Document:

EXHIBIT 4.8

 

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST.  REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

DATED 23 December 2014

 

COPACKER SUPPLY AGREEMENT

BETWEEN

 

(1)  RECKITT BENCKISER HEALTHCARE (UK) LIMITED (“Supplier”)

 

AND

 

(2)  RB PHARMACEUTICALS LIMITED (“Buyer”)

 

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THIS AGREEMENT is made on 23 December 2014

 

BETWEEN:

 

(1)                                 Reckitt Benckiser Healthcare (UK) Limited incorporated and registered in England and Wales with company number 261312 whose registered office is at 103-105 Bath Road, Slough, Berkshire, SL1 3UH, United Kingdom (Supplier).

 

AND

 

(2)                                 RB Pharmaceuticals Limited incorporated and registered in England and Wales with company number 7183451 whose registered office is at 103-105 Bath Road, Slough, Berkshire, SL1 3UH, United Kingdom (Buyer).

 

WHEREAS the Buyer wishes to engage the Supplier to manufacture and supply the Products (as defined below) on the terms of this Agreement and the Supplier wishes to manufacture and supply the Products to the Buyer on the terms of this Agreement.

 

IT IS AGREED as follows:

 

1.                                      DEFINITIONS

 

1.1.                            In this Agreement the following definitions shall apply, unless the context requires otherwise:

 

“Active Pharmaceutical Ingredient” or “API” means, with respect to a Product, any substance or mixture of substances intended to be used in the manufacture of a drug (medicinal) product and that, when used in the production of a drug, becomes an active ingredient of the drug product.

 

“Actual Order Volume” has the meaning set out in paragraph 4 in Schedule One.

 

“Affected Party” has the meaning set out in clause 18.1.

 

“Affiliate” means in relation to a company, any entity Controlled by that company or any entity which Controls that company or any entity which is Controlled by another entity, which also Controls that company whether such Control is direct or indirect. “Supplier’s Affiliates” and “Buyer’s Affiliates” shall be construed accordingly in relation to the Supplier and the Buyer respectively.

 

“Agreement” means this agreement.

 

“Amended Supply Agreement” means the supply agreement between the parties dated 23 July 2012, as updated and amended from time to time.

 

“API Specification” has the meaning set out in Schedule Eleven.

 

“Arising Product Intellectual Property Rights” means such Intellectual Property Rights as are developed or created during the conduct of, and as a result of, the work undertaken under this Agreement and which relate exclusively to any Product (including without limitation its manufacture and/or use) (excluding, for the avoidance of doubt, any Existing Intellectual Property Rights).

 

“Arising Supplier Intellectual Property Rights” means such Intellectual Property Rights as are developed or created by the Supplier (or any agent or authorised sub-contractor of it), whether with or without third parties arising as a consequence of a change in relation to manufacture of the Products made under clauses 8.6 to 8.10 and which do not relate exclusively to any Product (for the avoidance of doubt, (i) including without limitation any manufacturing Intellectual Property Rights (excluding any trade marks and rights in passing off) of applicability to manufacturing generally, and (ii) excluding any Existing Intellectual Property Rights).

 

“Asset Purchase Agreement” means the asset purchase agreement between the parties dated 23 May 2012.

 

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“Assumed API Costs” has the meaning set out in paragraph 1(2) in Schedule One.

 

“Budget Order Volume” has the meaning set out in paragraph 2 in Schedule One.

 

“Business Continuity Plan”/the “BCP Plan” has the meaning set out in clause 19.1.

 

“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for business in London, UK.

 

“Buyer lndemnitees” has the meaning set out in clause 11.2.

 

“CAPA” means a corrective and preventative action taken pursuant to applicable quality procedures.

 

“cGMP” means all applicable standards for good manufacturing practices as promulgated under applicable laws, including (a) Directive 2001/83/EC, 2003/94/EC and any applicable guidance on good manufacturing practices adopted pursuant to Article 47 of Directive 2001/83/EC, in particular relevant guidance on good manufacturing practices contained in the Rules Governing Medicinal Products in the European Union, Volume IV Good Manufacturing Practice for Medicinal Products, the principles detailed in the ICH Q7A guidelines; and (b) U.S. Good Manufacturing Practice regulations promulgated by the U.S. Food and Drug Administration including 21 CFR Part 210 and 211, in each case as amended from time to time.

 

“Certificate of Analysis” means the certificate of analysis contemplated by the Technical Agreement. “Change Plan” has the meaning set out in clause 8.6.

 

“Change in Specification” has the meaning set out in clause 8.8.1.1.

 

“Commencement Date” has the meaning set out in clause 2.3. “Confidential Information” means:

 

(A)                               information concerning the existence of this Agreement and the fact that the Supplier is manufacturing the Products (as hereinafter defined) for the Buyer;

 

and

 

(B)                               information related to Arising Product Intellectual Property Rights, Arising Supplier Intellectual Property Rights, Existing Intellectual Property Rights, the Specifications and Technical Manual (all as defined herein), know how, and data and information of a technical, operational, administrative, financial or business nature, whether oral or in some tangible form, such as in documents, papers, drawings, diagrams, discs, articles, samples, prototypes or otherwise, in each case that is disclosed (intentionally or unintentionally) by one party or their Affiliates to the other party or its Affiliates.

 

Without limiting the foregoing, the Confidential Information of the Buyer includes all Manufacturing IPR as defined in the Asset Purchase Agreement, the Specifications and the Technical Manual.

 

“Control” means, in relation to a company, the ability of a person to ensure that the activities and business of that company are conducted in accordance with the wishes of that person, and a person shall be deemed to have Control of a company if it possesses or is entitled to acquire 50% or more of the shares carrying votes exercisable at a general meeting (or its equivalent) of the particular company if such company is a corporation issuing voting shares or the right to receive the majority of the income of that company on any distribution by it of all of its income or the majority of its assets on a winding up. “Controlled” shall be construed accordingly.

 

“Delivery Point” means the Buyer’s specified point for delivery at either (i) [***], or (ii) [***], or (iii) such other UK delivery address as specified by the Buyer from time to time.

 

“Demerger Agreement” means the demerger agreement to be entered into between Reckitt Benckiser Group plc and lndivior plc on or around 17 November 2014.

 

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“Direct Manufacturing Costs” means costs which are directly attributed to the manufacture of the Products, as set out in the “direct costs” section of the FOS.

 

“EMA” means the European Medicines Agency or any successor entity thereto.

 

“Emergency Trigger Level” means an OTIF performance level of [***] per cent.

 

“Escalation Notice” has the meaning set out in clause 20.1.

 

“Excess Supply” has the meaning set out in clause 5.4.

 

“Existing Intellectual Property Rights” means any Intellectual Property Rights owned by or licensed to the Buyer or the Supplier (as applicable) or their Affiliates (i) prior to the date of this Agreement or {ii) that is created or resulting during the term of this Agreement otherwise than under or pursuant to this Agreement. (“Supplier’s Existing Intellectual Property Rights” and “Buyer’s Existing Intellectual Property Rights” shall be construed accordingly in relation to the Supplier and the Buyer respectively).

 

“Existing Tooling” means the Tooling which, as at the date of this Agreement, is owned by the Buyer, as indicated in Schedule Seven.

 

“FCP Lease” means the lease of the fine chemical plant, land and buildings on Dansom Lane, Hull, HUB 7DS dated on or around 1 December 2014 entered into by the parties.

 

“FDA” means the United States Food and Drug Administration and any successor agency thereto.

 

“Force Majeure Event” has the meaning set out in clause 18.1.

 

“FOS” means the factory operating statement as agreed between the parties from time to time each year (the initial version of which is set out at Appendix 1 to Schedule One).

 

“ILCH” means the Index of Labour Costs per Hour released by the Office for National Statistics;

 

“Indirect Manufacturing Costs” means costs which are indirectly attributed to the manufacture of the Products, as set out in the “indirect costs” section of the FOS.

 

“Indirect Manufacturing Cost Product Allocation” has the meaning set out in paragraph 2 in Schedule One.

 

“Intellectual Property Rights” means patents, applications for patents, utility models, applications for utility models, trade marks or applications for trade marks or trading names (whether or not registered or registrable), rights in know how (including trade secrets, technology, methods of manufacture and specifications), designs (registered or unregistered and including applications for registered designs), copyright (including rights in computer software), topography rights and other rights in semiconductor chips, rights in inventions, the right to claim damages for past infringements of any or all such rights and all rights having equivalent or similar effect wherever situated.

 

“Key Performance Indicators” /”KPls” means those target performance levels as set out in Schedule Five or otherwise agreed between the parties in writing from time to time.

 

“Manufacturing Costs” has the meaning set out in paragraph 1(1) in Schedule One.

 

“Manufacturing Site” means the Supplier’s site of manufacture of Products as specified in the Supplier’s manufacturing licence and controlled substance licence in respect of such Products.

 

“Material OTIF Failure” has the meaning set out in clause 14.3.2. “Optional Restricted Period” has the meaning set out in clause 3.6.1.2. “Order” has the meaning set out in clause 5.1.1.

 

“Order Requirements” means each Order shall, for each SKU of Products, have a minimum order quantity of one (1) pallet, and be in multiples of whole pallets.

 

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“OTIF” means, in relation to delivery of Products, on time in full.

 

“Pallet Policy” shall be construed in accordance with clause 5.7.

 

“Plant Day” shall have the meaning set out in the Demerger Agreement.

 

“Premises” has the meaning set out in the FCP Lease.

 

“Price” means the prices (described by reference to skus) specified in the price list attached to the FOS to be charged by the Supplier to the Buyer in respect of any Products supplied pursuant to this Agreement.

 

“Proceeding” means any judicial, administrative or adversarial proceeding (public or private), any action, claim, lawsuit, litigation, arbitration or mediation, any hearing, investigation, probe or inquiry by any governmental authority, or any other dispute, in each case initiated by a third party (including any governmental authority).

 

“Products” means those products listed in Schedule Two or as otherwise agreed by the parties in writing, together with such additional, improved, modified or replacement products as shall be agreed between the parties from time to time as are manufactured by the Supplier and for supply to the Buyer under this Agreement and wherever “Products” is referred to in this Agreement it shall refer to the relevant Products or all Products as the case may be, as listed in Schedule Two.

 

“Product Field” has the meaning set out in clause 13.7.

 

“Product Forecast” has the meaning set out in clause 5.1.

 

“Protected Person” has the meaning set out in clause 3.6.3.

 

“Purchase Terms” has the meaning set out in clause 6.6

 

“Raw Materials” means, on a Product by Product basis, such raw materials and components as are used to manufacture such Product, including without limitation all packaging components but excluding API.

 

“Raw Materials Manufacturing Cost” means, with respect to a Product, the cost of all materials and components, excluding the API, which are directly used to manufacture and form an integral part of such Product.

 

“Rectification Plan” has the meaning set out in clause 14.3.2.2.

 

“Restricted Period” has the meaning set out in clause 3.6.1.1.

 

“Restricted Person” means:

 

(A)                               until any such time as Reckitt Benckiser Group plc becomes Controlled by a third party, each Supplier Affiliate; and

 

(B)                               from and including the date (if any) on which Reckitt Benckiser Group plc becomes Controlled by a third party, the body corporate (if different to the Supplier) that operates the Manufacturing Site, or possesses or has access to any information within limb (B) of the definition of Confidential Information with respect to the manufacture of one or more Products.

 

“Services” means those internal logistics and other services listed in Schedule Two or as otherwise agreed by the parties in writing in respect of each of the Products to be performed by the Supplier in respect of any of the Products as part of its obligations in supplying the relevant Products under this Agreement, including any Temporary Additional Services as required.

 

“SOP” means standard operating procedure;

 

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“Specifications” means each of the specifications for the Products as listed in the relevant Technical Manual and in Schedule Four signed for the purposes of identification by each party, as amended from time to time, and in accordance with which the Supplier shall manufacture and supply the Products.

 

“SKU” means stock keeping unit;

 

“Supplier lndemnitees” has the meaning set out in clause 11.1.

 

“Target OTIF Level” means an OTIF performance level of [***] per cent.

 

“Tax Authority” means any authority responsible for the collection or management of any tax.

 

“Technical Agreement” means the Technical Agreement entered into between the parties on or about the date of this Agreement, as such agreement shall be amended from time to time.

 

“Technical Manual” means the manual in respect of each of the Products containing the technical information for manufacture of the Products which is supplied by the Buyer to the Supplier and signed for the purposes of identification by each party along with any and all manufacturing policies of the Buyer which may be provided by the Buyer or its Affiliates to the Supplier from time to time.

 

“Technical Transfer” means those activities required to be performed by the Supplier in order to transfer the manufacture of the Products to an alternative supplier and manufacture batches up to and including process validation as further set out in clause 14.

 

“Temporary Additional Services” means those services as are set out in Schedule Three.

 

“Tooling” has the meaning set out in clause 6.6.

 

“Transferee” has the meaning set out in clause 2.2.

 

“VAT” means:

 

(A)                               within the European Union, any tax imposed by any Member State in conformity with the Directive of the Council of the European Union on the common system of value added tax (2006/112/EC); and

 

(B)                               outside the European Union, any tax corresponding to, or substantially similar to, the common system of value added tax referred to in paragraph (A) of this definition.

 

1.2.                            Unless otherwise indicated, references to clauses and schedules are references to clauses and schedules in this Agreement.

 

1.3.                            For the purpose of this Agreement, references to “manufacturing” a Product includes, without limitation, manufacturing, processing, formulating, packaging, finishing, filling, labelling, holding and quality control testing of such a Product, and “manufacture” shall be construed accordingly.

 

2.                                      TERM

 

2.1.                            This Agreement shall be effective from the Commencement Date and, subject to applicable laws and the provisions of clause 15 (Termination), shall have effect until seven (7) years following the Commencement Date unless terminated by either party giving the other not less than thirty-six (36) months written notice, such termination not to take effect earlier than the sixth anniversary of the Commencement Date.

 

2.2.                            If notice has been served under clause 2.1, at the request of the Buyer any time during the period of notice the Supplier shall promptly and efficiently undertake and complete a Technical Transfer in accordance with clause 14 to the Buyer or a third party identified by the

 

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Buyer (the Buyer or the third party (or both) being the “Transferee”) to enable the Transferee to establish and conduct cGMP manufacture of the Products.

 

2.3.                            The parties agree that this Agreement shall commence immediately upon Plant Day (the “Commencement Date”).

 

3.                                      SUPPLY OF PRODUCTS AND SERVICES

 

3.1.                            During the term of this Agreement, and subject to the terms of this Agreement the Supplier shall, at the Manufacturing Site:

 

3.1.1.                  manufacture and supply the Buyer’s requirements of the Products on an exclusive basis (save where such exclusivity is disapplied in accordance with the terms of this Agreement); and

 

3.1.2.                  supply or procure the supply of the Services.

 

3.2.                            Unless expressly authorised by the Supplier in writing, or as otherwise permitted by this Agreement, the Buyer shall not, directly or indirectly, (and shall procure that none of its Affiliates shall) during the term of this Agreement purchase (or directly or indirectly authorise the purchase of) for the purpose of commercial sale the Products or any product which might reasonably be considered to be the same Products produced by the Supplier from any person, firm or company other than the Supplier or an Affiliate of the Supplier.

 

3.3.                            The Buyer shall supply the API to the Supplier for the sole purpose of manufacturing the Products. If the Buyer is unable to supply the API to the Supplier, the Buyer may in its discretion arrange for an alternative source of API to be supplied to the Supplier and in such event the Supplier shall use all reasonable endeavours to qualify such alternative source as promptly as practicable, at the Buyer’s cost (as to expenses properly incurred). For the avoidance of doubt, the Supplier shall not be responsible for sourcing the API. The Supplier shall not be in breach of its obligations under this Agreement to manufacture Products to the extent such breach was caused by a failure of the Buyer’s obligations to supply quantities of API in accordance with this Agreement.

 

3.4.                            Unless and to the extent the Raw Materials are supplied by the Buyer to the Supplier as provided in this clause 3, the Supplier shall only obtain Raw Materials from sources approved in writing by the Buyer and shall ensure that such Raw Materials are of the requisite standard to comply with the Specification and any applicable laws, codes of practice and regulations, provided however the Buyer may at its sole discretion supply any Raw Materials required for the Products to the Supplier to be delivered to the Supplier’s manufacturing plant as agreed between the parties hereto. The said Raw Materials will be solely used by the Supplier for the Products. The Supplier shall incorporate the cost and agreed wastage level as charged by the Buyer with no further charge into the Price of the Products. The Buyer shall provide the Supplier with a Certificate of Analysis for all APls and any Raw Materials as may be supplied by the Buyer under this clause 3.

 

3.5.                            Unless otherwise agreed with the Buyer in writing or set out in this Agreement, the Supplier shall operate on a full service basis (meaning that the Supplier shall be responsible for the purchase of all Raw Materials, except for Raw Materials provided by the Buyer (if any), and the supply of the Products in finished form to the Buyer). The Buyer shall only be invoiced for the Price of finished Products inclusive of such costs and expenses.

 

3.6.                            Subject to clause 3.7, the Supplier (for itself and on behalf of each Restricted Person) covenants with the Buyer that it will not, without the prior written consent of the Buyer whether directly or indirectly and whether alone or in conjunction with or on behalf of any other person and whether as principal, shareholder, director, employee, agent, consultant, partner or otherwise:

 

3.6.1.                  during:

 

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3.6.1.1                         the term of this Agreement and the period of one (1) year thereafter (the “Restricted Period”); and

 

3.6.1.2                         at the Buyer’s option (which it may exercise in its sole discretion), a further one (1) year period from the end of the Restricted Period (the “Optional Restricted Period”),

 

canvass, solicit or approach, or cause to be canvassed, solicited or approached, any person for orders or deal with or contract with any person, who at any time during such period is or was:

 

3.6.1.2.1                         negotiating with the Buyer or any of its Affiliates for the supply by the Buyer or any of its Affiliates of one or more of the Products; or

 

3.6.1.2.2                         was an actual customer of the Buyer or any of its Affiliates for one or more of the Products,

 

where the above mentioned orders or contracts relate to products which are competitive with a Product supplied by the Supplier to the Buyer or any of its Affiliates at any time during such period;

 

3.6.2.                  during:

 

3.6.2.1                         the Restricted Period; and

 

3.6.2.2                         the Optional Restricted Period,

 

interfere, or seek to interfere, with the continuation of Raw Materials to the Buyer or any of its Affiliates from any supplier who has been supplying such Raw Materials to the Buyer or any of its Affiliates at any time during such period if such interference causes or would cause that supplier to cease supplying, or materially reduce its supply of those Raw Materials to the Buyer. For avoidance of doubt, if a third party supplier suffers a shortage of supply of Raw Materials which are used by the Supplier other than to manufacture any Products, then the Supplier’s negotiation with or attempts to obtain a supply of Raw Materials from such third party supplier under the terms of the Supplier’s agreed arrangements with such third party supplier shall not of itself constitute interference by the Supplier for the purpose of this clause.

 

3.6.3.                  during:

 

3.6.3.1                         the Restricted Period; and

 

3.6.3.2                         the Optional Restricted Period,

 

solicit or entice, or endeavour to solicit or entice, away from the Buyer or its Affiliates, any person employed in a managerial, supervisory, technical or sales capacity by, or who is or who was a consultant to, the Buyer or its Affiliates (each a “Protected Person”) at any time during such period unless such person responds to a bona fide recruitment advertisement or general solicitation that is not targeted at Protected Persons;

 

3.6.4.                  subject to clause 3.6.6, during:

 

3.6.4.1                         the Restricted Period; and

 

3.6.4.2                         the Optional Restricted Period,

 

engage in, or be concerned with, or interested in, any person that conducts a business competitive with all or a substantial part of the Products.

 

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3.6.5.                  subject to clause 3.6.6, during:

 

3.6.5.1                         the Restricted Period; and

 

3.6.5.2                         the Optional Restricted Period,

 

(A)                               whether alone or with, or for the benefit of any other person; or

 

(B)                               assist (including without limitation by way of granting a licence to or providing information to) any other person to,

 

research, develop, manufacture, market or sell in any manner any products that are competitive with, or could be competitive with, one or more of the Products that are manufactured by the Supplier or any Supplier Affiliate during such period; and

 

3.6.6.                  during the term of this Agreement, unless expressly authorised by the Buyer in writing, for the purpose of commercial sale during the term of this Agreement supply (or directly or indirectly authorise the manufacture or supply of) the Products or any product which might reasonably be considered to compete with the Products to any person, firm or company other than the Buyer or an Affiliate of the Buyer.

 

3.7.                            Clause 3.6 shall not apply to the extent that:

 

3.7.1.1                         the Supplier or any Restricted Person is the holder of securities in a company whose securities are listed on a recognised investment exchange (as defined in the Financial Services and Markets Acts 2000, as amended) and holds not more than five per cent (5%) of the votes which could normally be cast at a general meeting of that company; or

 

3.7.1.2                         the Supplier or any Restricted Person acquires an interest in an entity which is directly or indirectly interested in carrying on any business which competes with the business of the Buyer as it was carried out at the date of this Agreement but the acquisition is not made with the sole or main purpose of acquiring a business which so competes.

 

3.8.                            If the Buyer discontinues receiving a Product under this Agreement, then the reference in clause 3.6.1.1 to “term of this Agreement” shall be construed as a reference to the period commencing on the Commencement Date and ending on the date of delivery of the last order of the Product in question.

 

3.9.                            The Supplier shall (i) by the fifth day of each month, provide a written report to the Buyer on the Bellini usage/reconciliation in respect of the previous month to [***] (or any successor thereof); and (ii) each calendar quarter, provide a written report to the Buyer on the usage of sequential labels for Belgium to the Buyer’s regulatory affairs director for Western Europe (or such other person nominated by the Buyer from time to time), which reporting in each case ((i) and (ii)) shall be in accordance with any applicable SOP of the Supplier.

 

4.                                      INSPECTION TESTING AND SAMPLES DURING MANUFACTURE

 

4.1.                            Pursuant to the terms of any legislative or contractual rights or otherwise, the Buyer may reject or revoke acceptance of any Products which are defective or which do not comply with the Specifications or the provisions of this Agreement, other than as a result of a breach of the Buyer of this Agreement.

 

4.2.                            Subject to the last sentence of this clause 4.2, the Supplier shall supply the Buyer with such Health and Safety data sheets (MSDS) and other available information as shall detail the compliance of the Supplier with its manufacturing obligations under this Agreement and the condition necessary to ensure that the Products can be safely handled and used by Buyer’s personnel and by any subsequent purchaser or user thereof, for such purpose as shall have been notified to the Supplier in writing. The Buyer shall supply the Supplier with the foregoing

 

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in respect of any API or any Raw Materials supplied by the Buyer (if any) to the Supplier under this Agreement.

 

4.3.                            Buyer right of audit; records

 

4.3.1.                  The Supplier shall, if requested by the Buyer (a) upon reasonable prior notice, once per calendar year; (b) if the Buyer receives any notice from any regulatory authority of competent jurisdiction with respect to the manufacture or packaging of any Product, during the term of this Agreement and up to seven years after the last delivery of Products has been made by the Supplier to the Buyer; (c) in the event of a breach, or the Buyer’s reasonable suspicion of a breach of clause 9.1 or (d) following implementation by the Supplier of a CAPA in response to a previous audit or incident give the Buyer or its authorised representatives access (such access to be limited to during normal working hours unless immediate access is required under local law) to the Supplier’s premises (including without limitation the Manufacturing Site), Products, reference samples, manufacturing records and books (including without limitation records relating to manufacturing processes, work in progress, operating procedures, sampling records, testing and packaging procedures), in each case with respect to Products, for the purpose of auditing the Supplier’s quality control and procedures with respect to Products (such audit to be at the Buyer’s cost). The Supplier shall use reasonable endeavours to ensure that its employees, its Affiliates and their employees and its subcontractors cooperate with and provide reasonable assistance to the Buyer during such audit.

 

4.3.2.                  The Supplier shall retain manufacturing records and books (as referred to in clause 4.3.1) for seven (7) years after the last delivery of Products under this Agreement or as otherwise required under local laws. Such records and books shall, in so far as they are applicable, be maintained in accordance with applicable law and regulation. At the end of that period the Supplier shall notify the Buyer in writing and offer to transfer the relevant records and books to the Buyer for retention at the Buyer’s cost (as to reasonable expenses, properly incurred). If the Buyer does not notify the Supplier of its acceptance within two (2) months, then the Supplier can destroy such manufacturing records and books securely, in accordance with the Supplier’s normal document retention and destruction procedures.

 

4.4.                            Supplier right of audit; records

 

4.4.1.                  The Buyer shall, if requested by the Supplier (a) upon reasonable prior notice, once per calendar year; (b) if the Supplier receives any notice from any regulatory authority of competent jurisdiction with respect to the manufacture of API under this Agreement, during the term of this Agreement and up to seven years after the last delivery of API has been made by the Buyer to the Supplier; (c) in the event of a breach, or the Supplier’s reasonable suspicion of a breach of Schedule Eleven or (d) following implementation by the Buyer of a CAPA in response to a previous audit or incident give the Supplier or its authorised representatives access (such access to be limited to during normal working hours unless immediate access is required under local law) to the Buyer’s site of manufacture of API under this Agreement, reference samples, manufacturing records and books (including without limitation records relating to manufacturing processes, work in progress, operating procedures, sampling records, testing and packaging procedures), in each case with respect to API supplied by the Buyer to the Supplier under this Agreement, for the purpose of auditing the Buyer’s quality control and procedures with respect to API (such audit to be at the Supplier’s cost). The Buyer shall use reasonable endeavours to ensure that its employees, its Affiliates and their employees and its subcontractors cooperate with and provide reasonable assistance to the Supplier during such audit.

 

4.4.2.                  The Buyer shall retain manufacturing records and books (as referred to in clause 4.4.1) with respect to API supplied under this Agreement for seven (7) years after the last delivery of such API under this Agreement or as otherwise required under local laws. Such records and books shall, in so far as they are applicable, be maintained in

 

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accordance with applicable law and regulation. At the end of that period the Buyer shall notify the Supplier in writing and offer to transfer the relevant records and books to the Supplier for retention at the Supplier’s cost (as to reasonable expenses, properly incurred). If the Supplier does not notify the Buyer of its acceptance within two (2) months, then the Buyer can destroy such manufacturing records and books securely, in accordance with the Buyer’s normal document retention and destruction procedures.

 

5.                                      DELIVERY

 

5.1.                            Each week the Buyer may provide (or cause to be provided from its Affiliates) a rolling forecast of its requirements for the Products for the next twelve (12) months (a “Product Forecast”). The parties agree that:

 

5.1.1.                  the [***] of such forecast, on a rolling basis, shall be binding and as such in submitting each Product Forecast the Buyer or any of its Affiliates will issue to the Supplier a purchase order (“Order”) for the Products to be delivered to the Buyer as provided in clause 5.2, which Order shall constitute a firm order for Products and shall be binding on the Supplier. If the Buyer does not provide a Product Forecast each week, the projections for the Buyer’s requirements for the Products as set out in the most recent Product Forecast shall apply beyond the [***] until such time as the Buyer provides the Supplier with a revised Product Forecast;

 

5.1.2.                  the Supplier will also ensure that it will have on hand at its Manufacturing Site as of the date of receipt of each of the Buyer’s forecasts, sufficient Raw Materials and other materials necessary to manufacture the Buyer’s requirements for the Products as set out in the [***] of each such forecast, the parties agreeing that anything purchased by the Supplier against such [***] forecast (or purchased pursuant to clause 6.4) and subsequently not used shall be at the Buyer’s cost PROVIDED THAT this clause 5.1.2 shall not apply to the extent that the Buyer has agreed to supply to the Supplier any or all of the Raw Materials and the Buyer has failed to provide [***] stock of such Raw Materials; and

 

5.1.3.                  the Buyer shall ensure that, unless otherwise agreed with the Supplier, all Orders comply with the Order Requirements and the Buyer shall not order the same SKU of Products more than [***] in any consecutive [***] period.

 

5.2.                            Following receipt of an Order from the Buyer, the Supplier shall, at its own expense, deliver, or procure the delivery, of the Products DAP (lncoterms 2010) to the Delivery Point. In respect of all Orders, the Supplier shall deliver the Products to the Buyer at the time specified in the Order. With respect to given Products, delivery shall be effected on the last to occur of the following events: (i) such Products are physically delivered to the Delivery Point; (ii) such Products have been QP released in accordance with the Technical Agreement; or (iii) the Buyer has received a Certificate of Analysis from the Supplier confirming such Products meet the Specifications.

 

5.3.                            The Supplier represents and warrants that, unless otherwise agreed in writing with the Buyer, at the time of delivery all Products will have a minimum shelf life remaining of [***] shelf life, except in the case of an Order for Products the delivery of which has been deferred at the Buyer’s request.

 

5.4.                            If the Supplier delivers to the Buyer a supply of the Products exceeding the amount specified in the applicable Order (the “Excess Supply”), the Buyer shall purchase such amount of the Excess Supply equal to the lower of:

 

5.4.1.                  [***] additional [***] of the amount specified in the relevant Order; and

 

5.4.2.                  [***] per cent ([***]%) of the total Order,

 

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For the avoidance of doubt, the Buyer shall not be obliged to purchase any amount of Product above the amounts specified in clauses 5.4.1 and 5.4.2 unless such purchase has been agreed in writing in advance between the parties.

 

5.5.                            Following delivery, the Buyer shall have five (5) working days to examine each delivery of the Products and report any defects (including without limitation defects in quantity or obvious defects in quality identifiable from visible inspection of the pallet delivered) to the Supplier within such period. If no report is received by the Supplier within such period the Buyer will be deemed to have accepted such Products. The parties further agree that:

 

5.5.1.                  If such a report is received by the Supplier, the Supplier shall notify the Buyer whether or not it agrees that the Products in question are defective within five (5) working days after receipt of such report (and if the Supplier fails to do so within such five (5) working day period, the Supplier shall be deemed to have agreed with the Buyer’s determination that the Products in question are defective). If the Supplier does not agree with the Buyer that the Products in question are defective then the parties’ respective heads of quality shall promptly meet (and in any event within ten (10) working days after the Supplier’s receipt of the Buyer’s report) to discuss and attempt to resolve the dispute. If the heads of quality have not resolved the dispute within fifteen (15) working days after the Supplier’s receipt of the Buyer’s report then a sample of the alleged defective Product shall be submitted for analysis to an independent laboratory (or other appropriate expert) to be agreed upon in good faith between the Buyer and the Supplier in writing. The decision of such laboratory (or expert) shall be final and binding on the parties and the corresponding expenses will be paid by the party found to be in error.

 

5.5.2.                  If the Supplier agrees with the Buyer that the Products are defective (or is deemed to have so agreed) or the laboratory or other expert determines that the Products are defective (and such defect is not as a result of the Buyer’s breach of this Agreement), the Supplier shall, at the Buyer’s option, either (a) if the Buyer has paid for the Products in question, reimburse the Buyer for the Price it paid for such Products or, if the Buyer has not paid for the Products in question, reimburse the Buyer’s cost of the API used in such Products or (b) deliver replacement Products at no additional charge to the Buyer in substitution for the rejected Products and reimburse the Buyer’s cost of the API used in such replacement Products.

 

5.6.                            The Supplier represents and warrants that it will have the capacity to fill the Buyer’s requirements for the amount of Products set forth in any Order so long as such amount does not exceed [***]% of the forecasted demand set forth in the immediately preceding Product Forecast. The Supplier shall provide the Buyer with capacity information, and complete a vulnerability analysis from time to time to demonstrate that the available capacity meets the Buyer’s requirements. The Supplier shall promptly take action to address to the Buyer’s reasonable satisfaction any capacity issues identified by the analysis.

 

5.7.                            If required by the Buyer, the Supplier shall make arrangements to meet the Buyer’s “Pallet Policy” for shipment of Product to each specified location. A copy of the Policy is attached in Schedule Six.

 

5.8.                            For avoidance of doubt, the terms and conditions relating to Products, which were ordered prior to Plant Day in accordance with the Amended Supply Agreement but fall due for delivery during the term of this Agreement, will be governed (including as to cost) by the terms and conditions of this Agreement.

 

6.                                      API, RAW MATERIALS AND TOOLING

 

6.1.                            The parties agree that the API and Raw Materials shall be sourced by the Supplier in accordance with this clause 6.

 

6.2.                            The Supplier shall collect the APls from the Buyer at the entrance to the Premises.

 

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Active Pharmaceutical Ingredients (API)

 

6.3.                            The Supplier shall only use API supplied by the Buyer (or by a third party approved in writing by the Buyer) in the manufacture of any Products and the parties agree:

 

6.3.1.                  the Supplier will order API from the Buyer according to the minimum batch quantity of [***] of Buprenorphine and [***] of Naloxone (or as otherwise agreed between the parties) which shall be delivered by the Buyer or the Buyer’s nominee on a one (1) week lead time together with the APls’ Certificate of Analysis;

 

6.3.2.                  the Supplier will at all times retain appropriate stockholdings of API, being [***] usage of each of Buprenorphine and Naloxone or as otherwise agreed following review twice a year; and

 

6.3.3.                  notwithstanding the terms of any shipping document or any other delivery documents, the API is supplied by the Buyer on a consignment basis as set out in Schedule Eleven;

 

6.3.3.1                         all risk in the API (including without limitation for any loss of or damage to the API) transfers to the Supplier at the point of delivery to the Supplier, the Supplier shall maintain and store the API in appropriate and secure conditions in accordance with applicable laws and shall fully insure the API for so long as it remains at the Supplier’s risk; and

 

6.3.3.2                         legal title to the API shall remain with the Buyer after delivery to the Supplier pending use in the manufacture of the Products. Legal title in the API shall pass to the Supplier upon use in the manufacture of the Products and will be sold and charged to the Supplier in accordance with Schedule One and Schedule Eleven;

 

6.3.4.                  the Supplier shall monitor, account for all usage and wastage of the API and is responsible for filing of annual reports with relevant authorities detailing all storage and use of API within the Supplier’s control and at the Supplier’s risk, the Supplier will report such information to the Buyer on a monthly basis and co-ordinate the filing of such annual reports with the Buyer;

 

6.3.5.                  all API supplied by the Buyer will be solely used by the Supplier for the Products; and

 

6.3.6.                  the Supplier shall ensure that all personnel involved in the manufacture of the Products are suitably trained for the handling of APis used in the Product.

 

Raw Materials

 

6.4.                            The Supplier shall be responsible for the purchase of all Raw Materials (except for Raw Materials elected to be supplied by the Buyer) as required to meet the Orders. The Supplier shall only obtain Raw Materials from suppliers to the extent specified as authorised suppliers for the relevant material or component within the Technical Manual and the marketing authorisation or otherwise approved in writing by the Buyer. The Supplier shall ensure that such Raw Materials and other components are of the requisite standard to comply with the Specification.

 

6.5.                            The parties agree that for any Raw Material which (i) is on a lead time from the Supplier of more than [***]; or (ii) has a minimum order quantity in excess of the forecasted quantity of applicable Products in the forthcoming [***] (including without limitation those materials specified in Schedule Nine); the Supplier shall liaise with the Buyer in respect of such purchase and prior to such purchase shall obtain confirmation from the Buyer that the Buyer will underwrite any write-off (if applicable) of unused Raw Materials, before purchasing such Raw Materials as detailed in Schedule Nine.

 

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Tooling

 

6.6.                            To the extent that the Buyer is not already the owner thereof (as indicated in Schedule Seven), the Buyer may agree in its sole discretion to provide the Supplier with sufficient funds to cover the Supplier’s purchase of the punch and die tooling (as described in Schedule Seven) required to support the capacity required for the anticipated supply of the Products, such tooling to be used solely for the production of the Products (being such tooling specified in Schedule Seven and hereinafter referred to as the “Tooling”). The purchase price for the Tooling, the amortisation formula and other commercial terms (“Purchase Terms”) in respect thereof are set out in Schedule Seven.

 

6.7.                            Upon the Buyer’s achievement of the Purchase Terms with respect to each item of Tooling (other than Existing Tooling) such Tooling shall become the sole and exclusive property of the Buyer, and the Supplier shall take all such actions as the Buyer may reasonably request (including, without limitation, the execution and delivery to the Buyer of documents of title and other instruments) confirming the Buyer’s exclusive right, title and interest therein. Notwithstanding the foregoing, the Supplier acknowledges and agrees that all designs, drawings, samples, prototypes and all Intellectual Property Rights related thereto, with respect to the Tooling and the Products are the exclusive property of the Buyer. From and after the date on which the Buyer achieves the Purchase Terms with respect to an item of Tooling, the Supplier shall mark such item conspicuously with a sign or sticker indicating that such item is the exclusive property of the Buyer.

 

6.8.                            The Supplier acknowledges and agrees that the Buyer is the sole and exclusive owner of the Existing Tooling and the Supplier shall take all such actions as the Buyer may reasonably request (including, without limitation, the execution and delivery to the Buyer of documents of title and other instruments) confirming the Buyer’s exclusive right, title and interest therein. The Supplier acknowledges and agrees that all designs, drawings, samples, prototypes and all Intellectual Property Rights related thereto, with respect to the Existing Tooling are the exclusive property of the Buyer

 

6.9.                            Throughout the term of this Agreement, the Supplier, at its expense, shall maintain the Tooling in good working order and repair for at least five (5) years, shall not encumber or charge the Tooling in any manner whatsoever, shall procure insurance with an insurance company approved by the Buyer (such approval not to be unreasonably withheld) insuring the Tooling for its replacement value against all insurable risks, and shall use the Tooling exclusively for the production of the Products for the Buyer.

 

6.10.                     Notwithstanding anything contained in this Agreement to the contrary, the Supplier shall use reasonable endeavours to ensure that the Tooling shall have a working life of at least five (5) years from the date it was or is commissioned, the date of commissioning for Tooling existing at the date of this Agreement being set out in Schedule 7. The repair or replacement of any such Tooling that fails to achieve such capacity shall be at Supplier’s sole cost and expense. The Supplier shall continue to provide routine maintenance on Tooling that has exceeded such life; provided, however, that if such a Tooling fails and the Supplier is unable to return it to service through the application of routine maintenance, any further costs of repair or replacement of such Tooling shall be at Buyer’s sole cost and expense.

 

6.11.                     Where the Tooling is provided by the Buyer, ownership, title and interest in the Tooling shall at all times belong to the Buyer, and the Supplier shall throughout the term of this Agreement keep and maintain the sign and/or sticker on the Tooling indicating the sole ownership of the property of the Buyer.

 

7.                                      PRICE AND PAYMENT

 

7.1.                            The price for the Products shall be those set out in Schedule One and shall be fixed for the period up to and including 31 December 2016. The parties agree that the Price shall be subject to review thereafter every one year, and each such review shall commence following the Supplier’s provision to the Buyer of the Supplier’s proposed pricing for the forthcoming year by 31 July of the then current year. The first such review shall take place following the Supplier’s first proposal for the year 2017 (to be made by 31 July 2016). The parties agree

 

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that the proposed pricing and review every one year (and any corresponding adjustment) will reflect the principles set out in Schedule One.

 

7.2.                            For the duration of this Agreement, the Supplier shall use its reasonable endeavours to be technically and commercially competitive taking into account the market for the supply of Raw Materials, and improvements in technology and the production of products similar to the Products. The Supplier will prepare an improvement plan and provide this to the Buyer before 31 July each year. Such improvement plan shall be discussed as part of the annual review set out in clause 7.1 above and the Supplier agrees to adhere to any improvement plan mutually agreed between the parties.

 

7.3.                            The Buyer shall pay the Price for Products delivered to it pursuant to clause 5 together with any other invoices submitted to it pursuant to this Agreement within [***] of receipt by the Buyer from the Supplier of a valid VAT (or other applicable similar taxes) invoice therefor.

 

7.4.                            On reasonable request of the Buyer from time to time, the Supplier shall supply:

 

7.4.1.                  those of the Services listed in Schedule Two (if any) specified in the request and the Buyer shall reimburse the Supplier for such Services at cost without any mark up; and

 

7.4.2.                  the Temporary Additional Services pursuant to the provisions and charges as set out in Schedule Three, until the Buyer provides notice to the Supplier in accordance with Schedule Three to cease providing the Temporary Additional Services,

 

provided that such supply of Services shall be performed either (i) in relation to the provision of the Products or (ii) as reasonably required for the purposes of performing a Technical Transfer.

 

7.5.                            The amounts payable by the Buyer to the Supplier in relation to the Services set out in this Agreement shall be subject to a price review at each anniversary of this Agreement.

 

7.6.                            The Buyer shall be entitled to set off against any amounts due to the Supplier hereunder any amounts due to it and any of its Affiliates from the Supplier under this Agreement.

 

7.7.                            The parties acknowledge that the Price includes delivery to the Delivery Point and that in the event that the Buyer specifies an alternative Delivery Point, the variation in the Supplier’s delivery cost (including any additional charges, or any cost reductions) shall be passed through (without mark-up or variation) to the Buyer.

 

7.8.                            Any amounts expressed to be payable under this Agreement by the Buyer to the Supplier shall be deemed to be exclusive of any VAT which is chargeable on any supply or supplies for which that amount (or any part thereof) is the whole or part of the consideration for VAT purposes.

 

7.9.                            If anything done by the Supplier under this Agreement is a supply on which VAT is chargeable and the Supplier is required to account to the relevant Tax Authority for any VAT chargeable on that supply, then an amount equal to any VAT so chargeable shall be paid by the Buyer to the Supplier (in addition to, and at the same time as, any other consideration for that supply) and the Supplier shall provide the Buyer with a valid VAT invoice for that supply.

 

8.                                      SERVICE LEVELS, GOVERNANCE AND CHANGE CONTROL

 

8.1.                            The Supplier shall meet the agreed Key Performance Indicators in its performance of the Services as set out in Schedule Five. All Key Performance Indicators except for OTIF are for monitoring purposes only.

 

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Governance

 

8.2.                            The parties agree that appropriate representatives of each of the parties’ operational team shall have a weekly telephone conference or meeting to discuss the operational issues under this agreement, including if applicable the provision of Product Forecasts and Orders.

 

8.3.                            The parties further agree that they shall each appoint a relationship manager to be responsible for the management of arrangements and supply of Products under this Agreement. The parties acknowledge that their respective relationship managers are as follows:

 

8.3.1.                  The Buyer’s relationship manager is Purchasing Manager;

 

8.3.2.                  The Supplier’s relationship manager is Site Director;

 

who shall meet (in person or telephone conference) on a monthly basis unless otherwise agreed by both parties to discuss the performance under, and any issues arising under, this Agreement, and shall include a review of performance against the KPls, and assess volume of API used and stored (so as to understand the Supplier’s use of API as described in clause 6.3.4). Accordingly, the Supplier agrees to provide the Buyer’s relationship manager in advance of each meeting a report showing the performance against the KPls over the previous month and over a rolling twelve (12) month period or, if shorter, the period from the Commencement Date to the end of the previous month.

 

8.4.                            The parties further agree that approximately every three (3) months, and in any event four (4) times a year (unless otherwise agreed between the parties) they shall hold a joint steering group meeting comprised of the key stakeholders from each of the parties which shall include:

 

8.4.1.                  for the Buyer, the Buyer’s relationship manager and the Buyer’s supply director (together with any other additional representative as nominated by the Buyer); and

 

8.4.2.                  for the Supplier, the Suppliers relationship manager and the Supplier’s SVP Health Supply (together with any other additional representative as nominated by the Supplier),

 

who shall meet to discuss the performance under, and any issues arising under, this Agreement, review of performance against the KPls, and discuss any strategic issues, including without limitation any expected variation in demand and/or capacity (if any).

 

8.5.                            The parties agree that the monthly meetings of the relationship managers shall be used to resolve where possible any issues or problems as they arise. However, the parties agree that in the event any problem or issue is not resolved between the relationship managers, either relationship manager shall escalate the matter by providing written notice to the other party as set out in clause 20.

 

Change Control and Change Management

 

8.6.                            The parties acknowledge the regulatory requirements and associated timescales involved in making changes to the manufacture of the Products are significant and as such both parties agree that, upon becoming aware of any possible need or desire to make any changes, that party will provide the other with written notice of such possible change (including rationale, expected timings, risk assessment, price impact and any impact on business continuity). Upon receipt of such notice the parties will meet to discuss such proposed changes (each acting reasonably and in good faith). Any changes agreed between the parties shall be documented in writing via a change plan specifying timings, responsibilities of each of the parties and costs, and must be signed by both parties (“Change Plan”). The Supplier will not make any changes to the manufacture of the Products without a Change Plan signed by the Buyer PROVIDED THAT neither party shall be entitled to reject such Change Plan if such rejection would result in the other party being in breach of its obligations under any applicable laws or regulations.

 

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8.7.                            The Supplier and Buyer shall implement any Change Plan in accordance with its terms and the Supplier shall keep the Buyer informed of progress, and each party shall notify the other party in the event of any delays or changes to the Change Plan.

 

8.8.                            Notwithstanding the above, the Supplier provides the following undertakings with respect to the manufacture and supply of the Products;

 

8.8.1.                  the Supplier undertakes to:

 

8.8.1.1                         provide a minimum of [***] written notice to the Buyer in the event that the Supplier wishes to (i) change or modify the manufacture of the Products according to the Specification which shall include a change to a production process or method (a “Change in Specification”) or (ii) or the Supplier wishes to change the site of manufacture of Products; and

 

8.8.1.2                         notify the Buyer as soon as reasonably practicable after the Supplier becomes aware of any changes in applicable law which are likely to affect the supply of the Products under this Agreement (including rationale, expected timings, risk assessment, price impact and any impact on business continuity);

 

8.8.2.                  the Supplier undertakes that in the event of (i) a Change in Specification (ii) a change in the site of manufacture of the Products or (iii) when the Supplier becomes aware of any changes in applicable law which are likely to affect the supply of Products under this Agreement, it shall use its reasonable endeavours to procure sufficient Products, with the maximum possible shelf life, to meet the Buyer’s Product Forecasts for the agreed transition period from the date of such notification or such other volume as the Buyer may agree with the Supplier;

 

8.8.3.                  the Supplier undertakes that in the event of a change in site of manufacture of Products, upon written notice from the Buyer the Supplier shall grant the Buyer, or the Buyer’s representatives, reasonable access to the new site of manufacture as soon as reasonably practicable following receipt of such notice and at any time thereafter, and in any event prior to the change, in order to ensure that it meets all regulatory requirements under applicable law. Any approval by the Buyer of a new site of manufacture shall not relieve the Supplier of any obligations under this clause 8 or this Agreement; and

 

8.8.4.                  the Supplier further undertakes that it shall reimburse any and all reasonable, documented and auditable direct and indirect costs incurred by the Buyer as a result of the Change in Specification or change in the site of manufacture of Products.

 

8.9.                            The parties agree that where the change is agreed as a result of a third party initiator (e.g. authorities or regulators making a change in requirements) the costs of complying with such change shall be borne by the party on whose activity is changed by such change in regulation (apportioned accordingly to the extent the change in regulation applies to each party), and the parties set out in Schedule Ten (10) an illustrative list of possible anticipated changes and the party bearing the costs (of both parties) for making such changes.

 

8.10.                     The Supplier agrees certain changes are included within the Price (and accordingly the Buyer shall not incur any additional charges in respect of such changes), including:

 

8.10.1.           up to [***] artwork changes per year (or pro rata for any part thereof); and

 

8.10.2.           up to [***] person-hours of Supplier’s time per year (or pro rata for any part thereof) in relation to any changes, each as more fully described in Schedule Ten.

 

8.11.                     The Supplier shall not raise any charges for any changes outside an agreed Change Plan, nor any other charges outside of those specified in this Agreement unless otherwise agreed in writing by the Buyer.

 

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9.                                      QUALITY AND RECALLS

 

9.1.                            The Supplier shall manufacture the Products and supply the Services strictly in accordance with:

 

9.1.1.                  the Specifications;

 

9.1.2.                  the Technical Manual;

 

9.1.3.                  the Technical Agreement;

 

9.1.4.                  cGMP;

 

9.1.5.                  all applicable licences, permits, registrations, authorisations, regulations and legislation in relation to controlled drugs or substances;

 

9.1.6.                  all other applicable laws and regulations; and

 

9.1.7.                  the terms of this Agreement.

 

9.2.                            Prior to commencement of the manufacture of the Products the Supplier shall satisfy itself that the know-how contained in the Technical Manual (and any other information provided by the Buyer to the Supplier) is sufficient to enable it to efficiently perform its obligations under this Agreement. If the Supplier concludes that further information is necessary it shall notify the Buyer and obtain such information prior to the commencement of manufacture. If sufficient information has not been provided to the Supplier by the Buyer in respect of a particular SKU of Product, such particular SKU shall not be subject to Key Performance Indicators while such information has not been provided.

 

9.3.                            If the Supplier shall become aware that any aspect of a Specification is liable to result in the manufacture of a defective Product which may lead to a liability being incurred, the Supplier shall, as soon as reasonably practicable, notify the Buyer in writing. The Supplier and the Buyer shall promptly meet to discuss and address the risk of manufacture of defective Product and if the Supplier can reasonably demonstrate that manufacture of Product in accordance with the specification would, or would likely, result in a defective product, the Supplier may, while the Supplier rectifies such risk, suspend its obligations to supply Product under this Agreement, without prejudice to any right or remedy of the Buyer, and provided that the Supplier uses all reasonable endeavours to rectify such risk as promptly as practicable.

 

9.4.                            Upon reasonable request by the Buyer the Supplier shall provide the production and quality records in respect of any or all of the Products.

 

9.5.                            The Supplier will provide the Buyer with Certificates of Analysis of all batches of the Products manufactured by it. Such certificates shall comply with, and be in the form set out in, the quality assurance requirements included in the Specifications and the Technical Manual. The Supplier shall not release the Products from its warehouse for sale until the Certificates of Analysis relating to such Products demonstrate that the Products meet the Specifications.

 

9.6.                            The Supplier shall establish and maintain a batch-tracking system to enable it to identify and procure the recall (if necessary) of Products which may be affected in any way by manufacturing and production problems. The Supplier shall provide details to the Buyer of its batch-tracking system upon request to do so.

 

9.7.                            The parties agree that, in relation to Product recalls:

 

9.7.1.                  The Buyer shall be responsible for any recall of a Product. The Supplier shall cooperate with the Buyer in the event of any recall and provide such reasonable assistance in connection therewith as the Buyer may reasonably request.

 

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9.7.2.                  In the event the Buyer should be required or should voluntarily decide to initiate a recall, Product withdrawal, or field correction of any Product, the Buyer shall notify the Supplier and provide a copy of its recall letter. In conjunction with such recall, the Supplier shall provide reasonable assistance in any investigation reasonably required to determine the cause and extent of the problem causing the recall.

 

9.7.3.                  In the event that the Supplier independently believes that a recall, Product withdrawal, or field correction of a Product may be necessary or appropriate, the Supplier shall notify the Buyer and reasonably cooperate with the Buyer concerning the necessity and nature of such action.

 

9.7.4.                  All coordination of any recall or field correction activities involving a Product shall be handled by the Buyer whether or not such action was initiated by the Buyer.

 

9.7.5.                  Subject to clause 9.7.7, in the event that any Product is recalled as a result of a the breach of this Agreement by or negligent or intentionally wrongful act of, the Supplier or its representatives (including without limitation the supply by the Supplier of Product that does not conform to the requirements of this clause 9), then the Supplier shall bear all of the costs and expenses of such recall, including, without limitation, expenses related to communications and meetings with all required regulatory agencies, expenses of replacement stock, the cost of notifying customers and costs associated with shipment of recalled Product from customers and shipment of an equal amount of replacement Product to those same customers.

 

9.7.6.                  Subject to clause 9.7.7, in the event that any Product is recalled for any other reason other than that specified in clause 9.7.5, then the Buyer shall bear all of the costs and expenses of such recall, including without limitation expenses related to communications and meetings with all required regulatory agencies, expenses of replacement stock, the costs of notifying customers and costs associated with shipment of recalled Product from customers and shipment of an equal amount of replacement Product to those same customers.

 

9.7.7.                  To the extent that the reason for any recall of Products hereunder is in part caused by the Supplier and in part caused by the Buyer, then the costs and expenses shall be allocated in an equitable manner between the parties. For avoidance of doubt, neither party shall be liable for any indirect or consequential loss in relation to the Product recall.

 

9.7.8.                  If the parties disagree on who shall bear the costs and expenses of a Product recall under this Clause 9.7, the parties shall use the dispute resolution process as set out in clause 20 to determine the allocation of such costs and expenses.

 

9.7.9.                  The Buyer will inform the Supplier of any product manufacturing complaints they are aware of. The Supplier shall investigate the issues promptly and provide a written report to the Buyer.

 

9.7.10.           If the Supplier becomes aware of any Product complaints it will promptly notify the buyer and provide reasonable assistance in investigating such complaints.

 

10.                               WARRANTIES

 

10.1.                     The Supplier hereby warrants that:

 

10.1.1.           any Products manufactured pursuant to this Agreement shall comply with all provisions as to quality set out in clause 9 hereof;

 

10.1.2.           it will not be negligent in the manufacture of the Products or in the supply of Services;

 

10.1.3.           the Products manufactured pursuant to this Agreement will:

 

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10.1.3.1                  be free from all defects obvious on visual inspection of the Product;

 

10.1.3.2                  be fit for their purpose and of satisfactory quality;

 

10.1.3.3                  comply with all applicable statutes and regulations relating to the Products;

 

10.1.3.4                  conform in all respects with the Specifications and the Technical Manual;

 

10.1.4.           any Services supplied by the Supplier or its subcontractors or agents will be supplied:

 

10.1.4.1                  by appropriately qualified and trained personnel; and

 

10.1.4.2                  with reasonable care and diligence.

 

10.1.5.           so far as the Supplier is aware the manufacture of the Products and the supply of the Services will not infringe any third party rights.

 

10.2.                     The Supplier further warrants that:

 

10.2.1.           it will meet all Orders from the Buyer for the Product; and

 

10.2.2.           it will supply the Products in accordance with Clause 5.

 

10.3.                     The Buyer warrants that any supply of APls provided by the Buyer to the Supplier in accordance with the terms of this Agreement shall comply with the API Specification.

 

10.4.                     Each of the Supplier and the Buyer warrants that:

 

10.4.1.           it is duly incorporated and organised and is validly existing under the laws of its jurisdiction of incorporation and has the corporate power and authority to own its assets and to conduct its businesses and to perform its obligations hereunder;

 

10.4.2.           the execution and delivery of this Agreement by it and the completion by it of the obligations contemplated herein, do not and will not result in the breach of, or violate any term or provision of, its articles or by-laws;

 

10.4.3.           it is not subject to any outstanding injunction, judgement or order of any governmental authority which would prevent or materially delay the transactions contemplated by this Agreement; there are no civil, criminal or administrative claims, actions, suits, demands, proceedings, hearings or investigations pending or, to the Supplier’s knowledge, threatened at law, in equity or otherwise, in, before, or by, any governmental authority which (if successful) would prevent or materially delay the Supplier’s compliance with the provisions of this Agreement;

 

10.4.4.           no dissolution, winding up, bankruptcy, liquidation or similar proceeding has been commenced, or is pending or proposed, in respect of it;

 

10.4.5.           the execution and delivery of this Agreement and the completion of the obligations contemplated herein have been duly approved by appropriate persons within its organisation and this Agreement constitutes legal, valid and binding obligations of the Supplier enforceable against it in accordance with its terms; and

 

10.4.6.           it or its Affiliates has taken or will take all action as may be required or necessary to obtain and maintain, comply and keep current any governmental licences, permits, approvals and/or registrations that are necessary for the Supplier and/or its Affiliates to manufacture and/or supply the Products and Services and to carry out and perform its obligations under this Agreement.

 

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10.5.                     Without prejudice to any other remedy (and the Buyer’s rights generally under this Agreement) if any Services are not supplied or performed in accordance with this Agreement, then the Buyer at its sole option shall be entitled to require the Supplier at Supplier’s cost within such reasonable time as is required by the Buyer in writing to supply replacement Services conforming with this Agreement.

 

11.                               INDEMNITY

 

11.1.                     On the terms and subject to the conditions of this clause 11, the Buyer shall defend, indemnify and hold harmless the Supplier, its Affiliates and their respective officers, directors, employees and agents (collectively, “Supplier lndemnitees”), from and against any and all liabilities, damages, losses, costs, taxes, expenses (including reasonable legal fees and other expenses of litigation and arbitration), claims, demands, suits, penalties, judgments or administrative and judicial orders (collectively, “Losses”) relating to any Proceeding to the extent arising out of or resulting from (i) any negligent act or omission of the Buyer or its Affiliates, or any of their respective officers, directors, employees or agents in connection with the performance of this Agreement; or (ii) any breach by the Buyer or its Affiliates of any of its representations, warranties or obligations contained in this Agreement; in each case (i) and (ii), except for those Losses for which the Supplier has an obligation to indemnify a Buyer Indemnitee pursuant to clause 11.2, as to which Losses each party shall indemnify the other to the extent of their respective liability for such Losses.

 

11.2.                     On the terms and subject to the conditions of this clause 11, the Supplier shall defend, indemnify and hold harmless the Buyer, its Affiliates, and their respective officers, directors, employees and agents (collectively, “Buyer lndemnitees”), from  and against any and all Losses relating to any Proceeding to the extent arising out of or resulting from (i) any negligent act or omission of the Supplier, its Affiliates, its contract manufacturers or Raw Material suppliers (other than the Buyer), or any of their respective officers, directors, employees or agents in connection with the performance of this Agreement; or (ii) any breach by the Supplier or its Affiliates of any of its representations, warranties or obligations contained in this Agreement; in each case (i) and (ii), except for those Losses for which the Buyer has an obligation to indemnify a Supplier Indemnitee pursuant to clause 11.1, as to which Losses each party shall indemnify the other to the extent of their respective liability for such Losses.

 

11.3.                     Each party shall take out and maintain in full force and effect sufficient insurance  (which shall be no less than [***] in respect of each and every claim or series of claims arising from the same incident) to cover such liabilities as it may incur by virtue of this Agreement or by reason of the manufacture and supply of the Products including, without limitation, in respect of product liability claims. The existence of such insurance shall not be construed as a limitation of the Supplier’s liability hereunder and shall not affect the liability of the Buyer hereunder which shall be limited to payment for any Products which are the subject matter of any Orders and which have been supplied by the Supplier in accordance with the provisions of this Agreement. The Supplier shall ensure that the Buyer’s interest is noted on such policy and, at the request of the Buyer, produce for inspection by the Buyer a valid certificate of insurance in respect of such insurance cover and the receipt for the then current premium.

 

11.4.                     Each party shall promptly notify the other of claims likely to be made by such party under the terms of this Agreement, and shall promptly exchange any relevant documents and records within its possession or control, save for any documents or records which are the subject of legal or professional privilege, for the purpose of investigating such claim. Each party shall consult the other party prior to making any settlement of a third party claim or action.

 

11.5.                     Nothing in clause 11 shall operate to limit or exclude any liability for death or personal injury caused by either party’s (or their agent’s or subcontractor’s) act or omission or negligence or for fraud.

 

12.                               TITLE AND RISK

 

12.1.                     Title to the Products shall pass to the Buyer upon delivery to the DAP (lncoterms 2000) Point.

 

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12.2.                     The Products shall be at the Supplier’s risk until they are delivered to an authorised representative of the Buyer at the Delivery Point. The Supplier shall fully insure the Products for so long as they remain at the Supplier’s risk.

 

13.                               CONFIDENTIAL INFORMATION AND INTELLECTUAL PROPERTY RIGHTS

 

13.1.                     Each party acknowledges that the Confidential Information may be disclosed to it by the other party (or its Affiliates) in connection with the Products this Agreement and potentially in connection with other possible contract manufacturing. The recipient party shall keep such information strictly confidential (both during the subsistence and after the termination or expiry of this Agreement), shall not disclose it to any third party (including an Affiliate) and shall only disclose it to those of its employees who need to know it for the purposes of this Agreement and who have agreed to be bound by similar duties of confidentiality as the recipient party. In particular, and without limiting the foregoing, the Supplier shall not disclose to any third party (including an Affiliate) or use for any other purpose any information contained in the Specifications or the Technical Manual.

 

13.2.                     The Supplier agrees to use the Confidential Information of the Buyer or its Affiliates only for the purpose of manufacturing and supplying the Products for the Buyer or its Affiliates on the terms of this Agreement and for no other purpose or for its or any third party’s benefit.

 

13.3.                     The restrictions in clauses 13.1 and 13.2 shall not apply to any Confidential Information to the extent that such Confidential Information:

 

13.3.1.           is or becomes public knowledge through no fault of the receiving party;

 

13.3.2.           is required to be disclosed by applicable laws or order of the court or other competent authority; or

 

13.3.3.           is disclosed in confidence to professional advisers, auditors, insurers and bankers.

 

13.4.                     The Buyer or as the case may be any Affiliate of the Buyer retains the ownership of all rights (including without limitation Intellectual Property Rights) in the Product formulation for the duration of and at any time after the termination of this Agreement. For the avoidance of doubt, this information constitutes Confidential Information of the Buyer.

 

13.5.                     All copyright and other Intellectual Property Rights in any artwork and origination work supplied by the Buyer or its nominee for the labelling, packaging and, where applicable, package inserts for the Products is and shall remain the property of the Buyer or its nominee absolutely. The Supplier shall not supply or manufacture any such packaging or other components or finished Products or confusingly similar packaging or products other than to the Buyer or as it may direct.

 

13.6.                     If during the term of this Agreement the Supplier (or any agent or authorised sub­ contractor of it) develops or creates (whether with or without others) any Arising Product Intellectual Property Rights, the Supplier shall promptly disclose any such Arising Product Intellectual Property Rights to the Buyer and shall promptly upon request by the Buyer assign the entire right, title and interest to any and all such Arising Product Intellectual Property Rights to the Buyer or any of its Affiliates with full title guarantee for a nominal consideration.

 

Subject to the foregoing, the Supplier shall own all Arising Supplier Intellectual Property Rights the Supplier (or any agent or authorised sub-contractor of it) develops or creates (with or without others (excluding the Buyer)). The Buyer shall own all Arising Product Intellectual Property Rights the Buyer (or any agent or authorised sub-contractor of it) develops or creates (with or without others). All Existing Intellectual Property Rights are and shall remain the exclusive property of the party owning them (or, where applicable, the third party from whom its right to use the Existing Intellectual Property Rights has derived).

 

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13.7.                     During the term of this Agreement, the Supplier shall not assign or license any of the Supplier’s Existing Intellectual Property Rights to other parties for use in relation to the Products or similar to the Products (“the Product Field”).

 

13.8.                     During the term of this Agreement, and whether in isolation or for or with others, the Supplier shall not carry out research or research and development work in the Product Field which is other than pursuant to this Agreement.

 

13.9.                     To the extent that the Buyer requires a licence from the Supplier of any of the (i) Supplier’s Existing Intellectual Property Rights (excluding any trade marks and rights in passing off) owned or controlled by the Supplier or any of its Affiliates and/or (ii) Arising Supplier Intellectual Property Rights, in each case which are used by the Supplier in the then-current manufacturing process, for the purposes of the Technical Transfer and the related manufacture and commercialisation of Products, the Supplier hereby grants (and shall procure that its Affiliates grant) to the Buyer (to the extent permitted) a non-exclusive irrevocable, perpetual, world-wide, royalty-free, transferable and sub-licensable licence in respect thereof. For the avoidance of doubt, this licence shall survive the termination or expiry of this Agreement.

 

13.10.              To the extent that the Supplier requires a licence from the Buyer of any of the (i) Buyer’s Existing Intellectual Property Rights owned by the Buyer or any of its Affiliates and/or (ii) Arising Product Intellectual Property Rights, in each case in order to perform its obligations under this Agreement, the Buyer hereby grants (and shall procure the grant) to the Supplier for the duration of this Agreement a non-exclusive irrevocable, royalty-free, non-transferable and non-sublicensable licence in respect thereof, exercisable only at the Manufacturing Site.

 

13.11.              In the event that the Supplier shall decide that it no longer wishes to prosecute or maintain any registered protection for any of the Supplier’s Existing Intellectual Property Rights (excluding any trade marks and rights in passing off) in relation to the Product Field for any country it shall notify the Buyer in writing (and in any event at least 90 days before the date upon which any payment or step would be required to be taken to continue prosecuting or maintaining any such protection). If within 60 days of receipt of such notice from the Supplier, the Buyer indicates to the Supplier that it wishes to take an assignment of such Existing Intellectual Property Rights, it shall so notify the Supplier who immediately shall assign, with full title guarantee, the entire right, title and interest to such Existing Intellectual Property Rights to the Buyer for a nominal consideration. For the avoidance of doubt, this includes any registered protection which the company is entitled to claim priority from an earlier application at the end of the Paris Convention priority period.

 

13.12.              During the term of this Agreement and upon their knowledge of the occurrence of (i) any infringement or suspected or threatened infringement of any of the Arising Product Intellectual Property Rights, Arising Supplier Intellectual Property Rights or Existing Intellectual Property Rights, or (ii) any proceedings or suspected or threatened proceedings for the revocation or involving the validity of any such Intellectual Property Rights, the party with this knowledge shall notify the other and provide all details within their knowledge with respect to the same and thereafter the parties will assist each other in taking such steps as either party may reasonably consider to be appropriate at the expense of the party that considers such steps to be appropriate.

 

13.13.              For any Existing Intellectual Property Rights and any Arising Product Intellectual Property Rights or Arising Supplier Intellectual Property Rights, in each case owned by or to be owned by the Buyer or Supplier (as applicable), the Buyer or Supplier shall provide all necessary assistance, required by the other party to complete the registration of such rights with the competent authorities in anywhere designated by the Buyer or Supplier (as applicable) (subject to the designating party bearing the reasonable costs and expenses incurred by the other party in respect of such assistance).

 

13.14.              For the purpose of protecting the Existing Intellectual Property Rights, the Arising Product Intellectual Property Rights or Arising Supplier Intellectual Property Rights each party shall also procure that its Affiliates shall comply with clauses 13.12, 13.13 and this clause 13.14.

 

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13.15.              Without prejudice to a party’s right to challenge the validity of any registrations of Intellectual Property Rights owned by the other party, each party undertakes that it shall not at any time during the continuance of this Agreement do or suffer to be done any act or thing which would impair the rights of the other party in its Intellectual Property Rights relevant to this Agreement and further undertakes that it shall not represent that it has any title to or right of ownership in such Intellectual Property Rights of the other party.

 

13.16.              The Supplier shall at the request of the Buyer (and at the Buyer’s cost) execute such registered user agreement in respect of the use of the trade marks of the Buyer or its Affiliates as the Buyer may reasonably require.

 

14.                               EXCLUSIVITY

 

Exclusivity of supply

 

14.1.                     The parties agree that the Buyer’s obligations to purchase Products exclusively from the Supplier as set out under this Agreement shall, in circumstances where a party provides the other with written notice to terminate this Agreement pursuant to the provisions of clause 2, be modified as follows:

 

14.1.1.           in the event the Buyer serves written notice of termination on the Supplier, during the [***] prior to termination the Buyer shall be entitled  to transfer [***] per cent ([***]%) of its demand (by volume) over such [***] period to a third party; and

 

14.1.2.           in the event the Supplier serves written notice of termination on the Buyer, during the [***] years prior to termination the Buyer shall be entitled to transfer [***] per cent ([***]%) of its demand (by volume) over such [***] period to a third party.

 

The parties agree that under this clause 14.1, in order to enable the Buyer to identify and utilise an alternative manufacturer, the Supplier shall, on the Buyer’s request and at the Buyer’s cost, promptly and efficiently undertake a Technical Transfer to a third party identified by the Buyer as an alternative source of manufacture of the Products.

 

14.2.                     If the Buyer transfers [***] per cent ([***]%) of its demand (by volume) to a third party in accordance with clause 14.4.1, the parties agree that the Supplier may review and adjust the Price in accordance with the formulae set out in Schedule One.

 

14.3.                     If, other than to the extent caused by the Buyer’s breach of its obligations under this Agreement:

 

14.3.1.           the Supplier’s OTIF performance decreases such that it falls below the Emergency Trigger Level at any time, without prejudice to any other right or remedy of the Buyer, whether hereunder or at law, the Supplier shall use all reasonable endeavours to improve performance such that its OTIF performance returns to the Target OTIF Level, which endeavours shall include without limitation (a) allocation of any resource required (including people and/or funds) so as to return to the Target OTIF Level (including the allocation of additional, appropriately qualified, permanent and temporary staff and/or putting on additional shifts); and (b) at the Buyer’s request, rapid approval of a new supplier of Raw Materials (as applicable);

 

14.3.2.           the Supplier’s OTIF performance falls below the Emergency Trigger Level over any four (4) consecutive weeks or any ten (10) weeks in any rolling twelve (12) months period or the Supplier is aware of circumstances that will result in the same (a “Material OTIF Failure”) the parties agree, without prejudice to any other right or remedy of the Buyer, whether hereunder or at law:

 

14.3.2.1                  the Supplier shall

 

(A)                               submit a draft rectification plan to the Buyer as soon as possible and in any event within five Business Days (or such other period as may

 

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be agreed between the parties), which draft rectification plan shall set out (1) full details of the Material OTIF Failure, including an analysis of the cause; and (2) the steps which the Supplier proposes to take (using all reasonable endeavours) to rectify the Material OTIF Failure and/or to prevent the Material OTIF Failure from continuing or recurring (as applicable), including timescales for such steps and for the rectification of the Material OTIF Failure; and

 

(B)                               provide to the Buyer any further documentation that the Buyer reasonably requires to assess the analysis of the cause and viability of the proposed rectification or preventative steps;

 

14.3.2.2                  the Buyer shall notify the Supplier whether it consents to the draft rectification plan as soon as reasonably practicable. If the Buyer consents to the draft rectification plan (such draft then being the “Rectification Plan”), the Supplier shall immediately commence the actions set out in the Rectification Plan;

 

14.3.2.3                  if (i) the Buyer, acting reasonably, does not consent to the draft rectification plan within five Business Days of receipt of the draft rectification plan; (ii) the Supplier has not submitted a draft rectification plan in accordance with clause 14.3.2.1 above or (iii) the Material OTIF Failure has not been cured or remedied in accordance with the Buyer’s reasonably expected progress of an agreed Rectification Plan, then either party may serve notice to escalate this matter in accordance with clause 20.1 (such notice being an Escalation Notice for purpose of clause 20.1) and clause 20 shall apply save that the parties agree:

 

(A)                               the 14 (fourteen) day period in clause 20.1.1 shall be reduced to five (5) days;

 

(B)                               the 14 (fourteen) day period in clause 20.1.2 shall be reduced to five (5) days;

 

(C)                               in the event that the matter is not resolved by the parties in accordance with clause 20.1.2 (as amended by item ii. above) the issue shall be referred to (1) the Supplier’s CEO on the one hand, and (2) the Buyer’s CEO on the other hand, who shall meet and seek to resolve such issue within 10 (ten) days of such matter being referred to them (or within such longer period as the parties may agree in writing prior to the expiration of the initial 10 (ten)-day period); and

 

(D)                               in the event that the matter is not resolved by the parties under item iii. above within such 10 (ten)-day period (or longer period as agreed between the parties under item iii. above) the Buyer may, without prejudice to any other right or remedy whether hereunder or at law, exercise its rights under clause 14.3.2.4 below; and

 

14.3.2.4                  in the event that (i) the matter is not resolved via escalation under and in accordance with clause 14.3.2.3 above, or (ii) the Supplier does not return the OTIF performance level to the Target OTIF Level by performing the steps set out in the Rectification Plan within the time period set out in that Rectification Plan, the Buyer may, without prejudice to any other right or remedy whether hereunder or at law, give notice to the Supplier (a) of such failure and (b) that the Buyer’s obligations to purchase Products exclusively from the Supplier as set out under this Agreement shall no longer apply. The Supplier shall, on the Buyer’s request promptly and efficiently undertake and complete a Technical Transfer to the Transferee to enable the Transferee to establish and conduct cGMP manufacture of the

 

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Products, as such Technical Transfer is described in more detail in clause 14.4.

 

14.4.                     The parties agree that a Technical Transfer includes, without limitation:

 

14.4.1.           making available to the Transferee all know-how relating to the then-current manufacturing process in respect of the Products and all documentation constituting material support, performance advice, standard operating procedures, specifications as to Raw Materials and control methods that are necessary to enable the Transferee to use and practice such manufacturing process (including, for the avoidance of doubt, without limitation, in order to achieve and maintain regulatory approvals);

 

14.4.2.           causing an appropriate number of employees and/or representatives of the Supplier to meet with employees or representatives of the Transferee, at the Buyer’s sole cost and expense as to reasonable costs and expenses, properly incurred (or, if the Technical Transfer is pursuant to clause 14.3, then at the Supplier’s sole cost and expense), at both the manufacturing facility of the Supplier and the manufacturing facility of the Transferee, at mutually convenient times, to assist with the working up and use of such manufacturing process and with the training of such Transferee personnel to the extent necessary or useful to enable the Transferee to use and practise such manufacturing process;

 

14.4.3.           without limiting the generality of clause 14.5.2, causing an appropriate number of analytical and quality control laboratory employees and representatives of the Supplier to meet with employees or representatives of the Transferee, at the Buyer’s sole cost and expense as to reasonable costs and expenses, properly incurred, at both the manufacturing facility of the Supplier and the manufacturing facility of the Transferee and make available all necessary equipment, at mutually convenient times, to support and execute the transfer of all applicable analytical methods and the validation thereof;

 

14.4.4.           without limiting the generality of the preceding clauses, support for analytical method transfers I establishment of pharmacopieal methods (a collaborative inter-laboratory transfer of the analytical test methods required for the Product); equipment qualification and validation (of alternative supplier’s equipment); cleaning validation (the provision of validated cleaning lest method that is fit for purpose); engineering batch manufacture and validation (assisting alternative supplier as required to manufacture and validate such batches); registration stability I process validation batches (assist as required in the manufacture of full commercial scale batches, enabling the Buyer to generate stability data to be submitted as part of regulatory filing for the Product) and secondary packaging process validations (assisting as needed to ensure secondary packaging is performed according to validated processes and settings);

 

14.4.5.           and provide such other assistance as the Transferee may reasonably request, at the Buyer’s sole cost and expense as to reasonable costs and expenses, properly incurred, to enable the Transferee to use and practice such manufacturing process and otherwise to manufacture the Products and in order to achieve successful technology transfer, as notified by the Buyer to the Supplier. For the purpose of this clause, successful technology transfer shall have taken place once the Transferee has produced three (3) commercial scale batches of the Product (or such greater number of batches as may then be required by cGMP or by the FDA or EMA to conclude that the practice of the then-current manufacturing process by the Transferee to manufacture the Product is validated) that conform to the Specification and at yields substantially comparable to the yields obtained by the Supplier.

 

Exclusive uses of manufacturing lines

 

14.5.                     The parties agree that the manufacturing and packaging lines used for the manufacture of the products will:

 

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14.5.1.           be exclusively used for, and dedicated to, the production of the Products for the Buyer (unless otherwise agreed by the Buyer following the Supplier’s written request for alternative use);

 

14.5.2.           be physically separated from areas of manufacture of any products other than the Products; and

 

14.5.3.           not be transferred from existing locations without the Buyer’s prior written consent, such consent not to be unreasonably withheld following the Supplier’s written request for such consent detailing reasons and impact of such transfer.

 

15.                               TERMINATION

 

15.1.                     This Agreement may be terminated at any time upon either party giving to the other thirty (30) days’ notice in writing if the other party commits a material breach of the terms of this Agreement and (where such breach is capable of remedy) fails to remedy such breach within thirty (30) days of receiving written notice from the other party specifying the breach and requiring its remedy.

 

15.2.                     This Agreement may be terminated by either party immediately on written notice to the other, if;

 

15.2.1.           the other party shall go into liquidation whether voluntary or compulsory or is dissolved or becomes insolvent or if a petition shall be presented or an order made for the appointment of an administrator or if a receiver, administrative receiver or manager shall be appointed over any part of its assets or undertaking which appointment is not dismissed within thirty (30) days of having been made, or

 

15.2.2.           any distress, execution, sequestration or other process is levied or enforced upon or sued out against the property of the other party which is not discharged within thirty (30) days, or

 

15.2.3.           the other is unable to pay its debts in the normal course of business.

 

15.3.                     Without prejudice to any other remedy (and the Buyer’s rights generally under this Agreement) if and to the extent that the Supplier does not (i) supply or deliver the Products in accordance with the terms of the relevant Order or (ii) comply with (a) the relevant Order Requirements or (b) a request for Services under clause 7.4, then, unless and to the extent such failure is caused by the Buyer’s breach of this Agreement, the Buyer at its sole option shall be entitled to treat such failure as a material breach in which case clause 15.1 shall apply.  If, following the remedial period as set out in clause 15.1, such material breach has not been remedied, the Supplier shall forthwith repay the Price (or any part of the Price) the Buyer has paid for such Products or Services to the Buyer and return any Tooling owned by the Buyer or any of its Affiliates which are located at the Supplier’s premises to the Buyer.

 

15.4.                     Within 5 Business Days of this Agreement terminating for any reason, the Buyer shall have the option by serving written notice on the Supplier to acquire any Tooling used exclusively for the Products which it does not own, the consideration for which shall be an amount equal to the original purchase price for that Tooling paid by the Supplier Jess any amounts paid by the Buyer to the Supplier in respect of amortisation in respect of that Tooling. If the Buyer does not serve such notice the Supplier may elect, at its sole discretion to either (i) retain ownership of the Tooling; or (ii) by serving written notice on the Buyer within ten (10) Business Days of such termination, require the Buyer to take ownership and delivery of the Tooling for no consideration.

 

16.                               CONSEQUENCES OF TERMINATION

 

16.1.                     Upon termination or expiry of this Agreement for whatever reason:

 

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16.1.1.           the Supplier shall at the request of the Buyer, use its reasonable endeavours to novate those contracts that provide for the supply of all Raw Materials exclusively used in the production of the Products to the Buyer, or as the Buyer may direct and to meet any reasonable request from any competent authority and the Buyer required to transfer production or any registrations or licences or approvals to the Buyer, its Affiliates or any third party approved in writing by the Buyer. The parties shall discuss in good faith and attempt to agree as expeditiously as possible a mutually acceptable course of action with respect to any contracts that provide for the supply of Raw Materials that are used both in the production of the Products and products of the Supplier;

 

16.1.2.           the Supplier shall at the request of the Buyer release and make available for immediate collection by or on behalf of the Buyer (i) all finished Products at the Prices set out in Schedule One (ii) all API the Supplier has in stock and (iii) all Raw Materials attributable to the Products which the Supplier has in stock at cost price;

 

16.1.3.           the Supplier shall at the request of the Buyer promptly and efficiently undertake and complete a Technical Transfer to the Transferee to enable the Transferee to establish and conduct cGMP manufacture of the Products;

 

16.1.4.           each party shall promptly procure the delivery to the other party of, or destroy, all copies in its possession of all Confidential Information of the other party which is in documentary or other tangible form (including all copies thereof) and which has been disclosed to it together with all material relating to that Confidential Information prepared by, or on behalf of, it (save to the extent that first party is required by applicable law to maintain a copy of such information or as required by the first party to exercise any rights and licences that survive termination or expiry, including in the case of the Buyer to manufacture and commercialise Products following Technical Transfer in accordance with this Agreement) and, at the other party’s request, undertake to the other party in writing that it has complied with the provisions of this clause 16; and

 

16.1.5.           the Supplier shall promptly collect, pack and make ready for delivery to the Buyer all Tooling, and follow all reasonable directions of the Buyer with respect to the disposition of such Tooling. In the event that the Buyer has not achieved the Purchase Terms with respect to any items of Tooling as of the termination of this Agreement, the Buyer shall pay the Supplier the unamortised portion of the purchase price thereof within thirty (30) days following the termination date, and the Supplier shall take such actions as the Buyer may reasonably request to confirm the Buyer’s exclusive right, title and interest therein promptly following receipt of such payment, including tendering such Tooling for shipment in accordance with this clause.

 

17.                               ASSIGNMENT AND THIRD PARTY RIGHTS

 

17.1.                     Save as provided in clause 17.2 neither the benefit nor the obligations of this Agreement or of any provision of it may be assigned or transferred by either party without the prior written consent of the other.

 

17.2.                     The benefit subject to the obligations of this Agreement shall be assignable by the Buyer to any Affiliate of the Buyer or to the purchaser of all or a substantial part of the business of the Buyer (or any other Affiliate of the Buyer) and in the event of such assignment, the Buyer shall with effect from such assignment be released from its obligations hereunder and all references in this Agreement to the Buyer shall be deemed to include its assigns.

 

17.3.                     Any Affiliate of the Buyer may place orders under this Agreement (which orders shall be placed through one or more nominated contact points as agreed between the parties from time to time) and may accordingly in their own right enforce the provisions of this Agreement, as though it were the Buyer, provided that (a) each Affiliate of the Buyer that places an order shall by doing so be deemed to have assumed the Buyer’s obligations under this Agreement,

 

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and (b) the Buyer shall remain obligated for the performance of all of the obligations of the Buyer and Affiliate of the Buyer arising from this paragraph.

 

17.4.                     The Buyer, or as the case may be any Affiliate of the Buyer, may upon written notice require that the Supplier deliver the Products from any order (in whole or part) to the place of business of the Buyer or any agent or sub-contractor of the Buyer or as the case may be any Affiliate of the Buyer provided however that such place of delivery is in the UK and that such notice(s) shall not affect the Buyer’s obligations hereunder and such notice shall not be deemed to be any assignment of the benefits or obligations of the Buyer hereunder. The Supplier may charge the Buyer (on a pass­ through basis) for any reasonable additional costs properly incurred by the Supplier as a direct result of a change of delivery destination.

 

18.                               FORCE MAJEURE

 

18.1.                     If either party (the “Affected Party”) is prevented or delayed in the performance of any of its obligations under this Agreement as a result of civil commotion, embargo, governmental legislation or regulation, riot, invasion, war, threat of or preparation for war, fire, explosion, storm, flood, earthquake, subsidence, epidemic or other natural physical disaster or other event beyond the reasonable control of a party that has not occurred as a result of its negligence or other act or omission and which was not reasonably foreseeable (“Force Majeure Event”), it shall notify the other party, in writing, of the same as soon as practicable, fully detailing the background to, and all relevant matters connected with, such Force Majeure Event, together with such evidence thereof that it reasonably can give and specifying the period for which such prevention or delay can reasonably be expected to continue. The Affected Party shall use its reasonable endeavours to remove or overcome such Force Majeure Event as quickly as possible and shall also use its reasonable endeavours to mitigate the impact of such Force Majeure Event of the other party. Subject to clause 18.2, if the Affected Party has fully complied with its obligations under this clause 18.1, it shall be excused from performance of its unfulfilled obligations under this Agreement from the date of such notice until such Force Majeure Event no longer pertains.

 

18.2.                     If a Force Majeure Event prevents performance by the Affected Party of any obligations hereunder for a continuous period in excess of eight (8) weeks, the other party shall be entitled to terminate this Agreement by written notice at any time after such 8 week period provided the relevant Force Majeure Event remains subsisting at the time such notice is given.

 

19.                               BUSINESS CONTINUITY PLAN

 

19.1.                     The parties acknowledge that the regulatory requirements and associated timescales involved in switching manufacture of the Products to an alternative supplier are significant and as such the Supplier’s business continuity plan shall focus on risk I minimisation and mitigation to maintain the Supplier as the manufacturer of the Products. Within three (3) months of start of production or thirty (30) days of the Buyer’s request, whichever is the sooner, the Supplier will provide the Buyer with a detailed, written business interruption and recovery plan, including business impact and risk assessment, crisis management, information technology disaster recovery, and business continuity (including plans to source Raw Materials and how a Technology Transfer would be performed in the event of an emergency) (the “BCP Plan”).

 

19.2.                     The Supplier will update the BCP Plan annually and provide a copy to the Buyer on 31 July each year demonstrating risk mitigation against the previous year. Such BCP Plan shall be discussed as part of the annual review set out in clause 7.1 above and the Supplier agrees to adhere to the BCP Plan, including any modifications or changes mutually agreed between the parties.

 

19.3.                     The Supplier will notify the Buyer in writing within twenty-four (24) hours of any activation of the BCP Plan.

 

19.4.                     Subject to clause 18, the Supplier agrees that in the event that the BCP Plan is activated and during such activation the Buyer, acting reasonably, concludes that the Supplier is not able to

 

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fulfil its obligations under this Agreement and the Products will go out of stock in markets, on the Buyer’s request the Supplier will perform, at the Buyer’s cost (as to reasonable expenses properly incurred), an emergency Technology Transfer to a third party identified by the Buyer as an alternative source of manufacture of the Products and the Buyer’s obligations to purchase Products exclusively from the Supplier as set out under this Agreement shall cease to apply.

 

19.5.                     If the Supplier’s ability to supply the Products to its customers becomes limited due to a Force Majeure Event, or otherwise limited due to circumstances not foreseen by this Agreement, such that the Supplier is making allocations of Raw Materials (other than Raw Materials supplied by the Buyer (if any), which may not be allocated) on a pro rata basis between Products and products of third party customers to its customers, the Supplier undertakes that it shall nevertheless use all reasonable endeavours to supply the Buyer with its requirement of Raw Materials (or such other pro rata volume as is agreed with the Buyer) as evidenced by any unfulfilled Order and in accordance with the terms of this Agreement.

 

20.                               DISPUTE RESOLUTION

 

20.1.                     Prior to the beginning of any arbitration process the parties hereby undertake to attempt to resolve any dispute arising under or in relation to this Agreement by way of negotiation between senior executives of the parties who have authority to settle such dispute, subject to the Buyer’s rights under clause 14.3. In furtherance of the foregoing, any party shall initiate the negotiation by way of a notice (an “Escalation Notice”) demanding an in-person meeting or telephone conference involving representatives of the parties at a senior level of management of the parties.

 

20.1.1.           A copy of any Escalation Notice shall be given to, as a first stage (i) the Supplier’s SVP Health Supply on the one hand, and (ii) the Buyer’s Supply Director on the other, who shall meet and seek to resolve such issue within fourteen (14) days of such matter being referred to them (or within such longer period as the parties may agree in writing prior to the expiration of the initial fourteen (14) day period), and if the matter is not resolved between these parties within such fourteen (14) day period either of the representatives of such party may refer the matter to the second stage escalation as set out below.

 

20.1.2.           As a second stage escalation, the matter shall be referred to (i) the Supplier’s EVP Global Supply on the one hand, and (ii) the Buyer’s Group Finance Director on the other hand, who shall meet and seek to resolve such issue within fourteen (14) days of such matter being referred to them (or within such longer period as the parties may agree in writing prior to the expiration of the initial fourteen (14) days period).

 

20.1.3.           In the event agreement cannot be reached in accordance with clauses 20.1.1 and 20.1.2, or clause 14.3 (as applicable) the dispute will be subject to arbitration as described in clauses 20.3 and 20.6.

 

20.2.                     The costs of the arbitration shall be fixed by the arbitral tribunal and shall be borne by the unsuccessful party, unless the arbitral tribunal, in its discretion, determines a different apportionment, taking all relevant circumstances into account. The costs of arbitration include: (i) the fees and disbursements of the arbitrator, (ii) the reasonable fees, travel and other expenses of expert witnesses, and (iii) the costs of legal representation and assistance, to the extent that the arbitral tribunal determines that the amount of such costs is reasonable.

 

20.3.                     The arbitral tribunal shall endeavour to issue its award within sixty (60) days of the last hearing of the substantive issues in dispute between the parties; however, the arbitral tribunal shall not lose jurisdiction if it fails to respect this timescale. The arbitral award shall be final and binding.

 

20.4.                     Neither the parties (including their auditors and insurers) nor their counsel and any person necessary to the conduct of the arbitration nor the arbitrators shall disclose the existence, content, (including submissions and any evidence documents presented or exchanged), or

 

30

 

results of any arbitration hereunder without the prior written consent of the parties, except as required by law or the applicable rules of a stock exchange.

 

20.5.                     The existence of a dispute with respect to this Agreement between the parties shall not relieve either party from performance of its obligations under this Agreement that are not the subject of such dispute.

 

20.6.                     This Agreement shall be governed by and construed in accordance with the laws of England and Wales, save as to conflict of law provisions. If any dispute is not resolved in accordance with clause 20.1, the matter shall then be referred to arbitration to be conducted under the auspices of the London Court of International Arbitration. Proceedings will be heard by a single arbitrator and held in London in English and subject to the Arbitration Act 1996.

 

21.                               CODE OF CONDUCT

 

21.1.                     The Supplier shall comply with the Buyers Code of Conduct referred to in Schedule Eight hereto and shall otherwise comply with all applicable national legal requirements, customs, and accepted international standards pertaining to employment and manufacturing.

 

22.                               MISCELLANEOUS

 

22.1.                     If there is any inconsistency between the terms and conditions set out in this Agreement and the terms and conditions set out in any quotation, order, acknowledgement or invoice, the terms and conditions of this Agreement shall prevail to the extent of the inconsistency.

 

22.2.                     If there is any inconsistency between the terms and conditions set out in this Agreement and the terms and conditions set out in the Technical Agreement with respect to quality-related activities, including, without limitation, compliance with cGMP, the terms and conditions of the Technical Agreement shall prevail to the extent of the inconsistency. If there is any inconsistency between the terms and conditions set out in this Agreement and the terms and conditions set out in the Technical Agreement with respect to commercial matters, including, without limitation, allocation of risk, liability and financial responsibility, the provisions of this Agreement shall prevail to the extent of the inconsistency.

 

22.3.                     This Agreement, the Specification or any Order may only be amended, modified or varied by the parties by an instrument in writing signed on behalf of each of the parties.

 

22.4.                     The waiver by either party of any right under this Agreement or of any failure to perform or breach hereof by the other party shall not constitute or be deemed to be a waiver of any other or future right hereunder or of any other failure to perform or breach hereof by such other party, whether of a similar or dissimilar nature.

 

22.5.                     All notices, consents, approvals or other communications hereunder shall be in writing and shall be delivered personally or by registered or certified mail, postage prepaid, or sent by fax, addressed to the authorised personnel at relevant party and at such address as each party shall from time to time notify to the other in writing. Any such notice, consent, approval and other communication shall be deemed given, in the case of personal delivery, on the date of delivery, in the case of mailing, on the fifth day following its deposit in the mail and in the case of a fax, on the next business day after the day of transmission provided the sender’s facsimile machine produces a report showing complete and successful transmission to the correct facsimile number.

 

22.6.                     The expiration or earlier termination of this Agreement will not operate to release either party hereto from its obligations under clauses 3.8, 10, 11, 13.1 and 13.9 or 16 which obligations will survive such expiration or termination, or from any liability which has already accrued to the other party as of the date of expiration or termination or which may thereafter accrue in respect of any act, omission or default occurring prior to expiration or termination.

 

22.7.                     Nothing in this Agreement shall constitute or be deemed to constitute the creation of a partnership, agency, or employer/employee relationship between the parties.

 

31

 

22.8.                     This Agreement, together with the Specifications, Technical Manual and the Schedules attached hereto, constitutes the entire agreement and understanding of the parties and supersedes any previous agreement between the Buyer and the Supplier and their Affiliates in relation to the subject matter of this Agreement.

 

22.9.                     If any provision of this Agreement is held by any court or other competent authority to be invalid or unenforceable in whole or in part it shall be deemed severed from this Agreement and the validity of the other provisions and the remainder of the provision in question shall not be affected.

 

22.10.              This Agreement may be executed in one or more counterparts, all of which shall be considered as one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties.

 

22.11.              All royalties, taxes and duties imposed or levied on any Products delivered hereunder shall be for the account of and paid by the Supplier to the point where the Products have been delivered DAP. All royalties, taxes and duties imposed or levied on the Products after such delivery shall be for the account of and paid by the Buyer.

 

32

 

SCHEDULE ONE

 

THE PRICES

 

1.                                      Prices

 

The parties acknowledge that the Price consists of three components:

 

1)                                     Actual costs associated with Raw Materials, manufacture and delivery of the Products (expressly excluding the API) (“Manufacturing Costs”) consisting of 3 components:

 

a.                                      Raw Materials Manufacturing Cost;

 

b.                                      Direct Manufacturing Costs; and

 

c.                                       Indirect Manufacturing Costs.

 

2)                                     The cost of the API, which includes the API per tablet and an agreed assumed waste level as set out in Schedule 5 which is acknowledged as being lost in the manufacturing process (“Assumed API Costs”), meaning that any reductions in the  waste of API shall be for the benefit of the Supplier, and any failure to meet the agreed waste targets shall be at the Supplier’s sole cost; and

 

3)                                     [***]% margin on Manufacturing Costs, as agreed between the parties in accordance with clause 7.1 for the first [***] years after the Commencement Date and  increasing from [***] per cent ([***]%) to [***] per cent ([***]%) on the [***] anniversary of the Commencement Date and increasing from [***] per cent ([***]%) to [***] per cent ([***]%) on the [***] anniversary of the Commencement Date.

 

API will be sold to the Supplier upon taking title to the API in accordance with clause 6.2.3.2. The Supplier will each week notify the Buyer of the volume of API used and will be invoiced by the Buyer for such volume of API at the Buyer’s then current Price for the API at the time of transfer of title (and for the sake of clarity not the price at the time of delivery to the  Supplier).

 

Any change in the cost of API shall mean the Assumed API Costs part of the Price for the Product shall be varied pro rata (such that by way of example only a [***] per cent ([***]%) increase in the API Price would mean a corresponding [***] per cent ([***]%) increase in the Assumed API Costs part of the Price for the Products, but the Manufacturing Costs shall remain unaffected).

 

2.                                      Price Reviews and Budgeting Process

 

The parties agree that the Manufacturing Costs and Assumed API Costs shall be fixed under this Agreement until 31 December 2016.

 

The parties agree that thereafter the Manufacturing Costs shall be reviewed every year, and each such review shall commence by the Buyer notify the Supplier of (i) the number of Products that the Buyer anticipates ordering from the Supplier during the following calendar year (the “Budget Order Volume”) (the initial Budget Order Volume, effective until calendar year ending 31 December 2016, shall be [***] Products per year (on a pro rata basis from the Commencement Date until 31 December 2015)) and (ii) the Assumed API Costs for the purpose of the Price before 31 May each year. Following the Buyers provision of such information, by 1 July of the then current year the Supplier shall produce an updated proposed FOS and by 31 July the Supplier shall produce a Price list using the principles set out below.

 

Within fourteen (14) days (or such other period agreed between the parties) following provision of an updated proposed FOS and Price list the parties shall hold a price review. The first such review shall take place following the Supplier’s first proposal for the year 2017 (to be made within fourteen (14) days (or such other period agreed between the parties) of provision of the updated proposed FOS and Product Price list to be supplied before 31 July 2016).

 

33

 

The parties agree that the updated proposed FOS and Price list shall be calculated based on the below principles which can be assessed and discussed at such pricing review:

 

·                  Raw Materials Manufacturing Cost are revised based on the actual cost thereof (averaged over a one (1) year period), on a pass through basis;

 

·                  Direct Manufacturing Cost are fixed on a price per Product basis for the duration of the Agreement save for adjustment every year (based on the ILCH since the previous adjustment) as part of a price review as set out in clause 7.1; and

 

·                  Indirect Manufacturing Costs shall be calculated according to the methodology used in the 2015 FOS (attached). The Supplier shall calculate its allocation of Indirect Manufacturing Costs per Product by dividing the Indirect Manufacturing Costs across the Budget Order Volume (the “Indirect Manufacturing Cost Product Allocation”). The Supplier shall provide the Buyer with reasonable supporting explanation of its calculation of Indirect Manufacturing Cost and Indirect Manufacturing Cost Product Allocation.

 

Following such review the parties shall agree proposed pricing and the Supplier shall create the revised FOS and revised Price list which shall be supplied to the Buyer for approval by the 31 August of the then current year, whereupon it shall be binding for the forthcoming year. In the absence of any approved FOS and Price list by such date, either party may serve notice on the other that it is to escalate the matter in accordance with clause 20.1.

 

3.                                      Exceptional Price reviews

 

The parties agree that following 1 January 2017 either party may request a review of Raw Materials Manufacturing Costs if:

 

·                  the cost of a key Raw Material has varied +/- [***] per cent ([***]%) over a period of six (6) months due to demonstrable feed-stock changes {provided always such  exceptional price review shall be limited to the key Raw Material in question and any variation is limited only to the applicable variation associated with the key Raw  Material); or

 

·                  a Price is agreed for new Product based on anticipated volumes, six (6) months has elapsed since launch of such new Product and a party wishes to discuss price for such new Product based on further information regarding sales volumes of such new Product (such Price review being particular to the Price for such new Product only).

 

4.                                      Indirect Manufacturing Costs and reconciliation

 

By 31 January of such each calendar year, the Supplier shall:

 

(a)                                 perform a reconciliation of the Indirect Manufacturing Costs incurred by the Supplier during the previous calendar year, by reference to the actual number of Products ordered by the Buyer (the “Actual Order Volume”) against the Budget Order Volume for such calendar year; and

 

(b)                                 within five (5) Business Days of the date of reconciliation:

 

(i)                                     if the Actual Volume is less than the Budget Order Volume (other than as a result of breach by the Supplier of this Agreement), invoice the Buyer for a sum equal to (Budget Order Volume less Actual Volume) multiplied by the Indirect Manufacturing Cost Product Allocation, which invoice shall be paid by the Buyer within sixty (60) days of receipt thereof; or

 

(ii)                                  if the Actual Volume is more than the Budget Order Volume, reimburse the Buyer a sum equal to Actual Volume less Budget Order Volume) multiplied by the Indirect Manufacturing Cost Product Allocation.

 

34

 

Appendix 1 - Initial FOS

 

35

 

[***]

 

36

 

SCHEDULE TWO

 

THE PRODUCTS (AND SERVICES IF ANY)

 

Finished Products

 

[***]

 

Services

 

·                  [***]

 

·                  [***]

 

37

 

SCHEDULE THREE

 

TEMPORARY ADDITIONAL SERVICES

 

[***]

 

38

 

SCHEDULE FOUR

 

THE SPECIFICATION

 

[***]

 

39

 

SCHEDULE FIVE

 

KPIs

 

[***]

 

40

 

SCHEDULE SIX

 

BUYER’S PALLET POLICY

 

EPAL pallets to be used for storage and shipment unless specified otherwise.

 

41

 

SCHEDULE SEVEN

 

TOOLING AND EXISTING TOOLING

 

[***]

 

42

 

SCHEDULE EIGHT

 

BUYER’S CODE OF CONDUCT

 

http://www.rb.com/Our-responsibility/Our-policies-reports or as otherwise updated and notified to the supplier from time to time.

 

43

 

SCHEDULE NINE

 

RAW MATERIALS SUBJECT TO BUYER PRE-APPROVAL

 

44

 

[***]

 

45

 

SCHEDULE TEN

 

ANTICIPATED CHANGES AND PARTY BEARING COST

 

Costs shall, in each applicable case, be subject to the Buyer approving such costs prior to them being incurred by the Supplier.

 

	
Scenario
    	
 
    	
Initiator
    	
 
    	
Party
   bearing
   costs
    	
 
    	
Note
    
	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    

 

[***]

 

46

 

SCHEDULE ELEVEN

 

Consignment API stock arrangements

 

In this Schedule “API Specification” means the specification for the API as set out in the Technical Manual.

 

1                                         Title and API Specifications

 

1.1                               Title in the API shall pass to the Supplier at the point the same is removed from consignment stock for consumption by the Supplier. The Supplier shall use such procedures (physical and administrative) as are reasonably necessary and customary to keep separate the API from the Supplier’s other stock and to identify the API as the property of the Buyer.

 

1.2                               The API shall comply with the API Specifications.

 

2                                         Reporting and audit

 

2.1                               No later than five Business Days after the end of the previous calendar month, the Supplier will submit to the Buyer by email a report stating in detail the Product removed from consignment stock for consumption by the Supplier since the immediately preceding calendar month. Following delivery of such report, the Buyer may invoice the Supplier for the API detailed in such report at the Unit Price and each such invoice shall be payable in accordance with the terms of clause 7 of this Agreement mutatis mutandis.

 

2.2                               Once a month, the Supplier and the Buyer shall each provide to the other a stock list, being its believed level of API (being the amount of API delivered, less that removed from consignment stock for consumption by the Supplier and less that rejected in accordance with the terms of this Agreement).

 

2.3                               In the event of any inconsistency between the reports exchanged pursuant to paragraph 2.2, the parties shall commence immediate good faith negotiations to resolve the inconsistency. Following resolution, the Buyer shall promptly issue an invoice or credit note to address such agreed inconsistency.

 

2.4                               At reasonable intervals (and in any event at least once a year), the Buyer shall perform (or have performed by its representative) a physical audit of the inventory of the API held at the Supplier’s site. In the event of any inconsistency between the physical level of API at such site and that which the Buyer believes should be present, the parties shall commence immediate good faith negotiations to resolve the inconsistency. Following resolution, the Buyer shall promptly issue an invoice or credit note to address such agreed inconsistency. If such agreement cannot be reached the parties will request adjudication from an independent third party acting as expert, the cost of which shall be borne equally between the parties. Should the parties not be able to agree on an expert they shall request a nomination from the President of the Institute of Chartered Accountants in England and Wales or any successor body to that institution.

 

47

 

	
SIGNED by
    	
 
    	
/s/ Patrick   Clements
    
	
for and on behalf of Reckitt Benckiser Healthcare   (UK) Limited 
    	
 
    	
PATRICK CLEMENTS
    
	
in the presence of:
    	
 
    	
SAIQA PANDAY
    
	
 
    	
 
    	
[***]
    
	
 
    	
 
    	
/s/ S. Panday
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SIGNED by
    	
 
    	
/s/ Richard Jameson
    
	
for and on behalf of RB Pharmaceuticals Limited
    	
 
    	
RICHARD JAMESON
    
	
in the presence of:
    	
 
    	
Steven Lucas
    
	
 
    	
 
    	
[***]
    
	
 
    	
 
    	
/s/ Steven LucasEXHIBIT 4.9

 

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST.  REDACTED MATERIAL IS MARKED WITH [***] AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

Dated             1 December 2014

 

RECKITT BENCKISER HEALTHCARE (UK) LIMITED

 

and

 

RB PHARMACEUTICALS LIMITED

 

 

LEASE

 

of land and buildings at

 

Dansom Lane, Hull HU8 7DS

 

 

Commencement                        1 December 2014

 

Term:                                                      150 years

 

Slaughter and May

One Bunhill Row

London EC1Y 8YY

Tel No: 020 76000 1200

Fax N: 020 7090 5000

Ref: JEE/RXZA

524803911

 

 

PARTICULARS

 

	
LR1.
    	
 
    	
Date of lease
    	
 
    	
:
    	
 
    	
2014
    
	
LR2.
    	
 
    	
Title number(s)
    	
 
    	
:
    	
 
    	
LR2.1 Landlord’s title number(s)
    
 HS304843, HS286962, HS321544
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
LR2.2 Other title numbers
    
 HS210540, HS341298, HS189949
    
	
LR3.
    	
 
    	
Parties to this Lease
    	
 
    	
:
    	
 
    	
Landlord
    
    RECKITT BENCKISER HEALTHCARE (UK) LIMITED   (registered in England number 00261312) whose registered office is at 103-105   Bath Road, Slough, Berkshire SL1 3UH
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Tenant
    
 RB PHARMACEUTICALS LIMITED (registered in England number   07183451) whose registered office is at 103-105 Bath Road, Slough, Berkshire   SL1 3UH
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Other Parties
    
 None
    
	
LR4.
    	
 
    	
Property
    	
 
    	
:
    	
 
    	
The land and buildings at Dansom Lane, Hull HU8 7DS as   registered at the Land Registry under title numbers HS304843, HS286962 and   HS321544 shown edged red on the Plan.
    
    In the case of a conflict between this clause   and the remainder of this Lease then, for the purposes of registration, this   clause shall prevail.
    
	
LR5.
    	
 
    	
Prescribed statements etc.
    	
 
    	
 
    	
 
    	
None
    
	
LR6.
    	
 
    	
Term for which the Property is leased
    	
 
    	
:
    	
 
    	
The Term is as follows:
    
    150 years commencing on and including the date of this Lease
    
	
LR7.
    	
 
    	
Premium
    	
 
    	
:
    	
 
    	
[***] pounds (£[***])
    
	
LR8.
    	
 
    	
Prohibitions or restrictions on disposing of this Lease
    	
 
    	
:
    	
 
    	
This lease contains a provision that prohibits or restricts   dispositions.
    
	
LR9.
    	
 
    	
Rights of acquisition etc.
    	
 
    	
:
    	
 
    	
LR9.1 Tenant’s contractual rights to renew this   Lease, to acquire the reversion or another lease of the Property, or to   acquire an interest in other land
    

 

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Schedule 7
    
    LR9.2 Tenant’s covenant to (or offer to)   surrender this Lease
    
    Schedule 6
    
    LR9.3 Landlord’s contractual rights to acquire   this lease
    
    Schedule 6
    
	
LR10.
    	
 
    	
Restrictive covenants given in this Lease by the Landlord in   respect of land other than the Premises
    	
 
    	
:
    	
 
    	
None
    
	
LR11.
    	
 
    	
Easements
    	
 
    	
:
    	
 
    	
LR11.1 Easements granted by this Lease for the   benefit of the Property
    
    Schedule 1
    
    LR11.2 Easements granted or reserved by this   Lease over the Property for the benefit of other property
    
    Schedule 2
    
	
LR12.
    	
 
    	
Estate rentcharge burdening the Property
    	
 
    	
:
    	
 
    	
None
    
	
LR13.
    	
 
    	
Application for standard form of restriction
    	
 
    	
:
    	
 
    	
The parties to this Lease apply to enter the following standard   form of restriction against the title of the Premises:
    
    “No disposition of the registered estate by the proprietor of   the registered estate or by the proprietor of any registered charge, not   being a charge registered before the entry of this restriction, is to be   registered without a certificate signed by Reckitt Benckiser Healthcare (UK)   Limited or their conveyancer that the provisions of paragraph 3.20(E) of   Schedule 3 to the Lease dated                2014   and made between Reckitt Benckiser Healthcare (UK) Limited (1) and RB   Pharmaceuticals Limited (2) have been complied with or do not apply to   the disposition.”
    
 The Parties to this Lease apply to enter the following standard   for of restriction against the 
    

 

ii

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Landor’s title numbers HS304843, HS286962 and HS321544.
    
    “No transfer of the registered estate by the proprietor of the   registered estate is to be registered without a certificate signed by a   conveyancer that the provisions of paragraph 5.4(A) of Schedule 5 to the   Lease dated 1 December 2014 and made between Reckitt Benckiser   Healthcare (UK) Limited (1) and RB Pharmaceuticals Limited (2) have   been complied with or do not apply to the disposition.”
    
	
LR14.
    	
 
    	
Declaration of trust where there is more than one person   comprising the Tenant
    	
 
    	
:
    	
 
    	
Not applicable
    

 

iii

 

THIS LEASE is made on the date specified in the Particulars between the Landlord and the Tenant.

 

THIS DEED WITNESSES as follows:

 

1.                                      INTERPRETATION

 

1.1                               In this Lease, except where the context otherwise requires, the following words and expressions have the following meanings:

 

“Break Date” means, as applicable, the 50th, 70th, 90th, 110th and 130th anniversaries of the date of this Lease, namely 1 December 2064, 1 December 2084, 1 December 2104, 1 December 2124 and 1 December 2144;

 

“Business Day” means a day which is not a Saturday, a Sunday, Christmas Day, Good Friday or a bank holiday in England and Wales;

 

“Car Parking” has the meaning given to it in paragraph 1.4 of Schedule 1;

 

“Car Parking Rent” has the meaning ascribed in Schedule 4, Part B;

 

“Change of Control” means a change in control of a company where “control” means in relation to a company, the ability of a person to ensure that the activities and business of that company are conducted in accordance with the wishes of that person, and a person shall be deemed to have Control of a company if it possesses or is entitled to acquire the majority of the issued share capital or the voting rights in that company or the right to receive the majority of the income of that company on any distribution by it of all of its income or the majority of its assets on a winding up, and “controls” “controlled” and the expression “change of control” shall be construed accordingly but excluding the Demerger;

 

“Conduits” means any existing or future media for the passage of substances, matter or energy and all other utilities, data communications and services whether or not they are available at the date hereof and any ancillary apparatus attached to them and any enclosures for them;

 

“Consents” means all requisite licences, consents, permissions and approvals from the relevant local and other competent authorities and from the insurers and any other persons interested in the Premises;

 

“Contractual Term” means the term of years specified in the Particulars;

 

“Default Interest Rate” means [***] per cent per annum above the base rate of Barclays Bank PLC from time to time;

 

“Demerger” means the transaction pursuant to which the addiction pharmaceutical treatment business, the majority of which is currently carried on within the Reckitt Benckiser group by RBP Global Holdings Limited and its subsidiary undertakings, ceases to be directly or indirectly controlled by Reckitt Benckiser Group PLC;

 

 

“Estate” means the Hull industrial estate shown edged green on the Plan registered with title numbers HS304843, HS286962, HS321544, HS210510, HS341298 and HS189949 and as may be varied from time to time by the Landlord;

 

“Estate Common Parts” means the roads, access ways, passages and landscaped areas within the Estate from time to time available for the use in common by more than one tenant or occupier of the Estate and their respective employees, agents, visitors or licensees;

 

“Estate Roads” means the access roads and footpaths on the Estate Common Parts at the date of this Lease, as the same may be amended and/or re-routed from time to time;

 

“Indivior Group” means Indivior PLC (registered in England number 9237894) whose registered office is at 103-105 Bath Road, Slough, Berkshire SL1 3UH (“Indivior PLC”), all of the subsidiaries of Indivior PLC from time to time and any other members of the same group;

 

“Insured Risks” means (to the extent available in the London insurance market on terms commercially acceptable to the Tenant (acting reasonably)) fire, lightning, explosion, riot, civil commotion, strikes, labour and political disturbances, malicious damage, aircraft and aerial devices (other than hostile aircraft and devices) and articles accidentally dropped from them, acts of terrorism, storm, tempest, bursting or overflowing of water tanks and pipes, impact, earthquake, subsidence, ground slip and heave and such other property risks as the Tenant may from time to time elect to insure;

 

“Landlord” means the Landlord specified in the Particulars or such other person as may from time to time be entitled to the Reversion;

 

“Lease” means this Lease and any instrument made under it or collateral to it;

 

“Mortgagee” means a mortgagee or chargee of the Premises notice of whose interest the Landlord has been given in accordance with the terms of this Lease;

 

“Permitted Underlease” means an underlease of the whole of the Premises which is granted:

 

(i)                                     on the same terms and conditions as this Lease so far as applicable;

 

(ii)                                  at not less than the then open market rent payable at the date of the underletting;

 

(iii)                               without any fine or premium being given by any party;

 

(iv)                              containing an absolute prohibition against the undertenant assigning, charging, underletting, parting with possession or sharing the occupation of part only of the premises underlet;

 

(v)                                 containing a prohibition against the undertenant assigning or underletting the whole of the premises except with the Tenant’s consent provided that such consent shall only be given after the Tenant has first complied with the provisions of paragraph 3.20(E) Schedule 3 and Schedule 6 as if the proposed assignment or

 

2

 

underletting by the Tenant’s undertenant were an assignment or underletting (as applicable) by the Tenant itself;

 

(vi)                              without allowing a rent free or concessionary rent period in excess of that reasonably obtainable in the open market at the date of the underletting; and

 

(vii)                           on terms that the provisions of sections 24 to 28 of the Landlord and Tenant Act 1954 are excluded;

 

“Permitted Use” means any use within Use Classes B1, B2 and B8 of the Town and Country Planning (Use Classes) Order 1987 as at the date that this Lease is granted, including as a fine chemical plant, for research and development, offices, distribution and other industrial purposes;

 

“Plan” means the plan annexed to this Lease;

 

“Planning Acts” means the Town and Country Planning Act 1990, the Planning (Listed Buildings and Conservation Areas) Act 1990, the Planning (Consequential Provisions) Act 1990, the Planning and Compensation Act 1991, the Planning and Compulsory Purchase Act 2004 and the Planning Act 2008;

 

“Premises” means the Property specified in the Particulars; “Premium” has the meaning specified in the Particulars; “Principal Rent” means a peppercorn per annum;

 

“RB Group” means Reckitt Benckiser PLC whose registered office is at 103-105 Bath Road, Slough, Berkshire SL1 3UH (registered in England and Wales No. 00527217) (“Reckitt Benckiser PLC”), all of the subsidiaries of Reckitt Benckiser PLC from time to time and any other members of the same group;

 

“Rent Payment Dates” means the usual quarter days being 25 March, 24 June, 29 September and 25 December;

 

“Reversion” means the reversion in the whole of the Premises immediately expectant on the determination of the Term;

 

“Services” means the services referred to in Part II of Schedule 4; “Service Charge Rent” has the meaning ascribed in Schedule 4, Part A; “Statute” means:

 

(i)                                     an Act of Parliament or sub-ordinate legislation; and

 

(ii)                                  a law, decree or direction of the European Community or other supranational body having effect as law in the United Kingdom

 

now or from time to time in force;

 

“Tenant” means the Tenant specified in the Particulars and its successors in title;

 

“Term” means the Contractual Term and the period of any statutory or other holding over, continuation or extension of it;

 

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“Title Matters” means the matters contained or referred to in the registers of the title number(s) HS304843, HS286962 and HS321544 (other than any financial charges) as at                 2014 insofar as the same affect the Premises and are subsisting and capable of being enforced; and

 

“VAT” means value added tax.

 

1.2                               This Lease incorporates the Particulars.

 

1.3                               In this Lease, unless otherwise specified;

 

(A)                               a reference to a Clause or a Schedule is a reference to a Clause of or a Schedule to this Lease;

 

(B)                               a reference to a paragraph is a reference to a paragraph of the Schedule in which the reference appears;

 

(C)                               headings to Clauses and paragraphs are for convenience only and do not affect the interpretation of this Lease;

 

(D)                               words in this Lease denoting the singular include the plural meaning and vice versa;

 

(E)                                a covenant by the Tenant not to do any act, matter or thing includes a covenant not to cause, permit or suffer the doing of it;

 

(F)                                 a reference to a particular Statute or a statutory provision is a reference to it as it may have been or may in the future be amended, modified or re-enacted and to any regulation, statutory instrument, order, byelaw, direction or other provision that may have been made or may in the future be made under it;

 

(G)                               the expressions “landlord covenant” and “tenant covenant” have the meanings ascribed to them in section 28(1) of the Landlord and Tenant (Covenants) Act 1995;

 

(H)                              where a party consists of two or more persons the obligations of such persons are joint and several;

 

(I)                                   a reference to “Premises” includes a reference to any part of the Premises and improvements and additions made to, and fixtures, fittings and appurtenances in, the Premises (other than tenant’s and trade fixtures and fittings);

 

(J)                                   a reference to “end of the Term” includes the coming to an end of the Term in any way including termination, expiration, surrender, frustration and forfeiture; and

 

(K)                               for the purposes of this Lease, two companies are “members of the same group” if one is the subsidiary of the other, or both are subsidiaries of a third company, “subsidiary” having the meaning given to it in the Companies Act 2006.

 

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2.                                      DEMISE

 

In consideration of the Premium paid by the Tenant to the Landlord (receipt of which the Landlord acknowledges) the Landlord demises the Premises to the Tenant with full title guarantee together with the easements and rights specified in Schedule 1 except and reserved to the Landlord and all persons authorised by the Landlord or otherwise entitled the easements and rights specified in Schedule 2 to hold the Premises subject to the Title Matters for the Contractual Term yielding and paying to the Landlord:

 

(i)                                     the Principal Rent if demanded;

 

(ii)                                  the Service Charge Rent at the times set out in Schedule 4, Part A, the first payment in respect of the period commencing on the date of this Lease to be made on the date of this Lease; and

 

(iii)                               the Car Parking Rent at the times set out in Schedule 4, Part B, the first payment in respect of the period commencing on the date of this Lease to be made on the date of this Lease.

 

3.                                      TENANT COVENANTS

 

The Tenant covenants with the Landlord to comply with the obligations in Schedule 3.

 

4.                                      LANDLORD COVENANTS

 

The Landlord covenants with the Tenant that the Tenant may peaceably hold and enjoy the Premises without any interruption by the Landlord or any person lawfully claiming under or in trust for it or by title paramount.

 

5.                                      PROVISIONS

 

This Lease incorporates:

 

(i)                                     the service charge provisions and the Car Parking Rent provisions in Schedule 4; and

 

(ii)                                  the further provisions in Schedule 5,

 

and the Landlord and the Tenant covenant with one another to comply with their respective obligations in such Schedules.

 

6.                                      RE-ENTRY

 

6.1                               Subject to Clause 6.2 and 6.3, without prejudice to any other rights or remedies of the Landlord, if:

 

(i)                                     any undisputed rents reserved by this Lease is in arrears for more than three calendar months after it becomes due and being legally demanded; or

 

(ii)                                  there is any material breach of any of the tenant covenants in this Lease and (where remediable) the Tenant has failed to remedy the breach within three months of written notice from the Landlord,

 

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then the Landlord may notwithstanding any previous waiver re-enter the Premises or any part thereof in the name of the whole and forfeit this Lease whereupon the Term shall come to an end without prejudice to either party’s rights against the other or any other person.

 

6.2                               The Landlord may not exercise the right of re-entry contained in Clause 6.1 unless it has first given to any Mortgagee not less than 20 Business Days’ notice of its intention to do so and specifying the relevant breach.  The Landlord may serve such notice on the Mortgagee on or around the same time as it serves notice on the Tenant.

 

6.3                               The Landlord may not exercise the right of re-entry contained in Clause 6.1 for so long as the Tenant is RB Pharmaceuticals Limited or any other member of the Indivior Group, unless and until the earlier of:

 

(i)                                     the Tenant ceasing to be a member of the Indivior Group; or

 

(ii)                                  a Change of Control of Indivior PLC,

 

after which this Clause 6.3 is of no further effect.

 

7.                                      NEW TENANCY

 

This Lease is a new tenancy for the purposes of the Landlord and Tenant (Covenants) Act 1995.

 

8.                                      TENANT’S OPTION TO BREAK

 

8.1                               Subject to Clause 8.2, if the Tenant gives to the Landlord not less than 12 months’ prior written notice before a Break Date then this Lease and the Contractual Term shall come to an end on the next relevant Break Date without prejudice to the parties’ subsisting rights of action.

 

8.2                               This Lease and the Contractual Term shall not come to an end on a Break Date unless at the relevant Break Date:

 

(i)                                     the rents reserved by this Lease and all other undisputed amounts payable under it have been paid up to and including the Break Date in cleared funds, provided that the Landlord has notified the Tenant of all such sums due as at the Break Date not later than 30 days prior to the relevant Break Date; and

 

(ii)                                  the Tenant yields up the whole of the Premises with vacant possession provided that the Tenant will not be in breach of this requirement if there remains on the Premises any of the Tenant’s loose chattels fixtures or fittings of a minor or inconsequential nature.

 

8.3                               Time shall be of the essence for Clauses 8.1 and 8.2 but this shall not make time of the essence for any other clause or paragraph of this Lease.

 

IN WITNESS of which the Landlord and the Tenant have executed this document as a deed on the date specified in the Particulars.

 

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SCHEDULE 1

 

Easements and rights granted

 

1.1                               Passage of utilities

 

The right of passage and running of services now or at any time during the Term in and through the Conduits in the Estate which serve the Premises and to make connection thereto subject to the Landlord’s rights to re-route the same provided that the Landlord gives prior notice in writing and provides suitable alternative supplies and any means of connection to the same shall be approved by the Landlord (such approval not to be unreasonably withheld or delayed).

 

1.2                               Access over Estate Roads

 

The right for the Tenant, any other permitted occupier or their employees or visitors to use on a 24-hour basis 365 days a year by foot or car the Estate Roads provided for the purpose for access to and from the Premises and the Car Parking (but subject to temporary interruptions where necessary for repairs, maintenance and renewal from time to time, provided that the Landlord shall use reasonable endeavours to minimise the period of any such interruptions and to provide a suitable alternative route for access during such period of interruption, save in emergencies), provided that the Landlord may from time to time vary, re-route or amend the Estate Roads in accordance with paragraph 5.2 of Schedule 5 and subject to paragraph 3.17(A) of Schedule 3.

 

1.3                               Electricity Substation

 

The right of access to and egress from the electricity substation adjacent to the Premises on the Estate on reasonable prior notice (save in emergency), provided that in exercising this right the Tenant shall comply with the Landlord’s reasonable security arrangements and allow the Tenant’s representative to be accompanied by a representative of the Landlord if the Landlord so requires (save in an emergency).

 

1.4                               Car parking

 

Subject to the payment of Car Parking Rent in accordance with Schedule 4, Part B, the use of up to 70 car parking spaces, such number to be determined in accordance with Schedule 4, Part B, for the parking of private cars and/or motorbikes belonging to the Tenant or any other permitted occupier or their employees or visitors on a 24-hour basis 365 days a year within the numbered spaces to be determined by the Landlord (acting reasonably) and notified to the Tenant from time to time (the “Car Parking”).

 

1.5                               Entry

 

(A)                               The right to enter the Estate Common Parts at reasonable times after prior written notice (except in an emergency) so far as is reasonably necessary to carry out any works or alterations to the Premises required or permitted by this Lease (including redevelopment, for the avoidance of doubt), but subject to the persons entering making good any damage caused to the Estate Common Parts without unreasonable delay.

 

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(B)                               The right to enter the Estate Common Parts at reasonable times after prior written notice (except in an emergency) so far as is reasonably necessary to maintain or connect into any Conduits on the Premises, but subject to the persons entering making good any damage caused to the Estate Common Parts or the Estate without unreasonable delay.

 

1.1                               Display of nameplates or signs

 

The right at the Tenant’s reasonable request to have signs displayed in such locations on the Estate as the Landlord may approve (such approval not to be unreasonably withheld or delayed) showing the Tenant’s name and any other details reasonably required by the Tenant to include the Tenant’s usual corporate or trade logo.

 

1.2                               Rights of support and protection

 

The rights of support and protection as enjoyed by the Premises at the date of this Lease.

 

1.3                               New Conduits

 

The right to lay or construct Conduits in, on or under the Estate Roads with the Landlord’s consent (such consent not to be unreasonably withheld or delayed) and to connect into such Conduits.

 

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SCHEDULE 2

 

Easements and rights reserved

 

2.1                               Light and air

 

All rights of light and air and the right to erect or alter or to consent to the erection or alteration of any building now or from time to time on any adjoining or neighbouring property notwithstanding that such erection or alteration may diminish the access of light and air enjoyed by the Premises and, subject to the provisions of Schedule 7, the right to deal with any such property as it may think fit.

 

2.2                               Passage of utilities

 

The right of free and uninterrupted use of all Conduits as are now or may after the date of this Lease be in on or under the Premises and serving or capable of serving other parts of the Estate or adjoining or neighbouring property together with the right to enter upon the Premises on reasonable prior notice (save in an emergency) provided that in exercising this right the Landlord shall comply with the Tenant’s reasonable security arrangements and allow the Landlord’s representative to be accompanied by a representative of the Tenant if the Tenant so requires (save in an emergency) to inspect, repair or maintain any such Conduits but only where such inspection repair or maintenance would not otherwise be reasonably practicable.

 

2.3                               New Conduits

 

The right to lay or construct new Conduits in, on or under the Premises with the Tenant’s consent (such consent not to be unreasonably withheld or delayed) and to connect into such Conduits as are now or may after the date of this Lease be in on or under the Premises other than Conduits capable of serving only the Premises.

 

2.4                               Maintenance of the Estate

 

The right to enter upon the Premises on reasonable prior notice (save in emergency) in connection with the erection, alteration, improvement, repair or maintenance of any other parts of the Estate or any adjoining or neighbouring property but only where such erection, alteration, improvement, repair or maintenance would not otherwise be reasonably practicable and provided that in exercising this right the Landlord shall comply with the Tenant’s reasonable security arrangements and allow the Landlord’s representative to be accompanied by a representative of the Tenant if the Tenant so requires (save in emergency).

 

2.5                               Covenants

 

The right to enter upon the Premises in the circumstances in which in the tenant covenants in this Lease the Tenant covenants to permit such entry.

 

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2.6                               Support

 

The right of protection and support as enjoyed by other parts of the Estate over the Premises.

 

2.7                               Access over pathways

 

For such time as the Tenant may provide and maintain any pedestrian pathways on the Premises which abut an Estate Road, the right for the Landlord, any other permitted occupier or their employees or visitors to use on a 24-hour basis 365 days a year by foot such pedestrian pathways for purposes in connection with this Lease or the Estate, provided that the Tenant shall not be required to provide or maintain any such pedestrian pathways.

 

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SCHEDULE 3

 

Tenant covenants

 

3.1                               Rent

 

To pay the rents reserved by this Lease at the times and in the manner specified without any deduction (save where required by statute), counterclaim or set off.

 

3.2                               Outgoings

 

(A)                               To pay and indemnify the Landlord against all existing and future rates, taxes, duties, charges, assessments, outgoings and impositions (whether of a capital, revenue, non­ recurring or wholly novel nature) which are now or may at any time be assessed, charged or imposed upon or in relation to the Premises or on the owner or occupier in respect of them other than tax payable by the Landlord (excluding VAT) occasioned by receipt of the rents, on the grant of this Lease or on any dealing with its reversionary interest

 

(B)                               Pending the separate assessment of the Premises, to pay and indemnify the Landlord against a fair proportion (as shall be determined by the Landlord acting reasonably) of any sum payable in respect of the Premises and any other part of the Estate.

 

3.3                               Utilities

 

To pay for all gas, electricity, water, telephone, cable, oil and other utilities and services supplied to the Premises and all costs and charges in relation to the supply and disconnection of any such utilities and services and a fair proportion (as shall be determined by the Landlord acting reasonably) of any joint charges.

 

3.4                               Repair

 

To keep the Premises properly maintained.

 

3.5                               Cleaning

 

To keep the exterior parts of the Premises clean, tidy and free from rubbish.

 

3.6                               Decoration

 

In 2019 and in every subsequent fifth year of the Term or more frequently if necessary and also in the three months immediately before the end of the Term to paint, clean or otherwise treat as the case may be all the exterior structure and other exterior parts of the Premises usually or requiring to be painted, cleaned or otherwise treated.

 

3.7                               Yielding up

 

(A)                               At the end of the Term quietly to yield up the Premises in a condition consistent with the due performance and observance of the tenant covenants in this Lease and for the avoidance of doubt it is acknowledged and agreed that the Tenant shall not be obliged to reinstate the Premises to the condition it was in at the beginning of the Term.

 

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(B)                               To remove from the Premises all tenant’s and trade fixtures and fittings and chattels prior to the end of the Term, unless otherwise agreed by the parties.

 

(C)                               To make good all physical damage caused to the Premises by the removal of fittings, furniture and effects.

 

3.8                               Statutory Requirements

 

(A)                               To comply with all Statutes and the requirements or directions of all local and other competent authorities affecting the Premises or their use and occupation whether imposed on the Landlord or the Tenant.

 

(B)                               Not to do or omit to do anything by reason of which the Landlord may under any Statute or any such requirement or direction incur or have imposed upon it or become liable to pay any penalty, damages, compensation, costs, levies, charges or expenses.

 

3.9                               Planning

 

To comply with the Planning Acts and any planning permission relating to the Premises.

 

3.10                        Entry upon the Premises

 

(A)                               Where the same cannot otherwise be undertaken, to permit the Landlord and persons authorised by the Landlord to enter the Premises at reasonable times after reasonable prior written notice (except in an emergency) and where required to remain with or without workmen, materials and equipment

 

(i)                                     in connection with the easements and rights reserved by this Lease; and

 

(ii)                                  to remedy any breach of the tenant covenants in this Lease,

 

without payment for any loss, nuisance, annoyance, damage or inconvenience caused to the occupiers of the Premises but subject to the persons entering causing as little inconvenience, nuisance and annoyance as reasonably practicable and making good any damage caused to the Premises without unreasonable delay provided that in exercising this right the Landlord shall comply and procure the compliance by those persons authorised by it with the Tenant’s reasonable security arrangements and allow the Landlord’s representative or person authorised by it to be accompanied by a representative of the Tenant if the Tenant so requires.

 

(B)                               As soon as it becomes aware of the same to give immediate notice to the Landlord of any defect in the Premises which would or might give rise to any obligation on the Landlord’s part to do or refrain from doing any act or thing in order to comply with the duty of care imposed by the Defective Premises Act 1972.

 

3.11                        Breaches

 

(A)                               To make good all breaches of the tenant covenants in this Lease within 20 Business Days after the giving of written notice by the Landlord to the Tenant or sooner if necessary.

 

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(B)                               If the Tenant continues to default in the performance of any of such covenants of which notice has been given, to permit the Landlord and all persons authorised by the Landlord to take steps to remedy the breaches.

 

3.12                        Costs

 

(A)                               To indemnify the Landlord against all costs properly incurred by the Landlord and arising from or in contemplation of:

 

(i)                                     the enforcement of any of the tenant covenants in this Lease;

 

(ii)                                  the remedying of any breach of the tenant covenants in this Lease;

 

(iii)                               the lawful and proper preparation and service of any notices or proceedings under sections 146 and 147 of the Law of Property Act 1925 or the Leasehold Property (Repairs) Act 1938;

 

(iv)                              the lawful and proper preparation and service of all notices and schedules (whether statutory or otherwise) relating to the state of repair and condition of the Premises or other breaches of any of the tenant covenants in this Lease; and

 

(v)                                 the preparation and service of any notices, applications or proceedings under the Landlord and Tenant (Covenants) Act 1995.

 

(B)                               To indemnify the Landlord against all reasonable costs properly incurred by the Landlord and arising from any application for consent under this Lease whether it is granted, refused or the application is withdrawn unless the same is unlawfully or unreasonably withheld or delayed or offered subject to some unlawful or unreasonable conditions.

 

3.13                        Alterations

 

(A)                               The Tenant may make structural and non-structural alterations to the Premises, including for the avoidance of doubt demolishing and rebuilding the existing buildings on the Premises and redeveloping the Premises, without having to obtain the Landlord’s consent, but the Tenant shall:

 

(i)                                     prior to work commencing:

 

(a)                                 provide reasonable prior written notice to the Landlord of any structural alterations to the Premises, including the proposed commencement date and the estimated duration of the works;

 

(b)                                 supply the Landlord with plans showing the proposed layout and all other relevant details together with particulars of the type and design of such works;

 

(c)                                  use its reasonable endeavours to provide additional information to the Landlord that the Landlord reasonably requests, provided that any such request is made promptly and within 60 calendar days of the Landlord’s receipt of the information provided pursuant to (a) and (b) above; and

 

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(d)                                 obtain all requisite Consents;

 

(ii)                                  carry out such works in a good and workmanlike manner with suitable materials of good quality and causing as little nuisance to the Estate as reasonably practicable;

 

(iii)                               comply with the requirements of all Consents and Statutes applicable to the works being carried out; and

 

(iv)                              promptly and within no more than 15 Business Days after substantial completion of the works, provide the Landlord with three sets of final ‘as-built’ plans and specifications (both hard copy and CAD disk) for retention.

 

(B)                               If the Tenant is required by any authority or Statute or the Tenant reasonably considers that it would be prudent to have an independent point of access to the Premises directly from the publicly maintained highway and without passing through the Estate Common Parts, the Landlord shall not raise any objection and shall provide its written consent (not to be unreasonably withheld or delayed) to the extent that any planning authority requires such consent and shall use all reasonable endeavours to facilitate such independent point of access provided that such assistance shall be at the Tenant’s sole cost and reasonable request.

 

3.14                        Use

 

(A)                               Not to use the Premises otherwise than for the Permitted Use.

 

(B)                               Not to use the Premises for:

 

(i)                                     any dangerous, noxious, noisy, offensive, illegal or immoral purpose;

 

(ii)                                  any purpose which causes an unlawful nuisance, damage or inconvenience to the Landlord or the owners or occupiers of any neighbouring property or which involves any substance which may be harmful, polluting or contaminating;

 

(iii)                               residential purposes;

 

(iv)                              any animal testing; or

 

(v)                                 any oil or other heavy chemical refinery,

 

provided that the proper use by the Tenant of the Premises for the Permitted Use shall not in any circumstances constitute a breach of the obligations under 3.14(B)(i) or 3.14(B)(ii) above.

 

3.15                        Security arrangements

 

Not to leave the Premises continuously unoccupied for more than 30 Business Days without notifying the Landlord in advance and providing security and caretaking arrangements approved by the Landlord and the Tenant’s insurers (if required) such approval not to be unreasonably withheld or delayed provided that in the event that the

 

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Tenant proposes to cease occupying the Premises (otherwise than by an assignment or underletting of the Premises in whole it shall first give the Landlord not less than six months’ prior notice in writing).

 

3.16                        Conduits

 

To keep the Conduits in the Premises clear and free from any noxious, harmful or deleterious substance, and to remove any obstruction and repair any damage to the Conduits in the Premises as soon as reasonably practicable after it becomes aware of the same and to the Landlord’s reasonable satisfaction.

 

3.17                        Entrances and service areas

 

(A)                               Not to enter or to leave the Estate otherwise than through the entrances and exits designated in writing by the Landlord (acting reasonably) from time to time.

 

(B)                               Not to load or unload or receive delivery of or dispatch goods otherwise than in the areas and through the entrances designated in writing by the Landlord (acting reasonably) from time to time.

 

(C)                               Not to obstruct the Estate Common Parts or to otherwise interfere with access by the Landlord or the tenants or occupiers of other parts of the Estate.

 

3.18                        Rights of light

 

(A)                               To preserve all rights of light and other easements enjoyed by the Premises and to take at the Landlord’s sole cost and request all reasonable steps to preserve such rights of light and other easements and not to permit or suffer anyone to acquire any right of light or other easement or right over the Premises.

 

(B)                               As soon as reasonably practicable after becoming aware of the same, to give notice to the Landlord of any third party making or acquiring or attempting to make or acquire any encroachment or easement against the Estate and at the request and cost of the Landlord to take such steps as the Landlord may reasonably require to prevent any such encroachment or easement being acquired.

 

3.19                        Insurance

 

(A)                               To keep the Premises insured against the Insured Risks for their full reinstatement cost with a reputable insurance office.

 

(B)                               To ensure that the insurance policy in respect of the Premises required under paragraph (A) above is composite insurance covering the interests of the Landlord and the Tenant in the Premises.

 

(C)                               On request to supply the Landlord (but not more frequently than once in any period of 12 months) with particulars of any such policies of insurance, evidence of payment of the current year’s premium and a schedule showing the total reinstatement cost insured against by the Tenant

 

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(D)                               If the Premises are destroyed or damaged, the Tenant shall in its absolute discretion either:

 

(i)                                     subject to obtaining all necessary Consents, apply all insurance monies received (except sums received in respect of property owner’s and third party liability and business interruption) in rebuilding, repairing and reinstating the Premises as soon as reasonably practicable provided that the Tenant shall not be required to reinstate the Premises in facsimile; or

 

(ii)                                  if the Tenant is unable or unwilling to reinstate the Premises, promptly clear any debris and landscape the Premises to the reasonable satisfaction of the Landlord,

 

and the Tenant shall notify the Landlord within 12 months of the date of damage or destruction whether or not the Tenant has chosen to reinstate the Premises.

 

(E)                                From the date of any damage or destruction until such time as the Premises have been reinstated in full or landscaped pursuant to paragraph 3.19(0), to ensure that, so far as reasonably practicable, the Premises remain clean and tidy, free from debris and suitably hoarded if necessary.

 

(F)                                 If the Tenant elects to rebuild, repair and reinstate the Premises in accordance with paragraph 3.19(0), to:

 

(i)                                     promptly use all reasonable endeavours to obtain any planning permissions and other Consents which are needed to enable the Tenant to reinstate the Premises;

 

(ii)                                  commence any reinstatement works promptly, and in any event within a maximum of two calendar years, after the last of the requisite Consents is issued;

 

(iii)                               subject to such reasonable extensions of time as the parties may agree both acting reasonably, the Tenant shall complete all reinstatement works to the Landlord’s reasonable satisfaction within a maximum of three calendar years after the last of the requisite Consents is issued; and

 

(iv)                              comply with its obligations under paragraph 3.13(A).

 

(G)                               The Landlord shall be entitled to insure against property owner’s liability, third party liability and the employer’s liability of the Landlord in relation to the Premises and anything done in them and the rest of the Estate.  The Tenant shall pay to the Landlord within 14 days of receipt by the Tenant of a written demand a due and fair proportion of the cost of any insurance which the Landlord properly puts in place pursuant to this paragraph 3.19(G), plus any tax charged on the premium for the said insurance.

 

3.20                        Alienation

 

(A)                               Not to assign, underlet or charge any part (as distinct from the whole) of the Premises or hold upon trust for another the whole or any part of the Premises.

 

(B)                               Not to go out of occupation of the whole of the Premises otherwise than by an assignment or underletting of the whole.

 

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(C)                               Not to assign or to underlet the whole of the Premises:

 

(i)                                     to a person entitled to claim diplomatic or sovereign immunity;

 

(ii)                                  to a corporation registered or resident in a jurisdiction in which an order or a judgment of a court obtained in England and Wales will not necessarily be enforced against it without any consideration of the merits of the case.

 

(D)                               Not to underlet the whole of the Premises otherwise than by way of a Permitted Underlease.

 

(E)                                To give the Landlord notice of its intention to assign the whole of the Premises or underlet the whole of the Premises and not to so assign or underlet the Premises without first complying with the provisions of Schedule 6, provided that this shall not apply to the transactions referred to in paragraph (F).

 

(F)                                 Paragraph (E) above shall not apply to any assignment or underlease of the whole of the Premises where the Tenant and the assignee or undertenant are members of the same group.

 

(G)                               If the same is not entered automatically by the Land Registry on the registration of this Lease, promptly to apply for the entry of a restriction in the following form against the registered title to this Lease:

 

“No disposition of the registered estate by the proprietor of the registered estate or by the proprietor of any registered charge, not being a charge registered before the entry of this restriction, is to be registered without a certificate signed by Reckitt Benckiser Healthcare (UK) Limited or their conveyancer that the provisions of paragraph 3.20(E) of Schedule 3 to the Lease dated              2014 and made between Reckitt Benckiser Healthcare (UK) Limited (1) and RB Pharmaceuticals Limited (2) have been complied with or do not apply to the disposition”,

 

and the Tenant hereby authorises the Landlord to apply for the registration of the above restriction if the Tenant fails to do so.

 

(H)                              Not to part with or share occupation of the whole or any part of the Premises otherwise than to companies which are members of the same group as the Tenant upon terms such that:

 

(i)                                     no estate or interest in the Premises is created or transferred and no right to exclusive possession or occupation is conferred; and

 

(ii)                                  any rights of occupation come to an end immediately the relevant company ceases to be a member of the same group as the Tenant.

 

3.21                        Direct Competitors

 

Notwithstanding clause 3.20, not to assign or underlet the whole of the Premises unless:

 

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(i)                                     the Tenant has provided reasonable notice to the Landlord of the identity of the proposed assignee; and

 

(ii)                                  the Landlord has provided its written confirmation that it does not consider (acting reasonably) that the proposed assignee is a direct competitor of the Landlord’s business.

 

3.22                        Registration of dealings

 

(A)                               Within ten (10) Business Days after any assignment, underletting, sharing of occupation, mortgage or charge or the release or vacation of any mortgage or charge or devolution of or other instrument relating to the Premises or any estate or interest in the Premises however remote or inferior to give notice to the Landlord and produce to it for its retention a certified copy of the deed or instrument effecting the transaction.

 

(B)                               If the Landlord so requests, the Tenant shall promptly supply the Landlord with full details of the occupiers of the Premises and the terms upon which they occupy.

 

3.23                        Indemnity

 

(A)                               To indemnify the Landlord against all actions, costs, claims, demands, expenses, damage and loss arising directly or indirectly from any breach of the Tenant’s obligations under this Lease, provided that the Landlord:

 

(i)                                     takes reasonable steps to mitigate any losses which might result in a claim for indemnification being made;

 

(ii)                                  as soon as reasonably practicable gives notice in writing to the Tenant of any claims brought or made against the Landlord which may cause the Tenant to be liable under the indemnity; and

 

(iii)                               does not admit liability or settle any relevant claim against it without the written consent of the Tenant (such consent not to be unreasonably withheld or delayed).

 

(B)                               Notwithstanding paragraph 3.23(A):

 

(i)                                     for so long as the Tenant is RB Pharmaceuticals Limited or any other member of the Indivior Group, then until the earlier of:

 

(a)                                 the Tenant ceasing to be a member of the Indivior Group; and

 

(b)                                 a Change of Control of Indivior PLC; and

 

(ii)                                  for so long as the Landlord is Reckitt Benckiser Healthcare (UK) Limited or any other member of the RB Group, then until the earlier of:

 

(a)                                 the Landlord ceasing to be a member of the RB Group; and

 

(b)                                 a Change of Control of Reckitt Benckiser PLC,

 

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the Tenant shall not be liable to the Landlord whether in contract, tort (including negligence and breach of statutory duty) for:

 

(i)                                     any indirect or consequential loss or damage;

 

(ii)                                  any loss of profits, loss of revenue, loss of use, loss of anticipated savings, loss of goodwill or loss of contracts (in each case whether direct or indirect or consequential); or

 

(iii)                               any punitive or exemplary damages.

 

3.24                        Interest

 

(A)                               If any sum due under this Lease has not been paid by the date it is due, whether or not it has been formally demanded and without prejudice to the Landlord’s other remedies, to pay on demand interest at the Default Interest Rate (both before and after any judgment) on that amount for the period from the due date to and including the date of payment

 

(B)                               To pay interest under paragraph (A) for any period during which the Landlord properly refuses to accept the tender of payment because of an unremedied breach of a tenant covenant

 

3.25                        VAT

 

(A)                               Each sum payable under this Lease is exclusive of any amounts in respect of VAT chargeable on the supply for which that sum is the consideration.

 

(B)                               If anything done under this Lease constitutes, for VAT purposes, the making of a supply by the Landlord to another person (the “Recipient”) and VAT is or becomes chargeable on that supply (i) the Landlord shall issue a valid VAT invoice to the Recipient; and (ii) the Recipient shall pay to the Landlord, in addition to any amounts otherwise payable under this Lease, an amount equal to any amount of VAT so chargeable for which the Landlord is liable to account.  If there is subsequently any adjustment to the consideration for the relevant supply:

 

(i)                                     where the adjustment is upward: (i) the Landlord shall issue a valid additional or revised VAT invoice; and (ii) the Recipient will pay to the Landlord an amount equal to any additional VAT arising in respect of the supply for which the Landlord is liable to account; and

 

(ii)                                  where the adjustment is downward: (i) the Landlord shall issue a valid VAT credit note or a revised VAT invoice; and (ii) the Landlord will pay to the Recipient an amount equal to any reduction in the VAT arising in respect of the supply for which the Landlord is liable to account.

 

3.26                        Matters affecting the Reversion

 

To observe and perform the Title Matters.

 

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SCHEDULE 4

 

Part A: Service Charge

 

PART I

 

4.1                               Interpretation

 

In this Schedule, except where the context otherwise requires:

 

“Service Charge Period” means a period of 12 months ending on and including 31st December in each year or such other period as the Landlord may acting reasonably determine from time to time;

 

“Service Charge Rent” means a fair and reasonable proportion of the Total Expenditure for the Service Charge Period concerned as appearing in the summary submitted pursuant to paragraph 4.3(A): and

 

“Total Expenditure” means the aggregate of the reasonable and proper costs and expenses incurred by the Landlord in providing the Services.

 

4.2                               Estimate of the Total Expenditure

 

(A)                               The Landlord shall submit to the Tenant an estimate of the Total Expenditure for each Service Charge Period.

 

(B)                               The Landlord may revise such estimate at any time before the end of the relevant Service Charge Period to allow for unusual or unexpected expenditure.

 

4.3                               Summary of the Total Expenditure

 

(A)                               Within six months after the end of each Service Charge Period, the Landlord shall submit to the Tenant a full and accurate summary of the Total Expenditure for such period audited by an independent accountant.

 

(B)                               At any time within 20 Business Days from the date such summary is submitted, the Tenant may after reasonable prior notice have access to the accounts, invoices and other materials from which such summary is derived and at its own expense be provided with copies.

 

(C)                               After the expiration of a period of 40 Business Days from the date such summary is submitted, such summary shall be final and binding on the Tenant subject only to representations it has raised in writing during such period.

 

(D)                               The Tenant may not object to the Total Expenditure or any item comprised in it or otherwise on the ground that:

 

(i)                                     an item of the Total Expenditure included at a proper cost might have been provided or performed at a lower cost;

 

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(ii)                                  an item of the Total Expenditure fails to comply with an estimate which was given; or

 

(iii)                               the Tenant disagrees with any estimate of future expenditure for which the Landlord requires to make provision so long as the Landlord has acted reasonably and in good faith.

 

4.4                               Payment of the Service Charge Rent

 

(A)                               The Tenant shall pay to the Landlord the Service Charge Rent for each Service Charge Period falling wholly within the Term and an apportioned part of the Service Charge Rent for any Service Charge Period falling partly within the Term.

 

(B)                               Subject to any adjustment in the estimate of the Total Expenditure after the beginning of the relevant Service Charge Period, the Tenant shall make payments on account of the Service Charge Rent by four equal payments in advance on Rent Payment Date in each year of such amount as the Landlord may reasonably require.

 

(C)                               After the Landlord has submitted the summary of the Total Expenditure for a Service Charge Period, if the aggregate of the on account payments made by the Tenant differs from the Service Charge Rent for the Service Charge Period concerned then any shortfall shall be paid by the Tenant to the Landlord within 20 Business Days of receipt by the Tenant of written demand and any over-payment shall either be allowed to the Tenant against the next on account payment due under this Schedule or, after the end of the Term and the discharge by the Tenant of any outstanding amounts under this Lease, returned to the Tenant within 20 Business Days of agreeing the amount due.

 

(D)                               For the purpose of any apportionment in respect of a period shorter than a Service Charge Period, the Service Charge Rent for the Service Charge Period concerned shall be apportioned on a daily basis.

 

4.5                               Further costs

 

The Landlord may include in the Total Expenditure for any Service Charge Period:

 

(i)                                     any item of the Total Expenditure for an earlier Service Charge Period not recovered in full from the tenants and occupiers of the Estate;

 

(ii)                                  interest at the base rate of Barclays Bank PLC from time to time from the date of expenditure until the date of recovery on any item of the Total Expenditure met by the Landlord from its own resources whether because of an insufficiency of service charges received from the tenants and occupiers of the Estate or otherwise;

 

(iii)                               any tax assessed upon the Landlord during such period in respect of sums received from the tenants or occupiers of the Estate by way of or on account of the service charge;

 

(iv)                              any amounts in respect of VAT comprised in the Total Expenditure which the Landlord is unable to recover as input tax.

 

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4.6                               Deposit account

 

(A)                               The Landlord shall keep the sums paid by the tenants and occupiers of the Estate by way of service charge in a separate, interest earning, deposit account (designated “The Service Charge Account”) until and save to the extent that they may be required for the purposes provided for in this Schedule.

 

(B)                               Interest on the amounts standing to the credit of the account shall be credited to the account quarterly net of any tax payable in respect of such interest.

 

(C)                               Until actual disbursement, such amounts shall be held by the Landlord to be applied by it for the benefit of the tenants and occupiers of the Estate from time to time.

 

(D)                               Upon any transfer of the Reversion, the Landlord may retain out of such account an amount sufficient to discharge the Total Expenditure incurred by the Landlord but remaining outstanding.

 

(E)                                The receipt of the Landlord’s successor to the Reversion shall be a good receipt for the Landlord and relieve the Landlord from any liability as to the future application of amounts handed over.

 

4.7                               Tenant’s protection provisions

 

(A)                               There shall be excluded from the Total Expenditure all costs and expenses relating to:

 

(i)                                     the enforcement of the covenants and obligations of the tenants and occupiers of the Estate;

 

(ii)                                  the collection of rents and licence fees from the tenants and occupiers of the Estate

 

(iii)                               and any costs relating to the administration of applications for consents to assign, sublet or alter by tenants or occupiers of the Estate;

 

(iv)                              the review of rent, the letting and reletting of any part of the Estate and the grant of licences;

 

(v)                                 any liability or expense which is the responsibility of any tenant or occupier of the Estate under the terms of the lease or other arrangement by which such tenant or occupier uses or occupies the Estate;

 

(vi)                              the capital costs incurred in carrying out improvements to the Estate except insofar as such work constitutes normal repair, renewal or refurbishment;

 

(vii)                           the initial construction, equipping and fitting out of the Estate;

 

(viii)                        the cost of making good any damage or destruction to the Estate arising from any risk covered by any policy or policies of insurance arranged by the Landlord pursuant to paragraph 4.12(F) to the extent the cost of doing so has been recovered under such policy or policies of insurance, the Landlord having used

 

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reasonable endeavours to recover such costs pursuant to any relevant policy or policies of insurance;

 

(ix)                              any costs, fees or expenses arising or incurred by reason of any neglect, act or omission of the Landlord or those for whom it is legally responsible; and/or any other tenant or permitted occupier of any part of the Estate or those for whom it is legally responsible; and/or any breach by the Landlord of its obligations under this Lease; and/or any breach by any other tenant or permitted occupier of any part of the Estate of its obligations under their lease or other right of occupation;

 

(x)                                 any contribution to a sinking fund;

 

(xi)                              the cost of special concessions given by the Landlord to any other tenant or occupier of the Estate;

 

(xii)                           the costs incurred by or in connection with any proposed sale of the Landlord’s interest under this Lease;

 

(xiii)                        all costs (including those of renewal, rebuilding and reinstatement) relating to Conduits that exclusively serve some other tenant or occupier (including the Landlord) of the Estate; and

 

(xiv)                       any costs associated with the provision of the Car Parking pursuant to Part B of this Schedule.

 

(B)                               The Service Charge Rent is not to be increased by reason of any part of the Estate being vacant or being occupied by the Landlord or because any other tenant or occupier of the Estate defaults in the payment of its service charge.

 

4.8                               Landlord’s obligation to provide the Services

 

(A)                               Subject to the following provisions of this paragraph, the Landlord shall provide the Services.

 

(B)                               The Landlord may at its reasonable discretion discontinue, suspend, vary, extend, alter or add to the Services if the Landlord considers that by doing so the Estate, its services or amenities may be improved or the management of the Estate may be more efficiently conducted.

 

4.9                               Disputes

 

Any dispute arising under this schedule shall be determined by a single arbitrator in accordance with the Arbitration Act 1996.

 

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PART II

 

4.10                        Repairs to the Estate

 

Repair, renewal (where beyond economic repair), decoration, cleaning, maintenance and lighting of:

 

(A)                               any party walls or fences and other party structures and amenities which may belong to or be capable of being used or enjoyed by the Estate in common with any land or building adjoining or neighbouring the Estate;

 

(B)                               Conduits, plant, machinery, apparatus and equipment (which are not the responsibility of and do not exclusively serve any tenant or occupier of the Estate (including the Landlord)); and

 

(C)                               the Estate Common Parts, including the Estate Roads.

 

4.11                        Fire Fighting and Security

 

(A)                               Provision, operation, repair, renewal (where beyond economic repair), cleaning and maintenance of:

 

(i)                                     fire alarms, sprinkler systems, fire prevention and fire fighting equipment and ancillary apparatus within the Estate Common Parts; and

 

(ii)                                  security alarms, apparatus, CCTV surveillance systems and other systems and amenities as the Landlord (acting reasonably) considers appropriate for the security of the Estate.

 

(B)                               Erection, repair, renewal (where beyond economic repair), decoration, cleaning, maintenance of a perimeter fence around the Estate and the Premises that complies with the Medicines and Healthcare Products Regulatory Agency and Home Office guidance for Home Office Controlled Drug Licensees (or such equivalent regulatory regime as applicable from time to time), provided that if the Premises becomes subject to a more onerous security regime than the Landlord then the Tenant shall be responsible for fulfilling such additional security arrangements.

 

4.12                        Estate Common Parts

 

(A)                               Repair, renewal (where beyond economic repair), decoration, cleaning, maintenance and lighting of the Estate Common Parts;

 

(B)                               Equipping the Estate Common Parts;

 

(C)                               Providing, maintaining and replacing any plants in the Estate Common Parts;

 

(D)                               Providing, maintaining and replacing signs, name boards and other notices within the Estate Common Parts;

 

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(E)                                The operation, maintenance and replacement (where beyond economic repair) of public address and access control systems, entry barriers, metal detectors and baggage scanning apparatus and other amenities within the Estate Common Parts;

 

(F)                                 Insuring the Estate Common Parts; and

 

(G)                               Providing, maintaining and replacing refuse bins and operating a refuse storage collection and disposal service (including facilities for the segregation of rubbish).

 

4.13                        Induction of Employees

 

Providing induction training or materials for the induction of the Tenant’s new employees in respect of the rules for use of the Estate Common Parts.

 

4.14                        Other services

 

Providing vermin and pest control.

 

4.15                        Statutory Requirements

 

(A)                               Paying all existing and future rates, taxes, charges, assessments and outgoings payable to any competent authority or for utilities in respect of the Estate Common Parts;

 

(B)                               Complying with the effect of any Statute in respect of the Estate Common Parts; and

 

(C)                               Carrying out any works to the Estate Common Parts required to comply with Statute.

 

4.16                        Fees and Management Charges

 

(A)                               Paying managing agents’ reasonable and proper fees and disbursements or if the Landlord itself manages the Estate making provision for a reasonable fee; and

 

(B)                               Paying the reasonable and proper fees and disbursements of accountants, surveyors, engineers, solicitors and others in connection with the provision of the Services and the administration of the Service Charge Rent.

 

4.17                        Staff

 

Providing staff as the Landlord reasonably considers necessary in the interests of good estate management in connection with the Services and the general management, operation, maintenance and security of the Estate (including security guards) and all other reasonable incidental expenditure including but not limited to:

 

(i)                                     salaries and health, insurance, welfare and pension benefits;

 

(ii)                                  uniforms, special clothing, tools and other materials for the proper performance of the duties of any such staff;

 

(iii)                               providing maintaining repairing decorating and lighting any office accommodation and other facilities for building management staff and paying all

 

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rates gas electricity water and other utility charges in respect thereof and any actual or notional rent for such office accommodation; and

 

(iv)                              redundancy and similar or ancillary payments that the Landlord may be required by Statute or otherwise to pay in respect of staff.

 

4.18                        Miscellaneous items

 

(i)                                     Leasing or hiring any machinery and equipment required and used in connection with the provision of the Services;

 

(ii)                                  Paying commitment fees interest and any other cost of borrowing money at competitive rates where reasonably necessary to finance the Total Expenditure in relation to any unusual items of capital expenditure; and

 

(iii)                               Providing any other services, carrying out any other works and paying any other reasonable and proper expenses which the Landlord reasonably and properly deems appropriate in accordance with good estate management and in the overall interests of the tenants and occupiers of the Estate.

 

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Part B: Car Parking Rent

 

4.19                        Interpretation

 

In this Schedule, except where the context otherwise requires:

 

“Car Parking Rent” means rent at an initial rate of £[***] per annum for each car parking space provided in accordance with paragraph 1.4 of Schedule 1 and paragraph 4.22 of this Schedule from time to time and then as revised pursuant to this Schedule 4, Part B of this Lease;

 

“Base RPI Month” means October in each calendar year;

 

“Base Rent” means £[***] per annum per car parking space and then as revised pursuant to this Schedule 4, Part B of this Lease;

 

“Index” means the “all items” figure of the RPI;

 

“Interest Rate” means [***] per cent per annum below the Default Interest Rate from time to time;

 

“RPI” means the Retail Prices Index published by the Office for National Statistics or such body as may from time to time succeed the functions of such Office in relation to the Retail Prices Index or any official index replacing it; and

 

“Review Date” means 25 December 2015 and every anniversary of that date.

 

4.20                        Payment of Car Parking Rent

 

The Tenant shall pay the Car Parking Rent by four equal payments in advance on the Rent Payment Dates in respect of the number of car parking spaces to be used for the relevant period as determined from time to time by paragraph 4.22 of this Schedule.

 

4.21                        Review of the Car Parking Rent

 

(A)                               In this paragraph, the “President” is the President for the time being of the Royal Institution of Chartered Surveyors or a person acting on his behalf, and the Surveyor is the independent valuer appointed pursuant to paragraph 4.21(J).

 

(B)                               The Car Parking Rent shall be reviewed on each Review Date with effect from and including the relevant Review Date, the reviewed rent to become payable as the Car Parking Rent reserved by this Lease.

 

(C)                               The reviewed rent for a Review Date shall be determined by multiplying the relevant Base Rent by the Index for the month of October immediately before the relevant Review Date, then dividing the product by the Index value for the Base RPI Month in the previous calendar year, provided that:

 

(i)                                     if this calculation would result in an annual increase of more than three per cent, the increase will be deemed to be three per cent; and

 

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(ii)                                  if this calculation would result in an increase of less than one per cent or a decrease, the increase will be deemed to be an increase of one per cent.

 

(D)                               The Landlord shall calculate the indexed rent as soon as reasonably practicable and shall give the Tenant written notice of the indexed rent as soon as it has been calculated,

 

(E)                                If the revised Car Parking Rent has not been calculated by the Landlord and notified to the Tenant at least five Business Days before a Review Date, the Car Parking Rent payable from that Review Date shall continue at the rate payable immediately before that Review Date.  No later than five Business Days after the revised Car Parking Rent is notified by the Landlord to the Tenant, the Tenant shall pay:

 

(i)                                     the shortfall (if any) between the amount that it has paid for the period from the Review Date until the Rent Payment Date following the date of notification of the revised Car Parking Rent and the amount that would have been payable had the revised Car Parking Rent been notified on or before that Review Date; and

 

(ii)                                  interest at the Interest Rate on that shortfall calculated on a daily basis by reference to the Rent Payment Dates on which parts of the shortfall would have been payable if the revised Car Parking Rent had been notified on or before that Review Date and the date payment is received by the Landlord.

 

(F)                                 Time shall not be of the essence for the purposes of this clause.

 

(G)                               Subject to paragraph 4.21(H), if there is any change to the methods used to compile the RPI, including any change to the items from which the Index is compiled, or if the reference case used to compile the RPI changes, the calculation of the indexed rent shall be made taking into account the effect of this change.

 

(H)                              The Landlord and the Tenant shall endeavour, within a reasonable time, to agree an alternative mechanism for setting the Car Parking Rent if either:

 

(i)                                     the Landlord and the Tenant reasonably believes that any change referred to in paragraph 4.21(G) would fundamentally alter the calculation of the indexed rent in accordance with this paragraph 4.21, and has given notice to the other party of this belief; or

 

(ii)                                  it becomes impossible or impracticable to calculate the indexed rent in accordance with this paragraph 4.21,

 

This alternative mechanism may (where reasonable) include, or consist of, substituting an alternative index for the RPL.  In default of agreement between the Landlord and the Tenant on an alternative mechanism for setting the Car Parking Rent, the Surveyor shall determine an alternative mechanism.

 

(I)                                   The Surveyor shall determine a question, dispute or disagreement that arises between the parties in the following circumstances:

 

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(i)                                     where any question or dispute arises between the parties as to the amount of the Car Parking Rent payable or as to the interpretation, application or effect of any part of this paragraph 4.21; or

 

(ii)                                  where the Landlord and the Tenant fail to reach agreement under paragraph 4.21(H).

 

The Surveyor shall have full power to determine the question, dispute or disagreement.  When determining such a question, dispute or disagreement, the Surveyor may, if he considers it appropriate, specify that an alternative mechanism for setting the Car Parking Rent should apply to this lease, and this includes (but is not limited to) substituting an alternative index for the RPI.

 

(J)                                   The Surveyor shall be an independent valuer who is a Member or Fellow of the Royal Institution of Chartered Surveyors.  The Landlord and the Tenant may, by agreement, appoint the Surveyor at any time before either of them applies to the President for the Surveyor to be appointed.

 

(K)                               The Surveyor shall act as an expert and not as an arbitrator.  The Surveyor’s decision shall be given in writing, and the Surveyor shall provide reasons for any determination.  The Surveyor’s written decision on the matters referred to him shall be final and binding in the absence of manifest error or fraud.

 

(L)                                The Surveyor shall give the Landlord and the Tenant an opportunity to make written representations to the Surveyor and to make written counter-representations commenting on the representations of the other party to the Surveyor.  The parties will provide (or procure that others provide) the Surveyor with such assistance and documents as the Surveyor reasonably requires for the purpose of reaching a decision.

 

(M)                            Either the Landlord or the Tenant may apply to the President to discharge the Surveyor if the Surveyor:

 

(a)                                 dies;

 

(b)                                 becomes unwilling or incapable of acting; or

 

(c)                                  unreasonably delays in making any determination.

 

(d)                                 Paragraph 4.21(J) shall then apply in relation to the appointment of a replacement.

 

(N)                               The fees and expenses of the Surveyor and the cost of the Surveyor’s appointment and any counsel’s fees, or other fees, reasonably incurred by the surveyor shall be payable by the Landlord and the Tenant in the proportions that the Surveyor directs (or if the Surveyor makes no direction, then equally).  The Landlord and the Tenant shall otherwise each bear their own costs in connection with the rent review.

 

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4.22                        Review of the number of Car Parking spaces

 

(A)                               The Tenant may vary the number of car parking spaces over which it has rights pursuant to paragraph 1.4 of Schedule 1 with effect from 25 December in any year of the Term by providing at least two months’ written notice to the Landlord.

 

(B)                               Notwithstanding paragraph 4.22(A), the Landlord shall not be required to provide the Tenant with the use of any more than 70 Car Parking spaces at any one time and, tor the avoidance of doubt, if the Tenant specifies any number greater than 70 in its notice to the Landlord served in accordance with paragraph 4.22(A), the notice shall be deemed to require 70 Car Parking spaces exactly.

 

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SCHEDULE 5

 

Further provisions

 

5.1                               Licences to be obtained

 

(A)                               Any licence, consent or approval required from the Landlord under this Lease is to be obtained before the act or event to which it applies is carried out or done and is effective only when given by deed expressly made collateral to this Lease.

 

(B)                               Whether or not it says so expressly, a requirement to obtain the licence, consent or approval of the Landlord under this Lease includes a requirement to also obtain before the act or event all relevant Consents.

 

5.2                               Estate Common Parts

 

(A)                               The Landlord shall not materially alter the Estate Roads and other access routes across the Estate Common Parts without:

 

(i)                                     providing no less than three months’ notice to the Tenant of the proposed alteration; and

 

(ii)                                  obtaining the Tenant’s prior approval (such approval not to be unreasonably withheld or delayed),

 

PROVIDED THAT the Landlord shall ensure that sufficient areas of the Estate Common Parts and sufficient access routes are available for use by the tenant to enable the Tenant or any lawful sub tenant or other occupier to undertake its lawful usual business at the Premises without a materially detrimental effect on such business.

 

5.3                               No implied warranty

 

Nothing contained or implied in this Lease or in any licence, consent or approval given by the Landlord is to be taken to be a covenant, warranty or representation by the Landlord or its agents that the Premises can be or are fit to be used for the Permitted Use or any other purpose or that any alteration or addition or change of use which the Tenant may intend to carry out will not require relevant Consents.

 

5.4                               Landlord covenants

 

(A)                               The Landlord shall give the Tenant notice of its intention to assign or sell the Reversion and shall not assign or sell the Reversion without first complying with the provisions of Schedule 7, provided that this paragraph 5.4(A) does not apply:

 

(i)                                     if the Tenant is not either RB Pharmaceuticals Limited or another member of the Indivior Group; or

 

(ii)                                  to any transfer or assignment of the Reversion by the Landlord to members of the same group.

 

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(B)                               The Landlord consents to the Tenant applying for the entry of a restriction in the following form against each of the Landlord’s registered titles to the Reversion:

 

“No transfer of the registered estate by the proprietor of the registered estate is to be registered without a certificate signed by a conveyancer that the provisions of Schedule 5 paragraph 5.4(A) of an agreement dated        2014 and made between Reckitt Benckiser Healthcare (UK) Limited (1) and RB Pharmaceuticals Limited (2) have been complied with or that they do not apply to the disposition.”

 

and the Tenant consents to the Landlord applying to remove this restriction when the Tenant ceases to be RB Pharmaceuticals Limited or another member of the Indivior Group.

 

5.5                               Unwanted property

 

If after the end of the Term any property remains on the Premises or the Estate the Landlord may either in so far as the same is annexed to the Premises treat it as having reverted to the Landlord or as the agent of the Tenant (and the Landlord is appointed by the Tenant to act in that behalf) remove, store, and sell such property and then hold the proceeds of sale after deducting the reasonable and proper costs and expenses of removal, storage and sale incurred by it to the order of the Tenant and the Tenant shall indemnify the Landlord against liability incurred by it to any third party whose property is dealt with by the Landlord.

 

5.6                               No implied easements

 

Except as expressly set out, this Lease does not confer upon or include by reason of section 62 of the Law of Property Act 1925 or otherwise in favour of the Tenant any right, privilege, estate or interest in, through, over or upon any land or property adjoining or near to the Premises.

 

5.7                               Costs

 

Costs payable to the Landlord or against which the Landlord is entitled to be indemnified under this Lease include but are not limited to all solicitors’, surveyors’, architects’ and other fees, disbursements and irrecoverable VAT and other expenditure properly incurred by the Landlord on its own account or by the local or any other competent authority or the insurers or any other person interested in the Premises.

 

5.8                               Arrears

 

Where the Landlord agrees to the Tenant deferring to some later date any amount falling due under this Lease, such later date shall be deemed to be the due date for payment for the purpose of section 17 of the Landlord and Tenant (Covenants) Act 1995.

 

5.9                               Exclusion of liability

 

The Landlord shall not be liable or responsible to the Tenant or any person deriving title under it or any occupier of the Premises or their respective employees, agents, visitors or licensees for any loss, injury, damage, nuisance, annoyance or inconvenience which may

 

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be sustained either personally or to their property caused in whole or in part by any failure of or defect in any plant, machinery, conduits or services in the Premises.

 

5.10                        Interest rates

 

If it ceases to be practicable to determine interest rates by reference to the base rate of Barclays Bank PLC the Landlord may specify a reasonable alternative.

 

5.11                        Contracts (Rights of Third Parties) Act 1999

 

The parties do not intend that any provision of this Lease is to be enforceable by virtue of the Contracts (Rights of Third Parties) Act 1999 by a person who is not a party to it or a successor of such a party.

 

5.12                        No waiver

 

No demand for or receipt of rent, no grant of any licence, consent or approval and no acceptance of any document for registration under this Lease by the Landlord or its agent with notice of a breach of any of the tenant covenants in this Lease is or is to be deemed to be a waiver, wholly or partially, of any such breach but any such breach shall be deemed a continuing breach of covenant and neither the Tenant nor any person taking any estate or interest under or through the Tenant may set up any such demand, receipt, grant or acceptance in any action for forfeiture or otherwise.

 

5.13                        Entire agreement

 

(A)                               This Lease constitutes the whole and only agreement between the parties relating to the subject matter of this Lease.

 

(B)                               Each party acknowledges that in entering into this Lease, it is not relying upon any pre-contractual statement which is not set out in this Lease other than those contained in any written replies that the Landlord’s solicitors have given to the CPSE 1 issued by the Tenant and dated 13 October 2014 and written replies dated 16 October 2014 to the Tenant’s further enquiries dated 15 October 2014.

 

(C)                               Subject to the provisions of paragraph 5.13(B) and except in the case of fraud or negligence, no party shall have any right of action against any other party to this Lease arising out of or in connection with any pre-contractual statement except to the extent that it is repeated in this Lease.

 

(D)                               For the purposes of this paragraph 5.13, “pre-contractual statement” means any draft, agreement, undertaking, representation, warranty, promise, assurance or arrangement of any nature whatsoever, whether or not in writing, relating to the subject matter of this Lease made or given by any person at any time prior to this Lease becoming legally binding.

 

5.14                        Notices

 

(A)                               Any notice to be given under or in connection with this Lease shall be:

 

33

 

(i)                                     in writing (which for this purpose shall not include e-mail or fax); and

 

(ii)                                  delivered by hand or sent by first class post, special delivery or recorded delivery to the addressee at its registered office or such other address as previously notified in writing to the giver of the notice by the addressee.

 

(B)                               In the absence of evidence of earlier receipt, a notice given in accordance with paragraph 5.14(A)(ii) deemed to be given:

 

(i)                                     if delivered by hand before 5.00pm on a Business Day, on the day it is delivered;

 

(ii)                                  if delivered by hand after 5.00pm on any day, on the first Business Day after the day it is delivered; and

 

(iii)                               if sent by first class post, special delivery or recorded delivery, on the second Business Day after it is posted.

 

5.15                        Jurisdiction

 

(A)                               This lease and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of England and Wales.

 

(B)                               The parties irrevocably agree that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this Lease or its subject matter or formation (including non-contractual disputes or claims).

 

5.16                        Invalidity

 

Each of the provisions of this Lease is separate and severable from the others and if at any time any provision of this Lease is or becomes illegal, invalid or unenforceable, that shall not affect or impair the legality, validity or enforceability of any other provision of this Lease.

 

34

 

SCHEDULE 6

 

Right of First Refusal

 

Part I

 

Right of First Refusal on proposed assignment or underletting of the whole of the Premises

 

6.1                               Definitions

 

(A)                               In this Schedule 6, the following definitions apply:

 

“Consideration” the consideration specified for the surrender of this Lease in the Offer (or Revised Offer pursuant to paragraph 6.3(C) of this Part I of this Schedule), whether or not monetary and whether payable by the Landlord or the Tenant;

 

“Landlord’s Warning Notice” a notice in a form complying with the requirements of schedules 3 and 4 of the Order;

 

“Offer” an offer complying with the provisions of paragraph 6.3(A) of this Part I of this Schedule;

 

“Order” the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003; and

 

“Right of First Refusal” the right of first refusal of the Landlord under this Part I of this Schedule.

 

6.2                               Making an Offer

 

(A)                               If the Tenant wishes to assign this Lease or underlet this Lease the Tenant must first make an Offer to the Landlord.

 

(B)                               The Right of First Refusal operates in respect of each party who is or becomes the Tenant.

 

6.3                               The Offer

 

(A)                               An “Offer” for the purposes of this Schedule is an offer to surrender this Lease to the Landlord free from encumbrances (other than any subject to which this Lease was granted) and which:

 

(i)                                     is unconditional;

 

(ii)                                  is made irrevocably by the Tenant unless and until rejected or treated as rejected by the Landlord pursuant to paragraph 6.3(C) of this Part I of this Schedule;

 

(iii)                               is made in the form set out in Part II of this Schedule;

 

(iv)                              is submitted by the Tenant to the Landlord in duplicate, both parts of which are signed by the Tenant;

 

35

 

(v)                                 specifies the Consideration; and

 

(vi)                              specifies whether any tenant’s fixtures are included and if so itemises them.

 

(B)                               Within 25 Business Days of receipt (or deemed receipt) of an Offer, the Landlord shall be entitled (but not obliged) to give notice in writing to the Tenant stating either:

 

(i)                                     that it does not wish to accept the Offer in which event the provisions of paragraph 6.3(C) will apply; or

 

(ii)                                  that it is minded to accept the Offer at the Consideration, subject to compliance with section 38A(4) of the Landlord and Tenant Act 1954 in which event subject to compliance by the Landlord and the Tenant with paragraph 6.4 the Landlord will accept the Offer in accordance with paragraph 6.5 within 5 (five) Business Days of compliance by the Tenant with the provisions of paragraph 6.4(B);

 

(C)                               In the event (i) the Landlord declines to accept the Offer pursuant to paragraph 6.3(B)(i) or (ii) at the expiry of the 25 Business Days’ period specified in paragraph 6.3(B) the Landlord has not notified the Tenant that it is minded (subject to compliance with Section 38A(4) of the Landlord and Tenant Act 1954) to accept a surrender of this Lease and the Offer is thereby treated as rejected by the Landlord or (iii) the Landlord has not within 20 Business Days after notifying the Tenant pursuant to paragraph 6.3(B)(ii) that it is minded to accept the Offer then complied with the provisions of Section 38A(4) of the Landlord and Tenant Act 1954 and paragraph 6.4(A) and following compliance by the Tenant with paragraph 6.4(B) accepted the Offer pursuant to paragraph 6.5, the Tenant may assign or underlet this Lease to a third party tor a consideration determined by the Tenant, provided that:

 

(i)                                     the Tenant must comply with the provisions of paragraph 3.20 (other than paragraph 3.20(E)) of Schedule 3;

 

(ii)                                  the Tenant shall keep the Landlord fully informed of its negotiations with third parties in respect of any proposed assignment or underletting, including promptly disclosing drafts of any heads of terms (provided that such heads of terms may be redacted by the Tenant if the Tenant reasonably considers it to be necessary, save that the key terms including the consideration must be disclosed to the Landlord);

 

(iii)                               the third party transaction must be bona fide and on arm’s length terms; and

 

(iv)                              if the proposed assignment or underlease to a third party would be for less than the Consideration specified in the Offer, the Tenant must first offer to surrender this Lease to the Landlord for the price which has been agreed with the proposed assignee or undertenant (the “Revised Offer’’) and the Landlord shall be entitled but not obliged within 10 Business Days of receipt (or deemed receipt), time being of the essence, of the Revised Offer to decline the Revised Offer or to notify the Tenant that it is minded to accept the Revised Offer subject to compliance with Section 38A(4) of the Landlord and Tenant Act 1954.  In the event that the Landlord fails to respond to the Revised Offer within the said 10 Business Day period the Revised Offer will be treated as having been rejected by

 

36

 

the Landlord.  The Revised Offer shall comply in all respects with the provisions of paragraph 6.3(A) subject to any necessary revisions to the form set out in Part II of this Schedule and the Consideration for the purposes of the Revised Offer shall be the consideration for which the Tenant is intending to dispose of this Lease whether monetary or not monetary and the terms of this paragraph (C) apply to the Revised Offer as if it were an Offer, save in respect of the time in which the Landlord must notify the Tenant of whether it intends to accept.

 

6.4                               Advance validation of the Offer or Revised Offer

 

(A)                               The Offer or Revised Offer is only capable of acceptance by the Landlord if it is preceded by compliance with section 38A(4) of the Landlord and Tenant Act 1954 and the service by the Landlord of a Landlord’s Warning Notice on the Tenant in relation to the offer to surrender this Lease contained in the Offer or Revised Offer.

 

(B)                               In response to any Landlord’s Warning Notice and as a precondition to the acceptance of an Offer or Revised Offer, the Tenant must first have made a declaration or statutory declaration as appropriate in a form complying with the requirements of schedule 4 of the Order, such declaration or statutory declaration to be provided to the Landlord within 10 Business Days of receipt of the Landlord’s Warning Notice.

 

(C)                               For the avoidance of doubt, neither the service of a Landlord’s Warning Notice nor the making of a declaration or statutory declaration by the Tenant pursuant to paragraph 6.4(C) will bind the Landlord to accept the Offer or Revised Offer.

 

6.5                               Acceptance of the Offer or Revised Offer

 

(A)                               The method of acceptance of the Offer or Revised Offer by the Landlord is to be effected by the return to the Tenant of one part of the Offer or Revised Offer duly signed by or on behalf of the Landlord, with a reference to the Landlord’s Warning Notice and the Tenant’s declaration or statutory declaration endorsed on it in compliance with the requirements of schedule 4 of the Order.  The Offer or Revised Offer shall be accepted within 5 (five) Business Days of the Tenant making a declaration or statutory declaration as appropriate in accordance with paragraph 6.4(B) and providing a copy of the same to the Landlord.

 

(B)                               If the Offer or Revised Offer is duly accepted by the Landlord:

 

(i)                                     the Tenant will surrender and yield up to the Landlord and the Landlord will accept a surrender of the Premises so that the Term created by this Lease will merge in the reversion immediately expectant on this Lease;

 

(ii)                                  completion of the said surrender is to take place on the date 20 Business Days after the date that the Offer or Revised Offer is accepted by the Landlord or on such earlier date as the Landlord may prescribe;

 

(iii)                               on completion of the surrender, the Consideration is to be paid;

 

37

 

(iv)                              the surrender is to be in such form as the Landlord reasonably requires, reciting the Consideration, and shall not relieve the Tenant from any subsisting liability under or in connection with this Lease up to the time of the surrender;

 

(v)                                 the Premises shall be surrendered with vacant possession, provided that the Tenant will not be in breach of this requirement if there remains on the Premises any of the Tenant’s loose chattels fixtures or fittings of a minor or inconsequential nature; and

 

(vi)                              the Standard Commercial Property Conditions (Second Edition) are to apply to the agreement for the surrender constituted by the acceptance by the Landlord of the Offer or Revised Offer.

 

(C)                               On completion of the surrender:

 

(i)                                     the Tenant will hand over to the Landlord:

 

(a)                                 this Lease;

 

(b)                                 the duly executed original of the deed of surrender;

 

(c)                                  duly executed discharges in form DS1 of all registered charges (if applicable);

 

(d)                                 certificates of non-crystallisation in respect of any floating charges (if applicable); and

 

(e)                                  duly executed deeds of release in respect of any equitable charges (if applicable); and

 

(f)                                   the Landlord will hand over to the Tenant the duly executed counterpart of the deed of surrender.

 

38

 

Part II

 

Prescribed form of offer

 

To the Landlord, and to whom it may concern

 

Right of First Refusal in the Lease dated [          ]2014 and made between (1) Reckitt Benckiser Healthcare (UK) Limited and (2) RB Pharmaceuticals Limited (the “Lease”) relating to the right of the Landlord to require a surrender of the Lease if the Tenant wishes to assign or underlet

 

Take notice that we, the Tenant, having made a decision to dispose of the Lease by way of assignment or underletting to a third party make an Offer to you in accordance with Part I of Schedule 6 of the Lease on the following terms:

 

(A)                               the Consideration is [       ];

 

(B)                               the Offer [excludes tenant’s fixtures] [includes the tenant’s fixtures itemised in the attached list];

 

(C)                               if the Offer is not accepted by you, it is intended to assign or underlet the Lease, subject to the provisions of paragraph 3.20 (other than paragraph 3.20 (E))of Schedule 3 and the provisions of Part I of Schedule 6 of the Lease to a third party;

 

(D)                               this notice constitutes an Offer to you to surrender the Lease for the Consideration, capable of acceptance by you in accordance with the provisions of Part I of Schedule 6 of the Lease;

 

(E)                                the terms of Part I of Schedule 6 of the Lease are incorporated by reference into this Offer; and

 

(F)                                 the words and expressions designated by initial capital letters in this Offer are defined in Part I of Schedule 6 of the Lease and have the same meanings in this Offer.

 

You have 25 Business Days to notify us that you are minded to accept the Offer and thereafter to serve a Landlord’s Warning Notice on us, and to then accept this Offer by signing the duplicate of this letter, or another copy of it, in a manner indicating acceptance and sending it to us within 5 Business Days following the date on which you  receive our Landlord and Tenant Act 1954 declaration or statutory declaration.

 

This Offer is not capable of acceptance unless and until section 38A(4) of the Landlord and Tenant Act 1954 has been complied with in accordance with paragraph 6.4(A) of Part I of Schedule 6 of the Lease.

 

You are referred to Part I of Schedule 6 of the Lease as to your rights, and the consequences of failure to accept this Offer in time or to comply with the conditions of exercise of the Right of First Refusal.

 

	
Dated   [             ]
    	
 
    
	
 
    	
 
    
	
 
    	
 
    

 

39

 

[The Tenant]

 

We acknowledge receipt of the Offer of which this is the duplicate [a copy], and having:

 

given a Landlord’s Warning Notice in respect of the Offer; and

 

received from you on [insert date] a [declaration] [statutory declaration] in a form complying with the requirements of section 38A(4) of the Landlord and Tenant Act 1954, in response;

 

	
we   accept the Offer.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
[The   Landlord]
    	
 
    

 

40

 

SCHEDULE 7

 

First Right of Refusal

 

Part I

 

Right of First Refusal on proposed sale of the freehold title of the Premises

 

7.1                               Definitions

 

(A)                               In this Schedule 7, the following definitions apply:

 

“Consideration” the consideration specified for the Reversion in the Offer (or Revised Offer pursuant to paragraph 7.3(C)(iii) of this Part I of this Schedule), whether or not monetary;

 

“Offer” an offer complying with the provisions of paragraph 7.3 of this Part I of this Schedule; and

 

“Right of First Refusal” the right of first refusal of the Tenant under this Part I of this Schedule.

 

7.2                               Making an Offer

 

(A)                               If the Landlord wishes to sell the Reversion the Landlord must first make an Offer to the Tenant.

 

(B)                               The Right of First Refusal operates in respect of each party who is or becomes the Landlord.

 

7.3                               The Offer

 

(A)                               An “Offer” for the purposes of this Schedule is an offer to sell the Reversion to the Tenant free from encumbrances (other than this Lease and the Title Matters) and which:

 

(i)                                     is unconditional;

 

(ii)                                  is made irrevocably by the Landlord unless and until rejected or treated as rejected by the Tenant pursuant to paragraph 7.3(C) of this Part I of this Schedule;

 

(iii)                               is made in the form set out in Part II of this Schedule;

 

(iv)                              is submitted by the Landlord to the Tenant in duplicate, both parts of which are signed by the Landlord;

 

(v)                                 specifies the Consideration;

 

(vi)                              specifies whether any landlord’s fixtures are included and if so itemises them.

 

(B)                               Within 25 Business Days of receipt (or deemed receipt of an Offer), the Tenant shall be entitled (but not obliged) to give notice in writing to the Landlord stating either:

 

41

 

(i)                                     that it rejects the Offer in which event the provisions of paragraph 7.3(C) will apply; or

 

(ii)                                  that it wishes to accept the Offer.

 

(C)                               In the event (i) the Tenant declines to accept the Offer pursuant to paragraph 7 3(B)(i) or (ii) at the expiry of the 25 Business Days’ period specified in paragraph 7.3(B) the Tenant has not notified the Landlord that it wishes to acquire the Reversion and the Offer is thereby treated as rejected by the Tenant or (iii) the Tenant has not within 5 (five) Business Days after notifying the Landlord pursuant to paragraph 7.3(B)(ii) that it wishes to accept the Offer then accepted the Offer pursuant to paragraph 7.4, the Landlord may dispose of the Reversion to a third party for a consideration determined by the Landlord and which may be less than the Consideration specified in the Offer provided that:

 

(i)                                     the Landlord shall keep the Tenant fully informed of its negotiations with third parties in respect of any transfer of the Reversion, including promptly disclosing drafts of any heads of terms (provided that such heads of terms may be redacted by the Landlord if the Landlord reasonably considers it to be necessary, save that the key terms including the consideration must be disclosed to the Tenant);

 

(ii)                                  the third party transaction must be bona fide and on arm’s length terms; and

 

(iii)                               if the proposed disposal to a third party would be for less than the Consideration specified in the Offer, the Landlord shall first offer to sell the Reversion to the Tenant for the price which has been agreed with the proposed purchaser of the Reversion (the “Revised Offer”) and the Tenant shall be entitled but not obliged within 10 Business Days of receipt (or deemed receipt), time being of the essence, of the Revised Offer to decline the Revised Offer or to accept the Revised Offer.  In the event that the Tenant fails to respond to the Revised Offer within the said 10 Business Day period the Revised Offer will be treated as having been rejected by the Tenant.  The Revised Offer shall comply in all respects with the provisions of paragraph 7.3(A) subject to any necessary revisions to the form set out in Part II of this Schedule and the Consideration for the purposes of the Revised Offer shall be the consideration for which the Landlord is intending to dispose of the Reversion whether monetary or not monetary and the terms of this paragraph (C) apply to the Revised Offer as if it were an Offer, save in respect of the time in which the Tenant must notify the Landlord of whether it intends to accept.

 

7.4                               Acceptance of the Offer or Revised Offer

 

(A)                               The method of acceptance of the Offer or Revised Offer by the Tenant is to be effected by the return to the Landlord of one part of the Offer or Revised Offer duly signed by or on behalf of the Tenant.

 

(B)                               If the Offer or Revised Offer is duly accepted by the Tenant:

 

(i)                                     the Landlord will transfer to the Tenant and the Tenant will accept a transfer of the Reversion;

 

42

 

(ii)                                  completion of the said transfer is to take place within 20 Business Days after the date that the Offer or Revised Offer is accepted by the Tenant or on such earlier date as the Tenant may prescribe;

 

(iii)                               on completion of the transfer, the Consideration is to be paid;

 

(iv)                              the transfer is to be in such form as the Tenant reasonably requires, reciting the Consideration; and

 

(v)                                 the Standard Commercial Property Conditions (Second Edition) are to apply to the agreement for the transfer constituted by the acceptance by the Tenant of the Offer or Revised Offer, provided that the Landlord shall not be required to transfer the Reversion with the benefit of vacant possession.

 

(C)                               On completion of the transfer:

 

(i)                                     the Landlord will hand over to the Tenant:

 

(a)                                 any relevant title deeds, including this Lease;

 

(b)                                 the duly executed original form TR1 or TP1, as applicable;

 

(c)                                  duly executed discharges in form DS1 of all registered charges (if applicable);

 

(d)                                 certificates of non-crystallisation in respect of any floating charges (if applicable); and

 

(e)                                  duly executed deeds of release in respect of any equitable charges (if applicable).

 

(ii)                                  the Tenant will hand over to the Landlord the duly executed counterpart of form TR1 or TP1, as applicable.

 

43

 

Part II

 

Prescribed form of offer

 

To the Tenant, and to whom it may concern,

 

Right of First Refusal in the Lease dated [           ]2014 and made between (1) Reckitt Benckiser Healthcare (UK) Limited and (2) RB Pharmaceuticals Limited (the “Lease”) relating to the right of the Tenant to require a transfer of the reversion of the Lease (the “Reversion”) if the Landlord wishes to sell

 

Take notice that we, the Landlord, having made a decision to sell the Reversion now make an

 

Offer to you in accordance with Part I of Schedule 7 of the Lease on the following terms:

 

(A)                               the Consideration is [        ];

 

(B)                               if the Offer is not accepted by you, it is intended to sell the Reversion to a third party;

 

(C)                               this notice constitutes an Offer to you to sell the Reversion for the Consideration, capable of acceptance by you in accordance with the provisions of Part I of Schedule 7 of the Lease;

 

(D)                               the terms of Part I of Schedule 7 of the Lease are incorporated by reference into this Offer; and

 

(E)                                the words and expressions designated by initial capital letters in this Offer are defined in Part I of Schedule 7 of the Lease and have the same meanings in this Offer.

 

You have 25 Business Days to accept the Offer by signing the duplicate of this letter, or another copy of it, in a manner indicating acceptance and sending it to us within the aforementioned 25 Business Days.

 

You are referred to Part I of Schedule 7 of the Lease as to your rights, and the consequences of failure to accept this Offer in time or to comply with the conditions of exercise of the Right of First Refusal.

 

Dated [             ]

 

	
 
    	
 
    
	
 
    	
 
    
	
[The   Landlord ]
    	
 
    

 

We acknowledge receipt of the Offer of which this is the duplicate and we accept the Offer.

 

	
 
    	
 
    
	
 
    	
 
    
	
[The   Tenant]
    	
 
    

 

44

 

[***]

 

45

 

	
Executed as a deed by
    	
)
    	
 
    
	
RECKITT BENCKISER
    	
)
    	
 
    
	
HEALTHCARE (UK) LIMITED
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
 
    	
 
    	
 
    
	
acting by a director
    	
)
    	
/s/ W R Mordan
    
	
in the presence of:
    	
)
    	
Director
    

 

 

	
Witness’s   signature:
    	
/s/ Christine   Logan
    	
 
    
	
 
    	
 
    	
 
    
	
Name   (Print):
    	
Christine   Logan
    	
 
    
	
 
    	
 
    	
 
    
	
Occupation:
    	
Company   Secretary
    	
 
    
	
 
    	
 
    	
 
    
	
Address:
    	
[***]
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Executed as a deed by
    	
)
    	
 
    
	
RB PHARMACEUTICALS
    	
)
    	
 
    
	
LIMITED
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
 
    	
 
    	
 
    
	
acting by a director
    	
)
    	
 
    
	
in the presence of:
    	
)
    	
Director
    
	
 
    	
 
    	
 
    
	
Witness’s   signature:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name   (Print):
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Occupation:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
 
    
				

 

46

 

	
Executed as a deed by
    	
)
    	
 
    
	
RECKITT BENCKISER
    	
)
    	
 
    
	
HEALTHCARE (UK) LIMITED
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
 
    	
 
    	
 
    
	
acting by a director
    	
)
    	
 
    
	
in the presence of:
    	
)
    	
Director
    

 

 

	
Witness’s   signature:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name   (Print):
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Occupation:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Executed as a deed by
    	
)
    	
/s/ Andrew Gawman
    
	
RB PHARMACEUTICALS
    	
)
    	
 
    
	
LIMITED
    	
)
    	
 
    
	
 
    	
)
    	
 
    
	
 
    	
 
    	
 
    
	
acting by a director
    	
)
    	
Andrew Gawman
    
	
in the presence of:
    	
)
    	
Director
    
	
 
    	
 
    	
 
    
	
Witness’s   signature:
    	
/s/ Steven   Lucas
    	
 
    
	
 
    	
 
    	
 
    
	
Name   (Print):
    	
Steven   Lucas
    	
 
    
	
 
    	
 
    	
 
    
	
Occupation:
    	
Solicitor
    	
 
    
	
 
    	
 
    	
 
    
	
Address:
    	
[***]
    	
 
    
				

 

47

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