EXHIBIT 99.1
MASTER SERVICES AGREEMENT
ISTA Pharmaceuticals, Inc. ("ISTA"), located at 15279 Alton Parkway #100
Irvine, California 92692 and R.P. Scherer West, Inc. doing business as SP
Pharmaceuticals ("SP"), located at 4272 Balloon Park Road, N.E., Albuquerque,
New Mexico 87109 agree:
1. RECITALS.
A. ISTA has developed and wishes to distribute certain
pharmaceutical products and wants SP to formulate, sterile filter, fill,
lyophilize, package and perform certain tests on the Product.
B. SP has the facilities and expertise to perform the
manufacturing and other services required by ISTA. ISTA and SP wish to enter
into this Agreement for such manufacturing and services.
C. SP will supply ISTA with Product as defined in this Agreement
and the Exhibits hereto.
2. DEFINITIONS. The following definitions will apply whenever such
terms are used throughout this Agreement or any schedules attached hereto:
A. "Affiliate" shall mean with respect to any specified Person,
any other Person that directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the Person
specified. For purposes of this definition, "control" including, with
correlative meanings, the terms "controlled by" and "under common control with"
means ownership directly or indirectly of more than fifty percent (50%) of the
equity capital having the right to vote for election of directors in the case of
a corporation and more than fifty percent (50%) of the beneficial interest in
the case of a business entity other than a corporation.
B. "Agency" means the FDA and any other governmental regulatory
authority within a Territory involved in regulating any aspect of the
development, manufacture, market approval, sale, distribution, packaging or use
of the Product.
C. "Agreement" shall mean this Master Services Agreement.
D. "API" shall mean the active pharmaceutical ingredient used in
the manufacture of the Product as defined in the Scope of Work applicable to the
particular Product manufactured by SP.
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* An asterisk indicates confidential material has been omitted from this
document and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
E. "Applicable Laws" means all laws, ordinances, rules and
regulations within a Territory applicable to the Processing of Product and the
obligations of SP or ISTA, as the context requires, under this Agreement, and
includes, without limitation, (i) all applicable federal, state and local laws
and regulations of each Territory; (ii) the U.S. Federal Food, Drug and Cosmetic
Act, and (iii) the "GMPs." Applicable Laws shall also include all laws,
ordinances, rules and regulations applicable in Territories added to this
Agreement after the Effective Date of this Agreement.
F. "Bankrupt Party" shall have the meaning set forth in Section
15.C.
G. "Batch" shall mean a batch of Product ordered by ISTA pursuant
to the terms of this Agreement which has a distinct lot number assigned by SP in
accordance with instructions agreed to by ISTA.
H. "Calendar Year" shall mean the consecutive twelve (12) month
period beginning January 1 of a year and ending December 31 of such year.
I. "Claim" shall have the meaning set forth in Section 19.C.
J. "Commencement Date" shall mean the date upon which the FDA
approves the Product for commercial sale.
K. "Confidential Information" shall mean any information
disclosed by a Disclosing Party to a Receiving Party hereunder which is
designated in writing as "confidential", including without limitation: (i) all
information relating to the Product, API, Raw Materials, licenses, patents,
patent applications, technology, processes and business plans of the Disclosing
Party, (ii) all notes, analyses, studies or other documents prepared by the
Receiving Party which contain or are based on such information or material
relating to the information disclosed by the Disclosing Party, and (iii) all
information obtained by the Receiving Party upon visiting the Disclosing Party's
facilities or reviewing products, plans, processes, formulations, operations,
facilities, equipment or other assets of the Disclosing Party.
L. "Contract Year" means each consecutive twelve (12) month
period beginning on the Commencement Date.
M. "Disclosing Party" shall mean a party disclosing Confidential
Information to the other party pursuant to this Agreement.
N. "Effective Date" shall mean, with respect to a particular
document, the signature date of the last party to sign such document.
O. "EMEA" means The European Agency for the Evaluation of
Medicinal Products.
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P. "Excipient Ingredients" shall mean the inactive chemical
ingredients in the Product other than the API.
Q. "Fails To Supply" shall mean with respect to the Product, a
failure to supply ISTA at least [*] of the quantity of Product ordered by ISTA
for the applicable period.
R. "FDA" shall mean the United States Food and Drug
Administration.
S. "Firm Order" shall have the meaning set forth in Section 5.C.
T. "GMPs" shall mean all applicable standards within the
Territories relating to manufacturing practices for intermediates, bulk
products, or finished pharmaceutical products (i) in the form of laws or
regulations, or (ii) in the form of guidance documents (including, but not
limited to, advisory opinions, compliance policy guides and guidelines) which
guidance documents are being implemented within the pharmaceutical manufacturing
industry for such products. GMPs shall also include good manufacturing practice
regulations promulgated by an Agency in a Territory added to this Agreement
after the Effective Date of this Agreement, solely to the extent ISTA or its
designee has provided written copies of such regulations to SP prior to SP's
Processing Product under this Agreement. Copies of all laws shall be in the
English language.
U. "Improved Process" shall mean a manufacturing Process for the
Product where (i) the lyophilization cycle is less than or equal to [*], and
(ii) the Batch size is at least [*] or more of the maximum capacity of the
lyophilizer used by SP for Processing as of the effective date of this Agreement
for each vial size.
V. "Indemnified ISTA Parties" shall have the meaning set forth in
Section 19.B.1.
W. "Indemnified Party" shall mean a party seeking indemnification
pursuant to this Agreement.
X. "Indemnifying Party" shall mean the party from whom the
Indemnified Party is seeking indemnification pursuant to this Agreement.
Y. "Indemnified SP Parties" shall have the meaning set forth in
Section 19.A.1.
Z. "Initial Payment" shall have the meaning set forth in Section
8.A.(1).
AA. "ISTA Designee" shall mean a third party, other than a third
party who is primarily engaged in the business of pharmaceutical contract
manufacturing, which has agreed to be subject to a confidentiality agreement
with SP having terms substantially similar to those contained in Section 17 of
this Agreement, and which has a reasonable need to inspect SP's premises in
connection with the Product.
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* An asterisk indicates confidential material has been omitted from
this document and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
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BB. "Master Batch Record" shall mean the master production and
control records required by the Food and Drug Administration to be kept for the
Product pursuant to 21 CFR Section 211.186.
CC. "Minimum Requirement" shall have the meaning set forth in
Section 5.A.
DD. "Non-Conforming" shall mean a Product or particular Raw
Material that was not Processed in conformity with the Specifications or
otherwise does not conform with the Specifications upon making the Product
available to ISTA for ISTA's final release testing.
EE. "Person" shall mean any individual, corporation, company,
limited liability company, partnership, business trust, business association,
governmental entity, governmental authority or other legal entity.
FF. "Pharmaceutical Price Index" shall mean that particular index
within the U.S. Department of Labor's Producer Price Index -- Commodities, which
is categorized under the Group, "Chemicals and Allied Products," item
"Pharmaceutical preparations" and having the Series ID of WPU0638.
GG. "Price Increase" shall mean an increase in SP's Prices
pursuant to this Agreement.
HH. "Price Increase Date" shall mean the first date upon which any
Price Increase is to become effective.
II. "Price Increase Notice" shall mean SP's written notice to ISTA
of a Price Increase, which shall include the information required by Section
7.D.
JJ. "Prices" shall mean SP's prices for materials and services as
set forth in Exhibit B.
KK. "Process" or "Processing" shall mean the manufacturing process
for the Product including, but not be limited to, bulk solution manufacturing,
filtering, lyophilization, filling, inspection, testing, labeling and packaging
of Products.
LL. "Product" shall mean ISTA's pharmaceutical product containing
hyaluronidase that is manufactured, labeled, and packaged in accordance with the
Specifications (as defined below), and trademarked as of the Effective Date as
Vitrasea.
MM. "Product Contact" shall mean the individuals appointed by each
of SP and ISTA to coordinate communication between the two companies.
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NN. "Protocol" shall mean any protocol, whether prepared by SP or
ISTA, describing work to be performed by SP.
OO. "Purchase Order" shall have the meaning set forth in Section
6.
PP. "Receiving Party" shall mean a party receiving Confidential
Information of the other party pursuant to this Agreement.
QQ. "Representatives" shall have the meaning set forth in Section
17.A.
RR. "Raw Materials" shall mean Excipient Ingredients, vials,
stoppers, seals, and/or labeling and packaging components other than API, needed
to produce the Product.
SS. "Release Certificate" shall mean a certificate prepared by
ISTA for each Batch of Product which indicates ISTA's final testing results from
Batch samples and approval of the Batch records for such Batch.
TT. "Rolling Forecast" shall have the meaning set forth in Section
5.C.
UU. "Scheduled Manufacture Date" shall mean the first day upon
which SP begins to combine the API with the Excipient Ingredients.
VV. "Specification" shall mean an individual Product standard
contained in Exhibit A as amended by the parties hereto during the term hereof,
or the Master Batch Record applicable to the Product, and "Specifications" shall
mean collectively, all of the Specifications.
WW. "Scope of Work" shall mean the Scope of Work attached to this
Agreement as Exhibit A.
XX. "Subsequent Payment" shall have the meaning set forth in
Section 8.A.(1).
YY. "Supplied Material Cost" shall mean the book value of any Raw
Materials or API provided by ISTA to SP as stated on ISTA's account books as of
the date of delivery of such materials to SP.
ZZ. "Territory" means the United States of America, Canada, Japan,
the countries subject to the regulatory jurisdiction of the EMEA, and such other
countries which the parties agree in writing to add to this Agreement from time
to time.
AAA. "Total Annual Need" shall mean the total number of vials of
Product which ISTA supplies in each calendar year, directly or indirectly, to
third parties for distribution in those countries within the Territory for which
SP agrees to supply in accordance with this Agreement and Applicable Laws,
including all manufacturers of such Product; provided, however, that the Total
Annual Need shall not include any quantity of Product which is in excess of a
third party's Product
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purchase obligations set forth in a firm order or firm forecast or in excess of
SP's maximum volume commitments set forth in Exhibit B.
3. THE WORK.
A. Manufacturing and Other Services. Upon receipt of a Purchase
Order, SP will Process the Product in accordance with the Specifications and the
applicable Scope of Work.
B. Regulatory Support. SP will provide ISTA, at no additional
cost, with all regulatory support required to prepare the Type I DMF FDA Drug
Master File and for FDA inspections of SP facilities. If additional regulatory
support is required or requested by ISTA, SP shall provide such support to ISTA
at SP's then current rates for such services, including the cost of any
specialized labor or materials used.
C. Amendments. Amendments to this Agreement and any Exhibit
hereto shall be automatically made a part of this Agreement upon the written
agreement of SP and ISTA.
D. Conflicts. Unless otherwise agreed to by the parties in
writing, the terms and conditions of this Agreement shall supercede and control
any conflicting term or condition in any Exhibit, Quality Agreement or Purchase
Order.
E. Designated Product Contact. SP and ISTA will each designate a
specific contact for communications relating to SP's services rendered pursuant
to this Agreement ("Product Contact"). The Product Contact will be the primary
contact for discussions about the Product and SP's services. Each party shall
deliver Product forecasts and other significant documentation to the other
party's Product Contact or such other person as the other party may designate
from time to time.
4. EXPERIMENTAL BATCHES. Each Batch of Product manufactured under this
Agreement will be considered to be an "Experimental Batch" until SP has
manufactured three (3) consecutive Batches of Product which meet the
Specifications applicable to such Product. The term "Experimental Batch" shall
include without limitation any Batch manufactured following (i) a change in
Specifications, (ii) implementation of the Improved Process, or (iii) a scale-up
in the manufacturing process to produce greater quantities of Product, until SP
has manufactured three (3) consecutive batches of Product meeting the new
Specifications. ISTA shall be responsible to pay for each Experimental Batch
which fails to meet the Specifications at the price agreed to by the parties
(which price shall exclude the costs of Raw Materials and API provided by ISTA);
provided that if such batch does not meet the Specifications due to SP's
negligence, the failure of SP's Processing equipment, or SP's failure to adhere
to the batch records, ISTA shall not be responsible for any such costs. SP and
ISTA shall cooperate in good faith to resolve any problems causing the
out-of-Specification Batch.
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5. ANNUAL MINIMUM REQUIREMENT & FORECASTS.
A. Minimum Requirement. ISTA shall purchase from SP at least [*]
of its Total Annual Need for the Product during the term of this Agreement
("Minimum Requirement"); provided, however, that if the Minimum Requirement
exceeds SP's maximum volume commitments set forth in Exhibit B for any
applicable period, ISTA shall not be required to purchase from SP the volume of
Product that exceeds the Minimum Requirement. ISTA shall provide to SP, on or
before January 31 of each year, a statement of the total quantities of Product
manufactured by all manufacturers of such Product in the previous year in order
for SP to monitor ISTA's compliance with this Section.
B. Failure to Supply. Notwithstanding any other provision in this
Agreement, if SP Fails to Supply Product ordered pursuant to a Firm Order for
any [*], ISTA shall be entitled to obtain such quantities of Product from any
other party such quantities of Product as SP is unable to supply during such
period. ISTA shall not be obligated to purchase the Minimum Requirement from SP
for [*] following completion of [*] in which SP has fully supplied each Purchase
Order (defined below) submitted to SP by ISTA for such [*].
C. Monthly Forecast. Beginning on the first day of the month not
less than one hundred twenty (120) days before the Commencement Date, and
thereafter on the first day of each month, ISTA will deliver to SP's Product
Contact a rolling forecast of its need for Product for the following twelve (12)
month period (each, a "Rolling Forecast"). The quantities of Product to be
delivered in the first ninety (90) days of each Rolling Forecast shall be a firm
order for Product ("Firm Order") and the remainder of the Rolling Forecast shall
be for advisory purposes only and non-binding.
D. SP Obligation to Meet Requirements. SP shall supply ISTA such
quantities of Product ordered by ISTA pursuant to the Firm Order up to the
maximum annual vial production quantities specified in the "Other Comments"
column of the "Commercial Supply Manufacture" Section of Exhibit B, as
applicable to the vial and batch sizes specified therein. Subject to the
requirements of Section 6, SP will use reasonable commercial efforts to supply
quantities of Product ordered by ISTA in excess of the Firm Order.
6. PURCHASE ORDERS. ISTA will initiate an order for Product by sending
to SP a specific purchase order for Product at least ninety (90) days prior to
the requested delivery date for the Product covered by the purchase order
("Purchase Order"), provided that the first Purchase Order submitted by ISTA
hereunder may be sent seventy-five (75) days or more prior to the requested
delivery date. If the first Purchase Order submitted hereunder is submitted less
than 90 days prior to the requested delivery date, such Purchase Order shall
order no more than two batches of Product. Aggregate quantities of Product
ordered in Purchase Orders pursuant to this Section 6 shall reflect no less than
those quantities of Product that ISTA is obligated to purchase from SP pursuant
to the Firm Orders submitted to SP pursuant to Section 5.C. If there is a
conflict between the terms of this Agreement and any Purchase Order, the terms
of this Agreement will control.
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* An asterisk indicates confidential material has been omitted from this
document and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
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7. PRICING.
A. Price. ISTA will pay SP for Product manufactured or services
performed in accordance with the terms set forth in this Agreement and in
Exhibit B attached hereto.
B. Price Increases.
(1) Increased Manufacturing Costs. Except as provided in
Sections 7.B.2. and 7.B.3 of this Agreement, SP's Prices to manufacture clinical
or commercial supplies of the Product shall remain fixed until the earlier of
[*] ("Fixed Price Period"). SP will implement a Price Increase following the
Fixed Price Period. Any such proposed Price Increase will be in proportion to,
and not exceed, the [*] over the [*] preceding the date of the Price Increase
Notice. The amount of the aggregate Price Increase for the Product pursuant to
this subsection over any particular twelve (12) month period will not exceed [*]
of the per unit Product Price in the twelve (12) month period preceding the
Price Increase Date as set forth in the Price Increase Notice. Prices revised in
accordance with this subsection will remain fixed for a period of twelve (12)
months following the Price Increase Date, subject to any changes pursuant to
Sections 7.B.2. or 7.B.3. of this Agreement.
(2) Materials Increases. Notwithstanding any increases
pursuant to Section 7.B.1., if SP's cost for any Raw Material increases by more
than [*], SP shall be entitled to increase its manufacturing prices to ISTA by
the amount of such price increase; provided that SP shall use reasonable efforts
to minimize such costs for Raw Materials. SP shall provide to ISTA copies of
invoices evidencing the increased cost of such Raw Materials.
(3) Product or Service Changes. SP may implement a Price
Increase for a particular Product or service if material changes are made to any
applicable Scope of Work, Protocol or Master Batch Record and such changes
result in increased costs to SP; provided that in all cases such changes are
pre-approved in writing by ISTA. If SP proposes to increase its Prices pursuant
to this Section 7.B.3., SP will send a Price Increase Notice to ISTA in
accordance with Section 7.C. Unless ISTA objects in writing to the Price
Increase within fifteen (15) days after receipt of the Price Increase Notice,
the Price Increase will take effect on the Price Increase Date stated in the
Price Increase Notice and shall apply to all Purchase Orders submitted after the
Price Increase Date. If ISTA does object to such Price Increase Notice, such
written objection shall describe the basis for ISTA's objections. Within ten
(10) business days thereafter, the parties shall begin good faith negotiations
to agree upon a Price Increase reasonably related to the requested change.
Despite any such objection, SP shall remain obligated to manufacture Product,
without the implementation of such changes to the Product or Process, which ISTA
is obligated to order or purchase pursuant to Sections 5 and 6 for the price
existing prior to any Price Increase.
C. Price Increase Notice. SP will notify ISTA of a Price Increase
by delivering a Price Increase Notice to ISTA. Except as otherwise provided by
Section 7.B.3., SP will deliver each Price Increase Notice to ISTA at least
thirty (30) days prior to the effective date of the Price
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*An asterisk indicates confidential material has been omitted from this document
and filed separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
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Increase. The Price Increase Notice shall set forth the amount of the Price
Increase, the Price Increase Date, and the basis for such Price Increase.
8. PAYMENT TERMS AND TITLE.
A. Invoicing. SP will invoice ISTA for Product and services as
follows:
(1) For manufacture of a Batch of Product, SP shall invoice
[*] of the estimated Price for such Batch based on the expected total number of
vials to be manufactured in such Batch no earlier than [*] prior to the
Scheduled Manufacture Date for that Batch of Product ("Initial Invoice"); and
the remaining balance due for such Batch ("Subsequent Invoice") upon the earlier
of (a) [*] weeks following the date upon which both the Batch records and the
Batch samples for a Batch of Product have been shipped to ISTA, or (b) shipment
of the Batch of Product by SP;
(2) For stability testing, SP shall invoice ISTA [*] of the
fee for such testing upon manufacturing of, but no earlier than the Scheduled
Manufacture Date for, the Batch to go on stability testing, and the remaining
balance at each of the stability checkpoints specified in the applicable
stability protocol; or
(3) For all other projects performed by SP for ISTA and for
other fees incurred by ISTA, SP shall invoice ISTA at the beginning of each
month for fees incurred by ISTA during the previous month.
B. Payment. ISTA shall pay each invoice within thirty (30) days
of receipt of such invoice.
C. Bill and Hold. ISTA may request in writing that SP store
Product at its facilities for a period of time prior to shipment ("Bill and
Hold"). Such request shall be in writing in substantially the form attached to
this Agreement as Exhibit C. For each Bill and Hold, ISTA acknowledges that (i)
ISTA has made a fixed commitment to purchase such Product, (ii) risk of
ownership for such Product passes to ISTA, (iii) ISTA has requested that such
Product be on a Bill and Hold basis for legitimate business purposes, (iv) if no
delivery date is determined at the time of billing, SP shall have the right to
ship the Product to ISTA if SP does not receive a request for delivery within
six (6) months after ISTA receives an invoice from SP, and (v) ISTA will be
responsible for any decrease in market value of such Product that relates to
factors and circumstances outside of SP's reasonable control. Upon request for
shipment of such stored Product by ISTA, SP shall use commercially reasonable
efforts to ship such Product within two (2) business days following confirmed
receipt of such request, but in no event more than five (5) business days
following confirmed receipt of such request. SP shall be entitled to ship to
ISTA each Batch of Product stored at its facilities if SP does not receive a
signed Bill and Hold Request covering such Batch within seven (7) business days
following a request for such Bill and Hold Request. If ISTA elects not to
receive such Batch of Product at its facilities and ISTA has not provided a name
and address of a qualified recipient of such Product within six (6) months of SP
releasing the Product for
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*An asterisk indicates confidential material has been omitted from this document
and filed separately with the Securities and Exchange Commission pursuant to
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
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shipment, SP may request, and ISTA shall provide SP, within ten (10) business
days of a written request from SP, with the name and address of a qualified
recipient of such Product.
D. Late Payments. Invoices paid later than thirty (30) days from
the date of receipt of such invoice will be charged one and one-half percent
(1.5%) interest per month, or the maximum amount permitted by law if less than
one and one-half percent (1.5%) per month or eighteen percent (18%) per year.
E. Cancellation & Rescheduling Fee. If ISTA cancels or
reschedules the manufacture of Product ordered pursuant to a Purchase Order or
fails to place a Purchase Order for the quantity of Product ISTA is obligated to
purchase pursuant to Section 5.C., ISTA shall pay SP a cancellation/rescheduling
fee as follows:
(1) If ISTA's aggregate Purchase Orders for Product during
[*] are for less than the aggregate amount of Product specified in the Firm
Order for that [*], ISTA will pay SP a Firm Order reduction fee equal to [*] of
the fee for that aggregate quantity of Product which is less than the aggregate
quantity of Product that ISTA was obligated to order in the Firm Order.
(2) If ISTA cancels a Purchase Order or reschedules a
Scheduled Manufacture Date for a Batch less than [*] but more than [*] prior to
such Scheduled Manufacture Date, ISTA will pay SP a fee equal to [*] of the
total manufacturing fee which would otherwise be payable for the canceled or
rescheduled manufacturing.
(3) If ISTA cancels a Purchase Order or reschedules a
Scheduled Manufacture Date for a Batch less than [*] but more than [*] prior to
such Scheduled Manufacture Date, ISTA will pay SP a fee equal to [*] of the
total manufacturing fee which would otherwise be payable for the canceled or
rescheduled manufacturing.
(4) If ISTA cancels a Purchase Order or reschedules a
Scheduled Manufacture Date for a Batch less than [*] but more than [*] prior to
such Scheduled Manufacture Date, ISTA will pay a fee equal to [*] of the total
manufacturing fee that would otherwise be payable for such canceled or
rescheduled Batch, unless SP is able to schedule a replacement Batch [*]. If SP
can schedule a replacement Batch in that time period, ISTA will pay to SP a fee
equal to [*] of the fee that would otherwise have been payable for such canceled
or rescheduled Batch.
(5) If ISTA cancels a Purchase Order or reschedules a
Scheduled Manufacture Date for a Batch less than [*] prior to the Scheduled
Manufacture Date for such Batch, ISTA will pay a cancellation fee equal to [*]
of the fee that would otherwise be payable for such canceled or rescheduled
Batch, unless SP is able to schedule a replacement Batch [*]. If SP can schedule
a replacement Batch in that time period, ISTA will pay to SP a cancellation fee
equal to [*] of the total manufacturing fee that would otherwise have been
payable for the canceled or rescheduled Batch.
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* An asterisk indicates confidential material has been omitted from this
document and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
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For purposes of this section, any cancellation or rescheduling of a Scheduled
Manufacture Date by SP shall be deemed to be a cancellation by ISTA, provided
that (i) ISTA did not pay an Initial Invoice as required by Section 8.B. of this
Agreement, (ii) SP provided notice of such failure to pay as required by Section
15.B., (iii) the unpaid Initial Invoice is not a Disputed Invoice as provided in
Section 15.B., and (iv) ISTA did not make full payment on the unpaid Initial
Invoice within the time required by Section 15.B.
F. Component Fee. If ISTA requests reduced production for any
portion of Firm Order or if ISTA changes the Product labeling, ISTA will pay for
any components, Raw Materials or labeling ordered by SP to meet ISTA's Rolling
Forecast if SP cannot reasonably expect to utilize the components or Raw
Materials for the manufacture of any product within six (6) months after the
date the Firm Order was modified by ISTA.
G. Equipment Purchase. If manufacture of any Product requires
equipment which SP does not already have in its facilities and SP has agreed to
install or retain such equipment in SP's facilities, ISTA will be responsible
for purchase, installation and maintenance costs for such equipment. If ISTA
purchases the equipment, ISTA shall be responsible for making all payment
arrangements. If ISTA and SP choose to have SP purchase such equipment, ISTA
will pay to SP the full purchase price for the equipment, plus a [*] handling
fee and all shipping, insurance, customs and similar fees, prior to SP's
purchase of the equipment. ISTA will be responsible for any and all taxes,
including property taxes, applicable to such equipment. SP and ISTA will
negotiate the specific details of delivery, placement, storage and care of the
equipment prior to or at the time of purchase. ISTA will own all equipment
purchased by either SP or ISTA pursuant to this Section if ISTA has paid the
full purchase price and any applicable handling fee for such equipment. SP will
handle all such equipment with the same standard of care that SP would use when
handling its own equipment. SP will return the equipment to ISTA at ISTA's
expense upon termination of this Agreement.
H. Taxes and Fees. ISTA is liable for and will pay to SP or to
the applicable government authority any sales, use, gross receipts, compensating
or any other taxes, licenses or fees (excluding income and franchise taxes)
legally incurred by SP from the State of New Mexico or any other state or tax
jurisdiction as a result of purchasing materials, rendering services,
transferring property, or any other action specifically necessary to fulfill the
terms of this Agreement and not otherwise useful in the operation of SP's
business. ISTA shall not be responsible for any taxes due on account of SP's
income. The parties will cooperate with each other to provide such reasonable
documentation as may be required to take advantage of applicable non-taxable
transaction laws.
I. Ownership of API & Certain Raw Materials. Title to all API,
other Raw Materials furnished by ISTA, work in process, and finished Products,
will at all times remain with ISTA.
J. API. ISTA shall, at its sole cost and expense, supply SP with
sufficient amounts of API as reasonably necessary for SP to fulfill its supply
obligations hereunder.
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* An asterisk indicates confidential material has been omitted from this
document and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
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Commencing January 1, 2003, ISTA shall provide all such API at least sixty (60)
days before the Scheduled Manufacturing Date upon which such API will be used by
SP. SP shall use such API solely and exclusively for manufacturing Product for
ISTA pursuant to this Agreement and shall store the API at SP's facilities in
accordance with the applicable Specifications, and the terms and conditions
contained herein. Prior to delivery of any of the API to SP for Processing, ISTA
shall provide SP with a copy of the Material Safety Data Sheet ("MSDS") for the
API, as amended, including any subsequent revisions thereto. Upon receipt of the
API, SP shall conduct identification testing of the API in accordance with the
applicable Specifications. The parties acknowledge and agree that title to the
API shall at all times belong to and remain in ISTA. SP shall protect, manage
and account for such API with the same diligence that SP uses with respect to
its own inventory of like value, but in no event less than reasonable care. SP
shall affix to and maintain in a conspicuous location on the API, a notice
stating that such API is owned by ISTA. All API shall be kept in a secure area,
separate from materials not used in the manufacture of Product. SP shall keep
such API free of all security interests, liens and other encumbrances. Upon
request by ISTA at any time or for any reason or purpose, SP shall return the
API to ISTA at ISTA's expense.
9. BATCH ACCEPTANCE OR REJECTION.
A. Delivery. Upon receipt of the Release Certificate from ISTA,
SP will ship the Product at ISTA's expense, F.O.B. SP's shipment docks in
Albuquerque, New Mexico to a location designated by ISTA in writing. Unless
otherwise agreed in writing, in no event shall SP ship any Product prior to its
receipt of the Release Certificate from ISTA. Subject to the provisions of
Section 5, SP shall ship Product to arrive on or about the delivery dates
specified in ISTA's Purchase Orders. All Product delivered pursuant to the terms
of this Agreement shall be packed and shipped by SP in accordance with the
Specifications to the destination point designated by ISTA in writing. Each
shipment of Product hereunder shall be accompanied by the documentation listed
in Exhibit D attached hereto. The carrier shall be selected by ISTA. ISTA shall
pay all freight, insurance charges, taxes, import and export duties, inspection
fees and other charges applicable to the sale and transport of Product purchased
by ISTA hereunder.
B. Batch Acceptance or Rejection. ISTA may reject a Batch of
Product only if such Batch is a Non-Conforming Batch and ISTA delivers written
notice to SP of rejection within [*] days following receipt by ISTA of the Batch
records relating to such Non-Conforming Batch. Any notice of rejection shall
describe the defects which are the basis for such rejection and shall be
accompanied by a report of analysis for the alleged Non-Conforming Batch. The
failure of ISTA to reject Product in the manner set forth above will constitute
acceptance of the Batch. Acceptance of a Batch by ISTA will be deemed final
disposition, and a subsequent rejection of the Batch by ISTA will not be
allowed, unless the defect in any Batch is [*].
C. SP Rejection. SP may refuse to release the Batch if the Batch
does not meet the Product Specifications. SP shall promptly deliver notice of
any such rejection to ISTA in writing and such rejection shall describe the
defects which are the basis for such rejection.
- -------------------------------------------------------------------------------
* An asterisk indicates confidential material has been omitted from this
document and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
-12-
D. Credit. Should ISTA reject any Non-Conforming Batch pursuant
to Section 9.B, or if SP refuses to release a Batch which is not an Experimental
Batch, SP will promptly credit ISTA's account for any portion of SP's fee for
such Batch (plus shipping, insurance and customs charges not included therein)
already paid by ISTA pursuant to this Agreement and subject to the limitations
in Section 13, for the cost of ISTA-provided API used in such Batch.
E. Dispute Over Results. If either party rejects a Batch pursuant
to Section 9.B. or 9.C. and the other party fails to agree that rejection of the
Batch was reasonable within ten (10) business days of receipt of notice of the
rejection, the parties shall each have the right to audit the test results,
out-of-specification (OOS) procedures and other relevant data and procedures
relating to the rejected Batch. If, after such review, the parties cannot agree
on compliance of the Product with the Specifications, the parties will use a
mutually agreed upon third party laboratory to test samples of the rejected
Batch and to review records and test data and other relevant information
relating to the Batch. The determination of such third party testing
organization shall be final and binding. The cost of the third party testing
will be borne by the party found to be in error or by both of the parties in
proportion to each party's responsibility for the error.
10. ISTA INSPECTIONS. SP will permit ISTA and ISTA Designees, upon
reasonable advance notice and at a time agreed to by SP, to inspect its
facilities and observe its procedures applicable to manufacturing of the
Products once annually prior to and during the Term of the Agreement. SP will
provide only one ISTA Designee inspection each calendar year without charge and
will charge for each additional ISTA Designee inspection at rates then in effect
for SP regulatory personnel which SP deems necessary to accompany the ISTA
Designee during such inspection. Notwithstanding the foregoing, ISTA shall have
the right to perform additional quality audits which are limited in scope to
address specific quality problems arising with regard to the Product. Neither
ISTA nor the ISTA Designees will, without the approval of SP, have access to
portions of SP's facilities at a time when such facilities are being used to
manufacture products for another client of SP. ISTA's representatives and the
ISTA Designees will at all times be accompanied by a representative of SP. ISTA,
its employees and agents, and the ISTA Designees will comply with SP rules and
regulations and good manufacturing practices while on SP's premises. ISTA
specifically assumes liability for any injuries, damages or delays in production
resulting solely from the action of its employees or agents and the ISTA
Designees at SP facilities.
11. REGULATORY MATTERS.
A. Each party shall promptly notify the other party upon being
contacted by an Agency for any purpose or reason directly relating to the
manufacture of the Product, including without limitation, any announced or
unannounced Agency inspection. At ISTA's request, SP will provide ISTA with
copies of any certification or qualification of SP required by such Agency. SP
shall permit an ISTA representative to be present at SP's facilities during any
such inspection directly relating to manufacture of the Product.
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B. A party receiving any document of action, including without
limitation any FDA Form 483 inspectional observation report, regulatory letter,
warning letter or other such document ("Responding Party") relating to the
Product, as a result of a regulatory audit shall immediately provide the other
party with copies of such document of action. The Responding Party shall provide
the other party an opportunity, to the extent feasible under the circumstances,
to provide input to any response to the document of action prior to submitting
such response to the applicable Agency. ISTA and SP each agree to provide
promptly (and in no event later than five business days prior to the day upon
which a response is due to a regulatory agency) such information as the
Responding Party deems necessary, in its sole discretion, to completely and
accurately respond to the inquiry of the Agency. Failure to provide any
information as required by the preceding sentence shall be a material breach of
this Agreement. ISTA will pay for any charges levied by an Agency for an
inspection directly relating to the Product, including travel and per diem
costs, and for any other costs arising from the need to respond to an inquiry
resulting from such inspection to the extent such inquiry is not related to SP's
manufacturing of products other than the Product.
C. SP and ISTA commit that all activities regarding the
manufacture and testing of the Product will conform with ISTA NDA 21414 and all
subsequent amendments and supplements, provided that ISTA has provided to SP all
applicable portions of the CMC section of such NDA prior to submission to the
FDA and provided, further, that the CMC commitments in such NDA are consistent
with the master batch record, specifications, standard operating procedures and
protocols previously approved by both parties. SP will provide to ISTA those
portions of the CMC Section of the NDA, which apply to the work to be performed
by SP for incorporation into the NDA. Copies of all approved NDA documents which
apply to the work performed by SP pursuant to this Agreement, and which will be
submitted to FDA, will be provided to SP's regulatory department for expedited
review prior to submission to FDA, although SP's review may not delay the
submission to the FDA. ISTA shall clearly indicate all changes made by ISTA to
the CMC Section of the NDA, which are applicable to SP's services in order to
help expedite SP's review. Copies of the final documents that are submitted to
FDA and that are applicable to SP will also be provided to SP.
12. RECALLS AND REGULATORY ACTIONS.
A. Cooperation. If ISTA initiates a recall, product withdrawal,
or field correction of any Product, whether or not such recall has been
requested or ordered by any governmental agency, ISTA will notify SP, and SP
will fully cooperate with ISTA in notifying Product consumers and distributors
to return all such Product and will follow any other reasonable instructions
provided by ISTA. If SP believes that a recall, product withdrawal or field
correction regarding the Product is appropriate, SP will immediately notify and
obtain approval from ISTA prior to taking any action and the Parties will
cooperate with each other in determining the necessity and nature of such
action. Both parties will notify each other promptly of any other regulatory
action relating to the Products such as Agency inspections, items on Form 483,
or seizures.
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B. Coordination of Recall Activities. In any event, with respect
to any recall, product withdrawal, or field correction of Product, ISTA will
make all contacts with the Agencies and will be responsible for coordinating all
of the necessary activities in connection with such recall, product withdrawal
or field correction.
C. Liability for Recall Costs. If a recall, product withdrawal or
field correction of Product is necessary for any reason, SP and ISTA shall each
bear the costs of the recall in proportion to each party's responsibility for
the error underlying the recall; provided, however, that SP's maximum cumulative
liability under this Agreement for any one recall, product withdrawal or field
correction will be [*] (the "Recall Liability Limit"). In the event that SP is
found to be liable for some or all of the recall costs, ISTA, at its sole
discretion, may: [*]. SP shall be liable only for recall costs that result from
an error or omission by SP which occurred during SP's manufacturing, labeling,
packaging, storage (including storage of API) or preparation of Product for
shipment. SP will not be responsible for recall costs if: (i) finished Product
test results indicate that the finished Product does not meet the
Specifications, (ii) SP is not responsible to perform finished Product testing,
and (iii) a party other than SP is responsible for final release of the Product
into commercial or clinical distribution.
D. Confidentiality. All communications relating to any recall,
product withdrawal or field correction will be held in confidence and will be
subject to the terms of Section 17 of this Agreement.
13. LIMITATION OF LIABILITY.
A. Lost, Damaged or Destroyed Materials. SP's liability under
this Agreement for any and all claims for lost, damaged or destroyed Product,
API or other ISTA-supplied materials is limited to the lesser of either: (i) [*]
per Batch of lost, damaged or destroyed Product, API or other ISTA-supplied
materials, or (ii) the cost of SP's services to manufacture the Product Batch
for which such API or ISTA-supplied materials were to be used and the cost of
such ISTA-supplied materials, as recorded on the books of ISTA as of the date of
delivery of the materials to SP.
B. Special Damages. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO
THE OTHER PARTY OR TO ANY OTHER PERSON FOR ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY
OR INCIDENTAL DAMAGES (INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS
RELATING TO THE SAME), ARISING FROM OR RELATING TO THIS AGREEMENT, THE EXHIBITS,
OR QUALITY AGREEMENT, OR THE SUBJECT MATTER THEREOF.
14. INSURANCE. During the Term, SP and ISTA will each obtain and
maintain comprehensive general liability ("CGL") insurance (including broad form
general liability, completed operations and product liability, personal injury
liability, blanket contractual liability and broad form property damage
liability) with limits of not less than ten million dollars ($10,000,000)
combined single limit for bodily injury and property damage liability per
occurrence and annual
- -------------------------------------------------------------------------------
* An asterisk indicates confidential material has been omitted from this
document and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
-15-
aggregate. ISTA shall be named as an additional insured under SP's CGL policy.
During the Term, SP and ISTA will each obtain and maintain worker's compensation
insurance as required by applicable law and employer's liability insurance with
a limit of not less than one million dollars ($1,000,000). Each party will
provide to the other evidence of insurance coverage as required by this
Agreement and shall obtain from its insurer an undertaking to notify the other
party in writing at least 30 calendar days prior to the cancellation of or any
material change to such insurance policies.
15. TERM AND TERMINATION.
A. Term. This Agreement shall be effective as of the date of
signature of the last party to sign this Agreement and, unless sooner terminated
pursuant to this Section 15, shall expire seven (7) Contract Years following the
Commencement Date (the "Term").
B. Termination for Material Breach. Either party may terminate
this Agreement in the event of a material breach by the other, provided that the
party asserting such breach first serves written notice of the alleged breach on
the offending party and such alleged breach is not cured within ninety (90) days
of said notice; provided, however, that if (i) ISTA fails to pay any SP invoice
other than a Disputed Invoice within ten (10) business days after receipt of a
notice from SP that payment for such invoice is overdue, SP shall be entitled to
immediately terminate this Agreement, or at SP's discretion, be relieved of any
further obligation to perform under this Agreement until all outstanding
payments are brought current. For purposes of this Section and Section 8.E., a
"Disputed Invoice" means any SP invoice which ISTA has a reasonable, good faith
basis to believe is incorrect, provided that ISTA delivers a written notice to
SP of such dispute prior to the payment due date for such invoice provided in
Section 8.B. of this Agreement, which notice shall include a sufficiently
detailed explanation of the dispute to enable SP to investigate ISTA's claim and
ISTA pays such portion of the Disputed Invoice that is not disputed by ISTA.
C. Termination for Bankruptcy. If either party (i) suspends its
business, (ii) files a voluntary petition pursuant to any reorganization or
insolvency law of any jurisdiction, (iii) consents to an involuntary petition
pursuant to any reorganization or insolvency law of any jurisdiction, (iv) makes
an assignment for the benefit of creditors, or (v) applies for or consents to
the appointment of a receiver or trustee of all or a substantial part of its
property (such party, upon the occurrence of any such event, a "Bankrupt
Party"), then to the extent permitted by the law, the other party to this
Agreement may thereafter immediately terminate this Agreement by giving notice
of termination to the Bankrupt Party.
D. Termination by Notice. Either party may terminate this
Agreement effective upon at least twelve (12) months prior written notice to the
other.
E. Effect of Expiration or Termination. Expiration or earlier
termination of this Agreement will not extinguish rights or obligations
previously accrued or vested.
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F. SP Obligations upon Expiration or Termination. Upon the
expiration of this Agreement or its earlier termination, SP will use its best
efforts to assist ISTA in the transfer of relevant manufacturing technology and
information not considered to be SP's proprietary information to another
qualified manufacturing site; ISTA will pay SP for all such efforts in an amount
mutually agreed upon by the parties prior to transfer of information, unless
such termination is by ISTA pursuant to Sections 15.B. or 15.C., in which event
such transfer costs shall be borne solely by SP.
16. WARRANTIES.
A. SP Warranties. SP hereby warrants and represents to ISTA as
follows:
(1) All Product Processed by SP under this Agreement shall
be merchantable, free from defects and shall not be adulterated or misbranded
within the meaning of the United States Food, Drug and Cosmetic Act, as amended;
(2) SP will Process the Products in conformity with the
Specifications;
(3) At the time of delivery to ISTA's designated carrier,
the Product shall conform to the Specifications.
(4) SP shall Process all Product in a facility that is
covered by and complies with all Applicable Laws, and necessary registrations
and licenses and SP shall maintain all such registrations and licenses during
the Term of this Agreement;
(5) When applicable to the work performed by SP, SP will
adhere to then current GMP and other Applicable Laws;
(6) SP has not been debarred under the Generic Drug
Enforcement Act and will not knowingly employ any person or entity that has been
debarred to perform any work relating to any Product under this Agreement; and
(7) SP shall store all API and Product in a secure facility
and in accordance with the Specifications.
B. ISTA Warranties. ISTA hereby warrants and represents to SP as
follows:
(1) All API and art work supplied by ISTA to SP will comply
with the requirements of the Federal Food Drug and Cosmetic Act and other
applicable regulatory requirements and the Specifications agreed to by the
Parties;
(2) All API and Raw Materials supplied by ISTA will be
manufactured in a facility that is covered by and complies with all necessary
and appropriate Applicable Laws,
-17-
registrations and licenses and that such registrations and licenses will be
maintained during the Term of this Agreement;
(3) ISTA will market the Product only for its intended uses
as approved by the Agencies; and
(4) Any license granted under Section 18.A. from ISTA to SP
of a patent or other intellectual property necessary to manufacture the Product
will not violate any provision under a third party license to ISTA for such
patent or other intellectual property.
(5) To ISTA's knowledge, the Product does not infringe any
third party patent or other intellectual property right.
C. No Other Warranties. THE WARRANTIES SET FORTH IN SECTIONS
16.A. AND 16.B. ARE THE SOLE WARRANTIES MADE BY EITHER PARTY TO THE OTHER AND
THERE ARE NO OTHER WARRANTIES, REPRESENTATIONS OR GUARANTEES OF ANY KIND
WHATSOEVER, EITHER EXPRESS OR IMPLIED, REGARDING THE PRODUCTS OR ANY OTHER
MATERIALS OR SERVICES TO BE SUPPLIED UNDER THIS AGREEMENT, INCLUDING WITHOUT
LIMITATION ANY EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
17. CONFIDENTIALITY.
A. Disclosure of Confidential Information. A Receiving Party will
not use any Confidential Information of a Disclosing Party hereunder, except as
permitted by this Agreement, or disclose the same to anyone other than its
officers, directors, representatives, agents or employees, prospective investors
or purchasers or advisors (collectively, "Representatives") who need to know
such Confidential Information in connection with the Receiving Party's
activities under this Agreement or in connection with a potential investment in
Receiving Party or purchase or merger of Receiving Party. Each party will use
its best efforts to ensure that its Representatives do not disclose or make any
unauthorized use of any Confidential Information. Each party will notify the
other promptly upon discovery of any unauthorized use or disclosure of the
other's Confidential Information.
B. Instructions to Representatives. Each Receiving Party will
direct its Representatives to handle all Confidential Information in a manner
consistent with the terms of this Agreement and to take all precautions and
measures that are reasonably necessary to prevent any improper use of the
Confidential Information.
C. Additional Confidentiality Agreements. Prior to disclosing
Confidential Information of a Disclosing Party hereunder to any Representative,
Receiving Party will first have ensured that such Representative has executed a
written confidentiality agreement requiring such
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Representatives to handle all Confidential Information in a manner consistent
with, and no less stringent than, the terms of this Agreement.
D. Limitation on Confidentiality. The obligation of
confidentiality imposed by this Section 17 will not apply to the extent that (i)
the Receiving Party is required to disclose information by applicable law,
regulation or order of a governmental agency or a court of competent
jurisdiction; (ii) the Receiving Party can demonstrate that the disclosed
information was at the time of disclosure already in the public domain, other
than as a result of actions or failure to act of the Receiving Party or its
Representatives in violation of this Agreement; (iii) the disclosed information
was rightfully known by the Receiving Party (as shown by its written records)
prior to the date of disclosure to the Receiving Party in connection with the
transactions contemplated by this Agreement; or (iv) the disclosed information
was received by the Receiving Party on an unrestricted basis from a source which
is not under duty of confidentiality to the Disclosing Party.
E. Disclosure of Confidential Information. If the Receiving Party
must make disclosure of any Confidential Information as a result of the issuance
of a court order or other government process, the Receiving Party will promptly,
but in no event more than forty-eight (48) hours after learning of such court
order or other government process, notify, by personal delivery or facsimile,
the Disclosing Party of the same. At the Disclosing Party's expense, the
Receiving Party will (a) take all reasonably necessary steps requested by the
Disclosing Party to defend against the enforcement of such court order or other
government process or to obtain a protective order regarding such disclosure,
and (b) permit the Disclosing Party to intervene and participate with counsel of
its choice in any proceeding relating to the enforcement thereof.
F. Term of Confidentiality. The obligations set forth in this
Section 17 will continue for a period of five (5) years following the
termination of this Agreement.
G. Return. The Receiving Party will, upon the written request of
the Disclosing Party after expiration or termination of this Agreement, promptly
destroy or return to the Disclosing Party all Confidential Information
(including notes, writings and other material developed therefrom) and all
copies thereof and retain none for its files, except that each party may retain
one copy for its legal files. The return or retention of such information will
not relieve the Receiving Party of its continuing obligation of confidentiality
hereunder.
H. Prior Confidentiality Agreements. The confidentiality
requirements of this Section 17 shall supercede and replace any prior
confidentiality agreement between ISTA and SP, but only to the extent that such
confidentiality agreement relates to a Product which is the subject of this
Agreement.
18. INTELLECTUAL PROPERTY.
A. ISTA Ownership and Licenses. SP acknowledges that ISTA owns
and possesses certain Confidential Information, inventions, technologies,
processes, know-how, trade
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secrets, improvements, other intellectual properties and other assets relating
to the Product, which have been independently developed or licensed by ISTA
(collectively "ISTA Technology"). Subject to the limitations of subsection 18.C.
below, ISTA shall own all inventions, developments, or improvements to the ISTA
Technology, whether or not patentable that arise from, or are based upon the
Product, Processing or ISTA Technology ("ISTA Developments"); provided however,
that the ISTA Developments shall not include any invention, development,
technology or information, consisting of any manufacturing process or
methodology developed solely by SP without use of ISTA Technology. ISTA will be
responsible for obtaining patent protection on inventions relating to the ISTA
Technology and ISTA Developments at its own cost. SP agrees to execute all
documents necessary to perfect title in the ISTA Developments in ISTA. ISTA
grants a non-exclusive, royalty-free, non-transferable license to SP to use the
ISTA Technology and the ISTA Developments solely for the purpose of Processing
the Product for ISTA under this Agreement. ISTA's license to SP for the ISTA
Technology and the ISTA Developments will terminate upon the termination or
expiration of this Agreement for any reason.
B. SP Ownership and Licenses. ISTA acknowledges that SP owns and
possesses certain Confidential Information, inventions, processes, know-how,
trade secrets, improvements, other intellectual properties and other assets
relating to the pharmaceutical development, formulation, manufacture and
packaging, which have been independently developed or licensed by SP
(collectively "SP Technology"). Subject to the limitations of subsections 18.A.
and 18.C., SP shall own all inventions, developments, or improvements to the SP
Technology, whether or not patentable that arise from, or are based upon the SP
Technology and which are otherwise conceived or reduced to practice under or
during the term of this Agreement by SP; provided that no SP Development may
incorporate any ISTA Technology or ISTA Development ("SP Developments"). SP will
be responsible for obtaining patent protection on inventions relating to the SP
Technology and SP Developments at its own cost. Without limiting the provisions
of Section 18.A. above, during the Term of this Agreement, SP grants to ISTA a
nonexclusive, royalty-free, fully paid-up, worldwide license under all patent
rights within the SP Technology or SP Developments as are reasonably necessary
to enable SP to manufacture the Product for ISTA under this Agreement. In the
event a license to any SP patent within the SP Technology or SP Developments is
necessary to enable ISTA to manufacture the Product at a third party facility,
SP shall grant a worldwide, non-exclusive license to such patent solely in
connection with the Product, and ISTA and SP will negotiate a reasonable royalty
for the use of such license.
C. Joint Inventions. If work performed pursuant to this Agreement
results in inventions which are jointly developed, conceived or reduced to
practice by SP and ISTA because employees or agents of each of SP and ISTA make
inventive contributions thereto, those employees or agents of both parties will
be named as co-inventors under the laws of the United States on any patent
application claiming such inventions, and ownership of such inventions shall be
determined by inventorship. In such instance of a jointly owned invention, each
party will have full right to exploit and license on a non-exclusive basis such
jointly owned inventions without any obligation to the other party (including
without limitation, the obligation to account to the other for profits). The
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parties will share equally the patenting cost of any jointly owned inventions.
In this regard any decision to file for patent coverage on jointly owned
inventions will be mutually agreed on, and the parties will select a mutually
acceptable patent counsel to file and prosecute patent applications based on
such joint inventions. If either party chooses not to pursue or contribute to
patent protection for such joint invention in a particular country, then all
right, title and interest in and to the patent or application in such country
(as the case may be) and any patents issuing thereon shall be owned by the party
pursuing such patent or application. The non-paying party shall notify the other
party at least ninety (90) days prior to the date the next action or filing is
due to be taken with respect to a jointly owned invention, patent application or
patent, of its decision not to contribute to such invention, patent application
or patent.
D. Enforcement. Each party shall have the sole right, but not the
obligation, to enforce its solely owned patent rights. Each party shall have the
right, but not the obligation, to enforce jointly owned patent rights claiming
joint inventions created or developed hereunder ("Joint Patents"). Because each
party has the right to grant and authorize sublicenses under Joint Patents, a
party that intends to enforce a Joint Patent shall first consult with the other
party. To the extent the parties agree in writing upon an enforcement action,
the non-enforcing party shall cooperate as reasonably requested by the enforcing
party at the enforcing party's expense, including without limitation joining
enforcement actions as a party plaintiff or taking other actions where necessary
for the standing or other requirements to file or maintain the action; and (ii)
the non-enforcing party shall not grant a license under the Joint Patent in a
manner that avoids the enforcement action. Each party shall notify the other
party in writing if it becomes aware of an infringement by a third party of any
Joint Patents, and the parties will promptly thereafter meet to discuss the
matter. The parties shall each have the right to participate in any action to
enforce Joint Patents and shall each cooperate with the other in good faith.
19. INDEMNIFICATION.
A. Indemnification by ISTA.
(1) Except as limited by Section 19.A.2., and subject to
Section 19.C., ISTA will indemnify and hold harmless SP, its affiliates, any
present or future parent or subsidiary of any of them, and their respective
officers, directors, employees, and agents (the "Indemnified SP Parties") from
and against any and all Claims, including reasonable attorney fees and expenses,
to the extent based upon any of the following:
(a) Any personal injury, death, product liability or
property damage relating to or arising from the handling, possession, marketing,
distribution, promotion, sale, or use of the Product, or the API or Raw
Materials supplied by ISTA or its third party distributors (including, without
limitation, product liability or strict liability);
(b) Infringement of third party patent, trademark or
other intellectual property rights by the practice or use of the ISTA Technology
or ISTA Developments;
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(c) Any failure by ISTA to comply with any Applicable
Laws; or
(d) The breach of any representation, warranty or
covenant of ISTA contained in Section 16.B. of this Agreement
(2) ISTA WILL NOT INDEMNIFY, DEFEND OR HOLD HARMLESS ANY OF
THE INDEMNIFIED SP PARTIES TO THE EXTENT THAT ANY CLAIM IS SUBJECT TO SP'S
INDEMNIFICATION UNDER SECTION 19.B. OR ARISES OUT OF A NEGLIGENT ACT OR OMISSION
OR WILLFUL MISCONDUCT OF SP.
B. Indemnification by SP.
(1) Except as limited by Section 19.B.2. and subject to
Section 19.C., SP will indemnify and hold harmless ISTA, its affiliates, any
present or future parent or subsidiary of any of them, and their respective
officers, directors, employees, and agents (the "Indemnified ISTA Parties") from
and against any and all Claims, including reasonable attorney fees and expenses,
to the extent based upon any of the following:
(a) Any breach of any representation, warranty,
covenant or agreement of SP contained in this Agreement;
(b) Any failure by SP to comply with any Applicable
Laws; or
(c) Any personal injury, death, product liability or
property damage relating to or arising from any Product supplied by SP under
this Agreement, but only to the extent such failure, personal injury, product
liability or property damage is attributable to SP's failure to manufacture any
product in conformance with the Specifications or the Applicable Laws.
(d) Infringement of third party patent, trademark or
other intellectual property rights by the practice or use of the SP Technology
or SP Developments;
(2) SP WILL NOT INDEMNIFY, DEFEND OR HOLD HARMLESS ANY OF
THE INDEMNIFIED ISTA PARTIES TO THE EXTENT THAT ANY CLAIM IS SUBJECT TO ISTA'S
INDEMNIFICATION OF SP UNDER SECTION 19.A. OR ARISES OUT OF A NEGLIGENT ACT OR
OMISSION OR WILLFUL MISCONDUCT OF ISTA.
C. Procedure. Any party seeking indemnification under this
Agreement shall promptly notify the indemnifying party of any third party claim,
complaint, suit, proceeding or cause of action (collectively and individually
referred to as a "Claim") of which the party seeking indemnification becomes
aware (including a copy of any related complaint, summons, notice, or other
instrument). The indemnifying party will defend, contest, or otherwise protect
against any such Claims at its own cost and expense. The indemnified party may,
but will not be obligated to, participate at its own expense in a defense
thereof by counsel of its own choosing, but the
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indemnifying party shall be entitled to control the defense unless the
indemnified party has relieved the indemnifying party from liability with
respect to the particular matter. If the indemnifying party does not notify the
other party of its intent to undertake the defense and/or settlement of any
Claim within thirty (30) days after the receipt of notice of such Claim, upon
prior written notice to the indemnifying party, the indemnified party may, but
will not be obligated to, defend, contest or otherwise protect against the same,
and make any reasonable compromise or settlement thereof and recover the entire
costs thereof from the indemnifying party, reasonable legal fees and court and
reasonable expert fee costs and disbursements, and all amounts mutually awarded
as a result of such Claims or the compromise or settlement thereof to the extent
such Claim is covered under the indemnifying party's indemnification obligations
under this Section 19; provided, however, that if the indemnifying party
undertakes the defense and/or settlement of such matter, the indemnified party
shall not be entitled to recover from the indemnifying party for its costs
incurred in the defense thereof. The indemnified party shall cooperate and
provide such assistance as the indemnifying party may reasonably request in
connection with the defense of the matter subject to indemnification.
20. NOTICE. Except as otherwise provided in this Agreement, all notices,
proposals, submissions, offers, approvals, agreements, elections, consents,
acceptances, waivers, reports, plans, requests, instructions and other
communications required or permitted to be made or given hereunder will be in
writing in the English language, and will be deemed to have been duly made or
given when (i) delivered personally with receipt acknowledged, (ii) mailed in
any general or branch United States Post Office, enclosed in a registered or
certified postage-paid envelope, return receipt requested, or (iii) sent by
facsimile (which will promptly be confirmed by a writing sent by registered or
certified mail, return receipt requested), or (iv) sent by recognized overnight
courier for next day delivery, in each case addressed or sent to the parties at
the following addresses and facsimile numbers or to such other or additional
address or facsimile number as any party will hereafter specify to the other
parties:
For Contract Issues to SP: Arthur C. Solomon
Vice President & General Manager
R.P. Scherer West, Inc. d/b/a
SP Pharmaceuticals
4272 Balloon Park Road, N.E.
Albuquerque, New Mexico 87109
Fax No. (505) 761-9229
With a copy to: General Counsel
Cardinal Health Inc.
7000 Cardinal Place
Dublin, OH 43017
Fax No. (614) 757-8919
-23-
For All Issues to SP: Jan Hickey
Contract Manufacturing Director
R.P. Scherer West, Inc. d/b/a
SP Pharmaceuticals
4272 Balloon Park Road, N.E.
Albuquerque, NM 87109
Fax No. (505) 761-9229
For All Issues to ISTA: David R. Waltz
Vice President of Finance
ISTA Pharmaceuticals, Inc.
15279 Alton Parkway #100
Irvine, California 92692
Fax No. (949) 789-7744
With a copy to: Stephanie L. Sharron
Member
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304-1050
Fax No. (650) 493-6811
For Manufacturing and: William Craig, Ph.D.
Regulatory Issues to ISTA: Vice President of Research and
Product Development
ISTA Pharmaceuticals, Inc.
15279 Alton Parkway #100
Irvine, California 92692
Fax No. (949) 788-6010
21. MISCELLANEOUS.
A. Force Majeure. Except as specifically set forth herein,
neither SP nor ISTA will be in default under this Agreement or be liable for any
failure to perform or for delay in performance resulting from any cause beyond
its reasonable control, including, without limitation, acts of God, fires,
floods, or weather; strikes or lockouts, factory shutdowns, embargoes, wars,
hostilities or riots, delays or shortages in transportation, actions by civil or
military authorities; provided, however, that notwithstanding any conflicting
provisions stated herein, if either party cannot perform its obligations under
this Agreement within six (6) months due to any such force majeure condition,
the other party may cancel any unfilled orders and terminate this Agreement
without penalty. SP will assist ISTA in its effort to identify, obtain
regulatory approval qualification and start up an alternate manufacturing site
if SP cannot manufacture the Product pursuant to this Section 21.A. ISTA will
reimburse SP for this assistance at a reasonable amount reflecting SP's actual
costs incurred as mutually agreed upon by the parties.
-24-
B. Certain Remedies. Each party agrees that the other party may
be irreparably damaged if either Section 17 or Section 18 is not performed in
accordance with its terms. Accordingly, each party will be entitled to apply for
injunctive relief to prevent breaches of Sections 17 or 18 of this Agreement by
the other party, and the party against which the injunction is sought agrees
that it shall not challenge the other party's claim of irreparable harm. These
specific remedies are in addition to any other remedy to which the parties may
be entitled at law or in equity.
C. Publicity. Neither party will make any press release or other
public disclosure regarding this Agreement or the transactions contemplated
hereby, except as required under applicable law or by any governmental agency,
in which case the party required to make the press release or public disclosure
shall use commercially reasonable efforts to obtain the approval of the other
party as to the form, nature and extent of the press release or public
disclosure prior to issuing the press release or making the public disclosure.
D. Relationship. The relationship between the parties will be
governed by the terms of this Agreement and will not extend to other activities,
transactions or contracts. Neither party hereto is in any way the legal
representative or agent of, nor has any authority to assume or create any
obligation on behalf of, the other party.
E. Dispute Resolution. In the event of any dispute, the parties
shall refer such dispute to the Chief Executive Officers of SP and ISTA (or
their respective executive officer level designees) for attempted resolution by
good faith negotiations within thirty (30) days after such referral is made.
F. Arbitration. In the event the executives are unable to resolve
a dispute as provided in Section 21.E., except for matters pertaining to
injunctive relief, the parties shall submit their dispute to binding arbitration
before a single arbitrator (i) in Orange County, California if such dispute is
initiated by SP, or (ii) in Albuquerque, New Mexico, if such dispute is
initiated by ISTA, such arbitration to be conducted in accordance with the
Non-Administered Arbitration Rules of the CPR. The existence of the dispute, the
dispute resolution process, and the arbitrator's award shall be maintained
confidential, provided that the arbitrator's award may be entered as a final
judgment in any court having jurisdiction.
G. Legal Fees. In the event that any party to this Agreement is
required to pursue legal action to enforce or defend its rights pursuant to this
Agreement, whether by arbitration or otherwise, the prevailing party in any such
legal action or proceeding shall be entitled to an award of reasonable
attorney's fees and all other related costs incurred therein.
H. Governing Law. This Agreement will be governed by and
construed in accordance with the laws of the State of California, without regard
to the conflicts of law principles of California. The parties agree that the
U.N. Convention on Contracts for the International Sale of Goods shall not apply
to this Agreement nor to any dispute or transaction arising out of this
Agreement.
-25-
I. Legal Construction. If any provision of this Agreement is
deemed to be invalid or unenforceable in any respect, the validity and
enforceability of the remaining provisions contained of this Agreement will not
in any way be affected or impaired thereby and the parties will attempt to agree
upon a valid and enforceable provision which will be a reasonable substitute for
such invalid and unenforceable provision.
J. Entire Agreement, Modifications, Consents, Waivers. This
Agreement, together with any Exhibit or Quality Agreement executed pursuant to
this Agreement, contains the entire agreement of the parties with respect to the
subject matter hereof. Except as provided herein, no interpretation, change,
termination or waiver of or extension of time for performance under any
provision of this Agreement will be binding upon any party unless in writing and
signed by the party intended to be bound thereby. No waiver or other failure to
exercise any right under, or default or extension of time for performance under,
any provision of this Agreement will affect the right of any party to exercise
any subsequent right under or otherwise enforce said provision or any other
provision hereof or to exercise any right or remedy in the event of any other
default, whether or not similar.
K. Binding Effect and Assignment. This Agreement will inure to
the benefit of and be binding upon each of the parties hereto and their
respective successors and assigns. Neither this Agreement, nor any of the rights
and obligations under this Agreement, may be assigned, transferred or otherwise
disposed of by either party without the prior consent of the other party, unless
such assignment, transfer or disposition is to a successor to all or
substantially all of the businesses and assets of such party.
L. Survival. The obligations in Sections 12, 13, 15.E, 15.F, 16,
17, 18, 19, 20 and 21 shall survive the expiration or termination of this
Agreement for any reason whatsoever.
M. Counterparts. This Agreement may be executed in any number of
counterparts and each such duplicate counterpart will constitute an original.
Dated: June 7, 2002
ISTA Pharmaceuticals, Inc. R.P. Scherer West, Inc. d/b/a
SP Pharmaceuticals
By: By:
----------------------------------- -----------------------------------
Vicente Anido, Jr., Ph.D. Arthur C. Solomon
Title: President and Chief Executive Title: Vice President & General Manager
Officer --------------------------------
--------------------------------
-26-
EXHIBIT A
SCOPE OF WORK
This Exhibit A defines certain of the responsibilities of the parties with
regard to (i) the supply, testing and release of components, raw materials,
gases and water for injection, (ii) Product manufacture, inspection and
shipping, (iii) receiving testing, in process testing, finished product testing
and product specific validations, (iv) labeling, and (v) samples.
1. SP SUPPLIED MATERIALS. SP will provide the components, raw materials,
gases and water for injection defined below.
A. Components, as follows:
==================================================================
COMPONENT SPECIFICATIONS
==================================================================
Vials 5cc, 13mm SO2 treated, flint tubing vial, Wheaton,
2705-B46BA
------------------------------------------------------------------
Stoppers 13mm, lyo, V-50, West, 4432/50 with B2-44 coating
------------------------------------------------------------------
Seals 13mm, 6 bridge, color to be determined, West, flip
off seal
------------------------------------------------------------------
Shippers Standard SP shippers.
==================================================================
B. Raw Materials. SP will conduct appropriate inspection, testing and
release of the following raw materials for conformance to the corresponding
compendial method:
==================================================================
RAW MATERIAL STANDARD
------------------------------------------------------------------
[*] NF
------------------------------------------------------------------
[*] USP
------------------------------------------------------------------
[*] NF
------------------------------------------------------------------
[*] Per Batch Record
==================================================================
C. Gases. SP will conduct appropriate inspection, testing and release
of the following gases for conformance to the corresponding compendial method:
==================================================================
GAS STANDARD
------------------------------------------------------------------
Nitrogen NF
==================================================================
D. Water for Injection. SP will conduct appropriate inspection, testing
and release of the following water for injection for conformance to the
corresponding compendial method:
==================================================================
SUBSTANCE STANDARD
------------------------------------------------------------------
Water for Injection USP
==================================================================
- -------------------------------------------------------------------------------
* An asterisk indicates confidential material has been omitted from this
document and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
2. ISTA Supplied Materials. ISTA will provide the active pharmaceutical
ingredient (API), ovine hyaluronidase.
A. The API will meet the following specifications when shipped to SP:
- --------------------------------------------------------------------------------
TEST SPECIFICATION METHOD
COMPENDIAL TESTS: [*] [*]
pH
Loss on Drying [*] [*]
Hyaluronidase [*] [*]
Activity
Assay
Solubility [*] [*]
Appearance of [*] [*]
Powder
Bacterial [*] [*]
Endotoxins
Microbial Limits [*] [*]
Test
- --------------------------------------------------------------------------------
ADDITIONAL ISTA TESTS: [*] [*]
[*]
[*] [*] [*]
Hyaluronidase [*] [*]
Content
Assay
Total Protein [*] [*]
Specific Activity [*] [*]
- --------------------------------------------------------------------------------
B. The API will be shipped under frozen conditions (<-15 oC).
C. A Certificate of Analysis will be supplied with each lot of API
shipped to SP.
3. MANUFACTURING. SP will manufacture the Product in accordance with the
applicable Master Batch Record and will inspect and ship the Product as follows:
A. Compound the bulk solution using tested and released ingredient(s).
B. Prepare and sterilize vials and stoppers according to standard SP
procedures.
C. Filter the bulk drug solution through two 0.2-micron Sartorius
filters.
D. Fill the bulk drug solution into vials within the tolerance limits
set by the batch record.
- -------------------------------------------------------------------------------
* An asterisk indicates confidential material has been omitted from this
document and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
-2-
E. Load the filled vials into the Hull 2 lyophilizer.
F. Lyophilize the product.
G. Stopper the vials in the lyophilizer.
H. Seal the vials under laminar airflow.
I. Perform 100% visual inspection of the finished product.
J. Label and carton the product for distribution
K. Bulk pack the product using standard SP Shippers.
L. Ship the product to Customer FOB SP's shipping docks in Albuquerque,
New Mexico.
4. RECEIVING TESTING OF THE ACTIVE PHARMACEUTICAL INGREDIENT. SP shall
perform the following receiving test for the API to confirm its identification:
==================================================================
TEST SPECIFICATIONS
------------------------------------------------------------------
Enzymatic Identification Test Absorbance unit difference > 0.4
==================================================================
5. IN PROCESS TESTING. While manufacturing the Product, SP will conduct the
in process tests defined in the Master Batch Record for conformance to the
corresponding specification:
==================================================================
TEST SPECIFICATIONS
------------------------------------------------------------------
1. Hyaluronidase activity [*]
------------------------------------------------------------------
2. Appearance -- post Clear, colorless solution free
filtration of visible particulates
------------------------------------------------------------------
3. pH -- pre- and post [*]
filtration
------------------------------------------------------------------
4. Density -- post filtration 0.950 to 1.050 g/mL
------------------------------------------------------------------
5. Fill Volume by production According to the batch record
personnel
------------------------------------------------------------------
6. Pre-filtration bioburden Per SP SOP's
------------------------------------------------------------------
7. Environmental monitoring Per SP SOP's
------------------------------------------------------------------
8. Personnel monitoring Per SP SOP's
==================================================================
6. FINISHED PRODUCT TESTING. Following manufacture of the Product, SP will
conduct the finished product tests defined in the following table for
conformance to the corresponding specification:
- -------------------------------------------------------------------------------
* An asterisk indicates confidential material has been omitted from this
document and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
-3-
===================================================================
TEST SPECIFICATIONS
-------------------------------------------------------------------
1. Appearance White fluffy cake or powder
free from visible evidence of
contamination
-------------------------------------------------------------------
2. USP Sterility Sterile
-------------------------------------------------------------------
3. Particulate analysis by HIAC Per USP
-------------------------------------------------------------------
4. Bacterial Endotoxin NMT 0.2EU/USP unit
===================================================================
7. STORAGE CONDITIONS.
A. Active Pharmaceutical Ingredient: -15 (degrees)C to
-25 (degrees)C
B. Finished Product: 2-8 (degrees)C
8. LABELING.
ISTA will supply SP with approved artwork that meets the applicable FDA or
other regulatory laws, regulations and guidelines for the vials, inserts and
cartons.
A. SP will obtain artwork (proofs) for review and approval by SP and
ISTA.
B. ISTA will review all artwork (proofs) for adherence to regulatory
requirements, accuracy of information, printing errors and misspellings, and all
other issues of concern to ISTA.
C. SP will review artwork (proofs) for printing errors only
(i.e. misspelled words, broken type).
D. SP will obtain printed labels for vials, inserts and cartons, which
SP will review for printing errors, and supply samples to ISTA. ISTA will
provide the final approval before labeling.
E. SP will label the Product in accordance with the Supply Agreement,
the applicable Scope of Work and all applicable FDA, or other regulatory agency,
laws, regulations and guidelines.
------------------------------------------------------------------
LABEL TYPE SP ITEM NUMBER ISTA ITEM NUMBER
------------------------------------------------------------------
Vial
------------------------------------------------------------------
Carton
------------------------------------------------------------------
Insert
------------------------------------------------------------------
9. FINISHED PRODUCT SPECIFICATIONS. ISTA will assure that the finished
Product meets the following specifications prior to acceptance by ISTA and
ISTA's issuance of a Release Certificate.
VITRASE(R) (HYALURONIDASE) FOR INJECTION, [*]- FINISHED PRODUCT
- -------------------------------------------------------------------------------
* An asterisk indicates confidential material has been omitted from this
document and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
-4-
- --------------------------------------------------------------------------------
TEST SPECIFICATION METHOD
- --------------------------------------------------------------------------------
COMPENDIAL TESTS: [*] [*]
pH
- --------------------------------------------------------------------------------
Water Content [*] [*]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Hyaluronidase Activity [*] [*]
Assay
- --------------------------------------------------------------------------------
Appearance of [*] [*]
Reconstituted Solution
- --------------------------------------------------------------------------------
Appearance of Powder [*] [*]
- --------------------------------------------------------------------------------
Particulate Matter in [*] [*]
Reconstituted Solution
- --------------------------------------------------------------------------------
Sterility STERILE [*]
- --------------------------------------------------------------------------------
Bacterial Endotoxins [*] [*]
- --------------------------------------------------------------------------------
Container Closure [*] [*]
Integrity
- --------------------------------------------------------------------------------
ADDITIONAL ISTA TESTS: [*] [*]
[*]
- --------------------------------------------------------------------------------
[*] [*] [*]
- --------------------------------------------------------------------------------
Hyaluronidase Content [*] [*]
Assay
- --------------------------------------------------------------------------------
Total Protein [*] [*]
- --------------------------------------------------------------------------------
SDS-PAGE [*] [*]
- --------------------------------------------------------------------------------
Finished Product to be shipped under refrigerated conditions at 2-8 (degrees)C
10. PRODUCT SPECIFIC VALIDATIONS. The party indicated in the table below will
conduct, or cause to be conducted, the Product specific validations defined in
the following table for conformance to the applicable Specification:
- --------------------------------------------------------------------------------
VALIDATION TYPE RESPONSIBLE ENTITY PERFORMING COMPLETION
PARTY VALIDATION DATE
- --------------------------------------------------------------------------------
Bacterial Endotoxin - conducted SP SP Completed
on the first three lots of each
strength of each formula and
repeated as required by SP's
SOP's
- --------------------------------------------------------------------------------
* An asterisk indicates confidential material has been omitted from
this document and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
-5-
- --------------------------------------------------------------------------------
VALIDATION TYPE RESPONSIBLE ENTITY PERFORMING COMPLETION
PARTY VALIDATION DATE
- --------------------------------------------------------------------------------
Bacteriostasis/Fungistasis -- SP SP Completed
conducted on the first lot of
each strength of each formula
and repeated as required by SP's
SOP's
- --------------------------------------------------------------------------------
Analytical Method for the API ISTA ISTA Completed
(in-process)
- --------------------------------------------------------------------------------
Technology transfer of ISTA & SP ISTA & SP
analytical method for in-process
testing
- --------------------------------------------------------------------------------
Analytical Method for the API ISTA ISTA Completed
(ID)
- --------------------------------------------------------------------------------
Technology transfer of ISTA & SP ISTA & SP Completed
analytical method for ID test
- --------------------------------------------------------------------------------
Analytical Method for the Product ISTA ISTA Completed
- --------------------------------------------------------------------------------
Filter (includes bacterial ISTA [*]
retention, extractables,
integrity test values and
compatibility)
- --------------------------------------------------------------------------------
Chemical Container-Closure ISTA [*]
Integrity
- --------------------------------------------------------------------------------
Microbial Container-Closure SP SP
Integrity
- --------------------------------------------------------------------------------
Product Process (including media SP SP
runs, lyophilization cycle,
stirring and bulk solution
stability validations)
- --------------------------------------------------------------------------------
Cleaning validation SP SP
- --------------------------------------------------------------------------------
Shipping ISTA & SP ISTA & SP
- --------------------------------------------------------------------------------
* An asterisk indicates confidential material has been omitted from
this document and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
-6-
EXHIBIT B
PRICING
PROJECT INITIATION FEES
- --------------------------------------------------------------------------------
Project Initiation Fee [*] Per project
- --------------------------------------------------------------------------------
Creation of Master Batch Record [*] Per product
and associated records.
Includes:
- Master Batch Record
- Sample Schedule
- Analytical Methods and Specifications
- Lyophilization Cycle
- Component Specifications
- --------------------------------------------------------------------------------
Bacteriostasis Fungistasis, [*] Per product formulation
USP/EPBio-burden, USP/EP and
Bacterial Endotoxin validation, USP/EP.
- --------------------------------------------------------------------------------
METHOD TRANSFERS
- --------------------------------------------------------------------------------
UV Method Transfer Protocol MT-01-015 [*] Per method transfer
- --------------------------------------------------------------------------------
UV Method Transfer Protocol MT-02-023 [*] Per method transfer
- --------------------------------------------------------------------------------
PREVIOUSLY MANUFACTURED PROCESS VALIDATION LOTS
- --------------------------------------------------------------------------------
Manufacturing up to [*] vials of [*] Lot IVS001
finished drug product in Room 252
[*] lyophilization cycle)
Does NOT Include:
- Labeling
- Carton
- --------------------------------------------------------------------------------
Manufacturing up to [*] vials of [*] Per batch
finished drug product in Room Lots IVS002, IVS003 and
252 [*] lyophilization cycle) IVS004
Does NOT Include:
- Labeling
- Carton
- --------------------------------------------------------------------------------
VALIDATIONS
- --------------------------------------------------------------------------------
Filter Validation [*] Per validation
Includes:
- Bacterial Retention
- Extractables
- Integrity Test Values
- Compatibility Studies
- --------------------------------------------------------------------------------
* An asterisk indicates confidential material has been omitted from
this document and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
- --------------------------------------------------------------------------------
CMC Section of FDA Submission [*] Per submission
- --------------------------------------------------------------------------------
Stopper Drying, if necessary [*] Per run
- --------------------------------------------------------------------------------
Stopper Extractables Study TBD Vendor cost plus [*]
- --------------------------------------------------------------------------------
Media Run #1 [*] Per run
Includes:
- Standard SP Protocol
- Up to [*] vials
- --------------------------------------------------------------------------------
Media Run #2 & 3 [*] Per run
Includes:
- Standard SP Protocol
- Up to [*] vials
- --------------------------------------------------------------------------------
PROCESS VALIDATION -- RUN #1 FOR [*] VIALS
INCLUDES: [*] per run when
- - Protocol write-up Re-filtration is NOT
- - Following standard SP protocols required
to perform the following studies:
Mixing study which includes up to [*]
- 8 pH and
- 8 Hyaluronidase activity assays NOTE: The Process
per lot validation pricing in
Holding study which includes up to this box will not apply
- 9 pH and to validation of batch
- 9 Hyaluronidase activity assays sizes larger than [*]
per lot vials. SP will requote
Lyophilization Study: All testing to as necessary.
be performed by Ista.
- --------------------------------------------------------------------------------
PROCESS VALIDATION -- RUN #2 & 3 FOR [*] VIALS [*] per run when
INCLUDES: Re-filtration is NOT
- - Following standard SP protocols required
to perform the following studies:
Mixing study which includes up to [*]
- 8 pH and
- 8 Hyaluronidase activity assays NOTE: The Process
per lot validation pricing in
Holding study which includes up to this box will not apply
- 9 pH and to validation of batch
- 9 Hyaluronidase activity assays sizes larger than [*]
per lot vials. SP will requote
Lyophilization Study: All testing to as necessary.
be performed by Ista.
- --------------------------------------------------------------------------------
Cleaning Validation [*] Per validation, if
required
- --------------------------------------------------------------------------------
Cleaning Verification [*] Per verification, if
required
- --------------------------------------------------------------------------------
* An asterisk indicates confidential material has been omitted from this
document and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
-2-
PROCESS VALIDATION LOTS
- --------------------------------------------------------------------------------
Manufacturing up to [*] vials of finished [*] Per batch
drug product in Room 252 [*]
lyophilization cycle)
Does NOT Include:
- - Labeling
- - Carton
- --------------------------------------------------------------------------------
Manufacturing up to [*] vials of finished [*] Per batch
drug product in Room 252 [*]
lyophilization cycle)
Does NOT Include:
- - Labeling
- - Carton
- --------------------------------------------------------------------------------
Manufacturing up to [*] vials of finished [*] Per batch
drug product in Room 252 [*]
lyophilization cycle)
Does NOT Include:
- - Labeling
- - Carton
- --------------------------------------------------------------------------------
Manufacturing up to [*] vials of finished [*] Per batch
drug product in Room 252 [*]
lyophilization cycle)
Does NOT Include:
- - Labeling
- - Carton
- --------------------------------------------------------------------------------
Manufacturing up to [*] vials of finished [*] Per batch
drug product in Room 252 [*]
lyophilization cycle)
Does NOT Include:
- - Labeling
- - Carton
- --------------------------------------------------------------------------------
Manufacturing up to [*] vials of finished [*] Per batch
drug product in Room 252 [*]
lyophilization cycle)
Does NOT Include:
- - Labeling
- - Carton
- --------------------------------------------------------------------------------
* An asterisk indicates confidential material has been omitted from this
document and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
-3-
COMMERCIAL SUPPLY MANUFACTURE
- -------------------------------------------------------------------------------------------------------------------
ACTIVITY PRICE FOR JAPANESE DISTRIBUTION PRICE FOR DISTRIBUTION IN ALL OTHER
COUNTRIES IN THE TERRITORY COMMENTS
OTHER THAN JAPAN
- -------------------------------------------------------------------------------------------------------------------
Manufacture a theoretical [*] per batch for the first [*] per batch for the first Prices are
yield of [*] vials of finished [*] vials in each batch, plus [*] vials in each batch, plus based on
drug product for commercial [*] for each additional vial [*] for each additional vial annual
distribution [*] manufactured over [*] vials, manufactured over [*] vials, quantities.
lyophilization cycle). including samples, if the including samples, if the
Does NOT Include: total number of vials total number of vials
- - Labeling Labor and manufactured to date during manufactured to date during
Materials the calendar year of such the calendar year of such
- - Packaging Labor and manufacture is less than [*] manufacture is less than [*]
Materials vials. vials.
[*] per batch for the first [*] per batch for the first
[*] vials in each batch, plus [*] vials in each batch, plus
[*] for each additional vial [*] for each additional vial
manufactured over [*] vials, manufactured over [*] vials,
including samples, if the including samples, if the
total number of vials total number of vials
manufactured to date during manufactured to date during
the calendar year of such the calendar year of such
manufacture is between [*] manufacture is between [*]
vials and a maximum vial vials and a maximum vial
production of [*] vials. production of [*] vials.
- -------------------------------------------------------------------------------------------------------------------
Manufacture a theoretical [*] per batch for the first [*] per batch for the first Prices are
yield of [*] vials of finished [*] vials in each batch, plus [*] vials in each batch, plus based on
drug product for commercial [*] for each additional vial [*] for each additional vial annual
distribution [*] manufactured over [*] vials manufactured over [*] vials quantities.
lyophilization cycle). including samples, if the including samples, if the
Does NOT Include: total number of vials total number of vials
- - Labeling Labor and manufactured to date during manufactured to date during
Materials the calendar year of such the calendar year of such
- - Packaging Labor and manufacture is less than [*] manufacture is less than [*]
Materials vials. vials.
[*] per batch for the first [*] per batch for the first
[*] vials in each batch, plus [*] vials in each batch, plus
[*] for each additional vial [*] for each additional vial
manufactured over [*] vials, manufactured over [*] vials,
including samples, if the including samples, if the
total number of vials total number of vials
manufactured to date during manufactured to date during
the calendar year of such the calendar year of such
manufacture is between [*] manufacture is between [*]
vials and a maximum vial vials and a maximum vial
production of [*] vials. production of [*] vials.
- -------------------------------------------------------------------------------------------------------------------
Manufacture a theoretical [*] per vial if the total [*] per vial if the total Prices are
yield of [*] -- [*] vials of number of vials manufactured number of vials manufactured based on
finished drug product for to date during the calendar to date during the calendar annual
commercial distribution [*] year of manufacture is less year of manufacture is less quantities.
lyophilization cycle) than [*] vials. than [*] vials.
Does NOT Include: [*] per vial if the total [*] per vial if the total
- - Labeling Labor and number of vials manufactured number of vials manufactured
Materials to date during the calendar to date during the calendar
- - Packaging Labor and year of manufacture is between year of manufacture is between
Materials [*] and a maximum vial [*] and a maximum vial
production of [*] vials. production of [*] vials.
- -------------------------------------------------------------------------------------------------------------------
* An asterisk indicates confidential material has been omitted from this
document and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
-4-
- -------------------------------------------------------------------------------------------------------------------
Manufacture a theoretical [*] per vial if the total [*] per vial if the total Prices are
yield of [*] vials of number of vials manufactured number of vials manufactured based on
finished drug product for to date during the calendar to date during the calendar annual
commercial distribution [*] year of manufacture is less year of manufacture is less quantities.
lyophilization cycle). than [*] vials. than [*].
Does NOT Include:
- - Labeling Labor and [*] per vial if the total [*] per vial if the total
Materials number of vials manufactured number of vials manufactured
- - Packaging Labor and to date during the calendar to date during the calendar
Materials year of manufacture is year of manufacture is
between [*] and [*] vials. between [*] and [*] vials.
[*] per vial if the total [*] per vial if the total
number of vials manufactured number of vials manufactured
to date during the calendar to date during the calendar
year of manufacture is year of manufacture is
between [*] and a maximum between [*] and a maximum
vial production of [*] vial production of [*]
vials. vials.
- -------------------------------------------------------------------------------------------------------------------
Manufacture a theoretical [*] per vial if the total [*] per vial if the total Prices are
yield of [*] vials of number of vials manufactured number of vials manufactured based on
finished drug product for to date during the calendar to date during the calendar annual
commercial distribution. [*] year of manufacture is less year of manufacture is less quantities.
lyophilization cycle) than [*] vials. than [*] vials.
Does NOT Include:
- - Labeling Labor and [*] per vial if the total [*] per vial if the total
Materials number of vials manufactured number of vials manufactured
- - Packaging Labor and to date during the calendar to date during the calendar
Materials year of manufacture is year of manufacture is
between [*] and [*] vials. between [*] and [*] vials.
[*] per vial if the total [*] per vial if the total
number of vials manufactured number of vials manufactured
to date during the calendar to date during the calendar
year of manufacture is year of manufacture is
between [*] and a maximum between [*] and a maximum
vial production of [*] vial production of [*]
vials. vials.
- -------------------------------------------------------------------------------------------------------------------
Manufacture a theoretical [*] per vial if the total [*] per vial if the total Prices are
yield of [*] vials of number of vials manufactured number of vials manufactured based on
finished drug product for to date during the calendar to date during the calendar annual
commercial distribution. [*] year of manufacture is less year of manufacture is less quantities.
lyophilization cycle) than [*] vials. than [*] vials.
Does NOT Include:
- - Labeling Labor and [*] per vial if the total [*] per vial if the total
Materials number of vials manufactured number of vials manufactured
- - Packaging Labor and to date during the calendar to date during the calendar
Materials year of manufacture is year of manufacture is
between [*] and [*] vials. between [*] and [*] vials.
[*] per vial if the total [*] per vial if the total
number of vials manufactured number of vials manufactured
to date during the calendar to date during the calendar
year of manufacture is year of manufacture is
greater than [*] vials, with greater than [*] vials, with
no maximum vial production, no maximum vial production,
except as limited by except as limited by
lyophilizer capabilities. lyophilizer capabilities.
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* An asterisk indicates confidential material has been omitted from this
document and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
-5-
ANNUAL PRODUCT REVIEW
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ACTIVITY PRICE COMMENT
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Annual Product Review [*] Per year
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Artwork and approvals for vial label, carton and insert SP's Vendor Cost Plus [*] Copies of signed artwork
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MISCELLANEOUS
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ACTIVITY PRICE
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Consulting/Assistance of development staff including, Billed at [*] per hour depending on the person involved,
but not limited to Product manufacture support, plus materials.
telephone consultation and meetings.
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SP's reasonable travel costs will be billed at SP's To Be Determined, per trip
actual cost and shall include air fare, hotel,
transportation, and per diem.
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Miscellaneous Dedicated Equipment & Supplies -- Tanks, Vendor cost to SP plus shipping, handling, taxes and [*]
HPLC Columns, etc. if required handling fee.
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Shipping All Product and samples are shipped FOB SP's WAREHOUSE.
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Product Storage No charge for the first [*] weeks following issuance of
a Product Batch record by SP. SP shall charge the
following storage fees for Product stored beyond [*]
weeks following issuance of the Product Batch record by
SP:
Refrigerated Storage: [*] per pallet* per month
*Or portion of one (1) pallet
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* An asterisk indicates confidential material has been omitted from this
document and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
-6-
EXHIBIT C
BILL AND HOLD REQUEST
(On ISTA Letterhead)
ISTA Pharmaceuticals, Inc. ("ISTA") acknowledges that SP Pharmaceuticals ("SP")
has recently manufactured the following product lots for ISTA: [insert lot
numbers] (the "Manufactured Product").
ISTA further acknowledges that (i) ISTA has made a fixed commitment to purchase
such Product, (ii) risk of ownership for such Product passes to ISTA, (iii) ISTA
has requested that such Product be on a Bill and Hold basis for legitimate
business purposes, (iv) if no delivery date is determined at the time of
billing, SP shall have the right to ship the Product to ISTA if SP does not
receive a request for delivery within six (6) months after ISTA receives an
invoice from SP, and (v) ISTA will be responsible for any decrease in market
value of such Product that relates to factors and circumstances outside of SP's
reasonable control.
Sincerely,
[name and position]
EXHIBIT D
SHIPPING DOCUMENTATION
1. Certificate of Analysis for each Batch of Product
2. Certificate of Origin for Product that is to be Distributed outside of the
United States.
3. Certificates designating that the raw material for each lot of API that
contributes to the Product lot was derived from TSE free herds (to be
provided by ISTA to SP upon delivery of API to SP as provided in the
Agreement).