Exhibit 10.28

 

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

 

COMMERCIAL MANUFACTURING AGREEMENT

 

This Commercial Manufacturing Agreement (“Agreement”) is made this 30th day of
December, 2005, by and between Cardinal Health PTS, LLC, having a place of
business at 14 Schoolhouse Road, Somerset, NJ 08873 (“Cardinal Health”) and
CollaGenex Pharmaceuticals, Inc. (“Client”), having its principal place of
business at 41 University Drive, Suite 200, Newtown, PA 18940.

 

WHEREAS, Cardinal Health provides contract pharmaceutical development,
manufacturing, packaging, analytical, and sales and marketing services to the
pharmaceutical industry.

 

WHEREAS, Client has certain technology relating to the certain pharmaceutical
products and wants Cardinal Health to assist in the manufacturing and testing on
such products as provided in this Agreement and the attachments hereto.

 

WHEREAS, Client desires to engage Cardinal Health to provide certain services to
Client in connection with the processing of Client’s Product (defined below);
and Cardinal Health desires to provide such services pursuant to the terms and
conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions
set forth below, the parties agree as follows:

 

ARTICLE 1
DEFINITIONS

 

The following terms have the following meanings in this Agreement:

 

1.1                                 “AFFILIATE(S)” MEANS ANY CORPORATION, FIRM,
PARTNERSHIP OR OTHER ENTITY WHICH CONTROLS, IS CONTROLLED BY OR IS UNDER COMMON
CONTROL WITH A PARTY. FOR PURPOSES OF THIS DEFINITION, “CONTROL” SHALL MEAN THE
OWNERSHIP OF AT LEAST FIFTY PERCENT (50%) OF THE VOTING SHARE CAPITAL OF SUCH
ENTITY OR ANY OTHER COMPARABLE EQUITY OR OWNERSHIP INTEREST.

 

1.2                                 “API” MEANS THE ACTIVE PHARMACEUTICAL
INGREDIENT SET FORTH IN EXHIBIT A WHICH HAS BEEN RELEASED BY CLIENT AND PROVIDED
TO CARDINAL HEALTH, ALONG WITH A CERTIFICATE OF ANALYSIS, AS PROVIDED IN THIS
AGREEMENT.

 

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1.3                                 “APPLICABLE LAWS” MEANS ALL LAWS,
ORDINANCES, RULES AND REGULATIONS WITHIN THE TERRITORY APPLICABLE TO THE
PROCESSING OF THE PRODUCT OR ANY ASPECT THEREOF AND THE OBLIGATIONS OF CARDINAL
HEALTH OR CLIENT, AS THE CONTEXT REQUIRES UNDER THIS AGREEMENT, INCLUDING,
WITHOUT LIMITATION, (A) ALL APPLICABLE FEDERAL, STATE AND LOCAL LAWS AND
REGULATIONS OF EACH TERRITORY; (B) THE U.S. FEDERAL FOOD, DRUG AND COSMETIC ACT,
AND (C) THE GOOD MANUFACTURING PRACTICES PROMULGATED BY THE REGULATORY
AUTHORITIES, AS AMENDED FROM TIME TO TIME (“GMPS”). APPLICABLE LAWS SHALL ALSO
INCLUDE ALL LAWS, ORDINANCES, RULES AND REGULATIONS APPLICABLE IN TERRITORIES
ADDED TO THIS AGREEMENT IN AN AMENDMENT TO THIS AGREEMENT, SOLELY TO THE EXTENT
CLIENT OR ITS DESIGNEE HAS PROVIDED WRITTEN COPIES OF SUCH LAWS TO CARDINAL
HEALTH PRIOR TO CARDINAL HEALTH’S PROCESSING PRODUCT UNDER THIS AGREEMENT.
COPIES OF ALL LAWS SHALL BE IN THE ENGLISH LANGUAGE.

 

1.4                                 “BATCH” MEANS DEFINED QUANTITY OF FORMULATED
BULK DRUG PRODUCT WHICH IS MANUFACTURED AND PACKAGED IN ACCORDANCE WITH THE
SPECIFICATIONS.

 

1.5                                 “CALENDAR QUARTER” MEANS A PERIOD OF THREE
(3) CONSECUTIVE MONTHS COMMENCING ON JANUARY 1, APRIL 1, JULY 1 OR OCTOBER 1 OF
ANY CALENDAR YEAR.

 

1.6                                 “CARDINAL HEALTH MATERIALS” SHALL HAVE THE
MEANING SET FORTH IN ARTICLE 12.

 

1.7                                 “CHANGE ORDER” SHALL HAVE THE MEANING SET
FORTH IN SECTION 4.5(A).

 

1.8                                 “COMMENCEMENT DATE” MEANS THE FIRST DATE
UPON WHICH A REGULATORY AUTHORITY APPROVES CARDINAL HEALTH AS A MANUFACTURER OF
ONE OF THE PRODUCTS.

 

1.9                                 “CONFIDENTIAL INFORMATION” IS AS DEFINED IN
SECTION 11.2.

 

1.10                           “CONTRACT YEAR” MEANS EACH CONSECUTIVE TWELVE
(12) MONTH PERIOD BEGINNING ON THE COMMENCEMENT DATE.

 

1.11                           “CLIENT MATERIALS” SHALL HAVE THE MEANING SET
FORTH IN ARTICLE 12.

 

1.12                           “DEFECTIVE PRODUCT” SHALL HAVE THE MEANING SET
FORTH IN SECTION 5.2.

 

1.13                           “DISPUTE” SHALL HAVE THE MEANING SET FORTH IN
SECTION 18.9.

 

1.14                           “DOSAGE CONTAINER” MEANS ANY FINAL DOSAGE
FORM CONTAINER(S) THE PARTIES MAY AGREE UPON IN WRITING FROM TIME TO TIME.

 

1.15                           “EFFECTIVE DATE” MEANS THE DATE THIS AGREEMENT
WAS FULLY EXECUTED.

 

1.16                           “FACILITIES” MEANS CARDINAL HEALTH’S FACILITIES
LOCATED IN WINCHESTER, KENTUCKY, USA OR SUCH OTHER FACILITY AS AGREED BY THE
PARTIES.

 

1.17                           “FDA” MEANS THE UNITED STATES FOOD AND DRUG
ADMINISTRATION.

 

1.18                           “FIRM COMMITMENT” SHALL HAVE THE MEANING SET
FORTH IN SECTION 4.2.

 

1.19                           “MINIMUM REQUIREMENT” SHALL HAVE THE MEANING SET
FORTH IN SECTION 4.1.

 

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1.20                           “PROCESS” OR “PROCESSING” MEANS THE MANUFACTURING
AND/OR PACKAGING OF THE API AND RAW MATERIALS INTO PRODUCT IN ACCORDANCE WITH
THE SPECIFICATIONS AND THE TERMS AND CONDITIONS SET FORTH IN THIS AGREEMENT.

 

1.21                           “PROCESSING DATE,” MEANS THE DAY ON WHICH THE
PRODUCT IS TO BE COMPOUNDED BY CARDINAL HEALTH.

 

1.22                           “PRODUCT” MEANS THE FULLY COMPOUNDED BULK DRUG
PRODUCT PROCESSED AND PACKAGED IN ACCORDANCE WITH THE SPECIFICATIONS.

 

1.23                           “PURCHASE ORDER” SHALL HAVE THE MEANING SET FORTH
IN SECTION 4.3.

 

1.24                           “RAW MATERIALS” MEANS ALL RAW MATERIALS,
SUPPLIES, COMPONENTS AND PACKAGING NECESSARY TO MANUFACTURE AND SHIP THE PRODUCT
IN ACCORDANCE WITH THE SPECIFICATIONS, AS PROVIDED IN EXHIBIT A, BUT NOT
INCLUDING THE API.

 

1.25                           “REGULATORY APPROVAL” SHALL HAVE THE MEANING SET
FORTH IN SECTION 7.4.

 

1.26                           “REGULATORY AUTHORITY” MEANS ANY GOVERNMENTAL
REGULATORY AUTHORITY WITHIN A TERRITORY INVOLVED IN REGULATING ANY ASPECT OF THE
DEVELOPMENT, MANUFACTURE, MARKET APPROVAL, SALE, DISTRIBUTION, PACKAGING OR USE
OF THE PRODUCT.

 

1.27                           “ROLLING FORECAST” SHALL HAVE THE MEANING SET
FORTH IN SECTION 4.2.

 

1.28                           “SPECIFICATIONS” MEANS THE PROCEDURES,
REQUIREMENTS, STANDARDS, QUALITY CONTROL TESTING AND OTHER DATA AND THE SCOPE OF
SERVICES AS SET FORTH IN EXHIBIT A, WHICH ARE HEREBY INCORPORATED BY REFERENCE
INTO THIS AGREEMENT, ALONG WITH ANY VALID AMENDMENTS OR MODIFICATIONS THERETO,
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN ARTICLE 8.

 

1.29                           “TERM” SHALL HAVE THE MEANING SET FORTH IN
SECTION 15.1.

 

1.30                           “TERRITORY” MEANS THE UNITED STATES OF AMERICA
AND ANY OTHER COUNTRY WHICH THE PARTIES AGREE IN WRITING TO ADD TO THIS
DEFINITION OF TERRITORY IN AN AMENDMENT TO THIS AGREEMENT.

 

1.31                           “UNIT PRICING” SHALL HAVE THE MEANING SET FORTH
IN SECTION 7.1.

 

1.32                           “VALIDATION BATCHES” SHALL MEAN EACH BATCH OF
PRODUCT MANUFACTURED BY CARDINAL HEALTH WHICH IS NECESSARY TO SUPPORT THE
VALIDATION PORTION OF CLIENT’S NDA OR ANDA SUBMISSION TO THE FDA.

 

ARTICLE 2
VALIDATION, PROCESSING & RELATED SERVICES

 

2.1                                 VALIDATION SERVICES. CARDINAL HEALTH SHALL
PERFORM THE QUALIFICATION, VALIDATION AND STABILITY SERVICES DESCRIBED IN
EXHIBIT A AND EXHIBIT B OF THIS AGREEMENT FOR THE PRICES SPECIFIED THEREIN.

 

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2.2                                 SUPPLY AND PURCHASE OF PRODUCT. DURING THE
TERM, CARDINAL HEALTH SHALL PROCESS THE PRODUCTS IN ACCORDANCE WITH THE
SPECIFICATIONS, THE APPLICABLE LAWS AND THE TERMS AND CONDITIONS OF THIS
AGREEMENT. CLIENT SHALL PURCHASE THE PRODUCT FROM CARDINAL HEALTH IN ACCORDANCE
WITH THE TERMS AND CONDITIONS OF THIS AGREEMENT.

 

2.3                                 OTHER RELATED SERVICES. CARDINAL HEALTH
SHALL PROVIDE OTHER SERVICES UPON TERMS AND CONDITIONS AGREED TO BY THE PARTIES
IN WRITING FROM TIME TO TIME.

 

ARTICLE 3
MATERIALS

 

3.1                                 API. CLIENT SHALL SUPPLY TO CARDINAL HEALTH
FOR PROCESSING, AT CLIENT’S SOLE COST, THE API AND APPLICABLE REFERENCE
STANDARDS IN QUANTITIES SUFFICIENT TO MEET CLIENT’S REQUIREMENTS FOR EACH
PRODUCT AS FURTHER SET FORTH IN ARTICLE 4. PRIOR TO DELIVERY OF ANY OF THE API
OR REFERENCE STANDARD TO CARDINAL HEALTH FOR PROCESSING, CLIENT SHALL PROVIDE TO
CARDINAL HEALTH A COPY OF THE API MATERIAL SAFETY DATA SHEET (“MSDS”), AS
AMENDED, AND ANY SUBSEQUENT REVISIONS THERETO. CLIENT SHALL SUPPLY THE API,
REFERENCE STANDARDS, AND CERTIFICATE OF ANALYSIS FOB THE FACILITY NO LATER THAN
SIXTY (60) DAYS BEFORE THE SCHEDULED PROCESSING DATE UPON WHICH SUCH API WILL BE
USED BY CARDINAL HEALTH. UPON RECEIPT OF THE API, CARDINAL HEALTH SHALL CONDUCT
IDENTIFICATION TESTING OF THE API. CARDINAL HEALTH SHALL USE THE API SOLELY AND
EXCLUSIVELY FOR PROCESSING UNDER THIS AGREEMENT.

 

3.2                                 RAW MATERIALS. CARDINAL HEALTH SHALL BE
RESPONSIBLE FOR PROCURING, INSPECTING AND RELEASING ADEQUATE RAW MATERIALS AS
NECESSARY TO MEET THE FIRM COMMITMENT, UNLESS OTHERWISE AGREED TO BY THE PARTIES
IN WRITING. IN CERTAIN INSTANCES, CLIENT MAY REQUIRE A SPECIFIC SUPPLIER TO BE
USED FOR RAW MATERIAL. IN SUCH AN EVENT, THE SUPPLIERS WILL BE SPECIFIED IN THE
SPECIFICATIONS, AND CLIENT SHALL BE RESPONSIBLE FOR THE TIMELINESS, QUANTITY AND
QUALITY OF SUPPLY OF SUCH RAW MATERIALS. IF THE COST OF ANY SUCH RAW MATERIAL IS
GREATER THAN CARDINAL HEALTH’S COSTS FOR THE SAME RAW MATERIAL OF EQUAL QUALITY
FROM OTHER SUPPLIERS, CARDINAL HEALTH SHALL ADD THE DIFFERENCE BETWEEN CARDINAL
HEALTH’S COST OF THE RAW MATERIAL AND CLIENT’S MANDATED SUPPLIER’S COST TO THE
UNIT PRICE OF THE PRODUCT. CLIENT WILL BE RESPONSIBLE FOR ALL COSTS ASSOCIATED
WITH QUALIFICATION OF A NEW SUPPLIER OF A RAW MATERIAL NOT PREVIOUSLY QUALIFIED
BY CARDINAL HEALTH. UNLESS A PARTICULAR RAW MATERIAL CAN BE REPLACED WITH THE
SAME RAW MATERIAL FROM ANOTHER SUPPLIER, CARDINAL HEALTH SHALL NOT BE LIABLE FOR
ANY DELAY IN DELIVERY OF PRODUCT IF (A) CARDINAL HEALTH IS UNABLE TO OBTAIN, IN
A TIMELY MANNER, A PARTICULAR RAW MATERIAL NECESSARY TO PROCESS THE PRODUCT, AND
(B) CARDINAL HEALTH PLACED ORDERS FOR SUCH RAW MATERIALS PROMPTLY FOLLOWING
RECEIPT OF CLIENT’S FIRM COMMITMENT.

 

3.3                                 ARTWORK AND PACKAGING. IF APPLICABLE, CLIENT
SHALL PROVIDE OR APPROVE, PRIOR TO THE PROCUREMENT OF APPLICABLE COMPONENTS, ALL
ARTWORK, ADVERTISING AND PACKAGING INFORMATION NECESSARY TO PROCESS THE PRODUCT.
SUCH ARTWORK, ADVERTISING AND PACKAGING INFORMATION IS AND SHALL REMAIN THE
EXCLUSIVE PROPERTY OF CLIENT, AND CLIENT SHALL BE SOLELY RESPONSIBLE FOR THE
CONTENT THEREOF. SUCH ARTWORK, ADVERTISING AND PACKAGING INFORMATION OR ANY
REPRODUCTION THEREOF MAY NOT BE USED BY CARDINAL HEALTH FOLLOWING THE
TERMINATION OF THIS AGREEMENT, OR DURING THE TERM OF THIS AGREEMENT IN ANY
MANNER OTHER THAN SOLELY FOR THE PURPOSE OF PERFORMING ITS OBLIGATIONS
HEREUNDER.

 

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3.4                                 REIMBURSEMENT FOR MATERIALS. IN THE EVENT OF
(A) A SPECIFICATION CHANGE FOR ANY REASON, (B) TERMINATION OR EXPIRATION OF THIS
AGREEMENT; OR (C) OBSOLESCENCE OF ANY RAW MATERIAL, CLIENT SHALL BEAR THE COST
OF ANY UNUSED RAW MATERIALS, PROVIDED THAT CARDINAL HEALTH PURCHASED SUCH RAW
MATERIALS IN QUANTITIES CONSISTENT WITH CLIENT’S MOST RECENT FIRM COMMITMENT AND
THE SUPPLIER’S MINIMUM PURCHASE OBLIGATIONS.

 

ARTICLE 4
MINIMUM COMMITMENT, PURCHASE ORDERS & FORECASTS

 

4.1                                 MINIMUM REQUIREMENT. DURING EACH CONTRACT
YEAR, THE PARTIES ACKNOWLEDGE THAT CLIENT IS NOT OBLIGATED TO BUY ANY SPECIFIC
AMOUNT OF PRODUCT UNDER THIS AGREEMENT, EXCEPT FOR THE QUANTITIES THAT CLIENT
SHALL ACTUALLY ORDER THROUGH SUCH BINDING PURCHASE ORDERS, AS SPECIFIED IN
SECTION 4.3 BELOW, AND IN MINIMUM ORDER QUANTITIES AS SPECIFIED IN EXHIBIT B.

 

4.2                                 FORECAST. ON OR PRIOR TO THE TENTH (10TH)
CALENDAR DAY OF EACH MONTH, BEGINNING AT LEAST FOUR MONTHS PRIOR TO THE
ANTICIPATED COMMENCEMENT DATE, CLIENT SHALL FURNISH TO CARDINAL HEALTH A WRITTEN
COMMERCIALLY REASONABLE ROLLING FORECAST OF PRODUCT QUANTITIES FOR THE TWELVE
MONTHS FOLLOWING THE MONTH IN WHICH SUCH FORECAST IS SUBMITTED, THAT REFLECTS
BOTH (A) QUANTITIES SUBJECT TO PURCHASE ORDERS PURSUANT TO THIS AGREEMENT AND
(B) ADDITIONAL QUANTITIES OF PRODUCT THAT CLIENT REASONABLY EXPECTS TO ORDER
FROM CARDINAL HEALTH DURING SUCH PERIOD (“ROLLING FORECAST”). THE FIRST THREE
(3) MONTHS OF EACH ROLLING FORECAST SHALL CONSTITUTE A FIRM ORDER FOR PRODUCT
AND BINDING COMMITMENT TO SUBMIT PURCHASE ORDERS FOR THE QUANTITIES OF PRODUCT
SPECIFIED THEREIN (“FIRM COMMITMENT”) AND THE FOLLOWING NINE (9) MONTHS OF THE
ROLLING FORECAST SHALL BE NON-BINDING, GOOD FAITH ESTIMATES FOR PLANNING
PURPOSES ONLY AND SHALL NOT CONSTITUTE BINDING COMMITMENTS BY CLIENT TO PURCHASE
PRODUCT.

 

4.3                                 PURCHASE ORDERS. AT LEAST 90 DAYS PRIOR TO
THE DESIRED DELIVERY DATE, CLIENT SHALL SUBMIT A FIRM, BINDING, NON-CANCELABLE
PURCHASE ORDER FOR THAT LATEST MONTH’S FIRM COMMITMENT PORTION OF THE ROLLING
FORECAST, (“PURCHASE ORDER”) SPECIFYING REQUESTED DELIVERY DATES FOR EACH BATCH.
IN THE EVENT OF A CONFLICT BETWEEN THE TERMS OF ANY PURCHASE ORDER AND THIS
AGREEMENT, THIS AGREEMENT   SHALL   CONTROL. NOTWITHSTANDING   THE  
FOREGOING,   CARDINAL   HEALTH   SHALL   USE COMMERCIALLY REASONABLE EFFORTS TO
SUPPLY CLIENT WITH QUANTITIES OF PRODUCT WHICH ARE IN EXCESS OF THE QUANTITIES
SPECIFIED IN THE FIRM COMMITMENT, SUBJECT TO CARDINAL HEALTH’S OTHER SUPPLY
COMMITMENTS AND MANUFACTURING AND EQUIPMENT CAPACITY.

 

4.4                                 CARDINAL HEALTH’S CANCELLATION OF PURCHASE
ORDERS. NOTWITHSTANDING THE TERMS AND CONDITIONS SET FORTH IN SECTION 4.5 BELOW,
CARDINAL HEALTH RESERVES THE RIGHT TO CANCEL ALL, OR ANY PART OF, A PURCHASE
ORDER UPON WRITTEN NOTICE TO CLIENT, AND CARDINAL HEALTH SHALL HAVE NO FURTHER
OBLIGATIONS OR LIABILITY WITH RESPECT TO SUCH PURCHASE ORDER IF CLIENT REFUSES
OR FAILS TO MAKE SCHEDULED DELIVERIES OF THE API.

 

4.5                                 CLIENT’S MODIFICATION OR CANCELLATION.

 

A.                                   CLIENT MAY MODIFY THE DELIVERY DATE,
SPECIFICATIONS OR QUANTITY OF PRODUCT IN SUCH PURCHASE ORDER ONLY BY SUBMITTING
A WRITTEN CHANGE ORDER (“CHANGE ORDER”) TO CARDINAL HEALTH AT LEAST THIRTY (30)
BUSINESS DAYS IN ADVANCE OF THE EARLIEST SCHEDULED PROCESSING DATE FOR THE
PROCESSING COVERED BY THE CHANGE ORDER. SUCH CHANGE ORDER SHALL BE EFFECTIVE AND
BINDING

 

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AGAINST CARDINAL HEALTH ONLY UPON THE WRITTEN APPROVAL OF CARDINAL HEALTH, AND
NOTWITHSTANDING THE FOREGOING, CLIENT SHALL REMAIN RESPONSIBLE FOR THE FIRM
COMMITMENT PORTION OF THE ROLLING FORECAST.

 

B.                                     NOTWITHSTANDING ANY AMOUNTS DUE TO
CARDINAL HEALTH UNDER SECTION 4.4 OR SECTION 4.1, IF CLIENT FAILS TO PLACE
PURCHASE ORDERS SUFFICIENT TO SATISFY THE FIRM COMMITMENT, CLIENT SHALL, WITHIN
THIRTY (30) DAYS OF RECEIPT OF INVOICE, PAY TO CARDINAL HEALTH THE UNIT PRICE
FOR ALL UNITS THAT WOULD HAVE BEEN PROCESSED IF CLIENT HAS PLACED PURCHASE
ORDERS SUFFICIENT TO SATISFY THE FIRM COMMITMENT.

 

4.6                                 UNPLANNED DELAY OR ELIMINATION OF
PROCESSING. CARDINAL HEALTH SHALL USE COMMERCIALLY REASONABLE EFFORTS TO MEET
THE PURCHASE ORDERS, SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT.
CARDINAL HEALTH SHALL PROVIDE CLIENT WITH AS MUCH ADVANCE NOTICE AS POSSIBLE
(AND WILL USE ITS BEST EFFORTS TO PROVIDE AT LEAST FIFTEEN (15) DAYS ADVANCE
NOTICE WHERE POSSIBLE) IF CARDINAL HEALTH DETERMINES THAT ANY PROCESSING WILL BE
DELAYED OR ELIMINATED FOR ANY REASON.

 

4.7                                 INSPECTION OF PROCESSING. CLIENT MAY BASE UP
TO TWO (2) REPRESENTATIVES AT THE FACILITIES TO OBSERVE THE PROCESSING PROVIDED
THAT CLIENT PROVIDE CARDINAL HEALTH AT LEAST TEN (10) DAYS ADVANCE WRITTEN
NOTICE OF THE ATTENDANCE OF SUCH CLIENT REPRESENTATIVES. CLIENT SHALL INDEMNIFY
AND HOLD HARMLESS CARDINAL HEALTH FOR ANY ACTION OR ACTIVITY OF SUCH
REPRESENTATIVES WHILE ON CARDINAL HEALTH’S PREMISES.

 

ARTICLE 5
TESTING; SAMPLES; RELEASE

 

5.1                                 DISCREPANT TEST RESULTS. IN THE EVENT OF A
DISAGREEMENT BETWEEN THE PARTIES REGARDING WHETHER THE PRODUCT MEETS THE
WARRANTY IN SECTION 10.1, THE PARTIES SHALL CAUSE A MUTUALLY AGREEABLE
INDEPENDENT THIRD PARTY TO REVIEW RECORDS, TEST DATA AND TO PERFORM COMPARATIVE
TESTS AND/OR ANALYSES ON SAMPLES OF THE ALLEGED DEFECTIVE PRODUCT. THE
INDEPENDENT PARTY’S RESULTS SHALL BE FINAL AND BINDING. UNLESS OTHERWISE AGREED
TO BY THE PARTIES IN WRITING, THE COSTS ASSOCIATED WITH SUCH TESTING AND REVIEW
SHALL BE BORNE BY THE PARTY FOUND RESPONSIBLE.

 

5.2                                 REPLACEMENT OF DEFECTIVE PRODUCT. IN
ACCORDANCE WITH THE TERMS SET FORTH IN THIS AGREEMENT, CARDINAL HEALTH SHALL
REPLACE, AS SOON AS PRACTICABLE AND AT ITS SOLE EXPENSE, ALL PRODUCT THAT DOES
NOT COMPLY WITH THE WARRANTY IN SECTION 10.1 (“DEFECTIVE PRODUCT”) OR CREDIT ANY
PAYMENTS MADE BY CLIENT FOR SUCH BATCH OF DEFECTIVE PRODUCT. THE OBLIGATION OF
CARDINAL HEALTH TO (A) REPLACE DEFECTIVE PRODUCT IN ACCORDANCE WITH THE
SPECIFICATIONS OR CREDIT PAYMENTS MADE BY CLIENT FOR DEFECTIVE PRODUCT AND
(B) REIMBURSE CLIENT FOR API LOST IN THE DEFECTIVE BATCH, SUBJECT TO THE
LIMITATIONS IN SECTION 16.1 SHALL BE CLIENT’S SOLE AND EXCLUSIVE REMEDY UNDER
THIS ARTICLE FOR DEFECTIVE PRODUCT AND IS IN LIEU OF ANY OTHER WARRANTY, EXPRESS
OR IMPLIED.

 

5.3                                 SUPPLY OF MATERIAL FOR DEFECTIVE PRODUCT. IN
THE EVENT CARDINAL HEALTH REPROCESSES PRODUCT PURSUANT TO SECTION 5.2, ABOVE,
CLIENT SHALL SUPPLY, AT ITS SOLE COST, CARDINAL HEALTH WITH SUFFICIENT
QUANTITIES OF THE DRUG SUBSTANCE IN ORDER FOR CARDINAL  HEALTH  COMPLETE  SUCH
REPROCESSING.

 

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ARTICLE 6
DELIVERY

 

6.1                                 DELIVERY. CARDINAL HEALTH SHALL TENDER THE
PRODUCT FOR DELIVERY, F.O.B. THE FACILITY ONCE CARDINAL HEALTH’S CERTIFICATE OF
ANALYSIS FOR SUCH BATCH DESIGNATES THE BATCH MEETS THE SPECIFICATIONS. CLIENT
SHALL BE RESPONSIBLE FOR ALL COSTS AND RISK OF LOSS ASSOCIATED WITH SHIPMENT OF
THE PRODUCT. CLIENT SHALL QUALIFY AT LEAST THREE (3) CARRIERS TO SHIP THE
PRODUCT AND THEN DESIGNATE THE PRIORITY OF SUCH QUALIFIED CARRIERS TO CARDINAL
HEALTH.

 

6.2                                 FAILURE TO TAKE DELIVERY. IF CLIENT FAILS TO
TAKE DELIVERY ON ANY SCHEDULED DELIVERY DATE, CLIENT SHALL BE INVOICED ON THE
FIRST DAY OF EACH MONTH FOR THE STORED PRODUCT AND REASONABLE ADMINISTRATION AND
STORAGE COSTS. FOR EACH SUCH BATCH OF UNDELIVERED PRODUCT, CLIENT AGREES THAT: 
(A) CLIENT HAS MADE A FIXED COMMITMENT TO PURCHASE SUCH PRODUCT, (B) RISK OF
OWNERSHIP FOR SUCH PRODUCT PASSES TO CLIENT, (C) SUCH PRODUCT SHALL BE ON A BILL
AND HOLD BASIS FOR LEGITIMATE BUSINESS PURPOSES, (D) IF NO DELIVERY DATE IS
DETERMINED AT THE TIME OF BILLING, CARDINAL HEALTH SHALL HAVE THE RIGHT TO SHIP
THE PRODUCT TO CLIENT WITHIN FOUR MONTHS AFTER BILLING, AND (E) CLIENT WILL BE
RESPONSIBLE FOR ANY DECREASE IN MARKET VALUE OF SUCH PRODUCT THAT RELATES TO
FACTORS AND CIRCUMSTANCES OUTSIDE OF CARDINAL HEALTH’S CONTROL. WITHIN FIVE
(5) DAYS FOLLOWING A WRITTEN REQUEST FROM CARDINAL HEALTH, CLIENT SHALL PROVIDE
CARDINAL HEALTH WITH A LETTER CONFIRMING ITEMS (A) THROUGH (E) OF THIS
SECTION FOR EACH BATCH OF UNDELIVERED PRODUCT.

 

ARTICLE 7
PRICING AND PAYMENT

 

7.1                                 UNIT PRICING. CLIENT SHALL PAY TO CARDINAL
HEALTH THE UNIT PRICING SET FORTH ON EXHIBIT B (“UNIT PRICING”) FOR ALL PRODUCT.
IN THE EVENT CLIENT REQUESTS SERVICES OTHER THAN PROCESSING PRODUCT, CARDINAL
HEALTH SHALL PROVIDE A WRITTEN QUOTE OF THE FEE FOR SUCH ADDITIONAL SERVICES AND
CLIENT SHALL ADVISE CARDINAL HEALTH WHETHER IT WISHES TO HAVE SUCH ADDITIONAL
SERVICES PERFORMED BY CARDINAL HEALTH.

 

7.2                                 PRICE INCREASE. THE UNIT PRICING SHALL BE
ADJUSTED ON AN ANNUAL BASIS, EFFECTIVE ON EACH JANUARY 1ST, UPON AT LEAST SIXTY
(60) DAYS WRITTEN NOTICE FROM CARDINAL HEALTH TO CLIENT.

 

7.3                                 TAXES; DUTY. ALL TAXES, DUTIES AND OTHER
AMOUNTS ASSESSED ON THE RAW MATERIALS, API OR THE PRODUCT PRIOR TO OR UPON SALE
TO CLIENT ARE THE RESPONSIBILITY OF CLIENT, AND CLIENT SHALL REIMBURSE CARDINAL
HEALTH FOR ANY SUCH TAXES, DUTIES OR OTHER EXPENSES PAID BY CARDINAL HEALTH.

 

7.4                                 PRODUCT APPROVAL. NOTWITHSTANDING THE TERMS
SET FORTH ABOVE, CLIENT SHALL USE ITS BEST EFFORTS TO EXPEDITE AND OBTAIN ALL
REGULATORY APPROVALS NECESSARY FOR CARDINAL HEALTH TO COMMENCE PRODUCTION AT THE
FACILITY (“REGULATORY APPROVALS”).

 

7.5                                 PAYMENT TERMS. CARDINAL HEALTH SHALL INVOICE
CLIENT FOR ALL PRODUCT AS SHIPPED IN ACCORDANCE WITH SECTION 6.1, AND PAYMENT
FOR SUCH INVOICES SHALL BE DUE WITHIN THIRTY (30) DAYS AFTER THE DATE OF SUCH
INVOICE. IN THE EVENT PAYMENT IS NOT RECEIVED BY CARDINAL HEALTH ON OR BEFORE
THE THIRTIETH (30TH) DAY AFTER THE DATE OF THE INVOICE, THEN SUCH UNPAID AMOUNT
SHALL ACCRUE INTEREST AT THE RATE OF ONE PERCENT (1%) PER MONTH UNTIL PAID IN
FULL.

 

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ARTICLE 8
CHANGES TO SPECIFICATIONS

 

All Specifications and any changes thereto agreed to by the parties from time to
time shall be in writing, dated and signed by the parties. No change in the
Specifications shall be implemented by Cardinal Health, whether requested by
Client or requested or required by any Regulatory Authority, until the parties
have agreed in writing to such change, the implementation date of such change,
and any increase or decrease in costs, expenses or fees associated with such
change. Cardinal Health shall respond promptly to any request made by Client for
a change in the Specifications, and both parties shall use commercially
reasonable, good faith efforts to agree to the terms of such change in a timely
manner. As soon as possible after a request is made for any change in
Specifications, Cardinal Health shall notify Client of the costs associated with
such change and shall provide such supporting documentation as Client
may reasonably require. Client shall pay all costs associated with such agreed
upon changes. If there is a conflict between the terms of this Agreement and the
terms of the Specifications, this Agreement shall control.

 

ARTICLE 9
RECORDS; REGULATORY MATTERS

 

9.1                                 BATCH RECORDS AND DATA. WITHIN THIRTY (30)
DAYS FOLLOWING THE COMPLETION OF PROCESSING OF EACH BATCH, CARDINAL HEALTH SHALL
PROVIDE CLIENT WITH PROPERLY COMPLETED COPIES OF BATCH RECORDS PREPARED IN
ACCORDANCE WITH THE SPECIFICATIONS; PROVIDED, HOWEVER, THAT IF TESTING REVEALS
AN OUT-OF-SPECIFICATION RESULT, CARDINAL HEALTH SHALL PROVIDE SUCH BATCH RECORDS
WITHIN 10 DAYS FOLLOWING RESOLUTION OF THE OUT-OF SPECIFICATION RESULT.

 

9.2                                 RECORDKEEPING. CARDINAL HEALTH SHALL
MAINTAIN TRUE AND ACCURATE BOOKS, RECORDS, TEST AND LABORATORY DATA, REPORTS AND
ALL OTHER INFORMATION RELATING TO PROCESSING UNDER THIS AGREEMENT, INCLUDING ALL
INFORMATION REQUIRED TO BE MAINTAINED BY ALL APPLICABLE LAWS. SUCH INFORMATION
SHALL BE MAINTAINED IN FORMS, NOTEBOOKS AND RECORDS FOR A PERIOD OF AT LEAST TWO
(2) YEARS FROM THE RELEVANT FINISHED PRODUCT EXPIRATION DATE OR LONGER IF
REQUIRED UNDER APPLICABLE LAWS.

 

9.3                                 REGULATORY COMPLIANCE. CLIENT SHALL BE
SOLELY RESPONSIBLE FOR ALL PERMITS AND LICENSES REQUIRED BY ANY REGULATORY
AGENCY WITH RESPECT TO THE PRODUCT AND THE PROCESSING UNDER THIS AGREEMENT,
INCLUDING ANY PRODUCT LICENSES, APPLICATIONS AND AMENDMENTS IN CONNECTION
THEREWITH. CARDINAL HEALTH WILL BE RESPONSIBLE TO MAINTAIN ALL PERMITS AND
LICENSES REQUIRED BY ANY REGULATORY AUTHORITY WITH RESPECT TO THE FACILITY.
DURING THE TERM, CARDINAL HEALTH WILL ASSIST CLIENT WITH ALL REGULATORY MATTERS
RELATING TO PROCESSING UNDER THIS AGREEMENT, AT CLIENT’S REQUEST AND AT CLIENT’S
EXPENSE. EACH PARTY INTENDS AND COMMITS TO COOPERATE TO SATISFY ALL APPLICABLE
LAWS RELATING TO PROCESSING UNDER THIS AGREEMENT.

 

9.4                                 GOVERNMENTAL INSPECTIONS AND REQUESTS.
CARDINAL HEALTH SHALL IMMEDIATELY ADVISE CLIENT IF AN AUTHORIZED AGENT OF ANY
REGULATORY AUTHORITY VISITS THE FACILITY CONCERNING THE PROCESSING OF THE
PRODUCT. CARDINAL HEALTH SHALL FURNISH TO CLIENT A COPY OF THE REPORT BY SUCH
REGULATORY AUTHORITY, IF ANY, WITHIN TEN (10) DAYS OF CARDINAL HEALTH’S RECEIPT
OF SUCH REPORT. FURTHER, UPON RECEIPT OF A REGULATORY AUTHORITY REQUEST TO
INSPECT THE FACILITIES OR AUDIT

 

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CARDINAL HEALTH’S BOOKS AND RECORDS WITH RESPECT TO PROCESSING UNDER THIS
AGREEMENT, CARDINAL HEALTH SHALL IMMEDIATELY NOTIFY CLIENT, AND SHALL PROVIDE
CLIENT WITH A COPY OF ANY WRITTEN DOCUMENT RECEIVED FROM SUCH REGULATORY
AUTHORITY.

 

9.5                                 RECALL. IN THE EVENT CARDINAL HEALTH
BELIEVES A RECALL, FIELD ALERT, PRODUCT WITHDRAWAL OR FIELD CORRECTION MAY BE
NECESSARY WITH RESPECT TO ANY PRODUCT PROVIDED UNDER THIS AGREEMENT, CARDINAL
HEALTH SHALL IMMEDIATELY NOTIFY CLIENT IN WRITING. CARDINAL HEALTH WILL NOT ACT
TO INITIATE A RECALL, FIELD ALERT, PRODUCT WITHDRAWAL OR FIELD CORRECTION
WITHOUT THE EXPRESS PRIOR WRITTEN APPROVAL OF CLIENT, UNLESS OTHERWISE REQUIRED
BY APPLICABLE LAWS. IN THE EVENT CLIENT BELIEVES A RECALL, FIELD ALERT, PRODUCT
WITHDRAWAL OR FIELD CORRECTION MAY BE NECESSARY WITH RESPECT TO ANY PRODUCT
PROVIDED UNDER THIS AGREEMENT, CLIENT SHALL IMMEDIATELY NOTIFY CARDINAL HEALTH
IN WRITING AND CARDINAL HEALTH SHALL PROVIDE ALL NECESSARY COOPERATION AND
ASSISTANCE TO CLIENT. THE COST OF ANY RECALL, FIELD ALERT, PRODUCT WITHDRAWAL OR
FIELD CORRECTION SHALL BE BORNE BY CLIENT UNLESS SUCH RECALL, FIELD ALERT,
PRODUCT WITHDRAWAL OR FIELD CORRECTION IS CAUSED SOLELY BY CARDINAL HEALTH’S
BREACH OF ITS OBLIGATIONS UNDER THIS AGREEMENT OR APPLICABLE LAWS OR ITS
NEGLIGENCE OR WILLFUL MISCONDUCT, THEN SUCH COST SHALL BE BORNE BY CARDINAL
HEALTH. FOR PURPOSES HEREOF, SUCH COST SHALL BE LIMITED TO REASONABLE, ACTUAL
AND DOCUMENTED ADMINISTRATIVE COSTS INCURRED BY CLIENT FOR SUCH RECALL,
WITHDRAWAL OR CORRECTION, AND REPLACEMENT OF THE DEFECTIVE PRODUCT TO BE
RECALLED, IN ACCORDANCE WITH ARTICLE 5.

 

9.6                                 QUALITY AGREEMENTS. WITHIN SIX (6) MONTHS
FOLLOWING THE EXECUTION OF THIS AGREEMENT, THE PARTIES SHALL EXECUTE A QUALITY
AGREEMENT IN SUBSTANTIALLY THE FORM ATTACHED TO THIS AGREEMENT AS EXHIBIT C. THE
QUALITY AGREEMENT SHALL IN NO WAY DETERMINE LIABILITY OR FINANCIAL
RESPONSIBILITY OF THE PARTIES FOR THE RESPONSIBILITIES SET FORTH THEREIN. IN THE
EVENT OF A CONFLICT BETWEEN THE TERMS OF THIS AGREEMENT AND THE QUALITY
AGREEMENT, THIS AGREEMENT SHALL CONTROL.

 

ARTICLE 10
REPRESENTATIONS AND WARRANTIES

 

10.1                           CARDINAL HEALTH. CARDINAL HEALTH REPRESENTS AND
WARRANTS TO CLIENT THAT AT THE TIME OF DELIVERY OF THE PRODUCT AS PROVIDED IN
SECTION 6.1, SUCH PRODUCT WILL CONFORM TO AND WILL HAVE BEEN PROCESSED IN
CONFORMANCE WITH THE PRODUCT SPECIFICATIONS AND APPLICABLE LAWS. THE LIMITED
WARRANTY SET FORTH IN THIS SECTION 10.1 IS IN LIEU OF ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY, WARRANTY OF
NON-INFRINGEMENT AND ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. EXCEPT
FOR THE WARRANTY EXPRESSED IN THIS SECTION 10.1, CARDINAL HEALTH MAKES NO OTHER
WARRANTY, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE PROCESSING OR THE
PRODUCT.

 

10.2                           CLIENT. CLIENT REPRESENTS, WARRANTS AND COVENANTS
TO CARDINAL HEALTH THAT:

 

A.                                   THE CLIENT-SUPPLIED MATERIALS WILL COMPLY
WITH ALL APPLICABLE SPECIFICATIONS, WILL HAVE BEEN PRODUCED IN COMPLIANCE WITH
THE APPLICABLE LAWS, AND WILL BE PROVIDED IN ACCORDANCE WITH THE TERMS AND
CONDITIONS OF THIS AGREEMENT AND THE APPLICABLE PROJECT PLAN;

 

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B.                                     IT HAS ALL NECESSARY AUTHORITY AND ALL
RIGHT, TITLE AND INTEREST IN AND TO ANY INTELLECTUAL PROPERTY RELATED TO EACH
PRODUCT THAT IS THE SUBJECT OF THIS AGREEMENT AND ANY PROJECT PLAN;

 

C.                                     NO SPECIFIC SAFE HANDLING INSTRUCTIONS
ARE APPLICABLE TO THE PRODUCT OR TO AND ANY CLIENT-SUPPLIED MATERIALS, EXCEPT AS
DISCLOSED TO CARDINAL HEALTH IN WRITING BY THE CLIENT IN SUFFICIENT TIME FOR
REVIEW AND TRAINING BY CARDINAL HEALTH PRIOR TO DELIVERY;

 

D.                                    ALL PRODUCT DELIVERED TO CLIENT BY
CARDINAL HEALTH WILL BE HELD, USED AND/OR DISPOSED OF BY THE CLIENT IN
ACCORDANCE WITH ALL APPLICABLE LAWS, RULES AND REGULATIONS;

 

E.                                      CLIENT WILL COMPLY WITH ALL LAWS, RULES,
REGULATIONS AND GUIDELINES APPLICABLE TO CLIENT’S PERFORMANCE UNDER THIS
AGREEMENT AND ITS USE OF ANY MATERIALS OR PRODUCTS PROVIDED BY CARDINAL HEALTH
UNDER THIS AGREEMENT OR ANY PROJECT PLAN; AND

 

F.                                      CLIENT WILL NOT RELEASE ANY BATCH OF
PRODUCT IF THE REQUIRED CERTIFICATES OF ANALYSIS INDICATE THAT THE PRODUCT DOES
NOT COMPLY WITH THE SPECIFICATIONS;

 

G.                                     THE CONTENT OF ALL ARTWORK PROVIDED TO
CARDINAL HEALTH COMPLIES WITH ALL APPLICABLE LAWS;

 

H.                                    CLIENT HAS ALL NECESSARY AUTHORITY AND
RIGHT, TITLE AND INTEREST IN AND TO ANY COPYRIGHTS, TRADEMARKS, TRADE SECRETS,
PATENTS, INVENTIONS AND DEVELOPMENTS RELATED TO THE PRODUCT, THE MANUFACTURE
THEREOF, AND ANY PRODUCT ARTWORK; AND

 

I.                                         THE WORK TO BE PERFORMED BY CARDINAL
HEALTH UNDER THIS AGREEMENT WILL NOT VIOLATE OR INFRINGE UPON ANY TRADEMARK,
TRADENAME, COPYRIGHT, PATENT OR OTHER RIGHTS HELD BY ANY PERSON OR ENTITY.

 

10.3                           MUTUAL. EACH PARTY HEREBY REPRESENTS AND WARRANTS
TO THE OTHER PARTY THAT:

 

A.                                   SUCH PARTY (1) IS DULY ORGANIZED, VALIDLY
EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE STATE IN WHICH IT IS
ORGANIZED, (2) HAS THE POWER AND AUTHORITY AND THE LEGAL RIGHT TO OWN AND
OPERATE ITS PROPERTY AND ASSETS, AND TO CARRY ON ITS BUSINESS AS IT IS NOW BEING
CONDUCTED, AND (3) IS IN COMPLIANCE WITH ALL REQUIREMENTS OF APPLICABLE LAW,
EXCEPT TO THE EXTENT THAT ANY NONCOMPLIANCE WOULD NOT MATERIALLY ADVERSELY
AFFECT SUCH PARTY’S ABILITY TO PERFORM ITS OBLIGATIONS UNDER THE AGREEMENT;

 

B.                                     SUCH PARTY (1) HAS THE POWER AND
AUTHORITY AND THE LEGAL RIGHT TO ENTER INTO THIS AGREEMENT AND TO PERFORM ITS
OBLIGATIONS HEREUNDER AND THEREUNDER AND (2) HAS TAKEN ALL NECESSARY ACTION ON
ITS PART TO AUTHORIZE THE EXECUTION AND DELIVERY OF THE AGREEMENT AND THE
PERFORMANCE OF ITS OBLIGATIONS HEREUNDER;

 

C.                                     THIS AGREEMENT HAS BEEN DULY EXECUTED AND
DELIVERED ON BEHALF OF SUCH PARTY, AND CONSTITUTES A LEGAL, VALID, BINDING
OBLIGATION, ENFORCEABLE AGAINST SUCH PARTY IN ACCORDANCE WITH ITS TERMS;

 

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D.                                    ALL NECESSARY CONSENTS, APPROVALS AND
AUTHORIZATIONS OF ALL AGENCIES AND OTHER PERSONS REQUIRED TO BE OBTAINED BY SUCH
PARTY IN CONNECTION WITH THE AGREEMENT HAVE BEEN OBTAINED; AND

 

E.                                      THE EXECUTION AND DELIVERY OF THIS
AGREEMENT AND THE PERFORMANCE OF SUCH PARTY’S OBLIGATIONS HEREUNDER (1) DO NOT
CONFLICT WITH OR VIOLATE ANY REQUIREMENT OF APPLICABLE LAWS OR REGULATIONS OR
ANY MATERIAL CONTRACTUAL OBLIGATION OF SUCH PARTY AND (2) DO NOT MATERIALLY
CONFLICT WITH, OR CONSTITUTE A MATERIAL DEFAULT OR REQUIRE ANY CONSENT UNDER,
ANY MATERIAL CONTRACTUAL OBLIGATION OF SUCH PARTY.

 

ARTICLE 11
CONFIDENTIAL INFORMATION

 

11.1                           MUTUAL OBLIGATION. CARDINAL HEALTH AND CLIENT
AGREE THAT THEY WILL NOT DISCLOSE THE OTHER PARTY’S CONFIDENTIAL INFORMATION
(DEFINED BELOW) TO ANY THIRD PARTY WITHOUT THE PRIOR WRITTEN CONSENT OF THE
OTHER PARTY EXCEPT AS REQUIRED BY LAW OR REGULATION; PROVIDED, HOWEVER, THAT
PRIOR TO MAKING ANY SUCH LEGALLY REQUIRED DISCLOSURE, THE PARTY MAKING SUCH
DISCLOSURE SHALL GIVE THE OTHER PARTY AS MUCH PRIOR NOTICE OF THE REQUIREMENT
FOR AND CONTENTS OF SUCH DISCLOSURE AS IS PRACTICABLE UNDER THE CIRCUMSTANCES.
NOTWITHSTANDING THE FOREGOING, EACH PARTY MAY DISCLOSE THE OTHER PARTY’S
CONFIDENTIAL INFORMATION TO ANY OF ITS AFFILIATES WHICH (A) NEED TO KNOW SUCH
CONFIDENTIAL INFORMATION FOR THE PURPOSE OF PERFORMING UNDER THIS AGREEMENT,
(B) ARE ADVISED OF THE CONTENTS OF THIS SECTION, AND (C) AGREE TO BE BOUND BY
THE TERMS OF THIS SECTION, PROVIDED, HOWEVER, THAT ONLY AN AFFILIATE TO WHICH
SUCH CONFIDENTIAL INFORMATION IS ACTUALLY DISCLOSED AND RECEIVED WILL BE BOUND
BY THE TERMS OF THIS SECTION.

 

11.2                           DEFINITION. AS USED IN THIS AGREEMENT, THE TERM
“CONFIDENTIAL INFORMATION” INCLUDES ALL SUCH INFORMATION FURNISHED BY CARDINAL
HEALTH OR CLIENT, OR ANY OF THEIR RESPECTIVE REPRESENTATIVES OR AFFILIATES, TO
THE OTHER OR ITS REPRESENTATIVES OR AFFILIATES, WHETHER FURNISHED BEFORE, ON OR
AFTER THE DATE OF THIS AGREEMENT AND FURNISHED IN ANY FORM, INCLUDING BUT NOT
LIMITED TO WRITTEN, VERBAL, VISUAL, ELECTRONIC OR IN ANY OTHER MEDIA OR MANNER.
CONFIDENTIAL INFORMATION INCLUDES ALL PROPRIETARY TECHNOLOGIES, KNOW-HOW, TRADE
SECRETS, DISCOVERIES, INVENTIONS AND ANY OTHER INTELLECTUAL PROPERTY (WHETHER OR
NOT PATENTED), ANALYSES, COMPILATIONS, BUSINESS OR TECHNICAL INFORMATION AND
OTHER MATERIALS PREPARED BY EITHER PARTY, OR ANY OF THEIR RESPECTIVE
REPRESENTATIVES, CONTAINING OR BASED IN WHOLE OR IN PART ON ANY SUCH INFORMATION
FURNISHED BY THE OTHER PARTY OR ITS REPRESENTATIVES. CONFIDENTIAL INFORMATION
ALSO INCLUDES THE EXISTENCE OF THIS AGREEMENT AND ITS TERMS.

 

11.3                           EXCLUSIONS. CONFIDENTIAL INFORMATION DOES NOT
INCLUDE, HOWEVER, INFORMATION CONCERNING CARDINAL HEALTH OR COMPANY WHICH (A) IS
OR BECOMES GENERALLY AVAILABLE TO THE PUBLIC OR WITHIN THE INDUSTRY TO WHICH
SUCH INFORMATION RELATES OTHER THAN AS A RESULT OF A BREACH OF THIS AGREEMENT,
OR (B) IS ALREADY KNOWN BY THE RECEIVING PARTY AT THE TIME OF DISCLOSURE AS
EVIDENCED BY THE RECEIVING PARTY’S WRITTEN RECORDS, OR (C) BECOMES AVAILABLE TO
THE RECEIVING PARTY ON A NON-CONFIDENTIAL BASIS FROM A SOURCE THAT IS ENTITLED
TO DISCLOSE IT ON A NON-CONFIDENTIAL BASIS, OR (D) WAS OR IS INDEPENDENTLY
DEVELOPED BY OR FOR THE RECEIVING PARTY WITHOUT REFERENCE TO THE CONFIDENTIAL
INFORMATION, AS EVIDENCED BY THE RECEIVING PARTY’S WRITTEN RECORDS.

 

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11.4                           SURVIVAL. THE OBLIGATIONS OF THIS ARTICLE 11 WILL
TERMINATE FIVE (5) YEARS FROM THE EXPIRATION OF THIS AGREEMENT.

 

11.5                           PROPRIETARY INFORMATION. THE PARTY RECEIVING
PROPRIETARY INFORMATION WILL OBTAIN NO RIGHT OF ANY KIND OR LICENSE UNDER ANY
PATENT APPLICATION OR PATENT BY REASON OF THIS AGREEMENT. ALL PROPRIETARY
INFORMATION WILL REMAIN THE SOLE PROPERTY OF THE PARTY DISCLOSING SUCH
INFORMATION OR DATA.

 

11.6                           RETURN OF CONFIDENTIAL INFORMATION. UPON
TERMINATION OF THIS AGREEMENT, THE PARTY TO WHICH PROPRIETARY INFORMATION HAS
BEEN DISCLOSED WILL, UPON REQUEST, PROMPTLY RETURN WITHIN THIRTY (30) DAYS ALL
SUCH INFORMATION, INCLUDING ANY COPIES THEREOF, AND CEASE ITS USE OR, AT THE
REQUEST OF THE PARTY TRANSMITTING SUCH PROPRIETARY INFORMATION, WILL PROMPTLY
DESTROY THE SAME AND CERTIFY SUCH DESTRUCTION TO THE TRANSMITTING PARTY; EXCEPT
FOR A SINGLE COPY THEREOF WHICH MAY BE RETAINED FOR THE SOLE PURPOSE OF
DETERMINING THE SCOPE OF THE OBLIGATIONS INCURRED UNDER THIS AGREEMENT.

 

ARTICLE 12
INTELLECTUAL PROPERTY

 

12.1                           IMPROVEMENTS ETC. TO PRODUCT. ALL IMPROVEMENTS,
DEVELOPMENTS, DERIVATIVES OR MODIFICATIONS TO THE PRODUCT, ALL RESULTS FROM ANY
PROCESS DEVELOPMENT OR VALIDATION CONCERNING PRODUCT OR ANY STABILITY STUDIES OF
PRODUCT, AND ALL RIGHTS TO ANY METHODS CONCERNING PRODUCT WHICH ARE DEVELOPED OR
VALIDATED UNDER THIS AGREEMENT, SHALL IN EVERY CASE BE OWNED EXCLUSIVELY BY
CLIENT.

 

12.2                           IMPROVEMENTS ETC. TO CARDINAL HEALTH MATERIALS.
SUBJECT TO SECTION 12.1, ALL CARDINAL HEALTH MATERIALS, AND ALL IMPROVEMENTS,
DEVELOPMENTS, DERIVATIVES OR MODIFICATIONS TO THE CARDINAL HEALTH MATERIALS,
SHALL BE OWNED EXCLUSIVELY BY CARDINAL HEALTH.

 

12.3                           IMPROVEMENTS ETC. TO CLIENT MATERIALS. SUBJECT TO
SECTIONS 12.1 AND 12.2, ALL CLIENT MATERIALS, AND ALL IMPROVEMENTS,
DEVELOPMENTS, DERIVATIVES OR MODIFICATIONS TO THE CLIENT MATERIALS, SHALL BE
OWNED EXCLUSIVELY BY CLIENT, PROVIDED, HOWEVER, THAT CLIENT HEREBY GRANTS TO
CARDINAL HEALTH A NON-EXCLUSIVE, ROYALTY-FREE LICENSE TO USE ANY AND ALL RIGHT,
TITLE, AND INTEREST IN THE CLIENT MATERIALS AS MAY BE NECESSARY FOR CARDINAL
HEALTH TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT.

 

12.4                           FURTHER ASSURANCE. IN RELATION TO INTELLECTUAL
PROPERTY ARISING UNDER THIS AGREEMENT, EACH PARTY AGREES TO ASSIST THE OTHER
PARTY, AT THE OTHER PARTY’S REQUEST AND EXPENSE, IN PREPARING AND PROSECUTING
PATENT APPLICATIONS AND PATENT EXTENSIONS OR IN OBTAINING OR MAINTAINING OTHER
FORMS OF PROTECTION ON ANY SUCH INTELLECTUAL PROPERTY WHICH THE OTHER PARTY OWNS
PURSUANT TO THIS ARTICLE 12. EACH PARTY WARRANTS THAT ALL PERSONS (INCLUDING
WITHOUT LIMITATION ITS EMPLOYEES AND SUB-CONTRACTORS) PERFORMING ACTIVITIES IN
RELATION TO THE PROJECT WILL BE ENGAGED ON TERMS CONSISTENT WITH THE PROVISIONS
OF THIS ARTICLE 12.

 

12.5                           DEFINITION OF “CARDINAL HEALTH MATERIALS”. FOR
PURPOSES HEREOF, “CARDINAL HEALTH MATERIALS” MEANS ALL CARDINAL HEALTH
PROPRIETARY INFORMATION, INTELLECTUAL PROPERTY, AND DEVELOPMENTS, INCLUDING
WITHOUT LIMITATION, ALL PATENTS, PATENT APPLICATIONS, KNOW-HOW, INVENTIONS,
DESIGNS, CONCEPTS, IMPROVEMENTS, TECHNICAL INFORMATION, MANUALS, INSTRUCTIONS OR

 

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SPECIFICATIONS, WHICH ARE OWNED, LICENSED OR USED BY CARDINAL HEALTH (EXCEPT
WHERE LICENSED BY, OR ORIGINATING FROM, CLIENT OR ITS AFFILIATES) IN DEVELOPING,
FORMULATING, MANUFACTURING, FILLING, PROCESSING OR PACKAGING OF LIQUID SOLUTIONS
OR PHARMACEUTICALS AND THE PACKAGING EQUIPMENT, PROCESSES OR METHODS OF
PACKAGING, OR ANY IMPROVEMENTS TO ANY OF THE FOREGOING, INCLUDING ANY CONTAINER,
POUCH, VIAL, AMPOULE OR OTHER FORM OF LIQUID CONTAINER DEVELOPED BY CARDINAL
HEALTH.

 

12.6                           DEFINITION OF “CLIENT MATERIALS”. FOR PURPOSES
HEREOF, “CLIENT MATERIALS” MEANS ALL PROPRIETARY INFORMATION, INTELLECTUAL
PROPERTY, AND DEVELOPMENTS, INCLUDING WITHOUT LIMITATION, ALL PATENTS, PATENT
APPLICATIONS, KNOW-HOW, INVENTIONS, DESIGNS, CONCEPTS, IMPROVEMENTS, TECHNICAL
INFORMATION, MANUALS, INSTRUCTIONS OR SPECIFICATIONS, WHICH ARE OWNED, LICENSED
OR USED BY THE CLIENT (EXCEPT WHERE LICENSED BY, OR ORIGINATING FROM CARDINAL
HEALTH OR ITS AFFILIATES RELATING TO THE PRODUCT OR THE ACTIVE INGREDIENT OR
FORMULATION THEROF).

 

ARTICLE 13
INDEMNIFICATION

 

13.1                           INDEMNIFICATION BY CARDINAL HEALTH. CARDINAL
HEALTH SHALL INDEMNIFY AND HOLD HARMLESS CLIENT, ITS AFFILIATES, DIRECTORS,
OFFICERS, EMPLOYEES AND AGENTS FROM AND AGAINST ANY SUITS, CLAIMS, LOSSES,
DEMANDS, LIABILITIES, DAMAGES, COSTS AND EXPENSES (INCLUDING COSTS, REASONABLE
ATTORNEY’S FEES AND REASONABLE INVESTIGATIVE COSTS) IN CONNECTION WITH ANY SUIT,
DEMAND OR ACTION BY ANY THIRD PARTY ARISING OUT OF OR RESULTING FROM ANY
NEGLIGENCE, WILLFUL MISCONDUCT OR BREACH OF THIS AGREEMENT BY CARDINAL HEALTH,
EXCEPT TO THE EXTENT THAT ANY OF THE FOREGOING ARISES OUT OF OR RESULTS FROM THE
BREACH OF THIS AGREEMENT BY CLIENT OR THE NEGLIGENCE OR WILLFUL MISCONDUCT OF
CLIENT.

 

13.2                           INDEMNIFICATION BY CLIENT. CLIENT SHALL INDEMNIFY
AND HOLD HARMLESS CARDINAL HEALTH, ITS AFFILIATES, DIRECTORS, OFFICERS EMPLOYEES
AND AGENTS FROM AND AGAINST ALL SUITS, CLAIMS, LOSSES, DEMANDS, LIABILITIES,
DAMAGES, COSTS AND EXPENSES (INCLUDING COSTS, REASONABLE ATTORNEY’S FEES AND
REASONABLE INVESTIGATIVE COSTS) IN CONNECTION WITH ANY SUIT, DEMAND OR ACTION BY
ANY THIRD PARTY ARISING OUT OF OR RESULTING FROM (A) ANY BREACH OF ITS
REPRESENTATIONS, WARRANTIES OR OBLIGATIONS SET FORTH IN THIS AGREEMENT; (B) ANY
MANUFACTURE, SALE, PROMOTION, DISTRIBUTION OR USE OF OR EXPOSURE TO THE PRODUCT,
INCLUDING, WITHOUT LIMITATION, PRODUCT LIABILITY OR STRICT LIABILITY;
(C) CLIENT’S EXERCISE OF CONTROL OVER THE PROCESSING UNDER THIS AGREEMENT, TO
THE EXTENT THAT CLIENT’S INSTRUCTIONS OR DIRECTIONS VIOLATE APPLICABLE LAW OR
REGULATION; (D) ANY ACTUAL OR ALLEGED INFRINGEMENT OR VIOLATION OF ANY PATENT,
TRADE SECRET, COPYRIGHT, TRADEMARK OR OTHER PROPRIETARY RIGHTS PROVIDED BY
CLIENT; OR (E) ANY NEGLIGENCE OR WILLFUL MISCONDUCT BY CLIENT, EXCEPT TO THE
EXTENT THAT ANY OF THE FOREGOING ARISES OUT OF OR RESULTS FROM THE BREACH BY
CARDINAL HEALTH OF THIS AGREEMENT, OR THE NEGLIGENCE OR WILLFUL MISCONDUCT OF
CARDINAL HEALTH.

 

13.3                           INDEMNIFICATION PROCEDURES. ALL INDEMNIFICATION
OBLIGATIONS IN THIS AGREEMENT ARE CONDITIONED UPON THE PARTY SEEKING
INDEMNIFICATION PROMPTLY NOTIFYING THE INDEMNIFYING PARTY OF ANY CLAIM OR
LIABILITY OF WHICH THE PARTY SEEKING INDEMNIFICATION BECOMES AWARE (INCLUDING A
COPY OF ANY RELATED COMPLAINT, SUMMONS, NOTICE OR OTHER INSTRUMENT), COOPERATING
WITH THE INDEMNIFYING PARTY IN THE DEFENSE OF ANY SUCH CLAIM OR LIABILITY (AT
THE INDEMNIFYING PARTY’S EXPENSE), AND NOT COMPROMISING OR SETTLING ANY CLAIM OR
LIABILITY WITHOUT PRIOR WRITTEN CONSENT OF THE INDEMNIFYING PARTY.

 

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ARTICLE 14
INSURANCE

 

14.1                           CARDINAL HEALTH. CARDINAL HEALTH SHALL, AT ITS
OWN COST AND EXPENSE, OBTAIN AND MAINTAIN IN FULL FORCE AND EFFECT THE FOLLOWING
INSURANCE DURING THE TERM OF THIS AGREEMENT:  (A) COMMERCIAL GENERAL LIABILITY
INSURANCE WITH PER-OCCURRENCE AND GENERAL AGGREGATE LIMITS OF NOT LESS THAN
$1,000,000; (B) PRODUCTS AND COMPLETED OPERATIONS LIABILITY INSURANCE WITH PER-
OCCURRENCE AND GENERAL AGGREGATE LIMITS OF NOT LESS THAN $5,000,000;
(C) WORKERS’ COMPENSATION AND EMPLOYER’S LIABILITY INSURANCE WITH STATUTORY
LIMITS FOR WORKERS’ COMPENSATION AND EMPLOYER’S LIABILITY INSURANCE LIMITS OF
NOT LESS THAN $1,000,000; (D) PROFESSIONAL SERVICES ERRORS & OMISSIONS LIABILITY
INSURANCE WITH PER CLAIM AND AGGREGATE LIMITS OF NOT LESS THAN $1,000,000
COVERING SUMS THAT CARDINAL HEALTH BECOMES LEGALLY OBLIGATED TO PAY AS DAMAGES
RESULTING FROM CLAIMS MADE BY CLIENT FOR ERRORS OR OMISSIONS COMMITTED IN THE
CONDUCT OF THE SERVICES OUTLINED IN THE AGREEMENTS. IN LIEU OF INSURANCE,
CARDINAL HEALTH MAY SELF-INSURE ANY OR A PORTION OF THE ABOVE REQUIRED
INSURANCE. IN THE EVENT THAT ANY OF THE REQUIRED POLICIES OF INSURANCE ARE
WRITTEN ON A CLAIMS MADE BASIS, THEN SUCH POLICIES SHALL BE MAINTAINED DURING
THE ENTIRE TERM OF THIS AGREEMENT AND FOR A PERIOD OF NOT LESS THAN THREE
(3) YEARS FOLLOWING THE TERMINATION OR EXPIRATION OF THIS AGREEMENT. CARDINAL
HEALTH SHALL OBTAIN A WAIVER FROM ANY INSURANCE CARRIER WITH WHOM CARDINAL
HEALTH CARRIES WORKERS’ COMPENSATION INSURANCE RELEASING ITS SUBROGATION RIGHTS
AGAINST CLIENT. CLIENT SHALL BE NAMED AS AN ADDITIONAL INSURED UNDER THE
COMMERCIAL GENERAL LIABILITY AND PRODUCTS AND COMPLETED OPERATIONS LIABILITY
INSURANCE POLICIES AS RESPECTS THE MANUFACTURING SERVICES OUTLINED IN THIS
AGREEMENT. CARDINAL HEALTH SHALL FURNISH CERTIFICATES OF INSURANCE FOR ALL OF
THE ABOVE NOTED POLICIES AND REQUIRED ADDITIONAL INSURED STATUS TO CLIENT AS
SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE AGREEMENT AND UPON RENEWAL
OF ANY SUCH POLICIES. EACH INSURANCE POLICY THAT IS REQUIRED UNDER THIS
SECTION SHALL BE OBTAINED FROM AN INSURANCE CARRIER WITH AN A.M. BEST RATING OF
AT LEAST A- VII.

 

14.2                           CLIENT INSURANCE. CLIENT SHALL, AT ITS OWN COST
AND EXPENSE, OBTAIN AND MAINTAIN IN FULL FORCE AND EFFECT THE FOLLOWING
INSURANCE DURING THE TERM OF THIS AGREEMENT:  (A) PRODUCTS AND COMPLETED
OPERATIONS LIABILITY INSURANCE WITH PER-OCCURRENCE AND GENERAL AGGREGATE LIMITS
OF NOT LESS THAN $10,000,000; (B) WORKERS’ COMPENSATION AND EMPLOYER’S LIABILITY
INSURANCE WITH STATUTORY LIMITS FOR WORKERS’ COMPENSATION AND EMPLOYER’S
LIABILITY INSURANCE LIMITS OF NOT LESS THAN $1,000,000; (C) ALL RISK PROPERTY
INSURANCE, INCLUDING TRANSIT COVERAGE, IN AN AMOUNT EQUAL TO FULL REPLACEMENT
VALUE COVERING CLIENT’S PROPERTY WHILE IT IS AT CARDINAL HEALTH’S FACILITY OR IN
TRANSIT TO OR FROM CARDINAL HEALTH’S FACILITY. IN THE EVENT THAT ANY OF THE
REQUIRED POLICIES OF INSURANCE ARE WRITTEN ON A CLAIMS MADE BASIS, THEN SUCH
POLICIES SHALL BE MAINTAINED DURING THE ENTIRE TERM OF THIS AGREEMENT AND FOR A
PERIOD OF NOT LESS THAN THREE (3) YEARS FOLLOWING THE TERMINATION OR EXPIRATION
OF THIS AGREEMENT. CLIENT SHALL OBTAIN A WAIVER FROM ANY INSURANCE CARRIER WITH
WHOM CLIENT CARRIES WORKERS’ COMPENSATION INSURANCE RELEASING ITS SUBROGATION
RIGHTS AGAINST CARDINAL HEALTH. CLIENT SHALL OBTAIN A WAIVER FROM ANY INSURANCE
CARRIER WITH WHOM CLIENT CARRIES PROPERTY INSURANCE RELEASING ITS SUBROGATION
RIGHTS AGAINST CARDINAL HEALTH. CLIENT SHALL NOT SEEK REIMBURSEMENT FOR ANY
PROPERTY CLAIM, OR PORTION THEREOF, THAT IS NOT FULLY RECOVERED FROM CLIENT’S
PROPERTY INSURANCE POLICY. CARDINAL HEALTH AND ITS SUBSIDIARIES AND PARENT
CORPORATION SHALL BE NAMED AS ADDITIONAL INSUREDS UNDER THE PRODUCTS AND
COMPLETED OPERATIONS LIABILITY INSURANCE POLICIES AS RESPECTS THE PRODUCTS AND
COMPLETED OPERATIONS OUTLINED IN THIS AGREEMENT. CLIENT SHALL FURNISH
CERTIFICATES OF INSURANCE FOR ALL OF THE ABOVE NOTED POLICIES AND REQUIRED
ADDITIONAL INSURED STATUS TO CARDINAL HEALTH AS SOON AS

 

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PRACTICABLE AFTER THE EFFECTIVE DATE OF THE AGREEMENT AND UPON RENEWAL OF ANY
SUCH POLICIES. EACH INSURANCE POLICY THAT IS REQUIRED UNDER THIS SECTION SHALL
BE OBTAINED FROM AN INSURANCE CARRIER WITH AN A.M. BEST RATING OF AT LEAST A-
VII.

 

ARTICLE 15
TERM AND TERMINATION

 

15.1                           TERM. THIS AGREEMENT SHALL COMMENCE ON THE
EFFECTIVE DATE AND SHALL CONTINUE FOR A PERIOD OF FOUR (4) CONTRACT YEARS,
UNLESS EARLIER TERMINATED UNDER SECTION 15.2 BELOW (THE “TERM”).

 

15.2                           TERMINATION BY EITHER PARTY.

 

A.                                   MATERIAL BREACH. EITHER PARTY MAY TERMINATE
THIS AGREEMENT EFFECTIVE UPON SIXTY (60) DAYS PRIOR WRITTEN NOTICE TO THE OTHER
PARTY, IF THE OTHER PARTY COMMITS A MATERIAL BREACH OF THIS AGREEMENT AND FAILS
TO CURE SUCH BREACH BY THE END OF SUCH SIXTY (60) DAY PERIOD; PROVIDED, HOWEVER,
THAT FAILURE TO PAY AMOUNTS DUE UNDER THIS AGREEMENT WITHIN FIFTEEN (15) DAYS
AFTER SUCH PAYMENTS ARE DUE (AS SET FORTH IN SECTION 7.5) SHALL CONSTITUTE CAUSE
FOR IMMEDIATE TERMINATION OF THIS AGREEMENT, OR AT CARDINAL HEALTH’S DISCRETION,
CARDINAL HEALTH SHALL BE RELIEVED OF ANY FURTHER OBLIGATION TO PERFORM UNDER
THIS AGREEMENT UNTIL ALL OUTSTANDING PAYMENTS ARE BROUGHT CURRENT.

 

B.                                     BANKRUPTCY. EITHER PARTY MAY TERMINATE
THIS AGREEMENT EFFECTIVE UPON WRITTEN NOTICE TO THE OTHER PARTY, IF THE OTHER
PARTY BECOMES INSOLVENT OR ADMITS IN WRITING ITS INABILITY TO PAY ITS DEBTS AS
THEY BECOME DUE, FILES A PETITION FOR BANKRUPTCY, MAKES AN ASSIGNMENT FOR THE
BENEFIT OF ITS CREDITORS OR HAS A RECEIVER, TRUSTEE OR OTHER COURT OFFICER
APPOINTED FOR ITS PROPERTIES OR ASSETS.

 

15.3                           EFFECT OF TERMINATION. EXPIRATION OR TERMINATION
OF THIS AGREEMENT SHALL BE WITHOUT PREJUDICE TO ANY RIGHTS OR OBLIGATIONS THAT
ACCRUED TO THE BENEFIT OF EITHER PARTY PRIOR TO SUCH EXPIRATION OR TERMINATION.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES SHALL CONTINUE UNDER SECTIONS 5, 7, 9,
10, 11, 12, 13, 16, 17 AND 18, AND SECTIONS 3.4, 6.2, 15.3, NOTWITHSTANDING
EXPIRATION OR TERMINATION OF THIS AGREEMENT.

 

ARTICLE 16
LIMITATIONS OF LIABILITY

 

16.1                           CARDINAL HEALTH SHALL HAVE NO LIABILITY UNDER
THIS AGREEMENT FOR ANY AND ALL CLAIMS FOR LOST, DAMAGED OR DESTROYED API OR
OTHER CLIENT-SUPPLIED MATERIALS WHETHER OR NOT SUCH API OR CLIENT-SUPPLIED
MATERIALS ARE INCORPORATED INTO FINISHED PRODUCT.

 

16.2                           CARDINAL HEALTH’S TOTAL LIABILITY UNDER THIS
AGREEMENT SHALL IN NO EVENT EXCEED THE TOTAL FEES PAID BY CLIENT TO CARDINAL
HEALTH FOR THE SERVICES OR BATCH OF PRODUCT GIVING RISE TO SUCH LIABILITIES,
CLAIMS OR OBLIGATIONS.

 

15

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16.3                           NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY
FOR INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF PERFORMANCE
UNDER THIS AGREEMENT, INCLUDING WITHOUT LIMITATION LOSS OF REVENUES, PROFITS OR
DATA, WHETHER IN CONTRACT OR TORT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.

 

ARTICLE 17
NOTICE

 

Any notice from either party to the other party will be effective upon receipt
and must be personally delivered to such party, sent to such party by deposit in
the United States mail, first class, postage prepaid or telecopy transmission
(with written confirmation copy to follow via United States mail) or delivered
by a reliable overnight delivery service, to the address for such party below or
such other address as a party may designate from time to time:

 

To Client:

 

CollaGenex Pharmaceuticals, Inc.
41 University Drive, Suite 200
Newtown, PA 18940
Attn:

 

 

 

With a copy to:

 

 

 

 

 

To Cardinal Health:

 

Cardinal Health PTS, LLC
14 Schoolhouse Road
Somerset, NJ 08873
Attn:  Vice President, Business Development, Solid Oral Pharmaceuticals
Facsimile:  (732) 537-6493

 

 

 

With a copy to:

 

Cardinal Health, Inc.
7000 Cardinal Place
Dublin, Ohio 43017
Attn:  Associate General Counsel,
Pharmaceutical Technologies and Services
Facsimile:  (614) 757-5051

 

ARTICLE 18
MISCELLANEOUS

 

18.1                           ENTIRE AGREEMENT; AMENDMENTS. THIS AGREEMENT IS
THE ENTIRE UNDERSTANDING BETWEEN THE PARTIES AND SUPERSEDES ANY CONTRACTS,
AGREEMENTS OR UNDERSTANDING (ORAL OR WRITTEN) OF THE PARTIES WITH RESPECT TO THE
SUBJECT MATTER HEREOF. NO TERM OF THIS AGREEMENT MAY BE AMENDED EXCEPT UPON
WRITTEN AGREEMENT OF BOTH PARTIES, UNLESS OTHERWISE PROVIDED IN THIS AGREEMENT.

 

16

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18.2                           CAPTIONS. THE CAPTIONS IN THIS AGREEMENT ARE FOR
CONVENIENCE ONLY AND ARE NOT TO BE INTERPRETED OR CONSTRUED AS A SUBSTANTIVE
PART OF THIS AGREEMENT.

 

18.3                           FURTHER ASSURANCES. THE PARTIES AGREE TO EXECUTE,
ACKNOWLEDGE AND DELIVER SUCH FURTHER INSTRUMENTS AND TO TAKE ALL SUCH OTHER
INCIDENTAL ACTS AS MAY BE REASONABLY NECESSARY OR APPROPRIATE TO CARRY OUT THE
PURPOSE AND INTENT OF THIS AGREEMENT.

 

18.4                           NO WAIVER. FAILURE BY EITHER PARTY TO INSIST UPON
STRICT COMPLIANCE WITH ANY TERM OF THIS AGREEMENT IN ANY ONE OR MORE INSTANCES
WILL NOT BE DEEMED TO BE A WAIVER OF ITS RIGHTS TO INSIST UPON SUCH STRICT
COMPLIANCE WITH RESPECT TO ANY SUBSEQUENT FAILURE.

 

18.5                           SEVERABILITY. IF ANY TERM OF THIS AGREEMENT IS
DECLARED INVALID OR UNENFORCEABLE BY A COURT OR OTHER BODY OF COMPETENT
JURISDICTION, THE REMAINING TERMS OF THIS AGREEMENT WILL CONTINUE IN FULL FORCE
AND EFFECT.

 

18.6                           INDEPENDENT CONTRACTORS. THE RELATIONSHIP OF THE
PARTIES IS THAT OF INDEPENDENT CONTRACTORS, AND NEITHER PARTY WILL INCUR ANY
DEBTS OR MAKE ANY COMMITMENTS FOR THE OTHER PARTY EXCEPT TO THE EXTENT EXPRESSLY
PROVIDED IN THIS AGREEMENT. NOTHING IN THIS AGREEMENT IS INTENDED TO CREATE OR
WILL BE CONSTRUED AS CREATING BETWEEN THE PARTIES THE RELATIONSHIP OF JOINT
VENTURES, CO-PARTNERS, EMPLOYER/EMPLOYEE OR PRINCIPAL AND AGENT.

 

18.7                           SUCCESSORS AND ASSIGNS. THIS AGREEMENT WILL BE
BINDING UPON AND INURE TO THE BENEFIT OF THE PARTIES, THEIR SUCCESSORS AND
PERMITTED ASSIGNS. NEITHER PARTY MAY ASSIGN THIS AGREEMENT, IN WHOLE OR IN PART,
WITHOUT THE PRIOR WRITTEN CONSENT OF THE OTHER PARTY, EXCEPT THAT EITHER PARTY
MAY, WITHOUT THE OTHER PARTY’S CONSENT, ASSIGN THIS AGREEMENT TO AN AFFILIATE OR
TO A SUCCESSOR TO SUBSTANTIALLY ALL OF THE BUSINESS OR ASSETS OF THE ASSIGNING
COMPANY.

 

18.8                           GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW JERSEY, EXCLUDING ITS
CONFLICTS OF LAW PROVISIONS.

 

18.9                           ALTERNATIVE DISPUTE RESOLUTION. IF A DISPUTE,
CONTROVERSY OR DISAGREEMENT (“DISPUTE”) ARISES BETWEEN THE PARTIES IN CONNECTION
WITH THIS AGREEMENT, THEN THE DISPUTE SHALL BE PRESENTED TO THE RESPECTIVE
PRESIDENTS OR SENIOR EXECUTIVES OF CARDINAL HEALTH AND CLIENT FOR THEIR
CONSIDERATION AND RESOLUTION. IF SUCH PARTIES CANNOT REACH A RESOLUTION OF THE
DISPUTE, THEN SUCH DISPUTE SHALL BE RESOLVED BY BINDING ALTERNATIVE DISPUTE
RESOLUTION IN ACCORDANCE WITH THE THEN EXISTING COMMERCIAL ARBITRATION RULES OF
THE CPR INSTITUTE FOR DISPUTE RESOLUTION (“CPR”), 366 MADISON AVENUE, NEW YORK,
NY 10017. ARBITRATION SHALL BE CONDUCTED IN THE JURISDICTION OF THE DEFENDANT
PARTY.

 

18.10                     PREVAILING PARTY. IN ANY DISPUTE RESOLUTION PROCEEDING
BETWEEN THE PARTIES IN CONNECTION WITH THIS AGREEMENT, THE PREVAILING PARTY WILL
BE ENTITLED TO ITS REASONABLE ATTORNEY’S FEES AND COSTS IN SUCH PROCEEDING.

 

18.11                     COUNTERPARTS. THIS AGREEMENT MAY BE EXECUTED IN ONE OR
MORE COUNTERPARTS, EACH OF WHICH WILL BE DEEMED AN ORIGINAL BUT ALL OF WHICH
TOGETHER WILL CONSTITUTE ONE AND THE SAME INSTRUMENT.

 

17

--------------------------------------------------------------------------------

 

18.12                     SETOFF. WITHOUT LIMITING CARDINAL HEALTH’S RIGHTS
UNDER LAW OR IN EQUITY, CARDINAL HEALTH AND ITS AFFILIATES, PARENT OR RELATED
ENTITIES, COLLECTIVELY OR INDIVIDUALLY, MAY EXERCISE A RIGHT OF SET-OFF AGAINST
ANY AND ALL AMOUNTS DUE TO CARDINAL HEALTH FROM CLIENT. FOR PURPOSES OF THIS
SECTION, CARDINAL HEALTH, ITS AFFILIATES, PARENT OR RELATED ENTITIES SHALL BE
DEEMED TO BE A SINGLE CREDITOR.

 

18.13                     FORCE MAJEURE. NEITHER PARTY WILL BE LIABLE FOR ANY
FAILURE TO PERFORM OR FOR DELAY IN PERFORMANCE RESULTING FROM ANY CAUSE BEYOND
ITS REASONABLE CONTROL, INCLUDING WITHOUT LIMITATION, ACTS OF GOD, FIRES,
FLOODS, OR WEATHER; STRIKES OR LOCKOUTS, FACTORY SHUTDOWNS, EMBARGOES, WARS,
HOSTILITIES OR RIOTS, SHORTAGES IN TRANSPORTATION; PROVIDED, HOWEVER, THAT IF
CARDINAL HEALTH CANNOT COMPLETE AN ORDER WITHIN NINETY (90) DAYS DUE TO ANY SUCH
CAUSE, CLIENT MAY TERMINATE THIS AGREEMENT WITHOUT LIABILITY TO CARDINAL HEALTH.

 

18.14                     PUBLICITY. NEITHER PARTY WILL MAKE ANY PRESS RELEASE
OR OTHER PUBLIC DISCLOSURE REGARDING THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY WITHOUT THE OTHER PARTY’S EXPRESS PRIOR WRITTEN CONSENT,
EXCEPT AS REQUIRED UNDER APPLICABLE LAW OR BY ANY GOVERNMENTAL AGENCY, IN WHICH
CASE THE PARTY REQUIRED TO MAKE THE PRESS RELEASE OR PUBLIC DISCLOSURE SHALL USE
COMMERCIALLY REASONABLE EFFORTS TO OBTAIN THE APPROVAL OF THE OTHER PARTY AS TO
THE FORM, NATURE AND EXTENT OF THE PRESS RELEASE OR PUBLIC DISCLOSURE PRIOR TO
ISSUING THE PRESS RELEASE OR MAKING THE PUBLIC DISCLOSURE.

 

IN WITNESS WHEREOF, the parties have caused their duly authorized representative
to execute this Agreement effective as of the date first written above.

 

CARDINAL HEALTH PTS, LLC

 

COLLAGENEX PHARMACEUTICALS INC.

 

 

 

By:

      /s/ David Wood

 

By:

      /s/ Colin Stewart

Name:

 David Wood

 

Name:

 Colin Stewart

Its:

      VP/GM Controlled Release

 

Its:

      President and CEO

 

      2-21-06

 

 

      3-1-06

 

18

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 EXHIBIT A

 

SPECIFICATIONS

 

19

--------------------------------------------------------------------------------

 

Specification #:  TBD
Effective Date:  TBD
Revision #:  01
Date Revised:  11/15/05

 

ORACEA Controlled Release 40 mg Capsules SPECIFICATIONS:
US Release Specifications

 

A.

 

Test

 

Specifications

 

 

 

 

 

 

 

 

1.

Appearance: Visual Inspection of 10 capsules

 

[**]

 

 

2.

Average Content – Doxycycline:

 

[**]

 

 

3.

Non-parent peaks:

 

[**]

 

 

4.

Identification (HPLC):

 

[**]

 

 

5.

Identification (TLC):

 

[**]

 

 

6.

Uniformity of Dosage Units

 

[**]

 

 

7.

Loss on Drying:
USP <731>
1-2g, 105°C, 4 (±l) hours

 

[**]

 

 

8.

Dissolution:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Time (hours)

 

Percent Dissolved

 

 

 

 

2.0

 

[**]% [**]

 

 

 

 

4.0

 

[**]% [**]

 

20

--------------------------------------------------------------------------------

 

Specification #:  TBD
Effective Date:  TBD
Revision #:  01
Date Revised:  11/15/05

 

B.                                    Sampling Plan:

 

One representative sample of the lot shall be submitted to the Cardinal Health
Winchester Analytical Laboratory of the tests listed.

 

C.                                    References:

 

1.                                       Current USP/NF

 

2.                                       CardinalHealth Test Methods: 
ATM-CFD-M0001.00, ATM-CFD-M0002.00, and ATM-CFD-M0003.00.

 

21

--------------------------------------------------------------------------------

 

Specification #:  TBD
Effective Date:  TBD
Revision #:  01
Date Revised:  11/15/05

 

ORACEA Controlled Release 40 mg Capsules SPECIFICATIONS: 
European Union Release Specifications

 

B.

 

Test

 

Specifications

 

 

 

 

 

 

 

 

1.

Appearance: Visual Inspection of 10 capsules

 

[**]

 

 

2.

Average Content – Doxycycline:

 

[**]

 

 

3.

Non-parent peaks:

 

[**]

 

 

 

 

 

 

 

 

4.

Identification (HPLC):

 

[**]

 

 

5.

Identification (TLC):

 

[**]

 

 

6.

Uniformity of Dosage Units

 

[**]

 

 

7.

Loss on Drying:
USP <731>
1-2g, 105°C, 4 (±l) hours

 

[**]

 

 

8.

Dissolution:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Time (hours)

 

Percent Dissolved

 

 

 

 

2.0

 

[**]% [**]

 

 

 

 

4.0

 

NLT [**]% [**]

 

22

--------------------------------------------------------------------------------

 

Specification #:  TBD
Effective Date:  TBD
Revision #:  01 Date
Revised:  11/15/05

 

B.                                    Sampling Plan:

 

One representative sample of the lot shall be submitted to the Cardinal Health
Winchester Analytical Laboratory of the tests listed.

 

C.                                    References:

 

1.                                       Current USP/NF, European Pharmacopoeia

 

2.                                       CardinalHealth Test Methods: 
ATM-CFD-M0001.00, ATM-CFD-M0002.00, and ATM-CFD-M0003.00.

 

23

--------------------------------------------------------------------------------

 

Specification #:  TBD
Effective Date:  TBD
Revision #:  01
Date Revised:  11/15/05

 

ORACEA SPECIFICATIONS:

 

(Doxycycline Immediate Release Pellets)

 

 

 

Test

 

Specifications

 

 

 

 

 

A.

 

Immediate Release Pellets:

 

 

 

 

 

 

 

 

 

 

1.

Appearance: Visual Inspection

 

[**]

 

 

2.

Average Content – Doxycycline:

 

[**]

 

 

3.

Identification:

 

[**]

 

 

4.

Loss on Drying:
USP <731>
1-2g, 105°C, 4 (±l) hours

 

[**]

 

 

 

 

 

 

 

8.

Dissolution:

 

 

Time:  30 minutes:

 

 

 

 

 

% Dissolved:  [**]%

 

24

--------------------------------------------------------------------------------

 

Specification #:  TBD
Effective Date:  TBD
Revision*:  01
Date Revised:  11/15/05

 

B.                                    Sampling Plan:

 

One representative sample of the lot shall be submitted to the Cardinal Health
Winchester Analytical Laboratory of the tests listed.

 

C.                                    References:

 

1.                                       Current USP/NF, European Pharmacopoeia

 

2.                                       CardinalHealth Test Methods: 
ATM-CFD-M0001.00, ATM-CFD-M0002.00.

 

25

--------------------------------------------------------------------------------

 

Specification #:  TBD
Effective Date:  TBD
Revision#:  01
Date Revised:  11/15/05

 

ORACEA SPECIFICATIONS:

 

(Doxycycline Delayed Release Pellets)

 

C.

 

Test

 

Specifications

 

 

 

 

 

 

 

 

1.

Appearance: Visual Inspection

 

[**]

 

 

2.

Average Content – Doxycycline:

 

[**]

 

 

3.

Identification (HPC):

 

[**]

 

 

4.

Loss on Drying:
USP<731>
1-2g, 105°C, 4 (±l) hours

 

[**]

 

 

8.

Dissolution:

 

 

 

 

 

 

 

 

Time (hours)

 

Percent Dissolved

 

 

 

 

2.0

 

[**]% [**]%

 

 

 

 

4.0

 

 

 

26

--------------------------------------------------------------------------------

 

Specification #:  TBD
Effective Date:  TBD
Revision #:  01
Date Revised:  11/15/05

 

B.                                    Sampling Plan:

 

One representative sample of the lot shall be submitted to the Cardinal Health
Winchester Analytical Laboratory of the tests listed.

 

C.                                    References:

 

1.                                       Current USP/NF, European Pharmacopoeia

 

2.                                       CardinalHealth Test Methods: 
ATM-CFD-M0001.00, ATM-CFD-M0002.00.

 

27

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EXHIBIT B

 

UNIT PRICING, FEES AND MINIMUM REQUIREMENT

 

 

UNIT PRICING

 

Product

 

Dosage
Form

 

Minimum
Campaign Size

 

Minimum Annual
Requirement

 

Initial Unit Price

Doxycycline Monohydrate

 

Capsule

 

8mm units

 

[**]

 

$

[**] per thousand capsules

Doxycycline Monohydrate

 

Capsule

 

12mm units

 

[**]

 

$

[**] per thousand capsules

Doxycycline Monohydrate

 

Capsule

 

20mm units

 

[**]

 

$

[**]per thousand capsules

 

The above pricing includes all raw material ingredients, processing and testing.
It does not include the cost of the Active Pharmaceutical Ingredient (“API”) or
the cost of product stability analytical testing.

 

ADDITIONAL FEES

 

Annual Stability Testing

 

TBD

 

 

 

 

 

 

 

28

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EXHIBIT C

 

FORM OF QUALITY AGREEMENT

 

To Be Attached

 

29

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