Exhibit 10.38

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM

THIS EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD

BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

 

License, Supply and Marketing Agreement

Chemosat®

 

This License, Supply and Agreement is made as of December 10th, 2018
(hereinafter referred to as “EFFECTIVE DATE”) by and

 

between

 

Delcath Systems, Ltd.,

a company duly organised and existing under the laws of Ireland, having its
registered office at Unit 19, Mervue Business Park, Mervue, Galway

(VAT No. IE9795453G)

 

- hereinafter referred to as "Delcath"-

 

and

 

medac Gesellschaft für klinische Spezialpräparate mbH,

a company duly organised and existing under the laws of Germany,

having its registered office at Theaterstrasse 6, 22880 Wedel, Germany

(VAT No. DE 118579535)

 

- hereinafter referred to as "medac"-

 

hereinafter individually and collectively referred to respectively as "a Party"
and "the Parties"

WHEREAS the Parties are established pharmaceutical companies;

WHEREAS Delcath has developed the medical device Delcath Hepatic CHEMOSAT®
Delivery System for the application of Melphalan and has obtained CE mark
approval thereof;

WHEREAS medac is interested in receiving a license to use the EC certificate and
its underlying KNOW-HOW in order to market and sell the PRODUCT in the
TERRITORY, and whereas medac is interested in being supplied by Delcath with the
medical device for this purpose. Delcath is willing to grant a respective
license and to supply the medical device to medac under the terms and conditions
set forth in this Agreement;

WHEREAS medac hereby appoints Delcath as its exclusive supplier of the PRODUCT
in the TERRITORY;

 

 

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NOW, THEREFORE, in consideration of the mutual covenants and the premises
contained herein, the Parties hereto enter into this License, Supply and
Marketing Agreement (the "Agreement") as follows:

1.

Definitions

For the purposes of this Agreement, each word or expression set out in capital
letters in this Agreement and all grammatical variations of such word or
expression shall, when capitalized in the manner shown in this Article and used
in this Agreement, have the meaning correspondingly assigned to such word or
expression in this Article. When not capitalized in the manner shown in this
Article and used in this Agreement, such word or expression shall have its
ordinary meaning:

1.1.

"AFFILIATE" shall mean with respect to either Party, any person, corporation,
company, partnership, joint venture, firm or other entity which is controlled
by, controls or is under direct or indirect common control with such Party. For
the purposes of this definition "control" shall mean (a) in the case of
corporate entities, direct or indirect ownership of at least fifty percent (50%)
of the stock or shares entitled to vote for the election of directors, managing
directors and (b) in the case of non-corporate entities, direct or indirect
ownership of at least fifty percent (50%) of the equity interest with the power
to direct management and policies of such non-corporate entities.

1.2.

"APPLICABLE LAWS" shall mean all laws, guidelines, directives, ordinances, rules
and regulations applicable to the manufacture of the PRODUCT and the obligations
of either Party, as the context requires under this Agreement, including,
without limitation and if applicable, (i) all applicable federal, state and
local laws and regulations; (ii) the EU Commission Directive and regulations on
the Community code relating to medicinal products for human use; (iii) the EU
GMPs; and (iv) any other requirements by any other Regulatory Authority,
government or governmental agency.

1.3.

"CONFIDENTIAL INFORMATION" shall mean all documents, methods, technical KNOW-HOW
and all other information that is non-public, confidential and proprietary in
nature irrespective of its form (including but not limited to oral, written,
printed form or forms of electronic data) disclosed by one Party to the other or
any of its directors, officers, employees, agents, consultants or
representatives relating to the business of the disclosing Party.

1.4.

“EX FACTORY PRICE” shall mean the selling price in the various countries,
exclusive of taxes and before subtraction of the deductions defined in Schedule
1 of this Agreement. EX-FACTORY PRICE is referred to as the EXF.

1.5.

“INTELLECTUAL PROPERTY” shall mean patents, designs (registered or not), utility
models including applications for any of the foregoing, copyright, rights in
KNOW-HOW, brand / trademark, trade or business names trade secrets, and other
similar rights or forms of protection of a similar nature or having equivalent
or similar effect to any of these which may subsist anywhere in the world
whether registrable or not and any licenses of any of the foregoing.

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1.6.

"INTELLECTUAL PROPERTY OF DELCATH” shall mean any and all INTELLECTUAL PROPERTY
relating to the manufacture of the PRODUCT generally, that is; (i) owned by or
licensed to Delcath or Delcath's AFFILIATES or Delcath’s Subcontractor at the
Effective Date; and (ii) developed, filed or acquired by, or licensed to,
Delcath or Delcath's AFFILIATES or Subcontractor after the Effective Date of
this Agreement.

1.7.

"KNOW-HOW" shall mean any and all techniques, data and information in the
control of Delcath as of the date of this agreement that are necessary or useful
to the development, manufacture or commercialization of the PRODUCT, including,
but not limited to inventions and intellectual property rights (if any)
pertaining thereto, discoveries, practices, processes, procedures, formulae,
methods, knowledge, skill, trade secrets, experience, test data, data, records
and information derived from development, adverse reactions, analytical and
quality control data, including data included in or necessary or useful for
obtaining regulatory approval.

1.8.

"IMPROVEMENT" shall mean any further development, enhancements or improvement
relating to the PRODUCT and its underlying KNOW-HOW, whether patentable or not.

1.9.

“MARKETABILITY” shall mean that the PRODUCT can be lawfully distributed within
the TERRITORY which includes that the PRODUCT is free of any defects as well as
no administrative orders or jurisdiction can hinder the lawful distribution of
the PRODUCT.

1.10.

"NET SALES" shall mean the amount medac invoices to distributors and/or end
users (hospitals, clinics, cancer centers, etc.) for the PRODUCT less

a) cash discounts, returns as well as purchase taxes and VAT, including but not
limited to rebates like the German "Herstellerrabatt/Generikarabatt" and
respective official rebates and tender related rebates;

b) credits or allowances granted on account of rejections, returns and invoicing
errors; and

c) logistic costs.

1.11.

"PRODUCT" shall mean the medical device Delcath Hepatic CHEMOSAT® Delivery
System for the administration of Melphalan including the labelling, packaging
and promotional material.

1.12.

"PRICE" shall have the meaning as set forth in Schedule 1.

1.13.

"TERRITORY" shall mean the territory of commercialization of the PRODUCT in the
following countries: all member states of the European Union, Norway, Iceland,
Liechtenstein, Switzerland and United Kingdom.  

TERRITORY can be extended by mutual agreement between the Parties.  Financial
consideration should take into consideration the amounts already paid by medac
under this Agreement.

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2.

Condition precedent

2.1.

As a condition precedent to this contract, medac will visit the premises of
Delcath Ltd. which includes the offices and depots in Ireland and the Agreement
shall only be set in force if medac approves Delcath Ltd. as a contractual
partner.

3.

Scope of the Agreement

3.1.

Delcath grants to medac an exclusive license for the PRODUCT in the TERRITORY
including any trademarks and/or EC-certificates and/or any approvals which might
be necessary for lawful marketing of the PRODUCT and use of the underlying
KNOW-HOW and INTELLECTUAL PROPERTY OF DELCATH. Delcath furthermore grants medac
the rights for the commercialisation of the PRODUCT in the TERRITORY which shall
among others include the rights of promotion, sale and distribution. Other than
for countries under 12.3, Delcath is not entitled to commercialise the PRODUCT
in the TERRITORY and will refrain from any of these measures.

3.2.

Delcath shall transfer a copy of all existing  EC-certificates and/or approvals
as well as of any other documents which might be necessary for lawful marketing
of the PRODUCT within thirty (30) calendar days after execution of this
Agreement and shall provide medac with each and any update and/or amendment of
these documents.

3.3.

medac agrees to use any document and/or information as well as INTELLECTUAL
PROPERTY OF DELCATH licensed by Delcath in compliance with this Agreement. In
particular medac must not market the PRODUCT in- or outside the TERRITORY for
other pharmaceuticals than Melphalan.

3.4.

Delcath hereby agrees to sell and supply the PRODUCT only and exclusively to
medac for the TERRITORY and medac agrees to purchase the PRODUCT exclusively
from Delcath.

3.5.

All existing INTELLECTUAL PROPERTY OF DELCATH and any IMPROVEMENT made to the
PRODUCT and its underlying KNOW-HOW during the Term shall belong to Delcath and
will be considered as part of the PRODUCT with no additional milestone or other
payments due by medac. Delcath will notify medac as soon as reasonably possible
after making any such IMPROVEMENT giving reasonable details of the IMPROVEMENT
and provide medac with all necessary information to evaluate the intellectual
property situation, if needed. Any IMPROVEMENT of the PRODUCT and respective
INTELLECTUAL PROPERTY OF DELCATH shall be automatically included in this
Agreement and medac shall be granted a license within the scope of the license
granted under 2.1 for this INTELLECTUAL PROPERTY OF DELCATH.

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3.6.

In the event Delcath desires to grant a license for commercialization of an
invention or discovery which does not meet the definition of PRODUCT or
IMPROVEMENT in this Agreement, but is marketed or intended to be marketed at
least in one of the indications of the PRODUCT, then Delcath shall inform medac
of such desire and grant medac an exclusive right of first negotiation to
acquire exclusive rights to commercialize this opportunity.

The exclusive negotiation period shall have a duration of ninety (90) days
commencing on the date of delivery to medac by Delcath of a notice pursuant to
advising medac of the opportunity. After expiration of this period without a
definitive agreement effective upon signing between the negotiating parties,
Delcath shall be free to negotiate with any other third party, provided however
the definitive agreement with the third party shall not contain terms more
favourable than those offered to medac.

3.7.

The name of the PRODUCT in the TERRITORY shall be Chemosat®. Delcath owns a
respective trademark for the medical device in the TERRITORY and will uphold the
respective trademark rights at their own costs including in Switzerland, Norway,
Lichtenstein, and Iceland

4.

Regulatory Affairs

4.1.

Delcath is responsible to fully ensure the MARKETABILITY of the PRODUCT within
the TERRITORY. In particular Delcath is responsible to obtain and maintain the
EC-certificate and similar certificates as required by applicable law to uphold
such MARKETABILITY.

4.2.

Delcath is responsible that within the TERRITORY the PRODUCT is fully compliant
with any APPLICABLE LAWS and provisions. Delcath is in particular aware of the
directive regarding medical devices of the European Union (EU directive
2017/745) including UDI requirements as well as of other APPLICABLE LAWS within
the TERRITORY such as medical devices laws and as a material obligation ensures
full compliance with the PRODUCT with any terms and provisions of these and any
other laws.

4.3.

Delcath shall bear all the fees which occur for ensuring the MARKETABILITY of
the PRODUCT within the TERRITORY including but not exclusively trademark costs,
costs for the EC-Certificate and similar certificates.

4.4.

The Parties will enter into a separate Quality Assurance Agreement which also
describes activities and responsibilities concerning vigilance.

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5.

Allowance

5.1.

In consideration of the rights granted under this Agreement medac shall pay to
Delcath [*] including VAT in the following instalments:

[*]

Both Parties agree that if any payments under this agreement are subject to
withholding tax according to local German tax law, e.g. allowance, royalties,
all payments of medac shall be reduced by the applicable local tax rate. The
respective tax amount will be paid by medac to the responsible local tax office.
After that medac shall provide Delcath with a certificate stating the withheld
tax amount which was transferred to the local tax office for the account of
Delcath.

The reduced tax rate according to the corresponding double taxation treaty
between Germany and Ireland is applicable if Delcath provides medac with a valid
certificate of exemption issued by the German federal central tax office
(Bundeszentralamt für Steuern) prior to the date the instalments are due. The
Parties mutually assure each other all reasonable assistance in order to receive
the certificate of exemption.

6.

Purchase of the PRODUCT

6.1.

Subject to the terms and conditions of this Agreement, medac shall purchase the
PRODUCT from Delcath exclusively for [*] starting with the first commercial
supply from Delcath to medac, provided that there is no infringement issue or
third party´s right at medac´s discretion. After the initial term the Parties
intend to renew this Agreement for [*]. They will negotiate this in good faith
at least six months in advance of expiry of the initial term.

6.2.

Delcath designs and manufactures the PRODUCT including material, packaging,
instructions for use and labelling according to the Regulation (EU) 2017/745 on
medical devices. Delcath ensures that the PRODUCT fulfills appropriate
conformity assessment procedure established for its class as IIb according to
Regulation (EU) 2017/745. Delcath is certified according to EN ISO 13485 via the
notified body.

6.2.1.

The PRODUCT is legally compliant, has a valid EU declaration of conformity, CE
marking of conformity, accompanied by the required instruction for use.

6.2.2.

Where Delcath as manufacturer of the PRODUCT is not established in the European
Union, Delcath ensures that the PRODUCT is placed on the European Union market
according to the provisions of Article 11 of the Regulation (EU) 2017/745.

6.2.3.

In order to ensure the applicable requirements and responsibilities, Parties
enter into a separate Quality Assurance Agreement at the latest before the
PRODUCT is placed on the market.

[*] Confidential Treatment Requested

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6.2.4.

The Quality Agreement defines the responsibilities with respect to quality
assurance including, but not limited to, the following obligations of Delcath,
sole authorized representative and medac:

 

•

carrying out the manufacturing, quality testing and release of the PRODUCT in
accordance with the requirements of the Regulation (EU) 2017/745 in a timely and
efficient manner;

 

•

maintaining the certification of the PRODUCT;

 

•

verifying EU declaration of conformity, carrying out the of the appropriate
conformity assessment procedure by authorized representative;

 

•

regulation concerning qualification, selection, approval, purchase and
maintenance of supplier in accordance with the requirements of quality
management system.

6.2.5.

In case there is divergence between the Quality Agreement and this Agreement
regarding quality issues the Quality Agreement shall be decisive. In all other
respects this Agreement shall prevail.

7.

Forecast / Orders / Terms of delivery

[*]

8.

Audits

medac shall have the right to audit the manufacturing site and quality system of
Delcath and its AFFILIATES, e.g. Delcath Systems Inc., USA, for the compliance
with regulatory requirements for the manufacturing of the PRODUCT. These audits
shall be limited to one time a year and shall take place on any business day
after arrangement with Delcath and without unnecessary disturbance of
operational procedures. Each Party shall bear its own costs, including, but not
limited to, personnel and travel costs, itself. In case there is a reasonable
indication that Delcath does not comply with this Agreement or other applicable
legal regulations related to the manufacturing of the PRODUCT, medac shall
always and without any limitation be entitled to audit the facilities of Delcath
and AFFILIATES. In such an event and for any activities required to enhance
compliance with regulatory requirements the respective costs shall be borne by
Delcath. medac will audit the manufacturing site, the EU release site and the
quality system of Delcath prior to the execution of this Agreement.

Delcath shall have the auditing right in order to confirm medac´s sales
reporting. This audit shall be limited to one time a year and shall take place
on any business day after arrangement with medac and without unnecessary
disturbance of operational procedures. Each Party shall bear its own costs,
including but not limited to personnel and travel costs, itself. In case there
is a reasonable indication that medac does not comply with this Agreement, the
GxP or other applicable legal regulations, Delcath shall always and without any
limitation be entitled to audit the facilities of medac. In such an event the
respective costs shall be borne by medac.

[*] Confidential Treatment Requested

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9.

PRICES and Payment for the Supply of the PRODUCT

9.1.

medac shall pay the PRICE for the PRODUCT as stated in Schedule 1.

9.2.

Payment of invoices for PRODUCT are due thirty (30) days after receipt of each
invoice for PRODUCT.

9.3.

All payments shall be made in Euro.

10.

Warranty, Defects in quality/quantity, recalls

10.1.

Delcath warrants that the PRODUCT is manufactured according to cGMP and that the
PRODUCT has full MARKETABILITY in the TERRITORY.

10.2.

medac shall be obliged to inspect and examine the quantity and apparent defects
of the PRODUCT immediately upon receipt. Should there be any apparent damage to
the packaging of the PRODUCT, medac shall draw up a report of defects to be
submitted to Delcath, if applicable. In the event that the PRODUCT does not
conform to specifications and warranties of this Agreement or do not comply with
legal requirements, medac shall inform Delcath within 10 working days after
receipt of the PRODUCT of apparent defects in quality or quantity in writing.
Failure or delay shall mean acceptance of the delivered PRODUCT and waiver any
potential rights medac may have with respect to the delivered PRODUCT.

10.3.

Hidden defects shall be announced to Delcath in writing as soon as possible
after detection.

10.4.

As soon as possible [*] shall dispose and replace defective PRODUCT.

10.5.

If there is a disagreement between the Parties as to the compliance of the
PRODUCT with specifications, warranties and legal requirements sample may be
sent to an independent laboratory for final evaluation, which shall be binding
for both Parties. The independent laboratory shall be selected by both Parties
jointly. In case the Parties do not agree upon an independent laboratory, such
shall be chosen by the Chamber of Commerce in Hamburg, Germany. If the
independent laboratory finds the PRODUCT to conform to the specifications,
warranties and legal requirements medac shall bear the costs of the laboratory
and the Chamber of Commerce. Otherwise the costs shall be borne by Delcath.

[*] Confidential Treatment Requested

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10.6.

If a recall of the PRODUCT from the market is necessary, or if a health
authority requires such withdrawal or recall from a Party, the respective Party
shall immediately advise the other Party of such necessity or request, and both
Parties shall without delay discuss the modalities of such withdrawal or recall.
The final decision on a withdrawal or recall in the TERRITORY shall rest with
[*]. To the extent such withdrawal or recall is due to the non-compliance of the
PRODUCT with specifications, warranties, cGMP about which medac informed Delcath
in accordance with 9.2 or 9.3 and legal requirements and/or an infringement of
third party rights.

[*].

10.7.

In the event that a Party recommends initiating a batch recall or that the
health authority requires such batch recall, the Parties shall cooperate in good
faith to determine the measures that should be taken. The Parties shall
immediately commence research in order to determine the cause of the defect in
the batch. The Parties will support each other and provide any necessary
assistance in the handling of any PRODUCT return, quality complaint, vigilance
activities, and recalls or other Field Safety Corrective Actions
(responsibilities are further defined in the Quality Agreement).

 

•

In the event of a batch recall in the following situations:

 

o

non-observance by Delcath of the APPLICABLE LAWS, the Quality Assurance
Agreement, the GMPs, or any other document relevant to the execution of this
Agreement; or

 

o

defects in the PRODUCT or its design (including defects of components)

 

o

defect in the quality control of the PRODUCT,

[*]

10.8.

In an event as listed in Article 10.7, the disposal of the defective batch shall
be carried out at [*]’s expense. The Party carrying out the disposal shall
provide the other Party with a certificate of disposal including the following
information:

 

•

The reference number of the corresponding batch; and

 

•

The name of the company which carried out the disposal; and

 

•

The quantity of the PRODUCT of which Delcath, or the company it has nominated,
has disposed.

10.9.

The Parties shall inform each other immediately of any claims with regard to the
PRODUCT arising from a third party or health authority and give each other all
reasonable support.

[*] Confidential Treatment Requested

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11.

Responsibilities, Warranties, Indemnity and Liability

11.1.

Delcath is responsible for maintaining any CE mark as required by national law.
Delcath is also responsible to uphold trademark protection for the PRODUCT
within the TERRITORY.

11.2.

Delcath will name medac on the PRODUCT sold under the Agreement as Delcath’s
exclusive marketing, sales, and distribution partner for the Territory. medac is
entitled to apply a respective signature on PRODUCT, packaging and all other
material relating to the PRODUCT.

11.3.

Delcath will identify and transfer all existing customers in the TERRITORY to
medac in accordance with Schedule 4.

11.4.

Delcath will provide all the background information and correspondence with
authorities regarding reimbursement in the TERRITORY.

11.5.

Delcath will supply medac with the PRODUCT from Delcath’s own manufacturing
facility in the United States through its distribution center in Ireland.

11.6.

Delcath will be responsible for gaining, maintaining and or renewing import
licenses and other regulatory clearances and approvals needed to import the
PRODUCT into each country of the TERRITORY.

11.7.

Delcath will be responsible to prosecute, maintain, enforce and defend
INTELLECTUAL PROPERTY OF DELCATH using commercially reasonable efforts.

11.8.

Delcath warrants and represents to and for the benefit of medac under this
Agreement that all PRODUCT supplied by Delcath shall be manufactured, packaged,
tested, stored, delivered in accordance with this Agreement, the general and
specific manufacturing procedures, the Quality Agreement, the EU GMP, APPLICABLE
LAWS and the specifications.

11.9.

Delcath further warrants and represents to and for the benefit of medac:

 

•

that the PRODUCT has been lawfully assembled by Delcath in compliance with all
industry norms and that all related documents disclosed by Delcath to medac will
be true, correct and complete and there is no other fact or matter not disclosed
to medac under this Agreement, which might reasonably affect medac’s willingness
to enter into this Agreement;

 

•

that the PRODUCT is feasible at an industrial level and  is of merchantable
quality;

 

•

the PRODUCT and related documents are provided to medac free and clear of all
liens, claims and encumbrances.

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11.10.

medac, in its turn, guarantees, warrants and represents to and for the benefit
of Delcath under this Agreement full compliance with all APPLICABLE LAWS and
regulations in the TERRITORY as regards storage and/or handling and/or promotion
and/or distribution and/or marketing of the PRODUCT in the TERRITORY.

11.11.

medac will be responsible for commercializing, including promoting the sale of,
and distributing, the PRODUCT in the TERRITORY and will bear all costs related
to the distribution and commercialization of the PRODUCT in the TERRITORY. Medac
shall at its own cost employ, train and maintain suitably qualified personnel to
ensure the proper fulfilment of all of its obligations in the TERRITORY.

11.12.

medac will commercialize and distribute the PRODUCT in each country of the
TERRITORY where it is commercially reasonable to do so and will commence these
activities in a commercially reasonable timeframe. Medac will be responsible for
marketing on a regional, local and hospital level in the TERRITORY. To the
extent permitted by any APPLICABLE LAWS, the Parties will cooperate with each
other with respect to all reimbursement and price negotiations  as well as
health technology assessments.

11.13.

medac will provide Delcath with quarterly reports of sales of PRODUCT in the
TERRITORY.

11.14.

Each Party warrants to the other that:

 

•

it is a company duly incorporated, validly existing and in good standing under
the law of the country of its incorporation and has the requisite capacity,
power and authority to enter into and to perform its obligations under this
Agreement;

 

•

execution, delivery of and the performance by the Party of its obligations under
this Agreement shall not:

 

o

result in a breach of any provisions of the memorandum or Articles of
association of that Party;

 

o

result in a breach of, or constitute a default under, any instrument by which
the Party is bound including any agreement or arrangement between itself, one of
its AFFILIATES and any third party; or

 

o

result in a breach of any order, judgment or decree of any court or governmental
agency by which the Party is bound; or result in breach by that Party (or any of
its employees or agents) of any regulatory requirements.

11.15.

The warranties provided for in this Article 11 shall be in addition to those
implied by law.

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11.16.

Either Party shall defend, indemnify and hold the other Party harmless from and
against any third party claim, damage, costs, expenses, injury or loss except
indirect losses whatsoever based upon or arising out of any (a) breach of
warranties by the former Party and/or (b) any gross negligence or wilful
misconduct of the former Party under this Agreement and/or (c) any material
breach, non-observance or non-performance by the former Party of its obligations
under this Agreement.

11.17.

To the extent permitted by law, neither Party shall be liable for indirect,
punitive, consequential or special damages whatsoever, unless not otherwise
expressively agreed in this Agreement.

11.18.

Nothing in this Agreement shall operate to exclude or restrict either Party's
liability for:

 

•

death or personal injury resulting from wilful misconduct;

 

•

fraud or deceit;

 

•

any other form of liability which may not be excluded or limited by APPLICABLE
LAWS.

11.19.

In the light of this Article, the Parties agree to take out and keep up to date
for the duration of this Agreement and any extensions thereof, an insurance
policy financially substantial enough to cover all and any liability incurred by
virtue of the said clauses. Each Party agrees that on request by the other Party
it shall prove by written records the existence and conditions of such an
insurance policy.

11.20.

The Parties each designate individuals who will participate in a monthly
conference call, which can become less frequent as time goes on, to discuss
clinical programs, medical information, customer feedback and issues.

Medac appoints the following individuals:

 

1.

[*] (Vice President Therapeutic Area Oncology)

 

2.

[*] (Director Therapeutic Area Oncology)

 

3.

[*](Global Portfolio Manager Oncology)

 

4.

[*] (Responsible Person for Scientific Information)

[*] Confidential Treatment Requested

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Delcath appoints the following individuals:  

 

1.

[*] CEO, Delcath Systems, Inc.

 

2.

[*] Executive Vice President, Global Head of Operations, Delcath Systems, Inc.

 

3.

[*] Vice President – Medical Affairs, Delcath Systems, Inc.

 

4.

Delcath Systems, Ltd.: within 10 (ten) days after signing of this Agreement
Delcath will appoint a Representative of Delcath Systems, Ltd. and will notify
medac accordingly.

11.21.

If there are no positive results of the FOCUS trial with respect to the efficacy
as defined in the trial protocol, the Parties will, in good faith, discuss ways
in which to maintain commercially reasonable viability. For the avoidance of
doubt in this case medac is not obliged to pay the respective instalment
according to Article 4.1.

11.22.

Delcath will inform medac about any changes in information material relating to
the PRODUCT.

12.

Third party rights and enforcement of IP against third parties

12.1.

To the best of Delcath´s knowledge, the execution of this Agreement by Delcath
and/or medac, in particular the distribution/commercialisation of the PRODUCT in
the TERRITORY, the manufacture of the PRODUCT in the country of manufacture, of
batch release, of storage or importing  the PRODUCT do not infringe any third
party INTELLECTUAL PROPERTY rights. All relevant INTELLECTUAL PROPERTY rights
were provided by Delcath in September 2017 and there were no relevant updates,
e.g. concerning divisional applications. If needed by medac, Delcath will
provide medac with further documents and data to perform future IP checks. If
medac infringes any third party INTELLECTUAL PROPERTY rights due to incorrect or
missing information provided by Delcath, Delcath shall fully indemnify medac of
any costs including lawyers’ fees occurring in this regard.

12.2.

If medac is charged with the infringement of third party rights based on the
execution of this Agreement, then medac shall immediately inform Delcath about
this allegation. In this case Delcath has the obligation to support medac in any
way and provide help to counterclaim; especially if analyses are requested on
the PRODUCT provided by Delcath and/ or any data on the PRODUCT or the
manufacturing process of the PRODUCT and will pay reasonable costs incurred by
medac in defense of any such charge.

12.3.

Delcath shall be solely responsible for the prosecution and maintenance of the
underlying INTELLECTUAL PROPERTY OF DELCATH of the PRODUCT and for the conduct
of any claims or proceedings relating to the INTELLECTUAL PROPERTY OF DELCATH
including any validity challenges of third parties, nullity or opposition
proceedings. Delcath shall keep medac reasonably informed at all times as to the
status of the prosecution and maintenance of all INTELLECTUAL PROPERTY OF
DELCATH and in any event providing a written update if requested by medac.

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Delcath shall enforce and defend the underlying INTELLECTUAL PROPERTY OF DELCATH
of the PRODUCT at its own cost and expense, if such defence is judged by the
patent attorneys in power as promising. medac shall fully co-operate with
Delcath and its legal counsel, or otherwise assist in such proceedings. Delcath
shall keep medac and its counsel reasonably informed at all times as to the
status of the proceedings.

If Delcath fails to enforce or defend the underlying INTELLECTUAL PROPERTY OF
DELCATH of the PRODUCT within ten (10) days of becoming aware or of being
notified of the same, then, medac may without prejudice to any other right it
may have under this Agreement or otherwise give Delcath written notice requiring
Delcath to take such proceedings within five (5) days of the date of the notice.
If Delcath fails to do so, medac shall be entitled to enforce or defend the
underlying INTELLECTUAL PROPERTY OF DELCATH of the PRODUCT at its cost and
expense. The reasonable costs of any such settlement (including, without
limitation, damages, legal costs, lump sums or other amounts) or, if no
settlement is reached, of any judgement or award made against medac or its
AFFILIATES, distributors or sublicenses, may be set off by medac against the
PRICE payable by medac hereunder. However, medac shall only be entitled to a
reimbursement if it can demonstrate that Delcath has wrongfully assessed
insufficient prospects of success. Delcath shall provide all reasonable
assistance to medac in relation to such proceedings at its own cost and expenses
in a timely manner. Delcath is aware of the fact that especially in Germany but
also in the further TERRITORY effective remedies against IP-infringements
require immediate legal actions.

13.

Term and Termination

13.1.

This Agreement becomes effective on the EFFECTIVE DATE and the supply of the
PRODUCT shall continue for a period of seven (7) years starting with the first
delivery of the PRODUCT. After the initial term the Parties intend to renew this
agreement for another five (5) years. They will negotiate this in good faith at
least six months in advance of expiry of the initial term.

[*]

13.2.

Either Party shall be entitled, by notice to the other, to terminate this
Agreement immediately only, if

 

•

the other Party loses a necessary approval for importing, manufacture, marketing
or selling of the PRODUCT;

 

•

the other Party culpably commits or permits a material breach or default of any
of the provisions of this Agreement and fails to remedy or cure such breach or
default within sixty (60) calendar days after written notice of such breach has
been received;

 

•

the other Party should be dissolved, becomes insolvent, bankrupt or otherwise be
faced with circumstances reasonably warranting the conclusion that the Party
will not be able within the foreseeable future, to adequately comply with its
obligations under this agreement;

 

•

[*]

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•

in case of Force Majeure Event as described in Article 14.  

13.3.

Either Party may terminate this Agreement because of an uncured breach provided
the Party claiming a breach gives the other Party 50 day advanced written notice
of such breach and the possibility to remedy such breach.  

[*]

 

b)

with immediate effect by medac:

 

•

in the event that any health authority and/or a competent court takes any
action, or raises any objection, that prevents medac from commercialising the
PRODUCT in the TERRITORY.  Additionally, medac will have the right to terminate
this Agreement immediately in the event that the PRODUCT cannot be reasonably
commercialised for medical or  scientific reasons in the TERRITORY, unless a
remedy is impossible neither of these 2 events is grounds for termination by
medac if they are remedied within 60 days of written notification to Delcath of
either events and the grounds on which the event is based;

 

•

in the event of an INTELLECTUAL PROPERTY infringement claim brought by any third
party against medac or Delcath (or its subcontractor) which prevents or hinders
the commercialisation, manufacture of the PRODUCT or which prevents medac or
Delcath from exercising its obligations hereunder.

13.4.

[*]

13.5.

At the sole discretion of medac, medac may resell any remaining non-expired
PRODUCT to Delcath at the purchase price, and may assign to Delcath any
trademarks obtained for the PRODUCT against a reasonable consideration payable
by Delcath, which shall at the minimum cover the costs of medac for obtaining
and maintaining the trademarks.

13.6.

Orders placed and confirmed and for which manufacture has started prior to the
date of termination shall remain valid (except in the event of termination by
for breach by Delcath pursuant to Article 11.3 or in the event of termination
for quality failure), and for other orders placed by medac but not confirmed by
Delcath, or for which manufacture has not started as of the termination date,
the Parties shall discuss and agree on whether they shall remain valid or shall
be cancelled.

13.7.

The expiry or termination of this Agreement for any reason shall not affect the
rights and obligations of the Parties already accrued prior to the effective
date of expiry or termination of the Agreement.

13.8.

[*]

13.9.

Termination or expiration of this Agreement will not relieve either Party of any
obligation accruing prior to such expiration or termination, including any
breach of such obligations, and all provisions which are expressed to or by
implication survive this Agreement will remain in full force and
effect.  (Provisions relating to Confidentiality, Indemnification and
Liabilities; APPLICABLE LAWS, Quality, Effect of termination and INTELLECTUAL
PROPERTY shall survive expiration or termination of this Agreement).

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13.10.

[*]

14.

Force Majeure

14.1.

The Parties hereto shall not be responsible for any damage if the performance of
all or parts of this Agreement is hindered or prevented by causes beyond the
performing Party’s control and without its fault or negligence, including, but
not limited to, acts of God or acts, laws, orders or regulations of any
government or department or agency thereof acting in either its sovereign or
contractual capacity, fires, floods, machinery breakages, strikes, work
stoppages or other job actions, freight embargoes, boycotts, riots and wars.

14.2.

Either Party may, in the event that any Force Majeure cannot be removed or
overcome within three (3) months from the date the Party affected first became
affected, at the expiration of this period by notice to the other Party
terminate this Agreement.

15.

Confidentiality

15.1.

The Parties agree to keep secret and not to communicate all CONFIDENTIAL
INFORMATION. The Parties shall disclose such CONFIDENTIAL INFORMATION only to
those employees, agents, etc. who have a need to know and only if such
employees, agents etc. are bound by confidential obligations comparable to this
provision.

15.2.

This secrecy obligation does not apply to any information of which the receiving
Party can prove by written documents that it

 

•

was known to the public at the time of the receiving Party’s receipt;

 

•

was lawfully received by the Party from a third Party who has no obligation of
Confidentiality to the disclosing Party;

 

•

was independently developed by the Party or available to it prior to this
agreement;

 

•

was released from the restrictions of this provision by the express prior
written consent of the disclosing Party; or

 

•

has been disclosed in compliance with any legal requirement, provided that the
disclosing Party has notified the other Party prior to the disclosure of the
information and provided that the Party shall disclose only the minimum amount
of information required for the purpose of the said legal requirement;

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15.3.

This provision shall continue in full force and effect, notwithstanding the
expiration or termination of this Agreement for any reason for a period of five
(5) years after expiration/termination.

15.4.

Notwithstanding the above provisions of this Article 14, medac shall be free to
disclose the information received from Delcath i) to any AFFILIATES, or ii) in
the course of executing the Agreement or in anticipation of termination or
expiration of this Agreement, to any consultant or sub-contractor of its
choosing; or iii) to the health authorities; or iv) to any third party provided
such disclosure is necessary to achieve the purpose of this Agreement. Any party
to whom medac discloses the information will be bound to the same
confidentiality obligations as set forth herein.

16.

Miscellaneous

16.1

The Parties hereto agree that in connection with this Agreement the status of
each of them in relation to the others is that of an independent trader acting
in its own name and for its own account. Accordingly, none of the Parties has,
or will be considered to have, any power of authority to act as an agent or
representative of the other Party, nor have any power of authority to contract
in the name, or create or assume any obligation or liability against, or
otherwise legally bind the other Party in any way for any purpose, unless
otherwise expressly provided herein. All costs and expenses connected with each
Party's activities and performance under this Agreement are to be borne solely
by the Party incurring such costs and expenses.

16.2

The general terms and conditions of both Parties shall be excluded, even if
specific reference is made in respective order forms, order confirmations etc.

16.3

The failure by any Party at any time to enforce any of the terms, provisions or
conditions of this Agreement or to exercise any right hereunder shall not
constitute a waiver of the same or affect the validity of this Agreement or any
part hereof, or that Party's right thereafter to enforce or to exercise the
same. No waiver by a Party shall be valid or binding unless in writing and
signed by a duly authorised representative of the waiving Party.

16.4

Other than a change of control, the Parties shall not assign any of their rights
or obligations hereunder without the prior written consent of the other Party,
provided that medac may assign all rights and obligations hereunder to any of
its AFFILIATES.

16.5

The fulfilment of contractual rights and obligations arising out of this
Agreement is subject to the compliance with (a) all requirements medac as a
registered AEO (Authorised Economic Operator) is obliged to fulfil and to
request from Delcath and (b) all relevant national and international regulations
including but not limited to required export/import licenses, shipment
authorisations, foreign trade legislation requirements or releases by the
competent authorities and embargo or export/import regulations.

16.6

The Parties hereto acknowledge that this Agreement and possible future written
amendments hereto set forth the entire Agreement.

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16.7

Modifications of this Agreement have to be made in writing. This applies to this
modification provision as well.

16.8

This Agreement is construed in accordance with and shall exclusively be governed
by the laws of [*]. The [*] and [*] shall not apply.

16.9

All disputes, controversies or claims arising out of or in connection with this
contract, including any question regarding its existence, validity or
termination, shall be referred to and finally resolved by arbitration under the
Rules of the London Court of International Arbitration (LCIA), which Rules are
deemed to be incorporated by reference into this clause. The arbitration shall
be before a single arbitrator mutually agreed upon by the Parties who shall
interpret this Agreement in accordance with the laws of England. The seat of the
arbitration shall be in London. The language to be used in the arbitration shall
be English.

16.10

Should provisions of the present Agreement not be legally effective, completely
or partially, or later lose their legal effectiveness, the validity of the
remaining provisions of the contract shall not thereby be affected. Instead of
the ineffective provision an appropriate provision shall be inserted, which – as
far as legally permitted – comes close to that which the contracting Parties
wanted or is nearest in meaning to their intended economic purpose.

16.11

During the Term, medac shall not market, promote or sell within the TERRITORY
any other percutaneous hepatic perfusion devices intended to deliver a therapy
directly (as opposed to systemically) into the liver and specifically reimbursed
for the same indications as the PRODUCT.

 

Galway, date:

 

Wedel, date:

 

 

 

For and behalf of

 

For and behalf of

Delcath Ltd.

 

medac GmbH

 

 

 

/s/ Jennifer K. Simpson

 

/s/Heiner Will

Jennifer K. Simpson

 

Heiner Will

Director

 

CMO

 

 

 

 

 

/s/Jorg Hans

 

 

Jörg Hans

 

 

CEO

 

 

 

 

 

/s/Bergit Buettner

 

 

Bergit Buettner

 

 

Legal Council

 

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Schedule 1: Product, Price

Schedule 2: Supply chain at effective date

Schedule 3: Package Size

Schedule 4: Customer Transition Plan

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Schedule 1:

PRODUCT, PRICE

[*]

Within [*] during the Term, medac shall submit a report of the NET SALES of the
preceding quarter to Delcath including the quantity of the sold PRODUCT (PS)
differentiated by the respective countries of the TERRITORY. Simultaneously,
medac will, by wire transfer, send to Delcath an amount calculated according to
the calculation schemes above.

medac shall keep a true and accurate accountancy and record all relevant data to
illustrate the NET SALES pursuant to the generally accepted guidelines of the
accountancy.

In accordance with Article 7 of this Agreement, Delcath shall have the right to
inspect these books by an independent public account at reasonable times and to
such an extent as will not interfere with normal operations of medac. The costs
for such an audit shall by borne by Delcath. However, in case of the discovery
of any inaccuracies the costs shall be borne by medac.

 

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Schedule 2:

SUPPLY CHAIN AT EFFECTIVE DATE

 

Company

Address

Activity

Delcath Systems, Inc.

 

566 Queensbury Avenue

Queensbury, NY 12804

USA

Design, manufacture,

distribution of sterile hepatic

drug delivery and filtration devices

Delcath Systems, Inc

95 Park Rd.

Queensbury, NY 12804

USA

Design, manufacture

(packaging, labelling and final

release) and distribution of

sterile hepatic drug delivery and

filtration devices

Delcath Systems, Ltd

 

Unit 19 – Mervue Business

Park

Galway Ireland

Manufacture (packaging,

labelling and final release) and

distribution of sterile hepatic

drug delivery and filtration devices

Donawa Consulting S.r.l.

Piazza Albania 10,

00153 Roma

Italy

EU representative

 

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Schedule 3:

PACKAGE SIZE

[*]

 

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Schedule 4:

CUSTOMER TRANSITION PLAN

Within 10 business days following execution of this Agreement and receipt of
initial exclusive marketing license upfront fee, Delcath will provide medac with
a list of present customers by country, purchasing decision makers and related
key people and contact coordinates for each along with a purchasing history. In
the same period, Delcath will also provide medac with a list of prospective
customers, a brief history of interaction, and key people and contact
coordinates for each.

If not already provided, Delcath will provide medac with copies of all sales and
marketing materials used in each country. Within 20 business days after receipt
of these materials from Delcath, medac will provide its plan for sales and
marketing materials and anticipated timing for use in the market as they will be
subject to Delcath’ approval.

On or about [*], Delcath will notify present and prospective customers that
medac will be marketing Chemosat in Europe and will introduce the appropriate
medac personnel to said present and prospective customers.

Delcath to provide reasonable support to medac sales efforts through existing
Delcath Sales staff for as long as feasible.

 

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