[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

Exhibit 10.1

 

 

24 May 2016

 

 

 

 

 

 

 

 

 

 

(1)

OWEN MUMFORD LIMITED

 

 

and

 

 

 

 

(2)

VERSARTIS GMBH

 

 

 

 

 

 

 

_________________________________

 

MANUFACTURING AND SUPPLY AGREEMENT

_________________________________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

THIS AGREEMENT is made on the     24th  day of   May  2016 (the “Agreement”)

 

BETWEEN

 

(1)

OWEN MUMFORD LIMITED, a company incorporated in England and Wales with
registration number 1257871 whose registered office address is at Brook Hill,
Woodstock, Oxford  OX20 1TU, UK (“Owen Mumford”); and

 

(2)

VERSARTIS GMBH, a limited liability company registered in Switzerland whose
principal place of business is at Mühlenberg 7, 4052 Basel, Switzerland (the
“Customer”).

 

BACKGROUND

 

(A)

Owen Mumford is a world leader in the development and manufacture of medical
devices for, amongst other things, drug delivery.  

 

(B)

The Customer is a subsidiary of Versartis, Inc., a pharmaceutical company
developing drug products including a long-acting form of recombinant human
growth hormone.

 

(C)

The Customer wishes to appoint and Owen Mumford wishes to accept the appointment
from the Customer to manufacture and supply drug delivery devices and units of
combination product containing such device and drug supplied by Customer for the
Customer on the terms of this Agreement.

 

(D)

The Customer will supply to Owen Mumford the active pharmaceutical ingredient in
prefilled syringes and certain other materials which will be incorporated by
Owen Mumford into the drug delivery device as set out in this Agreement.

 

OPERATIVE PROVISIONS

 

1

Definitions

 

1.1

In this Agreement the following words and expressions have the meaning set out
below:

 

Affiliate

means any company or other entity which directly or indirectly controls, is
controlled by or is under common control with a party, where ‘control’ means the
ownership of more than 50% of the issued share capital or other equity interest
or the legal power to direct or cause the direction of the general management
and policies of that party or such company or other entity;

 

Authorised Sub-contractor

 

means any sub-contractor for the supply of the Device or Final Combination
Product on a temporary basis under clause 4.3, as agreed between the parties
from or alternatively as listed in the Quality Agreement;

 

Business Days

means Monday to Friday (inclusive) except bank or public holidays in England and
in the United States of America;

 

-2 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

Certificate of Analysis

means a listing of all results for tests conducted on samples of a lot of the
Device or the Final Combination Product compared to the specifications defined
by the Customer and listed in the regulatory applications;

 

Certificate of Conformity

means a signed certificate issued by Owen Mumford certifying the conformity of a
batch of Devices with the Specification and GMP (but excluding certification of
any testing or inspection of the Drug or its syringe beyond visual inspection
for damage or discoloration);  

 

Confidential Information

means, in relation to each party, (i) all information in any form or medium
disclosed by that party (the “disclosing party”) to the other party (the
“receiving party”) under or in connection with this Agreement whether before, on
or after the Effective Date, and (ii) the terms of this Agreement;

 

Customer Materials

means all materials (including the Drug) supplied by the Customer to Owen
Mumford;

 

Device

means the auto-injector device as described in Part 1 of Schedule 1, or any
similar auto-injector device incorporating design features within the scope of
the patents or other intellectual property covering the combination of features
described in Part 1 of Schedule 1, in each case solely for use in the Field;

 

Drug

means the long-acting form of human growth hormone known as somavaratan (or
VRS-317);

 

Effective Date

means the date set out at the top of this Agreement;

 

Exchange Rate

means the Bank of England’s published mid-market exchange rate of UK Pounds
Sterling to U.S. Dollars;

 

Exchange Rate Comparison Date

means whichever is the later of the Effective Date or the latest date on which
any amendment of the Price was effected under clause 10.5;

 

Field

 

 

 

means treatment of human growth hormone deficiency and any other condition for
which any human growth hormone product is approved in the Territory, including
but not limited to idiopathic short stature (ISS), small for gestational age
(SGA), Prader-Willi syndrome (PWS), and Turner syndrome using any human growth
hormone product or analogue;

 

 

-3 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

Final Combination Product

 

 

 

means the product produced by Owen Mumford using the Device and Customer
Materials (including the Drug) as described in Part 3 of Schedule 1 and as
labelled and packaged in accordance with Part 2 of Schedule 1 (and for the
avoidance of doubt for the purposes of the purchase commitment in clause 2.3 a
Final Combination product shall include any product comprising a Device and a
Drug);

 

GMP

means the principles of good manufacturing practice as set out in EC Directive
93/42/EEC, EC Directive 2003/94 and/or CRF title 21 part 210, 211 and 820 each
as amended from time to time, or any successors to them and any other applicable
regulations;

 

Intellectual Property Rights

means patent applications, patents, rights to inventions, copyright and related
rights, trademarks, trade names and domain names, rights in designs, rights in
computer software, database rights, rights in confidential information
(including know-how) and any other intellectual property rights, in each case
whether registered or unregistered and including all applications (or rights to
apply) for, and renewals or extensions of, such rights and all similar or
equivalent rights or forms of protection which subsist or will subsist now or in
the future in any part of the world;

 

Limited Field

 

means the treatment of human growth hormone deficiency and all other analogous
conditions using a long-acting human growth hormone or analogous product dosed
once weekly or less frequently;

 

Minimum Order Quantity

 

means [*] units of the Final Combination Product;

 

Price

means the fee payable by the Customer in relation to the supply of each unit of
the Final Combination Product to the Customer as set out in Schedule 2;

 

Primary Packaging

 

 

means packaging that envelops the Final Combination Product and retains such
Final Combination Product as described in Part 2 of Schedule 1;

 

Purchase Order

means a written order for Final Combination Product received by Owen Mumford
from the Customer;

 

-4 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

Quality Agreement

 

 

 

 

means a quality agreement setting out the quality standards applicable to the
Device and the assembly of the Final Combination Product as agreed by the
parties in accordance with clause 2.6;

 

Secondary Packaging

 

means any packaging which is external to the Primary Packaging as described in
Part 2 of Schedule 1;

 

Specifications

means the detailed technical and other requirements for the Device and the
assembly of the Final Combination Product as set out in the Quality Agreement
(but excluding any specifications relating to the efficacy, chemical
composition, or any other quality of the Drug);

 

Term

 

means the term of this Agreement as determined in accordance with clause 15; and

 

Territory

 

means worldwide.

 

1.2

In this Agreement:

 

 

1.2.1

references to clauses are to the clauses of this Agreement;

 

 

1.2.2

references to the parties are to the parties to this Agreement;

 

 

1.2.3

headings are used for convenience only and do not affect its interpretation; and

 

 

1.2.4

references to a statutory provision include references to the statutory
provision as modified or re-enacted or both from time to time and to any
subordinate legislation made under the statutory provision.

 

2

Supply of the Device and Assembly of the Final Combination Product

 

2.1

During the Term of this Agreement:

 

 

2.1.1

Owen Mumford agrees to manufacture the Device, to assemble the Device with the
Customer Materials and to supply the Final Combination Product to the Customer
each in accordance with the Specifications.

 

2.1.2

If following marketing authorisation Customer wishes to substantially modify the
Device or create an alternate somavaratan device for a specific formulation,
indication, geography, or other purpose, the Parties shall discuss in good faith
a modification of this Agreement necessary to effectuate supply by Owen Mumford
of such next generation device.

 

2.2

Subject to the minimum purchase obligations described in clause 4.4, Owen
Mumford agrees to manufacture the Device exclusively for the Customer for use in
the Field and undertakes not to manufacture the Device for any other customer
for use in the Field for the Term.  

 

2.3

The Customer agrees to purchase from Owen Mumford:

 

 

2.3.1

the Customer’s entire requirement for the Final Combination Product in respect
of territories and countries outside the European Economic Area during the
entirety of the Term; and

 

-5 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

 

2.3.2

the Customer’s entire requirement for the Final Combination Product with respect
to those countries in the Territory within the European Economic Area (“EEA
Countries”), with effect from the date of grant of the first marketing
authorisation granted for the Final Combination Product in the European
Union  (the “Authorisation Date”) and thereafter for the remainder of the Term
except on the [*] anniversary of the Authorisation Date the Customer’s
exclusivity commitment will be reduced to a commitment to purchase [*] of its
entire requirement for the Final Combination Product from Owen Mumford with
respect to the EEA Countries.  The parties may agree to extend the period of
exclusivity for the EEA Countries for an additional period, by mutual written
consent, subject to compliance with applicable laws.

 

2.4

Owen Mumford agrees to supply the Final Combination Product with the Primary and
Secondary Packaging and any labelling, leaflets and/or trademarks specified in
Part 2 of Schedule 1, or such other Primary and Secondary Packaging and
labelling, leaflets and/or trademarks as are agreed in writing between the
parties from time to time.

 

2.5

During the Term the Customer will provide Owen Mumford with Customer Materials
in bulk packaging as required for the production of the Final Combination
Product.

 

2.6

As soon as possible following signature of this Agreement, but in no event more
than six (6) months after the Effective Date, the parties will prepare and
negotiate in good faith a quality agreement setting out the design history file
contents, Specifications, and quality standards which will apply to the Device
and the Final Combination Product and such agreement shall, when executed by
both parties, be annexed to Part 4 of Schedule 1 and shall form part of this
Agreement (the “Quality Agreement”).  In the event of any conflict between this
Agreement and the Quality Agreement, the prevailing document shall be determined
as follows:

 

2.6.1

for any conflicts related to quality assurance matters or the regulatory
obligations of the parties, or any Specifications, the Quality Agreement shall
prevail; and

 

 

2.6.2

for all other conflicts, this Agreement shall prevail.

 

2.7

Prior to delivery of the Final Combination Product to the Customer, Owen Mumford
will perform design control tests (including such tests as agreed in writing
between the parties) to verify that the Final Combination Product complies with
the Specifications. Owen Mumford will supply a Certificate of Conformity with
each batch of Final Combination Product.  Owen Mumford shall send, or cause to
be sent, as applicable, such certificates to the Customer prior to the shipment
of the Final Combination Product. Owen Mumford shall provide the Customer, upon
the Customer’s written request, with copies of executed batch records, quality
reports of control and test materials, deviation reports, investigation reports,
and performance testing results or other documentation or materials as
reasonably requested by the Customer.

 

2.8

Owen Mumford warrants that the Final Combination Product will be manufactured in
accordance with GMP, applicable laws and regulations and the Quality Agreement
and will comply with the Specifications on delivery. Owen Mumford shall promptly
inform the Customer in writing of any proposed process changes, change to any of
the agreed upon Specifications, quality standards or any

-6 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

applicable laws and regulations and shall obtain the Customer’s prior agreement
in writing before making any such change.

 

2.9

The Customer shall inform Owen Mumford in writing at as early as stage as
possible of any proposed changes to any of the Customer Materials (including
without limitation any change to their specifications, design or composition) or
and change of applicable laws and regulations relating to the Customer
Materials, and the parties shall thereafter discuss in good faith how best to
accommodate such change (including without limitation by varying this Agreement
or any relevant Specifications).

 

2.10

Owen Mumford agrees to comply with any reasonable instructions provided by the
Customer (to the extent they are consistent with the Quality Agreement) in
relation to the incorporation of any Customer Materials into the Final
Combination Product and in relation to the Primary and Secondary Packaging and
inclusion or affixation of any labelling, leaflets and/or trademarks in or to
the Final Combination Product as specified in Part 2 of Schedule 1.

 

2.11

Owen Mumford shall store the Customer Materials, any raw materials components or
ingredients used in the production of the Final Combination Product and the
Devices in accordance with the Specifications and all applicable laws and
regulations for no additional charge and shall supply details of such storage to
the Customer upon written request. For a period of up to [*] following the date
of issue of the Certificate of Conformity pursuant to clause 2.7, Owen Mumford
will store the Final Combination Product in accordance with the Specifications
and all applicable laws and regulations until they are shipped to the Customer
or a third party identified by the Customer.  Owen Mumford shall have no
obligation to store Final Combination Product beyond such [*] period and may
thereafter at its option ship, store, or engage a third party to store such
Final Combination Product at the Customer’s risk and cost.

 

2.12

Owen Mumford may sub-contract its obligations under this Agreement to suppliers
on the list of approved suppliers relating to the supply of the Final
Combination Product under this Agreement maintained by Owen Mumford, as amended
by Owen Mumford from time to time (the “List”), provided that:

 

 

2.12.1

Owen Mumford shall perform final assembly of the Device itself and shall not
sub-contract final assembly other than to Authorised Sub-contractors in the
limited circumstances described in clause 4.3;

 

2.12.2

Owen Mumford shall provide the List to Customer within two (2) weeks following
the Effective Date and shall notify Customer of any new approved suppliers added
to the List within two (2) weeks of their addition;  and

 

2.12.3

Owen Mumford shall oblige each subcontractor to comply with the relevant
provisions of this Agreement and remains liable to the Customer for the
performance of its obligations under this Agreement, whether or not
sub-contracted.

 

3

Obligations of the Customer and Owen Mumford

 

3.1

The Customer will co-operate with Owen Mumford as may reasonably be requested by
Owen Mumford relating to the manufacture of the Devices and the assembly and
supply of Final Combination Product and will respond in a timely manner to all
reasonable requests for information from Owen Mumford.

 

-7 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

3.2

Owen Mumford will, following the receipt of a forecast from the Customer as set
out in clause 4, or as otherwise needed at a later date, provide the Customer
with a written order for Customer Materials.  

 

3.3

The Customer will supply, or procure the supply to Owen Mumford of all Customer
Materials as may be reasonably required by Owen Mumford together with material
safety data sheets and any other information reasonably necessary to ensure safe
storage and handling of them by Owen Mumford. The Customer shall, or Customer’s
designated representative shall, deliver the Customer Materials to Owen Mumford
Delivered At Place (INCOTERMS 2010) at Chipping Norton, UK.  Owen Mumford agrees
to only use the Customer Materials as required for the manufacture of the
Devices and the assembly and supply of the Final Combination Product to the
Customer in accordance with the terms of this Agreement and agrees not to:

 

 

3.3.1

use the Customer Materials for any commercial purpose except for the manufacture
of the Devices and the assembly and supply of the Final Combination Product; or

 

 

3.3.2

not to distribute any of the Customer Materials to any third party other than an
Affiliate or sub-contractor of Owen Mumford as necessary for the performance of
this Agreement.

 

3.4

The Customer shall provide Customer Materials to Owen Mumford as are necessary
for the manufacture of the Devices and the assembly of the Final Combination
Product in accordance with this Agreement.  Owen Mumford understands and
acknowledges that the Customer Materials: may have hazardous properties and must
be handled and used with due care in accordance with the instructions provided
by the Customer, taking into account the potentially hazardous nature of the
Customer Materials and any procedures notified to Owen Mumford by the Customer
(which may be changed by the Customer from time to time following reasonable
notice to Owen Mumford) and in accordance with all applicable laws and safety
regulations.

 

3.5

All Customer Materials are stored at Customer’s risk, and the Customer is
responsible for insuring against all loss or damage to the Customer Materials
while in Owen Mumford’s possession.  If Customer Materials are damaged in
storage, Owen Mumford shall inform the Customer of such damage as soon as
reasonably possible and in no event later than forty-eight (48) hours from the
time such damage is discovered by Owen Mumford. Following such notification the
parties will discuss the replacement of the damaged Customer Materials and any
delays to delivery of the Final Combination Product as set out in clause 4.3.

 

3.6

Owen Mumford will, on termination or expiry of this Agreement, provide notice to
the Customer of any Customer Materials remaining in its possession or under its
control. Customer may instruct Owen Mumford whether to return such Customer
Material to the Customer or to destroy it, at the Customer’s cost, except if the
Agreement is terminated for Owen Mumford’s breach then it shall be at Owen
Mumford’s cost.  If the Customer does not provide instructions to Owen Mumford
within thirty (30) days of receipt of written notice from Owen Mumford
requesting instructions, Owen Mumford may dispose of the excess Customer
Materials without any further liability or obligation to the Customer.

 

4

Forecasting and Purchase Orders

 

4.1

No later than sixty (60) days from the Effective Date, and thereafter not less
than sixty (60) days before the commencement of each calendar quarter, the

-8 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

Customer shall provide Owen Mumford with a written non-binding forecast for the
subsequent [*] specifying the Customer’s anticipated requirement for the Final
Combination Product. The first [*] of any such forecast shall represent the
binding quantities of the Final Combination Product which the Customer will
purchase.

 

4.2

The Customer shall supply a Purchase Order to Owen Mumford containing the
following information (a) number of units of Final Combination Product required;
(b) requested delivery date (such date to be not less than [*] from date of
Purchase Order); and (c) any carriage instructions or requirements. Owen Mumford
reserves the right to refuse to accept any Purchase Order which is not in
compliance with this clause. Owen Mumford shall acknowledge receipt and
acceptance of a Purchase Order to the Customer together with information on the
anticipated delivery date for Final Combination Product. Once a Purchase Order,
which is compliant with the requirements of this clause 4.2, is received by Owen
Mumford in accordance with the binding forecast provided by the Customer as set
out in clause 4.1, Owen Mumford shall be obliged to accept such Purchase Order
to manufacture and supply the Final Combination Product to the Customer. Subject
to the provisions of this clause 4.2, Owen Mumford agrees to supply Final
Combination Product within the requested delivery dates set out in any Purchase
Order (provided that Owen Mumford shall not be in breach of this obligation if
it supplies the Final Combination Product within [*] before or after the
applicable delivery date). If the aggregate Purchase Orders issued by Customer
in any [*] period exceed the binding forecast for such period, Owen Mumford
shall make good faith efforts to fulfil such Purchase Orders or the portion
thereof it may reasonably supply. Owen Mumford shall not be obliged to accept
any conditional Purchase Orders.

 

4.3

If Owen Mumford anticipates that it will not be able to manufacture and/or
supply the total ordered quantities of the Final Combination Product in
accordance with the [*] forecasts provided by the Customer in accordance with
clause 4.1 and/or the Purchase Orders placed by the Customer, it shall
immediately notify the Customer in writing as soon as it becomes aware of such
likely inability to deliver or delay. Owen Mumford shall provide the Customer
with details of the problem including an estimate of the likely delivery date
and shall use its best endeavours to minimise the delay. Owen Mumford will
prepare and implement a contingency plan which will include a proposal setting
out how it intends to minimise the delay. If Owen Mumford is unable to
manufacture and/or supply Final Combination Product to the Customer for a
continuous period of more than [*], the parties shall cooperate to enable
manufacture of the Devices and/or assembly and supply of Final Combination
Product by an Authorised Sub-contractor approved by the Customer. If required by
the Customer, Owen Mumford will supply to such Authorised Sub-contractor any
necessary documentation required to manufacture and supply Final Combination
Product. The Authorised Sub-contractor shall only be used by the Customer during
the period in which Owen Mumford is unable to continue to manufacture the Device
and/or assemble and supply Final Combination Product.  Owen Mumford shall, to
the extent practicable, at the request of the Customer, source from Authorised
Sub-contractors, the quantities of Final Combination Product required to satisfy
the Purchase Orders placed by the Customer. If Owen Mumford is unable to
manufacture and/or supply the Final Combination Product and/or is unable to
source the required volume of Final Combination Product from Authorised
Sub-contractors for a continuous period of more than [*], the Customer may
terminate this agreement in accordance with clause 15.2.

 

4.4

There shall be no minimum purchase requirement from the Effective Date until the
[*] anniversary of the first marketing authorisation granted for the Final

-9 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

Combination Product in the United States or the European Union.  Beginning in
the [*] period following the [*] anniversary of such first marketing
authorisation and thereafter during each period [*] following the anniversary of
such date, the Customer must purchase not less than the Minimum Order Quantity
of the Final Combination Product in order to maintain exclusive rights to the
Device in the Field.  The Minimum Order Quantity shall be reduced by agreement
of the parties to take account of any unanticipated circumstances which arise
that may impact the Customer’s ability to purchase the Minimum Order Quantity
including any delay in or failure by Owen Mumford to deliver the Final
Combination Product, any Force Majeure Event (as defined in clause 16) and
failure to timely receive regulatory approval in any country in the Territory,
any safety concerns or any restrictions on labelling or any restrictions imposed
on the sale of the Final Combination Product by regulatory authorities.  

 

4.5

If in any relevant [*] period as defined in clause 4.4 the Customer does not
purchase quantities of Final Combination Product equal to the Minimum Order
Quantity, then the Customer may, at its sole option, elect to pay to Owen
Mumford an amount (the “Order Shortfall Payment”) calculated as follows:

 

[*]

 

4.6

If:

 

 

4.6.1

the Customer has not purchased the Minimum Order Quantity of Final Combination
Product in any applicable [*] period as defined in clause 4.5and has not made an
Order Shortfall Payment to Owen Mumford in accordance with clause 4.5; or

 

 

4.6.2

no marketing authorisation has been granted in relation to the Final Combination
Product in either the U.S. or Europe by the [*] anniversary of the Effective
Date,

 

each occurrence of the term “Field” herein (other than in clauses 1.1and 11.1)
shall be substituted by the term “Limited Field” each as defined in clause 1.1.
Following such substitution, the exclusivity obligations in clause 2.2 and the
license grant in clause 11.5 shall be restricted to the Limited Field.  

 

4.7

The Final Combination Product will be delivered Ex Works (INCOTERMS 2010) Owen
Mumford Limited, Chipping Norton, Oxfordshire, UK provided that Owen Mumford
will, if requested to do so by the Customer, arrange for carriage of the Final
Combination Product to the Customer’s nominated address at the Customer’s
expense. Any carriage arranged by Owen Mumford will be at the risk of the
Customer. Risk in the shipment will pass to the Customer upon delivery to the
carrier at Owen Mumford’s premises in Chipping Norton, UK. The Customer shall
acknowledge receipt of delivery of each shipment of Final Combination Product as
soon as reasonably possible following delivery to the Customer’s premises.  

 

5

Inspection of Final Combination Product

 

5.1

Following receipt of a shipment of the Final Combination Product from Owen
Mumford, the Customer or its designated agent shall, within [*], carry out an
inspection (as defined below) of such shipment to ensure that the Final
Combination Product does not have apparent defects and is accompanied by an
associated Certificate of Conformity.  If such Final Combination Product shows
apparent defects and/or does not meet the Specifications the Customer shall
promptly notify Owen Mumford in writing that it rejects the shipment setting out

-10 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

reasonable details of the defect. Subject to the provisions of clause 5.3, if
the Customer does not notify Owen Mumford of rejection of such shipment within
such [*] period, such shipment of the Final Combination Product shall be deemed
to have been accepted by the Customer and not to have apparent defects.

 

5.2

For the purposes of this Agreement, “inspection” shall mean:

 

 

5.2.1

comparing the applicable Purchase Order against the documentation accompanying
the shipment to verify that the delivery date, identity, quantity and exterior
shipment labelling comply with the Purchase Order;

 

 

5.2.2

verifying that the Certificate of Conformity and Certificate of Analysis for the
shipment states that the Final Combination Product conforms in all material
respects to the applicable Specifications; and

 

 

5.2.3

visually inspecting the exterior of the shipment of the Final Combination
Product to verify that the shipment appears to be in good condition.

 

5.3

Notwithstanding the foregoing, Owen Mumford shall remain liable to the Customer,
to the extent provided in clauses 5.4 or 5.5 as appropriate, for any latent
defect in the Final Combination Product that subsequently is discovered which
renders the relevant Final Combination Product unusable or unsaleable, if such
defect could not reasonably have been discovered by inspection, is due to the
failure of the Final Combination Product to meet the Specification at the time
of delivery and/or is because the Final Combination Product has a latent defect
and provided that the Customer informs Owen Mumford by notice in writing of such
defect and rejection of the relevant shipment not later than [*] from the date
of the Customer’s or its Affiliates’ knowledge of such latent defect. For the
purposes of this clause 5.3, a latent defect shall be any failure to meet the
Specification that exists at the time of delivery and only manifests itself at a
later date.

 

5.4

Within [*] of receipt by Owen Mumford of a notice of rejection from the Customer
in accordance with clause 5.1 or clause 5.3, Owen Mumford shall indicate in
writing to the Customer whether Owen Mumford is issuing a return
authorisation.  In the event that a return authorisation is issued by Owen
Mumford the Customer shall either destroy or return to Owen Mumford as stated in
the return authorisation the quantities of the Final Combination Product in
question and Owen Mumford shall replace such quantities within [*], in either
case at Owen Mumford’s expense (provided that [*] any Customer Materials
necessary for the replacement of such Final Combination Product at its own
expense unless [*]).  [*] replacement of Customer Materials shall [*].  If the
payment in respect of such quantities of the Final Combination Product is
outstanding, it shall be postponed until such replacement quantities of the
Final Combination Product are received and accepted by the Customer in
accordance with this clause 5.

 

5.5

After receipt of any rejection notice from the Customer pursuant to clause 5.1
or clause 5.3, if Owen Mumford does not issue a return authorisation under
clause 5.4, and if the relevant defect relates to non-compliance with the
Specification, Owen Mumford shall evaluate a retained sample of any batch of the
Final Combination Product rejected by the Customer for non-conformity with the
Specifications within [*] of receipt of such notice, and shall present its
findings with respect to the Final Combination Product to the Customer.  If such
tests confirm non-conformity with the Specification, Owen Mumford shall promptly
supply to the Customer (at Owen Mumford’s cost and expense) a conforming batch
in the same quantity as the rejected batch and shall reimburse the Customer for
any out of pocket costs or expenses reasonably incurred by the

-11 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

Customer including shipping charges or the cost of destruction (as Owen Mumford
elects) in relation to such non-conforming batch (provided that [*] any Customer
Materials necessary for the replacement of such Final Combination Product at its
own expense unless [*]).  [*]r replacement of Customer Materials shall [*].  If
the parties cannot agree on whether the batch of the Final Combination Product
in question conforms to the Specifications, an independent qualified laboratory
reasonably acceptable to both parties, and at a cost to be borne by the party
found to be in error, shall evaluate both the Customer’s and Owen Mumford’s
samples of the Final Combination Product from the batch in question, and the
definitive results of such laboratory shall be final and binding on the
parties.  If the batch of the Final Combination Product in question is
determined to be non-conforming, such non-conforming batch shall be held for
Owen Mumford’s disposition, or shall be returned to Owen Mumford, as directed by
Owen Mumford no later than [*] following such determination, in each case at
Owen Mumford’s expense.  Owen Mumford shall replace each non-conforming batch of
the Final Combination Product, or the non-conforming portion thereof, with
conforming Final Combination Product within [*] (provided that [*] any Customer
Materials necessary for the replacement of such Final Combination Product at its
own expense unless [*]).  [*] replacement of Customer Materials shall [*].  If
the batch of the Final Combination Product in question is determined to be
conforming and provided that the Certificate of Conformity did not indicate it
to be non-conforming, such batch of the Final Combination Product shall be
returned to the Customer at the Customer’s cost and expense.

 

5.6

If Owen Mumford’s performance of its obligations under this Agreement is
prevented or delayed by any breach of clauses 2, 4 or 5 as a result of any
action or omission by the Customer, Owen Mumford will not be liable to the
extent that any costs, charges or losses sustained or incurred by the Customer
arose from such breach or act or omission of the Customer.  For the avoidance of
doubt, any defect in the Final Combination Product (whether pursuant to clause
5.1 or 5.3) caused solely by the Customer Materials shall be the responsibility
of the Customer and shall not be subject to clauses 5.4 or 5.5.  Where a defect
in the Final Combination Product is caused solely by the Customer Materials, if
requested by the Customer, Owen Mumford shall provide reasonable assistance to
the Customer to promptly replace the defective Final Combination Product at the
Customer’s expense.

 

5.7

Provided that Owen Mumford complies with its obligations under clause 5.4 and
5.5 in relation to any rejected or non-conforming Final Combination Product [*]
in relation to any defect or non-conformity in such Final Combination Product.

 

6

Stock

6.1

Owen Mumford shall maintain (or have immediately available by way of
consignment) stocks of all raw materials, components and ingredients used in the
production of the Final Combination Product (except Customer Materials) as
required to ensure that it will be able to produce the Final Combination Product
as required by the Customer in accordance with the [*] forecasts provided by the
Customer in accordance with clause 4.1 and Owen Mumford shall ensure that it has
placed sufficient orders for Customer Materials as required in accordance with
clause 3.2.

6.2

Owen Mumford will not keep or supply any Final Combination Product that has less
than [*] of its shelf life remaining as at the time of delivery to the
Customer.  Any out of date or damaged Final Combination Product will be
immediately destroyed by Owen Mumford at its cost in accordance with applicable
law and such destruction shall be fully documented.

-12 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

 

7

Amendments to the Specifications

 

7.1

Amendments to the Device, the Final Combination Product and/or Specifications
may only be made with the written agreement of both parties in accordance with
this clause 7.  Where such changes are required to comply with any legal and/or
regulatory requirements, the parties shall use reasonable endeavours to agree
any changes to the Device, Final Combination Product and/or Specifications (and
any cost impact resulting from such changes). Where agreement cannot be reached
as to the changes required and terms applicable to such changes the Customer
shall be entitled to terminate this Agreement, subject to payment of the Price
for all Final Combination Product supplied or ordered prior to the date of
termination.

 

7.2

Owen Mumford must notify the Customer at least [*] prior to making any change to
the Specifications and/or validated processes or procedures for moulding,
assembly, packaging, quality control and quality assurance operations related to
the manufacturing of Final Combination Product or any services provided under
this Agreement including reasonable details of the changes it is proposing to
make.  

 

7.3

The Customer understands and accepts that changes to the Device, the Final
Combination Product and/or Specifications may impact on regulatory or other
approvals obtained by Owen Mumford and that as a result additional development
work may be required to be undertaken. Any such development work shall be
undertaken on terms (including as to cost) to be agreed between the parties
provided that any changes required as a result of changes proposed by Owen
Mumford shall be at Owen Mumford’s cost.

 

7.4

Any changes may also impact on the Price payable by the Customer and any changes
to the Device, Final Combination Product and/or Specifications are subject to
agreement as to the Price applicable to such modified Final Combination Product.

 

7.5

If any changes or amendments are agreed to by the parties in accordance with
this clause 7, the parties will promptly confirm in writing any update to
Schedules 1 and/or 2 and the relevant party will implement any changes or
amendments accordingly.

 

8

Regulatory Approvals and Compliance

 

8.1

Owen Mumford will be responsible, at its cost, for preparing and maintaining all
approvals and registrations of manufacturing facilities and quality assurance
systems required for the manufacture of Devices and the assembly and supply of
the Final Combination Product under this Agreement.

 

8.2

The Customer shall use reasonable efforts to advise Owen Mumford in a timely
fashion of any regulatory submissions relating to the Final Combination Product
which may result in inquiries from the regulatory authorities requiring
responses from Owen Mumford. Owen Mumford shall use reasonable efforts to
promptly respond to any such inquiries and provide all information requested by
such regulatory authorities, which shall be within: (i) [*] from Owen Mumford's
receipt of the inquiry; or (ii) the timeframe set forth by such regulatory
authorities, whichever is shorter.

 

-13 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

8.3

Owen Mumford will be responsible, at its sole cost, for preparing and
maintaining the technical file for the Device and the Final Combination Product
and will provide the technical file to the Customer for the purpose of assisting
the Customer to obtain regulatory approvals for the Device and the Final
Combination Product in accordance with clause 8.4. Owen Mumford shall return any
original documents held by it on the Customer’s behalf to the Customer promptly
following expiry or termination of this Agreement and shall destroy any copies,
unless the Customer requests Owen Mumford provide them to the Customer at the
Customer’s sole cost.

 

8.4

The Customer will be responsible for obtaining and maintaining all necessary
regulatory approvals and registrations for the use of the Final Combination
Product in conjunction only with the Drug in its own name in each country in
which it intends to use or sell the Final Combination Product.

 

8.5

Owen Mumford will maintain, in sufficient detail and in accordance with GMP,
comprehensive, accurate and up to date validation documents and production
records relating to the manufacture of the Device and the assembly of the Final
Combination Product and will provide copies of these to the Customer on request.

 

8.6

Owen Mumford will ensure that it, and any sub-contractor conducting any of the
manufacture and supply, has in place (and maintains during the period that it is
conducting any manufacture or supply) all approvals, permits and licences
relating to the premises where any of the manufacture and/or supply is taking
place as are required for the manufacture of the Device and/or the assembly of
the Final Combination Product intended for use in the administration of human
medicinal products.

 

9

Audit

 

9.1

Owen Mumford will permit the Customer, its representatives and any regulatory
authorities to:

 

 

9.1.1

inspect Owen Mumford’s work under this Agreement and its manufacturing
facilities;

 

 

9.1.2

inspect all relevant records of Owen Mumford relating to the manufacture of the
Devices and/or the assembly and supply of the Final Combination Product; and

 

 

9.1.3

access relevant representatives of Owen Mumford.

 

Such inspections by the Customer or its representatives will take place during
regular business hours and require reasonable prior notice to Owen Mumford and
may take place no more than [*] during the Term with the exception of audits or
inspections required by regulatory authorities, in response to or following a
recall as set out in clause 14 or a prior audit at which issues were
identified.  The Customer will provide Owen Mumford with the identity of its
representatives in advance and Owen Mumford will accept such representatives
unless it has objectively valid reasons for not doing so.

 

9.2

Owen Mumford shall promptly notify, consult and keep the Customer informed of
any inquiries, inspections and/or legal actions by any regulatory authority
relating to the manufacture of the Devices or assembly of Final Combination
Product at any of Owen Mumford's facilities. The Customer shall have the right
to participate in any inspection by any regulatory authority involving Final
Combination Product,

-14 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

but only in consultation with and after consent of Owen Mumford, such consent
not to be unreasonably withheld, delayed or conditioned.

9.3

Owen Mumford shall provide the Customer, promptly after receipt by Owen Mumford,
with a summary of any inspection reports and/or legal actions with or by any
regulatory authority relating to the manufacture of Devices or assembly of Final
Combination Product.

 

9.4

In connection with any pre-approval inspections by any regulatory authority of
Owen Mumford’s facilities where manufacturing, storage or testing of Devices or
Final Combination Product or their components takes place, Owen Mumford shall
permit appropriate Customer personnel to be present during such inspection and
shall provide the Customer with timely communication and updates on pre-approval
inspections by any regulatory authority for the Devices or Final Combination
Product. In addition, Owen Mumford shall keep the Customer timely and reasonably
informed on an on-going basis as to any proposed responses regarding corrective
or remedial actions to be taken as a result of any such pre-approval inspection,
including, without limitation, any corrective or remedial action relating to
Owen Mumford's facilities or any third party's facilities used for the benefit
of Owen Mumford.

 

9.5

The rights of access and information granted under this clause 9 will be without
prejudice to the obligations of confidentiality contained elsewhere in this
Agreement.

 

10

Payment

 

10.1

In consideration of the supply of the Final Combination Product in accordance
with this Agreement by Owen Mumford, Owen Mumford will be entitled to invoice
the Customer for the Price.  Owen Mumford shall be entitled to invoice the Price
following delivery of the Final Combination Product to the Customer in
accordance with clause 4.

 

10.2

Owen Mumford will send all invoices to the invoice address as specified in
Schedule 2.  Invoices shall be due for payment within [*] of date of receipt of
the invoice. Invoices shall be paid by telegraphic transfer unless otherwise
agreed by Owen Mumford in writing.

 

10.3

The Customer will pay each invoice in U.S Dollars to the bank account specified
in Schedule 2 or as is otherwise nominated in writing on the relevant invoice or
by Owen Mumford from time to time.

 

10.4

If at any time the Exchange Rate deviates from the Exchange Rate as at the
Exchange Rate Comparison Date by [*] or more in either direction for a
continuous period of [*] or more, then either party may so notify the other,
specifying:

 

 

10.4.1

the Exchange Rate as at the Exchange Rate Comparison Date;

 

 

10.4.2

the average Exchange Rate during the relevant [*] period; and

 

 

10.4.3

the difference between the two Exchange Rates (expressed as a percentage) (the
“Exchange Rate Percentage Difference”); and

 

 

10.4.4

the “Price Adjustment”, being the Price multiplied by the Exchange Rate
Percentage Difference.

 

-15 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

10.5

If the Exchange Rate Percentage Difference is greater than [*] in either
direction, then the parties shall amend the Price by adding or subtracting the
Price Adjustment as applicable, with such amendment to take effect on the last
day of the calendar month following the month in which one party notified the
other of the deviation in the Exchange Rate under clause 10.4.

 

10.6

All sums due under this Agreement are exclusive of any applicable value added or
other sales tax, which the Customer will pay in addition at the rate prescribed
by law. The invoice shall be paid in full and the Customer has no right to
withhold taxes, currency conversion charges or any other sums for payment due
under invoice.

 

10.7

If any payment to Owen Mumford under this Agreement is overdue, Owen Mumford may
charge the Customer interest on any overdue sum at the rate of [*] above the
base rate quoted by Barclays Bank Plc from time to time provided that if the
payment of any amount is disputed by the Customer, the Customer shall only be
obliged to pay the amount of the invoice not in dispute until the dispute has
been resolved. In the case of dispute, interest shall only be payable on the
amount which is not disputed unless the Customer is found to be liable for the
amount due in which case the Customer shall reimburse Owen Mumford for the
amount outstanding plus interest at the rate set out above from the date the
original invoice was due to the actual date of payment.

 

10.8

If any Customer payment under this Agreement is at least [*] overdue, Owen
Mumford may, at its sole discretion, suspend work on manufacture and/or supply
of Final Combination Product in accordance with any other Purchase Order until
the payment has been made in full.

 

11

Intellectual Property

 

11.1

Nothing in this Agreement will affect the ownership of any Intellectual Property
Rights of either of the parties existing prior to this Agreement nor operate to
grant to the other party any licence or right under any Intellectual Property
Rights except as expressly set out in this Agreement.  Owen Mumford acknowledges
that the Customer owns the trade dress in the Final Combination Product and any
Intellectual Property Rights relating thereto and undertakes not to use the same
colour combinations used for the Final Combination Product for the manufacture
or supply of auto-injector products for other customers in the Field at any time
during the Term.

 

11.2

With respect to any inventions that occur during the conduct of activities
described in this Agreement, any Intellectual Property Rights [*] and/or [*]
shall be owned by [*]. Any Intellectual Property Rights [*] and/or [*] shall be
owned by [*].

 

11.3

Subject to clauses 11.1 and 11.2, any Intellectual Property Rights associated
with new inventions related solely to the Drug or to any improvements or
modifications made to the Final Combination Product Primary Packaging, Secondary
Packaging, labelling, leaflets, trademarks or any Customer Materials during the
Term shall be owned by the Customer. The Customer grants to Owen Mumford a
non-exclusive, royalty-free, non-sub-licensable (other than to Owen Mumford’s
sub-contractors for the performance of this Agreement) licence under its
Intellectual Property Rights to use the Customer Materials and Confidential
Information supplied to Owen Mumford by the Customer and any improvements or
modifications made to the Final Combination Product solely for the purpose of
the manufacture of the Devices and the assembly and supply of the Final
Combination Product for the Customer during the Term.  Such licence includes a

-16 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

licence to any Customer Primary Packaging, Secondary Packaging, labelling,
leaflets, trademarks or trade names where such licence is required for the
manufacture of the Devices and the assembly and supply of the Final Combination
Product.

 

11.4

To the extent necessary to enable the Customer to import, keep, offer for sale,
sell and use the Final Combination Product supplied to it by Owen Mumford in the
Field, Owen Mumford grants to the Customer an exclusive, irrevocable,
sub-licensable, world-wide licence in the Field under Owen Mumford’s
Intellectual Property Rights within or covering the Device and the Final
Combination Product.  Notwithstanding the foregoing, in accordance with clause
4.6, Owen Mumford’s intellectual property grant shall be narrowed to the Limited
Field if Customer fails to purchase the Minimum Order Quantity and declines to
pay the Order Shortfall Payment in any twelve (12) month period.

 

11.5

For any new inventions relating to both [*] and [*], resultant Intellectual
Property Rights shall be jointly owned by Owen Mumford and Customer, each having
an equal undivided interest therein (“Joint IPR”). Neither party may exploit,
license, transfer or apply for registration of such Joint IPR except as
expressly set out in this Agreement (or any other agreement between the
parties).

 

11.6

Each party grants to the other party a non-exclusive, royalty-free,
sub-licensable licence under its interest in the Joint IPR to the extent
necessary to complete all activities contemplated under this Agreement (which
shall include, in the case of Owen Mumford’s activities, the right to
sub-licence to its sub-contractors).

 

11.7

In the event of any Joint IPR arising under this Agreement the parties enter
into a separate agreement governing their respective rights to exploit, license,
transfer, and/or apply for registration of such Joint IPR.

 

11.8

Each party will notify the other party in writing if it becomes aware of any
patent or patent application belonging to any third party that might adversely
impact the manufacture of the Devices or the assembly or supply of Final
Combination Product to the Customer or the sale or use of such Final Combination
Product by the Customer.

 

11.9

Following receipt of written notification in accordance with clause 11.8, the
parties will discuss in good faith the consequences of any third party patent or
patent application identified and the parties will, at the option and cost of
the Customer either:

 

 

11.9.1

propose a re-design of the Device and/or the Final Combination Product to avoid
the infringement or potential infringement;

 

 

11.9.2

enter into negotiations with such third party to obtain a licence to allow Owen
Mumford to manufacture the Device and/or assemble and supply the Final
Combination Product to the Customer and the Customer to use and sell the Final
Combination Product in the Field; or

 

Until such redesign is complete or infringement avoided the Customer shall be
relieved of its obligation to purchase the Minimum Order Quantity (which shall
be reduced on a pro rata basis) and Owen Mumford shall be relieved of its
obligation to supply the Final Combination Product.

 

11.10

Owen Mumford does not make any representation and gives no warranty that the use
of the Final Combination Product by the Customer or any other person will

-17 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

not infringe the Intellectual Property Rights or other rights of any third party
and Owen Mumford will have no liability to the Customer for any such claim.  

 

11.11

The Customer does not make any representation and gives no warranty that the
manufacture of the Device and/or the assembly and supply of the Final
Combination Product by Owen Mumford or any other person will not infringe the
Intellectual Property Rights or other rights of any third party and the Customer
will have no liability to Owen Mumford for any such claim.

 

11.12

Customer warrants at the Effective Date that, as far as it is aware, there are
no third party Intellectual Property Rights or restrictions affecting the use or
supply of the Customer Materials or Customer Confidential Information.

 

11.13

Owen Mumford warrants at the Effective Date that, as far as it is aware, there
are no third party Intellectual Property Rights or restrictions affecting the
manufacture of the Devices, the assembly of the Final Combination Product or the
use or supply of the Final Combination Product by or to the Customer.

 

12

Confidentiality

 

12.1

During the Term and for a period of [*] after the expiry or termination of this
Agreement each party will keep the Confidential Information of the other party
in strict confidence, not disclose it to any third party and not use it for any
purpose other than fulfilling its obligations under this Agreement.  

 

12.2

Notwithstanding clause 12.1 the receiving party may disclose the Confidential
Information of the disclosing party to those of its employees or sub-contractors
who reasonably need to know it in order to fulfil the receiving party’s
obligations under this Agreement, provided that they are informed of the
confidential nature of the Confidential Information and are bound by obligations
of confidence no less onerous than those set out in this Agreement in respect of
it.  The receiving party will be liable to the disclosing party for any
unauthorised disclosure or use of its Confidential Information by any of its
employees or sub-contractors.

 

12.3

The obligations of confidence and non-use set out in clause 12.1 will not apply
to any Confidential Information that the receiving party can show by reference
to written records:

 

 

12.3.1

was, at the time of disclosure to the receiving party, published, known publicly
or otherwise in the public domain;

 

 

12.3.2

is, after disclosure to the receiving party, published or becomes known publicly
or otherwise becomes part of the public domain, through no fault of the
receiving party, any of its Affiliates, any of its sub-contractors or any of
their respective employees;

 

 

12.3.3

was, prior to the time of disclosure to the receiving party, known to and at the
free disposal of the receiving party;

 

 

12.3.4

is, at any time, disclosed to the receiving party by a third party in
circumstances in which the  receiving party has no reason to believe that there
has been a breach of an obligation of confidence owed to the disclosing party;

 

 

12.3.5

is independently developed by or on behalf of the receiving party without use of
or reliance on the Confidential Information received from the disclosing party.

-18 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

 

12.4

Neither party will be in breach of its obligations under clause 12.1 to the
extent that it is required to disclose any Confidential Information of the other
under any law or by or to a court or other public, regulatory or financial
authority that has jurisdiction over it, provided that the receiving party gives
the disclosing party written notice prior to disclosing any of the disclosing
party’s Confidential Information and that the disclosure is made only to the
extent required and for the purpose of complying with the requirement and that
the receiving party takes all reasonable measures to ensure, as far as it is
possible to do so, the continued confidentiality of any Confidential Information
so disclosed.

 

12.5

Except as required to comply with applicable laws and regulations relating to
the sale of the Final Combination Product (including, for the avoidance of
doubt, any requirement for the Customer to refer to Owen Mumford as the
manufacturer of the Final Combination Product), neither party will use the
other’s name or logo in any press release or product advertising, or for any
other promotional purpose, without first obtaining the other’s written consent.

 

12.6

On termination or expiry of this Agreement, each party will return to the other
party all of that party’s Confidential Information which is in its possession or
under its control (including all copies).  As an exception to this obligation,
each party may retain one copy of the other party’s Confidential Information in
paper form in its legal files solely for the purpose of ensuring compliance with
its obligations under this Agreement or as required to comply with any
applicable legal or regulatory requirement including GMP.

 

13

Liability and Insurance

 

13.1

Owen Mumford will indemnify the Customer, its Affiliates, its employees,
officers and representatives and keep them fully and effectively indemnified
against all losses, liabilities, damages and expenses (including reasonable
legal fees and costs) suffered or incurred in connection with any claims,
demands, actions or other proceedings brought against any of them by any third
party arising directly out of any breach by Owen Mumford of the warranty in
clause 2.8 - except to the extent that such losses, liabilities, damages or
expenses are attributable to any negligence, breach of contract or wilful
misconduct on the part of the Customer or its representatives or are
attributable to the use of any Drug or any directions or specification from the
Customer or to any modifications made at the request of the Customer in
writing.  

 

13.2

The Customer will indemnify Owen Mumford, its Affiliates, its employees and its
officers and keep them fully and effectively indemnified against all losses,
liabilities, damages and expenses (including reasonable legal fees and costs)
suffered or incurred in connection with any claims, demands, actions or other
proceedings brought against any of them by any third party arising directly out
of or in connection with the manufacture, sale or use of any Final Combination
Product (or any Drug contained within that Final Combination Product) or, where
used in accordance with the Customer’s written instructions, the use of any
Customer Materials (including any Customer trademarks or trade names), except to
the extent that such losses, liabilities, damages or expenses are attributable
to any negligence, breach of contract or wilful misconduct on the part of Owen
Mumford, its Affiliates, employees, officers or its representatives.

 

13.3

The party or person claiming the indemnity under clauses 13.1 and 13.2 shall:

 

 

13.3.1

promptly notify the indemnifying party in writing with details of the claim;

 

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[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

 

13.3.2

not make any admission in relation to the claim;

 

 

13.3.3

allow the indemnifying party to have the conduct of the defence or settlement of
the claim; and

 

 

13.3.4

give the indemnifying party all reasonable assistance (at the indemnifying
party’s expense) in dealing with the claim.

 

13.4

In the event the party claiming the indemnity under clauses 13.1 and 13.2 fails
to comply with clause 13.3 the amount that party may claim under the indemnity
shall be reduced to take into account any additional loss that may have resulted
in the claiming party’s non-compliance with clause 13.3.

 

13.5

Subject to clause 13.7 and except under the indemnities in clauses 13.1 and
13.2, the liability of either party to the other for any breach of this
Agreement, for any negligence or arising in any other way out of the subject
matter of this Agreement will not extend to any indirect damages or losses, or
any loss of profits, loss of revenue, loss of data, loss of contract or
opportunity, or cost of replacement or correction of Customer Materials whether
direct or indirect, even if the party bringing the claim has advised the other
of the possibility of those losses, or if they were within the other parties’
contemplation.

 

13.6

Subject to clause 13.7 and except under the indemnities in clauses 13.1 and
13.2, the aggregate liability of each party to the other for all and any
breaches of this Agreement, any negligence or arising any other way out of the
subject matter of this Agreement will not exceed in total [*] the amount of all
payments made to Owen Mumford by the Customer under this Agreement in the [*]
immediately preceding the date of any claim.  

 

13.7

Nothing in this Agreement limits or excludes either party’s liability for:

 

 

13.7.1

death or personal injury caused by its negligence;

 

 

13.7.2

any fraud by that party; or

 

 

13.7.3

any sort of liability that, by law, cannot be limited or excluded.

 

13.8

The express undertakings and warranties given by the parties in this Agreement
are in lieu of all other warranties, conditions, terms, undertakings and
obligations whether express or implied by statute, common law, custom, trade
usage, course of dealing or in any other way.  All of these are expressly
excluded from this Agreement to the full extent permitted by law.

 

13.9

During the Term and for a period of [*] years after the expiry or termination of
this Agreement, each party will maintain with a reputable insurance company
comprehensive third party liability insurance including, without limitation,
insurance of product liability with cover of at least [*] per claim and in
aggregate per year.  Each party will, at the request of the other, provide
documentary evidence confirming the maintenance of such cover.

 

13.10

Each party shall promptly notify the other party on becoming aware of any
incidence involving the Final Combination Product resulting directly or
indirectly in an incident or near incident contemplated by Article 10 of the
Medical Devices Directive (EC Directive 93/442/EEC) as amended from time to
time, or personal injury, death or damage to property or any side effect
associated with the Final Combination Product. The parties agree to cooperate in
relation to the investigation or any incident or side effect and shall make
available as required all

-20 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

statements, reports, tests and other relevant information so far as such is
reasonably necessary. Any supply of information or provision of assistance under
this clause 13.10 shall not constitute an assumption of liability with respect
to such incident or side effect. Any admission or declaration of liability in
relation to any incident or side effect shall only be made with the other
party’s prior written consent.

 

14

Adverse Events and Recalls

 

14.1

Owen Mumford shall be responsible for investigation (including the requirement
for the submission of reports to regulatory agencies) of any complaints
(including as relevant, any adverse events) relating to the Final Combination
Product unless it is attributable solely to the Drug, the combination or use of
the Drug within the Final Combination Product, any components, cartridges or
parts supplied or designed by the Customer, any directions or specification in
writing received from the Customer or to any modifications made at the written
request of the Customer. The Customer shall be responsible for investigation of
any other complaints. The Parties agree to cooperate with each other as far as
necessary to address any complaints including as relevant to provide information
required by regulatory authorities.

 

14.2

In the event that either party has reason to believe a Final Combination Product
should be recalled or withdrawn, it should immediately notify the other party in
writing. Such notification shall include the reasons why the Final Combination
Product should be recalled or withdrawn. The parties shall cooperate with each
other in relation to any recall of Final Combination Product at their own cost.

 

14.3

Any recalls or withdrawals shall be conducted by the Customer at its cost
provided that Owen Mumford shall reimburse the Customer for its direct and
reasonable costs of recall if the recall or withdrawal is caused solely by the
failure of the Final Combination Product to perform to the Specification, Owen
Mumford’s negligence or a breach by Owen Mumford of its obligations under this
Agreement; such reimbursement shall be subject to clause 13.6 above.

 

14.4

If a competent authority requires a recall of the Final Combination Product, the
parties shall cooperate in good faith to implement such recall provided always
that the Customer shall have the right to control all recalls, product
withdrawals and field corrections for the Final Combination Product. If the
recall was caused:

 

 

14.4.1

solely or predominantly by Owen Mumford’s failure to supply the Final
Combination Product in accordance with the Specification or the provisions of
this Agreement, the Customer shall be entitled to set its reasonable expenses
incurred in a recall against its future payments due to Owen Mumford hereunder
or, on request, to be reimbursed by Owen Mumford within [*] of the date of the
Customer’s written request; or

 

 

14.4.2

solely or predominantly by the Customer Materials, Owen Mumford shall be
entitled to invoice the Customer for its reasonable expenses incurred in a
recall.

 

14.5

Owen Mumford shall inform Customer of any adverse events reported to it
involving the Final Combination Product as soon as reasonably possible and in no
event later than two (2) Business Days from the time Owen Mumford becomes aware
of such adverse event to ensure that Customer may comply with its expedited
reporting obligations. Copies of the most current version of Owen Mumford’s
standard operating procedures for adverse events shall be supplied to the
Customer.

-21 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

 

15

Term and Termination

 

15.1

This Agreement will come into force on the Effective Date and will remain in
force for a period ending on the date falling ten (10) years from the date on
which the first shipment of Final Combination Product is accepted by Customer
unless terminated earlier by either party in accordance with any other provision
of this Agreement (the “Term”). No later than [*] before the end of the Term the
parties may agree in writing to continue the Agreement for an additional [*] or
such other period as the parties may agree.

 

15.2

Either party may (without limiting any other remedy it may have) at any time
terminate this Agreement with immediate effect by giving written notice to the
other if:

 

 

15.2.1

the other is in material breach of any provision of this Agreement and, if it is
capable of remedy, the breach has not been remedied within [*] after receipt of
written notice specifying the breach and requiring its remedy; or

 

 

15.2.2

the other party becomes insolvent, or if an order is made or a resolution is
passed for its winding up (except voluntarily for the purpose of solvent
amalgamation or reconstruction), or if an administrator, administrative receiver
or receiver is appointed over the whole or any part of the other party’s assets,
or if the other party makes any arrangement with its creditors or ceases to
carry on business or does or suffers any similar or analogous act existing under
the laws of any country.

 

 

15.3

Either party may terminate this Agreement at any time without cause by giving
not less than twelve (12) months’ written notice to the other party.

 

15.4

In the event of termination of this Agreement by the Customer in accordance with
clause 15.2 or Owen Mumford in accordance with clause 15.3:

 

 

15.4.1

Owen Mumford shall continue to manufacture the Devices and assemble and supply
the Final Combination Product to the Customer in accordance with the terms of
this Agreement and the Customer shall be permitted to continue to sell the Final
Combination Product until the Customer is able to identify, appoint, and qualify
through all necessary regulatory approvals a third party manufacturer to supply
product equivalent to the Devices and the Final Combination Product in place of
Owen Mumford; and

 

 

15.4.2

on such commercial terms as the parties may agree (and subject to the
negotiation and agreement of such commercial terms) Owen Mumford will provide to
the Customer such assistance, documentation and licences under Owen Mumford’s
relevant Intellectual Property Rights as may reasonably be required by the
Customer or the third party manufacturer to enable the third party manufacturer
to manufacture products equivalent to the Devices and the Final Combination
Product (any such documentation shall be the Confidential Information of Owen
Mumford and such provision will be subject to the Customer and such third party
manufacturer entering such binding obligations of confidence and non-use as Owen
Mumford may reasonably require in relation to such documentation and subject to
the Customer ceasing to manufacture or have manufactured such Final Combination
Products on the date on which the Term would have ended had the Agreement not
been terminated); and

 

-22 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

 

15.4.3

the Customer’s obligation to purchase the Minimum Order Quantity in accordance
with clause 4.4 shall not apply during any period during which Owen Mumford
continues to supply Final Combination Products to the Customer pursuant to this
clause 15.4.

 

15.5

In the event of termination of this Agreement by Owen Mumford in accordance with
clause 15.2 or by the Customer in accordance with clause 15.3, Owen Mumford
shall have no obligation to provide the Customer with any assistance,
documentation or license to allow for the transfer of the manufacture of the
Final Combination Product to any third party, but may at its option do so
subject to such commercial terms as the parties may agree.

 

15.6

On termination or expiry of this Agreement for any reason:

 

 

15.6.1

all invoices shall become immediately due and payable in accordance with the
payment terms set out in clause 10;

 

 

15.6.2

Owen Mumford shall continue to manufacture the Devices and to assemble and
supply Final Combination Product in accordance with any Purchase Orders accepted
by Owen Mumford prior to the date of termination or expiry. Owen Mumford shall
be entitled to render invoices for such Final Combination Product supplied as of
the date of termination or expiry;

 

 

15.6.3

all licences shall immediately cease as at date of termination or expiry save
where continuation of such licences is necessary for: (a) Owen Mumford to comply
with its obligations under clauses 15.4 or 15.6.2; or (b) for the Customer to
meet any third party orders for Final Combination Product existing as of the
date of termination or expiry (save that such right shall only apply for a
period of [*] from the date of termination or expiry);

 

 

15.6.4

any regulatory approvals relating to the Device or the Final Combination Product
held by Owen Mumford shall be immediately transferred to the Customer, at the
Customer’s sole cost. Owen Mumford shall provide the Customer with any
assistance necessary and execute any documents required to transfer the
regulatory approvals to the Customer;

 

 

15.6.5

the Confidential Information of the parties shall be returned to the other party
in accordance with clause 12.6.

 

15.7

Termination of this Agreement will not release any party from any obligation or
liability which has fallen due or arisen before the effective date of
termination of the Agreement.  

 

15.8

Clauses 1, 10, 11, 12, 13, 14, 15, and 17 will survive termination of this
Agreement for whatever reason.

 

16

Force Majeure

 

16.1

Neither party will be liable to the other for any delay or non-performance of
its obligations under this Agreement (other than a payment obligation) arising
from any cause beyond that party’s reasonable control, including but not limited
to, acts of God, fire, explosion, weather, disease, war, insurrection, civil
strife, riots, government action, power failure, earthquake or terrorism (“Force
Majeure Event”).  Upon being affected by a Force Majeure Event, a party will
give written

-23 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

notice of that Force Majeure Event to the other party as soon as practicable,
indicating the nature, effect and likely duration of that Force Majeure Event.

 

16.2

The performance of the affected party’s obligations, to the extent affected by
the Force Majeure Event, will be suspended during the period that the Force
Majeure Event persists, provided that if performance is not resumed within three
(3) months either party may, at any time prior to the resumption of the
obligations, terminate this Agreement with immediate effect by giving written
notice to the other party.  

 

17

General

 

17.1

Each party shall comply with all applicable laws in the course of performing its
obligations or exercising its rights pursuant to this Agreement. Each party
undertakes to comply with the provisions of any applicable law intended to
prevent corruption and/or bribery (collectively “Compliance Laws”) and to adopt
all appropriate measures to prevent violation of the Compliance Laws. Without
limiting the foregoing, either party agrees that it will not, in the conduct of
its performance under this Agreement, offer, pay, give or promise to pay or
give, directly or indirectly, any payment or gift of any money or thing of value
to: (i) any government official to influence any acts or decisions of such
official or to induce such official to use his influence with any government to
effect or influence the decision of such government in order to assist the party
in its performance of its obligations under this Agreement or to benefit either
of the parties; (ii) any political party or candidate for public office for such
purpose; or (iii) any person if such party knows or has reason to know that such
money or thing of value will be offered, promised, paid or given, directly or
indirectly, to any official, political party or candidate for such purpose.

 

17.2

Notices: Any notice to be given under this Agreement must be in writing, may be
delivered to the other party by any of the methods set out in the left hand
column below, and will be deemed to be received on the corresponding day set out
in the right hand column:

 

Method of service

 

Deemed day of receipt

By hand or courier

 

the day of delivery

By pre-paid first class post

 

the second Business Day after posting

By recorded delivery post

 

the next Business Day after posting

By fax (provided the sender’s fax machine confirms complete and error-free
transmission of that notice to the correct fax number)

the next Business Day after sending or, if sent before 16.00 (sender’s local
time) on the Business Day it was sent

 

 

The parties’ respective representatives for the receipt of notices are, until
changed by notice given in accordance with this clause, as follows:

For Owen Mumford:

For the Customer:

-24 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

Name: Gavin Jones

 

Address:  BrookHill

Woodstock

OX20 1TU

UK

 

Name:  Legal Department

 

Address: 4200 Bohannon Drive

Suite 250

Menlo Park

CA 94025

USA

 

Fax number: +441993 813466

Fax number:  +1 650-618-2602

 

17.3

Assignment/sub-contracting:  Neither party may assign or transfer this Agreement
as a whole, or any of its rights or obligations under it, without first
obtaining the written consent of the other party (not to be unreasonably
withheld or delayed) provided that:

 

 

17.3.1

either party may, without the consent of the other party, assign all of its
rights and obligations under this Agreement to an Affiliate or to any successor
to that part of its business to which the subject matter of this Agreement
relates. In the event a party assigns all of its rights and obligations under
this Agreement to an Affiliate and such Affiliate ceases to be an Affiliate of
the party, all of the assigned rights and obligations under this Agreement shall
be transferred back to the relevant party; and

 

 

17.3.2

Customer may, without the consent of Owen Mumford, assign this Agreement to the
purchaser or licensee in the event of the grant of a licence or sale of its
business relating to the Final Combination Product.

 

17.4

Illegal/unenforceable provisions:  If the whole or any part of any provision of
this Agreement is void or unenforceable in any jurisdiction, the other
provisions of this Agreement, and the rest of the void or unenforceable
provision, will continue in force in that jurisdiction, and the validity and
enforceability of that provision in any other jurisdiction will not be affected.

 

17.5

Waiver of rights:  If a party fails to enforce, or delays in enforcing, an
obligation of the other party, or fails to exercise, or delays in exercising, a
right under this Agreement, that failure or delay will not affect its right to
enforce that obligation or constitute a waiver of that right.  Any waiver of any
provision of this Agreement will not, unless expressly stated to the contrary,
constitute a waiver of that provision on a future occasion.

 

17.6

No agency:  Nothing in this Agreement creates, implies or evidences any
partnership or joint venture between the parties, or the relationship between
them of principal and agent.  Neither party has any authority to make any
representation or commitment, or to incur any liability, on behalf of the other.

 

17.7

Entire agreement: This Agreement (incorporating all Schedules) and any Quality
Agreement entered into between the parties constitutes the entire agreement
between the parties relating to its subject matter and supersedes all prior oral
or written agreements, arrangements or understandings between them (including,
without limitation, any project proposal supplied by Owen Mumford) relating to
its subject matter.  In the event that the terms of the Quality Agreement are
inconsistent with the terms of this Agreement, the terms of this Agreement shall
prevail.  Each party acknowledges that it has not entered into this Agreement on
the basis of any warranty, representation, statement, agreement or undertaking
except those expressly set out in this Agreement.  Each party waives any claim
for breach of this Agreement, or any right to rescind this Agreement in respect
of, any representation which is not an express provision of this
Agreement.  However, this clause does not exclude any liability which either
party may have to the other (or any right which either party may have to rescind
this Agreement) in respect of any fraudulent misrepresentation or fraudulent
concealment prior to the execution of this Agreement.  

-25 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

 

17.8

Formalities: Each party will take any action and execute any document reasonably
required by the other party to give effect to any of its rights under this
Agreement, or to enable their registration in any relevant jurisdiction within
the Territory provided the requesting party pays the other party’s reasonable
expenses.

 

17.9

Amendments:  No variation or amendment of this Agreement (including the
Schedules) will be effective unless it is made in writing and signed by each
party’s representative.

 

17.10

Third parties:  No one except a party to this Agreement has any right to prevent
the amendment of this Agreement or its termination, and no one except a party to
this Agreement may enforce any benefit conferred by this Agreement, unless this
Agreement expressly provides otherwise.  The indemnified parties specified in
clauses 13.1and 13.2 may directly enforce the indemnities in those clauses.  

 

17.11

Governing law:  This Agreement is governed by, and is to be construed in
accordance with, [*] law.  The [*] Courts will have exclusive jurisdiction to
deal with any dispute which has arisen or may arise out of or in connection with
this Agreement, except that either party may bring proceedings for an injunction
in any jurisdiction.

 

SIGNED by the authorised representatives of the parties on the date set out at
the head of this Agreement.

 

 

SIGNED for and on behalf of OWEN MUMFORD LIMITED:

 

Name     Gavin Jones

 

 

Position  Group Finance Director

 

 

 

Signature  /s/ Gavin Jones

SIGNED for and on behalf of VERSARTIS GMBH:

 

Name      Paul B. Westberg

 

 

Position    Managing Director

 

 

 

Signature  /s/ Paul B. Westberg

 

-26 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

SCHEDULE 1

 

Part 1

 

Device

 

Description of device, including drawings highlighting any special features will
be agreed by Owne Mumford and Customer before commencement of manufacturing of
the Device.

 

 

Part 2

 

Labelling and Packaging Specifications

 

Details of the Labelling and Packaging Specifications (including any branding
requirements) for both Primary and Secondary Packaging will be agreed by Owen
Mumford and Customer before commencement of manufacturing of the Device.

 

 

Part 3

 

Final Combination Product

 

Details of the Final Combination Product (including any branding requirements)
will be agreed by Owen Mumford and Customer before commencement of manufacturing
of the Final Combination Product.

 

Part 4

 

Quality Agreement and Specifications and Assumptions

 

Within 90 days of the Effective Date, Owen Mumford and Customer will execute a
Quality Agreement related to manufacture of the Device and the Final Combination
Product. Before commencement of manufacturing of the Device, the parties will
agree technical specifications and design specifications relating to the Device
and the Final Combination Product.

 

 

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[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.

--------------------------------------------------------------------------------

SCHEDULE 2

 

Price and Payment Schedule

 

Provisional Price for each of the Final Combination Product based on the device
being packed in a twin pack:

 

 

Price (Pounds Sterling)

 

Subassemblies

Assembly

Packaging

Total

Initial Production up to [*] units

[*]

[*]

[*]

[*]

Routine Production <[*]

[*]

[*]

[*]

[*]

>[*]

[*]

[*]

[*]

[*]

>[*]

[*]

[*]

[*]

[*]

>[*]

[*]

[*]

[*]

[*]

 

This pricing does include batch release testing with the exception of drug
testing.

 

The parties shall agree a fixed Price for the Final Combination Products prior
to production.

 

The parties shall meet within [*] before or after [*], and each [*] anniversary
of that date (in each case the “Anniversary”) to review the Price in good faith.

 

If within one month of meeting to review the Price the parties cannot agree a
revised Price, then, on such date of the Price will [*] between the date on
which the Price was last set or increased and the date on which Owen Mumford
increases the Price.

 

Once the new Price is agreed or determined, it shall apply with effect from the
relevant Anniversary and shall be deemed to come into force from that date
(which, for the avoidance of doubt, may have retrospective effect if the parties
meet, or if the Price is agreed or determined, after the relevant
Anniversary).  Within one month of agreeing or determining the new Price, the
Customer shall pay to Owen Mumford any outstanding sums due in respect of its
purchases of Products since the relevant Anniversary, together with any
applicable VAT.

 

The Customer’s address for the receipt of invoices under this Agreement is:

 

Accounts Payable

4200 Bohannon Drive, Suite 250

Menlo Park, CA 94025

USA

 

or

 

ap@versartis.com

 

134906374 v2

-28 -

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.