SUPPLY
AND
LICENSE
AGREEMENT
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
TABLE OF CONTENTS
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1. Definitions...................................................... 2
1.2 "Collaboration Product"..................................... 2
1.3 "Standard Manufacturing Cost"............................... 2
1.4 "Supply Territory".......................................... 5
1.5 "Supply Price" or "SP"...................................... 5
2. Purchase and Sale of Products.................................... 5
3. Licenses......................................................... 9
4. Forecasts and Orders............................................. 10
5. Acceptance of Products; Corrective Actions....................... 10
6. Representations and Warranties................................... 14
7. Inspection of Premises........................................... 15
8. Labeling; Artwork; Proprietary Rights............................ 16
9. Indemnification.................................................. 16
10. Term............................................................. 18
11. Termination...................................................... 18
12. Confidentiality.................................................. 19
13. Manufacturing Facilities......................................... 19
14. Taxes............................................................ 21
15. Relationship of the Parties...................................... 21
16. Publicity........................................................ 21
17. Construction..................................................... 21
18. Entire Agreement................................................. 22
19. Headings......................................................... 23
20. Notices.......................................................... 23
21. Failure to Exercise.............................................. 23
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
22. Assignment....................................................... 23
23. Force Majeure.................................................... 24
24. Severability..................................................... 24
25. Electronic Copies................................................ 25
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
SUPPLY AND LICENSE AGREEMENT
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This Agreement (the "Agreement") is made as of the 1st day of August, 1996,
("Effective Date") by and between The X. X. Xxxxxxx Pharmaceutical Research
Institute, a division of Ortho Pharmaceutical Corporation, having a business
address at U. X. Xxxxx 000, Xxxxxxx, Xxx Xxxxxx 00000-0000 (hereinafter "PRI" or
"Buyer"), and Alkermes, Inc., and Alkermes Controlled Therapeutics, Inc., both
having a business address at 00 Xxxxxx Xxxxxx, Xxxxxxxxx, XX 00000-0000
(hereinafter collectively referred to as "ACT" or "Seller"). ACT and PRI may
each be referred to herein as a "Party" or, collectively, as "Parties".
The Parties refer to the Development and License Agreement of even date
herewith by and between the Parties (hereinafter the "Development and License
Agreement"). The capitalized terms defined therein, particularly in Article I
thereof, have the same meanings herein. Certain definitions are repeated as a
matter of convenience only.
In consideration of the mutual promises, covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
1. DEFINITIONS.
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When used herein, the following capitalized terms shall have the meanings
specified below:
1.2 "COLLABORATION PRODUCT" means a Product comprised of a
Collaboration Delivery System and a [XXXXXXXXXX].
1.3 "STANDARD MANUFACTURING COST" shall include the following:
1) Material Cost shall mean the prices paid for raw material
components and purchased finished goods which are purchased from outside vendors
a well as any freight and duty where applicable.
2) Standard Material Cost includes the quantity of the
components included in the xxxx of material times the purchase price and the
waste factor (i.e., scrap percentage) included in the xxxx of materials. It also
includes the normal casted quality assurance sample quantity which is included
in the xxxx of materials. Raw material prices shall be adjusted on an annual
basis by the purchasing department.
3) Direct Labor Costs shall mean the standard labor hours
required for an operation according to standard operating procedures multiplied
by the direct labor rate for work centers within the relevant manufacturing
operating unit.
4) Overhead Costs shall mean other costs associated with the
operating unit(s) manufacturing a
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
Collaboration Product, provided, however, that such Overhead Costs shall exclude
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costs associated with unused manufacturing capacity and any administrative
costs other than indirect labor of the manufacturing department specifically
attributable to the Collaboration Product in question. Overhead Costs shall
include expenses associated with quality assurance, manufacturing and
engineering associated with the operating unit(s) manufacturing a Collaboration
Product and shall include depreciation and property taxes associated with the
plant(s) manufacturing a Collaboration Product. These costs shall be allocated
to each product line in such operating unit(s) or plant(s), whichever is
applicable, based on specific criteria consistent with the standard operating
procedures for each Product and work center overhead rates of the Party
performing the work determined and allocated in a manner consistently applied
within and across its operating units.
5) Manufacturing Variances shall include:
(A) Purchase Price Variance shall mean the difference
between the actual price paid the vendor versus the standard cost of such
material, times the quantity received.
(B) Spending Variance shall mean the difference between
actual department spending and the budgeted spending included in Standard
Manufacturing Cost for the relevant manufacturing operating unit.
(C) Absorption volume variances shall mean the difference
between actual product hours earned (or units
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
produced) and the hours budgeted for the period (or projected production units
used) in the development of Standard Manufacturing Costs times the standard
labor and overhead content of those units.
(D) Material usage shall mean the difference between the
actual quantity of component raw materials or work-in-process used in the
production of work-in-process or finished goods versus the standard quantity
included in the xxxx of materials times the standard cost of the component or
work-in-process item.
(E) Rework shall mean the additional standard cost of
components or work-in-process items used to turn rejected inventory into usable
inventory. No labor or overhead rate is assigned to rework orders, only the
additional value of the inventory which is issued to the other. Additionally, no
production/absorption credit is generated for rework orders since the credit was
already generated the first time the production occurred.
The purchase of any capital item reasonably required by ACT to manufacture
shall be ACT's obligation and responsibility.
ACT's costs associated with failed batches or batches that fail to meet
Product Specifications, except where such failure is attributable to PRI, shall
not be included in the definition of Standard Manufacturing Cost.
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
In the event that ACT, at its option, does not implement a standard costing
system, then the Parties will agree to a definition for Standard Manufacturing
Cost which makes reasonable allowances for the above factors and meets generally
accepted accounting procedures.
1.4 "SUPPLY TERRITORY" means the world.
1.5 "SUPPLY PRICE" OR "SP" will be calculated on a unit basis for
any year following the Date of First Sale anywhere on a Product-by-Product basis
as follows:
SP\\year x\\ = (BMP\\year x\\ - CSP\\year x\\)[XXXX] + CSP\\year x\\
where
BMP = Bench Xxxx Xxxxx, which is the lower of [XXXXXXXX] of Net Sales
adjusted to a unit basis in the first year of sale or the Calculated Supply
Price in the first year of sale and adjusted annually thereafter according to
the Purchase Price Index as published in the Federal Register.
CSP = Calculated Supply Price, which is Standard Manufacturing Cost +
[XXXXXXX], adjusted to a unit basis.
2. PURCHASE AND SALE OF PRODUCTS.
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(A) Beginning no more than 3 months after regulatory approval to
market Collaboration Product anywhere, Seller shall supply Buyer with those
quantities of Collaboration Products as
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
ordered by Buyer pursuant to this Agreement and Buyer shall order from Seller no
less than 100% of Buyer's needs from Seller in the Supply Territory for 2 years
from the Date of First Sale anywhere. The Products will conform to the
specifications (which specifications may include standard operating procedures
for product production and quality acceptance procedures) set forth by the
Seller for its own goods (the "Product Specifications"). Once Product
Specifications are established, any changes, modifications or revisions must be
approved by Buyer and Seller, which approval will not be unreasonably withheld.
Buyer may elect, upon 90 days written notice to Seller, to perform itself or
have performed certain processes relating to the Collaboration Product, such as
packaging or sterilization. Sellers requirements of [XXXXXXXXXXXXXXXXXXXXX] to
supply Buyer will be supplied to Seller at no cost to Seller, except that Seller
shall bear the risk of loss of [XXXXXXXXXXXXXXXXXXXXX] during storage, bulk
handling and transportation beginning at such time as the active is received on
their premises and that Buyer and Seller shall share the risk of loss of [XXXXXX
XXXX] in processing or formulating Collaboration Product according to the terms
of Paragraph 5(a) below. Such active will conform to specifications as agreed to
and necessary to permit its formulation into Collaboration Product and Buyer
will provide a certificate of analysis confirming conformity to specifications.
During the above period of two years from the Date of First Sale
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
anywhere, if Seller is unable to supply Buyer with 100% of its requirements of
Collaboration Product for a period exceeding 2 months from the date on which
Buyer is otherwise entitled to such supply, then Buyer is free to manufacture
Collaboration Product or have a Third Party manufacture Collaboration Product
regardless of whether such failure to supply is a breach of this Agreement by
Seller.
(B) On a unit basis, the purchase price for the Collaboration Product
shall be the Supply Price, but not less than the Standard Manufacturing Cost +
[XXXXXXXXXXX]. For any year, Collaboration Product will be provisionally paid
for by Buyer at the prior year's Standard Manufacturing Cost + [XXXXXXXXXXXX].
At each year end, the Supply Price will be calculated and the Parties will
reconcile any differences between the Supply Price and the provisional payment.
For the first year's sales, provisional payment will be based on Seller's good
faith estimate of Standard Manufacturing Cost + [XXXXXXXXXXXXX]. In no event,
regardless of the above, will the Supply Price, on a unit basis for a given
accounting year of the Buyer, exceed [XXXXXXXXXXXX] of Net Sales on a unit
basis, for that accounting year. Seller shall use reasonable efforts to keep its
Standard Manufacturing Costs down without sacrificing product quality. If Buyer
assumes responsibility for any of the processes related to the Collaboration
Product pursuant to Section 2(a) or if the deliverable Collaboration Product is
otherwise modified from that which was used as a basis
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
to calculate BMP\\year 1\\ then BMP\\year x\\ shall be modified accordingly to
reflect the increased or decreased cost.
(C) The prices charged by Seller to Buyer shall include all delivery
costs for F.O.B. the site of the last process performed by Seller. Seller will
pack all Collaboration Products ordered hereunder in a manner suitable for
shipment and to enable such to withstand the effects of shipping, including
handling during loading and unloading. Payment terms shall be net 30 days,
payable in U.S. Dollars for each respective shipment of Collaboration Products
from Buyer's receipt of such Collaboration Products (and applicable invoices
therefor), provided that such Collaboration Products comply with the terms of
this Agreement. Buyer's obligation to pay within 30 days hereunder will not be
delayed by Buyer's time period to determine conformity to Product Specifications
below.
(D) Buyer shall have the right with reasonable notice to Seller, at
its own expense, to nominate an independent certified public accountant
acceptable to and approved by the Seller, said approval not to be unreasonably
withheld, who shall have access to the Seller's records during reasonable
business hours for the purpose of verifying the Supply Price payable for any
period within the preceding two (2) years as provided for in this Agreement.
This right may not be exercised more than once in any calendar year, and said
accountant shall disclose to the Buyer requesting the audit, only information
relating solely to
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
the accuracy of the Supply Price. If any audit or examination shall reveal a
deficiency or excess of any payment due, the Party owing the deficiency or
excess shall make payment to the other Party of such deficiency or excess plus
customary interest for the period of such deficiency or excess. Payment of such
sums shall be made within fifteen (15) days following the report of the auditor
of the monies owed. In the event that such an audit or examination shall reveal
an excess of any payment due in an amount equalling or exceeding [XXXXXXXXXXXX]
accounting of the undisputed payments or expenditures, the Seller shall
reimburse the Buyer for the reasonable costs of such audit.
3. Licenses.
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(A) PRI hereby grants to ACT a non-exclusive, license fee free and
royalty free license with no right to grant sublicenses, under ACT Patents
(under which PRI is an exclusive licensee) and under PRI Patents to make
Collaboration Products in the United States or European Union as ordered by
Buyer under this Agreement.
(B) PRI hereby grants to ACT a non-exclusive, license fee free and
royalty free license with no right to grant sublicenses, under ACT Know-How and
PRI Know-How to make Collaboration Products in the United States or European
Union as ordered by Buyer under this Agreement.
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
4. FORECASTS AND ORDERS.
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(A) Buyer shall provide Seller with a non-binding, 12-month rolling
forecast of Buyer's expected requirements for Collaboration Products in the
Supply Territory. The first three months of any forecast shall be a binding
purchase order for Collaboration Products, which shall be placed in writing at
least 90 days prior to the desired date of delivery. The Parties acknowledge
that Buyer is not obligated to buy any specific amount of Products under this
Agreement, except for the quantities which Buyer shall actually order through
binding purchase orders.
(B) PRI shall place binding purchase orders for Collaboration Products
with accompanying schedules of delivery from time to time pursuant to this
Agreement. ACT shall deliver such binding purchase orders +/- 10 business days
from the specified delivery date and +/- 7% of the ordered quantity specified in
the binding purchase order.
(C) To the extent of any conflict or inconsistency between this
Agreement and any purchase order, purchase order release, confirmation,
acceptance or any similar document, the terms of this Agreement shall govern.
5. ACCEPTANCE OF PRODUCTS; CORRECTIVE ACTIONS.
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(A) Delivery of any Collaboration Product by Seller to Buyer shall
constitute a certification by Seller that the
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
Collaboration Product has been tested and has been found to conform fully to the
Product Specifications. After delivery of a shipment of any Collaboration
Products to Buyer, Buyer shall have 45 days to examine the Collaboration
Products to determine if they conform to the Product Specifications, and, on the
basis of such examination, to accept or reject such shipment. Any claims for
failure to so conform to Product Specifications ("Claims") shall be made by
Buyer in writing to Seller, indicating the nonconforming characteristics of the
Collaboration Products and establishing that Buyer appropriately handled and
stored the Collaboration Product before and during testing. Buyer shall have no
obligation to pay for Collaboration Products that are subject to Claims.
However, if payment has already been made by Buyer, then as promptly as possible
after the submission of a Claim by Buyer, Seller shall, at Buyer's option,
provide Buyer with (i) a refund of the full amount paid by Buyer for such
Products, (ii) a credit against future xxxxxxxx equal to the full amount paid by
Buyer for such Collaboration Products or (iii) replacement Collaboration
Products. Seller shall pay for all shipping costs of returning Collaboration
Products that are the subject of Claims. Seller shall bear the risk of loss for
such Collaboration Products, beginning at such time as they are taken at Buyer's
premises for return delivery. Buyer and Seller shall share the risk of loss of
[XXXXXXXXXXXXXXXXXXXXXXX] in processing or formulating Collaboration Product,
whether such loss is due to
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
nonconforming Product or otherwise, as follows: in the first two years
following the Date of First Sale of any Collaboration Product, Buyer will assume
[XXXX] of such cost; in years 3 and 4 following the Date of First Sale of any
Collaboration Product, Buyer will assume [XXXX] of such cost and Seller will
assume [XXXX] of such cost; in years 5 and 6 following the Date of First Sale of
any Collaboration Product, Buyer and Seller will each assume [XXXX] of such
cost; and in year 7 and thereafter following the Date of First Sale of any
Collaboration Product, Buyer will assume [XXXX] of such cost and Seller will
assume [XXXX] of such cost. In regard to risk of loss of [XXXXXXXXXXXXXXXXXXXXX]
in processing or formulating Collaboration Product, Buyer must consent to the
initial batch size employed to make Collaboration Product and to subsequent
changes to such batch size, which consent will not be unreasonably withheld
considering Seller's cost of manufacture.
(B) Any shipment of Collaboration Products for which Buyer shall not
submit a Claim within 45 days of delivery shall be deemed accepted. Upon
acceptance, Buyer shall release Seller from all Claims for non-conformity. The
acceptance by Buyer of such Collaboration Products shall not constitute a waiver
of any rights of Buyer or a release of any obligations of Seller including,
without limitation, the obligations set forth in Section 9(a). In the event
that Buyer makes a Claim that Collaboration Product has not met the Product
Specifications and Seller does not agree, then an independent expert skilled in
the
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
art of analysis (the "Expert) appointed by Seller and reasonably acceptable to
Buyer shall visit the Buyer. The Expert will repeat the analysis of the samples
of the relevant shipment in the presence of the appropriate Seller and Buyer
personnel. After the Expert shall have executed an appropriate Confidentiality
Agreement approved in form and substance by Seller and Buyer, Buyer and Seller
shall supply the Expert with copies of all tests, data, documentation,
standards, etc., that the Expert may reasonably require in connection with such
analysis. The Expert's decision as to whether such lot has met the Product
Specifications shall be final and binding on the Parties. All analytical tests
and techniques performed hereunder shall conform to the Product Specifications
where applicable. All expenses and costs of such expert shall be borne by the
Party whose contention is finally rejected by the Expert.
(C) Buyer shall be responsible for all costs and expenses of any
Collaboration Product recall, customer notice, restriction, change, corrective
action or market action or any Product change except as provided herein. In the
event any governmental agency having jurisdiction shall request or order, or if
Buyer shall reasonably determine to undertake, any corrective action with
respect to Collaboration Products supplied hereunder, including any
Collaboration Product recall, customer notice, restriction, change, corrective
action or market action or any product change, and the cause or basis of such
corrective
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
action is primarily attributable to a breach by Seller of any of its warranties,
guarantees, representations, obligations or covenants contained herein, then
Seller shall be liable, and shall reimburse Buyer for the reasonable costs of
such action including the cost of any Collaboration Product affected thereby
whether or not such particular Collaboration Product shall be established to be
in breach of any warranty by Seller hereunder.
6. REPRESENTATIONS AND WARRANTIES.
------------------------------
Seller represents and warrants to Buyer that, at the time of manufacture,
all Collaboration Products supplied in connection with this Agreement shall be
manufactured and provided by Seller (i) in accordance and conformity with the
Product Specifications and in compliance with this Agreement and (ii) in
compliance with all applicable federal, state or municipal statutes, laws, rules
or regulations, including those relating to the environment, food or drugs and
occupational health and safety, including, without limitation, those enforced or
promulgated by the United States Food and Drug Administration (including,
without limitation, compliance with then current Good Manufacturing Practices).
Seller further represents and warrants to Buyer that the performance of its
obligations under this Agreement will not result in a violation or breach of,
and will not conflict with or constitute a default under its Articles of
Incorporation or corporate bylaws or any agreement, contract, commitment or
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
obligation to which Seller or any of its Affiliates is a party or by which it is
bound. The foregoing warranties are exclusive and in lieu of all other
warranties written, oral or implied. THERE ARE NO WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.
7. INSPECTION OF PREMISES.
----------------------
Buyer shall have the right, upon reasonable notice to Seller and during
regular business hours, to inspect and audit the facilities being used by Seller
for production of the Collaboration Products to assure compliance by Seller with
applicable rules and regulations and with other provisions of this Agreement.
Seller shall, within ten business days of any written notice of any deficiencies
discovered during such inspection, remedy any deficiencies which may be noted in
any such audit, and the failure by Seller to remedy any such deficiencies within
such ten day period shall be deemed a material breach of this Agreement unless
waived in writing. Seller acknowledges that the provisions of this Article
granting Buyer certain audit rights shall in no way relieve Seller of any of its
obligations under this Agreement, nor shall such provisions require Buyer to
conduct any such audits.
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
8. LABELING; ARTWORK; PROPRIETARY RIGHTS.
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(A) Buyer shall have the right to determine the appearance and text
of all labeling used in connection with the Collaboration Products; provided
that Seller shall have the opportunity to review and comment on any reference to
or use of Seller's name or trademarks.
(B) Seller acknowledges that Buyer is the exclusive owner of and has
all rights to its patents, trademarks, copyrights, plans, ideas, names, slogans,
artwork and all other intellectual property that appear on or are otherwise used
in connection with the packaging, marketing and sale of Collaboration Products.
9. INDEMNIFICATION.
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(A) Seller shall indemnify and hold harmless Buyer and its
Affiliates and their officers, directors and employees from and against any and
all claims, losses, damages, judgements, costs, awards, expenses (including
reasonable attorneys' fees) and liabilities of every kind (collectively,
"Losses") arising out of or resulting from any breach by Seller of any of its
warranties, guarantees, representations, obligations or covenants contained
herein.
(B) Buyer shall indemnify and hold harmless Seller and its
Affiliates and their officers, directors and employees from and against any and
all Losses arising out of or resulting from
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SECURITIES AND EXCHANGE COMMISSION.
any breach by Buyer of any of its obligations or covenants contained herein.
(C) Each indemnified party agrees to give the indemnifying party
prompt written notice of any matter upon which such indemnified party intends to
base a claim for indemnification (an "Indemnity Claim") under Article 9. The
indemnifying party shall have the right to participate jointly with the
indemnified party in the indemnified party's defense, settlement or other
disposition of any Indemnity Claim. With respect to any Indemnity Claim
relating solely to the payment of money damages and which could not result in
the indemnified party's becoming subject to injunctive or other equitable relief
or otherwise adversely affect the business of the indemnified party in any
manner, and as to which the indemnifying party shall have acknowledged in
writing the obligation to indemnify the indemnified party hereunder, the
indemnifying party shall have the sole right to defend, settle or otherwise
dispose of such Indemnity Claim, on such terms as the indemnifying party, in its
sole discretion, shall deem appropriate, provided that the indemnifying party
shall provide reasonable evidence of its ability to pay any damages claimed and
with respect to any such settlement shall have obtained the written release of
the indemnified party from the Indemnity Claim. The indemnifying party shall
obtain the written consent of the indemnified party, which shall not be
unreasonably withheld, prior to ceasing to
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
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defend, settling or otherwise disposing of any Indemnity Claim if as a result
thereof the indemnified party would become subject to injunctive or other
equitable relief or the business of the indemnified party would be adversely
affected in any manner.
(D) PRI shall indemnify and hold ACT harmless from and against any
and all liabilities, claims, damages, costs, expenses or money judgments which
result from the manufacture, use, promotion and sale of Products under this
Agreement and in regard to which, ACT is not in breach of this Agreement.
(E) This Article 9 shall survive any termination of this Agreement.
10. TERM. This Agreement shall commence on the Effective Date and,
----
unless sooner terminated as provided herein, shall continue in effect to
termination of the License and Development Agreement between the Parties of even
date herewith.
11. TERMINATION.
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(A) This Agreement may be terminated earlier than as provided by
Article 10, by either party, if the other party shall materially breach or
materially fail in the observance or performance of any representation,
warranty, guarantee, covenant or obligation under this Agreement or the License
and Development Agreement of even date herewith, and if such material breach or
material failure remains uncured for {sixty (60)} days after notice
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thereof is given to such other party by the party seeking to terminate.
(B) Notwithstanding the termination of this Agreement for any
reason, each party hereto shall be entitled to recover any and all damages which
such party shall have sustained by reason of the breach by the other party
hereto of any of the terms of this Agreement. Termination of this Agreement for
any reason shall not release either party hereto from any liability which at
such time has already accrued or which thereafter accrues from a breach or
default prior to such expiration or termination, nor affect in any way the
survival of any other right, duty or obligation of either party hereto which is
expressly stated elsewhere in this Agreement to survive such termination. In the
case of a termination under Section 11(a) above, the non-defaulting party may
pursue any remedy available in law or in equity with respect to such breach.
12. CONFIDENTIALITY. The Parties refer to the confidentiality provisions
---------------
of Article VIII of the Development and License Agreement between the Parties of
even date herewith.
13. MANUFACTURING FACILITIES. Seller will establish a first
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manufacturing facility in the United States. To minimize the likelihood of a
supply deficiency with respect to a Collaboration Product, by the end of Phase
III of a Collaboration
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Product, Seller will demonstrate an ability, in a detailed plan, to supply
Collaboration Product within 3 months of supply disruption, whether such supply
disruption is due to destruction of ACT's manufacturing facility, a force
majeure under Article 23, or otherwise. In the event that either Party can show
both feasibility and economic savings, the 3 month requirement for supply, in
the event of supply disruption, may be extended based on maintaining adequate
stocks of Collaboration Product. Where the plan calls for transferring
manufacture from one manufacturing facility to another manufacturing facility of
a Third Party, then such Third Party will be an industry recognized reputable
manufacturer having experience in making injectable delivery systems and PRI
will provided the necessary contingent licenses. Buyer will reimburse the
actual cost (or its allocated portion of the actual cost) of establishing a
second manufacturing facility. Seller shall register its manufacturing facility
or facilities for Collaboration Products with the Federal Food and Drug
Administration (the "FDA") or, the equivalent appropriate regulatory authority
in a country of the European Union, and permit representatives of the FDA or
such regulatory authority to inspect any such facility upon request. Buyer is
responsible for obtaining FDA approval for the Collaboration Products in the
Supply Territory.
20
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
14. TAXES. Buyer shall assume liability for all taxes, excises or other
-----
charges which relate to the Collaboration Products and are imposed by any local,
state or federal authority after title to the Collaboration Products passes to
Buyer. Buyer further agrees to indemnify Seller against any and all such
liability for taxes as well as any reasonable legal fees or costs incurred by
Seller in connection therewith. To the best of Seller's knowledge, there are no
such taxes, excises or other charges now in effect.
15. RELATIONSHIP OF THE PARTIES. The relationship of Buyer and Seller
---------------------------
established by this Agreement is that of independent contractors, and nothing
contained herein shall be construed to (i) give either party any right or
authority to create or assume any obligation of any kind on behalf of the other
or (ii) constitute the parties as partners, joint venturers, co-owners or
otherwise as participants in a joint or common undertaking.
16. PUBLICITY. The Parties refer to the publicity provisions of Article
---------
XVII of the Development and License Agreement between the Parties of even date
herewith.
17. CONSTRUCTION. This Agreement shall be governed by, and shall be
------------
construed in accordance with, the laws of the State of New York. Any
controversy or claim arising out of or relating to
21
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
this Agreement, or the parties' decision to enter into this Agreement, or the
breach thereof, shall be settled by arbitration per Article XIII of the
Development and License Agreement. This Article will survive termination of
this Agreement.
18. ENTIRE AGREEMENT. It is the mutual desire and intent of the Parties
----------------
to provide certainty as to their future rights and remedies against each other
by defining the extent of their mutual undertakings as provided herein. The
Parties have in this Agreement incorporated all representations, warranties,
covenants, commitments, and understandings on which they have relied in entering
into this Agreement and, except as provided for herein, neither Party has made
any covenant or other commitment to them concerning its future action.
Accordingly, this Agreement and all Exhibits attached hereto (a) constitutes the
entire agreement and understanding between the Parties with respect to the
matters contained herein, and there are no promises, representations,
conditions, provisions, or terms related thereto other than those set forth in
this Agreement, and (b) supersedes all previous understandings, agreements, and
representations between the Parties, written or oral relating to the subject
matter hereof. The parties hereto may from time to time during the continuance
of this Agreement modify, vary or alter any of the provisions of this Agreement,
but only by an instrument duly executed by all Parties hereto.
22
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
19. HEADINGS. The headings used herein have been inserted for
--------
convenience only and shall not affect the interpretation of this Agreement.
20. NOTICES. Notices are to be given under this Agreement as directed in
-------
Paragraph 15.1 of the Development and License Agreement between the Parties of
even date herewith.
21. FAILURE TO EXERCISE. The failure of either party to enforce at any
-------------------
time for any period any provision hereof shall not be construed to be a waiver
of such provision or of the right of such party thereafter to enforce each such
provision, nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right or remedy. Remedies provided herein are cumulative and not
exclusive of any remedies provided at law.
22. ASSIGNMENT. This Agreement may not be assigned by either Party
----------
without the prior written consent of the other, except that either Party may
assign its rights and/or obligations hereunder to any of its Affiliates.
Subject to the foregoing sentence, this Agreement shall bind and inure to the
benefit of the parties hereto and their respective successors and assigns.
23
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
23. FORCE MAJEURE. Neither Party hereto shall be liable to the other
-------------
Party for any losses or damages attributable to a default in or breach of this
Agreement which is the result of war (whether declared or undeclared), acts of
God, revolution, strike, fire, earthquake, flood, pestilence, riot, enactment or
change of laws and regulations, accident(s), labor trouble, or shortage of or
inability to obtain material, equipment or transport or any other cause beyond
the reasonable control of the Parties, and the performance of obligations
hereunder shall be suspended during, but no longer than, the existence of such
cause. In the event of a force majeure hereunder, Seller will allocate
available capacity among its customers based on allocation of capacity in the
year preceding the force majeure.
24. SEVERABILITY. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, to the extent the economic
benefits conferred by this Agreement to both parties remain substantially
unimpaired, be ineffective to the extent of such invalidity or unenforceability
without rendering invalid or unenforceable the remaining terms and provisions of
this Agreement or affecting the validity or enforceability of any of the terms
or provisions of this Agreement in any other jurisdiction.
24
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
25. ELECTRONIC COPIES. Promptly upon ACT's request, PRI shall deliver or
-----------------
cause to be delivered to ACT or its counsel a formatted diskette containing a
conformed copy of this Agreement that was prepared using PRI's or its counsel's
word processing system.
IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate
originals by their proper officers as of the date and year first above written.
AGREED TO AND ACCEPTED BY:
ALKERMES CONTROLLED THE X. X. XXXXXXX PHARMACEUTICAL
THERAPEUTICS, INC. RESEARCH INSTITUTE, A DIVISION OF
ORTHO PHARMACEUTICAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx Xxxxxx
---------------------- ------------------
Title: Vice President Title: Chairman
Date: November 25, 1996 Date: November 25, 1996
AGREED TO AND ACCEPTED BY:
ALKERMES, INC.
By: /s/ Xxxxxxx X. Pops
-------------------
Title: CEO
Date: November 25, 1996
25
