Ligand Pharmaceuticals Inc. Contracts
Sample Business Contracts
Manufacturing and Packaging Agreement - Cardinal Health PTS LLC and Ligand Pharmaceuticals Inc.
Manufacturing Forms
EXECUTION COPY
MANUFACTURING AND PACKAGING AGREEMENT
This MANUFACTURING AND PACKAGING AGREEMENT ("Agreement") is made this 13th
day of February, 2004, by and between Cardinal Health PTS, LLC, having a place
of business at 1100 Enterprise Drive, Winchester, Kentucky USA ("Cardinal
Health") and Ligand Pharmaceuticals, Inc., having its principal place of
business at 10275 Science Center Drive, San Diego, California USA ("Ligand").
A. Cardinal Health is the leading provider of contract
pharmaceutical development, manufacturing, packaging, analytical,
and sales and marketing services to the pharmaceutical industry.
B. Ligand has certain patent rights, technology and know-how
relating to Avinza(R) (sustained release morphine) and wants
Cardinal Health to assist in the formulation, filling, packaging
and testing of such product as provided in this Agreement and the
attachments hereto.
C. Ligand desires to engage Cardinal Health to provide certain
services to Ligand in connection with the manufacture and
packaging the Product (defined below); and Cardinal Health
desires to provide such services pursuant to the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants, terms and
conditions set forth below, the parties agree as follows:
ARTICLE 1
DEFINITIONS
The following terms have the following meanings in this Agreement:
1.1 "Administrative Costs" means all costs related to conducting a recall in
accordance with Applicable Laws.
1.2 "Affiliate(s)" means any corporation, firm, partnership or other entity
which controls, is controlled by or is under common control with a party.
For purposes of this definition, "control" shall mean the ownership of at
least fifty percent (50%) of the voting share capital of such entity or any
other comparable equity or ownership interest.
1.3 "API" means morphine sulfate as more fully described in the Manufacturing
Specifications which has been released by its supplier and obtained by
Cardinal Health as a Raw Material, along with a certificate of analysis, as
provided in this Agreement.
1.4 "Applicable Laws" means all laws, ordinances, rules and regulations within
the Territory applicable to the Manufacturing and Packaging of the Product
or any aspect thereof and
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the obligations of Cardinal Health or Ligand, as the context requires under
this Agreement, including, without limitation, (i) all applicable federal,
state and local laws and regulations of each Territory; (ii) the U.S.
Federal Food, Drug and Cosmetic Act, and (iii) the current Good
Manufacturing Practices promulgated by the Regulatory Authorities, as
amended from time to time ("cGMPs").
1.5 "Batch" means defined quantity of finished drug product which has been
Manufactured and Packaged in accordance with the Specifications. A "Batch"
shall equal the number of 100-capsule bottles resulting from encapsulation
("Batch Size") of *** kg of bead blend or *** kg [equivalents] of morphine
sulfate as indicated below:
STRENGTH BATCH SIZE (BOTTLES)
30mg ***
60 ***
90 ***
120 ***
The Batch Size indicated above assumes an estimated yield loss of ***
and shall be adjusted to reflect average actual output after production of
the first *** Batches.
1.6 "Calendar Quarter" means a period of three (3) consecutive months
commencing on January 1, April 1, July 1 or October 1 of any calendar year.
1.7 "Cardinal Health Information" shall have the meaning set forth in Article
12.
1.8 "Change Order" shall have the meaning set forth in Section 4.5(a).
1.9 "Commencement Date" means the first date upon which a Regulatory Authority
approves Cardinal Health as a manufacturer of the Product.
1.10 "Confidential Information" is as defined in Section 11.2.
1.11 "Contract Year" means each consecutive twelve (12) month period beginning
on the Commencement Date.
1.12 "Ligand Information" shall have the meaning set forth in Article 12.
1.13 "Defective Product" shall have the meaning set forth in Section 5.3.
1.14 "Delivery Date" shall mean the date on which Cardinal Health shall tender
the relevant Batch(es) to Ligand. Each Delivery Date shall be specified by
Ligand on the relevant Purchase Order and confirmed by Cardinal Health as
set forth in paragraph 4.3.
1.15 "Dispute" shall have the meaning set forth in Section 18.9.
1.16 "Effective Date" means the date first written above.
***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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1.17 "FDA" means the United States Food and Drug Administration.
1.18 "Firm Commitment" shall have the meaning set forth in Section 4.2.
1.19 "Manufacture" or "Manufacturing" means the compounding, encapsulation and
inspection of the Product in the primary packaging in accordance with the
Specifications and the terms and conditions set forth in this Agreement.
1.20 "Manufacture Date" means the day on which the Product is to be compounded
by Cardinal Health at the Manufacturing Facilities, which shall not be more
than 75 days prior to the relevant Delivery Date.
1.21 "Manufacturing Facilities" means Cardinal Health's facilities located at
1100 Enterprise Drive, Winchester, KY 40391.
1.22 "Manufacturing Specifications" means the Manufacturing specifications set
forth in Exhibit A.
1.23 "Minimum Requirement" shall have the meaning set forth in Section 4.1.
1.24 "MRR Documents" means a) all completed production/Batch records; b) all
quality control test/request forms (result worksheets) and associated data;
c) dynamic monitoring performed during processing; d) any alert/action
notifications generated during processing; e) any planned or unplanned
deviations associated with Product; f) any out of Specification result
investigations associated with Product; g) the Certificate of Analysis for
the Batch comparing testing to Specifications; h) the appropriate
disposition notification for the Batch.
1.25 "Package" or "Packaging" means the labeling and the packaging of the
Product into the secondary packaging in accordance with the Packaging
Specifications and the terms and conditions of this Agreement.
1.26 "Packaging Facilities" means Cardinal Health's facilities located at 3001
Red Lion Road, Philadelphia, PA 19114.
1.27 "Packaging Specifications" means the Packaging specifications set forth in
Exhibit B.
1.28 "Product" means Avinza(R)as fully compounded finished drug product which
has been Manufactured and Packaged in accordance with the Specifications.
1.29 "Purchase Order" shall have the meaning set forth in Section 4.3.
1.30 "Raw Materials" means all raw materials, supplies, components and packaging
necessary to manufacture, package and ship the Product in accordance with
the Specifications, including the API.
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1.31 "Regulatory Approval" shall have the meaning set forth in Section 7.4.
1.32 "Regulatory Authority" means any governmental regulatory authority within a
Territory involved in regulating any aspect of the development,
manufacture, market approval, sale, distribution, packaging or use of the
Product.
1.33 "Review Period" shall have the meaning set forth in Section 5.1.
1.34 "Rolling Forecast" shall have the meaning set forth in Section 4.2.
1.35 "Sample" shall have the meaning set forth in Section 5.1.
1.36 "Specifications" means, collectively, the Manufacturing Specifications and
the Packaging Specifications.
1.37 "Term" shall have the meaning set forth in Section 15.1.
1.38 "Territory" means the United States of America, Canada and any other
country which the parties agree in writing to add to this definition of
Territory in an amendment to this Agreement.
1.39 "Unit" means each individually Packaged unit of Product, as described more
fully in the Specifications.
1.40 "Unit Pricing" shall have the meaning set forth in Section 7.1.
1.41 "Validation Batches" shall mean each Batch of Product manufactured by
Cardinal Health which is necessary to support the validation portion of
Ligand's NDA submission to the FDA.
ARTICLE 2
VALIDATION, MANUFACTURE, PACKAGING & RELATED SERVICES
2.1 VALIDATION SERVICES. Cardinal Health shall perform the qualification,
validation and stability services described in EXHIBIT C of this Agreement
for the prices specified therein.
2.2 SUPPLY AND PURCHASE OF PRODUCT. During the Term, Cardinal Health shall
Manufacture and Package the Products in accordance with the Specifications,
the Applicable Laws and the terms and conditions of this Agreement.
Ligand's purchases of the Product from Cardinal Health shall be in
accordance with the terms and conditions of this Agreement.
2.3 OTHER RELATED SERVICES. Cardinal Health may provide other services upon
terms and conditions agreed to by the parties in writing from time to time.
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ARTICLE 3
MATERIALS
3.1 API. Cardinal Health shall be responsible for procuring, at Ligand's sole
cost, the API and applicable reference standards in quantities sufficient to
meet Ligand's requirements for each Product as further set forth in Article 4.
Ligand and Cardinal Health shall jointly negotiate the price of the API with any
third-party supplier(s) thereof, which price shall be subject to Ligand's
written approval. Upon receipt of the API, Cardinal Health shall conduct
identification testing of the API. Cardinal Health shall use the API solely and
exclusively for Manufacturing under this Agreement.
3.2 RAW MATERIALS. Cardinal Health shall be responsible for procuring,
inspecting and releasing adequate Raw Materials, including API as above, as
necessary to meet the Firm Commitment, unless otherwise agreed to by the parties
in writing. The suppliers will be specified in the Specifications. If after
initial Product qualification Ligand requires a change of any Raw Material
supplier for its own benefit (e.g. not due to the failure of a supplier to
timely supply Raw Materials to Specifications), the Specifications shall be
amended and if the cost of any such Raw Material is different than Cardinal
Health's costs for the same raw material of equal quality from other suppliers,
Cardinal Health shall adjust for the difference between Cardinal Health's cost
of the Raw Material and Ligand's mandated supplier's cost in the Unit Price of
the Product. Ligand will be responsible for all costs associated with
qualification of such new Ligand-required supplier of a Raw Material not
previously qualified by Cardinal Health. Except as provided above, all Raw
Material supplier changes must be agreed by the parties by amending the
Specifications in writing.
3.3 YIELD AND INVENTORY RECONCILIATION. Cardinal Health warrants that a minimum
yield will be achieved using the API purchased by Cardinal Health on behalf of
Ligand. Yield is defined as the relation between the API content of the Products
manufactured over a certain time span (actual number of capsules produced times
each strength), and the actual quantity of API used to manufacture such quantity
of Products. The minimum yield to be agreed upon will be determined after the
manufacture of the initial *** commercial batches of the Products and shall be
set forth in Exhibit D.
Thereafter, at the end of each Contract Year, the actual yield achieved by
Cardinal Health will be reconciled and compared to the minimum yield as set
forth in Exhibit D. Cardinal Health shall reimburse Ligand for API consumed in
excess of minimum yield. Cardinal Health will prepare for Ligand on an annual
basis a written explanation, by lot number, of all variances greater than those
listed in Exhibit D, unless otherwise agreed.
The parties agree that for specific manufacturing orders Ligand may provide
Cardinal Health with instructions that result in a yield which is lower than the
agreed upon minimum yield. Cardinal Health will not have to reimburse Ligand for
API to the extent that such loss is attributable to Cardinal Health's
manufacturing of Product in accordance with these specific manufacturing orders.
Cardinal Health shall communicate to Ligand within three (3) business days of
the end of each month the quantities (raw material and in-process) of API in
inventory.
***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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Ligand shall be permitted to send a representative to inventory API at Cardinal
Health upon reasonable prior notice and not more than once in any 12-month
period.
3.4 ARTWORK AND PACKAGING. Ligand shall provide or approve, prior to the
procurement of applicable components, all artwork, advertising and packaging
information necessary to Manufacture or Package the Product. Such artwork,
advertising and packaging information is and shall remain the exclusive property
of Ligand, and Ligand shall be solely responsible for the content thereof. Such
artwork, advertising and packaging information or any reproduction thereof may
not be used by Cardinal Health following the termination of this Agreement, or
during the Term of this Agreement in any manner other than solely for the
purpose of performing its obligations hereunder.
3.5 REIMBURSEMENT FOR MATERIALS. In the event of (i) a Specification change
requested by Ligand or Cardinal Health for Ligand's benefit and agreed by the
parties or to comply with any new requirement of a Regulatory Authority, (ii)
termination by Ligand without cause or expiration of this Agreement; or (iii)
unforeseeable obsolescence of any Raw Material, Ligand shall bear the cost of
any unused Raw Materials which cannot be otherwise used by Cardinal Health nor
returned for credit, provided that Cardinal Health purchased such Raw Materials
in quantities consistent with Ligand's most recent Firm Commitment and the
supplier's minimum purchase obligations.
ARTICLE 4
MINIMUM COMMITMENT, PURCHASE ORDERS & FORECASTS
4.1 MINIMUM ORDERS. During each Contract Year, Ligand shall order the minimum
number of units of Product ("Minimum Orders") set forth on EXHIBIT D. If Ligand
does not purchase such Minimum Orders during any Contract Year, within thirty
(30) days after the end of such Contract Year, Ligand shall pay Cardinal Health
the difference between (i) the total amount Ligand would have paid to Cardinal
Health if the Minimum Orders had been fulfilled for the Product (calculated
using an average batch price as shown in EXHIBIT D) and (ii) the sum of (a) all
purchases from Cardinal Health for the Product during the just-concluded
Contract Year plus (b) Cardinal Health's cost of all Raw Materials for that
portion of the Minimum Orders not placed. For clarity, Ligand shall not be
obligated to pay for any Product ordered but not delivered by Cardinal Health in
accordance with this Agreement.
4.2 FORECAST. On or before the first (1st) day of each calendar month following
the Commencement Date and at least four months prior to the first Delivery Date,
Ligand shall furnish to Cardinal Health a written twelve (12) month rolling
forecast of the quantities of Product that Ligand intends to order from Cardinal
Health during such period ("Rolling Forecast"). The first 3 months of such
Rolling Forecast shall constitute a binding commitment for the quantities of
Product specified therein ("Firm Commitment") and the following 9 months of the
Rolling Forecast shall be non-binding, good faith estimates.
4.3 PURCHASE ORDERS. At least quarterly, Ligand shall submit purchase orders for
the Firm Commitment portion of the Rolling Forecast, which specify the actual
number of Batches to be Manufactured and Packaged, the approximate number of
Units in each Batch, and the requested
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Delivery Dates for each Batch ("Purchase Order"). Ligand shall submit each
Purchase Order to Cardinal Health at least one hundred and twenty (120) days in
advance of the earliest Delivery Date requested in the Purchase Order. Cardinal
Health will confirm such Delivery Dates within fifteen (15) business days of
receipt of the Purchase Order. If Cardinal Health indicates within such 15-day
period that it is unable to meet any such delivery date, the parties will work
together in good faith to set an amended delivery date or dates. In the absence
of such indication, the Delivery Date(s) shall be deemed accepted. In the event
of a conflict between the terms of any Purchase Order and this Agreement, this
Agreement shall control. Notwithstanding the foregoing, Cardinal Health shall
supply Ligand with quantities of Product which exceed by not more than 25% the
quantities specified in the Firm Commitment, and shall use commercially
reasonable efforts to supply additional excess quantities requested by Ligand.
4.5 CUSTOMER'S MODIFICATION OR CANCELLATION.
(a) At any time up to 90 days prior to any relevant Delivery Date, Ligand
may cancel a Purchase Order or request a modification of the confirmed Delivery
Date, Specifications or quantity of Product (including e.g. quantities of dosage
strengths and encapsulation quantities) in such Purchase Order by submitting a
written change order ("Change Order") to Cardinal Health. If a Change Order is
submitted less than 90 days prior to the relevant Delivery Date, such Change
Order shall be effective and binding against Cardinal Health only upon the
written approval of Cardinal Health, which approval shall not be unreasonably
withheld. Notwithstanding the foregoing, Ligand shall remain responsible for the
Firm Commitment portion of the Rolling Forecast.
(b) Notwithstanding any amounts due to Cardinal Health under Section 4.1,
if Ligand fails to place Purchase Orders sufficient to satisfy the Firm
Commitment, Ligand shall, within thirty (30) days of receipt of invoice, pay to
Cardinal Health the difference between (i) the Unit Price for all Units that
would have been Manufactured and Packaged if Ligand had placed Purchase Orders
sufficient to satisfy the Firm Commitment and (ii) Cardinal Health's cost of any
Raw Materials that would have been used in such Units. Any amounts paid under
this paragraph shall be credited against any amounts subsequently due for
failure to meet Minimum Orders under paragraph 4.1.
4.6 UNPLANNED DELAY OR ELIMINATION OF MANUFACTURE OR PACKAGING. Cardinal Health
shall timely fill each Purchase Order, subject to the terms and conditions of
this Agreement. Cardinal Health shall notify Ligand within fifteen (15) days of
receipt of any Firm Commitment or Purchase Order if Cardinal Health determines
that any Manufacturing or Packaging will be delayed or eliminated for any
reason, provided however that such notice shall not relieve Cardinal of any of
its obligations, absent written consent of Ligand.
4.7 CUSTOMER INSPECTION. Ligand may base up to two (2) representatives at the
Facilities to observe, subject to Cardinal Health's reasonable measures in
furtherance of its obligations to protect the confidential information of third
parties, the Manufacturing and Packaging provided that Ligand provide Cardinal
Health at least ten (10) days advance written notice of the attendance of such
Ligand representatives. Ligand will specify whether Ligand will observe the
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Manufacturing, Packaging, or both. Such inspection may include inspection for
proper use and confidentiality of Ligand and Elan intellectual property. Any
information received or observed by Ligand representatives shall be treated in
accordance with the terms of the Confidentiality Agreement between the parties.
Ligand shall indemnify and hold harmless Cardinal Health for any action or
activity of such representatives while on Cardinal Health's premises.
ARTICLE 5
TESTING; SAMPLES; RELEASE
5.1 TESTING; ACCEPTANCE. Within twelve (12) business days after Cardinal
Health's completion of Manufacturing and Packaging of each Batch and not later
than 12 business days prior to the relevant Delivery Date, Cardinal Health shall
deliver to Ligand the MRR Documents for such Batch. No later than twelve (12)
business days after receipt of complete MRR Documents ("Review Period"), Ligand
shall review the MRR Documents and notify Cardinal Health if, in Ligand's
determination, such Batch (including its Manufacturing and Packaging) conforms
to the Specifications or if such Batch fails to conform to the Specifications.
If such Batch conforms to the Specifications, Ligand shall promptly, but in no
event later than the end of the Review Period, provide notice of acceptance of
the applicable Batch to Cardinal Health. If Ligand determines that such Batch
does not conform to Specifications, Ligand shall promptly, but in no event later
than the end of the Review Period, provide to Cardinal Health a notice of its
determination. If Cardinal Health agrees that the Batch is defective or
non-conforming, Cardinal Health will, at Ligand's option, either replace such
Batch in accordance with Section 5.3 below, or credit any payments made by
Ligand for such Batch. If Cardinal Health does not agree with Ligand's
determination such Batch fails to meet the Specifications, then after reasonable
efforts to resolve the disagreement, either party may submit a sample from the
Batch to an independent third party in accordance with Section 5.2 below. If
Ligand (i) notifies Cardinal Health that the Product meets the Specifications,
as provided above, or (ii) does not notify Cardinal Health that Product is
non-conforming prior to the end of the Review Period, then Product shall be
deemed to have been accepted by Ligand, and Cardinal Health shall invoice Ligand
for such Batch.
5.2 DISAGREEMENTS REGARDING PRODUCT CONFORMITY. In the event of a disagreement
between the parties as to whether the Product meets the Specifications, the
parties shall cause a mutually acceptable independent laboratory to review
records, test data and to perform the tests and/or analyses set forth in the
Specifications on samples of the alleged Defective Product. The independent
laboratory's results shall be final and binding. Unless otherwise agreed to by
the parties in writing, the costs associated with such testing and review shall
be borne by the party which was incorrect about whether the Product meets the
Specifications.
5.3 REPLACEMENT OF DEFECTIVE PRODUCT. In accordance with the terms set forth in
this Agreement, Cardinal Health shall replace, at its sole expense, all Product
that does not comply with the warranty in Section 10.1 ("Defective Product").
THE OBLIGATION OF CARDINAL HEALTH TO REPLACE DEFECTIVE PRODUCT OR CREDIT LIGAND
IN ACCORDANCE WITH SECTION 5.1 SHALL BE SUBJECT TO SECTION 16.1 AND SHALL BE
LIGAND'S SOLE AND EXCLUSIVE REMEDY (WITHOUT PREJUDICE TO ANY INDEMNIFICATION
OBLIGATIONS UNDER SECTION 13.1 OR THE OBLIGATIONS OF
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SECTION 9.5 (RECALL)) UNDER THIS AGREEMENT FOR DEFECTIVE PRODUCT AND IS IN LIEU
OF ANY OTHER WARRANTY, EXPRESS OR IMPLIED.
5.4 SUPPLY OF MATERIAL FOR DEFECTIVE PRODUCT. In the event Cardinal Health is
required to replace Product pursuant to Section 5.3, above, in no instance shall
Cardinal Health be liable for damages in excess of fees paid for Defective
Product and API, subject to the limitation of liability in Section 16.1 (without
prejudice to any indemnification obligations under section 13.1 or the
obligations of section 9.5 (Recall)).
ARTICLE 6
DELIVERY
6.1 DELIVERY. Cardinal Health shall segregate and store all Product until
acceptance as set forth in Section 5.1 above. Upon such acceptance, Cardinal
Health shall tender the Product for delivery and subsequent shipment, F.O.B. the
Packaging Facility. Ligand shall be responsible for all costs and risk of loss
associated with shipment of the Product. Ligand shall qualify at least one (1)
carrier to ship the Product to Cardinal Health.
6.2 FAILURE TO TAKE DELIVERY. If Ligand fails to provide for shipment of Product
within seven (7) business days after acceptance, Ligand shall be invoiced on the
first day of each month thereafter for reasonable administration and storage
costs. For each such Batch of accepted but unshipped Product, Ligand agrees
that: (i) Ligand has made a fixed commitment to purchase such Product, (ii)
title to such Product passes to Ligand, (iii) such Product shall be on a bill
and hold basis for legitimate business purposes, (iv) if no shipment date is
determined at the time of billing, Cardinal Health shall have the right to ship
the Product to Ligand or Ligand's designee within four months after billing, and
(v) Ligand will be responsible for any decrease in market value of such Product
that relates to factors and circumstances outside of Cardinal Health's control.
Within five (5) days following a notice of request from Cardinal Health, Ligand
shall provide Cardinal Health with a letter confirming items (i) through (v) of
this Section for each Batch of undelivered Product.
ARTICLE 7
PRICING AND PAYMENT
7.1 UNIT PRICING. Ligand shall pay to Cardinal Health the unit pricing set forth
on EXHIBIT D ("Unit Pricing") for all Product. In the event Ligand requests
services other than Manufacturing or Packaging of Product, Cardinal Health shall
provide a written quote of the fee for such additional services and Ligand shall
advise Cardinal Health whether it wishes to have such additional services
performed by Cardinal Health.
7.2 PRICE ADJUSTMENT. The Unit Pricing may be adjusted on an annual basis,
effective on each anniversary date of this Agreement, upon sixty (60) days prior
written notice from Cardinal Health to Ligand. Such adjustment shall be based on
actual increases or decreases in relevant labor and/or materials costs, subject
to the following limitations:
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The Unit Pricing for Product shall include only: (a) the cost of
excipients and packaging materials and (b) Cardinal's processing, i.e.
manufacturing, testing and packaging. Any price adjustment shall limit
the increase in component (b) to not more than the increase in the most
recent calendar year Producer Price Index, Industry: Pharmaceutical
Preparations, Series ID: PCU2834# (N), as published by the U.S.
Department of Labor, Bureau of Labor Statistics and available through
HTTP://DATA.BLS.GOV/CGI-BIN/SRGATE. Cardinal Health agrees to provide
back-up documentation of labor and/or materials costs for all annual
increases and such costs and related documentation shall be auditable
upon reasonable notice, by an independent third party reasonably
acceptable to Ligand and Cardinal.
7.3 TAXES; DUTY. All taxes, duties and other amounts assessed by government
authorities on the Product upon or after sale to Ligand are the responsibility
of Ligand, and Ligand shall reimburse Cardinal Health for any such taxes, duties
or other amounts paid by Cardinal Health.
7.4 PRODUCT APPROVAL. Notwithstanding the terms set forth above, Ligand and
Cardinal Health shall use their commercially reasonable efforts to expedite and
obtain all regulatory approvals necessary for Cardinal Health to commence
production at the Manufacturing Facility and the Packaging Facility ("Regulatory
Approvals"), and in the event such Regulatory Approvals have not been obtained
by Cardinal Health, through no fault of Cardinal Health, within thirty (30)
months following the Effective Date, provided that Cardinal Health installs and
qualifies the equipment required by Ligand within *** following the Effective
Date, then Ligand shall pay to Cardinal Health a monthly fee as provided in
EXHIBIT D ("Delayed Approval Fee") until such Regulatory Approvals have been
obtained and Cardinal Health is able to commence production.
7.5 PAYMENT TERMS. Cardinal Health shall invoice Ligand for all Product as
provided in Section 5.1, and payment for the undisputed portions of such
invoices shall be due within forty-five (45) days after the date of such
invoice. In the event payment is not received by Cardinal Health on or before
the forty-fifth (45th) day after the date of the invoice, then such unpaid
amount shall accrue interest each month at the rate of one percent (1%) per
month until paid in full.
ARTICLE 8
CHANGES TO SPECIFICATIONS
All Specifications and any changes thereto agreed to by the parties
from time to time shall be in writing, dated and signed by the parties. No
change in the Specifications shall be implemented by Cardinal Health, whether
requested by Ligand or requested or required by any Regulatory Authority, until
the parties have agreed in writing to such change, the implementation date of
such change, and any increase or decrease in costs, expenses or fees associated
with such change. Cardinal Health shall respond promptly to any request made by
Ligand for a change in the Specifications, and both parties shall use
commercially reasonable, good faith efforts to agree to the terms of such change
in a timely manner. If after initial Product qualification Ligand requires a
change in the Specifications for its own benefit or to comply with the
requirements of
***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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a Regulatory Authority, the Specifications shall be amended and as soon as
possible after a request is made for any change in Specifications, Cardinal
Health shall notify Ligand of the costs associated with such change and shall
provide such supporting documentation as Ligand may reasonably require. Ligand
shall pay all costs associated with such Ligand-requested or regulatory changes.
Agreed changes to the Specifications for the benefit of Cardinal shall be at the
expense of Cardinal. If there is a conflict between the terms of this Agreement
and the terms of the Specifications, this Agreement shall control.
ARTICLE 9
RECORDS; REGULATORY MATTERS
9.1 MRR DOCUMENTS AND DATA. Following the Manufacture and Packaging of each
Batch, and in accordance with section 5.1, Cardinal Health shall provide Ligand
with properly completed copies of all MRR Documents, including Manufacturing and
Packaging Batch records prepared in accordance with the Specifications.
9.2 RECORDKEEPING. Cardinal Health shall maintain true and accurate books,
records, test and laboratory data, reports and all other information relating to
Manufacturing and Packaging under this Agreement, including all information
required to be maintained by the Specifications and all Applicable Laws. Such
information shall be maintained in forms, notebooks and records for a period of
at least two (2) years from the relevant finished Product expiration date or
longer if required under Applicable Laws.
9.3 REGULATORY COMPLIANCE. Except as provided in the next sentence, Ligand shall
be solely responsible for all permits and licenses required by any regulatory
agency with respect to the Product and the Manufacturing and Packaging under
this Agreement, including any product licenses, applications and amendments in
connection therewith. Cardinal Health will be responsible to maintain all
permits and licenses required by any Regulatory Authority with respect to the
Manufacturing Facility, Packaging Facility and the equipment in such facilities.
During the Term, Cardinal Health will assist Ligand in its regulatory matters
relating to the Manufacturing and Packaging as described above, at Ligand's
request and at Ligand's expense. Each party intends and commits to cooperate to
satisfy all Applicable Laws with respect to Manufacturing and Packaging under
this Agreement.
9.4 GOVERNMENTAL INSPECTIONS AND REQUESTS. Cardinal Health shall immediately
advise Ligand if an authorized agent of any Regulatory Authority visits either
the Manufacturing Facility or the Packaging Facility if related to the
Manufacturing or Packaging of the Product. Cardinal Health shall furnish to
Ligand a copy of the report by such Regulatory Authority, if any, within ten
(10) days of Cardinal Health's receipt of such report. Further, upon receipt of
a Regulatory Authority request to inspect the Facilities or audit Cardinal
Health's books and records with respect to Manufacturing or Packaging under this
Agreement, Cardinal Health shall immediately notify Ligand, and shall provide
Ligand with a copy of any written document received from such Regulatory
Authority and Cardinal Health shall permit Ligand to have a representative
present for any such Facility inspection unless such presence would be
unreasonable under the circumstances. Absence of a Ligand representative shall
not impede any such inspection, provided Cardinal Health has complied with the
foregoing. To the extent
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related to Manufacturing or Packaging hereunder, Cardinal Health shall provide
to Ligand a copy of any proposed written response to any such inspection prior
to its submission and a reasonable opportunity for Ligand to review and approve
such response, provided that such approval shall not be unreasonably withheld.
9.5 RECALL. In the event Cardinal Health believes a recall, field alert, Product
withdrawal or field correction may be necessary with respect to any Product
provided under this Agreement, Cardinal Health shall immediately notify Ligand
in writing. Cardinal Health will not act to initiate a recall, field alert,
Product withdrawal or field correction without the express prior written
approval of Ligand, unless otherwise required by Applicable Laws. In the event
Ligand believes a recall, field alert, Product withdrawal or field correction
may be necessary with respect to any Product provided under this Agreement,
Ligand shall immediately notify Cardinal Health in writing and Cardinal Health
shall provide all necessary cooperation and assistance to Ligand. The cost of
any recall, field alert, Product withdrawal or field correction shall be borne
by Ligand except to the extent such recall, field alert, Product withdrawal or
field correction is caused by Cardinal Health's breach of its warranties,
representations or obligations under this Agreement or Applicable Laws or its
negligence or willful misconduct, then such cost shall be borne by Cardinal
Health. For purposes hereof, such cost shall be limited to reasonable, actual
and documented Administrative Costs incurred by Ligand for such recall,
withdrawal or correction, and replacement of the Defective Product to be
recalled, in accordance with Article 5. Ligand shall solely control the
implementation of any such recall, field alert, withdrawal or field correction.
9.6 QUALITY AGREEMENTS. Within six (6) months following the execution of this
Agreement, the parties shall execute a Quality Agreement in substantially the
form attached to this Agreement as EXHIBIT E. The Quality Agreement shall in no
way determine liability or financial responsibility of the parties for the
responsibilities set forth therein. In the event of a conflict between the terms
of this Agreement and the Quality Agreement, this Agreement shall control.
ARTICLE 10
REPRESENTATIONS AND WARRANTIES
10.1 LIMITED WARRANTY. Cardinal Health represents and warrants to Ligand that at
the time of delivery of the Product as provided in Section 6.1, such Product
will conform to and will have been Manufactured and Packaged in conformance with
the Product Specifications and Applicable Laws. THE LIMITED WARRANTY SET FORTH
IN THIS SECTION 10.1 IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING ANY WARRANTY OF MERCHANTABILITY, WARRANTY OF NON-INFRINGEMENT AND ANY
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. EXCEPT FOR THE WARRANTY EXPRESSED
IN THIS ARTICLE 10, CARDINAL HEALTH MAKES NO OTHER WARRANTY, EITHER EXPRESS OR
IMPLIED, WITH RESPECT TO THE MANUFACTURING, PACKAGING OR THE PRODUCT.
<PAGE>
10.2 RELEASE RESPONSIBILITY. The party responsible for release of the finished
Product warrants that it will not release any Batch of Product if the required
Certificates of Analysis indicate that the Product does not comply with the
Specifications.
10.3 ARTWORK. Ligand shall indemnify and hold harmless Cardinal Health from any
damages or costs caused by infringement of the artwork provided by Ligand to
Cardinal Health on any third party's intellectual property rights, including,
but not limited to, copyright, trademark or trade name or by failure of such
artwork to comply with all Applicable Laws, except to the extent that any of the
foregoing arises out of or results from the breach by Cardinal Health of its
representations, warranties or obligations under this Agreement, or the
negligence or willful misconduct of Cardinal Health.
10.4 INTELLECTUAL PROPERTY. Ligand represents and warrants to Cardinal Health
that Ligand has all necessary authority and right, title or interest in and to
any copyrights, trademarks, trade secrets, patents, inventions, know-how and
developments related to the Product ("Intellectual Property") which right, title
or interest is necessary to the manufacture thereof, and Ligand hereby grants to
Cardinal Health a non-exclusive, royalty-free license to use any and all of such
right, title and interest to the extent necessary for Cardinal Health to perform
its obligations under this Agreement. Cardinal Health shall use such
Intellectual Property, whether supplied by Ligand or a third party, solely for
the purpose of performing such obligations. In addition, Ligand shall indemnify
and hold harmless Cardinal Health against any damages or costs arising from the
violation or infringement upon any trademark, tradename, copyright, patent or
other rights held by any person or entity in the making of Product in accordance
with the Specifications, except to the extent that any of the foregoing arises
out of or results from the breach by Cardinal Health of its representations,
warranties or obligations under this Agreement, or the negligence or willful
misconduct of Cardinal Health. Cardinal Health shall not use any disclosure
hereunder of such Intellectual Property nor any confidential information of
Ligand or Elan to challenge the validity or enforceability of such Intellectual
Property.
10.5 EXISTENCE AND POWER. Each party hereby represents and warrants to the other
party that such party (i) is duly organized, validly existing and in good
standing under the laws of the state in which it is organized, (ii) has the
power and authority and the legal right to own and operate its property and
assets, and to carry on its business as it is now being conducted, and (iii) is
in compliance with all requirements of applicable law, except to the extent that
any noncompliance would not materially adversely affect such party's ability to
perform its obligations under the Agreement.
10.6 AUTHORIZATION AND ENFORCEMENT OF OBLIGATIONS. Each party hereby represents
and warrants to the other party that such party (i) has the power and authority
and the legal right to enter into this Agreement and to perform its obligations
hereunder and thereunder and (ii) has taken all necessary action on its part to
authorize the execution and delivery of the Agreement and the performance of its
obligations hereunder. The Agreement has been duly executed and delivered on
behalf of such party, and constitutes a legal, valid, binding obligation,
enforceable against such party in accordance with its terms.
<PAGE>
10.7 NO CONSENTS. Each party hereby represents and warrants to the other party
that all necessary consents, approvals and authorizations of all agencies and
other persons required to be obtained by such party in connection with the
Agreement have been obtained.
10.8 NO CONFLICT. Each party hereby represents and warrants to the other party
that the execution and delivery of this Agreement and the performance of such
party's obligations hereunder (i) do not conflict with or violate any
requirement of applicable laws or regulations or any material contractual
obligation of such party and (ii) do not materially conflict with, or constitute
a material default or require any consent under, any material contractual
obligation of such party.
ARTICLE 11
CONFIDENTIAL INFORMATION
11.1 The use and disclosure of confidential information exchanged between the
parties shall be governed by the Amended and Restated Confidentiality Agreement
by and among Ligand, Cardinal Health and Elan dated February 13, 2004.
ARTICLE 12
INTELLECTUAL PROPERTY
Subject to the foregoing Amended and Restated Confidentiality Agreement,
all Cardinal Health Information, including without limitation, all improvements,
developments, derivatives or modifications to the Cardinal Health Information,
shall be owned exclusively by Cardinal Health. All Ligand Information,
including, without limitation, all improvements, developments, derivatives or
modifications to the Ligand Information shall be owned exclusively by Ligand.
Ligand grants Cardinal Health a non-exclusive, royalty-free license for the term
of this Agreement to use Ligand Information, but solely for the purpose of
carrying out Cardinal Health's obligations hereunder. For purposes hereof,
"Cardinal Health Information" means all Cardinal Health proprietary information,
intellectual property, and developments (including, all patents, patent
applications, know-how, inventions, designs, concepts, improvements, technical
information, manuals, instructions or specifications), owned, licensed or used
by Cardinal Health in developing, formulating, manufacturing, filling,
processing or packaging of pharmaceuticals and the packaging equipment,
processes or methods of packaging, or any improvements to any of the foregoing,
including any container, pouch, vial, ampoule or other form of container
developed by Cardinal Health in each case prior to the date of this Agreement.
For purposes hereof, "Ligand Information" means all proprietary information,
intellectual property and developments owned, developed, licensed or used by
Ligand relating to the API, including, without limitation, patents, patent
applications, know-how, inventions, designs, concepts, improvements, technical
information, trademarks or trade names, developed by Ligand in each case prior
to the date of this Agreement. Ownership of intellectual property and
improvements related to the Product shall be governed exclusively by the Amended
and Restated Confidentiality Agreement.
<PAGE>
ARTICLE 13
INDEMNIFICATION
13.1 INDEMNIFICATION BY CARDINAL HEALTH. Cardinal Health shall indemnify and
hold harmless Ligand, its Affiliates, directors, officers, employees and agents
from and against any suits, claims, losses, demands, liabilities, damages, costs
and expenses (including costs, reasonable attorney's fees and reasonable
investigative costs) in connection with any suit, demand or action by any third
party arising out of or resulting from any negligence, willful misconduct or
breach of this Agreement by Cardinal Health, except to the extent that such
breach, negligence or willful misconduct arises out of or results from the
breach of its representations, warranties or obligations under this Agreement by
Ligand or the negligence or willful misconduct of Ligand.
13.2 INDEMNIFICATION BY LIGAND. Ligand shall indemnify and hold harmless
Cardinal Health, its Affiliates, directors, officers employees and agents from
and against all suits, claims, losses, demands, liabilities, damages, costs and
expenses (including costs, reasonable attorney's fees and reasonable
investigative costs) in connection with any suit, demand or action by any third
party arising out of or resulting from (a) any breach of its representations,
warranties or obligations set forth in this Agreement; (b) any manufacture by
Ligand, sale, promotion, distribution or use (other than by Cardinal Health) of
the Product, including, without limitation, product liability or strict
liability; (c) Ligand's exercise of control over the Manufacturing or Packaging
under this Agreement, to the extent that Ligand's instructions or directions
violate applicable law or regulation; (d) any actual or alleged infringement or
violation of any patent, trade secret, copyright, trademark or other proprietary
rights used by Cardinal Health in manufacturing Product; or (e) any negligence
or willful misconduct by Ligand, except to the extent that any of the foregoing
arises out of or results from the breach by Cardinal Health of its
representations, warranties or obligations under this Agreement, or the
negligence or willful misconduct of Cardinal Health.
13.3 INDEMNIFICATION PROCEDURES. All indemnification obligations in this
Agreement are conditioned upon the party seeking indemnification promptly
notifying the indemnifying party of any claim or liability of which the party
seeking indemnification becomes aware (including a copy of any related
complaint, summons, notice or other instrument), cooperating with the
indemnifying party in the defense of any such claim or liability (at the
indemnifying party's expense), and not compromising or settling any claim or
liability without prior written consent of the indemnifying party.
ARTICLE 14
INSURANCE
14.1 CARDINAL HEALTH. Cardinal Health shall, at its own cost and expense, obtain
and maintain in full force and effect the following insurance during the term of
this Agreement: (i) Umbrella/Commercial General Liability insurance with
per-occurrence and general aggregate limits of not less than $***; (ii) Products
and Completed Operations Liability Insurance with per-occurrence and general
aggregate limits of not less than $***; (iii) Workers' Compensation and
Employer's Liability Insurance with statutory limits for Workers' Compensation
and Employer's Liability insurance limits of not less than $***; (iv)
***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
Professional Services Errors & Omissions Liability Insurance with per claim and
aggregate limits of not less than $*** covering sums that Cardinal Health
becomes legally obligated to pay as damages resulting from claims made by Ligand
for errors or omissions committed in the conduct of the services outlined in the
Agreements. In lieu of insurance, Cardinal Health may self-insure any or a
portion of the above required insurance. In the event that any of the required
policies of insurance are written on a claims made basis, then such policies
shall be maintained during the entire term of this Agreement and for a period of
not less than three (3) years following the termination or expiration of this
Agreement. Cardinal Health shall obtain a waiver from any insurance carrier with
whom Cardinal Health carries Workers' Compensation insurance releasing its
subrogation rights against Ligand. Ligand shall be named as an additional
insured under the Commercial General Liability and Products and Completed
Operations Liability insurance policies as respects the manufacturing services
outlined in this Agreement. Cardinal Health shall furnish certificates of
insurance for all of the above noted policies and required additional insured
status to Ligand as soon as practicable after the Effective Date of the
Agreement and upon renewal of any such policies. Each insurance policy that is
required under this Section shall be obtained from an insurance carrier with an
A.M. Best rating of at least A- VII.
14.2 LIGAND INSURANCE. Ligand shall, at its own cost and expense, obtain and
maintain in full force and effect the following insurance or program of self
insurance (provided Ligand maintains a financial condition reasonably sufficient
to cover such commitments) during the term of this Agreement: (i) Products and
Completed Operations Liability Insurance with per-occurrence and general
aggregate limits of not less than $***; (ii) Workers' Compensation and
Employer's Liability Insurance with statutory limits for Workers' Compensation
and Employer's Liability insurance limits of not less than $***; (iii) All Risk
Property Insurance, including transit coverage, in an amount equal to full
replacement value covering Ligand's property while it is at Cardinal Health's
facility or in transit to or from Cardinal Health's facility. In the event that
any of the required policies of insurance are written on a claims made basis,
then such policies shall be maintained during the entire term of this Agreement
and for a period of not less than three (3) years following the termination or
expiration of this Agreement. Ligand shall obtain a waiver from any insurance
carrier with whom Ligand carries Workers' Compensation insurance releasing its
subrogation rights against Cardinal Health. Ligand shall obtain a waiver from
any insurance carrier with whom Ligand carries Property Insurance releasing its
subrogation rights against Cardinal Health. Ligand shall not seek reimbursement
for any property claim, or portion thereof, that is not fully recovered from
Ligand's Property Insurance policy. Cardinal Health and its Subsidiaries and
Parent Corporation shall be named as additional insureds under the Products and
Completed Operations Liability insurance policies as respects the products and
completed operations outlined in this Agreement. Ligand shall furnish
certificates of insurance for any policies obtained hereunder and required
additional insured status to Cardinal Health as soon as practicable after the
Effective Date of the Agreement and upon renewal of any such policies. Any
insurance policy that is that is obtained in satisfaction of this Section shall
be obtained from an insurance carrier with an A.M. Best rating of at least A-
VII.
***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
ARTICLE 15
TERM AND TERMINATION
15.1 TERM. This Agreement shall commence on the Effective Date and shall
continue for a period of five Contract Years, unless earlier terminated under
Section 15.2 below (the "Term"). This Agreement may be extended for an
additional term of two years at Ligand's option, upon notice to Cardinal Health
not later than 180 days prior to the end the of the Term.
15.2 TERMINATION BY EITHER PARTY.
(a) MATERIAL BREACH. Either party may terminate this Agreement effective
upon sixty (60) days prior written notice to the other party, if the other party
commits a material breach of this Agreement and fails to cure such breach by the
end of such sixty (60) day period.
(b) BANKRUPTCY. Either party may terminate this Agreement effective upon
written notice to the other party, if the other party becomes insolvent or is
unable to pay its debts as they become due, files a petition for bankruptcy,
makes an assignment for the benefit of its creditors or has a receiver, trustee
or other court officer appointed for its properties or assets.
(c) NO APPROVAL. Ligand shall have the option of terminating this Agreement
effective upon written notice to Cardinal Health if for any reason the
Manufacturing Facility does not receive necessary Regulatory Approvals within 30
months after the Effective Date.
15.3 FORCE MAJEURE. Except as to payments required under this Agreement, if any
default or delay occurs which prevents or materially impairs a party's
performance and is due to a cause beyond the party's reasonable control, and
provided that the default or delay is not caused by or the fault of such party,
including but not limited to an act of God, flood, fire, explosion, earthquake,
casualty, accident, war, revolution, civil commotion, blockade or embargo,
injunction, law, proclamation, order, regulation or governmental demand, the
affected party shall promptly notify the party in writing of such cause and
shall exercise diligent efforts to resume performance under this Agreement as
soon as possible. Neither party will be liable to the other party for any loss
or damage due to such cause, and the Term will not be extended thereby. Neither
party may terminate this Agreement because of such default or delay except upon
thirty (30) days prior written notice to the other party if the default or delay
has existed for five (5) months and is continuing at the end of the thirty (30)
day notice period.
15.4 EFFECT OF TERMINATION. Expiration or termination of this Agreement shall be
without prejudice to any rights or obligations that accrued to the benefit of
either party prior to such expiration or termination. The rights and obligations
of the parties shall continue under Articles 5, 7, 9, 10, 11, 12, 13, 16, 17 and
18, and Sections 3.5, 6.2, 15.4, notwithstanding expiration or termination of
this Agreement.
<PAGE>
ARTICLE 16
LIMITATIONS OF LIABILITY
16.1 CARDINAL HEALTH'S TOTAL LIABILITY UNDER THIS AGREEMENT SHALL IN NO EVENT
EXCEED THE GREATER OF (A) TOTAL FEES PAID BY LIGAND TO CARDINAL HEALTH HEREUNDER
DURING THE *** MONTHS PRIOR TO THE EVENT(S) GIVING RISE TO THE LIABILITY OR (B)
$*** MILLION.
16.2 EXCEPT AS PROVIDED IN ARTICLES 5, 9 AND 13, NEITHER PARTY SHALL BE LIABLE
TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT
OF PERFORMANCE UNDER THIS AGREEMENT.
ARTICLE 17
NOTICE
Any notice from either party to the other party will be effective upon
receipt and must be personally delivered to such party or sent to such party by
deposit in the United States mail, first class, postage prepaid, overnight
courier or telecopy transmission (with written confirmation copy to follow via
United States mail), to the address for such party below or such other address
as a party may designate from time to time in accordance with this Section:
To Ligand: Ligand Pharmaceuticals Incorporated
10275 Science Center Drive
San Diego, CA 92104
ATTN: Supply Operations
Fax: 858.550.1801
With a copy to: Ligand Pharmaceuticals Incorporated
10275 Science Center Drive
San Diego, CA 92104
ATTN: General Counsel
Fax: 858.550.1825
To Cardinal Health: Cardinal Health PTS, Inc.
14 Schoolhouse Road
Somerset, NJ 08873
Attn: Vice President, Business Development
Solid Oral Pharmaceuticals
Facsimile: (732) 537-6493
With a copy to: Cardinal Health, Inc.
7000 Cardinal Health Place
Dublin, Ohio 43017
Attn: Associate General Counsel
***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
Pharmaceutical Technologies and Services
Facsimile: (614) 757-5051
ARTICLE 18
MISCELLANEOUS
18.1 ENTIRE AGREEMENT; AMENDMENTS. This Agreement is the entire understanding
between the parties and supersedes any contracts, agreements or understanding
(oral or written) of the parties with respect to the subject matter hereof. No
term of this Agreement may be amended except upon written agreement of both
parties, unless otherwise provided in this Agreement.
18.2 CAPTIONS. The captions in this Agreement are for convenience only and are
not to be interpreted or construed as a substantive part of this Agreement
18.3 FURTHER ASSURANCES. The parties agree to execute, acknowledge and deliver
such further instruments and of all such other incidental acts as may be
reasonably necessary or appropriate to carry out the purpose and intent of this
Agreement.
18.4 NO WAIVER. Failure by either party to insist upon strict compliance with
any term of this Agreement in one (1) or more instances will not be deemed to be
a waiver of its rights to insist upon such strict compliance with respect to any
subsequent failure.
18.5 SEVERABILITY. If a court or other body of competent jurisdiction declares
any term of this Agreement invalid or unenforceable, the remaining terms of this
Agreement will continue in full force and effect.
18.6 INDEPENDENT CONTRACTORS. The relationship of the parties is that of
independent contractors, and neither party will incur any debts or make any
commitments for the other party except to the extent expressly provided in this
Agreement. Nothing in this Agreement is intended to create or will be construed
as creating between the parties the relationship of joint ventures, co-partners,
employer/employee or principal and agent.
18.7 SUCCESSORS AND ASSIGNS. This Agreement will be binding upon and inure to
the benefit of the parties, their successors and permitted assigns. Neither
party may assign this Agreement, in whole or in part, without the prior written
consent of the other party, except that either party may without the other
party's consent assign this Agreement to an Affiliate or to a successor to
substantially all of the business or assets of the assigning company.
18.8 GOVERNING LAW. This Agreement shall be governed by and construed under the
laws of the State of New York, excluding its conflicts of law provisions.
18.9 ALTERNATIVE DISPUTE RESOLUTION. If a dispute, controversy or disagreement
("Dispute") arises between the parties in connection with this Agreement, then
the Dispute shall be presented to the respective presidents or Senior Executives
of Cardinal Health and Ligand for their consideration and resolution. If such
parties cannot reach a resolution of the Dispute, then such
<PAGE>
Dispute shall be resolved by binding Alternative Dispute Resolution in
accordance with the then existing commercial arbitration rules of The CPR
Institute for Dispute Resolution ("CPR"), 366 Madison Avenue, New York, NY
10017. Arbitration shall be conducted in the jurisdiction of the defendant
party.
18.10 PREVAILING PARTY. In any dispute resolution proceeding between the parties
in connection with this Agreement, the prevailing party will be entitled to its
reasonable attorney's fees and costs in such proceeding.
18.11 COUNTERPARTS. This Agreement may be executed in one (1) or more
counterparts, each of which will be deemed an original but all of which together
will constitute one (1) and the same instrument.
18.12 PUBLIC ANNOUNCEMENTS. Neither party will make any press release or other
public disclosure regarding this Agreement or the transactions contemplated
hereby without the other party's express prior written consent, except as
required under applicable law or regulation, including SEC regulation, or by any
governmental agency, in which case the party required to make the press release
or public disclosure shall use commercially reasonable efforts to obtain the
approval of the other party as to the form, nature and extent of the press
release or public disclosure prior to issuing the press release or making the
public disclosure.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representative to execute this Agreement effective as of the date first written
above.
CARDINAL HEALTH PTS, LLC. LIGAND
By: /S/ THOMAS J. STUART By: /S/ GIAN ALIPRANDI
-------------------------------- ------------------------------
Name: THOMAS J. STUART Name: GIAN ALIPRANDI
------------------------------- ------------------------------
Its: PRESIDENT - MODIFIED RELEASE TECH. Its: SR VP TECH, SUPPLY
---------------------------------- ------------------------------
& INTL OPERATIONS
------------------------------
<PAGE>
EXHIBIT A
MANUFACTURING SPECIFICATIONS
***
***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT B
PACKAGING SPECIFICATIONS
***
***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT C
ADDITIONAL SERVICES
***
***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT D
UNIT PRICING, FEES AND MINIMUM REQUIREMENT
***
***Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT E
FORM OF QUALITY AGREEMENT
<PAGE>
DRUG PRODUCT MANUFACTURER LIGAND PHARMACEUTICALS INCORPORATED
Contractor/Quality Manual for Drug Product
Revision Date Section Number
February 2004 Table of Contents
1.0 INTRODUCTION
1.1 General
1.2 Purpose of Manual
1.3 Contractor/Quality Manual Change Procedure
1.4 Communication
2.0 ROLES AND RESPONSIBILITIES
2.1 DRUG PRODUCT MANUFACTURER
2.2 Ligand
3.0 COMPANY INFORMATION
3.1 DRUG PRODUCT MANUFACTURER
3.2 Ligand
3.3 Active Pharmaceutical Ingredient Manufacturer
3.4 Drug Product Packager
3.5 Warehouse/Distributor
4.0 MANUFACTURING REQUIREMENTS
4.1 Compliance
4.2 Master Batch Record (MBR) (Manufacturing and Packaging Log Sheets
4.3 Product Formulation
4.5 Manufacturing Process Summary
4.6 Reports
4.7 Records Retention
4.8 Technical Support
4.9 Reprocessing
4.10 Reconciliation
4.11 Product Specifications
4.12 Storage Conditions Bulk API
4.13 Storage Conditions for Drug Product
4.14 Packaging
4.15 Labeling
4.16 Label Destruction
4.17 Lot Numbering and Expiration Dating
<PAGE>
DRUG PRODUCT MANUFACTURER LIGAND PHARMACEUTICALS INCORPORATED
Contractor/Quality Manual for Drug Product
Revision Date Section Number
February 2004 Table of Contents
5.0 QUALITY ASSURANCE REQUIREMENTS
5.1 Document Review
5.2 Product Release and Procedures
5.3 Change Control
5.4 Process Deviations
5.5 Out-of-Specification/Out-of Trend Results
5.6 Complaint Evaluation
5.7 Audits
5.8 Validation
5.9 Reference Standards
5.10 Retain (Reserve) Samples
5.11 Stability Samples and Stability Program
5.12 AQL Requirements
5.13 Product Surveillance
5.14 Product Recall
5.15 Alcohol, Tobacco and Firearms
5.16 DEA
6.0 SPECIFICATION AND METHODS
6.1 Active Pharmaceutical Ingredient
6.2 Excipients
6.3 Drug Products
6.4 Packaging Components (bulk and finished product)
6.5 Issuance and Control of Methods and Specifications
6.6 Method Validation Reports
<PAGE>
DRUG PRODUCT MANUFACTURER LIGAND PHARMACEUTICALS INCORPORATED
Contractor/Quality Manual for Drug Product
Revision Date Section Number
February 2004 Table of Contents
Appendix A
FORMS
1. Contractor Documentation Update
2. Ligand Product Disposition Form
3. Inventory on Hand Request Form
4. Inventory Shipping Form
5. Shipment Receipt Acknowledgement Form
Appendix B
SOPs
1. Issuance and Maintenance of Contractor Manuals, 880-QA-DOC-17 (effect
10/30/97)
2. Numbering System for Lots of Active Pharmaceutical Ingredients and Drug
Products Intended for Commercial Use, 900-MAT-OPR-1 (effective 5/28/98)
3. Part Numbering System for Raw Materials, Intermediates, Drug Substance and
Finished Drug Product Intended for Commercial Use, 900-MAT-OPR-2
(effective 8/28/97)
4. Handling of Out-of-Specification or Unusual Data, 865-AD-OPR-13 (effective
date 12/4/97)
5. Documentation of Deviations, 880-QA-DOC-9 (effective 8/14/98) 6. Waste
Disposal SOP (Contractor Supplied)
Appendix C
MANUFACTURING
Appendix D
PACKAGING
<PAGE>
DRUG PRODUCT MANUFACTURER LIGAND PHARMACEUTICALS INCORPORATED
Contractor/Quality Manual for Drug Product
Revision Date Section Number
February 2004 Table of Contents
Appendix E
SPECIFICATIONS
1. Active Pharmaceutical Ingredient
2. RAW MATERIALS (CONTRACTOR SUPPLIED)
a. Ingredient A
b. Ingredient B
c. Ingredient C
d. Ingredient D
e. Ingredient E
3. Inprocess and bulk products
4. Finished Product
5. PACKAGING COMPONENTS
a. Bottle
b. Cap
c. Insert
d. Label
e. Shipper
Appendix F
APPROVED VENDOR LIST
<PAGE>
DRUG PRODUCT MANUFACTURER LIGAND PHARMACEUTICALS INCORPORATED
Contractor/Quality Manual for Drug Product
Revision Date Section Number
February 2004 Table of Contents
Appendix G
METHODS
1. GENERAL METHODS (GM)
2. SPECIFIC METHODS (SM) AND CORRESPONDING VALIDATION REPORT
<PAGE>
DRUG PRODUCT MANUFACTURER LIGAND PHARMACEUTICALS INCORPORATED
Contractor/Quality Manual for Drug Product
Revision Date Section Number
February 2004 Table of Contents
3. MICROBIOLOGICAL TEST (USP) (CONTRACTOR SUPPLIED)
Appendix H
MATERIAL SAFETY DATA SHEETS (MSDS)
1. Active Pharmaceutical Ingredient
2. Drug Product
Appendix I