Document:

Exhibit 10.27

 

Confidential
Materials omitted and filed separately with the 

Securities and Exchange Commission. Asterisks denote omissions.

 

AMENDMENT TO LICENSE AGREEMENT

 

This
Amendment is effective January 1, 2006 (the “Effective Date”), and amends
that certain License Agreement dated August 24, 2001 (the “License”) by
and between:

 

QLT USA, Inc. (formerly Atrix Laboratories, Inc.) (“QLT USA”), with place of
business at 2579 Midpoint Drive, Fort Collins, Colorado 80525

 

And

 

CollaGenex Pharmaceuticals, Inc. (“CollaGenex”), with place of business at 41
University Drive, Newtown, PA 18940.

 

WHEREAS
CollaGenex has been unsuccessful in preventing generic competition to its
flagship dental product Periostat ®, and as a result has ceased to invest in
the marketing and sale of dental products; and

 

WHEREAS
QLT USA and CollaGenex agree to amend the License on the terms and conditions
set out herein:

 

NOW
THEREFORE in consideration of the premises and mutual covenants and agreements
set out in this Amendment and other good and valuable consideration, the
sufficiency of which are acknowledged, the parties to this Amendment agree as
follows:

 

1.                                       Amendments

 

Effective
as of the Effective Date, the Agreement is hereby amended as follows:

 

I.                                         Section 3.02 [Royalty Payments] is
deleted and replaced with the following:

 

“3.02       CollaGenex will pay Atrix in each calendar
year a royalty of [**]% based on aggregate Net Sales of the Products in each
such calendar year.”

 

II.                                     Section 4.04 [CollaGenex Contribution
Margin] is deleted.

 

III.                                 Section 6.01 [Term] is deleted and
replaced with:

 

“6.01       This Agreement will take effect on the
Effective Date and will expire on December 31, 2007 (the “Initial Term”),
subject to earlier termination as permitted under the Agreement, provided, however,
that this

 

 

Agreement shall automatically renew for successive
renewal terms of one year each unless either party has provided written notice
of the termination of this Agreement not less than 60 days prior to the expiry
date of the then current term or renewal term, as the case may be (the
Initial Term and any such renewal term, collectively, the “Term”).”

 

IV.                                 Section 6.02 [Termination by CollaGenex]
is deleted in entirety and replaced by the following:

 

“6.02                     CollaGenex may terminate the Agreement
by notice to Atrix if Atrix shall commit any willful and material breach of the
provisions of this Agreement at any time after January 1, 2006, provided
however that (i) CollaGenex has first given Atrix notice specifying the
details of the material breach, and (ii) Atrix has not cured such material
breach within 30 days of the effective date of notice of the material breach.”

 

V.                                     Section 6.03(d) [Termination by
Atrix] is deleted and replaced by:

 

“(d)                           if CollaGenex shall commit any willful and
material breach of the provisions of this Agreement at any time after January 1,
2006;”.

 

VI.                                 Section 6.04 [Termination upon certain
Events] is amended by adding a new Section 6.04(c) immediately after Section 6.04(b),
which subsection (c) shall read as follows:

 

“(c)                            This Agreement may be terminated by either Party upon six months
prior written notice given at any time for any reason (including for
convenience) to the other party.”

 

VII.                             Section 6.06 [Effect of Termination] is
amended by deleting in the first sentence of Section 6.06 “Sections 6.02
and 6.04” and replacing it with “Section 6.04”.

 

VIII.                         Paragraph 6.06(b) of Section 6.06
[Effect of Termination] is deleted.

 

IX.                                Paragraphs 6.06 (c), and 6.06(d) of Section 6.06
[Effect of Termination] are deleted.

 

X.                                    Section 6.07 [License Following
Expiration] is deleted.

 

XI.                                Paragraphs 7.01(a) and 7.01(d) of Section 7.01
[CollaGenex Obligations] are deleted.

 

XII.                            Section 7.02 [Marketing Advisory Board]
is deleted and all references to the Marketing Advisory Board elsewhere in the
Agreement shall be replaced by a reference to “appropriate representatives of
the Parties”.

 

XIII.                        Section 8.04(a) is amended by
adding after “If Atrix is unable to cure such failure within 15 business days
after such notice,” the following:

 

2

 

“Atrix will fill any such purchase order not
terminated by CollaGenex after its receipt of notice from Atrix under this Section 8.04(a) as
soon as reasonably practical, and Atrix will allocate the resources available
to it among its customers so that CollaGenex receives at least its proportional
share of available Product, or”.

 

XIV.                        Section 8.04(c) is deleted.

 

XV.                            Section 9.01 [Purchase Price and
Payment] is amended by deleting at the end of the first sentence “, which shall
be subject to adjustment in accordance with Section 9.02”.

 

XVI.                        Section 9.02 [Purchase Price Adjustment]
is deleted.

 

XVII.                    Section 9.08 [Professional Samples] is
deleted and replaced with the following:

 

“9.08                     Pursuant to the provisions of Section 9.07,
for so long as CollaGenex retains a license pursuant to Section 2.01 in
the Territory, Atrix shall supply to CollaGenex, upon request by CollaGenex and
at no cost to CollaGenex, Professional Samples up to the maximum and aggregate amount
of 1800 Units of Products in any
calendar year during the Term of the Agreement. CollaGenex (a) shall only
use the Professional Samples for marketing and promotional activities (e.g. as
professional or trial samples, or in association with other marketing
activities such as workshops, symposia or trade shows), (b) shall not sell
the Professional Samples and (c) shall not use the Professional Samples
other than for the primary intent of inducing future sales of ATRIDOX®.”

 

XVIII.                Section 11.03 [Phase IV Trials] is
deleted and replaced by the following:

 

“11.03               Neither
Party shall have any obligation to conduct a Phase IV study in respect of the
Products.”

 

XIX.                       Section 13.10 [Limitation of Liability]
is amended by adding the following at the end of the last sentence of the
paragraph:

 

“Notwithstanding the foregoing, in no event shall
Atrix have any liability to CollaGenex in connection with this Agreement or any
license granted under this Agreement in excess of the aggregate amounts paid by
CollaGenex to Atrix under this Agreement.”

 

XX.                           Sections 14.04 [A & S Spending
Levels], 14.05 [Variances], 14.06 [Cash Alternatives], 14.07 [Minimum Size of
Detail Force] and 14.08 [Detail Calls] are deleted.

 

3

 

XXI.                       Section 19.04 [Notices] is hereby
amended by deleting the existing addresses for notice if notice is provided to
QLT USA, and replacing it with the following:

 

“If to Atrix:

 

QLT USA, Inc.

2579 Midpoint Drive

Fort Collins, Colorado 80525-4417

Attention: 
President

 

Facsimile: 
(970) 482-9735

Telephone: 
(970) 482-5868

 

With a copy to:

 

QLT Inc.

887 Great Northern Way

Vancouver, British Columbia, Canada

V5T 4T5

 

	
   

  	
  Attention:

  	
  Legal Department

  
	
   

  	
  Telephone:

  	
  (604)
  707-7000

  
	
   

  	
  Facsimile:

  	
  (604) 873-0816”

  

 

XXII.                   The Fixed Price Schedule attached as Exhibit G
to the Agreement shall be amended, effective as of the Effective Date of this
Amendment, to read as follows, and may be further amended by Atrix in its
sole discretion upon notice to CollaGenex of any applicable price increases,
from time to time, with such amendments being effective with respect to any
purchase order placed after the date of notice of such amendment:

 

	
  “Product

  	
   

  	
  Purchase Price

  
	
   

  	
   

  	
   

  
	
  Atridox®:

  	
   

  	
  $

  	
  [**] per
  Unit

  
	
  Atrisorb® Free Flow:

  	
   

  	
  $

  	
  [**] per
  Unit

  
	
  Atrisorb® Free Flow with Doxycycline:

  	
   

  	
  $

  	
  [**] per
  Unit”

  

 

2.
Miscellaneous

 

I.                                         All capitalized terms used in this Amendment
and not otherwise defined will have the meaning given to them in the Agreement.

 

II.                                     Except as expressly amended by this
Amendment, all other terms and conditions of the Agreement remain unchanged and
in full force and effect.

 

III.                                 Marginal headings as used in this Amendment
are for the convenience of reference only and do not form a part of
this Amendment and are not to be used in the interpretation hereof.

 

IV.                                 This Amendment will enure to the benefit of
and be binding upon the parties and their respective successors and permitted
assigns.

 

4

 

V.                                     This Amendment may be executed in
counterparts with the same effect as if both parties had signed the same
document. Both counterparts will be construed together and will constitute one
and the same agreement. This Amendment may be executed by the parties and
transmitted by facsimile transmission and if so executed and transmitted this
Amendment will be for all purposes as effective as if the parties had delivered
an executed original Amendment.

 

In
witness whereof, the parties have executed this Amendment this 22nd day of
February, 2006

 

 

	
  /S/ David Pfeiffer

  	
   

  	
  /S/ Michael R. Duncan

  	
   

  
	
  CollaGenex Pharmaceuticals, Inc.

  	
  QLT USA, Inc.

  
	
  By:

  	
  David Pfeiffer

  	
  Michael R. Duncan

  
	
   

  	
  President

  
					

 

5Exhibit 10.28

 

Confidential Materials omitted and filed
separately with the 

Securities and Exchange Commission. Asterisks denote omissions.

 

COMMERCIAL MANUFACTURING AGREEMENT

 

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

 

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

 

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

 

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

 

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

 

ARTICLE 1

DEFINITIONS

 

The
following terms have the following meanings in this Agreement:

 

1.1                                 “Affiliate(s)”
means any corporation, firm, partnership or other entity which controls, is
controlled by or is under common control with a party. For purposes of this
definition, “control” shall mean the ownership of at least fifty percent (50%)
of the voting share capital of such entity or any other comparable equity or
ownership interest.

 

1.2                                 “API”
means the active pharmaceutical ingredient set forth in Exhibit A which
has been released by Client and provided to Cardinal Health, along with a
certificate of analysis, as provided in this Agreement.

 

 

1.3                                 “Applicable
Laws” means all laws, ordinances, rules and regulations within the
Territory applicable to the Processing of the Product or any aspect thereof and
the obligations of Cardinal Health or Client, as the context requires under
this Agreement, including, without limitation, (A) all applicable federal,
state and local laws and regulations of each Territory; (B) the U.S.
Federal Food, Drug and Cosmetic Act, and (C) the Good Manufacturing
Practices promulgated by the Regulatory Authorities, as amended from time to
time (“GMPs”). Applicable Laws shall also include all laws, ordinances, rules and
regulations applicable in Territories added to this Agreement in an amendment to this Agreement, solely to the extent
Client or its designee has provided written copies of such laws to Cardinal
Health prior to Cardinal Health’s Processing Product under this Agreement. Copies
of all laws shall be in the English language.

 

1.4                                 “Batch”
means defined quantity of formulated bulk drug product which is Manufactured
and Packaged in accordance with the Specifications.

 

1.5                                 “Calendar
Quarter” means a period of three (3) consecutive months commencing on January 1,
April 1, July 1 or October 1 of any calendar year.

 

1.6                                 “Cardinal
Health Materials” shall have the meaning set forth in Article 12.

 

1.7                                 “Change
Order” shall have the meaning set forth in Section 4.5(A).

 

1.8                                 “Commencement
Date” means the first date upon which a Regulatory Authority approves Cardinal
Health as a manufacturer of one of the Products.

 

1.9                                 “Confidential
Information” is as defined in Section 11.2.

 

1.10                           “Contract
Year” means each consecutive twelve (12) month period beginning on the
Commencement Date.

 

1.11                           “Client
Materials” shall have the meaning set forth in Article 12.

 

1.12                           “Defective
Product” shall have the meaning set forth in Section 5.2.

 

1.13                           “Dispute”
shall have the meaning set forth in Section 18.9.

 

1.14                           “Dosage
Container” means any final dosage form container(s) the parties may agree
upon in writing from time to time.

 

1.15                           “Effective
Date” means the date this Agreement was fully executed.

 

1.16                           “Facilities”
means Cardinal Health’s facilities located in Winchester, Kentucky, USA or such
other facility as agreed by the parties.

 

1.17                           “FDA”
means the United States Food and Drug Administration.

 

1.18                           “Firm
Commitment” shall have the meaning set forth in Section 4.2.

 

1.19                           “Minimum Requirement” shall have the meaning
set forth in Section 4.1.

 

2

 

1.20                           “Process”
or “Processing” means the
manufacturing and/or packaging of the API and Raw Materials into Product in
accordance with the Specifications and the terms and conditions set forth in
this Agreement.

 

1.21                           “Processing Date,” means the day on which the
Product is to be compounded by Cardinal Health.

 

1.22                           “Product” means the fully compounded bulk
drug product Processed and packaged in accordance with the Specifications.

 

1.23                           “Purchase Order” shall have the meaning set
forth in Section 4.3.

 

1.24                           “Raw Materials” means all raw materials,
supplies, components and packaging necessary to manufacture and ship the
Product in accordance with the Specifications, as provided in Exhibit A,
but not including the API.

 

1.25                           “Regulatory Approval” shall have the meaning
set forth in Section 7.4.

 

1.26                           “Regulatory Authority” means any governmental
regulatory authority within a Territory involved in regulating any aspect of
the development, manufacture, market approval, sale, distribution, packaging or
use of the Product.

 

1.27                           “Rolling Forecast” shall have the meaning set
forth in Section 4.2.

 

1.28                           “Specifications” means the procedures,
requirements, standards, quality control testing and other data and the scope
of services as set forth in Exhibit A, which are hereby
incorporated by reference into this Agreement, along with any valid amendments
or modifications thereto, subject to the terms and conditions set forth in Article 8.

 

1.29                           “Term” shall have the meaning set forth in Section 15.1.

 

1.30                           “Territory” means the United States of
America and any other country which the parties agree in writing to add to this
definition of Territory in an amendment to this Agreement.

 

1.31                           “Unit Pricing” shall have the meaning set
forth in Section 7.1.

 

1.32                           “Validation Batches” shall mean each Batch of
Product manufactured by Cardinal Health which is necessary to support the
validation portion of Client’s NDA or ANDA submission to the FDA.

 

ARTICLE 2

VALIDATION, PROCESSING & RELATED SERVICES

 

2.1                                 Validation
Services. Cardinal Health shall perform the qualification, validation
and stability services described in Exhibit A and Exhibit B
of this Agreement for the prices specified therein.

 

3

 

2.2                                 Supply
and Purchase of Product. During the Term, Cardinal Health shall Process the
Products in accordance with the Specifications, the Applicable Laws and the
terms and conditions of this Agreement. Client shall purchase the Product from
Cardinal Health in accordance with the terms and conditions of this Agreement.

 

2.3                                 Other
Related Services. Cardinal Health shall provide other services upon terms
and conditions agreed to by the parties in writing from time to time.

 

ARTICLE 3

MATERIALS

 

3.1                                 API.
Client shall supply to Cardinal Health for Processing, at Client’s sole cost,
the API and applicable reference standards in quantities sufficient to meet
Client’s requirements for each Product as further set forth in Article 4. Prior
to delivery of any of the API or reference standard to Cardinal Health for
Processing, Client shall provide to Cardinal Health a copy of the API Material
Safety Data Sheet (“MSDS”), as amended, and any subsequent revisions thereto. Client
shall supply the API, reference standards, and Certificate of Analysis FOB the
Facility no later than sixty (60) days before the scheduled Processing Date
upon which such API will be used by Cardinal Health. Upon receipt of the API,
Cardinal Health shall conduct identification testing of the API. Cardinal
Health shall use the API solely and exclusively for Processing under this
Agreement.

 

3.2                                 Raw
Materials. Cardinal Health shall be responsible for procuring, inspecting
and releasing adequate Raw Materials as necessary to meet the Firm Commitment,
unless otherwise agreed to by the parties in writing. In certain instances,
Client may require a specific supplier to be used for Raw Material. In
such an event, the suppliers will be specified in the Specifications, and
Client shall be responsible for the timeliness, quantity and quality of supply
of such Raw Materials. If the cost of any such Raw Material is greater than
Cardinal Health’s costs for the same raw material of equal quality from other
suppliers, Cardinal Health shall add the difference between Cardinal Health’s
cost of the Raw Material and Client’s mandated supplier’s cost to the Unit
Price of the Product. Client will be responsible for all costs associated with
qualification of a new supplier of a Raw Material not previously qualified by
Cardinal Health. Unless a particular Raw Material can be replaced with the same
raw material from another supplier, Cardinal Health shall not be liable for any
delay in delivery of Product if (A) Cardinal Health is unable to obtain,
in a timely manner, a particular Raw Material necessary to Process the Product,
and (B) Cardinal Health placed orders for such Raw Materials promptly following
receipt of Client’s Firm Commitment.

 

3.3                                 Artwork
and Packaging. If applicable, Client shall provide or approve, prior to the
procurement of applicable components, all artwork, advertising and packaging
information necessary to Process the Product. Such artwork, advertising and
packaging information is and shall remain the exclusive property of Client, and
Client shall be solely responsible for the content thereof. Such artwork,
advertising and packaging information or any reproduction thereof may not
be used by Cardinal Health following the termination of this Agreement, or
during the Term of this Agreement in any manner other than solely for the
purpose of performing its obligations hereunder.

 

4

 

3.4                                 Reimbursement
for Materials. In the event of (A) a Specification change for any
reason, (B) termination or expiration of this Agreement; or (C) obsolescence
of any Raw Material, Client shall bear the cost of any unused Raw Materials,
provided that Cardinal Health purchased such Raw Materials in quantities
consistent with Client’s most recent Firm Commitment and the supplier’s minimum
purchase obligations.

 

ARTICLE 4

MINIMUM COMMITMENT, PURCHASE ORDERS & FORECASTS

 

4.1                                 Minimum
Requirement. During each Contract Year, the parties acknowledge that Client
is not obligated to buy any specific amount of Product under this Agreement,
except for the quantities that Client shall actually order through such binding
purchase orders, as specified in Section 4.3 below, and in minimum order
quantities as specified in Exhibit B.

 

4.2                                 Forecast.
On or prior to the tenth (10th) calendar day of each month, beginning at least
four months prior to the anticipated Commencement Date, Client shall furnish to
Cardinal Health a written commercially reasonable rolling forecast of Product
quantities for the twelve months following the month in which such forecast is
submitted, that reflects both (a) quantities subject to Purchase Orders
pursuant to this Agreement and (b) additional quantities of Product that
Client reasonably expects to order from Cardinal Health during such period (“Rolling
Forecast”). The first three (3) months of each Rolling Forecast shall
constitute a firm order for Product and binding commitment to submit Purchase
Orders for the quantities of Product specified therein (“Firm Commitment”) and
the following nine (9) months of the Rolling Forecast shall be
non-binding, good faith estimates for planning purposes only and shall not
constitute binding commitments by Client to purchase Product.

 

4.3                                 Purchase
Orders. At least 90 days prior to the desired delivery date, Client shall
submit a firm, binding, non-cancelable purchase order for that latest month’s
Firm Commitment portion of the Rolling Forecast, (“Purchase Order”) specifying
requested delivery dates for each Batch. In the event of a conflict between the
terms of any Purchase Order and this Agreement, this Agreement   shall  
control. Notwithstanding  
the   foregoing,   Cardinal  
Health   shall   use commercially reasonable efforts to
supply Client with quantities of Product which are in excess of the quantities
specified in the Firm Commitment, subject to Cardinal Health’s other supply
commitments and manufacturing and equipment capacity.

 

4.4                                 Cardinal
Health’s Cancellation of Purchase Orders. Notwithstanding the terms and
conditions set forth in Section 4.5 below, Cardinal Health reserves the
right to cancel all, or any part of, a Purchase Order upon written notice
to Client, and Cardinal Health shall have no further obligations or liability
with respect to such Purchase Order if Client refuses or fails to make
scheduled deliveries of the API.

 

4.5                                 Client’s
Modification or Cancellation.

 

A.                                   Client
may modify the delivery date, Specifications or quantity of Product in such
Purchase Order only by submitting a written change order (“Change Order”) to
Cardinal Health at least thirty (30) business days in advance of the earliest
scheduled Processing Date for the Processing covered by the change order. Such
change order shall be effective and binding

 

5

 

against Cardinal Health only upon the written approval
of Cardinal Health, and notwithstanding the foregoing, Client shall remain
responsible for the Firm Commitment portion of the Rolling Forecast.

 

B.                                     Notwithstanding
any amounts due to Cardinal Health under section 4.4 or Section 4.1,
if Client fails to place Purchase Orders sufficient to satisfy the Firm
Commitment, Client shall, within thirty (30) days of receipt of invoice, pay to
Cardinal Health the Unit Price for all Units that would have been Processed if
Client has placed Purchase Orders sufficient to satisfy the Firm Commitment.

 

4.6                                 Unplanned
Delay or Elimination of Processing. Cardinal Health shall use commercially
reasonable efforts to meet the Purchase Orders, subject to the terms and
conditions of this Agreement. Cardinal Health shall provide Client with as much
advance notice as possible (and will use its best efforts to provide at least
fifteen (15) days advance notice where possible) if Cardinal Health determines
that any Processing will be delayed or eliminated for any reason.

 

4.7                                 Inspection
of Processing. Client may base up to two (2) representatives at
the Facilities to observe the Processing provided that Client provide Cardinal
Health at least ten (10) days advance written notice of the attendance of
such Client representatives. Client shall indemnify and hold harmless Cardinal
Health for any action or activity of such representatives while on Cardinal
Health’s premises.

 

ARTICLE 5

TESTING; SAMPLES; RELEASE

 

5.1                                 Discrepant
Test Results. In the event of a disagreement between the parties regarding
whether the Product meets the warranty in Section 10.1, the parties shall
cause a mutually agreeable independent third party to review records, test data
and to perform comparative tests and/or analyses on samples of the alleged
defective Product. The independent party’s results shall be final and binding. Unless
otherwise agreed to by the parties in writing, the costs associated with such
testing and review shall be borne by the party found responsible.

 

5.2                                 Replacement
of Defective Product. In accordance with the terms set forth in this
Agreement, Cardinal Health shall replace, as soon as practicable and at its
sole expense, all Product that does not comply with the warranty in Section 10.1
(“Defective Product”) or credit any payments made by Client for such Batch of
Defective Product. THE OBLIGATION OF CARDINAL HEALTH TO (A) REPLACE
DEFECTIVE PRODUCT IN ACCORDANCE WITH THE SPECIFICATIONS OR CREDIT PAYMENTS MADE
BY CLIENT FOR DEFECTIVE PRODUCT AND (B) REIMBURSE CLIENT FOR API LOST IN
THE DEFECTIVE BATCH, SUBJECT TO THE LIMITATIONS IN SECTION 16.1 SHALL BE
CLIENT’S SOLE AND EXCLUSIVE REMEDY UNDER THIS ARTICLE FOR DEFECTIVE
PRODUCT AND IS IN LIEU OF ANY OTHER WARRANTY, EXPRESS OR IMPLIED.

 

5.3                                 Supply
of Material for Defective Product. In the event Cardinal Health reprocesses
Product pursuant to Section 5.2, above, Client shall supply, at its sole
cost, Cardinal Health with sufficient
quantities of the Drug Substance in order for Cardinal  Health 
complete  such reprocessing.

 

6

 

ARTICLE 6

DELIVERY

 

6.1                                 Delivery.
Cardinal Health shall tender the Product for delivery, F.O.B. the Facility once
Cardinal Health’s Certificate of Analysis for such Batch designates the Batch
meets the Specifications. Client shall be responsible for all costs and risk of
loss associated with shipment of the Product. Client shall qualify at least
three (3) carriers to ship the Product and then designate the priority of
such qualified carriers to Cardinal Health.

 

6.2                                 Failure
to Take Delivery. If Client fails to take delivery on any scheduled
delivery date, Client shall be invoiced on the first day of each month for the
stored Product and reasonable administration and storage costs. For each such
batch of undelivered Product, Client agrees that:  (A) Client has made a fixed commitment
to purchase such Product, (B) risk of ownership for such Product passes to
Client, (C) such Product shall be on a bill and hold basis for legitimate
business purposes, (D) if no delivery date is determined at the time of
billing, Cardinal Health shall have the right to ship the Product to Client
within four months after billing, and (E) Client will be responsible for
any decrease in market value of such Product that relates to factors and
circumstances outside of Cardinal Health’s control. Within five (5) days
following a written request from Cardinal Health, Client shall provide Cardinal
Health with a letter confirming items (A) through (E) of this Section for
each Batch of undelivered Product.

 

ARTICLE 7

PRICING AND PAYMENT

 

7.1                                 Unit
Pricing. Client shall pay to Cardinal Health the unit pricing set forth on Exhibit B
(“Unit Pricing”) for all Product. In the event Client requests services other
than Processing Product, Cardinal Health shall provide a written quote of the
fee for such additional services and Client shall advise Cardinal Health
whether it wishes to have such additional services performed by Cardinal
Health.

 

7.2                                 Price
Increase. The Unit Pricing shall be adjusted on an annual basis, effective
on each January 1st, upon at least sixty (60) days written
notice from Cardinal Health to Client.

 

7.3                                 Taxes;
Duty. All taxes, duties and other amounts assessed on the Raw Materials,
API or the Product prior to or upon sale to Client are the responsibility of
Client, and Client shall reimburse Cardinal Health for any such taxes, duties
or other expenses paid by Cardinal Health.

 

7.4                                 Product
Approval. Notwithstanding the terms set forth above, Client shall use its
best efforts to expedite and obtain all regulatory approvals necessary for
Cardinal Health to commence production at the Facility (“Regulatory Approvals”).

 

7.5                                 Payment
Terms. Cardinal Health shall invoice Client for all Product as shipped in
accordance with Section 6.1, and payment for such invoices shall be due
within thirty (30) days after the date
of such invoice. In the event payment is not received by Cardinal Health on or
before the thirtieth (30th) day after the date of the invoice, then
such unpaid amount shall accrue interest at the rate of one percent (1%) per
month until paid in full.

 

7

 

ARTICLE 8

CHANGES TO SPECIFICATIONS

 

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

 

ARTICLE 9

RECORDS; REGULATORY MATTERS

 

9.1                                 Batch
Records and Data. Within thirty (30) days following the completion of
Processing of each batch, Cardinal Health shall provide Client with properly
completed copies of Batch records prepared in accordance with the
Specifications; provided, however, that if testing reveals an
out-of-Specification result, Cardinal Health shall provide such Batch records
within 10 days following resolution of the out-of Specification result.

 

9.2                                 Recordkeeping.
Cardinal Health shall maintain true and accurate books, records, test and
laboratory data, reports and all other information relating to Processing under
this Agreement, including all information required to be maintained by all
Applicable Laws. Such information shall be maintained in forms, notebooks and
records for a period of at least two (2) years from the relevant finished
Product expiration date or longer if required under Applicable Laws.

 

9.3                                 Regulatory
Compliance. Client shall be solely responsible for all permits and licenses
required by any regulatory agency with respect to the Product and the
Processing under this Agreement, including any product licenses, applications
and amendments in connection therewith. Cardinal Health will be responsible to
maintain all permits and licenses required by any Regulatory Authority with
respect to the Facility. During the Term, Cardinal Health will assist Client
with all regulatory matters relating to Processing under this Agreement, at
Client’s request and at Client’s expense. Each party intends and commits to
cooperate to satisfy all Applicable Laws relating to Processing under this
Agreement.

 

9.4                                 Governmental
Inspections and Requests. Cardinal Health shall immediately advise Client
if an authorized agent of any Regulatory Authority visits the Facility
concerning the Processing of the Product. Cardinal Health shall furnish to
Client a copy of the report by such Regulatory Authority, if any, within ten (10) days
of Cardinal Health’s receipt of such report. Further, upon receipt of a
Regulatory Authority request to inspect the Facilities or audit

 

8

 

Cardinal Health’s books and records with respect to
Processing under this Agreement, Cardinal Health shall immediately notify
Client, and shall provide Client with a copy of any written document received
from such Regulatory Authority.

 

9.5                                 Recall.
In the event Cardinal Health believes a recall, field alert, Product withdrawal
or field correction may be necessary with respect to any Product provided
under this Agreement, Cardinal Health shall immediately notify Client in
writing. Cardinal Health will not act to initiate a recall, field alert,
Product withdrawal or field correction without the express prior written
approval of Client, unless otherwise required by Applicable Laws. In the event
Client believes a recall, field alert, Product withdrawal or field correction may be
necessary with respect to any Product provided under this Agreement, Client
shall immediately notify Cardinal Health in writing and Cardinal Health shall
provide all necessary cooperation and assistance to Client. The cost of any
recall, field alert, Product withdrawal or field correction shall be borne by
Client unless such recall, field alert, Product withdrawal or field correction
is caused solely by Cardinal Health’s breach of its obligations under this
Agreement or Applicable Laws or its negligence or willful misconduct, then such
cost shall be borne by Cardinal Health. For purposes hereof, such cost shall be
limited to reasonable, actual and documented administrative costs incurred by
Client for such recall, withdrawal or correction, and replacement of the
Defective Product to be recalled, in accordance with Article 5.

 

9.6                                 Quality
Agreements. Within six (6) months following the execution of this
Agreement, the parties shall execute a Quality Agreement in substantially the form attached
to this Agreement as Exhibit C. The Quality Agreement shall in no
way determine liability or financial responsibility of the parties for the
responsibilities set forth therein. In the event of a conflict between the
terms of this Agreement and the Quality Agreement, this Agreement shall
control.

 

ARTICLE 10

REPRESENTATIONS AND WARRANTIES

 

10.1                           Cardinal
Health. Cardinal Health represents and warrants to Client that at the time
of delivery of the Product as provided in Section 6.1, such Product will
conform to and will have been Processed in conformance with the Product
Specifications and Applicable Laws. THE LIMITED WARRANTY SET FORTH IN THIS SECTION 10.1
IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY
OF MERCHANTABILITY, WARRANTY OF NON-INFRINGEMENT AND ANY WARRANTY OF FITNESS
FOR A PARTICULAR PURPOSE. EXCEPT FOR THE WARRANTY EXPRESSED IN THIS SECTION 10.1,
CARDINAL HEALTH MAKES NO OTHER WARRANTY, EITHER EXPRESS OR IMPLIED, WITH
RESPECT TO THE PROCESSING OR THE PRODUCT.

 

10.2                           Client.
Client represents, warrants and covenants to Cardinal Health that:

 

A.                                   The
Client-Supplied Materials will comply with all applicable Specifications, will
have been produced in compliance with the Applicable Laws, and will be provided
in accordance with the terms and conditions of this Agreement and the
applicable Project Plan;

 

9

 

B.                                     It
has all necessary authority and all right, title and interest in and to any
Intellectual Property related to each Product that is the subject of this
Agreement and any Project Plan;

 

C.                                     No
specific safe handling instructions are applicable to the Product or to and any
Client-Supplied Materials, except as disclosed to Cardinal Health in writing by
the Client in sufficient time for review and training by Cardinal Health prior
to delivery;

 

D.                                    All
Product delivered to Client by Cardinal Health will be held, used and/or
disposed of by the Client in accordance with all applicable laws, rules and
regulations;

 

E.                                      Client
will comply with all laws, rules, regulations and guidelines applicable to
Client’s performance under this Agreement and its use of any materials or
Products provided by Cardinal Health under this Agreement or any Project Plan;
and

 

F.                                      Client
will not release any Batch of Product if the required Certificates of Analysis
indicate that the Product does not comply with the Specifications;

 

G.                                     The
content of all artwork provided to Cardinal Health complies with all Applicable
Laws;

 

H.                                    Client
has all necessary authority and right, title and interest in and to any
copyrights, trademarks, trade secrets, patents, inventions and developments
related to the Product, the manufacture thereof, and any Product artwork; and

 

I.                                         The
work to be performed by Cardinal Health under this Agreement will not violate
or infringe upon any trademark, tradename, copyright, patent or other rights
held by any person or entity.

 

10.3                           Mutual.
Each party hereby represents and warrants to the other party that:

 

A.                                   Such
party (1) is duly organized, validly existing and in good standing under
the laws of the state in which it is organized, (2) has the power and
authority and the legal right to own and operate its property and assets, and
to carry on its business as it is now being conducted, and (3) is in compliance
with all requirements of applicable law, except to the extent that any
noncompliance would not materially adversely affect such party’s ability to perform its
obligations under the Agreement;

 

B.                                     Such
party (1) has the power and authority and the legal right to enter into
this Agreement and to perform its obligations hereunder and thereunder and
(2) has taken all necessary action on its part to authorize the
execution and delivery of the Agreement and the performance of its obligations
hereunder;

 

C.                                     This
Agreement has been duly executed and delivered on behalf of such party, and
constitutes a legal, valid, binding obligation, enforceable against such party
in accordance with its terms;

 

10

 

D.                                    All
necessary consents, approvals and authorizations of all agencies and other
persons required to be obtained by such party in connection with the Agreement
have been obtained; and

 

E.                                      The
execution and delivery of this Agreement and the performance of such party’s
obligations hereunder (1) do not conflict with or violate any requirement
of applicable laws or regulations or any material contractual obligation of
such party and (2) do not materially conflict with, or constitute a
material default or require any consent under, any material contractual
obligation of such party.

 

ARTICLE 11

CONFIDENTIAL INFORMATION

 

11.1                           Mutual
Obligation. Cardinal Health and Client agree that they will not disclose
the other party’s Confidential Information (defined below) to any third party
without the prior written consent of the other party except as required by law
or regulation; provided, however, that prior to making any such legally
required disclosure, the party making such disclosure shall give the other
party as much prior notice of the requirement for and contents of such
disclosure as is practicable under the circumstances. Notwithstanding the
foregoing, each party may disclose the other party’s Confidential
Information to any of its affiliates which (A) need to know such Confidential
Information for the purpose of performing under this Agreement, (B) are
advised of the contents of this Section, and (C) agree to be bound by the
terms of this Section, provided, however, that only an affiliate to which such
Confidential Information is actually disclosed and received will be bound by
the terms of this Section.

 

11.2                           Definition.
As used in this agreement, the term “Confidential Information” includes all
such information furnished by Cardinal Health or Client, or any of their respective
representatives or affiliates, to the other or its representatives or
affiliates, whether furnished before, on or after the date of this agreement
and furnished in any form, including but not limited to written, verbal,
visual, electronic or in any other media or manner. Confidential Information
includes all proprietary technologies, know-how, trade secrets, discoveries,
inventions and any other intellectual property (whether or not patented),
analyses, compilations, business or technical information and other materials
prepared by either party, or any of their respective representatives,
containing or based in whole or in part on any such information furnished
by the other party or its representatives. Confidential Information also
includes the existence of this agreement and its terms.

 

11.3                           Exclusions.
Confidential Information does not include, however, information concerning
Cardinal Health or Company which (A) is or becomes generally available to
the public or within the industry to which such information relates other than
as a result of a breach of this agreement, or (B) is already known by the
receiving party at the time of disclosure as evidenced by the receiving party’s written records, or (C) becomes available
to the receiving party on a non-confidential basis from a source that is
entitled to disclose it on a non-confidential basis, or (D) was or is
independently developed by or for the receiving party without reference to the
Confidential Information, as evidenced by the receiving party’s written
records.

 

11

 

11.4                           Survival.
The obligations of this Article 11 will terminate five (5) years from
the expiration of this Agreement.

 

11.5                           Proprietary
Information. The party receiving Proprietary Information will obtain no
right of any kind or license under any patent application or patent by reason
of this Agreement. All Proprietary Information will remain the sole property of
the party disclosing such information or data.

 

11.6                           Return
of Confidential Information. Upon termination of this Agreement, the party
to which Proprietary Information has been disclosed will, upon request,
promptly return within thirty (30) days all such information, including any
copies thereof, and cease its use or, at the request of the party transmitting
such Proprietary Information, will promptly destroy the same and certify such
destruction to the transmitting party; except for a single copy thereof which may be
retained for the sole purpose of determining the scope of the obligations
incurred under this Agreement.

 

ARTICLE 12

INTELLECTUAL PROPERTY

 

12.1                           Improvements
etc. to Product. All improvements, developments, derivatives or
modifications to the Product, all results from any process development or
validation concerning Product or any stability studies of Product, and all
rights to any methods concerning Product which are developed or validated under
this Agreement, shall in every case be owned exclusively by Client.

 

12.2                           Improvements
etc. to Cardinal Health Materials. Subject to Section 12.1, all
Cardinal Health Materials, and all improvements, developments, derivatives or
modifications to the Cardinal Health Materials, shall be owned exclusively by
Cardinal Health.

 

12.3                           Improvements
etc. to Client Materials. Subject to Sections 12.1 and 12.2, all Client
Materials, and all improvements, developments, derivatives or modifications to
the Client Materials, shall be owned exclusively by Client, provided, however,
that Client hereby grants to Cardinal Health a non-exclusive, royalty-free
license to use any and all right, title, and interest in the Client Materials
as may be necessary for Cardinal Health to perform its obligations
under this Agreement.

 

12.4                           Further
Assurance. In relation to intellectual property arising under this
Agreement, each party agrees to assist the other party, at the other party’s
request and expense, in preparing and prosecuting patent applications and
patent extensions or in obtaining or maintaining other forms of protection on
any such intellectual property which the other party owns pursuant to this Article 12.
Each party warrants that all persons (including without limitation its
employees and sub-contractors)
performing activities in relation to the Project will be engaged on terms
consistent with the provisions of this Article 12.

 

12.5                           Definition
of “Cardinal Health Materials”. For purposes hereof, “Cardinal Health
Materials” means all Cardinal Health proprietary information, intellectual
property, and developments, including without limitation, all patents, patent
applications, know-how, inventions, designs, concepts, improvements, technical
information, manuals, instructions or

 

12

 

specifications, which are owned, licensed or used by
Cardinal Health (except where licensed by, or originating from, Client or its
Affiliates) in developing, formulating, manufacturing, filling, processing or
packaging of liquid solutions or pharmaceuticals and the packaging equipment,
processes or methods of packaging, or any improvements to any of the foregoing,
including any container, pouch, vial, ampoule or other form of liquid
container developed by Cardinal Health.

 

12.6                           Definition
of “Client Materials”. For purposes hereof, “Client Materials” means all
proprietary information, intellectual property, and developments, including
without limitation, all patents, patent applications, know-how, inventions,
designs, concepts, improvements, technical information, manuals, instructions
or specifications, which are owned, licensed or used by the Client (except
where licensed by, or originating from Cardinal Health or its Affiliates
relating to the Product or the active ingredient or formulation therof).

 

ARTICLE 13

INDEMNIFICATION

 

13.1                           Indemnification
by Cardinal Health. Cardinal Health shall indemnify and hold harmless
Client, its Affiliates, directors, officers, employees and agents from and
against any suits, claims, losses, demands, liabilities, damages, costs and
expenses (including costs, reasonable attorney’s fees and reasonable
investigative costs) in connection with any suit, demand or action by any third
party arising out of or resulting from any negligence, willful misconduct or
breach of this Agreement by Cardinal Health, except to the extent that any of
the foregoing arises out of or results from the breach of this Agreement by
Client or the negligence or willful misconduct of Client.

 

13.2                           Indemnification
by Client. Client shall indemnify and hold harmless Cardinal Health, its
Affiliates, directors, officers employees and agents from and against all
suits, claims, losses, demands, liabilities, damages, costs and expenses
(including costs, reasonable attorney’s fees and reasonable investigative
costs) in connection with any suit, demand or action by any third party arising
out of or resulting from (A) any breach of its representations, warranties
or obligations set forth in this Agreement; (B) any manufacture, sale,
promotion, distribution or use of or exposure to the Product, including,
without limitation, product liability or strict liability; (C) Client’s
exercise of control over the Processing under this Agreement, to the extent
that Client’s instructions or directions violate applicable law or regulation; (D) any
actual or alleged infringement or violation of any patent, trade secret,
copyright, trademark or other proprietary rights provided by Client; or (E) any
negligence or willful misconduct by Client, except to the extent that any of
the foregoing arises out of or results from the breach by Cardinal Health of this
Agreement, or the negligence or willful misconduct of Cardinal Health.

 

13.3                           Indemnification
Procedures. All indemnification obligations in this Agreement are
conditioned upon the party seeking indemnification promptly notifying the
indemnifying party of any claim or liability of which the party seeking
indemnification becomes aware (including a copy of any related complaint,
summons, notice or other instrument), cooperating with the indemnifying party
in the defense of any such claim or liability (at the indemnifying party’s
expense), and not compromising or settling any claim or liability without prior
written consent of the indemnifying party.

 

13

 

ARTICLE 14

INSURANCE

 

14.1                           Cardinal
Health. Cardinal Health shall, at its own cost and expense, obtain and
maintain in full force and effect the following insurance during the term of
this Agreement:  (A) Commercial
General Liability insurance with per-occurrence and general aggregate limits of
not less than $1,000,000; (B) Products and Completed Operations Liability
Insurance with per- occurrence and general aggregate limits of not less than
$5,000,000; (C) Workers’ Compensation and Employer’s Liability Insurance
with statutory limits for Workers’ Compensation and Employer’s Liability
insurance limits of not less than $1,000,000; (D) Professional Services
Errors & Omissions Liability Insurance with per claim and aggregate
limits of not less than $1,000,000 covering sums that Cardinal Health becomes
legally obligated to pay as damages resulting from claims made by Client for
errors or omissions committed in the conduct of the services outlined in the
Agreements. In lieu of insurance, Cardinal Health may self-insure any or a
portion of the above required insurance. In the event that any of the required
policies of insurance are written on a claims made basis, then such policies
shall be maintained during the entire term of this Agreement and for a period
of not less than three (3) years following the termination or expiration
of this Agreement. Cardinal Health shall obtain a waiver from any insurance
carrier with whom Cardinal Health carries Workers’ Compensation insurance
releasing its subrogation rights against Client. Client shall be named as an
additional insured under the Commercial General Liability and Products and
Completed Operations Liability insurance policies as respects the manufacturing
services outlined in this Agreement. Cardinal Health shall furnish certificates
of insurance for all of the above noted policies and required additional
insured status to Client as soon as practicable after the Effective Date of the
Agreement and upon renewal of any such policies. Each insurance policy that is
required under this Section shall be obtained from an insurance carrier
with an A.M. Best rating of at least A- VII.

 

14.2                           Client
Insurance. Client shall, at its own cost and expense, obtain and maintain
in full force and effect the following insurance during the term of this
Agreement:  (A) Products and
Completed Operations Liability Insurance with per-occurrence and general
aggregate limits of not less than $10,000,000; (B) Workers’ Compensation
and Employer’s Liability Insurance with statutory limits for Workers’
Compensation and Employer’s Liability insurance limits of not less than
$1,000,000; (C) All Risk Property Insurance, including transit coverage,
in an amount equal to full replacement value covering Client’s property while
it is at Cardinal Health’s facility or in transit to or from Cardinal Health’s
facility. In the event that any of the required policies of insurance are
written on a claims made basis, then such policies shall be maintained during
the entire term of this Agreement and for a period of not less than three (3) years
following the termination or expiration of this Agreement. Client shall obtain
a waiver from any insurance carrier
with whom Client carries Workers’ Compensation insurance releasing its
subrogation rights against Cardinal Health. Client shall obtain a waiver from
any insurance carrier with whom Client carries Property Insurance releasing its
subrogation rights against Cardinal Health. Client shall not seek reimbursement
for any property claim, or portion thereof, that is not fully recovered from
Client’s Property Insurance policy. Cardinal Health and its Subsidiaries and
Parent Corporation shall be named as additional insureds under the Products and
Completed Operations Liability insurance policies as respects the products and
completed operations outlined in this Agreement. Client shall furnish
certificates of insurance for all of the above noted policies and required
additional insured status to Cardinal Health as soon as

 

14

 

practicable after the
Effective Date of the Agreement and upon renewal of any such policies. Each
insurance policy that is required under this Section shall be obtained
from an insurance carrier with an A.M. Best rating of at least A- VII.

 

ARTICLE 15

TERM AND TERMINATION

 

15.1                           Term.
This Agreement shall commence on the Effective Date and shall continue for a
period of four (4) Contract Years, unless earlier terminated under Section 15.2
below (the “Term”).

 

15.2                           Termination
by Either Party.

 

A.                                   Material
Breach. Either party may terminate this Agreement effective upon sixty
(60) days prior written notice to the other party, if the other party commits a
material breach of this Agreement and fails to cure such breach by the end of
such sixty (60) day period; provided, however, that failure to pay amounts due
under this Agreement within fifteen (15) days after such payments are due (as
set forth in Section 7.5) shall constitute cause for immediate termination
of this Agreement, or at Cardinal Health’s discretion, Cardinal Health shall be
relieved of any further obligation to perform under this Agreement until
all outstanding payments are brought current.

 

B.                                     Bankruptcy.
Either party may terminate this Agreement effective upon written notice to
the other party, if the other party becomes insolvent or admits in writing its
inability to pay its debts as they become due, files a petition for bankruptcy,
makes an assignment for the benefit of its creditors or has a receiver, trustee
or other court officer appointed for its properties or assets.

 

15.3                           Effect
of Termination. Expiration or termination of this Agreement shall be
without prejudice to any rights or obligations that accrued to the benefit of
either party prior to such expiration or termination. The rights and
obligations of the parties shall continue under Sections 5, 7, 9, 10, 11, 12,
13, 16, 17 and 18, and Sections 3.4, 6.2, 15.3, notwithstanding expiration or
termination of this Agreement.

 

ARTICLE 16

LIMITATIONS OF LIABILITY

 

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

 

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

 

15

 

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

 

ARTICLE 17

NOTICE

 

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

 

	
  To Client:

  	
   

  	
  CollaGenex
  Pharmaceuticals, Inc.

  41 University Drive, Suite 200

  Newtown, PA 18940

  Attn:

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  To Cardinal
  Health:

  	
   

  	
  Cardinal Health
  PTS, LLC

  14 Schoolhouse Road

  Somerset, NJ 08873

  Attn:  Vice President, Business
  Development, Solid Oral Pharmaceuticals

  Facsimile:  (732) 537-6493

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Cardinal Health, Inc.

  7000 Cardinal Place

  Dublin, Ohio 43017

  Attn:  Associate General Counsel,

  Pharmaceutical Technologies and Services

  Facsimile:  (614) 757-5051

  

 

ARTICLE 18

MISCELLANEOUS

 

18.1                           Entire
Agreement; Amendments. This Agreement is the entire understanding between
the parties and supersedes any contracts, agreements or understanding (oral or
written) of the parties with respect to the subject matter hereof. No term of
this Agreement may be amended except upon written agreement of both
parties, unless otherwise provided in this Agreement.

 

16

 

18.2                           Captions.
The captions in this Agreement are for convenience only and are not to be
interpreted or construed as a substantive part of this Agreement.

 

18.3                           Further
Assurances. The parties agree to execute, acknowledge and deliver such
further instruments and to take all such other incidental acts as may be
reasonably necessary or appropriate to carry out the purpose and intent of this
Agreement.

 

18.4                           No
Waiver. Failure by either party to insist upon strict compliance with any
term of this Agreement in any one or more instances will not be deemed to be a
waiver of its rights to insist upon such strict compliance with respect to any
subsequent failure.

 

18.5                           Severability.
If any term of this Agreement is declared invalid or unenforceable by a court
or other body of competent jurisdiction, the remaining terms of this Agreement
will continue in full force and effect.

 

18.6                           Independent
Contractors. The relationship of the parties is that of independent
contractors, and neither party will incur any debts or make any commitments for
the other party except to the extent expressly provided in this Agreement. Nothing
in this Agreement is intended to create or will be construed as creating
between the parties the relationship of joint ventures, co-partners,
employer/employee or principal and agent.

 

18.7                           Successors
and Assigns. This Agreement will be binding upon and inure to the benefit
of the parties, their successors and permitted assigns. Neither party may assign
this Agreement, in whole or in part, without the prior written consent of the
other party, except that either party may, without the other party’s consent,
assign this Agreement to an affiliate or to a successor to substantially all of
the business or assets of the assigning company.

 

18.8                           Governing
Law. This Agreement shall be governed by and construed under the laws of
the State of New Jersey, excluding its conflicts of law provisions.

 

18.9                           Alternative
Dispute Resolution. If a dispute, controversy or disagreement (“Dispute”)
arises between the parties in connection with this Agreement, then the Dispute
shall be presented to the respective presidents or senior executives of
Cardinal Health and Client for their consideration and resolution. If such
parties cannot reach a resolution of the Dispute, then such Dispute shall be
resolved by binding alternative dispute resolution in accordance with the then
existing commercial arbitration rules of The CPR Institute for Dispute
Resolution (“CPR”), 366 Madison Avenue, New York, NY 10017. Arbitration shall
be conducted in the jurisdiction of the defendant party.

 

18.10                     Prevailing
Party. In any dispute resolution proceeding between the parties in
connection with this Agreement, the prevailing party will be entitled to its
reasonable attorney’s fees and costs in such proceeding.

 

18.11                     Counterparts.
This Agreement may be executed in one or more counterparts, each of which
will be deemed an original but all of which together will constitute one and
the same instrument.

 

17

 

18.12                     Setoff.
Without limiting Cardinal Health’s rights under law or in equity, Cardinal
Health and its affiliates, parent or related entities, collectively or
individually, may exercise a right of set-off against any and all amounts
due to Cardinal Health from Client. For purposes of this Section, Cardinal
Health, its affiliates, parent or related entities shall be deemed to be a
single creditor.

 

18.13                     Force
Majeure. Neither party will be liable for any failure to perform or
for delay in performance resulting from any cause beyond its reasonable
control, including without limitation, acts of God, fires, floods, or weather;
strikes or lockouts, factory shutdowns, embargoes, wars, hostilities or riots,
shortages in transportation; provided, however, that if Cardinal Health cannot
complete an order within ninety (90) days due to any such cause, Client may terminate
this Agreement without liability to Cardinal Health.

 

18.14                     Publicity.
Neither party will make any press release or other public disclosure regarding
this Agreement or the transactions contemplated hereby without the other party’s
express prior written consent, except as required under applicable law or by
any governmental agency, in which case the party required to make the press
release or public disclosure shall use commercially reasonable efforts to
obtain the approval of the other party as to the form, nature and extent of the
press release or public disclosure prior to issuing the press release or making
the public disclosure.

 

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

 

	
  CARDINAL HEALTH PTS, LLC

  	
   

  	
  COLLAGENEX PHARMACEUTICALS INC.

  
	
   

  	
   

  	
   

  
	
  By:

  	
        /s/ David Wood

  	
   

  	
  By:

  	
        /s/ Colin Stewart

  
	
  Name:

  	
   David Wood

  	
   

  	
  Name:

  	
   Colin Stewart

  
	
  Its:

  	
        VP/GM Controlled Release

  	
   

  	
  Its:

  	
        President and CEO

  
	
   

  	
        2-21-06

  	
   

  	
   

  	
        3-1-06

  
								

 

18

 

 EXHIBIT A

 

SPECIFICATIONS

 

19

 

Specification
#:  TBD

Effective Date:  TBD 

Revision #:  01 

Date Revised:  11/15/05

 

ORACEA Controlled Release 40 mg Capsules SPECIFICATIONS:

US Release
Specifications

 

	
  A.

  	
   

  	
  Test

  	
   

  	
  Specifications

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Appearance: Visual Inspection of 10
  capsules

  	
   

  	
  [**]

  
	
   

  	
   

  	
  2.

  	
  Average Content – Doxycycline:

  	
   

  	
  [**]

  
	
   

  	
   

  	
  3.

  	
  Non-parent peaks:

  	
   

  	
  [**]

  
	
   

  	
   

  	
  4.

  	
  Identification (HPLC):

  	
   

  	
  [**]

  
	
   

  	
   

  	
  5.

  	
  Identification (TLC):

  	
   

  	
  [**]

  
	
   

  	
   

  	
  6.

  	
  Uniformity of Dosage Units

  	
   

  	
  [**]

  
	
   

  	
   

  	
  7.

  	
  Loss on Drying:

  USP <731>
1-2g, 105°C, 4 (±l) hours

  	
   

  	
  [**]

  

 

	
   

  	
  8.

  	
  Dissolution:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Time
  (hours)

  	
   

  	
  Percent Dissolved

  
	
   

  	
   

  	
   

  	
   

  	
  2.0

  	
   

  	
  [**]% [**]

  
	
   

  	
   

  	
   

  	
   

  	
  4.0

  	
   

  	
  [**]% [**]

  

 

20

 

Specification
#:  TBD 

Effective Date:  TBD 

Revision #:  01 

Date Revised:  11/15/05

 

B.                                    Sampling
Plan:

 

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

 

C.                                    References:

 

1.                                       Current USP/NF

 

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

 

21

 

Specification
#:  TBD 

Effective Date:  TBD 

Revision #:  01 

Date Revised:  11/15/05

 

ORACEA Controlled Release 40 mg Capsules
SPECIFICATIONS:  

European Union
Release Specifications

 

	
  B.

  	
   

  	
  Test

  	
   

  	
  Specifications

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Appearance: Visual Inspection of 10
  capsules

  	
   

  	
  [**]

  
	
   

  	
   

  	
  2.

  	
  Average Content – Doxycycline:

  	
   

  	
  [**]

  
	
   

  	
   

  	
  3.

  	
  Non-parent peaks:

  	
   

  	
  [**]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
  Identification (HPLC):

  	
   

  	
  [**]

  
	
   

  	
   

  	
  5.

  	
  Identification (TLC):

  	
   

  	
  [**]

  
	
   

  	
   

  	
  6.

  	
  Uniformity of Dosage Units

  	
   

  	
  [**]

  
	
   

  	
   

  	
  7.

  	
  Loss on Drying:

  USP <731>

  1-2g, 105°C, 4 (±l) hours

  	
   

  	
  [**]

  

 

	
   

  	
  8.

  	
  Dissolution:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Time
  (hours)

  	
   

  	
  Percent Dissolved

  
	
   

  	
   

  	
   

  	
   

  	
  2.0

  	
   

  	
  [**]% [**]

  
	
   

  	
   

  	
   

  	
   

  	
  4.0

  	
   

  	
  NLT [**]% [**]

  

 

22

 

Specification
#:  TBD 

Effective Date:  TBD 

Revision #:  01 Date 

Revised:  11/15/05

 

B.                                    Sampling
Plan:

 

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

 

C.                                    References:

 

1.                                       Current USP/NF, European Pharmacopoeia

 

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

 

23

 

Specification
#:  TBD 

Effective Date:  TBD 

Revision #:  01 

Date Revised:  11/15/05

 

ORACEA SPECIFICATIONS:

 

(Doxycycline Immediate
Release Pellets)

 

	
   

  	
   

  	
  Test

  	
   

  	
  Specifications

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A.

  	
   

  	
  Immediate Release Pellets:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Appearance: Visual Inspection 

  	
   

  	
  [**]

  
	
   

  	
   

  	
  2.

  	
  Average Content – Doxycycline:

  	
   

  	
  [**]

  
	
   

  	
   

  	
  3.

  	
  Identification:

  	
   

  	
  [**]

  
	
   

  	
   

  	
  4.

  	
  Loss on Drying:

  USP <731>

  1-2g, 105°C, 4 (±l) hours

  	
   

  	
  [**]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.

  	
  Dissolution:

  	
   

  	
   

  	
  Time:  30 minutes:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  % Dissolved:  [**]%

  

 

24

 

Specification
#:  TBD 

Effective Date:  TBD 

Revision*:  01 

Date Revised:  11/15/05

 

B.                                    Sampling
Plan:

 

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

 

C.                                    References:

 

1.                                       Current USP/NF, European Pharmacopoeia

 

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

 

25

 

Specification
#:  TBD 

Effective Date:  TBD 

Revision#:  01 

Date Revised:  11/15/05

 

ORACEA SPECIFICATIONS:

 

(Doxycycline Delayed
Release Pellets)

 

	
  C.

  	
   

  	
  Test

  	
   

  	
  Specifications

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Appearance: Visual Inspection 

  	
   

  	
  [**]

  
	
   

  	
   

  	
  2.

  	
  Average Content – Doxycycline:

  	
   

  	
  [**]

  
	
   

  	
   

  	
  3.

  	
  Identification (HPC):

  	
   

  	
  [**]

  
	
   

  	
   

  	
  4.

  	
  Loss on Drying:

  USP<731>

  1-2g, 105°C, 4 (±l) hours

  	
   

  	
  [**]

  

 

	
   

  	
  8.

  	
  Dissolution:

  	
   

  	
   

  	
   

  

 

	
   

  	
   

  	
   

  	
   

  	
  Time
  (hours)

  	
   

  	
  Percent Dissolved

  
	
   

  	
   

  	
   

  	
   

  	
  2.0

  	
   

  	
  [**]% [**]%

  
	
   

  	
   

  	
   

  	
   

  	
  4.0

  	
   

  	
   

  

 

26

 

Specification
#:  TBD 

Effective Date:  TBD 

Revision #:  01 

Date Revised:  11/15/05

 

B.                                    Sampling
Plan:

 

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

 

C.                                    References:

 

1.                                       Current USP/NF, European Pharmacopoeia

 

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

 

27

 

EXHIBIT B

 

UNIT PRICING, FEES AND MINIMUM
REQUIREMENT

 

 

	
  UNIT PRICING

  
	
   

  
	
  Product

  	
   

  	
  Dosage

  Form

  	
   

  	
  Minimum

  Campaign Size

  	
   

  	
  Minimum Annual

  Requirement

  	
   

  	
  Initial Unit Price

  
	
  Doxycycline Monohydrate

  	
   

  	
  Capsule

  	
   

  	
  8mm units

  	
   

  	
  [**]

  	
   

  	
  $

  	
  [**] per thousand capsules

  
	
  Doxycycline Monohydrate

  	
   

  	
  Capsule

  	
   

  	
  12mm units

  	
   

  	
  [**]

  	
   

  	
  $

  	
  [**] per thousand capsules

  
	
  Doxycycline Monohydrate

  	
   

  	
  Capsule

  	
   

  	
  20mm units

  	
   

  	
  [**]

  	
   

  	
  $

  	
  [**]per thousand capsules

  

 

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

 

	
  ADDITIONAL FEES

  
	
   

  
	
  Annual Stability Testing

  	
   

  	
  TBD

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

28

 

EXHIBIT C

 

FORM OF QUALITY
AGREEMENT

 

To Be Attached

 

29

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}]]