Document:

Xyrem Supply Agreement

 EXHIBIT 10.37 
 ORPHAN MEDICAL, INC. 
 AND CATALYTICA PHARMACEUTICALS, INC. 
 XYREM 
 SUPPLY AGREEMENT

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	RECITALS	  		  	3
			
	ARTICLE 1	  	DEFINITIONS	  	4
			
	ARTICLE 2	  	VALIDATION ACTIVITIES	  	9
			
	ARTICLE 3	  	EXCLUSIVITY	  	9
			
	ARTICLE 4	  	SUPPLY OF PRODUCT	  	9
			
	ARTICLE 5	  	FORECASTS, ORDERS AND DELIVERIES	  	11
			
	ARTICLE 6	  	ACTIVE INGREDIENTS	  	14
			
	ARTICLE 7	  	PRICES AND PAYMENTS	  	15
			
	ARTICLE 8	  	REPRESENTATIONS, WARRANTIES, INSPECTIONS, REGULATORY AND QUALITY	  	19
			
	ARTICLE 9	  	ACCEPTANCE, REJECTION, AND CLAIMS	  	25
			
	ARTICLE 10	  	INDEMNIFICATION	  	28
			
	ARTICLE 11	  	INVENTIONS AND PATENTS	  	30
			
	ARTICLE 12	  	CATALYTICA INTELLECTUAL PROPERTY	  	31
			
	ARTICLE 13	  	TRADEMARKS	  	31
			
	ARTICLE 14	  	CONFIDENTIALITY	  	32
			
	ARTICLE 15	  	TERM OF AGREEMENT	  	34
			
	ARTICLE 16	  	TERMINATION	  	35
			
	ARTICLE 17	  	FORCE MAJEURE	  	36
			
	ARTICLE 18	  	DISPUTE RESOLUTION	  	38
			
	ARTICLE 19	  	MISCELLANEOUS	  	39
			
	APPENDIX A	  	TECHNICAL SERVICES AGREEMENT (12 pages)	  	43
			
	APPENDIX B	  	SPECIFICATIONS	  	55
			
	APPENDIX C	  	RETURNED MATERIAL AUTHORIZATION	  	58
			
	APPENDIX D	  	PRODUCT PRICE ESTIMATES	  	59
			
	APPENDIX E	  	REGULATORY SUPPORT	  	60
			
	APPENDIX F	  	QUALITY AGREEMENT	  	62

 XYREM SUPPLY AGREEMENT 
 THIS AGREEMENT (“Agreement”) is made as of this 30th day of June, 2000 by and between ORPHAN MEDICAL, INC., a Minnesota corporation, having its principal offices at 13911 Ridgedale Drive, Minnetonka,
Minnesota 55305 (“ORPHAN”) and Catalytica Pharmaceuticals, Inc., a Delaware corporation, having its principal offices at Intersection US 13/NC11 and US 264, Greenville, North Carolina 27834 (“Catalytica”). 
 RECITALS 
 1. Catalytica manufactures
pharmaceuticals meeting regulatory and governmental requirements for commercial use. 
 2. ORPHAN develops and markets ethical
pharmaceuticals targeted to specified populations of patients. 
 3. ORPHAN and Catalytica desire to cooperate in the transfer of the
manufacture of an oral pharmaceutical product, Xyrem® (sodium oxybate) Oral Solution, containing the active ingredient sodium gamma hydroxybutyrate. 
 4. In
anticipation of the above-referenced transfer, ORPHAN and Catalytica entered into a Technical Services Agreement, dated November 20, 1999, pursuant to which Catalytica would undertake certain technical services in order to prepare its
facilities for performance of this Agreement. 
 5. Catalytica desires to manufacture the Product exclusively for sale to ORPHAN. 

6. Upon obtaining approval to market the Product, ORPHAN wishes to purchase all of its requirements for the Product in the United States from
Catalytica and Catalytica wishes to supply ORPHAN all of its requirements for the Product in the United States. 
 7. Catalytica understands
that Public Law 106-172 has designated that Product 

 
will be scheduled by the Drug Enforcement Administration (DEA) upon approval by the FDA, as Schedule III, and that ARCOS reporting will be required. ORPHAN
and Catalytica agree that the Product Price estimate is based on Schedule III security requirements. Catalytica shall have no obligation to supply the Product pursuant to this Agreement if Schedule I security requirements are required. Orphan
reserves the right to review Catalytica’s SOPs regarding handling of Controlled Substances and company policies related to employees who handle controlled substances. 
 NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows: 
 ARTICLE 1 DEFINITIONS 
 The following terms, when capitalized, shall have the following meanings in this Agreement, whether used in the singular or the plural. 
 1.1 “Acquisition Cost” in respect of a particular item means the actual invoiced price paid by either party to a Third Party for acquiring such
item, including without limitation, shipping and handling costs, insurance and customs duties. 
 1.2 “Active Ingredient” means
sodium gamma hydroxybutyrate in bulk form. 
 1.3 “Affiliate” means any corporation or non-corporate business entity which directly
or indirectly controls, is controlled by, or is under common control with a party to this Agreement. A corporation or non-corporate business entity shall be regarded as in control of another corporation if it owns or directly or indirectly controls
at least fifty (50%) of the voting stock of another corporation, or (a) in the absence of the ownership of at least fifty (50%) of the voting stock of a corporation, or (b) in the case of a non-corporate business entity, if it
possesses, directly or indirectly, whether by virtue of an ownership interest of any kind, by contract or otherwise, the power to direct or cause the direction of 

 
the management and policies of the corporation or non-corporate business entity or to elect or cause the election of a majority of the board of directors or
other governing body of such corporation or non-corporate business entity. 
 1.4 “Contract Year” means the twelve (12) month
period beginning on the first day of the month in which ORPHAN makes the first commercial sale, following NDA approval, of the Product or a product containing the Active Ingredient in a country of the Territory, and each successive twelve
(12) month period thereafter. 
 1.6 “Services” means the Services as defined and further described in the Technical Services
Agreement which is attached hereto as Appendix A and made a part hereof, as well as any additional process or analytical development activities or process or analytical development modifications for the Product to be mutually agreed upon in good
faith by the parties after the Effective Date and subsequently attached hereto. Such modifications will include timing and cost factors. 
 1.7 “DMF” means a Type II Product Master File intended for filing with the FDA. 
 1.8 “Dollars” or
“$” means United States Dollars. 
 1.9 “Product Price” means the price to ORPHAN, in Dollars per unit (for purposes of
this Agreement, a “unit” is a 200 mL bottle), for manufacture of the Product as such price may be amended from time to time during the term of, and pursuant to, this Agreement. 
 1.10 “Product” means Xyrem, an oral liquid pharmaceutical product containing the Active Ingredient packaged in 200 mL bottles or such other
package sizes as may be mutually agreed by the parties from time to time. 
 1.11 “Effective Date” means the date appearing at the
beginning of this Agreement. 

 1.12 “FDA” means the US Food and Drug Administration or any successor entity. 
 1.13 “FD&C Act” means the US Federal Food, Drug and Cosmetic Act, together with all regulations issued thereunder, as the same may be
amended from time to time. 
 1.14 “cGMPs” means the current Good Manufacturing Practices regulations promulgated by the FDA, and
any applicable amendments thereto in effect at the time of the Product’s manufacture. 
 1.15 “Manufacturing Price” means
Catalytica’s costs of labor (including allocable employee benefits and employment taxes), material (including without limitation raw materials, solvents, packaging, waste disposal and labeling, energy, utilities and other charges directly
incurred in the manufacture of the Product), plus normal production overhead (i.e. indirect labor, utilities, maintenance and depreciation of the manufacturing equipment and facilities and other allocable overhead of the manufacturing facility), all
determined in accordance with generally accepted accounting principles applied on a consistent basis . 
 1.16 “NDA” means a New
Drug Application filed with the FDA or any equivalent successor application or entity relating to the formulation of the Product. 
 1.17
“Notification” shall have the meaning prescribed in Section 19.2 hereof. 
 1.18 “Production Batch” means a
production size batch of the Product with a specified number of units, the size and range of which is to be established and mutually agreed upon by the parties. Each Production Batch is to have uniform character and quality within specified limits
produced according to a single manufacturing order during the same cycle of manufacture. 
 1.19 “Proprietary Information” means
all information or data relating to the subject matter hereof first communicated by or on behalf of one party (the “Disclosing Party”) to the other (the “Receiving Party”), whether in writing, orally, or otherwise, 

 
including without limitation, all scientific, clinical, commercial, financial and business information and data, know-how, compilations, formulae, processes,
plans, technical information, new product information, compounds, formulations, methods of product delivery, test procedures, product samples, specifications and other information or data. Information shall not be deemed Proprietary Information
which: (a) at the time of disclosure, is already in the public domain or thereafter becomes part of the public domain by publication or otherwise through no fault or act of the Receiving Party; (b) was demonstrably in the possession of the
Receiving Party prior to the time of the disclosure to it and was not acquired, directly or indirectly, from the Disclosing Party; (c) is independently disclosed to the Receiving Party by a Third Party who has not violated any confidential
obligation owed to the Disclosing Party or any Third Party; (d) was independently developed by the Receiving Party without any use of or reliance on any Proprietary Information of the Disclosing Party as shown by competent evidence; (e) is
required to be disclosed by legal process; provided that, in each case the party so disclosing information timely informs the other and uses its best efforts to limit the disclosure and maintain confidentiality to the extent possible and permits the
other party to attempt by appropriate legal means to limit such disclosure; or (f) is information which is required to be included in patent applications filed hereunder or required to be provided to the FDA or any other regulatory authority in
the Territory in order for ORPHAN to obtain registrations for the Product or otherwise to comply with applicable regulatory requirements, or for Catalytica to manufacture the Product for ORPHAN hereunder; provided, however, that no Proprietary
Information of ORPHAN or Catalytica will be disclosed in any such patent application without the prior written consent of the other Disclosing Party, which consent will not be unreasonably withheld. Written Proprietary Information shall be
identified by the Disclosing Party as being confidential by stamping the cover pages of such information “Confidential.” Proprietary Information disclosed orally, visually and/or in another tangible form shall be identified by the
Disclosing Party to the Receiving Party as confidential at the time of such disclosure and confirmed to the Receiving Party within thirty (30) days after such disclosure in a writing marked “Confidential.” 
 1.20 “Specifications” means the final specifications for the Product attached 

 
hereto as Appendix B and made a part hereof, including the final NDA specifications as approved by the FDA, packaging specifications, as well as any revised
and/or additional specifications for the Product to be developed and mutually agreed to by the parties after the Effective Date and subsequently attached hereto as a replacement for or as an addition to Appendix B. 
 1.21 “Territory” means worldwide. Catalytica will be granted manufacturing exclusivity for US. 
 1.22 “Third Party” means any entity other than Catalytica or ORPHAN or their respective Affiliates. 
 1.23 “Quality Agreement” shall mean the Quality Agreement, as further defined in Section 8.5, which shall be substantially in the form of
Exhibit F hereto. 
 1.24 “CMC” means Chemistry Manufacturing and Control. 
 1.25 “Orphan Product Exclusivity” shall refer to any period of exclusivity (including but not limited to manufacturing, marketing and
advertising exclusivity) provided by the FDA. As of the date of this Agreement, ORPHAN has applied for an “ORPHAN drug” designation from the FDA, which, if approved, will entitle ORPHAN to a period of seven (7) years exclusivity on
the Product, calculated from the date of Product approval. 
 1.26 “Lonza” refers to LONZA Group.  
 ARTICLE 2 VALIDATION ACTIVITIES 
 2.1
Catalytica’s Validation Responsibilities. Catalytica shall be responsible for regulatory required validations of its manufacture of the Product and its facilities and shall take all reasonable steps to pass inspections by the FDA and DEA
or other regulatory agencies in the Territory. In the event non-U.S. Territory regulatory agencies require process development testing beyond that required in the U.S., Catalytica agrees to provide the additional process development testing per
mutually approved protocols at terms to be negotiated in good faith by the parties. 

 ARTICLE 3 EXCLUSIVITY 
 3.1 ORPHAN, as between Catalytica and ORPHAN, shall have the exclusive right, directly or through any Affiliate, to apply for registrations and to market, distribute and sell the Product or any product containing the
Active Ingredient in the Territory, if ORPHAN determines in its business judgment to do so. Catalytica shall not market, distribute, make or sell the Product or any product containing the Active Ingredient, directly or indirectly anywhere in the
Territory, except to ORPHAN, during the term of this Agreement, or within the period of Orphan Product Exclusivity, whichever is longer. 
 ARTICLE 4
SUPPLY OF PRODUCT 
 4.1 Information Provided by ORPHAN. Prior to commencement of manufacturing operations hereunder, ORPHAN
shall provide Catalytica with a Material Safety Data Sheet (“MSDS”), toxicity information for the Product, any other information reasonably available to ORPHAN which relates to the safe conduct of the manufacturing and/or packaging
operations to be conducted by Catalytica, and any other documents necessary for Catalytica to manufacture the Product. When and as such information becomes available, ORPHAN shall promptly update such information pertinent to the manufacture and/or
packaging of the Product. 
 4.2 Manufacture and Supply. 
 During each Contract Year of this Agreement, and subject to the provisions of Section 7.2 hereof as well as other provisions herein, ORPHAN agrees to purchase all of its requirements for the Product in the United
States from Catalytica, but no less than the minimum quantities of Product indicated below: 
  

			
	 	  	 Orphan’s Minimum

	 Contract Year
	  	 Purchase of Units

	Year 1	  	0 bottles (200 mL)
	Year 2	  	90,000 bottles (200 mL)
	Year 3	  	90,000 bottles (200 mL)
	Year 4	  	90,000 bottles (200 mL)
	Year 5	  	90,000 bottles (200 mL)
	Year 6	  	90,000 bottles (200 mL)
	Year 7	  	90,000 bottles (200 mL)

 Catalytica shall be the exclusive supplier of Product in the United States to ORPHAN. Subject to Section 6.1,
Catalytica shall provide or purchase all materials and supplies necessary to manufacture the Product. Catalytica shall manufacture the Product in accordance with the Specifications and applicable cGMPs and shall package, label and/or otherwise
prepare the Product for bulk delivery to an ORPHAN-designated distribution site. 
 4.3 Packaging. Catalytica shall furnish the
packaging supplies and labels for the Products, which shall meet the Specifications, as specified in Appendix D and as required by ORPHAN at a mutually agreed to price. All such packaging and labels shall conform to applicable requirements and
regulations of FDA or other regulatory authorities in the Territory. 
 4.4 Artwork. At least ninety (90) days prior to
(a) the date for which delivery of Product is stated in the first purchase order or (b) any modification to the artwork for the Product, as applicable, and from time to time thereafter with respect to the Product, as needed, ORPHAN shall
provide at no cost to Catalytica, in a format acceptable to Catalytica and in a timely manner, digital artwork for all packaging components to be used in the manufacture of the Product, which artwork shall meet the Specifications. In addition,
Catalytica may develop such artwork at a mutually agreed cost. 
 4.5 Conditions Requiring Backup Manufacture. Catalytica agrees to
support the successful transfer of manufacturing technology to a second Product manufacturer chosen by ORPHAN to make, have made, use and sell the Product if Catalytica breaches this Agreement and fails to cure as provided in Section 16.1 (a).

 ARTICLE 5 FORECASTS, ORDERS AND DELIVERIES 
 5.1 Forecasts. ORPHAN shall provide Catalytica with forecasts of ORPHAN’S 

 
anticipated quarterly requirements of the Product for distribution and sale in the United States commencing with the twelve (12) month period that
begins at the time of FDA approval of the Product. Such forecast will be provided six (6) months in advance of anticipated FDA approval of the NDA and ORPHAN shall update such 12-month forecast on a quarterly basis thereafter. Once FDA approval
of the Product is received, ORPHAN will provide Catalytica, prior to the beginning of each calendar quarter, with forecasts of its anticipated requirements of the Product for the following four (4) calendar quarters and the forecast for the
first calendar quarter shall be firm and binding on ORPHAN. Catalytica will provide an annual anticipated schedule for manufacture and will consult with ORPHAN on schedule changes. 
  

	 	(a)	Catalytica shall not be required, but will make best efforts, subject to its obligation to other customers, to manufacture during any calendar quarter up to one hundred twenty-five
percent (125%) of the quantity of the Product ORPHAN forecasted it would purchase from Catalytica during such quarter in its most recent forecast covering such quarter. Catalytica will promptly communicate with ORPHAN as to its ability to
produce quantities requested. 

  

	 	(b)	When and as ORPHAN proposes to commence its distribution and sale of the Product outside the United States, ORPHAN shall supplement its 12- month forecast accordingly to indicate
the additional requirements of the Product for such purposes. 

  

	 	(c)	If Catalytica manufactures the Product with a lead time of more than ninety (90) days, ORPHAN shall not be required to pay any additional storage, or pay for the Product sooner
than as set forth in Section 7.7 nor shall any advance manufacture lead to a violation of the warranty of expiration date set forth in Section 8.1. 

 5.2 Orders. ORPHAN shall order the manufacturing of the Product by Catalytica pursuant to written purchase orders, including delivery dates, with
not less than 

 
ninety (90) days “lead time” prior to the requested delivery dates specified therein. Each purchase order for the Product shall be in
Production Batch sizes or whole multiples thereof and shall be for not less than three (3) batches totaling not less than 45,000 units. The terms contained in this Agreement shall govern over all purchase orders or sales orders of the Product
hereunder and shall not be varied by the terms of any ORPHAN purchase order or Catalytica sales order or invoice. If ORPHAN requires manufacture of the Product with less than ninety (90) days lead time, Catalytica shall use reasonable efforts ,
but shall not otherwise be obligated, to accommodate ORPHAN’S requirements. Catalytica shall not manufacture the Product except upon receipt of an ORPHAN purchase order to ensure a supply of the Product with the maximum expiration dating.

 5.3 Late Manufacture and Delivery. When ORPHAN submits a purchase order at least ninety (90) days prior to the required
delivery date, or 105 days in the event the Product is to be shipped, used or sold outside the United States, Catalytica shall confirm receipt of this order. In the event of unexpected delays owing to manufacturing problems associated with the
Product, Catalytica will inform ORPHAN promptly and action to be taken will be jointly decided. 
 5.4 Delivery Terms. The terms of
delivery for (a) any Active Ingredients delivered by or on behalf of ORPHAN to Catalytica hereunder and (b) the Product shall be F.O.B. Catalytica’s Greenville, North Carolina plant, freight collect with regard to the Product. At its
written request, ORPHAN may delay delivery of Product for up to thirty (30) days from the issue date of COC/COA. Catalytica shall select the carrier and arrange for shipment. Subject to any security interest reserved and granted pursuant to
this Agreement, title and risk of loss and/or damage to the Product shall pass to ORPHAN upon delivery of the Product to the carrier at Catalytica’s Greenville, North Carolina plant. 
 5.5 Purchase Quantities. Each purchase order shall specify the quantity of units of Product being ordered. Quantities actually shipped pursuant to
a given purchase order may vary from the quantities reflected in such purchase order by up to five percent (5%) and still be deemed to be in compliance with such purchase order; provided, however, ORPHAN shall only be invoiced and
required to pay for the quantities of Product which Catalytica actually ships to ORPHAN. 

 5.6 Certifications. For each Production Batch of the Product manufactured for ORPHAN hereunder,
Catalytica shall furnish the following to ORPHAN at the time of delivery. Originals are to be retained by Catalytica: 
  

	 	(a)	representative samples of such batch for assay and other testing; 

  

	 	(b)	batch records and quality assurance data for such batch; and 

  

	 	(c)	a certificate of analysis that such batch conforms to the Specifications and a certificate of compliance which confirms that the Product was manufactured, tested, and delivered in
full compliance with all applicable laws and regulations. 

 In addition, ORPHAN shall ensure that Lonza furnishes to
Catalytica with each shipment of Active Ingredients hereunder a certificate of analysis for each Active Ingredient reflecting that each Active Ingredient meets the Specifications. 
 ARTICLE 6. ACTIVE INGREDIENTS 
 6.1 Active Ingredients Supply. On ORPHAN’S behalf,
Catalytica shall submit purchase orders to Lonza for the Active Ingredients for the Product. ORPHAN shall be solely responsible for delivery of Active Ingredients to Catalytica and shall be solely responsible to Lonza for payment for the Active
Ingredients delivered to Catalytica. Within thirty (30) days after submitting each purchase order for Product, ORPHAN shall ensure that Lonza provides to Catalytica sufficient quantities of Active Ingredients necessary for Catalytica to
manufacture Product thereunder , as well as the certificates of analysis as set forth in Section 5.6 hereof. In the event ORPHAN is unable to provide such Active Ingredients within any such thirty (30) day period, the ninety
(90) days’ (105 days’ if the Product is to be shipped, used or sold outside the United States) “lead time” period for the manufacture of Product under the affected purchase order shall be extended for a period of two
(2) days for each day of delay in the supply of Active Ingredients by ORPHAN. Upon request by Catalytica, ORPHAN shall promptly send Catalytica all reference standards relating to the Active Ingredients developed by or for ORPHAN. ORPHAN shall
ensure that all imported Active Ingredients or other materials supplied to Catalytica by or on behalf of ORPHAN comply with all applicable 

 
laws and regulations relating to the import of such Active Ingredients and materials and receive all required governmental and regulatory approvals,
including without limitation customs and FDA approvals. 
 6.2 Supply by Catalytica. At ORPHAN’S request and upon ninety
(90) days prior written notice, Catalytica shall supply the Active Ingredients for the Product and in that event, notwithstanding Section 7.1 hereof, the Product Price will be increased to reflect Catalytica’s Acquisition Costs of the
Active Ingredients. 
 6.3 Manufacturing Loss. Catalytica shall use all reasonable care to prevent manufacturing waste of the Active
Ingredients supplied by ORPHAN for the manufacture of the Product and shall be accountable to ORPHAN for Catalytica’s use of such Active Ingredients. Accordingly, Catalytica shall grant credits or pay to ORPHAN its Acquisition Costs of Active
Ingredients lost by Catalytica, due to Catalytica’s negligence or willful misconduct, in excess of normal manufacturing loss. For purposes of this Agreement, the normal manufacturing loss for any given Production Batch shall be mutually
established by Catalytica and ORPHAN following Catalytica’s manufacture of twelve (12) Production Batches, not to exceed 5%. Catalytica shall dispose of manufacturing waste consistent with its handling of other waste and in compliance with
DEA requirements 
 6.4 Title to Active Ingredients Supplied by ORPHAN. ORPHAN shall retain title to all Active Ingredients supplied
to Catalytica. 
 ARTICLE 7 PRICES AND PAYMENTS 
 7.1 First Contract Year Manufacturing Price. After completion of the Services as identified in the Technical Services Agreement attached as Appendix A, Catalytica will notify ORPHAN of the Product Price that
ORPHAN shall pay to Catalytica for any orders of the Product manufactured during the first Contract Year. Subject to Section 6.2 hereof, the Product Price for the first Contract Year shall be no higher than the Product Price estimate set forth
in Appendix D for the volume range which is appropriate unless 

 
assumptions listed in Appendix D are no longer valid. The Product Price for the first Contract Year will be lower than the maximum Product Price estimate
contained in Appendix D to the extent that there are improvements in the Manufacturing Price thereof from the assumptions for Manufacturing Prices set forth in Appendix D. 
 7.2 Minimum Purchase Requirements. In the event ORPHAN does not meet the minimum purchase requirements set forth in Section 4.2 hereof with
respect to any Contract Year, ORPHAN shall within thirty (30) days after the end of such Contract Year pay Catalytica the Product Price less any packaging material costs applicable at the end of such Contract Year for the quantity of Product
not purchased that would satisfy the applicable minimum purchase requirement. 
 7.3 Annual Price Adjustment Notification. At least
sixty (60) days prior to the end of the first Contract Year of this Agreement and each Contract Year thereafter, Catalytica shall notify ORPHAN of the Product Price for the next succeeding Contract Year provided, however, that the Product Price
for each new Contract Year shall be equal to the then current price increased by a percentage amount equal to the percentage increase in the Producer Price Index for Finished Goods, Pharmaceutical Preparations, Ethical (Prescription), series code
PCU-2834 #1, issued by the Bureau of Labor Statistics, U.S. Department of Labor, or comparable successor index, during the twelve (12) month period ending with the most recent month for which published monthly statistics are available as of the
first day of such new price year (“PPI”). Increases in the Product Price pursuant to this Section 7.3 shall become effective as of the anniversary date of the Effective Date. 
 7.4 Specification Changes. 
  

	 	(a)	Specification Changes. In the event that ORPHAN wishes to change the Specifications, or in the event that ORPHAN is required to change the Specifications pursuant to
applicable law or regulation or in response to the order or request of a governmental authority or regulatory body, the following provisions will apply. 

 (1) ORPHAN shall promptly advise Catalytica in writing of any such change(s) 

 
to the Specifications, and Catalytica shall promptly advise ORPHAN as to any scheduling and/or Product Price adjustments which may result from any such
change(s), if any. The notification and approval procedure shall be in accordance with APPENDIX F, as well as any additional standard operating procedures (i.e., change control procedures) agreed upon by ORPHAN and Catalytica in writing from
time to time. 
  

	 	(2)	Prior to implementation of such change(s) to the Specifications, ORPHAN and Catalytica shall negotiate in good faith in an attempt to reach agreement on (i) the new Product
Price, if any, for any Drug Product and/or Finished Product provided hereunder by Catalytica which embodies such change(s) to the Specifications, giving due consideration to the effect of such change(s) on Catalytica’s manufacturing costs for
Drug Product and/or Finished Product and (ii) any other amendments to this Agreement which may be necessitated by such changes (e.g., an adjustment to the lead time for Firm Orders). Implementation of such change(s) to the Specifications
shall be as set forth in APPENDIX F. 

  

	 	(3)	ORPHAN will reimburse Catalytica for the reasonable and necessary expenses incurred by Catalytica as a result of any such change(s) to the Specifications , including, but not
limited to, reimbursing Catalytica for its validation and development costs and capital expenditure costs. 

  

	 	(4)	 If any such change(s) to the Specifications renders obsolete or unusable any materials or components for Drug Product or Finished Product, and to the extent such
materials or components may not be returned to the appropriate vendor for a credit , ORPHAN shall purchase from Catalytica, at Catalytica’s Acquisition Cost, that amount of inventory of materials or components, as the case may be, so rendered
obsolete or unusable, not to exceed the amount of such materials or components which would have 

	 	 
been required for Catalytica to manufacture and supply the total quantity of Drug Product and/or Finished Product specified in Firm Orders currently pending
and not yet filled hereunder. 

 7.5 Taxes. The Product Price does not include sales, use, consumption, or excise
taxes of any taxing authority. The amount of such taxes, if any, will be added to the Product Price in effect at the time of shipment thereof and shall be reflected in the invoices submitted to ORPHAN by Catalytica pursuant to this Agreement. ORPHAN
shall pay the amount of such taxes to Catalytica in accordance with the payment provisions of this Agreement. 
 7.6 Additional
Payments. As additional consideration for Catalytica’s performance of its obligations hereunder, ORPHAN shall pay Catalytica the amounts set forth below (with all payments being due within thirty (30) days of receipt of the relevant
Catalytica invoice, unless otherwise provided below): 
 (a) ORPHAN shall pay Catalytica, at Catalytica’s standard hourly rates, for
regulatory consulting services performed in connection with this Agreement. These services are to be approved in advance by Orphan. 
 (b)
ORPHAN shall reimburse Catalytica for all reasonable and necessary travel and lodging expenses incurred in the performance of this Agreement which have been requested or approved by ORPHAN. 
 7.7 Cost Reductions Through Process Improvements. To encourage active and open consideration of Manufacturing Price reductions, it is agreed that
any cost reduction benefit will be shared based on Catalytica’s and ORPHAN’S relative contributions to funding the cost reduction benefit. Proposals for improvements will be outlined in writing or communicated verbally and will detail how
the improvement should be realized. This sharing of benefits will come into effect only after (i) full amortization of the capital investment (if any) made necessary to implement the cost improvement and (ii) full amortization of the
associated development costs (including without limitation, laboratory and validation work, engineering costs, and any associated regulatory costs.) 

 7.8 Invoice Payment. Payment for the Product shall be due net thirty (30) days from the date
of the invoice therefor, provided that no invoice shall be dated prior to the date of actual release of the Product reflected therein. All amounts not paid when due shall bear interest from the due date at the rate of one and one-half percent
(11/2%) per month (or such other percentage, if lower, as shall not exceed the maximum rate permitted by law), and ORPHAN shall be responsible for reasonable attorneys’ fees and expenses incurred by Catalytica in connection with the
collection thereof. 
 ARTICLE 8 REPRESENTATIONS, WARRANTIES, INSPECTIONS, REGULATORY AND QUALITY 
 8.1 Representations and Warranties. 
 (a) ORPHAN represents and warrants to Catalytica that: 
 (i) the execution of this Agreement and the performance by
ORPHAN of its obligations hereunder have been duly authorized by all necessary corporate action and are within the power and authority of ORPHAN; 
 (ii) the processes transferred to Catalytica by ORPHAN pursuant to the Services do not infringe any Third Party patents, copyrights, trademarks, trade secrets or other Third Party intellectual property rights;

 (iii) at the time it releases or causes to be released the Active Ingredients to Catalytica for use in the manufacture of
the Product, the Active Ingredients shall meet the specifications therefor and shall be suitable for use in the manufacture of the Product; and 
 (iv) that upon delivery to Catalytica, no Active Ingredients constituting or being part of any shipment or other delivery now or hereafter made to Catalytica will be adulterated or misbranded within the meaning of the
FD&C Act or would be an article which may not be introduced into interstate commerce under the provisions of Section 404 or 505 of the FD&C Act. 
 (b) Catalytica represents and warrants to ORPHAN that: 
 (i) The execution of this Agreement and the performance by 

 
Catalytica of its obligations hereunder have been duly authorized by all necessary corporate action and are within the power and authority of Catalytica;

 (ii) To the best of its knowledge, Catalytica will not use in any capacity persons, or the services of persons that are
debarred, are on the Debarment List, or that have been convicted of actions that could lead to debarment as described in Section 306(a) and (b) of the FD&C Act,; and 
 (iii) at the time of sale and shipment by Catalytica, each Production Batch will: 
 (A) have an expiration date equal to that approved by the FDA, via the initial NDA submission or via extended stability study data
subsequently submitted; 
 (B) conform to the Specifications; and will have been stored in accordance with storage
specifications; 
 (C) have been manufactured in compliance with all applicable laws and regulations, including, without
limitation, current cGMP regulations; 
 (D) not be adulterated or misbranded by Catalytica within the meaning of the
FD&C Act, as amended, or be an article which may not be introduced into interstate commerce under Sections 404 or 505 of such Act; 
  

	 	(E)	be free from all material liens and encumbrances provided, however, THE WARRANTIES SET FORTH HEREIN ARE EXPRESSLY IN LIEU OF AND EXCLUDE, AND CATALYTICA EXPRESSLY DISCLAIMS AND
NEGATES, ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, ARISING BY OPERATION OF LAW OR OTHERWISE, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS’
and 

 (F) be shipped in accordance with Orphan’s reasonable instructions. 
 (c) Catalytica shall have no responsibility for, or liability with respect to, any Product that fails to comply with the warranties set
forth in Section 8.1(b) hereof due in whole or in part to the failure of any Active Ingredient to comply with the warranties set forth in this Section 8.1. 
 8.2 Manufacturing Audits and Observation Rights. 
 (a) Annual MA. With respect to any Contract
Year, ORPHAN shall have the right to conduct one (1) Manufacturing Audit (as defined below) according to the terms specified in Sections 8.2(b) and 8.2(c) hereof (such annual Manufacturing Audit to be hereinafter referred to as an
“Annual MA”). 
 (b) Event MA. In addition to the Annual MA referred to in Section 8.2(a) hereof, in the event
that (i) Catalytica shall receive a “Warning Letter” from the FDA relating to the manufacture, packaging or labeling of the Product by Catalytica, (ii) ORPHAN has rejected a shipment of Product for a mutually agreed upon failure
to meet Specifications or (iii) ORPHAN or Catalytica shall have received a series of complaints (i.e., 3 or more complaints on at least 2 Production Batches) from Third Parties within any Contract Year relating to the manufacturing
process for the Product (individually or collectively, an “Event”), ORPHAN shall have the right to conduct an additional Manufacturing Audit or Audits according to the terms specified in Section 8.2(c) hereof (such Event
Manufacturing Audit or Audits to be hereinafter referred to as an “Event MA”). It is understood and agreed, however, that with respect to any Contract Year, if ORPHAN has not yet conducted an Annual MA and ORPHAN elects to exercise
its rights with respect to an Event MA, then in such case, such Event MA and Annual MA shall be conducted at the same time; provided, however, an Annual MA shall not be conducted within six (6) months of the immediately preceding
Annual MA. 
 (c) Definition. For purposes of this Agreement, the term 

 
“Manufacturing Audit” shall mean an audit by no more than two (2) employees and/or one (1) agent of ORPHAN of that portion of
Catalytica’s manufacturing facility where the Product is manufactured for purposes of reviewing Catalytica’s procedures and processes used in manufacturing the Product. Any such employees and/or agent shall be accompanied by Catalytica
personnel at all times, shall be qualified to conduct manufacturing audits, shall comply with Catalytica’s rules and regulations relating to facility security, health and safety, and shall execute a written agreement to maintain in confidence
all information obtained during the course of any such audit except for disclosure to ORPHAN. Each Manufacturing Audit shall be conducted during Catalytica’s normal business hours and upon at least sixty (60) days’ prior written
notice to Catalytica in the case of an Annual MA, or upon at least ten (10) days’ prior written notice to Catalytica in the case of an Event MA. The written notice shall identify any specific audit requests that ORPHAN intends to make of
Catalytica and ORPHAN’S contact person with regard to the Manufacturing Audit. In no event shall a Manufacturing Audit exceed three (3) days in duration (ORPHAN will be billed at Catalytica’s standard full time equivalent rates for
any Manufacturing Audit that, with Catalytica’s permission, exceeds three (3) days), and in all cases ORPHAN shall ensure that its employees or agents will conduct each Manufacturing Audit so as not to interfere with the normal and
ordinary operation of Catalytica’s manufacturing facility. All Manufacturing Audits shall be at ORPHAN’S sole expense. 
 (d)
Observation Rights. In addition to the Annual MA and Event MA referred to in Sections 8.2(a) and (b) hereof, ORPHAN shall have the right to be present at and to observe up to two (2) production runs of the Product in any Contract
Year. Such observations shall be conducted by no more than two (2) employees and/or one (1) agent of ORPHAN solely for purposes of observing Catalytica’s manufacture of the Product. Any such employees and/or agent shall be accompanied
by Catalytica personnel at all times, shall comply with Catalytica’s rules and regulations relating to facility security, health and safety, and shall execute a written agreement to maintain in confidence all information obtained during the
course of any such observation. Each observation shall be conducted during Catalytica’s normal business hours and upon at least ten (10) days’ prior written notice to Catalytica. In all cases ORPHAN shall ensure that its employees or
agents will conduct each observation so as 

 
not to interfere with the normal and ordinary operation of Catalytica’s manufacturing facility. All observations shall be at ORPHAN’S sole expense.
Upon ORPHAN’S request, Catalytica shall notify ORPHAN at least thirty (30) days in advance of any production run of the Product. 
 (e) Limitation. Except as set forth in this Section 8.2, neither ORPHAN nor its Affiliates, employees or agents shall have access to Catalytica’s manufacturing facilities. 
 8.3 Regulatory correspondence and Inspections. Catalytica shall promptly inform ORPHAN of any regulatory correspondence or inspection with respect
to Catalytica’s manufacture of the Product as follows: 
  

	 	(a)	Catalytica shall provide ORPHAN with copies of any correspondence and other documentation received or prepared by Catalytica in connection with the manufacture and testing of the
Product in the Territory, including, but not limited to, copies of the proposed NDA (but only of those portions for which Catalytica is responsible) and of the potential DMF for the Product and of annual submissions to the FDA and other regulatory
authorities in the Territory. Copies of all such correspondence or other documentation prepared by Catalytica shall be reviewed and approved by ORPHAN prior to its submission, such approval not to be unreasonably withheld. 

 

	 	(b)	If Catalytica receives any regulatory correspondence or comments from any federal, state, or local regulatory agency related to its manufacture of the Product, or affecting the
Product, requiring a response or action by Catalytica, including, without limitation, receipt of an FDA Form 483 (Inspectional Observations) or an FDA “Warning Letter”, Catalytica shall immediately provide ORPHAN with a copy of each such
regulatory correspondence or comment and a copy of Catalytica’s proposed response thereto for ORPHAN’S review and approval (such approval not to be unreasonably withheld or delayed) prior to its submission if Catalytica’s manufacture
of additional products are not involved. In cases where Catalytica’s manufacture of additional products are involved, a good faith effort will be made to reach joint approval within an appropriate timeframe. 

	 	(c)	If Catalytica’s manufacturing facility is inspected by representatives of any federal, state, or local regulatory agency in connection with Catalytica’s manufacture of the
Product, including, but not limited to, any pre-NDA approval inspection by the FDA, Catalytica shall notify ORPHAN within one (1) working day (by telephone and, if possible, by fax or letter) upon learning of such inspection, and shall supply
ORPHAN with copies of any correspondence or portions of correspondence which relate to such regulatory inspection. ORPHAN may send representatives to Catalytica’s manufacturing facility to observe any portion of such regulatory inspection
relating to the Product. 

 8.4 Regulatory Support. 
 (a) Catalytica will provide ORPHAN with standard regulatory support as identified under the heading “Regulatory Support” in Appendix E attached
hereto. In addition, Catalytica shall provided ORPHAN with regulatory consulting services as identified under the heading “Regulatory Consulting” in Appendix E attached hereto. Regulatory support services, as identified in Appendix E,
shall be at no additional charge to ORPHAN; regulatory consulting services shall be billed at Catalytica’s standard hourly rates and payable pursuant to Section 7.7 of this Agreement. Additional regulatory services and/or documentation may
be provided by Catalytica, subject to agreement of the parties and subject to additional charges. 
 (b) Notwithstanding the above or
anything in this Agreement or Appendix E to the contrary, ORPHAN is solely responsible for (i) its use of any documentation provided by Catalytica, including without limitation use in any regulatory submission to the FDA or any other regulatory
agency inside or outside of the United States, (ii) document control and retention, (iii) determining the suitability of any documentation provided by Catalytica hereunder for use in any regulatory submission; and (iv) all regulatory
submission, CMC and other regulatory strategies. 
 (c) Catalytica may, at its option, retain copies of any documentation provided to ORPHAN
hereunder; provided, however, that Catalytica cannot and does not provide any assurances that Catalytica’s records will match or otherwise correspond to any submission that ORPHAN may provide to the FDA or any other regulatory agency inside or
outside the United States. 

 (d) ORPHAN shall provide Catalytica with all documents reasonably requested by Catalytica relating to the
FDA’s pre-approval inspection of Catalytica’s manufacturing facility, including, but not limited to, development reports, CMC sections of ORPHAN’S NDA and stability data. In addition, ORPHAN shall provide to Catalytica at least thirty
(30) days prior to filing with the FDA a copy of ORPHAN’S annual report (see 21 C.F.R. Section 314.81(b)(2)(iv)) with respect to the manufacture and control of the Product , and ORPHAN shall take into consideration any Catalytica
comments to such annual report with respect to the Product. Notwithstanding the foregoing or anything in this Agreement to the contrary, ORPHAN shall be solely responsible for the CMC regulatory strategy. 
 8.5 Quality Agreement. Catalytica and ORPHAN will negotiate in good faith and use their best efforts to arrive at a mutually acceptable Quality
Agreement, which shall be substantially in the form attached hereto as Exhibit F, to further detail the quality assurance obligations and responsibilities of the parties with respect to the Product. Notwithstanding anything to the contrary in this
Agreement or in any other document or agreement, in the event of a conflict between this Agreement and the Quality Agreement, this Agreement shall govern and control. 
 ARTICLE 9 ACCEPTANCE, REJECTION, AND CLAIMS 
 9.1 Placed on Hold. In the event that a
production batch is placed on hold, Catalytica will work to resolve the hold within thirty (30) days. If the hold can not be resolved within (30) days a replacement production batch will be produced , at Orphan’s expense. A batch
placed on hold will be handled as per sections 9.2 and 9.3 herein. 
 9.2 Acceptance and Rejection. Each shipment shall be deemed
accepted by ORPHAN and considered to conform to the Specifications and the other warranties set forth in Section 8.1(b) which relate to quality unless ORPHAN gives Catalytica notice in writing that it does not consider a particular shipment to
conform, together with supporting 

 
documentation specifying the manner in which the Product fails to meet such warranties or the Specifications, within thirty (30) days of receipt of such
shipment (or, in the case of nonconformity that could not be reasonably discovered by ORPHAN’S analysis within ten (10) days of such discovery). ORPHAN will analyze (or cause to be analyzed by its designated product manufacturer) each
shipment of Product using the validated methods approved by the FDA for release of Product. Such testing will be done for acceptance or rejection of the lot. If ORPHAN gives Catalytica notice of rejection, Catalytica shall thereupon be given access
to the shipment in question to conduct its own analysis thereof, and the parties will endeavor to agree amicably as to whether or not the shipment does conform to the Specifications and such other warranties and, if not, whether such non-compliance
was due to any breach on the part of Catalytica. 
 In the event that the parties are unable to agree as to whether or not the shipment conforms with the
Specifications or other warranties set forth in Section 8.1(b), the question will be submitted to an independent quality control laboratory which the parties shall mutually agree upon. Cost for the independent quality control laboratory shall
be borne by the party whose results are shown by such laboratory to have been wrong. During the pendency of a dispute that requires settlement by an independent laboratory under this section, if requested to do so by ORPHAN, Catalytica will replace,
at ORPHAN’S expense, the portion of such shipment under dispute until such dispute is resolved. 
 9.3 Rejected Shipments. If the
nonconformity in a rejected shipment of the Product was due to any action or inaction of ORPHAN or the carrier subsequent to shipment (F.O.B. Catalytica’s Greenville, North Carolina plant) of the Product by Catalytica or results from Active
Ingredients supplied by ORPHAN, Catalytica shall have no liability for such rejected shipment. If the nonconformity in a properly rejected shipment of the Product was due to Catalytica’s negligence or willful misconduct prior to shipment
(F.O.B. Catalytica’s Greenville, North Carolina plant), Catalytica at its cost and option shall either credit ORPHAN’S account for the full Manufacturing Price of such shipment or replace it with a conforming shipment within thirty
(30) days of the Notification of rejection. Such credit or replacement will be ORPHAN’S sole remedy for such rejected Product provided Catalytica provides replacement or credit within thirty (30) days of Notification of rejection.

 9.4 Disposal; Return Material Authorization. If ORPHAN expects to make a claim against Catalytica
with respect to a rejected shipment of the Product, ORPHAN shall not dispose or allow the disposal of such Product shipment without the express written authorization and instructions of Catalytica. ORPHAN shall not return any rejected shipment of
the Product to Catalytica without a Return Material Authorization (“RMA”) from Catalytica (Appendix C). Upon written request of ORPHAN, Catalytica shall promptly issue an RMA for any rejected shipment, provided, however, appropriate
samples may be retained as evidence of the basis for such rejection. If the Product is returned to Catalytica, all risk of loss and/or damage to such Product shall remain with ORPHAN unless and until such Product is returned to such place as
Catalytica designates in writing. 
 9.5 Product Recalls. Each party shall promptly notify the other party if any batch of the Product
is alleged or proven to be the subject of a recall, market withdrawal or correction ordered by the FDA or any other regulatory authority in the Territory. The parties shall cooperate in good faith to handle and dispose of such recall, market
withdrawal or correction; provided, however, that in the event of a disagreement as to any matters related to such recall, market withdrawal or correction, ORPHAN’S decision shall prevail. ORPHAN shall bear all the costs of any such recall,
market withdrawal or correction unless such recall, market withdrawal or correction was solely the result of Catalytica’s negligence or willful misconduct, or breach of Article 8.1(b), in which case Catalytica shall upon substantiation bear the
direct cost of administering such recall, market withdrawal, or correction; provided, however, in no event shall Catalytica’s aggregate liability with regard to any recall, market withdrawal or correction exceed the amount of consideration
received by Catalytica from ORPHAN hereunder for the Product subject to such recall, market withdrawal or correction. Catalytica will not bear the cost for recalls made as a result of errors that could have been detected by ORPHAN through acceptance
and rejection testing as outlined in this Article 9. ORPHAN shall in all events be responsible for conducting any recalls, market withdrawals or corrections with respect to the Product. 

 ARTICLE 10 INDEMNIFICATION 
 10.1 Catalytica’s Indemnification of ORPHAN. Catalytica hereby indemnifies, defends, and holds ORPHAN, its Affiliates and their respective directors, officers, employees, agents; successors and assigns
harmless from and against any and all damages, judgments, claims, suits, actions, liabilities, costs and expenses (including, but not limited to, reasonable attorneys’ fees) resulting from any Third Party claims or suits arising solely out of
(a) Catalytica’s material breach of any of its warranties or representations hereunder or (b) Catalytica’s negligent acts or omissions or willful misconduct in the manufacture or labeling of the Product; provided, however,
Catalytica’s collective, aggregate liability under this Section 10.1 shall not exceed seven and one-half (7.5) million dollars. 
 10.2 ORPHAN’S Indemnification of Catalytica. Except as otherwise provided in Section 10.1 above, ORPHAN hereby indemnifies, defends, and holds Catalytica, its Affiliates and their respective directors, officers, employees,
agents, successors and assigns harmless from and against any and all claims, damages, judgments, suits, actions, liabilities, costs and expenses (including, but not limited to reasonable attorneys’ fees) arising out of or connected with
(a) the use, handling, distribution, marketing or sale of the Product (except to the extent caused solely by Catalytica’s negligent acts or omissions or willful misconduct in the manufacture or labeling of the Product), (b) ORPHAN’S
material breach of any of its warranties or representations hereunder, (c) ORPHAN’S negligent acts or omissions or willful misconduct or (d) any proceeding instituted by or on behalf of a Third Party based upon a claim that the
manufacture, use or sale of the Product infringes a United States patent or any other proprietary rights. 
 10.3 Indemnification
Procedures. A party (the “Indemnitee”) which intends to claim indemnification under this Article 10 shall promptly notify the other party (the “Indemnitor”) in writing of any action, claim or other matter in respect of which
the Indemnitee or any of its Affiliates, or any of their respective directors, officers, employees, or agents intend to claim such indemnification; provided, however, the failure to provide 

 
such notice within a reasonable period of time shall not relieve the Indemnitor of any of its obligations hereunder except to the extent the Indemnitor is
prejudiced by such failure. The Indemnitor shall be in charge of and control of any such investigation, negotiation, compromise, settlement and defense and shall have the right to select counsel with respect thereto, provided that the Indemnitor
shall promptly notify the Indemnitee of all developments in the matter. In no event shall the Indemnitor or Indemnitee compromise or settle any such matter without the prior written consent of the other party, which shall not be bound by any such
compromise or settlement absent its prior consent, which shall not be unreasonably withheld or delayed. The Indemnitee, its Affiliates, and their respective directors, officers, employees, and agents shall cooperate fully with the Indemnitor and its
legal representatives in the investigation, negotiation, compromise, settlement and defense of any action, claim or other matter covered by this indemnification. The Indemnitee shall have the right, but not the obligation, to be represented by
counsel of its own selection and at its own expense. 
 10.4 Survival of Indemnification Obligations. The provisions of this Article
10 shall survive the expiration or termination of this Agreement. 
 10.5 Limitation of Liability and Claims. In no event shall either party
be liable to the other party for incidental, special, consequential or punitive damages, including, but not limited to, any claim for damages based upon lost profits. No action, regardless of form, arising out of or in any way connected with this
Agreement or Products or services furnished by Catalytica may be brought by ORPHAN more than one (1) year after the cause of action accrued. 
 10.6 Insurance. ORPHAN shall provide Catalytica, on request, documentation assuring Catalytica that ORPHAN maintains product liability and other insurance coverage in amounts reasonably satisfactory to Catalytica consistent with
industry practices. 
 ARTICLE 11 INVENTIONS AND PATENTS 
 11.1 Inventions by Catalytica. Catalytica hereby assigns, releases, and transfers to ORPHAN its entire right, title and interest in and to any invention (whether patentable or not) conceived, reduced to
practice or created by Catalytica and/or its agents during the performance of the Services and relating to the Product (collectively “Inventions”) 

 
provided, however, ORPHAN hereby grants to Catalytica an unlimited, worldwide, perpetual, royalty-free license to use the Inventions. Catalytica shall
promptly disclose to ORPHAN any and all Inventions and shall assign all its interests to ORPHAN or its designee in accordance with this Section. Catalytica shall execute at ORPHAN’S expense any assignments, applications or other instruments or
documents reasonably requested by ORPHAN in accordance with this Article 11 and, at ORPHAN’S expense, give testimony which shall be deemed necessary to apply for and obtain Letters Patent of the United States or of any other country and
otherwise to perfect ORPHAN’S interest therein. Catalytica’s and ORPHAN’S obligations hereunder shall survive termination of this Agreement. All data obtained during the Services are the property of ORPHAN and cannot be used without
its consent except for the performance by Catalytica of its obligations hereunder. 
 11.2 Inventions by ORPHAN. ORPHAN shall own all
right, title and interest in and to any invention, discovery or improvement relating to the Product (whether patentable or not) made or conceived solely by ORPHAN employees or by anyone other than Catalytica, including, without limitation, any
manufacturing or analytical process, or procedure or method or any source of synthesis given to Catalytica. 
 ARTICLE 12 CATALYTICA INTELLECTUAL
PROPERTY 
 12.1 ORPHAN acknowledges that Catalytica possesses certain inventions, processes, know-how, trade secrets, improvements,
other intellectual properties and other assets, including but not limited to procedures and techniques, computer technical expertise, software, and certain technical expertise and conceptual expertise in the area of drug processing and
manufacturing, which have been independently developed by Catalytica or its Affiliates without the benefit of any information provided by ORPHAN (collectively “Catalytica Property”). ORPHAN and Catalytica agree that any Catalytica
Property or improvements thereto which are used, improved, modified or developed by Catalytica under or during the term of this Agreement are the product of Catalytica’s technical expertise possessed and developed by Catalytica or its
Affiliates prior to or during the performance of this Agreement and are the sole and exclusive property of Catalytica or its Affiliates, as the case may be. 

 ARTICLE 13 TRADEMARKS 
 13.1 ORPHAN Trademarks. ORPHAN may originate, select and apply to register one or more trademarks (“ORPHAN Trademarks”) under which the Product will be sold and distributed by ORPHAN or its Affiliates
and distributors. ORPHAN shall own all right, title, and interest in the ORPHAN Trademarks, subject to the limited license granted to Catalytica in this Article 13. ORPHAN shall be solely responsible for all prosecution, defense, maintenance and
costs relating to the ORPHAN Trademarks. 
 13.2 Limited Trademark License. ORPHAN hereby grants Catalytica an unlimited worldwide,
perpetual, royalty-free license to the ORPHAN Trademarks solely for purposes of manufacturing and distributing the Product under this Agreement. In that regard, Catalytica shall be permitted to use ORPHAN’S Trademarks and name in connection
with general advertising and promotional activities. Catalytica shall comply with ORPHAN’S reasonable policies and procedures for the use of the ORPHAN Trademarks and shall furnish ORPHAN with copies of any packaging, or other materials
incorporating the ORPHAN Trademarks for ORPHAN’S review and approval prior to any use thereof. Catalytica shall make any changes or additions reasonably requested by ORPHAN to comply with ORPHAN’S standard policies and procedures for the
use of the ORPHAN Trademarks. Upon termination of this Agreement, Catalytica shall promptly cease any use of the ORPHAN Trademarks. 
 13.3
Limitations. Catalytica shall not use, or assert any claims to, any of the ORPHAN Trademarks or any trademark confusingly similar to any ORPHAN Trademarks, provided that ORPHAN shall not choose a trademark which is the same as, or confusingly
similar to, a trademark previously used by Catalytica. 
 13.4 Infringement. Catalytica shall promptly notify ORPHAN if Catalytica
knows or reasonably suspects that a Third Party is infringing any ORPHAN Trademark. At ORPHAN’S expense, Catalytica shall reasonably cooperate in any investigation or other legal action with regard to such infringement. 

 ARTICLE 14 CONFIDENTIALITY 
 14.1 Proprietary Information. During the term hereof and for a period of five (5) years thereafter, any Proprietary Information disclosed by the Disclosing Party, directly or indirectly, to the Receiving
Party under this Agreement shall be deemed confidential and trade secret information and shall not be disclosed by the Receiving Party to any Third Party or used by the Receiving Party, except as set forth below. Access to such Proprietary
Information will be limited to employees, agents, or consultants of the Receiving Party who reasonably require such Proprietary Information for purposes of performing the Receiving Party’s obligations hereunder and who are bound to the
Receiving Party by similar obligations in respect of confidentiality and use. Such employees, agents, or consultants will be advised of the nature and existence of the undertakings in respect of such Proprietary Information pursuant to this
Agreement and of the applicability of such undertakings to them. The Receiving Party will use such Proprietary Information only to carry out its obligations or to exercise its rights hereunder and will not use such Proprietary Information for its
own benefit or for the benefit of others or in any way inconsistent with this Agreement. 
 14.2 Disclosure by the Receiving Party to a Third
Party shall be made only to the extent necessary to enable the Receiving Party to comply with its contractual obligations to the Disclosing Party. 
 14.3 Each Third Party to which Proprietary Information is disclosed other than a governmental agency must agree in writing prior to such disclosure to keep the Proprietary Information in strict confidence and to comply with the terms of
this Article 14. 
 14.4 Both parties agree to limit access of Proprietary Information to those of its officers, directors, or employees, or
any Third Party who must have Proprietary Information to carry out or enforce the terms of any agreement made between the parties. 
 14.5
Neither party shall utilize the Proprietary Information disclosed to it by the Disclosing Party after the completion of the Agreement between the parties, either in its own development work or for commercial purposes, without advance written consent
of the Disclosing Party. 

 14.6 No Right or License. The Receiving Party will obtain no right or license of any kind under
any patent applications, patent or otherwise by reason of this Agreement and all Proprietary Information will remain the sole property of the Disclosing Party unless provided otherwise in this Agreement. 
 14.7 Prior Confidentiality Agreement. The Confidential Disclosure Agreement between the parties hereto dated December 1, 1997 and the Mutual
Non-Disclosure Agreement between the parties hereto dated November 23, 1998 , as well as the confidentiality provisions of the Technical Services Agreement dated November 20, 1999, are hereby superseded and terminated. Any disclosure of
Proprietary Information by either party pursuant to such Confidentiality Agreements shall be deemed to have been made hereunder and shall be subject to this Article 14. 
 14.8 Terms of Agreement; Press Releases. Except as otherwise required by law or the rules and regulations of any stock exchange on which a party’s securities may be publicly traded or in disclosures made
in confidence to a party’s professional or financial advisors, applicable regulations or the terms of this Agreement or mutually agreed upon by the parties hereto, each party shall treat the terms, conditions and existence of this Agreement as
Proprietary Information. The parties shall cooperate in good faith in the preparation of any press releases or other public disclosures of their business relationship, and neither party shall issue any such press release or other disclosure without
the prior approval of the other party, which approval shall not be unreasonably held. 
 ARTICLE 15 TERM OF AGREEMENT 
 15.1 Unless sooner terminated pursuant to Article 16 below, the initial term of this Agreement shall commence on the Effective Date and end upon
expiration of the seventh (7th) Contract Year. Unless otherwise terminated pursuant to Article 16 below, 

 
this Agreement shall be automatically renewed for additional one (1) year terms after the end of the initial term, unless either party provides written
notice to the other at least eighteen (18) months prior to the expiration of the initial or any extended term, as the case may be, that this Agreement shall expire at the end of the initial term or such renewal term, as the case may be. All
references herein to “term of this Agreement” shall be deemed to include both the initial and any extended terms. 
 ARTICLE 16
TERMINATION 
 16.1 Termination by Either Party. In addition to any other legal or equitable remedies it may have, either
party may terminate this Agreement prior to the expiration of the term of this Agreement upon written notice to the other party: 
  

	 	(a)	If the other party breaches any material term or condition of this Agreement, including any term or condition in any appendix attached hereto, provided such other party has not
cured such breach within ninety (90) days of written notice thereof (ten (10) days in the event of a payment breach by ORPHAN); provided, further, that if at the end of such ninety (90) day period the party in breach is making a good
faith effort to cure, a reasonable time thereafter (not to exceed an additional sixty (60) days) shall be allowed for such cure. 

  

	 	(b)	If the other party is declared bankrupt or insolvent, or makes an assignment for the benefit of its creditors, or if a receiver is appointed or any proceedings are commenced,
voluntary or involuntary, by or against either party under any bankruptcy or similar law, and such status is not cured within thirty (30) days from its occurrence. 

  

	 	(c)	If an event of force majeure continues for more than six (6) months, either party, at its option, may elect to treat such continued suspension of performance as a material
breach and may terminate this Agreement. 

 16.2 Effects of Expiration or Termination. Upon expiration or termination of
this Agreement for any reason: 
  

	 	(a)	Catalytica shall manufacture and ship, and ORPHAN shall purchase,. Production Batches of the Product ordered by ORPHAN prior to the effective date of such expiration or termination.

	 	(b)	Other than termination by ORPHAN pursuant to Section 16.1(a) hereof, (i) at Catalytica’s option, ORPHAN shall purchase from Catalytica at Catalytica’s
Acquisition Cost all materials acquired by Catalytica hereunder, (ii) at Catalytica’s option, ORPHAN shall purchase from Catalytica all work-in progress for the Product at Catalytica’s cost, (iii) at Catalytica’s option,
ORPHAN shall purchase all other finished Product then in Catalytica’s possession, (iv) ORPHAN shall compensate Catalytica for all other uncancellable commitments made by Catalytica to satisfy the existing purchase orders, and
(v) ORPHAN shall compensate Catalytica for any and all technology transfer and other capital costs that were incurred and not recovered by Catalytica. 

  

	 	(c)	Catalytica shall take all steps reasonably requested by ORPHAN to confirm the assignment to ORPHAN all of Catalytica’s right, title and interest in the Inventions, including,
without limitation, to execute or cause its employees to execute such documents as may be reasonably requested by ORPHAN to vest all such right, title and interest in such Inventions in ORPHAN, provided ORPHAN shall pay all reasonable expenses,
including any of time and travel of Catalytica’s employees. 

  

	 	(d)	Each party shall return to the other party any Proprietary Information of the other party except for one (1) archival copy as may be required for purposes of compliance with
any FDA regulation or other applicable law or regulation in the Territory. 

 16.3 Survival. The provisions of Articles
7 (Prices and Payments), 8 (Representations, Warranties, Inspections, Regulatory and Quality), 9 (Acceptance, Rejection and Claims), 10 (Indemnification), 11 (Inventions and Patents), Article 12 (Catalytica Intellectual Property), 13 (Trademarks),
14 (Confidentiality), 15 (Term of Agreement), 16 (Termination), 17 (Force Majeure), 18 (Dispute Resolution) and 19 (Miscellaneous) shall survive the expiration or termination of this Agreement and shall remain in full force and effect in accordance
with the terms thereof. 

 ARTICLE 17 FORCE MAJEURE 
 17.1 Events of Force Majeure. Either party shall be excused from the performance of its obligations (other than the payment of money, including without limitation payment for minimum purchase requirements) in
the event such performance is prevented by a cause beyond the reasonable control of such party, including, without limitation, any act of God; regulation or law of any government or an agency thereof; war; insurrection or civil commotion;
earthquake, tornado, fire, hurricane, flood or storm; epidemic; or failure of suppliers, public utilities or common carriers. Such excuse shall continue as long as the Force Majeure Event and consequences to supply continue, except that Customer
will have the right to (i) terminate the Agreement without further obligation in the event that Catalytica is not able to supply Customer with Product for a continuous period of six (6) months and (ii) seek an alternate supplier of
the Product during the continuation of, and only during the continuation of, such a Force Majeure Event unless Customer can only secure an alternate supplier for a time period in excess of the Force Majeure Event period, in which case Customer will
resume its exclusive supply relationship with Catalytica at the end of such period and extend the term of this Agreement by a maximum of six (6) months. If no such termination by Customer occurs, upon cessation of such Force Majeure Event, the
Parties shall promptly resume performance hereunder. 
 17.2 Notice. A party affected by an event of force majeure shall give the
other party prompt written notice of the occurrence of any event of force majeure and the nature and duration thereof. An affected party shall use all reasonable efforts to resume performance as quickly as possible and to give the other party prompt
written notice when it is again fully able to perform such obligations. If Catalytica is the affected party, such notice of resumption of performance shall state the quantities of Product manufactured but not shipped by Catalytica due to any event
of force majeure and the expiration dates thereof. 
 17.3 Cover. During, and only during, any suspension of performance by Catalytica
under Section 17.1 above, ORPHAN may, at its option, purchase elsewhere the quantities of the Product ORPHAN has ordered which Catalytica is unable to deliver. 

 ARTICLE 18 DISPUTE RESOLUTION 
 18.1 Negotiation. The parties intend that any dispute, controversy or claim arising out of or relating to this Agreement, or any breach thereof, shall be resolved under the procedures set forth in this Article
18. The parties recognize that a bona fide dispute as to certain matters may from time to time arise during the term of this Agreement which relates to either party’s rights and/or obligations hereunder. In the event of the occurrence of
such a dispute, either party may, by notice to the other party, have such dispute referred to their respective officers designated below, or their successors, for attempted resolution by good faith negotiations within thirty (30) days after
such notice is received. Such designated officers are as follows: 
 For ORPHAN – John H. Bullion 
 For Catalytica – Michael Thomas 
 18.2
Mediation. If attempts to resolve the dispute pursuant to Section 18.1 are unsuccessful, mediation shall be conducted by a single mediator appointed by mutual agreement of the parties. The mediator shall not have the power to bind the
parties to the resolution. The mediation session shall take place in Raleigh, North Carolina if ORPHAN requests mediation or in Minnetonka, Minnesota if Catalytica requests mediation, on two (2) consecutive business days and shall be attended
by a representative of each party with full authority to settle the matter, along with any other representatives reasonably necessary to discuss and address the issues involved in the dispute. On the first day of mediation, each party shall be
allotted a maximum of four (4) hours with other representatives necessary to discuss and address the issues involved in the dispute to state its views of the dispute to the mediator and to the other party. On the second day of mediation, the
parties shall attempt to resolve the dispute with the aid of the mediator in a format agreed to by the parties or imposed by the mediator. If the parties cannot agree upon a mutually acceptable mediator within ten (10) days of the end of the
30-day negotiation period in Section 18.1 or if the dispute is not resolved by mediation within ten (10) days after completion of the mediation session, either party shall have the right to pursue any and all remedies available at law or
in equity. 

 ARTICLE 19 MISCELLANEOUS 
 19.1 Choice of Law. This Agreement shall be governed by and interpreted in accordance with the laws of North Carolina, without regard to its conflict of laws provisions. 
 19.2 Notifications. Any and all notices provided for shall be sent to the respective parties at the following addresses by certified or registered
mail or sent by a national courier service with proof of delivery, by personal delivery or by facsimile with an electronic and verbal confirmation of receipt: 
  

					
		 	If to Catalytica:	  	 Chief Executive Officer
 Catalytica Pharmaceuticals,
Inc.
 Intersection US 13/NC11 and US 264
 Greenville, North
Carolina 27834
 Fax (252) 707-2450

			
		 	If to ORPHAN:	  	 Chief Executive Officer
 Orphan Medical, Inc.

3911 Ridgedale Drive, Suite 250
 Minnetonka, Minnesota 55305
 Fax: (612)541-9209

 with a copy to each Legal Council’s office, or to such other addresses as may be subsequently furnished by
one party to the other in writing. Any such notice shall be deemed effective three (3) days after mailing or upon receipt if sent by courier service, personal delivery or facsimile. 
 19.3 Severability. If any term or condition of this Agreement is found by a court of competent jurisdiction in a final unappealed or unappealable
order to violate the provisions of any applicable statute, law or regulation, the remainder of this Agreement shall remain in full force and effect. The parties shall then negotiate in good faith to modify this Agreement, but only to the extent
necessary to make the affected term or condition of this Agreement valid and enforceable, having full regard for applicable laws and the intent and purposes of the parties entering into this Agreement. 

 19.4 Integration; Amendment. This Agreement and all appendices hereto constitute the entire
agreement between the parties relating to the subject matter of this Agreement and supersedes all prior agreements, representations, and understandings. This Agreement may not be amended, modified, or varied except in writing signed by a duly
authorized representative of each party. In the event of a conflict between the terms of this Agreement, and any appendix hereto, the terms of this Agreement shall control. 
 19.5 Assignment. Neither party may assign or otherwise transfer this Agreement without the prior written consent of the other party except that
either ORPHAN or Catalytica may assign, without such consent, this Agreement (a) to an Affiliate, (b) in connection with the sale or transfer of all or substantially all of the assets of such party or the line of business of which this
Agreement forms a part, or (c) in the event of the merger or consolidation of a party hereto with another company, provided, however, any permitted assignee shall assume all obligations of its assignor under this Agreement. Any purported
assignment in violation of the foregoing sentence shall be null and void. No assignment shall relieve either party of responsibility for the performance of any accrued obligation under this agreement. Subject to the foregoing, this Agreement shall
be binding upon and inure to the benefit of the permitted successors or permitted assigns of Catalytica and ORPHAN respectively. 
 19.6
Waiver. No course of dealing between Catalytica and ORPHAN or delay or failure to exercise any rights hereunder shall operate as a waiver of such rights or preclude the exercise of any other rights hereunder. 
 19.7 Relationship. Each of the parties hereto is an independent contractor and nothing herein shall be deemed to constitute the relationship of
partners, joint venturers, nor of principal and agent between the parties hereto. 
 19.8 Captions. The captions to the several
Articles hereof are not a part of this Agreement, but are merely guides or labels to assist in locating and reading the several Articles hereof and shall not affect the meaning or interpretation hereof. 

 19.9 Counterparts. Two (2) or more counterparts of this Agreement may be signed by the
parties, each of which shall be an original, but all of which together shall constitute the same instrument. 

 IN WITNESS WHEREOF, the parties have caused this Agreement to be entered into by their duly authorized
representatives as of the Effective Date. 
  

									
	CATALYTICA PHARMACEUTICALS, INC.	 		 	ORPHAN MEDICAL
					
	By:	 	 /s/ Michael H. Thomas
	 		 	By:	 	 /s/ John Howell Bullion

	Print:	 	 Michael H. Thomas
	 		 	Print:	 	 John Howell Bullion

	Its:	 	CEO	 		 	Its:	 	CEO
	Date:	 	7/17/00	 		 	Date:	 	6/30/00

 APPENDIX A 
 TECHNICAL SERVICES AGREEMENT 

 TECHNICAL SERVICES AGREEMENT 
 THIS AGREEMENT is made and entered into this      day of November, 1999 by and between Catalytica Pharmaceuticals, Inc., a
Delaware corporation, having an address at Intersection US 13/NC11 and US 264, Greenville, North Carolina 27834 (“Catalytica”) and Orphan Medical, Inc., a Minnesota corporation, having an address at 13911 Ridgedale Drive, Suite 475,
Minnetonka, Minnesota 55305 (“Orphan”) (Catalytica and Orphan may be referred to collectively as the “Parties” or individually as a “Party”). 
 W1TNESSETH: 
 WHEREAS, the Parties are in the process of negotiating and intend to enter into a
definitive Supply Agreement (the “Supply Agreement”) pursuant to which Catalytica would manufacture and supply Orphan’s XyremTM Oral Solution (the “Product”); and 
 WHEREAS, in anticipation of the Supply Agreement and the services that Catalytica will perform thereunder, the Parties desire to enter into a binding
agreement pursuant to which Catalytica would undertake certain technical services in order to prepare its facilities for performance of the Supply Agreement. 
 NOW THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the Parties hereby agree as follows: 
 1. Best Efforts. Catalytica and Orphan will negotiate in good faith and use their best efforts to arrive at a mutually acceptable Supply Agreement
not later than March 31, 2000, with terms consistent with those set forth in Catalytica’s proposal dated October 1, 1999 (a copy of which is attached hereto as Exhibit 1), which includes a commercial per unit cost of $.95 per
bottle, (based on 300,000 bottle annual production). Packaging material costs have been estimated at $1.15 and includes the cap, bottle, label, insert, carton and shipper. Pricing is subject to confirmation upon completion of transfer activities.

 2. Services. 
 (a)
Description of Services. Catalytica shall perform the services listed in Exhibit 1 hereto, including any modifications and additions thereto agreed upon in writing by the Parties, to develop and confirm the manufacturing process for the
Product (the “Services”) (Catalytica’s performance of the Service is based on the assumptions set forth in Exhibit 1). In that regard, Catalytica shall use reasonable efforts to complete the Services in a timely fashion in accordance
with a schedule to be mutually agreed upon by the Parties, 
 (b) Cost and Payment. The cost of the Services shall be $92,500 (the
“Cost”). Orphan shall make an fixed fee payment equal to one-half of the Cost ($46,250), upon execution of this Agreement, Orphan shall make two subsequent equal payments equal to the balance of the Cost ($46,250), or such higher amount
agreed to by the Parties in the event Catalytica performs services in addition to those identified in Exhibit 1, on September 30 and December 31, 2000; provided, however, Catalytica shall not perform services hereunder in addition to those
identified in Exhibit 1 which cost more than $1,000 without Orphan’s prior written consent. In addition, Orphan shall make 

 
an up-front payment of $22,500 for the estimated cost of specialized equipment required to manufacture the Products (the “Equipment”). If the
actual cost paid by Catalytica (including tax, shipping, insurance, etc.) for the Equipment exceeds $22,500, Orphan shall promptly, upon receipt of Catalytica’s invoice, reimburse Catalytica for any such excess; provided, however, Catalytica
shall not pay more than $25,000 for the Equipment without Orphan’s prior written consent. Catalytica shall own all of the Equipment. 
 (c) Orphan’s Responsibilities. To assist Catalytica in its performance of the Services, Orphan shall provide Catalytica, in a timely fashion, all relevant material, information and data in its possession which Orphan, in its
good faith opinion, believes is necessary for Catalytica to carry out and complete the Services. 
 (d) Reporting, Catalytica shall
respond to Orphan’s reasonable inquiries regarding the status of the Services on an ongoing basis, including if requested periodic meetings at Catalytica’s facility to discuss the results and progress of the Services. 
 (e) Validation Batches. At Orphan’s option and request, after execution of the Supply Agreement, Orphan may purchase validation batches of
Product prepared in connection with the Services, pursuant to the terms and conditions of the Supply Agreement (including without limitation the terms and conditions governing price, payment, warranty, indemnification and limitation of liability).
Catalytica shall retain representative samples from each batch of the Products for record keeping, testing and regulatory purposes. 
 (f)
Ownership of Tangible Materials. Orphan shall retain ownership of all information, documents and materials which Orphan provides to Catalytica in connection with the performance of the Services hereunder. Further, Orphan shall have full
ownership, possession of, and all rights to use, any reports, documents and other tangible materials which Catalytica provides to Orphan as part of the Services. 
 (g) Ownership of Inventions. All inventions, whether patentable or not, conceived, reduced to practice or created by Catalytica and/or its agents during the performance of the Services and relating to the
Product shall be owned by Orphan; provided, however, Catalytica shall have, and Orphan hereby grants to Catalytica, an unlimited, worldwide, perpetual, royalty-free license to use such inventions. Orphan shall be responsible for the costs of filing,
prosecution and maintenance for patents and patent applications with regard to inventions owned by Orphan pursuant to this paragraph. 
 3.
Exclusive Dealing. In recognition of the substantial effort and expense to be incurred by Catalytica in undertaking a detailed analysis in anticipation of the Supply Agreement contemplated hereunder, neither Orphan nor any of its affiliates,
shareholders, partners, directors, officers, employees or agents, shall discuss, negotiate, solicit, or in any manner encourage any transaction or proposal for a transaction involving the manufacture or supply of the Products, other than the
transaction contemplated by this agreement, until March 31, 2000. Without limiting the foregoing, none of the foregoing shall directly or indirectly furnish to any third party any non-public information concerning the manufacture or supply of
the Product, or otherwise engage in any act related to or likely to induce any actual or potential transaction inconsistent with this Agreement. 
 4. Confidentiality. Catalytica and Orphan, including all their respective 

 
representatives, agents, accountants and counsel, shall treat confidentially all of the information received from one another in connection with this
Agreement that is not publicly available and will not, without the prior consent of the other party, disclose any information to any third party except as required by law and will not use any such information for purposes other than in furtherance
of this Agreement, Information shall be deemed “publicly available” if, other than as a result of a breach of the obligation of this Agreement, it is or becomes generally available to the public or is or becomes a matter of public
knowledge or if it is or becomes available to a party on a non-confidential basis from a source, other than from the other party, that is not known to be bound by a confidentiality agreement or otherwise prohibited from transmitting such
information. Except to the extent inconsistent herewith, all prior agreements (if any) between the parties regarding confidentiality shall remain in full force and effect. The confidentiality obligations set forth in this paragraph 4 shall survive
the termination or expiration of this Agreement for a period of three (3) years. 
 5. Termination. Unless extended by mutual
agreement of the Parties, this Agreement shall terminate on March 31, 2000, or earlier upon the mutual agreement of the Parties. 
 6.
Force Majeure. No failure or omission by the Parties in the performance of any obligation of this Agreement (other than the payment of money) shall be deemed a breach of this Agreement nor shall it create any liability (other than as set
forth herein), if the same shall arise from any cause or causes beyond the reasonable control of the affected Party (a “Force Majeure”), including, but not limited to, the following, which for purposes of this Agreement shall be regarded
as beyond the control of the Party in question: acts of God; fire; storm; flood; earthquake; accident; war; rebellion; insurrection; riot; invasion; strikes; and lockouts or the like; provided that the Party so affected shall use its commercially
reasonable best efforts to avoid or remove such causes of non-performance and shall continue performance hereunder with the utmost dispatch whenever such causes are removed. 
 7. Indemnification. 
 (a) Orphan shall
indemnify, defend and hold Catalytica, its affiliates and their respective directors, officers, employees, agents, successors and assigns harmless from and against any damages, judgments, claims, suits, actions, liabilities, costs and expenses
(including, but not limited to, reasonable attorneys’ fees) arising out of or connected with (a) the Services and the use, handling, distribution, marketing or sale of the Product (except to the extent caused solely by Catalytica’s
negligent acts or omissions or willful misconduct), (b) Orphan’s breach of any of its warranties or representations hereunder, (c) Orphan’s negligent acts or omissions or willful misconduct or (d) any proceeding instituted
by or on behalf of a third party based upon a claim that the Services or the manufacture, use or sale of the Product infringes a United States patent or any other proprietary rights. 
 (b) Except as otherwise provided in Section 7(a), Catalytica shall indemnify, defend and hold Orphan, its affiliates and their respective directors,
officers, employees, agents, successors and assigns harmless from and against any damages, judgments, claims, suits, actions, liabilities, costs and expenses (including, but not limited to, reasonable attorneys’ fees) resulting from any third
party claims or suits arising solely out of (i) Catalytica’s material breach of any of its warranties or representations hereunder or (b) Catalytica’s negligent acts or omissions or willful misconduct in the performance of the
Services or the manufacture of the Product; 

 
provided, however, Catalytica’s collective, aggregate liability under this Section 7(b) shall not exceed the amount of compensation
actually received by Catalytica from Orphan pursuant to this Agreement. 
 (c) A party (the “Indemnitee”) which intends to
claim indemnification under this Section 7 shall promptly notify the other party (the “Indemnitor”) in writing of any action, claim or other matter in respect of which the Indemnitee or any of its Affiliates, or any of their
respective directors, officers, employees or agents intend to claim such indemnification; provided, however, the failure to provide such notice within a reasonable period of time shall not relieve the Indemnitor of any of its
obligations hereunder except to the extent the Indemnitor is prejudiced by such failure. The Indemnitee, its affiliates, and their respective directors, officers, employees and agents shall cooperate fully with the Indemnitor and its legal
representatives in the investigation, negotiation, compromise, settlement, and defense of any action, claim or other matter covered by this indemnification. The Indemnitor shall be in charge of and control of any such investigation, negotiation,
compromise, settlement and defense and shall have the right to select counsel with respect thereto, provided that the Indemnitor shall promptly notify the Indemnitee of all developments in the matter. In no event shall the Indemnitor or Indemnitee
compromise or settle any such matter without the prior written consent of the other party, which shall not be bound by any such compromise or settlement absent its prior consent, which shall not be unreasonably withheld or delayed. The Indemnitee
shall have the right, but not the obligation, to be represented by counsel of its own selection and at its own expense. 
 (d) In no event
shall either party be liable to the other for incidental, special, consequential or punitive damages, including, but not limited to, any claim for damages based upon lost profits, In addition, in no event shall the collective, aggregate liability of
Catalytica and its affiliates and its and their respective directors, officers, employees and agents under this Agreement exceed the amount of compensation actually received by Catalytica from Orphan pursuant to this Agreement. No action, regardless
of form, arising out of or in any way connected with this Agreement or Products or Services furnished by Catalytica may be brought by Orphan more than one (1) year after the cause of action accrued. 
 (e) The provisions of this Section 7 shall survive the expiration or termination of this Agreement. 
 8. Governing Law. This agreement shall be governed by and construed in accordance with the laws of the State of North Carolina without reference
to principles of conflicts of laws. 
 9. Assignment. This Agreement may not be assigned or otherwise transferred by either party
without the prior written consent of the other; provided, however, either party may, without such consent, assign this Agreement (a) in connection with the transfer or sale of all or substantially all of the assets of such party
or the line of business of which this Agreement forms a part, (b) in the event of the merger or consolidation of a party hereto with another company, or (c) to any affiliate of the assigning Party. Any purported assignment in violation of
the preceding sentence shall be void. Any permitted assignee shall assume all obligations of its assignor under this Agreement. No assignment shall relieve either party of responsibility for the performance of any obligation which accrued prior to
the effective date of such assignment. 

 10. Survivability. The following paragraphs shall survive the termination or expiration of this
Agreement: 2(f), 2(g), and 7. 
 IN WITNESS WHEREOF, this Agreement has been executed by the Parties hereto as of the day and year first
written above. 
  

							
	ORPHAN MEDICAL, INC.	 	CATALYTICA PHARMACEUTICALS, INC.
				
	By:	 	 /s/ Dayton Reardan
	 	By:	 	 /s/ Gabriel Cipau

	Title:	 	Vice President	 	Title:	 	President & CEO

 EXHIBIT 1 PROPOSAL 
 (See attached) 

 October 1, 1999 
 Orphan Medical 
 13911 Ridgedale Drive 
 Suite 475

 Minnetonka, Minnesota 55305 
 ATTN: Randy Tlachac 

Dear Randy: 
 I am pleased to provide the attached proposal for the
XyremTM Oral Solution. The proposal includes the commercial estimate, the associated transfer costs and the equipment requirements to produce your product at our Greenville facility. 
 Please note that Orphan would be responsible for the capital equipment costs estimated at $22,500. Also, the commercial prices would be subject to annual price increases based on the Producer Price Index. 

Catalytica Pharmaceuticals, being the largest full-service pharmaceutical company in the world, provides a full spectrum of capabilities tailored to meet your needs.
We are committed to delivering the finest products, services, and performance available to you including: 
  

	 	•	 	 full-service development, and manufacturing, 

  

	 	•	 	 access to the newest technology, 

  

	 	•	 	 assistance from professionals who are among the best in the business, 

  

	 	•	 	 unsurpassed regulatory expertise, and 

  

	 	•	 	 a workforce dedicated to continuous quality improvement and ongoing professional development. 

 Catalytica appreciates the opportunity to bid on this project and hope that arrangements can be made to expedite its transfer, If you have any questions or need further
clarification, please don’t hesitate to call. I will try to contact you next week to discuss the proposal and the next steps. 
 Sincerely, 

David Hamby 
  

	cc:	Dr. Cipau 

 Tom Mulligan Bob 
 Peoples 
 File (2) 

 Proposal Summary for Xyrem Oral Solution 
 Commercial Estimate: 
  

				
	 Product
	  	Price/Unit
	 Xyrem Oral solution – 8oz
	  	$	.95

 Active and packaging materials are not included. 
 Subject to 3- year contract, minimum volumes and annual price increases. 
 Packaging material costs have been estimated at $1.15 and includes the cap, bottle, label, insert, carton and shipper 
 Transfer Estimate: 
  

				
	 Xyrem Transfer Costs
	  	$	92,500
	 (See activities attached)
	  		
		
	 Estimated Capital Requirements
	  	$	22,500
	 See attached for details
 Customer to assume
	  		

  

	
	  

	 Amy DelaCourt

	 Vice President, Pharmaceutical Marketing & Sales

 Proposal valid for 60 days. A change in scope will necessitate a re-evaluation of resources.

 CONFIDENTIAL 

 Orphan Medical 
 Xyrem Oral Solution 
 Packaging Assumptions 
  

	1.	No change in standard Catalytica cleaning procedures will be required for cleaning equipment after running this product. 

  

	2.	Lot number and expiration date coding will comply with current Catalytica methods, format and size. 

  

	3.	Literature/insert size and shape will be compatible with Catalytica equipment and only one piece of literature will be required. 

  

	4.	Cartons will be a standard reverse tuck. 

  

	5.	Labels will be applied lo one side of bottle only and can be adhered by brushing down. 

  

	6.	Test will be conducted if PET bottle is selected to insure labels will not wrinkle. 

  

	7.	Cap design will be compatible with current tooling. If not additional capital will be required. 

  

	8.	Product will be bundled X6 and packed in shippers X24. 

  

	9.	Shippers will be sealed with tape, lot/exp. printed on one side of shipper. 

  

	10.	Current Catalytica component verification systems can be used for component verification. 

  

	11.	No cost involved for special handling or safety equipment in the packaging of this product. 

  

	12.	No special handling or costs associated with disposal of product. 

  

	13.	Shrink bands will not be required. 

 Equipment requirements
(estimated); 
  

				
	 Manufacturing
	  		
	 Sanitary Housing
	  	$	1,500
	 Filters
	  	$	500
	 Packaging
	  		
	 Bottle Unscrambler change-parts
	  	$	10,000
	 Feed screws
	  	$	8,000
	 Bundler change-parts
	  	$	2,500
		  	 	 
	 Total cost
	  	$	22,500
		  	 	 

 Transfer Activities 
  

			
	 CATEGORY
	  	 ACTIVITY

	 Predevelopment
	  	Review product info. Establish scope
		  	Create 2 new raw material and 1 product item numbers, critical documents; SOPs, PWOs BOM, etc
		  	Pass raw materials
		
	 Process
 Development
	  	Prepare/approve batch records
		  	Perform validation activities to include VPS, PQ-mfg, PQ-pkg, PQ-cleaning
		
	 Clinical Batch
	  	Prepare Nonproduction formula
		  	Manufacture and package 1 x 100gallon batch. Activities include equipment set up, mfg, and cleaning.
		  	 Perform in process testing

		  	Perform cleaning verification testing
		  	Transfer drug product analytical methods to AR&D
		  	Review final batch record and prepare report
		
	 Validation
 Batches
	  	Prepare and approve Master Formula
		  	Monitor manufacturing and packaging of 3 validation batches
		  	Perform cleaning validation testing
		  	Transfer drug product analytical methods to QC
		  	Perform cleaning validation testing
		  	Prepare transfer report
		
	 Reports
	  	Prepare “Data Only” documentation for CMC section.

  

 10 

 Development Assumptions 
 ORPHAN MEDICAL - XYREM SOLUTION 
  

	1.	One 25-gallon development batch will be manufactured to evaluate the processing parameters. 

  

	2.	Orphan medical will provide suitable filter cartridges for processing. 

  

	3.	All lab testing for the development and CTM batch will be performed by Orphan Medical. 

  

	4.	Although the NDA has not been filed, this is considered a Tech Transfer that requires no formulation or analytical development activities. 

  

	5.	Prior to the manufacture of the batches, AR&D will perform a collaborative type method transfer utilizing Orphan Medical’s existing contract lab(s).

  

	6.	AR&D is responsible for the development of the method transfer protocol. Orphan Medical will review and approve the transfer protocol prior to implementation.

  

	7.	No stability testing is included in this estimate, 

  

	8.	Regulatory documentation deliverables include: 

  

	 	•	 	 Submission-ready packaging description 

  

	 	•	 	 Categorical exclusion 

  

	 	•	 	 Submission-ready certificates of analysis 

  

	 	•	 	 C*P name/address/registration number 

  

	 	•	 	 Certificate of GMP compliance 

  

	 	•	 	 Debarment Certification 

  

	 	•	 	 Batch Records 

  

	 	•	 	 Analytical controls 

 ( Additional Regulatory support
will be billed at $175 per hour) 

 CONFIDENTIAL 
 APPENDIX B 
 Specifications 
  

			
	Catalytica Document	  	 Title

	SPC-1152/TEST-1118	  	Bulk Drug Substance Specification, Sodium Oxybate
		
	            00100	  	Physical Examination
		
	            04001	  	Identification: HPLC
		
	            04003	  	Identification: IR
		
	            16001	  	Total Impurities
		
	            16003	  	Samma-Butyrolactone
		
	            16005	  	Specified A
		
	            16007	  	Unspecified
		
	            16009	  	Water Determination
		
	            16011	  	Residual Solvents
		
	            16015	  	Heavy Metals
		
	            26001	  	HPLC Assay
		
	            26003	  	Titration
		
	SPC-95/TEST-95	  	Raw Material Specification, Purified Water USP
		
	            16000	  	Total Organic Carbon
		
	            16005	  	Nitrates
		
	            16008	  	Heavy Metals
		
	            16010	  	Conductivity: microSiemens per cm
		
	            16020	  	Conductivity: USP, EP
		
	            23061	  	Microbial Plate Count
		
	SPC-174/TEST-173	  	Raw Material Specification, Sodium Hydroxide (NaOH), NF
		
	            01183	  	Physical Examination
		
	            04930	  	Identification, EP
		
	            04933	  	Identification, NF
		
	            16001	  	Insoluble Substances and Organic Matter, NF
		
	            18032	  	Heavy Metals, EP
		
	            18033	  	Potassium,NF
		
	            18034	  	Appearance: Clarity
		
	            18035	  	Appearance: Color
		
	            18036	  	Chlorides, EP
		
	            18038	  	Sulfates, EP
		
	            18039	  	Iron, EF

  

 Page 44 

			
	            26591	  	Assay, Sodium Carbonate, EP
		
	            26592	  	Assay, Sodium Hydroxide, EP
		
	SPC-1151/TEST-1117	  	Raw Material Specification, Malic Acid, USP/NF
		
	            00100	  	Appearance
		
	            04001	  	Identification: IR
		
	            05111	  	OVI: Benzene
		
	            05112	  	OVI: Chloroform
		
	            05113	  	OVI: 1,4 Dioxane
		
	            05114	  	OVI: Methylene Chloride
		
	            05115	  	OVI Trichloroethylene
		
	            16001	  	Assay, Malic Acid
		
	            16005	  	Heavy Metals
		
	            16010	  	Residue on Ignition
		
	            16020	  	Fumaric Acid
		
	            16025	  	Maleic Acid
		
	            16030	  	Water-insoluble Substances
		
	SPC-1163/TEST-1133	  	Drug Product Specification, Xyrem
		
	            00100	  	Physical Examination
		
	            04001	  	Identification by HPLC
		
	            04003	  	Identification by IR
		
	            14001	  	PH
		
	            16001	  	HPLC Total Impurities
		
	            16003	  	HPLC Gamma Butyrolactone
		
	            16005	  	Specified A
		
	            16007	  	Unspecified
		
	            16009	  	Volume in Container
		
	            26001	  	HPLC Assay
		
	SPC-1158/TEST1128	  	Component Specification, Filter Cartridge, Pall
		
	            00100	  	Appearance
		
	            Z157	  	Bill of Materials, Bottling, Xyrem - 100 gallon, Catalytica
		
	            595371	  	Component Specification, Xyrem, Label, bottle, front
		
	            595372	  	Component Specification, Xyrem, Label, bottle, back
		
	            542593	  	Component Specification, Xyrem, Insert
		
	            542594	  	Component Specification, Xyrem Carton
		
	            X1468	  	Component Specification, Xyremr Shipper
Label
		
	            14549	  	Component Specification, Xyrem, Carton Security, (Unprinted) Catalytica
		
	            014550	  	Tubing, PVC, Unprinted, 54 mm, Roll-Feed
		
	            690083	  	Component Specification, Xyrem, Shipper , Unprinted, General Use

			
	            012731F	  	Component Specification, Xyrem, Tape, Pressure Sensitive Case Sealing
		
	            003900B	  	Component Specification, Xyrem, Shipper Label, Unprinted, Thermal Transfer, Catalytica
		
	            302102	  	Component Specification, Bottle, Catalytica, Owens Brockway, Mold 10004, Amber Eastman 5214 PET, 8 ounce
		
	            013525	  	Component Specification, Catalytica, Closure, Owens Brockway, 24-400 Clic-Loc III
		
	            X1478	  	Component Specification, Press-In Bottle Adapter (PIBA), Baxa Corporation
		
	            X1479	  	Component Specification, Exacta-Med Dispenser, Baxa Corporation
		
	        NP-0046-00	  	tester Production Record: Xyrem (sodium oxybate) oral solution Catalytica 400 gallon
		
	            QC-493	  	HPLC assay for sodium oxybate in Xyrem (sodium oxybate) oral solution
		
	            QC-495	  	HPLC assay for gamma-butyrolactone and impurities in Xyrem (sodium oxybate) oral solution
		
	            SPC-1151	  	Raw Material Specification, Malic Acid Specification USP/NF, Catalytica
		
	            RS-400	  	Specification, Reference Standard, Sodium Oxybate
		
	            RS-450	  	Impurity Reference Standard, Gamma-Butyrolactone
		
	            003900B	  	Label, Unprinted, Thermal Transfer
		
	            595371	  	Label Copy Specification, Xyrem (sodium oxybate) oral solution, bottle, front, TxIND, Catalytica
		
	            595372	  	Label Copy Specification, Xyrem (sodium oxybate) oral solution, bottle, back, TxIND, Catalytica
		
	            542593	  	Label Copy Specification, Xyrem (sodium oxybate) oral solution, Patient Use Instructions, Catalytica
		
	            542594	  	Label Copy Specification, Xyrem (sodium oxybate) oral solution, unit carton, TxIND, Catalytica
		
	            X1468	  	Label Copy Specification, Xyrem, Shipper X1467, Catalytica
		
	            014549	  	Label Copy Specification Xyrem, Carton Security (Unprinted), Catalytica

 APPENDIX C  
 Return Material Authorization (RMA) 
 For material return, Catalytica operates a paperless, computer-supported
system. The following procedure will be followed: 
  

	1.	ORPHAN can request return authorization by calling Catalytica at 252-707-2484 and requesting the “Customer Service Department”. 

  

	2.	Catalytica will issue a material return authorization number generated by its quality performance database according to standard work practices in effect within Catalytica at that
time. 

  

	3.	Catalytica will organize transport of material through coordination with ORPHAN. The appropriate contact will be given by ORPHAN at the time of request for return of material.

  

	4.	Upon receipt of returned material, Catalytica will send a confirmation of this to the designated contact at ORPHAN. 

 APPENDIX D 
 PRODUCT PRICE ESTIMATES 
 according to Section 7.1 
 Tiered pricing for Xyrem 200ml 
  

							
	 Volume Breaks Unit Price
	  	Conversion	  	Materials	  	Total
	 < 300,000 units/year
	  	.95	  	2.49	  	3.44
	 300,000 to 1,000,000 units/year
	  	.87	  	2.29	  	3.16
	 > 1,000,000 units/year
	  	.70	  	2.11	  	2.81

 The following assumptions apply: 
  

	 	•	 	 Volume price breaks based on annual production 

  

	 	•	 	 7 year Commercial Supply Agreement 

  

	 	•	 	 Subject to annual price increase specified in commercial supply agreement 

  

	 	•	 	 DEA Schedule CIII with ARCOS reporting 

  

	 	•	 	 Sodium Oxybate supplied by Orphan 

  

	 	•	 	 Orphan to supply C of C on Sodium Oxybate 

  

	 	•	 	 Manufactured four times per year or once per quarter (campaign) 

  

	 	•	 	 Minimum of three batches per campaign 

  

	 	•	 	 Each additional campaign will carry a setup charge of $ 15,500 

  

	 	•	 	 Manufacturing batch size of 1,000 gallon / ~15,360 200ml bottles 

  

	 	•	 	 To be ordered in full batch size quantities 

  

	 	•	 	 Batches shipped within 30 days of Catalytica issuing C of C/C of A 

  

	 	•	 	 Packaging components 

  

	 	1.	Bottle, plastic 8 oz 

  

	 	2.	Screwcap, 24mm/400 C/R 

  

	 	3.	Front bottle label, 16mm width x 70mm height 

  

	 	4.	Security label 

  

	 	5.	Carton, 76.2mm length x 57.15mm width x 158.75mm depth 

  

	 	6.	Insert, one page/single sided 

  

	 	7.	Tubing, PVC, printed, 54mm, R/F 

  

	 	8.	Press-In bottle adapter (PIBA) 

  

	 	9.	Exacta med dispenser 

  

	 	10.	Shipper, unprinted 

  

	 	11.	Pressure sensitive tape 

  

	 	12.	Bar code label 

  

	 	13.	Thermal label 

  

	 	14.	Shipper label 

 APPENDIX E 
 Regulatory Support 
 Attend all Catalytica project team meetings 
 Provide the following documents to ORPHAN’S regulatory affairs department to support submissions under the Agreement: 
 Copies of applicable executed batch records 
 Copies of blank master production batch records 
 Database printout of analytical results for drug substance, inactive ingredients,
and drug products 
 Stability database printout of stability data and stability protocol 
 Copies of Catalytica analytical standards (specifications and testing instructions) for drug substance, inactive ingredients and drug product 

Catalytica official name, address and establishment registration number 
 Certificate of cGMP compliance 
 Debarment certification 
 Submission-ready packaging description 
 Submission-ready environmental assessment categorical exclusion (when appropriate) 
 Perform regulatory review of the above-listed
documents. Unless noted otherwise, such documents will not be suitable for submission to Regulatory Agencies. 

 Regulatory Consulting 
 Act as on-site coordinating resource to Catalytica scientists regarding CMC issues for the project 
 Act as
point of contact between ORPHAN regulatory affairs department and Catalytica regarding issues that impact registration of CMC information 
 Keep ORPHAN regulatory affairs informed of all CMC regulatory issues regarding Catalytica’s manufacture of the Product 
 Agree
on final documentation deliverables to support regulatory submissions 
 Provide CMC regulatory advice regarding strategy/documentation to
support regulatory submissions 
  

 APPENDIX F 
 Quality Agreement 

 INTERCOMPANY QUALITY AGREEMENT 
 ORPHAN MEDICAL, INC. 
 13911 Ridgedale Drive, Suite 475 
 Minnetonka, Minnesota 55305 
 (hereafter called
“ORPHAN”) 
  

					
	 Approved by:
	 	 /s/ Randall Tlachac
	 	Date: 6/12/00
		 	Director, Quality Assurance, ORPHAN	 	

 AND 
 Catalytica Pharmaceuticals, Inc. 
 Greenville, North Carolina 
 (hereafter called “C*P”) 
  

					
	 Approved by:
	 	 /s/ K.S. Manning
	 	Date: 14 June 2000
		 	Vice President, Quality Operations, C*P	 	

 The Products and Drug Substance Listed in Appendix 
 (hereafter called “the PRODUCTS”) 
 are subject to the following conditions: 

					
	Section	  	 TABLE OF CONTENTS
	  	Page
	1	  	QUALITY AGREEMENT	  	4
	1.1	  	Purpose	  	4
	1.2	  	Relationship to Definitive Agreement	  	4
			
	2	  	PRODUCTS	  	4
			
	3	  	ADMINISTRATIVE INFORMATION	  	4
			
	4	  	DURATION OF AGREEMENT	  	5
			
	5	  	MANUFACTURING GMP COMPLIANCE	  	5
	5.1	  	General	  	5
	5.2	  	Premises	  	5
	5.3	  	GMP Guidelines	  	5
	5.4	  	Materials	  	5
	5.5	  	Master Production Records	  	6
	5.6	  	Standard Operating Procedures	  	6
	5.7	  	Batch Numbers	  	6
	5.8	  	Dates of Manufacture and Expiration	  	7
	5.9	  	Manufacturing and Equipment Data	  	7
	5.10	  	Storage and Shipment	  	7
			
	6	  	QUALITY CONTROL	  	8
	6.1	  	General	  	8
	6.2	  	Materials Supplied by C*P	  	8
	6.3	  	In-Process and Finish Product Testing	  	8
	6.4	  	Retain Samples	  	8
	6.5	  	Routine Stability Program	  	8
	6.6	  	Out-of-Specification (OOS) Investigations	  	8
			
	7	  	QUALITY ASSURANCE	  	9
	7.1	  	Deviations and Investigations	  	9
	7.2	  	Batch Disposition	  	9
	7.3	  	Product Release	  	9
	7.4	  	Product Complaints and Recall	  	10
	7.5	  	Records Retention	  	10
	7.6	  	QA Presence in the Manufacturing Facility	  	10
			
	8	  	REGULATORY COMPLIANCE	  	10
	8.1	  	Regulatory Inspections	  	10
	8.2	  	Regulatory Actions	  	10
	8.3	  	Regulatory Affairs	  	11
	8.4	  	Right to Audit	  	11
	8.5	  	Audit Closeout	  	11

  

					
	Section	  	 TABLE OF CONTENTS (Cont’d)
	  	Page
	9	  	DISPUTE RESOLUTION	  	12
	9.1	  	Non-Conformity Dispute	  	12
	9.2	  	Test Result Dispute	  	12
			
	10	  	CHANGE MANAGEMENT	  	12
	10.1	  	Controlled Documentation	  	12
	10.2	  	Change Control	  	13
			
	11	  	PRODUCT AND PROCESS VALIDATION	  	13
	11.1	  	Process	  	13
	11.2	  	Cleaning Validation	  	13
	11.3	  	Equipment, Computer, Facility and Utilities Qualification	  	13
	11.4	  	Laboratory Qualification	  	13
			
	12	  	ANNUAL PRODUCT REVIEW, ANNUAL REPORT AND DRUG LISTING	  	13
	12.1	  	Annual Product Review	  	13
	12.2	  	Drug Listing	  	14
			
		  	APPENDIX I - The PRODUCTS	  	15
		  	APPENDIX II - List of Quality Contracts	  	16
		  	APPENDIX III - Release Documentation	  	17

	1.	QUALITY AGREEMENT 

  

	 	1.1	Purpose 

  

	 	1.1.1	This agreement defines the roles and responsibilities for Catalytica Pharmaceuticals (C*P) Quality Operations in providing services to ORPHAN. 

  

	 	1.1.2	This agreement also defines how C*P Quality Operations and ORPHAN Quality Department will interact with each other. 

  

	 	1.2	Relationship to Definitive Agreement 

  

	 	1.2.1	This agreement shall be incorporated within and constitute a part of the Definitive Agreement between the two companies. 

  

	 	1.2.2	In the event of a conflict between any of the provisions of the Quality Agreement and the Definitive Agreement, the provisions of the Definitive Agreement shall govern.

  

	2.	PRODUCTS 

  

	 	2.1	The PRODUCTS prepared for ORPHAN by C*P are described in Appendix I. 

  

	3.	ADMINISTRATIVE INFORMATION 

  

	 	3.1	ORPHAN contact names: See Appendix II 

  

	 	3.2	C*P contact names: See Appendix II 

  

	 	3.3	Emergency contact names and numbers, during and outside working hours: 

 ORPHAN 
 Randall Tlachac 
 Director Quality 
 Assurance 
 Work: (612)513-6998 
 Home: (612) 557-0382 
 CATALYTICA 
 Ken Manning, Ph.D 
 Vice President, Quality 
 Operations Work:
(252) 707-2104 
 Beeper: (252) 551-1262 

	4.	DURATION OF AGREEMENT 

 The agreement will expire
with termination of the Definitive Agreement. The agreement can be modified as needed with the written approval of both parties. 
  

	5.	MANUFACTURING GMP COMPLIANCE  

  

	 	5.1	General 

  

	 	5.1.1	The manufacturing operations for the PRODUCTS to be performed by C*P are defined in the Definitive Agreement. 

  

	 	5.2	Premises 

  

	 	5.2.1	C*P will perform required operations for manufacturing activities at the Greenville site. 

  

	 	5.2.2	The premises and equipment used to manufacture the PRODUCTS will meet or exceed current regulatory requirements. 

  

	 	5.2.3	The production of the PRODUCTS will be conducted in a suitably controlled environment and such facilities will be regularly monitored for parameters critical to the process to
demonstrate compliance with applicable GMP guidelines, and any disclosed conditions registered in the manufacturing authorization. 

  

	 	5.2.4	C*P will maintain controlled access to the premise. 

  

	 	5.3	GMP Guidelines 

  

	 	5.3.1	The principles detailed in the US Current Good Manufacturing Practices (21 CFR 200, 211, and 600) and the Rules Governing Medicinal Product in The European Community—Volume IV
Good Manufacturing Practice for Medicinal Products Guidelines will cover the standards of manufacture of the PRODUCTS, as well as, the product specifications and any applicable product license or pharmacopoeia or formulatory requirements.

  

	 	5.4	Materials 

  

	 	5.4.1	C*P will use only chemical materials, packaging, and labeling components approved by ORPHAN and tested in accordance with the documentation reviewed and approved by ORPHAN.

  

	 	5.4.2	Materials procured by C*P 

  

	 	5.4.2.1	C*P is responsible for ensuring that all DRUG SUBSTANCES, materials, and components procured by C*P for use in the PRODUCTS are in full compliance with the specifications listed in
the documentation reviewed and approved by ORPHAN. 

	 	5.4.2.2	C*P is responsible for ensuring that all materials are stored properly, used correctly, appropriately tested upon receipt, and traceable to the relevant Certificate of Analysis for
the materials. 

  

	 	5.4.2.3	C*P is responsible for auditing and qualifying vendors of drug substances used in PRODUCTS and will provide ORPHAN with a Certificate of Conformance statement for such vendors when
requested. 

  

	 	5.4.3	Materials Provided by ORPHAN for C*P 

  

	 	5.4.3.1	ORPHAN is responsible for ensuring that all materials and components provided by ORPHAN for use in the PRODUCTS are in full compliance with the specifications registered. ORPHAN
will provide C*P a Certificate of Conformance statement for the vendors that ORPHAN is responsible for qualifying. 

  

	 	5.5	Master Production Records 

  

	 	5.5.1	C*P may transcribe the manufacturing information (i.e., formulation, filing work order, packaging work order) into its own format and may obtain written approval from ORPHAN for
each document version before manufacturing. However, agreed upon changes to documentation will be handled as outlined by Change Management (see section 10) of this agreement. 

  

	 	5.6	Standard Operating Procedures 

  

	 	5.6.1	C*P is responsible for maintaining any SOPs required to manufacture, test, and store the PRODUCTS at C*P in accordance with applicable GMP guidelines. 

  

	 	5.7	Batch Numbers 

  

	 	5.7.1	The convention for the C*P “Batch Identification Number” (BIN) is as follows: 

  

	 	•	 	 The first digit of the BIN is the last number of the year that the working formula was issued or the labwork was requested. 

  

	 	•	 	 The second digit of the BIN is the letter that corresponds to the month that the working formula was issued or the labwork was requested. The letter assignment is
as listed for the following years: 

  

			
	 From 1997 through
2006

	 A = January
	  	G = July
	 B = February
	  	H = August
	 C = March
	  	I = September
	 D = April
	  	J = October
	 E = May
	  	K = November
	 F = June
	  	L= December

			
	 From 2007 through
2016

	 M = January
	  	T = July
	 N = February
	  	U = August
	 O = March
	  	W = September
	 P = April
	  	X = October
	 R = May
	  	Y= November
	 S = June
	  	Z= December

  

	 	•	 	 The third through the sixth digits are four sequential numbers that are assigned from the reserved number series (1200 to 2599) designated for routine
pharmaceutical production. 

  

	 	5.8	Dates of Manufacture and Expiration 

  

	 	5.8.1	Date of Manufacture - C*P will allocate the Date of Manufacture based on the completion of compounding the PRODUCT. 

  

	 	5.8.2	Expiration Date - C*P will calculate the expiry date from the Date of Manufacture using the currently approved expiry period. The expiration date will be the last day of the month
computed above. 

  

	 	5.9	Manufacturing and Equipment Data 

  

	 	5.9.1	C*P is responsible for keeping records of equipment usage (previous PRODUCT produced in non-dedicated equipment), cleaning, and any maintenance/calibration performed.

  

	 	5.10	Storage and Shipment 

  

	 	5.10.1	Storage - C*P will store the PRODUCTS under conditions approved by ORPHAN as listed in the specifications. C*P will ensure that during storage before shipping of the PRODUCTS that
appropriate controls are in place to ensure no interference, theft, product contamination, or admixture with any other materials. ORPHAN will provide details of any labeling requirements and container sealing and integrity. 

 

	 	5.10.2	Packaging and Labeling for Transit - The PRODUCTS will be labeled and packaged for transit as per ORPHAN. 

  

	 	5.10.3	Mixing of PRODUCTS - C*P will maintain proper segregation of the PRODUCTS according to systems reviewed and approved by ORPHAN. 

  

	 	5.10.4	Shipment of Product to ORPHAN - Only approved, finished (unless required by ORPHAN), labeled PRODUCTS will be shipped by C*P to ORPHAN. Any shipment of product from C*P which is
Unapproved or under Quarantine requires prior written consent by the ORPHAN’S Quality Unit. This authorization will be on a lot by lot basis. 

	6.	QUALITY CONTROL 

  

	 	6.1	General 

  

	 	6.1.1	The testing activities for the PRODUCTS are to be performed by C*P as defined in the Definitive Agreement. In general, C*P is responsible for final product assays and product
release. 

  

	 	6.2	Materials supplied by C*P 

  

	 	6.2.1	Quality control of materials supplied by C*P will be undertaken by C*P. 

  

	 	6.3	In-Process and Finish Product Testing 

  

	 	6.3.1	C*P will perform all in-process and finished product testing using approved specifications and methods of analysis listed in the Definitive Agreement. 

  

	 	6.3.2	A C*P Qualified Person/QA Representative will sign a Certificate of Conformity confirming that the product has been manufactured, packaged, tested, and meets the requirements of the
Master Batch Record and Drug Product Specification. The current release documentation information can be found in Appendix III. 

  

	 	6.3.3	ORPHAN may perform testing to confirm the C*P data. ORPHAN may perform confirmatory testing during the initial term of the agreement to validate the C*P data. Periodically
thereafter, ORPHAN may test material to confirm the C*P data. Dispute resolutions in conflicting test data will be handled per Section 9. 

  

	 	6.3.4	ORPHAN may perform release testing at a contract laboratory. Copies of all related documentation will be provided to C*P upon request to support final release.

  

	 	6.4	Retained Samples 

  

	 	6.4.1	Active Ingredients - C*P will retain samples of the active ingredients as agreed between C*P and ORPHAN. The amount of sample retained will be twice the quantity required to carry
out all of the tests required to determine if the material meets its specifications. 

  

	 	6.4.2	Products - C*P will retain samples of the PRODUCTS for at least one year beyond the expiry period. The amount of sample retained will be twice the quantity required to carry out all
of the tests required to determine if the material meets its specifications. 

  

	 	6.5	Routine Stability Program 

  

	 	6.5.1	ORPHAN is responsible for maintaining a Stability Program and will request samples from Drug Product lots to be placed on stability. 

  

	 	6.6	Out-of-Specification (OOS) Investigations 

  

	 	6.6.1	 C*P is responsible for investigating any testing performed by C*P that fails to meet specifications. Each investigation will be reviewed by C*P’s designated
Quality person per internal SOPs, and will comply with Section 7.1 (Deviations and Investigations) of this agreement. C*P will inform Orphan of all Phase I OOS 

	 	 
results and any subsequent retest results. C*P will inform ORPHAN of all confirmed OOS (Phase II) Investigations prior to their resolution and final
determination. 

  

	 	6.7	Contract QC Laboratories 

  

	 	6.7.1	ORPHAN is responsible for ensuring the compliance of any QC lab contracted to perform testing of the PRODUCTS used in the manufacture of the PRODUCTS. 

  

	7.	QUALITY ASSURANCE 

  

	 	7.1	Deviations and Investigations 

  

	 	7.1.1	Deviations - Any deviation from the process during manufacture must be carefully explained and documented in the batch records, justified, and approved by C*P Quality Assurance and
Production Management and included in the document package. ORPHAN will be informed at the time of all PFERs and reserves the right to participate in the investigation. Deviations will be processed per C*P SOP “Pharmaceutical
Process/Formulation Exception Report (PFER)”. 

  

	 	7.1.2	C*P will notify ORPHAN of any batch of PRODUCTS rejected by C*P. 

  

	 	7.1.3	C*P will notify ORPHAN immediately, in writing, if any problems are discovered that may impact PRODUCTS batch(es) previously shipped to ORPHAN. 

  

	 	7.1.4	Some deviations/failures may require additional testing to be performed as agreed by both parties. 

  

	 	7.2	Batch Disposition 

  

	 	7.2.1	For each batch, C*P will provide the documentation required in Appendix III. 

  

	 	7.2.2	Certificate of Compliance/Analysis 

  

	 	7.2.2.1	C*P is responsible for ensuring and certifying that the PRODUCTS have been manufactured according to the specifications/procedures documented in the Master Production Records.

  

	 	7.2.2.2	C*P Qualified Person/QA Representative will sign a Certificate of Compliance confirming that the PRODUCTS have been manufactured, packaged, tested and stored according to the
requirements of the Master Production Record and the Drug Product Specification. 

  

	 	7.2.2.3	C*P will provide a Certificate of Analysis indicating the test result from each test performed. 

	 	7.3	Product Release 

  

	 	7.3.1	Release of the PRODUCTS is the absolute responsibility of ORPHAN Quality and will be undertaken by ORPHAN based on ORPHAN’S internal procedures, the full document package
provided by C*P, and completion of any release testing required by ORPHAN Quality Control. 

  

	 	7.3.2	Any problem discovered by ORPHAN likely to cause rejection of the PRODUCTS will be communicated to C*P within 30 days from receipt of the full release documentation package (see
Appendix III). 

  

	 	7.4	Product Complaints and Recalls 

  

	 	7.4.1	Product Complaints - ORPHAN is responsible for receiving and initially investigating any PRODUCTS complaints. ORPHAN will notify C*P of any problems thought to be due to
manufacture, which are found during the distribution of the PRODUCTS. When requested by ORPHAN, C*P will promptly perform investigations for these problems. Investigation reports will be forwarded to ORPHAN within 30 days. 

 

	 	7.4.2	Product Recall - ORPHAN is responsible for instituting a PRODUCTS recall due to any defect considered sufficiently serious. ORPHAN will notify C*P of any recall which may be due to
the manufacturing of PRODUCTS. C*P will provide a rapid initial response, perform investigations and provide a full report within ten working days. 

  

	 	7.5	Records Retention 

  

	 	7.5.1	C*P will retain, at a minimum, batch production records for the PRODUCTS and materials for seven years. 

  

	 	7.6	QA Presence in the Manufacturing Facility 

  

	 	7.6.1	C*P will maintain adequate QA presence and permit ORPHAN’S presence in the manufacturing facility during the manufacture of the PRODUCTS to ensure compliance with applicable
GMPs. 

  

	8.	REGULATORY ; 

  

	 	8.1	Regulatory Inspections 

  

	 	8.1.1	C*P will immediately inform ORPHAN of any regulatory inspections that may involve the PRODUCTS and permit a representative of ORPHAN Quality to be present at such inspections, if
required by ORPHAN. 

	 	8.1.2	C*P will secure ORPHAN’S approval prior to making any commitment to a regulatory agency regarding ORPHAN’S PRODUCTS. 

  

	 	8.1.3	Additionally, C*P will immediately forward any regulatory correspondence on the PRODUCTS to ORPHAN. 

  

	 	8.1.4	ORPHAN will inform C*P in writing of any regulatory issue that impacts C*P’s ability to manufacture the PRODUCTS. 

  

	 	8.2	Regulatory Actions 

  

	 	8.2.1	ORPHAN will notify C*P of any regulatory actions on the PRODUCTS that may impact C*P. 

  

	 	8.2.2	C*P is responsible for supporting all batch record investigations associated with regulatory actions. 

  

	 	8.2.3	C*P agrees to supply ORPHAN with any manufacturing, testing, or storage data within 48 hours, if requested, as the result of a regulatory inspection, or a potential regulatory
exposure such as a recall or significant product complaint. 

  

	 	8.3	Regulatory Affairs 

  

	 	8.3.1	ORPHAN is responsible for ensuring all appropriate regulatory filings and export documentation are filed with Regulatory Agencies prior to shipment/human administration.

  

	 	8.3.2	ORPHAN will be responsible for making final decisions regarding CMC regulatory strategy. 

  

	 	8.3.3	ORPHAN will provide a copy of final Regulatory Submissions to C*P Regulatory Affairs for reference during inspections. 

  

	 	8.4	Right to Audit 

  

	 	8.4.1	C*P will allow representatives of ORPHAN Quality to have access to relevant manufacturing, warehousing, laboratory premises, and records for audit purposes listed below in 8.4.2
through 8.4.4. ORPHAN representatives will be escorted at all times by C*P personnel. 

  

	 	8.4.2	ORPHAN will give C*P a 30 day notification for all planned audits. 

  

	 	8.4.3	C*P will permit representatives of ORPHAN Quality to conduct preparatory audits either for initiation of GMP manufacture of the PRODUCTS or for preapproval inspections (PAI).

  

	 	8.4.4	C*P will permit representatives of ORPHAN Quality to conduct audits to address significant product quality problems. 

	 	8.4.5	C*P will permit representatives of ORPHAN Quality to perform one standard GMP compliance audit per year not to exceed three working days and two groups of two auditors each. This
includes audits required by ORPHAN’S commercial partners. 

  

	 	8.5	Audit Closeout 

  

	 	8.5.1	An exit meeting will be held with representatives of C*P and ORPHAN to discuss significant audit observations. 

  

	 	8.5.2	ORPHAN will provide a written report of all observations within 30 days to C*P. Within 30 days of the audit report receipt, C*P will provide a written response to all findings that
details corrective action to be implemented. C*P will follow up to ensure that all corrective actions are implemented. 

  

	9	DISPUTE RESOLUTION 

  

	 	9.1	Non-Conformity Dispute 

  

	 	9.1.1	In the event that a dispute arises between C*P and ORPHAN in the nonconformity of a batch of the PRODUCTS, the heads of Quality from both companies shall in good faith promptly
attempt to reach an agreement. Whatever the outcome, ORPHAN Quality retains the absolute right to determine product release status. Financial liability is determined in the Definitive Agreement. 

  

	 	9.2	Test Result Dispute 

  

	 	9.2.1	In the event that a dispute arises between C*P and ORPHAN in the testing performed by C*P for the PRODUCTS, the resolution will proceed in stages. The first stage requires direct
communication between analysts from both parties to determine that the methods of analysis are the same and are being executed in the same manner at both sites. Second, carefully controlled and split samples should be sent from one site to another
in an attempt to reach agreement. Should there be a failure to achieve resolution, analysts from both parties will be required to meet to work through the analysis of a mutually agreeable sample. If these actions fail to achieve resolution, and only
after these avenues have been exhausted, a qualified referee laboratory will be used to achieve resolution. This laboratory must be agreeable to both parties prior to use. The results from this referee laboratory will be used as final authority to
determine responsibilities, but whatever the outcome, ORPHAN retains the right to determine product release status. Financial liability is determined in the Definitive Agreement. 

  

	10.	CHANGE MANAGEMENT 

  

	 	10.1	Controlled Documentation 

  

	 	10.1.1	All manufacturing, testing, and storage operations performed by C*P for the PRODUCTS will have ORPHAN Quality review and written approval within five business days of notification.
ORPHAN’S Quality review and approval signifies the conformance of C*P documents to ORPHAN’S CMC regulatory submissions. 

	 	10.1.2	Any significant changes will be mutually agreed upon in writing prior to 

 implementation. All required regulatory approvals will be obtained prior to implementation. 
  

	 	10.1.3	ORPHAN shall provide to C*P a list of all documents referenced in the CMC submissions which are subject to Change Control. These documents will be required to be approved by both
ORPHAN and C*P, and both parties agree to subject these documents for approval per Change Control. ORPHAN shall be responsible for meeting regulatory submission requirements based on the status of these documents. 

  

	 	10.2	Change Control 

  

	 	10.2.1	Changes to the controlled documents or to validated equipment and systems specific to the PRODUCTS must have ORPHAN Quality written approval, prior to implementation.

  

	 	10.2.2	Administration changes to the controlled documents (e.g., typo corrections, formatting) do not require ORPHAN Quality written approval prior to implementation, but these changes
must be submitted to ORPHAN Quality in a timely manner for review and approval. 

  

	11.	PRODUCT AND PROCESS VALIDATION 

  

	 	11.1	Process - C*P is responsible for ensuring that the manufacturing process is validated. The validation should ensure that the process is capable of consistently achieving the
PRODUCTS acceptance specification. 

  

	 	11.2	Cleaning Validation - C*P is responsible for ensuring that adequate cleaning is carried out between batches of different products to prevent contamination. ORPHAN will provide
information (i.e. LD50, toxicity, solubility, batch size, fill volume, product min dose/70Kg patient) to establish cleaning limits. The cleaning procedure and analytical methodology will be reviewed before the first product batches are made.

  

	 	11.3	Equipment, Computer, Facility, and Utilities Qualification — C*P is responsible for all equipment, computer, facility, and utility qualification activities associated with the
PRODUCTS. 

  

	 	11.4	Laboratory Qualification - C*P is responsible for ensuring that all laboratories are in compliance with applicable GMP guidelines. If analytical work is performed at C*P, then
ORPHAN will also provide any existing analytical documentation to assist in methods transfer or methods validation. In addition, if analytical work is not performed at the Greenville site, C*P may elect to perform an audit on vendors to be used for
analytical testing appropriate to manufacture of the PRODUCTS. 

	12.	ANNUAL PRODUCT REVIEW, ANNUAL REPORT AND DRUG LISTING  

  

	 	12.1	Annual Product Review 

  

	 	12.1.1	C*P will perform an Annual Product Review for the PRODUCTS and will issue a report to ORPHAN. This report will cover all manufacturing, testing, and storage activities performed by
C*P. It will be a review of any changes at C*P in the manufacturing, testing, storage or validation of the PRODUCTS in the previous calendar year and a summary of lots made, released, and rejected. Also, control charting or trend analysis of key
product parameters will be performed. Any abnormalities will be explained in the annual review. 

  

	 	12.1.2	ORPHAN is responsible for preparing any Annual Report as required by applicable regulations, including 21 CFR314.7(g)(3), 314.81(b)(2), and/or 601.12(d), (f)(3). At least 90
calendar days before the Annual Report due date, ORPHAN shall request in writing from C*P the chemistry, manufacturing, and controls data required for submission of the Annual Report. C*P will provide the requested information to ORPHAN within 30
days. 

  

	 	12.2	Drug Listing 

  

	 	12.2.1	C*P is responsible for drug listing as the manufacturer of the PRODUCTS, while ORPHAN is responsible for drug listing as the distributor of the PRODUCTS. ORPHAN will provide C*P
with all required information needed by them for their listing. ORPHAN will notify C*P of the scheduled PRODUCTS launch date. 

 APPENDIX I 
 The PRODUCTS 
 XYREM ORAL SOLUTION 

 APPENDIX II 
 List of Quality Contacts 
 (name, phone, fax, e-mail) 
  

							
	 ISSUE
	  	 ORPHAN
	  	 C*P
	  	 
	Product Release	  	 Brian Miller, Ph.D
 Ph: (612) 513-6978
 Fax:(612)541-9209
 bmiller@orphan.com
	  	 Jason Williams
 Ph: (252) 707-2182

Fax: (252) 707-7306
 jwilliams@catalytica-pharm.com
	  	
				
	QC Testing	  	 Brian Miller, Ph.D
 Ph: (612) 513-6978
 Fax:(612)541-9209
 bmiller@orphan.com
	  	 Kirit Amin
 Ph: (252) 707-2372
 Fax: (252) 707-7027
 kamin@catalytica-pharm.com
	  	
				
	Investigations	  	 Brian Miller, Ph.D
 Ph: (612) 513-6978
 Fax:(612)541-9209
 bmiller@orphan.com
	  	 Madhukar Mehta
 Ph: (252) 707-2004

Fax: (252) 707-2134
 mmehta@catalytica-pharm.com
	  	
				
	Regulatory Affairs	  	 Nancy Teasdale
 Ph: (612) 513-6975
 Fax:(612)541-9209
 nteasdale@orphan.com
	  	 Beverly Lewis
 Ph: (252) 707-7913
 Fax: (252) 2326
 blewis@ catalytica-pharm.com
	  	
				
	Validation	  	 Brian Miller, Ph.D
 Ph: (612) 513-6978
 Fax: (612) 541-9209
 bmiller@orphan.com
	  	 Frank Anasti
 Ph: (252) 707-2651
 Fax: (252) 707-7678
 fanasti@catalytica-pharm.com
	  	
				
	Compliance Audits	  	 Randall Tlachac
 Ph: (612) 513-6998
 Fax: (612) 541-9209
 rtlachac@orphan.com
	  	 Madhukar Mehta
 Ph: (252) 707-2004

Fax:(252)707-2134
 mmehta@catalytica-pharm.com
	  	
				
	Product Complaints	  	 Brian Miller, Ph.D
 Ph: (612) 513-6978
 Fax:(612)541-9209
 bmiller@orphan.com
	  	 Madhukar Mehta
 Ph: (252) 707-2004

Fax:(252)707-2134
 mmehta@catalytica-pharm.com
	  	
				
	Change Management	  	 Brian Miller, Ph.D
 Ph: (612) 513-6978
 Fax:(612)541-9209
 bmiller@orphan.com
	  	 Madhukar Mehta
 Ph: (252) 707-2004

Fax:(252)707-2134
 mmehta@catalytica-pharm.com
	  	

 APPENDIX III Release 
 Documentation 
 The Batch/Lot Release Document Package will include a Certificate of Analysis and Certificate of Compliance.

 Certificate of Analysis (COA) 
 This document will
include the name of the PRODUCT, the batch number and the date of manufacture. The COA will list the In-Process QC tests performed by C*P and actual test results. The COA will also list the product release QC tests performed by C*P and actual test
results. 
 Certificate of Compliance (COC) 
 This
document will attest to the fact that the batch of PRODUCTS was made in accordance with all applicable regulations, product licenses, and company policies. This document will include the batch quantity approved, the batch yield, and the expiration
date. It will also include a listing of all manufacturing variances and/or incidents for the batch.Letter Amendment No. 1, dated as of November 9, 2000

 EXHIBIT 10.38 
 

 
 Catalytica 
 Pharmaceuticals 
 November 9, 2000 
 Mr. Randall J. Tlachac 
 Orphan Medical 
 13911 Ridgedale Drive 
 Suite 475 

Minnetonka, MN, 55305 
 Dear Randy,

 I am pleased to provide this revised commercial pricing for Xyrem Oral Solution. The new pricing includes the requested component/packaging
changes. I have also attached an amended “APPENDIX D” which includes the pricing, packaging details and related assumptions. All raw materials and packaging components are included, except the sodium oxybate bulk active. 
 Commercial Pricing 
  

							
	 Volume Breaks
	  	Conversion	  	Materials	  	Total Unit Price
	 < 300,000 units/year
	  	1.07	  	3.43	  	4.50
	 300,000—1,000,000 units/year
	  	.98	  	3.19	  	4.17
	 > 1,000,000 units/year
	  	.80	  	3.02	  	3.82

  

	 	•	 	 Volume price breaks based on annual production 

  

	 	•	 	 Pricing is based on the assumptions listed on page 2 of this letter 

  

	 	•	 	 Any change in the assumptions listed on page 2 of this letter will require that pricing be re-evaluated 

 Please indicate Orphan’s approval/acceptance of the above commercial pricing by having the appropriate individual sign and date in the space provided
below. 
 If you have any questions or need further clarification, please do not hesitate to call. 
 Sincerely, 
  

					
	 /s/ David Smithwick
	 		 	
	David Smithwick, Contract Manager	 		 	
			
	 /s/ Randall Tlachac
	 		 	 12/5/00

	Orphan Representative	 		 	Date
			
	 Director, Quality Assurance
	 		 	
	Title	 		 	

  

							
	 cc:
	  	Marie Mayo        Lori Thigpen        File (2)	  		  	

 Proposal Valid for 60 days 
 Confidential 
 Catalytica Pharmaceuticals, Inc. • P.O. Box 1887 •
Greenville, NC 27835-1887 • 252-758-3436 

 November 9, 2000 
 ASSUMPTIONS 
  

	 	•	 	 Volume price breaks based on annual production 

  

	 	•	 	 7 year Commercial Supply Agreement 

  

	 	•	 	 Subject to annual price increase specified in commercial supply agreement 

  

	 	•	 	 DEA Schedule CIII with ARCOS reporting 

  

	 	•	 	 Sodium Oxybate supplied by Orphan 

  

	 	•	 	 Orphan to supply C of C on Sodium Oxybate 

  

	 	•	 	 Manufactured four times per year or once per quarter (campaign) 

  

	 	•	 	 Minimum of three batches per campaign 

  

	 	•	 	 Each additional campaign will carry a setup charge of $15,500 

  

	 	•	 	 Manufacturing batch size of 1,000 gallon /~15,360 200ml bottles 

  

	 	•	 	 To be ordered in full batch size quantities 

  

	 	•	 	 Batches shipped within 30 days of Catalytica issuing CofC/CofA 

  

	 	•	 	 Packaging components 

  

	 	1.	Bottle, plastic 8 oz 

  

	 	2.	Screwcap, 24mm/400 C/R 

  

	 	3.	Front bottle label, 60mm width x 70mm height 

  

	 	4.	Security label—(2) top and bottom of carton 

  

	 	5.	Carton, 98.42mm length x 93.66mm width x 156.37mm depth 

  

	 	6.	Insert, one page/single sided 

  

	 	7.	Tubing, PVC, unprinted, 54mm, R/F 

  

	 	8.	Press-In bottle adapter (PIBA) 

  

	 	9.	Exacta med dispenser 

  

	 	10.	Shipper, Preprinted 

  

	 	11.	Pressure sensitive tape 

  

	 	12.	Bar code label 

  

	 	13.	Vial (2) 

  

	 	14.	Screwcap (for Vial) (2) 

 Proposal Valid for 60 days

 Confidential 
  

 - 2 -

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