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CONFIDENTIAL TREATMENT REQUESTED
FOR PORTIONS OF THIS DOCUMENT
EXHIBIT 10.15
MANUFACTURING AGREEMENT
AGREEMENT dated as of February 11, 1998 by and between UNITED THERAPEUTICS
CORPORATION ("UNITED THERAPEUTICS"), a Delaware corporation with principal
offices at ▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ and Steroids, Ltd. ("STEROIDS")
an Illinois corporation with principal offices at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, STEROIDS has the expertise, personnel, and facilities for the
manufacture of active pharmaceutical ingredients (API's), and desires to provide
such service to contracting parties;
WHEREAS, UNITED THERAPEUTICS has worldwide exclusive rights to make and
sell the stable prostacyclin analog formerly known as 15AU81 and now known as
UT-15;
WHEREAS, UNITED THERAPEUTICS and STEROIDS are parties to an agreement
("EXISTING AGREEMENT') consisting of STEROIDS' Proposal for Process Development
Program for Synthesis of 15AU81 dated February 7, 1997, and UNITED THERAPEUTICS'
acceptance of STEROIDS' aforementioned proposal, dated March 14" 1997, and of
STEROIDS' proposal for process development dated November 4, 1997 and UNITED
THERAPEUTICS' acceptance of STEROIDS' proposal dated November 11, 1997 and of
STEROIDS' letter quotation for the cGMP synthesis of 300 grams of 15AU81 dated
October 8, 1997 and UNITED THERAPEUTICS's acceptance of STEROIDS' proposal dated
October 21, 1997.
NOW, THEREFORE, STEROIDS and UNITED THERAPEUTICS wish to continue, expand
and further formalize their EXISTING AGREEMENT with this Manufacturing Agreement
and thus hereby agree as follows:
1. DEFINITIONS
The Defined terms used in this Agreement shall have the following meanings:
1.01 "Affiliate" means (a) any company owned or controlled to the extent of
more than fifty percent (50%) of its issued and voting capital by a party to
this Agreement and any other company so owned or controlled, directly or
indirectly, by any such company or the owner of any such company, or (b) any
partnership, joint venture or other entity directly or indirectly controlled by,
controlling, or under common control of, to the extent of more than fifty
percent (50%) of voting power, or otherwise having power to control its general
activities, a party to this Agreement, but in each case only for so long as such
ownership or control shall continue.
1.02 "API" means the active pharmaceutical ingredient manufactured by
STEROIDS in accordance with the procedures developed under Exhibit A and
provided to UNITED THERAPEUTICS pursuant to this Agreement.
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1.03 "Confirmed Purchase Order" means a purchase order issued by UNITED
THERAPEUTICS and received by STEROIDS for the manufacturing of the API, for
which a completion date has been scheduled.
1.04 "CDER" means FDA's Center for Drugs Evaluation and Research.
1.05 "API Substance" means the chemical entity UT-15.
1.06 "FDA" means the U.S. Food and Drug Administration.
1.07 "Facility" means STEROIDS' or its authorized agent's manufacturing
facility.
1.08 "Manufacturing Date" means scheduled date on which STEROIDS intends to
begin manufacturing UNITED THERAPEUTICS' API pursuant to a Confirmed Purchase
Order.
1.09 "Good Manufacturing Practices" or "GMP" means current good
manufacturing practices, as specified in regulations promulgated from time to
time by the FDA for the manufacture and testing of pharmaceutical materials and
the corresponding requirements of the European Union, Member States of the
European Union, and Canada.
1.10 "Incoming Acceptance Test" means those analytical tests requested by
UNITED THERAPEUTICS to be performed on a received shipment of API, which tests
will be identified by a separate letter between the parties.
1.11 "Lot" means the API produced in a single production run, which may be
contained in one or more containers thereof.
1.12 "New Procedure" means a method, process, or test that is not included
within STEROIDS' SOPS, but which is requested by UNITED THERAPEUTICS in writing
that STEROIDS perform.
1.13 "Sensitive Regulatory Submission Period" means the period between six
(6) months prior and subsequent to a defining date set forth by UNITED
THERAPEUTICS, in which period UNITED THERAPEUTICS intends to file an
Investigational New Drug amendment or a NDA.
1.14 "SOPS" means written standard operating procedures and methods of
STEROIDS.
2. MANUFACTURE, STORAGE AND DISTRIBUTION OF API.
The following provisions relate to the manufacture, storage and
distribution of API for UNITED THERAPEUTICS by STEROIDS.
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2.01 Terms of Supply. The following terms relate to categories of
manufacturing:
2.01.1 Subject to the terms and conditions hereof, during the Term and
any Renewal Terms of the Agreement, STEROIDS agrees to provide and
UNITED THERAPEUTICS agrees to accept from STEROIDS manufacturing
services provided that such services are performed in accordance with
STEROIDS' SOPS and UNITED THERAPEUTICS's written instructions,
including, but not limited to those contained in Exhibit A.
2.01.2 Subject to the terms and conditions of this Agreement, during
the Term and any Renewal Terms of this Agreement, STEROIDS agrees to
sell and UNITED THERAPEUTICS agrees to purchase from STEROIDS API
manufactured under this Agreement in accordance with the terms of
Attachment A:
2.02 Terms of Storage and Distribution. The following terms relate to
storage and distribution of API:
2.02.1 STEROIDS will maintain the appropriate storage conditions
throughout holding and shipping of the manufactured API in accordance
with Sections 7.01 and 7.02, and UNITED THERAPEUTICS's written
instructions.
2.02.2 UNITED THERAPEUTICS will be responsible for order entry and
return material authorization, including all costs attendant thereto.
Such costs include, but are not limited to return postage,
telephone-related services, storage of returned API and other
material, and disposal of returned API and other material.
2.02.3 STEROIDS will only ship API Substance per written instructions
from UNITED THERAPEUTICS, via Facsimile and confirming originals.
STEROIDS will track all shipments, and record and maintain GMP
documentation, including Lot traceability.
(a) STEROIDS may ship API Substance for testing purposes pursuant to
written requests by UNITED THERAPEUTICS.
2.02.4 If requested, STEROIDS will conduct shipping validation in
accordance with a plan to be developed jointly with UNITED
THERAPEUTICS and written by STEROIDS, including a cost estimate. Upon
the conclusion of the shipping validation, STEROIDS will prepare and
submit a report detailing the shipping validation program and its
results. STEROIDS will invoice UNITED THERAPEUTICS therefore at
STEROIDS' reasonable cost.
2.02.5 Unless otherwise instructed by UNITED THERAPEUTICS, STEROIDS
will dispose of all returned API and invoice UNITED THERAPEUTICS for
STEROIDS' cost of disposal; however, costs of handling and disposing
API returned due to an FDA or UNTIED THERAPEUTICS mandated recall of
an entire Lot of API Substance will be invoiced to UNITED THERAPEUTICS
at
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STEROIDS' cost plus [ ]. The cost of return shipping will be invoiced
to UNITED THERAPEUTICS at STEROIDS' cost. Labor and costs relating to
investigation of returned API Substance are not included in this
Agreement.
3. PAYMENT FOR SERVICES
STEROIDS will invoice UNITED THERAPEUTICS for charges related to
manufacturing API as specified in the Proposal in Attachment A with a goal of [
] per kilogram. Payment for services will be in accordance with Attachment A.
Payments shall be due within 30 days of receipt of STEROIDS invoice.
3.01 Late Payments. For any payment owed under this Agreement and not
received by the applicable Due Date, interest will accrue at the monthly rate of
1.5% (18% per year) calculated on daily outstanding balance, and compounded
monthly, on all outstanding balances starting from the applicable Due Date. Any
subsequent payments received will first be applied to the outstanding interest
and then to any then current balance. UNITED THERAPEUTICS agrees to pay for the
costs of collecting any payments due STEROIDS under this Agreement, including
the costs of reasonable collection costs and attorney's fees. If UNITED
THERAPEUTICS does not pay an invoice in full, including interest charges, after
three (3) months of mailing, then UNITED THERAPEUTICS will be in breach of this
Agreement and STEROIDS, at its discretion, may terminate this Agreement under
the provisions of Section 11. 03 hereof.
4. SUPERVISION BY UNITED THERAPEUTICS
4.01 UNITED THERAPEUTICS will be responsible for Quality Control testing
and approval/release of the API unless otherwise provided in writing.
4.02 The following employee of UNITED THERAPEUTICS is hereby designated as
having the responsibility for Quality Control and Quality Assurance and ensuring
that STEROIDS' activities hereunder are carried out in accordance with UNITED
THERAPEUTICS's written instructions and GMP:
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
Title: Director of Operations
Address: UNITED THERAPEUTICS CORPORATION
▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Other employees of UNITED THERAPEUTICS may be designated from time to time,
provided STEROIDS is notified in advance in writing of his or her name, title,
address and telephone number. At no time, however, shall there be more than two
UNITED THERAPEUTICS employees sharing this responsibility.
4.03 The individual(s) designated by UNITED THERAPEUTICS pursuant to
Section 4.02 shall carry out his/her responsibilities through periodic on-site
visits, observation of
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STEROIDS' Facility and activity therein through its observation window,
telephonic reports and written memoranda. UNITED THERAPEUTICS will continue to
monitor STEROIDS' operations as they relate to API by conducting periodic audits
of STEROIDS' facility to assure ongoing compliance with UNITED THERAPEUTICS's
written instructions and GMP. Such individuals as designated shall use due
diligence and best efforts in conducting such Quality Control activities so as
not to delay STEROIDS ability to release Bulk Substance or Product and secure
payment therefore on a regularly scheduled basis.
5. STANDARD OPERATING PROCEDURES AND FORMS
5.01 All activities conducted hereunder by STEROIDS will be conducted in
accordance with Standard Operating Procedures prepared by STEROIDS that comply
with Sections 7.01 and 7.02, and any other written specifications or procedures
provided by UNITED THERAPEUTICS and accepted by STEROIDS.
5.02 STEROIDS agrees that for each Lot of API filled and packaged
hereunder, STEROIDS will complete and furnish to UNITED THERAPEUTICS one (1)
copy of the Batch production records, the originals of which will be retained by
STEROIDS to the extent required by federal regulation. Both parties acknowledge
that such records will include in-process test data for each Lot.
5.02.1 The aforementioned original Batch production records shall be
retained as noted herein, and while so retained shall be available for
inspection by regulatory authorities, UNITED THERAPEUTICS, and UNITED
THERAPEUTICS' authorized representatives,
5.02.2 Sections 5.02 and 5.02.1 shall survive termination of this
Agreement for such period as such records are required to be
maintained by federal regulation.
5.03 STEROIDS and UNITED THERAPEUTICS both agree to maintain a complete
record of information for each Lot and Batch for the period required by law,
including the information referred to in Section 5.02. Each of STEROIDS and
UNITED THERAPEUTICS acknowledges that maintenance of summaries of such
information, as opposed to complete copies of the original records themselves,
will not constitute fulfillment of the obligation referred to in the immediately
preceding sentence.
6. PERMISSION TO INSPECT
6.01 STEROIDS hereby agrees and acknowledges that upon prior reasonable
written notice it will permit authorized representatives of the FDA or
comparable foreign regulatory authority, including, without limitation,
authorized representatives of CDER, to inspect those portions of the STEROIDS
Facility in which STEROIDS performs the activities provided for in this
Agreement.
6.01.1 To the extent STEROIDS has prior notice, STEROIDS agrees to
notify UNITED THERAPEUTICS of any inspection by the FDA that relates
specifically
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to STEROIDS API and give UNITED THERAPEUTICS timely updates on the
inspection. UNITED THERAPEUTICS may send a representative to STEROIDS
on the day of the inspection, however UNITED THERAPEUTICS's
representative may not participate in or observe the inspection itself
or have any substantive written or verbal communication with the FDA
inspectors, unless so requested by STEROIDS. STEROIDS agrees to
provide a timely verbal update to UNITED THERAPEUTICS regarding any
such inspection.
6.02 STEROIDS will provide in a timely manner copies of written
communications from such FDA inspections that pertain to API,
including but not limited to documents entitled Observations. Any such
written communications shall be redacted with respect to information
relating to STEROIDS' APIs and any third party.
6.03 This Article 6 shall survive termination of this Agreement in
perpetuity.
7. COMPLIANCE WITH CURRENT GMP
7.01 STEROIDS agrees that, in performing the activities provided for in
this Agreement, it will comply with GMP.
7.02 STEROIDS agrees to perform all of the activities provided for in this
Agreement in accordance with written instructions provided by UNITED
THERAPEUTICS, unless STEROIDS has previously advised UNITED THERAPEUTICS that it
is not able to do so. In the event UNITED THERAPEUTICS desires to modify its
instructions, UNITED THERAPEUTICS agrees to notify STEROIDS of the planned
modifications in writing and to provide a reasonable period of time before
submitting such modifications to the FDA, if necessary, so that STEROIDS has
sufficient time to implement those modifications that affect its activities
hereunder.
8. FDA REGISTRATION OF THE FACILITY
STEROIDS will perform the activities provided for in this Agreement at its
Facility, unless otherwise specified or approved in advance by UNITED
THERAPEUTICS and the appropriate regulatory authorities. The current Facility
will be registered with the FDA and any new facility where API is synthesized
will also be registered.
9. LABEL CONTROL
9.01 In-process labels are to be used by STEROIDS in performing the
activities provided for in this Agreement. The parties agree that STEROIDS has
the right to modify said labels to the extent permitted by law, upon written
notice to UNITED THERAPEUTICS and, where required, after authorization by CDER.
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10. TERM
10.01 This Agreement will be effective as of the date first set forth above
and will remain in effect for a term of five (5) years ("Term") subject to early
termination in accordance with the terms of the provisions of Section 11. The
parties agree to renew this Agreement automatically for renewal terms of one (1)
year ("Renewal Term") unless either party objects to doing so in writing no
later than four (4) months prior to the expiration of a Term or Renewal Term.
11. TERMINATION
11.01 UNITED THERAPEUTICS will have the right, exercisable in its sole
discretion, with or without cause, to terminate this Agreement by giving to
STEROIDS four (4) months advance written notice of termination. After giving
notice of termination and throughout the period ending on the date the notice of
termination becomes effective, UNITED THERAPEUTICS agrees to continue to perform
all of its obligations hereunder.
11.02 If either STEROIDS or UNITED THERAPEUTICS materially breaches or
defaults in the performance or observance of any of the provisions of this
Agreement and such breach or default is not cured within two (2) months after
the giving of notice by the other party specifying such breach or default, the
other party will have the right to terminate this Agreement in full upon a
further one (1) month's notice. Each party shall also have the right to
terminate this Agreement in full upon a one (1) month's notice in the event that
there has been a loss, destabilization, alteration or contamination of API while
in STEROIDS' possession, wherein the loss, etc. resulted in a material adverse
effect. Termination under this Section 11.04 shall relieve the parties of all
future obligations relating to purchase and performance of services under
Article 2 from and after such termination date.
11.03 Upon termination of this Agreement, whether or not for cause,
STEROIDS will provide written notice to UNITED THERAPEUTICS of any inventory of
API and other materials either provided by or purchased, invoiced and paid for
by UNITED THERAPEUTICS and request written instructions from UNITED THERAPEUTICS
as to where to ship same. Such shipment shall be at UNITED THERAPEUTICS's
expense, and UNITED THERAPEUTICS shall be responsible for all storage costs,
payable prior to release of the inventory and associated materials.
12. WARRANTIES
12.01 Mutual Representations and Warranties. Each Party hereby represents
and warrants to the other Party that this Agreement constitutes the legal, valid
and binding obligation of such Party, enforceable in accordance with its terms,
subject to applicable bankruptcy, reorganization, insolvency, moratorium and
similar laws affecting creditors' rights generally, and that the execution,
delivery and performance of this Agreement does not conflict with any material
agreement, instrument or understanding, oral or written, to which such Party may
be bound, nor violates any law or regulation of any court, governmental body or
administrative or
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other agency having jurisdiction over it, except for such conflicts or
violations that would not have a material adverse effect on the business,
properties or financial condition of the other party.
12.02 UNITED THERAPEUTICS Warranties.
12.02.1 UNITED THERAPEUTICS warrants:
(a) that all activities of UNITED THERAPEUTICS under this
Agreement will be accomplished in accordance with the terms of
this Agreement;
(b) that, to the best of its knowledge, there are no
intellectual property rights, such as, but not limited to
valid United States patents, that would be infringed by the
manufacture, use or sale of API or the use of any New
Procedure. Notwithstanding the preceding sentence, UNITED
THERAPEUTICS makes no warranty with respect to intellectual
property rights relating to any processes performed by
STEROIDS hereunder, except for a New Procedure.
12.03 STEROIDS Warranties.
12.03.1 STEROIDS warrants:
(a) that all activities of STEROIDS under this Agreement will
be accomplished in accordance with (i) the terms of this
Agreement and all Attachments, (ii) all written manufacturing
instructions received from UNITED THERAPEUTICS and accepted by
STEROIDS, (iii) GMP, and (iv) other applicable laws, rules and
regulations;
(b) that, upon delivery of API to a carrier on behalf of
UNITED THERAPEUTICS or UNITED THERAPEUTICS's designee, API
will not be misbranded or otherwise of a nature that may not
be introduced in United States interstate commerce, unless so
directed by UNITED THERAPEUTICS in writing, however, this
warranty of Section 12.03.1 (b) shall not apply if and to the
extent that such condition obtains because UNITED THERAPEUTICS
has breached its warranties in Section 12.02.1;
(c) that it shall not knowingly ship API that has not passed
USP sterility testing or is beyond its labeled expiration
date, or is materially adversely affected due to misbranding,
contamination, having been handled contrary to GMP, or having
been subjected to negligence, unless so instructed in writing
by UNITED THERAPEUTICS, STEROIDS shipping of API is not
intended for any further "Commercial Purpose"
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(d) that, to the best of its knowledge, there are no
intellectual property rights, such as, but not limited to
valid United States patents, that would be infringed by any
processes performed by STEROIDS under this Agreement
12.04 No Other Warranties. The express warranties made in this Agreement
are made in lieu of all other warranties, express or implied, including, without
limitation, the warranties of merchantability and fitness for a particular
purpose.
13. INDEMNIFICATION
13.01 Subject to the provisions of Section 13.05, UNITED THERAPEUTICS will
defend, indemnify and hold harmless STEROIDS and its directors, officers,
employees, agents, successors, and assigns from and against all suits, claims,
liabilities, losses, and expenses, including reasonable attorneys' fees and
expenses, arising directly or indirectly out of injury to persons or property
alleged to have been caused by the design, manufacture, testing, instructions or
warnings accompanying API, or use or unavailability of API or UNITED
THERAPEUTICS breach of this Agreement, except to the extent that the injury is
alleged to have been caused solely by STEROIDS' breach of this Agreement,
intentional action, willful inaction, or gross negligence while providing the
services described herein, provided, however, that the indemnity provisions of
this section 13.01 remain m effect where STEROIDS' allegedly injury-causing
behavior was effected pursuant to specific instructions of UNITED THERAPEUTICS.
The aforementioned injury to persons or property specifically includes, without
limitation, alleged infringement of patent or other intellectual property rights
of third parties by the manufacture, use, or sale of API or the use of a New
Procedure. UNITED THERAPEUTICS shall have full control over the defense of any
such litigation, and agrees to bear all costs and expenses thereof. STEROIDS, at
its own expense, will be entitled to be represented by its own counsel in any
such litigation.
13.02 UNITED THERAPEUTICS agrees that STEROIDS' liability resulting from
the loss, destabilization, alteration or contamination of API of a particular
Lot, wherein such API is lost, destabilized, altered or contaminated such that
it cannot be used in clinical trials or is not placed into commerce, shall not
exceed the amount of any insurance recoveries net of any applicable deductible
realized by STEROIDS in respect to the foregoing plus the value of services
provided with respect to the Lot in question.
13.03 Subject to the provisions of Section 13.02 and 13.05, STEROIDS will
defend, indemnify and hold harmless UNITED THERAPEUTICS and its directors,
officers, employees, agents, successors, and assigns from and against all suits,
claims, liabilities, losses, and expenses, including reasonable attorneys' fees
and expenses, arising directly or indirectly out of injury to persons or
property alleged to have been caused in whole or in part by STEROIDS' breach of
this Agreement, intentional action, willful inaction, or gross negligence while
providing the services described herein to UNITED THERAPEUTICS; provided,
however, that such indemnity shall not apply if such breach, intentional action,
willful inaction, or gross negligence resulted from specific instructions of
UNITED THERAPEUTICS or in part from any breach, intentional
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action, willful action or gross negligence of UNITED THERAPEUTICS. The
aforementioned injury to persons or property specifically includes, without
limitation, alleged infringement of patent or other intellectual property rights
of third parties by STEROIDS' manufacturing procedures, irrespective of API,
performed under this Agreement provided, however, STEROIDS performance of a New
Procedure is specifically excluded from such indemnity. STEROIDS shall have full
control over the defense of any litigation, and agrees to bear all costs and
expenses therefor. UNITED THERAPEUTICS, at its own expense, will be entitled to
be represented by its own counsel in any such action.
13.04 In the event that a suit, claim, liability, loss or expense,
including reasonable attorneys' fees and expenses, arises out of injury to
persons or property alleged to have been caused by both events or circumstances
for which (i) both UNITED THERAPEUTICS and STEROIDS have indemnity obligations
under Sections 13.01 and 13.04, or (ii) UNITED THERAPEUTICS or STEROIDS have
indemnity obligations under Sections 13.01 and 13.04 and one or more third
parties are alleged to be liable for the injury, then the parties agree to pay
losses and expenses arising from such suit claim, liability, loss or expense in
proportion to each party's respective liability for the injury, as adjudged by a
court of competent jurisdiction or, if a settlement is reached, negotiation
between the parties, wherein the parties agree to negotiate their respective
liability for the injury in good faith. UNITED THERAPEUTICS further agrees that
the liability of any such third party shall be attributed solely to UNITED
THERAPEUTICS and that UNITED THERAPEUTICS shall pay any losses and expenses in
proportion to the sum of UNITED THERAPEUTICS's and the third party or parties'
combined liability relative to the total liability.
13.05 No indemnity under Article 13 shall be applicable unless the
indemnified Party (ii) gives the indemnifying Party prompt notice of any claim,
suit or action brought against the indemnified Party, (ii) allows the
indemnifying Party to defend the same, without prejudice to the right of the
indemnified Party to participate at its expense through counsel of its own
choosing, (iii) renders the indemnifying Party all assistance reasonably
necessary in defending against such claim, suit or action at the indemnifying
Party's expense, and (iv) does not compromise or settle such claim, suit or
action without the indemnifying Party's prior written consent. The indemnifying
party shall not settle such claim, suit or action without the indemnified
party's consent if such settlement results in any obligation or liability on the
part of the indemnified party.
14. CONFIDENTIALITY
14.01 Nondisclosure and Nonuse.
14.01.1 STEROIDS and UNITED THERAPEUTICS shall each retain in
confidence information obtained from the other under this Agreement and shall
not disclose such information to any third party except
(a) consultants and Affiliates who are obligated to maintain
it in confidence pursuant to a written agreement that
incorporates by reference
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the terms of Article 14, or that incorporates substantially
similar terms having equivalent scope of protection as those
of this Article 14.
(b) as necessary to obtain approval from a governmental agency
in order to market and sell the API;
(c) as reasonably may be required in a patent application
covering subject matter that is encompassed with this
Agreement; or
(d) as otherwise may be required by law, regulation or
judicial order.
14.01.2 STEROIDS and UNITED THERAPEUTICS each agree that information
that subject to this Article 14 shall be used only for those purposes
contemplated by this Agreement.
14.01.3 Each party shall take all reasonable precautions to safeguard
the confidentiality of the information.
14.02 Exceptions.
14.02.1 The obligations of nondisclosure and nonuse of this Article 14
shall not apply to information that
(a) is known to the receiving party, as evidenced by written
records maintain by the receiving party, or to the public, or
is in the public domain, prior to its disclosure under this
Agreement;
(b) is hereafter lawfully disclosed to the receiving party by
a third party not under an obligation of confidence to the
other party; or
(c) subsequently enters the public domain or becomes known to
the public some means other than a breach of this Agreement.
14.03 Each party acknowledges that the restrictions contained in this
Article 14 are necessary and reasonable to protect the legitimate interests of
the parties and a violation of this Article 14 by a party may result in
irreparable harm to the other party.
14.04 The provisions of this Article 14 shall survive the expiration or
terminate of this Agreement and continue for ten (10) years thereafter.
14.05 All prior confidentiality agreements between the parties hereto are
hereby superseded Article 14 of this Agreement, such that any information
previously disclosed between parties under any such prior agreement shall
henceforth by treated as if disclosed under this Agreement.
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15. MISCELLANEOUS
15.01 Force Majeure. No party will be liable for failure of or delay in
performing obligations set forth in this Agreement, and no party will be deemed
in breach of its obligations if such failure or delay is due to natural
disasters or any causes reasonably beyond the control or anticipation of such
party. Each party agrees to use its best efforts to mitigate the impact on its
performance under this Agreement caused by a force majeure.
15.02 The parties agree that their rights (except for the rights to receive
and obtain payments owed in accordance with this Agreement) and obligations
under this Agreement may not be delegated, transferred or assigned to a third
party without the prior consent of the other party; whether by operation of law
or contract. Nevertheless, either party may transfer or assign its rights and
obligations under this Agreement to any entity which acquires substantially all
of its assets and business, or is an Affiliate of the assigning party.
15.03 Status of Parties. For the purpose of carrying out this Agreement
each party will act an independent contractor and not as partner, joint
venturer, or agent with respect to the other party, and neither party will bind
nor attempt to bind the other party to any contract.
15.04 Notice. Any notice, consent or approval required under this Agreement
will be in writing sent by registered or certified mail, postage prepaid, or by
facsimile, confirmed by such registered or certified mail, and addressed as
follows:
If to STEROIDS:
Steroids Ltd
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Ph.D.
President
If to UNITED THERAPEUTICS:
UNITED THERAPEUTICS CORPORATION
▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇, PhD
President
(▇▇▇) ▇▇▇-▇▇▇▇
All notices shall be deemed effective on the date of mailing, unless otherwise
stated herein. In case either party changes its address or facsimile number at
which notice is be received, written notice of such change will be given without
delay to the other party.
15.05 Entire Agreement. This Agreement and the exhibits attached hereto set
forth the entire agreement and understanding among the parties hereto as to the
subject matter hereof has
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priority over all documents, verbal consents or understandings made between
STEROIDS and UNITED THERAPEUTICS with respect to the subject matter hereof. None
of the terms of this Agreement may be amended or modified except in writing
signed by both parties hereto.
15.06 Waivers. A waiver by either party of any term or condition of this
Agreement in any one instance will not be deemed or construed to be a waiver of
such term or condition for similar instance in the future or of an subsequent
breach hereof.
15.07 Applicable Law. This Agreement will be governed by and construed in
accordance the laws of the District of Columbia without regard to the conflicts
of laws provisions thereof.
15.08 Remedies. The rights and remedies of a party set forth herein with
respect to failure of the other to comply with the terms of this Agreement,
including, without limitation, rights of full or partial termination of this
Agreement are not exclusive, the exercise thereof will not constitute an
election of remedies and the aggrieved party will in all events be entitled to
seek whatever additional remedies may be available in law or in equity.
15.09 Headings. Headings in this Agreement are included herein for case of
reference only and will have no legal effect. References to sections are to
sections of this Agreement unless otherwise specified.
15.10 Title and Intellectual Property to API. UNITED THERAPEUTICS will
retain title to API and all intellectual property in the API, including but not
limited to the agreed initial process to make the API and any New Procedure,
shall belong solely to UNITED THERAPEUTICS. STEROIDS agrees to cooperate fully
in assigning all patent and other intellectual property rights in or related to
the API to UNITED THERAPEUTICS. STEROIDS agrees to cooperate fully in the
preparation of patent applications related to the synthesis of the API. STEROIDS
will retain title and rights to all inventions, concepts, ideas, proprietary
information, manufacturing processes or chemical synthesis not directly and
solely related to the Product, the agreed initial process to make the API and
any new procedure. UNITED THERAPEUTICS shall have the rights to a perpetual,
fully paid, non-exclusive license to any discovery, invention, etc. to which
STEROIDS retain title.
15.11 Use of API. STEROIDS use of the API shall be limited to the
activities described in this Agreement.
15.12 Assignment. Neither this Agreement nor any of its rights or
obligations may be assigned, delegated or otherwise transferred, in whole or in
part, by either Party without the prior written consent of the other, except
that, without securing such prior consent, any Party shall have the right to
assign this Agreement to any successor of such party by way of merger or
consolidation or the acquisition of substantially all of the entire assets of
such Party relating to the subject matter of this Agreement, provided, however,
that such successor shall expressly assume all of the obligations of such Party
under this Agreement. The Parties agree that this Agreement shall be binding
upon and inure to the benefit of their respective successors and approved
assigns.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above by their duly authorized officers.
UNITED THERAPEUTICS CORPORATION STEROIDS, LTD.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------ ------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇, Ph.D. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Dated: Dated:
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PROPOSAL FOR PROCESS DEVELOPMENT
PROGRAM FOR SYNTHESIS OF 15AU81
PROPOSAL NO: P-LUNGRX-9701
Prepared for Lung Rx, Inc.
by
STEROIDS, LTD.
February 7, 1997
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SUMMARY
This proposal is prepared by Steroids, Ltd. (hereafter as Steroids) for Lung Rx,
Inc. for a development program to achieve an new method for the chemical
synthesis of 15AU81.
In conducting this process development program Steroids will concentrate on [ ]
alternate routes which are described in this proposal and which have been
presented and discussed with Lung Rx and its representatives.
This process development program is expected to require 12 months, initially six
months using essentially the fulltime efforts of three PhD level chemists and
second six months, using two essentially the fulltime efforts of two PhD level
chemists. These personnel will receive overall direction in their efforts by ▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President of Steroids.
The program is targeted to begin on March 1, 1997. Pricing for the program is
estimated by Steroids to be not more than [ ] per month for the first six
months. For the second six months, Steroids expects the billing to be not more
than [ ].
The proposal provides flexible provisions for acceleration, reduction, and/or
termination of the program.
Lung Rx will have sole ownership of all technology developed or invented by
Steroids during the course of the program and will pay no royalties or other
compensation for such ownership. The proposal contains provisions for Steroids
to assist Lung Rx in patent prosecution, if necessary.
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TABLE OF CONTENTS
Page
I. BACKGROUND ON STEROIDS, LTD. 4
A. Brief History 4
B. General Capabilities 4
II. OBJECTIVE OF THIS PROCESS DEVELOPMENT PROGRAM 4
A. Present level of process development of 15AU81 4
B. Primary Objective 4
C. Second Objective 5
D. "Best Efforts" Basis for Reaching the Primary Objective 5
III. PROPOSED TECHNIQUES TO REACH OBJECTIVES 5
A. Novel Routes 5
B. Order of Development 12
IV. PROJECT MANAGEMENT AND OVERSIGHT 12
A. Appointment and Function of the Project Manager 12
B. Appointment and Function of the Project Overseer 12
C. Organization of Work Effort 13
V. MANAGEMENT OF PROJECT INFORMATION 14
A. Responsibility for Management of Project Information 14
B. Secrecy of Project Information 14
C. Documentation for the Project Information 14
D. Communication of Project Information 14
F. Project Information Files to be Maintained 15
VI. PROGRAM COSTS AND FINANCIAL MANAGEMENT 17
A. Program Costs 17
B. Billing 18
C. Program Reduction Provisions 19
D. Program Termination Provisions 19
E. Program Acceleration Provisions 19
F. Financial Management 19
VII. OWNERSHIP OF TECHNOLOGY AND PATENT ASSISTANCE 20
A. Ownership of Technology 20
B. Patent Assistance 20
VIII. INITIATION OF THE PROGRAM 20
IX. CLOSING STATEMENT 20
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I. BACKGROUND ON STEROIDS, LTD.
A. Brief History
Steroids, Ltd. was founded in 1981 by ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ as a
custom synthesizer of modified nucleotides and steroidal natural products, with
a total 3 employees. It has since expanded into other areas such as vitamin D
analogs, sphingolipids, polycyclic aromatic hydrocarbons, peptide synthesis,
propellant stabilizers, radiolabled synthesis and chiral synthesis. It has added
GMP capability for drug manufacture, photosynthesis capability, and extensive
analytical and preparative scale up to 72 liters. Steroids has grown to 15 full
time employees, most with PhD's in organic chemistry.
B. General Capabilities
Steroids, Ltd. is located in the Chicago Technology Park adjacent to
the campus of the University of Illinois at Chicago in a modern, well-equipped
chemical synthesis laboratory with space of about 4000 sq. ft.
In addition to standard glassware and laboratory rotary evaporator,
Steroids has the following major equipment for synthesis and analytical
work: [ ].
Steroids, Ltd. can handle most of its analytical work with its own
equipment. Steroids, Ltd. routinely contracts out its microanalyses to Midwest
Microlabs in Indianapolis, Indiana and its 400 MHz NMR and high resolution
mass spectrometry to the University Illinois at Chicago.
II. OBJECTIVE OF THIS PROCESS DEVELOPMENT PROGRAM
A. Present level of process development of 15AU81
The present method (Upjohn U62, 840, DMF) of making 15AU81 has a total
of [ ] synthetic steps from [ ] in a very low overall yield. Though the
process is well thought out and has had considerable development [ ]. Based on
our experience, it is better for Steroids, Ltd. to pursue new routes than
modifications of the existing method.
B. Primary Objective
The primary objective of the process development program is to provide
Lung Rx with a new and practical process for the manufacture of 15AU81.
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C. Secondary Objective
After achieving the primary objective, Steroids, Ltd. will demonstrate
the new process works by producing 5 gms of final product meet the FDA purity
requirements.
D. "Best Efforts" Basis of Reaching the Primary Objective
Both parties to this proposal recognize that a process development
program such as the one proposed is a speculative venture which may or may not
reach its objectives. Accordingly both parties agree to extend their "best
efforts" toward reaching the primary objective including providing to each other
timely information on problems in reaching both the primary and second
objectives and in the case of Steroids, Ltd. providing accurate and timely
information on the progress of its efforts to reach the primary and secondary
objectives.
III. PROPOSED TECHNIQUES TO REACH OBJECTIVES
A. Novel Routes
Steroids will pursue the following four routes to reach the primary
objective.
Structure of 15AU81.
[DIAGRAM]
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1. Route 1:
[DIAGRAM]
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21
Synthesis of sidechain:
[DIAGRAM]
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22
2. Route 2:
[DIAGRAM]
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23
3. Route 3:
[DIAGRAM]
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[DIAGRAM]
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4. Route 4:
[DIAGRAM]
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[DIAGRAM]
B. Order of Development
Steroids plans to work on both 1 and 2 in parallel and to select one of
the two routes, once it is clear which of the two routes is the more favorable.
Steroids, Ltd. expects this decision to occur in six months. If none of two
routes works, Steroids, Ltd. will carry out routes 3 and 4 in the second six
months. Steroids, Ltd. will work on the optimization of the preferred route in
order to reach the primary objectives.
IV. PROJECT MANAGEMENT AND OVERSIGHT
A. Appointment and Function of the Project Manager
Steroids proposes to appoint ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ as Project Manager for
this program. The principal function of the project Manager, in addition to his
duties as a process developer, is the proposal of the specific work to be done
by Steroids, Ltd. in the program and the justification of the priority of the
work over any other work. In particular, ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ will be responsible
for justification of experimental priorities to Lung Rx. In addition, the
Project Manager will have responsibility for communications with Lung Rx and for
the management of all information and documentation for the program. In the
absence of the Project Manager, Steroids proposes to appoint ▇▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ as Alternate Project Manager to perform the duties of the Project
Manager in the Project Manager's absence.
B. Appointment and Function of the Project Overseer
For program communication and oversight Steroids has proposed the Lung
Rx appoint a Project Overseer as Lung Rx representative for the project. The
principal functions of the Project Overseer are to receive all program
communications from
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Steroids' Project Manger and disseminate the communication within Lung Rx
appropriate and, if and when necessary, express any objections that Lung Rx may
have as to priorities on the work which Steroids is performing to develop a
process for 15AU81.
C. Organization of Work Effort
1. Project Team
The work on this process development program will carried out by a
project team consisting of ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇.
▇▇▇▇▇▇▇▇ ▇▇▇. The team will be under the overall direction of ▇▇. ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇.
2. Weekly Meetings
The project team will meet weekly to review program progress, to add
any new relevant program-related information, to set priorities for upcoming
work, and to divide work assignments.
3. Communication with Project Overseer
The Project Manager from Steroids will communicate with the Project
Overseer biweekly to describe and justify priority on work to follow no earlier
than the beginning of the following week. Normally the priority for this work
will have been set at the weekly project team meeting of the that morning or a
previous weekly meeting. Communication will be initially by telephone with
confirmation by FAX sent by Project Manager to the Project Overseer with the
Project Overseer's concurrence returned by FAX.
4. Conduct of Project Work
a. Process Developers
All project work will be conducted by members of the Project Team, the
"Project Developers", including literature searches, design of synthetic
schemes, experimental design, set up of experimental equipment, conduct of
experiments, analysis of experimental results, and instrumental or chemical
analysis of experimentally generated materials, with the exception that Steroids
may subcontract portions of experimental work or analysis of experimentally
generated materials where Steroids has no capability to do such project work.
b. Normal Workday for Project Work
Project work will be conducted during Steroids' normal workday which is
8:30 am to 5:00 pm on Monday through Friday. However, due to the extended time
expected for certain experiments requiring the attention of the process
developers, it is expected that developers will conduct work after normal hours
or on weekend.
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c. Documentation of work
Each process developer will keep a project notebook to document all of
his project work, including literature searches. The entries in the notebook
will be: 1) sufficient to find all sources of information used prior to the
conduct of experiments, 2) sufficient to faithfully reproduce any experiments
conducted, and 3) sufficiently documented and witnessed to legally prosecute any
invention which the experiments described by the documentation are used to
support.
d. Weekly Time Sheets
Each process developer will keep a time sheet in which he will record
the amount of time devoted to project work on this program as well as other work
on this program (i.e. weekly project meetings, project management, monthly
project reviews, and documentation work on the project). Time sheets will be
turned in weekly.
e. Adherence to All Applicable Laws and Regulations
All project work will be conducted in accordance with all applicable
laws and regulations, specifically any laws or regulations related to
occupational safety and health, environmental protection, workmen's
compensation, and liability insurance. Steroids shall be solely responsible for
meeting such laws and regulations as they relate to any project work in this
program.
V. MANAGEMENT OF PROJECT INFORMATION
A. Responsibility for Management of Project Information
Management and accuracy of project information shall be solely the
responsibility of Steroids, and this responsibility will be delegated to the
Project Manager.
B. Secrecy of Project Information
Secrecy for all project information will be governed by the
confidentiality agreement signed between Lung Rx and Steroids.
C. Documentation for the Project Information
Documentation of project work will be done as described in paragraph
4.c above. In addition Steroids will document either in computer readable format
or hard copy all project related information.
D. Communication of Project Information
1. Project Work Effort
Project work effort will be communicated to Lung Rx in two ways:
Biweekly during the verbal communication between the Project Manager and the
Project Overseer, the Project Manager will verbally describe the work on the
project carried out during the prior two weeks and if it is necessary or
required by the Project Overseer, the Project Manager will send or fax the
information generated during the previous two week period.
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2. Project Work Progress
Monthly, the Project Manager will submit to the Project Overseer, a
process report which will describe the progress made in the program during the
prior month.
3. Meeting
The Project Manager (or Project Team) will meet directly with the
Project Overseer and other representatives of Lung Rx at any time in order to
review program progress and project future progress. These meeting will be held
at the site chosen by the Project Overseer. The meeting will include: a formal
presentation by the member of project team on the work done and the progress
made toward reaching the programs primary and secondary objectives, an estimate
of program cost during the next three month period, and a description of the
project work to be carried out during the next three months.
F. Project Information Files to be Maintained
Steroids will maintain the following files either in computer readable
format or in hard copy.
1. List of Raw Materials Used
Steroids will maintain a "list of raw materials used" in the project
work. "Raw materials" will include reagents, solvents, catalysts, filter media,
inerting agents, chromatographic media, absorption media, and any other
processing aid which come into contact with processing media. For each such raw
material the following information will be entered into this file: chemical
name, common synonym, CAS number, supplier name, common grade designation,
formula (if applicable), and formula weight (if applicable). If available the
following additional information will be provided for each raw material: melting
point, boiling point, specific gravity or density. In addition any additional
specifications provided by the manufacturer shall be entered and any additional
chemical or physical properties of the raw material measured by Steroids shall
be entered.
2. List of Compounds Prepared
Steroids will maintain a "list of Compounds Prepared" during the
project work. "Compound Prepared" will include all isolated intermediates and
products, all unisolated intermediates identified or believed to have been made
other than transient species, and all reagents prepared. For each such compound
prepared, the following information will be entered into this file: chemical
name, common synonym (if any), CAS number (if any), appropriate project notebook
references to preparation and analyses of the compound, chemical formula,
abbreviated chemical structural formula, and formula weight. In addition if the
compound is isolated, all measured physical and chemical properties of the
compound will be listed. In addition, if available by literature search the
melting point, boiling point, specific gravity, and density will be listed.
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3. Historical File of Experiments
Steroids will maintain an "Historical File of Experiment". The
experiments in this file are expected to primarily "synthesis trials". Generally
a given such "synthesis trial" will include all reaction and purification steps
required to complete synthesis of a specified product or targeted intermediate.
In case where a synthesis trial produces additional material in earlier product
in order to make other products or intermediates than the specified product or
targeted intermediate, then in the entries for the synthesis trial is "other
products or intermediates", the synthesis trials which produced the materials
for use in making these "other products or intermediates" will be referenced.
For each experiment the following information will be entered into this file:
experiment number designation, notebook page designations, date experiment was
completed, and type of experiment (synthesis trial, chemical or physical
analysis, or "other"). For synthesis trials the following information will also
be entered into the file: chemical name of final product produced, chemical name
of primary starting material, overall yield, yield for each process step in
which an intermediate or product was isolated, measured characteristics of final
product, and specific notes on the synthesis trial which Steroids believes to be
relevant. For chemical or physical analysis experiments, the following
information will also be entered into the file: chemical name of material
analyzed, prior experimental number designation of material analyzed, type of
analysis, reason for analysis, results of the analysis, and specific notes on
the analysis which Steroids believes to be relevant. For other experiments, the
following information will be entered into the file: chemical name of material
involved (if any), type of experiment, reason for experiment, brief description
of experiment, results of experiment and specific notes on the experiment which
Steroids believes to be relevant. This file will be arranged by the historical
date of completion of the experiment.
4. File of Literature References
Steroids will maintain all the literature reference and publications
cited in the process development or relative to the process development.
5. Running File of Correspondence
Steroids will keep a running file of all correspondence regarding
project work in hard copy.
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6. Program Contract and Amendments
Steroids will keep a hard copy of program contract including a copy of
this proposal, and purchase orders issued pursuant to the proposal or any
subsequent proposal, any revised proposal contract, and any amendments to the
eventual contract resulting from this proposal.
7. Material Safety Data Sheet File
Steroids will obtain a hard copy of the material safety data sheets for
all chemical raw materials used in this program.
VI. PROGRAM COSTS AND FINANCIAL MANAGEMENT
A. Program Costs
1. Labor Cost
Steroids will employ three fulltime PhD level chemists on this process
development program in the first six months. Based on Steroids' annual budget,
Steroids will charge [ ] per chemist per year (which include chemist annual
salary [ ] with [ ] fringe benefit to [ ], also Steroids will charge [ ]
indirect cost [ ]). Accordingly, the monthly rate is [ ] per chemist. Steroids
will ▇▇▇▇ Lung Rx monthly [ ] for the labor cost in the first six months. In the
second six months, two fulltime PhD level chemist will work on this process
development program and Steroids will ▇▇▇▇ Lung Rx monthly [ ] for the labor
cost. Each fulltime chemist will work on this process development project no
less than [ ] hrs per month.
2. Analytical Cost
Steroids has capability to do the following analytical work: wet
chemical analysis, IR spectra, UV and Vis spectra, HPLC, GC, melting point and
rotation. These analytical work will be performed by the project team member
with no additional charge. Steroids anticipates that it will be necessary to go
outside for other analytical work including NMR, high resolution mass spectra,
and element analysis. Steroids will use outside contractor to conduct these
analytical work and charge to Lung Rx. In computing its maximum monthly billing
for such analytical work, Steroids will be allowed for a total of [ ] each month
for outside analytical work.
3. Purchase of Raw Materials
Steroids will charge Lung Rx for all raw materials purchased
specifically for use in this program. Any raw materials purchased for this
program will be used only for this program. Steroids will charge Lung Rx its
actual purchased cost for chemical raw materials (including the cost of shipping
and handling). In computing its maximum monthly billing Steroids has allowed for
[ ] per PhD chemist per month for the purchase of raw materials for the program.
The total cost allowed for purchase of raw materials is [ ] per month.
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4. Purchase of Equipment Specific for the Program
At the present time Steroids sees no need to purchase equipment for use
specific to the program.
5. Use of Outside Subcontractors
Steroids will not use any outside subcontractors except for analytical
work.
6. Travel Expenses
Lung Rx shall reimburse Steroids for all travel expenses of Steroids
personnel made in the execution of the program, including travel for meeting
with Lung Rx.
B. Billing
1. Description
Steroids will ▇▇▇▇ Lung Rx at the end of each calendar month for all
the costs of the program which includes labor costs, raw materials costs, and
analytical costs. Lung Rx will not be responsible for paying any invoices for
other subcontractors or vendors. The billing statement will contain the
following information:
a. The total number of hours of chemist time worked on this program
(the minimum hour for a chemist is 160 if Steroids charges for a full month).
b. The total amount of payment for labor which include fringe benefit
and indirect cost for the previous calendar month.
c. The total amount of payments for outside analytical work for the
previous calendar month.
d. The total amount of payments for raw materials for the previous
calendar month.
e. The total amount of payment for travel expenses during the previous
calendar month.
f. The total of all charges accumulated from the previous month.
g. The balance forwarded from the prior month's billing.
h. The balance after current billing.
i. Steroids' name, payment address, phone number and invoice number.
j. Lung Rx's name, billing address, project name, purchase order
number.
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2. Terms
Billing terms will be net 30 days.
C. Program Reduction Provisions
Lung Rx may, at any time after the first six calendar months of the
program are complete, reduce the pace of the program b y specifying a reduction
of number of PhD level chemists worked on this process development program.
However, Steroids proposes that the minimum two PhD level chemists remains
working on this program.
D. Program Termination Provisions
Lung Rx may terminate the process development program at any time after
the completion of the six calendar months of the program by giving written
notice of at least 30 days before the termination date to Steroids without any
penalty. If Lung Rx wish to terminate the process development program before the
completion of the six calendar months of the program, Lung Rx shall give a
written notice at least 60 days before the termination date to Steroids without
any penalty. Upon notification of Steroids of termination of the program, the
Project Overseer will direct the Project Manager as to the completion of work in
progress and Steroids will make no subsequent commitments for expenditures in
connection with the project. Upon termination, the obligation of Lung Rx to
Steroids shall be limited to reimbursement of all documented charges and
expenses incurred by Steroids in connection with the project up to the date of
termination.
E. Program Acceleration Provisions
Lung Rx may its option accelerate the pace of program anytime after the
completion of the first six calendar months of the program. If Lung Rx decides
to accelerate the pace of the program, Lung Rx and Steroids would renegotiate
the program.
F. Financial Management
1. Responsibility for Program Financial Record
Steroids will be solely responsible for keeping accurate, up-to-date,
and secure financial records for the program. These records shall include all
program specific purchase orders, incoming invoices, payment records, invoices
to Lung Rx, records of Lung Rx payment, travel expenses reports, and time sheet
of chemists.
2. Separate Program Financial Records
Steroids shall keep the financial records of the program separate from
the financial records of other projects which Steroids pursues and from other
records related to the program.
3. Access to Program Financial Records
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VII. OWNERSHIP OF TECHNOLOGY AND PATENT ASSISTANCE
A. Ownership of Technology
Lung Rx shall own all new technology developed during the program
whether this new technology is patentable or not.
B. Patent Assistance
At Lung Rx's request, Steroids will provide assistance to Lung Rx in
order to prosecute any patents related to new technology which is generated by
the program.
VIII. INITIATION OF THE PROGRAM
Lung Rx may initiate this program by issuing a purchase order to
Steroids referencing this proposal in an amount not to exceed [ ] which will
cover the maximum costs of the program for the first six months. This purchase
order should state the initiating date of the program. Thereafter Lung Rx should
issue additional purchase orders for the program one month prior to the last day
covered by previous purchase order.
IX. CLOSING STATEMENT
Steroids believes that this proposal demonstrates that Steroids has
very serious interest in developing a new process for manufacture of 15AU81 for
Lung Rx, that Steroids has the technical resources to carry out this process
development program, and that Steroids will carefully manage this program in the
Lung Rx's interest. If Lung Rx requests further modification of the terms under
which this proposal be carried out, Steroids proposes that these changes be
negotiated in good faith by Lung Rx and Steroids and that said changes be
incorporated in the initial Lung Rx purchase order under Amendments of Proposal
P-LungRx-9701, with the both authorized signatures from Lung Rx and Steroids
representatives on the Amendments indicating Lung Rx and Steroids acceptance of
the changes.
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