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Certain confidential information has been omitted
and filed separately with the Commission.
Exhibit 10.1
MANUFACTURING AND SUPPLY AGREEMENT
This MANUFACTURING AND SUPPLY AGREEMENT ("Agreement") is made as of August
25, 2000 (the "Effective Date"), by and between DSM Fine Chemicals Austria AG, a
corporation organized under the laws of Austria, having its principal offices at
St.-Peter-Strasse 25, A-4021 Linz, Austria ("DSM") and GelTex Pharmaceuticals,
Inc., a corporation organized and existing under the laws of the State of
Delaware with its principal place of business at 153 Second Avenue, Waltham,
Massachusetts 02451 USA ("GelTex").
R E C I T A L S :
A. DSM and GelTex have entered into Manufacturing Agreements on May 21, 1996,
July 2, 1997 and September 27, 1999.
B. DSM has developed a production process for the manufacture of the Product (as
hereinafter defined) for GelTex and is interested in producing commercial
quantities of Product for GelTex and its Licensees.
C. GelTex is interested in obtaining commercial quantities of Product from DSM.
NOW, THEREFORE, in consideration of the promises contained herein and other
valuable considerations, and intending to be bound hereby, the parties agree as
follows:
1. DEFINITIONS.
1.1 DEFINITIONS. As used in this Agreement, the following terms shall have
the corresponding meanings set forth below:
(a) "FDA" means the United States Food and Drug Administration. ---
(b) "cGMPS" means the current Good Manufacturing Practices promulgated
by the FDA, as they may be amended from time to time.
(c) "LICENSEES" means those third parties which GelTex has licensed to
commercialize the Product throughout the Territory.
(d) "PAA" means poly (allyamine hydrocholride).
(e) "PAA SPECIFICATIONS" means the specifications for PAA as described
in EXHIBIT A attached hereto, with such amendments thereto as the parties
may from time to time approve.
(f) "PAA PRODUCTION FACILITY" means the facility of Salsbury Chemicals
located in Charles City, Iowa, or such other facility as GelTex shall from
time to time specify.
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(g) "Product" means colesevelam hydrochloride (as defined below) that
consists of PAA crosslinked with epichlorohydrin that has been further alkylated
with 1-bromo-6-trimethylammoniumhexane and 1-bromodecane.
(h) "PRODUCTION FACILITY" means the facility of DSM located in Linz,
Austria.
(i) "PROCESS" means the production process for the Product as described in
EXHIBIT B, with such amendments as the parties may from time to time approve.
(j) "SPECIFICATIONS" means the specifications for the Product as described
in EXHIBIT C, with such amendments thereto as the parties may from time to time
approve in writing.
(k) "SUBCONTRACTOR" means Powdersize, Inc. or such other subcontractor
approved in writing by GelTex.
(l) "SUBCONTRACTOR PRODUCTION FACILITY" means the facility of Powdersize,
Inc. located in Quakertown, Pennsylvania, USA, or the facility of any other
subcontractor approved in writing by GelTex; provided, however, that should DSM
determine to no longer rely upon the services of a subcontractor, then the
Subcontractor Production Facility shall mean the Production Facility.
(m) "REGULATORY STANDARDS" means (i) the facility license requirements of
all regulatory agencies applicable to the equipment and facilities used in the
storage of the PAA and in the manufacture, packaging and storage of the Product
and (ii) any standards or regulations of any governmental authority that apply
to DSM's or its subcontractors' handling and storage of the PAA and manufacture,
packaging, handling, storage and shipping of Product.
(n) "TECHNICAL AGREEMENT" means the Technical Agreement for the Commercial
Manufacture and Testing of colesevelam hydrochloride in the form attached hereto
as EXHIBIT D. The terms and conditions of the Technical Agreement are
incorporated herein by reference.
(o) "TERM" means such period of time as shall commence on the Effective
Date and shall terminate on [*].
(p) "TERRITORY" means all the countries of the world.
* Confidential information omitted and filed separately with the Commission.
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2.0 TERMS OF ENGAGEMENT AND PAA SUPPLY.
2.1 APPOINTMENT AS MANUFACTURER. Subject to the provisions of this Agreement,
GelTex hereby appoints DSM as non-exclusive manufacturer of the Product, and DSM
hereby accepts such appointment and agrees to act as such non-exclusive
manufacturer.
MINIMUM PURCHASE OBLIGATIONS. GelTex agrees that the minimum amount of Product
which GelTex, together with its Licensees, are obligated to order and purchase
from DSM each calendar year during the Term at the Product Price valid in the
respective calendar year as set forth in Section 6 below shall be such amount as
is equal to [*] (hereinafter referred to as "Annual Minimum Quantity") . Should
GelTex and/or its Licensees fail to order and purchase the minimum amount in any
calendar year during the Term, GelTex shall be obligated to pay DSM [*]
With respect to quantities of Product [*], in a given calendar year in excess of
the Annual Minimum Quantity, GelTex, and/or its Licensee, shall notify DSM of
its intention to purchase in excess of the Annual Minimum Quantity, but shall be
under no obligation to accept any proposal submitted by DSM or any third party.
2.3 STATUS OF PREVIOUS CONTRACTUAL COMMITMENTS. The parties agree that the
execution of this Agreement and the obligations of GelTex and its Licensees
hereunder shall replace the obligations of GelTex and its Licensees regarding
the Product that are set forth in Article 14 of the Agreement between the
parties dated July 3, 1997 (the "1997 Obligations"). Should this Agreement be
terminated by GelTex for breach in accordance with Section 13.1 hereof prior to
the end of the Term, neither GelTex nor its Licensees shall have any obligation
to DSM with respect to the Product as a result of the 1997 Obligations. The
provisions of the 1997 Obligations relating to [*] shall continue until [*];
provided, however, that should GelTex terminate this Agreement in accordance
with the terms of Section 13.1, all provisions of the 1997 Obligations,
including those related to [*], shall terminate.
2.4 SUPPLY OF PAA. For purposes of the Agreement, GelTex shall supply, or cause
its contract manufacturer to supply, DSM with sufficient quantities of tested
and released PAA that meets the PAA Specifications. [*] DSM shall be invoiced
for the cost of the PAA it receives, and the shipping costs and all other costs
associated with the delivery of PAA to DSM. DSM agrees to pay such invoices
within thirty (30) days from receipt of the invoice for the PAA. If the actual
cost of the PAA exceeds [*] per kilogram, excluding shipping, packaging,
insurance and taxes, then [*]
* Confidential information omitted and filed separately with the Commission.
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[*]. Alternatively, if the actual cost of the PAA is less than [*] per
kilogram, excluding shipping, packaging, insurance and taxes, then the Product
price set forth in EXHIBIT E [*]. In order to calculate the appropriate amount
of reimbursement or the appropriate reduction to the Product price, as the case
may be, the parties agree that the ratio of PAA solution to Product shall be
[*]. DSM agrees to bear all costs associated with the replacement of any PAA
destroyed, damaged or lost while DSM has title to the PAA.
In the event GelTex is for whatsoever reason not able to supply DSM with
sufficient quantities of tested and released PAA that meets the PAA
Specifications DSM shall be entitled but not obligated to source some or all of
the required quantities of PAA that meets the Specifications elsewhere.
2.5 ACCEPTANCE OF PAA. During the Term, DSM shall test the PAA received by
GelTex or its contract manufacturer in the manner outlined on EXHIBIT A for
conformance to the PAA Specifications. Upon receipt, DSM shall store PAA in
accordance with all Regulatory Standards, including cGMPs. DSM shall complete
the described testing of PAA within fifteen (15) calendar days of its receipt.
If DSM determines that the PAA does not conform to the PAA Specifications or if
the shipment of PAA contains a quantity of PAA that is less than the reported or
expected amount, DSM shall provide written notice to GelTex of such defect,
nonconformance and/or shortage within twenty (20) calendar days of DSM's receipt
of the PAA.
3.0 FORECASTING AND PURCHASE ORDERS.
3.1 Initial Forecast. GelTex' and its Licensees' requirements for Product to be
delivered during 2001 (the "2001 Delivery Period") are set forth in EXHIBIT G to
this Agreement. GelTex agrees to purchase and to cause its Licensees to purchase
not less than the quantity set forth in EXHIBIT G during the 2001 Delivery
Period, and DSM will not be obligated to accept purchase orders for delivery
during the 2001 Delivery Period of [*] of such amount. Notwithstanding the
foregoing the quantities for the first quarter 2001 cannot be increased by
GelTex without the consent of DSM. By October 1, 2000 GelTex will provide firm
orders and delivery dates for Product to be delivered in the first quarter 2001.
It is agreed by GelTex and DSM that quantities to be delivered to GelTex shall
be approximately evenly spread over the quarter. By April 1, 2001 at the latest
GelTex shall inform DSM in writing, if and to what extent GelTex exercises its
option to increase the quantity of Product to be delivered during the 2001
Delivery Period as set forth in EXHIBIT G [*]. Notwithstanding the foregoing if
GelTex decides to increase the quantity of Product to be delivered during the
2001 Delivery Period, DSM shall extend its 2001 production campaign accordingly,
and the additional Product shall be delivered after delivery of the regular
quantities. Binding orders setting forth the precise quantities of Product to be
delivered by DSM to GelTex and/or its Licensees in a specific calendar quarter
as well as the delivery dates shall be issued by GelTex and/or its Licensees not
later than three months prior to the commencement of the respective calendar
quarter. It is agreed by GelTex and DSM that quantities to be delivered to
GelTex shall be approximately evenly spread over the quarter concerned. All
purchase orders for the Product shall be for a minimum batch size quantities
reasonably agreed to by the parties.
* Confidential information omitted and filed separately with the Commission.
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DSM shall be obligated to accept all purchase orders that are delivered in
accordance with this Section 3.1.
Additional Forecasts. On August 1, 2001 and on each August 1 thereafter, GelTex
will deliver to DSM a forecast of its and its Licensees quarterly requirements
for delivery of Product during the next calendar year (the "Firm Forecast").
GelTex agrees to purchase and to cause its Licensees to purchase [*] of Product
set forth in each Firm Forecast for the respective quarter, and DSM will not be
obligated to supply purchase orders [*]. In addition to the Firm Forecast, on
August 1, 2001 and each August 1 thereafter, GelTex shall also deliver to DSM a
forecast of [*]. Such forecast shall not be binding upon, or create any
obligation or liability with respect to GelTex or its Licensees .
3.3 Updated Forecast. On October 1, 2001 and on each October 1 thereafter,
GelTex will deliver to DSM an updated forecast of [*] for delivery of Product
during the next calendar year (the "Updated Firm Forecast"). GelTex agrees to
purchase and to cause its Licensees to purchase [*] the Product set forth in
the Firm Forecast for the respective quarter.
3.4 Purchase Orders. Binding orders setting forth the precise quantities of
Product to be delivered by DSM to GelTex and/or its Licensees in a specific
calendar quarter as well as the delivery dates shall be issued by GelTex and/or
its Licensees not later than three months prior to the commencement of the
respective calendar quarter. It is agreed by GelTex and DSM that quantities to
be delivered to GelTex shall be approximately evenly spread over the quarter
concerned. All Purchase Orders for the Product shall be for a minimum batch size
quantities reasonably agreed to by the parties. DSM shall be obligated to accept
all Purchase Orders that are delivered in accordance with this Section 3.
4.0 MANUFACTURE AND DELIVERY
4.1 MANUFACTURE OF PRODUCT. During the Term, DSM will manufacture and deliver to
GelTex, or its designee, the Product ordered by GelTex or its Licensees on the
dates set forth in the purchase orders pursuant to the terms of this Agreement.
All Product shall meet the Specifications and shall be produced in accordance
with the Technical Agreement, the Process, the Specifications, cGMPs and all
other applicable Regulatory Standards.
4.2 RIGHTS TO VISIT PRODUCTION FACILITIES. During the manufacture of the
Product, DSM shall permit, and shall cause its Subcontractor to permit,
designated employees and agents of or consultants to, GelTex or its Licensees,
to inspect the Production Facility and the Subcontractor Production Facility
where the Product is manufactured, packaged or stored, and to be present
* Confidential information omitted and filed separately with the Commission.
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during and monitor the manufacture and/or packaging of the Product. DSM shall
take appropriate actions to adopt reasonable suggestions of GelTex to correct
any deficiencies identified by such inspection or monitoring. Any inspection
and/or monitoring conducted under this provision shall be performed during usual
business hours following reasonable advance notice to DSM. DSM shall promptly
notify GelTex prior to making any changes with respect to the employees
responsible for supervising the manufacture of the Product.
4.3 NOTICE OF ACCIDENTS. During the manufacture of the Product, DSM shall report
to GelTex in writing, without undue delay, the following accidents directly
related to the use of hazardous substances in the manufacture, packaging and/or
storage of the Product or the PAA:
- accidents resulting in personal injuries requiring more than first aid
treatments;
- accidents resulting in illness and/or loss of consciousness;
- accidents resulting in property damage exceeding US$10,000;
- accidents resulting in environmental damage;
- any other accident which potentially could result in serious
consequences; and
- any leak, spill or other release into the outside environment of the
Product or hazardous waste produced in the manufacture of the Product
or any accidental exposure of a hazardous nature of any of DSM's or
its Subcontractor's employees to any of the foregoing.
4.4 DELIVERY OF PRODUCT. During the Term, DSM shall ship Product to GelTex on
the delivery dates set forth in the Purchase Orders [*]. As far as not otherwise
provided herein DSM shall, at its expense, provide all materials and supplies
necessary to manufacture the Product. DSM shall, at its expense, prepare and
package the Product for delivery to GelTex or its designee. All packaging
supplies to be furnished by DSM hereunder, the method of shipping and the
designation of the carrier for shipping shall be subject to GelTex's prior
written approval which approval shall not be unreasonably withheld. All
transportation, handling, insurance costs and all costs and charges relating to
the shipment of Product to GelTex or its designated contract manufacturer shall
be paid by GelTex, and DSM shall invoice GelTex as a separate item for any such
costs paid by DSM for GelTex's account. GelTex shall pay each invoice within
thirty (30) days from its receipt of the invoice.
4.5 TITLE AND RISK OF LOSS. Title to and risk of loss associated with the
Product ordered under the Purchase Orders shall pass to GelTex, or its
Licensees, [*].
5.0 PRODUCT ACCEPTANCE.
5.1 RECEIPT AND TESTING OF PRODUCT. All Product shipped shall be
accompanied by quality control certificates of analysis signed by a duly
authorized official of DSM confirming
* Confidential information omitted and filed separately with the Commission.
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that each batch of Product covered by such certificate meets the Specification's
release requirements and shall be deemed accepted by GelTex unless GelTex, its
Licensee or its contract manufacturer, acting reasonably and in good faith,
shall give written notice of rejection (hereafter referred to as a "Rejection
Notice") to DSM within sixty (60) days after receipt of the Product by, on
behalf of, or for the account of GelTex, or its Licensee at the
finisher/packager facility.
5.2 REJECTION NOTICE. The Rejection Notice shall state in reasonable detail
(sufficient to enable DSM to identify the nature of the problem and the tests or
studies to be conducted by or on its behalf to confirm or dispute same) the
reason why the Product is not acceptable. Any Rejection Notice shall be
accompanied by copies of all written reports relating to tests, studies or
investigations performed to that date by or for GelTex on the Product batch
rejected. GelTex shall have the right but not the obligation, to return the
rejected Product to DSM at DSM's cost, and title to and risk of loss associated
with the rejected Product shall transfer to DSM upon receipt by DSM of the
rejected Product.
5.3 RETURN OF PRODUCT. Upon receipt of such Rejection Notice, DSM may require
GelTex to return the rejected Product or samples thereof (at DSM's cost) to DSM
for further testing, in which event such Product or samples thereof as the case
may be, shall be returned by GelTex to DSM. Upon receipt of the rejected Product
title to and risk of loss associated with the rejected Product shall transfer to
DSM. If it is later determined by the parties or by an independent laboratory or
consultant that GelTex was not justified in rejecting the Product, GelTex shall
reimburse DSM for the costs of the return, as well as any other costs or
expenses incurred by DSM as a result of the rejection or return and retest and
title to and risk of loss associated with such Product shall transfer to GelTex
upon placement of the Product on the designated carrier by DSM.
5.4 DISPUTE RESOLUTION. The test results or basis for rejection generated by
GelTex or its contract manufacturer shall be conclusive unless DSM notifies
GelTex, within 35 days of receipt by DSM of the Rejection Notice, that it
disagrees with such test results. In the event of GelTex's receipt of such a
notice by DSM, representative samples of the batch of the Product in question
shall be submitted to a mutually acceptable independent laboratory or consultant
(if not a laboratory analysis issue) for analysis or review, the costs of which
shall ultimately be paid by the party that is determined by the independent
laboratory or consultant to have been incorrect in its determination of whether
the Product should be rejected. Should the fees associated with the work
conducted by the independent laboratory or consultant be due upfront, each of
GelTex and DSM shall pay 50% of such upfront fees, and the party that is
determined by the independent laboratory or consultant to have been incorrect in
its determination shall reimburse the other party.
5.5 PAYMENT OBLIGATIONS SUSPENDED FOR REJECTED PRODUCT. If any order of Products
is rejected by GelTex, GelTex's duty to pay all amounts payable to DSM in
respect of the rejected Product shall be suspended until such time as it is
determined by an independent laboratory or consultant that the Products in
question should not have been rejected by GelTex. If only a portion of an order
is rejected, only the duty to pay the amount allocable to such portion shall be
suspended.
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5.6 REPLACEMENT OF REJECTED PRODUCT. In the event any Product is appropriately
rejected by GelTex, DSM shall replace such Product with conforming goods as soon
as reasonably possible, and in any case within sixty (60) days from the receipt
of the PAA required for the manufacture the replacement Product. The acceptance
procedure detailed in this Article 5 shall be repeated for the replacement
Product. DSM shall be fully responsible for all costs associated with replacing
the Product, including the cost of the PAA required to replace the Product. In
lieu of receiving replacement Product, GelTex may request that DSM provide a
credit to GelTex for the amount, if any, previously paid by GelTex to DSM on
account of the Product in question. The credit shall be provided by DSM to
GelTex promptly following the expiration of the period during which DSM may
dispute a Rejection Notice as contemplated above (unless the Rejection Notice is
disputed by DSM, in which event such credit shall be given only if the dispute
is resolved in favor of GelTex). Replacement Product, as aforesaid, shall be
delivered to GelTex or its designee at no cost to GelTex if GelTex has already
paid for the rejected Product and not received a credit therefor, as aforesaid.
All delivery costs, including insurance, incident to the return of Product to
DSM shall be paid by DSM, unless the rejection is determined not to have been
appropriately rejected, in which case GelTex shall reimburse DSM for the costs
of the return, as well as any other costs or expenses incurred by DSM as a
result of the rejection or return.
5.7 REJECTION AND MATERIAL BREACH. Should GelTex appropriately reject [*] of the
amount of Product released by DSM's quality assurance department and delivered
to GelTex during the [*] period, including any batches of replacement Product,
in a [*] period, DSM shall be deemed to be in material breach of this Agreement,
and GelTex shall be entitled to terminate this Agreement in accordance with the
terms of Section 13.1.
6.0 PRODUCT PRICE AND PAYMENT TERMS.
6.1 PRODUCT PRICE. GelTex agrees to pay DSM for its manufacturing services in
accordance with the rates set forth in EXHIBIT E. In addition to the rates set
forth in EXHIBIT E GelTex shall bear all costs invoiced by the Subcontractor to
DSM in connection with the milling of the Product by the Subcontractor.
6.2 PAYMENT PROCEDURES. DSM shall invoice GelTex for Product following the
receipt of the certificates of analysis and related batch records to GelTex as
per Section 8.2 below. Except as set forth in Section 5.5, payment for the
Product will be made within thirty (30) days after GelTex's receipt of DSM's
invoice. All payments required to be made hereunder shall be paid in Euro and
made by corporate check or by wire transfer of immediately available funds to
the financial institution, account number, and account party's name designated
in writing by DSM to GelTex at the place of payment.
6.3 TAXES. DSM shall be responsible for any Austrian federal, state, or local
excise or other tax or assessment, which DSM may be required to pay upon the
sale, production or transportation of the Product (including taxes based on
DSM's income or DSM's franchise fees or taxes and
* Confidential information omitted and filed separately with the Commission.
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including amounts DSM is required to pay in connection with the importation of
PAA and other materials or the exportation of the Product).
7.0 REPRESENTATIONS AND WARRANTIES.
7.1 PRODUCTION FACILITIES. DSM represents and warrants that upon execution of
this Agreement (i) the Production Facility and the Subcontractor Production
Facility are in compliance with all applicable requirements of the Regulatory
Standards, (ii) there are no pending or uncorrected citations or adverse
conditions noted in any inspection of the Production Facility and the
Subcontractor Production Facility, and (iii) DSM or its Subcontractor, as the
case may be, has obtained all licenses, authorizations and approvals required by
any federal, state or local governmental authority for the production of the
Product at the Production Facility and the Subcontractor Production Facility.
7.2 MANUFACTURE OF THE PRODUCT. DSM represents and warrants that all Product
shall be manufactured, tested, stored and released in conformance with (i) the
Technical Agreement, (ii) all applicable requirements of the Regulatory
Standards including cGMPs, (iii) DSM's standard operating procedures, as
attached to this Agreement as EXHIBIT H and (iv) the Process. DSM shall not (i)
modify the Process, (ii) modify any method of manufacturing or testing the PAA
or the Product, (iii) change or relocate any major equipment (as defined in
EXHIBIT I) used in the production of the Product, or (iv) change any vendor
providing critical materials (as defined in EXHIBIT J) for the manufacture of
the Product or any Subcontractor used in the manufacture of the Product without
obtaining the prior written consent of GelTex which consent shall not be
unreasonably withheld.
7.3 PRODUCT. DSM represents and warrants that upon delivery of the Product to
GelTex the Product shall (i) conform to the Specifications, (ii) not be
adulterated or misbranded within the meaning of the Federal Food, Drug and
Cosmetic Act and (iv) be sold free and clear of any liens, claims or
encumbrances.
7.4 DISCLAIMER OF OTHER WARRANTIES. OTHER THAN THE WARRANTIES SET FORTH IN THIS
ARTICLE 7, DSM MAKES NO OTHER WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED,
CONCERNING THE PRODUCT SUPPLIED HEREUNDER WHETHER OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE; AGAINST INFRINGEMENT OR OTHERWISE. GELTEX ASSUMES ALL
RISK WHATSOEVER AS TO THE RESULT OF THE USE OF PRODUCT THAT CONFORMS TO THE
SPECIFICATIONS; WHETHER USED SINGLY OR IN COMBINATION WITH OTHER SUBSTANCES,
OTHER THAN RISK OF HARM RESULTING FROM A BREACH OF WARRANTY BY DSM HEREUNDER.
8.0 RECORDS, REGULATORY MATTERS.
8.1 RECORDS AND CERTIFICATES. DSM will, and will cause its Subcontractor to,
maintain complete and accurate records relating to the manufacture, packaging,
storage and testing of Product for the period required by applicable Regulatory
Standards. DSM agrees to provide
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copies of such records to GelTex, or its Licensees upon request. Without
limiting the generality of the foregoing, DSM shall, or shall cause its
Subcontractor to (i) perform quality assurance and control tests as set forth in
EXHIBIT F on each batch of Product manufactured before delivery and shall
prepare and deliver to GelTex a written report of the results of such tests,
with each report setting forth for each lot delivered the items tested,
specifications and results in a signed certificate of analysis containing the
types of information which is required by the FDA and (ii) prepare and maintain
for a period of not less than seven (7) years and for so long as required under
applicable requirements of the Regulatory Standards for each lot of Product
manufactured a signed certificate of manufacturing compliance containing the
types of information that is required by the Regulatory Standards, which
certificate will certify that the lot of Product was manufactured in accordance
with the Specifications and cGMPs. In addition, DSM will supply, and will cause
its Subcontractor to supply, for each batch of Product complete batch
manufacturing, packaging and control records.
8.2 PRODUCT RELEASE. As required by the FDA, GelTex, or its Licensee shall
assume the responsibility for the release of the Product. As soon as practicable
following the receipt of the certificates of analysis and related batch records,
GelTex shall instruct DSM whether or not to ship the Product. Such notification
shall be in writing, and shall occur not later than fourteen (14) days following
GelTex's receipt of the certificates of analysis and related batch records.
8.3 REGULATORY INVESTIGATIONS. GelTex agrees that it will promptly notify DSM of
any investigation or inspection of the FDA or other regulatory authority visits
or if any regulatory body makes written or oral inquiries concerning the
Product, if such investigation, inspection or inquiry would have a material
impact on DSM's obligations hereunder. In addition, GelTex shall submit to DSM
for its information all responses to such inspections upon filing the same with
the appropriate regulatory agency. Similarly, DSM shall promptly (and in any
event, no later than two days following the event triggering notification)
notify GelTex, through a written contact report, if the FDA or other regulatory
authority visits or makes written or oral inquiries about the Production
Facility, the Subcontractor Production Facility or DSM's procedures regarding
the testing and storage of the PAA and/or the production, testing, storage or
handling of the Product. DSM shall furnish GelTex, within ten (10) days after
receipt, a copy of any report or correspondence issued by the governmental
authority in connection with such visit or inquiry, purged only of confidential
information that is unrelated to the Product or the activities under this
Agreement.
8.4 COMPLAINTS. DSM will cooperate, and will cause its Subcontractor to
cooperate with GelTex and any governmental authority in evaluating any
complaint, claim, or adverse drug reaction report related to the production of
the Product, and shall provide information and data and take such other steps as
may be appropriate to resolve any identified problems.
8.5 DEVIATIONS. As may be further discussed in the Technical Agreement, DSM will
provide, and will cause its Subcontractor to provide, GelTex with timely
notification of all deviations, notes to file, and other deficiencies that may
impact the quality of the Product.
9. INTELLECTUAL PROPERTY RIGHTS
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9.1 RIGHTS TO INFORMATION. All Confidential Information, as defined in Article
11 and other materials, information, data, results, programs and suggestions of
every kind and description supplied to DSM by GelTex or prepared or developed by
DSM relating to the Product (including the process for manufacturing the Product
and any improvements thereto) shall be the sole and exclusive property of
GelTex, which shall have the full, unlimited right to use and permit others to
use, any and all such materials and information without payment of any
compensation to DSM except as specifically described herein. Upon termination of
this Agreement, or upon request by GelTex, DSM will promptly turn over to GelTex
all written Confidential Information then in its possession or control, except
for the records or copies thereof retained by DSM as described in Article 8 or
which are required by DSM to utilize its license described in Section 9.2
hereof. DSM shall ensure that its Subcontractors are bound by confidentiality
obligations substantially similar to those set forth herein and DSM agrees to
enforce such confidentiality obligations against its Subcontractor.
9.2 DSM will disclose and will cause its subcontractors to disclose to GelTex
all data, materials and information generated or produced by DSM or any of its
employees or agents or the subcontractors, as the case may be, in connection
with or as a result of the manufacturing the Product (including Process
improvement) (hereinafter referred to as "Results") without undue delay. GelTex
shall own all inventions and Results whether or not patentable, made by GelTex
and/or DSM in connection with the manufacture of the Product (including the
Process and improvements to the Process), including, but not limited to, the
production process itself ("Inventions"); provided, however, that GelTex will
grant [*] license to DSM to use only those Inventions and Results that do not
specifically involve and/or do not require reference to Product for use outside
of the Field. The term "Field" means the manufacture of the Product or of any
product that could potentially compete with the Product (including off-label
uses).
9.3 TRADEMARKS. GelTex and/or its Licensees, shall as they deem appropriate,
originate, select and apply to register one or more trademarks under which the
Product shall be sold and distributed. Such trademarks shall be the exclusive
property of GelTex or its Licensee, as the case may be, and GelTex or its
Licensee shall be solely responsible for all prosecution, defense, maintenance
and costs relating to the trademarks. All decisions relative to such trademarks
shall be made by GelTex or its Licensee. DSM shall bear no responsibility for
any of the costs and efforts associated with the selection, searching,
registration, licensing and protection of such trademarks. DSM shall not use, or
assert any claims in, any such trademarks or any trademark confusingly similar
to any of such trademarks; provided, however, that GelTex shall not choose a
trademark which is the same as, or confusingly similar to a trademark owned by
DSM.
10 INDEMNITIES AND LIMITATION OF CLAIMS
10.1 DSM INDEMNIFICATION OF GELTEX. DSM shall as far as not otherwise provided
in this Art. 10 defend, indemnify and hold harmless GelTex and its Licensees,
their respective officers, directors, employees, successors and assigns from any
and all claims, damages, costs or expenses, including reasonable attorney's
fees, which arise out of or relate to: (i) the failure of
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Product, Production Facility and/or Subcontractor Production Facility to meet
the warranties set forth in Art. 7, (ii) DSM's late-, non- or misperformance of
its obligations hereunder, (iii) the negligence or willful misconduct of DSM,
its employees, agents or subcontractors, and (iv) the Product or Process
infringing upon any proprietary right of a third party if the infringement is
caused by an adjustment to the Process or change in the Product by DSM which was
not approved by GelTex in writing; provided however that [*].
Upon the receipt of notice of the filing of any such claims or suits for which
GelTex would seek indemnification under this Section 10.1, GelTex agrees to
promptly notify DSM in writing, cooperate with DSM in the defense of the claim,
and at DSM's cost permit DSM attorneys to handle and control the conduct and/or
settlement of such claims or suits. DSM will be not be liable for any costs
associated with the settlement of any claim or action brought against GelTex
unless DSM has received prior notice of the settlement negotiations and has
agreed to the settlement in writing.
10.2 GELTEX INDEMNIFICATION OF DSM. Notwithstanding Section 10.3 hereof GelTex
shall be responsible and indemnify DSM against all loss, liability, damage and
expense, including reasonable attorney's fees, incurred by DSM arising out of
any infringement of third party patent or other intellectual property rights in
connection with the manufacture of the Product by DSM hereunder in accordance
with the Process. Notwithstanding the above, GelTex shall not have the
obligation to indemnify DSM if such loss, liability, damage or expense arises
out of or relates to an adjustment to the Process or change in the Product by
DSM that was not approved by GelTex in writing.
Upon the receipt of notice of the filing of any such claims or suits for which
DSM would seek indemnification under this Section 10.2, DSM agrees to promptly
notify GelTex in writing, cooperate with GelTex in the defense of the claim, and
at GelTex's cost permit GelTex attorneys to handle and control the conduct
and/or settlement of such claims or suits. GelTex will be not be liable for any
costs associated with the settlement of any claim or action brought against DSM
unless GelTex has received prior notice of the settlement negotiations and has
agreed to the settlement in writing.
10.3 LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR
LOSS OF PROFITS, SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL OR PUNITIVE
DAMAGES, WHETHER DUE OR ARISING OUT OF ANY LEGAL THEORY, provided, however, that
this limitation shall not apply on claims brought by a party hereto against the
other for indemnification for claims founded under statute and not only based on
a contract, if any, paid by a party to this Agreement to a third party to the
extent that the party making such a payment to a third party is entitled to be
indemnified pursuant to either Section 10.1 or 10.2 hereof.
10.4 [*]
* Confidential information omitted and filed separately with the Commission.
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[*]. Any action for breach of this contract must be commenced within one year
after the party bringing such action first has knowledge of such cause of
action.
11.0 CONFIDENTIALITY, PUBLICITY
11.1 DEFINITION OF CONFIDENTIAL INFORMATION. As used in this Agreement,
"Confidential Information" means all information transmitted by GelTex, or its
Licensees or otherwise obtained by DSM in connection with the manufacture of the
Product, subject to the exceptions specified below. Confidential Information
shall include Inventions, trade secrets, technical information, know-how, and
tangible materials. Confidential Information may be contained in various media,
including, without limitation, patent applications, manuals, plans, drawings,
designs, technical specifications, samples, laboratory notebooks, internal
financial data, projections, forecasts and other documents and records of
GelTex, or its Licensees, whether or not in writing and whether or not labeled
or identified as confidential or proprietary. All data, materials, information,
Manufacturing Technology and records relating to the Product which are developed
by DSM in the course of the manufacture of the Product shall be considered
Confidential Information. Notwithstanding the above, Confidential Information
shall not include information which DSM can demonstrate (i) is in or enters the
public domain through no act of DSM in breach of this Agreement, or (ii) is
disclosed to DSM or was disclosed to DSM prior to the date of this Agreement, by
a party other than GelTex or one of its contract manufacturers or Licensees, and
such third party is entitled to disclose it without obligation of confidence or
(iii) was known to DSM before the date of this Agreement and was not subject to
such a confidentiality obligation or (iv) is required by law to be disclosed,
provided reasonable advance notice of such requirement is given to GelTex before
such disclosure to permit GelTex to seek a protective order or other similar
order with respect to such Confidential Information.
11.2 OBLIGATIONS WITH RESPECT TO CONFIDENTIAL INFORMATION. During the Term and
for a period of seven (7) years following termination of the Term, without
GelTex's prior written consent, DSM will not disclose any Confidential
Information to any third party. DSM will only use Confidential Information for
the purpose of fulfilling its obligations under this Agreement and pursuant to
the license granted to DSM in Section 9.2 hereof. DSM agrees that it will take
such reasonable steps as may be necessary to prevent the disclosure or use of
any Confidential Information by its officers, employees or agents except as
provided herein, including, but not limited to, enforcing appropriate
confidentiality agreements with such persons. Notwithstanding the above, DSM
shall not be prohibited from disclosing Confidential Information if such
disclosure is required by law; provided, however, that prior to any such
disclosure, DSM shall give GelTex written notice of the required disclosure and
shall permit GelTex a reasonable period of time in which to seek to limit or
avoid the required disclosure.
12.0 FORCE MAJEURE.
Neither GelTex nor DSM shall be in default in the performance of their
obligations hereunder to the extent that such performance is delayed or
prevented by an act of God, weather conditions,
* Confidential information omitted and filed separately with the Commission.
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strikes, lockouts, inability to procure labor, materials, or fuels due to
shortages, fires, riots, interference by civil or military authorities, or acts
of war (declared or undeclared), or any other similar cause which is beyond the
reasonable control of either party; provided however, that should DSM experience
a Force Majeure event which results in its inability to perform under this
Agreement, GelTex's minimum purchase obligations set forth in Section 2.2 shall
be suspended during the existence of the Force Majeure event. Should DSM be
unable to perform hereunder due to a Force Majeure event that continues for more
than six (6) months, GelTex shall be entitled to terminate this Agreement upon
written notice to DSM immediately thereafter.
13.0 TERMINATION.
13.1 If either party hereto commits a material breach of any of its obligations
under this Agreement, the non-breaching party may, at its option, terminate this
Agreement by giving the other party at least fourty-five (45) days prior written
notice of its intent to terminate this Agreement, which notice shall specify the
breach and the termination date. Unless the breaching party cures the breach
prior to the termination date, the Agreement shall terminate.
13.2 Notwithstanding the foregoing, (i) if GelTex fails to pay any sums owed
hereunder within thirty (30) days after DSM has notified GelTex that such sums
are past due, DSM may terminate this Agreement immediately, and (ii) if either
party should become insolvent or seek relief under any bankruptcy, debtor
relief, or similar law or if any proceeding against either party under any such
law remains in effect for a period of thirty (30) consecutive days, the other
party may terminate this Agreement immediately without any liability whatsoever.
Such termination, however, shall not affect any claim for damages accrued prior
to the termination.
13.3 Upon termination of this Agreement, GelTex shall pay DSM all amounts due
and payable by GelTex hereunder less amounts due and payable by DSM to GelTex.
13.4 Any termination of the Agreement shall not release the parties from
liabilities and obligations accrued as of the date thereof.
13.5 Articles 7, 8, 9, 10, 11 and this 13.5 and any other provisions required to
interpret and enforce the parties' rights and obligations under this Agreement
shall survive the termination of this Agreement to the extent required for the
full observation and performance of this Agreement by the parties in accordance
with its terms.
14.0 NON-WAIVER OF RIGHTS.
Failure by DSM or GelTex to enforce the terms and conditions of the Agreement
shall not affect or impair such terms or conditions, or the right of DSM or
GelTex to avail itself of such remedies as it may have for any breach of such
terms or conditions under the provisions of this Agreement, in equity or at law.
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15.0 NOTICES.
Any notice given under this Agreement shall be deemed adequate if made by
facsimile, and certified mail or registered mail, return receipt requested,
postage prepaid, or by reputable overnight courier, and addressed as follows:
TO DSM: DSM Fine Chemicals Austria AG
St.-Peter-Strasse 25
A-4021 Linz,Austria
Attention: Hubert Stuckler
Telephone Number: ++43 70 6915 3525
Facsimile Number: ++43 70 6915 2803
TO GELTEX: GelTex Pharmaceuticals, Inc.
153 Second Avenue
Waltham, Massachusetts 02451
Attention: Joseph E. Tyler
Telephone Number:781 -290-5888
Facsimile Number:781 -290-5890
or to such other address as either of the parties shall designate by notice
given as herein required.
16.0 AMENDMENTS AND WAIVER.
This Agreement cannot be amended in any respect except in writing duly executed
by both parties. No waiver of compliance with any provisions or conditions of
this Agreement and no approvals provided for in this Agreement shall be
effective unless evidenced by a written instrument executed by the party to be
charged.
17.0 ASSIGNMENT.
Neither this Agreement nor any of the rights or obligations of the parties
hereunder shall be assignable or delegable by either party hereto without the
prior written consent of the other party, which consent shall not be
unreasonably withheld; provided, however, that DSM's obligations under this
Agreement may not be assumed or performed by any affiliate of DSM or any third
party unless such affiliate or third party has agreed to comply with the terms
and conditions of this Agreement. Notwithstanding the foregoing, GelTex shall
have the right to assign this Agreement to any successor to the business to
which this Agreement relates, provided the successor assumes all of GelTex's
obligations hereunder. The assignment of this Agreement or of rights or
obligations hereunder to licensees of GelTex other than Sankyo Pharma Inc. shall
require DSM's written consent which shall not be unreasonably withheld.
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18.0 GOVERNING LAW.
This Agreement shall be governed by the laws of Austria except for its
conflict of law principles. The UN Convention on the International Sale of Goods
shall not apply.
19.0 ARBITRATION
Any dispute, controversy or claim arising out of or relating to this Agreement,
or the breach, termination or validity thereof (hereinafter referred to as
"Dispute"), shall be decided by arbitration administered by the American
Arbitration Association (hereinafter referred to as "AAA") in accordance with
the Commercial Rules of the AAA. The arbitration shall be conducted in Boston,
Massachusetts in the English language and the award shall be rendered in
Massachusetts The tribunal shall consist of a single arbitrator. The award
rendered by the arbitrator shall be final and binding upon the parties hereto,
and judgment upon the award rendered may be entered by either party in any court
that has jurisdiction over the parties or the subject matter of the controversy
or claim. The expense of such arbitration, including attorneys' fees, shall
be allocated between the parties as the arbitration shall decide. The parties
agrees not to institute any litigation or proceedings against each other in
connection with this Agreement except as provided in this Section 19.
20.0 ENTIRE AGREEMENT.
This writing, including the Exhibits, and the Technical Agreement
constitute the entire understanding between the parties and shall supersede any
prior agreements between them with respect to the subject matter hereof. Each
party acknowledges that there are no other understandings which relate to the
matters covered herein or in the other above-described agreements which are
inconsistent with any provisions of the Agreement.
21.0 SEVERABILITY.
The validity of any provision of the Agreement shall render the provision
ineffective, but shall not effect the enforceability of the remainder of the
Agreement. In such event, the parties agree to negotiate, in good faith, a
substitute, valid provision that most nearly affects their intent in entering
into this Agreement.
22.0 PARTIES INDEPENDENT.
In making and performing this Agreement, the parties act and shall act at
all times as independent entities and nothing contained in this Agreement shall
be construed or implied to
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create an agency, partnership or employer and employee relationship between DSM
and GelTex. Except as specifically provided herein, at no time shall either
party make commitments or incur any charges or expenses for or in the name of
the other party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate as of on the day and year written.
DSM Fine Chemicals Austria AG GelTex Pharmaceuticals, Inc.
By: /s/ Jo Scholz /s/ Hubert Stuckler By: /s/ Mark Skaletsky
---------------------------------- --------------------------------
Name:______________________________ Name:______________________________
Title: ____________________________ Title: ____________________________
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