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EXHIBIT 10.27
TOLL MANUFACTURE AGREEMENT
This Agreement [**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.**] by and between
Organon Inc., a corporation duly organized and existing under the laws of New
Jersey (USA) and having its registered offices at 000 Xx. Xxxxxxxx Xxx., Xxxx
Xxxxxx, Xxx Xxxxxx 00000, XXX on the one hand, hereinafter referred to as
"Organon,"
And
CIMA LABS Inc., a corporation duly organized and existing under the laws of the
State of Delaware and having its principal offices at 00000 Xxxxxx Xxxx Xxxx,
Xxxx Xxxxxxx, Xxxxxxxxx 00000, XXX, hereinafter referred to as "Manufacturer."
Organon and Manufacturer may hereinafter be referred to as "Party," or
collectively as "Parties."
WHEREAS:
A. An Affiliated Company of Organon and Manufacturer have entered into a
License Agreement dated [**CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.**], whereby Manufacturer granted Organon and/or Organon's
Affiliated Companies a license to, among others, make the Product (as
hereinafter defined) under certain conditions;
B. Organon wishes Manufacturer to manufacture the Product on its behalf;
C. Manufacturer has knowledge and sufficient capacity to manufacture the
Product based on Product forecast supplied to Manufacturer by Organon,
and is willing to perform such manufacturing under the terms and
conditions as contained herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreement as
set forth herein, the Parties agree as follows:
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EXHIBIT 10.27
Section 1: DEFINITIONS
Whenever used in this Agreement, unless otherwise clearly required by the
context, the following terms shall have the meaning as defined hereinafter (in
alphabetical order) and shall include both the single and the plural.
1.1 The term "Affiliated Company" shall mean any company which by means of
a majority of shares or otherwise, either directly or indirectly,
controls, is controlled by or is under common control with either Party
hereto.
1.2 The term "Effective Date" shall mean the date first written above.
1.3 The term "Manufacturing Know-How" shall mean and include any and all
data, information and any experience or other data, in the possession
of the Manufacturer necessary for Organon to effectively and
efficiently manufacture the Product.
1.4 The term "License Agreement" shall mean the license agreement
referenced under preamble A above.
1.5 The term "GMP Agreement" shall mean: the agreements entitled "Agreement
On Tasks And The Division Of Responsibilities In Contract
Manufacturing" Between NV Organon and Manufacturer and between Organon
and Manufacturer, as amended from time to time, which is incorporated
by reference herein.
1.6 The term "Product" shall mean an effervescent prescription tablet in
[**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.**] mg mirtazapine(R)
dosage strengths, manufactured using the technology of the Manufacturer
commonly known as Orasolv(R), containing the Substance as the sole
active ingredient and adapted to disperse in the mouth of a human
adult, which tablet incorporates the Substance together with a matrix
or coating in microparticles or microcapsules which provide essentially
complete release of the Substance into the gastrointestinal tract in a
period of less than one hour after dissolution of the tablet, which is
packaged utilizing PakSolv(TM) technology.
1.7 The term "Specifications" shall mean the specifications for the Product
as set forth in the Remeron(R) Soltab(TM) NDA as amended and as
supplemented from time to time and as included in the GMP Agreement.
1.8 The term Substance shall mean mirtazapine.
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EXHIBIT 10.27
1.9 The term "Requirements" shall mean all quantities of the Product to be
used by Organon, its Affiliated Companies or sublicensee(s) for
clinical trial materials and for distribution, marketing and sale of
the Product and samples thereof during the term of this Agreement.
1.10 The term "Self-Supply" shall mean the manufacture of the Product by
Organon or its Affiliated Companies or third parties as permitted by
Sections 2.3 and 2.4 hereof.
1.11 Third Party Manufacturer -- Third Party Manufacturer shall mean a
manufacturer familiar with and capable of producing product using
Orasolv(R) and PakSolv(TM) technologies. Any Third Party Manufacturer
chosen by the Manufacturer must be approved by Organon which approval
will not be unreasonably withheld.
1.12 "Coated Substance" shall mean mirtazapine coated as per the NDA
[**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.**] for Remeron(R)and any
supplements and amendments thereto.
1.13 Production Yield: Let Output Y be, the amount of blistered Product made
expressed in kg of [**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.**]
Substance.
Let Input X be, the amount of [**CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.**] Substance, as delivered by Organon, expressed in kg used
to produce Output Y.
Production Yield will be defined as (Output Y divided by Input X)
multiplied by 100%.
Section 2: APPOINTMENT
2.1 Organon herewith appoints Manufacturer to perform the manufacture of
the Product, in accordance with the Specifications and with the use of
the Substance in accordance with the terms of this Agreement, on behalf
of Organon and Manufacturer accepts this appointment. Manufacturer may,
with Organon's approval, have the Product manufactured by an Affiliated
Company of the Manufacturer.
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EXHIBIT 10.27
2.2 For a period of five years commencing from January 15, 2001 and upon
the terms and conditions contained herein, Organon will purchase all of
its Requirements of the Product exclusively from the Manufacturer and
the Manufacturer will sell and deliver to Organon F.O.B. Origin,
Freight Collect, Organon's Requirements of the Product under the terms
of this Agreement.
2.3 If Manufacturer is unable to supply Organon with Organon's Requirements
within sixty (60) days of a delivery date, as determined pursuant to
Section 9.2, for any reason other than Organon's failure to provide
Substance to Manufacturer according to the lead time in Section 9.4 or
a condition of force majeure (which will include but is not limited to,
acts of God, explosion, fire, flood, earthquake or tremor, war whether
declared or not, civil strife, riots, embargo, losses or shortages of
power, supply shortages other than Substance, labor stoppages other
than those of Manufacturer, damage to or loss of Product in transit,
currency restrictions, or events caused by reason of laws, regulations
or orders by any government, governmental agency or instrumentality or
by any other supervening, unforeseeable circumstances whatsoever
reasonably beyond the control of such party), Manufacturer will be
considered in material breach and Organon may, in addition to any other
remedy available to it, elect to Self-Supply, including supply in the
Americas, without the payments in Sections 2.4 and 2.5, during the
period that Manufacturer is unable to supply Organon's requirements and
for such additional time so that such Self-Supply will be an
economically reasonable endeavor. In the event of force majeure,
Organon may also elect to Self-Supply under the same conditions and
terms as for breach. In the event of breach or force majeure,
Manufacturer agrees, at its own costs and expense in the case of breach
and at Organon's costs and expense in case of force majeure, to provide
technical support and assistance to ensure smooth and satisfactory
establishment of the Orasolv(R) technology at Organon's Self-Supply
site.
2.4 Organon may also elect to Self Supply at any time after the five (5)
year period described in Section 2.2 by a minimum of an eighteen (18)
month notice to Manufacturer. If Organon so elects to Self Supply,
Manufacturer will provide to Organon, at Organon's sole expense,
technical support and assistance to ensure the smooth and satisfactory
establishment of the OraSolv Technology at the new manufacturing site.
Organon will pay Manufacturer under this section a $[**CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.**] technology transfer fee,
$[**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.**]
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EXHIBIT 10.27
eighteen (18) months after notification and $[**CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.**] after FDA approval and will promptly reimburse
Manufacturer for all of its reasonable actual out of pocket expenses
incurred in support of the technology transfer.
2.5 If Organon elects to Self Supply according to Section 2.4, then there
will be a good faith negotiation between both parties of an additional
per tablet payment by Organon and the period of the duration of these
payments to cover the then value of Manufacturer's capital investments
to meet the requirements under this Agreement.
2.6 Any Third Party Manufacturer selected by Organon pursuant to Section
2.3 for Self-Supply, must be approved by Manufacturer and such approval
will not be unreasonably withheld or delayed. As a condition of
Manufacturer's approval, Organon shall have the selected third party
enter into an agreement with Manufacturer with a confidentiality clause
consistent with Section 4 of the License Agreement referred to in the
first whereas clause of this agreement.
Section 3: MANUFACTURING INSTRUCTIONS
3.1 Manufacturer shall perform the manufacture of the Product strictly in
conformity with the instructions as specified in the GMP Agreement.
3.2 Manufacturer shall make no alterations in the Specifications of the
Product or to the manufacturing process, without the prior written
approval of Organon and as provided in the GMP Agreement. Any and all
process deviations will be documented and reported to Organon.
Documented evidence of all process deviations will be provided as part
of manufacturing records to be forwarded to Organon prior to final
release of Product. Organon shall have sole responsibility for
determining the marketability of all batches for which a process
deviation occurred.
Section 4: QUALITY CONTROL
4.1 Manufacturer shall be responsible for the quality control of the
Product manufactured by the Manufacturer and shall carry out the tests
and analysis included in such quality control strictly in conformity
with the instructions as specified in the GMP Agreement. Organon may
test the
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EXHIBIT 10.27
Product after receipt, as Organon deems appropriate. Organon will
maintain a post-marketing stability program for the Product in
conformity with the GMP Agreement. Organon may request Manufacturer to
maintain such post-marketing stability program. If elected to do so,
Manufacturer and Organon will agree upon a price for such program.
4.2 Manufacturer shall maintain complete and adequate records of all tests
and analysis carried out in accordance as specified in the GMP
Agreement and shall deliver a Certificate of Analysis with each batch
of Product.
4.3 Manufacturer shall keep sealed samples of: each batch of Product, each
batch of raw material used, and samples of each batch of components
used for the manufacture of each batch of Product will be retained for
a minimum of one year past the expiration date of each batch of
Product, to verify the quality of the pertinent batch of Product at the
time it was delivered to Organon. All documentation with respect to
batch of Product, raw material, components and production of Product
will be retained by Manufacturer a minimum of one year past the
expiration date of the batch of Product.
4.4 Manufacturer agrees to conduct additional validation activities as
required by regulatory authorities or at the request of Organon.
Organon agrees to pay, a mutually agreed upon sum, for Manufacturer to
perform such validation activities and supply sufficient quantity of
Substance to complete such validation activities.
4.5 Manufacturer represents and warrants that the Product shall not be
adulterated or misbranded, and shall be free of all defects of any kind
whatsoever and to the best of the Manufacturer's knowledge,
Manufacturer's technology does not infringe in any way whatsoever any
rights of any third party. MANUFACTURER MAKES NO OTHER WARRANTIES OF
ANY KIND, EXPRESS OR IMPLIED, AND EXPRESSLY DISCLAIMS ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND ANY AND ALL
LIABILITY FOR SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES.
4.6 The GMP Agreement will supplement the terms of this Agreement with
regard to quality control.
Section 5: PACKAGING OF THE PRODUCT
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EXHIBIT 10.27
5.1 The Product shall undergo primary packaging and labeling by
Manufacturer according to Organon's instructions. The current primary
packaging instructions are included in the GMP Agreement and shall not
be modified by Organon without the prior written consent of
Manufacturer, which consent shall not be unreasonably withheld or
delayed. Approved blister artwork shall be provided to the Manufacturer
by Organon at least forty-five (45) days prior to the delivery date for
that shipment of Product specified in the applicable purchase order.
5.2 Country specific labeling may be required. The text appearing on
primary packing and labeling of the Product shall be as determined by
Organon subject to Manufacturer's prior written approval, which shall
not be unreasonably withheld or delayed. Manufacturer and Organon agree
to no more than [**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.**]
variants required per batch of Product, unless previously agreed. A
premium, which, if needed, will be $[**CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.**] for batches of Product with blistering variants
which exceed [**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.**]. The text
shall be as specified in the packaging instructions. Organon shall
ensure that all packaging for the Product complies with applicable laws
and regulations in each country in which it will be sold.
5.3 Organon will reimburse Manufacturer for reasonable costs incurred by
Manufacturer in making changes to its packaging line required to
manufacture the Product as mandated by regulatory revisions or as
required by Organon. This will include, but not be limited to, plate
and die charges due to label changes and Product identification
requirements, and for any packaging components rendered obsolete by the
changes.
Section 6: REJECTIONS AND YIELD
6.1 Within forty-five (45) days after delivery of each of the batches of
the Product Organon shall inform Manufacturer of any obvious
non-conformance of the delivered batches with the specifications and/or
significant deviations from cGMP's. Within forty five (45) days after
such notification, and in the event it appears that such a
specification and/or cGMP non-conformance is due to faulty manufacture,
release, primary packaging or labeling of the relevant batch(es) of the
Product, which fact
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EXHIBIT 10.27
shall be established on the basis of the corresponding sealed samples
retained by Manufacturer, utilizing an outside independent laboratory
if necessary, the cost of which is borne by the party found at fault
and whose findings shall be binding, or based on the process deviation
documentation provided to Organon, the Manufacturer shall replace such
batches free of charge. In the event Organon does not notify
Manufacturer of any such obvious non-conformance within said period,
the relevant batches shall be deemed to be in conformance with the
Specifications, except for non-obvious defects or non-conformance
relating to the manufacturing or testing of Product by Manufacturer,
and Manufacturer shall have no further obligations and liabilities
towards Organon with regard to those batches.
6.2 If found at fault, Manufacturer's liability, to Organon, for defective
or non-conforming Product shall be replacement of the Product,
exclusive of the cost of the Substance. For Substance lost through
mishandling or negligence (non-batch processing related) Manufacturer
shall promptly reimburse Organon, at the rate of $[**CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.**] per gm. In the case of defective
or non-conforming Product, Manufacturer shall replace Product at its
cost within sixty (60) days of notification of the findings. In no
event shall Manufacturer be liable for any indirect or consequential
damages in connection with any non-conforming batch of Product. Annual
increases to the rate of reimbursement of Substance will commence on
January 1, 2002 and are to be established January of each calendar year
thereafter. [**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.**].
6.3 In 2001, Manufacturer will complete the validation batches for Remeron
SolTab using [**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.**] pursuant to
sufficient supply of [**CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.**] from Organon. Thereafter, but subject to FDA approval if
needed, all future production of Product will be produced using the
process with the [**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.**]. After
twenty-five (25) batches of coated Substance are manufactured,
Manufacturer and Organon will agree upon a minimum Production Yield. If
the average of the Production Yield of the batches of Product produced
by Manufacturer during a calendar year is less than the minimum
Production Yield,
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EXHIBIT 10.27
Manufacturer will pay to Organon by January 31 of the subsequent year
the amount equal to the difference between the amount of Substance
required to make the number of batches of products in that calendar
year using the minimum Production Yield and the amount of Substance
used for such batches using the actual Production Yield times
[**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.**] according to Section
6.2.
Section 7: RECALLS
7.1 If Organon is required (or voluntarily decides) to initiate a recall,
product withdrawal or field correction of any Product manufactured by
Manufacturer under this Agreement, whether or not such recall has been
requested or ordered by any governmental agency, Organon will notify
Manufacturer's President or Chief Operating Officer, and Manufacturer
shall fully cooperate with Organon. If Manufacturer believes that a
recall, product withdrawal, or field correction by Organon may be
necessary or appropriate, Manufacturer will notify Organon of its
beliefs, and after Organon's decision the parties will cooperate in
promptly implementing Organon's decision.
7.2 With respect to any recall, product withdrawal, or field correction,
Organon will make all contacts with the FDA and any foreign regulatory
agencies and will be responsible for coordinating all of the necessary
activities in connection with such recall, product withdrawal, or field
correction, and shall make any statements to the media, including, but
not limited to, press releases and interviews for publication or
broadcast.
7.3 If any recall, product withdrawal, or field correction is initiated
solely because of non conformance or a defect in any Product arising
from the manufacture, processing, primary packaging or holding of the
Product by Manufacturer, Manufacturer will (i) replace all defective
Product free of charge, (ii) reimburse Organon for out-of-pocket costs
actually paid by Organon to third parties for transportation, secondary
packaging and destruction of the recalled Product, and (iii) reimburse
Organon for its out of pocket administrative expenses incurred in
implementing the recall. Manufacturer shall provide, within a
reasonable amount of time, a full replacement of the recalled Product
due to recall, product withdrawal or field correction. The maximum time
for Manufacturer to provide full replacement will be sixty (60) days
except for Product covered by a pending investigation or subject to a
condition of force majeure.
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EXHIBIT 10.27
7.4 If any recall, product withdrawal or field correction is required due
to reasons other than those specified in Section 7.3, i.e., defective
materials supplied by Organon or improper handling of Product by
Organon, the costs of such recall, including the costs of any of
Manufacturer's work in process affected by the recall, will be borne by
Organon.
Section 8: MATERIALS
8.1 Except for Substance, the materials and components for the manufacture
of the Product, as well as the primary packaging materials shall be
purchased by Manufacturer for its own account and responsibility. All
such materials and components shall be in conformity with any quality
requirements included in the GMP Agreement.
8.2 All vendors or suppliers used by the Manufacturer shall be approved
through the Manufacturer's internal certification program. Manufacturer
shall send a certificate of conformance to Organon certifying each
vendor's compliance with cGMP's or other appropriate quality standards
on an annual basis or upon Organon's request.
8.3 Organon shall supply to Manufacturer the required amounts of Substance
free of charge, which shall only be used to manufacture Product for
Organon, according to the delivery schedule described in Section 9. The
Substance supplied by Organon hereunder shall conform to the
Specifications contained in the GMP Agreement and shall be accompanied
by a suitable Certificate of Analysis. While under the control of
Manufacturer, Substance remains the property of Organon. Within 5
working days of month end Manufacturer will provide Organon with the
following:
a. A list of the balance of Substance and Substance related inventory
at CIMA Labs at month end by lot. This list will include the
Substance in raw material form reported in grams by lot number.
Work in Process ("WIP") or Finished Goods which include Substance
will be reported in the appropriate unit of measure for each WIP
or Finished Goods level, i.e.: grams, tablets or strips, by WIP or
Finished Goods lot number.
b. Inventory records for all Substance and Substance related
inventory. These records will include, for each lot at each
manufacturing stage, a beginning balance, plus or minus all
increases or decreases to the lot with adequate descriptions or
explanations, and the balance of the lot at month end.
The above requirements can be changed if mutually agreed upon.
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EXHIBIT 10.27
Any non-batch processing related loss of Substance, while under the
control of the Manufacturer, which has been determined to be the fault
of the Manufacturer, will result in reimbursement by Manufacturer to
Organon in the terms described in Section 6.2. Organon will provide to
Manufacturer a Certificate of Insurance covering the Substance while it
is in the control of the Manufacturer.
8.4 Manufacturer shall inspect and test the materials, components and
Substance before processing in order to verify their conformity with
the requirements included in the GMP Agreement.
8.5 Organon shall reimburse Manufacturer for all materials and components
as well as primary packaging materials purchased specifically for the
manufacture of the Product that can not be used to manufacture the
Product due to reductions in Organon's purchase orders or due to
changes to the manufacturing process or primary packaging art work
mandated by regulatory authorities or Organon, or due to Organon's
decision to Self-Supply for reason other than Manufacturer's material
breach. In no event will Organon be responsible for more than 6 (six)
months' worth of inventory based on the current forecast at the time of
the changes within the limits stated within Section 9.1.
8.6 Organon and its representatives shall have the right to inspect and
audit Manufacturer's book, records and inventories relating to Product
during regular business hours, giving at least forty-eight (48) hours
prior notice.
Section 9: FORECAST, ORDERS AND DELIVERY
9.1 Before the tenth (10th) day of each calendar quarter, Organon shall
provide Manufacturer with a written 12 month rolling forecast of its
Requirements of Product and Samples and shall update such forecasts on
a quarterly basis or more frequently. Organon will place firm orders
with a minimum of a ninety (90) day lead-time before delivery is
required. Along with this forecast Organon, will communicate in Q1 and
Q4 of each year a Long Range Plan (LRP), which will indicate Organon's
Products needs over a maximum period of 2 years. The LRP is not a
commitment for future purchase orders.
9.2 Each Organon purchase order for Product will be considered accepted by
Manufacturer and Product will be delivered according to the times and
location in that purchase order if such purchase order is in accordance
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EXHIBIT 10.27
with this Section. Manufacturer reserves the right to reject any
purchase order for Product in which the first delivery date for Product
is substantially earlier than 90 days from the date Manufacturer
received that purchase order. Organon has the right to reconfirm orders
in writing, up to forty-five (45) days before the delivery date
specified on the purchase order, to issue change orders to increase the
quantity of Product ordered on a initial purchase order(s) by up to
[**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.**] of stated tablet
requirement or decrease the quantity of Product ordered on the initial
purchase order(s) by up to [**CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.**
] of stated tablet requirements. In the event Organon decreases by more
than [**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.**] the quantity
of Product requested on a purchase order(s) during the period
commencing on the date of receipt of that purchase order by
Manufacturer up to forty-five (45) days of the delivery date for that
shipment specified on such purchase order or decreases by any amount
the quantity of Product ordered within forty-five (45) days of the
delivery date specified on such purchase order(s), Organon shall pay
Manufacturer within 30 days of the Manufacturer's invoice date a
Cancellation Fee equal to [**CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.**].
Manufacturer agrees to commit an annual manufacturing capacity of
[**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.**] for the manufacture of
the Product ("AMC"). As from 2002, if Organon fails to utilize a
minimum of [**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.**] of the AMC
([**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.**]) in a given year then a
new lower AMC will be agreed to by the parties for future years.
Manufacturer's available production capacity (APC) is projected to be
[**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.**] in 2002 and
[**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.**] in 2003. The APC will
be mutually agreed to by both parties for years 2004 and beyond;
provided, however, the APC for any
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EXHIBIT 10.27
year will not be less than the previous year's (AMC plus RAMC) unless
Organon wishes to lower such amount.
Organon may, based on its LRP, reserve additional manufacturing
capacity beyond the AMC up to the Manufacturer's APC for that year
[herein called "(RAMC)"].
In the event Organon does not order an amount of Product for delivery
in a calendar year which is at least [**CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.**] of the RAMC established by Organon for that
calendar year, Organon shall pay the Manufacturer within 30 days of the
Manufacturer's invoice date a Capacity Reservation Fee, which is equal
to $[**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.**] times
[**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.**] of the difference
between the RAMC and the actual amount of Product ordered for delivery
in such calendar year by Organon. Organon has the right to increase or
decrease the RAMC for a calendar year without any penalty or fee
whatsoever, provided the change is communicated to the manufacturer no
later than December 1 of the calendar year immediately preceding the
calendar year to which a Capacity Reservation Fee would apply.
Organon agrees to be held liable for all obsolesce, for no more than 6
months worth of inventory, pursuant to Section 8.5, of materials
resulting from changes in Product or changes in purchase order
requirements.
9.3 Quantities of Product shall be delivered to Organon or an Affiliated
Company of Organon designated by Organon, F.O.B. Origin Freight Collect
(latest edition of the Incoterms) and risk of loss shall pass at the
time of such delivery.
9.4 Before the twentieth (20th) day of each calendar quarter, Manufacturer
shall provide Organon with written rolling-forecasts of its
requirements of Substance for each of the twelve (12) forthcoming
calendar months and shall update such forecasts on a quarterly basis.
The Substance shall be delivered by Organon to Manufacturer, sixty (60)
days prior to the delivery date for that shipment of Product on that
purchase order. If Organon fails to deliver Substance sixty days prior
to such delivery date the parties will agree to a new purchase order
delivery date.
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EXHIBIT 10.27
9.5 After January 15, 2001, unless otherwise mutually agreed, if
Manufacturer delivers Product twenty (20) business days after or ten
(10) business days before the specified delivery date Manufacturer
shall pay to Organon a penalty of [**CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.**] of the value of Product for that delivery per business
day for each business day that such order is late or early, not
including any Product covered by a pending investigation or subject to
a condition of force majeure. Any such penalty shall not exceed
[**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.**] percent of the value of
Organon's Purchase Order.
9.6 If Organon fails to deliver Substance in sufficient quantities for the
Manufacturer to maintain safety stock as describe in Section 9.4 in
time for the Manufacturer to meet delivery times of accepted purchase
orders, this shall result, to Organon, in a penalty of $[**CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.**] for the number of tablets
specified for that delivery in that purchase order; provided, however,
that any such penalty will only be due and payable in the event
Manufacturer can prove that this resulted in idle time of allocated
machine capacity for such delivery in that purchase order by failure of
Organon to deliver Substance. Such idle time of allocated machine
capacity means the machine availability was not used for e.g., required
maintenance or other production orders. This Section will only be in
effect when both Organon and the Manufacturer have agreed on a minimum
Production Yield factor as mentioned in Section 6.3.
Section 10: PRICES AND PAYMENTS
10.1 As a consideration for the manufacture of the Product by Manufacturer,
Organon shall pay to Manufacturer the purchase prices as specified in
Exhibit I attached hereto. Annual price increases will commence on
January 1, 2002, and are to be established January of each calendar
year thereafter. Any price increases will be mutually agreed upon by
both the Manufacturer and Organon [**CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.**]
10.2 All invoices for delivery of the Product shall be paid by Organon in
US$ within thirty (30) days after the date of the invoice. The date of
the
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EXHIBIT 10.27
invoice shall not precede the Manufacturer's release of the Product.
Each invoice shall be accompanied with a Certificate of Analysis for
the Coated Substance and a Certificate of Conformance for the blistered
Product for each batch of Product included in the invoice. There will
be a [**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.**], of invoice
price, penalty per month, for each month a payment is past due. Such
penalty shall not exceed [**CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.**] per annum.
Section 11: INSPECTION
11.1 Manufacturer shall keep such books and records regarding the
manufacture and quality control of the Product in accordance with the
instructions included in the Manufacturing Instructions, QC
Instructions as defined in the Good Manufacturing Practices (GMP)
Agreement and/or in compliance with 21CFR 211. With at least
forty-eight (48) hours notice Organon shall have the right to inspect
such books and records at any time during regular business hours.
11.2 Organon shall have the right to inspect Manufacturer's facilities to
see if Manufacturer is in compliance with the Manufacturing
Instructions, the QC Instructions as defined in the GMP Agreement and
cGMP's. Any representatives of Organon designated for this purpose
shall have the right to inspect the manufacturing and quality control
facilities and warehouses of Manufacturer during regular business
hours, giving at least forty-eight (48) hours prior notice.
Section 12: ADDITIONAL RESPONSIBILITIES OF MANUFACTURER
12.1 Manufacturer shall forward to Organon all inquiries from any person
concerning the Product within fifteen (15) business days after
Manufacturer receives each such inquiry, and provide Organon with any
reasonable assistance requested in connection with customer complaints
relating to the Product. This assistance shall include inspection of
retains, review of appropriate test records, testing of samples and
issuance of formal reports summarizing complaint investigations.
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EXHIBIT 10.27
12.2 Manufacturer shall inform Organon of any defective Product,
manufacturing process deviation or information of which Manufacturer is
aware that suggests that a defect may exist, within five (5) business
days after becoming aware of any such defective Product or deviation
information.
12.3 Manufacturer shall inform Organon of any pending or threatened
litigation, governmental investigation, proceeding or action involving
the Product or Manufacturer's manufacturing or other facilities for the
Product, within five (5) business days after receiving notice thereof.
12.4 Manufacturer shall inform Organon within forty-eight (48) hours of any
FDA general GMP inspection or other FDA inspection involving the
Product. The Manufacturer will provide Organon with a copy of the form
483, or any other pertinent governmental agency form or document, as
well as the Manufacturer's response thereto within Forty-eight (48)
hours after Manufacturer's receipt of such form or document or
response. Manufacturer may redact any confidential information of third
parties from such documents.
12.5 Manufacturer shall supply an Annual Product Review, as required by
21CFR 211.180(e), no more than 30 days following each sNDA anniversary
date throughout the life of this Agreement.
Section 13: ADDITIONAL RESPONSIBILITIES OF ORGANON
13.1 Organon shall forward to Manufacturer copies of any complaints it
receives from customers concerning the Product for which Manufacturer's
assistance is requested, within fifteen (15) business days after
receiving any such complaint.
13.2 Organon shall inform Manufacturer of any defective Product or of
information that suggests that a defect may exist within five (5)
business days after becoming aware of such defective Product or
information.
13.3 Organon shall inform Manufacturer of any pending or threatened
litigation or governmental investigation involving the manufacture of
the Product within five (5) business days after Organon receives notice
thereof.
13.4 Organon shall comply with applicable laws and governmental regulations
affecting the sale and distribution of the Product.
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EXHIBIT 10.27
13.5 Organon shall inform Manufacturer (and provide copies when available)
of regulations and requirements of applicable foreign country
regulatory authorities with respect to the Product ordered by Organon
for sale in a foreign country.
Section 14: INDEMNIFICATION
14.1 Manufacturer will indemnify and hold Organon and Organon's Affiliated
Companies harmless from and against all claims, suits and proceedings,
and all damages, losses, costs, recoveries and expenses, including
reasonable legal expenses and costs (including attorneys' fees) that
Organon or Organon's Affiliated Companies may incur, arising out of any
third party's claim of property damage or personal injury or death
arising from Manufacturer's negligent or willful misconduct in its
performance of this Agreement, any non-conformance or defective Product
relating to the manufacturing or testing of Product by Manufacturer or
any breach of a representation or warranty given herein by
Manufacturer. However, Manufacturer will in no event be liable for any
such claims, damages, losses, costs or expenses to the extent they
arise out of or result from materials, including the Substance,
supplied by Organon to Manufacturer, or from Organon's or Organon's
Affiliated Companies' negligence or willful misconduct.
14.2 Organon will indemnify and hold Manufacturer and Manufacturer's
Affiliated Companies harmless from and against all claims, suits and
proceedings, and all damages, losses, costs, recoveries and expenses,
including reasonable legal expenses and costs (including attorneys'
fees) that Manufacturer or Manufacture's Affiliated Companies may
incur, arising out of any third party's claim of property damage or
personal injury or death arising from materials, including the
Substance, supplied by Organon to Manufacturer or from Organon's or
Organon's Affiliated Companies' negligent or willful misconduct in its
performance of this Agreement or any breach of a representation or
warranty given herein by Organon or from the sale or use of Product
except to the extent Manufacturer is responsible to indemnify Organon
under Section 14.1 with respect thereto. However, Organon will in no
event be liable for any such claims, damages, losses, costs or expenses
to the extent they arise out of or result from materials supplied by
Manufacturer to Organon, or from Manufacturer or Manufacturer's
Affiliated Companies' negligence or willful misconduct.
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EXHIBIT 10.27
14.3 In the event any third party asserts a claim covered by Sections 14.1
or 14.2, the indemnified party will give prompt notice to the
indemnifying party, who may, at its election, handle and control the
defense or settlement of the claim at its own expense by giving prompt
notice to the indemnified party. However, the indemnifying party will
not settle any such claim without the indemnified party's prior written
consent, which will not be unreasonably withheld. If the indemnifying
party does not give such notice and does not proceed diligently to
defend the claim within thirty (30) days after receipt of notice, the
indemnifying party will be bound by any defense or settlement that the
indemnified party may make as to that claim and will reimburse the
indemnified party for any expenses related to the defense or settlement
of the claim. The parties will cooperate in defending against any
asserted third-party claims. Indemnification of the indemnified party
will also cover the indemnified party's directors, officers, employees,
agents, Affiliated Companies, and third parties performing services for
the indemnified party.
Section 15: CONFIDENTIALITY
15.1 It is understood and agreed by Manufacturer, that any and all
information and data disclosed by Organon to Manufacturer under this
Agreement is and shall remain the exclusive property of Organon. It is
acknowledged by Manufacturer that the information and data are only
disclosed to Manufacturer for the purposes and use described in this
Agreement and that they are to be regarded as trade secrets containing
unpublished results of private research and experience which are used
in Organon's business and which are of a nature customarily held in
strict confidence and regarded as privileged knowledge; consequently,
any other use or any disclosure by Manufacturer of information and data
in violation of this Section 15.1 may harm and damage Organon's
legitimate business interests. Manufacturer hereby undertakes to keep
secret and confidential the above-mentioned information and data during
the term of this Agreement as well as thereafter and not to use or
disclose the information and data to any third party, person, or
government institution without Organon's prior written approval and not
to use it for any other use or purpose than those described in this
Agreement.
15.2 The obligations described in Section 15.1 above shall not be applicable
to any part of the information and data disclosed by Organon under this
Agreement which:
- at the moment of disclosure is general (public) knowledge;
- after disclosure, through no fault of Manufacturer, becomes
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19
EXHIBIT 10.27
general (public) knowledge;
- properly and lawfully becomes available to Manufacturer, from the
source not bound to Organon by a secrecy obligation and provided
this can be adequately substantiated;
- is required to be disclosed under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, or
which is otherwise required by law to be disclosed.
15.3 Upon termination or expiration of this Agreement Manufacturer hereby
undertakes, upon such request from Organon, to promptly return all
information and data on any and all media received from Organon and not
to retain any copy or photocopy of such information and data and to
stop any further use of Organon's information and data as referred to
in Section 15.1 above.
15.4 The terms of Section 4 of the License Agreement shall apply to the know
how, information and data disclosed by Manufacturer to Organon under
this Agreement.
Section 16: TERM AND TERMINATION
16.1 This Agreement shall be effective for a term of five years from the
date specified in Section 2.2 and shall automatically renew for
successive three year periods, unless Organon notifies Manufacturer
that it will terminate this agreement or any renewal thereof within at
least 18 months prior to the end of the current term or unless
terminated under Section 16.2. For each renewal period, the parties
agree to negotiate in good faith any increase or decrease of the prices
for Product for such renewal period.
16.2 Notwithstanding the preceding paragraph, this Agreement may be
terminated forthwith by registered mail or overnight courier:
a) by either Party in the event the other Party shall materially breach
any of its obligations under this Agreement and shall fail to remedy
such breach within sixty (60) days from receipt of written notice of
such breach by the Party not in default; or
b) by either Party in the event of the other Party's liquidation,
bankruptcy or state of insolvency; or
c) by Organon in the event Manufacturer without the written consent of
Organon assigns this Agreement in whole or in part to any third party
(not
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EXHIBIT 10.27
as provided for in Section 18.3) or if the majority of the shares of
Manufacturer are acquired by a current or future competitor of Organon
in the antidepressant market.
If either clause b or c occurs, Organon shall have the right to Self
Supply without payments set forth in Sections 2.4 and 2.5.
Section 17: APPLICABLE LAW AND DISPUTE RESOLUTION
17.1 The validity, construction and performance of this Agreement shall be
governed by and construed in accordance with the laws of the state of
Delaware and the federal law of the United States of America.
17.2 The Parties shall attempt in good faith to resolve promptly any dispute
arising out of or relating to this Agreement by negotiation. If the
matter can not be resolved in the normal course of business any
interested Party shall give the other Party written notice of any such
dispute not resolved, after which the dispute shall be referred to more
senior executives of both Parties, who shall likewise attempt to
resolve the dispute.
17.3 If any dispute has not been resolved by non-binding means as provided
in Section 17.2 above within forty-five (45) days of the initiation of
such procedure, the dispute shall be finally and exclusively settled by
arbitration by three (3) independent arbitors in Minneapolis, Minnesota
under the Uncitral Arbitration Rules. Each party shall appoint one (1)
arbitrator, and those two (2) arbitrators shall appoint a third by
mutual agreement and in accordance with the Uncitral Arbitration Rules.
The appointing authority shall be the London Court of International
Arbitration in London, England. The language of the arbitration shall
be English. The arbitration shall be in lieu of any other remedy and
the award shall be final, binding and enforceable by any court having
jurisdiction for that purpose. The Parties further agree that the
arbitrators are not authorized to award punitive damages in connection
with any controversy or claim settled by arbitration.
17.4 This Section shall, however, not be construed to limit or to preclude
either Party from bringing any action in any court of competent
jurisdiction for injunctive or other provisional relief as necessary or
appropriate.
Section 18: MISCELLANEOUS
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EXHIBIT 10.27
18.1 Headings. All headings of this Agreement are added for the purpose of
convenience only and the contents and meaning of such headings shall in
no way limit the meaning and applicability of the relevant Sections.
18.2 Entire Agreement. This Agreement, the License Agreement and the GMP
Agreement constitutes the entire agreement between the Parties and
annuls and replaces any other agreement or understanding whether
written or oral which may have existed between the Parties with respect
to the subject matter hereof. All Exhibits attached hereto form an
integral part of this Agreement. This Agreement can be modified or
amended and rights under this Agreement waived only in writing signed
by the Party to be charged.
18.3 No Assignment. Manufacturer shall not assign or otherwise transfer this
Agreement or any part thereof to any third party, without the written
consent of Organon, which will not be unreasonably withheld or delayed.
Organon may assign this Agreement to an affiliate without
Manufacturer's consent or to a third party with Manufacturer's consent,
which will not be unreasonable withheld or delayed.
18.4 Binding upon Successors. This Agreement shall bind and benefit the
Parties and their respective successors and permitted assigns.
18.5 Notices. All notices in connection with this Agreement shall be in
writing and be in the English language (as shall all other written
communications and correspondence) and may be given by personal
delivery, prepaid registered airmail letter, telegram or telefax,
addressed to the Party required or entitled to receive same at its
address set forth below, or to such other address as it shall later
designate by like notice to the other Party. Notice of termination of
this Agreement if given by telegram or telefax, shall be confirmed by
prepaid registered airmail letter dated and posted the same day. The
effective date of any notice if served by telegram, telex or telefax
shall be deemed the first business day in the city of destination
following the dispatch thereof and if given by prepaid registered
airmail letter only, it shall unless earlier received, be deemed served
not later than seven (7) days after date of posting.
Notice to Organon shall be to:
Organon Inc.
000 Xx. Xxxxxxxx Xxxxxx
Xxxx Xxxxxx, Xxx Xxxxxx 00000
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EXHIBIT 10.27
Attention: Vice President, Production
with a copy to:
Vice President & General Counsel
Organon Inc.
000 Xx. Xxxxxxxx Xxx.
Xxxx Xxxxxx, Xxx Xxxxxx 00000
Notice to Manufacturer shall be to:
CIMA Labs Inc.
Telefax: 0-000-000-0000
Attention: President and Chief Operating Officer
18.6 Severability. All stipulations contained in this Agreement shall be so
construed as not to infringe any provision of any law prevailing to
this Agreement. To the extent that, and only to the extent that, any
stipulation does infringe any such provisions, said stipulation shall
be deemed void and shall be replaced by a stipulation in such a way as
in accordance with the prevailing law is possible and in such a way as
will be the least prejudicable to the interest of either Party. The
infringement of any provision by a stipulation shall not affect the
validity of any other stipulation of this Agreement.
18.7 Independent Contractors. The Parties are independent contractors and
nothing in this Agreement shall imply any principal or agent
relationship or other joint relationship and neither Party shall have
the power or authority, either express or implied, to obligate the
other Party.
18.8 Language. This Agreement is written in the English language and
executed in two (2) counterparts, each of which shall be deemed an
original. The English language text of this Agreement shall prevail
over any translation thereof.
18.9 No Waiver. Failure of either party to insist upon the strict and
punctual performance of any provision of this Agreement shall not
constitute a waiver of, or estoppel against asserting the right to
require such performance, nor should a waiver or estoppel in one case
constitute a waiver or estoppel with respect to a later breach whether
of similar nature or otherwise.
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EXHIBIT 10.27
18.10 Back-up Facility. Manufacturer represents and warrants that it will
have a back-up manufacturing facility [**CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.**] from [**CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.**]. As soon as the manufacturing facility is operational,
Organon and Manufacturer will establish the Product, subject to FDA
SUPAC Guidelines, at the back-up facility. Once the Product is
established at the back-up facility, pending regulatory approval, the
back-up facility will be available immediately for production of
Product including where the manufacturing of Product is for practical
reasons of any kind no longer possible in the facility that is normally
used to manufacture Product. The back-up manufacturing facility may be
located at a Third Party Manufacturer's facility or facilities,
provided Manufacturer obtains Organon's prior written approval, such
approval will not be unreasonably withheld or delayed. As mutually
agreed, Organon will pay Manufacturer for regulatory, development,
clinical, stability and validation expenses required to establish a
back-up facility or facilities. The Product will be transferred to the
back-up facility or facilities under the FDA SUPAC Guidelines, as a
Level 3 Change.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in duplicate by their duly authorized representatives to be effective as of the
date first written above
ORGANON INC. CIMA LABS INC.
By:/s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxxxx
---------------------------------------------- --------------------------------------------
Name: Xxxxxxx X. Xxxxxxx Name: Xxxx X. Xxxxxxx
-------------------------------------------- ------------------------------------------
Title: Vice President Title: President and CEO
------------------------------------------- ------------------------------------------
By:/s/ Xxxxx Xxxxxxxxxx By:/s/ Xxxx Xxxxx
---------------------------------------------- ---------------------------------------------
Name: Xxxxx Xxxxxxxxxx Name: Xxxx Xxxxx
-------------------------------------------- -------------------------------------------
Title: Vice President Title: Chief Operation Officer
------------------------------------------- ------------------------------------------
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EXHIBIT 10.27
Purchase Price per SolTab(TM)
------------------------------------------
CUMULATIVE PURCHASES* OF PRODUCT PER YEAR #### mg #### mg #### mg
---------------------------------------------------------- ------- ------- -------
[**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED $#### $#### $####
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.**]
[**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED $#### $#### $####
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.**]
[**CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED $#### $#### $####
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.**]
For each calendar year the initial forecast for that year will be used for
pricing Product invoiced in that year. At the end of each calendar year if the
actual Product purchases are different than such initial forecast and such
actual purchases of Product fall in a higher or lower pricing level, the
difference will be calculated and the Manufacturer or Organon shall pay that
amount to the other Party as the case may be. Notwithstanding the foregoing, no
adjustment will be made if during that year there was an event of material
breach by the Manufacturer or of force majeure.
* Purchases for purposes of this exhibit mean Product invoiced by Manufacturer
during the applicable calendar year.
#### = [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
24
