EXHIBIT 10.16
RESEARCH AND MANUFACTURING AGREEMENT
This Research and Manufacturing Agreement (the "Agreement") is entered
into as of May 7, 2004 ("Effective Date"), by and between Light Sciences
Corporation ("LSC"), a Washington corporation with offices located at 00000 XX
Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, XX 000000, and Xxxxxxx Matthey
Pharmaceutical Materials, Inc., d/b/a Pharm-Eco, a Delaware corporation with
offices located at 00 Xxxxxx Xxxx, Xxxxxx, XX 00000 ("Pharm-Eco").
RECITALS
WHEREAS, LSC has obtained the rights to commercially exploit a
proprietary compound; and
WHEREAS, LSC desires to obtain research and manufacturing services
relating to such proprietary compound for use in the manufacture of clinical
trial and commercial supplies of a drug having such proprietary compound as its
active pharmaceutical ingredient ("API"); and
WHEREAS, Pharm-Eco desires to provide research and manufacturing
services to LSC relating to such proprietary compound.
NOW THEREFORE, in consideration of the premises and the mutual promises
and covenants contained in this Agreement, and for other good and valuable
consideration the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
AGREEMENT
1. DEFINITIONS.
For the purposes of this Agreement, the following words and phrases
shall have the following meanings:
1.1 "BATCH" means a single run of Product produced by a single
execution of the procedures specified in the Master Production and Control
Record.
1.2 "BATCH PRODUCTION AND CONTROL RECORD" or "BATCH RECORD" means the
set of information that Pharm-Eco is responsible for maintaining with respect to
each Batch of Product. The Batch Record shall contain all of the information
required by and shall otherwise comply with applicable regulations for the
manufacture of API under cGMP requirements.
1.3 "CMC SECTION" means a Chemistry, Manufacturing, and Control section
of a Regulatory Approval, as mutually agreed to by the Parties.
1.4 "DEVIATION REPORT" means a written report that describes and
justifies any deviation from the written production and process control
procedures for the Product in compliance with the applicable provisions of cGMP
regulations for API.
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1.5 "DRUG MASTER FILE" means a submission to the FDA as described in 21
C.F.R. Section 314.420, or successors thereto, providing detailed information
about facilities, processes, and/or articles used in the manufacturing,
processing, packaging, and/or storing of the Product.
1.6 "FDA" means the United States Food and Drug Administration.
1.7 "GOOD MANUFACTURING PRACTICES" or "CGMP" means the applicable
provisions of guidance for API so designated by the title "Good Manufacturing
Practices" or "Current Good Manufacturing Practices" promulgated under the
Federal Food, Drug and Cosmetic Act or successors thereto.
1.8 "IMPROVEMENT(S)" means any findings, developments, discoveries,
inventions, additions, modifications, formulations, or changes made by LSC or
its affiliates or by Pharm-Eco or its affiliates for services performed
according to the terms of a Project Summary during the term of this Agreement
which are necessary or useful to the development, manufacture or
commercialization of the Product, including, without limitation, new or improved
methods of synthesis, manufacture, ingredients, preparation, presentation, means
of delivery, analysis, packaging or labeling of the Product.
1.9 "LABELING SPECIFICATIONS" means the specifications for labeling to
be used on containers used in shipment of Product, as set forth in the Project
Summary.
1.10 "MASTER PRODUCTION AND CONTROL RECORD" or "MASTER BATCH RECORD"
means a written description of the procedure to be followed for processing a
batch of Product including but not limited to a complete list of all components,
weights and measures, descriptions of Product containers, closures, packaging
materials, and labeling and specifications as required by a Project Summary.
1.11 "MATERIALS" means all chemicals, components, vials, stoppers,
seals, labels, and/or shipping cartons as are otherwise necessary to be used in
the Process and to meet the Product Specifications.
1.12 "NEW DRUG APPLICATION (NDA)" means that application, as specified
in 21 C.F.R. Section 314.50 or successors thereto, submitted to the FDA
requesting approval to market the Product.
1.13 "PACKAGING SPECIFICATIONS" means the specifications for approved
packaging to be used in shipment of Product, as set forth in the Project
Summary.
1.14 "PATENT RIGHTS" means any and all patents and patent applications
(which for the purposes of this Agreement shall be deemed to include
certificates of invention and applications for certificates of invention) to
which Pharm-Eco would be entitled to obtain the rights or the right to file as a
result of Pharm-Eco's performance of services for a Project Summary during the
term of this Agreement and which: (i) relate to the Product; or (ii) claim
Improvements to the Product; or (iii) are divisions, continuations,
continuations-in-part, reissues, renewals,
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extensions, supplementary protection certificates or the like of any such
patents or patent applications, provided that such patents or patent
applications have not been invalidated, cancelled or abandoned.
1.15 "PROCESSING" shall mean processing Product in accordance with the
Master Batch Record for the Product. "PROCESSED" and "PROCESS" shall have
comparable meanings.
1.16 "PRODUCT" shall mean the Drug Substance or API covered by this
Agreement and produced as contemplated by and pursuant to the Project Summary.
1.17 "PROJECT SUMMARY" shall mean a document titled "Project Summary,"
signed by both parties and attached to this Agreement as Exhibit A, which
provides specific details about the work to be performed for LSC by Pharm-Eco.
1.18 "PROJECT TIMELINE" shall mean the timelines estimated in a Project
Summary.
1.19 "REGULATORY APPROVAL" means an approval issued by a regulatory
authority necessary or appropriate to authorize and commence the manufacture,
use, sale, or marketing of the Drug Product, including pricing approval,
toxicology studies, preclinical and clinical trials and IND and NDA filings with
the FDA or other registration dossiers filed with other appropriate regulatory
authorities.
1.20 "PRODUCT SPECIFICATIONS" shall mean the acceptance criteria for
the Product as developed in the course of the Agreement and mutually agreed upon
in writing by the parties from time to time.
The following additional initially capitalized terms are defined in the
referenced Sections of this Agreement:
TERM SECTION
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Agreement Introduction
CDA 10
Developments 6.2
Disclosing Party 10
Excluded Items 6.1
Indemnified Party 9.3
Indemnifying Party 9.3
Inventions 6.3
LSC Introduction
LSC Designee(s) 5.1
Pre-Existing Property / 6.1
Intellectual Property
Proprietary Information 10
Receiving Party 10
Rejected Batch 5.5.2
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Rejection Period 5.5.2
Pharm-Eco Introduction
2. PROCESS VALIDATION AND CLINICAL SUPPLY.
2.1 GENERAL. During the course of this Agreement, each party shall (i)
cooperate with the other party in good faith, particularly with respect to
unknowns or contingencies, in order to achieve the objectives of this Agreement
within the Project Timeline identified in the Project Summary; (ii) furnish,
maintain and preserve suitable and sufficient facilities and personnel for the
work to be accomplished by each party hereunder; and (iii) perform its
obligations hereunder in good faith in a commercially reasonable, diligent and
workmanlike manner and in compliance in all material respects with the
applicable standards, laws, rules and regulations of each and every regulatory
authority having jurisdiction over the activities of each party.
2.2 PROCESS VALIDATION. To the extent expressly required by a Project
Summary, Pharm-Eco shall develop and validate a process for manufacture of the
Product upon the request of LSC and at LSC expense. LSC shall approve the
validation protocol prior to Pharm-Eco's execution or reduction to practice of
such protocol.
2.3 SUPPLY OF PRODUCT USING GOOD MANUFACTURING PRACTICES.
2.3.1 General. To the extent applicable and expressly required
in a Project Summary, Pharm-Eco shall provide research, development and
manufacturing, and packaging the Product at a facility operated in accordance
with FDA regulations, and shall produce the Product in accordance with cGMP,
including without limitation adherence to appropriate quality assurance and
quality control practices. So long and insofar as necessary to enable it to
perform its obligations hereunder, Pharm-Eco shall maintain its Annual
Registration of Drug Establishment (form FDA 2656e or any successor form)
granted by the FDA, updated and in good order, and will make the related license
and copies of all related documents available to LSC and its designees for
inspection upon reasonable prior notice.
2.3.2 Product Specifications. Pharm-Eco agrees that all
Product manufactured under cGMP using a validated process will be delivered to
LSC or an LSC Designee and will meet the Product Specifications.
2.3.3 Master Batch Record. Pharm-Eco shall produce Batches of
cGMP Product in accordance with a Master Batch Record approved in writing by
LSC. Pharm-Eco further agrees that any substantive changes to the Master Batch
Record or the production process must receive written approval of LSC prior to
implementation, provided, however, that any such approvals shall not be
unreasonably withheld by LSC and the parties shall cooperate and act reasonably
and in good faith in connection with their respective activities under this
Section 2.3.3.
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2.4 SELF-AUDIT. Pharm-Eco shall conduct a self-audit to ensure
that it is complying with cGMPs, other applicable laws and regulations,.
2.5 RESPONSIBILITIES RELATED TO REGULATORY APPROVALS.
2.5.1 LSC Responsibilities. LSC shall be responsible for
obtaining all applicable regulatory approvals or permits necessary for the
production, distribution, use, manufacture, marketing and/or sale of the
Product. Additionally, LSC shall be responsible for all other regulatory
requirements which are not specifically assigned to Pharm-Eco in this Agreement,
including the Project Summary, and including the payment of any FDA user fees or
other fees associated with the review and approval to market the Product imposed
by any regulatory agency. LSC agrees to supply Pharm-Eco with any documents,
information, and/or data specified as being LSC's responsibility in this
Agreement, including the Project Summary, in a timely manner so as not to impede
Pharm-Eco's ability to comply with its obligations hereunder.
2.5.2 Pharm-Eco Responsibilities. At LSC's cost and expense,
Pharm-Eco shall provide all reasonably necessary assistance to LSC in its
efforts to obtain and maintain all necessary regulatory approvals and permits
relating to the manufacture of the Product at Pharm-Eco facilities. Without
limiting the foregoing, Pharm-Eco shall procure and provide to LSC such
information and assistance relating to Pharm-Eco's manufacture of the Product as
LSC may reasonably require in connection with any submission relating to a
Regulatory Approval, including without limitation providing LSC with (i) a Drug
Master File for the Product manufactured by Pharm-Eco for LSC review and
approval, as further set forth in the Project Summary; (ii) information
necessary for the CMC Section relating to the Product in any submission relating
to a Regulatory Approval; and (iii) all reports, authorizations, certifications,
methodologies, manufacturing processes and other documentation in the possession
or under the control of Pharm-Eco relating to the Product and developed in the
performance of services under a Project Summary.
3. INSPECTIONS; RECORDS.
3.1 INSPECTION BY LSC. LSC shall have the right, at LSC's cost and
expense and at reasonable times and upon reasonable prior notice, to (i) inspect
facilities used by Pharm-Eco to perform its obligations under this Agreement,
(ii) review manufacturing and quality control records relative to manufacture of
the Product, (iii) audit Pharm-Eco's manufacturing efforts in respect of the
Product for compliance with FDA requirements, and (iv) review any
correspondence, reports, or other documents from Pharm-Eco to the FDA, or from
the FDA to Pharm-Eco, related to the Product. In the event that LSC observes a
condition which causes it to reasonably believe that the Product or its method
of process validation, manufacture, Product Specifications, tests, record
keeping or other matters may not be in compliance with cGMP or other regulatory
standards applicable to the process validation or manufacture of the Product,
Pharm-Eco and LSC shall immediately meet (by conference telephone call or
otherwise as appropriate) to discuss the concerns and will use their best
commercial efforts and cooperate to address such concerns.
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3.2 INSPECTION BY REGULATORY AUTHORITY. At LSC's cost and expense,
Pharm-Eco agrees to permit the FDA and any other relevant regulatory authorities
to inspect any facilities used by Pharm-Eco to perform its obligations under
this Agreement and to cooperate fully with the FDA and such regulatory
authorities in connection with LSC's conduct of any clinical trials relating to
the Product and/or LSC's regulatory filings relating thereto, including
furnishing information to the FDA and such regulatory authorities at LSC's, the
FDA's, or the regulatory authorities' request, as the case may be. If the FDA or
another relevant regulatory authority (i) gives notice to Pharm-Eco that it
intends to perform an inspection of Pharm-Eco's facilities, where such
inspection is directly related to the Product, or (ii) performs such an
inspection directly related to the Product without notice, Pharm-Eco shall
contact LSC by telephone and provide written notice to LSC immediately after
receiving such notice of inspection.
3.3 RECORDS. Pharm-Eco shall maintain records relating to the Project
Summary, in sufficient accounting detail and in good scientific manner
appropriate for financial, patent, research, development and regulatory
purposes, which shall be complete and accurate and shall fully and properly
reflect all work done and results achieved in the performance of this Agreement.
LSC shall have the right, during normal business hours and upon reasonable
notice, to inspect all such applicable records. LSC shall maintain such
information disclosed therein in confidence in accordance with Section 10.
3.4 ACCESS TO PHARM-ECO PERSONNEL AND FACILITIES. At LSC's cost and
expense, LSC shall have the right to arrange for its employees and outside
consultants involved in this Agreement to visit Pharm-Eco at its facilities
during normal business hours and upon reasonable notice, and to discuss the work
under this Agreement and its results in detail with the technical personnel and
consultants of Pharm-Eco, as the case may be and to perform inspections pursuant
to Section 3.1.
4. COMPENSATION.
4.1 The compensation to be paid by LSC to Pharm-Eco during the term of
this Agreement for all projects, validations, other services, and each Batch of
Product shall be as specified in the Project Summary. To the extent a deposit is
required by a Project Summary, LSC shall pay Pharm-Eco such deposit promptly
upon execution of the Project Summary The deposit shall be credited
proportionately against each invoice payable thereafter for such Project Summary
in accordance with the percentage of the Project then completed.
4.2 Payment for Materials. To the extent materials are estimated
separately in a Project summary, materials for such Project will be charged at
cost plus a handling charge in an amount equal to 8% of such cost. Such
estimates for the materials in the relevant Project Summary will not be exceeded
unless approved in writing by LSC.
4.3 Invoices. Unless otherwise agreed in a Project Summary, LSC shall
pay Pharm-Eco for amounts due hereunder no later than thirty days from the date
of receipt of itemized invoices. In the event any payment is not made within
such thirty (30) day period, Pharm-Eco shall be entitled, among its other
rights, to cease work and stop deliveries until such payment, including any
interest, is made. Such invoices to be rendered to LSC on a monthly basis by
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Pharm-Eco for the following items:
4.3.1 Manufacturing Charges. Charges as agreed between the Parties
and specified in the relevant Project Summary.
4.3.2 Research Charges. Charges for services performed shall be
charged at the rate specified in the applicable Project
Summary.
4.3.3 Waste. Waste disposal charges as specified in the relevant
Project Summary at cost plus an 8% handling charge, including
all close-out costs for a Project.
4.3.4 Travel. Expenses for travel incurred by Pharm-Eco personnel
in connection with the Project. Pharm-Eco will request prior
LSC approval for any travel expenses.
4.3.5 Materials, Expendables and Supplies, Special Equipment and
Glassware. Charges for materials, including without
limitation expendables, supplies, special equipment and
glassware, estimated in a Project Summary. Pharm-Eco will
request prior LSC approval for expenditures in excess of the
estimates provided in the Project Summary.
4.3.6 Additional labor costs. LSC will pay hourly labor costs for
(i) services that are not provided for in a Project Summary
which are are pre-authorized by LSC in writing and (ii)
additional reasonable labor time necessary for the conduct of
an inspection by a regulatory authority that is specific to
the Product.
4.3.7 Expenses for personnel time, travel, legal fees and other
expenses incurred at the request of LSC in patent matters,
litigation or regulatory matters that are not specified in the
applicable Project Summary, except to the extent such expenses
arise out of the negligence, willful wrongdoing of Pharm-Eco
or its breach of its obligations under this Agreement.
4.3.8 Costs incurred for other services in furtherance of the
Projects, including but not limited to costs incurred by
Pharm-Eco for outside chemical or analytical services, as
required in the applicable Project Summary or as approved by
LSC in writing (email is acceptable).
4.3.9 Costs incurred for shipping and freight of API that are
reasonable and consistent with industry standards for shipping
similar materials under similar conditions.
4.3.10 All duty, sales, use, excise or other taxes, whether Federal,
State or local, applicable to any Project Summary.
4.4 Late Payments. In addition to its other rights, Pharm-Eco shall be
entitled to interest at the rate of one and one-half percent (1.50%) per month
on any payment which is not made when due.
5. SHIPMENT; INSPECTION; ACCEPTANCE.
5.1 SHIPMENT. All Product shall be shipped in the manner and to the
location specified by LSC or entities that LSC has designated in a signed
writing to receive Product ("LSC DESIGNEE(S)"). All shipments of the Product
shall be delivered as specified by LSC or an LSC Designee to a specified
facility, or, as otherwise agreed to by the parties. Delivery terms shall be
F.O.B. Pharm-Eco's research and manufacturing facility. Title, possession, risk
of loss, risk of damage and all forward costs and expenses shall pass to and be
borne by LSC upon
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delivery to LSC's designated carrier, or if none has been designated in writing,
to a nationally recognized carrier.
5.2 PACKAGING AND LABELING. Unless otherwise specified by LSC, all
Product supplied to LSC or any LSC Designee hereunder shall conform with the
following packaging and labeling requirements.
5.2.1 Packaging. Pharm-Eco shall package Product in containers
in accordance with the Packaging Specifications as provided in a Project
Summary.
5.2.2 Labeling. Prior to shipping Product, Pharm-Eco will
label all containers in accordance with the Labeling Specifications as provided
in a Project Summary.
5.3 DOCUMENTATION TO ACCOMPANY EACH BATCH. In conjunction with each
Batch of Product that it ships, Pharm-Eco shall provide LSC or the applicable
LSC Designee with the lot file, including, but not limited to, a Certificate of
Analysis, a Batch Record, any Deviation Report(s), any applicable Materials and
Product test reports, a Materials Safety and Data Sheet, and a certificate of
compliance (the "CERTIFICATE OF COMPLIANCE") certifying that such Batch has met
all of the Product Specifications.
5.4 INVENTORY IN QUARANTINE. LSC may request in writing that Pharm-Eco
ship a Batch of Product from Pharm-Eco's inventory in quarantine, prior to the
issuance by Pharm-Eco's quality assurance department of an appropriate
Certificate of Compliance; however, LSC agrees not to introduce any such Product
into interstate commerce until the receipt of a proper quality control release
applicable to the Product. LSC shall indemnify and hold Pharm-Eco harmless from
any and all losses, damages, claims, or costs, including reasonable attorney's
fees, which Pharm-Eco may suffer or incur prior to Pharm-Eco's providing a
Certificate of Compliance with respect to such Product as a result of and
arising out of the shipment or use of such Product pursuant to the request of
LSC hereunder.
5.5 INSPECTION, ACCEPTANCE, AND REJECTION OF PRODUCT.
5.5.1 Inspection. LSC or an LSC Designee may, at its option,
inspect a Batch upon receipt thereof. Such inspection may include, without
limitation, a quality control analysis to determine whether the Batch meets the
requirements of this Agreement, including without limitation the Product
Specifications and the Certificate of Compliance corresponding to such Batch. At
LSC's expense, LSC may use contract facilities to conduct such analysis.
Pharm-Eco shall retain samples of each Batch and, LSC may, at its sole
discretion, maintain samples of each Batch for retention purposes in accordance
with its standard operating procedures.
5.5.2 Rejection. LSC may reject any Batch that fails to meet
the Product Specifications ("REJECTED BATCH") . To properly reject a Batch, LSC
shall, subsequent to receipt of the Batch (not to exceed forty-five (45) days
from receipt) (the "REJECTION PERIOD"), notify Pharm-Eco in writing of LSC's
rejection of such Batch, stating in detail the reason for such rejection. LSC
shall provide Pharm-Eco the opportunity to inspect the Rejected Batch prior to
return to Pharm-Eco. LSC shall return the Rejected Batch to Pharm-Eco, LSC or
its designate to
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Pharm-Eco, freight prepaid. Pharm-Eco will replace the Rejected Batch or provide
LSC with a credit to be applied against LSC's future payments equal to the costs
paid to Pharm-Eco relating to the manufacture of the Rejected Batch and the
return freight charges paid by LSC for a properly Rejected Batch. Pharm-Eco
shall pay shipping charges in connection with shipment of the replaced Batch to
LSC for a properly Rejected Batch.
6. OWNERSHIP.
6.1 OWNERSHIP OF PRE-EXISTING PROPERTY AND PRE-EXISTING INTELLECTUAL
PROPERTY. Each party retains all right, title and interest in any property,
materials, or information provided to the other party under this Agreement,
including, with respect to LSC, the Product and any associated intellectual
property rights, and with respect to both parties, any general pharmaceutical
knowledge, techniques and technologies developed or acquired by such party prior
to performing any work under this Agreement (the "EXCLUDED ITEMS").
6.2 OWNERSHIP OF CREATED PROPERTY AND ASSOCIATED INTELLECTUAL PROPERTY.
All work, inventions, discoveries, developments, findings reports and drawings
created or conceived in the performance of services relating to a Project
Summary under this Agreement, including, without limitation, any Patent Rights
("DEVELOPMENTS"), shall be the property of LSC, and Pharm-Eco hereby assigns,
transfers and conveys all of its right, title and interest in and to any and all
Developments to LSC. Notwithstanding the foregoing, Developments shall not
include generally applicable testing methods, apparatus, practices, equipment,
procedures or methodology developed solely by Pharm-Eco hereunder unless used
exclusively to test or manufacture Product.
6.3 REPORTS OF INVENTIONS. Pharm-Eco shall promptly report in writing
to LSC any subject matter resulting from the work performed under this
Agreement. Pharm-Eco shall provide sufficient detail in such report to permit
LSC to assess patentability and determine inventorship for any inventions for
which Patent Rights may be obtained or applied for by LSC. LSC shall in its sole
discretion and at its own expense have the right to obtain Patent Rights on such
inventions and maintain, correct and extend the term as provided by law for any
such Patent Rights.
6.4 ASSISTANCE. At LSC's cost and expense, Pharm-Eco shall execute and
deliver such instruments and take such other action as may be requested by LSC
to perfect or protect LSC's rights in the Developments and to confirm and
implement the ownership rights and assignments contemplated in this Section 6,
and assist LSC and its nominees in every proper way to secure, maintain, protect
and defend for LSC's own benefit all such rights in the Developments in any and
all countries. Pharm-Eco shall cooperate with LSC in the filing and prosecution
of any copyright or patent applications that LSC may elect to file on the
Developments or inventions and designs relating to the Developments. LSC will
reimburse Pharm-Eco for properly documented and commercially reasonable costs
and fees incurred by Pharm-Eco in providing the foregoing assistance.
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7. REPRESENTATIONS AND WARRANTIES.
7.1 BY LSC. LSC represents and warrants that:
7.1.1 LSC is free to enter into this Agreement, and has full
legal power and authority to enter into and perform under this Agreement; and
7.1.2 LSC's entry into and performance under this Agreement
does not and will not violate any rights of or obligations of LSC to any third
party.
7.1.3 LSC is responsible for establishing the clinical safety
or efficacy of any process developed hereunder or of any API or other material
manufactured or delivered by Pharm-Eco hereunder.
7.2 BY PHARM-ECO. Pharm-Eco represents and warrants that:
7.2.1 Pharm-Eco is free to enter into this Agreement, and has
full legal power and authority to enter into and perform under this Agreement;
7.2.2 Pharm-Eco's entry into and performance under this
Agreement does not and will not violate any rights of or obligations of
Pharm-Eco to any third party;
7.2.3 at the time of delivery of any Product to LSC such
Product (i) will have been manufactured and shipped in accordance with (a) cGMP,
if required by a Project Summary, and all other applicable laws, rules,
regulations and requirements, (b) unless released by Pharm-Eco pursuant to
Section 5.4, the Product Specifications and quality control testing procedures
for the Product, (c) the applicable CMC Section, and (d) the Master Batch Record
and Batch Record; and (ii) will not be adulterated or misbranded under the laws
of any regulatory authority; and
7.2.4 Pharm-Eco will not have employed or otherwise used the
services of any individual who has been disbarred under Section 306(a) or (b) of
the Federal Food, Drug, and Cosmetic Act, or successors thereto, to perform its
obligations under this Agreement.
7.3 DISCLAIMER OF WARRANTIES. WITH THE EXCEPTION OF THE WARRANTIES SET
FORTH IN SECTIONS 7.1 AND 7.2, ALL INFORMATION, PRODUCTS, MATERIALS, TECHNOLOGY
AND OTHER ITEMS PROVIDED BY EITHER PARTY TO THE OTHER PARTY OR ITS DESIGNEES
UNDER THIS AGREEMENT ARE PROVIDED BY EACH PARTY AS IS WITHOUT WARRANTY OF ANY
KIND, AND EACH PARTY ASSUMES THE ENTIRE RISK AS TO THE RESULTS AND PERFORMANCE
OF ALL SUCH INFORMATION, PRODUCTS, MATERIALS, TECHNOLOGY AND ITEMS. EXCEPT FOR
THOSE WARRANTIES SET FORTH IN SECTION 7.1 AND 7.2, EACH PARTY DISCLAIMS ALL
WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT
TO SUCH PARTY'S PERFORMANCE UNDER THIS AGREEMENT AND WITH RESPECT TO THE
INFORMATION, PRODUCTS, MATERIALS, TECHNOLOGY AND OTHER ITEMS PROVIDED BY SUCH
PARTY TO THE OTHER PARTY OR ITS DESIGNEES UNDER THIS AGREEMENT. ALSO, EXCEPT TO
THE EXTENT EXPRESSLY SET FORTH IN SECTION 7.1 AND 7.2, NEITHER PARTY MAKES ANY
WARRANTY OF TITLE, OF
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NON-INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS, OR OF THE VALIDITY OR
ENFORCEABILITY OF ANY PATENTS OR PATENT APPLICATIONS.
8. LIMITATION ON LIABILITY.
LSC' SOLE REMEDY FOR BREACH OF SECTION 7.2 HEREOF BY PHARM-ECO SHALL BE REPAIR
OF THE DEFECTIVE API, OR IF REPAIR IS NOT FEASIBLE, REPLACEMENT OF THE DEFECTIVE
API, OR IF REPLACEMENT IS NOT FEASIBLE, REFUND THE PRICE PAID TO PHARM-ECO FOR
THE MANUFACTURE OF SUCH API.
IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR TO ANY
THIRD PARTY FOR ANY SPECIAL, INCIDENTAL, INDIRECT, PUNITIVE, OR CONSEQUENTIAL
DAMAGES, INCLUDING WITHOUT LIMITATION DAMAGES FOR LOST PROFITS, LOSS OF USE, OR
BUSINESS INTERRUPTION, ARISING OUT OF OR IN ANY WAY RELATED TO SUCH PARTY'S
PERFORMANCE UNDER THIS AGREEMENT, OR OTHERWISE IN CONNECTION WITH ANY PROVISION
OF THIS AGREEMENT, EVEN IN THE EVENT OF THE FAULT, TORT (INCLUDING NEGLIGENCE),
STRICT LIABILITY, BREACH OF CONTRACT, BREACH OF WARRANTY, OR BREACH OF STATUTORY
DUTY, AND EVEN IF THE PARTY AGAINST WHICH ANY SUCH DAMAGES ARE CLAIMED HAS BEEN
ADVISED OF OR COULD HAVE FORESEEN THE POSSIBILITY OF SUCH DAMAGES.
9. INDEMNIFICATION.
9.1 INDEMNIFICATION BY PHARM-ECO. Pharm-Eco shall indemnify, pay the
defense costs of, and hold harmless LSC and its successors, officers, directors,
agents and employees from any and all actions, causes of action, claims,
demands, costs, losses, liabilities, expenses and damages (including reasonable
attorneys' fees) arising from Pharm-Eco's willful misconduct or negligence in
the performance of services under this Agreement (except to the extent due to
LSC's negligence, willful misconduct or its breach of this Agreement). Any
indemnification of LSC by Pharm-Eco under this Section 9.1 shall not exceed the
total amount of total compensation payable by LSC under this Agreement, which is
$566,500. In addition, Pharm- Eco shall indemnify and hold harmless LSC from any
workmen's compensation claim or unemployment insurance claim made by Pharm-Eco
or on Pharm-Eco' behalf. LSC shall give prompt notice to Pharm-Eco of any claim
to which this paragraph relates.
9.2 INDEMNIFICATION BY LSC. LSC shall indemnify, pay the defense costs
of, and hold harmless Pharm-Eco and its successors, officers, directors and
employees from any and all actions, causes of action, claims, demands, costs,
losses, liabilities, expenses and damages (including reasonable attorneys' fees)
arising out of any third party claim (i) asserted by any participant in any
clinical trial of the Product conducted by or for LSC (except to the extent such
losses are due to Pharm-Eco's negligence, willful misconduct in the performance
of services under this Agreement); or (ii) which, if true, would represent a
breach by LSC of its obligations or warranties under this Agreement.
9.3 CONDITIONS. Each party's (the "INDEMNIFYING PARTY") indemnity
obligations under Sections 9.1 and 9.2 are conditioned upon the other party (the
"INDEMNIFIED PARTY")
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promptly notifying the Indemnifying Party of any such claim or proceeding in
writing, tendering to the Indemnifying Party the opportunity to defend or settle
such a claim or proceeding at its expense and under its control and cooperating
with the Indemnifying Party (at the reasonable expense of the Indemnifying
Party) in defending or settling any such claim or proceeding.
10. CONFIDENTIALITY.
All information and materials received by a Party hereto (the
"RECEIVING PARTY") from the other Party (the "DISCLOSING PARTY") during the term
of this Agreement, including without limitation all specifications and physical
materials provided by the Disclosing Party to the Receiving Party, shall be
deemed to be "PROPRIETARY INFORMATION" of the Disclosing Party for purposes of
this Agreement and shall be governed by the Confidential Disclosure Agreement
between the parties dated December 4, 2004 (the "CDA"). For purposes of
clarification, the parties agree that all Developments will be treated as
Proprietary Information of LSC for purposes of the CDA.
11. TERM; TERMINATION; EFFECT OF TERMINATION.
11.1 TERM. This Agreement shall commence on the Effective Date and
shall terminate on the later of three years from the Effective Date or the
completion of all pending Project Summaries.
11.2 TERMINATION.
11.2.1 For Convenience. Unless otherwise provided in a Project
Summary, LSC may terminate this Agreement in its sole discretion, upon thirty
(30) days written notice, at any time and without further obligation to
Pharm-Eco.
11.2.2 For Cause. This Agreement may be terminated by either
party by written notice delivered to the other party at any time during the term
of this Agreement as follows:
(a) immediately upon written notice at any time if
the other party is in breach of the CDA;
(b) if the other party is in breach of its material
obligations hereunder, other than under the CDA, and the other party has not
cured such breach within thirty (30) days after written notice requesting cure
of such a breach; or
(c) if the other party files or institutes
bankruptcy, reorganization, liquidation or receivership proceedings, or if the
other party assigns a substantial portion of its assets for the benefit of
creditors; provided, however, in the case of any involuntary bankruptcy
proceeding such right to terminate shall only become effective if the party
consents to the involuntary bankruptcy or such proceeding is not dismissed
within ninety (90) days after the filing thereof.
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11.3 EFFECT OF TERMINATION.
11.3.1 Return of Materials; Delivery of Work in Progress. Upon
termination or expiration of this Agreement for any reason by either party, and
irrespective of any claims, rights or remedies either party may have against the
other under this Agreement, Pharm-Eco agrees to deliver immediately to LSC: (i)
subject Pharm-Eco's receipt of payment for all expenses and charges for
materials and services due provided through the effective termination date, all
work product (including partial results, drafts and notes, in all tangible media
including electronic format, works in progress and patents, know-how and other
intellectual property) created or worked on by Pharm-Eco in, and relating
directly to, the performance of its obligations under this Agreement (provided
that nothing herein shall be deemed to require Pharm-Eco to deliver or transfer
its interest in its Excluded Items); (ii) any inventory of Product or precursors
thereto; (iii) any materials received from LSC or other sources in order for
Pharm-Eco to perform its obligations under this Agreement; (iv) all equipment
procured by Pharm-Eco (free of liens or other encumbrances and to be shipped to
LSC in accordance with LSC's instructions at LSC's cost and risk),; and (v) a
report in reasonable detail outlining the status of the Pharm-Eco' progress in
performing its obligations under this Agreement.
11.3.2 Survival. In the event of termination or expiration of
this Agreement: (i) Sections 1, 2.6, 3.1-3.3, 5, 6-10, and 12-14 shall survive;
and (ii) neither Party shall be liable to the other for damages of any sort
resulting solely from terminating this Agreement in accordance with its terms.
11.3.3 Other Rights Not Affected. The rights and remedies
provided in this Section 11 will not be exclusive and are in addition to any
other rights and remedies provided by law or this Agreement.
12. NOTICES.
All notices and requests in connection with this Agreement shall be
deemed given as of the day they are received either by messenger, delivery
service, or in the United States of America mails, postage prepaid, certified or
registered, return receipt requested, and addressed as follows:
To Pharm-Eco: To LSC:
Pharm-Eco Light Sciences Corporation
00 Xxxxxx Xx. 00000 XX Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
Attention:General Manager Attention: Legal Counsel
Phone: 000.000.0000 Phone: (000) 000-0000
Fax: 000.000.0000 Fax: (000) 000-0000
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with copy to:
Xxxxxxx Xxxxxxx
North American Corporate
Suite 600
000 Xxxxx Xxxx Xxxxx
Xxxxx, XX 00000-0000
Attn: Vice President and General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
13. INSURANCE.
LSC and Pharm-Eco each shall maintain product liability insurance with
respect to development, manufacture and distribution of Product in such amount
as is customarily maintained in the industry with respect to products similar in
nature to the Product. If LSC obtains product liability insurance from a third
party insurance carrier, Pharm-Eco shall, if possible, be named as an additional
insured on any such external insurance policy. LSC shall provide Pharm-Eco
coverage against product liability claims arising in connection with the sale of
the Product as if Pharm-Eco were an additional insured under any self-insurance
program assuming no retention of liability for costs, expenses, claims or
damages by LSC. Each party shall promptly upon request from time to time provide
the other party with a certificate of insurance for coverage required hereunder.
14. MISCELLANEOUS.
14.1 INDEPENDENT CONTRACTORS. Nothing in this Agreement shall be
construed as creating an agency, partnership, joint venture, franchise, or
employment relationship between the parties. Neither party shall have the
authority to make any statements, representations or commitments of any kind or
to take any action binding on the other except as expressly authorized in
writing by the party to be bound. Neither party shall be liable for any personal
or business expense of the other party, except as agreed to in writing by the
parties prior to incurring such expense, and each party is prohibited from
incurring any liabilities or expenses on behalf of the other party except as
expressly provided hereunder.
14.2 ASSIGNMENT. This Agreement may not be assigned or otherwise
transferred, nor, except as expressly provided hereunder, may any right or
obligations hereunder be assigned or transferred, by either party without the
consent of the other party; provided, however, that LSC may, without such
consent, assign this Agreement and its rights and obligations hereunder in
connection with the transfer or sale of all or substantially all of its assets
related to its business, or in the event of its merger or consolidation or
change in control or similar transaction.
14.3 SEVERABILITY. If any provision of this Agreement or its
application is construed to be invalid or unenforceable, then all other
provisions and their application will not be affected and will be fully
enforceable without regard to the invalid or unenforceable provision. If any
provision in this Agreement is determined to be unenforceable in equity because
of its scope,
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duration, geographical area or other factor, then the court making that
determination will have the power to reduce or limit such scope, duration, area
or other factor, and such provision will be then enforceable in equity in its
reduced or limited form.
14.4 ARBITRATION. Any disputes arising between the parties relating to,
arising out of or in any way connected with this Agreement or any term or
condition hereof, or the performance by either party of its obligations
hereunder, whether before or after termination of the Agreement, shall be
resolved by binding arbitration. In the event a party elects to pursue
arbitration proceedings, it shall give written notice to that effect to the
other party. The party giving such notice shall refrain from instituting the
arbitration proceedings for a period of sixty (60) days following the other
party's receipt of such notice. During such period, the parties shall make good
faith efforts to amicably resolve the dispute without arbitration. Any
arbitration hereunder shall be conducted under the Rules of Arbitration of the
American Arbitration Association. Each such arbitration shall be conducted by a
single mutually-acceptable arbitrator that is knowledgeable with respect to the
subject matter of this Agreement. Any such arbitration shall be held in New
York, New York, and the arbitrator shall apply New York law, without regard to
its conflicts of rules. The arbitrator shall have the authority to direct the
parties as to the manner in which the parties shall resolve the disputed issues,
to render a final decision with respect to such disputed issues, or to grant
specific performance with respect to any such disputed issue. Judgment upon the
award so rendered may be entered in any court having jurisdiction or application
may be made to such court for judicial acceptance of any award and an order of
enforcement, as the case may be. Nothing in this Section 14.4 shall be construed
to preclude either party from seeking provisional remedies, including but not
limited to, temporary restraining orders and preliminary injunctions, from any
court of competent jurisdiction, in order to protect its rights pending
arbitration, but such preliminary relief shall not be sought as a means of
avoiding arbitration. In no event shall a demand for arbitration be made after
the date when institution of a legal or equitable proceeding based on such
claim, dispute or other matter in question would be barred by the applicable
statute of limitations. The prevailing party in any legal or arbitration action
shall be entitled, in addition to any other rights and remedies it may have, to
reimbursement for its expenses incurred thereby, including but not limited to
court costs and reasonable attorney's fees.
14.5 COMPLETE AGREEMENT; AMENDMENTS; WAIVER. This Agreement, including
any Exhibits hereto, each of which is explicitly incorporated and made a part of
this Agreement, and together with the CDA, constitutes the entire agreement
between the parties with respect to the subject matter hereof and merges all
prior discussions between them with respect to such subject matter. It shall not
be modified except by a written agreement dated subsequent to the date of this
Agreement and signed by both LSC and Pharm-Eco. None of the provisions of this
Agreement shall be deemed to have been waived by any act or acquiescence on the
part of either party, its agents, or employees, but only by an instrument in
writing signed by an authorized officer of such party. No waiver of any
provision of this Agreement shall constitute a waiver of any other provision(s)
or of the same provision on another occasion.
14.6 COUNTERPARTS. The 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.
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IN WITNESS WHEREOF, the parties have executed this Agreement.
"Pharm-Eco" "LSC"
XXXXXXX XXXXXXX LIGHT SCIENCES CORPORATION
PHARMACEUTICAL MATERIALS, INC.
By Pharm-Eco By Light Sciences Corporation
By: /s/ X.X. XXXX By: /s/ XXXXXX X. XXXXXXX
---------------------------- ---------------------------
Name: X.X. Xxxx, Ph.D. Name: Xxxxxx X. Xxxxxxx, Ph.D.
Title: V.P. and General Manager Title: President and CEO
Address: 00 Xxxxxx Xxxx Address: 00000 XX Xxxxxxx Xxxxxx, Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000 200
Xxxxxxxxxx, XX 00000
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