Exhibit 10.2

 

Execution Version

 

SUPPLY AGREEMENT

 

This SUPPLY AGREEMENT (the “Agreement”) is made and entered into as of the      
day of May, 2008 (the “Effective Date”) by and between AMAG PHARMACEUTICALS,
INC., a Delaware corporation with its principal place of business at 125
CambridgePark Drive, Cambridge, MA 02140, U.S.A. (“AMAG”), and 3SBIO INC., a
company incorporated under the laws of the Cayman Islands, with a place of
business at No. 3 A1 Road 10, Shenyang Economy & Technology Development Zone,
Shenyang, 110027, China (“3SBio”).  AMAG and 3SBio are sometimes referred to
herein individually as a “Party” and collectively as the “Parties.”

 

RECITALS

 

WHEREAS, the Parties have entered into that certain Collaboration and Exclusive
License Agreement dated as of the Effective Date (the “License Agreement”),
pursuant to which AMAG is granting 3SBio certain rights to Develop and
Commercialize the Product in the Licensed Territory;

 

WHEREAS, pursuant to Article 7 of the License Agreement, 3SBio wishes to
purchase from AMAG the Product in finished form in unlabeled vials for clinical
and commercial use, and AMAG is willing to supply 3SBio with such Product for
use in accordance with the terms and conditions of the License Agreement;

 

NOW THEREFORE, in consideration of the mutual promises and covenants set forth
below, 3SBio and AMAG mutually agree as follows:

 

1.                                      DEFINITIONS.

 

Capitalized terms not otherwise defined herein shall have the meanings set forth
in the License Agreement.  As used in this Agreement, the following capitalized
terms shall have the following meanings:

 

1.1                               “Acceptance Tests” means those test methods
set forth in Exhibit A to be performed to determine that the Product supplied to
3SBio conforms to the Specifications, as such tests may be amended from time to
time by written agreement of the Parties.

 

1.2                               “Capacity Shortage” shall have the meaning set
forth in Section 5.3.

 

1.3                               “Certificate of Analysis” shall have the
meaning set forth in Section 2.5.

 

1.4                               “Good Manufacturing Practice” or “GMP” means
the then-current standards for the preparation of finished pharmaceuticals, as
set forth in the FD&C Act and applicable regulations promulgated thereunder,
including without limitation 21 CFR §§210-211.

 

1.5                               “Product” shall mean any Product (as defined
in the License Agreement) then being Developed or Commercialized under the
License Agreement pursuant to the terms and conditions of such agreement.

 

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1.6                               “Product Price” shall have the meaning set
forth in Section 4.1.

 

1.7                               “Raw Material Cost” means the amounts paid by
AMAG to a Third Party for providing raw materials and packaging materials for
producing the Product, to the extent not reimbursed or refunded or credited to
AMAG, and net of any discounts or other benefits received by AMAG from Third
Party manufacturers, calculated on a per-unit basis and in accordance with U.S.
generally accepted accounting principles consistently applied.

 

1.8                               “Quality Agreement” shall mean the Quality
Agreement to be negotiated by the Parties as described in Section 3.1.

 

1.9                               “Specifications” shall mean the
characteristics and standards pertaining to the manufacture or supply of the
Product, as set forth in Exhibit A, as the same may be amended or supplemented
from time to time pursuant to Section 2.5.

 

2.                                      PURCHASE AND SUPPLY.

 

2.1                               Purchase and Supply Agreement.  During the
term of this Agreement, 3SBio agrees to buy, and AMAG agrees to sell, all of
3SBio’s and its Affiliates’ and permitted sublicensees’ requirements of Product
for Development, Commercialization and use in accordance with the terms and
conditions of this Agreement and the License Agreement.

 

2.2                               Forecasts.  At least [***] prior to the first
requested delivery date for Product under this Agreement, 3SBio shall deliver to
AMAG a detailed forecast of 3SBio’s requirements for Product for each calendar
quarter during the [***] period beginning with the first requested delivery date
for Product under this Agreement.  3SBio shall thereafter update such detailed
forecast quarterly, no later than the first day of each calendar quarter, so
that each quarter, AMAG shall have been provided with a rolling detailed
forecast for each quarter during the [***] period commencing [***] after the
date on which such forecast is submitted.  The forecast for the first [***]
contained in each such detailed forecast shall be firm and binding on 3SBio and
AMAG.  3SBio may order amounts of Product in excess of the amounts forecast for
such [***] period, and AMAG shall use commercially reasonable efforts to supply
any such additional amounts ordered; provided, that AMAG shall be under no
obligation to accept purchase orders for amounts exceeding [***] of the amount
forecast for such [***] period.  The quantities indicated for the remaining
months of each rolling forecast will be treated as a forecast only and will not
create any obligations for either Party.

 

2.3                               Ordering.  All Product ordered under this
Agreement shall be pursuant to written purchase orders, each of which shall
specify the quantity of Product ordered for Development or Commercialization and
the requested delivery date.  The minimum quantity of Product that may be
ordered in a given purchase order is [***] vials of Product.  3SBio shall submit
each such purchase order to AMAG no later than thirty (30) days prior to the
delivery date indicated in

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

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such purchase order.  Any purchase orders for Product submitted by 3SBio shall
reference this Agreement and shall be governed exclusively by the terms
contained herein.  Any term or condition in any order, confirmation or other
document furnished by 3SBio or AMAG that is in any way inconsistent with the
terms and conditions of this Agreement is hereby expressly rejected.  Within
fifteen (15) days after receipt of a purchase order placed pursuant to this
Section 2.3, AMAG shall confirm the date for delivery of the applicable quantity
of Product and any quantities in excess of the permissible variance under
Section 2.2.  As used in this Agreement, all references to days shall be deemed
to be references to calendar days.

 

2.4                               Unordered Product.  For any given quarter, if
3SBio fails to order and complete the purchase of at least the quantities of
such Product set forth in the binding forecast for that quarter, then 3SBio
shall pay to AMAG an amount equal to: [***].  Following payment of such amount,
AMAG shall, at its sole option, either (a) deliver the Unordered Product Units
to 3SBio or (b) credit such amount against future orders of Product.

 

2.5                               Product Specifications; Testing.  All Product
supplied hereunder will conform to the Specifications at the time of delivery
and shall have a remaining shelf life of not less than [***] from the date of
delivery to 3SBio.  AMAG will test each batch of Product in accordance with the
Acceptance Tests and supply 3SBio with a certificate of analysis (“Certificate
of Analysis”) confirming that such batch meets the Specifications.  3SBio may
then retest the batch of Product as more fully set forth in Section 5.5 to
confirm that it meets the Specifications.  The Parties acknowledge that the
Specifications and Acceptance Tests may need to be refined and modified as the
Parties gain experience with the manufacture, testing and use of Product. 
Accordingly, the Parties agree to negotiate in good faith to modify the
Specifications and Acceptance Tests from time to time as the Parties’ experience
with the manufacture, testing and use of the Product warrants.  3SBio
acknowledges that AMAG may be required to modify the Specifications in light of
regulatory requirements imposed by the FDA or other Regulatory Authority, and
that 3SBio may not unreasonably withhold its agreement from any such
modifications.  If any regulatory requirement imposed by the SFDA would require
a change to the Specifications or the Acceptance Tests, the Parties will
promptly discuss such change and negotiate amendments to the Specifications or
the Acceptance Tests in good faith. The Parties agree to allocate on an
equitable basis any costs of developing and implementing revised procedures in
response to SFDA requirements.

 

3.                                      MANUFACTURE.

 

3.1                               Quality Agreement.  Promptly after the
Effective Date, the Parties will negotiate the terms of a quality agreement
governing the quality assurance obligations and responsibilities of the Parties
with respect to the manufacture and supply of the Product (as amended or
modified from time to time according to its terms, the “Quality Agreement”).  In
the event of a discrepancy between the provisions of the Quality Agreement and
the provisions of this

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

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Agreement, the provisions of the Quality Agreement shall control with respect to
terms governing quality of the Product and the provisions of this Agreement
shall control with respect to all other terms.

 

3.2                               Regulatory Inspections.  AMAG specifically
agrees to cooperate with any inspection by the SFDA, including without
limitation any inspection required for approval of 3SBio’s MAA in the Licensed
Territory.  The Parties understand that such assistance and cooperation will not
require substantial expenditures by AMAG, and the Parties shall discuss in good
faith the equitable allocation of any unexpected expenses resulting from such
inspection.  Notwithstanding the foregoing, 3SBio shall be solely responsible
for any Out-of-Pocket Costs incurred in connection with the conduct of any
inspection by the SFDA, including without limitation travel costs of any SFDA
personnel.  AMAG shall promptly inform 3SBio of the findings of any such
inspection and notify 3SBio of any corrective action that AMAG may be required
to undertake as a result of any such inspection.

 

3.3                               Quality Control Audits.  Upon written request
to AMAG, 3SBio shall have the right, no more than once per calendar year, to
have representatives visit the manufacturing facilities of AMAG during normal
business hours to review manufacturing operations, to assess its compliance with
GMP and quality control procedures, and to discuss any related issues with
AMAG’s manufacturing and management personnel.  Upon written request to 3SBio,
AMAG shall have the right, no more than once per calendar year, to have
representatives visit the packaging facilities of 3SBio during normal business
hours to review packaging operations, to assess its compliance with GMP and
quality control procedures, and to discuss any related issues with 3SBio’s
packaging and management personnel.

 

3.4                               Change in Manufacturing Process.  AMAG shall
notify 3SBio in writing before it implements any change in the materials,
equipment, process or procedures used to manufacture Product that (a) would
constitute a major change under GMP or (b) AMAG would be required to report to
the FDA under applications laws and regulations.

 

3.5                               Compliance with Laws.  AMAG shall comply with
all applicable present and future orders, regulations, requirements and laws of
any and all United States federal, state, provincial and local authorities and
agencies, including without limitation all laws and regulations of such
territories applicable to the transportation, storage, use, handling and
disposal of hazardous materials.  AMAG will maintain during the term of this
Agreement all government permits, including without limitation health, safety
and environmental permits, necessary for the conduct of the actions and
procedures that it undertakes pursuant to this Agreement.  3SBio shall provide
AMAG with written notice of any additional regulatory requirements of the
Licensed Territory that relate to the manufacture of Product for the Licensed
Territory.  AMAG shall use commercially reasonable efforts to comply with such
additional requirements, and shall provide 3SBio with prompt written notice of
any Out-of-Pocket Costs associated with such compliance, which, to the extent
not included in the Product Price, shall be borne by 3SBio.

 

3.6                               Documentation and Samples.  AMAG shall
maintain complete, accurate and authentic accounts, notes, data and records
pertaining to the methods and facilities used for the manufacture, processing,
testing, packing, labeling, holding and distribution of the Product in
accordance with the applicable laws and regulations in the United States.  AMAG
shall retain

 

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samples of Product from each batch of Product supplied under this Agreement
after 3SBio’s acceptance of such batch under Section 5.5.  AMAG shall retain
such records and samples for a period of three (3) years following the date of
manufacture, or longer if required by United States law, and upon 3SBio’s
written request shall make available to 3SBio copies of such records and
portions of such samples.

 

3.7                               Rework.  AMAG shall not rework any batch of
Product without 3SBio’s prior written consent, not to be unreasonably withheld.

 

4.                                      PRICES AND PAYMENT.

 

4.1                               Product Price.

 

a.                                       For all Product delivered to 3SBio
pursuant to this Agreement, 3SBio shall pay to AMAG a price (the “Product
Price”) equal to [***], subject to the adjustments described in below in
Section 4.1(b) and (c).

 

b.                                       The Product Price will be subject to
adjustment by AMAG under this Section 4.1(b) during the term of this Agreement,
based [***].  AMAG shall inform 3SBio of any such adjustment to the Product
Price prior to implementing such adjustment, which shall apply to all orders
from and after the adjustment date.  In the event that [***], then upon
adjustment to the Product Price under this Section 4.1(b), the Parties shall use
reasonable and good faith efforts to agree, within forty-five (45) days after
the adjustment date, to an amendment to this Agreement that provides for a
revised Product Price.  If the Parties do not agree on a revised Product Price
within such forty-five (45) day period, then the Parties shall refer the matter
to the Chief Executive Officers of the Parties, or their designees, for
continued good faith negotiations for an additional forty-five (45) day period. 
If the Chief Executive Officers of the Parties, or their designees, do not agree
on a revised Product Price during such additional forty-five (45) day period,
then 3SBio shall have the right, but not the obligation, to terminate this
Agreement and the License Agreement, pursuant to Section 13.4 thereof, at will
upon thirty (30) days written notice to AMAG.  During such forty-five (45) day
negotiation periods and thirty (30) day period prior to such termination of this
Agreement and the License Agreement, the adjusted Product Price [***] shall
apply to all orders from and after the adjustment date.

 

c.                                       The Product Price will be subject to
adjustment under this Section 4.1(c) in the event that [***].

 

4.2                               Method of Payment.  At the time of each
shipment of Product hereunder, AMAG shall provide to 3SBio a written invoice for
Product supplied in such delivery.  All payments due hereunder to AMAG shall be
paid to AMAG in United States dollars not later than thirty (30) days following
the receipt of the applicable invoice.  Payment shall be made by wire

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

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transfer of immediately available funds into a deposit account of AMAG
designated by AMAG from time to time.  Payment of any such amounts shall be
considered effected as of the date on which AMAG’s account is credited with the
applicable amount.  In addition to any other remedies AMAG may have, 3SBio shall
be solely responsible for any additional costs, or any reduction in value of
local currency in relation to Dollars, resulting from untimely payments during
any period after amounts payable to AMAG hereunder are due.  Any invoiced amount
that is not paid when due shall be assessed a late payment fee at the rate of
two percent (2%) per month or the maximum rate permitted by applicable law with
respect to such obligations, whichever is less.

 

4.3                               Taxes.  3SBio will make all payments to AMAG
hereunder free and clear of any taxes imposed by or under the authority of any
government or public authority (including, without limitation, any sums due to
be paid to AMAG hereunder that are subject to any withholding or similar tax),
but excluding any corporate income tax, partnership tax or other business tax to
which AMAG may be subject.  3SBio will pay such additional amount as may be
required to ensure that the net amount received by AMAG hereunder will equal the
full amount that would have been received by AMAG had not such tax (excluding
any corporate income tax, partnership tax or other business tax to which AMAG
may be subject) been imposed or withheld, including that 3SBio will be
responsible for the payment of all sales taxes due and payable on the purchase
of the Product.  AMAG and 3SBio, without prejudice to the foregoing, will use
their best endeavors to do all such lawful acts and things and to sign all such
lawful deeds and documents as will enable 3SBio to take advantage of any
applicable legal provision or any double taxation treaties with the object of
paying the sums due to AMAG without imposing or withholding any tax.

 

4.4                               Blocked Currency.  In the event that 3SBio is
prohibited or restricted from making payment of any monies at a time when such
monies are due and payable to AMAG hereunder by any reason of a legal
requirement within the Licensed Territory, 3SBio shall promptly so advise AMAG
in writing.  3SBio shall, upon AMAG’s request, deposit any blocked funds to the
credit of AMAG in a separate interest-bearing account in a bank or other
depository in the Licensed Territory designated in writing by AMAG, or pay such
funds promptly to such person or entity as AMAG may designate in writing.  3SBio
shall be jointly and severally liable for any additional costs, or any reduction
in value of local currency, resulting from failure of 3SBio to comply with such
instructions to make payment.  The funds therein shall be remitted to AMAG
promptly upon the lifting of the prohibition or restriction under such legal
requirement.

 

5.                                      DELIVERY AND ACCEPTANCE.

 

5.1                               Delivery; Export Compliance.  For each
purchase order submitted by 3SBio and accepted by AMAG in accordance with
Section 2.3, AMAG shall deliver to the common carrier specified by 3SBio in the
applicable purchase order the specified quantity of Product conforming with the
Specifications, within ten (10) days after the delivery date specified in the
applicable purchase order.  Unless otherwise agreed by the Parties in writing,
delivery shall be made FCA (Incoterms 2000) AMAG’s facility.  AMAG will package
the Product in accordance with AMAG’s customary practices for pharmaceutical
compounds, unless otherwise specified by 3SBio.  3SBio shall prepare, obtain,
and maintain all necessary import and export licenses, permits or registrations
relating to the Product and shall keep AMAG informed regarding the

 

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filing or maintenance of any such licenses, permits or registrations.  3SBio
represents and warrants that it shall comply with all import and export laws and
regulations applicable to its purchase of Product hereunder.  If 3SBio breaches
any material obligation under this Agreement, AMAG shall have the right to
suspend performance under this Agreement until such breach is cured.

 

5.2                               Late Delivery.  AMAG shall use commercially
reasonable efforts to deliver Product hereunder on the scheduled delivery date
as set forth in the applicable purchase order, but it will not be considered a
breach of this Agreement if a delivery containing at least [***] of Product
conforming to the Specifications ordered in the applicable purchase order is
delivered within ten (10) days following the date originally agreed upon for
delivery, provided that AMAG shall use commercially reasonable efforts to
promptly supply the missing Product to 3SBio.

 

5.3                               Capacity.  AMAG shall use its commercially
reasonable efforts to obtain and maintain capacity or inventory sufficient to
meet 3SBio’s requirements for Product as set out in the binding forecasts and
purchase orders pursuant to Sections 2.2 and 2.3 of this Agreement.  Before the
anticipated First Commercial Sale of the Product in the Licensed Territory, AMAG
shall obtain, qualify and maintain an alternate manufacturer for the Product. 
If at any time AMAG or 3SBio reasonably believes that AMAG may not have
sufficient capacity or inventory to fulfill the requirements of 3SBio (a
“Capacity Shortage”), whether due to insufficient manufacturing capacity or
otherwise, then AMAG shall use commercially reasonable efforts to develop a plan
reasonably acceptable to 3SBio to allocate Product among 3SBio and AMAG’s other
customers to address the Capacity Shortage such that 3SBio’s supply requirements
for the Licensed Territory will be treated in a non-discriminatory manner to the
extent possible as compared to supply requirements for territories outside the
Licensed Territory.

 

5.4                               Shortage.  If either (i) [***]; or (ii) [***]
(a “Supply Shortage”), then 3SBio shall be entitled to deliver written notice to
AMAG of such Supply Shortage.  If AMAG does not cure such Supply Shortage by
delivering conforming Product within [***] of AMAG’s receipt of a written notice
from 3SBio of such Supply Shortage, then [***] to address such Supply Shortage.

 

5.5                               Acceptance and Rejection.

 

a.                                       3SBio may reject any shipment of
Product that does not conform with the Specifications by giving written notice
to AMAG within fifteen (15) days after receipt of such delivery.  Such notice
shall identify the reasons for 3SBio’s rejection of the shipment.  If no such
notice of rejection is received by AMAG within such fifteen (15) day period,
3SBio shall be deemed to have accepted such shipment of Product.

 

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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

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b.                                       After notice of rejection is received
by AMAG, 3SBio shall cooperate with AMAG in determining whether rejection is
necessary or justified.  AMAG will evaluate process issues and other reasons for
non-compliance with the Specifications.  AMAG shall notify 3SBio as promptly as
reasonably possible whether it accepts 3SBio’s basis for any rejection.  If AMAG
disagrees with 3SBio’s determination that certain Product does not meet the
Specifications, such Product shall be submitted to a mutually acceptable Third
Party laboratory.  Such Third Party laboratory shall determine whether such
Product meets the Specifications, and the Parties agree that such laboratory’s
determination shall be final and determinative.  The Party against whom the
Third Party laboratory rules shall bear all costs of the Third Party testing. 
If such laboratory determines or the Parties agree that such shipment has been
mistakenly rejected, then such shipment shall automatically be deemed to have
been accepted by 3SBio, and 3SBio shall pay the Product Price for the quantities
of Product initially rejected by 3SBio.

 

c.                                       3SBio may not destroy any rejected
shipment of Product until it receives written notification from AMAG that AMAG
does not dispute that such shipment fails to meet Specifications and that AMAG
does not request return of the Product.  Upon authorization from AMAG to do so,
3SBio shall destroy the Product received in the rejected shipment promptly at
AMAG’s cost and provide AMAG with certification of such destruction.  3SBio
shall, upon receipt of AMAG’s request for return, promptly return such rejected
Product to AMAG, at AMAG’s cost.

 

d.                                       3SBio’s remedies for non-conforming
quantities of Product will be as set forth in Section 6.2 below.

 

6.                                      REPRESENTATIONS AND WARRANTIES.

 

Each Party hereby represents and warrants to the other Party as follows:

 

a.                                       Such Party (i) is duly organized,
validly existing and in good standing under the laws of the state in which it is
organized; (ii) has the power and authority and the legal right to own and
operate its property and assets, to lease the property and assets it operates
under lease, and to carry on its business as it is now being conducted; and
(iii) is in compliance with all requirements of applicable law, except to the
extent that any noncompliance would not materially adversely affect such Party’s
ability to perform its obligations under the Agreement.

 

b.                                       Such Party (i) has the power and
authority and the legal right to enter into this Agreement and to perform its
obligations hereunder and (ii) has taken all necessary action on its part to
authorize the execution and delivery of this Agreement and the performance of
its obligations hereunder.  This Agreement has been duly executed and delivered
on behalf of such Party, and constitutes a legal, valid, binding obligation,
enforceable against such Party in accordance with its terms, except as such
enforcement may be affected by bankruptcy, reorganization, insolvency,
moratorium or similar laws affecting creditor’s rights generally and except for
general principles of equity.

 

c.                                       All necessary consents, approvals and
authorizations of all governmental authorities and other persons required to be
obtained by such Party in connection with this

 

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Agreement have been obtained, except for those that cannot be obtained prior to
the filing of an application for regulatory approval of the Product.

 

d.                                       The execution and delivery of this
Agreement and the performance of such Party’s obligations hereunder (i) do not
conflict with or violate any requirement of applicable laws or regulations or
any material contractual obligation of such Party and (ii) do not materially
conflict with, or constitute a material default or require any consent under,
any material contractual obligation of such Party.

 

6.2                               Limited Warranty.  AMAG warrants that Product
delivered hereunder will (i) be manufactured in accordance with GMP, all other
applicable requirements of the FDA, and all applicable United States laws and
regulations, and (ii) conform to the Specifications at the time of delivery. 
3SBio’s remedies and AMAG’s liability with respect to this warranty are set
forth in Section 6.3 below.  This warranty is the only warranty made by AMAG
under this Agreement with respect to Product delivered hereunder, and may only
be modified or amended by a written instrument signed by a duly authorized
officer of AMAG and accepted by 3SBio.  THE EXPRESS WARRANTY IN THIS SECTION 6.2
IS IN LIEU OF ALL OTHER WARRANTIES IN THIS AGREEMENT, EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, NON-INFRINGEMENT, OR NON-MISAPPROPRIATION OF THIRD PARTY
INTELLECTUAL PROPERTY RIGHTS.  FOR THE AVOIDANCE OF DOUBT THIS SECTION 6.2 IS
NOT INTENDED TO AND DOES NOT LIMIT THE WARRANTIES MADE BY AMAG IN THE LICENSE
AGREEMENT.

 

6.3                               Remedy.  Any shipment of Product delivered to
3SBio by AMAG that does not conform to the Specifications and is rejected by
3SBio within fifteen (15) days of delivery, or is otherwise not in compliance
with the warranty made in Section 6.2, will be replaced by AMAG, or, if AMAG has
acknowledged in writing that it is unable to produce conforming Product, any
sums actually paid therefor will be refunded and such inability shall be
considered a Capacity Shortage subject to Section 5.3 of this Agreement.  THE
EXPRESS OBLIGATIONS STATED IN THIS SECTION 6.3 AND IN SECTION 7 ARE IN LIEU OF
ALL OTHER LIABILITIES OR OBLIGATIONS OF AMAG UNDER THIS AGREEMENT FOR DAMAGES,
INCLUDING BUT NOT LIMITED TO LOSS, DAMAGE OR BODILY OR PERSONAL INJURY, DIRECT
OR CONSEQUENTIAL, ARISING OUT OF OR IN CONNECTION WITH THE DELIVERY, USE OR
PERFORMANCE OF THE PRODUCT.  FOR THE AVOIDANCE OF DOUBT THIS SECTION 6.3 IS NOT
INTENDED TO AND DOES NOT LIMIT THE LIABILITIES AND OBLIGATIONS OF AMAG,
INCLUDING WITH RESPECT TO THE PRODUCT, UNDER THE LICENSE AGREEMENT.

 

6.4                               FD&C Act Guaranty.  Solely for the purpose of
providing immunity from criminal prosecution under Section 333(c)(2) of the FD&C
Act, AMAG guarantees that Product is not adulterated or misbranded within the
meaning of the FD&C Act.  This guaranty is completely independent of, and in no
way modifies, any other provision of this Agreement, including without
limitation Sections 6.2 and 6.3.

 

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7.                                      INDEMNIFICATION; LIMITATION OF
LIABILITY.

 

7.1                               Indemnity.

 

a.                                       Indemnification by 3SBio.  3SBio shall
have the indemnification obligations set forth in Section 11.2 of the License
Agreement for any Claims arising out of Product purchased by 3SBio under this
Agreement, except as otherwise provided in such Section 11.2, and provided
further that such indemnity shall not apply to the extent that such Claim is
based on circumstances for which AMAG is obligated to indemnify 3SBio under
subsection 7.1(b) below.

 

b.                                       Indemnification by AMAG.  AMAG shall
defend, indemnify, and hold the 3SBio Indemnitees harmless from and against any
and all Claims to the extent that such Claims arise out of, are based on, or
result from (i) AMAG’s or its Affiliates’ breach of any of their warranties,
representations, or covenants under this Agreement; (ii) injury, harm or death
to a patient based in strict products liability allegedly due and owing as a
result of the defective manufacture of the Product by or on behalf of AMAG or
its Affiliates (provided that such defective manufacture is not attributable to
any aspect of the packaging or labeling of the Product or any other acts or
omissions of 3SBio, its Affiliates, agents, licensees, manufacturers (other than
AMAG and its Affiliates, agents and subcontractors) or distributors); and
(iii) the gross negligence or reckless or willful misconduct of AMAG or its
Affiliates, directors, officers, employees, or agents, except in each case to
the extent that such Claims arise or result from 3SBio’s or its Affiliate’s
breach of any of its warranties, representations or covenants under this
Agreement, or any gross negligence or reckless or willful misconduct of any
3SBio Indemnitee.

 

c.                                       Indemnification Procedures.  The Party
claiming indemnity under this Section 7 (the “Indemnified Party”) shall give
written notice to the Party from whom indemnity is being sought (the
“Indemnifying Party”) promptly after learning of such Claim.  The Indemnified
Party shall provide the Indemnifying Party with reasonable assistance, at the
Indemnifying Party’s expense, in connection with the defense of the Claim for
which indemnity is being sought.  The Indemnified Party may participate in and
monitor such defense with counsel of its own choosing at its sole expense;
provided, that the Indemnifying Party shall have the right to assume and conduct
the defense of the Claim with counsel of its choice.  The Indemnifying Party
shall not settle any Claim without the prior written consent of the Indemnified
Party, not to be unreasonably withheld, unless the settlement involves only the
payment of money.  So long as the Indemnifying Party is actively defending the
Claim in good faith, the Indemnified Party shall not settle any such Claim
without the prior written consent of the Indemnifying Party.  If the
Indemnifying Party does not assume and conduct the defense of the Claim as
provided above, (a) the Indemnified Party may defend against, and consent to the
entry of any judgment or enter into any settlement with respect to the Claim in
any manner the Indemnified Party may deem reasonably appropriate (and the
Indemnified Party need not consult with, or obtain any consent from, the
Indemnifying Party in connection therewith), and (b) the Indemnifying Party will
remain responsible to indemnify the Indemnified Party as provided in this
Section 7.

 

10

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7.2                               Expenses.  No Party shall be required to pay
over to the other Party amounts called for under this Section 7 until the final
resolution of the claim, action, suit or proceeding from which the right to such
payment arose.

 

7.3                               Insurance. Each Party shall procure and
maintain insurance, including product liability insurance, adequate to cover its
obligations hereunder and that are consistent with normal business practices of
prudent companies similarly situated at all times during which any Product is
being clinically tested in human subjects or commercially distributed or sold. 
It is understood that such insurance shall not be construed to create a limit of
either Party’s liability with respect to its indemnification obligations under
this Article 7.  Each Party shall provide the other with written evidence of
such insurance upon request.  Each Party shall provide the other with written
notice at least thirty (30) days prior to the cancellation, non-renewal or
material change in such insurance or self-insurance which materially adversely
affects the rights of the other Party hereunder.

 

7.4                               Limitation of Liability.  NEITHER PARTY SHALL
BE LIABLE TO THE OTHER UNDER THIS AGREEMENT FOR ANY SPECIAL, CONSEQUENTIAL,
INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES ARISING FROM OR RELATING TO ANY BREACH
OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. 
NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 7.4 IS INTENDED TO OR
SHALL LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF ANY PARTY
UNDER SECTION 7.1 OR UNDER THE LICENSE AGREEMENT.  IN ADDITION, IN NO EVENT
SHALL THE COLLECTIVE, AGGREGATE LIABILITY OF AMAG AND ITS AFFILIATES AND THEIR
RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS UNDER THIS AGREEMENT EXCEED
[***].

 

8.                                      CONFIDENTIALITY.

 

8.1                               Confidentiality.  The Parties agree that any
Confidential Information (as defined in the License Agreement) of a Party
disclosed by such Party to the other Party under this Agreement shall be deemed
to have been disclosed under the License Agreement and shall be subject to all
the rights and obligations of the Parties under the provisions of Article 12 of
the License Agreement.  For clarity, 3SBio agrees and acknowledges that the
Specifications and the Acceptance Tests are the Confidential Information of
AMAG.

 

9.                                      TERM AND TERMINATION.

 

9.1                               Term; Termination.  This Agreement shall
commence on the Effective Date and shall continue in full force and effect until
the expiration or termination of the License Agreement, unless terminated sooner
pursuant to this Section 9.1 or Section 4.1(b) of this

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

11

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Agreement.  Either Party shall have the right, but not the obligation, to
terminate this Agreement upon written notice to the other Party if the other
Party commits any material breach of this Agreement and fails to cure such
breach within ninety (90) days (or twenty (20) days with respect to any failure
to pay any amounts due) following receipt of written notice from the
nonbreaching Party specifying such breach.  Notwithstanding the foregoing, no
cure period shall apply with respect to termination due to material breach of
Section 8; in such case, the non-breaching Party shall have the right, but not
the obligation, to terminate this Agreement immediately upon written notice to
the breaching Party.  For the avoidance of doubt, an uncured material breach of
this Agreement following notice by the non-breaching Party and the applicable
cure period shall be considered a material breach of the License Agreement.

 

9.2                               Surviving Obligations.  Termination or
expiration of this Agreement shall not (a) affect any other rights of either
Party that may have accrued up to the date of such termination or expiration or
(b) relieve 3SBio of its obligation to pay to AMAG sums due in respect of firm
orders of Product submitted prior to termination or expiration of this
Agreement.  The provisions of Sections 3.6, 6.2, 6.3, 7, 8, 9.2 and 10 shall
survive the termination or expiration of this Agreement.

 

10.                               GENERAL TERMS.

 

10.1                        Dispute Resolution.  Any claim or controversy
between the Parties arising out of or relating to this Agreement, or arising
from the threatened breach, breach, or termination of this Agreement, shall be
resolved pursuant to the dispute resolution procedures set forth in Section 14
of the License Agreement.

 

10.2                        Independent Contractors.  Each Party shall act
solely as an independent contractor, and nothing in this Agreement shall be
construed to give either Party the power or authority to act for, bind, or
commit the other Party in any way.  Nothing herein shall be construed to create
the relationship of partners, principal and agent, or joint-venture partners
between the Parties.

 

10.3                        English Language; Governing Law.  This Agreement was
prepared in the English language, which language shall govern the interpretation
of, and any dispute regarding, the terms of this Agreement.  This Agreement and
all disputes arising out of or related to this Agreement or any breach hereof
shall be governed by and construed under the laws of the State of New York,
without giving effect to any choice of law principles that would require the
application of the laws of a different state.

 

10.4                        Notice.  All notices, including notices of address
change, required or permitted to be given under this Agreement shall be made in
accordance with Section 15.3 of the License Agreement.

 

10.5                        Severability.  If any one or more of the provisions
of this Agreement is held to be invalid or unenforceable by any court of
competent jurisdiction from which no appeal can be or is taken, the provision
shall be considered severed from this Agreement and shall not serve to
invalidate any remaining provisions hereof.  The Parties shall make a good faith
effort to replace

 

12

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any invalid or unenforceable provision with a valid and enforceable one such
that the objectives contemplated by the Parties when entering this Agreement may
be realized.

 

10.6                        No Waiver.  Any delay in enforcing a Party’s rights
under this Agreement or any waiver as to a particular default or other matter
shall not constitute a waiver of such Party’s rights to the future enforcement
of its rights under this Agreement, except with respect to an express written
and signed waiver relating to a particular matter for a particular period of
time.

 

10.7                        Entire Agreement.  This Agreement, including the
Exhibits hereto, sets forth the complete, final and exclusive agreement and all
the covenants, promises, agreements, warranties, representations, conditions and
understandings between the Parties hereto with respect to the subject matter
hereof and supersedes, as of the Effective Date, all prior agreements and
understandings between the Parties with respect to the subject matter hereof,
including, without limitation, the Confidentiality Agreement between the
Parties, dated October 15, 2007.  There are no covenants, promises, agreements,
warranties, representations, conditions or understandings, either oral or
written, between the Parties other than as are set forth herein and therein.  No
subsequent alteration, amendment, change or addition to this Agreement shall be
binding upon the Parties unless reduced to writing and signed by an authorized
officer of each Party.

 

10.8                        No Strict Construction; Headings.  This Agreement
has been prepared jointly and shall not be strictly construed against either
Party.  Ambiguities, if any, in this Agreement shall not be construed against
any Party, irrespective of which Party may be deemed to have authored the
ambiguous provision.  The headings of each Article and Section in this Agreement
have been inserted for convenience of reference only and are not intended to
limit or expand on the meaning of the language contained in the particular
Article or Section.

 

10.9                        Assignment.  Neither Party may assign or transfer
this Agreement or any rights or obligations hereunder without the prior written
consent of the other, except that (i) a Party may make such an assignment
without the other Party’s consent to an Affiliate (so long as such entity
remains an Affiliate of the transferee); (ii) 3SBio shall have the right to
assign or transfer this Agreement to a Third Party acquiror in connection with a
Change of Control (as defined below) subject to AMAG’s prior written consent,
not to be unreasonably withheld, conditioned, or delayed; and (iii) AMAG shall
have the right to assign or transfer this Agreement to a Third Party in
connection with a permitted assignment or transfer of the License Agreement to
such Third Party.  Any permitted successor or assignee of rights and/or
obligations hereunder shall, in a writing to the other Party, expressly assume
performance of such rights and/or obligations.  Any assignment or attempted
assignment by either Party in violation of the terms of this Section 10.9 shall
be null, void and of no legal effect.  “Change of Control” of a Party means the
occurrence of one of the following events: (a) the acquisition of such Party by,
or consolidation or merger of such Party with, any Third Party, in which the
holders of such Party’s outstanding voting securities immediately prior to such
transaction own voting securities representing less than fifty percent (50%) of
the voting power of the corporation or other entity surviving such transaction
immediately after such transaction; or (b) the sale or other transfer to a Third
Party of all or substantially all of such Party’s business.  Notwithstanding the
foregoing, the Parties agree and acknowledge that AMAG may discharge any
obligations and rights to manufacture and supply the Product through any Third
Party, provided that AMAG shall cause such Third Party

 

13

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to comply with the provisions of this Agreement in connection with such
performance.  Any breach by a Third Party of AMAG’s obligations under this
Agreement shall be deemed a breach by AMAG.

 

10.10                 Force Majeure.  Both Parties shall be excused from the
performance of their obligations under this Agreement to the extent that such
performance is prevented by force majeure and the nonperforming Party promptly
provides notice of the prevention to the other Party.  Such excuse shall be
continued so long as the condition constituting force majeure continues and the
nonperforming Party takes reasonable efforts to remove the condition.  For
purposes of this Agreement, force majeure shall include conditions beyond the
control of the Parties, including, without limitation, an act of God, war, civil
commotion, terrorist act, labor strike or lock-out, epidemic, failure or default
of public utilities or common carriers, destruction of production facilities or
materials by fire, earthquake, storm or like catastrophe, and failure of plant
or machinery (provided that such failure could not have been prevented by the
exercise of skill, diligence, and prudence that would be reasonably and
ordinarily expected from a skilled and experienced person engaged in the same
type of undertaking under the same or similar circumstances).  Notwithstanding
the foregoing, a Party shall not be excused from making payments owed hereunder
because of a force majeure affecting such Party.

 

10.11                 Performance by Affiliates.  Except as otherwise provided
in this Agreement, each Party may discharge any obligations and exercise any
rights hereunder through any of its Affiliates.  Each Party hereby guarantees
the performance by its Affiliates of such Party’s obligations under this
Agreement, and shall cause its Affiliates to comply with the provisions of this
Agreement in connection with such performance.  Any breach by a Party’s
Affiliate of any of such Party’s obligations under this Agreement shall be
deemed a breach by such Party, and the other Party may proceed directly against
such Party without any obligation to first proceed against such Party’s
Affiliate.

 

10.12                 Publicity.  Neither Party will make any announcement or
other public statement concerning the existence of this Agreement without the
consent of the other Party.

 

10.13                 Counterparts.  This Agreement may be executed in one
(1) or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

 

[Signature page follows]

 

14

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IN WITNESS WHEREOF, each Party has caused this Supply Agreement to be signed and
delivered by its duly authorized officer or representative as of the date first
set forth above.

 

3SBIO INC.

 

AMAG PHARMACEUTICALS, INC.

 

 

 

 

 

 

By:

/s/ Jin Lou

 

By:

/s/ Brian J.G. Pereira

 

 

 

Name:

Jin Lou

 

Name:

Brian J.G. Pereira

 

 

 

Title:

Chief Executive Officer

 

Title:

President & Chief Executive Officer

 

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

 

EXHIBIT A

 

PRODUCT SPECIFICATIONS AND ACCEPTANCE TESTS

 

Product delivered to 3SBio will meet the following specifications:

 

Specification for Ferumoxytol Drug Product

 

[***]

 

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

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

A-1

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