EXHIBIT 10.6
EXECUTION COPY
COMPONENT SUPPLY AGREEMENT
Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.
THIS SUPPLY AGREEMENT (this "Agreement") is made as of July 28, 2000
by and among Endeavor Pharmaceuticals Inc. ("Endeavor"), Berlex Laboratories,
Inc. ("Berlex"), and Berlichem, Inc. ("Berlichem").
RECITALS
WHEREAS, Endeavor and Berlex are parties to a License, Development,
and Regulatory Filing Agreement dated April 25, 1994, as amended, (the
"Development Agreement") relating to certain product rights and supply
obligations by and between the parties hereto;
WHEREAS, the parties now wish to terminate the Development Agreement
and the rights and obligations therein;
WHEREAS, Endeavor is currently developing a multi-component oral,
synthetic conjugated estrogens product for use in hormone replacement therapy
(the "CE Product") which utilizes finished active pharmaceutical ingredient
("API") provided by Organics/LaGrange, Inc. ("OLG"), and which is the subject
of an Investigational New Drug exemption ("IND");
WHEREAS, an Affiliate (as defined herein) of Berlex produces Delta 8,
9 Dehydroestrone (the "Component") which is supplied to OLG as an intermediate
Component of the API; and
WHEREAS, the parties wish to terminate the Development Agreement and
replace the Development Agreement with this Agreement relating to Berlex's
supply of the Component to Endeavor (through Berlichem) and certain
co-promotion rights of Berlex with respect to the CE Product;
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the mutual convenants contained
herein, the parties hereto agree as follows:
A. Definitions. The following terms, when capitalized, shall have the
following meanings when used in this Agreement:
"Affiliate" shall have the meaning set forth in Section 4(a).
"ANDA" shall have the meaning set forth in Section 4(b).
"API" shall have the meaning set forth in the recitals to this
Agreement.
"CE Product" shall have the meaning set forth in the recitals to this
Agreement.
"Component" shall have the meaning set forth in the recitals to this
Agreement.
"Confidential Information" shall have the meaning set forth in Section
16.
"Development Agreement" shall have the meaning set forth in the
recitals to this Agreement.
"FDA" shall mean the United States Food and Drug Administration.
"IND" shall have the meaning set forth in the recitals to this
Agreement.
"MPM" shall mean MPM Asset Management.
"NDA" shall have the meaning set forth in Section 4(b).
"OLG" shall have the meaning set forth in the recitals to this
Agreement.
"Promissory Note" shall have the meaning set forth in Section 14.
"SBVC" shall have the meaning set forth in Section 14.
"Specifications" shall have the meaning set forth in Section 1(a).
1. Supply of Component; Component Specifications.
(a) Subject to the terms and conditions set forth in this
Agreement, Berlex, through Berlichem, shall supply Endeavor's
requirements of Component during the term of this Agreement.
Endeavor shall purchase its requirements of Component from
Berlichem. The Component supplied by Berlex to Endeavor
through Berlichem shall be manufactured by an Affiliate of
Berlex. The Component to be supplied by Berlex hereunder
shall conform to the specifications contained in Schedule 1
to this Agreement (the "Specifications").
(b) Endeavor shall have the right (subject to obtaining approval
of FDA, if necessary), to change, with Berlex's consent
(which shall not be unreasonably withheld) end upon six (6)
months' advance written notice to Berlex, the Specifications:
provided, however, that (a) any change which Berlex is
reasonably able to implement in less than six (6) months
shall be implemented within the time period agreed upon by
Berlex and Endeavor, and (b) any such change occasioned by
the requirements of law, safety considerations, or the
request of FDA shall be implemented as soon as is reasonably
possible. In the event of any change described above, (A)
Berlex's inventory of obsolete materials (which amounts shall
be reasonable in light of Endeavor's forecasts) and
reasonable disposal costs thereof shall be charged to
Endeavor, (B) funding for capital improvements and/or
expansion required by the change (and of which Endeavor is
notified in advance) shall be provided by Endeavor, (C) any
other incremental cost incurred by Berlex or a Berlex
Affiliate as a consequence of such change in Specifications
shall be charged to Endeavor, and (D) Component pricing shall
be adjusted to reflect any increase or decrease in costs
resulting from such change in the Specifications. Berlex
shall not be required to accept any change in Specifications
requested by Endeavor which is outside of the technical
capability of its Affiliate responsible for production of
Component, or which would require a capital expenditure on
the part of such Affiliate.
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(c) Berlex's Affiliate responsible for production of Component
shall permit Endeavor to inspect the production facilities
producing the Component, to review the production and quality
control procedures and records used to produce the Component
and to obtain such other information as Endeavor may
reasonably request to assure compliance with the
Specifications and Endeavor's regulatory obligations. Such
inspections shall take place no more frequently than once per
calendar year, and shall take place only on reasonable
advance written notice to the Berlex Affiliate responsible
for production of Component. The Berlex Affiliate responsible
for production of the Component shall have the right to
exclude proprietary processes and information from the
inspection. Such inspections shall be carried out for
Endeavor by individuals identified in advance to the Berlex
Affiliate responsibility for production, such identification
to include the scientific specialties of such individuals.
The number of inspectors shall be limited as reasonably
requested by the Berlex Affiliate responsible for production
of Component. The individuals carrying out the inspection on
behalf of Endeavor shall he reasonably satisfactory to the
Berlex Affiliate responsible for production of Component.
Process engineers shall not be included in the list of
individuals to inspect the production facilities.
(d) Berlex agrees that its Affiliate responsible for production
of Component shall manufacture the Component in compliance
with the Specifications and all applicable laws and
regulations, including, but not limited to, the FDA's current
Good Manufacturing Practices regulations. Berlex agrees that
its Affiliate responsible for production of the Component
shall keep current any drug master file submitted to the FDA
by or on behalf of such Berlex Affiliate relating to the
Component that is referenced by Endeavor in an NDA; provided,
however, that such Berlex Affiliate shall not be required to
Incur costs to keep such drug master file current that are
commercially unreasonably in light of the quantity of
Component ordered and forecasted by Endeavor unless the
parties are able to agree on a method of having such costs
borne by Endeavor. Berlex shall notify Endeavor in advance of
any material change in the methods of manufacture, quality
control procedures or the source or specifications of
materials used to produce the Component, and shall not make
any material change in such methods of manufacture, quality
control procedures or source or specification of materials
used to produce the Component without sufficient prior notice
to Endeavor to permit Endeavor to submit/secure necessary FDA
notifications or approvals. Berlex shall not make any
material change in the methods of manufacture, quality
control procedures or the source or specifications of
materials used to produce the Component that would cause a
market interrupting of the marketed product incorporating
API.
2. Chemical Structure. Berlex represents and warrants to Endeavor that
the chemical structure of the Component will be as shown in Schedule 2
to this Agreement. Berlex agrees to disclose to Endeavor's outside
patent counsel and outside patent counsel to Endeavor's Series E
Investor MPM (under binder of confidentiality reasonably satisfactory
to Berlex) such information as is available to Berlex regarding the
synthesis and preparation of the Component so that outside patent
counsel for Endeavor and MPM can determine whether the receipt and use
of the Component by Endeavor infringes third party intellectual
property rights. Such disclosure shall occur once, and outside patent
counsel for Endeavor and MPM shall not retain a copy of the
information disclosed by Berlex.
3. Forecasts and Purchase Orders. Berlex will supply Endeavor's
requirements for the Component in such quantities as Endeavor may
order, subject to the qualifications contained in this Section. (a)
Within ten (10) business days following the execution of this
Agreement, Endeavor shall
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submit to Berlichem a forecast of the quantities of Component that
Endeavor expects to order during the remainder of the year 2000.
Purchase Orders for the remainder of the year 2000 shall be submitted
by Endeavor to Berlichem no less than sixty (60) days before the
delivery date specified therein. During calendar year 2000, Endeavor
shall not submit orders in excess of the capacity to produce Component
of Berlex's Affiliate responsible for production of Component. (b) By
September 1st of 2000, and September 1st of each calendar year
thereafter, Endeavor shall submit to Berlichem a forecast of the
quantities of Component that Endeavor expects to order during the
following calendar year. At least sixty (60) days before the end of
each calendar quarter, Endeavor will provide Berlex with a firm
purchase order setting forth the quantity of Component to be delivered
to Endeavor during the next calendar quarter, specifying the delivery
date or delivery dates, together with an updated forecast for the
following three calendar quarters. Berlichem shall maintain production
capacity to deliver the Component in quantities up to * of Endeavor's
most recent Component forecast for the applicable calendar year. If
Endeavor orders more than * of its forecast for any calendar year,
Berlichem will be obligated to supply the Component in excess of * of
forecast only to the extent its Affiliate responsible for production
of Component can practicably produce and supply such additional
amounts in a commercially reasonable manner. If during any calendar
year Endeavor orders less than * of its most recent forecast for such
calendar year, then Berlichem shall invoice Endeavor for the
difference between the quantity of Component ordered by Endeavor
during such calendar year and * of the quantity of Component most
recently forecast by Endeavor for such calendar year, which invoice
Endeavor shall pay within thirty (30) days of receipt, Berlichem shall
notify Endeavor of the standard batch sizes for Component of its
Affiliate responsible for production of the Component, and Endeavor
shall place its orders for Component in terms of such batch sizes.
4. Exclusivity.
(a) Berlex shall not sell the Component to any purchaser in the
United States for inclusion in the manufacture of a product
for hormone replacement therapy other than Endeavor or any
designee or licensee of Endeavor; provided, however, that
Berlex will have the right to use the Component to
manufacture, or have manufactured for it, finished products
for any indication containing the Component for sale in the
United States only by Berlex or an Affiliate of Berlex.
Berlex shall be free to supply the Component and products
containing the Component to purchasers that only allow the
sale of the Component, such products or any other products
produced therefrom in any country other than the United
States, or within the United States for a use other than
production of a product for hormone replacement therapy. When
used in capitalized form in this Agreement, "Affiliate"
means, as to any person or entity, any other person or entity
that directly or indirectly controls, is controlled by, or is
under common control with such entity.
(b) If Berlex or on Affiliate of Berlex elects to market an oral,
synthetic conjugated estrogens product for hormone
replacement therapy containing the Component in the United
States, then neither Berlex nor any affiliate of Berlex shall
file an abbreviated new drug application ("ANDA") in the
United States referencing any Endeavor new drug application
("NDA") until not less than three (3) years have elapsed
after the initial FDA approval of the Endeavor NDA. This
clause (b) shall cease to bind Berlex with respect to any
Endeavor NDA that is referenced in an ANDA filed with FDA by
any third party that is not an Affiliate of Berlex or in any
way acting on behalf of Berlex or a Berlex Affiliate.
(c) (i) If Endeavor does not purchase at least * of the Component
in any calendar year, commencing with calendar year 2006,
then following the conclusion of such year the
* Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
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exclusivity obligations of Berlex set forth in Section 4(a)
shall terminate, and Berlex and its Affiliates shall have the
right to sell the Component to other customers in the United
States. (ii) Berlex's exclusivity obligations set forth in
Section 4(a) shall terminate in the event that Endeavor does
not have an NDA accepted for filing by FDA for an oral
synthetic conjugated estrogens product (for any indication)
by December 31, 2003, (iii) Berlex's exclusivity obligations
set forth in Section 4(a) shall terminate on December 31,
2010, and shall thereafter renew automatically for periods of
two calendar years unless Berlex provides written notice to
Endeavor of non-renewal at least six (6) months prior to
December 31, 2007, or six (6) months prior to the conclusion
of any two calendar year renewal period.
(d) Irrespective of the foregoing provisions of this Section, if
Berlex exercises its option under Section 10 hereof to
co-promote the CE Product, then Berlex will supply the
Component exclusively to Endeavor or Endeavor's designee for
use in a product for hormone replacement therapy in the
United States, and to no other purchaser for use in a product
for hormone replacement therapy in the United States, and
Berlex shall cease any use of the Component in a product for
hormone replacement therapy in the United States. For the
avoidance of doubt, the parties state that this clause (d)
does not preclude Berlex or any Berlex Affiliate from using
the Component in the manufacture of a pharmaceutical other
than a product for hormone replacement therapy in the United
States. This clause (d) shall not be applicable to the
conduct of Berlex and Berlex Affiliates outside of the United
States.
5. Delivery; Certificate of Analysis; Invoicing. Berlichem will deliver
the Component to OLG FOB OLG's facility in Illinois, or to such other
location(s) as Endeavor may direct from time to time. Shipping costs
shall be included in the price invoiced to Endeavor by Berlichem.
Berlichem shall provide a certificate of analysis to Endeavor for each
delivery of Component. Berlichem shall invoice Endeavor for each
delivery of Component. Each invoice issued by Berlichem shall set
Forth the amount to be paid in United States dollars, and shall be
paid by Endeavor in United States dollars. Payment of each invoice
shall be made by Endeavor within thirty (30) days of receipt of the
Berlichem Invoice, unless Endeavor rejects the Component delivered
pursuant to Section 6, in which case Endeavor Shall promptly pay the
invoice within ten (10) days of decision of an independent testing
laboratory adverse to Endeavor as set forth in Section 6. Berlichem
shall have no obligation to ship Component in response to any Endeavor
purchase order if payment by Endeavor for any previous delivery of
Component is in arrears.
6. Inspection and Rejection. Endeavor or its designee will inspect the
Component within thirty (30) days after receipt and shall have the
right to reject any Component that does not conform completely to the
Specifications, has not been manufactured in compliance with the
applicable FDA current Good Manufacturing Practices regulations, or is
otherwise adulterated. Endeavor, at its election, may receive a
refund, credit against other purchases or replacement Component for
properly rejected Component. Any properly rejected Component shall be
held, disposed of, or returned to Berlex at its election and expense.
In the event that the parties cannot agree as to whether Component
rejected by Endeavor was properly rejected, the parties shall select a
mutually acceptable independent testing laboratory to test the
Component for compliance with the Specifications, or conduct such
other tests or inspections as shall be necessary to determine whether
the Component at issue was properly rejected. In the conduct of such
testing, such independent laboratory shall employ the same analytical
methods employed by the Berlex Affiliate responsible for production of
the Component (if necessary the Berlex Affiliate responsible for
production of the Component shall make such analytical methodology
available to such independent testing laboratory, under a binder of
confidentiality). The decision of such
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testing laboratory shall be conclusive and binding on the parties. The
costs of the independent testing laboratory shall be borne by the
non-prevailing party.
7. Price. Berlichem will supply the Component through its Affiliate
Berlichem at the following prices, (which shall be based on the total
quantity of Component purchased in a calendar year), including
freight: * (in each case invoiced on a per gram basis, calculated to
the nearest gram of Component delivered). Berlichem invoices shall be
based on the quantity of Component set forth in the initial Endeavor
forecast for the applicable calendar year, with an additional payment
by Endeavor after the end of the applicable calendar year if the
actual quantity purchased is less than that forecast by Endeavor and
places Endeavor's quantity of Component delivered in another price
traunch, or a refund or credit by Berlichem if the actual quantity
purchased is greater than that forecast by Endeavor and places
Endeavor's quantity of Component delivered in another price traunch.
Berlex represents that the prices set forth above in this Section 7
are no greater than (i) the direct manufacturing costs of the
Affiliate of Berlex that manufactures the Component, plus (ii) a gross
profit margin for such manufacturing Affiliate that is not greater
than its average gross profit margin on sales of comparable quantities
of sole-source estrogenic components to other non-affiliated customers
in the United States, plus (iii) a xxxx-up by Berlichem that is no
greater than its standard xxxx-up for similar sole-source estrogenic
products to other non-affiliated customers in the United States.
Berlichem shall have the right to increase prices to reflect actual
increases in the costs of Berlichem or its Affiliate responsible for
production. Such price increases shall be limited to one per calendar
year, of which Berlichem shall notify Endeavor at least thirty (30)
days in advance of the start of the calendar year to which the price
increase applies. The limitations on price increases described in this
Section 7 shall not be applicable to price increases relating to
changes in Specifications described in Section 1(b).
8. Superiority of Agreement. The parties agree that the provisions of
this Agreement, together with the Schedules hereto and any amendments
hereto, shall prevail over any inconsistent statements or provisions
contained in any documents passing between the parties, including but
not limited to any forecast, purchase order, revision, acknowledgment,
confirmation, invoice, or notice.
9. Use of Component. Berlex acknowledges that Endeavor intends to enter
into a contract with OLG for the purpose of having OLG manufacture API
incorporating Component. Endeavor, or one or more third parties
designated by Endeavor, may use the API supplied by OLG to prepare,
manufacture and supply Endeavor with one or more finished
pharmaceutical products for hormone replacement therapy.
10. Co-Promotion. (a) Subject to Endeavor's right to accelerate set forth
in Section 10 (b), Berlex will have an option to acquire co-promotion
rights to the CE Product in the United States, which option will
expire two months following the acceptance for filing by the FDA of
Endeavor's initial NDA for the CE Product. Endeavor shall notify
Berlex of the date of acceptance for filing by FDA of Endeavor's
initial NDA for the CE Product within five (5) business days of
Endeavor's being notified by FDA of such acceptance. Upon the request
of Berlex, and on reasonable advance notice to Endeavor, Endeavor
shall permit Berlex and Berlex's consultants (in each case reasonably
acceptable to Endeavor) to review all clinical and CMC documentation
compiled by or for Endeavor in the course of assembling the NDA for
the CE Product prior to the expiration of this co-promotion option.
Endeavor shall permit Berlex to inspect the NDA (prior to and
following submission to FDA) and conduct such other reasonable due
diligence as Berlex deems appropriate prior to the expiration of this
co-promotion option. Berlex shall elect the co-promotion option by
delivering to Endeavor prior to the expiration of the two-month period
a notice stating that Berlex exercises its co-promotion option. If
Berlex does not deliver such notice to Endeavor prior to the
expiration of the two-month period, then Berlex's co-promotion
* Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
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option shall expire. If Berlex elects to exercise its co-promotion
option, then Berlex and Endeavor will negotiate a definitive
co-promotion agreement that will include, without limitation, the
following terms: (i) the CE Product will be promoted and packaged
using Endeavor's trademark and trade dress; (ii) Berlex will be
identified by name in the advertising and promotional materials for
the CE Product; (iii) Berlex will pay Endeavor * of Endeavor's
out-of-pocket development costs for the CE Product incurred from and
after the date of this Agreement; (iv) Berlex shall not sell the
Component or any product containing the Component to any person in the
United States for use in a product for hormone replacement therapy;
and (v) Endeavor and Berlex will share the profits resulting from
sales of the CE Product in proportion to their sales effort on a
weighted sales call basis (based on the CE Product position within the
call); provided, however, that Endeavor shall receive at least * of
all profits (revenue less operating expenses; such terms to be defined
in the co-promotion agreement) from the CE Product irrespective of
its sales effort. In the event that Berlex and Endeavor are unable to
negotiate a definitive agreement, then Endeavor shall not grant
co-promotion rights or other marketing rights to any CE Product to any
third party on terms more favorable to the third party than the terms
offered by Endeavor to Berlex. (b) Notwithstanding the provisions of
Section 10(a) above, Endeavor will have the right to accelerate
Berlex's co-promotion option after thirty (30) days have elapsed
following delivery to Berlex by Endeavor of the final pivotal
vasomotor clinical study reports (including statistical analysis) to
be submitted as part of Endeavor's initial NDA for the CE Product,
unless Berlex exercises such co-promotion option, pursuant to the
following accelerated procedure: (A) at any time after the thirty (30)
day period following delivery to Berlex by Endeavor of the final
pivotal vasomotor clinical study reports (including statistical
analysis) referred to above has expired, Endeavor may deliver to
Berlex a notice stating that Berlex's co-promotion option will expire
if not exercised within thirty (30) days of the delivery of the notice
from Endeavor; and (B) the Berlex co-promotion option will expire at
the conclusion of such thirty (30) day period unless during such
thirty (30) day period Berlex delivers to Endeavor a notice stating
that Berlex exercises its co-promotion option. Upon the request of
Berlex, prior to the expiration of the thirty (30) day period,
Endeavor shall permit Berlex and Berlex's consultants (in each case
reasonably acceptable to Endeavor) to review all clinical and CMC
documentation compiled by or for Endeavor relating to the CE Product.
If Berlex delivers a notice to Endeavor stating that Berlex exercises
its co-promotion option, then the parties shall negotiate a definitive
co-promotion agreement as described above in Section 10(a). (c) In the
event that Berlex does not exercise its co-promotion option, then
Berlex's obligation to supply the Component shall nonetheless continue
under the terms of limited exclusivity set forth in Section 4.
11. Patent Indemnity.
(a) If Berlex does not exercise its right to co-promote the CE
Product pursuant to Section 10 hereof, then the following
indemnity provision will apply. If any third party institutes
a patent infringement (or inducement of infringement) suit or
claim against Berlex or any Affiliate of Berlex based on,
arising from, or related to the manufacture, importation into
the United States, or supply by Berlex or an Affiliate of
Berlex of Component pursuant to this Agreement, then Endeavor
will indemnify and hold harmless Berlex, any such Berlex
Affiliate, and their respective directors, officers,
employees, and agents (each an "Indemnified Party") against
any such suits or claims. Each Indemnified Party agrees to
give Endeavor prompt written notice of any suit or claim upon
which such Indemnified Party intends to base a claim for
indemnity under this Section, to provide witnesses and other
assistance in the investigation and defense of the suit or
claim as Endeavor may reasonably request, and to promptly
furnish Endeavor with copies of any documents relevant to the
suit or claim which are requested by Endeavor (under binder
of confidentiality). With respect to any suit or claim
relating solely to the payment of
* Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment
has been requested with respect to the omitted portions.
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money damages which are solely the responsibility of Endeavor
and which responsibility Endeavor has acknowledged in
writing, and which will not result in the Indemnified Party
becoming subject to injunctive or other non-monetary relief,
Endeavor shall have the right to defend, settle or otherwise
dispose of such suit or claim on such terms as Endeavor shall
see fit. Endeavor shall obtain the written consent of the
Indemnified Party, which consent shall not be unreasonably
withheld or delayed, prior to settling or ceasing to defend
any suit or claim if as a result thereof the Indemnified
Party would become subject to injunctive or other equitable
relief, or any monetary or non-monetary remedy not the
responsibility of Endeavor. The reasonable expenses of an
Indemnified Party in conjunction with a suit or claim subject
to indemnity pursuant to this Section, including without
limitation reasonable fees and disbursements of counsel,
shall be reimbursed by Endeavor an a quarterly basis. The
above indemnification shall only apply to Component provided
to Endeavor or an Endeavor designee pursuant to this
Agreement, and shall not apply to Berlex's use or a Berlex
supplied third party's use of the Component.
(b) If Berlex exercises its right to co-promote the CE Product
pursuant to Section 10 hereof, then the following indemnity
provision will apply. If any third party institutes a patent
infringement suit or claim against Endeavor or any Affiliate
of Endeavor which involves an alleged violation of Component
patents, a process of making the Component, or a process of
making or distributing drug containing the Component, then
Berlex will indemnify and hold harmless Endeavor, any such
Endeavor Affiliate, and their respective directors, officers,
employees, and agents (each an "Indemnified Party") against
any such suits or claims. Each Indemnified Party agrees to
give Berlex prompt written notice of any suit or claim upon
which such Indemnified Party intends to base a claim for
indemnity under this Section, to provide witnesses and other
assistance in the investigation and defense of the suit or
claim as Berlex may reasonably request, and to promptly
furnish Berlex with copies of any documents relevant to the
suit or claim which are requested by Berlex (under binder of
confidentiality). With respect to any suit or claim relating
solely to the payment of money damages which are solely the
responsibility of Berlex and which responsibility Berlex has
acknowledged in writing, and which will not result in the
Indemnified Party becoming subject to injunctive or other
non-monetary relief Berlex shall have the right to defend,
settle or otherwise dispose of such suit or claim on such
terms as Berlex shall see fit. Berlex shall obtain the
written consent of the Indemnified Party, which consent shall
not be unreasonably withheld or delayed, prior to settling or
ceasing to defend any suit or claim if as a result thereof
the Indemnified Party would become subject to injunctive or
other equitable relief, or any monetary or non-monetary
remedy not the responsibility of Berlex. The reasonable
expenses of an Indemnified Party in conjunction with a suit
or claim subject to indemnity pursuant to this Section,
including without limitation reasonable fees and
disbursements of counsel, shall be reimbursed by Berlex on a
quarterly basis. The above indemnification shall only apply
to Component provided to Endeavor or an Endeavor designee
pursuant to this Agreement.
12. Indemnity for Product Claims.
(a) Berlex shall indemnify and hold Endeavor harmless from and
against all claims, causes of action, losses, liabilities of
any kind, and settlement costs, including reasonable
attorneys' fees and other expenses of litigation, (i) which
result from or are attributable to any negligent act or
omission on the part of Berlex, any Affiliate of Berlex or
any of their employees, representatives or agents, (ii) which
result from or are attributable to any
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failure of the Component to comply with the Specifications in
effect at the time of delivery, or (iii) which result from
the failure of Berlex's Affiliate responsible for production
of the Component to manufacture the Component in compliance
with applicable current Good Manufacturing Practices
regulations of the FDA.
(b) Endeavor shall indemnify and hold Berlex harmless from and
against all claims, causes of action, losses, liabilities of
any kind, and settlement costs, including reasonable
attorneys' fees and other expenses of litigation, (i) which
result from or are attributable to any negligent act or
omission on the part of Endeavor, any Affiliate of Endeavor
or any of their employees, representatives or agents, or (ii)
which result from or are attributable to any product produced
by or for Endeavor that includes the Component other than
those which result from the Component failing to comply with
the Specifications or any negligent act or omission on the
part of Berlex, any Affiliate of Berlex or any of their
representatives or agents.
(c) Each indemnitee in this Section 12 agrees to give the
indemnitor prompt written notice of any suit or claim upon
which such indemnitee intends to base a claim for indemnity
under this Section, to provide witnesses and other assistance
in the investigation and defense of the suit or claim as the
indemnitor may reasonably request, and to promptly furnish
the indemnitor with copies of any documents relevant to the
suit or claim which are requested by the indemnitor (under
binder of confidentiality). With respect to any suit or claim
relating solely to the payment of money damages which are
solely the responsibility of the indemnitor and which
responsibility the indemnitor has acknowledged in writing,
and which will not result in the indemnitee becoming subject
to injunctive or other non-monetary relief, the indemnitor
shall have the right to defend, settle or otherwise dispose
of such suit or claim on such terms as the indemnitor shall
see fit. The indemnitor shall obtain the written consent of
the indemnitee, which consent shall not be unreasonably
withheld or delayed, prior to settling or ceasing to defend
any suit or claim if as a result thereof the indemnitee would
become subject to injunctive or other equitable relief, or
any monetary or non-monetary remedy not the responsibility of
indemnitor. The reasonable expenses of an indemnitee in
conjunction with a suit or claim subject to indemnity
pursuant to this Section, including without limitation
reasonable fees and disbursements of counsel, shall be
reimbursed by the indemnitor on a quarterly basis.
13. Termination of Development Agreement. Endeavor and Berlex hereby
terminate the Development Agreement, and all rights and obligations of
the parties thereunder are hereby terminated.
14. Berlex Equity Position and Loan Conversion. Berlex shall cause its
Affiliate, Schering Berlin Venture Corporation ("SBVC"), to apply the
entire outstanding principal amount of that certain promissory note
made by Endeavor dated December 2, 1997 (the "Promissory Note"),
together with all accrued interest thereon prior to the date of such
conversion, to the purchase of Series E Preferred Stock of Endeavor at
a price per share equal to the purchase price established for such
shares at the Closing of that certain Series E Preferred Stock
Purchase Agreement currently contemplated by Endeavor, SBVC and other
prospective investors in Endeavor (as Closing may be defined in such
Series E Preferred Stock Purchase Agreement).
15. Term and Termination. The term of this Agreement shall continue in
perpetuity until terminated by Endeavor or Berlex by providing written
notice of termination to the other parties as provided herein. (a)
Either Endeavor or Berlex may terminate this Agreement without cause
on at least
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thirty-six (36) calendar months advance written notice to the other
party; provided however, that neither Endeavor nor Berlex shall
terminate this agreement without cause prior to December 31, 2006. (b)
Either Endeavor or Berlex shall have the right to terminate this
Agreement upon sixty (60) days' written notice to the other party: (i)
for a material breach by the other party (or in the case of Berlex, an
Affiliate of Berlex responsible for performing any part of this
Agreement); or (ii) in the event that proceedings in bankruptcy or
insolvency are instituted by or against the other party, or a receiver
is appointed to hold some substantial portion of the business or
assets of the other party, or if any substantial part of the other
party's assets are the object of attachment, sequestration or other
type of comparable proceeding, and any such proceeding is not vacated
or terminated within such sixty (60) day period. Notwithstanding any
provision in this Agreement to the contrary, Berlex shall have the
right to terminate this Agreement on ten (10) days advance written
notice to Endeavor in the event that Endeavor has not raised at least
ten million dollars ($10 million) in net operating capital on or
before October 1, 2000 to fund the development of the CE Product.
16. Confidential Information. Confidential Information shall mean all
information and data received from the other party to this Agreement
either (a) relating to Component, API, or CE Product; or (b) all
information or data not described in clause (a), but which is supplied
by the other party to this Agreement and is marked "confidential." The
parties recognize that during the term of this Agreement, each may
receive Confidential Information of the other. The parties agree that
they shall not disclose to unauthorized third parties Confidential
Information received from the other that is clearly identified by the
disclosing party as confidential, or use such Confidential Information
except for the purposes contemplated by this Agreement. When used in
this Agreement, Confidential Information shall include all information
disclosed hereunder, with the exception of the following:
(a) information of the disclosing party which is now in the
public domain or which subsequently enters the public domain
without fault on the part of the receiving party;
(b) information of the disclosing party which is presently known
by the receiving party from its own sources, and such present
knowledge can be demonstrated by written records;
(c) information received in good faith from a third party that
lawfully possesses and has the right to disclose such
information;
(d) information developed by or for the receiving party
independently of disclosure hereunder, as evidenced by the
receiving party's written records.
17. Force Majeure. Any delay in the performance of any of the duties or
obligations of a party hereto shall not be considered a breach of this
Agreement, and the time required for performance shall be extended for
a period equal to the period of such delay, provided that such delay
has been caused by or is the result of unforeseeable causes beyond the
control and without the fault or negligence of the party whose
performance is affected. The party so affected by such cause shall
give prompt written notice of the delay, stating the cause thereof and
the anticipated length of the delay, and shall take all reasonable
steps as may be necessary to end the delay as quickly as possible.
18. Notices. All notices required or provided for herein may be personally
delivered, sent by registered or certified mail, or sent by a
nationally recognized courier service that provides evidence of
delivery. Notices shall be effective immediately upon receipt if
personally delivered,
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on the fifth business day following mailing, or on the second business
day following sending by courier. Notices sent by mail or courier
shall be addressed as follows:
If to Endeavor: Endeavor Pharmaceuticals Inc.
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: R. Xxxxxxx Xxxxxx, President
If to Berlex or Berlichem:
All notices to Berlex or Berlichem other than routine correspondence
relating to and including purchase orders, revisions,
acknowledgements, forecasts and invoices shall be addressed to:
Berlex Laboratories, Inc.
X.X. Xxx 0000
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Vice President - Finance & Operations
(address for express delivery:
Berlex Laboratories, Inc.
000 Xxxxxxxxxxxx Xxxx
Xxxx Xxxxx, Xxx Xxxxxx 00000-0000
Attention: Vice President - Finance & Operations)
With a copy to:
Berlex Laboratories, Inc.
X.X. Xxx 0000
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Legal Department
(address for express delivery:
Berlex Laboratories, Inc.
000 Xxxxxxxxxxxx Xxxx
Xxxx Xxxxx, Xxx Xxxxxx 00000-0000
Attention: Legal Department)
Routine correspondence addressed to Berlex or Berlichem relating to
purchase orders, revisions, acknowledgements, forecasts and invoices
shall be addressed to:
Berlichem, Inc.
X.X. Xxx 0000
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Director of Sales
(address for express delivery:
Berlichem, Inc.
000 Xxxxxxxxxxxx Xxxx
Xxxx Xxxxx, Xxx Xxxxxx 00000-0000
Attention: Director of Sales)
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Either party may change its notice address by providing the other
party with notice of such change as provided herein.
19. Severability. This Agreement is subject to the restrictions,
limitations, terms and conditions of all applicable governmental
regulations, approvals and clearances. If any provision or portion of
this Agreement shall for any reason be held invalid, illegal or
unenforceable in any respect, such shall not affect any other term or
provision hereof, and this Agreement shall be interpreted and
construed as if such term, provision or portion hereof were not
contained herein.
20. Headings. The section headings in this Agreement have been inserted
solely for convenience, are not considered substantive provisions of
this Agreement, and shall be ignored when construing or interpreting
this Agreement.
21. Governing Law. This Agreement shall be governed by the substantive
laws of the State of North Carolina, without giving effect to the
conflicts of law rules of such state.
22. Entire Agreement. This Agreement constitutes the entire agreement
between the parties concerning the subject matter hereof and
supercedes all written and oral prior agreements or understandings
with respect hereto.
23. Amendment of Agreement; Waiver. No amendment, waiver or modification
of any of the terms of this Agreement shall be valid unless in writing
and signed by authorized representatives of all parties hereto.
Failure on one or more occasion by any party to enforce any rights
under this Agreement shall not be construed as a waiver of such rights
on a continuing basis or in respect of any other or subsequent
instances.
24. Assignment. This Agreement shall not be assigned by either party
without the prior written consent of the other party, which consent
shall not be unreasonably withheld, except that a party may assign
this Agreement, in whole or in part, to an Affiliate of such party,
and may assign this Agreement to any successor (including the
surviving company in any consolidation, reorganization or merger) or
to any assignee of substantially all of the assets or operations of a
party, provided in each case such successor or assignee expressly
assumes all obligations of such party under this Agreement. No
assignment shall relieve any party of any of its obligations under
this Agreement.
25. No Implied Rights or Licenses. Nothing in this Agreement shall give
either party hereto or any Affiliate of that party any license or
other rights in or to the Component, API, CE Product, any other
product, or any intellectual property, technology or Confidential
Information of the other party or any Affiliate of the other party
except as expressly provided for herein.
26. 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.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.)
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their authorized representatives as of the date first written above.
ENDEAVOR PHARMACEUTICALS, INC.
By: /s/ R. Xxxxxxx Xxxxxx
-------------------------------------------------
R. Xxxxxxx Xxxxxx,
President & CEO
BERLEX LABORATORIES, INC.
By: /s/ Xxxx Xxxxxxx
-------------------------------------------------
Xxxx Xxxxxxx,
Chairman
BERLICHEM, INC.
By: /s/ Xxxx Xxxxxxxxx
-------------------------------------------------
Xxxx Xxxxxxxxx,
Treasurer
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SCHEDULE 1
*
* Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
SCHEDULE 2
*
* Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has
been requested with respect to the omitted portions.
