CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
EXHIBIT 10.16
SUPPLY AGREEMENT
THIS AGREEMENT (the "AGREEMENT") is entered into as of March 22, 2002 (the
"EFFECTIVE DATE"), between ALGORX PHARMACEUTICALS, INC., a Delaware corporation
("ALGORX"), and POWDERJECT TECHNOLOGIES LIMITED, an English corporation
("POWDERJECT"). Both PowderJect and AlgoRx are referred to individually as a
"PARTY", and collectively as the "PARTIES".
RECITALS
WHEREAS, pursuant to a License Agreement of even date herewith, AlgoRx has
obtained certain license rights to the needleless powder injection drug
delivery business of PowderJect and its affiliates;
WHEREAS, PowderJect's powder injection drug delivery system consists of a
device that releases helium gas from a micro cylinder to propel powdered drug
particles out of the device for needleless administration, which micro cylinder
is currently exclusively manufactured on behalf of PowderJect by BOC;
WHEREAS, to facilitate its development and commercialization of
pharmaceutical products delivered by needleless powder injection under the
License Agreement, AlgoRx desires to obtain its requirements of such micro
cylinders from PowderJect, and PowderJect is willing to supply such requirements
to AlgoRx on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the covenants and
promises contained in this Agreement, the Parties hereby agree as follows:
ARTICLE 1
DEFINITION
1.1 "ACCEPTANCE TESTS" shall mean those tests attached hereto as Exhibit A
to be performed to determine that the Gas Cylinders supplied to AlgoRx conform
to the Gas Cylinder Specification, as such tests may be amended from time to
time pursuant to Section 2.9.
1.2 "AFFILIATE" means, with respect to a Party, any corporation or other
business entity controlling, controlled by or under common control with such
Party. The term "controlling" (with correlative meanings for the terms
"controlled by" and "under common control with") as used in this definition
means either (a) possession of the direct or indirect ownership of more than
fifty percent (50%) of the voting or income interest of the applicable
corporation or other business entity, or (b) the ability, by contract or
otherwise, to control the management of the applicable corporation or other
business entity.
1.3 "ALGORX CUSTOMERS" has the meaning set forth in Section 4.3(a).
1.4 "BOC" means The BOC Group PLC and BOC Limited.
1.
1.5 "BOC AGREEMENTS" means (a) the Pilot Plant Agreement between
PowderJect and The BOC Group PLC dated January 11, 2000 and assigned by The BOC
Group PLC to its affiliate, BOC Limited, (b) the Large Scale Manufacture and
Supply Agreement between PowderJect and The BOC Group PLC dated January 11,
2000, and assigned by The BOC Group PLC to its affiliate, BOC Limited, as
amended on July 4, 2001, (c) any agreement for the Manufacture of Gas Cylinders
that is entered into by and between BOC and PowderJect after the Effective Date
with AlgoRx's written consent, and (d) amendments to any of the agreements set
forth in subclauses (a) through (c) that are entered into by BOC and PowderJect
after the Effective Date with AlgoRx's written consent.
1.6 "BOC DOSSIER" has the meaning set forth in Section 2.11.
1.7 "BUSINESS DAY" means a day other than a Saturday, Sunday, or bank or
other public holiday in England or Wales.
1.8 "COMMERCIAL LAUNCH" means the first sale of a Device to a Third Party
end user following any required Regulatory Approval thereof in the country in
which such product is sold.
1.9 "COMMERCIAL SUPPLY" means the supply of Gas Cylinders by PowderJect to
AlgoRx pursuant to Sections 2.4(b) and 2.5(b).
1.10 "COMMISSIONING DATE" means the date on which successful completion of
all tests and procedures for the commissioning and validation of a Line occurs.
1.11 "CONFIDENTIAL INFORMATION" means any confidential or proprietary
information including, without limitation, research, development, manufacturing,
marketing, financial, personnel, sales, and other business and technical
information, compositions, inventions, discoveries, processes, methods,
formulae, procedures, protocols, techniques, data, plans, Gas Cylinder
Specifications, Packaging Specifications, and Quality Control Procedures,
whether in oral, written, graphic, or other electronic form.
1.12 "CYLINDER COST" means the per cylinder cost of Gas Cylinders
Manufactured off a Line and supplied to AlgoRx, which shall be determined based
on the sum of the following costs actually incurred by PowderJect, to the extent
reasonably allocable to the Manufacture of Gas Cylinders supplied to AlgoRx: (a)
PowderJect's cost of direct materials; (b) direct labor costs; (c) fixed
variable overhead costs for that portion of the utilities and rent for
manufacturing facilities directly allocable to the Manufacture of Gas Cylinders
for AlgoRx; and (d) any and all subcontractor or other out-of-pocket costs
necessary to complete the manufacturing and distribution of Gas Cylinders, in
each case to the extent reasonably allocated to the Gas Cylinders based on
production activity. Any capital costs, depreciation of specific machinery,
systems, and equipment required for the Manufacture of Gas Cylinders, and
corporate overhead (such as administrative expenses) shall not be considered in
determining the Cylinder Cost. Cylinder Cost shall be calculated in a manner
consistent with Generally Accepted Accounting Principles consistently applied,
and the methodology used in making the allocations referred to above shall be
consistent with PowderJect's methodology for other similar products and shall be
consistent from year to year. PowderJect shall disclose such methodology to
AlgoRx upon request.
2.
1.13 "DEFECTIVE PRODUCTS" has the meaning set forth in Section 3.3(a).
1.14 "DEVICE" means a drug administration device actuated by gas pressure
for use in the Field, which device incorporates a Gas Cylinder.
1.15 "FDA" means the United States Food and Drug Administration, or any
successor thereto, having the administrative authority to regulate the marketing
of human pharmaceutical products or biological therapeutic products, drug
delivery systems, and devices in the United States.
1.16 "FIELD" means the needleless, gas-actuated administration of a
Licensed Product (as such term is defined in the License Agreement) to the
extracellular space within any human or animal tissue. For the avoidance of
doubt, the term "FIELD" shall exclude pulmonary administration or administration
by inhalation.
1.17 "GAS CYLINDER" means a cylinder (including any closure or break neck
feature) containing pressurized gas for use in or with the Device, designed to
meet the Gas Cylinder Specification.
1.18 "GAS CYLINDER SPECIFICATION" means the specification set forth in
Exhibit B for the Manufacture of a Gas Cylinder, as it may be amended from time
to time pursuant to Section 2.9.
1.19 "GAS SUPPLY SYSTEM" means the Gas Cylinder and any process or
apparatus for the supply of pressurized gas for use in or with a Device,
including any gas filling means and any actuation mechanism therefor.
1.20 "GOOD MANUFACTURING PRACTICE" or "GMP" shall mean the then-current
standards for the manufacture of pharmaceutical products applicable for the
stage of development for the Licensed Product in question, as set forth in EC
Directive 91/356/EEC, the Food, Drug and Cosmetic Act, as amended, and
applicable regulations and guidances promulgated thereunder, including without
limitation, the Code of Federal Regulations, and any other laws or regulations
applicable to the manufacture of pharmaceutical products in any country as
notified by AlgoRx to PowderJect from time to time.
1.21 "INTELLECTUAL PROPERTY RIGHTS" means intellectual property rights of
all kinds, including patents, patent applications, copyrights, know-how,
technical and commercial information, designs (whether registered or not) and
trademarks.
1.22 "LICENSE AGREEMENT" means the License Agreement entered into by
AlgoRx and PowderJect Research Limited on the Effective Date.
1.23 "LICENSED PRODUCT" as used herein has the meaning set forth in the
License Agreement.
1.24 "LINE" means all of the plant, machinery, systems, and other
equipment that are necessary to Manufacture Gas Cylinders in accordance with the
Gas Cylinder Specification and package them in accordance with the Packaging
Specification, which has a minimum annual
3.
capacity of Manufacturing *********** Gas Cylinders. Notwithstanding the
foregoing, the first Line commissioned and validated under the BOC Agreements
shall have a minimum annual capacity of approximately *********** Gas Cylinders.
However, each additional Line shall have an annual capacity of at least
*********** Gas Cylinders.
1.25 "LINE PRICE" has the meaning set forth in Section 5.1.
1.26 "MANUFACTURE" means, with respect to a particular product, the
cleaning, drying, assembly, filling, sealing, testing, and packaging of such
product.
1.27 "ORDER ACKNOWLEDGEMENT" means a written document issued by BOC or a
Third Party Manufacturer to PowderJect that acknowledges each order made by
PowderJect for Gas Cylinders and that details the schedule for Manufacture for
the quantity of Gas Cylinders set forth in each order and the expected shipping
date of such quantity.
1.28 "PACKAGING SPECIFICATION" means the specification for the packaging
of each particular type of Gas Cylinder set forth in Exhibit C, as it may be
amended from time to time pursuant to Section 2.9.
1.29 "PILOT PLANT" refers to the machinery, systems, and other equipment
necessary for the Manufacture of Gas Cylinders owned by PowderJect as of the
Effective Date, and the premises at which such machinery, systems, and other
equipment are located. As of the Effective Date, such machinery, systems, and
equipment are located at BOC's facilities at Morden, South London. However,
during the term of this Agreement, such machinery, systems, and equipment may
move to different premises at which the Manufacture of Gas Cylinders shall be
undertaken.
1.30 "PILOT PLANT CYLINDER COST" means the per cylinder cost of Gas
Cylinders Manufactured at the Pilot Plant and supplied to AlgoRx, which shall be
determined based on the sum of the following costs actually incurred by
PowderJect for the operation of the Pilot Plant, to the extent reasonably
allocable to the Manufacture of Gas Cylinders supplied to AlgoRx: (a)
PowderJect's cost of direct materials; (b) direct labor costs; (c) fixed
variable overhead costs for that portion of the utilities and rent for the plant
premises directly allocable to the Manufacture of Gas Cylinders for AlgoRx; and
(d) any and all subcontractor or other out-of-pocket costs necessary to complete
the manufacturing and distribution of Gas Cylinders, in each case to the extent
reasonably allocated to the Gas Cylinders based on production activity. Any
capital costs, depreciation of specific machinery, systems, and equipment
required for the Manufacture of Gas Cylinders, and corporate overhead (such as
administrative expenses) shall not be considered in determining the Pilot Plant
Cylinder Cost. The Pilot Plant Cylinder Cost shall be calculated in a manner
consistent with Generally Accepted Accounting Principles consistently applied,
and the methodology used in making the allocations referred to above shall be
consistent with PowderJect's methodology for other similar products and shall be
consistent from year to year. PowderJect shall disclose such methodology to
AlgoRx upon request.
1.31 "QUALITY CONTROL PROCEDURES" has the meaning set forth in Section
3.1.
1.32 "REGULATORY APPROVAL" means (a) in the United States, approval by the
FDA of any applicable filing and satisfaction of any related applicable FDA
registration and notification
4.
requirements (if any) required to market and sell a pharmaceutical product, drug
delivery system, or device; or (b) in any country other than the United States,
approval by Regulatory Authorities having jurisdiction over such country of a
single application or set of applications or other applicable filing and
satisfaction of any related applicable regulatory and notification requirements,
if any, necessary to market and sell pharmaceutical products, drug delivery
systems, or devices commercially in such country.
1.33 "REGULATORY AUTHORITY" means the FDA in the United States and the
equivalent regulatory authority or entity having the responsibility,
jurisdiction, and authority to approve the manufacture, use, importation,
packaging, labeling, marketing, and sale of pharmaceutical products, biological
products, drug delivery systems, and devices in any country other than the
United States.
1.34 "THIRD PARTY" means any entity or individual other than the Parties
and the Affiliates of any of the Parties.
1.35 "THIRD PARTY MANUFACTURER" means any entity other than BOC that
Manufactures Gas Cylinders for PowderJect or AlgoRx.
1.36 "THIRD PARTY MANUFACTURER AGREEMENT" has the meaning set forth in
Section 2.1.
ARTICLE 2
PURCHASE AND SUPPLY
2.1 SUPPLY COMMITMENT. Subject to the terms hereof, PowderJect hereby
agrees to supply AlgoRx's requirements of Gas Cylinders during the term of this
Agreement. As of the Effective Date, PowderJect is obtaining its supply of Gas
Cylinders exclusively from BOC, which is obligated to Manufacture and supply
PowderJect's requirements of Gas Cylinders pursuant to the BOC Agreements.
While the BOC Agreements are in effect, PowderJect will obtain AlgoRx's
requirements of Gas Cylinders from BOC and supply them to AlgoRx. If the BOC
Agreements terminate, PowderJect may subsequently enter into an agreement with a
Third Party Manufacturer to supply PowderJect's and AlgoRx's requirements of Gas
Cylinders pursuant to Section 2.13 (such agreement, a "THIRD PARTY MANUFACTURER
AGREEMENT"). PowderJect shall comply in all material respects with the terms of
the BOC Agreements or any Third Party Manufacturer Agreement, as applicable, and
shall not terminate such agreements without AlgoRx's prior written consent.
PowderJect expressly acknowledges and understands that the Gas Cylinders
Manufactured by BOC and supplied by PowderJect to AlgoRx are critical to the
business of AlgoRx and that AlgoRx has no alternate source of supply of Gas
Cylinders. Accordingly, PowderJect shall diligently take all reasonable steps to
exercise its rights under the BOC Agreements or any Third Party Manufacturer
Agreement to ensure that PowderJect is able to comply with its obligations to
AlgoRx and that AlgoRx is able to exercise its rights set forth in this
Agreement. PowderJect covenants that it will not amend the BOC Agreements or any
Third Party Manufacturer Agreement during the term of this Agreement in a manner
that adversely affects the rights or obligations of AlgoRx hereunder without
the prior written consent of AlgoRx. In addition, PowderJect shall provide
prompt written notice to AlgoRx of the
5.
amendment of any of the terms of the BOC Agreements or any Third Party
Manufacturer Agreement, as well as of any defaults by BOC or a Third Party
Manufacturer under such agreements. If the BOC Agreements are terminated, AlgoRx
shall have the option of either continuing to obtain its requirements of Gas
Cylinders from PowderJect under this Agreement or exercising its rights pursuant
to Section 2.13 to Manufacture or have a Third Party Manufacturer selected by
AlgoRx Manufacture AlgoRx's requirements of the Gas Cylinders.
2.2 STEERING COMMITTEE REPRESENTATION. Promptly after the Effective Date,
PowderJect shall replace one of its members of each of the steering committees
formed under the BOC Agreements with an individual designated by AlgoRx who is
reasonably acceptable to PowderJect. In addition, PowderJect shall provide
reasonable advance notice to AlgoRx of all scheduled technical meetings with BOC
regarding the Gas Cylinder Specification, Line construction, the specifications
for Lines, and quality control issues, and AlgoRx shall have the right to attend
all such meetings. AlgoRx shall bear its own expenses related to attending each
steering committee or technical meeting.
2.3 PURCHASE AND SUPPLY. During the term of this Agreement, PowderJect
shall have Manufactured (or Manufacture, as applicable) and supply to AlgoRx all
of AlgoRx's requirements of Gas Cylinders for use in the Field as set forth on
purchase orders submitted by AlgoRx in accordance with the provisions of Section
2.5, except as otherwise provided in Section 2.13. All Gas Cylinders supplied to
AlgoRx by PowderJect hereunder shall conform to the Gas Cylinder Specification
and Packaging Specification and shall have been Manufactured in compliance with
GMP. The purchase orders submitted by AlgoRx under Section 2.5 shall reference
this Agreement and shall be governed exclusively by the terms contained herein.
Any term or condition in any order, confirmation, or other document furnished by
AlgoRx or PowderJect that is in any way inconsistent with these terms and
conditions is hereby expressly rejected.
2.4 FORECASTS. AlgoRx shall provide forecasts of its requirements of Gas
Cylinder for pre-commercial and commercial supply in accordance with this
Section 2.4. Notwithstanding the foregoing, the Parties acknowledge and agree
that the forecasting and ordering mechanisms applicable to Gas Cylinders set
forth in this Agreement are based on the BOC Agreements in effect as of the
Effective Date. In the event that (i) PowderJect amends the BOC Agreements in
effect as of the Effective Date, (ii) PowderJect enters into a new agreement
with BOC after the Effective Date, or (iii) the BOC Agreements terminate and
PowderJect Manufactures or contracts with another Third Party Manufacturer to
Manufacture Gas Cylinders as permitted under this Agreement, the Parties shall
discuss in good faith amending the forecasting and ordering mechanisms in
Sections 2.4 and 2.5 to streamline such mechanisms in an effort to reduce
administrative costs and the lead time required for forecasts and orders.
(a) PRE-COMMERCIAL SUPPLY. AlgoRx shall provide PowderJect with a
rolling, written one (1) year forecast of its reasonable anticipated
requirements of Gas Cylinders to be used in or with Devices for pre-commercial
use. Each such forecast shall cover four (4) calendar quarters, and shall
provide AlgoRx's monthly requirements for the first calendar quarter of the
forecast and quarterly requirements for the subsequent three (3) calendar
quarters. AlgoRx shall update such forecasts on or before the fiftieth (50th)
day of each calendar quarter. Notwithstanding the foregoing, AlgoRx shall
provide its initial forecast to PowderJect no later
6.
than fourteen (14) days after the Effective Date. The initial forecast shall set
forth AlgoRx's monthly requirements for April, May, and June 2002, and shall set
forth quarterly requirements for the subsequent three (3) calendar quarters.
Forecasts for AlgoRx's requirements of Gas Cylinders to be used in the
manufacture of Devices for commercial sale shall be governed by the terms of
Section 2.4(b). PowderJect understands and acknowledges that after the
Commissioning Date, there may be instances in which AlgoRx may require that Gas
Cylinders to be used in or with Devices for pre-commercial use Manufactured off
a Line, rather than the Pilot Plant (e.g., for validation testing). AlgoRx shall
notify PowderJect in its forecasts provided under this Section of any Gas
Cylinders it requires to be Manufactured off a Line, and PowderJect shall ensure
that such cylinders are Manufactured off a Line rather than the Pilot Plant;
provided, however, that for so long as the BOC Agreements are still in effect,
PowderJect shall use best efforts to have such cylinders Manufactured off a Line
rather than the Pilot Plant.
(b) COMMERCIAL SUPPLY. Not later than two (2) years plus ten (10)
days prior to AlgoRx's anticipated Commercial Launch of a Device, AlgoRx shall
provide a written, non-binding forecast of its estimated monthly requirements of
Gas Cylinders for the first twelve (12) months following Commercial Launch. Such
forecast shall be broken down by Gas Cylinder type (i.e., 3 ml, 4 ml, or 5 ml),
and shall be updated by AlgoRx not later than six (6) months plus ten (10) days
prior to Commercial Launch. Thereafter, AlgoRx shall provide PowderJect with
quarterly updates of each twelve (12) month forecast, the first three (3) months
of which shall represent a firm commitment of PowderJect to supply, and of
AlgoRx to purchase, the amounts forecasted to be ordered for such months.
PowderJect shall promptly notify AlgoRx after its receipt of each forecast of
the Line Price per Gas Cylinder that will apply for those cylinders forecast in
the binding portion of such forecast. Each such update shall be provided to
AlgoRx no later than thirty-two (32) days after the start of each new three (3)
month period. For example, if AlgoRx anticipates that the Commercial Launch of a
Device shall be in July 0000, XxxxXx shall provide to PowderJect no later than
December 21, 2003 its estimated requirements of Gas Cylinders for the period of
July 2004 through June 2005; AlgoRx shall update such forecast no later than
thirty-two (32) days after April 1, 2004, and the amount forecast for the months
of July through September 2004 shall be firm. Unless PowderJect consents, which
consent shall not be unreasonably withheld, firm forecasts shall not constitute
a binding commitment on PowderJect to supply Gas Cylinders to AlgoRx to the
extent that such forecasts exceed by more than ten percent (10%) the amount
forecast for such three (3) month period in the immediately preceding forecast.
In addition, the quantities of Gas Cylinders set forth in each three (3) month
binding forecast may not be increased or decreased by AlgoRx without
PowderJect's consent, which consent may not be unreasonably withheld.
2.5 ORDERS. AlgoRx shall provide to PowderJect purchase orders for
Gas Cylinders as set forth in this Section 2.5. Each such order shall specify
the delivery date and delivery destination. PowderJect shall use all reasonable
efforts to supply the quantities of Gas Cylinders set forth in each purchase
order by the delivery date specified in such order. The quantities of Gas
Cylinders ordered by AlgoRx in each purchase order may not be increased or
decreased without PowderJect's prior consent, which may not be unreasonably
withheld. At its option, AlgoRx may notify PowderJect that it is prepared to
bear all reasonable costs that may be incurred by PowderJect in supplying any
such extra quantities of Gas Cylinders that may be requested by AlgoRx.
PowderJect will notify AlgoRx within six (6) Business Days of its receipt
7.
of such a notice from AlgoRx hereunder whether PowderJect accepts such offer and
whether it will be able to supply such extra quantities of Gas Cylinders.
(a) PRE-COMMERCIAL SUPPLY. AlgoRx shall provide to PowderJect on a
monthly basis a purchase order for Gas Cylinders that is reasonably consistent
with that portion of the most recent forecast that pertains to the month covered
by the order. Each purchase order submitted by AlgoRx under this Section 2.5(a)
shall be submitted no later than six (6) weeks prior to the beginning of the
month specified for delivery in such purchase order.
(b) COMMERCIAL SUPPLY. AlgoRx shall provide to PowderJect monthly
purchase orders for those quantities of Gas Cylinders set forth in the
applicable binding three (3) month forecast. The purchase order for the first
month in such binding forecast shall be provided to PowderJect no later than one
(1) week after the date of such forecast. The purchase orders for the second and
third months set forth in such binding forecast shall be provided to PowderJect
no later than five (5) weeks and nine (9) weeks after the date of such forecast,
respectively. All Gas Cylinders ordered by AlgoRx pursuant to this Section
2.5(b) shall be Manufactured by a Line, rather than the Pilot Plant.
2.6 CONFIRMATION AND DELIVERY. Within seven (7) days after its receipt of
a firm order placed pursuant to Section 2.5, PowderJect shall acknowledge in
writing its receipt and acceptance of such order. In addition, PowderJect shall
promptly provide to AlgoRx a copy of each Order Acknowledgement that it receives
from BOC for all orders for Gas Cylinders placed by PowderJect that include
quantities ordered from PowderJect by AlgoRx. PowderJect shall deliver to
AlgoRx, at the delivery destination and by the delivery date specified in such
order, the specified number of Gas Cylinders, each of which conforms to the Gas
Cylinder Specification and the Packaging Specification.
2.7 ALLOCATION IN THE EVENT OF SUPPLY SHORTAGES. In the event of shortages
in the quantity of Gas Cylinders supplied by BOC or another Third Party
Manufacturer contracted by PowderJect, PowderJect shall supply to AlgoRx that
quantity of the Gas Cylinders received from BOC or such other Third Party
Manufacturer that represents the same percentage as the percentage of the total
order of Gas Cylinders placed by PowderJect that constituted Gas Cylinders
ordered by AlgoRx pursuant to Section 2.5. For example, if PowderJect places an
order with BOC for 100 Gas Cylinders and 70 of such cylinders were ordered by
AlgoRx, in the event that BOC is only able to supply 50 Gas Cylinders, 70% of
such 50 cylinders (i.e., 35 cylinders) shall be supplied to AlgoRx.
2.8 SHIPPING, INSURANCE, AND RISK OF LOSS. Shipments will be FCA
(Incoterms 2000) PowderJect's facility, by a common carrier selected by AlgoRx.
Except as provided herein with respect to Defective Products, risk of loss as to
all Gas Cylinders shipped to AlgoRx shall pass to AlgoRx once the Gas Cylinders
have been delivered by BOC, PowderJect, or a Third Party Manufacturer to the
common carrier selected by AlgoRx at the place of shipment. PowderJect shall
arrange and pay for insurance on AlgoRx's behalf to cover the Gas Cylinders for
the period of delivery of the cylinders to the common carrier until they have
been delivered to AlgoRx at the destination specified in the order.
Notwithstanding delivery, title to Gas Cylinders shall pass to AlgoRx once
PowderJect has obtained payment for such Gas Cylinders in accordance with
Section 5.1.
8.
2.9 MODIFICATION OF SPECIFICATIONS AND ACCEPTANCE TESTS. PowderJect
covenants that it shall not modify the Gas Cylinder Specification, Packaging
Specification, and Acceptance Tests under the BOC Agreements or any Third Party
Manufacturer Agreement without AlgoRx's prior written approval. If AlgoRx
requests modifications to the Gas Cylinder Specification, Packaging
Specification, or Acceptance Tests, PowderJect shall notify AlgoRx of any
resulting increase or decrease in the Pilot Plant Cylinder Cost, Cylinder Cost,
or out-of-pocket cost of the Gas Cylinder. If AlgoRx subsequently notifies
PowderJect of its acceptance of such change in the Pilot Plant Cylinder Cost,
Cylinder Cost, or out-of-pocket cost, PowderJect shall agree to modify the Gas
Cylinder Specification, Packaging Specification, or Acceptance Tests.
2.10 COMPLIANCE WITH LAWS. PowderJect shall ensure that the Gas Cylinders
to be supplied to AlgoRx hereunder are Manufactured in compliance with all
applicable present and future orders, regulations, requirements and laws of any
and all national, federal, state, provincial and local authorities and agencies,
including, without limitation, all laws and regulations of such territories
applicable to the transportation, storage, use, handling and disposal of
hazardous materials. In addition, PowderJect represents and warrants to AlgoRx
that all government permits, including, without limitation, health, safety and
environmental permits, necessary for the conduct of the actions and procedures
undertaken to Manufacture Gas Cylinders shall be maintained during the term of
this Agreement.
2.11 BOC DOSSIER. Pursuant to the XXX Xxxxxxxxxx, XXX is obligated to
assemble a dossier containing full details of any and all relevant Intellectual
Property rights owned by or licensed to BOC or its affiliates relating to the
manufacturing process for Gas Cylinders, including detailed manufacturing
techniques, all relevant standard operating procedures, all component quality
specifications, and all regulatory information that is sufficient to enable
PowderJect or its nominee to Manufacture or have Manufactured the Gas Cylinders
for use in the Field (the "BOC DOSSIER"), which dossier is updated from time to
time and kept in escrow. PowderJect shall diligently take all reasonable steps
to ensure that BOC assembles such dossier and updates it as required under the
terms of the BOC Agreements. PowderJect shall promptly notify AlgoRx upon the
release of the BOC Dossier to PowderJect, and the reason for such release. In
addition, upon AlgoRx's request, PowderJect shall promptly provide a copy of the
BOC Dossier to AlgoRx. AlgoRx agrees to be bound by obligations of
confidentiality with respect to the BOC Dossier that are consistent with the
obligations of confidentiality, if any, owed by PowderJect to BOC with respect
thereto for so long as PowderJect is bound by such obligations.
2.12 BOC'S BREACH OF BOC AGREEMENTS. If BOC defaults on its obligations
under the BOC Agreements and such default results in PowderJect's inability to
supply AlgoRx's requirements of Gas Cylinders, PowderJect shall diligently take
all reasonable steps to enforce its rights under the BOC Agreements and shall
seek appropriate remedies that are in the best interests of both AlgoRx and
PowderJect to ensure supply of Gas Cylinders including, without limitation,
seeking specific performance or other injunctive relief available to PowderJect
or terminating the BOC Agreements.
2.13 TERMINATION OF BOC AGREEMENTS. PowderJect shall promptly notify
AlgoRx if it receives a notice of termination of any of the BOC Agreements from
BOC, and shall disclose to AlgoRx the time period during which BOC shall be
obligated to continue to Manufacture and
9.
supply Gas Cylinders under the BOC Agreements (such period, the "BOC WIND DOWN
PERIOD"), Upon PowderJect's receipt of such notice of termination, PowderJect
and AlgoRx shall meet in good faith to discuss their future requirements and to
decide the best course of action, taking into consideration both AlgoRx's and
PowderJect's needs and the fact that Gas Cylinders are a unique commodity.
AlgoRx shall have the option to (a) continue to obtain its requirements of Gas
Cylinders from PowderJect, or (b) terminate this Agreement effective upon the
expiration of the BOC Wind Down Period and Manufacture, or designate a Third
Party Manufacturer to Manufacture, AlgoRx's requirements of Gas Cylinders.
Notwithstanding the foregoing, AlgoRx's right to terminate this Agreement and
Manufacture or have Manufactured its requirements of Gas Cylinders under this
Section 2.13 is contingent upon the termination of PowderJect's contractual
supply relationship with BOC and PowderJect obtaining a license under BOC's
Intellectual Property Rights such that PowderJect is able to grant the
sublicense to AlgoRx set forth in Section 2.15. PowderJect shall notify AlgoRx
if PowderJect intends to have a Third Party Manufacturer Manufacture Gas
Cylinders. If AlgoRx elects to continue to obtain its requirements of Gas
Cylinders from PowderJect after the BOC Agreements have terminated, AlgoRx shall
have the right to approve the Third Party Manufacturer selected by PowderJect to
Manufacture Gas Cylinders, which approval shall not be unreasonably withheld. In
addition, AlgoRx shall have the right to review and approve the agreement
entered into between PowderJect and such Third Party Manufacturer, which
agreement must be consistent with AlgoRx's rights and obligations under this
Agreement. If AlgoRx elects to terminate this Agreement and Manufacture, or
designate a Third Party Manufacturer to Manufacture, AlgoRx's requirements of
Gas Cylinders, the license granted to AlgoRx in Section 2.15 shall become
exercisable on the date on which PowderJect obtains a license under BOC's
Intellectual Property Rights such that PowderJect is able to grant the license
to AlgoRx set forth in Section 2.15. In any event, AlgoRx shall be obligated to
continue to obtain its requirements of Gas Cylinders from PowderJect during the
BOC Wind Down Period.
2.14 THIRD PARTY MANUFACTURER'S BREACH. If PowderJect has entered into a
Third Party Manufacturer Agreement for the Manufacture of Cylinders for supply
to both PowderJect and AlgoRx pursuant to Section 2.13, and if such Third Party
Manufacturer defaults on its obligations under such agreement and such default
results in PowderJect's inability to supply AlgoRx's requirements of Gas
Cylinders, PowderJect shall diligently take all reasonable efforts to enforce
its rights under such Third Party Manufacturer Agreements and shall seek
appropriate remedies that are in the best interests of both AlgoRx and
PowderJect to ensure supply of Gas Cylinders including, without limitation,
seeking specific performance or other injunctive relief available to PowderJect
or terminating such Third Party Manufacturer Agreement.
2.15 LICENSE. PowderJect hereby grants to AlgoRx a non-exclusive,
worldwide, royalty-free, irrevocable sublicense (with rights to grant further
sublicenses) under Intellectual Property Rights in the Gas Supply System, in the
Gas Cylinder, in any variants, equivalents, or derivatives of the Gas Cylinder,
and in all specifications, designs, data, models, prototypes, information,
discoveries, inventions, and any improvements thereto, that become licensed to
PowderJect by BOC or its Affiliates pursuant to the BOC Agreements at any time
prior to or after the effective date of termination of this Agreement, to the
extent necessary to Manufacture and have Manufactured Gas Cylinders and/or
Devices containing Gas Cylinders for use in the Field. The sublicense granted to
AlgoRx under this Section 2.15 shall become exercisable as set forth in Sections
2.13, 9.1, 9.2(b), 9.2(c), or 9.3.
10.
ARTICLE 3
QUALITY CONTROL; ACCEPTANCE AND REJECTION
3.1 QUALITY CONTROL. PowderJect shall ensure that PowderJect, BOC, or any
Third Party Manufacturer, as applicable, maintains a quality control and testing
program consistent with GMP to ensure that the Gas Cylinders supplied to AlgoRx
conform to the Gas Cylinder Specification and the Packaging Specification (the
"QUALITY CONTROL PROCEDURES"). Each batch of Gas Cylinders delivered to AlgoRx
shall be accompanied by a written certificate of analysis confirming that such
batch of Gas Cylinders has been tested in accordance with the Acceptance Tests,
and that the Gas Cylinders conform to the Gas Cylinder Specifications and the
Packaging Specifications. The Acceptance Tests may be amended from time to time
pursuant to Section 2.9.
3.2 QUALITY CONTROL AUDITS. PowderJect shall ensure that PowderJect, BOC,
or any Third Party Manufacturer, as applicable, maintains all documentation and
Acceptance Test results for each Gas Cylinder for a period of six (6) years
after the date on which such Gas Cylinders are delivered to AlgoRx. During the
term of the Agreement, AlgoRx may periodically review such quality control
program documentation, and shall have the right to audit, survey, or verify the
adherence of PowderJect, BOC, or any other Third Party Manufacturer, as
applicable, to the Quality Control Procedures. In addition, upon written request
to PowderJect, AlgoRx shall have the right to have representatives or Regulatory
Authorities visit the manufacturing facilities of PowderJect, BOC, or any other
Third Party Manufacturer, as applicable, during normal business hours to review
such manufacturer's manufacturing operations, to assess compliance with the
Quality Control Procedures, and to discuss any related issues with such
manufacturer's manufacturing and management personnel.
3.3 INSPECTION AND REJECTION.
(a) INSPECTION; REJECTION; ACCEPTANCE. AlgoRx may reject Gas
Cylinders that are defective or that do not conform to the Gas Cylinder
Specification or Packaging Specification ("DEFECTIVE PRODUCTS") by giving
written notice to PowderJect, within eighteen (18) Business Days of receipt by
AlgoRx of such Defective Products, which notice (i) states that there are
defects in the Gas Cylinders introduced prior to delivery that cause such Gas
Cylinders to be defective or not conform to the Gas Cylinder Specification or
Packaging Specification, and (ii) identifies in reasonable detail the nature of
the defect and the basis for AlgoRx's determination as to the nature of the
defect. If AlgoRx fails to so notify PowderJect of any Defective Products within
such eighteen (18) Business Day period, AlgoRx will be deemed to have accepted
the Gas Cylinders, subject to Section 3.3(b), and except for claims for
indemnification pursuant to Section 7.1 or breach of warranty under Section
6.2(a).
(b) REVOCATION OF ACCEPTANCE. If, after initial acceptance but
within fifty-five (55) Business Days of its receipt of Gas Cylinders, AlgoRx
discovers that such Gas Cylinders are Defective Products and that the nature of
such defect could not have been discovered by performing the Acceptance Tests
within eighteen (18) Business Days of AlgoRx's receipt of such products, AlgoRx
may revoke its acceptance of such Defective Products by providing written notice
to PowderJect of such revocation. Such notice of revocation shall (i)
11.
state that there are defects in the Gas Cylinders introduced prior to delivery
that cause such Gas Cylinders to be defective or not to conform to the Gas
Cylinder Specification or Packaging Specification, and (ii) identify in
reasonable detail the nature of the defect and the basis for AlgoRx's
determination as to the nature of the defect. If AlgoRx fails to so notify
PowderJect of such revocation within such fifty-five (55) Business Day period,
AlgoRx will be deemed to have accepted the Gas Cylinders and to have irrevocably
waived any claims it may have with respect to such Defective Products except for
claims for indemnification pursuant to Section 7.1 or breach of warranty under
Section 6.2(a).
(c) REPLACEMENTS. At PowderJect's sole option, AlgoRx shall either
return Defective Products to PowderJect at PowderJect's expense or shall destroy
such Defective Products and certify to PowderJect that such destruction is
complete. The costs of destruction and subsequent disposal shall be at
PowderJect's expense. With respect to Defective Products that have been properly
rejected pursuant to Section 3.3(a) or 3.3(b), AlgoRx shall not be required to
pay for such Defective Products under Section 5.1. PowderJect shall replace such
Defective Products as quickly as possible, and AlgoRx shall pay PowderJect for
such replacement Gas Cylinders in accordance with Section 5.1, or in the event
that AlgoRx has already paid for the Defective Products, PowderJect shall
replace such Defective Products at its own expense.
(d) RESOLUTION OF DISPUTES. If PowderJect disagrees with AlgoRx's
claim that certain Gas Cylinders are Defective Products, the Parties will first
use good faith efforts to settle such dispute within thirty (30) days of
AlgoRx's notice of such defects; if they are unable to do so within such time
period, the dispute will be resolved by a mutually acceptable independent Third
Party tester after analysis of the relevant Gas Cylinders. Such Third Party
tester shall determine whether such Gas Cylinders are defective, and the Parties
agree that such tester's determination shall be final, binding, and
determinative as to whether such Gas Cylinders are Defective Products. The Party
against whom the Third Party tester rules shall bear all costs of the Third
Party testing.
3.4 POWDERJECT NOTICE OF DEFECTIVE PRODUCTS. PowderJect shall promptly
notify AlgoRx if it discovers that any Gas Cylinders . Manufactured by
PowderJect, BOC, or a Third Party Manufacturer are defective or do not conform
to the Gas Cylinder Specification or Packaging Specification. Such notice shall
identify in reasonable detail the nature of the defect, the lot or batch of such
defective products, and the basis for PowderJect's determination as to the
nature of the defect.
ARTICLE 4
RECORDS, REPORTS, AND REGULATORY MATTERS
4.1 MANUFACTURING REGULATORY COMPLIANCE. PowderJect shall ensure that the
Gas Cylinders to be supplied under this Agreement are Manufactured in full
compliance with GMP and the Gas Cylinder Specification. AlgoRx will notify
PowderJect of any regulatory requirements applicable to the Manufacture of Gas
Cylinders, and PowderJect shall ensure that Gas Cylinders shall be Manufactured
in compliance with such regulatory requirements. Not less than four (4) months
prior to the date on which AlgoRx files an application for Regulatory
12.
Approval for a Device in a particular country, the Parties shall enter into a
technical agreement, as required by Article 12 of Commission Directive
91/356/EEC of June 13, 1991, which sets out the technical responsibilities of
the Parties in ensuring that Devices are manufactured for sale according to the
relevant Regulatory Approval and any other relevant requirements.
4.2 RECORDS AND SAMPLES. PowderJect shall ensure that complete, accurate,
and authentic accounts, notes, product stability records, quality control
records, batch release records, deviation reports, batch records, data, and all
other records pertaining to the Manufacture, processing, labeling, storage,
testing, and distribution of the Gas Cylinders supplied hereunder are kept in
accordance with applicable laws and regulations, including, without limitation,
master production and control records. In addition, PowderJect shall ensure that
samples of Gas Cylinders from each batch manufactured pursuant to this Agreement
are retained after AlgoRx's acceptance of each such batch. PowderJect shall
ensure that such records and samples are retained for a period of six (6) years
following the date of Manufacture, or longer if required by law, and, upon
request, shall make available to AlgoRx copies of such records and portions of
the samples at AlgoRx's expense. After such time period, PowderJect shall
deliver such records and samples to AlgoRx.
4.3 PRODUCT RECALLS, MARKET WITHDRAWALS, OR CORRECTIONS.
(a) PowderJect shall ensure that records are maintained as may be
necessary to permit a recall or a field correction of any of the Gas Cylinders
delivered to AlgoRx or to customers of AlgoRx or its Affiliates or sublicensees
("ALGORX CUSTOMERS") worldwide that is effected either voluntarily or under a
threat of, or a directive by, any governmental agency. Each Party shall notify
the other Party immediately by telephone (to be confirmed in writing within five
(5) Business Days) upon discovery that any Gas Cylinder is the subject of a
recall, market withdrawal, or correction. The decision to initiate a recall or
to take some other corrective action as to Gas Cylinders supplied to AlgoRx, if
any, shall be made and implemented solely by AlgoRx. PowderJect will cooperate
as reasonably required by AlgoRx in accordance with all applicable laws and
regulations, including assisting with the development of a recall plan. Subject
to Section 4.3(b), AlgoRx shall bear the cost and expense of all recalls, market
withdrawals, or corrections of Gas Cylinders delivered to AlgoRx or AlgoRx
Customers.
(b) To the extent that a recall, market withdrawal, or correction
results from, or arises out of, Gas Cylinders supplied to AlgoRx that do not
conform to the Gas Cylinder Specifications or that were not Manufactured in
compliance with GMP, then (i) all related costs and expenses reasonably incurred
by AlgoRx shall be borne by PowderJect, and (ii) PowderJect shall use diligent
efforts to replace the affected Gas Cylinders with replacement Gas Cylinders
that are Manufactured in compliance with GMP and that conform to the Gas
Cylinder Specifications, free of charge, as soon as reasonably practicable from
the date that AlgoRx notifies PowderJect regarding such event with respect to
the Gas Cylinders. In the event that PowderJect is unable to replace the
affected Gas Cylinders within sixty (60) days from the date that AlgoRx notifies
PowderJect regarding such event, PowderJect shall reimburse AlgoRx for the Price
that AlgoRx paid to PowderJect for such Gas Cylinders.
4.4 PRODUCT RETURNS. AlgoRx shall be solely responsible for handling
returns of Devices containing Gas Cylinders from AlgoRx Customers. PowderJect
shall provide AlgoRx
13.
with such assistance as AlgoRx may reasonably require to handle such returns,
which assistance shall be provided at AlgoRx's sole cost and expense unless such
returns result from or arise out of Gas Cylinders supplied to AlgoRx that were
not Manufactured in compliance with GMP or do not conform to the Gas Cylinder
Specification. To the extent that a return results from, or arises out of, Gas
Cylinders supplied to AlgoRx that were not Manufactured in compliance with GMP
or do not conform to the Gas Cylinder Specification, PowderJect shall use
diligent efforts to replace the returned Gas Cylinders with replacement Gas
Cylinders Manufactured in compliance with GMP and that conform to the Gas
Cylinder Specification free of charge as soon as reasonably practicable. In the
event that (i) PowderJect is unable to replace the returned Gas Cylinders within
sixty (60) days after the date that PowderJect receives notice from AlgoRx of
the returned Gas Cylinders, or (ii) such replacement Gas Cylinders are also
returned because they do not conform to the Gas Cylinder Specification or were
not Manufactured in compliance with GMP, PowderJect shall reimburse AlgoRx for
the Price that AlgoRx paid to PowderJect for the affected Gas Cylinders. In all
other circumstances, customer returns or similar actions shall be made at
AlgoRx's sole cost and expense.
4.5 CUSTOMER QUESTIONS AND COMPLAINTS. AlgoRx shall have the sole
responsibility for responding to questions and complaints relating to Gas
Cylinders from AlgoRx Customers. Questions or complaints received by PowderJect
from AlgoRx Customers relating to Gas Cylinders shall be promptly referred to
AlgoRx. PowderJect shall cooperate and provide reasonable assistance to allow
AlgoRx to determine the cause of and resolve any customer questions and
complaints. Such assistance shall include follow-up investigations, including
testing. In addition, within ten (10) days from the date of AlgoRx's request,
PowderJect shall provide AlgoRx with all information in its possession that will
enable AlgoRx to respond properly to questions or complaints related to the Gas
Cylinders supplied hereunder. Unless it is determined that the cause of any
customer complaint resulted from Gas Cylinders supplied to AlgoRx that were not
Manufactured in compliance with GMP or do not conform to the Gas Cylinder
Specification, all costs arising out of handling AlgoRx Customer questions and
complaints shall be borne by AlgoRx. If such complaint resulted from supply of
Gas Cylinders to AlgoRx that were not Manufactured in compliance with GMP or do
not conform to the Gas Cylinder Specification, PowderJect shall reimburse all
related expenses incurred by AlgoRx.
4.6 FIELD ALERT REPORTING. If PowderJect receives information concerning
any bacteriological contamination, or any significant chemical, physical, or
other change or deterioration in a Gas Cylinder supplied to AlgoRx, or any
failure of one or more batches of Gas Cylinders supplied to AlgoRx to meet the
Gas Cylinder Specification (a "FIELD ALERT"), PowderJect shall notify AlgoRx
immediately by telephone (to be confirmed in writing within twenty-four (24)
hours). AlgoRx shall be responsible for receiving, investigating, and
documenting all such information relating to such Field Alerts. AlgoRx will be
solely responsible for filing all post-marketing Field Alert reports required by
Regulatory Authorities, or as required by applicable laws or regulations.
PowderJect will cooperate as reasonably required by AlgoRx with the
investigation of such incidents. If the Field Alert arises out of PowderJect's
failure to supply Gas Cylinders that were Manufactured in compliance with GMP or
that conform to the Gas Cylinder Specification, PowderJect shall bear the cost
and expense of investigating and responding to such Field Alert, and shall use
diligent efforts to replace the affected Gas Cylinders with replacement Gas
Cylinders Manufactured in compliance with GMP that conform to the Gas Cylinder
Specification as soon as reasonably practicable. In the event
14.
that PowderJect is unable to replace the affected Gas Cylinders within sixty
(60) days from the date that PowderJect becomes aware of such Field Alert,
PowderJect shall reimburse AlgoRx for the Price that AlgoRx paid to PowderJect
for the affected Gas Cylinders.
4.7 GOVERNMENTAL INSPECTIONS. PowderJect shall promptly advise AlgoRx of
any notice or request that BOC, or any Third Party Manufacturer designated by
PowderJect to Manufacture Gas Cylinders supplied to AlgoRx, receives from a
governmental agency or Regulatory Authority regarding inspection of its
facilities relating to its manufacture of the Gas Cylinders, and shall permit
(to the extent reasonably practicable) AlgoRx or its designated representative
to attend such inspection. PowderJect shall provide to AlgoRx all correspondence
and reports that it receives or is forwarded by BOC or a Third Party
Manufacturer from a governmental agency or Regulatory Authority in connection
with the manufacture of Gas Cylinders supplied to AlgoRx. PowderJect shall, in a
timely manner and to the satisfaction of AlgoRx. rectify or procure the
rectification of any deficiencies identified during the course of any audit by
AlgoRx pursuant to Section 3.2 or any inspection by a Regulatory Authority
pursuant to this Section 4.7.
ARTICLE 5
PAYMENT
5.1 PAYMENT. AlgoRx shall pay PowderJect the price set forth in this
Section 5.1 for each Gas Cylinder supplied to AlgoRx under this Agreement, as
such price may be adjusted in accordance with Section 5.2.
(a) PILOT PLANT PRICE. For each Gas Cylinder ordered by AlgoRx in
accordance with Sections 2.4(a) and 2.5(a) and Manufactured by the Pilot Plant,
AlgoRx shall pay PowderJect the Pilot Plant Cylinder Cost, plus the reasonable
costs of packaging, transport, including handling charges, insurance, and any
applicable governmental taxes or duties (including, without limitation, any
valued added taxes or sales taxes). The costs of packaging shall not include any
share of the capital costs relating to packaging equipment.
(b) LINE PRICE. For each Gas Cylinder ordered by AlgoRx in
accordance with Sections 2.4(a) and 2.5(a) and Manufactured by a Line, or
ordered by AlgoRx in accordance with Sections 2.4(b) and 2.5(b), AlgoRx shall
pay PowderJect the Cylinder Cost (if PowderJect Manufactured such Gas Cylinder)
or the actual amount of PowderJect's out-of-pocket cost of procuring Gas
Cylinders from BOC or a Third Party Manufacturer (the "LINE PRICE"), plus the
reasonable costs of packaging, transport, including handling charges, insurance,
and any applicable governmental taxes or duties (including, without limitation,
any valued added taxes or sales taxes). The costs of packaging shall not include
any share of the capital costs relating to packaging equipment. Except as set
forth in Section 5.2, the Line Price of Gas Cylinders shall not exceed
************************ per Gas Cylinder (the "CAPPED PRICE").
Notwithstanding the foregoing, the Capped Price shall not apply to any Gas
Cylinders ordered by AlgoRx for pre-commercial supply but Manufactured by a Line
at AlgoRx's request; provided, however, that PowderJect agrees to use reasonable
efforts to keep the Cylinder Cost for such cylinders as low as possible in order
to ensure that such cost is not excessive or prohibitive for AlgoRx. The Parties
acknowledge and agree that the Line Price is expected to decrease as the volume
of Gas
15.
Cylinders being Manufactured increases. In the event that PowderJect is
Manufacturing Gas Cylinders for supply to AlgoRx, PowderJect acknowledges and
agrees that it shall be obligated to use best efforts to run all Lines as
efficiently as possible in order to reduce the Cylinder Cost. If PowderJect is
Manufacturing Gas Cylinders, the Cylinder Cost for the first twelve (12) months
that PowderJect is Manufacturing such cylinders (the "INITIAL PRODUCTION
PERIOD") shall be the Capped Price. After the Initial Production Period,
PowderJect shall be in a position to establish the actual cost of Manufacture of
such Gas Cylinders. If the actual Cylinder Cost upon the expiration of the
Initial Production Period is less than the Capped Price, PowderJect shall
promptly reimburse AlgoRx for its overpayment for Gas Cylinders during the
Initial Production Period. Notwithstanding the foregoing, if at any time during
the term of this Agreement the Line Price at which PowderJect is supplying Gas
Cylinders to AlgoRx is less than PowderJect's actual Cylinder Cost or
out-of-pocket cost due to the Capped Price (such difference, the "LOSS"), then
PowderJect shall be obligated to reimburse AlgoRx for overpayment for Gas
Cylinders during the Initial Production Period only to the extent that the
amount of such overpayment is greater than PowderJect's aggregate Loss during
such period, and PowderJect may continue to charge AlgoRx the Capped Price for
each Gas Cylinder after the Initial Production Period even if the Line Price is
subsequently less than the Capped Price, until PowderJect has recovered the full
amount of its Loss.
(c) INVOICE AND PAYMENT. PowderJect shall invoice AlgoRx for each
shipment of Gas Cylinders delivered to AlgoRx, and AlgoRx shall pay such invoice
not later than twenty-five (25) days after delivery of the applicable Gas
Cylinders. Notwithstanding the foregoing, if AlgoRx rejects any Gas Cylinders in
good faith pursuant to Section 3.3(a) or Section 3.3(b), AlgoRx shall have no
payment obligation to PowderJect with respect to such Gas Cylinders unless and
until any such Gas Cylinders have been replaced pursuant to Section 3.3(c) or
any dispute regarding whether such Gas Cylinders are defective is resolved in
PowderJect's favor pursuant to Section 3.3(d).
5.2 CAPPED PRICE ADJUSTMENTS. During the term of this Agreement, the
Capped Price may be increased or decreased only as set forth in this Section
5.2.
(a) The Capped Price may be increased or decreased to reflect any
increase or decrease in Manufacturing costs due to a modification in the Gas
Cylinder Specification, Packaging Specification, or Acceptance Tests requested
by AlgoRx pursuant to Section 2.9.
(b) The Capped Price may be increased or decreased upon three (3)
months' written notice to reflect any increase or decrease in Manufacturing
costs due to governmental action or changes to GMP requirements.
(c) Commencing on the first anniversary of the Commercial Launch of
the first Licensed Product, the Capped Price shall be adjusted to reflect any
increase or decrease in the New York Mercantile Exchange COMEX Division Aluminum
index (the "NYME INDEX") or such other prices index as may reasonably be agreed
by the Parties to reflect an increase or decrease in the cost of raw materials
used in the Manufacture of Gas Cylinders. The amount of such increase or
decrease shall be calculated by determining the percentage by which the moving
average of the NYME Index for the 30-day period immediately prior to Commercial
Launch increased or decreased from the moving average of the NYME Index for the
30-day period
16.
immediately prior to the first anniversary of Commercial Launch. Notwithstanding
the foregoing, only that portion of the Capped Price allocable to the cost of
raw materials shall be adjusted to reflect the increase or decrease in the NYME
Index. During the term of this Agreement, the Capped Price shall be similarly
adjusted on each subsequent anniversary of Commercial Launch.
(d) At any time after PowderJect has recovered the full amount of
its Loss under Section 5.1, if AlgoRx reasonably believes that the Line Price
has decreased, or reasonably should have decreased, below the Capped Price per
Gas Cylinder, AlgoRx shall so notify PowderJect in writing. In such instance,
AlgoRx shall have the right upon reasonable notice to audit all records related
to the Manufacture of Gas Cylinders, including financial records, and to inspect
the manufacturing operations of all Lines. AlgoRx and PowderJect shall review
and discuss in good faith whether PowderJect should be able to Manufacture Gas
Cylinders in a more efficient manner that would result in the decrease of the
Line Price and whether the Capped Price should be decreased. If, after good
faith negotiations, the Parties are unable to agree upon whether or to what
extent the Capped Price and the Line Price should be decreased, the Parties
shall select a mutually agreeable arbitrator who has significant relevant
experience in the pharmaceutical industry and has no affiliation or pre-existing
relationship with either AlgoRx or PowderJect. The arbitrator's decision
regarding such issue shall be binding on the Parties, and the Line Price or
Capped Price shall be adjusted as appropriate to reflect such decision. In the
event that an audit by AlgoRx reveals that PowderJect has been charging AlgoRx
more than the actual Line Price per Gas Cylinder, AlgoRx shall be entitled to a
credit in the amount that AlgoRx has overpaid for Gas Cylinders against future
payments owed by AlgoRx for supply of Gas Cylinders.
(e) At any time after the third anniversary of AlgoRx's Commercial
Launch of a Licensed Product, if PowderJect reasonably believes that the Capped
Price should be increased, PowderJect shall so notify AlgoRx in writing. In such
instance, the Parties shall review and discuss in good faith whether the Capped
Price should be increased. If, after good faith negotiations, the Parties are
unable to agree upon whether or to what extent the Capped Price should be
increased, the Parties shall select a mutually agreeable arbitrator who has
significant relevant experience in the pharmaceutical industry and has no
affiliation or pre-existing relationship with either AlgoRx or PowderJect. The
arbitrator's decision regarding such issue shall be binding on the Parties, and
the Capped Price shall be adjusted as appropriate to reflect such decision.
5.3 REPORTS. All invoices for Gas Cylinders supplied to AlgoRx shall be
accompanied by a statement setting forth the calculation of the Cylinder Cost or
the out-of-pocket cost, as applicable, for such Gas Cylinders.
5.4 PAYMENT METHOD. All payments due to PowderJect under this Agreement
shall be made by bank wire transfer in immediately available funds to an account
designated by PowderJect. All payments hereunder shall be made in U.K. Sterling.
5.5 TAXES. PowderJect shall pay any and all taxes levied on account of
payments it receives under this Agreement. All amounts due hereunder shall be
without deduction of exchange, collection or other charges, provided that if
AlgoRx is required to withhold and pay on
17.
behalf of PowderJect any income or other similar tax with respect to the amounts
payable under this Agreement, AlgoRx shall deduct such tax payments from and
offset against said payments prior to remittance to PowderJect; and further
provided that in regard to any tax so deducted, AlgoRx shall give or cause to be
given to PowderJect such assistance as may reasonably be necessary to enable
PowderJect to claim exemption therefrom or credit therefor, and in each case
shall furnish PowderJect proper evidence of the taxes paid on its behalf.
5.6 RECORDS; AUDIT. PowderJect shall keep complete, true and accurate
books of account and records for the purpose of determining the Cylinder Cost or
out-of-pocket cost, as appropriate, of the Gas Cylinders supplied to AlgoRx
under this Agreement. Such books and records shall be kept for at least three
(3) years following the end of the calendar quarter to which they pertain. Such
records will open for inspection during such three (3) year period by
independent accountants who agree to appropriate and typical confidentiality
restrictions, solely for the purpose of verifying payment statements hereunder.
Such inspections shall be made no more than once each calendar year, at
reasonable times and on reasonable notice. To the extent that such audit reveals
any overpayments by AlgoRx for Gas Cylinders supplied under this Agreement,
PowderJect shall refund AlgoRx for the amount of such overpayment within thirty
(30) days from the accountant's report, plus interest (at the rate set forth in
Section 5.7) from the original date due. Audits conducted under this Section 5.6
shall be at the expense of AlgoRx, unless a variation or error producing an
increase exceeding five percent (5%) of the Cylinder Cost or out-of-pocket cost
stated for any period covered by the inspection is established in the course of
such inspection, whereupon all costs and expenses relating to such inspection
will be paid promptly PowderJect.
5.7 INTEREST. If AlgoRx fails to make any payment to PowderJect under this
Agreement when due, then interest shall accrue on any amount owed on a daily
basis at the greater of a rate equal to one and one-half percent (1.5%) per
month, or, if lesser, at the maximum rate permitted by applicable law.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
6.1 MUTUAL REPRESENTATIONS AND WARRANTIES. Each Party represents and
warrants the following:
(a) CORPORATE POWER. Such Party is duly organized and validly
existing under the laws of the state of its organization and has full corporate
power and authority to enter into this Agreement and to carry out the provisions
hereof.
(b) DUE AUTHORIZATION. Such Party is duly authorized to execute and
deliver this Agreement and to perform its obligations hereunder. The person
executing this Agreement on such Party's behalf has been duly authorized to do
so by all requisite corporate action.
(c) BINDING AGREEMENT. This Agreement is a legal and valid
obligation binding upon the Parties and enforceable in accordance with its
terms. The execution, delivery and performance of this Agreement by each Party
does not conflict with any agreement,
18.
instrument or understanding, oral or written, to which it is a Party or by which
it may be bound, nor, to the Parties' knowledge, does it violate any material
Law or regulation of any court, governmental body or administrative or other
agency having jurisdiction over it.
6.2 WARRANTIES OF POWDERJECT. PowderJect warrants that:
(a) all of the Gas Cylinders supplied to AlgoRx under this Agreement
shall conform to the Gas Cylinder Specification and Packaging Specification and
shall be Manufactured in accordance with GMP;
(b) all of the Gas Cylinders supplied to AlgoRx shall have free and
clear title within thirty (30) days after AlgoRx has paid PowderJect for such
Gas Cylinders; and
(c) as of the Effective Date, it is in substantial compliance with,
and is not in material default under, any of the BOC Agreements.
6.3 SAVE AS EXPRESSLY STATED IN THIS AGREEMENT, NO REPRESENTATION OR
WARRANTY WHATSOEVER, IS MADE OR GIVEN BY OR ON BEHALF OF ALGORX OR POWDERJECT.
ALL REPRESENTATIONS AND WARRANTIES, WHETHER ARISING BY OPERATION OF LAW OR
OTHERWISE, ARE HEREBY EXPRESSLY EXCLUDED.
ARTICLE 7
INDEMNIFICATION
7.1 INDEMNITY.
(a) BY POWDERJECT. PowderJect shall indemnify, defend, and hold
harmless AlgoRx and AlgoRx's directors, officers, employees, agents, and
customers from and against any and all third party liabilities, claims, suits,
losses, costs, and expenses (collectively "CLAIMS") resulting from or arising
out of (i) the negligence or willful misconduct of PowderJect or its officers,
directors, employees, or agents, or (ii) PowderJect's breach of its obligations
under this Agreement. Such indemnity shall not apply to the extent that AlgoRx
has an indemnity obligation for such Claim pursuant to Section 7.1(b), or if
AlgoRx fails to comply with the indemnification procedures set forth in Section
7.2.
(b) BY ALGORX. AlgoRx shall indemnify, defend, and hold harmless
PowderJect and PowderJect's directors, officers, employees, and agents from and
against any and all Claims resulting from or arising out of (i) the use of the
Gas Cylinders supplied to AlgoRx hereunder (except to the extent that the harm
was caused by a Gas Cylinder that was defective upon delivery to AlgoRx or that
did not conform to the Gas Cylinder Specification), (ii) the negligence or
willful misconduct of AlgoRx or its officers, directors, employees, or agents,
or (iii) AlgoRx's breach of its obligations under this Agreement. Such indemnity
shall not apply to the extent that PowderJect has an indemnity obligation for
such Claim pursuant to Section 7.1 (a), or if PowderJect fails to comply with
the indemnification procedures set forth in Section 7.2.
19.
7.2 INDEMNIFICATION PROCEDURES. If either Party is entitled to
indemnification under this Article 7 (the "INDEMNIFIED PARTY"), it shall give
written notice to the Party providing indemnification (the "INDEMNIFYING
PARTY") of any Claim that may be subject to indemnification promptly after
learning of such Claim, and the Indemnifying Party shall assume the defense of
such Claim with counsel reasonably satisfactory to the Indemnified Party. If
such defense is assumed by the Indemnifying Party with counsel so selected, the
Indemnifying Party will not be subject to any liability for any settlement of
such Claim made by the Indemnified Party without the Indemnifying Party's
consent (but such consent will not be unreasonably withheld or delayed), and
will not be obligated to pay the fees and expenses of any separate counsel
retained by the Indemnified Party with respect to such Claim.
7.3 LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE OTHER
FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES
ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY
NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING THE FOREGOING,
NOTHING IN THIS PARAGRAPH IS INTENDED TO LIMIT OR RESTRICT THE INDEMNIFICATION
RIGHTS OR OBLIGATIONS OF ANY PARTY UNDER SECTION 7.1 OR 7.2, OR DAMAGES
AVAILABLE FOR BREACHES OF CONFIDENTIALITY OBLIGATIONS IN ARTICLE 8.
7.4 POWDERJECT'S LIMITATION OF LIABILITY. AlgoRx accepts and agrees that
notwithstanding anything to the contrary herein, PowderJect's total liability
under this Agreement, howsoever arising, shall be limited to *********** per any
one event and *********** in the annual aggregate, and AlgoRx will indemnify
PowderJect for all claims or losses in excess of that amount howsoever caused
(including, without limitation, PowderJect's negligence) under this Agreement.
7.5 INSURANCE. During the term of this Agreement, AlgoRx shall secure and
maintain in full force and effect insurance coverage for products liability
claims in amounts appropriate to the conduct of AlgoRx's business. AlgoRx agrees
that, to the extent that the amount of any Claims (as such term is defined in
Section 7.1) brought against AlgoRx are covered by such products liability
insurance, AlgoRx shall not seek indemnification from PowderJect for such
Claims, even if such Claims are attributable to the negligence or willful
misconduct of PowderJect or its officers, directors, employees, or agents or
PowderJect's breach of its obligations under this Agreement.
ARTICLE 8
CONFIDENTIALITY
8.1 CONFIDENTIALITY. Except to the extent expressly authorized by this
Agreement or otherwise agreed to in writing by the Parties, each Party agrees
that, for the term of this Agreement and for seven (7) years thereafter, it
shall keep confidential and shall not publish or otherwise disclose and shall
not use for any purpose other than as provided for in this Agreement any
Confidential Information furnished to it by the other Party pursuant to this
Agreement, except that the foregoing shall not apply to any information for
which the receiving Party can demonstrate, by competent proof, that it:
20.
(a) was already known to the receiving Party, other than under an
obligation of confidentiality, at the time of disclosure by the other Party;
(b) was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the receiving Party;
(c) later became part of the public domain through no act or
omission of the receiving Party;
(d) was disclosed to the receiving Party, other than under an
obligation of confidentiality to a third Party, by a third Party who had no
obligation to the disclosing Party not to disclose such information to others;
or
(e) "was independently developed by employees of either Party who
were unaware of and did not have access to Confidential Information disclosed by
either Party.
8.2 AUTHORIZED DISCLOSURE. Each Party may disclose Confidential
Information disclosed to it by the other Party to the extent such disclosure is
reasonably necessary for the following reasons:
(a) regulatory filings, including filings with the U.S. Securities
Exchange Commission and Regulatory Authorities;
(b) prosecuting or defending litigation;
(c) complying with applicable governmental regulations and legal
requirements; and
(d) disclosure to Affiliates, sublicensees, and potential investors
who agree in writing to be bound by similar terms of confidentiality.
Notwithstanding the foregoing, in the event a Party is required to make a
disclosure of the other Party's Confidential Information pursuant to this
Section 8.2 it will, except where impracticable, give reasonable advance notice
to the other Party of such disclosure and use best efforts to secure
confidential treatment of such information. In any event, the Parties agree to
take all reasonable actions to avoid any unauthorized use or disclosure of
Confidential Information hereunder.
8.3 EMPLOYEES; AGENTS. Each Party shall ensure that each employee,
consultant, or other agent of it, or of its Affiliates or sublicensees, who has
access to Confidential Information is bound to obligations of confidentiality
and non-use at least equivalent in scope to those set forth in Sections 8.1 and
8.2.
8.4 INJUNCTIVE RELIEF. The Parties expressly acknowledge and agree that
any breach or threatened breach of this Article 8 may cause immediate and
irreparable harm to the disclosing Party which may not be adequately
compensated by damages. Each Party therefore agrees that in the event of such
breach or threatened breach and in addition to any remedies
21.
available at law, the disclosing Party shall have the right to secure equitable
and injunctive relief, without bond, in connection with such a breach or
threatened breach.
ARTICLE 9
TERM AND TERMINATION
9.1 AGREEMENT TERM. This Agreement shall commence on the Effective Date
and shall continue in effect for an initial period of the later of (a) the tenth
(10th) anniversary of the Effective Date, or (b) the date on which the BOC
Agreements terminate, unless earlier terminated as permitted under this Article
9. If the BOC Agreements have terminated prior to the eighth (th) anniversary of
the Effective Date, then upon written notice to PowderJect no later than the
eighth (8th) anniversary of the Effective Date, AlgoRx may elect to extend the
term of this Agreement for an additional (2) years on terms mutually agreeable
to the Parties, in which event this Agreement shall expire on the twelfth (12th)
anniversary of the Effective Date. If AlgoRx does not elect to extend the term
of this Agreement, then (i) the license granted to AlgoRx in Section 2.15 shall
be exercisable on the eighth (8th) anniversary of the Effective Date, and (ii)
at AlgoRx's request, PowderJect or its designee shall provide to AlgoRx or its
designee any and all technical assistance and training as AlgoRx may reasonably
require to enable AlgoRx or its designee to Manufacture or have Manufactured Gas
Cylinders. AlgoRx shall promptly reimburse PowderJect for ****** percent (**%)
of the out-of-pocket expenses incurred by PowderJect in providing any technical
assistance and training to AlgoRx, provided that such expenses are supported by
written receipts and are reasonable and necessary as determined by AlgoRx.
9.2 TERMINATION BY ALGORX FOR MATERIAL BREACH. AlgoRx shall have the right
to terminate this Agreement upon written notice to PowderJect if, after
receiving written notice of a material breach of this Agreement, PowderJect
fails to cure such breach within sixty (60) days from the date of such notice.
Notwithstanding the foregoing, AlgoRx shall not be able to terminate this
Agreement if PowderJect's material breach relates to supply matters, and
PowderJect demonstrates to AlgoRx's reasonable satisfaction that such material
breach under this Agreement is the direct result of BOC's breach of its
obligations under the BOC Agreements or the breach of a Third Party Manufacturer
of its obligations under a Third Party Manufacturer Agreement. In such event,
AlgoRx shall have the right to seek specific performance or other appropriate
injunctive relief under Article 10 to ensure that PowderJect enforces its rights
in relation to the BOC Agreements or Third Party Manufacturer Agreement under
Section 2.12 of this Agreement. In the event that PowderJect does not enforce
its rights in relation to a Third Party Manufacturer Agreement to the reasonable
satisfaction of AlgoRx, AlgoRx may terminate the Agreement under this Section
9.2.
(a) BOC AS SUPPLIER. If AlgoRx terminates the Agreement under this
Section 9.2 and, on the effective date of such termination, any of the BOC
Agreements are still in effect, PowderJect shall use its best efforts to procure
BOC's agreement that PowderJect may assign such BOC Agreements to AlgoRx as soon
as possible. Termination of this Agreement by AlgoRx shall not be effective
until the BOC Agreements are assigned to AlgoRx, and PowderJect's obligation to
supply AlgoRx's requirements on the terms set forth in this Agreement shall
continue until such assignment is effected. Upon assignment of the BOC
22.
Agreements to AlgoRx, AlgoRx and BOC shall negotiate in good faith, taking into
account the circumstances under which this Agreement terminated, reasonable
terms under which AlgoRx shall supply Gas Cylinders to BOC. For a period of up
to three (3) months after the date on which the BOC Agreements are assigned to
AlgoRx, AlgoRx shall supply Gas Cylinders to PowderJect on terms that are
consistent with the terms set forth in this Agreement.
(b) THIRD PARTY MANUFACTURER AS SUPPLIER.
(i) If AlgoRx terminates the Agreement under this Section 9.2
and, on the effective date of such termination, a supply agreement between
PowderJect and a Third Party Manufacturer is in effect for the Manufacture of
Gas Cylinders, then at AlgoRx's request, PowderJect shall use diligent efforts
to assign such supply agreement to AlgoRx as soon as possible. If AlgoRx elects
to have PowderJect assign such Third Party Manufacturer Agreement to AlgoRx,
termination by AlgoRx shall not be effective until such Third Party Manufacturer
Agreement is assigned to AlgoRx, and PowderJect's obligation to supply AlgoRx's
requirements on the terms set forth in this Agreement shall continue until the
date on which such assignment is effected. If AlgoRx does not elect to have such
Third Party Manufacturer Agreement assigned to AlgoRx, then such termination
shall be effective once the training set forth in subclause (ii) below has been
provided to AlgoRx or its designee.
(ii) At AlgoRx's request, PowderJect or its designee, at its
own cost and expense, promptly shall provide to AlgoRx or its designee any and
all technical assistance and training as AlgoRx may reasonably require to enable
AlgoRx or its designee to Manufacture or have Manufactured Gas Cylinders.
(iii) If AlgoRx does not elect to have the Third Party
Manufacturer Agreement assigned to it under subclause (i), the license granted
to AlgoRx in Section 2.15 shall be exercisable sixty (60) days after AlgoRx has
provided the notice of material breach to PowderJect.
(c) POWDERJECT AS SUPPLIER. If AlgoRx terminates the Agreement under
this Section 9.2 and prior to such termination PowderJect or its Affiliate has
been Manufacturing Gas Cylinders for supply to AlgoRx, or if neither a Third
Party Manufacturing supply agreement nor the BOC Agreements are in effect
between PowderJect and such Third Party Manufacturer or BOC for the Manufacture
of Gas Cylinders on the date on which AlgoRx provides notice of termination,
such termination shall be effective on the date AlgoRx has provided notice of
termination to PowderJect.
(i) At AlgoRx's request, PowderJect shall use best efforts to
assign any Third Party agreement under which aluminum components (including,
without limitation, caps and cans) required to Manufacture Gas Cylinders are
supplied to PowderJect or its Affiliate.
(ii) AlgoRx shall have the right, but not the obligation, to
purchase from PowderJect any or all of the Lines used in the Manufacture of the
Gas Cylinders at a price equivalent to no more than the depreciated book value
of the assets comprising each Line, which value shall be calculated on the
effective date of termination. PowderJect shall, as soon as reasonably
practicable, at its own cost and expense, clean and decommission each Line
23.
purchased by AlgoRx and disconnect it from main services in a safe manner ready
for disassembly, crating, and transport to AlgoRx's designated facility. No
later than thirty (30) days after AlgoRx has paid PowderJect for any such Lines,
PowderJect shall transport or procure the transportation of the applicable Lines
to the location designated by AlgoRx at PowderJect's sole cost and expense.
(iii) The sublicense granted to AlgoRx in Section 2.15 shall
(subject to PowderJect's exclusivity to BOC having been terminated) be
exercisable sixty (60) days after AlgoRx has provided notice of material breach
to PowderJect.
(iv) At AlgoRx's request, and at PowderJect's own cost and
expense, PowderJect or its designee shall provide to AlgoRx or its designee any
and all technical assistance and training as AlgoRx may reasonably require to
enable AlgoRx or its designee to Manufacture or have Manufactured Gas
Cylinders.
9.3 OTHER TERMINATION BY ALGORX. AlgoRx may terminate this Agreement upon
one (1) year's written notice for any reason at any time after (a) the date of
termination of the BOC Agreements, or (b) the expiration of the last-to-expire
patent right owned by BOC that covers the composition, method of making, or use
of the Gas Supply System or the Gas Cylinder. If AlgoRx terminates the Agreement
under this Section, then:
(a) the sublicense granted to AlgoRx in Section 2.15 shall be
exercisable on the date on which AlgoRx provides notice of termination to
PowderJect;
(b) at AlgoRx's request at any time after the date on which AlgoRx
provides notice of termination under this Section 9.3, PowderJect or its
designee, at its own cost and expense, shall provide AlgoRx or its designee with
any and all technical assistance and training as AlgoRx may reasonably require
to enable AlgoRx or its designee to Manufacture or have Manufactured Gas
Cylinders; and
(c) for a period of five (5) years from the date of the
Commissioning of the last Line to be commissioned prior to the date on which
AlgoRx provides notice of termination to PowderJect under this Section 9.3,
AlgoRx shall be obligated to purchase, and PowderJect shall be obligated to
supply, quantities of Gas Cylinders equal to the lesser of (a) ****** percent
(**%) of the total capacity of such Line, or (b) ****** percent (**%) of
AlgoRx's requirements of Gas Cylinders during such time period.
9.4 MATERIAL BREACH BY ALGORX. In the event that AlgoRx materially
breaches its payment obligations to PowderJect under this Agreement, PowderJect
shall have the right, upon written notice to AlgoRx, to suspend its supply
obligations to AlgoRx until such time as AlgoRx has cured such breach if, after
receiving a written notice of material breach of this Agreement, AlgoRx fails to
cure such breach within sixty (60) days from the date of such notice.
9.5 ACCRUED RIGHTS; SURVIVING OBLIGATIONS. Termination of this Agreement
shall not affect any accrued rights of either Party. The terms of Sections 2.15
(License), 3.2 (Quality Control Audits), 4.2 (Records and Samples), 4.3 (Product
Recalls, Market Withdrawals, or Corrections), 4.5 (Customer Questions and
Complaints), 4.6 (Field Alert Reporting), 5.7 (Records; Audit), (9.2
(Termination by AlgoRx for Material Breach), 9.3 (Other Termination by
24.
AlgoRx), 9.5 (Accrued Rights; Surviving Obligations), 11.1 (Governing Law), 11.2
(Dispute Resolution), 11.4 (Patents and Trademarks), 11.10 (Severability), 11.12
(No Waiver), and 11.14 (Further Actions), and Articles 7 (Indemnification), 8
(Confidentiality), and 10 (Specific Performance and Injunctive Relief) of this
Agreement shall survive termination of this Agreement.
ARTICLE 10
SPECIFIC PERFORMANCE AND INJUNCTIVE RELIEF
10.1 PowderJect expressly acknowledges and understands that the Gas
Cylinders it is obligated to supply to AlgoRx pursuant to this Agreement are
critical to the business of AlgoRx and its Affiliates and that AlgoRx and its
Affiliates have no alternate source of supply of Gas Cylinders other than from
PowderJect. Accordingly, PowderJect acknowledges and understands that it is
critical for PowderJect to supply AlgoRx's requirements of Gas Cylinders that
conform to the Gas Cylinder Specification. Failure to do so may irreparably harm
AlgoRx or its Affiliates by resulting in AlgoRx or its Affiliates being unable
to carry out their business. In the event that PowderJect fails to supply AlgoRx
with its requirements of Gas Cylinders under the terms of this Agreement for any
reason other than the occurrence of a force majeure event, PowderJect shall have
the right to seek an order for specific performance, coupled with a mandatory
injunction against PowderJect, compelling PowderJect to (a) perform its
obligations under this Agreement, including, without limitation, its obligation
to supply AlgoRx's requirements of Gas Cylinders, or (b) enforce its rights
under the BOC Agreement or a Third Party Manufacturer supply agreement pursuant
to Section 2.12 or Section 2.14, if applicable. In addition, AlgoRx shall have
the right to bring a claim for monetary damages against PowderJect. PowderJect
expressly acknowledges that AlgoRx is relying on PowderJect to carry out its
obligations under this Agreement and that a claim for monetary damages may be an
inadequate remedy at law for AlgoRx under such circumstances.
ARTICLE 11
MISCELLANEOUS PROVISIONS
11.1 GOVERNING LAW. From the Effective Date until the date on which the
BOC Agreements terminate, this Agreement shall be governed by the laws of
England and Wales without reference to its choice of law principles. As of the
date on which the BOC Agreements terminate, this Agreement shall be governed by
the laws of the State of California without reference to its choice of law
principles. The state and federal courts located in California and the High
Court located in London shall each have non-exclusive jurisdiction of any such
disputes. The Parties submit to the personal jurisdiction of such courts for any
such action, agree that such courts provide a convenient forum for any such
action, and waive any objections or challenges to venue with respect to such
courts.
11.2 DISPUTE RESOLUTION. Any claim or controversy arising out of or
relating to this Agreement or any breach hereof shall first be submitted to the
Chief Executive Officers of AlgoRx and PowderJect for resolution by good faith
negotiation. If such resolution shall fail within thirty (30) days, subject to
Section 11.4, either Party may submit such claim or
25.
controversy for resolution by a court of applicable jurisdiction in England or
the State of California.
11.3 ENTIRE AGREEMENT. This Agreement and the License Agreement between
AlgoRx and PowderJect dated March__________, 2002 constitute the entire, final
and complete agreement and understanding between the Parties, and replaces and
supersedes all prior discussions and agreements between them, with respect to
the subject matter hereof. No amendment, modification or waiver of any terms or
conditions hereof shall be effective unless made in writing and signed by a duly
authorized officer of each Party.
11.4 PATENTS. Any dispute, controversy or claim relating to the scope,
validity, enforceability or infringement of any patent rights covering the
manufacture, use or sale of any Device containing a Gas Cylinder shall be
submitted to a court of competent jurisdiction in the territory in which such
patent rights were granted or arose.
11.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon each of
the Parties, their successors and assigns. Neither Party shall be entitled to
assign any rights hereunder to any Party without the prior written consent of
the other Party, except that a Party may assign this Agreement to its successor
in interest pursuant to a merger, acquisition or sale of all or substantially
all of its assets.
11.6 FORCE MAJEURE. Both Parties shall be excused from the performance of
their obligations under this Agreement to the extent that such performance is
prevented by force majeure and the nonperforming Party promptly provides notice
of the prevention to the other Party. Such excuse shall be continued so long as
the condition constituting force majeure continues and the nonperforming Party
takes reasonable efforts to remove the condition. For purposes of this
Agreement, force majeure shall include conditions beyond the reasonable control
of the Parties, including without limitation, an act of God, voluntary or
involuntary compliance with any regulation, law or order of any government, war,
civil commotion, terrorist act, labor strike or lock-out, epidemic, failure or
default of public utilities or common carriers, destruction of production
facilities or materials by fire, earthquake, storm or like catastrophe, and
failure of plant or machinery (provided that such failure could not have been
prevented by the exercise of skill, diligence, and prudence that would be
reasonably and ordinarily expected from a skilled and experienced person engaged
in the same type of undertaking under the same or similar circumstances);
provided, however, the payment of invoices due and owing hereunder shall not be
delayed by the payer because of a force majeure affecting the payer.
11.7 NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing, shall specifically refer to this Agreement and
shall be deemed to have been sufficiently given for all purposes if mailed by
first class certified or registered mail, postage prepaid, express delivery
service or personally delivered. Unless otherwise specified in writing, the
mailing addresses of the Parties shall be as described below. All notices from
AlgoRx to PowderJect in respect of the forecasting and ordering of Gas Cylinders
shall be made by fax during UK business hours to the details below.
26.
For PowderJect: PowderJect Technologies Ltd.
c/o PowderJect Pharmaceuticals PLC
Xxxxxx House
Xxxxxx Xxxxxxxx Avenue
The Oxford Science Park
Oxford OX4 4GA
UK
Attention: Company Secretary
Fax: x00 0000 000000
For PowderJect in relation to the supplies of Gas Cylinders:
Xxxx Xxxxx
Device Manufacturing Manager
PowderJect Technologies Limited
4 Xxxxxx Xxxxxxxx Avenue
The Xxxxxx Xxxxxxx Xxxx
Xxxxxx XX0 0XX
XX
Fax: x00 0000 000000
For AlgoRx: AlgoRx Pharmaceuticals, Inc.
000 Xxxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: President
Fax: (000) 000-0000
With a copy to: Xxxxxx Godward LLP
Five Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxx Xxxx, Esq.
Fax: (000) 000-0000
11.8 NO STRICT CONSTRUCTION. This Agreement has been prepared jointly and
shall not be strictly construed against either Party, Ambiguities, if any, in
this Agreement shall not be construed against any Party, irrespective of which
Party may be deemed to have authored the ambiguous provision.
11.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which shall
constitute together the same document.
11.10 SEVERABILITY. If any one or more of the provisions of this Agreement
is held to be invalid or unenforceable by any court of competent jurisdiction
from which no appeal can be or is taken, the provision shall be considered
severed from this Agreement and shall not serve to invalidate any remaining
provisions hereof. The Parties shall make a good faith effort to replace
27.
any invalid or unenforceable provision with a valid and enforceable one such
that the objectives contemplated by the Parties when entering this Agreement may
be realized.
11.11 HEADINGS. The headings for each article and section in this
Agreement have been inserted for convenience of reference only and are not
intended to limit or expand on the meaning of the language contained in the
particular article or section.
11.12 NO WAIVER. Any delay in enforcing a Party's rights under this
Agreement or any waiver as to a particular default or other matter shall not
constitute a waiver of such Party's rights to the future enforcement of its
rights under this Agreement, excepting only as to an express written and signed
waiver as to a particular matter for a particular period of time.
11.13 FURTHER ACTIONS. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.
11.14 INDEPENDENT CONTRACTORS. Each Party shall act solely as an
independent contractor, and nothing in this Agreement shall be construed to give
either Party the power or authority to act for, bind or commit the other Party
in any way. Nothing herein shall be construed to create the relationship of
partnership, principal and agent or joint venture between the Parties.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the
Effective Date.
POWDERJECT TECHNOLOGIES LIMITED ALGORX PHARMACEUTICAL, INC. :
By: /s/ Xxxxxxx Xxxxxxxxx By: /s/ Xxxxxx X. Xxxxx
---------------------------- -----------------------------
Name: Xxxxxxx Xxxxxxxxx Name: --------------------------
Title: DIRECTOR Title: -------------------------
28.
EXHIBIT A
ACCEPTANCE TESTS
29.
EXHIBIT B
GAS CYLINDER SPECIFICATION
30.
EXHIBIT C
PACKAGING SPECIFICATION
31.
