Exhibit 10.11


 


CONFIDENTIAL TREATMENT REQUESTED


 


INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED IS OMITTED 

AND NOTED WITH “****”.

AN UNREDACTED VERSION OF THIS DOCUMENT HAS ALSO BEEN PROVIDED TO THE 

SECURITIES AND EXCHANGE

COMMISSION.


 


CONFIDENTIAL


 


Manufacturing and Service Contract

For Commercial and Developmental Products


 


Lantheus Medical Imaging, Inc.

08/01/2008


 


[SEAL]


 


Manufacturing
and Service Contract (BVL and Lantheus)


 


i

















 


Table of Contents


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
  DESCRIPTION
  OF WORK

  	
  7

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
  MANUFACTURE

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
  VOLUMES

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
  FORECASTS
  AND PURCHASE ORDERS

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
  PRICE
  AND PAYMENT

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
  QUALITY
  AGREEMENT

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
  INDEMNIFICATION

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
  CONFIDENTIALITY

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
  INTELLECTUAL
  PROPERTY

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
  TERM
  AND TERMINATION

  	
  30

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
  NOTICES

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE 14

  	
  WAIVER

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE 15

  	
  ASSIGNMENT
  OF AGREEMENT

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE 16

  	
  GOVERNING
  LAW

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE 17

  	
  FORCE
  MAJEURE

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE 18

  	
  TITLE
  OF GOODS

  	
  36

  
	
   

  	
   

  	
   

  
	
  ARTICLE 19

  	
  ENTIRE
  AGREEMENT

  	
  36

  
	
   

  	
   

  	
   

  
	
  ARTICLE 20

  	
  SEVERABILITY

  	
  36

  
	
   

  	
   

  	
   

  
	
  ARTICLE 21

  	
  INDEPENDENT
  CONTRACTORS

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE 22

  	
  AMENDMENTS

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE 23

  	
  HEADINGS

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE 24

  	
  REVIEW
  BY LEGAL COUNSEL

  	
  37

  



 


ii

















 


	
  ARTICLE 25

  	
  RECALL

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE 26

  	
  ENGLISH
  LANGUAGE

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE 27

  	
  EXPORT
  PROVISION

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE 28

  	
  ACKNOWLEDGEMENT
  OF COMPETITION FOR COMPETITIVE PRODUCTS OR SERVICES

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE 29

  	
  CHANGE
  NOTIFICATION

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE 30

  	
  BOOKS
  AND RECORDS

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE 31

  	
  BINDING
  EFFECT

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE 32

  	
  USE
  OF NAME AND RESERVATION OF RIGHTS

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE 33

  	
  COUNTERPARTS

  	
  39

  



 


iii

















 


ATTACHMENTS


 


Attachment “A” — Product Supplements (“A1”
for the first product, “A2” for the second Product, etc.)


 


A1.1  Product Identification


A1.2  Product
Testing Specification


A1.3  Materials
Supplied By Customer And BVL


A1.4  Forecasts


A1.4.1  Five
Year Forecast


A1.4.2  12
Month Rolling Forecast


A1.5  Pricing


A1.6  Territory
(for Products identified in A1.1)


 


Attachment “B” – Purchase Order
Requirements


Attachment “C” – Monthly Storage Fees


Attachment “D” – Documents Supplied with
Batch Release


Attachment “E” – Quality Agreement


Attachment “F” – Customer Supplied
Equipment


 


Additional Attachments for Use if “Territory” for any
Product includes the European Union:


 


Attachment “G” – Representation regarding
Customer’s Qualified Person


 


iv














 


Manufacturing and Service Contract

For Commercial and Developmental Products


 


This
Manufacturing and Service Contract for Commercial and Development Products
(hereinafter this “Agreement”) is made effective as of August 01,
2008 (the “Effective Date”), by Ben Venue Laboratories, Inc., a
corporation organized and existing under the laws of Delaware, with its
principal office at 300 Northfield Road, Bedford, Ohio, 44146 (hereinafter “BVL”
and as further defined in Article I) and Lantheus Medical Imaging, Inc.,
a corporation organized and existing under laws of Delaware, with its principal
place of business at 331 Treble Cove Road, North Billerica, MA 01862
(hereinafter “Customer”). BVL and Customer may be referred to in this
Agreement jointly as the “Parties” or individually as a “Party.”


 


WITNESSETH:


 


WHEREAS,
Customer is the owner or licensee of all rights to certain proprietary
technical information, patents and/or patent applications relating to Product(s) (as
defined below); and


 


WHEREAS,
BVL provides services to the pharmaceutical industry as a contract manufacturer
which supplies its customers with sterile finished dosage forms which it has
converted from materials supplied by those customers and/or supplied by BVL and
provides Developmental services for sterile dosage forms; and


 


WHEREAS,
Customer and BVL desire to formalize their relationship through this Agreement
for the Development and Manufacture of Product and intend for this Agreement to
govern the Parties’ relationship; and


 


WHEREAS,
BVL possesses the personnel and Facilities (as defined below) for the
Development and Manufacturing of finished sterile dosage forms of Product and
is willing to provide Development services, to allocate and commit resources
and Manufacture (as defined below) such Product(s) pursuant to the terms
of this Agreement; and


 


WHEREAS,
Customer and BVL are parties to that certain Contract Manufacturing Agreement
dated as of June 25, 1993 (the “1993 Agreement”) pursuant to which, among
other things, BVL manufactures and supplies certain products to Customer and
Customer purchases certain quantities of such products from BVL, which
agreement is hereby terminated as of the Effective Date pursuant to the terms
hereof; and


 


NOW,
THEREFORE, Customer and BVL agree as follows:


 


ARTICLE 1 — DEFINITIONS


 


In
this Agreement, the following terms shall have the meanings set forth below:


 


1.1.
“Act” means the US Federal Food, Drug and Cosmetic Act of 1938, the
Public Health Service Act of 1944 and the regulations promulgated under that
Act, as may be amended from time to time.


 


1.2.
“Active Pharmaceutical Ingredient” or “API” shall mean bulk
supplies of the pharmacologically active compound(s) comprising Product
and listed in each Attachment “A#.3”, (i.e., A1.3)
which Customer will provide to BVL in bulk form, from time to time, for the
sole purpose of Development and Manufacture of Product for Customer.


 


1

















 


1.3
“Affiliate” shall mean: (a) any corporation or business entity,
fifty percent (50%) or more of the voting stock or voting equity interests of
which are owned directly or indirectly by a Party; or (b) any corporation
or business entity which directly or indirectly owns fifty percent (50%) or
more of the voting stock or voting equity interests of a Party; or (c) any
corporation or business entity directly or indirectly controlling or under
control of a corporation or business entity as described in (a) or (b).
For the purposes of this Agreement, the “Affiliate” shall mean, with
respect to BVL, Bedford Laboratories (along with its successors and assigns) (“Bedford”).
For the avoidance of doubt, this agreement will not be binding on affiliates of
BVL other than (i) Bedford, (ii) BVL’s Agents as authorized
hereunder, and (iii) as set forth in Articles 9 and 11.


 


1.4
“Agent” or “Agents” shall mean any individual or entity which
performs on behalf of or for a Party under this Agreement, and in the case of
any such individuals, the term “Agent” shall be understood to include the
entity employing such individual.


 


1.5
“Agency” and “Agencies” shall mean the regulatory entities for
each respective country, states and/or territories as identified in and limited
to each Product’s definition of the Territory (i.e., for
product A1 see Attachment A1.6); including; if Territory includes the United
States, the FDA; if Territory includes Canada and its Provinces, the Canadian
Health Protection Branch; if Territory includes any member state of the
European Union, the European Agency of Evaluation of Medicinal Products
(hereunder the “EMEA”); if Territory includes Japan, the Japanese
Ministry of Health, Labor and Welfare; (b) any successor organization of
any such entity; and (c) any other government regulatory authority with
regulatory oversight of the Manufacturing, the Facilities or use of Product in
or for its Territory, as such other authorities are mutually agreed upon by the
Parties in writing.


 


1.6.
“Applicable Law” shall mean all applicable ordinances, rules,
regulations, laws, guidelines, guidance, statutes, requirements and court
orders of any kind whatsoever, as amended from time to time, including the
bodies of law, regulations (including without limitation, cGMP or its
equivalent) and environmental, health and safety for each country of the
Territory.


 


1.7.
“Batch” shall mean a specific quantity of Product that is intended to be
of uniform character and quality and is produced during the same cycle of
Manufacture as defined by the applicable Batch Record. The Batch size for each
Product is specified in each Attachment “A#.1” (i.e.,
A1.1) to this Agreement. “Lot” shall have the same meaning as Batch.


 


1.8.
“Batch Records” shall have the meaning ascribed thereto in Section 3.9.2.


 


1.9.
“BVL Indemnitees” shall have the meaning ascribed thereto in Section 8.1.


 


1.10.
“BVL Technology” shall mean the Technology of BVL that: (a) exists
prior to the Effective Date; or (b) is developed or obtained by or on
behalf of BVL independent of this Agreement or the 1993 Agreement and without
reliance upon Product, any API supplied by Customer, or Confidential
Information or Composition of Customer; or (c) is a BVL Invention or BVL’s
Other Invention.


 


1.11.
“cGMP” shall mean, with respect to each Product, the Current Good
Manufacturing Practices in such Product’s Territory (Attachment “A#.5”, i.e., A1.6) as may be amended or supplemented from time to
time; including (i) if in the United Stated, then cGMP shall include
without limitation, the Current Good Manufacturing Practices set forth in 21
C.F.R. 210 and 21 C.F.R. 211 and relevant FDA guidance documents; and (ii) if
in the


 


2

















 


European
Union, then cGMP shall include, without limitation, the practices and standards
described in the Guide to Good Manufacturing Practices for Medicinal Products
as promulgated by the European Commission under European Directive 2003/94/EC,
as may be amended or supplemented from time to time and the ICH Harmonised
Tripartite Good Manufacturing Practice Guide For Active Pharmaceutical
Ingredients (ICH Q7), as each may be amended from time-to-time, or any
successors thereto. In the event of any conflict among Applicable Laws
pertaining to the Manufacture of Product, the most stringent among the
conflicting Applicable Laws will govern unless the Parties agree otherwise in
writing.


 


1.12.
“Certificate of Analysis” shall mean a summary of the test results,
including the test methods, specification parameters, and the pass/fail
criteria, used in the determination of the quality and suitability of a
specific Batch of Product, including review and approval by the appropriate
quality assurance department at BVL.


 


1.13.
“Certificate of Compliance” shall mean a document, signed by an
authorized representative of BVL, attesting that a particular Batch was
manufactured in accordance with cGMP, the Specifications and other Applicable
Law.


 


1.14.
“Claims” shall have the meaning ascribed thereto in Section 8.1.


 


1.15.
“Composition” shall mean any components and/or raw materials other than
API that are used in the Manufacturing of Product and listed in each Attachment
“A#.3” (i.e., A1.3) hereto, which may be supplied by BVL or Customer as
required pursuant to such Attachment.


 


1.16.
“Confidential Information” shall have the meaning set forth in Section 9.1.


 


1.17.
“Contract Quarter” shall mean each three (3) month period
commencing on January 1, April 1, July 1, or October 1,
during the term of this Agreement, provided, that the first Contract
Quarter shall commence on the Effective Date and end on the last day of the
then-existing quarter and the last Contract Quarter shall end on the expiration
or termination of this Agreement.


 


1.18.
“Contract Year” shall mean each twelve (12) month period commencing on January 1,
and each successive twelve month period thereafter ending on December 31
of the same year, provided that regardless of the Effective Date, the
Contract Year of the initial year of the Agreement shall commence on the
Effective Date and end on December 31 of the initial year, the Contract
Year for the final year of the Agreement shall end on December 31 or in
the event of a termination of the Agreement, upon the effective date of
termination, whichever occurs first.


 


1.19.
“Customer Indemnitees” shall have the meaning ascribed thereto in Section 8.2.


 


1.20.
“Customer Technology” shall mean all: (a) API and Customer-supplied
Composition; (b) Products and any intermediates or derivatives thereof; (c) Specifications;
(d) the Technology of Customer owned, developed or obtained by or on
behalf of Customer or Customer’s Affiliates prior to the Effective Date, or
owned, developed or obtained by or on behalf of Customer or its Affiliates
independent of this Agreement and without reliance upon the Confidential
Information, Improvements or Technology of BVL or the 1993 Agreement; and (e) Customers’
Improvement.


 


3

















 


1.21.
“Development,” “Develop,” “Developmental” shall mean all
of the development services provided in support of the Manufacture of Product
as defined by proposals submitted by BVL to Customer or submitted by Customer
to BVL and mutually accepted by both parties.


 


1.22.
“Disclosing Party” means the party which is directly or indirectly
disclosing Confidential Information to the Receiving Party pursuant to this
Agreement. The Disclosing Party may also act as the Receiving Party of the
other party’s Confidential Information.


 


1.23.
“Drug Master File” or “DMF” means a drug master file providing
detailed information about the facility, the equipment and manufacturing
processes relating to the API and Product and such other information as
required by Applicable Laws, including 21 C.F.R. Section 314.420 and to
the extent applicable any equivalent requirement in under Applicable Laws
including as required by the Committee for Proprietary Medicinal Products Note
for Guidance on the European Drug Master File Procedure for Active Ingredients.


 


1.24.
“Equipment” shall mean the equipment described in the Master Batch
Record which is: (a) owned or leased by BVL; or (b) if supplied by
Customer, then identified in Attachment “F” to this Agreement, and in each case
will be used by BVL for the Development and/or Manufacture of Product in
accordance with the terms and conditions of this Agreement.


 


1.25.
“Facility” and “Facilities” shall mean BVL’s Facility located at
300 Northfield Road, Bedford, Ohio, and 19200 Treat Road, Walton Hills, Ohio,
all other BVL facilities used in the Manufacturing of Product; provided,
that such other facilities have been agreed upon by the Parties in writing in accordance
with Section 3.2.


 


1.26.
“FDA” shall mean the U.S. Food and Drug Administration and any successor
agency.


 


1.27.
“FDCA” shall mean the United States Federal Food, Drug and Cosmetic Act,
21 U.S.C. §§301 et seq., as amended from time to time.


 


1.28.
“Firm Order” shall mean a binding commitment, as established by a
Purchase Order issued by Customer, to have a Batch of Product Manufactured by
BVL hereunder.


 


1.29.
“Five-Year Forecast” shall have the meaning ascribed thereto in Section 5.1.


 


1.30.
“Force Majeure” shall have the meaning set forth in Section 17.1.


 


1.31.
“Forecasts” shall mean the collective reference to the Five-Year
Forecast and the Rolling Forecast.


 


1.32.
“Immediately” shall mean within twenty-four (24) hours.


 


1.33.
“Improvements” shall mean all Technology and discoveries, inventions,
developments, modifications, innovations, updates, enhancements, improvements,
writings or rights (whether or not protectable under patent, trademark,
copyright or similar laws) that are conceived, discovered, invented, developed,
created, made or reduced to practice in the Manufacture of Product or otherwise
arise in the performance of any services related to the Product under this
Agreement.


 


4

















 


1.34.
“Investigation” shall mean a detailed and thorough review of any
Manufacturing deviation (or any other matter requiring review pursuant to the
terms of this Agreement) that is documented in a written report and approved at
a senior management level. Each such written report shall include, without
limitation, a detailed description of the atypical event, deviation or other
matter, all steps taken to review such event, deviation or other matter, a root
cause analysis, which other Lots of Customer Product were affected, if any, the
proposed and/or taken corrective actions with applicable timelines and a
recommendation for permanent correction, if applicable.


 


1.35.
“Manufacture,” “Manufacturing,” and “Manufactured” shall
mean all operations of BVL in the scheduling, production, packaging, labeling,
warehousing, quality control testing (including in-process, release and
stability testing when applicable), release and shipping of Product to meet the
Specifications for Products.


 


1.36.
“Manufacturing Process” shall mean any and all processes (or any step in
any process) used or planned to be used by BVL to Manufacture Product, as
evidenced in the Batch Records.


 


1.37.
“Manufacturing Date” shall mean the date on which BVL commences
manufacture of a Batch.


 


1.38.
“Marketing Authorization” shall mean a New Drug Application filed with
an Agency outside the United States.


 


1.39.
“Master Batch Record” or “MBR” means the document containing the
mutually agreed to Manufacturing Process including but not limited to the
instructions for formulation, filling, lyophilization if applicable, packaging,
labeling and specifications for components and raw materials to be used in the
Manufacture of the Product. In-process and finished Product Specifications for
the Product will be referenced in the Master Batch Record. It may also be
referred to as the “Master Production Record” or “MPR”. The MBR
may be amended from time to time by mutual written agreement of the Parties.


 


1.40.
“NDA” shall mean a New Drug Application filed with the FDA.


 


1.41.
“Obsolete Materials” shall have the meaning set forth in Paragraph
6.3.2.


 


1.42.
“Party” or “Parties” shall have that meaning as set first in the
first unnumbered paragraph of this Agreement.


 


1.43.
“Product” and “Products” shall mean each of the final packaged
dosage forms of the product(s) listed separately in each Attachment “A#.1”
(i.e., A1.1) to this Agreement,
as each such Attachment “A” may be amended from time to time in writing by the
Parties.


 


1.44.
“Promptly” shall mean within thirty calendar (30) days.


 


1.45.
“Purchase Order” shall mean a written form submitted by Customer to BVL
authorizing the Manufacture of Product, Development or other services as
specified on the document which references this Agreement or a quotation number
provided by BVL or other document provided by BVL outlining the services to be
performed, the price to be paid, and contains each of the requirements set
forth on Attachment “B”.


 


5

















 


1.46.
“Qualified Person” shall have the meaning set forth in Article 48
of the European Directive 2001/83/EC, and as set forth elsewhere within the EU
regulations, as may be amended from time to time.


 


1.47.
“Quality Agreement” shall mean the separate quality agreement to be
executed at the same time as this Agreement by BVL and Customer and attached
hereto as Attachment “E”. The Quality Agreement constitutes an integrated part
of this Agreement and defines the quality assurance and regulatory
responsibilities of the Parties as they relate to this Agreement.


 


1.48.
“Receiving Party” shall have the meaning ascribed thereto in Section 9.1.


 


1.49.
“Records” shall have the meaning ascribed thereto in Section 3.3.


 


1.50.
“Relevant Product” shall mean the Product; any product containing API,
or any product developed or manufactured using the same API which competes in
the same diagnostic class as the Product; and any services in providing or
manufacturing the foregoing. For the avoidance of doubt, BVL shall not be
prevented from manufacturing a product containing the same API which does not
compete in the same diagnostic class as the Product.


 


1.51.
“Representative” shall have the meaning ascribed thereto in Section 2.5.


 


1.52.
“Rolling Forecast” shall have the meaning ascribed thereto in Section 5.1.2.


 


1.53.
“SOP’s of a Party” shall mean such Party’s standard operating procedures
as defined in the controlled written documentation of such Party.


 


1.54.
“Specification” or “Specifications” shall mean the quality
standards, including tests, analytical procedures and acceptance criteria that
are established to confirm the quality of Product which are mutually agreed to
in writing and are contained or referenced in the Master Batch Record for
Product or as otherwise mutually agreed to in writing by the Parties.


 


1.55.
“Technology” shall mean all methods, techniques, trade secrets,
copyrights, know-how, data, documentation, regulatory submissions, Product
Specifications (which are solely owned by Customer, except for those portions
of such Specifications that include routine BVL policies, procedures, etc.
and that are not Product-specific) and other intellectual property of any kind
(whether or not protectable under patent, trademark, copyright or similar
laws).


 


1.56.
“Temporary Storage Period” shall have that meaning ascribed in Section 6.5.


 


1.57.
“Territory” shall mean those countries and territories set forth in each
Attachment “A#.6” (i.e., A1.6)
for the Product identified in each such Attachment “A,” it being understood
that different Products may have different Territories for purposes of this
Agreement.


 


1.58.
“Third Party” shall mean any person or entity other than a Party to this
Agreement or such Party’s Affiliate.


 


1.59.
“United States” or “U.S.” shall mean the United States of
America, its territories and possessions including Puerto Rico.


 


6

















 


ARTICLE 2 — DESCRIPTION OF WORK


 


2.1.
Equipment.


 


2.1.1. Equipment owned by BVL and located at the
Facility, shall not be dedicated to any single customer unless otherwise agreed
to in writing, but shall be available for Manufacturing of Product according to
BVL’s Manufacturing Processes requirements.


 


2.1.2. Customer and BVL shall mutually agree on the
terms and conditions of any special equipment required to be purchased for the
Manufacturing of the Product(s). Equipment which Customer has purchased is
identified on Attachment “F” (title to which shall at all times remain with
Customer) and shall be solely dedicated to the production of Products
hereunder. Customer may at times authorize BVL, with BVL’s written consent, to
select and order equipment that will be invoiced to Customer and for which
Customer agrees to be financially liable. BVL shall, at all times and at its
sole cost, be responsible for all normal and routine maintenance to the
Equipment identified on Attachment “F” in accordance with current BVL’s SOP’s,
which procedures have been reviewed and approved by Customer. Customer shall,
at all times and at its sole cost, be responsible for upgrades, repairs,
replacement, non-routine maintenance and/or enhancements to the Equipment
identified on Attachment “F” and BVL shall obtain Customer’s prior written
approval prior to incurring such costs. Risk of loss of, all Equipment
identified on Attachment “F” shall be retained by BVL to the extent that loss
and/or damage of equipment is caused by BVL’s or BVL’s Agent’s act of
negligence, breach, or willful misconduct. For the avoidance of doubt, BVL
shall not be liable or bear risk of loss for repairs or upgrades to the
equipment except if caused by BVL’s failure to perform maintenance as required
pursuant to this Agreement.


 


2.2.
API and Composition.


 


2.2.1. Customer Supply of API &
Composition. Customer shall, at its own expense, supply BVL with sufficient
quantities of API and Customer-supplied Composition, including API, needed for
the Development and/or Manufacture of Product, as specified in the supporting
Purchase Orders, in order to meet Customer’s requirements for commercial and/or
Developmental quantities of Product in finished dosage from. BVL shall have no
liability for quantities of API or Customer-Supplied Composition shipped in
excess of the requirement to Manufacture the amount of Product required to fill
open Purchase Orders, but shall use such API or Composition for future Purchase
Orders.


 


2.2.2. Certification of  Customer Supplied Composition &
Equipment. Upon BVL’s request, Customer shall provide written confirmation
of the review and approval of the quality systems of its designated vendors for
Customer-supplied Composition/Equipment.


 


2.2.3. Reports for Customer Supplied Composition.
BVL shall: (i) provide Customer with standard inventory reports for all
API and Customer-supplier Composition for the prior month not later than the
fifth (5th) business day
of each month; (ii) notify Customer when the amount of API or
Customer-supplied Composition available at BVL reaches the minimum quantity of
materials as agreed


 


7

















 


by
both Parties; (iii) not provide API or Customer-supplied Composition to
any Third Party without the express prior written consent of Customer; (iv) not
use API or Customer-supplied Composition for any purpose other than the
Manufacture of Product or conducting other services under this Agreement,
including, without limitation, not to analyze, characterize, modify or reverse
engineer any API, or take any action to determine the structure or composition
of any API, unless the foregoing is required under this Agreement; and (v) destroy
or return to Customer or its designee all unused quantities of API and
Customer-supplied Composition according to Customer’s written directions at
Customer’s cost. If no written directions are provided to BVL within thirty
(30) days following termination of this Agreement, or any postponement or
cancellation of a Purchase Order, then without BVL having any liability to
Customer, BVL may dispose of such API or Composition upon not less than ten (10) days
prior written notification to Customer of BVL’s intent to dispose of such API
or Composition per cGMP(s). Customer shall be financially liable for the cost
or expense associated with any such disposal.


 


2.2.4. Annual Physical Audit. In addition to
Customer’s annual GMP audit, Customer will be entitled to perform an annual
physical audit of Customer-supplied Composition at a date and time to be agreed
upon by both Parties. If the scope of the audit warrants (e.g., significant
number of materials, number of personnel in attendance, BVL’s involvement, etc.)
a quotation will be provided to Customer.


 


2.2.5. ID Only Verification. Customer must
give written permission to BVL to do ID-only, by-label verification of any API
or active drug substance if no identification test is requested by Customer to
be performed by BVL.


 


2.2.6. Release of Materials. BVL will release
all materials provided by BVL. In the event the Territory (Attachment “A#.6”)
includes the European Union, then Customer’s Qualified Person shall be
responsible to certify compliance of the Customer-supplied API and for the
release of Product within the European Union and for EU Directives, standards
and rules, including without limitation, Article 51(3) of Directive
2001/83/EC, with respect to the Product(s).


 


2.2.7. Quality Control Testing Requirements.
Customer will provide, or cause BVL to Develop at mutually agreed upon fees,
written quality control testing requirements, methods, specifications and
reference standards for the API and Product, which shall be performed by BVL in
accordance with the Specifications. Customer will approve in Writing initial
testing documents, the Master Production Record and any revisions of the
documents thereafter. Revisions of approved testing documents requested within
eight (8) weeks prior to the Manufacturing Date or other services related
to the subject Product may cause a delay or postponement of such Manufacturing
and/or other services requested by the Customer. BVL shall not be responsible
for any losses or other expenses resulting from any such delay. Upon mutual
agreement between the Parties which shall not be unreasonably or untimely
withheld, BVL shall make revisions to the testing documents or MBR for a
Product that are requested by Customer. Further, BVL shall be entitled to
reasonable reimbursement for any and all additional costs  and expenses incurred by BVL in connection
with any such revision or delay as agreed upon by the Parties. The Parties
shall cooperate in good faith to reach agreement for the changes and the
associated costs.


 


8

















 


2.2.8. Disposition of Tailings/Rejects.
Customer is responsible for notifying BVL with instruction for disposition of
tailings and rejects, which will be incorporated into the Master Batch Record
and include a shipment address for tailing and rejects if Customer requests
return of tailings and rejects.


 


2.2.9. Customer Liable for Changes to BVL
Composition. BVL shall procure, at its cost, all BVL-supplied Composition
listed as BVL’s responsibility in Attachment A#.3 for a Product in order for
BVL to meet Customer’s Purchase Orders made pursuant to this Agreement. In the
event that Customer makes changes to the vendor and/or specifications of any
BVL-supplied Composition, any additional expense due to such change shall be
borne by the Customer as agreed upon, and the Parties shall negotiate, in good
faith, an appropriate adjustment to the purchase price of the Product to
reflect any increase or decrease in costs due to such changes. If Customer
requires BVL utilize a specific vendor for any BVL supplied Composition and BVL
is reasonably unable to utilize such vendor, then if Customer requires such
vendor to be utilized, Customer shall have the responsibility to source such
Composition and provide to BVL pursuant to the terms of this Agreement, which
shall thereafter be deemed a Customer-supplied Composition under this
Agreement.


 


2.3.
Product Manufacture. Pursuant to the provisions of this Agreement, BVL
shall Manufacture Customer’s requirements for commercial and/or Development
quantities of Product in finished packaged dosage form as defined in each
Attachment “A#.1” (i.e., A1.1). For the avoidance of doubt, notwithstanding
anything in this Agreement to the contrary, such Product shall meet the
Specification, the requirements of cGMP and all Applicable Law. BVL, its Agents
and Bedford (and any business, operations, personnel or assets owned or
controlled by BVL and such Agents and any successors thereto, as the same may
be reorganized from time to time) shall not during the Term Manufacture for any
Third Party, directly or through any Third Party, any Relevant Product or
provide or cause to be or assist in providing any products or services
(including in manufacturing, development, or procurement) any Relevant Product,
only in each case with the prior written consent of Customer (which may be
given at its sole discretion).


 


2.4.
Development Services. Upon Customer’s request and at Customer’s expense,
BVL will perform Development services in accordance with proposals and
quotations that are: (a) submitted to Customer at Customer’s request by
BVL based on information provided to BVL by Customer; and (b) agreed upon
by both Parties in writing via a Purchase Order for the service that references
such applicable proposal or quotation.


 


2.5.
Representatives. Each Party shall appoint a representative having
primary responsibility for day-to-day interactions with the other Party for the
services under this Agreement (each, a “Representative”). Both Parties
shall use reasonable efforts to provide the other with at least forty-five (45)
days prior written notice on any change in its Representative. Except for
notices or communications required or permitted under this Agreement, which
shall be subject to Article 13, or unless otherwise mutually agreed by the
Parties in writing, all communications between BVL and Customer regarding the
conduct of the services under this Agreement shall be addressed to, or routed
directly through the respective Representatives of each Party, as appropriate.


 


9














 


ARTICLE 3 - MANUFACTURE


 


3.1.
BVL Compliance. BVL has obtained, and will maintain at its sole cost and
expense throughout the term of this Agreement, all licenses, permits,
certifications and approvals required under Applicable Law for its
Manufacturing Facilities and for its performance under this Agreement; BVL’s
Facilities conform, and will throughout the term of this Agreement conform to
cGMP and other Applicable Law.


 


3.2.
Facility. BVL shall perform all services under this Agreement at the
Facility, and shall hold at such Facility all Equipment, API, Composition and
other items used in such services. BVL shall not change the location of such
Facility or use any additional facility for the performance of services under
this Agreement without at least **** (****) calendar days prior written notice
to, and prior written consent from, Customer, which consent shall not be
unreasonably withheld or delayed (it being understood and agreed that Customer
may withhold consent pending completion of a quality assurance audit and/or
regulatory impact assessment satisfactory to it including without limitation an
environmental health and safety audit of the new location or additional
facility, as the case may be); provided, that the Parties will meet and confer
to discuss allocation of any applicable costs and expenses in connection with
any change of location of the Facility or use of any additional facility for
BVL’s convenience. BVL will be responsible for all applicable costs and
expenses in connection with any change of locatiion of the Facility or use of
any additional facility for BVL’s convenience (including costs for
qualification and validation batches). For the avoidance of doubt, it is the
Parties’ intent that changes to the Facility made by or on behalf of the
Customer, or for the convenience of Customer shall be borne by Customer;
changes to the Facility made by or on behalf, or for the convenience of BVL
shall be borne by BVL. In the event that a change to the Facility is initiated
by BVL, the Parties shall meet and confer on the scope of reasonable regulatory
requirements to be provided by BVL. In the event the Parties cannot in good
faith reasonably agree to such filing requirements, then the Parties shall
mutually agree upon a qualified, neutral regulatory expert who shall fully and
finally allocate the costs after reviewing and hearing each Parties arguments.
The costs of the expert shall be borne equally by the Parties. BVL shall
maintain, at its own expense, the Facility and all Equipment required for the
Manufacture of Product in a state of repair and operating efficiency consistent
with the requirements of the cGMP and all other Applicable Law.


 


3.3.
Change Control. Any changes to the Specification, Manufacturing Process,
Equipment utilized to Manufacture such Product, its testing procedures,
validation, suppliers of raw materials and components, or documentation systems
that are specific or related to Product that would likely impact any government
submission or approval pending, received and/or required for such Product,
either foreign or domestic as applicable for the Territory, shall be made only
with the prior written consent of the Parties and in accordance with change
control provisions of the Quality Agreement and Section 6.2.1. In the event any
such changes are required by an Agency, BVL will Promptly notify Customer.
Customer may, from time to time, propose to change Specifications which shall
require mutual written consent of the Parties, and BVL will not unreasonably or
untimely withhold its consent to such change and will use commercially
reasonable efforts to implement such change. For the avoidance of doubt it is
the Parties’ intent that the costs of any changes made pursuant to this Section
3.3 at Customer’s request shall be borne by Customer, and the costs of any
changes made pursuant to this Section 3.3 made for the convenience of BVL shall
be borne by BVL. In the event that a change made pursuant to this Section 3.3
is initiated by BVL, the Parties shall meet and


 


10

















 


confer
on the scope of reasonable regulatory requirements to be provided by BVL. In
the event the Parties cannot in good faith reasonable agree to such filing
requirements, then the Parties shall mutually agree upon a qualified, neutral
regulatory expert who shall fully and finally allocate the costs after
reviewing and hearing each Parties arguments. The costs of the expert shall be
borne equally by the Parties.


 


3.4.
Product Compliance. Product delivered to Customer pursuant to this
Agreement shall conform to the Specification and be in compliance with all
Applicable Law, including but not limited to the requirements of cGMP. In the
event of conflicting Applicable Law, Product will comply with the most
stringent from the conflicting requirements unless otherwise agreed to by the
Parties.


 


3.5.
Regulatory Communications and Inspections. All information, documents
and updates with regard to the Manufacture of Product which are required by any
Agency shall be provided by BVL in a timely manner, and BVL shall submit to all
inquiries and inspections by any such Agency. All documents directly related to
Product and a summary of all information provided by BVL to any Agency shall be
provided to Customer in advance of submission to such Agency if feasible, and
in no case shall such documents be provided to Customer later than five (5) business
days after such documents and information are provided to any Agency. BVL shall
notify Customer immediately (or, if during a weekend, upon the next business
day) of all scheduled Product-specific Agency inspections and Customer shall
have the right to be present for all scheduled inspections relating to the
Manufacture of Product. Any and all written communications or notices of
inspection directly related to Product received from any Agency shall be
provided by Customer and BVL to the other party no later than five (5) business
days after such communications or notices are received by such Party; provided,
however, that if such document is from BVL, it may redact the
confidential information of Third Parties from such communications prior to
providing same to Customer.


 


3.5.1. BVL shall also notify Customer immediately of
any notices, observations or other written communications from such Agency regarding
any deficiencies that have or may have an adverse effect on the Product or BVL’s
ability to perform its obligations under the Agreement. Notwithstanding
anything to the contrary hereunder, Customer shall have the right to postpone
all pending and future Purchase Orders hereunder (and adjust all forecasts
accordingly) in the event of (i) any such notices, observations or
communications; (ii) any regulatory or other concerns under Applicable Law; (iii)
any material issues with the supply of Products, hereunder (including atypical
Manufacturing deviations of the sort requiring investigation hereunder); (iv) any
consent decree; or (v) violations of any of the Product quality provisions of
this Agreement.


 


3.5.2. To the extent BVL does not already have copies,
Customer shall provide BVL with copies of all Agency approval letters for
Product for both clinical studies and commercial use. In addition, Customer
shall provide BVL, on an annual basis, with its anticipated schedule of
material Agency regulatory filings for the next two calendar years. BVL
acknowledges that such schedule may change at any time.


 


3.5.3. BVL will provide, at Customer’s request, a
copy of the BVL Drug Master Files (DMFs) and authorization for FDA to access
the DMFs. This may be used by the Customer only to prepare any required
Regulatory filing. Any other use of the DMF shall require BVL’s prior written
approval.


 


11

















 


3.6.
Health, Safety and Environmental Compliance.


 


3.6.1. Dispensing and other Manufacturing operations
are to be performed by BVL using appropriate safety measures and containment
techniques as dictated by Applicable Law and industry standards. BVL shall be
solely responsible for implementing and maintaining health and safety
procedures for the Manufacture of Product and performance of services under
this Agreement and for the handling of any materials or hazardous waste used in
or generated by such activities. BVL, in consultation with Customer, shall
develop safety and handling procedures for API and Product; provided,
however, that Customer shall have no responsibility for BVL’s health and
safety program. The generation, collection, storage, handling transportation,
movement and release of hazardous materials and waste generated in connection
with the Manufacture of Product and other services under this Agreement shall
be the responsibility of BVL at BVL’s cost and expense, unless otherwise agreed
to in writing by the Parties for special situations or conditions. Without limiting
other legally applicable requirements, BVL shall prepare, execute and maintain,
as the generator of waste, all licenses, registrations, approvals,
authorizations, notices, shipping documents and waste manifests required under
Applicable Law. Notwithstanding the foregoing, Customer shall be solely
responsible for the disposal of any waste generated by Customer disposition of
Customer Supplied Composition or finished Product.


 


3.6.2. Customer has established a program for
systematic assessment of its suppliers’ EHS programs (“TPM EHS Assessment
Program”) and BVL agrees to participate and reasonably cooperate with
Customer in effectively implementing this TPM EHS Assessment Program.


 


3.6.3. BVL will review Customer’s TPM EHS Assessment
Program and, if applicable, provide quotations for additional resources
required to address the program. BVL policies will govern except in the event
that Customer is willing to bear the cost of compliance. Specially, BVL agrees
to:


 


3.6.3.1. Promptly respond to reasonable Customer
requests for non-confidential information made as part of TPM EHS Assessment
Program. Customer will provide a questionnaire to BVL and BVL is expected to
provide the complete response within thirty (30) calendar days;


 


3.6.3.2. Reasonably cooperate with Customer to
clarify and supplement any information related to its facilities and
operations; and


 


3.6.3.3. Provide to Customer, upon request, copies
of BVL’s environmental, health and safety permits required by any governmental
authority which are associated with the Products and all facility operations
related thereto.


 


3.6.4. BVL agrees that Customer or its appointed
Agent(s) (which Agent shall be disclosed to BVL not less than 30-days in
advance of an audit and which shall not be rejected by BVL in the absence of
good cause shown) shall be entitled to conduct inspections and audits upon
reasonable notice (at Customer’s cost) and mutually convenient times of any
areas or facilities used to produce the Products or required for production of
the Products, including for the following reasons


 


12

















 


3.6.4.1. to assist in completion of TPM EHS
Assessment Program described in this Section 3.6.2; and


 


3.6.4.2. to allow for a loss prevention inspection
of the Facility by Customer’s fire insurance underwriting company as necessary
for Customer to obtain contingent business interruption insurance.


 


3.6.5. BVL shall take reasonable and appropriate
precautions to ensure that its personnel (including its employees, contractors,
and Agents) are protected from Product and/or the Product’s Manufacturing
process exposures through either engineering infrastructure, personnel
protective equipment or a combination of both. Upon request, within 90 days,
BVL shall provide workplace monitoring data which demonstrates the
effectiveness of controls. For testing of Customer-supplied Composition or API,
Customer will provide sampling method and media to allow samples to be
collected at Customer’s cost. If testing methods for the API or
Customer-supplied Composition in question are unavailable, surrogates may be
used. Workplace monitoring data will be performed in accordance with proposals
provided to Customer.


 


3.7.
Subcontractors. Neither Party may subcontract with any Third Party or use
Agents to perform any of its obligations hereunder without the prior written
consent of the other Party, provided that for the avoidance of doubt; (i) any
rights of Customer to perform audits as authorized hereunder (and subject to
the requirements of Section 3.6.4) are not subject to the foregoing, provided
in any event that such auditor shall be required to enter into a reasonable and
appropriate confidentiality agreement with SVL; and (ii) BVL shall have the
right to subcontract nominal, non-Manufacturing Process tasks (such as pest
control, cleaning, etc.). In the event that a Party does subcontract with a
permitted Third Party or Agent pursuant to this Section 3.7, it shall be solely
responsible for the performance of any permitted subcontractor, and for costs,
expenses, damages, or losses of any nature arising out of such performance as
if such performance had been provided by itself under this Agreement. Each
Party shall cause any such permitted subcontractor and Agent to be bound by,
and to comply with, all confidentiality, quality-assurance, regulatory and
other obligations and requirements as set forth in this agreement.


 


3.8.
Records. BVL shall keep complete and accurate records of (including,
without limitation, reports, accounts, notes, data, and records of all
information and results obtained from) all work done by it under this Agreement
(collectively, the “Records”). BVL shall not transfer, deliver or otherwise
provide any such Records to any Third Party, except to an Agency when requested
by an Agency and on notice to Customer pursuant to Section 3.5, without the
prior written approval of Customer. While in the possession or control of BVL,
Records shall be available during annual audits or as otherwise mutually agreed
to times for inspection, examination and review by or on behalf of Customer and
its Agents (which Agent shall be subject to the requirements set forth in Section
3.6.4 as well as a reasonable and appropriate confidentiality agreement). All
original Records of the Development services and Manufacture of Product
hereunder shall be retained and archived by BVL in accordance with cGMP and
Applicable Law, but in no case for less than a period of seven (7) years
following completion of the applicable work or project. Upon Customer’s request,
BVL shall promptly provide Customer with additional copies of such Records at
Customer’s cost. Seven (7) years after completion of the applicable work or
project or such longer period in accordance with cGMP and Applicable Law unless
otherwise agreed to in advance by the Parties in writing all


 


13

















 


of
the aforementioned records shall be destroyed unless Customer instructs BVL in
writing as to a contrary disposition for such files.


 


3.9.
Product and Process Failure.


 


3.9.1. Product shall be Manufactured in accordance
with cGMP and the Manufacturing Process approved mutually by Customer and BVL.
Each Batch of Product will be sampled and tested by BVL against the
Specification. The Quality Assurance Department of BVL will review the Records
relating to the Manufacture of the Batch and will assess if the Manufacture has
taken place in compliance with cGMP and the Manufacturing Process.


 


3.9.2. If, based upon such tests and/or review, a
Batch of Product conforms to the Specification and was Manufactured according
to cGMP and the Manufacturing Process, then a Certificate of Compliance will be
generated and approved by the Quality Assurance Department of BVL. This
Certificate of Compliance, a Certificate of Analysis, if required, and a
complete and accurate copy of the executed Batch records (collectively, the “Batch
Records”) for each Batch of Product (including all the Batch documentation
described in Attachment “D” to this Agreement) will be delivered to Customer in
advance of Product shipment by a reputable overnight courier or by registered
or certified mail, postage prepaid, return receipt requested to verify delivery
date. Unless the Batch is shipped under Quarantine (as defined in Section 6.3
below), in the event that Customer has not received all such Batch Records at
the time of receipt of BVL’s invoice for such Batch, Customer will notify BVL
in writing, and unless the Batch (or a partial Batch) is shipped under
Quarantine, Customer shall be entitled to withhold payment until Customer
receives the Batch Record. In the event that Customer requires additional
copies of this Batch Records, these will be provided by BVL to Customer at
mutually agreed upon fees.


 


3.9.3. Customer will review the Batch Records for
each Batch of Product and may test samples of the Batch of Product against the
Specification. Customer will notify BVL in writing of its lot disposition of
such Batch within **** calendar days of receipt of the complete Batch Records
relating to such Batch. If no acceptance or rejection in writing is received by
BVL within **** days, the Batch will be conclusively deemed accepted. During
this review period, the Parties agree to respond punctually, and shall endeavor
in good faith to comply in the typical circumstance within five (5) calendar
days, to any reasonable inquiry by the other Party with respect to such Batch
Records. Customer has no obligation to accept a Batch to the extent such Batch
does not comply with the Specification. Applicable Law (for purposes solely due
to BVL or BVL’s Manufacturing or services hereunder), and/or was not
Manufactured in compliance with cGMP and the Manufacturing Process.


 


3.9.4. In case of any disagreement between the
Parties as to whether Product conforms to the applicable Specification, a
representative sample of such Product shall be submitted to an independent
testing laboratory mutually agreed upon by the Parties for tests and final
determination of whether such Product conforms to such Specification. The
laboratory must meet cGMP requirements, be of recognized standing in the
pharmaceutical industry, and consent to the appointment of such laboratory
shall not be unreasonably withheld or delayed by either Party. Such laboratory
shall use the validated test methods contained in the applicable Specification.
The determination of conformance or not by such laboratory with


 


14

















 


respect
to all or part of such Product shall be final and binding on the Parties. The
fees and expenses of the laboratory incurred in making such determination shall
be paid by the Party against whom the determination is made.


 


3.9.5. Subject to Section 6.4 and Article 8, if BVL
does not manufacture any Batch of Product according to cGMP or the Manufacturing
Process and the Product does not meet the requirements of this agreement then
BVL shall, after consultation with and written agreement from Customers.


 


3.9.5.1. refund and Manufacturing fees and expenses
paid by Customer to BVL on a pro  rata basis over the usable portion for such Batch; or


 


3.9.5.2. at BVL’s cost and expense produce a new
Batch of Product as soon as reasonably possible; and


 


3.9.5.3. reimburse Customer for any loss of API or
Customer-supplied Composition pursuant to the terms set forth in Section 8.5 to
the extent the reimbursement is not provided in Section 3.9.5.1. or Section 3.9.5.2.


 


3.9.6. BVL or Customer may postpone all scheduled
Manufacture of the affected Product until such time as final disposition of
rejected Batch(s) has been determined and complete investigations have been
finalized with root cause analysis and corrective actions determined to prevent
further Batch rejections. BVL shall without any undue delay perform all
investigations (including for such rejected Batches) diligently and
expeditiously. The Parties will use good faith efforts to investigate and
perform corrective actions to address Batches for which any Batch Record
indicates an out-of profile condition as defined by generally accepted practice
and mutually agreed upon by the Parties. Customer may request, in writing, that
BVL continue to Manufacture Product pending its investigation, and in the event
that BVL elects to Manufacture Customer’s Product prior to the conclusion of an
investigation, then Customer shall assume financial responsibility in the event
of further Batch rejection for similar reasons. If Customer requests
postponement until completion of the Investigation, the postponement fees in Section
6.5 do not apply.


 


3.9.7. Moreover, the Parties shall meet to discuss,
evaluate and analyze the reasons for and implications of the failure to meet
the Specification or comply with the cGMP and/or the Manufacturing Process.


 


ARTICLE 4 - VOLUMES


 


4.1.
Product Purchase and Supply Obligations. BVL shall supply Customer with
Customer’s requirements of Product identified in Purchase Orders in accordance
with the terms of this Agreement for the Territory. In the event that BVL, at
any time during the term of this Agreement, has reason to believe that it will
be unable to perform, or meet the requested delivery date, the Manufacturing of
any Batch of Product or any other services under this Agreement, BVL shall
promptly notify Customer thereof, but in any event, within five (5) business
days. Customer agrees that it shall purchase from BVL its requirements for
Product beginning on the Effective Date according to the following minimum
percentage (the “Commitment Table”);


 


15

















 


	
  Product

  	
   

  	
  Year 1

  	
   

  	
  Year 2

  	
   

  	
  Year 3-5

  	
   

  
	
  Sestamibi

  	
   

  	
  ****

  	
  %

  	
  ****

  	
  %

  	
  ****

  	
  %

  
	
  Definity (DMP115-1e)

  	
   

  	
  ****

  	
  %

  	
  ****

  	
  %

  	
  ****

  	
  %

  
	
  Neurolite Ligand

  	
   

  	
  ****

  	
  %

  	
  ****

  	
  %

  	
  ****

  	
  %

  
	
  Neurolite Buffer

  	
   

  	
  ****

  	
  %

  	
  ****

  	
  %

  	
  ****

  	
  %

  
	
  Eluant, 5.8 ml

  	
   

  	
  ****

  	
  %

  	
  ****

  	
  %

  	
  ****

  	
  %

  
	
  Eluant, 20 ml

  	
   

  	
  ****

  	
  %

  	
  ****

  	
  %

  	
  ****

  	
  %

  
	
  Technolite

  	
   

  	
  ****

  	
  %

  	
  ****

  	
  %

  	
  ****

  	
  %

  



 


For
each successive renewal term, unless otherwise mutually agreed to by the
Parties in writing, the minimum commitment will continue at the Year 3-5
percentages as provided in the Commitment Table and in accordance with Section 12.1.


 


For
the avoidance of doubt, the Customer’s purchasing obligations in the Commitment
Table are expressly conditioned upon and shall not commence until, such date
that BVL establishes with Customer that BVL is in compliance with all
Applicable Laws. The purchasing obligations reflected in the Commitment Table
shall immediately be suspended without penalty to Customer if: (i) BVL is found
to be out of compliance (OAI) by the FDA, European or Japanese agencies; (ii) BVL
fails to comply with Applicable Law at any time during the Term; (iii) BVL
breaches any provision of Section 10.1; or (iv) a Force Majeure prevents
performance by either Party.


 


ARTICLE 5 - FORECASTS AND PURCHASE ORDERS


 


5.1
Forecasts.


 


5.1.1. Five-Year Forecast. Attached hereto as
part of each Attachment “A#.4.1” (i.e., A1.4.1) is Customer’s forecast of its
requirements for Manufacture by BVL of Products for the first five (5) Contract
Years of the term of this Agreement (the “Five-Year Forecast”). Such
Five-Year Forecast represents Customer’s good faith projection of its
requirement of  Product(s) from BVL. The
Five-Year Forecast is non-binding on either of the Parties and is used for
planning purposes only.


 


5.1.2. Updates to Five-Year Forecast. On
an  annual basis Customer shall supply an
update to the attached Five-Year Forecast not later than **** of each Contract
Year for the remaining Contract Years of this Agreement.


 


5.2.
Rolling Twelve (12) Month Forecasts. Thirty (30) days in advance of the
start of each quarter following the Effective Date during the term of this
Agreement; Customer will provide BVL with a twelve (12) month rolling
distribution forecast for all presentations of Product (“Rolling Forecast”)
for the 12 month period beyond the 120 days in advance of delivery for which
purchase orders have already been sent. The initial Rolling Forecast will be


 


16














 


included
in each Attachment “A# 4.2” (i.e., A1.4.2) to this Agreement. The first **** (****) months
of each forecast are considered firm, with the exception of a one time
postponement of any lot in the firm forecast period which can be postponed a
maximum of **** (****) days from the originally scheduled delivery date. Notice
of postponement must be sent to BVL at least **** (****) days prior to the
originally scheduled date of delivery.


 


5.3.
Purchase Orders.


 


5.3.1. Customer shall provide BVL with Purchase
Orders for its Product requirements not less than **** (****) days prior to its
anticipated delivery date. Customer may increase the quantity or accelerate the
scheduled Manufacturing Date of any Firm Order with the written consent of BVL,
such consent not to be unreasonably withheld or delayed, provided however,
that: (i) BVL shall not be required to implement such alteration if it
cannot reasonably or practicably do so; and/or (ii) BVL shall provide a
quotation for the additional fee, if any, required to implement such increase
or acceleration and Customer shall provide authorization for such fee. Such
Purchase Orders shall be subject to acceptance by BVL. BVL will respond to
Customer’s Purchase Order with either a confirmation or proposed modification as
to delivery date within **** (****) business days of receipt by BVL.
Customer may, in its sole discretion, decrease, postpone or cancel any Firm
Order, subject to the provisions of Paragraph 6.5. Any terms or conditions of a
Purchase Order, acknowledgement or similar standardized form given or received
pursuant to this Agreement that are additional or inconsistent with this
Agreement shall have no effect and are hereby excluded, unless this Section is
expressly referenced by the Parties.


 


5.3.2. Unless mutually agreed no later than ****
days prior to the date of manufacture, BVL will notify Customer of said date of
manufacture. The date of manufacture shall not be more than **** calendar days
prior to the delivery date.


 


5.3.3. Notwithstanding the foregoing, to the event
that either (i) Customer, in its good faith judgment, determines that a
Product, if Manufactured, will not be marketable in the Territory and that the
cause for such non-marketability is solely and proximately the responsibility
of BVL, (ii) the Products of Manufacture are subject to any consent decree
or any of the remedial actions, investigations or adverse events described in Article III
hereof or (iii) BVL has breached its representations, warranties, or other
obligations under of this Agreement, then Customer shall have the right, at its
Product until such time as the cause giving rise to the non-marketability of
the Product is abated. The Parties shall cooperate in good faith to schedule
Manufacturing of such effected Products as soon as reasonably practicable.


 


5.4.
Obligation of Supply. BVL shall be obligated to Manufacture Product only
in accordance with the Purchase Orders accepted by BVL. BVL shall not be
obligated to set aside or reserve any capacity based upon the Forecast. On receipt
of each Five-Year Forecast and Rolling Forecast, BVL shall notify Customer in
writing of whether BVL does or does not have the ability to provide the
forecasted amounts.


 


17

















 


5.5.
Additional and Development Services.


 


5.5.1. Development services required in advance of
Manufacture or in support of Manufacture will be mutually agreed to by BVL and
Customer. BVL will provide Customer with estimated quotations and timelines for
such Development activities. Customer will issue non-cancelable Purchase Orders
referencing the quotation provided prior to BVL initiating the Development
services. In the event that required Development work exceeds the quoted
amount, BVL will issue a revised quotation for which Customer will provide a
new or revised Purchase Order reflecting the revised amounts for services
rendered. BVL shall not issue a revised quotation unless there is a change in
the scope of work requested by Customer or, as agreed upon, required by the project.


 


5.5.2. In the event that Customer requests or an
Agency requires additional services in support of Product, BVL will provide
Customer with a quotation for such services. BVL will provide such services
only upon receipt from Customer of a binding Purchase Order referencing the
quotation provided for the required service.


 


5.6.
Supply of Composition. It is BVL’s responsibility to: (a) maintain
at all times a quantity of BVL-supplied Composition from mutually approved
vendors sufficient to meet the requirements of Firm Orders, (b) notify
Customer of its requirements of API and Customer-supplied Composition needed in
order to fulfill its obligations hereunder and meet the requirements of
scheduled Manufacturing dates. If Customer would like BVL to maintain additional
quantities of BVL-supplied Composition above that required for Firm Orders,
Customer will inform BVL in writing. Upon Customer’s written request and BVL’s
acceptance, BVL will maintain additional stock of API and Composition in excess
of the amounts needed for Firm Order quantities for which Customer shall be
liable as provided in Section 6.4.1 API and Customer-supplied Composition
shall be delivered to BVL not less than **** (****) days in advance of the
scheduled Manufacturing Date. Customer will provide adequate supply of
reference standards for the foregoing upon request by BVL. Customer will
coordinate with BVL’s Materials Management Department on the specifics related
to each shipment of Customer-supplied Composition. BVL will be responsible to
receive, sample, store and maintain the inventory at BVL in accordance with BVL
SOP’s and mutually agreed to Specifications.


 


ARTICLE 6 — PRICE AND PAYMENT


 


6.1.
Price and Shipment


 


6.1.1. The prices to be paid by Customer for the
services and/or quantities of Product purchased pursuant to Article 5 of
this Agreement are specified in each Attachment “A#.5” (i.e. A1.5) or for other
services in applicable quotations or proposals provided to Customer and
confirmed by Customer’s Purchase Orders. **** price adjustments will be
effective as of **** and no more than the percent change year to year with the
final version of the **** of each ****. In the event of a negative percent
change the price will **** for the following ****. In the event that a lot is
delivered **** or more days after the Customer’s requested delivery date which
had previously been accepted by BVL, for reasons solely attributed to BVL, BVL
will invoice


 


18

















 


Customer
for such lot at **** percent (****%) of the applicable Batch price. Except for
the foregoing or as expressly provided hereunder, no additional costs or
expenses will be chargeable by BVL for the services provided hereunder.


 


6.1.2. Delivery terms for Products shall be **** (****)
(INCO Terms 2000). Customer shall assume title and risk of loss of the finished
Product upon delivery to **** (at ****). BVL shall ensure that each Batch shall
be delivered to Customer or Customer’s designee: (i) within **** days in
advance or **** days after the requested delivery date or as otherwise mutually
agreed to and to the destination designated by Customer on the Purchase Order;
and (ii) in accordance with the instructions for shipping included on the
Purchase Order and packaging specified in the Master Batch Record or as
otherwise agreed to by the Parties in writing. A bill of lading shall be
furnished to Customer with respect to each shipment. Customer is responsible
for all shipment costs and shipping charges will be paid directly by Customer.


 


6.2.
Pricing.


 


6.2.1. Price Adjustment on Product or Process
Specification Changes. BVL reserves the right to adjust prices as mutually
agreed based on changes to the Specifications or Manufacturing Process for a
Product regardless of the event of action causing the Specification or
Manufacturing Process change taking into account process efficiencies from such
changes other than: (1) a change required as a result of BVL’s negligence
action, willful misconduct or breach of this Agreement or (2) for BVL’s
convenience or request pursuant to Section 3.3.


 


6.2.2. Prices for Development Services and
Development Manufacture. Pricing for Product and Manufacturing Process
Development services will be provided to Customer in written proposal provided
to Customer by BVL based on the services requested by Customer. Customer will
confirm its acceptance of a proposal by issuing a Purchase Order referencing
the quotation number provided on the proposal.


 


6.2.3. Continuous Improvements. Customer in
concert with BVL is resolved to fostering perpetual value-added activity and
continuous improvement. Therefore, Customer and BVL acknowledge and agree with
the importance of pursuing process, quality, and cost improvement goals.


 


6.3.
Payment of Invoices.


 


6.3.1. The purchase price for Product or services in
an undisputed invoice shall be paid to BVL through an electronic funds transfer
no later than **** (****) days after the date of BVL’s invoice to Customer. BVL
will issue an invoice for: (i) Product Manufacture at such time that BVL’s
quality control department has completed its testing, found Product suitable to
be shipped and has shipped the Products, Batch Records and other documents
identified in Attachment “D,” and (ii) for other services, upon completion
of such other services as described in the applicable proposal. Customer may
request that a Batch be shipped before Customer release (i.e., shipment in “Quarantine”).
In the event a Quarantine shipment is made, BVL will invoice on the shipment
day. Customer will notify BVL in writing that a Lot can be shipped in
Quarantine and BVL will make all reasonable efforts to honor this request.
Within **** (****) days from the date of any disputed invoice, Customer must
provide a


 


19

















 


written
notice that conforms to the requirements of this Agreement of the disputed
invoices and the reason such invoice is disputed. The Parties will negotiate in
good faith to resolve such dispute within **** (****) days following notice of
such dispute. If a disputed invoice is resolved in Customer’s favor, BVL shall
either reimburse Customer or issue Customer a trade credit as mutually agreed
between BVL and Customer. If the Parties are unable to reach an agreement,
either party may pursue any remedies available to it under this Agreement, at
law, or in equity.


 


6.3.2. In the event of nonpayment of balances
without written notice by Customer and reasonable cause within **** (****) days
of the invoice date, BVL has the option to assess and Customer agrees to pay a
monthly late payment charge equal to **** percent (****%) of the unpaid
balance. Should unpaid balances on undisputed invoices extend beyond **** (****)
days after an invoice has been issued BVL reserves the right to require
Customer to pay **** (****%) of the full price for each Batch at the time of
Purchase Order issuance or may cancel all scheduled Manufacture until such time
as all unpaid overdue invoices, together with any and all late fees, have been
paid.


 


6.4.
Payment for Non-Validated Services or Production; Obsolete Materials.


 


6.4.1. Customer will be required to pay BVL for all
Product Manufactured during any period when any Manufacturing Process and
material testing procedures have not been fully developed and validated,
regardless of whether Product is accepted or rejected by the Customer, unless
such rejection is due to BVL’s negligence, willful misconduct or breach of this
Agreement by BVL.


 


6.4.2. Customer will be required to pay BVL for all
packaging components and Composition which were purchased by BVL to fulfill
open purchase order or at Customer request for use specifically in the
Manufacture of Product covered by this Agreement, should any of the
BVL-supplied Composition become obsolete for any reason other than BVL’s
negligence, willful misconduct or breach of this Agreement (the “Obsolete
Materials”). Notwithstanding the foregoing, Customer’s liability for
Obsolete Material shall be limited to the amount of packaging components and
Composition necessary for Manufacture in accordance with Section 5.4.
Customer shall provide BVL with shipping instructions for disposition of any
Obsolete Materials within 90 days from notification by BVL. If BVL does not
receive notification of where to ship Obsolete Materials within such 90-day
period, BVL has the right to dispose of such materials per governing cGMP(s) without
BVL having any liability to Customer and BVL shall invoice Customer the amounts
listed on the written notice for reasonable direct, out-of-pocket expenses
incurred by BVL for such disposal.


 


6.5.
Fee for Postponement/Cancellation.


 


6.5.1. Customer and BVL wish to fairly and equitably
allocate risk of loss in the event that a scheduled Manufacturing does not
occur due to Customer’s request to cancel and/or postpone any Batch. Accordingly,
as a policy consideration, BVL and Customer agree to certain fees as set forth
below based upon the length of prior notice that Customer is able to provide
BVL. Such prior written notice determines BVL’s likelihood of being able to
fill the capacity reserved by Customer and to reduce the likelihood of BVL’s
loss due to Customer’s cancellation. In the event that


 


20

















 


Customer
cancels or gives notice of its intent to postpone a scheduled Manufacturing of
a Batch of Product, then the following fees shall apply:


 


6.5.1.1. Notice of **** (****) days or less:
As the equipment, preparations and materials associated with the Batch have
been allocated and prepared and can no longer be re-used, Customer shall pay ****%
of the Purchase Order price.


 


6.5.1.2. Notice of **** (****) to **** (****)
Days: If notice of such postponement/cancellation is delivered not less
than **** days and not more than **** days from the scheduled Manufacturing
Date, Customer shall pay ****% of the Purchase Order price.


 


6.5.1.3. Notice greater than **** (****) Days:
As BVL may have the opportunity to avoid certain costs associated with the
Manufacturing of the Batch pursuant to the Purchase Order but may not be able
to mitigate its losses by utilizing the Manufacturing suites allocated pursuant
to Customer’s Purchase Order, Customer and BVL agree to allocate and share the
potential risk and BVL may charge, in its discretion, an administrative fee to
cover the cost of rescheduling Manufacturing. In no event shall such
administrative fee exceed **** dollars ($****).


 


6.5.2. BVL will use commercially reasonable efforts
to use the capacity created by any postponement or cancellation under this
Paragraph 6.5 to manufacture product for its other customers, including Bedford
Laboratories. To the extent the capacity is able to be used then fees as
applied in Paragraphs 6.5.1.1 and 6.5.1.2 will be reduced commensurately.


 


6.5.3. Within thirty (30) days of receipt of an
invoice for a cancellation/postponement fee, Customer shall be entitled to
request an audit (through Agents) at a mutually agreed upon timeframe, of the
Equipment and BVL’s books and records regarding the use of such Equipment
following any cancellation/postponement, the use of the operating capacity of
any applicable Facility at the time of a postponement/cancellation, and the
calculation of any and all personnel and associated expenses incurred by BVL
and charged to Customer. Any such audit shall be conducted by a mutually agreed
third-party auditor, and the costs of any such audit shall be born by Customer.


 


6.6.
Storage Fees. Customer is responsible for storage charges as specified
in Attachment “C” for Product stored for more than **** (****) calendar days
beyond BVL’s release of such Product the “Temporary Storage Period”. Storage
beyond the Temporary  Storage Period
of Product in BVL’s warehousing Facilities must receive prior written approval
from BVL. Such approval will be granted only on a space-available basis. At the
expiration of the Temporary Storage Period, BVL shall ship the Product to
Customer at Customers cost at the Customer’s shipping address listed on the
applicable Purchase Order. Notwithstanding anything in this Agreement to the
contrary, at no time shall Customer incur or be responsible to pay any storage
charges if the reason for such storage is an investigation pursuant to
Paragraphs 3.5 or 3.6.


 


6.7.
Stability Program. During the term of this Agreement and upon Customer’s
request and BVL’s written agreement, BVL will conduct and support, at Customer’s
reasonable expense, all stability studies in progress or planned (e.g., NDA
annual stability studies) as of


 


21

















 


the
Effective Date until such studies are concluded. Customer shall be responsible
for all costs of conducting any stability studies. Stability program costs will
be covered in a separate quotation provided by BVL to Customer based on the
agreed upon protocol. Customer may also make arrangements for stability work to
be performed at a facility other than BVL at Customer’s expense.


 


6.8.
Inspection, Packaging and Labeling. Customer shall be responsible for
and bear all costs associated with the design, Development, quality release and
regulatory approval of all labeling and packaging materials for Product.
Customer shall perform its design, development, quality release and regulatory
approval obligations hereunder in a timely manner sufficient for BVL to satisfy
its Manufacturing obligations hereunder for Product. Labeling and packaging
developed by Customer will conform to labeling and packaging Specification
mutually agreed to in writing by the Parties and will conform to all Applicable
Law.


 


ARTICLE 7 — QUALITY AGREEMENT


 


7.1.
Quality Agreement. Certain quality matters relating to Product are
included in the Quality Agreement which is attached and incorporated herein by
reference as Attachment “E.” If any provision of the Quality Agreement is
irreconcilably inconsistent with the terms of this Agreement, the terms of this
Agreement shall prevail with respect to commercial issues and the Quality
Agreement shall prevail with respect to cGMP issues.


 


ARTICLE 8 — INDEMNIFICATION


 


8.1.
Customer Indemnity. Customer hereby holds harmless and indemnifies BVL,
its Affiliates and its and their directors, officers, employees and agents (the
“BVL Indemnitees”) against any and all losses, liabilities, damages,
reasonable costs and expenses whatsoever, including, without limitation
reasonable attorneys’ fees and the cost of recalls and any and all amounts
reasonably paid in settlement of any claim or litigation and any settlement
payments, subject to Section 8.3 below, (collectively, “Losses”)
incurred by any BVL indemnitee in investigating, preparing or defending against
any litigation, commenced or threatened by a Third Party, or any other claim,
demand or proceeding of a Third Party (collectively, “Claims”),  based on resulting from, arising out of or in
connection with any actual or alleged (a) personal injuries and/or death resulting
from, arising out of or in connection with any distribution or sale of a
Product by Customer, its Affiliates or its distributors, including without
limitation, Claims based on negligence, warranty, strict liability or any other
theory of liability or violation of any Applicable Law, (b) breach by
Customer of its representations, warranties or covenants hereunder (c) negligent
act or the willful misconduct of any Customer Indemnitees in performing
Customer’s obligations under this Agreement; or (d) Customer’s API and any
Customer supplied Composition, materials, Equipment, Specifications,
formulations, marketing, labeling, design, instructions, handling and/or
storage; except, in each case, to the comparative extent such Claim arose out
of or resulted from a matter for which BVL is responsible therefor pursuant to Section 8.2.


 


8.2.
BVL Indemnity. BVL hereby holds harmless and indemnifies Customer, its
Affiliates and its and their directors, officers, employees and agents the “Customer
Indemnitees”) against any and all Losses incurred by any Customer
Indemnitee in preparing, or defending against any Claims based on, resulting
from, arising out of or in connection with any actual or alleged: (a) personal
injuries and/or death that are proximately caused (as defined under Delaware
law) by a Manufacturing Defect (as hereinafter defined); (b) breach by BVL
of its representations, warranties or covenants hereunder, including personal
injuries


 


22

















 


and/or
death claims; (c) any recall pursuant to Article 25 of this Agreement
due to BVL’s negligence, willful misconduct, or breach of any covenant,
representation or warranty in this Agreement; or (d) negligent act of the
willful misconduct of any BVL Indemnitees in performing BVL’s obligations under
this Agreement except, in each case, to the comparative extent such Claim arose
out of or resulted from a matter for which Customer is responsible therefor
pursuant to Section 8.1. For the purposes of this Section 8.2, “Manufacturing
Defect” means the negligence, recklessness (having a baseline not less than
negligence), wrongful intentional acts or negligent omissions, or strict
liability of or by BVL or its Affiliates or its Agents resulting from, or
arising out of or in connection with the Manufacture of a Product by BVL.


 


8.3.
Indemnification Procedures. Any BVL Indemnitees or Customer Indemnitees
(collectively, “Indemnitees”) seeking indemnification under Section 8.1
or 8.2 agrees to notify the indemnifying Party within ten (10) business
days of receipt of any Claims demands or threats of suit for which such Party
may be liable under Section 8.1 or 8.2 as the case may be; provided,
however, that failure to give such notification shall not affect the
indemnification to be provided hereunder except to the extent the indemnifying
Party shall have been actually prejudiced as a result of such failure (except
that the indemnifying Party shall not be liable for any expenses incurred
during the period in which the Indemnitee(s) failed to give such notice).
The indemnifying Party shall have the right, but not the obligation, to defend,
to employ counsel of its choosing, to control, to negotiate, and to settle such
claims; provided, however, that the indemnitee(s) shall be entitled to
participate in the defense of such matter and to employ counsel at its expense
to assist therein. The Indemnitee(s) shall provide the indemnifying Party
with such information and assistance as the indemnifying Party may reasonably
request, at the expense of the indemnifying Party. The Parties understand that
no insurance deductible shall be credited against losses for which a Party is
responsible under this Article 8. No indemnifying Party under Section 8.1
or 8.2 may compromise or settle any Claim or pay any settlement amount in the
connection with the compromise or settlement of any Claim without the prior
written consent of Indemnitee, such written consent not to be unreasonably
withheld or delayed.


 


8.4.
Insurance. Customer and BVL will each, at its own cost and expense,
obtain and maintain in full force and effect, during the term of this Agreement
and for a period of one year following the expiration or other termination of
this Agreement, Commercial General Liability insurance, written on the standard
approved Policy Form, and Blanket Contractual Liability, with limits of
liability of not less than $**** Combined Single Limit Bodily Injury and
Property Damage covering its duties and obligations under the Agreement.
Furthermore, during the term of this Agreement, BVL shall obtain and maintain “All
Risk” property insurance valued at replacement cost, covering loss or damage to
the Facility and Customer’s property and materials in the care, custody, and
control of BVL including, for the avoidance of doubt all API and
Customer-supplied Composition. The coverage limits may be provided through a
combination of Primary, Excess/Umbrella or Self-Insured Retention. The Parties
further understand and agree that the insurance limits identified herein shall
not act as a bar to any recovery.


 


8.5.
Specific Limitation of Liability for Process-Related (i.e., during
Manufacturing) Losses.


 


8.5.1. Notwithstanding anything to the contrary set
forth herein or in any collateral documents hereunder (invoices, purchase
orders, etc.), the Parties acknowledge and agree that BVL’s sole liability
to Customer for in-process Manufacturing losses (i.e. loss of API, or
Customer-supplied Composition) is set forth


 


23

















 


exclusively
in this section 8.5. Except for Batches of Definity
(where the maximum liability shall be $****), BVL agrees to reimburse Customer
up to a maximum of $**** per Batch pro-rated over the usable portion of the
Batch, if applicable, for any loss of API or Customer-supplied Composition for
each Batch that does not meet. Specification or was not Manufactured in
accordance with the Manufacturing Process or cGMP and therefore can not be
released; provided that the loss of such materials can be shown after
investigation to be caused solely and directly by: (a) the failure of BVL
to follow its SOP’s; or (b) BVL’s negligence, willful misconduct or breach
of this Agreement; or (c) BVL’s willful misconduct, where, solely for
purposes of this Section 8.5.1, such “willful misconduct” shall
have the meaning set forth under Delaware law. In the absence of a showing of
(a), (b) or (c), above, then BVL shall have no liability to Customer for
such Batch of Product. In addition to this payment, BVL will be responsible for
all Manufacturing fees incurred during the Manufacture of the failed Batch,
pro-rated over the usable portion of the Batch, if applicable. The maximum
amounts set forth in Section 8.5.1 shall increase annually by the
percentage increase of the actual cost of the API and Customer-supplied
Composition or as in the case of Definity the percentage increase as applied to
the $**** maximum as described above as shown by Customer’s written records.
The monetary values of all Customer-supplied Composition and API must be
disclosed by Customer to BVL in writing prior to production in the
questionnaire provided by BVL to Customer. The Customer is responsible for
notifying BVL in writing of any changes in the value of the Customer-supplied
Composition and API supplied to BVL, and BVL shall not be liable for any
increase in the cost of the foregoing if Customer fails to provided the
abovementioned notice or timely updates thereto. Notwithstanding the foregoing,
or any declared value of API costs in excess of $**** or $**** as applicable,
or the insurance levels identified in Section 8.4 or elsewhere, in no
event shall BVL’s liability to Customer for in-process loss of API or
Customer-supplied Composition be in excess of $**** or $****, as applicable,
per Batch except to the extent permitted by Applicable Law.


 


8.6. LIABILITY LIMITATION.


 


8.6.1. ELECTION OF REMEDIES.
SECTION 3.9.4, 3.9.5, 8.2, 8.5 AND 25.1 ARE CUSTOMER’S SOLE AND EXCLUSIVE
REMEDY FOR ANY PRODUCT THAT DOES NOT COMPLY WITH THE SPECIFICATIONS CONTAINED
IN THE MASTER BATCH RECORD AND/OR WERE NOT MANUFACTURED IN ACCORDANCE WITH THE
REQUIREMENTS SET FORTH IN THIS AGREEMENT.


 


8.6.2. SPECIAL DAMAGES.
NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, INCIDENTAL,
CONSEQUENTIAL OR INDIRECT DAMAGES, INCLUDING WITHOUT LIMITATION, LOST
PROFITS, LOST MARKET SHARE OR DAMAGES STEMMING FROM AN INTERRUPTION OF SUPPLY
ARISING OUT OF THIS AGREEMENT, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY
(THE “SPECIAL DAMAGES”).


 


8.6.3. BVL CAP
ON LIABILITY. THE PARTIES RECOGNIZE AND ACKNOWLEDGE THAT THIS ARTICLE 8
ATTEMPTS TO EQUITABLY ALLOCATE RISK WITH RESPECT TO EACH PARTIES’ RESPECTIVE
INTEREST IN THE AGREEMENT AND THAT THE LIMITATIONS OF LIABILITY SET FORTH
HEREIN ARE COMPROMISES. NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH
HEREIN, BVL’S TOTAL MAXIMUM AGGREGATE LIABILITY UNDER


 


24

















 


THIS
AGREEMENT SHALL NOT EXCEED **** DOLLARS ($****) FOR THE INITIAL TERM OF THE
AGREEMENT.


 


8.6.4. INTEGRAL
PROVISIONS. THESE LIMITATIONS SET FORTH IN THIS SECTION 8.6
SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED
REMEDY, SUCH LIMITED WARRANTIES, LIMITATION OF LIABILITY AND SPECIAL PROVISIONS
ARE INTEGRAL PARTS OF THIS AGREEMENT.


 


ARTICLE 9 — CONFIDENTIALITY


 


9.1.
Confidential Information. As used in this Agreement: “Confidential
Information” means any scientific, technical, trade, business or
proprietary information related to the subject of the Agreement, irrespective
of whether in human or machine-readable form, tangible or intangible, which is:
(a) given by the Disclosing Party to the Receiving Party or otherwise
acquired or perceived by the Receiving Party from the Disclosing Party; or (b) which
is developed by BVL for Customer under the terms of the 1993 Agreement or this
Agreement. Confidential Information does not include information that: (a) is
lawfully in the possession of the Receiving Party, without restriction as to
confidentiality or use, at the time of disclosure by the Disclosing Party, as
demonstrated by competent written records of the Receiving Party; (b) is
or later becomes part of the public domain through no fault of the Receiving
Party (i.e. other than by breach of this Agreement by the Receiving Party); (c) is
received, without restriction as to confidentiality or use, by the Receiving
Party from a Third Party lawfully entitled to possession of such Confidential
Information and who does not violate any contractual, legal or fiduciary
obligation to the Disclosing Party by providing such Confidential Information
to the Receiving Party; or (d) is developed independently by the Receiving
Party without any use of, or access or reference to, or reliance on, the
Disclosing Party’s Confidential Information, in whole or in part. Disclosing
Party is not obligated to mark information as “CONFIDENTIAL” for such
information to be deemed Confidential Information under this Agreement.
Confidential Information of BVL includes, but is not limited to, BVL
Technology, BVL Improvements, BVL pricing information and capabilities/capacities.
Confidential Information of Customer includes, but is not limited to, Customer
Technology, Customer Inventions and Customer Improvements. This Agreement shall
not be construed as a grant of any right or license to the Receiving Party with
respect to Confidential Information of the Disclosing Party or as a requirement
of either Party to enter into any further arrangement with respect to
Confidential Information of the Disclosing Party.


 


9.2.
Disclosure and Use. The Receiving Party shall: (a) maintain the
confidentiality of the Disclosing Party’s Confidential Information; (b) not
disclose the Disclosing Party’s Confidential Information to any Third Party
without the prior written consent of the Disclosing Party; and (c) use the
Disclosing Party’s Confidential Information only as necessary to fulfill its
obligations or in the reasonable exercise of rights granted to it hereunder.
Notwithstanding the foregoing, a Receiving Party may disclose: (i) Confidential
Information of the Disclosing Party to its Affiliates, and its and their
directors, employees, consultants and Agents provided, that in each case such
individuals and entities have a specific need to know such Confidential
Information and are previously bound by written obligation of confidentiality and
restriction at least as rigorous as those set forth herein; (ii) Improvements
or Inventions owned by the Receiving Party to the extent required to exploit
the grant of its rights under Article 11 of this Agreement; and (iii) Confidential
Information of the Disclosing Party to the extent such disclosure is required
to comply with Applicable Law or to defend or prosecute litigation; provided,
however, that prior to any such use or disclosure in accordance with Applicable
Law,


 


25

















 


the
Receiving Party shall provide written notice of such potential disclosure to
the Disclosing Party (which shall include a copy of any applicable subpoena or
order), and cooperate with Disclosing Party’s requests and lawful decision to
avoid or minimize the degree of such disclosure. Receiving Party shall permit
the Disclosing Party the opportunity, if desired, to seek an appropriate
protective order or other confidential treatment or remedy with respect to
narrowing the scope of such use or disclosure. Upon request, the Receiving
Party shall return all copies of the Disclosing Party’s Confidential
Information to the Disclosing Party.


 


9.3.
Publicity. Neither Party will issue any press release or other public
announcement concerning this Agreement or the transactions contemplated by this
Agreement without the prior written consent of the other Party, except where
such announcements are required by Applicable Law or the rules of any
stock exchange or NASDAQ provided, however, that prior to any announcement in
accordance with Applicable Law or rules, the disclosing Party shall provide
written notice of such potential announcement to the other Party, and cooperate
with the other Party’s requests and lawful decision to avoid or minimize the
degree of such disclosure. Such other Party shall permit the disclosing Party
the opportunity, if desired, to seek an appropriate protactive order or other
confidential treatment or remedy with respect to narrowing the scope of such
announcement. Product labeling (primary, secondary, and any insert) and
government filings may indicate that Product has been Manufactured for Customer
by BVL.


 


9.4.
Customer’s Agents. In the event that Customer desires for its Agents to
perform an audit at the Facility and/or otherwise enter upon the Facility, then
prior to any such visit, such Agent shall either be required to enter into an
agreement with BVL in which it agrees to comply with the confidentiality
obligations, restrictions and responsibilities imposed upon Customer in this
Section. In BVL’s discretion, such agreement shall be acknowledged by Customer
denoting that the individual identified thereon is Customer’s Agent.


 


9.5.
Non-Disclosure of Customer’s Confidential Information to Third Parties or
Bedford Laboratories. The Parties acknowledge that the actual Manufacturing
Process may be performed by employees that perform routine and normal
manufacturing services (e.g., in filling, packaging, sterile rooms, shipping, etc.)
and who also perform similar services for BVL’s other third-party customers and
for Bedford Laboratories. Notwithstanding the foregoing, BVL agrees that it
shall not disclose Customer’s Confidential Information or Customer Technology
to any Third Party or Affiliate of BVL, including any personnel of Bedford
(except for those manufacturing employees referenced in the preceding sentence
that require the use of such Customer Confidential Information or Customer
Technology in order to Manufacture Product).


 


9.6.
Notice to Senior Scientists and Manufacturing Personnel who Separate
Employment with BVL. For senior members of BVL’s Product and Process
Development (PPD) Department and Manufacturing Department who separate
employment from BVL, BVL shall, when it determines appropriate in its sole
discretion, send a copy of such individual’s “Invention & Secrecy
Agreement” agreement to both the individual and his/her new company (if known).
The cover letter enclosing the Invention & Secrecy Agreement shall
remind the former employee and his/her new employer of the confidentiality,
non-use and non-disclosure obligations pertaining to BVL and it’s customer’s
confidential and proprietary information.


 


26

















 


ARTICLE 10 — REPRESENTATIONS, WARRANTIES AND
COVENANTS


 


10.1.
Representations of BVL. BVL represents, warrants and covenants to
Customer that:


 


10.1.1. (a) It has the full power and right to
enter into this Agreement and that there are no outstanding agreements,
assignments, licenses, encumbrances or rights of any kind held by other
parties, private or public, materially inconsistent or conflict with the
provisions of this Agreement; and (b) the execution and delivery of this
Agreement and the performance of such Party’s obligations hereunder; and (c) there
are no, and shall be no, liens, conveyances, mortgages, assignments,
encumbrances, or other contacts or agreements that would prevent or materially
impair such Party’s full and complete exercise of the terms and conditions of
this Agreement;


 


10.1.2. the services provided by BVL shall be
performed with requisite care, skill and diligence, in accordance with the
terms of this Agreement (including 2.2.6, 3.3, 3.6, 7.1 (and Attachment “E”)),
Applicable Laws and industry standards, and by individuals who are appropriately
trained and qualified;


 


10.1.3. the 
services provided by BVL, and the use, practice or exploitation of the
BVL Technology, Customer Improvements, Customer Inventions and BVL Confidential
Information, will not infringe, misappropriate, or otherwise violate any
patents, trademarks, copyrights, trade secrets, or any other intellectual
property rights of any Third Party in the Territory and it will promptly notify
Customer in writing should it become aware of any claims asserting such
infringement, misappropriation or violation;


 


10.1.4. at the time of delivery to Customer, Product
Manufactured under this Agreement: (i) will have been Manufactured in
accordance with cGMP and all other Applicable Laws, the Manufacturing Process,
the requirements of the Quality Agreement, and the Specifications, and shall be
free of any manufacturing defects; (ii) will not be adulterated or
misbranded under the FDCA or other Applicable Law; and (iii) will be
provided free and clear of any liens and encumbrances of any kind; (e) it
has not been debarred, nor is it subject to a pending debarment, and that it
shall not use in any capacity in connection with the services provided under
this Agreement any person who has been debarred pursuant to section 306(b)(1)(B) of
the FDCA (or who is the subject of a conviction described in such section) and
will provide a certification that it has not, does not and will not use in any
capacity the services of any person debarred under section 306(b) of the
FDCA in connection with the Manufacture of the Products. BVL agrees to inform
Customer in writing immediately. If BVL or any person who is performing
services on its behalf under this Agreement is debarred or is the subject of a
conviction described in section 306(b), or if any action, suit, claim,
investigation, or proceeding is pending relating to the debarment or conviction
of BVL or any person performing such services.


 


10.2.
Representations of Customer. Customer represents, warrants and covenants
to BVL that:


 


10.2.1. (a) it has the full power and right to
enter into this Agreement and that there are no outstanding agreements,
assignments, licenses, encumbrances or rights


 


27














 


held
by other parties, private or public, inconsistent with the provisions of this
Agreement; and (b) the execution and delivery of this Agreement and the
performance of such Party’s obligations hereunder: (i) do not conflict
with or violate any requirement of Applicable Law, (ii) do not, and will
not conflict with or otherwise interfere with resulting in a violation, breach,
or default under, or require any consent that has not been obtained under any
contact or agreement between such Party or any of its Affiliates, Agents and
any third party; and (iii) there are no, and shall be no liens,
conveyances, mortgages, assignments, encumbrances, or other contacts or
agreements that would prevent or impair such Party’s full and complete exercise
of the terms and conditions of this Agreement;


 


10.2.2. the use, practice or exploitation of
Customer Technology, Customer improvements, and Customer Confidential
Information in the performance of services under this Agreement will not
infringe, misappropriate or otherwise violate the patents, trademarks,
copyrights, trade secrets, or other intellectual property rights of any Third
Party and that it will promptly notify BVL in writing should it become aware of
any claims or threats asserting such infringement, misappropriation or
violation;


 


10.2.3. that the API and Customer-supplied
Composition shall be free or defects of any kind, shall not be adulterated,
shall conform to applicable Specifications and will be provided to BVL free and
clear of any liens and encumbrances; and


 


10.2.4. Customer’s further distribution of the
Product will not cause the Product to be adulterated or misbranded under the
FDCA or other Applicable Law.


 


10.3.
Additional Representations of Customer in the event that Product(s) will
be Offered for Sale, Sold, Marketed or Distributed for Developmental or
Clinical Applications within the Member States of the European Union. In
the event that the Territory includes the European Union or any member states
thereof, then in addition to all other warranties and representations set forth
herein, Customer also represents and warrants that Customer shall be
responsible for the release of the Products in the European Union in compliance
with all applicable EU Directives and Standards. It is Customer’s obligation to
notify BVL as to whether the Territory for any Product includes an EU member
nation, or if a country within the Territory subsequently becomes a member of,
or subject to, the European Union.


 


ARTICLE 11 — INTELLECTUAL PROPERTY


 


11.1.
Customer Technology. All rights, title and interests in and to Customer
Technology and Customer’s Other inventions shall remain solely in Customer and
no right, title or interest therein or thereunder is transferred or granted to
BVL, except as set forth in the following sentence. BVL acknowledges and agrees
that it does not acquire a license or any other right to Customer Technology
except for the limited purpose of carrying out its duties and obligations under
this Agreement and that such limited, non-exclusive, non-sublicensable,
non-transferable license (i) shall expire upon the completion of such
duties and obligations or the termination or expiration of this Agreement,
whichever is the first to occur, and (ii) does not require disclosure of
any Customer Technology to any other persons or entities. Except as provided in
Section 3.7 or Section 9.4, under no circumstances shall BVL share,
convey, license, or otherwise transfer any Customer Technology or Customer’s
Other Inventions to any BVL Affiliate or BVL Agent.


 


28

















 


11.2.
BVL Technology. All rights, title, and interests in and to BVL
Technology shall remain solely in BVL and no right, title or interest therein
is transferred or granted to Customer, except as set forth in the following two
sentences. Customer acknowledges and agrees that it shall not acquire a license
or any other right to BVL Technology except as otherwise set forth in this
Agreement. BVL shall not incorporate any BVL Technology into any inventions
hereunder without the prior written consent of Customer, and, if BVL does
incorporate any BVL Technology into any Inventions, absent an agreement to the
Parties to the contrary, Customer is granted a royalty-free, fully paid-up,
sublicensable (solely for the Product), license to freely use (solely for the
Product), practice and otherwise exploit the BVL Technology (solely for the
Product). For the avoidance of doubt, to the extent that BVL incorporates BVL
Technology into the Product, the foregoing grant shall be for the benefit of
Customer and solely for the benefit of the Product, and shall not be utilized
for any other product, whether by Customer or any of Customer’s Agents.


 


11.3.
Customer Improvements.


 


11.3.1. Customer shall own all right, title and
interest in and to all inventions, discoveries, developments, improvements, new
uses, processes, know-how, compounds, compositions, or syntheses that are
conceived, reduced to practice or first demonstrated to have utility in the
course of activities under this Agreement or the 1993 Agreement and that are
Product-specific or are specific to the use of the API for use in the same
therapeutic class, including but not limited to any process for making any
Product, any use of any Product, any method of analyzing  or characterizing any Product or any Product
formulation, and any analysis or characterization of any Product or any Product
formulation (collectively, “Customer Inventions”). As used in this
Agreement, “Product-specific” shall mean relating to the Products, any
intermediates or derivatives thereof, and the Manufacturing thereof but not
routine manufacturing processes which are not specific to the Manufacturing of
Product.


 


11.4.
BVL Improvements.


 


11.4.1. BVL shall own all right, title and interest
in and to all inventions, discoveries, developments, improvements, new uses,
processes, know-how, compounds, compositions, or syntheses that are conceived,
reduced to practice or first demonstrated to have utility in the course of
activities under this Agreement or the 1993 Agreement and that are conceived,
reduced to practice or first demonstrated to have utility in the course of
activities under this Agreement or the 1993 Agreement and that relate to BVL’s
Technology, BVL Confidential Information or BVL Improvements but are not
Product-specific (collectively, “BVL Inventions”). For the avoidance of
doubt, where an invention relates to both the BVL’s technology, equipment or
equipment processes and to a Product or a Product formulation (e.g., a complex
between a Product and a proprietary complexing agent of BVL), such invention to
the extent it is “Product-specific” shall be a Customer Invention.


 


29

















 


11.4.2. Ownership of any Invention which is not a
Customer Invention or a BVL. Invention (“Other Invention”) shall be as
follows: (x) where such Other Invention is jointly conceived, reduced to
practice or first demonstrated to have utility under this Agreement or the 1993
Agreement by: (i) one or more employees, consultants or Agents of a Party
or an Affiliate of such Party; and (ii) one or more employees, consultants
or Agents of the other Party or an Affiliate of such other Party, such Other
Invention shall be jointly owned by the Parties, and (y) where such Other
Invention is conceived, reduced to practice or first demonstrated to have
utility solely by an employee, consultant or Agent of a Party or an Affiliate
of that Party, such Offer Invention shall be owned by such Party.


 


11.4.3. The inventorship of all Inventions conceived,
reduced to practice or first demonstrated to have utility in the course of
activities under this Agreement will be determined in accordance with United
States laws for inventorship. Each party hereby agrees to disclose to the other
Party promptly and in writing all Inventions conceived or reduced to practice
or first demonstrated to have utility in the course of activities under this
Agreement by an employee, consultant or Agent of a Party or its Agents. BVL
hereby assigns to Customer all right, title and interest of BVL in or to any
Customer Inventions. Customer hereby assigns to BVL all right, title and
interest of Customer in or to any BVL Inventions. Each Party shall cooperate
(and cause its Agents and all employees to cooperate) with the other Party in
taking all steps and actions (including but not limited to maintaining in
confidence any Inventions that constitute trade-secrets, and executing
appropriate documentation in connection with the filing of any patent
application(s) on any Invention of the other Party) which such Party
believes reasonably necessary or desirable to apply for and/or maintain
intellectual property protection for the benefit of Customer or BVL as the case
may be in any country, or to perfect or enforce such Party’s ownership and
right in the Inventions; provided, however, that the costs and expenses for
taking such steps and actions are borne by the Party seeking to obtain IP
registration or protection.


 


ARTICLE 12 — TERM AND TERMINATION


 


12.1.
Term. This Agreement shall become effective on the Effective Date and,
except as otherwise provided herein, shall be in effect for an initial term of
five (5) Contract Years (the “Initial Term”). After the initial term, this
Agreement shall automatically renew for successive five (5) Contract Year
periods unless terminated by Customer or BVL upon twenty-four months written
notice.


 


12.1.1. Renewal of the Funds for Indemnity
Obligation. The total aggregate cap of liability of **** Dollars ($****)
for the Initial Term set forth in Section 8.6 of this Agreement shall
renew for each successive **** (****) year term of the Agreement. For the
avoidance of doubt, no carry-over of indemnity shall be permitted from
term-to-term, meaning that no part of the prior term’s indemnity funds shall be
available in a successive term. Likewise, for the further avoidance of doubt,
an indemnity obligation that is triggered in one term (for instance, during the
Initial Term) shall be limited to the indemnity cap available in such term and,
notwithstanding any renewal of the Agreement, may not draw from the ****
Dollars ($****) that becomes available from the subsequent, renewal term.


 


12.2.
Termination by Either Party Without Cause. Either Party may terminate
this Agreement without cause by providing twenty-four (24) months written
notice to the other


 


30

















 


Party.
Notwithstanding such no fault termination, Customer shall be liable for any
outstanding Development Services performed or Purchase Orders filled by BVL as
of the date of termination. For the avoidance of doubt either Party may
terminate with respect to any individual Product which termination shall not
effect the viability of the Agreement with respect to any remaining Products.
Upon notice of termination by BVL under this Section 12.2 and at the
written request of Customer, BVL will continue to Manufacture Products in
accordance with the terms of the Agreement and pursuant to and up to the
quantities enumerated in the first two years of the then-current Rolling
Five-Year Forecast in existence as of the date of termination plus a mutually
agreed-upon terminal quantity.


 


12.3.
Termination for Breach. Either Party may terminate this Agreement for a
material breach or default by the other Party by giving the breaching Party
written notice, specifying the breach or default, and giving the breaching
Party thirty (30) days to cure such breach or default. For the avoidance of
doubt either Party may terminate with respect to any individual Product which
termination shall not effect the viability of the Agreement with respect to any
remaining Products. If the breach or default has not been cured within thirty
(30) days after the receipt of such notice the Non-Defaulting Party shall be
entitled, without prejudice, to terminate this Agreement; provided, however,
that if such breach or default reasonably cannot be cured within 30 day period,
then upon the mutual agreement of the Parties the Defaulting Party may be
granted an additional period of time during which it shall exercise reasonably
diligent efforts to cure such breach, and the Non-Defaulting Party shall not be
permitted to terminate this Agreement under this Section during any such
mutually agreed extended cure period. Termination for breach or default will
have no effect on performance obligations or amounts to be paid which have
accrued up to the effective date of such termination. Customer’s failure to
make timely payments hereunder following notice of non-payment as required in
this section 12.3 shall constitute a breach.


 


12.4.
Termination for Bankruptcy. In the event of any proceedings, voluntary
or involuntary, in bankruptcy or insolvency, by or against Customer or BVL, or
the appointment with or without the Parties’ consent of a receiver for either
Party, the other Party shall be entitled to immediately terminate this
Agreement upon written notice to the other Party without any liability
whatsoever. Such termination shall not affect any claim for damages available
to the terminating Party or for costs or fees accrued to date.


 


12.5.
Termination for Force Majeure. In the case of a Force Majeure event that
will, or continues to, prevent performance (in whole or substantial part) of
this Agreement by a Party for a period of at least three (3) months, the
other Party shall be entitled to terminate this Agreement upon prior written
notice to the affected Party without any liability whatsoever.


 


12.6.
Consequences of Expiration/Termination. In the event of any expiration
or termination of this Agreement, BVL shall perform such functions requested by
Customer that are reasonably necessary or required in connection with the
orderly conclusion of any active project as required by the terms of this
Agreement and Applicable Law.


 


12.6.1. Promptly upon expiration or termination of
this Agreement or at the request of the Disclosing Party, the Receiving Party
shall return to the Disclosing Party all Confidential Information of the
Disclosing Party in its possession. Furthermore, BVL shall promptly return all
Customer-supplied Composition, Customer-supplied Equipment, API, retained
samples, reference standards, data reports and other property, information
and/or know-how in recorded form that was provided by Customer, or Developed in
the performance of the services under this


 


31

















 


Agreement,
that are owned by or licensed to Customer, excepting that required to be
retained by Applicable Law, litigation holds or for regulatory compliance.


 


12.6.2. In the event of termination of BVL pursuant
to Section 12.2, Customer shall pay BVL for Manufacturing, Development and
other services completed up to the effective date of such termination of this
Agreement, the Parties shall meet and confer in good faith in an effort to
address disposition of any existing API, inventory, or supplies. Customer: (i) shall
purchase from BVL any existing inventories of Product conforming to the
Specification and Manufactured in accordance with cGMP and the Manufacturing
Process, at the then current price for such Product; and (ii) may either: (1) purchase
any Product in process held by BVL as of the date of the termination, at a
price to be mutually agreed (it being understood that such price shall reflect,
on a pro rata basis, work performed and non-cancelable, out-of-pocket expenses
actually incurred by BVL with respect to the Manufacture of such in-process
Product), (2) reimburse BVL for all work performed and non-cancelable
costs, and out-of-pocket expenses incurred by BVL and direct BVL to dispose of
such material at Customer’s cost.


 


12.6.3. BVL shall provide all reasonably requested
assistance for technology transfer and otherwise to ensure the orderly
transition of the Manufacturing and other services provided hereunder to an
alternate source, which shall be provided on a reasonable time and materials
basis (provided that BVL must obtain the prior written approval for any
required expenditures) or at no cost to Customer if Customer terminates
pursuant to Sections 12.3, provided, that no Confidential Information of
BVL shall be disclosed to such Alternate Source, it being understood that any
Product-specific information contained in the Master Batch Record for Product
is not Confidential Information of BVL and may be disclosed to the Alternate
Source; and


 


12.6.4. upon the effective date of termination of
this Agreement, Customer shall have no further obligation to BVL with respect
to any Purchase Orders with delivery dates beyond such date and BVL will have
no further obligations in Manufacture Product, provided that termination or
expiration shall have no effect on payment obligations that have accrued up to
the effective date of termination.


 


12.7.
Effect of Termination Under Section 12.2. In addition to Section 12.6,
in the event of any termination by Customer pursuant to Section 12.2;


 


12.7.1. Customer shall pay BVL for its costs of
Manufacturing, Development and other services completed up to the effective
date of such termination within **** (****) days of Customer’s receipt of all
Product, results, reports, data, samples, and other deliverables to be provided
pursuant to this Agreement. In the event the funds received by BVL prior to
such termination exceed costs incurred to the date of termination, BVL shall
refund the difference to Customer within **** (****) days after the effective
date of termination.


 


12.7.2. Customer shall reimburse BVL for the costs
of any BVL-supplied Composition that cannot be canceled, unless these materials
can be utilized by BVL on other projects. This reimbursement shall be made
within **** (****) days after receipt by Customer of an invoice itemizing the
material costs. Notwithstanding the forgoing, Customer’s liability for BVL
supplied Composition shall be limited to the amount of BVL supplied Composition
outlined in section 5.4. BVL agrees to transfer


 


32

















 


to
Customer any materials for which Customer has paid under the provision.
Termination shall have no effect on payment obligations that have accrued up to
the effective date of termination.


 


12.8.
Injunctive Relief for Breach or Threatened Breach. The Parties agree
that should this Agreement be breached, money damages may be inadequate to
remedy such a breach. As a result, the non-breaching Party shall be entitled to
seek, and a court of competent jurisdiction may grant, specific performance and
injunctive or other equitable relief as a remedy for any such breach or
threatened breach of this Agreement. Such remedy shall be in addition to all
other remedies, including money damages, available to a non-breaching Party at
law or in equity.


 


12.9.
Survival. Expiration or termination of this Agreement for any reason
shall not relieve either Party of any obligation accruing prior to such
expiration or termination or of any rights and obligations of the Parties that
by their terms survive termination or expiration of this Agreement, including,
without limitation, duties of confidentiality (Article 9), indemnification
(Article 8), intellectual property rights (Article 11), consequences
of termination (Section 12.6, 12.7 and 12.8), governing law and
jurisdiction (Article 16) and under the Quality Agreement (Attachment “E”)
of this Agreement. Notwithstanding anything to the contrary set forth herein,
the obligations identified in this Paragraph 12.9 shall survive for a period of
ten (10) years from any termination or expiration of this Agreement,
unless specified otherwise in the applicable Articles and Sections.


 


ARTICLE 13 — NOTICES


 


13.1.
All notices concerning this Agreement shall be given in writing, as follows: (a) by
actual delivery of the notice into the hands of the Party entitled to receive
it, in which case such notice shall be deemed given on the date of delivery; (b) by
Federal Express, UPS, DHL or any other overnight carrier, in which case the
notice shall be deemed given two (2) business days from the date of
delivery to such carrier or (c) by confirmed facsimile (followed by
delivery of an original via overnight carrier), in which case the notice shall
be deemed given on confirmation of transmission. All notices which concert this
Agreement shall be addressed as follows (or at such other address for a Party
as shall be specified in a notice given in accordance with this Section).


 


If
to BVL:


 


Ben
Venue Laboratories, Inc.

300 Northfield Road

Bedford, Ohio 44146

Attn: Vice President, Contract Manufacturing Services

Telephone: 440-232-3320

Facsimile: 440-439-6398


 


33

















 


With
a copy (that shall not constitute legal notice) to:


 


Joshua
M. Marks or Sr. Division Counsel

BEN VENUE LABORATORIES, INC.

300 Northfield Road

Bedford, Ohio 44146

Direct: (440) 201-3324

Fax: (440) 232-6264

email: jmarks@cle.boelfringet-ingelheim.com


 


If
to Customer:


 


Lantheus
Medical Imaging, Inc.

331 Treble Cove Road

North Billerica, MA 08162

Attn: General Counsel

Telephone: 978-671-8408

Facsimile:  978-671-8724


 


With
a copy (that shall not constitute legal notice) to:


 


Lantheus
Medical Imaging, Inc.

331 Treble Cove Road

North Billerica, MA 08162

Attn: General Manager of Manufacturing

Telephone: 978-671-8853

Facsimile:  978-671-9577


 


With
a copy (that shall not constitute legal notice) to:


Weil,
Gotshal & Manges L.L.P.

767 Fifth Avenue

New York, New York 10153

Attn: Charan J. Sandhu, Esq.

Telephone: (212) 310-8983

Facsimile:   (212) 310-8007


 


ARTICLE 14 — WAIVER


 


14.1.
No failure on the part of either Party to exercise, and no delay in exercising,
and no course of dealing with respect to, any right, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single of
partial exercise of any right, power or privilege under this Agreement preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The waiver of any term, condition, or provision of this Agreement
must be in writing and signed by an authorized representative of the waiving
Party. Any such waiver shall not be construed as a waiver of any other term,
condition, or provision, nor as a waiver of any subsequent breach of the same
term, condition, or provision, except as provided in a signed writing.


 


34

















 


ARTICLE 15 — ASSIGNMENT OF AGREEMENT


 


15.1.
Neither this Agreement, nor any rights or obligations hereunder, may be
assigned by either Party hereto without the prior written consent of the other
Party, which consent shall not be unreasonably withheld or unreasonably
delayed; except that either Party may assign this Agreement, without the other
Party’s prior written consent, to an entity that: (a) acquired all or
substantially all of the business or assets of such Party to which this
Agreement pertains (whether by merger, reorganization, acquisition, sale or
otherwise); and (b) agrees in writing to be bound by the terms and
conditions of this Agreement. Any assignment not permitted by this Section 15.1
shall be void and of no effect whatsoever.


 


ARTICLE 16 — GOVERNING LAW


 


16.1.
This Agreement and the rights and obligations of the Parties hereunder shall be
governed by Delaware law and, to the extent the laws of the State of Delaware
are preempted or otherwise made inapplicable by federal law, the laws of the
United States of America. Each of the Parties irrevocably and unconditionally:


 


16.1.1. agrees that any suit, action or legal
proceeding arising out of or relating to this Agreement shall be instituted in
the United States District Court for Delaware, or if such court does not
possess subject matter jurisdiction, of any type, or will not accept
jurisdiction, in any court of general jurisdiction in Wilmington, Delaware;


 


16.1.2. consents and submits to the exclusive
jurisdiction of such foregoing courts in any such suit, action or proceeding;


 


16.1.3. consents to personal jurisdiction in such
courts;


 


16.1.4. waives any objection which it may have to laying
of venue of any such suit, action or proceeding in said courts; and


 


16.1.5. waives any claim or defense of inconvenient
forum.


 


ARTICLE 17 — FORCE MAJEURE


 


17.1.
No Party shall be liable for a failure or delay in performing any of its
obligations under this Agreement (but, for the avoidance of doubt, shall be
liable for any performance actually rendered) if, and only to the extent that
such failure or delay (directly or indirectly) is due to causes beyond the
reasonable control of the affected Party, including: (i) acts of God; (ii) fire,
explosion, or unusually severe weather; (iii) war, whether declared or
undeclared, invasion, riot or other material civil unrest; (iv) [enactment
or change of laws or regulations by any Agency or Government, conflict of laws
or regulations by any Agency or government with the exception of enactments,
changes or conflicts where notice of such enactments, changes or conflicts and
a corresponding CAPA remediation plan cannot be satisfactorily agreed upon by
BVL, Customer and the agency or government who enacted the change], orders,
restrictions, actions, embargoes or blockages; (v) national or regional
emergency; (vi) injunctions, strikes, lockouts, labor trouble or other
industrial disturbances (regardless of the reasonableness of the demands of
labor); or (vii) acts of terrorism (“Force Majeure”). For the avoidance of
doubt, the Parties agree that an event shall only rise to the level of “Force
Majeure” under section 17.1 (iv) when, following reasonable consultation
with the other Party: (a) the Party claiming Force Majeure is
substantially and materially prejudiced in its ability to


 


35

















 


comply
with the requirements of this Agreement, (b) the claimed Force Majeure is
due to an enactment or change of laws or regulations, and (c) performance
is rendered impossible in the short-term or so manifestly burdensome that no
reasonable pharmaceutical manufacturing facility of like size and circumstances
to BVL would perform under such circumstances.


 


17.2.
The Party whose performance of this Agreement is affected or potentially
affected by a Force Majeure shall promptly notify the other Party of the Force
Majeure condition, explaining the nature, details and expected duration
thereof, and shall exert reasonable efforts to eliminate, cure or overcome any
such condition and to resume performance of its obligations under this
Agreement as soon as possible. Upon termination of the event of Force Majeure,
the performance of any suspended obligation or duty shall promptly recommence.


 


ARTICLE 18 —
TITLE OF GOODS


 


18.1.
Title to API and Customer-supplied Composition shall remain with Customer at
all stages of the Manufacturing Process and the foregoing shall be held in
bailment by BVL. BVL shall provide within the Facility an area or areas where
the API, Customer-supplied Composition, Product, any intermediates (and
components thereof), and any work in process are segregated and stored in
accordance with the Specifications and cGMP, and in such a way as to be able at
all times to clearly distinguish the same from products and materials belonging
to BVL, or held by it for a Third Party’s account.


 


18.2.
BVL shall at all times take such measures as are required to protect the API.
Customer-supplied Composition, Product, and any work in process from risk of
loss or damage at all stages of the Manufacturing Process. BVL shall ensure
that the API Customer-supplied Composition, Product, and any work in process
are free and clear of any liens or encumbrances. BVL shall immediately notify
Customer if at any time it believes any API, Customer-supplied Composition,
Product or work in process have been damaged, lost or stolen.


 


ARTICLE 19 —
ENTIRE AGREEMENT


 


19.1.
This Agreement, together with the Attachments identified herein, embody the
entire agreement and understanding between BVL and Customer relating to the
subject matter hereof, superseding and hereby terminating the 1993 Agreement,
and constituting the entire understanding between the Parties. It is intended
as a final expression of their agreement and as a complete statement of terms
and conditions thereof. If there is any inconsistency between this Agreement
and any other writings, which are referred to or are incorporated herein, or
any Purchase Orders, invoices, or other documents relating to Product, the
terms and conditions of this Agreement shall take precedence in any contract
construction. This Agreement supersedes any previous agreements or arrangements
between the Parties and any customary practice of the Parties at variance with
the terms hereof. Neither Party may rely upon oral representations that are
inconsistent with the terms of this Agreement.


 


ARTICLE 20 —
SEVERABILITY


 


20.1.
In the event any provision of this Agreement is held to be invalid or
unenforceable in any jurisdiction, the Parties shall negotiate in good faith a
valid, legal and enforceable substitute provision that most nearly reflects the
original intent of the Parties and all other provisions hereof shall remain in
full force and effect in such jurisdiction and shall be


 


36

















 


liberally
construed in order to carry out the intentions of the Parties hereto as nearly
as may be possible.


 


ARTICLE 21 —
INDEPENDENT CONTRACTORS


 


21.1.
Neither Party shall have the right to control the activities of the other in
the performance of this Agreement and each shall perform as an independent
contractor, and nothing herein shall be construed to be inconsistent with that
relationship or status. Under no circumstances shall the employees or Agents of
one Party be considered employees or Agents of the other. This Agreement shall
not constitute, create, or in any way be interpreted as a joint venture,
partnership, or formal business organization of any kind.


 


ARTICLE 22 —
AMENDMENTS


 


22.1.
No provision of this Agreement or the Attachments attached hereto may be
modified or supplemented, except by an instrument in writing signed by both BVL
and Customer.


 


ARTICLE 23 —
HEADINGS AND CONSTRUCTION


 


23.1.
The Article and Section headings appearing herein are included only
for the convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement. As used herein, “including”,
“includes” and derivates thereof shall be deemed to be followed by “without
limitation”.


 


ARTICLE 24 —
REVIEW BY LEGAL COUNSEL


 


24.1.
Each party has carefully reviewed this Agreement, and understands its terms.
Each Party has been given sufficient opportunity to seek legal advice prior to
signing this Agreement, and has either sought legal advice with counsel
experienced in issues of confidentiality in regards to this Agreement, or has
relied wholly upon that Party’s own judgment and knowledge in executing this
Agreement. Each Party fully understands and voluntarily accepts each and every
provision contained in this Agreement. Failure to seek legal advice prior to
signing this Agreement does not excuse either Party from failure to understand
the terms and conditions set forth in this Agreement. This Agreement has been
prepared on the basis of the mutual understanding of the Parties and in the
event of an ambiguity, such as ambiguity shall not be strictly construed
against either Party as a drafted of this Agreement.


 


ARTICLE 25 —
RECALL


 


25.1.
In the event: (a) any agency or governmental authority issues a request,
directive, or order that Product be recalled; or (b) a court of competent
jurisdiction orders such a recall; or (c) the Customer determines that the
Product should be recalled or withdrawn. Customer, in cooperation with BVL
shall take all appropriate corrective action. Customer shall also retain the
right to conduct a Product recall for any safety reasons Customer deems
significant. In the event that Product is recalled or that Customer is required
to disseminate information regarding Product covered by this Agreement,
Customer shall so notify BVL and, not later than may be required to permit
Customer to meet such obligations, BVL shall provide Customer with such
assistance in connection with such recall as may reasonably be requested by
Customer. Customer shall consult with BVL prior to making any determination to
recall


 


37

















 


Product
if practicable. BVL will be financially responsible for the costs of any recall
or withdrawal (including but not limited to the actual cost of manufacturing
the Product, through final packaging, pro-rated over the usable portion of the
batch, if any) to the extent its negligence, willful misconduct, or breach of
any covenant, representation or warranty hereunder is responsible for such
recall, provided, that, to the extent any recall or withdrawal includes any
Batch(es) not yet released to Customer that are subject to Section 8.5,
BVL’s liability for such un-released Batch(es) shall be subject to the
limitations set forth in Section 8.5 until such release. For the avoidance
of doubt, the costs of recall shall be limited to direct costs and expenses
associated with the recall (i.e., notices, collection, shipping, destruction)
but shall specifically exclude lost profits, lost market share, interruption of
business, harm to reputation, or any other indirect collateral cost, such as
unrelated marketing, advertising, or any other cost, fee or charge not directly
related the recall of Product.


 


ARTICLE 26 —
ENGLISH LANGUAGE


 


26.1.
This Agreement, all schedules, attachments, and exhibits hereto, and all
reports, documents and notices required hereunder, referred to herein or
requested by the Parties, in connection with this Agreement shall be written in
the English language. Except as otherwise required by Applicable Law, the
binding version of all of the foregoing shall be the English version.


 


ARTICLE 27 —
EXPORT PROVISION


 


27.1.
Each Party agrees and understands that the information and any materials
provided by the other Party under this Agreement are subject to United States
laws and regulations, which may restrict certain exports, re-exports or other
transfers to other countries and parties. Each Party agrees that no materials
or information provided to it under this Agreement by the other Party will be
exported re-exported, transferred or disclosed contrary to the applicable laws
and regulations of the United States, or to any country, entity or other party
which is ineligible to receive such items under U.S. laws and regulations,
including the regulations of the U.S. Department of Commerce and the U.S.
Department of Treasury.


 


ARTICLE 28 —
ACKNOWLEDGEMENT


 


28.1.
Each Party understands and acknowledges that the other Party individually or in
collaboration with others may now or hereafter develop or market products which
compete with its own products or services. Subject to the confidentiality
obligations set forth in Article 9 and Section 2.3, nothing in this
Agreement shall impair the right of either Party to develop, make, use,
procure, or market other products or services now or in the future which may be
competitive to those products or services offered by the other Party to this
Agreement, including without limitation the Products Manufactured pursuant to
this Agreement. Neither Party is under a duty to disclose any planning or other
information relating to competition with the other’s products or services.


 


ARTICLE 29 —
CHANGE NOTIFICATION


 


29.1.
BVL shall notify Customer promptly of any change in ownership of BVL, and in no
event later than three (3) days of such change being made public.


 


38

















 


ARTICLE 30 —
BOOKS AND RECORDS


 


30.1.
Any books and records to be maintained under this Agreement by a Party or its
Affiliates shall be maintained in accordance with U.S. generally accepted
accounting principles, consistently applied, except that the same need not be
audited (but if any audits are conducted by a Party, the results of such audits
shall be maintained along with such books and records).


 


ARTICLE 31 —
BINDING EFFECT


 


31.1.
This Agreement shall be binding upon and inure to the benefit of the Parties
hereto and their respective successors and permitted assigns.


 


ARTICLE 32 — USE
OF NAME AND RESERVATION OF RIGHTS


 


32.1.
Except as otherwise provided herein, neither Party shall have any right,
express or implied, to use in any manner the name or other designation or
intellectual property of the other Party or its Affiliates or any other trade
name or trademark of the other Party or its Affiliates for any purpose in
connection with the performance of this Agreement or otherwise.


 


ARTICLE 33 —
COUNTERPARTS


 


33.1.
This Agreement may be executed in several counterparts, each of which is an
original notwithstanding variations in formal or file designation which may
result from the electronic transmission, storage and printing of copies of this
Agreement from separate computers or printers.


 


*-*-*-*


 


39

















 


IN WITNESS WHEREOF, the Parties hereto have
executed this Agreement by their duly authorized representatives as of the
dates set forth below:


 


	
  FOR: 

  	
  BEN VENUE
  LABORATORIES, INC.:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature: 

  	
  

  /s/ Thomas Murphy

  	
   

  	
   

  	
  

  Date:

  	
  7/30/08

  
	
   

  	
  Thomas Murphy

  President and COO

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  FOR: 

  	
  LANTHEUS MEDICAL
  IMAGING, INC.:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature: 

  	
  

  /s/ Michael P. Duffy

  	
   

  	
   

  	
  

  Date: 

  	
  7/30/08

  
	
   

  	
  Michael P. Duffy

  Vice President and Secretary

  	
   

  	
   

  	
   

  
							



 


40