printer-friendly

Sample Business Contracts

Supply Agreement - Siegfried (USA) Inc. and Celgene Corp.

Sponsored Links

                                SUPPLY AGREEMENT

         THIS AGREEMENT (the "Agreement"), entered into as of this first (1st)
day of January, 2003 (the "Effective Date"), by and between SIEGFRIED (USA),
Inc. ("SIEGFRIED"), a corporation organized under the laws of Delaware with a
place of business at 33 Industrial Park Road, Pennsville, NJ, 08070 and Celgene
Corporation ("CELGENE"), a corporation organized under the laws of Delaware with
a place of business at 7 Powder Horn Drive, Warren, NJ 07059.

                              W I T N E S S E T H:

         WHEREAS, SIEGFRIED desires to manufacture and supply to CELGENE a
certain pharmaceutical Product, as further described in Exhibit "A"; and

         WHEREAS, SIEGFRIED is willing to sell to CELGENE, and CELGENE is
willing to purchase from SIEGFRIED, Product manufactured by SIEGFRIED in
accordance with the terms set forth herein,

         NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:

                                    ARTICLE I
                                   DEFINITIONS
                                   -----------

1.01 As used in this Agreement, the following terms shall have the meanings set
forth below:

     (a) "Product" shall mean the pharmaceutical active ingredient known as
         d-threo-Methylphenidate Hydrochloride, having the molecular formula
         C14H19NO2o HCl.

     (b) "Specifications" shall mean the specifications and quality control
         procedures for the Product as set forth in Exhibit A.

     (c) "cGMP" shall mean current Good Manufacturing Practices for the methods
         to be used in, and the facilities and controls to be used for, the
         manufacture, processing, packing and holding of drug active
         ingredients, as promulgated by the FDA (e.g., 21 C.F.R. ss.ss.210 and
         211), including all amendments and supplements thereto during the term
         of this Agreement.

     (d) "Certificate of Analysis" shall mean the certificate for each batch of
         bulk Product manufactured by SIEGFRIED and delivered to CELGENE
         hereunder.

     (e) "FDA" shall mean the United States Food and Drug Administration, or any
         successor entity having jurisdiction over the transactions contemplated
         by this Agreement.

     (f) "Act" shall mean the United States Food, Drug, and Cosmetic Act, 21
         U.S.C. ss.ss.301-397, as amended, and rules and regulations promulgated
         there under.
<PAGE>


     (g) "Confidential Information" shall mean any scientific, clinical,
         regulatory, marketing, financial or commercial information or data
         relating to the Product or its use, and which is not generally known to
         the public, disclosed by one party to the other party, or developed by
         or on behalf of a party in performance of its obligations under this
         Agreement. Confidential Information shall include, without limitation,
         information relating to the Product, the Specifications, manufacturing
         processes for the Product and associated documentation such as Batch
         Records, analytical methods, formulations, marketing and sales plans,
         forecasts, financial information, costs and pricing information.

     (h) "Manufacturing Batch Record" shall mean documentation of the
         manufacturing, process, packing, and holding of specific lot of drug
         active ingredient.

     (i) "Affiliate" of any person shall mean any person in control of,
         controlled by, or under common control with, such person, and "person"
         shall mean any individual or entity of any nature whatsoever.

                                   ARTICLE II
                              MANUFACTURE AND SALE
                              --------------------

2.01 Supply. During the term of this Agreement and subject to the terms and
conditions set forth herein, SIEGFRIED shall exclusively manufacture and supply
to CELGENE and CELGENE shall purchase a minimum of Fifty Percent (50%) of its
annual requirements of the Product from SIEGFRIED.

2.02 Quality of Product. SIEGFRIED shall manufacture the Product in accordance
with the Specifications, and in compliance with cGMPs and all applicable
material laws, rules and regulations relating to the manufacture of the Product
and the terms and conditions of the Quality Agreement (see Exhibit C). The
Product shall not be adulterated or misbranded when SIEGFRIED delivers the
Product to the carrier pursuant to Section 5.01, and shall be sold to CELGENE
free and clear of any liens, claims or encumbrances created by SIEGFRIED.

2.03 Certificate of Analysis. SIEGFRIED shall provide with each shipment of
Product delivered to CELGENE hereunder a Certificate of Analysis (COA) that
includes the results of quality control testing in accordance with the
Specifications and which indicates that the Product contained in the shipment
meets all of the Specifications. SIEGFRIED shall also provide to CELGENE the
current Material Safety Data Sheet (MSDS) for the Product provided to CELGENE
hereunder.
<PAGE>


2.04 Compliance.

     (a) SIEGFRIED shall at all times during the term of this Agreement maintain
         its facilities used for the manufacture of Product in compliance with
         all applicable material laws, rules and regulations, including, without
         limitation, cGMPs and any applicable environmental, health and/or
         safety laws. SIEGFRIED shall be responsible for all costs and expenses
         related to the compliance of such facilities with such laws, rules and
         regulations.

     (b) Except as otherwise expressly set forth herein, SIEGFRIED shall be
         responsible for obtaining and maintaining any permits or approvals from
         regulatory authorities and any other government authorities which are
         required in connection with the performance of its obligations
         hereunder. SIEGFRIED shall be responsible for all process, analytical
         method and equipment validation and shall take all necessary steps for
         its facilities used for the manufacture of Product to pass government
         inspection by the FDA.

     (c) SIEGFRIED shall permit representatives of CELGENE and/or its licensees
         and/or its contract manufacturers to visit the facilities where the
         Product is manufactured for the purpose of observing the manufacturing,
         testing and storage of Product and for conducting compliance audits
         associated with cGMPs and other regulatory requirements. CELGENE agrees
         to give SIEGFRIED reasonable notice of any proposed visit to a Product
         facility by such representatives. CELGENE's representatives will adhere
         to SIEGFRIED's policies and procedures while on site. Any such visits
         shall be during normal business hours on workdays and be subject to the
         Confidential Disclosure Agreement. In addition, SIEGFRIED shall permit
         governmental inspectors acting pursuant to statutory authority to
         inspect the facilities where the Product is being manufactured, and to
         review required documentation.

     (d) CELGENE may conduct a cGMP audit of SIEGFRIED's manufacturing
         operations, storage facilities for the Product, and any SIEGFRIED
         Quality Control laboratory at which Product testing is to be performed,
         including SIEGFRIED's relevant records (or the corresponding facilities
         and records of any of SIEGFRIED's sub-contractors). SIEGFRIED will make
         best efforts to discuss, understand and incorporate CELGENE and/or its
         collaborators' comments into its cGMP operating protocol. Any of
         SIEGFRIED's confidential information to which CELGENE, and/or its
         collaborator's, is provided access during any such audit process shall
         be maintained as confidential in accordance with the provisions of
         Article VIII and the Confidential Disclosure Agreement referred to in
         paragraph 2.04(c).

2.05 Specifications. CELGENE shall deliver to SIEGFRIED written notice of any
required changes to the Specifications, and SIEGFRIED will make its best efforts
to accommodate such Specification changes. If any Specification change requested
by CELGENE materially affects SIEGFRIED's costs of producing the Product, the
parties will negotiate, in good faith, an adjustment to the pricing set forth in
Section 4.01. CELGENE shall have the right to revise the Specifications at any
time upon thirty (30) days written notice to SIEGFRIED for the purpose of
<PAGE>


complying with cGMPs or applicable NDAs or other health registrations, or for
any other reasonable business purpose. Any changes to the Specifications shall
be incorporated in this Agreement as a written amendment to Exhibit A.

2.06 Product Release. SIEGFRIED and CELGENE agree to jointly establish a release
procedure for Product manufactured by SIEGFRIED. Without limiting the generality
of the foregoing, SIEGFRIED shall perform quality assurance and control tests on
each lot of Product manufactured before delivery and shall prepare and deliver
to CELGENE a written report of the results of such tests, with each report
setting forth for each lot delivered the items tested, specifications and
results in a Certificate of Analysis containing the types of information
required by applicable regulatory standards. In addition, SIEGFRIED shall
provide CELGENE for review copies of Batch Records for each lot of Product
manufactured by SIEGFRIED.

2.07 Manufacturing Changes. SIEGFRIED shall notify CELGENE promptly in writing
of any changes in manufacturing that may be required by cGMPs or other
applicable laws, rules or regulations. No changes will be made without prior
authorization from CELGENE. Such authorization will not be unreasonably
withheld.

2.08 Retention of Samples. SIEGFRIED shall retain sufficient quantity of each
batch of Product to perform at least two (2) full sets of quality control tests
(in addition to the testing performed by SIEGFRIED prior to delivery). SIEGFRIED
shall maintain such samples in a suitable storage facility for a period of two
(2) years or such longer period as may be required under applicable laws, rules
or regulations.

                                   ARTICLE III
                                      TERM
                                      ----

3.01 Term. The term of this Agreement shall commence on the Effective Date and
shall terminate five (5) years from the Effective Date (the "Initial Term"), and
is not subject to earlier cancellation by either party except as otherwise
specifically provided herein.

3.02 Renewal Term. The Agreement shall automatically renew after the Initial
Term and continue in effect for one-year periods (each such period being a
"Renewal Term").

3.03 Cancellation. Should CELGENE or SIEGFRIED desire to cancel the Agreement at
the end of the Initial Term or at the end of any Renewal Term, then CELGENE or
SIEGFRIED must provide written notice of cancellation twelve (12) months prior
to the termination date of the Initial Term or the relevant Renewal Term, as the
case may be. Notwithstanding the foregoing, the Agreement shall terminate on the
tenth (10) of June 2005 in the event that Celgene or its successor is no longer
supplying Product to Novartis Pharmaceutical Corporation, or its affiliates,
licenses, successors or assigns.
<PAGE>


                                   ARTICLE IV
                       PRICE, ORDERS, AND TERMS OF PAYMENT
                       -----------------------------------

4.01 Price. The prices of the Product will be determined in the manner set forth
in Exhibit B to this Agreement. The prices will be subject to adjustment in the
manner set forth in Exhibit B to this Agreement.

4.02 Projections. CELGENE shall issue at quarterly intervals a twelve (12) month
forecast estimating its total requirements of Product from SIEGFRIED. SIEGFRIED
will use these forecasts for planning purposes only, unless and until such time
as CELGENE issues a firm purchase order for delivery of Product. If during any
quarter, the quantity set forth in firm purchase orders requested by CELGENE
exceeds the most recent forecast provided for such quarter by more than thirty
percent (30%), SIEGFRIED shall use its commercially reasonable efforts to
accommodate the excess quantity of Product which CELGENE shall request under
such purchase orders.

4.03 Purchase Orders. CELGENE shall submit firm purchase orders for quantities
of Product desired to SIEGFRIED at its address designated in Section 11.05
hereof. Such purchase orders shall set forth the quantities of Product to be
purchased, the delivery dates and shipping instructions and place of delivery,
and shall allow maximum six (6) months for delivery. SIEGFRIED shall have ten
(10) business days to accept the purchase order, which shall become firm upon
acceptance. In the event SIEGFRIED cannot meet the quantity or dates specified,
it shall notify CELGENE, and the parties shall in good faith negotiate a
mutually satisfactory schedule, at which point such negotiated schedule shall
become part of the firm purchase order. Each purchase order issued hereunder
shall be governed by the terms of this Agreement, and none of the terms or
conditions of CELGENE's or SIEGFRIED's forms shall be applicable, except for
those specifying quantity ordered, delivery dates, special supply and packing
instructions, and invoice instruction.

4.04 Payment Terms. SIEGFRIED shall invoice CELGENE when analytical testing
release against Specification, and satisfactory Manufacturing Batch Record
review have completed, and net payment for the Product shall be due to SIEGFRIED
not later than forty-five (45) days from the date of invoice of Product by
SIEGFRIED. All payments and communications regarding the Product shall be
delivered to SIEGFRIED at the address designated in Section 11.05 hereof. If
Product is damaged or destroyed prior to delivery to a common carrier specified
by CELGENE, CELGENE shall be entitled to reimbursement from SIEGFRIED for any
amounts paid to SIEGFRIED in respect of such Product.

4.05 Cover. If SIEGFRIED fails to timely deliver to CELGENE the quantity of
Product that CELGENE orders under any firm purchase order pursuant to Section
4.03, then after providing written notice to SIEGFRIED and the failure of
SIEGFRIED to cure within ten (10) business days, such purchase order shall be
deemed to be cancelled to the extent of the quantity of Product SIEGFRIED failed
to deliver, CELGENE may purchase Product from another manufacturer in
substitution for the quantity of Product SIEGFRIED failed to deliver and such
quantity shall be deemed to have been purchased from SIEGFRIED for purposes of
<PAGE>


satisfying the requirements of Section 2.01 hereof relating to 50% of CELGENE's
annual requirements. Provided such quantity that SIEGFRIED has failed to deliver
does not, together with other quantities of Product ordered during such quarter,
does not exceed the most recent forecast provided by CELGENE with respect to
such quarter by more than thirty percent (30%), SIEGFRIED shall reimburse
CELGENE upon receipt by SIEGFRIED of receipts or other suitable substantiation
for the difference between the cost of obtaining such Product from another
manufacturer (plus reasonable charges, expenses or commissions incurred by
CELGENE in connection therewith), less the price that would have been due to
SIEGFRIED for the like quantity, had it been supplied by SIEGFRIED hereunder.

                                    ARTICLE V
                      DELIVERY, TITLE, LABEL AND PACKAGING
                      ------------------------------------

5.01 Terms of Delivery. The Product shall be shipped EXWORKS (Incoterms 2000)
from SIEGFRIED's facility in Pennsville, New Jersey to a destination designated
by CELGENE using a common carrier to be specified by CELGENE and reasonably
acceptable to SIEGFRIED. Title and risk of loss shall pass to CELGENE at the
time of delivery to the carrier.

5.02 Inspection. CELGENE may, at its expense, inspect and test each shipment of
the Product delivered by SIEGFRIED under this Agreement. For a period of thirty
(30) days after receipt of each shipment of Product and Manufacturing Batch
Record hereunder, CELGENE shall have the right to return such shipment to
SIEGFRIED if CELGENE determines that the Product does not conform to the
Specifications, or thirty (30) business days from the receipt of the
Manufacturing Batch Record for failure to comply with cGMP, whichever is later.
SIEGFRIED shall provide CELGENE with accurate copies of each Manufacturing Batch
Record . Product will be deemed accepted by CELGENE upon final release by
CELGENE's Quality Assurance Department , no later than sixty (60) days after
receipt of the Product sold hereunder; provided, however, in the case of Product
having latent defects, which upon diligent examination in accordance with the
quality control testing procedures set out in the Specifications upon receipt
could not have been discovered. In such event CELGENE shall provide written
notice to SIEGFRIED prior to the expiration of such thirty (30) day period,
setting forth the details of such non-conformity. Any non-conforming product
returned to SIEGFRIED shall be at SIEGFRIED's expense and shall be returned by
CELGENE in the manner specified by SIEGFRIED. SIEGFRIED shall, at its expense
and discretion, either replace the batch of non-conforming Product within sixty
(60) days after SIEGFRIED receives the above mentioned written notice, or refund
or credit the pro-rata portion of the amount due SIEGFRIED under Section 4.01
within such sixty (60) day period. Disputes between the parties as to whether
all or any part of a shipment rejected by CELGENE conforms to the Specifications
shall be resolved by a mutually acceptable third party testing laboratory within
thirty (30) days after SIEGFRIED advises CELGENE that it disputes the asserted
non-conformity. SIEGFRIED shall pay all expenses of third party testing if
Product does not conform to the Product Specifications according to such third
<PAGE>


party and CELGENE shall pay all expenses of third party if Product does conform
to the Product Specifications according to such third party.

5.03 Label and Packaging. SIEGFRIED shall label and package Product in
accordance with the Specifications as defined in Exhibit A. The label and
packaging specifications may be modified from time to time by mutual agreement
of the parties. Additionally, CELGENE shall have the right to revise the label
and package specifications at any time upon thirty (30) days written notice to
SIEGFRIED for the purpose of complying with any FDA or other regulatory
requirement at its own cost and expense. SIEGFRIED shall not have any right,
title or interest in the Focalin(R) trademark, tradedress or any other trade
name or trademark under which Product is resold by CELGENE. Notwithstanding the
foregoing, CELGENE grants to SIEGFRIED an irrevocable license for the term of
this Agreement to use all the patents, trademarks and tradedress required for
SIEGFRIED to fulfill the terms of this Agreement.

                                   ARTICLE VI
                      WARRANTIES, INDEMNITIES AND INSURANCE
                      -------------------------------------

6.01 Warranties by SIEGFRIED. SIEGFRIED warrants that Product when delivered to
the common carrier hereunder will comply with the Specifications and will not,
at the time of delivery, be adulterated or misbranded within the meaning of the
Federal Food, Drug and Cosmetic Act as a result of operations performed or
omitted from performance by SIEGFRIED and that all Product will be manufactured
pursuant to current good manufacturing practices required by the FDA and in
accordance with all applicable laws and regulations. EXCEPT AS EXPRESSLY
WARRANTED HEREIN, SIEGFRIED MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, AND
SIEGFRIED EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING THE WARRANTY OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. SIEGFRIED'S LIABILITY
UNDER THIS WARRANTY SHALL BE LIMITED SOLELY TO THE REMEDY PROVIDED IN ARTICLE VI
HEREOF, EXCEPT AS PROVIDED FOR UNDER SECTION 6.05 REGARDING SIEGFRIED'S
INDEMNIFICATION OBLIGATIONS FOR THIRD PARTY CLAIMS. IN NO EVENT SHALL EITHER
PARTY BE LIABLE FOR LOSS OF PROFITS, DIRECT, INDIRECT, INCIDENTAL, SPECIAL,
CONSEQUENTIAL OR OTHER DAMAGES UNDER THIS AGREEMENT OR FROM ANY CAUSE
WHATSOEVER, EXCEPT AS PROVIDED FOR UNDER SECTION 6.05 REGARDING SIEGFRIED'S
INDEMNIFICATION OBLIGATIONS FOR THIRD PARTY CLAIMS. Any statement to the
contrary made by an employee of the SIEGFRIED or CELGENE shall have no force or
effect, and the terms herein shall control.

6.02 Warranties by CELGENE. CELGENE warrants that it has all the intellectual
property rights necessary or appropriate to enter into this Agreement.

6.03 Warranties by Each Party. Each of CELGENE and SIEGFRIED hereby represents,
warrants and covenants to the other party as follows:
<PAGE>


     (a) it is a corporation duly organized and validly existing under the laws
         of the state or other jurisdiction in which it is incorporated;

     (b) the execution, delivery and performance of this Agreement by such party
         has been duly authorized by all requisite corporate action;

     (c) it has the power and authority to execute and deliver this Agreement
         and to perform its obligations hereunder;

     (d) the execution, delivery and performance by such party of this Agreement
         and its compliance with the terms hereof does not and will not conflict
         with or result in a breach of any term of, or constitute a default
         under (i) any agreement or instrument binding or affecting it or its
         property; (ii) its charter documents or bylaws; or (iii) any order,
         writ, injunction or decree of any court or governmental authority
         entered against it or by which any of its property is bound;

     (e) it has obtained any consent, approval or authorization of, or notice,
         declaration, filing or registration with, any governmental or
         Regulatory Authority required for the execution, delivery and
         performance of this Agreement by such party, and the execution,
         delivery and performance of this Agreement will not violate any law,
         rule or regulation applicable to such party;

     (f) this Agreement has been duly executed and delivered and constitutes
         such party's legal, valid and binding obligation enforceable against it
         in accordance with its terms subject, as to enforcement, to bankruptcy,
         insolvency, reorganization and other laws of general applicability
         relating to or affecting creditors' rights and to the availability of
         particular remedies under general equity principles;

     (g) it shall comply with all applicable material laws, rules and
         regulations relating to its activities under this Agreement; and,

     (h) it is understood and agreed that SIEGFRIED has no control over the
         ultimate use of the Product or use of products that include or were
         manufactured with the Product, and except as provided for under Section
         6.05 regarding SIEGFRIED's indemnification obligations for third party
         claims SIEGFRIED shall have no liability in connection with any such
         use.

6.04 Indemnification by CELGENE. CELGENE shall defend, indemnify and hold
SIEGFRIED, its Affiliates and their respective officers, directors, employees
and agents harmless from and against any and all losses, demands, liabilities,
costs and expenses (including reasonable attorney's fees and disbursements)
incurred by or imposed upon any of them arising out of any and all governmental
or private actions (or their insurers under rights of subrogation or otherwise)
that are related in any way to (i) the storage (after delivery to the carrier
specified by CELGENE), use, transfer or sale (including without limitation, the
labeling, packaging, distribution, promotion and marketing of the Product or any
<PAGE>


product which is accepted by CELGENE under Section 5.02,; (ii) any claim of
failure by CELGENE to comply with governmental requirements applicable to
CELGENE relating to the Product; or (iii) any negligent or willful act or
omission by CELGENE in connection with its performance of this Agreement or any
breach by CELGENE of any of its representations, warranties or covenants
contained herein.

6.05 Indemnification by SIEGFRIED. SIEGFRIED shall defend, indemnify and hold
CELGENE, its Affiliates and their respective officers, directors, employees and
agents harmless from and against any and all losses, damages, liabilities, costs
and expenses (including reasonable attorneys' fees and disbursements) incurred
by or imposed upon any of them arising out of any and all governmental or
private actions (or their insurers under rights of subrogation or otherwise)
that are related in any way to (i) failure of any Product, packaging or labeling
supplied hereunder to conform to the Specifications or comply with cGMPs or
other warranty of SIEGFRIED contained herein at the time of delivery of the
Product to the common carrier; (ii) any claim of failure by SIEGFRIED to comply
with governmental requirements applicable to SIEGFRIED relating to the Product;
or (iii) any negligent or willful act or omission by SIEGFRIED, including
without limitation the negligent manufacture of the Product by SIEGFRIED, or any
breach by SIEGFRIED of any of its representations, warranties or covenants
contained herein; provided that SIEGFRIED shall have no liability if such
Product was manufactured in accordance with the Specifications.

6.06 Patent, Trademark and Tradedress Indemnification. CELGENE shall indemnify
and hold SIEGFRIED and its employees, officers, directors and agents harmless
from and against any and all claims, demands, actions, suits, losses, damages,
costs, expenses (including reasonable attorneys' fees and disbursements), and
liabilities which SIEGFRIED may incur, suffer or be required to pay by reason of
any patent trademark, and tradedress infringement suit brought against SIEGFRIED
because of CELGENE's marketing, distribution or sale of Product and/or any
pharmaceutical compositions containing the Product. SIEGFRIED shall indemnify
and hold CELGENE, its Affiliates and their respective employees, officers,
directors and agents harmless from and against any and all claims, demands,
actions, suits, losses, damages, costs, expenses (including reasonable
attorneys' fees and disbursements), and liabilities which CELGENE or its
Affiliates may incur, suffer or be required to pay by reason of any patent
infringement suit brought against CELGENE or its Affiliates because of
SIEGFRIED's manufacture of Product.

6.07 Conditions to Indemnification. The indemnified party shall give the
indemnifying party prompt written notice of any claim or the institution of any
suit against the indemnified party for which it may seek indemnification under
this Article VI. The failure to give such notice shall not relieve the
indemnifying party from any liability that it may have to the indemnified party
under this Article VI, except to the extent that the indemnifying party's
ability to defend such claim or suit is materially prejudiced by such failure to
give notice. The indemnifying party shall be entitled to participate in the
defense of such claim or suit and to assume the control of such defense;
provided, however, that the indemnified party may elect to participate in, but
not control, the defense of such claim or suit and to be represented by counsel,
at its own expense, in connection therewith. The indemnifying party shall not
enter into any settlement agreement, which would materially adversely affect the
<PAGE>


rights or obligations of the indemnified party under this Agreement or otherwise
without the Indemnified party's prior written consent, such consent not to be
unreasonably withheld or delayed. The indemnified party shall not be subject to
any liability for any settlement made without its consent, unless such
settlement provides for the payment by the indemnifying party of money damages
only and the unconditional release of the indemnified party from all liability
in connection with such claim.

6.08 Insurance.

     (a) SIEGFRIED represents and warrants to CELGENE that it is currently
         insured, including self-insurance, and covenants that at all times
         during the term of this Agreement it will maintain a comprehensive
         general liability insurance policy which (i) is sufficient to
         adequately protect against the risks associated with its ongoing
         business consistent with industry standards, including the risks which
         could reasonably be anticipated to arise in connection with the
         transactions contemplated by this Agreement and (ii) provides that it
         cannot be terminated or canceled without giving CELGENE thirty (30)
         days prior written notice. SIEGFRIED shall provide CELGENE with
         evidence of such insurance and self-insurance, upon request.

     (b) CELGENE has and during the term of this Agreement shall maintain an
         adequate self-insurance and/or insurance program which is sufficient to
         adequately protect against the risks associated with its ongoing
         business, including the risks which might possibly arise in connection
         with the transactions contemplated by this Agreement and provides that
         it cannot be terminated or cancelled without giving SIEGFRIED thirty
         (30) days prior written notice. CELGENE shall provide SIEGFRIED with
         evidence of such insurance and/or self-insurance program, upon request.

6.09 Limitation. Notwithstanding the foregoing, with respect to any claim by one
party against the other arising out of the performance or failure of performance
of the other party under this Agreement, the parties expressly agree that the
liability of such party to the other party for such breach shall be limited
under this Agreement or otherwise at law or equity to direct damages only and in
no event shall a party be liable in respect of any such claims for punitive,
exemplary, incidental, special or consequential damages.

                                   ARTICLE VII
                      PRODUCT RETURN PROCEDURES AND RECALLS
                      -------------------------------------

7.01 Product Return Procedures.

     (a) CELGENE may return to SIEGFRIED, at SIEGFRIED's shipping expense and
         risk, any Product sold by SIEGFRIED to CELGENE which does not conform
         to the Specifications, for credit or replacement, at the election of
<PAGE>


         SIEGFRIED within sixty (60) days of receipt. Credit for returned items
         shall be given when SIEGFRIED receives Product.

     (b) Subject to Section 5.02, no such return may be made unless CELGENE
         first receives written authorization for the return from SIEGFRIED,
         which such authorization shall not be unreasonably withheld, and such
         return is then made in accordance with such authorization.

     (c) Shipping costs for shipment of replacement Product by SIEGFRIED back to
         the location designated by Purchaser via ground transportation shall be
         paid by SIEGFRIED.

     (d) SIEGFRIED shall have no obligation to grant credit for or replace any
         Product sold hereunder which has been subject to misuse, mishandling,
         neglect, accident, or abuse by any person other than SIEGFRIED or has
         been subjected to alteration or modifications by any person other than
         SIEGFRIED.

7.02 Recalls.

     (a) If any government authority requires a recall, or if CELGENE reasonably
         determines a voluntary recall is warranted, of any product sold by
         CELGENE which includes the Product (the "Recalled Product") due to a
         failure of the Product to meet Specifications or otherwise comply with
         SIEGFRIED's warranties herein, CELGENE shall immediately notify
         SIEGFRIED of such recall by phone and confirm in writing within
         forty-eight (48) hours.

     (b) Prior to commencing any recall, described in Section 7.02 (a), CELGENE
         shall inform SIEGFRIED of the proposed manner in which the recall is to
         be carried out.

     (c) If the recall results from any circumstances described in clauses (i),
         (ii), or (iii) of Section 6.05 hereof, SIEGFRIED shall:

               (i) Credit to CELGENE an amount equal to the purchase price paid
                   by CELGENE to SIEGFRIED for the Product so recalled plus
                   CELGENE's actual cost for direct material and direct labor
                   furnished by it or it's contracting parties in connection
                   with the manufacture of the Recalled Product and reimburse
                   CELGENE for the reasonable expenses of conducting its recall
                   action (e.g. advertising, mailing, etc.);

              (ii) Indemnify and hold CELGENE harmless from and against any and
                   all damages, costs or charges, lawsuits or expenses
                   associated with or resulting from any such recall, including
                   reasonable counsel fees and disbursements.
<PAGE>


     (d) If the recall results from (i) a defect in handling of the Product
         after shipment by SIEGFRIED or in shipping or storing Product (after
         delivery to the carrier specified by CELGENE), (ii) the failure of the
         Product manufactured in accordance with the Specifications to comply
         with the levels of performance, quality, fitness or durability
         warranted or represented by CELGENE, (iii) a defect arising out of any
         Specifications mandated by CELGENE, (iv) the inadequate or misleading
         nature of any text appearing on the packaging or labeling of the
         Product in compliance with the Specifications, and (v) any other reason
         not set forth in clauses (i), (ii) or (iii) of Section 6.05 hereof
         including CELGENE's failure to recall any product containing Product
         after notice from SIEGFRIED that a recall is warranted (in which case
         SIEGFRIED shall have no liability whatsoever, notwithstanding anything
         herein to the contrary), CELGENE hereby indemnifies and holds SIEGFRIED
         harmless from any damages, costs, charges, lawsuits, or reasonable
         expenses (including legal fees and disbursements) incurred by or
         imposed upon SIEGFRIED associated with or resulting from any such
         recall.

                                  ARTICLE VIII
                                 CONFIDENTIALITY
                                 ---------------

8.01 Confidential Information. Each of SIEGFRIED and CELGENE shall use any
Confidential Information disclosed to it by or on behalf of the other party only
for the purposes contemplated by this Agreement and shall not disclose such
Confidential Information to any third party without the prior written consent of
the other party. The foregoing obligations shall survive the expiration or
termination of this Agreement for a period of ten (10) years. These obligations
shall not apply to Confidential Information that:

     (i)    is known by the receiving party at the time of its receipt, and not
            through a prior disclosure by the disclosing party, as documented by
            business records that pre-date disclosure by the disclosing party;

     (ii)   is at the time of disclosure, or thereafter becomes, published or
            otherwise part of the public domain without breach of this Agreement
            by the receiving party;

     (iii)  is subsequently disclosed to the receiving party by a third party
            that has the right to make such disclosure;

     (iv)   is independently developed by the receiving party or its Affiliates
            without the aid, application or use of the disclosing party's
            Confidential Information, and such independent development can be
            documented by the receiving party;

     (v)    is disclosed to any institutional review board of any entity
            conducting clinical trials involving the Product or to any
            governmental or other regulatory agencies in order to obtain patents
            or to gain approval to conduct clinical trials or to market the
<PAGE>


            Product, provided that such disclosure may be made only to the
            extent reasonably necessary for such purposes; or

     (vi)   is required to be disclosed by law, regulation, rule, act or order
            of any governmental authority or agency or by judicial process,
            provided that notice is promptly delivered to the other party in
            order to provide an opportunity to seek a protective order or other
            similar order with respect to such Confidential Information and
            thereafter the receiving party discloses to the requesting person
            only the minimum information required to be disclosed in order to
            comply with the request, whether or not a protective order or other
            similar order is obtained by the other party.

                                   ARTICLE IX
                          INTELLECTUAL PROPERTY RIGHTS
                          ----------------------------

9.01 Rights to Product and Material. Each Party shall continue to have sole
ownership of and the right to exploit its own know-how, trade secrets and other
intellectual property rights. This Article VIII survives the termination or
expiration of this Agreement

                                    ARTICLE X
                                   TERMINATION
                                   -----------

10.01 Early Termination. Either party may terminate this Agreement as follows:

     (a) By one party immediately upon written notice to the other, if the other
         party files a petition in bankruptcy, or enters into an arrangement
         with or makes an assignment for the benefit of its creditors, or
         applies for or consents to the appointment of a receiver or trustee for
         it or any of its assets, or suffers or permits the entry of an order
         adjudicating it to be bankrupt or insolvent (each an "Insolvency
         Event").

     (b) By one party if the other party fails to perform or otherwise breaches
         any of its representations, warranties and covenants or any material
         obligations hereunder, by giving the breaching party written notice of
         its intent to terminate and stating the grounds therefor. The party
         receiving such notice shall have sixty (60) days from the receipt
         thereof if such breach or failure involves a non-monetary obligation,
         and thirty (30) days if the breach or failure is regarding a monetary
         obligation relating to conforming Product, to cure the failure or
         breach, at which time this agreement shall terminate if such failure or
         breach has not been cured. In no event, however, shall such termination
         notice be deemed to waive any rights to damages or any other remedy,
         which the party giving notice of breach may have as a consequence of
         such failure or breach.
<PAGE>


10.02 Effect of Termination. The expiration or early termination of this
Agreement shall not relieve the parties of any obligation accruing prior to such
expiration or termination, and the provisions of Sections 2.02, 2.03, 2.05,
2.08, and 5.03 and Articles VI, VII, VIII and IX hereof shall survive the
expiration or early termination of this Agreement.

                                   ARTICLE XI
                               GENERAL PROVISIONS
                               ------------------

11.01 Force Majeure. Failure of any party to perform its obligations under this
Agreement shall not subject such party to any liability or place them in breach
of any term or condition of this Agreement to the other party if such failure is
due to any cause beyond the reasonable control of such non-performing party
("force majeure"), unless conclusive evidence to the contrary is provided.
Causes of non-performance constituting force majeure shall include, without
limitation, acts of God, fire, explosion, flood, drought, war, riot, sabotage,
embargo, strikes or other labor trouble, failure in whole or in part of
suppliers to deliver on schedule materials, interruption of or delay in
transportation, a national health emergency or compliance with any order or
regulation of any government entity acting with color of right. The party
affected shall promptly notify the other party of the condition constituting
force majeure as defined herein and shall exert commercially reasonable efforts
to eliminate, cure and overcome any such causes and to resume performance of its
obligations with all possible speed; provided that nothing herein shall obligate
a party to settle on terms unsatisfactory to such party any strike, lockout or
other labor difficulty, any investigation or other proceeding by any public
authority or any litigation by any third party. If a condition constituting
force majeure as defined herein exists for more than ninety (90) consecutive
days, the parties shall meet to negotiate a mutually satisfactory resolution to
the problem, if practicable.

11.02 Assignment. Neither party shall, without the prior written consent (not to
be unreasonably withheld or delayed) of the other party having been obtained,
assign or transfer this Agreement to any person or entity, in whole or in part,
provided that, each party may assign or transfer this Agreement to any Affiliate
or to any successor by merger of such party or its pharmaceutical business to
which this Agreement relates, or upon a sale of all or substantially all of such
parties assets, or the assets of its pharmaceutical business to which this
Agreement relates, and provided further that Celgene may assign this Agreement
to Novartis Pharmaceutical Corporation, in each case, without the prior written
consent of the other party hereto. All of the terms and provisions of this
Agreement shall be binding upon and inure the benefit of and be enforceable by
the parties hereto and their respective successors and assigns.

11.03 Entire Agreement. This Agreement, together with the Quality Agreement
(Exhibit C hereto), shall constitute the entire Agreement between the parties
hereto and shall supersede any other agreements, whether oral or written,
express or implied, as they pertain to the Product. This Agreement may not be
changed or modified except by written instrument signed by both parties.
<PAGE>


11.04 Independent Relationship. Nothing herein contained shall be deemed to
create an employment, agency, joint venture or partnership relationship between
the parties hereto or any of their agents or employees, or any other legal
arrangement that would impose liability upon one party for the act or failure to
act of the other party. Neither party shall have any power to enter into any
contracts or commitments or to incur any liabilities in the name of, or on
behalf of, the other party, or to bind the other party in any respect
whatsoever.

11.05 Notice. Any notice required hereunder may be served by either party on the
other by personal delivery, or sent by facsimile (with confirmation copy by
registered or certified first-class mail), or by registered or by certified
first-class mail, or by overnight delivery service to the respective party's
address set forth below:

       If to SIEGFRIED: SIEGFRIED (USA), Inc.
                        33 Industrial Park Road
                        Pennsville, NJ 08070
                        Attention: Donald B. Bell
                                   President Siegfried (USA)
                        (fax  856-678-4008)

       with a copy to:  Siegfried Ltd.
                        Untere Bruhlstrasse 4
                        4800 Zofingen
                        Switzerland
                        Attention: General Counsel
                        (fax  41 62 746 15 05)
                                  and
                        Jeanne Barnum, Esquire
                        Schnader Harrison Segal & Lewis LLP
                        1600 Market Street, Suite 3600
                        Philadelphia, PA 19130
                        (fax 215-751-2205)

       If to CELGENE:   CELGENE Company
                        7 Powder Horn Drive
                        Warren, NJ  07059
                        Attention: Joseph J. Day, Jr.
                                   Sr. Vice President - Business Development and
                                                        Technical Operations
                        (fax  732-805-3931)

       with a copy to:  Proskauer Rose LLP
                        1585 Broadway
                        New York, NY 10036
                        Attention: Robert A. Cantone
                        (fax  212-969-2900)
<PAGE>


or to such other address as one party may notify the other as provided herein.

11.06 Waiver. Any delay or failure in enforcing a party's rights under this
Agreement or any waiver as to a particular default or other matter shall not
constitute a waiver of such party's rights to the future enforcement of its
rights under this Agreement, nor operate to bar the exercise or enforcement
thereof at any time or times thereafter, excepting only as to an express written
and signed waiver as to a particular matter for a particular period of time.

11.07 Hardship. If during the term of this Agreement, performance of the
Agreement should lead to unreasonable hardship for the one or the other Party,
taking the interests of both Parties into account, both Parties shall undertake
reasonable endeavors to agree amicably to amend this Agreement in the light of
the change in circumstances.

11.08 Heading. Section headings contained in this Agreement are included for
convenience only and form no part of the agreement between the parties.

11.09 Severability. If any provision of this Agreement or the application of any
such provision to any person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provisions
hereof. The parties shall consult and use good faith efforts to agree upon a
valid and enforceable provision, which shall be a reasonable substitute for such
invalid provision in light of the intent of this Agreement.

11.10 Resolution of Dispute. Any claim or controversy arising hereunder shall
first be submitted to mediation and, if not settled during mediation, shall
thereafter be submitted to binding arbitration as provided by the Federal
Arbitration Act (9 U.S.C. ss.ss. 1 et seq.) or, if applicable, by similar state
statute, and not by or in a court of law. The arbitrator shall decide all
decisions respecting the arbitrability of any dispute. The mediation shall be
conducted in accordance with the CPR Rules for Non-Administrated Arbitration, as
appropriate. If the dispute is not fully resolved by mediation, the dispute
shall be submitted to binding arbitration in accordance with the CPR Rules for
Non-Administrated Arbitration Rules, as appropriate, and judgment upon the award
rendered by the arbitrator can be entered in and enforced by any court having
jurisdiction over the matter.

11.11 Counterparts. This Agreement may be executed in any number of separate
counterparts, each of which shall be deemed to be an original, but which
together shall constitute one and the same instrument. Facsimile or telecopy
versions of manual signatures of this Agreement shall be considered original
manual signatures

11.12 Governing Law. This Agreement is to governed by and construed in
accordance with the laws of the State of New Jersey, without giving effect to
conflict of law principles.
<PAGE>


         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.


                                    AGREED AND ACCEPTED BY SIEGFRIED (USA), INC.


WITNESSETH:


BY:    -----------------------------        BY:    -----------------------------


NAME:  -----------------------------        NAME:  -----------------------------


TITLE: -----------------------------        TITLE: -----------------------------


DATE:  -----------------------------        DATE:  -----------------------------


                                      AGREED AND ACCEPTED BY CELGENE CORPORATION


WITNESSETH:


BY:    -----------------------------        BY:    -----------------------------


NAME:  -----------------------------        NAME:  -----------------------------


TITLE: -----------------------------        TITLE: -----------------------------


DATE:  -----------------------------        DATE:  -----------------------------
<PAGE>


                                    EXHIBIT A
                                    ---------

                        PRODUCT SPECIFICATIONS / LOT SIZE

1. All d-threo-methylphenidate USP produced for CELGENE shall meet current USP
requirements and specifications (see below).

2. All containers shall have an airtight seal with tamper evident seal applied.

3. All shipments must be accompanied with a Certificate of Analysis. An MSDS
sheet shall be sent each time the MSDS is updated by SIEGFRIED.

4. All shipments must be in 50 kg containers of consistent nature.

5. All containers will have a mechanically produced label with the statement of
gross weight, tare weight and product weight of each container.
<PAGE>
<TABLE>
<S>                             <C>
--------------------------------------------------------------------------------------------------------------------------------
                                Document no:  QA-001                      Revision no:  4                    Page  1  of  2
                                ------------------------------------------------------------------------------------------------
                                Department: Quality Assurance/Quality Control
                                ------------------------------------------------------------------------------------------------
                                Title: DEXMETHYLPHENIDATE HYDROCHLORIDE DRUG SUBSTANCE SPECIFICATION SHEET
                                ------------------------------------------------------------------------------------------------
                                Supersedes: QA-001.3                            Supersedes effective date:  October 5, 2001
================================================================================================================================
<CAPTION>
ALL TESTS WILL BE PERFORMED USING THE METHOD REVISION IN FORCE AT THE TIME OF ANALYSIS
--------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>                                             <C>
TEST                            METHOD                                          ACCEPTANCE CRITERION
--------------------------------------------------------------------------------------------------------------------------------
Appearance (visual test)        SOP-111                                         White to off-white powder
--------------------------------------------------------------------------------------------------------------------------------
Identification                  USP (angle bracket)197M(angle bracket)          Consistent with in-house reference material
(FT-IR spectrum)
--------------------------------------------------------------------------------------------------------------------------------
Identification                  Celgene MAM-008                                 NLT +75(degree)
(Specific Rotation)
--------------------------------------------------------------------------------------------------------------------------------
Assay (HPLC)                    Celgene MAM-014                                 98.0 - 102.0% (w/w, calculated on a dried basis)
--------------------------------------------------------------------------------------------------------------------------------
Enantiomeric purity assay       Celgene MAM-016                                 NLT 96% (w/w)
--------------------------------------------------------------------------------------------------------------------------------
Related Impurities              Celgene MAM-015                                 RI1:                    NMT 0.10% (w/w)
(HPLC)(1)                                                                       RI2:                    NMT 0.10% (w/w)
                                                                                RI3:                    NMT 0.30% (w/w)
                                                                                RI4:                    NMT 0.10% (w/w)
                                                                                RI5:                    NMT 0.50% (w/w)
                                                                                Each unspecified(2):    NMT 0.10% (by peak area)
                                                                                Total impurities(3):    NMT 1.20%
--------------------------------------------------------------------------------------------------------------------------------
Loss on drying                  USPZ(angle bracket)731(angle bracket)           NMT 0.5% (w/w)
--------------------------------------------------------------------------------------------------------------------------------
Residue on ignition             USP(angle bracket)281(angle bracket)            NMT 0.1% (w/w)
--------------------------------------------------------------------------------------------------------------------------------
Heavy metals                    USP(angle bracket)231(angle bracket) Method II  NMT 0.001% (w/w)
--------------------------------------------------------------------------------------------------------------------------------
Residual solvents (GC)          Celgene MAM-013                                 Methanol:                      NMT 0.10% (w/w)
                                USP(angle bracket)467(angle bracket             2-Propanol:                    NMT 0.10% (w/w)
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Abbreviations for related impurities:
RI1:  erythro-(alpha)-phenyl-(alpha)-piperidyl-(2)-acetic acid hydrochloride
RI2:  erythro-(alpha)-phenyl-(alpha)-piperidyl-(2)-acetamide
RI3:  threo-a-phenyl-a-piperidyl-(2)-acetic acid hydrochloride (or ritalinic
      acid HCl)
RI4:  threo-a-phenyl-a-piperidyl-(2)-acetamide
RI5:  erythro [(R*, S*)] isomer of methylphenidate hydrochloride

(2) The percentage of unspecified impurities is calculated by comparison to the
peak area of the d-threo-methylphenidate HCl standard peak, assuming that the
relative response factor of the unspecified impurity with respect to
d-threo-methylphenidate HCl is equal to one.

(3) The value of total related impurities is calculated as the sum of the
specified impurities (w/w) plus the sum of the unspecified impurities (by peak
area).
<TABLE>
<S>                               <C>                          <C>                            <C>
--------------------------------------------------------------------------------------------------------------------------------
Prepared by:                     Reviewed by:                  Approved by:                   QA Approved by:


Date:                            Date:                         Date:                          Effective Date:
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       1
<PAGE>

<TABLE>
<S>                             <C>
--------------------------------------------------------------------------------------------------------------------------------
                                Document no:  QA-001                Revision no:  4               Page  2  of  2
                                --------------------------------------------------------------------- --------------------------
                                Department: Quality Assurance/Quality Control
                                ------------------------------------------------------------------------------------------------
                                Title:  DEXMETHYLPHENIDATE HYDROCHLORIDE DRUG SUBSTANCE SPECIFICATION SHEET
                                ------------------------------------------------------------------------------------------------
                                Supersedes:  QA-001.3               Supersedes effective date:  October 5, 2001
=============================== ================================================================================================
<CAPTION>
ADDITIONAL TEST
--------------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>                                       <C>
TEST                                  METHOD                                    ACCEPTANCE CRITERION
--------------------------------------------------------------------------------------------------------------------------------
Identification (Chloride)             USP (angle bracket)191(angle bracket)     A white curdy precipitate is formed
--------------------------------------------------------------------------------------------------------------------------------






















--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>


                                    EXHIBIT B
                                    ---------

                                 PRODUCT PRICES

The initial prices of the Product are as follows:

The price for the initial order of 1,000 kilogram of Product is Four Thousand
Seven Hundred Eighty Dollars ($4,780.00 USD) per kilogram.

Thereafter, the price for purchase orders quantities of less than 1,000 kilogram
shall be Four Thousand Four Hundred Eighty Dollars ($4,480.00 USD) per kilogram.
The price for purchase order quantities of more than 1,000 kilogram shall be
Four Thousand One Hundred Twenty Dollars ($4,120.00 USD) per kilogram. The
foregoing shall serve as Base Prices for adjustment purposes.

PRICE REVISION:

The Base Price will be subject to an annual adjustment, commencing on January 1,
2004. The Base Price will be adjusted upward or downward each year based upon
the change in the Producer Price Index for Chemical and Allied Products (PPI -
WPU06) base value, as published by the Bureau of Labor Statistics of the U.S.
Department of Labor. The parties agree that the PPI factor adjustment will begin
at the average for July 1, 2001 to June 30, 2002 at 149.3.

The calculation of the adjusted Product price is as follows:

         Price200(alpha) = Base Price + PPI Escalation
         PPI Escalation = Base Price X (PPI200(alpha) /149.3)
<PAGE>


                                    EXHIBIT C
                                    ---------

                                QUALITY AGREEMENT

                  CELGENE CORPORATION AND SIEGFRIED (USA), INC.

This Agreement is made and entered into as of the first (1st) day of January,
2003, by and between Celgene Corporation, a New Jersey corporation, having its
principal place of business at 7 Powder Horn Drive, Warren, New Jersey 07059
("CELGENE"), and Siegfried (USA), Inc., a Delaware corporation, having its
principal place of business at 33 Industrial Park Road, Pennsville, New Jersey
08070 ("SIEGFRIED").

1. GENERAL

     A.  In connection with CELGENE entrusting SIEGFRIED with the manufacture
         and quality control of the Active Pharmaceutical Ingredient
         d-threo-methylphenidate hydrochloride identified in the Supply
         Agreement (hereinafter referred to as the "Product"), the relations
         concerning quality between CELGENE and SIEGFRIED are laid down in this
         Agreement.
<PAGE>


     B.  All manufacturing shall be performed in accordance with the New Drug
         Application (NDA), Drug Master File (DMF) and any agreed Specifications
         (see Exhibit A) and in compliance with standard industry practice,
         Regulatory Agency guidelines, USP, ICH, and all applicable federal,
         state and local laws and regulations including, without limitation,
         current Good Manufacturing Practice (cGMP). Master manufacturing Batch
         Records will be approved by CELGENE prior to their use.

2. AUDITS

     A.  Quality Audits. SIEGFRIED shall permit CELGENE and its representatives
         to conduct audits of the facility at which the Product is manufactured
         ("Facility") at least annually, in accordance with the CELGENE
         procedures and Quality Guideline. SIEGFRIED shall provide CELGENE with
         access to its representatives involved in the manufacture of Product.
         The timing of the audit will be mutually agreed and arranged as soon as
         practical and shall not reasonably interfere with the business or
         operations of SIEGFRIED. For each audit, a Lead Auditor will be
         appointed.

         A "for cause" audit will be conducted with the procedure presented
         above, and has no frequency restriction and shall be conducted
         promptly.

     B.  Access to Premises. CELGENE and its representatives may upon prior
         notice to SIEGFRIED have access to and the right to conduct audits of
         those portions of the Facility in which the manufacture of the Product
         is conducted and of applicable SIEGFRIED procedures during normal hours
         of operation in accordance with the terms and conditions of this
         Agreement.

     C.  Audit Findings. At either party's request, an exit meeting shall be
         held to discuss CELGENE's audit findings at a mutually convenient time
         and at SIEGFRIED's premises. Within thirty (30) days of the conclusion
         of an audit, CELGENE shall provide SIEGFRIED with a written report
         summarizing its findings. SIEGFRIED shall provide CELGENE with a
         written response to such report within thirty (30) days of its receipt
         thereof. Such response shall include a plan for corrective action
         designed to address reasonable concerns and shortcomings documented in
         CELGENE's audit report.

     D.  Inspection. In order to ascertain compliance by SIEGFRIED with the
         quality requirements contained in this Agreement, CELGENE and its
         representatives shall have the right, during normal hours of operation
         and on reasonable prior notice to SIEGFRIED, to inspect and request
         samples from the Facility in accordance with the terms of the
         Agreement. SIEGFRIED shall use its best efforts to enable CELGENE and
         its representatives to inspect and sample Product. Such inspections and
         sampling shall be conducted in a manner, which does not interrupt or
         impair in any significant manner the manufacturing operations of such
         facility.

     E.  FDA Inspections and other Regulatory Investigations. SIEGFRIED will
         notify CELGENE promptly upon its actual knowledge of any scheduled
         inspection of the Facility by the FDA or any other Regulatory Agency
         relating to the manufacture of Product. SIEGFRIED will provide to
         CELGENE all material citations, observations (including FDA 483 forms,
         Warning Letters and establishment inspection reports and SIEGFRIED
<PAGE>


         responses) resulting from any FDA or other Regulatory Agency inspection
         of the Facility relating directly to the manufacture of Product.

3. CHANGE CONTROL

     A.  General. Any changes including manufacturing scale to be made by
         SIEGFRIED with respect to Product shall be in compliance with the
         applicable Regulatory Agency's guidelines. All such changes must be
         approved, in writing, in advance by CELGENE prior to implementation and
         not withstanding that some changes may only require a statement in
         CELGENE's annual report to the applicable Regulatory Agency under that
         Regulatory Agency's applicable guidelines. Such approval will not be
         unreasonably withheld. Validation protocols and reports, and modified
         master manufacturing Batch Records for any such changes will be
         approved by CELGENE and SIEGFRIED.

     B.  Facility. All manufacturing shall be performed at SIEGFRIED's
         manufacturing facilities located at 33 Industrial Park Road,
         Pennsville, New Jersey 08070 and/or Untere Bruhlstrasse 4, 4800
         Zofingen, Switzerland.

4. DOCUMENTS / STANDARD OPERATING PROCEDURES

     A.  SIEGFRIED shall provide CELGENE with certified exact copies of all
         executed Batch Records and associated release documentation within
         thirty (30) days of the completion of manufacturing of each Product
         lot, when requested. CELGENE shall have the right to have access to
         review standard operating procedures, Batch Records, validation
         documentation, and any other documentation relating to the manufacture
         of PRODUCT. Upon CELGENE's request, SIEGFRIED will provide any
         additional documentation as reasonably requested by CELGENE.

     B.  FDA Investigations and Other Investigations. SIEGFRIED shall provide
         CELGENE with any documents required due to regulatory inspections
         within five (5) working days of CELGENE's request for such documents.

5. RETENTION

     A.  Records. SIEGFRIED shall maintain records relating to the Product in
         accordance with cGMPS and other applicable regulatory requirements.
         CELGENE shall be entitled to inspect such records at its own expense
         and during normal business hours as CELGENE shall reasonably request
         upon prior written notice to SIEGFRIED and shall not unreasonably
         disrupt the normal operation of the business.

     B.  Product Retain. SIEGFRIED shall maintain sufficient Product to conduct
         at least three sets of analyses. The retention duration for the samples
         is five (5) years. At the conclusion of this period, CELGENE may
         request transfer of the samples to CELGENE.
<PAGE>


6. PRODUCT COMPLAINTS

     A.  CELGENE will provide SIEGFRIED written details of any Product
         complaint. Within thirty (30) calendar days of SIEGFRIED's receipt of
         such notification, SIEGFRIED shall provide CELGENE with a report
         reconciling the reported complaint.

     B.  CELGENE and SIEGFRIED will immediately inform each other of any recall
         actions concerning the Product.

7. TESTING AND INVESTIGATIONS

     A.  Release and stability testing of the Product may be performed by
         CELGENE or SIEGFRIED as agreed. Release and stability testing shall
         only be performed by SIEGFRIED following the successful completion of
         transfer of regulatory methods from CELGENE to SIEGFRIED.

     B.  SIEGFRIED shall provide CELGENE with Product samples, taken by
         SIEGFRIED in accordance with a sampling plan approved by SIEGFRIED and
         CELGENE within thirty (30) days of the completion of manufacturing of
         each Product lot, when requested.

     C.  SIEGFRIED shall supply CELGENE with any manufacturing, testing or
         in-process control data, or applicable documentation such as
         investigation reports within three (3) business days, if requested as
         the result of a regulatory inspection, an annual audit by CELGENE, or a
         regulatory exposure such as recall or significant complaint as relates
         to Product.

     D.  SIEGFRIED shall be responsible for supporting all Batch Record
         investigations associated with regulatory actions as relates to
         Product. The results of all investigations shall be forwarded to
         CELGENE within three (3) business days.

     E.  Siegfried shall provide Product Quality Reviews, performed per ICH Q7A,
         to CELGENE no later that the end of November annually.

8. PERSONNEL TRAINING

     A.  SIEGFRIED shall provide training of their respective personnel as may
         be necessary to manufacture Product to meet the Specifications.
         Training shall be documented in compliance with cGMPs.

9. BATCH REJECTION

     A.  CELGENE may reject any Batch of Product failing to meet any of the
         Specifications by giving written notice of rejection to SIEGFRIED
         within forty-five (45) days following receipt by CELGENE of samples of
         such Batch. Any claim by CELGENE submitted to SIEGFRIED pursuant to
         this Section shall be accompanied by a report of analysis (including a
         Product sample from the Batch analyzed). CELGENE's failure to reject
         Product in the manner set forth herein shall constitute acceptance of
         the Batch.
<PAGE>

10. REPROCESSING AND REWORKING

     A.  CELGENE will work with SIEGFRIED to support any reprocessing and
         reworking procedures as allowed by cGMP, and to support any required
         filing(s), if required. Product will not be reworked without prior
         notification to CELGENE.

12. STANDARDS

     A.  CELGENE shall supply any requested standards (reference, resolution,
         etc.) in a reasonable timeframe (generally 2-3 weeks).

13. CONFLICT

     A.  In the event of any conflict between the provisions of this Agreement
         and the provisions of the Supply Agreement dated January 1, 2003, the
         provisions of such Supply Agreement shall control.


         IN WITNESS WHEREOF, the parties have executed this Agreement as of
January 1, 2003.


Agreed and accepted                                     Agreed and accepted
for SIEGFRIED (USA), INC.                               for CELGENE CORPORATION


BY:    -----------------------------        BY:    -----------------------------


NAME:  -----------------------------        NAME:  -----------------------------


TITLE: -----------------------------        TITLE: -----------------------------