[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
EXHIBIT 10.1
SUPPLY AGREEMENT
by and between
NASTECH PHARMACEUTICAL COMPANY INC.
and
PROCTER & XXXXXX PHARMACEUTICALS, INC.
Effective as of June 1, 2006
[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
SUPPLY AGREEMENT
This Supply Agreement ("AGREEMENT"), is effective as of June 1, 2006 (the
"EFFECTIVE DATE"), by and between Nastech Pharmaceutical Company Inc., a company
organized and existing under the laws of the State of Delaware and having its
principal office at 0000 Xxxxx Xxxxx Xxxxxxx, Xxxxxxx, XX 00000 (hereinafter
referred to as "NASTECH"), and PROCTER & XXXXXX PHARMACEUTICALS, INC., a company
organized and existing under the laws of Ohio and having its principal office at
0000 Xxxxx Xxxxxxxxxx Xxxx, Xxxxx, XX 00000 (hereinafter referred to as "P&GP");
WITNESSETH:
WHEREAS, P&GP and NASTECH have entered into a PRODUCT DEVELOPMENT AND LICENSE
AGREEMENT effective as of January 27, 2006 (the "LICENSE AGREEMENT") relating to
a grant of a license from NASTECH to P&GP; and
WHEREAS, as part of the LICENSE AGREEMENT, P&GP desires to purchase, and NASTECH
desires to supply, P&GP's and its RELATED PARTIES' (as defined in the LICENSE
AGREEMENT) requirements of PRODUCT (as hereinafter defined) in the TERRITORY (as
hereinafter defined) pursuant to the terms set forth herein.
NOW, THEREFORE, in consideration of the covenants herein contained, the parties
hereto agree as follows:
1. DEFINITIONS
References to "Articles", "Sections" and "subsections" in this AGREEMENT
shall be to Articles, Sections and subsections respectively, of this
AGREEMENT unless otherwise specifically provided. Capitalized terms used
but not defined herein shall have the meanings set forth in the LICENSE
AGREEMENT. As used in this AGREEMENT the following terms, whether used in
the singular or the plural, shall have the meanings set forth in this
Article:
1.1 The term "AFFILIATE", shall mean (i) any corporation or business entity of
which fifty percent (50%) or more of the securities or other ownership
interests representing the equity, the voting stock or general partnership
interest are owned, controlled or held, directly or indirectly, by P&GP or
NASTECH; or (ii) any corporation or business entity which, directly or
indirectly, owns, controls or holds fifty percent (50%) (or the maximum
ownership interest permitted by law) or more of the securities or other
ownership interests representing the equity, the voting stock or, if
applicable, the general partnership interest, of P&GP or NASTECH; or (iii)
any corporation or business entity of which fifty percent (50%) or more of
the securities or other ownership interests representing the equity, the
voting stock or general partnership interest are owned, controlled or held,
directly or indirectly, by a corporation or business entity described in
(i) or (ii).
1
[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
1.2 The term "CALENDAR YEAR" means any period during the TERM commencing on
January 1 and ending on December 31.
1.3 The term "cGMP" shall mean all laws and regulations, including, without
limitation, the laws and regulations applicable in the United States,
European Union, Canada, Australia and/or Japan, relating to the MANUFACTURE
of PRODUCT, including but not limited to, the current Good Manufacturing
Practices as specified in the United States Code of Federal Regulations,
the EU Good Manufacturing Guidelines, Q7A Good Manufacturing Practice
Guidance for Active Pharmaceutical Ingredients (also known as Annex 18 to
EudraLex Volume 4, "European Commission Guide to Good Manufacturing
Practice for Medicinal Products"), and any other applicable laws,
guidelines and/or regulations.
1.4 The term "COMPOUND" shall mean the COMPOUND as defined in the LICENSE
AGREEMENT.
1.5 [***]
1.6 The term "DELIVERY" (or the forms thereof) shall have the meaning set forth
in Section 4.3.
1.7 The term "DMF" shall mean a Drug Master File covering COMPOUND maintained
with the U.S. REGULATORY AUTHORITY or its equivalent maintained with other
REGULATORY AUTHORITIES.
1.8 The term "FACILITY" or "FACILITIES" shall mean, as appropriate, either or
both of, (i) NASTECH's facility located at 0000 Xxxxx Xxxxx Xxxxxxx,
Xxxxxxx, XX, and (ii) NASTECH's facility located at 00 Xxxxxx Xxxxx,
Xxxxxxxxx, Xxx Xxxx 00000.
1.9 The term "FIRM ORDER" means a binding commitment in writing made by P&GP to
purchase PRODUCT from NASTECH in accordance with Section 3.2.
1.10 The term "FIRST COMMERCIAL SALE" shall mean with respect to a PRODUCT in a
country, the initial transfer of a Product billed or invoiced by P&GP (or
one of its AFFILIATES or sublicensees) to a non-sublicensee Third Party in
such country after all required REGULATORY APPROVALS have been granted by
the REGULATORY AUTHORITY of such country. Sales in such country for
clinical study purposes or compassionate, named patient use or under
treatment IND programs or similar uses will not constitute a FIRST
COMMERCIAL SALE in such country. "IND" means an Investigational New Drug
application, Clinical Study Application or Clinical Trial Exemption (as
such terms are defined by the FDA), or any similar application or
submission for approval to conduct human clinical investigations in
accordance with applicable regulations and requirements of the FDA or the
corresponding Regulatory Authority in any jurisdiction outside the United
States.
1.11 [***]
2
[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
1.12 The term "LICENSE AGREEMENT" shall have the meaning assigned in the
recitals hereto.
1.13 The term "LONG RANGE PLAN" shall have the meaning set forth in Section 3.3.
1.14 The term "MANUFACTURE/MANUFACTURING/MANUFACTURED" shall mean all operations
involved in the receipt, incoming inspections, storage and handling of
MATERIALS and the manufacturing, formulating, PRIMARY PACKAGING, secondary
packaging (i.e., putting PRIMARY PACKAGED PRODUCT into appropriate
containers/cartons), labeling, warehousing, quality control testing
(including in-process, release and stability testing), release, and
shipping of PRODUCT; provided that in the event P&GP elects to perform
secondary packaging and labeling pursuant to Section 2.1 of this AGREEMENT,
then secondary packaging and labeling shall be excluded from the definition
of "MANUFACTURE".
1.15 The term "MATERIALS" shall mean all raw materials, including without
limitation, the COMPOUND, excipients, components, containers, labels and
packaging materials necessary for the MANUFACTURE of PRODUCT.
1.16 The term "MONTH" shall mean a calendar month.
1.17 The term "NASAL FORMULATIONS" shall mean the intranasally administrated
formulation of the COMPOUND [***].
1.18 The term "NASTECH KNOW-HOW" shall have the meaning given in the LICENSE
AGREEMENT.
1.19 [***]
1.20 The term "PRIMARY PACKAGED PRODUCT" shall mean a NASAL FORMULATION
contained in a primary container, and accompanied by an actuator used to
administer the NASAL FORMULATION, as specified in Schedule 1.26. For the
purposes of this AGREEMENT, "primary container" shall include a glass
bottle or other similar packaging which comes into contact with the NASAL
FORMULATION as specified in Schedule 1.26.
1.21 The term "PRIMARY PACKAGING" shall mean the process of manufacturing
PRIMARY PACKAGED PRODUCT.
1.22 The term "PRODUCT" shall mean, as to each jurisdiction where either
commercial sale or administration to human patients in a Clinical Trial in
the Field has been approved by the appropriate REGULATORY AUTHORITY, the
PRIMARY PACKAGED PRODUCT in the final packaged and labeled form approved by
such REGULATORY AUTHORITY and ready for commercial sale or use in such
Clinical Trial, provided, however, that "PRODUCT" shall not include
"Product/Novel" as defined in the LICENSE AGREEMENT.
3
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DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
1.23 The term "QUARTER" shall mean the respective periods of three (3)
consecutive calendar months ending on March 31, June 30, September 30 and
December 31.
1.24 The term "REGISTRATIONS" shall mean the technical, medical and scientific
licenses, registrations, authorizations and/or approvals of the PRODUCT
(including the prerequisite manufacturing approvals or authorizations,
marketing authorization based upon such approvals and pricing, third party
reimbursement and labeling approvals related thereto) that are required by
any national, supranational (e.g., the European Commission or the Council
of the European Union), regional, state or local regulatory agency,
department, bureau or other governmental entity in the TERRITORY, as
amended or supplemented from time to time.
1.25 The term "SECONDARY MANUFACTURER" shall have the meaning set forth in
Section 2.3.
1.26 The term "SPECIFICATIONS" shall mean the P&GP specifications for MATERIALS,
PRODUCT and PRIMARY PACKAGED PRODUCT set forth in Schedule 1.26 hereto,
which may be amended from time to time under the terms of this AGREEMENT.
1.27 The term "SLEA" shall mean the supplier level execution agreement entered
into between NASTECH and P&GP which is a non-binding agreement outlining
details and expectations of the parties hereto associated with but not
limited to production planning, customer service, problem solving
procedures, and similar activities, as may be amended, modified, extended
or supplemented from time to time.
1.28 The term "SUPPLY PRICE" shall have the meaning set forth in Section 4.1.
1.29 The term "TERM" shall have the meaning set forth in Section 12.1.
1.30 The term "TERRITORY" shall mean all of the countries in the world, and
their respective territories and possessions.
1.31 The term "UNIT" shall mean a glass bottle of PRODUCT or PRIMARY PACKAGED
PRODUCT.
2. SUPPLY OF PRODUCT
2.1 Appointment. NASTECH agrees to MANUFACTURE and supply, and P&GP agrees to
purchase from NASTECH, 100% of P&GP's and its RELATED PARTIES' requirements
of PRODUCT in the TERRITORY during the TERM (except as set forth in
Sections 2.2 and 2.3 below), subject to [***] the terms and conditions
herein. For the avoidance of doubt RELATED PARTIES includes but is not
limited to any potential sublicensees outside of the U.S. Notwithstanding
the foregoing, P&GP shall have the option to perform secondary packaging
and labeling for its requirements of PRODUCT in all or part of the
TERRITORY; if P&GP elects to exercise this option the parties shall [***].
In this case NASTECH shall supply P&GP with PRIMARY PACKAGED PRODUCT for
such TERRITORY. P&GP's RELATED PARTIES may purchase PRODUCT
4
[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
directly from NASTECH under this AGREEMENT upon notification to NASTECH of
their agreement to be bound by the terms and conditions hereof; provided
that any Affiliate of P&GP may do so without such notification. For the
purposes of this AGREEMENT, all references to P&GP's requirements for
PRODUCT shall include the requirements of its RELATED PARTIES if RELATED
PARTIES have provided such notification to NASTECH.
2.1.1 [***]
2.2 Shortage of Supply.
2.2.1 In the event that at any time NASTECH foresees that it will be unable
to MANUFACTURE in whole or in part an ordered or forecasted quantity
of PRODUCT for any reason, including Section 13.4 (Force Majeure),
NASTECH shall notify P&GP of such inability immediately, the reasons
therefor and the date such inability is expected to end, the
quantities of PRODUCT available during such period and the proposed
amount of the MATERIALS and/or resources allocated to P&GP in the
event such inability is caused by a shortage of MATERIALS and/or
resources required for the MANUFACTURE of PRODUCT by delivery to P&GP
of a notice (a "SUPPLY ISSUE NOTICE"). The allocation provided in the
preceding sentence shall guarantee a minimum supply of PRODUCT
determined as follows: [***]. NASTECH will guarantee to maintain
REGULATORY AUTHORITY approval for PRODUCT MANUFACTURING in each of the
NASTECH FACILITIES.
2.2.2 Upon delivery of a SUPPLY ISSUE NOTICE by Nastech pursuant to Section
2.2.1 above, or in any event [***], P&GP and NASTECH will immediately
meet and work together, in good faith, to identify an appropriate
resolution to the supply problem. [***]. Any agreed resolution to the
supply problem will be set forth in a writing executed by both
parties.
2.2.3 If the parties cannot reach agreement on an appropriate resolution to
the supply problem [***], NASTECH shall make a firm commitment of the
amount of the affected PRODUCTS that NASTECH will be able to supply,
on a monthly basis, during the period when such supply problem with
respect to such PRODUCTS is expected to continue. Any agreed
resolution by the parties to the supply problem will be set forth in a
writing executed by both parties. If, despite good faith efforts,
[***] are unable to reach agreement on the resolution of such supply
problem [***] then at either party's immediate written request, the
problem will be governed by the terms of Section 2.5 Disputes (except
application of Section 2.1 as referenced in Section 2.5) of the
LICENSE AGREEMENT, and if after good faith negotiation there is still
no resolution, either party may refer the issue to arbitration
pursuant to Article XV of the LICENSE AGREEMENT.
2.2.4 If there is a supply problem subject to the provisions of subsections
2.2.1 through 2.2.3 above, and the parties have failed to reach a good
faith agreement on the resolution of such problem [***], then while
the Parties are using the LICENSE
5
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DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
AGREEMENT dispute resolution process referred to in Section 2.2.3, at
P&GP's written request provided to NASTECH [***], at P&GP's option
(x) NASTECH will continue to supply PRODUCT in accordance with
Section 3.2, or
(y) NASTECH shall grant to P&GP a royalty free license (the
"BACK-UP LICENSE") under the relevant NASTECH PATENTS and NASTECH
KNOW-HOW, as necessary to permit P&GP to make or have made the
PRODUCTS that are the subject of such supply problem that was not
resolved by the parties, solely for sale in accordance with the terms
of this AGREEMENT and the LICENSE AGREEMENT, and solely in quantities
to meet the amounts of P&GP and P&GP's RELATED PARTIES and
sublicensees' (if any) requirements for such PRODUCTS above the
amounts of such PRODUCTS that NASTECH remains able to supply on a
timely basis under this AGREEMENT.
(a) [***]
(b) Immediately upon P&GP's written request hereunder to obtain
the BACK-UP LICENSE, NASTECH shall, at its expense, (i) transfer
to P&GP [***] reasonably necessary to enable P&GP to manufacture
such PRODUCTS, (ii) promptly make available to P&GP [***] and
(iii) promptly assist P&GP [***] for the MANUFACTURE of PRODUCT
by P&GP or its designee. [***]. NASTECH shall provide P&GP
reasonable assistance, at P&GP's request and P&GP's expense, with
respect to [***].
(c) At such time as NASTECH is able to meet all of P&GP's
forecasted orders for PRODUCTS, the BACK-UP LICENSE granted under
this Section 2.2.4 shall terminate with respect to such PRODUCTS,
and P&GP shall immediately cease to exercise and practice the
BACK-UP LICENSE, [***].
(d) Sales by P&GP or its RELATED PARTIES of PRODUCTS manufactured
by or on behalf of P&GP pursuant to exercise of the BACK-UP
LICENSE under this Section 2.2.4 shall be included in Net Sales
for purposes of the LICENSE AGREEMENT. Nothing in the foregoing
shall limit or affect in any way P&GP's obligations to make the
payments as set forth in this AGREEMENT to the full extent
required on all PRODUCTS supplied to P&GP by NASTECH.
2.2.5 At the request of P&GP, NASTECH shall [***].
2.2.6 P&GP's exercise of its rights under this Section 2.2 shall not limit
other remedies available to P&GP at law or in equity, including
without limitation due to NASTECH's breach of its manufacturing
obligations hereunder.
2.3 Secondary Manufacturer.
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DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
Notwithstanding anything to the contrary herein or in the LICENSE
AGREEMENT, solely as a precaution [***], P&GP shall have the option to
develop a secondary source of supply for PRODUCT, [***] (the "SECONDARY
MANUFACTURER"). [***]. In the event P&GP exercises the rights [***],
NASTECH shall (i) immediately provide the SECONDARY MANUFACTURER [***],
(ii) promptly assist the SECONDARY MANUFACTURER [***] for the MANUFACTURE
of PRODUCT, (iii) allow the SECONDARY MANUFACTURER [***] to otherwise
enable P&GP to exercise its rights under this Section 2.3, and (iv) at the
request of P&GP, supply [***].
2.4 Subcontracting.
NASTECH may not subcontract its obligations under this AGREEMENT to a third
party without P&GP's prior written consent, which shall not be unreasonably
withheld or delayed.
2.5 Procurement of Materials.
NASTECH shall be responsible for the procurement of all MATERIALS. [***].
Notwithstanding the foregoing, P&GP shall have the option, with prior
written notice to NASTECH, to [***]. In the event P&GP exercises its option
set forth above, [***].
3. FORECASTS AND ORDERS
3.1 Forecasts.
(a) In order to assist NASTECH in its production planning, no later than
[***] prior to the date of the anticipated FIRST COMMERCIAL SALE, P&GP
will provide NASTECH with a written [***] forecast of P&GP's
requirements for PRODUCTS [***]. On or about the first day of each
month after delivery of such initial forecast (each, a "FORECAST
DELIVERY DATE"), P&GP shall submit to NASTECH its updated forecast
[***] in the same format.
(b) Except as otherwise provided in Section 3.2, it is understood and
agreed that forecasts shall not constitute commitments to purchase
PRODUCT or FIRM ORDERS.
3.2 Firm Orders.
(a) Firm orders. No later than [***] of each MONTH during the TERM (each,
a "FIRM ORDER MONTH") preceding the MONTH during which P&GP requires
PRODUCTS to be delivered (the "DELIVERY MONTH"), P&GP shall place an
order (a "FIRM ORDER") for its requirements of PRODUCT, [***].
(b) Calculation of Firm Order Obligation. With respect to each PRODUCT for
which P&GP places a FIRM ORDER, the quantity which NASTECH shall be
obligated
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DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
to supply (the "FIRM SUPPLY") shall not exceed or be less than the
amount determined as follows [***]:
(i) [***]
(ii) [***]
(iii) [***]
(iv) [***]
(c) NASTECH shall use good faith, diligent, commercially reasonable
efforts to meet P&GP's requirements in excess of the FIRM SUPPLY.
NASTECH shall satisfy each FIRM ORDER in the TARGET MONTH specified in
each FIRM ORDER provided by P&GP and shall endeavor to manufacture and
deliver PRODUCT in accordance with the then current SLEA.
(d) A FIRM ORDER shall be made on a purchase order, releases or other
reasonable appropriate documentation ("PURCHASE ORDER"). Such PURCHASE
ORDERS shall specify quantities of PRODUCT consistent with this
Section 3.2, shipping instructions, delivery date(s) and detailed
instructions for the delivery of PRODUCT (with release schedules,
delivery orders or equivalent notices). Each PURCHASE ORDER shall be
binding upon NASTECH and P&GP, and shall be deemed to constitute a
part of this AGREEMENT as if fully set forth herein, and all terms and
conditions of this AGREEMENT shall be deemed to apply to the subject
matter of such PURCHASE ORDER as if fully set forth therein. In the
event of any conflict or inconsistency between the terms of this
AGREEMENT and the terms of any PURCHASE ORDER, the terms of this
AGREEMENT shall prevail.
3.3 Long Range Plan. In addition to the rolling monthly forecast, [***], P&GP
shall provide NASTECH with a long range plan containing a non-binding
estimate of annual requirements of PRODUCT for the following [***] (each a
"LONG RANGE PLAN"). [***]
3.4 Customer Service. P&GP will establish standards for customer service
necessary to meet P&GP's requirements. The parties will agree on
measurements of compliance with these standards, and expected levels of
performance. NASTECH will develop and maintain systems, staffing and
procedures to meet P&GP's requirements. The parties will cooperate to
develop a non-binding SLEA outlining details and expectations associated
with but not limited to production planning, customer service, problem
solving procedures, and similar activities.
4. PRICE; PAYMENT AND TERMS OF SALE
4.1 Price. The supply price (the "SUPPLY PRICE") payable by P&GP to NASTECH for
each Unit of PRODUCT DELIVERED hereunder, shall be fixed for each Calendar
Year of the TERM and shall equal [***]
8
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DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
4.1.1 [***]
4.1.1.1 [***]
4.1.2 [***]
4.1.3. Cost of Samples. The cost of samples of PRODUCT shall follow the
calculation as described above in Section 4.1.1 [***].
4.2 Payment. Payment of the SUPPLY PRICE for PRODUCT DELIVERED to P&GP shall be
made by P&GP in United States dollars, free and clear of any reduction,
charges, fees or withholding of any nature unless acknowledged by NASTECH
in writing [***] after the date the accurate invoice (as illustrated in the
SLEA) is received by P&GP or the date of the corresponding DELIVERY,
whichever is later. Payment by P&GP shall be made by bank wire transfer to
a bank account designated in writing by NASTECH from time to time.
4.3 DELIVERY. NASTECH shall DELIVER PRODUCT, under P&GP shipping
specifications, purchased by P&GP FCA (INCOTERMS 2000), site of MANUFACTURE
(each a "DELIVERY").
4.4 Title and Risk of Loss. Title to the PRODUCT sold hereunder shall pass to
P&GP upon DELIVERY, whereupon P&GP shall assume all risk of loss or damage.
4.5 Terms of Sale. The terms and conditions of this AGREEMENT shall be
controlling over any inconsistent terms or conditions included in any FIRM
ORDER or any other sales acknowledgment or document. No provision of P&GP's
purchase order forms which may impose different conditions than those
herein referenced upon NASTECH, P&GP or their respective Affiliates shall
be of any force or effect unless expressly agreed to in writing by NASTECH.
4.6 Expiration Dating. All PRODUCT delivered to P&GP shall have no less than
[***] shelf life remaining on the date of its DELIVERY [***] to P&GP in
accordance with SECTION 4.3.
4.7 [***]
4.8 Cost Savings. P&G will work with NASTECH to develop and execute continuous
improvement and cost savings for all processes associated with the Product
and services associated with the PRODUCT.
5 WARRANTY AND LIMITATIONS
5.1 NASTECH Warranty. NASTECH represents and warrants that (A) all PRODUCT and
(B) all PRIMARY PACKAGED PRODUCT as supplied under Section 2.1 hereof
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DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
(collectively (A) and (B) shall be "SECTION 5 PRODUCT"), shall, at the time
of DELIVERY, (i) meet the SPECIFICATIONS, (ii) be MANUFACTURED in
accordance with cGMPs, and (iii) be MANUFACTURED in accordance with all
applicable LAWS and regulations, REGULATORY AUTHORITY and REGISTRATIONS
requirements in effect on the day of DELIVERY. Without limiting the
warranty in Section 5.1, NASTECH guarantees that no SECTION 5 PRODUCT
shall, at the time of DELIVERY, be (a) adulterated or misbranded within the
meaning of the U.S. Federal Food, Drug and Cosmetic Act (the "Act"), or any
similar law of any other jurisdiction, or (b) an article which may not,
under the provisions of the Act, or any similar law of any other
jurisdiction, be introduced into interstate commerce.
5.2 Warranty Claims.
(a) If P&GP claims that any shipment of SECTION 5 PRODUCT did not, at the
time of DELIVERY, meet the warranty specified in Section 5.1(i), P&GP
shall promptly notify NASTECH. If P&GP and NASTECH are unable to agree
as to whether such SECTION 5 PRODUCT met such warranties, the parties
shall cooperate to have the SECTION 5 PRODUCT in dispute analyzed by
an independent testing laboratory of recognized repute selected by
P&GP and approved by NASTECH, which approval shall not be unreasonably
withheld. The results of such laboratory testing shall be final and
binding on the parties on the issue of compliance of the SECTION 5
PRODUCT with such warranty. If the SECTION 5 PRODUCT is determined to
meet such warranty, then P&GP shall bear the cost of the independent
laboratory testing and pay for the SECTION 5 PRODUCT in accordance
with this AGREEMENT. If the SECTION 5 PRODUCT is determined not to
have met such warranty, then NASTECH shall bear the cost of laboratory
testing, and NASTECH shall, at P&GP's election, either replace the
rejected SECTION 5 PRODUCT within [***] of the date of such
determination, at no cost to P&GP, or refund to P&GP the price paid
for such SECTION 5 PRODUCT, plus any applicable delivery charge.
(b) If P&GP claims that any shipment of SECTION 5 PRODUCT did not meet the
warranties specified in Section 5.1(ii) or (iii), P&GP shall notify
NASTECH, and if P&GP and NASTECH are unable to agree as to whether or
not such SECTION 5 PRODUCT met such warranties, then the problem will
be governed by the terms of Section 2.5 Disputes (except for
application of Section 2.1 as referenced in Section 2.5) of the
LICENSE AGREEMENT, and if after good faith negotiation there is still
no resolution, either party may refer the issue to arbitration
pursuant to Article XV of the LICENSE AGREEMENT. If the SECTION 5
PRODUCT is determined not to have met any such warranty, then NASTECH
shall, at P&GP's election, either replace the rejected SECTION 5
PRODUCT within [***] of the date of such determination, at no cost to
P&GP, or refund to P&GP the price paid for such SECTION 5 PRODUCT,
plus any applicable delivery charge.
5.3 Disposition of Non-conforming Product. Any SECTION 5 PRODUCT DELIVERED by
NASTECH to P&GP that are not in full compliance with any representation,
warranty,
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DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
covenant or other obligation set forth in this AGREEMENT may, upon mutual
agreement between P&GP and NASTECH within [***] after P&GP'S notice to
NASTECH, or at P&GP's option any time thereafter, be (i) returned to
NASTECH at NASTECH's expense for credit to P&GP [***]; (ii) scrapped by
P&GP, at NASTECH's expense, in which case P&GP shall be relieved of any
payment obligations with respect to such SECTION 5 PRODUCT, or (iii)
reworked by P&GP or NASTECH, at NASTECH's expense. The rights and remedies
set forth in this Section are not exclusive and nothing herein shall limit
the rights and remedies either PARTY may have under this AGREEMENT or at
law.
6. QUALITY
6.1 General Obligations. NASTECH shall MANUFACTURE and supply PRODUCT in
accordance with the SPECIFICATIONS, in accordance with applicable laws,
regulations and REGULATORY AUTHORITY and REGISTRATIONS requirements,
compliant with cGMPs. PRODUCT supplied hereunder shall be labeled in
compliance with the REGISTRATIONS. To the extent that NASTECH or P&GP
should enter into contracts with suppliers or contract laboratories in
connection with the MANUFACTURE or supply of PRODUCT, such contracts shall
contain provisions that such suppliers or contract laboratories shall
deliver supplies or perform contracted services in accordance with
applicable laws, regulations and REGULATORY AUTHORITY and REGISTRATIONS
requirements, compliant with cGMPs. In addition, P&GP covenants that all
materials supplied to NASTECH by or on behalf of P&GP for incorporation by
NASTECH into a Product shall be acquired pursuant to a contract in
compliance with the immediately preceding sentence.
6.2 Change Control.
(a) Notwithstanding anything herein to the contrary, NASTECH shall not
amend, change or supplement any of the following without P&GP's prior
written consent (which consent may not be unreasonably withheld or
delayed with respect to clauses (C), (E), or (G)), except as may be
required to comply with applicable LAWS and regulations and REGULATORY
AUTHORITY requirements: (A) the SPECIFICATIONS; (B) the MATERIALS; (C)
the source of MATERIALS; (D) the specifications for MATERIALS; (E) the
equipment used in the MANUFACTURE; (F) the test methods used in
connection with the MANUFACTURING of PRODUCT and MATERIALS; and (G)
the process for MANUFACTURING PRODUCT or MATERIALS. Any change in any
of the foregoing shall, in each case, comply with cGMPs and all
applicable laws, regulations and REGULATORY AUTHORITY requirements and
should be made in accordance with the CHANGE CONTROL PROCEDURE (as
defined below). In the event that NASTECH needs to change any of the
foregoing, NASTECH shall (i) immediately notify P&GP of the requested
change, (ii) be responsible, at its expense, for ensuring that all
COMPOUND and PRODUCT MANUFACTURED following such change meets the
SPECIFICATIONS and (iii) provide P&GP with all information needed to
amend the REGISTRATIONS and any other regulatory filings maintained
with respect to PRODUCT. NASTECH shall continue to supply P&GP with
PRODUCT approved under NASTECH's DMF, P&GP's then existing
REGISTRATIONS and other regulatory
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ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
filings for PRODUCT until such time as the COMPOUND or PRODUCT
MANUFACTURED following such change is permitted under the
REGISTRATIONS and other regulatory filings for COMPOUND and PRODUCT.
If NASTECH or its supplier is responsible for regulatory filings and
obtaining REGULATORY AUTHORITY approvals, NASTECH must immediately
notify P&GP whether such changes have been approved or rejected.
b) Product Changes. For changes required by applicable law, rule or
regulation or by medical or scientific concerns as to the safety or
efficacy of PRODUCT supplied hereunder (collectively, "PRODUCT
CHANGES"), the parties shall co-operate in making such changes
promptly and P&GP shall, unless otherwise agreed, bear the costs of
making and/or implementing such changes. For the avoidance of doubt,
PRODUCT CHANGES do not include any changes resulting from or relating
to stability testing programs for PRODUCT (which are the
responsibility of NASTECH).
c) Other Required Changes. For changes which (i) are not the result of a
PRODUCT CHANGE (as defined above), and (ii) which are required by
applicable law, rule or regulation and (iii) are required to bring
NASTECH's facilities and/or processes into compliance with such
requirements, the parties shall co-operate in making such changes
promptly and NASTECH shall, unless otherwise agreed, bear the costs of
making and/or implementing such changes and the costs of the scrapping
of materials (including but not limited to raw and packaging
materials, work in process, inventory and labeling materials)
necessitated by any such changes.
d) Discretionary Changes. With respect to changes to the PRODUCT, the
Specifications or any related processes not required by applicable
law, rule or regulation or by medical or scientific concerns as to the
safety or efficacy of PRODUCT sold hereunder (collectively,
"Discretionary Changes"), the parties shall cooperate in making such
changes. P&GP reserves the right to make Discretionary Changes
unilaterally, subject however, to prior consultation with NASTECH and
to the condition that NASTECH's overall production planning and
PRODUCT commitments to other parties are not materially adversely
impacted by any such change. In either event, the party initiating
such change(s) shall bear the costs necessitated by making and/or
implementing such changes.
6.3 Facility. NASTECH shall, at its own cost and expense, ensure the FACILITIES
are approved as MANUFACTURING sites for PRODUCT prior to approval by the
applicable REGULATORY AUTHORITY of the first NDA for a PRODUCT. NASTECH
shall provide P&GP with access to such FACILITIES for verifying their
compliance with cGMP and P&GP'S quality standards, and shall, at NASTECH's
own cost and expense, take any corrective action to rectify any
deficiencies identified by P&GP. NASTECH shall, at its own cost and
expense, maintain the REGULATORY AUTHORITY approved status of the
FACILITIES during the TERM.
NASTECH shall MANUFACTURE all PRODUCT supplied hereunder at the FACILITY.
MANUFACTURING of PRODUCT may not be relocated without P&GP's prior written
consent. Any such relocation of the MANUFACTURING of PRODUCT shall comply
with cGMPs and all applicable laws, regulations and REGULATORY
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DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
AUTHORITY and REGISTRATIONS requirements and shall be made in accordance
with the CHANGE CONTROL PROCEDURE. NASTECH shall permit one or more
qualified technical specialists from P&GP, upon reasonable prior notice and
during normal business hours, to conduct audits (including, but not limited
to, quality, safety and environmental) of the FACILITIES or any other
facility which is proposed to be used to MANUFACTURE PRODUCT. Observations
and conclusions of P&GP's audits will be issued to, and promptly discussed
with, NASTECH and corrective action shall be implemented by NASTECH, at
NASTECH's expense, prior to filling new or outstanding FIRM ORDERS;
provided, however, that P&GP may, in its sole discretion, accept PRODUCT
from NASTECH prior to NASTECH's completion of the corrective action. P&GP
shall have the right to review all relevant documentation pertinent to the
corrective actions implemented by NASTECH.
6.4 Maintenance; Validation. NASTECH agrees, at its expense, to operate and
maintain the FACILITY and all equipment used, directly or indirectly, to
MANUFACTURE PRODUCT in accordance with cGMPs and all applicable LAWS and
regulations and REGULATORY AUTHORITY requirements and to maintain said
FACILITY and equipment in an acceptable state of repair and operating
efficiency so as to meet the SPECIFICATIONS and comply with the PRODUCT
KNOW-HOW. NASTECH shall be responsible for validating the equipment
(including without limitation conducting installation, operational and
performance qualification), production, cleaning, packaging, process and
any other appropriate steps performed at the FACILITY in accordance with
the PRODUCT KNOW-HOW. Validation procedures presently used by NASTECH may
be used; provided, such procedures (i) are found acceptable to P&GP, (ii)
meet applicable regulatory requirements, and (iii) are found acceptable by
REGULATORY AUTHORITY inspectors, if applicable. If P&GP or any REGULATORY
AUTHORITY finds NASTECH's validation procedures to be unacceptable, then
all validation must be repeated in a timely manner to meet all applicable
regulatory requirements and guidelines and to receive all REGULATORY
AUTHORITY approvals.
6.5 Certificate of Analysis. NASTECH shall provide P&GP with certificates of
analysis for each lot of PRODUCT released for DELIVERY hereunder. These
certificates will document that each lot received by P&GP conforms to the
SPECIFICATIONS. These certificates shall include the date of MANUFACTURE
and either a retest date or expiry date for PRODUCT, as appropriate. A copy
of each certificate shall be included with each lot delivered to P&GP, and
one copy shall be faxed at the time of delivery to the P&GP representative
specified in the QUALITY AGREEMENT. NASTECH shall also provide P&GP with
REGULATORY AUTHORITY certification, for those countries in which the
applicable REGULATORY AUTHORITY is in the practice of requiring any such
certifications.
6.6 Quality Control Testing. NASTECH shall perform, at its quality control
laboratories or its qualified external contract laboratory facilities as
described in the approved REGISTRATIONS, such quality control tests as are
indicated in the SPECIFICATIONS, in accordance with the test methods and
procedures. NASTECH shall make the results of its quality control tests
available to P&GP on or before the date of DELIVERY of the corresponding
lots of PRODUCT. No Production lot of PRODUCT shall be released for
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ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
DELIVERY unless NASTECH's tests show the PRODUCT to meet the standards set
forth in the SPECIFICATIONS. Should any production lot fail to meet the
standards set forth in the SPECIFICATIONS, P&GP may, at its option,
investigate the cause of such failure or require NASTECH to do so and to
provide P&GP with a written report summarizing the results of NASTECH's
investigations. P&GP shall perform such confirmatory testing of PRODUCT
released for DELIVERY to P&GP as P&GP may deem appropriate, which may
include, but is not limited to, the recommended procedures set forth in the
SPECIFICATIONS. P&GP shall advise NASTECH of any failure of such PRODUCT to
meet the standards set forth in the SPECIFICATIONS without undue delay.
6.7 PRODUCT Release. P&GP is responsible for final release of each lot of
PRODUCT for sale within the TERRITORY in accordance with P&GP's standard
practices. NASTECH is responsible for providing a copy of those
MANUFACTURING records, as specified in the QUALITY AGREEMENT, for each lot
of PRODUCT MANUFACTURED in support of P&GP's responsibility for final
release decision.
6.8 Reference Samples. NASTECH shall supply P&GP, upon request, with reasonable
quantities of reference standards relating to PRODUCT as specified in the
QUALITY AGREEMENT, [***], in order to facilitate P&GP's confirmatory
testing.
6.9 Retention of Samples. As part of the stability program, NASTECH is
responsible for retaining representative samples of each lot of PRODUCT
that is MANUFACTURED. The quantity of retention samples shall be [***] the
amount of PRODUCT required to perform quality control release testing. Such
amounts shall be stored and retained for [***] following completion of
MANUFACTURE. Retained samples of PRODUCT shall be visually examined at
least annually. NASTECH shall promptly notify P&GP of any observed
abnormality.
6.10 Stability Testing. At P&GP's expense [***], NASTECH shall perform an
on-going program of annual stability testing, in accordance with the
REGISTRATIONS and a protocol approved by P&GP. The number of lots for such
program will be agreed to by the PARTIES, [***]. Such stability testing
shall be stability indicating. In the event that NASTECH detects any
instability or has a confirmed out of specification result, NASTECH shall
notify P&GP within [***] of such event. NASTECH shall specifically
incorporate such additional testing and controls (e.g., storage condition
changes) as P&GP may specify with respect to such instability and/or
degradant. In addition, the PARTIES shall agree to assess the need to place
additional lot(s) of PRODUCT on stability following the implementation of a
change as described in Section 6.2.
6.11 Annual Product Review ("APR"). NASTECH agrees to implement and perform, at
its own expense, an Annual Product Review Program for PRODUCT including,
but not limited to, a review of production related and quality control
testing related atypical investigations. The APR will be provided by
NASTECH to P&GP for review and approval.
6.12 Cross Contamination. NASTECH hereby declares that as of the date of
execution of this AGREEMENT it is not producing, packaging, labeling,
warehousing, quality control
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COMMISSION.]
testing (including in-process, release and stability testing), releasing or
shipping any chemical entity classified as penicillins or other beta-lactam
antibiotics such as cephalosporins or carbapenems, steroids, alkaloids,
controlled substances, LIVE AGENTS, cytotoxic drug substances, pesticides,
herbicides, fungicides, or other toxic non-drug substances in the FACILITY.
The term "LIVE AGENT" means a product containing a living organism that
causes infectious disease, including, but not limited to, viruses,
bacteria, rickettsia, fungi, and protozoa. In the event that NASTECH
intends, during the course of this AGREEMENT, to produce, package, label,
warehouse, quality control test (including in-process, release and
stability testing), release or ship any chemical entity belonging to the
classes of products listed above, NASTECH shall promptly notify P&GP in
writing of its intention to do so in order to allow P&GP to consider any
potential questions of cross-contamination or regulatory requirements. In
the event P&GP, after reasonable consultation with NASTECH, identifies a
potential problem of cross-contamination or regulatory requirements that
would prohibit the activity, NASTECH agrees not to manufacture, formulate
or package products in the FACILITY that P&GP considers to present
cross-contamination problems for PRODUCT.
6.13 Quality Agreement. As soon as practicable after the EFFECTIVE DATE but in
no event more than [***] thereafter, the Parties shall negotiate and
execute a supplemental Quality Agreement (the "QUALITY AGREEMENT"),
consistent with the terms of this AGREEMENT, which shall provide for each
party's respective compliance responsibilities associated with the
MANUFACTURE of PRODUCT, including but not limited to a mutually agreeable
change control request and approval procedure (the "CHANGE CONTROL
PROCEDURE").
7. RECORDS RETENTION
7.1 All MANUFACTURING records for each lot (including stability testing
records) shall be retained by NASTECH for a period of not less than [***]
from the date of MANUFACTURE of such lot of PRODUCT to which said records
pertain. NASTECH shall provide P&GP with complete and accurate copies of
the appropriate documents for each production lot, upon P&GP's request.
NASTECH shall retain all records related to the MANUFACTURING of validation
lots for [***] past the effective date of termination of this AGREEMENT.
Thereafter, NASTECH shall notify P&GP of any intention to destroy such
records and shall afford P&GP the opportunity to obtain such records.
8. REGULATORY MATTERS
8.1 Recalls.
(a) In the event that (i) any governmental agency or authority issues a
request or directive or order that PRODUCT be recalled or retrieved;
(ii) a court of competent jurisdiction orders that PRODUCT be recalled
or retrieved; or (iii) P&GP reasonably determines that PRODUCT should
be recalled or retrieved, P&GP shall promptly notify NASTECH of such
event and shall conduct such
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DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
activity and take appropriate corrective actions, and NASTECH shall
provide such assistance to P&GP as is reasonably necessary to carry
out such activities. All reasonable cost and expense of such recall
and corrective actions shall be the responsibility of P&GP, provided
that NASTECH shall indemnify P&GP for such cost and expense to the
extent that the recall and corrective actions taken hereunder are
caused by: (x) any breach by NASTECH of its obligations under this
AGREEMENT, or (y) any intentional or negligent act or omission of
NASTECH or its Affiliates or any of their directors, officers,
employees or agents in connection with the manufacture and supply of
PRODUCT hereunder. In the event that P&GP's cost and expense are
indemnified by NASTECH, NASTECH shall be entitled to audit such cost
and expense.
(b) NASTECH agrees to abide by all decisions of P&GP to recall or withdraw
PRODUCT.
8.2 Notices of Health and Safety Information. NASTECH shall [***] notify P&GP
of any information of which it is aware concerning PRODUCT supplied to P&GP
which may affect the safety or efficacy or the continued marketing of the
PRODUCT. Any such notification will include all related information in
detail. Upon receipt of any such information, NASTECH shall consult with
P&GP in an effort to arrive at a mutually acceptable procedure for taking
appropriate action; provided, however, that nothing contained herein shall
be construed as restricting the right of either party to make a timely
report of such matter to any REGULATORY AUTHORITY or take other action that
it deems to be appropriate or required by applicable law or regulation.
Each party will notify the other immediately of any health hazards with
respect to PRODUCT which may impact employees involved in the MANUFACTURE
of PRODUCT.
8.3 Regulatory Authority Inspection. NASTECH hereby agrees to advise P&GP [***]
of any proposed or unannounced visit or inspection by any governmental
authority, including, without limitation, any REGULATORY AUTHORITY or any
environmental regulatory authority and agrees to inform P&GP if such visit
or inspection is related to the PRODUCT or its MANUFACTURE. NASTECH agrees,
if such visit or inspection is related to the PRODUCT or its MANUFACTURE,
to permit one or more qualified representative(s) of P&GP to be present if
requested by P&GP. If P&GP is not present during such a visit or
inspection, and such visit or inspection is related to the PRODUCT or its
MANUFACTURE, NASTECH shall promptly provide NASTECH's summary report of the
results of the inspection to P&GP in English. NASTECH shall [***] furnish
P&GP English summaries of all REGULATORY AUTHORITY reports, documents or
correspondence with respect to any REGULATORY AUTHORITY requests or
inspections of the FACILITY if such reports, documents or correspondence
are related to the PRODUCT or its MANUFACTURE, as well as a copy of each
such report, document or correspondence in English. The Parties will
cooperate in the development and review of responses that are required by
any REGULATORY AGENCY and relating to the MANUFACTURE of PRODUCT prior to
submission to the regulatory agency. Nothing contained within this article
shall restrict the right of either party to make a timely report to any
REGULATORY AGENCY or take action that it deems to be appropriate or
required by APPLICABLE LAW. NASTECH shall without delay notify P&GP of any
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COMMISSION.]
REGULATORY AGENCY request for samples of PRODUCT or PRODUCT MANUFACTURING
lot records and will not provide such material until such notification is
made to P&GP.
8.4 Complaints and Adverse Events. NASTECH hereby agrees to advise P&GP
immediately (and, in any event, within twenty-four (24) hours) of any
information it receives relating to the safety, efficacy or potency of the
PRODUCT. NASTECH will assist P&GP in investigating and resolving all
complaints and adverse events related to the MANUFACTURING of the PRODUCT
and NASTECH will complete its investigation and report results to P&GP
[***]. P&GP will be responsible for communicating to any REGULATORY
AGENCIES regarding PRODUCT complaints or adverse events. NASTECH will take
any corrective actions agreed to by the parties to avoid future occurrences
of PRODUCT complaints or adverse events.
9. INDEMNITY
9.1 Indemnification by NASTECH. NASTECH shall defend, indemnify and hold P&GP,
its RELATED PARTIES and their respective directors, officers, employees and
agents, and their respective successors and permitted assigns, harmless
from any and all claims, actions, causes of action, liabilities, losses,
damages, costs or expenses, including reasonable attorney's fees, which
arise out of or relate to (i) the failure of SECTION 5 PRODUCT (as defined
in Section 5.1) provided by NASTECH hereunder to meet the warranties set
forth in Section 5.1; (ii) a breach by NASTECH of any of its
representations, warranties, covenants, agreements or obligations under
this AGREEMENT; or (iii) the negligence, recklessness or willful misconduct
of NASTECH in supply of PRODUCT hereunder or in the performance of its
other obligations under this AGREEMENT.
9.2 Indemnification by P&GP. P&GP shall defend, indemnify and hold NASTECH, its
AFFILIATES, and their respective directors, officers, employees and agents,
and their respective successors and permitted assigns, harmless from any
and all claims, actions, causes of action, liabilities, losses, damages,
costs or expenses, including reasonable attorneys' fees, which arise out of
or relate to (i) a breach by P&GP of any of its representations,
warranties, covenants, agreements or obligations under this AGREEMENT; or
(ii) the negligence, recklessness or willful misconduct of P&GP in the
performance of its obligations under this AGREEMENT.
9.3 Notification of Claims. Each party agrees to give the other (i) prompt
written notice of any claims made for which the other might be liable under
the foregoing indemnification and (ii) the opportunity to defend,
negotiate, and settle such claims. The party seeking indemnification under
this AGREEMENT shall provide the other party with all information in its
possession, all authority, and all assistance reasonably necessary to
enable the indemnifying party to carry on the defense of such suit;
provided, however, that each party shall have the right to retain counsel
to defend itself in such suit. Neither party shall be responsible or bound
by any settlement made without its prior written consent.
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DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
10. CONFIDENTIALITY AND PUBLIC ANNOUNCEMENTS
10.1 Confidentiality and Required Disclosure. The provisions of Section 12.1 and
12.2 of the LICENSE AGREEMENT are incorporated herein by reference as if
fully stated herein.
10.2 Publicity/Use of Names; Survival. The provisions of Section 12.3 and 12.5
of the LICENSE AGREEMENT are incorporated herein by reference as if fully
stated herein.
11. ARBITRATION/GOVERNING LAW
11.1 Governing Law; Disputes. The parties acknowledge and agree that this
AGREEMENT constitutes a contract pertaining to a transaction covering in
the aggregate not less than $1,000,000 and that their choice of law
specified below have been made pursuant to and in accordance with Sections
5-1401 and 5-1402, respectively, of the New York General Obligations Law.
Accordingly, the parties acknowledge and agree that this AGREEMENT shall be
governed by the laws of the State of New York as to all matters including,
but not limited to, matters of validity, construction, effect, performance
and liability, without consideration of conflicts of laws provisions
contained therein. The U.N. Convention on International Sales of Goods
shall not apply. In the event of any controversy or claim arising out of or
relating to this AGREEMENT or breach thereof, the dispute resolution and
arbitration provisions of the LICENSE AGREEMENT, Section 2.5 (except for
application of Section 2.1 as referenced in Section 2.5) and Article XV,
shall apply.
11.2 Remedies Cumulative. No remedy referred to in this AGREEMENT is intended to
be exclusive, but each shall be cumulative and in addition to any other
remedy referred to in this AGREEMENT or otherwise available at law or in
equity.
12 TERM AND TERMINATION
12.1 Term. Unless earlier terminated as provided in this Article 12 (the "TERM")
this AGREEMENT shall be effective as of the EFFECTIVE DATE and shall
continue in effect for a period of [***] years thereafter, P&GP may, in its
sole discretion, extend the TERM for up to [***] by providing NASTECH with
written notice no less than [***] prior to the expiration of the applicable
preceding TERM.
12.2 Mutual Agreement. This AGREEMENT may be terminated by written agreement of
the parties.
12.3 Termination by Either Party.
(a) This AGREEMENT may be terminated with written notice by either party
to the other at any time during the term of this AGREEMENT:
(i) if the other party is in breach of a material representation,
warranty, covenant or other obligation hereunder (except by a Force
Majeure cause pursuant
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COMMISSION.]
to Section 13.4) and has not cured such breach within thirty (30) days
after written notice requesting cure of the breach has been given;
provided, however, in the event of a good faith dispute with respect
to the existence of a material breach, the thirty (30) day cure period
shall be tolled until such time as the dispute is resolved pursuant to
Section 11.1, and provided further, that if the breaching party is
making good faith efforts to cure such breach, such thirty (30) day
cure period shall be extended for a period of sixty (60) days, for an
aggregate period of ninety days (90) from such notice requesting cure
or,
(ii) upon the filing or institution of bankruptcy, reorganization,
liquidation or receivership proceedings by the other party or upon an
assignment of a substantial portion of the assets for the benefit of
creditors by the other party; provided, however, in the case of any
involuntary bankruptcy proceeding such right to terminate shall only
become effective if the party consents to the involuntary bankruptcy
or such proceeding is not dismissed within sixty (60) days of the
filing thereof.
(b) [***] In case of NASTECH's failure to cure any breach of a material
representation, warranty, covenant or other obligation within the
period provided in paragraph (a) of this Section 12.3, P&GP, at P&GP's
option, shall have the right to [***].
12.4 Termination by P&GP. This AGREEMENT may be terminated by P&GP if P&GP
exercises its rights to MANUFACTURE pursuant to a BACK-UP LICENSE under
Sections 2.2 and 4.7 of this AGREEMENT. [***].
12.5 Termination of LICENSE AGREEMENT. This AGREEMENT shall automatically
terminate in the event the LICENSE AGREEMENT is terminated early pursuant
to the LICENSE AGREEMENT Sections 13.2, 13.3, and 13.4.
12.6 Payment of Outstanding Debts. Upon expiration or termination of this
AGREEMENT for whatever reason, either party shall settle all outstanding
invoices or monies owed to the other party or its AFFILIATES pursuant to
their stated terms; provided however, that in the event the termination is
the result of a breach by a party, all uncontested amounts owed to the
other party shall become immediately due and payable.
12.7 Return of Information. Unless otherwise permitted under this AGREEMENT or
the LICENSE AGREEMENT, within [***] subsequent to the expiration or
termination of this AGREEMENT, either party shall return to the other
party, (or have destroyed upon approval of the Party to whom the
information would have been returned), all Information received from the
other party, including all copies thereof; provided, however, that each
party shall have the right to retain one copy of Information in its
confidential files to the extent retention of such Information is required
by applicable laws and regulations.
12.8 Disposition of Inventory; Firm Orders.
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COMMISSION.]
(a) In the event this AGREEMENT expires or is terminated by P&GP and the
LICENSE AGREEMENT is still in effect, P&GP, its RELATED PARTIES and
distributors shall have the right to continue to sell all PRODUCT
remaining in their possession at the time of expiration or termination
(or purchased pursuant to paragraph (b) below), in accordance with the
terms of the LICENSE AGREEMENT.
(b) In the event this AGREEMENT is terminated by P&GP pursuant to Section
12.3 or 12.4 or is terminated by mutual agreement of the parties
pursuant to Section 12.2 above, P&GP shall purchase, and NASTECH shall
supply, all quantities of PRODUCTS specified in any FIRM ORDERS
effective as of the date of such termination, at the price in effect
for such FIRM ORDERS as of the date of such FIRM ORDER.
12.9 License of NASTECH Know-How.
(a) In the event the TERM of this AGREEMENT expires and is not extended by
P&GP pursuant to Section 12.1 above or terminated by P&GP pursuant to
Section 4.7, 12.3, or 12.4, NASTECH shall grant to P&GP a
non-exclusive, royalty-free license to utilize the NASTECH PATENTs and
NASTECH KNOW-HOW to the extent necessary for P&GP to make or have made
PRODUCT.
(b) P&GP may not MANUFACTURE or have MANUFACTURED PRODUCT under the
license granted under Section 12.9(a) above earlier than six (6)
months prior to the expiration of the Term of this AGREEMENT except
for the purpose of enabling P&GP or its designee to obtain the
necessary REGULATORY AUTHORITY approval for its MANUFACTURE of PRODUCT
after the expiration of this AGREEMENT. No PRODUCTS MANUFACTURED by
P&GP pursuant to the license granted under Section 12.9(a) shall be
sold by P&GP prior to the expiration of the TERM.
12.10 Surviving Clause. Expiration or termination of this AGREEMENT shall not
relieve the Parties of any obligation accruing prior to such expiration or
termination. Any expiration or termination of this AGREEMENT shall be
without prejudice to the rights of either party against the other accrued
or accruing under this AGREEMENT prior to expiration or termination.
Sections 5, 7, 8.1, 8.2, 8.4, 9.1 9.2, 9.3, 10.1, 10.2, 11.1, 11.2, 12 and
the definitions relating to the foregoing, shall survive expiration or
termination of this AGREEMENT; provided that Section 10.1 (confidentiality)
shall survive the expiration or termination of this AGREEMENT for [***]
thereafter.
13. MISCELLANEOUS PROVISIONS
13.1 Binding Effect; Assignment.
(a) This AGREEMENT shall inure to the benefit of and be binding upon each
of the parties hereto and their respective successors and
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DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
permitted assigns.
(b) This AGREEMENT may not be assigned or otherwise transferred, nor may
any right or obligation hereunder be assigned or transferred, by
either party without the consent of the other party, such consent not
to be unreasonably withheld or delayed. Notwithstanding the foregoing,
this AGREEMENT may be assigned by either party (i) in connection with
a CHANGE of CONTROL of such party to its acquiring party, without the
consent of the other party to this AGREEMENT, provided that the
permitted assignee shall assume all assigned obligations of the
assignor under this AGREEMENT, and
(ii) to an Affiliate of the assigning party, provided that the
assigning party shall remain liable for the performance of its
obligations hereunder by such Affiliate, and provided that the
permitted assignee shall assume all assigned obligations of the
assignor under this AGREEMENT.
(c) Any attempted assignment not in accordance with this Section 13.1
shall be null and void.
13.2 Cooperation. Each party agrees to execute such further papers, agreements,
documents, instruments and the like as may be necessary or desirable to
effect the purpose of this AGREEMENT and to carry out its provisions.
13.3 Entire Agreement. This AGREEMENT, together with the LICENSE AGREEMENT
contain the entire agreement between the parties with respect of the
subject matter hereof and supersedes and cancels all previous agreements,
negotiations, commitments and writings in respect of the subject matter
hereof and may not be changed or modified in any manner, or released,
discharged, abandoned, or otherwise terminated unless in writing and signed
by the duly authorized officers and representatives of the parties.
13.4 Force Majeure.
(a) Neither party shall be held liable to the other party nor be deemed to
have defaulted under or breached this AGREEMENT for failure or delay
in performing any obligation under this AGREEMENT when such failure or
delay is caused by or results from causes beyond the reasonable
control of the affected party including, but not limited to,
embargoes, war, acts of war (whether war be declared or not), acts of
terrorism, insurrections, riots, civil commotions, strikes, lockouts
or other labor disturbances, fire floods, or other acts of God, or
acts, omissions or delays in acting by any governmental authority or
the other party. The affected party shall notify the other party of
such force majeure circumstances as soon as reasonably practical, and
shall promptly undertake all reasonable efforts necessary to cure such
force majeure circumstances.
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DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
(b) During the duration of any Force Majeure, NASTECH shall allocate
MATERIALS and/or resources required for the MANUFACTURE of PRODUCT in
the manner set forth in Section 2.2.
(c) The requirements that all reasonable efforts be made to eliminate,
cure or overcome a Force Majeure condition shall not require the
settlement of strikes or labor controversies by acceding to the
demands of the opposing party or parties.
13.5 Insurance. NASTECH agrees to maintain, during the TERM and for [***]
thereafter, at its own expense, commercial general liability insurance,
including blanket contractual liability, products liability and products
completed operations coverages, with a minimum limitation of U.S.$ [***]
per occurrence and U.S.$ [***] annual aggregate upon execution of this
AGREEMENT. Workers Compensation will provide no-fault statutory benefits as
prescribed by the LAW of the State or Countries in which work is performed
to NASTECH's employees due to a job-related injury resulting from an
accident or occupational disease. Employers' Liability is to be provided in
the minimum amount of $[***] per occurrence for all sums that the insured
becomes legally obligated to pay as damages because of bodily injury by
accident or disease sustained by the insured arising out of and in the
course of employment. NASTECH shall promptly submit to P&GP, from an
insurer with an A.M. Best rating of A- or better or otherwise acceptable to
P&GP, a certificate of insurance evidencing that the required insurance is
in force and effect. Such certificate shall provide that not less than
thirty (30) days' advance notice, in writing, shall be given to P&GP of any
cancellation, termination or material alteration of such insurance
coverages.
13.6 Headings. The Article and Section headings in this AGREEMENT are solely for
the convenience and reference of the parties hereto and are not intended to
be descriptive of the entire contents of, or to affect, any of the terms or
provisions hereof or their interpretation.
13.7 No Agency. Nothing contained herein shall be deemed to establish or
otherwise create a relationship of principal and agent between NASTECH and
P&GP, or P&GP and NASTECH, it being understood that each of NASTECH and
P&GP is an independent contractor who cannot and shall not be deemed an
agent of the other or its AFFILIATES for any purpose whatsoever. Neither
NASTECH nor any of its agents or employees shall have any right or
authority to assume or create any obligation of any kind, whether express
or implied, on behalf of P&GP or its AFFILIATES or have any authority to
bind P&GP or its AFFILIATES in any way without the prior written approval
of P&GP. Neither P&GP nor any of its agents or employees shall have any
right or authority to assume or create any obligation of any kind, whether
express or implied, on behalf of NASTECH or its AFFILIATES or have any
authority to bind NASTECH or its AFFILIATES in any way without the prior
written approval of NASTECH.
13.8 Notice. Any notice or request required or permitted to be given in
connection with this AGREEMENT shall be deemed to have been sufficiently
given if personally delivered, sent by pre-paid registered or certified
airmail, or by facsimile with electromechanical
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DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
confirmation of delivery, to the intended recipient at its address set
forth above or to such other business address as may have been furnished in
writing by the intended recipient to the sender. Any such notice shall be
deemed to have been given: (a) when delivered if personally delivered or
sent by facsimile on a business day (or if delivered or sent on a
non-business day, then on the next business day); (b) on the business day
after dispatch if sent by nationally-recognized overnight courier; or (c)
on the fifth (5th) business day following the date of mailing if sent by
mail. Any required notice shall be given in English.
Notice to NASTECH shall be addressed to:
Nastech Pharmaceutical Company Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attention: Office of the Chief Executive Officer and President
Facsimile No.: [***]
With a copy to:
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx Xxxxxx
Facsimile No.: [***]
Notice to P&GP shall be addressed to:
Vice President - North American Pharmaceuticals
Procter & Xxxxxx Pharmaceuticals, Inc.
0000 Xxxxx Xxxxxxxxxx Xxxx
Xxxxx, XX 00000
Facsimile No.: [***]
with a copy to:
Associate General Counsel - Pharmaceuticals
Procter & Xxxxxx Pharmaceuticals, Inc.
0000 Xxxxx Xxxxxxxxxx Xxxx
Xxxxx, XX 00000
Facsimile No.: [***]
Either party may change its address by giving written notice to the other
party.
13.9 Prevailing Language. The AGREEMENT shall be prepared and executed in
English and if translated into a language other than English for any
purpose, the English version shall in all events prevail and be paramount
in the event of any differences, questions or disputes concerning the
meaning, form, validity, or interpretation of this AGREEMENT.
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DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
13.10 Severability. In the event any one or more of the provisions contained in
this AGREEMENT should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby, unless the absence of the invalidated provision(s) adversely
affect the substantive rights of the parties. The parties shall in such an
instance use their best efforts to replace the invalid, illegal or
unenforceable provision(s) with valid, legal and enforceable provision(s)
which, insofar as practical, implement the purposes of this AGREEMENT.
13.11 Modification and Waiver. No amendment, modification or alteration of the
terms of this AGREEMENT shall be binding unless the same shall be in
writing and duly executed by the parties hereto, except that any of the
terms or provisions of this AGREEMENT may be waived in writing at any time
by the party which is entitled to the benefits of such waived terms or
provisions. No waiver of any of the provisions of this AGREEMENT shall be
deemed to or shall constitute a waiver of any other provision hereof
(whether or not similar). No delay on the part of any party exercising any
right, power or privilege hereunder shall operate as a waiver thereof.
13.12 Counterparts. This AGREEMENT may be executed in one or more counterparts,
each of which shall for all purposes be deemed an original and all of which
shall constitute one and the same AGREEMENT.
13.13 Waiver of Rule of Construction. Each party has had the opportunity to
consult with counsel in connection with the review, drafting and
negotiation of this AGREEMENT. Accordingly, the rule of construction that
any ambiguity in this AGREEMENT shall be construed against the drafting
party shall not apply.
13.14 Successors and Assigns. The terms and conditions of this AGREEMENT shall
be binding upon, and shall inure to the benefit of, the parties hereto and
their respective successors and permitted assigns.
13.15 Audit Rights. NASTECH's records, which shall include, but not be limited
to, accounting records, time sheets, written policies and procedures, test
results, reports, correspondence, memoranda and any other documentation
relating to the performance of this AGREEMENT, shall be open to inspection
and subject to audit and/or reproduction, during normal working hours, by
P&GP or its authorized representative to the extent necessary to adequately
evaluate claims submitted by NASTECH (including NASTECH's calculation of
the SUPPLY PRICE), required by governmental authorities or reasonably
necessary for any other valid business purpose. NASTECH shall preserve such
records, except for MANUFACTURING records addressed in Section 7 herein,
for a period of [***] after the end of the TERM or for such longer period
as may be required by law. For the purpose of such audits, inspections,
examinations and evaluations, P&GP or its authorized representative shall
have access to such records beginning on the EFFECTIVE DATE and continuing
until [***] after the satisfaction of NASTECH'S obligations or P&GP's last
payment of the SUPPLY PRICE under this AGREEMENT. In addition, NASTECH
shall provide adequate and appropriate workspace
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DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
for P&GP or its authorized representatives to conduct such audit. P&GP or
its authorized representative shall give NASTECH reasonable advanced notice
of an intent to audit.
13.16 COMPLIANCE WITH LAWS AND SAFETY MEASURES
13.16.1 Laws. NASTECH represents, warrants and covenants that NASTECH is and
shall at all times, be in full compliance with all applicable governmental,
legal, regulatory and professional requirements, including without
limitation all applicable laws, and material codes, regulations, rules,
ordinances, judgments, orders and decrees, including, without limitation,
those related to Intellectual Property rights, fair trade and anti trust,
customs, immigration, labor, employment, working conditions, worker health
and safety, branding and labeling, adulteration and contamination, board of
health and environmental matters (collectively "LAWS").
13.16.2 Licenses, Consents and Permits. NASTECH represents, warrants and
covenants that NASTECH has obtained and maintains in full force and effect
all licenses, consents, permits, approvals, authorizations and the like
required to lawfully perform NASTECH'S obligations under this AGREEMENT.
NASTECH (i) shall promptly notify P&GP if NASTECH receives any notice,
demand, summons or complaint from any governmental or regulatory authority,
agency or other body relating to the PRODUCT and parts thereof or NASTECH'S
performance in accordance with this AGREEMENT, and (ii) shall take all
steps, at NASTECH'S expense, to remedy and resolve any issues raised
therein as promptly as practicable.
13.16.3 NASTECH Diversity Program. If NASTECH has operations (production, sales,
administrative) physically located in the United States of America which
are involved in NASTECH's performance under this AGREEMENT, then NASTECH is
expected to develop procurement and contracting strategies aimed at meeting
the goals of P&GP's minority and women-owned business development program
(a.k.a. Supplier Diversity Program). Such strategies shall include sourcing
methods, goals, reporting and efforts to encourage sub-contractors' use of
minority and women-owned vendors. NASTECH shall use its commercially
reasonable efforts to seek to achieve continuous improvement in the use of
such minority and women-owned vendors. NASTECH shall report to P&GP the
amount of such minority and women-owned vendor spending quarterly.
13.16.4 Child Labor and Forced Labor. NASTECH warrants that it does not employ
children, prison labor, indentured labor, bonded labor or use corporal
punishment or other forms of mental and physical coercion as a form of
discipline. Moreover, NASTECH agrees that it will not conduct business with
vendors employing children, prison labor, indentured labor, bonded labor or
who use corporal punishment or other forms of mental and physical coercion
as a form of discipline. In the absence of any national or local law, P&G
and NASTECH agree to define "child" as less than 15 years of age. If local
minimum age law is set below 15 years of age, but is in accordance with
exceptions under International Labor Organization (ILO) Convention 138, the
lower age will apply. P&GP has the right to audit NASTECH'S premises to
ensure compliance with this paragraph.
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DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
IN WITNESS WHEREOF, the parties have caused this AGREEMENT to be executed
by their duly authorized representatives as of the date first above written.
PROCTER & XXXXXX PHARMACEUTICALS, INC.
By: /s/ Xxxxx X. Xxxx
------------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President - Product Supply
Procter & Xxxxxx Pharmaceuticals,
Inc.
NASTECH PHARMACEUTICAL COMPANY INC.
By: /s/ Xxxxxx X. Xxxx
-----------------------------------
Name: Xxxxxx X. Xxxx
Title: Chief Executive Officer and
President
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DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
SCHEDULE 1.10
[***]
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DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
SCHEDULE 1.18
[***]
[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
SCHEDULE 1.26
SPECIFICATIONS
[***]
[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
SCHEDULE 4.1.1
[***]
[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
EXHIBITS 3.2
[***]
