EXHIBIT 10.14
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN PORTIONS OF THIS DOCUMENT.
SUCH PORTIONS HAVE BEEN REDACTED AND MARKED WITH ASTERISKS (**).
THE NON-REDACTED VERSION OF THIS DOCUMENT HAS BEEN SENT TO THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO AN APPLICATION FOR CONFIDENTIAL TREATMENT.
SUPPLY AGREEMENT
BETWEEN
OREAD PHAMACEUTICAL MANUFACTURING, INC.
AND
PRAECIS PHARMACEUTICALS INCORPORATED
FOR
ABARELIX-DEPOT POWDER
TABLE OF CONTENTS
1. DEFINITIONS ..............................................................
2. PRODUCTION ARRANGEMENT ...................................................
2.1 Manufacturing ............................................................
2.2 Oread's Proposal 0210-E39-OP .............................................
2.3 Sub-Contracting ..........................................................
3. RAW MATERIALS, COMPONENTS, CONTAINERS, AND LABELING ......................
3.1 Supply ...................................................................
3.2 Labeling .................................................................
3.3 Verification .............................................................
3.4 Applicability of Labeling and Packaging Provisions .......................
4. INTERMEDIATE PHARMACEUTICAL INGREDIENT (Intermediate) ....................
4.1 Delivery of Intermediate .................................................
4.2 Segregation ..............................................................
4.3 Verification .............................................................
4.4 Discrepancy ..............................................................
4.5 Damage ...................................................................
4.6 Other Damage or Loss .....................................................
4.7 Remedy ...................................................................
4.8 Limitation of Liability ..................................................
5. FORECASTS AND ORDERS .....................................................
5.1 Forecasts ................................................................
5.2 Manufacturing Schedule ...................................................
5.3 Purchase Orders ..........................................................
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5.4 Permitted Amount To be Ordered ...........................................
5.5 Changes to Three Month Forecast ..........................................
5.6 Obsolete Materials .......................................................
5.7 Minimum Order Size .......................................................
5.8 No Purchase Obligation ...................................................
6. DELIVERY AND PAYMENT TERMS ...............................................
6.1 Shipping .................................................................
6.2 Storage ..................................................................
6.3 Payment ..................................................................
6.4 Invoice ..................................................................
6.5 Rejection of Batch Record ................................................
6.6 Discoveries after Payment ................................................
6.7 Sales and Use Taxes ......................................................
6.8 Production Fees ..........................................................
7. QUALITY CONTROL ..........................................................
7.1 Responsibility ...........................................................
7.2 Compliance ...............................................................
8. INSPECTION AND AUDITING RIGHTS ...........................................
8.1 Processing and Packaging .................................................
8.2 Inspections and Audits ...................................................
8.3 Non-Compliance ...........................................................
9. TESTING AND INSPECTION OF PRODUCT ........................................
9.1 Batch Records ............................................................
9.2 Independent Testing ......................................................
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9.3 Failure to Meet Specifications due to OREAD ..............................
9.4 Retain Samples ...........................................................
9.5 Long-term Stability Studies ..............................................
9.6 Outside Laboratory .......................................................
9.7 Deviations and Defects ...................................................
10. INVENTORY AND YIELD ......................................................
10.1 Intermediate Accountability Reports ......................................
10.2 Practical Yield ..........................................................
11. REGULATORY COMPLIANCE AND RELATED MATTERS ................................
11.1 NDA ......................................................................
11.2 Submissions to Regulatory Authorities ....................................
11.3 Inspections ..............................................................
11.4 Communications ...........................................................
11.5 Modifications to Equipment and Facility ..................................
11.6 Responsibility for Compliance ............................................
11.7 Drug Experience Reports ..................................................
12. HEALTH AND SAFETY ........................................................
12.1 Health and Safety Procedures .............................................
12.2 MSDS .....................................................................
12.3 Training .................................................................
12.4 Responsiveness ...........................................................
13. MAINTENANCE OF RECORDS AND REPORTS .......................................
13.1 By OREAD .................................................................
13.2 By PRAECIS ...............................................................
14. REVISIONS TO MASTER BATCH RECORD OR SPECIFICATIONS .......................
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14.1 Master Batch Record ......................................................
14.2 Difference in Cost .......................................................
14.3 OREAD Unable to Comply ...................................................
15. TRADEMARKS AND LABELING ..................................................
15.1 Use of Trademarks .......................................................
15.2 Reference to OREAD .......................................................
16. WASTE HANDLING AND DISPOSAL ..............................................
16.1 Waste Handling by OREAD ..................................................
16.2 Waste Contractor .........................................................
16.3 Audit Rights .............................................................
17. TITLE ....................................................................
18. WARRANTIES AND REPRESENTATIONS ...........................................
18.1 OREAD's Warranties .......................................................
18.2 PRAECIS's Warranties .....................................................
18.3 Disclaimer ...............................................................
19. RECALLS ..................................................................
19.1 Responsibility ...........................................................
19.2 PRAECIS Responsibility ...................................................
19.3 OREAD's Responsibility ...................................................
20. FORCE MAJEURE ............................................................
20.1 Excusing Performance .....................................................
20.2 Resumption ...............................................................
21. INDEMNIFICATION ..........................................................
21.1 PRAECIS's Indemnification ................................................
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21.2 OREAD's Indemnification ..................................................
21.3 Procedures ...............................................................
21.4 Insurance ................................................................
22. TERM AND TERMINATION .....................................................
22.1 Term .....................................................................
22.2 Termination ..............................................................
22.3 Bankruptcy or Insolvency .................................................
22.4 Inventory ................................................................
22.5 Product and Work in Process ..............................................
22.6 Intermediate and Other Materials .........................................
22.7 Equipment ................................................................
22.8 Liability ................................................................
23. CONFIDENTIALITY ..........................................................
24. INDEPENDENT CONTRACTOR ...................................................
25. PUBLIC STATEMENTS ........................................................
26. NOTICES ..................................................................
27. ASSIGNMENT ...............................................................
28 GOVERNING LAW ............................................................
29 ARBITRATION ..............................................................
30 SURVIVAL OF TERMS ........................................................
31. ADDITIONAL TERMS .........................................................
31.1 Entire Agreement .........................................................
31.2 Amendments; No Waiver ....................................................
31.3 Validity .................................................................
31.4 Headings .................................................................
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31.5 Counterparts .............................................................
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SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT (the "Agreement") is entered into as of February 2,
2000 by and between OREAD PHARMACEUTICAL MANUFACTURING, INCORPORATED.
("Oread") and Praecis Pharmaceuticals, Incorporated ("Praecis").
WHEREAS,Praecis intends to seek regulatory approval to market the pharmaceutical
product Abarelix-Depot, (the "API" ) as a sterile powder for reconstitution, in
the United States of America and various foreign countries: and
WHEREAS, Oread has the necessary facilities, equipment, personnel and
professional experience to fill the Product into vials, and label and package
the vials under cGMPs ; and
WHEREAS, Praecis desires to establish Oread as the filler, and may establish
Oread as the packager, of the Product;
NOW, THEREFORE, in consideration of the above and of the mutual covenants
contained herein and for other good and valuable consideration, receipt of which
is hereby acknowledged, the parties agree as follows:
1. DEFINITIONS
1.1 "Affiliate" of a party shall mean any corporation or other business
entity controlled by, controlling or under common control with, such party. For
this purpose "control" shall mean direct or indirect beneficial ownership of
more than fifty percent (50%) of the voting or income interest in such
corporation or other business entity.
1.2 "Batch" shall mean one (1) production lot of Product.
1.3 "Production Fees" shall mean the fees set forth in Schedule A.
1.4 "Batch Record" shall mean the document created as and after each Batch
is processed and packaged that, if complete and accurate, reflects and
incorporates all aspects of the Master Batch Record, the Certificate of
Analysis, and any MD Reports issued, with respect to such Batch.
1.5 "Certificate of Analysis" shall mean a certificate issued by Oread
stating that a Batch has been Processed and Packaged in accordance with the
Master Batch Record and stating the final release test results.
1.6 "cGMPs" shall mean the then-current Good Manufacturing Practices
applicable to the manufacture of pharmaceutical products for human use in the
United States andthe European Union, and testing per the Japanese Pharmacopeia.
1.7 "Components" shall mean the suitable vial, stopper, and seal, in which
the Product is contained as identified in the Master Batch Record.
1.8 "Containers" shall mean packaging boxes and shipping containers.
1.9 "Contract Quarter" shall mean a three-month period commencing on the
first day of each January, April, July, and October of a Contract Year and
ending, respectively, on the last day of each March, June, September, and
December following during the term of this Agreement, provided, however, that
the first Contract Quarter shall begin upon FDA approval of the Facility as a
site to manufacture the Product and end on the ensuing March 31st, June 30th,
September 30th, or December 31st, as appropriate.
1.10 "Contract Year" shall mean a twelve-month period commencing on each
January 1 and ending on December 31 following during the term of this Agreement,
provided, however that the first Contract Year shall begin on the Effective Date
and end December 31, 2000, and the second Contract Year shall begin on January
1, 2001 and end December 31, 2001
1.11 "Effective Date" shall mean January 1st 2000
1.12 "Facility" shall mean Oread's facility at Palo Alto, California, or
any other Oread facility as agreed to in writing by the parties to this
Agreement.
1.13 "FDA" shall mean the United States Food and Drug Administration.
1.14 "Hazardous Waste" shall mean all hazardous waste, as defined by
applicable federal, state, and local laws and regulations, to the extent the
same arise out of Oread's Processing and Packaging of the Product in accordance
with this Agreement.
1.15 "Intermediate" shall mean Abarelix CMC bulk powder as received from
Praecis in accordance with this Agreement.
1.16 "Labeling" shall mean the printed labeling and package inserts for
the Product.
1.17 "MD Report" or "Manufacturing Deviation Report" shall mean a report
indicating any deviation from the Processing and Packaging procedures set forth
in the Master Batch Record.
1.18 "Manufacturing Schedule" shall mean the twelve-month rolling
manufacturing schedule for the Product at the Facility prepared by Oread and
delivered to Praecis in accordance with Section 5.2 hereof.
1.19 "Master Batch Record" shall mean the document containing the formula
(listing Intermediate and Raw Materials), procedures for the manufacturing
(listing Components and Containers), quality assurance of the Product and
in-process and finished product specifications for the Product, as set forth in
Schedule C, as such may be amended by the parties pursuant to Section 14.1.
1.20 "MSDS's" shall mean the Material Safety Data Sheets for the
Intermediate and the Product.
1.21 "NDA " shall mean the New Drug Application Product Abarelix-Depot
filed by Praecis with the FDA.
1.22 "Non-Hazardous Waste" shall mean all rejects or waste arising out of
Processing and/or Packaging, including without limitation, rejected or unusable
Raw Materials or Intermediate, disposable manufacturing equipment (including
filters used in Processing and Packaging), wash rinse, and previously used or
discarded protective clothing, except to the extent that any of the foregoing is
Hazardous Waste.
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1.23 "Package" and "Packaging" shall mean the act of inspecting, placing
the Labeling on and with the Product, and final packing of the Product into
Containers.
1.24 "PCR" or "Product Change Request" shall mean the document used by
either party to request a change to the Master Batch Record in accordance with
Section 14.1.
1.25 "Oread Approval Date", as applied to each Batch, shall mean the date
on which Oread's quality assurance department approves such Batch for shipment
in compliance with the Master Batch Record.
1.26 "Praecis Approval Date", as applied to each Batch, shall mean the
date on which Praecis' quality assurance department approves such Batch for
shipment in compliance with the Master Batch Record.
1.27 "Process" or "Processing" shall mean the pharmaceutical manufacturing
procedures, or any part thereof, involved in preparing the Components for use,
filling the Intermediate into vials and, sealing the vials with stoppers and
seals, in accordance with the Master Batch Record and applicable internal plant
test.
1.28 "Product" shall mean the filled vials containing the Intermediate.
1.29 "Raw Materials" shall mean any excipients necessary for Processing
(exclusive of the Intermediate) as listed in the Master Batch Record.
1.30 "Regulatory Authorities" shall mean the FDA or such other foreign
country equivalent regulatory agency as applicable and notified to Oread in
writing by Praecis as having regulatory governance over the manufacture or sale
of the Product manufactured under this Agreement.
1.31 "Requirements" shall mean those quantities of the Product that are
ordered by Praecis hereunder for clinical, development, and commercial use,
including samples.
1.32 "Schedules" shall mean the schedules and exhibits attached hereto and
incorporated herein by this reference.
1.33 "Specifications" shall mean the Raw Material, Component, Labeling,
and Container specifications and the in-process and finished product
specifications for release of the product, and stability specifications if
applicable, as mutually agreed in writing by the parties.
1.34 "Work in Process" shall mean the Intermediate and the Raw Materials
with respect to a Batch during the time period beginning at the time Oread
begins dispensing such Intermediate in accordance with the Master Batch Record
and ending at the Oread Approval Date.
2. PRODUCTION ARRANGEMENT
2.1 Manufacturing. Oread shall Process, Package and store, and shall
analyze for quality control and release the Product in accordance with the
Specifications and ship the Product in accordance with Praecis's instructions
and the terms and conditions of this Agreement. Additionally, Oread will
coordinate the irradiation of the filled vials at a supplier approved by
Praecis. A more complete description of the scope of work covered
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by this agreement is included in Oread's Proposal 0210-E339-OP, revision # 6,
dated December 18th 1998, a copy of which is attached (Schedule B).
2.2 Oread's Proposal 0210-E339-OP. Any work that was authorized under
Oread's Proposal 0210-E339-OP, revision # 6, dated December 18th 1998, or by a
subsequent authorized change order thereto and which work will continue past the
Effective Date, then such work and only such work as will be performed
subsequent to the Effective date shall be incorporated into and be subject to
the terms of this Agreement.
2.3 Sub-Contracting. Oread shall not, without prior written approval of
Praecis, sub-contract, delegate or assign any part of its responsibilities under
this agreement to another party.
3. RAW MATERIALS, COMPONENTS, CONTAINERS, AND LABELING
3.1 Supply. Oread shall acquire the all of the Raw Materials, Components,
Containers, and Labeling required for Processing and Packaging from vendors
mutually agreed to in writing by the parties, the cost of which shall be
included in the Batch Production Fee (as set forth in Schedule A). Praecis will
supply the required vials at no cost to Oread.
3.2 Labeling. Praecis shall be responsible for ensuring that the Labeling
conforms to all applicable laws, rules, regulations, and requirements of all
appropriate regulatory authorities. Praecis shall review the proofs for the
Labeling. The Labeling shall be shipped directly from the vendor to Oread. Oread
shall be responsible for ordering and paying for sufficient quantities of
Labeling as are required for the Packaging based upon the Three Month Forecast
(as defined in Section 5.1). Oread shall store the Labeling as required by any
relevant laws or regulations and shall place the Labeling on and with the
Product as specified by Praecis.
3.3 Verification. Oread shall inspect and test all Raw Materials,
Components, Containers, and Labeling according to the mutually agreed-upon
quality methods and procedures ( including Oread's reduced testing procedures
for Oread approved vendors), and shall certify that the materials received meet
the Specifications for the same and the applicable vendor certificates of
analysis.
3.4 Applicability of Labeling and Packaging Provisions. Not withstanding
the foregoing or any other provision of this Agreement, the provisions contained
herein with respect to Labeling and Packaging shall apply only if, and to the
extent that, Praecis elects, by written notice to Oread, to have Oread perform
such tasks.
4. INTERMEDIATE PHARMACEUTICAL INGREDIENT
4.1 Delivery of Intermediate. At least ten (10) days prior to the start
date of manufacture of a Batch set forth in the applicable Manufacturing
Schedule, Praecis shall furnish the Intermediate to Oread at the Facility, free
of charge, in such quantities as are necessary to enable Oread to manufacture
the quantities of Product set forth in the applicable Purchase Order for such
month.
4.2 Segregation. Oread shall keep all Intermediate segregated from other
materials in its control so as to maintain the confidentiality of the substance
and shall not allow any samples of the substance to be used or tested by any
party not under its direct supervisory control for any purposes and shall
perform only such tests and analysis as it reasonably and in good xxxxx xxxxx
necessary for this contract and shall maintain the confidentiality of such test
results in compliance with Paragraph 23 of this agreement.
4.3 Verification. Oread shall verify the quantity and chemical identity
of all Intermediate received by Oread according to the methods and procedures
set forth in the Specifications within five working (5) days of receipt by Oread
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of the Intermediate. Within such five (5) day period, Oread shall inform Praecis
in writing of any discrepancies in the quantity and/or identity of the
Intermediate received and the description of such Intermediate contained in the
documents accompanying each shipment of the Intermediate. Prior to use of the
Intermediate for Processing, Oread shall perform analytical testing on the
Intermediate as specified in the Specifications. Oread quality assurance will
release the Intermediate for use based upon the results of such analytical
testing.
4.4 Discrepancy. If Oread fails to inform Praecis of any discrepancies in
the quantity or identity of the Intermediate identified in Section 4.3 within
such five (5) day period or if within such five day period Oread discovers the
Intermediate has been lost or damaged as a result of Oread's failure to handle
the Intermediate in accordance with the terms of this Agreement, then upon
notice from Oread to Praecis of such discrepancy, loss or damage, Praecis shall
endeavor to supply Oread with additional Intermediate sufficient to manufacture
the scheduled Batch in accordance with the applicable Purchase Order, but if
Praecis is unable to supply such additional Intermediate, Praecis may cancel or
postpone the scheduled manufacturing without any liability. If Oread notifies
Praecis of a discrepancy in the quantity or identity of the Intermediate within
such five (5) day period, Praecis shall endeavor in good faith to ship
additional Intermediate within the time period necessary for Oread to
manufacture in accordance with the scheduled manufacturing date in accordance
with the applicable Purchase Order, but if such discrepancy results from loss or
damage arising from Oread's failure to handle the Intermediate in accordance
with the terms of this Agreement and Praecis is unable to supply such additional
Intermediate, Praecis may cancel or postpone the scheduled manufacturing without
any liability.
4.5 Damage. In the event of any damage to the Intermediate which Oread
cannot, within the foregoing five-day period, prove occurred prior to delivery
to Oread or if any such damage is the result of Oread's failure to handle the
Intermediate in accordance with the terms of this Agreement, then Oread shall
remedy such failure or damage in accordance with Section 4.7 below.
4.6 Other Damage or Loss. Except for any loss or damage resulting from
fire (other than one caused by the negligence of Oread), flood, tornado,
earthquake or other act of God beyond Oread's ability to control or to the
extent caused by Praecis's negligence or willful misconduct, Oread shall assume
all responsibility and liability for, and shall defend, indemnify and hold
Praecis harmless from and against, any loss of or damage to the Intermediate
while Oread has custody and control over the Intermediate, Work in Process
and/or the finished Product. Such responsibility and liability shall commence
upon the receipt of the Intermediate at the Facility and end upon the earlier of
(i) delivery of the Product containing such Intermediate to a common carrier at
the Facility for shipment to Praecis or its irradiation supplier, or (ii) with
respect to any Batch thirty (30)days following the Oread Approval Date, but only
if during such thirty (30) period Praecis has not duly instructed Oread with
respect to the shipment of such Batch.
4.7 Remedy. If any loss or damage to the Intermediate occurs as described
in Sections 4.4 or 4.5, then without limitation of any other right or remedy of
Praecis (except to the extent expressly provided in Section 4.8), (a) Oread
shall, at Oread's option, return the Intermediate to Praecis or dispose of same
according to Praecis's instructions or (b) if Oread is responsible for any
damage or loss described in Sections 4.4 or 4.5, Oread shall, at Praecis's
option, either (i) purchase from Praecis replacement Intermediate for a value
equal to Praecis's then-current cost for the Intermediate that is lost, damaged
or destroyed, or (ii) credit Praecis on its next invoice for an amount equal to
Praecis's then-current cost for such Intermediate.
4.8 Limitation of Liability. Notwithstanding the foregoing nor anything
contained elsewhere in this Agreement (other than in this Section 4.8 and the
provisions referred to in this Section 4.8), in no event shall Oread's liability
to Praecis for damages or losses of the Intermediate (excluding Intermediate
contained in recalled Product as set forth in Section 19.3, or in the case of
the willful misconduct or gross negligence of Oread) under this Agreement exceed
the lesser of (a)
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the replacement cost to Praecis of any lost or damaged Intermediate, or (b) $**%
of the equivalent per Batch or per vial Production fees that Oread would have
expected to be paid by Praecis for the amount of lost or damaged Intermediate;
provided, however, that the foregoing shall not limit the liability and
obligations of Oread set forth in Section 6.5, 6.6, 9.2 and 9.3 with respect to
Oread's costs (which cost excludes any Intermediate ) incurred correcting
deficiencies in, or reworking, a Batch or Batch Records in the circumstances
described in such Sections., The cost of the Intermediate is currently estimated
to be ** dollars ($** US) per gram.
5. FORECASTS AND ORDERS
5.1 Forecasts. On or before the fifteenth (15) day of each Contract
Quarter, Praecis will provide Oread with a non-binding written twelve (12) month
rolling forecast of the quantities of Product that Praecis expects to purchase
during each of the next twelve (12) months (each, a "Twelve Month Forecast"). On
or before the fifteenth (15) day of each month of each Contract Year, Praecis
will provide Oread with a written three-month rolling forecast of the quantities
of Product that Praecis expects to purchase during each of the next three (3)
months (each, a "Three Month Forecast" and, together with the Twelve-Month
Forecasts, the "Forecasts"). The Three Month Forecast is firm and may not be
changed except pursuant to Sections 5.3 and 5.5 below and shall be used by
Oread, among other things, to determine the quantities of Raw Materials to order
to prepare for manufacturing the Product.
5.2 Manufacturing Schedule. Within ten (10) days of Oread's receipt of a
Three Month Forecast from Praecis, Oread shall supply Praecis with a
Manufacturing Schedule on a rolling basis for the following twelve (12) months.
Such Manufacturing Schedule shall set forth for each of the twelve (12) months
covered thereby the proposed start and completion dates of manufacture of the
Batch(es) estimated in the most recent Forecasts to be purchased by Praecis
during such month, which dates shall be consistent with Oread supplying the
quantities of Product on the time frames set forth in the most recent Forecasts
and which manufacturing start date for the first such Batch to be purchased
during the first such month covered by such Manufacturing Schedule may not be
earlier than the tenth (10th) day of such month. The first three months of such
Manufacturing Schedule shall be firm and may not be altered without the written
consent of Praecis.
5.3 Purchase Orders. To order Product hereunder for delivery in a Contract
Quarter, Praecis shall submit a purchase order to Oread referencing this
Agreement at least fifteen (15) days prior to the proposed start date of
manufacture of the Product for that Contract Quarter, as set forth in the then
most recent Manufacturing Schedule covering such Contract Quarter (provided that
such Manufacturing Schedule calls for one or more Batches to begin manufacture
as of such proposed start date) and, subject to the terms of this Agreement,
setting forth the number of Batches to be Processed and Packaged, the time upon
which such Processing and Packaging must be completed, and the approximate
amount to be paid by Praecis for such Processing and Packaging based upon the
Guaranteed Yield (as defined hereafter) and the appropriate fees as listed in
Schedule A of this Agreement. The Purchase Order shall be in accordance with the
Three Month Forecast except as otherwise contemplated hereby. If Praecis fails
to either issue a Purchase Order or amend the Three Month Forecast to eliminate
a scheduled Batch at least ten (10) days prior to the scheduled manufacturing
start date for such Batch identified in the Three Month Forecast, Praecis shall
pay Oread the Production Fee for a single Batch. Such payment shall be due and
owing thirty (30) days after the start date for manufacture of such Batch as set
forth in the Manufacturing Schedule which provides for the manufacture of Batch
during the first three months covered by such Manufacturing Schedule. Upon
acceptance by Oread, the following aspects of each Purchase Order shall be
binding and become part of this Agreement: the number of Batches ordered, the
estimated Batch Production Fee, the commencement date of manufacturing, and the
delivery date. Oread shall Process and Package in accordance with such Purchase
Order. If there is a conflict or inconsistency between this Agreement and the
Purchase Orders, this Agreement shall govern.
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5.4 Permitted Amount To be Ordered. The quantities ordered for any month
will be no more than one hundred ten percent (110%) of the Three Month Forecast
for a month or an additional Batch, whichever is greater, provided Raw
Materials, Components, Containers, Labeling, and Intermediate are available for
the amounts over one hundred percent (100%). Oread will use its reasonable
efforts, but will be under no obligation, to supply Product in excess of this
permitted amount.
5.5 Changes to Three Month Forecast.
(a) Prior to Issuance of Purchase Order. If Praecis amends the Three
Month Forecast prior to issuing a Purchase Order and the Raw Materials,
Components, Containers, and Labeling purchased in accordance with the Three
Month Forecast cannot be used by Oread for other Batches or in the production of
any other products within six (6) months of such amendment, Praecis shall
reimburse Oread for one hundred percent (100%) of Oread's actual cost of such
unused Raw Materials, Components, Containers, and Labeling and shall have no
further liability on account of such amendment. Praecis may notify Oread of such
amendment verbally, but such notification shall be confirmed in writing through
the issuance by Praecis of a new Three Month Forecast within five (5) business
days of the verbal request. Notwithstanding the foregoing provisions of this
Section 5.5(a), Praecis may cancel, delay or reschedule a schedule Batch without
liability if Praecis reasonably believes that Oread's breach of any
representation, warranty or agreement contained herein would affect the Batch or
the Product.
(b) Payment Terms. Oread shall invoice Praecis for any amounts owed
under this Section at the time the re-scheduled or canceled Batch was originally
scheduled. All invoices shall be due and payable thirty (30) days following
receipt by Praecis of the invoice.
5.6 Obsolete Materials. Praecis shall pay to Oread the actual cost of any
Raw Materials and related Components, plus any related special disposal costs,
purchased by Oread for its performance of this Agreement rendered obsolete by
acts of Praecis or due to regulatory changes.
5.7 Minimum Order Size. The minimum size of any order for Product shall be
one Batch with larger orders being in whole number multiples of a Batch.
5.8 No Purchase Obligation. Except as otherwise set forth herein, at no
time during the term of this Agreement shall Praecis be obligated to issue any
Purchase Order or to order any minimum quantities of Product hereunder.
5.9 Inability or failure to supply. In the event Oread is unable to supply
Product in accordance with the terms hereof, and such inability is solely the
responsibility of Oread, then Oread shall promptly notify Praecis in writing of
such inability, which notice shall include a reasonably detailed explanation of
the reasons for such inability (an "Oread Product Supply Deficiency Notice").
Upon Praecis' receipt of an Oread Product Supply Deficiency Notice, or upon any
material failure by Oread to meet its supply obligations hereunder and Oread's
receipt from Praecis of a notice reasonably describing such material failure by
Oread (a "Praecis Default Notice"), then without limitation of any other right
or remedy of Praecis, if Oread's inability or material failure to supply Product
in accordance with the terms hereof is reasonably to continue for at least sixty
(60) days, Praecis shall have the right to (i) transfer the manufacture of some
or all of the quantity of Product provided for herein to be manufactured at the
Facility to one or more alternative suppliers, at an alternative manufacturing
site or sites, selected by Praecis and/or (ii) assign on-site Praecis
representative(s) for the purpose of providing significant input into the
direction and control of the manufacture of Product at the Facility, in
particular those activities that are performed solely and exclusively by Oread
for the purpose of meeting its obligations under this Agreement, and to the
extent reasonable and commercially practicable without violation of any laws or
regulations
14
applicable to the manufacture of the Product at the Facility, or which would
require or in so doing result in Oread breaching any confidentiality agreement
or other binding agreement with a third party,. In case of either (i) or (ii),
Oread shall promptly provide (and Praecis shall be entitled to provide) to such
alternative supplier(s) and/or Praecis, as applicable, such technical transfer
information as may be necessary for such supplier(s) or Praecis as required
under section 5.9 (ii), as applicable, to qualify with all relevant regulatory
authorities. Except in the case of force majeure, in which case the provisions
of Article 20 shall apply, and without limitation of any other right or remedy
of Praecis, if the provisions of the Section 5.9 apply, Oread shall (a) at its
sole cost and expense, in addition to the provisions of technical transfer
information as provided above, take all other reasonable actions available to it
to facilitate the transfer, or the input by the on-site Praecis
representative(s) to the direction and control, of manufacture of Product as
described above and (b) be liable to Praecis for all out-of-pocket costs and
expenses incurred by Praecis in connection with such technical transfer
including such reasonable costs and expenses in connection with qualifying
itself or one or more alternative suppliers of Product with the relevant
regulatory authorities. In any case, Praecis shall act in a commercially
reasonable manner with respect to obtaining an alternative supply of Product as
contemplated above. Oread's total reimbursement to Praecis under Section 5.9 (b)
of the Agreement shall be limited to 28.5% of the total payments that have been
made to Oread by Praecis , including payments made prior to the effective date
of this contract during the twenty four (24) months immediatley preceding the
notification of the transfer, minus any prior such claims paid by Oread to
Praecis in the same 24-month period If within ninety (90) days after Praecis'
receipt of an Oread Product Supply Deficiency Notice or Praecis' delivery to
Oread of a Praecis Default Notice, as applicable, Oread provides Praecis with
evidence reasonably satisfactory to Praecis that Oread is able to and will meet
its supply obligations hereunder ("Cure Evidence"), then, unless this Agreement
has been terminated in accordance with Article 22, within sixty (60) days of
receiving such Cure Evidence Praecis shall resume purchasing Product from Oread
in accordance with the terms of this Agreement (subject to again ceasing such
purchasing as contemplated by this Section 5.9), provided that Praecis shall be
allowed to fulfill any outstanding obligations to other suppliers that were
incurred by Praecis due to Oread's failure or inability to supply Product to
Praecis.
6. DELIVERY AND PAYMENT TERMS
6.1 Shipping. Oread shall ship the Product f.o.b. the Facility in
accordance with the terms of the Purchase Order. Oread shall not ship any Batch
until Praecis notifies Oread in writing or the thirty (30) day period described
in Section 6.2 has expired. In no event shall Oread be required to ship any
Batch prior to the Oread's Approval Date for such Batch. If at the written
request of Praecis, Oread does agree to so ship the Product before Oread's
Approval Date, Praecis agrees to assume all transportation and handling costs
incurred subsequent to the initial shipment, should the Batch subsequently be
failed by Oread's quality assurance. Delivery of the Product by Oread to Praecis
shall be deemed to have taken place upon delivery to a common carrier at the
Facility, including shipments of Work in Process to Praecis contractors.
6.2 Storage. Oread shall store the Product at no cost for up to thirty
(30) days after the Oread Approval Date. After such thirty (30) day period,
Oread shall have no obligation to store the Product and may ship the Product to
Praecis. If Oread agrees to continue to store the Product, Praecis shall pay
Oread at a rate of ** dollars ($**) per pallet per month or portion thereof, and
all risk of loss to Product during such period shall be borne by Praecis.
6.3 Payment. Praecis shall pay Oread the Production Fees set forth in the
Purchase Order for Processing and Packaging, for the purchase of Raw Materials,
Containers, Components, and Labeling, and for the disposal of Hazardous Waste by
Oread in accordance with Section 16, provided
15
that the Batch Record is not rejected pursuant to Section 6.5 unless such
rejection is invalidated pursuant to Section 9.2.
6.4 Invoice. On or after each Oread Approval Date during the term of this
Agreement, Oread shall invoice Praecis for the Production Fees applicable to the
Batch Processed and Packaged, which shall be based upon the Production Fee set
forth on the applicable Purchase Order. All invoices shall be due and payable by
Praecis thirty (30) calendar days after the date of the invoice, provided
Praecis receives, within 5 business days of the Oread Approval Date a copy of
the complete and accurate Certificate of Analysis and certificate of compliance
with cGMPs. For each day that the Certificate of Analysis or certificate of
compliance is delayed beyond the said five (5) business days, the due and
payable date of the related invoice shal be delayed one (1) day.
6.5 Rejection of Batch by Praecis. Praecis shall not be obligated to pay
the applicable invoice within the thirty (30) day period described in Section
6.4 if the Batch is rejected within such thirty (30) day period. The Batch shall
be assumed accepted unless Praecis notifies Oread in writing within thirty (30)
days after the receipt of such Batch by Praecis that Praecis has determined
that,due to the fault of Oread, either the Product does not conform to the
Specifications ( excepting failure to meet the Specifications caused by acts or
ommissions of Praecis or its agents, or during transportation to Praecis
designated destinations) or that the Batch Records are not complete. If Praecis
rejects the Product due to a deficient Batch Record within the foregoing time
period, Praecis shall provide Oread with verbal notice as soon as possible and
in any event within two (2) business days of such rejection and follow up with
written notice of such rejection within ten (10) days of the rejection setting
forth the basis for such rejection. If Oread fails to correct the deficiency
within ten (10) days of receipt of the written notice or if Praecis rejects the
correction because the Batch Record remains deficient, Praecis may, at its
option and in its sole discretion, either reject the Batch in its entirety or
require that Oread, at Oread's sole cost and expense, correct the deficiency. If
Praecis rejects the Batch and the Laboratory described in Section 9.2 agrees
that the Batch is deficient or Oread agrees that the Batch should have been
rejected, Oread shall reimburse Praecis for one hundred percent (100%) of
Praecis's then-current cost of the Intermediate contained in such Product,
subject to section 4.8 limitation, and, if Praecis so elects, Oread shall, to
the extent feasible, at its sole cost and expense, rework the Batch, and correct
the Batch Records, so that the Product conforms to the Specifications and the
Batch Records are complete.
6.6 Discoveries after payment. If, after payment is made for a Batch,
Praecis discovers concealed damage to the Product or that the Product fails to
conform to the Specifications, which event was not previously or otherwise
detectable in previous Praecis quality checks performed on a said Batch of
Product, or where the Product was in-transit to its destination for a period
that extended beyond 30 days after the Oread Approval Date, and the concealed
damage or failure to meet the Specifications were not a consequence of an
in-transit incident or event, Praecis shall have the same remedies as are
enumerated in Section 6.5 of this Agreement for rejection of a Batch by Praecis
as if the discovery was made within the thirty (30) days defined in Section 6.5.
Except for situations that may cause for a Product recall as defined in Section
19 of this Agreement, Praecis will have no remedies available under this Section
6.6 after sixty (60) days after the applicable Oread Approval Date.
6.7 Sales and Use Taxes. Praecis shall be responsible for the payment of
any sales and use taxes on the Product delivered by Oread to Praecis.
6.8 Production Fees. The Production Fees and other agreed considerations
shall be fixed for the first Contract Year as listed in Schedule A of this
Agreement. Beginning the second Contract Year and for each Contract Year
thereafter, Oread may increase the Production Fees and the other agreed
considerations by up to the percentage increase indicated in the Producer Price
Index ("PPI") published by the United States Department of Labor, Bureau of
Labor Statistics, from the first day to the last day of the preceding Contract
Year. If the PPI is not available for that period, the most similar available
index shall be used.
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7. QUALITY CONTROL
7.1 Responsibility. Oread shall be responsible for manufacture,
processing, packaging, holding and release testing of the Products in compliance
with the Specifications. Praecis shall be responsible for compliance of the
active ingredients and packaging and labeling components in accordance with FDA
and other regulatory requirements. Oread shall be responsible for storage and
testing of stability and retention samples. Each party will provide reasonable
assistance to the other if necessary to respond to FDA audits, inspections,
inquiries or requests concerning the Products.
7.2 Compliance. Oread shall comply with the quality assurance
methodologies set forth for the Master Batch Records, cGMPs, and Oread's
standard operating procedures relating to quality assurance in its manufacturing
operations.
8. INSPECTION AND AUDITING RIGHTS
8.1 Processing and Packaging. Oread shall permit Praecis or its
representatives (including representatives of any licensee or sublicensiee of
Praecis to observe and consult with Oread during the Processing and Packaging,
including the quality control testing and analysis of the Product.
8.2 Inspections and Audits. Oread shall permit Praecis or its authorized
representatives to enter the Facility upon reasonable notice and at reasonable
intervals to inspect and audit all equipment, facilities, operations, procedures
and records including records relating to quality assurance and regulatory
compliance as they pertain to the Product or to the system support used to
manufacture the Product, and to audit and certify Oread's laboratory where
quality control testing of the Product is conducted under this Agreement.
Praecis (or any licensee or sublicensee of Praecis) may carry out one general
GMP audit of Oread operations in any 12 month period without any additional
fees. Attendance on-site by Praecis (or any licensee or sublicensee of Praecis)
during a pre-approval inspection by Regulatory Authorities will incur no
additional fees. Audits necessitated by reasons caused by Oread will also be
permitted at no charge to Praecis. General audits of frequency greater than one
per year, or audits initiated by Praecis (or any licensee or sublicensee of
Praecis) that are not problem specific to Oread's conformance to the
requirements of this Agreement, will incur a fee covering the time Oread
employees or contractors spend supporting the audit charged at Oread's customary
hourly billing rates for the employees or contractors involved.
8.3 Non-Compliance. Should Praecis discover that Oread's methods and
procedures for Processing and/or Packaging are not in compliance with the Master
Batch Record, cGMPs, or any of the requirements of this Agreement, Oread agrees
immediately to correct, at Oread's expense, any such deficiencies.
9. TESTING AND INSPECTION OF PRODUCT
9.1 Batch Records. Oread shall endeavor in good faith to have the Oread's
Approval Date for a Batch occur within Thirty (30) days following manufacture of
such Batch. The Batch Record shall reflect and incorporate all aspects of the
Master Batch Record and shall include the applicable Certificates of Analysis
and any MD Reports issued during such Batch.
9.2 Independent Testing. If prior to Praecis's approval of the Batch
Record, the parties disagree concerning whether the Product meets Specifications
or whether the Batch Records are complete, either party may request, in writing,
at any time, that an independent laboratory be used to determine whether the
Product meets Specifications. Thereafter, the parties shall promptly name a
reputable independent laboratory (the "Laboratory") to test the Product for
compliance with the
17
Specifications. Pending a decision by the Laboratory, Oread shall store the
Product in accordance with Section 6.2. If the Laboratory determines that the
Product meets Specifications and the Batch Records are complete, Praecis shall
(a) pay to Oread the amount invoiced for such Product pursuant to Section 6.4,
(b) pay to the Laboratory the amount of the fees charged by the Laboratory for
such testing, (c) pay to Oread the amount invoiced, if any, for storage of the
Product, and (d) provide Oread with instructions for the shipment of the Product
to Praecis. If the Laboratory determines that the Product does not meet
Specifications or that the Batch Records are not complete, (i) Oread shall (a)
pay to Praecis the then-current cost to Praecis of the Intermediate used to
Process such Product, (b) pay to the Laboratory the amount of the fees charged
by the Laboratory for such testing, (c) pay to Praecis any amount paid by
Praecis to Oread, if any, for storage of the Product, and (d) dispose of the
non-conforming Product, at Oread's sole cost and expense, in accordance with
Praecis's instructions, and (ii) if Praecis so elects, Oread shall, to the
extent feasible, at its sole cost and expense, rework the Batch, and correct the
Batch Records, so that the Product conforms to the Specifications and the Batch
Records are complete.
9.3 Failure to Meet Specifications due to Oread. If without resorting to
the independent testing described in Section 9.2, the parties agree that any
Product does not conform to the Specifications due to the fault of Oread or
failure of Oread to comply with any of its obligations under this Agreement, (a)
Oread shall pay Praecis: (i) the then-current cost to Praecis of the
Intermediate used to Process such Product; (ii) any amount paid by Praecis to
Oread for storage of the Product, and (iii) the Production Fee if previously
paid by Praecis for such Product and (iv) if Praecis so elects, Oread shall, to
the extent feasible, at Oread's sole cost and expense, rework the Batch, and
correct the Batch Records, so that the Product conforms to the Specifications
and the Batch Records are complete. To the extent such reworking and correction
is not feasible. Oread shall re-initiate manufacturing pursuant to this
Agreement, of substitute Product conforming to the Specifications as soon as
reasonably possible following receipt of the Intermediate but in no event later
than thirty (30) days following the date of the receipt by Oread of
Intermediate, or, if Oread is unable to obtain all required Raw Materials,
Components, and Containers from suppliers, the commencement of such thirty (30)
day time period shall be extended for such time period as is necessary for Oread
to obtain the same. Praecis shall pay to Oread a Production Fee for such
replacement Product in accordance with Section 6.4. Such non-conforming Product
shall be disposed of at Oread's sole cost and expense, in accordance with
Praecis's instructions. In addition, Oread shall have the right to suspend the
Processing for any Work in Process if Oread reasonably believes that such Work
in Process will not meet Specifications; provided, however, that, Oread shall
reimburse Praecis for one hundred percent (100%) of the then-current cost of the
Intermediate in such Work in Process.
9.4 Retained samples. Oread shall retain for at least one (1) year after
the expiration date of the applicable Batch a retain file sample, properly
stored from such Batch Processed or Packaged sufficient to perform each quality
control test specified in the Specifications at least two times in all other
respects in accordance with cGMPs. At the expiration of such one-year period,
Oread shall promptly return such file samples to Praecis.
9.5 Long-term Stability Studies. Oread will retain sufficient samples of
the finished Product to conduct long term stability studies. These samples will
be stored and tested in accordance with the protocol established for such
studies and agreed to in writing by Praecis and Oread. A copy of such protocol
is attached as Schedule D.
9.6 Outside Laboratory. Oread will not have analytical tests performed on
the Product by an outside laboratory until such outside laboratory has been
audited by Oread and/or Praecis [or if Praecis so elects, its licensee(s) or
sublicensee(s)] and approved in writing by Praecis, and such approval may be
withdrawn by Praecis at any time. If Praecis withdraws its approval of such
outside laboratory, Oread may suspend performance under this Agreement until
such time as Praecis has authorized another outside laboratory to perform such
analytical tests. Sample quantities, locations
18
and replicate test numbers to be taken for Work in Process and release testing
of the Product will conform with procedures specified in the Master Batch
Record.
9.7 Deviations and Defects. Oread shall notify Praecis promptly in the
event of any procedural deviation from the Master Batch Record or test failure
noted in the Raw Materials, Components, Processing or Packaging. Unless
otherwise obligated by law or impractical due to requiring an immediate
response, such as a spill, Oread shall consult with Praecis before taking action
in connection with these events. Oread shall, at its sole expense, identify and
correct any Product defects that are caused solely by Oread's failure to perform
its responsibilities under this Agreement. During the term of this Agreement and
for a period of three (3) years following the Oread's Approval Date of each
Batch, Oread shall notify Praecis in writing in the event Oread discovers or has
reason to believe there are any cGMP violations by Oread or any vendor that
might have impacted the Product or if there are any defects in the Batch
Records.
10. INVENTORY AND YIELD
10.1 Intermediate Accountability Reports. Within fifteen (15) days after
the end of each Contract Quarter, Oread shall provide Praecis with a report
showing for such Contract Quarter the following information: (a) the amount of
Intermediate received each month; (b) the amount of Intermediate lost or
destroyed prior to Processing; (c) the amount of Intermediate issued to
production and to quality assurance for testing and retain samples; (d) the
amount of Intermediate held in inventory at the end of the Contract Quarter. If
more than two (2) percent (2%) of the amount of Intermediate received during a
Contract Quarter is lost or destroyed or otherwise unaccounted for, Oread shall
reimburse Praecis for one hundred percent (100%) of the then-current cost of the
Intermediate that has been lost, destroyed, or unaccounted for, subject to the
limit set forth in Section 4.8.
10.2 Practical Yield. The Production Fee is based upon a guaranteed yield of
vials of Product per Batch (the "Guaranteed Yield"). Within ten (10) days after
the end of each Contract Quarter, Oread shall provide Praecis with a report
showing the actual yield of Product produced from each Batch accepted by Praecis
during such Contract Quarter (the "Yield"). If the average yield for all such
Batches (the "Average Yield") is less than the Guaranteed Yield, Oread shall
credit Praecis with an amount equal to the product of (a) the Production Fee per
vial multiplied by 2 (two) multiplied by (b) the difference between the
Guaranteed Yield and the Average Yield multiplied by (c) the number of Batches
accepted by Praecis during such Contract Quarter. At the end of each Contract
Year, Oread and Praecis shall review the average Yield for all Batches accepted
by Praecis during such Contract Year. If such average Yield has been
consistently greater or less than the Guaranteed Yield during the course of such
Contract Year, the Guaranteed Yield may be revised by mutual agreement in
writing. The Guaranteed Yield for the first Contract Year shall be based on the
actual yield of acceptable vials filled during the Processing of the lots
designated as the "commercial validation" lots and the first ten lots of Product
filled after the completion of commercial validation, adjusted by a mutually
agreed loss factor for anticipated "typical commercial scale production losses".
In addition, the Guaranteed Yield may be revised by mutual agreement in writing
whenever significant changes are made to the production process. Oread shall
endeavor in good faith to achieve the highest practical yield on all Batches
11. REGULATORY COMPLIANCE AND RELATED MATTERS
11.1 NDA. Praecis shall be responsible for obtaining all FDA approvals
relating to registration of the Product, shall pay any applicable user fee for
such registration, and shall own the NDA. Praecis shall have similar
responsibilities for obtaining all foreign registrations and approvals to market
the Product in all countries outside of the US.
19
11.2 Submissions to Regulatory Authorities. If Praecis is required to
submit to the Regulatory Authorities any information concerning the Processing,
Packaging, and marketing of the Product, Oread will provide to Praecis copies of
such documentation, data, and other information with respect to Processing,
Packaging, and the Facility as shall be necessary for such submission to the
Regulatory Authorities. Oread shall also make available its cooperation and
consultation if reasonably requested by Praecis and/or required by the
Regulatory Authorities for development of additional data or performance of
studies concerning the Product, and Praecis shall pay Oread's reasonable costs
therefor. Oread shall also provide, if required by the Regulatory Authorities,
information concerning its production processes and quality control procedures
with respect to the Product. Oread shall provide to Praecis all documentation,
data, and information referred to in this Section reasonably in advance of their
required submission to allow for Praecis's review and comments. Oread shall
endeavor in good faith to satisfactorily resolve all Praecis comments prior to
submission if such submission is to be made by Praecis Or its licensee(s) or
sublicensee(s).
11.3 Inspections. Oread shall allow representatives of Regulatory
Authorities to inspect and audit its Facility with respect to the Product and
any Components thereof and shall notify Praecis immediately of any impending
inspection or audit and no later than eight (8) hours following the arrival at
the facility of any inspector or auditor of a Regulatory Authority that may
involve the Product or any Components thereof. Praecis shall have the option of
having its representatives [and/or representatives of its licensee (s) or
sublicensee(s)] present, on-site, during any such inspection or audit by any
Regulatory Authorities and may only with Oread's express consent attend meetings
with such Regulatory Authorities to discuss the results of such inspection or
audit. Oread shall in its sole discretion refuse to allow Praecis be present or
in attendance at any such meetings.Oread shall notify Praecis in writing of the
results of such inspection or audit, immediately after such inspection or audit
has occurred, including without limitation providing to Praecis copies of any
resulting document of action (e.g., FDA Form 483 inspection observation report,
regulatory letters, etc.) resulting therefrom to the extent relevant to the
Product within three (3) days of their receipt. If any Regulatory Authority
determines that Oread is not in compliance with any applicable laws, rules,
regulations, or requirements, Oread shall promptly inform Praecis of its plans
to come into compliance with such laws, rules, regulations and requirements, to
the extent the Product is or may be affected, and shall continue to keep Praecis
informed of its progress until compliance has been attained.
11.4 Communications. If Oread submits documentation to the Regulatory
Authorities or otherwise communicates with Regulatory Authorities (including
without limitation one or more responses to the FDA under Section 11.3), which
communications relate to the Product or that could affect the Product, Praecis
or its representatives including representatives of Praecis' licesnsee(s) or
sublicensee(s) may review and comment on all such regulatory filings and other
communications prior to their submission, provided Oread shall have sole control
over the contents of such filings and communications. Oread shall advise Praecis
in advance of any planned changes to any regulatory filings or documents which
relate to the Product or that could affect the Product, and shall notify Praecis
immediately of any adverse finding by any Regulatory Authority that relates
directly to the Product or that could affect the Product.
11.5 Modifications to Equipment and Facility. Oread shall notify Praecis
of any significant modifications to parts of the Facility used for Processing,
Packaging or storage to the extent such modifications impact or could reasonably
be expected to impact the Product . Oread shall not implement any material
changes relating to the Product (including modifications to equipment) without
obtaining Praecis's prior written approval which approval shall not be
unreasonably withheld. A material change is defined as any change that (a)
impacts the regulatory commitments made to Regulatory Authorities for the
Product; (b) may require re-validation; (c) may affect the quality, purity,
identity or strength of the in-process or finished Product; or (d) could
reasonably be expected to result in changing or modifying the Praecis or Oread
Specifications, test methods, sampling procedures, standard operating
procedures, or the Master Batch Record with respect to the Product. The parties
to this Agreement shall agree in advance which party will pay for any expenses
20
associated with any modifications and material changes made or proposed to be
made under this provision of the Agreement.
11.6 Responsibility for Compliance. Praecis shall be responsible for and
ensure the compliance of the Intermediate, and the Master Batch Record,
including Specifications and Labeling, with the requirements of applicable
Regulatory Authorities; provided, however, that the foregoing shall not limit
Oread's obligations hereunder. Oread shall comply with all applicable laws and
regulations, rules, ordinances, injunctions, orders and decrees, and shall
maintain in effect all required governmental permits, licenses, orders,
applications (including without limitation approvals with respect to the
Facility) and approvals regarding the Product and the use of its Facility to
Process, Package and store the Product, and Oread shall Process, Package and
store the Product in accordance with all such permits, licenses, orders,
applications and approvals.
11.7 Drug Experience Reports. Oread shall give Praecis prompt written
notice of any information Oread receives regarding the safety of the Product,
including any confirmed or unconfirmed information on adverse, serious or
unexpected events associated with the use of the Product. For serious,
unexpected events, immediate telephonic notice must be given by Oread to
Praecis, and written notice must be given by Oread to Praecis within three (3)
business days, after receipt of the information. For all other such information,
written notice must be given by Oread within fifteen (15) business days after
receipt of the information. Praecis shall send Oread copies of all priority
submissions and periodic reports relating to the Product sent to the FDA within
five (5) business days of the submission to the FDA. All responsibility and cost
for filing any reports with the regulatory authorities concerning such reactions
(including Drug Experience Reports) caused by Product manufactured for Praecis
shall be borne by Praecis. Praecis will be responsible at its cost for handling
Product complaints. Oread will provide assistance in responding to any
complaints including reviews of retained samples and Batch Records as well as
testing of Products engendering a complaint and retained samples if required.
The costs of such testing shall be borne by Praecis. However, if it is
determined that the Product complaint was directly or indirectly caused by
Oread's failure to Process and Package in accordance with the Master Batch
Record or if the Product complaint is related to the Product's failure to
conform to any of the Specifications at the time of the Oread Approval Date,
Oread shall reimburse Praecis for the reasonable actual costs of such testing.
12. HEALTH AND SAFETY
12.1 Health and Safety Procedures. Oread shall adhere to its internal
health and safety procedures for Processing and Packaging and the handling of
the Raw Materials, Intermediate, Hazardous Waste, Non-Hazardous Waste,
Components, and Product. Such procedures shall comply with all applicable
federal, state and local laws and regulations (including without limitation
federal, state and local health and safety laws and regulations).
12.2 MSDS. Oread shall comply with the procedures set forth in the MSDS
associated with the Intermediate and the Product and fully comply with each
MSDS. If either MSDS is amended, Praecis shall promptly provide Oread with all
such amendments. Oread shall, within thirty (30) days of receipt of such
amendment, notify Praecis in writing whether and the extent to which its
production costs for the Product will increase or decrease as a result of such
amendment. Any increase or decrease in Oread's production costs shall be
supported by documentation in form and content reasonably satisfactory to
Praecis. The Batch Production Fee will be increased or decreased, as of the date
such amendment impacted or impacts production costs, by the amount of such
additional or reduced production costs, and the related Schedules will be
amended accordingly.
12.3 Training. Oread shall educate and train all affected employees and
contractors about the potential hazards associated with the handling of the
Intermediate, Raw Materials, Hazardous Waste, and Non-Hazardous Waste and the
Processing, Packaging, analyzing, and handling of the Product, and on the proper
use of engineering controls, process equipment and personal protective
21
equipment as referenced in the MSDS. Oread shall make the MSDS available to all
such employees and contractors. Oread shall maintain records of such training
for Praecis's review. The Master Batch Record shall specify procedures and
protections that are required in connection with Processing and Packaging.
Praecis shall have no responsibility for or liability with respect to educating,
training, or ensuring knowledge of any Oread employees and contractors about the
potential hazards associated with the handling of the Intermediate, Raw
Materials and Hazardous Waste or Non-Hazardous Waste and the analyzing,
handling, Processing and Packaging of the Product, or on the proper use of
engineering controls, process equipment or personal protective equipment as
referenced in the MSDS, and Oread shall indemnify and hold Praecis harmless in
connection with Oread's actions or inactions regarding the foregoing.
12.4 Responsiveness. If Praecis personnel at the Facility observe any
employees of Oread acting in violation of the MSDS's, or the Master Batch
Record, Oread shall take such prompt action as Oread deems appropriate to
respond to such observations. Praecis shall document the observations in writing
and Oread shall document the response in writing.
13. MAINTENANCE OF RECORDS AND REPORTS
13.1 By Oread. For the longer of (i) five (5) years from the date of the
Oread Approval Date of a Batch or (ii) the time required by all applicable
rules, laws, and regulations (the "Retention Period"), Oread shall keep and
maintain records sufficient to substantiate and verify its duties and
obligations relating to Processing and Packaging in respect of such Batch
including Batch Records, records of Purchase Orders received, certificates of
analysis from vendors for products received, Intermediate furnished, Product
Processed and Packaged, Work in Process, Intermediate and Product analyses, and
file samples. Oread shall also retain for the Retention Period any records
relating to regulatory compliance, environmental, health or safety and quality
assurance and quality control of the Product. Oread shall make all such records
available for inspection by Praecis or its representatives including
representatives of Praecis' licensee(s) or sublicensee(s) during the term hereof
and the Retention Period thereafter, and shall allow Praecis to copy such
records as Praecis and its licensee(s) and sublicensee(s) may designate. At the
end of such Retention Period, Oread will return to Praecis the Batch Records.
13.2 By Praecis. Praecis shall maintain such documentation relating to the
sale and distribution of the Product as is required by all applicable rules,
laws, and regulations.
14. REVISIONS TO MASTER BATCH RECORD OR SPECIFICATIONS
14.1 Master Batch Record. Any proposed change to the Master Batch Record
must be approved by both parties through the issuance and acceptance of a PCR.
No revisions to the Specifications that would affect the manufacture of the
Product shall be submitted to Regulatory Authorities unless approved in advance
by both parties in writing.
14.2 Difference in Cost. Praecis shall notify Oread in writing of any
proposed revisions to the Master Batch Record, or the Specifications, and Oread
shall, within thirty (30) days of receipt of such notice, notify Praecis in
writing whether and the extent to which its production costs for the Product
will increase or decrease as a result of such revision. Any increase or decrease
in Oread's production costs shall be supported by documentation in form and
content reasonably satisfactory to Praecis. If Praecis elects to adopt the
revision, the Batch Production Fee will be increased or decreased by the amount
of such additional or reduced production costs, and the related Schedules will
be amended accordingly.
14.3 Oread Unable to Comply. If Oread determines it is technically unable
to comply with a proposed revision of the Master Batch Record, or the
Specifications or Praecis is unwilling to accept any increase in the Batch
Production Fee arising therefrom, Praecis may choose in its sole
22
discretion to either withdraw the proposed revision or terminate the Agreement
in accordance with Section 22.2.
15. TRADEMARKS AND LABELING
15.1 Use of Praecis Trademarks. The Labeling shall bear one or more
Praecis trademarks. Nothing contained herein shall give Oread any right to use
any Praecis trademark except to the extent that Oread is responsible for
affixing the Labeling on the Product, and Oread shall not obtain any right,
title or interest in any Praecis trademark by virtue of this Agreement or its
performance of services hereunder.
15.2 Reference to Oread. The Labeling shall contain the notation
"Manufactured by Oread for Praecis Pharmaceuticals, Inc.", or such similar
notation as may be agreed by the parties. Oread shall not affix to the Product
any label, stamp or other xxxx identifying Oread as the source of the Product
except as provided in this Section or as mutually agreed to in writing or as may
be required by applicable law or regulations.
16. WASTE HANDLING AND DISPOSAL
16.1 Waste Handling by Oread. Oread shall handle, package, label, store,
and coordinate transportation of all Hazardous Waste and Non-Hazardous Waste in
accordance with all applicable federal, state, and local laws and regulations.
Oread shall deliver the Hazardous Waste to a waste contractor for transport and
disposal (the "Waste Contractor"). Oread shall, at its sole cost and expense
dispose of all Non-Hazardous Waste in accordance with all applicable federal,
state, and local laws and regulations.
16.2 Waste Contractor. The Waste Contractor shall be a contractor who is
appropriately licensed to transport and dispose of the Hazardous Waste. Praecis
shall pay for the Waste Contractor's costs for transportation and disposal of
the Hazardous Waste. Hazardous Waste generated from activities performed
pursuant to this Agreement shall be collected and held seperately, and shall be
manifested seperately from all other wastes generated by Oread.
16.3 Audit Rights. Praecis retains the right to and at Praecis' election,
to have its licensee(s) or sublicensee(s) inspect Oread's waste handling,
packaging, storing, transportation and disposal activities, and any and all
records pertaining thereto, and shall have the right to make copies thereof.
Oread shall maintain copies of the Uniform Waste Manifest and certificates of
destruction, if any, from the approved incineration facility on file for
inspection by Praecis. Oread will inform Praecis promptly of any environmental
or regulatory issues that it becomes aware of that could jeopardize Oread's
ability to produce the Product pursuant to this Agreement.
17. TITLE
Title to all equipment provided by Praecis all Intermediate, all Work in
Process, and all Product shall at all times remain in Praecis (collectively, the
"Praecis Property") and Oread shall clearly identify all such equipment
containers containing all Intermediate and Product as being owned by Praecis.
Except for Work in Process, Praecis may at its sole discretion for any reason
notify Oread that it wishes to take possession of the Praecis Property and Oread
shall permit Praecis or its representatives to do so during regular business
hours and upon reasonable advance notice. Oread shall acquire no right, title or
interest of any kind in or to any Praecis Property. Except with Praecis's prior
written consent, the Praecis Property may be used by Oread only to satisfy its
obligations under the Agreement. Oread shall not take or permit any action
inconsistent with Praecis's ownership interest in the Praecis Property including
but not limited to the imposition of any lien or other encumbrance thereon, the
conveyance of any interest therein, or any use thereof, except as authorized by
the terms of this Agreement. If Oread fails to keep Praecis's title free and
clear of
23
all liens, encumbrances and interests, without limitation of any other rights or
remedies of Praecis, Oread shall pay all costs associated with securing the
release of any such liens, encumbrances and interests on the Praecis Property.
18. WARRANTIES AND REPRESENTATIONS
18.1 Oread's Warranties. Oread hereby represents, warrants, and covenants
as follows:
(a) The Product shall be Processed and Packaged in accordance with
the Master Batch Record, and with any applicable regulations of the Regulatory
Authorities and cGMPs, and that, as of the Praecis Approval Date, the Product
shall conform with the Specifications.
(b) Oread shall comply in all respects with any law, regulation,
ordinance, order, injunction, decree or governmental requirement applicable to
the manufacture of the Product, the handling and storage of the Intermediate,
the handling of the Hazardous Waste prior to pick-up by the Waste Contractor,
and the handling and disposal of the Non-Hazardous Waste.
(c) Oread shall maintain in effect all required governmental
permits, licenses, orders, applications and approvals necessary for the
Processing and Packaging, and Oread shall Process and Package in accordance with
all such permits, licenses, orders, applications and approvals.
(d) The Process as set forth in the Master Batch Record does not
infringe on any known patent.
18.2 Praecis's Warranties. Praecis hereby represents and warrants as
follows:
(a) The Intermediate shall, at the time it is shipped to Oread,
(i) not be adulterated or misbranded within the meaning of the
Federal Food Drug and Cosmetic Act ("FFDCA") or within the meaning of any
applicable state or municipal law in which the definitions of adulteration and
misbranding are substantially the same as those contained in the FFDCA;
(ii) not be articles that may not, under Section 505 of the
FFDCA or any other provision of the FFDCA or any other applicable law, statute
or regulation, be introduced into interstate commerce;
(iii) have been manufactured, processed, and packed in
compliance with all requirements under the FFDCA (including drug establishment
registration and applicable good manufacturing practice) or under any other
applicable laws, rules, or regulations of the United States or any other country
in which the Intermediate is manufactured or in which the Product or
Intermediate will be distributed by Praecis, and
(iv) conform to the identifications for the Intermediate set
forth in the Master Batch Record and conform to all regulatory release
Specifications as documented in the certificate of analysis included with each
delivery of Intermediate, confirming the identity, purity, and other physical
attributes of such Intermediate.
(b) Except to the extend assigned, licensed or sublicensed pursuant
to any agreement between Praecis and Syntheloabo or other licensing or
collaboration arrangement
24
between Praecis and a third party, Praecis owns all rights to the Praecis
trademark(s) used in the Labeling.
(c) The Labeling complies with all requirements of the Regulatory
Authorities.
18.3 Mutual Warranties. Each party represents and warrants to the other
that (i) the execution, delivery and performance by such party of this Agreement
has been duly authorized by all requisite corporate action on the part of such
party, (ii) this Agreement has been duly executed and delivered by such party
and constitutes the valid and binding agreement of such party, enforceable
against such party in accordance with its terms, and (iii) the execution,
delivery and performance by such party of this Agreement does not and will not
constitute a breach of , or conflict with, any agreement or instrument which is
binding on such party or its assets.
18.4 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS
AGREEMENT, PRAECIS AND OREAD MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF
ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING ANY EXPRESS OR IMPLIED WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
19. RECALLS
19.1 Responsibility. If any Product must be recalled by reason of failure
to meet any requirements of any Regulatory Authority or any other requirements
of law, Praecis shall have the sole responsibility to effect the recall. Oread
shall cooperate as reasonably required in Praecis's efforts in accordance with
Sections 19.2 and 19.3.
19.2 Praecis's Responsibility. If the failure to meet applicable legal
requirements resulting in a recall is not caused by the act or omission of
Oread, then Praecis shall reimburse Oread for any costs reasonably expended by
Oread to effect the recall. Praecis shall bear the cost of (a) any Intermediate
involved in such recall and (b) the Production Fee for any Product that is
recalled and (c) reimburse Oread on a time and materials basis not to exceed the
Production Fee, for any Work in Process, finished but non-approved Product, or
Product that cannot be shipped due to the condition requiring the recall,
provided that as of the date that the Processing and Packaging was suspended as
a result of the recall, such Work in Process had been Processed and Packaged in
accordance with the Master Batch Record, and the non-approved Product, and/or
Product conforms in all material respects to the Specifications and was
manufactured in accordance with the Processing and Packaging, quality assurance
and validation procedures set forth in the Specifications and with any
applicable regulations of any Regulatory Authorities, including cGMPs.
19.3 Oread's Responsibility. If the failure to meet applicable legal
requirements resulting in a recall is caused by the act or omission of Oread or
if the Product failed to conform as of the Oread Approval Date to any of the
Specifications resulting in a recall, Oread shall reimburse Praecis for (a) any
costs reasonably expended by Praecis to effect the recall, (b) any Production
Fees and shipping fees paid to Oread by Praecis for recalled Product and for any
Product that cannot be shipped due to the condition requiring the recall, and
(c) one hundred percent (100%) of Praecis's cost of the Intermediate contained
in recalled Product (to the extent such Intermediate cannot be reworked) and in
any Product that cannot be shipped due to the condition requiring the recall.
20. FORCE MAJEURE
20.1 Excusing Performance. Neither party hereto shall be liable in damages
for, nor shall this Agreement be terminable or cancelable by reason of, any
delay or default in such party's performance hereunder if such delay or default
is caused by events beyond such party's reasonable control including, but not
limited to, acts of God, regulation or law or other action of any
25
government, war or insurrection, civil commotion, destruction of production
facilities or materials by earthquake, fire, flood, or storm, labor
disturbances, epidemic, or failure of suppliers, public utilities or common
carriers; provided, however, that nothing contained herein shall relieve either
party from the obligation to promptly pay in full all payments that may be due
to the other party under this Agreement.
20.2 Resumption. Each party shall employ all reasonable efforts, at its
cost, toward resumption of its performance hereunder if such performance is
delayed or interrupted by reason of force majeure.
21. INDEMNIFICATION
21.1 Praecis's Indemnification. Praecis shall defend, indemnify, and hold
harmless Oread, its officers, agents, employees and Affiliates from any loss,
claim, action, damage, expense or liability (including defense costs and
attorneys' fees) ("Claim") arising out of or related to (a) any injury to
Praecis employees while at the Facility; or (b) the breach of any
representation, warranty or obligation made by Praecis herein; or (c) the
handling, possession, use, or sale of the Product following delivery to a common
carrier pursuant to Section 6.1; (d) the transportation, recycling or disposal
of any Hazardous Waste after delivery to a Waste Contractor pursuant to this
Agreement; (e) patent infringement of a third party's patent by the Process as
set forth in the Master Batch Record; (f) work done by other contractors or any
employee of Praecis relating to the Product and not under the direct control of
or within the responsibilities of Oread as specified in this Agreement; or (g)
infringement of a trademark owned by a third party caused by the Labeling;
except to the extent any such Claim set forth herein is based on, arises out of,
is engendered by or is due to (x) Oread's failure to comply with the terms of
Section 16, (y) Oread's breach of any of its representations, warranties, or
obligations contained in this Agreement, or (z) the negligence or willful
misconduct of Oread or its Affiliates, officers, agents, or employees.
21.2 Oread's Indemnification. Oread shall defend, indemnify, and hold
harmless Praecis, its officers, agents, employees and Affiliates from any Claim
arising out of or relating to (a) the breach of any representation, warranty or
obligation of Oread herein; (b) liabilities associated with the environmental
contamination of the Facility and other locations except to the extent Praecis
is obligated to indemnify Oread under Section 21.1; (c) the handling or disposal
of the Non-Hazardous Waste; (d) handling or disposal of the Hazardous Waste
prior to delivery to a Waste Contractor pursuant to this Agreement; or (e)
negligence or willful misconduct of Oread or its officers, agents or employees,
including but not limited to any injury to Oread employees due to the failure to
follow the procedures set forth in the MSDS's; except to the extent any such
Claim set forth herein is based on, arises out of, is engendered by or due to
(x) Praecis's breach of any of its representations, warranties or obligations
contained in this Agreement or (y) the negligence or willful misconduct of
Praecis or its Affiliates, officers, agents or employees.
21.3 Procedures. Provided that prompt notice is given of any Claim by a
third party, the indemnifying party promptly will defend, contest, or otherwise
protect against any such Claim at its own cost and expense. The indemnified
party may, but will not be obligated to, participate at its own expense in a
defense thereof by counsel of its own choosing, but the indemnifying party shall
be entitled to control the defense unless the indemnified party has relieved the
indemnifying party from liability with respect to the particular matter. Except
as otherwise set forth herein, the indemnified party shall not, except at its
own cost and expense, compromise or settle, or seek to compromise or settle, any
such third party Claim. If the indemnifying party fails to timely defend,
contest, or otherwise protect against any such third party such Claim, the
indemnified party may, but will not be obligated to, defend, contest, or
otherwise protect against the same, and make any compromise or settlement
thereof. and recover the entire costs thereof from the indemnifying party,
including reasonable attorneys' fees, disbursements, and all amounts paid as a
result of such Claim or the compromise or settlement thereof. The indemnified
party shall cooperate and provide such assistance
26
as the indemnifying party may reasonably request in connection with the defense
of the matter subject to indemnification.
21.4 Insurance. Praecis and Oread each hereby represent to the other that
it is sufficiently insured against any liability arising under this Agreement.
22. TERM AND TERMINATION
22.1 Term. The initial term of this Agreement shall be for five (5) years
and shall commence as of the Effective Date. At the end of the initial period
this Agreement will be automatically renewed and shall continue in effect until
terminated by either party in accordance with this Section 22.
22.2 Termination. Each party shall have the right to terminate this
Agreement, as follows:
(a) by either party without cause, effective fifteen (15) months after
written notice of such termination is given; provided, however, that in no event
shall this Agreement be terminated by Oread until the earlier of (i) the date
that an alternate manufacturing site chosen by Praecis is approved by the FDA
for manufacturing of the Product or (ii) twenty four (24) months from the date
of such written notice of termination, or
(b) by either party effective immediately upon written notice if the other
party is in material breach or default with respect to any term or provision
hereof and fails to cure the same within forty-five (45) days after notice of
said breach or default is given to the other party; or
(c) by Praecis upon immediate written notice to Oread if Praecis
determines the Process as set forth in the Master Batch Record may infringe the
patent of another party; or
(d) by Praecis upon immediate written notification if Oread is unable to
meet the Manufacturing Schedule and continues to be unable to meet the
Manufacturing Schedule for an additional 90 days after receiving an initial
notice from Praecis of its intent to terminate this Agreement pursuant to this
Section 22.2 (d), in which case Oread will reasonably cooperate with the
transfer of manufacturing the Product to an alternate manufacturing site
nominated by Praecis.
(e) In the event that either party terminates this Agreement under
sub-section (a) of this Section 22.2, the terminating party will reimburse the
other party for all commercially reasonable costs that the other party incurs in
accomodating the request to terminate.
(f) In the event this Agreement is terminated by Praecis under subsections
(b) or (d) of this Section 22.2, and such termination arises from Oread's
failure to supply Product as described in Section 5.9, then without limitation
of any other right or remedy of Praecis, Praecis shall have all of the rights,
and Oread shall have the obligations, set forth in such Section 5.9.
22.3 Bankruptcy or Insolvency: Either party shall have the right to
terminate this agreement effective upon written notice to the other party in the
event: (a) the non-notifying party becomes insolvent or makes an assignment for
the benefit of creditors; (b) a receiver is assigned to the non-notifying party;
or ( c ) bankruptcy proceedings are instituted against the non-notifying party
or on the non-notifying party's behalf.
22.4 Inventory. Upon termination of this Agreement, Oread shall furnish to
Praecis a complete inventory of all stock on hand of (i) the Intermediate, (ii)
Work in Process, (iii) finished Product, and (iv) all Praecis equipment, and all
Components, Containers and Labeling.
27
22.5 Product and Work in Process. Upon termination of this Agreement,
Product manufactured pursuant to Purchase Orders from Praecis delivered to Oread
prior to the effective date of such termination shall be delivered by Oread to
Praecis and paid for in accordance with such Purchase Orders. If the termination
is by Oread due to a breach of this Agreement by Praecis or by Praecis pursuant
to Section 22.2(a), Praecis shall pay Oread for Work in Process as of the
effective date of such termination on a time and materials basis to be agreed
upon between the parties; provided, however, that Oread can reasonably
demonstrate that the Work in Process has been Processed in accordance with the
Master Batch Record up to the effective date of such termination, and provided,
further, that such payment shall not exceed the Batch Production Fee applicable
to such Work in Process. If the termination is by Praecis due to a breach of
this Agreement by Oread or by Oread pursuant to Section 22.1, Praecis may elect
to cancel any Work in Process as of the effective date of such termination and
owe no money for such Work in Process or may require Oread to complete the Work
in Process and upon the Oread Approval Date, pay Oread the Batch Production Fee
in accordance with Article 6.
22.6 Intermediate and Other Materials. Upon termination of this Agreement,
(i) Intermediate, Raw Materials, Components, Containers, and Labeling not
necessary to complete Work in Process as of the effective date of such
termination shall, at Praecis's option, either be disposed of by Oread in
accordance with Article 16 or returned to Praecis at Praecis's expense (except
in the case of termination by Praecis pursuant to Section 22.2(b) or 22.3 or by
Oread pursuant to Section 22.1, in which event Oread shall bear such expense) in
accordance with Praecis's instructions and (ii) unless such termination is by
Praecis pursuant to Section 22.2(b) or 22.3 or by Oread pursuant to Section
22.1, Praecis shall reimburse Oread for Oread's actual cost of such Raw
Materials, Components, Containers, and Labeling provided that Oread reasonably
purchased the same in accordance with the Three Month Forecast and only to the
extent that such Raw Materials, Components, Containers, and Labeling cannot be
used by Oread in the production of any other products.
22.7 Equipment. Upon termination of this Agreement, Praecis (except when
breached by Oread) shall pay all costs of disassembling, removing, and shipping
(including insurance) all equipment belonging to Praecis, all of which work
shall be done in accordance with Praecis's instructions.
22.8 Liability. The termination of this Agreement shall not operate to
release any party from any liability incurred prior to or upon termination
hereof.
23. CONFIDENTIALITY
Each party and its affiliates (the "Recipient") shall treat as confidential all
information provided to such party or its affiliates by the other party or its
Affiliates (the "Discloser") hereunder, including but not limited to information
relating to the Processing or Packaging. The Recipient shall not use such
information except for the express purposes contemplated by this Agreement and
shall not disclose such information to any individual or entity (except to such
of its employees and subcontractors who reasonably require same for the purposes
hereof and who are bound to the Recipient by like obligations as to
confidentiality and non-use) without the express written permission of the
Discloser. Notwithstanding the foregoing, the Recipient shall not be prevented
from using or disclosing any portion of such information: (a) that the Recipient
can demonstrate by its written records was known to it from a source other than
the Discloser prior to the disclosure hereunder; or (b) that is now, or becomes
in the future, public knowledge other than by breach of this Agreement by the
Recipient; or (c) that is lawfully obtained on a non-confidential basis by the
Recipient from a third party who is not obligated to retain such information in
confidence; or (d) that is independently developed by employees of the Recipient
or an Affiliate of the Recipient, which
28
employees were not privy to nor had access to such information and which is
developed without use in any way of the information received from the Discloser;
or (e) that the Recipient reasonably determines in good faith is required by
law, regulation, rule, act, orderor request of any governmental authority or
agency to be disclosed by the Recipient; provided, however, that in the case of
(e), the Recipient gives the Discloser sufficient advance written notice to
permit the Discloser to seek a protective order with respect to such information
(if a protective order could be granted with respect to the disclosure of such
information) and thereafter the Recipient discloses only the minimum information
required to be disclosed in order to comply. The obligations of each party under
this Section shall remain in full force and effect for ten (10) years following
termination or expiration of this Agreement.
24. INDEPENDENT CONTRACTOR
Oread shall act solely as an independent contractor and nothing in this
Agreement shall be construed to give either party the power or authority to
enter into or incur, any commitments, expenses or liabilities whatsoever on
behalf of the other party. Nothing herein shall be construed to create the
relationship of partnership, principal and agent, or joint venture between
Praecis and Oread.
25. PUBLIC STATEMENTS
Except as a party reasonably determines in good faith is required by law,
regulation, rule, act, order or request of any governmental authority or agency,
neither party shall use or refer to, without the other party's prior written
consent, the name of such other party in any public statements, whether oral or
written, including, but not limited to, shareholder reports, communications with
stock market analysts, press releases or other communications with the media, or
prospectuses; provided, however, that each party may disclose to any third party
the existence and subject matter of this Agreement; and provided further that
each party may make disclosure of the existence, subject matter and terms of
this Agreement to the extent such party reasonably determines in good faith that
such disclosure is necessary or appropriate in connection with any financing,
strategic transaction, acquisition or disposition involving such party.
26. NOTICES
Any notice required or permitted to be given hereunder shall be deemed
sufficient if sent by facsimile or overnight courier, or delivered by hand to
Oread or Praecis at the respective addresses and facsimile numbers set forth
below or at such other address and facsimile number as either party hereto may
designate. If sent by facsimile, , notice shall be deemed given when the
transmission is completed if the sender has a confirmed transmission report. If
a confirmed transmission report does not exist, then the notice will be deemed
given when the notice is actually received by the person to whom it is sent. If
delivered by overnight courier, notice shall be deemed given when it has been
signed for. If delivered by hand, notice shall be deemed given when received.
All correspondence to Oread shall be addressed as follows:
Oread, Inc.
0000 Xxxxxxxx Xxxxx,
Xxxxxxxxx, Xxxxxx 00000 - 1803
Attention: Corporate Counsel
Fax: 000-000-0000
and an additional copy to:
Oread Pharmaceutical Manufacturing,
0000X Xxxxxxxx Xxxxxx,
00
Xxxx Xxxx, XX 00000
Attention: Group VP, Pharmaceutical Manufacturing
Fax: 000-000-0000
All correspondence to Praecis shall be addressed as follows:
Praecis Pharmaceuticals Incorporated.
Xxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxx,
Xxxxxxxxxxxxx, XX 00000-0000
Attention: Vice President - Corporate Development
Fax: 617/000-0000
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
One Beacon Street, 31st Floor
Boston,
Massachusetts, MA 02108-3194
Attention: Xxxx X. Xxxx
Fax: 617/000-0000
27. ASSIGNMENT
Neither party may assign this Agreement nor any portion hereof nor
delegate its performance hereunder without the prior written consent of the
other party; provided, that without the consent of the other party, each party
may assign this Agreement to an Affiliate or to an acquiror of all or
substantially all of the assets of such party or that part of such business to
which this Agreement relates, whether pursuant to a merger, consolidation, stock
purchase, recapitalization, asset sale or otherwise, and Oread may assign this
Agreement to a purchaser of Oread's Facility or business provided, however, that
in any such case such party (or the successor entity in the case of a merger or
consolidation) shall remain liable for such party's obligations which have been
so assigned hereunder.
28. GOVERNING LAW
This Agreement shall be governed by and interpreted in accordance with the
laws of the State of New York (regardless of its or of any other jurisdiction's
choice of law principles). Each party hereby consents to the personal
jurisdiction of the state and federal courts sitting in New York.
29. ARBITRATION
Except for the right of either party to apply to a court of competent
jurisdiction for a temporary restraining order, or preliminary injunction to
preserve the status quo or prevent irreparable harm pending the selection of and
issuance of a final decision by the arbitors pursuant to this section 29 any
dispute arising under this Agreement or regarding any breach or termination
hereof, shall be exclusively resolved by final and binding arbitration in
accordance with the rules ("Rules") of the American Arbitration Association
("AAA") then in effect. Either party may initiate such an arbitration proceeding
by giving written notice to the other party. Judgment upon the award rendered by
the arbitrators may be entered in any court having jurisdiction thereof. In any
arbitration pursuant
30
to this Section 29, the award shall be rendered by a majority of the members of
a board of arbitration consisting of three members, one being appointed by each
party and the third, who shall be the chairman of the panel, being appointed by
mutual agreement of said two party-appointed arbitrators. In the event of
failure of said two arbitrators to agree within sixty (60) days after the
initiation of the arbitration proceeding upon the appointment of the third
arbitrator, the third arbitrator shall be appointed by the AAA in accordance
with the Rules In the event that either party shall fail to appoint an
arbitrator within thirty (30) days after the initiation (including by the other
party) of the arbitration proceeding, such arbitrator and the third arbitrator
shall be appointed by the AAA in accordance with the Rules. The place of
arbitration shall be New York, New York. The arbitrators shall apply the law of
the State of New York (regardless of its or any other jurisdiction's choice of
law principles. The losing party shall pay all costs and fees incurred as a
result of any arbitration
30. SURVIVAL OF TERMS
The provisions of Sections 9.5, 11.2, 11.3, 11.4, 11.7, 22.2(d), (e) and
(f), 22.3, 22.4, 22.5, 22.6, 22.7 and 22.8 Articles 13, 16, 17, 18, 19, 21, 23,
25, and 28, shall survive the termination or expiration of this Agreement.
31. ADDITIONAL TERMS
31.1 Entire Agreement. This Agreement constitutes the entire understanding
between the parties with respect to the subject matter hereof and supersedes and
replaces all previous negotiations, understandings, representations, writings,
and contract provisions and rights relating to the subject matter hereof. If
there is any conflict between this Agreement and the terms and conditions
contained on any Purchase Order or in any Schedule or Exhibit hereto, the terms
and conditions of this Agreement shall prevail.
31.2 Amendments: No Waiver. No provision of this Agreement may be amended,
revoked or waived except in writing signed and delivered by an authorized
officer of each party. No failure or delay on the part of either party in
exercising any right hereunder will operate as a waiver of, or impair, any such
right. No single or partial exercise of any such right will preclude any other
or further exercise thereof or the exercise of any other right. No waiver of any
such right will be deemed a waiver of any other right hereunder.
31.3 Validity. Should any part or provision of this Agreement be held
unenforceable or invalid, the invalid or unenforceable provision shall be
replaced with a provision which accomplishes, to the extent possible, the
original business purpose of such provision in a valid and enforceable manner,
and the remainder of this Agreement shall remain binding upon the parties.
31.4 Headings. The descriptive headings are inserted for convenience of
reference only and are not intended to be part of or to affect the meaning of or
interpretation of this Agreement.
31.5 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but which together shall constitute a
single agreement.
31
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first hereinabove written.
Oread Pharmaceutical Praecis Pharmaceuticals,
Manufacturing, Inc Incorporated.
By /s/ Xxxxxxx X. Xxxxxxxxx By /s/ Xxxx X. Silver
----------------------------- -------------------------------
Name Xxxxxxx X. Xxxxxxxxx Name Xxxx X. Silver
----------------------------- -------------------------------
Title Chief Operating Officer Title VP, Corporate Development
----------------------------- -------------------------------
Date Date
----------------------------- -------------------------------
Schedule A - Production Fees / Pricing
Schedule B - Proposal 0210-E339-OP, Revision #6, December 18th 1998
Schedule C - Master Batch Record
Schedule D - Long-term Stability Studies Protocol
32
Oread - Praecis Abarelix-Depot Powder Supply Agreement, January 1999
SCHEDULE A
Abarelix-Depot Powder Filling and Testing; Commercial Supplies Pricing
The fees for the commercial supplies of the Product, as defined under this
Agreement, will be finalized, in writing, by mutual agreement between the
parties based upon (w) the actual batch size of the commercial production lots
filed in the NDA for the Product, and (x) the fees proposed in Oread Proposal
No. 0210-E339-OP, (Revision #6, December 18th 1998), section 15.1.1 (b), signed
by Praecis on January 12th 1999 as summarized in the following table.
--------------------------------------------------------------------------------
** ** ** ** **
--------------------------------------------------------------------------------
** ** ** ** **
---------------------------------------------------------------
** ** ** **
---------------------------------------------------------------
** ** ** **
--------------------------------------------------------------------------------
** **
--------------------------------------------------------------------------------
The fees in the referenced Proposal were based upon several key assumptions with
respect to (y) the testing requirements for the Product, and (z) the operational
performance requirements of the filling equipment provided by Praecis. The
attached Schedule A-1 lists the assumed testing requirements, and Schedule A-2
lists the operational performance requirements for filling the Product into
vials, which went into the commercial supplies pricing calculations in the table
above. If any of the items listed in Schedule A-1 and A-2 materially change for
the eventual commercial lots contemplated in this Agreement, then Oread and
Praecis will negotiate in good faith a revised pricing schedule, which schedule
shall be in writing and agreed to by parties prior to proceeding with the work
required. For each % change in the per batch or per vial manufacturing fees
resulting from the negotiation referred to in the preceding sentence, Oread will
make a corresponding contrary % adjustment in the monthly suite maintenance
fees. An example worksheet of how such assumption changes would be documented is
attached in exhibit A-3.
Oread - Praecis Abarelix-Depot Powder Supply Agreement, January 1999
A-2. Manufacturing/Filling Process Assumptions
--------------------------------------------------------------------------------
Production Activity **
--------------------------------------------------------------------------------
Filling environment **
--------------------------------------------------------------------------------
Line set-up: **
--------------------------------------------------------------------------------
Line speed **
--------------------------------------------------------------------------------
Filling & vial wipe-down **
--------------------------------------------------------------------------------
Packaging for shipment **
--------------------------------------------------------------------------------
Line clean-up & **
wipe-down
--------------------------------------------------------------------------------
Components preparation **
--------------------------------------------------------------------------------
34
Oread - Praecis Abarelix-Depot Powder Supply Agreement, January 1999
A-3. Changes in manufacturing process assumptions and fees
---------------------------------------------------------------------------------------------------------------------
Proposal 0210-E339-OP, Production lot size ** ** **
Rev #6, Dec 18th 1998
---------------------------------------------------------------------------------------------------------------------
Expected yield ** ** **
----------------------------------------------------------------------
Price per Vial ** ** **
----------------------------------------------------------------------
Price per batch ** ** **
----------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Production ** ** **
Activity
---------------------------------------------------------------------------------------------------------------------
Filling ** ** ** ** **
environment
---------------------------------------------------------------------------------------------------------------------
Line set-up: ** ** ** ** **
---------------------------------------------------------------------------------------------------------------------
Line speed ** ** ** ** **
---------------------------------------------------------------------------------------------------------------------
Filling & vial ** ** ** ** **
wipe-down
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Packaging for ** ** ** ** **
shipment
---------------------------------------------------------------------------------------------------------------------
Line clean-up ** ** ** ** **
& wipe-down
---------------------------------------------------------------------------------------------------------------------
Components ** ** ** ** **
preparation
---------------------------------------------------------------------------------------------------------------------
Dissolution ** ** ** ** **
testing
---------------------------------------------------------------------------------------------------------------------
Sub-total Changes ** ** ** **
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
** ** ** **
---------------------------------------------------------------------------------------------------------------------
** ** ** **
---------------------------------------------------------------------------------------------------------------------
** ** ** **
---------------------------------------------------------------------------------------------------------------------
** ** ** **
---------------------------------------------------------------------------------------------------------------------
** ** ** **
---------------------------------------------------------------------------------------------------------------------
C. Recommendation
o Use mid-point of revised per batch pricing for the manufacturing fees for
the commercial validation runs. Additional testing and reports and
one-time validation related activities will be priced out separately.
o When three validation lots have been run, mutually agree where the first
year's targeted efficiency standards should be set based on the scenarios
above.
o At the end of year one, or earlier if agreed between the parties, revise
the commercial pricing based on final, reasonably sustainable, efficiency
standards within the assumptions and price ranges provided above.
36
