Document:

Exhibit 10.33

 

Confidential

Materials omitted and filed separately with the Securities and Exchange

Commission.  Asterisks denote omissions.

 

 

MASTER PRODUCTION

AGREEMENT

 

This Master Production Agreement (this “Agreement”) is made as of this 1st

day of December, 1998 between Bio Science Contract Production

Corp., a Maryland corporation (“BSCP”),

and Transkaryotic Therapies Inc, a Delaware corporation (“Client”).

 

RECITALS

 

A.            BSCP operates a multi-client production facility,

operated in accordance with the U.S. 

Food and Drug Administration’s (the “FDA”)

current Good Manufacturing Practices, located at 5901 East Lombard Street,

Baltimore, Maryland 21224 (the “Facility”).

 

B.            Client

is a development-stage biotechnology company active in research and development

of drug products.

 

C.            From time to time, Client desires to have BSCP produce,

and BSCP is willing to produce, one or more Products (as hereinafter defined)

at the Facility.  Each Product shall be

described in a separate Schedule A-( )

(each Product produced pursuant to this Agreement and the Schedules hereto

shall be separately sequentially numbered and identified, beginning with “1”,

and the blank spaces set forth within the parentheses to each Schedule shall

contain such number, for example, the Schedules for the first Product shall be Schedule A-(1), Schedule B-(1),

etc.).  Each Product shall be produced

in accordance with the terms and subject to the conditions hereinafter set

forth and contained in the Schedules hereto.

 

D.            BSCP shall produce each Product pursuant to the

Production Record for each Product and the Operating Documents.  Based on the information provided to BSCP

pursuant to Paragraph 1 below, BSCP shall prepare, and Client shall approve,

the Production Record for each Product in accordance with the terms of this

Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and

the mutual promises and covenants hereinafter set forth, BSCP and Client,

intending to be legally bound, hereby agree as follows:

 

 

1

 

 

DEFINITIONS

 

 

The following capitalized

terms used in this Agreement shall have the following meanings:

 

“BSCP Parties”

means BSCP, its employees, agents and affiliates.

 

“Commencement Date”

with respect to each Product will be set forth on Schedule B-(__) attached hereto, relating to that Product.

 

“Product”

shall mean each bulk substance that BSCP has agreed to produce pursuant to the

Production Record relating thereto.

 

“Production Record”

shall mean the Client-specific batch production records required for BSCP to

produce each Product in the Facility.

 

“Production Term”

shall mean, for each Product, that period commencing on the Commencement Date

and terminating on the Termination Date.

 

“BSCP Operating

Documents” shall mean the standard operating procedures, standard

manufacturing.  procedures, protocols,

validation documentation, and supporting documentation, such as environmental

monitoring, for operation and maintenance of the Facility and BSCP equipment.

 

“Client Operating Documents”

shall mean the standard operating procedures, standard manufacturing

procedures, protocols and validation documentation specific to the Client’s

Product and Client equipment.

 

“Termination Date”

for each Product will be set forth on Schedule

B-(__) attached hereto, relating to that Product.

 

“cGMP”

means FDA’s current good manufacturing practices as specified in 21 CFR Article

210 and FDA’s guidance documents, and all successor regulations and guidance

documents thereto.

 

[Intentionally

left blank]

 

2

 

1.             Production

Record.  The Production Record shall

be prepared by BSCP under Client’s direction pursuant to the information

provided by Client.  Client shall

provide information and procedures required to create an approvable Production

Record and to produce the Product, and any intermediate or by-products thereof,

including:

 

(a)           Process

information, SOPs, production records, development reports

 

(b)           Quality

control assays

 

(c)           Raw

materials and raw materials test specifications

 

(d)           Product

packing and shipping instructions

 

(e)           Product

specific cleaning and decontamination information

 

If Client is unable to

provide the items listed above, Client shall cooperate reasonably with BSCP to

enable BSCP to write the Production Record. 

When BSCP finalizes the Production Record, it shall deliver it to Client

for its approval and acceptance.  Client

shall notify BSCP in writing of any objections it has to the Production Record,

and upon such notification, BSCP and Client shall work together promptly to

resolve such objections.  Upon Client’s

written notification to BSCP that the Production Record is satisfactory, the

Production Record shall be deemed approved and accepted by Client.  The ownership of the Production Record shall

remain with Client at all times.  The

cost of the preparation of the Production Record shall be as set forth on Schedule B-(__) attached hereto.

 

2.             [**]  In

connection with the production of each Product hereunder in the Production

Area, BSCP shall supply [**].  Client

shall be responsible for providing to BSCP, in a timely manner, [**], other

than those to be supplied by BSCP required to produce each Product pursuant to

its Production Record (unless BSCP otherwise agrees in writing, to provide such

items).  Any Client-provided items with

respect to the production of a Product are as set forth in Schedule C-(__) attached hereto.  Client provided equipment, materials,

consumables, or other Client provided items shall only be used for Client production

or testing.

 

3.             Production Term.

 

(a)           Each Product shall be produced in the

suite identified on Schedule B-(  ),

such suite being called the “Production Area”. 

The Production Term is set forth in Schedule

B-(__) attached hereto relating to that Product.  The term of this Agreement shall continue in

full force and effect for a period ending on the later of 10 years from the

date hereof or the Termination Date of the final Product to-be produced

hereunder unless terminated earlier in accordance with the following provisions

of this Section 3.

(b)           Each party (the “Terminating Party”)

shall have the right to terminate this Agreement upon six (6) months prior

written notice (the “Termination Period”) to the other party in accordance with

the following:

 

3

 

(i)            If

Client is the Terminating Party, it shall have the option (if set forth in

Client’s notice of termination to BSCP), in lieu of requiring BSCP to continue

its performance under the Agreement during the Termination Period, to elect to

pay BSCP, within [**] of the delivery of the termination notice, immediately

available funds equal to [**] production fee at the then current rate, together

with the costs of all materials and consumables purchased by BSCP through the

end of the Termination Period.  All

materials and consumables purchased by BSCP through the end of the Termination

Period should be delivered to the Client or its subsidiaries/designees at the

Client’s cost.

 

(ii)           If

BSCP is the Terminating Party, then BSCP and Client shall continue to perform

their respective obligations under this Agreement throughout the Termination

Period unless otherwise agreed to in writing by the parties.

 

All materials and consumables purchased by BSCP

through the end of the Termination Period should be delivered to the Client or

its subsidiaries/designees at the Client’s cost.

 

(c)           BSCP shall have the right to

terminate this Agreement [**].

 

(d)           Each party shall have the right to

terminate this Agreement (i) following a material breach of this Agreement that

the breaching party fails to remedy within [**] after written notice thereof by

the non-breaching party; and (ii) immediately upon the bankruptcy, insolvency,

dissolution, or winding up of the other party.

 

(e)           The expiration or earlier termination

of this Agreement shall not relieve the parties of any obligation accruing

prior to such expiration or termination including, without limitation, all

monetary obligations for work, services, materials, and costs previously

performed or incurred by BSCP pursuant to this Agreement.  The confidentiality and indemnification

provisions contained in the Agreement, the warranty provisions in Sections 5

(f) and 5 (g) and the miscellaneous provisions in Section 9 shall survive the

expiration or earlier termination of this Agreement.

 

4.             Compensation.  Compensation for BSCP’s production of each

Product under this Agreement shall be payable by Client to BSCP as follows:

 

(a)           Set-Up

Fee.  Simultaneously with its

execution of the Schedules attached hereto for the production of each Product,

Client shall pay to BSCP a non-refundable Set-Up fee per Production Term (a “Set-Up Fee”) as set forth on Schedule B-(__) attached hereto.  A Set-Up Fee shall compensate BSCP for the

work performed prior to commencement of the per diem charge for each Product.

BSCP shall not commence preparation for the production

of the Product prior to its receipt of a Set-Up Fee and, if applicable, a

separate fee to write the Production Record, in connection with each Product

production run.

 

4

 

(b)           [**]

Production Fee.

 

(i)            For

each Product, Client shall pay to BSCP a [**] production fee (the “[**] Production Fee”) as set forth in Schedule B-(__) attached hereto.  The [**] Production Fee shall be due and

payable in advance of the Commencement Date and on the same calendar date of

each subsequent [**] during the Production Term (if the Production Term

includes a period of time which [**], the [**] Production Fee [**] shall equal

the [**] multiplied by [**], which is the [**] Production Fee [**]).

 

(ii)           Materials

and consumables [**] in the [**] Production Fee, but shall be paid for by

Client at BSCP’s out-of-pocket cost for such materials and consumables upon

receipt of the invoice sent by BSCP to Client [**].

 

(c)           Other

Charges.  As required to produce the

Product, BSCP may provide [**] to Client (collectively the “Other Production Requirements”).  Client shall pay BSCP for the provision of

the Other Production Requirements as agreed upon in advance by BSCP and Client,

as set forth in Schedule D-(__)

attached hereto.  Client shall pay for

such Other Production Requirements upon receipt of the invoice sent by BSCP to

Client, except if such charges are anticipated to exceed $[**], then Client

shall pay such charges in advance. 

Client shall provide, in Schedule

D-(__) attached hereto, a list of all hazardous wastes or

substances, and the anticipated quantities, that will be used in the production

process for each Product.  BSCP shall

notify Client of those hazardous wastes or substances that cannot be disposed

of through BSCP’s waste disposal system in the quantities that Client proposes

will be produced in connection with the production of each Product.  BSCP’s waste disposal system is both a

decontamination and pH adjustment system. 

Client agrees to pay for the disposal by BSCP of such materials that

cannot be disposed of by BSCP in accordance with the rates set forth on Schedule D-(__) attached hereto.  To the extent that any incorrect information

provided by Client on Schedule D-(__)

attached hereto results in increased costs to BSCP to dispose of hazardous

wastes or substances, Client shall pay those incremental costs.  The waste disposal charges shall be paid

within [**] of receipt of the invoice sent by BSCP to Client.

 

(d)           Taxes.  Client agrees to pay for any sales and use

taxes or other (the “Taxes”)

resulting from BSCP’s production of each Product hereunder (except for income

or personal property taxes payable by BSCP). 

To the extent not paid by Client, Client shall indemnify and hold

harmless the BSCP Parties from and against any and all penalties, fees,

expenses and costs, whatsoever, in connection with the failure by Client to pay

the Taxes.  BSCP shall not collect any

sales and use taxes from Client in connection with the production of any

Product hereunder if Client obtains an exemption therefrom.  In furtherance of the foregoing, BSCP shall

not collect sales and use taxes from Client in connection with the production

of any Product hereunder if (i)(A) Client provides a certificate to BSCP in

which it states that such Product will be used or consumed outside of the State

of Maryland and (B) Product is either shipped directly outside the State of

Maryland or stored in Maryland pending shipment to another State or (ii) Client

provides a certificate to BSCP in which it states that such Product is for

resale.

 

5

 

(e)           Late

Charge; Interest.  Any fee, charge

or other payment due to BSCP by Client hereunder (including, without

limitation, pursuant to a Schedule attached hereto) that is not paid within 30

days after it is due shall accrue interest (except as is provided in the final

sentence of this section 4(e)), from the date when the same was due and

payable, at the rate of twelve percent (12%) per annum, payable on demand.  If unpaid for more than [**], Client [**]

and simultaneously pay to BSCP the unpaid balance of the [**] Production Fees

for the Product that are payable during the remainder of the Production Term

for the Product, and any other Obligations (as defined in subparagraph (h)

below) relating to the Product, all of which shall become immediately due and

payable.  Notwithstanding anything

contained in this section 4(e) to the contrary, if there is a bona fide dispute

between Client and BSCP as to any fee, charge, or other payment due to BSCP by

Client hereunder with respect to which Client has given BSCP prompt written

notice, specifying in detail the facts and circumstances occasioning such bona

fide dispute, interest shall not accrue on such unpaid fee, charge, or other

payment, and Client shall not have to vacate the production area as described

above in this paragraph 4 (e).

 

(f)            Payments.  All payments to BSCP hereunder by Client

shall be by check, wire transfer, money order, or other method of payment

approved in writing by BSCP.

 

(g)           Security

Deposit.  Client shall,

simultaneously with the execution and delivery of the applicable Schedules

attached hereto relating to the production of each Product, remit to BSCP a

security deposit (each, a “Security Deposit”)

in an amount equal to $[**] for each Product; however, if Client has already

remitted to BSCP a reservation deposit in the amount of $[**] with respect to a

Product pursuant to the terms of a reservation deposit agreement with BSCP,

then the amount of said reservation deposit (the “Reservation Deposit”) shall be withdrawn by BSCP and credited

toward the Security Deposit payable with respect to a Product (Client shall be

responsible for remitting any deficiency between the amount of the Reservation

Deposit and the Security Deposit required hereunder).  If BSCP is producing multiple products in the facility then Client

shall only pay one Security Deposit in which case such Security Deposit shall

be held by BSCP until completion of all Client’s Product Production Terms.  The Security Deposit shall be returned to

Client within 30 days after the termination of the last Production Term for the

last Product if Client has paid all fees, charges, or other payments due in

connection with the production of each Product, including charges for lost,

destroyed, stolen or damaged property of BSCP (all such fees, charges, or other

payments being called “Obligations”).  If any Obligations with respect to a Product

remain outstanding after the expiration of such 30-day period, then BSCP shall

be entitled to apply the Security Deposit against the payment of such

Obligations, and the amount of the Security Deposit remaining, if any, after

the application of such payments shall be returned to Client.  Client shall remain liable to BSCP for any

deficiencies remaining after the application of the Security Deposit against

the Obligations.

 

(h)           Damage

to Equipment.  Client shall be

responsible for the reasonable cost of repairing or replacing (to the extent

that BSCP determines, in its reasonable judgment that repairs cannot be

adequately effected) any BSCP equipment damaged or destroyed by Client

Personnel, as defined in Paragraph 5(b) hereof (ordinary wear and tear

excepted).

 

6

 

5.             The

Production Process.

 

(a)           The

Production Record.  BSCP shall

adhere to the Production Record in producing each Product, except to the extent

that such Production Record conflicts with applicable law, in which event, BSCP

will discuss the conflict with Client and attempt to resolve the issues before

complying with applicable law.  BSCP

will maintain accurate records for the production of each Product and will

provide all batch records approved by BSCP’s QA department at Client’s

request.  Client shall own the

Production Records and Client Operating Documents relating to each Product

produced for Client.  BSCP shall own all

BSCP Operating Documents, and shall make copies thereof available to Client

upon Client’s request and at Client’s expense. 

BSCP Operating Documents shall remain BSCP Confidential Information.

 

BSCP will provide to Client documentation regarding

the production of purified bulk product for the Chemistry, Manufacturing and

Controls (“CMC”) section required for a Biologics License Application (“CBLA”)

or an analogous Marketing Authorization Application as required by the FDA or

other authorized regulatory authority.

 

(b)           Client

Personnel.  Client’s employees and

agents (including its independent contractors) (collectively, “Client Personnel”) [**].  Client Personnel working at the Facility

shall be and remain employees of Client, which solely shall be responsible for

(i) the payment of their compensation (including applicable Federal, state and

local withholding, FICA and other payroll taxes, workers’ compensation

insurance, health insurance, and other similar statutory and fringe benefits)

and (ii) the payment of any and all expenses, costs, claims and losses

(including, but not limited to attorneys’ fees and related expenses) in

connection with injuries suffered by Client Personnel while at the Facility or

elsewhere except as a result of BSCP’s willful misconduct or gross negligence

(such expenses, costs, claims, losses, attorneys’ fees and related expenses

being hereinafter collectively called, “Injury

Expenses”).  Client covenants

and agrees, with respect to Client Personnel working at the Facility, to

maintain workers’ compensation benefits and employers’ liability insurance as

required by applicable Federal and Maryland laws.  In addition, Client covenants and agrees to indemnify and hold

harmless the BSCP Parties from and against any and all Injury Expenses.

 

(c)           Personnel.  BSCP and Client both agree not to employ or

solicit for employment (or for use as an independent contractor) either party’s

employees during the term of this Agreement and for a period of two (2) years

thereafter.

 

(d)           No

Product Development, No Representations or Warranties as to Safety of Product,

Products Liability Insurance. 

Client acknowledges that neither BSCP nor its personnel will engage in

any Product refinement or development (other than the production of each

Product pursuant to the Production Record). 

BSCP makes no representation or warranty regarding each Product’s safety

or effectiveness, or otherwise, except that BSCP shall produce each Product in

accordance with all applicable cGMP guidelines to meet the description set

forth in Schedule A - (  ) or the specifications set forth

in the Production Record.  Client

acknowledges and agrees that neither BSCP nor its personnel have participated

in the invention or testing of any Product, or have evaluated its safety or suitability

for use in humans or others.

 

7

 

Other than quality

control testing of each Product by BSCP as required by the Production Record,

BSCP shall not be in any way responsible for Product testing.  Client shall maintain at its sole cost and

expense, at all times during the term of this Agreement and for three years

thereafter, a general liability insurance policy (the “Insurance Policy”) with bodily injury,

death and property damage limits of two million U.S. dollars ($2,000,000) per

occurrence and five million U.S. 

dollars ($5,000,000) in the aggregate and product liability coverage of

three million U.S. dollars ($3,000,000) per occurrence as of September 15,

1998.  Promptly, following execution of

the Master Production Agreement, Client shall provide a Certificate of

Insurance to BSCP signed by an authorized representative of Client’s

underwriter evidencing the insurance coverage required by the Agreement and

providing for at least thirty (30) day’s prior notice to BSCP of any

cancellation, termination, material change or reduction of such coverage.

 

BSCP shall maintain at its sole cost and expense, at

all times during the term of this Agreement and for three years thereafter, a

general liability insurance policy with product liability coverage of one

million U.S. dollars ($1,000,000) per occurrence and two million U.S. dollars

($2,000,000) in the aggregate with an umbrella of ten million U.S. dollars

($10,000,000).  BSCP shall give Client

thirty (30) days notice of any cancellation, termination, or material change or

reduction of such coverage.

 

(e)           Delivery

of Each Product; Other Shipping Charges. 

Upon completion of the Production Term for a Product (or sooner upon

Client’s instructions), BSCP shall ship (i) the Product, and (ii) client supplied

equipment, unused materials and consumables, samples, or any other client owned

items (together with the Product being shipped, the “Shipped Items”).  All

such shipments shall be in accordance with Client’s packing and shipping

instructions and procedures supplied by Client as part of the Production Record

or, with respect to the items referenced in subparagraph (ii) above, as

provided by Client to BSCP, and shall be by common carrier unless otherwise

specified by Client.  Delivery shall be

F.O.B. Shipping Point (the Facility). 

Client shall provide its preferred carrier’s account number and shall

pay for all shipping costs in connection with the delivery of each Shipped

Item.  BSCP’s responsibility, except as

set forth herein, ceases and Client’s risk of loss arises, upon BSCP’s delivery

of each Shipped Item to the common carrier.

 

(f)            BSCP

Liability for Destroyed or Damaged Client Production Equipment and Materials;

Dispute.

 

(i)(A) If during a Product production process,

production equipment supplied by Client (“Client

Production Equipment” as set forth in Schedule C) is destroyed or

damaged by BSCP Personnel and such damage or destruction resulted from BSCP’s

failure to execute such Product production process in conformity with the

Production Record, then, except as provided in subparagraph (i)(B) below, BSCP

shall be responsible for repairing or replacing the destroyed or damaged Client

Production Equipment or, at BSCP’s sole option, paying to Client the

replacement value of the damaged or destroyed Client Production Equipment at

the time of its damage or destruction. 

In no other event shall BSCP be liable to Client for damaged or

destroyed Client Production Equipment.

 

8

 

(i)(B)

Notwithstanding anything to the contrary set forth in subparagraph (i)(A)

above, if Client Production Equipment is destroyed or damaged by BSCP Personnel

while BSCP Personnel were acting at the direction of Client Personnel, then

BSCP shall not be liable to Client for damage or destruction occurring to

Client Production Equipment.

 

(ii)(A)

If during a Product production process, but prior to the delivery of such

Product to Client in accordance with the terms of this Agreement, all or a

portion of the Product and/or Materials supplied by Client (“Client Materials”)

are destroyed or damaged by BSCP Personnel, and such damage or destruction

resulted from BSCP’s failure to execute a Product production process in

conformity with the Production Record, then, except as provided in subparagraph

(ii)(B) below, BSCP shall use its best efforts to provide Client with

additional Product production time [**] in the applicable Production Area (or

another area at the facility suitable for a Product production process) without

charging Client a Set-Up Fee or [**] Production Fee, equal to the actual time

lost because of the destruction or damage of the Product and/or Client

Materials.

 

(ii)(B) Notwithstanding

anything to the contrary set forth in subparagraph (ii)(A) above, if during a

Product production process, but prior to the delivery of such Product to Client

in accordance with the terms of this Agreement, Product and/or Client Materials

are destroyed or damaged by BSCP Personnel while BSCP Personnel were acting at

the direction of Client Personnel, then BSCP shall have no liability to Client

as the result of such destruction or damage.

 

(iii)

BSCP and Client expeditiously shall attempt to resolve any dispute regarding

the liability of the parties under subparagraphs (i) and (ii) above, as

applicable, but if such dispute cannot be settled within [**] after the

occurrence of the applicable damage or destruction, then the dispute shall be

submitted to an arbitrator located in the State of the party not bringing the

action, with the requisite scientific background and training (the “Paragraph 5(f) Arbitrator”), selected

jointly by BSCP and Client.  The

Paragraph 5(f) Arbitrator, employing the Commercial Arbitration Rules of the

American Arbitration Association, shall determine the cause of such failure, and

the Paragraph 5(f) Arbitrator’s findings, unless clearly erroneous, shall be

final.  The costs and expenses of the

Paragraph 5(f) Arbitrator shall be borne by the party which does not prevail in

the arbitration proceeding.

 

(iv)

Client agrees that its sole remedy with respect to damaged or destroyed

Product, Client Materials (except for those circumstances covered by Paragraph

5(g) hereof) and Client Production Equipment is as set forth in this Paragraph

5(f), and in furtherance thereof, Client hereby waives all other remedies at

law or in equity regarding the foregoing.

 

(g)           BSCP

Liability for Non-Conforming Product; Dispute.

 

(i)            Client

shall have [**] after receipt of each Product and completed Production Record

(including all manufacturing and QC testing) to deliver to BSCP, in accordance

with the notice provisions set forth in Paragraph 9(d) hereof, written notice

of disapproval (the “Disapproval Notice”)

of such Product, after which time, if the Disapproval Notice is not sent to

BSCP, Client shall be deemed to have provided its final approval of the

Product.  The Disapproval Notice shall

state with specificity the reason(s) for Client’s

 

9

 

disapproval of the

Product.  Any Disapproval Notice sent to

BSCP in bad faith shall be null and void. 

If the Disapproval Notice shall be transmitted to BSCP in accordance

with the foregoing provisions within the time period therein set forth, then,

to determine if the Product fails to conform to the description set forth in Schedule A-(  )

or the specifications set forth in the Production Record and the Product can

not be used in clinical trials or for commercial use, BSCP shall have [**] to

conduct Product testing, upon the completion of which it and Client shall provide

one another with the results of their quality control tests and all related

paperwork and records relating to the production of the Product.  BSCP and Client expeditiously and in good

faith shall attempt to resolve any dispute regarding the interpretation of

varying quality control tests and related paperwork, but if such dispute cannot

be settled within [**] of the submission of such test results and related

paperwork, then the dispute shall be submitted to an arbitrator located in the

State of the party not bringing the action with the requisite scientific

background and training (the “Paragraph 5(g)

Arbitrator”), selected jointly within 14 days by BSCP and

Client.  The Paragraph 5(g) Arbitrator,

employing the Commercial Arbitration rules of the American Arbitration

Association, shall determine the cause of such failure, and the Paragraph 5(g)

Arbitrator’s findings, shall be final. 

Any additional testing or information that is generated as part of an

investigation will be reported with the Production Record.

 

(ii)           If

it is (A) agreed by BSCP and Client or (B) determined by the Paragraph 5(g)

Arbitrator, in accordance with the procedures set forth in subparagraph (i)

above, that the Product produced by BSCP hereunder failed to conform to the

description set forth in Schedule A-(  ) or the specifications set forth

in the Production Record due to the failure of (I) BSCP personnel properly to

execute the Production Record or (II) the utilities, then BSCP shall again

produce for Client the Product in accordance with the provisions of this

Agreement (the “Production Rerun”)

that portion of the non-conforming Product when the Production Area (or another

area at the Facility suitable for the Production Rerun) next becomes available,

without charging Client a Set-Up Fee or a [**] Production Fee for the

Production Rerun, but otherwise charging Client the fees and charges set forth

in Paragraph 4 hereof (to be paid in accordance with such provisions).  BSCP shall use its best efforts to perform

this production rerun with [**]. 

Notwithstanding the foregoing, BSCP shall have no liability to Client,

whatsoever, if it is determined, in accordance with the procedures set forth in

this Paragraph 5(g), that (aa) the Production Record was materially defective

and the non-conforming Product was the result thereof, (bb) Client Personnel

exerted significant physical influence over the production of the Product, or

were responsible for the non-conformance, or (cc) the failure of the utilities

or of BSCP personnel properly to execute the Production Record was not the

proximate cause of the failure of the Product produced by BSCP to conform to

the description set forth in Schedule A-( 

) or the specifications set forth in the Production Record.  Client agrees that its sole remedy with

respect to non-conforming Product is as set forth in this Paragraph 5(g), and

in furtherance thereof, Client hereby waives all other remedies at law or in

equity regarding the foregoing.

 

(iii)          The

costs and expenses of the Paragraph 5(g) Arbitrator shall be borne by BSCP if

it is required, in accordance with the provisions of this Paragraph 5(g), to

effect the Production Rerun.  In all

other events, Client shall be responsible for the payment of such costs and expenses.

 

10

 

(h)           Indemnification.

 

(i)            Client

shall indemnify and hold harmless the BSCP Parties from and against any and all

third-party claims, damages, costs and expenses of any kind (including

attorneys’ and experts’ fees) incurred by BSCP Parties in connection with or

relating to each Product, including, but not limited to, any third-party

infringement claims.

 

(ii)           BSCP

shall indemnify and hold harmless Client and its employees, agents and

affiliates (collectively, “Client Parties”) from and against any and all third

party claims, damages, costs and expenses of any kind (including attorneys’ and

experts’ fees) incurred by Client Parties resulting from infringement claims

against BSCP in connection with BSCP’s equipment or facility, or a cause as

described in 8b(ii) below.

 

(iii)          If

either party (the “Indemnified Parry”) promptly notifies the other party (the

“Indemnifying Party”) in writing of any action brought against the Indemnified

Party for which it is indemnified under (i) and (ii) of this Section 5 (i),

then the Indemnifying Party shall defend, indemnify and hold the Indemnified

Party harmless from and against all costs and damages incurred by the

Indemnified Party or assessed against it which arise out of such action,

provided that (i) the Indemnifying Party shall have sole control and authority

with respect to the defense or settlement of any such action, and (ii) the

Indemnified Party shall cooperate fully with the Indemnifying Party in the

defense of any such action.  Any

settlement of any such actions, which imposes any liability or limitation on

the Indemnified Party shall not be entered into without prior written consent

of the Indemnified Party.

 

(iv)          In

the event a claim is based partially on an indemnified claim described in (i) or

(ii) of this Section 5 or Section 8 (a) or 8 (b) and partially on a

non-indemnified claim, any payments and reasonable attorney fees incurred in

connection with such claims are to be apportioned between the parties in

accordance with the degree of cause attributable to each party.

 

(i)            Limitation

of Liability.  Subject to the

provisions of Paragraph 5(b) hereof and except for third-party claims under

5(h) and 8(b), Client hereby agrees that to the fullest extent permitted by

law, BSCP’s liability to Client for any and all injuries, claims, losses,

expenses, or damages, whatsoever, arising out of or in any way related to

BSCP’s production of each Product hereunder from any cause or causes,

including, but not limited to, negligence, errors, omissions, breach of

representations or warranties, or strict liability, and including, but not

limited to, the events covered by Paragraph 5(f), (g) or any non-third party

claims under 5(h) and Paragraph 8(b) hereof, shall not exceed the total charges

paid by Client to BSCP hereunder with respect to such Product.  To the extent that this clause conflicts

with any other clause in this Agreement, this clause shall take precedence over

such conflicting clause.  If applicable

law prevents enforcement of this clause, then this clause shall be deemed

modified to provide the maximum protection to BSCP as is allowable under

applicable law.

 

(j)            Storage.

 

(i)            Prior

to the Commencement Date.  Client

shall not deliver any Materials or other Client property to the Facility prior

to [**] before each applicable

 

11

 

Commencement Date.  Any such

Materials, equipment or other property delivered to the Facility prior to such

date may be accepted by BSCP for storage, in its sole discretion, and if so

accepted, shall be subject [**] from the period of acceptance until [**] prior

to the applicable Commencement Date, in accordance with BSCP’s storage rates

and procedures, as set forth on Schedule

E-(  ) attached hereto, as

amended from time to time.

 

(ii)           Storage

After Completion of the Production Term. 

Any Product, Materials, Equipment or other Client property that remains

at the Facility after completion of the applicable Production Term (the date of

such completion being called, the “Completion

Date”) may be stored by BSCP at the Facility upon Client’s request,

without cost, for up to 30 days after notice of disposition has been delivered

to Client.  If Client has not responded

prior to the expiration of such [**] period, BSCP may, in its sole discretion,

continue to store such Product, Materials and other Client property at the

Facility or elsewhere, in which event Client shall pay to BSCP a storage

charge, in accordance with BSCP’s storage rates and procedures as set forth on Schedule E-(  )

attached hereto, as amended from time to time, for the period beginning on the

[**] after the notice of disposition through the date that the storage

terminates.

 

6.             Confidential

Information.  All information

communicated by Client to BSCP, including the Production Record (collectively,

“Client Confidential Information”),

shall remain the exclusive property of Client, and shall be held in confidence

by BSCP and shall not be used by BSCP except in connection with the discharge

of its obligations under this Agreement. 

Client shall not disclose to any third party confidential information

regarding the Facility or the identity of any other BSCP client using the

Facility, or information regarding such other client’s product, processes or

operations at the Facility (collectively, “BSCP

Confidential Information”).

 

Client Confidential Information shall be disclosed to

BSCP personnel and consultants on a need to know basis only.  All consultants to BSCP are bound under

existing Non-Disclosure Agreements.  The

foregoing restrictions on use and disclosure shall not apply to any Client

Confidential Information or BSCP Confidential Information that:

 

(1)               was

known to the receiving party prior to its disclosure to the receiving party by

the disclosing party as evidenced by written documents predating the receiving

party’s receipt of such information; or

 

(2)               is

public knowledge at the time of its disclosure to the receiving party through

no act or omission or on its behalf; or

 

(3)               is

lawfully disclosed or made available to the receiving party by a third party

having no direct or indirect obligation to the disclosing party to maintain the

confidentiality of such Information; or

 

(4)               is

independently developed by the receiving party without the aid or benefit of

Information disclosed to the receiving party by the disclosing party.

 

12

 

Information may be

disclosed by the receiving party pursuant to a document lawfully issued by a

court or governmental agency provided that the receiving party notifies the

disclosing party immediately upon receipt of any such document.

 

7.             Security

Procedures.  Client Personnel

authorized to have access to the Facility shall abide by the security

procedures established by BSCP from time to time and communicated to

Client.  Client shall be liable for any

breaches of security by Client Personnel. 

In addition, Client shall reimburse BSCP for the cost of any lost

security cards issued to Client Personnel, [**].  All Client Personnel shall agree, in writing, to abide by BSCP

policies and standard operating procedures established by BSCP from time to

time.

 

8.             Representations

and Warranties.

 

(a)           Client

represents and warrants to BSCP that, to the best of its knowledge, (i) it has

the requisite intellectual property rights to each Product and the methods

required to produce it in accordance with the Production Record, and ii) the

production by BSCP of each Product, employing the materials, the production

equipment and in accordance with the procedures set forth in the Production

Record and the Operating Documents, will not give rise to a potential cause of

action by a third party against BSCP for infringement or another violation of

intellectual property rights.  Such

representation and warranty shall not apply to the production equipment

supplied by BSCP.

 

(b)           BSCP

represents and warrants to Client that, to the best of its knowledge, (i) it

has the requisite intellectual property rights in its equipment and facility to

be able to perform its obligations hereunder, (ii) that BSCP’s use of its

equipment and facility as contemplated in this Agreement will not give rise to

a potential cause of action by a third party against Client for infringement or

another violation of intellectual property rights and (iii) that Product

delivered to Client pursuant to this Agreement shall be produced in accordance

with the Production Record and shall be in compliance with all applicable cGMP

guidelines.

 

9.             Miscellaneous.

 

(a)           No

Agency.  Neither party hereto is

authorized, nor shall undertake, to bind the other party in any way as agent,

partner, joint venturer or otherwise, whether in the name of BSCP or Client or

otherwise.  Neither party hereto shall

refer to, display or use the other’s name, corporate style, trademarks or trade

names confusingly similar thereto, alone or in conjunction with any other words

or names, in any manner or connection whatsoever, including any publication,

article, or any form of advertising or publicity, except with the prior written

consent provided by the other party. 

BSCP is an independent contractor of Client, and neither BSCP nor any

person or entity employed, contracted, or otherwise utilized by BSCP for any

purposes shall be deemed to be an employee, representative or agent of Client.

 

(b)           Force

Majeure.  In the event of a delay

caused by inclement weather, fire, flood, strike or other labor dispute, acts

of God, acts of governmental officials or agencies, or any other cause beyond

the control of BSCP, BSCP shall be excused from performance hereunder for the

period or periods of time attributable to such delay.  There shall be no increase in compensation as a result of any

event of delay under this Paragraph 9(b) or otherwise.

 

13

 

(c)           Eminent

Domain.  If the Facility is taken as

a result of the exercise of the power of eminent domain or shall be conveyed to

a governmental agency having power of eminent domain under the threat of the

exercise of such power (any of the foregoing being called “Eminent Domain”),

then this Agreement shall terminate as of the date on which title to the

Facility vests in the authority so exercising or threatening to exercise such

power and Client shall not have any right to the Eminent Domain proceeds.

 

(d)           Notices.  All notices, consents, waivers, and other

communications under this Agreement must be in writing and will be deemed to

have been given when (i) delivered by hand (with written confirmation of

receipt), (ii) sent by fax (with written confirmation of receipt), provided

that a copy is mailed by U.S. registered mail, return receipt requested, (iii)

when received by the addressee, if sent by a nationally recognized overnight

delivery service (receipt requested), in each case to the appropriate address

and fax numbers set forth below (or to such other addresses and fax numbers as

a party may designate by notice to the other party):

 

If to BSCP, to:

 

Bio Science Contract Production Corp.  

5901 East Lombard Street

Baltimore, Maryland 21224 

Fax (410) 563-9206 

Attention: 

Jacques R.  Rubin, Chairman &

CEO

and

If to Client, to:

 

Transkaryotic Therapies Inc.  

195 Albany Street

Cambridge, MA 02139

Tel (617) 349 0200 

Fax (617) 491-7903 

Attention: 

President and CEO

 

with a copy to

 

Hale and Dorr LLP 

60 State Street 

Boston, MA 02109 

Tel (617) 526 6000 

Fax (617) 526 5000 

Attention: Steven D. 

Singer

 

Any party hereto may

change his or its address for notice by giving notice thereof in the manner

hereinabove provided.

 

14

 

(e)           Entire

Agreement.  This Agreement,

including the Schedules hereto, constitutes the entire agreement of the parties

hereto with respect to the subject matter hereof and supersedes all prior

agreements and understandings, oral and written, among the parties hereto with

respect to the subject matter hereof. 

The “RECITALS”, “DEFINITIONS”, and Schedules hereto are incorporated

herein by reference.

 

(f)            Governing

Law.  This Agreement shall be

governed by and construed in accordance with the internal laws of the State of

Maryland, without giving effect to its conflicts of laws provisions.  Except as provided in Paragraph 5(f) and (g)

hereof, all suits, disputes, actions, and other legal proceedings

(collectively, “Suits”) related to

or arising out of this Agreement, shall be brought in the Federal District

Court of the District of Maryland, which shall have the exclusive jurisdiction

over such Suits, and to the personal jurisdiction of which BSCP and Client

irrevocably submit.  Process in any Suit

may be served on any party anywhere in the world.

 

(g)           Counterparts.  This Agreement and any Schedule hereto may

be executed in counterparts, each of which shall be deemed an original, but all

of which together shall constitute one and the same instrument.

 

(h)           Amendments.  This Agreement (including any Schedule

hereto) may not be amended or modified, and no provisions hereof may be waived,

without the prior written consent of the parties hereto.

 

(i)            Severability.  Each provision of this Agreement (and each

Schedule hereto) shall be treated as a separate and independent clause, and the

unenforceability of any one clause shall in no way impair the enforceability of

any of the other clauses herein.                If

one or more of the provisions contained in this Agreement (or any Schedule

hereto) shall for any reason be held to be excessively broad as to scope,

activity, subject or otherwise so as to be unenforceable at law, such provision

or provisions shall be construed by the appropriate judicial body by limiting

or reducing it or them so as to be enforceable to the maximum extent compatible

with the applicable law as it shall then appear.

 

(j)            Titles

and Subtitles.  The titles and

subtitles used in this Agreement (including any Schedule hereto) are for

convenience only and are not to be considered in construing or interpreting any

term or provision of this Agreement (or any Schedule hereto).

 

(k)           Pronouns.  Where the context requires, (i) all pronouns

used herein shall be deemed to refer to the masculine, feminine or neuter

gender as the context requires, and (ii) the singular context shall include the

plural and vice versa.

 

(l)            Assignment.  BSCP shall not assign this Agreement (or any

Schedule hereto) without the prior written consent of Client, except that BSCP

shall be permitted to assign its rights and obligations hereunder without such

consent to (i) one or more of its affiliates or (ii) the purchasers of all or

substantially all of its assets, through merger, consolidation or

otherwise.  Client may assign this

Agreement upon: (x) providing prior written notice to BSCP; and (y) causing the

assignee to acknowledge that it will be bound by the terms and conditions of

this

 

15

 

Agreement; and (z) agreeing that Client itself will continue to be

bound by all the terms of this Agreement even in the event of such an

assignment.

 

(m)          No

Lease.  BSCP and Client agree that

this Agreement (including any Schedule hereto) is not a lease and the

relationship between them is not that of landlord and tenant and that BSCP

retains all rights of control and possession of the Facility, including each

applicable Production Area.

 

(n)           No

Waiver.  The failure of any party

hereto at any time or times to require performance of any provision of this

Agreement (including any Schedule hereto) shall in no manner affect its rights

at a later, time to enforce the same. 

No waiver by any party hereto of the breach of any term contained in

this Agreement (including any Schedule hereto), whether by conduct or otherwise,

in any one or more instances, shall be deemed to be or construed as a further

or continuing waiver of any such breach or the breach of any other term of this

Agreement (including any Schedule hereto).

 

(o)           Waiver

of Jury Trial.  BSCP and Client

hereby waive trial by jury in any suit brought by either of the parties hereto

against the other or on any counterclaim in respect thereof on any matters,

whatsoever, arising out of, or in any way in connection with, this Agreement

(including any Schedule hereto).

 

(p)           No

Presumption Against Drafter.  For

purposes of this Agreement, Client hereby waives any rule of construction that

requires that ambiguities in this Agreement (including any Schedule hereto) be

construed against the drafter.

 

(q)           Expenses.  Except as otherwise provided in this

Agreement, each party to this Agreement will bear its respective expenses

incurred in connection with the preparation, execution, and performance of this

Agreement (including any Schedule hereto).

 

(r)            Disclosure

of Client, Product and Agreement. 

Except as Client may be required by law or regulation, neither party

shall disclose the name of the other party, the identity of the Product or any

information with respect thereto, the existence of this Agreement or the terms

and provisions of this Agreement without the prior written approval of the

other party.  Neither party shall use

the name of the other party in any publicity or advertising without the other

party’s prior written consent.

 

If BSCP is required in accordance with SEC or other

relevant governmental regulations to disclose Client’s name, the identity of

the Product or any information with respect thereto, the existence of this

Agreement or the terms and provisions of this Agreement, BSCP shall: (I) give

Client prior written notice of such disclosure; and (ii) assist Client in any

efforts to prevent or limit such disclosure (including without limitation

seeking confidential treatment of such information).

 

16

 

(s)           Access

to Facility.  Upon execution of a

confidentiality agreement acceptable to BSCP and substantially the same as that

signed by Client, BSCP shall permit Client’s marketing partners access during

business hours to those areas of BSCP’s facility where Product is manufactured,

stored and handled and to manufacturing records of Product produced by BSCP so

that Client’s marketing partners may perform a quality assurance audit of such

facilities and activities.

 

 

{signatures appear

on following page}

 

17

 

IN WITNESS WHEREOF, the parties have executed this

Agreement as of the day and year first above written.

 

 

	

  WITNESS:  

  	

   

  	

  TRANSKARYOTIC THERAPIES

  INC  

  
	

   

  	

   

  	

   

  
	

  By:

  	

  /s/ Kelly A. Gladle

  	

   

  	

   

  	

  By:

  	

  /s/ Richard F.

  Selden                        (SEAL)

  	

   

  
	

   

  	

   

  	

   

  	

  Richard F. Selden

  
	

   

  	

   

  	

   

  	

  President and Chief

  Executive Officer

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  WITNESS:

  	

   

  	

  BIO SCIENCE CONTRACT

  PRODUCTION CORP.

  
	

   

  	

   

  	

   

  
	

  By:

  	

  /s/ Debra G. Sydnor

  	

   

  	

   

  	

  By:

  	

  /s/ Jacques R.

  Rubin                        (SEAL)

  	

   

  
	

   

  	

   

  	

   

  	

  Jacques R. Rubin

  
	

   

  	

   

  	

   

  	

  Chief Executive Officer

  

 

18

 

SCHEDULE A-( 1 )

TO PRODUCTION

AGREEMENT

 

PRODUCT

DESCRIPTION

 

α-Galactosidase

A

 

α-Galactosidase A is

an acid hydrolase which specifically cleaves terminal α-linked galactose

residues from the glycosphingolipid trihexoside (CTH).  The enzyme is a glycoprotein which consists

of a homodimer of two identical approximately 50,000 molecular weight subunits.

 

α-Galactosidase A is

post-translationally modified by the cleavage of a signal sequences of 31

residues and by glycosylation. 

α-Galactosidase A consists of approximately 398 amino acids.

 

The following are the

proposed specifications for purified bulk α-Galactosidase A.  These specifications will be reviewed when

sufficient information is available from the pilot and/or GMP manufacturing

runs performed at Bio Science Contract Production Corp.  Until that time these specifications are for

informational purposes only.

 

	

   

  	

   

  	

  Proposed Specification

  
	

  [**]

  	

   

  	

  [**]

  

 

******************************************

 

 

The content of this Schedule A-(1) is agreed to by the

parties listed below to that certain Master Production Agreement dated as of

12/1, 1998.

 

 

	

  TRANSKARYOTIC THERAPIES

  INC.

  	

  BIO SCIENCE CONTRACT

  PRODUCTION CORP.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  By:

  	

  /s/Richard Seldon

  	

  (SEAL)

  	

  By:

  	

  /s/Louise

  Campbell-Blair

  	

  (SEAL)

  
	

   

  	

  Name: Richard Selden

  	

   

  	

  Name:  Louise Campbell-Blair

  
	

   

  	

  Title: President &

  CEO

  	

   

  	

  Title:  VP Business Development

  
	

   

  	

   

  	

   

  
	

  Date:  12/1, 1998

  
						

 

 

SCHEDULE B-( 1a)

TO

PRODUCTION

AGREEMENT

 

PRODUCTION TERM,

SUITE AND FEES

 

PRODUCTION TERM

 

	

  Commencement Date (the

  “Commencement Date”):

  	

  August 1, 1998

  
	

  Termination Date (the “Termination Date”):

  	

  December 31, 1998

  

 

SUITE

(mark

below with an “X”)

 

	

  SUITE 1

  	

   

  	

   

  	

  SUITE 3

  	

   

  	

   

  
	

  SUITE 2

  	

   

  	

   

  	

  SUITE 4

  	

  X

  	

   

  

 

FEES

 

	

  Production Record Fee:

  	

   

  	

  $

  	

  [**]

  	

   

  
	

  Set-Up Fee per Product

  per Production Term:

  	

   

  	

  $

  	

  [**]

  	

   

  	

   

  

 

	

  [**] Production Fee:

  	

   

  	

  [**]

  	

   

  
	

   

  	

   

  	

  [**]

  	

   

  
	

   

  	

   

  	

  [**]

  	

   

  

 

($[**] paid on August 12th;

$[**])

 

*****************************************

 

The content of this Schedule B-(1a) is agreed to by the

parties listed below to that certain Master Production Agreement dated as of

12/1, 1998.

 

 

	

  TRANSKARYOTIC THERAPIES

  INC.

  	

  BIO SCIENCE CONTRACT

  PRODUCTION CORP.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  By:

  	

  /s/Richard Seldon

  	

  (SEAL)

  	

  By:

  	

  /s/Louise

  Campbell-Blair

  	

  (SEAL)

  
	

   

  	

  Name: Richard Selden

  	

   

  	

  Name:  Louise Campbell-Blair

  
	

   

  	

  Title: President &

  CEO

  	

   

  	

  Title:  VP Business Development

  
	

   

  	

   

  	

   

  
	

  Date:  12/1, 1998

  
						

 

 

SCHEDULE B-(1b)

TO

PRODUCTION AGREEMENT

 

PRODUCTION TERM,

SUITE AND FEES

 

PRODUCTION TERM

 

	

  Commencement Date (the

  “Commencement Date”):

  	

  January 1, 1999

  
	

  Termination Date (the “Termination Date”):

  	

  October 31st

  , 1999

  

 

(The

Production Term may be extended with written approval by both parties)

 

SUITE

(Mark below with an “X”)

 

	

  SUITE 1

  	

   

  	

   

  	

  SUITE 3

  	

   

  	

   

  
	

  SUITE 2

  	

   

  	

   

  	

  SUITE 4

  	

  X

  	

   

  

 

FEES

 

	

  Production Record Fee:

  	

   

  	

  $

  	

  [**]

  	

   

  
	

  Set-Up Fee per Product

  per Production Term:

  	

   

  	

  $

  	

  [**]

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  [**] Production Fee:

  	

   

  	

  $

  	

  [**]

  	

   

  	

   

  

 

 

($[**] payable by January 1st, 1999 then [**] payments of $[**] due [**]

starting March, 1999)

 

*****************************************

 

The content of this Schedule B-(1b) is agreed to by the

parties listed below to that certain Master Production Agreement dated as of

12/1, 1998.

 

 

	

  TRANSKARYOTIC THERAPIES

  INC.

  	

  BIO SCIENCE CONTRACT

  PRODUCTION CORP.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  By:

  	

  /s/Richard Seldon

  	

  (SEAL)

  	

  By:

  	

  /s/Louise

  Campbell-Blair

  	

  (SEAL)

  
	

   

  	

  Name: Richard Selden

  	

   

  	

  Name:  Louise Campbell-Blair

  
	

   

  	

  Title: President &

  CEO

  	

   

  	

  Title:  VP Business Development

  
	

   

  	

   

  	

   

  
	

  Date:  12/1, 1998

  
						

 

 

SCHEDULE C-(1)

TO

PRODUCTION

AGREEMENT

 

CLIENT-PROVIDED

ITEMS

 

	

  [**]

  	

   

  	

  [**]

  

 

Other Client-Provided Items, if any, to be mutually agreed

upon.

 

****************************************

 

The content of this Schedule C-(1) is agreed to by the

parties listed below to that certain Master Production Agreement dated as of

12/1                , 1998.

 

 

	

  TRANSKARYOTIC THERAPIES

  INC.

  	

  BIO SCIENCE CONTRACT

  PRODUCTION CORP.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  By:

  	

  /s/Richard Seldon

  	

  (SEAL)

  	

  By:

  	

  /s/Louise

  Campbell-Blair

  	

  (SEAL)

  
	

   

  	

  Name: Richard Selden

  	

   

  	

  Name:  Louise Campbell-Blair

  
	

   

  	

  Title: President &

  CEO

  	

   

  	

  Title:  VP Business Development

  
	

   

  	

   

  	

   

  
	

  Date:  12/1, 1998

  
						

 

 

SCHEDULE D-(1)

TO

PRODUCTION

AGREEMENT

 

OTHER PRODUCTION

REQUIREMENTS

PERSONNEL:                BSCP MAY PROVIDE ADDITIONAL

PERSONNEL AT THE RATE OF $[**] PER HOUR.

 

HAZARDOUS WASTES AND

SUBSTANCES:

 

	

  Type

  	

   

  	

  Amount

  	

   

  	

  Charge for Disposal

  	

   

  

 

Such rates shall be

subject to change from time to time in accordance with written notice provided

by BSCP to Client.

 

****************************************

 

The content of this Schedule D-(1) is agreed to by the

parties listed below to that certain Master Production Agreement dated as of

12/1, 1998.

 

 

	

  TRANSKARYOTIC THERAPIES

  INC.

  	

  BIO SCIENCE CONTRACT

  PRODUCTION CORP.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  By:

  	

  /s/Richard Seldon

  	

  (SEAL)

  	

  By:

  	

  /s/Louise Campbell-Blair

  	

  (SEAL)

  
	

   

  	

  Name: Richard Selden

  	

   

  	

  Name:  Louise Campbell-Blair

  
	

   

  	

  Title: President &

  CEO

  	

   

  	

  Title:  VP Business Development

  
	

   

  	

   

  	

   

  
	

  Date:  12/1, 1998

  
						

 

 

SCHEDULE E-(1)

TO

PRODUCTION

AGREEMENT

 

[**] STORAGE RATES

AND PROCEDURES

[**] Storage Charge:

 

$[**] per square foot for Room Temperature Storage

 

$[**] per cubic foot for Refrigerated Storage

 

$[**] per cubic foot for Freezer Storage

 

Minimum Storage Charge:

 

$[**] for Room Temperature Storage

 

$[**] for Refrigerated Storage

 

$[**] for Freezer Storage

 

Procedure:

 

Client will not ship any

materials, equipment or supplies to BSCP without the prior written approval of

BSCP.  The storage charges during the

Set-Up period for the Product described in Schedule A-(1) are included in the

[**] production fee shown in Schedule B-(la).

 

***********************************

 

The content of this Schedule E-(1) is agreed to by the

parties listed below to that certain Master Production Agreement dated as of

12/1                , 1998.

 

 

	

  TRANSKARYOTIC THERAPIES

  INC.

  	

  BIO SCIENCE CONTRACT

  PRODUCTION CORP.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  By:

  	

  /s/Richard Seldon

  	

  (SEAL)

  	

  By:

  	

  /s/Louise

  Campbell-Blair

  	

  (SEAL)

  
	

   

  	

  Name: Richard Selden

  	

   

  	

  Name:  Louise Campbell-Blair

  
	

   

  	

  Title: President &

  CEO

  	

   

  	

  Title:  VP Business Development

  
	

   

  	

   

  	

   

  
	

  Date:  12/1, 1998

  
						

 

 

Bio Science Contract Production Corp.

 

AMENDMENT TO

MASTER PRODUCTION AGREEMENT

 

Bio Science was informed

at the November 19, 1998, telephone conference with Transkaryotic Therapies

Inc. (TKT) that it may be necessary [**]. 

Based on TKT’s written approval, Bio Science can process TKT’s GMP

production runs [**], however, Bio Science’s review of the batch record cannot

be completed until all testing associated with the batch is completed and

reported.

 

TKT understands that [**]

Bio Science will label all the batches and the associated batch records that

were processed [**] TKT retains the right [**].

 

TKT further understands

that it will be responsible for payment for any batch rejected under these

circumstances.

 

 

	

  TRANSKARYOTIC THERAPIES

  INC.

  	

  BIO SCIENCE CONTRACT

  PRODUCTION CORP.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  By:

  	

  /s/Richard Seldon

  	

  (SEAL)

  	

  By:

  	

  /s/Louise

  Campbell-Blair

  	

  (SEAL)

  
	

   

  	

  Name: Richard Selden

  	

   

  	

  Name:  Louise Campbell-Blair

  
	

   

  	

   

  	

  Title: President &

  CEO

  	

   

  	

   

  	

  Title:  VP Business Development

  
	

   

  	

   

  	

   

  
	

  01/05/99

  	

   

  	

  1/7/99

  	

   

  
	

  Date

  	

  Date

  
										

 

 

SCHEDULE B-(1b)

REVISED

TO

PRODUCTION

AGREEMENT

 

PRODUCTION TERM,

SUITE AND FEES

 

PRODUCTION TERM

 

 

SCHEDULE B-(1b)

TO

PRODUCTION AGREEMENT

 

PRODUCTION TERM,

SUITE AND FEES

 

PRODUCTION TERM

 

	

  Commencement Date (the

  “Commencement Date”):

  	

  January 1, 1999

  
	

  Termination Date (the “Termination Date”):

  	

  December 25th,

  1999

  

 

(The

Production Term may be extended with written approval by both parties)

 

SUITE

(Mark below with an “X”)

 

	

  SUITE 1

  	

   

  	

   

  	

  SUITE 3

  	

   

  	

   

  
	

  SUITE 2

  	

   

  	

   

  	

  SUITE 4

  	

  X

  	

   

  

 

FEES

 

	

  Production Record Fee:

  	

   

  	

  $

  	

  [**]

  	

   

  
	

  Set-Up Fee per Product

  per Production Term:

  	

   

  	

  $

  	

  [**]

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  [**] Production Fee:

  	

   

  	

  $

  	

  [**]

  	

   

  	

   

  

 

 

($[**] payable by January 1st, 1999 then [**] payments of $[**] due by [**] starting March, 1999)

 

*****************************************

 

The content of this Schedule B-(1b) REVISED is agreed to by

the parties listed below to that certain Master Production Agreement dated as

of 12/1, 1998.

 

 

	

  TRANSKARYOTIC THERAPIES

  INC.

  	

  BIO SCIENCE CONTRACT

  PRODUCTION CORP.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  By:

  	

  /s/Richard Seldon

  	

  (SEAL)

  	

  By:

  	

  /s/Louise

  Campbell-Blair

  	

  (SEAL)

  
	

   

  	

  Name: Richard Selden

  	

   

  	

  Name:  Louise Campbell-Blair

  
	

   

  	

  Title: President &

  CEO

  	

   

  	

  Title:  VP Business Development

  
	

   

  	

   

  	

   

  
	

  Date:  2/25, 1999

  
						

 

 

Agreement for BLA Preparation

 

Transkaryotic Therapies

Inc (“TKT”) agrees that Bio Science Contract Production Corp. (“Bio Science”)

will have review and approval of those aspects of TKT’s BLA submission that

describe or refer to Bio Science’s facility or operation.  Further, a copy of the final version of

these sections as submitted to the FDA will be provided to Bio Science.

 

For Transkaryotic

Therapies Inc.

 

 

	

  AME:

  	

  /s/Kurt C. Gunter, M.D.

  	

   

  
	

  TITLE:

  	

  VP, Clin & RegAffairs

  	

   

  
	

  DATE:

  	

  20 Apr 99

  	

   

  

 

 

SCHEDULE A-(2)

TO

PRODUCTION

AGREEMENT

 

PRODUCT

DESCRIPTION

 

a-Galactosidase

A

a-Galactosidase

A is an acid hydrolase which specifically cleaves terminal a-linked galactose residues from the

glycosphingolipid trihexoside (CTH). 

The enzyme is a glycoprotein which consists of a homodimer of two

identical approximately 50,000 molecular weight subunits.

 

a-Galactosidase

A is post-translationally modified by the cleavage of a signal sequences of 31

residues and by glycosylation.  a-Galactosidase A consists of

approximately 398 amino acids.

 

The following are the

proposed specifications for purified bulk a-Galactosidase

A.  These specifications will be

reviewed when sufficient information is available from the pilot and/or GMP

manufacturing runs performed at Bio Science Contract Production Corp.  Until that time these specifications are for

informational purposes only.

 

	

   

  	

   

  	

  Proposed Specification

  	

   

  
	

  [**]

  	

   

  	

  [**]

  	

   

  

 

******************************

 

 

The content of this Schedule A-(2) is agreed to by the

parties listed below to that certain Master Production Agreement dated as of

December 1, 1998.

 

 

	

  TRANSKARYOTIC THERAPIES

  INC.

  	

  BIO SCIENCE CONTRACT

  PRODUCTION CORP.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  By:

  	

  /s/Richard Seldon

  	

  (SEAL)

  	

  By:

  	

  /s/Louise

  Campbell-Blair

  	

  (SEAL)

  
	

   

  	

  Name: Richard Selden

  	

   

  	

  Name:  Louise Campbell-Blair

  
	

   

  	

  Title: President &

  CEO

  	

   

  	

  Title:  VP Business Development

  
	

   

  	

   

  	

   

  
	

  Date:  12.10, 1999

  
						

 

 

SCHEDULE B-(2)

TO

PRODUCTION

AGREEMENT

 

PRODUCTION TERM,

SUITE AND FEES

 

PRODUCTION TERM

 

	

  Commencement Date (the

  “Commencement Date”):

  	

  January 1, 2000

  
	

  Termination Date (the “Termination Date”):

  	

  December 31, 2000

  

 

FEES

1.               [**] Production Fee: $[**]

 

2.               Payment

Terms:

 

(a)                                  $[**] has been paid on November 15,

1999; then $[**] each [**] in advance starting with January

2000.  Advance payments due by the [**].

 

(b)                                 To

recover the $[**] owed by BSCP

to TKT, the [**] payments will

be reduced by $[**] for January

2000 through and including July 2000 and by $[**].

 

(c)                                  Upon

termination or expiration of this agreement BSCP shall pay to TKT within [**] after such termination the

balance of any reductions, prepayments, production delay damages, and advances

which have not been recovered through reductions in the [**] Production Fees.  Late

payments will accrue interest from the date when the same became due at the

rate of 12% per annum.  The deposit will

be refunded [**] after a final

reconciliation is completed.

 

3.               Renewal

Periods:

 

This production term may

be renewed for an additional term of no more than [**] on the same terms and conditions contained herein.  Client must provide notice of renewal

including the length of such extension no later than.  September 1st 2000.

 

12/07/99

 

 

4.               Milestones

& Penalties:

 

(a)                                  Culture

Initiation - The production campaign shall be initiated on or before January 17th,

2000.  There shall be no more than a [**] lag between the initiation of

subsequent campaigns ([**]).  If there is a delay in Cell Culture, not

caused by either the Client or the contract testing labs (as defined below),

the following penalties will apply;

 

1.             It is the responsibility of BSCP to

[**] testing at the contract

testing labs.

 

2.                                       If

BSCP encounters a problem with obtaining results from a contract testing lab,

they will notify Client in a timely manner, whereupon Client will assist BSCP

in gaining resolution to the issue.

 

3.                                       As

long as BSCP is working in good faith with Client and testing laboratory to

resolve issues so that they will not impact Culture Initiation dates, the

applicable penalties will not apply.

 

	

  Duration of Delay

  	

   

  	

  Penalty

  	

   

  
	

  Up to [**]

  	

   

  	

  $

  	

  [**]

  	

   

  
	

  Between [**]

  	

   

  	

  $

  	

  [**]

  	

   

  
	

  Up to [**]

  	

   

  	

  $

  	

  [**]

  	

   

  
	

  Up to [**]

  	

   

  	

  $

  	

  [**]

  	

   

  

 

(b)                                 Release

of batch records Parts A & B - The Part A and Part B batch records for all

lots produced in a campaign (Slots/campaign x 2 batch records/lot = 10 batch

records/campaign) shall be signed off by BSCP and released to Client no later

than one week after the receipt and acceptance (by both Client and BSCP) of the

final QC data and associated QC documentation (e.g.  deviations, ICARS) required to complete the batch records.

 

	

  Duration of Delay

  	

   

  	

  Penalty

  	

   

  
	

  [**] days – [**] days

  	

   

  	

  $

  	

  [**]

  	

   

  
	

  [**] days – [**] days

  	

   

  	

  $

  	

  [**]

  	

   

  
	

  [**] days – [**] days

  	

   

  	

  $

  	

  [**]

  	

   

  
	

  Thereafter

  	

   

  	

  Additional $[**] for each [**] day delay

  	

   

  

 

 

 

(c)                                  Release

of batch records Part C - The Part C batch records for each lot shall be signed

off by BSCP and released to Client no later than [**] after the receipt and acceptance (by both Client and BSCP) of

the final QC data and associated QC documentation (e.g. deviations, ICARS)

required to complete the batch records.

 

	

  Duration of Delay

  	

   

  	

  Penalty

  	

   

  
	

  [**] days – [**] days

  	

   

  	

  $

  	

  [**]

  	

   

  
	

  [**] days – [**] days

  	

   

  	

  $

  	

  [**]

  	

   

  
	

  [**] days – [**] days

  	

   

  	

  $

  	

  [**]

  	

   

  
	

  Thereafter

  	

   

  	

  Additional $[**] for each [**] day delay

  	

   

  

 

REGULATORY INSPECTIONS

 

Concerning FDA or any

other Regulatory Authority Inspection or teleconferences;

 

a)                                      Client

will not be permitted to participate directly in general GMP inspections or

non-          Client related inspections

or teleconferences.

b)                                     One QA

Representative from Client will be permitted to participate as part of the

inspection team or participate in teleconferences (Client must beat BSCP’s

facility to participate in teleconferences) related to or as part of,

Pre-Approval inspection requirements for its products that are manufactured at

BSCP facilities.

c)                                      In

the case of responses to inspections pertaining to part b) above, Client will

be allowed one business day to review responses to questions related to its

product, prior to submission by BSCP. 

The wording and submission of the final response is the responsibility

of BSCP.

 

***********************************

 

The content of this Schedule B-(2) is agreed to by the

parties listed below to that certain Master Production Agreement dated as of

December 1, 1998.

 

 

	

  TRANSKARYOTIC THERAPIES

  INC.

  	

  BIO SCIENCE CONTRACT

  PRODUCTION CORP.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  By:

  	

  /s/Daniel Geffken

  	

  (SEAL)

  	

  By:

  	

  /s/Jacques Rubin

  	

  (SEAL)

  
	

   

  	

  Name: Daniel Geffken

  	

   

  	

  Name:  Jacques Rubin

  
	

   

  	

  Title: 

  	

   

  	

  Title:  CEO & Chairman

  
	

   

  	

   

  	

   

  
	

  Date:  12.10, 1999

  
						

 

 

 

SCHEDULE C0-(2)

TO

PRODUCTION

AGREEMENT

 

CLIENT-PROVIDED

ITEMS

 

	

  [**]

  	

   

  	

  [**]

  	

   

  

 

Other Client-Provided Items, if any, to be mutually agreed

upon.

 

****************************************

 

The content of this Schedule C-(2) is agreed to by the

parties listed below to that certain Master Production Agreement dated as of

December 1, 1998

 

 

	

  TRANSKARYOTIC THERAPIES

  INC.

  	

  BIO SCIENCE CONTRACT

  PRODUCTION CORP.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  By:

  	

  /s/Daniel Geffken

  	

  (SEAL)

  	

  By:

  	

  /s/Jacques Rubin

  	

  (SEAL)

  
	

   

  	

  Name: Daniel Geffken

  	

   

  	

  Name:  Jacques Rubin

  
	

   

  	

  Title: 

  	

   

  	

  Title:  CEO & Chairman

  
	

   

  	

   

  	

   

  
	

  Date:  12.10, 1999

  
						

 

 

SCHEDULE D-(2)

TO

PRODUCTION

AGREEMENT

 

OTHER PRODUCTION

REQUIREMENTS

 

PERSONNEL:                                          [**] staff (including one QA person)

are provided in the [**]

Production Fee.  This is equivalent to [**] hours.  BSCP may provide additional personnel hours at the rate of $[**] per hour.  A budget for labor hours will be submitted

prior to December 15th, 1999. 

Any variance greater than [**]%

of budget will be accompanied by a written explanation to Client.  [**]

chargeable to the Client.

 

HAZARDOUS WASTES AND

SUBSTANCES:

 

	

  Type

  	

   

  	

  Amount

  	

   

  	

  Charge for Disposal

  	

   

  

 

Such rates shall be

subject to change from time to time in accordance with written notice provided

by BSCP to Client.

 

***********************************

 

The content of this Schedule D-(2) is agreed to by the

parties listed below to that certain Master Production Agreement dated as of

December 1, 1998.

 

 

 

	

  By:

  	

  /s/Daniel Geffken

  	

  (SEAL)

  	

  By:

  	

  /s/Jacques Rubin

  	

  (SEAL)

  
	

   

  	

  Name: Daniel Geffken

  	

   

  	

  Name:  Jacques Rubin

  
	

   

  	

  Title: 

  	

   

  	

  Title:  CEO & Chairman

  
	

   

  	

   

  	

   

  
	

  Date:  12.10, 1999

  

 

 

SCHEDULE E-(2)

TO

PRODUCTION

AGREEMENT

 

[**]

STORAGE RATES AND PROCEDURES

 

[**]

Storage Charge:

 

$[**]

per square foot for Room Temperature Storage

$[**] per cubic foot for

Refrigerated Storage

$[**] per cubic foot for Freezer

Storage

 

Minimum Monthly Storage

Charge:

 

$[**]

for Room Temperature Storage

$[**] for Refrigerated Storage

$[**] for Freezer Storage

 

Procedure:

 

Client will hot ship any

materials, equipment or supplies to BSCP without the prior written approval of

BSCP.

 

*********************************

 

	

  Schedule

  E-(2)

  	

   

  	

  The content of this is agreed to by the parties

  listed below to that certain Master Production Agreement dated as of December

  l, 1998.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

  /s/Daniel 

  Geffken

  	

  (SEAL)

  
	

   

  	

   

  	

   

  	

  By:/s/Jacques Rubin

  	

  (SEAL)

  
	

   

  	

   

  	

   

  	

  Name: Daniel Geffken

  
	

   

  	

   

  	

   

  	

  Name: Jacques Rubin

  
	

   

  	

   

  	

   

  	

  Title:

  	

  Title:

  
	

   

  	

   

  	

  CEO & Chairman

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  Date:  12.10,

  1999

  
								

 

 

SCHEDULE B-(2)-(AMENDED)

TO

PRODUCTION AGREEMENT

 

PRODUCTION TERM, SUITE AND FEES

 

Client has decided

to exercise its renewal option under Schedule B-(2), signed by both parties on

December 10, 1999.  Client has decided

to renew the production term for four (4) years on the same terms and conditions

stated in the Master Production Agreement, dated December 1, 1998 and the

appended Schedules signed on December 10, 1999.

 

This means that

the Production Term Termination Date shall now be extended to December 31,

2004.

 

The Monthly

Production Fee of $[**] shall

remain unchanged for the length of the renewal period.

 

The hourly labor

rate of $[**] stated in Schedule

D-(2) (signed on December 10,1999) shall be subject to a [**]% percent increase on  January 1st of each year,

beginning January 1st, 2001.

 

**********************************************

 

The content of

this Schedule

B-(2)-(AMENDED) is agreed to by the parties listed below to that

certain Master Production Agreement dated as of December 1, 1998.

 

TRANSKARYOTIC

THERAPIES, INC.           BIO SCIENCE

CONTRACT

            PRODUCTION CORP.

 

 

	

  TRANSKARYOTIC THERAPIES

  INC.

  	

  BIO SCIENCE CONTRACT

  PRODUCTION CORP.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  By:

  	

  /s/ Daniel Geffken

  	

   

  	

  By:

  	

  /s/ Jacques R. Rubin

  	

   

  
	

   

  	

  Name: Daniel Geffken

  	

   

  	

  Name: Jacques R. Rubin

  
	

   

  	

  Title: VP, CFO

  	

   

  	

  Title: CEO

  
	

   

  	

   

  	

   

  
	

   

  	

  Date: 

  	

  September 21, 2002Exhibit 10.8

 

AMENDMENT NO. 10 TO

LOAN AND SECURITY

AGREEMENT

 

THIS AMENDMENT NO. 10

TO LOAN AND SECURITY AGREEMENT (this “Amendment”),

is entered into on and as of this 14th day of August, 2002, by and between

SUNROCK CAPITAL CORP., a Delaware corporation (“Lender”), and DSI TOYS,

INC., a Texas corporation (“Borrower”).

 

RECITALS

 

A.            Borrower and Lender have entered

into that certain Loan and Security Agreement, dated as of February 2, 1999 (as

the same has been, and may hereafter be, amended, modified, supplemented or

restated from time to time, the “Loan Agreement”).

 

B.            Borrower desires to guaranty a

portion of the obligations owing by DSI (HK) Limited to Standard Chartered Bank

pursuant to one or more limited guaranties with substantially the terms set forth

in that certain Limited Guarantee attached hereto as Exhibit A (the “Limited

Guarantee”).

 

C.            Lender has agreed to consent to the

execution and delivery of the Limited Guarantee, subject to the terms set forth

herein.

 

NOW, THEREFORE,

in consideration of the premises herein contained herein and other good and

valuable consideration, the receipt and sufficiency of which are hereby

acknowledged, the parties, intending to be legally bound, agree as follows:

 

ARTICLE I

Definitions

 

1.01        Capitalized terms used in this

Amendment, to the extent not otherwise defined herein, shall have the same

meanings as in the Loan Agreement, as amended hereby.

 

ARTICLE II

Amendments

 

2.01        Amendment to Events of Default.  Effective as of the date hereof, Sections

10.1(n) and 10.1(o) of the Loan Agreement are hereby amended and

restated in their entirety to read as follows:

 

“(n)         DSI (HK) Limited

shall fail to maintain its existing credit facilities with Dao Heng Bank

Limited or Standard Chartered Bank, in each case upon such terms and conditions

as Lender may find adequate to provide financing for the continued operations

of DSI (HK) Limited without further support from Borrower;

 

(o)           Any claim or demand

for payment or performance shall be made on, or asserted against, Borrower in

respect of any guarantee or other agreement executed

 

1

 

by Borrower in

connection with any credit facility maintained by DSI (HK) Limited, including,

but not limited to, any claim under Borrower’s partial guaranty of any

indebtedness incurred, or to be incurred, by DSI (HK) Limited and owing to

either Dao Heng Bank Limited or Standard Chartered Bank; or”

 

2.02        Additional Event of Default.  Effective as of the date hereof, a new Section

10.1(p) is hereby added to the Loan Agreement:

 

“(p)         Borrower shall make

any payment to the holders of the subordinated indebtedness permitted pursuant

to Sections 9.9(b) or 9.9(c) of this Agreement at a time when

such payments are not permitted under the subordination agreements entered into

between Lender and the holders of such subordinated indebtedness and

acknowledged by Borrower.”

 

ARTICLE

III

Ratifications,

Representations and Warranties, Covenants and Consent

 

3.01        Ratifications.

Except as expressly amended hereby, the terms and provisions of the Loan

Agreement are ratified and confirmed and shall continue in full force and

effect.  Borrower and Lender agree that

the Loan Agreement, as amended hereby, and each agreement and instrument

executed in connection herewith, are, and shall continue to be, legal, valid,

binding and enforceable in accordance with their respective terms.

 

3.02        Representations and Warranties.  Borrower

hereby represents and warrants to Lender that (a) the execution, delivery and

performance of this Amendment has been authorized by all requisite corporate

action on the part of Borrower and does not violate the Articles of

Incorporation or Bylaws of Borrower; (b) the representations and warranties

contained in the Loan Agreement, are true and correct on and as of the date

hereof; (c) as of the date hereof no Event of Default under the Loan Agreement

is continuing and no event or condition exists that with the giving of notice

or the lapse of time, or both, would be an Event of Default; and (d) Borrower

is in full compliance with all covenants and agreements contained in the Loan

Agreement and each agreement and instrument entered into in connection

therewith.

 

3.03        Covenant to Pay Legal and Other Expenses.  As provided in the Loan Agreement, Borrower agrees to pay on

demand all costs and expenses incurred by Lender in connection with the

preparation, negotiation and execution of this Amendment, including, without

limitation, the costs and fees of Lender’s legal counsel, and all costs and

expenses incurred by Lender in connection with the enforcement or preservation

of any rights under the Loan Agreement, as amended hereby, or any agreement,

document or instrument executed in connection therewith.  The fee, costs and expenses referred to in

this Section 3.03 may be charged by Lender to Borrower’s loan account at

the option of Lender.

 

3.04        Consent to Execution of the Limited

Guarantee. 

Lender hereby consents to Borrower’s (a) execution of the Limited

Guarantee upon the terms set forth on Exhibit A hereto and (b)

incurrence of the contingent obligations evidenced thereby; provided,

however, the consent herein provided shall not extend to any future

increase in the aggregate amount of such

 

2

 

obligations thereby guaranteed,

which at all times shall be limited to less than HKD 19,000,000 in the

aggregate, plus interest in respect thereof and costs of collection under the

Limited Guarantee.  Any increase in the

amount guaranteed shall be constitute an Event of Default under the Loan

Agreement without notice or opportunity to cure.

 

ARTICLE IV

Miscellaneous

Provisions

 

4.01        Survival of Representations and Warranties.  All representations and warranties made herein and in the Loan

Agreement shall survive the execution and delivery of this Amendment, and no

investigation by Lender shall affect the representations and warranties or the

right of Lender to rely upon them.

 

4.02        Reference to Loan Agreement.  The Loan

Agreement, as amended hereby, and all other agreements, documents or

instruments now or hereafter executed and delivered pursuant to the terms

thereof are hereby amended so that any reference in the Loan Agreement or such

other agreements, documents and instruments shall mean a reference to the Loan

Agreement, as amended hereby.

 

4.03        Severability.  Any provision of this Amendment held by a

court of competent jurisdiction to be invalid or unenforceable shall not impair

or invalidate the remainder of this Amendment and the effect thereof shall be

confined to the provision so held to be invalid or unenforceable.

 

4.04        Successors and Assigns.  This

Amendment is binding upon and shall inure to the benefit of Lender and Borrower

and their respective successors and assigns, except Borrower may not assign or

transfer any of its rights or obligations hereunder without the prior written

consent of Lender.

 

4.05        Counterparts.  This Amendment may be executed in one or

more counterparts, each of which when so executed shall be deemed to be an

original, but all of which when taken together shall constitute one and the

same instrument.

 

4.06        Headings.  The headings, captions, and arrangements

used in this Amendment are for convenience only and shall not affect the

interpretation of this Amendment.

 

4.07        Applicable Law.  

THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED PURSUANT HERETO

SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN AND SHALL BE

GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

 

4.08        Final Agreement.   THE FINANCING AGREEMENTS (INCLUDING THE

LOAN AGREEMENT AND THIS AMENDMENT), AS AMENDED HEREBY, REPRESENT THE ENTIRE

EXPRESSION OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE

THIS AMENDMENT IS EXECUTED.  THE

FINANCING AGREEMENTS, AS AMENDED HEREBY, MAY NOT

 

3

 

BE CONTRADICTED BY EVIDENCE OF PRIOR,

CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS

BETWEEN THE PARTIES.  NO MODIFICATION,

RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY PROVISION OF THIS AMENDMENT

SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY BORROWER AND LENDER.

 

4.09        Release.  BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE,

COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE

WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS

LIABILITY TO REPAY THE OBLIGATIONS (AS DEFINED IN THE LOAN AGREEMENT) OR TO

SEEK AFFIRMATIVE RELIEF OR DAMAGES OF ANY KIND OR NATURE FROM LENDER.  BORROWER HEREBY VOLUNTARILY AND KNOWINGLY

RELEASES AND FOREVER DISCHARGES LENDER, ITS PREDECESSORS, AGENTS, EMPLOYEES,

SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF

ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN,

ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR

CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE

THE DATE THIS AMENDMENT IS EXECUTED, WHICH THE BORROWER MAY NOW OR HEREAFTER

HAVE AGAINST LENDER, ITS PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND

ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF

CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM

ANY LOANS (AS DEFINED IN THE LOAN AGREEMENT), INCLUDING, WITHOUT LIMITATION,

ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING, COLLECTING OR RECEIVING

INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY

RIGHTS AND REMEDIES UNDER THE LOAN AGREEMENT OR ANY FINANCING AGREEMENT,

DOCUMENT OR INSTRUMENT ENTERED INTO IN CONNECTION THEREWITH.

 

4

 

Executed as of the day and year set forth first above.

 

	

   

  	

  DSI TOYS, INC.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  	

  Robert L.

  Weisgarber

  	

   

  
	

   

  	

  Name:

  	

   

  	

  Robert L.

  Weisgarber

  	

   

  
	

   

  	

  Title:

  	

   

  	

  CFO

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  SUNROCK CAPITAL CORP.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  /s/

  	

  Y. Renee

  Hannah

  	

   

  
	

   

  	

  Name:

  	

   

  	

  Y. Renee

  Hannah

  	

   

  
	

   

  	

  Title:

  	

   

  	

  Account

  Executive

  	

   

  

 

5

 

Exhibit A

 

(See Attached Limited

Guarantee)

 

6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00045-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00045-of-00352.parquet"}]]