Exhibit 10.16
CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND REPLACED WITH “[***]”. SUCH IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF DISCLOSED.
MASTER PRODUCTION SERVICES AGREEMENT
THIS MASTER PRODUCTION SERVICES AGREEMENT, entered into and effective November 3, 2022 (the “Effective Date”), is by and between SAFC CARLSBAD, INC., a California corporation located at 6211 El Camino Real, Carlsbad, CA 92009 (“PROVIDER”), and Candel Therapeutics, Inc., a Delaware corporation located at 117 Kendrick St., Suite 450, Needham, MA 02494 (“CLIENT”). PROVIDER and CLIENT may be referred to individually as “party” and collectively as “parties”.
WHEREAS, CLIENT desires that PROVIDER or its Affiliates, as applicable, conduct certain development, production, manufacturing, and/or contract testing services from time to time during the term of this Agreement; and
WHEREAS, PROVIDER and CLIENT desire to establish initially herein general terms and conditions governing the conduct of such services;
WHEREAS, prior to the Effective Date, the parties entered into a Manufacturability and Gap Assessment and related Terms and Conditions (collectively, the “MGA”) to authorize PROVIDER to commence providing certain preliminary Services while this Master Production Services Agreement was being negotiated and executed.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties hereto agree as follows:
As used herein, the following capitalized terms shall have the meanings set forth below:
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Any changes to Task Orders shall be made in accordance with Section 2.5 below.
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PROVIDER, if requested by CLIENT in connection with an individual Task Order, shall perform some or all of the related services described in this Article 4, as required in the applicable Task Order.
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Where the recipient party (or any of its Representatives) is required to disclose the other party’s Confidential Information pursuant to applicable Laws, including any court or administrative proceedings or the like, the recipient party shall immediately notify the other party in writing of such requirement so that the other party has a meaningful opportunity to seek an appropriate protective order to prevent to such disclosure, and if so requested the recipient party shall cooperate in such efforts. If, after providing such notice and assistance as required herein, the recipient party (or any of its Representatives) remains legally required to disclose any Confidential Information, the recipient party (and its Representatives) shall disclose no more than that portion of the Confidential Information which, on the advice of the recipient party’s legal counsel, the recipient party (or its Representatives) is legally required to disclose and, upon the other party’s request, shall use commercially reasonable efforts to obtain assurances from the applicable court or agency that such Confidential Information will be afforded confidential treatment.
in whole or in part, without the prior written consent of CLIENT, which consent may be granted or withheld in CLIENT’S sole discretion.
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PROVIDER represents, warrants and covenants to CLIENT as follows in Sections 8.1 through 8.10:
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If Product fails to comply with the foregoing warranty and such non-conformance is due to PROVIDER’S failure to comply with the terms of this Agreement including the terms in Section 8.1 (“Nonconforming Product”), PROVIDER will at no cost to CLIENT (excluding raw material costs, which shall be the financial responsibility of the CLIENT unless the breach of this warranty was due to the gross negligence or intentional misconduct of PROVIDER or any person or entity for which PROVIDER is responsible), and as soon as commercially reasonable, re-perform the contracted Services. In addition, PROVIDER will, at its sole cost and expense, destroy all Nonconforming Product and promptly provide a certificate of destruction to CLIENT unless otherwise directed by CLIENT. In the event the re-performance of the contracted Services results in Nonconforming Product under the requirements of this Section 8.3, Client agrees to consider in good faith, input from PROVIDER as to whether: (i) PROVIDER should attempt further re-performance of the Services, or (ii) PROVIDER to issue a refund (excluding raw material costs) for the portion of the Non-Conforming Product to CLIENT. In the event of a Nonconforming Product, PROVIDER shall conduct a Quality investigation as outlined in the Quality Agreement. If the result of Quality investigation determines that the Nonconforming Product was at no fault of PROVIDER, the CLIENT shall be responsible for full payment of the Services.
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except that PROVIDER shall have no obligation under the forgoing to the extent the Losses or Third Party Claims are due to CLIENT’S negligence or willful misconduct (or that of any of its Representatives or any other person or entity for CLIENT is responsible), or any CLIENT breach of any representation, covenant or warranty, of this Agreement.
except that CLIENT shall have no obligation under the forgoing to the extent the Losses or Third Party Claims fall under, or are covered by, PROVIDER’S defense and indemnification obligations under Section 9.1 above.
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In either of the foregoing events in clauses (i) or (ii), such fees and expenses shall be borne by the Indemnifying Party and the Indemnifying Party shall not have the right to direct the defense of such action on behalf of the Indemnified Party or Parties. Notwithstanding anything to the contrary set forth herein, under no circumstances shall the Indemnifying Party be obligated to assume responsibility for the expenses for more than one counsel for all the Indemnified Parties.
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If CLIENT terminates a Task Order for convenience under Section 10.3 without terminating this Agreement:
Table 10.3: Notification of Cancellation or Termination and Percentage of Fees Owed
Written Notification of Cancellation or Termination to PROVIDER | Percentage of Total Remaining Balance of Fees for applicable services/Batches owed on Task Order |
[***]or Less or Run in Process | [***] |
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For avoidance of doubt, PROVIDER agrees to conduct the activities required hereunder at the time and in the manner requested by CLIENT. All costs of delivering items to CLIENT pursuant to this Section, including shipping costs, or of disposing or retaining the same shall be borne by CLIENT. In no event will PROVIDER dispose of any Project Records without first giving CLIENT [***] prior written notice of its intent to do so and complying with any directions or written requests provided by CLIENT during such notice period.
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In the event of a delay is requested by or caused by CLIENT, and that Client cause is (a) not due to a breach of this Agreement by PROVIDER , (b) outside of Provider’s reasonable control, or (c) due to a Force Majeure Event, CLIENT shall pay the amounts set forth below in this Section 10.6 (which, for clarity, shall cover, without limitation, all amounts otherwise due for: CLIENT Materials, use of single sourced materials, or CLIENT-designated product-specific materials, CLIENT shall pay to PROVIDER costs for all non-cancelable work and unearned payments for the duration of the term for the delay, including expired materials, labor and suite fee charges that cannot be reallocated, all work in progress including third party services that through the term of the delay).
PROVIDER and CLIENT will work in good faith to limit the costs associated with the delay. PROVIDER maintains the rights to stop all work in progress and allocate resources to limit additional costs incurred. Such delays may be withdrawn by written notice to PROVIDER, specifying a mutually agreed upon date for return to service by both parties.
The below Table 10.6 - Notification of Delays and Percentage of Fees Owed, are the obligation of CLIENT. The policy and fees are effective as of Project initiation date(s) described in the mutually- agreed to in the signed Task Order. Percentages are applied to the total cost of fees for the individual Project that is delayed. In the event of a delay, both parties shall use good faith efforts to reschedule such Project.
Table 10.6 - Notification of Delay Fees Owed
Written Notification of Delay Requested or Caused by CLIENT to PROVIDER | Delays Percentage of Total Remaining Balance of Fees for applicable services/Batches owed on Task Order |
[***] | [***] |
1. Any request by the CLIENT to hold materials in-process at a specific stage within the Manufacturing process, which is before a billable event, will result in a pro-rata invoice from PROVIDER to CLIENT.
2. In the event of a CLIENT-caused or requested delay, both parties shall use good faith efforts to reschedule such Project subject to slot availability. PROVIDER shall use commercially reasonable efforts to mitigate the delay and fill any available capacity resulting from CLIENT’S delay. If PROVIDER is able to fill the capacity, PROVIDER shall waive or reduce CLIENT’S Delay Fees as set forth above to reflect the revenue to be paid by such replacement work. CLIENT
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shall pay a pro-rated Delay Fee in the event PROVIDER is able to partially fill the available capacity due to CLIENT’S delay.
3. In the event of a PROVIDER-caused delay, PROVIDER shall use good faith efforts to reschedule such Project to the next available slot subject to slot availability within the Facility.
If the parties are unable to resolve the problem to the satisfaction of both parties within [***] from identification thereof, unless the parties are progressing to a mutually agreeable resolution of the problem, then either party may terminate the affected Task Order upon [***] prior written notice to the other party; provided that Client may not terminate under this Section if the problem is due to Client’s acts or omissions.
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This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and interpreted in accordance with the substantive laws of the Commonwealth of Massachusetts, USA, excluding any choice of law rules that would otherwise apply the law of any other jurisdiction. Any and all disputes arising under this Agreement shall be exclusively adjudicated in a state or Federal court of competent jurisdiction located in Boston, Massachusetts, USA (and the appropriate appellate courts therefrom), and each party irrevocably submits to the exclusive jurisdiction of such courts in any suit, action or proceeding and irrevocably waives any objection based on inconvenient forum or lack of personal jurisdiction.
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If to CLIENT
Candel Therapeutics, Inc.
117 Kendrick St., Suite 450
Needham, MA 02494
Attention: Chief Development and Technical Officer
If to PROVIDER
SAFC Carlsbad, Inc.
6211 El Camino Real
Carlsbad, CA 92009
Attention: Site Director
With a copy to:
EMD Millipore Corporation
400 Summit Drive
Burlington, MA 01830 USA
Attn: General Counsel
Either party may designate by notice in writing a new address or contact person by notice given in accordance with this Section 11.9. Each Notice shall be deemed received at such time as it is delivered to the addressee (with the delivery receipt being deemed conclusive (but not exclusive) evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation.
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Signature Page Follows
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement, or have caused this Agreement to be duly executed on their behalf, to be binding and effective as of the Effective Date.
CANDEL THERAPEUTICS, INC. | SAFC CARLSBAD, INC. |
By: /s/ Seshu Tyagarajan | By: /s/ Nina Bauer |
Name: Seshu Tyagarajan | Name: Nina Bauer |
Title: Chief Technical and Development Officer | Title: Global Head of Commercial BioVV Millipore CTDMO Services |
Date: Nov 10, 2022 | Date: 11/18/2022 |
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SCHEDULES AND EXHIBITS
Exhibit A Form of Task Order
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Exhibit A
Form of Task Order
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