Exhibit 10.19
[********] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
AMENDEDANDRESTATED SUPPLY AGREEMENT
entered into effective as of the date of the last party to sign below (hereinafter referred to as the “Effective Date”)
by and among
TARGACEPT, INC., a Delaware corporation having a place of business at 200 East First Street, Suite 300 Winston-Salem, NC 27101-4165 (USA) (hereinafter referred to as “Targacept”)
and
POLI INDUSTRIA CHIMICA, S.P.A., a corporation organized under the laws of Italy having a place of business at Via Volturno n° 41/49 - 58/64, 20089 Quinto de’ Stampi, Rozzano, Milano (ITALY) (hereinafter referred to as “Poli”)
and
INTERCHEM CORPORATION, a New Jersey corporation having a place of business at 120 Route 17 North, Suite 115 - Paramus NJ 07652 (USA) (hereinafter referred to as “Interchem”)
(Targacept,Poli andInterchem collectively referred to as the “Parties” and each individually as a “Party”).
WHEREAS,
| | • | | Poli has developed know-how to separate, manufacture and analyze substantially pure enantiomers of mecamylamine (the S(+) enantiomer of mecamylamine hereinafter referred to, together with its salts and any hydrates, solvates or crystal forms, as the “API”); |
| | • | | Targacept is interested in (i) contracting withPoli to havePoli conduct all steps and activities necessary to produce theAPI for use in the production of one or more final dosage forms containing or comprising theAPI(each such final dosage form hereinafter referred to as “Product”), such steps and activities to include, without limitation, manufacturing, processing, packaging, labeling, holding, storing, quality control testing, stability testing, releasing and shipping of theAPI and the documenting thereof (hereinafter referred to collectively as “Manufacturing” or, as the context requires, “Manufacture”), and to determine and perform all process development, analytical, validation, regulatory and other activities related to theManufacture of theAPI that are necessary or advisable to be completed and documented in order to obtain approval from all applicableHealth Authorities (as defined in Section 1.3) to market and sellProduct worldwide (all of the foregoing, together with the production and supply of theAPI ordered byTargacept hereunder, hereinafter referred to collectively as the “Poli Activities”), and (ii) purchasing theAPI fromPoli for the manufacturing and marketing ofProduct; |
| | • | | Interchem shall act asPoli’s agent for thePoli Activities; and |
| | • | | subject to the terms and conditions set forth herein, theParties are interested in establishing a long-term relationship concerning the supply of theAPI forProduct to be sold worldwide. |
NOW, THEREFORE,theParties have discussed and agreed upon this Amended and Restated Supply Agreement (hereinafter referred to as this “Agreement”) on the terms and conditions as set out below.
| 1. | POLI ACTIVITIES: PROJECT MANAGEMENT; STEERING COMMITTEE |
| | 1.1 | Poli hereby agrees to perform thePoli Activitiesfor the compensation and otherwise in accordance with the terms and conditions set forth herein. |
| | 1.2 | Each ofPoli, Interchem andTargacept shall appoint a representative having primary responsibility for interactions with the others (each a “Project Manager”).Targacept’s ******** shall be ********,Poli’s ******** shall be ******** andInterchem’s ******** shall be ********. Each ofPoli, Interchem andTargacept may replace itsProject Manager with anotherProject Manager with at least comparable expertise and authority upon written notice to the otherParties. TheProject Managers shall meet (in person or by phone) at least quarterly.Poli’s Project Manager shall keepTargacept’s Project Manager regularly informed as to the status of thePoli Activities. |
| | 1.3 | A Steering Committee, consisting of at least one (1) senior management representative fromPoli, one (1) senior management representative fromInterchem and two (2) senior management representatives fromTargacept, shall meet periodically during theTerm (as defined in Section 9.1(a), but at least annually. The******** of the******** shall be********,********,******** and********, each of whom shall be subject to replacement by the applicableParty from time to time during theTerm by written notice to the otherParties. The Steering Committee shall: (i) oversee the achievement of the objectives of thisAgreement; (ii) review thePoli Activities performed and planned to be performed (including, without limitation,API supplied and to be supplied under thisAgreement andPoli’s production capacity); (iii) review requests by anyHealth Authority, or anyParty, to make changes in or additions to thePoli Activities; (iv) review any adverse regulatory matters that may affect thisAgreement, thePoli Activities orAPI; and (v) review and work diligently to resolve all matters not satisfactorily addressed by theProject Managers (it being understood with respect to this clause (v) that, if and to the extent reasonable and appropriate under the circumstances,Targacept will use commercially reasonable efforts to cause any third party engaged byTargacept to manufactureProduct to participate in the discussion of any such matter that specifically involves such third party). Polishall implement such changes as may be agreed upon by a majority of the members of the Steering Committee. |
As used in thisAgreement, “Health Authority” means any of the U.S. Food and Drug Administration or any successor agency having substantially the same functions (hereinafter referred to as the “FDA”), an analogous governmental or regulatory authority outside of the United States (including, without limitation, the European Medicines Agency or any successor agency having substantially the same functions (hereinafter referred to as the “EMEA”)), or other national, international, supra-national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity with authority over the distribution, importation, exportation, manufacture, use, administration, marketing or sale of pharmaceutical or medicinal products or health, safety or environmental matters.
| | 1.4 | Poli andInterchem shall informTargacept promptly of any events that could reasonably be expected to affect the ability ofPoli to timely and fully perform anyPoli Activities or otherwise affect any established schedule or budget, including any unexpected adverse final or interim results or data from validation, stability or other studies. |
| | 1.5 | Without limiting the generality of any other provision hereof,Poli shall: (i) determine those process development, analytical, validation, regulatory (e.g., submissions ofDMFs or updates thereto) and other activities related to theManufacture of theAPI that are necessary or advisable to be completed and documented in order to obtain approval from all applicableHealth Authorities to market and sellProduct worldwide; (ii) consult withTargacept with respect to the identification and performance of such activities in furtherance of their full completion and documentation prior to********; and (iii) complete and document all such activities in full prior to********. |
| 2. | REQUIREMENTS AND EXCLUSIVITY; MANUFACTURE OF API |
| | 2.1 | TheParties expressly agree that as long as thisAgreement is in force: |
(i) subject to Section 3.2(e),Targacept shall purchase theAPI thatTargacept requires exclusively fromPolithroughInterchem(hereinafter referred to as the “Targacept Exclusivity Obligation”); provided that, for clarity, theTargacept Exclusivity Obligation shall terminate and be of no force or effect (A) as provided in Sections 3.2(c), 5.3(b), 8.2 and 9.1(d), (B) as of the end of theTermand (C) ifPoli or Interchemfiles a petition in bankruptcy, or enters into an agreement with its creditors, or applies for or consents to the appointment of a receiver or trustee, or makes as assignment for the benefit of creditors, or becomes subject to an involuntary proceeding under any bankruptcy or insolvency law that remains undismissed or unstayed for at least******** days;
(ii)Poli shall produce (A) in accordance with the terms of thisAgreementa sufficient quantity of theAPI to fulfill, and shall fulfill, allTargacept orders forAPI placed hereunder (subject to Section 3.2(d) and subject to the last paragraph of this Section 2.1) and (B) API for use in research, development, commercialization or other exploitation as a pharmaceutical exclusively forTargacept and, for clarity, not for any party other thanTargacept; and
(iii) allAPI supplied byPoli toTargacept or its designee hereunder shall be provided from theInventory (as defined in Section 3.3(a)), beginning when theInventory first becomes required hereunder, and in any case on a “first-in, first-out” basis with the objective of maximizing the shelf life of all suchAPIsupplied toTargacept or its designee.
Notwithstanding clause (ii) above, with respect solely to (1) theSemester that begins July 1, 2010 and (2) the firstSemester that begins after theProduct Launch Date, if theOrder provided byTargacept with respect specifically to suchSemester, if any, is more than 150% of theForecast most recently provided byTargacept with respect specifically to suchSemester, if any, then Poli’s obligation with respect to suchOrder shall be to (x) fulfill suchOrder to the extent of 150% of suchForecast within the timeframe called for by thisAgreement, (y) use its best efforts to fulfill the remaining portion of such Order in excess 150% of suchForecast within the timeframe called for by thisAgreement and (z) to the extent that, notwithstanding its best efforts,Poli is unable to fulfill the remaining portion of such Order in excess 150% of suchForecast within the timeframe called for by thisAgreement, to fulfill such remaining portion as soon as possible. As used in this paragraph, the termsOrder,Forecast andSemester are as defined in Section 3.1(a) and the termProduct Launch Date is as defined in Section 9.1(a).
| | 2.2 | Poli shall: (i) conduct all of thePoli Activities at its facility located at its address set forth on the first page of thisAgreement (hereinafter referred to as the “Facility”), unlessTargacept shall have provided prior written consent otherwise; and (ii) maintain theFacility in a state of repair and operating condition and efficiency consistent with the requirements ofcGMP (as defined in Section 5.1(a)(ii)) and all otherApplicable Regulation (as defined in Section 4.2) |
In addition,Polishall not******** prior to having (A) provided toTargacept at least******** months (or******** asPoliandTargacept expressly agree in writing) prior written notice (hereinafter referred to as a******** subject to the proviso below, and (B) obtained all********if any, for such******** from all applicable******** provided that, if such********: (1) is a********,Poli shall (x) not be required to provide a******** prior to making the applicable******** if such******** is made in accordance with******** and, to the extent consistent with********, a********and******** in effect at the time of such******** and (y) provide the********upon the******** and (2) is or may be a********or a********with respect to********,Poli shall not make such******** (x) ********such********is necessary to comply with******** or such********is******** to comply with******** but******** and (y) if such******** is******** by clause (x) above, untilPoli******** (or, if applicable, any********or******** of********) that it has made or amended all********, obtained all********or******** from all******** and******** all aspects of the******** and all aspects of the******** or********of********, in each case that it undertakes to make, amend, obtain or validate as a result of such change.
As used in thisAgreement, the terms******** have the meanings given to them in********.
| | 2.3 | Poli shall not use in the conduct of thePoli Activities any equipment that has been used in connection with the manufacturing, processing, formulating, packaging, labeling, holding, storing and testing or release of any product made from animal-derived materials, genetically-modified organism, cytotoxic material, penicillin or penicillin-related compound, herbicide or pesticide. |
| | 2.4 | Poli accepts responsibility for its safe performance of thePoli Activities and specifically acknowledges that thePoli Activities may be dangerous if performed improperly.Poli shall immediately notifyTargacept of any unusual health or environmental occurrence relating to theAPI or theManufacture thereof. |
| 3. | FORECASTS, ORDERS, INVENTORY |
| | 3.1 | (a) At least********days prior to each calendar semester (i.e., January-June and July-December) (hereinafter referred to as a “Semester”), beginning with theSemester that begins July 1, 2010,Targacept shall providePolithroughInterchem with (i) an order forTargacept’s actual requirements of theAPIfor suchSemester, which shall be binding (hereinafter referred to as an “Order”), and (ii) forecasts ofTargacept’s best estimate of its requirements forAPI for the following********Semesters******** (the forecast for each suchSemesterhereinafter referred to as a “Forecast”), which shall be non-binding and shall be used for general planning purposes only. If, notwithstanding the foregoing,Targacept does not provide aForecast for any one or more of the******** or the******** or the******** or the******** succeeding six-month period, , thenTargacept shall be deemed to have provided aForecast that it will not have any requirements forAPI for such period(s), but only ifPoli orInterchem shall have notifiedTargacept in writing that suchForecast has not been received andTargacept shall not have provided aForecast for such period(s) toPoli within********business days of its receipt of such notice. For clarity, neitherPolinor Interchem shall be required to provide such written notice. |
(b)Interchemshall confirm receipt of eachOrder by written notice toTargaceptwithin five (5) business days after receipt thereof.Poli shall be obligated to supply and deliver the quantity of theAPI specified in suchOrder in accordance with the delivery schedule set forth in suchOrder, except that, if any required date of delivery specified in anyOrder is less than******** days from the date of suchOrder,Poli’s obligation with respect to such required date of delivery shall instead be to use its best efforts in good faith to supply and deliver on such specified delivery date the quantity of theAPI specified for delivery on such date in suchOrder. Any particularOrder may be amended or cancelled only with the written consent ofTargacept andPoli.
| | 3.2 | (a) In the event thatPoli, at any time during theTerm, shall have reason to believe that it will be unable timely to supplyTargacept with the full quantity of theAPI subject to anyOrder (or anyForecast as if it were anOrder),Poli shall promptly notifyTargacept in writing; provided that, for clarity but without limiting the generality of the foregoing, Section 3.2(d) (and, if applicable, Section 3.2(e)) shall apply where such quantity exceedsPoli’s manufacturing capacity. For clarity, compliance byPoli with this Section 3.2(a) shall not relievePoli of any other obligation or liability under thisAgreement. |
(b) Except where the required date of delivery specified in anyOrder is less than******** days from the date of suchOrder and except as provided in Section 8.1, ifPoli shall fail to supply the full quantity of theAPI that is specified in anOrder for delivery on a specified date within******** days after such specified delivery date, then, atTargacept’s sole discretion,Poli shall either (i) be relieved of any obligation to deliver the undelivered quantity of theAPI called for by suchOrder or (ii) deliver the undelivered quantity of the API called for by suchOrder within******** days from the dateTargacept notifiesPoli of such election. IfTargacept elects to havePoli supply the remaining quantity of theAPI called for by suchOrder, thenPoli agrees thatTargacept shall be entitled to a price reduction for the next amounts payable byTargacept hereunder in an amount equal to********% of the full invoice amount (excluding any applicable value added tax (VAT) and other taxes, duties, charges and levies) that would have been payable with respect to such delayed supply of theAPI had suchAPI been delivered on a timely basis for each week of delay (measured from the earliest date of delivery specified in suchOrder(but in no case less than******** days from the date of suchOrder) with respect to the delayed supply of theAPI to the actual date of delivery of all of the delayed supply).
(c) In addition to, and not in limitation of, Section 3.2(b), ifPoli shall fail to supply at least (x) ********% of the quantity of theAPI specified in anOrder(s) for delivery on a specified delivery date that is at least******** days from the date of suchOrderwithin******** days after such specified delivery date for******** consecutive specified delivery dates or (y) ********% of the quantity of theAPI specified in anOrder(s) for delivery on a specified delivery date that is at least********days from the date of suchOrderfor******** consecutive specified delivery dates, for any reason (including, without limitation, an event offorce majeure), then, upon written notice fromTargacepttoPoli,(i) the Targacept Exclusivity Obligation shall terminate and be of no force or effect and (ii) Targacept shall have the right to designate the foregoing as a********.
(d) IfPoli is not capable ofManufacturing sufficient quantities ofAPI to fulfill anyOrder (or anyForecast as if it were anOrder) because of limits ofPoli’s manufacturing capacity, thenPoli shall provide written notice to such effect toTargacept within********business days of the date of theOrder (orForecast) and shall include in such notice a representation as to the maximum quantity ofAPI that it is capable of supplying toTargacept thereafter. For purposes of thisAgreement, the “Poli Maximum” shall be equal to (i) such maximum quantity thatPoli has represented that it is capable of supplying or, if less, the maximum quantity ofAPI thatTargacept, acting in good faith and after making reasonable inquiry of and consulting withPoli, believes thatPoli is capable of supplying toTargacept at any particular time or (ii) solely if applicable, such other maximum quantity ofAPI thatTargacept, Poli andInterchem may expressly agree to in a writing that references this Section 3.2(d).
(e) Notwithstanding theTargacept Exclusivity Obligation, upon written notice fromTargacept toPoli andInterchem,Targaceptshall be expressly permitted to purchase from any third party any quantity ofAPI above thePoli Maximum (as suchPoli Maximum exists at the time of such notice) and the giving of such notice byTargaceptshall constitute a********; provided that: (i) Targacept agrees that the******** (ii) nothing in clause (i) is intended to affect or limit any ofTargacept’s rights under thisAgreement or to give rise to any commitment or obligation ofTargacept, financial or otherwise, not expressly set forth in this Section 3.2(e); (iii) without limiting the generality of clause (ii),Poli acknowledges that******** (iv) Targacept’s rights under this Section 3.2(e) shall continue unaffected whether or not, after the exercise of such rights,******** and (v) for clarity, it is intended by this Section 3.2(e) thatPoli shall continue asTargacept’s supplier for its requirements ofAPI during theTerm for quantities up to thePoli Maximum.
| | 3.3 | (a) Beginning with submission byTargacept of the firstDrug Approval Application,Poli shall: (i) keep a level of inventory of theAPI (hereinafter referred to as the “Inventory”) in an amount at all times at least equal to (A) ******** times the average of the******** specified inTargacept’s most recent******** for the********Semesters and******** most recent******** or (B) such******** amount asTargacept may require by notice toPoli in writing (provided thatPoli shall, upon request fromTargacept, consider in good faith and not unreasonably reject any request byTargacept forPoli to maintain a largerInventory); provided thatPolishall not be deemed in breach of this clause (i) where its failure to meet its obligation in this clause (i) results solely from the failure ofAPI Manufactured byPoli to conform to the warranties set forth in Section 5.1(a) and only for so long asPoli is diligently working to provide replacementAPI pursuant to Section 5.3(a); (ii) maintain the Inventory in accordance withcGMP and in a location that is both separate from theFacility and approved byTargacept, such approval not to be unreasonably withheld; and (iii) provide a current written report toTargacept andInterchem specifying the amount of theInventory and the respective manufacturing dates and expiration dates for theBatches comprising theInventory with the delivery of theAPI for eachOrder. |
As used in this Agreement, “Drug Approval Application” means an application to the applicableHealth Authority(ies) in any country or region in the world to market and sell aProduct in such country or region (including, without limitation, a new drug application or supplemental new drug application in the United States or the counterpart to a new drug application or supplemental new drug application for any country or region outside of the United States).
(b) In any case, theInventory is dedicated forTargacept. Therefore, if any over-stock occurs,Targacept shall place anOrder within theTerm for the remainingInventory regardless of the period that remains until expiration of suchInventory, such obligation ofTargacept not to exceed amount required to be maintained pursuant to Section 3.3(a). For clarity,Targacept shall not be entitled under thisAgreement to reject anyAPI purchased fromInventory solely on the basis that suchAPI does not comply with the expiration dating required by Section 5.1(a)(ii) if suchAPI complied with such expiration dating at the time it first becameInventory.
(c)Poli shall have title to and responsibility for, and bear risk of loss, contamination and damage to, allInventory until subject to anOrderand received byTargacept or its designee; provided that, notwithstanding the foregoing,Poli shall have no responsibility for the expiration of anyAPI that complied with all representations and warranties set forth in this Agreement at the time it first becameInventory.
| | 3.4 | Should Targacept have special requirements or scheduling needs, the Parties shall cooperate to the maximum extent and use their best efforts in order to accomplish such requirements or scheduling. |
| 4. | SHIPMENT, PRICING AND PAYMENT |
| | 4.1 | It shall beTargacept’s responsibility to comply with all legal requirements in order to import theAPI, except that, ifAPI is to be imported into the United States, it shall beInterchem’s responsibility to comply with all legal requirements in order to import theAPI.Interchem undertakes to obtain and keep valid at its cost all approvals, permissions and licenses required in order to enable the import theAPI into the United States. |
| | 4.2 | It shall bePoli’s responsibility to comply with all laws and all rules, regulations, directives and guidance documents of the FDA and other competentHealth Authorities(i) applicable to theManufacture of theAPI and export of theAPI from Italy for use in clinical trials or for commercial sale in the United States and any other country or (ii) that create or relate to applicable environmental or safety standards or labor practices (hereinafter referred to collectively as “Applicable Regulation”).Poli undertakes to obtain and keep valid at its cost all approvals, permissions, permits and licenses required in order to conduct thePoli Activities. |
For clarity,Applicable Regulation includes, without limitation, the U.S. Federal Food Drug and Cosmetic Act, as amended (hereinafter referred to as the “FFDCA”), Title 21, Parts 210 and 211 of the U.S. Code of Federal Regulations (hereinafter referred to as “CFR”), FDA Guidance for Industry Q7A (Good Manufacturing Practice Guidance for Active Pharmaceutical Ingredients), European Commission Directive 2003/94/EC, Volume 4 of The Rules Governing Medicinal Products in the European Union (EU), EC Guide to Good Manufacturing Practice for Pharmaceutical Products, EU Guidelines to Good Manufacturing Practice (GMP) and REACH regulations of December 18, 2006 (Regulation (EC) No. 1907/2006), in each case as may be amended from time to time. In the case of any conflict between the requirements ofApplicable Regulation in a particular context, theApplicable Regulation with the most stringent requirement shall be operative.
| | 4.3 | Shipment, price and payment terms and conditions are stated inAnnex B attached hereto and incorporated by reference herein. Changes, if any, shall be agreed upon in writing and executed by theParties. |
Without limiting the generality of any other provision hereof,Poli shall ship allAPI toTargacept or its designee in accordance with allApplicable Regulation (including, without limitation, 21 U.S.CFR 312.110) and, in addition and without limitation, industry standards for shipment of active pharmaceutical ingredients manufactured undercGMP (including, without limitation, under conditions that protect theAPI from contamination or temperature or humidity detrimental to theAPI).
| 5. | WARRANTIES, QUALITY SPECIFICATIONS AND ACCEPTANCE/REJECTION |
| | 5.1 | (a)Poli expressly represents, warrants and covenants that: |
(i) at the time of delivery of each shipment of theAPI toTargacept or its designee,Poli shall have good title to, and the lawful right to sell, suchAPI toTargacept;
(ii) theAPI supplied byPolitoTargacept or its designee: (A) shall be free and clear of all liens, encumbrances or other claims of any kind of any third party; (B) shall conform to and be in accordance with the technical specifications designated for the characteristics, quality, purity and testing procedures for theAPI(including, without limitation, for the raw materials used in theManufacture of theAPI) set forth inAnnex A attached hereto and incorporated by reference herein, as may be amended or supplemented from time to time in accordance with Section 5.1(b)(ii) (hereinafter referred to as the “Specifications”); (C) shall have beenManufactured in accordance with theCMC Data and current good manufacturing practices applicable to the manufacture of active pharmaceutical ingredients pursuant toApplicable Regulation (hereinafter referred to as “cGMP”) and otherwise with allApplicable Regulation, all applicableRegistrations and thisAgreement; (D) shall not be adulterated or misbranded within the meaning ofApplicable Regulation (including, without limitation, theFFDCA) and the European Commission Directive 2003/94/EC); (E) may lawfully be introduced into interstate commerce pursuant to the FFDCA; and (F) from and after August 1, 2012, have expiration dating of not less than five (5) years after the date of manufacture thereof; and
(iii) theManufacturing Process (as defined in Section 5.1(c)) does not infringe or misappropriate, and will not infringe or misappropriate, the intellectual property or other proprietary rights of any third party.
(b)Poli expressly agrees that:
(i)Poli shall not make******** to the******** prior to having (A) provided toTargacept at least******** months (or******** asPoli andTargacept******** (hereinafter referred to as a********), subject to the proviso below, and (B) obtained all******** if any, for******** from all applicable******** provided that, if such********: (1) is a********,Poli shall (x) ******** to provide a******** if such******** is made in accordance with******** and, to the extent consistent with********, a******** and (y) provide the********upon the********and (2) is or may be a******** with respect to********,Poli******** (x) unless either such********to comply with********or such********is******** to comply with******** but******** months after it receives the********and (y) if such******** by clause (x) above, untilPoli receives******** (or, if applicable, any******** that it has******** all******** obtained all******** from all******** all******** of the********and all aspects of the******** or********of******** in each case that it undertakes to******** as a result of such********.
(ii)Poli shall (1) not make any******** to the********or to the******** without the******** not to be unreasonably withheld, and (2) make anychanges to the******** required byTargacept for the purpose of complying with******** from time to time in effect in********. In the event of********to the******** shall******** in order to evaluate whether an******** to any of the******** if any, is required andPolishall make each such********.
(iii)Poli shall******** toInterchem and toTargacept or itsdesigneea******** and shall not******** that******** set forth in Section 5.1(a). With respect to any******** the issuance of a********byPoli shall be deemed a******** that such******** conforms to the warranties set forth in Section 5.1(a).
(c) As used in thisAgreement:
(i) “Registrations” means, with respect to any country, any and all technical, medical and scientific licenses, registrations, authorizations and approvals of aProduct (including, without limitation, manufacturing approvals and authorizations, marketing authorizations, and pricing, third party reimbursement and labeling approvals related thereto) that are required by anyHealth Authority for the manufacture, distribution, use, importation, marketing or sale of suchProduct in such country, as may be amended or supplemented from time to time. For clarity but without limitation, the grant or approval of aDrug Approval Application is aRegistration.
(ii) “Manufacturing Process” means, subject to Section 5.1(b)(i), (A) from theEffective Date until theFirst Approval Date, the processes (or steps thereof) and procedures for theManufacture of theAPI, as set forth in or referenced by (including, without limitation, by reference to aDMF) theExisting IND (or, if applicable, an investigational new drug application or analogous foreign filing filed byTargacept or a licensee, collaborator or contractor ofTargacept after theEffective Date), and (B) from and after theFirst Approval Date, the processes (or steps thereof) and procedures for theManufacture of theAPI set forth in or referenced by (including, without limitation, by reference to aDMF) theDrug Approval Application granted or approved as of suchFirst Approval Date.
(iii) “First Approval Date” means the date of grant or approval of the firstDrug Approval Application in either the United States or any country or region in Europe.
(iv) “Existing IND” means U.S. investigational new drug application No.********, as may be amended or supplemented from time to time.
(v) “Batch” means a specific quantity of theAPI that is intended to be of uniform character and quality and is produced during the same cycle of manufacture.
(vi) “CMC Data means, subject to Section 5.1(b)(ii), (A) from theEffective Date until theFirst Approval Date, the chemistry, manufacturing and controls data for theAPI set forth in or referenced by (including, without limitation, by reference to aDMF) theExisting IND (or, if applicable, the latest investigational new drug application orDrug Approval Application filed after theEffective Date, as may be amended or supplemented from time to time) and (B) from and after theFirst Approval Date, the chemistry, manufacturing and controls data for theAPI set forth in or referenced by (including, without limitation, by reference to aDMF) theDrug Approval Application granted or approved as of suchFirst Approval Date.
(vii) “Certificate of Analysis” means a document signed by an authorized representative of thePoli business unit that conducted the testing described hereinafter and an authorized representative ofPoli’s quality unit that describes theSpecifications for, shelf life of, testing methods applied to and results of such testing of a particularBatch and meetsTargacept’s purchasing specifications.
| | 5.2 | (a)Targacept expressly agrees that: |
(i) within********days of delivery, it shall or shall cause its designee to (i) analyze theAPI and (ii) in the event thatTargacept or its designee determines that suchAPI does not conform to itsSpecifications (or does not comply with any other warranty set forth in Section 5.1(a)), notify in writingPoli andInterchemof its rejection (hereinafter referred to as a “Non-Compliance”) and the basis therefor;
(ii) ifTargacept does not notifyPoliandInterchem within the******** period specified above, theAPI shall be considered finally accepted byTargacept; provided thatTargacept’s acceptance or rejection of, or failure to reject, anyBatch shall not prejudice any rights or remedies that may be available toTargacept hereunder, at law or in equity arising due to a breach byPoli of its warranties set forth in Section 5.1(a) or any other provision of thisAgreement with respect to suchBatch or otherwise; and
(iii)Targacept will not incorporate anyBatch that has not been analyzed byTargacept or its designee as provided in Section 5.2(a)(i) in the manufacture ofProduct.
(b) In the event that the basis for aNon-Compliance is a failure to conform withSpecifications, Poli shall promptly undertake appropriate testing of a sample retained from the rejectedBatch and notifyTargacept whether it has confirmed theNon-Compliance. ShouldPoli conduct such testing andPoli andTargacept be unable thereafter to agree that aNon-Compliance has occurred within********days of the notice fromTargacept pursuant to Section 5.2(a)(i), the matter will be referred to an independent external laboratory mutually acceptable toTargacept andPoli for testing. The conclusions of such laboratory as to whether or not aNon-Compliance shall have occurred, shall be final and binding and the cost of such laboratory (including, if applicable, reasonable, customary and documented out-of-pocket analytical transfer costs), shall be charged to theParty against which the laboratory concludes (Targacept orPoli).Poli andTargacept shall provide such laboratory with samples/counter-samples of theAPI, certificates of analysis, stability studies/data and any further documentation as may be in its possession or control and relevant to the laboratory’s assessment, and the laboratory shall be directed to render its conclusions as soon as possible and in any event within******** days after its receipt of the foregoing.
| | 5.3 | (a) If anyAPI delivered toTargacept or its designee pursuant to thisAgreement does not conform to the warranties set forth in Section 5.1(a) (for any reason, including, without limitation, an event offorce majeure), thenPoli shall reimburse within******** business days or, if not actually paid byTargacept, creditTargacept with all costs thatTargacept incurs with respect to such non-conformingAPI (including, without limitation, all amounts paid toPoli with respect to suchAPI pursuant to Section 4.3, if any, any and all transportation and holding charges incurred byTargacept in connection with suchAPI and the cost of destruction of suchAPI). In addition, atTargacept’s sole discretion,Poli shall either (i) be relieved of any obligation to deliverAPI in replacement of such non-conforming API or (ii) replace the non-conformingAPI with replacementAPI that conforms to the warranties set forth in Section 5.1(a) and deliver such replacementAPI by an agreed upon date not to exceed******** days after the date for delivery specified in the applicableOrder. If and to the extent a reprocess procedure is included in theU.S. DMF (as defined in Section 11.1(a)) or otherwise in aRegistration,Poli may reprocess the non-conformingAPI to bring it into compliance. IfTargacept elects to havePoli replace the rejectedAPI,Poli agrees thatTargacept shall be entitled to a price reduction for the next amounts payable byTargacept hereunder in an amount equal to********% of the full invoice amount (excluding any applicable value added tax (VAT) and other taxes, duties, charges and levies) that would have been payable with respect to such non-conformingAPI had suchAPI been conforming for each week of delay in delivering conforming API (measured from the earliest date of delivery specified in the applicableOrder with respect to the non-conformingAPI to the actual date of delivery of all replacement conformingAPI). |
(b) In addition to, and not in limitation of, Section 5.3(a), if the quantity of theAPI supplied byPoli on a specified delivery date that conforms to the warranties in Section 5.1(a) is ******** then, upon written notice fromTargacept toPoli andInterchem,(i) ********.
It is understood and agreed that, in the event of******** or******** ofAPI (rather than********) Sections 3.2(b) and 3.2(c) and not Sections 5.3(a) and 5.3(b) shall apply.
| | 5.4 | EachParty represents and warrants that (i) it is in existence and in good standing under the laws of its state (or country) of incorporation on theEffective Date, (ii) it has full corporate power to enter into and perform all of its obligations under thisAgreement and (iii) its execution, delivery and performance of thisAgreement have been duly authorized by all necessary corporate action. In addition,Poli represents and warrants that (A) there is no claim, suit, proceeding, or investigation pending or, to its knowledge, threatened againstPoli or any affiliate thereof that might prevent or interfere with its performance of thisAgreement and (B) as of theEffective Date, it has submitted theU.S. DMF (as defined in Section 11.1(a)) to theFDA and suchU.S. DMF is correct and complete. |
| 6. | INDEMNITIES, INSURANCE AND WAIVER |
| | 6.1. | Each of the Parties (each hereinafter referred to as an “Indemnifying Party”) shall indemnify, defend and hold the otherParties, their respective affiliates and all of their respective directors, officers, employees, agents and representatives (hereinafter referred to collectively as “Targacept Indemnitees,” “Poli Indemnitees” or “Interchem Indemnitees,” as the case may be, and all together, as the “Indemnitees”) harmless from and against any and all claims, suits, actions, demands, investigations and proceedings brought or instituted against any one or moreIndemniteesby any third party (each such claim, suit, action, demand, investigation or proceeding hereinafter referred to as a “Claim”), and any and all damages, out-of-pocket losses, liabilities, costs and expenses, including reasonable attorneys’ fees (collectively, “Losses”), arising out or resulting from (i) the breach by suchIndemnifying Party of any of its obligations, representations or warranties under thisAgreement, (ii) the willful misconduct, errors or omissions of suchIndemnifying Party in the performance of thisAgreement, or (iii) wherePoli is theIndemnifying Party, any defect in theAPI Manufactured hereunder or its infringement of any process or technical data of a patent or other proprietary rights of any third party, except in each case (clauses (i), (ii) and (iii)) to the extent suchLosses are caused by the gross negligence or willful misconduct of, or breach of thisAgreement by,Targacept (wherePoli orInterchem is theIndemnifying Party) or eitherPoliorInterchem (whereTargacept is theIndemnifying Party). |
| | 6.2 | AnyIndemnitee seeking to enforce Section 6.1, shall: |
(i) promptly (but in any event within******** days) following receipt of written notice of the applicableClaim, notify theIndemnifying Party in writing of suchClaim, specifying in a degree of detail reasonable under the circumstances the nature of suchClaim and the amount of liability estimated to arise therefrom; provided that: (A) the failure to provide timely notice shall not affect the rights of theIndemnitee if (1) such notice is provided and (2) the failure for such notice to be timely does not materially prejudice the ability of theIndemnifying Party to defend or settle suchClaim; and (B) it is understood and agreed that notice provided byTargacept shall be deemed provided by allTargacept Indemnitees, notice provided byPoli shall be deemed provided by allPoli Indemnitees and notice provided byInterchem shall be deemed provided by allInterchem Indemnitees;
(ii) provide to theIndemnifying Party as promptly as practicable all information and documentation reasonably requested by theIndemnifying Party to verify the claim asserted hereunder and shall otherwise cooperate fully with theIndemnifying Party in all respects in the investigation and defense of suchClaim; and
(iii) permit theIndemnifying Partyto assume the defense of theClaim (and the prosecution of allClaims available against third parties and the right to compromise or settle, subject to Section 6.3), including the employment of counsel or accountants of theIndemnifying Party’s choice and at its cost and expense; provided that theIndemnitee shall (A) use commercially reasonable efforts (but specifically excluding settlement) to protect against further liability with respect to theClaim and (B) have the right to employ counsel separate from counsel employed by theIndemnifying Party and to participate therein, but the fees and expenses of such counsel shall be at theIndemnitee’s own expense.
| | 6.3 | Targacept shall not settle or compromise anyClaim in a manner that imposes any restrictions or obligations on, or admits fault of,Poli orInterchem without the prior written consent ofPoli orInterchem, as the case may be, and neitherPolinorInterchem shall settle or compromise anyClaim in a manner that (i) imposes any restrictions or obligations on, or admits fault of,Targacept or (ii) impairs or would reasonably be expected to impairTargacept’s ability or right to manufacture, market or sellAPI or anyProduct orPoli’s ability, right or obligation to perform its obligations hereunder, in each case withoutTargacept’s prior written consent. NoIndemnifying Party shall have any obligations hereunder with respect to anyClaim compromised or settled without its prior written consent. |
| | 6.4 | NOTWITHSTANDING ANYTHING IN THISAGREEMENT TO THE CONTRARY (BUT WITHOUT AFFECTING THEPARTIES’ RIGHTS AND OBLIGATIONS UNDER SECTION 6.1), IN NO EVENT SHALL ANYPARTY BE LIABLE TO ANY OTHER PARTY FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR INDIRECT DAMAGES, INCLUDING WITHOUT LIMITATION DAMAGES BASED ON LOST REVENUES OR LOST PROFITS, ARISING IN ANY WAY OUT OF THISAGREEMENT, HOWEVER CAUSED AND WHETHER UNDER ANY CONTRACT, WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY, EVEN IF SUCHPARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. |
| | 6.5 | Each of thePartieswill obtain and keep in full force during theTerm and for******** years thereafter insurance policies from reputable insurance companies recognized in both the United States and Europe. Such insurance shall provide suchPartywith insurance cover for its performance of thisAgreement(including, without limitation, its indemnification and related obligations and, in the case ofPoli, risk of loss, contamination and damage to theInventory) of the types and not less than the levels of insurance coverage customarily maintained by companies in the pharmaceutical industry engaged in comparable activities. EachPartywill provide the otherPartywith evidence of such insurance upon request.Poli shall also provideTargacept with copies of all insurance policies, endorsements, cover notes and other relevant documentation and information in respect of insurance maintained byPoli in accordance with this Section 6.5 upon request.Poli’s policies of insurance shall (i) be primary to any liability insurance carried byTargacept, which insurance shall be excess and non-contributory for such claims and (ii) be specifically endorsed to listTargacept as an additional insured.Poli shall also maintain workers’ compensation insurance as required by all applicable laws, rules and regulations. At such times asTargacept may reasonably request in writing,Poli shall provideTargacept with certificates of insurance evidencing the insurance coverage required under this Section 6.5, which certificates shall specifically provide for at least thirty (30) days prior notice of cancellation or termination thereof. In no event shall the amounts for which aParty would otherwise be liable be limited to the amounts recoverable through insurance maintained by suchParty. |
| 7. | CONFIDENTIALITY AND PUBLICITY |
| | 7.1 | “Confidential Information” means all confidential or proprietary information that is or has been (i) disclosed byPoliorInterchemtoTargaceptor byTargacepttoPoliorInterchem related to theAPI, Product or theManufacture, development, marketing or sale ofAPIorProduct, including but not limited to any data, specifications, formula, methods, technologies, strategies, forecasts, plans, suppliers and business of the disclosingParty, and (ii) marked or otherwise identified in writing or other tangible form at the time of disclosure as “Confidential” or, if disclosed orally, reduced to a writing or other tangible form that is marked “Confidential” and delivered to theRecipient within******** days after such first disclosure. Each disclosingParty (i) shall retain all of its right, title and interest in and to itsConfidential Informationand all patents, patent applications, copyrights and other intellectual property rights arising, created or obtained in connection therewith and (ii) represents that it has the right to disclose allConfidential Information that it discloses hereunder without any obligation to any third party. |
| | 7.2 | Except as provided in Section 7.3, theParty receiving theConfidential Information from a disclosingParty (hereinafter referred to as “Recipient”) shall use commercially reasonable efforts to maintain in confidence suchConfidential Information and shall not disclose it to any third party without prior written approval by the disclosingParty. |
| | 7.3 | Recipient’s obligations of confidentiality and non-use under Section 7.2 shall not apply to: |
(i) information which at the time of disclosure is publicly available or after disclosure becomes publicly available, except as a result of any act or omission byRecipient;
(ii) information whichRecipient can establish by competent proof that was lawfully in its possession at the time of disclosure by the disclosingParty (or thereafter is lawfully received) and was not acquired, directly or indirectly, under a confidentiality obligation; or
(iii) the disclosure of information to the extent required to be disclosed pursuant to subpoena or order by any competent court, or requested by any governmental or regulatory agency or authority (including, without limitation, anyHealth Authority), asserting jurisdiction overRecipient; provided thatRecipient shall give the disclosingParty prompt written notice and, to the extent practicable under the circumstances, a reasonable opportunity to object to or pursue confidential treatment for such disclosure.
In addition, and notwithstanding anything herein to the contrary: (A) Targacept shall be expressly permitted to disclose the terms of thisAgreement in, and to file thisAgreement as an exhibit to, any filing with the U.S. Securities and Exchange Commission thatTargacept determines in its sole discretion requires such disclosure or exhibit; (B) eachRecipient may disclose a disclosingParty’sConfidential Information solely: (1) on a need-to-know basis to suchRecipient’s legal and financial advisors; (2) as reasonably necessary in connection with an actual or potential (x) license (or sublicense) of intellectual property rights of suchRecipient or permitted assignment of thisAgreement, (y) debt or equity financing of suchRecipient or (z) Change of Control involving suchRecipient; provided that, with respect to any such disclosure pursuant to this clause (2), the third-party recipient of suchConfidential Information of the disclosingParty is subject to a written agreement that requires such third-party recipient to maintain the confidentiality of suchConfidential Information with terms at least substantially as restrictive as Sections 7.2 and 7.3; or (3) as reasonably necessary to file, prosecute or maintainPatent Rights or to file, pursue or defend litigation related toPatent Rights; and (C) Targacept may disclose a disclosingParty’s Confidential Informationthat relates to theAPI or theManufacture or characterization thereof or that is relevant to submissions to theFDA or otherHealth Authorityto a third party recipient or proposed recipient of aTechnology Transfer (as defined in Section 10.2(a)).
As used in thisAgreement:
(aa) “Change of Control” means, with respect to anyParty, (1) a merger, consolidation, acquisition, share exchange or other similar transaction involving suchParty and any third party which results in the holders of the outstanding voting securities of suchParty immediately prior to such merger, consolidation, share exchange or other similar transaction ceasing to hold more than fifty percent (50%) of the combined voting power of the surviving, purchasing or continuing entity immediately after such merger, consolidation, share exchange or other similar transaction, (2) any transaction or series of related transactions in which any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (hereinafter referred to as the “1934 Act”), together with any of such person’s “affiliates” or “associates,” as such terms are used in the1934 Act, becomes the beneficial owner of fifty percent (50%) or more of the combined voting power of the outstanding securities of suchParty or (3) the bona fide sale or other transfer to a third party (other than a third party who or that controls, is controlled by or is under common control with suchParty, where “control” means the power to direct or cause the direction of the management or policies, whether through the ownership of voting securities, by contract or otherwise) of all or substantially all of suchParty’s assets that relate to thisAgreement; and
(bb) “Patent Rights” means (1) issued and unexpired letters patent in any country, including extensions, registrations, confirmations, reissues, supplementary protection certificates and re-examinations thereof, (2) patent applications pending in any country, including all provisional applications, substitutions, continuations, continuations-in-part, divisionals and renewals thereof, and (3) foreign counterparts of any of the foregoing.
| | 7.4 | Recipient shall not use theConfidential Information for any purpose other than the performance of its obligations and exercise of its rights under thisAgreement, without first entering into a specific agreement with the disclosingParty. |
| | 7.5 | Recipient shall restrict access to theConfidential Information received from a disclosingParty to the minimum number of employees necessary for the purposes of performance of its obligations or exercise of its rights under thisAgreement and shall ensure that the persons in question are obligated toRecipient by terms at least substantially as restrictive as those contained in thisAgreement to keep suchConfidential Information confidential. |
| | 7.6 | Recipient’s obligation to confidentiality and non-use under thisAgreement shall survive expiration or early termination of thisAgreement for******** years thereafter. |
| | 7.7 | TheParties agree that monetary damages may or may not be a sufficient remedy for unauthorized disclosure ofConfidential Information and that the disclosingParty may or may not be entitled, without waiving any other rights or remedies, to such injunctive or equitable relief as may be deemed proper by a court having jurisdiction. |
| | 7.8 | Targacept shall not use the name ofPoliorInterchem, and neitherPolinorInterchem shall use the name ofTargacept, without suchParty’s prior written consent; provided that this Section 7.8 shall not restrict a Party from identifying another Party orParties or its or their performance of thisAgreement to anyHealth Authority or as required by applicable law, rule or regulation (including, without limitation, the rules of any securities exchange or quotation system on which aParty’s securities are listed or traded). |
| | 8.1 | (a) Except as otherwise expressly set forth in thisAgreement, any delay in the performance of any of the duties or obligations hereof (except the payment of money) of anyParty shall not be considered a breach of thisAgreement and shall not give rise to any claim for damages, provided that such delay has been caused by or is the result of an act of God or other unforeseeable, extraordinary cause beyond the control and without the fault or negligence of theParty so affected (including but not limited to, acts of war (whether or not war be declared), insurrections, riots, embargoes, shortages of materials, labor disputes such as strikes, lockouts or boycotts, fires, explosions, floods, earthquakes or mudslides). TheParty so affected shall give prompt notice in writing of such event offorce majeure to the otherParties and provide all the particulars thereof and shall take and keep the otherParties informed about whatever reasonable steps are necessary to relieve the effect of such event offorce majeure as rapidly as possible, when the affectedParty reasonably expects to resume performance in whole or in part of its obligations hereunder and when the event offorce majeure has ceased to exist. Failure to give such notice to the otherParties shall cause theParty claiming an event offorce majeure not to be relieved from performing its obligations under thisAgreement. |
(b) AParty affected by an event offorce majeure shall use its best efforts to remedy, remove or mitigate such event and the effects thereof as soon as practicable; provided that, for clarity and without limitation, this Section 8.1(b) shall not require that the affectedParty settle a strike or other labor controversy.
| | 8.2 | If any event of ******** interrupts or otherwise negatively affectsPoli’s ability to produceAPIfor at least ******** days, then, unlessPoli establishes to the reasonable satisfaction ofTargacept, acting in good faith, thatPoli will remain capable of meetingTargacept’srequirements forAPI at all times thereafter without interruption, upon written notice fromTargacept toPoli,(i) ******** and (ii) ********. |
| 9. | TERM AND TERMINATION; NON-RENEWAL FEE; NON-EXCLUSIVITY FEE |
| | 9.1 | (a) ThisAgreement shall commence on theEffective Date and shall (i) remain in force until the fifth (5th) anniversary of theProduct Launch Date (hereinafter referred to as the “Initial Term”), and (ii) thereafter be subject to automatic renewal in two (2) year increments as provided in Section 9.1(b) (each such two-year period hereinafter referred to as a “Renewal Term” and all suchRenewal Terms, if any, together with theInitial Term, hereinafter referred to as the “Term”), in each case (clauses (i) and (ii)) unless earlier terminated in accordance with Section 9.2. |
As used in thisAgreement, “Product Launch Date” means the date of the first occurrence of a sale, transfer or disposition for value byTargacept (or a licensee, collaborator or contractor ofTargacept) of anyProduct for use or consumption in any country or region in the world following the grant or approval of aDrug Approval Application for suchProductin such country or region.Targacept shall use commercially reasonable efforts to notifyPoli andInterchem of theProduct Launch Date.
(b) UnlessPoli orTargacept gives the other written notice of non-renewal of thisAgreement (hereinafter referred to as a “Non-Renewal Notice”) by the date that is******** months prior to the expiration of (i) theInitial Term, theTerm shall be deemed to be automatically extended for one (1) Renewal Term or (ii) if applicable, the then-currentRenewal Term, theTerm shall be deemed to be automatically extended for the nextRenewal Term.
(c) In the event thatTargacept givesPoli (but not, for clarity, ifPoli givesTargacept)aNon-Renewal Notice by the date that is******** months prior to the expiration of theInitial Term or the then-currentRenewal Term, as the case may be,Targacept will pay a “Non-Renewal Fee” toPoli in an amount determined and to be paid as follows. In the eventTargacept givesPoli aNon-Renewal Notice,Poli shall provide a copy of suchNon-Renewal Notice toInterchem.
(i) The amount of theNon-Renewal Fee shall be determined by******** from the******** shown in column D in the table below the sum of (1) ******** pursuant to Section 10.3 and (2) ********pursuant to Section 9.1(d).
| | | | | | |
A | | B | | C | | D |
| | Average quantity (kg/Commercial Supply Year ********) ofAPI subject to non-canceled Orders provided during: | | |
| | | |
Non-renewal upon expiration of: | | Applicable Commercial Supply Years | | Quantity (kg) | | ********
(EURO €) |
| | | |
| the******** | | the last********Commercial Supply Years of theInitial Term (i.e., months ******** through ******** and ******** through ******** that follow the******** | | not more than
******** | | ******** |
| | | between********
and******** | | ******** |
| | | higher than
******** | | ******** |
| | | |
the********, if any | | the******** Commercial Supply Years in the******** Term | | not more than
******** | | ******** |
| | | between********
and******** | | ******** |
| | | higher than
******** | | ******** |
| | | |
the********, if any | | the******** Commercial Supply Years in the******** Term | | not more than
******** | | ******** |
| | | between********
and******** | | ******** |
| | | higher than
******** | | ******** |
| | | |
a********, if any | | the******** Commercial Supply Years in such******** Term | | not more than
******** | | ******** |
| | | between********
and******** | |
| | | higher than
******** | |
(1) As used in thisAgreement,******** means a consecutive******** month period that begins on theProduct Launch Date or an anniversary thereof.
(2) The******** fee shall be********% of the unadjusted fee that would have been payable if non-renewal had instead occurred at the end of the immediately preceding******** Term. As illustrative examples, if non-renewal occurs at the end of the (a) ********Term, if any, the******** fee would be €******** (applicable average quantity not more than********kg), €******** (applicable average quantity between********kg and********kg) or €******** (applicable average quantity higher than********kg), (b) ********Term, if any, the******** fee would be €******** (applicable average quantity not more than********kg), €******** (applicable average quantity between********kg and********kg) or €******** (applicable average quantity higher than********kg) or (c) ******** Term, if any, the********fee would be €******** (applicable average quantity not more than********kg), €******** (applicable average quantity between********kg and********kg) or €******** (applicable average quantity higher than********kg).
(ii) TheNon-Renewal Fee shall be due and payable********days after the later of the date (A) of receipt byTargacept of a proper invoice fromPolitherefor and (B) on whichTargacept confirms in writing that a********has occurred. Notwithstanding the preceding sentence, if the production of more than********Batches that conform to the******** and the********and test within acceptable ranges on relevant parameters as theBatches validated byPoli for commercial use is required to achieve a********, then (1) ********% of the******** Fee shall be due and payable******** days after the later of the date (x) of receipt byTargaceptof a proper invoice fromPolitherefor and (y) on whichTargacept confirms in writing the production of********Batches that meet the foregoing conditions and (2) ********% of the******** Fee shall be due and payable********days after the later of the date (x) of receipt byTargacept of a proper invoice fromPolitherefor and (y) on whichTargacept confirms in writing that a********has occurred.
(iii) For purposes of this Agreement, a******** shall have occurred if and at such time asTargacept confirms in writing thatTargacept or its designee has produced********Batches (or such******** number ofBatches as may then be required by******** or by any******** to conclude that the performance of the********byTargacept or such designee is validated) that conform to the********and the********and test within acceptable ranges on relevant parameters as theBatches validated byPolifor commercial use.
(d)Targacept shall have the right to continue thisAgreementon a non-exclusive basis after theInitial Term or anyRenewal Term by giving written notice toPoli (hereinafter referred to as a******** Notice”) (i) by the date that is******** months prior to the expiration of the******** Termor the then-current********Term, as the case may be, and (ii) that includes a commitment to purchase for the******** Term or the********Term, as the case may be, fromPolithroughInterchem at least a********percentage (from********% to********%) of the API thatTargacept requires for such******** Term(hereinafter referred to as the********).
In the eventTargacept provides a********Notice, (A) theTargacept******** Obligation shall******** and (B) a******** (hereinafter referred to as a********Fee”) will be due fromTargacept toPoli in an amount equal to:
(1) if the********is above********%,********% of the amount of the******** Fee that would have become payable byTargacept pursuant to Section 9.1(c)(i) if such******** Notice had been a******** or
(2) otherwise (but subject to Section 9.1(e)), a******** of the amount of the********Fee that would have become payable byTargacept pursuant to Section 9.1(c)(i) if such******** Notice had been a********equal to********% minus the******** (as an illustrative example, if the********were********%, the********Fee would be********% of the amount that would have become payable byTargacept pursuant to Section 9.1(c)(i) if such******** had been a********;
such******** to be payable byTargacept within******** days after the later of the date (x) of receipt byTargacept of a proper invoice fromPolitherefor and (y) on whichTargacept confirms in writing that a******** has occurred. Notwithstanding anything in thisAgreement to the contrary, in no event shall more than one********Fee be payable byTargacept.
(e) If the********is not above********%,Poli shall have the right, by written notice toTargacept given within fifteen (15) days after the date of the********to reject such********and thereby deem such********to be a********, in which event Section 9.1(c) (including, without limitation, the******** Fee determined as provided in Section 9.1(c)(i)) shall thereupon apply in lieu of Section 9.1(d).
| | 9.2 | (a) ThisAgreement may be terminated upon the mutual written agreement ofTargacept andPoli. |
(b) EitherTargacept orPoli shall be entitled to terminate thisAgreementby giving written notice to the other if (i) Targacept, in the case of termination byPoli, orPoliorInterchem, in the case of termination byTargacept, commits any material breach of this Agreement and, if such breach is capable of being cured, fails to cure the breach within********days after receipt of written notice of such breach from the non-breachingParty or (ii) Targacept, in the case ofPoli, orPoliorInterchem, in the case ofTargacept, files a petition in bankruptcy, or enters into an agreement with its creditors, or applies for or consents to the appointment of a receiver or trustee, or makes as assignment for the benefit of creditors, or becomes subject to an involuntary proceeding under any bankruptcy or insolvency law that remains undismissed or unstayed for at least******** days.
(c)Targacept shall have the right, at its sole discretion, to terminate thisAgreement at any time immediately upon written notice toPoli andInterchem:
(i) if theFirst Approval Date has not occurred on or before the seventh (7th) anniversary of theEffective Date;
(ii) upon the circumstances described in Section 3.2(c) or Section 5.3(b);
(iii) upon the failure ofPoli orInterchem to obtain or maintain any licenses, registrations or approvals required by thisAgreement orApplicable Regulation in connection with theManufacturing of theAPI or performance of any otherPoli Activities, either generally or specifically at theFacility;
(iv) upon aChange of Control ofPoli orInterchem (subject to Section 10.3(b)), ifTargacept shall reasonably in good faith (A) determine that it has a conflict of interest with the surviving, purchasing or continuing entity in suchChange of Control or (B) believe that such surviving, purchasing or continuing entity may not meetPoli’sobligations hereunder.
(v) upon the attempted assignment or delegation byPoli orInterchem of any of its rights or performance hereunder not in accordance with Section 14(a);
(vi) if, with respect to anyPatent Rights owned or licensed byTargacept that claim or cover the composition of matter, pharmaceutical composition or a method of use of the S(+) enantiomer of mecamylamine hydrochloride,Poli orInterchem files an action for a declaratory judgment of invalidity of suchPatent Rights, initiates a re-examination proceeding with respect to suchPatent Rights, or otherwise challenges the scope, validity or enforceability of suchPatent Rights; or
(vii) if at any time during theTerm theInventory is not maintained at the level required by Section 3.3(a)(i); provided that, solely with respect to this clause (vii),Targacept shall not have the right to terminate thisAgreementuntil it has made reasonable inquiry of (or used commercially reasonable efforts to make reasonable inquiry of)Poli as to the cause for the failure to maintain the requiredInventory.
| | 9.3 | (a) The effective date of any termination pursuant to Section 9.2 shall be the last day of theTerm. |
(b) Expiration or termination of thisAgreement by any means and for any reason shall not relieve theParties of any obligation accruing concurrently therewith or prior thereto and shall be without prejudice to the rights and remedies of anyParty with respect to any breach of any of the provisions of thisAgreement occurring prior to such expiration or termination.
(c) In particular but without limiting the generality of Section 9.3(b), upon expiration or termination of thisAgreement for any reason:
(i) outstanding unpaid true and correct invoices issued byInterchem on behalf ofPoli in respect of theAPI delivered prior to the effective date of such expiration or termination shall be paid byTargacept as provided inAnnex B;
(ii) unless agreed in writing otherwise byTargaceptandPoli,Poli shall be required to produce and deliver compliantAPI, andTargacept shall be required to purchase (subject to its right of rejection under this Agreement), theAPI subject toOrders placed prior to such expiration or termination of thisAgreement; and
(iii)Targacept shall purchase fromPoli throughInterchem the remainingInventory, provided thatTargacept’s obligation shall (A) not exceed the amount ofInventory required to be maintained pursuant to Section 3.3(a) and (B) be subject to its right of rejection under this Agreement.
| | 9.4 | The provisions of Sections 3.3(c), 4.1, 4.2, 5.1, 5.3(a), 9.3, 9.4, Articles 6, 7, 8, 10, 11, 12 and 14 (excluding clauses (g) and (i) thereof) and paragraphs 3 (last sentence only) and 4 ofAnnex B (including, for purposes of interpreting any such section, article or annex, the portions of all other sections or articles that are themselves referenced in such section, article or annex or define terms that are used in such section, article or annex), shall survive and continue following the last day of theTerm. In addition all obligations and warranties ofPoliorInterchem hereunder as applied to thePoli Activities completed as of the last day of theTerm shall survive and continue following the last day of theTerm. |
| 10. | TECHNOLOGY TRANSFER; IP LICENSE |
| | 10.1 | As used in thisAgreement: |
(a) ********means the********to occur of:
(i) if no other clause of this Section 10.1(a) applies,Targaceptgives written notice toPoli on or after the******** of the********directingPoli to transfer the******** toTargacept or any designee ofTargacept (hereinafter referred to as an********);
(ii) any******** designated byTargacept as a********pursuant to any provision of thisAgreement;
(iii) eitherTargacept orPoli gives a********to the other;
(iv)Targacept gives a********toPoli; or
(v) the******** day of theTerm.
(b) “Poli IP” means: (i) U.S. Patent No.********all counterparts of U.S. Patent No.********outside of the United States and all otherPatent Rights owned byPoli that claim priority to the patent application from which U.S. Patent No.********issued, if any; (ii) all ideas, concepts, discoveries, inventions, developments, improvements, know-how, expertise, trade secrets, designs, devices, equipment, process conditions, specifications, algorithms, notation systems, works of authorship, computer programs, technologies, formulas, techniques, methods, procedures, synthesis information, assay systems, applications, experimental results, data (including, without limitation, analytical, toxicological, pharmacological, clinical, bioequivalence and stability data), documentation, records, reports, enzymes, reagents, proteins, peptides, organisms, formulations and samples owned or controlled byPoli, in each case that relates generally or specifically to theManufacturing of theAPI; and (iii) allPatent Rights that claim or cover any of the subject matter of clause (ii).
| | 10.2 | (a) Upon a********,Poli shall (i) provideTargacept and any third party designated byTargacept with all reasonable assistance required byTargacept or such designee to transfer the******** toTargacept or such designee (hereinafter referred to as the********) and (ii) use its best efforts to achieve a********within********months (or, if a********constitutes the********months) after the********. |
(b) In particular but without limiting the generality of Section 10.2(a),Poli shall:
(i) make available toTargacept or its designee all ******** and ******** relating to the ******** (including, without limitation, all of the ********) and all documentation constituting material support, performance advice, shop practice, specifications as to materials to be used and control methods that are necessary or useful to enableTargacept or its designee to use and practice the ********) and quantities of intermediates and active ingredients reasonably requested byTargacept or its designee to validate ******** by or on behalf ofTargacept or its designee using the ********;
(ii) cause all********and******** ofPoli to meet with employees or representatives ofTargacept or its designee at both the******** and the********ofTargacept or its designee, at mutually convenient times, to assist with the working up and use of the********and with the training ofTargacept’s or its designee’s personnel to the extent necessary or useful to enableTargacept or its designee to use and practice the********;
(iii) without limiting the generality of clause (ii), cause all ******** and ******** and ******** ofPoli to meet with employees or representatives ofTargacept or its designee at both the ******** and the ******** ofTargacept or its designee and make available all ******** at mutually convenient times, to support and execute the transfer of all applicable ******** and the ******** thereof (including, without limitation, all applicable ******** and ********and ********;
(iv) take such steps as are necessary or useful to assist in reasonable respectsTargacept or its designee in obtaining any necessary********or******** from the******** and all other applicable********with respect toTargacept or its designee’s********; and
(v) provide such other assistance asTargacept or anyTargacept designee may reasonably request to enableTargacept or its designee to********and******** the********and otherwise to********.
In addition, without intending to limit or modify the******** of theTargacept******** Obligation and without requiring the disclosure of any information that is not otherwise required by thisAgreement,Poli hereby grants toTargacept, a******** (subject to the terms of thisAgreement and, for clarity, all********owned or licensed byTargacept),******** (except as provided in clause (ii) of the proviso below),******** to all********to make, have made, develop, have developed, use, sell, have sold, offer for sale and import******** (or intermediates thereof) and any********and otherwise to exploit such********in all respects in connection therewith (hereinafter referred to as the********); provided that the********shall******** and be of no force or effect upon effectiveness of******** of thisAgreement by (A) Poli pursuant solely to Section 9.2(b)(i) for an uncured material breach of thisAgreement byTargacept or (B) Targacept pursuant solely to Section 9.2(c)(i).
| | 10.3 | (a) If a********constitutes the********Targacept shall pay toPoli (i) ******** Euros (€********) within******** days after receipt of an invoice fromPoli that includes a certification thatPoli has initiated the********and (ii) ********Euros (€********) within******** days after the******** of the date (A) of receipt byTargacept of a proper invoice fromPolitherefor and (B) on whichTargaceptconfirms in writing that a********has occurred. |
(b) If the******** day of theTerm both (i) arises from the termination of thisAgreement byTargacept pursuant solely to Section 9.2(c)(iv) and (ii) constitutes the******** then Section 9.1(c) shall apply as ifTargacept gave a********as of the last day of theTerm, except that the********shall be********% of the amount determined in accordance with Section 9.1(c)(i).
(c) With respect to all******** (other than a********that is described in any of Sections 3.2(c), 3.2(e), 5.3(b), 8.2, 10.1(a)(iii), 10.1(a)(iv), 10.3(a) or 10.3(b)),Targacept will reimbursePoli for its actual and reasonable out-of-pocket expenses to perform the********within******** days after the later of the date (A) of receipt byTargacept of a proper invoice fromPolitherefor and (B) on whichTargaceptconfirms in writing that a********has occurred.
| 11. | DMFs AND OTHER REGULATORY MATTERS; RECALLS; INTELLECTUAL PROPERTY MATTERS |
| | 11.1 | (a)Poli shall: (i) to the extent permitted byApplicable Regulation, keep and maintain on file with theFDAa drug master file for theAPI using the procedure of 21 CFR 314.420 (hereinafter referred to as the “U.S. DMF”) and keep and maintain on file with each otherHealth Authority as may be directed byTargacept from time to time a drug master file (or analogous foreign submission) for theAPI using the appropriate procedure permitted byApplicable Regulation (each hereinafter referred to as an “Ex-U.S. DMF” and, together with theU.S. DMF, the “DMFs”); (ii) with respect to each of theDMFs, allowTargacept to reference the relevant information and documentation therein (including, without limitation, by executing promptly followingTargacept’s request a letter of access or comparable document reasonably required to provide such right of reference); (iii) maintain and keep current and complete any and all suchDMFs at all times during theTerm; and (iv) not interfere in any way with the right of reference noted above. |
(b) Upon the request ofTargacept made not more frequently than once per calendar year,Poli shall make allDMFs available for audit at theFacility in their entirety to an independent third party selected byTargacept and reasonably acceptable toPoli for purposes of confirming the adequacy and completeness of, andPoli’s compliance with, eachDMF, subject to such independent third party’s execution of a confidentiality agreement in a form reasonably acceptable toPoli; provided that it is understood and expressly agreed that such third party shall be permitted to provide toTargacept its conclusions as to the adequacy and completeness of eachDMF and, if applicable, to identify any inadequacies or omissions and provide toTargacept its recommendations to address the same.
(c) Notwithstanding Section 11.1(a), with respect to any particular information or documentation relevant to specific methods ofManufacture or characterization of the API (including, without limitation, theManufacturing Process) or any other information specific to theAPI and relevant to submissions to theFDA or otherHealth Authority,Poli may provide such information or documentation toTargacept or its designee (and, in such event, as betweenPoli andInterchem,Poli shall provide such information or documentation toTargacept or its designee throughInterchem) in lieu of including such information or documentation in the applicableDMF. In such event,Poli shall provide such information or documentation in a manner to enable its timely submission for review and approval by theFDA or otherHealth Authority, as applicable.
| | 11.2 | In addition to, and without limiting the generality of, Section 11.1,Poli agrees to provide toTargacept or its designee such information and assistance relating to theManufacture or characterization of theAPI asTargacept may reasonably require for purposes of applying for and maintaining any or allRegistrations forProduct worldwide. It is understood and agreed thatTargacept does not warrant or guarantee that it will require anyAPIor any particular quantity ofAPI in any particular period, that it will seek to obtain or that it will obtain approval to conduct clinical trials ofProduct or that it will seek to obtain or obtain approval for commercial sale ofProduct in any country. |
| | 11.3 | IfPoli receives notice of (i) any serious adverse drug experience (as defined under 21 CFR 312.32) or any analogous term underApplicable Regulation pertaining toAPI orProduct or (ii) any complaint or event that may necessitate a field alert under 21 CFR 314.81(b)(1) or any otherApplicable Regulation, relating toProduct,Poli shall notifyTargacept within twenty-four (24) hours after its receipt of such notice.Poli shall investigate all reports of a quality complaint with respect to theAPI orProduct, and eachParty shall cooperate in such investigations in all reasonable respects. |
| | 11.4 | In the event thatTargacept shall be required, or shall decide, to recall or withdraw, or effect a field alert with respect to, anyProduct containing or comprisingAPI supplied byPoli pursuant to thisAgreement, thenPoliandInterchem shall assistTargacept in all reasonable respects in implementing such recall, withdrawal or field correction. If such recall, withdrawal or field correction is initiated because of (i) any failure of suchAPI to conform to the warranties set forth in Section 5.1(a) or otherwise because of the negligence or willful misconduct ofPoli,Poli shall promptly reimburseTargacept for all costs associated with such recall, withdrawal or field correction (together with all amounts paid byTargacept hereunder with respect to theAPI contained in or comprising theProduct subject to such recall, withdrawal or field correction) or (ii) a latent defect in suchAPI (i.e., a defect, other than the failure of suchAPI to conform to theSpecifications, that is not discovered byTargacept or its designee in the conduct of reasonable analysis in accordance with Section 5.2(a)(i)), but where suchAPI has, until its expiration date, been stored in accordance in all material respects withApplicable Regulation) that affects its quality or functionality and to which clause (i) does not apply,Poli shall promptly reimburseTargacept for 50% of all costs associated with such recall or withdrawal (together with 50% of all amounts paid byTargacept hereunder with respect to theAPI contained in or comprising the recalled or withdrawnProduct). |
| | 11.5 | All rights and licenses now or hereafter granted toTargacept under or pursuant to thisAgreement(including, without limitation, Section 10.2), are rights to “intellectual property” (as defined in Section 101(35A) of Title 11 of the United States Code, as amended, such Title 11 hereinafter referred to as the “Bankruptcy Code”). In connection with the practice of theLicense (as defined in Section 10.2),Poli hereby grants toTargacept: (i) the right of access to (A) laboratory notes, notebooks and records related to theAPI required to be maintained byPoli under thisAgreement orApplicable Regulation and (B) regulatory filings and approvals (including, without limitation, theDMFs); and (ii) the right of access to and the right to obtain possession of and to benefit from (A) copies of data generated in or arising out of research of theAPI, (B) laboratory samples, (C) samples of theAPI, (D) formulas, including theSpecifications, and (E) all other embodiments of such intellectual property, all of which constitute “embodiments” of intellectual property pursuant to Section 365(n) of the Bankruptcy Code, whether any of the foregoing are inPoli’s possession or control or in the possession and control of third parties.Poli shall not interfere withTargacept’s exercise of rights and licenses to intellectual property licensed hereunder and embodiments thereof in accordance with thisAgreement and agrees to use its best efforts to assistTargacept to obtain such intellectual property and embodiments thereof in the possession or control of third parties as reasonably necessary or desirable forTargacept to exercise such rights and licenses in accordance with thisAgreement. TheParties acknowledge and agree that (x) none of the payments payable byTargacept under thisAgreement constitute “royalties” within the meaning of Bankruptcy Code §365(n) or relate to licenses of intellectual property hereunder and (y) Targacept shall have the right to sublicense to third parties all rights granted or licensed toTargacept under thisAgreement (including, without limitation, the rights of access granted in this Section 11.5). To effectuate the purposes of this Section 11.5 outside of the United States, all provisions of applicable law analogous to theBankruptcy Code shall be deemed to apply and to be incorporatedmutatis mutandis into this Section 11.5. |
| 12. | GOVERNING LAW, ARBITRATION |
| | 12.1 | ThisAgreement shall be construed and interpreted in accordance with the laws of the State of New York (USA), without regard to the principles of conflicts of laws. TheParties agree to exclude the application of the United Nations Convention on Contracts for the International Sale of Goods to thisAgreement. |
| | 12.2 | Except as expressly provided in Section 12.3(c), noParty shall institute a proceeding in any court or administrative agency to resolve any dispute, claim or other controversy arising out of or relating to thisAgreement, or any alleged breach thereof, before thatParty has sought to resolve the dispute through the processes set forth in Section 12.3. |
| | 12.3 | (a) TheParties shall use commercially reasonable efforts to resolve amicably any dispute, claim or other controversy arising out of or relating to thisAgreement, or any alleged breach thereof, through mutual discussions and negotiations among a senior executive of eachParty. |
(b) If such senior executives do not resolve the dispute, claim or other controversy within********days after anyParty requests a discussion among senior executives pursuant to this Section 12.3, such dispute, claim or other controversy shall be settled by means of arbitration before neutral arbitrator(s) administered by the International Chamber of Commerce in accordance with its commercial arbitration rules in effect on the date of the request for arbitration (hereinafter referred to as the “Rules”).
The seat of arbitration shall be London, England and the language shall be English, which the arbitrators shall speak fluently. Written proofs in English shall be admitted to the arbitration proceedings without need of their translation. The number of arbitrators appointed pursuant to theRules shall be one (1) arbitrator agreed by theParties. If theParties are unable to agree, then eachParty shall appoint one (1) arbitrator, of its own choice and the arbitrators so appointed shall further appoint a third arbitrator. No arbitrator may be appointed who has previously been instructed, consulted, employed or engaged by anyParty or its attorneys and solicitors within the preceding******** years, unless the nature of such relationship is fully disclosed and consented to by theParties.
The arbitrator(s) shall have no power to add to, subtract from or modify any of the terms or conditions of thisAgreement, shall base any award on applicable laws and judicial precedent and include in such award a statement of the reasons upon which the award is based. The award to be rendered shall be final and conclusive and binding upon all theParties without any right to appeal or other review and may be entered in and enforced by any court having jurisdiction, except that any award rendered againstTargacept shall only be enforceable by the federal or state courts located in Forsyth County, North Carolina. The costs of the arbitration proceedings shall be charged to the losingParty; provided that, ifPoli orInterchem is the losingParty, the costs shall be a joint and several obligation of each ofPoli andInterchem.
All applicable statutes of limitation and defenses based upon the passage of time shall be tolled while the procedures specified in this Section 12.3(b) are pending, and eachParty shall take such action, if any, required to effectuate such tolling. EachParty shall be required to continue to perform its obligations under thisAgreement pending final resolution of any dispute, claim or other controversy arising out of or relating to thisAgreement or any alleged breach thereof.
(c) Notwithstanding Section 12.3(b) or any other provision hereof, anyParty shall be entitled to seek interim or provisional judicial relief, in the form of a temporary restraining order, preliminary injunction or other interim equitable relief to protect the interests of suchParty prior to or during an arbitration proceeding pursuant to Section 12.3(b), which relief may be made permanent by the arbitrator(s).
Each of theParties agree to work diligently and in good faith to prepare, negotiate and execute a complementary agreement covering quality matters with respect to theManufacture of theAPI hereunder within ******** months following theEffective Date. Upon execution, such complementary quality agreement shall be deemed a part hereof and incorporated by reference herein. To the extent of any conflict between thisAgreement and terms of such complementary quality agreement, the complementary quality agreement shall control solely with respect to matters that are both solely operational and designed to ensure compliance withcGMP and thisAgreement shall control with respect to all other matters.
(a) ThisAgreementor any rights or performance hereunder may be assigned or delegated (including for clarity, but without limitation, subcontracted) only (i) with the written authorization ofPoli, in the case ofTargacept, orTargacept, in the case ofPoli orInterchem,in each case, not to be unreasonably withheld, conditioned or delayed, (ii) byTargacept to a licensee of intellectual property rights relating to theAPI or to mecamylamine or (iii) to the bona fide successor to all or substantially all of the business of aParty (whether by merger, consolidation, asset transfer or similar transaction) to which thisAgreement relates. Any other assignment or delegation (including, without limitation, subcontract) is void.
(b) ThisAgreement, including for clarity the attached Annexes (which are an integral part of it) and the complementary quality agreement contemplated by Article 13, (i) amends and restates in its entirety the Supply Agreement dated July 23, 2001 amongPoli,Interchem andTargacept, as assignee of Layton Bioscience Inc., as amended (hereinafter referred to as the “2001 Agreement”), except solely that theParties’ respective representations, warranties and obligations set forth in one or more of Sections 6, 11 and 13 of the2001 Agreement as applied to “Product” (as defined thereunder) manufactured or delivered thereunder toTargacept or its designee, and activities performed with respect thereto, byPoli prior to theEffective Date shall continue in full force and effect and (ii) constitutes the entire agreement between theParties and supersedes all previous negotiations and arrangements between theParties relating to the subject matter of thisAgreement. For clarity, (A) all “Isomers” (as defined in the2001 Agreement) manufactured or delivered thereunder toTargacept or its designee, and activities performed with respect thereto, byPoli prior to theEffective Date (including, without limitation, in connection with the written orders placed thereunder effective May 26, 2007 and April 28, 2009) shall be deemed to beAPI manufactured or delivered, or activities performed with respect thereto, under thisAgreement and (B) the Services Agreement dated July 28, 2006 amongPoli,Interchem andTargacept, as amended, shall continue in full force and effect. EachParty confirms that it is not relying on any representation, warranty or communication of any otherParty, except for those specifically set forth in thisAgreement.
(c) ThisAgreement may be executed in up to three counterparts (which may be exchanged by facsimile or PDF with the same legal effect as if original signatures were exchanged), each of which shall be deemed an original and all of which together shall constitute one and the same agreement.
(d) No modifications of thisAgreement shall be binding unless agreed upon in writing and executed by authorized representatives ofTargacept andPoli. Failure by anyParty to enforce any rights under thisAgreement shall not be construed as a waiver of such rights nor shall a waiver by suchParty in one or more instances by construed as constituting a continuing waiver or as a waiver in other instances.
(e) In the event of any provision of thisAgreement being declared invalid, void, illegal or otherwise unenforceable by any judicial or other competent authority, the validity, legality and enforceability of the rest of the provisions of thisAgreement shall not be in any way affected or impaired. TheParties shall endeavour to amend such invalid, void, illegal or otherwise unenforceable provision in a reasonable manner to achieve the intention of theParties reflected herein.
(f) Except to the extent otherwise expressly provided in thisAgreement, any remedy set forth in any section of thisAgreement (including, without limitation, Sections 3.2(b), 3.2(c), 5.3(a), 5.3(b), 6.1 and 11.4) shall be in addition to, and not in limitation of, any other rights or remedies that may be available hereunder, at law or in equity.
(g) EachPartyagrees to execute, acknowledge and deliver such additional documents and instruments and to do all such other acts as may be necessary or appropriate in order to carry out the purposes and intent of thisAgreement.
(h) The headings used in thisAgreement are intended for convenience only and shall not be considered part of the written understanding between theParties. TheParties acknowledge and agree that: (i) eachParty and its counsel reviewed and negotiated the terms and provisions of this Agreement and have contributed to its drafting; (ii) the rule of construction to the effect that any ambiguities are resolved against the draftingParty shall not be employed in the interpretation of thisAgreement; and (iii) the terms and provisions of this Agreement shall be construed fairly as to eachParty and not in a favor of or against eitherParty, regardless of whichParty was generally or primarily responsible for the drafting of thisAgreement.
(i) Except as provided in this paragraph, any notice required under thisAgreement shall be effective only if it is in writing and (i) delivered in person, (ii) deposited with a internationally recognized overnight courier service, or in the mails, postage prepaid and return receipt requested, in either case addressed to the applicable address set forth on the first page of thisAgreement, or (iii) otherwise transmitted and confirmed received by an authorized officer of the recipient to which such notice is provided. Notices shall be effective upon actual receipt or, if earlier, notices (A) deposited with an overnight courier service shall be effective one (1) business day after deposit (if sent within the United States) and upon actual receipt (if sent from or to outside of the United States) and (B) sent by mail shall be effective********business days after deposit, postage prepaid, in the mails (if sent within the United States) and upon actual receipt (if sent from or to outside of the United States). EachParty may designate by written notice to the otherParties in accordance herewith any other address to which notices shall be sent.
(j) Each of theIndemnitees shall be a third party beneficiary of Sections 6.1 and 6.2, entitled to enforce the terms thereof at law or in equity. Except as expressly provided in this paragraph, thisAgreement is not intended to, and does not, confer any rights or remedies upon any individual, entity or governmental body or agency who or that is not aParty and no individual, entity or governmental body or agency who or that is not aParty shall have any right to enforce thisAgreement at law or in equity.
(k) It is expressly agreed thatPoli andInterchem, on the one hand, andTargacept, on the other hand, shall be independent contractors and that the relationship between them shall not constitute a partnership, joint venture or agency. NeitherPoli orInterchem, on the one hand, norTargacept, on the other hand, shall have the authority to bind the other without the prior consent of the other. All individuals employed by aParty shall be employees of suchParty and not of any otherParty and all costs and obligations incurred by reason of any such employment shall be for the account and expense of such employerParty.
(l) Each ofPoli andInterchem acknowledges the validity of the title ofTargacept in and to any and all trademarks that may be used in conjunction with anyProduct (orAPI). No right, title or interest in and to such trademarks is granted by thisAgreement.
IN WITNESS WHEREOF, authorized representatives of theParties have signed thisAgreement on the respective dates set forth below.
| | | | |
For and on behalf of : TARGACEPT INC. | | | | |
| | |
| Date: December 3, 2009 | | | | Date: |
| | |
Mr. J. Donald deBethizy | | | | Mr. |
| (President and CEO) | | | | ( ) |
| | |
/s/ J. Donald deBethizy | | | | |
| | |
For and on behalf of : POLI INDUSTRIA CHIMICA S.P.A. | | | | |
| | |
| Date: December 2, 2009 | | | | Date: December 2, 2009 |
| | |
Mr. Alberto Mangia | | | | Mr. Guido Puricelli |
| (Managing Director) | | | | (Legal Affairs) |
| | |
/s/ Alberto Mangia | | | | /s/ Guido Puricelli |
| | |
For and on behalf of : INTERCHEM CORPORATION | | | | |
| | |
| Date: December 2, 2009 | | | | Date: December 2, 2009 |
| | |
Mr. Ronald J. Mannino | | | | Mr. Joseph M. Pizza |
| (Chairman) | | | | (President) |
| | |
/s/ Ronald J. Mannino | | | | /s/ Joseph Pizza |
ANNEX A
SPECIFICATIONS
Appearance:********
Identification: ********
Acidity: ********
Loss on drying: ********
Water (KF): ********
Residue on ignition: ********
Specific optical rotation: ********
Heavy metals: ********
Chlorides content: ********
Assay (GC): ********
Related substances (GC): ********
Enantiomeric excess: ********
Residual solvents (GC): ********
Microbial contamination: ********
ANNEX B
SHIPMENT, PRICING AND PAYMENT
The********price for theAPI********and performance of all otherPoli Activitiesshall be as provided in the table and accompanying notes below. Invoice currency shall be in Euros. For clarity,********means that, except for import taxes and duties to be paid byTargacept consistent with the DDU Incoterm, no other amounts shall be invoiced to, or payable by,Targacept.
| | | | |
| | | Quantity (kg)/Calendar Year* | | Pricing (Euro€/kg) |
Initial Term | | first ******** | | ******** |
| | next ******** | | ******** |
| | next ******** | | ******** |
| | next ******** | | ******** |
| | above ******** | | ******** |
After theInitial Term | | See paragraph 1 below. |
| * | Refers to the quantity ofAPI included inOrders provided during a calendar year (January 1 through December 31). |
An example, for illustrative purposes, is set forth below.
| | | | | | | | | | | | |
Calendar Year | | Order Date | | Quantity | | Price Invoiced/kg | | x | | Number of kg = | | € |
| ******** | | ******** | | ********kg | | €********/kg | | x | | ********kg = | | €******** |
| | | | | | |
| | | | | | €********/kg | | x | | ********kg = | | €******** |
| | | | | | |
| | ******** | | ********kg | | €********/kg | | x | | ********kg = | | €******** |
| | | | | | |
| | | | | | | | | | Calendar Year Total: | | €******** |
| | | | | | |
| ******** | | ******** | | ********kg | | €********/kg | | x | | ********kg = | | €******** |
| | | | | | |
| | | | | | €********/kg | | x | | ********kg = | | €******** |
| | | | | | |
| | | | | | €********/kg | | x | | ********kg = | | €******** |
| | | | | | |
| | ******** | | ********kg | | €********/kg | | x | | ********kg = | | €******** |
| | | | | | |
| | | | | | €********/kg | | x | | ********kg = | | €******** |
| | | | | | |
| | | | | | €********/kg | | x | | ********kg = | | €******** |
| | | | | | |
| | | | | | | | | | Calendar Year Total: | | €******** |
1. (A) If theTerm continues after the******** Term, subject to subparagraph (B) below, the pricing for theAPI to be applicable during the********Termor the********Term, as the case may be, shall be subject to review and adjustment pursuant to a written request by eitherTargacept orPoli, at intervals of not less than********months, to take into account any actual increase or decrease inPoli’s********. All adjustments to the price based on an increase or decrease in cost for a particular calendar year shall be given effect on January 1 of the next calendar year. All calculations made pursuant to this paragraph shall be made in accordance withPoli’s standard accounting practices and with generally accepted accounting principles in the United States and shall be consistently calculated on the same basis and utilizing the same criteria as is utilized for other active pharmaceutical ingredients manufactured byPoli.
(B) In no event shall any increase in the pricing forAPI made pursuant to this paragraph 1 (stated as a percentage of the then-current pricing) for any year******** (i) the********of the********for each of the******** calendar years in the******** (for********as reported by the Bureau of Labor Statistics of the U.S. Department of Labor (final compilation published at the end of each calendar year) or (ii) ********%.
2. Upon each shipment of theAPI,Interchem(on behalf ofPoli) shall promptly invoiceTargacept therefor in a form reasonably acceptable toTargacept and in accordance with thisAnnex B. Payment shall be due********days after receipt byTargacept of such invoice; provided that ifTargacept shall reject such shipment pursuant to Section 5.2, then payment shall be due, if at all, within********business days after receipt byTargacept of notice from the********that the invoicedAPI is in fact conforming or, subject to application of any applicable credit, the receipt byTargacept of replacementAPI, as the case may be.
3.Targacept shall make all payments pursuant to thisAnnex B by check payable to Interchem Corporation and sent to 120 Route 17 North, Suite 115 - Paramus NJ 07652 (USA), Attn: Diana Tate or wire transfer to a bank account designated in writing byInterchem. Each ofPoli andInterchem acknowledges and agrees that it is the********obligation ofInterchem to disburse payment toPoli for thePoli Activities performed hereunder and that, except as otherwise expressly provided in Sections 9.1(c), 9.1(d), 10.3(a) and 10.3(c) (in each case, if and to the extent applicable),Targacept shall have no payment or other financial obligation toPoli whatsoever.
4.Interchem shall keep accurate records of all shipments of theAPI and invoice calculations hereunder and, upon the request ofTargacept, shall permitTargacept or its designee to examine such records during normal business hours for the purpose of verifying the correctness of all such calculations.
