Document:

EX-10.9

Exhibit 10.9

INTANGIBLE ASSET LICENSE AGREEMENT

     This INTANGIBLE ASSET LICENSE AGREEMENT (this “Agreement”), dated as of June 13, 2008, is by
and between MS Real Estate Management Company (“Licensor”) and Martha Stewart Living Omnimedia,
Inc. (the “Company”).

     WHEREAS, Licensor has the right to license the intangible asset consisting of Martha Stewart’s
lifestyle. Licensor’s lifestyle intangible asset encompasses Martha Stewart’s lifestyle and the
public perception of Martha Stewart’s lifestyle. It includes, but is not limited to: real property
that Martha Stewart owns directly or indirectly as of the date hereof (the “Real Property”
or “Real Properties,” including without limitation
each of (a) [Address Withheld], Katonah, New York, (b) [Address Withheld], East Hampton, New York,
and (c) [Address Withheld], Seal Harbor, Maine, but excluding any Subsequently-Acquired Real
Property (as defined below) that is not an Elective Real Property (as defined below)); the design
of and the furnishings and finishings contained in the structures located on the Real Properties;
the manner in which Martha Stewart selects, designs and arranges the finishings and furnishings
contained in the structures located on the Real Properties; the inventory of home furnishings
Martha Stewart has acquired and maintains for use in the structures located on the Real Properties;
the color schemes, fabrics, art, linens, glassware, appliances in the kitchens in the structures
located on, and the gardens located on, the Real Properties, which Martha Stewart designs and
maintains; the outdoor furniture located on the Real Properties; and any other items that
contribute to the visible appearance and impression of the Real Properties (collectively, the
“Lifestyle Intangible Asset”).

     NOW, THEREFORE, in consideration of the mutual premises set forth herein, and for such other
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

     1. The Company’s Acknowledgment of Licensor’s Rights. The Company hereby acknowledges
that (a) Martha Stewart exclusively owns all right, title and interest throughout the world (the
“Territory”) in and to the Lifestyle Intangible Asset, which Lifestyle Intangible Asset has
intrinsic value, and (b) Licensor and Martha Stewart otherwise reserve all rights to the Lifestyle
Intangible Asset except those specifically granted to the Company herein (provided, however, that
this reservation of rights shall not alter in any manner the Company’s rights under that certain
Intellectual Property License and Preservation Agreement dated as of October 22, 1999 between
Martha Stewart and the Company (the “IP License
Agreement”)). Licensor represents and
warrants to the Company that, as of the date hereof, it has the power and authority to license the
Lifestyle Intangible Asset on the terms and conditions of this Agreement.

     2. Term. The term of this Agreement shall be deemed to have commenced on September 18,
2007 and shall continue until the fifth anniversary of such date, unless this Agreement is
terminated pursuant to Section 10 hereof.

     3. Consideration. During the term of this Agreement, in consideration for the license
provided by this Agreement, the Company shall pay Licensor, or an entity designated by Licensor in
writing, an annual license fee of $2,000,000 (the “Annual License Fee”). The

 

 

Company shall pay the Annual License Fee in advance in a lump sum for each of the future years on
or about each successive September 15. For the current year, $850,000 of the current Annual License
Fee has been paid by the Company, with the balance of $1,150,000 due and owing.

     4. Use of the Lifestyle Intangible Asset.

     (a) Subject to the terms and conditions of this Agreement, Licensor hereby licenses to the
Company the perpetual, exclusive right to use, and to authorize others to use (subject to
Licensor’s consent right set forth in Section 4(e)), pursuant to the terms hereof, throughout the
Territory on or in connection with any products and services of the Company (such products and
services (including the magazine Martha Stewart Living) are referred to herein as the
“Licensed Products” and the “Licensed Services”) all elements of the Lifestyle
Intangible Asset as such exist at any time during the term of this Agreement. For avoidance of
doubt, after the expiration or termination of this Agreement, the Company shall not have any right
to utilize any elements of the Lifestyle Intangible Asset that did not exist as of the date of such
expiration or termination (“Post-Term Elements”), but shall have the perpetual license to
use, and to authorize others to use, the Lifestyle Intangible Asset exclusive of Post-Term
Elements, in accordance with the foregoing sentence.

     (b) During the term of any license pursuant to this Agreement, the Company shall use
commercially reasonable efforts to preserve the historical goodwill of the Lifestyle Intangible
Asset. All use of the Lifestyle Intangible Asset by the Company or any sublicense thereof shall
inure solely to the benefit of Licensor. The use of the Lifestyle Intangible Asset by the Company
or any sublicense thereof shall be of a quality at least substantially consistent with the
Historical Standard (as defined below); provided that any use of the Lifestyle Intangible
Asset by the Company while Martha Stewart is in Control (as defined below) shall be conclusively
presumed to meet the Historical Standard. The “Historical
Standard,” as of any date, shall
mean the quality, style and image of the Licensed Products or Licensed Services as the Lifestyle
Intangible Asset has been used by the Company through the earlier of (1) such date or (2) the date
that Martha Stewart ceases to be the owner, directly or indirectly, of in excess of 50% of the
outstanding voting power of the Company (the circumstances in clause (2) immediately preceding
being referred to as “Control,” and such period being referred to as the “Historical
Period”). At any time that Martha Stewart is not in Control (other than due to a Termination
Trigger, as defined in Section 10), (i) subject to Licensor’s prior written approval, which shall
not be unreasonably withheld or delayed, the Company may continue to use the Lifestyle Intangible
Asset in connection with new businesses not planned or developed while Martha Stewart was in
Control, and (ii) the Company may develop, use and register new derivatives of the Lifestyle
Intangible Asset not developed while Martha Stewart was in Control, so long as such new derivatives
and Derived Marks (as defined in Section 7(a)) are substantially consistent with the image, look
and goodwill of the Lifestyle Intangible Asset at the time when Martha Stewart ceased to be in
Control or to which Licensor has consented in writing (such businesses and derivatives, “New
Uses”). For clarity, reasonable extensions of the lines of business in which the Company is
engaged or planned to be engaged at any time that Martha Stewart is in Control shall not be
considered New Uses and shall be included in the license contained herein. After Martha Stewart’s
death or disability, the Company may use the Lifestyle Intangible Asset for additional New Uses,
provided that any such businesses and derivatives are substantially consistent with the
image, look and goodwill of the Lifestyle Intangible Asset at the

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time at which Martha Stewart ceased to be in Control, or to which Licensor has consented in
writing. The Company shall keep Licensor advised of any New Uses in a timely manner, so that such
entity may confirm the Company’s compliance with the terms hereof.

     (c) [Intentionally Omitted]

     (d) Subject to the terms and conditions of this Agreement, Licensor hereby grants to the
Company the exclusive right to use and exploit in any and all media now known or which may in the
future be invented the Lifestyle Intangible Asset as it appears in any and all television programs
and/or videos (including content developed for the Company’s online businesses) produced by or for
the Company (or its predecessor), whether such television programs and/or videos were produced,
aired, marketed or sold prior to, on, or after, the date of this Agreement, provided that
the grant in this sentence shall be limited to the use of such programs and/or videos (i)
substantially as a whole (it being acknowledged and understood that the Company shall have the
right to edit such programs and/or videos for time and commercials and to add bumpers and
introductions), (ii) as part of a collection or similar compilation (such as “Best of” programs or
videos) of Martha Stewart appearances, (iii) in any other manner used by the Company while Martha
Stewart was in Control or (iv) regarding excerpts of such programs and/or videos, as part of the
advertising, promotion and/or marketing of any of the foregoing.

     (e) To the extent that the Company desires access to the Real Properties in order to utilize
the Lifestyle Intangible Asset, the Company shall provide reasonable notice of the intended dates
and manner of use and the parties shall cooperate therewith; provided that Licensor shall provide
the Company with any such requested access to the Real Properties in a manner consistent with past
practice pursuant that certain Location Rental Agreement dated as of September 17, 2004 between
Martha Stewart and the Company (the “Location Rental Agreement”), which Location Rental
Agreement was extended by a letter agreement on September 18, 2007, and applicable law; and
provided further that Licensor may deny access to the Real Properties to Company’s sublicensees
other than those entities with which the Company has a bona fide business relationship involving
matters other than the Real Properties at its sole discretion, and further provided that Licensor
maintains a reasonable right to review and object to an excessive number of staff proposed for any
such use.

     (f) To the extent that the Licensor incurs any expenses in connection with the Company’s use
of the Lifestyle Intangible Asset or any element of the Lifestyle Intangible Asset (including
without limitation any costs associated with cleaning, arranging and maintenance of any items
within the Lifestyle Intangible Asset), Licensor shall bear such costs; provided that the
Company shall be responsible for (i) all film, video, photography and other production costs it
incurs or authorizes in writing related to its use of the Lifestyle Intangible Asset and (ii) such
other costs as may be approved in advance by the Company in writing, within any budget limitations
that may be specified in such approval.

     (g) Subject to the terms of this Agreement, Licensor shall, at its expense, cause the Real
Properties to be maintained, landscaped, gardened and developed in a manner generally consistent
with past practice; provided that the Company (i) shall be responsible for Company-approved costs
associated with those business expenses set forth on Schedule A hereto, and (ii) shall
reimburse Licensor for up to $100,000 in approved and documented household expenses associated with
the Real Properties.

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     (h) Notwithstanding any other provision of this Agreement, but subject to any employment
or other agreement that Licensor may have from time to time with the Company, the license provided
herein shall not prohibit Licensor or Martha Stewart from using the Lifestyle Intangible Asset to
endorse products or engage in other business activities other than those covered by this Agreement,
including the exclusivity provisions hereof.

     (i) Any sublicense by the Company of the Lifestyle Intangible Asset shall contain
protections with respect to the Lifestyle Intangible Asset consistent with the terms hereof and
shall acknowledge that such sublicensee does not obtain any ownership rights in, or goodwill to,
the Lifestyle Intangible Asset.

     5. Termination Trigger License. Upon a Termination Trigger, the Company shall
automatically be deemed to have granted Licensor an exclusive, perpetual, worldwide, royalty free,
sub-licensable license to use the Lifestyle Intangible Asset as, or as part of, a trademark,
service mark or trade name, for any goods or services Licensor desires, to the extent, if any, that
said mark or name is likely to cause confusion with or otherwise infringe or violate the Company’s
rights in any mark or name the Company owns (the “Termination Trigger License”). The
Termination Trigger License shall include, without limitation, the right to use the Lifestyle
Intangible Asset in connection with any goods or services which compete directly with goods or
services of the Company. Notwithstanding the foregoing, Licensor shall not have the right to use
any mark or name which is identical to any mark or name owned by the Company. The quality of
Licensor’s goods and services sold pursuant to the Termination Trigger License (the “Licensor
Goods/Services”) shall be of at least the same kind of quality as goods and services sold by
the Company as of the date of the Termination Trigger, and the Company shall have the right to take
reasonable steps to monitor the quality of the Licensor Goods/Services. Upon Licensor’s reasonable
request, the Company shall use its commercially reasonable best efforts to register trademarks
and/or service marks which are the subject of the Termination Trigger License and shall take
reasonable steps to maintain any such registrations, in the Company’s name and at the Company’s
sole expense. The Company shall, at its expense, take any action reasonably requested by Licensor
to protect any trademark, service mark or trade name which is the subject of the Termination
Trigger License.

     6. Quality, Style and Image of Products and Services Provided in Connection with Lifestyle
Intangible Asset. At any time Martha Stewart is not in Control, upon reasonable request and to
the extent necessary to protect Licensor’s rights under this Agreement, Licensor shall have the
right to request and receive, at no cost to Licensor, a sample of each Licensed Product and
Licensed Service, as well as a prototype of each type of all promotional, advertising and marketing
material used in connection therewith, for the purpose of evaluating the quality, style and image
of the same. In the event that in Licensor’s reasonable and good faith judgment, any Licensed
Product or Licensed Service fails (other than in an immaterial manner) to satisfy the Historical
Standard, then promptly upon written notice by Licensor to the Company, the Company and Licensor
shall cooperate in good faith to make necessary appropriate changes (if any) in the quality, style
or image of such Licensed Product or Licensed Service to comply with the standard provided for
herein; provided that nothing in this sentence shall be deemed to affect the substantive
rights and obligations of the parties hereunder.

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     7. The Derived Marks.

     (a) Subject to the terms hereof, including Section 4, the Company may combine any designation
with the Lifestyle Intangible Asset so as to form a new trademark, service mark, trade name or
company name (such trademark, service mark, trade name or company name, the “Derived
Marks”). The Derived Marks may include any names or marks used by the Company prior to the date
hereof which include or are derived from the Lifestyle Intangible Asset. Subject to the terms of
this Agreement, the Company shall be the owner of the Derived Marks (but not of the Lifestyle
Intangible Asset incorporated therein).

     (b) The Company acknowledges that it is not, and will not become by virtue of this Agreement,
the owner of any right, title or interest in and to the Lifestyle Intangible Asset in any form or
embodiment. The Company shall not at any time commit any act anywhere in the world which would
reasonably be expected to have a material adverse effect on Licensor’s rights in and to the
Lifestyle Intangible Asset, or any registrations therefor or any applications for registration
thereof. The Company shall never challenge anywhere in the world Martha Stewart’s ownership of or
the validity of the Lifestyle Intangible Asset, any application for registration therefor or any
rights therein or thereto, except as otherwise expressly provided herein.

     (c) The Company, at its expense, shall file appropriate registrations in its own
name or in the name of a Company subsidiary or affiliate of any Derived Marks so as to
preserve
the goodwill thereof and Licensor’s rights in the Lifestyle Intangible Asset, shall prosecute
and
defend such registrations and all common law rights in the Derived Marks and Lifestyle
Intangible Asset consistent with good commercial practices, and shall use all reasonable
commercial efforts to defend and otherwise protect the Derived Marks and the Lifestyle
Intangible Asset, provided that following the a Termination Trigger, Licensor shall
have the right
to reasonably direct and control such actions with respect to the Lifestyle Intangible Asset,
in
each case at the Company’s expense. At the request of Licensor, and at the Company’s expense,

the Company shall prosecute, including by filing lawsuits or other actions, any potential
infringement, dilution, libel, slander or other diminution in the goodwill or other
denigration of
the Lifestyle Intangible Asset by any third party, unless outside intellectual property
counsel to
the Company advises that there is no reasonable basis for such action. The Company shall be
entitled to the proceeds, or other legal remedies, of any such action. The Company may also
institute such actions where not requested by Licensor in the event the Company determines
that
the protection of the Lifestyle Intangible Asset or the Derived Marks reasonably requires such
action. In the event that the Company learns of any infringement or other violation of rights
in
or to the Lifestyle Intangible Asset, it shall promptly notify Licensor thereof.

     (d) At Licensor’s request, the Company shall execute all documents
reasonably requested by Licensor to confirm Martha Stewart’s ownership of rights in and to the
Lifestyle Intangible Asset. The Company shall cooperate at Licensor’s reasonable request in
connection with the filing and prosecution of applications to register intellectual property
rights
in the Lifestyle Intangible Asset and in connection with the maintenance and renewal of such
registrations as may issue. Licensor and the Company shall cooperate in good faith, taking
into
account their respective interests in and rights to the Lifestyle Intangible Asset, to
determine
whether or not such applications are filed and prosecuted and registrations are maintained.
The
Company shall pay all costs and expenses of any such filings or proceedings.

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     (e) If one party hereto reasonably requests of the other to take an action in connection with
the foregoing, the other party shall cooperate in connection with any such action, including,
without limitation, by being a plaintiff or co-plaintiff and by causing its officers, directors,
and employees to execute documents and to testify. If the Company desires to take action with
respect to a violation or infringement of the Lifestyle Intangible Asset, it shall consult with
Licensor and shall not take actions which Licensor reasonably requests not to be taken. All costs
and expenses of the actions described in this Section 7(e) shall be borne by the Company.

     (f) The Company shall take actions to protect the Derived Marks and the goodwill related
thereto consistent with the provisions of this Section.

     8. Indemnity.

     (a) The Company hereby saves and holds Licensor, its successors and assigns, and Martha
Stewart, her heirs, estate, successors and assigns (the “Indemnified Parties”) harmless of
and from, and indemnifies and agrees to defend them against any and all losses, liability, damages
and expenses (including, without limitation, reasonable attorney’s fees and expenses) which they
may incur or be compelled to pay, or for which they may become liable or be compelled to pay in any
action, claim or proceeding against any of the Indemnified Parties, for or by reason of any acts,
whether of omission or commission, that may be committed or suffered by the Company or any of its
officers, directors, employees, agents or servants (other than the Indemnified Parties) in
connection with the Company’s performance of its obligations under this Agreement, the use
(including sublicensing) of the Lifestyle Intangible Asset and the Derived Marks or the breach by
the Company of any covenant contained herein. The indemnification rights provided for herein shall
also apply to any use by the Company of the Lifestyle Intangible Asset or any Derived Marks prior
to the date hereof.

     (b) In the event that an Indemnified Party receives notice of a claim as to which
indemnification is sought, such party shall reasonably promptly notify the Company thereof, except
that the failure to so notify shall not exempt the Company from its obligations hereunder, except
to the extent that such failure has actually prejudiced the Company’s legal position with respect
to the claim. Upon receipt of notice, the Company shall advise the Indemnified Party that it has
assumed the defense thereof. The Indemnified Party shall have the right, at the expense of the
Company, to retain legal counsel to participate in and monitor the defense of the claim,
provided that the Company shall have the right to direct and control such defense. The
Company shall not, without Licensor’s written consent, settle or compromise any claim or consent to
entry of any judgment which does not include as an unconditional term thereof the giving by the
claimant or the plaintiff to the Indemnified Party of a release from all liability in respect of
such claim, nor shall the Company settle or compromise any claim relating to the Lifestyle
Intangible Asset or the Derived Marks which would limit the use by Licensor of the Lifestyle
Intangible Asset in any manner whatsoever without Licensor’s consent.

     (c) The Company shall maintain in effect at all times errors and omissions insurance, in
customary amounts taking into account the size of the Company, the value of the Lifestyle
Intangible Asset and the obligations of the Company hereunder, and shall name Martha Stewart,
Licensor and the other Indemnified Parties hereunder as beneficiaries thereof for purposes of this
Agreement.

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     9. Sale or Purchase of Real Properties.

     (a) At any time during the term of this Agreement, Licensor, Martha Stewart and any entity she
directly or indirectly controls may sell any of the Real Properties without the consent of the
Company. Subject to the next sentence of this subsection 9(a), such sale shall not affect the
obligations of the Company under Section 3 of this Agreement. Notwithstanding the foregoing, in the
event that Licensor, Martha Stewart or any entity she directly or indirectly controls sells a
significant portion (based on the Company’s use of such Real Properties) of the Real Properties
and, due to such sale, the Company is required to pay money for the use of additional locations
owned by other parties to conduct its business, Licensor and the Company shall, in good faith,
agree to adjust the Annual License Fee, taking into account any increased costs incurred by the
Company and any increased use (compared to such use on the date hereof) by the Company of (i) the
remaining Real Properties that on the date hereof were owned directly or indirectly by Martha
Stewart and (ii) any Elective Real Properties.

     (b) If at any time during the term of this Agreement, Martha Stewart directly or indirectly,
including through Licensor, acquires any real property (each a “Subsequently-Acquired Real
Property”), Licensor may in its sole discretion offer the Company the right to include such
Subsequently-Acquired Real Property within the Lifestyle Intangible Asset by giving the Company
written notice of such offer. Upon receipt of such notice, the Company shall have the right in its
sole discretion to accept the offer to include such Subsequently-Acquired Real Property within the
Lifestyle Intangible Asset by giving Licensor written notice of such acceptance (in the event of
such an offer and acceptance, such Subsequently-Acquired Real Property shall be referred to herein
as an “Elective Real Property”). In the event a Subsequently-Acquired Real Property becomes
an Elective Real Property as set forth in the preceding sentence, Licensor and the Company shall,
in good faith, agree to adjust the Annual License Fee to reflect the additional value derived by
Company from access to the Elective Real Property. It is expressly understood and agreed that
Martha Stewart is under no obligation to either directly or indirectly, including through Licensor,
acquire any additional real property or to offer to include any Subsequently-Acquired Real Property
within the Lifestyle Intangible Asset if acquired and the Company is under no obligation to accept
an offer by Licensor to include any Subsequently-Acquired Real Property within the Lifestyle
Intangible Asset.

     10. Termination. Notwithstanding Section 2, the term of this Agreement shall
terminate upon any termination of Martha Stewart’s employment with the Company. If the
Company terminates Martha Stewart’s employment other than for Cause (as defined in the
Employment Agreement dated as of September 17, 2004 between Martha Stewart and the
Company or any replacement or successor agreement thereto (the “Employment
Agreement”), or
if Martha Stewart terminates her employment for Good Reason (as defined in the Employment
Agreement) (such a termination, a “Termination Trigger”), then all sums otherwise due
to
Licensor under this Agreement during the remainder of the term specified in Section 2 shall
accelerate and become immediately payable by the Company and this Agreement shall
terminate. If the Company terminates Martha Stewart’s employment for Cause (as defined in the
Employment Agreement), or Martha Stewart terminates her employment other than for Good
Reason (as defined in the Employment Agreement), then this Agreement shall immediately
terminate and the Company shall owe no amounts pursuant to Section 3 hereof with respect to
any time period from and after the date of such termination (and in the event any such amount
was paid in advance, Licensor shall promptly (and in any event within thirty (30) days of such

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termination) return such amount to the Company). Termination of this Agreement for any reason shall
not affect (i) the indemnity and other obligations of the Company hereunder that reasonably should
be understood to survive the termination of this Agreement, nor (ii) obligations of Licensor
hereunder that reasonably should be understood to survive the termination of this Agreement,
including those set forth in Sections 4(b), 5 and 8(b).

     11. Certain Remedies. The parties agree that the remedies at law for any material
breach or threatened material breach of this Agreement, including monetary damages, are inadequate
compensation for any loss and that the non-breaching party shall be entitled to seek specific
performance of this Agreement. The parties hereto waive any defense to such claim that a remedy at
law would be adequate. In the event of any actual or threatened material default in, or material
breach of, any of the terms hereof, the party aggrieved thereby shall have the right to seek
specific performance and injunctive or other equitable relief with respect to its rights hereunder,
in addition to any remedies available at law.

     12. Miscellaneous.

     (a) This Agreement shall be governed by, and construed in accordance with, the laws of the
State of Delaware, without reference to principles of conflict of laws. The captions of this
Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement
may not be amended or modified except by a written agreement executed by the parties hereto or
their respective successors and legal representatives.

     (b) This Agreement is assignable by the Company to any successor of the Company which acquires
all or substantially all of the assets or businesses of the Company or to an acquiror, whether by
sale, merger, recapitalization or other business combination, of all or substantially all of the
assets or businesses of the Company without Licensor’s consent, provided that any such
successor or assignee shall provide Licensor with a written agreement that it shall be bound by all
the terms of this Agreement. This Agreement shall be assignable by Licensor to any entity
controlled by Martha Stewart, her heirs, or her estate and inure to the benefit of and be binding
upon the successors, legal representatives, and assigns of Licensor. Except as specified in this
subsection 12(b), this Agreement is not assignable.

     (c) All notices and other communications under this Agreement shall be in writing and shall be
given by hand delivery to the other party or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:

If to the Licensor:

MS Real Estate Management Company

[Address Omitted]

Attention: Heidi DeLuca

If to the Company:

Martha Stewart Living Omnimedia, Inc.

20 West 43rd Street

 New York,
New York 10036

Attention: General Counsel

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or to such other address as either party furnishes to the other in writing in accordance with this
Section. Notices and communications shall be effective when actually received by the addressee.

     (d) The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement. If any provision of this
Agreement shall be held invalid or unenforceable in part, the remaining portion of such provision,
together with all other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with law.

     (e) Licensor and the Company acknowledge that this Agreement supersedes any other agreement
between them concerning the subject matter hereof; provided that this Agreement does not amend or
modify in any respect any terms of the Employment Agreement or the IP License Agreement.

     (f) This Agreement may be executed in several counterparts, each of which shall be deemed an
original, and said counterparts shall constitute but one and the same instrument.

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     IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement to be executed in its
name on its behalf, all as of the day and year first above written.

	 	 	 	 	 
	 	MS REAL ESTATE MANAGEMENT COMPANY

 	 
	 	By:  	/s/ Martha
Stewart
 	 
	 	 	Name:  	Martha
Stewart 	 
	 	 	Title:  	 	 
	 
	 	MARTHA STEWART LIVING OMNIMEDIA, INC.

 	 
	 	By:  	/s/ Wenda Harris Millard
 	 
	 	 	Name:  	Wenda Harris Millard 	 
	 	 	Title:  	Co-Chief Executive Officer 	 
	 
	 	 	 
	 	By:  	                                        /s/ Robin Marino
 	 
	 	 	Name:  	Robin Marino  	 
	 	 	Title:  	Co-Chief Executive Officer 	 
	 

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SCHEDULE A

Security System — Cost for security system upgrade, repairs and monitoring

Security Personnel — Costs for physical security personnel at the properties for the
protection of
Martha Stewart, personally

Phone System — Costs for phone system upgrade, repairs and monthly use

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Exhibit 10.3

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.

Supply Agreement

     This Supply Agreement (the “Agreement”) is made as of the 7th day of July,
2008 (the “Effective Date”) by and between Biodel Inc., a Delaware corporation (“Biodel”), with its
principal office and place of business at 100 Saw Mill Road, Danbury, CT 06810, U.S.A., and N.V.
Organon, a Dutch company (“Organon”) with its principal office and place of business at
Kloosterstraat 6, 5349 AB OSS, The Netherlands (each of Biodel and Organon, a “Party” and together,
the “Parties”).

RECITALS

     Whereas, Biodel is a development stage specialty biopharmaceutical company focused on the
development and commercialization of innovative treatments for endocrine disorders, such as
diabetes;

     Whereas, Organon is in the business of manufacturing and supplying active
pharmaceutical ingredients, including the Product (as defined below);

     Whereas, Biodel and Organon now desire to enter into this Agreement to provide the
terms and conditions upon which Organon shall manufacture for and supply to Biodel the Product.

Agreement

     Now Therefore, in consideration for the covenants set forth below, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as set forth below.

1. Certain Definitions.

     1.1 “Additional Quantities” means any quantities for which Biodel has issued a Purchase Order
in accordance with § 4.2.

     1.2 “Affiliate” means, with respect to any Party, another entity or person which directly or
indirectly, is controlled by, or controls, or is under common control with such Party, where, for
purposes of this definition, the term “control” means ownership, directly or indirectly, of more
than 50% of the shares of stock entitled to vote for the election of directors, in the case of a
corporation, or more than 50% of the equity interests in the case of any other type of legal
entity, status as a general partner in any partnership, or any other arrangement whereby a Party
controls or has the right to control the Board of Directors or equivalent governing body of a
corporation or other entity, or if such level of ownership or control is prohibited in any country,
any entity owning or controlling at the maximum control or ownership right permitted in the country
where such entity exists.

     1.3 “Technical Change” means, with respect to the Product, any change, including without
limitation to the Specifications, the manufacturing process, the manufacturing facility and
equipment etc., that requires a notification by either or both of the Parties to, or approval from,
the relevant authorities with respect to the End Product(s).

 

 

     1.4 “Confidentiality Agreement” means the confidentiality agreement between the Parties as
executed concurrent with this Agreement and attached hereto as Exhibit C.

     1.5 “Confidential Information” means any confidential or proprietary information of a Party
disclosed to the other Party or generated in the course of this Agreement, including inventions,
know-how, works of authorship, software, data, software tools, designs, schematics, plans or other
information relating to any work in process, future development, engineering, manufacturing,
marketing or business plan, or financial or personnel matters relating to either Party, its present
or future products, sales, suppliers, customers, employees, investors or business, however
excluding any such information disclosed by Organon to Biodel under the Confidentiality Agreement,
which is and remains governed thereby.

     1.6 “CPR” means the International Institute for Conflict Prevention & Resolution.

     1.7 “End Product(s)” means Biodel’s proprietary VIAdelTM insulin formulations, as developed by
Biodel and used, distributed and/or sold solely in the Territory.

     1.8 “Excluded Countries” means Australia, Bangladesh, Bhutan, Brunei, Burma, Cambodia, China
P.R., Hong Kong, India, Indonesia, Israel, Laos, Malaysia, Maldive Islands, New Zealand, Pakistan,
Philippines, Poland, Singapore, South Korea, Sri Lanka, Taiwan, Thailand and Vietnam.

     1.9 “Fixed Quarterly Quantities” means the fixed quantities of Product, measured in kilograms,
that are described in § 4.1.

     1.10 “Current Good Manufacturing Practice” or “cGMP” means the methods to be used in, and the
facilities or controls to be used for, the manufacture, processing, packing, or holding of a drug
to assure that such drug meets the regulatory requirements of the United States Food and Drug
Administration and as further defined in 21 C.F.R. Parts 210 and 211 and the guidance of the Center
for Drug Evaluation and Research (“CDER”) and the Center for Biologics Evaluation and Research
(“CBER”), and the European Commission Directive 2003/94/EC of October 8, 2003.

     1.11 “Intellectual Property Rights” means any and all rights in and to discoveries, concepts,
ideas, technical information, developments, specifications, methods, drawings, designs, flow
charts, diagrams, models, formulae, procedures, processes, schematics, specifications, algorithms,
apparatus, inventions, ideas, know- how, materials, techniques, methodologies, modifications,
improvements, works of authorship and data (whether or not protectable under patent, copyright,
trade secrecy or similar laws), including patents, utility models, and registered and unregistered
designs, including mask works, copyrights, trade secrets, design history, manufacturing
documentation, and any other form of protection afforded by law to inventions, models, designs,
works of authorship, databases or technical information and applications and registrations with
respect thereto.

     1.12 “Material Change to Organon’s Current Manufacturing Operations” means a change or
modification to the form, fit, function, method or process of manufacture or production of the
Product hereunder which (x) would reasonably be expected to require any new regulatory filing(s)
with respect to the Product and/or Organon’s other customer’s end products

- 2 -

 

or (y) could affect the safety, efficacy or quality of the Product and/or Organon’s other
customer’s end products.

     1.13 “Non-conforming Product” means Product that does not conform to the Specifications, the
Quality Agreement, or is not free and clear of all liens, claims and encumbrances upon delivery.

     1.14 “Product” means Recombinant Human Insulin manufactured for and supplied to Biodel under
this Agreement for use in its manufacturing process of the End Product(s).

     1.15 “Purchase Order” means a purchase order that is issued by, and binding on, Biodel and to
be accepted by Organon for the purpose of obtaining the Product under this Agreement, all in
accordance with § 4.3.

     1.16 “Quality Agreement” means a separate agreement, executed in accordance with § 8.3 of the
Agreement, between the Parties which shall be incorporated herein by reference, and following its
execution shall be attached hereto and made a part hereof as Exhibit B, and which sets forth, among
other things, the quality control and quality assurance terms for the Product. In case of a
discrepancy between this Agreement and the Quality Agreement, as to quality matters the terms of
the Quality Agreement shall govern; otherwise the provisions of this Agreement shall prevail.

     1.17 “Specifications” means the technical specifications for the Product, as further described
in Exhibit A.

     1.18 “Territory” means all countries in the world except the Excluded Countries.

2. Performance Obligations

     2.1 Supply.

          (a) Performance. Organon shall manufacture and supply the Product in accordance with the
Specifications, Quality Agreement, and all applicable laws and regulations. Organon shall perform
its activities in accordance with professional standards and practices, including, but not limited
to, cGMP. Organon shall provide cGMP facilities as well as resources for such services, including,
but not limited to, testing, release, storage, and manufacture of the Product. Biodel shall
provide, upon request and only for use in accordance with the terms of this Agreement, Organon with
any information that Organon reasonably requires to perform its obligations under this Agreement.

          (b) Subcontracting. Notwithstanding § 13.1, neither Party shall delegate or subcontract the
performance of activities under this Agreement to third party subcontractors without the prior
written consent of the other Party, provided (i) that such consent shall not be required to the
extent Organon is entitled, without Biodel’s consent, to delegate or subcontract pursuant to the
Quality Agreement, and (ii) that such consent shall not be unreasonably withheld if (a) the
delegating or sub-contracting Party controls the performance of such activities and remains fully
responsible to Organon for the performance of such activities and any breach of this Agreement by
such third party subcontractor, and (b) the third party subcontractor agrees in

- 3 -

 

writing to comply with confidentiality restrictions at least as stringent as those set forth
in this Agreement.

     2.2 Regular Communication. Both Parties shall (i) be available for a reasonable number of
telephone and written consultations on a schedule to be determined by mutual arrangement between
the Parties, and (ii) shall respond to all telephone and written (e.g. letters, e-mail, fax)
communications from the other Party within ten (10) business days or as otherwise reasonably
requested.

     2.3 Regulatory Approval.

          (a) Applications for Approval. Up until [**] from termination or expiry of this
Agreement, the Parties shall cooperate diligently and in good faith to obtain any and all necessary
approvals and permits for the Product and/or the End Product(s) in the Territory, provided that,
with respect to all End Product(s) other than (i) Biodel’s proprietary insulin formulation known as
VIAjectTM and/or (ii), with respect to the US and the EU only, any second proprietary insulin
formulation as requested by Biodel prior to the termination or expiry of this Agreement, and
subsequently approved by Organon, which approval shall not be unreasonably withheld, Organon shall
only be obligated to support Biodel in its efforts to obtain such approvals and permits for
clinical trials up to and including clinical Phase 2. Biodel shall inform Organon timely of its
intention to perform clinical trials or obtain marketing approval anywhere in the Territory, as to
reasonably enable Organon to fulfill its obligations set out above.

          (b) Maintenance. Organon shall, with respect to VIAjectTM and/or any second
formulation as approved by Organon in accordance with the foregoing, cooperate diligently and in
good faith support Biodel in maintaining any marketing approval that (a) has been accepted for
review by the relevant regulatory authority prior to the date that lies [**] from termination or
expiry of this Agreement and/or (b) is obtained prior to the date that lies [**] from termination
or expiry of this Agreement.

          (c) Costs. Each Party shall bear all costs incurred by it and shall pay all costs,
consistent with industry practice, associated with obtaining such approvals or permits for the
Product and/or End Product(s).

          (d) Drug Master File for the Product. Without detracting from Biodel’s sole
responsibility for any regulatory and other filings with respect to the End Product(s) anywhere in
the Territory, including without limitation in the EU, unless mutually agreed to between the
Parties in good faith, (i) in connection with applications for End Product(s) in the Territory
other than the EU, Organon shall, subject to the limitations set forth in this § 2.3 and to the
extent required by applicable laws and regulations, file and maintain the drug master file(s) for
the Product, and (ii) in connection with applications for End Product(s) in the EU, Organon shall
subject to the limitations set forth in this § 2.3 and pursuant to the Confidentiality Agreement,
provide such information to Biodel as is necessary to prepare and maintain the ‘Drug Substance
Quality Section’ of the ‘Common Technical Documents’ that form part of such application(s).

          (e) Inspections. Subject to the limitations set forth in this § 2.3, Organon shall
provide access to the manufacturing facility and pertinent information to inspectors from

- 4 -

 

regulatory agencies conducting inspections in connection with applications and permits
relating to End Product(s).

     2.4 Regulatory Compliance. In performing its obligations hereunder each Party shall comply
with all applicable federal, state, municipal, or local laws, rules, regulations, orders, decisions
or permits of any relevant jurisdiction relating to matters including, but not limited to
employment, safety, health, environmental standards and requirements, non-discrimination, equal
employment opportunity, import/export and privacy protection.

3. Ownership Rights

     3.1 Ownership Rights. Each Party shall retain ownership and control of their respective works
of authorship, inventions, know-how, information, data, and all Intellectual Property Rights
therein that were in existence as of the Effective Date or are created hereafter, whether or not in
the course of the performance of its obligations under this Agreement. The Parties hereby
acknowledge that neither Party has, nor shall it acquire, any interest in any of the other party’s
Intellectual Property unless otherwise expressly agreed to in writing.

     3.2 Reservation of Rights. Except for the rights expressly provided in this Agreement, no
other rights are granted by either Party to the other Party. Notwithstanding anything to the
contrary, no rights or licenses are granted under this Agreement by either Party to the other for
the use of any trade names, trademarks, and service marks.

4. Sale and Purchase Terms

     4.1 Purchase.

          (a) Fixed Quarterly Quantities. Subject to the other provisions of this Agreement and
unless otherwise agreed upon by the Parties, Organon shall sell and deliver to Biodel and its
Affiliates, and Biodel and its Affiliates shall purchase from Organon, for use only in Biodel’s End
Product(s), one hundred percent (100%) of the Fixed Quarterly Quantities for the Product as
provided in the table below.

	 	 	 	 	 
	Calendar Quarter	 	Fixed Quarterly Quantities	 	Shelf Life Left
	Q3 2008

	 	[**]
	 	[**]
	Q4 2008

	 	[**]
	 	[**]
	Total 2008

	 	[**]	 	 
	Q1 2009

	 	[**]
	 	[**]
	Q2 2009

	 	[**]
	 	[**]
	Q3 2009

	 	[**]
	 	[**]
	Q4 2009

	 	[**]
	 	[**]
	Total 2009

	 	[**]	 	 
	Q1 2010

	 	[**]
	 	[**]
	Q2 2010

	 	[**]
	 	[**]
	Q3 2010

	 	[**]
	 	[**]
	Q4 2010

	 	[**]
	 	[**]
	Total 2010

	 	[**]	 	 

- 5 -

 

The ‘Shelf Life Left calculation’ using the percentages set forth above will be based upon the
shelf life for the Product as stated in the Drug Master File as filed with the FDA on the Effective
Date (“Shelf Life”) and as measured at the time of shipment of the Product to Biodel (“Shelf Life
Left”). The Parties acknowledge that the Shelf Life at the Effective Date is [**], and the Parties
affirm that they have no knowledge of facts or circumstances that are likely to result in the Shelf
Life being reduced. Notwithstanding the foregoing, if at any time Organon notifies Biodel that the
Shelf Life Left of the Product will be less than [**], then Biodel shall have the option, within
[**] of the date of receipt of such notice, of either (i) reducing, in accordance with Section
4.l(b), the Product ordered by Biodel, or (ii) terminating the Agreement pursuant to Section
11.2(a) with immediate effect; provided further than in either instance Biodel shall not be
obligated to pay the reduction fee contemplated in Section 4.1(b) or the termination fee
contemplated in Section 11.3, as applicable. Under no circumstances, however, will Product be
delivered to Biodel with less than [**] Shelf Life Left.

          (b) Voluntary Reduction by Biodel. Notwithstanding § 4.1(a), Biodel may, at its
discretion, in writing request Organon to reduce any individual Fixed Quarterly Quantities for
which Biodel at the date of such request had not issued a Purchase Order, or not yet had to issue a
Purchase Order for in accordance with § 4.3, and Organon shall approve of such request, provided
that (i) Biodel may only make such request [**] per calendar year, (ii) such reduction, with
respect to any individual Fixed Quarterly Quantities, is limited to a total of [**] percent ([**]%)
of the corresponding Fixed Quarterly Quantities as originally included in the table above, and
(iii) Biodel shall, with respect to the [**] consecutive Purchase Orders that it in accordance with
§ 4.3 must issue following its request to reduce Fixed Quarterly Quantities, concurrent with its
respective payments in accordance with § 7.2 for such reduced amount, pay Organon a reduction fee
in the amount of [**] percent ([**]%) of the purchase price, as determined in accordance with §
7.1, that Biodel would have had to pay to Organon for the reduced part(s) of the Fixed Quarterly
Quantities if Biodel had not requested to reduce. Notwithstanding the foregoing, Biodel shall not
be required to pay any reduction fee if the reduction request is related to a Technical Change
referred to under § 5.4(A) as required by any regulatory authority, and the Technical Change
significantly affects the US and/or EU market for the End Product(s); provided, however, that any
disagreement between the Parties with respect to whether a reduction fee should not be due pursuant
to this sentence shall be subject to mediation in accordance with the second paragraph of § 13.12.

As an illustration of the reduction fee: If X was the last calendar
quarter for which a Purchase Order was issued; calendar quarters Y
and Z are next in line with Fixed Quarterly Quantities of [**].
Reduction fee is payable and due concurrent with payment for the,
then reduced, Fixed Quarterly Quantities for both Y and Z,
respectively. Irrespective of the number of reduction requests,
Fixed Quarterly Quantities for Y and Z can never be reduced to less
than [**] (Y) and [**] (Z).

          (c) Reduction for Failure to Complete Enzyme Development Work. In the event that the
results of the enzyme development work as set forth on Exhibit D cannot be included in the
application for marketing approval for Biodel’s End Product_known as VIAjectTM, which
application is set to be filed no earlier than [**] and no later than [**], Biodel shall have the
right to reduce, in whole or in part, the Fixed Quarterly Quantities for those quarters for which
Biodel then had not issued a Purchase Order, or not yet had to issue a Purchase Order for in
accordance with § 4.3.

- 6 -

 

     4.2 Additional Quantity. At any time Organon may, at its discretion, submit a binding offer
to Biodel for any Additional Quantity of Product it would be willing to supply to Biodel in
addition to the Fixed Quarterly Quantities. Biodel has the right to accept such binding offer
within [**] of its receipt thereof by submitting a Purchase Order in accordance with § 4.3, after
which period the offer is no longer binding upon Organon.

     4.3 Purchase Orders. Biodel shall order Fixed Quarterly Quantities [**] calendar quarters in
advance, and Biodel shall order Additional Quantities in accordance with Organon’s offer referred
to in § 4.2, provided that Biodel shall issue Purchase orders with respect to Q3 and Q4 2008 and Q1
2009 within [**] of the Effective Date. All orders shall be evidenced by specific and separate
Purchase Orders issued by Biodel to Organon pursuant to this § 4.3. Purchase Orders for Product
may be submitted by Biodel to Organon in writing, or electronically pursuant to a mutually agreed
upon process. All Purchase Orders shall contain: (a) the corresponding Fixed Quarterly
Quantities; (b) the purchase price for Product ordered, in accordance with § 7.1; (c) mutually
agreed to delivery dates, whereby Parties shall initially be bound to a delivery date that lies
within the corresponding calendar quarter; and (d) shipping/installation instructions. If Biodel
issues any such Purchase Orders, Organon shall inform Biodel in writing of its acceptance or
rejection thereof. Upon Organon’s acceptance of a Purchase Order, which Organon shall not refuse
to accept on the basis of arguments that detract from Biodel’s rights under §4.1, § 4.2 and/or §
7.1, such Purchase Order shall be deemed to be a transaction issued under the terms of this
Agreement between the Parties. No additional or inconsistent terms in any Purchase Orders or
Purchase Order acknowledgements shall have any legal effect.

     4.4 Limits on Production of the Product. Without detracting from Organon’s obligation to
accept properly issued Purchase Orders, if Organon, becomes aware, that it will be technically or
practically unable (for example as a result of supply chain issues or technical failures) to fill
any Purchase Order or Fixed Quarter Quantity which may become subject to a Purchase Order, then
Organon shall inform Biodel in writing with at least a [**] notice of any reduced capacity, and
Organon shall use commercially reasonable efforts to resolve the condition that caused the need to
reduce such capacity. Organon shall, taking into account customer specific technical limitations
(for example: specific specifications and/or packaging requirements), allocate its available
Recombinant Human Insulin between Biodel and Organon’s other customers proportionally in accordance
with the amount of Recombinant Human Insulin supplied thereto during the twelve (12) months prior
to the condition that caused the need to reduce such capacity.

5. Manufacture

     5.1 Raw Materials. Organon shall be responsible for obtaining, and shall store at no cost to
Biodel, any and all materials required for the manufacture of the Product, in reasonable quantities
consistent with Biodel’s forecasts and orders for the Product.

     5.2 Manufacture of Product. Organon shall manufacture Product in accordance with § 2.1, §
2.4, and any applicable regulations with respect to the transportation, storage, use, handling and
disposal of hazardous materials. If and to the extent such is not addressed by the Quality
Agreement, each Party shall promptly notify the other of any new instructions or

- 7 -

 

specifications with respect to the Product required under any applicable laws and shall confer
with each other with respect to the best means to comply with such requirements. Organon
represents and warrants to Biodel that it has, and shall maintain during the term of this
Agreement, all government permits, including without limitation health, safety and environmental
permits, necessary for the conduct of the actions and procedures that it undertakes pursuant to
this Agreement.

     5.3 Product Specifications; Testing. Product supplied hereunder shall conform to the
Specification as set forth in Exhibit A and the warranty set forth in § 8.2. Organon shall perform
quality control testing and quality oversight on the Product to be delivered to Biodel or its
designee hereunder.

     5.4 Technical Changes. If throughout the duration of this Agreement any controlling
regulatory authority requires, or any Party voluntarily requests, a Technical Change, the Parties
shall discuss in good faith the consequences thereof, including amending any of the terms of this
Agreement. Without detracting from each Party’s right to assess and decide with respect to any
such Technical Change,

(A) if such Technical Change, whether required by any controlling regulatory authority or
voluntarily requested by Biodel, is uniquely related to the use of the Product in the End
Product(s), Organon shall in no event be required to implement such Technical Change to the extent
that this would (i) adversely affect Organon’s ability to manufacture Recombinant Human Insulin for
its other customers or (y) necessitate a Material Change to Organon’s Current Manufacturing
Operations, while

(B) if such Technical Change is required by any controlling regulatory authority or voluntarily
requested by Organon, Biodel shall not be required to implement such Technical Change if such
Technical Change is (i) not required for use of the Product in the End Product(s) and (ii) would
affect the safety, efficacy or quality of the End Product(s), and (iii) would require significant
regulatory filings or new development work.

If the Parties, following good faith negotiations, fail to mutually agree on the consequences of
such required or voluntarily requested Technical Change (including, without limitation, the
allocation of the costs and expenses associated therewith, taking into account, without limitation,
to what extent the relevant Technical Change is specifically related to the use of the Product in
the End Product(s)), then the Parties shall attempt to resolve the matter through mediation in
accordance with § 13.9 and § 13.12. Notwithstanding the foregoing, with respect to a Technical
Change requested by Organon that is not required for the use of the Product in the End Product,
Biodel shall not be required to accept price increases associated with such Technical Change,
unless Biodel agrees with the proposed Technical Change.

6. Delivery and Acceptance

     6.1 Time and Place of Delivery. Organon shall ship the Product to Biodel’s Danbury,
Connecticut facility or to such other, or additional, U.S. location(s) as Biodel shall designate
from time to time, to arrive on the scheduled date, or within the timeframe specified, as set forth
in the Purchase Orders as accepted by Organon in accordance with § 4.3. Any deviation

- 8 -

 

from an agreed upon scheduled delivery date for Product shall occur only upon approval by the
Parties. Organon shall retain samples of each batch as described in the Quality Agreement. In
case Biodel, in a single Purchase Order, requires other than standard packaging and/or packaging
quantities and/or multiple deliveries to one ore more U.S locations, Organon may charge Biodel with
a reasonable fee to cover costs resulting from such requirements.

     During the term of this Agreement no Product shall be delivered to Biodel with less Shelf Life
Left than that specified in § 4.1 (a), provided that if as a result of any mutually agreed to
delivery postponements such required level of Shelf Life Left can no longer be met, such required
level shall be reduced by the duration of any such postponement.

     6.2 Risk of Loss. Organon shall bear the risk of loss for the Product until delivery to such
designated facility at which time title to the Product and the risk of loss shall pass to Biodel.

     6.3 Documents. Each shipment of the Product shall be accompanied by accurate and complete
documents including, but not limited to relevant certificates of analysis, certificates of
compliance and a copy of the invoice.

     6.4 Inspection, Acceptance, and Rejection. Biodel shall have the right to inspect the Product
as follows:

          (a) Initial Inspection. Biodel shall, without limitation, have the option to audit, inspect,
review, and document, at Organon’s facility, any activities related to the manufacture, including,
but not limited to processing, process testing, and final laboratory release testing to determine
whether the Product is acceptable to Biodel, complies with the Specifications, and is not a
Non-conforming Product. Any participation or presence by Biodel personnel does not waive Organon’s
responsibilities to provide the agreed upon quantity of the Product, on the time of delivery, and
in conformance with the Specifications.

          (b) Delivery Inspection. Within [**] from delivery at the facility designated in accordance
with §6.1, Biodel shall perform further testing to determine whether the Product is acceptable to
Biodel, and is not a Non-conforming Product. If Biodel determines that a batch of Product does not
conform to the Specifications based on Biodel’s analysis performed on the Product, or is for any
other reason to be considered a Non-conforming Product, Biodel shall notify Organon thereof in
writing within [**] following delivery. In the event the batch of Product does not conform to
Specifications, or for any other reason is confirmed to be Non-conforming Product, Organon shall at
Biodel’s option either (i) replace such Product free of charge as soon as reasonably possible, but
no later than [**], or (ii) issue a credit note on the basis of the purchase price paid in
accordance with § 7 for such Non-conforming Product. If Biodel requests replacement of
Non-conforming Product and Organon determines that replacement of such Product in a timely manner
is not commercially reasonable, then it shall notify Biodel within a reasonable time, issue a
credit note as described in (ii) above, and the Parties shall discuss in good faith a reasonable
plan, including timeframes, to address any material delivery shortfall created by such
Non-conforming Product. If Biodel does not notify Organon that any batch of Product is a
Non-conforming Product within [**] following delivery of such Product at Biodel’s facility, or does
not reject any Non-conforming Product in accordance with the procedure described above, such
batches of Product shall be deemed to have

- 9 -

 

been accepted by Biodel; provided, however, that in the case of any batch of Product having
latent defects that could not have been discovered by Biodel within the applicable period described
above despite reasonable inspection by Biodel, Biodel may reject such batch of Product by giving
written notice to Organon of Biodel’s rejection of such batch of Product within [**] following
discovery of such latent defects.

     6.5 Expert. If the Parties fail to agree on whether a batch of the Product does not conform
to the Specifications or for any other reason is to be considered a Non-conforming Product or on
the responsibility therefore the matter shall be finally determined by an expert to be nominated by
agreement between the Parties, or failing agreement, by an expert, to be nominated by the CPR. The
expert shall act as an expert and not as an arbitrator, but his opinion shall be binding upon the
parties and his fees and expenses shall be borne by the party against which the expert’s opinion is
rendered.

     In no event shall Product, whether Non-conforming or not, be returned to Organon without its
prior written consent. In case it is established in accordance with the terms of this Agreement
that Product is Non-Conforming, Biodel shall at the instruction and cost of Organon either return
or destroy such Product.

7. Pricing; Payment

     7.1 Purchase Price. The purchase price of the Product purchased from and delivered by Organon
in any given calendar year pursuant to § 4 and § 6 shall be €[**] Euros) per gram for all
Product delivered.

     Within one month of each anniversary date of the Agreement, Organon may adjust the purchase
price in accordance with any unadjusted percentage change in the Chemical Industry Wage Index for
the previous 12 months period, as published by the Central Bureau of Statistics in the Netherlands
by a maximum of [**] percent ([**]%) per adjustment.

     7.2 Payment. Biodel shall pay Organon for the Product within [**] of delivery of Product in
accordance with § 6.1, for which Organon shall submit an invoice to Biodel, Attention: Accounts
Payable, 100 Saw Mill Road, Danbury, CT 06810. If it in good faith disputes any portion of an
invoice, then Biodel shall pay the undisputed amounts and the Parties shall use good faith efforts
to reconcile the disputed amount as soon as practicable, in accordance with the terms of this
Agreement. Organon shall not suspend work or seek to terminate this Agreement or any Purchase
Order on account of Biodel’s failure to pay any invoiced amount which is the subject of a good
faith bona fide dispute, provided that Biodel pays all undisputed amounts. In the event Organon
has a good faith belief that Biodel may not meet it’s financial obligations under this Agreement
then Organon shall notify Biodel, in writing, within a reasonable time, not to exceed [**] of such
concerns. The Parties shall discuss, and meet as necessary, to negotiate a good faith resolution
to such concerns, may refer the matter to their respective senior management, or attempt to resolve
through mediation in accordance with § 13.12. If Biodel fails to pay any undisputed amount when
due, then, without prejudice to any other rights Organon may have, but only after having in good
faith consulted Biodel, Organon may provide notice to the immediate effect that:

- 10 -

 

          (i) default interest shall be due on the amount outstanding at the rate of one percent (1%)
per month;

          (ii) all costs, including judicial, made in order to obtain payment by Biodel of the amount(s)
due, shall be for account of Biodel;

          (iii) Organon shall, notwithstanding its obligation to consult in good faith with Biodel, at
its discretion be entitled to demand adequate security to cover arrears, to demand prepayment of
further deliveries as the terms thereof shall be reasonably discussed with Biodel, or to suspend
further deliveries.

     7.3 Taxes. Unless otherwise provided on the Purchase Order, in addition to the price stated
on the face of the invoice, Biodel shall pay costs for all sales, use, or excise taxes, assessments
or other charges attributable to the sale, use, shipment transportation, or delivery of the goods.
In the event that any such charges can be waived or Biodel is entitled to a refund, Organon will
reasonably cooperate with Biodel and reasonably assist Biodel in obtaining such waiver or refund.

8. Representations And Warranties; Covenants

     8.1 General Representations and Warranties. Each Party represents and warrants:

          (a) Corporate Power and Authorization. It is duly organized and validly existing under the
laws of the state of its incorporation, and has full corporate power and authority to execute and
deliver this Agreement and to perform all of its obligations hereunder; and

          (b) Binding Agreement. This Agreement is a legal and valid obligation binding upon it and
enforceable in accordance with its 
terms; and

          (c) No Conflict. The execution, delivery and performance of this Agreement by such Party does
not conflict with any agreement, instrument or understanding, oral or written, to which it is a
Party or by which it may be bound, nor violate any law or regulation of any court, governmental
body, or administrative or other agency having jurisdiction over it; and

          (d) Resources. It has adequate resources, both financial and otherwise, to perform its duties
hereunder.

     8.2 Warranty. Organon represents and expressly warrants that the Product provided hereunder
shall conform to the Specifications shall be in compliance with all applicable laws and
regulations, and free from defect, claim, encumbrance or lien, and, subject to § 4.3, shall be
delivered according to the terms of the relevant Purchase Order. Organon represents and expressly
warrants that it has and shall at all times throughout the term of this Agreement has, whether by
right, title, interest, including by license or otherwise, the Intellectual Property Rights that
are required to use, manufacture, market, offer to sell, sell, import and export the Product in
accordance with the terms of this Agreement and that neither this Agreement nor the act of any
Party pursuant hereto shall infringe any third party rights. Biodel warrants that it shall only
use the Product for the sole purpose of the use, manufacture, marketing, sale and distribution of
the

- 11 -

 

End Product(s) in the Territory only. EXCEPT AS EXPRESSLY PROVIDED HEREIN, ORGANON MAKES NO
OTHER WARRANTIES, EXPRESS OR IMPLIED, AS TO THE QUALITY OR FITNESS FOR PURPOSE OF THE PRODUCT
SUPPLIED TO BIODEL.

     8.3 Covenants. Contemporaneous with the Effective Date, the Parties hereby agree to negotiate
in good faith the execution of a Quality Agreement. Such Quality Agreement shall be mutually
agreed to in writing prior to the first delivery of Product under this Agreement.

9. Indemnification And Liability

     9.1 Mutual Indemnification. Each Party (the “Indemnifying Party”) shall defend, indemnify and
hold harmless the other Party and its Affiliates, and their respective directors, employees,
consultants and agents (the “Indemnified Parties”) from and against any and all liabilities,
losses, damages, costs, and other expenses (including reasonable attorneys’ and expert witnesses’
costs and fees) (“Losses”) incurred by the Indemnified Parties as a result of any claim, demand,
action or proceeding by any third party (a “Claim”) to the extent arising from or relating to (i)
any material breach of any representation, warranty, covenant, or obligation of the Indemnifying
Party under this Agreement or any intentional misconduct or negligence by the Indemnifying Party or
any of its employees, agents, or subcontractors, or (ii) the manufacture, sale and/or use of End
Product(s) by or on behalf of Biodel, except, in each case, to the extent such Losses result from
the intentional misconduct or negligence of, any of the Indemnified Parties.

     9.2 Indemnification Procedures. In the event of any Claim for which any Indemnified Party is
or may be entitled to indemnification hereunder, the Indemnified Party may, at its option, require
the Indemnifying Party to defend such Claim at the Indemnifying Party’s sole expense. Indemnifying
Party may not agree to settle any such Claim without the Indemnified Party’s express prior written
consent.

     9.3 Failure to Defend or Settle. If the Indemnifying Party fails or wrongfully refuses to
defend or settle any Claims, then the Indemnified Party shall, upon written notice to the
Indemnifying Party, have the right to defend or settle (and control the defense of) such Claims.
In such case, the Indemnifying Party shall cooperate, at its own expense, with the Indemnified
Party and its counsel in the defense and settlement of such Claims, and shall pay, as they become
due, all costs, damages, and reasonable legal fees incurred therefore.

     9.4 Liability. IN NO EVENT OTHER THAN IN CASE OF INTENTIONAL MISCONDUCT OR GROSS NEGLIGENCE
WILL EITHER OF THE PARTIES BE LIABLE TO THE OTHER FOR ANY INDIRECT OR CONSEQUENTIAL LOSS OR DAMAGES
OR LOSS OF PROFITS IN RELATION TO, OR ARISING OUT OF THE OPERATION OR TERMINATION OF THIS
AGREEMENT. EACH PARTY’S LIABILITY TO THE OTHER PARTY UNDER THIS AGREEMENT, REGARDLESS OF THE CAUSE
OF ACTION, IS LIMITED TO THE TOTAL VALUE AMOUNT OF INVOICES PAID OR PAYABLE BY BIODEL UNDER THIS
AGREEMENT AND/OR THE SUPPLY AGREEMENT BETWEEN THE PARTIES OF 4 APRIL, 2004 WITHIN THE 12 MONTHS
IMMEDIATELY PRECEDING SUCH CLAIM.

- 12 -

 

10. Insurance Protection. Each Party shall obtain and maintain during the term of
this Agreement liability, comprehensive, and workers’ compensation insurance with a reputable
insurance company to help protect against those insurable risks that such Party may incur in
connection with the performance of its obligations under this Agreement. Each Party shall provide,
upon request, to the other Party any such policies of such insurance, and the premium receipt(s)
and insurance certificate(s) therefore.

11. Term; Termination

     11.1 Term. This Agreement shall begin on the Effective Date and, unless terminated sooner as
provided in § 11.2, end December 31st 2010.

     11.2 Termination Events

          (a) At Will. Biodel may terminate this Agreement with immediate effect upon written notice to
Organon.

          (b) For Cause. Organon shall have the right to terminate this Agreement for cause with
immediate effect if Biodel materially breaches this Agreement and fails to cure such material
breach within [**] after receiving written notice that specifies the particulars of such breach.

          (c) Force Majeure. Organon shall have a right to terminate this Agreement in accordance with
§ 13.13.

          (d) Business Circumstances. Organon shall have the right to terminate this Agreement with
immediate effect in the event of Biodel’s liquidation, bankruptcy or state of insolvency.

          (e) Manufacturing Decisions. Organon may terminate this Agreement upon a ten (10) business
days written notice to Biodel if the Parties fail to reach agreement after any mediation conducted
in accordance with § 5.4.

     11.3 Effects of Termination. Upon the expiration or termination of this Agreement, (a) Biodel
shall pay to Organon all amounts due to Organon under this Agreement; (b) Organon shall deliver to
Biodel all Product for which a delivery date under a Purchase Order has passed; and (c) subject to
the Confidentiality Agreement, each Party shall return to the other Party, upon the other Party’s
request, all tangible items of the other Party in its possession or under its control evidencing
the Confidential Information of the other Party. The expiration or earlier termination of this
Agreement shall not affect any rights or claims of a Party hereunder that accrued prior to the date
of such expiration or earlier termination.

     In the event the Agreement is terminated (i) by Biodel pursuant to § 11.2(a), or (ii) by
Organon pursuant to § 11.2(e) following the Parties’ failure to reach agreement after any mediation
conducted in accordance with § 5.4 with respect to any Technical Change referred to under § 5.4(A),
then Biodel has the option, within [**] of sending or receiving a termination notice, to request
delivery of all Product for which, on or before the date of termination of this

- 13 -

 

Agreement, a Purchase Order was issued in accordance with § 4.3 but no delivery date has
passed and Organon shall accept and perform such Purchase Orders, and Biodel shall subsequently
take delivery and pay for the Product, all in accordance with the terms of this Agreement; provided
that in the event that Biodel does not timely make use of such option, Organon is entitled to, and
Biodel will within [**] sending or receiving such termination notice pay to Organon a termination
fee to the amount of (a) seventy-five percent (75%) of the purchase price, as to be determined in
accordance with §4.1 and § 7.1, of all the Fixed Quarterly Quantities corresponding with the said
Purchase Orders, plus (b) fifty percent (50%) of the purchase price, as to be determined in
accordance with §4.1 and § 7.1, of the Fixed Quarterly Quantity corresponding to the calendar
quarter for which Biodel, but for the termination of this Agreement, would have had to issue a
Purchase Order for first.

     11.4 Survival. Sections (§) § 1, § 2.3, § 3, § 7.2 and § 7.3, § 8, § 9, § 10, § 11.3 and §
11.4, § 12, and § 13 shall survive the expiration or termination of this Agreement.

12. Confidential Information

     12.1 Confidentiality Obligations. Each Party shall at all times, and notwithstanding any
termination or expiration of this Agreement, hold in confidence and not disclose to any third party
Confidential Information of the other Party, except as approved in writing by the other Party to
this Agreement, and shall use the Confidential Information for no purpose other than the purposes
expressly permitted by this Agreement. Each Party shall only permit access to Confidential
Information of the other Party to those of its employees, consultants, agents, and attorneys having
a need to know and who are bound by confidentiality obligations at least as restrictive as those
contained herein. The obligations in this § 12.1 shall terminate [**] years from the date of
expiration or termination of this Agreement in accordance with §11.

     12.2 Exceptions to Confidentiality Obligations. A Party’s obligations under this Agreement
with respect to any portion of the other Party’s Confidential Information shall terminate when the
Party that is subject to such obligations can document in writing that such information: (a)
entered the public domain through no fault of such Party; (b) it was in such Party’s possession
free of any obligation of confidence at the time it was communicated to such Party by the other
Party; (c) it was rightfully communicated to such Party free of any obligation of confidence
subsequent to the time it was communicated to such Party by the other Party; or (d) it was
developed by employees or agents of such Party independently of and without reference to any
information communicated to such Party by the other Party.

     12.3 Authorized Disclosure. Notwithstanding anything to the contrary, a Party shall not be in
violation of § 12.1 with regard to a disclosure of the other Party’s Confidential Information that
is in response to a valid order by a court or other governmental body or necessary to comply with
applicable law or governmental regulations, provided that if such Party is required to make any
such disclosure of the other Party’s Confidential Information it shall to the extent practicable
give reasonable advance notice to the other Party of such disclosure requirement in order to permit
the other Party to seek confidential treatment of or to limit the Confidential Information required
to be disclosed.

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     12.4 Separate Confidential Disclosure Agreements. Any prior confidential disclosure
agreements between the Parties are incorporated by reference to this Agreement, except for the
Confidentiality Agreement. In case of a discrepancy between the terms of this Agreement and such
prior agreements, the terms of this Agreement shall prevail; in case of a discrepancy between the
terms of this Agreement and the Confidentiality Agreement, the terms of the Confidentiality
Agreement shall prevail. Notwithstanding the foregoing, the Parties from time to time may execute
additional confidential disclosure agreements, as required by their respective SOPs, for the
limited and specific purpose of conducting audits.

13. Miscellaneous

     13.1 Assignment. Except as expressly provided hereunder, and subject to the Confidentiality
Agreement, neither this Agreement nor any rights or obligations hereunder may be assigned or
otherwise transferred by either Party without the prior written consent of the other (which consent
shall not be unreasonably withheld); provided, however, that either Party may assign this Agreement
and its rights and obligations hereunder without the other Party’s consent, to any Affiliate or to
any successor in title to the whole or part of that part of a Party’s business to which this
Agreement pertains. Notwithstanding the foregoing, any such assignment to an Affiliate or
successor in title shall not relieve the assigning Party of its responsibilities for performance of
its obligations under this Agreement. The rights and obligations of the Parties under this
Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of
the Parties. Any assignment not in accordance with this Agreement shall be void.

     In the event a prospective successor in title to the whole or part of that part of a Party’s
business to which this Agreement pertains desires to review information that is subject to the
Confidentiality Agreement, Organon shall reasonably cooperate in arranging a supervised, read-only
review (e.g. no notes or copies) at Organon’s facilities in Oss, The Netherlands.

     13.2 Relationship of the Parties. It is expressly agreed that Organon and Biodel shall be
independent contractors and that the relationship between the Parties shall not constitute a
partnership, joint venture or agency of any kind. Neither Party shall have the authority to make
any statements, representations or commitments of any kind, or to take any action, which shall be
binding on the other Party, without the prior written consent of the other Party.

     13.3 Amendment. Unless otherwise provided herein, this Agreement may not be changed, waived,
discharged, or terminated orally, but instead only by a written document that is signed by the duly
authorized officers of both Parties.

     13.4 Waiver. No failure or delay by either Party in exercising any right, power, or privilege
under this Agreement shall operate as a waiver thereof, nor shall any single or partial waiver
thereof include any other or further exercise thereof or the exercise of any other right, power, or
privilege.

     13.5 Severability. Whenever possible, each provision of the Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any term or provision of this
Agreement is held to be prohibited by or invalid under applicable law, such

- 15 -

 

provision shall be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of the Agreement and this Agreement shall be interpreted and construed
as if such provision had never been contained herein.

     13.6 Notices. All notices and statements to be given (which shall be in writing) and all
payments to be made hereunder shall be given or made at the respective addresses of the Parties as
set forth above, unless notification of a change of address is given. All notices, payments and
statements to be made hereunder shall be mailed by certified or registered mail, return receipt
requested, or sent by overnight courier, or by facsimile or other electronic means. Any notice
given pursuant to this Agreement by mail shall be considered effective three (3) business days
after mailing. Any notice sent by overnight courier shall be considered effective one day after
mailing. The date of transmission of any notice sent by electronic means shall be deemed to be the
date the notice or statement is transmitted.

     13.7 Construction. The section headings of this Agreement are inserted only for ease of
reference only, and shall not be used to interpret, define, construe, or describe the scope or
extent of any aspect of this Agreement. Unless otherwise expressly stated, when used in this
Agreement the word “including” means “including but not limited to.” Each Party represents that it
has had the opportunity to participate in the preparation of this Agreement and hence the Parties
agree that the rule of construction that ambiguities be resolved against the drafting Party shall
not apply to this Agreement.

     13.8 No Third Party Beneficiaries. Unless expressly provided, no provisions of this Agreement
are intended or shall be construed to confer upon or give to any person other than Biodel and
Organon any rights, remedies, or other benefits under or by reason of this Agreement.

     13.9 Dispute Resolution. If a dispute arises under this Agreement, the Parties shall use
reasonable efforts to attempt to resolve such dispute, including escalation of discussions to the
appropriate level of management, as provided in § 13.12, prior to commencing an action against the
other Party. Notwithstanding the foregoing, either Party may at any time seek equitable relief
under § 13.10 without first attempting to resolve a dispute under this § 13.9 provided, however,
that such Party notifies the other Party promptly after it files any such action.

     13.10 Equitable Relief. Each Party acknowledges and agrees that any breaches of this
Agreement (included without limitation violations of §3 and/or §12) may cause the non-breaching
Party irreparable damage for which the award of monetary damages would be inadequate.
Consequently, the non-breaching Party may seek to enjoin the breaching Party from any and all acts
in violation of any such provisions, which remedy shall be cumulative and not exclusive, and a
Party may seek the entry of an injunction enjoining any breach or threatened breach of such
provisions, in addition to any other relief to which the non-breaching Party may be entitled at law
or in equity.

     13.11 Governing Law. This Agreement shall be governed by and interpreted under the laws of
the State of New York without regard to its conflict or choice of law provisions. The United
Nations Convention on Contracts for the International Sale of Goods shall not apply to this
Agreement.

- 16 -

 

     13.12 Alternative Dispute Resolution. The Parties shall attempt by direct good faith
negotiations to resolve promptly any dispute arising out of or relating to this Agreement. If the
matter cannot be resolved in the normal course of business either Party shall give the other Party
written notice (the “Dispute Notice”) of any such dispute not resolved at which time the dispute
shall be referred to the senior management of the respective Parties who shall likewise attempt to
resolve the dispute.

     If the dispute has not been resolved by negotiation as detailed above, or if the Parties fail
to meet, within thirty (30) business days of the Dispute Notice, then the Parties shall endeavor to
settle the dispute by mediation under the supervision of and in accordance with the CPR Model
Mediation Procedure for Business Disputes in Europe. Unless otherwise agreed, both parties or each
individual party may request the CPR to appoint an independent mediator. The language of the
mediation shall be in English and the seat of mediation shall be agreed upon by both parties or, in
the event the parties do not timely agree, the seat will be determined by the mediator.

     If the dispute has not been resolved by mediation as detailed above within ninety (90) days of
the Dispute Notice, either party may submit the dispute to arbitration for resolution in accordance
with the CPR Arbitration Rules. A single, impartial arbitrator mutually acceptable to the Parties
shall conduct the arbitration. In the event the Parties cannot agree on an arbitrator within
twenty (20) business days of the submission of the dispute to arbitration, either Party may request
the CPR to appoint an arbitrator.

     The seat of the arbitration shall be in London, United Kingdom, unless the Parties agree
otherwise. As a condition of appointment of the arbitrator, said arbitrator shall agree to use
her/his best efforts to conclude the proceeding within ninety (90) business days. Said arbitrator
shall have the authority to limit the volume of evidence and documents to be submitted by the
Parties. Any court having jurisdiction thereof may enter judgment upon the award rendered by the
arbitrator. This § 13.12 shall, however, not be construed to limit or to preclude the rights of
either Party under § 13.10 from bringing any action in any court of competent jurisdiction for
injunctive or other provisional relief as necessary or appropriate.

     13.13 Force Majeure. Neither Party shall be liable to the other for any failure or delay in
the performance of any of its obligations under this Agreement arising out of any event or
circumstance beyond its reasonable control, including war, rebellion, terrorism, civil commotion,
strikes, lock-outs or industrial disputes; fire, explosion, earthquake, acts of God, flood or
drought; or requisitioning or other act or order by any government, council, or constituted body.
If such failure or delay occurs, then the affected Party shall give the other Party notice of the
circumstances causing such failure or delay, and such Party shall be excused from the performance
of such of its obligations that it is thereby disabled from performing for so long as it is
disabled and for thirty (30) days thereafter; provided, however, that such affected Party commences
and continues to take reasonable and diligent actions to cure such failure or delay.
Notwithstanding the foregoing, if a Party is disabled from the performance of any material
obligation under this Agreement for a period of ninety (90) days or more, then the other Party
shall have the right to terminate this Agreement upon written notice to the other Party, in which
event the provisions of § 11.3 shall apply.

- 17 -

 

     13.14 Attorneys’ Fees. If any claim, action, or dispute arises between the Parties with
respect to any matter covered by this Agreement that leads to a proceeding before a court of
competent jurisdiction to resolve such claim, the Prevailing Party in such proceeding shall be
entitled to receive from the other Party its reasonable attorneys’ fees, expert witness fees, court
costs and other out-of-pocket costs incurred in connection with such proceeding, in addition to any
other relief that it may be awarded. For purposes of this § 13.14, the term “Prevailing Party”
means that Party in whose favor any monetary or equitable award is made or in whose favor any
dispute is resolved, regardless of any settlement offers.

     13.15 Publicity. Neither Party shall disclose the fact that they are conducting business
together or the existence of, or the provisions of, this Agreement to any other party unless such
disclosure is in response to a valid order by a court or other governmental body or necessary to
comply with applicable governmental law or regulations provided. Notwithstanding the foregoing,
each Party shall have the right to issue from time to time press releases that disclose the
relationship of the Parties under this Agreement upon the agreement of the Parties, which agreement
shall not be unreasonably withheld, delayed, or conditioned. Any press releases that are to be
issued by either Party shall be in a form and substance as may be mutually agreed upon by the
Parties.

     13.16 Entire Agreement. This Agreement includes all exhibits attached hereto (subject to §
8.3 with regard to the Quality Agreement) and any Specifications that are executed by authorized
representatives of the Parties, and constitutes the entire Agreement by and between the Parties as
to the subject matter hereof. Subject to § 12.4, this Agreement supersedes and replaces in its
entirety all prior agreements, understandings, letters of intent, and memoranda of understanding by
and between the Parties hereto, in either written or oral form, including without limitation the
supply agreement between the Parties of 4 April, 2005. No amendment or modification of this
Agreement shall be valid unless set forth in writing referencing this Agreement and executed by
authorized representatives of both Parties.

     13.17 English Language. This Agreement has been prepared in the English language and the
English language shall control its interpretation. In addition, all notices required or permitted
to be given hereunder, and all written, electronic, oral or other communications between the
Parties regarding this Agreement, or delivered pursuant to the terms of this Agreement, shall be in
the English language. Any proceedings related to dispute resolution including, but not limited to
legal, equitable, or alternative dispute resolution, shall be conducted in the English language.

- 18 -

 

     In Witness Whereof, the Parties hereto have this day caused this Agreement to be
executed by their duly authorized officers.

	 	 	 	 	 	 	 	 	 	 	 
	N.V. Organon	 	 	 	Biodel Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Adriaan Sanders	 	 	 	By:
	 	/s/ Solomon S. Steiner	 	 
	 

	 	 

Name: Adriaan Sanders
	 	 	 	 	 	 

Name: Solomon S. Steiner
	 	 
	 

	 	Title: VP API/BT Global Supply Chain
	 	 	 	 	 	Title: President & Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date: 10-July-2008	 	 	 	Date: 7-July-2008	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	N.V. Organon	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	/s/ K.S. Schouten	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Name: K.S. Schouten	 	 	 	 	 	 	 	 
	 

	 	Title: Managing Director	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date: 10-July-2008	 	 	 	 	 	 	 	 

- 19 -

 

Exhibit A

SPECIFICATIONS

     Product shall be delivered with a Certificate of Analysis following the most recent version of
the European Pharmacopeia (EP) or the United States Pharmacopeia (USP), respectively, whereby the
A-21 desamido levels of all batches of Product delivered in a calendar quarter shall be at or below
[**] percent ([**]%).

- 20 - 

 

Exhibit B

QUALITY AGREEMENT

To be provided

- 21 - 

 

Exhibit C

CONFIDENTIALITY AGREEMENT

- 22 - 

 

CONFIDENTIALITY AGREEMENT

     THIS CONFIDENTIALITY AGREEMENT (The “Agreement”) is made this 7th day of July 2008 by and
between

N.V. Organon, a limited liability company incorporated under Dutch law having its
registered office at Kloosterstraat 6, 5349 AB Oss, the Netherlands (“Organon”),

and

Biodel Inc., a Delaware corporation, with its principal office and place of business at
having its offices at 100, Saw Mill Road, Danbury CT 06810, U.S.A., (“Biodel”),

each a “Party”, and when collectively referred to, “Parties”

WITNESSETH:

     WHEREAS, Organon (through its predecessor organization Diosynth B.V.) and Biodel have
previously entered into a supply agreement, dated the 4th day of April 2005 regarding
the supply to Biodel of recombinant human insulin (rHI) (the “Product”) by Organon in respect of
Biodel’s proprietary formulations of insulin (the “End Product(s)”; the “Old Supply Agreement”);

     WHEREAS, Organon and Biodel have in good faith negotiated the terms and conditions of a new
supply agreement for the manufacture for and supply to Biodel of the Product for the End
Product(s), which new supply agreement is executed concurrent with this Agreement and replaces the
Old Supply Agreement (the “New Supply Agreement”);

     WHEREAS, Biodel has requested Organon to grant access to Biodel of Organon’s certain
proprietary information with respect to the Product (“Confidential Information”) as is necessary
for the purpose of preparing and maintaining the ‘Drug Substance Quality Section’ of the ‘Common
Technical Documents’ that form part of Biodel’s application for a marketing authorization for its
End Product VIAject® (the “Marketing Authorization”) with the relevant regulatory bodies in the
European Union (the “EMEA”) (the “Purpose”); and

     WHEREAS, in consideration of the foregoing, which forms part of this Agreement, the Parties
agree to the terms and conditions as set out below;

IT IS HEREBY AGREED AS FOLLOWS:

	1.	 	Upon execution of this Agreement by the Parties, Organon shall, solely for the Purpose and
only to the extent required therefore and subject to the final sentence of this Article 1,
discuss, Confidential Information with the following Representatives (as defined below) of
Biodel only:
	 
	 	 	• [**]
	 
	 	 	(jointly, the “Designated Persons”),

1 - 9

 

	 	 	who will, prior to the aforementioned discussion of Confidential Information, co-sign this
Agreement as an acknowledgement of having reviewed this Agreement with Biodel’s General
Counsel with the purpose of understanding Biodel’s obligations hereunder. The Parties agree
that the Designated Persons shall also be Representatives of Biodel Europe (as defined in
Article 10 hereof). For the avoidance of doubt, (i) physical access to and disclosure of
the Confidential Information to the Designated Persons shall only be granted by Organon as
of the date that lies [**] before the date of submission of an application for the Marketing
Authorization with the EMEA, provided that the terms of this Agreement shall fully apply
thereto, and (ii) any other proprietary and confidential information than the Confidential
Information (e.g. proprietary and confidential information that Organon also discloses to
Biodel with respect to regulatory filings in other countries and/or jurisdictions in the
Territory than the European Union), or any other proprietary and confidential information
shall be governed by the confidentiality terms under the New Supply Agreement.
	 	 
	2.	 	For purposes of this Agreement, the term Confidential Information shall not include
information which, as adequately substantiated by documentation, (i) is or becomes publicly
available other than as a result of a disclosure by Biodel or any of its directors, officers,
employees, affiliates, or other representatives (with regard to Biodel or Organon,
respectively, the “Representatives”, in the case of Biodel including without limitation the
Designated Persons) in violation of this Agreement or other obligation of confidentiality or
(ii) is or becomes available to Biodel or its Representatives on a non-confidential basis from
a source (other than Organon or its Representatives) not known by Biodel or its
Representatives to be prohibited from disclosing such Confidential Information to Biodel or
its Representatives by a legal, contractual or fiduciary obligation.
	 
	3.	 	Biodel agrees to keep secret and confidential all Confidential Information and to use the
Confidential Information solely for the Purpose. In that respect, and subject to the other
terms of this Agreement, Biodel, solely through its Designated Persons, is entitled to provide
the Confidential Information to, and to liaise with, the EMEA only. The Designated Persons
shall keep a detailed log of the dealings and correspondence with the EMEA regarding the
Confidential Information and Biodel shall at least quarterly provide Organon with an update of
any permitted use, as described in the Purpose, of Confidential Information, including copies
of the aforementioned dealings and correspondence. Unless Biodel has obtained Organon’s prior
written approval thereto, (i) Biodel shall not in any way amend or modify (e.g. change,
delete, add to) the Confidential Information, or parts thereof, (ii) nor shall Biodel respond
to any questions by the EMEA if and to the extent the response directly or indirectly requires
or results in the use of or the reference to, or is otherwise related to, the Confidential
Information.
	 
	4.	 	Except as explicitly provided for in Articles 3 and 10 hereof, Biodel shall not, and shall
cause the Designated Persons not to, (i) disclose any of the Confidential Information to any
other person (without limitation including Biodel’s Representatives other than the Designated
Persons), and/or (ii) make copies of, and/or prepare analyses, compilations, forecasts,
studies, or other documents based in whole or in part on, or otherwise containing or
reflecting any of, the Confidential Information.

2 - 9

 

	5.	 	Biodel agrees to assume liability for any breach of this Agreement resulting from the act or
omission of any of its Representatives, and Biodel shall guarantee the respecting of all
obligations under this Agreement by it or its Representatives. Biodel hereby represents and
warrants that it has entered into confidentiality agreements with each of its Representatives
that will enable Biodel to meet its obligations hereunder.
	 
	6.	 	In the event that Biodel or its Representatives are requested pursuant to, or required by,
applicable law, regulation or legal process to disclose any of the Confidential Information,
whether or not such disclosure is or would be in accordance with the Purpose, Biodel will
notify Organon promptly so that it may take appropriate action or direct Biodel to take such
action, including but not limited to, seeking an appropriate protective order, or, in
Organon’s sole discretion, waive compliance with the terms of this Agreement (and Biodel will
provide such cooperation as Organon shall reasonably request). In the event that (i) despite
Organon’s and Biodel’s mutual efforts to take appropriate action to protect the Confidential
Information from disclosure Biodel or its Representatives are nonetheless legally compelled to
disclose such Confidential Information, or (ii) Organon waives compliance with the terms of
this Agreement, Biodel or its Representatives, as the case may be, will furnish only that
portion of the Confidential Information which they are advised in writing by counsel is
legally required and will give Organon written notice (unless prohibited by law) of the
Confidential Information to be disclosed as far in advance as practicable and exercise all
reasonable efforts to obtain reliable assurance that confidential treatment will be accorded
the Confidential Information.
	 
	7.	 	If, for whatever reason, (i) Biodel has not submitted an application for the Marketing
Authorization with the EMEA prior to [**], (ii) Biodel has not obtained approval from the EMEA
with respect to the Marketing Authorization prior to [**], and/or (iii) Biodel intends to
assign or otherwise transfer the Marketing Authorization, or any of its rights thereunder, to
any third party or affiliate (other than to Biodel Europe in accordance with Article 10
hereof), then Biodel shall timely inform Organon thereof and, subsequently, if and to the
extent requested by Organon, return and/or deliver to Organon, at Biodel’s expense, any and
all copies of the Confidential Information, and no copy thereof will be retained by Biodel or
its Representatives; provided that any orally disclosed Confidential Information will continue
to be subject to the terms of this Agreement, and provided further that Biodel may retain one
complete archival copy of the Confidential Information, with an independent third party
mutually agreed to in writing between the Parties, in accordance with professional standards
of practice for the sole purpose of meeting its regulatory obligations. With respect to the
foregoing, in the event of the occurrence of a circumstance referred to under (i) or (ii)
above, Organon shall only request such return of the Confidential Information if good faith
discussions with Biodel have not lead to amendment of the dates mentioned in (i) and/or (ii);
in the event of the occurrence of a circumstance referred to under (iii), Organon shall only
request such return of the Confidential Information if the (prospective) transferee party, at
the time of such transfer, is active in the manufacturing of recombinant human insulin API
market, or can reasonably be expected to become active therein within [**]. By way of example
with respect to the occurrence of a circumstance referred to under (ii) above, Organon shall
reasonably agree to an amendment of the date mentioned in (ii) above if EMEA

3 - 9

 

	 	 	requests the performance of additional clinical development work which would reasonably be
expected to delay receipt of approval for the Marketing Authorization beyond the date
specified in (ii) above. If Organon for any reason did not make use of its rights hereunder
with respect to a particular event as referred to above, such does not preclude Organon from
exercising such rights with respect to such other previous, simultaneous or subsequent
events.
	 
	8.	 	Biodel acknowledges that remedies at law may be inadequate to protect Organon against any
actual or threatened breach of this Agreement by it or any of its Representatives, and,
without prejudice to any other rights and remedies otherwise available to Organon, Biodel
agrees that Organon may seek to enjoin Biodel from any and all acts in violation of any such
provisions, which remedy shall be cumulative and not exclusive, and Organon may seek the entry
of an injunction enjoining Biodel from any breach or threatened breach of such provisions, in
addition to any other relief to which Organon may be entitled at law or in equity, without
proof of actual damages. In the event of litigation relating to this Agreement, if a court
of competent jurisdiction determines in a final, non-appealable order that this Agreement has
been breached by Biodel and/or its Representatives, then Biodel will reimburse Organon for its
costs and expenses (including, without limitation, reasonable legal fees and expenses)
incurred in connection with all such litigation to the extent a judgment is actually obtained.
	 
	9.	 	No failure or delay by Organon in exercising any right hereunder will operate as a waiver
thereof, nor will any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any right hereunder.
	 
	10.	 	Neither this Agreement nor any rights or obligations hereunder may be assigned or otherwise
transferred by Biodel without the prior written consent of Organon; provided, however, that
Biodel may assign this Agreement and its rights and obligations hereunder (including, without
limitation, the transfer of Confidential Information through Designated Persons) without
Organon’s consent to any corporation or other business entity which (i) is based in a member
state of the European Union (other than an Excluded Country, as defined in the New Supply
Agreement), and (ii) is wholly owned and controlled by Biodel. Notwithstanding the foregoing,
any such assignment shall not relieve Biodel of its responsibilities for performance of its
obligations under this Agreement. The rights and obligations of the Parties under this
Agreement shall be binding upon and inure to the benefit of the successors and permitted
assigns of the Parties. Any assignment not in accordance with this Agreement shall be void.
	 
	11.	 	This Agreement will be governed by, construed in accordance with and enforceable under the
laws of The Netherlands. Each party consents and submits to personal jurisdiction in The
Netherlands, to settle any dispute concerning the conclusion, validity, interpretation or
performance of this Agreement. Biodel and the Designated Persons agree that they may be
served with process at the address set forth on the first page hereof.
	 
	12.	 	This Agreement contains the entire agreement between Biodel and Organon concerning the
Confidential Information, and as such prevails over the Confidentiality Agreement of

4 - 9

 

	 	 	11 April 2007, and no provision of this Agreement may be waived, amended or modified, in
whole or in part, nor any consent given, unless beforehand approved in writing by duly
authorized Representatives of Organon and Biodel respectively, which writing specifically
refers to this Agreement and the provision so amended or modified or for which such waiver
or consent is given. In the event that any provision of this Agreement is deemed invalid,
illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions of this Agreement will not in any way be affected or impaired thereby.
	 
	13.	 	Neither this Agreement nor any disclosure of Confidential Information shall be deemed by
implication or otherwise to vest in Biodel any present or future rights in any patents, trade
secrets or property belonging to or controlled by Organon and no license is granted except as
explicitly stated in this Agreement. Biodel further acknowledges and agrees that this
Agreement does not, by implication or otherwise, purport in any way to an obligation on the
part of Organon (i) to supply Biodel with the Product, other than agreed to in the New Supply
Agreement, or (ii) to expand the scope of the Purpose.
	 
	14.	 	This Agreement is and remains valid until the date of termination or expiry of the New Supply
Agreement or, if applicable, of any written supply arrangement following the New Supply
Agreement; provided that the obligations of confidentiality and non-use set forth in this
Agreement expire [**] years from such date.
	 
	 	 	AS AGREED upon and signed in duplicate by authorised representatives of each party

	 	 	 	 	 	 	 
	N.V. Organon	 	Biodel Inc.	 	 
	 
	 	 	 	 	 	 
	/s/ Adriaan Sanders 	 	/s/ Solomon S. Steiner	 	 
	 	 	 	 	 
	By:    Adriaan Sanders

	 	By:
	 	Solomon S. Steiner, Pd.D	 	 
	Title: VP
API/BT Global Supply Chain

	 	Title:
	 	President and CEO	 	 
	Date: 10-6-08

	 	Date:
	 	7 July 2008	 	 
	Place:

	 	Place:
	 	Danbury, CT USA	 	 
	 
	 	 	 	 	 	 
	N.V. Organon
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ K.
S.
Schouten 

By:   K.
S.
Schouten

	 	 	 	 	 	 
	Title: Managing
Director
	 	 	 	 	 	 
	Date: 10-6-08
	 	 	 	 	 	 
	Place:
	 	 	 	 	 	 

     Pursuant to Article 1 of this Agreement, the Designated Persons indicate by their signature
below that they acknowledge having reviewed this Agreement with Biodel’s General Counsel for the
sole purpose of understanding Biodel’s obligations hereunder. The Parties agree that the
Designated Individuals shall not become individually liable as a result of signing below.

5 - 9

 

	 	 	 	 	 
	/s/ [**] 

	 	 	 	 
	By:

	 	[**]
	 	 
	Title:

	 	[**]	 	 
	Date:
	 	 	 	 
	Place:
	 	 	 	 

6 - 9

 

	 	 	 	 	 
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7 - 9

 

	 	 	 
	 

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8 - 9

 

Exhibit D

ENZYME DEVELOPMENT WORK PLAN

Confidential
Materials omitted and filed separately with the Securities and
Exchange Commission.

A total of 6 pages have been omitted.

[**]

- 23 -

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