Exhibit 10.15
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
MANUFACTURING AGREEMENT
BY AND BETWEEN
XANODYNE PHARMACEUTICALS, INC.
AND
▇.▇. LABORATORIES, INC.
MANUFACTURING AGREEMENT
BY AND BETWEEN
XANODYNE PHARMACEUTICALS, INC. AND ▇.▇. LABORATORIES, INC.
THIS MANUFACTURING AGREEMENT is made this 30th day of April 2007 by and between:
(1) ▇.▇. LABORATORIES, INC., a corporation organized under the laws of the
State of Michigan and having a principal place of business at ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Manufacturer"); and
(2) XANODYNE PHARMACEUTICALS, INC., a corporation organized under the laws of
the State of Delaware and having a principal place of business at ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Xanodyne"):
RECITALS:
WHEREAS Xanodyne now wishes to appoint Manufacturer as a manufacturer of the
products set forth in Attachment A and Manufacturer wishes to be appointed as a
manufacturer of said products; and
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements set forth herein, Manufacturer and Xanodyne (individually a "Party",
collectively the "Parties") covenant and agree as follows:
ARTICLE 1: DEFINITIONS
In this Agreement the following expressions shall have the following meanings:
"Actions" shall have the meaning set forth in Section 10.1.
"Active Ingredient(s)" means the ingredients set forth in Attachment B for
use in the Manufacture of Product.
"Active Ingredient Specifications" means the specifications for the Active
Ingredients as set forth in, referenced in or delivered pursuant to the
Quality Agreement, as such specifications may be amended from time to time
by mutual written agreement of the Parties.
"Acquisition Cost" shall mean the actual invoiced price paid by
Manufacturer to any Third Party for acquiring Raw Material for purposes of
the Manufacturing of Product, including, but not limited to, shipping,
handling and testing costs and customs duties incurred and paid by
Manufacturer to any Third Party in connection with the acquisition of Raw
Materials.
"Affiliate" means any company, partnership or other entity which directly
or indirectly controls, is controlled by or is under common control with
the Party in question. For this purpose, "control" means the power to
direct actions, management or policies whether
through the ownership of more than 50% of the issued share capital or other
equity interest, by contract, declaration of trust or otherwise.
"Agreement" means this Manufacturing Agreement as amended, restated or
otherwise modified from time to time.
"Aggrieved Party" shall have the meaning set forth in Section 10.1.
"Applicable Laws" means all applicable federal, state, local and foreign
laws, rules and regulations, including, without limitation, the United
States Federal Food, Drug and Cosmetic Act, as amended, FDA regulations and
those laws, rules and regulations concerning environmental requirements and
the transportation of the Product if Manufacturer is responsible for
shipment.
"Batch" shall mean batches of Product in the sizes set forth in Attachment
A hereto.
"CGMP's" means the industry standards with regard to the interpretation and
implementation of the regulations described in 21 CFR 210 and 211, as such
may be amended from time to time.
"Competing Product" means, with respect to a Product, (i) any
pharmaceutical product which contains some or all of the Active Ingredients
which directly competes with such Product; or (ii) any pharmaceutical
product that an industry recognized data source, such as, by way of example
and not exclusion, First DataBank, Gold Standard or Medispan, classifies as
a substitutable product for such Product.
"Confidential Information" shall be broadly construed and shall include,
but is not limited to, any and all current and future proprietary product
information, technical, financial, employment related, regulatory or
legally sensitive information, customer names, addresses and related data,
contracts, practices, procedures, software, hardware, files and other
business information including but not limited to specifications,
compounds, ingredients, formulae, recipes, samples, reports, methods,
strategies, plans, documents, drawings, machines, tools, models inventions,
patent disclosures, Know-How and materials that may be disclosed between
the Parties heretofore or hereafter whether received or obtained prior to
or after the Effective Date or developed as a result of entering into or
performing this Agreement and whether in written, oral, electronic,
website-based or other form including information obtained during facility
tours, but shall not include information which:
(a) is in the public domain at the date of this Agreement or
subsequently comes into the public domain otherwise than through
breach of the terms of this Agreement by the recipient;
(b) the receiving Party can prove was in its possession at the date
of disclosure or which subsequently comes into its possession
without in either case being subject to any obligation of
confidentiality to the disclosing Party; or
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(c) can be demonstrated to have been developed independently by the
recipient without the aid of or reference to information
disclosed to the recipient hereunder.
"Cost" means the actual cost incurred by Manufacturer calculated in
accordance with U.S. GAAP (United States generally accepted accounting
principles) and using the normal standard cost accounting and allocation
methods and procedures of Manufacturer consistently applied.
"Delivery Date" means the date for the delivery of a Product shipment, as
stated in the applicable purchase order for such shipment.
"Effective Date" means the date first written above.
"Expert" means a Third Party with expertise in pharmaceutical product
manufacturing who is appointed by written agreement of Manufacturer and
Xanodyne.
"FDA" means the United States Food and Drug Administration or any successor
thereto.
"Force Majeure" means any circumstances beyond the reasonable control of a
Party including, without limitation, flood, war, terrorism, insurrection,
acts of God, governmental action or inaction, accident, strike, fire or
explosion which are not the result of the Party's negligence.
"Improved Technology" shall mean any development, improvement, modification
or extension of a Party's Intellectual Property Rights arising under or
resulting from performance of this Agreement or otherwise developed during
the Term.
"Intellectual Property Rights" means all rights in and to Confidential
Information and Know-How, patents (including applications therefor and
supplementary protection certificates) copyrights, trademarks, service
marks or similar rights.
"Know-How" means data, knowledge, techniques, inventions, designs,
drawings, health and safety information including without limitation
material safety data sheets, tests, reports, procedures, processes, models,
manuals, formulae, systems, experiments, samples, specimens, results,
statistics, research, tables of operating conditions and the like and all
other know-how and information and including without limitation:
(a) analytical standards for analysis of Products and Raw Materials
and/or the manufacture thereof;
(b) in-process quality assurance standards and methods of production;
(c) hazard data, storage requirements and manufacturing records;
(d) safety procedures, manuals and systems, process parameters; and
(e) Batch records.
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"Liability" shall have that meaning set forth in Section 10.2.
"Manufacture" shall have the meaning set forth in Section 2.1.
"Manufacturer Know-How" means all Know-How owned by Manufacturer prior to
the Effective Date and, subject to Section 8.2, developed by Manufacturer
after the Effective Date without reliance on the Xanodyne Intellectual
Property provided to Manufacturer hereunder.
"Manufacturer Improved Technology" means any Improved Technology based upon
Manufacturer's Intellectual Property.
"Manufacturer Intellectual Property" means all Intellectual Property Rights
owned by Manufacturer from time to time, including without limitation
Manufacturer Improved Technology.
"Manufacturing Problem" shall have that meaning set forth in Section 11.1.
"Packaging Specifications" means the packaging and labelling specifications
for the Product set forth in, referenced in or delivered pursuant to the
Quality Agreement, as such specifications may be amended from time to time
by mutual written agreement of the Parties.
"Plant" means the premises of Manufacturer situated at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ or such other cGMP compliant facility of
Manufacturer approved by Xanodyne for the purpose of Manufacture hereunder.
"Product(s)" means Xanodyne's pharmaceutical product(s) identified in
Attachment A in finished form to the relevant Product Specifications in
both finished packaged product and bulk packaged product; provided,
however, that any pharmaceutical products that would otherwise constitute a
"Product" pursuant to the foregoing definition shall not constitute a
"Product" if such pharmaceutical product is reformulated or is manufactured
using Intellectual Property Rights and/or Know-How different than that used
as of the date hereof.
"Product Specifications" means the specifications for the Products set
forth in, referenced in or delivered pursuant to the Quality Agreement
including master batch records, process specifications and analytical
methods, as such specifications may be amended from time to time by mutual
written agreement of the Parties.
"Quality Agreement" means the Quality Agreement between the Parties dated
April 30, 2007 as may be amended, restated or otherwise modified from time
to time, which is hereby incorporated herein by reference. The Quality
Agreement is attached hereto as Attachment C.
"Quarter" means a period of three (3) calendar months commencing January 1,
April 1, July 1 and October 1 in each year during the Term of this
Agreement provided however that if the Effective Date is a date other than
the first day of a Quarter, the first Quarter
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shall be that period beginning on the Effective Date and ending immediately
before the next Quarter.
"Raw Materials" means, in relation to each Product, the Active Ingredients,
excipients and packaging materials used in the Manufacture thereof.
"Raw Material Specifications" means the specifications relating to the
handling, warehousing, and storage of Raw Materials as set forth in,
referenced in or delivered pursuant to the Quality Agreement, as such
specifications may be amended from time to time by mutual written agreement
of the Parties.
"Regulatory Authority" means any relevant government authority (or
successor agency thereof) responsible for granting any regulatory approval
or marketing authorization in connection with the Products or otherwise
having jurisdiction over the Products or its marketing, manufacture or
shipment, as applicable.
"Renewal Term" shall have the meaning set forth in Section 12.1.
"Specification" means each of the following as they relate to Active
Ingredients, Raw Materials and/or Products as appropriate:
(a) the Product Specifications,
(b) the Raw Material Specifications,
(c) the Packaging Specifications, or
(d) the Active Ingredient Specifications,
"Stock-out" means any point in time that Xanodyne has no inventory of
Product on hand. "Term" shall have the meaning as set forth in Section
12.1.
"Third Party" means any person, or entity other than the Parties to this
Agreement or any of their respective Affiliates, officers or employees.
"Unit" shall mean the quantity of Product referred to in Attachment A.
"Unit Price" means the Price of a Unit identified in Attachment A and
established pursuant to Article 5 and includes the sole cost for
Manufacturer to Manufacture and supply the Product to Xanodyne, including,
without limitation the Cost of Raw Materials.
"Xanodyne Improved Technology" means any Improved Technology based upon
Xanodyne's Intellectual Property.
"Xanodyne Intellectual Property" means all Intellectual Property Rights
owned or used by Xanodyne or its Affiliates in relation to the Product(s)
prior to the Effective Date or developed for or by Xanodyne after the
Effective Date, including without limitation Xanodyne Improved Technology.
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"Xanodyne Know-How" means any and all Know-How owned or used by Xanodyne or
its Affiliates in relation to the Product(s) or Active Ingredients or the
Manufacture thereof prior to the Effective Date and developed for or by
Xanodyne after the Effective Date.
"Year" means the period from the Effective Date to December 31, 2007 and
each subsequent calendar year beginning January 1, 2008 thereafter during
the Term of this Agreement.
ARTICLE 2: MANUFACTURE AND SUPPLY OF PRODUCTS AND RAW MATERIALS
2.1 Manufacture of Product. Manufacturer shall conduct exclusively for Xanodyne
and its Affiliates the following activities in relation to each Product:
blending, compressing, coating, testing and packaging and all activities
related thereto, including, without limitation, warehousing and storage
("Manufacture") and shall supply Product to Xanodyne and Xanodyne's
Affiliates pursuant to purchase orders delivered by Xanodyne to
Manufacturer subject to the terms and conditions of this Agreement.
Xanodyne shall purchase at least [**] percent ([**]%) of Xanodyne's annual
requirements for each Product from Manufacturer, subject to the terms and
conditions of this Agreement and in accordance with the following
provisions.
2.1.1 Manufacturer shall, subject to Section 3.2.2, Manufacture the
quantity of Product ordered by Xanodyne and its Affiliates, and
Manufacturer shall not manufacture, supply or sell the Products for or
to any Third Party.
2.1.2 All Product shall be Manufactured by Manufacturer at its Plant in
accordance with the Specifications, using Xanodyne Intellectual
Property where appropriate.
2.1.3 Manufacturer shall have responsibility for the manufacture,
processing, testing, storage, treatment and handling of all Product in
accordance with the Specifications and the Quality Agreement,
including processing, testing, storage, treatment and handling of Raw
Materials. Manufacturer shall also have sole responsibility for
disposing of all Product and wastes arising from Manufacturer's
failure to comply with the Specifications and for performance of all
of its obligations hereunder in accordance with all Applicable Laws.
2.2 Active Ingredient. At a minimum, Manufacturer shall order the necessary
quantities of Active Ingredients at appropriate intervals to meet
Xanodyne's Purchase Orders. Manufacturer will accommodate up to [**]% of
Xanodyne's forecast, provided Purchase Orders are delivered pursuant to
Section 4.1.
2.3 Raw Materials. Raw Materials, including Active Ingredients, excipients and
packaging materials, shall be acquired by Manufacturer from Third Parties
designated and approved by Xanodyne in writing pursuant to the Quality
Agreement.
2.4 Expiry. All Finished Packaged Product Manufactured pursuant to this
Agreement shall have an expiry period of not less than [**] months after
shipment of the Product by Manufacturer. All Bulk Packaged Product
Manufactured pursuant to this Agreement
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shall be shipped to Xanodyne's designated warehouse or affiliates within
[**] months from the date of manufacture.
ARTICLE 3: FORECASTS; ORDERS
3.1 Twelve Month Forecast. Simultaneously with the submission of the first
purchase order for the Products and within 30 days of the beginning of each
Quarter thereafter, Xanodyne shall deliver to Manufacturer for its review a
forecast of Xanodyne's Unit requirements for each Product for each of the
following 12 months. Except as provided in Section 3.2 and 2.1, the
forecasts provided by Xanodyne pursuant to this Section 3.1 shall not be
binding on Manufacturer or Xanodyne in any way.
3.2 Forecast Variances. The forecast for Product requirement for the first
Quarter given pursuant to Section 3.1 shall constitute a binding obligation
of Manufacturer to Manufacture and of Xanodyne to accept and purchase,
quantities of Product set forth in such forecast as follows:
3.2.1 Xanodyne shall be required to purchase no less than [**] percent
([**]%) of forecasted quantities in the first Quarter.
3.2.2 Manufacturer shall be required, if requested by Xanodyne, to
Manufacture and supply to Xanodyne up to [**] percent ([**]%) of
forecasted quantities in the first Quarter, provided that purchase
orders are issued pursuant to Section 4.1.
All other forecasts under this Agreement and updates thereof shall be for
the sole purpose of assisting Manufacturer in its planning and will not
constitute an obligation of Xanodyne to purchase the quantities of Product
indicated. Notwithstanding the foregoing, in the event a product that an
industry recognized data source, such as, by way of example and not
exclusion, First DataBank, Gold Standard or Medispan, classifies as a
substitutable product for a Product is sold by a Third Party, Xanodyne's
obligations set forth in Sections 3,2.1 with respect to such Product shall
immediately terminate, except to the extent that Xanodyne will be obligated
with respect to all open purchase orders.
ARTICLE 4: PURCHASE OF PRODUCT; DELIVERIES
4.1 Purchase Orders. Except to the extent the Parties may otherwise agree with
respect to a particular shipment, Product shall be ordered by Xanodyne
pursuant to written purchase orders, which shall be sent to Manufacturer
with not less than [**]days' "lead time" prior to the Delivery Dates.
Manufacturer shall supply Product in such quantities on the Delivery Dates
therefor. Any increase in the quantities beyond the [**]% increase
allowable pursuant to Section 3.1, or any acceleration of the Delivery
Dates for any Product, shall be subject to Manufacturer's prior approval;
provided that Xanodyne shall be responsible for any cost increases or
incremental costs which may be incurred by Manufacturer in meeting such
requests.
4.1.1 Except to the extent Applicable Laws otherwise require, quantities
actually shipped pursuant to a given purchase order may vary from the
quantities reflected in such purchase order by up to [**]% and still
be deemed to be in compliance
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with such purchase order. Xanodyne shall only be invoiced and required
to pay for the quantities of Product which Manufacturer actually
delivers to Xanodyne.
4.1.2 If a particular shipment is not delivered within 30 days of the
Delivery Date, Xanodyne may in its sole discretion, on or after the
31st day after such Delivery Date, impose a [**]% reduction in the
Unit Price for such shipment. In addition, if such shipment has not
been delivered within 60 days or 90 days after the Delivery Date,
Xanodyne may in its sole discretion, on or after the 61st and 91st day
after such Delivery Date, as applicable, impose additional [**]%
reductions in the Unit Price for such shipment. Xanodyne will not be
entitled to price reductions if any delay is solely attributable to
actions or non-performance on Xanodyne's part.
4.2 Manufacturer shall furnish to Xanodyne with each shipment of Product
ordered by Xanodyne hereunder, (i) a certificate of analysis; (ii) a
certificate of conformance, reflecting that such Product conforms to the
relevant Specifications, and (iii) all documentation required by Applicable
Laws or any Regulatory Authority.
4.3 Xanodyne shall not be required to take receipt of a Batch of Finished
Packaged Product with less than [**] months' expiry and Bulk Packaged
Product past [**] months from the date of manufacture; provided that
Xanodyne and Manufacturer may nonetheless negotiate in good faith for
Xanodyne to purchase the Batch.
4.4 Delivery Terms. The terms of delivery for the Product shall be Free On
Board (Incoterms 2000) Manufacturer's Plant. When designated for shipment
to Xanodyne's designated warehouse, Xanodyne will designate the carrier for
shipment from the Plant provided that Manufacturer has approved such
carrier for the Plant, such approval not to be unreasonably withheld or
delayed. Risk of loss and transfer of title shall stay with Manufacturer
and shall not pass to Xanodyne until the carrier's receipt of the Product.
When designated for shipment to other than Xanodyne's designated warehouse,
Manufacturer shall pre-pay freight and add such amount to the invoice for
the Product shipped. Xanodyne reserves the right to designate the carrier
for shipment from the Plant provided that Manufacturer has approved such
carrier for the Plant, such approval not to be unreasonably withheld or
delayed. Risk of loss and transfer of title shall stay with Manufacturer
and shall not pass to Xanodyne until the carrier's receipt of the Product.
ARTICLE 5: FINANCIAL PROVISIONS
5.1 Unit Price
5.1.1 Subject to adjustments set forth in this Agreement, Xanodyne shall
pay to Manufacturer the Unit Price for each Unit Manufactured and
delivered by Manufacturer in accordance with the terms of this
Agreement and the provisions set forth in Attachment A.
5.1.2 All payments due hereunder to Manufacturer are due [**] days from the
date of Xanodyne's receipt of Manufacturer's invoice, which invoice
shall be sent out concurrently with shipment of Product.
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5.2 Raw Material/Active Ingredient Costs. The Cost of all Raw Materials and
Active Ingredient acquired by Manufacturer for the Manufacture of Product
shall be paid by Manufacturer and shall be incorporated into the Unit Price
paid by Xanodyne for the Product.
5.3 Miscellaneous Costs. The following Costs shall be borne or allocated as
follows:
5.3.1 the Costs of auditing alternative suppliers shall be borne by
Manufacturer unless the requirement of such additional supplier arises
as a result of the direction or request of Xanodyne; in which case
such Costs shall be borne by Xanodyne;
5.3.2 the Costs of routine stability testing by Manufacturer shall be
billed on an annual basis. Should additional stability testing beyond
routine testing be required or requested by one of the Parties, the
Parties shall negotiate in good faith regarding who shall bear the
costs related to any such additional testing;
5.3.3 Costs for Manufacturer to develop validation methodology as requested
by Xanodyne shall be reasonably negotiated between the Parties for the
account of Xanodyne.
5.4 Price Adjustments.
5.4.1 Subject to the limitations set forth in Sections 5.4.2, 5.4,3 and
5.4.5, Manufacturer shall have the right to adjust the Unit Price as
of January 1, 2008 and each succeeding January 1 during the Term to
reflect:
5.4.1.1 the net percentage change in the Manufacturer's Costs of
manufacture due to change in the Costs of Raw Materials
(excluding (i) Raw Materials owned by Manufacturer previous to
its change in purchase Costs of same and (ii) those Costs that
are covered under one or more of Manufacturer's long-term
purchasing agreements); and
5.4.1.2 changes in (i) [**], (ii) [**], (iii) [**] or (iii) [**]
(which costs are included in the Unit Price).
5.4.2 Any Unit Price adjustment pursuant to Section 5.4,1 shall be
effective on the first day of each January of the Term and applicable
for such Year. Notwithstanding the immediately preceding sentence, no
Unit Price increase shall be effective unless and until Xanodyne shall
have received from Manufacturer at least 90 days prior written notice
("Unit Price Adjustment Notice"), which notice shall include
reasonable supporting detail of the basis and calculations of
Manufacturer's Cost changes. On or before October 1 of each Year,
Manufacturer shall deliver such Unit Price Adjustment Notice to
Xanodyne.
5.4.3 In no event shall any increase in Unit Price pursuant to Section
5.4.1 exceed [**] percent ([**]%) of the Unit Price for the Product in
question for the previous Year. The Unit Price shall not be adjusted
more than once per Year.
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Notwithstanding the foregoing, in the case of an abnormal increase in
one or more of the Raw Materials used by Manufacturer in manufacturing
Product for Xanodyne, the two parties agree to negotiate in good faith
a revised Unit Price. Manufacturer agrees to notify Xanodyne within 30
calendar days of any abnormal increases in Raw Material costs that
will necessitate such negotiations.
5.4.4 The Unit Price may be adjusted to reflect the increase in Costs to
Manufacture Product incurred by Manufacturer in respect of and at the
time of implementing new material and mandatory safety or
environmental requirements or any new material and mandatory FDA
requirements, and which arise directly as a result of Manufacture for
Xanodyne of Product and are not related to the Plant generally or to
other products manufactured by Manufacturer at the Plant. Manufacturer
shall initiate any anticipated variation in the Unit Price pursuant to
this Section 5.4.4 by the delivery of a notice at least 30 days prior
to the intended effective date of the proposed variation. This Section
5.4.4 shall apply without regard to the limitations otherwise imposed
by Sections 5.4.1, 5.4.2, and 5.4.3.
5.4.5 No Unit Price adjustment pursuant to Section 5.4.1 or 5.4.4 shall
apply to the quantities shown on those purchase orders which were
issued to Manufacturer before the announced effective date of any
adjustment. Manufacturer shall keep complete and accurate records,
consistent with US GAAP, of the Costs associated with any Unit Price
adjustment pursuant to Section 5.4.1 or 5.4.4. Manufacturer shall
provide to Xanodyne reasonable supporting detail of the basis and
calculations of Manufacturer's Costs upon proposing a Unit Price
adjustment pursuant to Section 5.4.1 or 5.4,4.
5.4.6 The Unit Price may be adjusted to reflect the increase in Costs to
Manufacture Product incurred by Manufacturer which arise as a result
of Xanodyne instructing Manufacturer to implement a change to a
Specification. Xanodyne and the Manufacturer, prior to implementing
any change to a Specification, shall agree upon any anticipated
adjustment in the Unit Price pursuant to this Section 5.4.6 before
Manufacturer shall be required to implement a change in the
Specifications.
ARTICLE 6: CONFIDENTIAL INFORMATION AND PUBLICITY
6.1 Subject to Section 6.2 and 6.3 below, during the term of this Agreement and
for a period often years following the expiration or termination for any
reason of this Agreement each Party agrees that it will not (i) disclose to
any Third Party any Confidential Information of the other Party received in
relation to this Agreement during the Term, (ii) use such Confidential
Information for any purpose other than in accordance with its rights
hereunder and to carry out its obligations under this Agreement, or (iii)
disclose such Confidential Information to or permit its use by any person
other than such of the receiving Party's officers, employees,
sub-contractors and agents who reasonably require access to the
Confidential Information for the purpose of carrying out its rights and
obligations under this Agreement and who have an enforceable legal
obligation to the
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receiving Party of confidentiality and non-use of the Confidential
Information substantially similar to the terms hereof.
6.2 The foregoing notwithstanding, the Confidential Information may be
disclosed by the receiving Party in the event that it is required to do so
by operation of law or by a governmental authority, but only to the extent
that such disclosure has been so required or requested and provided that
the disclosing Party has been given prompt notice to enable it to seek
legal protection or confidential treatment of the Confidential Information.
6.3 Absent written authorization from the other Party, neither Xanodyne nor
Manufacturer shall originate any publicity, news release or public
announcement, written or oral, whether to the public or press, relating to
this Agreement including its existence, the subject matter to which it
relates or performance under it save only such announcement as in the
opinion of counsel for the Party making such announcement is required by
law to be made. Any such announcements shall be factual and as brief as
possible.
ARTICLE 7: RECALLS
7.1 The decision to initiate a recall, market withdrawal or other corrective
action (collectively, a "Recall") shall be made by Xanodyne in its sole
discretion.
7.2 Xanodyne shall be responsible for conducting all Recalls and shall bear the
cost of all Recalls of Product unless such Recall shall have arisen as a
result of Manufacturer's breach of this Agreement or the negligence or
wilful misconduct of Manufacturer, its Affiliates or their respective
employees, agents, or contractors, in which case Manufacturer shall bear
the cost of such Recall. For purposes of this Agreement, the cost of the
Recall shall include amounts credited to Third Parties by Xanodyne with
respect to Recalled Product.
ARTICLE 8: INTELLECTUAL PROPERTY RIGHTS
8.1 Manufacturer acknowledges and agrees that all Xanodyne Intellectual
Property is the exclusive property of and belongs to Xanodyne or its
Affiliates. Likewise, Xanodyne acknowledges that all Manufacturer
Intellectual Property is the exclusive property of and belongs to
Manufacturer or its Affiliates. Manufacturer shall be permitted to use the
Xanodyne Intellectual Property exclusively and strictly for the purpose of
carrying out its obligation to Manufacture the Product for Xanodyne or
Xanodyne's designee under this Agreement.
8.2 Xanodyne Improved Technology whether solely developed by Xanodyne or
jointly developed with Manufacturer, shall be the exclusive property of,
and belong to Xanodyne. Likewise, Manufacturer Improved Technology, whether
solely developed by Manufacturer or jointly developed with Xanodyne, shall
be the exclusive property of and belong to Manufacturer; provided however
that as to any. Improved Technology, each party shall grant to the other an
irrevocable, transferable, non-exclusive, royalty-free license to utilize
such technology or to sublicense such technology for the production of
Product. Each Party covenants that it shall, upon the request of the other
Party, assign
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and transfer to the other Party any and all right, title and interest in
any Improved Technology belonging to the other Party pursuant to this
Section 8.2 without payment of additional consideration by such other
Party.
8.3 For purposes of, and for the duration of this Agreement, each Party hereby
grants to the other a non-exclusive, royalty-free, non-transferable license
to use such Party's Intellectual Property Rights, including each Party's
Improved Technology relating thereto, for the production, sale and
distribution of Product supplied hereunder. In no event shall either Party
be permitted to make use of the other Party's Intellectual Property or the
other Party's Improved Technology for any other purpose or in the case of
Xanodyne's Intellectual Property or Improved Technology for any other
customer of Manufacturer, without the express written consent of the Party
owning the Intellectual Property Rights or the Improved Technology, which
consent may be withheld for any reason and which consent may be subject to
a royalty to be agreed upon by the Parties.
ARTICLE 9: WARRANTIES AND COVENANTS
9.1 Manufacturer represents and warrants to Xanodyne that Product supplied to
Xanodyne will be in strict compliance with the Specifications, at the time
of sale and shipment to Xanodyne by Manufacturer, and will have been
manufactured in compliance with cGMP and all provisions of this Agreement,
the Quality Agreement and all Applicable Laws. Manufacturer will replace
defective Products, provided that written notice of the defect is received
by Manufacturer within [**] days after discover of such defect by Xanodyne,
but not later than [**] months after deliver of the Products to Xanodyne;
provided however that in the case of Product having a latent defect that
could not have been discovered upon reasonable examination, Xanodyne must
only give written notice of the defect within [**] business days of
discovery of such defect.
9.2 Manufacturer represents and warrants to Xanodyne that Manufacturer is in
material compliance with all Applicable Laws with respect to each facility
and site to be used in Manufacture of Product and, to Manufacturer's
knowledge, there are no circumstances or conditions which would reasonably
be expected to prevent compliance from continuing during the duration of
this Agreement or interfere with Manufacturer's ability to Manufacture
Product, in each case, or create any financial liability on Xanodyne or its
Affiliates.
9.3 Manufacturer represents and warrants to Xanodyne that at all times during
the Term of this Agreement, Manufacturer will comply with and maintain in
force all licenses, consents, permits and authorizations which may be
required with respect to the Plant and Manufacturer's performance of its
obligations hereunder, including without limitation, licenses and permits
issued or required by the FDA and those required in relation to the
generation, storage, treatment, transport, possession, handling and
disposal of any waste and Manufacturer will Manufacture Product in strict
compliance with all such licenses, consents, permits and authorizations.
9.4 Manufacturer represents and warrants to Xanodyne that all corporate action
on the part of Manufacturer and its officers and directors necessary for
the authorization, execution and
-12-
delivery of this Agreement and the performance of all obligations of
Manufacturer hereunder has been taken.
9.5 MANUFACTURER EXPRESSLY DISCLAIMS ANY WARRANTY THAT THE PRODUCT WILL BE
MERCHANTABLE OR WILL BE FIT FOR ANY PARTICULAR PURPOSE; AND EXCEPT AS
OTHERWISE STATED HEREIN, MANUFACTURER EXPRESSLY DISCLAIMS ANY OTHER
WARRANTIES WITH RESPECT TO THE PRODUCT, EXPRESS OR IMPLIED, EXCEPT AS
EXPRESSLY STATED IN THIS AGREEMENT.
9.6 Manufacturer and Xanodyne each represent and warrant that, as of the
Effective Date of the Agreement, neither the Manufacturer Intellectual
Property nor the Xanodyne Intellectual Property, respectively, currently
infringes or violates any patent, trademark, trade name, copyright, trade
secret or other proprietary right of any Third Party. Each Party represents
and warrants that it shall take no action to intentionally infringe any
patent, trademark, trade name, copyright, trade secret or other proprietary
right of any Third Party during the Term.
9.7 Xanodyne represents and warrants to Manufacturer that, except to the extent
that any of the following are the obligations(s) of Manufacturer, (a) the
formulation, composition, use, distribution, marketing, and/or sale of
Product shall comply in all material respects with regulatory requirements
and Applicable Laws, and that Xanodyne will maintain all obligations with
respect thereto; and (b) that Product manufactured in accordance with the
Specifications will not infringe any patent or other Intellectual Property
Right of any Third Party.
9.8 Manufacturer covenants that Manufacturer shall not, during the Term,
modify, alter or otherwise change any manufacturing, processing or other
component of the Manufacture, including without limitation, the
installation of new or upgraded equipment used in the Manufacture, from
that utilized on the Effective Date without first receiving Xanodyne's
prior written consent to such modification, alteration or change, and
subject to the penultimate sentence of the Section, which consent shall not
be unreasonably withheld or delayed. Manufacturer shall deliver written
notice of such proposed modification, alteration or change to Xanodyne at
least [**] days prior to Manufacturer's intended implementation of such
modification, alteration or change; provided, however, that in the case of
an emergency Manufacturer shall only be required to provide such advance
written notice as is practicable under the circumstances. Xanodyne shall
have the right to reject and direct Manufacturer not to undertake any such
proposed modification, alteration or change if, in Xanodyne's sole opinion,
such modification, alteration or change will conflict with the
Specifications or with any Applicable Laws. Xanodyne may, in connection
with any modification proposed by Manufacturer, alteration or change
initiated by Manufacturer, require Manufacturer to produce, at
Manufacturer's sole cost and expense, validation verification batches and
any records, reports or other documentation which may be reasonably
required by Xanodyne for submission to the FDA or other Regulatory
Authority having jurisdiction over such matters.
-13-
ARTICLE 10: LIABILITY AND INDEMNITIES
10.1 Each Party shall promptly notify the other, in writing, if it learns of any
litigation, claim, administrative or criminal proceedings (collectively
"Actions"), asserted or threatened against such Party (the "Aggrieved
Party") for which such Party is entitled to indemnification hereunder from
the other Party. With respect to any such Action, the other Party shall
reasonably cooperate with and provide reasonable assistance to the
Aggrieved Party as the Aggrieved Party may reasonably request. Such
reasonable assistance may include, without limitation, providing copies of
all relevant correspondence and other materials that the Aggrieved Party
may reasonably request; provided, however, that any Confidential
Information so provided shall be treated in accordance with the provisions
of Article 6 hereof.
10.2 Xanodyne hereby agrees to defend, indemnify and hold harmless Manufacturer
and each of its Affiliates and their respective officers, director and
employees from and against any liabilities, claims, costs, expenses
(including reasonable legal fees), loss or damage (each a "Liability") to
the extent arising from (i) the, marketing, distribution, sale or use of
Product, or (ii) Xanodyne's material breach of its representations,
warranties or covenants under this Agreement or the Quality Agreement,
(iii) any proceedings instituted by or on behalf of a Third Party based
upon a claim that the manufacture, use or sales of the Products infringes a
Third Parry's Intellectual Property Rights, except, in each case, to the
extent that such Liability arises as a result of the breach of this
Agreement or the Quality Agreement by Manufacturer, except in each case, to
the extent that such liability arises as a result of the negligence or
wilful misconduct of Manufacturer, its Affiliates or their respective
employees, agents, or contractors..
10.3 Manufacturer hereby agrees to defend, indemnify and hold harmless Xanodyne
and each of its Affiliates and their respective officers, directors, and
employees from and against any Liabilities to the extent arising from (i)
Manufacturer's breach of its representations, warranties or covenants under
this Agreement or the Quality Agreement or (ii) the negligence or wilful
misconduct of Manufacturer, its affiliates or their respective employees,
agents, or contractors.
10.4 No indemnity may be claimed by or given to the Party seeking to rely on
such indemnity:
10.4.1 unless the Party claiming indemnity shall have notified the other
Party of the relevant potential Liability upon becoming aware of such
potential Liability except to the extent the failure to provide such
notice does not prejudice the indemnifying Party's ability to defend
or contest any suit or claim relating to such potential Liability,
10.4.2 where the Party seeking indemnification has made any offer or any
settlement without the prior written consent of the indemnifying
Party, which consent shall not be unreasonably withheld or delayed,
and
10.4.3 unless the Party seeking indemnification has allowed the
indemnifying Party to assume full control of all proceedings in
relation to any such potential Liability
-14-
within 30 days of having been given notice of such proceedings;
provided, that (i) the Party seeking indemnification shall have the
right to appoint independent counsel at its own cost to participate
therein and (ii) no compromise or settlement may be effected by the
indemnifying Party without the prior written consent of the other
Party.
10.4.4 The Party seeking indemnification shall cooperate fully with the
indemnifying Party and its legal representatives in the investigation
and defense of any action or claim with respect to which
indemnification is sought hereunder.
10.5 Limitation of Liability. Neither Party shall be liable to the other Party
for indirect, incidental, special or consequential damages, including
without limitation any claim for damages based upon lost profits or lost
business opportunity.
10.6 Insurance. Manufacturer and Xanodyne shall each maintain, throughout the
Term of this Agreement, the following insurance: (i) products liability in
amounts of not less than $6,000,000; and (ii) such property insurance and
carrier insurance in amounts to cover the replacement value of Product and
any and all property used in relation to Manufacture of Product. Each Party
shall arrange for the other to be named as an additional insured under the
relevant policies without liability for premiums. Each Party shall submit
certificates of insurance, evidencing such insurance coverage, upon
execution and delivery of this Agreement and thereafter when requested by
the other Party.
ARTICLE 11: ANTICIPATORY BREACH
11.1 In the event that Manufacturer or Xanodyne becomes aware at any time of any
matter, circumstance or event (a "Manufacturing Problem") which (i) would
reasonably be expected to give rise to material delays in the shipment of
Product, or (ii) reasonably indicate that the quality standards set forth
herein and in the Quality Agreement have been materially compromised, or
(iii) may reasonably give rise to Xanodyne's right to terminate under
Article 12, such Party shall forthwith give written notice to the other
Party of such matter, circumstance or event, the cause thereof, the
anticipated length of such delay or shortfall, and the action to be taken
to reduce, minimize or remove the adverse effects of any such delay. The
matters, circumstances or events which shall give rise to the remedies set
forth in this Section 11.1 include without limitation: (i) receipt by
Manufacturer of a warning letter from a Regulatory Authority or a 483
containing significant and meaningful findings affecting Product, (ii)
continuous errors or inadequacies in batch processing or documentation as
determined by Xanodyne's quality assurance department, (iii) circumstances
which could in the opinion of Xanodyne reasonably lead to a warning letter
from a Regulatory Authority, and (iv) release of one or more Batches of
Product which do not meet quality standards for releasing Product as set
forth in this Agreement, the Quality Agreement, the Specifications or
Applicable Laws.
11.1.1 Within fifteen (15) days of receipt of the notice given pursuant to
Section 11.1, Xanodyne and Manufacturer shall cause a meeting to take
place with a view to
-15-
agreeing to such action as may be necessary to ensure that no
interruption to supply or shortfall in quantities of Product occurs.
11.1.2 Following the meeting referred to in Section 11.1.1, in the event
that Xanodyne in its reasonable opinion determines that a
Manufacturing Problem (not caused by the act, omission, or breach of
any agreement by Xanodyne or its Affiliates) would be reasonably
expected to occur and cannot be cured within [**] days of such
meeting, Xanodyne shall have the right to reappoint Manufacturer as
the secondary Manufacturer of the Product, reduce Xanodyne's
purchasing obligation as set forth in Section 2.1 to the lesser of (i)
[**]% of Xanodyne's total requirements for Product and (ii) the
percentage of [**] supply, and arrange for an increase in the
proportion of Product manufactured by any existing alternate
manufacturer, or otherwise appoint an alternate manufacturer, for such
time and in such quantities as may in its opinion be appropriate and
necessary. Manufacturer shall provide such assistance and transfer
Know-How as may be necessary for Xanodyne to have Product supplied at
and by an alternate manufacturer of Xanodyne's choice, except that
nothing shall be deemed to require Manufacturer to transfer
Manufacturer's Intellectual Property Rights or Manufacturer's Improved
Technology to the alternate manufacturer.
11.2 Specification Changes. In the event that Xanodyne or the FDA requires any
change, alteration or modification to the Specifications, Xanodyne shall
promptly advise Manufacturer in writing of such change, alteration or
modification and Manufacturer shall promptly advise Xanodyne as to any
scheduling and/or Unit Price adjustments which may reasonably and
necessarily result therefrom. Prior to implementation of such change,
alteration or modification, the Parties agree to negotiate in good faith in
an attempt to reach agreement on (i) the new Unit Price for any Product
Manufactured hereunder by Manufacturer which embodies such change,
alteration or modification, giving due consideration to the effect thereof
on Manufacturer's direct Manufacturing Costs for the Product, and (ii) any
other amendments to this Agreement which may be necessitated by such
changes (i.e. an adjustment to the lead time for purchase orders).
Notwithstanding the foregoing, the Unit Cost shall not be increased as a
result of any change, alteration or modification in the event such change,
alteration or modification is related generally to the Plant or other
products manufactured by Manufacturer in the Plant. Xanodyne agrees to
reimburse Manufacturer for the reasonable expenses incurred by Manufacturer
as a result of such change, alteration or modification, including, but not
limited to, reimbursing Manufacturer for its validation and development
costs, capital expenditure costs and costs for any packaging components or
other materials rendered unusable as a result of such change, alteration or
modification. If during the term of this Agreement Xanodyne amends or is
required by law to amend the Specifications so as to render the Raw
Materials for the Products obsolete, Xanodyne shall purchase from
Manufacturer, at Manufacturer's Acquisition Cost, that amount of inventory
of Raw Materials and/or Products, as the case may be, so rendered obsolete.
11.3 Non-conforming Product. In the event that any Product shall fail to
strictly conform with any purchase order, warranty or term set forth in
this Agreement, the Quality Agreement and/or the Specifications (referred
to herein as Product that is "Defective," subject to a
-16-
"Defect" or "Defective Product"), Xanodyne shall reject such Product by
giving written notice to Manufacturer in accordance with Section 9,1. Any
notice given hereunder shall specify the manner in which the Product is
Defective. If it is determined by agreement of the Parties (or in the
absence of agreement of the Parties, by a mutually acceptable independent
laboratory or consultant whose fees shall be paid by the non-prevailing
Party) that the Product was not Defective as of delivery to Xanodyne in
accordance with Section 4,4., Manufacturer shall have no liability to
Xanodyne with respect thereto. Otherwise (i) if Xanodyne has not yet paid
for such Defective Product, Xanodyne shall not be required to pay for such
Defective Product and Manufacturer shall credit Xanodyne's account the
costs incurred by Xanodyne to return or destroy the Defective Product and
(ii) if payment therefor has previously been made by Xanodyne, at
Xanodyne's option, Manufacturer shall (i) pay Xanodyne the amount of such
payment, (ii) offset the amount thereof against other amounts then due
Manufacturer hereunder or (iii) replace such non-conforming Product with
conforming Product at no additional cost to Xanodyne. In any case where
Xanodyne expects to make a claim against Manufacturer with respect to
Defective Product, Xanodyne shall not dispose of such Product without
written authorization and instructions of Manufacturer either to dispose of
the Product or to return the Product to Manufacturer, except for disposal
for safety or regulatory reasons and except for retention of samples
thereof for the purpose of determining any dispute, the costs of which
shall be borne by the Party responsible for such non-conforming Product.
ARTICLE 12: TERM AND TERMINATION
12.1 Subject to Sections 12.2, 12.3 and 12.4, this Agreement shall commence on
the Effective Date and shall expire five years from such date (the "Initial
Term"). Manufacturer hereby grants to Xanodyne options to extend the term
of the Agreement for further periods of one year (each a "Renewal Term")
which options may be exercised by Xanodyne by giving notice to Manufacturer
12 months prior to the expiration of the Initial Term or any Renewal Term,
as applicable. Upon exercise of the option hereby granted, the term of the
Quality Agreement shall be extended for the duration of this Agreement as
extended. The Initial Term along with any Renewal Terms shall be referred
to herein as the "Term."
12.2 Either Party shall be entitled to terminate this Agreement by notice given
in writing to the other if:
12.2.1 the other Party commits any material breach of any of the provisions
of this Agreement and (in the case of a breach which is capable of
remedy) fails to remedy the same within [**] days [**] days in the
case of a breach involving the failure to pay a sum of money owed)
after receipt of a written notice giving full particulars of the
breach and requiring it to be so remedied; or
12.2.2 the other Party becomes or is adjudged insolvent, makes an
assignment for the benefit of its creditors, has a petition filed in
bankruptcy for or against it (which petition is not dismissed within
[**] days of filing) or goes into liquidation (except for the purposes
of a bona fide amalgamation or other reorganization) or a
-17-
receiver is appointed over al! or a major part of the property or
assets of the other Party.
12.3 Xanodyne shall be entitled in its sole discretion to terminate this
Agreement upon sixty (60) days notice given in writing to Manufacturer if:
12.3.1 Manufacturer causes more than [**] Stock-outs per Year or an
extended Stock-out of more than 30 days,
12.3.2 Manufacturer's cumulative on-time delivery on the Delivery Date
falls below [**] percent ([**]%) during any three (3) month period,
12.3.3 one or more of Manufacturer's employees, agents or contractors is
debarred by the PDA, or
12.3.4 Xanodyne determines that it will no longer develop or market the
Products; provided, however, that in the event Xanodyne determines to
no longer develop or market less than all of the Products, Xanodyne
may terminate this Agreement only as it relates to the Products it
will no longer develop or market.
ARTICLE 13: CONSEQUENCES OF TERMINATION
13.1 Upon the expiration or termination for any reason of this Agreement:
13.1.1 the terms of Articles 6, 7, 8, 9, 10 and 15 and Section 13.1 shall
continue in full force and effect in accordance with their respective
terms;
13.1.2 Manufacturer and Xanodyne shall, upon request of the other, return
to the other all Confidential Information received from it in relation
to the Products, along with all records or copies thereof; or
alternatively each Party may destroy Confidential Information upon the
request of the other Party or may elect to destroy Confidential
Information thirty (30) days following notice to the other if the
other Party does not object to the destruction. In all events each
Party or its counsel may retain one copy of the Confidential
Information in a secure location for the purpose of complying with the
Party's obligations hereunder, and in the event of destruction of
Confidential Information shall certify to such destruction upon
request of the other Party;
13.1.3 Unless this Agreement is terminated by Manufacturer under Section
12.2, if this Agreement is terminated prior to the expiration of the
Term, Manufacturer shall continue the Manufacture of Product in
accordance with the terms of this Agreement for such period as may be
reasonably necessary for Xanodyne to transfer production to an
alternative manufacturer including without limitation time to
negotiate terms and qualify and validate any such Manufacturer; and
Manufacturer shall otherwise Manufacture all outstanding orders;
provided, however, that in no event shall Manufacturer be required to
do any of the foregoing for any period beyond the earlier of (i) 18
months after termination and (ii) the expiration of the Term.
-18-
13.1.4 Manufacturer shall provide to Xanodyne, its Affiliates and/or any
Third Party to which Manufacture of a Product is to be transferred
such support as may be reasonably necessary to transfer technology and
Manufacture in a timely manner to ensure no loss of or interruption in
supply of Product in accordance with the following provisions:
13.1.4.1 where termination occurs by Manufacturer pursuant to Section
12.2 then Manufacturer will not be obligated to provide such
support; and
13.1.4.2 where termination occurs by reason of the termination by
Xanodyne pursuant to Section 12.2 or 12.3, then reasonable
support for such transfer will be provided by Manufacturer
without charge to Xanodyne except for pre-approved out-of-pocket
expenses incurred by Manufacturer in effecting the transfer for
Xanodyne; and
13.1.4.3 where termination occurs by reason of expiration then such
support shall be provided by Manufacturer at reasonable charges
to be agreed.
13.1.5 In the event this Agreement is terminated by Manufacturer pursuant
to Section 12.2 or by Xanodyne pursuant to Section 12.3.4, at the
termination of this Agreement, Manufacturer shall invoice to Xanodyne,
and Xanodyne shall pay, an amount equal to the cost of all Raw
Materials, whether or not in the form of finished Product, in
Manufacturer's possession or in transit to Manufacturer as of such
date of expiration or termination, provided that Manufacturer
demonstrates that such Raw Materials (i) were purchased in reasonable
quantities in reliance on Xanodyne's most recently submitted forecast
pursuant to Section 3.1 and (ii) are in compliance with all relevant
Specifications and otherwise fit for commercial use; provided,
however, that Manufacturer agrees to offset the amount due from
Xanodyne pursuant to this Section 14.1.5 by the Acquisition Cost of
any Raw Materials which Manufacturer may use for production of other
products during the six months immediately following the date of such
termination.
ARTICLE 14: FORCE MAJEURE
14.1 If either Party is unable to perform its obligations hereunder due to an
event or occurrence constituting Force Majeure, it shall promptly notify
the other Party of the nature and extent of the circumstances in question.
14.2 In the event of any delay in the performance of its obligations under this
Agreement or the non-performance thereof by either Party due to Force
Majeure, the Party so affected shall be under no liability for loss or
injury suffered by the other Party thereby and the time for performance of
the relevant obligations shall be extended accordingly provided it uses its
reasonable endeavors to minimize the effect of and overcome or remove the
cause of such Force Majeure.
14.3 In the event that either Party is prevented or delayed in performing any of
its obligations under this Agreement due to Force Majeure for an aggregate
period in excess of ninety
-19-
(90) days in any twelve month period, then both Parties shall meet as soon
as reasonably practicable to discuss in good faith how best to alleviate
the circumstances in question.
ARTICLE 15: OTHER PROVISIONS
15.1 Agreement Controls. In the event of a conflict between the terms set forth
in this Agreement and the terms contained in any purchase order or other
documentation related to the supply of Product or the subject matter
hereof, including without limitation, the Quality Agreement, the terms of
this Agreement shall control.
15.2 Notices. Any notices, requests, estimates or other communications hereunder
shall be deemed to have been properly given upon receipt thereof when sent
via facsimile or nationally recognized next business day courier addressed
to a Party at the respective following address.
To Xanodyne: To Manufacturer:
General Counsel ▇▇▇▇▇ ▇▇▇▇▇▇▇, General Manager
Xanodyne Pharmaceuticals Inc. ▇.▇. Laboratories Inc
One Riverfront Place ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No: ▇▇▇ ▇▇▇-▇▇▇▇ Fax No: ▇▇▇-▇▇▇-▇▇▇▇
15.3 Entirety. This Agreement and the Quality Agreement incorporated herein by
reference constitute the entire agreement between the Parties with respect
to the supply of Product; and these agreements shall supersede all previous
arrangements and agreements between the two Parties in respect thereof.
15.4 Governing Law. This Agreement and the Quality Agreement shall be governed
by and construed in all respects in accordance with the laws of the State
of Michigan. Each of Xanodyne and Manufacturer consents to submit to the
personal jurisdiction of the Federal Court for the Western District of
Michigan or the courts of the State of Michigan located in Ottawa or Kent
Counties if any dispute arises out of this Agreement.
15.5 Severability. If any term or provision of this Agreement or the Quality
Agreement is held by any court or other competent authority to be void or
unenforceable, the other provisions of this Agreement or the Quality
Agreement and the remainder of the affected provision shall continue to be
valid.
15.6 No Waiver. Failure by either Party on one or more occasions to avail itself
of a right conferred by this Agreement or the Quality Agreement shall not
be construed as a waiver of such Party's right to enforce such right or any
other right.
15.7 No Agency. Nothing in this Agreement or the Quality Agreement shall create
or be deemed to create any relationship of agency, partnership or joint
venture between the Parties.
15.8 Assignment.
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15.8.1 Neither Party may assign or transfer or delegate the performance of
this Agreement or any rights or obligations thereunder to any Third
Party without the prior written consent of the other Party which
consent shall not be unreasonably withheld or delayed.
15.8.2 In the event that Manufacturer wishes to assign this Agreement,
Manufacturer shall, prior to such assignment, procure an undertaking
from the assignee in writing that, should Xanodyne consent to such
assignment, such assignee would assume Manufacturer's obligations
under this Agreement and be bound by all the terms and provisions of
this Agreement. In addition, Manufacturer shall ensure that the
assignee:
15.8.2.1 is experienced in or has, or will have as a condition to such
assignment, senior and operating management, together with
personnel retained at the Facility, who are experienced in
pharmaceutical manufacturing under cGMP, including finished
pharmaceutical products;
15.8.2.2 has reasonably sufficient financial resources and liquidity
(including lines of credit) to satisfy the requirements for
working capital necessary to operate the Facility in the manner
required to Manufacture and supply Product and perform all the
obligations of Manufacturer under this Agreement;
15.8.2.3 is in good standing with the FDA and has, for the five year
period prior to the proposed assignment of this Agreement, a
satisfactory record of regulatory compliance with the FDA, the
U.S. Environmental Protection Agency, the U.S. Occupational
Safety and Health Administration and the counterpart state
agencies or divisions thereof (as demonstrated to the reasonable
satisfaction of Xanodyne), except to the extent any non
compliance would not reasonably be expected to have a material
adverse effect on the ability of such assignee to operate a
pharmaceutical manufacturing facility like the Plant.
15.9 Expenses. Except as otherwise provided herein, each Party shall be solely
responsible for its respective costs and expenses incurred in connection
with preparation of this Agreement and the performance of its obligations
hereunder, including, without limitation, any and all attorneys' or
accountants' fees.
15.10 Use of Name. Neither Party shall have any right, express or implied, to
use in any manner, the name or other designation of the other Party, or any
other trade name or trademark of the other Party for any purpose, except as
may be required by applicable law or regulation.
15.11 Counterparts. This Agreement and the Quality Agreement may be executed in
any number of counterparts, each of which shall be considered an original
and all of which taken together shall constitute one instrument.
-21-
IN WITNESS WHEREOF, the duly authorized representatives of the parties have
executed this agreement the day and year first above written:
XANODYNE/PHARMACEUTICALS INC.
By: /s/ S.A. Stamp
---------------------------------
Name: S.A. STAMP
Title: CHIEF FINANCIAL OFFICER
▇.▇. LABORATORIES INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: General Manager
-22-
ATTACHMENT A
Product Batch Size Unit Cost
------- ---------- ---------
FINISHED PACKAGED PRODUCT
Duet tablets 100ct Bottle [**] $[**]
Duet Chewable tablets 90 ct Bottle [**] $[**]
Stuart Prenatal tablets 100ct Bottle [**] $[**]
BULK PACKAGED PRODUCT
Duet tablets Bulk [**] $[**]per [**] tablets
-23-
ATTACHMENT B
ACTIVE INGREDIENTS
DUET TABLETS
Ingredients mg
----------- ----
Acacia [**]
Ascorbic Acid [**]
Ascorbyl Palmitate [**]
Beta Carotene [**]
BHT [**]
Calcium Carbonate [**]
Cholecalciferol [**]
Corn Starch [**]
Croscarmeliose Sodium [**]
Cupric Oxide [**]
Cyanocobaiamin [**]
Dicalcium Phosphate [**]
dl-alpha Tocopherol [**]
ferrous BisgSycinate [**]
Iron Aid [**]
Folic Acid [**]
Gelatin (pork) [**]
HPMC [**]
Magnesium Oxide [**]
Magnesium Stearate [**]
Microcrystalline Cellulose [**]
Mixed glycerides [**]
Niacinamide [**]
PEG [**]
Polysorbate 80 [**]
Pyridoxine HCI [**]
Riboflavin [**]
Silicon Dioxide [**]
Sodium Aluminum Silicate [**]
Sodium Ascorbate [**]
Sodium Benzoate [**]
Sorbic Acid [**]
Sucrose [**]
Thiamin Mononitrate [**]
Titanium Dioxide [**]
Vitamin E Acetate [**]
Zinc Oxide [**]
-24-
ATTACHMENT B
ACTIVE INGREDIENTS (CONT.D)
Duet Chewable Ingredients mg
------------------------- ----
Acacia [**]
Ascorbic Acid [**]
Ascorbyl Palmitate [**]
Aspartame [**]
Beta Carotene [**]
BHT [**]
Calcium Carbonate [**]
Calcium Silicate [**]
Cholecalciferol [**]
Citric Acid [**]
Corn Starch [**]
Cupric Oxide [**]
Cyanocobalamin [**]
Dicalcium Phosphate [**]
dl-alpha Tocopherol [**]
dl-alpha Tocopheryl Acetate [**]
FD&C Yellow #6 Lake [**]
Ferrochel Amino Acid Chelate 20% [**]
Ferrous Fumarate [**]
Flavor Debittering [**]
Flavor Orange [**]
Flavor Vanilla [**]
Folic Acid [**]
Fructooligosaccharides [**]
Gelatin (fish) [**]
Hypromellose [**]
Magnesium Oxide [**]
Magnesium Stearate [**]
Mannitol [**]
Mixed glycerides [**]
Niacinamide [**]
Pyridoxine HCI [**]
Riboflavin [**]
Silicon Dioxide [**]
Sodium Aluminum Silicate [**]
Sodium Ascorbate [**]
Sodium Benzoate [**]
Sodium Citrate [**]
Sorbic Acid [**]
Sorbitol [**]
Sucrose [**]
Thiamine Mononitrate [**]
Xylitol [**]
Zinc Oxide [**]
-25-
ATTACHMENT B
ACTIVE INGREDIENTS (CONT.D)
Stuart Prenatal Ingredients mg
--------------------------- ----
Xylitol [**]
Zinc Oxide [**]
Acacia [**]
Ascorbic Acid [**]
Ascorbyl Palmitate [**]
Beta Carotene [**]
BHT [**]
Calcium Carbonate [**]
Carnauba Wax [**]
Cholecalciferol [**]
Corn Starch [**]
Croscarmellose Sodium [**]
Cyanocobalamin [**]
Dicalcium Phosphate [**]
dl-alpha Tocopherol [**]
Ferrous Fumarate [**]
Folic Acid [**]
Gelatin (pork) [**]
HPMC [**]
iron Oxide Red [**]
Magnesium Stearate [**]
Microcrystalline Cellulose [**]
Mixed glycerides [**]
Niacinamide [**]
PEG [**]
Polysorbate 80 [**]
Pyridoxine HC! [**]
Riboflavin (core) [**]
Silicon Dioxide [**]
Sodium Aluminum Silicate [**]
Sodium Ascorbate [**]
Sodium Benzoate [**]
Sorbic Acid [**]
Sucrose [**]
Thiamin Mononitrate [**]
Titanium Dioxide [**]
Vitamin E Acetate [**]
Zinc Oxide [**]
-26-
ATTACHMENT C
QUALITY AGREEMENT
-27-
QUALITY AGREEMENT BETWEEN
XANODYNE PHARMACEUTICALS INC.
AND
▇.▇. LABORATORIES, INC.
1
QUALITY AGREEMENT
CONTENTS
1. PARTIES
2. QUALITY AGREEMENT
3. ADMINISTRATIVE INFORMATION
4. PRODUCTS
5. DURATION OF AGREEMENT
6. CONFIDENTIALITY
7. SECURITY
8. SUPPLY
8.1 Premises
8.2 Product Specification and Master Production Records
8.3 GMP Guidelines
8.4 Materials
8.5 Master Production Record Approval
8.6 Production
8.7 Methodology
8.8 Standard Operating Procedure
8.9 Dates of Manufacture and Expiration
8.10 Manufacturing and Equipment Data
9. QUALITY ASSURANCE
9.1 QC of Materials
9.2 In-Process and Finished Product Testing
9.3 Release Procedures
9.4 Documentation
9.5 Sampling
9.6 Stability
9.7 Deviations and Investigations
9.8 Rejection of Product
9.9 Dispute Resolution
9.10 Regulatory Inspection
9.11 Regulatory Actions at Xanodyne US
9.12 Regulatory Investigations
9.13 Manufacturing Audits
9.14 Right to Audit
9.15 Product Complaints, Recall
9.16 Compliance Deficiencies
10. CHANGE MANAGEMENT
11. PRODUCT PROCESS VALIDATION
11.1 Process
11.2 Cleaning Validation
11.3 Equipment, Computer, Facility, and Utilities Qualification
11.4 Laboratory Qualifications
12. ANNUAL PRODUCT REVIEW, DRUG LISTING, AND ANNUAL REPORTS
12.1 Annual Product Review
12.2 Drug Listing
12.3 Annual Reports
13. STORAGE AND SHIPPING
13.1 Storage
13.2 Packing and Labeling
13.3 Mixing of Product
13.4 Shipment of Product to Xanodyne
2
14. CONTRACTUAL AGREEMENT
APPENDIX I
APPENDIX II
APPENDIX III
3
1. PARTIES
This Quality Agreement is effective as of April 30, 2007, by and between
Xanodyne Pharmaceuticals, Inc., a Delaware Corporation having its
corporate offices at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(hereinafter referred to as "Xanodyne") and ▇.▇ Laboratories, Inc., a
Michigan corporation having its principal offices at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (herein after referred to as "JB Labs").
2. QUALITY AGREEMENT
2.1 This Agreement supplements and is hereby incorporated by reference
into, that certain Manufacturing Agreement between the Parties dated as of
April 30, 2007 (the "Manufacturing Agreement") for each of the Products to
which this Agreement relates. If such Manufacturing Agreements are not in
place, the roles and responsibilities in this Agreement stand-alone.
2.2 This agreement defines certain roles and responsibilities of JB Labs
for services or materials supplied to Xanodyne or Affiliates, for
commercial distribution to ensure compliance with applicable cGMPs. This
Agreement is supplemental to and constitutes a part of the Manufacturing
Agreement. The provisions of this Agreement are intended to be supplemental
to and not in derogation from the terms of the Manufacturing Agreement and
provisions contained herein shall be treated as supplemental to the
Manufacturing Agreement and in particular but without limitation in
relation to the application, compliance, verification and implementation of
cGMP. To the extent any terms set forth in this Agreement conflict with the
terms of any Manufacturing Agreement, the terms of the Manufacturing
Agreement shall control. Defined terms used in this Agreement shall have
the meaning set forth in Appendix I or as otherwise defined herein. Defined
terms used in this Agreement that are not defined herein shall have the
meaning set forth in the Manufacturing Agreement.
3. ADMINISTRATIVE INFORMATION
Contact names will be provided from both sites for key functional areas.
Contact names are provided in Appendix II and may be updated as needed upon
written notice of a Party.
4. PRODUCTS
A Product list is provided in Appendix I.
5 DURATION OF AGREEMENT
This Agreement shall commence on execution by both Parties and subject to
the following provisions of this clause shall expire or terminate on the
expiry or termination of that Manufacturing Agreement. Any section of this
Agreement which has a predefined retention, survival or maintenance period,
for example raw data storage, product complaints and sample retention,
shall survive the termination of this Agreement for the period defined in
the appropriate section. This Agreement cannot be modified except with the
written approval of both Parties. Specifications and Master Batch Records
may be modified with written authorization from designated Quality
Assurance representatives of both companies.
4
6. CONFIDENTIALITY
Confidential Information shall be governed by the terms of the applicable
Manufacturing Agreement.
7. SECURITY
JB Labs has and will maintain controlled access to the Plant through a
security card key or similar system. All visitors will be required by JB
Labs to sign-in and be escorted during any site visit. All Third Party
visitors will be required to enter into a confidentiality agreement prior
to entering areas being used to Manufacture the Products.
8. SUPPLY
8.1 Premises
8.1.1 JB Labs will Manufacture the Products at the Plant and will not
use or transfer at a later date any of the Manufacturing
operations for the Product(s) to Third Parties or other sites
without the prior written agreement of Xanodyne Corporate Quality
Assurance.
8.1.2 JB Labs will ensure at all times that the premises and equipment
comprising the Plant used to Manufacture/supply the Products
comply at all times with current regulatory requirements and are
in accordance with the documentation approved by Xanodyne
Corporate Quality Assurance.
8.2 Product Specification and Master Production Records
8.2.1 JB Labs will Manufacture the Product(s) in accordance with the
most recent version of the Specifications and Master Batch Record
(formula, in-process and release specs, methods, shelf life, and
regulatory requirements) as supplied or approved by Xanodyne. All
such documentation must be approved by Xanodyne Corporate Quality
Assurance (see section 11).
8.2.2 JB Labs will select approved suppliers using quality assurance
and purchasing evaluations, which verify compliance by the supply
company with cGMP and Specifications. Where appropriate, an
on-site audit of the supplier site by JB Labs and/or Xanodyne may
be required. JB Labs will be responsible for auditing these
suppliers, according to their written procedures, and perform any
other task to confirm that the supplier is operating within cGMP
and supplying Product that meets the Specifications. JB Labs will
notify Xanodyne of any change with regards to an approved
supplier.
8.2.2.1 Raw Material Specification
If JB Labs has the responsibility in the Manufacturing
Agreement for providing Raw Material (excipients and active
ingredients), JB Labs will obtain from approved suppliers as
defined in 8.2.2. JB Labs will test Raw Materials to the
full Specification unless a supplier Certificate of Analysis
("COA") is available from an approved supplier, in which
case, reduced testing may be employed upon mutual agreement
with Xanodyne Corporate Quality Assurance. Full testing must
be performed on a one lot per year minimum. Any reference
standards for testing that are supplied by Xanodyne or its
Affiliates must be accompanied by a COA listing expiration
date and any correction factors that need to be applied.
5
If Raw Material is provided by Xanodyne, JB Labs will obtain
and test Raw Materials to the full Specification unless a
Certificate of Analysis (COA) is available from an approved
supplier, in which case, reduced testing may be employed
upon mutual agreement with Xanodyne Corporate Quality
Assurance.
8.2.2.2 Label Component Specifications
JB Labs will use only labels and labeling approved in
compliance with standards and Specifications provided or
approved by Xanodyne Corporate Quality Assurance.
8.2.2.3 Packaging Component Specifications
JB Labs will obtain from approved suppliers as defined in
the appropriate Regulatory documentation and test-packaging
components to the full Specification unless a validated
supplier COC is available from a certified supplier. If a
COC is available, complete testing may not be necessary upon
written approval by Xanodyne Corporate Quality Assurance.
Packaging Specifications must be provided by Xanodyne
Corporate Quality Assurance.
8.3 GMP Guidelines
Any applicable product license or pharmacopoeia or formulatory
requirements applicable to the Manufacture of Product(s) shall be
complied with in addition to cGMP and Specifications.
8.4 Materials
8.4.1 Materials Procured by JB Labs
JB Labs is responsible for ensuring that all Raw Materials
procured for use in the Product(s) are in full compliance with
the Specifications in accordance with 8.2. Where appropriate, Raw
Materials shall be given a ▇▇▇▇▇▇ date upon the satisfactory
completion of all-initial testing. ▇▇▇▇▇▇ testing will be
performed at defined time intervals to ensure the chemical and
physical stability of the Raw Materials unless Xanodyne or the
supplier provides an official expiration date. Xanodyne Corporate
Quality Assurance may audit any JB Labs program that allows
retesting or repassing of Raw Materials.
8.4.2 Materials Provided by Xanodyne
Raw Materials provided by Xanodyne may require acceptance testing
by JB Labs to confirm that the Raw Materials are in full
compliance with the Specifications. Where Xanodyne requires
acceptance testing to be performed by JB Labs to ensure full
compliance with Specifications then JB Labs shall undertake such
acceptance testing. Should Xanodyne perform this testing it will
be the responsibility of Xanodyne for ensuring that these Raw
Materials are in full compliance with the Specifications. JB
Labs is responsible for ensuring that all Raw Materials are used
correctly, have the correct identity by testing identity on
receipt, and have met the relevant analytical testing or COA
requirements for the Batch.
6
8.5 Master Production Record Approval
JB Labs may transcribe the information (i.e. formulation, filling work
order, packaging work order) into its own format and must obtain
written approval from Xanodyne US Corporate Quality Assurance for each
master document version before Manufacturing. JBL will provide a cover
sheet for Xanodyne signature. Signed approval must be returned to JBL
within [**] working days, unless otherwise agreed.
8.6 Production
The Products will be Manufactured in accordance with the manufacturing
and packaging procedures set forth in the Specifications and Master
Batch Records and additional internal JB Labs' site procedures. Such
procedures must be made available for scrutiny during audits by
authorized personnel of Xanodyne Corporate Quality Assurance.
8.7 Methodology
JB Labs will test using the approved methodology listed in the
appropriate Specification.
8.8 Standard Operating Procedures
JB Labs is responsible for maintaining any Standard Operating
Procedures (SOPs) required to make the Product in accordance with
cGMPs and as described in compendial documentation as well as any
other regulatory requirements. If JB Labs and Xanodyne agree that
deviation from specific SOP's is appropriate, Xanodyne Corporate QA
will provide written authorization for the deviation.
8.9 Dates of Manufacture and Expiration
8.9.1 Date of Manufacture
JB Labs will determine the date of manufacture based on the first
day of blending the Product (the first day the API is
introduced).
8.9.2 Expiration Date
Xanodyne Corporate Quality Assurance will provide the appropriate
formulas so JB Labs can calculate expiration dates for Batches to
be manufactured.
8.10 Manufacturing and Equipment Data
JB Labs is responsible for safe keeping and retention of records of
machine usage (previous product produced in non-dedicated machinery),
cleaning, any maintenance/calibration performed, Raw Material batch
numbers and certification, in-process results and parameters, and test
results in accordance with and shall perform all functions in
accordance with legal and regulatory requirements and all Applicable
Laws.
7
9. QUALITY ASSURANCE AND CONTROL
9.1 Laboratory Control of Materials
9.1.1 Quality control of Raw Materials supplied by JB Labs or by
suppliers to JB Labs will be undertaken by JB Labs in accordance
with the Specifications and methods approved by Xanodyne
Corporate Quality Assurance.
9.1.2 JB Labs is responsible for investigating any laboratory out of
specification (OOS) results per JB Labs' internal procedures.
Each OOS investigation must be reviewed and approved by JB Labs'
designated quality person and must evaluate if the failure has
jeopardized the safety, efficacy or quality of the Product.
Xanodyne Corporate Quality Assurance must be notified in writing
as soon as is feasible, of a confirmed OOS value and JB Labs must
forward the completed package to Xanodyne Corporate Quality
Assurance upon conclusion of the investigation. The investigation
process should be completed in a timely manner.
9.2 In-Process and Finished Product Testing
9.2.1 Raw Materials and packaging components
JB Labs will ensure that all materials used are in compliance
with the compendial and/or approved Methods and Specifications.
9.2.2 JB Labs will perform all in-process and finished Product testing
using the Specifications, finished Product attribute Acceptable
Quality Level ("AQL"), and Methods of analysis listed in the
release documentation list provided and approved by Xanodyne's
Corporate Quality Assurance. JB Labs may subcontract testing in
accordance with section 11.4.4.
9.3 Release Procedures
9.3.1 Product
JB Labs is responsible for ensuring and certifying that the
Product has been made according to cGMPs, as well as the
Specifications and procedures documented in the Master Batch
Record. This includes, but is not limited to, a complete and
thorough review of the executed batch records. Upon Xanodyne
request, copies of executed batch records will be forwarded to
Xanodyne Corporate Quality Assurance by JB Labs upon completion
of JB Labs review and approval process.
9.3.2 Certificate of Compliance/Analysis
Prior to release, a JB Labs Quality Assurance Representative will
sign a Certificate of Compliance/Analysis confirming that the
Product has been Manufactured, packaged and tested in accordance
with cGMP and Applicable Laws and meets the requirements of the
Master Batch Record and Specifications including a statement that
any deviations identified during the manufacturing process have
been satisfactorily closed. These documents will also include the
lot numbers, reference to any associated deviations, associated
batch expiry dates, and quantities in each shipment. The specific
lot number will be the lot number identified on the executed
batch record for the finished Product being released.
8
9.3.3 Xanodyne Confirmatory Testing
Xanodyne or its Affiliates may perform confirmatory testing to
validate JB Labs' data.
9.4 Documentation
9.4.1 Requests for Full Documentation
JB Labs agrees to supply Xanodyne or its Affiliates with any
completed Manufacturing, packaging, testing, or stability data
within a reasonable time period. Should the documentation be
necessary to fulfill a regulatory agency request, the
documentation should be provided within 1 business day of
Xanodyne's written request.
9.4.2 JB Labs will retain, at minimum, batch production records,
quality control testing records, all records of shipments of the
Product from JB Labs, all validation data and other documentation
relating to the Product for the time periods required by
Applicable Laws with respect to the Product plus one year.
9.4.2.1 JB Labs shall make such records and data available for
review by Xanodyne at JB Labs' Plant upon at least [**] days
prior written notice from Xanodyne to JB Labs.
9.4.3 JB Labs shall, upon Xanodyne's request, supply to Xanodyne a
copy of its document retention policy. Upon termination or
expiration of this Agreement, JB Labs will, upon Xanodyne's
written request and at Xanodyne's expense, make copies of any
records and data for Xanodyne.
9.5 Retain Sampling
9.5.1 Retain Samples - Raw Materials
JB Labs will retain samples of active ingredient for at least one
year beyond the expiry period of the Products in which used. The
amount of sample retained will be twice the quantity required to
carry out all of the tests required to determine of the material
meets, its Specifications.
9.5.2 Retain Samples - Products
JB Labs will retain samples of the Products for at least one year
beyond the expiry period. The amount of sample retained will be
twice the quantity required to carry out all of the tests
required to determine if the material meets it's Specifications.
9.6 Stability
9.6.1 Routine/Commercial Stability Program
9.6.1.1 JB Labs is responsible for maintaining a routine
stability-testing program for the Products, and will provide
a stability summary to Xanodyne on reasonable request
intervals. Data will be provided to Xanodyne as requested.
9.6.1.2 The stability program will be in compliance with any
license commitments as notified by Xanodyne. At a minimum
one lot of each Product, at each strength and in each
package type (largest to smallest) will be placed on
stability each year unless otherwise agreed to in writing by
JB Labs and Xanodyne. Bulk
9
stability will be performed once during the life of the
product to establish a repack date. The stability protocol
or any changes must be approved by Xanodyne Corporate
Quality Assurance.
9.6.2 Development (Registration, R&D) Stability Program
JB Labs will be responsible for performing any development
stability required to support the Products. If that development
stability is to support projects initiated by JB Labs, then JB
Labs will design, execute and write reports for the program. All
protocols for and reports from such work must be approved by
Xanodyne Corporate Quality Assurance. If that development
stability is to support projects initiated by Xanodyne, then
Xanodyne will establish the protocols and JB Labs will develop,
execute and write protocols and reports for the program when
requested by Xanodyne.
9.6.3 Stability Failures
Any confirmed problems or out of Specification results which
arise as a result of or during any of the stability programs will
be communicated in writing to Xanodyne Corporate Quality
Assurance in sufficient time for Xanodyne to comply with any
regulatory requirements.
9.6.4 JB Labs will supply Xanodyne's Corporate Quality Assurance
department with completed stability results upon receipt of a
written request.
9.7 Deviations and Investigations
9.7.1 Deviations
Although no deviation from the approved Master Batch Record
should occur, any deviation from the process during Manufacture
must be carefully explained and documented in the batch records,
justified and approved by JB Labs' Quality Assurance and
production management, and included in the documentation package.
Any process deviations will be forwarded to Xanodyne Corporate
Quality Assurance via JB Labs after discovery of the occurrence.
NOTE: A deviation is defined as any anomalous event that may
occur during the processing of a Batch that is a departure from
Specifications, approved procedures or validated processes.
9.7.2 Failure Investigations and Out Of Specification (OOS) Results
JB Labs is responsible for investigating any test result or
in-process test that fails to meet Specification per their
internal procedures. Each investigation will be reviewed and
approved by JB Labs' designated Quality person. The investigation
must evaluate if the failure has jeopardized the safety, efficacy
or quality of the Product. Xanodyne must be notified in writing
of a confirmed OOS value and JB Labs must forward the
investigation results to Xanodyne Corporate Quality Assurance
upon conclusion of the investigation.
9.7.3 JB Labs will notify Xanodyne Corporate Quality Assurance
forthwith if any problems are discovered that may impact Product
Batch(s) previously shipped to Xanodyne or its Affiliates
identifying the Batches in question.
10
9.7.4 Some deviations/failures may require that additional testing,
stability, or validation be conducted. This work will be
performed by JB Labs as agreed by both Parties.
9.8 Rejection of Product
9.8.1 JB Labs will notify Xanodyne Corporate Quality Assurance in
writing of any Batch rejected by JB Labs. This communication
shall be accompanied by a completed investigation with regard to
the failure and include evaluation of effect of failure on other
Batches.
9.8.2 Xanodyne or its affiliates will notify JB Labs of any problems
thought to be due to Manufacture or stability, which are found
during the distribution of the Product. When requested by
Xanodyne, JB Labs will promptly perform investigations for these
problems. Investigation results will be forwarded to Xanodyne as
required.
9.9 Dispute Resolution
In the event that a dispute arises between JB Labs and Xanodyne or its
Affiliates in the analysis of the Products, the resolution will
proceed in stages. The first stage requires direct communication
between analysts from both Parties to determine that the Methods of
analysis are the same and are being executed in the same manner at
both sites. Second, carefully controlled and split samples should be
sent from one site to the other in an attempt to reach an agreement.
Should there be a failure to achieve resolution, analysts from both
Parties will be required to meet to work through the analysis of a
mutually agreeable sample. Notwithstanding the foregoing, Xanodyne
Corporate Quality Assurance retains at all times the right to
determine Product release status for commercial distribution.
9.10 Regulatory Inspections
Xanodyne's Vice President or Director of Corporate Quality Assurance
will be notified, as soon as is feasible, of any inspections by a
Regulatory Authority related to Xanodyne Products. Should the FDA
issue a warning letter or any observations related to Product to JB
Labs, a copy of these documents will be forwarded to Xanodyne
Corporate Quality Assurance as soon as is feasible.. Examples of
observations related to Product include without limitation,
observations issued regarding a packaging line, or quality control
testing laboratory. If necessary, JB Labs may black out names of other
customers or products to protect confidentiality. Copies of formal
response letters from JB Labs including the 483 observations to the
FDA that relate to the Product impact will also be forwarded to
Xanodyne Corporate Quality Assurance. JB Labs will consider Xanodyne's
comments and suggestions regarding any citations or observations that
specifically relate to the manufacture of Xanodyne's products.
9.11 Regulatory Actions at Xanodyne
Xanodyne or its Affiliates will notify JB Labs of any inspections or
regulatory actions on the Products that may impact JB Labs.
Additionally, Xanodyne will immediately forward any regulatory
correspondence concerning the Manufacture of the Products to JB Labs.
9.12 Regulatory Investigations
JB Labs is responsible for supporting all Batch record investigations
associated with regulatory actions. Xanodyne Corporate Quality
Assurance must be notified of any such events.
11
9.13 Manufacturing Audits (MA)
9.12.1 Annual MA: Xanodyne shall have the right to conduct [**]
Manufacturing Audit as defined in section 9.13.4) per year (such
annual Manufacturing Audit to be hereinafter referred to as an
"Annual MA").
9.12.2 Event MA: In addition to the Annual MA, in the event that (i)
JB Labs receives 483 Observations or a "Warning Letter" from the
FDA or any foreign equivalent outside the USA relating to the
Manufacture of the Product by JB Labs, (ii) JB Labs has received
a DEA "Letter of Admonishment" or similar notice alleging
non-compliance, (iii) Xanodyne has rejected a Batch of Product
where it has been agreed or determined that such Product failed
to meet Specifications or cGMP or (iv) Xanodyne or JR Labs shall
have received a series of complaints (i.e. [**] complaints on at
least [**] lots of Product determined to have been a result of
operations at JB Labs) from Third Parties within any year
relating to the Manufacture of a Product (individually or
collectively, an "Event"); Xanodyne shall have the right to
conduct additional Manufacturing Audits according to the terms
specified in Section 9.13.4 below (such Manufacturing Audit or
Audits to be hereinafter referred to as an "Event MA").
9.12.3 Routine Visits. It is agreed that Xanodyne may arrange, routine
observational visit to the Plant(s).
9.13.4 Manufacturing Audit: For purposes of this Agreement, the term
"Manufacturing Audit" shall mean an audit of JB Labs' Plant for
the Product by no more than [**] employees and/or [**]agents of
Xanodyne for purposes of reviewing JB Labs' procedures and
processes used in Manufacturing the Products, unless otherwise
agreed. Any such agents shall be qualified to conduct
manufacturing audits, shall comply with all JB Labs' facility
rules regarding safety and security notified by JB Labs to
Xanodyne and its employees and agents. Each Manufacturing Audit
shall be conducted during JB Labs' normal business hours and upon
at least fifteen (15) days' prior written notice to JB Labs in
the case of an Annual MA, or with prior notice to JB Labs in the
case of an Event MA. In all cases Xanodyne shall ensure that its
employees or agents will conduct each Manufacturing Audit so as
not, insofar as is reasonably practicable, to interfere with the
normal and ordinary operation of JB Labs' Plant. During a
Manufacturing Audit, upon Xanodyne's request, JB Labs shall make
available for Xanodyne's review and inspection all equipment and
facilities used in or in relation to the Manufacture of a
Product, records and support documents (i.e. manufacturing and
analytical) with respect to each Batch of the Product and other
Raw Materials and packaging components used in the Manufacture
or packaging of the Product hereunder. At any such audit,
Xanodyne shall have the right to obtain copies of such batch
records with respect to the Product(s), provided however, that
Xanodyne pays JB Labs for its reasonable costs associated with
making such copies. All costs of an Event MA shall be borne by
Xanodyne unless the requirement for audit arises as a result of
the negligence of JB Labs or the breach of the terms of this
Agreement or the Manufacturing Agreement by JB Labs, in which
case JB Labs shall absorb all costs associated with the audit.
9.13.5 Correspondence: Each Party shall promptly notify the other
Party of, and shall provide the other Party with copies of, any
correspondence and other documentation received or prepared by
the notifying Party in connection with any of the following
events:
12
Receipt of a 483 Observation Letter or "Warning Letter" from the
FDA or any other Regulatory Authority or any relevant foreign
equivalent outside the USA in connection with the Manufacture,
packaging, testing, storage or security of the Product;
Any field alert, recall, market withdrawal or correction of any
Batch of the Product; or
Any regulatory comments relating to the Manufacture of Xanodyne
Product(s) requiring a response or action by the notifying Party.
9.14 Right to Audit
9.14.1 Xanodyne or Xanodyne Affiliate representatives will be escorted
at all times by JB Labs personnel.
9.14.2 Audit Procedures
9.14.2.1 An exit meeting will be held with representatives from
JB Labs and Xanodyne to discuss significant audit
observations.
9.14.2.2 Xanodyne will provide a written report of all
observations within 30 days to JB Labs. Within 30 days of
audit report receipt, JB Labs will provide a written
response to all findings that details corrective action to
be implemented. JB Labs will follow up to ensure that all
corrective actions are implemented. Xanodyne may confirm
follow-up action by performing a follow-up audit separate
from the Annual MA or through documentation exchange.
9.15 Product Complaints, Recall
9.15.1 Product Complaints
Xanodyne Corporate Quality Assurance shall maintain complaint
files with respect to the Product (s) in accordance with cGMP's.
Xanodyne Corporate Quality Assurance is responsible for receiving
and initially investigating any complaints and will notify JB
Labs of any complaint potentially resulting from any
manufacturing defect that may impact the Product quality. JB Labs
will investigate any Product complaints and provide a report to
Xanodyne within 30 days. The investigation shall be completed in
accordance with all cGMP regulations and any other Applicable
Laws. Xanodyne shall have responsibility for reporting all
complaints relating to the Product to the FDA and any other
Regulatory Authority, including, but not limited to, complaints
relating to the Manufacture of the Product as well as adverse
drug experience (ADE) reports.
9.15.2 Product Recall
If Product Recall is related to product manufactured by JB Labs,
JB Labs, in conjunction with Xanodyne Corporate Quality Assurance
will be responsible for instituting a Product Recall. Prior to
initiation of any recall, Xanodyne will notify JB Labs of any
Recall that may be due to JB Labs. In the event that the
companies disagree about the need for a recall, every effort will
be made to resolve the issue. If no resolution is reached, both
JB Labs Quality and Xanodyne Quality will consult with the
regulatory authorities together to obtain the agency's
recommendation concerning the need for a recall. The companies
will abide by the agency's recommendation. JB Labs will work with
Xanodyne and
13
Xanodyne's Affiliates to investigate and coordinate the Recall.
JB Labs will provide a rapid initial response and a full report
within [**] working days. Should JB Labs have a Recall for a
product other than a Xanodyne product, the investigation should
extend to the procedures and practices associated with the
manufacture of that product and JB Labs will promptly notify
Xanodyne should the procedures or practices impact the
manufacture of Xanodyne's products.
9.16 Compliance Deficiencies
Should JB Labs become aware of any issues that could affect the
quality, safety, identity or efficacy of any Product produced at their
facility, JB Labs will notify Xanodyne Corporate Quality Assurance in
writing as soon as is feasible.
10. CHANGE MANAGEMENT
Product specific Master Batch Records, and Specifications will be approved
by both Xanodyne's Corporate Quality Assurance Department and JB Labs'
Quality Department. No changes to the above documents may be implemented
without the signed authorization from an authorized member of the Xanodyne
Corporate Quality Assurance Department. A signature will be required within
[**] working days for documents sent to Xanodyne for change approval. All
required regulatory approvals will be obtained prior to implementation.
Variations to established production procedures may be initiated by either
Party, but must be agreed to in writing by the authorized members of the
Quality Assurance Departments of both Parties before implementation. The
release status of the Product produced under a variation will be decided as
part of the variation approval process. Quality Assurance Departments of JB
Labs or Xanodyne will have the right to assign a final disposition of
"rejected" to the batch should they conclude that such action is
appropriate. Changes to the facility or equipment which have significant
impact on Xanodyne's products shall be forwarded for review by Xanodyne's
Corporate Quality Assurance prior to implementation.
11. PRODUCT AND PROCESS VALIDATION
11.1 Process
JB Labs is responsible for ensuring that the process for Manufacture
is validated. The validation should ensure that the process is capable
of consistently achieving the Product's Specifications. JB Labs will
not use any validation protocol or issue a report unless Xanodyne
technical personnel and Xanodyne Quality Assurance have first approved
them. Xanodyne will approve or reject all protocols and validation
reports within 5 working days of receipt. Process validation batches
may be shipped prior to completion of the validation reports, if a
letter of authorization is provided by Xanodyne Corporate Quality
Assurance.
11.2 Cleaning Validation
11.2.1 JB Labs is responsible for ensuring that adequate cleaning is
carried out between batches of different products to prevent
contamination.
11.2.2 JB Labs will establish cleaning validation limits for the
Product. The cleaning procedure and analytical methodology may be
reviewed by Xanodyne upon request. Xanodyne will disposition all
protocols and cleaning validation reports within [**] business
days of receipt.
11.2.3 JB Labs is responsible for having appropriate cleaning
procedures for Product(s) Manufactured on non-dedicated
equipment. JB Labs must provide evidence of appropriate
14
equipment cleaning results as soon as is feasible upon receipt of
request from Xanodyne. Cleaning data must be made available
during an Annual or Event MA.
11.2.4 JB Labs is responsible for having appropriate cleaning
procedures for product(s) manufactured on dedicated equipment.
11.2.5 The manufacture of any cytotoxin, penicillin, steroid, or other
hormone product should not be allowed in a non-segregated area,
which is used to manufacture Xanodyne products without mutual
approval of JB Labs and Xanodyne.
11.3 Equipment, Computer, Facility, and Utilities Qualification
JB Labs is responsible for the safe and efficient working of all
equipment, computer, utility, and facility qualification activities
associated with the Products, including maintenance. Should an issue
become evident; JB Labs will notify Xanodyne Corporate Quality
Assurance. JB Labs must make available equipment, computer, facility,
and utilities qualification data during an Annual or Event MA.
11.4 Laboratory Qualifications
11.4.1 JB Labs is responsible for ensuring that all laboratories are
compliant with cGMPs with regard to systems and equipment
qualifications.
11.4.2 JB Labs is responsible for maintaining appropriate cGMP
documentation procedures in the laboratories (i.e. notebooks,
logbooks, sample receipt, sample tracking, SOPs, etc).
11.4.3 JB Labs is responsible for ensuring all methodology associated
with the prescription status of the Product(s) is appropriately
qualified and/or validated. If analytical work is performed at JB
Labs, then Xanodyne will also provide any existing analytical
documentation to assist in Methods transfer or Methods
validation.
11.4.4 If analytical work is not performed at JB Labs' site, JB Labs
may elect to perform an audit on vendors to be used for
analytical testing. Should JB Labs decide to sub-contract out any
quality control work, prior approval from Xanodyne Corporate
Quality Assurance will be required.
12. ANNUAL PRODUCT REVIEW, DRUG LISTING, AND ANNUAL REPORTS
12.1 Annual Product Review
JB Labs will perform an annual product review on the Products and will
issue a report to Xanodyne no later than [**] months after the
conclusion of an annual manufacturing cycle. This report will be a
review of any changes in the Manufacturing of the Product in the
previous year; a summary of lots made, released, and rejected and a
stability report. Also, control charting or trend analysis of key
Product parameters will be performed on an annual basis. Any
abnormalities will be explained in the annual review. This review will
be conducted in accordance with 21CFR211.180(e) and any other
Applicable Laws.
12.2 Drug Listing
15
JB Labs is responsible for drug listing as the Manufacturer of the
Product(s) while Xanodyne is responsible for drug listing as the
distributor of the Product(s). Xanodyne will provide JB Labs copies of
all Product labeling including package insert, and NDC code which
includes labeler code, product code, and packaging code, Xanodyne will
notify JB Labs of the scheduled Product launch.
12.3 Annual Reports, IND Updates or Other Regulatory Filings Where
Applicable
Xanodyne is responsible for preparing any Annual Report, IND update or
other regulatory filing as required by Applicable Laws, including 21
CFR 314.7 (g)(3), 314.81 (b)(2), and/or 601.12 (d), (f)(3). At least
[**] calendar days before the regulatory due date, Xanodyne may
request in writing from JB Labs the chemistry, manufacturing and
controls data required for submission of the filing. JB Labs will
provide the requested information to Xanodyne within [**] days of
request.
13. STORAGE AND SHIPPING
13.1 Storage
JB Labs will ensure that during storage of the Product(s) that there
is no possibility of deterioration, interference, theft, Product
contamination or admixture with any other materials. Xanodyne
Corporate Quality Assurance will provide details of any labeling
requirements and container sealing and integrity requirements.
13.2 Packing and Labeling for Transit
The Product(s) will be suitably packed for transit, each pallet or
outer container being labeled in accordance with the approved
Applicable Specifications and Laws.
13.3 Mixing of Product
Different lots of a single Product or different types of Products will
not be mixed on a pallet.
13.4 Shipment of Product to Xanodyne
Only approved, finished (unless required otherwise by Xanodyne),
labeled Products will be shipped by JB Labs to Xanodyne. Any shipment
of Product from JB Labs, which is unapproved, or under quarantine
requires prior written consent by Xanodyne's Corporate Quality
Assurance. This authorization will be on a lot by lot basis.
14 CONTRACTUAL AGREEMENT
Established at Xanodyne Pharmaceuticals, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
For and on behalf of XANODYNE PHARMACEUTICALS INC:
S. A. Stamp CHIEF FINANCIAL OFFICER /s/ S. A. Stamp
---------------------------------------------------------------------------
NAME TITLE SIGNATURE
For and on behalf of ▇.▇. LABORATORIES INC:
▇▇▇▇▇ ▇▇▇▇▇▇▇ General Manager /s/ S. A. Stamp
---------------------------------------------------------------------------
NAME TITLE SIGNATURE
16
APPENDIX I
LIST OF PRODUCTS
Products
Duet Tablets 100ct Bottle
Duet Tablets Bulk
Duet Chewable Tablets 90ct Bottle
Stuart Prenatal Tablets 100ct Bottle
DEFINITIONS:
"Master Batch Record(s)" means the approved formulation, manufacturing/packaging
instructions, and controls whereby a Batch of Product is manufactured. Master
Batch Records must be written per cGMPs for all, stability, and commercial
manufacturing processes and may be Issued repeatedly of the manufacture of the
same Batch of Product.
"Methods" means approved analytical testing procedures for Raw Materials,
intermediates and final Product.
"NDC" means National Drug Code.
17
APPENDIX II
LIST OF CONTACTS
(NAME, PHONE, FAX, E-MAIL)
ISSUE XANODYNE PHARMACEUTICALS INC JB LABORATORIES, INC
----- ---------------------------- --------------------
Product Release Contact: ▇▇▇▇▇ ▇▇▇▇▇ Contact: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Phone : (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax : (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇ E-mail: ▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
Investigations Contact: ▇▇▇▇▇ ▇▇▇▇▇ Contact; JParesh Hansji
Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Phone : (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax : (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇ E-mail: ▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
Regulatory Inspections Contact: ▇▇▇▇▇ ▇▇▇▇▇ Contact: ▇▇▇▇▇ ▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Phone : (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax : (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇ E-mail: ▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
Stability Contact: ▇▇▇▇▇ ▇▇▇▇▇ Contact: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Phone : (▇▇▇) ▇▇▇-▇▇▇▇
Fax:(▇▇▇)▇▇▇-▇▇▇▇ Fax : (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇ E-mail: ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
Validation Contact: ▇▇▇▇▇ ▇▇▇▇▇ Contact: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Phone: (▇▇▇)▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax : (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇ E-mail: ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
Complaints Contact: ▇▇▇▇▇ ▇▇▇▇▇ Contact: ▇▇▇▇▇ ▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Phone : (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax : (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇ E-mail: ▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
Change Management Contact: ▇▇▇▇▇ ▇▇▇▇▇ Contact: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Phone : (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax : (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇ E-mail : ▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
Audits Contact: ▇▇▇▇▇ ▇▇▇▇▇ Contact: ▇▇▇▇▇ ▇▇▇▇▇▇
Phone: (▇▇▇)▇▇▇-▇▇▇▇ Phone : (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax : (▇▇▇) ▇▇▇-▇▇▇▇
▇-▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇ E-mail: ▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
18
APPENDIX III
RELEASE DOCUMENTATION
The release documentation for all Batches will include a Certificate of Analysis
(COA) and a Certificate of Conformance (COC).
A Certificate of Analysis (COA)
This document will list the following:
- The Product Name
- The Batch Number
- The Date of Manufacture
- All Analytical Test Results and Specifications
- All Microbiological Test Results
- Certification that all Specifications have been met.
A Certificate of Conformance (COC)
This document will attest to the fact that the Batch of Products was made in
accordance with all applicable regulations, product licenses, and company
policies. This document will include:
- Product name
- Lot number
- Batch quantity approved
- Expiry date
- A statement confirming that the batch record conforms to cGMP
requirements and has been reviewed and approved by JB Labs' Quality
Assurance.
JB Labs' authorized Quality Assurance personnel will sign the above
certificates.
19
