SAW PALMETTO SUPPLY AGREEMENT
THIS AGREEMENT is entered into effective as of the 4th day of November,
1997, by and BETWEEN PharmaPrint Inc., a corporation of the State of Delaware
having its principal place of business at 0 Xxxx Xxxxx, Xxxxx 0000, Xxxxxx,
Xxxxxxxxxx 00000 ("PharmaPrint") and Xxxxxx, Inc., a corporation of the State of
Colorado, having offices at 0000 Xxxxxxx Xxxx., Xxxxxxx, Xxxxxxxx 00000
("Xxxxxx").
WITNESSETH, THAT:
WHEREAS :
A. PharmaPrint has developed a process for the identification,
characterization of and standardization of the amounts of bioactive components
in herbal products (hereinafter referred to as the "PharmaPrint -Registered
Trademark- Process") and is seeking to commercialize certain of the herbal
products identified and now being further characterized and standardized
utilizing said process.
B. PharmaPrint has developed proprietary technological information, know-
how, trade secrets, and obtained patents and filed patent applications relating
to and/or covering the subjects of paragraph A above.
X. Xxxxxx has developed special processes, know-how, technologies, and trade
secrets giving rise to a specific expertise in the extraction, isolation, and
purification of a variety of herbal products.
X. Xxxxxx'x expertise enables it to produce bulk quantities of desired
herbal products which provides competitive advantages to Xxxxxx, and which are
very valuable to Xxxxxx.
E. PharmaPrint desires to secure a coordinated and continuous commercial
supply of Saw Palmetto herbal product that has been identified, characterized
and standardized using the PharmaPrint -Registered Trademark- Process.
F. PharmaPrint recognizes and acknowledges the advantages and value of
Xxxxxx'x expertise and desires Xxxxxx to utilize the PharmaPrint -Registered
Trademark- Process to manufacture Saw Palmetto as further defined below.
X. Xxxxxx represents that it has or will have by no later than December 31,
1997 the ability to manufacture and sell to PharmaPrint, Herbal Products in
commercial quantities utilizing the PharmaPrint -Registered Trademark- Process
and Xxxxxx'x "Good Manufacturing Process".
X. Xxxxxx and PharmaPrint are negotiating in good faith an agreement
entitled: "Development and GMP Manufacturing of Saw Palmetto Extracts."
NOW, THEREFORE, in consideration of the foregoing and of the covenants,
hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Terms defined in this Article I shall for all purposes of this Agreement,
as the same may be amended or supplemented from time to time, have the meaning
herein specified.
1.1 The term "Effective Date" shall mean the date first written herein above.
1.2 The term "FDA" shall mean the Federal Food and Drug Administration of the
United States Department of Heath and Human Services or any successor agency
thereto as well as governmental agencies of comparable jurisdiction in the
Territory and elsewhere.
1.3 The term "GMP" means the good manufacturing practice regulations of the
FDA as described in the United States Code of Federal Regulations or any
successor regulations in force regulations in the United States and as may be
described in comparable regulations in force in countries within the Territory.
For DSHEA Licensed Products, "GMP" shall mean compliance with the regulations of
the United States Dietary Supplement Health and Education Act of 1994 and
comparable regulations in force in countries within the Territory and elsewhere,
as applicable.
1.4 The term "Government Approvals" shall mean any approvals, licenses,
registrations or authorizations, howsoever called, of any United States federal,
state or local bureau or other governmental entity, including the FDA, and
similar Government Approvals in the other countries within the Territory and
elsewhere, necessary for the manufacture, use, storage, transport or sale, both
interstate and intrastate, in the United States, its territories, possessions
and Puerto Rico as well as the other countries within the Territory. In the
case of DSHEA Licensed products, the term "Government Approvals" shall mean
compliance with the applicable sections of the United States Dietary Supplement
Health and Education Act of 1994.
l.5 The term "Specifications" shall mean the specifications for the Herbal
Product of this Agreement, agreed upon between the parties and set out in
Schedule A of the Development and GMP Manufacturing Agreement.
1.6 The term "PharmaPrint Affiliate" shall mean any company which directly or
indirectly through stock ownership or through other contractual arrangement
either controls, or is controlled by, or is under common control with
PharmaPrint.
1.7 The term "Patent Rights" shall mean any and all issued patents in the
United States, Canada and or Mexico and any and all patent applications for
letters patent pending in the above countries (until such time as such
applications or any of them are
2
denied, abandoned, or issued into patents) listed in Schedule B attached
hereto, any patents issuing from such applications, all divisionals,
continuations, continuations-in-part and all patents granted thereon, as well
as all other patents in the Territory, including any re-issues, renewals, or
extensions thereof, which are owned by PharmaPrint, a PharmaPrint Affiliate or
under which PharmaPrint or a PharmaPrint Affiliate shall have the right to grant
rights, and which claim a PharmaPrint-Registered Trademark- Process for
identifying, characterizing, and standardizing the amounts of bioactive
components in herbal extracts or any Improvements, which claim has not lapsed,
become abandoned or been declared invalid or unenforceable by a final non-
appealed or unappealable decision or judgment of a court or tribunal of
competent jurisdiction.
1.8 The term "Herbal Product" shall mean only Saw Palmetto herbal products
manufactured according to the PharmaPrint -Registered Trademark- Process and the
Specifications set forth in this Agreement which have been developed and defined
under the Agreement entitled "Development and GMP Manufacturing of Saw Palmetto
Extracts".
1.9 The term "Additional Supply Agreement" means the "Herbal Products Supply
Agreement" for the sale and supply of the herbal products Valerian, Echinacea,
and Ginseng by Xxxxxx to PharmaPrint, as executed by the parties concurrently
with this Agreement.
1.10 The term "Improvements" shall mean any and all new and useful processes,
improvements, manufactures, devices, compositions of matter (except as limited
below) or methods of use first conceived, reduced to practice or developed after
the Effective Date and during the term of this Agreement by PharmaPrint, or a
PharmaPrint Affiliate, Xxxxxx or any employees, consultants or other persons
under their direction or control of said entities which increase the
performance, efficacy or safety of the Herbal Product, reduce the cost of
manufacture, harmful side-effects or adverse reactions of the Herbal Product, or
the practice of the method(s) claimed in any of the patents and/or patent
applications within the Patent Rights. For the avoidance of doubt, the defined
term "Improvements" does not include the Herbal Product PER SE.
1.11 The term "Territory" shall mean the United States, its territories,
possessions, Puerto Rico, Canada and Mexico.
1.12 The term "Contract Year" shall mean the year that initially commences on
the Effective Date of this Agreement and running through December 31, 1998.
Subsequent Contract Years will commence on January 1st of each subsequent year
and run through December 31st of that year.
3
ARTICLE II
PURCHASE AND SALE
2.1 Xxxxxx agrees to and shall manufacture and provide to PharmaPrint and
PharmaPrint agrees to and shall purchase from Xxxxxx the Herbal Product listed
below in at least the amounts indicated for the years there identified, subject
to the other provisions of this Agreement.
--------------------------------------------------------------------------------
Contract Year 1998 1999 2000
--------------------------------------------------------------------------------
Herbal Product
Quantity (Kilograms) 8,000 10,000 12,500
--------------------------------------------------------------------------------
2.2 Xxxxxx is obligated to supply to PharmaPrint one-hundred percent (100%)
of PharmaPrint's requirements for the Herbal Product in the Territory. Xxxxxx
agrees not to supply any third party with or itself market for sale the Herbal
Product.
2.3 In the 1998 Contract Year Xxxxxx agrees to manufacture and deliver to
PharmaPrint and PharmaPrint agrees to and shall purchase at least 2,000 kgs of
the Herbal Product by January 1, 1998, 3,000 kgs of the Herbal Product by April
15, 1998 and the remaining 3,000 kgs prior to December 31, 1998. By January 30,
1998, PharmaPrint shall provide Xxxxxx with a forecast prepared in good faith of
its quarterly requirements of all Herbal Product for the following eighteen (18)
month period, the initial six (6) month thereof being known as the "Initial
Forecast". Purchase orders will be placed by PharmaPrint corresponding to the
first three (3) months of the Initial Forecast. Throughout the term of the
Agreement, PharmaPrint shall further provide Xxxxxx with a rolling monthly
forecast of PharmaPrint's anticipated requirements of all Herbal Product for the
subsequent three (3) month period ("Updated Forecast"). The forecasted
requirements of the Herbal Product in each Updated, three (3) month, Forecast
shall be binding upon PharmaPrint. After the first Contract Year of this
Agreement each subsequent Updated Forecast shall bind PharmaPrint only to the
minimum forecasted requirements as outlined in paragraph 2.1 and to assist
Hauserin planning its manufacture of the Herbal Product for the applicable
period. PharmaPrint agrees to purchase a minimum of one third of the yearly
purchase requirements outlined in paragraph 2.1 within six (6) months of the
calendar year. The price schedule for the Herbal Product is set forth in
paragraph 2.12.
2.4 Within three (3) business days after the last party to execute this
Agreement has done so, PharmaPrint shall make an initial payment to Xxxxxx in
the amount of two hundred and seventy one thousand nine hundred and thirty four
dollars ($271,934.00). Such initial payment shall be used by Xxxxxx solely to
design, purchase necessary equipment and build the initial manufacturing
facility.
4
2.4(a) All equipment purchased for use in connection with this Agreement
shall be the property of Xxxxxx.
2.4(b) PharmaPrint shall also pay Xxxxxx for all incremental
expenditures associated with any and all expedited equipment deliveries made to
Xxxxxx and installation penalty costs necessary for Xxxxxx to meet the initial
delivery schedule of Herbal Product by January 1, 1998 to PharmaPrint in
accordance with this Agreement; provided, however, that Xxxxxx can justify such
expenditures to PharmaPrint in writing in advance and PharmaPrint accepts and
agrees to such additional expenditures in writing within three (3) business days
of receipt of Xxxxxx'x notice and justification.
2.5 PharmaPrint shall place purchase orders for the Herbal Product with
Xxxxxx from time to time specifying the quantities of the Herbal Product
desired, and the places to which and the manner and dates by which delivery is
to be made; said delivery dates to be no earlier than ninety (90) days from the
date of the purchase order unless otherwise requested by PharmaPrint and agreed
to by Xxxxxx.
2.6 Xxxxxx shall acknowledge all purchase orders within ten (10) business
days of their receipt. Xxxxxx shall execute all accepted purchase orders by
delivery of all ordered quantities of the Herbal Product no later than the
delivery dates provided in the purchase orders of PharmaPrint to the destination
recited therein, unless otherwise requested by PharmaPrint and agreed to by
Xxxxxx.
2.7 To the extent that the terms of any purchase order or acknowledgment
thereof are inconsistent with the terms of this Agreement, the terms of this
Agreement shall control.
2.8 Title and risk of loss of the Herbal Product will pass to PharmaPrint
upon delivery of the Herbal Product to the designated carrier of PharmaPrint at
Xxxxxx'x manufacturing facility or its storage facility. The parties agree that
Xxxxxx'x facilities shall be domestically located unless otherwise agreed.
2.9 All Herbal Product supplied by Xxxxxx to PharmaPrint in response to
purchase orders placed by PharmaPrint will conform to the Specifications and
shall be accompanied by the applicable certificate of analysis. Xxxxxx shall
manufacture the Herbal Product under approved Good Manufacturing Procedures
conforming with GMP regulations. Further Xxxxxx shall have the sole
responsibility for meeting DSHEA statutes and rules.
2.10 PharmaPrint shall procure all raw material extract necessary to obtain
the Herbal Product. Title in all such materials shall reside in PharmaPrint
until said raw material extracts are delivered to Xxxxxx'x designated carrier.
Xxxxxx reserves the right and PharmaPrint honors the right of Xxxxxx to provide
the raw material extract to fulfill needs not already committed to by
PharmaPrint according to PharmaPrint's specifications at any time during this
Agreement.
5
2.11 Should the minimum yearly quantities not be purchased in the applicable
Contract Year then, subject to the provisions and terms of this Agreement,
PharmaPrint agrees to and shall pay Xxxxxx 15% of the then per kilogram
processing price of the Herbal Product not purchased from Xxxxxx, up to the
total of the forecasted kilogram per six (6) month quantity requirements set
forth in this Agreement.
2.12 The prices for the Herbal Product during the initial Contract Year are
set forth below. All prices for the Herbal Product are freight on board ("FOB")
Xxxxxx'x manufacturing or storage facility, depending on the location from which
Xxxxxx ships, or as may be agreed to by the parties. The price for the Herbal
Product will be $65 per kilogram based on a process yield of 85%. Any process
yield between 80% and 85% Xxxxxx and PharmaPrint agree to share (50/50) in the
additional raw material costs. Any process yield greater than 90% Xxxxxx and
PharmaPrint agree to share (50/50) in the additional cost savings.
2.13 After one (1) calendar year Xxxxxx may adjust the price of the Herbal
Product not more than once per Contract Year upon not less than ninety (90) days
written notice to PharmaPrint with written agreement from PharmaPrint, to adjust
for increases or decreases in manufacturing costs ("Manufacturing Costs"). Any
price adjustment hereunder shall apply only to the Herbal Product sold in
response to orders placed after the date on which such adjustment becomes
effective. Such price adjustment, if an increase, for the Herbal Product shall
be based on the increase in the Manufacturing Cost for the Herbal Product, but
only upon mutual agreement shall the increase for Manufacturing Cost be greater
than that set forth in the Consumer Price Index applicable at the time the price
adjustment is negotiated as long as Xxxxxx'x responsibility remains only that of
processing the Herbal Product extract. Should Xxxxxx'x responsibility increase
beyond this any prices within this Agreement will be subject to mutual review.
Xxxxxx shall keep complete and accurate records of all Manufacturing Costs
incurred in the manufacture of the Herbal Product to PharmaPrint, following the
signing of required Xxxxxx Confidentiality Agreements. Xxxxxx shall provide
access to said records during reasonable business hours to a certified public
accountant selected by PharmaPrint and reasonably acceptable to Xxxxxx, who
shall, at PharmaPrint's expense, have access to such records deemed by such
accountant as reasonably necessary in verifying for PharmaPrint, not more than
once each calendar year, such costs incurred by Xxxxxx.
2.14 PharmaPrint shall randomly inspect all shipments of the Herbal Product to
determine whether or not said products are in conformity with the
Specifications. In the event that any portion of the shipment of the Herbal
Product received by PharmaPrint fails to conform to the Specifications as
mutually agreed upon, PharmaPrint may reject the non-conforming Herbal Product
shipment by giving written notice to Xxxxxx within sixty (60) days of
PharmaPrint's receipt of the Herbal Product, which notice shall specify the
manner in which the Herbal Product failed to meet the Specifications. Failing
such
6
notification, PharmaPrint will be deemed to have accepted the Herbal Product,
and Xxxxxx shall not thereafter be required to indemnify PharmaPrint for breach
of its warranties under Paragraph 5.2 as to such Herbal Product, except for
defects not reasonably discoverable by PharmaPrint in such inspection.
2.15 In the event Xxxxxx does not agree that any such Herbal Product failed to
meet the Specifications and PharmaPrint and Xxxxxx cannot reach agreement with
respect to such Herbal Product, Xxxxxx will submit the question of whether the
Herbal Product failed to meet the Specifications to an independent laboratory
selected by Xxxxxx and approved by PharmaPrint for determination. The findings
of such laboratory shall be binding upon PharmaPrint and Xxxxxx and the cost of
such determination shall be paid by the party in error.
2.16 Should the analysis of the independent laboratory, chosen in accordance
with Paragraph 2.15, confirm that Xxxxxx was at fault, Xxxxxx shall be required
to replace the Herbal Product identified as not conforming to the Specifications
forthwith, at its expense, or if it is unable to make prompt replacement, Xxxxxx
shall either credit PharmaPrint's account or refund any payment made on the non-
accepted Herbal Product, depending on PharmaPrint's account balance, within
forty-five (45) days of the independent laboratory's written notification of
non-conforming Herbal Product. PharmaPrint shall return, at Xxxxxx'x expense,
the non-accepted Herbal Products to Xxxxxx.
2.17 Xxxxxx agrees, if reasonably required of PharmaPrint and if requested by
PharmaPrint, to modify the process for the manufacture of the Herbal Product.
PharmaPrint shall provide all necessary documentation to Xxxxxx as requested by
PharmaPrint's distributors and the FDA or other Governmental Agency and all such
documents shall be treated as and maintained in confidence by each of the above
entities pursuant to the requirements of Article VI. Xxxxxx retains the right
to modify product prices based on additional costs associated with any
implemented modifications to the Herbal Product.
2.18 Xxxxxx shall secure access for PharmaPrint, employees of the Government
regarding governmental agencies and PharmaPrint distributors to the operations
and facilities of Xxxxxx wherein the Herbal Product is manufactured, packaged,
tested, labeled, stored and/or shipped. PharmaPrint and such other entities
shall have the right to inspect such operations or facilities for, INTER ALIA,
GMP purposes and on reasonable prior notice.
2.19 As a condition of supplying product, Xxxxxx will supply to PharmaPrint a
copy of the Manufacturing SOP's and DMF, if applicable.
7
ARTICLE III
RIGHT TO MANUFACTURE
3.1 In the event that Xxxxxx is unable at any time to supply commercial
quantities of the Herbal Product for a period of sixty (60) consecutive days for
any reason including acts of force majeure, PharmaPrint shall have the right to
have a third party manufacture the Herbal Products for PharmaPrint. The time of
such manufacture by such third party shall be for a finite duration of
reasonable length in view of the complexity and costs of arranging such change
in the Herbal Product manufacturing. As used herein, commercial quantities of
the Herbal Product shall mean total units of the Herbal Product equal to seventy
five percent (75%) of PharmaPrint's quarterly orders for the preceding two (2)
quarters.
3.2 Recognizing that a third party manufacturer ("TPM"), under Paragraph 3.1,
may require technical assistance in manufacturing the Herbal Product, if
requested by PharmaPrint:
3.2.1 Xxxxxx shall assist TPM in determining and acquiring machinery
and equipment necessary to manufacture the Herbal Product by TPM. Upon request
by PharmaPrint Xxxxxx will assist TPM in discussions between TPM and equipment
manufacturers, subject to the terms and conditions of subparagraph 3.2.3.
3.2.2 If technical assistance is requested by TPM at the time of
installation of equipment in TPM's plant, one Xxxxxx engineer will be sent to
TPM's plant, for a maximum period of thirty (30) calendar days, subject to the
terms and conditions of subparagraph 3.3.
3.2.3 PharmaPrint may request the assistance of Xxxxxx'x engineers at
TPM's plant whenever necessary during the term of Paragraph 3.4 to solve some
particular problems or complete the training of TPM's engineers. PharmaPrint
will notify Xxxxxx thirty (30) calendar days in advance of the start-up date of
TPM's plant, and Xxxxxx shall extend its technical assistance for such start-up
under the terms and conditions set forth below:
3.2.3.1 Xxxxxx will designate one or more highly qualified
specialists to stay at TPM's plant for a continuous or an interrupted period of
up to a total of thirty (30) calendar days according to the reasonable needs of
TPM. Should a given specialist not be acceptable, TPM may, at any time, upon
fourteen (14) calendar days notice, ask for a replacement of the specialist sent
by Xxxxxx with someone more qualified, and Xxxxxx agrees to make a reasonable
effort to furnish such a replacement within this fourteen (14) day period in
order to provide uninterrupted technical assistance.
8
3.2.3.2 In addition to the assistance mentioned in 3.2.3.1
above, Xxxxxx will provide, at TPM's request, one highly qualified specialist
for ninety (90) calendar day periods, with or without interruption, until the
technical assistance extended reaches a total of twelve man-months, but in no
event for periods beyond the term of this Agreement.
3.3 Xxxxxx'x remuneration for technical assistance at TPM's plant shall be as
follows:
3.3.1 PharmaPrint shall pay directly or reimburse upon appropriate
justification the travel and living expenses of Xxxxxx'x specialists. In
addition, PharmaPrint shall pay Xxxxxx an amount equal to three times the Gross
Salary of the specialist divided by 365 days for each working day of each
specialist's absence from Xxxxxx'x premises for the purpose of extending
assistance to TPM; and
3.3.2 Such remuneration shall be made within one (1) month after Xxxxxx
invoices PharmaPrint for such reimbursement payments.
3.4 If the procedure of Paragraph 3.1 is implemented, the manufacture of the
Herbal Product by the third party and its supply to PharmaPrint shall revert to
Xxxxxx upon, (a) notification to PharmaPrint from Xxxxxx that Xxxxxx is again
able to manufacture and supply the Herbal Product, and (b) termination of any
third party obligations incurred by PharmaPrint in obtaining supply of the
Herbal Product pursuant to Paragraph 3.1 hereof. Upon such reversion, the third
party manufacturer's right to use the Manufacturing Know-how shall terminate
within sixty (60) days.
ARTICLE IV
RECALLS AND RETURNS
4.1 In the event of a recall of any of the Herbal Product required by a
governmental agency or authority of competent jurisdiction or if a recall of the
Herbal Product is reasonably deemed advisable by PharmaPrint, such recall shall
be promptly implemented and administered by PharmaPrint in a manner which is
appropriate and reasonable under the circumstances and in conformity with
accepted trade practices. In the event that a recall is required as a result of
Xxxxxx'x breach of its obligations hereunder, all costs and expenses incurred in
connection therewith shall be borne by Xxxxxx. PharmaPrint shall bear all costs
associated with such recalls not borne by Xxxxxx.
4.2 The provisions and obligations of this Article IV shall survive any
termination or expiration of this Agreement.
9
4.3 Xxxxxx agrees that as to the Herbal Product identified in this Agreement
and those herbal products identified in the Additional Supply Agreement
contemporaneously entered into between the parties, if PharmaPrint so desires,
it may have herbal products other than those identified in the aforementioned
Agreements manufactured and sold to it by a third party manufacturer of
PharmaPrint's choice.
ARTICLE V
WARRANTIES, COVENANTS AND REPRESENTATIONS
5.1 PharmaPrint represents and warrants to Xxxxxx that the execution of this
Agreement and the full performance and enjoyment of the rights of PharmaPrint
under this Agreement will not breach or in any way be inconsistent with the
terms and conditions of any license, contract, understanding or agreement,
whether express, implied, written, or oral between PharmaPrint and any third
party. Xxxxxx represents and warrants to PharmaPrint that the execution of this
Agreement and the full performance and enjoyment of the rights of Xxxxxx under
this Agreement will not breach or in any way be inconsistent with the terms and
conditions of any license, contract, understanding or agreement, whether
express, implied, written, or oral between Xxxxxx and any third party.
5.2 Xxxxxx warrants that the Herbal Product supplied by Xxxxxx pursuant to
Paragraph 2.1 of this Agreement shall conform to the Specifications, be
manufactured in accordance with GMP and shall comply with all applicable laws in
the Territory. Provided, however, that Xxxxxx does not make any such warranty
as to any matters or processes (including the Specifications) specified or
established by PharmaPrint, pursuant to the "Development and GMP Manufacturing
of Saw Palmetto Extracts Agreement," the specifications will be reviewed and
altered if necessary as agreed by both parties.
5.3 Xxxxxx shall indemnify, defend and hold harmless PharmaPrint from all
actions, losses, claims, demands, damages, costs and liabilities (including
reasonable attorneys' fees) except as arising from events listed here below in
paragraph 5.4 to which PharmaPrint is or may become subject insofar as they
arise out of or are alleged or claimed to arise out of:
(i) personal injury, death or property damage sustained by any
person(s) resulting from the use of the Herbal Product defectively manufactured
by Xxxxxx,
(ii) any material breach by Xxxxxx of any covenants or warranties of
Xxxxxx, or
(iii) any grossly negligent or willful act or omission by Xxxxxx or its
employees, agents or subcontractors.
5.4 PharmaPrint shall indemnify, defend and hold harmless Xxxxxx, its
subsidiaries, and employees from all actions, losses, claims, demands, costs and
liabilities (including reasonable attorneys' fees) to which Xxxxxx is or may
become subject insofar as they arise out of or are alleged or claimed to arise
out of:
10
(i) any grossly negligent or willful act or omission by PharmaPrint
or its employees, agent or subcontractors,
(ii) personal injury, death or property damage sustained by any
person(s) resulting from the (A) use of the Herbal Product manufactured by
PharmaPrint or by a third party in accordance with Paragraph 3.1 or (B) any
matter or process (including the Specifications) specified by PharmaPrint or (C)
any changes to or adulteration of the Herbal Product after shipment by Xxxxxx or
(D) the Herbal Product manufactured by Xxxxxx if Xxxxxx has followed the matters
or processes (including the Specifications) specified and established by
PharmaPrint and in other respects has manufactured in accordance with GMP and
all applicable laws in the Territory,
(iii) any labeling, advertising or promotional materials used by
PharmaPrint, or
(iv) any material breach by Xxxxxx of any covenants or warranties of
Xxxxxx.
5.5 PharmaPrint represents and warrants that to the best of its knowledge and
belief, the manufacture of the Herbal Product hereunder does not infringe any
third party patents in the United States or anywhere in the Territory.
PharmaPrint undertakes to indemnify and hold harmless Xxxxxx against all
judgements, decrees, costs and expenses, including attorney's fees, resulting
from any alleged infringement and shall make its best efforts to defend, upon
written request of Xxxxxx, any claim of patent infringement in the use and/or
sale of the Herbal Product manufactured by Xxxxxx under this Agreement. Xxxxxx
shall provide promt notice to PharmaPrint of any such claim of patent
infringement and PharmaPrint shall have complete control over any defense or
settlement of such claim.
5.6 Xxxxxx shall maintain, during the term of this Agreement, comprehensive
general liability insurance with an insurance carrier reasonably acceptable to
PharmaPrint, which insurance policy or policies shall maintain the full products
hazards provisions with the Herbal Product hazards limits subject to deductibles
not in excess of $10,000 in the aggregate, and with at least $2,500,000 per
occurrence and at least $2,500,000 overall coverage for claims of bodily injury
and property damage arising out of any loss. Such policy or policies shall
extend coverage with respect to occurrence during a policy period, regardless of
the dates on which claims arising for such occurrences are made, and shall
include PharmaPrint as named insured in such policy or policies. Both parties
shall provide notice to the other of any loss, whether actual or threatened,
promptly upon receipt of notice thereof.
5.7 PharmaPrint shall maintain, during the term of this Agreement,
comprehensive general liability insurance with an insurance carrier reasonably
acceptable to Xxxxxx, which insurance policy or policies shall maintain the full
products hazards provisions with the Herbal Product hazards limits subject to
deductibles not in excess of $10,000 in the aggregate, and with at least
$2,500,000 per occurrence and at least $2,500,000 overall coverage for claims of
bodily injury and property damage arising out of any loss. Such policy or
policies shall extend coverage with respect to occurrence during a policy
period,
11
regardless of the dates on which claims arising for such occurrences are made,
and shall include Xxxxxx as named insured in such policy or policies. Both
parties shall provide notice to the other of any loss, whether actual or
threatened, promptly upon receipt of notice thereof.
5.8 A party entitled to indemnification hereunder agrees to give prompt
written notice (in no event later than ten (10) business days following its
receipt) to the indemnifying party after the receipt by such party of any
written notice of the commencement of any action, suit, proceeding or
investigation or threat thereof made in writing for which such party will claim
indemnification pursuant to this Agreement. Unless, in the reasonable judgment
of the indemnifying party a conflict of interest may exist between the
indemnified party and the indemnifying parry with respect to a claim, the
indemnifying party may assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If the indemnifying party is not
entitled to, or elects not to, assume the defense of a claim, it will not be
obligated to pay the fees and expenses of more than one counsel with respect to
such claim. The indemnifying party will not be subject to any liability for any
settlement made without its consent, which shall not be unreasonably withheld.
5.9 The provisions and obligations of this Article V shall survive any
termination or expiration of this Agreement.
ARTICLE VI
CONFIDENTIALITY AND PUBLICITY
6.1 In connection with prior related disclosures and work, pursuant to the
Confidential Disclosure Agreement between the parties of January 24, 1997, which
Agreement is incorporated herein by reference, and with the negotiation,
execution and performance of this Agreement, Xxxxxx and PharmaPrint have had and
will have access to certain confidential and proprietary information of each
other, including, but not limited to, financial data, know-how, trade secrets,
technology, PharmaPrint's Patent Rights relating to the PharmaPrint process and
certain mutual information concerning the identification, characterization and
standardization of the biological active components, their biological activity
and their percent in the composition of the Herbal Products of this Agreement.
Recognizing that such information is all confidential and represents valuable
assets and property to both parties, and the harm that may befall such parties
if any of such information is disclosed, Xxxxxx and PharmaPrint agree that for a
period of ten (10) years after the execution of the January 24, 1997,
Confidential Disclosure Agreement between the parties, referred to above, to
hold all such information in confidence and not to use or otherwise disclose any
such information to third parties without the prior written consent of the other
party: PROVIDED, HOWEVER, that the obligations of confidentiality created herein
shall cease to apply to information: (a) that can be demonstrated through
documentary evidence to be in, or to come into, the public domain through no
fault of Xxxxxx or
12
PharmaPrint; (b) that can be demonstrated through documentary evidence to have
been in either parties possession prior to its disclosure, or can be
demonstrated through documentary evidence to have been later disclosed to either
party by a third party who, to the receiving party's knowledge, was under no
obligation to keep such information confidential; and (c) which, in the written
opinion of legal counsel for either party, is required to be disclosed by law or
regulation or by the rules of any stock exchange on which Xxxxxx'x PharmaPrint's
securities are listed, but only to the extent so required and only upon five (5)
business days written notice to and followed by consultation with the other
party.
6.2 Xxxxxx shall submit to PharmaPrint and PharmaPrint shall submit to Xxxxxx
all advertising, herbal product labeling, herbal product literature, written
sales promotions, press releases and other publicity matters relating in any way
to this agreement or its general subject matter in which Xxxxxx'x trademarks,
and/or PharmaPrint's trademarks, the PharmaPrint-Registered Trademark- Process,
or the Herbal product produced by said process is mentioned or that contains
language from which the connection of said name, trademark, PharmaPrint
-Registered Trademark- Process or the Herbal Product made thereby may be implied
or inferred and neither party shall not publish or use such advertising, sales
promotion, press release or publicity matters without either parties prior
written consent.
6.3 In the event Xxxxxx or PharmaPrint or any of their officers, employees or
consultants is requested or required by subpoena, order, discovery request or
similar process or by applicable law or regulation or the rules of any stock
exchange on which such Xxxxxx or PharmaPrint securities are listed to disclose
any information that is required to be held in confidence pursuant to paragraph
6.1 of this Agreement, and Xxxxxx or PharmaPrint is required to disclose such
information the disclosing party shall provide advance notice and a copy of the
proposed disclosure to the other party and will consult with the other party
with respect to taking legally available steps to resist or narrow such request
or disclosure. If disclosure of such information is required and Xxxxxx or
PharmaPrint is required to disclose such information, it shall furnish only
that portion of the information that, in the written opinion of the disclosing
parties counsel, such party is legally required to disclose and shall cooperate
with any action by the non-disclosing party (at the non-disclosing party's
expense) to obtain an appropriate protective order or written or equally
reliable assurance that confidential treatment shall be accorded the information
13
ARTICLE VII
NON-COMPETITION
7.1 During the term of this Agreement (or until termination) and for a period
of three (3) years thereafter, Xxxxxx will not engage in the PharmaPrint
-Registered Trademark- Process and/or the production of the Herbal Product, as
described herein, for itself or for third parties for marketing and sale.
7.2 Xxxxxx admits and agrees that no right or license is granted to it or its
customers or clients (by implication or otherwise) by PharmaPrint under its
proprietary technology, know how, or trade secrets or Patent Rights and/or
Trademarks or by the performing of Xxxxxx'x obligations to PharmaPrint under and
pursuant to the Development and Verification Agreement, this Agreement or the
Additional Supply Agreements contemporaneously entered into between the parties.
ARTICLE VIII
PAYMENT SCHEDULE
8.1 Payments by PharmaPrint for the Herbal Product delivered by Xxxxxx shall
be due and payable thirty (30) days after such Herbal Products are received by
PharmaPrint, or PharmaPrint's designated contract manufacturer unless otherwise
agreed to in writing by the parties. In such an event the net thirty (30) day
payments are not met and Xxxxxx has provided PharmaPrint with due correspondence
of intention and complied with the termination provisions contained herein,
Xxxxxx retains the right to revoke the supply terms.
ARTICLE IX
DURATION AND TERMINATION
9.1 This Agreement shall continue in full force and effect until December 31,
2000 unless terminated by either party pursuant to the provisions set forth in
this Article X. Further, Xxxxxx hereby grants PharmaPrint an option to extend
this Agreement on substantially the same terms of this Agreement on a year-to-
year basis if PharmaPrint gives written notice to Xxxxxx that it is exercising
the option herein granted on or before July 1st of the year in which this
Agreement would otherwise expire by its terms.
9.2 PharmaPrint and Xxxxxx may terminate this Agreement in its entirety, upon
mutual agreement, at any time upon thirty (30) days written notice to the other
party. At the sole discretion of PharmaPrint, this agreement can be terminated
per the termination terms and conditions of their "AHP DSHEA Product Agreement"
as consistent with Para. 2.11.
14
9.3 Either party hereto shall be entitled to terminate this Agreement upon
thirty (30) days written notice to the other party if the other party shall
commit a breach of any material provision hereof and shall not within thirty
(30) days from receipt of notice of such breach by the complaining party remedy
the same (if capable of remedy).
9.4 Insofar as is lawful and legally permissible, this Agreement may be
terminated with immediate effect by a party upon giving written notice to the
other if the other is insolvent or has committed any act of bankruptcy or an
order is made or resolution passed for the winding up of the other party.
9.5 Failure on the part of either party to exercise or enforce any right
conferred upon it hereunder shall neither be deemed to be a waive of any such
right nor operate to bar the exercise or enforcement thereof at any time
thereafter.
ARTICLE X
MISCELLANEOUS
10.1 Any notice required or permitted under this Agreement shall be in writing
and deemed to have been sufficiently provided and effectively made as of the
delivery date if hand-delivered with written acknowledge thereof, or as of the
date received if mailed by registered or certified mail, postage pre-paid, and
addressed to the receiving party at its respective address, as follows:
XXXXXX, INC.
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: President
PHARMAPRINT, INC.
0 Xxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attn: President
10.2 The relationship of the parties under this Agreement is that of
independent contractors and not as agents of each other or partners or joint
ventures, and neither party shall have the power to bind the other in any way
with respect to any obligation to any third party unless a specific power of
attorney is provided for such purpose. Each party shall be solely and
exclusively responsible for its own employees and operations.
15
10.3 In the event that the performance of this Agreement or of any obligation
hereunder, other than payment of money as herein provided by either party hereto
is prevented, restricted or interfered with by reason of any cause not within
the control of the respective party, and which could not by reasonable diligence
have been avoided by such party, the party so affected, upon giving prompt
notice to the other party, as to the nature and probable duration of such event
shall be excused from such performance to the extent and for the duration of
such prevention, restriction or interference, provided that the party so
affected shall use its reasonable efforts to avoid or remove such cause of non-
performance and shall fulfill and continue performance hereunder with the utmost
dispatch whenever and to the extent such cause or causes are removed.
10.4 For the purpose of the preceding paragraph but without limiting the
generality hereof, the following shall be considered as not within the control
of the respective party; acts of God, acts or omissions of a governmental
agency, compliance with requests, recommendations, rules regulations or orders
of any governmental authority or any officer, department, agency or instrument
thereof, flood, storms, earthquake, fire, war, riots, insurrection, accidents,
acts of the public enemy, invasion, quarantine restrictions, strike, lockout,
embargoes, delays or failure in transportation and acts of a similar nature.
10.5 Should one of the provisions of this Agreement become or prove to be null
and void, such will be without effect on the validity of this Agreement as a
whole. Both parties will, however, endeavor to replace the void provision by a
valid one which in its economic effect is most consistent with void provision.
10.6 This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to principles of conflicts of laws.
10.7 This Agreement and the rights and obligations hereunder shall not be
assignable by Xxxxxx without the previous written consent of PharmaPrint which
consent will not be unreasonably withheld. PharmaPrint may assign this
Agreement (i) in connection with the transfer of all or substantially all of the
business to which it relates without any such consent, and (ii) in whole or in
part to a PharmaPrint Affiliate without any such consent.
10.8 The rights, duties and obligations of Paragraph 2.11 and Articles V, VI,
VII and VIII shall survive the termination or expiration of this Agreement.
10.9 This Agreement and the Agreements referenced herein constitutes the
entire understanding between the parties regarding the subject matter hereof in
the Territory and no party has relied on any representation not expressly set
forth or referred to in this Agreement. No amendment, variation, waiver or
modification of any of the terms or provisions of this Agreement shall be
effected unless set forth in writing, specifically referencing this Agreement,
and duly signed on behalf of the parties hereto.
16
10.10 No press release or other public announcement concerning this Agreement
shall be made by either party without the prior written approval of the other
party hereto, which approval shall not be unreasonably withheld, except as
otherwise required by law according to the written opinion of outside legal
counsel. Press releases or other public announcements reasonably required by
law according to the opinion as aforementioned shall be reviewed with the other
party and their comments given due consideration.
IN WITNESS WHEREOF, the duly authorized representatives of the parties
hereto have caused this Agreement to be executed effective as of the date set
forth above.
XXXXXX, INC. PHARMAPRINT INCORPORATED
By: /s/ Xxxxxx Xxxx By: /s/ X. X. Xxxxxxx
--------------------------- ----------------------------
Title: COO Title: COO
------------------------ -------------------------
NOVEMBER 4, 1997, 10:47 AM
