Document:

Sodium Gamma Hydroxybutyrate Development and Supply Agreement

 EXHIBIT 10.31 
 ORPHAN MEDICAL, INC. 
 SODIUM GAMMA HYDROXYBUTYRATE 
 DEVELOPMENT AND SUPPLY AGREEMENT 
  

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 TABLE OF CONTENTS 
  

							
	ARTICLE	 	 	 	 	  	PAGE
				
	1	 		 	DEFINITIONS	  	4
				
	2.	 		 	TECHNOLOGY TRANSFER/DEVELOPMENT PROGRAM	  	8
				
	3.	 		 	VALIDATION ACTIVITIES	  	9
				
	4.	 		 	MARKETING RIGHTS	  	11
				
	5.	 		 	SUPPLY OF PRODUCT	  	11
				
	6.	 		 	FORECASTS, ORDERS AND DELIVERIES	  	13
				
	7.	 		 	PRICES AND PAYMENTS	  	17
				
	8.	 		 	REPRESENTATIONS, WARRANTIES AND INSPECTIONS	  	20
				
	9.	 		 	ACCEPTANCE, REJECTION AND CLAIMS	  	24
				
	10.	 		 	INDEMNIFICATION	  	26
				
	11.	 		 	INVENTIONS AND PATENTS	  	27
				
	12.	 		 	TRADEMARKS	  	29
				
	13.	 		 	CONFIDENTIALITY	  	30
				
	14.	 		 	TERM OF AGREEMENT	  	32
				
	15.	 		 	TERMINATION	  	33
				
	16.	 		 	FORCE MAJEURE	  	35
				
	17.	 		 	DISPUTE RESOLUTION	  	36
				
	18.	 		 	MISCELLANEOUS	  	38
	
	APPENDICES
				
	APPENDIX	 	A	 	GHB Technology Transfer/Development Program	  	43
				
	APPENDIX	 	B	 	Reporting Requirements	  	44
				
	APPENDIX	 	C	 	Required Drug Specifications	  	47
				
	APPENDIX	 	D	 	Requirement For Stability Studies	  	48
				
	APPENDIX	 	E	 	Confidential Disclosure Agreement	  	52
				
	APPENDIX	 	F	 	Return Material Authorization Form	  	53
				
	APPENDIX	 	G	 	Change Control Request	  	55
				
	APPENDIX	 	H	 	Maximum Drug Price Estimates	  	56

  

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 ORPHAN MEDICAL, INC. 
 SODIUM GAMMA HYDROXYBUTYRATE DEVELOPMENT AND SUPPLY AGREEMENT 
 THIS AGREEMENT
(“Agreement”) is made as of this 6th day of November, 1996 by and between ORPHAN MEDICAL, INC., a Minnesota corporation, having its principal offices at 13911 Ridgedale Drive, Minnetonka, Minnesota 55305 (“ORPHAN”) and LONZA,
INC., a New York corporation, having its principal offices at 17-17 Route 208, Fair Lawn, New Jersey 07410, (“Supplier”). 
 RECITALS 
 1. Supplier develops and manufactures bulk pharmaceutical chemicals meeting the regulatory and governmental
requirements for commercial use in pharmaceutical products. 
 2. ORPHAN develops and markets ethical Pharmaceuticals targeted to specified
populations of patients. 
 3. ORPHAN and Supplier desire to cooperate in the transfer of the manufacture of a pharmaceutical chemical known
as “Sodium Gamma Hydroxybutyrate” (“the Drug”). 
 4. Supplier desires to manufacture the Drug exclusively for sale to
ORPHAN. 
 5. Upon obtaining approval to market the DRUG, ORPHAN wishes to purchase all of its requirements of the Drug from Supplier and
Supplier wishes to supply ORPHAN all of its requirements for the Drug in the Territory. 
 6. Supplier understands that the Drug will likely
be scheduled by the Drug Enforcement Administration (DEA) upon approval by the FDA. While Orphan anticipates 

  

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a Schedule IV designation, Orphan cannot guarantee the level of scheduling that will be required. Supplier agrees that the Drug Price estimate is based on
Schedule IV handling. Supplier also agrees to provide Drug to Orphan if a more restrictive level of scheduling is ultimately required at a price to be mutually agreed upon. 
 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, insurance and handling costs and customs duties. 
 1.2 “Affiliate” means any corporation or non-corporate business entity which 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 forty-nine percent (49%) of the voting stock of another corporation, or (a) in the absence of the ownership of at least
forty-nine percent (49%) 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. 
  

	1.3	 “Contract Year” means the twelve (12) month period beginning on the first 

  

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day of the month in which ORPHAN commercially launches the Drug or a product containing the Drug in a country of the Territory. For purposes of this
Section 1.3, test marketing of the Drug or a product containing the Drug by ORPHAN shall not be deemed to be a commercial launch thereof. 
 1.4 “Delivery” means delivery of the Drug to a drug product manufacturer or any other ORPHAN-designated Third Party. 
 1.5 “Technology Transfer/Development Program” means the multi-staged Technology Transfer/Development Program further described in Appendix A which is attached hereto and made a part hereof, as well as any additional process or
analytical development activities or process or analytical development modifications for the Drug to be mutually agreed upon in good faith by the parties after the date this Agreement is signed and subsequently attached hereto as a replacement for
or as an addition to Appendix A. 
 1.6 “DMF” means a Type II Drug Master File intended for filing with the FDA. 
 1.7 “Dollars” or “$” means United States Dollars. 
 1.8 “Drug Price” means the price to ORPHAN, in Dollars per kilogram, for manufacture of the Drug. 
 1.9 “Drug” means bulk Sodium Gamma Hydroxybutyrate (GHB). 
 1.10 “Effective Date” means the date appearing at
the beginning of this Agreement. 
 1.11 “FDA” means the US Food and Drug Administration or any successor entity. 
 1.12 “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. 
  

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 1.13 “GMPs” means the current Good Manufacturing Practices regulations promulgated by the FDA,
and any applicable amendments thereto in effect at the time of the Drug’s manufacture. 
 1.14 “Manufacturing Cost” means
Supplier’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 Drug, 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 in the country of manufacture. 
 1.15
“NDA” means a New Drug Application filed with the FDA or any equivalent successor application or entity. 
 1.16
“Notification” means the date on which mailed as evidenced by the U.S. Postal Service or other carrier. 
 1.17 “Production
Batch” means a production size batch of the Drug with a specified kilogram weight range, the size and range of which is to be established and mutually agreed upon by the parties during the Technology Transfer/Development Program. 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. 
 1.18 “Proprietary Information” means all non-public information or data relating to the subject matter hereof first communicated by or on behalf of one party to the other, whether in writing or orally,
including without limitation, all scientific, clinical, commercial, financial and business information and data, know-how, compilations, formulae, 

  

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processes, plans, technical information, new product information, compounds, formulations, methods of product delivery, test procedures, product samples,
specifications and other information or data. 
 1.19 “Registration” means any legally required approval by the relevant government
authorities in a country of or community or association of countries included in the Territory (including, where applicable, price approvals) which must be granted for the Drug or a product containing the Drug to be manufactured and/or sold in such
jurisdiction. 
 1.20 “Specifications” means the final specifications for the Drug attached hereto as Appendix C and made a part
hereof, including the final NDA specifications as approved by the FDA, as well as any revised specifications and/or additional specifications for the Drug to be mutually agreed upon in good faith by the parties after the Effective Date and
subsequently attached hereto as a replacement for or as an addition to Appendix C. Such additional specifications may include, but shall not be limited to specifications for degradation, identification of drug substance and physical appearance.

 1.21 “Territory” means worldwide. 
 1.22 “Third Party” means any entity other than Supplier or ORPHAN or their respective Affiliates. 
 1.23 “Validation Protocol” means the written protocol which will be mutually approved by the parties in writing prior to the manufacture of the first Validation Batch and which will set forth the tests and acceptance criteria to
demonstrate that a process used by Supplier in the manufacture of the Drug does what it purports to do and yields quantities of the Drug which consistently meet the Specifications. The Validation Protocol may be amended from time to time during the
term of this Agreement upon mutual agreement of the parties hereto, giving due consideration to applicable legal and regulatory requirements pertaining to the Drug. 
  

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 1.24 “Validation Batches” means the first three (3) Production Batches manufactured
consecutively according to the approved Validation Protocol. 
  

					
	ARTICLE 2	  	TECHNOLOGY TRANSFER/DEVELOPMENT PROGRAM	  	

 2.1 Supplier hereby agrees to conduct the Technology Transfer/Development Program in accordance
with Appendix A, the goal of which is to transfer the current process for commercial manufacture of the Drug, develop protocols for testing the Drug, and finalize Specifications. The Technology Transfer/Development Program shall consist of two
(2) main stages (individually, a “Stage” or collectively, the “Stages”). Supplier agrees to provide or purchase all materials and supplies. 
 In general, Supplier shall perform validations for the Drug at its Conshohocken, Pennsylvania facility, provide stability samples, prepare an environmental assessment report, and prepare the chemical manufacturing
section for ORPHAN to file in an NDA with FDA. A more detailed description, including the time schedule for completion of each Stage of the Technology Transfer/Development Program, is set forth in Appendix A attached hereto and made a part hereof.

 2.2 Promptly upon completion of the development activities conducted by Supplier during each Stage of the Technology Transfer/Development
Program, to the extent it has not already done so, Supplier shall deliver to ORPHAN a complete written report or reports. A detailed description of such reports, as well as other reports to be provided by Supplier during the Technology
Transfer/Development Program is set forth in Appendix B. Within thirty (30) working days after the delivery to ORPHAN of all reports relating to such Stage, ORPHAN shall either (a) accept such reports and notify Supplier if it intends to
proceed with the Technology Transfer/Development Program or (b) send Supplier written notice of Supplier’s failure to conduct such Stage in accordance with the requirements set forth in Appendix A. Supplier agrees to take such corrective
actions and to conduct such additional work required to satisfy the requirements set forth in Appendix A for completion of such Stage. 
  

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 During ORPHAN’S review of each Stage completion report, Supplier and ORPHAN may mutually agree to continue execution
of the Technology Transfer/Development Program based on previous verbal and written correspondence. If ORPHAN advises Supplier with a written notice to stop execution activities, Supplier will cease all program activities and bill ORPHAN on a time
and material basis for work performed. 
 2.3 In consideration of Supplier’s conduct of the Technology Transfer/Development Program,
ORPHAN agrees to pay Supplier the cost for each Stage as set forth in Appendix A. ORPHAN shall only pay Supplier for Stages which are completed. A breakdown of costs for each Stage is set forth in Appendix A. Payments for each Stage will be made
within 30 days of satisfactory completion, as determined by ORPHAN after review of the associated stage completion summary reports as set forth in Appendix B and any other data generated through execution of the Technology Transfer/Development
Program. Supplier shall not incur any costs in excess of the amounts set forth in this paragraph without the prior written consent of ORPHAN. 
 2.4 Supplier and ORPHAN agree to designate one individual who will serve as a central liaison to the other at all times. The person designated will have the capability and authority to assist with coordination and resolution of any and all
issues that might arise. 
  

					
	ARTICLE 3	  	VALIDATION ACTIVITIES	  	

 3.1 Supplier Validation Responsibilities. Supplier shall be responsible for regulatory
required validations of its manufacture of the Drug and its facilities and shall take all reasonable steps to pass government inspection by the FDA or other regulatory agencies in the Territory. Supplier shall also provide reasonable assistance in
preparing and updating the chemical manufacturing portion of the Registrations and all other documents required by the FDA and other regulatory agencies in the Territory for approval of the Drug. In the event non-U.S. Territory regulatory agencies
require process development testing beyond that required for the U.S., Supplier agrees to provide the additional process development testing and associated documentation revisions at terms to be negotiated in good faith by the parties. 

 

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 3.2 Validation of Cvtec Manufacturing Process . As provided in Appendix A, Supplier shall
manufacture ORPHAN’S three (3) consecutive Production Batches of the Drug in accordance with the pre-approved Validation Protocol for validation purposes. 
 Supplier and ORPHAN will jointly review all process development and analytical test results, the Validation Protocol, and stability study results prior to manufacture of each Validation Batch. 
 3.3 Re-Validation of Larger Scale Batches. Supplier shall have the option to manufacture three additional commercial Validation Batches using
larger scale equipment judged to be regulatorily appropriate by Supplier and ORPHAN, conduct appropriate validation testing, and prepare an updated Process Validation Report to improve manufacturing cost. Costs associated with efforts required for
completion of such ‘scale up’ activities will be included in the Manufacturing Cost of the commercial quantities produced subsequent to the scaleup and within the first Contract Year thereafter. 
 If the larger scale Validation Batches may be sold commercially by ORPHAN and, if such Validation Batches meet the Specifications and the acceptance criteria set forth
in the Validation Protocol at the time of FDA approval of a product containing the Drug, the Drug shall be sold, pursuant to the terms of this Agreement, by Supplier to ORPHAN in fulfillment of ORPHAN’S orders for the Drug. 
 3.4 Defective Or Deficient Validation Batches. If any of the Validation Batches do not meet the Specifications and the acceptance criteria set
forth in the Validation Protocol, Supplier shall, at its own expense, for a reasonable period of time not to exceed ninety (90) days, make necessary modifications to its facilities, equipment, processes and/or procedures and, after such
modifications, shall manufacture one or more additional Validation Batches which will meet the Specifications and the acceptance criteria set forth in the Validation Protocol. If ORPHAN concludes that such modifications cannot be made effectively
and promptly or if the additional Validation Batches still do not 

  

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meet the Specifications and the acceptance criteria set forth in the Validation Protocol, ORPHAN may terminate this Agreement upon written Notification to
Supplier in accordance with Article 15 of this Agreement. 
  

					
	ARTICLE 4	  	MARKETING RIGHTS	  	

 4.1 ORPHAN shall have the exclusive right, directly or through any Affiliate, to market,
distribute and sell the Drug or any product containing the Drug in the Territory, if the required Registrations have been obtained and if ORPHAN determines in its business judgment to do so. Supplier shall not market, distribute, make or sell the
Drug or any product containing the Drug, directly or indirectly anywhere in the Territory and, except in the performance of its duties under this agreement, Supplier shall not reference or otherwise utilize any DMF or other filing made by Supplier
on ORPHAN’S behalf unless required by a governmental agency or reference or otherwise utilize any data or information contained in such filing. 
  

					
	ARTICLE 5	  	SUPPLY OF PRODUCT	  	

 5.1 Material Safety Data Sheets. Prior to commencement of development or manufacturing
operations hereunder, ORPHAN shall provide Supplier with a Material Safety Data Sheet (MSDS) and toxicity information for the Drug and any other information reasonably available to ORPHAN which relates to the safe conduct of the manufacturing and/or
packaging operations to be conducted by Supplier. When and as such information becomes available, ORPHAN shall promptly update such information pertinent to the manufacture and/or packaging of the Drug. 
 5.2 Manufacture and Supply. During the term of this Agreement, ORPHAN shall purchase from Supplier, and Supplier shall supply ORPHAN and its
Affiliates their requirements of the Drug for sale or other distribution in the Territory. Supplier and Orphan agree to cooperate closely to ensure that the Drug meets FDA, European, and Japanese standards and specifications. The International
Conference on Harmonisation (ICH) guidelines will be followed for development and manufacturing decisions. 
  

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 Supplier commits to provide the following kilograms per year for the first three years and will use best efforts to
provide any additional quantities that are required: 
 Year 1 - 75,000 kilograms 
 Year 2 - 150,000 kilograms 
 Year 3 -
250,000 kilograms 
 In the event Supplier is not able to provide quantities required that exceed those stated above, Supplier will no longer be the
exclusive supplier in the Territory and will provide technology transfer support per the terms of 5.6 below, to a second supplier chosen by Orphan. 
 Supplier shall provide or purchase all materials and supplies necessary to manufacture the Drug. Supplier shall manufacture the Drug in accordance with the Specifications, the Validation Protocol and applicable cGMPs and shall package,
label and/or otherwise prepare the Drug for bulk delivery to an ORPHAN-designated drug product manufacturer. 
 5.3 Packaging.
Supplier shall furnish all packaging supplies and labels for the Drugs after such materials have been approved by ORPHAN prior to use. All such packaging and labels shall conform to applicable requirements and regulations of FDA or other regulatory
authorities in the Territory. Packaging supplies and labels furnished by Supplier hereunder shall be timely approved by ORPHAN prior to use. 
 5.4 Qualification of Alternate Supplier Manufacturing Site. Supplier will develop a plan for qualification of an alternate Supplier site for manufacture of the Drug within one year of FDA approval of the Drug. If the plan allows for
preparation to manufacture in 120 days or less, it will not be executed prior to determination of need. If the timeline for provision of the Drug from an alternate site is greater than 120 days, one year after approval of the Drug for commercial use
by the FDA, Supplier agrees to take such actions as are reasonably necessary to qualify a second Supplier manufacturing site in addition to the current facility at Conshohocken, Pennsylvania. Supplier will provide regulatory documentation of
processes or activities as required by each country of the Territory within which ORPHAN applies for approval of the Drug. ORPHAN will be 

  

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responsible for determining the regulatory requirements for each submission. Supplier agrees to provide any additionally required development process testing
at terms to be negotiated in good faith by the parties. 
 5.5 Conditions Requiring Backup Manufacture. Supplier agrees to support the
successful transfer of manufacturing technology as set forth in Section 5.6 to a second bulk drug manufacturer chosen by ORPHAN to make, have made, use and sell the Drug if Supplier (a) for a period of at least one hundred fifty
(150) days, is unable to manufacture substantially all of ORPHAN’S orders for any reason covered by Section 16.1 hereof, or (b) if Supplier otherwise fails or refuses to meet ORPHAN’S orders for the Drug pursuant to the
terms hereof. 
 5.6 Supplier Responsibility in Transfer of Technology to Back-Up Manufacturer. Subject to the provisions of
Section 5.5, Supplier agrees to provide information and qualified personnel (five (5) days maximum) to support the successful transfer of all analytical and manufacturing development, to include know-how and patent processes (the
“Background Technology”) and the right to reference any DMF filed with the FDA relating to the Drug. Supplier agrees to render all reasonable technical assistance to the secured contract manufacturer and to provide, at cost if requested,
sources of or supplies of raw materials necessary to manufacture the Drug. ORPHAN shall reimburse Supplier for its reasonable out-of-pocket costs incurred in rendering such technical assistance for which ORPHAN prior approval has been obtained for
each day in excess of three (3) man-days. In addition, ORPHAN and Supplier will negotiate in good faith any additional time and cost for the successful transfer of manufacture to a backup supplier. 
  

					
	ARTICLE 6	  	FORECASTS. ORDERS AND DELIVERIES	  	

 6.1 Forecasts. ORPHAN shall provide Supplier with forecasts of ORPHAN’S anticipated
quarterly requirements of the Drug for distribution and sale in the United States commencing with the twelve (12) month period that begins at the time of an FDA approval. Such forecast will be provided one year in advance of anticipated FDA
approval of the NDA and ORPHAN shall update such 12-month forecast on a quarterly 

  

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basis thereafter. Once FDA approval of the Drug is received, ORPHAN will provide Supplier, prior to the beginning of each calendar quarter, with forecasts of
its anticipated requirements of the Drug for the following four calendar quarters. Supplier will provide an annual anticipated schedule for manufacture and will consult with ORPHAN on schedule changes. 
  

	 	(a)	The forecasts provided to Supplier pursuant to this Section 6.1 are for planning purposes only and do not constitute a commitment by ORPHAN to have such or any quantity of Drug
manufactured by Supplier or a commitment by Supplier to manufacture any quantity of the Drug for ORPHAN during the calendar year. 

  

	 	(b)	Supplier shall not be required, but will attempt in good faith, subject to its obligation to other customers, to manufacture during any calendar quarter up to one hundred fifty
percent (150%) of the quantity of the Drug ORPHAN forecasted it would purchase from Supplier during such quarter in its most recent forecast covering such quarter. Supplier will promptly communicate with ORPHAN as to its ability to produce
quantities requested. 

  

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

  

	 	(d)	 Supplier acknowledges that accurate forecasts of requirements are inherently difficult for a new pharmaceutical product. ORPHAN acknowledges that if it orders
substantially less than forecasted quantities, this can cause hardship to Supplier if it is obligated to reserve capacity needlessly for ORPHAN’S requirements and, as a consequence, foregoes other opportunities. Accordingly, if Supplier
anticipates competing demands for its capacity, it will inform ORPHAN at least ninety (90) days in advance, in which case ORPHAN shall have the opportunity to deliver to Supplier a firm commitment for a six-month supply (a “Six Month
Commitment”). The consequences of delivery of a Six Month Commitment are that during such six-month period (i) ORPHAN shall be required to purchase not less than 

  

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80% of the amount set forth in the Six Month Commitment and (ii) Supplier shall be required to manufacture not more than 120% of such amount. If ORPHAN
does not deliver a Six Month Commitment, Supplier may accept other opportunities to use its production capacity, but will nevertheless use its best efforts to produce the Drug in accordance with ORPHAN’S purchase orders in a timely manner. It
is agreed that this procedure will be used on an exception basis. 

  

	 	(e)	If Supplier manufactures the Drug with a lead time of more than ninety (90) days, ORPHAN shall not be required to pay any additional storage, or pay for the Drug sooner than as
set forth in Section 7.5 nor shall any advance manufacture lead to a violation of the warranty of expiration date set forth in Section 8.1. 

 6.2 Orders. ORPHAN shall order the manufacturing of the Drug by Supplier 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 Drug shall be in Production Batch sizes or whole multiples thereof. The terms contained in this Agreement shall govern over all purchase orders or sales orders of the Drug hereunder and
shall not be varied by the terms of any ORPHAN purchase order or Supplier sales order or invoice. If ORPHAN requires manufacture of the Drug with less than ninety (90) days lead time, Supplier shall use reasonable efforts to accommodate
ORPHAN’S requirements. Supplier shall not manufacture the Drug except upon receipt of an ORPHAN purchase order to ensure a supply of the Drug with the maximum expiration dating. 
 6.3 Late Manufacture and Delivery. When ORPHAN submits a purchase order at least ninety (90) days prior to the required delivery date,
Supplier shall confirm delivery upon receipt of this order and provide Orphan with a manufacturing plan detailing timing within fifteen (15) working days. Changes in this manufacturing plan which could affect the timing of deliveries will not
be made without the written agreement of ORPHAN. In the event of unexpected delays owing to manufacturing problems associated with the Drug, Supplier will inform ORPHAN immediately and action to be taken will be jointly 

  

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decided. A failure to provide supply of Drug on schedule will be considered a material breach of this Agreement and Supplier will no longer be the exclusive
supplier in the Territory and will provide technology transfer support per the terms of Section 5.6 above, to a second supplier chosen by ORPHAN. 
 6.4 Delivery of Drug. Supplier shall arrange all shipments of the Drug F.O.B. destination to an ORPHAN designated location to be determined by ORPHAN prior to or upon regulatory approval of the Drug in
accordance with reasonable commercial practices and, for shipments to be made in the United States, any applicable U.S. Department of Transportation regulations for pharmaceutical products to ensure against deterioration and damage of the Drug.
ORPHAN shall approve any final shipping specifications subject to any stability findings for the Drug. 
  

	 	(a)	Risk of loss of any shipment of the Drug shall pass to ORPHAN upon acceptance of the shipment at the approved destination. 

  

	 	(b)	ORPHAN shall pay (or reimburse) Supplier for any freight charges, taxes, packing costs, export or import duties, and insurance costs incurred by Supplier. Supplier may invoice
ORPHAN for any freight charges, taxes, packing costs, export/import duties and insurance costs relating to shipment of the Drug paid by Supplier for ORPHAN’S account immediately upon each shipment of the Drug, provided all such charges or costs
fall within the terms and conditions established by ORPHAN with the carrier for such shipment. 

  

	 	(c)	ORPHAN reserves the right to select one or more carriers for shipment of the Drug and to negotiate the terms and conditions for such shipment. Risk of loss of any shipment of the
Drug would then pass to ORPHAN upon Supplier’s tender of such shipment to the carrier selected by ORPHAN. 

  

	 	(d)	The quantity of Drug in any shipment may vary from the quantity reflected in the purchase order for such shipment by up to five percent (5%) and still be deemed to be in
compliance with such purchase order; provided, however, that ORPHAN shall only be invoiced and required to pay for the quantity actually shipped. 

  

	 	(e)	 All Drug shall be shipped in bulk a) using suitable packaging as provided for 

  

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in the approved NDA, or in other regulatory approvals obtained in the Territory, and b) in accordance with such other contract specifications as may be
mutually agreed upon by the parties hereto. 

 6.5 Finished Bulk Inventory Storage. Supplier agrees to store Drug
manufactured for ORPHAN, in quantities of up to 60,000 kg for no longer than three (3) months beyond the purchase order delivery date according to the requirements established through conduct of a stability study program as outlined in Appendix
D at a charge included in the Drug Price. ORPHAN will be billed for storage beyond three months at a cost to be negotiated in good faith upon FDA approval. Supplier shall have no responsibility for deterioration of Drug stored in accordance with
such requirements. 
 6.6 Certifications. For each Validation Batch and upon request for Production Batches of the Drug manufactured
for ORPHAN hereunder, Supplier shall furnish to ORPHAN at the time of its delivery copies of the following records. Originals are to be retained by Supplier: 
  

	 	(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 Manufacture which confirms that the Drug was manufactured, tested, and delivered in
full compliance with all applicable laws and regulations. 

  

					
	ARTICLE 7	  	PRICES AND PAYMENTS	  	

 7.1 First Contract Year Manufacturing Price. After completion of Stage A of the Technology
Transfer/Development Program, Supplier will quote the Drug Price that ORPHAN shall pay to Supplier for any orders of the Drug manufactured during the first Contract Year (including, if applicable, Validation Batches and any quantities ordered prior
to the first Contract Year) as set forth in the Validation Protocol. The Drug Price for the first Contract Year shall be no higher than the maximum Drug Price estimate set forth in Appendix H for the volume range which is appropriate unless
assumptions listed in 

  

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Appendix H are no longer valid. The Drug Price for the first Contract Year will be lower than the maximum Drug Price estimate contained in Appendix H to the
extent that there are improvements in the Manufacturing Cost thereof from the assumptions for Manufacturing Costs set forth in Appendix H and determined during the Technology Transfer/Development Program for the volume range appropriate. 

7.2 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, Supplier shall notify ORPHAN of the proposed Drug Price for the next succeeding Contract Year provided, however, that the proposed Drug Price for each new Contract year shall be equal to the then current price increased or
decreased by the percentage amount of the actual increase or decrease in the Manufacturing Cost for the Drug from the first day to the last day of the preceding twelve (12) month period; provided, however, (a) that the percentage amount of
any such increase in Manufacturing Cost may not exceed the percentage increase in the Producer Price Index for Finished Goods, (PPI) 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, and (b) that ORPHAN will receive prior notification. Any increase or decrease in Drug
Price shall be applicable only to those Production Batches of the Drug for which the production process is begun after the change in cost becomes effective and shall remain in effect until another price change becomes applicable. 
 In the event the cost of methanol increases by more than 50% within a single contract year, the Drug Price may be adjusted by the amount of the actual increase for that
year. Likewise, if the cost of methanol decreases by more than 50% within a single contract year, the Drug Price will be adjusted down by the amount of the actual decrease for that year. Any adjustments made as a result of methanol price increases
or decreases are separate from and in addition to the annual price adjustments described above. 
 7.3 Justification of Price
Increases. Supplier shall substantiate, upon ORPHAN’S request, Supplier’s price increases for the Drug for any Contract Year. 

  

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Supplier shall keep full and accurate books and records of account containing all particulars that may be necessary for the purpose of calculating the
Manufacturing Cost of the Drug, including Supplier’s Acquisition Cost for any raw materials used in manufacturing the Drug. ORPHAN may, upon reasonable notice to Supplier and at ORPHAN’S expense, have an independent public accountant
reasonably acceptable to Supplier conduct, during normal business hours, an examination of Supplier’s books and records to verify the basis of such increases of the Drug Price for any Contract Year or Contract Years. If Supplier has increased
Drug Price based on a claimed increase in Manufacturing Cost to ORPHAN in excess of five percent (5%) above what such independent certified public accountant finds to be justifiable for any Contract Year, or Contract Years, Supplier shall
reimburse ORPHAN’S reasonable cost and expenses of such examination. In no event shall the Manufacturing Cost with respect to any period be audited more than once. The independent public accountant used to conduct such audit shall enter into a
confidentiality agreement satisfactory to Supplier and shall provide ORPHAN only with its conclusions. 
 7.4 Cost Reductions Through
Process Improvements. To encourage active and open consideration of Manufacturing Cost reductions, it is agreed that 65% of a cost reduction benefit will be provided to the party that determines how to reduce cost. After the pilot campaign, the
pricing offered shall be considered applicable to the process as then practiced (the “Baseline Process”). Any subsequent improvements which lead to realized manufacturing cost reductions shall be shared by Supplier and ORPHAN according to
the formula 65% to that party proposing the improvement and 35% to the other party. Proposals for improvement will be outlined in writing or communicated verbally and will detail how the improvement should be realized. In the event of improvements
developed through a joint collaboration where the originator is unclear, improvements will be shared 50% to each party. 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.) After realization
of improvements and application of this mechanism, the Baseline Process will be redefined and. the same calculation will be applied to any subsequent Manufacturing Cost reductions. 
  

 Page 19 of 56 

 7.5 Invoice Payment. Payment for each lot of the Drug 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 Drug reflected therein. ORPHAN will accept title to the Drug at the earlier of (a) when risk of loss passes pursuant to
Section 6.4, and (b) the date of the payment of the invoice thereof. Supplier will retain liability for the safe keeping of the Drug until delivery of shipment FOB destination. 
  

			
	ARTICLE 8	  	REPRESENTATIONS, WARRANTIES AND INSPECTIONS

  

	 	8.1	Representations and Warranties. 

 (a) ORPHAN represents and warrants to Supplier 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; and 
 (ii) The processes transferred to Supplier by ORPHAN pursuant to the Technology Transfer/Development Program do not infringe any Third Party patents, copyrights, trademarks, trade secrets or other Third Party
intellectual property rights. 
 (b) Supplier represents and warrants to ORPHAN that: 
 (i) The execution of this Agreement and the performance by Supplier of its obligations hereunder have been duly authorized by all
necessary corporate action and are within the power and authority of Supplier; 
 (ii) Subject to ORPHAN’S warranty set
forth in Section 8.1 (a)(ii), Supplier warrants that no Third Party patents, copyrights, trademarks, trade secrets or other Third Party intellectual property rights will be infringed by Supplier’s performance of its obligations under this
Agreement; 
 (iii) Supplier shall 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 Federal Food, Drug, and Cosmetic Act; 
  

 Page 20 of 56 

 (iv) at the time of its delivery to a designated drug product manufacturer or other
ORPHAN designated location, each Production Batch of the Drug manufactured by Supplier will: 
 (A) have an expiration date
at the time of shipment 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 be stored under proper conditions ; 
 (C) have
been manufactured in conformance with the Validation Protocol and the DMF or NDA CMC Section on file with the FDA for manufacture of the Drug at Supplier’s facilities and in compliance with all other applicable laws and regulations, including,
without limitation, the then-current FDA GMP’s; 
 (D) not to be adulterated or misbranded by Supplier 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. This guarantee shall be continuing and shall be applicable to any Drug shipped by Supplier to a
drug product manufacturer or any other ORPHAN designated location before receipt by ORPHAN of written notice of revocation thereof; 
 (E) be
free from all liens and encumbrances of any kind provided, however, THE WARRANTIES SET FORTH HEREIN ARE EXPRESSLY IN LIEU OF AND EXCLUDE, AND SUPPLIER EXPRESSLY DISCLAIMS AND NEGATES ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED, ARISING BY OPERATION
OF LAW OR OTHERWISE, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 
 8.2 ORPHAN Inspection
Rights. ORPHAN shall have the following inspection rights with respect to Supplier’s manufacture of the Drug: 
  

	 	(a)	During the Technology Transfer/Development Program, upon five (5) days’ prior written notice, ORPHAN’S authorized representatives may, during normal business hours,
inspect Supplier’s facilities at which the Technology Transfer/Development Program is being conducted to monitor the progress of the Technology Transfer/Development Program. Supplier shall provide all data and records relating to the conduct of
the Technology Transfer/Development Program reasonably requested by ORPHAN’S authorized representatives. 

  

 Page 21 of 56 

	 	(b)	Prior to commencement of manufacture and/or packaging of the Drug and at least once during each Contract Year, upon five (5) day’s prior written notice, ORPHAN’S
authorized representatives may, during normal business hours, review Supplier’s governmental licenses and permits relating to the facilities and operations utilized by Supplier in the manufacture and/or packaging of the Drug.

  

	 	(c)	ORPHAN’S authorized representatives may inspect Supplier’s manufacturing facilities during each production run of the Drug and at any other time upon reasonable notice to
Supplier to audit any manufacturing, packaging, storage, and testing operations that ORPHAN deems reasonably appropriate to confirm that each batch of Drug has been manufactured, handled, and stored in accordance with the terms hereof. Upon
ORPHAN’S request, Supplier shall notify ORPHAN at least thirty (30) days in advance of any production run of the Drug. 

  

	 	(d)	Supplier shall provide ORPHAN’S authorized representatives with copies of all data and records relating to (i) process validation for the Drug including, without
limitation, validation of associated automated systems, information systems and any other systems associated with process control, promptly after completion thereof and, promptly thereafter, following any revalidation; and (ii) the production
of the Drug, including, without limitation, raw materials, additional validations, production batch records, packaging components, stability data and quality assurance records. 

  

	 	(e)	Supplier shall keep ORPHAN updated on Supplier’s internal audit and approval process for raw material suppliers, including, without limitation, an annual review of
Supplier’s audit reports of suppliers for materials to be used in the manufacture of the Drug. 

  

 Page 22 of 56 

	 	(f)	ORPHAN shall perform assays on samples from each Production Batch of the Drug and may perform such other tests as ORPHAN deems necessary or appropriate from any production run of
the Drug manufactured for ORPHAN hereunder, and, without charge, Supplier shall furnish such samples, the analytical methodology and specifications relating thereto approved by FDA or other appropriate regulatory authorities and other testing
materials as ORPHAN may reasonably request for such purposes. 

  

	 	(g)	ORPHAN’S authorized representatives who are to conduct inspection or to review any Supplier records pursuant to this Section 8.3 shall execute a nondisclosure agreement
substantially in the form attached hereto as Appendix E prior to conducting such inspections or reviewing such records. 

 8.3
Regulatory correspondence and Inspections. Supplier shall promptly inform ORPHAN of any regulatory correspondence or inspection with respect to Supplier’s manufacture of the Drug as follows: 
  

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

  

	 	(b)	 If Supplier receives any regulatory correspondence or comments from any federal, state, or local regulatory agency in connection with its manufacture of the Drug
requiring a response or action by Supplier, including, without limitation, receipt of an FDA Form 483 (Inspectional Observations) or an FDA “Warning Letter”, Supplier shall immediately provide ORPHAN with a copy of each such regulatory
correspondence or comment and a copy of 

  

 Page 23 of 56 

	 	 
Supplier’s proposed response thereto for ORPHAN’S review and approval prior to its submission if Supplier’s manufacture of additional products
are not involved. In cases where Supplier’s manufacture of additional products are involved, a good faith effort will be made to reach joint approval within an appropriate timeframe. 

  

	 	(c)	If Supplier’s manufacturing facility is inspected by representatives of any federal, state, or local regulatory agency in connection with Supplier’s manufacture of the
Drug, including, but not limited to, any pre-NDA approval inspection by the FDA, Supplier 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 Supplier’s manufacturing facility to observe any portion of such regulatory inspection relating to
the Drug. 

  

					
	ARTICLE 9	  	ACCEPTANCE. REJECTION. AND CLAIMS	  	

 9.1 Acceptance and Rejection. Each shipment shall be considered to conform to the
Specifications and the other warranties set forth in Section 8.1(b) unless ORPHAN gives Supplier notice in writing that it does not consider a particular shipment to conform, together with supporting documentation, within ninety (90) days
of receipt of such shipment (or, in the case of nonconformity that could not be reasonably discovered by ORPHAN’S analysis within thirty (30) days of such discovery). ORPHAN will analyze (or cause to be analyzed by its designated product
manufacturer) each shipment of Drug using the validated methods approved by FDA for release of Drug. Such testing will be done for acceptance or rejection of the lot. If ORPHAN gives Supplier such notice, Supplier 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 any action or inaction on the part of Supplier. 
 In the event that the parties are unable to agree as to whether or not the shipment 

  

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conforms with the Specifications or other warranty, the question will be submitted to an independent quality control laboratory as the parties may 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, Supplier will replace the portion of such shipment under dispute until such dispute is resolved. 
 9.2 Rejected Shipments. If the nonconformity in a rejected shipment of the Drug was due to any action or inaction of ORPHAN, its carrier or its designated drug product manufacturer subsequent to delivery (F.O.B. destination) of the
Drug by Supplier, Supplier shall have no liability for such rejected shipment. If the nonconformity in a rejected shipment of the Drug was due to any action or inaction of Supplier prior to shipment delivery (F.O.B. destination), Supplier at its
cost shall either credit ORPHAN for the full Manufacturing Cost of such shipment or replace it with a conforming shipment within thirty (30) days of the notice of rejection. Such credit or replacement will be ORPHAN’S sole remedy for such
rejected Drug provided Supplier provides replacement or credit within thirty (30) days of notice of rejection. 
 9.3 Disposal;
Return Material Authorization. If ORPHAN expects to make a claim against Supplier with respect to a rejected shipment of the Drug, ORPHAN shall not dispose or allow the disposal of such Drug shipment without the express written authorization and
instructions of Supplier. ORPHAN or any ORPHAN designated drug product manufacturer shall not return any rejected shipment of the Drug to Supplier without a Return Material Authorization (“RMA”) from Supplier (Appendix F). Upon written
request of ORPHAN or the ORPHAN designated drug product manufacturer, as the case may be, Supplier shall promptly issue a RMA for any rejected shipment, provided, however, appropriate samples may be retained as evidence of the basis for such
rejection. 
 9.4 Product Recalls. Each party shall promptly notify the other party if any batch of the Drug is alleged or proven to
be the subject of a recall, market withdrawal or 

  

 Page 25 of 56 

 
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 the result of Supplier’s breach of any of its representations and warranties set forth in Article 8 above, in which case Supplier shall bear
all costs of such recall, market withdrawal, or correction. Supplier 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 Article 9. 

 

					
	ARTICLE 10	  	INDEMNIFICATION	  	

 10.1 Supplier’s Indemnification to ORPHAN. Subject to Suppliers warranty and
ORPHAN’S compliance with its obligations in Section 10.3 hereof, Supplier hereby indemnifies, defends, and holds ORPHAN and its directors, officers, employees, agents, and Affiliates harmless against any and all losses, damages, expenses,
reasonable attorneys’ fees (regardless of outcome), settlement costs and judgments arising out of or resulting from Supplier’s material breach of any of its representations or warranties under Article 8 above, including, but not limited
to, development, manufacture, testing, shipping, storage, delivery and/or other handling or processing of the Drug, except to the extent that such losses, damages, expenses, fees, settlement costs and judgments result from the material breach by
ORPHAN of its covenants or warranties under this Agreement or the negligence or willful misconduct of ORPHAN, its employees or agents. Supplier shall defend and indemnify ORPHAN for any injuries or claims of injuries which may arise during
manufacturing of the Product. 
 10.2 ORPHAN Indemnification of Supplier. Except as provided in Section 10.1 above, and subject
to Supplier’s compliance with its obligations in Section 10.3 hereof, ORPHAN hereby indemnifies, defends, and holds Supplier and its directors, officers, employees, agents and Affiliates harmless against any and all claims, losses,
damages, expenses, reasonable attorneys’ fees (regardless of outcome), settlement costs and 

  

 Page 26 of 56 

 
judgments (a) to which Supplier may be subject with respect to the Drug, except those which arise under facts and circumstances pursuant to which
Supplier would be required to indemnify ORPHAN under the provisions of Section 10.1, or (b) arising out of or resulting from any subsequent formulation, repackaging, distribution or other use of the Drug supplied hereunder, including third
party liability claims relating thereto. 
 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 directors, officers, employees, agents or
Affiliates intend to claim such indemnification. The Indemnitee shall permit, and shall cause its directors, officers, employees, agents and Affiliates to permit, the Indemnitor, at its discretion, upon providing the Indemnitee with a written
acknowledgment of full and complete responsibility for the indemnification of the Indemnitee with respect to any such action, claim or other matter, to settle any such action, claim or other matter; and to complete control of such defense or
settlement by the Indemnitor; provided, however, that such settlement shall not adversely affect the Indemnitee’s rights hereunder or impose any obligations on the Indemnitee in addition to those set forth herein in order for it to exercise
such rights. No such action, claim or other matter shall be settled without the prior written consent of the Indemnitor, and the Indemnitor shall not be responsible for any legal fees or other costs incurred other than as provided herein. The
Indemnitee, its directors, officers, employees, agents and Affiliates at the Indemnitor’s expense shall cooperate with the Indemnitor and its legal representatives in the investigation 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. 
  

					
	ARTICLE 11	  	INVENTIONS AND PATENTS	  	

 11.1 Inventions by Supplier. Supplier hereby assigns, releases, and transfers to ORPHAN its
entire right, title and interest in and to any invention, discovery or 

  

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improvement relating to the Drug (whether patentable or not) made or conceived by Supplier employees or contractors, including, without limitation,
manufacturing, manufacturing processes and procedures, analytical process, procedure or method, analytical results, and any route(s) of synthesis provided, however, ORPHAN hereby grants to Supplier a paid-up, worldwide, nonexclusive, nontransferable
license to use patented inventions, discoveries, or improvements (a) for purposes of this Agreement, (b) for Supplier’s and internal research and development purposes, (c) for Supplier’s non pharmaceutical commercial
purposes and (d) with other non-competitive pharmaceutical compounds used in different therapeutic classes. 
 11.2 Inventions by
ORPHAN. ORPHAN shall own all right, title and interest in and to any invention, discovery or improvement relating to the Drug (whether patentable or not) made or conceived solely by ORPHAN employees or by any ORPHAN contractor other than
Supplier, including, without limitation, any manufacturing or analytical process, procedure or method or any source of synthesis given to Supplier. 
 11.3 Supplier shall promptly disclose to ORPHAN any and all inventions, discoveries and improvements relating to the Drug (collectively “Inventions”), by Supplier’s employees or contractors, either alone or together with
ORPHAN’S employees or contractors, and shall assign all its interests to ORPHAN or its designee in accordance with Section 11.1. Supplier 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. Supplier’s and ORPHAN’S obligations hereunder shall survive termination of this Agreement. All data obtained in the Technology Transfer/Development Program and the stability program
described in Appendix D—Requirements for Stability Studies, are the property of ORPHAN and cannot be used without its consent except for the performance by Supplier of its obligations hereunder. 
  

 Page 28 of 56 

					
	ARTICLE 12	  	TRADEMARKS	  	

 12.1 ORPHAN Trademarks. ORPHAN may originate, select and apply to register one or more
trademarks (“ORPHAN Trademarks”) under which the Drug 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 Supplier in this Article 12. ORPHAN shall be solely responsible for all prosecution, defense, maintenance and costs relating to the ORPHAN Trademarks. 
 12.2 Limited Trademark License. ORPHAN hereby grants Supplier a paid-up, worldwide, nonexclusive, nontransferable license to the ORPHAN Trademarks solely for purposes of manufacturing and distributing the Drug
under this Agreement. Supplier shall comply with ORPHAN’S standard 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. Supplier 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, Supplier shall promptly cease any use of the ORPHAN Trademarks. 
 12.3 Limitations. Supplier 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 Supplier. 
 12.4 Infringement. Supplier shall promptly notify ORPHAN if Supplier knows or reasonably suspects that a Third Party
is infringing any ORPHAN Trademark and shall provide ORPHAN with any evidence thereof. At ORPHAN’S expense, Supplier shall reasonably cooperate in any investigation or other legal action with regard to such infringement. 
  

 Page 29 of 56 

					
	ARTICLE 13	  	CONFIDENTIALITY	  	

 13.1 Proprietary Information. During the term hereof and for a period of five
(5) years thereafter, any Proprietary Information disclosed by the one party (the “Disclosing Party”), directly or indirectly, to the other party (the “Receiving Party”) under this Agreement shall be deemed confidential and
trade secret information, whether so designated or not, and shall not be disclosed by the Receiving Party to any Third Party, except as set forth below. Access to such Proprietary Information will be limited to employees, agents, consultants or
contractors 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, consultants or contractors 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. 
 13.2 Exceptions. 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; 

  

	 	(d)	was independently developed by the Receiving Party without any use of or reliance on any Proprietary Information of the Disclosing Party; 

  

	 	(e)	 is required to be disclosed by legal process; provided that, in each case the 

  

 Page 30 of 56 

	 	 
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; 

  

	 	(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 or Supplier to obtain Registrations for the Drug or otherwise to comply with applicable regulatory requirements, or for Supplier to manufacture the Drug for ORPHAN hereunder; provided, however, that no Proprietary Information of
ORPHAN or Supplier 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; or 

  

	 	(g)	is information which is required to be disclosed to customers, users, and prescribers of the Product or which is reasonably necessary to disclose in connection with the ethical
marketing of the Product, if applicable. 

 13.3 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. 
 13.4 Each Third Party
to which Proprietary Information is disclosed other than a governmental agency will agree in writing prior to such disclosure to keep the Proprietary Information in strict confidence and to comply with the terms of this Article 13. 
 13.5 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 the terms of any agreement made between the parties. 
 13.6 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. 
  

 Page 31 of 56 

 13.7 The party receiving Proprietary Information 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. 
 13.8 Except as otherwise required by law, applicable regulations or the terms of this Agreement or mutually agreed upon by the parties hereto, each party
shall treat as confidential the terms, conditions, and existence of this Agreement. 
 13.9 Prior Confidentiality Agreement. The
Confidentiality Agreement between the parties hereto dated February 27, 1996, is hereby superseded and terminated. Any disclosure of Proprietary Information by either party pursuant to such Confidentiality Agreement shall be deemed to have been
made hereunder and shall be subject to this Article 13. 
 13.10 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 14	  	TERM OF AGREEMENT	  	

 14.1 Unless sooner terminated pursuant to Article 15 below, the initial term of this Agreement
shall commence on the Effective Date and end upon expiration of the third (3rd) Contract Year. Supplier and ORPHAN may mutually agree to extend this Agreement on a for one or more additional three year terms. Supplier or ORPHAN must 

  

 Page 32 of 56 

 
provide a written notice of intent to terminate the Agreement at least eighteen (18) months prior to the expiration of the initial or any extended term.
All references herein to “term of this Agreement” shall be deemed to include both the initial and any extended terms. 
  

					
	ARTICLE 15	  	TERMINATION	  	

 15.1 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 ten (10) days’ 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 thirty (30) days of written notice thereof; provided, further, that if at the end of such thirty (30) day period the party in breach is making a good faith effort to cure, a reasonable time thereafter (not to
exceed an additional thirty (30) 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. 

 15.2 Termination by ORPHAN. In addition to any other legal or equitable
remedies it may have, ORPHAN may terminate this Agreement upon thirty (30) days’ written notice to Supplier: 
  

	 	(a)	If the minimum requirements for the Drug or the timeframes for performance set forth in Appendix A hereto are not met by Supplier and no amendment thereof is acceptable to ORPHAN;
or 

  

 Page 33 of 56 

	 	(b)	If ORPHAN determines, in its sole discretion, not to proceed further with the investigation of the Drug for the treatment of narcolepsy or any other indication.

 15.3 Termination by Supplier. In addition to any other legal or equitable remedies it may have. Supplier may
terminate this Agreement upon thirty (30) days’ written notice to ORPHAN if in the course of performing Stage A, Supplier determines that solely, in order to manufacture the Drug under the terms of this Agreement, it will have to make a
capital investment in excess of $100,000. Replacement of machinery as a result of ordinary wear and tear is excluded from this amount. 
 15.4 Effects of Expiration or Termination. Upon expiration or termination of this Agreement for any reason: 
  

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

  

	 	(b)	Supplier shall continue to provide manufacturing and quality assurance support and support of the stability studies for the Drug until the expiration date of the last production
Batch of the Drug purchased by ORPHAN hereunder or the date required by any applicable law or regulation in the Territory, whichever is later, provided, however, if ORPHAN terminates this Agreement, ORPHAN shall reimburse Supplier for the actual
costs of any required support of the stability studies. 

  

	 	(c)	Supplier shall take all steps reasonably requested by ORPHAN to confirm the assignment to ORPHAN all of Supplier’s right, title and interest in the Inventions, including,
without limitation, to execute or cause its employees or contractors 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 Supplier’s employees, in connection with steps. 

  

	 	(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. 

  

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 15.5 Survival. The provisions of Articles 4 (Marketing Rights), 7 (Prices and Payments), 8
(Representations, Warranties, and Inspections), 9 (Acceptance, Rejection and Claims), 10 (Indemnification), 11 (Inventions and Patents), 12 (Trademarks), 13 (Confidentiality), 14 (Term of Agreement), 15 (Termination), 16 (Force Majeure), 17 (Dispute
Resolution) and 18 (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 16	 	FORCE MAJEURE	 	

 16.1 Events of Force Majeure. Either party shall be excused from the performance of its
obligations 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, flood or storm; epidemic; or failure of suppliers, public utilities or common carriers. Such excuse shall continue as long as the condition preventing the performance continues. Upon cessation of such condition,
such party shall promptly resume performance hereunder. 
 16.2 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 Supplier is the affected party, such notice of resumption of performance shall state the quantities of Drug manufactured but not shipped by Supplier due to any event of force
majeure and the expiration dates thereof. 
 16.3 Cover. During any suspension of performance by Supplier under Section 16.1 above,
ORPHAN may, at its option, purchase elsewhere the quantities of the Drug ORPHAN has ordered which Supplier is unable to deliver. 
  

 Page 35 of 56 

 16.4 Short Supply Allocation. If Supplier is unable to supply all of ORPHAN’S orders for the
Drug hereunder in a timely manner, Supplier shall equitably allocate its available resources and production capacity among ORPHAN and Supplier’s other customers and internal needs, taking into consideration the respective requirements of each
of the parties during a reasonable time period prior to allocation and their requirements during the allocation period. 
  

					
	ARTICLE 17	  	DISPUTE RESOLUTION	  	

 17.1 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 Section, including, as a final method of resolution, binding arbitration. The amount involved in any such dispute, controversy, or claim
shall be conclusively determined for the sole purpose of determining whether such dispute, controversy, or claim is subject to the provisions of this Article 17, by the amount set forth in an initial letter from the party making the claim to the
other party. 
 17.2 Mediation. If attempts to resolve the dispute pursuant to Section 17.1 are unsuccessful, before commencing
arbitration, 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 New York, New York ,
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 

  

 Page 36 of 56 

 
parties cannot agree upon a mutually acceptable mediator within ten (10) days of the end of the 30-day negotiation period in Section 17.1 or if the
Dispute is not resolved by mediation within ten (10) days after completion of the mediation session, either party may give notice in writing that the Dispute shall be decided by final and binding arbitration. 
 17.3 Arbitration. Final and binding arbitration of any Dispute shall be conducted in Minneapolis, Minnesota, before three (3) arbitrators
selected by mutual agreement of the parties or, if no such agreement is possible, appointed by the American Arbitration Association (“AAA”). The arbitration shall be conducted in accordance with the AAA Commercial Arbitration Rules then in
effect, subject to the modifications set forth below, and judgment upon the award may be entered in any court of competent jurisdiction. At least one arbitrator shall have experience in the pharmaceutical industry, and at least one arbitrator shall
be an attorney with experience in pharmaceutical industry licensing and contractual matters. The arbitration shall be closed to any Third Party. Notwithstanding any provision to the contrary in the AAA’s Commercial Arbitration Rules, the
parties hereby stipulate that any arbitration hereunder shall be subject to the following special rules: 
  

	 	(a)	Each party shall have the right to request from the arbitrators, and the arbitrators shall order upon good cause shown, reasonable and limited pre-hearing discovery as permitted in
civil matters in the courts of Minnesota, , including (i) exchange of witness lists, (ii) depositions under oath of named witnesses, (iii) written interrogatories, and (iv) document requests; 

  

	 	(b)	If a party is asked to reveal material in the arbitration which the party considers to be Proprietary Information, the party shall bring the matter to the attention of the
arbitrators, who shall make such protective orders as are reasonable and necessary; 

  

	 	(c)	Upon conclusion of the pre-hearing discovery, the arbitrators shall promptly hold a hearing upon the evidence to be presented by the parties and shall promptly render a written
opinion and award but in no event later than sixty (60) days after the conclusion of the hearing. 

  

	 	(d)	The arbitrators shall not add to, detract from, or alter the provisions of the Agreement of any applicable law or rule of civil procedure; 

  

 Page 37 of 56 

	 	(e)	The arbitrators my not award or assess punitive damages against either party; 

  

	 	(f)	The arbitrators may require either party to specifically perform its obligations under this Agreement; and 

  

	 	(g)	Each party shall bear its own costs and expenses of the arbitration and one-half (1/2) of the fees and costs of the arbitrators, subject to the power of the arbitrators, in
their sole discretion, to award all such reasonable costs, expenses and fees, including, without limitation, attorney’s fees, to the prevailing party. 

  

					
	ARTICLE 18	  	MISCELLANEOUS	  	

 18.1 Choice of Law. This Agreement shall be governed by and interpreted in accordance with
the laws of Minnesota, without regard to its conflict of laws provisions and the courts of Minnesota shall have exclusive jurisdiction over all matters arising out of this agreement. 
 18.2 Notices. 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 Supplier:	  	General Manager	  	
				
		 		  	Special Fine Chemicals	  	
				
		 		  	Lonza Inc.	  	
				
		 		  	Corporate Headquarters	  	
				
		 		  	17-17 Route 208	  	
				
		 		  	Fairlawn, New Jersey 07410-2821	  	
				
		 		  	Fax: (201)794-2695	  	

  

 Page 38 of 56 

							
				
		 	If to ORPHAN:	  	Harry Cook	  	
				
		 		  	Orphan Medical, Inc. 3911	  	
				
		 		  	Ridgedale Drive Minnetonka,	  	
				
		 		  	Minnesota 55305	  	
				
		 		  	Fax: (612)541-9209	  	

 with a copy to each President’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. 
 18.3 Severabilitv. 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. 
 18.4 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. 
 18.5 Assignment.
Neither party may assign this Agreement without the prior written consent of the other party except that either ORPHAN or Supplier may assign this Agreement (a) to an Affiliate or (b) in connection with the sale or transfer of all or
substantially all of the assets of such party or the division of such party manufacturing or marketing of the Drug, as the case may be, 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 

  

 Page 39 of 56 

 
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 Supplier and ORPHAN respectively. 
 18.6
Waiver. No course of dealing between Supplier 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. 
 18.7 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. 
 18.8 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. 
 18.9 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. 
 18.10 Diligence. Each party agrees to use due diligence in preparing full
disclosure of relevant information, in reviewing information when available, and in committing decisions necessary to enable completion of Stages within target timeframes. 
  

 Page 40 of 56 

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

									
	SUPPLIER	  		 	ORPHAN MEDICAL, INC.
					
	By:	  	 /s/ Peter Pollak
	  		 	By:	 	 /s/ Bert Spilker

	Print:	  	Peter Pollak	  		 	Print:	 	Bert Spilker
	Its:	  	VP/GM Fine Chemicals	  		 	Its:	 	President
	Date:	  	November 8, 1996	  		 	Date:	 	November 6, 1996

  

 Page 41 of 56 

 APPENDIX A 
 GHB TECHNOLOGY TRANSFER/DEVELOPMENT PROGRAM 
  

			
	 Stage A, Part I: Technology Transfer/Development
	  	Cost/Timeline
	  
 1. Review available data associated
with previous development, testing and manufacture.
	  	
	  
 2. Identification &
Qualification of intermediate suppliers, order and test for release raw materials.!*)
	  
	  
 3. Evaluation of quality of GBL
required for production of GHB with defined specifications.
	  
	  
 4. Cross-Validation of analytical
methods will be completed using the current Lonza standard operating procedure for cross-validation of analytical methods.
	  
	  
 5. Make recommendations and conduct
development testing to determine if improvements can be made in yield, waste reduction, etc. and prepare a Process Development Report
	  
	  
 6. Complete IQ, OQ & PQ.
Prepare validation protocol and confirm manufacturing method (through production of one lot, prep, of Process Validation Report.(2)
	  
	  
 7. Comparability of the impurity
profile and specifications for Batch 1 to the drug manufactured by Cytec Industries, Inc. The purpose is to ensure that the toxicology clinical data collected through use of Cytec manufactured drug are not jeopardized. Reconfirm solid state drug
substance form through DSC, X-ray, particle size and range of variation, hygroscopicity and clarity in solution.
	  
	  
 8. Write Stage A, Part I Completion
Report. (See Appendix B, “Reporting)
	  	
	  
 Stage A, Part
II
	  	$150,000
	  
 9. Manufacture 2 additional lots per
the Validation Protocol, update the Process Validation Report and reconfirm solid state drug substance form as in 6 above.
	  	  
 $ 35,000 5 to 6 months

	  
 10. Write Environmental Assessment
Report
	  
	  
 11. Assist in the preparation of the
Drug Substance NDA CMC Section and/or DMF as requested by Orphan. Lonza will document efforts/data from this Technology Transfer/Development Program in a format acceptable for NDA submission.
	  
	  
 12. Write Stage A, Part II Completion
Report (See Appendix B, “Reporting”)
	  
	  
 TOTAL This price is cost without profit
to Lonza. The price is a fixed sum and is a cost cap as will be defined in the contract being negotiated.
	  

	1)	Raw Material Specifications and Acceptance Criteria—Transfer and document acceptance testing methods and specifications for ORPHAN review and approval. Evaluate
currently approved vendors. If supplier of critical raw materials are not previously audited, conduct audits. Audit reports on vendors of critical raw materials will be provided to ORPHAN for review. DMF Reference Authorization letters from
suppliers of any commercial combination excipients and activities must be obtained and included in the submission. Certificates of Analysis and batch numbers for raw materials will be maintained. 

	2)	Process Validation Protocol—The Validation Protocol must be mutually approved. ORPHAN will be notified two weeks in advance of the dates for manufacture of any
validation batch in order that an ORPHAN representative can be present. The Drug will be manufactured in compliance with cGMPs and applicable regulatory standards for manufacturing drugs for use as clinical trial material or for commercial use.
Three Validation Batches will be manufactured in a mutually approved reactor. The final decision regarding the timing for manufacture of the three validation batches and their intended use will be mutually decided. 

  

 Page 42 of 56 

 APPENDIX A (continued) 
 A pharmaceutically acceptable batch record will be developed for production of the ORPHAN bulk pharmaceutical compound that meets or exceeds current
pharmaceutical industry and cGMP standards and copy said batch record will be provided to ORPHAN for its approval prior to use. 
 ORPHAN will
be notified two (2) weeks in advance of the dates for manufacture of validation batches in order that an ORPHAN representative can be present for the manufacture, if desired. 

	3)	ORPHAN will provide GHB reference standard material for use in the Development Program. 

	4)	The scope of this Development Program does not include new analytical methods development. Supplier agrees to accept the Cytec analytical methods for GHB and impurity testing for
cross- validation. Methods will be provided for all required tests unless mutual agreement is otherwise reached. 

  

			
	Stage B Final Process Re-validation at Larger Scale for Commercial Use	 	
	  
 1. Manufacture additional re-validation lots and write final Process Validation
Report, and final Cleaning Report (re-validation efforts may be required in transferring production to larger scale reactors)
	 	
	  
 2. Demonstrated clean out of operating vessels to cGMP standards (pre and post),
write Cleaning Validation report.
	 
	  
 3. Prepare NDA CMC update to include stability report.
	 
	  
 4. Prepare for FDA pre-approval inspection.
	 
	  
 5. Provide responses to FDA NDA CMC questions.
	 
	  
 6. Write a Stage B Completion Report.
	 

  

 Page 43 of 56 

 APPENDIX B 
 REPORTING REQUIREMENTS 
 The following items represent minimum content requirements. Actual reports should include
all information that is relevant in assessing the status of the development program and in completing documentation that is required by regulatory agencies. Any documentation that is required for preparation of the CMC Section, Process Certification
Report, Process Validation Report, etc. should not be rewritten as part of a stage completion report. 
 Progress reports on development will be discussed
with ORPHAN on an agreed upon schedule depending on the level of activity at any point in time. Decisions, issues, and significant findings will be documented for review and concurrence. Reasonable efforts will be used to take corrective actions and
conduct such additional work as is necessary to achieve the Required Specifications as outlined in Appendix C. The parties will mutually agree upon the time impact of any changes. Additional resources will be committed to conduct of the GHB
Technology Transfer/Development Program if necessary to ensure completion of the project as close to the overall time frame specified as possible. 
 STAGE A: Technology Transfer/Development 
 COMPLETION REPORT 
 A “Stage A Completion Report” will contain the data and analytical results from all processing and testing conducted to include the manufacture of one
(1) Validation Batch. This report will also include a copy of the following for ORPHAN review and approval if approval has not already been obtained: 
  

	1)	Manufacturing Validation Protocol and Report 

  

			
	 a)      Process range
	  	
		
	 •     Temperature, atmospheric pressure definitions
	  	 •     Concentration

		
	 •     Charge definitions
	  	 •     Centrifigation/Isolation

		
	 •     Time definitions (include allow, holding time)
	  	 •     Equip validation as req (IQ, PQ, OQ)

		
	 •     Yields, purity
	  	 •     Cleaning documentation

		
	 •     Solvents, reagents
	  	 •     Packaging Procedures

	
	 •     Raw Materials (Names and amounts of all substances used, including tests and specifications,
precautions for storage, U.S. pharmacopeia specifications)

		
	 •     Alternative process description, if available
	  	
		
	 b)      Allowable process parameters
	  	

  

	2)	Re-validation of analytical methods, tests and specifications (to include validation documentation to support all analytical methods) 

  

			
		
	 •     Identity tests
	  	 •     Sodium

		
	 •     Impurities testing
	  	 •     Volatiles

		
	 •     % moisture
	  	 •     Assay

		
	 •     Heavy metals
	  	 •     Identity versus standard

  

 Page 44 of 56 

	3)	Additional Testing 

  

	 	•	 	 pH 

  

	 	•	 	 Bulk density 

  

	 	•	 	 Dissolution rate 

  

	 	•	 	 Solubility 

  

	 	•	 	 Other (residual solvents, etc.) 

  

	4)	Raw Material Vendor and Specs, and Final Product Specifications and Methods Manual 

  

	5)	Copies of executed Batch Record(s) and Certificate(s) of Analysis 

  

	6)	Stability Report (See—‘Requirements For Stability Studies’) 

  

	7)	Description of manufacturing facilities, personnel, Standard Operating Procedures, and appropriate supporting validation documentation as required for the NDA.

  

	 	•	 	 Training 

  

	 	•	 	 Util and Support Systems 

  

	 	•	 	 Environmental Standards 

  

	 	•	 	 Process Conditions 

  

	8)	Update estimates for cost of goods 

  

 Page 45 of 56 

 STAGE B: Final Process Validation and Preparation for Commercial Launch 
 COMPLETION REPORT 
  

	1)	Mutually approved Bulk Drug Manufacturer Contract Release Specifications (ID, Assay, Impurity, Appearance, and Quantitative Component Assessment. Labels, packaging batch records and
certificates of analysis will be verified prior to release.). 

  

	2)	Subsequent to FDA approval, ORPHAN will be notified for prior approval of any updates made through standard operating “Change Control” procedures. Changes requiring
notification for approval will include and not be limited to the following: 

  

	 	A)	Changes in raw material supplies and suppliers 

  

	 	B)	Process changes 

  

	 	C)	Equipment changes 

  

	 	D)	Packaging component changes 

  

 Page 46 of 56 

 APPENDIX C 
 REQUIRED DRUG SPECIFICATIONS 
  

					
	Expiration Storage	  	36 months at 25°C with 60% RH (60 months desired)
		
	Conditions	  	25°C with 60% RH - double polypropylene bags in a fiberpak ( dessicants required and not to be in contact with Drug)
		
	Appearance	  	White free flowing powder
		
	Heavy Metals	  	20 ppm maximum {By USP} {PP} {BS}
		
	Moisture	  	0.05% maximum (GHB’s hygroscopic and must be kept as dry as possible)
		
	Residual Methanol	  	400 ppm maximum
		
	Identity Impurity	  	Match FT/IR of reference {PP} {BS}
			
	Profile {PP} {BS}	  		 	
			
		  	No unknown impurity greater than 0.05%	 	{over %}
			
		  	Succinic Acid	 	<0.05% {% wt}
			
		  	Succinic Anhydride	 	<0.05% {% wt}
			
		  	Succinic Acid, Sodium Salt	 	<0.05% {% wt}
			
		  	Methyl-gamma hydroxy-butyric acid	 	<0.05% {% wt}
			
		  	1,4-butanediol	 	<0.05% {% wt}
			
		  	gamma-Butyrolactone	 	<0.05% {% wt}
			
		  	Sodium hydroxide	 	<0.05% {% wt}
			
		  	Sodium carbonate	 	<0.05% {% wt}
			
		  	Total of known impurities not to exceed	 	0.5% {% wt}
		
	 Particle Size
  
	  	To be mutually established
		
	Contractual Release Specifications:	  	Some specification requirements for release of the Drug will be more restrictive than those approved via the NDA to ensure Drug adequacy upon analytical retesting or anticipated
degradation over time. Release specifications will be mutually agreed upon based on the findings of the “Technology Transfer/Development Program” and upon the FDA approved specifications.
		
	Assay	  	99-102% {wt % }{PP} {BS}

  

 Page 47 of 56 

 APPENDIX D 
 REQUIREMENTS FOR STABILITY STUDIES 
 REQUIREMENTS FOR DEVELOPMENT PROGRAM STABILITY STUDIES

  

	I.	Stability Protocol 

 A proposed stability study matrix and
protocol(s) will be provided for joint review to ensure development of the best stability study strategy. Stability study protocols will be approved by ORPHAN. The stability study program will: 
  

	 	A)	meet requirements of the ‘Stability Testing of New Drug Substances and Products’ endorsed by the ICH Steering Committee. 

  

	 	B)	meet stability requirements for support to Stage II, III and IV clinical studies and requirements for support to on-going commercial production of bulk drug for pharmaceutical
purposes. 

  

	II.	Reporting 

 Written stability study reports will be
provided which include, but are not limited to, the following information for all Drug batches used for stability. 
  

	 	A)	Certificate of analysis (include batch size, date of manufacture) 

  

	 	B)	Batch numbers 

  

	 	C)	Stability study results until there are two (2) consecutive failures including both initial and data at the designated time points for analysis with references to analytical
procedures used. (Additionally, tests will be conducted immediately before the NDA filing.) 

 Additionally, the following
information will be provided upon request for all Drug batches placed on stability prior to FDA approval. 
  

	 	D)	Raw material listing for all batches and a description of differences, if any 

  

	 	E)	Lot number(s) of raw materials used in each batch 

  

	 	F)	Sampling plan 

  

	 	G)	Manufacturing process 

  

	 	H)	Use of Batches 

 Other stability requirements in the
Technology Transfer/Development Program. 
 I) Stability study results 
  

	 	a)	Suitability and specificity of stability indicating assay methods 

  

	 	b)	Degradation products and pathways—Identification and quantitation of degradents. (If the degradants become regulatorily significant, Supplier agrees to negotiate time and cost,
isolation, and preparation of samples for toxicity testing which will be conducted by ORPHAN. Descriptions of any known toxicological properties associated with identified degradents will be provided.) 

  

	 	c)	Details on storage containers 

  

	 	d)	Discussion of stability results 

  

	 	J)	Solubility profiles in an aqueous medium 

  

	 	K)	Reports on stability indicating parameter(s). 

  

	 	L)	Samples to be retained from stability batches until 1 year past expiration (Note: Retention of samples from clinical trial batches will meet the more rigorous requirements of FDA.)
Adequate samples to be retained to enable full compendial testing. 

  

	III.	Packaging and Storage Conditions 

 A stability study matrix
will be mutually developed which includes study of the following factors: 
  

	 	A)	Samples will be placed on storage in mutually agreed upon packaging. Double ply bags to be of same composition as those used by Cytec Industries (possibly thicker) with dessicant
between bags. 

  

	 	B)	Storage conditions for solid drug will include the environments and testing frequences noted on the Proposed Development Program Stability Plan. 

  

	 	(C)	Three (3) lots of GHB bulk drug substance will be packaged in five (5) gram aliquots and stored in double ply bags of the same composition as used by Cytec which have been
or exceed Class 100 requirements. 

  

 Page 48 of 56 

 The samples will be twist-tied and placed in a fiber box with a fiber cover. 

 

	IV.	Extent of Studies and Methods of Testing 

  

	 	A)	There are 3 lots of Drug to be tested. 

  

	 	B)	Cytec developed methods will be used for analytical testing. 

  

	 	C)	The method for moisture analysis will be a validated potentiometric Karl Fischer. 

  

	 	D)	Interval data will be provided within fifteen (15) working days of the sample pull date, and a stability report will be provided to support the NDA submission and a final
stability report will be provided. 

 REQUIREMENTS FOR PRODUCTION STABILITY STUDIES 
  

	I.	A Production Stability Protocol to be jointly approved. The protocol will meet requirements of the “Stability Testing of New Drug Substances and Products’ endorsed by the
ICH Steering Committee. 

  

	II.	Reporting 

 Written stability study reports will be
provided which include, but are not limited to, the following information for all Drug batches used for stability. 
  

	 	A)	Certificate of analysis (include batch size, date of manufacture) 

  

	 	B)	Batch numbers 

  

	 	C)	Stability study results past two (2) consecutive failures or to 60 months, whichever is shortest, including both initial and data at the designated time points for analysis
with references to analytical procedures used. 

  

 Page 49 of 56 

 PROPOSED DEVELOPMENT PROGRAM STABILITY PLAN 
 REQUIRED TESTS, STORAGE CONDITIONS AND FREQUENCY 
 STRENGTH NA 
  

					
	PRODUCT:Gamma Hydroxybutyrate Bulk	  		  	
		  		  	CONTAINER TYPE & PART # Representative of Bulk Storage
	LOT#                                 Stability start
date         	  		  	CLOSURE TYPE & PART # Representative of Bulk Storage
		  		  	Batch Size
                                        
                                       
 
		  	Date of Manufacture                                 
                                       
 

  

																																									
	 Required Tests/
Method
	  	 Specifications
	  	 Storage Condition
	  	0	  	1	  	2	  	3	  	4	  	5	  	6	  	7	  	8	  	9	  	10	  	11	  	12	  	18	  	24	  	36	  	48	  	60.
	 Appearance
	  	white to off-white	  	CRT(25±2°/60%±5RH)	  	X	  	XC	  	XC	  	X	  		  		  	X	  		  		  	X	  		  		  	X	  	X	  	X	  	X	  	X	  	X
	 Visual
	  	free-flowing powder	  	(40°/C75%RH± 5%RH)	  	X	  	X	  	X	  	X	  		  		  	X	  		  		  		  		  		  		  		  		  		  		  	
		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  	
		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Assay
	  	98.0% to 102.0%	  	CRT(25±2°/60%±5RH)	  	X	  	XC	  	XC	  	X	  		  		  	X	  		  		  	X	  		  		  	X	  	X	  	X	  	X	  	X	  	X
	Potentiometric Titration	  		  	(40°/C75%RH+ 5%RH)	  	X	  	X	  	X	  	X	  		  		  	X	  		  		  		  		  		  		  		  		  		  		  	
		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  	
		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Melting Point
	  	146-147°C	  	CRT(25±2°/60%+5RH)	  	X	  	XC	  	XC	  	X	  		  		  	X	  		  		  	X	  		  		  	X	  	X	  	X	  	X	  	X	  	X
		  		  	(40°/C75%RH± 5%RH)	  	X	  	X	  	X	  	X	  		  		  	X	  		  		  		  		  		  		  		  		  		  		  	
		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Moisture
	  	TBD Report Value	  	CRT(25±2°/60%+5RH)	  	X	  	XC	  	XC	  	X	  		  		  	X	  		  		  	X	  		  		  	X	  	X	  	X	  	X	  	X	  	X
	 Karl Fischer
	  		  	(40°/C75%RH± 5%RH)	  	X	  	X	  	X	  	X	  		  		  	X	  		  		  		  		  		  		  		  		  		  		  	
		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  	
	 Degradation
	  	TBD Report Value	  	CRT(25±2°/60%±5RH)	  	X	  	XC	  	XC	  	X	  		  		  	X	  		  		  	X	  		  		  	X	  	X	  	X	  	X	  	X	  	X
	 Products
	  		  	(40°/C75%RH± 5%RH)	  	X	  	X	  	X	  	X	  		  		  	X	  		  		  		  		  		  		  		  		  		  		  	
	 Cytec Methods
	  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  		  	

 NOTE: 
  

	•	Samples will be packed for storage using two package configurations. The secondary package configuration for greater moisture vapor transmission rate barrier will be noted as
contingency 2 (C2). 

	•	The primary package configuration noted as X will be tested at all indicated timepoints. Timepoints noted with XC1 are primary package contingency test samples for analysis only
if the corresponding X sample fails stability. 

  

 Page 50 of 56 

 PRODUCTION STABILITY STUDY PLAN 
  

															
	  	  	TIME IN MONTHS	  	 BATCHES

	 STORAGE CONDITION
	  	0	  	12	  	24	  	36	  	48	  	60	  	 Description

	 25°C±2°C/60%RH±5%
	  	X	  	X	  	X	  	X	  	X	  	X	  	Production stability as required by FDA.

 Container: Double polypropylene bags in fiberpak. Desiccants may be required. Final specifications to be
determined. 
 Stability studies will be initiated for 1 batch per campaign. 
  

 Page 51 of 56 

 APPENDIX E 
 CONFIDENTIAL DISCLOSURE AGREEMENT FOR INFORMATION EXCHANGED 
 BETWEEN LONZA AND AN EXTERNAL SOURCE 

This Agreement is made and entered into this day          of
                     19    , by and between Lonza Inc., a company
                                        
located in Fair Lawn, New Jersey (“LONZA”) and
                                     a company (the
“POTENTIAL-COLLABORATOR”) located
in                                       
 . 
 A. LONZA and the “POTENTIAL-COLLABORATOR” have entered into certain discussions the purpose of which is to explore and consider the
possibilities of a business relationship between, or other transaction involving, LONZA and the “POTENTIAL-COLLABORATOR”. 
 B. In this connection
with and in furtherance of this possible business relationship, it is anticipated that both of the undersigned parties (i.e. LONZA and the POTENTIAL-COLLABORATOR) at various times will disclose (the “DISCLOSING PARTY”) and receive (the
“RECEIVING PARTY”) certain information with each other which the undersigned parties consider proprietary and confidential. 
 The undersigned
RECEIVING PARTY in consideration for the use of certain information, knowledge, software, data and/or know-how (hereinafter called “INFORMATION”) related to the possible contract manufacturing of Sodium Gamma Hydroxybutyric Acid made
available to it by DISCLOSING PARTY hereby agrees as follows: 
  

	 	1.	RECEIVING PARTY agrees to keep in confidence and not to use the INFORMATION for its commercial benefit (except for technical and economic evaluation) for a period of five
(5) years from the date hereof. 

  

	 	2.	RECEIVING PARTY further agrees that it shall keep in confidence and not disclose any part of INFORMATION to a third party for a period of five (5) years from the date hereof.

  

	 	3.	Obligations of RECEIVING PARTY shall not apply to any information, knowledge, software, data and/or know-how which: 

  

	 	(a)	is or hereafter becomes a part of the public domain other than through a breach of this Agreement by RECEIVING PARTY; 

  

	 	(b)	RECEIVING PARTY can demonstrate was in its possession prior to the time of disclosure by DISCLOSING PARTY or can demonstrate was received by it from a third party who shall not have
received same from DISCLOSING PARTY 

  

	 	(c)	is required by a court or other governmental authority with competent jurisdiction to be disclosed in a non-confidential manner. 

  

	 	4.	Each party warrants and represents that the terms of this Agreement are not inconsistent with other contractual or legal obligations it may have, or with the policies or rules of
any institution or company with which it is associated. 

  

	 	5.	Each party agrees that, without the other party’s prior written consent, it will not disclose the existence of this Agreement or the fact that each party is evaluating the
Information. 

  

	 	6.	RECEIVING PARTY agrees to obligate its employees who shall have access to any portion of INFORMATION to protect the confidential and proprietary nature of INFORMATION. If either or
both parties are not interested in proceeding with the establishment of a manufacturing contract, or if a commercial arrangement is not entered into, each party shall return the Information of the other party to the other party, subject to retention
of one copy for archival purposes. 

  

	 	7.	This Agreement shall be governed by and interpreted in accordance with the laws of the State of Minnesota. 

  

			
	 Accepted and Agreed by Both Parties Lonza, Inc.
	  	 Third Party

		
	 Signature:
                                        
                                    
	  	Authorized Signature:
                                        
                
	 Name (Print):
                                        
                                
	  	Name (Print):
                                        
                                
	 Title:
                                        
                                        
      
	  	Title:
                                        
                                        
      
	 Date:
                                        
                                        
      
	  	Date:
                                        
                                        
      

  

 Page 52 of 56 

 APPENDIX F 
 Return Material Authorization (RMA) 
 For material return, Lonza operates a paperless, computer-supported system. The following
procedure will be followed: 
 1. Orphan can request return authorization by calling Lonza at 1-800-777-1875 and requesting the “Customer Service
Department”. 
 2. Lonza will issue material return authorization number generated by its quality performance database according to standard work
practices in effect within Lonza at that time. 
 3. Lonza 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, Lonza will send a confirmation of this to the
designated contact at Orphan. 
  

 Page 53 of 56 

 APPENDIX F Return Material Authorization Form (continued) 
 PROCEDURE FOR RETURNED MATERIALS 
  

			
	1.0	 	This procedure is to describe the system for accepting customer returned goods or return of material for salvaging.
		
	2.0	 	Customer return calls for regulated products will be forwarded to the Quality Control Department either through direct customer contact or through communications with Shipping, Receiving, or the
Manufacturing Department.
		
	2.1	 	The Quality Control then reviews verbal return policy and forwards a preprinted Notice of Authorization to Return Form to the customer.
		
	2.2	 	The customer will fill in the required information and forward the form to the Quality Control Department. The Quality Control Department will circulate the return goods form to Shipping &
Receiving, Manufacturing, Purchasing, Accounting, and the Warehouse for information on return.
		
	2.3	 	Upon receipt of the returned goods form, the material is authorized for return. The GMP Department will communicate authorization to customer approving the return.
		
	2.4	 	Once the material is physically returned it shall be labeled “Hold Pending Investigation” by the Quality Control Department
		
	2.5	 	The disposition of the returned goods will be indicated on a Returned Goods Form by the Quality Control Department.
		
	2.6	 	A Returned Goods Form will be circulated for approval by the Plant Manager, Project Engineer, and Quality Control Manager, indicating disposition of material.
		
	2.7	 	Salvaging or rework shall be within the GMP guidelines and meet DMF and/or NDA considerations.

 Approved: 
  

											
	 Production Manager
	 	  
	 		  	Date	  	  
	  	
						
	 Quality Control
	 	  
	 		  	Date	  	  
	  	
						
	 Plant Manager
	 	  
	 		  	Date	  	  
	  	

  

 Page 54 of 56 

 APPENDIX G 
 CHANGE CONTROL REQUEST 
 Change Control Number
                     
 Date of Request:
                     
 Name and address of person
making request: 
  

													
		 		  	Requested by:	 	  
	  		  	
		 		  	Company Name:	 	  
	  		  	
		 		  	Company address:	 	  
	  		  	
		 		  	  
	  		  	
		 		  	  
	  		  	
		 		  	  
	  		  	
		 		  	  
	  		  	

													
	Product/Process Affected:	 	  

													
	Requested change:	 	  

	  

	  

	  

	  

											
	  
	  		  	
	Reason for change:	  		  	
	  

	  

	  

											
	  
	  		  	

  

	 ̈	Change Request approved 

  

	 ̈	Change Request not approved 

  

							
	 Approved Signatures:
	 		  		  	
	  
	 		  	  
	  	
	Orphan Medical Regulatory Affairs	 		  	Date	  	
	  
	 		  	  
	  	
	Orphan Medical QA	 		  	Date	  	
	  
	 		  	  
	  	
	Orphan Medical Director of New Medicine	 		  	Date	  	
	  
	 		  	  
	  	
	Contract Vendor	 		  	Date	  	

  

 Page 55 of 56 

 APPENDIX H 
 MAXIMUM DRUG PRICE ESTIMATES 
 according to Section 7.4 
  

										
	 	  	Annual Requirement
100.000 kg and above	  	Annual Requirements
50.000-99.999 kg	  	Annual Requirements
10,000 kq-49.999 kg
	 Max. price of compound:
	  	$	25/kg	  	$	30-40/kg	  	$	45-55/kg

 Assumptions: 
 50,000 kg minimum manufactured in a single campaign 
 Vessel size 1500 gallon 
 Cycle time 18 hours or less (including drying) 
 Material purchased within 30 days of release 
 Yield >=60% 
 Raw material quality to be same as that of Cytec (Supplier agrees to conduct development testing to confirm that a lower electronic grade of GBL will
yield Drug meeting the specifications listed in Appendix •) 
 At least 2 industrial campaigns completed prior to this volume manufacture
to allow optimization DEA classification 4 
 There is a remaining uncertainty of approx. $2/kg due to unknown waste treatment costs. If waste treatment
costs do not exceed $1/kg, the $25/kg figure would apply. This will be clear after the trial production run. 
 This price includes: 
 All raw materials, processing, depreciation, overheads, profit, packaging 
 Scale up from intermediate size reactors for launch quantities to 1500 gallon or larger vessels 
 DMF (or
equivalent) modifications required 
 Delivery to US destination 
 Reasonable regulatory support to Orphan 
 Ongoing process improvement efforts with benefit sharing with
Orphan 
 Note: 
 The price ranges noted
above will be reduced if improvements are made to the process to achieve above the current 60% yield. 
 “Within range” price
variation partially depends upon reduction in waste stream treatment costs, allocation of validation work, and degree of process work completed. 
 Price for development batches includes use of GBL which meet current Cytec specifications for GBL. 
 The price ranges make the
assumption that butyrolactone is: 
  

	 	(i)	readily available at a quality sufficiently pure to meet specifications of the final product 

  

	 	(ii)	the price of this quality does not exceed that of the electronics grade butyrolactone. Current butyrolactone electronics grade is estimated to cost $4/kg. 

 

 Page 56 of 56Amendment No. 1 to Sodium Gamma Hydroxybutyrate Development and Supply Agreement

 EXHIBIT 10.32 
 Amendment No. 1 
 to 
 Sodium Gamma Hydroxybutyrate 
 Development and Supply Agreement 
 Amendment No. 1, dated February 7, 2005 (this “Amendment”), between Orphan Medical, Inc., a Delaware corporation
(“Orphan”), and Lonza, Inc., a New York corporation (“Supplier”). 
 Recitals 
 1. Orphan and Supplier are parties to a Sodium Gamma Hydroxybutyrate Development and Supply Agreement, dated November 6, 1996 (the
“Agreement”). 
 2. Orphan and Supplier wish to extend the term of the Agreement and to amend certain provisions of the Agreement.

 3. Each capitalized term used in this Amendment and not defined herein shall have the meaning ascribed to it in the Agreement. 

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Orphan and Supplier agree as follows:

 1. Acknowledgments. Orphan and Supplier acknowledge and agree that the initial Contract Year of the Agreement commenced as of
August 1, 2002, and that each Contract Year consists of the twelve-month period commencing on August 1 and extending through the following July 31. 
 2. Amendments to the Agreement. Effective as of the date of this Amendment, the Agreement shall be amended and modified as follows: 
 a. Section 14.1 of the Agreement shall be amended in its entirety and shall hereafter read as follows: 
 14.1. Unless terminated pursuant to Article 15, the initial term of this Agreement shall commence on the Effective Date and end upon expiration of the third (3rd) Contract Year. Following the expiration of the
initial term and any renewal terms, this Agreement shall be automatically extended for an additional term of three (3) Contract Years unless either party delivers a written notice of termination at least eighteen (18) months prior to the
expiration of the initial or any renewal term. All references herein to the “term of the Agreement” shall be deemed to include both the initial and any renewal terms. 
 b. Appendix C {Required Drug Specifications} of the Agreement shall be amended in its entirety and shall be replaced by the Appendix C attached to this
Amendment. 
  

 c. Section 18.2 of the Agreement is amended to replace the address for Orphan set forth in
Section 18.2 with the following address: 
 Orphan Medical, Inc. 
 13911 Ridgedale Drive 
 Suite 250

 Minnetonka, MN 55305 
 Attn:
Vice President of Regulatory Affairs 
 d. Appendix H {Quality Agreement}. The Quality Agreement herein attached is incorporated within the
overall Development and Supply Agreement. 
 3. Ratification. As modified by this Amendment, the Agreement is hereby ratified and
confirmed in all respects. 
 IN WITNESS WHEREOF, each of Orphan and Supplier has caused this Amendment to be executed by a duly authorized
representative as of the date set forth in the first paragraph. 
  

					
	LONZA, INC.	  		 	ORPHAN MEDICAL, INC.
			
	 /s/ Simon Edwards Feb 7, 2005
	  		 	 /s/ John Howell Bullion

	By (print): Simon Edwards	  		 	By: John Howell Bullion
	Its VP Sales & Business Development	  		 	Its Chief Executive Officer

 APPENDIX C 
  

					
	Orphan Medical, Inc.	 		 	Specification: BDS-XYR-0400 Rev 13
	Bulk Drug Substance Specification	 		 	Effective Date: 02/16/05
		 		 	Supersede Date: 09/10/03
		 		 	             Page: 1 of 3

  

			
	Bulk Drug Substance:	 	Sodium Oxybate Powder
		
	RetestDate*:	 	56 months
		
	Storage Conditions:	 	15-30°C in packaging specified as follows
	
	Packaging Requirements:

  

			
	Closure:	 	Electrogalvanized Steel Lock Ring
		 	Cover: 24 Gauge Varnish/Precoated
		
	Chime Bands:	 	Electrogalvanized Steel Top and Bottom
		
	Gasket:	 	Urethane
		
	Supplier:	 	Grief Brothers or Berenfield Containers

  

			
	Container:	 	Polyethylene Bag
		 	Semi-Transparent Plastic Film
		 	EF603GU LDPE (95%), 100323 Anti-Stat (5%)
		 	0.004” thick, 36”wX68”L (± 1”)
		 	Stock #595131
		
	Supplier:	 	Target Industries

  

			
	Container:	 	Foil-lined Al-Fi
		 	44 gallons
		 	Leverpak, M4400-E7K3
		
	Supplier:	 	Grief Brothers, Lombard, IL

  

			
	Desiccant:	 	Desiccant Bag (Activated Clay)
		 	3767 Dessipak, 2 x 132 g
		 	Absorption Capacity: 16.00 wt/wt
		 	Residual Moisture : 3.00 wt/wt
		
	Supplier:	 	Sud-Chemie Performance Packaging, Belen, NM

 Each drum should be packaged with approximately 75 kg of Sodium Oxybate with a minimum of two desiccant bags
placed between the polyethylene bags and labeled with an approved label. 

 APPENDIX C 
  

					
	Orphan Medical, Inc.	 		 	Specification: BDS-XYR-0400 Rev 13
	Bulk Drug Substance Specification	 		 	Effective Date: 02/16/05 Supersede
		 		 	Supersede Date: 09/10/03
		 		 	Date: 09/10/03 Page:2 of 3

 Sampling: 
 Follow SOP-QA-0095 for sampling process. The sample is divided into a testing sample and a lOOg retain sample. 
 * Denotes Minimum Retest
Requirements 
  

					
	 Test
	 	 Specification
	 	 Method

	*Appearance	 	White to off-white powder	 	Lonza-1006542
	*Assay - HPLC	 	98.0-102.0% (anhydrous basis)	 	Lonza-SXB-F002
	*Impurities - Total	 	NMT 1.0%	 	Lonza-SXB-F003 (HPLC)
	 *Impurities - Specified
 GBL-RRT1.6
GHBB-RRT4.3
	 	 NMT 0.05%
 NMT 0.05%
	 	Lonza-SXB-F003 (HPLC)
	*Impurities - Unspecified	 	md. Impurities NMT 0.05%	 	Lonza-SXB-F003 (HPLC)
	*Water Content	 	NMT 0.5% (w/w)	 	Lonza-1006542 USP<921>
	Residual Solvents - GC	 	Methanol NMT 1000 ppm	 	Lonza-SXB-FOOl
	Identification (HPLC)	 	0.95-1.05 RT of Reference Standard	 	Lonza-SXB-F002
	Identification (IR)	 	Matches Reference Spectrum	 	Lonza-1006542 USP<197M>
	Heavy Metals	 	NMT 20 ppm	 	Lonza-1006542, USP<231> Method E

 Contractual Release Specifications: 

 APPENDIX C 
  

					
	Orphan Medical, Inc.	 		 	Specification: BDS-XYR-0400 Rev 13
	Bulk Drug Substance Specification	 		 	Effective Date: 02/16/05
		 		 	Supersede Date: 09/10/03
		 		 	                    Page: 3 of 3

 Some specification requirements for release of the bulk drug substance will be more restrictive than those
approved in the NDA to ensure drug adequacy upon analytical retesting or anticipated degradation over time. Sodium Oxybate Powder must meet BP/EP/EC/Japan standards. Orphan Medical Quality Assurance will issue a certificate of analysis as the final
release for the bulk drug substance. 
 Approval: 
 Original Signatures on File 
  

			
	Regulatory Affairs:	 	Lisa Ylitalo 02/16/05
		
	Quality Assurance:	 	Kristine Goman 02/16/05

 Vendor Code: 17 

 APPENDIX H 
 QUALITY AGREEMENT 
 BY AND BETWEEN 
 ORPHAN MEDICAL, INC. 
 13911 Ridgedale
Drive, Suite 250 
 Minnetonka, Minnesota 55305 
 (hereafter called “ORPHAN”) 
 Approved by: Orphan Medical, Inc. 
  

					
	By:	 	 Illegible
	 	
			
	Date:	 	 April 25, 2005
	 	

 And 
 LONZA, INC. 
 900 River Road 
 Conshohocken, PA 19428 
 (hereafter called “LONZA”) 
 Approved by: Lonza, Inc. 
  

					
	By:	 	 Illegible
	 	
			
	Date:	 	 April
	 	

 APPENDIX H 
 TABLE OF CONTENTS 
  

							
	  1.	  	    QUALITY AGREEMENT	  	1
				
		  	  1.1	  	Purpose	  	1
		  	  1.2	  	Relationship to Supply Agreement	  	1
			
	  2.	  	    PRODUCT	  	1
			
	  3.	  	    ADMINISTRATIVE INFORMATION	  	1
				
		  	  3.1	  	ORPHAN Contact Names	  	1
		  	  3.2	  	LONZA Contact Names	  	1
			
	  4.	  	    TERM OF AGREEMENT	  	1
			
	  5.	  	    MANUFACTURING GMP COMPLIANCE	  	2
				
		  	  5.1	  	General	  	2
		  	  5.2	  	Premises	  	2
		  	  5.3	  	GMP Guidelines	  	2
		  	  5.4	  	Materials	  	2
		  	  5.5	  	Materials procured by ORPHAN	  	3
		  	  5.6	  	Materials Provided by ORPHAN for LONZA	  	3
		  	  5.7	  	Master Production Records	  	3
		  	  5.8	  	Standard Operating Procedures	  	3
		  	  5.9	  	Methods Validation	  	4
		  	  5.10	  	    Batch Numbers	  	4
		  	  5.11	  	    Dates of Manufacture and Expiration	  	4
		  	  5.12	  	    Manufacturing and Equipment Data	  	4
		  	  5.13	  	    Storage and Shipment	  	5
			
	  6.	  	    QUALITY CONTROL	  	5
				
		  	  6.1	  	General	  	5
		  	  6.2	  	In-Process and Finished Product Testing	  	5
		  	  6.3	  	Retain Samples	  	6
		  	  6.4	  	Routine Stability Program	  	6
		  	  6.5	  	Out-of-Specification (OOS) Investigations	  	6
		  	  6.6	  	Contract QC Laboratories	  	7
			
	  7.	  	    QUALITY ASSURANCE	  	7
				
		  	  7.1	  	Deviations and Investigations	  	7
		  	  7.2	  	Lot Disposition	  	7
		  	  7.3	  	Quality Assurance Certificate of Compliance/Analysis	  	7
		  	  7.4	  	Product Release	  	8
		  	  7.5	  	Product Complaints and Recalls	  	8

  

 Quality Agreement: Page (ii) 

 APPENDIX H 
  

							
		  	  7.6	  	Records Retention	  	9
		  	  7.7	  	Quality Assurance Presence in the Manufacturing Facility	  	9
			
	  8.	  	    REGULATORY COMPLIANCE	  	9
				
		  	  8.1	  	Regulatory Inspections	  	9
		  	  8.2	  	Regulatory Actions	  	10
		  	  8.3	  	Regulatory Affairs	  	10
		  	  8.4	  	Right to Audit	  	11
		  	  8.5	  	Audit Closeout	  	11
			
	  9.	  	    DISPUTE RESOLUTION	  	11
				
		  	  9.1	  	Non-Conformity Dispute	  	11
		  	  9.2	  	Other Disputes	  	12
			
	10.	  	    CHANGE MANAGEMENT	  	12
				
		  	10.1	  	Technical & cGMP Impact Assessment	  	12
			
	11.	  	    PRODUCT AND PROCESS VALIDATION	  	13
				
		  	11.1	  	Process Validation	  	13
		  	11.2	  	Cleaning Verification/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	  	14
				
		  	12.1	  	Annual Product Review	  	14
		  	12.2	  	Drug Listing	  	14

  

 Quality Agreement: Page (iii) 

 APPENDIX H 
 1. QUALITY AGREEMENT 
  

	1.1	Purpose 

  

	 	1.1.1	This agreement (this “Agreement”) defines the roles and responsibilities for the Quality Assurance and Regulatory Affairs Department (“Quality Assurance”) of
Lonza (LONZA) when providing services for Orphan Medical, Inc. (“ORPHAN”). 

  

	 	1.1.2	This Agreement also defines how ORPHAN Quality Assurance and the LONZA Quality Department will interact with each other. 

  

	1.2	Relationship to Supply Agreement 

  

	 	1.2.1	This Agreement shall be incorporated within and constitute a part of the Supply Agreement by and between LONZA and ORPHAN. 

  

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

 2. PRODUCT 
 The PRODUCT
prepared for ORPHAN by LONZA are described in Appendix I. 
 3. ADMINISTRATIVE INFORMATION 
  

	3.1	ORPHAN Contact Names  

 See Appendix
II. 
  

	3.2	LONZA Contact Names  

 See Appendix II.

 4. TERM OF AGREEMENT 
 This Quality
Agreement will expire with termination of the Supply Agreement (except for quality issues that may extend past the Supply Agreement; i.e. complaints). This Agreement can be modified as needed with the written approval of both parties. 
  

 Quality Agreement: Page l 

 APPENDIX H 
 5. MANUFACTURING GMP COMPLIANCE 
  

	5.1	General 

 The manufacturing operations for the
PRODUCT to be performed by LONZA are defined in the Supply Agreement. 
  

	5.2	Premises 

  

	 	5.2.1	LONZA will perform required operations for manufacturing activities at approved sites. 

  

	 	5.2.2	The premises and equipment used to manufacture the PRODUCT will be maintained according to current regulatory requirements and in accordance with the controlled documentation
approved by ORPHAN. 

  

	 	5.2.3	The manufacture of the PRODUCT 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 (i) applicable GMP guidelines and (ii) any conditions registered in the manufacturing authorization (NDA or investigational application). 

  

	 	5.2.4	LONZA will maintain controlled access to the premises. All visitors must sign in and are escorted during any visit to the areas of the premise. 

  

	5.3	GMP Guidelines 

 The principles detailed in the US
Current Good Manufacturing Practices (21 CFR 210 and 211) that govern the standards of manufacture for active pharmaceutical ingredients, as well as the product Guidance for Industry “Q7A Good Manufacturing Practice, Guidance for Active
Pharmaceutical Ingredients”, will govern (i) the standards of manufacture of the PRODUCT, (ii) the product specifications, (iii) any applicable product license, and (iv) the NDA/ANDA application, pharmacopoeia or formulatory
requirements. 
  

	5.4	Materials 

  

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

  

 Quality Agreement: Page 2 

 APPENDIX H 
  

	 	5.4.2	Prior to commercial use, all materials used in the PRODUCT shall meet ORPHAN’S requirements for production use. 

  

	5.5	Materials procured by LONZA 

  

	 	5.5.1	LONZA is responsible for auditing and qualifying vendors of actives and raw materials used in PRODUCT and will provide ORPHAN with a Certificate of Conformance statement for such
vendors when requested. LONZA shall audit raw material vendors/suppliers at regular intervals according to a defined program; and the documentation of the vendors/suppliers audited and date of audit shall be available for review by ORPHAN upon
request. 

  

	 	5.5.2	LONZA is responsible for ensuring that all materials and components procured by LONZA for use in the PRODUCT are in full compliance with the specifications listed in documentation
reviewed and approved by ORPHAN. Raw Materials are given a repeat test date upon the satisfactory completion of all initial testing. Repeat testing will be performed at defined time intervals to ensure the chemical and physical stability of the raw
materials unless ORPHAN provides an official expiration date. 

  

	 	5.5.3	LONZA is responsible for ensuring that all materials are labeled (for ID and current status) and stored properly, used correctly, appropriately tested upon receipt, and traceable to
the relevant Certificate of Analysis for the materials. 

  

	5.6	Materials Provided by ORPHAN for LONZA 

 ORPHAN is
responsible for ensuring that all materials and components provided by ORPHAN for use in the PRODUCT are in full compliance with the specifications registered, ORPHAN will provide LONZA with a Certificate of Compliance statement for the vendors that
ORPHAN is responsible for qualifying. 
  

	5.7	Master Production Records 

 LONZA may transcribe the
manufacturing information (i.e., bulk manufacturing) into its own fonnat and will obtain written approval from ORPHAN for major changes to the process before manufacturing. Additionally Lonza will provide Orphan with all changes to process
documentation, analytical methods, and specifications. Agreed upon changes to documentation will be handled as outlined by Change Management (see Section 10) of this agreement. 
  

 Quality Agreement: Page 3 

 APPENDIX H 
  

	5.8	Standard Operating Procedures 

 LONZA is responsible
for writing and approval of any SOPs required to manufacture, test, and store the PRODUCT in accordance with applicable GMP guidelines. 
  

	5.9	Methods Validation 

  

	 	5.9.1	ORPHAN is responsible for providing to LONZA approved copies of the most current and complete filed analytical methods relating to the PRODUCT for receipt of API and raw materials,
in-process product testing, product lot release, and drug and product stability and cleaning validation. 

  

	 	5.9.2	ORPHAN is responsible for providing to LONZA a Certification of Methods Validation for all critical methods practiced by LONZA (raw materials testing, in-process product testing,
product lot release, and drug and product stability) . The certifications should state, “The methods are appropriate for the intended purpose, are validated per relevant regulatory guidelines, and are readily available in case of a
regulatory inspection.” 

  

	5.10	Batch Numbers 

  

	 	5.10.1	The convention for LONZA “Batch Identification Number” (BIN) is as follows: 

  

	 	•	 	 1-4 SXB 

  

	 	•	 	 The first digit is the batch number sequence within a campaign. 

  

	 	•	 	 The second digit is year the batch was produced. 

  

	 	•	 	 The three letters of the BIN are the product designator (SXB: Sodium Oxybate). 

  

	5.11	Dates of Manufacture and Expiration 

  

	 	5.11.1	Date of Manufacture: LONZA will allocate the Date of Manufacture based on the date that drying is complete for the PRODUCT. 

  

	 	5.11.2	Expiration Date: LONZA 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 assigned. Changes to the expiration date will be handled by Change Management (see Section 10). 

  

 Quality Agreement: Page 4 

 APPENDIX H 
  

	5.12	Manufacturing and Equipment Data 

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

	5.13	Storage and Shipment 

  

	 	5.13.1	Storage: LONZA will store the PRODUCT under conditions approved by ORPHAN. LONZA will ensure that during storage before shipping of the PRODUCT, appropriate controls are in
place to insure that there is no interference, theft, product contamination, or mixture with any other product or materials. ORPHAN will provide details of any labeling requirements and storage and shipping conditions for the PRODUCT.

  

	 	5.13.2	Packaging and Labeling for Transit: The PRODUCT will be labeled and packaged for transit pursuant to instructions timely provided to LONZA in writing by ORPHAN and complying
with cGMP. 

  

	 	5.13.3	Segregation of PRODUCT: LONZA will maintain proper segregation of the PRODUCT according to systems reviewed and approved by ORPHAN. Different lots of a single product or
different types of product will not be mixed on a pallet. 

  

	 	5.13.4	Shipment of Product to ORPHAN: Only approved, finished (unless required by ORPHAN), labeled PRODUCT will be shipped by LONZA to ORPHAN. LONZA will not ship any product that
is unapproved or under quarantine without prior written approval from Orphan Medical, Inc. 

 6. QUALITY CONTROL 
  

	6.1	General 

 The testing of the PRODUCT is to be
performed by LONZA as defined in the PRODUCT Specification, see Appendix I. Following LONZA’s release of the PRODUCT to ORPHAN, the ORPHAN Quality Control Unit shall be responsible for approving or rejecting drug product manufactured,
processed, or packed by LONZA. 
  

	6.2	In-Process and Finished Product Testing 

  

	 	6.2.1	A method transfer of any validated test method developed by ORPHAN will be completed prior to product release by LONZA. 

  

 Quality Agreement: Page 5 

 APPENDIX H 
  

	 	6.2.2	LONZA will perform all in-process and finished product testing using approved specifications and methods of analysis. Laboratory notebook pages and representative sample
chromatograms can be reviewed on LONZA’s site by ORPHAN. 

  

	 	6.2.3	A LONZA Qualified Person/QA Representative will sign a Certificate of Conformity confirming that the lots produced in a campaign have 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. 

  

	 	6.2.4	Any reference standards that are supplied by ORPHAN or its Affliates must be accompanied by a COA listing the expiration date and any correction factors that need to be applied.

  

	 	6.2.5	ORPHAN may perform testing to confirm the LONZA data. ORPHAN may perform confirmatory testing during the initial term of this Agreement to validate the LONZA data. Periodically
thereafter, ORPHAN may test material to confirm the LONZA data. Dispute resolutions in conflicting test data will be handled according to the provisions of Section 9. 

  

	 	6.2.6	ORPHAN may perform release testing at a contract laboratory. Copies of all related documentation will be provided to LONZA upon request to support final disposition by LONZA.

  

	6.3	Retain Samples 

  

	 	6.3.1	LONZA will retain samples of the active ingredients for a minimum of five (5) years beyond the ingredient date manufactured. LONZA will retain samples of raw materials for a
minimum of two (2) years. 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, with the exception of sterility and pyrogen testing (CFR
211.170a). 

  

	6.4	Routine Stability Program 

  

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

  

 Quality Agreement: Page 6 

 APPENDIX H 
  

	6.5	Out-of-Specification (OOS) Investigations 

 LONZA is
responsible for investigating any testing performed that fails to meet specifications. Each investigation will be reviewed by LONZA’s Quality Assurance designee, and will follow internal procedures that are in accordance with regulatory
guidelines. LONZA will inform ORPHAN of OOS results and any subsequent retest results. 
  

	6.6	Contract OC Laboratories 

 ORPHAN is responsible for
ensuring the compliance and documented qualification of any QC lab contracted to perform testing of the Raw Materials and PRODUCT used in the manufacture of the finished PRODUCT through an appropriate laboratory audit for compliance. 
 7. QUALITY ASSURANCE 
  

	7.1	Deviations and Investigations 

  

	 	7.1.1	Deviations: Any deviation from the process during manufacture or OOS result must be carefully documented and approved by LONZA Quality Assurance and appropriate area
management. ORPHAN will be informed at the time of all Pharmaceutical Process/Formulation Exception Reports (PFERs) and reserves the right to participate in the investigation. A copy of the final investigation report will be included in the Release
Documentation package provided to ORPHAN. 

  

	 	7.1.2	LONZA will notify ORPHAN of the disposition of any rejected PRODUCT within 5 working days. 

  

	 	7.1.3	LONZA will notify ORPHAN immediately, in writing, if any problems are discovered that may impact PRODUCT lots previously shipped to ORPHAN. 

  

	 	7.1.4	Some investigations may require additional testing, stability, or validation to be conducted. This work will be performed by LONZA as agreed by both parties.

  

	7.2	Lot Disposition 

 For each lot, LONZA will provide
the release documentation required in Appendix III. 
  

 Quality Agreement: Page 7 

 APPENDIX H 
  

	7.3	Quality Assurance Certificate of Compliance/Analysis 

  

	 	7.3.1	LONZA will provide a standard Certificate of Analysis indicating the test results of each test performed as well as a signed Certificate of Compliance for the campaign confirming
that the PRODUCT has been manufactured, tested, and stored according to the requirements of the Master Production Record. 

  

	 	7.3.2	LONZA will provide complete copies to ORPHAN of the lot documentation (Executed batch record and analytical data). Shipment of the lots will require written prior authorization by
ORPHAN. 

  

	7.4	Product Release 

  

	 	7.4.1	Shipment of the PRODUCT, once dispositioned as “Approved” by LONZA, is the absolute responsibility of ORPHAN’S quality department. ORPHAN’S approval will be
undertaken by ORPHAN, based on ORPHAN’S internal procedures, the full document package provided by LONZA, and completion of any release testing required by ORPHAN Quality Control for their internal release criteria. 

  

	 	7.4.2	Any problem discovered by ORPHAN likely to cause rejection of the PRODUCT will be communicated to LONZA within thirty (30) days from receipt of the full release documentation
package (see Appendix III). 

  

	7.5	Product Complaints and Recalls 

  

	 	7.5.1	Product Complaints: ORPHAN is responsible for receiving and initially investigating any PRODUCT complaints. ORPHAN will notify LONZA of any problems thought to be due to
manufacture which are found during the distribution of the PRODUCT. When LONZA receives notice of manfuacturing problems from ORPHAN, LONZA will promptly perform investigations for alleged problems. Investigation reports will be forwarded to ORPHAN
within thirty (30) days from the receipt of the compliant by LONZA. ORPHAN is responsible for reporting any complaint to the appropriate regulatory authority including adverse drug events reports. Any PRODUCT complaint received by LONZA will be
immediately forwarded to ORPHAN. 

  

	 	7.5.2	Product Recall: ORPHAN, with data and assistance provided by LONZA, is responsible for filing Field Alerts and initiating PRODUCT recalls due to any defect considered
sufficiently serious. ORPHAN will provide LONZA with a copy of any regulatory correspondence related to field alerts or recalls. ORPHAN will notify LONZA of any recall. LONZA will provide a rapid initial response and a full report within ten
(10) working days and will provide recommendations for recall as needed. 

  

 Quality Agreement: Page 8 

 APPENDIX H 
  

	7.6	Records Retention 

  

	 	7.6.1	LONZA will retain, at a minimum, lot production records for the PRODUCT and materials for seven (7) years from manufacture of lots. Validation records may need to be held for
longer than seven (7) years. 

  

	 	7.6.2	LONZA will retain lot records for the expiry date of the Clinical Trial Materials for a minimum of three (3) years unless notified of a shorter retention period by ORPHAN, but
at a minimum of one (1) year past the stop use date. 

  

	7.7	Quality Assurance Presence in the Manufacturing Facility 

  

	 	7.7.1	LONZA will maintain adequate Quality Assurance presence in the manufacturing facility during the manufacture of the PRODUCT to ensure compliance with GMPs. 

 

	 	7.7.2	LONZA will permit ORPHAN’S presence in the manufacturing facility during the manufacture of the PRODUCT if requested by ORPHAN’S quality group. 

8. REGULATORY COMPLIANCE 
 8.1 Regulatory Inspections

  

	 	8.1.1	LONZA will immediately inform ORPHAN of any regulatory inspections that may involve the PRODUCT and permit a representative from ORPHAN Quality to be present, if required by ORPHAN.

  

	 	8.1.2	LONZA will secure ORPHAN’S agreement prior to making any commitment to a regulatory agency regarding ORPHAN’S PRODUCT. 

  

	 	8.1.3	Additionally, LONZA will immediately forward to ORPHAN any regulatory correspondence on the PRODUCT or on other system related issues that support manufacturing, packaging, or
testing for ORPHAN’S PRODUCT. 

  

	 	8.1.4	ORPHAN will immediately inform LONZA in writing of any regulatory issue that impacts LONZA’s ability to manufacture the PRODUCT. 

  

 Quality Agreement: Page 9 

 APPENDIX H 
  

	8.2	Regulatory Actions 

  

	 	8.2.1	ORPHAN will notify LONZA of any regulatory actions on the PRODUCT that may impact LONZA. 

  

	 	8.2.2	LONZA is responsible for supporting all lot record investigations associated with regulatory actions. 

  

	 	8.2.3	LONZA 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 import/export documentation are filed with regulatory agencies prior to shipment/human administration.

  

	 	8.3.2	LONZA Quality Assurance will act as the point of contact between ORPHAN’S regulatory affairs staff or consultant regarding issues that impact the CMC registration information
for the drug substances and/or drug product. 

  

	 	8.3.3	LONZA Quality Assurance will perform a technical/regulatory review of all documentation provided to ORPHAN to support regulatory submission. 

  

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

  

	 	8.3.5	ORPHAN will provide a copy of final regulatory submissions to LONZA Quality Assurance for reference during inspections. 

  

	 	8.3.6	LONZA will provide support for ORPHAN with respect to proposing appropriate CMC regulatory strategies and identifying potential regulatory consequences for issues involving drug
substance. 

  

 Quality Agreement: Page 10 

 APPENDIX H 
  

	8.4	Right to Audit 

  

	 	8.4.1	LONZA will allow representatives from ORPHAN Quality to have access to their manufacturing, warehousing, laboratory premises, and records for audit purposes pursuant to this
Section 8.4. ORPHAN representatives will be escorted at all times by LONZA personnel. 

  

	 	8.4.2	ORPHAN will provide a thirty (30) days notification for all planned audits. 

  

	 	8.4.3	LONZA will permit ORPHAN Quality to conduct preparatory audits either for initiation of GMP manufacture of the PRODUCT or for pre-approval inspections (PAI).

  

	 	8.4.4	LONZA will permit ORPHAN Quality to conduct audits to address significant product quality or safety problems. 

  

	 	8.4.5	LONZA will permit 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 from LONZA and ORPHAN to discuss significant audit observations. 

  

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

 9. DISPUTE RESOLUTION 
  

	9.1	Non-Conformity Dispute 

 In the event that a dispute
arises between LONZA and ORPHAN in the nonconformity of a lot of the PRODUCT, the supervisors of the Quality departments from both companies shall in good faith promptly attempt to reach an agreement. ORPHAN may only dispute a lot of PRODUCT which
has been dispositioned and released by LONZA. Whatever the outcome, ORPHAN Quality retains the absolute right to determine product release status. Financial liability shall be determined according to the Supply Agreement. 
  

 Quality Agreement: Page 11 

 APPENDIX H 
  

	9.2	Other Disputes 

 Other disputes shall be resolved in
accordance with the Supply Agreement. 
 10. CHANGE MANAGEMENT 
  

	10.1	Technical & cGMP Impact Assessment 

  

	 	10.1.1	All changes shall proceed through a technical and cGMP impact assessment by the LONZA expert groups coordinated by LONZA’s Quality Assurance change management personnel. The
documents that contain ORPHAN’S intellectual property or changes that may affect (i) ORPHAN’S regulatory submissions or (ii) the support system that has a direct impact on the quality systems that will affect ORPHAN’S
product, will also go through ORPHAN’S assessment for regulatory advice and implementation requirements, as per the agreements between ORPHAN and LONZA. 

  

	 	10.1.2	Any changes to documentation will be coordinated with ORPHAN by the responsible project scientist or project leader. 

  

	 	10.1.3	The scope of such a Change Management process includes Chemical Manufacturing, Pharmaceutical Manufacturing and Packaging processes. The associated changes may relate to: the Master
Production Control Records (e.g. Master Formulas, Filling Work Orders, Packaging Work Orders); Bills of Materials; Analytical Standards and Test Methods (for Raw Materials and Finished Product); Stability Protocols; Purchase Specifications (for Raw
Materials and Packaging Components); and ORPHAN specific Validated Equipment, Facilities, Utilities or Computer Systems. 

  

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

  

	 	10.1.3.2	Any significant changes will be mutually agreed upon in writing prior to implementation. All required regulatory approvals will be obtained prior to implementation.

  

 Quality Agreement: Page 12 

 APPENDIX H 
  

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

  

	 	10.1.3.4	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 Validation 

 LONZA is responsible for
ensuring that the manufacturing process is validated. The validation should ensure that the process is capable of consistently achieving the PRODUCT acceptance specification. 
  

	11.2	Cleaning Verification/Validation 

 LONZA is
responsible for ensuring that adequate cleaning is carried out between lots of different product to prevent contamination. Data should be available to support the campaign of lots of the same product and the type of cleaning that will be performed
in between manufacturing of the same product. ORPHAN will provide information (i.e. LD50, toxicity, solubility, lot 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 lots are made. 
  

	11.3	Equipment. Computer. Facility, and Utilities Qualification 

 LONZA is responsible for all equipment, computer, facility, and utility qualification activities associated with the PRODUCT. 
  

	11.4	Laboratory Qualification 

 LONZA is responsible for
ensuring that all laboratories are in compliance with applicable cGMP’s guidelines. If analytical work is performed at LONZA 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 Conshohocken, Pennsylvania site, LONZA may elect to perform an audit on vendors to be used for analytical testing. LONZA will be responsible for insuring that the vendor is
practicing within cGMP compliance. 
  

 Quality Agreement: Page 13 

 APPENDIX H 
 12. ANNUAL PRODUCT REVIEW, ANNUAL REPORT AND DRUG LISTING 
  

	12.1	Annual Product Review 

  

	 	12.1.1	LONZA will perform an Annual Product Review for the PRODUCT and will issue a report to ORPHAN. This report will cover all manufacturing, testing, and storage activities performed by
LONZA. It will be a review of any changes at LONZA in the manufacturing, testing, storage or validation of the PRODUCT 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 CFR 314.70, 314.81, and/or 601.12. At least ninety (90) calendar days
before the Annual Report due date, ORPHAN shall request in writing from LONZA the chemistry, manufacturing, and controls data required for submission of the Annual Report. LONZA will provide the requested information to ORPHAN within thirty
(30) days. 

  

	12.2	Drug Listing 

  

	 	12.2.1	LONZA is responsible for drug listing as the manufacturer of the PRODUCT for ORPHAN, while ORPHAN is responsible for drug listing as the distributor of the PRODUCT. ORPHAN will
provide LONZA with all required information needed to register the PRODUCT. ORPHAN will notify LONZA of the scheduled PRODUCT launch. 

 {Appendices are attached} 
  

 Quality Agreement: Page 14 

 APPENDIX H 
 APPENDIX I: PRODUCT - SODIUM OXYBATE Specification 
  

			
	Bulk Drug Substance:	 	Sodium Oxybate Powder
		
	Retest Date*:	 	56 months
		
	Storage Conditions:	 	15-30°C in packaging specified as follows
	
	Packaging Requirements:

  

			
	Closure:	 	Electrogalvanized Steel Lock Ring
		 	Cover: 24 Gauge Varnish/Precoated
		 	Chime Bands: Electrogalvanized Steel Top and Bottom
		 	Gasket: Urethane
		
	Supplier:	 	Grief Brothers or Berenfield Containers

  

			
	Container:	 	Polyethylene Bag
		 	Semi-Transparent Plastic Film EF603GU
		 	LDPE (95%), 100323 Anti-Stat (5%)
		 	0.004” thick, 36”wX68”L (± 1”) Stock #595131
		
	Supplier:	 	Target Industries

  

			
	Container:	 	Foil-lined Al-FiDrum
		 	44 gallons Leverpak, M4400-E7K3
		
	Supplier:	 	Grief Brothers, Lombard, IL Berenfield Containers, Inc.
		 	Easton, Pa. 18045

  

			
	Desiccant:	 	Desiccant Bag (Activated Clay)3767 Dessipak, 2 x 132 g
		 	Absorption Capacity: 16.00 wt/wt
		 	Residual Moisture : 3.00 wt/wt
		
	Supplier:	 	Sud-Chemie Performance Packaging, Belen, NM

 Each drum should be packaged with approximately 75 kg of Sodium Oxybate with a minimum of two desiccant bags
placed between the polyethylene bags and labeled with an approved label. 
  

 Quality Agreement: Page 15 

 APPENDIX H 
 Sampling: 
 Follow SOP (QA-095) for sampling process. The sample is divided into a testing sample and a lOOg retain sample. 
 * Denotes Minimum Retest Requirements 
  

					
	 Test
	 	 Specification
	 	 Method

	*Appearance	 	White to off white powder	 	Lonza-1006542
	*Assay - HPLC	 	98.0-102.0%(anhydrousbasis)	 	Lonza-SXB-F002
	*Impurities - Total	 	NMT1.0%	 	Lonza-SXB-F003 (HPLC)
	 *Impurities - Specified
 GBL-RRT1.6
GHBB-RRT4.3
	 	 NMTO.05%
 NMT 0.05%
	 	Lonza-SXB-F003 (HPLC)
	*Impurities - Unspecified	 	Ind. Impurities NMT 0.05%	 	Lonza-SXB-F003 (HPLC)
	*Water Content	 	NMT 0.5% (w/w)	 	Lonza-1006542 USP<921>
	Residual Solvents - GC	 	Methanol NMT 1000 ppm	 	Lonza-SXB-FOOl
	Identification (HPLC)	 	0.95 - 1.05 RT of Reference Standard	 	Lonza-SXB-F002
	Identification (IR)	 	Matches Reference Spectrum	 	Lonza-1006542 USP<197M>
	Heavy Metals	 	NMT 20 ppm	 	Lonza-1006542, USP<231> Method II

  

 Quality Agreement: Page 16 

 APPENDIX H 
 Contractual Release Specifications: 
 Some specification requirements for release of the bulk drug substance will be more restrictive than
those approved in the NDA to ensure drug adequacy upon analytical retesting or anticipated degradation over time. Sodium Oxybate Powder must meet BP/EP/EC/Japan standards. Orphan Medical Quality Assurance will issue a certificate of analysis as the
final release for the bulk drug substance. 
  

 Quality Agreement: Page 17 

 APPENDIX H  
 APPENDIX II: LIST OF QUALITY CONTACTS 
  

					
	 ISSUE
	 	 ORPHAN
	 	 LONZA

	Product Release	 	Kristine Goman Associate Manager Quality Assuance (952)513-6978 kgoman@orphan.com	 	 Thomas M. Harvey QA
 Documentation Supervisor

(610)-292-4395

			
	QC Testing	 	Kristine Goman Associate Manager Quality Assuance (952)513-6978 kgoman@orphan. com	 	 Qun Jiang Senior
 Analytical Chemist
 (610)-292-4435

			
	Investigations	 	Kristine Goman Associate Manager Quality Assuance (952)513-6978 kgoman@orphan.com	 	 Thomas M. Harvey QA
 Documentation Supervisor

(610)-292-4395

			
	Regulatory Affairs	 	 Dayton Reardan Ph.D
 V.P.Regulatory Affairs
 (952)513-6969
 dreardan@orphan.com
	 	 Susan Mijares
 QA/QC Manager
 (610)-292-4306

			
	Validation	 	Kristine Goman Associate Manager Quality Assuance (952)513-6978 kgoman@orphan.com	 	 *Garrett Burch
 Product Manager
 (610)-292-4313

			
	Compliance Audits	 	Kristine Goman Associate Manager Quality Assuance (952)513-6978 kgoman@orphan.com	 	 Thomas M. Harvey QA
 Documentation Supervisor

(610)-292-4395

			
	Product Complaints	 	Kristine Goman Associate Manager Quality Assuance (952)513-6978 kgoman@orphan.com	 	 Thomas M. Harvey QA
 Documentation Supervisor

(610)-292-4395

			
	Change Management	 	 Christy Frantzeskakis QA
 Documentation
Specialist
 (952)513-6976 Cfrantzeskakis@orphan.com
	 	 Thomas M. Harvey QA
 Documentation Supervisor

(610)-292-4395

 Note: *Garrett Burch, as the Product Manager for SXB
is the backup for all contacts. 
  

 Quality Agreement Appendix: Page 1 

 APPENDIX H 
 APPENDIX III: RELEASE DOCUMENTATION 
 The lot release document package will include copies of the batch record prior to release, analytical
test data, a-Certificate of Analysis (“CO A”) and a campaign Certificate of Compliance (“COC”) and any deviations (manufacturing or laboratory). 
 Certificate of Analysis: A COA which is automatically generated by LONZA Quality Assurance will be provided and will include the name of the PRODUCT, lot number, date of manufacture, retest date, and analytical
specifications. The COA will list the release tests performed by LONZA laboratories and actual test results. 
 Certificate of Compliance: The COC
will attest to the fact that the PRODUCT lots produced during a campaign was performed in accordance with all applicable regulations, licenses, and company policies. 
  

 Quality Agreement Appendix: Page 2

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