Exhibit 10.8

CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF
THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY
FILED WITH THE COMMISSION.***
 

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Table of contents

Clause heading and number Page number

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1.
DEFINITIONS AND INTERPRETATIONS
4
     
2.
COMMENCEMENT AND TERM
7
     
3.
THE SERVICES
7
     
4.
APPLICATION OF TERMS
8
     
5.
THE SUPPLIER’S REPRESENTATIVE
8
     
6.
THE CLIENT’S REPRESENTATIVE
9
     
7.
GOVERNANCE
9
     
8.
REVIEW MEETINGS
10
     
9.
WARRANTIES AND LIABILITY
10
     
10.
PRICE
10
     
11.
SALES TAX
11
     
12.
PAYMENT
11
     
13.
DATA OWNERSHIP AND ACCESS
11
     
14.
INFORMATION AND ASSISTANCE
12
     
15.
INTELLECTUAL PROPERTY
12
     
16.
CO-OPERATION AND SECURITY PROCEDURES
13
     
17.
CONFIDENTIALITY
13
     
18.
TERMINATION FOR CAUSE
15
     
19.
TERMINATION WITHOUT CAUSE
15
     
20.
CONSEQUENCES OF TERMINATION
15
     
21.
NON-SOLICITATION
16
     
22.
LIMITATION OF LIABILITY AND INDEMNITY
16
     
23.
CHANGE CONTROL
17
     
24.
INSURANCE
18
     
25.
FORCE MAJEURE
18

 
CONFIDENTIAL TREATMENT

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26.
ASSIGNMENT
18
     
27.
SUB-CONTRACTING TO AFFILIATES
19
     
28.
WAIVER
19
     
29.
ENTIRE AGREEMENT
19
     
30.
NOTICES
19
     
31.
SEVERABILITY
20
     
32.
FURTHER ENDEAVOURS
20
     
33.
COUNTERPARTS
20
     
34.
NO PARTNERSHIP/AGENCY
20
     
35.
CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
20
     
36.
PARENT GUARANTEE
20
     
37.
LAW
21
     
SIGNATURE PAGE
22
   
SCHEDULE 1
24
   
The Services
24
   
SCHEDULE 2
42
   
GMP AGREEMENT
42
   
SCHEDULE 4
57
   
LIST OF BOUGHT IN PRODUCTS
59
   
SCHEDULE 5
58
   
LIST OF MANUFACTURED PRODUCTS
58
   
SCHEDULE 6
59
   
LIST OF RA LICENCES
60
   
SCHEDULE 7
62
   
EXAMPLE SLA
63

 
 
CONFIDENTIAL TREATMENT

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CONFORMED COPY
 

DATED 25 AUGUST 2005

 

(1) CELLTECH MANUFACTURING SERVICES LIMITED
 

(2) UCB PHARMA LIMITED

and

(3) INYX INC

 

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LONG TERM SERVICES AGREEMENT
 

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[beachcroft-logo.jpg]
 
100 Fetter Lane
London EC4A 1BN
 
Tel: 020-7242 1011 • Fax: 020-7894 6520
 
 
CONFIDENTIAL TREATMENT
3

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THIS AGREEMENT is made the 25 day of August 2005
 
BETWEEN:
 

(1)    
CELLTECH MANUFACTURING SERVICES LIMITED registered in England with company
number 4066383 which has its registered office at 208 Bath Road, Slough,
Berkshire SL1 3WE (the “Supplier”);

 

(2)    
UCB PHARMA LIMITED registered in England with company number 00209905 which has
its registered office at 208 Bath Road, Slough, Berkshire SL1 3WE (the
“Client”); and

 

(3)    
INYX, INC, a corporation organised under the laws of Nevada whose principal
office is at 825 Third Avenue, 40th Floor, New York, United States (“Parent
Guarantor”).

 
WHEREAS:
 

(A)    
The Supplier has been selected by the Client and the Supplier has agreed to
provide the services set out in Schedule 1 under the terms of this agreement
(“the Agreement”).

 
NOW IT IS HEREBY AGREED as follows:
 

1.    
DEFINITIONS AND INTERPRETATIONS

 

1.1   
In this Agreement (except where the context otherwise requires) the words and
expressions shall have the following meanings:

 

 
“Affiliates”
means in respect of each party any company which at the relevant time is a
subsidiary of that party’s holding company or any subsidiary of such a
subsidiary, and where such party is a “subsidiary” of its holding company if
that company: (a) holds a majority of the voting rights in it; (b) is a member
of it and has the right to appoint or remove a majority of its board of
directors; or (c) is a member of it and controls alone, pursuant to an agreement
with other shareholders or members, a majority of the voting rights in it;
 
 
“Bought in Product”
 
means the bought in products listed at Schedule 3 to which certain Services
apply;
 
 
“Business Day”
 
means a day other than Saturday, Sunday and public holidays in England and Wales
when clearing banks are open for business;
 
 
“Client Data”
 
means all data, databases, information, graphics, text or other materials in any
electronic or tangible medium which are generated by the Supplier or Client
(including, for the avoidance of doubt, customer master data, product master
data (BOM routing-costing sheet), transactional data
(stock-reception-shipments-production plans - production orders - shipment),
exclusively in respect of the Services provided to the Client under this
Agreement;
 

 
CONFIDENTIAL TREATMENT
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“Client’s Representative”
 
means the representative of the Client as appointed and with the authority
specified in cause 6 and named in respect of each Service in Schedule 1;
 
 
“CMC”
 
means Control Manufacturing Chemical;
 
 
“Completion Date”
 
means the Completion Date as defined in the Sale and Purchase Agreement;
 
 
“Confidential Information”
 
has the meaning set out in Clause 17.1.1;
 
 
“Expiry Date”
 
means the fifth anniversary of the Completion Date unless the agreement is
extended in accordance with Clause 2.2;
 
 
“Force Majeure”
 
means circumstances beyond the reasonable control of the Supplier including
without limitation, acts of God, governmental actions, war or national
emergency, acts of terrorism, protests, riot, civil commotion, fire, explosion,
flood, epidemic, or restraints or delays affecting carriers or inability or
delay in obtaining supplies of adequate or suitable material;
 
 
“GMP”
 
means, as relevant to the Bought in Product, the principles and guidelines of
good manufacturing practice as contained in either directive 2001/83/EC
(medicinal products for human use) or directive 91/412/EEC (medicinal products
for veterinary use), as such principles and guidelines are interpreted and
expanded in “The Rules Governing Medicinal Products in the European Community,
Volume IV. Good Manufacturing Practice for Medicinal Products”, together with
those rules and guidelines contained in the Orange Book;
 
 
“GMP Agreement”
 
means the agreement between the parties governing the GMP principles to be
respected in relation to the Bought in Product and setting out or otherwise
identifying the specifications for and technical terms and conditions for the
assembly of the Bought in Products and complying with those rules and guidelines
contained in the Orange Book as set out in Schedule 2;
 
 
“Intellectual Property”
 
means copyright, patents, trademarks, service marks, database rights, design
rights (whether registered or unregistered) and all other similar proprietary
rights as may exist anywhere in the world;
 
 
“Management Fee”
 
means the annual fee of *** (subject to adjustment under Clause 10) payable to
the Supplier by the Client for the Services;
 
 
“Manufactured Goods”
 
means the manufactured goods listed at Schedule 4;
 

 
CONFIDENTIAL TREATMENT
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“Orange Book”
 
means the publication “Rules and Guidance for Pharmaceutical Manufacturers and
Distributors 2002” published by the Medicines and Healthcare Products Regulatory
Agency including any subsequent edition thereof, as such publication might be
amended or reissued from time to time;
 
 
“Premises”
 
means all premises at which the Client or the Supplier, as the case may be,
requires the use of Services as at the Completion Date;
 
 
“Price”
 
has the meaning given to it in Clause 10;
 
 
“Purchased Materials”
 
means active ingredients and components consisting of Client own finished
products which are manufactured, assembled or managed by Supplier;
 
 
“Purchaser”
means INYX Europe Limited, a company registered in England whose registered
office is at 6 Seymour Court, Manor Park, Runcorn, Cheshire WA7 1SY;
 
 
“Purchaser’s Group”
the Purchaser and any subsidiary or holding company of the Purchaser or of any
holding company or subsidiary of such holding company or subsidiary;
 
 
“Sale and Purchase Agreement”
means the agreement for the sale and purchase of the entire issued share capital
of Supplier between Client, Purchaser and the Parent Guarantor dated August
2005;
 
 
“Sales Tax”
 
means any sales, purchase or turnover tax as may be applicable in any relevant
jurisdiction, including without limitation value added tax chargeable under or
pursuant to the EC Sixth Directive (77/388/EEC);
 
 
“Services”
 
means the services set out in Schedule 1 and “Service” means any one of them
(including but not limited to the specified services relating to the Bought In
Products and the Purchased Materials);
 
 
“SKU”
 
means stock keeping unit;
 
 
“Supplier Data”
 
means all data, databases, information, graphics, text or other materials in any
electronic or tangible medium owned and controlled by the Supplier and which are
not exclusively related to the provision of the Services to the Client under
this Agreement;
 
“The Supplier’s Representative”
 
means the representative of the Supplier as appointed and with the authority
specified in Clause 5 and named in respect of each relevant Service in Schedule
1;
 

 
CONFIDENTIAL TREATMENT
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“Term”
 
means the period of this Agreement as set out in Clause 2; and
 
 
“Year”
 
means any calendar year during the Term commencing on the Completion Date and
each anniversary thereafter.
 

 

1.2   
In this Agreement, unless the context otherwise requires:

 

1.2.1    
references to this Agreement include its Recitals and the Schedules;

 

1.2.2    
references to Clauses, Sub-clauses and Schedules are to the clauses, sub-clauses
of the appendix and schedules to this Agreement, as amended in accordance with
this Agreement;

 

1.2.3    
the Clause and Schedule headings are for convenience only and shall not affect
the interpretation of this Agreement;

 

1.2.4    
words implying the singular include the plural and vice versa and words implying
a gender include every gender; and

 

1.2.5    
references to a person include an individual, firm, company, corporation,
unincorporated body of people, or any agency of the above.

 

2.    
COMMENCEMENT AND TERM

 

2.1   
This Agreement shall commence on the Completion Date on condition that the SPA
is completed. If for any reason the Completion Date does not occur and the SPA
does not complete, this Agreement shall terminate with immediate effect with no
liability for any party in respect of any breach including future breach.

 

2.2   
Subject to earlier termination in accordance with Clauses 2.1, 18 and 19, or
extension in accordance with Clause 2.3, this Agreement will continue in force
until the Expiry Date.

 

2.3   
The parties may by agreement in writing extend the Term by up to a further year
(thereby changing the Expiry Date) at any time by the Client giving the Supplier
notice at least six (6) months prior to the current Expiry Date, and the
Supplier shall confirm its acceptance or refusal at least five (5) months prior
to the current Expiry Date.

 

3.    
THE SERVICES 

 

3.1   
In consideration of the Management Fee the Supplier shall provide the Client
with the Services as fully set out in Schedule 1 in accordance with the terms of
this Agreement.

 

3.2   
From time to time the Client may request services other than the Services from
the Supplier and the Supplier may supply such other services on terms to be
agreed between the parties.

 

3.3   
The Services in respect of Bought In Products will be provided in accordance
with the GMP Agreement as annexed at Schedule 2.

 

3.4   
Subject to Clauses 26 and 27 it is understood and agreed that the Supplier may
use third parties to provide the respective Services with the consent of Client
(such consent not to be unreasonably withheld or delayed) but the Supplier shall
be and shall remain entirely responsible for the conduct of such third parties
and the provision of such Services.

 
CONFIDENTIAL TREATMENT
7

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3.5   
In the event of any material failure by the Supplier to provide the Services in
accordance with the terms and conditions of this Agreement, the Supplier shall:

 
3.5.1    
as soon as is reasonably practicable, notify the Client of such failure by
written notice and the Supplier shall use reasonable endeavours to rectify the
failure including applying reasonable additional resources to provide the
Services in accordance with this Agreement; and

 

3.5.2    
implement reasonable procedures necessary to prevent the recurrence of such
failure.

 
If the failure is not rectified within 15 (fifteen) Business Days of the notice
referred to in paragraph 3.5.1 above, the Client may elect to:
 

3.5.3    
treat such failure as a dispute which shall be dealt with by the procedure set
out in Clause 7; or

 

3.5.4    
give notice to the Supplier in accordance with Clause 18.1.

 

3.6   
The Client and the Supplier acknowledge that the Services to be provided or made
available under this Agreement may require amendment or modification from time
to time. If the Services need amending or modifying, the Client and the Supplier
shall follow the change control procedure in accordance with Clause 23.

 

4.    
APPLICATION OF TERMS

 

4.1   
Subject to any variation under Clause 4.2, the terms and conditions set out in
this Agreement shall govern the contract between the Supplier and the Client for
the provision of Services, including to the exclusion of all other terms and
conditions, any oral or written quotation, purchase order, acceptance or
acknowledgement of an order by the Client, any specification not set out in this
Agreement or any other document (whether or not referred to in this Agreement)
or any purported attempt by the Supplier to impose or incorporate its own terms
and conditions.

 

4.2   
The terms and conditions set out in this Agreement apply to the provision of all
Services by the Supplier to the Client and any variation to these conditions and
any representations about the Services shall have no effect unless expressly
agreed in writing and signed by both the Supplier’s Representative and the
Client’s Representative.

 

5.    
THE SUPPLIER’S REPRESENTATIVE

 

5.1   
The Supplier shall appoint a Supplier’s Representative with effect from the
Completion Date in respect of each Service as set out in Schedule 1. Any notice,
information or communication given or made to the Supplier Representative shall
be deemed to have been given or made to the Supplier. The Supplier shall ensure
that the Supplier’s Representative, or a competent deputy duly authorised to act
on the Supplier’s behalf, is available for consultation with the Supplier at all
times.

 

5.2   
The Supplier’s Representative at the Completion Date shall be the person stated
in Schedule 1 as being the Supplier’s Representative. The Supplier shall
promptly notify the Client of any subsequent replacement appointment and the
address and telephone number of the replacement Supplier’s Representative.

 

5.3   
Until notice of a subsequent replacement appointment shall have been given by
the Supplier, the Client shall be entitled to treat as the Supplier’s
Representative the last person identified as such to the Client by the Supplier
in accordance with this Agreement.

 
CONFIDENTIAL TREATMENT
8

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6.    
THE CLIENT’S REPRESENTATIVE

 

6.1   
The Client shall appoint a Client’s Representative with effect from the
Completion Date in respect of each Service as set out in Schedule 1. Any notice,
information or communication given or made to the Client’s Representative shall
be deemed to have been given or made to the Client. The Client shall ensure that
the Client’s Representative, or a competent deputy duly authorised to act on the
Client’s behalf, is available for consultation with the Supplier at all times.

 

6.2   
The Client’s Representative at the Completion Date shall be the person stated in
Schedule 1 as being the Client’s Representative. The Client shall promptly
notify the Supplier of any subsequent replacement appointment and the address
and telephone number of the replacement Client’s Representative.

 

6.3   
Until notice of a subsequent replacement appointment shall have been given by
the Client, the Supplier shall be entitled to treat as Client’s Representative
the last person identified as such to the Supplier by the Client in accordance
with this Agreement.

 

7.    
GOVERNANCE

 

7.1   
The governance of this contract will be undertaken between the parties as
follows:

 

7.1.1    
Operational issues will initially be dealt with at operational level by the
operational staff.

 

7.1.2    
In the case of any dispute between operational staff, the matter will be
notified by the operational operating staff in writing to the Client’s
Representative and Supplier’s Representative. The Client’s Representative and
Supplier’s Representative will act in good faith to resolve the dispute for
fifteen (15) Business Days from the date that the Client’s Representative and
Supplier’s Representative received such written notice.

 

7.1.3    
In undertaking the negotiations specified in paragraph 7.1.2 above, the Client
Representative and Supplier Representative will have the capacity to amend this
Agreement in accordance with the terms of this Agreement in terms of new or
revised products, inventory policies and service level agreements with
Affiliates.

 

7.1.4    
If or to the extent that the matter is not resolved by the Client’s
Representative and the Supplier’s Representative in accordance with paragraph
7.1.2, above the matter will be referred to T Kelly, Global Manufacturing
Manager for the Client and VP Global Sales & Marketing for the Supplier who will
aim to resolve the matter in good faith for a further 15 (fifteen) Business
Days.

 

7.2   
If the matter remains unresolved after 15 (fifteen) Business Days from the date
that it was notified to the persons specified in Clause 7.1.4, above the dispute
will be submitted to an Independent Arbitrator for determination and, in the
absence of manifest error, his determination shall be conclusive and binding on
the parties. The proper charges and disbursements of the Independent Arbitrator
shall be paid and borne on each occasion by the parties concerned in such
proportions as the Independent Arbitrator may in his absolute discretion
consider fair and reasonable.

   

  For the purposes of this Clause “Independent Arbitrator” means an industry
expert independent of the parties who has specialised in arbitration and
mediation practice for at least 10 years and who shall be appointed by agreement
between the relevant parties.

 
CONFIDENTIAL TREATMENT
9

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8.    
REVIEW MEETINGS

 

8.1   
The Supplier’s Representative and the Client’s Representative shall meet
regularly (and at least once every two (2) months) in accordance with a
timetable to be agreed between them to review the provision of the Services.
They will also meet twice a year specifically to discuss the policy-related
subjects including, but not limited to, performance of suppliers, stock policy
and coverage strategy.

 

9.    
WARRANTIES AND LIABILITY

 

9.1   
The Supplier warrants that (subject to the other provisions of this Agreement)
it will use reasonable skill and care in providing the Services.

 

9.2   
In the event that any of the Client’s customers (including Affiliates) finds
itself in an out-of-stock situation for any Bought In Product for more than
three weeks as a result of the breach of any terms of this agreement by the
Supplier, the Supplier shall pay the Client an amount equal to the Client’s
gross profit for the period where such out-of-stock situation continues to
exist. The gross profit for these purposes will be calculated on the basis of
the forecasted net sales minus the cost of gross sales for the Bought In Product
concerned for that customer. For the avoidance of doubt, the Supplier shall not
be liable for an out-of-stock situation resulting from lack of availability of
any Bought In Product or Purchased Materials unless such out-of-stock situation
is a result of the breach of any terms of this Agreement by the Supplier
including the Supplier providing unreasonable forecasts or failing to manage the
chain supply.

 

9.3   
Where the Supplier fails to provide the Services as a result of the breach of
any terms of this Agreement by the Supplier and such failure directly results in
a loss of customers for the Client, the Supplier shall compensate the Client for
its loss in an amount equal to the Client’s gross profit on a budgeted basis for
such customers for the following twelve (12) months.

 

9.4   
Nothing in this Clause 9 shall in any way reduce or affect each party’s general
duty to mitigate loss suffered by it.

 

10.   
PRICE

 

10.1   
The Price shall be the Management Fee and any other amount agreed between the
parties in connection with any other services provided by the Supplier to the
Client in accordance with Clause 3.2 and, unless otherwise agreed in writing by
both the Supplier and the Client, the Price shall be exclusive of Value Added
Tax but inclusive of all other charges.

 

10.2   
If the Term of the Agreement is extended in accordance with Clause 2.2, the
Management Fee will be subject to renegotiation between the parties on request
by the Supplier prior to the commencement of such extended term.

 

10.3    The Supplier may review the Price annually and enter into negotiations
with the Client to increase the Price to take account of any increased cost of
Manufactured Goods, Bought In Products, Purchased Materials or raw material
costs provided that such review shall not occur prior to 24 (twenty four) months
after the Completion Date and thereafter shall not occur more than one time
during any period of 12 (twelve) months during the term of this Agreement. If
the parties are unable to agree an increased price, the Price shall be increased
by the amount of the increase from the date of the previous price review (or in
the case of the first price review, the Completion Date) of the Prices Indices
of the United Kingdom Output for Products of Manufacturing Industries other than
food beverages and tobacco manufacturing industries (commonly referred to as the
“Manufacturers (Other) Index”) published by the Office of National Statistics or
any successor replacement Index. Any change shall be supported by a detailed
costs breakdown which shall include supplier documentation in respect of any
material increase.

 
CONFIDENTIAL TREATMENT
10

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11.   
SALES TAX

 

11.1   
If any Sales Tax is properly chargeable in respect of any supply made by a party
under this Agreement, the other party shall pay the amount of that Sales Tax
against issue of a proper Sales Tax invoice by the invoicing party.

 

11.2   
Without limiting Clause 11.1 each amount stated as payable by a party under this
Agreement is exclusive of Sales Tax (if any) and is to be construed as a
reference to that amount plus any Sales Tax in respect of it.

 

12.   
PAYMENT

 

12.1   
The Supplier will invoice the Client monthly in arrears in respect of the Price.

 

12.2   
Invoices for goods and carriage in respect of Bought in Products and Purchased
Materials will be sent directly to the Client by the relevant third party.

 

12.3   
The Client shall pay all invoices due under the Agreement within thirty (30)
days of the date of each invoice.

 

12.4   
Subject to sub-clauses 12.5 and 12.6 the Client shall make all payments due
under this Agreement without any deduction whether by way of set-off,
counterclaim, discount or abatement or otherwise unless the Client has a valid
court order requiring an amount equal to such deduction to be paid by the
Supplier to the Client.

 

12.5   
If any part of the Price is subject to a bona fide dispute between the Supplier
and the Client, the following provisions shall apply:

 

12.5.1    
each party shall notify the other party within five (5) Business Days after the
date on which the Price is due of any disputed items and shall describe in
reasonable detail its reasons for disputing each item; and

 

12.5.2    
within five (5) Business Days after the other party has received the notice, the
parties shall seek to reach settlement on the items that are the subject of the
dispute in accordance with Clause 7.

 

12.6   
If the Client fails to pay the Supplier any sum due pursuant to the Agreement,
including sums subject to a bona fide dispute once such dispute is resolved and
if it is determined that the Client should have paid such sum, the Client will
be liable to pay interest to the Supplier on such sum from the due date for
payment at the annual rate of two per cent. above the base lending rate from
time to time of European Central Bank accruing on a daily basis until payment is
made whether before or after any judgment. The Supplier reserves the right to
claim interest under the Late Payment of Commercial Debts (Interest) Act 1998.

 

13.   
DATA OWNERSHIP AND ACCESS

 

13.1   
The Client acknowledges that all rights in the Supplier Data vest in the
Supplier or its licensors. If, at any time and from time to time, through the
performance of the Services, the Client is deemed to be the first owner of any
database or other proprietary right in any of the Supplier Data, the Client
shall immediately assign those rights in writing to the Supplier upon the
Supplier’s request and at the Supplier’s cost. To the extent that the Client
requires the right to use any Supplier Data to perform its obligations under
this Agreement, the Supplier hereby grants to the Client a royalty free and
irrevocable licence to use the Supplier data for the purposes of performing its
obligations under this Agreement.

 
CONFIDENTIAL TREATMENT
11

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13.2   
The Supplier acknowledges that all rights in the Client Data vest in the Client
or its licensors. If, at any time and from time to time, through the performance
of the Services, the Supplier is deemed to be the first owner of any database or
other proprietary right in any of the Client Data, the Supplier shall
immediately assign those rights in writing to the Supplier upon the Client’s
request and at the Client’s cost. To the extent that Supplier requires the right
to use any Client Data to perform its obligations under this Agreement, the
Client hereby grants to the Supplier a royalty-free and irrevocable licence to
use the Client Data for the purpose of performing its obligations under this
Agreement.

 

13.3   
Neither party shall store, reproduce, disclose, adapt, distribute or otherwise
use the other party’s data except where necessary for the performance of its
obligations under this Agreement, or otherwise without the prior written consent
of the other party.

 

13.4   
The Client shall not delete, remove or alter any copyright, trade mark or
database right notices contained within or relating to any Supplier Data.

 

13.5   
The Supplier shall not delete, remove or alter any copyright, trade mark or
database right notices contained within or relating to any Client Data.

 

14.   
INFORMATION AND ASSISTANCE

 

14.1   
Each party shall use all reasonable endeavours to provide the other party with
all software, documents, data, manuals and other materials in any medium and
format which are in its possession or control at the Completion Date and which
the other party requires in order to enable it to make proper use of the
Services, subject always to prior contract, copyright or confidentiality
obligations owed to third parties.

 

14.2   
If the Client’s unreasonable failure to furnish any information set out in
Clauses 14.1 or 16 unreasonable refusal or to allow access set out in Clause 16
renders the Supplier’s ability to provide the relevant Service unreasonably
difficult, the Supplier may withhold its provision of such Service to the Client
for so long as, and to the extent that, such unreasonable failure by the Client
has such effect, without liability on the part of the Supplier.

 

15.   
INTELLECTUAL PROPERTY

 

15.1   
Where, for the proper enjoyment of the Services as envisaged by the parties
under this Agreement, it is necessary for the Client to use any Intellectual
Property which is owned by the Supplier or one of the Supplier’s suppliers or
sub-contractors, the Supplier shall grant to the Client, or shall use reasonable
endeavours to procure that the Client is granted by such supplier or
sub-contractor, (without charge to the Client and for the exclusive benefit of
the Client) a non-exclusive royalty-free licence (excluding the right to
sub-licence) to use, adapt, maintain and support such Intellectual Property for
the purpose of the proper enjoyment of the Services as envisaged by this
Agreement during the Term.

 

15.2   
Where in connection with the provision of the Services the Supplier reasonably
requires the use of any Intellectual Property or any of the materials specified
in Clause 15.4 below owned by the Client, or one of the Client’s suppliers or
sub-contractors, the Client shall grant to the Supplier, or shall use reasonable
endeavours to procure that the Supplier is granted by such supplier or
sub-contractor, (without charge to the Supplier and for the exclusive benefit of
the Supplier) a non-exclusive royalty free licence, with the right to
sub-licence to use, adapt, maintain and support such Intellectual Property for
use in connection with the provision of the Services during the Term.

 
CONFIDENTIAL TREATMENT
12

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15.3   
Neither the Client nor the Supplier shall by virtue of this Agreement derive any
rights, or any right of use or access to any Intellectual Property used or owned
by the other party other than those rights of use expressly stated in this
Agreement.

 

15.4   
Where the Supplier creates any work, design, data, invention or improvement
specifically for the Client in connection with the provision of the Services or
its obligations under this Agreement, ownership of such works, designs, data,
inventions and improvements including all Intellectual Property rights therein
shall vest in the Client upon their creation and any right, title or interest
which may be vested in the Supplier is hereby assigned to the Client with the
intent that all such Intellectual Property rights shall be the sole and absolute
property of the Client.

 

16.   
CO-OPERATION AND SECURITY PROCEDURES

 

16.1   
During the continuance of this Agreement, each party shall:

 

16.1.1    
subject to its security procedures, allow the other party and its authorised
personnel access to the Premises at all times as is reasonably required by the
other party to enable it to comply with its obligations under this Agreement.
The Client’s Representative and Supplier’s Representative shall have the right
to refuse to admit to, or order the removal from, the Premises any person
employed by or acting on behalf of the other party who, in his reasonable
opinion, is not a fit and proper person to be at the Premises. This shall not
relieve the either party of its obligations under this Agreement; and

 

16.1.2    
provide the other party with any information and facilities as the other party
may reasonably request to enable it to perform its obligations under this
Agreement.

 

16.2   
Each party shall ensure that its employees, agents and subcontractors shall,
whilst at the Premises, cause as little interference with, and inconvenience to,
the business of the other party as reasonably possible.

 

16.3   
Each party acknowledges that it has been supplied with a copy of the other
party’s rules regarding access to the Premises and automated systems, security,
and health and safety. Each party agrees to comply with these rules, and any
additional rules made known to it from time to time by the other party together
with all applicable statutory rules and regulations regarding these matters.
Each party will ensure that its employees, agents and subcontractors engaged in
the provision of the Services also comply with these rules and regulations.

 

17.   
CONFIDENTIALITY

 

17.1   
Each party (the “Recipient”) agrees:

 

17.1.1    
to treat as confidential all information obtained from the other party (the
“Disclosing Party”) in any medium or format (whether marked “confidential” or
not) which the Recipient receives from the Disclosing Party either directly or
from any person, firm, company or organisation associated with the Disclosing
Party, which concerns the business, operations or customers of any or all of the
Disclosing Party and its Affiliates (“Confidential Information”);

 

17.1.2    
not to use any Confidential Information for its own purposes or to obtain a
commercial, trading, investment, financial or other advantage but shall only use
such Confidential Information for the sole purpose of performing its obligations
under this Agreement;

 
CONFIDENTIAL TREATMENT
13

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17.1.3    
not to disclose or reveal any Confidential Information to any other person other
than its directors, officers, employees or professional advisers who have a need
to know the same in connection with the provision of the Services and/or this
Agreement (and then only to the extent so necessary) provided always that it
shall be directly responsible to the Disclosing Party for any breach of the
confidentiality undertakings set out in this Clause 17 by any such person;

 

17.1.4    
before disclosing any Confidential Information to any person pursuant to Clause
17.1.3 to ensure such person has provided the Disclosing Party with a written
undertaking agreeing to be bound by the provisions of this Clause 17 in the same
manner as it is or such similar duty of confidentiality;

 

17.1.5    
upon termination of this Agreement, in any event, at any time on written request
from the Disclosing Party to return to the Disclosing Party the Confidential
Information and/or of all notes and memoranda prepared by it in relation to any
of the Confidential Information without keeping any copies, extracts or other
reproductions thereof and to produce a declaration signed by a duly authorised
officer certifying that all such records and/or documents of any kind have been
returned; and

 

17.1.6    
promptly to notify the Disclosing Party if any Confidential Information is
required to be disclosed by it by reason of law or government or other
regulation and co-operate fully with the Disclosing Party regarding the manner
of such disclosure so as to keep such Confidential Information confidential.

 

17.2   
This Clause 17 shall not apply to any Confidential Information which either
party can show (as evidenced by written record predating such disclosure):

 

17.2.1    
was known to it before such information was imparted to it by the Disclosing
Party or any of its subsidiaries, holding companies or subsidiaries of it
holding companies; or

 

17.2.2    
at the time of the disclosure is in or subsequently comes into the public domain
(other than by an act or omission or breach by it of its obligations herein); or

 

17.2.3    
is lawfully received by it without restriction on disclosure or use from a third
party having the lawful right to do so; or

 

17.2.4    
is developed by it without access to or use or knowledge of the Confidential
Information imparted by the Disclosing Party or any of its subsidiaries, holding
companies or subsidiaries of it holding companies, to it; or

 

17.2.5    
is required to be disclosed by law, regulations, statute, judgment or by any
supervisory or regulatory body.

 

17.3   
All Confidential Information whether in documentary or electronic format
provided by the Client to the Supplier under this Agreement shall remain the
property of the Client and may be used by the Supplier for the purpose of
providing Services  under this Agreement but not otherwise.

 

17.4   
All Confidential Information whether in documentary or electronic format
provided by the Supplier to the Client under this Agreement shall remain the
property of the Supplier and may be used by the Client for the purpose of
providing Services under this Agreement but not otherwise.

 
CONFIDENTIAL TREATMENT
14

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18.   
TERMINATION FOR CAUSE

 
This Agreement may be terminated for cause in whole by either party in the
following circumstances, with immediate effect, from the date of service on the
other of written notice if:
 

18.1   
the other party is in breach of any material obligation under this Agreement
which for the avoidance of doubt includes a failure to provide the Services as
required in accordance with the key performance indicators in Schedule 1 other
than in accordance with the terms of this Agreement and, if the breach is
capable of remedy, that party has failed to remedy such breach within fifteen
(15) Business Days of receipt of notice from the other party to do so;

 

18.2   
the other party being a company is unable to pay its debts or becomes insolvent
or a resolution is passed or an order is made for the winding up or dissolution
of the other party (otherwise than for the purpose of solvent amalgamation or
reconstruction) or the other becomes subject to an administration order or a
receiver or administrative receiver or similar officer is appointed over or an
encumbrancer takes possession of any of the other’s property or the Client’s
equipment or the other party enters into or proposes any composition or
arrangement with its creditors generally or anything analogous to the foregoing
occurs in any applicable jurisdiction; and

 

18.3   
the other party ceases or threatens to cease to carry on business in the United
Kingdom.

 

19.   
TERMINATION WITHOUT CAUSE

 

19.1   
Subject to Clause 19.2 below, either party may terminate this Agreement at any
time by giving not less than twelve (12) months’ written notice to the other
party such notice to expire not earlier than the fifth (5th) anniversary of the
Completion Date.

   

19.2    The Client shall have the right to terminate the Services in connection
with the following products at any time by giving not less than 6 (six) months’
written notice to the Supplier:

 

19.2.1    
***;

   

19.2.2     ***; and

   

19.2.3     ***.

  

20.   
CONSEQUENCES OF TERMINATION

 

20.1   
Expiry or earlier termination of this Agreement for whatever reason shall not
affect any rights or obligations of either party which have arisen prior to the
date of such expiry or earlier termination.

 

20.2   
Upon expiry or earlier termination of this Agreement for whatever reason the
Client shall immediately pay to the Supplier all arrears of the Price determined
on a pro-rata basis by reference to the number of months the Services have been
provided and in respect of any other services which have been provided. 

 

20.3   
Upon termination of this Agreement and subject to any agreement to the contrary,
the Client and the Supplier shall each, at the written request of the other,
surrender up to the party all property of the other which is then in its
possession or control insofar as such property has been made available to it for
the purposes of this Agreement.

 
CONFIDENTIAL TREATMENT
15

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21.   
NON-SOLICITATION

       

  Neither party shall (except with the prior written consent of the other)
during the Term, and for a period of one year thereafter, solicit the services
of any staff of the other party who have been engaged in the provision of the
Services or the management of this Agreement or any significant part thereof
either as principal, agent, employee, independent contractor or any other form
of employment or engagement other than by means of a national advertising
campaign open to all-comers and not specifically targeted at such staff of the
other party.

 

22.   
LIMITATION OF LIABILITY AND INDEMNITY

 

22.1   
Subject to Clause 9, the following provisions set out the entire financial
liability of the Supplier (including any liability for the acts or omissions of
its employees, agents and sub-contractors) to the Client in respect of any
breach of this Agreement.

 

22.2   
For the avoidance of doubt, the Supplier shall have no liability in respect of
any loss or damage arising directly or indirectly as a result of the Supplier
providing the Services in accordance with this Agreement or in accordance with
any specification or formula provided or approved by the Client.

 

22.3   
Notwithstanding any other provision of this Agreement, neither party limits its
liability:

 

22.3.1    
for negligence or fraud or fraudulent misrepresentation by it or its employees
or subcontractors;

 

22.3.2    
for death or personal injury caused by its negligence or that of its employees,
agents or subcontractors (as applicable); or

   

22.3.3    
for any sums claimable by way of an account of profits.

 

22.4   
For the avoidance of doubt, the Client shall have no liability in respect of any
loss or damage arising directly or indirectly as a result of the Client carrying
out its obligations in accordance with the terms of this Agreement.

 

22.5   
Except as provided in Clause 9, neither party shall in any circumstances have
any liability to the other in respect of consequential or indirect loss.

 

22.6   
The Supplier hereby indemnifies and shall keep indemnified the Client and hold
it harmless against any and all third party claims, actions, judgments, damages,
lawsuits, costs or expenses or professional fees incurred by the Client in
relation to, or arising out of, the Services, resulting from a material breach
of contract by the Supplier.

 

22.7   
The Client hereby indemnifies and shall keep indemnified Supplier and hold it
harmless against any and all third party claims, actions, judgments, damages,
lawsuits, costs or expenses or professional fees brought against suffered or
incurred by the Supplier in relation to, or arising out of, the Services or use
of the Bought in Product, resulting from a material breach of contract by the
Client.

 

22.8   
Subject to Clause 22.4, the total aggregate liability of the Supplier in respect
of any claim under this Agreement shall not exceed:

 

22.8.1    
***;

   

22.8.2     ***; and

   

22.8.3     ***.

 
CONFIDENTIAL TREATMENT
16

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22.9   
Subject to Clause 22.4, the total aggregate liability of Client in respect of
any claim under this Agreement shall not exceed:

 

22.9.1    
***;

   

22.9.2     ***; and

   

22.9.3     ***.

 

22.10   
Each party shall take all reasonable steps to mitigate the loss and damage it
incurs in relation to any claim or action (whether for negligence, breach of
contract, misrepresentation, under any indemnity or otherwise) which it brings
against the other.

 

22.11  
The indemnities given in this Clause 22 shall be subject to:

 

22.11.1    
the indemnified party informing the indemnifying party of the relevant matter as
soon as possible and in any event no later than five (5) Business Days after the
indemnified party has become aware of such event;

 

22.11.2    
the indemnifying party being entitled to conduct the defence of, or otherwise
handle, the relevant matter;

 

22.11.3    
the indemnified party making no admission with respect to such matter and
otherwise doing nothing that prejudices the indemnifying party’s defence or
handling thereof; and

 

22.11.4    
the indemnified party providing the indemnifying party with all reasonable
assistance in such defence or handling of the relevant matter.

 

22.12   
The parties acknowledge and agree that clause 8.8 of the Sale and Purchase
Agreement contains provisions which limit the liability of INYX for a specified
time and in specified circumstances which are a direct result of the temporary
closure of the Sterile Production Unit (as defined therein) prior to Completion
or within a period of 45 days following Completion.

 

23.   
CHANGE CONTROL

 

23.1   
Either party may propose any change to the scope of the Services  by written
notice to the other specifying the proposed change in reasonable detail (“Change
Request”).

 

23.2   
Within fourteen (14) days after sending or receiving a Change Request, the
recipient (“Recipient”) shall provide the other party in writing with a brief
proposal including an approximation of the possible costs, and an overview of
the likely impact upon the provision of the Services.

 

23.3   
The other party will review the Recipient’s proposal and, within seven (7) days
after its receipt, notify the Recipient in writing of its acceptance or
rejection of the proposal.

 

23.4   
Both parties shall act in good faith in relation to Change Requests.

 

23.5   
If any changes are necessary to respond to an emergency, then the affected party
shall notify the other of the need for an urgent change, and the parties shall
use all reasonable endeavours to make the change, taking account of all the
commercial circumstances at the time, and the parties shall then document the
change and retrospectively prepare a change description which the parties shall
agree, acting in good faith.

 
CONFIDENTIAL TREATMENT
17

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23.6   
Except as set out in Clause 23.5, neither party shall have any obligation to
commence work in connection with any change to the scope of the Services until
the relevant Change Request has been accepted in writing by the other party.

 

24.   
INSURANCE

 
Each party shall maintain for the duration of this Agreement insurance in an
amount reasonably adequate to cover its obligations hereunder, and, upon
reasonable request, each party will provide to the other party a certificate of
insurance showing that such insurance is in place.
 

25.   
FORCE MAJEURE

 

25.1   
If either party is affected by Force Majeure it shall forthwith notify the other
party of the nature and extent thereof.

 

25.2   
Each party shall be deemed not to be in breach of this Agreement, nor otherwise
be liable to the other by reason of any delay in performance, or
non-performance, of any of its obligations hereunder to the extent that such
delay or non-performance is due to any Force Majeure of which it has notified
the other party and the time for performance of that obligation shall be
extended accordingly. The affected party shall use its reasonable endeavours to
limit the effect of that delay or non-performance on the other party.

 

25.3   
If the Force Majeure in question prevails for a continuous period in excess of
three (3) months, the parties shall enter into bona fide discussions with a view
to agreeing upon such alternative arrangements as may be fair and reasonable. If
the parties cannot agree such alternative arrangements then either party shall
be entitled to terminate this Agreement immediately by written notice.

 

26.   
ASSIGNMENT

 

26.1   
The Supplier may assign the benefit of this Agreement to any other member of the
Purchaser’s Group or to any lender or holder of debt securities issued by any
member of the Purchaser’s Group for the time being or any agent of such lender
or holder and if it does so:

 

26.1.1    
the assignee may enforce the obligations on the part of the Client under this
Agreement as if it had been named in this Agreement or therein as the Supplier;

 

26.1.2    
as between the Client and the Supplier, the Client may nevertheless enforce this
Agreement against the Supplier as if the assignment had not occurred;

 

26.1.3    
the assignment shall not in any way operate so as to increase the liability of
the Supplier or the Client; and

 

26.1.4    
the assignee will not be liable or obligated in any way by reason of such
assignment or exercising the rights so assigned.

 
26.2   
A liquidator or administrator, or any receiver or other person or entity
entitled to enforce any security or rights under this Agreement may enter into
any other assignment or transfer of any such rights, provided that such
assignment shall not in any way operate so as to increase the liability of the
Client or the Supplier.

 
CONFIDENTIAL TREATMENT
18

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26.3  
Except as permitted by this Clause 26, none of the rights or obligations under
this Agreement shall be assigned or transferred by either party without the
prior written consent of the other.

 

27.   
SUB-CONTRACTING TO AFFILIATES

 
In providing the Services, the Supplier may sub-contract the whole or any part
or parts of the Services to its Affiliates with the prior written consent of the
Client, such consent not to be unreasonably withheld or delayed. Notwithstanding
the foregoing, nothing herein shall prohibit the Supplier from utilising the
services of any third parties customarily utilised in connection with the
provision of the Services it provides, or which are otherwise used by it in the
ordinary course of business for performance of similar functions, but the
Supplier shall be responsible for the performance of such third parties.
 

28.   
WAIVER

 
Any failure of or delay by either party in relation to the exercise of its
rights under this Agreement shall not constitute a waiver of such rights and any
waiver in respect of one act or omission shall not operate as a waiver in
respect of any other or future acts or omissions. No provision may be waived
except in writing and signed by a duly authorised representative of each of the
parties.
 

29.   
ENTIRE AGREEMENT

 
This Agreement and the documents referred to in it constitute the entire
understanding between the parties in relation to its subject matter. Any
amendment to this Agreement shall not be effective unless in writing and signed
by a duly authorised representative of each of the parties.
 

30.   
NOTICES

 

30.1   
Any notice or other document to be served under this agreement may be delivered
or sent by post or facsimile process to the party to be served at its address
set out below:

   

 
to the Client at:
208 Bath Road Slough, Berkshire SL1 3WE
Marked for attention of Company Secretary
 
to the Supplier at:
6 Seymour Court, Manor Park, Runcorn, Cheshire WA7 1SY
Marked for attention of Jack Kachkar,
 
or at any other address or facsimile number or to any other addressee as it may
have notified to the other party in accordance with this Clause 30. Any notice
or other document sent by post shall be sent by prepaid first class recorded
delivery post (if within the United Kingdom) or by prepaid airmail (if
elsewhere).

 

30.2   
In proving service of a notice or document it shall be sufficient to prove that
delivery was made or that the envelope containing the notice or document was
properly addressed and posted (either by prepaid first class recorded delivery
post or by prepaid airmail, as the case may be) or that the facsimile message
was properly addressed and despatched, as the case may be, provided that if the
day of service is not a Business Day or service takes place after 5.p.m. on a
Business Day, then the notice shall be deemed to be served on the following
Business Day.

 
CONFIDENTIAL TREATMENT
19

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31.   
SEVERABILITY

 
If any provision of this Agreement is found by any court, tribunal or
administrative body of competent jurisdiction to be wholly or partly illegal,
invalid, void, voidable, unenforceable or unreasonable it shall, to the extent
of such illegality, invalidity, voidness, voidability, unenforceability or
unreasonableness, be deemed severable and the remaining provisions of the
Agreement and the remainder of such provision shall continue in full force and
effect and will be binding on the parties as if the unenforceable provisions had
never been contained herein. Notwithstanding the foregoing: (i) if any term of
this Agreement is or becomes unenforceable in any jurisdiction, that shall not
affect the legality, validity or enforceability in other jurisdictions of that
or any other provision of this Agreement; and (ii) if any portion of this
Agreement shall be held to be unenforceable but would be enforceable if deleted
in part or reduced in application, such portion shall apply with such deletion
or modification as may be necessary to make it enforceable. In the event of
severance of a provision so fundamental as to prevent the accomplishment of the
purpose of the Agreement, the parties shall promptly commence good faith
negotiations to remedy such invalidity.
 

32.   
FURTHER ENDEAVOURS

 
Each party undertakes, at the request and cost and expense of the other party,
to sign all documents and to do all other acts, which may be necessary to give
full effect to this Agreement.
 

33.   
COUNTERPARTS.

 
This Agreement may be executed in two or more counterparts, each of which shall
be deemed to be an original, but all of which together shall constitute one and
the same instrument.
 

34.   
NO PARTNERSHIP/AGENCY

 
Nothing in this Agreement is intended to or shall operate to create a
partnership or joint venture of any kind between the parties or to authorise
either party to act as agent for the other party and neither party shall have
authority to act in the name or on behalf of or otherwise to bind the other
party in any way (including but not limited to the making of any representations
or warranty the assumption of any obligation or liability and the exercise of
any right or power).
 

35.   
CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

 
Except as expressly stated in this agreement a person who is not a party to this
Agreement may not enforce any of its terms under the Contracts (Rights of Third
Parties) Act 1999.
 

36.   
PARENT GUARANTEE

 

36.1   
The Parent Guarantor, as primary obligor, unconditionally and irrevocably
guarantees, by way of continuing guarantee to the Client, the payment and
performance by the Supplier, when due, of all amounts and obligations under this
Agreement. This guarantee shall remain in full force and effect until all such
amounts and obligations have been irrevocably paid and discharged in full.

   

36.2    The Parent Guarantor’s obligations under this Clause:

 

36.2.1    
constitute direct, primary and unconditional obligations to pay on demand by the
Client any sum which the Supplier is liable to pay under this Agreement and to
perform on demand any obligation of the Supplier under this Agreement without
requiring the Client first to take any steps against the Supplier or any other
person; and

 
CONFIDENTIAL TREATMENT
20

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36.2.2    
shall not be affected by any matter or thing which but for this provision might
operate to affect or prejudice those obligations, including:

 

  (a) any time or indulgence granted to, or composition with, the Supplier or
any other person; or         (b) any amendment of this Agreement; or         (c)
the taking, variation, renewal or release of, or refusal or neglect to perfect
or enforce, any right, remedy or security against the Supplier or any other
person; or         (d) any legal limitation, disability or other circumstance
relating to the Supplier or any unenforceability or invalidity of any obligation
of the Supplier under this Agreement.

 

37.    
LAW

 
This Agreement shall be governed by English law and the parties hereby submit to
the exclusive jurisdiction of the English Courts.
 
IN WITNESS whereof the parties have signed this Agreement the day and year first
above written

CONFIDENTIAL TREATMENT
21

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SIGNATURE PAGE

SIGNED by P G NICHOLLS
for and on behalf of UCB PHARMA LIMITED
 
WITNESS:
Signature MARK GLYN HARDY
Name MARK GLYN HARDY
Address 208 BATH ROAD
SLOUGH
BERKSHIRE
SL1 3WE
Occupation SOLICITOR
(PLEASE COMPLETE IN CAPITALS)
P G NICHOLLS
(Signature)
25 AUGUST 2005
(Date)

 

SIGNED by MARK GLYN HARDY
for and on behalf of
CELLTECH MANUFACTURING SERVICES LIMITED
 
WITNESS:
Signature H S BAINS
Name H S BAINS
Address 208 BATH ROAD
SLOUGH
BERKSHIRE
SL1 3WE
Occupation ACCOUNTANT
(PLEASE COMPLETE IN CAPITALS)
MARK GLYN HARDY
(Signature)
25 AUGUST 2005
(Date)

CONFIDENTIAL TREATMENT
22

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SIGNED by JACK KACHKAR
for and on behalf of INYX, INC.
 
WITNESS:
Signature DOUGLAS BROWN
Name DOUGLAS BROWN
Address STURDY’S
TASTON
OXON OX7 3JL
UK
Occupation BUSINESSMAN
(PLEASE COMPLETE IN CAPITALS)
JACK KACHKAR
(Signature)
25 AUGUST 2005
(Date)

 
CONFIDENTIAL TREATMENT
23

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SCHEDULE 1
 
The Services
 
Supplier will provide full services as set out below (the Services):
 

1.    
PURCHASING

 
Bought in Products: Supplier shall provide the services set out in the
Responsibility Matrix below in respect of the Bought in Products.
 
Manufactured Goods: Supplier shall provide the services set out in the
Responsibility Matrix below in respect of the Manufactured Goods.
 
Supplier will continue to provide a full service in managing the manufacture and
supply of Bought-In Products (BIP) and part BIPs, including the introduction of
any new products, new market presentations or changes in manufacture or supply
source. Client will continue the contractual relationship with BIP and part-BIP
manufacturers.
 
Supplier will purchase and provide materials to part-BIP manufacturers.
Suppliers of Purchased Materials and part-BIP manufacturers will invoice
Supplier directly.
 
Supplier will negotiate all terms including price, contracting and transacting
directly with suppliers for the non-BIP Purchased Materials and take
responsibility for introducing change within the supply base.
 
Client can provide Supplier with initial policies for purchased materials
replenishment and stockholding together with an approved and licensed vendor
list and thereafter key performance indicators can be used to ensure the
operational good purchasing practice and formal biannual meetings can review and
act on supplier performance and risk.
 
Consisting of:-
 

1.1    
Responsibility Matrix

 
Purchasing
Client
Supplier
Purchasing and Procurement Data Maintenance in Gemms, Sage and Manugistics.
 
X
Agree BIP Replenishment Plan Policy
X
 
Purchased Materials Replenishment Plan
 
X
Purchased Materials Inventory Mngt Policy
 
X
Create, Communicate and Expedite Supplier Schedules
 
X
Purchase Order Entry
 
X
Communicate Supplier Forecasts
 
X
Issue approved finished product artwork
X
 
Implement artwork changes through suppliers
 
X
Shipping Documentation and Import / Export Licences
 
X
BIP Vendor Selection
X
 
BIP Price Negotiation
X
 
BIP Supplier Agreements
X
 
Transfer UCB Licenced Purchased Materials Approved Vendor List to Supplier cGMP
X
X
Licenced Purchased Materials Supplier Agreements
 
X
Non-licenced Purchased Materials Vendor Selection
 
X
Non-BIP Supplier Agreements
 
X
New Vendor Qualification
 
X
Supplier Performance Measurement
 
X
Perform Supplier Visits and Audits
 
X
Purchase Price Variance Management
 
X

 
CONFIDENTIAL TREATMENT
24

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1.2    
Description of Services

 
Materials Replenishment
 
In respect of Purchased Material, Supplier will run, interpret and act on the
materials replenishment plan generated by enterprise resource planning software
(Oracle) in accordance with Supplier’s own policy.
 
In respect of Bought-In Products Supplier will run, interpret and act on the
materials replenishment plan generated by enterprise resource planning software
(Manugistics), in accordance with Supplier’s own policy.
 
The materials replenishment process will be strictly subject to Client approved
vendor list (Supplier Status Listing), which will be provided by Client to
Supplier, which will also become the responsibility of Supplier after
divestment.
 
On demand, Supplier will provide the Client with the procurement plan in respect
of Purchased Materials and the procurement plan in respect of Bought-In
Products, for each specifically requested supplier or material SKU in monthly
buckets, for the following 12 months, showing expected receipts and planned
deliveries.
 
Artwork
 
Where a party (the initiator party) requires or requests any changes to be made
to the artwork utilised on or to the validation of any of the Manufactured Goods
or Bought in Products it will give not less than three (3) months’ notice
thereof to the other party. Any costs incurred by the initiator party as a
result of such change shall be borne by it together with the cost of any
packaging materials that are written off as a result of such changes. For the
avoidance of doubt Client shall bear the costs of any changes to such artwork as
a result of or in connection with the sale of Ashton facility.
 
Client will give approved artwork to Supplier. Supplier will take responsibility
for implementing new artwork through suppliers.
 
Any Services for promotional artwork undertaken by Supplier for Client will be
on an ad hoc basis and controlled through Client purchase orders for discrete
jobs.
 
Materials Stockholding
 
In accordance with the supply chain service:
 
The first three (3) months of the Client forecast will be deemed firm with
respect to procuring materials. Client will however underwrite the purchase of
materials with longer lead-times where advance purchase is required to meet
demand and where the suppliers minimum order quantity exceeds demand. Supplier
will provide a list of all materials with a lead-time longer than three (3)
months, these items will be reviewed at a monthly meeting with a view to Client
identifying where these purchases would not be appropriate. Supplier will also
provide a monthly short dated stock report for review at this meeting. Client
will underwrite these materials and will reimburse Supplier should such
materials subsequently become obsolete or exceed their shelf life. On an annual
basis Client and Supplier will review overall product cycle times in order to
agree purchase policies and procedures.
 
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Supplier Resource and Relationship Management
 
For Purchased Materials suppliers, financial and operational transactions
together with contractual relationships will be the responsibility of Supplier
and Purchased Materials are for Supplier’s account. Client may from time to time
and where appropriate underwrite strategically extended purchase commitments
(for example, prolonged campaigns of key active ingredients).
 
Supplier will create supplier schedules and communicate these to third party
suppliers. Supplier will expedite deliveries in order to meet the requirements
of the plan.
 
Supplier will perform visits of key third party suppliers as appropriate to the
needs of the business.
 
Sourcing
 
During the normal course of business, Supplier will conduct price and supply
negotiations with new and existing vendors and once agreed, Supplier will update
Oracle material standard costs, which will be available to Client on request.
 
Either party may request an addition or deletion from the approved vendor list,
such request is not to be unreasonably withheld or delayed. The timescale
expectations for qualification of a new supplier is three (3) months from
agreement of such new supplier’s prices. The change and qualification costs will
be for the account of the party requesting the change. Supplier’s schedule of
rates will be agreed in advance.
 
Supplier will qualify new vendors in a timely manner in order to achieve both
supply and cost improvement targets. Qualification may involve but is not
limited to machine trials, compliance and equivalence statements and eventual
inclusion onto Supplier’s approved vendor list. Once qualified, use of that
supplier’s material shall be at Supplier’s own risk.
 
Supplier will implement and maintain supply agreements with third party
suppliers whenever appropriate and will work with Client in good faith to
achieve an appropriate level of contractual cover.
 
Client will be responsible for sourcing and purchasing from Bought in Product
manufacturers whilst Supplier will be responsible for the procurement and data
maintenance of purchasing and procurement information within the Client Sage and
Manugistics systems.
 
Cost Control and Reduction
 
Supplier and Client will set up on a yearly basis a continuous improvement
programme. The programme will focus on issues agreed between Supplier and Client
that will lead to improvements in cost and service (shorter lead times for
materials or products - improvement of the reliability, responsiveness, quality
and information supply as appropriate).
 
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Every improvement idea will be analysed through a feasibility study in joint
cooperation and will be followed by appropriate financial calculation using Net
present value (NPV) in to evaluate the benefits of the improvement idea.
 
The improvement programme will be executed in joint effort in terms of
objective, target, implementation planning and resource allocation and for that
purpose all relevant information will be accessible to Client in order to
analyse and evaluate the improvement programme.
 
Supplier and Client will work together to achieve benefits that are shared
equally between the parties. The basis of such calculation will be the 2005
budget.
 
***
 
Purchasing Regulatory Requirements
 
The Supplier shall:
 
(a)    obtain import licences and licences for controlled drugs;
 
(b)    obtain and generate any relevant shipping documents; and
 
(c)    obtain all approvals required for the import of unlicenced medicinal
products***.
 
Client will provide Supplier with an approved vendor list (the Supplier Status
Listing) and this will be adhered to in accordance with GMP guidelines. Supplier
will be responsible for maintaining this list and for adding any new vendors or
deleting vendors whose services are no longer required.
 

1.3    
Governance

 
For Purchasing:-
 
Client Representative is David Harrison.
 
Supplier Representative is Jeanette McCormack.
 
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1.4    
Documents

 
Purchasing Reports
On Request
Frequency of
Supply
Approved Vendor List
 
On update
Supplier Schedules
yes
 
Material Demand Plan (item level)
yes
 
Supplier Spend Data (item level if required)
yes
 
Stock (item level)
yes
 
PPV report
monthly
Quarterly review

 

1.5    
Exceptions

 
For the following goods the Client will perform the purchasing function and the
Supplier will perform the procurement function:
 

·  
***

 

1.6    
Key Performance Indicators (KPI)

 
KPI
Indicator
Target
On Request
PPV report
Invoice cost
minus standard
cost for
purchased
material
Neutral PPV
Quarterly

 

2.    
REGULATORY AFFAIRS

 
Consisting of:
 

2.1    
Responsibility Matrix

 
***
 

2.2    
Description of Services

 
Regulatory affairs will cover the licences listed in Schedule 5.
 
Support for Marketing Authorizations
 
Supplier regulatory affairs to liaise with other Supplier departments as
necessary to coordinate any CMC changes / updates to the licences and keep
Client regulatory affairs updated on any potential variations related to CMC
aspect of the products which may be initiated by the manufacturing site.
 
Supplier shall provide the appropriate data to Client to support the change
within a reasonable timeframe.
 
Client shall submit applications to the Regulatory Agencies and provide Supplier
with updates on the progress of the applications. Client shall inform Supplier
of approvals/rejections of applications
 
Supplier shall inform the appropriate people within Supplier of Regulatory
Agency decisions
 
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To aid better visibility, regular communication from Supplier shall update
Client with CMC related activities.
 
Client regulatory affairs shall formally request Supplier to support any CMC
related changes to licences (e.g. stability data for renewals in Ireland or
increasing shelf life, etc).
 
CMC support for global products (such as Equasym, Equasym XL and Xyrem) by
Supplier regulatory affairs will be limited for a period of two (2) years, after
which it will be subject to re-negotiation.
 
Site licences
 
All Site licences listed in Annex 3 are currently held at the Supplier site.
Supplier will continue to maintain these licences as required. Supplier will
inform Client of any proposed changes to the Client Site licences.
 
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Maintenance of the product licences
 
Supplier will maintain those product licences listed in Annex 2. In addition,
Supplier will continue to maintain the product licence for Ergometrine Maleate
Tablets BP 50 mcg until stock has been exhausted (following stock exhaustion the
Marketing Authorization will be transferred to Client).
 
Manufacturing compliance
 
Supplier will check manufacturing and testing documents against the licenced
details for products manufactured at Supplier. The final QP release for all
products will be carried out by Client.
 
Controlled Drugs licences
 
Supplier will maintain the Controlled Drugs licences listed in Annex 4 and
update as appropriate. In addition, Supplier will apply to import controlled
drugs in line with site requirements, as requested and Client will apply for
export licences.
 
Project Teams
 
Supplier will sit on project teams relevant to Client products and feedback
information from these meetings to Client.
 
Specials Licences
 
Supplier will maintain the products supplied under a ‘Specials’ licence.
 

2.3    
Governance

 
For Regulatory Affairs:-
 
Client Representative is Iftikhar Ali.
 
Supplier Representative is Anita Murray.
 

2.4    
Documents

 
Document
On Request
Frequency of
Supply
Variation/renewal package
X
 
Update licence documents
 
Following change
Site Licences
X
 

 

2.5    
Key Performance Indicators

 
KPI
Indicator
Target
On Request
Provision of
appropriate data
Number of
questions from
Agency
Agency approval
Quarterly

 
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3.    
SUPPLY CHAIN MANAGEMENT

 
Consisting of:
 
3.1    Responsibility Matrix
 

 
Supply Chain Management
Client
Supplier
B.1
Provide Monthly Forecast
X
 
B.2
Enter Forecast in Manugistics (UK - EIRE - France - Germany)
X
   
Enter Forecast in Manugistics (Other Territories)
 
X
 
Provide weekly/monthly sales figures
X
 
B.3
Order Entry - Stock allocation for 3rd Party Export
X
 
B.4
Credit Mngt 3rd Party Export
X
 
B.5
Determine Sales and Operation Plan Policy
X
 
B.6
Create Sales and Operational Plan
 
X
B.7
Determine Replenishment Plan Policy
X
 
B.8
Create Replenishment Plan
 
X
B.9
Create Production Plan
 
X
B.10
Create Capacity Plan
 
X
B.11
Determine Quota Policy
X
 
B.12
Mngt of Quota System
 
X
B.13
Determine Finished products Inventory Policy
X
 
B.14
Determine Cycle Count Policy (Dunstable)
X
 
B.15
Apply Cycle Counting (Dunstable)
X
 
B.16
Apply Finished products Inventory Management according to Client Policy
 
X
B.17
Distribute Reporting (See Sections 7 and 8)
X
X
B.18
Draft and Apply SLA with Affiliates
 
X
B.19
Shipping Documentation (Dispatch Note - CoA)
 
X
B20
Manage the supply chain for Xyrem including the introduction of the new
formulation planned for 2006/7
 
X
B21
Manage name change
X
X
 
Artwork
X
X
 
Provision of Style Guide
X
   
Change Control Request based on Template (Manufactured and Bought In) with
annotated copy artwork
X
   
Generation and Design of Artwork (Manufactured Goods and Bought In)
 
X
 
Insertion of component code/pharmacode where applicable
 
X
 
Approval of Artwork (Manufactured Goods and Bought In)
X
X
 
Printing of Artwork
 
X
 
Change Control Request for SPC’s
X
   
Generation of new statement of product characteristics (SPC) or amendment
current SPC
 
X
 
Approval of SPC
X
   
Job Sheet raised for promotional artworks (brochures etc)
X
   
Quote provided for Promotional Artwork
 
X
 
Approval Granted for Promotional Artwork
X
   
Generation/amendment of promotional artwork
 
X
 
Approval of promotional artwork
X
   
Arrange printing of promotional material (if in original quote)
 
X

 
3.2    Description of Services
 
Demand 
 
3rd Party Demand
 
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Client will make the order entry service for third party customers based on
instructions given by Client’s international trade group in Slough. Supply of
unforcasted demand will be subject to negotiation of leadtimes within
forty-eight (48) hours where possible however, where material supplies to meet
this demand have to be negotiated it is accepted that this could take at least
five (5) working days.
 
Forecasting
 
Supplier will record forecasts coming from Client Affiliates (with exception of
the identified territories) in Manugistics. Those forecast will be provided by
Client on a monthly basis - first week of the month - by SKU - in Monthly
Buckets - with a Horizon of minimum of eighteen (18) Months.
 
The first three (3) months of such forecast will be deemed firm with respect to
procuring materials. Client will however underwrite the purchase of materials
with longer lead-times where advance purchase is required to meet demand and
where Supplier’s minimum order quantity exceeds demand. Supplier will provide a
list of all materials with a lead-time longer than three (3) months; these items
will be reviewed at the monthly demand and supply meeting with a view to Client
identifying where these purchases would not be appropriate. Supplier will also
provide a monthly short dated stock report for review at this meeting. Client
will underwrite these materials and will reimburse Supplier should they
subsequently become obsolete or exceed their shelf life. On an annual basis
Client and Supplier will review overall product cycle times in order to agree
purchase policies and procedures.
 
Client and Supplier will review jointly on a monthly as appropriate basis the
forecasted demand against supply and relevant KPI’s. The meeting will take place
at Supplier - Slough on alternate months. During this meeting the Client
portfolio will be discussed in terms of new product launches - product
promotions - product extensions (SKU level) - pricing changes and impact on
demand - discontinuation of SKU - regulatory changes - replacements of products.
The planning policies: coverage - lead-times - allocated volumes will be
discussed accordingly.
 
Planning
 
Sales and Operational Plan (S&OP)
 
Client and Supplier will jointly agree on the S&OP policy and implementation.
 
Client and Supplier will meet on an a quarterly basis for the S&OP meeting
relating to Client critical products (for example: Xyrem - Equasym - Dipentum).
During this meeting Supplier will inform Client about demand vs capacity,
coverage of stock. Client portfolio will be discussed in terms of new product
launches, product promotions, product extensions (SKU level), pricing changes
and impact on demand, discontinuation of SKU, regulatory changes and
replacements of products. The planning policies: coverage, lead-times and
allocated volumes will be discussed accordingly.
 
Replenishment Plan
 
Client will provide weekly/monthly sales figures at the and of each week/month
as appropriate which together with the forecast data will enable a replenishment
plan to be formulated.
 
Supplier will provide Client on a monthly basis a replenishment plan. This plan
will be provided in the second week of each month (by Affiliate or third party,
by SKU, in Weekly Buckets and with an Horizon minimum of eighteen (18) months.
 
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Supplier will provide Client on a monthly basis a report which measures the
replenishment planning accuracy (planned replenishment vs policy) and the
replenishment planning execution accuracy (planned replenishment vs actual
replenishment). Any deviation will be explained by reason codes.
 
Production - Capacity Plan
 
Supplier will provide Client on request the demand on production - capacity
plan. This plan will be expressed per work centre, by SKU excluding third party
details, in Weekly Buckets, with an Horizon of twelve (12) months, available
capacity and production batches (quantities).
 
Inventory Management
 
Supplier will review on a six (6) monthly basis with Client the inventory policy
rules. The inventory policy rules will determine the safety stock level of each
SKU considering the following criteria:
 

·    
product lead-time including material procurement;

 

·    
function of demand reliability (forecast accuracy) - replenishment reliability -
lead-time reliability - inventory accuracy reliability - production process
reliability;

 

·    
service level will be defined in the Affiliate SLA and according to the
definition of product availability. Target annual service level will be 98.5%
(Target Annual Service Level);

 

·    
If Target Annual Service Level not met both parties will review the causes and
agree an action plan improve the service.

 
Maximum Stock Level:
 
Supplier will supply and Client will accept product in complete batch sizes.
Supplier will review with Client a maximum stock level by SKU at the central
warehouse and warehouse in the territories on a six (6) monthly basis. Supplier
will notify Client when full batch deliveries will exceed these targets.
 
All products excluding bought in products will be delivered and released to the
central warehouse with a shelf life of at least 90% of their original shelf life
or 85% of their original shelf life for short shelf products (two (2) years and
less). All stock delivered to the central warehouse with a shorter shelf live
will be subject to negotiation.
 
Client on a six (6) monthly basis will determine together with Supplier the
maximum WIP level for the next six (6) months. In the case that Client ceases
the sale of an SKU or product, Client will compensate Supplier for the materials
purchased and WIP up to an agreed maximum.
 
Stock Monitoring:
 
Supplier will monitor Client stock (central and regional (Affiliate)) on a
weekly / monthly basis dependent on SKU and report the stock levels by SKU and
status (Quarantine - Released) - Supplier will report Stock by Week or Month -
by SKU - by Location - by Status. Supplier will notify Client of potential
problems with stocks in the market and will confirm the replenishment plan to
recover the supply situation.
 
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Supplier will set up and manage a quota system for the relevant products in
order to distribute the volumes throughout the markets. The policy - principles
and rules of the quota system will be discussed and agreed in consensus with
Client.
 
Release of Finished Goods:
 
Client products will be supplied ex-works and become Client ownership on
collection from Supplier. Supplier will certify all batches of manufactured
goods within fifteen (15) working days for sterile products and seven (7) days
for non-sterile products after complete batch receipt at central warehouse. If
batches are not release with the timeframes mentioned Client has the right to
return the product to Supplier at their costs.
 
Transport
 
Supplier is responsible for the replenishment plan. Transport and distribution
to the central warehouse and territories will be the responsibility of Client.
Supplier will supply ex works. Supplier will coordinate with Client central
warehouse to agree collection schedules.
 
Supplier will be responsible for the organization of transport for incoming
goods (raw materials - packaging - components).
 
Supplier will supply certificates of analysis and other document required by
applicable law (UK and International for exports) for all shipments to the
central warehouse as detailed in the GMP/Technical Agreement.
 
Distribution from the central warehouse to UK or export markets will be the
responsibility of Client. Client will be responsible for all distribution export
documentation. Supplier will cooperate where relevant by providing the necessary
information needed for export documentation (Certificate of Analysis -
Certificate of Origin)
 
If goods need to be returned to Supplier premises for quality reasons, Supplier
is responsible for all logistic costs and reprocessing cost.
 
Value Added Logistics
 
Supplier will provide value added logistics (repack - re-label - destruction) on
an ad hoc basis. For this service Client will ask Supplier a special procurement
order and the price will be fixed in due time.
 
Supplier will provide Client with an activity report to approve the work, which
will form the basis for invoicing.
 
Artwork
 
Client will advise Supplier of the required artwork generation/changes using the
electronic change control notification (CCN). It is the responsibility of Client
to ensure all required fields are completed. A copy of the current approved
artwork annotated with changes in the form of a PDF will be provided with the
CCN.
 
Supplier will update the artwork and add component and pharma codes where
applicable.
 
Supplier will update the artwork tracker. Artwork tracker will either be on a
shared drive or supplied by PDF file on a weekly basis.
 
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Supplier will provide a first draft review to Client regulatory in PDF format
within three (3) days of receipt of CCN. If further changes are required Client
will update the PDF with electronic notelets.
 
Once technically approved Supplier will then place the PDF master artwork in the
regulatory approval folder. (Longer term if Client cannot access the server this
will be by e mail).
 
Supplier will co-ordinate the update with Supplier technical support.
 
Client will then approve the master PDF, place in the approved folder and advise
Supplier via e mail of the approval.
 
Approved artwork will then be implemented in line with regulatory requirements
(max six (6) months) and in agreement with Client.
 
Artwork (design and printing) will be part of the product cost.
 
If Artwork changes are initiated by Supplier all related write off cost will be
charge to Supplier.
 
If Artwork changes are initiated by Client all related write off cost will be
charge to Client. All write off cost will be identified and agreed with Client.
 
Client reserves the right to transfer the responsibility of Artwork (design and
generation) to Client for following products (Xyrem - Equasym XL/IR - Dipentum)
at any time.
 
Affiliates Service Level Agreements (SLA)
 
Supplier will set up a SLA agreement with the Client Affiliates to determine the
specific rules applicable for Inventory Management, Replenishment and
Distribution. This SLA will be reviewed on a six (6) monthly basis. This SLA
will contain following topics:
 

·    
Planning Principles;

 

·    
Planning Calendar;

 

·    
Shipping - & Delivery Specification;

 

·    
Packaging Specifications;

 

·    
Labelling Specifications;

 

·    
Prewholesaling Specifications;

 

·    
Contact People;

 

·    
Discontinuation Principles;

 
·    
Product Information; and

 

·    
Artwork Process.

 
An example of an SLA in included in Schedule 6.
 
Continuous Improvement
 
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Supplier and Client will set up on a yearly basis a continuous improvement
programme. The programme will focus on issues agreed between Supplier and Client
that will lead to improvements in cost and in service (shorter lead times for
materials or products, improvement of the reliability, responsiveness, quality
and information supply as appropriate).
 
Every improvement idea will be analysed through a feasibility study in joint
cooperation (to be completed within two (2) months) and will be followed by
appropriate financial calculation using net present value (NPV) to evaluate the
benefits of the improvement idea (to be completed within three (3) months).
 
The approved improvement idea will be implemented by Supplier within a timeframe
less than six (6) months after approval. The cost savings will be expressed in
cost of goods sales. The cost savings will be shared 50/50 between Client and
Supplier.
 
3.3    Governance
 
For supply chain management the Client representative is B Ginger/B Standart.
 
For supply chain management the Supplier representative is T Weeks.
 
3.4    Documents
 
SCM Document
On Request
Frequency of Supply
Forecasting
X
 
Replenishment Plan
 
Monthly
Production Plan
X
 
Procurement Plan
X
 
Capacity Plan
X
 
Sales & Operational Plan
 
Quarterly
Stock Status Report
 
Weekly / Monthly
Artwork Report
X
 
Value Added Logistics Report
X
 

 
3.5    Key Performance Indicators (KPIs)
 
In order to measure the performance of the business following KPI will be used.
Supplier will calculate those KPI’s on a monthly basis and provide Client with
the actual performance of those KPI vs the Target

KPI
Target
On Request
Frequency
Forecast Accuracy
70%
 
Monthly: 6th working day
Days of Supply
95%
 
Monthly: 6th working day
Days of Supply (Brian Ginger)
   
Monthly: 6th working day
Replenishment Accuracy
98%
 
Monthly: 6th working day
Out of stock
98.5%
 
Monthly: 6th working day
Inventory At Risk - Write off (WIP - RM and Components)
   
Monthly: 6th working day
Delivery with Appropriate Shelf Life 90% - 16 Month
99.5%
 
Monthly: 6th working day
Respect of Maximum Stock level
99.5%
 
Monthly: 6th working day

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Forecast Accuracy

The difference between actual demand and the forecast made previously three (3)
months for a given time period.

Formula: Forecast AccuracyM = 1 - ABS[(SM - FM-3) / SM]

Days of Supply

Formula:

Current on hand (approved) inventory / average daily forecast for the next three
(3) months. Number of SKU’s at or above target (minimum stock level in days) =
Hit.
Percentage shows the number of SKU with a cover higher than the target/total
number of SKU.
 
Replenishment Accuracy

It computes the difference, in terms of quantity per SKU and timeliness, between
the order placed previously by Client and the effective shipment from Supplier
for a given time period.

Formula: Replenishment Accuracy = delivered quantity on time and in full /
promised quantity according replenishment plan

Inventory at risk

Expressed in €, it represents the inventory that is short-dated or will expire
before it will be sold.

It considers products with no movement in the last twelve (12) months.

Write Off

Expressed in €, it represents the inventory that is authorised to be
discarded/destroyed due to expiration, damage or returned product.
 
Out of stock: 

Product Availability

The total number of stock days in the month is the number of SKU’s produced by
the site multiplied by the number of working days in the month.

The number of working days in the month is considered as thirty (30) days for
all months for the purposes of this calculation.

The number of stock out days is the total number of all stock out days for each
SKU during the month.
 
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Formula:

Product Availability = total stock days - total stock out days X 100
total stock days

Delivery with appropriate shelf life 90% or sixteen (16) months

It measures the percentage of batches delivered with the shelf life either above
90% of total shelf life or sixteen (16) months.

Formula:

Delivery with appropriate shelf life = batches delivered with appropriate shelf
life/total number of batches delivered.

Respect of Maximum Stock Level

Formula:

Current on hand (approved) inventory / average daily forecast for the next three
(3) months 

Number of SKU’s at or below target (maximum stock level in days) = HIT

The percentage shows the number of SKU with a cover higher than the target/Total
number of SKU.

4.    INFORMATION TECHNOLOGY
 
Including:
 
4.1    Responsibility Matrix
 
IT
Client
Supplier
Helpdesk
   
Definition of shared services and required support model and associated SLA.
X
X
     
Manugistics
   
Manugistics Interfaces Free Stocks - Daily
 
X
Manugistics Interfaces Quarantine Stocks - Daily
 
X
Manugistics Interfaces Purchase Orders - Daily
 
X
Manugistics Interfaces Sales Orders - Daily
 
X
Manugistics Interfaces Sales History - Monthly
Produces the statistical forecast.
 
X
Manugistics Support
 
X
Manugistics New User/Refresher Training
 
X
Manugistics Reports via Discoverer (KG) written developed/maintained IT
 
X
Manugistics Data Integrity Checks - Daily. If not checked will lead to sales
history problems
 
X
Manugistics - User Creation/Maintenance
 
X
Retention or transition Client site dependence on Manugistics to another
solution
X
X

 
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Sage - Dunstable
   
Sage Supporting EDI In/Out for new/amended products/customers
 
X
Sage - support customer service with EDI In/Out usage and resolve errors reports
 
X
Define transition plan (see below)
         
EDI - Dunstable
   
EDI - Responsible for support of In/Out interfaces on Gentran - 3 times a day
 
X
EDI - Creation of new customers/products
 
X
EDI Support Handover if required (one Month)
X
X
EDI new customer access required to Sage test system
X
X
     
Visa
   
Visa interfaces - Weekly monthly
 
X
Changes to interfaces in terms of data or frequency
 
X

 
4.2    Description of Services
 
Helpdesk
 
Client end users or the Supplier IT department will raise calls with the Client
international helpdesk on behalf of shared service applications for Manugistics-
Sterling Commerce EDI-SAGE EDI In/Out and Oracle Gemms.
 
Monthly helpdesk reports will be sent to the Supplier IT manager and SLA
performance will be monitored between Supplier and Client IT managers. Support
calls placed with the Client international helpdesk will aim to be resolved
within eight (8) hours (see 4.4).
 
The Client helpdesk will be solely used by the Supplier for the resolution of
issues related to shared service applications or infrastructure.
 
Manugistics
 
Manugistics is an MRP forecasting application - hosted and supported by the
Supplier - but accessed by Slough, Nanterre, Sindorf and Dublin Client sites.
 
Each business day (with the exception of UK bank holidays) the Supplier IT
department will perform daily checks to ensure all services and interfaces are
available and complete and that application performance is satisfactory.
 
The Client Sage system provides on a daily basis daily and historic sales data,
which is fed into the Manugistics system. The Client IT department will perform
daily checks to ensure that this interface is functioning.
 
The Supplier will back up the Manugistics database up each evening as part of a
six (6) week backup/strategy schedule. The Supplier will hold backup tapes in a
fireproof store in another part of the site.
 
The Manugistics test database will be refreshed from the live database either
upon request or periodically as determined by Supplier IT personnel.
 
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The Supplier IT department will provide telephone and email support to the
Client on request. The Client will route Manugistics helpdesk calls to the
Supplier IT department via the Client international helpdesk.
 
The Supplier will acknowledge the international helpdesk within four (4) working
hours and resolve all incidents within eight (8) working hours. UK bank holidays
will be treated as non working hours.
 
Client Sage System / Supplier Oracle Gemms System
 
Sage is the legacy financial application used by legacy Celltech sites in the UK
and hosted in Slough. A small number of Supplier users have access to this
system and use it for specific purposes.
 
Oracle Gemms is the Supplier ERP system hosted at Supplier site.
 
Supplier site users will require continued access to the Sage system to raise
purchase orders for Bought in Products. This amounts to approximately twenty
(20) orders per week.
 
Client Dunstable site users will require continued access to Supplier Oracle
Gemms to move stock from a transient location (TRANS) to Client Dunstable site.
 
Once certain stock has been approved for sale following QP release the
associated stock transaction data is moved from the Supplier Oracle Gemms system
to the Client Sage system by a Client Dunstable site user.
 
The Client Dunstable user will raise a purchase order, which is sent to the
Supplier customer services operation via email. Associated product will be
shipped via the Oracle Gemms system and the transfer price invoiced via the
Supplier Oracle Financials system.
 
The Supplier will make sure that such transactions are highly synchronised to
ensure data accuracy in both systems. The Supplier and Client IT departments
will check the system interfaces on a daily basis and make sure that
stock/sales/purchase orders between the Client Sage system and Supplier Oracle
Gemms system are synchronised
 
Incidents relating to either system will be acknowledged within four (4) working
hours and resolved within eight (8) working hours by Client and Supplier IT
departments. UK bank holidays will be treated as non working hours.
 
Sterling Commerce EDI - Dunstable
 
The EDI system is hosted at the Client Rochester site and accessed and used by
Supplier IT staff who are responsible for managing the application of EDI
services to the legacy Celltech UK business.
 
Supplier will perform ad-hoc communication between Rochester EDI team and
Supplier of any proposed downtime or changes to system.
 
The Supplier will perform exception testing via email alerts of failure due to
data discrepancies. Resolution will involve use of Sterling Commerce Tools and
communication with customer services and customers.
 
Supplier will perform training and support of customer services using EDI In/Out
Modules.
 
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Supplier will acknowledge the Helpdesk call within four (4) working hours and
resolve any issues within eight (8) working hours. UK bank holidays will be
treated as non working hours.
 
The Supplier will escalate any calls to Sterling Commerce or Hewlett Packard due
to product or hardware problems as per contracts with vendors.
 
VISA
 
The Supplier will provide Client on a daily basis transactional data including
inventory, sales orders, shipments, invoices, stock movements and goods receipt
according to the Client’s specifications and technology needs.
 
4.3    Governance
 
For IT Supplier representative is P Shaw
 
For IT Client representative is K Faulkner
 
4.4    Key Performance Indicators
 
KPI
Indicator
Target
On Request
Support Calls
for Shared
Services
Resolution Time
eight (8) working hours of
receiving call
 

 
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SCHEDULE 2
 
GMP Agreement
 
GMP Agreement For Quality Services Relating To Pharmaceutical Products On Toll
Manufacture (Brought In Products)
 
BETWEEN         UCB Pharma Ltd (UCB)

AND            CONTRACT ACCEPTOR, with registered offices at Supplier

WHEREAS the parties wish to set out the respective duties of UCB and CONTRACT
ACCEPTOR with respect to Good Manufacturing Practices (GMP);

WHEREAS on ______date____________ the Parties have entered into a Toll
Manufacturing Agreement for the PRODUCTS (the “FRAME AGREEMENT”);

NOW THEREFORE THE PARTIES HAVE AGREED AS FOLLOWS:

1.    SCOPE OF THE AGREEMENT

This GMP-AGREEMENT contains the respective obligations of UCB and CONTRACT
ACCEPTOR with respect to GMP to be respected for the manufacture of the PRODUCTS
as set out herein. The GMP requirements for the manufacture, storage and
quality, as well as the duties and responsibilities of UCB and CONTRACT ACCEPTOR
relating to the manufacture of the PRODUCT are defined in detail in the ECcGMP’s
guidelines (Guide to Good Manufacturing Practice for Medicinal PRODUCT in the
European Community, volume IV - last edition). These Guidelines (including all
defined terms) are an integral part of this Agreement.

This GMP-AGREEMENT relates to the manufacture of the following PRODUCT(s),
further described in Exhibit 1 to this GMP-AGREEMENT and hereinafter referred to
as “PRODUCT(S)”:

     
PRODUCT(S)
GALENICAL FORM
DOSAGE
 
Refer to exhibit 1
       

Contacts for this GMP-AGREEMENT until further notification:
 
At UCB :
D Kiillick. (Quality Assurance Manager - Qualified Person)
At CONTRACT ACCEPTOR :
E. Prady (Head of Quality - Qualified Person)

 
2.    RESPONSIBILITIES

Under the terms and conditions hereinafter set out, UCB appoints CONTRACT
ACCEPTOR to perform and conduct with respect to the PRODUCT(S) all the
operations which are marked with “X” in the column titled CONTRACT ACCEPTOR in
the matrix of responsibilities herebelow.

During the term of this GMP-AGREEMENT, CONTRACT ACCEPTOR undertakes that it
shall manufacture and/or pack and/or control the quality of the PRODUCT(S) and
conduct CONTRACT ACCEPTOR’s operations in strict compliance with:
 
i)    the current Good Manufacturing Practices; and
 
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ii)  
the formula, technical specifications, manufacturing processes and quality
control and release procedures described in the relevant exhibits attached

 
N/A shall mean: “not applicable”.
 
A.
General
   

 

   
CONTRACT
GIVER
CONTRACT ACCEPTOR
 
Valid applicable licence available
 
X
.
Formulation / data sheet
NA
NA
 
Manufacturing procedures / batch sheets
NA
NA
 
Registered formula, process, etc.
NA
NA
 
Scale-up procedures
NA
NA
 
Validation master plan
NA
NA
 
Validation protocol
NA
NA
 
Validation report
NA
NA
 
Validation procedures
NA
NA
 
Analytical specifications and methods and IPC (In process control)
NA
NA
 
Validation of analysis methods
NA
NA
 
Specific procedures relating to product incl. safety, occupational health,
security, storage and transport conditions
 
 
X
 
Labelling instructions
NA
NA
 
Cleaning procedures
NA
NA
 
Validation of cleaning procedures prior to production
NA
NA
 
Validation of cleaning procedures after production
NA
NA
 
Stability testing
 
X
 
Stability protocol
 
X
 
Stability test methods
X
   
Stability report
 
X

 

 
Bulk Manufacture
   

 

   
CONTRACT
GIVER
CONTRACT ACCEPTOR
 
B.1
 
Raw Materials
     
Purchase of excipients or raw materials.
NA
NA
 
Supplier evaluation
NA
NA
 
Analysis
NA
NA
 
Release
NA
NA
 
Storage of reference samples
NA
NA
 
Procurement / order free of charge of active substance
NA
NA
 
Analysis
NA
NA
 
Release
NA
NA
 
Identity control of active substance
NA
NA
 
Storage of reference sample
NA
NA
B.2
Manufacture
     
Validation of scale-up/manufacturing process
NA
NA
 
Master of Manufacturing formula
NA
NA
 
Master of Processing instructions
NA
NA
 
Manufacture following agreed procedure
NA
NA
 
Allocation of batch numbers for bulk
NA
NA

 
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CONTRACT
GIVER
CONTRACT ACCEPTOR
 
B.3
 
Analysis and controls
     
Perform in process - controls
NA
NA
 
Validate the methods of analysis for new products
NA
NA
 
Purchase of necessary reference standards
NA
NA
 
Analysis
NA
NA
 
Release for packaging
NA
NA
 
Storage of reference sample
NA
NA
 
Certificate of analysis
NA
NA

 
C.
Primary Packaging / Semi-finished Product
   

 

   
CONTRACT
GIVER
CONTRACT ACCEPTOR
 
C.1
 
Packaging Components
     
Specifications for unprinted primary packaging materials (unprinted PPM)
NA
NA
 
Supplier evaluation
NA
NA
 
Procurement of unprinted PPM
NA
NA
 
Methods of testing unprinted PPM
NA
NA
 
Specifications for printed primary packaging materials
NA
NA
 
Specifications for text/Artwork
NA
NA
 
Supplier evaluation
NA
NA
 
Procurement of printed PPM
NA
NA
 
Methods of testing printed PPM
NA
NA
 
Testing
NA
NA
 
Release
NA
NA
 
Allocation of batch numbers for PPM
NA
NA
 
Storage of reference samples
NA
NA
       
 
C.2
 
Primary packaging
     
Allocation of batch numbers
NA
NA
 
Allocation of expiry dates
NA
NA
 
Code to be used
NA
NA
 
Master of packaging instructions
NA
NA
 
Control of the semi-finished product (S.F.P.)
NA
NA
 
Release of the S.F.P. for Final Packaging
NA
NA
 
Storage of reference samples for the S.F.P.
NA
NA
 
Performing stability studies in final packages
 
X

 
D.
Secondary Packaging / Finished Product

 

   
CONTRACT
GIVER
CONTRACT ACCEPTOR
 
D.1
 
Secondary Packaging Components
     
Specifications for printed secondary packaging materials (text) (printed
SPM)/artwork
NA
NA
 
Specifications for printed SPM (physical)
NA
NA
 
Methods of testing printed SPM
NA
NA
 
Supplier evaluation
NA
NA
 
Procurement of printed SPM
NA
NA
 
Control
NA
NA
 
Release for use
NA
NA
 
Allocation of batch numbers for printed SPM
NA
NA
 
Storage of reference samples
NA
NA

 
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D.2
 
Secondary Packaging
   
D.2.1
Allocation of batch numbers
NA
NA
D.2.2
Allocation of expiry dates
NA
NA
D.2.3
Code to be used
NA
NA
D.2.4
Master of packaging instructions
NA
NA
D.2.5
Paletisation instructions
NA
NA
D.2.6
Master of shipping label
NA
NA
D.2.7
Test of the finished product (EU)
 
X
D.2.8
Issue certificate of quality
 
X
D.2.9
QP Certification of the finished product....
NA
NA
D.2.10
Release of the finished product for sale/distribution to market
NA
NA
D.2.11
Storage of reference/ retention samples for the finished product
NA
NA

 
3.    PERFORMANCE INSTRUCTIONS

UCB shall supply the formulation, procedures and analytical specifications;
these are binding on CONTRACT ACCEPTOR. Changes may be made only with the
written consent of UCB following due change control procedures at either end.
Deviations from the process or the control procedure must be brought to the
attention of UCB and the release for shipment of the relevant batch requires the
written consent of UCB.

4.    MATERIALS

The active substances and excipients have to fulfil the requirements of UCB
(specifications, methods of testing, authorised supplier). Any deviation from
the specifications or requirements must have the prior written approval of UCB
 
Any reference standard for testing must be accompanied by a CoA listing storage
requirements, expiration date and any correction factor that needs to be
applied.
 
CONTRACT ACCEPTOR shall be responsible that all its deliveries of such material
are clearly and visibly labelled with all necessary markings. This applies in
particular to the PRODUCT names, which have to be identical with the information
laid down in specifications, manufacturing and packaging instructions, storage
instructions, remarks on quarantine and warning indications.

5.    ANALYSIS AND TESTS

CONTRACT ACCEPTOR has to perform the analysis and tests according to the
specifications and methods defined by UCB

A batch specific analytical report or certificate of analysis containing the
recorded results of the analysis is to be provided for every single delivery of
the end PRODUCT. The certificate lay-out and content must conform with the
requirements of UCB

Label Component specifications: CONTRACT ACCEPTOR will only use labels and
labelling approved in writing by UCB

6.    DOCUMENTATION

Masters
 
Master Batch Records shall mean the documents used by CONTRACT ACCEPTOR as
technical instructions and records to manufacture, pack and test the PRODUCTS.
Those documents will be based on information provided by UCB. CONTRACT ACCEPTOR
is authorised to transcribe those documents into its own format, provided they
will be approved in writing by UCB prior to use.

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Manufacture and expiry dates.

The date of manufacture is the first day of compounding the PRODUCT. UCB
provides the rules to allow CONTRACT ACCEPTOR to calculate the expiration date
for the batches to be manufactured.

Manufacturing and equipment data.

CONTRACT ACCEPTOR is responsible for the safe keeping and retention of records
of machine usage (previous PRODUCT manufactured in non-dedicated machinery),
cleaning, maintenance, calibration, raw material batch numbers and
certification, IPC results and parameters, test results in accordance with all
applicable laws, rules, regulations and guidelines.

Retention

CONTRACT ACCEPTOR will retain, at minimum, batch production records, quality
control records, validation data and other documentation including investigation
reports for at least 1 year beyond the expiration date of the finished product
lot, or as otherwise required by applicable law. All such documents, records and
reports must be maintained by CONTRACT ACCEPTOR in such a manner that they are
readily retrievable and stored in an environment suitable to prevent damage or
loss. CONTRACT ACCEPTOR shall provide copies of all such documents and
information to UCB or its designee, as reasonably requested, within 5 (five)
working days.

7.    DEVIATIONS AND INVESTIGATIONS

A deviation is defined as any abnormal event that may occur during the
processing of a batch, or is a departure from Specifications, approved Master
Batch Record or Method of testing.
 
Any deviation that occurs must be documented in the batch record. The
significant deviations will be forwarded to UCB in conjunction with the
Certificate of Conformity / Analysis).
 
Excepted as provided in sections “Complaints” and “Stability”, CONTRACT ACCEPTOR
must notify UCB within five (5) business days of the occurrence of a confirmed
out-of specification (OOS) result or major process deviation (deviations
potentially effecting product quality, safety, identity, purity or efficacy)
relating to the PRODUCT. A confirmed OOS result is defined as a result from a
raw material, in-process, or finished product testing which does not meet
specifications.
 
All Quality decisions regarding any such out-of-specification result or major
process deviation involving the PRODUCT shall be made by CONTRACT ACCEPTOR in
consultation with UCB. In all cases, UCB will have the final review and decision
making responsibility as to the impact of the deviation(s) on the PRODUCT ; this
includes the disposition of the affected batch. Reworking or Reprocessing
protocols require UCB approval prior to execution. All investigations must be
completed, documented and approved by CONTRACT ACCEPTOR prior to issuance of a
Certificate of Compliance or a Certificate of Analysis. A copy of the completed
investigation must be provided to UCB prior to PRODUCT release by CONTRACT
ACCEPTOR.
 
CONTRACT ACCEPTOR will notify UCB in writing of any batch of PRODUCT rejected by
CONTRACT ACCEPTOR
 
CONTRACT ACCEPTOR will notify UCB in writing of any problems that may impact or
invalidate a batch previously shipped to UCB or its Affiliates or Agents.
 
Some deviations or investigations may require additional testing, stability or
validation be conducted. This work will be performed as agreed by both parties.

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8.    RELEASE

CONTRACT ACCEPTOR shall ensure and certify that the PRODUCT has been made
according to cGMP’s, specifications and methods documented in the Master Batch
Record. This includes a complete and thorough review of the executed batch
record. The certificate issued by CONTRACT ACCEPTOR will show the batch numbers
and quantities in each shipment.
 
The final market release will be undertaken by UCB based on his internal
procedures and the data and documentation provided by CONTRACT ACCEPTOR. UCB or
its affiliates may perform confirmatory testing to validate any CONTRACT
ACCEPTOR’s data.

9.    REFERENCE SAMPLES AND RETENTION SAMPLES

CONTRACT ACCEPTOR will retain samples of Raw materials (except water, compressed
gasses and highly volatile compounds) and Active ingredients for at least one
year beyond the expiration of the PRODUCT in which used and will retain samples
of the PRODUCT for at least one year beyond its expiration. The amount retained
shall be three times the quantity required to carry out all of the testing
required to meet the specifications.
 
CONTRACT ACCEPTOR shall keep those samples at the disposal of UCB and the
competent authorities pertaining to the manufacture and analysis of the PRODUCT
and shall not dispose thereof unless so authorised in writing by UCB

10.   STABILITY TESTING

Processing of the stability data is the responsibility of CONTRACT ACCEPTOR.
 
CONTRACT ACCEPTOR is obliged to provide UCB with the results of the tests
available. So far as test methods are not available from UCB, CONTRACT ACCEPTOR
has to provide the validated methods of analysis to be used. Microbiological
tests have to be carried out in addition to the chemical stability which UCB
shall specify.
 
Routine stability
 
CONTRACT ACCEPTOR is responsible for maintaining a routine stability program for
the PRODUCT and to provide UCB with a stability report at least once a year. The
stability protocol will be agreed to in writing by UCB. At a minimum, one lot of
each strength and in each package type (smallest to largest) of PRODUCT will be
placed on stability each year for products on the market. Any change to the
stability program/protocol must be approved by UCB.
 
Development and validation batches stability
 
CONTRACT ACCEPTOR is responsible for performing any stability required to
support the PRODUCT. The stability protocol will be agreed to in writing by UCB.
Any change to the stability protocol must be approved by UCB. Results will be
reported within fourteen (14) calendar days following the scheduled pull date.
 
Testing intervals
 
For finished packaged product stability, if the product remains unpackaged
(i.e., bulk storage) for more than thirty (30) days, the time zero data (data
generated at the start of the stability study) must be generated by new analysis
rather than extracted from release testing results.
 
For stability samples requiring testing at the three (3) months or longer
intervals (including at the expiry test station/label expiry date) the tests
must be initiated within fourteen (14) calendar days following the scheduled
pull date.
 
Monthly stability samples must be pulled no earlier than seven (7) days prior to
the last day of the month in which the sample expires.

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Stability failures
 
CONTRACT ACCEPTOR must report any confirmed problem or out-of-specification
results relating to the PRODUCT lot to UCB within five (5) business day of the
occurrence. CONTRACT ACCEPTOR must use its best efforts to complete and document
an investigation with regard to any such out-of-specification result within
twenty (20) business days of the initial out-of-specification result. If the
investigation will exceed twenty (20) business days, CONTRACT ACCEPTOR must
provide UCB with an interim report, including the test investigation. A copy of
the final investigation report must be forwarded to UCB within five (5) business
days of completion of the investigation. CONTRACT ACCEPTOR must provide UCB with
information regarding any investigation requested by UCB as agreed upon by both
parties.
 
UCB and CONTRACT ACCEPTOR must investigate any significant trends (those which
indicate future testing may yield OOS results) regarding the PRODUCT in an
effort to determine the cause of the trend. Any such trends identified by
CONTRACT ACCEPTOR must be reported to UCB within five (5) business days of
identification of the trend. CONTRACT ACCEPTOR must provide UCB with a report
discussing the facts and CONTRACT ACCEPTOR’s conclusions within five (5)
business days of completion of the investigation. Any such trends identified by
UCB will be reported to CONTRACT ACCEPTOR within five (5) business days of
identification of the trend. CONTRACT ACCEPTOR must use its best efforts to
assist UCB in completion of an investigation discussing the facts and
conclusions.

11.   VALIDATION/QUALIFICATION

Both parties agree to the following Validation/Qualification Policy.
 
UCB representatives shall have the right to attend the manufacture of validation
and launch batches.

Equipment and facilities/utilities qualification/validation shall be performed
for process, packaging, analytical methods, cleaning, and computerized systems.
Process Validation shall consist of prospective performance on at least three
consecutive production batches and must be conducted with commercial
production/analytical processes and equipment.
 
Manufacturer will not use any validation protocol or issue a report unless UCB
have first approved. UCB will approve or reject all protocols and validation
reports within fifteen (15) working days of receipt.
 
Cleaning Validation shall involve three replicate runs of cleaning procedure for
PRODUCT contact equipment during Process and Packaging Validation, except for
dedicated equipment which will require one verification run of the cleaning
procedure.
 
The cleaning procedure and analytical methodology will be reviewed by both
parties before the first Product Batches are manufactured.
 
Revalidation shall be performed for significant changes to existing
manufacturing process, packaging, analytical, etc. (as determined by UCB). UCB
shall have the right to required full or partial revalidation for changes made
to the validated PRODUCT, based on a shared change control system and an
assessment of the significance of the change. CONTRACT ACCEPTOR will notify UCB
of any planned changes to a validated process or associated procedures
sufficiently in advance to allow UCB an opportunity to assess the change(s) and
any ramifications. No changes shall be made to the validated process or PRODUCT
without prior written consent of UCB The number of batches required for
revalidation will be determined by UCB and CONTRACT ACCEPTOR based on the
significance of the change.
 
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12.   DISPUTE RESOLUTION

In the event that a dispute arises between CONTRACT ACCEPTOR and UCB in the
analysis of the PRODUCTs, the resolution will proceed in stages. The first stage
requires direct communication between analysts from both parties to determine
that the methods of analysis are the same and are being executed in the same
manner at both sites. Second, carefully controlled, split samples should be sent
from one site to the other for analysis in an attempt to reach agreement. Should
there be a failure to achieve resolution, analysts from both parties will be
required to communicate to work through the analysis of a mutually agreeable
sample. If these actions fail to achieve resolution, and only after these
avenues have been exhausted, a qualified referee laboratory will be used to
achieve resolution. This laboratory must be agreeable to both parties prior to
use. The results from this referee laboratory will be used to determine
resolution, but whatever the outcome, UCB retains the right to determine PRODUCT
release status. The payment for engaging the referee laboratory shall be
negotiated between the parties.

13.   AUDITS AND INSPECTIONS

CONTRACT ACCEPTOR shall permit duly authorised representatives of UCB upon
reasonable notice during normal working hours to inspect the premises, the
machinery and all activities related to the manufacture of the PRODUCT to ensure
that the GMP rules are observed and during such inspections UCB shall be
permitted to inspect all documents relating to the PRODUCT.
 
CONTRACT ACCEPTOR shall allow inspections (if any) from the competent
authorities in accordance with Directive 2001/83/ECC and/or in accordance with
local regulations.
 
CONTRACT ACCEPTOR will notify UCB and vice-versa without delay of any planned
inspection which impacts the PRODUCT.
 
CONTRACT ACCEPTOR shall promptly provide UCB with copies of all correspondence
between CONTRACT ACCEPTOR and any regulatory authorities regarding the
MANUFACTURING of the PRODUCT.
 
CONTRACT ACCEPTOR shall inform UCB of any relevant information following any
inspection that could impact on the future supply of the PRODUCT.
 
UCB and CONTRACT ACCEPTOR may accept audits of vendors for any material involved
in the manufacture of the PRODUCT from the other party. The party that performed
the audit is responsible for providing an audit status statement and all
appropriate documentation to the other party upon request. Alternatively, UCB
may determine it necessary to audit a specific vendor. In this case, UCB will
coordinate and schedule the audit with CONTRACT ACCEPTOR.

14.   REGULATORY CONTACTS

UCB shall be solely responsible for all contacts and communications with any
regulatory agency with respect to all matters relating to the PRODUCT.
 
Unless required by law or a regulatory agency, CONTRACT ACCEPTOR shall have no
contacts or communication with any regulatory agency regarding the PRODUCT
without the consent of UCB which consent shall not be unreasonably withheld or
delayed. CONTRACT ACCEPTOR shall notify UCB promptly, and in no event later than
one (1) business day, after CONTRACT ACCEPTOR receives any contact or
communication from any regulatory agency regarding the PRODUCT.
 
CONTRACT ACCEPTOR shall provide UCB with copies of all communications received
from or sent to any regulatory agency, with respect to the PRODUCT within one
(1) business day after receipt or sending of the communication, as the case may
be.
 
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CONTRACT ACCEPTOR shall inform UCB of any inquiry from a regulatory agency
specifically relating to PRODUCT and shall allow UCB representative at its
discretion to participate in any further contacts or communications relating to
the PRODUCT if reasonably practicable. CONTRACT ACCEPTOR will secure agreement
from UCB which shall not be unreasonably withheld or delayed, prior to making
commitment to a regulatory agency regarding the PRODUCT. CONTRACT ACCEPTOR shall
comply with all reasonable requests and comments by UCB with respect to all
contacts and communications with a regulatory agency relating to the PRODUCT.
 
15.   COMPLAINTS AND ADVERSE EVENTS HANDLING

Complaints brought to the attention of UCB have to be directly and without delay
passed on to CONTRACT ACCEPTOR and vice versa.
 
CONTRACT ACCEPTOR shall investigate and document Product complaints forwarded to
CONTRACT ACCEPTOR by UCB. CONTRACT ACCEPTOR shall comply with UCB requests in
connection with the investigation of any Product complaint, as agreed upon by
both parties. CONTRACT ACCEPTOR must provide UCB with information regarding any
Product complaint investigation requested by UCB as agreed upon by both parties.
 
CONTRACT ACCEPTOR shall complete and document the product complaint
investigation within thirty (30) business days after initial receipt of the
complaint by CONTRACT ACCEPTOR, unless otherwise agreed by UCB. If the
investigation will exceed thirty (30) business days, CONTRACT ACCEPTOR must
provide UCB with an interim report, including test results to date and a target
completion date, on or before the 30th business day of the investigation.
CONTRACT ACCEPTOR must complete the complaint investigation within sixty (60)
business days after initial receipt of the complaint by CONTRACT ACCEPTOR.
CONTRACT ACCEPTOR must forward a copy of the final investigation report to UCB
within five (5) business days after the completion of the investigation. UCB
shall be responsible for determining, in its reasonable discretion, when a
complaint investigation has been completed and shall have sole responsibility
for responding to the complainant (if applicable).
 
CONTRACT ACCEPTOR shall notify UCB of an out-of-specification result pertaining
to a complaint sample within two (2) business days of the occurrence of the
out-of-specification result. Any out-of-specification results relating to the
product complaint sample must be investigated as described in section
“Stability”.
 
CONTRACT ACCEPTOR shall retain unused Product complaint samples conditions for a
minimum of ninety (90) calendar days after a copy of the complaint investigation
report has been sent to UCB

16.   RECALLS

UCB shall have sole responsibility for initiating and managing any recall of the
PRODUCT. UCB shall notify CONTRACT ACCEPTOR prior to initiating any recall of
the PRODUCT.
 
Upon receiving, from any governmental or regulatory authority having
jurisdiction, any direction to recall any of the PRODUCT from the market, the
receiving party shall immediately notify the other party.

17.   CONTROL DOCUMENTS AND CHANGE CONTROL IMPLEMENTATION

Any change(s) made to the specifications, Master Production and Control records
or other established control documents including but not limited to the
manufacturing process and/or analytical methods which may affect the quality or
performance of the PRODUCT or exceed validation parameters or regulatory filings
must be approved by UCB in writing, prior to implementation for routine
production or release of any lot made after the revision. Documents referenced
in this section must be amended as required by the PRODUCT application or
licence or as required by applicable laws, rules, regulations, or regulatory
agencies.
 
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Both parties shall obtain all regulatory approvals prior to implementation.
 
Change control documentation initiated by CONTRACT ACCEPTOR will be forwarded to
UCB UCB will process the change via UCB change management procedure and provide
notification of approval/rejection to CONTRACT ACCEPTOR within ten (10) business
days. If more than ten (10) days elapse, UCB will notify CONTRACT ACCEPTOR and a
revised completion date will be agreed upon.
 
Change control documentation initiated by UCB will be forwarded to CONTRACT
ACCEPTOR for their evaluation. If CONTRACT ACCEPTOR agrees with proposed change,
UCB will approve proposed change and provide CONTRACT ACCEPTOR with UCB
approval. CONTRACT ACCEPTOR will then process and approve the change through
CONTRACT ACCEPTOR’s change control system within ten (10) business days. If more
than ten (10) days elapse, CONTRACT ACCEPTOR will notify UCB and a revised
completion date will be agreed upon.

18.   ANNUAL PRODUCT REVIEWS

CONTRACT ACCEPTOR shall prepare an Annual Product Review (APR) for the PRODUCT
covering the activities executed during the review period.
 
This report will be a review of any changes in the manufacturing, packaging,
testing, or validation of the product in the previous year ; a summary of lots
made, released, and rejected ; a stability report. Also, control charting or
trend analysis of key product parameters will be performed on an annual basis.
Any abnormalities will be explained in the annual review.
 
A copy must be forwarded to UCB within ten (10) business days after completion
of the APR.
 
The APR shall be completed within thirty (30) days of its due date, established
by a schedule mutually agreed upon by both parties.

19.   QUALITY

CONTRACT ACCEPTOR shall refrain from any activity which could adversely affect
the quality of the PRODUCT.
 
CONTRACT ACCEPTOR shall not use UCB product equipment to manufacture any product
containing any of the following compounds without UCB written prior consent:
 
***
 
Should CONTRACT ACCEPTOR become aware of any issue that could affect the
quality, safety identity, purity or efficacy of any UCB product produced at his
plant, he will notify UCB in writing within two (2) working days hours of the
discovery.

20.   TRANSFER OF TASKS TO THIRD PARTIES OR TO ANOTHER SITE

CONTRACT ACCEPTOR shall not transfer or subcontract any of the manufacturing,
packaging, storing, testing (in-process, release, stability) of the PRODUCT to
other sites or third parties without the prior written agreement of UCB, with
the exception of the list of subcontractors listed in annexe.
 
Validation testing may be conducted by a Third Party contractor chosen by
Manufacturer.

21.   GENERAL TERMS AND CONDITIONS

Materials Check
 
Unused materials received from UCB
 
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q  are and remain property of UCB,
 
q  mode of disposal :
 
to be returned to UCB or
 
to be destroyed by CONTRACT ACCEPTOR.
 
Upon expiration or termination of the Agreement for any reason whatsoever,
CONTRACT ACCEPTOR shall return to UCB all documentation handed over to him;
 
batch documents, samples, etc. shall be kept:
 
q  at UCB;
 
q  at CONTRACT ACCEPTOR
 
for a period of (see point 3 - Retention).
 
Changes to this GMP-AGREEMENT

Any additions, changes or cancellations of parts of this GMP-AGREEMENT are to be
made in written form such modifications will involve version control of the
document. Modifications shall be conducted through the designated Quality
Assurance representatives of both companies.

Duration

Unless provided otherwise in a FRAME AGREEMENT (if any) between the Parties
dated ________, this GMP-AGREEMENT is valid for an undetermined period of time.
Termination terms are as stipulated in the FRAME AGREEMENT. This GMP-AGREEMENT
shall automatically come to an end simultaneously with the FRAME AGREEMENT. Any
section of this agreement which has a predefinite retention, survival or
maintenance period (for example raw date storage, product complaints, sample
retention) shall survive the termination of this Agreement for the period
defined in the appropriate section.

Storage

CONTRACT ACCEPTOR shall store the active substances, auxiliary and packaging
materials as well as the (finished) product in suitable, if necessary, air
conditioned rooms under sufficient control so as to prevent their deterioration
and theft, in the conditions specified in appendix XXX.

Confidentiality

Both parties will treat as confidential all data supplied by the other in
connexion with the Manufacture/Control of the PRODUCT.

Security

CONTRACT ACCEPTOR has and will maintain controlled access to his premises.
 
22.   DOCUMENTS TO BE SUPPLIED TO UCB

CONTRACT ACCEPTOR shall supply the following documents to UCB and shall keep the
validity of the documents under 5.1 and 5.2 in force throughout the duration of
the GMP-AGREEMENT:  On request  Always
 
22.1.
Copy of latest manufacturing licence from the relevant governmental or other
competent authorities
 
[ ]
 
[X]
 

 
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22.2.
 
Copy of site master file (at contract signature, and at every renewal)
[X]
 
[ ]
 
22.3.
 
Recipe (complete formula) CONTRACT ACCEPTOR applies (once, before starting and
at every new version)
[X]
 
[ ]
22.4.
 
Copy of the manufacturing instructions (batch sheets) including the in-process
controls in place (once, before starting)
[X]
 
[ ]
 
(at every new version)
[ ]
 
[x]
 
 
Data on the validated method of analysis used including the specifications
 
     
–  Active ingredients
[X]
[ ]
 
–  The excipients
[X]
[ ]
  –  The primary packaging material
[X]
[ ]
 
–  The finished PRODUCT (finished pack)
 
[X]
[ ]
22.5.
 
Results of the stability data when applicable
[X]
22.6.
 
With every batch of the end PRODUCT(s), CONTRACT ACCEPTOR shall address
     
–  Batch-specific analytical report
[X]
[ ]
  –  Batch-specific certificate of analysis              
To the Quality Assurance Department of UCB
[ ]
[X]

  
22.7.
 
Certification by a qualified person of the Quality Assurance Department of
performance of a review of the batch documentation including the IPC and
monitoring data and of the completeness and conformity of the results.
 
[ ]
[X]
 
CONTRACT ACCEPTOR immediately inform UCB in the event of significant deviations
observed during production, quality control and/or batch record review.
 
[ ]
[X]
22.8.
 
Result of analysis (measured results) for the following items used for the
batches concerned
      –  Active ingredients
[X]
[ ]
  –  Excipients
[X]
[ ]
 
–  Primary packing materials
[x]
[ ]

Done in two copies, each party having received its copy.

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CONTRACT ACCEPTOR   UCB      
____________________
 
_____________________ 
Name:
 
Name:
Title:
 
Title:
                       
____________________
 
_____________________
Name:
 
Name:
Title:
 
Title:
           
Place:
 
Place:
Date:
 
Date:

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LIST OF EXHIBITS TO THE GMP-AGREEMENT BETWEEN UCB AND CONTRACT ACCEPTOR
 
Exhibit 1:  The Product
 

·    
Product formulation

 

·    
Product specification

 

·    
(Master) manufacturing instructions/Bill of Materials or equivalent

 

·    
QC method of analysis (including stability methods if any)

 

·    
Storage conditions

 

·    
Shelf life - bulk - finished product

 

·    
Primary container

 

·    
Shipping conditions

 
Exhibit 2:  The Raw Materials supplied by UCB including starting materials,
reagents, solvents, process aids and primary packaging.
 

·    
List

 

·    
Specifications

 

·    
Methods of analysis

 

·    
Storage conditions

 

·    
Shelf life

 

·    
Approved/authorized/certified suppliers/manufacturers

 

·    
Scientific data necessary for cleaning validation (LD50, toxicity, solubility,
product dose per patient)

 

·    
Toxicity data (material safety data sheet)

 
Exhibit 3:  The Raw Materials supplied by CONTRACT ACCEPTOR
 

·    
List

 

·    
Specifications

 

·    
Methods of analysis

 

·    
TSE/solvent information

 

·    
Approved/authorised/certified suppliers/manufacturers

 
Exhibit 4:  Packaging Materials
 
Exhibit 5 :  Reworking

Exhibit 6:  Administrative Information

Contract prepared by :
 
Primary contact people:
 
UCB
David Killick
Quality Assurance Manager
UCB
Unit 11-14 Foster Avenue
Woodside Park
 
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Dunstable
Bedfordshire
LU5 5TA
Tel: +44 (0) 1582 813120
Fax: +44 (0) 1582 813151
e-mail : david.killick@celltechgroup.com
after 16/05/05 : e-mail : david.killick@ucb-group.com
 
Second contact people
 
It is the responsibility of both parties to keep this contact list up to date.
 
The exhibits may be updated independently from the core agreement. The revised
versions become part of the agreement (WHEN ?)
 
UCB will be responsible for the maintenance of exhibits and for ensuring that
the information is in compliance with the Marketing Authorisations.
 
UCB will provide specific information and will advise CONTRACT ACCEPTOR of any
changes through formalised change control procedures.
 
 
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SCHEDULE 3
 
***

 
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SCHEDULE 4
 
 
List of Manufactured Products
 

 
***
 

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SCHEDULE 5
 

***
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Annex 3

***
 
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Annex 4

***
 

 
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SCHEDULE 6
 

***
 
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Appendix I
 

***
 
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Appendix II
 
***
 
 
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