EXHIBIT 10.52
Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as ***. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.
FINISHED GOODS SUPPLY AGREEMENT
(REVLIMID(TM))
This Finished Goods Supply Agreement (the "Agreement") dated this 8th
day of September 2004 between Penn Pharmaceutical Services Limited, ("Penn") and
Celgene Corporation, a Delaware corporation ("Celgene").
RECITALS
Whereas, Penn and Celgene desire to establish a relationship, pursuant
to which Penn (or its appropriate Affiliates, as defined herein) will supply,
and Celgene (or its appropriate Affiliates) will purchase, the Commercial
Products, as defined herein.
In consideration of the foregoing premise, and the mutual covenants and
obligations set forth herein, Celgene and Penn hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1. "AFFILIATE" shall mean, with respect to any party, any person
or entity which, directly or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such party. A
person or entity shall be deemed to control a corporation (or other entity) if
such person or entity possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of such corporation (or other
entity) whether through the ownership of voting securities, by contract or
otherwise.
1.2. "API" shall mean the active pharmaceutical ingredient
lenalidomide, [3-(4'aminoisoindoline-l'-one)-1-piperidine-2,6-dione], Celgene's
compound CC-5013.
1.3. "BATCH" shall mean one (1) production lot of the Commercial
Products as defined in Exhibit A.
1.4. "BATCH RECORD" shall mean the document created as and after
each Batch is manufactured that, if complete and accurate, reflects and
incorporates all aspects of the Master Batch Formula, the Certificate of
Analysis, and any MD Reports issued, with respect to such Batch.
1.5. "CERTIFICATE OF ANALYSIS" shall mean a certificate issued by
Penn stating that a Batch has been manufactured in accordance with the Master
Batch Formula and stating the Test results.
1.6. "COMMERCIAL PRODUCTS" shall mean the formulations of
Revlimid(TM) (lenalidomide) in capsule form for oral administration as
identified in the NDA.
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
1.7. "CONFIDENTIAL INFORMATION" shall mean, with respect to a
party, all information of any kind whatsoever (including without limitation,
data, compilations, formulae, models, patent disclosures, procedures, processes,
projections, protocols, results of experimentation and testing, specifications,
strategies and techniques), and all tangible and intangible embodiments thereof
of any kind whatsoever (including without limitation, apparatus, compositions,
documents, drawings, machinery, patent applications, records and reports), which
is disclosed by such party to the other party and is marked, identified as or
otherwise acknowledged to be confidential at the time of disclosure to the other
party. Notwithstanding the foregoing, Confidential Information of a party shall
not include information which the other party can establish by written
documentation (a) to have been publicly known prior to disclosure of such
information by the disclosing party to the other party, (b) to have become
publicly known, without fault on the part of the other party, subsequent to
disclosure of such information by the disclosing party to the other party, (c)
to have been received by the other party at any time from a source, other than
the disclosing party, rightfully having possession of and the right to disclose
such information, (d) to have been otherwise known by the other party prior to
disclosure of such information by the disclosing party to the other party, or
(e) to have been independently developed by employees or agents of the other
party without the use of such information disclosed by the disclosing party to
the other party.
1.8. "DMF" shall mean the Drug Master File that relates to the API
and that Celgene shall maintain.
1.9. "FDA" shall mean the United States Food and Drug
Administration, and any successor agency thereto.
1.10. "FFDCA" shall mean the United States Federal Food Drug and
Cosmetic Act as amended from time to time.
1.11. "cGMPS" shall mean current Good Manufacturing Practices
promulgated by the FDA.
1.12. "HAZARDOUS WASTE" shall mean all waste that is defined as
hazardous by applicable federal, state, and local laws and regulations, to the
extent that such waste arises out of Penn's Processing and Packaging of
Commercial Products in accordance with this Agreement.
1.13. "IN-PROCESS MATERIALS" shall mean the API and the Raw
Materials with respect to a Batch during the time period beginning at the time
Penn begins Processing Commercial Products in accordance with the Master Batch
Formula and ending at the Penn Approval Date (as defined in clause 2.7.1.
herein).
1.14. "INTELLECTUAL PROPERTY" shall mean Celgene's and its
Affiliates' rights existing as of the date hereof and as may be developed
hereafter in and to all Confidential Information, proprietary information, trade
secrets, patent rights, technology, know-how, developments, improvements,
techniques, data, methods, processes, instructions, formulae, recipes, drawings
and specifications necessary to manufacture and supply the Commercial Products
hereunder.
2
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
1.15. "LABEL" OR "LABELING" shall mean (1) written, printed or
graphic materials, as set forth in the Master Packaging Record or (2) the act of
supplying written, printed or graphic materials, as set forth in the Master
Packaging Record, including (i) upon the Commercial Product, (ii) upon any
container or wrapper utilized with the Commercial Product, or (iii) accompanying
the Commercial Product, including, without limitation, package outserts.
1.16. "MD REPORT" or "MANUFACTURING DEVIATION REPORT" shall mean a
report indicating any deviation from the Processing and Packaging procedures set
forth in the Master Batch Record.
1.17. "MASTER BATCH FORMULA" shall mean the document containing the
formulas for API and Raw Materials and the description of the Process, as set
forth in EXHIBIT A.
1.18. "MASTER BATCH RECORD" shall mean the Master Batch Formula,
Master Packaging Record and Specifications, as such may be amended by the
parties pursuant to clause 2.3.1.
1.19. "MASTER PACKAGING RECORD" shall mean the document containing
the procedures and specifications for Packaging and Labeling, as set forth in
EXHIBIT B.
1.20. "MSDS" shall mean the Material Safety Data Sheet for the API.
1.21. "NDA" shall mean the New Drug Application for the Commercial
Product to be filed with the FDA by Celgene, and any supplements thereto.
1.22. "NON-CONFORMING BATCH" shall mean any Batch that does not
comply with the Specifications or any batch processed in violation of cGMPs.
1.23. "NON-HAZARDOUS WASTE" shall mean all rejected Commercial
Product or In-Process Materials or waste arising out of Processing and/or
Packaging, including without limitation, rejected or unusable Raw Materials or
API, disposable manufacturing equipment (including filters used in Processing
and Packaging), wash rinse, and previously used or discarded protective
clothing, except to the extent that any of the foregoing is Hazardous Waste.
1.24. "PACKAGE" or "PACKAGING" shall mean the procedures used in
packing the Commercial Products into containers, bottles, cartons, shipping
cases or any other like matter, or the materials thereof, as set forth in the
Master Packaging Record.
1.25. "PENN APPROVAL DATE" shall mean the date on which Penn's
quality assurance department approves each Batch for shipment in compliance with
the Master Batch Record.
1.26. "PERSON" shall mean an individual, corporation, partnership,
limited liability company, trust, business trust, association, joint stock
company, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization, governmental authority or any other form of entity not
specifically listed herein.
1.27. "PPI" shall mean the Producer Price Index for *** as published
by the Office of National Statistics in the UK.
3
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
1.28. "PROCESS" or "PROCESSING" shall mean the pharmaceutical
manufacturing procedures, or any part thereof, involved in manufacturing the
Commercial Product from the API and Raw Materials as set forth in the Master
Batch Formula.
1.29. "RAW MATERIALS" shall mean the excipients necessary for
Processing (exclusive of the API) as listed in the Master Batch Formula.
1.30. "RAW MATERIAL COST" shall mean the cost of Raw Materials used
to manufacture the Commercial Products, determined in accordance with generally
accepted accounting principles and consistent with Penn's accounting practices
for other manufactured products.
1.31. "SPECIFICATIONS" shall mean the appropriate standards of
identity, strength, quality and purity for the Raw Materials, API, In-Process
Materials and Commercial Product, and the Tests thereof, as set forth in EXHIBIT
C.
1.32. "STORE" or "STORAGE" shall mean the warehousing of Commercial
Products according to cGMP and other applicable U.S. laws and regulations
subject to clause 2.7.1.
1.33. "TEST" or "TESTING" shall mean the analytical procedures, as
applicable, for Raw Materials, API, In-Process Materials and Commercial Product
as set forth in the Specifications.
ARTICLE 2
MANUFACTURE, SUPPLY AND PURCHASE
2.1. LICENSE GRANT. Celgene hereby grants to Penn a non-exclusive
license to use and practice the Intellectual Property solely to manufacture the
Commercial Products for Celgene in accordance with the provisions of this
Agreement. The Intellectual Property licensed hereunder is sufficient to allow
Penn to perform its obligations hereunder. Except as provided in this clause
2.1, Penn acknowledges that it has no intellectual property rights in the
Commercial Products or in the API.
2.2. SUPPLY AND PURCHASE OBLIGATIONS. During the term of this
Agreement, Penn shall manufacture and supply Commercial Products exclusively for
Celgene. Celgene shall purchase a minimum *** percent (***) of its annual
requirements of Commercial Products from Penn pursuant to clause 2.6.4 below and
subject to clause 2.6.2 below unless Penn fails to supply conforming Commercial
Products (subject to clause 2.6.3 below) for any two (2) out of four (4)
consecutive calendar quarters. Upon the written request, and at the sole
expense, of Penn, Celgene shall permit an independent certified public
accounting firm, selected by Penn and reasonably acceptable to Celgene, to have
access during normal business hours to such of the records of Celgene as may be
reasonably necessary to verify that the Commercial Products supplied to Celgene
pursuant to this Agreement represents at least *** percent (***) of Celgene's
requirements during the preceding year.
2.3. MANUFACTURING PRACTICES.
2.3.1. MASTER BATCH RECORD. Penn shall Process, Test (unless
Penn is requested by Celgene to conduct a full analysis), Package and Label the
Commercial Products in conformity with the Master Batch Record. Unless otherwise
required by law, Penn shall not
4
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
make any changes to the Master Batch Record without prior written consent from
Celgene, which consent shall not be unreasonably withheld. Celgene shall notify
Penn in writing of any proposed changes to the Master Batch Record. Penn shall
use reasonable commercial efforts to promptly implement changes directed by
Celgene to the Master Batch Record at Celgene's sole expense, including, but not
limited to, any required capital equipment expenditures. The Price (as defined
in clause 3.1), shall be increased to incorporate the costs associated with any
such changes to the Master Batch Record as applicable. Penn shall notify Celgene
and obtain prior written approval (such approval shall not be unreasonably
withheld) for any proposed changes related to the Commercial Product outside the
Master Batch Record prior to their implementation by Penn.
2.3.2. REGULATORY COMPLIANCE. Penn shall manufacture the
Commercial Products in accordance with cGMPs and all applicable U.S. federal
laws and regulations.
2.3.3. TECHNICAL REQUIREMENTS. Penn shall comply with the
technical requirements set forth on EXHIBIT D.
2.4. RAW MATERIALS, LABELING AND PACKAGING.
2.4.1. RAW MATERIALS. Penn shall purchase the Raw Materials
necessary for manufacturing Commercial Products as specified in the Master Batch
Formula from vendors mutually agreed to in writing by the parties, the cost of
which shall be included in the Price.
2.4.2. LABELING AND PACKAGING. Penn shall acquire all
Labeling and Packaging for the Commercial Products to the bulk stage and such
Labeling and Packaging shall be in accordance with the Master Packaging Record,
the cost of which shall be included in the Price. Penn shall afford Celgene the
opportunity to approve, on a sample basis, and Celgene shall review and approve
the Labels for the Commercial Products so as to assure that the labels conform
to all applicable laws, rules, regulations and requirements of all appropriate
regulatory authorities. Should Celgene desire or be required to make any change
to any such Labels, Celgene shall revise and update all artwork and text
associated with such change and provide such changes to Penn or its Affiliates.
Penn shall make all commercially reasonable and necessary arrangements to print
such changed Labels and shall provide printer's proofs to Celgene for review and
approval. Celgene shall promptly provide Penn with any necessary corrections
thereto or notify Penn of its approval of such proofs. Celgene shall reimburse
Penn for the cost of preparing the printer's proofs, as well as all other costs
associated with such new Labels including, but not limited to, reimbursement of
costs relating to unusable or superseded Labels; provided, however, that Celgene
shall not be responsible for any such costs that result from Penn's failure to
act within commercially reasonable care and diligence.
2.5. API.
2.5.1. API DELIVERY. At least ninety (90) days prior to
Celgene's first firm purchase order submitted under clause 2.6.4, Celgene shall
identify the source of the API to Penn and shall furnish the API to Penn, free
of charge, in such quantities as are necessary to enable Penn to manufacture the
Commercial Products ordered. Celgene or its designee will ship to Penn the API
released with a certificate of analysis for the API.
5
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
2.5.2. API SEGREGATION. Penn shall keep all API segregated
from other materials within its reasonable control so as to maintain the
integrity of the substance and shall not allow any samples of the substance to
be used or Tested by any party not under its direct supervisory control for any
purposes. Penn shall perform only such Tests and analysis as it deems necessary
for this Agreement and shall maintain the confidentiality of such Test results
in compliance with clause 8 below. The API shall remain the property of Celgene
until used by Penn in the Processing.
2.5.3. API VERIFICATION. Penn shall verify the quantity and
quality of all API received by Penn according to the methods and procedures set
forth in the Specifications within sixty (60) days of receipt by Penn of the
API. Within such sixty (60) day period, Penn shall inform Celgene in writing of
any discrepancies in the quantity and/or quality of the API received and the
documents accompanying each shipment of the API.
2.5.4. TIMELY API DISCREPANCY. If Penn notifies Celgene of a
discrepancy in the quantity or quality of the API within such sixty (60) day
period, Celgene shall endeavor in good faith to ship additional API within the
time period necessary for Penn to manufacture Commercial Product in accordance
with the completion date for delivery of Commercial Product pursuant to the
applicable purchase order. Penn shall not be liable to Celgene for any losses,
liabilities or claims resulting directly or indirectly from the late delivery of
API by Celgene.
2.5.5. LEGAL NOTICE OF DISCREPANCY; OR API DAMAGE. If Penn
fails to inform Celgene of any discrepancy in the quantity or quality of the API
within such sixty (60) day period or if there is damage to the API within the
foregoing sixty (60) day period and Penn cannot demonstrate that such damage
occurred prior to delivery to Penn or if any such damage is the result of Penn's
failure to handle the API in accordance with the terms of this Agreement, then
Penn shall (a) at Penn's option return the API to Celgene or dispose of same
according to Celgene's instructions and (b) at Celgene's option, either (i)
purchase from Celgene replacement API for a value equal to Celgene's then
current API cost for the API that is lost, damaged or destroyed, or (ii) credit
Celgene on it's next invoice for an amount equal to Celgene's then-current cost
for such API.
2.5.6. OTHER API DAMAGE OR LOSS. Subject to Celgene
notifying Penn of the replacement value of the API at or about the time Penn
receives such item, Penn shall assume responsibility and liability for, and
shall defend, indemnify and hold Celgene harmless from and against, any loss of
or damage to the API while Penn has custody and control over the API, In-Process
Materials and/or the finished Commercial Product. Such responsibility and
liability shall commence upon Penn's receipt of the API at Penn's manufacturing
facility and end upon the delivery of the Commercial Product to a common carrier
at the manufacturing facility for shipment to Celgene. Without limiting the
generality of the foregoing, lost or damaged API shall be disposed of and
replaced or credited as provided in clause 2.5.5.
2.6. FORECASTS AND ORDERS.
2.6.1. FORECASTS. Beginning with the first full calendar
quarter, not less than forty-five (45) days prior to the first day of each
calendar quarter, Celgene shall prepare and provide Penn with a written forecast
of the estimated Commercial Product requirements of
6
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
Celgene and its Affiliates for each of the following four (4) calendar quarters.
Without the prior written consent of Penn, Celgene shall not increase or
decrease the quantity estimated for the first calendar quarter of each forecast
by more than twenty-five percent (25%) from the quantity estimated for the
second calendar quarter of the previous forecast.
2.6.2. PURCHASE REQUIREMENTS. Celgene shall be required to
purchase not less than one hundred percent (100%) of the quantity of Commercial
Product forecasted for such first calendar quarter in the most recent forecast
under clause 2.6.1 above.
2.6.3. SUPPLY REQUIREMENTS. Each calendar quarter, Penn
shall manufacture, supply and deliver to Celgene such quantities of Commercial
Products as Celgene orders pursuant to clause 2.6.4 below, up to one hundred
percent (100%) of the quantity forecasted for such calendar quarter in the most
recent forecast under clause' 2.6.1 above. Penn shall use its commercially
reasonable efforts to manufacture and supply to Celgene any quantities of
Commercial Products as Celgene orders pursuant to clause 2.6.4 below, in excess
of one hundred percent (100%) of the quantity forecasted for such calendar
quarter in the most recent forecast under clause 2.6.1 above, provided that
Celgene has furnished Penn with the necessary amount of API pursuant to clause
2.5.1 above to enable Penn to manufacture the additional quantity. If Penn
becomes aware of any circumstances that may cause Penn to default in its
obligation above to deliver such quantities of conforming Commercial Products as
Celgene forecasted for any calendar quarter, Penn shall give Celgene prompt
written notice describing such circumstances, together with a proposed course of
action to remedy such failure; provided, however, that the provision of such
notice shall not relieve Penn of its delivery obligations hereunder.
2.6.4. ORDERS. Celgene shall purchase Commercial Product
hereunder by submitting firm purchase orders to Penn. Each purchase order shall
be in writing in a form reasonably acceptable to Penn, and shall specify the
Commercial Products ordered, the quantity ordered and the required delivery date
therefor, which shall not be less than ninety (90) days after the date of such
purchase order. The minimum size of any order for Commercial Products shall be a
single Batch with larger orders being in whole number multiples of a Batch. In
the event of a conflict between the terms and conditions of any purchase order
and this Agreement, the terms and conditions of this Agreement shall prevail.
2.7. STORAGE, DELIVERY AND ACCEPTANCE.
2.7.1. STORAGE. Penn shall have no obligation to Store the
Commercial Product and may ship the Commercial Product to Celgene immediately
following the Penn Approval Date.
2.7.2. DELIVERY. All Commercial Products supplied under this
Agreement shall be shipped F.O.B. Penn's place of manufacture. Celgene shall pay
all freight, insurance charges, taxes (excluding Value Added Tax ("VAT")),
import and export duties, inspection fees and other charges applicable to the
sale and transport of Commercial Products purchased by Celgene hereunder. Title
and risk of loss and damages to Commercial Products purchased by Celgene
hereunder shall pass to Celgene upon delivery to Celgene's designated carrier.
Penn shall provide a copy of a complete and accurate Batch Record to Celgene
within five (5) business days following the Penn Approval Date for the
applicable Batch of Commercial Products.
7
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
2.7.3. REJECTION AND CURE.
(i) REJECTION. The Batch Records shall be
accepted as complete and accurate unless Celgene notifies Penn in writing within
thirty (30) days of delivery of Commercial Products that Celgene has determined
that either the Commercial Products do not conform to the Specifications or that
the Batch Records are not complete; provided, however, in the case of Commercial
Product having latent defects, which upon diligent examination in accordance
with all quality control testing procedures set out in the Specifications upon
receipt could not have been discovered, Celgene must give notice to Penn within
twenty (20) days after discovery of such defect, setting forth the specific
basis for such rejection. Upon written notification by Celgene of a deficient
Batch Record or Non-Conforming Batch, Penn shall review the specific basis for
such rejection and upon acceptance of such rejection, Penn shall correct the
deficiency to the Batch Record or replace the Non-Conforming Batch or
non-conforming portion thereof within forty-five (45) business days with no
additional cost to Celgene (subject to clause 2.7.3 (ii) below).
(ii) DISPUTES. If prior to either Celgene's
acceptance of the Batch Record, or Celgene's notification to Penn of latent
defects, the parties disagree concerning whether the Commercial Product meets
Specifications or whether the Batch Records are complete, either party may
request, in writing, at any time, that an independent laboratory be used to
determine whether the Commercial Product meets Specifications. Thereafter, the
parties shall, within fourteen (14) days, promptly name a reputable and mutually
acceptable independent laboratory (the "Laboratory") that has been or will be
qualified for the appropriate testing method(s) set forth in the NDA and in the
absence of agreement by the parties, the dispute shall be referred to the
laboratory used by the Home Office Forensic Science Service from time to time.
The Laboratory shall Test the Commercial Product for compliance with the
Specifications, and such Test results obtained by the Laboratory shall be final
and controlling.
(iii) CURE. If the Laboratory determines that the
Commercial Product meets Specifications, Celgene shall (1) pay to Penn the
amount invoiced for such Commercial Product pursuant to clause 3.2 below, and
all other expenses reasonably attributable or resulting from the Laboratory
referral and (2) pay to the Laboratory the amount of the fees charged by the
Laboratory for such Testing. If the Laboratory findings indicate that such
sample fails to conform to the applicable Specifications, then Penn shall (a)
replace each non-conforming shipment of Commercial Products, or the
non-conforming portion thereof, with conforming Commercial Products as soon as
reasonably practicable and in any event within forty-five (45) business days
after receipt of the Laboratory findings with no additional cost to Celgene; (b)
pay to the Laboratory the amount of the fees charged by the Laboratory for such
Testing and all other expenses reasonably attributable or resulting from the
Laboratory referral; and (c) reimburse Celgene for the required additional API
necessary to manufacture conforming Commercial Product.
2.7.4. COVER. If Penn fails to timely deliver to Celgene the
quantity of conforming Commercial Products that Celgene orders under any
purchase order pursuant to clause 2.6.4 above (subject to clauses 2.6.3 and
2.7.3 above), after providing written notice to Penn, Celgene shall have the
right to purchase substitute Commercial Products from a third party in
substitution for the quantity of conforming Commercial Products which Penn
failed to deliver
8
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
hereunder. Penn shall reimburse Celgene within fourteen (14) days for the
difference between the cost of obtaining such substitute Commercial Products
(plus any commercially reasonable charges, expenses or commissions incurred by
Celgene in connection with effecting cover, and any other reasonable expenses
incident to such failure), less the price which would have been due to Penn for
the like quantity of Commercial Products if supplied by Penn hereunder, provided
always that Celgene shall be obliged to use its reasonable commercial efforts to
purchase the substitute Commercial Products at the best price available in the
open market and on the best commercial terms available. Any purchase by Celgene
under this clause 2.7.4 shall be deemed a purchase from Penn for the purposes of
calculating Celgene's annual purchase requirements hereunder.
ARTICLE 3
PRICE AND PAYMENT TERMS
3.1. PRICE. Celgene shall purchase from Penn all Commercial
Products which are accepted pursuant to clause 2.6 above at a price equal to
that quoted in Penn proposal number ***, per Batch, subject to clause 2.3.1
above, clause 3.2 below and the Technical Requirements in Exhibit D (the
"Price"). On each anniversary of the date of first manufacture of Commercial
Product, Penn may increase the Price based on the greater price increase of
either PPI or Raw Material Cost during the preceding year. Such new Price shall
be effective for all orders received by Penn after written notice of such
increase by Penn to Celgene, such notice, showing in reasonably specific detail
the calculation of such increase.
3.2. INVOICING. Upon shipment of Commercial Products to Celgene,
Penn shall submit invoices therefore to Celgene. Celgene shall pay each invoice
in full within *** days after the date of Celgene's receipt of such invoice
(subject to clause 2.7.3 above). Invoices will be issued in US Dollars whereby
the conversion to US Dollars will be based upon the currency exchange rate that
is prevailing on the day the invoice is issued as published in the Financial
Times.
3.3. SALES AND USE TAXES. Celgene shall be solely responsible for
the payment of all federal, state, or local sales, use, excise or similar
charge, or other tax assessment (other than that assessed against income, and
VAT), assessed or charged on the sale of Commercial Products sold pursuant to
this Agreement.
3.4. AUDIT RIGHT. Upon the written request of Celgene and not more
than once in each calendar year, Penn shall permit an independent certified
public accounting firm, selected by Celgene and reasonably acceptable to Penn,
to have access during normal business hours to such of the records of Penn as
may be reasonably necessary to verify the accuracy of Penn's calculation of any
price increase hereunder for any period ending not more than thirty-six (36)
months prior to the date of such request. The accounting firm shall disclose to
Celgene only whether the calculations are correct or not and the specific
details concerning any discrepancies. If such accounting firm concludes that the
price increase was overstated during the audited period, Penn shall reimburse
Celgene for the amount overpaid by Celgene hereunder for such period within
thirty (30) days of the date Celgene delivers to Penn such accounting firm's
written report. The fees and expenses charged by such accounting firm shall be
paid by Celgene; PROVIDED, HOWEVER, if the audit discloses that the price
increase was overstated during the audited
9
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
period by more than five percent (5%), then Penn shall pay the accounting firm's
reasonable fees and expenses.
ARTICLE 4
FURTHER OBLIGATIONS OF THE PARTIES
4.1. REGULATORY CORRESPONDENCE. Penn and Celgene shall make
available (or cause to be made available) to each other as soon as practicable
(but in any event within five (5) days) of receipt of regulatory correspondence
regarding regulatory letters, recalls, adverse experiences and all other
regulatory correspondence bearing on the safety and efficacy of the Commercial
Products which may concern chemistry, manufacturing and control (CMC) issues.
4.2. PRODUCT INQUIRIES AND COMPLAINTS. Celgene will promptly submit
to Penn all Commercial Product safety and efficacy inquiries, Commercial Product
quality complaints and adverse drug event reports received by it which may
concern CMC issues, together with all available evidence and other information
relating thereto. Except as otherwise required by law or governmental
regulation, Celgene will be responsible for investigating and responding to all
such inquiries, complaints and adverse events regarding Commercial Product. It
shall be the responsibility of Celgene to comply with all federal, state and
local governmental reporting requirements regarding adverse drug events and
Commercial Product quality matters, except where such events or matters are
caused by acts or omissions of Penn, in which case Celgene may, consistent with
applicable law and regulation, request Penn's assistance in such compliance.
Celgene will forward a copy of FDA submissions concerning CMC issues within ten
(10) business days of submission.
4.3. RECALL. In the event either party believes it may be necessary
to conduct a recall, field correction, market withdrawal, stock recovery, or
other similar action with respect to any Commercial Products which were sold by
Penn or its Affiliates to Celgene or its Affiliates under this Agreement (a
"Recall"), Penn and Celgene shall consult with each other as to how best to
proceed, it being understood and agreed that the final decision as to any Recall
of any Commercial Product shall be made by Celgene; provided, however, that Penn
shall not be prohibited hereunder from taking any action that it is required to
take by applicable law. Celgene shall bear all costs in connection with any such
Recall; provided, however, that Penn shall reimburse Celgene for all reasonable
out-of-pocket expenses incurred by Celgene in connection with any such Recall
attributable to any negligence on the part of Penn or as a result a latent
defect as set out in clause 2.7.3.
4.4. RESPONSE TO COMPLAINTS AND/OR ADVERSE DRUG EVENTS. Pursuant to
any reported complaint and/or adverse drug event, if the nature of the reported
complaint and/or adverse drug event requires Testing, Penn will, at Celgene's
reasonable request and expense, perform analytical Testing according to the
Specifications of corresponding retention samples and provide the results
thereto to Celgene as soon as reasonably practicable; PROVIDED, HOWEVER, Penn
shall be responsible for the reasonable costs of such Testing and reporting to
the FDA or any other governmental regulatory agency if it is determined that
such reported complaint and/or adverse drug event is attributable to any
negligence on the part of Penn or as a result of a latent defect as set out in
clause 2.7.3.
10
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
4.5. ADDITIONAL WORK. If Celgene requires additional work from Penn
related to the Commercial Products not specified herein, including, but not
limited to, stability testing, such work, if accepted by Penn in its sole
discretion, shall be accomplished on a purchase order basis and is beyond the
scope of this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.1. GENERAL WARRANTIES. Each party hereby represents and warrants
to the other party as follows:
5.1.1. CORPORATE EXISTENCE. Such party is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated.
5.1.2. AUTHORIZATION AND ENFORCEMENT OF OBLIGATIONS. Such
party (a) has the corporate power and authority and the legal right to enter
into this Agreement and to perform its obligations hereunder, and (b) has taken
all necessary corporate action on its part to authorize the execution and
delivery of this Agreement and the performance of its obligations hereunder.
This Agreement has been duly executed and delivered on behalf of such party, and
constitutes a legal, valid, binding obligation, enforceable against such party
in accordance with its terms.
5.1.3. CONSENTS. All necessary consents, approvals and
authorizations of all governmental authorities and other Persons required to be
obtained by such party in connection with its performance of this Agreement have
been obtained.
5.1.4. NO CONFLICT. The execution and delivery of this
Agreement and the performance of such party's obligations hereunder (a) do not
conflict with or violate any requirement of applicable laws or regulations, and
(b) do not conflict with, or constitute a default under, any material
contractual obligation of such party.
5.1.5. INSURANCE. Each party shall maintain comprehensive
general liability insurance, including product liability insurance against
claims regarding the manufacture of Commercial Products under this Agreement, in
such amounts as it customarily maintains for similar products and activities.
Each party shall maintain such insurance during the term of this Agreement and
thereafter for so long as it customarily maintains insurance for itself for
similar products and activities. Each party shall provide the other proof of
such insurance upon the request of the other party from time to time, and give
the other party at least thirty (30) days notice of any cancellation,
termination or change in such insurance. Either party may substitute a
self-insurance program on notice to the other party with information
demonstrating to the reasonable satisfaction of the other party the adequacy of
such program.
5.2. PENN'S WARRANTIES. During the term of this Agreement, Penn
hereby represents and warrants as follows:
5.2.1. MANUFACTURING METHODS. Penn shall Process, Test,
Package and Label the Commercial Products in accordance with the Master Batch
Record, and with any regulations
11
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
applicable to the manufacture of the Commercial Product of the FDA and any other
applicable U.S. regulatory agencies. The Commercial Product shall, at the time
it is shipped to Celgene,
(i) not be adulterated or misbranded within the
meaning of the FFDCA or within the meaning of any applicable state or municipal
law in which the definitions of adulteration and misbranding are substantially
the same as those contained in the FFDCA;
(ii) not be articles that may not, under Section
505 of the FFDCA or any other provision of the FFDCA or any other applicable
law, statute or regulation, be introduced into interstate commerce;
(iii) have been manufactured, processed, and
packed in compliance with all requirements under the FFDCA (including drug
establishment registration and applicable good manufacturing practice) or under
any other applicable laws, rules, or regulations of the United States; and
(iv) conform to the Specifications for the
Commercial Products as documented on the Master Batch Record
5.2.2. REGULATORY COMPLIANCE. Penn shall comply in all
material respects with any law, regulation, ordinance, order, injunction, decree
or governmental requirement applicable to the manufacture of the Commercial
Product, the handling of the Hazardous Waste prior to pick-up by the waste
contractor, and the handling and disposal of the Non-Hazardous Waste.
5.2.3. LICENSING REQUIREMENTS. Penn shall maintain in effect
all required governmental permits, licenses, orders, applications and approvals
necessary for the Processing, Testing, Packaging, and Labeling and Penn shall
Process, Test, Package and Label in accordance with all such permits, licenses,
orders, applications and approvals.
5.2.4. PROMPT RESPONSE. Penn shall promptly respond to all
reasonable inquiries from Celgene pertaining to the Commercial Product.
5.2.5. PROMPT DELIVERY. Without limiting the other
provisions of this Agreement, Penn shall use its commercially reasonable efforts
at all times to minimize Commercial Product delivery time.
5.2.6. DISCLAIMER. PENN MAKES NO OTHER WARRANTIES, EXPRESS
OR IMPLIED, WITH RESPECT TO THE COMMERCIAL PRODUCTS INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE.
5.3. CELGENE'S WARRANTIES. During the term of this Agreement,
Celgene hereby represents and warrants as follows:
5.3.1. API Integrity. The API shall, at the time it is
shipped to Penn,
12
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
(i) not be adulterated or misbranded within the
meaning of the FFDCA or within the meaning of any applicable state or municipal
law in which the definitions of adulteration and misbranding are substantially
the same as those contained in the FFDCA;
(ii) not be articles that may not, under Section
505 of the FFDCA or any other provision of the FFDCA or any other applicable
law, statute or regulation, be introduced into interstate commerce;
(iii) have been manufactured, processed, and
packed in compliance with all requirements under the FFDCA (including drug
establishment registration and applicable good manufacturing practice) or under
any other applicable laws, rules, or regulations of the United States; and
(iv) conform to the Specifications for the API as
documented on the certificate of analysis included with each delivery of API.
5.3.2. PROMPT RESPONSE. Celgene shall promptly respond to
all reasonable inquiries from Penn pertaining to the Commercial Products.
5.3.3. REGULATORY DOSSIERS. Celgene shall assume all
responsibility for maintaining the DMF, NDA, and any supplements thereto,
including making additional filings with the FDA.
5.3.4. NECESSARY LICENSES. Celgene shall, at its own cost,
obtain and maintain any and all Federal and state licenses with respect to the
marketing, sale and distribution of the Commercial Products.
ARTICLE 6
INDEMNIFICATION AND LIABILITY
6.1. PENN'S INDEMNITY OBLIGATIONS. Subject to clauses 6.2 and 6.5
below, Penn shall indemnify and hold harmless Celgene, its Affiliates and their
respective successors and permitted assigns (and the respective officers,
directors, stockholders, partners and employees of each) (together the "Celgene
Indemnitees") from and against any and all costs, losses, liabilities, claims,
actions, proceedings, damages and expenses (including without limitation
reasonable attorneys' fees and expenses) (herein "Damages") to the extent that
such Damages relate to or arise (a) from the manufacture of the Commercial
Products by Penn not in conformance with the Master Batch Record, (b) any breach
by Penn or its Affiliates of this Agreement; or (c) any breach by Penn of any
representation, warranty or obligation herein, provided however, Penn shall have
no obligation to indemnify Celgene to the extent such Damages relate to Penn's
use or any use by Penn's Affiliates of the Intellectual Property
6.2. EXCLUSION OF LIABILITY. Subject to clause 6.4, neither party
shall under any circumstances be liable for any indirect, special or
consequential loss, or loss of anticipated profit or loss of profit howsoever
arising whether in contract, tort (including negligence) or breach of statutory
duty or otherwise except with respect to the indemnity obligations provided for
under clauses 6.1 and 6.3 as they may relate to damages awarded and/or
settlement monies paid to third
13
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
parties in relation to death or personal injury claims asserted by such third
parties ("Third Party Damages") arising out of negligence or willful misconduct
and consequently, for the avoidance of doubt:
nothing in this Agreement shall limit the type of Damages against which
the Celgene Indemnitees are entitled to be indemnified and held harmless
pursuant to clause 6.1 to the extent that such Damages comprise Third Party
Damages caused by Penn's negligence or willful misconduct; and
nothing in this Agreement shall limit the type of Damages against which
the Penn Indemnitees are entitled to be indemnified and held harmless pursuant
to clause 6.3 to the extent that such Damages comprise Third Party Damages
caused by Celgene's negligence or willful misconduct.
6.3. CELGENE'S INDEMNITY OBLIGATIONS. Celgene shall indemnify and
hold harmless Penn, its Affiliates, and their respective successors and
permitted assigns (and the respective officers, directors, stockholders,
partners and employees of each) (together the "Penn Indemnitees") and keep the
Penn Indemnitees indemnified against all Damages (including but not limited to
any Damages arising out of claims, actions or litigation brought by third
parties relating to the use of Intellectual Property by any Penn Indemnitee) in
connection with or arising out of any use of any API or Commercial Products by
any Penn Indemnitee, Celgene or any third party (which third party shall include
but not be limited to permitted sub-contractors assigns and agents in addition
to consumers and end-users) provided that this indemnity shall not operate to
the extent that such Damages have arisen out of (a) the manufacture of the
Commercial Products not in conformance with the Master Batch Record, or (b) any
breach by any Penn Indemnitee of this Agreement, including any representation,
warranty or obligation herein. Said "any use of any API or Commercial Products"
with respect to any Penn Indemnitee shall mean any use that occurs in the course
of performing under this Agreement.
6.4. NO EXCLUSION. Notwithstanding any other provision of this
Agreement neither party seeks to exclude liability for loss arising from death
or personal injury caused by negligence or willful misconduct.
6.5. LIMITATION OF LIABILITY. Subject to clause 6.4 the aggregate
liability of Penn (whether in contract, tort (including negligence) or breach of
statutory duty or otherwise) to Celgene for any Damages (whether asserted by
Celgene or third parties) of whatever nature and however caused, other than any
Third Party Damages, shall be limited to and in no circumstances shall exceed
the greater of:
two times the Price paid to Penn for the Commercial Products from which
such damage flowed; or
in relation to a bona fide claim brought against Penn for which Penn
has insurance, monies recovered by Penn from its insurers; or
14
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
in relation to a bona fide claim brought against Penn for which Penn
has insurance, monies which would have been recovered by Penn from its insurers
had Penn taken all appropriate steps in a timely manner to make a claim under
any relevant insurance policy.
6.6. PROCEDURES. A party (the "indemnitee") that intends to claim
indemnification under this clause 6 shall notify the other party (the
"indemnitor") promptly in writing of any action, claim or liability in respect
of which the indemnitee believes it is entitled to claim indemnification,
provided that the failure to give timely notice to the indemnitor shall not
release the indemnitor from any liability to the indemnitee except to the extent
the indemnitor is prejudiced thereby. The indemnitor shall have the right, by
notice to the indemnitee, to assume the defense of any such action or claim
within the fifteen (15) day period after the indemnitor's receipt of notice of
any action or claim with counsel of the indemnitor's choice and at the sole cost
of the indemnitor. If the indemnitor so assumes such defense, the indemnitee may
participate therein through counsel of its choice, but at the sole cost of the
indemnitee; PROVIDED, HOWEVER, that the indemnitor shall be obligated to pay
fees and expenses of such indemnitee's counsel if representation of the
indemnitee by the counsel retained by the indemnitor would be inappropriate due
to actual or potential differing interests between the indemnitee and any other
party represented by such counsel in the investigation and defense of any such
action, claim or liability. The party not assuming the defense of any such claim
shall render all reasonable assistance to the party assuming such defense, and
all reasonable out-of-pocket costs of such assistance shall be for the account
of the indemnitor. No such claim shall be settled other than by the party
defending the same, and then only with the consent of the other party which
shall not be unreasonably withheld; provided that the indemnitee shall have no
obligation to consent to any settlement of any such action or claim which
imposes on the indemnitee any liability or obligation which cannot be assumed
and performed in full by the indemnitor, and the indemnitee shall have no right
to withhold its consent to any settlement of any such action or claim if the
settlement involves only the payment of money by the indemnitor or its insurer.
6.7. LIMITATIONS ON INDEMNIFICATION. Notwithstanding any contrary
provision herein, including, but not limited to, clause 6.3 above, neither party
shall be entitled to indemnification with respect to any claim or suit to the
extent such claim or suit results from (1) its own or any of its Indemnitee's
gross negligence or (2) willful misconduct on its or any of its Indemnitee's
part
ARTICLE 7
RELATIONSHIP BETWEEN THE PARTIES
7.1. INDEPENDENT CONTRACTOR. The relationship between Penn and
Celgene is solely that of seller and buyer, it being understood that each party
is acting as an independent contractor for its own account and this Agreement
does not establish a joint venture, agency, partnership or employer/employee
relationship between the parties. Neither party shall have authority to conclude
contracts or otherwise to act for or bind the other party in any manner,
whatsoever, as agent or otherwise. Any and all contracts and agreements entered
into by either party shall be for that party's sole account and risk and shall
not bind the other party in any respect.
15
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
ARTICLE 8
CONFIDENTIALITY AND PUBLIC DISCLOSURE
8.1. CONFIDENTIALITY. Except for literature and information
intended for disclosure to customers, and except as may be required to obtain
government approval to manufacture, sell or use the Commercial Products, each
party will treat as confidential the Confidential Information, and will take all
necessary precautions to assure the confidentiality of such information. Each
party agrees to return to the other party upon the expiration or termination of
this Agreement all Confidential Information acquired from such other party,
except as to such information it may be required to retain under applicable law
or regulation, and except for one (1) copy of such information to be retained by
such party's legal department solely to monitor compliance hereunder. Neither
party shall, during the period of this Agreement or for five (5) years
thereafter, without the other party's express prior written consent use or
disclose any such Confidential Information for any purpose other than to carry
out its obligations hereunder. Each party, prior to disclosure of such
Confidential Information to any employee, consultant or advisor shall ensure
that such person is bound in writing to observe the confidentiality provisions
of this Agreement. The obligations of confidentiality shall not apply to
information that the receiving party is required by law or regulation to
disclose, provided however that the receiving party shall so notify the
disclosing party of its intent and cooperate with the disclosing party on
reasonable measures to protect the confidentiality of the information.
8.2. PUBLIC DISCLOSURE. Except for such disclosure as is deemed
necessary, in the reasonable judgment of a party, to comply with applicable
laws, no announcement, news release, public statement, publication, or
presentation relating to the existence of this Agreement, the subject matter
hereof, or either party's performance hereunder will be made without the other
party's prior written approval, which approval shall not be unreasonably
withheld or delayed.
ARTICLE 9
TERM AND TERMINATION
9.1. TERM. Unless terminated earlier pursuant to clause 9.2 below,
the initial term of this Agreement shall expire on the date *** years after the
date hereof; PROVIDED, HOWEVER, that the term of this Agreement shall be
automatically extended for up to *** successive additional terms of ***
thereafter unless either party gives to the other not less than *** written
notice of termination prior to the expiration of the initial term, or any
additional term, of this Agreement.
9.2. TERMINATION.
9.2.1. BY EITHER PARTY. A party shall have the right to
terminate this Agreement, upon or after the breach of any material provision of
this Agreement by the other party if the other party has not cured such breach
within thirty (30) days (or ten (10) days in event of a payment default) after
receipt of written notice thereof from the non-breaching party describing such
breach in reasonable detail.
9.2.2. BY CELGENE. Celgene shall have the right to terminate
this Agreement, on sixty (60) days written notice to Penn, if Penn fails to
deliver to Celgene such quantities of
16
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
conforming Commercial Products as Celgene orders pursuant to clause 2.6.4 above
(subject to clause 2.6.3 above) for any two (2) out of four (4) consecutive
calendar quarters.
9.2.3. EFFECT OF EXPIRATION AND TERMINATION. Expiration or
termination of this Agreement shall not relieve the parties of any obligation
accruing prior to such expiration or termination. The provisions of clauses
2.5.5, 2.5.6, 2.7.3, 2.7.4, 3.4, 4.3, 4.4, 5.1.5, 5.2.4, 5.3.2 and 9.2.3 and
Articles 6, 8 and 10 shall survive any expiration or termination of this
Agreement. Upon termination or expiration, each party shall immediately deliver
to the other (and cause each of its employees, agents and representatives to so
deliver), at such party's expense, all Confidential Information of the other
party, including without limitation any and all copies, duplications, summaries
and/or notes thereof or derived therefrom, regardless of the format, except as
to such information it may be required to retain under applicable law or
regulation, and except for one (1) copy of such information to be retained by
such party's legal department solely to monitor compliance hereunder. The
following purchase obligations shall survive Termination under this clause 9.2:
(i) In the event that Penn terminates this
Agreement pursuant to clause 9.2.1 (Celgene's breach), Celgene shall purchase
Penn's inventory of Raw Materials, Packaging, Labeling, In-Process Materials and
Commercial Products that conform to the Master Batch Record at the prices paid
by Penn for such items, as reasonably documented by Penn.
ARTICLE 10
MISCELLANEOUS
10.1. FORCE MAJEURE. Neither party shall incur any liability to the
other to the extent that it is delayed in the performance of its obligations
hereunder solely by force majeure. For the purpose of this Agreement "force
majeure" shall mean any cause of delay beyond the reasonable control of the
party liable to perform unless conclusive evidence to the contrary is provided
and shall include but not be limited to strikes, lockouts, industrial
disturbance, riots, sabotage, act of war or piracy, destruction of essential
equipment by fire, explosion, storm, flood, earthquake, or delay caused by
failure of power supplies or transport facilities, inability to obtain materials
(that is beyond Penn's control) or government action including but not limited
to priorities and quotas.
10.2. NOTICES. All notices or other communications given pursuant
hereto by one party hereto to the other party shall be in writing and deemed
given (a) when delivered by messenger, (b) when sent by telecopier, (with
receipt confirmed), (c) when received by the addressee, if sent by Express Mail,
Federal Express or other express delivery service (receipt requested), or (d)
five days after being mailed in the U.S., first-class postage prepaid,
registered or certified, in each case to the appropriate addresses and
telecopier numbers set forth below (or to such other addresses and telecopier
numbers as a party may designate as to itself by notice to the other party):
If to Penn, to it at:
Penn Pharmaceutical Services Ltd
Xxxx 00 & 00
Xxxxxxxxxxxx Xxxxxxxxxx Xxxxxx
17
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Xxxxxxxx Xxxxxxxxxx.
Xxxxxxxx,
Xxxxx
XX00 0XX
Attention: ***
Telecopier: x00 0000 000000
with a copy to:
Xxxxxxxxx Xxxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx,
X0 0XX
Attention: ***
Telecopier No.: x00 000 000 0000
If to Celgene, to it at:
Celgene Corporation
0 Xxxxxx Xxxx Xxxxx
Xxxxxx, XX 00000
Attention: Chief Operating Officer
Telecopier No.: (000) 000-0000
with a copy to:
Proskauer Rose, LLP
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: ***
Telecopier No.: (000) 000-0000
10.3. ASSIGNMENT. Neither party shall assign or transfer this
Agreement to any Person, in whole or in part, provided that, each party may
assign or transfer this Agreement to any Affiliate or to any successor by merger
of such party or its pharmaceutical business to which this Agreement relates, or
upon a sale of all or substantially all of such parties assets, or the assets of
its pharmaceutical business to which this Agreement relates, without the prior
written consent of the other party hereto (not to be unreasonably withheld or
delayed). All of the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the parties hereto and
their respective successors and permitted assigns.
10.4. SEVERABILITY. If any portion of this Agreement is held invalid
by a court of competent jurisdiction, such portion shall be deemed to be of no
force and effect and the Agreement shall be construed as if such portion had not
been included herein, provided however, if the deletion of such provision
materially impairs the commercial value of this Agreement to either party, the
parties shall attempt to renegotiate such provision in good faith.
18
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
10.5. ENTIRE AGREEMENT. This Agreement and all Exhibits attached
hereto contain the sole and entire agreement and understanding of the parties
hereto and their respective Affiliates and representatives related to the
subject matter hereof and supersede all oral or written agreements concerning
the subject matter made prior to the date of this Agreement.
10.6. AMENDMENT: WAIVER. This Agreement cannot be amended, changed,
modified or supplemented orally, and no amendment, change, modification or
supplement of this Agreement shall be recognized nor have any effect, unless the
writing in which it is set forth is signed by Penn and Celgene, nor shall any
waiver of any of the provisions of this Agreement be effective unless in writing
and signed by the party to be charged therewith. The failure of either party to
enforce, at any time, or for any period of time, any provision hereof or the
failure of either party to exercise any option herein shall not be construed as
a waiver of such provision or option and shall in no way affect that party's
right to enforce such provision or exercise such option. No waiver of any
provision hereof shall be deemed to be, or shall constitute, a waiver of any
other provision, or with respect to any succeeding breach of the same provision.
10.7. GOVERNING LAW, DISPUTE RESOLUTION, ARBITRATION. This Agreement
shall be governed by, and construed in accordance with, the laws of the State of
New Jersey and the United States, as though made and to be fully performed
therein without regard to conflicts of laws principles thereof.
The parties shall initially attempt in good faith to resolve any
significant controversy, claim, allegation of breach or dispute arising out of
or relating to this Agreement (hereinafter collectively referred to as a
"Dispute") through negotiations between senior executives of Celgene and Penn.
If the Dispute is not resolved within thirty (30) days (or such other period of
time mutually agreed upon by the parties) of notice of the Dispute (the
"Executive Resolution Period"), then the parties agree to submit the Dispute to
arbitration as provided herein. Unless otherwise mutually agreed by the parties,
only if the Dispute is not resolved through negotiations as set forth herein,
may a party resort to arbitration.
All Disputes relating in any way to this Agreement shall be resolved
exclusively through arbitration conducted in accordance with the Commercial
Arbitration Rules of the American Arbitration Association as then in effect. In
the event either party demands arbitration, it shall do so within thirty (30)
days after the expiration of the Executive Resolution Period (or any mutually
agreed extension) and shall include a request that such arbitration be held
within thirty (30) days of such demand. The arbitration hearing shall be held as
soon as practicable. The arbitration hearing shall be held in Chicago, Illinois
and shall be before a single arbitrator selected by the parties in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
pursuant to its rules on selection of arbitrators. The arbitrator shall render a
formal, binding, non-appealable resolution and award on each issue as
expeditiously as possible but not more than ten (10) business days after the
hearing. In any arbitration, the prevailing party shall be entitled to
reimbursement of its reasonable attorneys' fees and the parties shall use all
reasonable efforts to keep arbitration costs to a minimum.
10.8. SINGULAR AND PLURAL FORMS. The use herein of the singular form
shall also denote the plural form, and the use herein of the plural form shall
denote the singular form, as in each case the context may require.
19
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
10.9. HEADINGS. The headings contained in this Agreement are for
convenience of reference only and shall not constitute a part hereof or define,
limit or otherwise affect the meaning of any of the terms or provisions hereof.
10.10. NO THIRD PARTY BENEFICIARIES. Except as expressly set forth
herein, this Agreement shall not create, or be construed to create, any rights
enforceable by any Person not a party to this Agreement.
10.11. COUNTERPARTS. This Agreement maybe executed in two (2)
counterparts, each of which shall be deemed an original, but both of which, when
taken together, shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
20
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers as of the date first above
written.
PENN PHARMACEUTICAL SERVICES LTD
By: ***
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Name: ***
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Title: ***
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CELGENE CORPORATION
By: ***
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Name: ***
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Title: ***
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21
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.\
