Exhibit 10.4
CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
MANUFACTURING AND SUPPLY AGREEMENT
THIS MANUFACTURING AND SUPPLY AGREEMENT (the "AGREEMENT") is made
effective as of the 27th day of September, 2004 (the "EFFECTIVE DATE"), by and
between SANTARUS, INC., a Delaware corporation, having offices at 00000 Xxxx
Xxxxx Xxx Xxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000, U.S.A. ("SANTARUS") and
OSG Norwich Pharmaceuticals Inc., a Delaware corporation, having offices at 0000
Xxxxx Xxxxxxx 00, Xxxxxxx, Xxx Xxxx 00000 ("MANUFACTURER"). Manufacturer and
Santarus are sometimes referred to herein individually as a "PARTY" and
collectively as the "PARTIES."
RECITALS
WHEREAS, Santarus is a specialty pharmaceutical company focused on
acquiring, developing and commercializing products for the prevention and
treatment of gastrointestinal diseases and disorders;
WHEREAS, Manufacturer is a provider of outsourced drug development and
manufacturing services to pharmaceutical and biotechnology companies;
WHEREAS, Santarus seeks to retain a contract manufacturer to
manufacture and supply commercial quantities of its SAN-10 immediate-release
omeprazole pharmaceutical product;
WHEREAS, Manufacturer possesses substantial resources, experience, and
expertise in the manufacture of pharmaceutical products; and
WHEREAS, the Parties mutually desire to enter into an agreement for the
commercial manufacture and supply of Santarus' SAN-10 product.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth below and in the Quality Agreement, the
Parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 "AFFILIATE" means any individual, corporation, association, or
other business entity, which directly or indirectly controls, is controlled by,
or is under common control with the Party in question. As used in this
definition of "Affiliate," the term "control" shall mean, as to an entity, (a)
direct or indirect ownership of [***] percent [***] or more of the voting
interests or other ownership interests in the entity in question; (b) direct or
indirect ownership of [***] percent [***] or more of the interest in the income
of the entity in question; or (c) possession, directly or indirectly, of the
power to direct or cause the direction of management or policies of the entity
in question (whether through ownership of securities or other ownership
interests, by contract or otherwise).
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respect to the omitted portions.
1.2 "API" means the active pharmaceutical ingredient known as
omeprazole (Chemical Abstract No. 73590-58-6).
1.3 "API REIMBURSEMENT VALUE" means [***].
1.4 "APPLICABLE LAWS" mean all laws, statutes, ordinances, codes,
rules, regulations, guidelines, and procedures enacted or made by a Government
Authority, including, without limitation, the FDA and any applicable Foreign
Regulatory Authority, that are in force during the Term, and in each case only
to the extent applicable to the subject matter of, or the performance by the
Parties of their respective obligations under, this Agreement. For purposes of
this Agreement, "Applicable Laws" shall include, without limitation, the FFDCA,
the regulations promulgated thereunder (including, without limitation, those
regulations currently contained in Title 21 of the Code of Federal Regulations),
and other rules and regulations promulgated under the FFDCA relating to the
manufacture of pharmaceutical products; and equivalent laws, regulations and
standards promulgated by a Government Authority that may assert jurisdiction
over the Finished Product or any applicable Manufacturer manufacturing
facilities; GMP, including the FDA's Guidance for Industry, Manufacturing,
Processing or Holding Active Pharmaceutical Ingredients, March 1998, and any
updates thereto; and the FDA's regulations for drug establishment registration.
1.5 "BULK API" means the bulk form of API manufactured by a Third
Party manufacturer and provided to Manufacturer for use in manufacturing the
Finished Product in accordance with the terms and conditions of this Agreement.
1.6 "BUSINESS DAY" means any day other than a Saturday, Sunday or
statutory holiday in San Diego, California.
1.7 "CERTIFICATES OF COMPLIANCE" means (a) the certificate of
analysis confirming the identity, strength, quality and purity of each invoiced
batch of Finished Product to which it pertains (together with any certificate of
analysis pertaining to the Bulk API contained in such batch), (b) the
certificate of compliance confirming that the each invoiced batch of Finished
Product was manufactured, tested, stored and supplied by Manufacturer in
compliance with this Agreement, including without limitation the Specifications,
GMP and Applicable Laws, and (c) such other certificates and confirmations as
described in the Quality Agreement, each such certificate signed by an
authorized signatory of Manufacturer.
1.8 "COMMENCEMENT OF COMMERCIAL MANUFACTURING" means the date on
which Manufacturer commences to manufacture commercial quantities of Finished
Product pursuant to the first Firm Purchase Order submitted by Santarus under
Section 2.2.3.
1.9 "DEFICIENCY NOTICE" has the meaning set forth in Section
3.5.1.
1.10 "EFFECTIVE DATE" has the meaning specified on the first page
of this Agreement.
1.11 "FACILITY" means Manufacturer's facilities located at 0000
Xxxxx Xxxxxxx 00, Xxxxxxx, Xxx Xxxx 00000, and any other facilities (including
facilities utilized by subcontractors as permitted hereunder) that are used in
connection with the activities performed by Manufacturer hereunder and are
approved in writing by Santarus.
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respect to the omitted portions.
1.12 "FDA" means the United States Food and Drug Administration,
and any successor thereto.
1.13 "FFDCA" means the Federal Food, Drug, and Cosmetic Act, 21
U.S.C. Section 321 et seq., as amended.
1.14 "FINISHED PRODUCT" means Santarus' SAN-10 immediate-release
omeprazole pharmaceutical product, as more particularly described in the
Specifications.
1.15 "PURCHASE ORDER" has the meaning set forth in Section 2.2.3.
1.16 "FORECAST" has the meaning set forth in Section 2.2.2.
1.17 "FOREIGN REGULATORY AUTHORITY" means, for each country other
than the United States of America, the authority or authorities having
jurisdiction over the Finished Product that correspond to the FDA.
1.18 "GMP" means current good manufacturing practices applicable in
the United States of America as described in:
(a) Parts 210 and 211 of Title 21 of the United States Code of Federal
Regulations and the requirements imposed thereunder by the FDA,
together with the latest FDA guidance and like documents pertaining to
manufacturing and quality control practice, all as updated, amended and revised
from time to time.
1.19 "GOVERNMENT AUTHORITY" means any supra-national, national,
regional, state, provincial or local government, court, governmental agency,
authority, board, bureau, instrumentality or regulatory body having jurisdiction
over the Finished Product.
1.20 "INDA" means an investigational new drug application.
1.21 "MANUFACTURER EQUIPMENT" has the meaning set forth in Section
14.1.
1.22 "MANUFACTURER SUPPLY COMMITMENT" has the meaning set forth in
Section 2.2.4.
1.23 "INITIAL TERM" has the meaning set forth in Section 11.1.
1.24 "INVENTION" means information relating to any invention,
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.
1.25 "MINIMUM RUN QUANTITY" means the minimum number of batches of
Finished Product to be produced during the same cycle of manufacturing as set
forth in EXHIBIT A hereto.
1.26 "NDA" means a New Drug Application filed with the FDA for
marketing approval for a pharmaceutical product.
1.27 "MANUFACTURER MANUFACTURING RESPONSIBILITIES" has the meaning
specified in Section 3.1 of this Agreement.
1.28 "PRICE" means the price for the manufacture and supply of
Finished Product under this Agreement specified in the pricing structure set
forth in EXHIBIT B, as may be amended from time to time in accordance with
Section 6.2 of this Agreement.
1.29 "PRODUCT PATENTS" means [***].
1.30 "QUALITY AGREEMENT" means that certain quality agreement to be
entered into by and between the Parties, following the Effective Date but
reasonably in advance of the Commencement of Commercial Manufacturing, and
relating to the obligations of the Parties regarding procedures to assure the
identity, strength, purity and quality of the Finished Product.
1.31 "RAW MATERIALS" has the meaning set forth in Section 7.1.
1.32 "REGULATORY APPROVAL" means, with respect to a national or
multinational jurisdiction, any approvals, licenses, registrations, or
authorizations necessary for the manufacture (where relevant), marketing and
sale of the Finished Product in such nation or jurisdiction.
1.33 "RENEWAL TERM" has the meaning set forth in Section 11.1.
1.34 "RESPONSIBLE EXECUTIVE" means the President or the Chief
Executive Officer of a Party, or his or her designated representative.
1.35 "SECONDARY MANUFACTURER SUPPLY COMMITMENT" has the meaning set
forth in Section 2.2.4.
1.36 "SPECIFICATIONS" means the specifications for the Finished
Product set forth in the Quality Agreement (as amended from time to time)
together with applicable manufacturing protocols, packaging specifications,
testing methodologies and all applicable requirements set forth in regulatory
filings made with the FDA (including INDA's and NDA's) for the Finished Product.
1.37 "TERM" means the Initial Term and the Renewal Term.
1.38 "TERRITORY" means the United States of America.
1.39 "THIRD PARTY" means any individual or entity other than
Manufacturer or Santarus or their respective Affiliates.
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respect to the omitted portions.
ARTICLE 2
SUPPLY, STORAGE, AND DELIVERY OF FINISHED PRODUCT
2.1 SUPPLY OF FINISHED PRODUCT. During the Term, subject to
Section 2.2.4, Manufacturer shall manufacture and supply, in accordance with the
provisions of this Agreement, the Specifications, GMP and Applicable Laws,
[***].
2.2 COMMERCIAL SUPPLY.
2.2.1 Supply Obligations. Manufacturer shall manufacture
and supply to Santarus, and Santarus agrees to purchase from Manufacturer, such
quantities of Finished Product specified by Santarus in accordance with this
Agreement at the Price. [***].
2.2.2 Forecasts.
Santarus shall use commercially reasonable efforts to determine its
estimated requirements for Finished Product from Manufacturer and shall deliver
to Manufacturer a written, non-binding, rolling [***] month forecast, by month,
of such estimated requirements (the "FORECAST"). Santarus shall deliver the
first Forecast to Manufacturer (the "INITIAL FORECAST") as soon as reasonably
practicable following the execution of this Agreement. After delivery of the
Initial Forecast, Santarus shall, in accordance with the terms of this
Agreement, update and revise the Forecast on a not less than [***] basis.
Santarus shall provide each updated Forecast not less than [***] calendar days
prior to the beginning of the next [***]. Manufacturer shall use the Forecast
for planning purposes and make available the production capacity and associated
testing and release capacity required to manufacture and supply the forecasted
quantities of Finished Product within the time frames specified in each
Forecast.
2.2.3 Purchase Orders. Santarus shall submit to
Manufacturer a written purchase order (the "PURCHASE ORDER") for the purchase of
Finished Product at least [***] calendar days prior to the specified delivery
date. Each Purchase Order shall specify the quantity or, if more than one
shipment is requested, quantities of Finished Product ordered, the requested
delivery date or dates, the delivery address(es) and any applicable shipping
information (if different from that specified in Section 2.3). Manufacturer
shall manufacture and supply the Finished Product in the quantities and by the
delivery dates set forth in the applicable Purchase Order.
2.2.4 Supply Commitment.
Manufacturer shall supply to Santarus [***] (the "MANUFACTURER SUPPLY
COMMITMENT") and Manufacturer further agrees to [***] (the "SECONDARY
MANUFACTURER SUPPLY COMMITMENT"). Manufacturer shall ensure that adequate
Manufacturing Equipment (as defined in Section 14.1 below) is available and
dedicated to fulfill the supply and that such Manufacturing Equipment is
maintained in good working order.
2.2.5 Purchase Order Amendments. Santarus may amend a
Purchase Order by submitting an amended Purchase Order, as follows: [***].
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respect to the omitted portions.
2.3 SHIPPING AND DELIVERY OF FINISHED PRODUCT. Manufacturer shall
serve as agent for Santarus, arrange for shipping and insurance so that the
Finished Product will be delivered to the delivery address on the delivery date
set forth in the applicable Purchase Order, at Santarus' expense. Santarus may
select the freight carrier used by Manufacturer to ship Finished Products and
may monitor Manufacturer's shipping and freight practices as they pertain to
this Agreement. Finished Products shall be transported in accordance with the
Specifications, GMP and Applicable Laws. Manufacturer shall notify Santarus in
writing at the time of shipment as to the quantity of Finished Product shipped,
the identity of the carrier and the anticipated delivery date. If any order is
delayed and is not likely to be delivered on time, Manufacturer shall
immediately notify Santarus and Santarus may direct Manufacturer to ship such
order by expedited means of transportation as designated by Santarus. [***].
2.4 TITLE AND RISK OF LOSS. Manufacturer shall deliver the
Finished Product to the carrier selected by Santarus at Manufacturer's shipping
point unless otherwise mutually agreed in writing. Such title as Manufacturer
has in Finished Products and risk of loss or of damage to Finished Products
shall remain with Manufacturer until Finished Products are loaded onto the
carrier's vehicle by Manufacturer for shipment at Manufacturer's shipping point
at which time title and risk of loss or damage shall transfer to Santarus.
Except as expressly provided otherwise in this Agreement, Santarus shall be
responsible for all charges associated with shipping of Finished Product.
2.5 DOCUMENTATION AND CUSTOMS. Upon completion of manufacturing,
packaging and testing of Finished Product pursuant to each Purchase Order,
Manufacturer shall deliver to Santarus by electronic means quality documentation
for such Finished Product manufactured pursuant to such Purchase Order as
specified in the Quality Agreement, including without limitation, the
Certificates of Compliance in respect of such Purchase Order and, if requested
by Santarus, completed batch production records (collectively, the "PRE-SHIPPING
DOCUMENTATION"). Manufacturer acknowledges and agrees that Santarus shall be
responsible, at all times, for the final release of the Finished Product and
accordingly, Manufacturer shall not ship any Finished Product until Santarus has
notified Manufacturer in writing that it has completed its final release.
Concurrent with the shipment of each Purchase Order of Finished Product,
Manufacturer shall deliver to Santarus any applicable documentation
corresponding to such shipment and such other documentation and information as
may be necessary or desirable for complying with import, export, and customs
laws, regulations and like requirements, as applicable.
2.6 INVOICES. MANUFACTURER SHALL INVOICE SANTARUS ON [***] AND
SANTARUS SHALL PAY [***] FOLLOWING RECEIPT THEREOF (IN ACCORDANCE WITH SECTIONS
6.3 AND 15.5 BELOW).
2.7 LATE DELIVERY/SHORTAGES AND OVERAGES.
[***].
2.8 KEY PERFORMANCE INDICATORS.
2.8.1 For each [***] period during the Term, Manufacturer
shall meet or exceed the key performance indicators established in good faith by
Manufacturer and Santarus for such
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respect to the omitted portions.
[***] period (collectively, as established with respect to the applicable [***]
period, the "KPIS"). The preliminary categories of KPIs in respect of the first
[***] period following Commencement of Commercial Manufacturing are set forth in
EXHIBIT C, and the parties mutually agree to refine such KPIs reasonably in
advance of the Commencement of Commercial Manufacturing. Thereafter, the KPIs
will be reviewed by Manufacturer and Santarus at each [***] review meeting
contemplated by Section 2.12 with the intention of amending, if necessary, the
KPIs in respect of the forthcoming [***] period. If no such amendments are
necessary or if amendments are not agreed, the KPIs in respect of such
forthcoming [***] period shall be at least as beneficial to Santarus as the KPIs
for the then current [***] period.
2.8.2 In the event that Manufacturer fails to meet one or
more of the KPIs at any time during the term of this Agreement, then
Manufacturer and Santarus shall work diligently to address such failure
including, without limitation, the following:
(i) Manufacturer's Customer Service Director and
the Senior Manager of Supply Chain Management of Santarus shall meet within five
(5) days of the determination of the sustained failure in order to establish a
procedure to address the problem (the "REMEDIATION PLAN"). If such meeting does
not occur within such five (5) days or if there is no agreement as to the
Remediation Plan (a "STAGE 1 FAILURE"), then clause (ii) shall apply;
(ii) Manufacturer's Plant Manager and the
Director of Manufacturing of Santarus shall meet within five (5) days of the
Stage 1 Failure in order to establish a Remediation Plan. If such meeting does
not occur within such five (5) days or if there is no agreement as to the
Remediation Plan (a "STAGE 2 FAILURE"), then clause (iii) shall apply; and
(iii) Manufacturer's President and Senior Vice
President, Manufacturing and Product Development of Santarus shall meet within
five (5) days of the Stage 2 Failure in order to establish a Remediation Plan.
If the Remediation Plan is either not mutually agreed upon or is not, in the
reasonable judgment of Santarus, implemented satisfactorily, then Manufacturer
shall be deemed to be in material breach of its obligations hereunder and will
be formally notified in writing of such status by the appropriate Santarus
personnel. The Parties may mutually agree in writing to extend any of the time
periods referenced in this Section 2.8.
2.9 STORAGE OF FINISHED PRODUCT. Until Finished Product is
shipped, Manufacturer shall store all Finished Product identifiably distinct
from any other raw material and finished or filled product stocks and shall
comply with all storage requirements set forth in the Specifications.
Manufacturer shall assume responsibility for any loss or damage to such Finished
Product while stored by Manufacturer.
2.10 MULTI-COUNTRY PACKAGING REQUIREMENTS. If and when Santarus
decides that it wishes to have Manufacturer manufacture the Finished Product for
countries in addition to the Territory, then Santarus shall inform Manufacturer
of the packaging requirements for each new country and Manufacturer shall
prepare a quotation for consideration by Santarus of the additional Raw Material
costs, if any, and the Price for the Finished Product destined for such new
country. The agreed additional packaging requirements and related packaging
costs and
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respect to the omitted portions.
Price shall be set out in a written amendment to this Agreement or otherwise
recorded in a writing signed by the Parties.
2.11 API YIELD.
2.11.1 Manufacturer shall promptly (and in any event no
later than two (2) Business Days after Santarus' request) provide an inventory
status report to Santarus from time to time as reasonably requested by Santarus.
In addition, Manufacturer shall monitor on a monthly basis the inventory of Bulk
API held by Manufacturer and Manufacturer shall provide Santarus with a monthly
inventory report (within five (5) Business Days following the last day of the
applicable month) of the Bulk API held by Manufacturer, which shall contain the
following information for such month:
QUANTITY RECEIVED: The total quantity of Bulk API that complies with
the Specifications and is received at the Facility during the
applicable period.
QUANTITY DISPENSED: The total quantity of Bulk API dispensed at the
Facility during the applicable period. The Quantity Dispensed is
calculated by adding the Quantity Received to the inventory of Bulk API
that complies with the Specifications and is held at the beginning of
the applicable period, less the inventory of Bulk API that complies
with the Specifications and is held at the end of such period. The
Quantity Dispensed shall only include Bulk API received and dispensed
in connection with commercial manufacturing of Finished Product and,
for certainty, shall not include any Bulk API 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.
QUANTITY CONVERTED: The total amount of Bulk API contained in the
Finished Products produced with the Quantity Dispensed, delivered by
Manufacturer, and not rejected or returned in accordance with Section
3.5 or recalled under Article 5 as a result of a failure by
Manufacturer to manufacture Finished Product that conforms to the
Manufacturer Manufacturing Responsibilities.
2.11.2 In addition, Manufacturer shall reconcile the
inventory of Bulk API held by Manufacturer on a [***] basis and shall provide a
report to Santarus concerning such reconciliation within ten (10) days following
the end of the applicable [***]. Within [***] days of the end of each six (6)
month period after the Commencement of Commercial Manufacturing, Manufacturer
shall calculate the "ACTUAL SIX-MONTH YIELD" or "ASY" for the Finished Product
during the six-month period, which ASY is the percentage of the Quantity
Dispensed that was converted to Finished Products and is calculated as follows:
Quantity Converted during the six-month period
Quantity Dispensed during the six-month period
2.11.3 After Manufacturer has produced a minimum of [***]
batches of Finished Product and has produced batches for at least [***] months
pursuant to this Agreement, the Parties will mutually agree on the target yield
(each, a "TARGET YIELD"). Thereafter, Manufacturer shall strive to maintain
Actual Six-Month Yield levels for each Finished Product
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respect to the omitted portions.
above the applicable Target Yield. If the Actual Six-Month Yield falls below the
respective Target Yield in any six month period, then Manufacturer shall
reimburse Santarus for the cost of the shortfall based on the following
calculation:
[***]
2.11.4 Manufacturer shall notify Santarus in writing in the
event that an amount in excess of [***] kilograms of Bulk API is damaged, lost
or otherwise rendered unusable (including to the extent contained in any
non-conforming Finished Product) at any one time (a "Significant API Loss") as
soon as practicable following such incident. In addition, and notwithstanding
any provision in this Section 2.11 to the contrary, Manufacturer shall reimburse
Santarus for such Bulk API within [***] days after discovery of the Significant
API Loss.
2.11.5 For the purposes of clarity, any Bulk API damaged,
lost or otherwise rendered unusable in connection with the Significant API Loss
shall be included in the calculation of the Quantity Dispensed and any amount
paid by Manufacturer in accordance with subsection 2.11.4 shall be credited
against the amount, if any, to be paid by Manufacturer to Santarus pursuant to
subsection 2.11.3.
2.12 COOPERATION AND QUARTERLY REVIEW. Each Party shall forthwith
upon execution of this Agreement designate those of its employees to be part of
the team responsible for managing the relationship between the parties (the
"RELATIONSHIP TEAM"). The Relationship Team from each Party shall meet in person
or by telephone or video conference not less than quarterly to review the
current status of the business relationship (including performance against the
KPIs as well as any additional manufacturing performance indicators established
by the Parites) and address any issues that have arisen.
ARTICLE 3
STANDARDS OF MANUFACTURE
3.1 FINISHED PRODUCT. Manufacturer hereby warrants and covenants
that all Finished Product manufactured and supplied to Santarus under this
Agreement: (a) shall have been manufactured, packaged, tested and stored in
compliance with the Specifications, GMP, Applicable Laws and the terms and
conditions of this Agreement and the Quality Agreement; (b) shall not be
adulterated, or misbranded within the meaning of the FFDCA or other Applicable
Laws as of the time that the Finished Product is transferred to the carrier at
Manufacturer's shipping point; and (c) will have been shipped to Santarus not
later than [***]days after the date of the product blend manufacture (unless any
delay in shipment beyond such [***] day period is due solely to a delay by
Santarus in conducting its review for the final release of the Finished
Product). The foregoing obligations are referred to in this Agreement as the
"MANUFACTURER MANUFACTURING RESPONSIBILITIES."
3.2 MANUFACTURING FACILITY. Manufacturer will manufacture Finished
Product at the Facility. Manufacturer shall not manufacture any Finished Product
in any other facility without first obtaining Santarus' prior written consent.
3.3 TESTING AND RELEASE BY MANUFACTURER. Manufacturer shall
conduct chemical identity testing for all Bulk API received at the Facility
within [***] days of such receipt.
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respect to the omitted portions.
Further, Manufacturer shall conduct full release testing of all Bulk API
received at the Facility not later than [***] months after the date of receipt
in accordance with the procedures and using the analytical testing methodologies
set forth in the Specifications and the Quality Agreement. Manufacturer shall
promptly (and in any event within five (5) days following completion of the
applicable testing) notify Santarus in writing of any failure of the Bulk API to
conform to the Specifications for same, and any other problem it may identify
with the Bulk API detected during the inspection and testing process. Prior to
shipping (or temporarily storing, if requested by Santarus) any order,
Manufacturer shall test each batch of Finished Product manufactured under this
Agreement, and Raw Materials used for such batch, for conformity with the
Specifications. Manufacturer shall conduct all such testing in accordance with
the procedures and using the analytical testing methodologies set forth in the
Specifications and the Quality Agreement. Manufacturer shall retain sufficient
quantities of all shipped Finished Product, Bulk API and Raw Materials to
perform at least full duplicate quality control testing. Retained repository
samples of all shipped Finished Product, Bulk API and Raw Materials shall be
maintained in a suitable storage facility until one (1) year after expiry or
such longer period as may be required by Applicable Laws. All such samples shall
be available for inspection and testing by Santarus at reasonable intervals upon
reasonable notice. Santarus shall be responsible, at all times, for the final
release of the Finished Product, and Manufacturer shall not ship any Finished
Product until Santarus has completed its final release. Upon prior written
consent from Santarus, Manufacturer may arrange for subcontractors to perform
specific testing services for Raw Materials arising under this Agreement;
provided that (a) all such subcontractors shall be duly qualified by
Manufacturer under GMP and Applicable Laws to perform such testing; (b)
Manufacturer shall at all times remain fully responsible to Santarus for the
performance of all obligations hereunder related to such subcontracted testing
services; and (c) no subcontractors shall be utilized in connection with release
testing of the Finished Product.
3.4 STABILITY STUDIES. Manufacturer shall conduct stability
studies on the Finished Products according to the Specifications therefor, as
required by the FDA or Foreign Regulatory Authorities as advised by Santarus or
as requested by Santarus, and in any case on at least one batch of Finished
Product from the Facility at least once per calendar year following Commencement
of Commercial Manufacturing or more frequently as may be specified in the
Quality Agreement. Manufacturer shall provide to Santarus a report of all
results and data obtained from such stability studies annually or more
frequently as may be specified in the Quality Agreement. Santarus will reimburse
Manufacturer for the execution of the requested stability studies and the
preparation of reports based upon a mutually agreed upon (in writing) cost
schedule.
3.5 ACCEPTANCE PROCEDURES.
3.5.1 Finished Product Claims. Santarus has the right to
reject any portion of any shipment of Finished Products that deviates from the
Manufacturer Manufacturing Responsibilities, without invalidating any remainder
of such shipment. Santarus or its agent shall visually inspect the Finished
Products manufactured by Manufacturer upon receipt thereof and shall give
Manufacturer written notice (a "DEFICIENCY NOTICE") of all claims for Finished
Products that deviate from the Manufacturer Manufacturing Responsibilities
within [***] days after Santarus' receipt thereof (or, in the case of any
defects not reasonably susceptible to discovery upon receipt by visual
inspection of the Finished Product, including those requiring
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respect to the omitted portions.
laboratory analysis, within [***] days after discovery thereof by Santarus).
Should Santarus fail to provide Manufacturer with the Deficiency Notice within
the applicable [***] -day period, then the delivery shall be deemed to have
been accepted by Santarus on the [***] day after delivery or discovery, as
applicable.
3.5.2 Determination of Deficiency. Upon receipt of a
Deficiency Notice, Manufacturer shall have [***] to advise Santarus by notice in
writing that it disagrees with the contents of such Deficiency Notice. If
Santarus and Manufacturer fail to agree within [***] after the Santarus' receipt
of Manufacturer's notice as to whether any Finished Products identified in the
Deficiency Notice deviate from the Manufacturer Manufacturing Responsibilities,
then the Parties shall mutually select an independent laboratory to evaluate if
the Finished Products deviate from the Manufacturer Manufacturing
Responsibilities. Such evaluation shall be binding on the Parties, and if such
evaluation certifies that any Finished Products deviate from the Manufacturer
Manufacturing Responsibilities, Santarus may reject those Finished Products in
the manner contemplated in this Section 3.5. If such evaluation does not so
certify in respect of any such Finished Products, then Santarus shall be deemed
to have accepted delivery of such Finished Products on the [***] day after
delivery (or, in the case of any defects not reasonably susceptible to discovery
upon receipt by visual inspection of the Finished Product, including those
requiring laboratory analysis, on the [***] day after discovery thereof by
Santarus). The expenses of such testing shall be borne by Manufacturer if the
non-conformity with the Manufacturer Manufacturing Responsibilities is
confirmed, and otherwise by Santarus.
3.5.3 Manufacturer Responsibility. In the event Santarus
rejects Finished Products in accordance with this Section 3.5 and the rejected
Finished Product is determined not to conform to the Manufacturer Manufacturing
Responsibilities, Manufacturer will credit Santarus' account for Manufacturer's
invoice price to Santarus for such non-conforming Finished Products. If Santarus
shall have previously paid for such defective Finished Products, Manufacturer
shall promptly, at Santarus' election, either: (i) refund the invoice price for
such defective Finished Products; (ii) offset such amount against other amounts
due to Manufacturer hereunder; or (iii) use its best efforts to replace such
Finished Products with conforming Finished Products as soon as reasonably
possible without Santarus being liable for payment therefor under Section 6.3.
Further, Manufacturer shall reimburse Santarus for all reasonable shipping,
handling and storage charges incurred in association with such non-conforming
Finished Product and for the Bulk API utilized in such non-conforming Finished
Product in accordance with Section 2.11. Nothing in this Section 3.5.3 shall be
construed to limit the rights and remedies available to Santarus at law or in
equity.
3.6 SPECIFICATION AMENDMENTS.
3.6.1 Cooperation. Subject to Section 3.6.4, the Parties
shall cooperate with each other to amend or supplement the Specifications to the
extent necessary to comply with changes in GMP, Applicable Laws or other
requirements of Government Authorities. If an amendment to the Specifications
requires FDA approval and/or the approval of a Foreign Regulatory Authority,
Manufacturer shall not implement such change unless and until the necessary
approval has been obtained by Santarus in writing. In no event shall
Manufacturer implement any other modification or addition to the Specifications,
including without limitation, changes in raw materials, equipment or methods of
production or testing for the Finished
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Product, without the prior written consent of Santarus, which consent may be
withheld for any or no reason.
3.6.2 Santarus' Request for Change. Subject to Section
3.6.4, Santarus shall have the right to amend the Specifications from time to
time.
3.6.3 Manufacturer's Request for Change. Subject to Section
3.6.4, if Manufacturer wishes to make any change to the Specifications,
Manufacturer shall notify Santarus, and such notice shall describe the proposed
change and the impact of such change on the manufacturing process, including
details of any changes in manufacturing costs. Santarus may accept or reject, in
its sole and absolute discretion, any such change proposed by Manufacturer.
3.6.4 Price Adjustments. Amendments to the Specifications
or the Quality Agreement requested by Santarus will only be implemented
following a technical and cost review in good faith by Manufacturer and are
subject to Santarus and Manufacturer reaching agreement as to revisions, if any,
to the Price specified in Exhibit B necessitated by any such amendment. If
Santarus accepts a proposed Price change, the proposed change in the
Specifications shall be implemented, and the Price change shall become effective
only with respect to those orders of Finished Products that are manufactured in
accordance with the revised Specifications.
3.7 RECORDS. Manufacturer shall maintain all records necessary to
comply with all GMP and Applicable Laws relating to the manufacture, packaging,
testing, storage and shipment of Finished Product. All such records shall be
maintained for such period as may be required by Applicable Laws; provided,
however, that all records relating to the manufacture, stability and quality
control of each batch of Finished Product shall be retained until the Parties
agree in writing to dispose of such records.
3.8 AUDIT. Upon reasonable prior notice and at reasonable
intervals, Manufacturer shall allow Santarus and its representatives to inspect
Manufacturer's books and records relating to the manufacture of the Finished
Product and permit Santarus to access Manufacturer's facilities used to
manufacture the Finished Product for the purposes of (a) making quality
assurance audits of the facilities and of the procedures and processes used by
Manufacturer in manufacturing, packaging, testing, storing and shipping Finished
Product, and (b) confirming Manufacturer's compliance with this Agreement,
provided that a Manufacturer representative is present during any such
inspection. Santarus, or its representative(s), shall conduct such audit during
normal business hours at a time on which the Parties have mutually agreed, and
in such a manner that does not unreasonably interfere with Manufacturer's normal
business activities.
ARTICLE 4
REGULATORY MATTERS AND QUALITY CONTROL
4.1 COMPLIANCE BY MANUFACTURER. Manufacturer shall remain in
compliance with all Applicable Laws, including GMP, at all times during the Term
and, without limiting the generality of the foregoing, maintain a quality
control program consistent with GMP as required
by the FDA, and to the extent the parties have reached agreement pursuant to
Section 2.10 with respect to countries in addition to the Territory, the
applicable Foreign Regulatory Authorities.
4.2 SANTARUS' REGULATORY RESPONSIBILITY. Santarus shall be
responsible for obtaining and maintaining all regulatory filings and approvals
(excluding the overall licensure and permitting of the Facility) for the
manufacture and marketing of the Finished Product, including without limitation
all INDA's and NDA's for the Finished Product. Santarus shall control and own
all such filings and approvals. Manufacturer will supply to Santarus from time
to time, all such data relating to the Finished Product, including release test
results, complaint test results, all investigations (in manufacturing, testing
and storage), and the like, that Santarus reasonably requires in order to
complete any such filing or approval, including any annual product review report
that Santarus is required to file with the FDA and as provided in the Quality
Agreement. At Santarus' request, Manufacturer may prepare annual product review
reports on behalf of Santarus and in accordance with Santarus' instructions.
Santarus will compensate Manufacturer for the preparation of annual product
review reports based upon a mutually agreed upon (in writing) cost schedule.
4.3 MANUFACTURING PROCESS. If any process event occurs during the
manufacturing of any Finished Product, which event is likely materially to
affect the safety, efficacy or regulatory status of the Finished Product, then
Manufacturer shall promptly notify Santarus. Further, Manufacturer shall fully
and appropriately investigate and report to Santarus on all complaints and
notices of quality issues concerning the Finished Products from the FDA, any
Foreign Regulatory Authority or Government Authority of which Santarus shall
have given Manufacturer notice. Santarus and Manufacturer shall consult with
each other as to the disposition of all affected batches of such Finished
Product. Manufacturer shall report to Santarus in writing any other atypical
process event that is unlikely to materially affect the safety, efficacy or
regulatory status of the Finished Product within a reasonable time after
occurrence. No Bulk API or Finished Product may be reprocessed without the prior
written consent of Santarus.
4.4 COMMUNICATIONS. Each party may communicate with the FDA or any
Foreign Regulatory Authority or Government Authority regarding the Finished
Products if such communication is necessary to comply with the terms of this
Agreement or the requirements of any Applicable Law, governmental order or
regulation; provided, however, in the event such requirement applies to
Manufacturer, Manufacturer shall notify Santarus in writing of the requirement
and pending communication and, unless there is a legal prohibition against doing
so, Manufacturer shall permit Santarus to accompany Manufacturer and take part
in any communications with the FDA or any Foreign Regulatory Authority or
Government Authority, and to receive copies of all such communications to and
from the FDA or any Foreign Regulatory Authority or Government Authority.
4.5 GOVERNMENT INSPECTION.
4.5.1 Manufacturer shall make its internal practices, books
and records relating to its manufacture of the Finished Product available and
allow access to all facilities used for manufacturing the Finished Product to
the FDA, any Foreign Regulatory Authority and any other
Government Authority having jurisdiction over the manufacture of the Finished
Product for the purposes of determining Manufacturer's compliance with GMP and
Applicable Laws.
4.5.2 Manufacturer agrees to advise Santarus by telephone
and facsimile immediately of any proposed or announced visit or inspection (and
shall permit Santarus to be onsite at any such visit or inspection), and as soon
as possible but in any case on the same business day of any unannounced visit or
inspection, by the FDA, any Foreign Regulatory Authority or any other Government
Authority relating to the Finished Product. Manufacturer shall provide Santarus
with a reasonable description in writing of each such visit or inspection
promptly (but in no event later than five (5) calendar days) thereafter, and
with copies of any letters, reports or other documents (including form 483's)
issued by any such authorities that relate to the Finished Product. Santarus may
review Manufacturer's responses to any such reports and communications, and
Santarus' comments and suggestions shall be incorporated into such response.
4.5.3 If the FDA or any other Foreign Regulatory Authority
or any other Government Authority conducts an inspection of the Facility in
circumstances that are not related to the manufacturing of the Finished Product
(as contemplated by subsection 4.5.2 above) and issues a 483 observation,
inspection report or other formal or informal document in respect of such
inspection which questions Manufacturer's compliance with critical or major GMP
standards relating to operations at the Facility which is otherwise could have
an adverse impact on the Finished Product then Manufacturer shall notify
Santarus promptly (but in no event later than five (5) calendar days) after
Manufacturer receives a written copy of such observation, report or document.
4.5.4 Manufacturer shall keep Santarus informed of (i) the
remediation plan Manufacturer adopts to alleviate any concerns raised by the FDA
or any other Foreign Regulatory Authority contemplated by Sections 4.5.2 or
4.5.3, (ii) progress in implementing the remediation plan and (iii) the formal
responses of the FDA or applicable Foreign Regulatory Authority to such
remediation plan and its implementation.
4.6 ENVIRONMENTAL AND OTHER LAWS AND REGULATIONS. In carrying out
its obligations under this Agreement, Manufacturer shall comply with all
applicable environmental and health and safety laws (current or as amended or
added), and shall be solely responsible for determining how to comply with same
in carrying out these obligations. Notwithstanding the foregoing, nothing
provided to Manufacturer by Santarus, by way of materials, specifications,
processing information or otherwise, is meant to diminish Manufacturer's
responsibility for such compliance. Manufacturer shall obtain and maintain all
necessary licenses, permits and governmental approvals (except for
product-related Regulatory Approvals such as NDA's) required to perform its
manufacturing and supply services hereunder, including licensure and permitting
of its manufacturing facilities by the FDA and Foreign Regulatory Authorities.
Manufacturer shall promptly notify Santarus of any circumstances, including the
receipt of any notice, warning, citation, finding, report or service of process
or the occurrence of any release, spill, upset, or discharge of hazardous
substances (as may be defined under Applicable Laws) relating to Manufacturer's
compliance with this Section 4.6 and which relates to the manufacture of
Finished Product. Santarus reserves the right to conduct an environmental
inspection of the Facility, at reasonable intervals during normal business hours
and with reasonable advance
notice, for the purpose of determining compliance with this Section 4.6. Such
inspection shall not relieve Manufacturer of its obligation to comply with all
applicable environmental and health and safety laws and does not constitute a
waiver of any right otherwise available to Santarus.
4.7 END-USER INQUIRIES AND COMPLAINTS. Subject to Manufacturer's
obligation to report certain information on a more expedited basis in respect of
Adverse Experiences as described in Section 5.1 below, Manufacturer shall notify
and refer to Santarus, within three (3) Business Days after receipt, all
communications from end-users of the Finished Product, including without
limitation, inquiries regarding the Finished Product and its uses, and
complaints, comments and suggestions regarding the Finished Product and its
effects on users. Santarus shall have the sole right to respond to all such
communications and Manufacturer shall provide to Santarus reasonable cooperation
and assistance in effecting such responses.
ARTICLE 5
ADVERSE EVENTS; RECALL
5.1 ADVERSE EXPERIENCE REPORTING. Manufacturer shall notify
Santarus promptly and not later than twenty-four (24) hours after it becomes
aware of (a) any information concerning any potentially serious or unexpected
side effect, injury, toxicity or sensitivity reaction or any unexpected
incidence or other adverse experience (an "ADVERSE EXPERIENCE") and the severity
thereof associated with the use of the Finished Product, whether or not
determined to be attributable to the Finished Product; or (b) any information
regarding any pending or threatened action which may affect the safety or
efficacy claims of the Finished Product or the continued marketing of the
Finished Product in any nation or jurisdiction. Further and without limiting the
foregoing, Manufacturer shall notify Santarus by telephone and facsimile within
twenty-four (24) hours after Manufacturer first becomes aware of any serious
Adverse Experience that gives cause for concern or is unexpected or that is
fatal, life-threatening (as it occurred), permanently disabling, requires (or
prolongs) inpatient hospitalization, represents a significant hazard, or is a
cancer or a congenital anomaly or represents an overdose, or any other
circumstance that might necessitate a recall, expedited notification of FDA or
any other relevant Government Authorities or a significant change in the label
of the Finished Product, including, without limitation, information concerning
any incident that causes Finished Product shipped to Santarus or its labeling to
be mistaken for or, applied to, another product, information concerning any
bacteriological contamination, or any significant chemical, physical, or other
change or deterioration in the Finished Product shipped to Santarus, or any
failure of one or more batches of Finished Product shipped to Santarus to meet
Specifications or to conform with Applicable Laws, and any deviation from the
specified environmental conditions for shipping or storage of the Finished
Product. To the extent that Santarus becomes aware of any Adverse Experience
that appears to be related to the manufacture of Finished Product, Santarus
shall notify Manufacturer promptly and not later than twenty-four (24) hours
after Santarus becomes aware of such Adverse Experience. In connection with any
such Adverse Experience, each Party shall make such reports as are necessary to
comply with Applicable Laws, at its sole expense. Further, in the event a Party
(or its Affiliates) receives a communication or directive from a Government
Authority commencing or threatening seizure of Finished Product, or other
removal from the market of Finished Product, such Party shall transmit such
information to the other Party within twenty-four (24) hours of receipt.
5.2 NOTIFICATION AND RECALL. The handling of recalls and
withdrawals of Finished Products shall be within the sole discretion of
Santarus, unless otherwise required by Applicable Laws. If any Government
Authority issues or requests a recall or takes similar action in connection with
Finished Product, or if Santarus determines that an event, incident or
circumstance has occurred which may reasonably result in the need for a recall
or market withdrawal (collectively, "RECALLS"), Santarus shall, within twenty
four (24) hours, advise Manufacturer thereof by telephone or facsimile, after
which the Parties shall promptly discuss and work together to effect an
appropriate course of action. Notification to FDA (or such other Foreign
Regulatory Authority or Government Authority) and conducting such Recall shall
be the responsibility of Santarus. Manufacturer shall (a) cooperate fully with
Santarus in the event of any such Recall, withdrawal and/or related disposition
of any affected Finished Products in Manufacturer's possession and (b) provide
such assistance in connection therewith as Santarus may reasonably request.
5.3 RECALL EXPENSE. [***] Nothing in this Section 5.3 shall be
construed to limit the rights and remedies available to Santarus at law or in
equity.
ARTICLE 6
COMPENSATION; PAYMENT
6.1 PRICE OF FINISHED PRODUCT. The Price includes all Raw
Materials, manufacturing, packaging, testing and temporary storing costs
associated with manufacturing and supplying the Finished Product, and includes
the costs of such quality control measures as required by the Specifications and
the Quality Agreement. The cost of the Bulk API shall form no part of the Price.
The costs of shipping, handling, insurance and freight will be borne by Santarus
and form no part of the Price.
6.2 CHANGES IN PRICE OF FINISHED PRODUCT. [***]
In connection with a Price review pursuant to clause (a) of this
Section 6.2, Manufacturer shall deliver to Santarus reasonably detailed
documentation concerning increases or decreases in the cost of Raw Materials or
Manufacturer's cost of manufacturing to facilitate the discussion. In connection
with all fee adjustment requests pursuant to clause (b) of this Section 6.2,
Manufacturer shall deliver to Santarus a revised Exhibit B and such budgetary
pricing information or other documentation reasonably sufficient to demonstrate
that a Price adjustment is justified. Each of Santarus and Manufacturer shall
forthwith use all reasonable efforts to agree on a revised Price in respect of
each affected Finished Product. In the event the Parties are unable to reach
agreement concerning adjustments to the Price, such dispute shall be resolved in
accordance with Article 13. Until such time as dispute is resolved the price per
Finished Product shall be the most current mutually agreed upon Price.
6.3 PAYMENT TERMS. Santarus shall pay Manufacturer for the
Finished Product shipped to Santarus within [***] pursuant to Section 2.6.
Manufacturer shall send all invoices by email or facsimile to the email address
or facsimile number of the accounts payable personnel designated by Santarus
from time to time. All invoices shall be dated as of the date of the email or
facsimile as noted in the foregoing sentence, and not any earlier date.
Manufacturer's invoice shall reference the Purchase Order number and be sent to
the "Xxxx to" address of Santarus
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specified on the Purchase Order, and Manufacturer's packing list must reference
the Purchase Order number and be sent to the applicable "Ship to" address on the
Purchase Order. Santarus may withhold a portion of any invoice that it disputes
in good faith pending resolution of such dispute.
6.4 FORM OF PAYMENT. Each Party shall make all payments due the
other Party under this Agreement in U.S. Dollars by check made payable to the
order of the other Party or by wire transfer of immediately available funds to
such account notified by the receiving Party from time to time to the other
Party in writing.
6.5 INTENTIONALLY OMITTED.
6.6 DISPUTED INVOICES. In the event that Santarus disputes any
amounts under any invoice for Finished Product supplied by Manufacturer, such
dispute shall be resolved in accordance with Section 3.5 (with respect to
non-conformance of Finished Product) or otherwise under Article 13. Pending
resolution of such dispute, Santarus shall be obligated to pay any amounts under
such invoice that are not in dispute. Upon resolution of any such dispute in
favor of Manufacturer, Santarus shall pay all remaining amounts owing under such
invoice within [***] Business Days after such resolution.
ARTICLE 7
RAW MATERIALS
7.1 PURCHASE OF RAW MATERIALS. Except for the Bulk API which will
be supplied to Manufacturer by Santarus, Manufacturer shall purchase all
packaging components (including labels, product inserts and other labeling for
the Finished Product), raw materials and other ingredients for the manufacture
of the Finished Product (collectively, "RAW MATERIALS"). Any obligation that
Santarus may have under this Agreement to purchase or reimburse Manufacturer for
expired or obsolete Raw Materials shall in no event extend beyond a [***] month
supply of such Raw Materials based on the most recent Forecast. Manufacturer
shall utilize and manufacture all Raw Materials and Bulk API on a first-in,
first-out basis.
7.2 STORAGE OF BULK API AND RAW MATERIALS. Manufacturer shall
store the Bulk API and Raw Materials at Manufacturer's storage facility at the
Facility with due care and attention to the requirements set forth in the
Specifications and in accordance with GMP and Applicable Laws so as to protect
such materials from loss or damage. While the Bulk API and the Raw Materials are
in storage, Manufacturer shall assume the risk of loss or damage to such
materials from any cause whatsoever. Manufacturer shall ensure that, while such
Bulk API is in storage, such materials do not become subject to any lien or
other security interest securing any obligation owed or alleged to be owed by
Manufacturer to any person or entity.
7.3 SANTARUS' RESPONSIBILITY FOR COST OF RAW MATERIALS. If Raw
Materials become obsolete or otherwise no longer useable in the manufacturing
process for the Finished Product because (a) Santarus deviated from the
Forecast, or (b) the Specifications have been changed pursuant to Section 3.6,
Manufacturer shall use its commercially reasonable efforts to cover the cost of
excess Raw Materials by: (i) returning such Raw Materials to the vendor, (ii)
selling such Raw Materials, (iii) utilizing such Raw Materials in manufacturing
products for its other
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customers to the extent possible, and (iv) implementing other measures to
mitigate the loss due to such excess Raw Materials. To the extent that
Manufacturer is unable to off-set such loss fully, Santarus shall reimburse
Manufacturer for such Raw Materials but solely to the extent actually incurred
by Manufacturer and in no event beyond the limit of liability set forth in
Section 7.1.
7.4 MANUFACTURER'S RESPONSIBILITY FOR COST OF RAW MATERIALS. In
the event Raw Materials expire or become obsolete or no longer useable in the
manufacturing process for the Finished Product because (a) Manufacturer failed
to manufacture and supply the quantities ordered by Santarus pursuant to a
Purchase Order, (b) quantities of such Raw Materials are in excess of the limits
of Santarus' liability set forth in Section 7.1, or (c) Manufacturer failed to
store Raw Materials as required by the applicable Specifications or under
Section 7.2, then Manufacturer shall bear all responsibility for the cost of
such Raw Materials.
ARTICLE 8
CONFIDENTIALITY
8.1 CONFIDENTIALITY; EXCEPTIONS. The Parties agree that, for the
Term and for [***] thereafter (other than for trade secrets, for which the
confidentiality obligations set forth herein shall last as long as trade secret
law shall allow), all non-public, proprietary or "confidential" disclosures,
know-how, data, and technical, financial and other information of any nature
whatsoever (collectively, "CONFIDENTIAL INFORMATION"), disclosed or submitted,
either orally or in writing (including, without limitation, by electronic means)
or through observation, by one Party (the "DISCLOSING PARTY") to the other Party
(the "RECEIVING PARTY") hereunder, including, without limitation, the terms of
this Agreement, shall be received and maintained by the Receiving Party in
strict confidence, shall not be used for any purpose other than the purposes
expressly contemplated by this Agreement, and shall not be disclosed to any
Third Party (including, without limitation, in connection with any publications,
presentations or other disclosures). Notwithstanding the foregoing, Santarus may
disclose on a need-to-know basis the existence of this Agreement and the terms
hereof to any bona fide potential acquirers, corporate partners, investors or
financial advisors. The Receiving Party will promptly notify the Disclosing
Party upon discovery of any unauthorized use or disclosure of the Disclosing
Party's Confidential Information. Confidential Information belongs to and shall
remain the property of the Disclosing Party.
8.2 EXCEPTIONS. The provisions of this Article 8 shall not apply
to any information of the Disclosing Party which can be shown by competent
evidence by the Receiving Party:
8.2.1 To have been known to or in the possession of the
Receiving Party prior to the date of its actual receipt from the Disclosing
Party;
8.2.2 To be or to have become readily available to the
public other than through any act or omission of any Party in breach of any
confidentiality obligations owed to the Disclosing Party;
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8.2.3 To have been disclosed to the Receiving Party, other
than under an obligation of confidentiality, by a Third Party which had no
obligation to the Disclosing Party not to disclose such information to others;
or
8.2.4 To have been subsequently independently developed by
the Receiving Party without use of or reference or access to the Disclosing
Party's Confidential Information.
8.3 AUTHORIZED DISCLOSURE. The Receiving Party may disclose the
Disclosing Party's Confidential Information hereunder solely to the extent (a)
approved by the Disclosing Party; or (b) the Receiving Party is legally required
to disclose such Confidential Information, provided, however, that prior to any
such required disclosure, the Receiving Party will, except where impracticable,
give reasonable advance notice to the Disclosing Party of such disclosure (so
that the Disclosing Party may seek a protective order and or other appropriate
remedy or waive compliance with the confidentiality provisions of this Article)
and will use its reasonable efforts to secure confidential treatment of such
Confidential Information required to be disclosed.
8.4 RETURN OF CONFIDENTIAL INFORMATION. The Receiving Party shall
keep the Disclosing Party's Confidential Information in appropriately secure
locations. Upon the expiration or termination of this Agreement or at any time
upon the Disclosing Party's request, the Receiving Party shall destroy or return
to the Disclosing Party, at the Disclosing Party's written request, all
Confidential Information belonging to the Disclosing Party possessed by the
Receiving Party, or its officers, directors, employees, agents and consultants;
provided however that a Receiving Party may retain one (1) copy of the
Disclosing Party's Confidential Information in an appropriately secure location,
which by Applicable Laws it must retain, for so long as such Applicable Laws
require such retention but thereafter shall dispose of such retained
Confidential Information in accordance with Applicable Laws or this Section 8.4.
8.5 EQUITABLE RELIEF. The Receiving Party agrees that, due to the
unique nature of the Confidential Information, the unauthorized disclosure or
use of the Confidential Information of the Disclosing Party may cause
irreparable harm and significant injury to the Disclosing Party, the extent of
which may be difficult to ascertain and for which there may be no adequate
remedy at law. Accordingly, the Receiving Party agrees that the Disclosing
Party, in addition to any other available remedies, shall have the right to seek
an immediate injunction and other equitable relief enjoining any breach or
threatened breach of this Agreement. The Receiving Party shall notify the
Disclosing Party in writing immediately upon the Receiving Party's becoming
aware of any such breach or threatened breach.
ARTICLE 9
INTELLECTUAL PROPERTY MATTERS
9.1 OWNERSHIP OF INTELLECTUAL PROPERTY.
Manufacturer agrees that Santarus shall own all right, title
and interest in and to all Inventions, and any intellectual property rights
(including patent rights and trade secret rights) therein, covering: (a)
Santarus' Finished Product, the Specifications therefor and the uses thereof;
and (b) any method of manufacture directly and solely related to the Finished
Product, regardless of whether such Invention was conceived, reduced to practice
or created solely by
employees or agents of Manufacturer or its Affiliates or jointly by the
employees or agents of Santarus or its Affiliates with the employees or agents
of Manufacturer or its Affiliates (collectively, the "PRODUCT INVENTIONS"). As
to all Inventions other than Product Inventions, including without limitation,
those Inventions relating to manufacturing process innovations that are
generally applicable to the manufacture of drug compounds and not solely to the
manufacture of the Finished Product (collectively, the "OTHER INVENTIONS"), the
parties agree that the following shall apply:
(i) All Other Inventions, which are conceived, reduced to
practice, or created solely by employees or agents of Manufacturer or
its Affiliates in the course of performing the services under this
Agreement (including any pre-existing technology of Manufacturer which
Manufacturer so employs), shall be owned by Manufacturer. Manufacturer
shall and hereby does grant to Santarus and its Affiliates a perpetual,
royalty-free, exclusive, worldwide, irrevocable license, to use and
practice all such Manufacturer-owned Other Inventions to manufacture
and have manufactured the Finished Products and to use, import, offer
to sell, and sell the same, with full right to sublicense to any Third
Party in connection with the manufacture, sale or distribution of the
Finished Product.
(ii) All Other Inventions which are conceived, reduced to
practice, or created by employees or agents of Santarus or its
Affiliates (including any pre-existing technology of Santarus which
Santarus shares with Manufacturer hereunder), shall be owned by
Santarus. Santarus shall and hereby does grant to Manufacturer and its
Affiliates a royalty-free, non-exclusive license during the Term,
without the right to sublicense, to use and practice all such
Santarus-owned Other Inventions solely to manufacture the Finished
Products hereunder.
(iii) All Other Inventions which are conceived, reduced to
practice, or created jointly by: (i) employees or agents of Santarus or
its Affiliates; and by (ii) employees or agents of Manufacturer or its
Affiliates, pursuant to this Agreement, shall be owned by Santarus,
unless the parties have agreed in writing to a different arrangement in
another consulting or services agreement which is more specific to the
services provided by Manufacturer in connection with such Other
Invention. Santarus shall and hereby does grant to Manufacturer and its
Affiliates a perpetual, royalty-free, non-exclusive, worldwide,
irrevocable license to use and practice all such Santarus-owned Other
Inventions, with the right to sublicense to any Third Party.
9.2 ASSIGNMENT. Each Party agrees to disclose promptly in writing
to the other all Product Inventions and Other Inventions to be owned by the
other pursuant to Section 9.1 and hereby irrevocably transfers, conveys and
assigns, and agrees to transfer, convey and assign, to the other, its successors
and assigns, without reservation or additional consideration, all of its right,
title and interest (anywhere in the world) in, to, and under the Product
Inventions and Other Inventions, whether currently existing or created or
developed later, including, without limitation, all copyrights, trademarks,
trade secrets, patent rights, industrial rights and all other intellectual
property and proprietary rights related thereto, including all rights to
protect, enforce (whether for past, present or future infringement), defend and
exploit such Product Inventions
and Other Inventions and collect and retain all proceeds therefrom, effective
immediately upon the inception, conception, creation or development thereof.
9.3 ASSISTANCE. Each Party shall have the first right to file and
prosecute patent applications in respect of those Inventions it is to own
pursuant to Section 9.1 and such Party shall be solely responsible for the costs
of filing, prosecution and maintenance of such patents and patent applications.
Each Party agrees to cooperate with the other or its designee(s), both during
and after the Term, in applying for, obtaining, perfecting, evidencing,
sustaining and enforcing the other's right, title and interest in and to the
Product Inventions and Other Inventions, including, without limitation,
executing such written instruments as may be prepared by the other and doing
such other acts as may be necessary in the opinion of the other to obtain a
patent, register a copyright, or otherwise enforce the other's rights in such
Product Inventions and Other Inventions (and each Party hereby irrevocably
appoints the other and any of its officers and agents as its attorney in fact to
act for and on the other's behalf and instead of it, with the same legal force
and effect as if executed by it). Each Party hereby represents, warrants, and
covenants that all employees, consultants and agents performing services for it
hereunder have assigned in writing all of their right, title and interest in, to
and under any and all Product Inventions and Other Inventions to such Party. All
Product Inventions and Other Inventions and embodiments thereof shall be deemed
to be Confidential Information of the Party to own such Invention pursuant to
Section 9.1, and the other Party shall be subject to the obligations of nonuse
and nondisclosure under Article 8 with respect thereto.
ARTICLE 10
REPRESENTATIONS, WARRANTIES AND COVENANTS
10.1 REPRESENTATIONS AND WARRANTIES OF THE PARTIES. Each Party
represents, warrants and covenants to the other Party that:
10.1.1 such Party is duly organized and validly existing and
in good standing under the laws of the jurisdiction of its formation;
10.1.2 such Party has the full corporate power and is duly
authorized to enter into, execute and deliver this Agreement, and to carry out
and otherwise perform its obligations thereunder;
10.1.3 this Agreement has been duly executed and delivered
by, and is a legal and valid obligation binding upon such Party and the entry
into, the execution and delivery of, and the carrying out and other performance
of its obligations under this Agreement by such Party (a) does not conflict
with, or contravene or constitute any default under, any agreement, instrument
or understanding, oral or written, to which it is a party, including, without
limitation, its certificate of incorporation or by-laws, and (b) does not
violate Applicable Law or any judgment, injunction, order or decree of any
Government Authority having jurisdiction over it; and
10.1.4 in connection with its performance under this
Agreement, it shall comply with all Applicable Laws.
10.2 ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF
MANUFACTURER. In addition to representations and warranties set forth elsewhere
in this Agreement, Manufacturer further represents, warrants to, and covenants
with, Santarus that:
10.2.1 At all times during the Term, all parts of the
Facility that are directly associated with the testing and storage of the Bulk
API and Raw Materials and the manufacturing, packaging, testing and storage of
the Finished Products shall remain in compliance with all Applicable Laws, and
all other parts of the Facility shall remain, in all material respects, in
compliance with all Applicable Laws.
10.2.2 Manufacturer shall obtain and maintain all necessary
licenses, permits or approvals required by Applicable Laws in connection with
the manufacture, packaging, testing and storage of the Finished Product,
including, without limitation, permits related to manufacturing facilities;
10.2.3 Manufacturer's manufacturing facilities are in
compliance with GMP;
10.2.4 Manufacturer has disclosed to Santarus any and all
form 483's, warning letters or similar notices relating to its Facility and
import alerts for any other products manufactured in such Facility issued during
the last five (5) years;
10.2.5 Title to all the Finished Product sold hereunder,
upon payment thereof by Santarus as provided herein, shall pass to Santarus free
and clear of any security interest, lien or other encumbrance;
10.2.6 Throughout the Term, Manufacturer has, and shall
maintain, sufficient facilities, resources, and a work force suitably qualified
and trained to meet its obligations to supply the Finished Product to Santarus
pursuant to this Agreement;
10.2.7 The contributions of Manufacturer to the manufacture
of the Finished Product in accordance with this Agreement do not infringe any
Third Party rights (including, without limitation, any intellectual property
rights) anywhere in the world;
10.2.8 Manufacturer is not aware of any pending or
threatened claims against Manufacturer asserting that any of the activities of
Manufacturer relating to the manufacture, import, use, or sale of pharmaceutical
products, or the conduct of the activities contemplated herein by Santarus,
infringe, misappropriate, or violate the rights of any Third Party; and
10.2.9 Manufacturer shall ensure all employees, consultants,
subcontractors and agents performing services for Manufacturer hereunder assign
in writing to Manufacturer all of their right, title and interest in, to and
under any and all Inventions.
10.2.10 It nor any of its employees, consultants,
subcontractors and agents performing services for Manufacturer hereunder is (1)
under investigation by the FDA for debarment action, (2) presently debarred
under the regulations of the FDA, or (3) presently debarred pursuant to the
Generic Drug Enforcement Act of 1992 (21 U.S.C. '301 et seq.).
10.4 DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
THE PARTIES MAKE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EITHER
EXPRESS OR IMPLIED, WRITTEN OR ORAL, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED
WARRANTY OF MERCHANTABILITY, WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, OR
WARRANTY OF NON-INFRINGEMENT.
ARTICLE 11
TERM AND TERMINATION
11.1 TERM. This Agreement shall commence as of the Effective Date
and shall continue in full force for a period of four (4) years from the
Commencement of Commercial Manufacturing, unless earlier terminated in
accordance with the terms and conditions of this Article 11 (the "INITIAL
TERM"). After the Initial Term, this Agreement shall continue in force for an
indefinite duration (the "RENEWAL TERM"); provided that either Party may
terminate this Agreement at any time during the Renewal Term by providing the
other Party with eighteen (18) months prior written notice of termination.
11.2 TERMINATION FOR CAUSE. In the event that either Party has
failed to remedy a material breach of any of its representations, warranties or
other obligations under this Agreement within [***] (the "REMEDIATION PERIOD")
following receipt of a written notice thereof (the "Breach Notice") from the
other Party that expressly states that it is a notice under this Section 11.2,
the non-breaching party may terminate this Agreement upon written notice to the
other Party (the "Termination Notice"). For the avoidance of doubt, a material
breach of the Quality Agreement shall be deemed to be a breach of this Agreement
for the purpose of determining the rights of the Parties to terminate this
Agreement.
11.3 TERMINATION FOR BANKRUPTCY. Either Party may terminate this
Agreement immediately if the other Party becomes insolvent, makes a general
assignment for the benefit of creditors, suffers or permits the appointment of a
receiver for its business or assets, avails itself of or becomes subject to any
petition or proceeding under any statute of any state or country relating to
insolvency or the protection of the rights of creditors.
11.4 REGULATORY PROCEEDINGS. Santarus may terminate this Agreement
effective immediately upon written notice to Manufacturer should the FDA or a
Foreign Regulatory Authority having jurisdiction impose on the Facility an
import ban in respect of the Finished Product or withdraw any license required
by Manufacturer to manufacture the Finished Product at the Facility or take
other action that is reasonably likely to have a material adverse impact on
Manufacturer's ability to perform hereunder.
11.5 GOVERNMENT ACTION. Santarus may terminate this Agreement
effective immediately in the event that any governmental agency (including
without limitation, the FDA or a Foreign Regulatory Authority) takes any action,
or raises any objection, that prevents Santarus from importing, exporting,
purchasing, or selling the Finished Product or otherwise makes such activity
unlawful.
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respect to the omitted portions.
11.6 TERMINATION FOR DISCONTINUATION. Santarus may terminate this
Agreement effective immediately if at any time it decides to no longer market
the Finished Product.
11.7 EFFECT OF TERMINATION. Except as otherwise provided in this
Section 11.7 or elsewhere in this Agreement, in the event this Agreement is
terminated for any reason, (a) subject to Section 11.8, all rights and
obligations of the Parties under this Agreement shall terminate; (b) Santarus
shall surrender to Manufacturer, or, at Manufacturer's sole option and expense,
Santarus shall destroy and provide Manufacturer with a certificate signed by a
Responsible Executive of Santarus attesting to the destruction of, all copies of
any Confidential Information of Manufacturer in its possession (excluding all of
the foregoing assigned to Santarus under Article 9 above); (c) Manufacturer
shall surrender to Santarus, or, at Santarus' sole option and expense,
Manufacturer shall destroy and provide Santarus with a certificate signed by a
Responsible Executive of Manufacturer attesting to the destruction of, all
copies of any Confidential Information provided by Santarus hereunder (except to
the extent required to be maintained by Manufacturer pursuant to Applicable Laws
or this Agreement); (d) Santarus shall pay for any Finished Product manufactured
at any time before the date of termination pursuant to any Purchase Order
delivered to Manufacturer prior to such termination, (e) Manufacturer shall
return to Santarus all unused API and (f) Manufacturer shall implement the
disposition of any unused Raw Material in accordance with Section 7.3 (including
the option of being compensated for such as specified in Section 7.3).
Manufacturer shall cooperate with Santarus and assist in the transfer to
Santarus of all legal and technical documents concerning API and Finished
Products, including master batch records, validation reports, stability reports
and relevant manufacturer authorizations, existing retention samples and all
such other documents and materials as may be reasonably necessary or useful for
Santarus to source Finished Products from other qualified Third Parties.
11.8 ACCRUED RIGHTS. Termination, relinquishment, or expiration of
this Agreement for any reason shall be without prejudice to any right which
shall have accrued to the benefit of either Party prior to such termination,
relinquishment, or expiration. Such termination, relinquishment or expiration
shall not relieve either Party from obligations which are expressly indicated to
survive termination or expiration of this Agreement. The provisions of this
Article shall not limit or restrict the rights of any Party to seek remedies or
take measures that may be otherwise available to it at law or equity in
connection with the enforcement and performance of obligations under this
Agreement. Any provision of this Agreement intended by their specific terms or
by necessary implication to survive the expiration or termination of this
Agreement, including without limitation, Articles, 8, 9, 12 and 13, shall so
survive.
ARTICLE 12
INDEMNIFICATION; INSURANCE
12.1 INDEMNIFICATION BY SANTARUS. Santarus hereby agrees to defend,
at its expense, indemnify, and hold harmless Manufacturer, its directors,
officers, employees, agents, and Affiliates, against all Third Party claims,
demands, damages, liabilities, losses, costs and expenses, including, without
limitation, attorney's fees (collectively, "CLAIMS") resulting from or arising
out of: (a) the negligence or willful misconduct of Santarus, its Affiliates, or
their directors, officers, agents, employees or consultants in the performance
of their obligations under this Agreement; (b) a material breach by Santarus of
any material provision of this Agreement;
or (c) a breach by Santarus of any of its representations or warranties set
forth in this Agreement; provided, however, that Santarus shall not be obligated
to indemnify Manufacturer under this Section 12.1 to the extent that such Claim
results from or arises out of any act or omission for which Manufacturer is
obligated to indemnify Santarus pursuant to Section 12.3 below.
12.2 INDEMNIFICATION BY MANUFACTURER. Manufacturer hereby agrees to
defend, at its expense, indemnify, and hold harmless Santarus, its directors,
officers, employees, agents, and Affiliates against all Third Party Claims
resulting from or arising out of (a) the failure to manufacture, package and
test the Finished Product in accordance with the Specifications, GMP, Applicable
Laws and the Manufacturer Manufacturing Responsibilities; (b) the failure to
store the Finished Product, Bulk API or Raw Materials in accordance with the
Specifications, GMP and Applicable Laws; (c) the negligence or willful
misconduct of Manufacturer, its Affiliates, or their directors, officers,
agents, employees or consultants in the performance of their obligations under
this Agreement, (d) a material breach by Manufacturer of any provision of this
Agreement or the Quality Agreement; or (e) a breach of any of Manufacturer's
representations, warranties, or covenants set forth in this Agreement or the
Quality Agreement; provided, however, that Manufacturer shall not be obligated
to indemnify Santarus under this Section 12.3 to the extent that such Claim
results from or arises out of any act or omission for which Santarus is
obligated to indemnify Manufacturer pursuant to Sections 12.1 above.
12.3 INDEMNIFICATION PROCEDURE. Each indemnified Party (the
"INDEMNITEE") agrees to give the indemnifying Party (the "INDEMNITOR") prompt
written notice of any Claims or discovery of fact upon which the Indemnitee
intends to base a request for indemnification. Notwithstanding the foregoing,
the failure to give timely notice to the Indemnitor shall not release the
Indemnitor from any liability to the Indemnitee to the extent the Indemnitor is
not materially prejudiced thereby.
12.3.1 The Indemnitee shall furnish promptly to the
Indemnitor copies of all papers and official documents in the Indemnitee's
possession or control which relate to any Claims; provided, however, that if the
Indemnitee defends or participates in the defense of any Claims, then the
Indemnitor shall also provide such papers and documents to the Indemnitee. The
Indemnitee shall reasonably cooperate with the Indemnitor in defending against
any Claims.
12.3.2 The Indemnitor shall have the right, by prompt
written notice to the Indemnitee, to assume direction and control of the defense
of any Claim, with counsel reasonably satisfactory to the Indemnitee and at the
sole cost of the Indemnitor, so long as (a) the Indemnitor shall promptly notify
the Indemnitee in writing (but in no event more than thirty (30) days after the
Indemnitor's receipt of notice of the Claim) that the Indemnitor intends to
indemnify the Indemnitee pursuant to this Article absent the development of
facts that give the Indemnitor the right to claim indemnification from the
Indemnitee, and (b) the Indemnitor diligently pursues the defense of the Claim.
12.3.3 If the Indemnitor assumes the defense of the Claim as
provided in this Section 12.4, the Indemnitee may participate in such defense
with the Indemnitee's own counsel who shall be retained, at the Indemnitee's
sole cost and expense; provided, however, that neither the Indemnitee nor the
Indemnitor shall consent to the entry of any judgment or enter into any
settlement with respect to the Claim without the prior written consent of the
other Party, which
consent shall not be unreasonably withheld or delayed. If the Indemnitee
withholds consent in respect of a judgment or settlement involving only the
payment of money by the Indemnitor and which would not involve any stipulation
or admission of liability or result in the Indemnitee becoming subject to
injunctive relief or other relief, the Indemnitor shall have the right, upon
written notice to the Indemnitee within five (5) days after receipt of the
Indemnitee's written denial of consent, to pay to the Indemnitee, or to a trust
for its or the applicable Third Party's benefit, such amount established by such
judgment or settlement in addition to all interest, costs or other charges
relating thereto, together with all attorneys' fees and expenses incurred to
such date for which the Indemnitor is obligated under this Agreement, if any, at
which time the Indemnitor's rights and obligations with respect to such Claim
shall cease.
12.3.4 The Indemnitor shall not be liable for any settlement
or other disposition of a Claim by the Indemnitee which is reached without the
written consent of the Indemnitor.
12.4 INSURANCE. Each Party shall maintain commercial general
liability and product liability insurance through the term of this Agreement and
for a period of five (5) years thereafter, which insurance shall afford limits
of not less than (i) [***] for each occurrence, and (ii) [***] annual aggregate.
In addition, from time to time during the term of this Agreement, each Party
shall increase their levels of insurance coverage if reasonably deemed prudent
by such party in light of the overall activities under this Agreement. 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 a minimum of 30 days' written
notice 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.
12.5 NO CONSEQUENTIAL DAMAGES. UNDER NO CIRCUMSTANCES SHALL EITHER
PARTY BE RESPONSIBLE OR LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL, SPECIAL, EXEMPLARY, PUNITIVE OR OTHER LIKE DAMAGES, OR FOR ANY
LOSS OF PROFITS, LOSS OF REVENUE, LOSS RESULTING FROM INTERRUPTION OF BUSINESS
OR LOSS OF USE OR DATA , EVEN IF SUCH PARTY, OR ANY OF ITS DIRECTORS, OFFICERS,
EMPLOYEES, OR AGENTS HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND
NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY OF ANY
KIND, UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY, ARISING
OUT OF OR RELATING IN ANY WAY TO THIS AGREEMENT OR ITS IMPLEMENTATION. FOR THE
AVOIDANCE OF DOUBT, NOTHING IN THIS SECTION 12.5 SHALL BE INTERPRETED TO LIMIT
THE INDEMNIFICATION OBLIGATION OF EITHER PARTY IN CONNECTION WITH A PRODUCT
LIABILITY CLAIM WITH RESPECT TO THE CHARACTERIZATION OF DAMAGES OR LOSSES
CLAIMED BY A THIRD PARTY AS BEING INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL,
EXEMPLARY, PUNITIVE OR OTHER LIKE DAMAGES OR LOSSES.
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ARTICLE 13
GOVERNING LAW; DISPUTE RESOLUTION
13.1 GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of California without giving effect to any
choice of laws rule that would cause the application of the laws of any
jurisdiction other than the internal laws of the State of California, to the
rights and duties of the Parties.
13.2 DISPUTE RESOLUTION/INJUNCTIVE RELIEF. Notwithstanding anything
to the contrary contained in this Agreement, the parties specifically agree to
the following dispute resolution procedure.
13.2.1 Negotiation Between Responsible Executives. In the
event of any dispute between the Parties arising out of or related to this
Agreement, the Parties shall refer such dispute to the Responsible Executive of
Santarus and the Responsible Executive of Manufacturer for attempted resolution
by good faith executive negotiations within thirty (30) days after such referral
is made. In the event such officers are unable to resolve such dispute within
such thirty (30) day period, then the Parties will subject themselves to the
arbitration procedures set forth below before seeking any other means of
resolving the dispute.
13.2.2 Arbitration. Any dispute arising out of or in
connection with this Agreement including any question regarding its existence,
validity or termination, that can not be resolved through negotiation between
Responsible Executives, shall be finally resolved by arbitration under the Rules
of the American Arbitration Association. The arbitration shall consist of a
single arbitrator mutually agreed by the Parties, or, in the absence of such
agreement, each Party shall select an arbitrator and those two arbitrators shall
select a third arbitrator who shall arbitrate the dispute. Any arbitration shall
take place in San Diego, California, U.S.A. The award of the arbitrator shall be
final and binding. The Parties waive any right to appeal the arbitration award,
to the extent a right to appeal may be lawfully waived. Each Party retains the
right to seek judicial assistance: (a) to compel arbitration; (b) to obtain
interim measures of protection pending or during arbitration; and (c) to enforce
any decision of the arbitrator, including the final award.
13.2.3 Exceptions. Notwithstanding the provision of this
Section 13.2, the Parties agree that certain violations or threatened violations
of this Agreement will result in irrevocable harm to other Party, for which
damages would be an inadequate remedy. In addition to any rights and remedies
otherwise available, either Party, before or during arbitration, may apply to a
court having jurisdiction for a temporary restraining order, preliminary
injunction or other interim or conservatory relief, where such relief is
necessary to protect its interests pending completion of the arbitration
proceedings without breach of this arbitration agreement and without any
abridgment of the powers of the arbitrators.
13.2.4 Continuation of Performance. Except where such area
of performance is the subject of dispute, each Party shall continue to perform
its respective obligations under this Agreement while any dispute is being
resolved in accordance with this Section 13.2 unless and until such obligations
are terminated or expire in accordance with the provisions of this Agreement.
ARTICLE 14
RESOURCES
14.1 MANUFACTURING EQUIPMENT. Manufacturer shall be solely
responsible for all costs associated with purchasing and maintaining the
equipment, tools, technology, and all other items necessary to manufacture,
package, test, store and ship the Finished Product ("MANUFACTURING EQUIPMENT").
14.3 PERSONNEL. Manufacturer shall be solely responsible for all
costs associated with hiring personnel to maintain the Manufacturing Equipment
necessary to comply with its obligations pursuant to this Agreement.
ARTICLE 15
MISCELLANEOUS
15.1 [***]
15.2 ASSIGNMENT. Manufacturer may not assign this Agreement or any
of its rights or obligations hereunder) without the written consent of Santarus,
such consent not to be unreasonably withheld.
15.3 FORCE MAJEURE. With respect to this Agreement, neither Party
shall lose any rights hereunder or be liable to the other Party for damages or
losses on account of failure of performance by the defaulting Party if the
failure is occasioned by war, fire, explosion, flood, strike, lockout, terrorist
attacks, embargo, act of God, or any other similar cause to the extent beyond
the reasonable control of the defaulting Party, provided that the Party claiming
force majeure shall promptly notify the other Party in writing setting forth the
nature of such force majeure, shall use its best efforts to eliminate, remedy or
overcome such force majeure and shall resume performance of its obligations
hereunder as soon as reasonably practicable after such force majeure ceases.
Notwithstanding the previous sentence, if any force majeure continues for more
than ninety (90) days, the other Party may terminate this Agreement.
15.4 FURTHER ACTIONS. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purpose and intent of this
Agreement.
15.5 COMPLIANCE WITH LAWS. Each Party will comply with all
Applicable Laws in such Party's exercise of its rights and performance of its
obligations under this Agreement.
15.6 NOTICES. All notices required or permitted to be given under
this Agreement shall be in writing and shall be deemed given if delivered
personally or by facsimile transmission receipt verified, mailed by registered
or certified mail return receipt requested, postage prepaid, or sent by express
courier service, to the Parties at the following addresses, or at such other
address for a Party as shall be specified by like notice, provided that notices
of a change of address shall be effective only upon receipt thereof.
IF TO MANUFACTURER: MANUFACTURER
OSG Norwich Pharmaceuticals Inc.
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respect to the omitted portions.
0000 Xxxxx Xxxxxxx 00
Xxxxxxx, Xxx Xxxx 00000
Attention: President
Fax: (000) 000-0000
IF TO SANTARUS SANTARUS, INC.
00000 Xxxx Xxxxx Xxx Xxxxx, Xxxxx 000
Xxx Xxxxx XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Attn: Senior Vice President, Manufacturing
and Product Development
With a copy to: SANTARUS, INC.
00000 Xxxx Xxxxx Xxx Xxxxx, Xxxxx 000
Xxx Xxxxx XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Attn: Legal Affairs
Unless an earlier date can be proven by competent evidence, the date of
receipt of any notice given under this Agreement, including, without limitation,
any invoice provided by Manufacturer to Santarus, shall be deemed to be the date
given if delivered personally or by facsimile transmission receipt verified,
seven (7) days after the date mailed, if mailed by registered or certified mail
return receipt requested, postage prepaid, and two (2) days after the date sent
if sent by express courier service.
15.7 WAIVER. No failure of either Party to exercise and no delay in
exercising any right, power or remedy in connection with this Agreement (each a
"RIGHT") will operate as a waiver thereof, nor will any single or partial
exercise of any Right preclude any other or further exercise of such Right or
the exercise of any other Right. No waiver shall be effective unless made in
writing and signed by the waiving Party.
15.8 DISCLAIMER OF AGENCY. The relationship between Manufacturer
and Santarus established by this Agreement is that of independent contractors,
and nothing contained in herein shall be construed to (i) give either Party the
power to direct or control the day-to-day activities of the other, (ii)
constitute the Parties as the legal representative or agent of the other Party
or as partners, joint venturers, co-owners or otherwise as participants in a
joint or common undertaking, or (iii) allow either Party to create or assume any
liability or obligation of any kind, express or implied, against or in the name
of or on behalf of the other Party for any purpose whatsoever, except as
expressly set forth in this Agreement.
15.9 SEVERABILITY. If any term, covenant or condition of this
Agreement or the application thereof to any Party or circumstance shall, to any
extent, be held to be invalid or unenforceable by a court or administrative
agency of competent jurisdiction, then the remainder of this Agreement, or the
application of such term, covenant or condition to Parties or circumstances,
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby and each term, covenant or condition shall be valid and be
enforced to the fullest extent permitted by law.
15.10 ENTIRE AGREEMENT. This Agreement, including all schedules and
exhibits attached hereto, and the Quality Agreement, which is hereby
incorporated herein by reference, set forth all covenants, promises, agreements,
warranties, representations, conditions and understandings between the Parties
hereto with respect to the manufacture and supply of commercial quantities of
Finished Product and supersedes and terminates all prior and contemporaneous
agreements and understandings between the Parties with respect to such subject
matter.
15.11 MODIFICATION. No subsequent alteration, amendment, change or
addition to this Agreement shall be binding upon the Parties hereto unless
reduced to writing and signed by the respective authorized officers of the
Parties. In the event of a conflict between the terms of any Purchase Order,
order acknowledgement, packaging slip or other documentation, and the terms of
this Agreement, the terms of this Agreement shall control, unless such
documentation specifically states that it overrides conflicting terms of this
Agreement and is signed by each of the Parties.
15.12 TRADEMARKS AND TRADE NAMES. The Parties hereby acknowledge
that neither Party has, and shall not acquire, any interest in any of the other
Party's trademarks or trade names appearing on the labels or packaging materials
for the Finished Product unless otherwise expressly agreed in writing.
15.13 CONSTRUCTION. This Agreement shall be deemed to have been
drafted by all Parties and, in the event of a dispute, no Party hereto shall be
entitled to claim that any provision should be construed against any other Party
by reason of the fact that it was drafted by one particular Party. The headings
used in this Agreement are for convenience of reference only and are not a part
of the text hereof.
15.14 COUNTERPARTS. This Agreement may be executed in counterparts,
by manual or facsimile signatures, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
In Witness Whereof, the Parties have executed this Agreement in
duplicate originals by their proper officers as of the Effective Date.
MANUFACTURER: SANTARUS:
OSG NORWICH PHARMACEUTICALS INC. SANTARUS, INC.
By: /s/ Xxxxx Xxx By: /s/ Xxxxxx X. Xxxxxx
----------------------------- ----------------------------------
Name: Xxxxx Xxx Name: Xxxxxx X. Xxxxxx
Title: President Title: President & CEO
EXHIBIT A
MINIMUM RUN QUANTITY
MINIMUM RUN QUANTITY
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respect to the omitted portions.
EXHIBIT B
PRICING INFORMATION
FINISHED PRODUCT:
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respect to the omitted portions.
EXHIBIT C
KEY PERFORMANCE INDICATORS
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