Exhibit 2.2
INTERIM SUPPLY AGREEMENT
This Interim Supply Agreement (this "Supply Agreement") is made and
entered into as of the 17th day of August, 2001 by and between NeoSan
Pharmaceuticals Inc., a Delaware corporation (the "Company"), and AstraZeneca
LP, a Delaware limited partnership (the "Manufacturer").
WITNESSETH:
WHEREAS, the Company desires to engage the Manufacturer to Manufacture
the Products (as each term is defined below) for the Company on the terms and
conditions set forth herein; and
WHEREAS, the Manufacturer wishes to Manufacture the Products for the
Company on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the Parties agree as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions.
As used in this Supply Agreement, the following terms shall have the
meanings ascribed to them below:
(a) "Active Pharmaceutical Ingredients" means those ingredients
set forth on Exhibit B.
(b) "ADR" has the meaning set forth in Section 13.6 of this Supply
Agreement.
(c) "Affiliate" means, with respect to any Person, another Person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such Person. "Control," and with
correlative meanings, the terms "controlled by" and "under common control with"
means the power to direct or cause the direction of the management or policies
of a Person, whether through the ownership of voting securities, by contract,
resolution, regulation or otherwise. With respect to the Manufacturer,
"Affiliate" shall also mean any corporation or other business entity that
controls, is controlled by or under common control with AstraZeneca plc.
(d) "Approved Reformulation" has the meaning set forth in Section
3.6 of this Supply Agreement.
(e) "CGMP Requirements" means the requirements of the US CGMP.
(f) "Company" has the meaning set forth in the preamble of this
Supply Agreement.
(g) "Confidential Information" has the meaning set forth in
Section 10.1 of this Supply Agreement.
(h) "Damages" has the meaning set forth in Section 11.1 of this
Supply Agreement.
(i) "Dispute" has the meaning set forth in Section 13.6 of this
Supply Agreement.
(j) "Dispute Notice" has the meaning set forth in Section 13.6 of
this Supply Agreement.
(k) "Disputing Party" has the meaning set forth in Section 13.6 of
this Supply Agreement.
(l) "Effective Date" means the date written in the preamble of
this Supply Agreement.
(m) "FDA" means the United States Food and Drug Administration.
(n) "FFDCA" means the Federal Food, Drug, and Cosmetic Act, 21
X.X.X.xx.xx. 301 et seq., as amended.
(o) "Firm Forecast" has the meaning set forth in Section 3.1 of
this Supply Agreement.
(p) "Firm Order" has the meaning set forth in Section 3.1 of this
Supply Agreement.
(q) "Government and Regulatory Authority Approval" means any and
all actions of a Government or Regulatory Authority necessary for the
Manufacture, distribution, promotion, marketing or sale of the Products.
(r) "Government or Regulatory Authority" means any federal, state,
or local (i) government, governmental instrumentality or governmental or other
regulatory or administrative authority, agency, department, board or (ii) court,
tribunal or judicial, administrative or arbitration tribunal.
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(s) "Indemnification Claim Notice" has the meaning set forth in
Section 11.3 of this Supply Agreement.
(t) "Indemnified Party" has the meaning set forth in Section 11.3
of this Supply Agreement.
(u) "Indemnitee" or "Indemnitees" has the meaning set forth in
Section 11.3 of this Supply Agreement.
(v) "IP" has the meaning set forth in Section 12.1 of this Supply
Agreement.
(w) "Law" means any federal, state or local law, statute or
ordinance, or any rule, regulation, or published guidelines promulgated by any
Governmental or Regulatory Authority.
(x) "Liability" means any liability (whether known or unknown,
asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated
or unliquidated, and due or to become due), including any liability for Taxes
(whether arising under Treasury Regulation ss.1.1502-6 or otherwise).
(y) "Long Term Forecast" has the meaning set forth in Section 3.1
of this Supply Agreement.
(z) "Manufacture" and "Manufacturing" means the manufacturing,
processing, formulating, packaging, labeling, holding and quality control and
other testing of the Products to be performed prior to their delivery to Company
by Manufacturer.
(aa) "Manufacturer" has the meaning set forth in the preamble of
this Supply Agreement.
(bb) "Manufacturing Fee" means the fee paid to the Manufacturer
pursuant to Section 5.1 of this Supply Agreement.
(cc) "MVI-12 Bulk" means the MVI-12 bulk solution.
(dd) "MVI-12 Product" has the meaning set forth in Section 3.6 of
this Supply Agreement.
(ee) "Party" means each of Manufacturer and Company.
(ff) "Person" means any natural person, corporation, general
partnership, limited partnership, limited liability company, proprietorship,
other business organization, trust, union, association or Government or
Regulatory Authority.
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(gg) "Product" or "Products" means those pharmaceutical products
listed in Schedule 1.1 hereto, in only those dosage forms and stages of
completion (e.g., bulk or finished package form) specified therein, and any
additional pharmaceutical products included in this definition from time to time
in accordance with Section 3.6 of this Supply Agreement.
(hh) "Quality Agreement" means the Agreement executed between the
Parties on the date hereof, in the form set forth in Exhibit D.
(ii) "Quality Control Unit" shall have the meaning set forth in the
CGMP Requirements.
(jj) "Raw Materials" means any excipient and component materials
used to Manufacture the Products, but excluding the Active Pharmaceutical
Ingredients.
(kk) "Registrations" means the New Drug Applications identified in
Schedule 2.2 hereto.
(ll) "Retained Samples" has the meaning set forth in Section 5.3(b)
of this Supply Agreement.
(mm) "Specifications" means the written specifications and quality
control testing procedures for the Products set forth on Exhibit A, as amended
or supplemented in accordance with Section 2.6 of this Supply Agreement.
(nn) "Supply Agreement" has the meaning set forth in the preamble
hereof.
(oo) "SNDA" has the meaning set forth in Section 3.6 of this Supply
Agreement.
(pp) "Term" has the meaning set forth in Section 8.1 of this Supply
Agreement.
(qq) "Territory" means the United States of America, its
territories and possessions, including but not limited to Washington, D.C. and
Puerto Rico.
(rr) "Third Party Claim" has the meaning set forth in Section 11.4
of this Supply Agreement.
(ss) "US CGMP" means the FDA's current Good Manufacturing Practice
requirements as promulgated under the FFDCA at 21 CFR (parts 210 and 211), and
as further defined by FDA guidance documents, as such may be amended from time
to time.
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ARTICLE II
MANUFACTURE OF PRODUCTS
2.1. Engagement of Manufacturer. Subject to the terms and
conditions of this Supply Agreement, the Company hereby engages the Manufacturer
to Manufacture each of the Products for the Company, and the Manufacturer
accepts such engagement.
2.2. Manufacture, Handling, Sale and Distribution. The Manufacturer
shall Manufacture, hold, handle, ship, sell and, as applicable, distribute all
Products Manufactured pursuant to this Supply Agreement in (a) accordance with
the Registrations, Specifications, the Quality Agreement and this Supply
Agreement and (b) material compliance with the CGMP Requirements and all other
legal requirements applicable to the Manufacturing of Products to be marketed
and sold in the Territory.
2.3. Manufacturer Changes to Manufacturing Process. Subject to the
Quality Agreement and Section 2.2 of this Supply Agreement, the Manufacturer may
not materially change the Manufacturing process of a Product without the prior
written consent of the Company, which consent shall not be unreasonably withheld
or delayed.
2.4. Company Requested Changes. Manufacturer shall make changes as
promptly as practicable to the Specifications or Manufacturing process if
requested in writing by the Company, including, but not limited to, changes to
the existing Products, Active Pharmaceutical Ingredients or Raw Materials
related to the Products; provided, however, that such changes comply with
applicable Law.
2.5. Costs of Changes. Unless otherwise agreed by the Parties, any
and all direct costs associated with changes required or requested by
Manufacturer pursuant to Section 2.3 (including documented internal
administrative costs and the use of external technical consultants by
Manufacturer in effectuating such changes) shall be borne by Manufacturer,
unless such changes are required in order to comply with a change in the CGMP
Requirements or any applicable Law, in which case they will be borne by Company.
Unless otherwise agreed by the Parties, any and all direct costs associated with
all other changes, including changes requested by Company pursuant to Section
2.4 (including documented internal administrative costs and the use of external
technical consultants by Manufacturer in effectuating such changes) shall be
borne by the Company.
2.6. Amendment of Specifications. If a change is made to the
Specifications or Registrations, the Company shall (a) amend the Registration
for such Product, if required, to reflect such change, and (b) obtain required
Government and Regulatory Authority Approval of such amendment, if any.
2.7. Labeling. The Company shall specify all labeling to be used on
each Product and the packaging thereof, including any changes or modifications
to such labels; provided that Company shall ensure that all such labeling
complies with
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applicable Law. The Manufacturer agrees to use the specified labeling (and only
such labeling) on the Products, and not to use such labeling on any other
product. Any change or modification to any Product label shall be implemented by
the Manufacturer (i) as soon as possible if required by Law, or (ii) as soon as
reasonably practicable, but no later than 26 weeks, following Manufacturer's
receipt of notification of such label changes; provided such changes or
modifications meet regulatory requirements. The Company shall reimburse the
Manufacturer for costs incurred in connection with any change made in accordance
with the first sentence of this Section 2.7, including without limitation, the
costs of obsolescence of goods-in-process, packaging materials and supplies, and
finished goods not suitable for marketing in the Territory. Company shall own
all intellectual property on and related to such labeling of products.
2.8. Raw Materials and Active Pharmaceutical Ingredients. The
Manufacturer shall purchase at its own expense and for its own account all Raw
Materials, Active Pharmaceutical Ingredients, packaging components and other
items of any nature whatsoever that the Manufacturer may use to Manufacture the
Products. All right, title and interest in and to these items, and in and to all
work-in-process incorporating these items, shall remain the sole property of the
Manufacturer; provided the Company shall reimburse the Manufacturer for all
costs associated with write-offs, obsolescence and/or destruction of finished
inventory resulting from any change or modification to any Product Manufacturing
process, Specifications, Registration or labeling pursuant to Article II of this
Supply Agreement, but only to the extent such Raw Materials, Active
Pharmaceutical Ingredients and other items relate to or were acquired to satisfy
a Firm Order.
ARTICLE III
FORECASTS, ORDERS AND SHIPMENT
3.1. Forecasting. On the Effective Date, Company shall provide
Manufacturer with a written good faith forecast estimating Company's quarterly
requirements (broken out on a month-to-month basis) of each Product (which shall
include the Company's requirements of MVI-12 Bulk and the other Products as set
forth in Schedule 1.1 hereto) for each eight calendar quarter period commencing
on October 1, 2001. Thereafter, not later than 120 days prior to the
commencement of each subsequent calendar quarter during the Term, Company shall
provide Manufacturer with rolling eight quarter forecasts (broken out on a
month-to-month basis) that shall cover the succeeding eight quarter period (or
the period until the expiration of the Term, if shorter) (such forecast as
updated from time to time, the "Long-Term Forecast"). Except as set forth in
Sections 3.2(a) and 3.2(b), the Long-Term Forecast shall not be binding on
either Party, but the first calendar quarter of a Long-Term Forecast shall be a
"Firm Order" and the second calendar quarter of a Long-Term Forecast shall be a
"Firm Forecast."
3.2. Firm Orders.
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(a) Each Firm Order shall be a binding purchase order for
specified quantities of the Products and shall include specific delivery dates
(which delivery dates shall not exceed three times per month and shall not be on
Saturday, Sunday or holiday); provided, that the initial Firm Order is attached
as Exhibit C hereto and covers the period from the Effective Date until December
31, 2001.
(b) The quantity of each Product specified in any Firm Order for
delivery in any month of a calendar quarter shall not be less than 75% of the
quantities in the applicable Firm Forecast; and in no event shall the
Manufacturer be required in any month to deliver more than (i) 125% of the
quantities in the applicable Firm Forecast or (ii) the maximum quantity of each
Product specified on Schedule 3.2.
(c) Manufacturer shall, within five days after Manufacturer
receives the Firm Order, accept in writing each Firm Order submitted in
accordance with this Section 3.2. Manufacturer shall be obligated to Manufacture
and deliver the specified quantity of Products in accordance with the delivery
schedule set forth in such Firm Order.
3.3. Changes in Orders. The Manufacturer shall exercise its
commercially reasonable efforts to comply with proposed amendments to Firm
Orders that the Company may request after sending a Firm Order to the
Manufacturer, but Manufacturer shall not be liable in any way for its inability
to do so. Firm Orders may be amended only by mutual agreement of the Parties.
3.4. Delivery. The Manufacturer shall deliver the quantities of
each Product set forth in each Firm Order (as amended pursuant to Section 3.3 of
this Supply Agreement) on the delivery date specified therein, at Manufacturer's
facility at Westborough, Massachusetts, on an EXW basis (as defined in Incoterms
2000). Company shall supply, at its own expense, a sufficient number of portable
tanks for transportation and storage of MVI-12 Bulk delivered by Manufacturer.
Company shall be obligated to take delivery of the Products within five days of
any delivery date set forth in a Firm Order. Each delivery shall be accompanied
by a certificate of analysis.
3.5. Notification. If at any time during the term of this Supply
Agreement the Manufacturer believes it will be unable to supply, on a timely
basis, Company with the full quantity of each Product forecasted to be or
actually ordered by Company, the Manufacturer shall promptly notify Company;
provided that such notification shall not relieve Manufacturer of its
obligations under a Firm Order.
3.6. Reformulated Product. Company acknowledges that Manufacturer
is attempting to reformulate on behalf of the Company the Product currently
marketed and sold as "MVI-12" (the "MVI-12 Product") pursuant to pursuant to the
Federal Register Notice published by the FDA on April 20, 2000 [Docket No.
79N-0113]. In the event the FDA approves a supplemental New Drug Application
relating to such reformulation of the MVI-12 Product (the "SNDA"), the
Manufacturer and Company agree that without further action or deed this Supply
Agreement will be amended so that
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all references in this Supply Agreement to the Product shall thereafter also
include the approved reformulation of the MVI-12 Product (the "Approved
Reformulation") in the dosage forms and stages of completion that shall be
agreed by the Parties. The Parties shall use their good faith efforts to
mutually agree on a schedule by which the MVI-12 Product will be discontinued
and the Approved Reformulation, if any, will be Manufactured under this
Agreement, which schedule may include the amendment of any Firm Forecasts and
Firm Orders for the MVI-12 Product in effect at the time of approval of the
SNDA, if agreed by the Parties, and will take into consideration any
requirements by the FDA of the discontinuation of the MVI-12 Product.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1. Representations and Warranties of Manufacturer. Manufacturer
hereby represents and warrants to Company:
(a) Authorization. This Supply Agreement has been duly executed
and delivered by Manufacturer and constitutes the valid and binding obligation
of Manufacturer, enforceable against Manufacturer in accordance with its terms,
except as enforceability may be limited by bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium and other Laws relating to creditors'
rights generally and by general equitable principles. The execution, delivery
and performance of this Supply Agreement have been duly authorized by all
necessary limited partnership action on the part of Manufacturer;
(b) Absence of Conflicts. The execution, delivery and performance
of this Supply Agreement by Manufacturer does not conflict with or constitute a
default under any agreement, instrument or understanding, oral or written to
which they are a party or by which they may be bound, does not conflict with any
provision of any organizational document of Manufacturer and does not conflict
with or violate any applicable law;
(c) Organization and Standing. Manufacturer is a limited
partnership, duly organized, validly existing and in good standing under the
Laws of the State of Delaware;
(d) Power and Authority. Manufacturer has full limited partnership
power and authority to execute, deliver and perform this Supply Agreement and to
consummate the transactions contemplated hereby;
(e) Actions. There are no pending or uncorrected citations or
adverse conditions noted in any inspection of the production facilities to be
employed for the Manufacture of the Products;
(f) Debarrment. None of Manufacturer, its Affiliates or any of its
or their staff, or, to Manufacturer's knowledge, subcontractors or any member of
the
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subcontractors' staff has been disqualified or debarred by the FDA or any other
Government and Regulatory Authority for any purpose;
(g) Charges. None of Manufacturer, its Affiliates or any of its or
their staff, or, to Manufacturer's knowledge, subcontractors or any member of
the subcontractors' staff have been charged with or convicted for conduct
relating to the development or approval, or otherwise relating to the
regulation, of any drug product under the Generic Drug Enforcement Act of 1992
or any other relevant Law; and
(h) Products. All Products delivered pursuant to the terms hereof
by the Manufacturer (or any subcontractor thereof) to Company during the Term
will at delivery be (i) in compliance with this Supply Agreement, the Quality
Agreement, the Registrations and the Specifications and (ii) in substantial
compliance with applicable Law and the CGMP Requirements.
4.2. Warranties of Company. Company hereby warrants and represents
to the Manufacturer:
(a) Authorization. This Supply Agreement has been duly executed
and delivered by Company and constitutes the valid and binding obligation of
Company, enforceable against Company in accordance with its terms except as
enforceability may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium and other Laws relating to or affecting creditors'
rights generally and by general equitable principles. The execution, delivery
and performance of this Supply Agreement have been duly authorized by all
necessary action on the part of Company, its officers and directors;
(b) Absence of Conflict. The execution, delivery and performance
of this Supply Agreement by Company does not conflict with or constitute a
default under any agreement, instrument or understanding, oral or written to
which it is a party or by which it may be bound, does not conflict with any
provision of any organizational document of Company and does not conflict with
or violate any applicable Law;
(c) Organization and Standing. Company is a corporation, duly
organized, validly existing and in good standing under the Laws of Delaware; and
(d) Power and Authority. Company has full corporate power and
authority to execute, deliver and perform this Supply Agreement and to
consummate the transactions contemplated hereby.
4.3. DISCLAIMER OF REPRESENTATIONS AND WARRANTIES. EXCEPT FOR ANY
REPRESENTATIONS AND WARRANTIES AS SET FORTH IN ARTICLE IV OF THIS SUPPLY
AGREEMENT, EACH PARTY HEREBY DISCLAIMS ANY AND ALL REPRESENTATIONS AND
WARRANTIES, WHETHER EXPRESSED OR IMPLIED, WRITTEN OR ORAL, INCLUDING ANY
WARRANTY OF QUALITY, PERFORMANCE, MERCHANTABILITY OR FITNESS FOR A
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PARTICULAR USE OR PURPOSE OR ANY WARRANTY THAT THE PRODUCTS DO NOT OR WILL NOT
INFRINGE THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS.
ARTICLE V
QUALITY ASSURANCE
5.1. Manufacturer's Covenants. Manufacturer hereby covenants during
the Term it shall (and cause its subcontractors to):
(a) have and maintain the necessary expertise, personnel,
facilities, permits and equipment to Manufacture the Products in accordance
with, and to perform its other obligations arising under or out of, this Supply
Agreement;
(b) operate and maintain its premises, plant and machinery,
equipment and procedures related to the Products in compliance with applicable
CGMP Requirements;
(c) perform its obligations arising under or out of this Supply
Agreement (i) in substantial compliance with applicable Laws and CGMP
Requirements; and (ii) in compliance with the Quality Agreement, the
Registrations and the Specifications;
5.2. Company's Covenants. Company hereby covenants during the Term
that it shall hold, store, handle, ship, deliver, distribute and/or sell the
Products (i) in substantial accordance with applicable CGMP Requirements and
applicable Laws; and (ii) in compliance with the Specifications and
Registrations.
5.3. Testing Requirements, Retained Samples, Quality Control
Testing, Stability. Except as provided in the Quality Agreement, Manufacturer
shall be responsible for compliance with all sample retention, quality control
testing and other testing requirements set forth in the Registrations and
applicable Laws with respect to the Manufacturing of the Products that are
required to be performed prior to the delivery to the Company of the Products,
including the following:
(a) Prior to delivery of any Product, Manufacturer's Quality
Control Unit shall execute for each batch of Products to be delivered to
Company, a certificate of analysis confirming that the Product has been made and
tested in accordance with, and in conformity to, the master batch record, its
Specifications, the CGMP Requirements, Registrations and all provisions of this
Supply Agreement and the Quality Agreement. The certificate of analysis shall
provide full analytical results with respect to the regulatory specifications,
and shall be supplied with each delivery of each batch of Products to the
Company.
(b) Notwithstanding any termination or expiration of this Supply
Agreement, Manufacturer shall keep manufacturing and quality control
documentation as
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well as sufficient and representative retained samples of the relevant Product
("Retained Samples") in compliance with CGMP Requirements and other applicable
Law, and in relation to MVI-12 Bulk, as requested by Company. The Quality
Control Unit for each of Manufacturer and Company shall agree upon the amount of
Retained Samples to be maintained for this purpose. The obligations under this
Section 5.3 shall be in effect for a period of six years from first use with
respect to Retained Samples and for a minimum of eleven years from first
production with respect to all documentation, but in any event no less than is
required under applicable Law.
(c) Manufacturer shall select and retain samples of each batch and
lot of Products and conduct an ongoing stability program in accordance with the
provisions of any Government and Regulatory Authority Approval and maintain all
legally required samples, documents, and records including batch and lot
production, releasable and rejectable batches, quality control and stability
records, for a period of time equal to the greater of (i) six years from first
use or (ii) the period of time required by the FDA or other Governmental or
Regulatory Authority to allow Company to assume such stability program.
(d) Manufacturer shall make available for review by Company, at
any reasonable time upon reasonable notice, all records relevant to
Manufacturer's performance hereunder, including written investigations of any
deviations that may have occurred during the Manufacturing, inspection, or
testing processes.
(e) Manufacturer shall notify Company within 24 hours of the
occurrence of any stability non-compliance, or of any confirmed out of
Specification results with respect to each batch and lot of Products.
(f) Products delivered hereunder by Manufacturer to Company shall
not be adulterated within the meaning of the FFDCA or within the meaning of any
other applicable Law.
Subject to the foregoing, upon delivery of the Products to Company,
Company shall be solely responsible for compliance with all quality control
testing and other testing requirements set forth in the Registrations, this
Supply Agreement, and all applicable Laws with respect to such Product.
5.4. Company Option. The Company shall have the option, in its sole
discretion, to assume on behalf of Manufacturer any of the testing, recording or
other processes required to be undertaken by Manufacturer under this Supply
Agreement, the Quality Agreement, the CGMP Requirements or any applicable Law.
To the extent reasonably practicable, Manufacturer will assist Company to assume
such obligations. To the extent the assumption of such obligation reduces the
costs to the Manufacturer associated with the Manufacture of the Products, the
Parties will reasonably agree to a reduction in the prices of the Products
taking into account such assumption in obligations. To the extent Company
assumes any obligation of Manufacturer herein, Manufacturer
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shall be relieved of such obligation under this Supply Agreement and the Quality
Agreement.
5.5. Non-Conforming Product. The Manufacturer shall not deliver to
the Company any Product which would constitute a breach of the covenant set
forth in Section 5.1(c) of this Supply Agreement or the Quality Agreement. In
the event that any Product shall fail to pass the quality control testing
conducted by the Manufacturer, the Manufacturer shall provide the test results
to the Company and the Manufacturer shall not release the Product batch.
5.6 Rejection of Delivered Product.
(a) In the event that the Company determines that any shipment of
Product would constitute a breach of the covenant set forth in Section 5.1(c) of
this Supply Agreement, including without limitation, the Specifications or CGMP
Requirements, then the Company shall give the Manufacturer written notice
(including sufficient samples for confirmatory testing) (i) within 15 days after
receipt thereof, in the case of non-conformities relating to completeness or
other damages that may be readily discoverable by the inspection of the Product
for such purposes, or (ii) within 15 days after discovery, in the case of other
non-conformities (including without limitation, non-conformities relating to
stability). The Manufacturer shall undertake appropriate testing of the samples
provided by Company and notify Company whether it has confirmed such
non-conformity within seven business days after receipt of Company's notice. If
the Manufacturer notifies the Company that it has not confirmed such
non-conformity, and the Company continues to insist such non-conformity exists,
the Manufacturer shall submit the disputed shipment for testing to an
independent testing laboratory of recognized standing in the industry mutually
agreeable to the Company and the Manufacturer. The findings of the laboratory
shall be binding on the Parties. The expenses for such testing shall be borne by
the party whose analysis was not substantiated by the findings of the
laboratory.
(b) If it shall have been confirmed pursuant to Section 5.6(a) of
this Supply Agreement that any Product delivered to the Company pursuant to this
Supply Agreement would result in a breach of the covenant set forth in Section
5.1(c) of this Supply Agreement, including without limitation, the
Specifications or the CGMP Requirements, the Manufacturer shall promptly remedy
such noncompliance at its own cost and as reasonably agreed by the Parties,
which may include (i) replacing the non-conforming Product with a substitute
Product that conforms to the warranty, including return shipping, and (ii)
properly destroying and/or disposing of the noncompliant Product.
ARTICLE VI
PRICE AND PAYMENTS
6.1. Manufacturing Fee. The price for the supply of each Product
(the "Manufacturing Fee") during the first two years of the Term shall be equal
to the
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Manufacturer's fiscal 2000 cost of goods sold as calculated and set forth in
column eight in Schedule 6.1 hereto for such Product; provided, however, that
the Manufacturing Fee shall be reviewed on the first anniversary of the
Effective Date and shall be increased or decreased at such time by an amount
equal to the (a) net increases or decreases in costs to Manufacturer for the
Active Pharmaceutical Ingredients and Raw Materials and (b) net increases or
decreases in costs of other components of the cost of goods sold calculation,
provided the percentage increase in costs in Section 6.1(b) may not exceed the
most recent annual percentage increase in the national CPI as reported in The
Wall Street Journal on the day prior to relevant anniversary of the Effective
Date. Manufacturer shall use its commercially reasonable efforts to obtain
favorable prices on the Active Pharmaceutical Ingredients and Raw Materials. In
the event the FDA approves the SNDA, the price for the commercial supply of the
reformulation of the MVI-12 Product will be equal to the Manufacturer's costs of
such product, including materials, labor and variable overhead, calculated at
the time such Product becomes commercially available. In the event this Supply
Agreement is extended beyond the second anniversary of the Effective Date
pursuant to Section 8.1, the Manufacturing Fee for each Product shall be equal
to the Manufacturers' full variable and fixed costs therefor, plus 20 percent.
6.2. Invoices. Upon delivery of each shipment of Products in
accordance with Section 3.4 of this Supply Agreement, the Manufacturer shall
promptly invoice the Company for such delivery. Payment shall be due 30 days
after receipt by the Company of such invoice; provided, however, that if the
Company rejects a shipment pursuant to Section 5.5 of this Supply Agreement,
then payment shall be due within 30 days after receipt by the Company of notice
from the laboratory pursuant to Section 5.5(b) of this Supply Agreement that the
invoiced Product is conforming, or the receipt by the Company of replacement
Product, as the case may be.
6.3. Manner of Payment. The Company shall make all payments
pursuant to this Article VI by check or by wire transfer of immediately
available U.S. denominated funds to a bank account designated in writing by the
Manufacturer.
6.4. Taxes. Any duty, sales, use or excise or other similar taxes
imposed by any Government or Regulatory Authority that apply to the purchase of
the Products shall be for the account of the Company, other than taxes based on
income, profits, receipts or capital of the Manufacturer. The Company shall
provide to the Manufacturer any applicable sales, use or resale tax exemption
certificates prior to shipment of any Products.
ARTICLE VII
REGULATORY MATTERS; RECORDS
7.1. Notification of Inspections; Communications. The Manufacturer
shall notify the Company in writing as soon as practicable upon receipt of
notice of any proposed visit or inspection by the FDA, or after any unannounced
visit or inspection; to the extent that such report or communication relates to
a Product or the Manufacture
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thereof within 72 hours of such notice or visit. The Manufacturer shall provide
to the Company a copy of any report and other written communications received
from the FDA; to the extent that such report or communication relates to a
Product or the Manufacture thereof within five business days after receipt
thereof.
7.2. Recalls; Market Withdrawals.
(a) Recall Procedures. Manufacturer and Company shall each
maintain such records as required by applicable Laws and codes of practice to
permit a recall, field correction or market withdrawal of any Product delivered
to Company or customers of Company effected voluntarily or under a directive of
any Government and Regulatory Authority. Each party agrees that, upon request in
connection with a recall, field correction or market withdrawal, it shall
provide copies of its relevant records to the other party upon request,
excluding confidential customer information or information subject to
attorney-client or other privilege. Each party shall give immediate notice by
telephone (to be confirmed in writing) to the other party upon discovery that
any Product should be recalled, corrected or withdrawn from the market, or may
be required to be recalled, corrected or withdrawn from the market. The decision
to initiate a recall or market withdrawal or to take any other corrective action
shall be made by Company. While Manufacturer shall reasonably cooperate with
Company in developing any necessary recall, market withdrawal or correction
plan, the manner and extent of such plan shall be reasonably decided by Company.
Manufacturer shall cooperate as reasonably required by Company in the
implementation of such plan. The obligations under this Section 7.2(a) shall
survive the termination of this Supply Agreement.
(b) Cost of Recall. Manufacturer shall bear the cost of a recall,
market withdrawal or corrective action only in the event that the recall, market
withdrawal or corrective action is required by (i) any failure of Manufacturer
or the Product to comply with CGMP Requirements, the Specifications or any
warranty or other requirement under this Supply Agreement or (ii) any failure of
Manufacturer to comply in all material respects with applicable Law.
7.3. Regulatory Assistance. The Manufacturer agrees to provide to
the Company such information and assistance to the extent relating to the
Manufacturing of the Products, any Raw Materials or Active Pharmaceutical
Ingredients as the Company may reasonably require for purposes of (a) applying
for and maintaining all Registrations for the Products in the Territory, or (b)
enabling the Company to comply with CGMP Requirements and other applicable Laws.
Such information or assistance shall include without limitation, providing the
Company with all reasonable reports, authorizations, certificates,
methodologies, and other documentation in the possession or under the control of
the Manufacturer relating to the Manufacture of the Products (or any Raw
Materials or Active Pharmaceutical Ingredients thereof).
14
7.4. Inspection. Upon reasonable notice to Manufacturer, and in a
manner calculated not to interfere with Manufacturer's conduct of business,
Manufacturer shall allow:
(a) Company's employees, agents, consultants and representatives
to inspect the Manufacturing, testing, stability, and quality control facilities
and/or programs of Manufacturer (or its subcontractors, to the extent
practicable) which relate to the Products, including the actual process of
Manufacture of Raw Materials, Active Pharmaceutical Ingredients and Products and
the associated records, and if applicable, any separate facility of Manufacturer
(or its subcontractors, to the extent practicable) for quality control testing;
(b) one or more Company quality assurance employees, consultants
or agents, or one or more representatives of Company's third party contract
manufacturers to observe the entire process of Manufacture of each batch or lot,
or selected batches or lots, of Raw Materials, Active Pharmaceutical Ingredients
and Products (Manufacturer agrees to give Company 20 business days prior written
notice of all production runs of the Products at any of its, or, to the extent
possible, its subcontractors' or, to the extent practicable, its supply
manufacturers' facilities, and Company shall be entitled to have one or more
representatives observe, review and inspect all aspects of such production); and
(c) representatives from the quality assurance department of
Company to have access to its manufacturing, warehousing, laboratory premises
and associated records related to the Products for audit purposes. The timing of
these audits shall be defined by the Company, but shall not exceed twice a year.
Where significant quality issues are detected, Company shall be allowed to carry
out additional specific audits designed to lead to resolution of these issues
and may require Manufacturer to retain an independent expert to certify that
such issues have been resolved. Company commits during any audit to follow
Manufacturer systems and procedures to ensure the safety, confidentiality and
security of Manufacturer processes, facilities and personnel.
7.5. Correction of Defects. Manufacturer shall use its commercially
reasonable efforts to promptly correct any defects identified during audits by
Company undertaken pursuant to Section 7.4(c). This approach shall require a
time schedule with defined corrective actions which shall be reviewed by Company
quality assurance department where there is an impact on the Products.
ARTICLE VIII
TERM AND TERMINATION
8.1. Term. This Supply Agreement shall commence as of the Effective
Date and shall expire on the second anniversary thereof, unless earlier
terminated pursuant to Article VIII of this Supply Agreement (the "Term");
provided, however, Company may, by giving six months prior written notice,
extend such two year period for a period not to exceed one year.
15
8.2. Termination. Either Party shall have the right to terminate
this Supply Agreement upon written notice to the other upon the occurrence of
either of the following:
(a) the other Party files a petition in bankruptcy, or enters into
an agreement with its creditors, or applies for or consents to the appointment
of a receiver or trustee, or makes as assignment for the benefit of creditors,
or becomes subject to involuntary proceedings under any bankruptcy or insolvency
Law (which proceedings remain undismissed for 60 days); or
(b) the other Party fails to cure a material breach of this Supply
Agreement or the Purchase Agreement, within 30 days after receiving written
notice of the breach from the non-breaching Party.
8.3. Effect of Termination by Manufacturer. If this Supply
Agreement is terminated by Manufacturer pursuant to Section 8.2:
(a) Except as set forth in paragraphs (b) and (c) below,
Manufacturer shall stop the Manufacturing of Products for Company.
(b) Reimbursement of Cost. Company shall reimburse Manufacturer
for its full variable and fixed costs that Manufacturer may have incurred (or to
which Manufacturer may be committed) in connection with the Manufacturing of the
Products, including the purchase of Raw Materials and Active Pharmaceutical
Ingredients, by Manufacturer before the effective date of termination, that was
reasonably required by Manufacturer in order to meet Company's requirements of
Products as set out in any Firm Order applicable at the time of such
termination, plus 10% of such costs (or 35% if such termination occurs after the
second anniversary of the Effective Date).
(c) Company to Take Product. At Company's option, which must be
exercised within ten days after Company receives notice of termination, Company
shall be entitled to take delivery upon prior payment to Manufacturer (pursuant
to Section 8.3(b) above) for any Raw Materials, Active Pharmaceutical
Ingredients, work-in-process or finished Product.
8.4. Termination by Company. If this Supply Agreement is terminated
by Company pursuant to Section 8.2:
(a) Except as set forth in paragraphs (b), (c) and (d),
Manufacturer shall stop the Manufacturing of Product for Company.
(b) Assignment of Authorizations. Manufacturer shall surrender all
authorizations, licenses and permits specifically allowing the Manufacture of
the Products to the appropriate authorities for cancellation.
16
(c) Work-in-Process, Products. If, and to the extent Company
elects, Manufacturer shall (and shall cause its Affiliates and subcontractors
to) deliver to Company in accordance with Section 3.4 of this Supply Agreement,
or as otherwise agreed by the Parties, (i) Products for the prices then in
effect under this Supply Agreement and (ii) work-in-process at Manufacturer's
material costs for such work-in-process.
(d) Firm Orders. At Company's option, Firm Orders not yet started
shall be cancelled without penalty to either Party. If requested by Company,
Manufacturer shall complete or Manufacturer shall cause the completion of the
Manufacturing of any work-in-process that is subject to a valid and effective
Fim Order on the date on which the termination is effective. Once such
work-in-process is completed, the resulting product shall be shipped in
accordance with Company's Firm Orders.
8.5. Expiration of Agreement. If this Supply Agreement expires by
its terms pursuant to Section 8.1:
(a) Cessation of Activities. Manufacturer shall (and Manufacturer
shall cause its Affiliates and subcontractors to) stop the Manufacturing of
Products, cease to use the documents, instructions and information (in whichever
format, including but not limited to electronically stored data) to the extent
that such information relates to the Products and/or their Manufacture, quality
control testing, handling and/or storage and return to Company, at Company's
expense, any and all such documents, instructions and information; and
(b) Assignment of Authorizations. Manufacturer shall surrender all
authorizations, licenses and permits specifically allowing the Manufacture of
Products to the appropriate authorities for cancellation.
(c) Work-in-Process, Product. Company shall purchase (or have
purchased) from Manufacturer its inventory of work-in-process and Products to
the extent such work-in-process and Products were reasonably required by
Manufacturer in order to meet Company's requirements of Products as set out in
any Firm Orders placed by Company and Company shall pay for such work-in-process
and Products. The price for Products shall be those prices then in effect under
this Supply Agreement and the price for the work-in-process shall be
Manufacturer's full variable costs.
8.6. Effect of Termination.
(a) Termination or expiration of this Supply Agreement shall not
relieve the Parties of any obligation accruing prior to such termination. The
rights and obligations of the Parties under Sections 1.1, 3.4, 5.3, 5.4, 5.5,
5.6, 7.1, 7.2, 7.3, 8.3, 8.4, 8.5, this Clause 8.6, 10.1, Article XI and Article
XIII of this Supply Agreement shall survive the expiration or termination of
this Supply Agreement.
17
(b) Upon the expiration or termination of this Supply Agreement,
the Manufacturer shall promptly return to the Company all Confidential
Information that the Company has provided to the Manufacturer pursuant to this
Supply Agreement.
ARTICLE IX
FORCE MAJEURE
9.1. Force Majeure. Except as otherwise expressly set forth in this
Supply Agreement, neither Party shall be deemed to have defaulted under or
breached this Supply Agreement for failure or delay in fulfilling or performing
any term or provision of this Supply Agreement (other than the payment of money)
when such failure or delay is caused by or results from causes beyond the
reasonable control of the affected Party, including without limitation fire,
floods, embargoes, shortages, epidemics, quarantines, war, acts of war (whether
war be declared or not), insurrections, riots, civil commotions, strikes,
lockouts or other labor disturbances, or acts of God.
9.2. Mitigation. A Party affected by an event of force majeure
shall use commercially reasonable efforts to remedy, remove or mitigate such
event and the effects thereof with all reasonable dispatch; provided, however,
that this Section 9.2 shall not require that the affected Party settle a strike
or labor controversy by acceding to the demands of the opposing party or
parties.
9.3. Notice of Force Majeure. The Party affected by any event of
force majeure shall promptly notify the other Party, explaining the nature,
details and expected duration thereof. Such Party shall also notify the other
Party from time to time as to when the affected Party reasonably expects to
resume performance in whole or in part of its obligations hereunder, and notify
the other Party of the cessation of any such event. If a Party anticipates that
an event of force majeure may occur, such Party shall notify the other Party of
the nature, details and expected duration thereof.
ARTICLE X
CONFIDENTIALITY
10.1. Nondisclosure and Nonuse Obligation. Each of the Manufacturer
and the Company agrees to keep confidential any and all information furnished by
such Party to the other Party or its agents, whether pursuant to this Supply
Agreement or through any prior disclosure (collectively, the "Confidential
Information"), and not to disclose the Confidential Information to any Person
without the prior consent of the furnishing Party, except to the extent that
such Confidential Information is (a) is known by the receiving Party at the time
of its receipt as documented by written records; (b) is in the public domain
other than as a result of a breach by the receiving Party of this Section 10.1;
(c) is subsequently disclosed to the receiving Party by a third party which is
not under an obligation of confidentiality to the furnishing Party; (d) is
independently developed by the receiving Party; or (e) is required to be
disclosed by Law or court order, provided, however, that notice thereof is
promptly delivered to the furnishing Party in order to provide an opportunity to
challenge or limit such disclosure obligations. The
18
receiving Party further agrees to use such Confidential Information only for the
purpose of carrying out its obligations under this Supply Agreement. The
obligations of confidentiality and non-use set forth in this Section 10.1 shall
survive for a period of ten years beyond the termination or expiration of this
Supply Agreement, provided, however, that either Party may disclose such
information to any Government and Regulatory Authority to the extent necessary
to obtain the approval of any such Government and Regulatory Authority to make
and have made products pursuant to the terms and conditions of this Supply
Agreement. Notwithstanding any other provision of this Supply Agreement, all
proprietary or nonpublic information relating to the Products which is owned by
the Company, including Confidential Information purchased from the Manufacturer,
shall be considered Confidential Information of Company (and not Manufacturer or
its Affiliates) with respect to which Manufacturer will have obligations of
confidentiality described herein, unless it becomes generally available to the
public, other than through an act or omission of Manufacturer or its
Representatives.
ARTICLE XI
INDEMNIFICATION
11.1. By Manufacturer. Subject to Section 11.3 of this Supply
Agreement, from and after the Effective Date, Manufacturer shall indemnify,
reimburse, defend and hold harmless Company, its Affiliates, and their
respective officers, directors, employees, agents, successors and assigns from
and against any and all costs, losses, Liabilities, damages, lawsuits,
deficiencies, claims and expenses (including reasonable fees and disbursements
of attorneys) (collectively, the "Damages"), incurred in connection with,
arising out of, resulting from or incident to (a) any breach of this Supply
Agreement by Manufacturer including any breach by the Manufacturer of its
representations or warranties or a failure by the Manufacturer to comply or
perform any covenants hereunder; and (b) any negligence or willful misconduct by
Manufacturer or any subcontractor of Manufacturer with respect to the
Manufacture of the Products hereunder.
11.2. By Company. Subject to Section 11.3 of this Supply Agreement,
from and after the Effective Date, Company shall indemnify, defend and hold
harmless Manufacturer, its Affiliates and their respective officers, directors,
employees, agents, successors and assigns from and against any and all Damages
incurred in connection with, arising out of, resulting from or incident to (a)
any breach of this Supply Agreement by Company, including any breach by the
Company of its representations or warranties or a failure by the Company to
comply or perform any covenants hereunder; and (b) any negligence or willful
misconduct by Company or any subcontractor of Company.
11.3. Procedures. The Indemnified Party (as defined below) shall
give the indemnifying Party written notice (an "Indemnification Claim Notice")
within 30 days (or such other additional reasonable period that the Indemnified
Party can establish is reasonably necessary to permit it to determine whether to
make a request for indemnification) of any Damages or discovery of fact upon
which such Indemnified Party
19
intends to base a request for indemnification under Section 11.1 or Section
11.2, but in no event shall the indemnifying Party be liable for any Damages
that result from failure to provide such notice within such period. Each
Indemnification Claim Notice must contain a description of the claim and the
nature and amount of such Damages (to the extent that the nature and amount of
such Damages are known at such time). The Indemnified Party shall furnish
promptly to the indemnifying Party copies of all papers and official documents
received in respect of any Damages. All indemnification claims in respect of a
Party, its Affiliates or their respective directors, officers, employees and
agents (collectively, the "Indemnitees" and each an "Indemnitee") shall be made
solely by such Party to this Supply Agreement (the "Indemnified Party").
11.4. Third Party Claims. The obligations of an indemnifying Party
under this Section 11.4 with respect to Damages arising from claims of any third
party that are subject to indemnification as provided for in Sections 11.1 or
11.2 of this Agreement (a "Third Party Claim") shall be governed by and be
contingent upon the following additional terms and conditions:
(a) At its option, the indemnifying Party may assume the defense
of any Third Party Claim by giving written notice to the Indemnified Party at
any time after the indemnifying Party's receipt of an Indemnification Claim
Notice with respect to such Third Party Claim. The assumption of the defense of
a Third Party Claim by the indemnifying Party shall be construed as an
acknowledgment that the indemnifying Party is liable to indemnify any Indemnitee
for Damages in respect of such Third Party Claim. Upon assuming the defense of a
Third Party Claim, the indemnifying Party may appoint as lead counsel in the
defense of the Third Party Claim any legal counsel selected by the indemnifying
Party. In the event the indemnifying Party assumes the defense of a Third Party
Claim, the Indemnified Party shall immediately deliver to the indemnifying Party
all original notices and documents (including court papers) received by any
Indemnitee in connection with the Third Party Claim. Should the indemnifying
Party assume the defense of a Third Party Claim, the indemnifying Party shall
not be liable to the Indemnified Party or any other Indemnitee for any legal
expenses subsequently incurred by such Indemnified Party or other Indemnitee in
connection with the analysis, defense or settlement of the Third Party Claim. In
the event that it is later determined that the negligence or willful misconduct
of the Indemnified Party caused, or was a contributing cause to, the Third Party
Claim or the Damages relating thereto, the Indemnified Party shall reimburse the
indemnifying Party for the legal costs and all costs and expenses (including
attorneys' fees and costs of suit) and any Damages, or its equitable proportion,
as the case may be, incurred by the indemnifying Party in its defense of the
Third Party Claim with respect to such Indemnitee.
(b) Without limiting Section 11.4(a), any Indemnitee shall be
entitled to participate in, but not control, the defense of such Third Party
Claim and to employ counsel of its choice for such purpose; provided, however,
that such employment shall be at the Indemnitee's own expense unless (i) the
employment thereof has been specifically authorized by the indemnifying Party in
writing, or (ii) the indemnifying Party has failed
20
to assume the defense and employ counsel in accordance with Section 11.4(a) (in
which case the Indemnified Party shall control the defense).
(c) With respect to any Damages relating solely to the payment of
money damages in connection with a Third Party Claim and that will not result in
the Indemnitee's becoming subject to injunctive or other relief or otherwise
adversely affect the business of the Indemnitee in any manner, and as to which
the indemnifying Party shall have acknowledged in writing the obligation to
indemnify the Indemnitee hereunder, the indemnifying Party shall have the sole
right to consent to the entry of any judgment, enter into any settlement or
otherwise dispose of such Damages, on such terms as the indemnifying Party, in
its sole discretion, shall deem appropriate. With respect to all other Damages
in connection with Third Party Claims, where the indemnifying Party has assumed
the defense of the Third Party Claim in accordance with Section 11.4(a) of this
Agreement, the indemnifying Party shall have authority to consent to the entry
of any judgment, enter into any settlement or otherwise voluntarily dispose of
such Damages; provided that it obtains the prior written consent of the
Indemnified Party (which consent shall not be unreasonably withheld or delayed).
The indemnifying Party shall not be liable for any settlement or other voluntary
disposition of Damages by an Indemnitee that is reached without the written
consent of the indemnifying Party. Regardless of whether the indemnifying Party
chooses to defend or prosecute any Third Party Claim, no Indemnitee shall admit
any liability with respect to, or settle, compromise or discharge, any Third
Party Claim without the prior written consent of the indemnifying Party.
(d) Regardless of whether the indemnifying Party chooses to defend
or prosecute any Third Party Claim, the Indemnified Party shall, and shall cause
each other Indemnitee to, cooperate in the defense or prosecution thereof and
shall furnish such records, information and testimony, provide such witnesses
and attend such conferences, discovery proceedings, hearings, trials and appeals
as may be reasonably requested in connection therewith. Such cooperation shall
include access during normal business hours afforded to the indemnifying Party
to, and reasonable retention by the Indemnified Party of, records and
information that are reasonably relevant to such Third Party Claim, and making
Indemnitees and other employees and agents available on a mutually convenient
basis to provide additional information and explanation of any material provided
hereunder, and the indemnifying Party shall reimburse the Indemnified Party for
all its reasonable out-of-pocket expenses in connection therewith. To the extent
the records of the Indemnitee referenced in this Section 11.4(d) are privileged
by an attorney-client relationship, the parties shall cooperate in a manner as
to preserve such privilege but to afford the indemnifying Party with all
information relevant to such Third Party Claim.
ARTICLE XII
INTELLECTUAL PROPERTY RIGHTS
12.1. Inventions. Each Party shall own all right, title to and
interest in any inventions, discoveries or innovations, whether patentable or
not, that such Party or
21
its employees or agents may make in performing such Party's obligations
hereunder (the "IP"); provided, however, Manufacturer shall grant to Company an
irrevocable, nonexclusive, worldwide, royalty-free, fully paid up, perpetual
license, with right to sublicense and assign, in the IP solely to Manufacture,
have Manufactured, use, have used, import, offer for sale, and have sold and
sell the Products.
ARTICLE XIII
MISCELLANEOUS
13.1. LIMITATION ON LIABILITY.
NONE OF THE MANUFACTURER, THE COMPANY OR THEIR RESPECTIVE
AFFILIATES SHALL BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL
DAMAGES (INCLUDING FOR LOST PROFITS), WHETHER IN CONTRACT, WARRANTY, NEGLIGENCE,
TORT, STRICT LIABILITY OR OTHERWISE, ARISING OUT OF OR RELATING TO THIS SUPPLY
AGREEMENT; PROVIDED, HOWEVER, THIS EXCLUSION IS NOT INTENDED TO, NOR SHALL,
EXCLUDE ACTUAL OR COMPENSATORY DAMAGES OF THE AFFECTED PARTY.
13.2. Assignment. Without the prior written consent of the other
Party, which will not be unreasonably withheld, neither Party shall assign,
whether voluntarily, involuntarily, by operation of Law or otherwise, this
Supply Agreement or any of its rights or duties hereunder; provided, however,
that each of the Manufacturer and the Company may, without such consent, assign
this entire Supply Agreement and all of its rights and obligations hereunder to
an Affiliate, to the purchaser of all or substantially all of the assets of such
Party, or to its successor entity or acquiror in the event of a merger,
consolidation or change in control; provided, however, that any purported
assignment by a Party will not release such Party from any of its obligations
under this Supply Agreement. Any attempted assignment or delegation in violation
of the preceding sentence shall be void. All validly assigned rights and
obligations of the Parties hereunder shall be binding upon and inure to the
benefit of and be enforceable by and against the successors and permitted
assigns of the Company or the Manufacturer, as the case may be. In the event
either Party seeks and obtains the other Party's consent to assign or delegate
its rights or obligations to another Party, the assignee or transferee shall
assume all obligations of its assignor or transferor under this Supply
Agreement.
13.3. Severability. If any provision of this Supply Agreement is
held to be illegal, invalid or unenforceable under any present or future Law
applicable to the Parties or the performance by either Party of its obligations
hereunder, and if the rights or obligations of any Party under this Supply
Agreement will not be materially and adversely affected thereby, (a) such
provision shall be fully severable, (b) this Supply Agreement shall be construed
and enforced as if such illegal, invalid or unenforceable provision had never
compromised a part hereof, (c) the remaining provisions of this Supply Agreement
shall remain in full force and effect and shall not be affected by the
22
illegal, invalid or unenforceable provision or by its severance herefrom, and
(d) in lieu of such illegal, invalid or unenforceable provision, there shall be
added automatically as a part of this Supply Agreement a legal, valid and
enforceable provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and reasonably acceptable to the
Parties. To the fullest extent permitted by applicable Law, each Party hereby
waives any provision of Law that would render any provision hereof prohibited or
unenforceable in any respect.
13.4. Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and delivered personally,
sent by telecopier (and promptly confirmed by personal delivery, registered or
certified mail or overnight courier), sent by nationally-recognized overnight
courier or sent by registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
If to the Manufacturer, to:
AstraZeneca Pharmaceuticals LP
0000 Xxxxxxx Xxxx
X.X. Xxx 00000
Xxxxxxxxxx, XX 00000-0000
Attn: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxxx & Xxxxxxx
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Company, to:
NeoSan Pharmaceuticals Inc.
0000 Xxxxxxxxxx Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xx. Xxxxxx Xxxxxxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
23
with a copy to:
aaiPharma Inc.
0000 Xxxxxxxxxx Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn.: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other address as the Party to whom notice is to be given may have
furnished to the other Party in writing in accordance herewith. Any such
communication shall be deemed to have been given when delivered. It is
understood and agreed that this Section 13.4 is not intended to govern the
ordinary course business communications necessary between the Parties in
performing their duties, in due course, under the terms of this Supply
Agreement, including, without limitation, the placement of orders and the
delivery of forecasts.
13.5. Applicable Law. This Supply Agreement shall be governed by and
construed in accordance with the Laws of the State of Delaware, without
reference to the rules of conflict of Laws thereof.
13.6. Disputes. If a dispute arises between the Parties in
connection with or relating to this Agreement or any document or instrument
delivered in connection herewith (a "Dispute"), the Parties shall use the
following procedure in good faith prior to either Party pursuing other available
judicial or nonjudicial remedies:
(a) A meeting shall be held between the Parties within ten days
after either Party gives written notice of a Dispute to the other Party (the
"Dispute Notice"). The meeting shall be attended by a representative of each
Party having decision-making authority regarding the Dispute (subject to Board
of Directors or equivalent approval, if required), who shall attempt in good
faith to negotiate a resolution of the Dispute.
(b) If, within 30 days after the Dispute Notice, the Parties have
not succeeded in negotiating a written resolution of the Dispute, upon written
request by either Party to the other Party, the Parties shall promptly negotiate
in good faith jointly to appoint a mutually acceptable neutral person not
affiliated with either Party (the "Neutral"). If the Parties are not able to
agree on an acceptable Neutral within 45 days after the Dispute Notice, the CPR
Institute for Dispute Resolution shall be responsible for selecting a qualified,
disinterested, and conflict-free Neutral within 15 days of being approached by
either Consultant or AstraZeneca. The fees and costs of the Neutral and the CPR
Institute for Dispute Resolution shall be shared equally by the Parties.
(c) In consultation with the Neutral, the Parties shall negotiate
in good faith to select or devise a nonbinding alternative dispute resolution
procedure ("ADR") by which they will attempt to resolve the Dispute, and a time
and place for the ADR to be
24
held, with the Neutral (at the written request of either Party to the other
Party) making the decision as to the procedure, place, and time if the Parties
have been unable to agree on any such matters in writing within ten days after
selection of the Neutral.
(d) The Parties shall participate in good faith in the ADR to its
conclusion; provided, however, that neither Party shall be obligated to continue
to participate in the ADR if the Parties have not resolved the Dispute in
writing within 90 days after the Dispute Notice and if either Party shall have
terminated the ADR by delivery of written notice of termination to the other
Party following expiration of the 90-day period. If either Party so requests in
writing to the Neutral (with a copy to the other Party), the Neutral shall make
a recommended resolution of the Dispute in writing to each Party following
either the conclusion of the ADR or any termination notice after selection of
the Neutral. The recommendation of the Neutral shall not be binding upon the
Parties; provided, however, that the Parties shall give good faith consideration
to the settlement of the Dispute on the basis of such recommendation, and if one
Party does not accept such recommendation (the "Disputing Party") and either
Party thereafter pursues any other judicial or nonjudicial remedy to conclusion,
the Disputing Party shall pay the reasonable attorneys' fees, costs, and other
expenses (including expert witness fees) of the other Party, if any, if the
result thereof is not more favorable to the Disputing Party than the
recommendation of the Neutral.
Notwithstanding anything herein to the contrary, nothing in this
Section 13.6 shall preclude either Party from seeking interim or provisional
relief, including, without limitation, a temporary restraining order,
preliminary injunction, or other interim equitable relief concerning a Dispute,
either prior to or during the ADR, if necessary to protect the interests of such
Party. This Section 13.6 shall be specifically enforceable.
13.7. Entire Agreement. This Supply Agreement and the attached
Schedules and Exhibits, which are incorporated herein, constitute the entire
agreement between the Parties with respect to the subject matter hereof and all
prior agreements with respect hereto are superseded. Each Party confirms that it
is not relying on any representations or warranties of the other Party except as
specifically set forth herein. No amendment or modifications hereof shall be
binding upon the Parties unless in writing and duly executed by authorized
representatives of both Parties.
13.8. Headings. The headings used in this Supply Agreement are
intended for convenience only and shall not be considered part of the written
understanding between the Parties and shall not affect the construction of this
Supply Agreement.
13.9. Subcontracting. The Manufacturer may not subcontract with any
Affiliate or non-Affiliate third party to perform any of its obligations
hereunder except with the prior written consent of the Company, which shall not
be unreasonably withheld. In no event shall any such subcontract release the
Manufacturer from any of its obligations under this Supply Agreement except to
the extent they are performed by such
25
subcontractor. Any subcontract shall be in writing and shall include a provision
that grants Company commercially reasonable rights to monitor the subcontractor,
conduct inspections and audits of the subcontractor's facilities and to receive
notice of regulatory actions and communications, and in each case such benefit
shall be on terms no less favorable than Company has with respect to
Manufacturer under this Supply Agreement (as amended from time to time). Company
will be provided a copy of any such subcontract.
13.10. Independent Contractors. It is expressly agreed that the
Manufacturer, on the one hand, and the Company, on the other hand, shall be
independent contractors and that the relationship between the two Parties shall
not constitute a partnership, joint venture or agency. Neither the Manufacturer,
on the one hand, nor the Company, on the other hand, shall have the authority to
make any statements, representations or commitments of any kind, or to take any
action, which shall be binding on the other, without the prior consent of the
other Party to do so. All persons employed by a Party shall be employees of such
Party and not of the other Party and all costs and obligations incurred by
reason of any such employment shall be for the account and expense of such
Party.
13.11. Waiver. The waiver by either Party of any right hereunder or
the failure to perform or of a breach by the other Party shall not be deemed a
waiver of any other right hereunder or of any other breach or failure by said
other Party whether of a similar nature or otherwise.
13.12. Counterparts. This Supply Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13.13. No Benefit to Third Parties. The representations, warranties,
covenants and agreements set forth in this Supply Agreement are for the sole
benefit of the Parties and their successors and permitted assigns, and they
shall not be construed as conferring any rights on any other Persons.
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IN WITNESS WHEREOF, the Parties have caused this Supply
Agreement to be executed by their duly authorized representatives as of the date
first above written.
AstraZeneca LP NeoSan Pharmaceuticals Inc.
By: /s/ Xxx X. Xxxxx-Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------- --------------------------
Name: Xxx X. Xxxxx-Xxxxxxxx Name: Xxxxxx X. Xxxxxxxx
-------------------------- --------------------------
Title: Assistant Secretary Title: President
-------------------------- --------------------------
aaiPharma Inc. Guaranty
In consideration of AstraZeneca, L.P.'s ("Manufacturer") entering into
the foregoing Interim Supply Agreement (the "Agreement") with NeoSan
Pharmaceuticals Inc. ("Company"), a wholly-owned subsidiary of aaiPharma Inc.,
aaiPharma Inc. hereby guaranties the performance by Company of its obligations
under the Agreement, when and as due, subject to all defenses that Company may
lawfully raise with respect to any claims by Manufacturer, other than defenses
under or relating to bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors' rights
generally.
aaiPHARMA INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President and
General Counsel
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27
