Document:

Exhibit 10.10

 

April 19, 2017

Confidential

 

Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Double asterisks denote omission.

 

Manufacturing & Supply Agreement

 

This Manufacturing and Supply Agreement (the “Agreement”) is made as of this 25 day of April, 2017 (the “Effective Date”), by and between Zavante Therapeutics, Inc., a corporation organized under the laws of the State of Delaware, USA, with a place of business located at 11750 Sorrento Valley Road, Suite 250, San Diego California 92121, USA (“Zavante”) and Fisiopharma, S.r.l., a corporation organized under the laws of Italy, with a place of business located at Via Andrea Appiani, 22, 20121 Milano, Italy (“Fisiopharma”).

 

WHEREAS, Zavante holds certain intellectual property rights to a finished dosage form of fosfomycin disodium for intravenous injection (the “Finished Drug Product”)

 

WHEREAS, Fisiopharma is a manufacturer of finished and bulk drug products wishes to manufacture and supply fosfomycin disodium for intravenous injection in the primary container closure system (“Bulk Drug Vials”) to Zavante on an exclusive basis for the Territory (as such term is defined below);

 

WHEREAS, Zavante desires a supply of commercial quantities of Bulk Drug Vials; and

 

WHEREAS, Zavante and Fisiopharma also desire to enter into a Quality Agreement with respect to the manufacturer of the Bulk Drug Vials, as provided herein;

 

NOW, THEREFORE, in consideration of the mutual covenants set forth herein, Fisiopharma and Zavante (each, a “Party” and, collectively, the “Parties”) agree as follows.

 

1.                                      Scope of Agreement

 

1.1                               This Agreement shall apply to all purchases of Bulk Drug Vials by Zavante from Fisiopharma-during the term of this Agreement.

 

1.2                               This Agreement does not constitute a purchase order.  Purchases under this Agreement shall be made only with purchase orders issued by Zavante to Fisiopharma (each, a “Purchase Order”).  The Purchase Order shall set forth the quantities of Bulk Drug Vials desired, the desired delivery date and the desired destination for delivery.  All terms and conditions of the Purchase Orders shall apply, provided that in the event of a conflict between the terms of any Purchase Order, order acknowledgement, packaging slip or other documentation, and the terms of this Agreement, the terms of this Agreement shall control, unless such documentation expressly states that it overrides conflicting terms of this Agreement and is signed by each of the Parties.

 

1.3                               All Bulk Drug Vials sold by Fisiopharma to Zavante will be manufactured by Fisiopharma in accordance with the terms of this Agreement.

 

2.                                      Technology Transfer

 

2.1                               Technology Transfer.  Zavante shall assist Fisiopharma with the transfer of the relevant manufacturing and analytical technology required to manufacture the Bulk Drug Vials at Fisiopharma’s facility located at Nucleo Industriale, 84020, Palomonte (SA), Italy (the “Facility”), to the extent such transfer is consistent with Zavante’s legal obligations to any third parties.  Zavante shall bear the costs associated with such technology transfer in accordance with the amounts set forth in Schedule A.  Under no circumstances will Zavante be liable for

 

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any additional costs associated with technology transfer except pursuant to a written amendment to this Agreement or a Purchase Order issued by Zavante and subject to the terms and conditions of this Agreement.  Payment terms for reimbursement of technology transfer costs shall be net [**] following Zavante’s acceptance of the completed Technology Transfer Deliverables (as set forth in Schedule A).

 

3.                                      Manufacturing

 

3.1                               Fisiopharma shall manufacture, test, package, store, code, release and deliver the Bulk Drug Vials at the Facility, in accordance with the specifications set forth on Schedule B attached hereto, as may be updated by Zavante from time to time upon written notice to Fisiopharma (the “Specifications”), Applicable Laws (as defined in Section 9.1.1), the NDA (as defined in Section 3.4), and the Quality Agreement (as defined in Section 10.1).  Fisiopharma shall procure and provide all labels, packaging, materials components and containers required to manufacture the Bulk Drug Vials in accordance with the Specifications, except for the API Mixture, which will be provided by Zavante in accordance with Section 3.6.  If Fisiopharma wishes to make any change to the Specifications (including, but not limited to, any change that could affect the purity, potency, identity and/or physical properties of the Bulk Drug Vials or the site of its manufacture), or if Fisiopharma believes that a change is required by (a) any regulatory agency which has jurisdiction over Zavante, Fisiopharma and/or the Bulk Drug Vials; or (b) the U.S. Pharmacopoeia, Fisiopharma shall notify Zavante in writing in advance thereof and comply with the requirements of Sections 3.2 and 3.3 prior to implementing such change. Such notification shall describe the proposed change in sufficient detail so as to permit Zavante to understand the reasons for the proposed change and evaluate the impact of such change on its development plans, its plans to seek regulatory approval and its commercialization plans with respect to Bulk Drug Vials.

 

3.2                               If any change to the Specifications requires the approval of the U.S. Food and Drug Administration and any successor agency of the U.S. government (the “FDA”), other governmental agency or any foreign regulatory agency equivalent to the FDA, each having jurisdiction over Bulk Drug Vials or Zavante’s marketing of the Bulk Drug Vials (each a “Regulatory Agency”), such change shall not be implemented until each Regulatory Agency has approved such change in writing and Zavante has had sufficient time to adopt and implement such change into its operations.  For the avoidance of doubt, Fisiopharma shall not supply to Zavante hereunder, and Zavante shall have no obligation to accept any Bulk Drug Vials from Fisiopharma manufactured in contravention of this Section 3.2.

 

3.3                               Without limiting the generality of Sections 3.1 or 3.2, under no circumstances shall Fisiopharma change the Specifications without Zavante’s prior written approval, in its sole discretion.

 

3.4                               Fisiopharma will undertake, at its own cost and expense, all commercially reasonable steps necessary to enable Zavante to secure from the relevant Regulatory Agencies approval of Fisiopharma as a source of supply of Bulk Drug Vials to be marketed in the United States, its territories and possessions (the “Territory”).  Without limiting the generality of the foregoing, Fisiopharma will supply to Zavante, as soon as possible, sufficient quantities of Bulk Drug Vials to enable Zavante to support the filing of one or more New Drug Application (or Abbreviated New Drug Application, if applicable) (the “NDA”), together with all amendments and supplements thereto, referencing Fisiopharma as its supplier of Bulk Drug Vials.  Fisiopharma will be responsible for procuring and maintaining all regulatory filings and any other compliance efforts related to the Facility and the manufacturing the Bulk Drug Vials that are required in order to obtain approval from the FDA of Zavante’s NDAs referencing Bulk Drug Vials and equivalent approvals from Regulatory Agencies in the Territory, at no additional cost to Zavante. However, in the event that Fisiopharma is assessed fees as a “Foreign FDF Facility” under the U.S. Generic Drug User Fee Amendments of 2012 (U.S. Pub. L. 112-144, Title III) (“GDUFA”) as a direct result of Fisiopharma’s supply of the Bulk Drug Vials to Zavante under this Agreement, Fisiopharma will invoice Zavante for Zavante’s portion of the “Foreign FDF Facility” GDUFA fee, and Zavante will pay the invoiced amount promptly.  Notwithstanding the foregoing, in the event that Fisiopharma is assessed fees as a “Foreign FDF Facility” under

 

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GDUFA in connection with manufacturing activities performed for any Third Parties in addition to Zavante, the amount of such fee charged to Zavante will be shared equally between Zavante and such Third Parties.

 

3.5                               Fisiopharma shall test, or have tested, each lot of Bulk Drug Vials manufactured for Zavante by Fisiopharma, using the analytical testing methodologies that are set forth in the Specifications.  With each shipment of Bulk Drug Vials, Fisiopharma shall deliver to Zavante certificates of analysis and compliance from Fisiopharma: (a) stating that the Bulk Drug Vials being shipped have been tested and conform to the Specifications; (b) setting forth in detail the testing methodology employed by Fisiopharma in making the foregoing determination and the results generated by such tests; and (c) confirming compliance with the regulations set forth in United States Code of Federal Regulations Section 21, Parts 210—211, 820 and Section 21 Subchapter C (Drugs) (“cGMP”) and other Applicable Laws.

 

3.6                               Zavante shall purchase and arrange to have shipped to Fisiopharma [DDU (Incoterms 2010)] sufficient quantities of the active pharmaceutical ingredient, sterile fosfomycin sodium meeting European Pharmacopoeia 02/2008: 1329 monograph specifications (the “API”), blended with succinic acid (together, the “API Mixture”) exclusively for Fisiopharma to manufacture the Bulk Drug Vials for Zavante.  Under no circumstances shall Fisiopharma: (a) use the API Mixture for any purpose other than manufacturing the Bulk Drug Vials for Zavante; (b) supply the API Mixture to any third party; or (c) make any disclosure of, or grant any license over, the API Mixture or any analytical methods, procedures or Confidential Information provided by Zavante or developed by Fisiopharma in the course of performing services for Zavante under this Agreement, without prior written approval from Zavante in its sole discretion.  The initial value of the API Mixture is [**] Euros (€[**]) per Kilogram of API Mixture, subject to adjustment by Zavante from time to time.

 

3.7                               Fisiopharma will give Zavante a monthly inventory report of the API Mixture held by Fisiopharma, which will contain the following information for the month:

 

3.7.1                     Quantity Received:  The total quantity of API Mixture that complies with the Specifications and is received at the Manufacturing Services Site during the applicable period);

 

3.7.2                     Quantity Dispensed: The total quantity of API Mixture dispensed by Fisiopharma during the applicable period. The Quantity Dispensed is calculated by adding the Quantity Received to the inventory of API Mixture that complies with the Specifications held at the beginning of the applicable period, less the inventory of API Mixture that complies with the Specifications held at the end of the period. The  Quantity  Dispensed  will  only  include  API Mixture  received  and dispensed in commercial manufacturing of the Bulk Drug Vials and will not include any (a) API Mixture that must be retained by Fisiopharma as samples; (b) API Mixture contained in Bulk Drug Vials that must be retained as samples; (c) API Mixture used in testing (if applicable); and (d) API Mixture received or dispensed in technical transfer activities or development activities during the applicable period, including without limitation, any regulatory, stability, validation or test batches manufactured during the applicable period; and

 

3.7.3                     Quantity Converted: The total amount of API Mixture contained in the Bulk Drug Vials manufactured with the Quantity Dispensed, delivered by Fisiopharma, and not rejected, recalled or returned in accordance with this Agreement due to Fisiopharma’s failure to manufacture the Bulk Drug Vials in accordance with Specifications, cGMP, and other Applicable Laws.

 

Within [**] after the end of each calendar year, Fisiopharma will prepare an annual reconciliation of API Mixture on the reconciliation report form including the calculation of the “Actual Annual Yield” or “AAY” for the Bulk Drug Vials during the calendar year. AAY is the percentage of the Quantity Dispensed that was converted to Bulk Drug Vials, and is calculated as follows:  Quantity Converted during the calendar year multiplied by Quantity Dispensed during the calendar year, expressed as a percentage.

 

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3.8                               Unless otherwise agreed, after Fisiopharma has produced a minimum of [**] successful commercial production batches of Bulk Drug Vials and has produced commercial production batches for at least [**], the Parties will mutually agree on the target yield for the Product (“Target Yield”). The Target Yield will be revised annually to reflect the actual manufacturing experience as agreed to by the Parties.

 

If the Actual Annual Yield increases or decreases by more than [**] percent ([**]%) from the respective Target Yield in a calendar year, then the Parties agree to discuss, in good faith, an appropriate financial adjustment. It will not be a material breach of this Agreement by Fisiopharma if the Actual Annual Yield is less than the Target Yield.

 

3.9                               The Parties agree to work together to develop and implement cost improvement measures related to the manufacture of the Bulk Drug Vials. Either Party may propose cost improvement measures, but the implementation of, and any investments required in connection with, such cost improvement investments shall require written approval of both Parties. Following agreement of the Parties, each Party will be entitled to receive reimbursement for reasonable costs which it incurred in developing and implementing such cost improvements. Cost improvement benefits shall be allocated equitably between the Parties and will be reflected in mutually agreeable adjustments to the Price.

 

4.                                      Forecasts; Supply Commitment

 

4.1                               In order to assist Fisiopharma in planning the production runs for the Bulk Drug Vials, Zavante shall use its commercially reasonable efforts to provide to Fisiopharma, at least [**] prior to the beginning of each [**], a [**] rolling forecast of the quantities of Bulk Drug Vials required by Zavante, by month, for the following [**] period.  Zavante shall deliver the first such forecast to Fisiopharma as soon as reasonably practicable following the execution of this Agreement, and will update the forecast every [**] thereafter.  Zavante may, at its discretion, update such forecast more frequently.  It is understood that all such forecasts are intended to be Zavante’s estimates of its purchase requirements and they shall not be binding upon Zavante; however, Fisiopharma shall, at minimum, supply the amounts specified in Section 4.3.

 

4.2                               After the Finished Drug Product has received approval for marketing from a Regulatory Agency and has been made generally commercially available (hereinafter “Commercial Launch”), Fisiopharma shall, within [**] after Zavante has provided its [**] forecast, notify Zavante in writing of any prospective problems it might have with respect to supplying Zavante’s forecasted order quantities.  Upon receipt of such notice, the Parties shall promptly discuss the inability to supply the amounts forecasted by Zavante and work in good faith to agree upon revised forecast amounts.  Failing agreement, Zavante’s last submitted forecast shall be deemed to be the new [**] forecast.

 

4.3                               Zavante shall place firm Purchase Orders for Bulk Drug Vials with Fisiopharma at least [**] prior to requested delivery date, except for the Purchase Orders for the [**] after receipt of NDA Approval for the Bulk Drug Vials, which may be submitted only [**], respectively, prior to the requested delivery dates.  Subject to such lead-time requirements, Fisiopharma shall deliver to Zavante’s designated facility during any given month, pursuant to Purchase Orders provided under Section 3.4, the amount specified in the Purchase Order therefor, which amount may be up to the greater of (a) the amount specified in the most recent forecast for such month or (b) [**] percent ([**]%) of Zavante’s average monthly purchases for the previous [**] (the “Supply Commitment”), depending in the agreed batch size.  In addition, Fisiopharma shall use its best efforts to deliver any and all ordered amounts in excess of the Supply Commitment.

 

4.4                               Zavante shall provide to Fisiopharma Purchase Orders for Bulk Drug Vials within the lead times set forth in Section 4.3 of this Agreement.  Within [**] after the date that a Purchase Order is submitted (the “Order

 

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Date”), Fisiopharma shall acknowledge receipt of Zavante’s Purchase Order and confirm that the amounts of Bulk Drug Vials ordered in the Purchase Order, subject to Section 4.3, will be timely supplied.

 

4.5                               Fisiopharma agrees to maintain at the Facility a rolling [**] safety stock of all materials and components required to be used for the manufacture of the Bulk Drug Vials based on the [**] rolling forecast.   Fisiopharma will promptly notify Zavante if Fisiopharma’s manufacturing capacity at the Facility will be insufficient to fill a Purchase Order submitted by Zavante.  Such notice will include the expected duration of the shortage and its impact on the supply of Bulk Drug Vials to Zavante.  Such notification shall not operate to relieve Fisiopharma of their obligations to deliver the ordered amounts of Bulk Drug Vials or affect Zavante’s right to pursue any remedies that may be available to it.  Fisiopharma will use its best efforts to mitigate the impact on Zavante of shortages or other constrained capacity.  The obligations of Fisiopharma to maintain the safety stock specified herein shall commence as of the Commercial Launch.

 

4.6                               Zavante shall provide Fisiopharma a Long-Range Outlook of Zavante’s requirements for Bulk Drug Vials within [**] after filing the NDA with the FDA (“Long-Range Outlook”). The Long-Range Outlook shall be for [**] and Zavante shall update the Long-Ranch Outlook every [**] during the term of this Agreement. The initial Long-Range Outlook will be used by the Parties to mutually agree upon the appropriate manufacturing capacity to be reserved for production of Bulk Drug Vials for Zavante at the Facility. At each update of the Long-Range Outlook, the Parties will review the capacity reserve and may need to mutually agree upon one or more capacity plans to expand the manufacturing capacity for Bulk Drug Vials for Zavante (“Capacity Increase Plan”). The Capacity Increase Plan will identify in detail the scope of the activities to be performed with appropriate capacity triggers to ensure uninterrupted supply of Bulk Drug Vials. The Capacity Increase Plan must include all necessary Facility, process and infrastructure investments and corresponding changes in the Bulk Drug Vial pricing once additional capacity is online and supplying Bulk Drug Vials to Zavante. All Long-Range Outlooks are for planning purposes only and shall not be binding on any Party.

 

5.                                      Order; Delivery

 

5.1                               Each Purchase Order for Bulk Drug Vials shall specify the quantity of Bulk Drug Vials ordered and the required delivery date and destination, consistent with the terms of this Agreement.  Such delivery dates are “on dock” at Zavante’s designated facility for such delivery.  Deliveries must be made on normal business days of the designated facility unless otherwise coordinated.

 

5.2                               Delivery of Product shall be EXW (Incoterms 2010) the Facility. Fisiopharma shall arrange for shipping of the Bulk Drug Vials, with a carrier designated by Zavante, in the manner customarily arranged for its own products from the point of manufacture to the destination specified by Zavante.  Fisiopharma shall promptly notify Zavante of the expected delivery date of each order to enable receipt to be coordinated.  Fisiopharma shall arrange for export clearances and loading at the port of departure. Expenses for special packaging, export or customs agents, shall be included in Fisiopharma’s invoice and paid by Zavante.  Zavante shall arrange for insurance from the Facility to the ultimate destination and import customs clearances at the destination country.  Zavante shall be responsible for all loading charges, freight, insurance, import customs clearances, export, special packaging, and other shipping expenses from the Facility to the ultimate destination. Title to the Bulk Drug Vials and risk of loss, delay or damage in transit for Bulk Drug Vials purchased by Zavante shall pass to Zavante when a shipment of the Product is placed at the disposal of Zavante’s carrier at the Facility.

 

5.3                               Each shipment of Bulk Drug Vials shall include certificates of analysis and compliance, which include, without limitation, a statement of compliance with cGMP, and such other documentation and information as may be necessary or desirable for complying with import, export and customs laws, regulations and requirements as applicable.

 

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6.                                      Purchase Commitment; Price; Payment

 

6.1                               Subject to Section 6.3, Zavante agrees to purchase from Fisiopharma the quantity of Bulk Drug Vials required to manufacture a minimum of [**] percent ([**]%) of the annual Finished Drug Product intended by Zavante for commercial sale in the Territory during the term of this Agreement (the “Purchase Commitment”).  From time to time during the Term, Zavante will consider increasing the Purchase Commitment based upon Fisiopharma’s on-time delivery performance and manufacturing capacity for the Bulk Drug Vials.  Notwithstanding the foregoing, (a) Zavante shall be entitled to take such steps as are necessary to qualify one or more alternative Bulk Drug Vials suppliers at any time during the term of this Agreement; and (b) Zavante shall be relieved of such Purchase Commitment in the event that Fisiopharma is unwilling or unable to manufacture and deliver the Purchase Commitment to Zavante.

 

6.2                               The price for the Bulk Drug Vials purchased by Zavante hereunder is set forth in Schedule C (the “Price”).

 

6.3                               Zavante shall have no obligation to comply with its Purchase Commitment in the event of breach by Fisiopharma of any of the terms set forth herein which breach is not cured within the period set forth in Section 11.2.  In the event the Purchase Commitment terminates pursuant to this Section 6.3, Fisiopharma shall be obligated to continue to perform under the terms of this Agreement.

 

6.4                               Fisiopharma shall issue its invoice to Zavante at the time of shipment. Each invoice shall set forth, in Euros, the applicable Price for the shipment properly determined in accordance with the provisions of this Agreement. Payment of the invoice by Zavante shall be within [**] following receipt of each such invoice.  Payment shall be subject to the inspection and acceptance procedures set forth in Section 7.  Zavante may withhold payment of that portion of any invoice that it disputes in good faith pending resolution of such dispute.  All invoices and payments shall be in Euros.

 

7.                                      Inspection of Shipments

 

7.1                               Zavante shall visually inspect or have visually inspected the Bulk Drug Vials delivered hereunder for obvious damage and/or shortage (collectively, “Obvious Damage”) immediately upon receipt and shall provide Fisiopharma with written notice of any such Obvious Damage within [**] after receipt.  Zavante shall be deemed to have accepted any shipment of Bulk Drug Vials but only with respect to Obvious Damage, unless Fisiopharma receives the written notice required within the [**] time period specified above.  At its discretion, Zavante may also test, or have tested, any lot of Bulk Drug Vials supplied to Zavante.

 

7.2                               Promptly after discovery, Zavante may provide Fisiopharma with written notice of any non-obvious damage, including adulteration of the Bulk Drug Vials, failure to meet Specifications, or other latent damage (collectively, “Non-Obvious Damage”).  Obvious Damage and Non-Obvious Damage shall hereinafter be collectively referred to as “Damage.”

 

7.3                               Zavante may reject any portion of any shipment of Bulk Drug Vials which contains any Damage by providing written notice to Fisiopharma of its rejection.  Zavante agrees to provide Fisiopharma’s Quality Control Department with documentation of Damage to confirm the existence thereof in connection with any notice of rejection.

 

7.4                               If Fisiopharma and Zavante disagree as to the existence of Damage, then they will diligently and in good faith repeat the analyses of samples from the shipment in question and implement suitable controls to determine the source of the discrepancy in results and the cause of any detected Damage, applying all objective and sound principles of scientific investigation.  If, after such repeated analyses, Fisiopharma and Zavante continue to disagree,

 

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they will then submit representative samples of the shipment to a mutually acceptable independent testing lab and the results of said lab shall be binding on Fisiopharma and Zavante.  The costs associated with such submission shall be borne by the Party against which the lab decided.

 

7.5                               Provided Zavante provides notice of the Damage claimed within [**] of receipt of the allegedly Damaged Bulk Drug Vials in the case of Obvious Damage and promptly following the date on which Zavante becomes aware of the allegedly Damaged Bulk Drug Vials in the case of Non-Obvious Damage, whether or not Fisiopharma accepts Zavante’s basis for rejection, promptly on receipt of a notice of rejection and/or shortage, Fisiopharma shall, at Zavante’s request, reimburse Zavante for the cost of the API Mixture used to manufacture such Damaged Bulk Drug Vials and (a) at no additional cost to Zavante, deliver to Zavante quantities of replacement Bulk Drug Vials equal to the rejected or short quantities as soon as reasonably practicable thereafter, and in no event more than [**] after such notice is given; or (b) refund the invoice price for the Damaged Bulk Drug Vials.  Fisiopharma will use expedited means of transport, if so requested by Zavante, at Zavante’s expense unless the Bulk Drug Vials being replaced are determined to have been Damaged.  Any return of Damaged Bulk Drug Vials to Fisiopharma shall be at Fisiopharma’s expense.

 

8.                                      Confidentiality and Intellectual Property Rights

 

8.1                               Confidentiality.  During the term of this Agreement and for a period of [**] following termination of this Agreement, Fisiopharma agrees not to publish, disclose or use for any purpose other than its performance hereunder, any Zavante Intellectual Property (as such term is defined in Section 8.2), or any information which is designated by Zavante as proprietary or confidential, including any and all technical information related to the API, the API Mixture or the Bulk Drug Vials (collectively, the “Products”), and any know-how associated therewith, whether or not identified or labeled as confidential information (“Confidential Information”), including, without limitation, information stored on audio or video tapes and disks, or information or knowledge visually acquired by or generated by Fisiopharma personnel in the form of written notes and memoranda memorializing information or knowledge acquired visually, aurally or orally in the course of its performance hereunder. Fisiopharma shall limit disclosure of Confidential Information to only those of its officers and employees who are directly concerned with the performance of this Agreement, on a need-to-know basis.  Fisiopharma shall advise such officers or employees, upon disclosure of any Confidential Information to them, of the confidential nature of the Confidential Information and the terms and conditions of this Section 8.1, and shall use all reasonable safeguards to prevent unauthorized disclosure of the Confidential Information by such officers and employees.

 

The Parties agree that the following shall not be considered Confidential Information subject to this Agreement: (a) information that is in the public domain by publication or otherwise, provided that such publication is not in violation of this Agreement; (b) information that Fisiopharma can establish in writing was in its possession prior to the time of disclosure by Zavante and was not acquired, directly or indirectly, from Zavante; (c) information that Fisiopharma lawfully receives from a third party; provided, however, that such third party was not obligated to hold such information in confidence; (d) information that, prior to the Zavante’s disclosure thereof, was independently developed by Fisiopharma without reference to any Confidential Information as established by appropriate documentation; and (e) information that Fisiopharma is compelled to disclose by a court, administrative agency, or other tribunal; provided however, that in such case Fisiopharma shall immediately give as much advance written notice as feasible to Zavante to enable Zavante to exercise its legal rights to prevent and/or limit such disclosure.  In any event, Fisiopharma shall disclose only that portion of the Confidential Information that, in the opinion of Fisiopharma’s legal counsel, is legally required to be disclosed and will exercise its best efforts to ensure that any such information so disclosed will be accorded confidential treatment by said court, administrative agency or tribunal.

 

All Confidential Information shall remain the property of Zavante.  Upon the termination of this Agreement, or at any time upon the request of Zavante, Fisiopharma shall immediately return or destroy any Confidential

 

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Information in Fisiopharma’s possession, custody or control, except that Fisiopharma may keep one (1) physical copy for archival purposes.  Confidential Information in digital form may be retained for archival and/or regulatory purposes only if stored in a way that restricts access to persons with a legitimate need to know and commercially reasonable efforts are used to prevent additional copies from being made.  Zavante’s failure to request the return of Confidential Information shall not relieve Fisiopharma of its confidentiality obligations under this Agreement.

 

Fisiopharma acknowledges and expressly agrees that the remedy at law for any breach by it of the terms of this Section 8.1 shall be inadequate and that the full amount of damages which would result from such breach are not readily susceptible to being measured in monetary terms.  Accordingly, in the event of a breach or threatened breach by Fisiopharma of this Section 8.1, Zavante shall be entitled to immediate injunctive relief prohibiting any such breach and requiring the immediate return of all Confidential Information. The remedies set forth in this Section 8.1 shall be in addition to any other remedies available for any such breach or threatened breach, including the recovery of damages from Fisiopharma. The terms and conditions of this Agreement, but not the fact of its existence, shall constitute Confidential Information of Zavante.

 

8.2                               Intellectual Property.

 

(a)                                 For the purposes of this Agreement, “Zavante Intellectual Property” shall refer to (i) all inventions, discoveries, know-how, information, data, writings, and other intellectual property, in any form whatsoever, both tangible and intangible, developed by or on behalf of Fisiopharma, Zavante or Zavante’s licensor for the Products, in the course of performance under this Agreement that relate, directly or indirectly, to any of the Products (each, an “Product Development”); and (ii) all trademarks, service marks, trade names, domain names, trade dress, logos, patents, patent applications, inventions, discoveries, technology, know-how, trade secrets, data, registered and unregistered design rights, copyrights, author rights, database and sui-generis rights and all other similar rights in any part of the world including, where such rights are obtained or enhanced by registration, any registration of such rights and applications, and rights to apply for such registrations, owned by or licensed to Zavante prior to the Effective Date. All Zavante Intellectual Property is and shall remain the property of Zavante.  Zavante hereby grants to Fisiopharma, a non-exclusive, non-transferable, and without any right to sublicense, license to use, exploit, reproduce and distribute any Zavante Intellectual Property solely to the extent necessary to perform Fisiopharma’s obligations to manufacture the Bulk Drug Vials for Zavante hereunder, and solely during the Term of this Agreement. Fisiopharma shall acquire no other right, title or interest in the Zavante Intellectual Property as a result of its performance hereunder, and for no other purpose.

 

(b)                                 In the event that Zavante decides to file one or more patent applications (or file any other exclusive rights, or otherwise constitute as exclusive rights) covering, partially or totally, any Product Development, Fisiopharma shall, at Zavante’s request and expense, assist Zavante in the preparation and prosecution of such patent application(s) and shall execute all documents deemed necessary by Zavante for the filing thereof.

 

(c)                                  In no circumstance without the written permission of Zavante shall Fisiopharma be entitled to reverse engineer the API, the API Mixture or the Bulk Drug Vials to circumvent any Zavante Intellectual Property or Confidential Information.

 

9.                                      Representations and Warranties

 

9.1                               Fisiopharma hereby represents, warrants and covenants as follows:

 

9.1.1                     At all times during the term of this Agreement, Fisiopharma’s facilities shall remain in compliance with, and the Bulk Drug Vials shall be manufactured and delivered in compliance with, all Applicable Laws, including but not limited to, the provisions of the Federal Food, Drug and Cosmetic Act, as amended from time to time (the “Act”); cGMP, including the FDA’s Guidance for Industry, Manufacturing, Processing or Holding

 

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Active Pharmaceutical Ingredients, March 1998, and any updates thereto; FDA’s regulations for drug establishment registration; the Specifications; the other rules and regulations promulgated under the Act relating to the manufacture of pharmaceutical products; and equivalent laws, regulations and standards promulgated by Regulatory Agencies in all jurisdictions for which Zavante has given notice to Fisiopharma (collectively, the “Applicable Laws”).

 

9.1.2                     No Bulk Drug Vials constituting or being a part of any shipment to Zavante shall at the time of any such shipment be adulterated within the meaning of the Act, or the rules and regulations promulgated thereunder, as such law, rule or regulation is constituted and in effect at the time of any such shipment.

 

9.1.3                     All Bulk Drug Vials supplied to Zavante hereunder: (a) shall comply with the Specifications; (b) shall have been manufactured, stored and shipped in accordance with the Specifications, applicable approvals from Regulatory Agencies and all Applicable Laws; (c) may be introduced into public commerce consistent with the intended use for Bulk Drug Vials pursuant to Applicable Laws; and (d) will have, at the time of shipment, a remaining shelf life of not less than the then-current, registered shelf life for the Bulk Drug Vials less [**]. As an example, if the registered shelf life is [**], Zavante will only be required to accept product with [**] of remaining shelf life. Exceptions to the shelf life requirements set forth in this Section 9.1.3 will be discussed in a good faith by the Parties.

 

9.1.4                     All necessary licenses, permits or approvals required by Applicable Laws in connection with the manufacture, storage, and shipment of Bulk Drug Vials, including without limitation permits related to manufacturing facilities shall be obtained and maintained.

 

9.1.5                     Fisiopharma will: (a) respond fully and accurately to all inquiries directed to it by the FDA or any other Regulatory Agency that may impact the quality or timely delivery of Bulk Drug Vials and promptly notify Zavante of same; (b) assist Zavante in responding to inquiries directed to Zavante by the FDA or other Regulatory Agencies; and (c) provide the FDA or other Regulatory Agencies with such information and data as is requested by the FDA or other Regulatory Agencies with respect to the manufacture, use, route of synthesis and testing of the Bulk Drug Vials.

 

9.1.6                     The Facility is in full compliance with cGMP.

 

9.1.7                     Fisiopharma has disclosed to Zavante all warning letters or similar notices relating to its manufacturing facilities or import alerts (including FDA Form 483’s), if any, for products manufactured in its facilities issued during the last [**] and Fisiopharma will during the term disclose in timely fashion all such letters, alerts and notices.

 

9.1.8                     Fisiopharma has, and shall maintain, sufficient facilities, personnel and resources to meet its obligations to supply Bulk Drug Vials under this Agreement.

 

9.1.9                     Fisiopharma is not aware of any claim by a third party that Fisiopharma’s process for manufacturing the Bulk Drug Vials supplied hereunder would infringe, misappropriate or violate any patent, trade secret or other intellectual property right of such third party.

 

9.1.10              Fisiopharma does not employ, engage or otherwise use any child or forced labor in any form, and will comply with all Applicable Laws regarding employee compensation, employment rights, health and safety conditions and environmental protection.

 

9.2                               Zavante hereby represents, warrants and covenants that, to Zavante’s knowledge (after reasonable inquiry and investigation), the Bulk Drug Vials will not infringe, misappropriate or violate any third party patent, trade secret or other intellectual property right in effect during the term of this Agreement in the United States or

 

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Canada (provided, that Zavante’s representation does not extend to any infringement, misappropriation or violation that arises out of or relates to Fisiopharma’s process for manufacturing the Bulk Drug Vials).

 

9.3                               Each Party represents and warrants that all corporate action on its part and on the part of each of its officers and directors necessary for the authorization, execution and delivery of this Agreement has been taken, it has the full right and authority to enter into this Agreement and perform its obligations hereunder and that it is not aware of any obligations owed to third parties that would conflict with its ability to perform its obligations hereunder.

 

9.4                               If requested in writing by Zavante, Fisiopharma shall permit Zavante or its authorized representatives to inspect Fisiopharma’s facilities and records and be given access to Fisiopharma’s personnel (at reasonable times, upon reasonable advance notice and in the company of an Fisiopharma representative, as the case may be, during normal business hours), to the extent Zavante deems reasonably necessary to enable Zavante to verify compliance by Fisiopharma with its obligations under this Agreement and to verify compliance with any Applicable Laws.

 

9.5                               Zavante shall provide Fisiopharma copies of product complaints, or notices or inquiries from the FDA or other Regulatory Agencies, which raise issues with respect to the manufacture or product quality of the Bulk Drug Vials provided by Fisiopharma to Zavante.  Fisiopharma shall fully and appropriately investigate such matters and provide Zavante with a report of its investigation.  In the event that Fisiopharma receives any complaint, claims or adverse reaction reports regarding Finished Drug Product or Bulk Drug Vials, including notices from the FDA regarding any alleged regulatory non-compliance of Finished Drug Product, Fisiopharma shall promptly and not more than [**] after receipt, provide to Zavante all information contained in the complaint, report or notice and such additional information regarding Finished Drug Product as Zavante may reasonably request.  Fisiopharma shall comply, at a minimum, with FDA requirements for complaint handling with respect to such complaints, claims or adverse reaction reports.

 

9.6                               Zavante and Fisiopharma each further represents and warrants that it shall comply with all Applicable Laws in the performance of its obligations hereunder.

 

9.9                               Fisiopharma shall promptly notify Zavante of any problems or unusual production situations that have, or are reasonably likely to have, an adverse effect on Fisiopharma’s ability to perform its obligations hereunder or to deliver the Bulk Drug Vials to Zavante in a timely manner.  In addition, Fisiopharma shall notify and, if applicable, provide copies of any notices or communications to, Zavante of any FDA or other governmental agency inspection, investigation or other inquiry or communication relating to the manufacture of the Bulk Drug Vials or to any facility at which the Bulk Drug Vials is manufactured, including, but not limited to, any FDA FORM 483 or warning letter, promptly and not more than [**] after Fisiopharma becomes aware of such inspection, investigation or other inquiry or communication and shall promptly thereafter provide to Zavante a written summary of all findings and corrective actions taken or planned by Fisiopharma, including any written responses from Fisiopharma to the FDA or other governmental agency.  Such notices shall not operate to relieve Fisiopharma of their obligations to deliver the ordered amounts of Bulk Drug Vials or affect Zavante’s right to pursue any remedies that might be available to it.

 

9.10                        Fisiopharma each covenants that it will not in the performance of its obligations under this Agreement use the services of any person debarred or suspended under 21 U.S.C. § 335(a) or (b).  Fisiopharma each represents that it does not currently have, and covenants that it will not hire, as an officer or an employee, any person who has been convicted of a felony under the laws of the United States for conduct relating to the regulation of any drug product under the Act.

 

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9.11                        Each Party shall maintain insurance as follows:

 

9.11.1              Fisiopharma shall maintain commercial general liability insurance and product liability insurance with a minimum limit per occurrence or accident of €[**] and an annual aggregate limit of €[**] for the term of this Agreement and for [**] thereafter.  Upon request, Fisiopharma shall € provide Zavante with copies of insurance certificates reflecting the above.

 

9.11.2              Zavante shall maintain commercial general liability insurance with a minimum limit per occurrence or accident of $[**] and an annual aggregate limit of $[**] and product liability insurance with a minimum limit per occurrence or accident of $[**] and an annual aggregate limit of $[**] for the term of this Agreement and for [**] thereafter.  Notwithstanding the foregoing, Zavante shall increase its insurance coverage as reasonably prudent in connection with the Commercial Launch.  Upon request, Zavante will provide to Fisiopharma copies of insurance certificates reflecting the above.

 

9.1                               Fisiopharma shall immediately notify Zavante of any information of the following kind about Bulk Drug Vials provided to Zavante:

 

9.12.1              information indicating that shipped product has not been manufactured or supplied in accordance with the Specifications, cGMP, this Agreement or in compliance with Applicable Laws; and

 

9.12.2              information concerning any bacteriological contamination, or any significant chemical, physical or other changes or deterioration in the API Mixture, the shipped Bulk Drug Vials, or the failure of one or more shipped lots of Bulk Drug Vials to meet Specifications, including stability parameters.

 

10.                               Quality and Regulatory Matters.

 

10.1                        Quality Agreement. Within [**] following the execution of this Agreement, but before production of Registration Lots (as such term is defined in Schedule A) the Parties shall in good faith negotiate and execute a Quality Agreement concerning the Bulk Drug Vials (the “Quality Agreement”). Upon execution and delivery of the Quality Agreement by both Zavante and Fisiopharma, the Quality Agreement shall automatically become part of this Agreement, and any breach of the Quality Agreement shall be deemed a breach of this Agreement.

 

10.1.1              The terms contained in the Quality Agreement are intended to complement the terms of this Agreement, and they shall be interpreted as complementary to the extent possible. In the event of a conflict between the terms of the Quality Agreement and the terms of this Agreement, the terms of the Quality Agreement shall control with respect to quality control and quality assurance matters related to the Bulk Drug Vials (including, without limitation, manufacturing, testing, storage, release, change management and validation activities), and this Agreement shall control with respect to all other matters. The inclusion of a particular term or level of detail in the Quality Agreement where such term or level of detail is absent from this Agreement shall not be deemed to constitute a conflict between the two agreements.  Only where competing terms in the two agreements conflict in terms of the principal focus of an express prescription or prohibition in the agreements shall a conflict between the two agreements be deemed to exist.

 

10.2                        Recalls. Fisiopharma and Zavante will each maintain records necessary to permit voluntary and involuntary recalls or other related actions of Finished Drug Product delivered by Zavante to its customers (collectively, “Recalls”). Each Party will promptly notify the other by telephone (to be confirmed in writing) of any information which might affect the marketability, safety or effectiveness of the Finished Drug Product or which might result in the Recall or seizure of the Finished Drug Product. Upon receiving this notice or upon this discovery, Fisiopharma will stop making any further shipments of any Bulk Drug Vials in its possession or control until a decision has been made whether a Recall or some other corrective action is necessary. Zavante will have the

 

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responsibility for handling customer returns of the Finished Drug Product, and Fisiopharma will give Zavante any assistance that Zavante may reasonably require to handle any such returns.

 

10.2.1              The decision to initiate a Recall or to take some other corrective action, if any, will be made and implemented by Zavante.  As used herein, the term, “Recall” will include any action (i) by Zavante to recover title to or possession of quantities of the Finished Drug Product sold or shipped to third parties (including, without limitation, the voluntary withdrawal of Finished Drug Product from the market); or (ii) by any regulatory authorities to detain or destroy any of the Finished Drug Product. Recall will also include any action by either Party to refrain from selling or shipping quantities of the Finished Drug Product to third parties which would have been subject to a Recall if sold or shipped.

 

10.2.2              lf (i) any Regulatory Agency issues a directive, order or, following the issuance of a safety warning or alert about the Finished Drug Product, a written request that any Finished Drug Product should be Recalled, (ii) a court of competent jurisdiction orders a Recall, or (iii) Zavante determines that any Finished Drug Product should be Recalled or that a “Dear Doctor” letter is required relating the restrictions on the use of any Finished Drug Product, Fisiopharma will co-operate as reasonably required by Zavante, having regard to all Applicable Laws.

 

10.3                        Fisiopharma will permit Zavante or its representative to monitor and inspect, as reasonably needed, that portion of the Facility where the Bulk Drug Vials is manufactured, packaged or stored and review such related documents as is reasonably necessary for the purpose of assessing Fisiopharma’s compliance with the cGMP, the Specifications, applicable manufacturing procedures, Applicable Laws and this Agreement.  Zavante will have the right to have an employee or representative present at the Facility during the preparation for the manufacture of the Bulk Drug Vials, and such employee or representative will be free to examine all aspects of such manufacturing operations and comment thereon to Fisiopharma.  Any Zavante employee or representative present at the Fisiopharma Facility will adhere to all applicable Fisiopharma policies, safety and security procedures.

 

10.4                        Healthcare Provider or Patient Inquiries. Zavante will have the sole responsibility for responding to questions and complaints from its customers. Questions or complaints received by Fisiopharma from Zavante’s customers, healthcare providers or patients will be promptly referred to Zavante. Fisiopharma will co-operate as reasonably required to allow Zavante to determine the cause of and resolve any questions and complaints. This assistance will include follow-up investigations, including testing. In addition, Fisiopharma will give Zavante all mutually agreed upon information that will enable Zavante to respond properly to questions or complaints about the Finished Drug Product and Bulk Drug Vials as set forth in the Quality Agreement.

 

10.5                        Reports.  Fisiopharma will supply on an annual basis all data regarding the Bulk Drug Vials in its control, including release test results, complaint lest results, and all investigations (in manufacturing, testing, and storage), that Zavante  reasonably  requires  in order to  complete  any  filing  under  any  applicable  regulatory  regime, including any Annual Report that Zavante is required to file with the FDA.  At the Fisiopharma’s request, Zavante will provide a copy of the Annual Product Review Report to Fisiopharma.

 

10.6                        Regulatory Filings.

 

10.6.1              Zavante will have the sole responsibility for filing and compiling all documents with all Regulatory Authorities and taking any other actions that may be required for the receipt and/or maintenance of Regulatory Authority approval for the commercial manufacture of the Finished Drug Product. Fisiopharma will assist Zavante, to the extent consistent with Fisiopharma’s obligations under this Agreement, to obtain Regulatory Authority approval for the commercial manufacture of all Bulk Drug Vials as quickly as reasonably possible. At least [**] prior to filing any documents with any Regulatory Authority that incorporate data generated by Fisiopharma, Zavante will give Fisiopharma a copy of the documents incorporating this data to give Fisiopharma

 

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the opportunity to verify the accuracy and regulatory validity of those documents as they relate to Fisiopharma generated data. At least [**] prior to filing with any Regulatory Authority any documentation which is or is equivalent to the FDA’s Chemistry and Manufacturing Controls (all such documentation herein referred to as “CMC”) related to any Marketing Authorization, such as an NDA, Zavante will give Fisiopharma a copy of the CMC as well as all supporting documents which have been relied upon to prepare the CMC. This disclosure will permit Fisiopharma to verify that the CMC accurately describes the work that Fisiopharma has performed and the manufacturing processes that Fisiopharma will perform under this Agreement. Zavante will give Fisiopharma copies of all FDA filings at the time of submission which contain CMC information regarding the Product.

 

11.                               Indemnification

 

11.1                        Zavante hereby agrees to and shall defend, indemnify, and hold harmless Fisiopharma, their affiliates and each of their respective employees, officers, directors and agents (the “Supplier Indemnitees”), from, against, and in respect of, any and all losses, judgments, damages, liabilities, suits, actions, expenses (including reasonable attorney’s fees), and proceedings arising from any claims of any third party to the extent resulting from:

 

11.1.1              any misrepresentation, breach of warranty, or the non-fulfillment of any obligation, covenant, or duty on the part of Zavante under this Agreement;

 

11.1.2              any claim, complaint, suit, proceeding or cause of action against any of the Supplier Indemnitees alleging physical injury or death, brought by or on behalf of an injured party, or loss of service or consortium or a similar such claim, complaint, suit, proceeding or cause of action brought by a spouse, relative or companion of an injured party due to such physical injury or death, and in each case arising out of the Finished Drug Product manufactured from the Bulk Drug Vials, except to the extent resulting from (i) any misrepresentation, breach of warranty, or the non-fulfillment of any obligation, covenant, or duty on the part of Fisiopharma under this Agreement, (ii) any negligence or willful misconduct of the Supplier Indemnitees in performing this Agreement, or (iii) any claim subject to Fisiopharma’s indemnification obligations under Section 11.2;

 

11.1.3              any negligence or willful misconduct of Zavante, its employees, officers and directors in performing this Agreement; and

 

11.1.4  any claim of patent infringement relating to the Bulk Drug Vials or the process for manufacturing Bulk Drug Vials (excluding any claim of patent infringement arising out of or relating to the Bulk Drug Vials or the process for manufacturing the Bulk Drug Vials), which claim, if true, would be in contravention of the representations, warranties and covenants of Zavante hereunder.

 

11.2                        Fisiopharma hereby agrees to and shall defend, indemnify, and hold harmless Zavante, its affiliates and each of their respective employees, officers, directors and agents (the “Zavante Indemnitees”), from, against, and in respect of, any and all losses, judgments, damages, liabilities, suits, actions, expenses (including reasonable attorney’s fees), and proceedings arising from any claims of any third party to the extent resulting from:

 

11.2.1              any misrepresentation, breach of warranty, or the nonfulfillment of any obligation, covenant, or duty on the part of Fisiopharma under this Agreement;

 

11.2.2              any claim, complaint, suit proceeding or cause of action against any of the Zavante Indemnitees alleging physical injury or death, brought by or on behalf of an injured party, or loss of service or consortium or a similar such claim, complaint, suit, proceeding or cause of action brought by a spouse, relative or companion of an injured party due to such physical injury or death, and in each case arising out of the Bulk Drug Vials supplied by Fisiopharma to Zavante, except to the extent resulting from (i) any misrepresentation, breach of warranty, or the non-fulfillment of any obligation, covenant, or duty on the part of Zavante under this Agreement,

 

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(ii) any negligence or willful misconduct of the Zavante Indemnitees in performing this Agreement, or (iii) any claim subject to Zavante’s indemnification obligations under Section 11.1;

 

11.2.3              any negligence or willful misconduct of Fisiopharma or their respective employees, officers or directors in manufacturing the Bulk Drug Vials or performing any other obligations under this Agreement; and

 

11.2.4              any claim of patent infringement relating to the Bulk Drug Vials supplied to Zavante or the process for manufacturing the Bulk Drug Vials supplied to Zavante which claim, if true, would be in contravention of the representations, warranties and covenants of Fisiopharma hereunder.

 

11.3                        The indemnification obligations set forth in Sections 11.1 and 11.2 are subject to the following:  (a) the indemnifying Party must be notified by or on behalf of the indemnified Party in writing promptly after a claim is made, a suit is filed, or an action or investigation is initiated (each, a “Proceeding”) against the indemnified Party, unless such delay does not materially prejudice the indemnifying Party; (b) subject to the provisions set forth in this Section 11.3, the indemnifying Party shall be permitted to defend, control, conduct and prosecute, in the indemnifying Party’s sole discretion and by counsel of the indemnifying Party’s choosing, the defense of such Proceeding brought against the indemnified Party; (c) the indemnifying Party shall have the right in its sole discretion to settle, compromise or otherwise terminate the Proceeding solely upon the payment of money; provided, that, there is no finding or admission of any violation by any indemnified Party of (i) any law, rule or regulation, or (ii) the rights of any person; and provided, further, that, no such settlement shall prohibit any indemnified Party from importing the Bulk Drug Vials into the United States and Canada or making, using or selling products in the United States and Canada made from such Bulk Drug Vials; (d) the indemnified Party shall refrain from settling (or endeavoring to settle, or entering into settlement negotiations with respect to) any such Proceeding without the indemnifying Party’s prior written consent; (e) except as may otherwise be required by law, the indemnified Party shall not compromise the position of the indemnifying Party by admission, statements, disclosure or conduct (collectively, “Disclosure”) in a way that could prejudice the defense, control, conduct or prosecution of said cause of action (it being understood that no indemnified Party shall be deemed to have violated this provision so long as such Party has acted in good faith to fulfill its obligations under this provision); and (f) the indemnified Party shall cooperate with the indemnifying Party in the defense, conduct, prosecution or termination of the Proceeding, including the furnishing of information and the assistance from employees of the indemnified Party at the indemnifying Party’s reasonable request and expense.  With respect to clause (e) above, the indemnified Party will provide the indemnifying Party with prompt written notice in advance of any such Disclosure being made to permit the indemnifying Party to seek an appropriate protective order, restriction on response or withdrawal of the request for Disclosure.  If, however, any such request for relief by the indemnifying Party is denied or is otherwise unavailable, the relevant indemnified Party may make the Disclosure without any liability to the indemnifying Party.  The indemnified Party may, at its option and expense, participate in the indemnifying Party’s defense with counsel of its own choosing, and if the indemnified Party so participates, the Parties shall cooperate with one another in such defense in a commercially reasonable fashion.

 

Notwithstanding any provision in this Agreement to the contrary, Zavante shall at all times have the right to assume direction and control of the defense of any claim alleging infringement, misappropriation or violation of any patent, trade secret or other intellectual property right of any third party; provided, that Zavante will provide Fisiopharma with a reasonable opportunity to review and consult from time to time concerning the strategy and action plan (including possibly pursuing one or more licenses as appropriate), and in such event Fisiopharma shall cooperate and assist as requested in the defense of such claim and if Zavante finds it necessary or desirable to join Fisiopharma or ACS, or both, as parties, Fisiopharma shall execute all papers or perform such other acts as may reasonably be required by Zavante.  Further, Fisiopharma shall settle not consent to the entry of any judgment with respect to any such claim, without Zavante’s prior written consent.

 

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11.4                        The indemnification rights provided for herein are in addition to, and not in substitution for, any and all remedies available to a Party under this Agreement or otherwise at law or in equity.  Notwithstanding anything to the contrary in this Section 11, each Party may, and expressly reserves the right to, seek judicial relief from any court of competent jurisdiction in order to obtain an injunction or other equitable relief.

 

11.5                        IN NO EVENT SHALL ANY OF THE PARTIES HERETO BE RESPONSIBLE OR LIABLE TO THE OTHER UNDER ANY PROVISION OF THIS AGREEMENT OR UNDER ANY THEORY OF NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY, FOR ANY CONSEQUENTIAL, INDIRECT, SPECIAL, OR EXEMPLARY DAMAGES OR LOST PROFITS.  FOR THE PURPOSE OF CLARITY, NOTHING IN THIS SECTION IS INTENDED TO LIMIT THE INDEMNIFICATION OBLIGATIONS OF ANY PARTY WITH RESPECT TO THE CHARACTERIZATION OF ANY CLAIM BY A THIRD PARTY AS CONSEQUENTIAL, INDIRECT, SPECIAL, OR EXEMPLARY DAMAGES OR LOST PROFITS.

 

12.                               Costs and Expenses of Recall

 

12.1                        Zavante shall have sole control and responsibility for conducting all Recalls of units of any Finished Drug Product and Bulk Drug Vials; provided, however, that Fisiopharma agrees to reimburse Zavante for all of its reasonable costs and expenses incurred with respect to any Recalls arising out of any of the causes set forth in Sections 11.2.1 through 11.2.4.  This Section 12 is intended to augment and not limit the indemnification provisions of Section 11 herein. The Quality Agreement shall include additional procedures, including specific responsibilities of both Parties, regarding Recalls of the Finished Drug Product and Bulk Drug Vials.

 

13.                               Term and Termination.

 

13.1                        This Agreement shall be effective for a period of ten (10) calendar years from the Effective Date hereof (the “Initial Term”) and shall be automatically renewed for additional one (1) calendar year terms unless written notice of intent to terminate is provided by Zavante at least six (6) months prior to the expiration of the Initial Term or any extension term.

 

13.2                        This Agreement may be terminated by (i) Zavante upon [**] written notice to Fisiopharma, as the case may be, of a failure by Fisiopharma to perform or observe any material covenant, condition or agreement to be performed or observed by it under this Agreement, unless such breach has been cured within the [**] notice period and (ii) Fisiopharma upon [**] written notice to Zavante of a failure by Zavante to perform or observe any material covenant, condition or agreement to be performed or observed by it under this Agreement, unless such breach has been cured within the [**] notice period; provided, however, that with respect to a failure to timely supply ordered quantities of Bulk Drug Vials under this Agreement, Fisiopharma combined shall have the right to cure such breach no more than once during the term of this Agreement unless otherwise agreed by Zavante in writing.

 

13.3                        Zavante may terminate this Agreement effective immediately upon written notice to Fisiopharma in the event that (a) Fisiopharma dissolves, is declared insolvent or bankrupt by a court of competent jurisdiction; (b) a voluntary or involuntary petition of bankruptcy is filed in any court of competent jurisdiction by Fisiopharma; or (c) this Agreement is assigned by Fisiopharma for the benefit of creditors.  Fisiopharma may terminate this Agreement effective immediately upon written notice to Zavante in the event that (x) Zavante dissolves, is declared insolvent or bankrupt by a court of competent jurisdiction; (y) a voluntary or involuntary petition of bankruptcy is filed in any court of competent jurisdiction by Zavante; or (z) this Agreement is assigned by Zavante for the benefit of creditors.

 

13.4                        Zavante may terminate this Agreement upon thirty (30) days’ prior written notice to Fisiopharma (or a shorter period required by the agency with jurisdiction) in the event that any governmental agency takes any action, or raises any objection, that prevents Zavante from importing, exporting, purchasing or selling either the Bulk

 

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Drug Vials or the Bulk Drug Vials for a period reasonably anticipated to endure for more than one hundred twenty (120) days.

 

13.5                        In the event of termination of this Agreement by Zavante due to an uncured breach of this Agreement by Fisiopharma’s dissolution, insolvency or bankruptcy pursuant to Section 13.3, Fisiopharma will supply Bulk Drug Vials directly to Zavante, at Zavante’s election, under terms of an agreement no less favorable to Zavante than the terms herein.

 

13.6                        Zavante may terminate this Agreement effective immediately upon written notice to Fisiopharma should any legal proceeding be instituted against Fisiopharma, which is reasonably likely to materially adversely impact Fisiopharma’s ability to properly perform under this Agreement or subject Zavante to any material risk of liability or loss.

 

13.7                        In the event of termination of this Agreement by Zavante pursuant to Section 13.4, Zavante agrees to pay an amount equal to the Price for up to [**] of safety stock then actually held by Fisiopharma pursuant to Section 4.5 hereof (provided that Fisiopharma shall use best efforts to mitigate the cost to Zavante of such safety stock by utilizing such safety stock for other customers to the extent possible).

 

13.8                        The provisions of this Section 13 as to termination shall not limit or restrict the rights of any Party to seek remedies or take measures that may be otherwise available to it at law or equity in connection with the enforcement and performance of obligations under this Agreement.

 

14.                               Notices

 

Any and all notices required to be given under this Agreement will be in writing and effective upon receipt, sent by facsimile transmission, mailed postage prepaid by first-class certified or registered mail, or sent by express courier service, at the respective addresses, as follows:

 

	
If to Zavante,   to:
    	
Zavante   Therapeutics, Inc.
    
	
 
    	
11750 Sorrento Valley   Road, Suite 250
    
	
 
    	
San Diego California   92121
    
	
 
    	
USA
    
	
 
    	
Attention: Chief   Operating Officer
    
	
 
    	
Facsimile Number: +1   858-299-4940
    
	
 
    	
 
    
	
If to   Fisiopharma, to:
    	
Fisiopharma, S.r.l.
    
	
 
    	
Nucleo Industriale
    
	
 
    	
84020 Palomonte (SA)
    
	
 
    	
Italy
    
	
 
    	
Attention: General   Manager
    
	
 
    	
Facsimile Number: [**]
    
	
 
    	
Electronic Address:   [**]
    

 

15.                               Miscellaneous

 

15.1                        Force Majeure.  In the event that any Party hereto is prevented from complying, either in whole or in part, with any of the terms or provisions of this Agreement by reason of fire, flood, storm, strike or lockout, riot, war, rebellion, lack or failure of transportation facilities, court order, accident, or Acts of God, and to the extent that the foregoing are beyond a Party’s reasonable control, then, unless conclusive evidence to the contrary is provided, upon written notice by the Party whose performance is so affected to the other, the requirements of this Agreement

 

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so affected (to the extent affected) shall be suspended during the period of, and only to the extent of, such disability.  Said Party shall be excused by reason of said force majeure only so long as it is exercising its best efforts to overcome said reason.

 

15.2                        Assurances.  Each Party to this Agreement shall execute, acknowledge and deliver such further instruments and documents, and do all such other acts and things as may be required by law or as may be necessary or advisable to carry out the intents and purposes of this Agreement.  The Parties will cooperate with each other and offer reasonable assistance in carrying out their respective responsibilities under this Agreement.

 

15.3                        Compliance with Laws.  Each Party will comply with all Applicable Laws in the conduct of its responsibilities and activities under this Agreement. In addition, each Party shall comply with all anti-corruption and anti-bribery laws and regulations, including but not limited to, the U.S. Foreign Corrupt Practices Act (FCPA).  Each Party, and its respective officers, directors, employees, agents and representatives, represents that it has not and will not pay, offer or promise to pay, or authorize the payment of, any money, or give or promise to give, or authorize the giving of, any services or anything else of value, either directly or through a third party, to any official or employee of any governmental authority, or of a public international organization, or of any agency or subdivision thereof, or to any political party or official thereof or to any candidate for political office for the purpose of (a) influencing any act or decision of that person in his official capacity, including a decision to fail to perform his official functions with such governmental agency or such public international organization or such political party; (b) inducing such person to use his influence with such governmental agency or such public international organization or such political party to affect or influence any act or decision thereof; or (c) securing any improper advantage.

 

15.4                        Governing Law.  This Agreement shall be construed in accordance with the internal laws of England and Wales, without reference to the conflict of laws provisions thereof.  Each of the Parties hereto consents and agrees to the exclusive jurisdiction and venue of the state and federal courts sitting within London, England, in connection with any legal proceedings brought by any other part relating to the subject matter of this Agreement and further agrees and consents that any resulting judgment rendered by any such court against a Party shall be valid and binding on such Party and may be entered in any jurisdiction in which such Party is located.

 

15.5                        Severability.  If any provision of this Agreement shall be held to be invalid, illegal, or unenforceable, the validity, legality, or enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby unless the purposes of the Agreement cannot be achieved.  In the event any provision shall be held invalid, illegal, or unenforceable the Parties shall use best efforts to substitute a valid, legal, and enforceable provision which insofar as practical implements the purposes hereof.

 

15.6                        No Assignment.  No Party shall assign its rights and/or obligations under this Agreement without the prior written consent of the other Parties hereto, except that (a) Zavante may assign this Agreement in connection with the transfer or sale of all or substantially all of its assets or business to which the subject matter of this Agreement relates or in connection with any merger, consolidation or reorganization, without Fisiopharma’s prior written consent; and (b) Fisiopharma may assign this Agreement in connection with the transfer or sale of all or substantially all of its assets or business to which the subject matter of this Agreement relates or in connection with any merger, consolidation or reorganization with Zavante’s prior written consent, which consent may not be unreasonably withheld.

 

15.7                        Waiver.  No delay, waiver, omission or forbearance on the part of any Party to exercise any right, option, duty or power arising out of any breach or default by any other Party of any of the terms, provisions or covenants hereof, will constitute a waiver by such Party of its rights to enforce any such right, option, duties or power as against the other Party hereto, or its rights as to any subsequent breach or default by the other Party.

 

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15.8                        Survival.  Upon termination or expiration of this Agreement, the obligations of the Parties which by their nature should survive and the obligations under Sections 7-15 of this Agreement and under any existing confidentiality agreements between the Parties shall survive.

 

15.9                        Entire Agreement.  This Agreement and the Schedules attached hereto and the confidentiality agreements referenced in Section 15.8 constitute the full understanding and entire agreement between the Parties and supersede any and all prior oral or written understandings and agreements with respect to the subject matter hereof.  No terms, conditions, understandings, or agreements purporting to modify, amend, waive or terminate this Agreement, or any provision hereof, shall be binding except by the execution of a writing specified to be an explicit amendment to this Agreement duly executed by the authorized signatories of the Parties hereto.  No modification, waiver, termination, rescission, discharge or cancellation of any right or claim under this Agreement shall affect the right of any Party to enforce any other claim or right hereunder.

 

15.10                 Binding Agreement.  Subject to Section 15.6, this Agreement shall be binding upon the Parties and their respective successors and permitted assigns and shall insure to the benefit of the Parties and their respective successors and permitted assigns.

 

15.11                 Headings.  The headings used in this Agreement are for convenience of reference only and are not a part of the text hereof.

 

15.12                 Counterparts.  This Agreement may be executed in counterparts, each of which shall constitute an original and all of which shall together constitute a single agreement.

 

[Remainder of This Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the Parties hereby agree to the terms and conditions of this Agreement.

 

	
Zavante Therapeutics, Inc.
    	
Fisiopharma, S.r.l.
    
	
 
    	
 
    
	
By:
    	
/s/ Theodore R. Schroeder
    	
 
    	
By:
    	
/s/ Nicola Cadei
    
	
Name: Theodore R.   Schroeder
    	
Name: Nicola Cadei
    
	
Title:   President & CEO
    	
Title: General Manager
    
	
Date: April 25,   2017
    	
Date: 20   April 2017
    
	
 
    	
By:
    	
/s/ Marek Dziki
    
	
 
    	
Name: Marek Dziki
    
	
 
    	
Title: Board Member
    
	
 
    	
Date: 20   April 2017
    
					

 

[SIGNATURE PAGE TO MANUFACTURING AND SUPPLY AGREEMENT]

 

19

 

SCHEDULE A

TECHNOLOGY TRANSFER ACTIVITIES, TIMING AND COSTS 

 

	
 
    	
 
    	
 
    	
 
    	
Responsibility
    	
 
    	
Estimated
    	
 
    	
Estimated Cost to be
    	
 
    
	
 
    	
 
    	
Technology Transfer Deliverables
    	
 
    	
Zavante
    	
 
    	
Fisiopharma
    	
 
    	
Shared
    	
 
    	
Completion Date
    	
 
    	
paid by Zavante*
    	
 
    
	
1
    	
 
    	
[**]
    	
 
    	
X
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
2
    	
 
    	
[**]
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    	
 
    	
[**]
    	
 
    	
[**]
    	
 
    
	
3
    	
 
    	
[**]
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    	
 
    	
[**]
    	
 
    	
[**]
    	
 
    
	
4
    	
 
    	
[**]
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    	
 
    	
[**]
    	
 
    	
[**]
    	
 
    
	
5
    	
 
    	
[**]
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    	
 
    	
[**]
    	
 
    	
[**]
    	
 
    
	
6
    	
 
    	
[**]
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    	
 
    	
[**]
    	
 
    	
[**]
    	
 
    
	
7
    	
 
    	
[**]
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    	
 
    	
[**]
    	
 
    	
[**]
    	
 
    
	
8
    	
 
    	
[**]
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    	
 
    	
[**]
    	
 
    	
[**]
    	
 
    
	
9
    	
 
    	
[**]
    	
 
    	
X
    	
 
    	
 
    	
 
    	
 
    	
 
    	
[**]
    	
 
    	
[**]
    	
 
    
	
10
    	
 
    	
[**]
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    	
 
    	
[**]
    	
 
    	
 
    	
 
    
	
11
    	
 
    	
[**][**]
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    	
 
    	
[**]
    	
 
    	
[**]
    	
 
    
	
 
    	
 
    	
TOTAL COSTS
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
[**]

 
    	
 
    

 

* Zavante shall not be responsible for any amounts in excess of the estimates shown in this table unless agreed to in advance in writing by Zavante.

 

Payment: [**]% of these costs will be paid within [**] of signing this Agreement and the remainder will be paid upon successful completion of the last of the [**] Registration Lots.

 

 

SCHEDULE B

BULK DRUG VIAL SPECIFICATIONS

 

The Bulk Drug Vials (fosfomycin sodium, injection for intravenous use) Specification is provided below.  Note that impurity acceptance criteria (along with in-house release criteria) are DRAFT.

 

	
Parameter
    	
 
    	
Acceptance Criteria
    	
 
    	
Analytical Method
    
	
Appearance
    	
 
    	
[**]
    	
 
    	
[**]
    
	
Identification IR
    	
 
    	
[**]
    	
 
    	
[**]
    
	
Identification HPLC
    	
 
    	
[**]
    	
 
    	
[**]
    
	
Assay (fosfomycin disodium)(1)
    	
 
    	
[**]
    	
 
    	
[**]
    
	
Degradation Products (1) 
    	
 
    	
 
    	
 
    	
 
    
	
Impurity A(2)
    	
 
    	
[**]
    	
 
    	
[**]
    
	
Impurity B
    	
 
    	
[**]
    	
 
    	
 
    
	
Impurity C
    	
 
    	
[**]
    	
 
    	
 
    
	
[**]
    	
 
    	
[**]
    	
 
    	
[**]
    
	
[**]
    	
 
    	
[**]
    	
 
    	
 
    
	
[**]
    	
 
    	
[**]
    	
 
    	
 
    
	
Any single   unspecified degradant
    	
 
    	
[**]
    	
 
    	
 
    
	
Total degradants
    	
 
    	
[**]
    	
 
    	
[**]
    
	
Average weight
    	
 
    	
[**]
    	
 
    	
[**]
    
	
Content uniformity
    	
 
    	
[**]
    	
 
    	
[**]
    
	
Water content
    	
 
    	
[**]
    	
 
    	
[**]
    
	
Dissolution time
    	
 
    	
[**]
    	
 
    	
[**]
    
	
Appearance of solution
    	
 
    	
[**]
    	
 
    	
[**]
    
	
pH
    	
 
    	
[**]
    	
 
    	
[**]
    
	
Particulate matter
    	
 
    	
[**]
    	
 
    	
[**]
    
	
Sterility
    	
 
    	
[**]
    	
 
    	
[**]
    
	
Bacterial endotoxins
    	
 
    	
[**]
    	
 
    	
[**]
    

 

(1)             Test performed by an external laboratory under contract.

(2)             Also referred to as “glycol”: Disodium (1,2-dihydroxipropyl) phosphonate

NOTE: In-house release specifications for impurities will be set lower than the regulatory specification as shown below:

 

	
Degradation Products
    	
 
    	
In-House Acceptance Criteria
   (for drug product Release)
    
	
Impurity A
    	
 
    	
[**]
    
	
Impurity B
    	
 
    	
[**]
    
	
Impurity C
    	
 
    	
[**]
    
	
[**]
    	
 
    	
[**]
    
	
[**]
    	
 
    	
[**]
    
	
[**]
    	
 
    	
[**]
    
	
Any single   unspecified degradant
    	
 
    	
[**]
    
	
Total degradants
    	
 
    	
[**]
    

 

21

 

Primary Container Closure System

 

	
Component
    	
 
    	
Material
    	
 
    	
Supplier
    
	
Container: 50mL vial
    	
 
    	
Type I clear glass, USP
    	
 
    	
[**]
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Closure: Stopper
    	
 
    	
dark grey butyl rubber
    	
 
    	
[**]
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Overseal: Crimp with flip-off cap
    	
 
    	
Crimp: aluminum,
   Flip-off cap: blue plastic
    	
 
    	
To be selected
    

 

Secondary Packaging

 

Bulk Drug Vials shall be filled, stoppered, capped and coded.

 

Bulk Drug Vials will be placed in trays (similar to those used by vial manufacturers) and the trays will be placed into a shipper carton. The trays and carton will also provide physical protection to the individual vials during transportation to Zavante’s USA-based packaging contractor. The number of Bulk Drug Vials per tray and carton will be agreed between the Parties prior to production of Registration Lots.

 

Each shipper carton will include a shipper label that will be placed on the sealed carton.

 

Sealed cartons will then be placed onto a USA standard, heat-treated wooden pallet and shrink-wrapped to the pallet. The number of cartons and the configuration on each pallet will be agreed between the Parties prior to production of Registration Lots.

 

Drug Product Batch size

 

The batch size of the Bulk Drug Vials will be based on one full API Mixture batch of approximately [**].

 

22

 

SCHEDULE C

PRICE

 

A.            The Parties agree that the Price for Bulk Drug Vials shall be €[**] per vial for annual volumes up to [**] vials.

 

B.            The Parties agree to establish a Price discount schedule once annual volumes forecasted by Zavante exceed [**] vials in any [**] period. The Price discount schedule will be the subject of an amendment to this Agreement.

 

23

 

Amendment to

AMENDED AND RESTATED

PHARMACEUTICAL MANUFACTURING

AND EXCLUSIVE SUPPLY AGREEMENT

 

This Amendment (this “Amendment”) to the Amended and Restated Pharmaceutical Manufacturing and Exclusive Supply Agreement, dated as of the 25th day of April, 2017 (the “Agreement”), by and between Zavante Therapeutics, Inc., a Delaware corporation with a principal place of business at 11750 Sorrento Valley Road, Suite 250, San Diego, CA 92121 (“Zavante”) and Fisiopharma, S.r.l., a corporation organized under the laws of Italy, with a place of business located at Via Andrea Appiani, 22, Milano, Italy, will be effective as of the [  ] day of May, 2017 (the “Amendment Effective Date”).

 

WHEREAS, the Parties have entered into and now desire to amend the Agreement to revise Schedule A to the Agreement;

 

NOW THEREFORE, in consideration of the mutual covenants and promises set forth herein, the Parties agree as follows:

 

1.              Definitions. Capitalized terms used and not defined in this Amendment have the respective meanings assigned to them in the Agreement.

 

2.              Amendment to the Agreement. As of the Amendment Effective Date (defined above), the Agreement is hereby amended or modified as follows:

 

(a)                                 The attached copy of Schedule A, “Technology Transfer Activities, Timing and Costs” shall replace, in its entirety, the copy of Schedule A included in the Agreement.

 

3.              Date of Effectiveness; Limited Effect. Except as expressly provided in this Amendment, all of the terms and provisions of the Agreement are and will remain in full force and effect.

 

IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed by their respective duly authorized representatives as of the Amendment Effective Date.

 

	
Fisiopharma, S.r.l.
    	
 
    	
Zavante Therapeutics, Inc.
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Nicola Cadei
    	
 
    	
By:
    	
/s/ Robert DiVasto
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Nicola Cadei
    	
 
    	
Name:
    	
Robert DiVasto
    
	
Title: 
    	
General Manager
    	
 
    	
Title:
    	
SVP, Manufacturing
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 By:
    	
/s/ Marek Dziki
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Marek Dziki
    	
 
    	
 
    	
 
    
	
Title:
    	
Board Member
    	
 
    	
 
    	
 
    

 

24

 

SCHEDULE A

TECHNOLOGY TRANSFER ACTIVITIES, TIMING AND COSTS

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Estimated
    	
 
    	
Estimated Cost to
    
	
 
    	
 
    	
 
    	
 
    	
Responsibility
    	
 
    	
Completion
    	
 
    	
be paid by
    
	
 
    	
 
    	
Technology Transfer Deliverables
    	
 
    	
Zavante
    	
 
    	
Fisiopharma
    	
 
    	
Shared
    	
 
    	
Date*
    	
 
    	
Zavante**
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
1
    	
 
    	
[**]
    	
 
    	
X
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
2
    	
 
    	
[**]
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    	
 
    	
 
    	
 
    	
[**]
    
	
3
    	
 
    	
[**]
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    	
 
    	
 
    	
 
    	
[**]
    
	
4
    	
 
    	
[**]
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    	
 
    	
 
    	
 
    	
[**]
    
	
5
    	
 
    	
[**]
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    	
 
    	
 
    	
 
    	
[**]
    
	
6
    	
 
    	
[**]
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    	
 
    	
 
    	
 
    	
[**]
    
	
7
    	
 
    	
[**]
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    	
 
    	
 
    	
 
    	
[**]
    
	
8
    	
 
    	
[**]
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    	
 
    	
 
    	
 
    	
[**]
    
	
9
    	
 
    	
[**]
    	
 
    	
X
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
[**]
    
	
10
    	
 
    	
[**]
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    	
 
    	
 
    	
 
    	
[**]
    
	
11
    	
 
    	
[**][**]
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    	
 
    	
[**]
    	
 
    	
[**]
    
	
 
    	
 
    	
TOTAL COSTS
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
[**]
    

 

*   Completion date will be developed based on the completion date of [**] for Registration Lots

** Zavante shall not be responsible for any amounts in excess of the estimates shown in this table unless agreed to in advance in writing by Zavante.

 

Payment: [**]% of these costs will be paid within [**] of signing this Agreement and the remainder will be paid upon successful completion of the last of the [**] Registration Lots.

 

25Exhibit 10.11

 

EXECUTION VERSION

 

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Double asterisks denote omissions.

 

COMMERCIAL PACKAGING AGREEMENT

 

This Commercial Packaging Agreement (“Agreement”) is made as of this 26 day of December, 2017 (“Effective Date”), by and among Zavante Therapeutics, Inc., a Delaware corporation, with a place of business at 11750 Sorrento Valley Blvd., Suite 250, San Diego CA 92121 (“Zavante”), and AndersonBrecon Inc., an Illinois corporation, doing business as PCI of Illinois , with a place of business at 4545 Assembly Drive, Rockford, IL 61109 (together, “PCI”).

 

RECITALS

 

A.                                    Zavante is a pharmaceutical company that holds certain rights to, and possesses certain technical and commercial information and know-how relating to, the Bulk Product (as defined below);

 

B.                                    PCI specializes in packaging for the pharmaceutical industry and has certain technical and commercial information and know-how relating to, among other things, performing packaging and labeling of pharmaceutical and other products, into various sized primary and secondary containers; and

 

C.                                    Zavante desires to engage PCI to provide certain commercial packaging services to Zavante, and PCI desires to provide such services, all pursuant to the terms and conditions set forth in this Agreement.

 

THEREFORE, in consideration of the mutual covenants, terms and conditions set forth below, the parties agree as follows:

 

ARTICLE 1
 DEFINITIONS

 

The following terms have the following meanings in this Agreement:

 

1.1                               “Affiliate(s)” means, with respect to PCI, Zavante or any third party, any corporation, firm, partnership or other entity that controls, is controlled by or is under common control with such entity.  For the purposes of this definition, “control” shall mean the ownership of at least 50% of the voting share capital of an entity or any other comparable equity or ownership interest.

 

1.2                               “Applicable Laws” means (i) all laws, ordinances, rules and regulations, as amended from time to time, of the United States applicable to the Packaging or any aspect thereof and the obligations of PCI or Zavante, as the context requires, under this Agreement, including cGMP, and (ii) to the extent mutually agreed upon the parties in writing, any

 

 

applicable laws, rules and regulations of one or more foreign jurisdictions relating directly to PCI’s obligations under this Agreement.

 

1.3                               “Authorization to Package” means a document, signed by a Zavante representative or designee and provided to PCI prior to the commencement of Packaging of such product, indicating the Bulk Product has been authorized to be Packaged.

 

1.4                               “Authorization to Transfer” means a document, signed by a Zavante representative or designee and provided to PCI, authorizing PCI to transfer the Packaged Product from the Facility.

 

1.5                               “Batch” means a defined quantity of Bulk Product that has been or is being Packaged in accordance with the Specifications.

 

1.6                               “Bulk Product” means bulk and work in process product of Zavante to be Packaged that is specified in Attachment A.

 

1.7                               “Business Day” means any day other than a Saturday, Sunday or a national holiday in the United States.

 

1.8                               “Certificate of Analysis” means a certificate indicating the Bulk Product’s conformance to the applicable Specifications, signed by a Zavante representative or designee and provided to PCI prior to the commencement of Packaging of such Bulk Product.

 

1.9                               “Certificate of Conformance” means, with respect to a Zavante-Supplied Material other than Bulk Product, a certificate indicating such Zavante-Supplied Material’s conformance with all required testing and other applicable Specifications, signed by a representative of the supplier of such material and provided to PCI prior to the commencement of Packaging using such material.

 

1.10                        “Certificate of Release” means a certificate indicating that the Packaging conforms with the Specifications, signed by a PCI representative and provided to Zavante following the completion of Packaging in accordance with the Quality Agreement.

 

1.11                        “cGMP” means all applicable laws, regulations and standards of the United States of America relating to the Packaging including but not limited to, the FDA current Good Manufacturing Practices, as set forth in the Title 21 of the United States Code of Federal Regulations as such regulations and guidelines may be revised from time to time and equivalent non-U.S. regulations solely to the extent such non-U.S. jurisdictions are otherwise included in the definition of “Applicable Laws.”

 

1.12                        “Confidential Information” has the meaning set forth in Section 10.2.

 

1.13                        “Contract Year” means each consecutive twelve (12) month period beginning on the Effective Date or anniversary thereof, as applicable.

 

1.14                        “Defective Packaging” has the meaning set forth in Section 5.1.

 

1.15                        “Delivery Date” has the meaning set forth in Section 4.3(b).

 

2

 

1.16                        “Effective Date” has the meaning set forth in the introductory paragraph.

 

1.17                        “Exception Notice” has the meaning set forth in Section 5.1.

 

1.18                        “Excess Loss” has the meaning set forth in Section 3.1(i).

 

1.19                        “Facility” means PCI’s facility located in Rockford, Illinois or such other facility as agreed by the parties.

 

1.20                        “FDA” means the United States Food and Drug Administration or any successor Regulatory Authority having substantially the same function.

 

1.21                        “FD&C Act” means the U.S. Federal Food, Drug and Cosmetic Act, as amended or supplemented from time to time.

 

1.22                        “Firm Commitment” has the meaning set forth in Section 4.2.

 

1.23                        “Intellectual Property” means all intellectual property (whether or not patented), including without limitation, brands, patents, patent applications, formulae, know-how, trade secrets, copyrights, trademarks, trademark applications, trade names, trade dress, trade secrets, industrial designs, designs, concepts, technical information, manuals, standard operating procedures, instructions, specifications, inventions, processes, data, improvements and developments.

 

1.24                        “Launch Plan” has the meaning set forth in Section 4.1.

 

1.25                        “Loss Allowance” has the meaning set forth in Section 3.1(g).

 

1.26                        “Losses” has the meaning set forth in Section 13.1.

 

1.27                        “Package” or “Packaging” or “Packaged” means the packaging of Bulk Product and labeling the packages which contain the Bulk Product in accordance with the Specifications.

 

1.28                        “Packaged Product” means the finished Bulk Product produced by PCI under this Agreement.

 

1.29                        “PCI” has the meaning set forth in the introductory paragraph, or any successor or permitted assign.

 

1.30                        “PCI Fault” has the meaning set forth in Section 5.1.

 

1.31                        “PCI Indemnitees” has the meaning set forth in Section 13.2.

 

1.32                        “PCI Intellectual Property” means all Intellectual Property and embodiments thereof owned by or licensed to PCI as of the date hereof or after by PCI .

 

1.33                        “Pricing” has the meaning set forth in Section 7.1(a).

 

1.34                        “Purchase Order” has the meaning set forth in Section 4.3(a).

 

3

 

1.35                        “Quality Agreement” has the meaning set forth in Section 9.8.

 

1.36                        “Raw Materials” means all raw materials, supplies, components and packaging necessary to Package and ship Packaged Product in accordance with the Specifications, as provided in Attachment A, but not including Zavante-Supplied Materials.

 

1.37                        “Recall” has the meaning set forth in Section 9.6.

 

1.38                        “Regulatory Approval” means any approvals, permits, product and/or establishment licenses, registrations or authorizations, including approvals pursuant to U.S. Investigational New Drug applications, New Drug Applications and Abbreviated New Drug Applications (or equivalent non-U.S. filings, such as European marketing authorization applications), as applicable, of any Regulatory Authorities that are necessary or advisable in connection with the development, manufacture, testing, use, storage, exportation, importation, transport, promotion, marketing, distribution or sale of Packaged Product.

 

1.39                        “Regulatory Authority” means any federal, state or local governmental or regulatory bodies, agencies, departments, bureaus, courts or other entities in the United States (including the FDA) responsible for (A) the regulation (including pricing) of any aspect of pharmaceutical or medicinal products intended for human use or (B) health, safety or environmental matters generally, and any equivalent non-U.S. governmental or regulatory bodies solely to the extent such non-U.S. jurisdictions are otherwise included in the definition of “Applicable Laws.”

 

1.40                        “Representative” has the meaning set forth in Section 10.1.

 

1.41                        “Review Period” has the meaning set forth in Section 5.1.

 

1.42                        “Rolling Forecast” has the meaning set forth in Section 4.1.

 

1.43                        “SKU” means each Packaged Product configuration designation.

 

1.44                        Specifications” means the procedures, requirements, standards, quality control testing and other data and the scope of services as set forth in Attachment A, along with any valid amendments or modifications thereto, in accordance with Article 8.

 

1.45                        “Supplier” has the meaning set forth in Section 3.3(a).

 

1.46                        “Term” has the meaning set forth in Section 16.1.

 

1.47                        “Zavante” has the meaning set forth in the introductory paragraph, or any successor or permitted assign.

 

1.48                        “Zavante Indemnitees” has the meaning set forth in Section 13.1.

 

1.49                        “Zavante Intellectual Property” means all Intellectual Property and embodiments thereof (a) owned by or licensed to Zavante as of the date hereof or after by Zavante, or (b) except with respect to packaging processes, which is PCI Intellectual Property, developed by PCI, its Representatives or Affiliates as a result of any use or reference to

 

4

 

Zavante’s Confidential Information or in the course of providing Packaging or other Services under this Agreement.

 

1.50                        “Zavante Material Loss” has the meaning set forth in Section 3.1(h).

 

1.51                        “Zavante-Supplied Materials” means any materials to be supplied by or on behalf of Zavante to PCI for Packaging, as provided in Attachment A, including Bulk Product, artwork and labeling.

 

ARTICLE 2
 PROCESSING & RELATED SERVICES

 

2.1                               Supply and Purchase of Packaging.  PCI shall Package Bulk Product in accordance with the Specifications, Applicable Laws and the terms and conditions of this Agreement for the consideration provided herein.  Zavante shall be responsible for the manufacturing and testing of Bulk Products, testing of Packaged Products, and sale and distribution of the Packaged Product.

 

2.2                               Other Related Services.  PCI shall provide such related services (including tooling purchases and repair; analytical work; stability; auditing of Suppliers; and retain storage) other than Packaging, as agreed to in writing by the parties from time to time.  Such writing shall include the scope and fees for any such services and be appended to this Agreement.  The terms and conditions of this Agreement shall govern and apply to such services.

 

ARTICLE 3
 MATERIALS

 

3.1                               Zavante-Supplied Materials.

 

(a)                                 Supply.  Zavante or a Supplier on Zavante’s behalf shall supply to PCI for Packaging, at Zavante’s sole cost and risk, Zavante-Supplied Materials, including Bulk Product, in quantities sufficient to meet Zavante’s requirements for Packaging, as set forth in Article 4.  Zavante shall deliver or cause to be delivered such items, together with associated Certificates of Analysis, Certificates of Conformance, lot numbers, expiration dates and Authorizations to Package to the Facility no later than [**] before, but not earlier than [**] before, the Delivery Date for the Packaged Product in which such items will be used by PCI.  If PCI fails to receive the foregoing on a timely basis, PCI shall have the right to delay delivery of the related Packaged Product or return such items to Zavante or store such items, either at Zavante’s expense.  The preceding supply schedule for Zavante-Supplied Materials may be adjusted upon mutual agreement of the parties if Zavante is launching a new product.  PCI shall use such items solely and exclusively for Packaging hereunder.  Prior to first delivery of any such items, Zavante shall provide to PCI a copy of all associated material safety data sheets, safe handling instructions and health and environmental information, and shall promptly provide any updates, or revisions thereto.

 

(b)                                 Conformity.  Within [**] of receipt of Zavante-Supplied Materials by PCI, PCI shall confirm that the labels on such items conform to their accompanying packing slip.

 

5

 

Unless otherwise expressly required by the Specifications, PCI shall have no obligation to test such items to confirm that they meet the associated Specifications, Certificate of Analysis or Certificate of Conformance or otherwise; but in the event that PCI detects a nonconformity with Specifications, PCI shall give Zavante prompt notice of such nonconformity.  PCI shall not be liable for any defects in Zavante-Supplied Materials, or in Packaging or Packaged Product as a result of defective Zavante-Supplied Materials, unless PCI failed to properly perform any testing obligations with respect thereto under this Agreement or under the Quality Agreement.  PCI shall follow Zavante’s reasonable written instructions in respect of return or disposal of defective Zavante-Supplied Materials, at Zavante’s sole cost and risk.

 

(c)                                  Customs. Zavante shall be solely responsible for the proper release and clearance of Zavante-Supplied Materials to be provided by Zavante or a Supplier for U.S. and foreign customs purposes, including any return thereof required by any Regulatory Authority following improper or unauthorized release, and Zavante acknowledges that it is the owner of such items for customs purposes.  Zavante shall reimburse PCI for any and all costs, charges and expenses incurred by PCI in connection with customs clearance and release of any such Zavante-Supplied Materials.  Notwithstanding anything to the contrary herein, if any delay in customs clearance or release of any Zavante-Supplied Materials occurs such that PCI cannot supply the quantity of Packaged Product to Zavante by the Delivery Dates specified in accepted Purchase Orders, then PCI shall not be obligated to supply Packaged Product to Zavante hereunder until full and proper customs clearance or release is obtained by Zavante.

 

(d)                                 Title and Risk of Loss for Zavante-Supplied Materials.  Title and risk of loss to Zavante-Supplied Materials shall remain with Zavante while such items are in the possession of PCI and for the duration of the services for each relevant Product.  PCI’s liability for any loss to such Zavante-Supplied Materials shall be solely as set forth in Section 3.1(h).  Zavante shall obtain and maintain insurance for Zavante-Supplied Materials in accordance with Section 15.1.

 

(e)                                  Artwork and Packaging.  Zavante shall provide or approve, prior to the procurement of applicable components, all artwork, advertising and packaging information necessary for Packaging.  Such artwork, advertising and packaging information is and shall remain the exclusive property of Zavante, and Zavante shall be solely responsible for the content thereof.  Such artwork, advertising and packaging information or any reproduction thereof may not be used by PCI in any manner other than performing its obligations hereunder.  PCI requires no less than [**] notice of changes in artwork, advertising and packaging information; provided, however, that PCI will work with Zavante in good faith to expedite copy changes on a quicker basis.  If Zavante provides PCI with less notice of changes in artwork, advertising and packaging information, PCI shall not be responsible for any delay in the delivery of Packaged Products to which such changes apply.

 

(f)                                   Expired Zavante-Supplied Materials.  Zavante will be required to dispose of any Zavante-Supplied Materials that have expired within [**] of such expiration.  PCI will manage destruction of such expired Zavante-Supplied Materials if requested by Zavante and will invoice Zavante for the costs thereof.

 

(g)                                  Loss Allowance.  For each type of Packaged Product, the parties will mutually determine an annual allowance for Bulk Product and other Zavante-Supplied Materials

 

6

 

that are not converted to Packaged Product (“Loss Allowance”).  The Loss Allowance shall be adjusted in the event of any changes to the Specifications, including without limitation any changes to the Bulk Product.

 

(h)                                 Liability for Loss.  PCI’s liability for loss or damage to Zavante-Supplied Materials is limited to: (i) process scrap arising from the Packaging operations, (ii) Zavante-Supplied Materials that are not reasonably recoverable from Defective Packaging attributable to PCI Fault, and (iii) Zavante-Supplied Materials lost or damaged due to PCI’s negligence, gross negligence or willful misconduct in its handling or storing the Zavante-Supplied Materials in accordance with the Specifications (collectively, “Zavante Material Loss”), but only to the extent that such Zavante Material Loss exceeds the Loss Allowance.  When calculating the amount of Zavante Material Loss, the following shall not be counted as issued to the line for Packaging: (i) Zavante-Supplied Materials used for samples and testing, (ii) Packaged Product that must be retained by PCI as samples, pursuant to this Agreement, the Quality Agreement or Applicable Laws, and (iii) Zavante-Supplied Materials that are non-conforming to Specifications.

 

(i)                                     Annual Reconciliation of Excess Loss; Reimbursement.  Within [**] following the end of each Contract Year, PCI will perform a reconciliation for each type of Packaged Product for the prior Contract Year and will calculate for applicable Zavante-Supplied Materials (i) the Zavante Material Loss and (ii) the amount, if any, by which the Zavante Material Loss exceeds the Loss Allowance (such excess referred to as the “Excess Loss”).  PCI will reimburse Zavante for Excess Loss, if any, [**] subject to the limitation set forth in Section 14.1.  For purposes of this Section 3.1(i), “cost” shall mean (i) for Zavante-Supplied Materials produced by Zavante or its Affiliate, material, labor and overhead costs to manufacture the Zavante-Supplied Materials and (ii) for Zavante-Supplied Materials purchased from unaffiliated third parties, the actual price paid to the third party for the Zavante-Supplied Materials.

 

(j)                                    PCI and Zavante agree to [**].

 

3.2                               Raw Materials.

 

(a)                                 Procurement.  PCI shall be responsible for procuring, inspecting and releasing adequate Raw Materials as necessary to meet the Firm Commitment, unless otherwise agreed to by the parties in writing.  PCI shall rely on the Firm Commitment for purchasing Raw Materials for use in the Packaged Products forecasted. To the extent practicable, PCI will procure Raw Materials on a [**] basis based on projected [**] requirements in an effort to reduce costs of such components and materials.    In the event that the quantity of Packaged Products in any Rolling Forecast provided by Zavante pursuant to Article 4 decreases or increases by more than [**]% from one Rolling Forecast to the next, PCI reserves the right (i) to

 

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purchase the Raw Materials required for such Packaged Products on a periodic basis as needed to meet such fluctuating requirements and (ii) in accordance with Section 7.2, to adjust the Pricing for such Packaged Products to reflect the costs of such fluctuating purchases.

 

(b)                                 Title and Risk of Loss for Raw Materials.  Title and risk of loss with respect to the Raw Materials used for the Packaged Products will remain with PCI until PCI delivers Packaged Products to a common carrier for shipment to Zavante.

 

(c)                                  Reimbursement for Raw Materials.  In the event of (i) a Specification change for any reason, (ii) obsolescence of any Raw Material or (iii) further to Article 16, termination or expiration of this Agreement, Zavante shall bear the cost of any unused Raw Materials plus [**]%, so long as PCI purchased such Raw Materials in quantities consistent with Zavante’s most recent Firm Commitment, the Supplier’s minimum purchase obligations and Section 3.2(a).  Payment will be due within [**] of Zavante’s receipt of PCI’s invoice.

 

(d)                                 Storage.  After [**], Raw Materials or Zavante-Supplied Materials, including Bulk Product, held in inventory will be subject to storage and carrying cost as reasonably determined by PCI.

 

3.3                               Mandated Supplier.

 

(a)                                 Use of Supplier.  In certain instances, Zavante may require a specific supplier, manufacturer or vendor (“Supplier”) to be used for Raw Materials or to furnish Zavante-Supplied Materials.  In such an event, (i) such Supplier will be identified in the Specifications or otherwise in writing, (ii) Zavante shall be responsible for the timeliness, quantity and quality of supply of Raw Materials or Zavante-Supplied Materials from such Supplier, (iii) PCI shall not be liable for any defects in Raw Materials or Zavante-Supplied Materials from such Supplier, or in Packaging or Packaged Product as a result of such defective Raw Materials or Zavante-Supplied Materials, unless PCI failed to properly perform any testing required by the Specifications, and (iv) Raw Materials from such Supplier shall be deemed, for all purposes hereunder including required supply schedule and liability, Zavante-Supplied Materials.  If a Supplier fails to deliver the appropriate quantity and quality of Raw Materials or Zavante-Supplied Materials on the required supply schedule and PCI is unable to resolve the issue with Supplier, PCI shall so notify Zavante of such supply issue and Zavante shall, to the extent practicable, have a discussion with the Supplier in an effort to resolve such failure.  Zavante shall have no obligation to continue such discussion with the Supplier following the initial discussion or after such offer of an initial discussion, if the Supplier refuses such discussion.  If a Supplier refuses such discussion or fails to supply PCI with Raw Materials or Zavante-Supplied Materials such that PCI cannot supply Packaged Product to Zavante, then, to the extent of such failure, PCI shall not be obligated to supply Packaged Product to Zavante hereunder until such failure to supply is remedied, either with the Supplier or with an alternate supplier.

 

(b)                                 Costs. If the cost of the Raw Material from any such Supplier is greater than PCI’s costs for the same raw material of equal quality from other suppliers, PCI shall add the difference between PCI’s cost of the Raw Material and the Supplier’s cost of the Raw Material to the Pricing.  Zavante will be responsible for all costs associated with qualification of any such Supplier that has not been previously qualified (as described in Section 3.3(c)) by PCI.

 

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(c)                                  Qualification. Zavante acknowledges and agrees that any Supplier mandated by Zavante (i) must meet PCI’s requirements for credit approval and (ii) prior to the delivery of any Raw Materials or Zavante-Supplied Materials by such Supplier to the Facility, must pass either (A) the quality audit conducted by PCI or, (B) if Zavante acknowledges in writing to PCI no later than [**] after selection of the Supplier that Zavante shall be solely responsible for conducting all quality audits of such Supplier, the quality audit conducted by Zavante.   Notwithstanding anything to the contrary herein, Zavante further acknowledges and agrees that PCI shall not be required to utilize or contract with any Supplier that fails to meet the foregoing credit and audit requirements.

 

ARTICLE 4
 LAUNCH, PURCHASE ORDERS & FORECASTS

 

4.1                                                             Launch.  The intent of this plan is to ensure the parties work collectively to develop a coordinated launch agreement to minimize the time from Regulatory Approval until the Packaged Product is available for commercial sale by Zavante (“Launch Plan”). Therefore, prior to the Packaged Product receiving Regulatory Approval, Zavante shall provide PCI an initial quantity of Packaged Product within [**] of submitting the NDA for the Packaged Product. The parties will work in good faith to agree to a Launch Plan that will include the initial launch quantity of Packaged Product, the proposed launch date and any additional expenses related to launching the Package Product (for which PCI shall be reimbursed), or terminating the launch if Regulatory Approval is delayed or the Packaged Product does not receive Regulatory Approval. Notwithstanding anything to the contrary in this Agreement, if Regulatory Approval is delayed or the Packaged Product does not receive Regulatory Approval, then PCI’s only compensation will be that provided in the Launch Plan.

 

4.2                                                             Commercial Forecast.  Once the Packaged Product has received Regulatory Approval, Zavante shall use its commercially reasonable efforts to provide PCI on or before the [**] of each calendar month, beginning at least [**] prior to the earliest Delivery Date, a written [**]-month rolling forecast of the quantities of Packaged Product that Zavante intends to have PCI Package during such period (“Rolling Forecast”).  The Rolling Forecast shall be submitted on a [**] basis in Excel spreadsheet format and shall include [**] quantity requirements by Zavante for each Packaged Product by SKU, and the proposed delivery date(s). To assist PCI in planning packaging operations, only the first [**] months of each Rolling Forecast shall constitute a binding order for the quantities of Product specified therein (“Firm Commitment”) and the following [**] months of the Rolling Forecast shall be non-binding, good faith estimates.  Notwithstanding anything to the contrary herein, if the lead time necessary to schedule production is greater than [**], PCI shall schedule production based on the Rolling Forecast in a timely manner.  In the event PCI believes it may not be able to meet the requirements of any Rolling Forecast, it shall notify Zavante within [**] of receipt of such Rolling Forecast, and the parties shall agree in good faith appropriate modifications to the Rolling Forecast.

 

4.3                               Purchase Orders.

 

(a)                                 From time to time as provided in this Section 4.3(a), Zavante shall submit to PCI a binding, non-cancelable purchase order for Packaging specifying the number of Batches, in whole Batch increments, to be Packaged, the Batch size (to the extent the Specifications permit Batches of different sizes), the proposed delivery date(s) for each Batch,

 

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and the lot numbers to be applied to such Batches (“Purchase Order”).  Concurrently with the submission of each Rolling Forecast, Zavante shall submit a Purchase Order for the portion of the Firm Commitment which is not already subject to Purchase Order.  Purchase Orders for Packaging quantities of Bulk Product in excess of the Firm Commitment shall be submitted by Zavante at least [**] in advance of the delivery date(s) requested in the Purchase Order.

 

(b)                                 Provided that a Purchase Order is consistent with the Firm Commitment and other terms and conditions of this Agreement, within [**] following receipt of a Purchase Order, PCI shall issue a written acknowledgement to Zavante that it accepts such Purchase Order with the proposed delivery date(s) or reasonable alternative delivery date(s), in which event the parties shall promptly reach mutual agreement on acceptable delivery date(s).  The term “Delivery Date(s)” refers to the firm date(s), as agreed upon by the parties pursuant to this Section 4.3(b), upon which PCI must deliver to Zavante or authorized agent of Zavante the Packaged Products.

 

(c)                                  PCI may reject Purchase Orders in excess of the Firm Commitment or otherwise not given in accordance with this Agreement.

 

(d)                                 Notwithstanding Section 4.3(c), PCI shall use commercially reasonable efforts to Package Bulk Product in quantities which are up to [**]% in excess of the quantities specified in the Firm Commitment, subject to PCI’s other supply commitments and packaging and equipment capacity; provided, that PCI’s failure to Package Bulk Product quantities in excess of the quantities specified in the Firm Commitment shall not constitute a breach of this Agreement by PCI.  Within [**] of receipt of a Purchase Order for quantities of Packaged Product in excess of the applicable Rolling Forecast, PCI will notify Zavante of PCI’s capacity to supply such excess quantity.

 

4.4                               PCI’s Cancellation of Purchase Orders. Notwithstanding Section 4.5, PCI reserves the right to cancel all, or any part of, a Purchase Order upon written notice to Zavante, and PCI shall have no further obligations or liability with respect to such Purchase Order, if Zavante refuses or fails to timely supply conforming Zavante-Supplied Materials in accordance with Section 3.1, including artwork or related information.  Any such cancellation of Purchase Orders shall not constitute a breach of this Agreement by PCI nor shall it absolve Zavante of its obligation in respect of the Firm Commitment.

 

4.5                               Zavante’s Modification or Cancellation of Purchase Orders.  Zavante may modify the Delivery Date or quantity of Bulk Product to be packaged in a Purchase Order only by submitting a written change order to PCI at least [**] in advance of the original Delivery Date covered by such change order.  Such change order shall be effective and binding against PCI only upon the written approval of PCI, and notwithstanding the foregoing, Zavante shall remain responsible for the Firm Commitment.  In no event shall PCI be required to incur any costs or suffer any losses in connection with such change order or its efforts to accommodate such a change.  Any such costs or losses incurred by PCI shall be paid for by Zavante.

 

4.6                               Unplanned Delay or Elimination of Packaging.  PCI shall use commercially reasonable efforts to meet the Purchase Orders, subject to the terms and conditions of this Agreement.  PCI shall provide Zavante with as much advance notice as possible (and will use

 

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commercially reasonable efforts to provide at least [**] advance notice where possible) if PCI determines that any Packaging will be delayed or cancelled for any reason.

 

4.7                               Observation of Packaging.  In addition to Zavante’s audit right pursuant to Section 9.5, Zavante may send a reasonable number of representatives to the Facility to observe Packaging, upon reasonable advance written request to PCI.  Such representatives shall abide by all PCI safety rules and other applicable employee policies and procedures, and Zavante shall be responsible for such compliance and must have the appropriate insurance in place to cover such responsibilities.  Zavante shall indemnify and hold harmless PCI for any Losses resulting from an action, omission or other activity of such representatives while on PCI’s premises.  PCI reserves the right to require such representatives to enter into separate confidentiality agreements directly with PCI in such persons’ individual capacities on terms substantially similar to those set forth in Article 10.

 

ARTICLE 5
 TESTING; SAMPLES; RELEASE

 

5.1                               Releasing; Rejection.  PCI shall provide Zavante or its designee with a Certificate of Release for each Batch consistent with the requirements in the Quality Agreement. Zavante shall be responsible for final release of Packaged Product to the market.  Unless within [**] after Zavante’s receipt of a Batch (“Review Period”), Zavante or its designee notifies PCI in writing (an “Exception Notice”) that the Packaging of such Batch does not meet the warranty set forth in Section 12.1 (“Defective Packaging”), and provides a sample of the alleged Defective Packaging, the Packaging shall be deemed accepted by Zavante and Zavante shall have no right to reject such Batch.  Upon timely receipt of an Exception Notice from Zavante, PCI shall conduct an appropriate investigation in its discretion to determine whether or not it agrees with Zavante that the Packaging is Defective Packaging and to determine the cause of any nonconformity.  If PCI agrees that Packaging is Defective Packaging and determines that the cause of nonconformity is attributable solely to PCI’s negligence or willful misconduct (“PCI Fault”), then Section 5.3 shall apply.  For avoidance of doubt, where the cause of nonconformity cannot be determined or assigned as above, it shall not be deemed PCI Fault.

 

5.2                               Discrepant Results.  In the event of a disagreement between the parties regarding whether Packaging is Defective Packaging and/or whether the cause of the nonconformity is PCI Fault, which disagreement cannot be resolved by the parties within [**] of the date of the completion of PCI’s investigation, the parties shall cause a mutually agreeable independent third party to review records, test data and to perform comparative tests and/or analyses on samples of the alleged Defective Packaging and its components, including Zavante-Supplied Materials.  The independent party’s determination as to whether or not Packaging is Defective Packaging and the cause of any nonconformity shall be final and binding.  Unless otherwise agreed to by the parties in writing, the costs associated with such testing and review shall be borne by PCI if Packaging is Defective Packaging attributable to PCI Fault, and by Zavante in all other circumstances.

 

5.3                               Defective Packaging.  PCI will, at Zavante’s option, following good faith consultation with PCI, either re-Package at its cost (only if re-packaging is permitted under the Quality Agreement) any Batch of Defective Packaging attributable to PCI Fault (and Zavante shall be liable to pay for either the rejected Batch(es) or the replacement Batch(es), but not both), or reimburse Zavante for all payments made by Zavante for such Batch.  In either case, PCI will

 

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also reimburse Zavante for the costs incurred by Zavante to provide the unrecoverable Zavante-Supplied Materials for such Batch of Defective Packaging in accordance with Section 3.1(i). EXCEPT FOR PCI’S OBLIGATIONS UNDER SECTION 9.6 OR ARTICLE 13 WITH RESPECT TO DEFECTIVE PRODUCT NOT KNOWN TO CLIENT OR THAT REASONABLY SHOULD NOT HAVE BEEN KNOWN TO CLIENT, THE FOREGOING OBLIGATION OF PCI TO RE-PACKAGE OR REIMBURSE PAYMENTS MADE BY ZAVANTE AND REIMBURSE FOR ZAVANTE-SUPPLIED MATERIALS IN THE EVENT OF EXCESS LOSS UNDER SECTION 3.1(i) SHALL BE ZAVANTE’S SOLE AND EXCLUSIVE REMEDY UNDER THIS AGREEMENT FOR DEFECTIVE PACKAGING AND IS IN LIEU OF ANY OTHER WARRANTY, EXPRESS OR IMPLIED.

 

5.4                               Supply of Material for Defective Packaging.  In the event PCI re-Packages pursuant to Section 5.3, Zavante shall supply, at its cost, PCI with sufficient quantities of Zavante-Supplied Materials in order for PCI to complete such re-Packaging.

 

ARTICLE 6
 DELIVERY

 

6.1                               Delivery.  PCI shall tender Packaged Product for delivery Ex Works (Incoterms 2010) the Facility promptly following PCI’s receipt of the Authorization to Transfer, which shall be provided by Zavante no more than [**] after PCI’s issuance of a Certificate of Release, provided, that there are no outstanding Packaging process deviations or open quality system investigations with respect to such Packaged Product.  Zavante shall qualify at least one carrier to deliver Packaged Product; provided, that if Zavante does not provide such carrier, PCI may select one.  If the Packaged Product is to be exported out of the United States, Zavante shall be solely responsible for obtaining all required export or import licenses available to the Packaged Product prior to such export or import and shall reimburse PCI for any and all costs, charges, expenses and import and export duties for delivery and transportation of Packaged Product from the Facility.  PCI should not be listed as the exporter (U.S. Principle Party in Interest) on any documentation relating to the export.

 

6.2                               Failure to Take Delivery; Storage.  Upon written agreement of the parties, or if Zavante fails to take delivery of any Packaged Product on any scheduled Delivery Date; provided, that such failure to take delivery is not due to any outstanding PCI obligation, PCI shall store such Packaged Product under conditions in accordance with the Specifications as Zavante’s agent.  If Zavante or its authorized agent fails to take delivery within [**] of the Delivery Date, Zavante shall be billed $[**] per pallet of unshipped Packaged Product at such time and thereafter on the [**] until Zavante or its authorized agent releases and takes delivery of such Packaged Product.  For each such Batch of stored Packaged Product, Zavante agrees that: (A) Zavante has made a fixed commitment to purchase the Packaging of such Packaged Product, (B) Zavante has title and risk of loss for such Packaged Product, (C) such Packaging for Packaged Product shall be on a bill and hold basis for legitimate business purposes, and (D) if no rescheduled Delivery Date is determined at the time of billing, PCI shall have the right to ship such Packaged Product to Zavante within [**] after billing.  Within [**] following a written request from PCI, Zavante shall provide PCI with a letter confirming items (A) through (D) of this Section 6.2 for each Batch of stored Packaged Product.

 

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ARTICLE 7
 PAYMENTS

 

7.1                               Fees.  In consideration for PCI performing services hereunder:

 

(a)                                 Zavante shall pay PCI the pricing for Packaging set forth on Attachment B (“Pricing”).  Such fees shall be paid within [**] following date of invoice, which invoice shall be submitted to Zavante by PCI upon tender of delivery of Packaged Product as provided in Section 6.1 or the entry of the Packaged Products into storage as provided in Section 6.2.

 

(b)                                 Other Fees.  Zavante shall pay PCI for all other fees and expenses of PCI owing in accordance with the terms of this Agreement, including pursuant to Sections 2.2, 6.2 and 16.3.  Such fees and expenses shall be paid within [**] following date of invoice, which invoice shall be submitted to Zavante by PCI as and when appropriate.

 

7.2                               Pricing Adjustment. The Pricing shall be adjusted following advance written notice from PCI to Zavante and shall be effective on January 1st of each year of the Term as follows:  (i) labor costs shall be subject to annual increase to reflect any increase in the Producer Price Index, commodity code 06-38 for Pharmaceutical Preparations, issued by the Bureau of Labor Statistics, United States Department of Labor over the prior calendar year (based on the publication by the U.S. Department of Labor of the PPI on or about October 15th of the prior calendar year); (ii) cost in Raw Materials shall be subject to annual increase to reflect any increase in PCI’s costs over the prior calendar year, including any increases imposed by a Supplier; and (iii) production costs shall be subject to annual increase to reflect any reduction in purchase volume level below anticipated purchase volume over the prior calendar year.  In addition, the parties acknowledge and agree that the Pricing is based on PCI performing order runs of consistent size and frequency and that the Pricing shall be subject to review and adjustment promptly following the occurrence of any unanticipated fluctuation in order run sizes or frequency or fluctuations in forecasted quantities as described in Sections 4.1 and 4.3.  For example, such adjustment may include an increase in the Pricing due to reduced order run sizes or a decrease in the price due to increased order run size.

 

7.3                               Payment Terms.  Zavante shall make payment in U.S. dollars, and otherwise as directed in the applicable invoice.  In the event payment is not received by PCI on or before the due date, then PCI may, in addition to any other remedies available at equity or in law, at its option, elect to do any one or more of the following: (A) charge interest on the outstanding sum from the due date (both before and after any judgment) at [**] percent ([**]%) per month until paid in full (or, if less, the maximum amount permitted by Applicable Laws); (B) suspend any further performance hereunder until such invoice is paid in full; and/or (C) terminate this Agreement pursuant to Section 16.2(b).

 

7.4                               Taxes.  PCI shall bear and pay all federal, state and local taxes based upon or measured by its net income, and all franchise taxes based upon its corporation existence, or its general corporate right to transact business.  Any other tax, however denominated and measured, imposed upon the Products, the Packaged Products or Packaging or upon their storage, inventory, sales, transportation, delivery, use or consumption shall be paid directly by Zavante, or if prepaid by PCI, shall be invoiced to Zavante, at cost, as a separate item and paid by Zavante to PCI.

 

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ARTICLE 8
 CHANGES TO SPECIFICATIONS

 

All Specifications and any changes thereto agreed to by the parties from time to time shall be in writing, dated and signed by the parties.  Any change to the Packaging process shall be deemed a Specification change.  No change in the Specifications shall be implemented by PCI, whether requested by Zavante, requested by PCI or requested or required by any Regulatory Authority, until the parties have agreed in writing to such change, the implementation date of such change, and any increase or decrease in costs, expenses or fees associated with such change (including any change to Pricing).  PCI shall respond promptly to any request made by Zavante for a change in the Specifications, and both parties shall use commercially reasonable, good faith efforts to agree to the terms of such change in a timely manner.  As soon as possible after a request is made for any change in Specifications, PCI shall notify Zavante of the costs associated with such change and shall provide such supporting documentation as Zavante may reasonably require.  Zavante shall pay all costs associated with such agreed upon changes. If there is a conflict between the terms of this Agreement and the terms of the Specifications, this Agreement shall control. PCI reserves the right to postpone effecting changes to the Specifications, or in the case of changes requested or required by any Regulatory Authority postpone Packaging under this Agreement, until such time as the parties agree to and execute the required written amendment.

 

ARTICLE 9
 RECORDS; REGULATORY MATTERS

 

9.1                               Batch Records and Data.  Within [**] following the completion of Packaging of each Batch, PCI shall provide Zavante with properly completed copies of Batch records prepared in accordance with the Specifications; provided, that if an unplanned deviation in the Packaging process occurs, PCI shall provide such Batch records within [**] following resolution of the unplanned deviation.

 

9.2                               Recordkeeping.  PCI shall maintain materially complete and accurate books, records, reports and all other information relating to Packaging, including all information required to be maintained by Applicable Laws, in accordance with PCI standard operating procedures.  Such information shall be maintained for a period of at least [**] from the relevant Packaged Product expiration date or longer if required under Applicable Laws.

 

9.3                               Regulatory Compliance.  Zavante shall be solely responsible for and will obtain all Regulatory Approvals associated specifically with the Packaged Products, including any applications and amendments in connection therewith.  Zavante shall use its best efforts to expedite and obtain all Regulatory Approvals necessary for PCI to commence Packaging at the Facility.  PCI will be responsible to maintain all permits and licenses required by any Regulatory Authority with respect to the Facility generally.

 

9.4                               Governmental Inspections and Requests.  PCI shall promptly advise Zavante if an authorized agent of any Regulatory Authority visits the Facility concerning the Packaging.  PCI shall furnish to Zavante a copy of the relevant portions of any report by such Regulatory Authority within [**] of PCI’s receipt of such report.  Further, upon receipt of a Regulatory Authority request to inspect the Facility or audit PCI’s books and records with respect to

 

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Packaging, PCI shall promptly notify Zavante, and shall provide Zavante with a copy of the relevant portions of any written document received from such Regulatory Authority.

 

9.5                               Zavante Inspections and Audits.

 

(a)                                 During the Term, up to [**] duly-authorized employees, agents and representatives of Zavante shall be granted access for a maximum of up to [**] days (unless otherwise agreed to by PCI in writing) upon reasonable prior written notice and at reasonable times during regular business hours to (i) the portion of the Facility where PCI performs Packaging, (ii) relevant personnel involved in Packaging and (iii) Packaging records described in Section 9.2, in each case solely for the purpose of inspecting and verifying that PCI is Packaging in accordance with cGMPs and the Specifications.

 

(b)                                 Zavante will arrange audit visits with PCI Quality Management at least [**] in advance of such visit.  Inspections shall be designed to minimize disruption of operations at the Facility.  Zavante may not conduct an inspection under this Section 9.5 more than [**] period; provided, that additional inspections may be conducted upon reasonable advance written notice in the event there is a material quality or compliance issue concerning Packaging.

 

(c)                                  Employees, agents and representatives of Zavante performing an audit or inspection shall abide by all PCI safety rules and other applicable employee policies and procedures, and Zavante shall be responsible for such compliance and must have the appropriate insurance in place to cover such responsibilities.  Zavante shall indemnify and hold harmless PCI for Losses resulting from any action, omission or other activity of such representatives while on PCI’s premises.  PCI reserves the right to require such representatives to enter into separate confidentiality agreements directly with PCI in such persons’ individual capacities on terms substantially similar to those set forth in Article 10.

 

9.6                               Recall.  If a Regulatory Authority orders or requires the recall of any Packaged Product supplied hereunder or if Zavante or PCI believes a recall, field alert, Packaged Product withdrawal or field correction (“Recall”) may be necessary with respect to any Packaged Product supplied under this Agreement, the party receiving the notice from the Regulatory Authority or that holds such belief shall promptly notify the other party in writing.  With respect to any Recall, PCI shall provide all necessary cooperation and assistance to Zavante.  Zavante shall provide PCI with an advance copy of any proposed submission to a Regulatory Authority in respect of any Recall, and shall consider in good faith any comments from PCI.  The cost of any Recall shall be borne by Zavante, and Zavante shall reimburse PCI for expenses incurred in connection with any Recall, in each case unless such Recall is caused solely by PCI’s gross negligence or willful misconduct in which case PCI’s liability for such Recall costs and expenses is limited to a maximum of the lesser of (i) $500,000 or (ii) the Pricing charged for the recalled Packaged Product, plus reimbursement for any Product that cannot be recovered from such recalled Packaged Product in accordance with the limitation set forth in Section 3.1(i).  For purposes of clarification, Recall costs and expenses shall include, without limitation, notification to customers, Product retrieval, Product destruction, shipping and taxes.  In the event that a Product is Recalled or Zavante is required to disseminate information relating to Packaged Product covered by this Agreement, Zavante shall so notify PCI within a reasonable time so as to enable PCI to provide Zavante with such assistance in connection with such Recall as may reasonably be requested by Zavante.  PCI will comply with all such reasonable requests from

 

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Zavante.  Zavante shall handle exclusively the organization and implementation of all Recalls of Products and Packaged Products. Any such Recall shall be implemented and administered in a manner which is appropriate and reasonable under the circumstances and in conformity with any requests or orders of the applicable Regulatory Authority, as well as to the extent not inconsistent with requests or orders of the applicable Regulatory Authority, accepted trade practices.

 

9.7                               Duty to Inform.  Zavante shall inform PCI immediately of any important information relating to the activity, side effects, toxicity and/or safety of the Products or Packaged Products that becomes known to Zavante during the term of this Agreement and that is relevant to the performance of the services by PCI.

 

9.8                               Quality Agreement.  Prior to the first Packaging hereunder, the parties shall negotiate in good faith and enter into a Quality Agreement substantially in the form attached hereto as Attachment C (the “Quality Agreement”).  The Quality Agreement shall in no way determine liability or financial responsibility of the parties for the responsibilities set forth therein.  In the event of a conflict between any of the provisions of this Agreement and the Quality Agreement with respect to quality-related activities, including compliance with cGMP, the provisions of the Quality Agreement shall govern.  In the event of a conflict between any of the provisions of this Agreement and the Quality Agreement with respect to any commercial matters, including allocation of risk, liability and financial responsibility, the provisions of this Agreement shall govern.

 

ARTICLE 10
 CONFIDENTIALITY AND NON-USE

 

10.1                        Mutual Obligation.  PCI and Zavante each agrees that it will not use the other party’s Confidential Information except in connection with the performance of its obligations hereunder and will not disclose the other party’s Confidential Information to any third party without the prior written consent of the other party, except as required by law, regulation or court or administrative order; provided, that prior to making any such legally required disclosure, the party making such disclosure shall give the other party as much prior notice of the requirement for and contents of such disclosure as is practicable under the circumstances.  Notwithstanding the foregoing, each party may disclose the other party’s Confidential Information to any of its employees, officers, directors, contractors (collectively, “Representatives”) and Affiliates that (A) need to know such Confidential Information for the purpose of performing under this Agreement, (B) are advised of the contents of this Article 10 and (C) agree to be bound by the terms of this Article 10.  Each party shall be responsible for any breach of this agreement by its Representatives or Affiliates. Without prejudice to the rights and remedies otherwise available to a party at law or in equity, the parties agree that a non-breaching party shall be entitled to seek equitable relief by way of specific performance and injunction or otherwise if the other party breaches or threatens to breach any of the provisions of this Article 10.

 

10.2                        Definition.  As used in this Agreement, the term “Confidential Information” includes all such information furnished by PCI or Zavante, or any of their respective Representatives or Affiliates, to the other party or its Representatives or Affiliates, whether furnished before, on or after the Effective Date and furnished in any form, including written, verbal, visual, electronic or in any other media or manner.  Confidential Information includes all proprietary technologies, data, information, know-how, trade secrets, discoveries, inventions and

 

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any other Intellectual Property (whether or not patented), analyses, compilations, business or technical information and other materials prepared by either party, or any of their respective representatives or Affiliates, containing or based in whole or in part on any such information furnished by the other party or its representatives or Affiliates.  Confidential Information also includes the terms of this Agreement.  For the avoidance of doubt, with the exception of packaging processes which are PCI Confidential Information, all proprietary technologies, data, information, know-how, trade secrets, discoveries, inventions and any other Intellectual Property (whether or not patented), analyses, compilations, business or technical information and other materials developed by PCI or its Representatives or Affiliates in the course of providing the Packaging or other services under this Agreement shall be Zavante’s Confidential Information.

 

10.3                        Exclusions.  Notwithstanding Section 10.2, Confidential Information does not include information that (A) is or becomes generally available to the public or within the industry to which such information relates other than as a result of a breach of this Agreement, (B) is already known by the receiving party at the time of disclosure as evidenced by the receiving party’s written records, (C) becomes available to the receiving party on a non-confidential basis from a source that the receiving party reasonably believes is entitled to disclose it on a non-confidential basis or (D) was or is independently developed by or for the receiving party without any reference to or use of the Confidential Information of the other party as evidenced by the receiving party’s written records.

 

10.4                        No Implied License.  Except as expressly set forth in Section 11.1, the receiving party will obtain no right of any kind or license under any Confidential Information of the disclosing party, including any patent application or patent, by reason of this Agreement.  All Confidential Information will remain the sole property of the party disclosing such information or data, subject to Article 11.

 

10.5                        Return of Confidential Information.  Upon expiration or termination of this Agreement, the party receiving Confidential Information will cease its use and, upon request, within [**] either return or destroy (and certify as to such destruction) all Confidential Information of the other party, including any copies thereof, except for a single copy thereof which may be retained for the sole purpose of determining the scope of the obligations incurred under this Agreement.  Notwithstanding the generality of the foregoing, nothing contained herein shall be construed as requiring the destruction of system wide back-up materials which may incidentally contain or have reference to Confidential Information.

 

10.6                        Survival.  The obligations of this Article will terminate [**] years from the expiration or termination of this Agreement, except with respect to trade secrets, for which the obligations of this Article will continue for so long as such information remains a trade secret under applicable law.

 

ARTICLE 11
 INTELLECTUAL PROPERTY

 

11.1                                                                              Ownership of Zavante Intellectual Property; License.  All Zavante Intellectual Property, including any improvements thereto (except as such improvement may relate to packaging which shall be deemed PCI Intellectual Property), shall be the sole and exclusive property of Zavante.  Zavante grants to PCI a non-exclusive, non-transferable, royalty-free

 

17

 

license to use Zavante Intellectual Property solely to the extent necessary for PCI to perform its obligations under this Agreement.  No other license to Zavante Intellectual Property is hereby granted.

 

11.2                        Ownership of PCI Intellectual Property.  All PCI Intellectual Property, including but not limited to any improvements to packaging processes, shall be the sole and exclusive property of PCI.  No license or other right to PCI Intellectual Property is granted to Zavante.

 

11.3                        Ownership of Deliverables.  Except as set forth in Section 11.2, all data and information resulting from the conduct of Packaging and required to be delivered to Zavante hereunder shall be the sole property of Zavante and shall be subject to Zavante’s exclusive use, commercial or otherwise.

 

ARTICLE 12
  REPRESENTATIONS AND WARRANTIES

 

12.1                        PCI.  PCI represents, warrants and undertakes to Zavante that Packaging shall have been performed in accordance with Applicable Laws and in conformance with the Specifications; provided, that PCI shall not be liable for defects attributable to Zavante-Supplied Materials (including artwork and labeling).

 

12.2                        Zavante.  Zavante represents, warrants and undertakes to PCI that:

 

(a)                                 the Zavante-Supplied Materials (including artwork and labeling) shall have been produced in accordance with and not violate Applicable Laws and shall comply with all applicable specifications;

 

(b)                                 no Zavante-Supplied Materials shall, at the time of delivery, be (i) adulterated or misbranded within the meaning of the FD&C Act, or any similar law of any other jurisdiction, or (ii) an article which may not, under the provisions of the FD&C Act, or any similar law of any other jurisdiction, be introduced into interstate commerce;

 

(c)                                  no specific safe handling instructions, health and environmental information or material safety data sheets are applicable to any other Zavante-Supplied Materials, except as provided to PCI in writing by Zavante in sufficient time for review and training by PCI;

 

(d)                                 all Packaged Product delivered to Zavante by PCI will be held, used and disposed of by or on behalf of the Zavante in accordance with all Applicable Laws, and Zavante will otherwise comply with all laws, rules, regulations and guidelines applicable to Zavante’s performance under this Agreement and its use of Packaged Product provided by PCI under this Agreement;

 

(e)                                  Zavante will not release any Batch of Packaged Product if Zavante knows or can reasonably determine that Packaging does not comply with the Specifications;

 

(f)                                   Zavante has all necessary authority to use and to permit PCI to use pursuant to this Agreement all Intellectual Property related to Zavante-Supplied Materials

 

18

 

(including artwork and labeling), and the Packaging, including any copyrights, trademarks, trade dress, trade secrets, patents, inventions and developments; and

 

(g)                                  the work to be performed by PCI under this Agreement and in accordance with the Specifications will not, to the best of Zavante’s knowledge, violate or infringe upon any trademark, trade name, copyright, patent, trade secret, trade dress or other Intellectual Property or other right held by any person or entity.

 

12.3                        Limitations.  THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS ARTICLE 12 ARE THE SOLE AND EXCLUSIVE REPRESENTATIONS AND WARRANTIES MADE BY EACH PARTY TO THE OTHER PARTY, AND NEITHER PARTY MAKES ANY OTHER REPRESENTATIONS, WARRANTIES OR GUARANTEES OF ANY KIND WHATSOEVER, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE.

 

ARTICLE 13
 INDEMNIFICATION

 

13.1                        Indemnification by PCI.  PCI shall indemnify, defend and hold harmless Zavante, its Affiliates, and their respective directors, officers, employees, representatives, and agents (“Zavante Indemnitees”) from and against any and all suits, claims, losses, demands, liabilities, damages, costs and expenses (including reasonable attorneys’ fees and reasonable investigative costs) in connection with any suit, demand or action by any third party (“Losses”) arising out of or resulting from (A) any breach of this Agreement or (B) any negligence or willful misconduct by PCI; in each case except to the extent that any of the foregoing arises out of or results from any Zavante Indemnitee’s negligence, willful misconduct or breach of this Agreement.

 

13.2                        Indemnification by Zavante.  Zavante shall indemnify, defend and hold harmless PCI, its Affiliates, and their respective directors, officers, employees, representatives, and agents (“PCI Indemnitees”) from and against any and all Losses arising out of or resulting from (A) any breach of this Agreement, (B) any manufacture, labeling, packaging, sale, promotion, distribution or use of or exposure to Zavante-Supplied Materials or Packaged Product, including product liability or strict liability, (C) Zavante’s exercise of control over the Packaging, to the extent that Zavante’s instructions or directions violate Applicable Laws, (D) use of a Supplier, (E) any actual or alleged infringement or violation of any third party Intellectual Property by Zavante’s Intellectual Property, products or components of Zavante, including Zavante-Supplied Materials, information provided by Zavante or otherwise caused by Zavante, or (F) any negligence or willful misconduct by Zavante; in each case except to the extent that any of the foregoing arises out of or results from any PCI Indemnitee’s negligence, willful misconduct or breach of this Agreement.

 

13.3                        Indemnification Procedures.  All indemnification obligations in this Agreement are conditioned upon the party seeking indemnification promptly notifying the indemnifying party of any claim or liability of which the party seeking indemnification becomes aware (including a copy of any related complaint, summons, notice or other instrument); provided, that failure to provide such notice within a reasonable period of time shall not relieve the indemnifying party of any of its obligations hereunder except to the extent the indemnifying

 

19

 

party is materially prejudiced by such failure.  The indemnifying party will assume and conduct the legal defense of the indemnified party in any suit that could result in claims under this Article 13.  The indemnifying party will not settle any case without with prior written consent of the indemnified party and such consent shall not be unreasonably withheld or delayed. The indemnified party shall cooperate with the indemnifying party in the defense of any such claim or liability and any related settlement negotiations at the indemnifying party’s expense.

 

ARTICLE 14
 LIMITATIONS OF LIABILITY

 

14.1                        EXCEPT FOR ANY LIABILITY ARISING UNDER ARTICLE 10 (CONFIDENTIALITY AND NON-USE), ARTICLE 11 (INTELLECTUAL PROPERTY) AND PCI’S OBLIGATIONS UNDER SECTION 13.1. OF THIS AGREEMENT, PCI’S LIABILITY UNDER THIS AGREEMENT FOR ANY PACKAGING LOT GIVING RISE TO A PARTICULAR CLAIM SHALL IN NO EVENT EXCEED THE NET FEES (EXCLUDING PASS-THROUGH COSTS) PAID BY ZAVANTE TO PCI UNDER THIS AGREEMENT FOR THE BATCH OR SERVICES GIVING RISE TO THE CLAIM.

 

14.2                        EXCEPT FOR ANY LIABILITY ARISING UNDER ARTICLE 10 (CONFIDENTIALITY AND NON-USE), ARTICLE 11 (INTELLECTUAL PROPERTY) AND PCI’S OBLIGATIONS UNDER SECTION 13.1. OF THIS AGREEMENT, WITH RESPECT TO EACH TYPE OF PRODUCT PACKAGED UNDER THIS AGREEMENT, IN NO EVENT SHALL PCI’S TOTAL LIABILITY UNDER THIS AGREEMENT WITH RESPECT TO ANY 12 MONTH PERIOD EXCEED THE NET FEES (EXCLUDING PASS-THROUGH COSTS) PAID DURING SUCH 12-MONTH PERIOD BY ZAVANTE TO PCI UNDER THIS AGREEMENT FOR SUCH SPECIFIC TYPE OF PRODUCT PACKAGED GIVING RISE TO THE CLAIM, AND IN NO 12 MONTH PERIOD SHALL PCI’S LIABILITY UNDER THIS AGREEMENT EXCEED $5,000,000.

 

14.3                        NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OR LOSS OF REVENUES, PROFITS OR DATA ARISING OUT OF PERFORMANCE UNDER THIS AGREEMENT, WHETHER IN CONTRACT OR IN TORT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

ARTICLE 15
 INSURANCE

 

15.1                        By Zavante.  Zavante shall maintain (i) property insurance against the perils of physical loss, including those generally associated with “all risk” property insurance, flood, earth movement and theft, in amounts sufficient to protect all Zavante-Supplied Materials at PCI’s facility or while in transit, and (ii) following Regulatory Approval of the Packaged Product, a commercial general liability insurance policy covering product liability and personal injury damages with limits of $[**] dollars) per occurrence.  Zavante agrees to designate PCI as an “additional insured” under such general liability insurance policy.  Zavante shall also carry and maintain in force at all times relevant hereto all other insurance required by law or statute.

 

20

 

15.2                        By PCI.  PCI shall maintain (i) employer’s liability insurance with a limit of not less than [**] dollars ($[**]), (ii) commercial general liability insurance with limits of [**] dollars ($[**]) per occurrence and a general aggregate limit of [**] dollars ($[**]), (iii) umbrella liability insurance, in excess of the above coverage, with a limit per occurrence of [**] dollars ($[**]) and an aggregate limit of [**]dollars ($[**]), and (iv) products liability insurance exclusive of the above coverage for general liability, with a per claim limit of [**] dollars ($[**]) and an aggregate limit of [**] dollars ($[**]).

 

15.3                        General. The policies required in this Article 15 shall remain in effect throughout the term of this Agreement and shall not be canceled or subject to reduction or any other material modification without [**] prior written notice to the other party.  Each party may self-insure all or any portion of the required insurance as long as, together with its Affiliates, its US GAAP net worth is greater than $[**] or its annual EBITDA (earnings before interest, taxes, depreciation and amortization) is greater than $[**].  Each required insurance policy, other than self-insurance, shall be obtained from an insurance carrier with an A.M. Best rating of at least A- VII.  If any of the required policies of insurance are written on a claims made basis, such policies shall be maintained throughout the Term and for a period of at least three years thereafter.  Upon the other party’s written request from time to time, each party shall promptly furnish to the other party a certificate of insurance or other evidence of the required insurance.

 

ARTICLE 16
 TERM AND TERMINATION

 

16.1                        Term.  This Agreement shall commence on the Effective Date and shall continue until the end of the third Contract Year, unless earlier terminated in accordance with Section 16.2 (as may be extended in accordance with this Section, the “Term”).  The Term shall automatically be extended for successive one -year periods unless and until one party gives the other party at least 120 days’ prior written notice of its desire to terminate as of the end of the then-current Term.

 

16.2                        Termination.  This Agreement may be terminated immediately without further action:

 

(a)                                 by either party if the other party files a petition in bankruptcy, or enters into an agreement with its creditors, or applies for or consents to the appointment of a receiver, administrative receiver, trustee or administrator, or makes an assignment for the benefit of creditors, or suffers or permits the entry of any order adjudicating it to be bankrupt or insolvent and such order is not discharged within 30 days, or takes any equivalent or similar action in consequence of debt in any jurisdiction;

 

(b)                                 by either party if the other party materially breaches any of the provisions of this Agreement and such breach is not cured within [**] after the giving of written notice requiring the breach to be remedied; provided, that in the case of a failure of Zavante to make payments in accordance with the terms of this Agreement, PCI may terminate this Agreement if such payment breach is not cured within [**] of receipt of notice of non-payment from PCI; or

 

(c)                                  by either party for any reason or no reason upon 24 months’ prior written notice to the other party; or

 

21

 

(d)                                 any required license, permit or certificate required of the other party to perform its obligations under this Agreement is not approved and/or issued, or is revoked, by any applicable Regulatory Authority.

 

16.3                        Effect of Termination.  Expiration or termination of this Agreement shall be without prejudice to any rights or obligations that accrued to the benefit of either party prior to such expiration or termination.  In the event of a termination of this Agreement:

 

(a)                                 PCI shall promptly return to Zavante, at Zavante’s expense and at Zavante’s direction, any remaining inventory of Zavante-Supplied Materials; provided, that PCI shall have no obligation to so return such items until all outstanding invoices sent by PCI to Zavante have been paid in full.

 

(b)                                 In accordance with the provisions regarding payment under this Agreement, Zavante shall pay PCI all invoiced amounts outstanding hereunder, plus, upon receipt of invoice therefore, for any (i) Packaging of Packaged Product that has been shipped pursuant to Purchase Orders but not yet invoiced, (ii) Packaging performed pursuant to Purchase Orders that has been completed but Packaged Product has not yet shipped, (iii) in-process Packaging pursuant to Purchase Orders (or, alternatively, Zavante may instruct PCI to complete such Packaging in process, and the resulting completed Packaged Product shall be governed by clause (ii)) and (iv) in addition to Zavante’s obligations under Section 3.2(c), all costs and expenses incurred, and all noncancellable commitments (including all Product specific tooling that has been, or remains to be, amortized) made, in connection with PCI’s performance of this Agreement, so long as such costs, expenses or commitments were made by PCI consistent with Zavante’s most recent Firm Commitment and the supplier’s minimum purchase obligations.

 

16.4                        Survival.  The rights and obligations of the parties shall continue under Article 11 (Intellectual Property), Article 13 (Indemnification), Article 14 (Limitations of Liability), Article 17 (Notice), Article 18 (Miscellaneous); under Article 10 (Confidentiality and Non-Use) and Article 15 (Insurance), in each case to the extent expressly stated therein; and under Sections 3.1(h) (Liability for Loss), 3.1(i) (Annual Reconciliation of Excess Loss; Reimbursement), 5.3 (Defective Packaging), 7.3 (Payment Terms), 7.4 (Taxes), 9.2 (Recordkeeping), 9.6 (Recall), 12.3 (Limitations on Warranties), 16.3 (Effect of Termination) and 16.4 (Survival), in each case in accordance with their respective terms if applicable, notwithstanding expiration or termination of this Agreement.

 

ARTICLE 17
 NOTICE

 

All notices and other communications hereunder shall be in writing and shall be deemed given: (A) when delivered personally; (B) when delivered by facsimile transmission (receipt verified); (C) when received or refused, if mailed by registered or certified mail (return receipt requested), postage prepaid; or (D) when delivered if sent by express courier service, to the parties at the following addresses (or at such other address for a party as shall be specified by like notice; provided, that notices of a change of address shall be effective only upon receipt thereof):

 

22

 

To Zavante:                                                     Zavante Therapeutics, Inc.

11750 Sorrento Valley Blvd., Suite 250

San Diego CA 92121

Attn: Chief Executive Officer
 Facsimile:  [**]

 

To PCI:                                                                              AndersonBrecon Inc.

4545 Assembly Drive

Rockford, IL 61109

Attn:  Chief Executive Officer
 Facsimile:  [**]

 

ARTICLE 18
 MISCELLANEOUS

 

18.1                        Entire Agreement; Amendments.  This Agreement, together with all Attachments and the Quality Agreement, constitutes the entire understanding between the parties, and supersedes any contracts, agreements or understandings (oral or written) of the parties (except for confidentiality agreements), with respect to the subject matter hereof, including for avoidance of doubt, any quotation letters referenced in Attachment B.  No modification or amendment to this Agreement shall be effected by or result from the receipt, acceptance, signing or acknowledgment of any party’s purchase orders, order acknowledgements, quotations, invoices, shipping documents or other business forms containing terms or conditions in addition to or different from the terms and conditions set forth in this Agreement, and the terms of this Agreement shall supersede any provision in any purchase order or other document that is in addition to or inconsistent with the terms of this Agreement.  No term of this Agreement may be amended except upon written agreement of the parties, unless otherwise expressly provided in this Agreement.

 

18.2                        Captions; Certain Conventions.  The captions in this Agreement are for convenience only and are not to be interpreted or construed as a substantive part of this Agreement.  Unless otherwise expressly provided herein or the context of this Agreement otherwise requires, (A) words of any gender include each other gender, (B) words such as “herein”, “hereof”, and “hereunder” refer to this Agreement as a whole and not merely to the particular provision in which such words appear, (C) words using the singular shall include the plural, and vice versa, (D) the words “include(s)” and “including” shall be deemed to be followed by the phrase “but not limited to”, “without limitation” or words of similar import, (E) the word “or” shall be deemed to include the word “and” (e.g., “and/or”) and (F) references to “Article,” “Section,” “subsection,” “clause” or other subdivision, or to an Attachment or other appendix, without reference to a document are to the specified provision or Attachment of this Agreement.  This Agreement shall be construed as if it were drafted jointly by the parties.

 

18.3                        Further Assurances.  The parties agree to execute, acknowledge and deliver such further instruments and to take all such other incidental acts as may be reasonably necessary or appropriate to carry out the purpose and intent of this Agreement.

 

18.4                        No Waiver.  Failure by either party to insist upon strict compliance with any term of this Agreement in any one or more instances will not be deemed to be a waiver of its rights to insist upon such strict compliance with respect to any subsequent failure.

 

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18.5                        Severability.  If any term of this Agreement is declared invalid or unenforceable by a court or other body of competent jurisdiction, the remaining terms of this Agreement will continue in full force and effect.

 

18.6                        Independent Contractors.  The relationship of PCI and Zavante is that of independent contractors, and neither will incur any debts or make any commitments for the other except to the extent expressly provided in this Agreement.  Nothing in this Agreement is intended to create or will be construed as creating between the parties the relationship of joint ventures, co-partners, employer/employee or principal and agent.  Neither PCI nor Zavante shall have any responsibility for the hiring, termination or compensation of the other’s employees or contractors or for any employee benefits of any such employee or contractor.

 

18.7                        Successors and Assigns.  This Agreement will be binding upon and inure to the benefit of the parties, their successors and permitted assigns.  Neither party may assign this Agreement, in whole or in part, without the prior written consent of the other party, except that either party may, without the other party’s consent, assign this Agreement in its entirety to an Affiliate or to a successor to substantially all of the business or assets of the assigning party or the assigning party’s business unit responsible for performance under this Agreement.

 

18.8                        No Third Party Beneficiaries.  This Agreement shall not confer any rights or remedies upon any person or entity other than the parties named herein and their respective successors and permitted assigns.

 

18.9                        Governing Law.  This Agreement shall be governed by and construed under the laws of the Commonwealth of Pennsylvania, excluding its conflicts of law provisions.  The United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement.

 

18.10                 Alternative Dispute Resolution.  If any dispute arises between the parties in connection with this Agreement, such dispute shall be presented to the respective presidents or senior executives of PCI and Zavante for their consideration and resolution.  If such parties cannot reach a resolution of the dispute, then such dispute shall be resolved by binding alternative dispute resolution in accordance with the then existing commercial arbitration rules of CPR Institute for Dispute Resolution, 366 Madison Avenue, New York, NY 10017.  Arbitration shall be conducted in the jurisdiction of the defendant party, in the English language.

 

18.11                 Prevailing Party.  In any dispute resolution proceeding between the parties in connection with this Agreement, the prevailing party will be entitled to recover its reasonable attorney’s fees and costs in such proceeding from the other party.

 

18.12                 Publicity.  Neither party will make any press release or other public disclosure regarding this Agreement or the transactions contemplated hereby without the other party’s express prior written consent, except as required under Applicable Laws, by any governmental agency or by the rules of any stock exchange on which the securities of the disclosing party are listed, in which case the party required to make the press release or public disclosure shall use commercially reasonable efforts to obtain the approval of the other party as to the form, nature and extent of the press release or public disclosure prior to issuing the press release or making the public disclosure.

 

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18.13                 Setoff.  Without limiting PCI’s rights under law or in equity, PCI and its Affiliates, parent or related entities, collectively or individually, may exercise a right of set-off against any and all amounts due to PCI from Zavante.  For purposes of this Section, PCI, its Affiliates, parent or related entities shall be deemed to be a single creditor.

 

18.14                 Force Majeure.  Except as to payments required under this Agreement, a party shall be liable in damages for, nor shall this Agreement be terminable or cancelable by reason of, any delay or default in such party’s performance hereunder if such default or delay is caused by events beyond such party’s reasonable control, including acts of God, law or regulation or other action or failure to act of any government or agency thereof, strikes, lockouts, slowdowns, delay of subcontractors or vendors, war (declared or undeclared) or insurrection, civil commotion, terrorism, destruction of production facilities or materials by earthquake, fire, flood or weather, labor disturbances, epidemic or failure of suppliers, public utilities or common carriers; provided, that the party seeking relief under this Section shall immediately notify the other party of such cause(s) beyond such party’s reasonable control.  The party that may invoke this Section 18.14 shall use commercially reasonable efforts to reinstate its ongoing obligations to the other party as soon as practicable.  If the cause(s) shall continue unabated for 180 days, then both parties shall meet to discuss and negotiate in good faith what modifications to this Agreement should result from such cause(s).

 

18.15                 Counterparts.  This Agreement may be executed in one or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument.  Any photocopy, facsimile or electronic reproduction of the executed Agreement shall constitute an original.

 

[Signature page follows]

 

25

 

IN WITNESS WHEREOF, the parties have caused their respective duly authorized representatives to execute this Agreement effective as of the Effective Date.

 

	
ANDERSONBRECON   INC.
    	
 
    	
ZAVANTE THERAPEUTICS, INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Philip DiGiacomo
    	
 
    	
By:
    	
/s/ Theodore R. Schroeder
    
	
Name:
    	
Philip DiGiacomo
    	
 
    	
Name:
    	
Theodore R. Schroeder
    
	
Its:
    	
SVP Business Development
    	
 
    	
Its:
    	
President and CEO
    

 

Signature Page to Commercial Packaging Agreement

 

 

ATTACHMENT A

 

SPECIFICATIONS

 

I.                                        Zavante-Supplied Materials (and associated specifications)

 

[**]

 

II.                                   Raw Materials (and associated specifications)

 

[**]

 

III.                              Packaging Specifications (including Batch size)

 

Apply (1) label to each vial containing the lot number and expiry date. Load (12) vials per carton with dividers. Code carton with lot number, expiration date, & serialization information. Load (1) carton & (1) insert per shipper and apply serialized label to shipper. Aggregate shippers to pallet level. Apply serialized pallet labels to pallet.

 

 

ATTACHMENT B

 

UNIT PRICING AND FEES

 

Pricing:

 

	
Product Description
    	
 
    	
Lot Size/Run Size
    	
 
    	
Estimated Annual
   Volume (Cartons)
    	
 
    	
Price/M Cartons
    
	
Fosfomycin Sodium
    	
 
    	
[**]
    	
 
    	
[**]
    	
 
    	
[**]
    
	
 
    	
 
    	
[**]
    	
 
    	
 
    	
 
    	
[**]
    

 

Unit of Measure: Carton

 

Note: Pricing includes serialization

 

Pricing is subject to change if volumes forecasted are significantly different than assumed.

 

Serialization Integration

 

Flex Line Serialization Integration:

 

[**]

 

	
Project   Management
    	
 
    	
[**
    	
]
    
	
Design
    	
 
    	
[**
    	
]
    
	
Development
    	
 
    	
[**
    	
]
    
	
Unit Testing
    	
 
    	
[**
    	
]
    
	
Integrated   Testing
    	
 
    	
[**
    	
]
    
	
Deployment
    	
 
    	
[**
    	
]
    
	
QC Validation
    	
 
    	
[**
    	
]
    
	
Total   Price:
    	
 
    	
[**
    	
]
    

 

	
Discount for   Existing Interface
    	
 
    	
 
    	
 
    
	
(Design,   Development & Unit Testing)
    	
 
    	
[**
    	
]
    
	
Estimated   Total with Axway or TraceLink:
    	
 
    	
[**
    	
]
    
	
 
    	
 
    	
 
    	
 
    
	
Lead   Time:
    	
 
    	
[**]
    	
 
    

 

Additional Cost Items:

 

	
Lot Charge
    	
 
    	
[**]
    
	
Setup Charge
    	
 
    	
[**]
    
	
Label Plates & Dies
    	
 
    	
[**]
    

 

 

	
Insert Prep & Plates
    	
 
    	
[**]
    
	
Carton Prep & Plates
    	
 
    	
[**]
    
	
Validation(s)
    	
 
    	
[**]
    

 

[**]

Overtime Costs - Will be quoted separately, when requested

 

Notes and Assumptions

 

[**]

 

 

ATTACHMENT C

 

FORM OF QUALITY AGREEMENT

 

Contract Services
 Quality Agreement

 

by and between

 

	
Customer Name:
    	
 
    	
Zavante Therapeutics, Inc.
    
	
Address:
    	
 
    	
11750 Sorrento Valley Road,   Ste. 250
   San Diego, CA 92121
    
	
 
    	
 
    	
(“Customer”)
    
   and

    
	
Supplier Name:
    	
 
    	
AndersonBrecon Inc., an   Illinois
   corporation dba “PCI of Illinois”
    
	
Address:
    	
 
    	
4545 Assembly Drive   Rockford, IL 61109
    
	
 
    	
 
    	
(“PCI”)
    
   for
    
    All Product identified in Appendix 1
    
   (“Product”)
    

 

 

Contents

 

1.                                      Effective Date

2.                                      Scope

3.                                      Other Agreements

4.                                      Amendments to Quality Agreement

5.                                      Term of Quality Agreement

6.                                      Sub Contracting

7.                                      Survival Clause

8.                                      Resolution of Quality Issues

9.                                      Debarment

10.                               Contacts and Responsibilities

 

	
A.                                    Quality Responsibilities

B.                                    Right to Audit

C.                                    Regulatory Inspections and Exchanges

D.                                    Regulatory Documentation

E.                                     Animal Derived Materials

F.                                      Buildings and Facilities

G.                                    Personnel and Training

H.                                   Sub-Contracting and Testing

I.                                        Change Control

J.                                        Validation/Qualification

K.                                    Preventative Maintenance and   Calibration

L.                                     Investigations

M.                                 Documentation and Records

N.                                    Annual Product Reviews
    	
 
    	
O.                                    Annual Product Report (if applicable)

P.                                      Production and In-Process Controls,   Packaging and Labeling

Q.                                    Process Equipment

R.                                    Reprocess

S.                                      Rework

T.                                     Laboratory Controls

U.                                    Retest

V.                                    Stability (if applicable to service   being provided)

W.                                 Storage and Distribution

X.                                    Control, Disposal and Destruction of   Production Materials

Y.                                    Complaints

Z.                                     Field Alerts, Biological Product   Deviation Reports and Recalls

AA.                           Clinical Trials
    

 

11.                               Contacts and Responsibilities

 

Appendices:

 

Appendix 1: (Definition of Product)
 Appendix 2: (Temperature Requirements of Product)

 

 

This Contract Services Quality Agreement (this “Quality Agreement”) is entered into between AndersonBrecon and Customer.

 

A.                                    Customer has engaged PCI to provide certain services to Customer relating to Customer’s Product.

 

B.                                    PCI and Customer wish to define the individual responsibilities of the quality aspects of packaging and release of Product to ensure compliance with the approved Product application and/or Customer requirements, along with appropriate regulatory requirements.

 

In consideration of the mutual promises made by the parties hereto and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending to be legally bound, the parties hereto agree as follows:

 

1.                                      Effective Date

 

The Effective Date of this Quality Agreement shall be the date of last signature (the “Effective Date”).

 

2.                                      Scope

 

This Quality Agreement (written in accordance with the principles defined in the US Food and Drug Administration regulations 21 CFR parts 210 and 211), specifies the relationship and outlines the responsibilities of PCI and Customer with respect to the quality assurance of the Product packaged and/or supplied by PCI for Customer, as defined in Appendix 1 (the “Product”).

 

3.                                      Other Agreements

 

This Quality Agreement is required pursuant to the Commercial Packaging Agreement between the parties, dated as of the 26 day of December, 2017 (the “Services Agreement”) regarding the subject matter hereof.  If there are any direct conflicts between the terms of this Quality Agreement and the Services Agreement, the provisions in the Services Agreement shall govern and control in all matters, other than those related to quality.  In matters of quality and regulatory matters, this Quality Agreement shall prevail.

 

Any breach of this Quality Agreement shall be deemed a breach of the Manufacturing & Supply Agreement.  The terms contained in the Manufacturing & Supply Agreement are intended to complement the terms of this Quality Agreement, and they shall be interpreted as complementary to the extent possible.  In the event of a conflict between the terms of the Manufacturing & Supply Agreement and the terms of this Quality Agreement, the terms of the Quality Agreement shall control with respect to quality control and quality assurance matters related to the Manufacturing & Supply Agreement (including, without limitation, manufacturing, testing, storage, release, change management and validation activities), and the Manufacturing & Supply Agreement shall control with respect to all other matters.  No terms contained in any purchase order, binding forecast or similar mechanism will supersede the terms of this Quality Agreement.

 

 

4.                                      Amendments to Quality Agreement

 

This Quality Agreement may be amended by the written consent of both parties.

 

The parties agree to amend terms of this Quality Agreement that must be amended in order that the Product continue to meet regulatory requirements of applicable regulatory agencies, as may exist from time to time.

 

If an amendment to this Quality Agreement is proposed, the proposing party shall use proper change control and will circulate the proposed amendment to the appropriate contact person at PCI and Customer for review and internal approval.  The appropriate contact person at each of PCI and Customer is identified in Section 13 herein (each a “Contact Person”).

 

5.                                      Term of Quality Agreement

 

This Quality Agreement shall commence on the Effective Date and shall remain in effect for as long as PCI packages and/or supplies Product to Customer unless the Quality Agreement is terminated earlier in accordance with the terms of this Quality Agreement.

 

Either party may terminate this Quality Agreement upon ninety (90) days written notice to the other party.

 

6.                                      Sub Contracting

 

Any restrictions on PCI’s use of Sub Contractors shall be set forth in the service agreement.

 

7.                                      Survival Clause

 

The obligations of confidentiality contained in the Non-Disclosure Agreement or Services Agreement, as applicable, shall apply with respect to all confidential or proprietary information exchanged by the parties pursuant to this Quality Agreement and shall survive termination of this Quality Agreement as provided in the Non- Disclosure Agreement or Services Agreement, as applicable.

 

8.                                      Resolution of Quality Issues

 

Quality related disagreements between PCI and Customer that are not resolved in the normal course of business shall be brought to the attention of the Contact Person at PCI and Customer, in writing.  If both parties agree that a resolution of the disagreement is reasonably possible, then both PCI and Customer shall agree to work jointly to develop a strategy for such resolution.  PCI and Customer further agree to record such resolution in writing.

 

9.                                      Debarment

 

PCI warrants and represents that neither PCI nor its representatives or employees involved with the services provided hereunder have been debarred pursuant to the U.S. Federal Food, Drug and Cosmetic Act (the “FD&C Act”).  PCI further warrants and represents, in that it shall not use in any capacity the services of any person debarred under the FD&C Act.

 

 

10.                               Quality Responsibilities Table

 

Unless otherwise indicated, responsibility for each activity is assigned to either PCI, or Customer, or is assigned to both PCI and Customer.

 

	
Table   Key:     N = Not   Applicable     C=   Customer     S = PCI   (Supplier)
    

 

	
§
    	
 
    	
Responsibilities
    	
 
    	
N
    	
 
    	
C
    	
 
    	
S
    
	
A.
    	
 
    	
Compliance Requirements
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
1.01
    	
 
    	
Follow applicable regulations and current Good   Manufacturing Practices, as well as locally imposed requirements.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
1.02
    	
 
    	
Package, ship, store and test the Product and   materials in an environment meeting the applicable GMP regulations, which is   designed, constructed and maintained in a manner that a) permits the   operation therein to be performed under clean, sanitary and orderly   conditions; b) permits the effective cleaning of all surfaces; and c)   prevents the contamination of the Product and the addition of extraneous   material to the Product.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
1.03
    	
 
    	
Maintain a valid facility registration covering the packaging   of the Product.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
1.04
    	
 
    	
Operate in compliance with applicable environmental,   occupational health and safety laws and regulations.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
1.05
    	
 
    	
Notify Customer of requests for information, notices   of violations or other communication from a government agency relating to   environmental, occupational health and safety compliance that impact the   Product.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
1.06
    	
 
    	
Have management controls in place to track and trend   investigations and commitments.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
1.07
    	
 
    	
Maintain a quality unit that is independent of   production that fulfills both quality assurance and quality control   responsibilities.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
1.08
    	
 
    	
Disposition of Product by quality unit or Qualified   Person (QP).
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
1.09
    	
 
    	
Involve the quality unit in all Good Manufacturing Practices   related matters.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
1.10
    	
 
    	
Maintain internal Good Manufacturing Practices audit   program.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
B.
    	
 
    	
Right to Audit
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
2.01
    	
 
    	
Have the right to audit PCI’s facilities and   systems, as they relate to the packaging of the Product, at mutually agreed   upon times. Customer retains the right to conduct “for cause” audits as   necessary. Audit to be conducted with no more than [**] auditors for [**],   unless otherwise agreed upon.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    
	
2.02
    	
 
    	
Schedule visits and/or requests for Product specific   documents for review to assure continued adherence to the agreed upon   manufacturing process, applicable current Good Manufacturing Practices and   other applicable requirements.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    
	
2.03
    	
 
    	
Issue PCI a confidential audit report summarizing   audit observations within [**] for the audit.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    

 

 

	
§
    	
 
    	
Responsibilities
    	
 
    	
N
    	
 
    	
C
    	
 
    	
S
    
	
2.04
    	
 
    	
Issue responses to all observations in writing to   Customer within [**] of receipt. Responses are to include timelines and plans   for closure of all commitments.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
C
    	
 
    	
Regulatory Inspections and Exchanges
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
3.01
    	
 
    	
Coordinate the activities necessary to ensure   readiness prior to regulatory agency pre-approval inspections and maintain   inspection readiness for all inspections.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
3.02
    	
 
    	
Notify Customer within [**] of any pending or   ongoing regulatory authority inspection or communication related to the   Product. In the event that the inspection is specific only to Product, PCI   shall permit a representative of Customer to be onsite during any such   inspection.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
3.03
    	
 
    	
Provide copies to Customer by facsimile copy or   electronically within [**] of correspondences to and received from regulatory   authorities (Boards of Health) related to Product.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
3.04
    	
 
    	
Provide a copy of the regulatory inspection report,   deficiency letter, or regulatory compliance observations, response and   related correspondence relevant to Product edited to exclude PCI proprietary   information within [**] of receipt. Allow Customer to review and comment on the   response, relevant to Product, prior to submission of the response to the   regulatory authority. Comment must not prevent PCI from responding as   required.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
3.05
    	
 
    	
Notify PCI of any regulatory compliance observation   received by Customer that pertains to operations performed by the PCI.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    
	
3.06
    	
 
    	
Provide requested information to Customer within   [**] of notification or as required to meet regulatory obligations.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
3.07
    	
 
    	
Provide PCI with advance written notification of new   or supplemental regulatory submission/application that impact the operations   performed by the PCI.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    
	
D.
    	
 
    	
Regulatory Documentation
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
4.01
    	
 
    	
Provide all necessary Letters of Authorization to   Customer to permit reference to the PCI’s FDA Facility Establishment   Identification Number in the registration of the Product.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
4.02
    	
 
    	
Maintain the FDA Facility Establishment   Identification Number, as applicable, in accordance with the regulations of   the applicable regulatory authority.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
4.03
    	
 
    	
Notify Customer of any FDA Registration change as   applicable.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
4.04
    	
 
    	
Upon request provide assistance in the preparation   and review pertinent sections of new or supplemental regulatory applications   where Customer owns the Product registration and submit comments to the   proposed application to Customer.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
4.05
    	
 
    	
Provide sections of Product registration relevant to   the packaging of the Product.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    
	
4.06
    	
 
    	
In case of any regulatory requirements outside of   the United States, the parties shall in good faith, meet, discuss and agree   upon the specific rules and regulations to which PCI must comply.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    

 

 

	
§
    	
 
    	
Responsibilities
    	
 
    	
N
    	
 
    	
C
    	
 
    	
S
    
	
E.
    	
 
    	
Animal Derived Materials
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5.01
    	
 
    	
Complete Materials Sourcing Questionnaire for components.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
5.02
    	
 
    	
Have a program to evaluate and control the risk of   Transmissible Spongiform Encephalopathy (TSE) and Bovine Spongiform   Encephalopathy (BSE) for components both internally and from PCI specified   vendors.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
5.03
    	
 
    	
Have a program to evaluate and control the risk of   Transmissible Spongiform Encephalopathy (TSE) and Bovine Spongiform   Encephalopathy (BSE) for components and material from customer and customer   specified vendors.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    
	
5.04
    	
 
    	
PCI shall not use any animal derived materials   without the prior notification of and approval by Customer. The foregoing   restriction includes any animal derived materials used in the Product   manufacturing process including: (i) those used as machine lubricants   and/or oils, and; (ii) any animal derived materials that have contact   with Product.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
5.05
    	
 
    	
Maintain appropriate records for each lot of animal   derived material to ensure traceability. Where required by local regulations,   the location where animals lived or were slaughtered (if applicable) must be   documented.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
F.
    	
 
    	
Buildings and Facilities
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6.01
    	
 
    	
Buildings and facilities used in the packaging of   the Product shall be designed, constructed and maintained to facilitate   cleaning, maintenance and operations and to assure orderly placement of   equipment and materials to prevent mix-up and contamination as appropriate to   the type and stage of manufacture.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
6.02
    	
 
    	
Ventilation systems will be designed and maintained   to minimize the risk of contamination.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
6.03
    	
 
    	
Dispose of sewage, refuse and other waste in a safe   and timely manner following applicable environmental health and safety   regulations.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
6.04
    	
 
    	
Maintain a set of current drawings for critical   utilities including water, electricity, compressed gasses and air handling.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
6.05
    	
 
    	
Maintain and document an adequate pest control   program.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
G.
    	
 
    	
Personnel and Training
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
7.01
    	
 
    	
Provide sufficient training to meet obligations of   this Quality Agreement.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
7.02
    	
 
    	
Provide adequate number of personnel qualified by   appropriate training and experience to perform and supervise the packaging,   testing, and disposition of the Product.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
7.03
    	
 
    	
Assure training is regularly conducted, assessed and   documented by qualified individuals.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
7.04
    	
 
    	
Have written job descriptions for positions   responsible for performing Good Manufacturing Practices related activities.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    

 

 

	
§
    	
 
    	
Responsibilities
    	
 
    	
N
    	
 
    	
C
    	
 
    	
S
    
	
7.05
    	
 
    	
Assure that non-employees, including consultants,   advising on the packaging and control of the Product have sufficient   education, training, and experience to advise on the subject for which they   are retained. Non-employees will be supervised as required and trained in   Good Manufacturing Practices.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
H.
    	
 
    	
Sub-Contracting and Testing
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
8.01
    	
 
    	
If PCI sub-contracts any laboratory testing or   packaging work (or like) to a third-party contract laboratory or third-party   packager (or the like) (a “Sub-Contractor”), PCI shall require that such Sub-Contractor   shall operate in compliance with current Good Manufacturing Practices,   compendia requirements and any other applicable regulations.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
8.02
    	
 
    	
Upon Customer request, provide written notice of the   engagement of any Sub-Contractor.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
8.03
    	
 
    	
Maintain Sub-Contactor as qualified following   approved procedures according to a schedule.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
8.04
    	
 
    	
If PCI engages a Sub-Contractor, PCI shall cause   Sub-Contractor to grant access to Customer and/or any applicable regulatory   authority for purposes of any Customer and/or regulatory authority audits on   the same terms and conditions as such access is granted to Customer and/or   any applicable regulatory authority by PCI under the terms of this Quality   Agreement (including Section 2, Right to Audit and Section 3   Regulatory Inspections and Exchanges as provided herein above) and/or the   terms and conditions of any other applicable agreement between PCI and   Customer.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
I.
    	
 
    	
Change Control
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
9.01
    	
 
    	
Have approved written procedures for control of   changes impacting the Product including but not limited to the packaging   process, packaging materials, labeling, computer hardware/software, Product   specifications, and test methods. Include in written procedures the process   and criteria for Customer notification and approval, follow up and closure of   changes.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
9.02
    	
 
    	
Notify Customer of all changes to facility, process,   test methods, quality systems and specifications that impact Product   identity, strength, safety, potency, purity, stability, regulatory status or   validation/qualification. Allow time for Customer to comment and approve or   reject changes prior to implementation. Customer must respond to the change   request within [**] of receipt or Customer will be deemed to have consented   thereto. In the case of emergency changes, PCI shall follow the procedures   defined in Section 12 (Investigations). Customer approval is not   required for relocation of “portable” packaging equipment to different   areas/rooms/plants and minor changes.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    

 

 

	
§
    	
 
    	
Responsibilities
    	
 
    	
N
    	
 
    	
C
    	
 
    	
S
    
	
9.03
    	
 
    	
Provide copies of change control documentation such   as supporting data, validation/qualification reports and change control forms   for changes impacting Product as requested by Customer.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
9.04
    	
 
    	
Have changes reviewed and approved by PCI’s quality   unit.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
9.05
    	
 
    	
PCI and Customer shall establish a strategy to   secure regulatory approvals as necessary, and shall mutually agree on an   implementation timeline. PCI may make minor changes that do not have   regulatory impact, such as, amending typographical errors without obtaining   Customer approval.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
9.06
    	
 
    	
PCI may make “like for like” changes with no   regulatory impact without obtaining Customer approval.
   “Like for like” is described as an identical replacement of a part or piece   of equipment; e.g. the same part no. or model no.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
9.07
    	
 
    	
The customer may approve exception reports   (deviations to batch records, specifications, etc.) regarding material   structure, labeling, bill of material, tooling, construction instructions,   classification of defects, testing, sampling plans, and acceptable quality   levels (AQLs). All other batch record changes may be implemented by PCI   without customer approval.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
9.08
    	
 
    	
The customer may approve specification changes to   the material structure, labeling (if applicable), classification of defects,   testing, sampling plans, and acceptable quality levels (AQLs). All other   specification changes may be implemented by PCI without customer approval.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
9.09
    	
 
    	
The customer may approve batch records changes to   the bill of material, tooling, construction instructions, classification of   defects, testing, sampling plans, and acceptable quality levels (AQLs). All   other batch record changes may be implemented by PCI without customer   approval.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
J.
    	
 
    	
Validation/Qualification
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
10.01
    	
 
    	
Have an appropriate written validation/qualification   plan for the facilities, equipment/instruments, packaging process, cleaning   procedures, analytical procedures, in process control tests and computerized   systems approved by the quality unit.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
10.02
    	
 
    	
Prepare and maintain validation/qualification   documentation approved by the quality unit, including protocols, reports and   associated documentation. Provide such documents to Customer upon request.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
10.03
    	
 
    	
Validate/qualify as necessary all critical systems,   utilities and equipment/instruments used for the packaging and control of   Product (Installation Qualification (IQ), Operational Qualification (OQ),   and/or Performance Qualification (PQ), Package Validation (PV)).
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
10.04
    	
 
    	
Validate/qualify computer systems and associated   software used in Good Manufacturing Practices related activities associated   with the Product. Procedures must be in place to assure the integrity,   archival,
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    

 

 

	
§
    	
 
    	
Responsibilities
    	
 
    	
N
    	
 
    	
C
    	
 
    	
S
    
	
 
    	
 
    	
retrieval and destruction of the electronic data   that comply with applicable regulations.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
10.05
    	
 
    	
Validate/qualify methods and procedures for cleaning   of equipment with acceptance criteria for residues defined and justified.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
10.06
    	
 
    	
Develop and execute a plan for process and method   validation/qualification including definition of roles and responsibilities   between PCI and Customer for performing technology transfers.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
10.07
    	
 
    	
Where method   validation is performed by PCI:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
PCI shall write method validation protocol,
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
 
    	
 
    	
·
    	
PCI and Customer shall review and approve method   validation protocol,
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
 
    	
 
    	
·
    	
PCI shall execute method validation protocol,
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
 
    	
 
    	
·
    	
PCI shall write method validation report, and
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
 
    	
 
    	
·
    	
PCI and Customer shall review and approve method   validation report.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
10.08
    	
 
    	
For process   validation:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
PCI shall write process validation protocol,
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
 
    	
 
    	
·
    	
PCI and Customer shall review and approve process   validation protocol,
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
 
    	
 
    	
·
    	
PCI shall execute process validation protocol,
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
 
    	
 
    	
·
    	
PCI shall write process validation report, and
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
 
    	
 
    	
·
    	
PCI and Customer shall review and approve validation   reports.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
10.09
    	
 
    	
Validate/qualify primary packaging processes unless   otherwise agreed by Customer.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
10.10
    	
 
    	
Evaluate protocol deviations encountered during   validation/qualification to determine impact on validation/qualification   studies, including need to conduct repeat studies.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
10.11
    	
 
    	
Evaluate validated/qualified systems and processes   periodically to verify they are still operating in a valid manner.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
K.
    	
 
    	
Preventative Maintenance and Calibration
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
11.01
    	
 
    	
Maintain calibration and preventive maintenance   procedures and schedules for equipment/instruments using in the packaging,   testing and validation/qualification of the Product.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
11.02
    	
 
    	
Document and review (including calibration performed   by Sub-Contractor) packaging and laboratory equipment/instrumentation   calibration data and provide to Customer upon request.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
L.
    	
 
    	
Investigations
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
12.01
    	
 
    	
Have appropriate procedures for the identification,   investigation, reporting, tracking, trending and closure of deviations.   Deviations include but are not limited to known lab errors, atypical results   and Out-of-Specification results that occur during the packaging and testing   of the Product, including stability testing (as applicable) This
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    

 

 

	
§
    	
 
    	
Responsibilities
    	
 
    	
N
    	
 
    	
C
    	
 
    	
S
    
	
 
    	
 
    	
applies to Critical Defects or any deviation that   results in the failure of a lot.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
12.02
    	
 
    	
Document and notify Customer of any critical   deviation affecting the quality of the Product within [**] of identification.   Non-critical deviation notification shall be sent with the batch record   documentation.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
12.03
    	
 
    	
Notify Customer within [**] of first knowledge of   all Out-of-Specification results generated during stability testing of   Product.
    	
 
    	
X
    	
 
    	
 
    	
 
    	
 
    
	
12.04
    	
 
    	
Provide investigation documentation to Customer upon   request.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
12.05
    	
 
    	
Assist PCI in investigations when Customer deems   appropriate.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    
	
12.06
    	
 
    	
Complete investigations within [**] of commencement.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
12.07
    	
 
    	
Complete corrective action commitments resulting   from investigation closure within the planned timeframe.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
M.
    	
 
    	
Documentation and Records
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
13.01
    	
 
    	
Document all required process and testing steps at   the time such process or testing step is executed.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
13.02
    	
 
    	
Have a controlled system to initiate, review,   revise, approve, obsolete and archive all Good Manufacturing Practices   documentation. System should address revising documents based on requested   document changes provided by Customer (such as test methods and   specifications).
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
13.03
    	
 
    	
PCI’s quality unit must review and approve all Good   Manufacturing Practices records.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
13.04
    	
 
    	
Retain, archive and destroy all Good Manufacturing   Practices documents and data pertaining to services performed for Customer in   accordance with regulatory requirements as defined below:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
 
    	
 
    	
·
    	
Keep all manufacturing history records, including   batch documentation, validation protocols, validation summaries, charts,   computer reports and graphs for a period of [**], or one year past expiration   date, whichever is longer.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Keep original investigation and out of specification   report documentation for [**].
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Keep original complaint investigation documentation for   [**].
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Keep records of adverse experiences and complaints   for [**].
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Keep calibration records for [**], or [**] past the   expiration date, whichever is longer.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Keep electronic documentation for [**].
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Notify Customer prior to destruction of records and   ensure that original records are protected from fire and water damage in a   limited access area.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
13.05
    	
 
    	
Review and approve Master Batch Records. PCI may   make minor changes that do not have regulatory impact, such as, amending   typographical errors without obtaining Customer approval.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
13.06
    	
 
    	
Have all executed batch related records reviewed and   approved by PCI’s quality unit prior to batch release.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    

 

 

	
§
    	
 
    	
Responsibilities
    	
 
    	
N
    	
 
    	
C
    	
 
    	
S
    
	
13.07
    	
 
    	
Determine/approve the package Lot Number and   Expiration Date and forward to PCI. PCI is not responsible for approving lot   and expiration dates.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    
	
13.08
    	
 
    	
Assure packaging records have a unique   identification number.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
13.09
    	
 
    	
For laboratory control records, include complete   data derived from all tests conducted to ensure compliance with   specifications. These records will contain the date and the signature of a   second qualified person showing review and verification of the records.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
13.10
    	
 
    	
Provide copies of documents or records to Customer   upon request.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
13.11
    	
 
    	
Maintain a document control system for   specifications, including: Product labeling, packaging materials and other   materials that would likely affect Product quality.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
13.12
    	
 
    	
Maintain a document control system for Standard   Operating Procedures.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
13.13
    	
 
    	
Maintain a document control system for   specifications of reagents, solutions and laboratory standards, as   appropriate.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
13.14
    	
 
    	
Provide a complete Certificate of Compliance for the   Product, containing at minimum the following information:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
 
    	
 
    	
·
    	
Product number
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Customer Product number (if applicable)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Lot number
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Name of Product
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Expiration date (if applicable)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Disposition
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Quality Assurance approval and date
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
13.15
    	
 
    	
Provide a document certifying Product was packaged   in a current Good Manufacturing Practices compliant facility and was tested   in accordance with and meets specifications.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
N.
    	
 
    	
Annual Product Reviews
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
14.01
    	
 
    	
Have procedures to conduct and document annual   product reviews on a scheduled basis as agreed to by Customer.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
14.02
    	
 
    	
Prepare Annual Product Review that includes at a   minimum;
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
 
    	
 
    	
·
    	
Date of review
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Signatures/title of the reviewers
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Product identification
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Review period
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Batch records (including reworks, rejected, etc)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Applicable change control records
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Recalls, Returned or salvage Product records
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Product investigation records
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Batch record deviations (holds, exception   reports, etc.)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Complaints
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Results of Stability monitoring (if applicable)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Retain samples (if applicable)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Validation summary
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
											

 

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
§
    	
 
    	
Responsibilities
    	
 
    	
N
    	
 
    	
C
    	
 
    	
S
    
	
 
    	
 
    	
·
    	
Starting materials
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Qualification status of Equipment and Facilities
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Quality Agreement
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Executive Summary
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Document evaluations or assessments of the   information presented
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Packaged Product review will be conducted by   Customer
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
14.03
    	
 
    	
Provide copies of Annual Product Review to Customer.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
O.
    	
 
    	
Annual Product Report (if applicable)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
15.01
    	
 
    	
If additional data is needed beyond the Annual   Product Review, provide data to Customer necessary for the submission of   Annual Product Reports by mutually agreed upon date.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
15.02
    	
 
    	
Submit data in a mutually agreed to format to   customer.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
15.03
    	
 
    	
Submit Annual Product Report to regulatory   authority.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    
	
P.
    	
 
    	
Production and In Process Controls, Packaging   and Labeling
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
16.01
    	
 
    	
Have approved written procedures in place for   qualification (including audits) of suppliers that provide GMP-materials and   services.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
16.02
    	
 
    	
Make no changes in the sourcing of primary   production materials (packaging materials, processing aids) from the approved   supplier list without prior written consent from Customer.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
16.03
    	
 
    	
PCI may select and / change vendors of unprinted   secondary and tertiary packaging components without Customer approval.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
16.04
    	
 
    	
Implement and document specifications for packaging   materials, and Product labeling and processing aids that would likely affect Product   quality pursuant to specification documentation provided by Customer.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
16.05
    	
 
    	
Maintain a Vendor Qualification Program in order to   establish ongoing inspection and testing requirements for packaging materials   received at PCI, including reduced testing for certified vendors.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
16.06
    	
 
    	
Customer is responsible for management and audit of   Customer mandated / selected vendors that are not on PCI’s current approved   vendor list.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    
	
16.07
    	
 
    	
If I.D. testing is required, ID by IR testing will   be completed on primary closure components annually to verify identity and   confirm the vendor’s certification.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
16.08
    	
 
    	
If samples are required by Customer for component   release, the samples will be sent directly to Customer or Customer’s designated   location from the vendor. Customer will use the vendor lot number / purchase   order to release components.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    
	
16.09
    	
 
    	
Have approved written procedures for all required   in-process sampling and testing.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
16.10
    	
 
    	
Procure, test (as required), and disposition   components, packaging and labeling used in packaging of Product.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    

 

 

	
§
    	
 
    	
Responsibilities
    	
 
    	
N
    	
 
    	
C
    	
 
    	
S
    
	
16.11
    	
 
    	
Document actual yields for the Product, and evaluate   actual yields versus theoretical or in-process yield control limits as agreed   to in the master batch record.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
16.12
    	
 
    	
No penicillin or cephalosporin products are allowed   to be packaged in the same facility as Products covered by this Quality   Agreement.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
16.13
    	
 
    	
Provide Product expiration date for each packaged   batch to PCI for assigning Product expiry dates.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    
	
16.14
    	
 
    	
Include on shipper label:
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
 
    	
 
    	
·
    	
name and address of the manufacturer/Customer (if   applicable),
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
batch number,
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
quantity,
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
storage and special transport conditions as   specified by Customer (if applicable),
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
expiry date (if applicable), and
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
any special requirements (if applicable).
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
16.15
    	
 
    	
Develop all labeling in accordance with applicable   regulation (including for the country intended for distribution) and Product   license.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
16.16
    	
 
    	
Have all Product labeling approved by Customer prior   to use.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
16.17
    	
 
    	
Include a representative label in the batch record.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
16.18
    	
 
    	
Establish and maintain a program for environmental   monitoring including tracking and trending processes.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
16.19
    	
 
    	
Retain reserve samples of packaging materials and   Product label, intermediates (if applicable) and final Product in accordance   with PCI’s written procedures. These are for PCI to use during complaint   investigations/internal investigations.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
16.20
    	
 
    	
Retain legal/retention samples of packaging   materials and Product label, intermediates (if applicable) and final Product.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    
	
Q.
    	
 
    	
Process Equipment
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
17.01
    	
 
    	
Process equipment must be uniquely identified, and   managed with an equipment history log or equivalent system. Process lines   will be appropriately identified.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
17.02
    	
 
    	
Use appropriate food grade machine lubricants and   oils that contain no animal derived materials for items that are in direct   contact with product or primary packaging components.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
17.03
    	
 
    	
Maintain a current set of “as-built” drawings for   equipment and facilities.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
R.
    	
 
    	
Reprocess
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
18.01
    	
 
    	
Approve or disapprove all reprocessing steps.   Document approval in specific reprocessing protocols or special batch record   instructions. Reprocessing is defined as a repetition of a step (for example,   redrying, remilling) using the same equipment and techniques as specified in   the original procedure. In addition, an extension of an approved process step   is also regarded as reprocessing.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    

 

 

	
§
    	
 
    	
Responsibilities
    	
 
    	
N
    	
 
    	
C
    	
 
    	
S
    
	
18.02
    	
 
    	
Perform reprocessing only where specified in   protocol or specific batch record instructions approved by Customer.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
S.
    	
 
    	
Rework
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
19.01
    	
 
    	
Have a protocol or procedure that has been approved   by both Customer and PCI for Product requiring rework describing the   rationale and justification for the rework processes. Rework is a   manufacturing step involving a technique or technology that is not part of   the approved process sequence.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
19.02
    	
 
    	
Approve or disapprove Product requiring rework.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    
	
T.
    	
 
    	
Laboratory Controls
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
20.01
    	
 
    	
Have written procedures for sample management,   identification, testing, disposition and recording, approval, tracking,   storage, retention and disposal of laboratory data.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
20.02
    	
 
    	
Hold samples and dispose of as required by   specifications and procedures.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
20.03
    	
 
    	
Destroy samples and sample packaging in a secure and   legal manner that prevents unauthorized use or diversion in accordance with   PCI’s procedures. Maintain destruction records.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
20.04
    	
 
    	
Have approved written procedures and document the preparation   and use of reference standards, reference materials, reagents, and solutions   including qualification/requalification of use period.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
20.05
    	
 
    	
Mutually agree on source, grade and characterization   of reference standards/materials.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
20.06
    	
 
    	
Have appropriate specifications and test procedures   for the Product, which are consistent with the applicable, approved filing   and/or compendia monograph.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
20.07
    	
 
    	
Test Product in accordance with qualified or   validated methods as appropriate and with specifications using calibrated,   qualified equipment.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
20.08
    	
 
    	
Verify compendia test methods (i.e. USP, EP, BP,   JP). Supply a certificate of equivalency or verification report to Customer,   if applicable. Follow approved change to test procedures for changing test   methods.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
20.09
    	
 
    	
Transfer all test methods validated by Customer   according to protocols approved by PCI and Customer.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
20.10
    	
 
    	
Ensure method transfers have been completed and   approved prior to the generation of any GMP test data.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
U.
    	
 
    	
Retest
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
21.01
    	
 
    	
Have prior written consent from Customer Quality   Assurance Unit for retesting the Product (excluding routine stability   testing).
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
21.02
    	
 
    	
Perform retesting in accordance with approved   protocols or procedures.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
V.
    	
 
    	
Stability (if applicable to service being   provided)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
22.01
    	
 
    	
Maintain a documented, ongoing stability program to   monitor the stability of the Product using stability indicating procedures.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    

 

 

	
§
    	
 
    	
Responsibilities
    	
 
    	
N
    	
 
    	
C
    	
 
    	
S
    
	
22.02
    	
 
    	
Store stability samples in market containers under   International Conference on Harmonization storage conditions.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
22.03
    	
 
    	
Write and review stability protocol and reports.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
22.04
    	
 
    	
Approve stability protocols prior to executing   stability studies.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
22.05
    	
 
    	
Execute stability studies.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
22.06
    	
 
    	
Approve stability reports.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
22.07
    	
 
    	
Provide approved stability protocols and stability   reports to Customer.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
22.08
    	
 
    	
Assign and approve appropriateness of storage   conditions and retest or expiry date base on stability data.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
22.09
    	
 
    	
Place the first three commercial production batches   and at least one batch per year on stability or as required by applicable   regulatory agencies.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
22.10
    	
 
    	
Perform stability testing of reworked/reprocessed   batches or those associated with investigations or   revalidations/requalifications as required by Customer.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
W.
    	
 
    	
Storage and Distribution
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
23.01
    	
 
    	
Validate/qualify and maintain storage facilities   appropriate for conditions specified on the Product label. Maintain records   of any critical parameters.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
23.02
    	
 
    	
Establish and maintain an environmental monitoring   program including trending activities to assure adherence to specified Product,   packaging material and component storage conditions (such as temperature and   humidity).
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
23.03
    	
 
    	
Have validated/qualified systems for controlling   quarantined, rejected or recalled materials and segregate rejected or   recalled materials.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
23.04
    	
 
    	
Provide Product Material Safety Data Sheet or   equivalent.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    
	
23.05
    	
 
    	
Ship Product in accordance with qualified   transportation requirements. Customer to communicate special transportation   and temperature/humidity requirements to PCI.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
23.06
    	
 
    	
Identify the shipping configuration and the type of   packaging in the Quality Agreement addendum or approved Batch Record or   Shipping/Distribution Specification.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
23.07
    	
 
    	
In the event of an environmental excursion-affecting   Product, notify Customer within [**] and make subsequent investigation   available to Customer upon request.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
23.08
    	
 
    	
Have a system in place for assuring unreleased   Product is not shipped unless authorized by Customer quality unit.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
23.10
    	
 
    	
Have a system to ensure that only heat treated   pallets which are not chemically treated and are compliant with International   Plant Protection Convention requirements are used.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
X.
    	
 
    	
Control, Disposal and Destruction of Production   Materials
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
24.01
    	
 
    	
Have a procedure for the access, control,   reconciliation, disposition, disposal, and destruction of production   materials proprietary to
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    

 

 

	
§
    	
 
    	
Responsibilities
    	
 
    	
N
    	
 
    	
C
    	
 
    	
S
    
	
 
    	
 
    	
Customer or bearing Customer proprietary information   used in the Product packaging and labeling that include but is not limited   to:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Tooling, dies, printing rolls, plates and associated   drawings used in the packaging of Product.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·
    	
Printed components and materials used to print such   component, including but not limited to: printed components, containers,   closures, tools, dies, plates, drawings and artwork including all electronic   files.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
24.02
    	
 
    	
Dispose and destroy scrap production materials in a   secure and legal manner that prevents unauthorized use or diversion in   compliance with environment regulations. Maintain destruction records.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
 
    	
 
    	
·
    	
PCI shall have automatic approval to proceed with   destruction once the lot has been approved for shipment.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
24.03
    	
 
    	
Customer shall work with PCI to resolve any   nonconforming customer material disposition within [**]. After [**], PCI   shall have automatic approval to dispose or return nonconforming material to   Customer
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
Y.
    	
 
    	
Complaints
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
25.01
    	
 
    	
Have written procedures in place to document,   investigate, and manage all product quality related complaints.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
25.02
    	
 
    	
Customer shall notify PCI of Product complaints   received by Customer that impact quality, purity, safety and effectiveness of   distributed Product that are likely to result in a field alert and/or recall.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    
	
25.03
    	
 
    	
PCI shall conduct and complete complaint   investigation.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
25.04
    	
 
    	
PCI shall provide final investigation report to   Customer within [**]. Complaints related to death, injury, or safety hazard   are reviewed within [**]. Medical adverse complaints must be reviewed with   [**].
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
25.05
    	
 
    	
PCI shall retain complaint investigation records and   evaluate trends and severity.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
25.06
    	
 
    	
PCI shall implement corrective actions associated   with the packaging of Product, as applicable.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
Z.
    	
 
    	
Field Alerts and Recalls
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
26.01
    	
 
    	
Have written procedures in place to document,   investigate, and manage field alerts and recalls.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
X
    
	
26.02
    	
 
    	
Customer shall advise PCI in writing of any defect   for which Customer would likely implement either a field alert or recall in   the event that a single defective unit was found in the field.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    
	
26.03
    	
 
    	
PCI shall implement an investigation to assess if   proper controls are in place to prevent such a single occurrence from   reaching the field.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
26.04
    	
 
    	
Customer shall have approved procedures for issuing   field alerts and recall that address the decision making process,   correspondence with regulatory agencies, management of recalls, and   reconciliation of returned Product.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    

 

 

	
§
    	
 
    	
Responsibilities
    	
 
    	
N
    	
 
    	
C
    	
 
    	
S
    
	
26.05
    	
 
    	
Customer shall facilitate the process for   determining the need to issue field alerts or recalls.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    
	
26.06
    	
 
    	
PCI shall participate in the investigation to make   the decision to issue field alerts or recalls.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
26.07
    	
 
    	
PCI shall review correspondence for submission to   regulatory agency.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
X
    
	
26.08
    	
 
    	
Customer shall issue correspondence to regulatory   agencies.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    
	
26.09
    	
 
    	
Customer shall manage recall and reconciliation of   returned Product.
    	
 
    	
 
    	
 
    	
X
    	
 
    	
 
    

 

 

11.          Contacts and Responsibilities

 

	
 
    	
 
    	
PCI
    	
 
    	
Customer
    
	
 
    	
 
    	
Quality
    	
 
    	
Quality
    
	
Name
    	
 
    	
[**]
    	
 
    	
[**]
    
	
Title
    	
 
    	
[**]
    	
 
    	
[**]
    
	
Phone/Fax
    	
 
    	
[**]
    	
 
    	
[**]
    
	
Address  (mail/delivery)
    	
 
    	
[**]
    	
 
    	
[**]
    
	
Electronic
    	
 
    	
[**]
    	
 
    	
[**]
    
	
 
    	
 
    	
Quality
    	
 
    	
Quality
    
	
Name
    	
 
    	
[**]
    	
 
    	
N
    
	
Title
    	
 
    	
[**]
    	
 
    	
 
    
	
Phone/Fax
    	
 
    	
[**]
    	
 
    	
 
    
	
Address  (mail/delivery)
    	
 
    	
[**]
    	
 
    	
 
    
	
Electronic
    	
 
    	
[**]
    	
 
    	
A
    

 

 

	
 
    	
 
    	
PCI
    	
 
    	
Customer
    
	
 
    	
 
    	
Quality   Assurance
    	
 
    	
Quality
    
	
Name
    	
 
    	
[**]
    	
 
    	
N
    
	
Title
    	
 
    	
[**]
    	
 
    	
 
    
	
Phone/Fax
    	
 
    	
[**]
    	
 
    	
 
    
	
Address (mail/delivery)
    	
 
    	
[**]
    	
 
    	
 
    
	
Electronic
    	
 
    	
[**]
    	
 
    	
A
    
	
 
    	
 
    	
Regulatory   Affairs
    	
 
    	
Regulatory   Affairs
    
	
Name
    	
 
    	
[**]
    	
 
    	
[**]
    
	
Title
    	
 
    	
[**]
    	
 
    	
[**]
    
	
Phone/Fax
    	
 
    	
[**]
    	
 
    	
[**]
    
	
Address (mail/delivery)
    	
 
    	
[**][**]
    	
 
    	
[**]
    
	
Electronic
    	
 
    	
[**]
    	
 
    	
[**]
    

 

 

IN WITNESS WHEREOF, Customer and PCI have executed this Agreement on the date last set forth below.

 

	
CUSTOMER   NAME INSERTED HERE
    	
 
    	
ANDERSONBRECON INC., AN ILLINOIS
    
	
 
    	
 
    	
CORPORATION DBA “PCI OF ILLINOIS”
    
	
 
    	
 
    	
 
    
	
/s/   Kristina Ouimet Haeckl
    	
 
    	
/s/   Brad Disch
    
	
(Signature)
    	
 
    	
(Signature)
    
	
 
    	
 
    	
 
    
	
Kristina   Ouimet Haeckl
    	
 
    	
Brad   Disch
    
	
(Print   Name)
    	
 
    	
(Print   Name)
    
	
 
    	
 
    	
 
    
	
VP   Regulatory Affairs & Quality Systems
    	
 
    	
Director   of Quality Assurance
    
	
(Title)
    	
 
    	
(Title)
    
	
 
    	
 
    	
 
    
	
Signed   the    day of     in the year        .
    	
 
    	
Signed   the 18th day of June in the year 2018.
    

 

 

APPENDIX 1: (Definition of Product)

 

“Product” shall mean the following:

 

Fosfomycin for Injection

 

	
CUSTOMER   NAME INSERTED HERE
    	
 
    	
ANDERSONBRECON INC., AN ILLINOIS
    
	
 
    	
 
    	
CORPORATION DBA “PCI OF ILLINOIS”
    
	
 
    	
 
    	
 
    
	
/s/   Kristina Ouimet Haeckl
    	
 
    	
/s/   Brad Disch
    
	
(Signature)
    	
 
    	
(Signature)
    
	
 
    	
 
    	
 
    
	
Kristina   Ouimet Haeckl
    	
 
    	
Brad   Disch
    
	
(Print   Name)
    	
 
    	
(Print   Name)
    
	
 
    	
 
    	
 
    
	
VP   Regulatory Affairs & Quality Systems
    	
 
    	
Director   of Quality Assurance
    
	
(Title)
    	
 
    	
(Title)
    
	
 
    	
 
    	
 
    
	
Signed   the    day of     in the year        .
    	
 
    	
Signed   the 18th day of June in the year 2018.
    

 

 

APPENDIX 2: (Temperature & Humidity Requirements of the product)

 

	
Product
    	
 
    	
Area
    	
 
    	
Temperature
   Control Range
    	
 
    	
Humidity
    	
 
    	
Excursions
    
	
 
    	
 
    	
Primary Production
    	
 
    	
[**]
    	
 
    	
N/A
    	
 
    	
N/A
    
	
 
    	
 
    	
Secondary Production
    	
 
    	
[**]
    	
 
    	
N/A
    	
 
    	
N/A
    
	
 
    	
 
    	
Storage (Warehouse)
    	
 
    	
[**]
    	
 
    	
[**]
    	
 
    	
[**]
    
	
 
    	
 
    	
Storage (Cooler)
    	
 
    	
[**]
    	
 
    	
 
    	
 
    	
[**]
    

 

Excursions are allowed per PCI procedure 00SOP303 - Packaging Room, Warehouse, Coolers, Freezers, an Finished Goods Area Temperature and Relative Humidity

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00288-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00288-of-00352.parquet"}]]