CONFIDENTIAL
EXHIBIT 10.3
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY
FILED HEREWITH OMITS THE INFORMATION SUBJECT TO THE CONFIDENTIALITY REQUEST.
OMISSIONS ARE DESIGNATED AS *. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
DISTRIBUTION
AND
MANUFACTURING SERVICES AGREEMENT
BETWEEN
LEVPHARMA
AND
SANQUIN
THIS AGREEMENT (the "AGREEMENT") is entered into effective as of 16 January
2004, (the "Effective Date") by and between LEV PHARMACEUTICALS, INC., a
corporation formed under the laws of the state of Delaware, having an address at
000 Xxx Xxxxxxxxx Xxxx, Xxxxxx Xxxxxxx, Xxxxxxxxxxxx 00000 ("LEVPHARMA") and the
SANQUIN BLOOD SUPPLY FOUNDATION, a not-for-profit organization formed under the
laws of The Netherlands, having an address at Xxxxxxxxxxx 000, 0000 XX,
Xxxxxxxxx, Xxx Xxxxxxxxxxx, acting for the purposes of the AGREEMENT through its
Plasma Products Division, ("SANQUIN") (collectively, the "Parties").
W I T N E S S E T H :
WHEREAS, LEVPHARMA wants to develop the market for C1 Esterase Inhibitor
in the USA and certain other countries and, as a consequence, requires
manufacturing for clinical trial requirements and commercial sale of a C1
Esterase Inhibitor product (the "Product"); and
WHEREAS, LEVPHARMA seeks to obtain a distribution license from an
established manufacturer of the Product for countries in which LEVPHARMA shall
obtain the necessary governmental and/or regulatory authorizations to market the
Product; and
WHEREAS, SANQUIN has proprietary know-how concerning the manufacture and
marketing for clinical applications in humans of a C1 Esterase Inhibitor
containing product, marketed in The Netherlands and certain other countries
under the brand name Cetor(R); and
WHEREAS, SANQUIN has full right and title in the Technology and facilities
used to manufacture the Product; and
WHEREAS, SANQUIN possesses suitable drug substance manufacturing
facilities and a process to manufacture the Product required by LEVPHARMA, and
will use its best efforts to manufacture the Product in a timely manner
according to the Specifications and in accordance with current Good
Manufacturing Practices (cGMPs) and the terms of this Agreement; and
WHEREAS, SANQUIN is willing to invest in up-grading its facilities to meet
FDA-requirements at SANQUIN's cost; and
WHEREAS, SANQUIN is willing to grant to LEVPHARMA the right to apply for
registration in certain countries, including the USA, at LEVPHARMA's cost;
NOW THEREFORE, in consideration of the foregoing premises, which are
incorporated into and made a part of this Agreement, and of the mutual covenants
which are recited herein, the Parties agree as follows:
ARTICLE I - DEFINITIONS
1.1 "PRODUCT" shall mean C1 esterase inhibitor derived from human plasma as
manufactured by SANQUIN or its subsidiaries on behalf of LEVPHARMA.
1.2 "CLINICAL STUDY" shall mean the Phase III study performed to obtain
Registration of the Product for Hereditary Angioedema in the US.
1.3 "APPROVAL DATE" as applied to each Batch, shall mean the date on which
SANQUIN's Qualified Person approves the related Batch records and releases the
Product for delivery.
1.4 "BATCH" shall mean all material intended to have uniform character and
quality that is produced from a single manufacturing procedure in accordance
with established parameters and according to a single manufacturing order during
that same cycle of manufacture.
1.5 "MASTER BATCH RECORD" shall mean the criteria, methodology, manufacturing
Process, Specifications and formulae for the Product, which includes the
identity and quantities of the Raw Materials and other components, as such may
be amended by mutual agreement of the Parties from time to time.
1.6 "PROCESSING," "PROCESS," and "PROCESSED" shall have comparable meanings and
shall mean the act of manufacturing and inspecting Product in accordance with
the Master Batch Record and specified procedures.
1.7 "PURCHASE ORDER" shall mean the document originated by LEVPHARMA which sets
forth the quantities of Product ordered and delivery dates mutually agreed to by
the Parties.
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1.8 "RAW MATERIALS" shall mean the plasma, excipients and associated
manufacturing components, all of which are utilized in Processing. The plasma
used to manufacture the Product or any component thereof shall at all times be
obtained from US licensed collection centers.
1.9 "REGULATORY AUTHORITIES" shall mean the FDA and all other governmental or
regulatory authorities having jurisdiction over the manufacture and commercial
sale of any Product.
1.10 "TECHNOLOGY" shall mean all the technical information, whether tangible or
intangible, including (without limitation) any and all data, techniques,
discoveries, inventions, Processes, formulations, know-how, patents (including
any divisional, continuation, extension, reissue, reexamination certificate, or
renewal patents), patent applications, inventor certificates, trade secrets,
methods of production and other proprietary information, that SANQUIN has rights
to (as either owner, licensee or sublicensee), or may hereafter obtain rights
to, relating to the Product.
1.11 "WORKING BATCH RECORD" shall mean the record, for each Batch, of the
criteria, methodology, manufacturing Process, Specifications and formulae for
the Product, which includes the identity and quantities of the Raw Materials and
other components, as set forth in the Master Batch Record, and serves as the
official documentation of that specific manufacturing process as it was
performed for each lot.
1.12 "cGMP" shall mean current Good Manufacturing Practice as defined in Parts
210 and 211 of Title 21 of the U.S. Code of Federal Regulations, as may be
amended from time to time, or any successor thereto.
1.13 "MANUFACTURING STANDARDS" shall mean, with respect to the Product, good
manufacturing practice as required by the Dutch authorities in order to be in
conformity with EU standards and such additional manufacturing Specifications or
standards as may be established by mutual agreement of LEVPHARMA and SANQUIN
from time to time and as more fully described in Sections 4.1(d) and (e).
1.14 "TERRITORY" shall mean all countries in North, Central and South America
with the exception of the Dutch Overseas Territories, Argentina, and Brazil. The
Territory may be expanded in accordance with the provisions in Sections 2.1
and/or 2.2(a) of this Agreement.
1.15 "REGISTRATION" shall mean, with respect to each country in the Territory,
approval of the Registration Application for any Product filed in such country,
including, where applicable outside of the United States, pricing or
reimbursement approval by the Regulatory Authority in such country.
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1.16 "REGISTRATION APPLICATION" shall mean a Biologics License
Application under the United States Federal Food, Drug and Cosmetics Act and the
regulations promulgated thereunder, or a comparable filing for Registration in
any other country in the Territory.
1.17 "REGULATORY FILING" shall mean any document required to be filed under the
United States Federal Food, Drug and Cosmetics Act and the regulations
promulgated thereunder, or any such comparable filing in any other country.
1.18 "SPECIFICATIONS" shall mean, with respect to the Product, the
Specifications for Processing the Product as agreed upon by LEVPHARMA and
SANQUIN, in consideration of the regulatory requirements in each country, as may
be amended from time to time and as more fully described in Sections 4.1(d) and
(e).
1.19 "CALENDAR QUARTER" shall mean the periods ending on March 31, June 30,
September 30 and December 31 of each year.
1.20 "CALENDAR YEAR" shall mean the period beginning on January 1 and ending on
December 31 of each year.
1.21 "AFFILIATE" shall mean, as to any person or entity, any other person or
entity which directly or indirectly controls, is controlled by, or is under
common control with such other person or entity and it shall include
subsidiaries. For purposes of the preceding definition, "control" means the
right to control, or actual control of, the management of such other entity,
whether by ownership of voting securities, by agreement, or otherwise.
1.22 "QUALIFIED PERSON" shall mean any person who possesses the skills,
experience, education, and authority to perform a task or job described in this
Agreement.
1.23 "REGULATORY APPROVAL" shall mean all approvals, licenses, registrations and
authorizations of all governmental agencies in a country necessary for the
manufacture, use, offer for sale, sale or import of the Product in the
applicable country.
1.24 "EUROPEAN UNION" shall mean all the members of the European Union as of
December 31, 2004.
1.25 "HANDLING SPECIFICATIONS" shall mean the Specifications for the handling,
the storage, the use, the transport and the general possession of the Product by
LEVPHARMA, in accordance with the specifications and standards defined and
specified in the Quality Agreement, which shall remain attached to this
Agreement as Exhibit 1, and this for the entire period the Product is in
possession and under the responsibility of LEVPHARMA, i.e. as from the time the
Product is shipped by SANQUIN "F.O.B., Amsterdam", in accordance with
LEVPHARMA's written instructions as detailed on the Purchase Order as defined in
section 4.4 of the Agreement, until such time the Product has been successfully
distributed, marketed, offered for sale, sold and/or imported by LEVPHARMA to a
third party, user of the Product.
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1.26 "EFFECTIVE DATE" shall mean the date put in writing on the first page of
this Agreement, upon execution of this Agreement on behalf of both Parties.
1.27 "CLINICAL DEVELOPMENT PLAN" shall mean plan to collect necessary data to
support licensure in the US.
1.28 "COMPETITOR" shall mean current manufacturer and/or distributor of C1
Esterase Inhibitor and/or any product marketed for the same clinical indications
as C1 Esterase Inhibitor.
ARTICLE II - GRANT OF RIGHTS
2.1 LEVPHARMA Rights. SANQUIN owns certain Technology and facilities to
manufacture the Product. Upon execution of this Agreement, SANQUIN agrees to use
the Technology to manufacture the Product for LEVPHARMA subject to the terms and
conditions set forth in this Agreement. LEVPHARMA shall have and SANQUIN hereby
grants to LEVPHARMA the exclusive right to distribute, market, offer for sale,
sell, import and promote the Product in the Territory and the first right of
refusal to distribute, market, offer for sale, sell, import and promote the
Product in the rest of the world outside of the EU as outlined below, which
shall become exercisable upon market introduction of the Product in the US.
In the event that SANQUIN is either approached by or approaches a third party to
distribute, market, offer for sale, sell, import and promote the Product in a
country or territory outside the Territory and the EU, SANQUIN shall provide
LEVPHARMA with notice of such interest, and shall allow LEVPHARMA thirty (30)
days to either accept or reject the right to distribute, market, offer for sale,
sell, import and promote the Product in such country or territory.
(i) Should LEVPHARMA accept the right, then LEVPHARMA shall have 120
days to draft a plan to develop the Product in such country or territory,
including timelines, regulatory requirements (including, but not limited to,
plasma source and testing requirements) and sales volumes. The Parties agree
that all other terms of this Agreement shall apply to any such expansion of the
Territory. Upon LEVPHARMA submitting such a proposal, the Parties shall
negotiate in good faith to reach an agreement within 30 days. The Parties agree
that all meetings to discuss the expansion of the Territory shall be held in the
US.
(ii) Should LEVPHARMA reject the right then SANQUIN shall be free to
grant the right to distribute, market, offer for sale, sell, import and promote
the Product in said country or territory to a third party.
(iii) Should SANQUIN and LEVPHARMA not reach an agreement regarding
the proposal made by LEVPHARMA as under (i) above, then SANQUIN shall be free to
grant the right to said country or territory to a third party, but only on terms
not less favorable to SANQUIN than those contained in the LEVPHARMA proposal.
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2.2 SANQUIN Rights.
(a) SANQUIN shall retain all rights to develop, distribute, market, offer for
sale, sell, import and promote the Product in the EU. Should SANQUIN decide not
to obtain and/or maintain a marketing authorization in certain EU countries by
the time LEVPHARMA has successfully introduced the Product in the markets in the
U.S.A. , then the Parties agree to negotiate in good faith the expansion of the
Territory to include such EU countries where SANQUIN has not obtained and/or is
not pursuing a marketing authorization. The Parties agree that all other terms
of this Agreement shall apply to any such expansion of the Territory.
(b) SANQUIN shall have the following rights to acquire LEVPHARMA-owned
Registration(s) and/or Registration Application(s) for the Product and any
LEVPHARMA-owned authorization(s) to market the Product, in accordance with the
applicable regulations including but not limited to the FDA regulations, in the
following circumstances and according to the terms and conditions agreed to by
the Parties at such time:
i) In the event that LEVPHARMA ceases to distribute the Product in
any country of the Territory where LEVPHARMA holds a valid
Registration for the Product, SANQUIN shall have the first right of
refusal to acquire LEVPHARMA-owned Registration(s) and/or
Registration Application(s) for the Product and any LEVPHARMA-owned
authorization(s) to market the Product. The parties shall negotiate
in good faith to set the terms of such a transfer;
ii) In the event that LEVPHARMA files for bankruptcy under either
Chapter 7 or Chapter 11 of the US Federal Bankruptcy Code, SANQUIN
shall have the right to immediately assume all LEVPHARMA interests
in the Registration(s) and/or Registration Application(s) for the
Product.
Notwithstanding the above and in accordance with paragraph 1.10 of the
Agreement, SANQUIN is and remains at all time the exclusive owner of the rights
to the Technology. LEVPHARMA has no right with respect to the Technology other
than those expressly granted under this Agreement, and subject to the terms
hereof.
ARTICLE III - REGULATORY MATTERS
3.1 In General.
In connection with performing their obligations pursuant to this Agreement,
LEVPHARMA and SANQUIN shall use all commercially reasonable efforts to perform
such responsibilities diligently, with the objective of maximizing the sales
potential of the Product and promoting the therapeutic profile and benefits of
the Product in the most commercially beneficial manner. Without limiting the
generality of the foregoing, each such Party shall:
(i) collaborate and cooperate in the preparation and filing of all
Regulatory Filings and all other aspects necessary to implement this
Agreement;
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(ii) use commercially reasonable efforts to perform the work set out
for such Party to perform in this Agreement;
(iii) conduct all work pursuant to this Agreement in good scientific
manner, and in compliance in all material respects with all
requirements of applicable laws, rules and regulations, and all
other requirements of any applicable cGMP, good laboratory practice
and current good clinical practice to attempt to achieve the
objectives of this Agreement efficiently and expeditiously; and
(iv) maintain records, in sufficient detail and in good scientific
manner, which shall be complete and accurate and shall fully and
properly reflect all work done and results achieved in connection
with the Product in the form required under all applicable laws and
regulations.
3.2 Pre-approval.
(a) The Parties shall collaborate and cooperate in the preparation and filing of
all Regulatory Filings. LEVPHARMA shall be the party primarily responsible for
conducting the Clinical Study and all regulatory matters necessary to support,
prepare and file any Regulatory Filing. LEVPHARMA shall be the party primarily
responsible for preparing all Regulatory Applications necessary or desirable to
register the Product. LEVPHARMA shall be responsible for filing all Regulatory
Applications and, thereafter, to conduct all communications with the Regulatory
Authorities during the registration process. However, LEVPHARMA shall consult
extensively with SANQUIN and submit the protocol for the Clinical Study and all
documents related to such Regulatory Applications to SANQUIN for review before
submitting those to Regulatory Authorities. SANQUIN shall provide all technical
data and support necessary to assist LEVPHARMA to prepare such Regulatory
Applications. LEVPHARMA shall keep SANQUIN informed as to the status of all
efforts related to the regulatory and clinical trial process. Such information
shall comprise, but not be limited to, providing SANQUIN with copies of all
correspondence received from Regulatory Authorities as well as providing SANQUIN
with the opportunity to review any revisions to any filings with Regulatory
Authorities during their preparation. LEVPHARMA shall confer with SANQUIN
regarding the preparation of such filings and the registration process.
LEVPHARMA shall, where practicable, discuss with Sanquin any commitments to
Regulatory Authorities prior to agreeing to them. Any commitments made by
LEVPHARMA which have not been agreed to beforehand by SANQUIN will be submitted
to SANQUIN by LEVPHARMA as soon as possible afterwards and will be subject to
SANQUIN's agreement.
(b) SANQUIN shall deliver to LEVPHARMA copies of all relevant and material data,
studies and other written materials in SANQUIN's possession, relating to the
Product, or the Processing of the Product , including manufacturing information,
clinical and pre-clinical studies, and any other information required by
LEVPHARMA to make a Regulatory Filing.
7
(c) LEVPHARMA and SANQUIN shall share all the data resulting from the Clinical
Study as well as any other data of which either party may come into possession
related to the Product. The Parties agree to mutually consult with each other in
the interpretation and reporting of such data. LEVPHARMA and SANQUIN shall have
the right to use such data free of charge in reporting and up-dating files.
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3.3 Post Registration. The Parties shall collaborate and cooperate in all
regulatory matters. Specifically, all obligations and commitments as to sharing
and delivery of data as under article 3.2 above shall continue to apply.
However, LEVPHARMA shall be primarily responsible for all regulatory activities
in a country in the Territory after Registration in such country has been
obtained by LEVPHARMA, including but not limited to regulatory compliance,
worldwide safety surveillance, adverse event reporting and all other necessary
support services. LEVPHARMA shall be the party responsible to the Regulatory
Authorities for ensuring compliance of the Product Specifications with all
applicable Manufacturing Standards. However, SANQUIN shall be responsible for
compliance of the manufacturing and Processing procedures according to the
Specifications and Manufacturing Standards as defined by the Parties. Each Party
will provide reasonable assistance to the other, at no charge, if necessary to
respond to FDA or other regulatory audits, inspections, inquiries or requests
concerning the Raw Materials or Product. LEVPHARMA shall refrain from making
commitments in communications with Regulatory Authorities unless, where
practicable, such commitments have been brought to the attention of SANQUIN in
writing and discussed with SANQUIN beforehand. Any commitments made by LEVPHARMA
which have not been agreed to beforehand by SANQUIN will be submitted to SANQUIN
by LEVPHARMA as soon as possible afterwards and will be subject to SANQUIN's
agreement as described in Article VI.
3.4 Ownership. LEVPHARMA shall be responsible for obtaining Registration
approval for Product in the Territory and shall own the regulatory approvals in
the Territory. SANQUIN agrees to comply with all commitments made in any
Registration Application, having provided their input into and prior written
review of such commitments, regarding SANQUIN's manufacturing responsibilities
as described herein. SANQUIN shall be responsible for the maintenance of the
Drug Master File covering the SANQUIN Facility.
3.5 Notices Regarding Product. SANQUIN and LEVPHARMA shall each give the other
prompt notice of any information either of them receives regarding the safety of
the Raw Materials or Product, including any confirmed or unconfirmed information
on adverse, serious or unexpected events associated with the use of the Product.
For serious or unexpected events, notice must be given by telephone within one
(1) business day after receipt of the information and followed by written notice
not less than one (1) week thereafter. All responsibility, including responses
due and cost for filing any reports with the FDA or other Regulatory Authorities
concerning such reactions (including Drug Experience Reports) caused by the
Product manufactured for LEVPHARMA shall be LEVPHARMA's. SANQUIN will provide
timely assistance in responding to any complaints including reviews of Batch
records and retained samples as well as testing of Product engendering a
complaint if required, and LEVPHARMA will reimburse SANQUIN for reasonable
expense incurred therewith. The costs of such testing shall be borne by
LEVPHARMA; however, if it is determined that the Product complaint was directly
or indirectly caused by SANQUIN's failure to Process the Product in accordance
with the Specifications, or was caused by a manufacturing error or omission,
SANQUIN shall reimburse LEVPHARMA for the actual and reasonable costs of such
testing and shall defend, hold harmless and indemnify LEVPHARMA with respect to
all Claims arising therefrom or relating thereto.
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ARTICLE IV - MANUFACTURE AND SUPPLY
4.1 Supply of Product
(a) Supply for the Clinical Study. SANQUIN shall supply all Product necessary
for the Clinical Study, but limited to the maximum aggregate amount of * units,
supplies being divided in time as follows:. SANQUIN shall supply at least *
units as soon as possible after SANQUIN is able to obtain an export license for
the Product, but no later than July 1, 2005. SANQUIN shall also provide an
additional amount of Product so that a total of * units are delivered to
LEVPHARMA no later than July 1, 2005. SANQUIN shall provide an additional *
Units to LEVPHARMA by December 31, 2005. Thereafter, the Parties shall agree to
a timetable for the manufacture and delivery of the remaining * Units. SANQUIN
shall provide the Product for the Clinical Study in a form and in packaging as
required by LEVPHARMA necessary to complete the Clinical Study. Such packaging
shall include all materials needed to infuse the Product or placebo. However,
LEVPHARMA shall be responsible for identifying at least three different
FDA-approved vendors, acceptable to SANQUIN, for such materials, i.e. suitable
water for injection and all other accessories needed, and obtaining quotations
from such which vendors to be submitted to SANQUIN for SANQUIN to negotiate and
select an appropriate vendor at SANQUIN's cost. Such Product shall be supplied
by SANQUIN in accordance with the Clinical Specifications and Manufacturing
Standards as described in Section 4.1(e) below and in accordance with forecasts
provided by LEVPHARMA after the Regulatory Filing has been filed with the FDA
for said Clinical Study, which forecasts shall not exceed the delivery schedule
outlined above. SANQUIN shall invoice LEVPHARMA for the Clinical Product
according to the terms outlined in Section 5.2(a).
(b) Placebo for the Clinical Study. LEVPHARMA shall, in accordance with the
needs pursuant to the protocol for the Clinical Study, obtain suitable placebo
from a third party at LEVPHARMA's responsibility and cost. LEVPHARMA shall
provide SANQUIN with such placebo free of charge and SANQUIN shall package the
placebo in a way similar to the Product to be used in the Clinical Study, and
shall deliver the labeled and packaged placebo according to LEVPHARMA's
requirements.
(c) Commercial Supply. Commencing on the commercial launch of the Product and
thereafter during the term of this Agreement, subject to the terms and
conditions of this Section 4, SANQUIN shall supply LEVPHARMA with LEVPHARMA's
requirements for Product for commercial use in each country pursuant to this
Agreement where LEVPHARMA has Regulatory Approval. Said Product shall at all
times be ordered and supplied according to the procedures outlined in sections
4.2 and 4.3
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(i) Minimum Annual Purchase.
A) In the Calendar Year that LEVPHARMA receives Regulatory Approval
in the US, LEVPHARMA shall purchase and SANQUIN shall supply a
minimum of the Pro Rata share of * units based on the actual number
of days from when the Registration Application is approved by the
Regulatory Authorities in the United States until the end of the
year in which the approval is received.
B) Each Calendar Year thereafter, LEVPHARMA shall purchase and
SANQUIN shall supply a minimum of * units of Product.
C) Should LEVPHARMA require more than * Units per Calendar Year,
SANQUIN shall supply such additional amounts. However, SANQUIN shall
never be obliged to supply to LEVPHARMA more than * Units of Product
per Calendar Year under the terms of this Agreement.
D) The quantities mentioned under (B) and (C) above are applicable
to the Territory as defined on the Effective Date of this Agreement.
These quantities may be modified by mutual agreement of the Parties
in the event that the Territory is extended according to Sections
2.1 and/or 2.2(a).
(ii) Scale Up
SANQUIN agrees to perform an analysis of the feasibility of scaling
up the production of the Product and provide the results of this
analysis to LEVPHARMA no later than 10 months after the Clinical
Study is initiated. The parties shall then make a mutual decision on
whether or not to scale up the production of the Product (the "Scale
Up"). In the event that a Scale Up is agreed to, the Parties shall
negotiate in good faith to reach an agreement on the details of the
Scale Up. However, the following timelines should be included in any
such agreement:
o 12 months after the initial Clinical Study is initiated:
final decision on Scale Up
o 20 months after the initial Clinical Study is initiated:
clinical trial material from Scale Up is validated
o 24 months after the initial Clinical Study is initiated:
clinical trial for Scale Up Product is initiated
(clinical trial #2)
o 36 months after the initial Clinical Study is initiated:
commercial product from Scale Up is available
(d) Processing. SANQUIN, as the owner of the Technology and any improvements
thereof, shall be responsible for Processing the Product, whether by itself or
by third parties or subsidiaries, including, without limitation, CAF-DCF
cvba-scrl in Brussels, Belgium according to the applicable Commercial
Specifications and Manufacturing Standards as outlined in section 4.1(f) and
according to any and all marketing authorization(s) or product approvals in the
Territory. Said Processing shall include, without limitation, all Product
labeling and other package inserts and materials required by the applicable
Regulatory Authorities. SANQUIN shall ensure that all services, facilities and
goods used in connection with such manufacture comply with the applicable cGMPs
in effect. In the event that SANQUIN intends at any time to provide the
Commercial Supply from a facility or manufacturing process that is different
than that used to provide the Clinical Supply:
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i) SANQUIN shall obtain the consent of LEVPHARMA (which consent
shall not be unreasonably withheld) prior to making any changes.
ii) SANQUIN shall complete and bear all costs associated with
implementing said changes and performing the studies necessary to
meet any and all requirements from the Regulatory Authorities needed
to approve such change, except that LEVPHARMA shall complete and
bear the costs of any clinical trial necessary to implement said
changes.
iii) SANQUIN shall supply at their expense the Product required for
any clinical trial necessary as a result of a change in either the
facility or manufacturing process from that used to provide the
Product for the Clinical Study. It is stipulated that LEVPHARMA
shall bear the costs except for the supply of Product, for any
clinical trial required as a consequence of the Scale Up as
contemplated under 4.1(c).(ii) above or a change in the facility or
manufacturing process as described under 4.1(d).
(e) Clinical Study Specifications and Manufacturing Standards. The Product for
the Clinical Study shall be manufactured by SANQUIN according to the Clinical
Specifications and Manufacturing Standards that are attached hereto as Exhibit 1
and any amendments thereto, (the Quality Agreement.) Said Clinical
Specifications and Manufacturing Standards shall conform in all material
respects to the current process used by SANQUIN to manufacture the Product.
In addition, Parties agree to the following:
i) SANQUIN will use its reasonably best commercial efforts to
obtain an export license prior to September 1, 2004. Should
SANQUIN fail to obtain such a license by September 2004,
SANQUIN shall not bear any liability to LEVPHARMA under the
terms of this Agreement.
ii) SANQUIN will not be required to fulfill its obligations to
supply product until such a license is obtained.
iii) Both parties will cooperate fully to obtain an export license
as soon as possible.
iv) In the event that SANQUIN fails to obtain such a license prior
to September 1, 2005, Parties shall terminate this Agreement
without any Party bearing any liability to the other party
under the terms of this Agreement.
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(f) Commercial Specifications and Manufacturing Standards. The Commercial
Product shall be manufactured by SANQUIN at the same location and according to
the same manufacturing process as that used to produce the Product for the
Clinical Study unless otherwise agreed to by the Parties according to Section
4.1(d) above. LEVPHARMA and SANQUIN shall cooperate in good faith and shall,
upon the written agreement of the Parties, up-date where necessary the Quality
Agreement to reflect the Commercial Specifications and Manufacturing Standards
for this Agreement. The Parties agree that the Commercial Specifications and
Manufacturing Standards for this Agreement shall conform to any requirements
from the FDA or any other Regulatory Authorities where the Product is either
subject to Registration or under review for Registration and, to the extent
practicable, to the specifications and standards applicable to SANQUIN's current
manufacturing process for the Product. The Parties agree that the aggregate cost
for upgrading the SANQUIN facilities and procedures specifically needed for the
Manufacturing Standards shall not be more than * euros. This limitation shall
only reflect any changes specifically requested by the FDA and does not include
any changes made at the request of any other Regulatory Authority. In the event
that the aggregate cost for this up-grade to FDA-compliance would exceed *
euros, Parties shall either come to an agreement where LEVPHARMA bears the
additional cost or Parties shall terminate the Agreement without any Party
bearing any liability to the other Party under the terms of this Agreement.
4.2 Forecasts. Commencing 6 months prior to the anticipated commercial launch of
the Product in any country where LEVPHARMA has the right to distribute the
Product, LEVPHARMA shall provide SANQUIN with a non-binding, good faith rolling
forecast of estimated quantities in international units (or any other
measurement agreeable to both Parties) and anticipated delivery schedules for
Product for the following 12-month period by calendar quarters. Such forecasts
shall be revised and updated quarterly (the "Quarterly Forecast").
4.3 Orders for Product.
(a) Together with each forecast provided under Section 4.2, LEVPHARMA shall
place its firm order on a quarterly basis with SANQUIN, setting forth units (or
any other measurement agreeable to both Parties), delivery dates and shipping
instructions with respect to each shipment of Product for delivery. LEVPHARMA's
orders shall be made pursuant to Purchase Orders which are in a form mutually
acceptable to LEVPHARMA and SANQUIN, to the extent that such form is not
inconsistent with the terms of this Agreement.
(b) SANQUIN shall not be obligated to accept any order to the extent the
quantity of Product ordered exceeds 125% of the average of the last Quarterly
Forecast and the quantity contained in the actual Purchase Order for the Quarter
immediately preceding the current Quarter. Not withstanding the foregoing
limitations, SANQUIN shall use commercially reasonable efforts to fill such
orders for such excess quantities from available supplies. SANQUIN shall use all
commercially reasonable efforts to notify LEVPHARMA within ten days after
receipt of an order of SANQUIN's ability to fill any amounts of such orders in
excess of the quantities that SANQUIN is obligated to supply. LEVPHARMA shall
notify SANQUIN as soon as possible of an increase in LEVPHARMA's requirements
for Product materially in excess of the limits set forth herein. However, the
quantity of Product delivered by SANQUIN to LEVPHARMA shall never be higher than
the * quantity listed in Section 4.1(c)(i).
13
(c) In the event that LEVPHARMA submits any order for Product for less than the
75% of the average of the last two Quarterly Forecasts for that particular
quarter, SANQUIN nevertheless shall have the right to supply and ship to
LEVPHARMA (in accordance with the shipping instructions most recently supplied
by LEVPHARMA) 75% of the average of the last two Quarterly Forecasts, and
LEVPHARMA shall have the obligation to purchase and accept from SANQUIN, such
minimum quantity of Product. LEVPHARMA shall notify SANQUIN as soon as possible
of a decrease in LEVPHARMA's requirements for Product materially below the
limits set forth herein. In the event of such a decrease, SANQUIN shall use all
commercially reasonable efforts, but shall not be required, to reduce
accordingly. However, the quantity of Product delivered by SANQUIN to LEVPHARMA
shall never be lower than the * quantity listed in Section 4.1(c)(i).
4.4 Delivery. SANQUIN shall ship the Product "F.O.B., Amsterdam" and in
accordance with LEVPHARMA's written instructions as detailed on the Purchase
Order. For purposes of this Agreement, delivery of Product by SANQUIN to
LEVPHARMA shall be deemed to have taken place upon delivery to the
LEVPHARMA-designated destination identified in the Purchase Order.
4.5 Title. Title to all work in process to produce Product, and all completed
Product, shall remain in SANQUIN until delivery of Product to LEVPHARMA as
described in Section 4.4, thereafter title to Product shall transfer to
LEVPHARMA.
4.6 Conformity; Specifications; Quality Control
(a) All quantities of Product supplied by SANQUIN pursuant to this Section 4
will comply in all material respects with the Specifications and Manufacturing
Standards and shall adhere in all material respects to all applicable
governmental laws and regulations relating to the manufacture, packaging, sale,
storage, and shipment of each shipment of Product at the time it is shipped by
SANQUIN hereunder.
(b) SANQUIN shall conduct, or cause to be conducted, quality control testing of
Product prior to shipment, in accordance with the Specifications and applicable
Manufacturing Standards as are in effect from time to time and such other
quality control testing procedures adopted either by SANQUIN or LEVPHARMA from
time to time (collectively, the "Testing Methods"). The Testing Methods shall
include all FDA required release testing and SANQUIN shall undertake all such
tests. SANQUIN shall retain records pertaining to such testing. Each shipment of
Product hereunder shall be accompanied by a certified quality control protocol
and certificate of analysis for each Batch of Product therein as well as such
customs and other documentation as is necessary or appropriate.
4.7 Acceptance/Rejection. After receipt of a shipment of Product, including
documentation as under 4.6 (b) above, LEVPHARMA shall have sixty (60) days to
accept or reject the Product. Any such rejection should be based on a documented
deviation from the Master Batch Record and shall be handled as hereafter set
forth in Section 4.8.
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4.8 Rejection Procedures.
(a) Should LEVPHARMA reject any Batch pursuant to Section 4.7, and SANQUIN
agrees that such rejection was justified, SANQUIN shall promptly credit
LEVPHARMA's account as the invoice with respect to the Batch so rejected will
have been paid by that time by LEVPHARMA by virtue of article 5.3.
(b) Should LEVPHARMA reject any Batch pursuant to Section 4.7, and should
SANQUIN, after good faith negotiation, fail to agree that such rejection was
justified, the Parties shall each appoint an independent third party and these
two independent third parties shall select a qualified third independent third
party to test samples of such Batch and to review any pertinent Working Batch
Record and other relevant information developed by both Parties relating thereto
to ascertain the validity of the rejection. The findings of such third party
shall be binding upon both Parties. If the Product is found to meet the
Specifications in all material respects, LEVPHARMA shall pay the costs of such
tests and shall be deemed to have accepted the Product. If the Product is found
not to meet Specifications in any material respect, SANQUIN shall pay the costs
of such tests and shall promptly credit LEVPHARMA's account.
(c) Upon SANQUIN's receipt of a claim that a shipment or Batch thereof of
Product does not meet the Specifications and/or applicable Manufacturing
Standards, SANQUIN shall use commercially reasonable efforts to replace such
shipment or Batch thereof with an additional shipment of Product that does
conform to such standards as soon as practicable.
4.9 Inventory Management. SANQUIN shall maintain an inventory of Product in
accordance with SANQUIN's usual and customary inventory management practices
that SANQUIN applies to its other therapeutic products, but sufficient to
satisfy the requirements of Section 4.1 and 4.3(b) hereof.
4.10 Shortage of Supply.
(a) SANQUIN shall notify LEVPHARMA: (i) as promptly as possible, but in no event
more than ten days after SANQUIN's receipt of a firm order from LEVPHARMA as
provided in Section 4.3, or (ii) immediately upon becoming aware of SANQUIN's
inability to supply the quantity of Product to LEVPHARMA that SANQUIN is
required to supply hereunder, SANQUIN's inability to supply such quantities of
Product. In such event, SANQUIN shall implement all commercially reasonable
efforts to remedy such shortage.
(b) In the event of SANQUIN's inability to supply both LEVPHARMA's requirements
of Product and SANQUIN's other requirements, including any third party
requirements as of the date of this Agreement, for the Product due to force
majeure or otherwise, SANQUIN shall allocate the Product that SANQUIN has in
inventory and that SANQUIN is able to produce among the quantities of all such
requirements, so that LEVPHARMA receives at least its proportionate share of
such available supplies, as determined from purchase orders and where purchase
orders are not in place, from the Quarterly Forecasts, for the Product.
15
4.11 Inability to Supply.
(a) An "Inability to Supply" shall mean with respect to the supply of Product
for commercial sales, SANQUIN's failure for any reason other than force majeure
reasons as defined in Article XXI, to supply LEVPHARMA with quantities of
Product meeting the Specifications and Manufacturing Standards equal to at least
75% of the average of the last two Quarterly Forecasts for any particular
quarter.
(b) LEVPHARMA and SANQUIN agree that an Inability to Supply by SANQUIN will
result in damages to LEVPHARMA, and that the actual damage sustained by
LEVPHARMA would be difficult to ascertain. The Parties agree that in the event
of any such Inability to Supply, SANQUIN shall pay to LEVPHARMA an amount
calculated according to the formula in section 4.11(g) as liquidated damages and
not as a penalty.
(c) A "Short-Term Inability to Supply" is an Inability to Supply that is
reasonably expected to continue for no more than a three-month period of time.
(d) A "Long-Term Inability to Supply" shall mean any Inability to Supply that is
reasonably expected to exceed or actually exceeds a three-month period of time.
(e) In the event that LEVPHARMA believes that a Short-Term Inability to Supply
exists, LEVPHARMA shall provide SANQUIN with written notice of such claim.
SANQUIN shall either (i) agree with LEVPHARMA's claim and pay to LEVPHARMA the
liquated damages as outlined in Section 4.11 (g)(i) hereto; or (ii) provide a
written response to LEVPHARMA that outlines SANQUIN's intention to make up the
shortage of supply in the next quarterly delivery. In the event that SANQUIN
fails to actually make up the shortage of supply in the following quarter,
LEVPHARMA shall have the right to collect the liquidated damages outlined in
Section 4.11 (g)(i) hereto.
(f) In the event that LEVPHARMA believes that a Long-Term Inability to Supply
exists, LEVPHARMA shall provide SANQUIN with written notice of such claim and
SANQUIN shall either (i) agree with LEVPHARMA's claim; or (ii) provide
sufficient and credible evidence to LEVPHARMA that such claim is false. In the
event that SANQUIN agrees with LEVPHARMA's claim, or is unable to provide such
evidence to refute it, or more than six months of an Inability to Supply have
passed, LEVPHARMA shall have the right to immediately terminate this Agreement
as well as collect the liquidated damages outlined below.
(g) The liquidated damages shall be calculated according to the formulas listed
below and payable to LEVPHARMA for each quarter where either a Short-Term or
Long Term Inability to Supply exists.
i) Short-Term Inability to Supply:
16
SANQUIN shall pay to LEVPHARMA a sum equal to ((75% of the average
volume (in Units) for the last two Quarterly Forecasts for that
particular quarter) - (actual volume (in Units) actually supplied by
SANQUIN for that particular quarter)) X ($*), except that no damages
will be payable by SANQUIN to LEVPHARMA if the minimum amount (at
least 75% of the average of the last two Quarterly Forecasts for the
current quarter plus an amount equal to the shortage from the
previous quarter) is provided by SANQUIN to LEVPHARMA in the current
quarter.
ii) Long-Term Inability to Supply:
A) For each quarter in which a Long-Term Inability to Supply
exists, SANQUIN shall pay to LEVPHARMA a sum equal to the
average of the last two quarterly liquidated damages payments,
except that SANQUIN shall have the right to terminate the
Agreement after a Long-Term Inability to Supply exists for a
period of at least four (4) continuous quarters.
B) In the event that LEVPHARMA exercises its right to
terminate the Agreement under Section 4.11(f), SANQUIN shall
pay to LEVPHARMA a sum equal to 4 times the average of the
last two quarterly liquidated damages payments.
For any liquidated damages payments to be made by SANQUIN under this
article 4.11, LEVPHARMA shall submit written evidence (e.g. copies
of invoices received by LEVPHARMA for supply of product by third
parties) to SANQUIN of the actual damages incurred as a result of
the Inability to Supply. If the actual damages to LEVPHARMA are less
than those calculated according to the formula listed above, then
SANQUIN shall only be liable for the actual documented damages
incurred by LEVPHARMA as evidenced by the written submission by
LEVPHARMA.
ARTICLE V - PAYMENT
5.1 Purchase Price. The Purchase Price for Product supplied by SANQUIN to
LEVPHARMA pursuant to this Agreement shall be euro */Unit plus an additional
amount to cover SANQUIN's actual cost for insurance for any country where
SANQUIN is supplying Product to LEVPHARMA under this Agreement that is not
already covered under its current insurance policy. This Purchase Price of euro
*/Unit reflects an anticipated price to be paid by SANQUIN for the purchase of
recovered plasma from USA collection centers of * euro per liter. Upon written
proof by SANQUIN that it has paid a higher price for this recovered plasma from
USA collection centers, the purchase price shall be enhanced. This enhancement
of the Purchase Price per Unit shall be calculated according to the following
formula: {(actual price paid by SANQUIN per liter of USA recovered plasma in
euro - * euro) X (* euro)} + * euro. However, not withstanding the foregoing,
the total Purchase Price (including all costs, but excluding amendments as under
a) and/or b) below) shall under no circumstances exceed euro */Unit. Such
Purchase Price shall be amended as follows:
17
a) yearly, starting January 1st 2005, with a percentage equal to the increase or
decrease in the Dutch consumer price index.
b) as agreed to by both parties through good faith negotiations in the event of
a significant change in Processing as a result of Product improvement or
regulatory requirements.
5.2 Invoices.
a) Product supplied for the Clinical Study. SANQUIN shall invoice LEVPHARMA for
the Purchase Price for all Product supplied for the Clinical Study according to
the terms contained in Section 5.1. SANQUIN agrees to provide a loan to
LEVPHARMA in the amount of the Purchase Price for each invoice for Product
supplied for the Clinical Study, and LEVPHARMA agrees to provide a purchase
money security interest to SANQUIN in the Product supplied for the Clinical
Study for each shipment of such Product. Upon Regulatory Approval in the US,
SANQUIN shall credit LEVPHARMA's account for the entire cost of the Clinical
Product, and shall provide a release of any and all security interests granted
by LEVPHARMA.
b) Commercial Product. SANQUIN shall invoice LEVPHARMA for the Purchase Price
for all Commercial Product after each SANQUIN Approval Date. All invoices shall
be due and payable within thirty (30) calendar days after receipt of the Product
by LEVPHARMA. If LEVPHARMA disagrees for any reason with the amount of an
invoice submitted by SANQUIN, LEVPHARMA shall notify SANQUIN in writing of such
disagreement within thirty (30) calendar days of receipt of such invoice, and
the Parties shall promptly attempt to resolve the difference. SANQUIN shall
reference LEVPHARMA's Purchase Order on all invoices.
ARTICLE VI - TERMS AND CONDITIONS
6.1 Processing, Changes to Processing. SANQUIN shall perform services under this
Agreement in compliance with current Good Manufacturing Practices, the SANQUIN
standard operating procedures in effect as of the date of this Agreement,
including any written revisions as may later be required by either party, and
the Specifications and Manufacturing Standards as described in Sections 4.1(d)
and (e). SANQUIN shall not implement any changes, material or otherwise,
relating to the Product or its Process procedures without first obtaining the
written approval of LEVPHARMA, which approval shall not be unreasonably
withheld. A change is defined as any variation in the written procedures
currently in place that (a) impacts the regulatory commitments for the Product,
(b) may require revalidation, (c) may affect the quality, purity, identity or
strength of the Raw Materials or Product, or (d) would necessarily result in
changing, altering or modifying the Specifications, Manufacturing Standards,
Test Methods, sampling procedures, validation procedures or Master Batch Record
relating to the Product.
18
6.2 Modifications to Specifications and Manufacturing Standards. LEVPHARMA will
advise SANQUIN in writing of any proposed modifications to the Specifications
and Manufacturing Standards. Upon written acceptance of said modifications,
SANQUIN shall immediately implement the modified documents and procedures
pertinent to the modified Specifications and Manufacturing Standards. Similarly,
SANQUIN shall advise LEVPHARMA in writing of any proposed or required changes in
procedures prior to their implementation.
6.3 Adherence to Specifications and Manufacturing Standards. SANQUIN warrants
that each Product shall be Processed in accordance with the Specifications and
Manufacturing Standards for such Product and shall be Processed in accordance
with applicable regulations of the FDA and applicable Regulatory Authorities in
the other countries in which such Product is approved for commercial sale and in
accordance with the Drug Master File (DMF) pertaining to the SANQUIN facility.
SANQUIN shall provide to LEVPHARMA such information as LEVPHARMA may require
with respect to the facility and the Process in connection with LEVPHARMA or its
licensees or distributors obtaining Regulatory Approval for commercial sale of
the Product.
6.4 Inspection by LEVPHARMA. SANQUIN shall permit LEVPHARMA representatives to
enter SANQUIN's facility upon reasonable notice and at reasonable intervals
during regular business hours for the purpose of making quality control
inspections of the facilities used in manufacturing, receiving, sampling,
analyzing, storing, handling, packaging, and shipping of the Raw Materials and
Product as LEVPHARMA may reasonably request. LEVPHARMA shall also have the right
to have suitable representatives present in SANQUIN's plant to observe the
Processing of the Product, storing, and shipping processes relevant to the
Product.
ARTICLE VII - CONFIDENTIAL INFORMATION
7.1 Mutual Confidentiality. Except to the extent expressly authorized by this
Agreement, during the term of this Agreement and for a period of five (5) years
following the expiration or termination of this Agreement, neither Party shall:
(a) Disclose, publish or make available any Proprietary Information
disclosed to it by the other to any third party, including employees
who do not need to know or have access to such Proprietary
Information. Proprietary Information shall mean information which
contains trade secrets or know-how or commercial or financial
information which is privileged or confidential.
(b) Sell, transfer or otherwise use or exploit any such Proprietary
Information disclosed to it by the other Party.
(c) Knowingly permit the sale, transfer, use or exploitation by a
third party of any such Proprietary Information disclosed to it by
the other Party which may have been disclosed to such third party,
including employees who do not need to know or have access to such
Proprietary Information.
19
Proprietary Information shall not be deemed to include information that:
(i) is or becomes known publicly through no fault of the receiving
party;
(ii) is learned by the receiving party from a third party entitled
to disclose it;
(iii) is developed by the receiving party independent of the
information obtained from the disclosing party as shown by the
receiving party's written records;
(iv) is already known to the receiving party before disclosure by
the disclosing party, as shown by prior written records; or
(v) is released with the prior written consent of the disclosing
party.
7.2 Publicity. During the term of this Agreement, neither Party shall make any
press release or other disclosure of the terms of this Agreement without the
prior written consent of the other Party, except as required by a court of
competent jurisdiction and pursuant to the disclosure requirements of Regulatory
Authorities, including the Securities and Exchange Commission.
7.3 Disclosures. Notwithstanding the provisions of Section 7.1 hereof, SANQUIN
and LEVPHARMA may, to the extent necessary, disclose and use Proprietary
Information (a) for the purpose of securing institutional or government approval
to clinically test or market any Product, (b) to the extent necessary or useful
to commercialize any Product if such Proprietary Information is disclosed in a
manner that preserves the confidentiality thereof upon terms reasonably
equivalent to those set forth herein; provided, however, that in each such
instance any such disclosure shall be made to persons which either have agreed
to be bound by or are already subject to a duty of confidentiality, for the
benefit of a party hereto, substantially the same as that set forth in Section
7.1 hereof, wherever reasonably possible.
ARTICLE VIII - WARRANTIES AND REPRESENTATIONS
8.1 Warranties and Representations of SANQUIN. SANQUIN represents and warrants
to LEVPHARMA that:
i) SANQUIN is a not-for-profit organization validly existing under
the laws of the Netherlands and has all necessary power to enter
into and perform its obligations under this Agreement;
ii) The execution, delivery and performance of this Agreement by
SANQUIN has been duly authorized and approved by all necessary
action and the Agreement is binding upon and enforceable against
SANQUIN in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws and general
principles of equity;
iii) all quantities of product delivered to LEVPHARMA shall be
manufactured, tested, and released in compliance with cGMP and the
Specification and Manufacturing Standards; and
iv) any document provided to LEVPHARMA concerning the Product, the
Master Batch Record or the Working Batch Record is to the knowledge
of SANQUIN, accurate.
20
8.2 Warranties and Representations of LEVPHARMA. LEVPHARMA represents and
warrants to SANQUIN that:
i) LEVPHARMA is a corporation validly existing under the laws of the
state of Delaware and has all necessary power to enter into and
perform its obligations under this Agreement; and
ii) the execution, delivery and performance of this Agreement by
LEVPHARMA has been duly authorized and approved by all necessary
corporate action and the Agreement is binding upon and enforceable
against LEVPHARMA in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar laws and
general principles of equity.
iii) for the entire period the Product is in possession and under
the responsibility of LEVPHARMA, i.e. as from the time the Product
is shipped by SANQUIN "F.O.B., Amsterdam", until such time the
Product has been successfully distributed, marketed, offered for
sale, sold and/or imported by LEVPHARMA to a third party, user of
the Product, LEVPHARMA shall comply with the mutually agreed upon
HANDLING SPECIFICATIONS.
ARTICLE IX INDEMNIFICATION AND INSURANCE
9.1 Indemnification by LEVPHARMA. LEVPHARMA shall defend, indemnify and hold
harmless SANQUIN, its officers, agents, employees and Affiliates from any loss,
claim, action, damage, expense or liability (including defense costs and
attorneys' fees) ("CLAIM") arising out of or related to the breach of any
representation or warranty made by LEVPHARMA, except to the extent that the
Claim is based on, arises out of, or is due to the failure of SANQUIN to Process
the Product in accordance with the Specifications or the Manufacturing
Standards, an error or omission in the Processing of the Product, the gross
negligence or willful misconduct of, or breach of this Agreement by, SANQUIN or
its officers, agents, employees or Affiliates. SANQUIN shall promptly notify
LEVPHARMA of any such claim coming to its attention and will cooperate with
LEVPHARMA in the defense of such claim. If any such claims or causes of action
are made, SANQUIN shall be defended by counsel selected by LEVPHARMA, subject to
SANQUIN's approval, which shall not be unreasonably withheld. SANQUIN reserves
the right to be represented by its own counsel at its own expense.
9.2. Indemnification by SANQUIN. SANQUIN shall defend, indemnify and hold
harmless LEVPHARMA, its officers, agents, employees and Affiliates from any
Claim, arising out of or related to the breach of any representation or warranty
made by SANQUIN herein, SANQUIN's negligence or misconduct, the failure to
Process the Product in accordance with the Specifications and the Manufacturing
Standards, infringement of any third party's intellectual property relating to
the manufacturing, importing, use or sale of the Product, or an error or
omission in the Processing of the Product, except to the extent that the Claim
is based on, arises out of, or is due to the gross negligence or willful
misconduct of, or breach of this Agreement by, LEVPHARMA or its officers,
agents, employees or Affiliates. LEVPHARMA shall promptly notify SANQUIN of any
such claim coming to its attention and will cooperate with SANQUIN in the
defense of such claim. If any such claims or causes of action are made,
LEVPHARMA shall be defended by counsel selected by SANQUIN, subject to
LEVPHARMA's approval, which shall not be unreasonably withheld. LEVPHARMA
reserves the right to be represented by its own counsel at its own expense.
21
9.3 Insurance. LEVPHARMA and SANQUIN each represent that they are sufficiently
self-insured or insured against any liability arising under this Article IX. The
Parties have agreed to include in the Product price the cost of liability
insurance for SANQUIN's US obligations under this Agreement. SANQUIN shall
obtain liability insurance, including coverage for indirect damages, as follows:
Clinical Study Supply: a minimum of * EURO per occurrence, * EURO
aggregate;
Commercial Supply: a minimum of * EURO per occurrence, * EURO
aggregate.
In the event that SANQUIN is unable, through the exercise of all commercially
reasonable efforts as documented through SANQUIN's records, to obtain liability
insurance for its US obligations under this Agreement under commercially
reasonable terms, whereby it is to be understood that liability insurance will
only be considered as having been obtained under commercially reasonable terms
if the actual cost for said insurance under this Agreement will not exceed *
EURO per year in total, SANQUIN shall initiate the following procedure:
i) SANQUIN shall provide written notice to LEVPHARMA of its
inability to obtain liability insurance for its US obligations under
this Agreement under commercially reasonable terms;
ii) SANQUIN shall cooperate with LEVPHARMA, at LEVPHARMA's request,
in obtaining liability insurance for SANQUIN's US obligations under
this Agreement under commercially reasonable terms.
iii) In the event that SANQUIN remains unable to obtain liability
insurance for its US obligations under this Agreement under
commercially reasonable terms for a period longer than six (6)
months from the date of its notification to LEVPHARMA under Section
9.3 (i), SANQUIN shall have the right to terminate this Agreement.
iv) In the event SANQUIN uses its right to terminate the Agreement,
in execution of the provisions of Section 9.3 (iii), neither Party
shall be liable to the other Party as a consequence of such
termination.
9.4 Limitation.
(a) First Party Liability. LEVPHARMA and SANQUIN accept and agree that in the
event one party is required to indemnify the other party for any liability
arising under this Article IX, and in accordance with the provisions under this
Article IX, that this one party shall only be required to indemnify the other
party for (i) direct damages, and (ii) damages linked and/or related directly to
the recall and/or withdrawal of any Product, subject to the provisions of
Article X of this Agreement. LEVPHARMA and SANQUIN explicitly accept and agree
that under no circumstance, within the scope of the present contractual
relationship between both parties, shall one party be required to indemnify the
other party for punitive damages, pain and suffering, and loss of compensation,
arising out or related to the breach of any representation, warranty or other
contractual obligation by one or the other party.
22
(b) Third Party Liability to Distributors. In the event a third party
distributor (excluding a third party consumer) asserts a Claim against LEVPHARMA
for: (i) damages caused by a defective Product (including damages caused by a
hidden defect), or (ii) damages resulting from the negligence of SANQUIN, and
except to the extent that such Claim is based on the failure of LEVPHARMA to
comply with the Handling Specifications, SANQUIN will assume full and sole
liability for all indirect damages, provided, however, that in no circumstance
shall such liability exceed the policy limits for SANQUIN's insurance as stated
in Section 9.3.
(c) Third Party Liability to Consumers of the Products. In the event a third
party consumer asserts a Claim against LEVPHARMA for: (i) damages caused by a
defective Product (including damages caused by a hidden defect), or (ii) damages
resulting from the negligence of SANQUIN, and except to the extent that such
Claim is based on the failure of LEVPHARMA to comply with the Handling
Specifications, SANQUIN will assume full and sole liability for all direct and
indirect damages resulting therefrom.
ARTICLE X - RECALLS AND WITHDRAWALS
10.1 Implementation. If any Product must be recalled or withdrawn by reason of
failure to meet any applicable Specifications, Manufacturing Standards,
requirements of the FDA or any other applicable Regulatory Authority or any
other requirements of law, LEVPHARMA shall have the sole responsibility to
effect the recall or withdrawal of the Product. SANQUIN shall cooperate as
reasonably required in LEVPHARMA's efforts, and shall notify LEVPHARMA if it is
determined by SANQUIN that such a recall or withdrawal is warranted based on
SANQUIN's quality control findings.
10.2 Costs. LEVPHARMA shall reimburse SANQUIN for any costs reasonably expended
by SANQUIN to effect the recall or withdrawal, unless the reason for the recall
or withdrawal is due to SANQUIN's failure to Process the Product in accordance
with the Specifications and the Manufacturing Standards, a manufacturing error
or omission, or the negligence of SANQUIN. In such case, SANQUIN shall reimburse
LEVPHARMA for any costs reasonably expended to effect the recall or withdrawal.
ARTICLE XI - RECORDS AND AUDITS
11.1 Maintenance of Records. During the term of this Agreement and for ten (10)
years or such other period required by the Regulatory Authorities after the
expiration date of any particular Batch of Product manufactured by SANQUIN for
LEVPHARMA, SANQUIN shall maintain records and samples relating to such Batch(es)
sufficient to substantiate and verify its duties and obligations hereunder,
including but not limited to records of orders received, Raw Materials provided
including the source and donor information of the human plasma, Product
manufactured, work in progress, validation reports, Processing analyses and
quality control tests, and the like.
23
11.2 Audits. LEVPHARMA shall be responsible for all obligations under the
regulations of all applicable Regulatory Authorities, except for routine
stability testing and sample retention. Stability testing shall be included in
the Cost of Manufacturing. LEVPHARMA shall immediately inform SANQUIN of all FDA
or other regulatory audits pertinent to LEVPHARMA's Raw Materials, Product or
Specifications. LEVPHARMA shall inform SANQUIN in advance of planned FDA or
other regulatory audits as soon as the schedule therefor is known. LEVPHARMA
shall provide SANQUIN with copies of any regulatory letters or other documents
issued by the FDA or other Regulatory Authorities in connection with the audit
or inspection within five (5) days of LEVPHARMA's receipt of such a document.
11.3 Review of Records. SANQUIN shall allow LEVPHARMA representatives, upon
reasonable notice and at reasonable intervals during normal business hours, to
enter SANQUIN's plant for the purpose of taking inventories. SANQUIN shall
further allow LEVPHARMA representatives, upon reasonable notice and at such
intervals as may be reasonably necessary, to examine and copy the records
referenced in Section 11.1 and test the samples according to the procedures
outlined in the Quality Agreement as referenced in Section 4.1(f) during normal
business hours for product liability, regulatory and quality control purposes.
ARTICLE XII - TERM AND TERMINATION
12.1 Term. Subject to the termination provisions of Sections 4.11, 9.3 and 12.2,
the initial term of this Agreement shall commence as of the Effective Date and
end on December 31, 2007. The parties hereby agree to the following:
a) LEVPHARMA shall have the absolute right to extend the term of this Agreement
for up to six (6) years in two (2) 3 -year periods upon the written notification
by LEVPHARMA to SANQUIN of its intention to do so no later than 6 months before
the Agreement or an extension of the Agreement terminates.
b) This Agreement may be extended by the mutual written agreement of the parties
at any time prior to its expiration .
12.2 Termination.
Either Party shall have the right to terminate this Agreement in case LEVPHARMA
does not obtain FDA approval for the Clinical Development Plan or secures the
support of a Clinical Research Organization to conduct the Clinical Study as
defined in the Clinical Development Plan before December 31, 2004. LEVPHARMA
shall use its best efforts in order to endeavor to obtain FDA approval for the
Clinical Development Plan before December 31, 2004. SANQUIN shall assist and
cooperate fully with LEVPHARMA in LEVPHARMA's efforts to obtain approval before
December 31, 2004 .
24
In addition, each Party shall have the right to terminate this Agreement by
giving the other Party written notice if:
(a) the other Party fails to perform or violates any material
provision of this Agreement in any material respect, and such
failure continues unremedied for a period of thirty (30) days after
the date the notifying Party gives written notice to the defaulting
Party with respect thereto;
Parties unconditionally agree that the following events are
certainly to be considered and understood as a failure to perform
with or a violation of a material provision of this Agreement in any
material respect, which, in case such failure continues unremedied
for a period of ninety (90) days after the date the notifying Party
gives written notice to the defaulting Party with respect thereto,
gives the notifying Party the right to terminate this Agreement
under the provisions of this article 12.2 (a).
(i) LEVPHARMA after receiving complete and timely support and
cooperation from SANQUIN fails to complete the enrollment (to be
interpreted here as "last patient out") of the Clinical Study within
18 months of its initiation, or
(ii) LEVPHARMA after receiving complete and timely support and
cooperation from SANQUIN fails to submit the BLA in the USA within
12 months of completion of the Clinical Study; or
(iii) LEVPHARMA fails to obtain marketing approval in the USA within
18 months of submitting the BLA; or
(iv) LEVPHARMA fails within a period of 12 consecutive months, for
whatever reason, to settle and pay three (3) invoices for Commercial
Product issued by SANQUIN, within the contractual due date set out
in Section 5.2 b) of this Agreement; or
(v) LEVPHARMA fails to make payments pursuant to the licensing
agreement which may be entered into between LEVPHARMA and the
Sanquin Blood Foundation as contemplated by the Option Agreement
between LEVPHARMA and the Sanquin Blood Foundation dated as of 9/23,
2003. In the event that LEVPHARMA is in payment default of this
license agreement, SANQUIN shall notify LEVPHARMA of such payment
default by written notice and LEVPHARMA shall have a period of
thirty (30) days after the date of notice to remedy the payment
default; or
(vi) LEVPHARMA fails to comply with the provisions of Section 4.1
(c) of this Agreement, which sets out the minimum annual purchase of
units of Commercial Product by LEVPHARMA from SANQUIN; or
(vii) SANQUIN fails to cooperate with LEVPHARMA or any Regulatory
Authority or supply material to LEVPHARMA, the consequences of which
are that LEVPHARMA fails to meet any of the milestones enumerated in
section 12.2 (a) (i) or (ii).
or
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(b) the other Party is declared insolvent or bankrupt by a court of
competent jurisdiction, or a voluntary petition of bankruptcy is
filed in any court of competent jurisdiction by the other Party, or
the other Party makes or executes any assignment for the benefit of
creditors, or a receiver is appointed to control the business of the
other Party; or
(c) the FDA orders that SANQUIN cease Processing Product for the US
market.
This Agreement shall terminate immediately upon the giving of notice of
termination pursuant to this Section 12.2. Neither Party shall be liable to the
other Party as a consequence of termination pursuant to this Section 12.2.
ARTICLE XIII - TRADEMARKS AND LABELING
13.1. Prohibitions. SANQUIN shall not affix to the Product, or any packaging
thereof, any label, stamp or other xxxx identifying SANQUIN as the source of the
Product except as may be required by applicable laws or regulations.
13.2 Use by SANQUIN. Nothing contained herein shall give SANQUIN any right to
use any LEVPHARMA copyright or trademark, and SANQUIN shall not obtain any
right, title, or interest in any LEVPHARMA trademark by virtue of this Agreement
or its performance of services hereunder.
ARTICLE XIV - RELATIONSHIP OF PARTIES
It is not the intent of the Parties hereto to form any partnership or joint
venture. Each Party shall, in relation to its obligations hereunder, act as an
independent contractor, and nothing in this Agreement shall be construed to give
such party the power or authority to act for, bind or commit the other Party in
any way whatsoever.
ARTICLE XV - WARRANTIES
Other than as expressly set forth elsewhere in this Agreement, neither LEVPHARMA
nor SANQUIN shall be liable for direct, indirect, special, incidental or
consequential damages (including loss of profits) whether based on contract,
tort or any other legal theory.
ARTICLE XVI - ASSIGNMENT AND DELEGATION
This Agreement shall be binding upon and inure to the benefit of the Parties,
their successors and permitted assigns. Neither Party may assign this Agreement
without the prior written consent of the non-assigning Party, which shall not be
unreasonably withheld.
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In addition, Parties agree to the following:
i) Prior to LEVPHARMA entering into any agreement to merge, be
acquired or sell substantially all of its assets to another company,
SANQUIN shall have the right to conduct due diligence to establish
that said company is not to be considered as a Competitor.
ii) LEVPHARMA shall not enter into any agreement to merge, be
acquired or sell substantially all of its assets with a Competitor
of SANQUIN without the prior written consent of SANQUIN, which shall
not be unreasonably withheld.
ii) LEVPHARMA agrees that any transferee or assignee of this
Agreement from LEVPHARMA shall be bound by and subject to all of the
terms and conditions of this Agreement.
ARTICLE XVII - GOVERNING LAW
This Agreement shall be governed by and interpreted in accordance with the UN
Convention on contracts for the international sale of goods (Vienna, 1980), to
the extent that the provisions of said Convention are consistent with the
provisions of the Agreement. Issues not covered by said Convention will be
governed by and interpreted in accordance with the laws of the Netherlands.
ARTICLE XVIII - MEDIATION AND ARBITRATION
Both Parties agree that they shall attempt to resolve any dispute arising from
this Agreement through mediation. Both Parties agree that at least one LEVPHARMA
representative, capable of negotiating an agreement on behalf of LEVPHARMA,
shall, within three weeks of receipt of written notification of a dispute, meet
with at least one representative of SANQUIN who is capable of negotiating an
agreement on behalf of SANQUIN. If no agreement can be reached, both Parties
agree to meet again within a four week period after the initial meeting to
negotiate in good faith to resolve the dispute. Such meetings may take place at
the principle offices of either Party, or at a location mutually agreeable to
both Parties. The Parties agree to alternate such meeting places and times
between the US and Europe. If no agreement can be reached after this second
meeting, both Parties agree to submit the dispute to binding arbitration under
the Rules of the American Arbitration Association before a three-arbitrator
panel.
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ARTICLE XIX - WAIVER
A failure by one of the Parties to this Agreement to assert its rights for or
upon any breach or default of this Agreement shall not be deemed a waiver of
such rights nor shall any such waiver be implied from acceptance of any payment.
No such failure or waiver in writing by any one of the Parties hereto with
respect to any rights shall extend to or affect any subsequent breach or impair
any right consequent thereon.
ARTICLE XX - SEVERABILITY
The Parties agree that it is the intention of neither Party to violate any
public policy, statutory or common laws, and governmental or supranational
regulations; that if any sentence, paragraph, clause or combination of the same
is in violation of any applicable law or regulation, or is unenforceable or void
for any reason whatsoever, such sentence, paragraph, clause or combinations of
the same shall be inoperative and the remainder of the Agreement shall remain
binding upon the Parties.
ARTICLE XXI - FORCE MAJEURE
Neither Party hereto shall be liable to the other in damages for, nor shall this
Agreement be terminable by reason of, any delay or default in such Party's
performance hereunder, if such delay or default is caused by conditions beyond
such Party's control including, but not limited to, acts of God, war,
insurrection, civil commotion, destruction of production facilities or materials
by earthquake, fire, flood or storm, labor disturbances including strikes or
lockouts, epidemic or failure of suppliers, public utilities or common carriers.
Each Party hereto agrees to promptly notify the other Party of any event of
force majeure under this Article and to employ all reasonable efforts toward
prompt resumption of its performance hereunder when possible if such performance
is delayed or interrupted by reason of such event.
ARTICLE XXI I- NOTICES
All notices and other communications required or desired to be given or sent by
one Party to the other Party shall be in writing, in the English language, and
shall be deemed to have been given
(a) on the date of delivery, if delivered to the persons identified
below,
(b) five calendar days after mailing if mailed, with proper postage,
by certified or registered airmail, postage prepaid, return receipt
requested, addressed as set forth below,
(c) on the date of receipt if sent by telex or telecopy, and
confirmed in writing in the manner set forth in (b)on or before the
next day after the sending of the telex or telecopy, or
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(d) two business days after delivered to an internationally
recognized overnight courier service marked for overnight delivery,
as follows:
To LEVPHARMA: 000 Xxx Xxxxxxxxx Xxxx
Xxxxxx Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxxx
Telephone: 0 (000) 000-0000
To XXXXXXX Xxxxxxxxxxx 000
XX 0000 CX
Amsterdam
The Netherlands
Attn: managing director of the Plasma Products Division
Telephone: + 00 00 000 0000
Any Party may change such Party's address for notices by notice duly given
pursuant to this Article XXII.
ARTICLE XXIII - ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the Parties with respect
to the subject matter hereof and supersedes and replaces all prior agreements,
understandings, writings and discussions between the Parties.
ARTICLE XXIV - CAPTIONS
The captions in this Agreement are solely for convenience of reference and shall
not be used for purposes of interpreting or construing the provisions hereof.
ARTICLE XXV - COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original, but all of which together shall constitute one and
the same agreement.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized representatives, effective on this date first set forth
above.
LEVPHARMA
By: Y. T. Xxxxxxxxxx
------------------------------
Its: president and COO
------------------------------
SANQUIN
By: Dr T.J.F. Buunen
------------------------------
Its: chairman of the executive board
-------------------------------
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