PENN PHARMACEUTICALS LIMITED
and
CELGENE CORPORATION
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MANUFACTURING AGREEMENT
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Tel: (44 1633) 869191
Fax: (44 1633) 485612
INDEX
CLAUSE
1 Interpretation
2 Establishment by Penn of Facility for manufacture of the Products
3 Manufacture and supply of the Products
4 Conditions of sale
5 Specification of the Products
6 Manufacture, packaging and delivery of the Products
7 Price of the Products
8 Force Majeure
9 Duration and termination
10 Option
11 Assistance by Penn to Celgene
12 Confidentiality
13 Notices and service
14 Miscellaneous
15 Performance
16 Information
17 Disputes
18 Governing Law
SCHEDULE 1 The Products
SCHEDULE 2 Specification of the Products
i
SCHEDULE 3 Criteria for the establishment of the Facility
SCHEDULE 4 Start up and other fixed costs payable by Celgene
SCHEDULE 5 Plan of the Facility
SCHEDULE 6 Minimum Order Volume (By Quarter)
ii
MANUFACTURING AGREEMENT
THIS AGREEMENT is made the 1995
BETWEEN:
1 PENN PHARMACEUTICALS LIMITED a company validly existing and incorporated
in England and Wales under number 1331447, whose registered office is at
▇▇▇▇▇ ▇▇/▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Tredegar Gwent NP2 3AA ("Penn")
2 CELGENE CORPORATION a corporation validly existing and organised under the
laws of the state of Delaware USA whose registered office is at ▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ PO Box 4914 Warren, New Jersey 07059 USA ("Celgene")
RECITALS
(A) Penn carries on the business of manufacturing and selling certain
pharmaceutical products and services.
(B) Celgene wishes Penn to manufacture and supply to Celgene the Products (as
hereinafter defined) and Penn is willing to manufacture and supply the
same on the terms and subject to the conditions of this Agreement.
OPERATIVE PROVISIONS
IT IS HEREBY AGREED as follows:
1 Interpretation
1.1 In this Agreement, unless the context otherwise requires:
"the Facility" means the external stand alone facility established
by Penn at the Premises for the purpose of the
manufacture of the Products
"Force Majeure" means in relation to either party, any
circumstances beyond the reasonable control of
that party
"Information" means all written and verbal information relating
to the Products and Specifications, including but
not
limited to know-how, technical and non-technical
materials, processes, developmental data,
validation data and batch records
"the Premises" means Penn's premises at ▇▇▇▇▇ ▇▇/▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or such other
premises as the parties may from time to time agree
in writing
"Products" means the finished thalidomide capsules set out in
Schedule 1 which conform to the Specification and
any other products which the parties hereto may
from time to time agree in writing that Penn will
manufacture and supply to Celgene on the terms and
conditions of this Agreement
"Specification" means the technical specifications of the Products
set out in Schedule 2 and those notified by Celgene
to Penn for the purposes of FDA approval of the
Products or any other specification of the Products
agreed in writing between Penn and Celgene from
time to time
1.2 Any reference in this Agreement to 'writing', or cognate
expressions, includes a reference to any communication effected by
facsimile transmission or any comparable means subject to the
provisions of clause 13.3
1.3 Any reference in this Agreement to a clause or Schedule is to a
clause of or Schedule to this Agreement and any reference to a
paragraph is to a paragraph of the Schedule in which such reference
appears
1.4 The headings in this Agreement are for convenience only and shall
not affect its interpretation
2 Establishment by Penn of Facility for manufacture of the Products
2.1 Penn shall establish and maintain a manufacturing facility at the
Premises for the manufacture of the Products (the Facility) in
accordance with both the external manufacturing unit plan shown in
Schedule 5 approved by Celgene prior to the execution of this
Agreement, and the provisions of Schedule 3 with a view to Penn
being able to supply Celgene with Products within 6 months of the
date of execution of this document
2
2.2 In consideration of the acceptance by Penn of the obligations set
out in clause 2.1, Celgene agrees to pay to Penn the amounts (and
the details of which are) set out in Schedule 4 on the dates or at
the times stated therein and otherwise in accordance with the
provisions thereof
3 Manufacture and supply of the Products
3.1 During the continuance of this Agreement Penn shall manufacture and
sell to Celgene, and Celgene shall purchase from Penn such
quantities of the Products as may be ordered by Celgene from time to
time under clause 3.2, subject to the terms and conditions of this
Agreement
3.2 Any order for products shall be received by Penn at least 60 days
before the required date for despatch of such Products and shall be
for the minimum quantities of the Products set out in Schedule 1
3.3 Orders for the Products shall be given by Celgene to Penn in writing
or, if given orally, shall be confirmed by Celgene in writing not
more than 3 days thereafter
3.4 Celgene shall give reasonable notice to Penn in writing of:
3.4.1 its estimated orders of the Products for each quarter during
the continuance of this Agreement; and
3.4.2 any revisions to those estimates, forthwith after they are
made.
3.5 Provided that Celgene shall order not less than the minimum order
volume of the Products set out in Schedule 6 in each year of this
Agreement, the Facility shall be used by Penn exclusively for the
manufacture and supply of the Products to Celgene.
3.6 In the event that Celgene does not order the quantity of Products
referred to in clause 3.5, Penn shall be entitled to use Facility
for other purposes including (for the avoidance of doubt) the
manufacture and sale of any pharmaceutical product (other than
thalidomide and its derivatives and analogues) for any customer of
Penn, provided always that:
3.6.1 such manufacture does not in any way compromise or prejudice
any regulatory approval necessary for the manufacture and
supply of the Products to Celgene or conformity with any
protocols relative thereto or the integrity of any of the
Products;
3.6.2 Penn shall at all times give priority to the supply of the
Products to Celgene;
3.6.3 any such use shall be subject to the prior written approval of
Celgene;
3
3.6.4 Celgene shall not be liable for the lease/rental costs
referred to in paragraph 2 of Schedule 4 during such time as
the Facility is not being used exclusively for the manufacture
of the Products for the supply to Celgene in the event and
only to the extent that Penn is able to recover such costs
from a third party;
3.6.5 Penn shall be obligated to use its reasonable endeavours to
receive and recover the maximum possible mount from any third
party under any such arrangement;
3.6.6 if Penn (or any of its affiliates) itself uses the Facility
for such other purposes, Celgene shall not be liable for the
lease/rental costs referred to in paragraph 2 of Schedule 4
during such time as the Facility is not being used exclusively
for the manufacture of the Products for supply to Celgene to
the extent of expenses which shall be allocated hereunder to
Penn for such use of the Facility at the same rate as Penn
charges to Celgene hereunder, pro rated as appropriate to
reflect the extent of the use of the Facility by Penn or its
affiliate;
3.6.7 if the Facility or any part thereof is altered or reconfigured
in any way in order to facilitate the use of the Facility for
such purposes, (a) Celgene shall not be liable for any cost of
expense incurred in connection with any such alteration or
reconfiguration, (b) Penn (or the applicable third party)
shall bear any such cost and expense as well as any cost or
expense which may be required thereafter in order to return
the Facility or such part thereof to its prior state for the
manufacture of the Products for supply to Celgene, and (c)
neither such alteration or reconfiguration nor any action
which may be required to return the Facility or such part
thereof to its prior state shall delay the delivery of
Products for supply to Celgene as contemplated by this
Agreement; and
3.6.8 Penn shall bear any costs associated with any equipment,
Facility or personnel validation or re-validation required to
enable Penn to recommence the manufacture of Products for
supply to Celgene in compliance with the United States Food
and Drug Administration ("FDA") current Good Manufacturing
Practices (cGMPs) following the use of the Facility by Penn
for such other purposes.
3.7 Penn warrants to Celgene that Penn is duly authorised and holds the
necessary manufacturing, product and other licenses to manufacture
the Products and supply the same to Celgene and is otherwise able to
perform the obligations on its part contained in this Agreement
3.8 Penn warrants to Celgene that the Products will be manufactured,
stored and shipped in compliance with all requirements of the FDA,
including, without limitation, the
4
cGMP regulations and shall be manufactured, stored and shipped in
compliance with all applicable US laws and requirements
4 Conditions of sale
4.1 All sales of the Products pursuant to this Agreement shall be
subject to the standard terms and conditions of sale of Penn (a copy
of Penn's existing terms and conditions having been supplied by Penn
to Celgene prior to the execution of this Agreement), except to the
extent that:
4.1.1 any provision of such terms and conditions is inconsistent
with any provision of this Agreement, in which event the
latter shall prevail; or
4.1.2 Penn and Celgene agree in writing to vary those terms and
conditions of sale
4.2 In order to protect Penn's existing market for the sale of the
Products or similar products to its other customers, Celgene shall
not knowingly resell or knowingly permit the resale of any of the
products supplied by Penn under this Agreement within the United
Kingdom
5 Specification of the Products
5.1 All Products sold by Penn to Celgene pursuant to this Agreement
shall conform in all respects to the Specification and, subject to
the provisions of clauses 6.6 and 6.7, Celgene shall be entitled to
reject any of the Products which are not in accordance with the
Specification
5.2 Penn shall consult with Celgene from time to time during the
continuance of this Agreement in order to ensure that the
Specification of the Products to be sold by Penn to Celgene is
acceptable to both parties, but Penn shall not be obliged to agree
to any change to the Specification requested by Celgene except where
such a change is required by a legally authorised regulatory body
for the purposes of filing and/or maintaining a regulatory
submission or product licence
6 Manufacture, packaging and delivery of the Products
6.1 Celgene shall in a timely fashion supply or procure the supply of
all active material on a free-issue basis to enable Penn to perform
its obligations under this Agreement and Penn shall have no
liability to Celgene for any delay or failure in the manufacture by
Penn of the Products resulting directly from Celgene's failure so to
do
5
6.2 Without prejudice to the provisions of clause 6.1, Penn shall use
its best endeavors to manufacture (exclusively for Celgene) and
maintain (exclusively for Celgene) sufficient stocks of the Products
to fulfil its obligations under this Agreement
6.3 Penn shall, at the request and cost of Celgene, pack the Products in
such manner as Celgene requires for delivery and transportation of
the Products to Celgene
6.4 Penn shall use its best endeavours to deliver each of Celgene's
orders for the Products on the date specified in the order, provided
that if, despite those endeavours, Penn is unable for any reason to
fulfil any delivery of the Products on the specified date, Penn
shall not be deemed to be in breach of this Agreement or have any
liability to Celgene unless and until Celgene has given written
notice to Penn requiring the delivery to be made within a specified
time period and Penn has not fulfilled the delivery within that
period
6.5 Delivery of the Products shall take place at the Premises but Penn
shall at Celgene's request arrange for suitable transport to
Celgene's premises or such other premises as Celgene may notify to
Penn from time to time and arrange insurance therefor, in which case
the costs of such transport and insurance shall be borne by Celgene
6.6 Celgene shall, within 45 days of Celgene's receipt of each shipment
of the Products, notify Penn in writing of any defect by reason of
which Celgene alleges that the Products delivered are not in
accordance with the Specification and which should be apparent on
reasonable inspection
6.7 If Celgene fails to give such a notice under clause 6.6 then, except
in respect of any defect which is not apparent on reasonable
inspection, the Products shall be conclusively presumed to be in all
respects in accordance with the Specification, and accordingly
Celgene shall be deemed to have accepted the delivery of the
Products in question and Penn shall have no liability to Celgene
with respect to that delivery, except in respect of any defect which
was not apparent on reasonable inspection
6.8 If Celgene rejects any delivery of the Products which are not in
accordance with the Specification, it shall be entitled to elect, at
its sole discretion, either that Penn supply replacement Products
which conform to the Specification (in which case Celgene shall be
obligated to provide Penn with sufficient active material to enable
Penn to manufacture such replacement Products and Penn shall be
obligated to supply Celgene with such replacement Products which so
conform within 21 days of Penn's receipt of such active material) or
that Penn credit Celgene accordingly with the amount charged to
Celgene for such Products hereunder and in either case (subject to
compliance by Penn with all of its obligations under this Agreement)
Penn shall have no further liability to Celgene in respect thereof
6
6.9 Risk in and responsibility for each shipment of the Products shall
pass to Celgene once they are loaded onto transport at the Premises
and signed for by the authorised carrier
6.10 Celgene hereby agrees to indemnify and keep indemnified Penn from
and against all claims, demands, costs, losses, expenses or
liabilities whatsoever suffered or incurred by Penn arising from or
in relation to the manufacture by Penn of the Products or the use or
consumption of any of the Products by any person or otherwise in
relation to the Products or the stability data or protocols relative
thereto or arising out of the performance by Penn of this Agreement
in whole or in part save to the extent that the same is caused by or
otherwise due to the failure of Penn to ensure that the Products
meet with the Specification, or the failure of Penn to ensure that
the manufacture of the Products was in compliance with the
regulations and requirements of FDA or cGMPs, or the fraud, wilful
misconduct or negligence of Penn in the manufacture of the Products
for Celgene
6.11 For the purposes of clause 6.10, Penn shall promptly notify Celgene
in writing of any claim or matter arising in respect of which Penn
shall or may seek indemnification from Celgene and shall co-operate
fully with Celgene in respect thereof and shall not agree or
compromise liability without Celgene's prior consent which shall not
be unreasonably withheld or refused. Notwithstanding the foregoing,
Celgene shall not be liable for fees or any amounts payable upon
settlement of any claim or action effected without such prior
written consent from Celgene (not to be unreasonably withheld or
refused)
7 Price of the Products
7.1 Subject to the following provisions of this clause and assuming the
free issue by Celgene to Penn of all active material in the
manufacture of the Products, the price for each of the Products
shall be US $96.00 per 1,000 capsules of the Product payable in
pounds sterling at the current exchange rate prevailing on the date
hereof; provided that if such exchange rate changes (upwards or
downwards) by more than 5% from the rate prevailing at any time,
such price shall be accordingly adjusted (upwards or downwards) on a
pro rata basis on each such occasion
7.2 If, as a result of either a lack of instructions from Celgene or a
late change of instructions by Celgene, Penn reasonably believes
that it would be required to incur additional costs or expenses in
order for it to comply with the terms of this Agreement, it promptly
shall notify Celgene of its need for such instruction, if
applicable, and its good faith estimate of the amount of such
additional cost or expense. Upon receipt of such notice, Celgene
promptly shall notify Penn that Celgene elects, at its sole
discretion, to accept such cost or expense or, alternatively, to
provide the requisite instructions or rescind its late change in
instructions, as the case may be. Celgene shall not be liable for
any additional cost or expense which it
7
has not approved in advance. Penn shall not be liable for any cost
or expense it incurs as a result of Celgene not having provided it
with proper instructions hereunder, provided that Penn shall have
properly notified Celgene of its need for such instructions and
provided Celgene with a reasonable estimate of such cost and expense
pursuant to the terms hereof
7.3 The price for the Products shall be exclusive of:
7.3.1 any costs of packaging, carriage and insurance of the
Products; and
7.3.2 any value added tax or other applicable sales tax or duty for
which Celgene shall be liable to pay to Penn or for which
Celgene shall be liable to re-imburse Penn within 30 days from
the date of notification by Penn to Celgene of the extent of
the charges
7.4 Penn shall invoice Celgene monthly in respect of all deliveries of
the Products made under this Agreement during the previous month,
and Celgene shall pay the sums shown to be due in cleared funds to
the bank nominated by Penn within 30 days from the date on which
each invoice is submitted by Penn
7.5 If either party fails to pay on the due date any amount which is due
to the other under this Agreement then, without prejudice to its
other rights hereunder:
7.5.1 amounts due by Celgene to Penn shall bear interest from such
due date until payment is made in full, both before and after
any judgment, at the lesser of (a) three percent (3%) per
annum over Lloyds Bank plc lending rate from time to time and
(b) the rate then being charged to Penn under its primary
credit facility (with evidence of such rate satisfactory to
Celgene to be delivered by Penn);
7.5.2 amounts due by Penn to Celgene shall bear interest from such
due date until payment is made in full, both before and after
any judgment, at the lesser of (a) three percent (3%) per
annum over Lloyds Bank plc lending rate from time to time and
(b) the rate then being charged to Celgene under its primary
credit facility (with evidence of such rate satisfactory to
Penn to be delivered by Celgene);
7.5.3 notwithstanding the provisions of clauses 7.5.1 and 7.5.2, if
any amount which is due to the other under this Agreement is
disputed by a party, it shall promptly notify the other of the
amount and basis of the dispute and the obligation of the
disputing party to pay interest pursuant to clause 7.5.1 or
7.5.2, as the case may be, shall be suspended until such
dispute is resolved; provided that in the event the disputing
party prevails in such dispute it shall not have any
obligation to pay any interest under clause 7.5.1 or 7.5.2, as
the
8
case may be; and provided further that, in the event the
non-disputing party prevails in such dispute, the obligations
of the disputing party to pay interest under clause 7.5.1 or
7.5.2, as the case may be, shall be reinstated and such
interest payment shall include all interest which would have
accrued during the period when such obligation had been
suspended pursuant to this clause 7.5.3; and
7.5.4 in the event Celgene fails to pay on the due date an amount in
excess of $10,000 which is due to Penn under this Agreement
and Celgene does not notify Penn that such amount is being
disputed pursuant to clause 7.5.3, then Penn shall be entitled
to suspend deliveries of the Products until such outstanding
amount has been delivered by Celgene to Penn
8 Force Majeure
8.1 If either party is affected by Force Majeure, it shall promptly
notify the other party of the nature and extent of the circumstances
in question
8.2 Notwithstanding any other provision of this Agreement, neither party
shall be deemed to be in breach of this Agreement, or otherwise be
liable to the other, for any delay in performance or the
non-performance of any of its obligations under this Agreement, to
the extent that the delay or non-performance is due to any Force
Majeure of which it has notified the other party, and the time for
performance of that obligation shall be extended accordingly. Any
delay or non-performance shall, however, be corrected as soon as
reasonably practicable
9 Duration and termination
9.1 This Agreement shall come into force on the date stated at the
beginning of this Agreement and, subject to the following provisions
of this clause, shall continue in force for a period of three (3)
years and thereafter unless or until terminated by either party
giving to the other party at any time not less than six (6) months'
written notice to expire on or at any time after the end of the
initial three year period
9.2 Either party shall be entitled forthwith to terminate this Agreement
by written notice to the other if:
9.2.1 that other party commits any continuing or material breach of
any of the provisions of this Agreement including, without
limitation, the failure by Penn promptly to correct its
non-performance as described in clauses 15.1 to 15.4
(inclusive) and, in the case of such a breach which is capable
of remedy, fails to remedy the same within 30 days after
receipt of a written notice giving full particulars of the
breach and requiring it to be remedied;
9
9.2.2 an encumbrancer takes possession of or a receiver is appointed
over any of the property or assets of that other party;
9.2.3 that other party makes any voluntary arrangement with its
creditors or becomes subject to an administration order;
9.2.4 that other party goes into liquidation (except for the
purposes of an amalgamation, reconstruction or other
reorganisation and in such manner that the company resulting
from the reorganisation effectively agrees to be bound by or
to assume the obligations imposed on that other party under
this Agreement); or
9.2.5 that other party ceases, or threatens to cease, to carry on
business
9.3 Prior to the termination of the initial three-year term, Celgene
shall be entitled to terminate this Agreement at any time by
providing Penn with no less than three months' notice in the event
Celgene shall determine to eliminate, curtail or otherwise suspend
its immunotherapeutics development programme; provided that Celgene
shall be obligated to make any payments to Penn pursuant to this
Agreement through the date specified by Celgene in such notice and
to bear any out-of-pocket costs and expenses actually incurred by
Penn hereunder prior to the date of such notice to the extent such
costs made to purchase the equipment listed on Schedule 4 or related
to the installation of such equipment or the preparation of the
Premises for the fulfillment of Penn's obligations hereunder are
proved by Penn through the submission of properly dated invoices and
agreements and to the further extent such costs and expenses cannot
be avoided by Penn through the cancellation of orders, the
termination of agreements or any similar means
9.4 For the purpose of clause 9.2.1, a breach shall be considered
capable of remedy if the party in breach can comply with the
provision in question in all respects other than as to the time of
performance (provided that the time of performance is not of the
essence)
9.5 Any waiver by either party of a breach of any provision of this
Agreement shall not be considered as a waiver of any subsequent
breach of the same or any other provision
9.6 The rights to terminate this Agreement given by this clause shall
not prejudice any other right or remedy of either party in respect
of the breach concerned (if any) or any other breach
9.7 Upon the termination of this Agreement for any reason, subject as
otherwise provided in this Agreement and to any rights or
obligations which have accrued prior
10
to termination, neither party shall have any further obligation to
the other under this Agreement, save that clauses 6.10, 6.11, 10,
12, 13 and 16 shall survive termination
10 Option
10.1 In consideration of the acceptance by Celgene of its obligations
under this Agreement, in the event of termination of this Agreement
pursuant to clauses 9.1 or 9.3 Penn hereby grants to Celgene an
option ("the Option") to purchase from Penn the machinery and
equipment used by Penn exclusively in the performance of its
obligations under this Agreement ("the Equipment") which shall
include (for the avoidance of doubt) the Alexanderwerke Roller
Compactor, the ▇▇ ▇▇▇▇▇▇▇ Blender and the Zanasi Capsule Filler)
together with the manufacturing technology, knowhow, validations
records and other documentation relating exclusively to the
manufacture of the Products on the terms set out in the following
provisions of this clause 10
10.2 The price to be paid for the Equipment shall be the cost to Penn of
acquisition of the same less depreciation at the rate of ten percent
(10%) per annum (on a straight line basis) for each completed year
of the life of this Agreement and the sum of (pound)1 for the other
assets referred to in clause 10.1
10.3 The Option shall be exercisable at any time within three months of
such termination of this Agreement by written notice to Penn
10.4 Completion of the purchase of the Equipment pursuant to the exercise
by Celgene of the Option shall take place at the Premises (by mutual
arrangement and on reasonable notice) within 30 days of the date on
which the notice of exercise is served whereupon:
10.4.1 Celgene shall at its own expense arrange for the removal of
the Equipment from the Property without causing damage to
the Property;
10.4.2 Celgene shall pay to Penn in cleared funds to the Bank
nominated by Penn the price referred to in clause 10.2
against Penn's invoice for the same;
10.4.3 Penn shall deliver to Celgene all books, records, manuals
and knowhow relative to the manufacture by Penn of the
Products for Celgene as shall be in written form and, in
the case of information and data relative thereto as is
stored electronically, on 'floppy' disk
10.4.4 Penn shall allow Celgene reasonable access to its staff to
enable Celgene or its duly authorised representatives or
agents to re-install and re-commission the equipment
described in 10.1 at an alternative manufacturing site.
Penn
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will invoice Celgene according to its prevailing billing
practices for any employee time utilised by Celgene
11 Assistance by Penn to Celgene
During the continuation of this Agreement, Penn hereby agrees to offer
reasonable assistance to Celgene upon request in connection with the
establishment by Celgene of a facility or facilities similar to the
Facility outside the United Kingdom and Europe for the purposes of the
manufacture of the Products and in such event shall make available to
Celgene the manufacturing technology known to Penn which might reasonably
be required by Celgene in connection with the same
12 Confidentiality
The terms of and all matters contemplated by this Agreement, all
Information (as defined in clause 1), and all information disclosed by
each party to the other in the performance of this Agreement and
designated by a party to the other as confidential (including, without
limitation, all information disclosed by each party to the other as
"CONFIDENTIAL" pursuant to the terms of the Confidential Disclosure
Agreement, dated as of 10 August 1993) are confidential as between the
parties hereto and neither party, shall (save as may be required by law or
pursuant to legal or judicial process) make or permit the making of any
announcement or disclosure of or in relation to the same; provided that
nothing in this clause shall prohibit or restrict the exercise of any
rights of either party hereunder or the right of Celgene to disclose to
the FDA or in its regulatory filings of the identity of Penn and the
existence of this Agreement; and provided further that it is understood
that the foregoing confidentiality obligation shall not apply to
information disclosed by either party to the other when:
(a) use, publication, or disclosure of the information is
permitted under terms of a written contract (following the
date hereof) between the parties;
(b) the information was known or used by the receiving party prior
to the disclosure by the other party, as evidenced by written
or printed documents;
(c) the information was known to the public or generally available
to the public prior to the date it was received by the
receiving party;
(d) the information became known to the public or generally
available to the public subsequent to the date it was received
without the receiving party being responsible for such public
availability; or
(e) the information is lawfully disclosed to the receiving party
by a third party not deriving the same from the disclosing
party
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Exceptions (d) and (e) above shall apply only from and after the date such
information shall become known or generally available to the public or
shall be received from said party, respectively
13 Notices and service
13.1 Any notice or other communication required or authorised by this
Agreement to be given by either party to the other may be given by
hand or sent (by overnight courier or facsimile transmission or
comparable means of transmission) to the other party at the address
referred to in clause 13.4
13.2 Any notice or other communication given by overnight courier under
clause 13.1 which is not returned to the sender as undelivered shall
be deemed to have been given on the second day after the notice or
other communication was delivered
13.3 Any notice or other communication sent by facsimile transmission or
comparable means of transmission shall be deemed to have been duly
given on the date of transmission, provided that a confirming hard
copy thereof is sent by DHL or Federal Express or equivalent courier
to the other party at the address referred to in clause 13.4 within
24 hours after transmission or (if later) by the end of the
following business day
13.4 Service of any legal proceedings concerning or arising out of this
Agreement shall be effected by causing the same to be delivered to
the company secretary of the party to be served at its registered
office, or to such other address as may be notified by the party
concerned in writing from time to time
14 Miscellaneous
14.1 Penn shall be entitled to perform any of the obligations undertaken
by it and to exercise any of the rights granted to it under this
Agreement through any other company which at the relevant time is
its holding company or subsidiary (as defined by section 736 of the
Companies Act 1983) or the subsidiary of any such company shall for
the purposes of this Agreement be deemed to be the act or omission
of Penn
14.2 Celgene shall be entitled to perform any of the obligations
undertaken by it and to exercise any of the rights granted to it
under this Agreement through any other company which at the relevant
time is its holding company or subsidiary or the subsidiary of any
such holding company, and any act or omission of any such company
shall for the purposes of this Agreement be deemed to be the act or
omission of Celgene
14.3 Penn shall be entitled to assign the benefit of (subject to the
assumption of all its obligations under) this Agreement to any other
company which is under the control
13
(directly or indirectly) of the persons who at the date of this
Agreement have control of Penn
14.4 Without the consent of Penn, Celgene shall be entitled to assign the
benefit of (subject to the assumption of all its obligations under)
this Agreement to any other company which succeeds to the business
of Celgene's immunotherapeutics programme whether through merger,
consolidation or acquisition
14.5 Subject to the provisions of clauses 14.1 to 14.4 (inclusive) this
Agreement is personal to the parties, and neither of them may,
without the written consent of the other, assign, mortgage, charge
(otherwise than by floating charge) or dispose of any of its rights
hereunder, or sub-contract or otherwise delegate any of its
obligations under this Agreement
14.6 Nothing in this Agreement shall create, or be deemed to create, a
partnership between the parties
14.7 This Agreement, which supersedes the confidentiality agreement
signed between Penn and Celgene dated 10 August 1993, contains the
entire agreement between the parties with respect to its subject
matter, supersedes all previous agreements and understandings
between the parties, and may not be modified except by an instrument
in writing signed by the duly authorised representatives of the
parties
14.8 Each of the parties hereto warrants to the other that it is duly
authorised to enter into this Agreement, that this Agreement
constitutes legally binding obligations enforceable upon it and that
it is not subject to any restriction which may prohibit or restrict
the due performance of the obligations accepted by it hereunder
14.9 If any provision of this Agreement is held to be invalid, illegal or
unenforceable, the balance of this Agreement nevertheless shall
remain in effect, and if any provision is held to be inapplicable to
any person or circumstance, it nevertheless shall remain applicable
to all other persons and circumstances
15 Performance
15.1 Should Penn fail to pass an FDA Pre-Approval Inspection due to
Penn's negligence, incompetence, fraud or wilful misconduct, and,
should such failure materially affect the approval of an NDA
submission made by Celgene, Penn will reimburse to Celgene the
payments made to Penn pursuant to clause 2.2 and Schedule 4
15.2 Should Penn fail to pass a subsequent FDA Inspection due to Penn's
negligence, incompetence, fraud or wilful misconduct, and, should
such failure lead to Product seizure or recall or material loss to
Celgene, Penn will reimburse to Celgene all
14
payments made to Penn in respect of the Products recalled or seized
and will reimburse Celgene for any further costs incurred by it
15.3 Should the Facility be unavailable for manufacture of the Products
in compliance with FDA cGMPs, otherwise than by reason of any act
matter or thing beyond Penn's control, Celgene will not be required
to make the lease payments referred to in Schedule 4 of the Facility
for any such period of unavailability
15.4 Penn covenants to Celgene that, throughout the term of this
Agreement, it shall remain duly authorised and hold the necessary
manufacturing, product and other licences to manufacture the
Products and supply the same to Celgene and it will be otherwise
able to perform the obligations on its part contained in this
Agreement throughout the terms of this agreement
16 Information
16.1 Information gained by Penn and Celgene:
(i) in the development of Products,
(ii) the development, scale-up and commission of processes for
manufacture of Products, and
(iii) associated regulatory documents necessary for establishing the
compliance with FDA cGMPs in the manufacture of Products,
shall be the exclusive property of Celgene
16.2 Information gained by Penn or Celgene through or by reason of the
implementation of this Agreement not specifically relating to:
(i) the development of the Products,
(ii) the development, scale-up and commission of processes for
manufacture of the Products, and
(iii) associated regulatory documents necessary for establishing the
compliance with FDA cGMPs in the manufacture of the Products,
shall be owned jointly by Penn and Celgene. Any jointly owned
Information may be used by Celgene in the execution of its chiral
and immunotherapeutics business without payment of a royalty to
Penn. Any jointly owned Information may be used by Penn in the
execution of its drug product manufacturing business, except for the
manufacture of thalidomide and its derivatives and analogues,
without payment of
15
a royalty to Celgene. For the avoidance of doubt, the ownership of
any information relating to the business of Penn and the manufacture
and sale in the United Kingdom by Penn of thalidomide and its
derivatives and analogues which Penn possesses as of the date hereof
and which was not gained by Penn by reason of this Agreement, Penn's
relationship with Celgene, or the contemplated relationship of the
parties shall be retained by Penn and may be used by Penn without
payment of a royalty to Celgene
16.3 Penn acknowledges Celgene's exclusive, right, title and interest in
and to any and all patents which at any time may have been issued to
Celgene in or relating to Products, or in any other products, and
agrees that it shall not do, or cause to be done, any acts
contesting, impairing, or tending to impair any position of such
right, title and interest. Penn further acknowledges that nothing in
this Agreement shall be construed as granting a proprietary interest
to Penn in any of Celgene's patents, and that it will not in any
manner represent that it possesses any ownership interest in same,
or take any action which might create such interest
17 Disputes
Any dispute, controversy or claim arising out of or relating to this
Agreement or the breach, termination or validity hereof, shall be settled
by arbitration in accordance with the UNCITRAL Arbitration Rules as at
present in force. The place of arbitration shall be determined by Celgene
in its sole discretion
18 Governing Law
This Agreement shall be governed by and construed in all respects in
accordance with the laws of England and Wales
AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written.
16
SCHEDULE 1
The Products
------------
Name of Product Strength/Dosage Minimum Order Quantity
--------------- --------------- ----------------------
Thalidomide Capsule 50 mg 5 million capsules per annum
SCHEDULE 2
Specification of the Products
-----------------------------
17
SCHEDULE 3
Criteria for the establishment of the Facility
----------------------------------------------
1 The Facility
------------
Dedicated work area with controlled access agreed between Penn and Celgene
to meet with the requirements of the FDA MCA and the Health & Safety at
Work Executive ("HSWE").
2 Staff
-----
2.1 Only females who provide a notarised waiver (in a form satisfactory
to Penn) confirming their sterility will be permitted to work in or
have access to the facility
2.2 The following staff to be available as necessary at the Facility:
2 x Quality Assurance
2 x Technical Engineering
3 x Production
1 x Quality Control
1 x Administration
1 x Microbiology
------------------
Total: 10 staff
2.3 Penn to provide such additional human resources as is necessary for
the smooth functioning of the Facility and to meet all FDA, MCA and
HSWE regulations.
3 Equipment
---------
Such dedicated equipment as is necessary but to include:
- Alexanderwerke Roller Compactor
- ▇▇ ▇▇▇▇▇▇▇ Blender
- Zanasi Capsule Filler
19
Start Up and other fixed costs payable by Celgene
-------------------------------------------------
1 Start-up/validation costs Amount
------------------------- ------
(a) Facilities Planning )
- 'Pace Consultancy' )
)
(b) Commissioning Equipment )
)
(c) Process Development )
(on full Scale Equipment) )
)
(d) Facilities Commissioning )
(Interim and Final Production Units) )
)
(e) Process Validation )
)
(f) Document Control System Installation )
------------------
Total US$320,000*
------------------
* The sum of US$320,000 is payable as follows:
(i) US$80,000 on the first release of Products from final
production unit that satisfies the Specification
criteria
(ii) US$80,000 on successful review of final process and
documentation of or concerning the Facility
(iii) US$80,000 on successful completion of a mock FDA
Pre-Approval Inspection
(iv) US$80,000 on successful completion of an FDA
Pre-Approval Inspection
2 Lease/Rental Costs of dedicated Facility Amount
---------------------------------------- ------
(a) Facilities: lighting, heating, air coditioning, )
maintenance, etc )
)
(b) Equipment: depreciation, maintenance, etc )
)
(c) Staffing costs )
--------------------------
Total US$22,400 per month
--------------------------
## Monthly payments of US$22,400 to commence in the month during which the
first payment of US$80,000 is payable pursuant to paragraph 1(i) above.
All payments to be made in UK pounds sterling at the prevailing currency
exchange rate.
20
SCHEDULE 5
----------
Plan of the Facility
--------------------
As per LUWA Drawing Number CRT206B/501 A dated 25.10.95 subject to final
approval by Celgene.
21
SCHEDULE 6
----------
Minimum Order Volume (By Quarter)
---------------------------------
To be agreed within 3 months of execution of document.
22
SIGNED by ) Mrs. A. M. ▇▇▇▇
------ ) The BRADUS
duly authorised to sign ) GWEHELOE
for and on behalf of ) USK
PENN PHARMACEUTICALS LIMITED ) 6 WENT NSP. R.E.
---------------------------- )
in the presence of: )
)
)
)
)
)
SIGNED by ) /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------ ) ------------------------------------
duly authorised to sign ) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman & CEO
for and on behalf of )
CELGENE PHARMACEUTICALS LIMITED ) /s/ ▇▇▇ ▇. ▇▇▇▇▇
------------------------------- ) ------------------------------------
in the presence of: ) ▇▇▇ ▇. ▇▇▇▇▇, President & COO
23
