Document:

aldr-ex1045_493.htm

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

EXhibit 10.45

	
QUALITY AGREEMENT 
ON MANUFACTURING AND TESTING 
OF BULK DRUG SUBSTANCE

	
Between

	
Alder BioPharmaceuticals, Inc.

	
11804 North Creek Parkway South, Bothell, WA 98011 U.S.A.

	
as CONTRACT GIVER, subsequently named Alder

	
And

	
SANDOZ GmbH

	
Biochemiestrasse 10, A-6250 Kundl

	
as contract CONTRACTOR, subsequently named SANDOZ

	
 

	
 

	
 

	
 

 

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TABLE OF CONTENTS

PREAMBLE/PURPOSE5

1.SCOPE of the QUALITY AGREEMENT5

2.General Provisions (Quality assurance)6

	
 
	
2.1. Directives and Guidelines
	
6

	
 
	
2.2. Regulatory Activities
	
7

	
 
	
2.3. Validation
	
7

	
 
	
2.4. Manufacturing, packaging and testing instructions and Specifications
	
8

	
 
	
2.5. Alder Audits
	
8

	
 
	
2.6. Regulatory Inspections
	
10

	
 
	
2.7. Person in Plant (Long Term)
	
11

	
 
	
2.8. Product Quality Review
	
12

	
 
	
2.9. Subcontracting
	
12

	
 
	
2.10. Facility, Equipment, and Computer Systems Qualification and Validation
	
13

	
 
	
2.11. Change Management and Approval
	
14

	
 
	
2.12. Changes to Processes and Premises
	
14

	
 
	
2.13. SANDOZ Document Notification, Review, and Approval
	
16

	
 
	
2.14. Influence on Quality by Foreign Materials
	
16

	
 
	
2.15. BSE/TSE-Assessment
	
16

	
 
	
2.16. Deviations, Corrective and Preventative Actions, and Quality Events
	
17

	
 
	
2.17. Non-conforming BDS
	
19

	
 
	
2.18. Recall/Supply Recovery
	
19

	
 
	
2.19 Biological Product Deviation Report (BPDR)
	
19

3.Raw MaterialS20

	
 
	
3.1. Cell Banks
	
20

	
 
	
3.2. Supply of Raw Materials by Alder
	
21

	
 
	
3.3. Procurement of Raw Materials by SANDOZ
	
21

	
 
	
3.4. Sampling
	
22

	
 
	
3.5. Storage
	
22

4.Manufacturing of Product IN THE cONTRACT mANUFACTURING pHASE22

	
 
	
4.1. Cell Banks
	
22

	
 
	
4.2. MPD Document; Batch Manufacturing and Packaging Records
	
22

	
 
	
4.3. Reprocessing and Rework
	
24

	
 
	
4.4. Review of Batch Documentation
	
24

	
 
	
4.5. Warehousing
	
25

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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4.6. Packaging for Dispatch and Transport
	
25

	
 
	
5.
	
Testing of Products26

	
 
	
5.1. Method Transfer, Qualification, and Validation
	
26

	
 
	
5.2. Sampling
	
27

	
 
	
5.3. Testing of Products
	
27

	
 
	
5.4. Out of Specification Results
	
28

	
 
	
5.5. Microbiological Control Program
	
29

6.ARCHIVING OF Samples and Documentation29

7.Release of Products30

	
 
	
7.1. Release for shipment – pre-requisites
	
30

	
 
	
7.2. Shipment under Quarantine
	
32

8.Product Security32

	
 
	
8.1. Waste Material
	
32

9.Post-Marketing Surveillance and Stability Testing32

	
 
	
9.1. Stability Testing
	
32

	
 
	
9.2. Product Complaints
	
33

	
 
	
9.3. Adverse Events
	
33

10.Terms and Expiration34

11.DEFINITIONS34

12.Version History (Core Document)38

13.APPROVALS (Core Document)39

 

ATTACHMENTS TO THE QUALITY AGREEMENT

	
 
	
ATTACHMENT A:
	
List of QA/QC Liaisons

	
 
	
ATTACHMENT B: 
	
Table of Responsibilities

	
 
	
ATTACHMENT C: 
	
List of Approved Sub-Contractors

	
 
	
ATTACHMENT D: 
	
List of Raw Materials for ALD403 including Critical Raw Materials

	
 
	
ATTACHMENT E: 
	
Release Requirements for Cell Banks

	
 
	
ATTACHMENT F: 
	
Min/Max doses for change over cleaning calculation for ALD403

	
 
	
ATTACHMENT G: 
	
Storage condition / Shelf life

	
 
	
ATTACHMENT H: 
	
SANDOZ Release Specifications

	
 
	
ATTACHMENT I: 
	
Alder Release Specifications

	
 
	
ATTACHMENT J:  
	
Additional Release Specifications 

	
 
	
ATTACHMENT K:  
	
Document Notification/Review/Approval Sheet

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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ATTACHMENT L: 
	
Critical Reagents and Reference Standards

	
 
	
ATTACHMENT M:   
	
BDS Labeling

	
 
	
ATTACHMENT N: 
	
Change Control Notification/Approval Requirements

	
 
	
ATTACHMENT O:
	
SANDOZ biopharmaceutical manufacturing facilities applicable to ALD403

	
 
	
ATTACHMENT P:
	
Sandoz Batch Release Support Information – Detailed Content Requirements

	
 
	
ATTACHMENT Q:
	
Review of Batch Documentation – QC Test Results Documentation to be Provided with Batch Documentation

	
 
	
ATTACHMENT R:
	
Change history of the Quality Agreement core document

 

 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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PREAMBLE/PURPOSE

Alder is a company engaged in the development, manufacture, and commercialization of biopharmaceutical products, including eptinezumab (also known as ALD403). 

SANDOZ holds a manufacturing license issued by FDA and EMA for the facilities in Kundl, Austria and is obliged to maintain the license.  SANDOZ shall inform Alder about any change or withdrawal of such authorization without undue delay.

A Contract Manufacturing Agreement dated effective as of 4 May 2015 (executed 12-Jul-2016) has been signed between the parties (CMA), under which SANDOZ agreed to manufacture for Alder eptinezumab (also known as ALD403) Bulk Drug Substance (BDS). 

This QUALITY AGREEMENT relates to and is the “Quality Agreement” referred to in the CMA.

The purpose/scope of this QUALITY AGREEMENT is to define the compliance requirements and responsibilities for the quality and regulatory  operations between SANDOZ and Alder for the Manufacture by SANDOZ of BDS, for use in validation and qualification in preparation for regulatory filings and for commercial human use (or, prior to marketing approval, clinical human use), according to the applicable Legal Requirements (including without limitation ICH Guideline Q5, Q7, and Q10, 21 CFR Parts 11, 210, 211, and 600 and 611 et seq., EU Guidance on Good Manufacturing Practice Parts I, II and III, and other regulations as applicable to BDS manufacture), as amended from time to time. Each party agrees to perform its obligations under this QUALITY AGREEMENT in accordance with the CMA, this QUALITY AGREEMENT, and the applicable Legal Requirements.  

1.SCOPE of the QUALITY AGREEMENT

This QUALITY AGREEMENT forms an integrated part of the CMA.  The scope of this QUALITY AGREEMENT includes the SANDOZ biopharmaceutical manufacturing facilities at:  Biochemiestrasse 10, 6250 Kundl, Austria. Refer to Attachment O for the buildings applicable to the BDS manufactured by SANDOZ in the Commercial Facility at the Kundl site. 

This QUALITY AGREEMENT shall be reviewed periodically for accuracy and compliance with the cGMP regulations by both parties according to Alder’s established review schedule at a minimum. The QA/QC liaisons for quality matters are defined in Attachment A. The roles and responsibilities of each party are summarily listed in Attachment B. A list of Alder subcontractors and a list of SANDOZ approved subcontractors for testing ALD403 is provided in Attachment C.  The list of Raw Materials, including Critical Raw Materials, for the Manufacture of ALD403 is provided in Attachment D.  The SANDOZ release requirements for Cell Banks and a listing of released cell banks are provided in Attachment E. The dosages to be used for SANDOZ changeover cleaning calculations is provided in Attachment F.  The storage condition and shelf life for ALD403 is provided in Attachment G.  The SANDOZ Release Specifications for BDS Product are listed in Attachment H.  The Alder Release Specifications for BDS 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Product are listed in Attachment I.  The Additional Release Specifications for BDS are listed in Attachment J.  The form for document approval/notification is provided in Attachment K.  Critical Reagents and Reference Standards are listed in Attachment L. Required elements for BDS Labeling are described in Attachment M. Change Control notification/approval requirements are described in Attachment N.  Buildings applicable to the BDS manufactured by SANDOZ in the Commercial Facility at the Kundl site are listed in Attachment O. Detailed content requirements associated with SANDOZ Batch Release Support Information are listed in Attachment P.  The QC in-process samples and BDS test results documentation (including raw data) to be provided as part of the Batch documentation are defined in Attachment Q. Change history of the Quality Agreement core document is summarized in Attachment R.

This QUALITY AGREEMENT is comprised of this core document and the Attachments.  The Attachments are subject to this core document, but are separately approved, by the quality responsible persons only, and may be periodically updated. This core document and each of the Attachments has its own Version History to document changes and the rationales for their acceptability. 

This QUALITY AGREEMENT initially spanned the [***] and [***] phases per the definitions in the CMA, and, as amended, it now also covers the [***] the [***].   

The effective date of the Quality Agreement core document and the initial version of the Attachments will be the date of the last approval signatures. The effective dates of any subsequent versions of each of the Attachments will be the date of the last approval signature. 

In the event of a conflict between this QUALITY AGREEMENT and the CMA, the CMA shall control and prevail (Reference CMA Clause 37(10).)

2.General Provisions (Quality assurance)

2.1. Directives and Guidelines

Alder is responsible to provide the current information regarding filing/registration documentation.

SANDOZ has the responsibility to Manufacture BDS and make BDS available for shipping to Alder according to the registration documentation (e.g., IND, BLA) and cGMP in accordance with the CMA, this QUALITY AGREEMENT, and applicable Legal Requirements, including US FDA 21 CFR Parts 11 / 210 / 211 / 600, ICH Guideline Q7 and EU Guidance on Good Manufacturing Practice Parts I, II and III and other agency regulations as applicable to BDS Manufacture.

If not otherwise defined in this QUALITY AGREEMENT, the CMA or applicable Legal Requirements, the provisions of SANDOZ quality management system and standard operating procedures shall be applied to SANDOZ’S operations. 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Each party will participate in the Technical Committee and Joint Steering Committee (JSC) activities. (Reference CMA Clause 2.)  Meetings shall be attended, in person or through telecommunications (telephone, video conference, etc.), by senior management in the quality and manufacturing departments of both parties.  SANDOZ and Alder shall mutually agree to the quality metrics (in accordance to ICH Q10 expectations) to be monitored, tracked and presented at the meeting.   

2.2. Regulatory Activities

Alder will be responsible for filing of regulatory submissions related to the Product or the BDS in EU, USA and other countries.  All updates to regulatory applications related to Product are the responsibility of Alder.

SANDOZ will provide Regulatory Support Services, including providing to Alder all necessary information which it may possess pertinent to BDS to ensure global regulatory filings are current and up-to-date.  (Reference CMA Clause 8.)

In connection with Regulatory Authority requests or submission preparation or other regulatory activities, Alder will provide a written request via Attachment K to SANDOZ for Manufacturing-related documents, as applicable. SANDOZ shall provide to Alder upon request verified data that is used for BDS- or Product-specific documents. 

Prior to regulatory submissions, Alder will provide copies of the draft relevant [***] to SANDOZ for review and an opportunity to comment to support compliance with regulatory requirements. SANDOZ will provide comments within [***], unless different timing is mutually agreed.

Alder will within [***] provide copies to SANDOZ of [***].  SANDOZ will within [***] notify Alder of any changes in SANDOZ’s regulatory status or changes in its filings that relate to or would potentially affect the ability of SANDOZ to perform its obligations under this QUALITY AGREEMENT or the CMA, or which would potentially affect the status of any regulatory filing of Alder.

2.3. Validation 

Alder and SANDOZ jointly completed the BDS-related validation activities (including testing supporting process validation) as set forth in Attachments B and C. Process validation documentation for the BDS were approved by both SANDOZ and Alder as part of the Validation Lot Campaign (VLC). Transport Validation remains the responsibility of Alder.  

2.3.1 ALD403 Process Additional Validation

The Process may be amended in writing from time to time by agreement of the Parties in accordance with the change control process set forth in this QUALITY AGREEMENT.  SANDOZ shall not change the Process except at the request of or with permission from Alder. (Reference CMA 1 Clause 1 – “Process” definition)

2.3.2 Ongoing Process Verification (aka. Continued Process Verification)

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Alder and SANDOZ will jointly agree on the OPV Monitoring Plan/OPV Assessment documents before the start of OPV.  Any subsequent Changes to these documents will be subject to change control or document revision lifecycle requiring joint approval prior to implementation.  Investigations and CAPAs resulting from the OPV Assessment will be jointly reviewed and approved.

2.4. Manufacturing, packaging and testing instructions and Specifications

SANDOZ shall be responsible for ensuring the safe operation of the Manufacture of the BDS in its premises. 

SANDOZ shall apply the agreed control procedures (comprising specifications as well as methods) for the BDS. The testing control procedures, BDS specifications and methods will be issued by SANDOZ in their system.  SANDOZ will assure that the conversion of the BDS specification into SANDOZ’S documentation is accurate, updated as appropriate and that a cross-reference to the appropriate Alder specification(s) is referenced in the source document.

SANDOZ must ensure that each person engaged in the Manufacturing, processing, analytical testing, or handling of the BDS, shall be trained according to SANDOZ local procedures. SANDOZ training shall be in current Good Manufacturing Practices and the particular operations that the person performs.  Training in applicable manufacturing regulations shall be conducted by SANDOZ qualified individuals on a continuing basis and with sufficient frequency to assure that each person employed or retained by SANDOZ remains familiar with requirements applicable to them. This training must be documented in a training record for each person employed or retained by SANDOZ and training records must be maintained. (Reference CMA Clause 27(1) and 27(2).)

2.5. Alder Audits

Upon SANDOZ receipt of [***] notice from Alder, SANDOZ will permit employees or authorized representatives of Alder [***] to conduct routine compliance audits and inspection of all documents, processes, equipment, operations, quality systems and facilities of SANDOZ applicable to the Manufacture of the BDS in the biopharmaceutical facilities at Kundl, Austria (hereinafter an “Audit”). (Reference CMA Clause 21.)  The scope and manner of each Audit shall be determined [***] provided, however, that Alder shall conduct such Audits only (a) during regular business hours, or at the time that SANDOZ is Manufacturing the BDS, or when the plant is idle or at such other times when Alder can conduct such Audits without adversely affecting the confidentiality obligations that SANDOZ owes to its other customers, and (b) for the purpose of making quality control inspections, which may include inspection of the facilities, etc., used in the Manufacture, warehousing and shipping of Product, to ensure compliance with the CMA, this QUALITY AGREEMENT and applicable Legal Requirements. Without limitation to the foregoing, Alder shall be entitled (a) to conduct [***], and (b) to conduct [***], each of which shall be conducted in the manner to be determined by Alder in consultation with SANDOZ. For the [***], SANDOZ will permit up to [***] For the [***] to conduct the audit. 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Additionally, Alder shall be entitled to conduct “For Cause” audits as required in connection with critical issues such those presenting a high risk to product quality [***].  For Cause audits do not require [***] advance notice, but the timing of a For Cause audit [***]

Alder will provide a written report to SANDOZ within [***].  SANDOZ will provide Alder with a written response within [***] to any written Audit observations made by Alder. SANDOZ’s written response shall include expected timelines for corrective and preventative actions to address Alder’ written observations as necessary. Upon request, SANDOZ shall complete, and shall provide periodic updates for the status of completion of, these corrective and/or preventive actions.  Alder reserves the right to conduct a For Cause audit for any critical observations that are not satisfactorily addressed through the audit responses.

[***] 

2.6. Regulatory Inspections

SANDOZ shall allow Regulatory Authorities to inspect facilities, operations and quality systems, as necessary to facilitate, obtain or maintain the Regulatory Approvals, regulatory filings or registrations. SANDOZ will within [***] notify Alder of general cGMP inspections and/or legal actions relating to the SANDOZ biopharmaceutical facilities, operations or quality systems that are utilized for BDS Manufacture, or which otherwise might adversely impact SANDOZ’s ability to Manufacture BDS, and the proposed corrective actions. 

For Product pre-approval inspections, Alder shall have the right to have [***] if allowed by the Regulatory Authorities; other Alder representatives may be present in the ancillary areas of SANDOZ facilities to provide support to Product-related aspects of the inspection; and SANDOZ will provide an update to Alder at the end of each day regarding inspection progress and potential issues.  SANDOZ Quality team will coordinate with SANDOZ Manufacturing team to synchronize the BDS Manufacturing schedule with the PAI regulatory inspection.

For general cGMP inspections, Alder shall have the right to have [***] if allowed by the Regulatory Authorities; and other Alder representatives may be present in the ancillary areas of SANDOZ facilities to provide support to Product-related aspects of the inspection.  

For general cGMP inspections that include ALD403 BDS or Process, SANDOZ will provide an update to Alder at the end of each day regarding inspection progress and potential issues related to ALD403 BDS or Process.

For general inspections that involve the production facilities and systems supporting ALD403 BDS Manufacture, SANDOZ will notify Alder of inspection outcomes (to include at a minimum[***]) within [***] of the end of the inspection.  

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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SANDOZ must within [***] notify Alder about critical issues encountered during regulatory inspections that may have the potential to adversely affect the SANDOZ premises or facilities, the quality of Product or Process, or the quality system.  Critical issues are those for which a high risk related to product quality, safety, product recall, or regulatory enforcement action has been identified.

SANDOZ shall provide to Alder, within [***] after receipt by SANDOZ, a written copy of any inspection reports, inspection observations and/or legal actions with or by Regulatory Authorities relating to: Product pre-approval inspections (PAI’s), or general cGMP inspections if ALD403 BDS or Process is addressed within the conduct of the inspection. The reports may be redacted if needed to ensure client confidentiality of other SANDOZ clients as well as SANDOZ products.

SANDOZ shall provide Alder with any and all draft responses to regulatory observations or replies to regulatory inquiries that relate to the Product or Process.  Alder shall review draft responses and 

provide written feedback within [***]. SANDOZ and Alder will work cooperatively on the responses related to the Product or Process.

For pre-approval and general cGMP inspection observations, SANDOZ shall provide notification to Alder within [***] of the knowledge that closure of such observation would impact the Product approval, timing of Product approval, the Manufacture of BDS, Process, or the timing of the Manufacture of BDS. The parties will discuss and develop mutually agreed solutions to stay on track with the Product approval and BDS Manufacture. 

If SANDOZ is required by any governmental authority or Regulatory Authority to have inspected or approved the site of Manufacturing or storing the Product or any Raw Materials, SANDOZ shall permit and cooperate with officials of the Regulatory Authority to inspect such sites.

SANDOZ shall secure Alder’s written agreement prior to making any commitments to any Regulatory Authority observations relevant to Product. 

Alder will not provide any official information related to SANDOZ premises and facilities to a Regulatory Authority without written consent of SANDOZ.

2.7. Person in Plant (Long Term)

Alder shall have the right to provide Alder employees on SANDOZ premises for the purpose of information exchange and coordinating reviews, approvals, or other actions required by this QUALITY AGREEMENT, including person-in-plant rights during production under the CMA, and as otherwise agreed to by Alder and SANDOZ in writing. (Reference CMA Clause 21(1) and Clause 21(4).) 

Upon SANDOZ’s receipt of [***] prior notice from Alder (or as mutually agreed), Alder may, [***], place [***] at SANDOZ’s manufacturing facility. Alder’s representatives at SANDOZ shall accept SANDOZ’s procedures regulating external customer relationships (including cGMP training, hygiene, confidentiality and 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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controlled access to facilities and documents) and will obtain SANDOZ’s agreement prior to any active participation in the Process or analytical testing.  (Reference CMA Clause 21(1).)  SANDOZ’s obligation to allow visitors who are [***] is on condition that: (a) such visitors agree in writing to observe the reasonable customary requirements of SANDOZ regarding security, health and safety, confidentiality or any other applicable regulations at the relevant premises (provided, however, that Alder employees shall not be required to sign a separate confidentiality agreement); (b) any visit shall be under the specific supervision of SANDOZ (without relieving any visitors of any obligations with respect to any damage or injury caused by them); and (c) Alder uses reasonable endeavors to ensure that any visit and the number of visits is of minimal disruption to SANDOZ day-to-day business. Alder shall provide SANDOZ with reasonable notice prior to each such visit, communicate to SANDOZ the reason for each such visit and ensure that such visits are made by relevant personnel only. Alder, in consultation with SANDOZ, will develop an agenda for each such visit. (Reference CMA Clause 21(4).)

[***], SANDOZ and Alder will work collaboratively to assure BDS quality, and, as part of Alder’s quality oversight obligations, Alder will be permitted to be onsite at the Commercial Facility, in collaboration with SANDOZ, for on-going discussions, document exchanges, and review of quality topics between their respective quality units.  With [***] advance notice and mutual agreement on the timing of the visits, SANDOZ shall provide Alder with on-site access to staff, and on-site [***] access to documentation, data ([***]), and records that are relevant to Alder’s quality oversight obligations.

2.8. Product Quality Review

Alder is responsible for submitting the Annual Product Review (APR) to the authority as the Product license holder. SANDOZ will issue a product quality review report, which will serve as an input to Alder’s APR per SANDOZ internal procedures. The review report shall comply with the current requirement of 21CFR211.180(e). Timelines associated with the product quality review report and the APR deliverables will be agreed jointly. 

2.9. Subcontracting

SANDOZ is entitled to subcontract the work or part of the work entrusted by Alder to the sub-contractors listed in Attachment C, subject to compliance with the CMA, this QUALITY AGREEMENT, and change control management. If SANDOZ wishes to retain any new subcontractors, SANDOZ shall obtain the written approval of Alder before using any such subcontractor (through revision of Attachment C).  (Reference CMA Clause 37(7).) SANDOZ shall establish written service agreements and written technical/quality agreements with its sub-contractors prior to commencement of the subcontracted work.  Any change of the subcontracting service level or new sub-contractors requires Alder’s prior written approval and will be subject to change control management. SANDOZ shall remain solely and fully responsible for the performance of the work by sub-contractors in accordance with the requirements set forth in the CMA and 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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this QUALITY AGREEMENT. (Reference CMA Clause 37(7).) SANDOZ shall oblige its sub-contractors to comply with the applicable terms of the CMA and this QUALITY AGREEMENT, including informing SANDOZ on changes relevant to the registration of Product, such as to the manufacturing location and procedures and to the equipment and materials used. SANDOZ must ensure that such sub-contractors will accept foreign and local governmental authorities to inspect facilities, operations and quality systems, as it is necessary to facilitate, obtain or maintain the Product approvals of the Regulatory Authorities, including the investigational new drug application and the registration of Product.

SANDOZ shall audit each sub-contractor prior to using that sub-contractor according the respective SANDOZ SOP.  Alder shall have the right to review the SANDOZ annual audit summary of sub-contractors and the evidence of technical/quality agreements relating to the sub-contractors used for the Manufacture of BDS during the annual audit.  

SANDOZ must qualify their contracted testing laboratories to ensure that there is appropriate and required equipment, qualification and training to perform the necessary testing. (Reference CMA Clause 6(6).)

2.10. Facility, Equipment, and Computer Systems Qualification and Validation 

SANDOZ shall ensure that Alder may review at the Kundl facility the records relating to the Assets and the Facility Modifications (Reference CMA, Clause 1 (1) and Clause 4 (1)) including the applicable change control/summary detailing the outcomes and validation of the Facility Modifications. 

SANDOZ shall maintain a system to ensure that premises, environment, laboratories, utilities, equipment, computerized systems and other systems that support the manufacturing operations, including the Assets and Facility Modifications, are properly designed, validated and maintained in accordance with cGMP.  SANDOZ shall perform required process equipment, facility and utility maintenance at periodic and predefined frequencies (as defined in SANDOZ procedures) to ensure that appropriate maintenance and upkeep is performed on premises, environment, laboratories, utilities, equipment, computerized systems, and other systems that support the manufacturing operations, including the Assets and Facility Modifications.

SANDOZ will ensure appropriate separation and controls are in place for operation for multi‐product facility. 

Approved validation protocols, reports, testing protocols, raw data and system operation procedures relating to the Product shall be available for consultation by Alder while on-site or during audits.

2.11. Change Management and Approval

Changes to this QUALITY AGREEMENT and its relevant Attachments shall only be made by mutual agreement between the parties, and must be in writing and recorded on the Version History of this QUALITY AGREEMENT core document and the individual Attachments. 

Change control is an integral part of cGMP and requires a mutually agreed change control process to ensure both Alder and SANDOZ adequately assess any proposed change to the Manufacture of the BDS. 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Changes that are subject to this Section include without limitation changes to this QUALITY AGREEMENT itself, changes to the Manufacturing of the BDS, changes to the BDS Specifications (Attachment H, Attachment I and Attachment J) (Reference CMA Clause 19), and changes relevant to the registration of the Product, such as to the Manufacturing location and Manufacturing procedures, automation controls, process controls, or to the equipment, utilities, and Raw Materials used. Furthermore, changes that could potentially interfere with the quality of the Product, such as to the testing or release procedures, instructions and specifications, must be evaluated as part of and are subject to Change Control management and approval.  Refer to Attachment N for approval requirements relating to Change Control.

2.12. Changes to Processes and Premises

SANDOZ or Alder shall prepare a change control request in writing, in advance and in English, using a mutually agreed process, including changes relevant to Product-related regulatory submissions or the registration status of Product and on changes that could potentially impact the quality, safety, efficacy and/or supply of Product.  Refer to Attachment N for examples of changes. 

	
 
	
•
	
SANDOZ or Alder, as applicable, shall prepare a change request in writing. In this document the following items shall be defined: [***]

Alder is responsible to review and evaluate the regulatory impact of any proposed change on the product license.  SANDOZ is responsible to review the regulatory impact of any proposed change on the facility license.  

In general, Alder shall without delay evaluate each change request from SANDOZ and respond to SANDOZ within [***] with comments/approval/denial, as applicable.  Similarly, SANDOZ shall without delay evaluate each change request from Alder and respond to Alder within [***] or per timelines mutually agreed (e.g. changes linked to regulatory commitments).  If the period cannot be met, the receiving party will notify the change initiating party about the current status of the evaluation and endeavor to fully respond to the initiating party as soon as possible under the circumstances. SANDOZ shall implement the change per agreed timing after Alder and SANDOZ approval. SANDOZ shall provide actual timing and listing of initial Batch(es) associated with change to Alder. 

For the avoidance of doubt, SANDOZ may, at any time, [***] notification to Alder and in accordance with any applicable provisions of this QUALITY AGREEMENT, undertake any change (including routine maintenance and repair work) to any of its premises or facilities or equipment directly used in the Manufacture of BDS; provided that any such change shall not impact nor have the potential to impact the safety, efficacy, quality, identity, strength, purity, registration, and/or supply of the Product.

Emergency corrective action shall be taken by SANDOZ if necessary to resolve urgent unacceptable situations related to quality and safety during the ongoing Process. Such emergency changes can be implemented prior to evaluation and approval by SANDOZ QA department if permitted under SANDOZ 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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procedure, but the SANDOZ QA department must be notified within [***] after implementation. SANDOZ shall inform the person-in-plant prior to implementation, if feasible.  SANDOZ has the right to implement such emergency changes without prior written approval of Alder, but will notify Alder in writing within [***] after implementation. Alder will provide an impact assessment [***] after notification.

Registration relevant change proposals that have been approved by Alder can only be implemented permanently after obtaining approval from the competent Regulatory Authorities.   Alder will duly inform SANDOZ after having received such approvals and the expected deadline for implementation by SANDOZ.

Requirements relating to Raw Material changes are described in section 3.3 and Attachment N.

SANDOZ will use [***] to implement changes required by a Regulatory Authority, and will use [***] to implement changes requested by Alder.  

2.13. SANDOZ Document Notification, Review, and Approval

All GMP Documentation, changes and activities subject to ALDER approval or notification will be handled according to Attachment K of this QUALITY AGREEMENT. Confidential documents will be exchanged with ALDER via secure e-mail or an appropriate exchange platform ([***]). 

If acceptable, SANDOZ will document such changes according to SANDOZ change control SOP (Reference CMA Clauses 4, 7, 18, 19 and 20).

2.14. Influence on Quality by Foreign Materials

SANDOZ must refrain from any activity which could adversely affect the safety, efficacy, identity, strength, purity, or quality of Product.

SANDOZ will not introduce, use or conduct any production activities with herbicides, pesticides or any known toxins, penicillin, cephalosporin, beta lactams, cytotoxic products, live vaccines or any other material, product or process that could reasonably present a potential hazard to Product in the biopharmaceutical facility or equipment used for Manufacture of BDS.  

Prior to introduction of a new product into the SANDOZ biopharmaceutical facility, SANDOZ shall maintain the necessary engineering and procedural controls to minimize the cross-contamination potential of the Product with cytotoxic or pharmacologically active starting materials at the SANDOZ facility.  SANDOZ shall immediately provide written notification to Alder in advance of the use or the planned use of a human cell line to be manufactured at SANDOZ facility in which the Product is manufactured.  

SANDOZ shall maintain a policy for product changeover for multi-use equipment used for Manufacture of Product.  [***] as per approved procedures prior to Manufacture of BDS. SANDOZ shall confirm that all product changeover test results meet acceptance criteria prior to Release of BDS. SANDOZ shall supply to Alder upon request product changeover reports that demonstrate acceptability of changeover results.

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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SANDOZ shall [***] as defined in SANDOZ procedures between Batches of BDS.

2.15. BSE/TSE-Assessment

All Raw Materials obtained by SANDOZ from a third party and employed in the Manufacture of the Product will conform with the Note for Guidance on Minimizing the Risk of Transmitting Animal Spongiform Encephalopathy Agents via Human and Veterinary Medical Products (EMA-Guidance EMA/410/01 Rev. 3, or applicable current version).  

SANDOZ shall supply to Alder a signed BSE/TSE-Risk statement for the BDS that declares if raw materials of animal origin are used, and for those raw materials that are of animal origin, an evaluation of the animal origin and an assessment on whether the materials are in compliance with EMA-Guidance EMA/410/01 Rev. 3 or applicable current version.  SANDOZ shall update the BSE/TSE-Risk statement [***], and as required due to changes in sourcing of raw materials.  

Upon Alder request, SANDOZ shall provide Alder with the necessary BSE/TSE Certificates of Compliance for each Raw Material where applicable (e.g.., as part of Audit or regulatory submission).  Under no circumstance shall SANDOZ use any bovine-derived material from any country at-risk for the transmission of BSE (relevant for Product). 

2.16. Deviations, Corrective and Preventative Actions, and Quality Events

SANDOZ categorizes unplanned events into either Quality Events, Minor, Major or Critical deviations (see Section 11 for definitions).

Deviation/OOS/OOE must be handled according to the corresponding SANDOZ standard operation procedure. Deviations related to Manufacturing (including those originating from an OOS or OOE) must be reported to Alder in writing where possible within the timelines defined below. Major and Critical Deviations related to Manufacturing (including confirmed OOS and OOE) shall be provided by SANDOZ to Alder as a draft report for Alder review within [***] from the date of initial discovery. In the instance that an Alder deviation confirms an issue with the Product or Process and identifies the need for a CAPA, Alder will notify SANDOZ within [***] of the need of CAPA and jointly agree on the plan.

 

				
	
Event Type 

(See section 11 – Definitions)
	
Timelines for written notification after date of discovery by SANDOZ
	
Quality record submitted to Alder for:
	
Closed record provided

	
[***]
	
[***]
	
[***]
	
[***]

	
[***]
	
[***]
	
[***]
	
[***]

	
[***]
	
[***]
	
[***]
	
[***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Event Type 

(See section 11 – Definitions)
	
Timelines for written notification after date of discovery by SANDOZ
	
Quality record submitted to Alder for:
	
Closed record provided

	
[***]
	
[***]
	
[***]
	
[***]

	
[***]
	
[***]
	
[***]
	
[***]

 

SANDOZ deviations shall include root cause determination, product impact assessment, and identification of CAPA (corrective action / preventive action) as appropriate.  

Alder will respond in writing [***] with comments related to the major or Critical Deviation or that the deviation is acceptable as written.  SANDOZ shall provide a written response to the Alder comments indicating changes to the deviation report and justification for Alder comments that are not included with the revised deviation report.  Alder shall review SANDOZ response and communicate any additional comments to SANDOZ.  SANDOZ will work cooperatively with Alder to address comments prior to final closure. 

Product related Quality Events as unplanned events that are relevant to Product disposition and Minor deviations will be provided to Alder upon SANDOZ approval and prior to or at SANDOZ Product disposition. 

[***] The target for approval of final deviation reports is [***]

SANDOZ shall maintain a system to ensure the timely completion of corrective/preventive actions (CAPA) identified from deviations related to the Product.  SANDOZ shall provide to Alder a listing of Product-related CAPAs, and their due dates [***] and, as applicable, CAPA effectiveness verifications.  On a case by case basis, SANDOZ will provide closed Product-related CAPAs resulting from deviations [***]

2.17. Non-conforming BDS

Non-conforming BDS is handled according to the CMA. (Reference CMA Clauses 15, 18 and 20, and also reference Section 7 of this Agreement.). Any complaints by Alder  that a Batch, or one or more samples in a Batch, is not conforming with the requirements under CMA Clause 18(1) (such BDS being referred to as “Non-conforming” BDS, and such non-conformity referred to as “Non-conformity”) shall be delivered to SANDOZ in writing [***] with such complaint being accompanied by supporting data for purposes of consideration and verification by SANDOZ. Attachment K will be used for notification of the Nonconformity as a “Nonconformity Customer Complaint.”

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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2.18. Recall/Supply Recovery

Alder, through the designated group that manages Product recalls, is responsible for the final recall decision according to the CMA. (Reference CMA Clause 29.) In the event Alder commences a recall of Product, Alder shall provide SANDOZ with a written request of any and all data and information needed for an orderly recall.  SANDOZ shall respond to Alder’s written request [***]   SANDOZ will fully cooperate with Alder in providing any data requested to support a recall decision and give reasonable assistance in conducting any such recall or disposal.  Such data should be provided as a matter of urgency but, in any case, [***]

Alder may undertake and SANDOZ will provide information to Alder in connection with mock recalls, and Alder will notify Project Management and Site Quality Head [***] in advance of any mock recall for administrative purposes only.  SANDOZ will not notify its staff prior to a mock recall.  

2.19 Biological Product Deviation Report (BPDR)

Upon identification by ALDER that an event requires reporting to the FDA, for product that was manufactured at SANDOZ, SANDOZ will be notified [***] (Attachment K). A reportable BPDR is associated with an unexpected event or an event related to the manufacturing of a licensed and commercially distributed biological product that represents a deviation from cGMP, regulations, standards, or specifications, that may affect a distributed product's safety, purity and potency. SANDOZ shall complete the investigation for the significant deviation and provide the results of the investigation to ALDER as soon as reasonably possible and [***] after SANDOZ acquires information reasonably suggesting a reportable event under cGMP regulations. ALDER shall write the BPDR and submit to SANDOZ as a draft for review and comment prior to ALDER submission of BPDR to FDA. ALDER must submit the BPDR to FDA within FDA required timelines from the date SANDOZ acquires information reasonably suggesting a reportable event under cGMP regulations. Alder shall provide a copy of the filed BPDR to SANDOZ. 

3.Raw MaterialS

3.1. Cell Banks

[***] (may be referred to as WCB or MWCB) and [***]. Alder is responsible for ensuring testing of the cell banks is performed prior to shipment of cell banks to SANDOZ according to Attachment E. The parties shall jointly agree if there are additional testing requirements. SANDOZ will release the cell banks for production according to local procedures. Only SANDOZ- and Alder QA-released cell banks will be used for cGMP Manufacturing at SANDOZ.

Alder will provide the C of A, C of C (if applicable), and cell line characterization data summary for each Working Cell Bank shipped to SANDOZ (see Attachment E).  SANDOZ will review the cell line characterization data, storage conditions and SANDOZ’s cell bank storage procedures prior to release into 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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SANDOZ’s facility. SANDOZ may perform cell bank testing upon review and agreement by Alder (according to approved internal procedures) to ensure that the cell bank is free of adventitious agents.  

[***] shall store Alder cell banks under appropriate conditions and with appropriate segregation of Alder cell banks from other cell banks, as per [***] approved procedures. [***]

Alder will be responsible for cell bank shipping. SANDOZ shall send the cell bank shipper temperature recording device to Alder for review after each shipment.  Alder shall send to SANDOZ documentation to indicate the acceptability of the cell bank shipment temperature.  SANDOZ shall review the cell bank documentation according to local SOPs prior to release of the Working Cell Bank for cGMP Manufacture (refer to Attachment E).  SANDOZ shall notify Alder of SANDOZ disposition/release [***] of SANDOZ disposition via Attachment K (including the SANDOZ batch number and corresponding Alder batch number).

SANDOZ shall utilize Working Cell Banks [***] Alder is responsible for providing reassessment dates and supplying necessary documentation including updated CoA based on performed reassessment to SANDOZ, unless otherwise agreed. 

Alder may order the preparation of a new master and working cell bank.  (Reference CMA Clause 3(2).)  [***].

3.2. Supply of Raw Materials by Alder

[***]. In the event that Alder needs to deliver specific Raw Materials required for cGMP Manufacture of BDS, an agreement would be required by both parties, and, if both parties agreed thereto, then Attachment D would be annotated accordingly. In this respect Alder (or its supplier) would need to be qualified as a raw material supplier for those respective Raw Materials according to SANDOZ procedures. 

3.3. Procurement of Raw Materials by SANDOZ

 Refer to Attachment D to this QUALITY AGREEMENT for the required list of Raw Materials (including those designated as “Critical Raw Materials”), including the supplier, grade and other required quality parameters and specifications agreed by both parties for the Manufacture of Product.

SANDOZ is responsible for sourcing all Raw Materials required for Manufacture of Product. Alder has reviewed the SANDOZ Raw Material specifications referenced in Attachment D as part of the technical transfer and in support of the [***] manufacturing campaign, and subsequently has reviewed in support of the Contract Manufacturing Phase.  For Critical Raw Materials for which the supplier and supplier’s item number are identified in Attachment D, only the identified item number from that supplier is allowed for use in production.  For non-critical Raw Materials, multiple suppliers may be used if the supplied Raw Material is of the same or higher grade, and the material passes pre-determined specifications, and is a SANDOZ-approved supplier. Raw Material changes will be managed according to Attachment N.

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Refer to Attachment N for classification of Raw Material /Consumable Changes and related level of customer (Alder) approval required.

SANDOZ must procure Raw Materials from the SANDOZ approved suppliers. Procured Raw Materials have to be qualified, inspected and tested for compliance by SANDOZ with the approved specifications as defined. SANDOZ shall inform Alder [***]on recalls or call-back of material by suppliers and brokers, for quality or safety reasons if the material was used for the Manufacture of Product.  Only SANDOZ released Raw Materials and consumable items shall be used for Manufacture of Product.

3.4. Sampling

SANDOZ must take samples of all Raw Materials and Auxiliary Materials according to local procedures. Unless otherwise agreed in writing, sampling for testing (at least identity) of the Raw Materials must be performed. Reserve samples of Raw Material must be kept according to local procedures.

3.5. Storage

Storage containers and storage/transport conditions must ensure that the specified quality of Raw Material is not compromised; SANDOZ will store Raw Materials under appropriate storage conditions according to SANDOZ SOPs and information from the supplier. 

	
4.
	
Manufacturing of Product IN THE cONTRACT mANUFACTURING pHASE

4.1. Cell Banks

Under the CMA, [***].  

4.2. MPD Document; Batch Manufacturing and Packaging Records

The MPD Document (Reference CMA Clause 18(5)) consists of ALD403-specific manufacturing SOPs and ALD403-specific master batch records, describing the Process and covering all steps, [***].  For Batches Manufactured in the Contract Manufacturing Phase, BDS shall be Manufactured in accordance with the validated Process, reflected in the MPD Document and all process parameters and in-process control results for each successful Batch will be reviewed against the Process described in the MPD Document.  (Reference CMA Clause 18(5).)

SANDOZ shall assure that all BDS is Manufactured in accordance with the Process, the BDS Specifications, cGMP and (as applicable) the requirements of the FDA and the EMA, including corresponding manufacturing procedures and packaging instructions, and that all process parameters and in-process control results for each successful Batch are reviewed against the Process described in the MPD Document. (Reference CMA Clause 18(1).)  

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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When a change is approved through change control (refer to Sections 2.11-2.12), SANDOZ will submit proposed BDS specific master batch records to Alder for approval before the change can be implemented.  SANDOZ will supply the proposed records to Alder [***] to allow [***]. Master batch documentation is written in [***]. SANDOZ shall provide deviation reports (including Reportable Deviations, OOS and OOE / Out of Trend (OOT) reports), change controls, development and technical reports related to the Product, and process validation reports as applicable to Alder written in [***]. Revision of Product-specific documents including but not limited to the most current versions of [***] process validation protocols and reports, manufacturing process descriptions, specifications for non-compendial raw materials (at commercial stage), analytical methods, analytical method validations (except compendial methods), BDS specifications, and packaging specifications at SANDOZ shall be coordinated between SANDOZ and Alder.  For each draft revised document, SANDOZ shall also provide a red-lined version or detailed listing of the proposed changes, along with rationale for the changes according to Section 2.11. Alder shall [***] review and provide comments in writing to SANDOZ [***]  SANDOZ will work cooperatively with Alder to address the Alder comments and update the draft document accordingly.  The final revised record shall be submitted to Alder for Alder translation and approval prior to the final SANDOZ approval and implementation.

SANDOZ will ensure that the BDS final containers have met requirements for container sterilization from review of the final container certificates provided by the vendor and that the processes are in place to ensure container closure integrity of the BDS filled final containers upon BDS storage by SANDOZ. 

SANDOZ agrees to provide copies of original batch documents (Manufacturing Records) as well as facility, Process, or utility documentation (excluding proprietary documentation) and Standard Operating Procedures (SOPs) related to Manufacture of the BDS, when requested by Alder, [***]  Alder shall be responsible for document translation. (Reference CMA Clause 18(1).)

SANDOZ shall compile and archive clear structured Batch documentation for each Batch of BDS. The Batch Manufacturing Records as well as testing documentation kept by SANDOZ must comply with the GMP guidelines, and be retained for [***]or such longer period as is required under applicable Legal Requirements. Electronic archiving is possible instead of retaining paper records as defined in SANDOZ approved procedures. SANDOZ shall not destroy Batch Manufacturing Records or testing documentation without first notifying Alder and providing to Alder the option of shipping Batch Manufacturing Records and testing documentation from SANDOZ to Alder prior to destruction of any documentation.

SANDOZ shall have written procedures to ensure that in-process and release test data recorded into Product-specific documents (e.g. deviation reports, Product quality review, validation reports, and technical reports) has been verified by SANDOZ for transcriptional accuracy from source documentation.  For all executed MPD documents, SANDOZ shall emphasize data integrity, ensuring that data are complete, consistent and accurate (attributable, legible, contemporaneously recorded, an original or true copy, and accurate), and shall be responsible for restricting access to cGMP computer systems, validating workflow on computer systems, 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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controlling blank forms, reviewing audit trails, training personnel in detecting data integrity issues, in accordance with regulatory authority recommendations regarding data integrity.  SANDOZ shall validate all automated calculations for in-process and release test data or verify with second person the accuracy of calculations in the absence of validation.  

SANDOZ shall perform tech transfer for process and development activities within SANDOZ facilities according to approved SANDOZ procedures.  

4.3. Reprocessing and Rework 

Any use of Product not meeting the release specifications after testing is not allowed unless authorized by Alder. 

Reprocessing in the sense of repeating process steps that are part of the validated Manufacturing Process are only allowed in exceptional cases for a validated process, and require prior written approval from Alder.  Any Reprocessing of Product is prohibited without prior change control review and approvals, as described in Section 2.  

Rework of Product or its intermediates in the sense of performing process steps that are different from the agreed Manufacturing Process is not allowed. 

4.4. Review of Batch Documentation

After detailed review of the Batch documentation of each Batch by SANDOZ, SANDOZ is responsible to ensure that a statement of compliance with GMP (Certificate of Conformity/Compliance, confirmation statement) signed by [***] is included or attached to the certificate of analysis (CoA) that is signed by the [***] and [***]. SANDOZ shall also provide the following Certificates and Manufacturing Records (also known as Batch Release Support Information), to Alder for each Batch, to enable Alder to perform Batch review and disposition. Refer to Attachment P for detailed content elements of the SANDOZ Batch Release Support Information.  

	
 
	
•
	
Copies of SANDOZ-executed Batch records (to include [***], and as applicable, [***]) that have been reviewed by SANDOZ manufacturing and SANDOZ QA

	
 
	
•
	
SANDOZ-Certificate of Analysis 

	
 
	
•
	
SANDOZ-Certificate of Conformity for each Batch. Alder will provide instructions on the required derivation and formatting for the Retest date. The Certificate of Compliance will contain a statement attesting that the Batch was prepared in conformance with cGMP; including reference to relevant governing regulation(s). 

	
 
	
•
	
SANDOZ material report(s) summarizing starting materials and raw materials used (material number, batch number, material status, expiry date, quantity)

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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•
	
Copy of SANDOZ Batch disposition checklist

	
 
	
•
	
Copies of approved QC data records (in-process) including raw data (See Attachment Q)

	
 
	
•
	
Copies of approved QC data records (BDS) including raw data (See Attachment Q)

	
 
	
•
	
All deviations reports, including process and product related Deviations, Out of Specification (OOS) and Out of Expectation (OOE) reports associated with the Batch.

Any additional requests under the terms stated below shall be approved by both parties.

4.5. Warehousing

SANDOZ is responsible to ensure that BDS is stored under appropriate conditions of temperature and, light, and cleanliness so that identity, strength, quality and purity of the BDS are not affected. Reference Attachment G for Product storage conditions.  Alder shall transfer any known light exposure requirements of the Product to SANDOZ, and SANDOZ has the responsibility to provide the necessary light protection for the BDS as defined in SANDOZ batch records and SOP’s.  In the event that the identity, strength or quality of the Product in the warehouse could be adversely affected for any reason, SANDOZ shall take immediate action to prevent any potential damage to the Product. In any case SANDOZ shall inform Alder in writing where possible [***] of such adverse event. 

SANDOZ will not use wood pallets in classified manufacturing areas or for storage and shipment of Product.

4.6. Packaging for Dispatch and Transport

SANDOZ is responsible to ensure that the requirements regarding the packaging for dispatch and transport to the agreed hand-over point of Product is met.

Shipments of Product is performed under [***] (Incoterms 2010) and in accordance with the specific delivery provisions set out in Schedule 1 of the CMA. (Reference CMA Clause 15(1).)

SANDOZ will apply a tamper-evident seal to the shipping container used to ship BDS to Alder (or an independent facility under contract to Alder) in a manner such that, if the seal is breached or missing, Alder will be alerted to the possibility that the contents may have been altered.  The tamper-evident seal to be used shall be mutually agreed by SANDOZ and Alder. SANDOZ will ensure that Product is stored up until the time of shipment within the material’s labeled storage range. SANDOZ will package the Product containers for shipment according to agreed packaging specifications and with temperature monitoring devices.

[***].

SANDOZ shall ensure that each BDS container has an attached sample suitable for the receiving site to perform ID testing.  [***] 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Alder (or an independent facility under contract to Alder) will inspect the shipping container packaging and seal, and each BDS Product container upon receipt after shipment.    If a discrepancy is observed which may relate to the SANDOZ operations, Alder shall issue a written request for SANDOZ to initiate a deviation. SANDOZ shall investigate and provide to Alder a copy of the completed deviation report. SANDOZ shall implement any agreed actions arising out of the completed investigation report in order to avoid the reoccurrence of similar issues in the future.

The container-labels for the Product are defined per Attachment M.

5.Testing of Products

5.1. Method Transfer, Qualification, and Validation

When test methods are to be transferred to SANDOZ, Alder or its designee will conduct a formal method transfer according to mutually agreed upon procedures.  The format of the test method transfer protocol and test method report will be mutually agreed upon by Alder and SANDOZ.  Each test method transfer protocol and report will be reviewed and approved by SANDOZ and Alder.  SANDOZ test method SOPs resulting from a successful analytical transfer (and subsequent revisions) will be reviewed and approved by Alder and SANDOZ. Any changes to agreed upon test method SOPs will be handled via SANDOZ Change Control Management (reference section 2.12).  Raw data from the analytical transfer will be maintained at SANDOZ and available to Alder, upon request. Compendial test methods do not require transfer, however the SANDOZ test method SOPs for compendial methods are to be made available to Alder, upon request, during audits.  Compendial methods require verification at the labs used by SANDOZ.

SANDOZ and Alder shall ensure that analytical methods, in-process, and Product release testing at SANDOZ are qualified (SANDOZ “early stage validation”) for clinical manufacture and validated prior to Process Validation and commercial manufacture.  Protocols and reports shall be jointly approved.  SANDOZ test method SOPs resulting from a successful qualification or validation (and subsequent revisions) will be reviewed and approved by Alder and SANDOZ.  [***]

SANDOZ shall perform analytical methods within SANDOZ labs according to approved SANDOZ procedures.  

5.2. Sampling

SANDOZ shall take samples of BDS and its intermediates according to the current SOPs and batch records. [***] 

SANDOZ shall deliver to Alder or Alder’s designated testing laboratory samples of each Batch of the BDS, as and when Batches are Manufactured, and [***] in accordance with a mutually approved sampling plan. [***]. 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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For special or investigational testing not included in the sampling plan, Alder may request that SANDOZ ship in-process or release testing samples (including reserve samples) to Alder or a designated testing laboratory specified by Alder.  Transportation of samples for testing will be performed according to SANDOZ shipment procedures (temperature monitored).

Any additional sampling that is not defined in current SOPs and batch records must be approved by both parties.  

5.3. Testing of Products

Alder will supply Product-specific reagents and reference standards (including CoA and expiry/retest date) to SANDOZ. SANDOZ shall store the Process Transfer Materials (see definition in CMA) at the proper labeled storage condition in qualified equipment. The introduction of a new lot of critical reagent or reference standard for qualified or validated assays must go through Change Control (Section 2.11). 

	
 
	
•
	
SANDOZ will be responsible for the compliance of the cGMPs for the BDS Manufacture in alignment with the BDS Specifications, and will carry out complete in-process and release testing according to the agreed test documents.  In-process testing results will be documented in BDS batch records with comparison to the allowable range, as appropriate.  The Certificate of Analysis (CoA) for the release testing must comply with internationally harmonized requirements for Batch certification. including: [***] 

A CoA for each individual Batch of Product must be issued and provided to Alder.

[***]

5.4. Out of Specification Results

Out of Specification (OOS) investigations (See OOS definition in Section 11) must be handled according to the corresponding SANDOZ standard operation procedure for testing performed under SANDOZ control. For testing performed under Alder control, Out of Specification (OOS) investigations must be handled according to the corresponding Alder or designee’s standard operation procedure. For OOS investigation (Level II investigation) associated with the Alder Specifications, refer to Section applicable to Customer Complaint (BDS Non-Conformity) in Section 2.17. Out of Specification investigations are performed for BDS Specifications that are not met for Product release testing. 

SANDOZ will notify Alder of all suspect OOS/OOT (Level I) results [***] of observation.  SANDOZ shall perform a Level I laboratory investigation to determine if a laboratory error is responsible for the OOS result. Re-analysis and Repeat Assays performed under Level I OOS in SANDOZ SOPs do not require prior approval from Alder.  If Level I investigation does not find a conclusive root cause for the OOS or OOE result, then SANDOZ must notify Alder [***] after completion of the Level I investigation. All investigation 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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must be undertaken by Sandoz in close cooperation with Alder. ALDER shall review alternative Level II re-test plans for ALD403 specific test methods and approve the final OOS report. 

If the OOS result is confirmed, a separate manufacturing investigation must be initiated in accordance with SANDOZ standard operating procedures, and the Level II OOS investigation may be closed.  The OOS investigation report must be in conformance with FDA OOS guidance “Investigating Out-of-Specification (OOS) Test Results for Pharmaceutical Production” (2006 or if superseded, current version), and will be approved by Alder.   

SANDOZ shall perform required manufacturing investigations for confirmed OOS results to determine if there is a Manufacturing root cause for the result, as well as any corrective action / preventive action.  SANDOZ shall provide OOS investigation report and any related manufacturing investigation report to Alder for review and approval in accordance with Section 2.16.  SANDOZ will trend invalid assays, and providing trending reports upon request from Alder.

5.5. Microbiological Control Program

SANDOZ will maintain an appropriate microbiological monitoring program to ensure acceptable microbiological quality and compliance with applicable laws and regulations.  

[***]  

The [***] shall be established as per SANDOZ procedures. SANDOZ shall perform microbial identification for [***]  SANDOZ shall continually monitor [***] excursions to determine if there is an upward and/or worsening trend, and to take corrective and preventive action as appropriate to improve the trend.

SANDOZ shall [***] for the Bulk Drug Substance are indicated in the CMA (Reference CMA Schedule 2) and in Attachment H.

Alder shall perform an assessment of the impact [***] to the Alder Product as part of Alder lot disposition procedures.

6.ARCHIVING OF Samples and Documentation

SANDOZ ensures that Reserve Samples (also known as Reference Samples) and Manufacturing Records related to the Manufacture are archived under defined conditions as follows:

The Reserve Sample amount to be stored shall be sufficient to perform [***] according to the testing instructions. 

SANDOZ shall notify Alder [***] in the event of any issues concerning the Reserve Samples according to deviation handling in section 2.16.

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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SANDOZ shall not discard or destroy Bulk Drug Substance Reserve Samples or Manufacturing Records (including electronic records) once the archive period has been reached without first contacting Alder in writing and obtaining Alder written response as to whether samples or documentation may be discarded or if they are to be shipped to Alder.

The Reserve Samples are only allowed to be used for investigational purpose by SANDOZ with prior written approval by Alder.   Alder may request Reserve Samples from SANDOZ by written request.  SANDOZ to ship samples [***], unless otherwise agreed, after receipt of Alder request.

 

Archive periods

	
Item
	
Period

	
[***]

	
[***]

	
[***]
	
[***]

	
[***]
	
[***]

	
[***]
	
[***]

Table 1: Storage periods for samples and documentation

7.Release of Products

7.1. Release for shipment – pre-requisites

The final release of a Batch requires BDS Specifications to be met.   [***]   Alder may perform concurrent review per a mutually agreed upon plan. A SANDOZ [***] will signify that the Batch is released in compliance with cGMP. SANDOZ will inform Alder [***] that a Batch has been Released and provide to Alder or its designee samples of the Batch [***] and the related Manufacturing Records (including the Certificates) [***] in accordance with CMA Clause 20(1) and (2).   Confidential documents will be exchanged with ALDER via secure e-mail or an appropriate exchange platform [***].

SANDOZ shall provide Alder with the related Manufacturing Records (including the Certificates) for the Batch as soon as possible after the Batch is Manufactured and [***] (CMA Clause 20(1).)

SANDOZ to respond [***] of receipt of Alder comments.  SANDOZ will work cooperatively with Alder to address any Alder comments and update the Batch Release documentation and Manufacturing Records accordingly, as required.  

In accordance with CMA Clause 20(3), [***] whichever occurs last (the “Start-review Date”), Alder or its representative(s) may, at Alder’s option, analyze and test each Batch and samples from each Batch and review the related Certificates and Manufacturing Records.  Any Customer Complaints by Alder that a Batch, or one of more samples in a Batch, is not conforming with the requirements under CMA Clause 18(1) (such BDS being referred to as “Non-conforming” BDS, and such non-conformity referred to as “Non-conformity”) 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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shall be delivered to SANDOZ in writing [***] after the Start-review Date of such Batch (or , in the case of latent Non-conformity that was not readily ascertainable by the testing of the BDS and review of the related Certificates, [***] after discovery of such latent Non-conformity), and such complaint being accompanied by supporting data for purposes of consideration and verification by SANDOZ. 

The procedures set out in Clause 20 of the CMA will apply to any complaints by Alder regarding Non-conformity.  The parties acknowledge and agree that the warranties set out in CMA Clause 18(1) apply to all BDS Manufactured under the CMA, regardless of whether SANDOZ, Alder or a Third Party test the BDS for conformity. 

For the avoidance of doubt, however, all of the BDS Specifications are required to be met in order to demonstrate that the BDS conforms to the requirements set out in CMA Clause 18(1), [***].  See Attachments H, I, and J 

[***] For the avoidance of doubt, the date for delivery of BDS Batches to Alder shall be based on SANDOZ Release and according to the provisions in the CMA. (Reference CMA Clauses 15(1) and (2).) 

7.2. Shipment under Quarantine

Shipment of BDS under quarantine, i.e. without meeting the pre-requisites for shipment as defined in section 7.1.,[***]  (Reference CMA Clause 15(1).) Alder will keep BDS under quarantine until SANDOZ and Alder’s formal disposition.  Alder reserves the right to further process the Batch, as long as the batch remains under quarantine, meets internal requirements and is under Alder’s QA control.  Alder will not release the Batch for distribution, sales, or intended use (e.g., use for human clinical purpose) until [***]  A Batch that has been shipped under quarantine shall be subject to all testing and quality assurance review requirements as SANDOZ and Alder normally require to enable subsequent full release, and for each Batch of BDS being in conformity with the requirements set forth in CMA Clause 18(1).  (Reference CMA Clause 15(1).)

8.Product Security

8.1. Waste Material 

Any waste material or packaging component bearing the Alder name must be defaced and/or incinerated by SANDOZ.  SANDOZ shall provide a proof of destruction certificate to Alder on request.

8.2. Counterfeiting

SANDOZ shall have a system in place that set out their counterfeit, theft,  diversion,  and economically motivated adulteration detection and avoidance system in relation to as BDS. SANDOZ shall notify Alder immediately in writing of any known incident or any suspicion of counterfeit, theft, diversion or adulteration of  BDS and shall help in any necessary investigation requested by Alder.

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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9.Post-Marketing Surveillance and Stability Testing

9.1. Stability Testing

Alder is responsible for maintaining a follow-up stability program for the Product under ICH conditions.

[***] and as requested by Alder and defined in a separate approved written sampling plan, SANDOZ is responsible for collecting samples designated for stability testing.  Stability samples shall be collected by SANDOZ in appropriate sample containers and volumes as specified by Alder, and SANDOZ shall make the samples available for shipment at the earliest date.  SANDOZ shall include temperature recording device with stability sample shipment.  Alder shall review shipment temperature at receiving site for acceptability.  SANDOZ shall make the samples available for shipment prior to the due date of the first stability test time point.

If a stability result is confirmed by Alder as an Out of Specification (OOS) result, Alder will notify SANDOZ where possible [***]. In the case of [***], Alder will notify SANDOZ [***]  SANDOZ shall perform a Manufacturing investigation for confirmed stability OOS results to determine if there is a Manufacturing root cause for the result and whether corrective or preventive actions should be taken to remedy the issue, and submit the investigation report to Alder in accordance with section 2.16.

9.2. Product Complaints

Alder is responsible for handling Product Complaints that are derived from the market (for commercial material), from clinical trials (for clinical material) and adverse drug events and shall reply to inquiries as promptly as possible. Alder shall provide applicable complaint information to SANDOZ [***]. SANDOZ shall [***] investigate Product Complaints and report results to Alder [***] unless reporting requirements dictate an earlier timing. If this time period is unable to be met, SANDOZ will notify Alder to arrange an agreed upon timeframe where an interim report can be evaluated to meet reporting requirements to regulatory authorities. Complaints of a critical nature [***] must be investigated [***] and interim results reported to Alder [***]

In the event that SANDOZ receives a Product Complaint which potentially impacts a Batch supplied to Alder, SANDOZ shall forward the complaint to Alder [***]

Alder, with SANDOZ cooperation, shall be responsible for responding to the FDA or other Regulatory Authority and filing any reports with the FDA or other Regulatory Authority concerning such reactions (including Drug Experience Reports) caused by the Product. 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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9.3. Adverse Events

Adverse events (Reference CMA 21. (6)) associated with potential product quality issue shall be assessed as Product Complaints per Section 9.2.

10.Terms and Expiration

This QUALITY AGREEMENT forms an integrated part of the CMA and shall come into force at sign-off by the parties hereto.

SANDOZ and Alder will periodically review this QUALITY AGREEMENT (including its Attachments) per review schedule defined per Alder procedures or more often in the event of a significant change to the process or systems, and the parties will amend this QUALITY AGREEMENT, in writing, as needed.  Any amendments to this QUALITY AGREEMENT core document will also be reviewed by SANDOZ and Alder legal representatives to ensure consistency with the commitments contained in the CMA and associated orders/scope of works/signed quotes/addenda.

This QUALITY AGREEMENT shall be terminated upon expiration or termination of the CMA.  Obligations that, by their nature, should survive the expiration or termination of this QUALITY AGREEMENT, such as ongoing regulatory requirements (including for example maintaining records and supporting Product Complaint investigations), shall survive the expiration or termination of this QUALITY AGREEMENT. 

11.DEFINITIONS

The following terms shall have the meanings assigned to them below for purposes of this QUALITY AGREEMENT.  Capitalized terms used but not defined in this QUALITY AGREEMENT shall have the meaning given in the CMA. 

 

		
	
Auxiliary Materials
	
Any material used for Manufacture, or for maintenance of equipment or buildings, which is not a raw or packaging material, e.g. lubricants, detergents, silicon rubber.

	
Annual Product Review (APR)
	
A reporting process by which written records required by 21CFR211.180(e)shall be maintained so that data therein can be used for evaluating, at least annually, the quality standards of the Product to determine the need for changes in Product specifications or manufacturing or control procedures. (Alder is responsible for submitting this report to the FDA).

	
Annual Product Quality Review (APQR)
	
A collection of data provided by SANDOZ [***] (to be established in subsequent quality agreements) presented in a clear format, that makes it possible to identify quality problems, deviations and trends and/or to substantiate consistent quality.

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Assets
	
Any asset that (i) is permanently affixed to a facility, and/or (ii) is not

capable of being easily moved from the facility and/or which (iii) is part of the permanent facility. Assets shall comprise the assets listed in Schedule 4 to this Agreement. (CMA Clause1 (1))

	
Biological Product Deviation Report (BPDR)
	
An FDA-reportable event reporting (according to 21 CFR 600.14) that represents a deviation from cGMP, applicable regulations, applicable standards, or established specifications that may affect the safety, purity, or potency of a product, or represents an unexpected or unforeseeable event that may affect the safety, purity or potency of that product, and occurs in the SANDOZ facility and involves a distributed biological product.

 

	
Changes
	
A planned alteration, replacement, or origination of a new item (e.g., Product, equipment, facility) or elimination of Specifications, methods, facilities, utilities, equipment, computer systems, master records or controls that are used for the manufacture, processing, packaging, or holding of Product.

	
Continuous Process Verification CPV
	
Third validation stage as continual assurance that the process remains in a state of control (the validated state) during commercial manufacture. A system or systems for detecting unplanned departures from the process as designed is essential to accomplish this goal.  SANDOZ refers to this as Ongoing Process Verification.

	
Critical Deviation

 

 
	
A deviation having [***].

A critical deviation refers to those deviations that are [***]

	
Critical Raw Material
	
A raw material that [***]. 

	
Critical Reagent
	
A reagent used [***]. Critical reagents are [***].

	
Major deviation
	
Those deviations have [***]

Those deviations that require [***].  If the deviation identifies [***].

	
Manufacturing Process Description Document
	
[***] manufacturing SOPs and [***] master batch records, describing the Process and covering all steps, from thaw of the cell bank vial to filling and labeling/packaging the BDS, and includes in-process controls, process parameters, and all the methods used to test the in-process and BDS respectively against the in-process controls and SANDOZ Release Specifications, as applicable (Reference CMA Clause 18(5))

	
Manufacturing Records
	
All documents relating to the Manufacture of a Batch, including manufacturing instructions, deviations, test results, out of specification results, investigations, bills of materials and Certificates, including Certificates of Analysis, as described with more particularity in this Quality Agreement.

	
Minor deviation
	
Any unplanned [***]

	
Master Cell Bank (MCB)
	
An aliquot of a single pool of cells that generally has been prepared from the selected cell clone under defined conditions, dispensed into multiple containers, and stored under defined conditions. The MCB is used to derive all Working Cell Banks.

	
Master Working Cell Bank (MWCB) –(SANDOZ) 
or Working Cell Bank (WCB) (Alder)
	
A culture of cells derived from the Master Cell Bank and intended for use in the preparation of production cell cultures.

	
Nonconformity
	
With respect to BDS, [***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Customer Complaint
	
Any written complaints by Alder that a Batch, or one or more samples in a Batch, is not conforming with the requirements under CMA Clause 18(1) 

	
Process
	
CMA Clause 1(1) "Process" means the series of processes, methods, tests and techniques by which the BDS is Manufactured from the ALD403 Cell Line, as described in detail in a manufacturing process description document for the process established at such facility, which shall be agreed by the Parties, and as defined in the Manufacturing Records, generated for such facility where the BDS is Manufactured, and “Processed” and “Processing” shall be interpreted accordingly. 

	
Product
	
CMA Clause 1(1) "Product" means the proprietary product known as ALD403, which is a recombinant protein having the amino acid sequence, and encoded by the nucleic acid constructs, described in

further detail on Schedule 1 to the Specifications Letter. Also known as eptinezumab.

	
Product Complaint
	
Any written, electronic, or oral communication that alleges deficiencies related to the safety, identity, strength, purity or quality of Product.  

	
Ongoing Process Verification (OPV)
	
Refer to CPV

	
Out of Expectation (OOE)
	
Out of Expectation results are testing results that, while not Out of Specification, they are atypical results when compared to expected and/or historical results and warrant further investigation. 

	
Out of Specification (OOS)
	
For the purpose of this Quality Agreement, Out of Specification results are testing results that do not meet the BDS Specification.  

	
[***]
	
[***]

	
Quality Event
	
Quality Events are distinguished from Deviations or OOS/OOE laboratory tests. Quality Events are results of the following processes: [***]

	
Re-analysis
	
An analysis performed during the [***] which may include testing of stock solutions, dilutions, vial contents, etc. derived from the preparation of the suspect sample. Re-analysis is performed as part of hypothesis testing in the [***]

	
Reference Sample
	
EU term synonymous with US term Reserve Sample. 

	
Reference Standard
	
A substance, used in routine laboratory analysis, which has been shown by an extensive set of analytical tests to be authentic material of established quality and purity.

	
Repeat Assay
	
An assay which is performed due to an invalidation of the prior assay (e.g. when an assay or sample result is determined to be invalid the next assay performance or sample analysis is considered a repeat analysis).

	
Reprocessing
	
Repeating process steps that are part of the established manufacturing procedure

	
Re-sampling
	
Additional testing on a new sample collected from the batch from a new sampling of the batch. A re-sample may be collected in the event that the original sample is suspected to not be representative or is confirmed to not be representative of the batch, or if none of the original sample remains.  The sampling scheme for the resample must be documented prior to re-sampling, in the OOS investigation report.

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Reserve Sample
	
US term synonymous with EU term Reference Sample. A sample of a batch of Starting Material, packaging material or product which is stored 

for the purpose of being analyzed should be need arise during the shelf life of the batch concerned. The sample quantity is an amount [***] 

	
Re-testing
	
Additional testing from the same sample as originally prepared, tested and from which the OOS result was obtained. 

	
Retest Date
	
The date when a material should be re-examined to ensure that it is still suitable for use.  

	
Rework
	
Performance of additional process steps that are different from the agreed manufacturing process.

	
Start-review Date
	
Delivery and Release of Batch and delivery of the related Certificates for the Batch and the related Manufacturing Records, whichever occurs last.

 

12.Version History (Core Document)

The table below documents the version history for the core document of the Alder-SANDOZ QUALITY AGREEMENT.  Each of the Attachments referenced in the core document are individual version controlled, with a version history and approval signatures. 

				
	
Ver.
	
Ver. Date
	
Changes
	
Reason for change

	
1.0
	
[***]
	
Initial version
	
Required by CMA.

	
2.0
	
[***]
	
[***]
	
[***]

[***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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13.APPROVALS (Core Document)

 

						
	
ALDER
	
 
	
 
	
 
	
SANDOZ
	
 

	
[***]
	
27 JULY 2018
	
 
	
 
	
[***]
	
20 JUL 2018

	
Signature
	
Date
	
 
	
 
	
Signature
	
Date

	
[***]

Alder BioPharmaceuticals, Inc.
	
 
	
 
	
 
	
[***]
Sandoz GmbH

 
	
 

	
 
	
 
	
 
	
 
	
[***]
	
20 JUL 2018

	
 
	
 
	
 
	
 
	
Signature
	
Date

	
 
	
 
	
 
	
 
	
[***]
Sandoz GmbH
	
 

	
[***]
	
26 JUL 2018
	
 
	
 
	
[***]
	
20 JULI 2018

	
Signature
	
Date
	
 
	
 
	
Signature
	
Date

	
[***]

Alder BioPharmaceuticals, Inc.
	
 
	
 
	
 
	
[***]
BTC Sandoz GmbH
	
 

	
 
	
 
	
 
	
 
	
 
	
 

 

 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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ATTACHMENT A: List of Liaisons

[***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Version History (Attachment A)

				
	
Version
	
Version Date
	
Changes
	
Reason for change

	
A-1
	
[***]
	
Initial version.
	
Required by CMA.

	
A-2
	
[***]
	
[***]
	
[***]

	
A-3
	
[***]
	
[***]
	
[***]

 

[***]

Approvals (Attachment A)

ALDERSANDOZ

		
	
[***]27 JULY 2018

SignatureDate

[***]
Alder BioPharmaceuticals, Inc.
	
[***]20. JULI 2018

SignatureDate

[***]
Sandoz GmbH

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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ATTACHMENT B: Table of Responsibilities

S=SANDOZA=Alder [***]

Version History (Attachment B)

				
	
Ver.
	
Ver. Date
	
Changes
	
Reason for change

	
B-1
	
[***]
	
Initial version.
	
Required by CMA.

	
B-2
	
[***]
	
[***]
	
[***]

	
B-3
	
[***]
	
[***]
	
[***]

[***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Approvals (Attachment B)

ALDERSANDOZ

		
	
[***]27 JULY 2018

Signature                             Date

[***]
Alder BioPharmaceuticals, Inc.
	
[***]20. JULI 2018

Signature                        Date

[***]
Sandoz GmbH

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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ATTACHMENT C: List of Approved Sub-Contractors

List of contract labs of Alder [***]

List of contract labs of SANDOZ [***]

Contract Lab codes [***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Version History (Attachment C)

				
	
Ver.
	
Ver. Date
	
Changes
	
Reason for change

	
C-1
	
[***]
	
Initial version.
	
Required by CMA.

	
C-2
	
[***]
	
[***]
	
[***]

 

[***]

Approvals (Attachment C)

ALDERSANDOZ

		
	
[***]27 JULY 2018

SignatureDate

[***]
Alder BioPharmaceuticals, Inc.
	
[***]20. JULI 2018

SignatureDate

[***]
Sandoz GmbH

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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ATTACHMENT D: ALD403 raw materials for use at [***] production scale[***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Version History (Attachment D)

				
	
Version
	
Version Date
	
Changes
	
Reason for change

	
D-1
	
[***]
	
Initial version.
	
Required by CMA.

	
D-2
	
[***]
	
[***]
	
[***]

	
D-3
	
[***]
	
[***]
	
[***]

[***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Approvals (Attachment D)

ALDERSANDOZ

		
	
[***]27 JULY 2018

SignatureDate

[***]
Alder BioPharmaceuticals, Inc.
	
[***]20. JULI 2018

SignatureDate

[***]
Sandoz GmbH

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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ATTACHMENT E: Release Requirements for [***] 

SANDOZ Release Requirements for [***]

Minimum requirements for 
Certificate of Analysis for 
[***]

[***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Listing of ALD403 [***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Version History (Attachment E)

				
	
Ver.
	
Ver. Date
	
Changes
	
Reason for change

	
E-1
	
[***]
	
Initial version
	
Required by CMA

	
E-2
	
[***]
	
[***]
	
[***]

	
E-3
	
[***]
	
[***]
	
[***]

[***]

Approvals (Attachment E)

ALDERSANDOZ

		
	
[***]27 JULY 2018

SignatureDate

[***]
Alder BioPharmaceuticals, Inc.
	
[***]20. JULI 2018

SignatureDate

[***]
Sandoz GmbH

 

 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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ATTACHMENT F: Min/Max doses for [***] ALD403

MEMORANDUM

Date:[***]

To[***]

From:[***]

Subject:AI.D403 Minimum & Maximum [***] Dosage for [***]

This memo documents the minimum & maximum [***] dosage of ALD403 that [***]

The minimum & maximum [***] dosages for ALD403 [***]

[***]

[***]

Cc.

[***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Version History (Attachment F)

				
	
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F-1
	
[***]
	
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F-2
	
[***]
	
[***]
	
[***]

 

[***]

Approvals (Attachment F)

ALDERSANDOZ

		
	
[***]27 JULY 2018

SignatureDate

[***]
Alder BioPharmaceuticals, Inc.
	
[***]20. JULI 2018

SignatureDate

[***]
Sandoz GmbH

 

 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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ATTACHMENT G: Storage condition / Shelf life [***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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[***]
	
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G-2
	
[***]
	
[***]
	
[***]

	
G-3
	
[***]
	
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Approvals (Attachment G)

ALDERSANDOZ

		
	
[***]27 JULY 2018

SignatureDate

[***]
Alder BioPharmaceuticals, Inc.
	
[***]20. JULI 2018

SignatureDate

[***]
Sandoz GmbH

 

 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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ATTACHMENT H: SANDOZ Release Specifications * [***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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[***]
	
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H-2
	
[***]
	
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H-3
	
[***]
	
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[***]

Approvals (Attachment H)

ALDERSANDOZ

		
	
[***]27 JULY 2018

SignatureDate

[***]
Alder BioPharmaceuticals, Inc.
	
[***]20. JULI 2018

SignatureDate

[***]
Sandoz GmbH

 

 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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ATTACHMENT I: Alder Release Specifications *[***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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[***]
	
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1-3
	
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[***]

Approvals (Attachment I)

ALDERSANDOZ

		
	
[***]27 JULY 2018

SignatureDate

[***]
Alder BioPharmaceuticals, Inc.
	
[***]20. JULI 2018

SignatureDate

[***]
Sandoz GmbH

 

 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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ATTACHMENT J: Additional Release Specifications *[***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Version History (Attachment J)

				
	
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[***]
	
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J-2
	
[***]
	
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[***]

	
J-3
	
[***]
	
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[***]

Approvals (Attachment J)

ALDERSANDOZ

		
	
[***]27 JULY 2018

SignatureDate

[***]
Alder BioPharmaceuticals, Inc.
	
[***]20. JULI 2018

SignatureDate

[***]
Sandoz GmbH

 

 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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ATTACHMENT K: Document Notification/Review/Approval Sheet

[***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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[***]
	
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[***]

Approvals (Attachment K)

ALDERSANDOZ

		
	
[***]27 JULY 2018

SignatureDate

[***]
Alder BioPharmaceuticals, Inc.
	
[***]20. JULI 2018

SignatureDate

[***]
Sandoz GmbH

 

 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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ATTACHMENT L: Critical Reagents and Reference Standards [***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Version History (Attachment L)

				
	
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[***]
	
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L-2
	
[***]
	
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[***]

	
L-3
	
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[***]

Approvals (Attachment L)

ALDERSANDOZ

		
	
[***]27 JULY 2018

SignatureDate

[***]
Alder BioPharmaceuticals, Inc.
	
[***]20. JULI 2018

SignatureDate

[***]
Sandoz GmbH

 

 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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ATTACHMENT M: BDS Labeling

[***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Version History (Attachment M)

				
	
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[***]
	
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M-2
	
[***]
	
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[***]

	
M-3
	
[***]
	
[***]
	
[***]

 

[***]

Approvals (Attachment M)

ALDERSANDOZ

		
	
[***]27 JULY 2018

SignatureDate

[***]
Alder BioPharmaceuticals, Inc.
	
[***]20. JULI 2018

SignatureDate

[***]
Sandoz GmbH

 

 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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ATTACHMENT N: Change Control Notification/Approval Requirement

[***]

Table 1: [***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Table 2: [***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Table 3:[***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Version History (Attachment N)

				
	
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N-1
	
[***]
	
[***]
	
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Approvals (Attachment N)

ALDERSANDOZ

		
	
[***]27 JULY 2018

SignatureDate

[***]
Alder BioPharmaceuticals, Inc.
	
[***]20. JULI 2018

SignatureDate

[***]
Sandoz GmbH

 

 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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ATTACHMENT O: SANDOZ biopharmaceutical manufacturing facilities applicable to ALD403

[***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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Version History (Attachment O)

 

				
	
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O-1
	
[***]
	
[***]
	
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Approvals (Attachment O)

ALDERSANDOZ

		
	
[***]27 JULY 2018

SignatureDate

[***]
Alder BioPharmaceuticals, Inc.
	
[***]20. JULI 2018

SignatureDate

[***]
Sandoz GmbH

 

 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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ATTACHMENT P: Sandoz Batch Release Support Information - Detailed Content Requirements

This Attachment specifies detailed content requirements to include as part of records of the Sandoz Batch Release Support Information. Refer to the core Quality Agreement for the complete list of records. [***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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P-1
	
[***]
	
[***]
	
[***]

 

[***]

Approvals (Attachment P)

ALDERSANDOZ

		
	
[***]27 JULY 2018

SignatureDate

[***]
Alder BioPharmaceuticals, Inc.
	
[***]20. JULI 2018

SignatureDate

[***]
Sandoz GmbH

 

 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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ATTACHMENT Q: Review of Batch Documentation - QC Test Results Documentation to be Provided with Batch Documentation [***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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[***]
	
[***]
	
[***]

 

[***]

Approvals (Attachment Q)

ALDERSANDOZ

		
	
[***]27 JULY 2018

SignatureDate

[***]
Alder BioPharmaceuticals, Inc.
	
[***]20. JULI 2018

SignatureDate

[***]
Sandoz GmbH

 

 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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ATTACHMENT R: Quality Agreement Core Document Change History [***]

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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R-1
	
[***]
	
[***]
	
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[***]

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ALDERSANDOZ

		
	
[***]27 JULY 2018

SignatureDate

[***]
Alder BioPharmaceuticals, Inc.
	
[***]20. JULI 2018

SignatureDate

[***]
Sandoz GmbH

 

 

 

[***] = Certain confidential information contained in this document, marked by brackets, is filed with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

73/73CONFIDENTIALofix-ex101_73.htm

 

Exhibit 10.1

 

TRANSITION AND RETIREMENT AGREEMENT

This Transition and Retirement Agreement (the “Agreement”) is entered into by and among Orthofix Medical Inc. (the “Company”) and Bradley R. Mason (the “Executive”) (collectively, the “Parties”).

WHEREAS, the Executive has, since March 2013, served as the President and Chief Executive Officer of the Company;

WHEREAS, the Parties have entered into a Change in Control and Severance Agreement, made and entered into as of November 1, 2016 (the “Change in Control and Severance Agreement”); 

WHEREAS, the Executive has received from the Company certain equity incentive awards (together, the “Equity Awards”) previously granted to the Executive with respect to the Company pursuant to award agreements between the Company and the Executive (together, the “Equity Award Agreements”); 

WHEREAS, capitalized terms used, but not defined, herein shall have the meaning given such terms in the Change in Control and Severance Agreement; and

WHEREAS, the Company and the Executive desire to set forth certain promises, agreements and understandings relating to Executive’s future retirement from the Company and the Company’s selection of a successor President and Chief Executive Officer. 

NOW, THEREFORE, upon execution and non-revocation of this Agreement, in exchange for the terms, conditions, and releases set forth below, the Parties agree as follows:

Effective Date

.  This Agreement shall become effective on the eighth (8th) day after the Company receives this Agreement and the Release attached hereto as Exhibit A (the “Release”) signed by the Executive (the “Effective Date”), provided that: (a) Executive does not revoke the Release within the seven (7) day period after he signs it; and (b) it is signed and delivered to the Company on or before February 25, 2019.  For the avoidance of doubt, the Release and the Supplemental Release, as defined below, are considered incorporated into and part of this Agreement.

Target Retirement Date and Separation Date

. 

(a)Executive’s last day of employment will be the business day prior to the day that the successor President and Chief Executive Officer commences employment with the Company (such date, the “Target Retirement Date”), or such earlier date if Executive’s employment is terminated prior to the Target Retirement Date pursuant to the terms of this Agreement.  Executive’s employment may be terminated in advance of the Target Retirement Date by the Company, with or without Cause, by the Executive with or without Good Reason (as modified by this Agreement) or due to the Executive’s death or Disability. Further, notwithstanding the foregoing, the Target Retirement Date shall be no later than October 31, 2019.  The date on which Executive separates from employment with the Company, regardless of whether such date is the Target Retirement Date or an earlier date, is referred to herein as the 

1

 

 

“Separation Date”.  During the period from the Effective Date through the Separation Date (the “Transition Period”), the Executive will remain an employee of the Company, the Change in Control and Severance Agreement will remain in effect except to the extent modified pursuant to this Agreement, and the Executive will, in addition to his other duties and responsibilities, assist in the transition of his duties as requested from time to time by the Company.  

(b)Effective as of the Separation Date, the Executive will resign his employment with the Company and from all offices, positions, directorships, chairmanships, and/or fiduciary responsibilities of any nature or description with the Company, its affiliates, and each of their respective subsidiaries, and each of their respective employee benefit plans.  

Transition Period Consideration

.  Provided that the Executive signs this Agreement, does not revoke it, and complies with all of its terms, during the Transition Period, the Company shall provide the Executive with the following:

(a)The Executive will continue to receive the Executive’s base salary in effect as of the Effective Date, payable in the normal course in accordance with the Company’s standard payroll practices, less applicable withholdings;

(b)The Company will pay Executive’s reasonable attorneys’ fees and expenses incurred since September 1, 2018, related to advising Executive with respect to his duties at the Company, his transition out of the Company, and this Agreement in an amount not to exceed fifteen thousand dollars ($15,000.00);

(c)The Executive will be eligible to continue to participate in the Company’s annual cash incentive program, health insurance and other employee benefit plans, to the same extent as he was eligible on the Effective Date and in accordance with the terms of such annual cash incentive program, health insurance and other employee benefit plans; 

(d)The Executive will be eligible to vest in any Equity Awards that vest in accordance with the current terms of the Equity Award Agreements during the Transition Period; and

(e)Provided the Executive continues to be employed on April 1, 2019, or if the Executive’s employment is terminated by the Company without Cause prior to April 1, 2019 (in which case it is understood that Executive would remain a service provider to the Company as of the grant date as a result of the consulting services described in Section 12 hereof), the Company will grant to the Executive on April 1, 2019 restricted stock units under the Company’s 2012 Long-Term Incentive Plan (pursuant to a form of grant agreement to be prepared and approved by the Compensation Committee of the Company’s Board of Directors) with a grant date Fair Market Value of $2,000,000, which restricted stock units will become fully vested and delivered on April 1, 2020 subject to (i) Executive’s remaining employed through the Target Retirement Date or otherwise being terminated by the Company without Cause prior to such Target Retirement Date, and (ii) Executive’s complying with the terms of the Consulting Agreement (as defined herein) through April 1, 2020. 

2

 

 

4.Separation Payments and Benefits.

(a)If the Executive’s employment terminates prior to the Target Retirement Date for any reason other than death, a termination by the Company without Cause or a termination by the Executive as a result of Disability (e.g., a voluntary retirement or resignation by the Executive or a termination for Cause by the Company), the Executive will be entitled to the payments and benefits, if any, as are set forth in the Change in Control and Severance Agreement and the Equity Award Agreements with respect to the applicable type of termination, and the Executive will not be entitled to the payments and benefits set forth in Section 4(b).  For the avoidance of doubt, if the Executive determines to terminate his employment at any time prior to the Target Retirement Date, provided circumstances constituting Cause do not exist, the Executive will be treated as though he terminated employment as a result of a Qualified Retirement, in which case the Executive shall not receive the payments and benefits set forth in this Agreement, but will receive the payments and benefits payable in connection with a Qualified Retirement determined in accordance with the terms of the Change in Control and Severance Agreement and the Equity Award Agreements.

(b)If the Executive remains employed through the Target Retirement Date or the Executive’s employment terminates prior to the Target Retirement Date as a result of death, a termination by the Company without Cause or a termination by the Executive as a result of Disability, subject to the Executive’s signing (or, in the event of Executive’s death, his duly authorized representative’s signing) a supplemental release in the form attached as Exhibit A (the “Supplemental Release”) on or within twenty-one (21) days after the Separation Date, and the Executive’s (or the Executive’s representative’s) not revoking the Supplemental Release within seven (7) days after signing it, in full and final satisfaction of any amounts due or which could be due to the Executive pursuant to the Change in Control and Severance Agreement, the Equity Award Agreements or otherwise, the Executive’s separation from service on the Separation Date will be treated as a Qualified Retirement by the Executive under the Change in Control and Severance Agreement as of the Separation Date and the Company will make and provide the following payments and benefits in connection with such Qualified Retirement (the “Transition Benefits”):

(i)(1) the Executive’s annual base salary due through the Separation Date, (2) any amounts or benefits owing to the Executive as of the Separation Date under the then applicable benefit plans of the Company, at the time such amounts or benefits are due (including any accrued vacation payable), (3) any amounts owing to the Executive for reimbursement of expenses properly incurred by the Executive prior to the Separation Date, which shall be subject to and paid in accordance with the Company’s expense reimbursement policy, (4) if, for the calendar year prior to the year during which the Separation Date occurs, Executive has achieved performance goals such that Executive has earned a bonus under the Company’s annual cash incentive program (the “Annual Cash Incentive Program”) and the Annual Cash Incentive Program bonus with respect to such prior calendar year has not yet been determined and/or paid, the amount of such bonus, payable at the same time as payments are made to other participants under the Annual Cash Incentive Program, and (5) a pro rata amount of the Annual Cash Incentive Program bonus, if any, with respect to the year during which the Separation Date occurs (based on the number of days the Executive was employed by the Company during such year of termination) based on the achievement of applicable performance 

3

 

 

goals for such year, payable during the following year at the same time as payments are made to other participants under such Annual Cash Incentive Program;

(ii)With respect to the Equity Awards:

(1) all of Executive’s outstanding unvested time-vesting restricted stock grants and stock options will become immediately vested and Executive will have four years from the Separation Date (or, if earlier, the expiration of the original term of the option) to exercise all outstanding options; and

(2) for outstanding unvested performance-vesting restricted stock and performance stock unit grants, Executive (1) will receive “Service” (as defined therein) credit through the date that he remains a consultant under the Consulting Agreement and (2) will be treated as having consummated a “Qualified Retirement” (as defined therein) thereunder on the date that such consulting services terminate.  

(iii)As soon as administratively practicable after the Supplemental Release has become effective and irrevocable, the Company shall reimburse the Executive on a monthly basis for the Executive’s monthly premium payments for COBRA health care coverage for the Executive and the Executive’s eligible dependents for the period from the Separation Date through December 31, 2019. 

(iv)The Transition Benefits will be subject to all applicable tax withholdings.  The Transition Benefits will be in lieu of any severance pay the Executive may be entitled to receive under any other severance plan or arrangement, individual written employment agreement (including Section 3 of the Change in Control and Severance Agreement), or other agreement relating to payment upon separation from employment.

For the avoidance of doubt, (i) it is the intent of the parties that the foregoing payments and benefits are in excess of the payment and benefits that Executive would receive in the event of a Qualified Retirement under the Change in Control and Severance Agreement and the Equity Awards absent the existence of this Agreement, and (ii) the Transition Benefits (and the related separation from employment contemplated by Section 4(b)) do not include any right to receive the Severance Amount described in Section 3 of the Change in Control and Severance Agreement or the CiC Severance Amount described in Section 4 of the Change in Control and Severance Agreement.  

5.Employee Covenants. Without limiting the generality of Section 11, the Executive acknowledges, and the Parties agree, that Section 9 (Restrictive Covenants) of the Change in Control and Severance Agreement will remain in full force and effect in accordance with its terms.   

No Further Compensation

.  The Executive acknowledges and agrees that, except with respect to the payments to be made and other benefits to be provided by the Company as set forth in this Agreement or otherwise pursuant to the Change in Control and Severance Agreement and the Equity Awards, (a) the Company has paid all salary, wages, bonuses, accrued vacation, commissions, and any and all other benefits and compensation that Executive has earned during his employment with the Company, (b) the Executive will not be 

4

 

 

eligible for, or entitled to receive, any other bonus amounts following the Separation Date, and (c) all benefits and perquisites of employment with the Company will cease as of the Separation Date and the Executive will not receive any further salary, bonuses, vacation, vesting of benefits, or other forms of compensation after the Separation Date from the Company, except as required by applicable law.  Nothing herein shall affect the Executive’s right to, and the Company shall continue to provide, indemnification, advance, defense, or reimbursement pursuant to any applicable D&O or similar policies, the Company’s bylaws, as they may be further amended, or applicable law. Furthermore, the Indemnity Agreement, dated August 1, 2018, between the Company and the Executive (the “Indemnification Agreement”) shall remain in full force and effect. 

Health Insurance

.  Executive’s group health insurance will cease on the last day of the month of the Separation Date.  At that time, Executive will be eligible to continue his group health insurance benefits, subject to the terms and conditions of the benefit plan, federal COBRA law, and, as applicable, state insurance laws.  Executive will receive additional information regarding his right to elect continued coverage under COBRA in a separate communication.  Executive is not entitled to any additional compensation or remuneration to cover health care costs beyond the reimbursement provided for in Section 4(b)(iii), above.  

Return of Company Property

.  On or before the Separation Date, the Executive shall return to the Company any and all Company records and any and all Company property in his possession or under his control, including without limitation manuals, books, blank forms, documents, letters, memoranda, notes, notebooks, reports, printouts, computer disks, computer tapes, source codes, data, tables or calculations and all copies thereof, documents that in whole or in part may contain any trade secrets, confidential information, or other proprietary or secret information of the Company, and all copies thereof, and keys, vehicles, access cards, personal computers, telephones and other electronic equipment belonging to the Company or any of its Affiliates.  

9.Compliance with Section 409A.  The terms of Section 8 of the Change of Control and Severance Agreement are incorporated into this Agreement.

10.Other Agreements.  The Change of Control and Severance Agreement, Equity Award Agreements, and the Indemnification Agreement will remain in full force and effect and will continue to bind Executive, except to the extent the terms of this Agreement contradict terms in the Change of Control and Severance Agreement or the Equity Award Agreements, in which event the terms of this Agreement shall control and shall operate as an amendment to such agreements as necessary.  Otherwise, this Agreement represents the entire agreement between the Parties regarding the matters addressed herein, and it supersedes and replaces all prior agreements, representations, negotiations, or discussions between the Parties, whether written or oral.

Voluntary Execution of Agreement

.  This Agreement is executed voluntarily and without any duress or undue influence on the part or behalf of the Parties hereto.  The Parties acknowledge that (a) they have read this Agreement; (b) they have had the opportunity to seek legal counsel of their own choice; (c) they understand the terms and consequences of this 

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Agreement and of the releases it contains; and (d) they are fully aware of the legal and binding effect of this Agreement.

12.Consulting Services.  For a period of twelve months following the Separation Date, the Executive agrees to provide reasonable transition consulting services to the Company, when and as reasonably requested by the Company, and will receive payment of $40,000 per month for such services.  Such services will include consulting with the Company in connection with historical information regarding the Company and providing certain introductions as requested by the Company, and assisting with other reasonable requests for information or other assistance that the Board of Directors of the Company or the Company may request. In connection with the foregoing, the Company and the Executive agree that on or about the Separation Date they will enter into a consulting agreement, materially consistent with the Company’s standard form, to memorialize the foregoing terms (the “Consulting Agreement”).

13.  Miscellaneous. 

(a)Except for injunctive relief as set forth in Section 9 of the Change of Control and Severance Agreement, the parties agree that any dispute or controversy arising under or in connection with this Agreement shall be resolved exclusively and finally by binding arbitration in Lewisville, Texas, before a single arbitrator, with such arbitration to be conducted in accordance with the rules of the American Arbitration Association’s Commercial Arbitration Rules then in effect.  Judgment on the arbitrator’s award may be entered by any court having jurisdiction.  The Company shall be responsible for its own attorneys’ fees, costs and expenses and shall pay to the Executive an amount equal to all reasonable attorneys’ and related fees, costs and expenses incurred by the Executive in connection with such arbitration and entry of judgment, but only if the arbitrator determines that the Executive prevailed on a material issue of the arbitration.  If there is any dispute between the Company and the Executive as to the payment of such fees and expenses, the arbitrator shall resolve such dispute, which resolution shall also be final and binding on the parties, and as to such dispute only, the burden of proof shall be on the Company.

(b)This Agreement shall be governed, construed and interpreted in accordance with the laws of the State of Texas (without regard to any provision of that State’s rules on the conflicts of law that might make applicable the law of a jurisdiction other than that of the State of Texas). Subject to Section 13(a) hereof, all actions or proceedings for injunctive relief arising out of this Agreement shall exclusively be heard and determined in state or federal courts in the State of Texas having appropriate jurisdiction for Collin County, Texas.  The parties expressly consent to the exclusive jurisdiction of such courts in any such action or proceeding and waive any objection to venue therein and any defense of forum non conveniens.  

(c)This Agreement may be executed in any number of counterparts, each of which, when executed by both parties to this Agreement shall be deemed to be an original, and all of which counterparts together shall constitute one and the same instrument.  

(d)The failure of either party hereto to enforce any right under this Agreement shall not be construed to be a waiver of that right, or of damages caused thereby, or of any other rights under this Agreement.  

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(e)This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives. 

(f)This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.  This Agreement shall bind any successor of or to the Company, its assets or its businesses (whether direct or indirect, by purchase, merger, consolidation or otherwise), in the same manner and to the same extent that the Company would be obligated under this Agreement if no succession had taken place.  In the case of any transaction in which a successor would not by the foregoing provision or by operation of law be bound by this Agreement, the Company shall require such successor expressly and unconditionally to assume and agree to perform the Company’s obligations under this Agreement, in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.  All rights under this Agreement are personal to the Executive and, without the prior written consent of the Company, shall not be assignable by the Executive otherwise than by the laws of descent and distribution.  This Agreement shall inure to the benefit of and be enforceable in the event of the Executive’s death or disability by the Executive’s legal representatives, heirs and legatees.

(g)The Executive and the Company acknowledge that the employment of the Executive by the Company is “at will” and may be terminated by either the Executive or the Company at any time.  Nothing contained in the Agreement shall affect such rights to terminate, provided, however, that nothing in this Section 13(g) shall prevent the Executive from receiving any amounts payable pursuant to Section 4 hereof in the event of a termination described in such Section.

(h)Notwithstanding anything in this Agreement to the contrary, in no event shall anything in this Agreement (whether in the Release, the Supplemental Release, or otherwise) be interpreted to limit or restrict the Executive’s right or ability to provide whistleblower information to the Securities and Exchange Commission regarding violations of the federal securities laws pursuant to Section 21F of the Exchange Act.

(i)Any provision in this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating or affecting the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

(j)Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid or when sent by express U.S. mail or overnight delivery through a national delivery service (or an international delivery service in the case of an address outside the U.S.) with signature required.  Notice to the Company shall be directed to the attention of the General Counsel of the Company at the address of the Company’s headquarters, and notice to the Executive shall be directed to the Executive at the Executive’s most recent personal residence on file with the Company.

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(k)The Company shall deduct from the amounts payable to the Executive pursuant to this Agreement all required withholding amounts and deductions, including but not limited to federal, state and local withholding amounts in accordance all applicable laws and regulations and deductions authorized by the Executive.  The Executive shall be solely responsible for and shall pay all taxes associated with the amounts payable under this Agreement.  

 

[Signature Page Follows]

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IN WITNESS WHEREOF, the Parties have executed or caused to be executed this Transition and Retirement Agreement as of the date written below.

			
	
Bradley R. Mason

/s/ Bradley R. Mason

Bradley R. Mason

 
	
 
	
Date: February 25, 2019

	
 
	
 
	
 

	
ORTHOFIX MEDICAL INC.

By: /s/ Ronald A. Matricaria

Ronald A. Matricaria

Chairman of the Board of Directors
	
 
	
Date: February 25, 2019

 

 

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EXHIBIT A

RELEASE AGREEMENT

You, for yourself, your spouse and your agents, successors, heirs, executors, administrators and assigns, hereby irrevocably and unconditionally forever release and discharge Orthofix Medical Inc., a corporation organized under the laws of the State of Delaware, and its direct and indirect subsidiaries (all such entities, collectively, the “Company”), its parents, divisions and affiliates and its and their current and former owners, directors, officers, stockholders, insurers, benefit plans, representatives, agents and employees, and each of their predecessors, successors, and assigns (collectively, the “Releasees”), from any and all actual or potential claims or liabilities of any kind or nature, including, but not limited to, any claims arising out of or related to your employment and separation from employment with the Company and any services that you provided to the Company; any claims for salary, commissions, bonuses, other severance pay, vacation pay, allowances or other compensation, or for any benefits under the Employee Retirement Income Security Act of 1974 (“ERISA”) (except for vested ERISA benefits); any claims for discrimination, harassment or retaliation of any kind or based upon any legally protected classification or activity; any claims under Title VII of the Civil Rights Acts of 1964, the Civil Rights Act of 1866 and 1964, as amended, 42 U.S.C. § 1981, the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Americans with Disabilities Act, 42 U.S.C. §1981, 42 U.S.C. § 1983, the Family Medical Leave Act and any similar state law, the Fair Credit Reporting Act and any similar state law, the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq., the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101, et seq., the Equal Pay Act and any similar state law, including the California Worker Adjustment and Retraining Notification Act, Cal. Labor Code § 1400, et seq., the California Fair Employment and Housing Act, Cal. Gov’t Code § 12940, et seq., California Government Code Section 12900 et seq. (which prohibits discrimination based on protected characteristics including race, color, religion, sex, gender, sexual orientation, marital status, national origin, language restrictions, ancestry, physical or mental disability, medical condition, age, and denial of leave), California Civil Code Section 51 et seq. (which prohibits discrimination based on age, sex, race, color, religion, ancestry, national origin, disability, medical condition, marital status, or sexual orientation), the California Family Rights Act of 1993, the California Equal Pay Law, Cal. Lab. Code § 1197.5, et seq. or any California wage payment law, any other section of the California Labor Code, any section of the applicable Order of the California Industrial Welfare Commission, as well as any amendments to any such laws; any claims for any violation of any federal or state constitutions or executive orders; any claims for wrongful or constructive discharge, violation of public policy, breach of contract or promise (oral, written, express or implied), personal injury not covered by workers’ compensation benefits, misrepresentation, negligence, fraud, estoppel, defamation, infliction of emotional distress, contribution and any claims under any other federal, state or local law, including those not specifically listed in this Release, that you, your heirs, executors, administrators, successors, and assigns now have, ever had or may hereafter have, whether known or unknown, suspected or unsuspected, up to and including the date of your execution of this Release.

 

For the purpose of implementing a full and complete release and discharge of the Releasees as set forth above, you acknowledge that this Release is intended to include in its effect, without limitation, all claims known or unknown that you have or may have against the Releasees which 

A-1

             

 

arise out of or relate to your employment, including but not limited to compensation, performance or termination of employment with the Company, except for, and notwithstanding anything in this Release to the contrary, claims which cannot be released solely by private agreement.  This Release also excludes any claims relating to any right you may have to payments pursuant to Sections 3 and/or 4 of the Transition and Retirement Agreement, entered into as of February 25, 2019, by and between the Company and you, any claim for workers’ compensation benefits and any rights you may have to indemnification or directors’ and officers’ liability insurance under the Company’s articles of association, certificates of incorporation or bylaws, any indemnification agreement to which you are a party or beneficiary or applicable law, as a result of having served as an officer, director or employee of the Company or any of its affiliates.  You further acknowledge and agree that you have received all leave, compensation and reinstatement benefits to which you were entitled through the date of your execution of this Release, and that you were not subjected to any improper treatment, conduct or actions as a result of a request for leave, compensation or reinstatement.

 

You further acknowledge that you have read Section 1542 of the Civil Code of the State of California, which provides as follows:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

 

You understand that Section 1542 gives you the right not to release existing claims of which you are not now aware, unless you voluntarily choose to waive this right.  Even though you are aware of this right, you nevertheless hereby voluntarily waive the right described in Section 1542 and any other statutes of similar effect, and elect to assume all risks for claims that now exist in your favor, known or unknown, arising from the subject matter of the Release.  You acknowledge that different or additional facts may be discovered in addition to what you now know or believe to be true with respect to the matters released in this Release, and you agree that this Release will be and remain in effect in all respects as a complete and final release of the matters released, notwithstanding any such different or additional facts. 

 

You affirm, by signing this Release, that you have not suffered any unreported injury or illness arising from your employment, and that you have not filed, with any federal, state, or local court or agency, any actions or charges against the Releasees relating to or arising out of your employment with or separation from the Company.  You further agree that while this Release does not preclude you from filing a charge with the National Labor Relations Board (“NLRB”), the Equal Employment Opportunity Commission (“EEOC”) or a similar state or local agency, or from participating in any investigation or proceeding with them, you do waive your right to personally recover monies or reinstatement as a result of any complaint or charge filed against the  Company with the NLRB, EEOC or any federal, state or local court or agency, except as to any action to enforce or challenge this Release, to recover any vested benefits under ERISA, or to recover workers’ compensation benefits.

 

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You acknowledge:

 

	
 
	
(a)
	
That you were provided twenty-one (21) full days during which to consider whether to sign this Release.  If you have signed this Agreement prior to the expiration of the twenty-one (21)-day period, you have voluntarily elected to forego the remainder of that period. 

 

	
 
	
(b)
	
That you have carefully read and fully understand all of the terms of this Release.

 

	
 
	
(c)
	
That you understand that by signing this Release, you are waiving your rights under the Age Discrimination in Employment Act, as amended by the Older Workers Benefit Protection Act, 29 U.S.C. § 621, et seq., and that you are not waiving any rights arising after the date that this Release is signed.

 

	
 
	
(d)
	
That you have been given an opportunity to consult with anyone you choose, including an attorney, about this Release.

 

	
 
	
(e)
	
That you understand fully the terms and effect of this Release and know of no claim that has not been released by this Release.  And, you further acknowledge that you are not aware of, or that you have fully disclosed to the Company, any matters for which you are responsible or which has come to your attention as an employee of the Company that might give rise to, evidence, or support any claim of illegal conduct, regulatory violation, unlawful discrimination, or other cause of action against the Company.

 

	
 
	
(f)
	
That you have made full and truthful disclosures to the Company’s compliance department regarding any misconduct (including any violations of federal securities laws) relating to the Company or its subsidiaries of which you are aware, and that you understand that notwithstanding anything herein or in any other agreement to the contrary, in no event shall you be prohibited or limited from my right to provide truthful information to or otherwise assist U.S. governmental authorities in any investigation regarding the Company (whether pursuant to Section 21F of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise), and in the event of such assistance, nothing herein or in any other agreement shall be deemed to conflict with my right to receive any award payable pursuant to Section 21F of the Exchange Act.

 

	
 
	
(g)
	
That these terms are final and binding on you.

 

	
 
	
(h)
	
That you have signed this Release voluntarily, and not in reliance on any representations or statements made to you by any employee or officer of the Company or any of its subsidiaries.

	
 
	
(i)
	
That you have seven (7) days following your execution of this Release to revoke it in writing, and that this Release is not effective or enforceable until after this seven (7) day period has expired without revocation.  If you wish to revoke this Release after signing it, you must provide written notice of your decision to revoke this Release to the Company, to the attention of the General Counsel of the Company at the address of the Company’s headquarters, by no later than 11:59 p.m. on the seventh calendar day after the date on which you have signed this Release. 

 

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PLEASE READ CAREFULLY.  THIS RELEASE INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

 

ACKNOWLEDGED AND AGREED

 

	
 
	
 
	
 

	
Bradley R. Mason
	
 
	
Date

 

 

 

A-4

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