EXHIBIT 10.26
PEPTIDE SUPPLY AGREEMENT
Between
ESPERION THERAPEUTICS, INC.
And
NEOSYSTEM S.A.
TABLE OF CONTENTS
Page
ARTICLE I: BACKGROUND............................................................. 1
ARTICLE II: DEFINITIONS............................................................ 1
ARTICLE III: PROVISION OF SERVICES & SUPPLY OF PRODUCTS............................. 4
ARTICLE IV: TERM AND TERMINATION................................................... 6
ARTICLE V: INTELLECTUAL PROPERTY.................................................. 7
ARTICLE VI: PATENT PREPARATION, PROSECUTION & ENFORCEMENT.......................... 9
ARTICLE VII: LICENSE................................................................ 10
ARTICLE VIII: PROJECT COMMERCIALIZATION.............................................. 10
ARTICLE IX: CHARGES AND INVOICING.................................................. 10
ARTICLE X: DELIVERABLES........................................................... 11
ARTICLE XI: PUBLICITY.............................................................. 14
ARTICLE XII: CONFIDENTIALITY........................................................ 14
ARTICLE XIII: REPRESENTATIONS AND WARRANTIES......................................... 16
ARTICLE XIV: INDEMNIFICATION........................................................ 20
ARTICLE XV: ENVIRONMENTAL MATTERS.................................................. 22
ARTICLE XVI: INSURANCE.............................................................. 23
ARTICLE XVII: MISCELLANEOUS.......................................................... 23
PEPTIDE SUPPLY AGREEMENT
This PEPTIDE SUPPLY AGREEMENT ("AGREEMENT") is made and entered into on
______________________, 2000 by and between ESPERION THERAPEUTICS, INC., a
Delaware corporation having an address at 0000 X. Xxxxx Xxxxxx, 000 XXX Xxxxx,
Xxx Xxxxx, Xxxxxxxx 00000, X.X.X. (hereinafter "ESPERION"), and NEOSYSTEM S.A.,
having an address at 0 xxx xx Xxxxxxxx, 00000 Xxxxxxxxxx, Xxxxxx (hereinafter
"SYSTEM").
ESPERION and NEOSYSTEM agree as follows:
ARTICLE I: BACKGROUND
1.1 ESPERION is a corporation engaged in the discovery, development, and
commercialization of therapeutic products. ESPERION wishes to have certain
peptide compounds manufactured by NEOSYSTEM under the conditions set forth
herein.
1.2 NEOSYSTEM is a company in the business of manufacturing custom peptide
sequences for research and development for clinical and commercial use according
to cGMP(as hereinafter defined). NEOSYSTEM has the capability and wishes to
supply certain peptide compounds for ESPERION and to perform stability studies
in accordance with the terms and conditions set forth herein.
1.3 ESPERION and NEOSYSTEM wish to undertake a manufacturing project
described in Exhibit A, the purpose of which is to manufacture the product(s)
listed in Exhibit A using NEOSYSTEM'S TECHNOLOGY, ESPERIONS TECHNOLOGY, or
---------
PROJECT INTELLECTUAL PROPERTY, as defined below.
ARTICLE II: DEFINITIONS
2.1 AFFILIATE - Means, with respect to any Person, any other Person
controlling, controlled by or under direct or indirect common control with such
Person. A Person shall be deemed to control a corporation (or other entity) if
such Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such corporation (or other entity),
whether through the ownership of voting securities, by contract or otherwise.
AFFILIATE shall also mean any entity, or organization that controls, is
controlled by, or is under common control with a party. For this purpose,
"control" shall mean the ownership (whether directly or indirectly) of more than
fifty percent (50%) of the voting stock or other entity interest or the ability
(whether directly or indirectly) to determine the policy or actions of any
entity on account of contract or other relationships.
2.2 cGMP - Means current Good Manufacturing Practices ("cGMT") as
determined by the Food and Drug Administration ("FDA"), and includes the current
Good Manufacturing Practices and General Biological Product Standards as
described by U.S. Code of Federal Regulations, 21 CFR (Chapters 210, 211, 600),
and all equivalent standards in the European Union and Japan, as the same may be
amended or re-enacted from time to time.
2.3 ESPERION TECHNOLOGY - Means any and all chemical structures including
computer-generated structures and molecule libraries, analogues, scaffolds,
intermediates, byproducts, chemical synthesis routes, analytical data, technical
information, formulations, processes, know-how, data, specifications, test
results, therapeutic applications, and other information relating to custom
synthetic peptide production and/or custom synthetic organic production,
including trade secrets, trademarks and copyrights, manufacturing procedures,
manufacturing equipment, plant layouts, the identity of raw materials,
manufacturing capacities, product volumes, customer lists, market data,
marketing plans, pricing information, quality control procedures, quality
control standards, and suggestions for improvements, whether or not patented or
patentable, owned at least in part by ESPERION or known by ESPERION to be in the
public domain prior to the date of this AGREEMENT.
2.4 FACILITY - Means NEOSYSTEM's manufacturing facility located at
Strasbourg, France and, subject to ESPERION's prior written approval, such other
facilities to be used by N'EOSYSTEM in the development, manufacture and storage
of PRODUCTS or materials utilized in the development and manufacture of PRODUCTS
hereunder.
2.5 HAZARDOUS MATERIALS - Means any pollutant, contaminant, hazardous or
toxic substance, constituent or material and other wastes or other substances
regulated under any applicable federal, state, provincial or local laws, rules
or regulations and shall include PRODUCTS properly rejected by ESPERION pursuant
hereto.
2.6 HAZARDOUS WASTE - Means waste arising from the development manufacture
and packaging of the PRODUCTS that is defined as "Hazardous" by applicable
federal, state, provincial or local laws, rules or regulations and shall include
PRODUCTS properly rejected by ESPERION pursuant hereto.
2.7 NEOSYSTEM TECHNOLOGY - Means any and all chemical structures,
including computer-generated structures and molecule libraries, analogues,
scaffolds, intermediates, byproducts, chemical synthesis routes, analytical
data, technical information, formulations, processes, know-how, data,
specifications, test results, therapeutic applications, and other information
relating to custom synthetic peptide production and/or custom synthetic organic
production, including trade secrets, trademarks and copyrights, manufacturing
procedures, manufacturing equipment, plant layouts, the identity of raw
materials, manufacturing capacities, product volumes, customer lists, market
data, marketing plans, pricing information, quality control procedures, quality
control standards, and suggestions for improvements, whether
2
or not patented or patentable, that are 100% owned by NEOSYSTEM prior to the
date of this AGREEMENT, as clearly documented in admissible form by company
records.
2.8 PERSON - Means any individual or corporation, company, partnership,
trust, incorporated or unincorporated association, joint venture or other entity
of any kind.
2.9 PRODUCT - Means the product(s) including intermediates, scaffolds,
analogues, byproducts, chemical synthesis routes and analytical data developed,
manufactured and/or supplied under this AGREEMENT, as further specified in
Exhibit A.
2.10 PROJECT - Means the manufacturing and supply project described herein
and further defined in Exhibit A to develop the PRODUCT.
2.11 PROJECT INTELLECTUAL PROPERTY - Means any and all chemical structures
including computer-generated structures and molecule libraries, analogues,
scaffolds, intermediates, byproducts, chemical synthesis routes, analytical
data, technical information, formulations, processes, know-how, data,
specifications, test results, therapeutic applications, and other information
relating to custom synthetic peptide production and/or custom synthetic organic
production, including trade secrets, trademarks and copyrights, manufacturing
procedures, manufacturing equipment, plant layouts, the identity of raw
materials, manufacturing capacities, product volumes, customer lists, market
data, marketing plans, pricing information, quality control procedures, quality
control standards, and suggestions for improvements, whether or not patented or
patentable, developed or discovered during tile term of this AGREEMENT by
ESPERION or NEOSYSTEM and related to the PROJECT or PRODUCT.
2.12 RELEASE - Means any release, spill, emission, leaking, pumping,
injection deposit, disposal, discharge, leaching or migration into the indoor or
outdoor environment, including, without limitation, the movement of Hazardous
Materials through the ambient air, soil, subsurface water, groundwater,
wetlands, lands or subsurface strata.
2.13 SPECIAL WASTE - Means waste arising from the manufacture and packaging
of the PRODUCTS hereunder, including labeling that contains, or has come into
contact with, the PRODUCTS or raw materials, including PRODUCTS properly
rejected under this AGREEMENT, rejected or unusable raw materials, disposable
manufacturing equipment (including filters used in manufacturing and packaging),
wash rinse and previously used or discarded protective clothing.
2.14 SPECIFICATIONS - Means the specifications for the raw materials and
packaging materials used in the development, manufacture and/or packaging of the
PRODUCTS and the specifications for the manufacture, processing and packaging of
the PRODUCTS, including all formulae, know-how, materials requirements,
standards of quality control, quality
3
assurance and sanitation, as mutually agreed upon in writing by ESPERION and
NEOSYSTEM and specified in the order for the applicable PRODUCTS pursuant to
Section 3.6(b) hereof, and as the same may be modified pursuant to Section 10.3
hereof NEOSYSTEM shall have no obligation with regard to any PRODUCT(S) until
corresponding specifications for such PRODUCT(S) have been finalized and agreed
upon in writing by the parties.
2.15 WASTE - Means all wastes which arising from the manufacture and
packaging of PRODUCTS hereunder including Hazardous Waste and Special Waste.
ARTICLE III: PROVISION OF SERVICES & SUPPLY OF PRODUCTS
3.1 Agreement to Perform. During the term of this AGREEMENT, NEOSYSTEM
--------------------
will undertake the PROJECT exclusively for ESPERION. NEOSYSTEM will not produce
the PRODUCT for a third party if the PRODUCT would compete with an ESPERION
product or harm the commercial interests of ESPERION. In no event will NEOSYSTEM
disclose to a party that NEOSYSTEM will make or has made the PRODUCT for
ESPERION. NEOSYSTEM shall perform all of its obligations pursuant to this
AGREEMENT at its FACILITY.
3.2 Time Being of the Essence. NEOSYSTEM shall provide the services and
-------------------------
develop, manufacture and supply the PRODUCTS in accordance with the timetable
attached hereto as Exhibit A. Time is of the essence with respect to all
---------
timetables set forth in Exhibit A.
3.3 Supply of Esperion Technology. ESPERION agrees to provide NEOSYSTEM,
-----------------------------
solely for its use in connection with NEOSYSTEM's performance under this
AGREEMENT, such quantities of the ESPERION TECHNOLOGY as NEOSYSTEM may from
time-to-time reasonably require. Title to and ownership of the ESPERION
TECHNOLOGY shall at all times remain with ESPERION.
3.4 Preferred Supplier. (a) During the term of this AGREEMENT, ESPERION
shall not purchase any quantity of PRODUCT from any third party unless (i)
NEOSYSTEM is unable or notifies ESPERION that it will be unable to manufacture
and supply such quantity of PRODUCT to ESPERION; (ii) NEOSYSTEM has breached any
warranty contained herein with respect to any PRODUCT or otherwise defaulted in
the performance of its obligations hereunder or (iii) ESPERION is entitled to
purchase PRODUCTS from a third party pursuant to Section 3.4(b) hereof.
(b) If ESPERION receives a good faith written firm quote from a third
party supplier (a "Competing Supplier") to supply ESPERION with PRODUCTS at a
------------------
price which is less than ninety percent (90%) of NEOSYSTEM's then current price
charged to ESPERION for such PRODUCTS, ESPERION shall send written notice to
NEOSYSTEM, identifying the Competing Supplier for such PRODUCTS and setting
forth the price proposed to be charged by such Competing Supplier (including
evidence substantiating the same). NEOSYSTEM shall then
4
have two (2) business days from receipt of the notice described herein to match
the price of the Competing Supplier. If NEOSYSTEM does not match the price of
the Competing Supplier within such two (2) business day period, ESPERION shall
be entitled to purchase PRODUCTS from the Competing Supplier at the price set
forth in the notice described herein.
3.5 Contact Persons. Subject to approval by ESPERION, NEOSYSTEM shall
---------------
appoint one of its employees and an alternate to serve as its primary contact
with ESPERION regarding this
3.6 Specifications, Orders, Ownership of Project Intellectual Property.
------------------------------------------------------------------
(a) The PROJECT is described in Exhibit A, including the name and
structure of the PRODUCT, the estimated quantity of PRODUCT required, the
acceptable range of quality of PRODUCT (and assay means, if known), acceptable
timing for delivery to ESPERION of initial batches of the PRODUCT (of the
acceptable quality) and for subsequent quantities of PRODUCT required (of the
acceptable quality), the method NEOSYSTEM will use to prepare the PRODUCT, if
known or available, also indicating whether the method uses ESPERIONS or
NEOSYSTEM'S TECHNOLOGY or PROJECT INTELLECTUAL TECHNOLOGY, and the total amount
payable for the PROJECT. Additionally, ESPERION may request NEOSYSTEM to perform
stability studies.
(b) The quantities of PRODUCT set forth in Exhibit A are estimates
only. From time to time, ESPERION may place orders with NEOSYSTEM for PRODUCT,
which orders shall specify the quantity ordered, the SPECIFICATIONS therefor and
the delivery schedule therefor. In the event that the quantity ordered exceeds
the estimated quantities set forth in Exhibit A, NEOSYSTEM shall use
commercially reasonable efforts to manufacture and supply such excess quantity
but shall notify ESPERION within two (2) business days after receipt of such
order if NEOSYSTEM will be unable to manufacture and supply such excess quantity
and, upon the giving of such notice, such excess quantity shall be deleted from
such order and ESPERION shall be entitled to purchase such excess quantity from
a third party pursuant to Section 3.4(a). In the event that ESPERION cancels any
order placed with NEOSYSTEM for reasons other than the default of NEOSYSTEM,
ESPERION shall reimburse NEOSYSTEM for all costs theretofore actually incurred
by NEOSYSTEM for materials and labor (excluding overhead) in filling such order
up to a maximum amount of the total price which would have been payable for such
order, such reimbursement to be made as provided in Section 9.4 hereof upon
receipt of an invoice from NEOSYSTEM accompanied by supporting documentation.
(c) All PROJECT INTELLECTUAL PROPERTY developed during the course of
the PROJECT will belong to and is hereby assigned in its entirety exclusively to
ESPERION.
3.7 Overage. ESPERION shall receive all overage from the PROJECT.
-------
5
3.8 NEOSYSTEM's Duties. NEOSYSTEM shall be responsible, at its own cost
and expense, for purchasing, installing, qualifying and maintaining at its
FACILITY any and all new or used equipment, molds, tooling and/or modifications
to existing equipment, molds and/or tooling necessary for its performance of its
obligations pursuant to this AGREEMENT. The installation, qualification and
maintenance of all equipment, molds and tooling shall be conducted in accordance
with the specifications, cGMP and all applicable legal requirements. NEOSYSTEM
shall provide, at its own cost and expense, all necessary personnel, materials,
facilities, equipment and other resources to perform its obligations hereunder.
NEOSYSTEM shall provide and supervise the services of personnel, laboratory
facilities, equipment, chemicals, and other suppliers necessary to conduct its
activities under this AGREEMENT according to cGMP.
3.9 Subcontracting. NEOSYSTEM may not subcontract any of its obligations
--------------
under this AGREEMENT without the prior written consent of ESPERION.
3.10 Quantitative Shortfalls. ESPERION shall inform NEOSYSTEM in writing of
any claim relating to quantitative shortfalls in shipments of PRODUCTS occurring
prior to delivery in accordance with DDU (Delivery Duty Unpaid), Incoterms 2000,
within ninety (90) days following actual receipt of such shipments by ESPERION,
and ESPERION shall provide to NEOSYSTEM copies of any appropriate documents
relating to such shortfall that ESPERION may have in its possession. NEOSYSTEM
shall, at its own cost and expense (subject to submission by ESPERION of copies
of any such documents in its possession relating to such shortfall), provide
ESPERION with any missing quantities of such PRODUCTS as soon as reasonably
possible after receipt of notice from ESPERION. ESPERION shall only be obligated
to pay for actual quantities of PRODUCTS received by ESPERION.
3.11 Product Samples. NEOSYSTEM shall provide ESPERION with a reasonable
---------------
quantity of samples of the PRODUCTS promptly upon ESPERION's request. Such
samples shall be shipped to ESPERION in accordance with the provisions set forth
in Exhibit A hereof.
ARTICLE IV: TERM AND TERMINATION
4.1 Term, Renewal; Notice. This AGREEMENT shall become effective on the
---------------------
date written above and shall terminate sixty (60) months thereafter, except as
otherwise provided herein. This AGREEMENT shall automatically be renewed for
additional one (1) year terms thereafter unless either party shall give written
notice to other, at least ninety (90) days prior to the end of the initial term
or any renewal term, that it does not wish this AGREEMENT to be renewed for an
additional one (1) year.
4.2 Termination, Notice.
-------------------
6
(a) Either party may terminate this AGREEMENT at any time during the
term hereof by written notice to the other party if:
i) the other party shall suspend or discontinue its
business operations or make any assignment for the benefit of its creditors or
commence voluntary proceedings for liquidation in bankruptcy, or admit in
writing its inability to pay its debts generally as they become due, or consent
to the appointment of a receiver, trustee or liquidator of the other party or of
all or any part of its property, or if there is an execution sale of a material
portion of its assets;
ii) involuntary bankruptcy or reorganization proceedings
are commenced against the other party or any of its properties or if a receiver
or trustee is appointed for the other party or any of its properties and such
proceedings are not discharged within thirty (30) days;
iii) the other party files or consents to the filing of a
petition for reorganization or arrangement under any applicable Bankruptcy Act
or Code; or
iv) the other party fails to comply with any material term
of this AGREEMENT or breaches any representation or warranty herein and fails to
cure such noncompliance or breach within thirty (30) days after receipt of
written notice thereof.
(b) In the event that ESPERION terminates this AGREEMENT NEOSYSTEM
shall (i) transfer (and shall be automatically deemed at the time of such
termination to have transfer-red) the manufacturing rights for the PRODUCTS to
ESPERION; and (ii) grant (and shall be automatically deemed at the time of such
termination to have granted) to ESPERION a nonexclusive world-wide royalty-free
license (with the right to sublicense) to use the NEOSYSTEM TECHNOLOGY to
perform the PROJECT and develop, manufacture and supply the PRODUCTS in
accordance with the terms of this AGREEMENT (which license shall continue until
the last to expire patents therefor).
4.3 Survival. Articles V, VI, VII, VIII, XI, XII, XIII, XIV, XV, XVI and
--------
XVII shall survive the termination of this AGREEMENT.
4.4 Return of ESPERION'S Property. Upon the effective date of expiration
-----------------------------
or termination of this AGREEMENT for any reason whatsoever, NEOSYSTEM shall
immediately deliver to ESPERION or its designee all ESPERION TECHNOLOGY and all
other materials, supplies or equipment provided by ESPERION. NEOSYSTEM shall
also deliver to ESPERION or its designee all PRODUCTS produced hereunder, and
shall invoice ESPERION in accordance with the terms of Exhibit A.
ARTICLE V: INTELLECTUAL PROPERTY
7
5.1 Ownership. Each Party retains ownership rights in all INTELLECTUAL
---------
PROPERTY that it owned prior to entry into this Agreement.
5.2 Joint Development. If any improvements or modifications to the
-----------------
PRODUCTS are developed by ESPERION or NEOSYSTEM, either jointly or severally,
such improvements or modifications shall be the exclusive property of ESPERION
and shall be held in confidence by NEOSYSTEM for ESPEPION's sole benefit in the
development and/or the operation of manufacturing processes with respect to the
PRODUCTS. NEOSYSTEM shall disclose to ESPERION and receive the approval of
ESPERION with respect to all such improvements or modifications relating to the
manufacturing, and/or packaging process of the PRODUCTS or use of the PRODUCTS
developed by NEOSYSTEM. All trademarks, trade names, brand names, patents,
slogans, logos, copyrights, trade dress, know-how and goodwill associated with
the PRODUCTS shall be the sole and exclusive property of ESPERION. NEOSYSTEM
shall have no right or license to use any such rights at any time before, during
or after the term of this AGREEMENT, except as necessary for the manufacture,
processing, packaging and supply of PRODUCTS to ESPERION hereunder.
5.3 Patenting. In accordance with Article VI, ESPERION may, at its sole
---------
discretion, prepare and file all domestic and foreign patent applications drawn
to inventions included in such PROJECT INTELLECTUAL PROPERTY. ESPERION shall
name all co-inventors who are employed by N'EOSYSTEM, who shall cooperate in the
preparation and the prosecution of such patent application(s). Further, such co-
inventors shall assign ownership in such patent application(s) and patent(s)
issuing therefrom solely to ESPERION.
5.4 Invention Disclosure. NEOSYSTEM agrees that it will promptly disclose
--------------------
in writing all developments or discoveries, whether patentable or not, related
to the PROJECT only to ESPERION.
5.5 Documentation. NEOSYSTEM agrees to document in detail, with
-------------
appropriate signatures, dates and witnessing, all methods and formulations used
in the PROJECT, unless permission otherwise is granted in writing by ESPERION.
All such materials will be documented and dated following the recommendations of
the U.S. Patent Office and ESPERION.
5.6 Assignment By Employee. NEOSYSTEM represents that, by operation of
----------------------
local laws, each of its employees assigns to NEOSYSTEM all INTELLECTUAL PROPERTY
made by an employee during the course of his or her employment by N'EOSYSTEM.
5.7 Assignment By NEOSYSTEM. NEOSYSTEM agrees that NEOSYSTEM shall assign
-----------------------
and hereby does assign its rights to any and all PRODUCTS comprising the PROJECT
INTELLECTUAL PROPERTY discovered or developed during the term of this Agreement
solely to ESPERION, including but not limited to their synthesis routes.
NEOSYSTEM hereby
8
grants a paid-up, royalty-free, exclusive license to ESPERION to all synthesis
routes and compounds developed during the term of this AGREEMENT for use by
ESPERION to make compounds other than those specified on Exhibit A.
---------
5.8 Survival. The provisions of this Article V shall survive the
--------
termination or expiration of this AGREEMENT.
5.9 Exclusivity. Except as specifically provided herein, all technology or
-----------
information owned by ESPERION or provided by ESPERION to NEOSYSTEM in connection
with this AGREEMENT shall not be used by NEOSYSTEM in the provision of any
manufacturing or other services or the development, manufacture or supply of any
PRODUCTS or disclosed or made available to any customers of NEOSYSTEM or other
third parties. All such information shall be deemed confidential information
subject to the provisions of Article XII.
ARTICLE VI: PATENT PREPARATION, PROSECUTION & ENFORCEMENT
6.1 Responsibility. The preparation, prosecution and maintenance of all
--------------
patent applications and patents for PROJECT INTELLECTUAL PROPERTY shall be the
primary responsibility of ESPERION. NEOSYSTEM agrees that it will participate in
the preparation, prosecution and maintenance of any patent applications for
PROJECT INTELLECTUAL PROPERTY, at ESPERION'S request, with expenses for such
participation to be borne by ESPERION.
6.2 Notice of Infringement. NEOSYSTEM shall promptly notify ESPERION of
----------------------
any alleged infringement of PROJECT INTELLECTUAL PROPERTY and shall supply to
ESPERION all available evidence of such infringement.
6.3 Enforcement. ESPERION shall have the right, but shall not be
-----------
obligated, to commence suit for any infringement of the PROJECT INTELLECTUAL
PROPERTY. NEOSYSTEM agrees to cooperate with ESPERION using all reasonable means
at no expense to NEOSYSTEM. The total cost of any such infringement action
commenced or defended solely by ESPERION shall be borne by ESPERION, and
ESPERION shall retain all recovery or damages awarded in such action.
6.4 Intervention. In the event that a declaratory judgment action alleging
------------
invalidity or unenforceability of, or infringement by, any of the PROJECT
INTELLECTUAL PROPERTY shall be brought against NEOSYSTEM, ESPERION, at its
option, shall have the right, within ninety (90) days after receiving written
notification of the commencement of such action, to intervene and assume sole
responsibility for the defense of the action at its own expense.
9
6.5 Cooperation. In any suit ESPERION may commence pursuant to its rights
-----------
under this AGREEMENT in order to enforce the PROJECT INTELLECTUAL PROPERTY,
NEOSYSTEM shall, at the request and expense of ESPERION, cooperate in all
respects and, to the extent possible, have its employees testify when requested
and make available relevant records, papers, information, samples, specimens and
the like.
ARTICLE VII: LICENSE
7.1 Grant of NEOSYSTEM's Technology: Product. NEOSYSTEM hereby grants to
-----------------------------------------
ESPERION a paid-up, royalty-free, perpetual, nonexclusive license (the
"LICENSE"), on a worldwide basis, to any or a part of NEOSYSTEM'S TECHNOLOGY
required in the manufacture of the PRODUCT developed hereunder, effective as of
the date of execution of this Agreement.
7.2 Grant of NEOSYSTEM's Technology: Project. NEOSYSTEM hereby grants to
-----------------------------------------
ESPERION a paid-up, royalty-free, perpetual, nonexclusive right to use
NEOSYSTEM'S TECHNOLOGY for activities related to the PROJECT.
ARTICLE VIII: PROJECT COMMERCIALIZATION
8.1 Esperion's Rights. ESPERION shall have the exclusive, delegable right
-----------------
to make, have made, use, sell, offer to sell, or import any PROJECT INTELLECTUAL
PROPERTY and PRODUCT during and after the term of this AGREEMENT.
ARTICLE IX: CHARGES AND INVOICING
9.1 Price. ESPERION shall pay to NEOSYSTEM the prices set forth in Exhibit
----- -------
A for the PROJECT, at the times indicated in Exhibit A.
- ---------
9.2 Taxes. The prices set forth in Exhibit A include all sales, use,
---------
consumption or excise taxes of any taxing authority. NEOSYSTEM hereby
indemnities ESPERION against, and shall reimburse ESPERION for, any expenditures
ESPERION may be required to make as a result of NEOSYSTEM's failure to pay such
taxes or other governmental charges to the relevant taxing authorities after
invoicing and receiving payment therefor from ESPERION.
9.3 Costs. ESPERION'S liability to NEOSYSTEM for the payment of out-of
-----
pocket costs in carrying out the PROJECT shall not exceed One Thousand U.S.
Dollars (U.S. $1,000.00) in any month without the written approval of ESPERION.
10
9.4 Invoicing. NEOSYSTEM will send ESPERION invoices on a monthly basis
---------
until completion of the PROJECT. The invoices shall describe the actual PRODUCTS
supplied and services rendered pursuant to this Agreement in such detail as
ESPERION may reasonably request. Such invoices shall be payable 2/10, net 30
(payments received within ten (10) days of the date on which the invoice
submitted by NEOSYSTEM is received by ESPERION will entitle ESPERION to a 2%
discount.) In any event, all payments shall be due within thirty (30) days of
the date on which the invoice submitted by NEOSYSTEM is received by ESPERION.
ESPERION shall have a right to cure any failure to pay within the time provided
in this Section within sixty (60) days of receipt of notice of such failure.
9.5 Winding Down. Upon receipt of ESPERION'S written notice to terminate
------------
this AGREEMENT, NEOSYSTEM will promptly discontinue work on the PROJECT and will
invoice ESPERION for any uninvoiced charges incurred prior to receipt of
ESPERION'S notice of termination. ESPERION shall pay to NEOSYSTEM the charges
approved by ESPERION listed on this invoice before termination of this
AGREEMENT.
ARTICLE X: DELIVERABLES
10.1 Reports. NEOSYSTEM will furnish ESPERION progress reports summarizing
-------
the results of the PROJECT and all documents (including all DMF files) necessary
for registration of the PRODUCT, as frequently as ESPERION may reasonably
request, but in any event at least quarterly.
10.2 Delivery; Risk of Loss. NEOSYSTEM shall deliver PRODUCTS ordered by
----------------------
ESPERION to ESPERIONs principal place of business or to such other location in
the continental United States designated by ESPERION in writing to NEOSYSTEM.
NEOSYSTEM shall schedule freight pick up, load the carrier's trailer and
complete documentation. All deliveries and prices hereunder shall be DDU
(Delivery Duty Unpaid), Incoterms 2000.
10.3 Specifications. The SPECIFICATIONS of PRODUCTS may be modified or
--------------
changed by ESPERION as reasonably required in writing. Such writing shall
address any related price increases or decreases arising from such modification
or change.
10.4 Storage. NEOSYSTEM shall store all materials and PRODUCTS in
-------
accordance with the SPECIFICATIONS in a clean, dry area, free from insects and
rodents, in a manner to prevent entry of foreign materials. Storage and handling
of the foregoing shall be in accordance with the SPECIFICATIONS, cGMP and all
applicable and legal requirements. Materials utilized by NEOSYSTEM in connection
with the development, manufacturing, processing and packaging of the PRODUCTS
shall be used by NEOSYSTEM on a first in, first out basis and shall not be used
by NEOSYSTEM beyond the shelf life required under the SPECIFICATIONS, cGMT or
any applicable legal requirements.
11
10.5 Nonconforming Materials. NEOSYSTEM shall not knowingly use any
-----------------------
packaging or other PRODUCT materials that do not comply with the SPECIFICATIONS,
cGMP or applicable legal requirements. NEOSYSTEM shall promptly contact ESPERION
in the event that NEOSYSTEM anticipates making changes to any such material or
in the event NEOSYSTEM considers any such material to be non-conforming or
unacceptable. If NEOSYSTEM uses any nonconforming PRODUCT material without prior
written approval by ESPERION, NEOSYSTEM shall be responsible for all losses,
costs and expenses suffered or incurred by ESPERION as a result of such use and
any expenses incurred by NEOSYSTEM in the correction thereof The foregoing shall
apply regardless of any involvement ESPERION may have had in connection with
such material including supplying or purchasing PRODUCT materials or designating
approved NEOSYSTEM's.
10.6 Quality Tests & Checks. NEOSYSTEM shall perform all in-process and
----------------------
finished PRODUCT tests or checks required by the specifications or applicable
legal requirements. For purposes of this AGREEMENT, such tests shall be
considered routine and shall be performed at NEOSYSTEM's expense. All tests and
test results shall be performed, documented and summarized by NEOSYSTEM in
accordance with the SPECIFICATIONS and applicable legal requirements.
10.7 Production Codes; Records. NEOSYSTEM shall maintain detailed records
-------------------------
on PRODUCT material usage and finished PRODUCT production. NEOSYSTEM's PRODUCT
records shall be sufficient such that NEOSYSTEM shall be capable of responding
to PRODUCT inquiries by ESPERION within seventy-two (72) hours of notification,
including providing the location of the PRODUCTS in question.
10.8 Training. NEOSYSTEM shall educate and train all affected employees and
--------
contractors about the potential hazards associated with the handling of the
Hazardous Materials and Waste, the provision of the SERVICES, the manufacture,
packaging, analyzing and handling of the PRODUCTS and the raw materials and
packaging components, and the proper use of engineering controls, process
equipment and appropriate personal protective equipment. ESPERION shall have no
responsibility for educating, g or ensuring knowledge of any NEOSYSTEM
employees and contractors regarding any of the foregoing.
10.9 Product Rejection; Latent Defects. ESPERION shall have the right to
---------------------------------
give NEOSYSTEM written notice of rejection of any shipment of PRODUCT that in
whole or in part breaches NEOSYSTEM's warranties, covenants and obligations
under this AGREEMENT, which notice shall be given within thirty (30) days after
discovery of such breach. If there is disagreement between the parties as to
whether the PRODUCT meets SPECIFICATIONS, the parties shall have such PRODUCT
tested by a mutually agreed upon third party. Such party's determination as to
whether such PRODUCT meets SPECIFICATIONS shall be binding on the parties
hereto. The expense for such testing and for any costs associated with the
destruction of such PRODUCT shall be borne by NEOSYSTEM except to the extent it
is determined that NEOSYSTEM is not responsible for such failure or breach. At
ESPERIONs option, NEOSYSTEM shall promptly replace PRODUCT which does not
conform with
12
NEOSYSTEM's warranties under this AGREEMENT. ESPERION shall have the right to
set off any refund due ESPERION on account of rejected PRODUCT against invoices
otherwise due or which become due to NEOSYSTEM. The provisions of this
subparagraph shall survive termination of this AGREEMENT with respect to
PRODUCTS packaged by NEOSYSTEM that are received or sold by ESPERION subsequent
to the termination or expiration of this AGREEMENT but prior to any last sale
date on the PRODUCT(S) label(s).
10.10 Complaints. In connection with any PRODUCT complaints forwarded by
----------
ESPERION to NEOSYSTEM, NEOSYSTEM shall conduct all necessary reviews of records
and testing of such PRODUCT and investigate such complaint, at no additional
cost to ESPERION.
10.11 Health & Safety. NEOSYSTEM shall be solely responsible for
----------------
implementing and maintaining health and safety procedures for the manufacture,
packaging, and handling at the facility of the raw materials, Hazardous
Materials, Waste, packaging components and PRODUCTS as provided herein. ESPERION
shall have no responsibility for developing, implementing or overseeing
NEOSYSTEM's health and safety program.
10.12 Product Recall. If ESPERION reasonably decides to or is required to
--------------
initiate a product recall, withdrawal or field correction with respect to, or if
there is any governmental seizure of, its products containing any product
supplied hereunder which action is due, in whole or in part, to (i) a failure of
any of the product manufactured by NEOSYSTEM hereunder to conform to applicable
SPECIFICATIONS (including, without limitation, it being adulterated or
misbranded), or any warranty or other requirement set forth in this AGREEMENT,
(ii) the failure by NEOSYSTEM to comply in all material respects with any
applicable law, rule, regulation, standard, court order or decree, on (iii) the
negligent or intentional wrongful act or omission of NEOSYSTEM in connection
with the production of product hereunder, ESPERION will notify NEOSYSTEM
promptly of the details regarding such action, including providing copies of all
relevant documentation concerning such action. NEOSYSTEM will assist ESPERION in
investigating any such situation and all regulatory contacts that are made and
all activities concerning seizure, recall, withdrawal or field correction will
be jointly coordinated by ESPERION and NEOSYSTEM.
10.13 Cost & Expense. If any such recall, withdrawal, field correction or
--------------
seizure occurs due solely to (i) a failure of any PRODUCT sold by NEOSYSTEM
hereunder to conform to applicable specifications (including, without
limitation, it being adulterated or misbranded) or any warranty or other
requirement set forth in this AGREEMENT, (ii) the failure by NEOSYSTEM to comply
in all material respects with any applicable law, rule, regulation, standard,
court order or decree or (iii) the negligent or intentional wrongful act or
omission of NEOSYSTEM in connection with the production of product hereunder,
then NEOSYSTEM shall bear the full cost and expense of any such seizure, recall,
withdrawal or field correction. If any such recall, withdrawal, field correction
or seizure occurs due solely to (i) any pharmaceutical product manufactured,
sold or distributed by ESPERION that contains PRODUCT failing to conform to its
applicable SPECIFICATIONS (including, without limitation, it being adulterated
or misbranded) or otherwise being defective, (ii) the failure to ESPERION to
comply in all
13
material respects with any applicable law, rule, regulation, standard, court
order or decree or (iii) the negligent or intentional wrongful act or omission
of ESPERION, then ESPERION, shall bear the fall cost and expense of any such
seizure, recall, withdrawal or field correction. If both NEOSYSTEM and ESPERION
contribute to the cause of a seizure, recall, withdrawal or field correction,
the cost and expenses thereof will be shared in proportion to each party's
contribution to the problem.
ARTICLE XI: PUBLICITY
11.1 Media. No publication, advertising, or publicity matter having any
-----
reference to either ESPERION or NEOSYSTEM, expressed or implied, or the PROJECT
or PRODUCT shall be initiated by or made use of by NEOSYSTEM or anyone on behalf
of NEOSYSTEM, unless and until such matter shall have first been agreed upon in
writing by ESPERION.
ARTICLE XII: CONFIDENTIALITY
12.1 Secrecy; Limited Use. ESPERION and NEOSYSTEM agree that they will
--------------------
maintain in confidence and will exert diligent efforts to limit information
exchanged hereunder to those with a need to know, and to ensure their employees,
agents, and consultants will not disclose or publish any proprietary
information, confidential technical information, or confidential business
information referring or relating to the INTELLECTUAL PROPERTY of the other and
PROJECT INTELLECTUAL PROPERTY (collectively hereinafter referred to as
"INFORMATION") transmitted to one another for use in the performance of this
PROJECT. NEOSYSTEM agrees to use such INFORMATION only for evaluation purposes
or to manufacture PRODUCT solely for ESPERION. NEOSYSTEM further agrees not to
disclose ESPERION's or PROJECT INTELLECTUAL PROPERTY directly or indirectly to
others in whole or in part under any circumstances without the prior written
permission of ESPERION.
12.2 Prohibitions. The specific preclusions against use of such INFORMATION
------------
are:
(a) such INFORMATION shall not be reproduced in whole or in part;
(b) access to such INFORMATION shall be limited to individuals within
NEOSYSTEM's organization who have been advised of the need to treat such
INFORMATION according to the terms of this Agreement, and who have a need to
know such INFORMATION; and
(c) under no circumstances shall such INFORMATION be used by
NEOSYSTEM in any commercial or production aspect of NEOSYSTEM'S business without
the prior written permission of ESPERION.
14
12.3 Lifting of Restrictions. NEOSYSTEM's obligations regarding use and
-----------------------
confidentiality shall cease when the INFORMATION:
(a) enters the public domain through no wrongful act of NEOSYSTEM; or
(b) at the time of disclosure is in the public domain; or
(c) becomes available to the public or is lawfully made available to
ESPERION or NEOSYSTEM by a third party without restrictions as to disclosure; or
(d) is such that ESPERION or NEOSYSTEM can establish by reasonable
proof was in its possession at the time of disclosure, or was subsequently and
independently developed by employees of ESPERION or NEOSYSTEM who had no
knowledge of the INFORMATION disclosed. If NEOSYSTEM believes that its
obligation regarding use or confidentiality ceases under this subparagraph, it
shall notify ESPERION within thirty (30) days of receipt of such INFORMATION
from ESPERION. Such independent development shall be evidenced by written
records in admissible form to be provided with the notification by the NEOSYSTEM
to ESPERION; or
(e) is deemed necessary and appropriate by ESPERION to perfect its
patent rights pursuant to ARTICLE VI; or
(f) is such that ESPERION or NEOSYSTEM mutually agree in writing to
release each other from the terms of this AGREEMENT; or
(g) is required to be disclosed by order of a court or other
governmental body after consultation with the party who owns the INFORMATION. In
the event of such a requirement to disclose imposed on NEOSYSTEM, NEOSYSTEM
shall promptly notify ESPERION of the requirement to disclose prior to any
disclosure and ESPERION shall have the right to intercede in the disclosure.
12.4 Marking. All INFORMATION provided by either party to the other under
-------
this Agreement shall be identified as "Proprietary Information" at the time of
disclosure, and be stamped as "Proprietary" (or by an equivalent legend). If
communicated by oral or visual disclosure, the Proprietary Information shall
thereafter be embodied within a document or sample and marked as described above
within thirty (30) days after such disclosure.
12.5 Instructions. Each Party will instruct all persons to whom disclosure
------------
is made of the Proprietary Information that they shall not disclose such
Proprietary Information to any third party.
12.6 Reverse Engineering, Reconstruction. NEOSYSTEM shall not be permitted
-----------------------------------
to justify disregard of any obligation of confidence by using the received
INFORMATION to guide a search of publicly available information to select a
series of items of knowledge from unconnected sources and combine them to create
a reconstruction of the INFORMATION and
15
contend that the INFORMATION is generally available to the public, and is thus
not confidential and secret information.
12.7 Duration. NEOSYSTEM'S obligation not to disclose or publish shall
--------
continue for five (5) years from the termination date of this AGREEMENT unless
granted specific permission by ESPERION.
12.8 Disclosure to Third Party. ESPERION or NEOSYSTEM may, in its sole
-------------------------
discretion, disclose necessary or appropriate INFORMATION as may be required by
law or to representatives of one or more of its AFFILIATES in order for ESPERION
or NEOSYSTEM to perform its obligations under this AGREEMENT, provided, however,
that such AFFILIATES and such representatives shall be bound by the terms and
conditions of this ARTICLE XII that are applicable to ESPERION or NEOSYSTEM.
Such obligation not to disclose or publish shall continue in effect for any
former such AFFILIATES and such representatives of ESPERION or NEOSYSTEM.
NEOSYSTEM must inform ESPERION if NEOSYSTEM assigns all or a portion of the
PROJECT to an AFFILIATE. Such assignment shall be subject to prior approval by
ESPERION.
12.9 Prohibitions On Use. NEOSYSTEM agrees that the INFORMATION disclosed
-------------------
will not be used to provoke an interference with any patent application that
ESPERION or its employees have filed with respect to the INFORMATION, and will
not be used to amend any claim in any pending patent application to expand the
claim to read on, cover or dominate any technology (whether or not patentable)
disclosed as INFORMATION.
12.10 Consequences of Breach. In the event that NEOSYSTEM breaches any of
----------------------
the terms of this Agreement, NEOSYSTEM acknowledges and agrees that said breach
will result in immediate and irreparable harm to the business and goodwill of
ESPERION and that damages, if any, and remedies at law for such breach will be
inadequate and not determinable. ESPERION, upon a breach or violation of this
Agreement by NEOSYSTEM shall therefore be entitled to apply for and receive from
any court of competent jurisdiction equitable relief by way of a temporary or
permanent injunction to restrain any breach or violation of this Agreement and
for such further relief as the court may deem just and proper, at law or in
equity. ESPERION shall be entitled to reasonable costs and expenses in enforcing
such rights under this Agreement (including court costs and legal fees and
expenses), in the event that ESPERION shall prevail in enforcing any of its
rights hereunder. ESPERION shall be indemnified and held harmless by NEOSYSTEM
from and against any and all manner of expenses, losses, claims and liabilities
of any kind incurred by ESPERION in connection with such breach or violation.
ARTICLE XIII: REPRESENTATIONS AND WARRANTIES
13.1 General. NEOSYSTEM warrants and represents that:
-------
16
(a) All PRODUCTS furnished by NEOSYSTEM to ESPERION under this
AGREEMENT (a) shall be of the quality specified in, and shall conform with, the
SPECIFICATIONS in effect upon delivery; (b) shall be manufactured, processed,
packaged, stored and delivered in conformity with the SPECIFICATIONS and all
applicable laws, rules and regulations including cGMP; and (c) shall not contain
any material provided by or on behalf of NEOSYSTEM, which material has not been
used or stored in accordance with the SPECIFICATIONS, any other quality
assurance standards instructed by ESPERION or the NEOSYSTEM of such material and
all applicable governmental standards.
(b) NEOSYSTEM represents, warrants and covenants that as of the date
hereof (a) NEOSYSTEM is, and during the term of this AGREEMENT, NEOSYSTEM shall
continue to be, in full compliance with all applicable laws, rules and
regulations including all applicable labor and employment laws and all
environmental laws; and (b) NEOSYSTEM holds all licenses, permits and similar
governmental authorizations necessary or required for NEOSYSTEM to conduct its
operations and business. NEOSYSTEM will assist ESPERION in fulfillment of any of
its compliance obligations relating to the PROJECT.
(c) NEOSYSTEM will promptly furnish ESPERION with pertinent portions
of all FDA inspection reports and their non-U.S. equivalents and related
correspondence directly related to and affecting its performance hereunder as
and when such reports and correspondence become available to NEOSYSTEM.
(d) NEOSYSTEM will notify ESPERION immediately of any warning
(including any FDA Form 483 or its domestic or foreign equivalent), citation,
indictment, claim, lawsuit, or proceeding issued or instituted by any federal,
state or local government entity or agency against NEOSYSTEM or any of its
affiliates or of any revocation of any license or permit issued to NEOSYSTEM or
any of its affiliates, to the extent that any such occurrence may relate to
NEOSYSTEM's performance hereunder.
(e) If the United States Food and Drug Administration or any other
federal, state or local governmental authority makes an inspection of that
portion of NEOSYSTEM's premises used to develop, manufacture or package PRODUCTS
or seizes PRODUCTS, NEOSYSTEM shall immediately notify ESPERION thereof and
NEOSYSTEM shall take such actions as may be required under the cGW and
applicable legal requirements. NEOSYSTEM shall promptly send retained samples of
PRODUCTS seized by such authority and duplicate reports relating to such
inspections to ESPERION.
(f) PRODUCTS sold hereunder by NEOSYSTEM will not be in violation of
any application national, regional or local law or regulation, including, but
not limited to:
i) Sections 5 or 12 of the Federal Trade Commission Act or
improperly labeled under applicable Federal Trade Commission Trade Practice
Rules, as and to the extent applicable hereunder,
ii) adulterated or misbranded within the meaning of the
federal Food, Drug and Cosmetic Act, as amended, or within the meaning of any
applicable state or municipal law in which the definitions or adulteration and
misbranding are substantially identical
17
with those contained in the federal Food, Drug and Cosmetic Act, or articles
which may not under the provisions of Sections 404 or 505 of said Act be
introduced into interstate commerce or which may not under substantially similar
provisions of any state or municipal law be introduced into commerce,
iii) manufactured or sold in violation of the federal
Controlled Substances Act, as amended, or any applicable state law,
iv) manufactured or sold in violation of any of the
provisions of the Fair Labor Standards Act of 1938, as amended,
v) manufactured or sold in violation of The Occupational
Safety and Health Act of 1970, as amended,
vi) manufactured in violation of any applicable federal,
state or local environmental law or regulation,
vii) manufactured in violation of any agreement (commercial
or otherwise), judgment, order or decree to which NEOSYSTEM is a party, or
viii) in violation of any counterpart non-U.S. regulations
or laws to subparagraphs (f) (i-vii).
(g) Its signatory to this AGREEMENT- and it respectively have the
full legal right, power, and authority to bind NEOSYSTEM and enter into this
AGREEMENT.
(h) This AGREEMENT is a legal and valid obligation of NEOSYSTEM. The
execution, delivery and performance of this AGREEMENT by NEOSYSTEM does not and
will not conflict with any agreement, instrument or understanding, oral or
written, to which it is a party or by which it may be bound, nor violate any law
or regulation of any court, governmental body, administrative or other agency
having authority over it.
(i) To the best of NEOSYSTEM'S knowledge, NEOSYSTEM's TECHNOLOGY does
not infringe any valid right of any person. It will immediately notify ESPERION
in writing of the nature and reason for any potential specification changes
required by changes in applicable laws, rules or regulations or actions of the
FDA or any other regulatory agency. Such changes will be implemented by
NEOSYSTEM as and when required.
(j) All PRODUCT supplied to ESPERION will be properly and safely
packaged as reasonably required by the Drug Mastercap File (DMF) or its
equivalent with respect to the PRODUCT. NEOSYSTEM will provide all bottles and
other packaging materials required by NEOSYSTEM to perform its obligations
hereunder.
(k) All raw materials utilized in connection with the PROJECT will be
in conformance with applicable SPECIFICATIONS. Such raw materials and other
resources required in connection with the manufacture of the PRODUCT to be
supplied shall be provided NEOSYSTEM and at its own cost and expense.
18
(l) It has access to, and during the entire term of this AGREEMENT
will make all reasonable efforts to ensure that it will continue to have access
to sufficient supplies of raw materials, utilities, container/closure systems,
packaging materials and all other required items to perform the services
required of it hereunder without interruption.
(m) It shall maintain all equipment, tooling and molds used in the
manufacture, packaging and supply of PRODUCTS hereunder in good operating
condition and shall maintain the facility and such equipment, tooling and molds
in accordance with, or shall exceed, all requirements set forth in the
specifications, cGMP and applicable legal requirements. In the event NEOSYSTEM
fails or anticipates it will fail to meet any of the foregoing requirements
relating to its maintenance of the facility or such equipment, tooling or molds,
or in the event it receives any notice from any federal, state or local
governmental or regulatory authority with respect to its maintenance of, or
failure to maintain, the facility or such equipment, tooling or molds, NEOSYSTEM
shall promptly notify ESPERION of such notice, provide copies of such notice to
ESPERION and, if such notice relates specifically to the PRODUCTS, provide -
copy of NEOSYSTEM's response for ESPERION's prior review.
(n) It shall provide a completed certificate of analysis for each lot
of finished products supplied hereunder at the time of shipment
(o) It shall be responsible for all process, cleaning and methods
revelation, stability studies or other tests and procedures necessary for the
manufacture and release of finished PRODUCT hereunder in accordance with cGMP
and in accordance with the requirements of the relevant manufacturing process.
(p) NEOSYSTEM shall retain, and upon request by ESPERION make
available to ESPERION, (a) copies of quality control records in relation to the
PRODUCTS; (b) copies of testing results of all the tests performed in relation
to the SERVICES or the PRODUCTS; and (c) samples of the materials used in the
development, manufacturing and processing of the PRODUCTS to the extent
reasonably requested by ESPERION or required by applicable legal requirements.
(q) ESPERION, through its employees, consultants, other
representatives (or potential partners), shall have access to NEOSYSTEM's
facility for the purpose of conducting inspections, performing quality control
audits or witnessing the processing, storage or transportation of PRODUCTS or
materials related to or used in the development, manufacture or packaging of
PRODUCTS. ESPERION shall have access to the results of any PRODUCT tests
performed by NEOSYSTEM or at NEOSYSTEM's direction. ESPERION shall also be
permitted to audit that portion of NEOSYSTEM's books and records pertaining to
this AGREEMENT to the extent reasonably necessary to verify NEOSYSTEM's
compliance with its obligations hereunder. NEOSYSTEM shall use its commercially
reasonable best efforts to ensure that ESPERION has similar access to the
facilities, data and records of NEOSYSTEM's NEOSYSTEM's or manufacturers. Such
inspections do not relieve NEOSYSTEM of any of its obligations under this
AGREEMENT or create new obligations on the part of ESPERION. hwections and
audits by ESPERION personnel hereunder shall be conducted upon reasonable
notice, during normal business 'hours and in compliance with the confidentiality
provisions set out in Article XII.
19
(r) It will notify ESPERION promptly of any actual or anticipated
events which are reasonably likely to have a material adverse effect on the
PRODUCTS or on NEOSYSTEM's ability to provide the , SERVICES or produce PRODUCTS
in accordance with the provisions set forth herein, including any labor
difficulties, strikes, shortages in materials, plant closings and other
interruptions in activity.
(s) It shall use its best efforts to ensure that there will be no
failure or production of erroneous data as a consequence of the inability to
receive, store, process or output date information regardless of the date(s)
utilized (including, without limitation, relating to the change of century) in
any computer software, computer hardware, automation systems or other devices
owned, licensed, or otherwise used by NEOSYSTEM or any NEOSYSTEM's of NEOSYSTEM
that would result in the inability of NEOSYSTEM to either (a) successfully carry
out any service hereunder; or (b) develop, manufacture and supply PRODUCTS and
supporting documentation and information under this AGREEMENT on a timely basis.
13.2 Sole Supply to Esperion, Best Efforts. Under this AGREEMENT, NEOSYSTEM
-------------------------------------
is to manufacture custom peptide sequences according to cGMP and other work
incidental thereto, and is to provide only to ESPERION related counseling,
advice, conclusions, and/or recommendations. NEOSYSTEM represents that it will
use its best professional experience and diligent professional efforts in
performing this work.
13.3 Release. NEOSYSTEM hereby agrees to release, waive and forever
-------
discharge any demands, claims, suits, or actions of any character against
ESPERION arising out of or in connection with NEOSYSTEM'S performance of any
work under this AGREEMENT. In connection with the work performed hereunder,
ESPERION shall in no event be responsible or liable in contract or in tort for
any special, indirect, incidental, or consequential damages such as, but not
limited to, loss of product, profits or revenues, damage or loss from operation
or nonoperation of plant, or claims of customers of NEOSYSTEM.
13.4 Authorization. ESPERION represents that it has the full legal right,
-------------
power, and authority to enter into this AGREEMENT.
ARTICLE XIV: INDEMNIFICATION
14.1 NEOSYSTEM's Indemnification of ESPERION. NEOSYSTEM shall indemnify,
---------------------------------------
defend and hold ESPERION, each Affiliate of ESPERION and the officers,
directors, stockholders and employees and agents thereof (each an "ESPERION
--------
indemnified party") harmless from and against any and all losses, liabilities,
-----------------
damages, claims, expenses, suits, recoveries, judgments and fines (including
reasonable attorneys' fees and expenses) (collectively' "Losses") that may be
------
incurred by any ESPERION indemnified party or any Person arising out of any (a)
actual or alleged damage to property or injury or death occurring to any Person-
arising out of possession, use or consumption by any Person of the PRODUCTS to
the extent that such damage, injury or death was caused by the failure of such
PRODUCTS to meet
20
SPECIFICATIONS; (b) claim, action or proceeding brought by any governmental or
regulatory authority arising out of or resulting from NEOSYSTEM's performance
under this AGREEMENT; or (c) breach by NEOSYSTEM of any of its obligations,
representations or warranties under this AGREEMENT.
14.2 Esperion's Indemnification of NEOSYSTEM. ESPERION shall indemnify,
---------------------------------------
defend and hold NEOSYSTEM, each Affiliate of NEOSYSTEM and the officers,
directors, stockholders, employees and agents thereof (each a "NEOSYSTEM
---------
indemnified party") harmless from and against any and all Losses that may be
-----------------
incurred by any NEOSYSTEM indemnified party or any other Person arising out of
any breach by ESPERION of any of its obligations, representations or warranties
under this AGREEMENT.
14.3 Patent Infringement. In the event any claim for damages by way of
-------------------
patent infringement is asserted against NEOSYSTEM arising from performance of
the PROJECT (except for any such claim arising from or relating to NEOSYSTEM
TECHNOLOGY), ESPERION agrees to defend or settle at its own cost and expense,
any such claim or subsequent action, suit or proceeding and shall indemnify and
hold NEOSYSTEM harmless against any such claim or action, suit or proceeding,
including reasonable legal fees and costs incurred at any judgment or award of
damages arising out of such claim or action.
14.4 Procedure. Any person that may be entitled to indemnification under
---------
this AGREEMENT (an "Indemnified Party"), shall give written notice to the person
obligated to indemnify it (an "Indemnifying Party") with reasonable promptness
upon becoming aware of any claim or other facts upon which a claim for
indemnification will be based. The notice shall set forth such information with
respect thereto as is then reasonably available to the Indemnified Party. The
Indemnifying Party shall have the right to undertake the defense of any such
claim asserted by a third party with counsel reasonably satisfactory to the
Indemnified Party in connection therewith at the Indemnified Party's expense. If
the Indemnified Party shall have assumed the defense of the claim with counsel
reasonably satisfactory to the Indemnified Party, the Indemnifying Party shall
not be liable to the Indemnified Party for any legal or other expenses (other
than for reasonable costs of investigation) subsequently incurred by the
indemnified Party in connection with the defense thereof. The Indemnifying Party
shall not be liable for any claim settled without its consent, which consent
shall not be unreasonably withheld or delayed. The Indemnifying Party shall
obtain the written consent of the Indemnified Party prior to ceasing to defend,
settling or otherwise disposing of any claim. In on event shall NEOSYSTEM
institute, settle or otherwise resolve any claim or potential claim, action or
proceeding relating to the PRODUCTS or any trademarks or other intellectual
property rights of ESPERION without the prior written consent of ESPERION.
14.5 The indemnification obligations set forth in this Article XIV shall
survive the expiration or termination of this AGREEMENT.
21
ARTICLE XV: ENVIRONMENTAL MATTERS
15.1 Waste Materials. The generation, collection, storage, handling,
---------------
disposal, transportation and release of all Hazardous Materials and Waste shall
be the responsibility of NEOSYSTEM and the cost for providing such services
shall be borne exclusively by NEOSYSTEM. As part of the SERVICES, NEOSYSTEM
shall collect, handle, package, label and store, treat or dispose of Hazardous
Materials and Waste, in a proper and lawful manner, and shall comply with all
federal, state or local laws, rules and regulations governing such activity. All
Waste generated as a result of the manufacturing process shall be handled and
disposed of by NEOSYSTEM using onsite environmental systems, or, at NEOSYSTEM's
option, through a responsible waste contractor. NEOSYSTEM, with ESPERION's
cooperation, shall be responsible for developing and implementing all procedures
necessary to prevent diversion of PRODUCTS and any labeling materials from the
waste stream, including rendering the PRODUCTS unsalable. NEOSYSTEM shall
immediately notify ESPERION if at any time it believes that the PRODUCTS or any
labeling materials have been lost or stolen.
15.2 Environmental Permits, License & Authorizations. NEOSYSTEM shall be
-----------------------------------------------
responsible for obtaining and shall obtain all necessary environmental or other
licenses, certificates, approvals or permits from federal, state and local
governmental authorities and any private permissions, whether original documents
or modifications to existing documents, which are necessary to perform the
services in connection with the manufacture and packaging of the PRODUCTS and
shall provide copies thereof to ESPERION upon request by ESPERION. NEOSYSTEM
shall provide ESPERION with immediate verbal notice, confirmed in writing within
twenty-four (24) hours, in the event of revocation or modifications of any
license, certificate, approval or permit which in any way materially impacts
NEOSYSTEM's ability to provide SERVICES or use the facility to manufacture the
PRODUCTS as set forth herein.
15.3 Hazardous & Special Wastes. In the event any current or future raw
--------------------------
materials, packaging components, finished products or wastes resulting from the
manufacture of the PRODUCTS hereunder are deemed Hazardous Waste or Special
Waste, NEOSYSTEM shall be responsible for obtaining all necessary environmental
or other licenses, certificates, approvals or permits from federal, state and
local governmental authorities and any private permissions which are necessary
in connection with the proper handling, storage, treatment or disposal of such
Hazardous Waste or Special Waste generated as a result of the manufacture and
packaging of the PRODUCTS in the facility. All costs and expenses relating to
the Proper handling, storage, treatment or disposal of such Hazardous Waste or
Special Waste, including the cost of obtaining any required licenses,
certificates, approvals or permits (or permit modifications) shall be borne
solely by NEOSYSTEM. NEOSYSTEM shall also prepare and execute, as the generator
of the Hazardous Waste or Special Waste, all shipping documents and waste
manifests required under applicable legal requirements and shall maintain all
records for the term and in the manner required by all applicable legal
requirements with respect to the Hazardous Waste or Special Waste.
22
15.4 Hazardous or Special Waste Disposal. NEOSYSTEM or a Hazardous Waste or
-----------------------------------
Special Waste contractor contracted by NEOSYSTEM and authorized to handle,
transport and dispose of the Hazardous Waste or Special Waste, as the case may
be, shall handle, package and label the Hazardous Waste and Special Waste in a
lawful and proper manner, and shall comply with all federal, state or local
laws, rules and regulations governing such activity. Both NEOSYSTEM or the
contractor, as the case may be, and the disposal facility shall be duly licensed
and authorized to handle the Hazardous Waste or Special Waste, as the case may
be. NEOSYSTEM agrees to make, or cause to be made, periodic and timely pick-ups
of the Hazardous Waste and Special Waste and shall not allow such Waste to
remain on-site for any period of time in excess of that required by applicable
legal requirements or as required in order to xxxxx a safety or health hazard
arising from the Hazardous Waste or Special Waste.
ARTICLE XVI: INSURANCE
16.1 Coverage. NEOSYSTEM shall acquire and maintain at its sole cost and
--------
expense (a) Statutory Worker's Compensation Insurance and Employer's Liability
Insurance; (b) all risk coverage for physical loss or damage to materials and
PRODUCT while at the facility or under its control; and (c) such other insurance
as ESPERION may reasonably request.
16.2 Certificates of Insurance, Maintenance of Coverage. NEOSYSTEM shall
--------------------------------------------------
submit certificates of such insurance to ESPERION (which shall include an
agreement by the insurer not to cancel such coverage except upon thirty (30)
days prior written notice to ESPERION) for its approval before commencing
performance of this AGREEMENT. NEOSYSTEM shall maintain such insurance coverage
in effect for ESPERIONs benefit throughout the term of this AGREEMENT and for a
period of one (1) year from the date of the last delivery of PRODUCTS to
ESPERION hereunder. In case of NEOSYSTEM's failure to furnish such certificates
of insurance or cancellation of any required insurance, ESPERION shall notify
NEOSYSTEM of such failure and shall allow NEOSYSTEM a period of thirty (30) days
to furnish such certificates. If such certificates are not furnished within
thirty (30) days of NEOSYSTEM's receipt of such notice, ESPERION may, at its
option, immediately terminate this AGREEMENT.
16.3 Relationship of the Parties. The relationship between ESPERION and
---------------------------
NEOSYSTEM is that of independent contractors and nothing herein shall be deemed
to constitute the relationship of partners, joint ventures, nor of principal and
NEOSYSTEM between ESPERION and NEOSYSTEM. Neither party shall have any express
or implied right or authority to assume or create any obligations on behalf of
or in the name of the other party or to bind the other party to any contract,
agreement, or undertaking with any third party.
ARTICLE XVII: MISCELLANEOUS
17.1 Assignment. This AGREEMENT and the benefits and obligations hereunder
----------
may not be assigned by NEOSYSTEM without the prior written consent of ESPERION,
except
23
(a) to an AFFILIATE, or
(b) in connection with a merger or consolidation of the party in
which such party is not the surviving entity, or a sale of all or substantially
all of the assets of the party, provided that the successor or purchaser agrees
to answer all of the obligations of the party hereunder.
In the event of an assignment under this Paragraph, NEOSYSTEM shall notify
ESPERION in writing of such assignment at least thirty (30) days in advance of
its occurrence.
17.2 Entire Agreement. This AGREEMENT, including Exhibit A (PEPTIDE SUPPLY
----------------
PROJECT DESCRIPTION), between ESPERION and NEOSYSTEM constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof,
and supersedes any and all prior agreements, requests for quotation, quotations,
purchase orders, letters of intent and understandings between the parties, and
any and all promises, statements, and representations made by either party to
the other concerning the subject matter hereof and the terms applicable hereto.
17.3 Waivers; Amendments.
-------------------
(a) The failure of either party to insist upon the performance of any
of the terms of this AGREEMENT or to exercise any right hereunder at law or in
equity, or any delay by either party in the exercise of any such right, shall
not be construed as a waiver or relinquishment of any such performance or right
or of the future performance of any such term or the future exercise of such
right, and any effective waiver or relinquishment of any such right must be in
writing and signed by a duly authorized officer of the party waiving or
relinquishing the right or rights. No waiver or relinquishment of any right
granted by either party to the other shall be deemed to be a continuing waiver
of such right in the future unless otherwise provided in the waiver.
(b) This AGREEMENT may not be released, discharged, amended, or
modified in any manner except by an instrument in writing that references this
AGREEMENT and is signed by a duly authorized officer of each party.
17.4 Further Assurances. Each of the parties shall execute and deliver to,
------------------
or cause to be executed and delivered to, the other party, such further
instruments, or take such other action as may reasonably be requested of it to
consummate more effectively the actions contemplated hereby.
17.5 Notices. Any notice or other written communication required or
-------
permitted to be made or given hereunder may be made or given by either party to
the other party by fax communication to the fax number set forth below and such
notice shall be followed up by depositing the same in the mail, certified
delivery, return receipt requested, postage prepaid, and addressed to the
mailing address set forth below:
24
If to ESPERION: Esperion Therapeutics, Inc.
0000 X. Xxxxx Xxxxxx
000 XXX Xxxxx
Xxx Xxxxx, Xxxxxxxx 00000 XXX
ADDRESSEE: Xxxxx Xxxxxx, Ph.D.
TITLE: President and CEO
FAX: 000-000-0000
If to NEOSYSTEM: Neosystem S.A.
0 xxx xx Xxxxxxxx
00000 Xxxxxxxxxx, Xxxxxx
ADDRESSEE:_________________________
TITLE:_____________________________
FAX:_______________________________
17.6 Applicable Law; Divisibility. This AGREEMENT is to be governed by and
----------------------------
construed in accordance with the laws of the State of New York, excluding its
conflicts laws. If, however, any provision hereof in any way contravenes the
laws of any state or jurisdiction where this AGREEMENT is to be performed, such
provision shall be deemed to be deleted therefrom, and if any term of this
AGREEMENT shall be declared by a final adjudication to be illegal or contrary to
public policy, it shall not affect the validity of any other terms or provisions
of this AGREEMENT.
17.7 Headings. Descriptive headings used herein are for convenience only
--------
and shall not affect the meaning or construction of any provision hereof.
17.8 Translations. In the event of an inconsistency between any terms of
------------
this AGREEMENT and any translations thereof into another language, the English
language meaning shall control.
17.9 Force Majeure. The untimely performance- of any obligation arising
-------------
hereunder by either party will be excused, and such delay of performance shall
not constitute a breach or grounds for termination or prejudice of any rights
hereunder, provided that (a) the delay of performance is a result of
circumstances or occurrences beyond the reasonable control of the party whose
performance is excused hereunder (the "DELAYING EVENT"), and (b) such party
shall (i) immediately resume performance after the DELAYING EVENT is removed and
(ii) be reasonably diligent during such DELAYING EVENT in avoiding further
delay. Without limiting the generality of circumstances or occurrences that
shall constitute a DELAYING EVENT, examples of DELAYING EVENTS include, but are
not limited to, strikes, shortages of power or other utility services, materials
or transportation, acts of government or of God, sabotage, insurrection and
civil war. A party whose performance may be affected by a DELAYING EVENT
promptly shall give notice to the other party of such DELAYING EVENT and the
fact
25
that it intends to rely upon such DELAYING EVENT to excuse its performance
under this AGREEMENT. Any delay caused by an event of force majeure shall toll
the term of this AGREEMENT which shall be extended by the length thereof. In the
event of a force majeure prevents performance by one party for more than two (2)
months, the other party shall have the right to terminate this AGREEMENT.
17.10 Counterparts. This AGREEMENT may be executed in two or more
------------
counterparts, each of which shall be deemed an original, which together shall
constitute one and the same instrument.
17.11 Arbitration.
-----------
(a) Any dispute, controversy or claim arising out of, relating to,
or in connection with, this AGREEMENT, or the breach, termination or validity
thereof, shall be finally settled by arbitration. The arbitration shall be
conducted in accordance with the Center for Public Resources Rules for Non-
Administered Arbitration of International Disputes in effect at the time of the
arbitration (the "CPR Rules"), except as they may be modified herein or by
---------
mutual agreement of the parties. The neutral organization designated to perform
the functions specified in Rule 6 and Rules 7.7(b), 7.8 and 7.9 of the CPR Rules
shall be the Center for Public Resources.
(b) The seat of the arbitration shall be in New York, and the
arbitration shall be conducted in the English language, provided, however, that
either party may submit testimony or documentary evidence in French but shall,
on the request of the other party, furnish a translation or interpretation into
English of any such testimony or documentary evidence.
(c) Notwithstanding the choice of law clause contained in this
AGREEMENT, the arbitration and this clause shall be governed by the Federal
Arbitration Act, 9 U.S. C. (S)(S) 1 et seq.
(d) The arbitration shall be conducted by one arbitrator who shall
be selected as provided for in the CPR Rules, except that such arbitrator must
be free of any potential for bias or conflict of interest with respect to any of
the parties to the dispute, whether directly or indirectly; be in a position to
hear the dispute immediately and thereafter render a decision within the time
specified, and be a party who is familiar with the biotechnology field.
(e) At the request of a party, the arbitrator may take such interim
measures as he deems necessary in respect of the subject matter of the dispute.
In addition to the authority conferred on the arbitrator by the CPR Rules
specified above, the arbitrator shall have the authority to order reasonable
discovery and production of documents.
(f) The arbitral award shall be in writing, decided in accordance
with law, state the reasons for the award, and be final and binding on the
parties. The award may include an award of costs, including reasonable
attorneys' fees and disbursements. Judgment upon the award may be entered by any
court having jurisdiction thereof or having jurisdiction over the parties or
their assets.
26
IN WITNESS WHEREOF, the parties hereto have caused this AGREEMENT to be
duly executed, on the date written above.
ESPERION THERAPEUTICS, INC. NEOSYSTEM S.A.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xx. X. Xxxxx
-------------------------------- ------------------------------
Name & Title: Name & Title:
Dr. Xxxxx Xxxxxx, President and CEO
Xx. X. Xxxxx CEO
---------------------------------
Date: March 25, 2000 Date: April 17, 2000
------------------------------ ----------------------------
27
EXHIBIT A
PEPTIDE SUPPLY PROJECT DESCRIPTION
----------------------------------
I. Name and specification of the PRODUCT ESP 24218
Sequence: H-Pro-Val-Leu-Asp-Leu-Phe-Arg-Glu-Leu-Leu-Asn-Glu-Leu-Leu-Glu-
Ala-Leu-Lys-Gln-Lys-Leu-Lys-OH
II. Quantity required minimum 2,5 kg.
III. Acceptance range of quality of PRODUCT (and assay means, if known): See
attached specifications.
IV. Acceptance timing for delivery to ESPERION of initial batches of the
PRODUCT of the acceptable quality.
On or prior to: June 1/st/, 2000 - 300 - 400 g
September 1/st/, 2000 - around 700 g
October 1/st/, 2000 - around 700 g
December 15/th/, 2000 - complementary quantity to 2,5 kg.
V. Method NEOSYSTEM will use to prepare the PRODUCT:
The peptide will be prepared by solid phase synthesis using Fmoc strategy.
The method involves information that is present in the public domain.
VI. Total fee to be paid by ESPERION to NEOSYSTEM for the project for at lease
2,5 kg will be 1 250 000 $.
VII. The payment will be made at prorata of the quantity at the delivery of the
product.
On behalf of ESPERION On behalf of NEOSYSTEM
Prepared and agreed by: Prepared and agreed by:
X. X. DASSEUX: /s/ X. X. DASSEUX X. XXXXX: /s/ X. XXXXX
----------------- ------------------
X. XXX: /s/ X. XXX
------------------------
28