EXHIBIT 10.24
1(23)
THIS AGREEMENT ON
DEVELOPMENT OF THE SYNTHESIS OF FC-1271A
AND
MANUFACTURING OPTION
(hereinafter the "Agreement")
Made the 1st Day of May, 1999 (the "Date of the Agreement")
by and between
I A) HORMOS MEDICAL OY, Turku, (commercial registry number 705.463)
(hereinafter referred to as "Hormos")
a corporation duly organized and validly existing under the laws of the
Republic of Finland, with its principal offices located at ▇▇▇▇▇▇▇▇▇▇▇ ▇ - ▇,
▇▇▇-▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
I B) TESS DIAGNOSTICS AND PHARMACEUTICALS, INC.
(commercial registry number 01245734-6)
(hereinafter referred to as "Tess")
a corporation duly organized and validly existing under and by virtue of a
charter granted by the general assembly of the State of Texas with its
principal offices at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
(hereinafter collectively referred to as the "Partners")
and
II) ORION CORPORATION FERMION, Espoo (commercial registry number 136.003)
(hereinafter referred to as "Fermion")
a corporation duly organized and validly existing under the laws of the
Republic of Finland, with its principal offices at ▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇-▇▇▇▇▇
▇▇▇▇▇. ▇▇▇▇▇▇▇
WITNESSETH
Whereas, The pharmaceutical use of the substance known as FC-1271a (the
"Compound") is patented (and/or subject to patent applications) with
respect to the prevention and treatment of osteoporosis and by means
of contractual license from Orion Corporation and sub-license
arrangements exclusively at disposal for the Partners;
Whereas, The Partners wish to further develop the Compound in order to
produce a commercially viable pharmaceutical product for
osteoporosis indication and to secure a reliable source for the
production of the Compound for such product;
Whereas, Fermion has the necessary capacity and laboratories and is
interested in developing a synthesis of the Compound, which would be
applicable for bulk manufacture scale;
Whereas, Fermion is interested in becoming the manufacturer and supplier of
the Compound to the Partners;
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Whereas, The Parties wish to cooperate in the development of the synthesis of
the Compound and wish to hereby regulate the development work to be
undertaken by them in relation thereto;
Now, therefore,
In consideration of the mutual covenants set out herein and intending
to be legally bound, it is hereby agreed as follows:
1 DEFINITIONS
Unless otherwise especially set forth herein, the following terms
shall carry the meanings set forth below:
1.1 Calendar Quarter
Shall mean each three (3) month period ending on March 31, June 30,
September 30 or December 31.
1.2 Compound
Shall mean the compound "********" and known under name
FC-1271a.
1.3 Confidential Information
Shall mean all information, whether technical or non-technical, trade
secrets, discoveries, data, drawings, techniques, documents, models,
samples and know-how, whether or not patented or patentable, owned or
possessed by the Parties on the date of Agreement or later developed
by them.
1.4 Development Period
Shall mean the time period, which starts on February 22, 1999 and
expires May 28, 2004.
1.5 Development Program
Shall mean the written work program for the development of the
synthesis, and compilation of the Drug Master File for the synthesis,
of the Compound as set out in ANNEX 1. This program, according to the
progress made with respect to the development work, may be mutually
amended from time to time in writing by the Parties.
1.6 Manufacturing and Supply Agreement
Shall mean the agreement on manufacturing and supply of the Compound
to which Fermion shall have the option as set forth in this
Agreement, and which shall be made between Fermion and the Partners
or between Fermion and the Sub-Licensee(s) of the Partners.
1.7 Party
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Shall mean the Partners or Fermion and when used in the plural both
the Partners and Fermion.
1.8 Product(s) or Finished Dosage Form
Shall mean any pharmaceutical composition for osteoporosis indication
containing the Compound as the pharmacologically active ingredient.
1.9 R & D
Shall mean research and development activities related to determining
the manufacturing parameters of the Compound. Such activities shall
also include establishment of analytical testing methods for the
Compound, preparation of reference standards, investigation and
characterization of the main peak in the HPLC-testing method,
structure elucidation of the Compound and its impurities as well as
compilation of stability data of the Compound.
1.10 Specifications
Shall mean the final specifications for the Compound prepared by the
Parties and mutually agreed upon in writing.
1.11 Sub-Licensee
Shall mean the sub-licensee(s) of the Partners (i.e. to whom the
rights to the Product have been or may be licensed).
1.12 Synthesis
Shall mean the chemical process and its description by which the
Compound synthesized from its precursors.
I PART: DEVELOPMENT PHASE
2 DEVELOPMENT
2.1 It is the intention of the Parties that the Synthesis shall be
developed in accordance with the Development Program attached hereto
as ANNEX 1 and made a part of this Agreement by reference.
2.2 The Parties anticipate that the Development Program continues for an
estimated period of five and a half (5 1/2) years, starting on
February 22, 1999 and ending May 28, 2004. According to the progress
achieved with respect to the development of the Synthesis, the
Parties may agree on a more accurate development program or may
mutually amend the existing one maintaining the original intention of
the Parties.
2.3 After each Calendar quarter the Partners shall pay all costs directly
resulting from the development of the Synthesis and the
implementation of the Development Program. The costs shall include
direct costs (salary and social welfare expenses, overhead, material
and use of analytical equipment) and be allocated and invoiced at the
quarter when they incur. All payments based on accepted cost
estimates shall be payable within thirty (30) days of invoice.
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2.4 The cost structure for the Development Program is included herein as Annex
2. Fermion will keep the costs firm for 1999, whereas thereafter they are
subject to review. Before commencing work after December 31, 1999, Fermion
and the Partners shall, on a year-by-year basis, review the costs that
arise in the Development Program and agree on them. Fermion shall not be
obliged to commence work in relation to any phase of the Development
Program until the Partners and Fermion agree on the cost structure of work
to be commenced yearly after December 31, 1999.
2.5 Within one (1) month from the beginning of each Calendar Quarter referred
to above, Fermion shall keep the Partners informed of the performance,
developments, progress made and cost development forecasts of the Synthesis
by submitting a written report regarding the R&D as defined hereinbefore in
article 1.9, specifying activities carried out and results obtained in such
Calendar Quarter.
2.6 Subject to clause 8 and its subclauses, the Partners may, during the term
of the Development phase of this Agreement, send its employees or experts
to visit Fermion's premises for the purpose of controlling the performance
of Fermion with respect to this Development Program. Such visits shall be
limited to one visit per Quarter with a notification period of 10 business
days, be conducted during normal business hours and be made at Partners'
costs.
2.7 During the course of the Development Program and in accordance therewith,
Fermion shall develop, prepare and maintain the chemistry part of the
Investigational New Drug (IND) application for the European Union, the
United States of America, Canada, Japan, Australia and New Zealand and
shall take care of annual updates of the chemistry part of such IND.
2.8 Fermion warrants that it shall prepare a Drug Master File (DMF) for the
Compound for the European Union, the United States of America and Japan as
well as that it shall answer a deficiency letter that the United States
Food and Drug Administration (FDA) and/or relevant health authorities in
Europe, Japan, Australia, New Zealand and Canada may issue to the Partners
regarding the manufacturing process of the Compound. This service will be
provided to Hormos at no charge but only as long as the deficiency is
clearly related to the Compound.
3 MANUFACTURE AND SUPPLY OF THE COMPOUND DURING THE DEVELOPMENT PHASE FOR
RESEARCH AND REGULATORY APPROVAL PURPOSES
3.1 The Parties understand that during the clinical trials accurate and
reliable supply of the Compound is particularly of the essence for the
Partners. Therefore, during the duration of the Development Program,
Fermion shall use its best efforts within commercially reasonable limits
and diligent business practice, to manufacture and supply the Compound to
the Partners in accordance with the estimated delivery schedule agreed in
the Development Program and the maximum of 36 months' requirement, as set
forth in clauses 12.4 and 12.5.
3.2 The estimated quantities of Compound to be manufactured and supplied during
the Development Program are set forth in "FC-1271a Delivery Schedule",
attached hereto as ANNEX 3.
3.3 a) During the Development Program the Compound shall be delivered by
Fermion to the Partners on FCA, Fermion Espoo basis (Incoterms 1990) at
prices and payment terms as set forth in Annex 3. Fermion will keep the
price for the first 75 kilos firm, whereas thereafter it is subject to
review. Before commencing work for manufacturing quantities after the first
said 75 kilos, Fermion and the Partners shall, on a year-by-
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year basis, review the prices and agree on them. With the exception of the
first 75 kilos firmly offered herewith, Fermion shall not be obliged to
commence work in relation to any phase of the Development Program until the
Partners and Fermion agree on the price or prices for the Compound to be
delivered to the Partners.
b) Although prices as set forth in Appendix 3 are to be reviewed with the
exception of the first 75 kilos, Fermion has the right to increase said
prices for a new calendar year upon advance written notice to the Partners
at least thirty (30) days prior to the end of the then current year, to
cover any increase in Fermion's cost of materials, direct labor and
overhead related thereto, and said price shall be firm for the following
twelve (12) months. Fermion shall give to the Partners clear explanations
and proof in writing for the cost increase, and the Partners shall have the
right at its expense to have any increase in costs verified after
reasonable prior notice in writing and during normal business hours and
subject to appropriate confidentiality undertakings by an independent
certified public accountant prior to paying any price increase pursuant to
such request.
3.4 Fermion shall have the right of first refusal for entering into a
Manufacturing and Supply Agreement as outlined in Part II of this
Agreement.
II Part: RIGHT OF FIRST REFUSAL FOR MANUFACTURE AND SUPPLY OF THE COMPOUND
4. Manufacturing Right of First Refusal of Fermion
4.1 The Partners hereby exclusively grant Fermion the right of first refusal to
become the exclusive supplier of the Compound. The status of the exclusive
supplier shall give Fermion the right to supply the entire amount of the
annual sales of the Compound by the Partners or their Sub-Licensees. In
addition to specific provisions set forth in this section 4 and regarding
the right of first refusal for the Manufacturing and Supply Agreement, the
other applicable provisions of this Agreement shall form a basis of such
agreement.
4.2 After receipt of market authorization for the Product in either the
European Union, the United States of America or Japan, the Partners shall
inform Fermion thereof and the parties agree to start negotiations with the
aim to enter into a Supply and Manufacturing Agreement for the Compound
within one month after the date the Partners informed Fermion about the
receipt of market authorization. Such a Supply and Manufacturing Agreement
shall also include language regarding safety stock. The Parties shall
negotiate in good faith. However, if the Parties have not reached an
agreement within six (6) months after the Partners informed Ferion about
the receipt of market authorization, the right of first refusal expires.
Within twelve (12) months after the date the Partners informed Fermion
about the receipt of market authorization, and in case no agreement has
been reached between the parties during the first six months (but Fermion
indicated its interest to continue negotiations), should the Partners offer
a third party more favorable terms than those negotiated with Fermion,
Fermion shall have the right to enter into the Supply and Manufacturing
Agreement on such more favorable terms. In the event that the Parties
conclude a Supply and Manufacturing Agreement with each other, then Fermion
shall use one of their manufacturing sites (Espoo or ▇▇▇▇▇ or Oulu) as
their primary site for manufacturing the Compound and, if so wished by the
Partners, file one other of these three sites as their secondary
manufacturing site, which would operate as a back-up supply source for the
Compound.
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4.3 If Fermion decides to exercise its option as set forth in paragraphs 4.1
and 4.2, then it will manufacture the Compound in such a facility which
complies with applicable Good Manufacturing Practices and all other
applicable requirements of the regulatory authorities within the
territories of United States of America/Canada, European Community and
Japan.
4.4 Fermion shall not make any changes to the manufacturing process, which
significantly change the chemical and/or physico-chemical properties of
the Compound without the prior written consent of the Partners.
4.5 Fermion shall manufacture and sell the Compound only to the Partners or to
the Sub-Licensee(s) of the Partners. The Sub-Licensee(s) shall have the
right to purchase the Compound on the same conditions it is sold to the
Partners.
4.6 The Partners shall provide Fermion on or before the first day of the month
preceding each Calendar Quarter with a rolling twelve (12) month forecast
reflecting the need of the Compound.
4.7 It is the intention of the Parties to agree on a fixed price per kilogram
for the Compound. Prior to any deliveries of the Compound for commercial
purposes, the Parties shall negotiate in good faith in order to agree such
price per kilogram.
4.8 The Partners shall give separate orders to Fermion for any quantities of
Compound that will be delivered on FAC, Fermion, Espoo (Incoterms 1990)
basis. Fermion agrees to accept orders and will confirm them within five
(5) business days, to the extent same conform to the forecasts and use its
best efforts and due diligence within commercially reasonable limits to
meet the Partners' requirement for the Compound exceeding Hormos'
forecasts. Subject to Force Majeure, Fermion shall deliver Compound on the
date or dates indicated on Fermion's order confirmation but shall not be
liable for any direct or indirect damage or loss which may occur to the
Partners due to a delay in delivery of the Compound.
4.9 Fermion shall keep a safety stock of the Compound, the quantity of which
shall mutually be agreed upon. The building up of such safety stock shall
start from the second month and be finished after the sixth month after
the execution of the Supply and Manufacturing agreement as contemplated
under clauses 4.1 and 4.2. One (1) year after execution of this
Manufacturing and Supply Agreement and every six (6) months thereafter,
the Partners and Fermion shall meet and determine if safety stock
requirements need to be revised.
III Part: COMMON PROVISIONS FOR THE PARTS I AND II
5 QUALITY
5.1 The Compound shall be manufactured and delivered in accordance with the
Compound Specifications indicated in Annex 4, which will be updated from
time to time by the parties.
6 DEBARMENT CERTIFICATION
6.1 Fermion warrants that it will not knowingly use in connection with the
services rendered under this Agreement in any capacity the services of any
person debarred under the Generic Drug Enforcement Act 21 USC Section
335a(k)(1) and further will not knowingly
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use any person who has been convicted of a crime as defined under the
Generic Drug Enforcement Act.
7 INDEPENDENT TRADER STATUS
7.1 Each of the Parties in performing this Agreement shall be and be
deemed to be acting as an independent contractor or trader and not as
the agent or employee of the other. Accordingly, the Partners shall
purchase the Compound from Fermion, which Fermion has manufactured in
accordance with the Partners' Specifications. The partners and/or its
designated Affiliates shall then manufacture the finished dosage form
in accordance with the Partners' specification therefor and shall sell
such finished dosage form to the Partners' customers according to the
Partners' customary practices. Neither Fermion, nor Hormos nor the
Partners shall have any authority whatsoever to act as agent or
representative of the other party nor any authority or power to
contract or create any obligation or liability on behalf of the other
party or otherwise bind any other party in any way for any purpose.
8 INSPECTIONS
8.1 Manufacturing Facilities: Subject to confidentiality undertakings as
set forth under clause 15, Fermion agrees to allow inspections of its
manufacturing facilities in which the Compound is being manufactured,
analyzed or tested, by representatives of the Partners during normal
working hours upon written prior notice as set forth in paragraph 2.6.
Fermion shall grant access to such premises and to the documentation
necessary for or appropriate to the manufacturing and quality control
of the Compound. Such an inspection shall be carried out once a year,
at the Partners' costs, and with a notification time of at least ten
(10) business days; prior to the proposed inspection date.
8.2 Product Inspections:
a) The Partners shall have a representative sample of the Compound
inspected and analyzed from batches supplied by Fermion within 60
days after receipt. If, after inspection, the Partners believe
the shipment does not meet the Specifications or has any other
defect, Fermion shall be notified in writing within sixty (60)
days after reception of any such goods. If the Partners do not so
notify Fermion, they shall be deemed to have waived all claims
against Fermion for said quantity delivered, except for any
latent defects (resulted from manufacture of the Compound and not
due to a change in the specification) that could not have been
discovered upon such inspection. Any claims by the Partners
regarding goods delivered shall specify in sufficient detail the
nature and basis of the claim and enable the specific
identification of the goods involved.
b) Fermion shall respond to all claims made by the Partners on a
case-by-case basis during which time Fermion shall have the right
to first inspect any goods involved before being required to take
any action with respect thereto. Fermion shall review any such
claim of non-conformity made by the Partners within ten (10)
working days of receipt and conduct any required testing of the
goods involved as soon as possible, but no later than forty-five
(45) days after receipt thereof. If such review and testing by
Fermion (or testing by an independent laboratory, as set forth
below) confirms that a claimed quantity does not meet the
Specifications, the Partners shall, at Fermion's expense, dispose
of or return such quantity involved as Fermion shall direct in
writing. Fermion shall replace such
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quantity with conforming goods as soon as possible, but in
no event later than sixty (60) days after testing is
completed, which shall be the Partners' only remedy for such
non-conformity. If the Parties fail to agree as to whether a
delivered quantity meets the Specifications, the Parties
shall have the batch in dispute analyzed by an independent
testing laboratory, mutually agreed upon and located in
Finland. Such laboratory's determination shall be deemed
final as to any dispute over the Specifications and the
non-prevailing Party shall bear the costs of such
independent laboratory's testing.
9 INTELLECTUAL PROPERTY RIGHTS
9.1 Orion Corporation Fermion shall own all inventions relating to the
synthesis of the Compound, arising from and generated specially in the
course of the Development Program. All patents and patent applications
and other proprietary rights, including copyright and know-how, with
respect to such inventions shall be made and held in the name of Orion
Corporation Fermion. The partners shall be given a worldwide,
personal, non-exclusive, non-transferable license (with a right to
grant one (1) sublicense at a time for purposes of manufacturing the
Compound in case Fermion is not exercising its manufacturing option)
to practice said inventions in relation to the synthesis. If such
invention comprises a synthetic process which is more economic or,
without compromising economics, shows an even higher safety profile
than the synthesis described in the Drug Master File, then Fermion
together with the Partners mutually decide on whether or not to use
such new synthesis. If such new process is more economic than the
synthesis pathway actually used, and the Partners and Fermion decide
to use the new process, then the economic benefit will also be
extended to the Partners in form of a reduction of the price per
kilogram of the Compound.
9.2 The know-how referred to in 9.1 shall include, without limitation,
specifications of the materials and components used in the development
of the Synthesis. In addition, the know-how shall include drawings,
specifications and engineering data relating to the Synthesis or to
the manufacture of the Compound; test and quality control procedures
and data, however, are included in each case only insofar as they are
specially developed for the purposes of the development of the
Synthesis and/or the manufacture of the Compound.
9.3 Except for use for the purposes defined in this Agreement, no right,
title, interest, or license in or to any trademark, patent, copyright
or service ▇▇▇▇ or symbol or any other intellectual property right of
a party is granted to the other party under this Agreement.
10 WARRANTIES
10.1. Fermion warrants and represents that the Compound manufactured by
Fermion and delivered to the Partners, their Affiliates or
Sub-Licensee(s) hereunder shall from the date of shipment until the
end of the specified shelf-life conform to the Specifications and be
manufactured in accordance with all applicable laws and regulations
relating to the manufacture of the Compound, including but not limited
to, applicable supranational, national and local laws in the country
where manufacture occurs and current Good Manufacturing Practice to
the extent applicable to Fermion as the producer of the Compound.
10.2 Unless as otherwise expressly stated herein, no other warranties or
representations, express or implied, including the warranties of
fitness for a particular purpose and merchantability, regarding the
Compound are made or shall be deemed to have been
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made by Fermion. Subject to Fermion's warranty and indemnification
obligations hereunder for the Compound, Fermion shall have no
responsibility or liability for the Compound used, supplied, marketed
or sold by the Partners, their Affiliates or Sub-Licensees.
10.3 Fermion warrants that it does not infringe any third party's
proprietary rights with respect to the manufacturing process of the
Compound.
11 INDEMNIFICATION PROVISIONS
11.1 The Partners: The Partners agree to indemnify, defend and hold Fermion
and its affiliates, directors, officers, employees and agents (the
"Fermion Indemnified Persons") harmless from all liabilities, losses,
expenses or damages of any kind, including, without limitation, all
liability, loss, damage or expense (including attorney's fees)
resulting from the sale or use of the Compound, including, without
limitation, claims for actual or alleged sale or use of the Compound.
11.2 Fermion: Subject to clause 8.2 a), Fermion agrees to indemnify, defend
and hold the Partners and their Affiliates, Sub-Licensees, directors,
officers, employees and agents harmless from all liabilities, losses,
expenses or damages of any kind, including, without limitation, all
liability, loss, damage or expense (including attorney's fees)
resulting from latent defects in the Compound caused solely by the
negligence of Fermion in the manufacture of the Compound.
11.3 The Partners shall notify Fermion in writing of any defect that it
learns of, which is likely to affect the manufacture of the Compound
as contemplated by this Agreement.
12 TERM AND TERMINATION
12.1 This Agreement shall enter into force as of the Date of the Agreement
and shall continue in full force and effect until six months after the
expiration of the first right of refusal terms as provided for in
clause 4.2 of this Agreement, unless terminated earlier as provided
herein. In case Fermion decides not to exercise its right of first
refusal as contemplated hereinabove in Part II of this Agreement, then
Fermion shall manufacture the Partners' 36 months' requirements as set
forth hereinbelow in clauses 12.4 and 12.5.
12.2 The Parties may terminate this Agreement upon mutual written agreement
at any time during the Term of this Agreement.
12.3 Either Party shall have the right, without prejudice to any other
rights or remedies available to it, to terminate this Agreement for
cause with immediate effect by written notice to the other Party in
any of the following events:
a) The other Party defaults in the performance of any of its
obligations under this Agreement and such default continues
unremedied for thirty (30) days from written notice to the
defaulting Party;
b) The other Party intentionally makes (or is discovered to have
intentionally made) any material false representations, reports
or claims in connection with the business relationships of the
Parties;
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c) Any of the representatives of the Parties engages in (or is
discovered to have engaged in) fraudulent, criminal or negligent
conduct in connection with the business relationships of the
Parties;
d) The other Party files a petition in bankruptcy, is adjudicated
bankrupt, files for reorganization, is placed in liquidation,
makes a general assignment for the benefit of its creditors,
becomes insolvent or is otherwise unable to fulfill its business
obligations;
e) Any change occurs with respect to the ownership of the other
Party by virtue of dissolution, reorganization or transfer or
sale of fifty per cent (50%) or more of the outstanding stocks of
the other Party to a third party having activities within the
pharmaceutical field.
f) If no agreement has been reached between the Parties regarding
entering into a separate Manufacturing Agreement as set forth in
paragraph 4 and its sub-clauses within the time lines set out in
this Agreement.
12.4 Fermion has the right to discontinue manufacturing of the Compound
without payment of any penalty to the Partners. If Fermion decides to
discontinue manufacturing the Compound during the Term of this
Agreement, Fermion will inform the Partners six (6) months prior to
the effective date of such discontinuation of manufacture. The
Partners may then indicate to Fermion their 36 months' requirement,
and Fermion will manufacture such requirement of the Compound for the
Partners, which will be delivered and invoiced to the Partners as soon
as the Compound is manufactured, as described in Section 4.1 - 4.8
above. The Drug Master File for the Compound will be closed only after
the Partners has accepted the last quantities of the Compound and
found them to be in compliance with the specifications for the
Compound.
12.5 If Fermion decides to discontinue manufacturing of the Compound, then
Fermion agrees to hand over to the Partners the manufacturing and
quality control technology and methodology indicated in the Drug
Master File and analytical methods with which the Partners can
transfer Fermion's manufacturing technology to a third party. This
technology transfer would be at no cost to the Partners, with the
exception that Fermion shall, upon Partners' written request and at
their cost, deliver on the production site the maximum of fourteen
(14) working days of expert advice regarding the technology transfer.
However, Fermion is not responsible for successful manufacturing of
the Compound and its quality control technology and methodology at the
third party's manufacturing site.
12.6 If at any time during the Term:
a) The Partners decide not to file an application for regulatory
approval in any major territory or decide to withdraw such
application due to documented adverse reactions or other safety
issues with the Product or the Product's lack of efficacy or
limited efficacy ("Safety or Efficacy Issues");
b) The Partners' application(s) for regulatory approval in any major
territory is rejected due to the Safety or Efficacy Issues;
c) The Partners' application(s) for regulatory approval in any major
territory is subsequently withdrawn because of Safety or
Efficacy Issues; or
d) The Product is withdrawn from the market in the European Union
and/or the United States of America and/or Japan because of
Safety or Efficacy issues:
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The Partners may, at their option, terminate this Agreement upon
thirty (30) days written notice to Fermion. The Partners must exercise
this right of termination within ninety (90) days of the occurrence of
the event mentioned herein.
12.7 Within thirty (30) days of termination or expiration of this Agreement
the Partners undertake to pay to Fermion all outstanding and accrued
development costs and expenses approved by the Partners up to and
prior to the date of termination or expiration, and any other costs
that are due to be paid.
13 LIMITATION OF DAMAGES
13.1 In no event shall either party be liable to the other party or third
parties for any indirect damages, such as e.g. lost profits in
connection with its performance under this Agreement or any breach
thereof. The restrictions of liability to compensate damages
stipulated for in this article shall not be applied to any breach of
the intellectual property rights of Fermion or the Partners or its
principals, including but not limited to rights of patent, copyright
and trademark or unauthorized disclosure of the trade secrets or other
confidential information of the same provided to either of Partners
under this agreement. The compensation for damages for such breach
shall include any damages suffered by Fermion or the Partners, whether
direct or indirect, including but not limited to damages suffered due
to loss of profits, business or good-will.
14 FORCE MAJEURE
14.1 Neither party shall be liable for delays or failure of performance of
any obligation hereunder by reason of an Act of God, fire, flood, war,
public disaster, strike or labor difference, governmental enactment,
rule or regulation, or any other cause beyond such party's control,
provided that diligent continuing efforts are made to resume
performance if such resumption is a commercially reasonable option.
Written notice must be given to the other party for any claim made
under this Clause.
15. CONFIDENTIALITY
15.1 The Parties shall hold the Confidential Information in strictest
confidence and shall use the same level of care to prevent any
unauthorized use or disclosure of the Confidential Information as it
exercises in protecting its own information of similar nature. The
Parties shall not disclose the Confidential Information to any third
party without a prior written consent of the other Party.
15.2 The Confidential Information shall be supplied to the Parties in
written form and shall be identified as being confidential and
disclosed under the provisions of this agreement. Any information that
is disclosed in oral form shall be confirmed in writing and be deemed
included within the scope of this Agreement.
15.3 The Parties shall have the right to disclose the Confidential
Information to the minimum number of those officers and employees who
need to know it for the purposes of this Agreement. Such disclosure is
allowed only on condition that the persons to whom the Confidential
Information will be disclosed shall be, by law, contract or other
undertaking, under confidentiality obligations corresponding to those
set out in this Agreement.
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15.4 The disclosing Party retains all rights to its Confidential
Information.
15.5 The confidentiality obligation of this Agreement shall not apply to:
a) Confidential Information which at the time of the disclosure
is in the public domain; or
b) Confidential Information which, after disclosure, becomes
part of the public domain otherwise than by breach of this
Agreement; or
c) Confidential Information which can be established by
reasonable and competent proof to have already been in the
receiving Party's possession prior to disclosure and was not
acquired, directly or indirectly, from the disclosing Party;
or
d) Confidential Information which either Party shall receive
from a third party who has the legal right to disclose it
and who would by disclosure not breach, directly or
indirectly, any confidentiality obligation to either Party;
or
e) Confidential Information which is released for disclosure by
prior written consent of the other Party.
f) Confidential Information which has been independently
developed by a Party hereto without exploiting Confidential
Information received from the other Party
g) Confidential Information which is required to be disclosed
by law or by order of court of competent jurisdiction,
provided that due advance notice is given to the other Party
of such a requirement and also then only to the minimum
extent so required.
15.6 The burden of proving that any of the above exceptions is applicable
to a Party to relieve it of its liability or obligations hereunder
shall be upon the Party claiming such exception(s).
16 PUBLICITY AND PUBLICATIONS
16.1 Except as provided by this Agreement or as required by law, neither
Party shall originate any publicity, news release or other public
announcement, written or oral, whether to the public press,
stockholders, or otherwise, relating to this Agreement, any amendment
hereto or performance hereunder, or the existence of any arrangement
between the Parties without the prior written approval of the other
Party, which approval shall not be unreasonably withheld.
17 AUTHORIZATION AND NOTICES
17.1 The Partners shall decide with respect to all decisions, such as
approval of annual cost estimates for R&D or ordering annual
quantities of the Compound. However the project manager appointed by
the Partners shall be responsible and authorized to handle day-to-day
affairs of managing this Agreement.
17.2 All notices referred to herein shall be sent by prepaid registered
mail or by telefax and shall be deemed delivered if sent to the
addresses of the respective Parties hereinbe-
13(23)
low indicated, or such other address as is furnished by written notice
to the other Party.
Notices and proof of payments to Fermion shall be made to:
Orion Corporation Fermion
▇.▇. ▇▇▇ ▇▇
▇▇▇-▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
Fax: + ▇▇▇ ▇ ▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Notices to Hormos and the Partners as well as invoices to the Partners
shall be made to:
Hormos Medical Oy Ltd.
▇▇▇▇▇▇▇▇▇▇▇ ▇-▇ ▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
Fax: + ▇▇▇ ▇ ▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Project Manager
Notices to Tess shall be made to:
Tess Diagnostics and Pharmaceuticals, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇, ▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Fax: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, President
18 ASSIGNMENT
18.1 This Agreement is deemed personal to the Partners and Fermion. Neither
Party shall, without prior written consent of the other Party, assign
this Agreement or any of its rights nor delegate any of its duties or
obligations herein. Without prejudice to Clause 12.3 e), both Parties
agree not to unreasonably withhold consent if such an assignment is
contemplated in connection with the sale or merger by a Party of all
or substantially all of its assets to a third Party, providing the
non-assigning Party receives and accepts such written assurances of
continued performance and commitments from the assignee under this
Agreement as it may reasonably require prior to such an assignment
becoming effective. Any assignment or delegation in derogation of this
provision shall be deemed null and void.
19 GOVERNING LAW AND DISPUTES
19.1 This Agreement shall be governed, construed and interpreted by the
laws of Republic of Finland.
19.2 In the event of any controversy, claim, or dispute arising out of or
relating to any provisions of this Agreement, the Parties shall try to
settle those conflicts amicably between themselves within ninety (90)
days of either Party's written request for amicable set-
14(23)
tlement negotiations. Should the Parties fail to settle, the matter in
dispute shall be finally and exclusively settled by binding arbitration.
19.3 The Parties hereto hereby agree that all disputes arising out of or in
connection with this Agreement (except those involving actions
commenced by or involving third Parties and affecting or involving only
one of the Parties to this Agreement), shall be finally and exclusively
settled in arbitration by a sole arbitrator appointed by the Finnish
Central Chamber of Commerce. Judgement upon the award rendered by
arbitration may be issued and enforced by any court having competent
jurisdiction.
20 MISCELLANEOUS
20.1 WAIVERS: Failure of either Party at any time to require strict
performance by the other Party of any of the provisions of the
Agreement shall in no way affect the right thereafter to enforce the
same, nor shall the waiver of any term, provision, covenant or
condition hereof be taken or held to be a waiver of any subsequent
breach thereof or as nullifying the effectiveness of such term,
provision, covenant or condition.
20.2 COUNTERPARTS: This Agreement may be executed in two or more
counterparts, which all together shall constitute one instrument.
20.3 ENTIRE AGREEMENT: This Agreement and its annexes embody the entire
understanding of the Parties and shall supersede all previous
communications, representations, or understandings, either oral or
written, between the Parties relating to the subject matter hereof.
20.4 AMENDMENTS: No amendments or modifications of this Agreement will be
deemed legally binding unless made in writing and signed by both
Parties hereto.
20.5 SEVERABILITY: In case one or more of the provisions contained in this
Agreement shall, for any reason, be held invalid, illegal, or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this
Agreement, but this Agreement shall be construed by amending or
limiting such invalid, illegal, or unenforceable provision so as to
conform as closely as possible to the intent of the Parties or, if such
is not possible, by deleting such provision from this Agreement.
20.6 ANNEXES: Should any internal discrepancies or variances occur between
this Agreement and its annexes, the Agreement shall take precedence.
20.7 HEADINGS: The headings in this Agreement may not be used in the
interpretation of any provisions hereof.
20.8 USE OF NAMES: Except as expressly required pursuant to law, neither
party will without prior written consent of the other:
(a) Use in advertising, publicity, promotional premiums or otherwise,
any trade name, trademark, trade device, service ▇▇▇▇, symbol, or
any abbreviation, contraction or simulation thereof owned by
either party, or
(b) Represent, either directly or indirectly, that any product or
service of one party is a product or service of the other.
15(23)
20.9 LANGUAGE: The Parties have requested that this Agreement and all
related documents be in English.
20.10 COPIES: This Agreement is established in three (3) copies with
identical language: One copy for Hormos, one copy for Tess and one
copy for Fermion.
20.11 INTRODUCTION OF THE EURO CURRENCY: The introduction of the Euro
("Euro" meaning the unit of the single currency as defined in the
Regulation of the European Council on the introduction of the Euro
which will enter into force at the starting date of the third stage of
the Economic and Monetary Union) shall not have the effect of altering
any term or provision of this Agreement or of discharging or excusing
performance under this Agreement, nor give either of the parties of
this Agreement the right unilaterally to alter or terminate this
Agreement. As Finland participates in the third stage of the Economic
and Monetary Union and consequently the Finnish Markka will cease to
exist as an independent currency, the references to the Finnish Markka
in this Agreement shall mean references to the euro and the parties
hereto shall convert the Finnish Markkas to the euros according to the
European Council Regulation (EC) No 1103/97 of 17 June 1997 on certain
provisions relating to the introduction of the euro.
IN WITNESS HEREOF, the Parties hereto through their authorized
representatives have executed this Agreement as of the date first
written above.
ORION CORPORATION
Fermion
By [ILLEGIBLE] By [ILLEGIBLE]
----------- ------------------------
Title President Title VP [ILLEGIBLE] and Sales
------------ ------------------------
Date: 23, 08, 1999 Date: August 23, 1999
------------ -------------------------
HORMOS MEDICAL LTD.,
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ By
----------- -------------------------
Title CEO Title
------------ -------------------------
Date: 26, 08, 1999 Date:
------------ -------------------------
TESS DIAGNOSTICS AND PHARMACEUTICALS, INC.,
By [ILLEGIBLE] By /s/ ▇▇▇▇▇▇▇ ▇. Why
----------- ------------------------
Title CEO Title Vice President
------------ ------------------------
Date: 01/09/99 Date: 09/01/1999
------------ -------------------------
16(23)
ANNEXES
Annex 1 Development program - activities and schedule
Annex 2 Development program - cost structure
Annex 3 Delivery schedule for quantities to be delivered during the
development program and prices for the quantities to be delivered.
Annex 4: Specification of Compound
17(23)
ANNEX 1
To the
AGREEMENT ON
DEVELOPMENT OF THE SYNTHESIS OF FC-1271A
And
MANUFACTURING OPTION
Dated: May 01, 1999
SCHEDULE OF THE DEVELOPMENT PROGRAM
See enclosure.
FC-1271a AIKATAULU 18.6.1999
1999 2000 2001 2002 2003
---------------------------------------------------------
ID Task Start Finish H1 H2 H1 H2 H1 H2 H1 H2 H1 H2
------------------------------------------------------------------------------------------------------------------------------
* ***************** ************ *** ****** *** *******
* *********** *********** *** ******* *** ******
* ****************** ******* *** ******* *** *******
* ************** *** ****** *** *******
* ***************** ************* *** ******* *** *******
** ****************** ********** *** ****** *** ********
** *********** ******************* *** ****** *** ******
** ************ *** ****** *** ********
** *********************
**************** ** *** ****** *** ****** GRAPH ***
** ****** ********* **********
*************** *** ****** *** *******
** **** ******** ********* *** ******* *** *******
** **** ****** *** ******* *** *******
** **** ***** *******************
********* ** *********** *** ****** *** *******
** ********* *** ****** *** ********
** ********** *** ****** *** ********
** *********** *** ****** *** *******
** ********** *** ****** *** *******
** ********* *** ****** *** *******
** *********** *** ****** *** *******
** ********** ************
******************* **** *** ****** *** ******
*** ******** ******************
**************** ** *** ****** *** ********
*** *************** *** ****** *** *******
*** ******** *** ****** *** *******
*** ********** *** ******* *** ********
Enclosure to Annex 1
Page 17a(23)
Page 17b(23)
FC-1271a AIKATAULU 18.6.1999
1999 2000 2001 2002 2003 2004
------------------------------------------------------------
ID Task Name Start Finish H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2
----------------------------------------------------------------------------------------------------------------------------------
*** *********** *** ******* *** ********
*** ********** *** ******** *** *******
*** ********* *** ****** *** *******
*** ****************** *** ****** *** ********
*** ********* *** ****** *** ******
*** ********** *** ****** *** ******
*** *********** *** ****** *** ******
*** ********** *** ****** *** *******
*** ********* *** ******** *** ******** GRAPH ***
*** *************** *** ********** *** ******** *** ********
*** *********** ************** *** ****** *** *******
*** ********* *** ****** *** *******
*** ********** *** ******* *** *******
*** *********** *** ******* *** ******
*** ********** *** ****** *** *******
*** ********* *** ****** *** *******
*** ******************* ************ *** ****** *** *******
*** ********** ******* *** ****** *** *******
*** *** ** *** ****** *** ******
*** *** *** *** ****** *** *******
*** *** * ****** ****** *** ****** *** ******
*** *** * ****** ****** *** ****** *** ******
*** *** * ****** ****** *** ****** *** *******
*** ** *** ** **** *** ****** *** *******
Enclosure to Annex 1
Page 2
18(23)
ANNEX 2
To the
AGREEMENT ON
DEVELOPMENT OF THE SYNTHESIS OF FC-1271A
And
MANUFACTURING OPTION
Dated: May 01, 1999
COST STRUCTURE OF THE DEVELOPMENT PROGRAM
FC-1271a CALCULATION OF R&D-COSTS
1999 2000 2001 2002 2003 2004
a) CALCULATION OF TIME:
First number: working-months for chemists
Second number: working-months for lab technicians
01. DEVELOPMENT OF SYNTHESIS
Development of synthesis **** **** ****
Development of analytical methods, **** **** **** **** **** ****
Validation and stability studies
02. DEVELOPMENT OF PROCESSES 1999 2000 2001 2002 2003 2004
19(23)
Development of processes, transfer to Oulu ** ** ** **
Validation follow-up *** ***
Analytical processes/transfer to Oulu *** ***
03. REGULATORY AFFAIRS
----------------------
Updates of IND ** ** ** ** **
Compilation of DMF **
TOTAL R&D-WORK FOR FC-1271a *** *** *** *** *** ***
--------------------------- ----- ----- ----- ----- ----- -----
b) CALCULATION OF EXPENSES
--------------------------
04. CHEMISTS
------------
Amount of work-months for chemists 24 34 29 25 12 20
Salary expenses, incl. social costs, material,
infrastructure (2.1 times average wage/mo) **** **** **** **** **** ****
Total costs for chemists (FIM) **** **** **** **** **** ****
05. LABORATORY TECHNICIANS
--------------------------
Amount of work-months for lab technicians **** **** **** **** **** ****
**** **** **** **** **** ****
Salary expenses (incl. social costs, material,
infrastructure (2.1 times average wage/mo) **** **** **** **** **** ****
20(23)
Total costs for lab technicians (FIM) **** **** **** **** **** ****
06. TOTAL COSTS OF PROJECT PER YEAR
----------------------------------- **** **** **** **** **** ****
(FIM):
------
07. TOTAL R&D-COSTS FOR 1999 - 2004 (FIM): ****
------------------------------------------
21(23)
ANNEX 3
-------
To the
AGREEMENT ON
DEVELOPMENT OF THE SYNTHESIS OF FC-1271A
AND
MANUFACTURING OPTION
Dated: May 01, 1999
A) AND B) QUANTITIES OF FC-1271A TO BE PRODUCED BY FERMION DURING THE
DEVELOPMENT PHASE
A) PRICING OF FC-1271A FOR THE FIRST 75 KILOS
C) LAUNCH AND POST-LAUNCH PRICES OF FC-1271A
A)
--
1999 2000
---- ----
Quantity (kg) *** ***
Price per kg **** ****
(FIM)
B)
--
2001 2002 2003 2004
---- ---- ---- ----
Quantity (kg) **** **** **** ****
Price per kg **** **** **** ****
(FIM)
* The indicated prices are subject to review, as contemplated in paragraphs
3.3a) and 3.3b)
22(23)
C) LAUNCH AND POST-LAUNCH PRICES FOR FC-1271A:
----------------------------------------------
Quantity (kg) Price per kg (FIM)
---------------- ---------------------
**** - **** ****
**** - **** ****
**** - **** ****
> **** ****
* The indicated prices are subject to review, as contemplated in paragraph 4.7.
The price is based on the quantity to be delivered (as confirmed by Fermion) in
a Calendar year. At the end of each Calendar year, the total quantity delivered
will be consolidated and if the quantity exceeds one or more of the thresholds
mentioned above, then the lowest price will be used and compensation will be
paid in the form of free goods.
Terms of payment: 30 days net.
-----------------