EXHIBIT 10.51
Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as ***. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.
COMMERCIAL
CONTRACT MANUFACTURING AGREEMENT
BETWEEN
OSG NORWICH PHARMACEUTICALS, INC.
AND
CELGENE CORPORATION
APRIL 26, 2004
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
THIS COMMERCIAL CONTRACT MANUFACTURING AGREEMENT (the "Agreement") is
made this 26th day of April, 2004 (the "Agreement Date"), by and between Celgene
Corporation ("Celgene"), a Delaware corporation with a principal place of
business at 7 Powder Horn Drive, Warren, New Jersey 07059, and OSG NORWICH
PHARMACEUTICALS, INC ("NPI"), a Delaware corporation with a principal place of
business at 6826 State Highway 12, Norwich, NY 13815 USA.
RECITALS
A. Celgene is engaged in the business of, among other things,
developing and gaining regulatory approval for certain pharmaceutical products.
B. NPI is in the business of contract manufacturing and packaging
pharmaceutical products, and providing related services.
C. Celgene has agreed to purchase from NPI, and NPI has agreed to
provide to Celgene, certain manufacturing and quality assurance services
relating to certain of Celgene's products, on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, Celgene and NPI (the "Parties") agree as follows:
ARTICLE 1 - DEFINITIONS
The following terms used in this Agreement shall have the meanings set forth
below. Other terms of less general applicability are defined where appropriate
and are listed in the List of Defined Terms in the Appendix.
1.1 "Confidential Information" means any and all trademarks,
trademark applications, trade names, copyrights, patents, patent applications,
technical information, know-how, formulae, processes, clinical studies, trade
secrets, confidential and/or proprietary information and other know-how,
information, documents and/or materials, technology, formulations,
specifications, testing data and analytical methods and other information which
would be considered a trade secret under the Uniform Trade Secrets Act as in
force and effect in the State of New York.
1.2 "Manufacture", or any variation thereof, means all operations
necessary to produce the Products to the specified state of completion in
accordance with the terms and conditions of this Agreement. Without limiting the
foregoing, the term "Manufacture" shall include (i) all receipt and storage of
Materials incident to such operations, and (ii) the performance of all quality
control procedures pertaining to the Products which are required by applicable
regulations on the Agreement Date, and/or which become required by such
regulations after the Agreement Date.
1.3 "Product" or "Products" means those products of Celgene more
fully described on Schedule 1.3 in the presentation forms listed in Schedule
1.3.
1
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
1.4 "Materials" means raw materials (chemicals) and packaging
materials used to Manufacture and package Products.
1.5 "Specifications" mean the written methods, formulae,
procedures, specifications, tests (and testing protocols) and standards
pertaining to each presentation form of the Products set forth in Schedule 1.5,
as modified from time to time.
1.6 "Laws, Rules and Regulations" means current Good Manufacturing
Practices as promulgated by the U.S. FDA as detailed in Title 21, United States
Code of Federal Regulations, or when appropriate, any corresponding statutes
and/or regulations of any other country's prescription pharmaceuticals
regulating health authority / agency.
1.7 "Latent Defect" means a deviation to Product Specifications
that was discovered after the Product was shipped to the Celgene.
1.8 "Supply Term" means the period starting on the Agreement Date
and continuing for the initial term of this Agreement and any subsequent
extension period as set forth in Section 7.1 hereof, subject to any earlier
termination of this Agreement pursuant to Section 7.2 hereof.
ARTICLE 2 - SUPPLY OF PRODUCT
2.1 OBLIGATIONS OF THE PARTIES.
(a) RELATIONSHIP OF THE PARTIES. No partnership, joint
venture, or agency relationship is created between the Parties with respect to
this Agreement.
(b) MANUFACTURE OF PRODUCTS. Subject to the terms and
conditions hereof, NPI shall Manufacture Products in accordance with all
applicable Laws, Rules and Regulations, and the Specifications provided to NPI
by Celgene.
(c) PRODUCT RECALLS. Celgene shall be responsible for
conducting product recalls and shall promptly notify NPI of any recall notice
for supplied Products. NPI shall use commercially reasonable efforts to
cooperate with and assist Celgene in the performance of such duties and
obligations. NPI shall promptly notify Celgene if it receives any notice,
including a recall notice, which is related to any Product. NPI shall pay for
all out-of-pocket cost and expenses excluding consequential damages arising from
any recall resulting from NPI's breach of this Agreement.
(d) ADVERSE DRUG EXPERIENCE REPORTS. Celgene shall be
responsible for filing, with the responsible regulatory body in any country
where Celgene markets products, any and all adverse drug reaction reports that
it receives.
(e) PRODUCT COMPLAINTS. Celgene shall have the
responsibility for fielding, investigating, and responding to all Product
complaints. NPI shall provide reasonable cooperation in promptly investigating
and reporting to Celgene the results of investigations for all Product
complaints that may involve the Products not meeting the Specifications.
2
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
2.2 TECHNOLOGY RIGHTS. Subject to the terms and conditions hereof,
NPI shall have the right to use Celgene's Confidential Information, which
relates in any way to the Products, solely to Manufacture the Products for
Celgene or Celgene's successors or assigns. The Parties acknowledge and agree
that Celgene is the owner of its Confidential Information and that NPI has no
ownership rights thereto, and no right to use Celgene's Confidential Information
except as provided in this Agreement.
2.3 PURCHASE, RECEIPT AND STORAGE OF MATERIALS. Celgene shall
supply the active pharmaceutical ingredient ("API") for the Products to NPI, at
no cost to NPI. NPI shall, at its own cost, be responsible to receive and store
such API, and purchase, receive and store all other Materials to support the
Manufacture of Products.
2.4 SHIPMENT OF FINISHED GOODS. All finished, labeled Products
delivered hereunder to Celgene shall have proper dating on the labels. All
Products delivered to Celgene hereunder shall be shipped Free Carrier (FCA per
INCOTERMS 2000) NPI plant by a common carrier ("Carrier") approved and paid for
by Celgene. NPI shall ship such quantities to the destinations(s) and at the
time(s) specified in the Purchase Order (as defined in Section 3.1 hereof) by
Celgene or its designee. Celgene will designate an approved Carrier or will
provide a schedule of approved Carriers of which NPI will choose one from the
list.
2.5 LABELING AND PACKAGING OF SUPPLIED PRODUCTS. Celgene shall, at
its own cost and expense, supply NPI with the mechanical design of artwork for
all Products labeling ("Printed Matter") to be used by NPI in connection with
packaging the Products. Each set of such artwork, and each partial set and/or
alteration or amendment thereto, for each piece of Printed Matter, shall be
identified by a unique item control number or code (the "Code") supplied by the
Celgene, or Celgene's designated vendor, which is consistent with NPI's existing
control practices. All physical specifications of all Printed Matter shall
comply with NPI's control numbering system, quality control requirements, and
reasonable manufacturing process constraints as provided by NPI. Celgene shall
specify the Code for each item of Printed Matter to be supplied with each order
for Products hereunder. All Products delivered to Celgene hereunder shall
include the Printed Matter as specified in the Purchase Order for such shipment.
2.6 INSPECTIONS. Upon reasonable prior written notice, during
NPI's regular business hours, and subject to NPI's normal confidentiality and
safety regulations governing visitors, Celgene's representatives shall have the
right to enter and inspect the facility at which the Products are Manufactured
and to receive upon request samples of the Products being Manufactured.
ARTICLE 3 - PURCHASE OF PRODUCT
3.1 PURCHASE OBLIGATION. Celgene shall purchase and receive from
NPI, and NPI shall sell and deliver to Celgene or its designated agent Products
to be ordered pursuant to the terms hereof in the quantities and timing set
forth in each purchase order issued by Celgene (each a "Purchase Order"). The
cost of shipping all such Products shall be borne by Celgene. Title and risk to
Products shipped by NPI in accordance with the terms and conditions of this
Agreement shall pass to Celgene upon acceptance by the Carrier.
3
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
3.2 PRODUCTION SCHEDULING. At least thirty (30) days prior to the
start of each calendar quarter during the Supply Term, Celgene or its designated
agent shall, by written notice hereunder, deliver to NPI: (i) a Purchase Order
setting forth the Products to be purchased during the next succeeding calendar
quarter (the "Next Quarter") and the quantity in amounts at or above the minimum
order quantities set forth in Schedule 3.2 hereto and the desired delivery
date(s) (which date(s) shall be no more than once per month during the Next
Quarter) for each quantity so ordered; and (ii) a written forecast (the
"Forecast") of Celgene's expected requirements of Products and the presentation
forms thereof for the next three (3) calendar quarters after the Next Quarter,
together with the expected quantity and delivery date(s) for each quantity so
forecast to be ordered during such quarters. NPI shall provide capacity to
accommodate Product volume increases in the Next Quarter and subsequent
quarterly forecasts of at least 25%. Celgene may not reject as non-conforming
orders filled within 10% of the requested order quantity, provided that the
Products are otherwise satisfactory.
(a) RELEASE FOR SHIPMENT. NPI shall release for shipment
quantities of Product consistent with each Purchase Order. If there is any
discrepancy between the terms of a Purchase Order and the terms of this
Agreement, the terms of this Agreement shall control.
(b) LIMITATIONS. In no event shall NPI be obligated to
deliver to Celgene in the Next Quarter more than *** percent (***%) of the total
quantity set forth in the last forecast issued by Celgene for the Next Quarter.
If the Purchase Order in the Next Quarter is more than *** percent (***%) of the
total quantity set forth in such Next Quarter forecast, NPI shall use reasonable
efforts to determine feasibility of meeting the Purchase Order request. If
feasible, NPI shall produce and invoice Celgene for any premium costs required
to deliver the product that exceeds *** percent (***%) of such Next Quarter
forecast. If the Purchase Order in the Next Quarter is less than *** percent
(***%) of the immediately preceding Next Quarter forecast, NPI shall invoice
Celgene a carrying fee for raw materials held in inventory that are reasonably
allocable to such shortfall, in an amount equal to *** percent (***%) of NPI's
cost of such excess raw materials.
3.3 TESTING AND CERTIFICATE OF ANALYSIS. NPI shall provide a
certificate of analysis ("Certificate of Analysis") to Celgene or its designated
agent with each shipment of supplied Product made hereunder. Such Certificate of
Analysis shall certify with respect to each shipment and lot (identified by
batch/lot or control number): (i) the quantity of the shipment and (ii) that the
Product delivered was manufactured in accordance with the Specifications and the
Master Batch Records and documented according to requirements of Laws, Rules and
Regulations and applicable production standard operating procedures.
3.4 TESTING UPON DELIVERY. Promptly following receipt of the
Products in any shipment, Celgene may check the compliance of such batch with
the Specifications. Such compliance check shall be performed by Celgene's
quality assurance and control departments and shall be certified by the head of
such department (or his/her designee). If Celgene deems that any Products
delivered to Celgene hereunder fail to conform to the Specifications, then
Celgene shall notify NPI thereof in writing (such notice to include test
results) within *** days from delivery of such Products to Celgene, or in the
case of Products having Latent Defects, which upon diligent examination in
accordance with the quality control testing procedures and
4
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
set out in the Specifications upon receipt could not have been discovered,
within *** days after Celgene's discovery of such Latent Defect. Celgene shall
retain the non-conforming Products and NPI shall have the right to inspect such
Products.
(a) UNDISPUTED CLAIMS. NPI shall, if it agrees with
Celgene's non-conformance assessment, replace any such Products with an equal
quantity of Products complying with the Specifications at no cost to Celgene and
without undue delay subject to the provisions of Section 8.3 of this Agreement
(force majeure). Celgene shall dispose of any Products which are not in
compliance with the Specifications at NPI's cost, and in compliance with all
applicable laws, except that, upon request, Celgene shall follow any reasonable
instructions from NPI to return such Products to NP1 at NPI's cost.
(b) DISPUTED CLAIMS. If NPI does not agree with Celgene's
non-conformance assessment, then NPI shall notify Celgene of such disagreement
within *** days of receipt of notice of deficiency. If the Parties cannot
themselves resolve such disagreement within *** business days of Celgene's
receipt of NPI's notice of disagreement, then the matter shall be submitted
(without undue delay) to an independent qualified laboratory agreed by the
Parties to determine whether the Products in question conform to Specifications.
The assessment of such laboratory shall be binding upon the Parties and any
related expense shall be borne by the Party whose analysis was in error. In the
event that NPI is the Party in error, NPI shall replace the applicable Products
in accordance with Section 3.4(a) above as if it had not disputed Celgene's
non-conformance assessment.
3.5 VIOLATIONS. Each Party shall notify the other of any violation
of any Laws, Rules and Regulations applicable to the Products alleged by a third
party promptly following receipt of notice of such allegation.
ARTICLE 4 - PRICING AND PAYMENT TERMS
4.1 PRICING. The price (the "Price") for Products Manufactured
hereunder is shown in Schedule 4.1.
(a) MATERIAL PRICES. Starting the January after the first
full calendar year of commercial production of Product, NPI may notify Celgene
of any changes in Material pricing. Changes to Material pricing may include
supplier price increases or decreases, and may include adjustments to yield and
scrap losses associated with the overall capability of the manufacturing
process. NPI shall provide Celgene with at least *** days' prior written notice
of any changes in Material pricing, and NPI shall reasonably substantiate any
increase in Material pricing in such written notice. NPI shall have the right
adjust Material pricing no more than once in any twelve (12) month period.
(b) NON-MATERIAL COSTS. Components of NPI's cost of the
Products and the Manufacture thereof, other than the cost of Materials, shall be
hereinafter referred to as "Non-Material Costs." Non-Material Costs included in
the Price set forth in Schedule 4.1 attached hereto shall be considered firm
during the first *** months of commercial production of Product. After such ***
month period and for each subsequent *** month period during the
5
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
Supply Term, NPI shall have the right to adjust Non-Material Costs by a
percentage equal to the percentage increase in the Producer Price Index
published by the Bureau of Labor Statistics, U.S. Department of Labor for the
preceding *** month period. Any adjustment to Non-Material Costs shall be
effective for all orders received by NPI after written notice of such increase
by NPI to Celgene, such notice showing the calculation of such increase.
4.2 PAYMENT TERMS. The Price for all Product Manufactured
hereunder shall be due and owing to NPI net *** days from shipment and
notification to Celgene thereof, unless such Product is held for more than ***
days, then payment shall be due net *** days from Celgene's receipt of an
invoice upon release of such Product. NPI may withhold subsequent deliveries of
Product or take other action it deems appropriate should Celgene fail to pay
within the stated terms.
4.3 CAPITAL. Capital investment to be paid by Celgene is shown in
Schedule 4.3. NPI shall invoice Celgene at time of purchase and payment terms
shall be net *** days from the date of Celgene's receipt of an invoice therefor.
4.4 PRE-PRODUCTION. Validation and other start-up costs to be paid
by Celgene are shown in Schedule 4.4. NPI shall invoice Celgene for such
services rendered monthly and payment terms shall be net *** days from the date
of Celgene's receipt of an invoice therefor.
4.5 PRODUCT SCRAP. In the event that NPI incurs Product scrap
costs which are (i) caused by process capability issues inherent in the
production formulation and/or design and (ii) not within the control of NPI or
its personnel and (iii) not caused by the failure of NPI and/or its personnel to
comply with all Laws, Rules and Regulations with respect to the Manufacture of
such Product, Celgene shall replace the API for the Product scrapped at
Celgene's expense, and NPI may invoice Celgene for environmental disposal fees
actually incurred and documented by NPI for the scrapped Product. NPI shall be
responsible for all other costs and expenses associated with such scrapped
Product. In the event that NPI incurs Product scrap costs which are (a) not
caused by process capability issues inherent in the production formulation
and/or design or (b) within the control of NPI or its personnel or (c) caused by
the failure of NPI and/or its personnel to comply with all Laws, Rules and
Regulations, NPI shall be responsible for all costs and expenses associated with
such scrapped Product, including, without limitation, reimbursing Celgene for
the out-of-pocket API costs therefore.
ARTICLE 5 - CHANGE MANAGEMENT
5.1 REQUIRED MANUFACTURING CHANGES. With respect to changes to the
Specifications or manufacturing process which are required by applicable Laws,
Rules and Regulations or by action (or inaction) of any legally-competent
government or other regulatory body or authority, or by medical or scientific
concerns as to the toxicity, safety, and/or efficacy of the Products
(collectively, "Required Manufacturing Changes"), the Parties shall cooperate in
making such changes promptly. The cost of effecting Required Manufacturing
Changes shall be borne by NPI; provided, however, that if such costs are
material and ongoing, Celgene and NPI shall negotiate in good faith a price
adjustment to compensate NPI for such material and ongoing costs. In cooperating
in making such changes, Celgene shall be responsible for communicating
6
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
with regulatory agencies with respect to the health registrations and marketing
authorizations for the Products. Required Manufacturing Changes: (i) do not
include changes to the labeling only (which are dealt with in Section 5.3
hereof), and (ii) do include changes resulting from or arising out of changes to
or withdrawal of third party Materials. Celgene shall be responsible for the
costs associated with any required change in sourcing of the API, including any
regulatory submission charges and process validation costs.
5.2 DISCRETIONARY MANUFACTURING CHANGES. With respect to changes
to the Specifications or the manufacturing process for Products which are not
Required Manufacturing Changes (collectively, "Discretionary Manufacturing
Changes"), the Parties shall, to the extent commercially reasonable under the
circumstances, cooperate in making such changes and the Party initiating such
change(s) shall bear all the costs associated with and resulting from any such
changes. If the proposed change requires a prospective process validation or
regulatory submission, then the costs to execute and resource such validation or
submission shall be the responsibility of the initiating Party. All regulatory
submissions will be filed by Celgene.
5.3 LABELING CHANGES. With respect to changes to the Printed
Matter, the Parties shall cooperate in making such changes promptly and Celgene
shall, unless otherwise agreed, reimburse NPI for all remaining obsolete stock
of Products, all inventory of Printed Matter (at NPI's actual out-of-pocket cost
plus *** percent (***%)) and all remaining obsolete work in process of Products
resulting from any such change or amendment to the Printed Matter. Celgene may,
at any time during the Supply Term, change or amend any item of the Printed
Matter by notice hereunder, such change or amendment to be effective after
appropriate advance written notice thereof.
5.4 CHANGES TO SPECIFICATIONS. Celgene may make changes to the
Specifications from time-to-time, provided that all such changes, including
Required Manufacturing Changes, are to be communicated to NPI in writing.
5.5 AUTHORIZATIONS. During the Supply Term, NPI shall obtain and
maintain in force all licenses and authorizations necessary for NPI to
Manufacture Products. Celgene shall bear all costs associated with maintenance
of the health registrations for the Products. Except as may be required by
Sections 5.1 or 5.2 hereof, NPI shall bear the full cost and expense of so
obtaining and maintaining such licenses and authorizations. Celgene shall give
NPI all help reasonably necessary to assist NPI in so obtaining and maintaining
such licenses and authorizations and shall bear the full cost and expense of so
assisting NPI. In the event Celgene Products require licenses in a new country
or territory, Celgene shall pay the costs of new license requirements.
ARTICLE 6 - LIABILITIES AND INDEMNIFICATION
6.1 REPRESENTATIONS AND WARRANTIES.
(a) NPI. NPI hereby represents and warrants to Celgene
that (i) it has the power and authority to enter into this Agreement and to
perform its obligations hereunder; (ii) all work to be performed under this
Agreement, including the Manufacture of all Products,
7
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
shall be performed in a professional manner, in accordance with all applicable
Laws, Rules and Regulations, including all health and safety ordinances; and
(iii) NPI has all licenses, permits and other authorizations necessary to
fulfill its obligations under this Agreement.
(b) CELGENE. Celgene hereby represents and warrants to
NPI that (i) it has the power and authority to enter into this Agreement and to
perform its obligations hereunder; (ii) it is the owner of all proprietary
information, or the holder of licenses thereto, necessary to allow NPI to
Manufacture the Products, and, to its knowledge, no Products, when Manufactured
in accordance with the Specifications, will infringe upon the rights of any
third party; and (iii) it has all licenses, permits, and other authorizations
necessary to fulfill its obligations under this Agreement.
6.2 PRODUCT WARRANTIES. NPI represents and warrants to Celgene
that the Products shall, on the date of delivery to the Carrier: (i) meet the
requirements therefore set forth in the Specifications; (ii) not be adulterated
within the meaning of Section 501 of the United States Food, Drug and Cosmetics
Act and the regulations promulgated thereunder as each may be amended from time
to time (collectively, the "Act"); and (iii) comply in all material respects
with all federal, state and local laws (including without limitation all Laws,
Rules and Regulations) applicable to the Manufacture of the Products in
accordance with the Specifications. NPI makes no warranties with respect to the
Products other than those specifically set forth in this section. No other
warranty is expressed or implied by NPI including any warranty of
merchantability or fitness for a particular purpose and none shall be implied.
Further, all warranties with respect to the Products shall not apply to any
Product that is subsequently altered by the Celgene or the Carrier. NPI shall
not be liable for Celgene's consequential, incidental, special or indirect
damages resulting from the use, handling, transportation, or storage of the
Product, even if NPI has been made aware of the possibility of such damages.
Except as otherwise set forth herein, the extent of NPI liability shall not
exceed contract value.
6.3 CELGENE INSURANCE. Celgene shall provide NPI with evidence
that it has in place the following policies with a reputable and responsible
insurance carrier, which shall remain in full force and effect throughout the
Supply Term: (i) all risk property insurance policy covering the full
replacement cost of Celgene's property in NPI's possession or under its control;
(ii) general liability including product and completed operations coverage in a
minimum amount of $*** insuring NPI against liability for injury to persons
occurring in, upon, or adjacent to NPI's facilities. Celgene shall provide
evidence that NPI has been named as an additional insured under the policies
described herein during the Supply Term.
6.4 NPI INSURANCE. NPI shall provide Celgene with evidence that it
has in place with a reputable and responsible insurance carrier, which shall
remain in full force and effect throughout the Supply Term, a minimum amount of
$*** insuring NPI against liability for Product defects.
6.5 CELGENE INDEMNITY. Notwithstanding anything to the contrary in
this Agreement, Celgene shall indemnify, defend and hold harmless NPI, NPI's
affiliates, and each of their respective officers, directors (past, present and
future) employees, representatives and
8
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
agents from and against any and all third party claims, loss, damage, liability,
payment, and obligation, and all expenses, including without limitation
reasonable legal fees (collectively, "Losses") whether such Losses are based in
contract, strict liability, negligence, warranty, statutes or regulations, or
any other legal theory, including without limitation injury to or death of
persons and/or property or contamination of or adverse effect on humans,
animals, aquatic life or the environment, based upon, arising out of or
otherwise in respect of: (1) the Manufacture, use, sale or distribution of the
Products, provided such Products were in compliance with the warranties set
forth in the first sentence of Section 6.2, (ii) any claim threatened or brought
against NPI alleging that the Specifications for any Product, including the
labeling for such Product, violate any applicable United States federal, state,
or local rule, regulation, law or ordinance, to the extent that such
Specifications were provided to NPI by Celgene, provided such Products were in
compliance with the warranties set forth in the first sentence of Section 6.2,
(iii) any inaccuracy in or breach of any representation, warranty, or covenant
made by Celgene in this Agreement; (iv) the willful misconduct or any negligent
or reckless acts or omissions of any of Celgene's officers, directors, agents,
affiliates, employees and/or representatives, or any allegations of the same
made by any third party; (v) any claim threatened or brought against NPI
alleging that the Manufacture, in accordance with the design or Specifications
of any Product, as provided to NPI by Celgene, infringes upon any intellectual
property interest of a third party, (vi) any product warranty claim or product
liability claim threatened or brought against NPI with respect to the Products,
provided such Products were in compliance with the warranties set forth in the
first sentence of Section 6.2, and (vii) any claim, including damage to any
property, or injury to any person (including Celgene's employees,
representatives, agents, associates, or other persons invited by Celgene to
inspect NPI's facilities on behalf of Celgene), arising out of, or related to
the inspection of NPI's facilities contemplated by Section 2.6 of this
Agreement, provided that such damage or injury is not caused by the negligence
or willful misconduct of any NPI employee, contractor or agent or any defect in
such facilities.
6.6 NPI INDEMNITY. Notwithstanding anything to the contrary in
this Agreement, NPI shall indemnify, defend and hold harmless Celgene and
Celgene's affiliates, and each of their respective officers, directors (past,
present and future) employees, representatives and agents from and against any
and all Losses, based upon, arising out of or otherwise in respect of: (i) the
failure of the Products transferred to Celgene hereunder to meet the
requirements of Section 6.2 hereof, (ii) bodily injury or property damage in
connection with the Manufacture of the Products; (iii) any breach by NPI of any
representation, warranty or covenant of this Agreement; or (iv) the willful
misconduct or any negligent or reckless acts or omissions of any of NPI's
officers, directors, agents, affiliates, employees and/or representatives, or
any allegations of the same made by any third party.
6.7 JOINT NEGLIGENCE. If any Loss incurred by or rendered against
either Party is determined by an independent tribunal to be due to the
negligence or willful misconduct of both NPI and Celgene, then the Parties shall
share the costs attributable to such Loss (including but not limited to the cost
of defense thereof) in accordance with the proportion of each Party's relative
fault, as determined by the independent tribunal. Each Party shall give the
other notice of any Loss to which it believes the preceding sentence applies and
the Parties shall cooperate in the defense thereof in accordance with the terms
of this Section 6.7.
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*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
6.8 NOTICE AND OPPORTUNITY TO DEFEND. Promptly after becoming
aware of a Loss as to which a Party is entitled to indemnification under this
Agreement, such Party (the "Claiming Party") shall notify the other (the
"Indemnifying Party") of such Loss. The failure or delay in providing such
notice shall not relieve the Indemnifying Party of its obligations other than to
the extent it was materially prejudiced by such failure or delay. Upon receipt
of such notice, the Indemnifying Party will handle and control the defense of
such Loss. If both Parties claim indemnification hereunder for the same Loss or
if the Indemnifying Party in good faith rejects the claim of indemnity, then the
Claiming Party will handle and control the defense of the Loss against it,
pending final resolution of the Parties' respective claims for or with respect
to indemnity hereunder. At the time of such resolution, defense costs incurred
pursuant to the preceding sentence shall be apportioned between the Parties in
the same manner as the Parties share ultimate liability for the underlying Loss
pursuant to Sections 6.5, 6.6 or 6.7 hereof. In all cases, the Party not
handling and controlling such defense shall cooperate in such defense and may,
at its own expense, participate in such defense through counsel of its choice.
An Indemnifying Party shall not dispose of or agree to dispose of a Loss without
the prior written approval of the Claiming Party which approval shall not be
unreasonably withheld, conditioned or delayed.
ARTICLE 7 - TERM AND TERMINATION
7.1 TERM. Subject to the provisions of Section 7.2 hereof, the
initial term of this Agreement shall commence on the Agreement Date and shall
continue in full force and effect, unless otherwise terminated earlier, for a
period of *** months from the commencement date of commercial production. The
term of this Agreement shall be extended automatically for *** terms unless
Celgene gives NPI written notice at least *** before the expiration of the
then-current term that the term shall not be extended.
7.2 TERMINATION. This Agreement may not be terminated at any time
except in accordance with the terms and conditions of Section 7.2.
(a) DEFAULT. This Agreement may be terminated by written
notice by either Party if the other Party breaches any material provision of
this Agreement and does not remedy such breach within *** days of written notice
of breach unless such breach cannot be remedied within such *** day period, in
which case such breach must be remedied as soon as commercially reasonable
diligence will permit.
(b) TERMINATION WITHOUT CAUSE. Celgene may, at any time,
terminate its obligation to purchase or supply Product, by giving written notice
to NPI at least *** days prior to the effective date of such termination.
(c) TERMINATION WITH CAUSE. Either Party may terminate
this Agreement at any time effective upon delivery of written notice of such
termination, upon the occurrence of any of the following: (i) improper
assignment of this Agreement by the non-terminating Party; (ii) an assignment
for the benefit of creditors by the non-terminating Party; or (iii) commencement
of voluntary or involuntary liquidation proceedings by the non-terminating
Party.
10
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
7.3 EFFECTS OF TERMINATION. Except in the event of a termination
of this Agreement by Celgene pursuant to Sections 7.2(a) or (c), if NPI has
quantities of raw materials or packaging materials in excess of Celgene
requirements therefore after expiration or termination of this Agreement, or if
NPI is required to order quantities of such raw materials or packaging materials
in excess of Celgene requirements therefore after termination of this Agreement,
Celgene shall, upon such termination, purchase all finished product at the
agreed prices and such Materials at NPI out-of-pocket cost plus *** percent
(***%) F.O.B. producing plant.
ARTICLE 8 - GENERAL PROVISIONS
8.1 CONFIDENTIALITY. During the Supply Term, and for a period of
five (5) years thereafter, the Parties, and all of their respective employees,
agents, representatives, and advisors, shall maintain in confidence all of the
other Party's Confidential Information, and shall not disclose Confidential
Information to any third party, or use Confidential Information in any way or
for the benefit of any person other than as expressly permitted in this
Agreement. For the purposes of this covenant, the Parties shall have no
obligation with respect to any information which: (i) has been either published
or is otherwise in the public domain or subsequently enters the public domain
without breach of the confidentiality obligations hereunder; (ii) is lawfully
acquired from a third party under no obligation of confidentiality, directly or
indirectly, to the owner of the Confidential Information; or (iii) is legally
required to be disclosed pursuant to applicable law, regulation, court order or
in connection with a legal proceeding. If either Party is required by law to
disclose the other's Confidential Information, the disclosing Party will
promptly notify the owner of the Confidential Information of the requirement and
will cooperate in all reasonable respects with the owner of the Confidential
Information to limit the amount of information to be disclosed.
8.2 INTELLECTUAL PROPERTY.
(a) NPI agrees that any and all right, title and interest
in and to any patentable and/or copyrightable material, notes, data, results,
records, inventions, improvements, developments, discoveries and trade secrets
made, conceived, reduced to practice, or discovered in the Manufacture of
Products that consists of or relates to the Products, the use, formulation or
manufacture thereof, or any other material, product or process belonging to
Celgene or its licensors, or to any improvement(s), enhancement(s) or
refinement(s) of any of same, shall be the sole property of Celgene ("Celgene
Inventions"). NPI further agrees to assign (or cause to be assigned) and does
hereby assign fully to Celgene all such Celgene Inventions and any patents,
copyrights or other intellectual property rights relating thereto. In addition,
to the extent allowed by law, any Celgene Inventions which constitute
copyrightable subject matter shall be considered "works made for hire" as that
term is defined in the United States Copyright Act. All Celgene Inventions and
any information with respect thereto shall be deemed Confidential Information
hereunder and be subject to the confidentiality provisions of Section 8.1 above.
(b) Upon the termination of this Agreement, or upon
Celgene's earlier request, NPI will deliver to Celgene all of Celgene's property
relating to, and all tangible embodiments of, Celgene Inventions in NPI's
possession or control.
11
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
(c) NPI agrees to assist Celgene, or Celgene's designee,
at Celgene's expense, to obtain and from time to time enforce and defend
Celgene's rights in the Celgene Inventions and any copyrights, patents or other
intellectual property rights relating thereto in any and all countries, and to
execute all documents reasonably necessary for Celgene to do so.
(d) NPI agrees that if Celgene is unable because of NPI's
unavailability, dissolution, or for any other reason, to secure NPI's signature
to apply for or to pursue any application for any United States of America or
foreign patents or copyright registrations covering the Celgene Inventions, then
NPI hereby irrevocably designates and appoints Celgene and Celgene's duly
authorized officers and agents as NPI's agent and attorney-in-fact, to act for
and in NPI's behalf and stead to execute and file any such applications and to
do all other lawfully permitted acts to further the prosecution and issuance of
patents and copyright registrations thereon with the same legal force and effect
as if executed by NPI.
(e) NPI represents and warrants that each employee and
independent contractor of NPI has executed a written agreement with NPI
sufficient for NPI to fulfill its obligations to Celgene under this Section 8.2,
including, without limitation, an obligation on the part of each such employee
and independent contractor to assign any and all Celgene Inventions to NPI.
8.3 FORCE MAJEURE.
(a) NPI shall not be subject to any liability for delay
in performance or nonperformance hereunder as a result and to the extent of
contingencies and circumstances beyond its reasonable control (including, but
not limited to, fire, flood, or other natural catastrophe, strike, labor
trouble, accident, riot, war, act of governmental authority, or act of God)
interfering with the Production, supply, transportation or receipt of Product or
with the supply of any Materials used in the Manufacture thereof.
(b) Except where the nature of the event shall prevent it
from doing so, if NPI suffers such force majeure it shall promptly notify
Celgene in writing after the occurrence of such force majeure and shall in every
instance, to the extent reasonable and lawful under the circumstances, use its
best efforts to remove or remedy such cause with all reasonable dispatch.
(c) When the force majeure conditions in question cease
to exist, NPI shall promptly notify Celgene in writing about the force majeure
termination.
(d) Should a circumstance of force majeure prevent
performance of this Agreement by NPI for a continuous three (3) month period,
Celgene may terminate this Agreement upon thirty (30) days written notice,
provided that such notice is given during the continuance of such force majeure.
8.4 SEVERABILITY. If any provision of this Agreement is found or
declared to be invalid or unenforceable by any court or other competent
authority having jurisdiction, such finding or declaration will not invalidate
any other provision hereof and this Agreement shall thereafter continue in full
force and effect, except that such invalid or unenforceable provision, and (if
necessary) other provisions thereof, shall be reformed by a court of competent
jurisdiction
12
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
so as to effect, insofar as is practicable, the intention of the Parties as set
forth in this Agreement, provided that if such court is unable or unwilling to
effect such reformation, the invalid or unenforceable provisions shall be deemed
deleted to the same extent as if they had never existed.
8.5 GOVERNING LAW; VENUE. The provisions of this Agreement shall
be governed in the internal laws of the State of New Jersey, USA without regard
to the conflict of laws and rules thereof. Any action, suit or other proceeding
initiated by either Party hereto under or in connection with this Agreement may
be brought in any Federal or state court in the State of New York having
jurisdiction over the subject matter thereof as the Party bringing such action,
suit or proceeding shall elect. The Parties hereby submit themselves to the
jurisdiction of any such court and agree that service of process on them in any
such action, suit or proceeding may be effected by the means by which notices
are to be given to it under this Agreement.
8.6 REMEDIES. No right or remedy herein conferred upon the Parties
is intended to be exclusive of any other right or remedy, and each and every
right or remedy shall be cumulative and in addition to any other right or remedy
given hereunder or now or hereafter existing at law or in equity or by statute.
8.7 ATTACHMENTS. The attachments to this Agreement are hereby
incorporated in and made a part of this Agreement. The Parties may, by mutual
consent, amend any attachment hereto at any time during the term hereof by
executing a version of such attachments dated after the then current version
thereof.
8.8 WAIVER: AMENDMENT. Any waiver by either Party hereto of a
breach or a default of any provision of this Agreement by any other Party hereto
shall not be construed as a waiver of any succeeding breach of the same or any
other provision, nor shall any delay or omission on the part of any Party hereto
to exercise or avail itself of any right, power or privilege that it has or may
have hereunder operate as a waiver of any such right, power or privilege by such
Party. Any amendment or supplementation of this Agreement shall be effective
only if in writing signed by both of the Parties hereto.
8.9 COUNTERPARTS. This Agreement may be executed in two
counterparts, each of which shall be deemed an original but both of which
together shall constitute one and same instrument. The Parties have agreed that
for this purpose, facsimile signatures will be accepted as originals.
8.10 SURVIVAL. The provisions of Sections 2.1(c), 2.1(e), 2.2, 3.4,
3.5, 6.1, 6.2, 6.5, 6.6, 6.7, 6.8 and 7.3 and Article 8 shall survive the
expiration or termination of this Agreement for as long as necessary to permit
their full discharge.
8.11 ENTIRE AGREEMENT. This Agreement and all exhibits and
attachments hereto constitute the full understanding of the Parties, a complete
allocation of risk between them, and a complete and exclusive statement of the
terms and conditions of their agreement relating to the Manufacture of Product
hereunder and supersedes and replaces any and all prior or contemporaneous
agreements, arrangements, understandings, and negotiations, whether written or
oral, that may exist between the Parties with respect to the subject matter
hereof.
13
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
Except as provided otherwise in this Agreement, no conditions, usage of trade,
course of dealing or performance, understanding or agreement purporting to
modify, vary, explain or supplement the terms or conditions of this Agreement
shall be binding on the Parties unless described as a modification or amendment
of this Agreement made in writing and signed by the Parties to be bound. No
modification hereof shall be effected by the acknowledgement or acceptance of
any purchase order or shipping instruction forms containing terms and conditions
at variance with those set forth in this Agreement.
8.12 ASSIGNMENT. Neither this Agreement nor any claim arising
directly or indirectly out of or in connection with the performance of either
Party hereunder shall be assignable by either Party hereto without the prior
written consent of the other Party, which shall not be unreasonably withheld.
The foregoing shall not include merger or acquisition of either Party, or an
assignment by Celgene to an affiliate of Celgene or to any successor in interest
(by license or otherwise) to Celgene's business with respect to the Product, but
in any event, notification must be provided in writing within *** days of any
such merger, acquisition, or assignment. No such assignment or transfer shall
relieve or release the assignor or transferor from any of its liabilities or
obligations under this Agreement.
8.13 NOTICE. All communications under this Agreement shall be in
writing and shall be either faxed, sent by courier (Federal Express or
equivalent), or mailed by first-class mail, postage pre-paid, to the fax number
and/or address specified below. If faxed, such communication shall be deemed to
be given when sent; provided, however, that such fax shall be confirmed by
sending a hard copy by courier or first-class mail (by methods specified herein)
within one (1) working day of the sending of such fax. If sent by courier or
mailed by first-class mail as specified below, such communication shall be
deemed to be given either two (2) business days after sending (for communication
sent by courier) or five (5) business days after mailing (for communication sent
by mail). Either Party may change its address for notice purposes by complying
with the provisions of this Section 8.13. All communications hereunder shall be
sent:
(a) if to NPI, at its address shown below or such other
address as it may give to Celgene by notice
hereunder:
President
OSG Norwich Pharmaceuticals, Inc.
6826 State Highway 12
Norwich, NY 13815
Fax: (607) 335-3100
(b) if to Celgene, at its address shown below or such
other address as it may give to NPI by notice
hereunder:
President
Celgene Corporation
7 Powder Horn Drive
Warren, NJ 07059
Fax: 732-805-3931
14
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
with a copy to: ***
Celgene Corporation
7 Powder Horn Drive
Warren, NJ 07059
Fax: 732-805-3931
[End of text; signature page follows]
15
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
CELGENE OSG NORWICH PHARMACEUTICALS,
INC.
(Celegne) (NPI)
By: By:
*** ***
- ------------------------------------- ------------------------------------
TITLE: TITLE:
*** ***
- ------------------------------------- ------------------------------------
16
*** - indicates material omitted pursuant to a Confidential Treatment Request
and filed separately with the Securities and Exchange Commission.