Exhibit 10.17
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
COMMERCIAL SUPPLY AGREEMENT
This Commercial Supply Agreement (this "Agreement") is entered into on Dec. 4,
2002 (the "Signing Date"), effective as of the 1st day of June, 2002 (the
"Effective Date") by and between XXXXXX PHARMACEUTICAL SOLUTIONS LLC ("BAXTER"),
a Delaware limited liability company having a place of business at 000 Xxxxx
Xxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxx 00000, and PRAECIS PHARMACEUTICALS INCORPORATED
("PRAECIS"), a Delaware corporation having a principal place of business at 000
Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000.
RECITALS
1. PRAECIS is engaged in the development, bulk production, formulation,
sale and distribution of pharmaceutical products;
2. BAXTER is engaged in the filling, labeling and packaging of
pharmaceutical products;
3. PRAECIS and BAXTER desire to have BAXTER fill, package, inspect,
label, and test pharmaceutical products for distribution and sale by
PRAECIS;
4. In order to induce PRAECIS to enter into this Agreement, Xxxxxx
Healthcare Corporation, the parent company of BAXTER, has agreed to
guarantee the performance of BAXTER hereunder as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties agree as follows:
ARTICLE 1, DEFINITIONS
As used in this Agreement, the following words and phrases shall have the
following meanings:
1.1 "AFFILIATE" of a party hereto shall mean any entity that controls or
is controlled by such party, or is under common control with such
party. For purposes of this definition, an entity shall be deemed to
control another entity if it owns or controls, directly or
indirectly, at least fifty percent (50%) of the voting equity of
another entity (or other comparable ownership interest for an entity
other than a corporation).
1.2 "ANDA" shall mean the FDA-required Abbreviated New Drug Application.
1.3 "ANNUAL OBLIGATION" shall be defined in Section 4.1.3(c).
1.4 "BATCH" shall mean a specific quantity of a Product comprising a
number of units mutually agreed upon between PRAECIS and XXXXXX (as
set forth in the Product Master Plan), and that is intended to have
uniform character and quality within specified limits.
1.5 "BAXTER QUALITY ASSURANCE RELEASE" shall mean approval of Produced
Product by the BAXTER Quality Assurance team based on the Product's
conformance to the Product Requirements.
1.6 "BAXTER SOPS" shall mean XXXXXX'x Standard Operating Procedures,
which PRAECIS shall have the right to access and inspect during
annual audits; provided, however, specific BAXTER SOPs can be
requested and reviewed by PRAECIS on an individual basis at any
time.
1.7 "CANCELLATION FEES" shall mean the fees payable by PRAECIS for
modification or cancellation of a Firm Purchase Order, if any, as
set forth in the Product Master Plan.
1.8 "COMPONENTS" shall mean all materials, including without limitation
packaging materials, used by BAXTER in the Production of Product
under this Agreement. Components are listed in the Product Master
Plan. Such Components are identified as Components supplied by
PRAECIS ("PRAECIS Supplied Components") or Components supplied by
BAXTER ("BAXTER Supplied Components").
1.9 "COMPONENT SPECIFICATIONS" shall mean the specifications and testing
to be performed for the Components, as set forth in the Product
Master Plan.
1.10 "CONFIDENTIAL INFORMATION" shall have the meaning set forth in the
Confidentiality Agreement dated as of December 4, 2001 by and
between Xxxxxx Healthcare Corporation and PRAECIS.
1.11 "CURRENT GOOD MANUFACTURING PRACTICES" or "CGMP" shall mean: (a) the
good manufacturing practices required by the FDA and set forth in
the FD&C Act or FDA Regulations (including without limitation 21 CFR
210 and 211), policies or guidelines, in effect at any time during
the Term of this Agreement, for the Production and testing of
pharmaceutical materials as applied solely to Products, and (b) the
corresponding requirements of each applicable Regulatory Authority.
2
1.12 "DELIVERY DATE" with respect to a Batch of Product shall mean the
date of XXXXXX'x Quality Assurance Release of such Batch of Product.
1.13 "DRUG PRODUCT INTERMEDIATE" shall mean the intermediate formulated
Abarelix used as the raw material in the Production of Product.
1.14 "EFFECTIVE DATE" shall mean the date on which this Agreement first
comes into effect, as set forth above.
1.15 "FDA" shall mean the United States Food and Drug Administration or
any successor organization thereto.
1.16 "FD&C ACT" shall mean the United States Federal Food, Drug and
Cosmetic Act, as may be amended from time to time.
1.17 "LONG RANGE FORECAST" shall be defined in Section 4.1.1.
1.18 "MASTER BATCH RECORD" shall mean, with respect to each Presentation
of Product to be Produced hereunder, a formal set of instructions
for the Production of each Presentation of such Product. Each Master
Batch Record shall be developed by BAXTER and subject to the written
approval of PRAECIS.
1.19 "NDA" shall mean the FDA-required New Drug Application.
1.20 "PRAECIS TRADEMARKS" shall mean the proprietary xxxx(s) for Product
owned by PRAECIS as stated in a Project Plan.
1.21 "PRESENTATION" shall mean the specific formula and Components of a
Product.
1.22 "PRODUCE" or "PRODUCTION" shall mean XXXXXX'x filling and inspecting
of the Drug Product Intermediate in unlabeled vials, reviewing the
Released Executed Batch Record (including without limitation
reviewing the irradiation documentation following the irradiation of
the Drug Product Intermediate) and testing of the resulting Product,
all in accordance with the Product Master Plan and the Project Plan.
Details of the Production process shall be included in the Master
Batch Record.
1.23 "PRODUCT" shall mean the resulting Drug Product Intermediate in
unlabeled vials following Production by BAXTER in accordance with
the Product Master Plan and the Project Plan.
1.24 "PRODUCT MASTER PLAN" shall mean an addendum to this Agreement for
each Product Produced hereunder, which may include, without
limitation, the Product, Product Specifications, Components,
Component Specifications, Regulatory Authorities and BAXTER SOPs
related to the Production of the Product, the countries where such
Product will be sold, Presentations, Cancellation Fees and pricing
for such Product Produced under this Agreement, developed as
described
3
in Section 2.1. The Product Master Plan for the first Product to be
Produced under this Agreement is set forth in Exhibit 1.
1.25 "PRODUCT REQUIREMENTS" shall be defined in Section 7.1.
1.26 "PRODUCT SPECIFICATIONS" shall mean, with respect to each Product,
the specifications and testing procedures developed by PRAECIS and
BAXTER to be performed for the Drug Product Intermediate, the
Product, and/or the stability program that are set forth in the
BAXTER SOPs and the Master Batch Records. The Product Specifications
include, without limitation, all tests that BAXTER is required to
conduct or cause to be conducted as specified in the Product Master
Plan and Project Plan. The Product Specifications may be modified
from time to time only by the written agreement of PRAECIS and
BAXTER.
1.27 "PROJECT PLAN" shall mean the manual containing the parameters for
the Production of each Presentation of Product, including without
limitation the Testing Standards and Procedures for each
Presentation of Product under this Agreement, developed as described
in Section 2.2.
1.28 "PURCHASE ORDER" shall mean written orders from PRAECIS to BAXTER
which shall specify key production information with respect to the
ordered Product including, without limitation: (a) the quantity of
Product ordered, (b) delivery and shipping instructions, both with
respect to the final Product and with respect to work-in-process
during Production, (c) the scheduled date for PRAECIS' delivery of
Drug Product Intermediate to BAXTER, (d) the scheduled date of
filling, and (e) the proposed Delivery Date.
1.29 "PURCHASE PRICE" shall be defined in Section 5.1
1.30 "QUALITY ASSURANCE DISPOSITION" shall mean the document issued by
PRAECIS pursuant to Section 7.1 to indicate PRAECIS' determination
that a Batch released by BAXTER conforms to the Product
Requirements.
1.31 "REGULATORY APPROVAL" shall mean all authorizations by the
appropriate Regulatory Authority necessary for commercial sale in a
jurisdiction, including without limitation, approval of labeling,
price, reimbursement and Production.
1.32 "REGULATORY AUTHORITY" shall mean those agencies or authorities
responsible for regulation of the Product in the United States and
overseas (which shall include, without limitation, the U.S.
Pharmacopoeia and European Pharmacopoeia, if applicable), as
specified in the Product Master Plan. BAXTER shall have no
obligation to Produce Product in compliance with the requirements of
a Regulatory Authority not specified in the applicable Product
Master Plan, Project Plan or Regulatory Plan.
4
1.33 "REGULATORY PLAN" shall mean the manual describing the regulatory
services and support to be provided by BAXTER for the development
and maintenance of regulatory submissions and supporting
documentation as set forth in Section 2.3.
1.34 "RELEASED EXECUTED BATCH RECORD" shall mean the completed batch
record and associated deviation reports, investigation reports and
certificates of analysis created by BAXTER for each Batch released
by BAXTER. The Released Executed Batch Record shall be sent to
PRAECIS in accordance with Section 9.3. The Released Executed Batch
Record shall be in a format as agreed between the parties and shall
contain at a minimum the information set forth in Exhibit 2 to this
Agreement.
1.35 "ROLLING FORECAST" shall be defined in Section 4.1.2.
1.36 "SATELLITE SAMPLE" shall mean a prepared quantity of the Drug
Product Intermediate representing the Drug Product Intermediate that
will be used by BAXTER for Production. BAXTER shall use the
Satellite Sample to conduct quality control tests of the Drug
Product Intermediate prior to commencing Production of the relevant
Batch, in accordance with Exhibit D1 of the Product Master Plan.
1.37 "TERM" shall be defined in Section 8.1.
1.38 "TESTING STANDARDS AND PROCEDURES" shall mean, with respect to each
Product Produced hereunder, the written standards and procedures for
evaluating compliance with the applicable Product Specifications, as
mutually agreed upon in writing by PRAECIS and BAXTER, and
incorporated in the applicable Project Plan.
ARTICLE 2, PROJECT AND REGULATORY PLANS
2.1 PRODUCT MASTER PLAN. From time to time during the Term of the
Agreement, PRAECIS may request that BAXTER Produce a Product for
PRAECIS hereunder. For each Product to be Produced by BAXTER
hereunder, the parties shall agree in writing upon a Product Master
Plan. PRAECIS shall deliver to BAXTER the information that BAXTER
and PRAECIS agree in writing is necessary for BAXTER to prepare each
Product Master Plan. BAXTER then shall deliver two (2) copies of
each Product Master Plan to PRAECIS within three (3) weeks of
receipt of PRAECIS' information. PRAECIS shall either sign such
Product Master Plan and return one (1) copy to BAXTER or shall
return an amended Product Master Plan acceptable to PRAECIS, in each
case within ten (10) business days of receipt of such Product Master
Plan from BAXTER. If such amended Product Master Plan is not
acceptable to BAXTER, then BAXTER shall so notify PRAECIS within ten
(10) business days of XXXXXX'x receipt of such amended Product
Master Plan, and the parties shall promptly meet in order to resolve
in good faith any outstanding disagreements with respect to such
amended
5
Product Master Plan. In no event shall BAXTER be required to
schedule the Production of any Product until a Product Master Plan
for such Product has been approved in writing by both BAXTER and
PRAECIS.
2.2 PROJECT PLAN. For each Presentation of Product to be Produced
hereunder, the parties shall agree in writing upon a Project Plan.
BAXTER shall deliver two (2) copies of each Project Plan to PRAECIS
at least *** prior to the commencement of Production of the
applicable Presentation of Product. PRAECIS shall either sign such
Project Plan and return one (1) copy to BAXTER or shall return an
amended Project Plan acceptable to PRAECIS, in each case within ten
(10) business days of receipt of such Project Plan from BAXTER. If
such amended Project Plan is not acceptable to BAXTER, then BAXTER
shall so notify PRAECIS within ten (10) business days of XXXXXX'x
receipt of such amended Project Plan, and the parties shall promptly
meet in order to resolve in good faith any outstanding disagreements
with respect to such amended Project Plan. In no event shall BAXTER
be required to schedule or commence the Production of the
Presentation of the applicable Product until a Project Plan for such
Presentation of Product has been approved in writing by both BAXTER
and PRAECIS.
2.3 REGULATORY PLAN. If requested by PRAECIS, BAXTER shall provide
regulatory services in connection with obtaining Regulatory Approval
for a Product. BAXTER shall deliver to PRAECIS two (2) copies of the
Regulatory Plan for each Product requested by PRAECIS at least
fourteen (14) calendar days after such PRAECIS request and prior to
the date that BAXTER is to initiate Production of the registration
Batches of the applicable Product. PRAECIS shall either sign such
Regulatory Plan and return one (1) copy to BAXTER or shall return an
amended Regulatory Plan acceptable to PRAECIS, in each case within
ten (10) business days of receipt of such Regulatory Plan from
BAXTER. If such amended Regulatory Plan is not acceptable to BAXTER,
then BAXTER shall so notify PRAECIS within ten (10) business days of
XXXXXX'x receipt of such amended Regulatory Plan, and the parties
shall promptly meet in order to resolve in good faith any
outstanding disagreements with respect to such amended Regulatory
Plan. BAXTER shall have no obligation to conduct regulatory services
for a Product until the Regulatory Plan for such Product has been
agreed upon by the parties.
2.4 AMENDMENT OF PLANS. Each Project Plan, Regulatory Plan and Product
Master Plan may be amended from time to time only upon mutual
written agreement of PRAECIS and BAXTER.
2.5 NO AMENDMENT OF AGREEMENT. No Project Plan, Regulatory Plan or
Product Master Plan shall be deemed to amend this Agreement. In the
event that the terms of any Project Plan, Regulatory Plan or Product
Master Plan are inconsistent with the terms of this Agreement, this
Agreement shall control, unless otherwise
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
6
explicitly agreed to in a writing by the parties, expressly
indicating an intent by the parties to amend this Agreement in
accordance with Article 26. Upon approval in writing by both BAXTER
and PRAECIS of any Project Plan, Regulatory Plan or Product Master
Plan, such Project Plan, Regulatory Plan or Product Master Plan
shall be deemed to be incorporated herein by reference and made a
part of this Agreement.
2.6 EFFECT OF FAILURE TO EXECUTE PLANS OR ADDENDUM. No failure to
execute a Project Plan, Product Master Plan or Regulatory Plan with
respect to a particular Product will relieve either party of any
obligation that has accrued with respect to such Product. Provided,
however, that PRAECIS shall not be liable for any such accrued costs
or expenses incurred by BAXTER in connection with such Product
unless such costs or expenses had been expressly approved in writing
by PRAECIS prior to such costs or expenses having been incurred.
ARTICLE 3, PURCHASE AND SUPPLY OF PRODUCT
3.1 AGREEMENT TO PURCHASE AND SUPPLY. Pursuant to the terms and
conditions of this Agreement, BAXTER shall Produce and deliver to
PRAECIS the amounts of Product ordered by PRAECIS in accordance with
Section 4.2.
3.2 REPRODUCTION, REWORK OR REPROCESSING. Any reprocessing, rework,
reproduction or change required during Production in order to meet
the Product Requirements must be approved in writing by PRAECIS
prior to implementation. BAXTER shall conduct such reprocessing,
rework, reproduction or change in compliance with cGMPs and the NDA
or ANDA, unless otherwise specifically agreed in writing by PRAECIS.
PRAECIS shall be responsible for all costs and expenses incurred in
connection with such reprocessing, rework, reproduction or change
unless such reprocessing, rework, reproduction or change is required
solely as a result of: (a) the negligence or willful misconduct of
BAXTER, its officers, directors, employees or agents; (b) breach by
BAXTER of its representations, warranties, covenants or other
obligations under this Agreement; or (c) failure of any BAXTER
Supplied Component to conform to the relevant Component
Specifications, in which case (whether (a), (b) and/or (c)) BAXTER
shall be responsible for such costs and expenses.
3.3 DRUG PRODUCT INTERMEDIATE AND PRAECIS SUPPLIED COMPONENTS DELIVERY.
PRAECIS, at its expense, shall deliver or cause to be delivered to
BAXTER: (a) a reasonably sufficient amount of Drug Product
Intermediate and applicable certificate of analysis therefor and (b)
all other PRAECIS Supplied Components, in each case either (i) at
least *** before XXXXXX'x scheduled date of *** for the
Product (such date provided by BAXTER to PRAECIS as set forth in
Section 4.2) if the Drug Product Intermediate is accompanied by a
Satellite Sample, or (ii) at least *** before XXXXXX'x scheduled
date of *** for the Product if the Drug Product Intermediate is
not accompanied by a Satellite
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
7
Sample. Drug Product Intermediate and PRAECIS Supplied Components
shall be delivered to BAXTER DDP Bloomington, IN (INCOTERMS 2000).
All PRAECIS Supplied Components shall conform in all respects to the
relevant Component Specifications.
3.4 MATERIAL SAFETY DATA SHEET. PRAECIS shall provide BAXTER a Material
Safety Data Sheet for Drug Product Intermediate and for each
Product. BAXTER shall immediately notify PRAECIS of any unusual
health or environmental occurrence relating to Production or the
Product, including, but not limited to, any claim or complaint by
any employee of BAXTER or any of its Affiliates or third party that
the operations of BAXTER pursuant to this Agreement have resulted in
any adverse health or safety effect on an employee or third party.
BAXTER agrees to advise PRAECIS immediately of any safety or
toxicity problems of which it becomes aware regarding Production or
the Product.
3.5 VENDOR AND SUPPLIER AUDIT AND CERTIFICATION. BAXTER shall not use
any vendor or supplier, other than the vendors and suppliers
specified in the applicable Product Master Plan or Project Plan,
without the prior written consent of PRAECIS. BAXTER and PRAECIS
shall work together to conduct audits and PRAECIS shall approve all
Product-related vendors and suppliers, at PRAECIS' expense. BAXTER
shall keep PRAECIS informed of all actions taken by BAXTER in
connection with any such audits and all expenses in connection with
the same shall be submitted to PRAECIS for prior written approval.
Upon PRAECIS' approval of such vendors and suppliers, BAXTER shall
add such vendors and suppliers to XXXXXX'x list of audited vendors
and suppliers, as specified in the Product Master Plan.
3.6 BAXTER SUPPLIED COMPONENTS. BAXTER will purchase, at XXXXXX'x
expense, the BAXTER Supplied Components, including without
limitation all packaging materials listed in the applicable Product
Master Plan and Project Plan, all primary container Components and
all secondary packaging materials, required to Produce the Product
in quantities sufficient to meet PRAECIS' Purchase Orders for such
Product consistent with Article 4, at no additional cost to PRAECIS.
All BAXTER Supplied Components shall conform in all respects to the
relevant Component Specifications and BAXTER shall control and
maintain inventory of all BAXTER Supplied Components. BAXTER shall
not initiate any changes to any BAXTER Supplied Components without
the prior written consent of PRAECIS.
3.7 IMPORTER OF RECORD. In the event any material or equipment to be
supplied by PRAECIS, including, without limitation, PRAECIS Supplied
Components and Drug Product Intermediate, is imported into the
United States for delivery to BAXTER ("Imported Goods"), such
Imported Goods shall be imported DDP Bloomington, IN (INCOTERMS
2000). PRAECIS shall be the "Importer of Record" of such Imported
Goods. As the Importer of Record, PRAECIS shall be
8
responsible for all aspects of the Imported Goods including, without
limitation: (a) customs and other regulatory clearance of Imported
Goods; (b) payment of all tariffs, duties, customs, fees, expenses
and charges payable in connection with the importation and delivery
of the Imported Goods; and (c) keeping all records, documents,
correspondence and tracking information required by applicable laws,
rules and regulations arising out of or in connection with the
importation or delivery of the Imported Goods.
3.8 STORAGE.
3.8.1 DRUG PRODUCT INTERMEDIATE AND COMPONENT STORAGE. In no event
shall BAXTER be required to store more than a *** supply
of Drug Product Intermediate and Components, as calculated
using the Rolling Forecast, without the prior written
consent of BAXTER and PRAECIS' agreement to reimburse BAXTER
for all costs incurred in connection with such storage.
3.8.2 THIRD PARTY STORAGE. BAXTER shall be permitted to store
Components (but not Drug Product Intermediate or Product) in
third party storage facilities approved in writing by
PRAECIS; provided, however, that: (a) BAXTER shall provide
PRAECIS with no less than thirty (30) days' written notice
prior to storing Components at any such third party
facilities, and (b) any such storage at third party
facilities shall in no way release BAXTER for any liability
for such stored Components and BAXTER shall remain fully
liable therefor in accordance with the terms of this
Agreement.
ARTICLE 4, FORECASTS, ORDERS AND CAPACITY
4.1 FORECASTS AND COMMITMENTS.
4.1.1 LONG RANGE FORECAST. Within *** from the Signing Date,
and prior to *** , 2003, and *** of each
subsequent year thereafter, PRAECIS will provide to BAXTER
in writing an annual forecast for each calendar year during
the remainder of the Term (up to five (5) forecasted years)
of PRAECIS' estimated Purchase Order quantities of vials of
Product to be Produced and delivered to PRAECIS (the "Long
Range Forecast"). BAXTER specifically agrees that the Long
Range Forecasts submitted by PRAECIS will be for general
planning purposes only, and shall not be binding on PRAECIS
or BAXTER except as provided in Section 4.1.3(c).
4.1.2 ROLLING FORECAST. Within thirty (30) days from the Signing
Date, and prior to the tenth (10th) day of each April, July,
October and January thereafter, PRAECIS will provide BAXTER
in writing a quarterly rolling forecast of PRAECIS'
estimated Purchase Order quantities for Product
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
9
(the "Rolling Forecast") for the following four (4) calendar
quarters. BAXTER specifically agrees that the Rolling
Forecasts submitted by PRAECIS will be for general planning
purposes only, and shall not be binding on PRAECIS or
BAXTER.
4.1.3 PURCHASE AND SUPPLY COMMITMENTS.
(a) BAXTER shall supply PRAECIS with the quantity of
Product ordered by PRAECIS, unless the overall quantity
ordered for a calendar quarter *** of the quantity of
Product forecasted in the immediately preceding Rolling
Forecast for such calendar quarter, in which case BAXTER
shall use all commercially reasonable efforts to supply
quantities *** of such quantity forecasted by PRAECIS
in the immediately preceding Rolling Forecast for such
calendar quarter.
(b) From the Effective Date through the first anniversary
of the Delivery Date of the first Batch shipped by or on
behalf of PRAECIS to third parties for commercial use in the
United States (the "Initial Annual Minimums Period"),
PRAECIS shall order and purchase in any calendar year no
less than three hundred seventy five thousand dollars
($375,000) of Product (the "Initial Annual Minimum"). The
Initial Annual Minimum shall be prorated for any period
covered by the Initial Annual Minimums Period that does not
constitute a full calendar year. In the event PRAECIS orders
and purchases less than the Initial Annual Minimum in any
calendar year, then, at the end of such calendar year,
BAXTER may invoice PRAECIS for the difference between the
Purchase Price of Product actually ordered and purchased and
the Initial Annual Minimum and PRAECIS shall pay such amount
within thirty (30) days from the date of invoice.
(c) After the Initial Annual Minimums Period, the first
calendar year of each Long Range Forecast will be used to
determine the minimum quantity that PRAECIS shall purchase
from BAXTER for such calendar year (the "Annual
Obligation"). The Annual Obligation will be calculated as
*** of the forecasted quantity for the first year of the
Long Range Forecast (for purposes of calculating the first
such Annual Obligation, using the Long Range Forecast whose
first calendar year includes the date on which the Initial
Annual Minimums Period expired, and prorating such Annual
Obligation based on the months remaining in such calendar
year); provided, however, in no event shall the Annual
Obligation be a quantity which would generate an aggregate
Purchase Price of Product less than six hundred fifty
thousand dollars ($650,000). The Annual Obligation shall be
applicable only when BAXTER is not in breach of its
obligations under this Agreement and all Firm Purchase
Orders (as defined in Section 4.2)
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
10
have been filled in accordance with the terms and conditions
of this Agreement.
4.2 PURCHASE ORDERS. In order to purchase Product under this Agreement,
PRAECIS shall submit Purchase Orders to XXXXXX. PRAECIS shall not,
without the written consent of XXXXXX, propose a Delivery Date in a
Purchase Order earlier than *** from the date PRAECIS submits
the Purchase Order; provided, however, that for Purchase Orders that
PRAECIS designates are for audit dose Batches, such proposed
Delivery Date shall not be earlier than *** from the date
PRAECIS submits the Purchase Order. No later than ten (10) days
after receipt by XXXXXX of a Purchase Order, XXXXXX shall provide a
confirmation of receipt of such Purchase Order confirming the
Delivery Date of the Product, XXXXXX'x scheduled date of filling for
the Product, and the scheduled date for PRAECIS delivery of the Drug
Product Intermediate for the Product ordered thereunder. Upon
PRAECIS' receipt of the confirmation, such Purchase Order shall
become a "Firm Purchase Order" and the Delivery Date set forth
therein shall be a "Firm Delivery Date" binding upon XXXXXX. In the
event that PRAECIS cancels a Firm Purchase Order without XXXXXX'x
written consent, PRAECIS shall pay the Cancellation Fees, if any, as
set forth in the Product Master Plan as may be modified by each
Project Plan; provided, however, that PRAECIS shall be entitled to
postpone a Firm Delivery Date for up to *** without penalty upon
written notice to XXXXXX, which written notice shall not be given
*** prior to the scheduled date of filling for the Product (such
date provided by XXXXXX to PRAECIS as set forth in Section 4.2). To
the extent of any conflict between Purchase Orders submitted by
PRAECIS and this Agreement, this Agreement shall control.
4.3 DELIVERY DELAYS.
4.3.1 FAILURE TO MEET FIRM DELIVERY DATE. If XXXXXX is unable to
meet the Firm Delivery Date, then XXXXXX shall so notify
PRAECIS promptly upon becoming aware thereof and shall
provide to PRAECIS an alternative delivery date which shall
not be more than *** later than the Firm Delivery Date
(or such later date as may be agreed by both parties);
provided, however that: (a) XXXXXX shall use commercially
reasonable efforts to make delivery earlier than the
alternative delivery date and as close as possible to the
Firm Delivery Date; and (b) unless otherwise agreed by both
parties, such alternative delivery date may not subsequently
be extended again pursuant to this sentence. In the event
that XXXXXX'x failure to meet the Firm Delivery Date, or any
alternative delivery date, is *** APPROXIMATELY 5 LINES
OMITTED *** , then, in addition to any other rights and
remedies that may be available to PRAECIS, *** .
XXXXXX'x failure to meet a Firm Delivery Date, or any
alternative delivery date, *** shall constitute a
material breach of
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
11
this Agreement if such failures were *** APPROXIMATELY 5
LINES OMITTED *** .
4.3.2 DELAYS IN DRUG PRODUCT INTERMEDIATE AND PRAECIS SUPPLIED
COMPONENTS. XXXXXX shall have no responsibility for delays
in delivery of Product caused solely by delays in receipt of
Drug Product Intermediate or PRAECIS Supplied Components.
Notwithstanding anything in this Agreement or any Firm
Purchase Order to the contrary, in the event that XXXXXX
receives the Drug Product Intermediate for the Production of
Product from PRAECIS outside of the timeframe specified in
Section 3.3, XXXXXX shall *** and XXXXXX shall Produce
such Product as per the original schedule. XXXXXX shall
invoice PRAECIS for such fee and PRAECIS shall pay such fee
within thirty (30) days from the date of invoice.
Notwithstanding the foregoing, in the event XXXXXX receives
the Drug Product Intermediate for Production of Product from
PRAECIS less than *** prior to the scheduled date of
*** for such Product, XXXXXX may cancel Production of such
Product and invoice PRAECIS the Cancellation Fees as set
forth in the Product Master Plan and PRAECIS shall pay such
fees within thirty (30) days from the date of the invoice.
ARTICLE 5, PRICE
5.1 PRODUCT PURCHASE PRICE. The price to be paid by PRAECIS for Product
("Purchase Price") shall initially be as set forth in the Product
Master Plan, and may be adjusted as provided in Section 5.3 and
modified by each Project Plan or an amendment to the Product Master
Plan.
5.2 REGULATORY SERVICES PRICE. The price to be paid by PRAECIS for
regulatory services shall be set forth in the Regulatory Plan.
5.3 PURCHASE PRICE ADJUSTMENT. Upon the first anniversary of the
Effective Date and on each anniversary thereafter, the Purchase
Price of the Product may be adjusted to reflect changes in the cost
of materials provided by XXXXXX and labor costs paid by XXXXXX
directly in connection with the Production of Product. XXXXXX shall
provide PRAECIS with no less than *** written notice of any such
Purchase Price adjustment, which notice shall set forth the amount
of such Purchase Price adjustment and the effective date of such
Purchase Price adjustment. Any Purchase Price increase may not
exceed the average percentage increase in the *** over the
preceding *** period plus *** . Any change in the Purchase
Price in accordance with the foregoing shall be effective for all
such Product ordered after the effective date of the applicable
Purchase Price adjustment.
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
12
ARTICLE 6, SHIPMENT AND INVOICING
6.1 DELIVERY TERMS. All deliveries by XXXXXX under this Agreement,
including final Product and work-in-process during Production, shall
be delivered to the location designated by PRAECIS in the Purchase
Order, EXW (INCOTERMS, 2000) XXXXXX'x facility in Bloomington,
Indiana freight collect, by a common carrier designated by PRAECIS
in the Purchase Order, at PRAECIS' expense; provided, however,
XXXXXX shall be responsible for the loading of the Product (or
work-in-process during Production) on departure and shall bear risk
of loss and all costs of such loading. PRAECIS shall procure, at its
cost, insurance covering damage or loss to the Product (or
work-in-process during Production) during shipping.
6.2 EXPORTER OF RECORD. PRAECIS shall be the exporter of record for any
Product shipped out of the United States. PRAECIS warrants that all
shipments of Product exported from the United States will be made in
material compliance with all applicable United States export laws
and regulations and all applicable import laws and regulations into
the country of importation. PRAECIS shall be responsible for
obtaining and paying for any licenses or other governmental
authorization(s) necessary for exportation of Product Produced by
XXXXXX hereunder from the United States. PRAECIS shall select and
pay the freight forwarder who shall solely be PRAECIS' agent.
PRAECIS and its freight forwarder shall be solely responsible for
preparing and filing the Shipper's Export Declaration and any other
documentation required for the export of Product Produced by XXXXXX
hereunder.
6.3 FOREIGN CORRUPT PRACTICES ACT. PRAECIS acknowledges it is not the
agent of XXXXXX and represents and warrants that it has not, and
covenants that it will not, pay anything of value to any government
employee in connection with the resale of the Product.
6.4 INVOICING AND PAYMENT FOR PRODUCT. The following invoicing and
payment terms shall apply to all Product shipped to PRAECIS in
accordance with Section 6.1 hereof:
STATUS INVOICE DATE PAYMENT DUE
------ ------------ -----------
Production *** Invoice Date + 30 days
Regulatory As set forth in Invoice Date + 30 days
Services Regulatory Plan
Termination of *** Invoice Date + 30 days
Agreement
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
13
6.5 GENERAL PAYMENT TERMS. All payments to be made by one party to the
other under this Agreement shall be made in U.S. Dollars by check
delivered to the receiving party by overnight delivery with a
reputable overnight delivery service. Any payment due under this
Agreement not received within the times noted herein shall bear
interest, compounded monthly, at the lesser of *** .
6.6 DEFAULT IN PRAECIS PAYMENT OBLIGATIONS. In addition to all other
remedies available to XXXXXX in the event of a PRAECIS default, ***
APPROXIMATELY 5 LINES OMITTED *** .
ARTICLE 7, ACCEPTANCE OF PRODUCT
7.1 CONFORMITY REVIEW. Within *** (the "Document Review Period")
from the date the Released Executed Batch Record with respect to a
Batch of Product is delivered to PRAECIS, PRAECIS shall deliver to
XXXXXX a Quality Assurance Disposition or a written notice of
nonconformance ("Notice of Nonconformance") indicating that such
Batch does not conform to cGMPs, Product Specifications, Master
Batch Record or XXXXXX SOPs (collectively the "Product
Requirements"). Notwithstanding the foregoing, in the event that
upon receipt of the Released Executed Batch Record PRAECIS discovers
minor issues, inconsistencies or deviations in such Released
Executed Batch Record, then PRAECIS shall notify XXXXXX promptly and
XXXXXX shall have *** from the date of notification to address
and correct such minor issues, inconsistencies or deviations and
resubmit the Released Executed Batch Record to PRAECIS. Upon receipt
of the resubmitted Released Executed Batch Record, PRAECIS shall
have *** to: (a) issue a Quality Assurance Disposition; (b)
issue a Notice of Nonconformance; or (c) extend the time period for
correction of the outstanding issues, not to exceed an additional
*** unless otherwise agreed to by the parties.
7.2 NOTICE OF NONCONFORMANCE. If PRAECIS delivers a Notice of
Nonconformance to XXXXXX indicating that a Batch does not conform to
the Product Requirements, then XXXXXX will investigate such alleged
non-conformity, and: (a) if XXXXXX agrees such Batch is
non-conforming, deliver to PRAECIS a corrective action plan within
*** after receipt of PRAECIS' Notice of Nonconformance, or such
additional time as is reasonably required if such investigation or
plan requires data from sources other than PRAECIS or XXXXXX; or (b)
if XXXXXX disagrees with PRAECIS' determination that the Batch is
non-conforming, then XXXXXX shall so notify PRAECIS by telephone
within the *** period and confirm such notice in writing by
overnight delivery.
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
14
7.3 REMEDIES FOR NON-CONFORMING PRODUCT.
7.3.1 RESOLUTION OF DISPUTES. If the parties dispute whether a
Batch is conforming or non-conforming, *** , then
samples or documents from the Batch will be submitted to a
mutually acceptable third party laboratory or consultant for
resolution, whose determination of conformity or
non-conformity, and the cause thereof, shall be binding upon
the parties. The non-prevailing party shall bear the costs
of such laboratory or consultant.
7.3.2 REPLACEMENT PRODUCT. In the event XXXXXX agrees that the
Batch is non-conforming or the laboratory or consultant
determines that the Batch is non-conforming pursuant to
Section 7.3.1, XXXXXX shall replace such non-conforming
Batch within the later of: (a) *** from receipt of
replacement Drug Product Intermediate from PRAECIS, or (b)
*** from the date of determination by the laboratory or
consultant of non-conformity or agreement by XXXXXX of such
non-conformity, and such replaced Batch again shall be
subject to the acceptance procedures of this Article 7.
7.3.3 PRAECIS COSTS FOR REPLACEMENT PRODUCT. PRAECIS shall pay for
all Product, including replacement Product and the cost of
Drug Product Intermediate therefor, except as specifically
set forth in Section 7.3.4.
7.3.4 XXXXXX COSTS FOR REPLACEMENT PRODUCT. In the event XXXXXX
agrees, or the laboratory or consultant determines, that a
Batch is non-conforming, *** as a result of: ***
APPROXIMATELY 4 LINES OMITTED *** , then XXXXXX shall
incur the cost of Production of the replacement Batch, shall
reimburse PRAECIS for its actual cost of the Drug Product
Intermediate for the replacement Batch which cost shall not
exceed the amount set forth in the Product Master Plan, and
shall reimburse PRAECIS for its actual cost of the PRAECIS
Supplied Components for the replacement Batch, as specified
in the Product Master Plan.
7.3.5 SOLE REMEDIES AND LIMITATION OF LIABILITY. Except as
provided in Section 7.4, Section 9.4 and Section 14.2, this
Section 7.3 sets forth XXXXXX'x entire liability and
PRAECIS' sole and exclusive remedies for delivery of
non-conforming Product.
7.4 DRUG PRODUCT INTERMEDIATE YIELD ACCOUNTABILITY.
7.4.1 GUARANTEED YIELD The Purchase Price is based upon a
guaranteed yield, expressed as a percentage, of conforming
vials of Product in each Batch (the "Guaranteed Yield").
Starting on the date of the *** of commercial Product to
PRAECIS (not including process validation
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
15
Batches), within *** after the end of each ***
period thereafter XXXXXX shall provide PRAECIS with a
written report showing the actual yield of conforming vials
of Product in each Batch during such *** period (the
"Yield") calculated as set forth in the Product Master Plan.
If the average Yield, expressed as a percentage, for all
such Batches during such *** period (the "Average
Yield") is less than the Guaranteed Yield (as determined
pursuant to Section 7.4.2), then XXXXXX shall credit PRAECIS
with a dollar amount equal to the product of: (a) the cost
to PRAECIS of the Drug Product Intermediate contained ***
in the Batch, multiplied by (b) the difference between the
Guaranteed Yield and the Average Yield, expressed as a
percentage, multiplied by (c) the number of vials filled in
connection with such Batches, calculated as specified in the
Product Master Plan; provided, however, that such dollar
amount shall not exceed the amount set forth in the Product
Master Plan. XXXXXX at all times shall endeavor in good
faith to achieve the highest practical Yield on all Batches.
7.4.2 SETTING THE GUARANTEED YIELD. The Guaranteed Yield for the
first *** Batches (not including process validation
Batches) (the "Initial Guaranteed Yield") shall be the
average yield of conforming vials in the process validation
Batches, which shall be agreed in writing by the parties no
later than the date of the *** non-process validation
shipment of commercial Product to PRAECIS and shall remain
in effect through the *** Batch (not including process
validation Batches). The Guaranteed Yield for the ***
commercial Batch (not including process validation Batches)
and subsequent Batches shall be the average yield of
conforming vials in the first *** Batches (not including
process validation Batches) which shall be agreed in writing
by the parties no later than the date of shipment of such
Batch to PRAECIS and shall remain in effect through the ***
period following the shipment of such Batch. At the end of
such *** period, and every subsequent *** period
thereafter, XXXXXX and PRAECIS shall review the Average
Yield for all Batches of such Product accepted by PRAECIS
during such *** period. If such Average Yield has been
consistently higher or lower than the Guaranteed Yield
during the course of such period, then the Guaranteed Yield
may be revised by the mutual agreement of the parties in
writing. In addition, the Guaranteed Yield may be revised by
mutual agreement of the parties in writing whenever
significant changes are made to the Production process.
7.5 NON-CONFORMING DRUG PRODUCT INTERMEDIATE. If Product is rejected by
PRAECIS and such Product's failure to meet the Product Requirements
is determined in accordance with Section 7.3.1 to be the result of
the failure at the time delivered to XXXXXX of Drug Product
Intermediate to meet the Component
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
16
Specifications for such Drug Product Intermediate, then PRAECIS
shall be solely responsible for such non-conformity and such
non-conformity shall not be deemed to be non-conforming solely as a
result of the negligence or willful misconduct of XXXXXX.
7.6 PRODUCT COMPLAINTS. PRAECIS will promptly notify XXXXXX of any
Product complaints received by PRAECIS which may be related to
Production by XXXXXX and will supply to XXXXXX any samples of
Product which are the subject of such complaint. XXXXXX will notify
PRAECIS promptly of any Product complaints received by XXXXXX which
relate to the Product or the Production. Each party shall provide
reasonable details of the complaint along with the notification.
Upon XXXXXX'x receipt of any such notification from PRAECIS, XXXXXX
promptly shall investigate the complaint and shall provide PRAECIS
with a written report of such investigation, including a review of
the XXXXXX SOPs related to such complaint, within thirty (30)
calendar days of XXXXXX'x receipt of PRAECIS' written notification
unless additional time is required for investigation. In the event
that the parties dispute the cause of or corrective action plan
required to address the complaint, the matter shall be handled in
accordance with Section 7.3.1.
ARTICLE 8, TERM AND TERMINATION
8.1 TERM AND EXTENSIONS.
8.1.1 INITIAL TERM. This Agreement shall be effective as of the
Effective Date and shall continue for sixty (60) months
thereafter (the "Initial Term"), unless earlier terminated
at any time by: (a) mutual agreement of the parties hereto,
(b) PRAECIS after giving at least *** prior written
notice to XXXXXX, or (c) otherwise in accordance with the
terms of this Agreement.
8.1.2 EXTENSIONS. This Agreement will be renewed automatically for
*** periods commencing, respectively, at the expiration of
the Initial Term (in the case of extension for such *** )
and at the expiration of such first extension (in the case
of extension for *** ), unless PRAECIS terminates the
Agreement by giving written notice to XXXXXX at least ***
prior to the expiration of the Initial Term or of the first
such extension, as applicable.
8.1.3 DEFINITION OF TERM. The Initial Term, as it may be extended
pursuant to this Section 8.1, or earlier terminated whether
before or after any such extension, is referred to herein as
the "Term."
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
17
8.2 TERMINATION FOR BREACH. Either party may terminate this Agreement
upon the material breach of any provision of this Agreement by the
other party, effective *** after notice of termination is given
if such breach is not cured by the breaching party within such ***
period, in the case of payment defaults, and effective *** after
notice of termination is given if such breach is not cured by the
breaching party within such *** period (or such additional
period as the non-breaching party may reasonably provide if the
breaching party has commenced a cure within the *** period and
is actively pursuing completion of such cure) for non-monetary
defaults. At the option of the non-breaching party, such termination
may be with respect to the entire Agreement, or only with respect to
the Product that is the subject of the breach.
8.3 TERMINATION FOR FINANCIAL MATTERS. This Agreement may be terminated
immediately by either party by giving the other party written notice
thereof in the event such other party makes a general assignment for
the benefit of its creditors, or proceedings of a case are commenced
in any court of competent jurisdiction by or against such party
seeking: (a) such party's reorganization, liquidation, dissolution,
arrangement or winding up, or the composition or readjustment of its
debts; (b) the appointment of a receiver or trustee for or over such
party's property; or (c) similar relief in respect of such party
under any law relating to bankruptcy, insolvency, reorganization,
winding up or composition or adjustment of debt, and (in the case of
(a), (b) or (c)) such proceedings shall continue undismissed, or an
order for relief with respect to the foregoing shall be entered and
continue unstayed, for a period of more than *** .
8.4 NON-CANCELABLE COSTS AND EXPENSES. Upon termination of this
Agreement in its entirety in accordance with its terms for any
reason, XXXXXX immediately shall cease all work under this
Agreement, any Product Master Plan, Project Plans and Regulatory
Plans (other than work-in-process at the time notice of termination
is given, which shall be completed, tested and delivered in
accordance with this Agreement) and shall pay to PRAECIS any credits
due PRAECIS under Section 7.4.1 and any other amounts due to PRAECIS
hereunder, reduced by any amounts due to XXXXXX hereunder. In the
event of the termination of this Agreement in accordance with its
terms, except by PRAECIS pursuant to Section 8.2, Section 8.3 or
Article 19, PRAECIS shall: (a) reimburse XXXXXX for all XXXXXX
Supplied Components ordered prior to notice of termination pursuant
to a Product Master Plan and not cancelable at no cost to XXXXXX;
and (b) pay XXXXXX the Cancellation Fees as set forth in the Product
Master Plan, if any, as may be modified by each Project Plan. In
addition, in the event of termination of this Agreement in
accordance with its terms for any reason, PRAECIS shall pay prices
described in Article 5 for: (i) all work-in-process commenced by
XXXXXX pursuant to a Purchase Order prior to notice of termination,
and (ii) all final Product Produced in accordance with a Purchase
Order prior to notice of termination. Subject at all times to
Article 7, XXXXXX shall ship to PRAECIS
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
18
pursuant to Section 6.1 all XXXXXX Supplied Components for which
PRAECIS is liable for payment under this Section 8.4, all
work-in-process and all final Product, as applicable. PRAECIS shall
make payment for all expenses described in this Section 8.4 within
thirty (30) calendar days from the invoice date therefor; which
invoice shall be generated upon shipment of such material to
PRAECIS.
8.5 TERMINATION DAMAGES. In addition to the costs and expenses payable
pursuant to Section 8.4, in the event of termination of this
Agreement in accordance with its terms, except by PRAECIS: (a)
pursuant to Section 8.2; or (b) pursuant to Sections 8.1.2, 8.3,
9.9.2, 9.10 or Article 19, then PRAECIS shall pay XXXXXX: ***
the difference between the Purchase Price of Product actually
ordered and purchased by PRAECIS in the calendar year in which
termination occurs and the Purchase Price of the Annual Obligation
in such calendar year *** APPROXIMATELY 3 LINES OMITTED *** .
8.6 EFFECT OF EXPIRATION OR TERMINATION; SURVIVAL. Upon expiration or
termination of this Agreement in its entirety in accordance with its
terms, this Agreement shall immediately be without further force or
effect, provided that termination, expiration, cancellation or
abandonment of this Agreement through any means or for any reason
shall be without prejudice to the rights and remedies of either
party with respect to any antecedent breach of any of the provisions
of this Agreement, and, subject to Section 13.1, expiration or
termination of this Agreement for any reason shall not relieve any
party of any obligations accruing hereunder prior to such expiration
or termination. The provisions of Articles 11, 12, 13, 14, 15, 16,
17, 18, 28 and 29 hereof, together with Sections 8.4, 8.5, 8.6,
9.2.6, 9.2.7, 9.11.1 and 9.11.4, shall survive expiration or
termination of this Agreement, except that the representations set
forth in Sections 12.2 and 12.4 shall survive only until the one (1)
year anniversary of the expiration or termination date of this
Agreement.
ARTICLE 9, PRODUCTION OF PRODUCT
9.1 PRODUCTION. XXXXXX shall Produce each Presentation of Product in
accordance with the Product Requirements, the Product Master Plan
and the Project Plan, as well as in accordance with cGMP or any
other applicable local, state, federal or foreign laws or
regulations as set forth in Product Master Plan as may be modified
by each Project Plan. Subject to compliance with reasonable rules
and regulations of XXXXXX, PRAECIS shall have the right to be
present during Production. Production deviations and investigations
which occur during Production of Product that do not cause the
Production to be non-compliant with cGMP shall not be deemed to
cause such Product to be non-conforming.
9.2 INSPECTIONS AND AUDITS.
9.2.1 RIGHT TO INSPECT AND AUDIT. PRAECIS and its third party
designees, provided such designees are subject to
confidentiality agreements with
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
19
XXXXXX, shall have the right to inspect and audit XXXXXX'x
facilities to determine compliance with: (a) cGMP; and (b)
applicable local state, federal and foreign laws,
regulations and rules. Such inspections and audits shall be
scheduled at mutually agreeable times upon reasonable
advance written notice to XXXXXX, shall be at PRAECIS'
expense, and shall not occur more than *** per calendar
year unless: (i) PRAECIS reasonably believes that Product is
not being Produced in accordance with the Master Batch
Record, the Product Master Plan, the Regulatory Plan, the
Project Plans or cGMPs; or (ii) *** APPROXIMATELY 3
LINES OMITTED *** .
9.2.2 COSTS OF INSPECTIONS AND AUDITS. Except for the annual
audits noted above and any other inspection and audit
conducted pursuant to the last sentence of Section 9.2.1, if
PRAECIS requests additional audits, then PRAECIS will incur
fees as reasonably determined by XXXXXX to cover XXXXXX'x
direct costs resulting therefrom. XXXXXX shall invoice
PRAECIS for such fees, including documentation supporting
such fees together with such invoice, and PRAECIS shall pay
such fees within thirty (30) calendar days from the date of
invoice.
9.2.3 SAMPLE TESTING. In order to ascertain compliance by XXXXXX
with the quality requirements contained in this Agreement,
PRAECIS and its third party designees also shall have the
right to request XXXXXX to, and upon such request XXXXXX
shall, sample raw materials for PRAECIS' evaluation, and
PRAECIS and its designees shall be entitled to observe such
sampling according to a mutually-agreed schedule.
9.2.4 COMPLIANCE WITH RULES. In connection with performing such
inspections and audits, PRAECIS and its third party
designees shall comply with all reasonable rules and
regulations promulgated by XXXXXX and generally applicable
to all XXXXXX customers and made known to PRAECIS reasonably
in advance of an inspection or audit. All information
disclosed or reviewed in such inspections and audits shall
be treated in accordance with Article 18 hereof.
9.2.5 REPORT FINDINGS. PRAECIS may provide XXXXXX with a written
report summarizing its findings within *** after the
conclusion of an inspection or audit. If such a report is
provided by PRAECIS, XXXXXX shall provide PRAECIS with a
written response to such report within *** after its
receipt thereof. Such response shall include a plan for
corrective action designed to address reasonable concerns
and shortcomings documented in the audit report.
9.2.6 RETENTION OF RECORDS. XXXXXX shall maintain, at its own
expense, records relating to the Production in accordance
with cGMP (and other
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
20
regulatory requirements) and shall retain such records for
not less than *** beyond the expiration date of the
relevant Product and thereafter such records will be
transferred to PRAECIS at PRAECIS' prior request and expense
or such records will be disposed; provided, however, that
XXXXXX will notify PRAECIS prior to any such disposal.
PRAECIS shall be entitled to inspect such records at its own
expense and at such times and intervals as PRAECIS shall
reasonably request upon prior written notice to XXXXXX
pursuant to PRAECIS' audit rights under this Article 9.
9.2.7 RETENTION SAMPLES. XXXXXX shall collect and maintain, at its
own expense, appropriate cGMP-compliant Product samples for
retention throughout the earlier of the Term of this
Agreement or *** beyond the expiration date of the
relevant Product and thereafter such samples will be
transferred to PRAECIS at PRAECIS' prior request and expense
or such samples will be disposed; provided, however, that
XXXXXX will notify PRAECIS prior to any such disposal. The
samples shall include *** the quantity of Product
necessary for all tests required to meet the specifications
for XXXXXX Quality Assurance Release, with the exception of
sterility and pyrogen testing.
9.3 TESTING. XXXXXX shall test, or cause to be tested by third party
testing facilities audited by XXXXXX, in accordance with the Testing
Standards and Procedures, each Batch of Product Produced pursuant to
this Agreement before delivery to PRAECIS to test conformity of the
Batch with the requirements as contained in the Product Master Plan,
Project Plan, Regulatory Plan and Product Specifications. A
certificate of analysis for each Batch Produced and delivered to
PRAECIS shall set forth the items tested by XXXXXX, specifications
and test results. XXXXXX shall send, or cause to be sent, to PRAECIS
such certificates along with one (1) copy of the Released Executed
Batch Record as soon as such documents are prepared and XXXXXX shall
use commercially reasonable efforts to send such documents no later
than *** from the date of *** for a Batch, unless: (a) any
such Batch requires investigation pursuant to Section 7.2, in which
case XXXXXX shall send such documents promptly following such
investigation; or (b) such Batch is designated by PRAECIS in a
Purchase Order as *** , in which case XXXXXX shall use
commercially reasonable efforts to send such documents no later than
*** from the date of *** for such Batch. In no event shall the
Released Executed Batch Record be sent to PRAECIS later than ***
from the date of the XXXXXX Quality Assurance Release of such Batch.
9.4 STERILITY TESTING. XXXXXX shall conduct sterility testing of the
Product in accordance with the Testing Standards and Procedures to
determine if the Product is sterile in accordance with the relevant
Regulatory Authority guidelines. Following such testing, XXXXXX
shall review: (a) the sterility test results in
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
21
accordance with the relevant XXXXXX SOPs, and (b) the Certificate of
Irradiation as prepared by the third party irradiator chosen by
PRAECIS. The sterility test results will be included in the XXXXXX
certificate of analysis delivered to PRAECIS by XXXXXX as part of
the Released Executed Batch Record for such Batch. In the event that
the results of the sterility testing show that the Product is not
sterile, XXXXXX promptly will conduct an investigation and provide
PRAECIS a written report of such investigation, including a review
of the Testing Standards and Procedures and any relevant XXXXXX
SOPs. In the event that the investigation determines that the
sterility testing was not performed accurately or in accordance with
the Testing Standards and Procedures or any relevant XXXXXX SOP,
then XXXXXX shall again conduct the sterility testing of the Product
at no cost to PRAECIS until performed accurately and in accordance
with the Testing Standards and Procedures and all relevant XXXXXX
SOPs and resubmit the results to PRAECIS. *** APPROXIMATELY 7
LINES OMITTED *** .
9.5 STABILITY TESTING. The stability protocol for Product Produced
hereunder must comply with the applicable NDA, ICH Guidelines and
XXXXXX SOPs. At PRAECIS' cost and expense, PRAECIS or a party
selected by PRAECIS (which may be XXXXXX) shall perform the
stability testing on Production Batches of Product as set forth in
the NDA. If performed by XXXXXX, such stability testing shall be
performed in accordance with the procedures set out in the
Product-specific XXXXXX SOPs for the stability protocol and the
relevant Project Plan and at the price set forth in such Project
Plan.
9.6 PERMITS AND LICENSES. PRAECIS shall have sole responsibility, at its
expense, for obtaining all permits, licenses and other
authorizations necessary or required for the sale, marketing and
commercialization of each Presentation of Product Produced by XXXXXX
hereunder. XXXXXX shall have sole responsibility, at its expense, to
obtain and maintain all permits, licenses and other authorizations
required for it to carry out its development, regulatory and
Production obligations hereunder in respect of each Presentation of
Product Produced hereunder.
9.7 REGULATORY REQUIREMENTS. Each party shall notify the other promptly
of new regulatory requirements of which it becomes aware which are
relevant to the Production of a Product under this Agreement and
which are required by the FDA, any other applicable Regulatory
Authority or other applicable laws or governmental regulations, and
shall confer with each other with respect to the best means to
comply with such requirements.
9.8 DRUG MASTER FILE. XXXXXX shall: (a) file the appropriate Drug Master
File ("DMF") and related reference applications for its Production
of each Product hereunder in accordance with 21 CFR 314.420, as may
be amended from time to time, at XXXXXX'x expense; and (b) update
the appropriate DMF to include all Product and Production-related
manufacturing information prior to the submission
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
22
by PRAECIS of the NDA for the Product and thereafter on an annual
basis during the Term hereof.
9.9 CHANGES IN MANUFACTURING.
9.9.1 CHANGES TO MASTER BATCH RECORDS AND PRODUCT SPECIFICATIONS.
PRAECIS agrees to inform XXXXXX within *** of the result
of any regulatory development or any additions or changes
that materially affect the Production of or Presentation for
Product. XXXXXX agrees to inform PRAECIS within *** of
the result of any regulatory development or any additions or
changes to XXXXXX SOPs that materially affect the Production
or Presentation of a Product. Each party shall notify the
other of any proposed changes to Master Batch Records,
Product Specifications or other Production changes with
respect to a Product prior to the Production of subsequent
Batches of such Product and shall require written approval
from the other prior to implementation of any such changes.
9.9.2 PRODUCT-SPECIFIC CHANGES. If, after the Effective Date,
either party determines that facility, equipment, process or
system changes are required as a result of changes in
requirements set forth by the FDA or any other Regulatory
Authority, and such regulatory changes apply primarily to
the Production and supply of one or more Products, then
PRAECIS and XXXXXX jointly will review and discuss such
requirements. If the parties agree in writing that such
changes are mandated by the change in Regulatory Authority
requirements, then PRAECIS shall have the option to: (a)
*** of the reasonable costs of those changes that apply
primarily to the Production and supply of one or more
Products; or (b) terminate this Agreement, in whole, or in
part as it relates to the applicable Product, upon ***
written notice to XXXXXX.
9.10 EQUIPMENT EXPENSES. If XXXXXX is required to obtain specialized
equipment in order to Produce Product for PRAECIS, then the costs of
such equipment and all spare parts and replacement parts shall be
paid by PRAECIS. XXXXXX shall advise PRAECIS of the specialized
equipment required and the estimated costs associated with the
purchase and installation of such equipment prior to any such
equipment purchase. If PRAECIS, in its sole discretion, determines
that it does not desire to pay the costs for such equipment, then
PRAECIS shall have the right to terminate this Agreement only with
respect to such Product for which such equipment is required, upon
*** prior written notice to XXXXXX. PRAECIS shall be invoiced for
all approved equipment and spare part costs after installation and
acceptance of such equipment by XXXXXX, and PRAECIS shall make
payments promptly thereafter.
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
23
9.11 OWNERSHIP OF EQUIPMENT.
9.11.1 SOLE OWNERSHIP. PRAECIS shall retain sole ownership of, and
title to, any and all equipment purchased by PRAECIS on,
before or after the date hereof for use in the Production,
or for which XXXXXX is reimbursed by PRAECIS pursuant to
Section 9.10, (collectively, the "Equipment") and XXXXXX
shall store, label or otherwise xxxx any such Equipment
maintained at its facilities in a manner that facilitates
the identification of such Equipment. XXXXXX shall be solely
responsible for the security of all Equipment. XXXXXX and
PRAECIS shall enter into maintenance contracts with third
parties for the upkeep and maintenance of the Equipment.
Throughout the Term, PRAECIS shall be responsible for the
payment of all maintenance fees under such third party
maintenance contracts and XXXXXX shall include all Equipment
in XXXXXX'x standard equipment preventative maintenance
programs and shall be responsible to notify the third party
maintenance providers promptly of any maintenance or
preventive maintenance services to be performed under such
contracts and to otherwise provide the third party
maintenance providers with all notices and information in
respect of the maintenance services to be provided under
such maintenance contracts.
9.11.2 LEASE OF EQUIPMENT. Effective as of the date any Equipment
is delivered to XXXXXX'x facility, PRAECIS hereby leases any
such Equipment to XXXXXX solely for use in connection with
the Production of Product hereunder, unless PRAECIS shall
otherwise agree in writing. Following receipt of such
Equipment by XXXXXX, XXXXXX agrees to cooperate with PRAECIS
in the execution and filing of a precautionary financing
statement (substituting PRAECIS, as lessor, for creditor and
XXXXXX, as lessee, for debtor) in accordance with Article 9
of the Uniform Commercial Code. Such financing statement
shall specifically describe the Equipment and shall
otherwise be in a standard and customary form as agreed to
by XXXXXX and PRAECIS. PRAECIS shall deliver a termination
statement to XXXXXX at or prior to removal of the Equipment
from XXXXXX'x premises or at or prior to XXXXXX'x purchase
of such Equipment as provided herein.
9.11.3 EQUIPMENT INSURANCE. PRAECIS shall procure and maintain, at
its expense, from, with respect to the Equipment described
in Section 9.10, the delivery date, and, with respect to
Equipment delivered prior to the date hereof, the date
hereof, through either the date such Equipment is removed
from XXXXXX'x facility by PRAECIS or the consummation of the
purchase of such Equipment by XXXXXX pursuant to Section
9.11.4, insurance covering the Equipment of not less than
two and one half
24
million dollars ($2,500,000) for all such Equipment. Upon
the written request of XXXXXX, PRAECIS promptly shall
deliver to XXXXXX a certificate of insurance evidencing the
insurance required hereunder. If PRAECIS fails to furnish
such certificate within fifteen (15) calendar days after
XXXXXX'x written request, XXXXXX, at its option, may obtain
the PRAECIS insurance and PRAECIS shall promptly reimburse
XXXXXX for the direct cost of the same. Any deductible shall
be the sole responsibility of PRAECIS.
9.11.4 REMOVAL OF EQUIPMENT. Within thirty (30) days from the date
of termination or expiration of this Agreement, PRAECIS, at
its option, shall either: (a) remove the Equipment from
XXXXXX'x facility at PRAECIS' expense; or (b) offer to sell
such Equipment (in whole or in part), in writing, to XXXXXX
at a purchase price equal to the fair market value of such
Equipment; provided, that in no case shall the fair market
value of such Equipment be less than the then current book
value of such Equipment, calculating depreciation of such
Equipment in accordance with United States generally
accepted accounting principals. If PRAECIS offers to sell
such Equipment to XXXXXX pursuant to the preceding sentence,
XXXXXX must deliver its acceptance of such offer, in
writing, to PRAECIS within ten (10) days after receipt of
such offer. If the purchase and sale of such Equipment is
not completed within thirty (30) days after PRAECIS' receipt
of such acceptance, PRAECIS' obligation to sell, and
XXXXXX'x obligation to purchase, such Equipment shall be
null and void, unless the parties otherwise agree in
writing. In the event PRAECIS offers to sell the Equipment
to XXXXXX and XXXXXX declines or otherwise fails to purchase
such Equipment, PRAECIS shall submit to XXXXXX a written
plan to remove such Equipment from XXXXXX'x facility no
later than thirty (30) days following the date that XXXXXX
so declines or fails to purchase such Equipment and shall
complete removal of such Equipment from XXXXXX'x facility no
later than sixty (60) days following the date that XXXXXX so
declines or fails to purchase such Equipment.
9.12 ANNUAL PRODUCT REVIEW. XXXXXX shall conduct an annual review of the
commercial services performed by XXXXXX under this Agreement which
review shall include, but not be limited to, tracking and trending
of all Batch records, stability and Production data. XXXXXX and
PRAECIS will determine, via a protocol, a mutually agreed upon date
for completion of the review each year. XXXXXX shall provide to
PRAECIS a written report containing the results of such annual
review according to the time line established in the protocol.
25
ARTICLE 10, REGULATORY
10.1 REGULATORY APPROVALS. PRAECIS will diligently pursue Regulatory
Approval of marketing licenses for each Product Produced by XXXXXX
hereunder. PRAECIS will advise XXXXXX of document requirements in
support of NDA and/or ANDA and similar applications required of
foreign governments and agencies including amendments, license
applications, supplements and maintenance of such. XXXXXX will
provide documents and assist PRAECIS in preparation of submissions
to Regulatory Authorities (both U.S. and foreign) designated by
PRAECIS in support of PRAECIS' NDAs, ANDAs, similar applications
required by foreign governments and licenses. All regulatory
submission preparation and maintenance to be performed by XXXXXX for
PRAECIS shall be specified in the Regulatory Plan. Prior to
submission to the Regulatory Authority, PRAECIS will provide XXXXXX
with a copy of the CMC section of any NDA or ANDA for review and
comment. A final copy of the CMC section will be provided by PRAECIS
to XXXXXX upon submission to the Regulatory Authority. Within ***
of Regulatory Approval, PRAECIS will notify XXXXXX of such approval
and the anticipated date of Product launch to the market.
10.2 REGULATORY AUTHORITY INSPECTIONS. At PRAECIS' request, XXXXXX will
authorize Regulatory Authorities to review any of PRAECIS'
applications on PRAECIS' behalf. XXXXXX will notify PRAECIS within
*** of all contacts with Regulatory Authorities (both written and
verbal) related to each Product. XXXXXX shall permit PRAECIS to be
on site at the XXXXXX facility during any such inspection that
directly affects the Production of Product. XXXXXX shall inform
PRAECIS of the result of any regulatory inspection that directly or
indirectly affects the Production of a Product, including without
limitation any notice of inspection, notice of violation or other
similar notice received by XXXXXX affecting Production, testing,
storage or handling of a Product. In the event of an FDA inspection
which directly involves the Production of a Product, PRAECIS shall
be immediately informed by XXXXXX of the issuance of the Notice of
Inspection (FDA Form 482) and provided a copy thereof. In the event
that there are Inspectional Observations (FDA Form 483) resulting
from an inspection that directly involves the Product, PRAECIS shall
be informed immediately by XXXXXX and provided a copy thereof as
promptly as possible. XXXXXX shall provide PRAECIS the opportunity
to participate in the preparation of XXXXXX'x responses to any
Regulatory Authority directly concerning Production of Product;
provided, however, that XXXXXX shall have final authority as to the
content of any such responses. In addition, XXXXXX shall supply
PRAECIS with any manufacturing, testing or in-process control data
within *** , if requested as the result of a regulatory
inspection, an annual audit by PRAECIS or a potential regulatory
exposure such as a recall or significant complaint relating to the
Product or the Production services.
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
26
ARTICLE 11, TRADEMARKS
11.1 LIMITED LICENSE. During the Term of this Agreement, PRAECIS grants
to XXXXXX a non-exclusive, royalty free license, without the right
to sublicense, to display the PRAECIS Trademarks for the sole
purpose of allowing XXXXXX to fulfill its express Production
responsibilities under this Agreement in accordance with the
relevant Master Batch Record and subject at all times to the
trademark usage standards and policies provided by PRAECIS to XXXXXX
from time to time. Except as expressly provided in Section 21.1,
such license shall not be assignable or transferable in whole or in
part.
11.2 USE OF TRADEMARKS. PRAECIS may at any time, in PRAECIS' sole and
absolute discretion, and at PRAECIS' expense, require that XXXXXX
modify the display of the PRAECIS Trademarks, or substitute an
alternative xxxx for any PRAECIS Trademark, and XXXXXX shall comply
with such requirement promptly. Title to and ownership of the
PRAECIS Trademarks at all times shall remain with PRAECIS. All uses
of the PRAECIS Trademarks will inure solely to PRAECIS and XXXXXX
hereby irrevocably assigns to PRAECIS all such right, title and
interest, together with any goodwill or other benefits, if any, in
any of the PRAECIS Trademarks accruing from XXXXXX'x use of the
PRAECIS Trademarks hereunder. At no time during or after the Term of
this Agreement shall XXXXXX attempt to register or cause to be
registered PRAECIS Trademarks or any trademarks, service marks or
trade names confusingly similar to those of PRAECIS. XXXXXX shall
not form and use for itself any combination marks with the PRAECIS
Trademarks.
11.3 ENFORCEMENT OF TRADEMARKS. PRAECIS shall be solely responsible for
selecting, registering and enforcing the PRAECIS Trademarks used to
identify the Product (it being understood that PRAECIS shall
determine in which jurisdictions such registration and/or
enforcement is appropriate) and, except as set forth in Section
11.1, XXXXXX shall have no right, title or interest in or to PRAECIS
Trademarks.
ARTICLE 12, REPRESENTATIONS, WARRANTIES AND COVENANTS
12.1 MUTUAL REPRESENTATIONS AND WARRANTIES. Each party hereby represents
and warrants to the other party that: (a) the person executing this
Agreement is authorized to execute this Agreement on its behalf; (b)
this Agreement is the legal, valid and binding obligation of such
party, enforceable against such party in accordance with its terms,
except as such enforcement may be limited by: (i) applicable
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar local, state, federal or foreign laws,
rules or regulations now or hereinafter in effect relating to or
affecting creditors' rights
27
generally; and (ii) general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at
law); and (c) the execution, delivery and performance of this
Agreement by such party does not conflict with any agreement,
instrument or understanding, oral or written, to which such party is
bound, nor violate any law or regulation of any court, governmental
body or administrative or other agency having jurisdiction over it,
wherein such violation would have a material effect on the
performance by such party of its obligations hereunder.
12.2 XXXXXX REPRESENTATIONS, WARRANTIES AND COVENANTS. XXXXXX represents,
warrants and covenants that each Presentation of Product shall be
Produced in accordance with the Master Batch Record, the Product
Master Plan and the Project Plan, as well as in accordance with
cGMPs. XXXXXX represents and warrants that it has obtained (or will
obtain prior to Producing Product), and covenants that it will
remain in compliance with, during the Term of this Agreement, all
permits, licenses and other authorizations (the "Permits") which are
required under local, state, federal and foreign laws, rules and
regulations applicable to the Production of Product as specified in
Product Master Plan as may be modified by each Project Plan or
Regulatory Plan; provided, however, XXXXXX shall have no obligation
to obtain Permits relating to the sale, marketing, distribution or
use of Drug Product Intermediate or Product or with respect to the
labeling of Product. XXXXXX represents, warrants and covenants that
XXXXXX shall secure, store and handle all Drug Product Intermediate,
PRAECIS Supplied Components and Product in accordance with industry
standards. XXXXXX makes no representation or warranty with respect
to the sale, marketing, distribution or use of the Drug Product
Intermediate or as to printed materials supplied by PRAECIS or its
consignee. XXXXXX further represents and warrants to PRAECIS that
there have been no claims asserted or threatened against XXXXXX that
any XXXXXX Supplied Components infringe upon any issued patent,
trademark, copyright or other intellectual property or proprietary
rights of any third party.
12.3 DISCLAIMER OF WARRANTIES. Except for those warranties set forth in
Sections 12.1 and 12.2, XXXXXX makes no warranties, written, oral,
express or implied, with respect to Product or the Production of
Product. ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING,
WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT ARE HEREBY
DISCLAIMED BY BAXTER. NO WARRANTIES OF BAXTER MAY BE CHANGED BY ANY
REPRESENTATIVES OF BAXTER UNLESS EVIDENCED IN AN AMENDMENT TO THIS
AGREEMENT IN ACCORDANCE WITH ARTICLE 26. PRAECIS ACCEPTS PRODUCT
SUBJECT TO THE TERMS HEREOF.
28
12.4 PRAECIS REPRESENTATIONS AND WARRANTIES. PRAECIS represents and
warrants that: (a) it has the right to give BAXTER any information
provided by PRAECIS hereunder, and that BAXTER has the right to use
such information for the Production of Product as specified
hereunder; and (b) PRAECIS has no knowledge of any: (i) patents or
other intellectual rights that would be infringed by XXXXXX'x
Production of Product under this Agreement, or (ii) proprietary
rights of third parties which would be violated by XXXXXX'x
performance hereunder. PRAECIS further represents and warrants that
the Drug Product Intermediate provided to BAXTER hereunder: (1) will
conform to the Component Specifications for Drug Product
Intermediate, and (2) will not be adulterated or misbranded within
the meaning of the FD&C Act.
ARTICLE 13, LIMITATION OF LIABILITY AND WAIVER OF SUBROGATION
13.1 LIMITATION OF LIABILITY. Neither party hereto shall be liable for
loss of use or profits or other collateral, special or consequential
damages, losses, or expenses, *** , except as specifically set
forth in Article 16 or in Sections 14.1 and 14.2, in connection with
or by reason of the Production and delivery of Product under this
Agreement whether such claims are founded in tort or contract. All
claims by either party for breach or default under this Agreement
shall be brought within three (3) years after the cause of action
accrued or shall be deemed waived.
13.2 WAIVER OF SUBROGATION. All BAXTER Supplied Components and equipment
used by BAXTER in the Production of Product, other than the
Equipment described in Section 9.11.1 (collectively, "BAXTER
Property") shall at all times remain the property of XXXXXX and
XXXXXX assumes risk of loss for such property when at a BAXTER
facility (including the facility of a BAXTER agent or subcontractor)
until delivery of Product (or work-in-process during Production) to
a common carrier as specified in Section 6.1. BAXTER hereby waives
any and all rights of recovery against PRAECIS and its Affiliates,
and against any of their respective directors, officers, employees,
agents or representatives, for any loss or damage to BAXTER Property
to the extent the loss or damage is covered by insurance carried by
BAXTER (whether or not such insurance is described in this
Agreement). Except as otherwise expressly provided in this
Agreement, PRAECIS assumes all risk of loss for all Equipment
described in Section 9.11.1, PRAECIS Supplied Components, Drug
Product Intermediate supplied by PRAECIS, and Product (collectively,
"PRAECIS Property"). PRAECIS hereby waives any and all rights of
recovery against BAXTER and its Affiliates, and against any of their
respective directors, officers, employees, agents or
representatives, for any loss or damage to the PRAECIS Property to
the extent the loss or damage (i) is not expressly assumed by BAXTER
under this Agreement and (ii) is covered by insurance carried by
PRAECIS (whether or not such insurance is described in this
Agreement).
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
29
ARTICLE 14, INDEMNIFICATION
14.1 PRAECIS INDEMNIFICATION. PRAECIS shall indemnify, defend and hold
harmless BAXTER and its Affiliates and any of their respective
directors, officers, managers, employees, subcontractors and agents
(collectively the "BAXTER Indemnified Parties") from and against any
and all liabilities, obligations, penalties, claims, judgments,
demands, actions, disbursements of any kind and nature, suits,
losses, damages, costs and expenses (including, without limitation,
reasonable attorney's fees) (collectively, "Losses") arising out of
or in connection with property damage or personal injury (including,
without limitation, death) of third parties (collectively "Claims")
in connection with or relating to: (a) PRAECIS' storage, promotion,
labeling, marketing, distribution, use or sale of Drug Product
Intermediate or Product; (b) PRAECIS' negligence or willful
misconduct; (c) PRAECIS' breach of this Agreement; or (d) any claim
that the use, sale, Production, marketing or distribution of Drug
Product Intermediate or Product by BAXTER or PRAECIS violates the
patent, trademark, copyright or other proprietary rights of any
third party; except to the extent any of the foregoing (a) or (d) is
caused solely by the negligence or willful misconduct of the BAXTER
Indemnified Parties or solely by the breach by BAXTER of its
representations, warranties, covenants or other obligations under
this Agreement {for the avoidance of doubt, it being expressly
acknowledged by PRAECIS that PRAECIS' indemnification obligation as
provided in this Section 14.1 shall apply with respect to a Claim if
such Claim (i) is caused partially by the negligence or willful
misconduct of the BAXTER Indemnified Parties, (ii) is a Claim for
which BAXTER could be held strictly liable (except if such Claim is
caused solely by the negligence or willful misconduct of BAXTER or
solely by the breach by BAXTER of its representations, warranties,
covenants or other obligations under this Agreement), or (iii) is
caused partially by the breach by BAXTER of its representations,
warranties, covenants or other obligations under this Agreement}.
14.2 BAXTER INDEMNIFICATION. BAXTER shall indemnify, defend and hold
harmless PRAECIS and its Affiliates and any of their respective
directors, officers, managers, employees, subcontractors and agents
(the "PRAECIS Indemnified Parties") from and against any and all
Losses resulting solely from: (a) the negligence or willful
misconduct of a BAXTER Indemnified Party; or (b) a breach by BAXTER
of its representations, warranties, covenants or other obligations
under this Agreement.
14.3 INDEMNITEE OBLIGATIONS. A party (the "Indemnitee") which intends to
claim indemnification under this Article 14 shall promptly notify
the other party (the "Indemnitor") in writing of any action, claim
or other matter in respect of which the Indemnitee or any of its
Affiliates, or any of their respective directors, officers,
employees, subcontractors, or agents, intend to claim such
indemnification; provided, however, that failure to provide such
notice within a reasonable period of time shall not relieve the
Indemnitor of any of its obligations
30
hereunder except to the extent the Indemnitor is prejudiced by such
failure. The Indemnitee shall permit, and shall cause its
Affiliates, and their respective directors, officers, employees,
subcontractors and agents to permit, the Indemnitor, at its
discretion, to settle any such action, claim or other matter, and
the Indemnitee agrees to the complete control of such defense or
settlement by the Indemnitor. Notwithstanding the foregoing, the
Indemnitor shall not enter into any settlement that would adversely
affect the Indemnitee's rights hereunder, or impose any obligations
on the Indemnitee in addition to those set forth herein, in order
for it to exercise such rights, without Indemnitee's prior written
consent, which shall not be unreasonably withheld, conditioned, or
delayed. No such action, claim or other matter shall be settled
without the prior written consent of the Indemnitor, which shall not
be unreasonably withheld, conditioned or delayed. The Indemnitee,
its Affiliates, and their respective directors, officers, employees,
subcontractors and agents shall fully cooperate with the Indemnitor
and its legal representatives in the investigation and defense of
any action, claim or other matter covered by the indemnification
obligations of this Article 14. The Indemnitee shall have the right,
but not the obligation, to be represented in such defense by counsel
of its own selection and at its own expense.
ARTICLE 15, INSURANCE
15.1 PRAECIS INSURANCE. PRAECIS shall procure and maintain, during the
Term of this Agreement and for a period one (1) year beyond the
expiration date of Product, Commercial General Liability Insurance,
including without limitation, Product Liability and Contractual
Liability coverage (the "PRAECIS Insurance"). The PRAECIS Insurance
shall cover amounts not less than fifteen million dollars
($15,000,000) combined single limit and shall be with an insurance
carrier reasonably acceptable to BAXTER. BAXTER shall be named as an
additional insured on the PRAECIS Insurance, unless otherwise agreed
in the Product Master Plan. Upon the written request of BAXTER,
PRAECIS promptly shall deliver to BAXTER a certificate of the
PRAECIS Insurance evidencing such coverage and, if applicable, the
endorsement of XXXXXX as an additional insured. If PRAECIS fails to
furnish such certificate within fifteen (15) calendar days after
XXXXXX'x request, BAXTER, at its option, may obtain the PRAECIS
Insurance and PRAECIS promptly shall reimburse BAXTER for the direct
cost of the same. Any deductible and/or self insurance retention
shall be the sole responsibility of PRAECIS.
15.2 BAXTER INSURANCE. BAXTER is, and shall during the Term of this
Agreement remain, self-insured for liabilities typically covered by
Commercial General Liability policies, including contractual
liability and liability related to bodily injury and property
damage, in connection with the performance of its duties hereunder.
31
ARTICLE 16, RECALL OF PRODUCT
In the event PRAECIS shall be required to recall any Product Produced
hereunder because such Product may violate local, state or federal laws or
regulations, the laws or regulations of any applicable foreign government
or agency or the Product Specifications, or in the event that PRAECIS
elects to institute a voluntary recall, PRAECIS shall be responsible for
coordinating such recall. PRAECIS promptly shall notify BAXTER if any
Product Produced hereunder is the subject of a recall and provide BAXTER
with a copy of all documents relating to such recall. BAXTER shall
cooperate with PRAECIS in connection with any such recall. PRAECIS shall be
responsible for all of the costs and expenses of any such recall unless
such recall is caused *** APPROXIMATELY 3 LINES OMITTED *** , in
which case BAXTER will bear all reasonable costs associated with such
recall, product withdrawal or field correction (including but not limited
to costs associated with receiving and administering the recalled Product
and notification of the recall to those persons whom PRAECIS deems
appropriate); provided however that solely in respect of administrative and
operating costs and expenses, XXXXXX'x liability for conducting the recall
shall be in accordance with and up to a cumulative total maximum amount set
forth in the chart below. Notwithstanding the foregoing, in no event shall
XXXXXX'x liability for costs associated with such recall, product
withdrawal or field correction exceed the Purchase Price for the Product
which is the subject of such recall, product withdrawal or field
correction.
ADMINISTRATIVE
NUMBER OF COST CAPS BY
CONSIGNEES RECALL CLASS
---------------------------------------
I II III
-------------------------------------------------------
*** *** *** ***
*** *** *** ***
*** *** *** ***
*** *** *** ***
*** *** *** ***
ARTICLE 17, INTELLECTUAL PROPERTY
17.1 INVENTIONS. All Inventions (as defined below) and all documents,
computer documentation and other tangible materials related thereto,
which are conceived, reduced to practice or created by BAXTER in the
course of performing its obligations under this Agreement and which
relate directly to the Product, Drug Product Intermediate or PRAECIS
Supplied Components (the "PRAECIS
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
32
Inventions") are and shall be the sole and exclusive property of
PRAECIS and shall be considered works for hire for United States
copyright purposes. For the purposes of all matters other than
United States copyright laws, and to the extent that the PRAECIS
Inventions may not fall within the specifically enumerated works
that constitute works made for hire under the United States
copyright laws, BAXTER hereby assigns all copyrights, trademarks,
trade secrets, patents or other proprietary rights and all other
right, title and interest throughout the world and without further
consideration in and to the PRAECIS Inventions to PRAECIS. For
purposes of this Agreement, "Invention" shall mean information
relating to any innovation, improvement, development, discovery,
computer program, device, trade secret, method, know-how, process,
technique or the like, whether or not written or otherwise fixed in
any form or medium, regardless of the media on which contained and
whether or not patentable or copyrightable.
17.2 PATENT PROSECUTION. PRAECIS shall have the world wide right to
control the drafting, filing, prosecution and maintenance of patents
covering the PRAECIS Inventions or otherwise relating to its
Intellectual Property (as defined in Section 17.3), including
decisions about the countries in which to file patent applications.
Patent costs associated with the patent activities described in this
Section 17.2 shall be borne by PRAECIS. BAXTER will cooperate with
PRAECIS, at PRAECIS' expense, in the filing and prosecution of
patent applications. Such cooperation will include, but not be
limited to, furnishing supporting data and affidavits for the
prosecution of patent applications and completing and signing forms
needed for the prosecution, assignment and maintenance of patent
applications.
17.3 RETENTION OF RIGHTS. Except as otherwise expressly provided herein,
nothing contained in this Agreement shall be construed or
interpreted, either expressly or by implication, estoppel or
otherwise, as: (a) a grant, transfer or other conveyance by either
party to the other of any right, title, license or other interest of
any kind in any of its patents, trademarks, copyrights, trade
secrets or other intellectual property or proprietary information
(collectively, "Intellectual Property") and, except as otherwise
expressly provided herein, each party shall retain all rights in its
Intellectual Property without conferring any right, title or
interest therein to the other party; (b) creating an obligation on
the part of either party to make any such grant, transfer or other
conveyance; or (c) requiring either party to participate with the
other party in any cooperative development program or project of any
kind or to continue with any such program or project. Without
limiting the generality of the preceding sentence, PRAECIS shall
retain all right, title and interest arising under the United States
Patent Act, the United States Trademark Act, the United States
Copyright Act and all other applicable laws, rules and regulations
in and to all Products, Presentation methods, Drug Product
Intermediate, PRAECIS Supplied Components, and all packaging,
labeling and PRAECIS Trademarks associated therewith.
33
ARTICLE 18, CONFIDENTIAL INFORMATION, NONDISCLOSURE AND PUBLICITY
18.1 CONFIDENTIALITY. It is contemplated that in the course of the
performance of this Agreement each party may, from time to time,
disclose Confidential Information to the other. Each party agrees to
take all reasonable steps to prevent disclosure of Confidential
Information to third parties. No provision of this Agreement shall
be construed so as to preclude disclosure of Confidential
Information as may be reasonably necessary to secure from any
governmental agency necessary approvals or licenses or to file and
prosecute applications for, or obtain, patents with respect to the
Product.
18.2 PRIOR CONFIDENTIALITY AGREEMENT. This Agreement, by reference,
incorporates the Confidentiality Agreement dated December 4th, 2001
(the "Confidentiality Agreement") by and between Xxxxxx Healthcare
Corporation and PRAECIS, and which was subsequently assigned by
Xxxxxx Healthcare Corporation to BAXTER on or about January 1, 2002,
and such Confidentiality Agreement is made a part hereof as though
fully set forth herein, as such Confidentiality Agreement may be
modified by Sections 18.3 through 18.7 hereof.
18.3 THIRD PARTY DISCLOSURE. BAXTER shall be permitted to disclose
Product information to third party developmental and analytical
services providers solely in connection with, and only to the extent
reasonably necessary for, performance of its obligations hereunder;
provided that such providers shall be subject to confidentiality
agreements which protect the disclosure and use of any such Product
information to the same extent as, or greater than, provided
hereunder. Either party may disclose Confidential Information of the
disclosing party to those Affiliates, agents, consultants and
employees of the receiving party who need to know such information
to accomplish the purposes of this Agreement (collectively,
"Permitted Recipients"); provided that such Permitted Recipients are
bound to maintain such Confidential Information in confidence in
accordance with the terms herein.
18.4 LITIGATION AND GOVERNMENTAL DISCLOSURE. Each party may disclose
Confidential Information hereunder to the extent such disclosure is
reasonably necessary for complying with applicable governmental
regulations or conducting pre-clinical or clinical trials, provided
that if a party is required by law or regulation to make any such
disclosure of the other party's Confidential Information it will,
except where impractical for necessary disclosures, for example in
the event of a medical emergency, give reasonable advance notice to
the other party of such disclosure requirement and will use good
faith efforts to assist such other party to secure a protective
order or confidential treatment of such Confidential Information
required to be disclosed. Disclosure of Confidential Information in
connection
34
with any Legal Proceeding (as defined in the Confidentiality
Agreement) shall be governed by Section 4 of the Confidentiality
Agreement.
18.5 PUBLICITY AND DISCLOSURE OF TERMS. The parties agree that the public
announcement of the execution of this Agreement shall only be by one
or more press releases mutually agreed to by the parties. The
failure of a party to return a draft of a press release with its
proposed amendments or modifications to such press release to the
other party within five (5) days of such party's receipt of such
press release shall be deemed as such party's approval of such press
release as received by such party. Neither party shall disclose the
terms of this Agreement without the prior written consent of the
other party hereto, except: (a) as may be required by a court of
competent jurisdiction, in which case the disclosing party shall
immediately notify the non-disclosing party so that the
non-disclosing party may seek a protective order or other remedy;
provided that if no protective order or other remedy is obtained,
then the disclosing party shall disclose only that portion of this
Agreement which, in the opinion of the disclosing party's legal
counsel, is required to be disclosed, and the disclosing party shall
use commercially reasonable efforts to obtain an order or other
reliable assurances that confidential treatment will be given to the
disclosed portion of this Agreement; (b) as may be required by
federal law or the regulations of Regulatory Authorities, including
without limitation the United States Securities and Exchange
Commission; or (c) if PRAECIS determines in good faith that such
disclosure is necessary or appropriate in connection with any
financing, strategic transaction, acquisition or disposition
involving PRAECIS or any Affiliate of PRAECIS, provided, however,
with respect to disclosures pursuant to this clause 18.5(c), in no
event may such disclosure be made to any contract drug manufacturer
or any Affiliate of a contract drug manufacturer unless such
disclosures are subject to a confidentiality agreement that protects
disclosure of and Confidential Information to the same extent, or
greater than, provided hereunder.
18.6 LIMITATION OF DISCLOSURE. The parties agree that, except as
expressly authorized in this Agreement or in the Confidentiality
Agreement, no information concerning this Agreement and the
transactions contemplated herein shall be made public by either
party without the prior written consent of the other.
18.7 DURATION OF CONFIDENTIALITY. All obligations of confidentiality and
non-use imposed upon the parties under this Agreement and the
Confidentiality Agreement shall expire ten (10) years after the
expiration or earlier termination of this Agreement; provided,
however, that Confidential Information which constitutes the trade
secrets of a party shall be kept confidential indefinitely, subject
to the limitations set forth in Sections 18.4 through 18.6.
35
ARTICLE 19, FORCE MAJEURE
Any delay in the performance of any of the duties or obligations of either
party hereto (except the payment of money) caused by an event outside the
affected party's reasonable control shall not be considered a breach of
this Agreement, and unless provided to the contrary herein, the time
required for performance shall be extended for a period equal to the period
of such delay. Such events shall include without limitation, acts of God;
acts of public enemies; insurrections; riots; embargoes; labor disputes,
including strikes, lockouts, job actions, or boycotts; fires; explosions;
floods; shortages of material or energy; delays in the delivery of raw
materials; acts or orders of any government or agency thereof or other
unforeseeable causes beyond the reasonable control and without the fault or
negligence of the party so affected. The party so affected shall give
prompt notice to the other party of such cause and a good faith estimate of
the continuing effect of the force majeure condition and duration of the
affected party's nonperformance, and shall take whatever reasonable steps
are appropriate to relieve the effect of such causes as rapidly as
possible. If the period of nonperformance by BAXTER because of BAXTER force
majeure conditions exceeds *** , then PRAECIS may terminate this
Agreement by written notice to BAXTER. If the period of nonperformance by
PRAECIS because of PRAECIS force majeure conditions exceeds *** , then
BAXTER may terminate this Agreement by written notice to PRAECIS.
Notwithstanding anything to the contrary in this Agreement or any Product
Master Plan, termination of this Agreement by either party pursuant to this
Article 19 shall not result in the imposition of Cancellation Fees, if any.
ARTICLE 20, NOTICES
All notices hereunder must be in writing and shall be delivered by
facsimile (confirmed by overnight delivery), or by overnight delivery by a
reputable overnight delivery service, to the following address of the
respective parties:
If to BAXTER: Xxxxxx Pharmaceutical Solutions LLC
000 Xxxxx Xxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Vice President of
Business Affairs
Telefax No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to: Xxxxxx Healthcare Corporation
Xxx Xxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attn: General Counsel
Telefax No.: (000) 000-0000
Telephone No.: (000) 000-0000
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
36
If to PRAECIS:
PRAECIS PHARMACEUTICALS INCORPORATED
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx XxXxxxxxxx, Chief Financial Officer
Telefax No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to:
PRAECIS PHARMACEUTICALS INCORPORATED
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Vice President, Legal
Telefax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Notices shall be effective on the day following the date of
transmission if sent by facsimile, and on the first business day
following the date of delivery to the overnight delivery service if
sent by overnight delivery. A party may change its address listed
above by notice to the other party given in accordance with this
Article 20.
ARTICLE 21, ASSIGNMENT
21.1 ASSIGNMENT. Neither party shall assign this Agreement or any part
hereof or any interest herein to any third party (or use any
subcontractor or otherwise transfer responsibility for any of its
obligations hereunder to any third party) without the written
approval of the other party; provided, however, that either party
may, without such consent, assign this Agreement to an Affiliate;
and further provided that in either case, no such assignment shall
be valid unless the permitted assignee assumes all obligations of
its assignor under this Agreement. In addition, PRAECIS may, without
the consent of BAXTER, assign all of its rights, title and interest
in this Agreement to a successor by way of merger, consolidation,
reorganization, stock sale or similar corporate transaction, or by
way of a sale of all or substantially all of its assets in which the
transferee, assignee or successor in such asset sale agrees in
writing to be fully bound by all of the provisions of this
Agreement.
21.2 BINDING EFFECT. Subject to Section 21.1, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto,
their successors and permitted assigns.
37
ARTICLE 22, ALLIANCES
Notwithstanding anything to the contrary herein, BAXTER agrees that PRAECIS
shall have the right to enter into alliances with third parties who may
engage in joint (with PRAECIS) or unilateral marketing and promoting of the
Product or any combination of products that includes the Product.
ARTICLE 23, TAXES
PRAECIS shall pay all national, state, municipal or other sales, use,
excise, import, property, value added, or other similar taxes, assessments
or tariffs assessed upon or levied against the sale of Product to PRAECIS
pursuant to this Agreement or the sale or distribution of Product by
PRAECIS (or at PRAECIS' sole expense, defend against the imposition of such
taxes and expenses). BAXTER shall notify PRAECIS of any such taxes that any
governmental authority is seeking to collect from BAXTER, and PRAECIS may
assume the defense thereof in XXXXXX'x name, if necessary, and BAXTER
agrees to fully cooperate in such defense to the extent of the capacity of
BAXTER, at PRAECIS' expense. BAXTER shall pay all national, state,
municipal or other taxes on the income resulting from the sale by BAXTER of
the Product to PRAECIS under this Agreement, including but not limited to,
gross income, adjusted gross income, supplemental net income, gross
receipts, excess profit taxes, or other similar taxes.
ARTICLE 24, ENTIRE AGREEMENT
This Agreement and the Confidentiality Agreement constitute the entire
agreement between the parties concerning the subject matter hereof,
supersede all written or oral prior agreements or understandings with
respect thereto and shall control the parties' relationship with respect to
the subject matter hereof. The parties agree and acknowledge that the
Letter of Intent between PRAECIS and Xxxxxx Healthcare Corporation dated
December 11, 2001, is terminated hereby, except that Paragraph 8 of such
Letter of Intent shall survive. The parties intend to incorporate all
project plans for Product developed and mutually agreed under the Letter of
Intent into the Project Plans hereunder.
ARTICLE 25, SEVERABILITY
If any term or provision of this Agreement shall for any reason be held
invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other term or provision
hereof, and this Agreement shall be interpreted and construed as if such
term or provision, to the extent the same shall have been held to be
invalid, illegal or unenforceable, had never been contained herein.
38
ARTICLE 26, WAIVER AND MODIFICATION OF AGREEMENT
No waiver or modification of any of the terms of this Agreement shall be
valid unless in writing and signed by authorized representatives of both
parties hereto. Failure by either party to enforce any rights under this
Agreement shall not be construed as a waiver of such rights nor shall a
waiver by either party in one or more instances be construed as
constituting a continuing waiver or as a waiver in other instances.
ARTICLE 27, INDEPENDENT CONTRACTOR
BAXTER shall act as an independent contractor for PRAECIS in providing the
services required hereunder and shall not be considered an agent of, or
joint venturer with, PRAECIS.
ARTICLE 28, ATTORNEY'S FEES
The successful party in any litigation or other dispute resolution
proceeding to enforce the terms and conditions of this Agreement shall be
entitled to recover from the other party reasonable attorney's fees and
related costs involved in connection with such litigation or dispute
resolution proceeding.
ARTICLE 29, GUARANTY
Xxxxxx Healthcare Corporation (the "Guarantor") shall, and hereby does,
absolutely and completely guarantee the payment and performance by BAXTER
of the obligations of BAXTER hereunder; provided, however, that, except as
provided below in this Article 29, this guaranty is contingent, and may be
enforced against the Guarantor only, upon either: (a) recourse being taken
first against BAXTER, final judgment obtained against BAXTER and execution
thereon returned unsatisfied, or (b) if it is shown that BAXTER has
insufficient assets available for the performance by BAXTER of XXXXXX'x
obligations hereunder. The aforesaid guaranty by the Guarantor shall become
the primary and independent obligation of the Guarantor and shall be
enforceable directly against the Guarantor, following written notice and
demand to Guarantor by PRAECIS, without the necessity of: (i) any suit or
proceeding against BAXTER, (ii) any notice of nonperformance or
nonobservance, or (iii) any notice of acceptance thereof, all of which the
Guarantor hereby expressly and irrevocably waives, in the event that (1)
BAXTER shall have filed a petition in bankruptcy or for any relief relating
to reorganization, arrangement, readjustment of debt, dissolution or
liquidation, or BAXTER shall have had any such petition filed against it in
which an adjudication of bankruptcy or insolvency is made or an order for
relief is entered, which remains undismissed for a period of sixty (60)
days (or to which it shall have consented or acquiesced) or (2) BAXTER
shall have had a receiver, custodian or trustee appointed for all or a
substantial part of its property. The Guarantor's obligations under the
aforesaid guaranty shall not be affected in any way
39
by the reason of any amendment, renewal, supplement or modification of this
Agreement. In the event that BAXTER assigns this Agreement to an Affiliate
of BAXTER in accordance with Section 21.1, then the Guarantor's guarantee
hereunder automatically shall continue in full force and effect with
respect to the obligations of such BAXTER Affiliate hereunder. This
guaranty shall be binding upon, and enforceable by PRAECIS against, the
successors of the Guarantor.
40
IN WITNESS WHEREOF, the parties have caused this
Commercial Supply
Agreement to be signed by their duly authorized representatives as of the
Signing Date written above.
"BAXTER" "PRAECIS"
XXXXXX PHARMACEUTICAL PRAECIS PHARMACEUTICALS
SOLUTIONS LLC INCORPORATED
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. XxXxxxxxxx
------------------------------ -----------------------------
Name: Xxxxx X. Xxxxxx Name:
Title: VP, Business Affairs Title: Sr. V.P. and C.F.O.
For purposes of Article 29 hereof,
XXXXXX HEALTHCARE CORPORATION
By: /s/ Xxxx X. Tune
-----------------------------
Name:
Title:
41
EXHIBIT 1
PRODUCT MASTER PLAN 1
PRODUCT MASTER PLAN 1
This Product Master Plan 1 is entered into pursuant to, and shall be
governed by the terms of, the
Commercial Supply Agreement (including all
exhibits thereto) signed on Dec. 4, 2002, by and between Xxxxxx Pharmaceutical
Solutions LLC ("BAXTER"), a Delaware limited liability company having a place of
business at 000 Xxxxx Xxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxx 00000, and
PRAECIS
PHARMACEUTICALS INCORPORATED ("PRAECIS"), a Pennsylvania corporation having a
principal place of business at 000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000.
"BAXTER" "PRAECIS"
XXXXXX PHARMACEUTICAL PRAECIS PHARMACEUTICALS
SOLUTIONS LLC INCORPORATED
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. XxXxxxxxxx
-------------------------------------- ------------------------------
Name: Xxxxx X. Xxxxxx Name:
------------------------------------ ----------------------------
Title: Vice President, Business Affairs Title: Sr. V.P. and C.F.O.
--------------------------------- ---------------------------
Date: 11-25-02 Date: 12/4/02
------------------------------------ ----------------------------
1 OF 12
EXHIBIT A - PRESENTATIONS
PRAECIS BAXTER
ID # ID # Product Description
------------------------------------------------------------------------------------------
N/A *** Abarelix for Injectable Suspension, 100 mg/Vial, US (Nude Vials)
N/A *** Abarelix for Injectable Suspension, 100 mg/Vial, US (Packaged for
Irradiation)
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
2 OF 12
EXHIBIT B - PRICING
BATCH SIZE
***
***
BASIC YIELD CALCULATION
a = Fill Weight Rejects from Manufacturing
b = Capping Rejects from Manufacturing
c = Inspection/Packaging Rejects
W = VIALS FILLED (obtained from the Finished Product Accountability sheet
delivered by BAXTER to PRAECIS as part of the Released
Executed Batch Record)
X = TOTAL REJECTS ***
X(TO THE POWER OF 1) = PROCESS REJECTS ***
Y = YIELD ***
*** Approximately 4 lines omitted ***
Z = VIALS TO XXXX ***
PER UNIT PRICE
Vials produced annually Price
----------------------- -----
*** ***
*** ***
*** ***
PRAECIS will order complete Batches of Product on a single Purchase Order,
except when PRAECIS orders a Batch to be divided into sections, such as for
separate labeling. In such cases, PRAECIS will issue multiple Purchase Orders,
each with the same Delivery Date, and the sum of the quantities of Product
ordered on such multiple Purchase Orders shall equal one or more complete
Batches. *** APPROXIMATELY 2 LINES OMITTED *** .
GUARANTEED YIELDS OVER TIME
Definitions:
Y(SUB IGY) = Initial Guaranteed Yield = average yield for conforming
vials for the *** validation Batches.
Y(SUB GY1) = Guaranteed Yield = average yield for the ***
(non-process validation) Batches.
Y(SUB GYi) = on-going Guaranteed Yield = average yield for all Batches in
every *** period, where i (starting with *** )
indicates the current period and i-1 indicates the previous
*** period and i+1 indicates the next *** period.
W(SUB i) = total vials filled for all Batches during a *** period,
where i (starting with *** ) indicates the current period
and i-1 indicates the previous *** period and i+1
indicates the next *** period.
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
3 OF 12
In accordance with section 7.4.1 of the
Commercial Supply Agreement XXXXXX'x
credit to PRAECIS, to be applied against subsequent BAXTER invoices, shall be
computed as follows:
a) First *** Batches (non-process validation)
if Y(SUB GY1) GREATER THAN OR EQUAL TO Y(IGY);
no credit to PRAECIS, otherwise,
Credit to PRAECIS = *** * (Y(SUB IGY) - Y(SUB GY1)) * W(SUB i)
b) *** Batch until the end of first *** period;
if Y(SUB GY2) GREATER THAN OR EQUAL TO Y(SUB GY1);
no credit to PRAECIS, otherwise,
Credit to PRAECIS = *** * (Y(SUB GY1) - Y(SUB GY2)) * W(SUB i)
c) On-going *** period yield calculation;
if Y(SUB GYi+1) GREATER THAN OR EQUAL TO Y(SUB GYi);
no credit to PRAECIS, otherwise,
Credit to PRAECIS = *** * (Y(SUB GYi) - Y(SUB GYi+1)) * W(SUB i)
***
*** APPROXIMATELY 4 LINES OMITTED ***
STABILITY TESTING
Upon PRAECIS' request, BAXTER will perform stability testing of Product. The
testing protocol and pricing will be detailed in a Project Plan.
ANNUAL PRODUCT QUALITY REVIEW
BAXTER will prepare an annual Batch review/comparison summary for use by PRAECIS
regulatory at a charge of $ *** per hour. Prior to commencement of work
BAXTER shall provide an estimate, for informational purposes only, of the number
of hours expected to consume.
QUALITY ASSURANCE AUDITS
Subject to Sections 9.2.1 and 9.2.2 of the
Commercial Supply Agreement, a charge
of $ *** per hour will be paid to BAXTER for quality assurance audits
requested by PRAECIS in excess of *** per year. The hours charged will
include preparation time, audit time by all BAXTER participants, and follow-up
time in preparing responses. Prior to commencement of work BAXTER shall provide
an estimate, for informational purposes only, of the number of hours expected to
consume.
QUALITY CONTROL SAMPLES
Subject to Section 9.2.3 of the
Commercial Supply Agreement, BAXTER will provide
PRAECIS with Quality Control Samples of Product at PRAECIS' request. BAXTER will
supply samples within *** of PRAECIS' request at no cost to PRAECIS. In the
event PRAECIS requests samples for delivery in less than *** and BAXTER
delivers such samples in less than *** , then PRAECIS will pay BAXTER $ ***
for such expedited delivery.
BATCH RECORDS
In the event that PRAECIS requests that the information contained in the
Released Executed Batch Record for a Batch be modified more than *** in any
12-month period, then BAXTER shall charge PRAECIS $ *** to incorporate such
revisions into the Released Executed Batch Record for such Batch and, if
requested by PRAECIS, for all subsequent Batches. Following the initial delivery
of a Released Executed Batch Record for a Batch, a charge of $
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
4 OF 12
*** per record will be paid to BAXTER for distribution of additional Released
Executed Batch Records for such Batch. In the event that PRAECIS requests that
the information contained in the Master Batch Record be modified more than ***
in any 12-month period, then BAXTER shall charge PRAECIS $ *** to
incorporate such revisions into the Master Batch Record
DELAYED RECEIPT DRUG PRODUCT INTERMEDIATE
Per Section 4.3 of the
Commercial Supply Agreement, a charge of $ *** per
occurrence will be paid to BAXTER if BAXTER receives the Drug Product
Intermediate for the Production of Product from PRAECIS not in accordance with
Section 3.3. In addition, in the event BAXTER receives the Drug Product
Intermediate for Production of Product from PRAECIS less than *** prior to
the scheduled date of filling for such Product, BAXTER may cancel Production of
such Product and invoice PRAECIS the Cancellation Fees as set forth in Exhibit
G.
STORAGE OF PRODUCT
A charge of $ *** per pallet per month will be paid to BAXTER for the
storage of Product in excess of *** after the BAXTER Quality Assurance
Release for such Product.
DRUG PRODUCT INTERMEDIATE REIMBURSEMENT
For purposes of Section 7.4.1 of the
Commercial Supply Agreement, XXXXXX'x
maximum liability for reimbursement of Drug Product Intermediate is *** per
Batch.
NO ADDITIONAL NAMED INSURED REQUIREMENT
In accordance with Section 15.1 of the
Commercial Supply Agreement, BAXTER
confirms that PRAECIS shall not be obligated to name XXXXXX as an additional
insured on the PRAECIS Insurance.
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
5 OF 12
EXHIBIT C - AUDITED VENDORS AND SUPPLIERS
***
***
Cambrex Xxxxxxx City
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
6 OF 12
EXHIBIT D - COMPONENT SPECIFICATIONS
EXHIBIT D1 - DRUG PRODUCT INTERMEDIATE SPECIFICATIONS
DRUG PRODUCT INTERMEDIATE: ABARELIX CMC RELEASE
XXXXXX XX: ***
TESTS METHOD REFERENCE SPECIFICATIONS
----------------------------------------------------------------------------------------------------
Appearance *** White to Off-White Powder
CMC Content(HPLC) *** ***
Loss on Drying(Water Content) *** ***
Identification (HPLC) *** Meets SOP Requirements
Abarelix Assay (HPLC) *** *** APPROXIMATELY 6 LINES OMITTED ***
Particle Size *** *** APPROXIMATELY 5 LINES OMITTED ***
Acetate Content (HPLC) *** ***
Bacterial Endotoxins *** ***
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
7 OF 12
EXHIBIT D2 - BAXTER SUPPLIED COMPONENT SPECIFICATIONS
ITEM: VIAL, ***
XXXXXX XX: ***
TESTS METHOD REFERENCE SPECIFICATIONS
--------------------------------------------------------------------------------
Full USP Testing *** ***
Full EP Testing *** ***
Full SOP Testing *** ***
ITEM: STOPPER ***
XXXXXX XX: ***
TESTS METHOD REFERENCE SPECIFICATIONS
--------------------------------------------------------------------------------
Elastomeric Testing *** ***
a) Specific Gravity a) *** a) ***
b) Ultraviolet Spectrum b) *** b) ***
c) Infrared Spectrum c) *** c) ***
Full USP Physiochemical Testing *** ***
EP Testing *** ***
Full SOP Testing *** ***
ITEM: SEAL, ***
XXXXXX XX: ***
TESTS METHOD REFERENCE SPECIFICATIONS
--------------------------------------------------------------------------------
Requirements as Described in SOP *** ***
The following BAXTER supplied items will under go no incoming release testing
but will be ordered to the dimentional specifications below.
ITEM: BOX ***
XXXXXX XX: ***
DIMENSIONS
***
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
8 OF 12
ITEM: DIVIDER ***
XXXXXX XX: ***
DIMENSIONS
***
ITEM: PAD ***
XXXXXX XX: ***
DIMENSIONS
***
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
9 OF 12
EXHIBIT E - PRODUCT SPECIFICATIONS
PRODUCT: ABARELIX FOR INJECTION SUSPENSION
XXXXXX XX: ***
TESTS METHOD REFERENCE SPECIFICATIONS
--------------------------------------------------------------------------------------------------------
Bacterial Endotoxin by Kinetic *** ***
Turbidimetric
Appearance (Powder) *** White to Off-White Powder
Appearance *** *** White to Off-White Suspension
Loss on Drying (Water Content) *** ***
ID of CMC by HPLC *** Retention time conforms with retention time
of working standard
Assay by HPLC *** ***
ID by HPLC *** Retention time conforms with retention time
of working standard
ID by FTIR *** Abarelix IR spectrum conforms to standard
spectrum
Content Uniformity *** ***
Related Substances *** *** APPROXIMATELY 8 LINES OMITTED ***
pH *** *** ***
Dose Delivered *** *** ***
Dissolution *** ***
Particle Size *** *** *** APPROXIMATELY 6 LINES OMITTED ***
Sterility *** Sterile
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
10 OF 12
EXHIBIT F - REGULATORY AUTHORITIES
United States Federal Food and Drug Administration or any successor organization
thereto
11 OF 12
EXHIBIT G - CANCELLATION FEES
TIMING CANCELLATION FEE
----------------------------------------------------------------------------------------
Cancellation of any lot within *** of the scheduled *** date ***
Cancellation of any lot within *** of the scheduled *** date ***
Cancellation of any lot within *** of the scheduled *** date ***
** Notwithstanding the foregoing Cancellation Fees chart, PRAECIS shall be
entitled, at any time upon *** written notice to BAXTER, to postpone a Firm
Delivery Date for up to *** with no cancellation penalty or fee.
** PRAECIS shall be entitled to cancel or delay any Firm Purchase Order more
than *** from the scheduled *** date with no cancellation penalty or fee.
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS (*) DENOTE SUCH OMISSIONS.
12 OF 12
EXHIBIT 2
RELEASED EXECUTED BATCH RECORD
The Released Executed Batch Record for Product shall meet cGMP requirements and
shall, at a minimum, include the following information with respect to such
Batch:
- Written confirmation from BAXTER that all Production Batch records and
supporting records have been reviewed and approved by XXXXXX'x Quality
Assurance Group
- Certificate of Analysis
- Certificate of Irradiation
- Finished Product Accountability Sheet
- A certificate of compliance/conformance indicating that the final
Product at the time of the BAXTER Quality Assurance Release for such
Product has been manufactured under cGMPs and has met all established
performance requirements related to the approved Product
Specifications
- A detailed listing of all deviations, holds and investigations out of
specification
- Manufacturing process data
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