Dyax Corp. has requested that portions of this document be accorded confidential treatment pursuant to Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended. Confidential materials omitted and filed separately with the Securities and Exchange Commission.Asterisks [*****] denote such omission.

 

1.8.

"Commercially Reasonable Efforts" shall mean the conduct and completion of an activity by a Party in a diligent and commercially reasonable manner, using efforts not less than the efforts the Party uses to other similar activities, based on conditions then prevailing and any other technical, legal, scientific, medical or commercial factors that the Party deems in good faith to be relevant.

 

1.9.

“Confidential Information” shall mean any nonpublic information of Hollister-Stier or Client including without limitation, trade secrets, business methods, operating procedures, manufacturing methods and processes, prices, and customer information, whether of a written, oral, or visual nature.

 

1.10.

“Delivery Date” shall mean the date a lot of released Product is delivered to Client.

 

1.11.

“Facility” means Hollister-Stier’s facility located at 3525 North Regal Street, Spokane, Washington 99207 that has been approved by Client and that (i) is fully validated and qualified to perform the Tech Transfer Services and Manufacturing Services, and (ii) is properly licensed to Manufacture the Products.  “Facility” also includes such other labs or facilities mutually agreed to by the parties in the Quality Agreement or in an amendment to this Agreement.

 

1.12.

“FDA” shall mean the United States Food and Drug Administration.

 

1.13.

“Fill Date” shall mean the date Drug Substance is filled into vials to produce a lot of Product.

 

1.14.

“Intellectual Property” shall mean patents, copyrights, trademarks, trade names, service marks, licenses and other intellectual property rights of a Party.

 

1.15.

“Master Batch Record” shall mean a written description of the procedure to be followed by Hollister-Stier in processing of a Batch or Lot of Product, which description shall include, but not be limited to, a complete list of all active and inactive ingredients, components, weights and measures used in processing the Product within the meaning of 21 CFR part 211.186, or its successor as in effect from time to time.

 

1.16.

“Product” shall mean the commercial ecallatide manufactured by Hollister-Stier for Client.

 

1.17.

“Quality Systems Agreement” shall mean an agreement in the form attached as Exhibit A, to be executed by the Parties simultaneously with the execution of this Agreement

 

1.18.

“Regulatory Authority” shall mean any applicable federal, state, local, or international regulatory agency, department, bureau, or other governmental agency.

 

1.19.

“Specifications” all specifications and processes set forth in this Quality Agreement, the Abbreviated New Drug Application or Marketing Authorization for the Product, and any applicable master batch records, protocols, and standard operating procedures applicable to the Product.

 

1.20.

“Third Party” shall mean any party other than Client or Hollister-Stier and their respective Affiliates.

 

1.21.

“Validation Master Plan” shall mean a document that is approved by both Parties that describes specific activities necessary to accomplish qualification of processes specific for manufacture of the Product to cGMP standards.

2.

The Parties agree to the following representations and warranties:

 

2.1.

Each Party represents and warrants to the other as follows:

 

2.1.1.

It has full power and authority to enter into this Agreement and perform its obligations hereunder.

 

2.1.2.

Subject to Section 3.3 of this Agreement, it has such permits, licenses, and authorizations of Regulatory Authorities, including, with respect to Client, Regulatory Authorities with jurisdiction over the Product, as are necessary to own its respective properties, conduct its business and perform its obligations hereunder.

 

2.1.3.

It is not currently debarred, suspended, or otherwise excluded by the FDA or any other Regulatory Authority from conducting business and shall not knowingly use in connection with this Agreement the services of any person debarred by the FDA.

 

2.1.4.

All laboratory, scientific, technical and/or other data submitted by or on behalf of Client or Hollister-Stier, as the case may be, relating to Product shall, to the submitting Party’s knowledge, be correct and complete in all material aspects.

 

2.2.

Hollister-Stier represents and warrants to Client as follows:

 

2.2.1.

Hollister-Stier shall process the Product in compliance in all material respects with the Quality Systems Agreement, the Master Batch Record, the Act and the cGMP Regulations.

 

2.2.2.

The Product when delivered shall comply in all material respects with the release testing as specified in BLA 125277; provided, however, that Hollister-Stier shall have no liability to Client or any Third Party for any breach of the foregoing representation and warranty to the extent that any such breach is caused in whole or in part by Client or by any materials provided by Client.

 

2.2.3.

The manufacturing facilities for the Product shall conform in all material respects to the standards of those Regulatory Authorities with jurisdiction over such facilities, including, but not limited to, those set forth in the cGMP Regulations.

 

2.3.

Client represents and warrants to Hollister-Stier as follows:

 

2.3.1.

Neither Client’s Technology Package (including the Specifications to Manufacture the Product), nor the use thereof by Hollister-Stier, shall infringe, violate nor misappropriate the rights of any Third Party including Third Party Intellectual Property rights.

 

2.3.2.

Client has all necessary rights to enable Hollister-Stier to process the Product for Client in accordance with the terms and conditions of this Agreement.

 

2.3.3.

All laboratory, scientific, technical and/or other data submitted by or on behalf of Client (including Client’s Technology Package) relating to the Product shall be complete and correct and shall not contain any falsification, misrepresentation or omission.

 

2.3.4.

All materials supplied by or on behalf of Client for use in processing the Product shall conform to the Specifications.

 

2.4.

THE WARRANTIES SET FORTH HEREIN ARE THE SOLE AND EXCLUSIVE WARRANTIES MADE BY EITHER PARTY UNDER THIS AGREEMENT, AND NEITHER PARTY MAKES ANY OTHER WARRANTIES EXPRESS OR IMPLIED OR ARISING BY LAW, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OR ARISING FROM THE COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE.

 

2.5.

EXCEPT AS NECESSARY TO SATISFY A THIRD PARTY CLAIM INDEMNIFIED UNDER ARTICLE 6 OF THIS AGREEMENT, CLIENT’S SOLE AND EXCLUSIVE REMEDY, AND HOLLISTER-STIER’S SOLE AND EXCLUSIVE LIABILITY AND OBLIGATION FOR ANY BREACH OF A REPRESENTATION AND WARRANTY SET FORTH IN SECTION 2 SHALL BE FOR HOLLISTER-STIER AT ITS OPTION, EITHER TO (A) PROCESS REPLACEMENT PRODUCT AT NO COST TO CLIENT EXCEPT THAT CLIENT, AT ITS EXPENSE, SHALL PROVIDE SUBSTITUTE API, OR (B) CREDIT OR REFUND THE PRICE TO CLIENT OF SERVICES RENDERED RELATED TO THE DEFECTIVE PRODUCT OR TO PERFORM ITS OBLIGATIONS UNDER SECTIONS 4.1 AND 4.2 OR UNDER SECTION 4.4, AS THE CASE MAY BE.

 

2.6.

WITHOUT LIMITING SECTION 2.5 OR ANY OTHER PROVISION OF THIS AGREEMENT, EXCEPT AS NECESSARY TO SATISFY A THIRD PARTY CLAIM INDEMNIFIED UNDER ARTICLE 6 OF THIS AGREEMENT, AND/OR IN THE EVENT OF A BREACH OF THE CONFIDENTIALITY OBLIGATIONS SET FORTH IN ARTICLE 9 OF THIS AGREEMENT, UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE TO THE OTHER UNDER ANY CONTRACT, TORT, STRICT LIABILITY, NEGLIGENCE OR OTHER LEGAL OR EQUITABLE THEORY, FOR THE COST OF COVER OR FOR ANY INDIRECT, INCIDENTAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS) IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE PRODUCT OR ANY SERVICES PROVIDED IN CONNECTION WITH THE PRODUCT, EVEN IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

2.7.

WITHOUT LIMITING SECTION 2.5 OR ANY OTHER PROVISION OF THIS AGREEMENT, EXCEPT AS NECESSARY TO SATISFY A THIRD PARTY CLAIM INDEMNIFIED UNDER ARTICLE 6 OF THIS AGREEMENT, AND/OR IN THE EVENT OF A BREACH OF ITS CONFIDENTIALITY OBLIGATIONS SET FORTH IN ARTICLE 9 OF THIS AGREEMENT, UNDER NO CIRCUMSTANCES SHALL HOLLISTER-STIER’S TOTAL LIABILITY TO CLIENT IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE PRODUCT OR ANY SERVICES PROVIDED IN CONNECTION WITH THE PRODUCT, EXCEED THE TOTAL AMOUNT PAID BY CLIENT TO HOLLISTER-STIER UNDER THIS AGREEMENT.

 

2.8.

NOTHING SET FORTH IN THIS AGREEMENT SHALL RESTRICT OR LIMIT HOLLISTER-STIER'S RIGHT TO RECOVER DIRECT DAMAGES, INCLUDING LOST PROFITS, FOR ANY BREACH BY CLIENT OF ITS OBLIGATION TO PAY THE PRICE FOR DELIVERED PRODUCT IN ACCORDANCE WITH ARTICLE 3.

3.

The Parties agree to the following supply and processing provisions:

 

3.1.

Subject to the terms and conditions of this Agreement Hollister-Stier shall use commercially reasonable efforts to produce and supply to Client and Client shall purchase from Hollister-Stier one hundred percent (100%) of Client’s requirements for Product.

 

3.2.

The Parties shall establish mutually agreed supply chain key performance indicators (KPI) (e.g yields, reject rates, schedule adherence, cycle times, deviations) to monitor, assess, and improve the supply of Product. The Parties shall meet in person or by teleconference not less than once per calendar year to review the supply chain KPI’s and otherwise discuss Product supply.

 

3.3.

Except as set forth in the following sentence, Client shall be solely responsible for obtaining and maintaining all permits, licenses, and authorizations necessary for Hollister-Stier to process, ship and otherwise deal with Product.  Hollister-Stier shall be solely responsible for securing and maintaining approval of Hollister-Stier’s facility as a registered FDA facility.

 

3.4.

API:

 

3.4.1.

Client will supply, at its expense, sufficient quantities of API to Hollister-Stier’s facility at least four (4) weeks prior to the Fill Date to enable Hollister-Stier to meet its obligations hereunder.  All such API shall conform to the Specifications agreed to by Hollister-Stier and Client.  Title to API shall remain at all times with Client.  Except as expressly provided otherwise in Sections 3.4.2 through 3.4.5, risk of loss of the API shall remain at all times with Client.

 

3.4.2.

If API is lost or damaged prior to processing as a result of Hollister-Stier's negligent acts or omissions, Hollister-Stier will allow Client a purchase price credit for that number of Batches for which API was lost or damaged as its sole liability and Client's sole remedy.  For example, if Client has provided Hollister-Stier with sufficient API to process three Batches, and such API is lost or damaged prior to processing as a result of Hollister-Stier's negligent acts or omissions, Hollister-Stier will process three replacement Batches at no charge to Client (except that Client shall provide replacement API at Client's expense).

 

3.4.3.

If API is lost or damaged in processing as a result of Hollister-Stier's negligent acts or omissions, Hollister-Stier will replace the spoiled Batch at no charge to the Client (except that Client shall provide replacement API at Client's expense) as Hollister-Stier's sole liability and Client's sole remedy.

 

3.11.1.

Forecasts:  At least [*****] days in advance of Client's first purchase order for Product, Client shall supply Hollister-Stier with a written, rolling twelve (12) month forecast of Client's estimated requirements for Product during such 12 month period (the "Forecast").  Within 5 business days of the start of each calendar quarter thereafter, Client will update and extend the Forecast to cover the 12 months beginning with the date of such updated Forecast.  Each Forecast shall include an estimated number of Batches and the required Delivery Dates for the 12 months covered by such Forecast.  Amounts set forth in a Forecast are estimates, to be used for planning purposes only, and Forecasts shall not constitute purchase orders.

 

3.11.2.

Purchase Orders:

 

3.11.2.1.

Client will provide Hollister-Stier with a firm purchase order at least [*****] days prior to the earliest Delivery Date specified in such purchase order.  Each purchase order shall include the number of batches and the required Delivery Date for each batch. All purchase orders will be sent by facsimile or electronic mail to the address specified by Hollister-Stier.

 

3.11.2.2.

Provided a purchase order is consistent with the most recent forecast, Hollister-Stier shall accept the purchase order by sending a written confirmation to Client. If a written confirmation is not received, Hollister-Stier shall be deemed to have accepted a purchase order within [*****] business days after receiving a purchase order.  The written confirmation shall include an estimated Fill Date and Delivery Date for each batch in the purchase order.  The parties agree that the actual fill will occur within [*****] of the estimated Fill Date; provided however that upon the occurrence of any unforeseen event that is beyond the control of Hollister-Stier (such as those described in Section 10.1) Hollister-Stier may change the actual Fill Date and/or Delivery Date to the extent necessary as a result of such event, as reasonably determined and agreed by the parties in good faithIf the Parties cannot agree to a mutually agreeable Fill Date or Delivery Date, this will be elevated to the Senior Executive in both companies.

 

3.11.2.3.

If a purchase is not consistent with the most recent forecast and if Hollister-Stier cannot accommodate the Delivery Date requested in the purchase order then the Parties will agree on an alternative delivery schedule.

 

3.11.2.4.

Once a purchase order is accepted or deemed accepted by Hollister-Stier, Hollister-Stier will be required to use Commercially Reasonable Efforts to produce the quantity of Product set forth in the purchase order for delivery on the dates(s) set forth in such purchase order.

 

3.11.2.5.

Client reserves the right to cancel or postpone any purchase order, provided that all postponements and cancellations are in accordance with each of the following terms:

 

3.11.2.5.1.

Should Client cancel or postpone all or part of any purchase order [*****] or fewer calendar days prior to the scheduled fill date, Client shall pay HollisterStier a non-refundable and non-creditable fee equivalent to 100% of the purchase price for the entire purchase order.

 

3.11.2.5.2.

Should Client cancel or postpone all or part of any purchase order less than [*****] calendar days, but more than [*****] calendar days prior to the scheduled fill date, Client shall pay HollisterStier a non-refundable and non-creditable fee equal to 50% of the purchase price for the entire purchase order

 

3.11.2.5.3.

The fees imposed under this Section 3.11.2.5 are non-refundable and non-creditable and are in addition to the full price that will be imposed upon a rescheduled purchase order.

 

3.11.3.

Price and Shipping:  Client shall pay Hollister-Stier, in U.S. dollars, the price specified in Exhibit B annexed hereto.  The price excludes all taxes, duties, shipping, insurance and other expenses.   Beginning on the first anniversary of the Effective Date, and on each succeeding anniversary of the Effective Date during the term of this Agreement, the then current price shall be increased by the annual percentage increase, if any, for the most recent twelve (12) month period for which figures are available in the "Producer Price Index - Pharmaceutical Preparations" (code PCU2834) (the "PPI") published by the U.S. Bureau of Labor Statistics (the "BLS") or, if the same is no longer published, the successor index published by the BLS that is most similar thereto.  If the PPI is discontinued and not replaced with a corresponding or similar index, then the Parties shall, in good faith, agree upon a replacement PPI.  Price increases shall be effective for all new purchase orders placed after the applicable anniversary.

 

3.11.4.

Terms of Payment:  Invoices shall be payable to Hollister-Stier within [*****] calendar days after Client's acceptance or deemed acceptance of Product as set forth in Article 4.  All amounts not paid when due shall bear interest from the due date at the rate of [*****] percent ([*****]%) per month.

 

3.11.4.1.

Invoices shall be sent to the following address:

Client:  Dyax Corp.

Attention:  Accounts Payable

Address:  55 Network Drive

Address:   Burlington, MA 01803

 

3.11.4.2.

All payments due hereunder to Hollister-Stier shall be sent by wire transfer of funds via the Federal Reserve Wire Transfer System to:

 

Name of Bank: [*****]

Bank Address: [*****]

Bank Account#  [*****]

WIRE ABA# [*****]

Beneficiary:  [*****]

Primary Contact name: [*****]

 

Or by mail to:

Hollister-Stier Laboratories, LLC

14110 Collections Center Drive

Chicago, IL  60693-4110

4.

The Parties agree to the following provisions for acceptance or rejection of Product and certain matters relating to quality control:

 

4.1.

Each Batch of Product delivered to Client hereunder shall be accompanied by a Certificate of Analysis for those tests performed by Hollister-Stier signed by a duly authorized representative of Hollister-Stier.  Client shall have [*****] days from the date of receipt of Product to inspect and reject acceptance by written notice to Hollister-Stier; provided, however, that any such notice shall set forth Client's reasons for rejection in reasonable detail and provided, further, that Client may reject Product only if: (i) Client claims a material breach of Hollister-Stier's representations and warranties in Section 2.2 of this Agreement with respect to such Product; or (ii) Hollister-Stier has failed to deliver a Certificate of Analysis for such Product.  If Hollister-Stier does not receive Client's written notice of rejection within such [*****] day period, Client shall be deemed to have accepted Product.

 

4.2.

In the event Client provides Hollister-Stier with a timely notice of rejection as set forth in Section 4.1, Client shall return the rejected Product to Hollister-Stier at Hollister-Stier's expense.  Hollister-Stier shall have [*****] days following receipt of rejected Product in which to investigate the non-conformance.  If Hollister-Stier does not dispute a rejection, Hollister-Stier shall replace the rejected Product promptly, at Hollister-Stier's expense (except for replacement API, which will be provided by Client at Client's expense) and such replacement shall constitute Client's exclusive remedy and Hollister-Stier's sole liability with respect to such rejection (unless Sections 3.4.2 through 3.4.5 apply, in which case, Client shall have the remedy set forth therein).  If Hollister-Stier disputes a rejection, Hollister-Stier shall provide Client with written notice of such dispute within [*****] days after receiving the returned Product, and the Parties shall use commercially reasonable efforts to resolve the dispute amicably and promptly.  If the Parties are unable to reach a resolution within [*****] days after Client's notice of rejection, the returned Product shall be submitted to any independent laboratory or consultant mutually acceptable to the Parties, whose decision as to the conformity of such Product with the release specification shall be final and binding.  The Party against whom the dispute is decided shall pay any charges for such laboratory or consultant.  If the laboratory or consultant determines that the returned Product did not conform to the release specification, Hollister-Stier shall replace the rejected Product at no charge to Client (except that Client shall provide replacement API at Client's expense), and such replacement shall constitute Client's exclusive remedy and Hollister-Stier's sole liability with respect to such rejected Product (unless Sections 3.4.2 through 3.4.5 apply, in which case, Client shall have the remedy set forth therein).

 

4.3.

In addition to any safety requirements set forth in the Quality Systems Agreement or the Master Batch Record, Hollister-Stier shall develop, adopt and enforce safety procedures for processing Product in compliance in all material respects with the Act and the cGMP Regulations.  Hollister-Stier shall be responsible for treating and/or disposing, in compliance with the Act and the cGMP Regulations in all material respects, all waste generated as a result of such processing, and for maintaining required records related thereto.

 

4.4.

In the event (a) any Regulatory Authority issues a request, directive or order that any of the Product be recalled, withdrawn, or corrected, (b) a court of competent jurisdiction orders such an action, or (c) either Party reasonably determines that any Product should be recalled, withdrawn or corrected, the Parties shall take all appropriate corrective actions as they reasonably mutually determine, and shall cooperate in any governmental investigations relating to the Product.  As between Hollister-Stier and Client, Client shall be solely responsible for initiating, conducting, and managing any recall, withdrawal or correction effort.  Client shall be solely responsible for all related expenses, except that Hollister-Stier shall be liable for such expenses to the extent that the recall, withdrawal or correction resulted solely from a breach by Hollister-Stier of any of its representations and warranties set forth in Section 2.2 of this Agreement.

 

4.5.

Client shall provide to Hollister-Stier copies of all material regulatory submissions that relate to Hollister-Stier's services under this Agreement, which copies shall be provided reasonably in advance of submission.  Hollister-Stier shall consult with Client in responding to questions from the Regulatory Authorities regarding processing of the Product.  Each Party shall notify the other promptly after receipt of any notice of any Regulatory Authority inspection, investigation or other inquiry involving the Product.  The Parties shall cooperate with each other during any such inspection, investigation or other inquiry including, but not limited to, allowing, upon reasonable request, a representative of the other to participate during such inspection, investigation or other inquiry, and providing copies of all relevant documents.  Proprietary and Confidential Information for other customer products shall be redacted at Hollister-Stier’s sole discretion.

 

4.6.

The Parties agree to the following provisions regarding adverse events and complaints:

 

4.6.1.

Client shall be responsible to (a) report adverse events involving the Product to the FDA and other Regulatory Authorities, and (b) respond to quality complaints and medical and technical inquiries, respecting the Product.

 

4.6.2.

In the event Hollister-Stier (a) receives information regarding any adverse event relating to the Product, (b) receives any complaints relating to the Product, (c) receives any medical or technical inquiry relating to the Product, or (d) discovers or is notified of any material defect in the Product, it shall (i) promptly notify Client and (ii) conduct an investigation in accordance with its normal procedures for complaints, inquiries or discoveries of that nature and promptly report the results of such investigation to Client.  The Parties shall reasonably cooperate with and assist each other, at Client's cost, in connection with any such matter.

5.

The Parties agree to the following provisions regarding Intellectual Property:

 

5.1.

Background Intellectual Property:  Nothing in this Agreement shall affect the ownership by either Party of any Intellectual Property rights owned by or in the possession of that Party at the date of this Agreement or Intellectual Property developed independently by any employee of that Party without reference to the Confidential Information disclosed by the other Party.

 

5.2.

License Grant:  Client hereby grants Hollister-Stier a nonexclusive, worldwide, royalty-free license during the term of this Agreement to use Client's Technology Package and Client's Intellectual Property rights in the performance of Hollister-Stier’s obligations under this Agreement.

 

5.3.

New Intellectual Property:  Any Intellectual Property rights arising during and as a direct result of the conduct of this Agreement shall belong to Client.  Hollister-Stier shall, and shall ensure that its employees shall, at Client’s expense, perform all acts and execute all instruments necessary to vest in Client all rights, title and interest in the registrations together with all patents and patent applications or otherwise for such Intellectual Property rights.  All fees, costs and expenses connected with the filing, prosecution and maintenance of a patent or other protection shall be borne and paid by Client.

 

5.4.

Limitation of Use:  Except as expressly stated in this Agreement, no Intellectual Property rights of any kind or nature are conveyed by this Agreement and except as set forth in Section 5.1, neither Party shall have any right, title or interest in or to the other Party’s Intellectual Property rights for any purpose whatsoever without such other Party’s prior written consent.  Upon termination of this Agreement for whatever reason, neither Party shall use or exploit in any manner whatsoever any Intellectual Property rights of the other Party.

6.

The Parties agree to the following clauses regarding indemnification for Third Party claims:

 

6.1.

Indemnification by Client:  Client shall indemnify, defend and hold Hollister-Stier, its Affiliates and their respective directors, officers, employees, agents, successors and assigns harmless from and against any damages, losses, judgments, claims, suits, actions, liabilities, costs and expenses (including, but not limited to, reasonable attorneys’ fees) (collectively, "Liabilities") resulting from any Third Party claims or suits arising out of (1) the ownership, use, handling, distribution, marketing or sale of the Product, (2) Client's breach of any of its warranties or representations, or failure to perform any of its obligations, hereunder, or (3) Client's negligent acts or omissions or willful misconduct.

 

6.2.

Indemnification by Hollister-Stier:  Hollister-Stier shall indemnify, defend and hold Client, its Affiliates and their respective directors, officers, employees, agents, successors and assigns harmless from and against any Liabilities resulting from any Third Party claims arising out of (1) Hollister-Stier's services in manufacturing, processing or assembling the Product,(2) Hollister-Stier’s  breach of any of its warranties or representations, or failure to perform any of its obligations, hereunder or (3) Hollister-Stier’s negligent acts or omissions or willful misconduct.

 

6.3.

Indemnification Procedures:

 

6.3.1.

Any Party hereto seeking indemnification hereunder (in this context the “Indemnified Party”) shall notify the other Party (in this context the “Indemnifying Party”) in writing reasonably promptly after the assertion against the Indemnified Party any claim by a Third Party (a “Third Party Claim”) in respect of which the Indemnified Party intends to base a claim for indemnification hereunder.

 

6.3.2.

(1) The Indemnifying Party shall have the right, upon written notice given to the Indemnified Party within [*****] calendar days after receipt of the notice from the Indemnified Party of any Third Party Claim, to assume the defense and handling of such Third Party Claim, at the Indemnifying Party’s sole expense, in which case the provisions of Section 6.3.2(2) below shall govern.

 

(2) The Indemnifying Party shall select counsel reasonably acceptable to the Indemnified Party in connection with conducting the defense and handling of such Third Party Claim, and the Indemnifying Party shall defend or handle the same in consultation with the Indemnified Party, and shall keep the Indemnified Party apprised of the status of the Third Party Claim.  The Indemnifying Party shall not, without the prior written consent of the Indemnified Party, which consent will not be unreasonably withheld, agree to a settlement of any Third Party Claim that could directly or indirectly lead to liability or create any financial or other obligation on the part of the Indemnified Party for which the Indemnified Party is not entitled to indemnification hereunder.  The Indemnified Party shall cooperate with the Indemnifying Party and shall be entitled to participate in the defense or handling of such Third Party Claim with its own counsel at its own expense.

 

6.3.3.

(1) If the Indemnifying Party does not give written notice to the Indemnified Party, within [*****] calendar days after receipt of the notice from the Indemnified Party of any Third Party Claim, of the Indemnifying Party’s election to assume the defense or handling of such Third Party Claim, the provisions of Section 6.3.3(2) below shall govern.

 

6.3.4.

The indemnification remedies in this Article 6 shall constitute the sole and exclusive remedies of the Parties with respect to any Third Party Claims arising under or relating to this Agreement.

 

6.4.

Limitation of Liability:  Notwithstanding any other provisions of this Agreement, Hollister-Stier's aggregate indemnification liability to Client and its Affiliates for Third Party Claims pursuant to this Article 6 shall not exceed [*****] (US $[*****]).

8.

The Parties agree to the following clauses regarding the term and termination of this Agreement:

 

8.1.

Term:  Unless terminated earlier in accordance with 8.2, 8.3 or 8.4, this Agreement shall commence on the Effective Date and shall remain in full force and effect for five (5) years thereafter.   Upon the expiration of such initial term, this Agreement shall be automatically extended in successive terms of five (5) years, unless either Party provides written notice of its intention not to allow any such extension at least two (2) years prior to the expected expiration date.

 

8.2.

Termination Without Cause:  Either Party may terminate this Agreement at any time by giving the other two (2) years prior written notice.

 

8.3.

Termination for Default:  This Agreement may be terminated by either Party in the event of material breach or default by the other Party of the terms and conditions hereof; provided, however, the other Party shall first give to the defaulting Party written notice of the proposed termination or cancellation of this Agreement, specifying the grounds therefor.  Upon receipt of such notice, with respect to such defaults as are capable of being cured, the defaulting Party shall have [*****] calendar days to respond by curing such default.  If the breaching Party does not respond or fails to work diligently and to cure such breach within such [*****] day period, then the other Party may terminate this Agreement.

 

8.4.

Bankruptcy or Insolvency:

 

8.4.1.

Either Party may terminate this Agreement upon the occurrence of any of the following with respect to the other Party:

 

8.4.1.1.

The filing of an involuntary petition under the U.S. Bankruptcy Code, or any other similar law, which is not dismissed within sixty (60) days after the filing date;

 

8.4.1.2.

The filing of a voluntary petition by such other Party for relief under the U.S. Bankruptcy Code or other similar law; or

 

8.4.1.3.

The failure of such other Party to pay its debts when they become due.

 

9.3.

Each Party covenants and agrees that it has and shall use commercially reasonable efforts to prevent the unauthorized use, disclosure, copying, dissemination or distribution of Confidential Information.  Without limiting the foregoing, the receiving Party shall make Confidential Information of the other Party available only to those of its employees, agents and other representatives who have a need to know the same for the purpose carrying out this Agreement, who have been informed that the Confidential Information belongs to the disclosing Party and is subject to this Agreement, and who have agreed or are otherwise obligated to comply with the confidentiality provisions of this Agreement.

10.

The Parties agree to the following:

 

10.1.

Effect of Force Majeure:  Neither Party shall be held liable or responsible for any loss or damages resulting from any failure or delay in its performance due hereunder (other than payment of money) caused by force majeure.  As used herein, force majeure shall be deemed to include any condition beyond the reasonable control of the affected Party including, without limitation, strikes or other labor disputes, war, riot, earthquake, tornado, hurricane, flood or other natural disasters, fire, civil disorder, explosion, accident, sabotage, lack of or inability to obtain adequate fuel, power, materials, labor, containers, transportation, supplies or equipment, compliance with governmental requests, laws, rules, regulations, orders or actions; inability despite good faith efforts to renew operating permits or licenses from local, state or federal governmental authorities; breakage or failure of machinery or apparatus; national defense requirements; or supplier strike, lockout or injunction.

 

10.2.

Notice of Force Majeure:  In the event either Party is delayed or rendered unable to perform due to force majeure, the affected Party shall give notice of the same and its expected duration to the other Party promptly after the occurrence of the cause relied upon, and upon the giving of such notice the obligations of the Party giving the notice will be suspended during the continuance of the force majeure; provided, however, such Party shall take commercially reasonable steps to remedy or mitigate the force majeure with all reasonable dispatch.  The requirement that force majeure be remedied with all reasonable dispatch shall not require the settlement of strikes or labor controversies by acceding to the demands of the opposing Party.

 

10.3.

Dispute Resolution:  The Parties hereto agree to perform the terms of this Agreement in good faith, and to attempt to resolve any controversy, dispute or claim arising hereunder in good faith.  Any dispute regarding the validity, construction, interpretation, or performance of this Agreement (other than provisions, hereof relating to any Intellectual Property rights, or the confidentiality obligations contained in Article 9 hereof) shall be (1) first attempted to be resolved between the CEO/President of each Party and failing that (2) submitted to binding arbitration in Spokane, Washington, U.S.A. to be conducted in accordance with the Arbitration Rules of the American Arbitration Association; provided, however, that nothing in this Section 10.3 shall be construed to preclude either Party from seeking provisional remedies, including, but not limited to, temporary restraining orders and preliminary injunctions, from any court of competent jurisdiction, in order to protect its rights pending arbitration, but such preliminary relief shall not be sought as a means of avoiding arbitration.  Further, in the event of a dispute under Section 4.2, the Parties shall comply with the dispute resolution provisions set forth in Article 4.  Any arbitration hereunder shall be submitted to an arbitration tribunal made up of three (3) members, one of whom shall be selected by Client, one of whom shall be selected by Hollister-Stier, and one of whom shall be selected by the other two arbitrators.  The third arbitrator selected by the first two shall chair the panel.  All arbitration proceedings shall be conducted in English.  The order or award of the arbitrators shall be reasoned and shall be final and may be enforced in any court of competent jurisdiction.  The substantially prevailing Party shall be entitled, in addition to any other rights and remedies it may have, to reimbursement for its expenses incurred thereby, including court cost and reasonable attorneys' fees, from the substantially non-prevailing Party.

12.

The Parties agree to the following miscellaneous clauses:

 

12.1.

Entire Agreement:  This Agreement and attached exhibits contain the entire understanding between the Parties with respect to the subject matter hereof and shall supersede any prior agreement(s) relating to the subject matter described herein.  This Agreement may be modified only by a written instrument duly executed by each Party’s authorized representative.

 

12.2.

Independent Contractors:  The Parties are independent contractors and nothing contained in this Agreement shall be construed to place them in the relationship of partners, principal and agent, employer/employee or joint venturers.  Neither Party shall have power or right to bind or obligate the other, nor hold itself out as having such authority.

 

12.3.

Publicity: (a) The Parties hereto covenant and agree that, except as provided for herein below, each will not from and after the date hereof make, issue or release any public announcement, press release, statement or acknowledgment of the existence of, or reveal publicly the terms, conditions and status of, the transactions contemplated herein, without the prior written consent of the other Party as to the content and time of release of and the media in which such statement or announcement is to be made; provided, however, that in the case of announcements, statements, acknowledgments or revelations which either Party is required by applicable law, regulation, court order or order of a regulatory authority to make, issue or release, the making, issuing or releasing of any such announcement, statement, acknowledgment or revelation by the Party so required to do so by law shall not constitute a breach of this Agreement if such Party shall have given, to the extent reasonably possible, not less than [*****] calendar days prior notice to the other Party, and shall have attempted, to the extent reasonably possible, to clear such announcement, statement, acknowledgment or revelation with the other Party.  The discloser shall however not be prevented from complying with said court order, order of a regulatory authority, regulatory or applicable law if the Party whose Information is being disclosed does not seek an appropriate order within the prescribed delay for the discloser to comply with the court or regulatory order, or applicable requiring disclosure.  Hollister-Stier shall not use the name of Client or any of its Affiliates for advertising or promotional purposes without the prior written consent of Client. In furtherance of the foregoing, Hollister-Stier shall not originate any publicity or other announcement, written or oral, whether to the public, the press, the trade, Client’s or Hollister-Stier's customers or otherwise, relating to this Agreement or the existence of an arrangement between the Parties, without the prior written approval of Client, except if such announcement is required by law, regulation, court order or order of a regulatory authority.

 

(b) The Parties acknowledge that Client may be required to file this Agreement as an exhibit to its public filing in 2009 or thereafter as a material contract.  If Client’s counsel determines that in its legal opinion in writing such a filing must be made, Client will seek confidential treatment for this Agreement and shall use all reasonable efforts to protect the confidentiality of this Agreement.  Provided Client is successful in its efforts to obtain confidential treatment for this Agreement, Client shall provide Hollister-Stier with a sufficient opportunity (which shall not be less than ten (10) business days) to review and comment the redacted version of the Agreement before submission; and to the extent Client is able to do so by law, Client will incorporate Hollister-Stier’s comments.

 

12.4.

Use of Party’s Name:  Except as expressly provided or contemplated hereunder and except as otherwise required by applicable law, no right is granted pursuant to this Agreement to either Party to use in any manner the trademarks or name of the other Party, or any other trade name, service mark, or trademark owned by or licensed to the other Party in connection with the performance of the Agreement.

 

12.5.

Severability:  If any provision of this Agreement or any Exhibit is held to be invalid or unenforceable to any extent, then (a) such provision shall be interpreted, construed or reformed to the extent reasonably required to render it valid, enforceable and consistent with the Parties' original intent underlying such provision and (b) such invalidity or unenforceability shall not affect any other provision of this Agreement or any other agreement between the Parties.

 

12.6.

Assignment:  This Agreement may not be assigned or otherwise transferred by either Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld, delayed or conditioned; provided, however, either Party may, without such consent, assign this Agreement:

 

(a)

in connection with the transfer or sale of all or substantially all of the assets of such Party or the line of business of which this Agreement forms a part, or

 

(b)

in the event of a merger or consolidation of a Party, or

 

(c)

to an Affiliate.

Definitions

[*****]

Telephone:  [*****]

Fax:   ###-###-####

[*****]

Telephone:  [*****]

Fax:  [*****]

[*****]

Telephone: [*****]

Fax: 617 ###-###-####

[*****]

Telephone:  [*****]

Fax:  [*****]

[*****]

Telephone: [*****]

Fax: 617 ###-###-####

[*****]

Telephone:  [*****]

Fax:  [*****]

[*****]

Telephone:  [*****]

Fax:   ###-###-####

[*****]

Telephone:  [*****]

Fax:  [*****]

[*****]

Telephone: [*****]

Fax:  [*****]

Notification of Regulatory Agencies and Regulatory Submissions

X

Annual Product Review

X

X

Internal Audits

X

Process Qualification/Validation

x

X

Training and Qualification

X

Supplier Qualification

X

Change Controls

X

X

Deviations/Investigations/OOSs

X

X

Environmental Controls

X

Retention Samples

X

X

Stability Program

X

Release of Product

X

Recall of Marketed Product

X

X