1
EXHIBIT 10.18
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17.C.F.R. SECTIONS 200.80(b)(4),
200.83 AND 240.24b-2
LONZA DEVELOPMENT AGREEMENT
This Agreement is made the 28th day of May 1998 between LONZA BIOLOGICS
PLC of 228 Bath Road, Slough, Berkshire SL1 4DY, England (hereinafter referred
to as "LB"), and COULTER PHARMACEUTICAL, INC. of 550, California Avenue, Suite
200, Palo Alto, CA 94306-1440, USA (hereinafter referred to as the "Customer").
WHEREAS:
A. Customer is the proprietor of a murine hybridoma cell line known
as B1, expressing IgG2a anti-CD20 murine monoclonal antibody; and
B. LB has expertise in the development and manufacture of products
produced by such cell lines; and
C. Customer and LB have entered into agreements dated 28 April 1995, as
amended, (the "Evaluation Agreement") and 20 August 1996, as amended, ("the
Development Agreement") to evaluate and develop a process for production of
product from the cell line in question, to produce clinical grade product
therefrom and to provide regulatory services in support of Customer's product
license applications, and
D. The parties now wish to agree on a basis upon which LB will supply
further product for late phase clinical trial and in market supply.
NOW THEREFORE it is hereby agreed by and between the parties as follows:
1. In this agreement, its recitals and Schedules hereto, words and phrases
defined in the Standard Terms for Contract Services set out in Schedules 4
and 5 hereto shall have the meanings set out therein.
2. This Agreement shall take effect on the Effective Date and unless
terminated in accordance with Clause 9 of Schedule 5 hereto, shall
continue until its expiry pursuant to Clause 12 of Schedule 5 hereto.
3. Subject to the Standard Terms for Contract Services set out in Schedule 5
hereto and the Special Terms set out in Schedule 4 LB agrees to carry out
the Services and the Customer agrees to pay the Price as provided in
Schedule 3 together with any additional costs and expenses that fall due
hereunder.
4. 4.1 Any notice or other communication to be given under this Agreement
shall be delivered personally or sent by first class pre-paid post or
facsimile transmission addressed as follows:
1.
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If to the Customer, to Coulter Pharmaceutical, Inc.
550 California Avenue, Suite 200
Palo Alto CA 94306-1440, USA
For the attention of: Vice President and CFO
Copy to: Senior Director, Manufacturing
Facsimile: 650 849 7530
If to LB, to Lonza Biologics PLC
228 Bath Road
Slough
Berkshire SL1 4DY
England
For the attention of: President
Facsimile: 01753 777001
or to such other destination as either party hereto may hereafter notify to the
other in accordance with the provisions of this clause.
4.2 All such notices or other communications shall be deemed to have been
served as follows:
4.2.1 if delivered personally, at the time of such delivery;
4.2.2 if sent by first class pre-paid post, five (5) business days
(Saturdays, Sundays and Bank or other public holidays excluded) after being
placed in the post;
4.2.3 if sent by facsimile upon receipt of the transmission
confirmation slip showing completion of the transmission
4.2.4 if by express mail or by courier within two (2) days after
being dispatched.
AS WITNESS the hands of the duly authorized representatives of the parties
hereto the day and year first before written
Signed for and on behalf of /s/
LONZA BIOLOGICS PLC ---------------------------------------
President
---------------------------------------
Title
Signed for and on behalf of /s/ William G. Harris
COULTER PHARMACEUTICAL, INC. ---------------------------------------
Vice President, Chief Financial Officer
---------------------------------------
Title
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SCHEDULE 1
For the purposes of this Agreement:
"CELL LINE" shall mean the mouse hybridoma cell line referred to as B lRl
recloned by LB from the cell line B l supplied by Customer.
"PRODUCT" shall mean the IgG2a anti-CD20 murine monoclonal antibody produced by
the Cell Line.
A. SPECIFICATION FOR BULK PURIFIED PRODUCT
TEST
CHARACTERISTICS SPECIFICATION
------------------------- -------------------------
Appearance [****]
[****] [****]
[****] [****]
[****] [****]
IDENTITY
[****] [****]
[****] [****]
PURITY
[****] [****]
[****] [****]
[****] [****]
[****] [****]
[****] [****]
IMPURITIES
[****] [****]
[****] [****]
[****] [****]
[****] [****]
TEST
CHARACTERISTICS SPECIFICATION
------------------------- -------------------------
SAFETY
[****] [****]
[****] [****]
[****] [****]
[****] [****]
[****] [****]
* CONFIDENTIAL TREATMENT REQUESTED
1.
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TEST CARRIED OUT BY
COULTER PHARMACEUTICAL,
INC.
[****] [****]
[****]
* CONFIDENTIAL TREATMENT REQUESTED
2.
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SCHEDULE 2
SERVICES
1. SUPPLY OF CUSTOMER MATERIALS AND CUSTOMER INFORMATION
Pursuant to agreements between the parties dated 28 April 1995 (as
amended) and 20 August 1996 (as amended), or otherwise Customer has
supplied to LB:
(a) samples of cell line B 1 from which the Cell Line has been
obtained; and
(b) a reference standard of Product for Process development
studies and bulk purified Product release testing. LB has developed a reference
standard for use in the Services from materials produced under the agreement
dated 20 August 1996. The parties may, at a later date, agree to the use of an
alternative reference standard; and
(c) information, materials and data to enable performance of
an assay to test the functional activity of the Product. It is acknowledged by
the parties that additional information, materials and data may be required from
the Customer from time to time for assay purposes.
2. MANUFACTURE AND SUPPLY OF PRODUCT
2.1 OBJECTIVE. To produce Product for Customer in accordance with the
terms of this Agreement.
2.2 ACTIVITIES. Each Batch (as defined by Clause 1.1 of Schedule 4 hereto)
of Product ordered for delivery to Customer pursuant to this Agreement shall be
produced by LB using the Process to meet the Specification and in accordance
with the Product License therefor as follows:
2.2.1 carry out an air lift fermentation in accordance with the
principles of cGMP at [****];
2.2.2 clarify, harvest and concentrate supernatant;
2.2.3 purify Product and send test samples to Customer;
2.2.4 test Product against Specification including, but not limited
to, Customer's potency test. The Customer's potency test will be performed by
Customer on Product samples. The performance (or non-performance) for whatever
reason of the Customer potency test will not delay delivery of Product or
payment therefor but will be subject to the provisions of Clause 5 of Schedule 5
hereto;
2.2.5 undertake quality assurance review of lot documentation;
2.2.6 issue lot release for Product;
* CONFIDENTIAL TREATMENT REQUESTED
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2.2.7 deliver Product to Customer; and
2.2.8 deliver consolidated batch record to Customer, when available.
2.3 TIMESCALE. It is estimated delivery of Product will take place
approximately [****] from commencement of activities relating to the Batch in
question. Activities shall be deemed to commence with recovery of cryopreserved
cells from the Working Cell Bank ("WCB").
2.4 TESTING PROCEDURE. Pursuant to Stage 17b of the Services supplied
under the Development Agreement, Customer was supplied with details of certain
LB proprietary testing procedures. Customer shall be entitled to continue to
refer to such testing procedures as were supplied pursuant to Stage 17b of the
Development Agreement for the purpose of performing the Customer Tests under
this Agreement.
3. QUALITY SUPPORT SERVICES
From time to time the Customer may request and LB may agree to provide
access for the Customer to audit LB's production facility and documentation, or
to provide other quality support services (including audit by LB of Customer's
testing facility). To the extent the Customer is granted such audit rights in
excess of a single three (3) day audit in any one Year of this Agreement, or
supplied such other quality support services, such access and services will be
provided by LB and shall be charged to the Customer at LB's man day rate
applying at the time in question. In addition Customer shall pay LB's reasonable
expenses incurred in performing such Services. All reasonable account will be
taken of comments and observations made during audits by Customer of LB's
facility and by LB of Customer's testing facility.
* CONFIDENTIAL TREATMENT REQUESTED
2.
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SCHEDULE 3
PRICE AND TERMS OF PAYMENT
1. PRICE
In consideration for performance of the Services, the Customer shall pay
LB the Price for each Batch or gram (as applicable) of Product, as determined by
reference to the following:
1.1 On 1st January of each calendar year, the Price for Product to be
delivered pursuant to any provision of this Agreement during the calendar year
in question will be determined, and shall be effective on and from 1st January
of the calendar year in question.
The Price for the calendar year in question shall (subject always to
Clause 1.2) be equal to [****] of Product for the preceding calendar year
adjusted by [****]. LB shall notify Customer as soon as reasonably practicable
following confirmation of [****]. It is estimated that this will be before
[****] preceding the 1st January in question.
This Price alteration shall apply to all Product delivered pursuant to any
provision of this Agreement during the calendar year in question, irrespective
of whether firm orders have been placed for delivery of such Product prior to
the relevant Price alteration taking effect.
1.2 EXCEPTIONAL ITEMS
In addition to the Price alterations which are applied pursuant to Clause
1.1, additional alterations shall be made to the Price where exceptional items
of cost are demonstrated to the reasonable satisfaction of the Customer and
agreed in advance as being occurred in the provision of the Services by LB. Such
additional Price alterations shall be considered for application at the time the
Price for supply of Product is fixed each year.
FOR EXAMPLE:
Any Product which is ordered pursuant to any clause of this Agreement, for
delivery in the third Year of this Agreement, shall be subject to a Price which
is determined and effective from 1st January of the calendar year in which the
Effective Date for the third Year falls. That Price shall be calculated by
reference to [****] of the calendar year in which the Effective Date for the
second Year of this Agreement falls.
1.3 The Price per Batch for [****] of Product delivered pursuant to this
Agreement (whether such delivery is made pursuant to orders placed under Clause
2.1, 2.3, or 3 of Schedule 4 hereto), shall be [****] adjusted for [****], and
further adjusted (if applicable, depending on the delivery dates for the same)
in accordance with Clause 1.1 and 1.2 of this Schedule 3.
* CONFIDENTIAL TREATMENT REQUESTED
1.
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1.4 Product ordered for delivery hereunder in excess of [****] shall be
supplied at a Price per gram. The Price per gram of Product shall be: [****]
WHERE:
[****] = [****], further adjusted (if applicable) in accordance with Clause 1.1
and 1.2 of this Schedule 3.
[****] = [****].
2. PAYMENT
Payment by Customer of the Price for each Batch of Product shall be made
by cheque or by wire transfer against LB's invoices issued on lot release of the
Batch of Product in question (activity 2.2.6 of Schedule 2 hereto).
3. PAYMENT FOR QUALITY SUPPORT SERVICES
In the event payments fall due pursuant to Section 3 of Schedule 2 hereto,
Customer shall make payment in respect of such Services against LB's invoice
therefor issued from time to time.
* CONFIDENTIAL TREATMENT REQUESTED
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SCHEDULE 4
SPECIAL TERMS
1. DEFINITIONS
For the purposes of this Agreement:
1.1 "BATCH" shall mean the total Product obtained from one air lift
fermentation carried out in accordance with cGMP at [****].
1.2 "CGMP" shall mean Good Manufacturing Practices and General Biological
Products Standards as promulgated under the US Federal Food Drug and Cosmetic
Act at 21CFR, (chapters 210, 211, 600 and 610) and the Guide to Good
Manufacturing Practices for Medicinal Products as promulgated under European
Directive 91/356/EEC as the same may be amended or re-enacted from time to time.
LB's operational quality standards are defined in internal GMP policy documents
and are based on LB's interpretation of the GMP legislation for bulk clinical
grade biologicals.
1.3 "DELIVERY DATE" shall mean the date agreed between the parties in
accordance with Clause 4 of this Schedule 4, upon which a given Batch of Product
shall be ready for delivery to Customer exworks LB's premises, Slough.
1.4 "EFFECTIVE DATE" shall mean the date of first grant of a marketing
approval or Product License (or equivalent) in respect of Product anywhere in
the World.
1.5 "PRODUCT LICENSE" shall mean the biologics license granted in response
to the Biologics License Application ("BLA") submitted pursuant to the
provisions of Amendment No. 3 to the Agreement between the parties dated 20
August 1996.
1.6 "YEAR" shall mean a period of twelve (12) calendar months commencing
on the Effective Date or an anniversary of the Effective Date.
2. MINIMUM ORDER QUANTITIES
2.1 Customer hereby agrees to order and LB agrees to carry out the
Services for a minimum of [****] of Product within Delivery Dates in each Year
of this Agreement.
2.2 In the event Customer fails to order the amount of Product required by
Clause 2.1 above, LB shall be entitled, [****].
Notwithstanding this Clause 2.2 above, LB agrees not to invoke the
provisions of this clause in the event the number of Batches of Product
delivered in any one Year of this Agreement is less than [****] to events giving
rise to liquidated damages under Clause 5 of this Schedule 4.
2.3 At such time as Customer places an order for Product to be supplied
pursuant to Clause 2.1 above, Customer shall be entitled to request LB to supply
additional Batches of
* CONFIDENTIAL TREATMENT REQUESTED
1.
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Product for delivery during the same calendar year as those being ordered
pursuant to Clause 2 above.
LB agrees to use all reasonable commercial endeavors to accommodate such
requests for such Batches of Product.
3. ADDITIONAL PRODUCT
Customer may at any time request LB, in writing, to supply Batches of
Product. LB shall use all reasonable commercial efforts to supply such Product.
In the event LB is able to agree to such supply hereunder the Price for such
Product shall be calculated in accordance with the principles of Schedule 3
hereto.
4. ORDERING PROCEDURES
4.1 Within [****] of the Effective Date in each Year of this Agreement,
Customer shall have provided to LB details of the number of Batches of Product
Customer would like to order, pursuant to Clause 2 of this Schedule 4, for
delivery in the following Year and identified preferred Delivery Dates for each
Batch.
4.2 LB shall respond to Customer's requests for Product made pursuant to
Clause 4.1 within ten (10) working days of receiving the same and shall notify
Customer of the acceptability of the requested Delivery Date(s) to LB. Subject
to LB's obligations under Clause 2.1 and 2.3, if LB does not accept Customer's
requested Delivery Date(s) but is able to offer an alternative Delivery Date, LB
shall notify Customer of that fact and shall supply details of such alternative
Delivery Dates for acceptance by Customer.
Immediately following agreement on Delivery Dates for Batches to be
supplied pursuant to Clause 2.1 or 2.3, Customer shall provide a written
confirmatory order for such Batches which shall constitute a binding order for
such Product and shall specify the number of Batches and their agreed Delivery
Dates.
4.3 In the case of the first Year of this Agreement, the supply of Product
by LB shall be governed by the ordering procedure set out in Clause 3 of this
Schedule 4. The provisions of Clause 2.1, 2.3 and Clause 5 shall not apply to
batches ordered for delivery in the first Year of this Agreement.
5. LATE DELIVERY
5.1 Where a Batch has been ordered by Customer pursuant to Clause 2.1 or
2.3 and is subject to an agreed Delivery Date and LB fails to deliver the said
Batch by a date which is [****] after such Delivery Date (subject to any
extension of time for such delivery which LB may become entitled to hereunder)
due to LB's own fault or omission, but not otherwise, Customer shall, subject to
Clause 5.2 below, be entitled to claim liquidated damages for such late
delivery. The liquidated damages to which the Customer shall become entitled
shall be equivalent to [****] of the Price for the Batch concerned for each
week, or part thereof, between
* CONFIDENTIAL TREATMENT REQUESTED
2.
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the date [****] after the Delivery Date for the Batch in question and the next
date upon which a Batch of Product is notified to Customer as being ready for
delivery exworks.
In no event shall such liquidated damages on any one Batch exceed [****]
of the Price of the Batch of Product in question, irrespective of whether such
damages accrue as a result of any single event or a series of events or as a
consequence of delay to delivery of a previous Batch of Product.
5.2 Customer's entitlement to claim liquidated damages pursuant to Clause
5.1 shall be limited as follows:
5.2.1 under no circumstances shall liquidated damages accrue on any
Batch not forming part of an order placed pursuant to Clause 2.1 or 2.3 of this
Schedule 4;
5.2.2 subject to satisfaction of the requirements of Clause 5.1 and
5.2.1 above, where liquidated damages have accrued in respect of any Batch of
Product with a Delivery Date in any one Year of this Agreement and, as a
consequence, other Batches of Product ordered pursuant to Clause 2.1 or 2.3 of
Schedule 4 for delivery in the same Year are also delayed, Customer shall be
entitled to claim liquidated damages in respect of delay on [****] of such
consequently delayed Batches of Product with Delivery Dates in the same Year
(i.e. for the avoidance of doubt, maximum total of [****]; and
5.2.3 subject to Clause 5.1, 5.2.2 and 5.3, where liquidated damages
have accrued pursuant to this Clause 5, the Delivery Dates for remaining Batches
ordered pursuant to Clause 2.1 or 2.3 for delivery in the same Year as that in
which the relevant delay occurs and the Delivery Dates for all Batches at that
time ordered for delivery in subsequent Years shall automatically, and without
liability for further liquidated damages on LB, be extended to account for the
delay. The rescheduled Delivery Dates shall be agreed between the parties.
5.3 The provisions of Clause 5.1 and 5.2 above shall be Customer's sole
exclusive remedy for delays to the delivery of Product.
6. CHANGES TO THE SPECIFICATION
The Specification in Schedule 1 hereto maybe varied from time to time. Any
such variation must be such as to comply with the Product License, and agreed in
writing by the quality assurance managers of each party hereto (or their
appointed deputy).
7. CANCELLATION
7.1 Subject always to the requirement of Clause 2.1 and to the parties
(where relevant) reviewing and agreeing re-scheduled Delivery Dates for Batches
to be ordered pursuant to the requirements of Clause 2.1, in the event Customer
has ordered a Batch of Product pursuant to Clause 2 or 3 of this Schedule 4 and
no longer wishes to purchase such Batch, Customer shall notify LB in writing of
such wish.
If written notice of Customer's wish to cancel any Batch of Product is
received by LB:
* CONFIDENTIAL TREATMENT REQUESTED
3.
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7.1.1 more than [****] before LB's estimated date for commencing
Services relating to such Batch, Customer shall pay LB [****] of the Price for
the canceled Batch;
7.1.2 [****] before LB's estimated date for commencing Services
relating to such Batch, Customer shall pay LB [****] of the Price for the
canceled Batch; and
7.1.3 [****] before LB's estimated date for commencing Services
relating to such Batch, Customer shall pay LB [****] of the Price for such
canceled Batch.
For the avoidance of doubt, if LB does not receive notice of Customer's
wish to cancel a Batch of Product until after commencement of Services relating
to such Batch, Customer shall pay LB [****] of the Price for the Batch in
question.
7.2 In the event Customer wishes to reschedule rather than cancel a Batch
of Product, LB shall consider favorably such request, having regard to the
provisions of Clause 2.1, and to LB's commercial considerations.
In the event it is agreed that any Batch of Product is to be rescheduled
rather than canceled, Customer shall not be obliged to make payment to LB
pursuant to Clause 7.1 above.
8. PROJECT TEAM
8.1 The Parties shall form a Project Team, comprised of equal numbers of
representatives of both Parties (not to exceed three (3) representatives of each
Party) to address issues and oversee the progress and success of the
relationship between the Parties.
8.2 The role of the Project Team shall be to provide project updates,
identify and resolve issues of supply, plan future production and agree on
Delivery Dates for Product, discuss and recommend to the parties changes to the
Process for the purposes of assisting in the objectives outlined by Clause 10
below.
8.3 Decisions of the Project Team shall be by majority. Either Party may
change its representation on the Project Team at any time by written notice to
the other.
8.4 In the event the Project Team is unable to reach agreement on any
matter to be decided by the Project Team, such matter shall be referred to the
President or Chief Executive for the time being of each party, who shall
negotiate in good faith to recommend to the Project Team how such matter shall
be decided.
For the avoidance of doubt, the Project Team shall not be empowered to
amend the terms of this Agreement.
* CONFIDENTIAL TREATMENT REQUESTED
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9. ADDITIONAL PROVISIONS RELATING TO QUALITY ISSUES
The parties acknowledge that from time to time changes and clarifications
to quality and/or regulatory matters will need to be addressed in connection
with the Services. The parties have agreed that such matters will be addressed
in accordance with the principles of the shared manufacturing memorandum
attached as Appendix 1 hereto.
10. FUTURE REVIEW
It is the parties intention to work together during the term of the
Agreement to review and, if appropriate, implement Process changes with a view
to reducing the Price of Product per gram or to implement changes to the
requirements of regulatory authorities. Such measures will be implemented on
terms to be agreed between the parties.
5.
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SCHEDULE 5
STANDARD TERMS FOR CONTRACT SERVICES
COULTER PHARMACEUTICAL. INC.
1. INTERPRETATION
1.1 In these Standard Terms, unless the context requires otherwise:
1.1.1 "AFFILIATE" means any Company, partnership or other entity
which directly or indirectly controls, is controlled by or is under common
control with the relevant party to this Agreement. "control" means the ownership
of more than 50% of the issued share capital or the legal power to direct or
cause the direction of the general management and policies of the party in
question.
1.1.2 "AGREEMENT" means this agreement as herein dated between LB
and a Customer incorporating these Standard Terms.
1.1.3 "CELL LINE" has the meaning set forth in Schedule 1.
1.1.4 "CUSTOMER" means Coulter Pharmaceutical, Inc. of 550
California Avenue, Suite 200, Palo Alto, CA 94306-1440, USA.
1.1.5 "CUSTOMER INFORMATION" means all technical and other
information, relating to the Cell Line, the Process and the Product disclosed by
the Customer to LB, and not known to LB or in the public domain prior to
disclosure by the Customer.
1.1.6 "CUSTOMER TESTS" means the tests to be carried out on the
Product following receipt of the Product by the Customer, particulars of which
are set out in Schedule 1.
1.1.7 "LB KNOW-HOW" means all technical and other information
relating to the Process known to LB from time to time other than Customer
Information and information in the public domain.
1.1.8 "PATENT RIGHTS" means all patents and patent applications of
any kind throughout the world relating to the Process which from time to time LB
is the owner of or (except for any patents and patent applications owned by the
Customer or licensed to the Customer by third party and licensed to LB
hereunder) is entitled to use.
1.1.9 "PRICE" means the price specified in Schedule 3 for the
Services.
1.1.10 "PROCESS" means the process developed or utilized by LB under
this Agreement for the production of the Product from the Cell Line, including
any improvements thereto from time to time.
1.1.11 "PRODUCT" has the meaning set forth in Schedule 1.
1.
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1.1.12 "SERVICES" means all or any part of the services the subject
of the Agreement (including, without limitation, cell culture evaluation,
purification evaluation, master, working and extended cell bank creation, and
sample and bulk production), particulars of which are set out in Schedule 2.
1.1.13 "SPECIAL TERM" means any term additional or supplemental to
these Standard Terms from time to time agreed in writing between LB and the
Customer. Particulars of any Special Terms at the date of the Agreement are set
out in Schedule 4.
1.1.14 "SPECIFICATION" means the specification for Product,
particulars of which are set out in Schedule 1.
1.1.15 "TERMS OF PAYMENT" means the terms of payment specified in
Schedule 3.
1.1.16 "TESTING LABORATORIES" means Q-One Biotech Limited of Todd
Campus, West of Scotland Science Park, Glasgow, G20 OXA, Scotland, and
Microbiological Associates Limited of Stirling University Innovation Park,
Hilfoots Road, Stirling, FK9 4NF, Scotland, and such other third parties
instructed by LB to carry out tests on the Cell Line or the Product as are from
time to time agreed between the parties hereto.
1.2 Unless the context requires otherwise, words and phrases defined in
any other part of the Agreement shall bear the same meanings in these Standard
Terms, references to the singular number include the plural and vice versa,
references to Schedules are references to the schedules to the Agreement, and
references to Clauses are references to clauses of these Standard Terms.
1.3 In the event of a conflict between any of the terms of Schedules 1-4
and these Standard Terms, the terms of Schedules 1-4 shall prevail.
2. APPLICABILITY OF STANDARD TERMS
No variation of or addition to these Standard Terms and the Special Terms
or any other term of an Agreement shall be effective unless in writing and
signed for and on behalf of LB and the Customer.
3. SUPPLY OF THE CELL LINE
3.1 Prior to the date of the Agreement the Customer supplied to LB the
Customer Information, together with cell line B1 and full details of any hazards
known to Customer and relating to cell line B1, its storage and use. Property in
the cell line B1 and the Cell Line supplied to LB shall remain vested in the
Customer.
3.2 The Customer hereby grants LB the non-exclusive right to use the Cell
Line, the Product and the Customer Information for the purpose of the Agreement.
LB hereby undertakes not to use the Cell Line, the Product or the Customer
Information (or any part thereof) for any other purpose.
2.
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3.3 LB shall:
3.3.1 at all times keep the Cell Line secure and safe from loss and
damage in such manner as LB shall in its sole discretion determine;
3.3.2 not part with possession of the Cell Line, the master cell
bank, the working cell bank or the Product, save for the purpose of tests at the
Testing Laboratories without the prior written consent of the Customer, and
3.3.3 procure that all Testing Laboratories are subject to
obligations of confidence substantially in the form of those obligations of
confidence imposed on LB under these Standard Terms.
3.4 LB shall not be liable for any loss, damage, costs or expenses of any
nature, whether direct or consequential, occasioned by the carrying out (in
whole or in part) of tests or the failure to carry out tests by Testing
Laboratories (A "Testing Laboratory Breach") LB agrees to use commercially
reasonable efforts to enforce any rights LB may have against a Testing
Laboratory in the event that either LB or the Customer suffers any loss, damage,
costs or expenses of any nature occasioned by a Testing Laboratory Breach. In
the event LB recovers damages against a Testing Laboratory LB shall pay to the
Customer after deduction of any out-of-pocket legal expenses such proportion of
the amount of damages as the parties shall agree and such agreement shall take
account of the loss suffered by both LB and the Customer.
3.5 The Customer warrants to LB that:
3.5.1 the Customer is and shall at all times throughout the duration
of the Agreement remain entitled to supply the Cell Line and Customer
Information to LB; and
3.5.2 the use by LB of the Cell Line and the Customer Information in
accordance with this Agreement will not infringe any rights (including without
limitation, any intellectual or industrial property rights) vested in any third
party. LB warrants that as of the date of this Agreement LB's legal or corporate
departments have not received notice of nor are aware of any claim or demand and
LB is not party to any court proceedings in which a third party is claiming
infringement of its intellectual property rights by LB's use of the Process and
LB agrees to notify the Customer at any time during the term of this Agreement
if it receives any such notice or demand and of the steps it intends to take as
a result of such notice or demand. In the event LB's legal department or
corporate department do become aware of such a claim, LB agrees to promptly
notify Customer and the parties shall use all reasonable efforts to work
together to attempt to resolve such claim or otherwise satisfy themselves that
such claim is unfounded. In the event the parties believe such claim has
foundation, they will review modifications to the Process or the suitability of
taking licenses under third party intellectual property rights to avoid or
satisfy such claim. In the event the parties are unable to satisfactorily
resolve the situation either party may terminate this Agreement by ninety (90)
days notice to the other, in writing.
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3.6 The Customer undertakes to indemnify and to maintain LB promptly
indemnified against any loss, damage, costs and expenses of any nature
(including court costs and legal fees on a full indemnity basis), whether direct
or consequential, and whether or not foreseeable or in the contemplation of LB
or the Customer, that LB may suffer arising out of incidental to any breach of
the warranties given by the Customer under Clause 3.5 above.
3.7 The obligations of the Customer and LB under Clauses 3.3, and 3.6
shall survive the termination for whatever reason of the Agreement.
4. PROVISION OF THE SERVICES
4.1 LB shall carry out the Services as provided in Schedule 2.
4.2 The timescales set down for the performance of the Services (including
without limitation the dates for production and delivery of Product) and the
quantities of Product for delivery set out in Schedule 2 are estimated only.
4.3 The Customer shall not be entitled to [****]:
4.3.1 [****]; or
4.3.2 [****].
4.4 LB shall comply with all statutory, regulatory and similar legislative
requirements from time to time applicable to the Services under the laws of
European Union, United Kingdom and USA. If the Customer requests LB to comply
with any other statutory, regulatory or similar legislative requirements (the
"Foreign Requirements") LB shall use reasonable commercial endeavors to do so
provided that:
4.4.1 the Customer shall be responsible for informing LB in writing
of the precise Foreign Requirements which the Customer is requesting LB to
observe;
4.4.2 such Foreign Requirements do not conflict with any mandatory
requirements under the laws of England;
4.4.3 LB shall be under no obligation to ensure that such written
information complies with the applicable Foreign Requirements; and
4.4.4 all costs and expenses incurred by LB in complying with such
Foreign Requirements shall be charged to the Customer in addition to the Price.
4.5 Delivery of Product shall be ex-works. Risk in and title to Product
shall pass on delivery. Transportation of Product, whether or not under any
arrangements made by LB on behalf of the Customer, shall be made at the sole
risk and expense of the Customer.
* CONFIDENTIAL TREATMENT REQUESTED
4.
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4.6 Unless otherwise agreed, LB shall package and label Product for
delivery ex-works. It shall be the responsibility of the Customer to inform LB
in writing in advance of any special packaging and labeling requirements for
Product. All reasonable additional costs and expenses of whatever nature
incurred by LB in complying with such special requirements shall be charged to
the Customer in addition to the Price.
5. TRANSPORTATION OF PRODUCT AND CUSTOMER TESTS
5.1 If requested by the Customer, LB will (acting as agent of the Customer
for such purpose) arrange the transportation of Product from LB's premises to
the destination indicated by the Customer together with insurance cover for
Product in transit at its invoiced value. All additional costs and expenses of
whatever nature incurred by LB in arranging such transportation and insurance
shall be charged to the Customer in addition to the Price.
5.2 Where LB has made arrangements for the transportation of Product, the
Customer or its designee shall diligently examine the Product as soon as
practicable after receipt. Notice of all claims (time being of the essence)
arising out of:
5.2.1 damage to or total or partial loss of Product in transit shall
be given in writing to LB and the carrier within three (3) business days of
delivery; or
5.2.2 non-delivery shall be given in writing to LB within ten (10)
days after the date of LB's dispatch notice.
5.3 The Customer shall make damaged Product available for inspection and
shall comply with the requirements of any insurance policy covering the Product
notified by LB to the Customer. LB shall offer the Customer all reasonable
assistance (at the cost and expense of the Customer) in pursuing any claims
arising out of the transportation of Product. At any time, if requested by the
Customer, LB shall supply the Customer with Product samples retained by LB prior
to shipment of Product for use by the Customer in confirming whether Product
meets the Specification (always provided that such supply of Product samples
does not prejudice LB's ability to meet GMP or regulatory requirements regarding
retention of Product samples).
5.4 Upon receipt of Product or Product samples, the Customer or its
appointed agency shall carry out the Customer Tests. If the Customer Tests show
that the Product fails to meet Specification, the Customer shall give LB written
notice thereof within sixty (60) days from the date of delivery of the Product
ex-works and shall return such Product to LB's premises for further testing. In
the absence of such written notice Product shall be deemed to have been accepted
by the Customer as meeting Specification. If LB is satisfied that Product
returned to LB fails to meet Specification and that such failure is not due (in
whole or in part) to acts or omissions of the Customer or any third party after
delivery of such Product ex-works, LB shall in its sole discretion refund that
part of the Price that relates to the production of such Product or replace such
Product at its own cost and expense. Notwithstanding the foregoing, if the
Customer determines following acceptance of the Product from LB that the Product
has been adulterated within the meaning of the United States Federal Food, Drug
and Cosmetic Act by LB, then, subject to the Customer providing LB evidence of
its determination and samples of adulterated Product and subject to LB's right
to dispute such determination in accordance with Clause 5.5,
5.
19
LB shall at Customer's discretion refund that part of the Price that relates to
the production of such Product or replace such Product at its own cost and
expense. Customer expressly agrees that, in the event it obliges LB to replace
Product pursuant to this Clause 5.4, LB shall be entitled to have all due regard
to its commercial commitments to third parties in replacement of such Product
and that such replacement may, as a result, be delayed.
5.5 If there is any dispute concerning whether Product returned to LB
fails to meet Specification or whether such failure is due (in whole or in part)
to acts or omissions of the Customer or any third party after delivery of such
Product ex-works, such dispute shall be referred for decision to an independent
expert (acting as an expert and not as an arbitrator) to be appointed by
agreement between LB and the Customer or, in the absence of agreement by the
President for the time being of the Association of the British Pharmaceutical
Industry. The costs of such independent expert shall be borne equally between LB
and the Customer. The decision of such independent expert shall be in writing
and, save for manifest error on the face of the decision, shall be binding on
both LB and the Customer.
5.6 The provisions of Clauses 5.4 and 5.5 shall be the sole remedy
available to the Customer in respect of Product that fails to meet Specification
or that is adulterated.
6. PRICE AND TERMS OF PAYMENT
6.1 The Customer shall pay the Price in accordance with the Terms of
Payment.
6.2 Unless otherwise indicated in writing by LB, all prices and charges
are exclusive of added tax or of any other applicable taxes, levies, imposts,
duties and fees of whatever nature imposed by or under the authority of any
government or public authority, which shall be paid by the Customer. All
invoices are strictly net and payment must be made within thirty (30) days of
date of invoice. Payment shall be made without deduction, deferment, set-off,
lien or counterclaim of any nature.
6.3 Time for payment shall be of the essence. In default of payment on due
date:
6.3.1 interest shall accrue on any amount overdue at the rate of
[****], interest to accrue on [****]; and
6.3.2 LB shall, at its sole discretion, and without prejudice to any
other of its accrued rights, be entitled to suspend the provision of the
Services or if the default of payment continues for One hundred and fifty (150)
days after the date of invoice to treat the Agreement as repudiated by notice in
writing to the Customer exercised at any thereafter provided that such right to
suspend Services or treat the Agreement as repudiated shall not apply in
circumstances where the Customer has withheld payment for amounts disputed in
good faith (it being agreed that this proviso shall apply to disputed amounts
and not to any other amounts due for payment forming part of the same or another
invoice).
* CONFIDENTIAL TREATMENT REQUESTED
6.
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7. WARRANTY AND LIMITATION OF LIABILITY
7.1 LB warrants that:
7.1.1 the Services shall be performed in accordance with Clause 4;
and
7.1.2 the Product shall meet Specification.
7.2 Clause 7.1 is in lieu of all conditions, warranties and statements in
respect of the Services and/or the Product whether expressed or implied by
statute, custom of the trade or otherwise (including but without limitation any
such condition, warranty or statement relating to the description or quality of
the Product, its fitness for a particular purpose or use under any conditions
whether or not known to LB) and any such condition, warranty or statement is
hereby excluded.
7.3 Without prejudice to the terms of Clauses 3.4, 5.6, 7.1, 7.2 and 7.4
and, subject to Clause 7.6, the liability of LB for any loss or damage suffered
by the Customer as a direct result of any breach of the Agreement or of any
other liability of LB (including misrepresentation and negligence) in respect of
the Services (including without limitation the production and/or supply of the
Product) shall be limited to the payment by LB of damages which shall [****].
The limitation of liability set forth in the preceding sentence shall not apply
to any breach by LB of Clauses 3.2, 8.1, 8.2 and 8.3 of this Schedule 5 or in
respect of direct damage caused to Customer as a result of LB's breach of this
Agreement by LB's willful misconduct.
7.4 Subject to Clause 7.6, LB shall not be liable for the following loss
or damage howsoever caused (even if foreseeable or in the contemplation of LB or
the Customer):
7.4.1 loss of profits, business or revenue whether suffered by the
Customer or any other person; or
7.4.2 indirect or consequential loss, whether suffered by the
Customer or any other person.
7.5 The Customer shall indemnify and maintain LB promptly indemnified
against all claims, actions, costs, expenses (including court costs and legal
fees on a full indemnity basis) or other liabilities whatsoever in respect of:
7.5.1 any liability under the Consumer Protection Act 1987, unless
such liability is caused by the negligent act or omission of LB in the
production and/or supply of the Product; and
7.5.2 any product liability (other than that referred to in Clause
7.5.1) in respect of Product, unless such liability is caused by the negligent
act or omission of LB in the production and/or supply of Product; and
7.5.3 any negligent or willful act or omission of the Customer in
relation to the use, processing, storage or sale of the Product.
* CONFIDENTIAL TREATMENT REQUESTED
7.
21
7.6 Nothing contained in these Standard Terms shall purport to exclude or
restrict any liability for death or personal injury resulting directly from
negligence by LB in carrying out the Services or any liability for breach of the
implied undertakings of LB as to title.
7.7 The obligations of the Customer and LB under this Clause 7 shall
survive the termination for whatever reason of the Agreement.
8. CUSTOMER INFORMATION, LB KNOW-HOW AND PATENT RIGHTS
8.1 The Customer acknowledges that LB Know-How and LB acknowledges that
Customer Information with which it is supplied by the other pursuant to the
Agreement is supplied, subject to Clause 8.4, in circumstances imparting an
obligation of confidence and each agrees to keep such LB Know-How or such
Customer Information secret and confidential and to respect the other's
proprietary rights therein and not at any time for any reason whatsoever to
disclose or permit such LB Know-How or such Customer Information to be disclosed
to any third party.
8.2 The Customer and LB shall each procure that all their respective
employees, consultants and contractors having access to confidential LB Know-How
or confidential Customer Information shall be subject to the same obligations of
confidence as the principals pursuant to Clause 8.1 and shall enter into secrecy
agreements in support of such obligations. Insofar as this is not reasonably
practicable, the principals shall take all reasonable steps to ensure that any
such employees, consultants and contractors are made aware of such obligations.
8.3 LB and the Customer each undertake not to disclose or permit to be
disclosed to any third party, or otherwise make use of or permit to be made use
of, any trade secrets or confidential information relating to the technology,
business affairs or finances of the other, any subsidiary, holding company or
subsidiary or any such holding company of the other, or of any suppliers,
agents, distributors, licensees or other customers of the other which comes into
its possession under this Agreement.
8.4 The obligations of confidence referred to in this Clause 8 shall not
extend to any information which:
8.4.1 is or becomes generally available to the public otherwise than
by reason of a breach by the recipient party of the provisions of this Clause 8;
8.4.2 is known to the recipient party and is at its free disposal
prior to its receipt from the other;
8.4.3 is subsequently disclosed to the recipient party as a matter
of right without being made subject to an obligation of confidence by a third
party;
8.4.4 LB or the Customer may be required to disclose under any
statutory, regulatory or similar legislative requirement, subject to the
imposition of obligations of secrecy wherever possible in that relation provided
that the party required to make the disclosure shall first notify the other
party who shall be allowed to take what action he considers necessary with
respect to the proposed disclosure; or
8.
22
8.4.5 is developed by an employee of the recipient party,
independently and without access to or use or knowledge of the information
supplied by the disclosing party.
8.5 The Customer acknowledges that:
8.5.1 LB Know-How and the Patent Rights are vested in LB or LB is
otherwise entitled thereto; and
8.5.2 the Customer shall not at any time have any right, title,
license or interest in or to LB Know-How, the Patent Rights or any other
intellectual property rights relating to the Process which are vested in LB or
to which LB is otherwise entitled.
8.6 LB acknowledges that, subject to Clause 4.5 above and save as
expressly stated herein. LB shall not by virtue of this Agreement be granted any
right, title or interest in the Cell Line, the Customer Information or the
Product expressed by the Cell Line.
8.7 The Customer shall not represent that it has any right, title, or
interest in or to LB Know-How, the Patent Rights or any other intellectual
property rights vested in LB or its Affiliates and shall not seek or apply to
register in its own name any such rights. The Customer shall do all such acts
and things and sign all such deeds and documents as LB may in its sole
discretion reasonably require in respect of any registration being made by LB or
its Affiliates in connection with such rights.
8.8 The obligations of LB and the Customer under this Clause 8 shall
survive the termination for whatever reason of the Agreement.
9. TERMINATION
9.1 LB and the Customer may each terminate the Agreement forthwith by
notice in writing to the other upon the occurrence of any of the following
events:
9.1.1 if the other commits a material breach of the Agreement which
(in the ca breach capable of remedy) is not remedied within the time permitted
within Clause 6.3.2 for default of payment by the Customer or otherwise within
thirty (30) days of receipt by the other of notice identifying the breach and
requiring its remedy; or
9.1.2 if the other ceases for any reason to carry on business or
compounds with or convenes a meeting of its creditors or has a receiver or
manager appointed in respect of all or any part of its assets or is the subject
of an application for an administration order or any proposal for a voluntary
arrangement or enters into liquidation (whether compulsorily or voluntarily) or
undergoes any analogous act or proceedings under foreign law.
9.2 Upon the termination of the Agreement:
9.2.1 for whatever reason LB shall promptly return all Customer
Information to the Customer and shall dispose of or return to the Customer the
Cell Line and any materials therefrom, as directed by the Customer;
9.
23
9.2.2 by LB pursuant to Clause 9.1 the Customer shall promptly
return to LB all LB Know-How it has received from LB;
9.2.3 for whatever reason the Customer shall not thereafter use or
exploit the Patent Rights or the LB Know-How in any way whatsoever other than
for its own internal purposes to meet regulatory requirements for the Product
(save in circumstances where LB terminates the Agreement pursuant to Clause 9.1
when no such use or exploitation is permitted);
9.2.4 for whatever reason LB may thereafter use or exploit the
Patent Rights or the LB Know-How in any way whatsoever without restriction; and
9.2.5 for whatever reason LB and the customer shall do all such acts
and things and shall sign and execute all such deeds and documents as the other
may reasonably require to evidence compliance with this Clause 9.2.
9.3 Termination of the Agreement for whatever reason shall not affect the
accrued rights of either LB or the Customer arising under or out of this
Agreement and all provisions which are expressed to survive the Agreement shall
remain in full force and effect.
10. FORCE MAJEURE
10.1 If either party is prevented or delayed in the performance of any of
its obligations under the Agreement by Force Majeure and shall give written
notice thereof to the other party specifying the matters constituting Force
Majeure together with such evidence as that party reasonably can give and
specifying the period for which it is estimated that such prevention or delay
will continue, the delayed party shall be excused from the performance or the
punctual performance of such obligations as the case may be from the date of
such notice for so long as such cause of prevention or delay shall continue and
the delayed party shall use its reasonable efforts, so far as it is able, to
stop the Force Majeure.
10.2 The expression "Force Majeure" shall be deemed to include any cause
affecting the performance by either party of the Agreement arising from or
attributable to acts, events, non-happenings, omissions or accidents beyond the
reasonable control of that party including but not limited to, LB being unable
to perform the Services due to scientific or technical reasons.
11. GOVERNING LAW, JURISDICTION AND ENFORCEABILITY
11.1 The construction, validity and performance of the Agreement shall be
governed by the laws of England.
11.2 In the event of a dispute arising between the parties which cannot be
resolved within sixty (60) days by the Steering Committee, such dispute shall be
referred to the Chief Executive's of the parties who shall, in good faith,
attempt to resolve the dispute in question. In the event the Chief Executives
cannot, following such attempts, within sixty (60) days resolve the dispute in
question, the parties shall have recourse to judicial methods resolution.
Subject to Clause 11.1, the party which is defending the dispute in question may
choose the venue for the hearing of the dispute.
10.
24
11.3 No failure or delay on the part of either LB or the Customer to
exercise or enforce any rights conferred on it by the Agreement shall be
construed or operate as a waiver thereof nor shall any single or partial
exercise of any right, power or privilege or further exercise thereof operate so
as to bar the exercise or enforcement thereof at any time or times thereafter.
11.4 The illegality or invalidity of any provision (or any part thereof)
of the Agreement or those Standard Terms shall not affect the legality, validity
or enforceability of the remainder of its provisions or the other parts of such
provision as the case may be.
12. MISCELLANEOUS
12.1 Neither party shall be entitled to assign, transfer, charge or in any
way make over the benefit and/or the burden of this Agreement without the
consent of the other (which consent shall not be unreasonably withheld or
delayed) save that either party shall be entitled to assign the benefit and/or
the burden of this Agreement to a company with which it may merge or transfer
its assets and undertakings, and shall give at least thirty (30) days prior
notice of such intended assignment. In the event Customer wishes to assign the
benefit and/or the burden of this Agreement to any third party which LB regards
as a direct competitor to LB in its business activities, LB shall be entitled to
serve notice to Customer of this fact and the parties shall meet prior to such
assignment being made agreeing on modifications to the Agreement to protect LB's
proprietary position. Such modifications shall include, but not be limited to,
the return of all LB Know-How, removal of all rights of access to any
documentation, or plant of LB which LB in its sole discretion regards as
proprietary or sensitive either to its own business or the business of its third
party customers. In the event the parties are unable to agree to such
modifications, either party may terminate the Agreement and LB shall be entitled
to receive a termination sum calculated to include the Price outstanding and
remaining to be paid for any stage of the Services which has been completed at
the date of termination and the full Price for any Batch of Product which has
been commenced but remains incomplete at the date of termination. For the
avoidance of doubt a Batch of Product shall be deemed to commence upon the date
the lead vial of the Cell Line is taken out of freeze in preparation for
commencing production of a Batch.
12.2 The text of any press release or other communication to be published
by or in the media concerning the subject matter of the Agreement shall require
the written approval of LB and the Customer.
12.3 The Agreement embodies the entire understanding of LB and the
Customer and there are no promises, terms, conditions or obligations, oral or
written, expressed or implied, other than those contained in the Agreement. The
terms of the Agreement shall supersede all previous agreements (if any) which
may exist or have existed between LB and the Customer relating to the Services.
12.4 Unless otherwise terminated in accordance with the provision set out
herein, this Agreement shall continue for a period of five (5) years from the
date hereof and may be terminated on three (3) years notice to expire at, or at
any time after the initial five (5) year period.
11.
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APPENDIX 1
At the date hereof, the contents of Appendix 1 to this Agreement constitute the
current agreed draft of the principles for shared manufacture of Product. The
contents of the document may change as a result of discussions between the
parties.
A detailed SOP will be prepared covering the responsibilities held by LB and
Customer for all aspects of manufacture and testing of bulk purified Product.
RESPONSIBILITIES
ITEM LONZA BIOLOGICS COULTER PHARMACEUTICAL, INC.
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* CONFIDENTIAL TREATMENT REQUESTED
1.