MASTER SERVICES AGREEMENT between SAMSUNG BIOLOGICS CO., LTD. and TG THERAPEUTICS, INC. MASTER SERVICES AGREEMENT
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Exhibit
10.2
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Execution
Version
between
SAMSUNG
BIOLOGICS CO., LTD.
and
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Table
of Contents
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SECTION
1
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DEFINITIONS
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3
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SECTION
2
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RELATED
AGREEMENTS AND EXHIBITS
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8
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SECTION
3
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MANAGEMENT OF
SERVICE
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9
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SECTION
4
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SERVICES
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10
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SECTION
5
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SERVICE
DESCRIPTIONS
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12
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SECTION
6
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CHANGES TO
THE SPECIFICATIONS, ANALYTICAL METHODS, MANUFACTURING PROCESS,
FACILITY OR EQUIPMENT
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16
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SECTION
7
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REGULATORY
APPROVALS AND INSPECTIONS
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17
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SECTION
8
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QUALITY
COMPLIANCE
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18
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SECTION
9
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CONSIDERATION
AND PAYMENT TERMS
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19
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SECTION
10
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CONFIDENTIALITY
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20
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SECTION
11
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OWNERSHIP OF
MATERIALS AND INTELLECTUAL PROPERTY
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21
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SECTION
12
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WARRANTIES
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22
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SECTION
13
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INDEMNIFICATION
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23
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SECTION
14
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DISCLAIMER OF
CONSEQUENTIAL DAMAGES; LIMITATION OF LIABILITY
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23
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SECTION
15
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TERM AND
TERMINATION OF AGREEMENT
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24
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SECTION
16
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ARBITRATION
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26
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SECTION
17
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MISCELLANEOUS
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27
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2
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THIS MASTER SERVICES AGREEMENT (this
“MSA”) is made
and entered into as of the date of last signature below (the
“Effective
Date”) by and between TG Therapeutics, Inc., a
Delaware corporation having its principal place of business at 0
Xxxxxxxxxx Xx., 0xx Xxxxx, Xxx
Xxxx, XX 00000 (“Client”), and Samsung BioLogics Co., Ltd., a company
with offices at 300, Songdo bio-daero, Yeonsu-gu, Incheon, 21987,
Republic of Korea (“SBL”). Client and SBL are
sometimes referred to herein individually as a “Party” and collectively as
the “Parties”.
WHEREAS, Client and SBL wish to enter
into a business relationship whereby SBL will provide Client with
certain biologics manufacturing services;
NOW, THEREFORE, in consideration of the
mutual promises, covenants and agreements hereinafter set forth and
for other valuable consideration, the Parties agree as
follows:
1.1 “Acceptance
Procedure” shall mean the review of the Batch Related
Documents and test(s) of the Product, if necessary, to verify that
the Product delivered meets the Specifications and complies with
Regulatory Authority requirements, conducted by Client after
SBL’s release of the Product, to determine whether to accept
the same, in accordance with the applicable QAG as modified from
time to time by written agreement between the Parties.
1.2 “Affected
Party” is defined in Section 17.3.
1.3
“Affiliate” shall mean any corporation, company,
partnership or other entity which directly or indirectly, controls,
is controlled by or is under common control with either Party
hereto. A corporation or other entity shall be regarded as
controlling another corporation or other entity if it owns or
directly or indirectly controls more than fifty percent (50 %) of
the voting stock or other ownership interest of the corporation or
other entity, or if possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of the
corporation or other entity or the power to elect or appoint more
than fifty percent (50 %) of the members of the governing body of
the corporation or other entity.
1.4 “Applicable
Laws” shall mean any and all applicable laws of any
jurisdiction which are applicable to any of the Parties in carrying
out activities described in this MSA or any PSAs that may be in
effect from time to time, and shall include all statutes,
enactments, acts of legislature, laws, ordinances, rules,
regulations, notifications, guidelines, directions, directives and
orders of any Regulatory Authority, statutory authority, stock
exchange, securities regulatory agency, tribunal, board, or court
or any central or state government or local authority or other
governmental entity in such jurisdictions.
1.5 “Background
IP” shall mean Intellectual Property which has been owned
and/or controlled by a Party prior to the Effective Date or
outside, or not relating to, the performance of the MSA and any
pertinent PSA.
1.7 “Batch
Record” is defined in the applicable QAG.
1.8 “Batch Related
Documents” means Manufacturing Documentation in support of
the SBL’s release of a Product.
1.9 “Binding
Year” shall be defined in the applicable PSA.
1.10 “Business
Day” shall mean a day on which commercial banks are open for
business in both the Republic of Korea and New York, New
York.
1.11 “Cell
Line” shall mean the aliquot of cells supplied to SBL by
Client to perform the Services and their progeny.
1.12 “Certificate
of Analysis” is defined in the applicable QAG.
1.13 “Certificate
of Compliance” is defined in the applicable QAG.
1.14 “Change”
is defined in Section 6.1.
1.15 “Client”
is defined in the preamble.
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1.16 “Client
Materials” shall mean Client reagents and other materials
supplied by Client or its third party supplier to be used in the
Service hereunder, as each is further defined in the PSA and/or
applicable QAG. In the case of a Drug Product PSA, Client Materials
shall also include Drug Substance and/or other active
pharmaceutical ingredients, which may or may not be Manufactured by
SBL.
1.17 “Client
Technology” shall mean know-how, technology, research and
other information of Client including and relating to the
Manufacturing Process, analytical methods, quality control
analysis, specifications, transportation and storage requirements
provided by Client to SBL in connection with this MSA and
applicable PSA.
1.18 “Clinical
Product” shall mean a Drug Substance or Drug Product which is
Manufactured by SBL pursuant to a PSA and which is to be used by
Client in a research study or studies that investigate the safety
of human use or prospectively assign human participants or groups
of humans to one or more health-related interventions to evaluate
the effects on health outcomes.
1.19 “Commercial
Product” shall mean a Drug Substance or Drug Product which is
Manufactured by SBL which is intended for commercial sale and use
by humans and for importation or exportation into countries or
regions designated in each PSA.
1.20 “Commercially
Reasonable Efforts” shall mean with respect to an activity to
be carried out by a Party, the carrying out of such activity in a
diligent manner, which, in the case of SBL, requires using the
efforts of sufficient numbers of personnel appropriately qualified
by experience and training, in the application of such resources as
would be reasonably applied by a qualified manufacturer of
biologics for human use adhering to recognized standards in the
manufacture and testing of such products, or, in the case of
Client, using such efforts as would be typically be used in the
biopharmaceutical industry by companies of comparable resources and
expertise. “Commercially Reasonable Efforts” requires
prompt assignment of responsibility for such task or activity to
specific qualified employee(s) and allocation of resources designed
to advance progress with respect to such task or activity but does
not require the taking of actions which would require either Party
to violate Applicable Laws or break any existing contractual
commitments with third parties which were entered into prior to the
Effective Date, the performance of which at such time was not
reasonably foreseeable to be in conflict, or otherwise
inconsistent, with such Party’s obligations under the MSA or
any PSA.
1.21 “Common Raw
Materials” is defined in Section 5.3.1.
1.22 “Confidential
Information” is defined in Section 10.1.
1.23
“Control” (including, with correlative meanings,
“Controlled”) means possession, directly or indirectly,
of power to direct or cause the direction of management or policies
(whether through ownership of securities or other ownership
interest, by contract or otherwise) of that person or entity and/or
the ownership of more than 50% of the voting shares of that person
or entity.
1.24 “Core
Team” is defined in Section 3.3.
1.25 “current Good
Manufacturing Practices” or “cGMP” shall mean
current good manufacturing practices and regulations applicable to
the Manufacture of Product that are promulgated by any Regulatory
Authority, including as promulgated under and in accordance with
(i) the U.S. Federal Food, Drug and Cosmetic Act, Title 21 of the
U.S. Code of Federal Regulations, Parts 210, 211, 600, 601 and 610,
(ii) relevant EU legislation, including European Directive
2003/94/EC or national implementations of that Directive, (iii)
relevant guidelines, including the EU Guidelines for Good
Manufacturing Practices for Medicinal Products (Eudralex Vol. 4 and
Annexes thereto), (iv) International Conference on Harmonisation
Good Manufacturing Practice Guide for Active Pharmaceuticals
Ingredients and (v) and any analogous set of regulations,
guidelines or standards as defined, from time to time, by any
relevant Regulatory Authority having jurisdiction over the
development, manufacture or commercialization of the Product, as
applicable, in each case as in effect as of the date such
manufacturing for the Product are or were conducted.
1.26
“Damages” means any damages, costs, expenses, fines,
penalties (including reasonable attorneys’ fees and costs),
losses and liabilities.
1.27 “Disclosing
Party” is defined in Section 10.1.
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1.28 “Drug
Product” means a finished or intermediate dosage form that
contains a Drug Substance, generally, but not necessarily, in
association with one or more other ingredients.
1.29 “Drug
Substance” means an active ingredient that is intended to
furnish pharmacological activity or other direct effect in the
diagnosis, cure, mitigation, treatment, or prevention of disease or
to affect the structure or any function of the human body, but does
not include intermediates used in the synthesis of such
ingredient.
1.33
“Facility” shall mean one or more of the manufacturing
facilities of SBL where the Services shall be performed, located at
300, Songdo bio-daero, Yeonsu-gu, Incheon, 21987, Republic of
Korea.
1.34 “FDA”
shall mean the United States Food and Drug Administration or any
successor agency thereto.
1.35 “Firm
Period” shall be defined in the applicable PSA.
1.37
“Implementation Plan and Budget” is defined in Section
6.2(b).
1.38 “Indemnified
Party” is defined in Section 13.3.
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1.41 “Joint
Steering Committee” or “JSC” is defined in
Section 3.2.1.
1.42
“Manufacturing” or to “Manufacture” shall
mean the manufacturing of the Product, and any services relating to
such manufacturing, including, but not limited to, testing, quality
control, documentations, archiving, handling, storage and
packaging, release and delivery of the Product, to be performed by
SBL at the Facility under the MSA and any applicable
PSA.
1.43 “Manufacturing
Documentation” shall mean data acquired and generated,
documents and records describing or otherwise related to the
Manufacturing Process including, without limitation: documents and
records consisting of or containing process descriptions,
requirements and specifications; Client Materials and
Specifications; analytical methods, process trend and variability
data; validations protocols and reports; process development
reports; Batch Records; Batch Related Documents, and SOPs,
including, without limitation, SOP’s for the Raw Materials
handling, the Manufacturing operations, equipment operation,
in-process, final Product and stability quality control testing,
quality assurance, validation, storage and shipping.
1.44 “Manufacturing
Process” shall mean the mutually agreed production process
and analytical methods for the Manufacturing of the Product
pursuant to the applicable PSA, as summarily described in the
applicable QAG and as described in the Manufacturing Documentation,
as such process may be changed from time to time in accordance with
the MSA.
1.45 “Manufacturing
Process Transfer” means the Commercially Reasonable Efforts
of the parties undertaken pursuant to the Manufacturing Process
Transfer Plan to transfer the Manufacturing Process (together with
copies of relevant books and records) in SBL’s possession or
under its control, to Client as set forth in greater detail in the
Manufacturing Process Transfer Plan. SBL shall only be obligated to
use its Commercially Reasonable Efforts in the implementation of
the Manufacturing Transfer Plan, and in no case shall SBL personnel
be required to visit the site of Client or any third party
manufacturer. For the avoidance of doubt, the foregoing prohibition
shall not be construed as a basis for SBL refusing to assist in the
transfer of analytical methods to an independent laboratory,
including a visit by SBL personnel to such site to assist in method
transfer, if, and only as, reasonably necessary, and at
Client’s cost and expense. For the avoidance of doubt,
Manufacturing Process Transfer shall include, without limitation,
the transfer of data, information, or samples of validated or SBL
manufactured or partially manufactured Products or other indicia
measured at various points during Manufacture, to the extent SBL
possesses such data, information, or samples. SBL shall not
be
obligated to deliver the proprietary process information contained
in any drug master file with respect to which SBL has granted
Client a right of reference. SBL shall provide Manufacturing
Process Transfer services with a capacity of one (1) full time
employee equivalent (“FTE”) month for each of upstream,
downstream and analytics, for a total maximum of three (3) FTE
months. SBL will have no obligation to provide Manufacturing
Process Transfer services more than twelve (12) months after
termination of the MSA or applicable PSA. For clarity, SBL's
assistance shall be time- based, and SBL shall in no way guarantee
or ensure that after Manufacturing Process Transfer services is
complete, Client or its third-party manufacturer will be able to
manufacture the Product.
1.48
“Non-Conforming Product” shall mean an entire Batch of
Product, any portion of which fails to conform to the
Specifications, cGMP (if applicable), and any other mutually agreed
upon written express requirements for SBL to follow under the
applicable PSA and the applicable QAG.
1.49 “Party”
and “Parties” is defined in the preamble.
1.50 “Pilot
Batch” means a Batch of Product designated as a pilot Batch
which shall not comply with cGMP and is not required to meet the
Specifications.
1.51 “Pre-Approval
Inspection” means an on-site inspection of the Facility by
the Regulatory Authority prior to granting the Regulatory Approval
for a Commercial Product as required by various Regulatory
Authorities to ensure that the Manufacturing Process and the
Facility meet the appropriate requirements and comply with
cGMP.
1.52 “Process
Validation Batch” shall mean a Batch of Commercial Product
produced from a process validation run conducted by SBL hereunder
to (i) demonstrate and document the consistency and reproducibility
of the Manufacturing Process at the Facility, and (ii) support the
Regulatory Approval of both the Product Manufactured and the
Manufacturing Process at the Facility each as defined in the
Project Plan.
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1.53
“Product” shall mean Clinical Product or Commercial
Product to be Manufactured by SBL pursuant to this MSA and any
applicable PSA.
1.54 “Product
Purchase Commitment” is defined in Section 5.7.
1.55 “Product
specific agreement” or “PSA” is defined in
Section 2.1.
1.56 “Project
Management Team Leader” is defined in Section
3.3.2.
1.57 “Project
Plan” shall mean a formal, approved document used to guide
both project execution and project control. The primary uses of the
Project Plan are to document planning assumptions and decisions,
facilitate communication among project stakeholders, and document
approved scope, cost, and schedule baselines. The Project Plan will
contain the description and overall objectives of the Services for
Manufacturing a Product and shall include, among other things: (a)
JSC and Core Team membership rosters, (b) change request
procedures, (c) details, intentions, and deliverables for
Technology Transfer, (d) project schedule, (e) detailed procurement
plan, as needed, and (f) project budgets and invoicing
plans.
1.58 “PSA Effective
Date” shall mean the effective date of any PSA governed by
this MSA.
1.59 “Purchase
Order” is defined in Section 5.6.
1.60 “Quality
Agreement” or “QAG” shall mean that certain
quality agreement between the Parties that governs their respective
responsibilities related to quality systems and quality
requirements for the Product(s) Manufactured hereunder, including
quality control, testing and release of such Product(s) at the
Facility. Clinical Products and Commercial Products shall have
separate forms of QAGs.
1.61
“Quarter” means each period of three (3) consecutive
calendar months beginning on January 1, April 1, July 1, or October
1.
1.62 “Raw
Materials” shall mean those materials that are used in the
Manufacturing Process, including, but not limited to, chemicals,
reagents, filters, excipients, disposable consumables, and
secondary packaging materials. Raw Materials exclude the Client
Materials.
1.63 “Receiving
Party” is defined in Section 10.1.
1.64 “Reference
Standards” shall mean materials for standards prepared by
Client and/or SBL in accordance with the applicable
QAG.
1.65 “Regulatory
Approval” shall mean all approvals, licenses, registrations
or authorizations thereof of any national, regional, state or local
regulatory agency, department, bureau or other governmental entity
in any jurisdiction where the Product is marketed or intended to be
marketed, necessary for the manufacture and sale of the Product,
which manufacturing includes the Manufacturing of the Products at
the Facility.
1.66 “Regulatory
Authority” shall mean any national (e.g., the FDA),
supra-national (e.g., the EMA), regional, state or local regulatory
agency, department, bureau, commission, council or other
governmental entity, in any jurisdiction responsible for granting
the Regulatory Approval.
1.67 “SBL
Assignable Error” means: negligence, fraud, recklessness,
willful misconduct, or material breach of cGMP (if applicable) on
the part of employees, consultants, contractors, sub-contractors,
agents or representatives of SBL.
1.68
“Service” or “Services” is defined in
Section 2.1.
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1.72 “Standard
Operating Procedure(s)” or “SOP(s)” shall mean
the standard operating procedures established by and mutually
agreed upon by both Parties regarding the Manufacturing
Process.
1.73 “Technology
Transfer” shall mean the activities by the Parties necessary
to Manufacture the Product for Client at the Facility or otherwise
conduct the Services, as further described in the applicable PSA
and/or Project Plan which may include: (i) transfer of the Client
Technology and Client Material from Client to SBL; (ii)
implementation of the Manufacturing Process at the Facility,
including establishing a small scale Manufacturing Process model at
SBL; (iii) all Manufacturing Process fit activities, including
required small- and large-scale process development and validation
work as allocated between the Parties to SBL and process
engineering required to modify / equip, qualify and validate the
Facility for the Manufacturing of the Commercial Product; (iv)
stability testing, if applicable, for the Product required for
licensure; (v) comparability testing to the appropriate reference
product, and (vi) regulatory support for all Regulatory Approvals,
each as further described in the Project Plan.
SECTION
2 RELATED
AGREEMENTS AND
EXHIBITS
2.2 Project
Plan. Concurrently with the execution of a PSA or within a
reasonable time after the PSA effective date, the Parties shall
agree upon a Project Plan which will specify in detail scope and
schedule of the Services, including Technology Transfer and
Manufacture. The Project Plan shall also set forth the JSC members
(if applicable), Core Team members, and Project Management Team
Leader for the Services as well as the frequency and duration of
meetings. The Project Plan may be updated as needed by the mutual
agreement of the Client and SBL and is governed by and incorporated
into the applicable PSA by reference. If there is a conflict
between the Project Plan and the applicable PSA, the PSA shall
control. If any of the assumptions shared in writing by the Parties
and on which the Parties have relied in defining the scope of the
activities required to effect the Technology Transfer and/or other
Services including but not limited to Manufacture, and the
associated timeframes, fees, expenditures and costs proves to be
invalid, or if for any reason other than a Party’s negligence
in planning, it becomes apparent that additional activities are
required as part of or in connection with the Technology Transfer
and/or other Services including but not limited to Manufacture, the
Parties shall (acting reasonably and in good faith) discuss and
seek to agree appropriate revisions to the Technology Transfer
activities, and associated timelines and pricing.
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SECTION
3
MANAGEMENT OF
SERVICE
3.1 General.
Each Party will be responsible for its internal decision making
process and for reasonably informing the other Party of decisions
affecting the Service in a regular and timely manner. Without
limiting the foregoing, the Parties shall establish the joint
committees or teams set forth herein to advise the Parties on
certain matters including, without limitation, Facility
modification, Technology Transfer, and optimization of the
Manufacturing operation relating to the Product.
3.2
Joint Steering Committee.
3.2.1 Formation and
Composition. The applicable Project Plan will set forth a
Joint Steering Committee for that Product (the “Joint Steering Committee” or
“JSC”) if the
Parties mutually agree that such JSC is necessary. The JSC will be
a cross-functional committee composed of an equal number of
representatives appointed by each of Client and SBL with each of
Client and SBL having at least three (3) representatives, and with
one (1) representative from each of Client and SBL having oversight
for quality activities, and with one (1) representative from each
of Client and SBL having oversight for manufacturing and supply
chain activities, including the transfer and implementation of the
Manufacturing Process at the Facility. Either Party may
replace
any or all of its representatives at any time. Such Party shall
notify, in writing, of such replacement to the other
Party.
3.2.2 Responsibilities.
The JSC shall (i) establish and oversee the governance structure
for the Service including the formation of any subcommittee
hereunder; (ii) monitor any Facility modification and the
Technology Transfer and Manufacturing strategy of the Product at
the Facility, including strategies for the Regulatory Approval of
the Facility to Manufacture the Product; (iii) provide strategic
guidance to the Core Team as required by the Project Plan; (iv)
conduct high level project stage reviews with the Core Team as
required by the Project Plan at appropriate milestones or
completion of key deliverables or a sequence of event to review and
approve key deliverables, evaluate the Core Team’s progress
and performance, all in order to ensure that the Manufacturing
Process is being implemented appropriately; (v) advise on and/or
resolve business, manufacturing, supply chain, quality, regulatory
or other issues unresolved at the Core Team level; (vi) review and
recommend for approval by the Parties any changes to the MSA or the
applicable PSA; (vii) review and approve changes to the
Specifications, analytical methods, the Manufacturing Process, the
Facility or equipment as escalated to the JSC by the Core Team or
by a Party pursuant to Section 3.6 below; (viii) review completion
of the Service; (ix) settle
disputes or disagreements unresolved by a subcommittee; and (x)
perform such other functions as appropriate to further the purposes
of the MSA as determined by the Parties. For the avoidance of
doubt, the JSC shall be a reviewing and consultative body, without
authority to make decisions not otherwise concurred in by the
Parties.
3.3 Core
Team.
3.3.1 Formation and
Composition. The applicable Project Plan will set forth a
Core Team for that Product (the “Core Team”). The Core Team shall
be composed of an equal number of representatives from each of SBL
and Client, with up to four (4) representatives appointed by each
of Client and SBL. Such representatives will include the Project
Management Team Leaders of Client and SBL as well as such of their
representatives from manufacturing, technical operations, supply
chain, quality assurance, quality control, regulatory affairs or
other individuals with expertise and responsibilities for those
functions required from time-to-time to execute the Facility
modification, the Technology Transfer and Manufacturing. Either
Party may replace any or all of its representatives at any time.
Such Party shall notify, in writing, of such replacement to the
other Party.
3.3.2 Appointment of
Project Management Team Leader. Each Party shall appoint a
Project Management Team Leader (each, a “Project Management Team Leader”)
to act as the primary contact for such Party in connection with
matters related to the Service. Each Project Management Team
Leader, unless otherwise mutually agreed, shall serve as the
leaders of the Core Team. A Party may replace its Project
Management Team Leader at any time and from time to time for any
reason. Such Party shall notify, in writing, of such replacement to
the other Party.
3.3.3 Responsibilities.
The Core Team shall (i) develop and maintain the Project Plan and
monitor, review and manage the Service according to the MSA and
applicable PSA; (ii) conduct project stage reviews with the JSC as
required by the Project Plan at appropriate milestones or
completion of key
deliverables or a sequence of event to review key deliverables,
review its progress and performance against plans; (iii) develop a
change management process to identify, review and recommend any
significant changes in the project scope, time, fee or risk to the
JSC; (iv) investigate
and resolve business, manufacturing, supply chain, quality,
regulatory or other issues arising during the Service; (v) review
and escalate to the JSC, as needed, changes to the Project Plan or
applicable QAG; (vi) review and recommend to the JSC changes to the
Specifications, analytical methods, the Manufacturing Process, the
Facility or equipment; (vii) coordinate the activities of the
Parties relating to the Manufacturing hereunder, including but not
limited to: managing the technical operations and quality aspects
of routine manufacturing, conducting Product testing technical
operations and quality aspects of routine manufacturing, conducting
Product testing and release, and managing supply chain activities
including shipping and delivery logistics; (viii) report
periodically on operation and quality progress and performance; and
(ix) perform such other tasks and undertake such other
responsibilities as may be specifically delegate to the Core Team
by mutual agreement of the Parties. For the avoidance of doubt, the
Core Team shall be without authority to make decisions not
otherwise concurred in by the Parties.
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3.4
Meetings
3.4.1 JSC. The JSC
shall meet by audio or video teleconference or in-person as agreed
by the JSC or as necessary to make determinations as required of
it. Any member of the JSC may designate a substitute to attend and
perform the functions of that member at any meeting of the JSC and
each Party may, in its reasonable discretion, invite non-member
representatives of such Party to attend such meeting with advance
notice to the other Party; provided, however, such non-member
representatives are subject to enforceable obligations of
confidentiality to the inviting Party.
3.4.2 Core Team.
The Core Team shall meet by audio or video teleconference or
in-person as agreed by the Core Team. Any member of the Core Team
may designate a substitute to attend and perform the functions of
that member at any meeting of the Core Team and each Party may, in
its reasonable discretion, invite non-member representatives of
such Party to attend such meetings with advance notice to the other
Party; provided, however, such non-member representatives are
subject to enforceable obligations of confidentiality to the
inviting Party.
3.4.3 Travel
Expenses. Each Party shall be responsible for all of its own
expenses of traveling to and participating in any joint committee
or team meeting, including the JSC and Core Team.
3.5 Decisions.
All decisions of JSC, the Core Team and any other joint committee
or team formed under the MSA or any applicable PSA, except as
expressly set forth herein, shall be made by the unanimous
agreement of its members or their designated representatives, with
a Party’s members of designated representatives having, in
the aggregate, one (1) vote (with the casting of fractional votes
being impermissible), and shall be reflected in written meeting
minutes which summarily address topics discussed, delegation of
work, schedules and decision of such committee or team. SBL shall
prepare written minutes of the JSC and Core Team within fifteen
(15) Business Days of the meeting to which they relate, which shall
be subject to approval by the authorized representatives of the
Parties; provided, however, no joint committee or team herein may
amend or waive any provision of the MSA or applicable
PSA, including without limitation, the financial terms set forth in
Section 9. The MSA or any PSA may be amended, and provision of the
MSA or any PSA may be waived, pursuant to Section 17.9 only.
3.6
Disputes.
3.6.1 General. In
the event that the Core Team and any other joint committee or team
formed under the MSA or any applicable PSA, is unable, despite the
good faith efforts of all members, to resolve a disputed issue that
is within the purview of such joint committee or team within
ten (10) Business Days
of meeting request by either Party, the disputed issue shall be
referred immediately by such joint committee or team to the JSC. If
the disputes still cannot be resolved within an additional twenty
(20) Business Days of meeting request by the JSC, the matter may be
handled in accordance with Section 16.
3.6.2 Project Management
Team Leaders. Subject to Section 3.6.1, the Project
Management Team Leaders (or their respective designees) will in
good faith attempt to mutually resolve in a timely fashion any
disagreement with respect to the Service hereunder, which could
reasonably affect the quality of the Manufacturing of the Product,
including without limitation, the related management processes and
operations, control of production planning and scheduling,
prioritization decisions, allocation of resources, timing of
in-process and release testing, oversight of auxiliary facilities
(e.g., in-process tests that need to be conducted at laboratories
other than those at the Facility), Facility modification, the
Technology Transfer, registration and troubleshooting decisions,
and any other matters relating to implementation of the
Manufacturing Process and the Manufacturing of the Product
hereunder.
SECTION
4 SERVICES
4.3 Project
Personnel. SBL shall
adequately staff the Facility with personnel necessary (including
consultants and contractors), who have sufficient technical
expertise by virtue of training and experience to perform its
obligations under the MSA and any applicable PSA. Notwithstanding
anything to the contrary and in addition to the JSC and Core Team
meetings described in Section 3 above, Client and
SBL may arrange for core project personnel to have regular
meetings, which shall be by audio or video teleconference. The
Project Plan shall specify the frequency and duration of such
meetings; provided that the associated costs for meetings requested
solely by Client in excess of the number set forth in the Project
Plan shall be passed through to Client by SBL, unless such meeting
is for the purpose of addressing a deficiency in Manufacturing
caused by SBL Assignable Error or assessing remediation
thereof.
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4.6
Access to the Facility.
4.6.1 SBL shall
accommodate visits by Client personnel in the Facility during
operational hours during the Term, upon Client’s request, to
coordinate, expedite and guide the Service. Client will provide SBL
with written notice at least one (1) month prior to any visit, and
the Parties shall decide on a mutually agreeable date, duration,
visitor list, and agenda prior to the visit. Additionally, Client
may, at no cost to SBL, request up to two (2) of its personnel to
be on-site at the Facility to observe and consult with SBL during
the performance of Services under this MSA and such additional
personnel in such numbers as deemed necessary by Client shall be
accommodated upon mutual agreement. SBL shall make reasonable
efforts to provide such Client personnel working space and access
to guest wireless connections. All applicable out- of-pocket
expenses associated with such on-site Client personnel shall be
passed through to Client by SBL.
4.6.2 While at the
Facility, all such Client personnel shall have reasonable access to
all areas as are relevant to SBL’s performance of the Service
hereunder, provided that SBL may reasonably restrict Client
personnel’s access to those portions of the Facility as it
deems reasonably necessary for
safety, confidentiality and cGMP, and visitors admitted pursuant to
this Section, upon request of SBL, shall comply with SBL policies
and procedures as they apply to SBL personnel generally while at
the Facility.
4.7 Manufacturing
Documentation. SBL shall maintain in the
English language, complete, true and accurate Manufacturing
Documentation, and shall keep them in strict confidence and shall
not use them for purposes other than providing or performing the
Service or other obligations hereunder. SBL shall maintain all such
Manufacturing Documentation for at least that period specified in
the applicable QAG or such longer period as may be required by
Applicable Law. Upon written request of Client and at mutually
agreeable times, Client shall have the right to review
Manufacturing Documentation, including the Batch Records, at the
Facility as further defined in the applicable QAG; provided,
however, SBL shall not delay any such request of Client for more
than fifteen (15) Business Days. Client may also request scanned or
printed copies of such Manufacturing Documentation, but shall be
responsible for reasonable costs associated therewith. SBL shall
record and maintain such records, data, documentation and other
information in the language as so required in the applicable QAG or
as so required by a Regulatory Authority and in compliance with
Applicable Law, or as otherwise may be set forth in an applicable
PSA. The form and style of Batch documents, including, but not
limited to, Batch production records, lot packaging records,
equipment set up control, operating parameters, and data printouts,
raw material data, and laboratory notebooks are the exclusive
property of SBL. Notwithstanding anything to the contrary, SBL SOPs
not specific to the Client’s Products may be provided to
Client for on-site review if deemed necessary by both SBL and
Client. Such SOPs cannot be removed from the SBL premises, copied,
photographed or otherwise replicated, but to the extent required
for filing in connection with any Regulatory Approval related to a
Product including, but not limited to, an IND, BLA or MAA, SBL will
file, maintain and update such SOPs with appropriate Regulatory
Authorities by means of a Drug Master File, Common Technical
Document or other means by which such SOPs may remain confidential,
but available by reference to Client to effect Regulatory
Approvals, and SBL shall formally authorize such
reference.
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5.1 Technology Transfer
Requirements. The Parties shall make their
personnel available at the Facility to enable the transfer and
implementation in accordance with the Project Plan. Client shall
transfer to and grant SBL the limited license set forth below in
Section 11.2 in respect of the Reference Standards, Client
Technology, Client Materials, and Cell Line In the event that
Client agrees to utilize SBL’s SharePoint portal for
Technology Transfer, Client agrees that (a) in the event of any
relevant change that affects a Client user’s authorization to
use such portal, Client shall promptly notify SBL so that SBL may
disable their usernames and remove / change passwords in order to
secure the SBL Portal and (b) Client shall ensure that all of
Client’s users have up-to-date antivirus software installed
on the computer devices used to access such portal.
5.2 Facility
Modification and Equipment. Except as otherwise specifically
provided herein to the contrary, and upon mutual agreement of the
Parties, Client and SBL will agree on what equipment in the
Facility is necessary to perform the Services, and if it is
necessary or Client deems it necessary to procure additional
equipment beyond that which is in the Facility as of the applicable
PSA Effective Date, the Core Team shall determine equitable
allocation of costs including, as applicable, procurement,
validation, installation, maintenance, commissioning, and
decommissioning/validation (which
determination shall be escalated to the JSC if in dispute).
Thereafter, if any additional equipment is necessary at the request
of Client, such costs shall be dealt with by the Change provisions
of this MSA. SBL shall modify the Facility and engineer, procure,
install, commission, test, qualify, troubleshoot and validate
necessary equipment and instruments in order to accommodate
Manufacture of the Product at the Facility, as further described in
the Project Plan and applicable QAG. Except as provided in this
Section 5.2 or any applicable PSA, the Facility, Warehouse and all
the equipment shall be maintained, tested, validated, calibrated
and qualified for their intended uses by SBL at SBL’s
expense. For the avoidance of doubt, it shall be the responsibility
of SBL to effect such changes at the Facility including, but not
limited to changes in equipment, as are required by changes in
laws, rules or regulations related to the manufacture, handling,
storage, packaging and disposal of biologics generally, compliance
therewith being necessary in order for SBL to hold itself out as a
qualified manufacturer of biologics for human use. It shall be the
responsibility of SBL to obtain, maintain and pay all costs
associated with establishment licenses required for the Facility,
the Warehouse and any other facilities used by SBL in the
performance of its obligations under this MSA and any applicable
PSA.
5.3 Raw
Materials.
5.3.1 Management.
SBL shall procure and maintain a reasonable quantity of the Raw
Materials, required for the Services in accordance with the MSA and
any applicable PSA, as further described in the applicable QAG. On
a per-Product basis, the Core Team shall finalize the
categorization of the Raw Materials into Raw Materials which shall
be used for that specific Product only (“Specialized Raw Materials”), Raw
Materials which can be used across multiple products and/or
customers (“Common Raw
Materials”), and Raw Materials which will not be
charged on a cost-plus basis to the Client, and shall attach such
list to the applicable PSA. Such list of Common Raw Materials and
Specialized Raw Materials may be amended from time to time, subject
to the Parties’ approval. Prior to the commencement of
Manufacture, the Core Team shall agree on estimates for quantities
of Raw Materials anticipated to be consumed in the Manufacture of
each Batch. Although SBL will make Commercially Reasonable Efforts
to use no more than those amounts, SBL will not be responsible for
Raw Materials used in excess of the agreed-upon estimate; provided,
however, that SBL shall be responsible for any such excessive use,
loss, spoilage, or waste of such Raw Materials caused by an SBL
Assignable Error. In order to become effective, SBL’s
reasonable strategies regarding Raw Material safety stock and
sourcing from qualified vendors shall be agreed upon by Client. In
the event SBL is not able to utilize any capacity reserved to
Manufacture Product according to an agreed-upon forecast or
manufacturing plan due to Client’s failure to agree to such
reasonable strategies, then Client shall be responsible for the
costs of such reserved capacity regardless of whether it is
utilized or not.
5.3.2 Data
Transfer.
Client and SBL shall agree on the Specifications for the Raw
Materials, including without limitation analytical methods,
supplier information including supplier site information, and other
information concerning the stability, storage, and safety thereof
that are available and required for the Manufacturing hereunder, as
further described in the applicable QAG.
5.3.3 Testing and
Evaluation. SBL or vendors qualified by SBL shall perform
all testing and evaluation of the Raw Materials as required by the
Specifications for the Raw Materials and the cGMPs, as further
described in the applicable QAG, if applicable. SBL shall not
release any Raw Materials from quarantine that do not meet their
Specifications or are not otherwise suitable for cGMP
use.
5.3.4 Storage.
SBL shall secure sufficient and suitable cGMP storage facilities
and/or equipment at the Facility that meet the Specifications for
storage of the Raw Materials. SBL shall preserve and protect the
Raw Materials from loss and damage while in SBL’s possession,
consistent with reasonable technical and business judgment, the
Specifications and any relevant SOPs or other instructions provided
by Client; provided however, SBL shall be responsible for loss of
Raw Materials after receipt by SBL and prior to Manufacture only in
cases of SBL Assignable Error or breach of this Section 5.3.4. In
all other cases, Client shall be responsible for the risk of loss
of the Raw Materials. Upon obsolescence, or upon expiration or
earlier termination of a PSA, Client shall be responsible for the
loss of Raw Material purchased in reliance on a Purchase Order,
Firm Period, or Binding Year which Client fails to honor and SBL
cannot reasonably otherwise utilize such Raw Material.
5.3.5 Service Fee Related
to Raw Material. Common Raw Materials and Specialized Raw
Materials will be charged on a cost-plus basis to Client in
accordance with Sections 9.1(ii) and 9.2.2, subject to any changes
in the scope of work.
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5.4
Client Materials.
5.4.1 Management.
Client shall provide to SBL free of charge, either by itself or
through its third party supplier, Client Materials in amounts
reasonably necessary to carry out the Services as agreed by the
Parties. The applicable PSA shall set forth the exact timing of
such provision of Client Materials to SBL. SBL shall make
Commercially Reasonable Efforts to import the Client Materials to
the Republic of Korea in a timely manner, provided that Client
provides reasonable assistance. The title to such Client Materials
shall remain at all times with the Client. Prior to the
commencement of Manufacture, the Core Team shall agree on estimates
of quantities for Client Material anticipated to be consumed in the
Manufacture of each Batch. Although SBL will make Commercially
Reasonable Efforts to use no more than those amounts, SBL will not
be responsible for Client Materials used in excess of the
agreed-upon estimate; provided, however, that SBL shall be
responsible for any such excessive use, loss, spoilage, or waste of
such Client Materials caused by an SBL Assignable Error, and
further provided that SBL shall not be liable for the monetary
value of Cell Line loss if it complied with risk mitigation
measures to protect the Cell Line, as reasonably agreed to by the
Parties and set forth in the Quality Agreement. In order to become
effective, SBL’s reasonable strategies regarding Client
Material safety stock and sourcing from qualified vendors shall be
agreed to by Client. In the event SBL is not able to utilize any
capacity reserved to Manufacture Product according to an
agreed-upon forecast or manufacturing plan due to Client’s
failure to agree to such reasonable strategies, then Client shall
be responsible for the costs of such reserved capacity regardless
of whether it is utilized or not.
5.4.2 Data
Transfer. Client shall provide SBL with the Specifications
of the Client Materials, including without limitation analytical
methods, supplier information, and other information concerning the
stability, storage, and safety thereof that are available and
required for the Manufacturing hereunder, as further described in
the applicable QAG.
5.4.3 Testing and
Evaluation. SBL shall perform testing of the Client
Materials in accordance with the applicable QAG and/or
Client’s instruction prior to the performance of the
Manufacturing hereunder, in order to determine whether such Client
Materials meet the Specification described in the applicable QAG
(if applicable). SBL shall inform Client of (a) any damage to the
Client Materials received that is visually obvious (e.g., damaged
or punctured containers and temperature monitoring results outside
of predetermined Specifications) within five (5) Business Days
after SBL’s receipt of the Client Materials and (b) any
non-conformance of the Client Materials to Specification either:
(i) within sixty (60) calendar days after SBL’s receipt of
the Client Materials or (ii) if release testing of Client Materials
is not to be performed until it is needed for Manufacture, within
sixty (60) calendar days after such release testing is performed;
or (iii) as is otherwise agreed between the Parties. If, prior to
performing any Service on the Client Materials, SBL determines that
such Client Materials are defective or damaged, SBL shall not
perform the Service on such Client Materials and shall follow
Client’s written instructions regarding disposal or return of
such Client materials to Client, such disposal or return to be at
Client’s discretion and
cost.
5.4.4 Storage. SBL
shall secure sufficient and suitable cGMP storage facilities and/or
equipment at the Facility that meet the Specifications for storage
of reasonable quantities of Client Materials in light of quantities
of Product anticipated to be Manufactured. SBL shall preserve and
protect the Client Materials from loss and damage while in
SBL’s possession, consistent with reasonable technical and
business judgment, the Specifications and any relevant SOPs or
other instructions provided by Client; provided that SBL shall only
be liable for loss and damage after receipt/acceptance by SBL and
prior to Manufacture in cases of SBL Assignable Error or breach of
this Section 5.4.4. In all other cases, Client shall be responsible
for the risk of loss of the Client Materials.
5.4.5 Service Fee Related
to Client Material. Handling fees relating to the Client
Material will be charged to Client in accordance with Sections
9.1(iii) and 9.2.3.
5.5 Forecasts.
For each Commercial Product, the Parties shall determine a mutually
agreeable mechanism for forecasting of each Product, which shall be
detailed in writing and attached to each relevant PSA. For Clinical
Product, the Parties shall agree upon the number and schedule of
Batches to be Manufactured by SBL in the applicable
PSA.
5.7 Product Purchase
Commitment. As further set forth in a PSA, during the Term
the Parties may agree that Client will purchase a minimum quantity
of batches of a certain Product in a given year (a
“Product Purchase
Commitment”).
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5.8
Batch Failure during Manufacture
5.8.1 If, during
Manufacture of a Batch and prior to SBL’s Batch release, the
Core Team determines that a Batch is Non-Conforming Product (a
“Batch
Failure”), SBL shall take Commercially Reasonable
Efforts to promptly Manufacture (except to the extent prohibited by
cGMP or applicable QAG) and deliver to Client a replacement Batch
on a date to be mutually agreed by the Parties, which Batch shall
be invoiced and paid for as if it were the failed Batch
(i.e., Client shall only be
invoiced for the Batch conforming to the Specifications and
Manufactured in compliance with cGMP, and actually delivered).
Client shall be responsible for the costs and fees of the Raw
Materials and Client Materials for the replacement Batch as if it
were the failed Batch (i.e., Client shall only be invoiced the
applicable cost of the Raw Materials and Client Materials actually
used to Manufacture the conforming, cGMP compliant replacement
Batch). Client shall use Commercially Reasonable Efforts to ensure
that SBL has adequate Client Materials to Manufacture such Batches
and Client’s failure to provide such Client Materials shall
relieve SBL of its obligations to provide a remedy pursuant to this
Section 5.8. The remedies
contained in Section 5.8 of this MSA shall be the sole and
exclusive remedies of Client regarding a Batch Failure and a Batch
Failure shall not constitute a material breach of this MSA or a PSA
unless SBL fails to provide the remedies contained in this Section
5.8.
5.8.2 The Parties shall
conduct a root cause analysis (including an analysis of whether the
Batch Failure was the fault of SBL, Client, neither or both) of the
Batch Failure, which shall be done through SBL’s deviation
process and which result will be reviewed and confirmed by the JSC.
If either the Core Team does not agree on the Batch Failure root
cause, and the JSC does not agree on the results of the Core
Team’s Batch Failure root cause analysis, the Parties shall
refer review of such root cause analysis to an independent mutually
agreed-on laboratory or firm with international repute, acting as a
neutral arbiter, to conduct a root cause analysis of the Batch
Failure. The costs of the independent laboratory will be borne by
the Party responsible for the Batch Failure, as determined by the
independent laboratory, whose written decision shall be binding on
the Parties. If the independent laboratory is paid in advance of a
final written determination, the Parties shall share equally such
expense, and the Party at fault shall reimburse the other Party for
its share of any such expenses paid after there has been a final
written determination made by the independent
laboratory.
5.8.3 The PSA applicable
to such Product Batch Failure shall set forth responsibility among
the Parties for the following costs in the event of a Batch
Failure: (1) the SBL Service Fee to Manufacture the failed Batch;
(2) SBL’s costs to procure the Raw Materials used in the
failed Batch plus applicable SBL handling fees associated with such
Raw Materials; (3) SBL handling fees associated with the applicable
Client Materials used in the failed Batch; and (4) Client’s
cost to procure the Client Materials (which shall not include Cell
Line) used in the failed Batch which amount is to be calculated
based on the actual replacement value (as opposed to the market
value) of such materials as supported by reasonable documentary
evidence by Client.
5.8.4 In the event that
any of the foregoing procedures results in a Batch being delivered
in a different year than the year in which the original Batch was
ordered for delivery by Client, the Service Fee for such
re-Manufactured Batch shall be the Service Fee in effect in the
Year in which such
re-Manufactured Batch is actually delivered by SBL unless the root
cause analysis determined the Batch Failure resulted from SBL
Assignable Error, in which case, the Service Fee in effect at the
time of the Purchase Order for the failed Batch shall
apply.
5.9
Storage, Packaging and
Delivery.
5.9.1 Service
Deliverables other than Products. Storage, packaging and
delivery of the Service deliverables other than Products
Manufactured hereunder shall be made in accordance with the terms
of this MSA, applicable PSA, Project Plan, applicable QAG and the
Applicable Laws.
5.9.2
Products.
(a)
Release by SBL and Acceptance by Client.
(i) SBL shall
perform all testing in accordance with the Specifications of the
Product and release the Product in accordance with the terms of the
applicable QAG. Upon such release SBL shall deliver to Client
a copy of the Manufacturing Documentation in support of the
SBL’s release of the Product for each Batch
(“Batch Related
Documents”), including a Certificate of Analysis and
Certificate of Compliance, in accordance with the applicable
QAG;
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(ii) Acceptance of Product. Client will
complete the Acceptance Procedure and determine the acceptability
of such Product in accordance with the applicable QAG and notify
SBL of the result within the latter of thirty (30) Business Days of
SBL’s release of Product or Client’s receipt of the
Batch Related Documents. Upon Client’s acceptance, SBL will
have no liability for such Product once entrusted to the carrier
(the Parties shall use good-faith efforts to minimize the
time-period between Client’s acceptance and SBL’s
delivery to the carrier), except as set forth in Section
5.9.2(a)(iv) regarding Latent Defects. If Client does not reject
such Product within the thirty (30) Business Day period, the
Product will be deemed to have been accepted by Client and SBL will
have no liability for such Product once entrusted to the carrier
(the Parties shall use good-faith efforts to minimize the
time-period between Client’s acceptance and SBL’s
delivery to the carrier), except (A) as set forth in Section
5.9.2(a)(iv) regarding Latent Defects or (B) due to a breach of
SBL’s obligations with regard to (I) handling or storage or
(II) the Specifications insofar as they relate to packaging and
shipping.
(iii) Non-Conforming. If, during the
Acceptance Procedure, any Product is determined by Client or SBL as
Non-Conforming Product, at the option of Client, SBL shall take
Commercially Reasonable Efforts to promptly Manufacture replacement
Product (except to the extent prohibited by cGMP or applicable QAG)
and deliver to Client the quantity of the Product equivalent to the
quantity of Non-Conforming Product on a date to be mutually agreed by
the Parties and such replacement Batch shall be invoiced and paid
for as if it were the original Non-Conforming Product. If SBL does
not confirm the non-conformity, the Parties shall refer to an
independent and mutually agreed-on laboratory or firm with
international repute to test the disputed Product. The costs of the
independent laboratory will be borne by the Party responsible for
the Batch Failure, as determined by the independent laboratory,
whose written decision shall be binding on the Parties. If the
independent laboratory is paid in advance of a final written
determination, the Parties shall share equally such expense, and
the Party at fault shall reimburse the other Party for its share of
any such expenses paid after there has been a final written
determination made by the independent laboratory. Section 5.9.2(a)
(i) and (ii) shall apply to such replaced Product mutatis
mutandis. Responsibility for the costs of such
Non-Conforming Product shall be as if such Non-Conforming Product
is a Batch Failure and Section 5.8.2 – 5.8.4 shall apply to
such Non-Conforming Product mutatis
mutandis. The remedies contained in this Section 5.9.2 shall
be the sole and exclusive remedy of client for Non-Conforming
Product.
(iv) Latent Defect. At any time after
completion of review of the Batch Related Documents, if Client
finds any hidden defects of the Product which could not have been
reasonably discovered through the review of the Batch Related
Documents (“Latent
Defect”), Client shall promptly give notice of such
claim in writing to SBL. In such case, if Client proves the Latent
Defect is solely due to SBL Assignable Error, the above Section
5.9.2(a)(iii) and Section 13.1 shall apply. If no written claim for
Latent Defect of the Product is received by SBL within one (1)
month from Client’s discovery of the Latent Defect, the
Product shall be deemed as irrevocably accepted. Notwithstanding
anything to the contrary; such claim for Latent Defect must be made
within a time period to be set forth in the applicable PSA, but in
no event after the expiration date of the Product. For the
avoidance of doubt, a Latent Defect is a defect in existence at the
time of completion of the Acceptance
Procedure.
(b)
Delivery. Shipping
conditions, title transfer to Client and risk of loss for the
Product Manufactured hereunder shall be FCA SBL Facility (INCOTERMS
2010). The Parties further agree as follows:
(i) At the time of
SBL’s release of the Product and prior to each pick-up by
Client or Client’s designated carrier, SBL shall propose to
Client a delivery schedule of the Product, in order for the Parties
to agree on it in advance for each pick- up. SBL shall schedule
Delivery with the carrier selected and paid for by
Client;
(ii) SBL shall not
deliver the Product until it has been instructed to by Client in
accordance with the applicable QAG. Client shall confirm specific
delivery instructions with SBL prior to SBL release. Upon
SBL’s release of Product, SBL shall store the Manufactured
Product as described in Section 5.9.2(c) and Client shall
compensate SBL for storage costs for the Manufactured Product
stored with SBL for more than sixty (60) calendar days following
release, as set forth in the applicable PSA;
(iii) SBL shall
provide Client with invoice, packing lists, supporting export
documents as specified by Client by separate delivery and shipment
documentation instructions, together with each shipment of the
Product (or such other deliverables); and
(iv) In cooperation
with Client and subject to the delivery schedule agreed by the
Parties, SBL shall adhere to the first-expire-first-out (FEFO)
principle in shipping all released Product.
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(c)
Storage,
Packaging and Shipping Container.
(i) Pursuant to the
terms of this MSA and any applicable PSA, SBL shall store the
Products Manufactured hereunder.
(ii) SBL shall
store, package, label and prepare shipment according to the
Specifications for the Product Manufactured hereunder, the
applicable QAG and the SOPs, and using storage and/or shipping
containers determined in the applicable PSA.
(iii) If Client
does not direct SBL to prepare Manufactured Product to be picked up
by Client or Client’s designated carrier with a pick-up date
within sixty calendar (60) days of Client’s receipt of the
Batch Related Documents, SBL shall store the Product at the
Warehouse and Client shall pay storage fees to SBL as set forth in
Section 9.1 for the period of storage at the Warehouse in excess of
sixty (60) calendar days from release until the actual delivery
date, in accordance with the applicable PSA.
(iv) SBL shall
store and handle all Manufactured Product in accordance with
applicable storage and handling Specifications, including all times
when SBL and Client agree that SBL shall store Manufactured Product
per Section 5.9.2(c)(iii), but shall have no obligation regarding
risk of loss and damage of Manufactured Product in its possession
unless such loss or damage resulted from SBL’s negligence or
willful misconduct.
5.10 Supply
Interruptions. On a PSA by PSA basis, the Parties will
discuss appropriate steps to alleviate any expected or actual
shortfall in Manufactured Product. The Parties may agree on a PSA
by PSA basis, in what events, if any, such a supply failure could
constitute a material breach of this MSA or a PSA.
SECTION
6 CHANGES
TO THE SPECIFICATIONS, ANALYTICAL, METHODS, MAUNFACTURING PROCESS,
FACILITY OR EQUIPMENT
6.1 Approval for
Change. SBL shall not make any change to the Manufacturing
Process, the Services, or the Specifications (a “Change”), without the prior
written consent of Client in accordance with the applicable
QAG.
6.2 Changes Required by
cGMP, Regulatory Authorities or Requested by Client.
Except as otherwise expressly set forth to the contrary in the
applicable QAG, in the event that cGMP, a Regulatory Authority,
Applicable Law, or any other regulatory or legal authority
requires, or Client requests, a Change, SBL shall accommodate such
requirements or requests, subject to the following:
(a) Client shall
promptly notify SBL in writing of the required and/or requested
Change(s), and provide information necessary for SBL to evaluate
the effect of such Change(s); provided, however, in the event SBL
first learns of a required Change it shall notify Client thereof in
writing, and SBL shall promptly advise Client as to any
(i) additional
equipment required, modifications to the Facility or equipment,
and/or additional equipment and the Facility qualification and
validation requirements; (ii) Manufacturing Process development,
transfer, scale-up, testing, qualification, or validation
requirements; (iii) regulatory requirements pursuant to such
Changes; (iv) changes to the Manufacturing scheduling and/or
Product delivery schedule; and (v) other impacts on the Facility or
SBL’s ability to manufacture products (including the
Products) in the Facility, if any, which may result from such
Change(s). The notification and formal approval procedure of such
Changes shall be in accordance with the applicable QAG (i.e.,
change control procedures) (if applicable). The Parties shall meet
in a timely manner to identify and discuss such Changes as
appropriate;
(b) Prior to
implementation of any such Change(s), SBL, subject to Section 5.2,
shall provide Client with an estimated plan and budget of the
reasonable and necessary costs that would be incurred by SBL as a
result of the implementation of any such Change(s), including, but
not limited to for (i) process and analytical development;
(ii)
equipment and/or the Facility modifications, qualification,
validation, maintenance, and decommissioning/disposal; (iii)
process and analytical validation; (iv) document
revisions or changes, the Facility, equipment, and system
modifications or changes; (v) additional stability testing; and
(vi) preparing submissions to Regulatory Authorities (collectively,
the “Implementation Plan and
Budget”). Following review and approval by Client of
such Implementation Plan and Budget, subject to the Core
Team’s approval and agreement followed by the Parties’
written agreement pursuant to Section 17.9 (if applicable), SBL
shall commence implementation of such Change(s);
(c) During any such
implementation, SBL shall provide Client with regular updates on
the progress of implementation. Subject to any timeframe imposed by
Applicable Law, SBL shall exercise Commercially Reasonable Efforts
to implement the Change according to the Implementation Plan and
Budget’s target completion date. SBL shall
provide written notice to Client if SBL becomes aware of any cause
which may create delay with the implementation of Changes.
Following any such notice, both Parties shall discuss an amendment
of Implementation Plan and Budget; and
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(d) Upon the
approval of the Implementation Plan and Budget for Change(s), both
Parties shall negotiate in good faith to determine the allocation
of the costs incurred by SBL for the implementation of any such
Change(s) between the Parties, in accordance with the following
principles:
(i) the costs for the general Facility Changes required by cGMP, any Regulatory Authority, or any Applicable Laws related to the maintaining the Manufacturing Facility by SBL as set forth in Section 7.2, shall be borne by SBL, provided that where the Change relates exclusively or partially to the Manufacture of Product in which case the costs shall be borne by Client fully or proportionally, respectively; (ii) the costs for the Changes other than (i) above, and requested by Client and required uniquely to the Manufacture of the Product and beneficial solely to Client shall be borne by Client; and (iii) the costs for the Changes other than (i) and (ii) above shall be discussed in good faith by the Parties to achieve equitable allocation of costs.
(i) the costs for the general Facility Changes required by cGMP, any Regulatory Authority, or any Applicable Laws related to the maintaining the Manufacturing Facility by SBL as set forth in Section 7.2, shall be borne by SBL, provided that where the Change relates exclusively or partially to the Manufacture of Product in which case the costs shall be borne by Client fully or proportionally, respectively; (ii) the costs for the Changes other than (i) above, and requested by Client and required uniquely to the Manufacture of the Product and beneficial solely to Client shall be borne by Client; and (iii) the costs for the Changes other than (i) and (ii) above shall be discussed in good faith by the Parties to achieve equitable allocation of costs.
7.1 Regulatory
Approvals. SBL shall provide reasonable assistance and
cooperation in order for Client to obtain and maintain the
Regulatory Approvals. The direct costs and fees associated with
such assistance and cooperation, to the extent not detailed in the
MSA or PSA shall be borne by Client, or as otherwise mutually
agreed between the Parties. As specified in the applicable PSA, the
Parties shall agree on which Regulatory Approvals are to be
obtained.
7.3 Regulatory
Inspections. SBL shall facilitate on-site inspections of the
Facility conducted by Regulatory Authorities. SBL shall notify
Client according to the applicable QAG provisions of any contacts
or inquiries by the Regulatory Authorities, including inspections,
Pre-Approval Inspections, sample requests, and written
correspondence and its result, related to the Manufacture of
Product by SBL at the Facility, as further defined in the
applicable QAG. Any direct expenses or costs incurred by SBL for
such inspections including Pre-Approval Inspections at the Facility
shall be borne by Client. Unless prohibited by the pertinent
Regulatory Authority, Client shall be entitled to witness any
inspection or audit by a Regulatory Authority of the Facility or
Warehouse related to the Manufacture of Product by SBL at the
Facility. Further, Client shall be entitled to attend, as an
observer, any
wrap-up meeting between SBL and a Regulatory Authority related to
such an inspection related to the Services or the Manufacture of
Product by SBL at the Facility. SBL shall timely provide Client
with a copy of any Form 483, inspection report or regulatory letter
issued by a Regulatory Authority, and shall provide Client a
meaningful opportunity to review and comment upon any response of
SBL thereto. Client’s comments in such regard shall be
considered in good faith and be given due regard by SBL in
formulating any proposed response to a Regulatory
Authority.
7.4 Regulatory
Support. During the
Term, SBL will assist Client with all regulatory matters relating
to Services and Manufacture and review the Common Technical
Document pertaining to the Products, as it relates to Chemistry,
Manufacturing and Controls, and make such corrections as are
necessary to accurately reflect the Products, in each case at
Client’s request and reasonable expense; provided, however,
SBL shall review and correct such documents as they relate to SBL
activities at no charge to Client (updates will be made with
respect to regulatory filings for which Client has engaged SBL and
paid the associated flat rate fees for support). In addition, SBL
will maintain at SBL’s expense, the relevant Drug Master
File, including any updates thereto, and shall provide a letter
authorizing Client to reference SBL’s Drug Master Files on
file with the FDA and other Regulatory Authorities in connection
with the pursuit of Regulatory Approval for the
Products.
17
SECTION
8 QUALITY
COMPLIANCE
8.1 Quality
Agreement.
Both Parties shall adhere to the provisions of the applicable QAG
and the Parties agree that all elements of quality assurance,
quality control and the like shall be governed by the terms and
conditions of the applicable QAG. In the event of a conflict
between the MSA and the applicable QAG, the MSA shall prevail over
those of the applicable QAG with the exception of Product
quality-related matters, cGMP and related regulatory requirements
in which case, the terms of the applicable QAG shall
prevail.
8.3
Records &
Audit.
8.3.1 Audit by
Client. Upon Client’s request, but no more than once
per year, SBL shall accept an audit of the Facility and, if
necessary in the judgment of Client, the Warehouse, by Client and
allow Client to inspect and audit the Facility and, if necessary in
the judgment of Client, the Warehouse, and Manufacture of the
Product solely to ascertain compliance by SBL with the terms of
this MSA or any applicable PSA; provided, however that in the event
Client uses a designee, SBL must provide prior written consent,
which shall not be unreasonably withheld, conditioned or delayed.
SBL shall be reimbursed for its reasonable costs for audits beyond
the audit described in the first sentence of this Section 8.3.1,
except for audits conducted to measure corrective action or
remediation following a finding of deficiency either by Client in a
previous audit or by a Regulatory Authority or as is contemplated
by Section 8.3.2(ii). Client shall not be limited in the number of
its audits conducted to measure corrective action or remediation,
and such audits shall not count against the limit expressed in the
first sentence of this Section 8.3.1. SBL will make Commercially
Reasonable Efforts to require vendors or subcontractors to accept
an audit or visit to their facilities by Client upon similar notice
as described in Section 8.3.2 below.
8.3.2 Audit
Notice. Client shall provide SBL with a written notice at
least three (3) months prior to the initiation of the audit of the
Facility and, if necessary in the judgment of Client, the
Warehouse, set forth in Section 8.3.1,
which shall be conducted on a mutually agreeable date and time, and
with a mutually agreed duration, agenda, and number of attendees,
which in the case of Client shall not be limited to less than three
(3) without the consent of Client. Notwithstanding the foregoing,
if the audit is required for cause (i) due to safety reasons or
other reasons that necessitates immediate audit of or visit to the
Facility or (ii) due to the SBL Assignable Error, the foregoing
sentence shall not apply and Client may conduct such audit or visit
by providing SBL with a prior notice by email. Access to
SBL’s facilities shall be coordinated with SBL so as to
minimize disruption to SBL’s ability to perform services for
its other clients. Client representatives must comply with all of
SBL’s generally applicable cGMP, confidentiality and security
procedures and protocols during such observations, consultations,
and
inspections. SBL shall at all times cooperate and provide all the
necessary documents reasonably required by Client during such
audit; provided that, to the extent necessary, SBL may redact or
withhold documents to protect the confidential information of its
other clients. Client shall be solely responsible for any costs and
liability caused by Client’s or its representatives’
failure to comply with SBL’s security, safety or
confidentiality procedures.
18
SECTION
9
CONSIDERATION AND PAYMENT
TERMS
9.1 Consideration.
In consideration for SBL’s performing the Service and other
obligations undertaken by SBL pursuant to a PSA, Client shall pay
SBL amounts as set forth in the applicable PSA (the
“Service Fee”);
(ii) a handling surcharge of a certain percentage or certain amount
to be set forth in the applicable PSA of the costs of Raw Materials
paid by SBL (including but not limited to taxes and customs
duties/fees); (iii) a handling surcharge of a certain percentage or
certain amount to be set forth in the applicable PSA related to the
Client Materials (which shall be based on the actual costs of such
materials as supported by reasonable documentary evidence as
opposed to the market value thereof); and (iv) storage fees as set
forth in the relevant PSA.
9.2
Invoices.
9.2.1 Service Fee of the
Project Stages and Batches. According to the invoicing plan
set forth in the applicable Project Plan or applicable PSA, or upon
SBL’s release of a Batch of Product, as applicable, SBL shall
invoice Client for the Service Fee set forth in the applicable
PSA.
9.2.2 Raw
Materials. With respect to the Raw Materials, SBL shall
submit invoices to Client for the applicable Raw Materials cost
(including any agreed upon safety stock) as set forth according to
Section 9.1 as follows. SBL shall submit an invoice to Client (i)
for the cost of Specialized Raw Materials procured upon receipt of
the invoice from vendors/suppliers; and (ii) for the cost
of Common Raw Materials used by SBL’s completion of such
project stage or upon SBL’s release of a Batch of Product as
applicable. Notwithstanding the foregoing, the Parties shall
collaborate in the selection of the vendors of the Raw Materials.
All such vendors shall be approved by Client before supplying SBL
with Raw Materials for Product.
9.2.3 Client
Materials. With respect to the Client Materials, which shall
be supplied by Client to SBL at no cost during SBL’s
performance the Service, SBL shall submit an invoice to Client in
an amount as set forth in Section 9.1 upon SBL’s completion
of such project stage of the Service SBL’s release of a Batch
of Product, as applicable.
9.3 Payment.
9.3.1 Mode of Payment;
Foreign Exchange. All payments to SBL due under
the MSA or any applicable PSA shall be made within thirty (30)
Business Days from the receipt of the SBL’s invoice in USD $
by means of telegraphic transfer to the account with the bank
designated by SBL in the foregoing invoice. For the purpose of
computing payment amounts incurred in a currency other than USD$,
such currency shall be converted into USD$ using the basic exchange
rate published by Bloomberg (or its successor institution) on its
website “xxxx://xxx.xxxxxxxxx.xxx/xxxxxxx/xxxxxxxxxx”
(or any other website that may be used by Bloomberg or its
successor institution for publication of currency exchange rates)
at the opening of business on such invoice
date.
9.3.2 Taxes.
All prices and charges are exclusive of any applicable taxes,
levies, imposts, duties and fees of whatever nature imposed by any
law or regulations in any country in respect of the Services,
importation or exportation of Raw Materials, Client Materials,
Batches, and Product, which shall be paid by Client. For the
avoidance of doubt, the foregoing shall not include any taxes
imposed on the income or profit of SBL and any withholding tax
lawfully levied on any payment to be made by Client to SBL, each of
which shall be solely borne by SBL. Client shall pay or reimburse
SBL for all customs duties and taxes in connection with the
purchase, sale, importation or exportation of any Raw Materials,
Client Materials, Batches, or Product or the provision of Services,
except to the extent such duties and taxes are recoverable by or
refundable to SBL. SBL agrees to assist Client in claiming
exemption under double taxation or similar agreement or treaty from
time to time in force to obtain a refund of any customs duties,
value added taxes, and other taxes payable by SBL.
9.3.3 Price
Adjustments.
The Service Fees as set forth in the applicable PSA, shall be
adjusted annually, on the last day of January, effective January 1
of each year during the Term, by the percentage change in the
consumer price index as published by the Bank of Korea for the
immediately preceding twelve (12) months. The relevant date for
price adjustment under this Section shall be the issue date of
SBL’s invoice.
9.3.4 Default
Interest. Any amount that is not paid by a Party to the
other when due under the MSA or any PSA shall bear default interest
at the rate of ten percent (10%) per annum, or such lesser maximum
rate allowed by Applicable Law, from the day following the due date
until paid in full. In the event there is an amount which is
invoiced by SBL but not paid by Client for more than six (6) months
after the due date, such event shall be considered a material
breach of the relevant PSA.
19
SECTION
10 CONFIDENTIALITY
10.1 Confidential
Information. “Confidential Information” shall
mean any data, know-how and other information, whether technical or
non-technical disclosed by one Party (hereinafter the
“Disclosing
Party”) or otherwise became known to the other Party
(hereinafter the “Receiving
Party”) hereunder relating to the subject matter of
the MSA, regardless of form or manner of disclosure, i.e., whether
disclosed in writing, in electronic file or format or in other
tangible manner, or orally, visually or in other intangible manner.
If a Party intends to disclose such information in writing, in
electronic file or format or in other tangible manner, such Party
will make reasonable efforts to indicate it is confidential; and if
to disclose orally, visually or in other intangible manner, such
Party will make reasonable efforts to reduce it in summary form in
writing or in electronic file or format, identified as confidential
and delivered to the other Party within thirty (30) days after such
oral or visual disclosure; provided, however, in each case, a
failure to do so shall not constitute a breach of this term nor
shall deny, negate or destroy the confidential nature thereof, and
no such failure shall serve as conclusive evidence that the
disclosed information shall not be considered Confidential
Information by and between the Parties. Furthermore, the existence
and terms of the MSA shall be deemed to be the Confidential
Information of both Parties and any information, data or results
disclosed by SBL to Client relating to the Product, the Services or
Manufacture under this MSA or any PSA, as well as the Manufacturing
Process, the Project Plan and the Specifications shall be the
Confidential Information of Client, unless otherwise specifically
identified as SBL Confidential Information by the terms of this
Agreement. The Parties acknowledge and agree that the Manufacturing
Process and the Project Plan may contain a mixture of both
Party’s Background IP, ownership of which shall not be
affected by this MSA.
Notwithstanding the
foregoing, Confidential Information shall not include the
information, which as evidenced by written records:
(a) was at the time of
disclosure by the Disclosing Party hereunder publicly known or
available;
(b) after disclosure by
the Disclosing Party hereunder, became publicly known or available
by publication or otherwise, other than by an authorized act or
omission by the Receiving Party;
(c) was in the possession
of the Receiving Party without confidentiality restriction at the
time of the disclosure by the Disclosing Party
hereunder;
(d) was lawfully received
from any third party having the lawful right to make such
disclosure, without obligation of confidentiality; or
(e) was independently
developed by the Receiving Party’s directors, officers or
employees without reference to the Confidential Information, as
demonstrated by records created contemporaneously with such
development.
10.2 Confidentiality.
The Receiving Party recognizes the proprietary and confidential
nature of the Disclosing Party’s Confidential Information and
agrees that no right, title, ownership, license, or interest of any
character in the Disclosing Party’s Confidential Information
other than as specifically granted herein, is conveyed or
transferred to the Receiving Party. Both Parties further agree to
maintain the Disclosing Party’s Confidential Information in
confidence and not to disclose or divulge the Disclosing
Party’s Confidential Information, in whole or in part, to any
third party, and not use the Disclosing Party’s Confidential
Information for any purpose other than pursuing the MSA. Each Party
shall guard such Confidential Information using the same degree of
care as it normally uses to guard its own confidential or
proprietary information of like importance, but in any event no
less than reasonable care. The Receiving Party shall limit
disclosure of the Disclosing Party’s Confidential Information
to its and those of its Affiliates’ directors, officers,
employees, consultants and agents (“Representatives”) who have a need
to know the Disclosing Party’s Confidential Information for
performance of the Service and implementation of the MSA,
provided that, the
Receiving Party shall undertake procedures to ensure that each of
its Representatives to whom the Disclosing Party’s
Confidential Information is disclosed understands (i) the
confidential nature of the Disclosing Party’s Confidential
Information and (ii) that he or she is under an obligation similar
to those contained herein to hold the Disclosing Party’s
Confidential Information disclosed strictly
confidential.
10.4 Survival of
confidential obligations. The confidential obligations of the
Receiving Party shall survive for a period of five (5) years from
the expiration or termination of this MSA.
20
11.1 Reference Standard,
Client Technology, Client Materials, Cell Line, and Product.
SBL hereby understands and agrees that all rights to, titles of and
interests in the Reference Standards, Client Technology, Client
Materials, Cell Line, Product, the Manufacturing Process and any
work in process or semi processed goods thereof belong to Client,
unless otherwise provided herein.
11.2 Background
Intellectual Property. It is acknowledged that each Party
possesses Background IP. Any Intellectual Property relating to the
Reference Standards, Client Technology, Client Materials and Cell
Line owned and/or controlled by Client as of the date of provision
of such Reference Standards, Client Technology, Client Materials
and Cell Line by Client to SBL pursuant to Section 5.1, shall be
deemed to be included in the Background IP of Client. Client hereby
grants SBL a royalty-free, non-transferable, revocable and
non-sublicensable and fully-paid-up right and license to use such
Intellectual Property relating to such Reference Standards, Client
Technology, Client Materials, Cell Line, during the Term for the
sole purposes of Manufacturing of the Product or Services in
accordance with the MSA.
11.3 Inventions.
Any Intellectual Property arising out of or resulting from the
Service under the MSA, including but not limited to those contained
in the Manufacturing Documentation, shall be hereinafter
collectively called an “Invention”.
11.3.1 Client
Invention. Any Invention that is conceived and first reduced
to practice solely by one or more employees or officers of SBL (or
its third party consultant or subcontractor) and does not
constitute an SBL Invention shall be a “Client
Invention”. SBL shall notify Client of such Client
Invention(s) to Client immediately after SBL, the Project
Management Team Leader, respective project
personnel, SBL employees or officers or other applicable third
parties working for SBL hereunder makes, conceives or reduces to
practice such Client Invention, and shall take all necessary
measures so that Client would have the sole and exclusive ownership
of any and all Client Invention. Client may use any Client
Invention for any purpose, including filing patent application and
SBL shall provide reasonable cooperation to Client at the expense
of Client (as to all reasonable out-of-pocket expenses incurred by
SBL that are supported by adequate documentation). In the event
that SBL wishes to use the Client Invention for purposes outside
the scope of the MSA, Client hereby grants SBL a worldwide,
irrevocable, royalty-free and fully-paid- up license to use such
Client Invention. This Section 11.3 shall survive the expiration or
earlier termination and continue in effect as long as the
intellectual property right to such Client Invention is legally
valid.
11.3.2 SBL
Invention. Any Invention that is conceived and first reduced
to practice solely by one or more employees or officers of SBL (or
its third party consultant or subcontractor) and which is not
derived from, or arises out of Client Background IP or
Client’s Confidential Information or any other proprietary
right of Client or its third party vendors, contractors, or other
partners or clients under or in connection with the MSA, shall be
the property of SBL (“SBL
Invention”), and shall not be deemed to be Client
Invention or Joint Invention for the purposes of the MSA. No
Background IP of SBL and the SBL Invention shall be incorporated
into the Product or Manufacturing Process without the joint review
and approval of both Parties and the terms of a license to use such
Background IP or SBL Invention shall be agreed upon prior to such
incorporation.
11.3.3 Client-SBL Joint
Invention. Any Invention that is conceived and first reduced
to practice jointly by one or more employees, or officers of SBL
(or its third party consultant or subcontractor) or their
respective Affiliates, on the one hand and one or more employees,
officers, agents or contractors of Client (or its Affiliates) on
the other hand and which is not derived from, or arises out of
either Party’s Background IP or Confidential Information or
any other proprietary right of a Party or its third party vendors,
contractors, or other partners or clients under or in connection
with the MSA, shall be jointly owned by Client and SBL (a
“Joint
Invention”), and shall not be a Client Invention or
SBL Invention for the purposes of the MSA. Subject to the terms and
conditions of the MSA, any such Joint Invention may be exploited by
SBL or Client without compensation and liability of other
obligation (including accounting obligations) to the other Party,
and each Party has a non-exclusive, royalty-free, worldwide
license, with the right to sublicense, under its interest in such
Joint Inventions and any Intellectual Property rights (including
patents) covering the same, for any purpose; provided that in the
event of sublicense, each Party shall make written notice to the
other Party of the fact. This license shall continue for the life
of the applicable right.
21
SECTION
12 WARRANTIES
12.3 SBL’s
Warranties.
SBL represents, warrants and covenants that:
12.3.1 As of the
Effective Date and during the Term, (i) SBL is the lawful owner,
lessee, operator, or licensee of the Facility, equipment,
machinery, as well as permissions required, to enable SBL to
perform its obligations under this MSA, and (ii) to the best of
SBL’s knowledge none of the SBL Inventions or SBL Background
IP infringes any third party Intellectual Property
Right.
12.3.2 All Product
Batches, at the time of delivery to Client’s designated
carrier, shall (a) conform to the Specifications (except for Pilot
Batches and Engineering Batches unless otherwise
agreed); (b) be
Manufactured, packaged, handled and stored in compliance with the
requirements of cGMPs (except for Pilot Batches and Engineering
Batches unless otherwise agreed) and all Applicable Laws; (c)
comply with the Standard Operating Procedures; (d) be Manufactured
in compliance with the Quality Agreement; and (e) be transferred
free and clear of any liens, claims or encumbrances of any
kind.
12.3.3 (i) SBL is not nor
has it ever been, and (ii) SBL has not used, and will not use, the
services of any person excluded, debarred, suspended (or subject to
exclusion, debarment or suspension) under 21 U.S.C. §335(a) or
(b) or otherwise disqualified by Applicable Law, including, the FDA
Debarment List (xxxx://xxx.xxx.xxx/xxx/xxxxxxxxxx_xxx/xxxxx/xxxxxxx.xxx),
as amended or replaced from time to time, in connection with any of
the Services or Manufacturing performed under this MSA or any PSA.
SBL agrees to notify Client promptly in the event of any violation
of SBL’s obligations under this Section. This certification
applies to SBL and its respective officers, agents, and employees
as well as subcontractors performing on behalf of SBL under this
Agreement.
12.4 No Other
Warranties. THE REPRESENTATIONS AND WARRANTIES CONTAINED IN
THIS SECTION ARE EXPRESSLY IN LIEU OF AND EXCLUDE, AND THE PARTIES
HEREBY EXPRESSLY DISCLAIM AND NEGATE, TO THE MAXIMUM EXTENT
PERMITTED BY APPLICABLE LAWS, ALL OTHER REPRESENTATIONS AND
WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED (ARISING BY OPERATION OF
LAW OR
OTHERWISE), INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, EVEN IF THAT PURPOSE IS
KNOWN.
22
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SECTION 13
INDEMNIFICATION
13.1 Indemnification by
SBL. SBL shall indemnify and hold harmless Client, its
Affiliates, and their respective officers, directors, employees or
agents from and against any Damages arising or resulting from any
third party (which shall exclude Client Affiliates) claims to the
extent such Damages are relating to, arising out of, in connection
with, or resulting from claims, demands, or actions based upon (i)
gross negligence or willful misconduct; (ii) breach of the MSA or
any PSA; (iii) violation of Applicable Law, in the case of clauses
(i) through (iii) of or by SBL or its officers, directors,
employees or agents, including any subcontractor or vendor used in
the Manufacture of Product, or (iv) any claim that
SBL’s use of SBL Background IP infringes any third
party’s Intellectual Property rights, except to the extent
that such Damages are caused by the causes as set forth in Section
13.2 for which Client is obliged to indemnify.
13.2 Indemnification by
Client. Client shall indemnify and hold harmless SBL, its
Affiliates, and their respective officers, directors, employees or
agents from and against any Damages arising or resulting from any
third party (which shall exclude SBL Affiliates) claims to the
extent such Damages are relating to, arising out of, in connection
with, or resulting from claims, demands or actions based upon (i)
gross negligence or willful misconduct, (ii) any claim that
SBL’s use of the Client Materials, Manufacturing Process, and
Client Technology for the purpose of the Services and solely to the
extent as set forth in the MSA infringes any third party’s
Intellectual Property rights, (iii) breach of the MSA or any PSA,
or (iv) violation of Applicable Law, in each case except to the
extent that such Damages are caused by the causes as set forth in
Section 13.1 for which SBL is obliged to indemnify and in the case
of clauses (i), (iii), and (iv) of or by Client or its officers,
directors, employees, or agents.
13.3 Indemnification
Procedure. The foregoing indemnification by SBL or Client
shall be conditioned, if and to the extent Damages are based on or
related to a third party claim, upon a Party who intends to claim
indemnification under Sections 13.1 and 13.2 (the
“Indemnified
Party”) (i) providing written notice to the other
Party (“Indemnifying
Party”) within twenty (20) calendar days after the
Indemnified Party have been given written notice of such third
party claim, provided that absence or delay of such prior written
notice will not relieve the Indemnifying Party of its obligation to
indemnify except to the extent such absence or delay materially
prejudices the Indemnifying Party’s ability to defend the
third party claim; (ii) permitting the Indemnifying Party, upon
timely notice by the Indemnified Party, the opportunity to assume
full responsibility (at the Indemnifying Party’s cost and
expense) for the investigation and defense of any such claim with
counsel reasonably satisfactory to the Indemnified Party,
provided, however,
the Indemnifying Party shall keep the Indemnified Party informed as
to the progress of the defense of any claim and that the
Indemnified Party shall cooperate in such defense and shall make
available all records, materials and witness reasonably requested
by the Indemnifying Party in connection therewith; and (iii) not
settling or compromising any such claim without the Indemnifying
Party’s prior written consent, with such consent not to be
unreasonably denied, withheld or conditioned. Furthermore, the
Indemnifying Party shall not settle or compromise any such claim
without the Indemnified Party’s prior written consent;
provided, however, no such consent shall be required if such
settlement or compromise involves only the
payment of money, does not require a finding or admission of fault
or guild on the party of the Indemnified Party, and provides for a
general release of the Indemnified Party.
SECTION
14
DISCLAIMER OF
CONSEQUENTIAL DAMAGES: LIMITATION OF
LIABILITY
14.1 Disclaimer of
Consequential Damages. EXCEPT FOR DAMAGES BASED ON OR
RELATED TO A THIRD PARTY CLAIM ARISING UNDER SECTIONS 13.1 AND
13.2, OR BASED ON GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, NEITHER
PARTY WILL BE LIABLE UNDER THIS AGREEMENT FOR ANY SPECIAL,
PUNITIVE, CONSEQUENTIAL, INCIDENTAL OR OTHER INDIRECT DAMAGES OF
ANY TYPE OR NATURE, WHETHER BASED IN CONTRACT, TORT, STRICT
LIABILITY, NEGLIGENCE OR OTHERWISE, INCLUDING LOSS OF PROFITS OR
REVENUES.
14.2 Limitation of
Liability. Specific caps on Damages shall be set forth in
the applicable PSA.
23
15.1 Term. This
MSA will become effective as of the Effective Date and will be in
effect for as long as a PSA is in effect (the “Term”). Each PSA will have its own
initial term as stated therein. Each PSA for clinical supply shall
automatically renew for successive terms of one (1) year each or
upon execution of a PSA for commercial supply, whichever is
earlier, and each PSA for commercial supply, including supply of
stocking inventories in advance of Regulatory Approval, shall
automatically renew for successive terms of three (3) years each,
unless a Party gives written notice to the other Party of its
intention to not renew a PSA for clinical supply ninety (90) days
prior to the end of the then current PSA term, or a Party gives
written notice to the other Party of its intention to not renew a
PSA for commercial supply thirty-six (36) months prior to the end
of the then current PSA term.
15.2.1 Material
Breach. A
Party may terminate any PSA for a material breach by the other
Party; provided, however, that the non-breaching Party shall give
the breaching Party written notice of such breach and if the
breaching Party fails to commence Commercially Reasonable Efforts
to cure that breach within twenty (20) Business Days after receipt
of such written notice, then the non-breaching Party may terminate
this Agreement on twenty (20) Business Days’ written notice
after expiration of such twenty (20) Business Day period. This MSA
shall terminate if all effective PSAs are terminated.
15.2.2 Insolvency.
This MSA may be terminated by either Party upon written notice at
any time during the MSA if the other Party: (a) files in any court
pursuant to any statute a petition in bankruptcy or insolvency or
for reorganization or for an arrangement or for the appointment of
a receiver or trustee of such Party, or of its assets; (b) proposes
a written agreement of composition for extension of its debts; (c)
is served with an involuntary petition against it, filed in any
insolvency proceeding which is admitted in the court; or (d) makes
an assignment for the benefit of its
creditors. The Party affected shall immediately notify the other
Party in writing of the occurrence of any of the foregoing
events.
15.2.3 Force
Majeure.
Either Party may terminate a PSA in accordance with Section 17.3 in
the event a Party is unable to perform its obligations pursuant to
a PSA due to a Force Majeure Event.
15.2.4
Import
Failure. Client shall be entitled to terminate a PSA upon
twenty (20) Business Days’ notice to SBL, if, despite the
efforts of SBL pursuant to Section 5.4.1, Client Material destined
for use in connection with the Services have been prohibited from
entry into the Republic of South Korea by the Korean Custom
Service. Such termination right shall only exist if such Client
Materials have been denied entry and shall not be implicated by
mere delays in the importation process. If such termination relates
to efforts to import into the Republic of Korea Client Materials
for the initial Batch of a Product under a PSA, the applicable PSA
shall be deemed to be void ab
initio without further cost or expense to either Party;
provided, however, the Party’s thereafter shall reasonably
cooperate with regard to disposition of such Client Materials at
the cost of Client.
15.2.5 Other Specified
Events. The Parties may additionally terminate a PSA as set
forth in the applicable PSA.
15.3.1 Payment of Amounts
Due.
Expiration or termination of the MSA or PSA for any reason shall
not exempt any Party from paying to any other Party any amounts
owing to such Party at the time of such expiration or termination;
provided, however, with respect to a termination deemed to be
ab initio, and up-front fee
paid to SBL shall not be deemed earned and shall be returned to
Client.
15.3.2 Decommissioning.
Upon expiration or termination of a PSA for any reason, SBL shall
cease and refrain from the Services described in any applicable PSA
(including the Manufacturing and supplying the Product) for Client
unless otherwise provided in the following Sections 15.3.2(a) to
15.3.2(d), and both Parties shall pursue decommissioning activities
as set forth hereunder.
(a)
Fully Manufactured Product.
(i) If Client
terminates a PSA pursuant to Section 15.2.1, 15.2.2, 15.2.3, 15.2.4
or 15.2.5, upon Client’s election, SBL shall (i) deliver
already fully Manufactured Product to Client in accordance with the
terms and conditions of the MSA and applicable PSA or (ii) destroy
such Product. If Client elected (i) above, Client shall
pay the Service Fees and any related costs or fees for the Service
relating to such Product in accordance with the terms and
conditions of the MSA and applicable PSA, and if Client elected
(ii) above, SBL shall bear the costs and expenses for such
destruction, except in the case of Section 15.2.4
or Section 15.2.5 for which destruction Client shall pay the
cost.
(ii) If SBL
terminates a PSA pursuant to Section 15.2.1, 15.2.2, 15.2.3, or
15.2.5, upon SBL’s election, SBL may (i) deliver the fully
Manufactured Product to Client in accordance with the terms and
conditions of the MSA and applicable PSA (including the current
Firm Period period or Binding Year in the PSA) or (ii) destroy such
Product. If SBL elected (i) above, Client shall pay the Service Fee
and any related costs or fees for the Service relating to such
Product in accordance with the terms and conditions of the MSA and
applicable PSA, and if SBL elected (ii) above, Client shall bear
the costs and expenses for such destruction and the costs incurred
by SBL for the Service; provided, however, such costs and expenses
to be borne by Client shall in no event exceed the Service Fee for
the Service relating to such Product.
(iii) If a PSA is
naturally expired pursuant to Section 15.1, the provisions of (ii)
above shall apply
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(b)
Client Materials being used for the Service (Product in
Process).
(i) If Client
terminates a PSA pursuant to Section 15.2.1, 15.2.2, 15.2.3,
15.2.4, or 15.2.5, upon Client’s election, SBL shall (i)
continue to use the Client Materials being used for the
Manufacturing hereunder (the Product in process) and deliver the
fully Manufactured Product to Client in accordance with the terms
and conditions of the MSA and applicable PSA, or (ii) deliver to
Client or destroy such Product in process. If Client elected (i)
above, Client shall pay the Service Fee and any related costs or
fees for the Service relating to the fully Manufactured Product in
accordance with the terms and conditions of the MSA and applicable
PSA, and if Client elected (ii) above, SBL shall bear the costs and
expenses for such activities except in the case of Section 15.2.4
or Section 15.2.5 for which destruction Client shall pay the
cost.
(ii) If SBL
terminates a PSA pursuant to Section 15.2.1, 15.2.2, 15.2.3, or
15.2.5, upon SBL’s election, SBL may (i) continue to use the
Client Materials being used for the Manufacturing hereunder (the
Product in process) and deliver the fully Manufactured Product to
Client in accordance with the terms and conditions of the MSA and
applicable PSA, or (ii) destroy such Product in process. If SBL
elected (i) above, Client shall pay the Service Fee and any related
costs or fees for the Service relating to the fully Manufactured
Product in accordance with the terms and conditions of the MSA, and
if SBL elected (ii) above, Client
shall bear the costs and expenses for such activities.
(iii)
If a PSA is naturally expired pursuant to Section 15.1, the
provisions of (ii) above shall apply.
(c) Client Materials, Cell Line, and Reference
Standards. Upon expiration or termination of a PSA, upon
Client’s election, SBL shall deliver to Client and/or destroy
all remaining Client Materials (subject to Sections 15.3.2(a) and
15.3.2(b)), all remaining Cell Line vials, Reference Standards and
other materials required for Manufacturing.
The
costs and expenses for such activities shall be borne by the
Parties as follows:
(i) If Client
terminates the PSA pursuant to Section 15.2.1, 15.2.2 or 15.2.3,
SBL shall deliver or dispose at no additional cost to Client and
SBL shall bear such costs and expenses for such
activities;
(ii) If SBL
terminates the PSA pursuant to Section 15.2.1, 15.2.2, 15.2.3, or
15.2.5, or Client terminates the PSA pursuant to Section 15.2.4 or
15.2.5, Client shall bear such costs and expenses for such
activities;
(iii) If a PSA is
naturally expired pursuant to Section 15.1, the provisions of (ii)
above shall reply.
(d)
Raw Materials.
(i) If Client
terminates a PSA pursuant to Section 15.2.1, 15.2.2 or 15.2.3 and
if Client so elects, SBL shall deliver the remaining Raw Materials
to Client for Client’s payment of SBL’s cost to procure
such Raw Materials, or dispose of them at Client’s election.
SBL shall bear the costs and expenses for the delivery of the Raw
Materials.
(ii) If SBL
terminates a PSA pursuant to Section 15.2.1, 15.2.2, 15.2.3 or
15.2.5, or Client terminates a PSA pursuant to Section 15.2.4 or
15.4.5, SBL may deliver the remaining Raw Materials to Client or
dispose of them at SBL’s election. If so delivered, Client
shall pay SBL’s cost to procure such Raw Materials to SBL and
bear the costs and expenses for the delivery of such Raw Materials
by SBL.
(iii) If a PSA is
naturally expired pursuant to Section 15.1, the provisions of (ii)
above shall apply.
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(e)
Outstanding Obligations Regarding Purchase of Product.
(i) If Client
terminates a PSA pursuant to Section 15.2.1 or 15.2.2 Client shall
be released from any outstanding binding obligations to purchase
Product as of the date of notice of termination including but not
limited to pursuant to a Firm Period, binding forecast, purchase
order, minimum purchase commitment, or otherwise; provided,
however, that Client shall purchase Product Manufactured prior to
such date of notice, pursuant to the terms of this MSA and
PSA.
(ii) If SBL
terminates a PSA pursuant to Section 15.2.1 or 15.2.2, outstanding
binding obligations to purchase Product as of the date of notice of
termination shall survive termination of such PSA, including but
not limited to pursuant to a Firm Period, binding forecast,
purchase order, minimum purchase commitment, or
otherwise.
(iii) For all
other cases of termination of a PSA, subsection (ii) shall
apply.
(f) Survival.
Any
termination or expiration of this MSA shall not affect any
outstanding obligations due hereunder prior to such termination or
expiration, nor shall it prejudice any other remedies that the
parties may have under this MSA. For greater certainty, except as
otherwise expressly provided, termination or expiration of this
MSA, irrespective of the cause, shall not affect any rights or
obligations which, from the context thereof, are intended to
survive termination or expiration of this MSA, including but not
limited to Sections 1, 8, 9, 10, 11, 12, 13, 14, 15, 16 and
17.2.
15.3.3 Outbound
Transfer. Upon any
termination of a PSA or in connection with its expiration, Client
shall be entitled to give notice to SBL of a Manufacturing Process
Transfer, which shall commence the preparation and effectuation of
a Manufacturing Process Transfer Plan for the Product identified
therein. In addition, Client shall be entitled to give notice to
SBL of a Manufacturing Process Transfer and commence the
preparation and effectuation of a Manufacturing Process Transfer
Plan in the absence of a termination or expiration of a PSA in
order to establish second source Manufacturing. Client shall pay
SBL’s reasonable costs of assistance related to effectuation
of the Manufacturing Process Transfer Plan.
SECTION
16 ARBITRATION
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17.1 Notices. Any
notice required or permitted under the MSA shall be in writing with
duly authorized signature and made to the following addresses or
facsimile numbers:
If to
Client:
0
Xxxxxxxxxx Xx., 0xx
Xxxxx
Xxx
Xxxx, XX 00000
Attention: Senior
Vice President Operations
Facsimile:
If to
SBL:
Samsung
BioLogics Co., Ltd.
300,
Songdo bio-daero, Xxxxxx-xx
Xxxxxxx
00000, Xxxxx Xxxxx
Attention: Head of
Corporate Business Operations
Facsimile:
x00-00-000-0000
With
copy to: SBL Legal & Compliance Department
Either
Party may change its designated address and facsimile number by
notice to the other Party in the manner provided in this Section
17.1.
Any
notice shall be deemed to have been delivered on the date of
delivery of delivered personally, or on the next day of sending if
sent by facsimile, or on the fifth day of posting if sent by
registered or certified mail with return receipt requested and
postage prepaid.
17.2 Governing
Law. This MSA shall be construed and interpreted in
accordance with the laws of State of New York, United States and
all rights and remedies shall be governed by such laws without
regard to principles of conflicts of law. The United Nations
Convention on Contracts for the International Sale of Goods shall
not apply to the transactions contemplated by the MSA.
17.3 Effect of Force
Majeure Event. Neither Party (the
“Affected
Party”) shall be liable to the other Party (the
“Non-Affected
Party”) for failure or delay to perform its obligation
under the MSA or any applicable PSA when such failure or delay is
due to riots, storms, fires, explosions, floods, earthquakes, war,
embargoes, blockades, insurrections, terrorism, an act of God or
any other cause similar thereto which is beyond the control of the
Affected Party including those affected upstream suppliers
(“Force Majeure
Event”).
Each
Party agrees to give the other Party prompt written notice of the
occurrence of any Force Majeure Event, the nature thereof, and the
extent to which the affected Party will be unable fully to perform
its obligations under the MSA. If a condition constituting Force
Majeure Event as defined herein exists for more than one hundred
eighty (180) consecutive days, or it is reasonably foreseeable that
such Force Majeure Event will persist for more than one hundred
eighty (180) days consecutive days, the Parties shall endeavor in
good faith to negotiate a mutually satisfactory solution to the
problem, if practicable, including use of a third party to fulfill
the obligations hereunder of the party invoking Force Majeure
Event, at the expense of the party invoking Force Majeure Event. If
after good faith efforts to negotiate a mutually satisfactory
solution for at least sixty (60) days the Parties have failed to
reach agreement, the Non-Affected Party shall have the right to
terminate this MSA upon thirty (30) days’ written
failure.
17.4 Assignment.
Neither Party shall assign, in whole or in part, the MSA without
the prior written consent of the other Party, such approval not to
be unreasonably withheld, conditioned or delayed. Notwithstanding
the above, Client may, without such consent, assign the MSA to (i)
its Affiliate or (ii) any purchaser
of Client’s rights relating to the Product or all or
substantially all of the assets of Client, or of all of its capital
stock, or to any successor corporation or entity resulting from any
merger or consolidation of such Party with or into such corporation
or entity. Notwithstanding the above, SBL may, without such
consent, assign the MSA to (i) its Affiliate or (ii) any purchaser
of substantially all of the assets of SBL, or of all of its capital
stock, or to any successor corporation or entity resulting from any
merger or consolidation of such Party with or into such corporation
or entity.
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17.7 Independent
Contractors.
The Parties hereto are independent contractors and nothing
contained in the MSA shall be deemed or construed to create a
partnership, joint venture, employment, franchise, agency or
fiduciary relationship between the Parties.
17.8 Integration.
This MSA constitutes the entire agreement between the Parties
relating to the subject matter of the MSA and supersedes all
previous oral and written communications between the Parties with
respect to the subject matter of the MSA.
17.9 Amendment;
Waiver.
Except as otherwise expressly provided herein, no alteration of or
modification to the MSA shall be effective unless made in writing
and executed by an authorized representative of both Parties. No
course of dealing or failing of either Party to strictly enforce
any term, right or condition of the MSA in any instance shall be
construed as a general waiver or relinquishment of such term, right
or condition. The observance of any provision of the MSA may be
waived (either generally or any given instance and either
retroactively or prospectively) only with the written consent of
the Party granting such waiver.
17.10 Severability.
The Parties do not intend to violate any Applicable Law. However,
if any sentence, paragraph, clause or combination of the MSA is in
violation of any law or is found to be otherwise unenforceable,
such sentence, paragraph, clause or combination of the same shall
be deleted and the remainder of the MSA shall remain binding,
provided that such deletion does not alter the basic purpose and
structure of the MSA.
17.11 Construction.
The Parties mutually acknowledge that they have participated in the
negotiation and preparation of the MSA. Ambiguities, if any, in the
MSA shall not be construed against any Party, irrespective of which
Party may be deemed to have drafted the MSA or authorized the
ambiguous provision.
17.13 Counterparts.
This MSA may be executed in two or more counterparts, each of which
will be deemed an original, but all of which together will
constitute one and the same instrument.
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Signature:
/s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X.
Xxxxx
Title: Chief
Executive Officer
Date:
February 19, 2018
SAMSUNG
BIOLOGICS CO., LTD.
Signature:
/s/ Xx. Xxx Xxx
Xxx
Name: Xx. Xxx Xxx
Xxx
Title:
Representative Director and President
Date:
February 21, 2018
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