovex shall
collectively be entitled to one vote on any matter before the
JCC. Disputes shall be referred to the JSC for resolution. In
order for a meeting of the JCC to be convened, such meeting must
include at least two (2) representatives of each Party.
2.3 Agendas and Minutes for the JSC and JCC. Unless otherwise
decided by the JSC, each Party will disclose to the other
proposed agenda items along with appropriate background or
supporting information at least ten (10) working days in advance
of a JSC meeting and five (5) working days in advance of a JCC
meeting. At each meeting of the JSC or JCC, as the case may be,
such committee shall select a secretary who will prepare, within
five (5) working days after each meeting (whether held in person
or by telecommunication), the minutes reporting in reasonable
detail the actions taken by such committee, the attendees, the
status of goals and achievements as well as issues requiring
resolution and resolutions of previously reported issues, which
minutes shall be signed by one of the members of the JSC or JCC,
as the case may be, from each of the Parties.
2.4 Innovex Attendance at JCC as a Billable Expense. Prior to
Product Launch, Innovex representatives on the JCC may invoice
for their time spent on JCC activities up to the limit approved
in the then current annual Marketing Plan budget to the extent
such activities are otherwise unrecoverable under this Agreement
as Pre-Approval Marketing Activities. Innovex representatives on
the JSC shall not invoice for their time spent on JSC matters.
2.5 No Authority to Modify Agreement. The JSC and JCC shall
have no authority to amend or waive compliance with the terms and
conditions of this Agreement, or to approve actions of the
Parties which are inconsistent with this Agreement. Any such
amendments and waivers or actions shall be implemented by means
of Section 17.6.
ARTICLE 3
MARKETING PLAN; DETERMINATION OF FULLY BURDENED COST
3.1 Marketing Plan. The principal mechanism by which the
Parties coordinate their sales and marketing activities will be a
Marketing Plan, to be prepared and periodically updated as set
forth below. Within six (6) months after the Effective Date,
Innovex shall submit a draft Marketing Plan to the JCC. The
initial Marketing Plan will cover the remainder of calendar year
1999 through the period of Product Launch, and after review by
the JCC will be submitted to the JSC for review and approval.
Periodically thereafter, but no less frequently than annually,
Innovex shall be responsible for preparing or updating drafts
annually for JCC and JSC approval. Each Marketing Plan shall
include a multi-year projection of Product plans and budgets.
Innovex shall assign responsibilities for updating the Marketing
Plan and preparing annual plans, budgets and revenue forecasts,
according to a schedule and using a process that will enable the
JSC and the JCC, as the case may be, to submit comments and
supplement such Marketing Plan and budgets in a timely fashion.
The draft Marketing Plan shall be ready for presentation to JCC
not later than each [ * ], and shall be approved by the JSC by
each [ * ], of the year preceding that year to which such
Marketing Plan applies.
3.2 Plan Contents. Each Marketing Plan shall include a review
of the marketplace, marketing objectives/strategies, clinical
support plans, marketing study plans for Phase IIIB/IV Studies,
Sales Force effort, pricing, inventory requirements and
distribution plans for the Product, together with a revenue and
expense forecast for Product sales in the Territory. Such
Marketing Plan shall be in a form generally consistent with the
outline attached hereto as Exhibit B, and shall include among
other items the overall level of anticipated resource commitments
on the part of each Party in the relevant time period. Each
Marketing Plan shall set forth the overall level of Territory
Representative efforts. Each Marketing Plan shall be in
accordance with this Agreement and all applicable laws, rules and
regulations, including but not limited to those promulgated by
the FDA, the Department of Health and Human Services Office of
Inspector General (OIG), and state agencies and/or departments.
3.3 Determination of Fully Burdened Cost. Certain Innovex Post-
Approval Marketing Activities under this Agreement shall be paid
for by CVT on the basis of Innovex's Fully Burdened Cost of such
activities. Fully Burdened Cost means Innovex's usual and
customary fee charged to Third Parties under a fee for service
arrangement for the type of services rendered by it pursuant to
this Agreement (such fee to be based on services of comparable
volume and comparable quality), inclusive of Innovex's customary
profit margin for such volume and quality of service. At least
twelve (12) months prior to the anticipated NDA Filing for the
Product, the Parties shall execute an agreement setting forth the
then current Fully Burdened Cost of the foreseeable Innovex
activities under this Agreement. The Parties shall update such
agreement as needed to reflect changes in the services being
provided by Innovex and/or changes in the usual and customary
fees charged by Innovex. The Parties shall agree in advance on
any new or revised type or volume of services, or changes to the
pricing of such services.
3.3.1 Baseline for Fully Burdened Cost of Sales Force.
Innovex has provided to CVT an estimate, prepared in March 1999,
that the Fully Burdened Cost of an Innovex Sales
Force consisting of [ * ] Territory Representatives, [ * ] Field Managers,
one (1) National Sales Manager and one (1) Project Administrator, would
be [ * ] for each Territory Representative day worked and [ * ]
for each Field Manager day worked. The Parties shall update such
daily rates as needed to reflect changes in the services being
provided by Innovex and/or changes in the customary Innovex
pricing schedule which provides the basis for the determination
of Fully Burdened Cost. The Parties shall agree in advance on
any new or revised type or level of services, or changes to the
pricing of such services.
ARTICLE 4
INNOVEX RESPONSIBILITIES
4.1 Covenant to Operate under the Agreement; General Diligence
Requirement. Innovex shall market and promote the Product in the
Territory only in accordance with the Marketing Plan, Promotional
Materials, this Agreement and all applicable laws, rules and
regulations, including but not limited to those promulgated by
the FDA, the Department of Health and Human Services Office of
Inspector General (OIG), and state agencies and/or departments.
Except as expressly set forth in this Agreement, the criteria for
Innovex performance shall be consistent with the Innovex
standards for sales and marketing projects of similar size and
scope.
4.2 Pre-Approval Responsibilities.
4.2.1 Hiring Sales Force. Innovex shall hire, train and
maintain a Sales Force for promotion of the Product in the
Territory on the terms and conditions of this Agreement, which
shall be completed at least [ * ] in advance of the date of the
expected Launch (as communicated by CVT to Innovex in writing at
least [ * ] in advance of the expected Launch). The costs of
establishing such Sales Force shall be borne by Innovex, in
consideration of the Sales and Marketing Fee, except as provided
in Section 9.3. The hiring standards for the members of the
Sales Force shall be established by the JCC.
4.2.2 Pre-Approval Marketing Activities. In addition,
Innovex shall also provide the Pre-Approval Marketing Activities
CVT may request pursuant to Section 5.2.2 which Innovex is
reasonably able to provide. To the extent that CVT engages
Innovex services as part of Pre-Approval Marketing Activities,
CVT shall engage such services under customary terms and
conditions applicable to agreements between Innovex and its Third
Party customers for such services. The prices paid by CVT for
such services shall be agreed from time to time by the Parties,
in writing in advance, and shall equal, as nearly as practical,
the prices charged by Innovex to Third Party customers buying
comparable services in comparable quantity, provided that the
Innovex services to CVT are of the same quality or better quality
and equivalent turnaround times as comparable Innovex services to
Third Party customers. Pre-Approval Marketing Activities shall
be conducted in accordance with all applicable laws, rules and
regulations, including but not limited to those promulgated by
the FDA, the Department of Health and Human Services Office of
Inspector General (OIG), and state agencies and/or departments.
4.3 Post-Approval Responsibilities. Following Product Launch,
Innovex shall provide the Post-Approval Marketing Activities with
the minimum requirements of Section 4.5.1, with a minimum
expenditure as provided in Section 4.5.2, and shall comply with
the other terms and conditions provided in this Agreement, all in
consideration of the Sales and Marketing Fee and other
compensation provided for in Article 9.
4.4 Fully Dedicated Sales Force. During the Term, the only
activity of the Sales Force shall be the marketing and promotion
of the Product in the Territory. The Sales Force shall be
composed of full-time employees of Innovex and shall not be used
for any other purpose, product or service. The Sales Force shall
carry business cards in a form specified by CVT to identify them
as CVT territory representatives.
4.5 Minimum Requirements.
4.5.1 Innovex Sales Force Commitment. The Innovex Sales
Force shall be of at least the following size during each of the
following periods of time:
(a) The Sales Force at Launch and until the commencement of
Sales Year 2 shall be comprised of at least the following Innovex
Personnel: (i) [ * ] Territory Representatives; (ii) [ * ] Field
Managers; (iii) [ * ] National Sales Manager; and (iv) [ * ]
Project Administrator.
(b) At the commencement of Sales Year 2, and for the remainder
of such Sales Year, the Sales Force shall be comprised of at
least the following Innovex Personnel: (i) [ * ] Territory
Representatives; (ii) [ * ] Field Managers; (iii) [ * ] National
Sales Manager; and (iv) [ * ] Project Administrator.
(c) In each of Sales Years 3 through 5, the Sales Force shall be
comprised of at least the lesser of (i) the size specified in
paragraph (b) above or (ii) a sales force the Fully Burdened Cost
of which Sales Force, plus the expenditures for Post-Approval
Marketing Activities (as set forth in Section 4.5.2) incurred by
Innovex in such Sales Year is equal to at least [ * ] of the Net
Sales of the previous Sales Year. By way of example, if Net
Sales in Sales Year 2 are equal to [ * ], then the combination of
the Fully Burdened Cost of the Sales Force in Sales Year 3 plus
Innovex's expenses incurred for Post-Approval Marketing
Activities in Sales Year 3 must equal at least [ * ].
4.5.2 Innovex Post-Approval Marketing Expenditure Commitment.
Innovex shall bear all expenses of Post-Approval Marketing
Activities, except for the cost of Samples provided by CVT under
Section 5.3 and supplemental activities, if any, as otherwise
provided in the final sentence of this Section 4.5.2. The amount
of such Post-Approval Marketing Activities expenditures by
Innovex shall be at least [ * ] in each Sales Quarter and at
least [ * ] in each Sales Year. Such expenditures shall not be
reimbursed by CVT, but are included within the Post-Approval
Marketing Activities. The categories of expenditures included
within Post-Approval Marketing Activities, include without
limitation, those set forth and identified on Exhibit C. If CVT
desires to provide supplemental Post-Approval Marketing
Activities not contained in the Marketing Plan, then CVT shall
have the right, but not the
obligation, to fund such supplemental activities at its own cost and
expense, provided that such supplemental activities are carried out in
consultation with the JCC.
4.6 Training Requirements. Innovex shall train all Innovex
Personnel in accordance with Article 6 hereof.
4.7 Innovex Responsibilities. Without limitation a partial list
of responsibilities of Innovex are set forth on Schedule I to
this Agreement.
4.8 Records and Reports Regarding Promotional Activities.
Innovex shall promptly provide to CVT such information regarding
ongoing sales forecasts and marketing activities as relate to the
plans and budgets hereunder as CVT may reasonably request.
Additionally, Innovex will keep reasonably complete and accurate
records of all presentations made by the Sales Force in
accordance with Innovex's customary call reporting procedures
(including names of physicians, dates of presentation and general
response to such presentations) as well as other activities
carried out pursuant to the Marketing Plan. Innovex will make
all such records available to CVT during regular business hours
and upon reasonable notice, and will, within fifteen (15) days of
the end of each month, provide CVT a monthly report on sales
activity and forecasts and a monthly report regarding all other
marketing activities undertaken by Innovex hereunder. Innovex
will maintain such records for three (3) years following the
period to which they relate. The record-keeping and access
requirements of this Section 4.8 shall survive the termination of
this Agreement for a two (2) year period.
4.9 Performance Audits. CVT shall have the right to audit
Innovex's performance of obligations as set forth in this Article
4, including other provisions regarding Pre-Approval Marketing
Activities and Post-Approval Marketing Activities and as
described in the Schedules attached hereto (generally describing
the activities of the Parties) for the purpose of evaluating and
monitoring conformance to the terms and conditions of this
Agreement. Such audits shall occur during regular business hours
and upon reasonable notice, shall not interfere with Innovex
activities, and shall be conducted at CVT's expense. In the
event an outside auditor is hired to conduct an audit pursuant to
this Section 4.9, such auditor shall be one reasonably acceptable
to Innovex and expressly subject to the same confidentiality
provisions as apply to the Parties hereunder.
4.10 Other Responsibilities. Innovex shall assist CVT in
performing CVT's obligations as set forth in Section 5.4.3.
ARTICLE 5
CVT'S RESPONSIBILITIES AND OBLIGATIONS
5.1 Regulatory Affairs. CVT shall have the responsibilities for
regulatory affairs set forth in Article 7, and shall keep the JSC
informed generally on the status and conduct of all clinical
development activities related to the Product in the Territory.
CVT shall inform Innovex of its estimated date of Product Launch,
and in particular shall provide such date for purposes of
Innovex's establishment of the Sales Force under Section 4.2.1.
5.2 Pre-Approval Marketing Activities. Although the Parties
will jointly develop and implement Pre-Approval Marketing
Activities, CVT shall be responsible for funding such activities.
CVT's funding obligation for Pre-Approval Marketing Activities
shall be as follows:
5.2.1 Aggregate Expenditure. CVT's aggregate expenditure on
Pre-Approval Marketing Activities shall be at least [ * ] between
the Effective Date and the Launch. This requirement shall not
apply if Quintiles for any reason does not provide the Pre-
Approval Advances in accordance with the Loan Agreement at such
time (or times) that CVT requests such Advances. In the event of
termination of this Agreement prior to the Launch, the failure of
CVT to spend such amount shall not be considered a breach of this
Agreement.
5.2.2 Purchase of Innovex Services. CVT shall purchase, and
Innovex shall supply to CVT, between the Effective Date and the
Launch, Pre-Approval Marketing Activities (Section 4.2.2) having
an invoice value of at least [ * ] provided, however, that: (a)
such requirement shall not apply if Quintiles for any reason does
not provide the Pre-Approval Advances in accordance with the Loan
Agreement at such time (or times) that CVT requests such
Advances; (b) Innovex supplies such Pre-Approval Marketing
Activities in a timely manner, in accordance with standards in
the industry and at competitive prices; and (c) such services
shall be provided by and/or through Innovex, including Third
Party services managed by Innovex. The remainder of CVT's
aggregate expenditure pursuant to Section 5.2.1 shall be spent by
CVT on services provided by vendors mutually acceptable to CVT
and Innovex. In the event of termination of this Agreement prior
to the Launch, the failure of CVT to spend such amount shall not
be considered a breach of this Agreement.
5.3 Obligation to Provide Samples. In the first Sales Year, CVT
will provide to Innovex for distribution Samples with a cost of
goods, calculated in accordance with generally accepted
accounting principles ("GAAP"), of at least [ * ]. In each of
the subsequent Sales Years, CVT will provide a quantity of
Samples to Innovex such that the cost of goods of such Samples,
divided by the aggregate Fully Burdened Cost to be incurred by
Innovex in such Sales Year under the Marketing Plan then in
effect, is at least equal to [ * ] divided by the sum of the
Fully Burdened Cost of the Sales Force provided in Section
4.5.1(a) plus [ * ]. Such quantity of Samples shall be provided
by CVT at its own expense, without reimbursement by Innovex. CVT
estimates that the cost of each tablet manufactured at production
quantity levels, without packaging, will be [ * ] per tablet.
Actual costs may differ from the aforestated estimate; and the
actual costs shall apply to CVT's fulfillment of its commitment
under this Section 5.3. Distribution of such Samples shall be
carried out by Innovex and shall be included within Innovex Post-
Approval Marketing Activity expenditures. In the event that the
JCC determines a need for additional Samples over and above that
which CVT is obligated to provide at its own expense under this
Section 5.3, CVT will produce a commercially reasonable quantity
of additional Samples. Innovex shall reimburse CVT for its cost
of goods for producing any such additional Samples, which cost
shall be treated as a Post-Approval Marketing Expense. The JCC
may agree to reduce CVT's commitment under this Section 5.3 and
replace it with a commitment of equal dollar value for CVT to
provide other marketing activities. Innovex must account for
Samples as required by the Prescription Drug Marketing Act and
regulations.
5.4 Sales and Distribution.
5.4.1 Pricing. CVT, in consultation with Innovex, shall set
all prices and commercial terms for the sale of the Product in
the Territory.
5.4.2 Booking Sales; Distribution. CVT shall be responsible
for booking sales, fulfilling orders, and shall warehouse and
distribute the Product and perform all related services.
5.4.3 Product Returns. CVT shall be responsible for handling
Product returns. The Innovex Sales Force shall provide
assistance as reasonably requested by CVT, to the extent
consistent with the normal activities of pharmaceutical sales
personnel. Product returns shall promptly be shipped to the
facility responsible for shipment of such Product lot or such
other location as may be designated by CVT in writing.
5.5 CVT Responsibilities. Without limitation, a partial list of
CVT responsibilities are set forth on Schedule II attached to
this Agreement.
ARTICLE 6
TRAINING; ADVERTISING AND PROMOTIONAL MATERIALS
6.1 Training Programs.
6.1.1 Content. The JCC will develop initial and all ongoing
training programs for the Sales Force during the Term. Each
member of the Sales Force shall be required to successfully
complete such training program before providing services under
this Agreement. The Parties shall mutually agree to a minimum
training standard and pass rate. Innovex shall maintain records
of such training for each individual. Innovex agrees to utilize
such training programs on an ongoing basis. Initial training
shall be carried out at a time which is set by the JSC and which
is prior to but reasonably near the date on which Product Launch
is expected. As additional Territory Representatives are added
under this Agreement, training will be given to groups of the
newly selected Territory Representatives. Training programs
shall include training regarding requirements of the Food, Drug
and Cosmetic Act, Medicare/Medicaid Anti-Fraud and Abuse Act, and
other applicable laws, rules, regulations and policies.
6.1.2 Cost. The cost of developing and delivering the
training to the Sales Force shall be borne by Innovex. Each
Party shall absorb the costs of transporting, housing and
maintaining their respective personnel who participate in such
training. The cost of training materials prepared and supplied
by Innovex will be borne by Innovex. CVT shall own all rights
and title in any training material developed under this Agreement
which relates to the Product or CVT. Innovex shall own all right
and title in any other training material.
6.2 Advertising and Promotional Materials.
6.2.1 Creation and Use. Innovex, with assistance and advice
from CVT, shall develop all Promotional Materials. Such
materials shall be consistent with the relevant Marketing Plan
and budgets approved by the JSC. CVT shall have the final sign-
off on all Promotional Materials and Product-related training
materials. Innovex shall disseminate only
Promotional Materials having obtained prior written approval by CVT.
Innovex shall reasonably assist CVT in revising such Promotional Material in
a timely manner.
6.2.2 Ownership; FDA Approval. CVT shall own all rights and
title in the Promotional Material. Notwithstanding the
foregoing, and in accordance with the applicable laws, rules and
regulations, CVT and Innovex will not review continuing medical
education materials relating to the Product. Neither continuing
medical education materials nor other medical education materials
will be used by Innovex for purposes of marketing and selling the
Product unless Innovex obtains CVT's prior written consent. CVT
shall review all medical education materials for scientific and
clinical accuracy. The final content of all Promotional
Materials and Product-related training materials shall be the
legal responsibility of CVT, including but not limited to FDA
approval thereof.
6.2.3 CVT Logos. All written or visual materials related to
the Product shall display the CVT logos and CVT shall be
presented as the sole owner of the Product, except as required by
law.
ARTICLE 7
REGULATORY ISSUES AND COMPLAINTS
7.1 Ownership of Regulatory Filings and Compliance. CVT will
retain exclusive right, ownership, authority and responsibility
for regulatory filings, compliance with all regulatory
requirements and maintenance of all government agency contacts
relating to the Product, including, but not limited to,
maintaining and updating the NDA for ranolazine; the development
and submission of regulatory filings regarding new indications
(if any, and at its sole discretion); the reporting of any
adverse drug reactions to the FDA; the filing of Promotional
Materials with the FDA; the payment of Medicaid and other
governmental rebates which in CVT's sole judgment are due and
owing; the pricing of the Product for each customer; and
compliance with Medicaid best price law and the Department of
Veterans Affairs Act. The development of each indication and
formulation of the Product shall be determined solely by CVT. CVT
shall not be responsible for actions by Innovex that are outside
the scope of this Agreement or not in accordance with applicable
law.
7.2 Communication with the FDA and Other Regulatory Agencies.
Except as required by law, Innovex shall not communicate with the
FDA, OIG, HCFA or any state agencies ("Regulatory Agencies")
about anything relating to the Product, except through CVT.
Innovex is required by law to communicate directly with any
Regulatory Agency or if Innovex receives any communication from a
Regulatory Agency with respect to the Product, promotion of the
same, or Innovex's performance under this Agreement or that could
effect Innovex's performance under this Agreement, Innovex shall
promptly notify CVT. Innovex shall reasonably cooperate at CVT's
expense with CVT in all proper respects in all regulatory matters
relating to the Product, including but not limited to preparation
for inspections of CVT facilities and/or Innovex facilities.
Innovex will provide CVT with pertinent records in Innovex's
possession which may be necessary to implement any recall or any
other corrective action mandated by a Regulatory Agency or
implemented by CVT, including but not limited to names and
addresses for "Dear Doctor" letters.
7.3 New Developments Relating to the Product. CVT will promptly
inform Innovex of the following information relating to the
Product in the Territory: (i) new approved indications; (ii) new
approved dosages or administration regimens; (iii) material new
studies by the scientific community that CVT becomes aware of
which relate to the Product or a competitive product in its
therapeutic class; and (iv) any changes in regulations affecting
the Product or CVT's obligations with respect to this Agreement.
Innovex will promptly inform CVT of information relating to
changes in regulations affecting Innovex's obligations with
respect to this Agreement. Based on such information, and
subject to any federal, state or local laws and/or regulations,
the Parties shall use commercially diligent efforts to maintain
the training materials and Promotional Materials supplied to the
Sales Force pursuant to this Agreement current with such new
developments or information.
7.4 Product Recalls. If either Party believes that a recall of
any Product in the Territory is necessary, such Party shall
notify the other Party immediately thereafter. CVT shall retain
sole authority and responsibility for determining whether a
Product recall shall occur. Any Product recall shall occur under
the direction and control of CVT, and Innovex shall reasonably
cooperate in carrying out any such recall or any regulatory
matter, at CVT's expense. CVT shall make available, at Innovex's
request, any records that Innovex might require while assisting
CVT in effecting any recall of the Product.
7.5 Adverse Event Reporting Procedures. CVT shall be
responsible for the reporting of adverse events and drug safety
issues related to the use of the Product. CVT shall advise
Innovex of its standard procedures for the reporting of adverse
events, and the Innovex Sales Force shall comply with such
procedures. The CVT procedures for the reporting of adverse
events shall be included in the training program for the Innovex
Sales Force. Innovex shall report to CVT within twenty-four (24)
hours any adverse events reported to it.
7.6 Product Inquiries; Complaints. Innovex shall promptly
notify CVT of any complaint, inquiry or (in compliance with
Section 7.5) adverse event relating to the Product in report form
providing reasonable detail of such complaint, event or inquiry.
CVT shall maintain a unified record of all complaints it
receives. CVT shall be responsible for medical affairs services
and shall respond to inquiries from physicians and health care
providers. CVT shall advise Innovex of its procedures for
handling such inquiries and the Innovex Sales Force shall be
trained by Innovex on such procedures.
7.7 Database of Clinical Trial Data. CVT shall own and maintain
its own database of clinical trial data accumulated from all
clinical trials of the Product and CVT shall own and maintain a
unified database of complaints and adverse drug event information
for the Product and shall develop and utilize uniform report
forms.
ARTICLE 8
EQUITY & LOAN ARRANGEMENTS; MILESTONE PAYMENT
8.1 Equity Stake. Concurrent with execution of this Agreement,
Quintiles shall execute a Stock Purchase Agreement to purchase
five million dollars ($5,000,000) of CVT common stock on the
terms and conditions as set forth therein ("Stock Purchase
Agreement"). The terms and conditions of such equity purchase,
and the covenants of each Party related thereto, shall be
governed solely by the Stock Purchase Agreement and the related
documents executed pursuant thereto.
8.2 Pre-Approval Line of Credit. Quintiles shall extend to CVT
a ten-million dollar ($10,000,000) line of credit, according to
terms and conditions of the Pre-Approval Commitment of the Loan
Agreement between the Parties dated the date hereof (the "Loan
Agreement").
8.3 First Year Sales Loan. Upon Product Launch, Quintiles shall
extend to CVT an additional line of credit to fund the first year
of sales and marketing expenses to the extent such expenses
exceed thirty three percent (33%) of actual sales, according to
the terms and conditions of the First Year Sales Commitment of
the Loan Agreement.
8.4 Milestone Payment. Quintiles shall make a milestone payment
of ten million dollars ($10,000,000) to CVT upon Product Launch.
Such milestone shall be payable within ten (10) days following
Product Launch, provided that Quintiles shall have the right to
apply such ten million dollar ($10,000,000) payment first against
any amounts then outstanding under the Pre-Approval Loan, then to
any Innovex Pre-Approval Marketing Activity unpaid invoices, with
the balance (if any) to be paid to CVT in cash.
ARTICLE 9
COMPENSATION
9.1 Sales and Marketing Fee. As consideration for the milestone
payment provided by Quintiles and the sales and marketing
services provided by Innovex under this Agreement, CVT shall pay
Innovex a Sales and Marketing Fee for each Sales Year as follows.
The Sales and Marketing Fee for each Sales Year shall be equal to
the lesser of the amounts set forth in column A or B below for
that year (the "Sales and Marketing Fee").
Year of Commercial Column A Column B
Sale
Sales Year 1 Fully Burdened Costs N/A
in Sales Year 1.
Sales Year 2 33% of cumulative 300% of cumulative
Net Sales in Sales Fully Burdened Costs
Year 1 and Sales in Sales Year 1 and
Year 2, less Sales Sales Year 2, less
and Marketing Fee Sales and Marketing
for Sales Year 1 Fee for Sales Year 1
Sales Year 3 30% of Net Sales in 300% of cumulative
Sales Year 3 Fully Burdened Costs
in Sales Year 1
through Sales Year
3, less cumulative
Sales and Marketing
Fees for Sales Year
1 and Sales Year 2
Sales Year 4 25% of Net Sales in 300% of cumulative
Sales Year 4 Fully Burdened Costs
in Sales Year 1
through Sales Year
4, less cumulative
Sales and Marketing
Fees for Sales Year
1 through Sales Year
3
Sales Year 5 25% of Net Sales in 300% of cumulative
Sales Year 5 Fully Burdened Costs
in Sales Year 1
through Sales Year
5, less cumulative
Sales and Marketing
Fees for Sales Year
1 through Sales Year
4
The Sales and Marketing Fee for each quarter shall be
calculated and reported in the manner set forth in Section 9.4
and paid on the schedule set forth in Section 9.6. In
consideration of the Sales and Marketing Fee, Innovex shall bear,
without limitation, all of the Post-Approval Marketing expenses
identified on Exhibit C as being included in Innovex Sales Force
Expenses and Innovex Marketing Expenditures.
9.2 Penalty for Shortfall of Innovex Effort. In the event
Innovex fails to provide at least [ * ] of the Minimum Sales
Force Commitment for any Sales Quarter (Section 4.5.1), or [* ]
of the Minimum Post-Approval Marketing Expenditure Commitment for
any full Sales Year or any two (2) consecutive Sales Quarters
(Section 4.5.2), then Innovex shall pay CVT a penalty equal to [
* ] times the Fully Burdened Cost of the shortfall in Minimum
Sales Force Commitment or Minimum Post-Approval Marketing
Expenditure Commitment (which penalty shall be offset against any
Sales and Marketing Fee owed by CVT to Innovex, or if no such
Sales and Marketing Fee is owed by CVT or if the penalty is in
excess of the Sales and Marketing Fee owed by CVT, then Innovex
shall pay such shortfall to CVT within thirty (30) days from
receipt of invoice). If Innovex fails to provide the minimum
commitment required under either Section 4.5.1 or 4.5.2 but such
shortfall does not give rise to an express penalty under the
foregoing sentences of this Section 9.2, then the Parties shall
agree in good faith on other compensatory efforts or
contributions (such as special marketing expenditures or
promotional efforts) by
Innovex at its own expense as consideration for such shortfall. The failure
by Innovex to supply at least [ * ] of the Minimum Sales Force Commitment
in any Sales Quarter or at least [ * ] of such commitment in any [ *
] consecutive Sales Quarters shall be a material breach of this
Agreement.
9.3 Start-Up Sales Force Costs. Pursuant to Section 4.2.1,
Innovex shall bear the cost of recruiting, training, and
compensating the Sales Force prior to the Launch of the Product.
However, Innovex shall be entitled to ▇▇▇▇ CVT for [ * ] worth of
the Fully Burdened Cost of such Sales Force (as if it were
engaged in customary promotional activities) in consideration of
the expense of such Sales Force start-up. Such [ * ] billing
shall be included in the invoice to CVT for the first Sales
Quarter and shall be included in the Fully Burdened Cost in Sales
Year 1 (and therefore shall be excluded from the expenses of Pre-
Approval Marketing Activities).
9.4 Reports of Sales, Fully Burdened Cost, Sales and Marketing
Fee.
9.4.1 Monthly Reports. On a monthly basis, within fifteen
(15) days after the end of each calendar month Innovex shall
report to CVT the Sales Force activities for the previous
calendar month and the Fully Burdened Cost of such activities, as
well as marketing expenditures by Innovex, and following Product
Launch, CVT shall report to Innovex the Net Sales during such
month. Reports by Innovex shall include the names of the Innovex
personnel who provide Sales Force services and the number of days
worked by them. Such monthly reports shall be for information
purposes only, and shall remain subject to correction and
reconciliation in future quarterly reports. Such monthly
reporting by Innovex shall terminate at the end of the Term and
such monthly reporting by CVT shall terminate at the end of the
Term if the Term ends prior to Product Launch and the Agreement
was not terminated by Innovex pursuant to Section 14.2 or 14.7,
or the Agreement was not terminated by CVT pursuant to Section
14.4, or two (2) years after the end of the Term, in all other
events.
9.4.2 Quarterly Reports. On a quarterly basis, within thirty
(30) days after the end of each calendar quarter, Innovex shall
report to CVT its Sales Force and marketing activities for such
quarter and the Fully Burdened Cost of all Post-Approval
Marketing Expenses and Sales Force activities, and following
Product Launch, CVT shall report to Innovex the Net Sales during
such quarter. On a quarterly basis, CVT shall also report to
Innovex on its delivery of Product Samples pursuant to Section
5.3. Within forty-five (45) days after the end of each calendar
quarter following Product Launch, CVT shall submit to Innovex a
determination of the Sales and Marketing Fee for such quarter.
Such determination of the Sales and Marketing Fee shall show the
calculation of the fee provided for under both Column A and
Column B for that quarter, as provided in Section 9.1, and then
the actual Sales and Marketing Fee earned (which shall be the
lesser of those two amounts). During each Sales Quarter the
Sales and Marketing Fee shall be calculated [ * ], and the Sales
and Marketing Fee for such quarter shall be equal to the [ * ],
provided, however, that in calculating the Sales and Marketing
Fee for [ * ], CVT shall only deduct [ * ]. The quarterly
reports of Sales Force activities shall terminate upon the
earlier of the end of Sales Year 5, or the end of the Term, and
the quarterly reports of Net Sales shall continue until the end
of the Term if the Term ends prior to Product Launch and the
Agreement was not terminated by Innovex pursuant to Section 14.2
or 14.7, or the Agreement was not terminated by CVT pursuant to
Section 14.4, or for the eight (8) calendar quarters following
such
Sales Year or the termination of this Agreement by Innovex
pursuant to Section 14.2 or 14.7, or by CVT pursuant to Section
14.4.
9.4.3 Reconciliation. In the event of any disagreement or
uncertainty about amounts reported under Section 9.4, the Parties
shall seek to resolve their differences as promptly as possible.
If any corrections in previously reported Fully Burdened Cost or
Net Sales are determined by the Parties to be necessary, the
Sales and Marketing Fee for the affected time periods shall be
recalculated. If the Sales and Marketing Fee for the time period
in question has already been paid, then the Party which benefited
from the error in the previous report shall pay the other Party
the amount of the difference within ten (10) days following the
determination by the Parties of the revised Sales and Marketing
Fee.
9.5 Post-Term Royalty.
9.5.1 Royalty Obligation. Subject to Section 9.5.2, CVT
shall pay, as additional consideration for the sales and
marketing services provided by Innovex under this Agreement, a
royalty to Innovex on Net Sales of the Product in the Territory
in the two (2) calendar years following the end of the Term.
Such royalty shall be equal to the following specified percentage
of Net Sales of the Product in the Territory during each of such
years:
Calendar Year Royalty Rate
FIRST year following the end of the 7%
Term
SECOND year following the end of the 4%
Term
No fee shall be paid in respect of Product sales occurring more
than twenty-four (24) months after the end of the Term.
9.5.2 Conditions. No royalty shall be paid under Section
9.5.1 unless Net Sales of Product in the Territory in the last
twelve (12) months of the Term exceeded Net Sales of Product in
the Territory in the immediately preceding twelve (12) months.
In addition, no royalty shall be paid under Section 9.5.1 in the
event this Agreement terminates for any reason prior to its full
scheduled Term (i.e., the end of the calendar year containing the
fifth anniversary of Launch), unless Innovex terminates under
Section 14.2 or 14.7 or CVT terminates under Section 14.4, in
which cases, the royalty shall be paid for the two (2) years
following the end of the Term.
9.6 Payments.
9.6.1 Sales and Marketing Fee. The Sales and Marketing Fee
for each calendar quarter shall be paid within six (6) months
following the end of such calendar quarter by check or wire
transfer to an account designated by Innovex. By way of example,
the Sales and Marketing Fee for the calendar quarter ending March
31, 2001 shall be payable on September 30, 2001.
9.6.2 Royalty. The royalty under Section 9.5 for the first
year following the end of the Term shall be paid within three (3)
months following the end of such calendar year.
The royalty for the second year following the end of the Term shall be
paid on a quarterly basis, ninety (90) days after the end of each calendar
quarter during such year. Each such payment shall be made by
check or wire transfer to an account designated by Innovex.
9.7 Non-Monetary Consideration. If CVT sells the Product in the
Territory for any consideration other than cash, it shall report
such transaction to Innovex and the reasonable monetary value of
such other consideration shall be included within Net Sales
(reduced by any applicable deductions contained in the definition
of Net Sales).
ARTICLE 10
ACCOUNTING; INVOICING AND PAYMENT
10.1 Accounting. Each Party agrees to calculate all costs and
expenses hereunder using its standard accounting procedures, in
accordance with GAAP, consistently applied, to the maximum extent
practical.
10.2 Invoicing Procedure; Additional Services; Standard Terms Not
Part of this Agreement. Innovex will invoice CVT at the end of
each month in arrears for Pre-Approval Marketing Activities
provided in accordance with this Agreement. Invoices will
include the names of the Innovex Personnel for which CVT is being
billed, the number of days worked during the invoice period, the
total due for each individual for the invoice period, and a grand
total of all fees for the invoice period. Supporting
documentation will be made available within seven (7) days of
CVT's requesting the same. To the extent that CVT purchases
additional services from Innovex pursuant to Section 4.2.2, which
services are not included within services provided as part of the
Sales and Marketing Fee, and another billing procedure or
purchase order is used to book such additional services, any
conflicting standard terms and conditions contained on any such
other documentation shall have no force and effect for this
collaboration; the terms and conditions of this Agreement shall
prevail in terms and meaning.
10.3 Obligation to Pay for Innovex Pre-Approval Marketing
Activities. With regard to the Pre-Approval Marketing Activities
provided by or through Innovex, CVT shall pay invoices therefor
in accordance with Section 10.4. In the event of termination of
this Agreement at any time and for any reason, payment for all
Pre-Approval Marketing Activities shall be due within thirty (30)
days of the termination date. Notwithstanding the foregoing,
payment for Pre-Approval Marketing Activities shall be subject to
Section 8.4 of this Agreement and the terms of the Loan
Agreement.
10.4 Payment of Invoices. All invoices are strictly net of any
taxes imposed on services, and except as otherwise set forth in
this Agreement, payment in full is due within thirty (30) days of
the date of receipt of the invoice.
10.4.1 If the method of payment is by direct transfer to the
Innovex bank account, the wire transfer instructions are as
follows:
Innovex Inc.
Accounting Number: 511-▇▇▇▇▇▇▇
ABA Number: 053 101 121
Branch Banking & Trust Co., Raleigh, NC
Innovex Federal Employment ED Number is ▇▇-▇▇▇▇▇▇▇.
10.4.2 Payments by check may be mailed to the Innovex Lockbox:
Innovex Inc.
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
10.4.3 Payments by check may be remitted via Federal Express
to Innovex's Lockbox as follows:
Innovex Inc.
Branch Banking & Trust Co.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN.: Wholesale Lockbox Dept. (Box 890062)
10.5 Penalty for Late Payment. CVT and Innovex agree that unless
there is a bona fide dispute as to amounts payable hereunder, if
payment is not made within three (3) days of the due date of the
invoice, interest shall accrue on a daily basis at the lesser of
two percent (2%) above the Prime Rate as announced periodically
by Bank of America at either Charlotte, North Carolina or San
Francisco, California or the maximum rate permitted by law on any
amount overdue from the date payment became due until payment is
made in full. In any event, such interest penalty shall only be
assessed for undisputed and unpaid amounts.
10.6 Record-Keeping and Financial Audits. Each Party shall keep
or cause to be kept such records as are required to determine, in
a manner consistent with GAAP in the United States, the sums or
credits due under this Agreement. Upon the written request (and
expense) of either Party, the other Party, but not more than once
in each calendar year, shall permit an independent certified
public accountant appointed by such Party and reasonably
acceptable to the other Party, accompanied by representatives of
the financial department of such Party at reasonable times and
upon reasonable notice, to examine only those records as may be
necessary to determine, with respect to any Sales Year or
calendar year, as applicable, ending not more than three (3)
years prior to such Party's request, the correctness or
completeness of any report or payment made under this Agreement.
Results of any such examination shall be: (i) limited to
information relating to the Product; (ii) made available to both
Parties; and (iii) subject to Article 12. The Party requesting
the audit shall bear the full cost of the performance of any such
audit, unless such audit discloses a variance of more than ten
percent (10%) from the amount of the original report, royalty or
payment calculation. In such case, the Party being audited shall
bear
the full cost of the performance of such audit. Auditors
shall be expressly subject to the same confidentiality
obligations as the Parties are to each other hereunder. This
Section 10.6 shall survive the termination of this Agreement by
five (5) years.
ARTICLE 11
REPRESENTATIONS AND COVENANTS
11.1 Mutual Authority. Each Party represents and warrants to the
other that:
11.1.1 Corporate Power. It is duly organized and validly
existing under the laws of its state or country of incorporation,
and has full corporate power and authority to enter into this
Agreement and to carry out the provisions hereof.
11.1.2 Due Authorization. It is duly authorized to execute
and deliver this Agreement and to perform its obligations
hereunder, and the person or persons executing this Agreement on
its behalf has been duly authorized to do so by all requisite
corporate action.
11.1.3 Binding Agreement. This Agreement is legally binding
upon it and enforceable in accordance with its terms. The
execution, delivery and performance of this Agreement by it does
not conflict with any agreement, instrument or understanding,
oral or written, to which it is a Party or by which it may be
bound, nor violate any material law or regulation of any court,
governmental body or administrative or other agency having
jurisdiction over it.
11.1.4 Grant of Rights; Maintenance of Agreements. It has
not, and will not during the term of this Agreement, grant any
right to any Third Party which would conflict with the rights
granted to the other Party hereunder or enter any agreement which
would impair its ability to perform its obligations under this
Agreement. It has (or will have at the time performance is due)
maintained and will maintain and keep in full force and effect
all agreements necessary to perform its obligations hereunder.
11.1.5 Validity. It is aware of no action, suit or inquiry or
investigation instituted by any governmental agency that
questions or threatens the validity of this Agreement.
11.2 Conformance with Laws. Innovex and CVT agree to undertake
all of their respective obligations under this Agreement in
material conformance with all applicable local, state and federal
laws and regulations, as amended, including the Federal Equal
Employment Opportunity Act, the Fair Labor Standards Act, the
Food Drug and Cosmetics Act, Section 1128B(b) of the Social
Security Act, the Prescription Drug Marketing Act, the Medicaid
Prescription Rebate Act, the Veterans Health Care Act of 1992,
and similar state laws. By entering into this Agreement, it is
not the intent of the Parties to enter into any financial
relationship or arrangement prohibited under state or federal
fraud or abuse regulations, including, but not limited to Sec.
1128B(b) of the Social Security Act, and any regulations
promulgated thereunder, nor do the Parties hereto have any belief
that the relationship and compensation arrangement provided in
this Agreement is prohibited. Neither Party shall assert against
the other that the compensation arrangement provided in this
Agreement is grounds for
voiding the Agreement or rendering the Agreement unenforceable. If either
Party is notified by a state or federal agency, or it is alleged in a qui tam
proceeding, that performance of this Agreement is illegal, neither Party shall
be obligated to continue such performance hereof to the extent such
performance is an alleged violation of law. In such event, the
Parties shall proceed as described in the final sentence of
Section 17.17.
11.3 Rights in Product. As of the Effective Date, CVT warrants
and represents that it has no knowledge of the existence of any
patent or trademark owned or controlled by anyone other than CVT
or an Affiliate which covers the Product and would prevent CVT
from making, using, or selling the Product or would prevent CVT
or Innovex from promoting or marketing the Product in the
Territory. CVT is not aware of any patents or trademarks owned
by Third Parties which would be infringed by the promotion or
sale of the Product in the Territory. CVT is not pursuing any
action against any Third Party which CVT believes infringes its
trademark, copyright or patent relating to the Product. There
are no actions, suits, claims or proceedings pending against CVT
or any of its Affiliates in any court or before any agency in the
Territory related to alleged patent, trademark, or copyright
infringement in connection with the Product, and to the best of
CVT's knowledge, no such actions, suits, claims or proceedings
have been threatened. During the term of this Agreement, CVT
will use diligent efforts not to diminish the rights granted to
Innovex herein, including without limitation by not committing or
permitting any acts or omissions which would cause the material
breach of any agreements between CVT and Third Parties which
provide for intellectual property rights applicable to the
development, manufacture, use or sale of the Product in the
Territory. As of the Effective Date, CVT is in compliance in all
material respects with any such agreements with Third Parties.
11.4 Record Maintenance. Innovex will (i) maintain all necessary
personnel and payroll records for Innovex Sales Force and other
relevant personnel; (ii) compute their wages and withhold
applicable Federal, State, and local taxes and Federal FICA
payments; (iii) remit employee withholdings to the proper
governmental authorities and make employer contributions for
Federal FICA and Federal and State unemployment insurance
payments; (iv) pay net wages and fringe benefits, if any,
directly to its employees; and (v) provide for liability and
Workers' Compensation insurance coverage.
11.5 Firewall. Innovex represents and warrants that it shall
maintain as confidential, shall keep separate and shall not share
with other parts of the Innovex organization that are or may be
engaged in the promotion and/or sales of a competing product, the
material and information supplied and/or generated hereunder for
use in accordance with this Agreement and the promotion and sale
of the Product.
11.6 No Use of Names or Trademarks. Neither Party will use the
other Party's name in connection with any publication or
promotion without the other Party's prior written consent. Nor
shall either Party use the other Party's corporate or product
logo or trademark in any manner without the other Party's prior
written consent.
11.7 Year 2000 Compliance. Each Party represents and warrants
that its computer systems used in the performance of work under
this Agreement shall operate and function without any Year 2000
Error. The term "Year 2000 Error" means (a) any failure of such
computer systems properly to record, store, process, calculate or
present calendar dates falling on
and after (and if applicable,spans of time including) January 1, 2000
as a result of the occurrence, or use of data consisting of, such dates;
(b) any failure of such computer systems to calculate any information
dependent on or relating to dates on or after January 1, 2000 in
the same manner, and with the same functionality, data integrity
and performance, as such computer system records, stores,
processes, calculates and presents calendar dates on or before
December 31, 1999, or information dependent on or relating to
such dates; or (c) any loss of functionality or performance with
respect to the introduction of records or processing of data
containing dates falling on or after January 1, 2000. In
addition, each Party represents and warrants that any failure of
its computer systems used in the performance of work under this
Agreement to operate and function without any Year 2000 Error
will not materially effect such Party's performance under this
Agreement. However, as either Party's sole and exclusive remedy
for any breach of the representations and warranties in this
Section 11.7, Innovex or CVT, as the case may be, will promptly
perform again any adversely impacted deliverable at no additional
cost to the recipient-Party.
11.8 NDA Filing. CVT agrees to exercise diligent efforts to
submit the NDA for the Product in a sustained release formulation
to the FDA and to diligently seek FDA approval.
ARTICLE 12
CONFIDENTIALITY
12.1 Confidential Information. Innovex and CVT agree that
information specifically relating to the marketing and sales of
the Product, or the business affairs or finances of the other or
Affiliates or of any suppliers, agents, distributors, licensees
or customers of the other which is disclosed in writing, and
marked "confidential" or disclosed orally, or in any other
tangible form and reduced to a written summary marked
"confidential" and which comes into possession of Innovex or CVT
under this Agreement shall be Confidential Information
("Confidential Information"). This Agreement, the Stock Purchase
Agreement, the Loan Agreement and related documentation shall be
treated as Confidential Information. Innovex and CVT agree to
hold Confidential Information in strict confidence and disclose
it only on a need-to-know basis to Affiliates, subcontractors and
employees who are under a written obligation to maintain the
confidentiality of the information, except for information:
12.1.1 which can be shown by written documentation to have
been known by the recipient prior to its receipt from the other;
12.1.2 which is public or lawfully becomes generally available
to the public through no fault of the recipient;
12.1.3 which is lawfully acquired from a Third Party without
being made subject to an obligation of confidence by the Third
Party;
12.1.4 which by mutual agreement is released from a
confidential status; or
12.1.5 which is required to be disclosed under any statutory,
regulatory or judicial requirement, including, but not limited
to, any filing with the Securities Exchange
Commission and in that event, confidentiality will be preserved and
protected to the extent possible; additionally, notice will be provided
to the other Party prior to any such disclosure.
12.2 Ownership of Data; No License. It is expressly agreed that
neither Party transfers to the other Party by operation of this
Agreement any patent right, copyright or other proprietary right.
All data and information generated or derived by Innovex as the
result of services performed by Innovex under this Agreement
shall be and remain the exclusive property of CVT. Any inventions
that may evolve from the data and information as the result of
services performed by Innovex under this Agreement shall belong
to CVT and Innovex agrees to assign its rights in all such
inventions and/or related patents to CVT. Notwithstanding the
foregoing, CVT acknowledges that Innovex possesses certain
inventions, processes, know-how, trade secrets, improvements,
other intellectual properties and other assets, including but not
limited to analytical methods, procedures and techniques,
procedure manuals, personnel data, financial information,
computer technical expertise and software, which have been
independently developed by Innovex and which relate to its
business or operations (collectively "Innovex Property"). CVT
and Innovex agree that any Innovex Property or improvement
thereto which are used, improved, modified or developed by
Innovex under or during the term of this Agreement are the sole
and exclusive property of Innovex.
12.3 Survival. The obligations of Innovex and CVT under this
Article 12 shall survive the termination or expiration of this
Agreement for a period of five (5) years.
ARTICLE 13
INDEMNIFICATION
13.1 Indemnification by CVT. CVT shall indemnify, defend, save,
protect, and hold harmless Innovex, its Affiliates, and its and
their respective directors, officers, employees, and agents
("Innovex Indemnitees") against any and all losses, claims,
damages, liabilities, costs and expenses (including reasonable
attorneys fees and expenses and court costs) (collectively,
"Losses") resulting or arising from any Third Party claims,
actions, proceedings, investigations or litigation relating to or
arising from or in connection with: (i) the design, development,
manufacture, sale, distribution or use of the Product; (ii) the
breach by CVT of any of its obligations under this Agreement;
(iii) the negligent or wrongful acts or omissions of CVT or any
of its directors, officers, employees or agents; (iv) a violation
of any law, rule or regulation by CVT relating to this Agreement;
(v) the Promotional Materials or any other materials referred to
in Section 6.2; or (vi) the infringement or violation, or alleged
infringement or violation by CVT or the Product of any patents or
any copyrights, trademark, trade secret or other intellectual
property rights. Notwithstanding the foregoing, CVT shall not be
required to indemnify Innovex for any Losses to the extent they
arise from the negligent or wrongful acts or omissions of Innovex
or any of the Innovex Indemnitees or Innovex's breach of its
obligations under this Agreement.
13.2 Indemnification by Innovex. Innovex shall indemnify,
defend, save, protect, and hold harmless CVT, its Affiliates, and
its and their respective directors, officers, employees, and
agents (the "CVT Indemnitees") against any and all Losses
resulting or arising from any Third Party claims, actions,
proceedings, investigations or litigation relating to or arising
from or
in connection with: (i) the marketing, promotion or sale
of the Product by Innovex in a manner which violates this
Agreement; (ii) the breach by Innovex of any of its obligations
under this Agreement; (iii) the negligent or wrongful acts or
omissions of Innovex or any of its directors, officers, employees
or agents; (iv) a violation of any law, rule or regulation by
Innovex relating to this Agreement; or (v) the representations or
misrepresentations by Innovex relating to the Product which were
not consistent with the labeled claims or Promotional Material.
Notwithstanding the foregoing, Innovex shall not be required to
indemnify CVT for any Losses to the extent they arise from (i)
the negligent or wrongful acts or omissions of CVT or CVT
Indemnitees; (ii) the breach by CVT of its obligations under this
Agreement; (iii) a manufacturing or design defect of the Product;
or (iv) a strict liability claim arising out of CVT's failure to
warn.
13.3 Procedure. The Party seeking indemnification hereunder (the
"Indemnified Party") shall (a) promptly notify the Party
obligated to indemnify (the "Indemnifying Party") of any Losses
for which the Indemnified Party seeks indemnification; (b)
cooperate fully with Indemnifying Party and its legal
representatives in the investigation of any matter the subject of
indemnification; (c) permit the Indemnifying Party full control
over the defense and settlement of any matter the subject of
indemnification; and (d) not unreasonably withhold its approval
of the settlement of any claim, liability or action by
Indemnifying Party covered by this indemnification provision.
13.4 No Consequential Damages. Notwithstanding the Parties'
rights and remedies in equity and except with respect to
indemnification obligations under Sections 13.1 and 13.2, neither
Party, nor its Affiliates or their respective directors,
officers, employees or agents shall have any liability to the
other for any special, incidental, indirect or consequential
damages, including, but not limited to the loss of opportunity,
use, revenue or profit, in connection with or arising out of this
Agreement, or the Services performed by Innovex hereunder, even
if such damages were foreseeable.
13.5 CVT Responsibility for Product Description. Innovex shall
not be liable to CVT for claims or losses arising out of the
statements or representations of the Innovex Personnel with
respect to the Product to the extent the statements or
representations conform to the oral, written or printed
statements or representations made to the Innovex Personnel by
CVT with respect to the Product or contained in the Product
labeling, Promotional Materials or other material referred to in
Section 6.2, provided all such materials have been approved in
advance in writing by CVT.
13.6 Insurance. Innovex and CVT shall at their own expense
obtain and maintain insurance of a type and amount as may be
necessary to protect their interests and obligations connected
with performance under this Agreement. Neither Party shall do or
omit to do any act, matter or thing which could prejudice or
render voidable any such insurance. Innovex and CVT shall, upon
request by the other, provide a certification evidencing the
insurance or any renewal. Each Party shall notify the other
Party of any cancellation of or material change in any such
insurance arrangements, if possible, prior to cancellation or
material change, but in any event, as soon as possible. Innovex
shall carry workers' compensation and employer's insurance and
Innovex shall remain solely responsible for all employment-
related claims and injury claims of its employees devoted to
performing services hereunder, except those claims arising out of
CVT's negligence or intentional acts. CVT shall carry product
liability insurance covering the Product in the Territory, in a
minimum amount of [ * ] at all times following Launch.
ARTICLE 14
TERM AND TERMINATION
14.1 Term. The Term of this Agreement will begin on the
Effective Date and continue until the end of the calendar year
that includes the fifth (5th) anniversary of the Product Launch,
unless the Agreement is terminated earlier in accordance with
this Article 14.
14.2 Material Breach. Either Party may terminate this Agreement
by written notice at any time if the other Party defaults in the
performance of any material obligations under this Agreement. In
the event of such default, the Party declaring the default shall
provide the defaulting Party with written notice setting forth
the nature of the default, and the defaulting Party shall have
thirty (30) days to cure the default. If the defaulting Party
fails to cure the default within the foregoing time periods, and
provided the default is continuing, the other Party may terminate
this Agreement by written notice to the defaulting Party, which
notice shall be effective upon receipt.
14.3 NDA Filing; No Product Approval. Either Party may terminate
this Agreement if CVT provides written notice to Innovex that:
(i) it will not submit an NDA due to Product failure; (ii) that
CVT has terminated development of the Product; (iii) if the FDA
provides written notice that it will not approve the Product; or
(iv) if the Product Launch does not occur prior to [ * ]. If at
any time CVT reasonably concludes that Product Launch is not
likely to occur by [ * ], CVT shall notify Innovex of the change
in circumstances and its revised estimate of the scheduled Launch
(the "Revised Launch Date"). At the time of such notice, Innovex
must either and by written notice to CVT: (i) confirm its
intention to proceed under this Agreement, in which case the
first sentence of this Section 14.3 shall be automatically
amended to replace the date "[*]" with the date ninety (90) days
after the Revised Launch Date; or (ii) immediately exercise its
right of termination under this Section 14.3. If Innovex does
not exercise its right of termination within sixty (60) days
after receiving such CVT request, Innovex shall be deemed to have
confirmed its intention to proceed under this Agreement and the
first sentence of this Section 14.3 shall be so automatically
amended. In the event of additional delays in anticipated
Launch, CVT shall give a further notice under this Section 14.3,
and the same procedure for an Innovex election shall apply.
Innovex may terminate this Agreement by written notice to CVT if
the NDA Filing for the Product has not occurred by [ * ]. In the
case of a Revised Launch Date which does not lead Innovex to
terminate this Agreement, the date in the previous sentence shall
be extended to a new date which is six (6) months prior to the
new Revised Launch Date.
14.4 Failure to Achieve Certain Net Sales. Either Party may
terminate this Agreement by giving twelve (12) months prior
notice if Product sales in the Territory in the prior Sales Year
are below minimum levels specified by the Parties, provided that
such notice of termination may not be given by either Party until
the end of Sales Year 2. Attached as Exhibit D is a schedule of
the minimum levels of forecast sales, which may be amended and
revised by mutual and express agreement among the Parties.
Notwithstanding the foregoing, if Innovex provides notice of
termination under this Section 14.4, CVT shall have the option to
extend the
term of the Agreement for a period of one (1) year
from the end of such twelve (12) month period by providing notice
to Innovex, provided that in such case: (i) CVT shall become
solely responsible for the portion of the Post-Approval Marketing
Expenditures that are designated as Innovex Marketing
Expenditures on Exhibit C, to the extent such expenditures are
applicable to such final one-year term of the Agreement; (ii) the
Sales and Marketing Fee for such final one-year term of the
Agreement shall equal the Fully Burdened Cost of the Sales Force
provided by Innovex; and (iii) CVT shall chair the JCC and be
entitled to make any final decisions.
14.5 Permitted CVT Co-Promotion Agreement. As an exception to
the exclusivity provided for in Section 1.3, CVT shall be
entitled to grant co-promotion or license rights for the Product
in the Territory to a Third Party at any time prior to the first
Pre-Approval Advance under the Loan Agreement. If CVT enters
into such a co-promotion or license agreement with a Third Party,
it shall give written notice to Innovex within ten (10) days of
signing such agreement. Innovex shall, within sixty (60) days
after receipt of such notice, elect to either (a) terminate the
Agreement immediately, or (b) continue the Agreement subject to
adjustment of financial terms corresponding to CVT's retained
rights (e.g., in a 50/50 co-promotion with a Third Party in which
CVT retains a fifty percent (50%) promotion right, then
Quintiles' Pre-Approval Loan Commitment would be reduced by fifty
percent (50%) to five million dollars ($5,000,000), Innovex's
minimum sales and marketing commitments would be reduced by
one-half, the Sales and Marketing Fee would be reduced by one-
half, and the milestone payment under section 8.4 would be
reduced by fifty percent (50%)). If Innovex elects to continue
the Agreement in such case, the Parties shall execute an
amendment to this Agreement to set forth the revised terms and
conditions of the Agreement. If Innovex does not provide any
notice of election to CVT within such sixty (60)-day time period,
then it shall be deemed to have terminated this Agreement.
Subsequent to the first Pre-Approval Advance under the Loan
Agreement, and provided CVT has not given notice to Innovex under
this Section 14.5 prior thereto, CVT shall not license to any
Third Party the rights to market or sell the Product in the
Territory, or grant co-promotion rights to market or sell the
Product in the Territory to any Third Party without Innovex's
prior written consent.
14.6 Loss of Product Rights by CVT. CVT holds the rights to the
Product under an exclusive license from a Third Party. This
Agreement shall terminate automatically if CVT's license rights
to the Product terminate in the Territory.
14.7 Bankruptcy. Either Party may terminate this Agreement by
written notice to the other Party, if the other Party files a
petition for bankruptcy, reorganization or arrangement under any
state statute, or makes an assignment for the benefit of
creditors or takes advantage of any insolvency statute or similar
statute, or such filing is made by a Third Party, and such filing
is not withdrawn within sixty (60) days of the filing date, or if
a receiver or trustee is appointed for the property and assets of
the Party and the receivership proceedings are not dismissed
within sixty (60) days of such appointment.
14.8 Accrued Rights. Termination of the Agreement for whatever
reason shall not affect the accrued rights of either Innovex or
CVT arising under or out of this Agreement and all provisions
which expressly or by implication survive this Agreement shall
remain in full force and effect. Termination of this Agreement
shall not relieve the Parties of any liability which accrued
hereunder prior to the effective date of such termination nor
preclude either Party from
pursuing all rights and remedies it may have hereunder or at law or in
equity with respect to any breach of this Agreement nor prejudice either
Party's right to obtain performance of any obligation.
14.9 Right to Receive Data. Upon termination, CVT shall have the
right to receive data attendant or related to sales and marketing
activities under this Agreement.
14.10 Survival. The following provisions shall survive any
expiration or termination of this Agreement, and if time periods
are specified, for the period of time specified: Sections 1.4,
4.8, 4.9, 5.4.3, 6.2.2, 7.1, 7.2, 7.4, 7.7, 9.1, 9.2, 9.4, 9.5,
9.6, 9.7, 10.3, 10.4, 10.5, 10.6, 11.2, 11.4, 11.5, 14.8, 14.9,
14.10 and Articles 12, 13, 15, 16 and 17.
ARTICLE 15
SALES FORCE CONVERSION
15.1 Right to Convert Sales Force. CVT shall have the right to
offer CVT employment to the Innovex Personnel who are members of
the Sales Force at the end of the full scheduled Term or earlier
upon a termination under Section 14.2, 14.4 or 14.7. In the
event CVT desires to convert some or all of the Sales Force to
its employment, it shall provide Innovex notice of such election
at least three (3) months prior to the end of the full scheduled
Term or with its notice of termination under Section 14.2, 14.4
or 14.7.
15.2 Transition Plan. In the event CVT decides to convert the
Sales Force, in accordance with Section 15.1, the Parties shall
promptly meet and determine a transition plan, which shall
include a schedule for actions which will enable a smooth
transition date for all Innovex Personnel: (i) who may be offered
employment by CVT; (ii) who may not be offered such employment;
and (iii) who may decline such offers. No later than thirty (30)
days before the end of the full scheduled Term or within two (2)
months from termination under Sections 14.2, 14.4 or 14.7, CVT
shall identify for Innovex the names of Innovex Personnel who
have elected to accept employment offers from CVT and those who
have not been offered employment or have declined an employment
offer.
15.3 CVT Determination. CVT shall make an independent
determination regarding the qualifications and suitability of
Innovex Personnel to be offered employment by CVT, and the terms
of such offers, if any. No information contained in the
personnel files of Innovex Personnel shall be disclosed to CVT,
including resumes, applications, performance appraisals or
disciplinary records, or the results of drug screens, motor
vehicle or background reports. Notwithstanding the foregoing,
Innovex shall notify CVT of any material violation by any Innovex
Personnel of the PDMA.
15.4 Compensation. As compensation for such conversion, CVT
shall pay Innovex a supplemental fee at the end of the payment of
royalties under Section 9.5, as follows. In the event the
aggregate amount of such royalties exceeds [ * ] of the base
salary for the Sales Force hired by CVT under this Article 15,
CVT shall not owe any supplemental payment to Innovex as a result
of the Sales Force conversion. In the event such aggregate is
less than [ * ] of the base
salary for the Sales Force hired by CVT, CVT shall pay Innovex the
difference, within thirty (30)days after the second anniversary of
the end of the Term.
15.5 Proprietary Information. In the event of any Sales Force
conversion under this Article 15, the Innovex Personnel who join
CVT may continue to use in their employment by CVT any and all
Product knowledge that they gained while in the employment of
Innovex, including knowledge regarding Product customers,
competition, selling techniques, and the like. However, other
proprietary information of Innovex (including Innovex sales and
personnel manuals and software) shall remain the property of
Innovex and shall not be conveyed to CVT. As part of the
transition plan referred to above, the Parties shall cooperate to
deliver to CVT in the most convenient electronic form any data
related to the Product (including sales activities of the Sales
Force under this Agreement) in the possession of Innovex.
ARTICLE 16
DISPUTE RESOLUTION
16.1 Disputes. The Parties recognize that disputes as to certain
matters may from time to time arise during the term of this
Agreement which relate to either Party's rights and/or
obligations hereunder. In addition to the decision-making
provisions of Article 2 of this Agreement it is the objective of
the Parties to establish procedures to facilitate the resolution
of disputes arising under this Agreement in an expedient manner
by mutual cooperation and without resort to litigation, as such
may be accomplished by good faith negotiations between CVT and
Innovex, within thirty (30) days of notice. If such dispute
remains unresolved at that point, it shall promptly be submitted
to the President of Innovex and the Chief Executive Officer of
CVT who will meet in person or by teleconference at least once
within ten (10) days after such submission and attempt to resolve
the matter or matters in dispute. If any such dispute cannot be
resolved by such officers of each Party within twenty (20) days
from the date on which the Parties submitted such dispute to such
officers, then such dispute shall be brought before and resolved
in a court of competent jurisdiction in the State of Delaware and
each Party agrees to the exclusive jurisdiction of Delaware
courts for any disputes arising from this Agreement.
16.2 Governing Law. Resolution of all disputes arising out of or
related to this Agreement or the performance, enforcement, breach
or termination of this Agreement and any remedies relating
thereto, shall be governed by and construed under the substantive
laws of the State of Delaware, as applied to agreements executed
and performed entirely in the State of Delaware by residents of
the State of Delaware, without regard to conflicts of law rules.
ARTICLE 17
MISCELLANEOUS
17.1 Condition Subsequent. This Agreement shall terminate and be
of no force and effect if for any reason the closing under the
Stock Purchase Agreement does not close within ten (10) days
following the Effective Date of this Agreement.
17.2 Return of Materials. At the completion of the services by
Innovex or termination pursuant to Article 14, all materials and
all other data owned by CVT under this Agreement, regardless of
the method of storage or retrieval, shall either be delivered to
CVT in such form as is then currently in the possession of
Innovex or disposed of, at the direction and written request of
CVT unless such materials are otherwise required to be stored or
maintained by Innovex as a matter of law or regulation. The
costs associated with either of the above options shall be paid
by CVT.
17.3 Nonsolicitation of Employees. Except as otherwise provided
herein, during the term of this Agreement and for a period of six
(6) months thereafter, each Party agrees that neither it nor any
of its divisions or operating groups that directly participates
in or is directly responsible for the development or
commercialization of the Product pursuant to this Agreement
shall, directly or indirectly, recruit, solicit or induce any
employee of the other Party to terminate his or her employment
with such other Party.
17.4 Publicity. The Parties agree that promptly following the
execution of this Agreement, they will issue a joint press
release, attached hereto and incorporated herein by reference as
Exhibit E. Subsequent announcements related to this Agreement
shall be by mutual consent. Innovex acknowledges that CVT shall
be the Party responsible for disclosure of information related to
the sales, performance, pharmaceutical characteristics and
clinical study data of the Product, and agrees not to make any
disclosures, public or private, in that regard, except for
disclosures permitted by Section 12.1.5. Each Party is otherwise
authorized to make any disclosures as may be required by law.
17.5 Business Days. If any date for payment or notice under this
Agreement falls on a Saturday, Sunday or bank holiday, then the
referenced date shall move to the first working day following
such date, provided that the calculation of working days are
never to include Saturdays, Sundays or bank holidays and the
calculation of days (without reference to "working" days) shall
include Saturdays, Sundays and bank holidays.
17.6 Entire Agreement; Amendment. This Agreement, the Loan
Agreement, the Stock Purchase Agreement and the other agreements
referred to herein between the Parties, set forth the complete,
final and exclusive agreement and all the covenants, promises,
agreements, warranties, representations, conditions and
understandings between the Parties hereto and supersede and
terminate all prior agreements and understandings between the
Parties. There are no covenants, promises, agreements,
warranties, representations, conditions or understandings, either
oral or written, between the Parties other than as are set forth
herein and therein. No subsequent alteration, amendment, change
or addition to this Agreement shall be binding upon the Parties
unless reduced to writing and signed by an authorized officer of
each Party.
17.7 Force Majeure. Both Parties shall be excused from the
performance of their obligations under this Agreement to the
extent that such performance is prevented by force majeure and
the nonperforming Party promptly provides notice of the
prevention to the other Party. Such excuse shall be continued so
long as the condition constituting force majeure continues and
the nonperforming Party takes reasonable efforts to remove the
condition. For purposes of this Agreement, force majeure shall
include conditions beyond the control of the Parties, including
without limitation, an act of God, voluntary or involuntary
compliance with
any regulation, law or order of any government,
war, civil commotion, labor strike or lock-out, epidemic, failure
or default of public utilities or common carriers, destruction of
production facilities or materials by fire, earthquake, storm or
like catastrophe; provided, however, the payment of invoices due
and owing hereunder shall not be delayed by the payor because of
a force majeure affecting the payor.
17.8 Notices. Any notice required or permitted to be given under
this Agreement shall be in writing, shall specifically refer to
this Agreement and shall be deemed to have been sufficiently
given for all purposes if mailed by first class certified or
registered mail, postage prepaid, express delivery service or
personally delivered. Unless otherwise specified in writing, the
mailing addresses of the Parties shall be as described below.
For CVT: CV THERAPEUTICS, Inc.
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Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, General Counsel
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
With a Copy to: ▇▇▇▇▇▇ Godward LLP
Five Palo Alto Square
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Fax: ▇▇▇-▇▇▇-▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
For Innovex: Innovex Inc.
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Attention: ▇▇▇▇▇ ▇▇▇▇▇, President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
With a Copy to: L. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
General Counsel
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Phone: (▇▇▇) ▇▇▇ ▇▇▇▇
or to such other destination as either Party
may hereafter notify the other Party in accordance with this
section.
17.9 Consents Not Unreasonably Withheld or Delayed. Whenever
provision is made in this Agreement for either Party to secure
the consent or approval of the other, that consent or approval
shall not unreasonably be withheld or delayed, and whenever in
this
Agreement provisions are made for one Party to object to or
disapprove a matter, such objection or disapproval shall not
unreasonably be exercised.
17.10 Maintenance of Records. Each Party shall keep and
maintain all records required of it by law or regulation with
respect to the Product and shall make copies of such records
available to the other Party upon request.
17.11 United States Dollars. References in this Agreement to
"Dollars" or "$" shall mean the legal tender of the United States
of America.
17.12 No Strict Construction. This Agreement has been
prepared jointly and shall not be strictly construed against
either Party.
17.13 Assignment. Neither Party may assign or transfer this
Agreement or any rights or obligations hereunder without the
prior written consent of the other, except that a Party may make
such an assignment without the other Party's consent to
Affiliates or to a successor to substantially all of the business
of such Party, whether in a merger, sale of stock, sale of assets
or other transaction. Any permitted successor or assignee of
rights and/or obligations hereunder shall, in a writing to the
other Party, expressly assume performance of such rights and/or
obligations. Any permitted assignment shall be binding on the
successors of the assigning Party. Any assignment or attempted
assignment by either Party in violation of the terms of this
Section 17.13 shall be null and void and of no legal effect. If
either Party assigns this Agreement to an Affiliate pursuant to
this Section 17.13, the assigning Party shall provide a
continuing guarantee of the performance of this Agreement by such
Affiliate.
17.14 Performance by Affiliates. Obligations under this
Agreement may be performed by Affiliates of Innovex and CVT only
with the prior consent of the other Party. In the event any such
performance is carried out by Affiliates with the prior consent
of the other Party, each of Innovex and CVT guarantees
performance of this Agreement by its Affiliates. No Affiliate of
a Party may make decisions inconsistent with this Agreement,
amend the terms of this Agreement or act contrary to its terms in
any way.
17.15 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
17.16 Further Actions. Each Party agrees to execute,
acknowledge and deliver such further instruments, and to do all
such other acts, as may be necessary or appropriate in order to
carry out the purposes and intent of this Agreement.
17.17 Severability. If any one or more of the provisions of
this Agreement is held to be invalid or unenforceable by any
court of competent jurisdiction from which no appeal can be or is
taken, the provision shall be considered severed from this
Agreement and shall not serve to invalidate any remaining
provisions hereof. The Parties shall make a good faith effort to
replace any invalid or unenforceable provision with a valid and
enforceable one such that the objectives contemplated by the
Parties when entering this Agreement may be realized.
17.18 Ambiguities. Ambiguities, if any, in this Agreement
shall not be construed against any Party, irrespective of which
Party may be deemed to have authored the ambiguous provision.
17.19 Headings. The headings for each article and section in
this Agreement have been inserted for convenience of reference
only and are not intended to limit or expand on the meaning of
the language contained in the particular article or section.
17.20 No Waiver. Any delay in enforcing a Party's rights
under this Agreement or any waiver as to a particular default or
other matter shall not constitute a waiver of such Party's rights
to the future enforcement of its rights under this Agreement,
except with respect to an express written and signed waiver
relating to a particular matter for a particular period of time.
[SIGNATURE PAGE TO SALES AND MARKETING SERVICES AGREEMENT]
In Witness Whereof, the Parties have executed this Agreement
in duplicate originals by their duly authorized officers as of
the date and year first above written.
CV Therapeutics, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Print: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman & CEO
Date: May 5, 1999
Innovex Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
Print: ▇▇▇▇▇ ▇▇▇▇▇
Title: President and General Manager
Date:
For the Purposes Only of
Article 8 Quintiles
Transnational Corp.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Print: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
Corporate Development
Date:
Exhibit A
Definitions
The following terms shall have the following meanings as
used in this Agreement:
1. "Affiliate" means any corporation or business entity
controlled by, controlling, or under common control with a Party
to this Agreement. For this purpose, "control" shall mean direct
or indirect beneficial ownership of at least fifty percent (50%)
of the voting stock or income interest in such corporation or
other business entity, or such other relationship as, in fact,
constitutes actual control.
2. "FDA" means the U.S. Food and Drug Administration.
3. "Field Manager" means a member of the Sales Force having the
responsibilities set forth on Schedule III for such job title.
4. "First Year Sales Commitment" means the line of credit
extended to CVT by Quintiles, for the purpose of assisting in the
financing of first year sales and marketing expenses for the
Product, and identified as in the Loan Agreement.
5. "Fully Burdened Cost" will have the meaning provided in
Section 3.3.
6. "Innovex Personnel" means any individual who is performing
any part of the services hereunder and who stands in an employer-
employee relationship with Innovex.
7. "Joint Commercialization Committee" or "JCC" means the
committee formed pursuant to Section 2.2.
8. "Joint Steering Committee" or "JSC" means the joint
committee formed pursuant to Section 2.1.
9. "Loan Agreement" means the loan agreement of even date
herewith between Quintiles and CVT.
10. "Marketing Plan" means a plan detailing the activities to be
performed by each Party in the Territory as more fully described
in Article 3 hereof.
11. "Minimum Post-Approval Marketing Expenditure Commitment"
means the minimum expenditures on Post-Approval Marketing
Activities Innovex shall provide in accordance with Section
4.5.2.
12. "Minimum Sales Force Commitment" means such Innovex Sales
Force commitment in accordance with Section 4.5.1 hereof.
13. "National Sales Manager" means the leader of the Sales Force
having the responsibilities set forth on Schedule III for such
job title.
14. "NDA" means an application as defined in the United States
Food, Drug and Cosmetic Act and applicable regulations
promulgated thereunder to the FDA, the approval of which is
required before a pharmaceutical product may be promoted and sold
in the Territory.
15. "NDA Filing" means the date the FDA accepts the
submission/application and issues an NDA identification number.
16. "Net Sales" means the amount billed by CVT or an Affiliate
for sales of the Product to an unrelated Third Party in the
Territory less: (i) discounts, including cash and quantity
discounts, charge-back payments and rebates granted to managed
health care organizations or to federal, state and local
governments, their agencies, and purchasers and reimbursers or to
trade customers, including but not limited to, wholesalers and
chain and pharmacy buying groups; (ii) credits or allowances
actually granted upon claims, damaged goods, rejections or
returns of such Product, including recalls, regardless of the
Party or Third Party requesting such; (iii) freight, postage,
shipping and insurance charges actually allowed or paid for
delivery of the Product, to the extent billed; (iv) taxes, duties
or other governmental charges levied on, absorbed or otherwise
imposed on sale of such Product, including without limitation
value-added taxes, or other governmental charges otherwise
measured by the billing, when included in billing, as adjusted
for rebates and refunds; and (v) bad debts (defined as any bills
unpaid for one hundred eighty (180) days after due) and after CVT
has used commercially reasonable efforts to collect.
17. "Phase IIIB/IV Studies" means a study conducted for
marketing of the Product in the Territory and not for the purpose
of obtaining FDA approval of the NDA.
18. "Post-Approval Marketing Activities" means such promotional
and marketing activities as are described on the Exhibits and
Schedules attached hereto and any other activities identified by
the JSC in furtherance of the objectives of this Agreement, which
activities are allowed by the FDA or under the Food Drug &
Cosmetic Act and its attendant regulations, and which are
conducted after Product Launch. Such activities also include
marketing input into clinical strategic planning activities, i.e.
protocol development, future indications.
19. "Pre-Approval Loan" means the line of credit extended to CVT
by Quintiles, for the purpose of assisting in the financing of
Pre-Approval Marketing Activities, and identified in the Loan
Agreement.
20. "Pre-Approval Marketing Activities" means marketing
activities identified by the JSC in furtherance of the objectives
of this Agreement, and as may be allowed by applicable regulatory
authorities and the AMA Guidelines on Gifts to Physicians prior
to Product Launch. Such activities shall include without
limitation, educational programs, symposia, poster-sessions,
seminars for physicians, market research, pricing studies,
development of promotional activities and advertising agency
fees. Such activities also include marketing input into clinical
strategic planning activities, i.e. protocol development, future
indications, Phase IIIB/IV Studies.
21. "Pre-Approval Marketing Expenses" means expenses incurred
for Pre-Approval Marketing Activities, which shall include all
Innovex billable expenses related to the Product prior to Product
Launch, exclusive of: (i) post-Launch sales and marketing
activities or expenses; and (ii) Sales Force Startup Costs.
22. "Product" means ranolazine (the pharmaceutical agent
described in U.S. Patent No. 4,567,264) in a sustained release
formulation, together with any other formulation approved or
marketed during the Term for the treatment of stable angina.
23. "Product Launch" or "Launch" means the first date upon which
the FDA-approved Product is shipped by CVT to a wholesaler for
commercial distribution.
24. "Project Administrator" means the Innovex employee at the
headquarters office who will provide administrative support for
the National Sales Manager.
25. "Promotional Materials" means written materials generated
for the purpose of promotion and sale of the Product, in all
cases with the prior written approval of CVT.
26. "Sales and Marketing Fee" means the amount Innovex will be
paid for the services as ore fully set forth in Section 9.1
hereof.
27. "Sales Force" means those Innovex Personnel, including
without limitation Territory Representatives, Field Managers,
National Sales Manager and Project Administrator who promote the
Product under this Agreement.
28. "Sales Force Startup Costs" means costs associated with
keeping, training and maintaining a dedicated Sales Force
preceding Product Launch, exclusive of Pre-Approval Marketing
Expenses and as more fully described in Sections 4.2.1 and 9.3.
29. "Sales Quarter" means a calendar quarter, the first quarter
to consist of the period from the Product Launch until the
beginning of the calendar month the next calendar quarter begins.
30. "Sales Year" means, respectively, the periods that encompass
Sales Quarters 1-4, 5-8, 9-12, 13-16 and, for Sales Year 5, the
period commencing with Sales Quarter 17 and ending with December
31st of the calendar year which includes the fifth anniversary of
the Product Launch.
31. "Sample" means units of Product distributed by Innovex,
pursuant to the provisions of the Prescription Drug Marketing
Act, and for complimentary distribution to patients by
practitioners licensed to prescribe Product, whether packaged as
individual samples or as trade packages.
32. "Stock Purchase Agreement" shall have the meaning provided
in Section 8.1.
33. "Term" means the period of time from the Effective Date to
the end of the calendar year which includes the fifth anniversary
of the Product Launch or the earlier termination of the Agreement
in accordance with its terms, whichever is earlier.
34. "Territory" means the United States of America and its
territories and possessions, including Puerto Rico.
35. "Territory Representative" means an employee of Innovex: (i)
who is responsible for meeting with customers and others who can
buy (or influence the buying process and decision regarding) the
Product; and (ii) whose success at such activities is a
significant factor in the ongoing employment and compensation of
the individual representative. The responsibilities of a
Territory Representative are set forth on Schedule III.
36. "Third Party" means any entity or person other than Innovex
or CVT or an Affiliate of either of them.
Exhibit B
MARKETING PLAN OUTLINE
I. Executive Summary
II. Market Analysis
" Angina Market
" Angina Products
" Future Outlook
III. Product Profile
" Product Description
" Indications
" Clinical Experience and Program
" Formulation, Packaging and Administration
IV. SWOT Analysis
V. 5 year Sales Forecasts
" Units, Dollars, Prescriptions, Market Share
VI. Objectives
" Awareness
" Communication
" Product Use
" Sales
" Market Share
" Managed Care/Formulary
VII. Key Issues
VIII.Strategies
" Product Positioning
" Audiences
" Sales Force
" Pharmacoeconomics
IX. Tactics
" Pharmacoeconomics
" Market Research
" Medical Education
" Publication Plan
" Personal Selling Materials Program
" Clinical Support
" Sales Force Support
" Sampling
" Managed Care / Formulary
" Territory Sales Force Effort
X. Budget Following Year
XI. Timelines
Exhibit C
Cost Allocation For Post-Approval Marketing Activities
Category Innovex Innovex CVT
Sales Marketing Cost
Force Expenditur
Expenses es
Advertising (journal and mail) [ * ] [ * ] [ * ]
Auto Costs (allowance, mileage, [ * ] [ * ] [ * ]
parking, tolls, etc.)
Back office, infrastructure [ * ] [ * ] [ * ]
Distribution of the Samples [ * ] [ * ] [ * ]
Drug Screens and reference [ * ] [ * ] [ * ]
checks
Equipment: 1) Computer (hard [ * ] [ * ] [ * ]
& soft), printer, fax [ * ] [ * ] [ * ]
2) Detail bags, business
cards
Field Supplies: postage, [ * ] [ * ] [ * ]
stationery, printer ink, phone
charges
Forms, reports especially [ * ] [ * ] [ * ]
requested by CVT
Innovex Fee for Services [ * ] [ * ] [ * ]
Marketing
ITMS (call reporting, voice [ * ] [ * ] [ * ]
mail, email, Sample
accountability)
Insurance: employment, workers [ * ] [ * ] [ * ]
comp, E & O, CGL
Market Research [ * ] [ * ] [ * ]
Medical and other benefits [ * ] [ * ] [ * ]
Medical Education [ * ] [ * ] [ * ]
Meetings: [ * ] [ * ] [ * ]
CVT national, regional &
district; product Launches;
initial training.
Payroll Taxes [ * ] [ * ] [ * ]
Pharmacoeconomic Analysis and [ * ] [ * ] [ * ]
Communication
Product Public Relations [ * ] [ * ] [ * ]
Promotional Agency Fees [ * ] [ * ] [ * ]
Promotional literature and sales [ * ] [ * ] [ * ]
aids, including distribution
Recruiting (database screening, [ * ] [ * ] [ * ]
ad placement); re-recruiting
Salaries and variable incentive [ * ] [ * ] [ * ]
compensation (bonus)
Sales data [ * ] [ * ] [ * ]
Samples [ * ] [ * ] [ * ]
Sample Packaging [ * ] [ * ] [ * ]
Supplemental Post Approval [ * ] [ * ] [ * ]
Marketing Activities
Territory alignment, mapping and [ * ] [ * ] [ * ]
optimization
Trade shows and organized [ * ] [ * ] [ * ]
customer events
Training-production of training [ * ] [ * ] [ * ]
materials
Training-cost of delivery and [ * ] [ * ] [ * ]
facilities
Travel Expenses (air, hotel &
meals) for Sales Force [ * ] [ * ] [ * ]
*Interviewing [ * ] [ * ] [ * ]
*Training [ * ] [ * ] [ * ]
*Field Manager, National Sales [ * ] [ * ] [ * ]
Manager, Representatives
Exhibit D
Sales Levels For Section 14.4
Sales Year 2 [ * ]
Sales Year 3 [ * ]
Sales Year 4 [ * ]
Exhibit E
Mutual Press Release
PRESS RELEASE
FOR IMMEDIATE RELEASE
Contact: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Chief Financial Officer
650/812-9509
or
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Director of Strategic Planning
and Investor Relations
650/812-9560
CV THERAPEUTICS ANNOUNCES AGREEMENT WITH INNOVEX TO
COMMERCIALIZE RANOLAZINE
PALO ALTO, CA (May 11, 1999) - CV Therapeutics, Inc.
(Nasdaq: CVTX) today announced the signing of an innovative
commercialization agreement with Innovex, a leading
commercial solutions provider for the global pharmaceutical
industry, for the U.S. marketing and sales of CVT's
ranolazine. Ranolazine is currently in Phase III clinical
trials for the potential treatment of chronic stable angina,
a disease that affects approximately 7 million people in the
United States.
The agreement calls for Innovex to conduct pre-launch
activities, hire and train a dedicated cardiology sales
force to launch and promote ranolazine, and provide post-
launch marketing and sales services. Innovex has agreed to
provide services for at least three years after launch and
to provide services in years four and five after launch if
certain minimum sales levels are met.
In the first year after launch, Innovex will provide a sales
force and fund marketing activities and will be paid on a
standard fee-for-service basis. Based on the minimum sales
force and marketing spend specified in the agreement, the
first year fee would be at least $19 million. In year two,
the agreement specifies that Innovex will provide a sales
force of a certain minimum size. Per the agreement, total
compensation for these first two years will not exceed, and
in most cases is expected to be roughly equal to, 33% of
total revenues during that period.
The size of the sales force and the marketing spend in year
three or any subsequent year will be tied to the performance
of the product. Total compensation to Innovex for years
three through five will not exceed, and is expected to be
roughly equal to, 25% to 30% of total revenues during that
period, and deferred compensation in years six and seven
after launch will not exceed 7% and 4% respectively.
-more-
The agreement also calls for Innovex's parent company,
Quintiles Transnational Corp. (Nasdaq: QTRN), to make a $5
million investment in common stock of CVT and, upon the
FDA's acceptance of the ranolazine New Drug Application
filed by CVT, make available up to a $10 million secured
credit facility to CVT for funding of pre-launch activities
to be performed by Innovex under a traditional fee-for-
service agreement, or in some limited cases to be performed
by vendors approved by Innovex. This credit facility is
convertible into CVT stock at the election of Quintiles
under certain circumstances. Quintiles will also make a
milestone payment of $10 million payable at product launch
which can be offset by the outstanding loan.
The agreement represents an innovative commercialization
model designed to maximize commercial successes of both
parties while preserving resources for discovery and
development efforts. The agreement provides CVT access to
Innovex's high-quality, full-service marketing and sales
operation and strategic consulting services. As such, this
agreement allows CVT to maintain its focus and dedicate
internal resources to the development of its product
portfolio. The minimum amount of services Innovex is
expected to provide over the full five-year period after
launch, if ranolazine is approved and meets the minimum
sales levels specified in the agreement, would otherwise
cost CVT about $110 million under a traditional fee-for-
service basis. CVT has final decision-making control on all
strategic issues regarding ranolazine throughout the term of
the agreement, and has the option after five years to
convert the Innovex sales force to a CVT sales force.
"This agreement allows CVT to retain product control while
avoiding most of the significant burden of acquiring a
dedicated sales force," said ▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D., Ph.D.,
Chairman and Chief Executive Officer of CV Therapeutics.
"By paying for these services under a fee agreement based on
a percentage of revenues, CVT retains product control while
mitigating both the risks of acquiring a dedicated sales
force and of financing it. And with access to the unique
market research derived for the non-patient-identified
pharmacy and medical transactions data of Quintiles' ENVOY
subsidiary, we believe Innovex is in a unique position to
market ranolazine effectively."
▇▇▇▇▇ ▇▇▇▇▇, President and General Manager of Innovex Inc.,
said: "We're extremely pleased about the opportunity to
launch ranolazine, potentially the first new class of anti-
anginals in over 20 years. This innovative service
agreement is a response to our customers' current needs and
requests and demonstrates again Innovex's commitment to
providing overall commercialization solutions to the
pharmaceutical industry. The fee structure gives us
potential for much greater return on our investment if sales
meet the minimum sales levels specified in the agreement.
We have the opportunity to exceed twice our normal margins.
The agreement also allows for Innovex to change the size of
the sales force if sales are lower or higher than the
minimum sales levels specified in the agreement."
As the leader in providing contract sales and marketing
solutions to the healthcare industry, Innovex has built over
30 sales teams ranging in size from five to 500. With more
than 7,500 employees worldwide and sales forces in 19
countries, Innovex has worked with virtually all of the
major pharmaceutical companies in almost every
-more-
therapeutic area. Innovex, through Quintiles' propriety
QUINTERNETTM technology platform, also has developed one of
the first Web-based sales force automation systems offering
territory planning, alignment, sample accountability and
call reporting capabilities.
CV Therapeutics, Inc., headquartered in Palo Alto,
California, is a biopharmaceutical company focused on the
application of molecular cardiology to the discovery,
development and commercialization of novel, small molecule
drugs for the treatment of cardiovascular diseases. CV
Therapeutics is a development stage company. Ranolazine has
not been approved for marketing by the Food and Drug
Administration or other foreign agencies. Ranolazine is
presently being investigated in Phase III clinical trials
subject to a United States IND and applicable foreign
authority submissions. CV Therapeutics has not yet
submitted an NDA to the FDA or equivalent application to any
other foreign regulatory authorities for ranolazine and
ranolazine has not yet been determined to be safe or
effective in humans for its intended use. In addition to
historical information, this press release contains forward-
looking statements that involve risks and uncertainties,
including, but not limited to, uncertainties related to CV
Therapeutics' early stage of development and clinical trials
and dependence on collaborative and licensing arrangements,
which may cause actual results to differ materially. These
factors are more fully discussed in CV Therapeutics' Annual
Report on Form 10K for the year ended December 31, 1998.
For more information, please visit CV Therapeutics' web-site
at ▇▇▇.▇▇▇.▇▇▇.
Innovex, a service group of Quintiles Transnational Corp.,
is the worldwide leader in providing pharmaceutical and
biotechnology companies integrated solutions to enhance the
commercial success of their products. Quintiles is the
market leader in providing a full range of integrated
product development and commercialization solutions to the
pharmaceutical, biotechnology and medical device industries.
Quintiles also is a leader in the electronic data
interchange and healthcare informatics industry and provides
healthcare policy consulting to governments and other
organizations worldwide.
Headquartered near Research Triangle Park, North Carolina,
Quintiles is a Fortune 1000 company and a member of the
Nasdaq-100 Index. With more than 16,000 employees worldwide
and offices in 31 countries, Quintiles operates through
specialized work groups dedicated to meeting customers'
individual needs. For more information, please visit the
Quintiles Transnational web site at ▇▇▇.▇▇▇▇▇▇▇▇▇.▇▇▇.
Information in this press release contains "forward-looking
statements." These statements involve risks and
uncertainties that could cause actual results to differ
materially, including without limitation, actual operating
performance, the ability to maintain large client contracts
or to enter into new contracts. Additional factors that
could cause actual results to differ materially, including
the affect of recent acquisitions, are discussed in
Quintiles Transnational Corp.'s recent filings with the
Securities and Exchange Commission, including but not
limited to its S-3 and S-4 Registration Statements, its
Annual Report on Form 10-K, its Form 8-Ks, and its other
periodic reports, including Form 10-Qs.
-end-
Schedule I
Innovex Responsibilities
1. Innovex will provide the following Innovex Personnel to
comprise the Sales Force:
(a) Territory Representatives (as defined in Schedule III,
Section 1);
(b) Field Managers (as defined in Schedule III, Section 2);
(c) National Sales Manager (as defined in Schedule III, Section
3); and
(d) Project Administrator.
2. Innovex will be responsible for recruitment and re-
recruitment of the Innovex Personnel, in accordance with the
Innovex 10 step hiring process. CVT will not be involved in the
interviewing, selection or hiring of Innovex Personnel.
3. Innovex will only hire qualified Innovex Personnel, defined
as meeting a hiring profile to be established by the JCC.
4. Innovex will manage all employer obligations in connection
with the employment of Innovex Personnel, including, but not
limited to, discipline and termination of employees. Innovex
shall provide administrative resources for Field Managers, and
communication between Innovex and the Innovex Personnel. CVT
will not be involved in the management or supervision of Innovex
Personnel.
5. Training: Innovex shall be responsible for training the
Sales Force regarding the Promotional Materials, disease and
therapeutic areas, Product knowledge, Product marketing strategy
and regional management in the Territory, Product recalls,
reporting complaints and adverse events. The training will be
conducted in a manner so as to meet or exceed the minimum
training standards agreed to by the Parties and in accordance
with all laws, rules, regulations and policies, including but not
limited to the AMA Guidelines on Gifts to Physicians.
6. Innovex shall be responsible for equipping the Sales Force
with computer hardware and software needed to carry out the
promotion of the Product. All Innovex Personnel assigned to the
Sales Force will receive a laptop computer and printer with
interface cable. Innovex shall bear the cost of the hardware and
software, including appropriate licenses and training,
configuration, and replication/data line access. Innovex shall
bear the costs of upgrades to hardware or software as it deems
necessary for successful promotion of the Product. In addition,
Innovex shall establish and bear the costs of help desk support
for the hardware and software it provides.
7. Innovex will provide the Sales Force the Innovex Territory
Management System ("ITMS") or other comparable sales force
automation system and email/voice mail systems which will include
components for call reporting, expense reporting, physician
prescribing, Sample tracking, call history, sales and market-
share reporting, customized
reports and communications. These
systems shall be of similar quality and effectiveness to that
which Innovex provides to its other clients. Innovex will make
reasonable efforts to enable a reasonable number of CVT personnel
to have access to and be able to link into the ITMS and
email/voicemail systems used by the Sales Force.
8. Innovex shall be responsible for equipping the Field
Managers with facsimile machines as needed to carry out the
promotion of the Product.
9. All promotional and detailing activities and obligations
undertaken by Innovex Personnel and the Sales Force hereunder
shall be performed in accordance with the Marketing Plan. No
Innovex Personnel shall create Promotional Materials or other
written materials relating to the Product without first
submitting those materials to CVT for and obtaining CVT's written
approval prior to use. Innovex Personnel and the Sales Force
shall make no statements, claims or undertakings to any person
with whom they discuss or promote the Product that are
inconsistent with the Promotional Materials. Promotional
activities shall be in compliance with all applicable laws,
rules, and regulations and policies. The Innovex Personnel and
the Sales Force shall not offer, pay, solicit or receive any
remuneration to or from physicians or prescribers or health
facilities, in order to induce referrals of or purchase of the
Product. The Innovex Personnel and the Sales Force shall have no
direct contact with, nor shall the Innovex Personnel and the
Sales Force be involved with the delivery of the Product to
patients of physicians, other than delivery of Samples directly
to physicians or practitioners authorized to prescribe the
Product in the Territory. Innovex shall permit CVT to accompany
Territory Representatives on sales calls from time to time with
reasonable advance notice.
10. Innovex shall provide monthly project management reports to
CVT in Innovex's standard form within fifteen (15) business days
after the end of each month.
11. Innovex shall be responsible for the Product Launch meeting,
POA meetings and national, regional or district meetings.
12. Innovex shall distribute the Samples provided by CVT through
a combination of the Sales Force and by mail, as directed in the
Marketing Plan and in accordance with recordkeeping and other
requirements of the PDMA.
13. Innovex shall be responsible for establishment of Sales
Force targets and level of activity against these targets.
Targeting should take into account the Minimum Sales Force
Commitment and the Marketing Plan.
14. Innovex shall have developed for it, in accordance with the
Minimum Sales Force Commitment and the Marketing Plan and provide
to the Sales Force, customer listings and territory mapping,
alignment and optimization.
15. Innovex shall provide the Sales Force with CVT business
cards.
Schedule II
CVT Responsibilities & Obligations
CVT Sales Project
1. CVT shall ensure that the CVT sales, marketing and medical
personnel are fully briefed as to the complementary role of the
Innovex Personnel and ensure cooperation with the Innovex
Personnel.
2. CVT shall be responsible for:
" Communications within CVT and from CVT to Innovex.
" Handling all aspects of order processing and fulfillment,
invoicing and collection, Product supply, inventory and
receivables.
Schedule III
Role Definitions
1. Territory Representative
RESPONSIBILITIES AND DUTIES:
" Generates sales within an assigned territorial boundaries.
" Maintains current and prospective customer profiles and
information.
" Keeps current with Product, competitor products, and market
knowledge.
" Maintains a professional image for CVT and the Product at
all times.
" Organizes territory-planning to meet sales and call goals.
" Provides sales presentations: individual one-on-one, groups,
in-services.
" Maintains Sample inventories, distributes Samples, complies
with Sample accountability procedures and policies.
" Participates in all training programs.
" Completes and submits in a timely manner all accountability
and expense reports. Monitors that Product is appropriately
stocked by local distribution centers, hospitals and pharmacies.
" Monitors that Product is on hospital formularies.
" Attends trade shows as directed by National Sales Manager.
SKILLS:
" Initiative
" Persuasiveness/Sales ability
" Planning and Organizing
" Individual Leadership/Influencing
" Teamwork/Collaboration
" Motivational Fit
2. Field Manager
" Attains sales objectives within assigned districts.
" Deploys resources to maximize district sales potential.
" Implements CVT Product strategies within district.
" Maintains District budgets and accurate records on all sales
activities.
" Makes regular field visits to develop, train, supervise,
motivate and monitor Territory Representative performance;
completes field contact reports.
" Makes final hiring decision; training and evaluation of
Territory Representatives.
" Documents and recommends all disciplinary actions to include
warnings, suspensions, probation, terminations.
" Communicates with CVT management on a regular basis.
" Submits a formal monthly report to Innovex National Sales
Manager.
" Assists in the planning and delivery of initial training
course.
" Assists in the planning and delivery of POA or trimester
meetings.
" Monitors that Product is on managed care formularies that
are within the Field Manager's district.
3. National Sales Manager
" Hires, trains develops and evaluates Field Managers.
" Develops, supervises, motivates and monitors performance of
Field Managers.
" Maintains project budgets.
" Monitors days worked and directs Field Managers accordingly.
" Prepares and submits monthly summary report to Innovex and
CVT management Serves as key point of contact for CVT.
" Approves all Sales Force disciplinary actions.
" Develops initial training program for Territory
Representatives and Field Managers.
" Coordinates POA or trimester meetings; plans and conducts
meetings with CVT and its region management.
" Coordinates submissions for national managed care
formularies.
" Directs coordination of Field Manager and Territory
Representatives to attend trade shows as appropriate.
SALES AND MARKETING AGREEMENT
among
CV THERAPEUTICS, INC.,
INNOVEX INC.,
and
QUINTILES TRANSNATIONAL CORP.
Table Of Contents
Page
ARTICLE 1 SERVICES OVERVIEW; INNOVEX EXCLUSIVITY 1
1.1 Definitions 1
1.2 Overview; CVT Engagement of Innovex 1
1.3 Innovex Exclusive Rights 1
1.4 Retained Rights by CVT 2
1.5 Additional Indications 2
ARTICLE 2 COMMITTEES 2
2.1 Joint Steering Committee ("JSC") 2
2.2 Joint Commercialization Committee ("JCC") 3
2.3 Agendas and Minutes for the JSC and JCC 4
2.4 Innovex Attendance at JCC as a Billable Expense 4
2.5 No Authority to Modify Agreement 4
ARTICLE 3 MARKETING PLAN; DETERMINATION OF FULLY BURDENED
COST 5
3.1 Marketing Plan 5
3.2 Plan Contents 5
3.3 Determination of Fully Burdened Cost 5
ARTICLE 4 INNOVEX RESPONSIBILITIES 6
4.1 Covenant to Operate under the Agreement; General
Diligence Requirement 6
4.2 Pre-Approval Responsibilities 6
4.3 Post-Approval Responsibilities 7
4.4 Fully Dedicated Sales Force 7
4.5 Minimum Requirements 7
4.6 Training Requirements 8
4.7 Innovex Responsibilities 8
4.8 Records and Reports Regarding Promotional
Activities 8
4.9 Performance Audits 8
4.10 Other Responsibilities 8
ARTICLE 5 CVT'S RESPONSIBILITIES AND OBLIGATIONS 8
5.1 Regulatory Affairs 8
5.2 Pre-Approval Marketing Activities 9
5.3 Obligation to Provide Samples 9
5.4 Sales and Distribution 10
5.5 CVT Responsibilities 10
ARTICLE 6 TRAINING; ADVERTISING AND PROMOTIONAL MATERIALS 10
6.1 Training Programs 10
6.2 Advertising and Promotional Materials 10
ARTICLE 7 REGULATORY ISSUES AND COMPLAINTS 11
7.1 Ownership of Regulatory Filings and Compliance 11
7.2 Communication with the FDA and Other Regulatory
Agencies 11
7.3 New Developments Relating to the Product 12
7.4 Product Recalls 12
7.5 Adverse Event Reporting Procedures 12
7.6 Product Inquiries; Complaints 12
7.7 Database of Clinical Trial Data 12
ARTICLE 8 EQUITY & LOAN ARRANGEMENTS; MILESTONE PAYMENT 12
8.1 Equity Stake 13
8.2 Pre-Approval Line of Credit 13
8.3 First Year Sales Loan 13
8.4 Milestone Payment 13
ARTICLE 9 COMPENSATION 13
9.1 Sales and Marketing Fee 13
9.2 Penalty for Shortfall of Innovex Effort 14
9.3 Start-Up Sales Force Costs 15
9.4 Reports of Sales, Fully Burdened Cost, Sales and
Marketing Fee 15
9.5 Post-Term Royalty 16
9.6 Payments 16
9.7 Non-Monetary Consideration 17
ARTICLE 10 ACCOUNTING; INVOICING AND PAYMENT 17
10.1 Accounting 17
10.2 Invoicing Procedure; Additional Services; Standard
Terms Not Part of this Agreement 17
10.3 Obligation to Pay for Innovex Pre-Approval
Marketing Activities 17
10.4 Payment of Invoices 17
10.5 Penalty for Late Payment 18
10.6 Record-Keeping and Financial Audits 18
ARTICLE 11 REPRESENTATIONS AND COVENANTS 19
11.1 Mutual Authority 19
11.2 Conformance with Laws 19
11.3 Rights in Product 20
11.4 Record Maintenance 20
11.5 Firewall 20
11.6 No Use of Names or Trademarks 20
11.7 Year 2000 Compliance 20
11.8 NDA Filing 21
ARTICLE 12 CONFIDENTIALITY 21
12.1 Confidential Information 21
12.2 Ownership of Data; No License 22
12.3 Survival 22
ARTICLE 13 INDEMNIFICATION 22
13.1 Indemnification by CVT 22
13.2 Indemnification by Innovex 22
13.3 Procedure 23
13.4 No Consequential Damages 23
13.5 CVT Responsibility for Product Description 23
13.6 Insurance 23
ARTICLE 14 TERM AND TERMINATION 24
14.1 Term 24
14.2 Material Breach 24
14.3 NDA Filing; No Product Approval 24
14.4 Failure to Achieve Certain Net Sales 24
14.5 Permitted CVT Co-Promotion Agreement 25
14.6 Loss of Product Rights by CVT 25
14.7 Bankruptcy 25
14.8 Accrued Rights 25
14.9 Right to Receive Data 26
14.10Survival 26
ARTICLE 15 SALES FORCE CONVERSION 26
15.1 Right to Convert Sales Force 26
15.2 Transition Plan 26
15.3 CVT Determination 26
15.4 Compensation 26
15.5 Proprietary Information 27
ARTICLE 16 DISPUTE RESOLUTION 27
16.1 Disputes 27
16.2 Governing Law 27
ARTICLE 17 MISCELLANEOUS 27
17.1 Condition Subsequent 27
17.2 Return of Materials 28
17.3 Nonsolicitation of Employees 28
17.4 Publicity 28
17.5 Business Days 28
17.6 Entire Agreement; Amendment 28
17.7 Force Majeure 28
17.8 Notices 29
17.9 Consents Not Unreasonably Withheld or Delayed 29
17.10Maintenance of Records 30
17.11United States Dollars 30
17.12No Strict Construction 30
17.13Assignment 30
17.14Performance by Affiliates 30
17.15Counterparts 30
17.16Further Actions 30
17.17Severability 30
17.18Ambiguities 31
17.19Headings 31
17.20No Waiver 31
EXHIBIT A
DEFINITIONS ▇-▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇-▇
EXHIBIT C
COST ALLOCATION FOR POST-APPROVAL MARKETING ACTIVITIES C-1
EXHIBIT D
SALES LEVELS FOR SECTION 14.4 D-1
EXHIBIT E
MUTUAL PRESS RELEASE E-1
SCHEDULE I
INNOVEX RESPONSIBILITIES SI-1
SCHEDULE H
CVT RESPONSIBILITIES & OBLIGATIONS, CVT SALES PROJECT SII-1
SCHEDULE III
ROLE DEFINITIONS SIII-1
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[ * ] = Certain confidential information contained in this
document, marked by brackets, has been omitted and filed
separately with the Securities and Exchange Commission pursuant
to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.