Manufacturing Services Agreement Between Patheon Pharmaceuticals Inc. And New River Pharmaceuticals Inc. August 18, 2006
Exhibit
10.23
CONFIDENTIAL
TREATMENT
“Subject
to a request for confidential treatment, certain provisions of this agreement
have been intentionally omitted. The omitted portions subject to the
confidential treatment are designated by three asterisks (***). A complete
version of this agreement has been separately filed with the Securities and
Exchange Commission.”
Between
Patheon
Pharmaceuticals Inc.
And
August
18, 2006
CONFIDENTIAL
TREATMENT
Table
of Contents
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ARTICLE
1 INTERPRETATION
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1
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|
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1.1
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Definitions
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1
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1.2
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Currency
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4
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1.3
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Sections
and Heading
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4
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1.4
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Singular
Terms
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5
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1.5
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Schedules
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5
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ARTICLE
2 PATHEON’S MANUFACTURING RESPONSIBILITIES
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6
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2.1
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Manufacturing
Services
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6
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2.2
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Standard
of Performance
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7
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2.3
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Failure
to Supply
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7
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2.4
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Active
Material Yield
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7
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ARTICLE
3 NEW RIVER’S OBLIGATIONS
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9
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3.1
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Payment
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9
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3.2
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Active
Materials
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9
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ARTICLE
4 CONVERSION FEES AND COMPONENT COSTS
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10
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4.1
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First
Year Pricing
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10
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4.2
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Subsequent
Years’ Pricing
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10
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4.3
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Adjustments
to Pricing
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11
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4.4
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Adjustments
Due to Technical Changes
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12
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ARTICLE
5 ORDERS, SHIPMENT, INVOICING. PAYMENT
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13
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|
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5.1
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Orders
and Forecasts
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13
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5.2
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Reliance
by Patheon
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14
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5.3
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Minimum
Orders
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15
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i
CONFIDENTIAL
TREATMENT
|
5.4
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Patheon
Forecast for Active Ingredient
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15
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5.5
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Shipments
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15
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5.6
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Invoices
and Payment
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15
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ARTICLE
6 PRODUCT CLAIMS AND RECALLS
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16
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|
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6.1
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Product
Claims
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16
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6.2
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Product
Recalls and Returns
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17
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6.3
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Disposition
of Defective or Recalled Products
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18
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6.4
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Customer
Questions and Complaints
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18
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ARTICLE
7 CO-OPERATION
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18
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7.1
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Quarterly
Review
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18
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7.2
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Governmental
Agencies
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19
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7.3
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Records
and Accounting by Patheon
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19
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7.4
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Inspection
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19
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7.5
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Access
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19
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7.6
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Reports
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20
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7.7
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FDA
Filings
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20
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ARTICLE
8 TERM AND TERMINATION
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21
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|
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8.1
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Initial
Term
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21
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8.2
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Termination
for Cause
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21
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8.3
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Product
Discontinuation
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22
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8.4
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Termination
upon Regulatory Refusal
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22
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8.5
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Obligations
on Termination
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22
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ARTICLE
9 REPRESENTATIONS, WARRANTIES AND COVENANTS
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23
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9.1
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Authority
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23
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9.2
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New
River Warranties
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23
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ii
CONFIDENTIAL
TREATMENT
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9.3
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Patheon
Warranties
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23
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9.4
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Debarred
Persons
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24
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9.5
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Permits
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24
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9.6
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Compliance
with Laws
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24
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9.7
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No
Warranty
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24
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ARTICLE
10 REMEDIES AND INDEMNITIES
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25
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10.1
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Consequential
Damages
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25
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10.2
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Limitation
of Liability
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25
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10.3
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Patheon
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26
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10.4
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New
River
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26
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ARTICLE
11 CONFIDENTIALITY
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27
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11.1
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Confidentiality
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27
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ARTICLE
12 DISPUTE RESOLUTION
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27
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12.1
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Commercial
Disputes
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27
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12.2
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Technical
Dispute Resolution
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28
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ARTICLE
13 MISCELLANEOUS
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28
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13.1
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Inventions
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28
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13.2
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Intellectual
Properly
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29
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13.3
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Insurance
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29
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13.4
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Independent
Contractors
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29
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13.5
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No
Waiver
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30
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13.6
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Assignment
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30
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13.7
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Force
Majeure
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30
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13.8
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Additional
Product
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31
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13.9
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Notices
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31
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iii
CONFIDENTIAL
TREATMENT
|
13.10
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Severability
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32
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13.11
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Entire
Agreement
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32
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13.12
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Other
Terms
|
32
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13.13
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No
Third Party Benefit or Right
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32
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13.14
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Execution
in Counterparts
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32
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13.15
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Governing
Law
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32
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iv
CONFIDENTIAL
TREATMENT
THIS
MANUFACTURING SERVICES AGREEMENT (the “Agreement’)
made as
of the 18th day of August, 2006 (the “Effective
Date”)
B
E T W E
E N:
|
PATHEON
PHARMACEUTICALS INC.,
|
|
a
corporation existing under the laws of the State of
Delaware,
|
|
(hereinafter
referred to as “Patheon”),
|
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-
and -
|
|
a
corporation existing under the laws of the Commonwealth of
Virginia,
|
|
(hereinafter
referred to as “New
River”).
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THIS
AGREEMENT WITNESSES THAT in consideration of the rights conferred and the
obligations assumed herein, and for other good and valuable consideration (the
receipt and sufficiency of which are acknowledged by each party), and intending
to be legally bound the parties agree as follows:
ARTICLE
1
INTERPRETATION
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1.1
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Definitions.
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The
following terms shall, unless the context otherwise requires, have the
respective meanings set out below and grammatical variations of such terms
shall
have corresponding meanings:
“Active
Materials”
means
the materials listed on Schedule D hereto;
“Active
Materials Credit Value”
means
the value to be attributed to the Active Materials for the purposes of Section
2.4 of this Agreement, as set forth in Schedule D hereto;
“Affiliate”
means:
|
(a)
|
a
business entity which owns, directly or indirectly, a controlling
interest
in a party to this Agreement, by stock ownership or otherwise;
or
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CONFIDENTIAL
TREATMENT
|
(b)
|
a
business entity which is controlled by a party to this Agreement,
either
directly or indirectly, by stock ownership or otherwise;
or
|
|
(c)
|
a
business entity, the controlling interest of which is directly or
indirectly common to the majority ownership of a party to this
Agreement;
|
For
the
purposes of this definition, “control” means the ownership of shares carrying at
least a majority of the votes in respect of the election of the directors of
a
corporation.
“Annual
Product Review Report”
means
the annual product review report as described in Title 21 of the United States
Code of Federal Regulations, Section 211.180(e);
“Annual
Report”
means
the annual report as described in Title 21 of the United States Code of Federal
Regulations, Section 314.8 1(b)(2);
“Annual
Requirement of Product”
means
all of New River’s annual requirement of solid dosage form(s) of the Product in
the Territory, including all Product manufactured under the United States
Collaboration Agreement dated as of March 31, 2005 between New River, Shire
LLC
and Shire Pharmaceuticals Group PLC as identified in New River’s Form 10-K
filing with the Securities Exchange Commission dated April 1, 2005 or any
amendment thereto.
“Annual
Volume”
means
the volume of Product to be manufactured in any Year of this Agreement as set
forth in Schedule B hereto.
“Applicable
Laws”
means
all federal laws, the Laws of the State of Ohio being the jurisdiction where
the
Manufacturing Site is located, and the Laws of all jurisdictions where the
Products are manufactured, distributed or marketed;
“Authority”
means
any governmental or regulatory authority, department, body or agency or any
court, tribunal, bureau, commission or other similar body, whether federal,
state, provincial, county or municipal having proper jurisdiction over the
parties and/or the Products, as the context requires;
“Breach
Notice”
shall
have the meaning ascribed thereto in Section 8
“Business
Day”
means a
day other than a Saturday, Sunday or a day that is a statutory holiday in the
Commonwealth of Virginia or in the State of Ohio;
“cGMPs”
means
current good manufacturing practices as described in Parts 210 and 211 of Title
21 of the United States Code of Federal Regulations, together with the latest
FDA guidance documents pertaining to manufacturing and quality control practice,
all as updated, amended and revised from time to time, or the foreign equivalent
in those foreign jurisdictions where Patheon has agreed to supply
Product;
“Components”
means,
collectively, all packaging components, raw materials and ingredients (including
labels, product inserts and other labeling for the Products), required to be
used in order to produce the Products in accordance with the Specifications,
other than the Active Materials;
2
CONFIDENTIAL
TREATMENT
“Confidentiality
Agreement”
means
the agreement relating to the non-disclosure of confidential information between
Patheon and New River dated May 31, 2003, as amended August 25,
2005;
“Deficiency
Notice”
shall
have the meaning ascribed thereto in Section 6.1(a); “Delivery Date” shall have
the meaning ascribed thereto in Section 5.1;
“FDA”
means
the United States government department known as the Food and Drug
Administration, or any successor entity thereto, or the foreign equivalent
in
those foreign jurisdictions where Patheon has agreed to supply
Product;
“Failure
Period”
has the
meaning specified in Section 2.3(a);
“Firm
Orders”
has the
meaning specified in Section 5.1(b);
“Intellectual
Property” includes, without limitation, rights in patents, patent applications,
formulae, trade-marks, trade-xxxx applications, trade-names, Inventions,
copyright and industrial designs;
“Invention”
means
information relating to any data, innovation, improvement, development,
discovery, computer program, device, trade secret, method, know-how, process,
technique or the like, whether or not written or otherwise fixed in any form
or
medium, regardless of the media on which it is contained and whether or not
patentable or copyrightable;
“Inventory”
means
all inventories of Components and work-in-process produced or held by Patheon
in
connection with the manufacture of the Products but, for greater certainty,
does
not include the Active Materials;
“Laws”
means
all applicable laws, statutes, ordinances, regulations, rules, by-laws,
judgments, decrees or orders of any Authority;
“Manufacturing
Services”
means
the manufacturing, quality control, quality assurance and stability testing,
packaging, storage, and related services, as contemplated in this Agreement,
and
the Quality Agreement, required to produce Products from Active Materials and
Components;
“Manufacturing
Site”
means
the facility owned and operated by Patheon that is located at 0000 Xxxx
Xxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxx 00000-0000;
“Patheon
Manufacturing Responsibilities”
means
Patheon’s responsibilities and obligations with respect to the provision of
Manufacturing Services as set forth in this Agreement and the Quality
Agreement;
3
CONFIDENTIAL
TREATMENT
“Permits”
shall
have the meaning ascribed thereto in Section 9.3(d); “Products” means the
products listed on Schedule A hereto;
“Quality
Agreement”
means
the agreement to be entered into between the parties hereto setting forth,
among
other things, the quality assurance standards to be applicable to the
Manufacturing Services provided by Patheon, which agreement shall be
substantially in the form attached hereto as Schedule 0;
“Recall”
shall
have the meaning ascribed thereto in Section 6.2;
“Run
Quantity”
means
the number of batches of a Product to be produced during the same cycle of
manufacturing as set forth in Schedule B hereto;
“Specifications”
means
the applicable quality control provisions in the Quality Agreement, along with
the file for each Product which is provided by New River to Patheon in
accordance with the procedures listed in Schedule A, which contains documents
relating to such Product, including, without limitation:
|
(a)
|
[***];
|
|
(b)
|
[***];
|
|
(c)
|
[***];
|
|
(d)
|
[***];
|
|
(e)
|
[***];
and
|
|
(f)
|
[***].
|
all
as
updated, amended and revised from time to time by New River in accordance with
the terms of this Agreement;
“Technical
Dispute”
has the
meaning specified in Section 12.2;
“Territory”
means
the United States of America, its territories and possessions;
“Third
Party Rights”
means
the Intellectual Property of any third party other than (i) Patheon,
(ii) New River, or (iii) an Affiliate; and
“Year”
means in
the first year of this Agreement, the period from the Effective Date up to
and
including December 31 of the same calendar year, and thereafter shall mean
a
calendar year.
|
1.2
|
Currency.
|
Unless
otherwise indicated, all monetary amounts are expressed in this Agreement in
the
lawful currency of the United States of America.
|
1.3
|
Sections
and Heading.
|
The
division of this Agreement into Articles, sections, subsections and Schedules
and the insertion of headings are for convenience of reference only and shall
not affect the interpretation of this Agreement. Unless otherwise indicated,
any
reference in this Agreement to a Section or Schedule refers to the specified
Section or Schedule to this Agreement. In this Agreement, the terms “this
Agreement”,
“hereof”,
“herein”, “hereunder”
and
similar expressions refer to this Agreement and not to any particular part,
Section, Schedule or the provision hereof.
4
CONFIDENTIAL
TREATMENT
|
1.4
|
Singular
Terms.
|
Except
as
otherwise expressly provided herein or unless the context otherwise requires,
all references to the singular shall include the plural and vice
versa.
|
1.5
|
Schedules
|
The
following Schedules are attached to, incorporated in and form part of this
Agreement:
|
Schedule
A
|
-
|
Product
Formula and Specifications
|
|
Schedule
B
|
-
|
Run
Quantity, Annual Volume & Fees
|
|
Schedule
C
|
-
|
Stability
Testing
|
|
Schedule
D
|
-
|
Active
Materials & Active Materials Credit
Value
|
|
Schedule
E
|
-
|
Batch
Numbering & Expiration Dates
|
|
Schedule
F
|
-
|
Technical
Dispute Resolution
|
|
Schedule
0
|
-
|
Quality
Agreement
|
|
Schedule
H
|
-
|
Quarterly
Active Materials Inventory Report
|
|
Schedule
I
|
Report
of Annual Active Material Inventory Reconciliation and Calculation
of
Actual Annual Yield
|
5
CONFIDENTIAL
TREATMENT
ARTICLE
2
PATHEON’S
MANUFACTURING RESPONSIBILITIES
|
2.1
|
Manufacturing
Services
|
Patheon
shall provide the Manufacturing Services to New River on a non- exclusive basis.
Patheon shall manufacture and supply a [***] of New River’s Annual Requirement
of Product in the Territory and for the fees specified in Schedules B and C.
Patheon may change the Manufacturing Site for the Products only with the prior
written consent of New River, such consent not to be unreasonably withheld.
The
parties acknowledge and agree that it would be reasonable for New River to
withhold such consent if Patheon proposes to change the Manufacturing Site
to a
location outside the 48 contiguous U.S. states or to a facility that, in New
River’s reasonable judgment, has a poor quality or safety record. The cost of
any such change in Manufacturing Site shall be bone solely by Patheon. If
Manufacturing Services have not commenced within 12 months of the date of
execution of this Agreement due to no fault of Patheon, Patheon reserves the
right to amend the fees set out in Schedules B and C, but in no event shall
any
increase in fees exceed the fee adjustment contemplated in Section 4.2. In
providing the Manufacturing Services, Patheon shall perform each of the
following services:
|
(a)
|
Conversion
of Active Materials and Components.
Patheon shall convert Active Materials and Components into Products
in
accordance with the Specifications and
cGMPs.
|
|
(b)
|
Quality
Control and Quality Assurance.
Patheon shall comply with the obligations set forth in the Quality
Agreement. Each time Patheon ships Products to New River, it shall
provide
New River with a certificate of analysis and certificate of compliance
(as
defined in the Quality Agreement) and other documentation as reasonably
required by New River for such
Products.
|
|
(c)
|
Components.
Patheon shall purchase and test all Components at Patheon’s expense, as
specified by the Specifications.
|
|
(d)
|
Stability
Testing.
Patheon shall conduct stability testing on the Products in accordance
with
the protocols set out in the Specifications. Patheon shall not make
any
changes to these testing protocols [***]. New River shall pay the
fees
specified in Schedule C for all stability testing that is necessary
for
compliance with FDA requirements or is requested by New River. In
the
event that any batch of Products fails stability testing, Patheon
and New
River shall jointly determine the proceedings and methods to be undertaken
to investigate the causes of such failure, including which party
shall
bear the cost of such investigation, provided that Patheon shall
not be
liable for any such costs unless there has been a failure by it to
provide
the Manufacturing Services in accordance with the Patheon Manufacturing
Responsibilities. Patheon will provide any and all data and results
relating to the stability testing to New River promptly following
any
request by New River.
|
6
CONFIDENTIAL
TREATMENT
|
(e)
|
Packaging.
Patheon shall package the Products with labels, product inserts and
other
packaging as set out in the Specifications. [***]. In addition, Patheon
shall make arrangements for and implement the imprinting of batch
numbers
and expiration dates on the packaging of each Product in compliance
with
all Laws. Such batch numbers and expiration dates shall be affixed
on the
Products and on the shipping carton of each Product as outlined in
the
Specifications and as required by cGMPs. The system used by Patheon
for
batch numbering and expiration dates is detailed in Schedule E hereto.
New
River may, in its sole discretion, make changes to labels, product
inserts
and other packaging for the Products, which changes shall be submitted
by
New River to all applicable governmental agencies and other third
parties
responsible for the approval of the Products. New River shall be
responsible for any additional costs related to such labeling changes
when
such changes occur. Patheon’s name shall not appear on the label or
anywhere else on the Products unless: (i) required by any Laws; or
(ii)
Patheon expressly consents to such use of its name in
writing.
|
|
2.2
|
Standard
of Performance
|
Patheon
shall provide the Manufacturing Services in accordance with the Specifications,
cGMPs, the Quality Agreement, and all Laws associated with the manufacture
and
supply of human pharmaceutical products.
|
2.3
|
Failure
to Supply
|
In
the
event that Patheon is unable to provide Manufacturing Services for the Product
in accordance with the Specifications, the terms of this Agreement, the Quality
Agreement or cGMPs, and such inability is or is likely to subsist on a [***]
(“Failure
Period”),
the
parties agree to work together in good faith during the Failure Period to
resolve the event causing Patheon’s failure to provide the Manufacturing
Services for the Product and to procure the continued Manufacturing Services
for
the Product from Patheon as soon as reasonably practicable following the
resolution of the event causing the Failure Period.
|
2.4
|
Active
Material Yield
|
|
(a)
|
Reporting.
Patheon shall provide New River with a quarterly inventory report
of the
Active Materials held by Patheon in accordance with the inventory
report
form annexed hereto as Schedule H which shall contain the following
information for such quarter:
|
Quantity
Received:
The
total quantity of Active Materials that complies with the Specifications and
is
received at a Manufacturing Site during the applicable period.
Quantity
Dispensed:
The
total quantity of Active Materials dispensed at a Manufacturing Site during
the
applicable period. The Quantity Dispensed is calculated by adding the Quantity
Received to the inventory of Active Materials that complies with the
Specifications and is held at the beginning of the applicable period, less
the
inventory of Active Materials that complies with the Specifications and is
held
at the end of such period. The Quantity Dispensed shall only include (a) Active
Materials received and dispensed in connection with commercial manufacturing
of
Products and (b) Active Materials that are lost, damaged, or destroyed after
receipt at a Manufacturing Site, and, for certainty, shall not include any
Active Materials received or dispensed in connection with technical transfer
activities or development activities during the applicable period, including,
without limitation, any regulatory, stability, validation or test batches
manufactured during the applicable period.
7
CONFIDENTIAL
TREATMENT
Quantity
Converted:
The
total amount of Active Materials contained in the Products produced with the
Quantity Dispensed (including lab samples and any additional Products produced
in accordance with Section 6.1 or 6.2), delivered by Patheon, and not rejected,
recalled or returned in accordance with Section 6.1 or 6.2 as a result of a
failure by Patheon to provide Manufacturing Services in accordance with Patheon
Manufacturing Responsibilities.
[***]
after the end of each Year, Patheon shall prepare an annual reconciliation
of
Active Materials in accordance with the reconciliation report form annexed
hereto as Schedule I including the calculation of the “Actual Annual Yield”
or “ for the Product at the Manufacturing Site during the Year, which AAY is the
percentage of the Quantity Dispensed that was converted to Products and is
calculated as follows:
[***]
After
Patheon has produced a minimum of ten (10) commercial production batches of
Product without significant losses and has produced commercial production
batches for at least six (6) months at a Manufacturing Site (collectively,
the
“Target
Yield Determination Batches”)
pursuant to this Agreement, the Parties will mutually agree on the target yield
in respect of such Product at such Manufacturing Site (each, a “Target
Yield”).
Thereafter, Patheon shall strive to maintain Actual Annual Yield levels for
each
Product above the applicable Target Yield. Notwithstanding the foregoing, the
Target Yield will be adjusted Yearly through good faith negotiations, which
negotiations will take in account the Actual Annual Yield for the Product over
the preceding Year.
|
(b)
|
Shortfall
Calculation.
If the Actual Annual Yield [***], then the shortfall for such Year
(the
“Shortfall”) shall be determined based on the following
calculation:
|
[***]
The
Shortfall shall be disclosed by Patheon on the reconciliation report prepared
in
the form annexed hereto as Schedule I.
|
(c)
|
Credit.
If the Actual Annual Yield for a Product [***], then Patheon shall
reimburse New River the amount of the applicable Shortfall [***].
Each
credit under this Section 2.4 shall be summarized on the reconciliation
report prepared in the form annexed hereto as Schedule I and shall
be made
in accordance with Section 5.6. If the Actual Annual Yield for a
Product
[***] (as set forth in Section 2.1) of such Product that will be
manufactured by Patheon for the remainder of the term of the Agreement,
at
New River’s sole discretion. In addition, if any point during a Year, it
is likely, in the reasonable opinion of New River management, that
the
Actual Annual Yield for a Product for such Year will [***], then
[***] (as
set forth in Section 2.1) of such Product that will be manufactured
by
Patheon during the [***]. In any event, the parties shall make all
reasonable efforts to correct through amicable negotiations any failure
of
the Actual Annul Yield to meet the respective Target Yield in a
Year.
|
8
CONFIDENTIAL
TREATMENT
|
(d)
|
Maximum
Credit.
Notwithstanding the foregoing provisions of this Section 2.4, Patheon’s
liability for Active Materials calculated in accordance with this
Section
2.4 for any Product in a Year shall not exceed, in the aggregate,
the
maximum credit value set forth in Schedule D
hereto.
|
|
(e)
|
No
Material Breach.
It shall not constitute a material breach of this Agreement by Patheon,
for the purposes of Section 8.2(a), if the Actual Annual Yield is
less
that the Target Yield.
|
|
(f)
|
Significant
Losses Not with anything to the contrary in this Agreement, Patheon
shall
notify New River of any significant loss of Active Material [***].
Such
notification shall not in any way limit New River’s rights or Patheon’s
obligations under this Section 2.4 with respect to
Shortfalls.
|
ARTICLE
3
NEW
RIVER’S OBLIGATIONS
|
3.1
|
Payment
|
Pursuant
to the terms of this Agreement, New River shall pay Patheon for the provision
of
the Manufacturing Services according to the fees specified in Schedules 8 and
C
hereto (such fees being subject to adjustment in accordance with the terms
hereof).
|
3.2
|
Active
Materials
|
New
River
shall at its sole cost and expense, deliver the Active Materials to Patheon
in
sufficient quantities and at such times to facilitate the provision of the
Manufacturing Services by Patheon, which Active Materials shall be held by
Patheon on behalf of New River on the terms and subject to the conditions herein
contained. New River shall pay Patheon [***], [***], for storing Active
Materials [***]. If the Active Material is determined to be a DEA Schedule
2
drug or requires refrigeration, [***] per pallet, per month. The parties
acknowledge and agree that all right, title and interest in and to the Active
Materials shall at all times belong to and remain with New River. Patheon agrees
that any Active Materials received by it shall only be used by Patheon to
provide the Manufacturing Services.
9
CONFIDENTIAL
TREATMENT
ARTICLE
4
CONVERSION
FEES AND COMPONENT COSTS
|
4.1
|
First
Year Pricing.
|
The
fees
for the Manufacturing Services (which fees include Component costs) through
December 31, 2006, are set forth in pricing schedule as listed in Schedules
B
and C and are subject to the adjustments set forth in Section 4.3. Fees are
also
subject to adjustments for any changes in the process or equipment, including,
but not limited to, inclusion of individual capsule weight
checking.
|
4.2
|
Subsequent
Years’ Pricing.
|
The
fees
for the Manufacturing Services provided pursuant to the terms of this Agreement
during any period following December 31, 2006, shall be determined in accordance
with the following:
|
(a)
|
Manufacturing
and Component Costs.
On each Yearly anniversary of this Agreement, either party shall
be
entitled to an adjustment to the fees (i) for Manufacturing Services
in
respect of the Products to reflect inflation or deflation, which
adjustment shall be based on the increase or decrease in the United
States
- Consumer Price Index for All Urban Consumers (CPI-U), published
by the
United States Department of Labor, Bureau of Labor Statistics in
September
of the then current Year compared to the same month of the preceding
Year,
unless the parties otherwise agree in writing; and (ii) for Component
costs to pass on the actual amount of any increase o; as set forth
in
Section 4.4(c), the decrease in such
costs.
|
|
(b)
|
Annual
Forecast.
To the extent that the parties agree that the projections contained
in the
rolling forecast provided pursuant to Section 5.1(a) necessitate
that an
appropriate adjustment be made to the Manufacturing Services fees
in
respect of any Product for such Year, then such fees shall be either
increased or decreased accordingly.
|
|
(c)
|
Pricing
Basis.
New River acknowledges that the fee for Manufacturing Services in
respect
of a Product in any Year, following December 31, 2006, is quoted
based
[***] specified in Schedule B or thereafter specified in the forecast
provided pursuant to clause (b) of this Section 4.2 for such Year
and is
subject to change if the [***]. For greater certainty, if Patheon
and New
River agree that the Run Quantity in respect of a Product shall be
reduced, whether as a result of a decrease in estimated Annual Volume
or
otherwise, and as a result of such reduction, Patheon’s fees for
Manufacturing Services relating to such Product increase on a per
unit
basis, then Patheon shall be entitled to an increase in the fee for
Manufacturing Services in respect of such Product by an amount sufficient
to absorb such increase solely for any third party costs related
to
Components. Likewise, if Patheon and New River agree that the Run
Quantity
in respect of a Product shall be increased, whether as a result of
an
increase in estimated Annual Volume or otherwise, and as a result
of such
increase, Patheon’s fees for Manufacturing Services relating to such
Product decrease on a per unit basis, then New River shall be entitled
to
a decrease in the fee for Manufacturing Services in respect of such
Product by an amount sufficient to reflect such
decrease.
|
10
CONFIDENTIAL
TREATMENT
In
connection with a fee adjustment pursuant to clause (a) of this Section 4.2,
Patheon shall deliver to New River by [***] of each Year following December
31,
2006 a revised Schedule B and a statement outlining the percentage increase
or
decrease, as applicable, in the Consumer Price Index, upon which such fee
adjustment is based. In connection with all fee adjustments pursuant to clauses
(b) and (c) of this Section 4.2, Patheon shall deliver to New River by [***]
of
each Yea; including [***], a revised Schedule B and such budgetary pricing
information or other documentation reasonably sufficient to demonstrate that
a
fee adjustment is justified, provided that Patheon shall have no obligation
to
provide any supporting documents to the extent such documents are subject to
obligations of confidentiality between Patheon and its suppliers. Such revised
fee shall be effective with respect to any Product manufactured or delivered
after the end of the then current Year.
|
4.3
|
Adjustments
to Pricing.
|
During
any Year of this Agreement the fees set out in Schedule B shall be subject
to
adjustment in accordance with the following:
|
(a)
|
Campaign
Pricing.
The fees for the Manufacturing Services listed in Schedule B reflect
campaign sizes based upon Annual Volume for each Product. The most
recent
annual New River forecast available on October l of the preceding
year
will be used to determine the monthly campaign sizes, and therefore,
the
corresponding fees applicable for the following year, subject to
the
documentation requirement set forth in the paragraph immediately
following
Section 4.3(b). Campaign sizes are not subject to monthly changes,
but the
frequency may be adjusted to match
demand.
|
|
(b)
|
Extraordinary
Changes in Component Costs.
If at any time after December 31, 2006 market conditions result in
Patheon’s cost of Components being materially greater than normal
forecasted increases or materially lower than normal forecasted decreases,
then Patheon shall adjust the fee for Manufacturing Services accordingly
to reflect such an increase or decrease with respect to any affected
Products to compensate for such material change in Component costs.
For
the purposes of this clause (b), changes materially greater than
normal
forecasted increases or materially lower than normal forecasted decreases
(as the case may be) shall be considered to have occurred if: (i)
the cost
of a Component increases or decreases by [***] of the cost for that
Component upon which the most recent fee quote was based; or (ii)
the
aggregate cost for all Components required to manufacture a Product
increases or decreases by [***] of the total Component costs for
such
Product upon which the most recent fee quote was based. To the extent
that
Component costs have been previously adjusted pursuant to clause
(a) of
Section 4.2 or this clause (b) to reflect an increase or decrease
in the
cost of one or more Components, the adjustments provided for in (i)
and
(ii) above shall operate based on the costs attributed to such Component
(or Components) at the time the last of such adjustments were
made.
|
11
CONFIDENTIAL
TREATMENT
In
connection with a fee adjustment pursuant to Section 4.3(a) or 4.3(b), Patheon
shall deliver to New River a revised Schedule B and such budgetary pricing
information, adjusted Component costs or other documentation reasonably
sufficient to demonstrate that a fee adjustment is justified, provided that
Patheon shall have no obligation to provide any supporting documents to the
extent such documents are subject to obligations of confidentiality between
Patheon and its suppliers. Such revised fee shall be effective with respect
to
any Product delivered or manufactured after the end of the then current
Year.
|
4.4
|
Adjustments
Due to Technical
Changes.
|
|
(a)
|
In
the event that New River requests an amendment to the Specifications
or
the Quality Agreement, Patheon shall conduct a technical and cost
review
of the proposed amendment. If requested by Patheon, Patheon and New
River
shall negotiate in good faith an equitable revision to the fees specified
in Schedule B or C to reflect changes in costs that would result
from such
amendment. Any cost increases asserted by Patheon shall be consistent
with
then-prevailing market standards, and Patheon will provide New River
with
documentation reasonably sufficient to demonstrate that a fee adjustment
is justified, provided that Patheon shall have no obligation to provide
any supporting documents to the extent such documents are subject
to
obligations of confidentiality between Patheon and its suppliers.
If the
Parties agree on a proposed fee change, the proposed change in the
Specifications and/or Quality Agreement shall be implemented, and
the fee
change shall become effective only with respect to those orders of
Products that are manufactured in accordance with the revised
Specifications and/or revised Quality Agreement. In addition [***],
all
Inventory utilized under the “old” Specifications and purchased or
maintained by Patheon necessary to fill Firm Orders or in accordance
with
Section 5.2, to the extent that such Inventory can no longer be utilized
under the revised Specifications. Open purchase orders for Components
no
longer required under any revised Specifications that were placed
by
Patheon with suppliers in order to fill Firm Orders or in accordance
with
Section 5.2 shall be cancelled where possible, and where such orders
are
not subject to cancellation without penalty, shall be assigned to
and
satisfied by New River.
|
|
(b)
|
Amendments
to the Specifications, the Quality Agreement or the Manufacturing
Site
requested by Patheon will only be implemented following the prior
approval
of New River, including a technical and cost review by the parties
and are
subject to New River and Patheon reaching agreement as to revisions,
if
any, to the fees specified in Schedules B or C necessitated by any
such
amendment.
|
|
(c)
|
Patheon
and New River may collaborate to identify, target and implement all
potential areas of cost reduction relating to the performance of
their
obligations under this Agreement, including the cost of Components
and
improvements in processing and Manufacturing Services. Such areas
of
jointly developed cost reduction shall be discussed at the quarterly
meetings of the relationship managers as set forth in Section 7.1.
Any
benefits of such jointly developed cost reductions or improved
efficiencies achieved shall be shared equally between Patheon and
New
River after the party who incurred any costs associated therewith,
if any,
has recovered its costs.
|
12
CONFIDENTIAL
TREATMENT
ARTICLE
5
ORDERS,
SHIPMENT, INVOICING. PAYMENT
|
5.1
|
Orders
and Forecasts
|
|
(a)
|
Rolling
Forecasts.
Concurrent with the execution of this Agreement, New River shall
provide
Patheon with a written, non-binding, [***] of the volume of each
Product
that New River then anticipates will be required to be produced and
delivered to New River or its designee during each month of that
[***].
Such forecast will be updated by New River monthly on or before the
[***]
day of each calendar month [***] and updated forthwith upon New River
determining that the volumes contemplated in the most recent of such
forecasts has changed by more than [***]. The most recent [***] forecast
shall prevail. Patheon shall accept each written forecast by signing
and
returning such forecast to New River. The first three months of rolling
forecast for supply of Product shall be
binding.
|
|
(b)
|
Firm
Orders.
On or before the [***], New River shall issue firm written orders
(“Firm
Orders”)
for the Products to be produced and delivered to New River on a date
specified in each Firm Order (the “Delivery
Date”),
such Delivery Date to be [***] from the first day of the calendar
month
immediately following the date that the Firm Order is submitted.
Such Firm
Orders shall further specify New River’s purchase order number, quantities
by Product type, monthly delivery schedule and any other elements
necessary to ensure the timely production and shipment of the Products.
The quantities of Products ordered in such written orders shall be
firm
and binding on New River and shall not be subject to reduction by
New
River. If New River requests an increase in a Firm Order, Patheon
shall
use [***] to comply with such increase,
[***].
|
|
(c)
|
[***]
Forecast.
On or before the [***] of [***] in each Year, New River shall provide
Patheon with a [***] forecast (broken down by [***] for the [***]
and
[***] of the forecast) of the volume of each Product New River then
anticipates will be required to be produced and delivered to New
River
during the [***].
|
|
(d)
|
Delivery.
Patheon shall use [***] to deliver 100% of the Products ordered in
Firm
Orders on the applicable Delivery Date. If Patheon has learned that
any
delivery of Products may be expected to be delivered any time after
the
Delivery Date, Patheon shall (0 as soon as practical notify New River
or
its designee, (ii) ensure that its own senior management is advised
of
this issue, and (iii) develop and implement a remedial plan reasonably
calculated to prevent future late deliveries. In the event that Patheon
either (i) delivers to New River [***] of the Product specified in
the
Firm Orders for any given [***]; (ii) delivers to New River [***]
of the
Product specified in the Firm Orders for any [***]; or (iii) delivers
to
New River [***] of the Product specified in the Firm Orders for any
given
Year, including the first Year, [***], then New River shall have
the right
to reduce the Annual Requirement (as set forth in Section 2.1) of
such
Product that will be manufactured by Patheon for the remainder of
the term
of the Agreement by [***].
|
13
CONFIDENTIAL
TREATMENT
|
(e)
|
Regulatory
Approval.
Except for launch quantities of Product as provided in Section 5.2(a),
New
River shall be under no obligation to issue Firm Orders for Products
unless and until New River receives regulatory approval for marketing
of
the Product.
|
|
5.2
|
Reliance
by Patheon
|
|
(a)
|
New
River understands and acknowledges that Patheon will rely on the
rolling
forecasts and Firm Orders submitted pursuant to Sections 5.1(a) and
(b) in
ordering the Components required to meet such Firm Orders. In addition,
New River understands that to ensure an orderly supply of such Components,
it may be desirable for Patheon to purchase such Components in sufficient
volumes to meet the production requirements for Products during part
or
all of the forecasted periods referred to in Section 5.1(a) or to
meet the
production requirements of any longer period agreed to by Patheon
and New
River. Accordingly, New River authorizes Patheon to purchase Components
in
order to satisfy the production requirements for Products for the
[***]
contemplated in the most recent forecast provided by New River pursuant
to
Section 5.1(a) and agrees that Patheon may make such other purchases
of
Components to meet production requirements during such longer periods
as
may be agreed to in writing from time to time by New River at the
request
of Patheon or New River. New River shall provide Patheon with its
written
authorization to order Components in respect of any launch quantities
of
Product requested by New River, which upon acceptance by Patheon
shall
constitute a Firm Order. If Components ordered by Patheon pursuant
to Firm
Orders or this Section 5.2 are not included in finished Products
purchased
by New River after the forecasted month in respect of which such
purchases
have been made (or such longer period as the parties may agree) or
if such
Components have expired during such period, then New River shall
pay to
Patheon its costs therefor (including all costs incurred by Patheon
in
connection with the purchase and handling of such Components) within
reason; provided, however, that in the event such Components are
incorporated into Products subsequently purchased by New River or
into
third party products manufactured by Patheon and subsequently purchased
by
a third party, New River will receive credit for any costs of such
Components previously paid to Patheon by New
River.
|
|
(b)
|
If
New River fails to dispose of Components [***] or Product [***].
If the
Product contains an Active Material that is determined to be a DEA
Schedule 2 drug or requires refrigeration, [***]. Patheon shall have
the
option to ship Product held longer than three months to New River
at New
River’s expense upon two weeks written notice to New
River.
|
14
CONFIDENTIAL
TREATMENT
|
5.3
|
Minimum
Orders
|
New
River
may only order batches of Products equal to or greater than the Minimum Run
Quantities set out in Schedule B.
|
5.4
|
Patheon
Forecast for Active Ingredient.
|
[***]
of
receiving New River’s first written forecast, pursuant to Section 5.1(a), of its
anticipated requirements for the Product for the next succeeding Year and
thereafter [***] from receipt of each additional New River forecast, Patheon
shall submit to New River its written forecast of its anticipated requirements
of the Active Ingredient for the next succeeding Year. The parties acknowledge
that the Active Material is scheduled under the Federal Controlled Substances
Act and that Patheon is required to obtain a quota from the DEA before
manufacturing Products. Patheon shall submit in a timely matter all necessary
documents to request a quota sufficient to meet New River’s forecast needs.
Additional requests shall be submitted by Patheon to DEA in a timely matter
as
necessary to reflect changes in New River’s forecast requirements of
Products.
|
5.5
|
Shipments.
|
Shipments
of Products shall be made EXW (as such term is defined in INCOTERMS 2000)
Patheon’s shipping point unless otherwise mutually agreed. Risk of loss or of
damage to Products shall remain with Patheon until Patheon loads the Products
onto the carrier’s vehicle for shipment at the shipping point at which time risk
of loss or damage shall transfer to New River. Patheon shall, in accordance
with
New River’s instructions and as agent for New River, (i) arrange for shipping to
be paid by New River and (ii) at New River’s risk and expense, obtain any export
license or other official authorization necessary to export the Products. New
River shall arrange for insurance and shall select the freight carrier used
by
Patheon to ship Products and may monitor Patheon’s shipping and freight
practices as they pertain to this Agreement. Products shall be transported
in
accordance with the Specifications.
|
5.6
|
Invoices
and Payment.
|
Invoices
shall be sent by fax or email to such fax number or email address as may be
provided by New River in writing from time to time. Patheon shall also submit
to
New River with each shipment of Products, a duplicate copy of the invoice
covering such shipment. Patheon shall also provide New River with an invoice
covering any Inventory which is to be purchased by Patheon pursuant to the
terms
of this Agreement. Each such invoice shall, to the extent applicable, identify
New River’s purchase order number, Product numbers, names and quantities, unit
price, freight charges and the total amount to be remitted by New River. New
River shall pay all such invoices [***] of the date thereof. In the event that
New River disputes any portion of such invoices in good faith, payment for
such
invoices shall not be due until the parties resolve such
dispute.
15
CONFIDENTIAL
TREATMENT
ARTICLE
6
PRODUCT
CLAIMS AND RECALLS
|
6.1
|
Product
Claims.
|
|
(a)
|
Product
Claims.
New River has the right to reject any portion of any shipment of
Products
that deviates from the Specifications, cGMPs or the Quality Agreement,
without invalidating any remainder of such shipment. New River shall
inspect the Products manufactured by Patheon upon receipt thereof
and
shall give Patheon written notice (a “Deficiency Notice”) of all claims
for Products that deviate from the Specifications or cGMPs [***]
after New
River’s receipt thereof (or, in the case of any defects not reasonably
susceptible to discovery upon receipt of the Product, [***] after
discovery thereof by New River, but in no event after the expiration
date
of the Product). Should New River fail to provide Patheon with the
Deficiency Notice [***], then the delivery shall be deemed to have
been
accepted by New River [***], as applicable. Except as set out in
Section
6.2 or Section 10.3, Patheon shall have no liability for any
deviations for which it has not received notice
[***].
|
|
(b)
|
Determination
of Deficiency.
Upon receipt of a Deficiency Notice, Patheon shall have [***] to
advise
New River by notice in writing that it disagrees with the contents
of such
Deficiency Notice. If New River and Patheon fail to agree [***] after
Patheon’s notice to New River as to whether any Products identified in the
Deficiency Notice deviate from the Specifications or cGMPs, then
the
parties shall mutually select an independent laboratory to evaluate
if the
Products deviate from the Specifications or cGMPs. Such evaluation
shall
be binding on the parties, and if such evaluation certifies that
any
Products deviate from the Specifications or cGMPs, New River may
reject
those Products in the manner contemplated in Section 6.1(a). If such
evaluation does not so certify that a Product-deviates the Specifications
or cGMP, then New River shall be deemed to have accepted delivery
of such
Product on the date such evaluation was completed, but in no event
after
the expiration date of the Product. The party to whom such third
party
laboratory certification is adverse shall bear any out-of- pocket
and/or
actual costs that the parties incur in connection with such
evaluation.
|
|
(c)
|
Patheon
Responsibility.
In the event New River rejects Products in accordance with this Section
6.1, and the deviation is determined to arise from Patheon’s failure to
provide the Manufacturing Services in accordance with the Patheon
Manufacturing Responsibilities, Patheon will credit New River’s account
for Patheon’s invoice price to New River for such defective Products. If
New River shall have previously paid for such defective Products,
Patheon
shall promptly, at New River’s election, either: (i) refund the invoice
price for such defective Products; (ii) offset such amount against
other
amounts due to Patheon hereunder; or (iii) replace such Products
with
conforming Products [***] without New River being liable for payment
therefor under Section 3.1, contingent upon the receipt from New
River of
all Active Materials and subject to the availability of Components
required for the manufacture of such replacement Products. In any
case in
which New River rejects Products in accordance with this Section
6.1,
Patheon shall, subject to the provisions of Section 2.4, reimburse
New
River for all costs incurred by New River with respect to Active
Materials
used in such non-compliant
Products.
|
16
CONFIDENTIAL
TREATMENT
|
(d)
|
Shortages.
Subject to Section 5.1(b), claims for shortages in the amount of
Products
shipped by Patheon shall be dealt with as may reasonably be agreed
to by
the parties.
|
|
6.2
|
Product
Recalls and Returns
|
|
(a)
|
Records
and Notice.
Patheon and New River shall each maintain such records as may be
necessary
to permit a Recall of any Products delivered to New River or customers
of
New River. Each party shall promptly notify the other by telephone
(to be
confirmed in writing) of any information which might affect the
marketability, safety or effectiveness of the Products and/or which
might
result in the Recall or seizure of the Products. Upon receiving any
such
notice or upon any such discovery, each party shall cease and desist
from
further shipments of such Products in its possession or control until
a
decision has been made whether a Recall or some other corrective
action is
necessary. The decision to initiate a Recall or to take some other
corrective action, if any, shall be made and implemented by New River
or
its designee. “Recall”
shall mean any action (i) by New River or its designee to recover
title to
or possession of quantities of the Products sold or shipped to third
parties (including, without limitation, the voluntary withdrawal
of
Products from the market); or (ii) by any regulatory authorities
to detain
or destroy any of the Products. Recall shall also include any action
by
either party to refrain from selling or shipping quantities of the
Products to third parties which would have been subject to a Recall
if
sold or shipped.
|
|
(b)
|
Recalls.
In the event (i) any governmental or regulatory authority issues
a
directive, order or, following the issuance of a safety warning or
alert
with respect to a Product, a written request that any Product be
recalled,
(ii) a court of competent jurisdiction orders such a Recall, or (iii)
New
River determines that any Product should be Recalled or that a “dear
doctor” letter is required relating the restrictions on the use of any
Product, Patheon will co-operate as reasonably required by New River
or
its designee, having regard to all applicable laws and
regulations.
|
|
(c)
|
Product
Returns.
New River shall have the responsibility for handling customer returns
of
the Products. To the extent Products are inadvertently sent to Patheon
by
New River’s customers, Patheon shall notify New River and follow New
River’s instruction for handling such returned Products, such instruction
to be provided by New River upon notice from Patheon, at New River’s
costs.
|
17
CONFIDENTIAL
TREATMENT
|
(d)
|
Patheon’s
Responsibility.
To the extent that a Recall or return results from, or arises out
of, a
failure by Patheon to provide the Manufacturing Services in accordance
with the Patheon Manufacturing Responsibilities, Patheon shall be
responsible to New River for New River’s documented out of pocket expenses
of such Recall or return. Patheon shall promptly, at New River’s election,
either: (i) refund the invoice price for such Recalled or returned
Products; (ii) offset such amount against other amounts due to Patheon
hereunder or (iii) use [***] to replace the Recalled or returned
Products
with new Products [***], contingent upon the receipt from New River
of all
Active Materials and subject to the availability of Components required
for the manufacture of such replacement Products. Subject to the
limitations set out in Section 10.2, [***]. In all other circumstances,
[***].
|
|
6.3
|
Disposition
of Defective or Recalled Products.
|
Neither
party (“Complaining
Party”)
shall
dispose of any damaged, defective, returned, or Recalled Products in relation
to
which it intends to assert a claim against the other party without such other
party’s prior written authorization to do so. Alternatively, the Complaining
Party may instruct the other party to return such Products to Complaining Party
at such party’s cost. Complaining Party shall bear the cost of disposition with
respect to any damaged, defective, returned, or Recalled Products in relation
to
which such party bears responsibility under Section 6.1 or 6.2 hereof. In all
other circumstances, [***].
|
6.4
|
Customer
Questions and Complaints.
|
New
River
shall have the sole responsibility for responding to questions and complaints
from New River’s customers. Questions or complaints received by Patheon from New
River’s customers shall be promptly referred to New River. Patheon shall
co-operate as reasonably required to allow New River to determine the cause
of
and resolve any customer questions and complaints. Such assistance shall include
follow-up investigations, including testing. In addition Patheon shall provide
New River with all mutually agreed upon information that will enable New River
to respond properly to questions or complaints relating to the Products as
provided in the Quality Agreement. Unless it is determined that the cause of
any
customer complaint resulted from a failure by Patheon to provide the
Manufacturing Services in accordance with the Patheon Manufacturing
Responsibilities, all costs incurred in respect of this Section 6.4 shall be
borne by New River.
ARTICLE
7
CO-OPERATION
|
7.1
|
Quarterly
Review.
|
Each
party shall forthwith upon execution of this Agreement appoint one of its
employees to be a relationship manager responsible for liaison between the
parties. The relationship managers shall meet not less than quarterly to review
the current status of the business relationship and manage any issues that
have
arisen, including any ways to improve efficiency or reduce costs associated
with
the Manufacturing Services. Patheon’s relationship manager shall take minutes at
such meetings and deliver such minutes to the relationship manager for New
River
within a reasonable amount of time following such meetings.
18
CONFIDENTIAL
TREATMENT
|
7.2
|
Governmental
Agencies.
|
Subject
to Section 7.7, each party may communicate with any governmental agency,
including but not limited to governmental agencies responsible for granting
regulatory approval for the Products, regarding such Products if in the opinion
of that party’s counsel, such communication is necessary to comply with the
terms of this Agreement or the requirements of any law, governmental order
or
regulation; provided, however, that unless in the reasonable opinion of its
counsel there is a legal prohibition against doing so, such party shall permit
the other party to accompany and take part in any communications with the
agency, and to receive copies of all such communications from the
agency.
|
7.3
|
Records
and Accounting by
Patheon.
|
In
conformance with the Quality Agreement, Patheon shall keep records of the
Manufacturing Services and shipping of the Products, and retain samples of
such
Products as are necessary to comply with manufacturing regulatory requirements
applicable to Patheon, as well as to assist with resolving Product complaints
and other similar investigations. Copies of such records and samples shall
be
retained for a [***] following the date of Product expiry, or longer if required
by law after which Patheon may destroy such records or samples. New River is
responsible for retaining samples of the Products necessary to comply with
the
legal and/or regulatory requirements applicable to New River.
|
7.4
|
Inspection.
|
New
River
or its designee may inspect Patheon reports and records relating to this
Agreement during normal business hours and with reasonable advance notice,
provided a Patheon representative is present during any such
inspection.
|
7.5
|
Access.
|
Patheon
shall provide New River or its designee with reasonable access at mutually
agreeable times to its Manufacturing Site in which the Products are
manufactured, stored, handled or shipped in order to permit New River’s
verification of Patheon’s compliance with the Patheon Manufacturing
Responsibilities and with all Laws. For greater certainty, the right of access
provided in this Section 7.5 shall not include a right to access or inspect
Patheon’s financial records. Patheon shall notify New River of any inspections
by any governmental agency specifically involving the Products. New River or
its
designee reserves the right to be present during any such inspection by any
governmental agency, to review any findings by such governmental agency that
are
communicated to Patheon, and to have a reasonable period in which to comment
on
any response before such response is sent to the governmental agency. All
audited data shall be treated as Confidential Information of Patheon and New
River or its designee shall not be permitted to remove or copy data without
Patheon’s prior written consent. Any investigation conducted in connection with
an invoice dispute shall not be considered a financial audit under this Section
7.5.
19
CONFIDENTIAL
TREATMENT
|
7.6
|
Reports.
|
Patheon
will supply on an annual basis, and upon lesser intervals as may be reasonably
requested by New River, all Product data, including release test results,
complaint test results, and all investigations (in manufacturing, testing and
storage), that New River reasonably requires in order to complete any filing
under any applicable regulatory regime, including any annual product report
that
New River is required to file with the FDA. At New River’s request, Patheon
shall provide a copy of the Annual Product Review Report to New River at no
additional cost. Any additional report requested by New River beyond the scope
of cGMPs and customary FDA requirements may be subject to an additional fee
to
be agreed upon between Patheon and New River.
|
7.7
|
FDA
Filings.
|
|
(a)
|
FDA
Filings.
New River shall have the sole responsibility for filing all documents
with
the FDA and taking any other actions that may be required for the
receipt
of FDA Approval for the commercial manufacture of all of the Products.
Patheon shall assist New River, to the extent consistent with Patheon’s
obligations under this Agreement, to obtain FDA Approval for the
commercial manufacture of all Products as quickly as reasonably possible.
New River shall provide Patheon with copies of all FDA filings at
the time
of submission which contain chemistry, manufacturing and controls
(“CMC”)
data regarding the Product.
|
|
(b)
|
Verification
of CMC.
[***] with the FDA, or a timeframe mutually agreed to by the parties,
the
CMC of the New Drug Application (“NDA”) or the Abbreviated New Drug
Application (“ANDA”) filing, as the case may be, New River shall provide
Patheon with a draft copy of the CMC portion of such application,
as well
as all supporting documents which have been relied upon to prepare
the CMC
portion, so as to permit Patheon to verify that the CMC portion accurately
describes the work that Patheon has performed and the manufacturing
processes that Patheon will perform pursuant to this
Agreement.
|
|
(c)
|
Pre-Approval
Inspection.
If New River does not provide Patheon with the documentation requested
under paragraph (b) above within the time stipulated in that paragraph
and
if Patheon reasonably believes that Patheon’s standing with the FDA may be
jeopardized, Patheon may, in its sole discretion, delay or postpone
the
FDA pre-approval inspection ( until such time Patheon has reviewed
the
requested documentation and is satisfied that its contents accurately
describe the Manufacturing Services Patheon has performed and will
perform
under this Agreement.
|
|
(d)
|
Deficiencies.
If in Patheon’s reasonable discretion, Patheon determines that any of the
information provided by New River in accordance with paragraph (b)
above
is inaccurate or deficient in any manner whatsoever (the “Deficiencies”),
Patheon shall notify New River in writing of such Deficiencies [***],
and
cooperate in good faith with New River to resolve any
Deficiencies.
|
20
CONFIDENTIAL
TREATMENT
|
(e)
|
New
River Responsibility.
For clarity, the parties agree that in reviewing the documents referred
to
in paragraph (b) above, Patheon’s role will be limited to verifying the
accuracy of the description of the Manufacturing Services undertaken
or to
be undertaken by Patheon. As such, Patheon shall not assume any
responsibility for the accuracy of the NDA or the ANDA, as the case
may
be. The sole responsibility of the preparation and filing of the
NDA shall
be borne by New River.
|
ARTICLE
8
TERM
AND TERMINATION
|
8.1
|
Initial
Term.
|
This
Agreement shall become effective as of the Effective Date and shall continue
until December 31, 2011 (the “Initial
Term”),
unless
terminated earlier by one of the parties in accordance herewith. This Agreement
shall automatically continue after the Initial Term for successive terms of
two
(2) years each unless either party gives written notice to the other party
of
its intention to terminate this Agreement at least twelve (12) months prior
to
the end of the then current term.
|
8.2
|
Termination
for Cause.
|
|
(a)
|
Either
party at its sole option may terminate this Agreement upon written
notice
in circumstances where the other party has failed to remedy a material
breach of any of its representations, warranties or other obligations
under this Agreement [***] of said breach that expressly states that
it is
a notice under this Section 8.2(a) and sets forth in reasonable detail
the
nature of such breach.
|
|
(b)
|
Either
party at its sole option may immediately terminate this Agreement
upon
written notice, but without prior advance notice, to the other party
in
the event that: (i) the other party is declared insolvent or bankrupt
by a
court of competent jurisdiction; (ii) a voluntary petition of bankruptcy
is filed in any court of competent jurisdiction by such other party;
or
(iii) this Agreement is assigned by such other party for the benefit
of
creditors.
|
|
(c)
|
New
River may terminate this Agreement as to any Product at any time
[***] in
the event that any governmental agency takes any action, or raises
any
objection, that prevents New River from importing, exporting, purchasing
or selling such Product.
|
|
(d)
|
In
the event that New River assigns pursuant to Section 13.6 any of
its
rights under this Agreement, Patheon may terminate this Agreement
[***]
if, in the opinion of Patheon acting reasonably, such assignee is
not a
credit worthy substitute for New River. In addition, Patheon or the
permitted assignee may terminate this Agreement [***] to the other
party
if Patheon and the assignee (i) are commercial competitors; or (ii)
have
had prior unsatisfactory business
relations.
|
21
CONFIDENTIAL
TREATMENT
|
8.3
|
Product
Discontinuation.
|
New
River
shall provide [***] if it intends to no longer order a Product due to that
Product’s discontinuance in the market.
|
8.4
|
Termination
upon Regulatory
Refusal.
|
New
River
may terminate this Agreement as to any Product or in its entirety with immediate
effect, in the event that any applicable Authority, state or local regulatory
approvals, laws, ordinances, or regulations, present or future, including but
not limited to any conditions, amendments, or variations state that the
Manufacturing Site is not suitable or ceases to be suitable for the manufacture
of the Product or suspends, or refuses to grant any approval, license, permit,
or other authorization to manufacture the Product.
|
8.5
|
Obligations
on Termination.
|
If
this
Agreement expires or is terminated, with the exception of Failure to Supply,
in
whole or in part for any reason other than for termination by New River under
Section 8.2(a) or (b), then (in addition to any other remedies Patheon may
have
in the event of default by New River):
|
(a)
|
[***]
|
|
(b)
|
[***]
|
|
(c)
|
[***].
|
If
this
Agreement expires or is terminated for any reason, then Patheon shall return
to
New River all unused Active Materials ([***]). Following termination of this
Agreement by New River pursuant to Section 8.2(a), 8.2(b), or 8.4, should New
River desire to manufacture Product at a non-Patheon facility, Patheon shall
assist New River in transferring manufacturing of the Product by providing
support for the transfer of the manufacturing process to New River or an
organization named by New River, pursuant to a plan to be negotiated in good
faith and agreed upon by the parties (the “Process
Transfer Plan”).
Such
Process Transfer Plan [***] and shall also include, without limitation, all
documentation relating to process development, manufacturing procedures, and
product-specific procedures referenced in such manufacturing procedures, test
records and technical documents including testing and characterization of Active
Materials, and any regulatory documents prepared by Patheon to support the
Products. Patheon shall provide New River or its designee with reasonable
assistance and co-operation in the transfer of any know-how or technology
required for the manufacture or validation of the Manufacturing Services by
such
third party in a timely manner. In the event New River terminates this Agreement
pursuant to Section 8.2(a) or (b), Patheon shall grant and hereby does grant
New
River [***] of any Patheon Intellectual Property necessary for performance
of
the Manufacturing Services and New River and Patheon shall share the costs
specified in the Process Transfer Plan for manufacturing transfer activities,
including, without limitation, document duplication and shipping, and associated
time for Patheon personnel.
22
CONFIDENTIAL
TREATMENT
Any
termination or expiration of this Agreement shall not affect any outstanding
obligations or payments due hereunder prior to such termination or expiration,
nor shall it prejudice any other remedies that the parties may have under this
Agreement. For greater certainty, termination of this Agreement for any reason
shall not affect the obligations and responsibilities of the parties pursuant
to
Articles 10, 11 and 12, and Sections 13.1, 13.2, 13.3 and 13.15, all of which
survive any termination.
ARTICLE
9
REPRESENTATIONS,
WARRANTIES AND COVENANTS
|
9.1
|
Authority.
|
Each
party covenants, represents and warrants that it has the full right and
authority to enter into this Agreement, and that it is not aware of any
impediment that would inhibit its ability to perform its obligations
hereunder.
|
9.2
|
New
River Warranties
|
New
River
covenants, represents and warrants that:
|
(a)
|
New
River or its Affiliates have the right to use the Specifications
for each
of the Products as contemplated in this Agreement, and that New River
may
lawfully disclose the Specifications to
Patheon;
|
|
(b)
|
to
the best of its knowledge, any Intellectual Property, other than
Patheon
Intellectual Property, utilized by Patheon in connection with the
provision of the Manufacturing Services (i) may be lawfully used
as set
out in this Agreement and the Quality Agreement, and (ii) such use
does
not infringe any Third Party
Rights;
|
|
(c)
|
to
the best of its knowledge, there are no actions or other legal
proceedings, the subject of which is the infringement of Third Party
Rights related to the Products;
|
|
(d)
|
the
Specifications for all Products conform to all applicable cGMPs,
laws and
regulations; and,
|
|
(e)
|
the
Products, if labeled and manufactured in accordance with the
Specifications and in compliance with applicable cGMPs, may be lawfully
sold and distributed in the
Territory.
|
|
9.3
|
Patheon
Warranties
|
Patheon
covenants, represents and warrants that:
|
(a)
|
it
shall perform the Manufacturing Services in compliance with the terms
of
this Agreement, the Quality Agreement, the Specifications and
cGMPs;
|
23
CONFIDENTIAL
TREATMENT
|
(b)
|
it
has the necessary facilities, plant, equipment, know-how, procedures,
and
personnel at its Manufacturing Site to perform the Manufacturing
Services
in compliance with the terms of this Agreement and the Quality
Agreement;
|
|
(c)
|
each
batch of the Product supplied under this Agreement shall be of
satisfactory quality, free from any defects and manufactured strictly
in
compliance with the Specifications, the terms of this Agreement and
the
Quality Agreement;
|
|
(d)
|
it
has obtained (or will obtain prior to producing Product), and will
maintain and remain in compliance with, all permits, consents, approvals,
licenses and other authorizations or waivers (the “Permits”) during the
term of this Agreement which are required under federal, state and
local
laws, rules, guidelines and regulations generally applicable to the
production of the Product at the Manufacturing Site (including without
limitation Permits required to manufacture the Products to fill
[***]);
|
|
(e)
|
to
the best of its knowledge, the Intellectual Property rights used
to
perform the Manufacturing Services do not infringe any Third Party
Rights;
and
|
|
(f)
|
it
shall convey good title in any Product delivered to New River or
its
designee under this Agreement, and that all such Product will be
delivered
to New River or its designee free from any security interest, lien,
or
other encumbrance.
|
|
9.4
|
Debarred
Persons.
|
Patheon
covenants that it will not in the performance of its obligations under this
Agreement use the services of any person debarred or suspended under 21 U.S.C.
§335(a) or (b). Patheon represents that it does not currently have, and
covenants that it will not hire, as an officer or an employee any person who
has
been convicted of a felony under the laws of the United States for conduct
relating to the regulation of any drug product under the Federal Food, Drug,
and
Cosmetic Act.
|
9.5
|
Permits.
|
New
River
shall be solely responsible for obtaining or maintaining, on a timely basis,
any
permits or other regulatory approvals (other than those required under Section
9.3(d)) in respect of the Products or the Specifications, including, without
limitation, all marketing and post-marketing approvals.
|
9.6
|
Compliance
with Laws.
|
Each
party, in connection with its performance of its obligations under this
Agreement and the Quality Agreement, shall comply with all Laws.
|
9.7
|
No
Warranty
|
THE
WARRANTIES CONTAINED IN THIS ARTICLE 9 ARE THE SOLE WARRANTIES XXXX BY THE
PARTIES HEREUNDER. PATHEON MAKES NO WARRANTY OF ANY KIND, EITHER EXPRESSED
OR
IMPLIED, BY FACT OR LAW, OTHER THAN THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT.
PATHEON MAKES NO WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE OR WARRANTY OF
MERCHANTABILITY WITH RESPECT TO THE PRODUCTS.
24
CONFIDENTIAL
TREATMENT
ARTICLE
10
REMEDIES
AND INDEMNITIES
|
10.1
|
Consequential
Damages
|
Except
for a breach of Article 11, under no circumstances whatsoever shall either
party
be liable to the other in contract, tort, negligence, breach of statutory duty
or otherwise (direct or indirect) for any loss of profits, of production, of
anticipated savings, of business or goodwill or for any liability, damage,
costs
or expense of any kind incurred by the other party of an indirect or
consequential nature. The foregoing provision shall not be construed to limit
a
party’s indemnification obligation under Section 10.3 or 10.4 of this Agreement
for third party claims which may include consequential, punitive or other types
of damages.
|
10.2
|
Limitation
of Liability.
|
|
(a)
|
Active
Materials.
Except as expressly set forth in Section 2.4 hereof, under no
circumstances whatsoever shall Patheon be responsible for any loss
or
damage to the Active Materials. Patheon’s maximum liability for loss or
damage to the Active Materials in a Year
[***].
|
|
(b)
|
Products.
Except to the extent that Patheon has failed to provide the Manufacturing
Services in accordance with the terms of this Agreement or the Quality
Agreement, or has breached its warranties as set forth in Article
9,
Patheon shall not be liable nor have any responsibility for any
deficiencies in, or other liabilities associated with, any Product
manufactured by it, including, without limitation, the costs and
expenses
of any Recall (collectively, “Product
Claims”).
For greater certainty, Patheon shall have no obligation for any Product
Claims, to the extent such Product Claim (i) is caused by deficiencies
with respect to the Specifications themselves and not Patheon’s
implementation of Specifications, the safety, efficacy or marketability
of
the Products or any distribution thereof, (ii) results from a defect
in a
Component that is not reasonably discoverable by Patheon using the
test
methods set forth in the Specifications, (iii) results from a defect
in
the Active Materials or Components supplied by New River that is
not
reasonably discoverable by Patheon using the test methods set forth
in the
Specifications, (iv) is caused by actions of third parties occurring
after
such Product is shipped by Patheon, (iv) is due to packaging or labeling
defects or omissions for which Patheon has no responsibility, or
(v) is
solely due to a breach by New River of its obligations under this
Agreement.
|
|
(c)
|
Maximum
Liability.
Except for any liability arising under Section 10.3, Patheon’s maximum
liability under this Agreement for any reason whatsoever, including,
without limitation, any liability arising under Article 6 hereof
or
resulting from a breach of its representations, warranties or other
obligations under this Agreement
[***].
|
25
CONFIDENTIAL
TREATMENT
|
10.3
|
Patheon.
|
Subject
to Sections 10.1 and 10.2, Patheon agrees to defend, indemnify and hold New
River, its Affiliates, and its or their officers, employees, consultants, and
agents harmless against any and all losses, damages, costs or expenses ([***]),
claims, demands, judgments and liability to, from or in favour of third parties
resulting from, or relating to any claim of personal injury or property damage
to the extent that such injury or damage is the result of or due to the
negligence or wrongful act(s) of Patheon, breach of this Agreement or the
Quality Agreement by Patheon, or a failure by Patheon to provide the
Manufacturing Services in accordance with this Agreement, except to the extent
that any such losses, damages, costs, claims, demands, judgments and liability
are due to the negligence or wrongful act(s) of New River, its officers,
employees or agents or Affiliates.
In
the
event of a claim, New River shall: (a) promptly notify Patheon of any such
claim; (b) use [***] to mitigate the effects of such claim; (c) reasonably
cooperate with Patheon in the defense of such claim; (d) permit Patheon to
control the defense and settlement of such claim, all at Patheon’s cost and
expense; and (e) not make any payment or incur any expenses in connection with
any such claim or make any admission or do anything that may compromise or
prejudice the defense of the claim without the prior written consent of Patheon,
such consent not to be unreasonably withheld or delayed.
|
10.4
|
New
River.
|
Subject
to Sections 10.1 and 10.2, New River agrees to defend, indemnify and hold
Patheon, its Affiliates, and its or their officers, employees, consultants,
and
agents harmless against any and all losses, damages, costs or expenses ([***]),
claims, demands, judgments and liability to, from and in favour of third parties
resulting from, or relating to (i) any claim of infringement or alleged
infringement of any Third Party Rights in respect of the Products, and (ii)
any
claim of personal injury or property damage to the extent that such injury
or
damage is the result of a breach of this Agreement or the Quality Agreement
by
New River, including, without limitation, any representation or warranty
contained herein, except to the extent that any such losses, damages, costs,
claims, demands, judgments and liability are due to the negligence or wrongful
act(s) of Patheon, its officers, employees or agents.
In
the
event of a claim, Patheon shall: (a) promptly notify New River of any such
claims; (b) [***] to mitigate the effects of such claim; (c) reasonably
cooperate with New River in the defense of such claim; (d) permit New River
to
control the defense and settlement of such claim, all at New River’s cost and
expense; and (e) not make any payment or incur any expenses in connection with
any such claim or make any admission or do anything that may compromise or
prejudice the defense of the claim without the prior written consent of New
River, such consent not to be unreasonably withheld or delayed.
26
CONFIDENTIAL
TREATMENT
ARTICLE
11
CONFIDENTIALITY
|
11.1
|
Confidentiality
|
The
parties agree that the provisions of the Confidentiality Agreement shall apply
to all confidential information disclosed by the parties under this Agreement,
and that the activities contemplated and carried out under this Agreement shall
be deemed to be included within the “Business Purpose” as such term is defined
in the Confidentiality Agreement, which agreement remains in effect in
accordance with its terms; provided, however, that in the event the
Confidentiality Agreement expires or is terminated prior to the expiration
or
termination of this Agreement, the terms of the Confidentiality Agreement shall
continue to govern the parties’ obligations of confidentiality with respect to
any confidential or proprietary information disclosed by the parties hereunder,
for the term of this Agreement and [***], as though such agreement remained
in
full force and effect. The parties agree that any confidential or proprietary
information that satisfies the requirements of Section 5(e) or 5(1) of the
Confidentiality Agreement shall, subject to the remainder of the Confidentiality
Agreement, continue to be considered Confidential Information (as defined
therein) for all purposes other than the disclosures specifically contemplated
by such sections. In addition, in the event a party desires to make a disclosure
pursuant to Section 5(e) of the Confidentiality Agreement (including, without
limitation, any disclosure deemed necessary under applicable federal or state
securities laws or any rule or regulation of a nationally recognized securities
exchange), it shall, except where impracticable, give reasonable advance notice
to the other party of such disclosure, use reasonable efforts to secure
confidential treatment of such information, and provide the other party the
opportunity to comment on any confidential treatment requested prior to the
submission.
ARTICLE
12
DISPUTE
RESOLUTION
|
12.1
|
Commercial
Disputes.
|
In
the
event of any dispute arising out of or in connection with this Agreement (other
than a dispute determined in accordance with Section 6.1(b) or a Technical
Dispute), the parties shall first try to solve it amicably. In this regard,
any
party may send a notice of dispute to the other, and each party shall appoint,
[***] from receipt of such notice of dispute, a single representative having
full power and authority to solve the dispute. The representatives so designated
shall meet as necessary in order to solve such dispute. If these representatives
fail to solve the matter within one month from their appointment, or if a party
fails to appoint a representative [***] set forth above, such dispute shall
immediately be referred to the Chief Operating Officer or Executive Vice
President, Operations (or such other officer as such representative may
designate) of each party who will meet and discuss as necessary in order to
try
to solve the dispute amicably. Should the parties fail to reach a resolution
under this Section 12.1, their dispute will be referred to a court of competent
jurisdiction in accordance with Section 13.15.
27
CONFIDENTIAL
TREATMENT
|
12.2
|
Technical
Dispute Resolution.
|
In
the
event of a dispute (other than disputes in relation to the matters set out
in
Sections 6.1(b) and 12.1) between the parties that is exclusively related to
technical aspects of the manufacturing, packaging, labeling, quality control
testing, handling, storage or other activities under this Agreement (a
“Technical
Dispute”),
the
parties shall make all reasonable efforts to resolve the dispute by amicable
negotiations. In this regard, senior representatives of each party shall, as
soon as practicable and in any event no later than [***] after a written request
from either party to the other party, meet in good faith to resolve any
Technical Dispute. If, despite such meeting, the parties are unable to resolve
a
Technical Dispute within a reasonable time, and in any event [***] of such
written request, the Technical Dispute shall, at the request of either party,
be
referred for determination to an expert in accordance with the provisions of
Schedule F. In the event that the parties cannot agree whether a dispute is
a
Technical Dispute, Section 12.1 shall prevail. For greater certainty, the
parties agree that the release of the Products for sale or distribution pursuant
to the applicable marketing approval for such Products shall not by itself
indicate compliance by Patheon with its obligations in respect of the
Manufacturing Services and further that nothing in this Agreement (including
Schedule F) shall remove or limit the authority of the relevant qualified person
(as specified by the Quality Agreement) to determine whether the Products are
to
be released for sale or distribution.
ARTICLE
13
MISCELLANEOUS
|
13.1
|
Inventions.
|
|
(a)
|
For
the term of this Agreement, New River hereby grants to Patheon a
[***] to
New River’s Intellectual Property which Patheon must use in order to
perform the Manufacturing Services under this
Agreement.
|
|
(b)
|
All
Intellectual Property generated or derived by Patheon in the course
of
performing the Manufacturing Services, to the extent it is specific
to the
development, manufacture, use and sale of the Product that is the
subject
of the Manufacturing Services, shall be the exclusive property of
New
River.
|
|
(c)
|
All
Intellectual Property generated or derived by Patheon in the course
of
performing the Manufacturing Services which are not specific, or
dependent
upon, New River’s Product and which have application to manufacturing
processes or formulation development of drug products or drug delivery
systems shall be the exclusive property of Patheon (the “Broader
Intellectual Property Rights”).
Patheon hereby grants to New River, [***] to Patheon’s Broader
Intellectual Property Rights to make, have made, use and sell New
River’s
Product.
|
|
(d)
|
Each
party shall be solely responsible for the costs of filing, prosecution
and
maintenance of patents and patent applications on its own
Inventions.
|
28
CONFIDENTIAL
TREATMENT
|
(e)
|
Either
party shall give the other party written notice, as promptly as
practicable, of all Inventions which can reasonably be deemed to
constitute improvements or other modifications of the Products or
processes or technology owned or otherwise controlled by such other
party.
|
|
(f)
|
Patheon
shall cooperate with New River, and at New River’s request and expense,
shall execute any instrument or do such act or thing as may be necessary
or desirable to ensure that any such Intellectual Property referred
to in
clause 13.1(b) above vest in New River, including without limitation,
obtaining the assignment to such Intellectual Property from its employees
by requiring each such employee to execute a written assignment to
Patheon
prior to performance of Patheon’s obligations
hereunder.
|
|
13.2
|
Intellectual
Properly.
|
Subject
to Section 13.1, all Intellectual Property of New River shall be owned by New
River and all Intellectual Property of Patheon shall be owned by Patheon. Except
as otherwise expressly provided herein, New River and Patheon 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 this
Agreement or subsequently in writing. Each party agrees not to use any
Intellectual Property of the other party, except (i) as specifically authorized
by the other party, (ii) as allowed under Section 13.1, or (iii) as required
for
the performance of its obligations under this Agreement. Except as otherwise
expressly provided herein, nothing contained in this Agreement shall be
construed or interpreted, either expressly or by implication, estoppel or
otherwise, as a grant, transfer or other conveyance by either party to the
other
of any right, title, license or other interest of any kind in any of its
Intellectual Property.
|
13.3
|
Insurance.
|
Each
party shall maintain commercial general liability insurance, including blanket
contractual liability insurance covering the obligations of that party under
this Agreement through the term of this Agreement and for [***] beyond the
expiration date of any Product, which insurance shall afford limits [***] for
each occurrence for personal injury or property damage liability; and (ii)
[***]
with respect to product and completed operations liability. If requested each
party will provide the other with a certificate of insurance evidencing the
above and showing the name of the issuing company, the policy number, the
effective date, the expiration date and the limits of liability. The insurance
certificate shall further provide for [***] to the insured of a cancellation
of,
or material change in, the insurance. If a party is unable to maintain the
insurance policies required under this Agreement through no fault on the part
of
such party, then such party shall forthwith notify the other party in writing
and the parties shall in good faith negotiate appropriate amendments to the
insurance provision of this Agreement in order to provide adequate
assurances.
|
13.4
|
Independent
Contractors.
|
The
parties are independent contractors and this Agreement shall not be construed
to
create between Patheon and New River any other relationship such as, by way
of
example only, that of employer-employee, principal agent, joint-venturer,
co-partners or any similar relationship, the existence of which is expressly
denied by the parties hereto.
29
CONFIDENTIAL
TREATMENT
|
13.5
|
No
Waiver.
|
Either
party’s failure to require the other party to comply with any provision of this
Agreement shall not be deemed a waiver of such provision or any other provision
of this Agreement.
|
13.6
|
Assignment.
|
|
(a)
|
Patheon
may not assign this Agreement or any of its rights or obligations
hereunder except with the written consent of New River, such consent
not
to be unreasonably withheld; provided, however, that Patheon may
arrange
for subcontractors to perform specific testing services arising under
this
Agreement without the consent of New
River.
|
|
(b)
|
Subject
to Section 8.2(d), New River may assign this Agreement or any of
its
rights or obligations hereunder without approval from Patheon; provided,
however, that New River shall give prior written notice of any assignment
to Patheon, any assignee shall covenant in writing with Patheon to
be
bound by the terms of this Agreement and New River shall remain liable
hereunder. Any assignment or partial assignment will be subject to
a cost
review of the assigned Products by Patheon and is subject to assignee
and
Patheon reaching agreement as to revisions, if any, to the fees,
failing
such agreement, Patheon or the permitted assignee may terminate this
Agreement [***] to the other party.
|
|
(c)
|
Notwithstanding
the foregoing provisions of this Section 13.6, either party may assign
this Agreement to any of its Affiliates or to a successor to or purchaser
of all or substantially all of its business, provided that such assignee
executes an agreement with the non-assigning party hereto whereby
it
agrees to be bound hereunder.
|
|
13.7
|
Force
Majeure.
|
Neither
party shall be liable for the failure to perform its obligations under this
Agreement if such failure is occasioned by a cause or contingency beyond such
party’s reasonable control, including, but not limited to, strikes or other
labor disturbances, lockouts, riots, public health quarantines, communicable
disease outbreaks, wars, acts of terrorism, fires, floods, storms, interruption
of or delay in transportation, defective equipment (solely to the extent that
such defects in equipment are not due to Patheon’s negligence and are outside
Patheon’s control), lack of or inability to obtain fuel, power or components
(solely to the extent that the procurement of such components is the
responsibility of New River), or compliance with any order or regulation of
any
government entity acting within color of right (a “Force
Majeure Event”).
A
party claiming a right to excused performance under this Section 13.7 shall
immediately notify the other party in writing of the extent of its inability
to
perform, which notice shall specify the occurrence beyond its reasonable control
that prevents such performance. Neither party shall be entitled to rely on
a
Force Majeure Event to relieve it from an obligation to pay money (including
any
interest for delayed payment) which would otherwise be due and payable under
this Agreement.
30
CONFIDENTIAL
TREATMENT
|
13.8
|
Additional
Product.
|
Additional
products may be added to this Agreement and such additional products shall
be
governed by the general conditions hereof with any special terms (including,
without limitation, price) governed by an addendum hereto.
|
13.9
|
Notices.
|
Any
notice, approval, instruction or other written communication required or
permitted hereunder shall be sufficient if made or given to the other party
by
personal delivery, by telecopier or facsimile communication or by sending the
same by first class mail, postage prepaid to the mailing address, or telecopier
or facsimile number set forth below:
If
to
New River
0000
Xxxxx Xxxxxx
Xxxxxxx,
Xxxxxxxx 00000
Attention:
Chief Executive Officer
with
a
copy to: New River Legal Department
Telecopier
No.: 000-000-0000
If
to
Patheon:
Patheon
Inc.
0000
Xxxxxxxxxxx Xxxx,
Xxxxx
000, Xxxxxxxxxxx, Xxxxxxx
LSN
7J8
Attention:
President, Patheon U.S.A.
Telecopier
No.: 000-000-0000
with
a
copy to:
Patheon
Pharmaceuticals Inc.
0000
Xxxx
(Xxxxxxxxx Xxxx
Xxxxxxxxxx,
Xxxx 00000-0000
Attention:
Director of Legal Services
Telecopier
No.: 000-000-0000
or
to
such other addresses or telecopier or facsimile numbers provided to the other
party in accordance with the terms of this Section 13.9. Notices or written
communications made or given by personal delivery or by telecopier or facsimile
shall be deemed to have been sufficiently made or given when sent (receipt
acknowledged), or if mailed, five days after being deposited in the United
States mail, postage prepaid or upon receipt, whichever is
sooner.
31
CONFIDENTIAL
TREATMENT
|
13.10
|
Severability.
|
If
any
provision of this Agreement is determined by a court of competent jurisdiction
to be invalid, illegal or unenforceable in any respect, such determination
shall
not impair or affect the validity, legality or enforceability of the remaining
provisions hereof, and each provision is hereby declared to be separate,
severable and distinct.
|
13.11
|
Entire
Agreement.
|
This
Agreement, together with the Quality Agreement and the Confidentiality
Agreement, constitutes the full, complete, final and integrated agreement
between the parties hereto relating to the subject matter hereof and supersedes
all previous written or oral negotiations, commitments, agreements, transactions
or understandings with respect to the subject matter hereof Any modification,
amendment or supplement to this Agreement must be in writing and signed by
authorized representatives of both parties. In case of conflict, the prevailing
order of documents shall be this Agreement, the Quality Agreement and the
Confidentiality Agreement.
|
13.12
|
Other
Terms.
|
The
parties agree that no terms, provisions or conditions of any purchase order
or
other business form or written authorization used by New River or Patheon will
have any effect on the rights, duties or obligations of the parties under or
otherwise modify this Agreement, regardless of any failure of New River or
Patheon to object to such terms, provisions, or conditions unless such document
specifically refers to this Agreement and is signed by both
parties.
|
13.13
|
No
Third Party Benefit or
Right.
|
For
greater certainty, nothing in this Agreement shall confer or be construed as
conferring on any third party, except an Affiliate of the parties, any benefit
or the right to enforce any express or implied term of this
Agreement.
|
13.14
|
Execution
in Counterparts.
|
This
Agreement may be executed in two counterparts, by original or facsimile
signature, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
|
13.15
|
Governing
Law.
|
This
Agreement shall be construed and enforced in accordance with the laws of the
State of Delaware. The parties expressly agree that the UN Convention on
Contracts for the International Sale of Goods shall not apply to this
Agreement.
32
CONFIDENTIAL
TREATMENT
IN
WITNESS WHEREOF, the duly authorized representatives of the parties have
executed this Agreement as of the date first written above.
|
PATHEON
PHARMACEUTICALS INC.
|
|||
|
By:
|
/s/ Xxxxxx X. Xxxxxxxxx | ||
|
Date:
|
10/3/06 | ||
|
NEW
RIVER PHARMACEUTICALS, INC.
|
|||
|
By:
|
/s/ Xxxxx X. Xxxxxxxx | ||
|
Date:
|
9/26/06 | ||
33
CONFIDENTIAL
TREATMENT
SCHEDULE
A
PRODUCT
FORMULA AND SPECIFICATIONS
Prior
to
the commencement of commercial manufacturing of Product under this Agreement
New
River shall provide Patheon with originally executed copies of the FDA approved
Specifications. If the Specifications provided are subsequently amended, then
New River shall provide Patheon with revised and originally executed copies
of
such revised Specifications. Upon acceptance of the revised Specifications,
Patheon shall provide New River with a signed and dated receipt evidencing
such
acceptance of the revised Specifications by Patheon.
34
CONFIDENTIAL
TREATMENT
SCHEDULE
B
RUN
QUANTITY, ANNUAL VOLUME AND FEES
|
·
|
Annual
Volume in all tables represents the sum total capsules for all
[***].
|
|
·
|
This
proposal is based on an Annual Volume of [***]
capsules.
|
|
[***]
|
||||||||||||
|
V-Blender/
Batch
Size
|
[***]
|
[***]
|
||||||||||
|
Annual
Volume
(million
caps)
|
[***]
|
[***]
|
||||||||||
|
DEA
Schedule
|
II
|
III+
|
II
|
III+
|
||||||||
|
Run
Quality
(batches)
|
1
|
2
|
3
|
1
|
2
|
3
|
5
|
1
|
3
|
2
|
3
|
5
|
|
Run
Quantity
(bottles)
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
35
CONFIDENTIAL
TREATMENT
|
[***]
|
||||||||||||
|
V-Blender/
Batch
Size
|
[***]
|
[***]
|
||||||||||
|
Annual
Volume
(million
caps)
|
[***]
|
[***]
|
||||||||||
|
DEA
Schedule
|
II
|
III+
|
II
|
III+
|
||||||||
|
Run
Quality
(batches)
|
1
|
2
|
3
|
1
|
2
|
3
|
5
|
1
|
3
|
2
|
3
|
5
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***].
36
CONFIDENTIAL
TREATMENT
|
[***]
|
||||||||||||
|
V-Blender/
Batch
Size
|
[***]
|
[***]
|
||||||||||
|
Annual
Volume
(million
caps)
|
[***]
|
[***]
|
||||||||||
|
DEA
Schedule
|
II
|
III+
|
II
|
III+
|
||||||||
|
Run
Quality
(batches)
|
1
|
2
|
3
|
1
|
2
|
3
|
5
|
1
|
3
|
2
|
3
|
5
|
|
Run
Quantity
(bottles)
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
37
CONFIDENTIAL
TREATMENT
Manufacturing
Assumptions
|
1.
|
The
manufacturing process at Patheon will closely follow the process
information provided by NRP and year-to-date experience with this
product
at the site.
|
|
2.
|
[***].
|
|
3.
|
Final
blending of granulation will utilize the [***], for the [***],
respectively.
|
|
4.
|
The
[***] and [***] will also used in
processing.
|
|
5.
|
Encapsulation
will be run using an [***].
|
|
6.
|
Capsules
for all strengths are size #3, at the following target fill
weights:
|
|
•
|
[***]
|
|
•
|
[***]
|
|
•
|
[***]
|
|
7.
|
Depending
on the total capsule volume mix at the time, a second encapsulator
will be
required for the higher volume tiers. Another GKF 1500 encapsulator
is
available, but needs to be rebuilt. In addition, a new booth will
be
required to house this second
machine.
|
|
8.
|
It
is assumed that capsule checkweighing is not required. If NRP requires
capsules to be checkweighed then evaluation on labor input and yield
assumptions will be necessary.
|
|
9.
|
Batch
sizes and various campaign runs are proposed against each volume
tier and
DEA Schedule options, in the Pricing Tables. It is assumed that each
campaign can be a composite of different strengths, and can be sequenced
to minimize additional cleanup.
|
|
10.
|
[***]
to be required on all processing steps, if the product is a DEA Schedule
II drug.
|
Packaging
Assumptions
|
1.
|
The
packaging equipment train for bottles of [***] will consist of the
following equipment:
|
|
•
|
[***]
|
|
•
|
[***]
|
|
•
|
[***]
|
38
CONFIDENTIAL
TREATMENT
|
•
|
[***]
|
|
•
|
[***]
|
|
•
|
[***]
|
|
•
|
[***]
|
|
•
|
[***]
|
|
2.
|
No
carton is assumed.
|
|
3.
|
An
outsert will be applied to each
bottle.
|
|
4.
|
The
same bottle and cap will be used for all
strengths.
|
|
5.
|
[***]
will be placed into each shipper.
|
|
6.
|
As
per request, a bulk price option is also presented. Bulk capsules
will be
packed into lined and sealed fiber drums ([***]), in quantity of
about
[***] capsules each.
|
Testing
Assumptions
|
1.
|
Raw
material and finished product testing are based on available
specifications and Patheon’s best
estimates.
|
|
2.
|
Standard
product testing such as identity, assay, content uniformity, related
substances is assumed.
|
|
3.
|
It
is assumed that [***].
|
|
4.
|
Testing
labor may be subject to change after the final agreement on testing
specifications and requirements.
|
General
Assumptions, Terms and Conditions
Pricing
for various campaign runs as listed are provided. However, at the beginning
of
each year, the batch size and campaign size selected for the year will be agreed
upon by both parties, based on forecast.
39
CONFIDENTIAL
TREATMENT
SCHEDULE
C
STABILITY
TESTING
Patheon
and New River shall agree in writing on any stability testing to be performed
by
Patheon in connection with the Products. Such agreement shall specify the
commercial and Product stability protocols applicable to the stability testing
and the fees payable by New River in connection with such
testing.
40
CONFIDENTIAL
TREATMENT
SCHEDULE
D
ACTIVE
MATERIALS
|
Active
Materials
|
Supplier
|
|
[***]
|
Approved contract
manufacturers as outlined in the NDA submitted by
[***]
|
ACTIVE
MATERIALS CREDIT VALUE
For
the
purposes of the Agreement, the parties agree that the Active Materials Credit
Value shall be as follows:
|
Product
|
Active
Materials
|
Active
Materials Credit Value
|
|
[***]
|
[***]
|
The
actual cost to New River of Active Materials
[***]
|
MAXIMUM
CREDIT VALUE
Patheon’s
liability for Active Materials calculated in accordance with Section 2.4 of
the
Agreement for any Product in a Year shall not exceed, in the aggregate, the
maximum credit value set forth below:
|
Product
|
Maximum
Credit Value
|
|
[***]
|
(a)
[***];
(b)
[***];
(c)
[***]
|
41
CONFIDENTIAL
TREATMENT
SCHEDULE
E
BATCH
NUMBERING AND EXPIRATION DATES
Each
batch of the Product manufactured by Patheon will bear a unique batch number
using the Patheon batch numbering system. This number will appear on all
documents relating to the particular batch of Product.
Patheon
will calculate the expiration date for the product for each batch by adding
the
expiration period of the Product supplied by New River to the date of
Manufacture of each batch.
42
CONFIDENTIAL
TREATMENT
SCHEDULE
F
TECHNICAL
DISPUTE RESOLUTION
Technical
Disputes which cannot be resolved by negotiation as provided in Section 12.2
shall be resolved in the following manner:
1. Appointment
of Expert.
[***]
after a party requests pursuant to Section 12.2 that an expert be appointed
to
resolve a Technical Dispute, the parties shall jointly appoint a mutually
acceptable expert with experience and expertise in the subject matter of the
dispute. If the parties are unable to so agree within such [***], or in the
event of disclosure of a conflict by an expert pursuant to paragraph 2 hereof
which results in the parties not confirming the appointment of such expert,
then
an expert (willing to act in that capacity hereunder) shall be appointed by
an
experienced arbitrator on the roster of the American Arbitration
Association.
2. Conflicts
of Interest.
Any
person appointed as an expert shall be entitled to act and continue to act
as
such, notwithstanding that at the time of his appointment or at any time before
he gives his determination, he has or may have some interest or duty which
conflicts or may conflict with his appointment, provided that before accepting
such appointment (or as soon as practicable after he becomes aware of the
conflict or potential conflict) he fully discloses any such interest or duty
and
the parties shall after such disclosure have confirmed his
appointment.
|
3.
|
Procedure.
Where an expert is appointed:
|
|
(a)
|
Timing
The expert shall be so appointed on condition that (i) he promptly
fixes a
reasonable time and place for receiving representations, submissions
or
information from the parties and that he issues such authorizations
to the
parties and any relevant third party for the proper conduct of his
determination and any hearing and (ii) he renders his decision (with
full
reasons) [***] (or such other date as the parties and the expert
may
agree) after receipt of all information requested by him pursuant
to
paragraph 3(b) hereof.
|
|
(b)
|
Disclosure
of Evidence The parties undertake one to the other to provide to
any
expert all such evidence and information within theft respective
possession or control as the expert may reasonably consider necessary
for
determining the matter before him which they shall disclose promptly
and
in any event [***] of a written request from the relevant expert
to do
so.
|
|
(c)
|
Advisors
Each party may appoint such counsel, consultants and advisors as
it feels
appropriate to assist the expert in his determination and so as to
present
theft respective cases so that at all times the parties shall co-operate
and seek to narrow and limit the issues to be
determined.
|
|
(d)
|
Appointment
of New Expert.
If
within the time specified in paragraph 3(a) above the expert shall
not have rendered a decision in accordance with his appointment,
a new
expert may (at the request of either party) be appointed and the
appointment of the existing expert shall thereupon cease for the
purposes
of determining the matter at issue between the parties save that
if the
existing expert renders his decision with 11111 reasons prior to
the
appointment of the new expert, then such a decision shall have effect
and
the proposed appointment of the new expert shall be
withdrawn.
|
43
|
(e)
|
Final
and Binding The determination of the expert shall, save in the event
of
fraud or manifest error, be final and binding upon the
parties.
|
|
(f)
|
Costs
Each party shall bear its own costs in connection with any matter
referred
to an expert hereunder and, in the absence of express provision in
the
Agreement to the contrary, the costs and expenses of the expert shall
be
shared equally by the parties.
|
For
greater certainty, the parties agree that the release of the Products for sale
or distribution pursuant to the applicable marketing approval for such Products
shall not by itself indicate compliance by Patheon with its obligations in
respect of the Manufacturing Services and further that nothing in this Agreement
(including this Schedule F) shall remove or limit the authority of the relevant
qualified person (as specified by the Quality Agreement) to determine whether
the Products are to be released for sale or distribution.
44
CONFIDENTIAL
TREATMENT
SCHEDULE
G
QUALITY
AGREEMENT
45
CONFIDENTIAL
TREATMENT
QUALITY
AGREEMENT
BETWEEN
NEW
R PHARMACEUTICALS INC
AND
PATHEON
PHARMACEUTICALS INC
CONFIDENTIAL
TREATMENT
Table
of Contents
QUALITY
AGREEMENT
|
1.
|
PARTIES
|
5
|
|
|
2.
|
QUALITY
AGREEMENT
|
5
|
|
|
3.
|
ADMINISTRATIVE
INFORMATION
|
5
|
|
|
4.
|
PRODUCTS
|
5
|
|
|
5.
|
DURATION
OP AGREEMENT
|
5
|
|
|
6.
|
CONFIDENTIALITY
|
6
|
|
|
7.
|
SECURITY
|
6
|
|
|
8.
|
SUPPLY
|
6
|
|
|
8.1.
|
Premises
|
6
|
|
|
8.2.
|
Product
Specification and Master Production Records
|
6
|
|
|
8.3.
|
GMP
Guidelines
|
7
|
|
|
8.4.
|
Materials
|
7
|
|
|
8.5.
|
Master
Production Record Approval
|
8
|
|
|
8.6.
|
Production
|
8
|
|
|
8.7.
|
Methodology
|
8
|
|
|
8.8.
|
Standard
Operating Procedures
|
8
|
|
|
8.9.
|
Dates
of Manufacture and Expiration
|
8
|
|
|
8.10.
|
Manufacturing
and Equipment Data
|
9
|
|
|
9.
|
QUALITY
ASSURANCE AND CONTROL
|
9
|
|
|
9.1.
|
Laboratory
Control of Materials
|
9
|
|
|
9.2.
|
In-Process
and Finished Product Testing
|
9
|
|
|
9.3.
|
Release
Procedures
|
10
|
|
|
9.4.
|
Documentation
|
10
|
|
2
CONFIDENTIAL
TREATMENT
|
9.5.
|
Retain
Sampling
|
11
|
|
|
9.6.
|
Stability
|
11
|
|
|
9.7.
|
Deviations
and Investigations
|
12
|
|
|
9.8.
|
Rejection
of Product
|
13
|
|
|
9.9.
|
Dispute
Resolution
|
13
|
|
|
9.10.
|
Regulatory
Inspections
|
13
|
|
|
9.11.
|
Regulatory
Actions at New River
|
14
|
|
|
9.12.
|
Regulatory
Investigations
|
14
|
|
|
9.13.
|
Manufacturing
Audits (MA)
|
14
|
|
|
9.14.
|
Correspondence:
|
15
|
|
|
9.15.
|
Product
Complaints
|
16
|
|
|
9.16.
|
Product
Recalls
|
16
|
|
|
9.17.
|
Compliance
Deficiencies
|
16
|
|
|
9.18.
|
NDA
Field Alerts
|
16
|
|
|
10.
|
CHANGE
MANAGEMENT
|
16
|
|
|
11.
|
PRODUCT
AND PROCESS VALIDATION
|
17
|
|
|
11.1.
|
Process
|
17
|
|
|
11.2.
|
Cleaning
Validation
|
17
|
|
|
11.3.
|
Equipment,
Computer, Facility, and Utilities Qualification
|
18
|
|
|
11.4.
|
Laboratory
Qualifications
|
18
|
|
|
12.
|
ANNUAL
PRODUCT REVIEW, DRUG LISTING, AND ANNUAL REPORTS
|
18
|
|
|
12.1.
|
Annual
Product Review
|
18
|
|
|
12.2.
|
Drug
Listing
|
19
|
|
|
12.3.
|
Annual
Reports, IND Updates or Other Regulatory Filings
|
19
|
|
|
13.
|
STORAGE
AND SHIPPING
|
19
|
|
3
CONFIDENTIAL
TREATMENT
|
13.1.
|
Storage
|
19
|
|
|
13.2.
|
Packing
and Labeling for Transit
|
19
|
|
|
13.3.
|
Mixing
of Product
|
19
|
|
|
13.4.
|
Shipment
of Product to New River
|
20
|
|
|
14.
|
CONTRACTUAL
AGREEMENT
|
20
|
|
|
APPENDIX
I
|
-
|
RESPONSIBILITIES
MATRIX
|
|
APPENDIX
II
|
-
|
DEFINITIONS
|
|
APPENDIX
III
|
-
|
LIST
OF CONTACTS
|
|
APPENDIX
IV
|
-
|
BATCH
DOCUMENT AUDIT SCHEDULE
|
|
APPENDIX
V
|
-
|
LIST
OF PRODUCTS
|
|
APPENDIX
VI
|
-
|
RELEASE
DOCUMENTATION
|
|
APPENDIX
VII
|
-
|
NEW
RIVER APPROVED SUPPLIER LIST
|
|
APPENDIX
VIII
|
-
|
PATHEON
APPROVED SUPPLIER LIST
|
4
CONFIDENTIAL
TREATMENT
|
1.
|
PARTIES
|
This
Quality Agreement is effective as of __________, 2006, by and between New River
Pharmaceuticals Inc., a Virginia Corporation having it’s corporate offices at
0000 Xxxxx Xxxxxx, Xxxxxxx Xxxxxxxx 00000 (hereinafter referred to as “New
River”) and Patheon Pharmaceuticals Inc., a Delaware Corporation having a place
of business at 0000 Xxxx Xxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxx 00000 (hereinafter
referred to as “Patheon”).
|
2.
|
QUALITY
AGREEMENT
|
This
agreement defines the roles and responsibilities of Patheon for services or
materials supplied to New River or affiliates, for commercial distribution
or
clinical trial use to ensure compliance with applicable cGMPs. This agreement
is
supplemental to and constitutes a part of the Manufacturing Agreement entered
into between New River and Patheon on the same date as noted in Section 1 above
(the “Manufacturing Agreement”). The provisions of this Agreement are intended
to be supplemental to and not in derogation from the terms of the Manufacturing
Agreement and provisions contained herein shall be treated as supplemental
to
the Manufacturing Agreement and in particular but without limitation in relation
to the application,, compliance, verification and implementation of cGMP. To
the
extent any terms set forth in this Agreement conflict with the terms of the
Manufacturing Agreement, the tents of the Manufacturing Agreement shall control
unless otherwise specified in this Agreement. A responsibilities matrix can
be
found in Appendix I it is intended to support the terms of this agreement.
The
terms of this agreement take jurisdiction over the information in the
responsibilities matrix should a conflict be noted. Capitalized terms used
in
this Agreement shall have the same meaning as set forth in the Manufacturing
Agreement, unless defined in Appendix II or otherwise defined
herein.
|
3.
|
ADMINISTRATIVE
INFORMATION
|
Contact
names will be provided from both sites for key functional areas. Contact names
are provided in Appendix III and may be updated as needed upon written notice
of
a Party.
|
4.
|
PRODUCTS
|
A
product
list is provided in Appendix V and may be updated as needed and authorized
by
both parties. In this Agreement, all products in the Appendix will be referred
to as “Products”.
|
5.
|
DURATION
OP AGREEMENT
|
This
Agreement shall commence on execution by both Parties and subject to the
following provisions of this clause shall expire or terminate on the expiry
or
termination of the Manufacturing Agreement. Any section of this Agreement which
has a predefined retention, survival or maintenance period, for example raw
data
storage, product complaints and sample retention, shall survive the termination
of this Agreement upon termination of the Manufacturing Agreement for the period
defined in the appropriate section. This Agreement cannot be modified except
with the written approval of both Parties. Specifications and Master Batch
Records may be modified with written authorization font designated Quality
Assurance representatives of both companies.
5
CONFIDENTIAL
TREATMENT
|
6.
|
CONFIDENTIALITY
|
Confidential
Information shall be governed by the terms of the applicable Manufacturing
Agreement. Both Parties will treat as confidential all data supplied by the
other in connection with the manufacture of the Products.
|
7.
|
SECURITY
|
Patheon
has and will maintain controlled access to the Plant through a security card
key
or similar system. All visitors will be required by Patheon to sign-in and
be
escorted during any site visit. All Third Party visitors will be required to
enter into a confidentiality agreement prior to entering areas being used to
manufacture the New River Products.
|
8.
|
SUPPLY
|
|
8.1
|
Premises
|
|
8.1.1
|
Patheon
will manufacture, package, and/or test the Products at the Plant
and will
not use or transfer at a later date any of the manufacturing, packaging
or
testing operations for the Product(s) to Third Parties or other sites
without the prior written agreement of New
River.
|
|
8.1.2
|
Patheon
will ensure at all times that the premises and equipment comprising
the
Plant used to manufacture/supply the Products comply at all times
with
current regulatory requirements and are in accordance with the
documentation approved by New
River.
|
|
8.2
|
Product
Specification and Master Production
Records
|
|
8.2.1
|
Patheon
will manufacture, package, and test the Product(s) in accordance
with the
most recent version of the Specifications and Master Batch Record
(formula, in-process and release specs, methods, shelf life, and
regulatory requirements) as supplied or approved by New River. All
such
documentation must be approved by New River (see section
11).
|
|
8.2.2
|
New
River will select the API supplier - quality assurance and purchasing
evaluations, which verify compliance by the supply company with cGMP
and
Specifications. Patheon will select approved excipient suppliers
according
to Patheon Procedures and SOPs, which verify compliance by the supply
company with cGMP and Specifications. New River must approve suppliers.
When suppliers are identified in the NDA or compendial documentation,
Patheon will be limited to those suppliers. Any change from these
suppliers must be first approved through New River’s change control
system.
|
6
CONFIDENTIAL
TREATMENT
|
8.2.2.1
|
Raw
Material Specification
|
Patheon
will obtain excipient from approved suppliers as defined in the appropriate
Regulatory documentation. Patheon will test Raw Materials to the full
Specification unless a supplier Certificate of Analysis (“COA”) is available
from a certified supplier, in which case, complete testing may not be required
upon mutual agreement and written approval by both Patheon and New
River.
|
8.2.2.2
|
Label
Component Specifications
|
Patheon
will use only labels and labeling approved in compliance with Specifications
provided or approved by New River.
|
8.2.2.3
|
Packaging
Component Specifications
|
Patheon
will obtain primary packaging components from approved suppliers as defined
in
the appropriate Regulatory documentation and test packaging components to the
full Specification unless a validated supplier COA is available from a certified
supplier. If a COA is available complete testing may not be necessary upon
written approval by New River. Packaging Specifications must be provided or
approved by New River.
|
8.3
|
GMP
Guidelines
|
Any
applicable product license or pharmacopoeia or formulatory requirements
applicable to the manufacture of Product(s) shall be complied with in addition
to cGMP and Specifications.
|
8.4
|
Materials
|
|
8.4.1
|
Materials
Procured by Patheon
|
Patheon
is responsible for ensuring that all Raw Materials procured for use in the
Product(s) are in fill compliance with the Specifications in accordance with
8.2. Raw Materials shall be given a recontrol date upon the satisfactory
completion of all-initial testing. Recontrol testing will be performed at
defined time intervals to ensure the chemical and physical stability of the
Raw
Materials. New River may audit any Patheon program that allows retesting or
recontrol of Raw Materials.
7
CONFIDENTIAL
TREATMENT
|
8.4.2
|
Materials
Provided by New River
|
Active
Materials provided by New River require acceptance testing by Patheon to confirm
that the Active Materials are in full compliance with the Specifications.
Patheon is responsible for ensuring that all Active Materials are used
correctly, have the correct identity by testing identity on receipt, and have
met the relevant analytical testing requirements for the Batch.
|
8.5
|
Master
Production Record Approval
|
Patheon
may transcribe the information (i.e. formulation, filling work order, packaging
work order) into its own format and must obtain written approval from New River
US Corporate Quality Assurance for each document version before
Manufacturing.
|
8.6
|
Production
|
The
Products will be Manufactured in accordance with the manufacturing and packaging
procedures set forth in the Specifications and Master Batch Records and
additional internal Patheon site procedures. Such procedures must be made
available for scrutiny during audits by authorized personnel of New
River.
|
8.7
|
Methodology
|
Patheon
will test Raw Materials and Products using the approved methodology listed
in
the appropriate Specification.
|
8.8
|
Standard
Operating Procedures
|
Patheon
is responsible for maintaining any Standard Operating Procedures (SOPs) required
to make the Product in accordance with cGMPs and as described in the NDA or
compendial documentation as well as any other regulatory
requirements.
|
8.9
|
Dates
of Manufacture and Expiration
|
|
8.9.1
|
Date
of Manufacture
|
Patheon
will determine the date of manufacture based on site SOPs that identify the
date
as the date that the Active Material is mixed or added to the batch
materials.
|
8.9.2
|
Expiration
Date
|
New
River
will provide the appropriate approved expiry period so Patheon can calculate
expiration dates for Batches to be manufactured.
8
CONFIDENTIAL
TREATMENT
|
8.10
|
Manufacturing
and Equipment Data
|
Patheon
is responsible for safe keeping and retention of records of machine usage
(previous product produced in non-dedicated machinery), cleaning, any
maintenance(calibration performed, Raw Material batch numbers and certification,
in-process results and parameters, and test results in accordance with and
shall
perform all functions in accordance with legal and regulatory requirements
and
all Applicable Laws.
|
9.
|
QUALITY
ASSURANCE AND CONTROL
|
|
9.1
|
Laboratory
Control of Materials
|
|
9.1.1
|
Any
Specifications, sampling plans, and test procedures, including changes
to
these, should be drafted by Patheon and reviewed and approved by
New
River.
|
|
9.1.2
|
Quality
control of Raw Materials supplied by Patheon or by suppliers to Patheon
will be undertaken by Patheon in accordance with the Specifications
and
methods approved by New River.
|
|
9.1.2.1
|
Patheon
is responsible for investigating any laboratory out of specification
(005)
results per Patheon’s internal procedures. Each 005 investigation must be
reviewed and approved by Patheon’s designated quality assurance person and
must evaluate if the failure has jeopardized the safety, efficacy
or
quality of the Product.
|
|
9.1.2.2
|
New
River must be notified [***] of the start of a significant “un-planned”
batch or testing deviation. Patheon will forward the completed package
upon conclusion of the
investigation.
|
|
9.1.3
|
New
River must be notified in writing prior to the testing or processing
of a
“planned” batch or testing deviation. Approval of such planned deviation
must be given by New River. Patheon will forward the completed package
upon conclusion of the
investigation.
|
|
9.1.4
|
Any
reference standards that are supplied by New River or New River’s
Affiliates must be accompanied by a COA listing the expiration date
and
any correction factors that need to be
applied.
|
|
9.2
|
In-Process
and Finished Product Testing
|
|
9.2.1
|
Raw
Materials and packaging components
|
Patheon
will ensure that all materials used are in compliance with the compendial and/or
approved Methods and Specifications.
9
CONFIDENTIAL
TREATMENT
|
9.2.2
|
Patheon
will perform all in-process and finished Product testing using the
Specifications, and Methods of analysis listed in the release
documentation list provided and approved by New River’s Quality Assurance
and other applicable licenses.
|
|
9.3
|
Release
Procedures
|
|
9.3.1
|
Product
|
Patheon
is responsible for ensuring and certifying that the Product has been made
according to cGMPs, the Specifications and procedures documented in the Master
Batch Record. This includes a complete and thorough review of the executed
batch
records. Executed batch records will be requested by New River for periodic
review independent of batch investigations conducted for batch or testing
difficulties. The planned frequency of New River full review of batch records
will be outlined in Appendix IV. Patheon will supply requested documents within
5 days of completion of batch manufacturing and/or packaging and closure of
all
related deviations.
|
9.3.2
|
Certificate
of Compliance/Analysis
|
Prior
to
release, a Patheon Quality Assurance Representative will sign a Certificate
of
Compliance/Analysis confirming that the Product has been Manufactured, packaged
and tested in. accordance with cGMP and Applicable Laws and meets the
requirements of the Master Batch Record and Specifications. These documents
will
also include the packaging lot numbers, associated batch expiry dates, and
quantifies in each shipment. The specific lot number will be the lot number
identified on the executed batch record for the finished product being released.
Routine release documentation is identified in Appendix VI.
|
9.3.3
|
New
River Receipts
|
Release
of Products to the market or for use in clinical studies will be undertaken
by
New River based on New River’s internal procedures and the documentation
provided by Patheon. Patheon may not release Product to market.
|
9.3.4
|
New
River Confirmatory Testing
|
New
River
or its affiliates may perform confirmatory testing to validate Patheon’s
data.
|
9.4
|
Documentation
|
|
9.4.1
|
Requests
for Full Documentation
|
10
CONFIDENTIAL
TREATMENT
Patheon
agrees to supply New River or its Affiliates with any completed Manufacturing,
packaging, testing, or stability data [***] of request.
|
9.4.2
|
Patheon
will retain, at minimum, batch production records, quality control
testing
records, all records of shipments of the Product from Patheon, all
validation data and other documentation relating to the Product for
the
time periods required by Applicable Laws with respect to the Product
according to Patheon site
procedures.
|
|
9.4.2.1
|
Patheon
shall make such records and data available for review by New River
at
Patheon’s Plant upon [***] prior written notice from New River to Patheon
and at a time mutually agreeable to both New River and
Patheon.
|
|
9.4.3
|
Patheon
shall, upon New River’s request, supply to New River a copy of its
document retention policy. Upon termination or expiration of this
Agreement or prior to destruction of any records, whichever occurs
first,
Patheon will upon New River’s written request and at New River’s expense,
make copies of such records and data for New
River.
|
|
9.5
|
Retain
Sampling
|
|
9.5.1
|
Retain
Samples - Raw Materials
|
Patheon
will retain samples of Active Materials for at least one year beyond the expiry
period of the Products in which such Active Materials were used. The amount
of
sample retained will be [***] required to carry out all of the tests required
to
determine if the material meets its Specifications.
|
9.5.2
|
Retain
Samples - Products
|
Patheon
will retain samples of the Products for at least one year beyond the expiry
period. The amount of sample retained will be [***] required to early out all
of
the tests required to determine if the material meets its
Specifications.
|
9.6
|
Stability
|
|
9.6.1
|
Routine/Commercial
Stability Program
|
|
9.6.1.1
|
Patheon
is responsible for maintaining a routine stability testing program
for the
Products, and it will be performed per Patheon site SOPs. Patheon
will
provide stability data [***] to New River or more frequently if requested
by New River.
|
|
9.6.1.2
|
The
stability program will be in compliance with any license commitments
as
notified by New River. At a minimum one lot of each product, of each
strength and in each package type (largest to smallest) will be placed
on
stability each year unless otherwise agreed to in writing by Patheon
and
New River. The stability program must comply with ICH and FDA guidelines.
The stability protocol or any changes must be approved by New
River.
|
11
CONFIDENTIAL
TREATMENT
|
9.6.2
|
Development
(Clinical, Registration, R&D) Stability
Program
|
Patheon
will be responsible for performing any development stability required to support
the Products. If that development stability is to support projects initiated
by
Patheon, then Patheon will develop, execute and write reports for the program.
All protocols for and reports from such work must be approved by New
River.
|
9.6.3
|
Stability
Failures
|
Any
confirmed problems or out of specification (OOS) results which arise as a result
of or during any of the stability programs will be communicated by Patheon
to
New River [***].
|
9.6.4
|
Patheon
will supply New River’s Quality Assurance department with completed
stability results [***] of receiving a written
request.
|
|
9.7
|
Deviations
and Investigations
|
|
9.7.1
|
Deviations
|
Any
deviation from the process during Manufacture must be fully investigated
according to Patheon’s procedures and will be carefully explained and documented
in the batch records, justified and approved by Patheon’s Quality Assurance
Department, and included in the documentation package.
|
9.7.1.1
|
Any
significant “un-planned” process deviations that may impact the quality,
compliance or regulatory status of a batch will be forwarded to New
River
via notification [***] from the discovery of the
occurrence.
|
|
9.7.1.2
|
Any
“planned” process deviation will be presented for approval to New River
Quality Assurance before proceeding with
processing.
|
NOTE:
A
“deviation” is defined, for purposes of this Section 9.7, as any anomalous event
that may occur during the processing of a Batch that is a departure from filed
specifications, approved procedures or validated processes. Planned deviations
are considered those that occur before a process step is executed and when
a
batch can be interrupted to consider the ramifications of the proposed process
or batch instruction deviation.
12
CONFIDENTIAL
TREATMENT
All
deviations will be provided to New River in a list format with the batch release
documentation as outline in Appendix VI.
|
9.7.2
|
Failure
Investigations and Out Of Specification (OOS)
Results
|
Patheon
is responsible for fully investigating any test result or in-process test that
fails to meet Specification per their internal procedures. Each investigation
will be reviewed and approved by Patheon’s designated Quality Assurance person.
The investigation must evaluate if the failure has jeopardized the safety,
efficacy or quality of the product. New River must be notified [***] of the
discovery of a confirmed 005 result.
|
9.7.3
|
Patheon
will notify New River forthwith if any problems are discovered that
may
impact products batch(s) previously shipped to New River or its Affiliates
identifying the Batches in
question.
|
|
9.7.4
|
Some
deviations/failures may require that additional testing, stability,
or
validation be conducted. This work will be performed by Patheon as
agreed
by both Parties.
|
|
9.8
|
Rejection
of Product
|
|
9.8.1
|
Patheon
will notify New River in writing of any Batch rejected by Patheon.
This
communication should be accompanied by a completed investigation
with
regard to the failure and include evaluation of effect of failure
on other
Batches.
|
|
9.8.2
|
New
River or its affiliates will notify Patheon of any problems thought
to be
due to Manufacture or stability which are found during the distribution
of
the Product. When requested by New River, Patheon will promptly perform
investigations for these problems. Investigation reports will be
forwarded
to New River as required.
|
|
9.9
|
Dispute
Resolution
|
In
the
event that a dispute arises between Patheon and New River or its Affiliates
in
the analysis of the Products, the resolution will proceed according to the
procedures set forth in the Manufacturing Agreement.
|
9.10
|
Regulatory
Inspections
|
New
River’s Director or designate of Quality
Assurance will be notified within 1 business day of any inspections by FDA,
DEA
or similar foreign regulatory authorities regarding New River Products and
Patheon will permit a representative from New River on-sit; if requested by
New
River.
13
CONFIDENTIAL
TREATMENT
Patheon
will notify New River [***] of receipt of any FDA Form 483 observations, warning
letters or the like from regulatory agencies relating to: (i) the Product(s);
(ii) the supply of Product(s) or (iii) the facilities used to produce, test
or
package the Product(s). New River will review and approve responses that relate
to the Product(s) before submission to the regulatory agency. Patheon reserves
the right to respond to such regulatory agencies without approval, if, in the
reasonable opinion of Patheon’s counsel, it is required to do so.
|
9.11
|
Regulatory
Actions at New River
|
New
River
or its affiliates will notify Patheon of any regulatory actions on the Products
that may impact Patheon. Additionally, New River will immediately forward any
regulatory correspondence on the Products to Patheon.
|
9.12
|
Regulatory
Investigations
|
Patheon
is responsible for supporting all Batch record investigations associated with
regulatory actions. New River must be notified of any such events
[***].
|
9.13
|
Manufacturing
Audits (MA)
|
|
9.13.1
|
Annual
MA: New River shall have the right to conduct one Manufacturing Audit
(as
defined in section 9.13.3) per year. (Such annual Manufacturing Audit
to
be hereinafter referred to as an “Annual
MA”).
|
|
9.13.2
|
Event
MA: In addition to the Annual MA, in the event that (i) Patheon receives
483 Observations or a “Warning Letter” from the FDA or any foreign
equivalent outside the USA relating to the Manufacture, packaging
testing
or labeling of the New River Product by Patheon, (ii) Patheon has
received
a DEA “Letter of Admonishment” or similar notice alleging non-compliance
(iii) New River has rejected a Batch of Product where it has been
agreed
or determined that such Product failed to meet Specifications or
cGMP or
(iv) for circumstances where New River and Patheon reasonably believe
and
agree that significant quality and/or compliance issues exist or
have been
discovered, New River shall have the right to conduct additional
Manufacturing Audits according to the terms specified in Section
9.13.3
below (such Event Manufacturing Audit or Audits to be hereinafter
referred
to as an “Event MA’).
|
14
CONFIDENTIAL
TREATMENT
|
9.13.3
|
Manufacturing
Audit: For purposes of this Agreement, the term “Manufacturing Audit”
shall mean an audit of Patheon’s Plant for the Product by employees and/or
agents of New River for purposes of reviewing Patheon’s procedures and
processes used in manufacturing the New River Products. Any such
agents
shall be qualified to conduct manufacturing audits, shall comply
with all
Patheon’s facility rules regarding safety and security notified by Patheon
to New River and its employees and agents and shall execute a written
agreement to maintain in confidence all information obtained during
the
count of any such audit except for disclosure to New River subject
to the
terms hereof. Each Manufacturing Audit shall be conducted during
Patheon’s
normal business hours and [***] to Patheon in the case of an Annual
MA, or
with at least 3 working days notice to Patheon in the case of an
Event MA.
The dates of the audit will be mutually agreed upon by the Parties.
In all
cases New River shall ensure that its employees or agents will conduct
each Manufacturing Audit so as not, insofar as is reasonably practicable
to interfere with the normal and ordinary operation of Patheon’s Plant.
During a Manufacturing Audit, upon New River’s request, Patheon shall make
available for New River’s review and inspection all equipment and
facilities used in or in relation to the Manufacture of a Product,
records
and support documents (i.e. manufacturing and analytical) with respect
to
each Batch of the Product and other Raw Materials and packaging components
used in the Manufacture or packaging of the Product hereunder. At
any such
audit, New River shall have the right to obtain copies of such batch
records with respect to New River product(s), provided however, that
New
River pays Patheon for its reasonable costs associated with making
such
copies. All costs of an Event MA shall be borne by New River unless
the
requirement for audit arises as a result of the negligence of Patheon
or
the breach of the terms of this Agreement or the Manufacturing Agreement
by Patheon, in which case Patheon shall absorb all costs associated
with
the audit.
|
|
9.13.4
|
New
River or its affiliates or representatives will be escorted at all
times
by Patheon personnel.
|
|
9.13.5
|
Audit
Procedures
|
|
9.13.5.1
|
An
exit meeting will be held with representatives from Patheon and New
River
to discuss significant audit
observations.
|
|
9.13.5.2
|
New
River will provide a written report of all observations [***] to
Patheon.
[***] of audit report receipt, Patheon will provide a written response
to
all findings that details corrective action to be implemented. Patheon
will follow up to ensure that all corrective actions are implemented.
New
River may confirm follow-up action by performing a follow-up audit
separate from the Annual MA
|
|
9.14
|
Correspondence:
|
Each
Party shall promptly notify the other Party of; and shall provide the other
Party with copies of, any correspondence and other documentation received or
prepared by the notifying Party in connection with any of the following
events:
|
9.14.1
|
Receipt
of a 483 Observation Letter or “Warning Letter” from the FDA or any other
Regulatory Authority or any relevant foreign equivalent outside the
USA in
connection with the Manufacture, packaging, testing, storage or security
of the Product;
|
15
CONFIDENTIAL
TREATMENT
|
9.14.2
|
Any
field alert, recall, market withdrawal or correction of any Batch
of the
Product; or
|
|
9.14.3
|
Any
regulatory comments relating to the Manufacture of New River Product(s)
requiring a response or action by the notifying
Party.
|
|
9.15
|
Product
Complaints
|
New
River
or its affiliates shall maintain complaint files with respect to the Product(s)
in accordance with cGMP’s. New River or its affiliates are responsible for
receiving and initially investigating any complaints and will notify Patheon
of
any complaint that may impact the Product quality Patheon will investigate
Product complaints supplied by New River and provide a report to New River
promptly but [***] from receipt. The investigation shall be completed in
accordance with all cGMP regulations and any other Applicable Laws. New River
shall have responsibility for reporting all complaints relating to the Product
to the FDA and any other Regulatory Authority including, but not limited to,
complaints relating to the Manufacture of the Product as well as adverse thug
experience (ADE) reports.
|
9.16
|
Product
Recalls
|
New
River
or its affiliates are responsible for instituting a product recall due to any
defect considered sufficiently serious. New River will notify Patheon of any
recall that may be due to Patheon. Patheon will work with New River and its
affiliates to investigate the recall. Patheon will provide a rapid initial
response and a full report [***].
|
9.17
|
Compliance
Deficiencies
|
Should
Patheon become aware of any issues that could affect the quality, safety,
identity or efficacy of any New River Product produced at their facility,
Patheon will notify New River in writing [***].
|
9.18
|
NDA
Field Alerts
|
Patheon
will notify New River (likewise, New River will notify Patheon) [***] of receipt
of information meeting NDA Field Alert criteria as defined in 21 CFR
314.81(b)(l). New River is responsible for initiating and submitting NDA Field
Alert reports.
|
10.
|
CHANGE
MANAGEMENT
|
Product
specific Master Batch Records, Raw Material Methods and Specifications, process
control Specifications of intermediates and testing methods and Specifications
and testing methods will be approved by both New River’s Quality Assurance
Department and Patheon’s Quality Assurance Department. No changes to the above
documents may be implemented without the signed authorization from an authorized
member of the New River Quality Assurance Department. All required regulatory
approvals will be obtained prior to implementation. Variations to established
production procedures may be initiated by either Party, but must be agreed
to in
writing by the authorized members of the Quality Assurance Departments of both
Parties before implementation. The release status of the Product produced under
a variation will be decided as part of the variation approval process. Quality
Assurance Departments of Patheon or New River will have the right to assign
a
final disposition of “rejected” to the batch should they conclude that such
action is appropriate.
16
CONFIDENTIAL
TREATMENT
|
11.
|
PRODUCT
AND PROCESS VALIDATION
|
|
11.1
|
Process
|
New
River
is responsible for ensuring that the process for Manufacture is validated.
The
validation should ensure that the process is capable of consistently achieving
the Product’s acceptance Specifications. Patheon will generate, internally
approve and execute approved validation protocol(s) and may not use any
validation protocol or issue a report unless New River technical personnel
and
New River Quality Assurance have first approved. Patheon will provide all
protocols and reports in a timely manner to allow sufficient tune for review,
prior to process requirements. New River will review all protocols and
validation reports promptly, but [***] of receipt.
|
11.2
|
Cleaning
Validation
|
|
11.2.1
|
Patheon
is responsible for ensuring that adequate cleaning is carried out
between
batches of different products to prevent contamination. This is achieved
and verified with the overall cleaning validation program on
site.
|
|
11.2.2
|
New
River will provide available information to establish cleaning limits
for
New River Product(s) within 7 business days of the request- The cleaning
procedure and analytical methodology may be reviewed by New River
upon
request.
|
|
11.2.3
|
Patheon
is responsible for having appropriate cleaning procedures for all
products
manufactured on non-dedicated equipment used to Manufacture New River
Product(s).
|
|
11.2.4
|
Patheon
is responsible for having appropriate cleaning procedures for New
River
product(s) manufactured on dedicated equipment. The cleaning procedure
and
analytical methodology must be reviewed and approved by New River
prior to
use by Patheon.
|
17
CONFIDENTIAL
TREATMENT
|
11.3
|
Equipment,
Computer, Facility, and Utilities
Qualification
|
Patheon
is responsible for the safe, compliant and efficient working of all equipment,
computer, utility and facility qualification activities associated with the
products, including maintenance. Patheon is also responsible for the validation
and qualification of all equipment, computer, and utilities associated with
the
Products. As deemed appropriate, equipment shall be qualified prior to use
by
performing Installation Qualification, Operation Qualification and Performance
Qualification (as applicable) using protocols in accordance with all applicable
laws, rules and regulations. Should an issue become evident that has or could
affect the Products, Patheon will notify New River [***]. Patheon must make
available Equipment, Computer, Facility, and Utilities Qualification data during
an Annual or Event MA.
|
11.4
|
Laboratory
Qualifications
|
|
11.4.1
|
Patheon
is responsible for ensuring that all laboratories are compliant with
cGMPs
with regard to systems and equipment
qualifications.
|
|
11.4.2
|
Patheon
is responsible for maintaining appropriate cGMP documentation procedures
in the laboratories (i.e. notebooks, logbooks, sample receipt, sample
tracking, SOPs, etc)
|
|
11.4.3
|
Patheon
is responsible for ensuring all methodology associated with the Product(s)
is appropriately qualified and/or validated, If analytical work is
performed at Patheon, then New River will also provide any existing
analytical documentation to assist in Methods transfer or Methods
validation. Patheon will not use any validation protocol or issue
a report
unless New River technical personnel and New River Quality Assurance
have
first approved. New River will review all protocols and reports promptly,
but [***].
|
|
11.4.4
|
If
analytical work is not performed at Patheon’s site, Patheon may elect to
perform an audit on vendors to be used for analytical testing. Should
Patheon decide to sub-contract out any quality control work, or approval
from New River will be required.
|
|
12.
|
ANNUAL
PRODUCT REVIEW, DRUG LISTING, AND ANNUAL
REPORTS
|
|
12.1
|
Annual
Product Review
|
Patheon
will perform an annual product review on the Products and will issue a report
to
New River [***] after the conclusion of an annual manufacturing cycle. New
River
and Patheon will jointly determine the annual reporting cycle.
This report will be a review of any changes in the manufacturing packaging,
testing or validation of the Product in the previous year; a summary of lots
made, released, and rejected; a stability summary. Also, control charting or
trend analysis of key Finished Product parameters will be performed on an annual
basis per Patheon written procedures. Any abnormalities will be explained in
the
annual review. This review will be conducted in accordance with 21CFR211.180(e)
and any other Applicable Laws.
18
CONFIDENTIAL
TREATMENT
|
12.2
|
Drug
Listing
|
Patheon
is responsible for drug listing as the Manufacturer of the Product(s) while
New
River and its affiliates are responsible for drug listing as the distributor
of
the Product(s). New River will provide Patheon copies of all product labeling
including package insert, NBA number, name and address of NBA holder, and NBC
code which includes labeler code, product code, and packaging code. New River
will notify Patheon of the scheduled product launch.
|
12.3
|
Annual
Reports, IND Updates or Other Regulatory
Filings
|
New
River
is responsible for preparing any Annual Report, IN]) update or other regulatory
filing as required by Applicable Laws, including 21 CFR. 314.7(g)(3),
314.81(b)(2), and/or 601.12 (d), (f)(3). For a routine Annual Report, New River
shall request in writing, [***] prior to the due date, the chemistry,
manufacturing and controls data required for the submission, Patheon will
provide the requested information [***] before the due date. For other
regulatory filings New River will request CMC data from Patheon with appropriate
advance notice. The standard notice period is [***], however, other time periods
shall be satisfactory upon agreement of the parties.
|
13.
|
STORAGE
AND SHIPPING
|
|
13.1
|
Storage
|
Patheon
will ensure that during storage of the Product(s) that procedures are in place
to protect the Products from deterioration, interference, theft, Product
contamination or admixture with any other materials. New River will provide
details of any labeling requirements and container sealing and integrity
requirements.
|
13.2
|
Packing
and Labeling for Transit
|
The
Product(s) will be suitably packed for transit, each pallet or outer container
being labeled in accordance with the approved Specifications and Applicable
Laws.
|
13.3
|
Mixing
of Product
|
Different
lots of a single Product or different types of Products
will not
be mixed on a pallet.
19
CONFIDENTIAL
TREATMENT
|
13.4
|
Shipment
of Product to New River
|
Only
approved, finished (unless required by New River), labeled Products will be
shipped by Patheon to New River or Affiliates Distribution Center. Any shipment
of Product from Patheon, which is unapproved, or under quarantine requires
prior
written consent by New River’s Quality Assurance. This authorization will be on
a lot by lot basis.
|
14.
|
CONTRACTUAL
AGREEMENT
|
Established
at New River Pharmaceuticals Inc., 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000
For
and
on behalf of NEW RIVER PHARMACEUTICALS INC.:
|
NAME
|
TITLE
|
SIGNATURE
|
For
and
on behalf of PATHEON PHARMACEUTICALS INC.:
|
NAME
|
TITLE
|
SIGNATURE
|
20
CONFIDENTIAL
TREATMENT
APPENDIX
I
Responsibilities
Matrix
Patheon
is responsible for all the operations that are marked with “X” in the column
titled “Patheon” and New River is responsible for all the operations that are
marked with C” in the column titled “New River.” If marked with “(X)”, the
designated party will cooperate.
|
(a)
|
Administrative
or Overall
|
|
New
River
|
Patheon
|
||
|
1.
|
Provide
Product Specifications. (Schedule A of MSA)
|
X
|
|
|
2.
|
Manufacture
and package Product(s) according to the Specifications. (Appendix
V)
|
X
|
|
|
3.
|
Permit
GMP audits of all relevant premises, procedures and documentation
by New
River and permit inspection by regulatory authorities.
|
X
|
|
|
4.
|
Will
not subcontract any of the work to a third party without prior written
consent of New River.
|
X
|
|
|
5.
|
Provide
copies of Annual Product Review reports.
|
X
|
|
|
6.
|
Provide
copies of information and correspondence necessary to support the
Annual
Report when requested by New River.
|
X
|
|
|
7.
|
Notify
and obtain approval from New River before initiating any proposed
changes
to the process, materials, testing, equipment or premises that may
affect
the Product(s). New River approval will not be unreasonably
withheld.
|
X
|
|
|
8.
|
Notify
New River within [***]
of
receipt of any FDA Form 483’s, warning letters or the like from regulatory
agencies relating to: (i) the Product(s); (ii) the supply of Product(s)
or
(iii) the facilities used to produce, test or package the Product(s).
New
River will review and approve responses that relate to the Product(s)
before submitting to the regulatory agency. Patheon reserves the
right to
respond to such regulatory agencies without approval, if, in the
reasonable opinion of Patheon’s counsel, it is required to do
so.
|
X
|
|
|
9.
|
Notify
New River within [***]
of
any regulatory authority requests for samples, batch documentation,
or
other information related to the Product(s).
|
X
|
|
|
10.
|
Conduct
operations in compliance with applicable environmental, occupational
health and safety laws, and cGMP regulations.
|
X
|
|
|
11.
|
Investigate
all medical and non-medical product complaints related to the
manufacturing of the Product(s).
|
X
|
(X)
|
21
CONFIDENTIAL
TREATMENT
|
12.
|
Investigate
all manufacturing Product complaints at New River’s request.
|
X
|
|
|
13.
|
Notify
other party within [***]
of
receipt of information meeting NDA Field Alert criteria as defined
in 21
CFR 314.81(b)(l).
|
X
|
X
|
|
14.
|
Initiate
and submit NDA Field Alert reports.
|
X
|
|
|
15.
|
Initiate
and manage Product recalls.
|
X
|
(X)
|
|
16.
|
Timely
liaise with Regulatory Authorities for approval, maintenance and
updating
of marketing approval.
|
X
|
|
(b)
|
Validation
and Process Testing Activities
|
|
New
River
|
Patheon
|
||
|
1.
|
Establish
applicable validation plans and maintain a validation program for
the
Product(s).
|
X
|
X
|
|
2.
|
Qualify
(IQ/OQ) facilities, utilities, laboratory equipment and process
equipment.
|
X
|
|
|
3.
|
Calibrate
instrumentation and qualify computer systems used in the manufacture
and
testing of the Product(s).
|
X
|
|
|
4.
|
Prepare
all validation protocols and reports, for manufacturing and packaging
operations.
|
(X)
|
X
|
|
5.
|
Review
and approve master validation plan, and validation protocols and
reports
for manufacturing and packaging of the Product(s).
|
X
|
X
|
|
6.
|
Maintain
appropriate equipment cleaning procedures and cleaning validation
program.
|
X
|
|
|
7.
|
Provide
toxicological information to be used in the development of a cleaning
program.
|
X
|
|
|
8.
|
Validate
analytical test methods for finished Product(s).
|
(X)
|
X
|
22
CONFIDENTIAL
TREATMENT
|
(c)
|
Raw
Materials
|
|
New
River
|
Patheon
|
||
|
1.
|
Provide
the master formula including Xxxx of Materials.
|
X
|
|
|
2.
|
Provide
approved supplier list. New River to audit and approve API suppliers
and
ensure cGMP compliance where New River stipulates the supplier. New
River
stipulated suppliers will be included on New River’s approved supplier
list (attached hereto as APPENDIX VII)
|
X
|
|
|
3.
|
New
River to qualify and approve product specific excipient suppliers
and
ensure cGMP compliance where New River stipulates the supplier. New
River
stipulated suppliers will be included on New River’s approved supplier
list (APPENDIX VII).
|
X
|
|
|
4.
|
Patheon
to qualify and approve excipient suppliers and ensure cGMP compliance
where Patheon stipulates the suppliers. Patheon stipulated suppliers
will
be included on the Patheon approved supplier list (APPENDIX
VII).
|
X
|
|
|
5.
|
Provide
API specifications.
|
X
|
|
|
6.
|
Procure
API (including Certificates of Analysis and Certificates of
Compliance).
|
X
|
|
|
7.
|
Provide
test methods for API (if non-Compendial).
|
X
|
|
|
8.
|
Validate
non-Compendial testing methods for API.
|
X
|
|
|
9.
|
Analyze
and release API.
|
X
|
|
|
10.
|
Retain
reference sample of API for [***]
of
the last batch of Product(s) manufactured with that material in the
Product(s) or such longer period required by law.
|
X
|
|
|
11.
|
Procure
inactive ingredients (including Certificates of Analysis and Certificates
of Compliance)
|
X
|
|
|
12.
|
Provide
test methods and method validation for inactive ingredients (if
non-Compendial).
|
X
|
|
|
13.
|
Analyze
and release inactive ingredients.
|
X
|
|
|
14.
|
Retain
reference samples of inactive ingredients [***]
or
such longer period as required by law.
|
X
|
|
|
15.
|
Maintain
records and evidence on the testing of raw materials [***]
after the materials were last used in the manufacture of the
Product(s).
|
X
|
|
|
16.
|
At
New River’s request, confirm that [***]
raw materials purchased by Patheon for the manufacture of Product(s)
have
a BSE/TSE certificate of compliance from the raw material
vendor.
|
X
|
23
CONFIDENTIAL
TREATMENT
|
(d)
|
Bulk
Manufacture
|
|
New
River
|
Patheon
|
||
|
1.
|
Create,
control, issue and execute master batch record.
|
X
|
|
|
2.
|
Approve
master batch record.
|
X
|
X
|
|
3.
|
Document,
investigate and resolve deviations from approved manufacturing
instructions or specifications.
|
(X)
|
X
|
|
(e)
|
Packaging
|
|
New
River
|
Patheon
|
||
|
1.
|
Provide
specifications for packaging components.
|
X
|
(X)
|
|
2.
|
Review
and approve labeling proofs.
|
X
|
|
|
3.
|
Provide
artwork and labeling text (blister, carton, leaflet, label etc.)
specifications.
|
X
|
|
|
4.
|
Create
control, issue and execute master packaging record.
|
X
|
|
|
5.
|
Approve
master packaging record.
|
X
|
X
|
|
6.
|
Qualify
and approve packaging component suppliers. New River to qualify and
approve packaging component suppliers and ensure cGMP compliance
where New
River stipulates the supplier. New River stipulated suppliers will
be
included on its approved supplier list (APPENDIX VII).
|
X
|
(X)
|
|
7.
|
Patheon
to qualify and approve packaging component suppliers and ensure cGMP
compliance when Patheon stipulates the supplier. Patheon stipulated
suppliers will be included on its approved supplier list (APPENDIX
VIII).
|
X
|
|
|
8.
|
Provide
test methods for packaging components.
|
(X)
|
X
|
|
9.
|
Procure
packaging components.
|
X
|
|
|
10.
|
Analyze
and release packaging components.
|
X
|
|
|
11.
|
Maintain
records and evidence on the testing of packaging/labeling materials
[***]
after the materials were last used in the packaging/labeling of the
Product(s).
|
X
|
|
|
12.
|
Document,
investigate and resolve any deviation from approved packaging instructions
or specifications.
|
X
|
24
CONFIDENTIAL
TREATMENT
|
(f)
|
Testing
& Release of Finished Product
|
|
New
River
|
Patheon
|
||
|
1.
|
Provide
finished product specifications. (Schedule A of MSA)
|
X
|
|
|
2.
|
Supply/develop
analytical test methods for finished product.
|
(X)
|
X
|
|
3.
|
Test
finished product. Issue CoA/ CoC (Appendix VI)
|
X
|
|
|
4.
|
Maintain
all batch records for a minimum of [***]
past Product(s) expiry date and supply copies of all such records
to New
River upon request.
|
X
|
|
|
5.
|
Notify
New River QA of confirmed Out-Of-Specification results within [***].
|
X
|
|
|
6.
|
Resolve
Out-Of-Specifications results and Issue Quality Observation Report
prior
to product release.
|
X
|
|
|
7.
|
Retain
reference samples of finished product for [***]
past expiration date.
|
X
|
|
|
8.
|
Retain
reserve sample of finished product as required by 21 CFR
211.l70(b)(1)
|
X
|
|
(g)
|
Stability
Testing
|
|
New
River
|
Patheon
|
||
|
1.
|
Provide
stability testing protocol for finished Product(s).
|
X
|
(X)
|
|
2.
|
Store
stability samples.
|
X
|
|
|
3.
|
Develop
and validate stability indicating assay.
|
(X)
|
X
|
|
4.
|
Complete
stability testing including data review [***]
of
stability pull, or earlier as dictated by site SOPs.
|
X
|
|
|
5.
|
Report
stability data annually or more frequently if requested.
|
X
|
|
|
6.
|
Notify
New River of any confirmed stability failure for Product(s) supplied
to
New River [***]
and [***].
|
X
|
25
CONFIDENTIAL
TREATMENT
APPENDIX
II
DEFINITIONS
“ANDA”
means Abbreviated New Drug Application.
“API”
means Active Pharmaceutical Ingredient
“APR”
means Annual Product Review as defined in 21 CPR 2
“AR
or
Annual Report means a regulatory update to a New Drug Application (NDA) or
Abbreviated New Drug Application (ANDA) submitted to the FDA (or other such
equivalent agency). Typically minor changes to such applications are submitted
pursuant to 21 CFR 314.70(4
“BSE”
means Bovine Spongiform Encephalopathy.
“CofA”
means Certificate of Analysis
“Cot”
means Certificate of Compliance
“CFR”
means the United States Code of Federal Regulations
“cGMP”
means Current Good Manufacturing Practice as described in 21 CFR 210 and 211,
or
its equivalent foreign counterpart.
“DEA”
means Drug Enforcement Administration, or its equivalent foreign
counterpart
“Event
means an audit initiated by a quality or process event, which warrants Thither
investigation by New River. “FDA” means Food & Drug Administration, or its
equivalent foreign counterpart
“ICH”
means the International Committee on Harmonization.
“IQ’
means Installation Qualification.
“MA”
means routine or annual Manufacturing Audit
“MSA”
means Manufacturing Services Agreement
“Master
Batch Record(s)” mean the approved formulation, manufacturing/packaging
instructions, and controls whereby a Batch of Product is manufactured. Master
Batch Records must be written per cGMPs for all clinical, registration,
stability, and commercial manufacturing processes and may be issued repeatedly
of the manufacture of the same Batch of Product
“Methods”
means approved analytical testing procedures for Raw Materials, intermediates
and final Product.
26
CONFIDENTIAL
TREATMENT
“NDA”
means New Drug Application or non-US equivalent thereof applicable to or
referencing of the API to be supplied hereunder relating to the New River
formulation of the finished dose product and owned by New River, and any
supplements to such NDA as may be filed during the term hereof
“NDC”
means National Drug Code.
“OOS”
means Out of Specification.
“OQ”
means Operational Qualification.
“Primary
Packaging Component” means a component that is or maybe in direct contact with
the dosage form and labeling.
“TSE”
means Transmissible Spongiform Encephalopathy.
27
CONFIDENTIAL
TREATMENT
APPENDIX
III
LIST
OF CONTACTS
(NAME,
PHONE, FAX, E-MAIL)
|
ISSUE
|
NEW
RIVER
PHARMACEUTICALS,
INC. or
AFFILIATES
|
PATHEON
PHARMACEUTICALS
INC.
|
|
Product
Release
|
Xxxx
Xxxxxx
[***]
|
Xxxxx
Xxxxxxx
[***]
|
|
Investigations
|
Xxxxxx
Xxxxxxxxx
[***]
|
Xxxxx
Xxxxxxx
[***]
|
|
Regulatory
Inspections
|
Xxxx
Xxxxxx
[***]
|
Xxxxx
Xxxxx
[***]
|
|
Stability
|
Xxxx
Xxxxxx
[***]
|
Xxxxx
Xxxxxxx
[***]
|
|
Validation
|
Xxxx
Xxxxxx
[***]
|
Xxxxx
Xxxxxxx
[***]
|
|
Complaints
|
Xxxx
Xxxxxx
[***]
|
Xxxx
Xxxxx
[***]
|
|
Change
Management
|
Xxxx
Xxxxxx
[***]
|
Xxxx
Xxxxxx
[***]
|
|
Audits
|
Xxxx
Xxxxxx
[***]
|
Xxxxx
Xxxxx
[***]
|
|
Regulatory
Affairs
|
Xxxx
Xxxxxx
[***]
or
Xxxx
Xxxxxxxx
[***]
|
Xxxx
Xxxxxx
[***]
|
|
Emergency
|
Xxxxxx
Xxxxxxxxx
[***]
|
Xxxxx
Xxxxxxx
[***]
|
28
CONFIDENTIAL
TREATMENT
APPENDIX
IV
Batch
Document Audit Schedule
The
primary responsibility for batch document review resides with Patheon
Pharmaceuticals. New River Pharmaceuticals will conduct a graduated plan for
auditing batch documentation. This will supplement the annual cGMP audit, or
any
other investigations related to quality or batch incidents.
The
following table outlines the plans for New River or its affiliates review of
batch documentation:
|
[***]
|
[***]
|
[***]
|
|
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
|
[***]
|
[***]
|
[***]
|
[***]
|
29
CONFIDENTIAL
TREATMENT
APPENDIX
V
List
of Products
|
Product
Name and Strength
|
Package
Configuration
|
Finished
Product
Identification
Number
|
|
[***]
|
Bulk
|
|
|
[***]
|
Bulk
|
|
|
[***]
|
Bulk
|
30
CONFIDENTIAL
TREATMENT
APPENDIX
VI
Release
Documentation
The
release documentation for all batches will include a Certificate of Analysis
(COA), a Certificate of Conformance (COC), and a list of all process or testing
deviations for this batch.
A
Certificate of Analysis
This
document will list the following:
|
•
|
The
Product Name
|
|
•
|
The
Batch Number
|
|
•
|
The
Date of Manufacture
|
|
•
|
All
Analytical Test Results and
Specifications
|
|
•
|
All
Microbiological Test Results
|
|
•
|
Certification
that all Specifications have been
met.
|
A
Certificate of Conformance (
This
document will attest to the fact that the batch of products was made in
accordance with all applicable regulations, product licenses, and company
policies. This document will include:
|
•
|
Product
name
|
|
•
|
Lot
number
|
|
•
|
Batch
quantity approved
|
|
•
|
Expiry
date
|
|
•
|
A
statement confirming that the batch record conforms to cGMP requirements
and has been reviewed and approved by Patheon’s Quality
Assurance.
|
Patheon’s
authorized Quality Assurance personnel will sign the above
certificates.
31
CONFIDENTIAL
TREATMENT
APPENDIX
VII
New
River Approved Supplier List
NOTE:
Approval of these API suppliers in pending approval of NRP1O4 NDA by
FDA.
|
1.
|
[***]
|
|
2.
|
[***]
|
32
CONFIDENTIAL
TREATMENT
APPENDIX
VIII
Patheon
Approved Supplier List
|
Material
|
Approved
Supplies(s)
|
|
[***]
|
[***]
|
|
[***]
|
[***]
|
|
[***]
|
[***]
|
|
[***]
|
[***]
|
|
[***]
|
[***]
|
|
[***]
|
[***]
|
33
CONFIDENTIAL
TREATMENT
SCHEDULE
H
QUARTERLY
ACTIVE MATERIAL INVENTORY REPORT
|
FROM:
|
PATHEON
PHARMACEUTICALS INC.
|
|
RE:
|
Active
Materials quarterly inventory report pursuant to Section 2.4(a) of
the
Manufacturing Services Agreement dated (the
“Agreement”)
|
|
Reporting
quarter:
|
|||
|
Active
Materials on hand at beginning of quarter:
|
kg
|
(A)
|
|
|
Active
Materials on hand at end of quarter:
|
kg
|
(B)
|
|
|
Quantity
Received during quarter:
|
kg
|
(C)
|
|
|
Quantity
Dispensed
during quarter:
|
kg
|
||
|
(A
+ C - B)
|
|||
|
Quantity
Converted during quarter:
|
kg
|
||
|
(total
Active Materials in Products produced and not rejected, recalled
or
returned)
|
Capitalized
terms used in this report have the meanings given to such terms in the
Agreement.
|
DATE:
|
||
|
PATHEON
PHARMACEUTICALS NC.
|
||
|
Per:
|
||
|
Name:
|
||
|
Title:
|
||
______________________________________
1
Excludes any Active Materials received or dispensed in connection with
technical transfer activities or development activities, including, without
limitation, any regulatory, stability, validation or test batches manufactured
during the quarter.
34
CONFIDENTIAL
TREATMENT
EXECUTION
VERSION
SCHEDULE
I
REPORT
OF ANNUAL ACTIVE MATERIAL INVENTORY RECONCILIATION
AND
CALCULATION
OF ACTUAL ANNUAL YIELD.
|
TO:
|
NEW
RIVER PHARMACEUTICALS NC.
|
|
FROM:
|
PATHEON
PHARMACEUTICALS NC.
|
|
RE:
|
Active
Materials annual inventory reconciliation report and calculation
of Actual
Annual Yield pursuant to Section 2.4(a) of the Manufacturing Services
Agreement dated’ (the “Agreement
|
|
Reporting
Year Ending:
|
|||
|
Active
Materials on hand at beginning of Year:
|
kg
|
(A)
|
|
|
Active
Materials on hand at end of Year:
|
kg
|
(B)
|
|
|
Quantity
Received during Year:
|
kg
|
(C)
|
35
CONFIDENTIAL
TREATMENT
|
Quantity during
Year:
|
kg
|
(D)
|
|
|
(A
+C - B)
|
|||
|
Quantity
Converted during Year:
|
kg
|
(E)
|
|
|
(total
Active Materials in Products produced and not rejected, recalled
or
returned)
|
|||
|
Active
Materials Cost:
|
$
|
kg
|
(F)
|
|
Target
Yield:
|
kg
|
(G)
|
|
|
Actual
Annual Yield:
|
kg
|
(H)
|
|
|
((E/D)
* 100)
|
______________________________________
2
Excludes any Active Materials received or dispensed in connection
with
technical transfer activities or development activities, including, without
limitation, any regulatory, stability, validation or test batches manufactured
during the quarter.
36
CONFIDENTIAL
TREATMENT
EXECUTION
VERSION
Shortfall: $___________________________ (I)
(((H
--3%
- I)/100) * * D) (if
a
negative number, insert zero)
Based
on
the foregoing reimbursement calculation ______________________ will reimburse
__________________the amount of $__________________
Capitalized
terms used in this report have the meanings given to such terms in the
Agreement.
|
DATE:
|
||
|
PATHEON
PHARMACEUTICALS NC.
|
||
|
Per:
|
||
|
Name:
|
||
|
Title:
|
||
37
