Document:

blue-ex1024_115.htm

 

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

Exhibit 10.24

EXECUTION VERSION

Toll Manufacturing and Service Agreement

by and between

bluebird bio, Inc.

and 

APCETH Biopharma GmbH

November 18, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Toll manufacturing and service AGREEMENT

Between

	
1.
	
bluebird bio, Inc., a Delaware corporation with an office at 150 2nd Street, Third Floor, Cambridge, MA 02141, USA 

- “BBB” -,

and

	
2.
	
APCETH Biopharma GmbH, registered in the Commercial Register of the District Court of Munich under HR B 220566, with an office at Max-Lebsche-Platz 30, 81377 München, Germany

- “APCETH” -.

- BBB and APCETH shall also be referred to individually as “Party” and jointly as “Parties” –

and

	
3.
	
Apceth GmbH & Co. KG, registered in the Commercial Register of the District Court of Munich under HR HRA91052, with an office at Max-Lebsche-Platz 30, 81377 München, Germany

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Index

 

 

	
1.
	
 
	
DEFINITIONS
	
 
	
3

	
 
	
 
	
 
	
 
	
 

	
2.
	
 
	
SUBJECT OF THIS AGREEMENT AND ORDER OF PRECEDENCE
	
 
	
5

	
 
	
 
	
 
	
 
	
 

	
3.
	
 
	
PROVISION OF CLEAN ROOMS
	
 
	
6

	
 
	
 
	
 
	
 
	
 

	
4.
	
 
	
TERMS OF MANUFACTURE OF PRODUCT
	
 
	
6

	
 
	
 
	
 
	
 
	
 

	
5.
	
 
	
DELIVERY AND DELIVERY SCHEDULE
	
 
	
7

	
 
	
 
	
 
	
 
	
 

	
6.
	
 
	
PROVISION OF SUPPLIED MATERIALS
	
 
	
8

	
 
	
 
	
 
	
 
	
 

	
7.
	
 
	
CLINICAL SUPPLY PHASE.
	
 
	
8

	
 
	
 
	
 
	
 
	
 

	
8.
	
 
	
INFORMATION AND REGULATORY ASSISTANCE AND QUALITY CONTROL
	
 
	
9

	
 
	
 
	
 
	
 
	
 

	
9.
	
 
	
REMEDIES FOR DELAY OR DEFECTIVE PRODUCTS
	
 
	
10

	
 
	
 
	
 
	
 
	
 

	
10.
	
 
	
REPRESENTATIONS, WARRANTIES AND COVENANTS
	
 
	
11

	
 
	
 
	
 
	
 
	
 

	
11.
	
 
	
PAYMENTS AND PAYMENT TERMS
	
 
	
12

	
 
	
 
	
 
	
 
	
 

	
12.
	
 
	
JOINT STEERING COMMITTEE
	
 
	
13

	
 
	
 
	
 
	
 
	
 

	
13.
	
 
	
MINIMUM UTILIZATION
	
 
	
13

	
 
	
 
	
 
	
 
	
 

	
14.
	
 
	
INTELLECTUAL PROPERTY
	
 
	
13

	
 
	
 
	
 
	
 
	
 

	
15.
	
 
	
INSURANCE
	
 
	
15

	
 
	
 
	
 
	
 
	
 

	
16.
	
 
	
INDEMNIFICATION AND LIMITATION OF LIABILITY
	
 
	
15

	
 
	
 
	
 
	
 
	
 

	
17.
	
 
	
CONFIDENTIAL INFORMATION AND DATA PROTECTION
	
 
	
16

	
 
	
 
	
 
	
 
	
 

	
18.
	
 
	
TERM AND TERMINATION
	
 
	
17

	
 
	
 
	
 
	
 
	
 

	
19.
	
 
	
EFFECTS OF TERMINATION
	
 
	
18

	
 
	
 
	
 
	
 
	
 

	
20.
	
 
	
COMPLIANCE, ANTI-BRIBERY AND ANTI-CORRUPTION
	
 
	
18

	
 
	
 
	
 
	
 
	
 

	
21.
	
 
	
NOTICES
	
 
	
19

	
 
	
 
	
 
	
 
	
 

	
22.
	
 
	
GOVERNING LAW, ARBITRATION
	
 
	
19

	
 
	
 
	
 
	
 
	
 

	
23.
	
 
	
FINAL PROVISIONS
	
 
	
20

	
 
	
 
	
 
	
 
	
 

	
List of Schedules
	
 
	
22

 

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Introduction

 

	
(A)
	
APCETH is a company providing service solutions for the development and manufacture of cell‐based therapies. APCETH operates a multi-client production facility located at Haidgraben 5, 85521 Ottobrunn, Germany (the “Facility”).

	
(B)
	
BBB is a pharmaceutical company dedicated to gene therapy product development for potential usage as a therapy in a number of disease areas.  

	
(C)
	
BBB and apceth GmbH & Co. KG, having an office at Max-Lebsche-Platz 30, 81377 München, Germany, entered into a “Development and Manufacturing Service Agreement” dated [***](the “MSA”), pursuant to which BBB has engaged apceth GmbH & Co. KG for the performance of certain services regarding the development and manufacture of BBB’s gene therapy products, and on [***], BBB and apceth GmbH & Co. KG [***].

	
(D)
	
[***].

	
(E)
	
The Parties intend to extend the existing contractual service relationship between the Parties by entering into this “Toll Manufacturing and Service Agreement” (this “Agreement”), regarding the supply by APCETH to BBB of Product (as hereinafter defined). 

	
(F)
	
For the aforementioned purpose, the Parties have reached agreement on certain material terms summarized in a non-binding term sheet covering the envisaged terms of a Toll Manufacturing and Supply Agreement (the “Term Sheet”). This Agreement shall constitute the “Toll Manufacturing and Service Agreement” referenced in, and contemplated by, the Term Sheet.

	
(G)
	
In addition, (1) the Parties wish to [***], and (2) the Parties wish to terminate the MSA, and all outstanding work orders thereto, effective upon the Effective Date (as hereinafter defined).     

	
(H)
	
[***]. 

Against this background the Parties agree:

	
1.
	
DEFINITIONS

In this Agreement, the following terms with capitalized initial letter, including any grammatical variations, shall have the meanings as set forth below. Where the context so requires the singular includes the plural and vice versa; this applies in particular with respect to the Product:

	
1.1
	
“Access Fee” shall have the meaning as set forth in Section 11.1.

	
1.2
	
“Affiliate” shall mean, with respect to either BBB or APCETH, any corporation, company, partnership, limited liability company, business trust, incorporated association, joint stock company, joint venture and/or other organization or entity (“Entity”) which controls, is controlled by or is under common control with BBB or APCETH, as the case may be. For purposes of this definition, “control” with respect to an Entity shall mean the possession, either directly or indirectly through one (1) or more intermediaries, of the power to direct or cause the direction of the management and policies of such Entity, whether through the majority ownership of voting securities entitled to elect the directors or management of such Entity, the actual power to elect or direct the management of such Entity, or by contract or otherwise.

	
1.3
	
“Agreement” shall mean this Toll Manufacturing and Supply Agreement including all Schedules incorporated by reference, and executed Work Orders entered into in accordance with the terms hereto.

	
1.4
	
“APCETH Technology” shall mean the Technology owned by or licensed to APCETH (a) existing prior to the Effective Date, or (b) developed or obtained by APCETH independently of this Agreement and without reliance of the Confidential Information of BBB. 

	
1.5
	
“APCETH Improvement Technology” shall have the meaning as set forth in Section 14.3(c).

	
1.6
	
“Applicable Laws” shall mean (a) GMP, and (b) all other laws, rules and regulations that apply to the performance of either Party’s obligations under this Agreement.

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1.7
	
“Batch” shall mean the quantity of Product [***] and as may be further defined in the Specifications and Quality Agreement applicable to such Product, and the EU Good Manufacturing Practice Guideline.

	
1.8
	
“Batch Record” means the production record pertaining to a specific Batch of Product [***] that is specified in the applicable Work Order, the applicable Quality Agreement or otherwise mutually agreed to in writing by the quality representatives of the Parties.

	
1.9
	
“BBB Technology” shall mean the Technology owned by or licensed to BBB (a) existing prior to the Effective Date, or (b) developed or obtained by BBB independently of this Agreement and without reliance of the Confidential Information of APCETH. BBB Technology includes [***].

	
1.10
	
“BBB New Technology” shall have the meaning as set forth in Section 14.3(a).

	
1.11
	
“Business Day” shall mean any calendar day except Saturday, Sunday or any day on which commercial banks in Boston, Massachusetts or Munich, Bavaria are authorized or required by law to remain closed.

	
1.12
	
“Clean Room” shall mean [***].

	
1.13
	
“Clinical Supply Phase” shall have the meaning as set forth in Section 7.1.

	
1.14
	
“Confidential Information” shall have the meaning as set forth in Section 17.1.

	
1.15
	
“Data Protection Laws” shall have the meaning as set forth in Section 17.7.

	
1.16
	
“Defect” shall mean any deviation in the Batch delivered hereunder (in accordance with Section 5.2) from the quality owed pursuant to [***].

	
1.17
	
“Delivery Schedule” shall have the meaning as set forth in Section 5.4. 

	
1.18
	
“Discloser” shall have the meaning as set forth in Section 17.1. 

	
1.19
	
[***].

	
1.20
	
“Effective Date” shall have the meaning as set forth in Section 18.1.

	
1.21
	
[***]. 

	
1.22
	
“Extension Date” shall be [***]. 

	
1.23
	
“Facility” shall have the meaning as set forth in Recital A.

	
1.24
	
“Forecast” shall have the meaning as set forth in Section 5.3.

	
1.25
	
“GMP” or “Good Manufacturing Practice” shall mean [***]. 

	
1.26
	
[***].

	
1.27
	
“IMPD” shall mean Investigational Medicinal Product Dossier.

	
1.28
	
“Insolvency Event” shall mean, with respect to a Party, that such Party (a) has an involuntary petition in bankruptcy filed against it which is not challenged within [***] or dismissed within [***]; (b) seeks, consents to or does not contest the appointment of a receiver, custodian or trustee, preliminary insolvency administrator, insolvency administrator or of a similar appointee, for itself or for all or any part of its property; (c) files a petition seeking relief under the bankruptcy, insolvency, arrangement, reorganization or other debtor relief laws of any competent jurisdiction; (d) gives notice to any governmental or judicial body of insolvency or pending insolvency; (e) becomes "insolvent", i.e. illiquid and/or over indebted, as that term is defined under Applicable Laws; or (f) makes an assignment for the benefit of creditors or takes any other similar action for the protection or benefit of creditors.

	
1.29
	
“Marketing Authorization” shall mean the marketing authorizations submitted or granted, or expected to be submitted or granted, and required for the marketing and sale of the Product in the European Union, the European Economic Area, or any country within the European Union or the European Economic Area as of the Effective Date and as may join the European Union or the European Economic Area following the Effective Date.

	
1.30
	
“Minimum Utilization Requirement” shall have the meaning as set forth in Section 13. 

	
1.31
	
“MSA” shall have the meaning as set forth in Recital C. 

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1.32
	
[***].

	
1.33
	
“Patient Information” shall have the meaning as set forth in Section 17.7. 

	
1.34
	
“Product” shall mean the autologous cells transduced with a defined lentiviral vector suspended in cryopreservative solution in the final immediate container [***].

	
1.35
	
[***].

	
1.36
	
[***].

	
1.37
	
“Production Scenario” shall have the meaning as set forth in Section 4.2.

	
1.38
	
“Production Year” shall mean a period of twelve (12) consecutive months, commencing on the Supply Initiation Date, and each subsequent twelve (12) month period.

	
1.39
	
“Qualified Person” shall mean a qualified person in accordance with [***].

	
1.40
	
“Quality Agreement” shall mean an agreement between the Parties executed before the Effective Date, and amended from to time, determining the roles and responsibilities of the Parties in relation to the manufacture of the Product, as well as details, Specifications, quality requirements and other requirements (including but not limited to GMP) applicable to the Supplied Material and the manufacture of the Product by APCETH. The Quality Agreement shall be incorporated herein by reference.

	
1.41
	
“Recipient” shall have the meaning as set forth in Section 17.1.

	
1.42
	
[***].

	
1.43
	
“Supplied Material Delivery Schedule” shall have the meaning as set forth in Section 6.1.

	
1.44
	
“Supplied Materials” shall have the meaning as set forth in Section 6.1.

	
1.45
	
“Supply Initiation Date” shall be [***]. 

	
1.46
	
“Technology” shall mean any intellectual property right including (without limitation) patents, patent applications, supplementary protection certificates, utility models, database rights, rights in design topography and rights (whether or not any of these rights can be registered and including applications and the right to apply for registration of any such rights) and all data, inventions (whether or not patentable), documentation, regulatory submissions, specifications, know‐how, trade secrets, methods, techniques, and all other intellectual property rights in the United States, Germany, and throughout the world, including Confidential Information. 

	
1.47
	
“Technology Transfer” shall have the meaning as set forth in Section 14.5. 

	
1.48
	
“Term Sheet” shall have the meaning as set forth in Recital F.

	
1.49
	
“Third Party” shall mean any person or Entity other than the Parties and their Affiliates.

	
1.50
	
“Work Order” shall mean the written order, executed from time to time, referencing this Agreement and setting forth each Party’s responsibilities with respect to the performance of services under this Agreement. As each subsequent Work Order shall be incorporated by reference and made a part of this Agreement. The initial Work Orders under this Agreement are attached hereto as Appendices 1 through 3. 

	
1.51
	
“Work Order Fees” shall have the meaning as set forth in Section 11.6.

	
2.
	
SUBJECT OF THIS AGREEMENT AND ORDER OF PRECEDENCE

	
2.1
	
On the basis of the terms of this Agreement, APCETH shall provide services to BBB, as the Parties shall agree in an executed Work Order from time to time, including (a) the manufacture of Products in the Clean Rooms, and (b) any development services or technology transfer services. Work Orders covering the manufacture of Products as initially produced under this Agreement as set forth under Section 1.34, that utilize BBB’s reserved production capacity in accordance with the terms and conditions of this Agreement shall not require the separate consent or signature of APCETH, and shall be invoiced by APCETH to BBB [***]. Work Orders covering development services, technology transfer services, or manufacture of Products other than such initially produced under this Agreement as set forth under 

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Section 1.34, such services shall be separately agreed to by the Parties on such executed Work Order and invoiced separately by APCETH to BBB. Such executed Work Orders (whether covering the manufacture of Product or otherwise) are essential parts of this Agreement and incorporated herein by reference. The Schedules attached to this Agreement are essential parts of this Agreement and incorporated herein by reference. In the event of contradictions or inconsistencies between this Agreement, its Schedules, including the applicable Quality Agreement, or any Work Order, the following order of precedence applies: (a) the main part of this Agreement, (b) the applicable Quality Agreement (including its attachments and references), (c) the applicable Work Order, and (d) the other Schedules; provided, however, the Quality Agreement shall prevail over the main part of this Agreement in matters of determining the Specifications and other quality or process requirements applicable to Product or its manufacture. 

	
2.2
	
Any Affiliate of BBB (a “BBB Affiliate”) may engage APCETH to perform services on behalf of itself or BBB, or another BBB Affiliate, and may utilize the reserved production capacity under Section 4.2 for the manufacture of Product, and may directly engage APCETH by executing a Work Order, provided that BBB shall have included each such Affiliates’ manufacturing requirements to the Forecast in accordance with Section 5.3 and have indicated in such Forecast to which BBB Affiliate each such Batch is assigned. For such Work Orders covering the manufacture of Product, such BBB Affiliate (in the place of BBB) shall directly provide APCETH with the applicable Supplied Materials and shall take title of the resulting Batch directly from APCETH. 

	
2.3
	
[***].

	
2.4
	
[***].

	
3.
	
PROVISION OF CLEAN ROOMS

	
3.1
	
Responsibility for the Set‐Up. APCETH shall make available and exclusively dedicate to BBB, unless provided for otherwise in Section 3.2 below, the Clean Rooms in the Facility for clinical and commercial supply of Products. The Clean Rooms shall be in accordance with the design and specifications as set forth in the Clean Room Specification attached to this Agreement as Schedule 1. The Clean Rooms shall be in a state ready for manufacture of the Product, which means fully equipped, maintained, validated and with a sufficient number of qualified and trained staff in accordance with BBB’s reserved production capacity according to the elected Production Scenario as provided in Section 4.2. APCETH shall ensure that the Clean Rooms will meet all statutory and regulatory requirements applicable to clean rooms for pharmaceutical production, [***]. 

	
3.2
	
Dates of provision. 

	
 
	
(a)
	
Availability of [***]. Beginning on the Supply Initiation Date, APCETH shall [***].

	
 
	
(b)
	
Availability of [***]. Beginning on the Extension Date, APCETH shall [***].

	
3.3
	
Maintenance. APCETH shall be responsible for properly maintaining the Clean Rooms. The Parties acknowledge and agree that, in order to enable APCETH to perform maintenance and/or validation activities in the Facility [***]. 

	
3.4
	
Change of Clean Room Specifications. All changes required of the Facility (e.g., due to regulatory changes, process changes requested by BBB, or the purchase of additional equipment required for Production Scenario II) in connection with the manufacturing of the Products shall be discussed by the Parties and the Parties shall agree in writing to any such expenses to be charged separately. For the avoidance of doubt, APCETH shall (a) implement any changes to the Facility having an actual or potential effect on the manufacture of the Product only with BBB’s prior written approval, and (b) bear the costs of any changes to the Facility and/or the Clean Rooms requested by APCETH, if such changes are not based on any legal or regulatory requirements.

	
4.
	
TERMS OF MANUFACTURE OF PRODUCT 

	
4.1
	
General. APCETH shall manufacture the Product in accordance with (a) this Agreement, (b) the applicable Work Order, (c) the applicable Quality Agreement, including the applicable Specifications, (d) any IMPD of the respective country and/or the Marketing Authorizations applicable to the Product, (e) GMP, and (f) all other Applicable Laws. 

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4.2
	
Capacity and Production Scenarios. The reserved production capacity of the Clean Rooms, production shifts per calendar week and the minimum amount of Batches to be delivered by APCETH is determined by the Production Scenario elected by BBB (“Production Scenario”). The number of Batches to be delivered under a given Production Scenario is established with consideration to the anticipated [***] and the production process utilized as of the Effective Date for the Products initially produced under the Agreement, as attached hereto as Schedule 2. [***]. 

	
 
	
(a)
	
[***]. 

	
 
	
(b)
	
[***].

	
 
	
(c)
	
[***].

	
 
	
(d)
	
[***]. 

	
 
	
(e)
	
Process Improvements. The Parties currently envisage to improve the manufacturing process for the Products in order to reduce processing times resulting in an increased output of Batches per calendar week. If the Parties mutually agree that the currently envisaged improved process has been successfully established at APCETH’s Facility, (i) [***], and (ii) [***]. 

	
 
	
(f)
	
[***].

	
4.3
	
Subcontracting. APCETH shall not subcontract any of the works or services to be performed by APCETH under this Agreement to its Affiliates or Third Parties without the prior written consent of BBB (not to be unreasonably withheld). Any consent given by BBB shall require that the agreements between APCETH and such Affiliates or Third Parties are made in writing and substantially correspond to the terms set forth in this Agreement. APCETH shall not be responsible for any delays of the works or services to be performed by APCETH under this Agreement resulting from BBB unreasonably withholding its consent to a subcontract under this Agreement. [***]. APCETH shall remain primarily liable for the performance of its obligations under this Agreement, shall be solely responsible for costs, expenses, damages, or losses of any nature arising out of such performance as if such performance had been provided by APCETH itself under this Agreement.

	
5.
	
DELIVERY AND DELIVERY SCHEDULE

	
5.1
	
Testing by APCETH. Before delivery to BBB, or its designee, (a) each Batch manufactured under this Agreement shall be sampled and tested by APCETH against the Specifications, (b) APCETH shall review the Batch Records and (c) the Qualified Person of APCETH shall assess whether the manufacturing process has taken place in compliance with the Specifications and release such Batch for delivery to BBB, or its designee, all in accordance with the Quality Agreement. BBB may review the Batch Records for each Batch manufactured under this Agreement before release for delivery to BBB as set forth in the applicable Quality Agreement

	
5.2
	
Terms of delivery. The delivery of each Batch shall be [***].

	
5.3
	
Forecasts. At the beginning of each Production Year and [***] thereafter, APCETH shall provide to BBB a schedule setting out the anticipated [***] for a [***], which shall be binding upon the Parties. BBB shall provide APCETH with a [***] forecast (“Forecast”) for its requirements of [***]. 

	
5.4
	
Delivery Schedule. The binding delivery dates for a Batch shall be determined in a delivery schedule [***]. 

	
5.5
	
Incoming Controls; Determination of Defective Product. 

	
 
	
(a)
	
Concurrently with delivery of a Batch, APCETH shall provide BBB with the delivery documents as required by the applicable Quality Agreement. In case of any disagreement between the Parties as to whether a Batch conforms to the Specifications, Section 5.5(c) applies.  

	
 
	
(b)
	
Without limiting BBB’s rights under Section 5.5(a) above, upon receipt of a Batch at its final destination, BBB (itself or through the relevant BBB Affiliate or designated Third Party) shall [***].

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(c)
	
If there is a difference of opinions between the Parties on whether or not (i) a unit of Product or a Batch is Defective, or (ii) any Defect arose due to Defective Supplied Materials, the Parties shall compare and discuss all relevant existing test results. The quality assurance representatives of both Parties shall attempt in good faith try to resolve the discrepancy. If the Parties do not come to a consensus within [***], they shall agree upon a [***].

	
 
	
(d)
	
Should a part of a Batch reveal a Defect, such Batch shall be deemed to be Defective as a whole. [***]. 

	
6.
	
PROVISION OF SUPPLIED MATERIALS

	
6.1
	
Supplied Materials. BBB (itself or through the relevant BBB Affiliate) shall provide APCETH with the required starting material for the production of Product, including mobilized peripheral blood from patients and lentiviral vector as further specified in the Quality Agreement (the “Supplied Materials”). BBB shall provide APCETH with a proposed delivery schedule for Supplied Materials (“Supplied Material Delivery Schedule”), which shall be in accordance with the Forecast provided to APCETH and the present stock of released Supplied Material at APCETH. BBB and its Affiliates shall have the right to request in writing from APCETH on a [***] basis an account of its remaining stock of Supplied Material available for the production of Product. 

	
6.2
	
Retention of Title. BBB shall at all times retain title to the Supplied Materials provided by it, and to the extent that any of the Supplied Material is processed (including through manufacturing of the Product), BBB shall be deemed to be the manufacturer of the processed material within the meaning of § 950 Civil Code (Bürgerliches Gesetzbuch – BGB) and shall immediately acquire ownership in such processed material. To the extent that BBB’s Supplied Material is blended, combined or processed with other substances owned by APCETH, BBB shall immediately acquire co-ownership in such product and APCETH hereby assigns its co-ownership share to BBB. BBB hereby accepts such assignment. Where the Supplied Materials have not already been labelled by BBB, APCETH shall clearly label BBB’s Supplied Material and any product derived from the Supplied Material as the property of BBB. For the avoidance of doubt, the labelling of a visual code that can be traced by APCETH’s ERP systems (material management system) will be sufficient to fulfil such obligation. APCETH, at BBB’s request, shall cooperate with BBB in securing and filing any necessary statements or documents to preserve and evidence BBB’s ownership of and security interest in BBB’s Supplied Material and any product derived from the Supplied Material in any jurisdiction as reasonably requested by BBB. 

	
6.3
	
Storage, Use and Handling. APCETH shall store and handle the Supplied Material in accordance with the Quality Agreement and any written instructions by BBB. APCETH shall use such Supplied Materials only for manufacturing the Product in accordance with the terms of this Agreement and the Quality Agreement. APCETH undertakes not to sell or assign such Supplied Materials without BBB’s prior written consent. APCETH shall not use the Product(s) and/or the Supplied Materials in any in vivo experiments on human subjects or otherwise use the Product and/or the Supplied Materials for any other purpose.

	
7.
	
CLINICAL SUPPLY PHASE. 

	
7.1
	
Until the first grant of Marketing Authorization for a Product in the European Union or the European Economic Area, the Clean Room(s) will be used exclusively for clinical supply of the Products (“Clinical Supply Phase”). During the Clinical Supply Phase, the following provisions shall apply notwithstanding anything to the contrary set forth in this Agreement:

	
 
	
(a)
	
For scheduling purposes, BBB will share with APCETH at least [***] outlook on planning activities;

	
 
	
(b)
	
With respect to the Forecast to be provided by BBB pursuant to the second sentence of Section 5.3, BBB shall provide a [***] forecast of its requirements of production shifts for clinical supply, which shall be binding upon the Parties; 

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(c)
	
BBB shall inform APCETH on its filing strategy in the European Union and the European Economic Area for the application of the Marketing Authorization for each Product prior to the first grant of Marketing Authorization, including the envisaged timeline and the expected down-time of production until the commencement of the commercial supply. During the last [***] of such down-time leading to the commercial supply of the Product, the Parties shall agree on at least [***] to maintain the training status of APCETH’s personnel and the readiness of the Facility;

	
 
	
(d)
	
BBB shall inform APCETH in writing of the anticipated launch of the commercial supply of a Product at least [***] before such date, and no later than [***]; and  

	
 
	
(e)
	
APCETH shall obtain any required licenses for commercial manufacture of a Product before the submission by BBB of the application for Marketing Authorization of such Product, provided that BBB has timely provided APCETH with all relevant information and documentation required therefore, in particular the IMPD of the respective country or the Marketing Authorization of such Product.

	
7.2
	
Following the Clinical Supply Phase, BBB shall provide APCETH with information described in Section 7.1(d) for any Products prior to such Products’ first grant of Marketing Authorization.

	
8.
	
INFORMATION AND REGULATORY ASSISTANCE AND QUALITY CONTROL

	
8.1
	
Information. APCETH shall make available to BBB upon BBB’s request, copies of all relevant documentation and information resulting from the manufacture and supply of Products in order to enable BBB to evaluate the status of the Product and to meet any statutory or regulatory requirements necessary for the Product, such documentation and information to include the date of manufacture and the Batch number, a summary of results of the in‐process controls, quality control and release documentation, including a certificate of analysis and a certificate of compliance for the Product. BBB shall make available to APCETH the relevant sections of the approved IMPD of the respective country and/or Marketing Authorization for the Products and any updates thereof in a timely manner to meet any statutory or regulatory requirements for the manufacturing, quality control and release of the Product in the Clean Rooms. 

	
8.2
	
Regulatory Assistance. APCETH shall provide commercially reasonable support for all regulatory activities related to the manufacture of the Product, including any updates to the CMC (Chemistry, Manufacturing, and Controls) part of the Marketing Authorization dossier and/or other documentation or information relevant for obtaining, updating and maintaining the Marketing Authorizations. APCETH is obliged to support and allow any pre‐approval inspection of the Facility required by any competent governmental authority, or any “mock audit” as part of pre-approval preparations and protocol. APCETH may charge BBB for its regulatory assistance under this Section 8.2 at [***].

	
8.3
	
Regulatory Inspections. APCETH will permit BBB or its designees to be present and participate in any visit or inspection by any regulatory authority of the Facility which solely relates to any Product or the manufacturing process of the Product. For the avoidance of doubt, this shall not include any visit or inspection related to other products manufactured at APCETH or the general GMP inspection by the regulatory authority. APCETH shall notify BBB promptly if a regulatory authority requests permission to inspect any Clean Room made available to BBB as set forth in Section 3.2 and/or any of APCETH’s records or documents related to APCETH’s performance under this Agreement. Upon notification of an inspection, APCETH shall promptly notify BBB of the date and time of such inspection and allow BBB to assist in the preparation for such inspection by a regulatory authority. APCETH will provide [***] notice to BBB, or as may be otherwise provided in the Quality Agreement, if the purpose of any such visit or inspection relates to or might affect the manufacture of Product, provided that the visit or inspection was announced to APCETH in advance with sufficient notice. APCETH agrees to provide BBB with copies of all regulatory authority documentation including but not limited to correspondence, statements, warnings, enforcement actions, pleadings, summons, forms and records that APCETH receives as a result of or in anticipation of an inspection of the Clean Rooms. APCETH agrees to promptly notify BBB of any findings resulting from any inspection by a regulatory authority relating to the manufacture of Product, to take any necessary corrective action within the timelines set by the relevant authority within [***] and to provide copies of any relevant correspondence to BBB within [***] after submission, or as may be otherwise provided in the Quality Agreement.

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8.4
	
Audits. APCETH shall, on reasonable prior notice unless stated otherwise by Applicable Laws, allow BBB and/or its designee(s) to perform quality audits in connection with the manufacture of the Product, at regular business hours and upon [***] prior notice, and otherwise permit BBB and/or its designee(s) (reasonably acceptable to APCETH) access to the Facility in accordance with the applicable provisions of the Quality Agreement.

	
8.5
	
Permits. APCETH shall obtain and maintain during the term of this Agreement, [***], any Facility-related or Clean Room-related regulatory approvals and any other permits necessary for the performance of the manufacturing services by APCETH under this Agreement, excluding the Marketing Authorizations and any other Product-specific approvals for which BBB shall be responsible at BBB`s expense. At BBB’s request, APCETH shall provide BBB with copies of all granted regulatory approvals and any other permits and submissions to regulatory and/or other governmental authorities related to the manufacture of the Product. 

	
8.6
	
Product Complaints. If either Party becomes aware of product complaint information related to the Products from its Affiliates or Third Parties, it shall forward this information to the other Party as soon as possible, however no later than [***] after receipt of the information, as further detailed in the Quality Agreement. Information on product complaints shall be forwarded as it has been received, without screening, selection or processing. APCETH shall cooperate with any reasonable requests received from BBB on any reply to any complainant. 

	
8.7
	
Product Recalls. Each Party shall provide to the other Party within [***] any data or information that could result in a recall of the Product, in accordance with the procedure defined in the Quality Agreement. Any decision for a recall of Product will be taken by the Party as defined in the Quality Agreement, and the responsibility for any communication with Third Parties remain with BBB. 

	
8.8
	
Waste Disposal. The generation, collection, storage, handling, transportation, movement and release of hazardous materials and waste generated in connection with the manufacture of Product will be the responsibility of APCETH at [***]. Without limiting any other applicable requirements, APCETH will prepare, execute and maintain, as the generator of waste, all licences, registrations, approvals, authorizations, notices, shipping documents and waste manifests required under Applicable Laws. 

	
8.9
	
Safety Procedures. APCETH will be solely responsible for implementing and maintaining health and safety procedures for the performance of manufacturing activities and for the handling of any materials or hazardous waste used in or generated by such manufacturing activities. APCETH, in consultation with, BBB will develop safety and handling procedures for Product; provided, however, that BBB will have no responsibility for APCETH ́s health and safety program. 

	
8.10
	
Quality Agreement. All further provisions regarding audits and inspections, Product complaints and recall management are set forth in the Quality Agreement applicable to the Products. The Parties acknowledge and agree that no Products shall be manufactured under this Agreement until the applicable Quality Agreement is effective.

	
9.
	
REMEDIES FOR DELAY OR DEFECTIVE PRODUCTS

	
9.1
	
Provision of Clean Rooms.

	
 
	
(a)
	
In the event of APCETH’s breach of Sections 3.1 through 3.3, APCETH shall [***].

	
 
	
(b)
	
If such failure results in [***], BBB shall be entitled to:

	
 
	
(i)
	
[***]

	
 
	
(ii)
	
[***].

	
 
	
(c)
	
 [***]. 

	
9.2
	
Defective Batch

	
 
	
(a)
	
In the event of a Defective Batch, [***]: 

	
 
	
(i)
	
[***]

	
 
	
(ii)
	
[***].

page 10

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(b)
	
[***]. 

	
 
	
(c)
	
BBB shall, at APCETH’s reasonable discretion and following APCETH’s reasonable instructions, either return or dispose of any Defective Batch under Section 9.2(a) or Batch suspected to contain a Defect under Section 9.2(b), and the Parties shall handle such Batches in accordance with the applicable Quality Agreement and in case of a Recall in accordance with Section 8.7. 

	
 
	
(d)
	
[***].

	
9.3
	
Failure to Deliver

	
 
	
(a)
	
In the event a Batch is not released in accordance with the Delivery Schedule, [***].

	
 
	
(b)
	
If a Batch is not released in accordance with the Delivery Schedule due to [***].

	
 
	
(c)
	
[***]. 

	
10.
	
REPRESENTATIONS, WARRANTIES AND COVENANTS

	
10.1
	
APCETH Representations and Warranties.

APCETH hereby represents and warrants to BBB by way of an independent warranty according to Article 311 Civil Code (selbstständiges Garantieversprechen i. S. d. § 311 BGB) that,

	
 
	
(a)
	
APCETH has the full power and right to enter into this Agreement, and that there are no obligations, agreements, assignments, licenses, encumbrances or rights of any kind held by other parties, private or public, that are inconsistent with the provisions of this Agreement;

	
 
	
(b)
	
APCETH is the lawful owner of the Facility;  

	
 
	
(c)
	
the Clean Rooms will be in accordance with the specifications as required by Section 3 and set forth in the Clean Room Specifications attached to this Agreement as Schedule 1; 

	
 
	
(d)
	
APCETH, to the best of its knowledge, it and its Affiliates, approved subcontractors, and each of their respective officers and directors, as applicable, and any person used by APCETH, and its Affiliates, subcontractors to perform services under this Agreement: (i) have not been debarred and are not subject to a pending debarment pursuant to Section 306 of the United States Food, Drug and Cosmetic Act, 21 U.S.C. § 335a; (ii) are not disqualified by any government or regulatory authorities from performing specific services, and are not subject to a pending disqualification proceeding; and (iii) have not been convicted of a criminal offense related to the provision of healthcare items or services, and are not subject to any such pending action. APCETH shall notify BBB immediately if APCETH, its Affiliates, or approved subcontractors, or any person used to perform services hereunder, or any of their respective officers or directors, as applicable, is subject to the foregoing, or if any action, suit, claim, investigation, or proceeding relating to the foregoing is pending, or to the best of APCETH’s knowledge, is threatened; 

	
 
	
(e)
	
at the time of delivery to BBB, the Product will have been manufactured in accordance with this Agreement, the Quality Agreement (including the Specifications), the Marketing Authorizations, GMP and all other Applicable Laws and will be transferred free of any liens or encumbrances of any kind arising from the acts or omissions of APCETH, its Affiliates, or their respective agents; and

	
 
	
(f)
	
to the best of APCETH’s knowledge, the conduct and the provision of the Services (other than the use of BBB Technology or Supplied Materials) will not violate any patent, trade secret or other proprietary or intellectual property rights of any third party, and it will promptly notify BBB in writing should it become aware of any such violation or any claims asserting such violation. 

page 11

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10.2
	
BBB Representations and Warranties. 

BBB hereby represents and warrants to BBB by way of an independent warranty according to Article 311 Civil Code (selbstständiges Garantieversprechen i. S. d. § 311 BGB) that BBB has the full power and right to enter into this Agreement and that there are no obligations, agreements, assignments, licenses, encumbrances or rights of any kind held by other parties, private or public, that are inconsistent with the provisions of this Agreement.

	
10.3
	
Warranty Rights. 

The representations and warranties provided to BBB by APCETH according to Section 10.1 do not exclude or supersede BBB’s warranty rights under Section 9.

	
11.
	
PAYMENTS AND PAYMENT TERMS

	
11.1
	
Access Fee. As compensation for certain opportunity costs of APCETH, BBB shall pay to APCETH a one-time non-refundable access fee of Three Million (3,000,000) EUR (“Access Fee”) in two instalments:

	
 
	
(a)
	
[***]: Two Million (2,000,000) EUR; and

	
 
	
(b)
	
[***]: One Million (1,000,000) EUR. 

[***].

	
11.2
	
Maintenance Fee. Effective following the Supply Initiation Date, BBB shall pay to APCETH a maintenance fee to [***]. The Maintenance Fee for the [***] shall be [***], payable in [***]. Effective following the Extension Date, the [***] to be paid by BBB to APCETH shall amount to [***], payable in [***]; provided, however, that 

	
 
	
(i)
	
the applicable Maintenance Fee for the calendar year [***] shall be adjusted [***]; and 

	
 
	
(ii)
	
prior to BBB’s exclusive access to [***], [***] of the Maintenance Fee shall be adjusted pro rata, [***].

	
11.3
	
Production Fees. 

	
 
	
(a)
	
The Production Fee for each Production Year shall represent the [***]. The following Production Fees applicable to each Production Scenario shall apply:

	
 
	
(i)
	
[***]

	
 
	
(ii)
	
[***]

	
 
	
(iii)
	
[***]

	
 
	
(b)
	
The Production Fee shall be due and payable in [***], and the Production Fee applicable [***]. 

	
11.4
	
Adjustment. APCETH may adjust the Maintenance Fee and the Production Fee in accordance with [***], by [***]; provided, however, in no event shall such an adjustment result in an increase of the Maintenance Fee or Production Fee by more than [***] during the [***] of this Agreement [***].

	
11.5
	
Material Costs. Costs for raw materials and third party laboratory costs necessary for the manufacture of Product as specified in the Quality Agreement shall be [***], provided that [***].

	
11.6
	
Work Order Fees. The completion of any Work Orders (other than for the manufacture of Product) and any other further ongoing work orders under the MSA for certain technology transfer and development works shall be performed under this Agreement and shall be charged separately (“Work Order Fees”). 

	
11.7
	
Cumulative Payments. Any amounts due and payable under this Section 11 are cumulative, except as otherwise explicitly provided.

	
11.8
	
Invoice. APCETH will invoice BBB [***]. Notwithstanding the foregoing, APCETH will not invoice BBB for a Batch [***]. Payment [***] will be due (i) [***] after receipt of invoice for any Access Fee payment in accordance with Section 11.1, and (ii) [***] after receipt of the invoice and reasonable supporting documentation (such as administrative requests from BBB’s accounts payables) for all other payments under this Agreement. 

page 12

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11.9
	
Payments. BBB will make all payments pursuant to this Agreement by check or wire transfer to a bank account designated in writing by APCETH.

	
11.10
	
Financial Records. 

	
 
	
(a)
	
APCETH will keep accurate records of [***], and, upon the request of BBB, will permit BBB or its duly authorized agents to examine such records during normal business hours for the purpose of verifying the correctness of all such calculations. 

	
 
	
(b)
	
Furthermore, in the event that BBB is required to capitalize the Clean Rooms in accordance with U.S. Generally Accepted Accounting Principles and the Accounting Standards Codification 840-10 (and any applicable updates or successor accounting guidance promulgated by the Financial Accounting Standards Board), and solely for such purpose, APCETH shall provide to BBB, upon BBB’s reasonable request, necessary information to account for this Agreement as a capital lease in BBB’s financial statements. [***].

[***].

	
11.11
	
Taxes. Duty, sales, use or exercise taxes imposed by any governmental entity that apply to the manufacture, sale and delivery of Product will be borne by [***].

	
12.
	
JOINT STEERING COMMITTEE

	
12.1
	
Establishment. The Parties will establish a steering committee to coordinate and supervise their activities under this Agreement (the “Joint Steering Committee” or “JSC”), and to facilitate communication between the Parties. The Joint Steering Committee will consist of an equal number of members of each Party. Each Party shall appoint [***] as members to the JSC. The members initially appointed by each Party are set out in Schedule 3, and each Party may change its members appointed to the JSC by written notice to the other Party upon [***] notice. 

	
12.2
	
Meetings. The Joint Steering Committee shall meet regularly (in person or by teleconference) at such intervals as the Parties may agree, but no less frequently than [***]. Additionally, the JSC shall meet within [***] after receipt of a written request by one Party to the other Party to hold such a meeting. 

	
12.3
	
Authority. The JSC shall be an advisory body only, for the coordination and supervision of the activities and the flow of information between the Parties, and shall not have the power to take any action under this Agreement, interpret, amend or modify this Agreement, or waive compliance therewith. 

	
13.
	
MINIMUM UTILIZATION

Prior to engaging a new Third Party manufacturer [***] (“Minimum Utilization Requirement”). Notwithstanding the foregoing, the Minimum Utilization Requirement shall not apply (i) [***], or (ii) [***].

	
14.
	
INTELLECTUAL PROPERTY

	
14.1
	
BBB Technology. All rights to and interests in BBB Technology will remain solely in BBB, and no right or interest therein is transferred or granted to APCETH under this Agreement. APCETH acknowledges and agrees that it does not acquire a license or any other right to BBB Technology or BBB New Technology except for the limited purpose of performing its obligations under this Agreement, and that such limited, non‐exclusive license will expire upon the completion of such obligations or the termination of this Agreement, whichever is the first to occur. 

	
14.2
	
APCETH Technology. All rights to and interests in APCETH Technology will remain solely in APCETH and, except as otherwise set forth in this Agreement, no right or interest therein is transferred or granted to BBB under this Agreement. APCETH hereby grants a non‐exclusive, worldwide, perpetual, irrevocable, transferable and sublicensable (through multiple tiers) license to BBB and BBB’s Affiliates to use any APCETH Technology and APCETH Improvement Technology that APCETH incorporates into the manufacturing process of Product, solely to use, develop, manufacture or have manufactured Product, distribute, offer for sale, sell and otherwise dispose of Product, subject to the terms set forth in Section 14.5. 

page 13

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14.3
	
New Technology. 

	
 
	
(a)
	
Except as set forth herein, as between the Parties, BBB shall own all right, title and interest in and to any Technology that APCETH and/or any approved subcontractor of APCETH develops, conceives, invents, or first reduces to practice or makes, solely or jointly with BBB in the course of performing the obligations under this Agreement (“BBB New Technology”). Subject to Section 14.3(b) below, APCETH herewith assigns and transfers all rights and title in and to such BBB New Technology to BBB [***], and BBB hereby accepts such assignment and transfer. APCETH shall promptly disclose to BBB in writing all BBB New Technology.

	
 
	
(b)
	
If an APCETH employee makes an invention under this Agreement constituting BBB New Technology, APCETH shall promptly inform BBB. If BBB wishes to obtain the related rights and titles to such BBB New Technology, BBB will inform APCETH accordingly and APCETH shall then claim such invention (“Inanspruchnahme”) in accordance with the provisions of the German Employee Inventions Act (“Arbeitnehmererfindungsgesetz”) and all rights in and title to such claimed inventions shall be part of the assignment and transfer of BBB New Technology to BBB in accordance with Section 14.3(a) above. The assignment and transfer of the rights in relation to such inventions shall be [***].

	
 
	
(c)
	
Notwithstanding the foregoing, in the event that BBB makes use of any APCETH Technology or APCETH’s Confidential Information in accordance with Section 14.2, BBB New Technology shall not include any Technology that is solely an improvement or enhancement of any APCETH Technology or APCETH’s Confidential Information without reference to BBB Technology or BBB’s Confidential Information (collectively, “APCETH Improvement Technology”) and APCETH shall own all right, title and interest in and to any APCETH Improvement Technology. For clarity, APCETH Improvement Technology shall be [***].

	
 
	
(d)
	
APCETH shall execute, and shall require its personnel as well as APCETH’s approved subcontractors and their personnel involved in the performance of this Agreement to execute, any documents reasonably required to confirm BBB`s ownership of BBB New Technology, and any documents required to apply for, maintain and enforce any patent or other right in the BBB New Technology.  

	
14.4
	
Patent Filings. BBB will have the exclusive right and option, but not the obligation, in its sole discretion, to prepare, file, prosecute, maintain and defend, at its sole expense, any patents that claim or cover the BBB New Technology. 

	
14.5
	
Technology Transfer. Within [***] after the term of this Agreement, or in accordance with Section 19.1(c), APCETH shall, upon BBB’s request, provide reasonable technology transfer assistance services to BBB in connection with the establishment of Product manufacturing capabilities at a Third Party contract manufacturer, as set forth in detail in this Section (“Technology Transfer”). In such case, APCETH shall promptly 

	
 
	
(a)
	
transfer to BBB and/or a Third Party designated by BBB all data and information necessary to transfer the manufacturing process, as further developed by APCETH, to any third party and to implement the manufacturing process (e.g. in‐process control assays, standard operating procedures, and such), and 

	
 
	
(b)
	
furnish to BBB and/or such Third Party all reasonable assistance and personnel and answer all reasonable questions regarding the transfer of the manufacturing process; in each case, in order to allow BBB or such Third Party to replicate and implement the manufacturing process and to take over the manufacturing of the Product. 

Without limiting the foregoing, APCETH will provide BBB and/or the Third Party designated by BBB with the following documentation: [***]. The Parties shall agree in good faith on a schedule and plan for affecting the Technology Transfer. For its assistance in the Technology Transfer, [***]. 

page 14

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15.
	
INSURANCE

	
15.1
	
APCETH shall secure and maintain in full force and effect throughout the term of this Agreement (and for at least [***] thereafter for claims made coverage) [***], the following minimum insurance coverage with financially sound and nationally reputable insurers [***]:

	
 
	
(a)
	
[***];

	
 
	
(b)
	
[***]. 

	
15.2
	
APCETH will at BBB’s written request provide BBB with a certificate of insurance evidencing such coverage as required by Section 15.1. Where reasonably possible, APCETH will provide BBB with at least [***] advance written notice of any material change or cancellation in coverage or limits. 

	
16.
	
INDEMNIFICATION AND LIMITATION OF LIABILITY

	
16.1
	
Indemnification of BBB

APCETH will indemnify BBB, its Affiliates, and its and their respective directors, officers, employees, independent contractors, consultants and agents ( the “BBB Parties”), and defend and hold each of them harmless, from and against any and all losses, damages, liabilities, costs and expenses (including reasonable lawyers’ fees and expenses) in connection with any and all liability suits, investigations, claims or demands (collectively, “Losses”) to the extent such Losses arise out of or result from any claim, lawsuit or other action or threat by a third party arising out of: (a) [***], or (b) [***].

	
16.2
	
Indemnification of APCETH

BBB will indemnify APCETH, its Affiliates, and its and their respective directors, officers, employees, independent contractors, consultants and agents (the “APCETH Parties”), and defend and hold each of them harmless, from and against any and all Losses to the extent such Losses arise out of or result from any claim, lawsuit or other action or threat by a Third Party arising out of: (a) [***], or (b) [***].

	
16.3
	
Indemnification Procedure

	
 
	
(a)
	
An “Indemnitor” means the indemnifying Party pursuant to Section 16.1 or 16.2, as applicable. An “Indemnitee” means the Party that is being indemnified pursuant to Section 16.1 or 16.2, as applicable.

	
 
	
(b)
	
An Indemnitee shall promptly notify the Indemnitor in writing of any claim, lawsuit or other action or threat of which it becomes aware for which the Indemnitor might be liable under Section 16.1 or 16.2, as applicable. The Indemnitee agrees to the control of such defense by the Indemnitor to the extent permissible under Applicable Laws. The Indemnitee shall cooperate fully with, and provide information to, Indemnitor and its legal representatives as reasonably requested in the investigation and defense of any claim, lawsuit or other action covered by this indemnification, all at the reasonable expense of the Indemnitor. The Indemnitee shall have the right, but not the obligation, to be represented by counsel of its own selection and expense; provided, however, that the Indemnitor will have final decision-making authority regarding all aspects of the defense of the claim, lawsuit, threat or other action.

	
 
	
(c)
	
Neither Party will be responsible for, or be bound by, any settlement of any claim or suit made by the other Party without its prior written consent; provided, however, that the Indemnitee will not unreasonably withhold or delay such consent.

	
16.4
	
Limitation of Liability

	
 
	
(a)
	
AS FAR AS LEGALLY PERMISSIBLE BY APPLICABLE LAWS, THE PARTIES’ OBLIGATION TO INDEMNIFY PURSUANT TO SECTION 16.1 OR 16.2, AS APPLICABLE SHALL BE CAPPED AT [***].

	
 
	
(b)
	
THE LIMITATIONS UNDER THIS SECTION 16.4 SHALL APPLY ACCORDINGLY FOR THE DIRECT LIABILITY OF ONE PARTY TO THE RESPECTIVE OTHER IN ALL CASES OTHER THAN FOR BREACH OF THE CONFIDENTIALITY AND NON-USE OBLIGATIONS IN SECTION 17; PROVIDED, THAT NEITHER PARTY WILL BE LIABLE UNDER ANY LEGAL THEORY (WHETHER TORT, CONTRACT OR OTHERWISE) FOR SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER, INCLUDING LOST PROFITS ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, HOWEVER CAUSED, EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

page 15

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17.
	
CONFIDENTIAL INFORMATION AND DATA PROTECTION

	
17.1
	
Definition. “Confidential Information“ means any and all non‐public scientific, technical, financial regulatory or business information, or data or trade secrets in whatever form (written, oral or visual) that is furnished or made available by one Party (the “Discloser”) to the other (the “Recipient”) or developed by either Party under this Agreement. For clarity, Confidential Information of a Party includes information of Affiliates or a Third Party that the Discloser has an obligation to keep confidential.  

	
17.2
	
Disclosure and Use Restriction. Except as expressly provided herein, each Party agrees that for the term of the Agreement and [***] thereafter, each Party and its Affiliates will protect the Confidential Information of the other Party using the same degree of care it uses to protect its own confidential information but in any event no less than a reasonable degree of care, maintain as confidential, and not publish or otherwise disclose any Confidential Information of the other Party, except in accordance with Section 17.3 or 17.4. Neither Party will use Confidential Information of the other Party except as necessary to perform its obligations under this Agreement or to reasonably exercise its rights under this Agreement. 

	
17.3
	
Permitted Disclosure. Recipient may provide Discloser’s Confidential Information to its Affiliates, and to its and their directors, employees, consultants, independent contractors and agents; provided however, that (a) any such Affiliates, directors, employees, consultants, independent contractors and agents are bound by written obligations of confidentiality with respect to the Discloser’s Confidential Information that are at least as restrictive as those set forth in this Agreement; (b) Recipient remains liable for the compliance of such Affiliates, directors, employees, consultants, independent contractors and agents with such obligations; and (c) such disclosure is only permitted to the extent necessary for a Party to carry out its obligations under this Agreement. 

	
17.4
	
Required Disclosure. Recipient may also disclose Discloser ́s Confidential Information to the extent ordered by a competent regulatory or governmental authority or court of competent jurisdiction, or if the Recipient is required to disclose the other Party’s Confidential Information to comply with Applicable Laws, the rules of any stock exchange or listing entity, or to defend or prosecute litigation; provided that the Recipient notifies the Discloser prior to the Disclosure in writing, takes all reasonable and lawful actions to avoid or minimize the degree of such disclosure and cooperates reasonably with the Discloser in any efforts to seek a protective order. 

	
17.5
	
Exceptions. Recipient’s obligation of non‐disclosure and non‐use under this Agreement will not apply to any portion of Discloser’s Confidential Information that Recipient can demonstrate, by appropriate evidence:

	
 
	
(a)
	
is generally known to the public at the time of disclosure or becomes generally known through no wrongful act on the part of Recipient or its Affiliates;

	
 
	
(b)
	
at the time of disclosure is already in possession of the Recipient or its Affiliates, other than as a result of Recipient’s or its Affiliate’s breach of any legal or contractual obligation;

	
 
	
(c)
	
becomes known to or is lawfully provided to the Recipient or its Affiliates, without restriction as to confidentiality or use, by a source lawfully entitled to possession of such Confidential Information; or

	
 
	
(d)
	
is independently developed by the Recipient or its Affiliates without use of or reference to the Discloser’s Confidential Information.

	
17.6
	
Return of Confidential Information. Upon the effective date of the expiration or termination of this Agreement, Recipient agrees, except as otherwise provided in this Agreement, to return to Discloser all documentation or other tangible evidence or embodiment of Discloser’s Confidential Information (including, if BBB is the Discloser, any Supplied Materials) and not to use such Confidential Information unless agreed otherwise. Notwithstanding the foregoing, Recipient may retain one archival copy of Discloser’s Confidential Information in order to monitor Recipient’s ongoing obligation of confidentiality and non‐use under this Agreement and in compliance with sample retention protocols required by the Quality Agreement and GMP, as may be applicable; provided that such archival copy must be kept confidential in accordance with this Section 17 and segregated from Recipient’s regular files.  

page 16

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17.7
	
Data Protection. Each of the Parties is, and shall be, in compliance with all Applicable Laws pertaining to patient personal information and patient health information, including data safety and data protection (“Data Protection Laws”). BBB shall not make patient personal information or patient health information available to APCETH which is not pseudonymized in accordance with applicable Data Protection Laws. Each of the Parties will treat all patient personal information and patient health information (in case of APCETH in pseudonymized form) as Confidential Information, in accordance with this Agreement. Each Party has implemented, and shall implement, in accordance with applicable privacy and security laws all policies, privacy notices, consent forms and administrative, physical and technological safeguards that reasonably and adequately protect the personal information and patient health information of patients, including the mobilized peripheral blood from patients (“Patient Information”) created, received, maintained, or transmitted under this Agreement.

	
18.
	
TERM AND TERMINATION

	
18.1
	
Term of this Agreement. The initial term of this Agreement shall commence on the Supply Initiation Date (the “Effective Date”) and end after a period of five (5) years starting from the Supply Initiation Date. 

	
18.2
	
Renewal. Following the initial term, this Agreement shall automatically renew for additional three (3) year terms, unless either Party provides the other Party with notice of non-renewal at least [***] prior to the end of the applicable term.

	
18.3
	
Termination by either Party

	
 
	
(a)
	
Either Party may terminate this Agreement with immediate effect upon written notice to the other Party:

	
 
	
(i)
	
for any material breach of this Agreement by the other Party, unless such breach is cured within [***] after the breaching Party receives written notice of such breach from the non-breaching Party; provided, however, that if such breach is not capable of being cured within such [***] period and the breaching Party has commenced and diligently continued actions to cure such breach within such [***] period, except in the case of a payment default, the cure period shall be extended to [***], so long as the breaching Party is making diligent efforts to do so; or  

	
 
	
(ii)
	
to the extent permitted under Applicable Laws, if an Insolvency Event occurs with respect to the other Party. In any event, when a Party first becomes aware of the likely occurrence of an Insolvency Event with regard to such Party, it shall promptly so notify the other Party in order to allow the other Party to protect its interests under this Agreement.

	
 
	
(b)
	
[***]:

	
 
	
(i)
	
[***]

 

	
 
	
(ii)
	
[***].

  

	
18.4
	
Termination by BBB

BBB is entitled to terminate this Agreement:

	
 
	
(a)
	
for convenience with at least (i) [***] prior written notice prior to [***], or (ii) twelve (12) months’ prior written notice following [***]; 

	
 
	
(b)
	
during the Clinical Supply Phase, with [***] prior written notice, in the event (i) [***], or (iii) [***]; or

	
 
	
(c)
	
with immediate effect, if a Force Majeure Event has prevented APCETH’s performance (in whole or substantial part) of this Agreement for a period of [***].

page 17

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19.
	
EFFECTS OF TERMINATION 

	
19.1
	
Termination Payment. 

	
 
	
(a)
	
Upon termination by BBB according to Section 18.4(a), [***]. 

	
 
	
(b)
	
Upon termination by BBB according to Section 18.4(b), [***]

	
 
	
(c)
	
Upon termination by BBB due to a material breach of APCETH, [***].

	
 
	
(d)
	
Upon termination by APCETH due to a material breach of BBB, [***]. 

	
19.2
	
Technology Transfer. After termination of this Agreement, APCETH shall, upon BBB’s request, provide reasonable assistance in Technology Transfer services as set forth in Section 14.5.

	
19.3
	
Return of Materials. Upon termination of this Agreement, BBB may at its sole discretion as an alternative to the return of Confidential Information as set forth in Section 17.6, request in writing the destruction of any documents or remaining Supplied Materials and provide appropriate evidence of such destruction.

	
20.
	
COMPLIANCE, ANTI-BRIBERY AND ANTI-CORRUPTION

Either Party shall act in full compliance with all Applicable Laws, including all applicable labor, tax and social insurance law and industrial safety regulations with regard to its employees involved in the performance of this Agreement. APCETH shall ensure by appropriate contractual arrangements and supervision that any approved subcontractors act in full compliance with the aforementioned Applicable Laws. APCETH agrees to comply with the reasonable, written instructions of BBB and/or its Affiliates with respect to the Applicable Laws relating to the import, export or re-export of the Supplied Materials and/or Product, provided that where APCETH complies with such instructions, BBB shall be responsible for the import, export or re-export of the Supplied Materials and/or Products.

	
20.1
	
Representation and Warranty. Either Party represents and warrants by way of an independent warranty (selbstständiges Garantieversprechen i.S.d. § 311 (1) BGB), that it, its owners, directors, officers, employees will act in full compliance with applicable anti-corruption laws and regulations, industry and professional codes of practice, including the U.S. Foreign Corrupt Practices Act and the UK Bribery Act. Without limiting the generality of the foregoing, either Party represents and warrants in particular that it and its owners, directors, officers, employees will not directly or indirectly in connection with the business of the other Party or with this Agreement:

	
 
	
(a)
	
offer, promise, pay or arrange for payment or giving of a bribe or any benefit, advantage or anything of value to any public official, individual, entity or any other third party in exchange for an improper advantage in any form either directly or indirectly in order to fulfil, obtain or retain (a) regulatory permits like the building permit, (b) any kind of business including any commercial transaction to which the other Party is a party, or which is otherwise in connection with this Agreement, or (c) any other improper advantage;

	
 
	
(b)
	
transfer anything of value to a public official without the prior approval of the other Party, regardless of whether or not such transfer might constitute a bribe;

	
 
	
(c)
	
transfer anything of value to subcontractors, or any third party for the purpose of offering, promising, paying, receiving, soliciting, or arranging for the payment of, or reimbursing anyone for payment of, a bribe or a transaction of anything of value to a public official; or

	
 
	
(d)
	
request, accept a promise of or receive any payment, benefit or advantage from any individual or entity for itself or for a third party in return for giving another person or entity unfair preferences in the procurement of goods or commercial or other services in connection with this Agreement.

	
20.2
	
Reporting. Either Party shall report any suspicion of past, current or potential violations of this Section 20 immediately to the other Party, to the extent permitted by Applicable Law. If a Party is in doubt whether a certain act violates its obligations under this Section, such Party shall contact the other Party and shall delay the decision before taking the action. 

page 18

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20.3
	
Audit Right. The audit rights of BBB under Section 8.4 and 11.10 encompass the relevant records ensuring compliance with this Section 20. 

	
20.4
	
Consequences of Violation. Any uncured or incurable violation of this Section 20 shall constitute a material breach of this Agreement. 

	
21.
	
NOTICES

	
21.1
	
Unless otherwise expressly agreed in writing, all declarations or communications in connection with this Agreement, including the Schedules attached hereto and incorporated by reference, shall only be validly served if they are delivered in writing by registered mail, by internationally recognized expedited delivery service (receipt requested), or by fax (with written confirmation of receipt) to the following addresses for delivery of the Parties.

	
 
	
(a)
	
For declarations or communications to be made to BBB:

bluebird bio Inc. 

150 2nd Street, Cambridge, MA 02141,

Attention: Chief Legal Officer

with a copy to [***]

[***]

	
 
	
(b)
	
For declarations or communications to be made to APCETH:

apceth Biopharma GmbH

Haidgraben 5

D‐85521 Ottobrunn

Germany

Attention: Geschäftsführung

with a copy to [***]

[***] 

	
21.2
	
Furthermore, the above addresses and fax numbers shall be applicable for the purpose of service until such time as one of the Parties informs the other(s) in writing of any change.

	
22.
	
GOVERNING LAW, ARBITRATION

	
22.1
	
This Agreement and all claims and rights arising out of or in connection with this Agreement shall be exclusively governed by German law and shall be construed and enforced in accordance with German law without regard to its conflict of law provisions. The application of the United Nations Convention on Contracts for the International Sale of Goods (CISG) is excluded. 

	
22.2
	
All disputes between the Parties and all disputes between BBB and apceth GmbH & Co KG arising out of or in connection with this Agreement, its completion or implementation shall be conclusively decided pursuant to the rules of arbitration of the International Chamber of Commerce (ICC), Paris, with the exclusion of recourse to the courts of law. The place of arbitration shall be Zurich, Switzerland. All disputes shall be decided by a single arbitrator. The arbitrator shall be appointed in accordance with the rules of arbitration of the International Chamber of Commerce (ICC), Paris.

page 19

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23.
	
FINAL PROVISIONS

	
23.1
	
Assignment. This Agreement shall be binding upon the successors and assigns of the Parties. Neither Party may assign or transfer this Agreement, in whole or in part, without the prior written consent of the other Party. Notwithstanding the foregoing, BBB may assign this Agreement (i) to its Affiliates, provided that BBB guarantees fulfilment of the obligations, including all payment obligations, of the assignee, and (ii) to a successor in interest by way of merger, acquisition, consolidation, or sale of all or substantially all of the business to which this Agreement relates. No assignment shall relieve any Party of responsibility for the performance of any obligation that accrued prior to the effective date of such assignment.

	
23.2
	
Force Majeure. Neither Party shall be in breach of this Agreement if there is any failure of performance under this Agreement (except for payment of any amounts due under this Agreement) occasioned by any reason beyond the reasonable control and without the fault or negligence of the Party affected thereby, including, without limitation, an fire, flood, act of government or state, war, civil commotion, insurrection, acts of terrorism, embargo, sabotage, prevention from or hindrance in obtaining energy or other utilities, a shortage of raw materials or other necessary components, labor disputes of whatever nature (a “Force Majeure Event"). Such excuse shall continue as long as the Force Majeure Event continues. Upon cessation of such Force Majeure Event, the affected Party shall promptly resume performance under this Agreement. A Party affected by a Force Majeure Event will give the other Party prompt written notice, to the extent possible, of the occurrence of any Force Majeure Event, the nature thereof, and the extent to which it will be unable to fully perform its obligations under this Agreement and will use commercially reasonable efforts to resume performance or mitigate the effects of the Force Majeure Event as quickly as practicable and to give the other Party prompt written notice when it is again fully able to perform such obligations. 

	
23.3
	
Headings. Headings in this Agreement shall be for convenience only and shall not affect the interpretation of the Agreement.

	
23.4
	
Severability. If any provision of this Agreement is or becomes invalid, either as a whole or in part, this shall not affect the validity or enforceability of the remainder of the Agreement. The Parties agree to replace the invalid provision by a provision which serves the purposes of the Agreement as closely as possible. The same shall apply to any possible omission in this Agreement. If the defectiveness of a provision is based on the determination of a certain level of performance or a certain time (deadline or fixed date), the provision is deemed to have been agreed with the level or time which comes as close as legally possible to the original level or time.

	
23.5
	
Survival. The provisions of Sections 1, 6.2, 9, 14, 15, 16, 17, 19, 21, 22, and 23 shall survive the expiration or termination of this Agreement. 

	
23.6
	
Written Amendments and No Continuing Waiver: Valid amendments or supplements to this Agreement must be made in writing (in the sense of sec. 126 German Civil Code), unless notarisation is prescribed by law, and shall expressly refer to this Agreement. The same shall apply to any agreement to deviate from or cancel this requirement of written form. The failure of any Party at any time or times to require the performance of this Agreement will in no manner affect its rights at a later time to enforce the same. No waiver by any Party of the breach of any term contained in this Agreement, whether by conduct or otherwise, in any one or more instances, will be deemed to be or construed as a further or continuing waiver of any such breach or the breach of any other term of this Agreement.

[remainder of page intentionally left blank]

page 20

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bluebird bio, Inc.
	
 
	
Apceth Biopharma GmbH

	
 
	
 
	
 

	
/s/ Jason F. Cole
	
 
	
/s/ C. Guenther

	
 
	
 
	
 

	
Name:
	
Jason F. Cole
	
 
	
Name:
	
Dr. Christine Guenther

	
 
	
 
	
 
	
 
	
 

	
Title:
	
Chief Legal Officer
	
 
	
Title:
	
CEO

	
 
	
 
	
 
	
 
	
 

	
Date:
	
28 Nov 2016
	
 
	
Date:
	
18 Nov 2016

 

 

Apceth GmbH & Co. KG

 

 

	
/s/ C. Guenther

	
 
	
 

	
Name:
	
 
	
Dr. Christine Guenther

	
 
	
 
	
 

	
Title:
	
 
	
CEO

	
 
	
 
	
 

	
Date:
	
 
	
18 Nov 2016

 

 

 

page 21

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List of Schedules

[***]

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AMENDMENT No. 1 TO THE TOLL MANUFACTURING AND SERVICE AGREEMENT

 

Amendment Agreement No. 1 ("Amendment Agreement No. 1") to the Toll Manufacturing and Service Agreement shall become effective on November 16, 2018 and is entered into by and between:

 

bluebird bio Inc. ("BBB")

having its principal place of business at 60 Binney St., Cambridge, MA 02142, United States of America

 

and,

 

apceth Biopharma GmbH ("APCETH"),

having its principal place of business at Haidgraben 5, 85521 Ottobrunn, Germany.

 

BBB and APCETH hereinafter also each referred to as a "Party" and jointly as the "Parties".

 

Whereas,

 

The Parties entered into a Toll Manufacturing and Service Agreement ("TMSA") effective on January 1, 2017 regarding the clinical and commercial GMP-manufacturing of BBB's Products and related services by APCETH.

 

The Parties entered into an Addendum to the TMSA on May 21, 2018 regarding the European Union's General Data Protection Regulation.

 

The Parties now wish to make certain amendments to the TMSA as detailed herein in this Amendment Agreement No. 1.

 

NOW THEREFORE, the Parties agree as follow:

 

	
1.
	
Section 16.2 - Indemnification of APCETH shall be replaced by:

 

"16.2 Indemnification of APCETH

 

BBB will indemnify APCETH, its Affiliates, its approved subcontractors and its and their respective directors, officers, employees, independent contractors, consultants and agents (the “APCETH Parties”), and defend and hold each of them harmless, from and against any and all Losses to the extent such Losses arise out of or result from any claim, lawsuit or other action or threat by a Third Party arising out of: [***].”

 

	
2.
	
Furthermore, behind Section 16.4 lit. (b) a new Section 16.4 lit. (c) shall be added to the TMSA as follows:

 

	
 
	
“(c)
	
NOTWITHSTANDING ANYTHING OF THE ABOVE, THE LIMITATIONS UNDER THIS SECTION 16.4 SHALL NOT APPLY TO [***].”

 

	
3.
	
Except as expressly provided in this Amendment Agreement No. 1, all other terms, conditions and provisions of the MSA shall continue in full force and effect as provided therein.

 

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IN WITNESS WHEREOF, the Parties have caused this Amendment Agreement No. 1 to be executed and delivered by their respective duly authorized officers

 

	
bluebird bio Inc.
	
 
	
apceth Biopharma GmbH

	
 
	
 
	
 

	
 
	
 
	
 

	
Cambridge, MA
	
  19/11/2018
	
 
	
Ottobrunn
	
  16.11.2018

	
(Place, Date)
	
 
	
(Place, Date)

	
 
	
 
	
 

	
 
	
 
	
 

	
  /s/ Jason Cole
	
 
	
  /s/ Dusan Kosijer

	
Name:
	
Jason Cole
	
 
	
Name:
	
Dusan Kosijer

	
Title:
	
Chief Legal Officer
	
 
	
Title:
	
CFO

 

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.blue-ex1025_116.htm

 

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Exhibit 10.25

 

EXECUTION VERSION

Clinical and Commercial Supply Agreement 

Viral Vector Product

by and between

bluebird bio, Inc.

and 

SAFC Carlsbad, Inc.

 

November 27, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CLINICAL AND COMMERCIAL SUPPLY AGREEMENT

VIRAL VECTOR PRODUCT

This Clinical and Commercial Supply Agreement (this “Agreement”), executed as of November 27, 2017 and effective as of January 1, 2018 (the “Effective Date”), is entered into by and between: 

bluebird bio, Inc., a Delaware corporation, with a place of business located at 60 Binney Street, Cambridge, MA 02142 (“Company”), and

SAFC Carlsbad, Inc., a company incorporated under the laws of the State of California, USA, with its principal offices located at 6211 El Camino Real, Carlsbad, California, 92009 (“SAFC”).  

Company and SAFC are hereinafter sometimes referred to separately as a “Party” or together as the “Parties”.

RECITALS

WHEREAS, Company is engaged in the development of its [***] (each, a “Drug Product” and collectively, the “Drug Products”);

WHEREAS, SAFC develops and manufactures a broad range of viral vectors for viral and gene therapy related products that are active key ingredient(s) for use in biopharmaceutical development, clinical trials and commercial use;

WHEREAS, Company desires to engage SAFC to manufacture and supply the Vector Products (as defined herein) for use by Company in its manufacture, use and sale of its Drug Products; 

WHEREAS, this Agreement is for the clinical and commercial manufacture and supply, and any and all related services, including but not limited to, Testing, Process Characterization and Process Performance Qualification (as such terms are defined herein);

WHEREAS, this Agreement supersedes and replaces that certain Production Service Agreement by and between the Parties dated October 30, 2008, as amended (the “Prior Agreement”) and said Prior Agreement is terminated in its entirety as of the Effective Date; and 

NOW, THEREFORE, in consideration of the above premises and the mutual covenants, obligations and agreements contained herein, the Parties hereby agree as follows:

	
1.
	
Definitions and Interpretation

1.1“Affiliate” means any entity directly or indirectly controlling, controlled by or under common control with either Party hereto.  For purpose of this definition, “control” shall mean ownership of over fifty percent (50%) of the equity capital, the outstanding voting securities or other ownership interest of an entity, or the right to receive over fifty percent (50%) of the profits or earnings of an entity.  In the case of non-stock organizations, the term “control” shall mean the power to control the distribution of profits.

1.2“Agreement” means, collectively, this Agreement, its Exhibits, any Task Orders, Purchase Orders and any other documents incorporated herein by reference, including without limitation the Quality Agreement(s) (as hereinafter defined); provided, however, the Quality Agreement(s) may be amended and modified separately as a stand-alone document and not require amendment of this Agreement under those circumstances.

1.3“Batch” means a specific quantity of Vector Product produced, tested and released from a single operation of the Manufacturing Process, as described in the Master Batch Record. A “Batch” may be any of the following types as further defined hereinafter and identified on the applicable Task Order [***].

 

	
Page 2 of 28
	
 
	
Confidential

 

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1.4“Batch Record” and “Master Batch Record” have the meanings assigned to such terms in the Quality Agreement.

1.5“Cell Bank” means either a master cell bank or a working cell bank, whichever the case may be in its use. 

1.6“Certificate of [***]” means a certificate issued by [***].  

1.7“CFR” means the U.S. Code of Federal Regulations.

1.8“Clinical Batch” means a Batch produced by SAFC under cGMP conditions and intended for use by Company for investigational purposes.

 

1.9“Commercial Batch” means a Batch produced by SAFC under cGMP conditions after Company has obtained Regulatory Approval for Sale (as defined herein) of its Drug Product.

 

1.10“Confidential Information” shall mean all technical, business and other information, whether tangible or intangible, including (without limitation) any and all data, techniques, discoveries, inventions, processes, know-how, patent applications, inventor certificates, trade secrets, methods of production and other confidential or proprietary information, that either Party or any Affiliate of a Party has ownership rights to (as either owner, licensee or sub-licensee), or may hereafter obtain ownership rights to, and discloses to the other Party. All Confidential Information disclosed by either Party or its Affiliates to the other Party or its Affiliates pursuant to the Prior Agreement shall be deemed to be the disclosing Party’s Confidential Information hereunder. The Parties agree to either (a) clearly mark the term “Confidential Information” upon written Confidential Information, or (b) in the case of oral disclosure of Confidential Information, to confirm the confidential or proprietary nature of such Confidential Information in a writing prior to such disclosure or within [***] following such disclosure.   Notwithstanding the foregoing, failure to mark or confirm in writing such Confidential Information does not constitute a designation of non-confidentiality when the confidential or proprietary nature would be reasonably recognized by the receiving Party based on the subject matter or type of information disclosed or the circumstances of disclosure, and such information shall be deemed Confidential Information hereunder. 

1.11“Consumables” means all single use, regularly replaced or reused materials that are required to perform the Manufacturing Process (including Resins but excluding Plasmid Stocks and Raw Materials).

1.12“Contract Year” means each consecutive twelve (12) month period during the Term, beginning on January 1, 2018 and on each January 1 during the Term thereafter.

1.13“Current Good Manufacturing Practices” or “cGMP” shall mean current good manufacturing practices applicable to the Manufacture of Vector Product, that are promulgated by any applicable governmental or regulatory authority, and as may be set forth in the Quality Agreement.  

1.14“Deviation” shall have the meaning set forth in the Quality Agreement.

1.15“EMA” shall mean the European Medicines Agency of the European Union, and any successor(s) thereto.

1.16“Failure to Supply” shall have the meaning set forth in Section 3.8(a) hereof.

 

	
Page 3 of 28
	
 
	
Confidential

 

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1.17“FDA” shall mean the United States Food and Drug Administration, and any successor thereto.

1.18“Manufacture”, “Manufacturing” or “Manufactured” means all activities related to the manufacturing of Vector Product, or any ingredient thereof to be undertaken by SAFC in accordance with the terms and conditions of this Agreement and the Quality Agreement, which may include manufacturing Vector Product or supplies for Company’s commercial sale in and for its Drug Product(s), packaging Vector Product, in-process and final testing and release of Vector Product, or any component or ingredient thereof, quality assurance activities related to manufacturing and release of Vector Product and regulatory activities related to any of the foregoing, as may be more specifically identified in the Quality Agreement, the Specifications, and the applicable Purchase Order. 

1.19“Manufacturing Facility” means those parts of the manufacturing facility owned by SAFC Carlsbad, Inc., located at 6219 El Camino Real, Carlsbad, California, 92009, operated by SAFC, validated and made available in accordance with this Agreement.

1.20“Manufacturing Process” shall mean the instructions, Specifications (as well as specifications for raw materials and excipients), formulae, procedures, tests and standards developed, established and mutually agreed in writing by the Parties for Manufacturing the Vector Product.

1.21“Materials Specification” means a document detailing the specifications that are applicable for each Raw Material or Consumable, each as mutually approved in writing by the parties.

1.22“Minimum Lead Time” shall have the meaning set forth in Section 3.3(b) hereof.

1.23“Minimum Purchase Commitment” means Company’s minimum binding purchase commitment to SAFC for a minimum number of Batches of Vector Product during a Contract Year, determined as set forth in Section 3.1(a).

1.24“Out of Specification” or “OOS” shall have the meaning set forth in the Quality Agreement.

1.25“Plasmid Stocks” means any Company proprietary plasmids or reference materials received by SAFC from Company.

1.26“Process Characterization Batch” means a non-cGMP Batch produced by SAFC for the purposes of examination by the Parties as to proposed operational ranges and their individual and/or combined impact on product safety, integrity, strength, purity and quality in an effort to further define the process for commercial manufacturing of the Vector Product.

1.27“Process Performance Qualification Batch” means a cGMP Batch produced by SAFC that confirms the process design and demonstrates consistency of operating within the allowed process parameter ranges. 

1.28“Production Records” means all Records (including Batch Records, Master Batch Records, and Specifications) and other documentation, including but not limited to databases or other work product generated by SAFC for Company during and in connection with the Services, whether recorded in writing, electronically, or otherwise.

1.29“Project” means clearly identified portions within a fully-executed Task Order that sets forth specific Services.

 

	
Page 4 of 28
	
 
	
Confidential

 

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1.30“Purchase Order” means a document issued by Company to SAFC, which shall include such details as a description, quantities, and agreed upon prices for the Vector Product and/or Services for the applicable Task Order and serves as an ordering acknowledgement mechanism for financial management and invoicing.

1.31“Quality Agreement” means the Quality Agreement between Company and SAFC attached hereto and incorporated herein by reference as Exhibit 1, and as may be amended in accordance with the terms of this Agreement.

1.32“Raw Materials” means all components, reagents and solvents intended for use in the Manufacturing Process for the Vector Product, but excluding any Plasmid Stocks and Consumables, which meet the applicable Materials Specifications.

1.33“Regulations” means any and all laws, rules and regulations applicable to the performance of the Services in the country in which (a) Services are performed, or (b) a regulatory filing including results of Services is intended to be filed. Regulations shall include, without limitation, and where and when applicable; (i) the United States Food, Drug, and Cosmetic Act, as amended and any and all rules, regulations and guidance promulgated thereunder, (ii) all applicable European Union, national and local laws, standards and guidelines, (iii) any and all rules and regulations of the Regulatory Agency or any other federal or state government agency related to the conduct of clinical research studies, and (iv) any applicable guidelines promulgated by the International Conference on Harmonization, including without limitation, the ICH Harmonized Tripartite Guidelines for Good Manufacturing Practice, (v) cGMP, and (vi) cGLP.

1.34“Regulatory Agency” means (a) any regulatory or health authority in the United States or in other countries, including without limitation, the FDA and the EMA, (b) if applicable to a particular Task Order (as hereinafter defined), the relevant government regulatory authority or authorities in countries outside of the United States responsible for the conduct of clinical research studies and/or approval of pharmaceutical products, and (c) any other governmental regulatory authority or authorities identified in the Quality Agreement.

1.35“Regulatory Approval for Sale” means with respect to a country or extra-national territory, any and all approvals (including Biologic License Applications and Marketing Authorization Applications), licenses, registrations or authorizations of any Regulatory Agency necessary in order to commercially distribute, sell or market a  Drug Product in such country or some or all of such extra-national territory, including any pricing or reimbursement approvals that may be required in such country or some or all of such extra-national territory, and not including approvals for sale or distribution under compassionate use, named patient programs, or other expanded access programs.

1.36“Regulatory Filing” means any or all correspondence or petitions, to Regulatory Agencies for the purpose of obtaining or maintaining the Regulatory Approval for Sale of Drug Product or the Manufacturing Process as required by statute, or modifying or supplementing existing filings and subsequent amendments and supplements thereto, including any foreign counterparts thereof and any other filings required by Regulatory Agencies relating to the Manufacture, testing, sale or distribution of Vector Product under this Agreement.

1.37“Resins” means all chromatographic media intended to refine or purify the Vector Product, as specified in the Master Batch Record, all of which meet the applicable Materials Specifications.

1.38“Run Equivalent” shall mean one Batch of Vector Product as counted against the Minimum Purchase Commitment, and the associated Batch production price excluding any Batch testing fees (refer to Exhibit 4, Table 1).

 

	
Page 5 of 28
	
 
	
Confidential

 

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1.39“SAFC Technology” means any and all SAFC confidential information, trade secrets and SAFC intellectual property and the like.

1.40“Services” means the services to be performed by SAFC pursuant to a fully-executed Task Order under this Agreement. 

1.41“Specifications” shall mean Material, Manufacturing and Vector Product specifications set forth in Exhibit 2 hereto.

1.42“Task Order” means a mutually agreed upon and executed in writing by the Parties that describes the Services to be performed by SAFC for Company, which specifies; (a) Project scope, (b) quantity, (c) delivery dates, (d) shipping instructions and addresses, (e) storage instructions, if any, (f) price and payment schedule, and (g) related Testing. A sample form of a Task Order is attached as Exhibit 3.

1.43“Technology Transfer to SAFC” means the Services related to technology transfer of a Manufacturing Process by Company to SAFC, including any production preparatory, training or related support activities for [***].

1.44“Term” shall have the meaning set forth in Section 10.1 hereof.

1.45“Testing” means a scientific evaluation of the quality, safety and purity of Vector Product through assays performed by a qualified testing facility as more particularly described in a Task Order.

1.46“Third Party Supplier” shall have the meaning set forth in Section 3.8(c)(ii) hereof.

1.47“Vector Product” means the purified active biological ingredient in its final formulation in the applicable closure that results from the Manufacture by SAFC, whether clinical or commercial in nature and as more particularly described in the applicable Specification.

	
2.
	
Manufacture and Supply of Vector Product 

2.1General Conditions of Supply.  During the Term, SAFC shall Manufacture and supply Vector Product to Company, and Company shall purchase Vector Product from SAFC in such quantities as Company may order from time to time, subject to the limitations and requirements set forth herein. In consultation with Company, SAFC shall establish, update as necessary, and reserve sufficient qualitied personnel time, manufacturing resources, equipment and cGMP production capacity to enable SAFC to Manufacture Vector Product in accordance with SAFC’s obligations under this Agreement. All Vector Product Manufactured hereunder shall be Manufactured solely by SAFC in suites exclusively dedicated to Company at the Manufacturing Facility. SAFC may not change the Manufacturing site, location or suites for Vector Product without the prior written approval of Company. SAFC shall perform all maintenance required on equipment within the Manufacturing Facility, including maintenance required according to the equipment manufacturer’s specifications and maintenance required to ensure continued validation of the equipment to cGMP requirements. 

 

	
Page 6 of 28
	
 
	
Confidential

 

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2.2Control of Plasmid Stocks and Cell Banks; Storage Services.  

(a)SAFC shall maintain all portions of the Plasmid Stocks and Cell Bank that it receives from Company or Company’s agents in safe and secure storage under its control in accordance with the storage guidelines set out in the Quality Agreement and/or Materials Specifications, and SAFC shall not transfer the Plasmid Stocks or Cell Bank to any SAFC Affiliate or to any third party that is not specifically authorized in advance and in writing by Company. SAFC shall comply with all applicable regulatory requirements relating to general safety in handling the Plasmid Stocks and Cell Bank. SAFC shall not use the Plasmid Stocks or Cell Bank for any purpose except as contemplated by this Agreement or as otherwise authorized in writing by Company, and in no event shall SAFC modify or attempt to modify the Plasmid Stocks or Cell Bank. Upon Company’s written request, SAFC shall return all or portions of the Plasmid Stocks and Cell Bank to Company or its designee.  

(b)Storage service fees for [***] shall be contained in an annual Task Order mutually agreed to by the Parties no less than [***] prior to the next Contract Year. 

2.3Standard of Performance.  At all times during the Term, SAFC will perform the Services with due care, and in accordance with this Agreement, the Specifications, Quality Agreement and applicable laws and regulations, including and not limited to, Current Good Manufacturing Practices applicable to its facilities and to biologics, it being understood that an immaterial incident or deviation from such standards that does not affect the timing for Manufacture of a Batch (including its production, testing, or release), or delivery of a Batch, shall not by itself be deemed a breach of SAFC’s obligations hereunder and that the parties will work together in good faith to resolve any such incident or deviation pursuant to the Quality Agreement. 

2.4Changes to Specifications and Process.  The Specifications shall be amended only as agreed upon in writing by Company and SAFC; provided, however, that the Parties agree to cooperate to amend or supplement the Specifications to the extent reasonably necessary to comply with changes in applicable laws or regulations or the requirements of applicable Regulatory Agencies or as Company may reasonably request from time to time (provided such request is made in good faith).  SAFC shall follow the change control procedures set forth in the Quality Agreement for any proposed changes in the Manufacturing Process.  SAFC acknowledges that any such change(s) shall, in each case, comply with cGMP, this Agreement, all regulatory submissions, and the Quality Agreement.  In the event such amendment (whether as a result of changes in applicable laws or regulations or the requirements of applicable Regulatory Agencies or at Company’s reasonable and good faith request or otherwise) requires additional cost or schedule adjustments for the Manufacture of Vector Product hereunder, Company and SAFC shall agree in good faith on an equitable adjustment to price or schedule or both, as appropriate.  Any such amended Specifications shall be reflected in and attached hereto as an amended and restated Exhibit 2.

2.5Raw Materials and Consumables.

(a)Procurement. SAFC shall be responsible for the procurement of all [***] necessary for the Manufacture of Vector Product. SAFC shall use commercially reasonable efforts to procure all [***], consistent with and having regard to such matters as security and sources of supply, quality of product, volume requirements, terms and conditions of supply and the Manufacturing schedule. The Parties shall use their good faith efforts to identify and establish a list of [***] by [***] and update Exhibit 6, as attached hereto and incorporated herein.

(b)Compliance with Specifications. All [***] hereunder shall comply with the applicable Materials Specifications and the Master Batch Record.

 

	
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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

(c)Alternate Sources of Supply. SAFC shall be responsible to establish a source or sources of supply for all [***] sufficient to ensure SAFC’s ability to fulfil its obligations to Manufacture Vector Product hereunder in a timely and cost-effective manner, and in accordance with the Quality Agreement. [***].

(d)Sole-Sourced Raw Materials and Consumables. For any sole-sourced [***] that SAFC has provided proper notice to Company in accordance with Section 2.5(c)(i), [***].  

(e)Vendor Audits.  SAFC shall, conduct all necessary audits on vendors and suppliers of Raw Materials, Consumables and Resins to ensure that such vendors and suppliers comply with applicable regulatory and quality requirements.  

(f)Inventory of Materials and Spare Parts. SAFC shall establish, update as necessary and implement, inventory management processes and procedures designed to ensure that SAFC is able to obtain, on a timely basis, all [***] necessary to Manufacture Vector Product hereunder.  SAFC shall ensure that an inventory of spare parts for all equipment it uses to Manufacture Vector Product is maintained consistent with the manufacturers’ recommendations.

(g)Storage and Use of Materials and Vector Product. SAFC shall ensure that all [***] that are in SAFC's control, as well as all Manufacturing Process intermediates and Vector Product in SAFC’s control, are stored in accordance with the terms and conditions of the storage guidelines set out in the Quality Agreement, the Materials Specifications and/or the Master Batch Record (as applicable), or as otherwise mutually agreed to by SAFC and Company in writing.

2.6Quality Control and Release.  The quality control(s) and the release(s) of Vector Product (including documentation) shall be done by SAFC in accordance with the Quality Agreement.  Pursuant to Section 4.3 below, Company shall have the right to reject Vector Product that does not meet the quality control and release testing requirements agreed upon by SAFC and Company in the Specifications.

2.7Access to the Manufacturing Facility

(a)Inspections.  Upon reasonable advance notice, and at mutually agreeable times and dates during normal business hours and in accordance with any requirements of the Quality Agreement, SAFC will permit Company representatives to visit the Manufacturing Facility, discuss the Services with appropriate officials of SAFC, and inspect Production Records, including but not limited to all data, relevant to the Services.  Such Manufacturing Facility visits shall also be permitted during the data retention period described in the Quality Agreement, if any. Company will comply with any and all SAFC safety, security and confidentiality measures for the Manufacturing Facility and other related facilities. 

(b)Person-In-Plant. In addition to the foregoing inspection right and audit right otherwise set forth herein, with [***] prior written notice to SAFC, Company may designate an individual from time to time in its discretion (the “Person-In-Plant”), who will be present in the Manufacturing Facility during operating hours and during active Manufacturing, to observe the testing and production phases of the Manufacturing Process, and to consult with SAFC. Company shall cause the Person-In-Plant to (i) not cause any disruption to SAFC’s business activities and (ii) comply with SAFC’s safety, security and confidentiality measures. The duration and activities for Person-In-Plant shall be pre-approved by SAFC in advance of scheduling and entry of such Person-In-Plant. 

2.8Documentation.  

(a)General.  Upon completion of Manufacture of each Batch of Vector Product, SAFC shall provide to Company the following documentation related to the Manufacturing of Vector Product in accordance with the Quality Agreement, as applicable: (i) a Certificate of [***], (ii) all Deviations, and (iii) the executed Batch Record.   

 

	
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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

(b)Confidential Records.  The Master Batch Records and all documents referred to in Section 2.8(a) shall be Confidential Information of Company and shall not be used or disclosed by SAFC other than for the purposes of permitting SAFC to exercise its rights or fulfil its obligations under this Agreement (including but not limited to, the provision of the Master Batch Record and other documents to Company for quality review) and, where necessary, for disclosure to the relevant Regulatory Agencies in order to comply with regulatory requirements relating to the Manufacturing of Vector Product by SAFC. 

(c)Retention of Documentation.  All Production Records related to the Manufacturing of Vector Product shall be owned by Company and archived with SAFC after Manufacturing for a period as stated in the Quality Agreement. 

2.9Safety of Vector Product.  In each case in accordance with the Quality Agreement: (i) each Party shall immediately notify the other Party of any unusual health or environmental occurrence relating to the Vector Product; and (ii) each Party shall advise the other Party immediately of any safety or toxicity problems of which it becomes aware regarding the Vector Product.

	
3.
	
Purchase Commitment, Forecasts and Orders; Release, Delivery and Storage; Delay and Third Party Supplier

3.1Minimum Purchase Commitment; Run Equivalents; Additional Batches and Manufacturing Capacity; Support Studies. 

(a)During the Term, Company shall purchase the Minimum Purchase Commitment which shall be equal to [***]. In the event Company fails to purchase the Minimum Purchase Commitment [***]. Such payment requirement for the shortfall of Batches shall be invoiced [***].

(b)Notwithstanding Section 3.1(a), in any Contract Year in which [***]. 

(c)Company may request additional Batches beyond its Minimum Purchase Commitment, provided that Company makes such request upon written notice to SAFC [***]. 

(d)Company may request support studies related or unrelated to any Batches or Technology Transfer to SAFC under this Agreement, and such support studies shall be incremental to any Minimum Purchase Commitment and shall be under a separate and distinct Task Order outlining the scope of work and cost of such support studies.

 

3.2Forecasts; Change of Vector Product. 

(a)In advance of the Effective Date, Company shall determine and provide to SAFC, Company’s initial Contract Year’s forecast, which shall then be updated on a [***] basis. Each [***] update shall include a “rolling” [***] update that includes [***]. Subsequent Contract Year forecasts will be due [***].  Company may update the previous forecast more frequently than on a [***] basis. Forecasting shall not in any way change or affect Company’s Minimum Purchase Commitment obligations.

(b)At Company’s reasonable request in advance, SAFC will review with Company the inventory and lead times for major components of the Manufacturing Process.  Company acknowledges and understands that any forecast will be used by SAFC for planning purposes (including raw material acquisitions and investment in equipment and other resources) in order to make available the production capacity required to Manufacture and supply the forecasted amounts of Vector Product within the time frames agreed to by both Parties.

(c)[***].

 

	
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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

3.3Initial Supply; Purchase Orders, Task Orders, Invoicing and Payment. 

(a)To initiate SAFC’s Manufacture and supply of Vector Product for the initial Contract Year, SAFC shall issue a Task Order for Company’s review and execution and Company shall then, [***] prior to the first scheduled production start date issue a binding written Purchase Order for its purchase of Vector Product. Both the Task Order and the Purchase Order shall be in accordance with the Minimum Purchase Requirement and may include additional Batches as agreed upon pursuant to Section 3.1(c). The Parties acknowledge, recognize and agree that the Purchase Order is an ordering mechanism for proper financial management and invoicing between the Parties, and has not effect on the terms and conditions of this Agreement, which shall prevail in the event of any other terms and conditions contained in a Purchase Order.

(b)For each subsequent Contract Year following the initial Contract Year, a Task Order for the Contract Year shall be executed between the Parties in writing as above and Company shall issue to SAFC a Purchase Order [***] prior to the start of the Contract Year, or such shorter time period as may be agreed upon by the Parties in writing, for its purchase of Vector Product for such Contract Year.  The minimum number of days between the date of a Purchase Order and the Manufacture start date of Vector Product under this Section 3.3(b) and Section 3.3(a) above shall be referred to hereinafter as the “Minimum Lead Time”. 

(c)Within [***] of receipt of a Purchase Order, SAFC shall notify Company in writing of its acceptance of the Purchase Order.  If SAFC fails to respond within such [***] period, the Purchase Order shall be deemed accepted, but only to the extent that any amount ordered is not in excess of the Minimum Purchase Commitment and that the requested delivery date satisfies the Minimum Lead Time.  SAFC, in its sole discretion, may refuse and reject a Purchase Order if the Purchase Order does not accurately reflect the agreed upon Task Order.

(d)If a Purchase Order exceeds the Minimum Purchase Commitment, or does not meet the Minimum Lead Time, SAFC, in its sole and absolute discretion, may (i) accept such Purchase Order, and/or (ii) adjust the price and other related terms taking into consideration the amount of the order that exceeds the Minimum Purchase Commitment and such shorter lead-time. In the event Company wishes not to proceed after such adjustments by SAFC, the Purchase Order shall be deemed to be rejected.

(e)Invoicing and Payment. 

(i)[***]. 

(ii)[***]. 

(iii)[***].  

3.4Release of Vector Product.  

(a)SAFC shall notify Company when (i) the Manufacture of each Batch of Vector Product is complete, including (ii) all Manufacturing records have been reviewed, (iii) all testing is completed, reviewed, and Vector Product meets Specifications, (iv) all Deviations have been adequately reviewed and approved, and (iv) Vector Product has been released by SAFC, as applicable and in accordance with the Quality Agreement.  

(b)[***].  

3.5Delivery, Title and Risk of Loss.  All Vector Product supplied by SAFC hereunder shall be supplied FCA SAFC’s shipping point within the meaning of [***].  [***].  SAFC may only make delivery in installments with the prior approval of Company, and if approved, all such installments to be separately invoiced and paid for when due per invoice, without regard to subsequent deliveries.  Delay in delivery of any approved installment shall not relieve Company of its obligations to accept any and all remaining deliveries.

 

	
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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

3.6Packaging.  SAFC will preserve, package, handle, and pack all Vector Product so as to protect Vector Product from loss or damage, in conformance with the Specifications and the Quality Agreement.

3.7Storage.  SAFC shall hold all Vector Product under the storage conditions established pursuant to the Quality Agreement and in accordance with cGMP.  SAFC, at its own cost, shall store Vector Product for a period not to exceed [***] after Vector Product has been released in accordance with Section 3.4 above.  Any Vector Product held by SAFC beyond the time periods specified above shall be subject to storage charges at SAFC’s current list prices or as mutually agreed to by the Parties in writing. 

3.8Delay and Third Party Supplier. 

(a)If SAFC is or will be unable for any reason (including an event of Force Majeure under Section 12.18 hereof) to [***].   

(b)[***]

(c)[***]

(i)[***]

(ii)[***]

(iii)[***]

(d)[***].

(e)For the sake of clarity, the remedies provided in this Section 3.8 and the timelines for the completion of any investigation under Section 3.8(b) do not affect (i) any other obligations of SAFC contained herein; (ii) Company’s right to terminate pursuant to Section 10.2(a)(i); (iii) or any other remedies available to Company as provided herein.

	
4.
	
General Manufacturing Requirements

4.1Specifications.     In the event of a conflict between the provisions of this Agreement and the provisions of the Quality Agreement, the provisions of the Quality Agreement shall prevail only for all quality related requirements, responsibilities and obligations, otherwise, this Agreement shall prevail. Neither Party shall make changes to the Production Records or the Specifications without the prior written approval of the other party which approval will not be unreasonably withheld. SAFC shall only make changes in the Standard Operating Procedures (SOPs), production equipment, production procedures, or testing methods existing as of the date of this Agreement which materially affect the Services in accordance with the provisions contained in the Quality Agreement. SAFC shall maintain all Production Records and other records as are necessary and appropriate to demonstrate compliance with the Regulations. Company shall be entitled to request SAFC to change the Specifications and the SOPs. SAFC shall use commercially reasonable efforts to accommodate such change; provided that Company will reimburse SAFC the reasonable and necessary costs SAFC incurs in making any such change; provided further that the parties shall engage in good faith negotiations to adjust the costs to reflect the increase or decrease of ongoing costs hereunder resulting from any such change; provided further that if the parties cannot reach agreement to adjust the costs pursuant to this Section 4.1 despite such good faith negotiations, then SAFC shall not be required to change the Specifications or SOPs as requested by Company.

4.2Testing.  If provided for in the applicable Task Order with respect to a Batch, SAFC shall test such Batch to ensure compliance with the Specifications. 

 

	
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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

4.3Acceptance.  Subject to Section 4.4 below, Company shall have a period of [***] from the date of its (or its designee’s) receipt the Batch Record (which includes the Certificate of [***]) to reject in writing the Vector Product for nonconformity of such Batch with the Specifications. If no written notification is received by SAFC within the [***] period, such Batch is deemed accepted. If Company rejects such shipment in writing within the [***] time period, it shall promptly so notify SAFC and provide sufficient detail of the nonconformity, and the provisions of Section 5.2 below shall apply.

4.4Latent Defects.  If after accepting a shipment of Vector Product, Company subsequently discovers latent material defects [***]. 

4.5Deviation Report.  If during the Manufacture, including but not limited to the processing, storage, distribution, testing, transport, disposal or other handling, of Vector Product by SAFC an unexpected result arises that [***].

4.6SAFC’s costs shall not include Company’s materials, which include but are not limited to cells, plasmids, equipment, raw materials, consumables or other materials. 

	
5.
	
Rejection, Defects and Non-Conforming Goods 

5.1Disagreement Concerning Fulfilment of Specifications. In the event of any disagreement between the Parties as to whether Vector Product conforms to the Quality Agreement, the applicable Specifications, or cGMP, the quality assurance representatives of the Parties will attempt in good faith to resolve any such disagreement and the Parties will follow their respective SOPs. If the foregoing discussions do not resolve the disagreement within [***] of Company’s notice pursuant to Section 4.3 or 4.4, a representative sample of such Vector Product and/or relevant documentation will be submitted to an independent testing laboratory (in the case of an alleged failure to meet Specifications) and/or independent cGMP quality or regulatory consultant (in the case of an alleged failure to comply with cGMP), as appropriate, that are mutually agreed upon by the Parties for tests and final determination as to whether such Vector Product conforms with Specifications and/or cGMP quality standards. The laboratory must meet SAFC supplier qualification standards for cGMP test laboratory. The laboratory and consultant, as applicable, must be of recognized standing in the industry, and consent to the appointment of such laboratory and consultant will not be unreasonably withheld or delayed by either Party. Such laboratory will use the test methods contained in the applicable Specifications. The determination of conformance by such laboratory and/or cGMP consultant, as applicable, with respect to all or part of such Vector Product will be final and binding on the Parties, absent manifest error. The fees and expenses of the laboratory and/or consultant, as applicable, incurred in making such determination will be paid by the Party against whom the determination is made. 

5.2Remedies for Non-Conforming Product.  

(a)If any Vector Product Manufactured by SAFC fails to conform to Specifications or cGMP (unless the non-conformity is attributable to Company’s negligence or misconduct), SAFC shall [***]. Non-conforming Vector Product shall be disposed of in accordance with the Quality Agreement and at SAFC’s expense (unless the non-conformity is attributable to Company’s negligence or misconduct).  If Company is directed to destroy non-conforming Vector Product, then Company shall provide SAFC a certificate certifying such destruction.

(b)Except as provided for pursuant to any Party’s indemnification obligations for third party claims, the remedy described in this Section 5.2 shall be Company’s sole remedy and SAFC’s only liability for non-conforming Vector Product. 

 

	
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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

5.3Deviations and OOS.  SAFC and Company shall cooperate in the investigation and response to any Vector Product complaints concerning Deviations and OOS, all in accordance with the Quality Agreement.

	
6.
	
Pricing; Terms of Payment and SAFC Performance Bonus 

6.1Currency.  Except as otherwise expressly indicated, all references to “$” or to “dollars” in this Agreement shall be read as referring to the legal tender of the United States of America.

6.2Pricing. The pricing for Vector Product Manufactured under this Agreement is set forth in the Price and Payment Schedule as more particularly described in Exhibit 4.  [***].  All prices are quoted in United States Dollars. 

6.3Invoices and Payments.  SAFC shall invoice Company per Section 3.3(e) and the Price and Payment Schedule in Exhibit 4.  All payments made hereunder are due within [***] from the receipt of the SAFC invoice.  Payments shall be made to SAFC in accordance with the instructions on the invoice.  All payments hereunder shall be made in United States Dollars. In the event Company disputes an invoice or portion thereof, Company shall be required to do so in writing to SAFC within [***] from the receipt of such disputed invoice.

6.4Overdue Payments.  Company shall pay interest on all past-due amounts at a rate of interest equal to the lesser of [***] or the maximum rate permitted by applicable law.  

6.5Annual Price Adjustment.  To reflect changes in the cost of labor and raw materials, SAFC may adjust the Batch production price each Contract Year of the Term following the initial Contract Year in accordance with the following: (a) SAFC shall provide Company with written notice of any [***]; (b) [***]. 

6.6Taxes.  

(a)If Company must withhold from any payment to SAFC under this Agreement any taxes required to be withheld by Company under the applicable laws of any country, state, territory or jurisdiction, such amount shall be paid to the appropriate taxing authorities.  Upon request, Company shall provide SAFC with sufficient documentation of such withholding as is reasonably available to allow SAFC to verify such withholding and to document such tax withholdings for purposes of claiming tax credits and similar benefits.

(b)Any use tax, sales tax, excise tax, duty, custom, inspection or testing, or any other tax, fee or charge of any nature whatsoever imposed by any governmental authority, on or measured by the transaction between Company and SAFC, but excluding any tax payable on income, revenue, profits or capital of SAFC, shall be paid by Company in addition to any other amounts due hereunder.  If SAFC recovers all or any portion of any tax, fee or charge paid by Company, SAFC shall credit Company with the amount recovered.

6.7SAFC Performance Bonus. Company shall pay SAFC a performance bonus as more particularly described in Exhibit 4 (Section 3) (“Performance Bonus”). Such Performance Bonus shall be invoiced separately by SAFC to Company [***] of the end of the applicable Contract Year.

	
7.
	
Recall, Warranties, Indemnification and Insurance

7.1Recall. 

(a)Company shall be responsible for making the determination and for conducting any recall of Drug Product, and SAFC shall co-operate with and give all reasonable and necessary assistance to Company in conducting any such recall to the extent it relates to Vector Product.  Notwithstanding anything herein to the contrary, SAFC shall only bear the cost and expense of a recall directly resulting from [***].  In the event of such recall or similar action, each Party shall use commercially reasonable efforts to mitigate the costs associated therewith. 

 

	
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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

(b)In the case of a dispute as to the existence or level of non-conforming Vector Product in connection with a recall under Section 7.1(a) above, the matter shall be resolved in accordance with the procedures set forth in Section 5.1. 

7.2SAFC Representations and Warranties.  SAFC hereby represents and warrants as follows:

(a)The execution, delivery and performance of this Agreement does not conflict with, violate or breach any agreement to which SAFC is a party or SAFC’s constituent documents, and SAFC is not prohibited or limited by any law or agreement (to which it is a party) from entering into this Agreement and the performance of this Agreement will not create any conflict of interest with any other business or activity engaged in by SAFC;

(b)Vector Product shall be Manufactured and shipped in compliance with cGMP, the Master Batch Record, the Specifications, the Quality Agreement and all other applicable laws, rules and regulations;

(c)SAFC and its Affiliates, approved subcontractors and any person used by SAFC and its Affiliates and subcontractors to perform services under this Agreement (i) have not been debarred and are not the subject of a conviction described in Section 306 of the United States Food, Drug and Cosmetic Act, 21 U.S.C. § 335a; (ii) are not subject to any similar sanction by any government regulatory authority; and (iii) SAFC shall notify Company immediately in writing if SAFC, its Affiliates or any subcontractor or any person used to perform services hereunder, as applicable, is subject to the foregoing, or of any action, suit, claim, investigation or proceeding;  

(d)All Vector Product delivered by SAFC hereunder will conform to the Quality Agreement and the Specifications; and

(e)SAFC will have obtained and maintained in effect all such approvals and permits as may be required under applicable laws, rules, regulations and requirements to operate the Manufacturing Facility for the purposes of Manufacturing Vector Product under the Quality Agreement and under this Agreement. SAFC shall make copies of such registrations and all related documents available for viewing by Company and its designees for inspection, upon prior reasonable request from Company.

7.3Company Representations and Warranties. Company represents and warrants that the execution, delivery and performance of this Agreement does not conflict with, violate or breach any agreement to which Company is a party or Company’s constituent documents; Company is not prohibited or limited by any law or agreement to which it is a party from entering into this Agreement; and the performance of this Agreement will not create any conflict with any other business or activity engaged in by Company.

7.4Disclaimer.  EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE PARTIES MAKE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY, WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, OR WARRANTY OF NON-INFRINGEMENT, WHETHER ARISING BY LAW, COURSE OF DEALING, COURSE OF PERFORMANCE, USUAGE OF TRADE OR OTHERWISE, ALL OF WHICH ARE EXPRESSLY DISCLAIMED.

7.5Company Indemnification.  Subject to Section 12.5, Company shall indemnify, defend and hold harmless SAFC, its Affiliates and its or their directors, officers and employees from all actions, losses, demands, costs and liabilities arising from any third party claim (including reasonable attorneys’ fees) to which SAFC is or may become subject insofar as they arise out of or are alleged or claimed to arise out of: 

(a)[***];

(b)[***];

 

	
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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

(c)[***];

(d)[***];

(e)[***];

(f)[***]; or

(g)[***];

(h)in each case except that Company shall have no obligation to indemnify, defend or hold harmless SAFC, its Affiliates and its or their directors, officers and employees for any negligent acts or omissions or willful misconduct by SAFC or its Affiliates and its or their directors, officers, employees, agents or permitted subcontractors associated with its obligations under this Agreement, or for any losses or claims whatsoever to the extent that SAFC has an obligation to indemnify Company with respect to such losses and claims pursuant to Section 7.6 below.

7.6SAFC Indemnification.  Subject to Section 12.5, SAFC shall indemnify, defend and hold harmless Company, its Affiliates and its or their directors, officers and employees from all actions, losses, demands, costs and liabilities arising from any third party claim (including reasonable attorney’s fees) to which Company is or may become subject insofar as they arise out of or are alleged or claimed to arise out of: 

(a)[***]; 

(b)[***];

(c)in each case except that SAFC shall have no obligation to indemnify, defend, or hold harmless Company, its Affiliates and its or their directors, officers and employees for any negligent acts or omissions or willful misconduct by Company or its Affiliates and its or their directors, officers, employees, agents or permitted subcontractors associated with its obligations under this Agreement, or for any losses or claims whatsoever to the extent that Company has an obligation to indemnify SAFC with respect to such losses and claims pursuant to Section 7.5 above.

7.7Indemnification Procedure.  Either Party intending to seek indemnification from the other Party under Sections 7.5 or 7.6 above, as the case may be, shall give the other Party prompt notice of any such claim or lawsuit (including a copy thereof) served upon it and shall fully cooperate with the other Party and its legal representatives in the investigation of any matter which is the subject of indemnification.  Such Party seeking indemnification shall not unreasonably withhold its approval of the settlement of any claim, liability or action covered by the above indemnification provisions.  Notwithstanding the foregoing, the failure to give timely notice to the indemnifying Party shall not release the indemnifying Party from any liability to the Party seeking indemnification to the extent the indemnifying Party is not prejudiced thereby.

7.8Company Insurance.  Without limiting its liability under this Agreement (except as may be otherwise expressly provided in this Agreement), during the Term and for five (5) years after the expiration or termination of this Agreement, Company shall obtain and maintain commercial general liability insurance of [***]. With respect to all insurance coverage required under this Section, (i) Company shall, promptly upon SAFC’s request, furnish SAFC with certificates of insurance evidencing such insurance and (ii) all policies shall include provisions for at least [***] prior written notice of cancellation.  

 

	
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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

7.9SAFC Insurance.  Without limiting its liability under this Agreement (except as may be otherwise expressly provided in this Agreement), during the Term and for five (5) years after the expiration or termination of this Agreement, SAFC shall obtain and maintain the following minimum insurance coverages with financial sound and nationally reputable insurers: [***]. Company shall be named as an additional insured (except on policies for workers compensation and professional liability/ errors and omissions) and SAFC will provide Company with a certificate of insurance evidencing such coverages upon Company’s written request. SAFC will provide Company with [***] advance written notice of any material change or cancellation in coverage or limits. 

	
8.
	
Regulatory Matters; Compliance with Laws

8.1Regulation of Manufacturing Process. If Company, as the Sponsor under the FDA regulations who holds the investigational new drug application or biologics license application is required by the FDA (or the corresponding foreign equivalent required by the EMA or other Regulatory Agency), or any other Regulatory Agency to validate or re-validate Manufacturing Processes that will impact the Manufacturing of Vector Product, Company shall notify SAFC and consult with SAFC regarding the required activities.  SAFC shall only be responsible for the costs of any such validation or re-validation if the validation or re-validation is required due to (i) the non-compliance of the Manufacturing Facility, or (ii) any acts, omissions or deficiencies with respect to the personnel, training or other items within SAFC’s reasonable control; otherwise any and all such costs or expenses shall be the sole responsibility and obligation of Company.    

8.2Regulatory Testing Requirements.   Should, during the course of conducting the Services, regulatory testing requirements covering the Vector Product change such that additional material expense would be incurred by SAFC to satisfy the terms of this Agreement, those expenses will be the responsibility and obligation of Company.

8.3Correspondence.  SAFC will notify Company (pursuant to the Quality Agreement) promptly upon receipt of any correspondence from a Regulatory Agency, which relates to the Vector Product.  In addition, SAFC shall provide to the Regulatory Agencies all documents and information requested by such authority, and shall submit to all inquiries, audits and inspections by the Regulatory Agencies.  

8.4Compliance with Laws; Authorizations.  In performing this Agreement, each Party shall (i) comply with all applicable laws and regulations and (ii) obtain all releases, licenses, permits or other authorization required by any governmental body or authority. 

8.5Regulatory Matters

(a)Records.SAFC shall maintain all records required by the Quality Agreement, or as otherwise agreed to in writing by SAFC and Company. SAFC agrees that, in response to any complaint, or in the defense by Company of any litigation, hearing, regulatory proceeding or investigation relating to Vector Product, SAFC shall use reasonable efforts to make available to Company during normal business hours and upon reasonable prior written notice, such SAFC employees and records reasonably necessary to permit the effective response to, defense of, or investigation of such matters, subject to appropriate confidentiality protections. If SAFC incurs costs or expenses with respect to the foregoing attributable to Company’s negligence or willful misconduct, Company shall reimburse SAFC for reasonable costs and expenses incurred by SAFC.

 

	
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[***] INDICATES MATERIAL THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

(b)Complaints.Company shall have responsibility for reporting any complaints relating to Vector Product to Regulatory Agencies, including, but not limited to, complaints relating to the Manufacture of Vector Product in accordance with the Quality Agreement, or as otherwise agreed in writing by SAFC and Company. If SAFC incurs costs or expenses with respect to the foregoing attributable to Company’s negligence or willful misconduct, Company shall reimburse SAFC for reasonable costs and expenses incurred by SAFC.

(c)Regulatory Communications and Correspondence. Any and all communications from and to Regulatory Authorities related to Vector Product or to the Manufacture of Vector Product at the Manufacturing Facility shall be handled in accordance with the Quality Agreement, or as otherwise agreed in writing by SAFC and Company.

(d)Regulatory Filings and Maintenance. SAFC shall prepare and maintain all Regulatory Filings and Manufacturing files, certificates, authorizations, data and other records that directly or indirectly pertain to the Manufacture of ABI, as further set forth in the Quality Agreement or as otherwise agreed in writing by SAFC and Company. 

(e)Cooperation in Obtaining Government Approvals. As set forth in the Quality Agreement, or as otherwise agreed to in writing by SAFC and Company, at Company’s request, SAFC shall provide Company with such existing documents and information (or copies thereof) held by SAFC to assist Company in securing and maintaining Regulatory Agency approvals for Vector Product. In addition, SAFC shall provide Company with such information as is reasonably requested in writing by Company relating to the Manufacturing Process, the Master Batch Record, SAFC services performed under this Agreement or other ABI-related documentation.

(f)Ownership of Regulatory Filings. Company shall be the sole owner of all Regulatory Filings and all governmental approvals obtained by Company from any Regulatory Agency with respect to Vector Product.

(g)Company Access to Manufacturing Data and Documentation. Company shall have full access to and the right to use and reference any, correspondence, facility and engineering records and diagrams, validation documentation, lot files, reports, analyses, regulatory requirements and any other data and documentation generated in connection with the Manufacturing activities conducted by SAFC hereunder, and SAFC shall provide Company with copies of the foregoing upon request.

	
9.
	
Confidentiality; Intellectual Property License

9.1Confidentiality Obligations of SAFC.  In the course of the performance of this Agreement, Company may, from time to time, disclose Confidential Information of Company to SAFC or its Affiliates. Confidential Information of Company shall specifically include but not be limited to the Plasmids, Cell Banks, any documentation relating to the Manufacturing Process provided by Company to SAFC, all elements of the Manufacturing Process provided by Company to SAFC or acquired by Company from SAFC, Vector Product specific unit operations of the Manufacturing Process, the Vector Product, clinical data and information, business plans and regulatory and product strategies and information. Except as expressly permitted otherwise by the terms of this Agreement, SAFC shall:  (i) maintain in confidence and not disclose the Confidential Information of Company to any third party, except on a need-to-know basis to SAFC’s (or its Affiliates’) employees and agents to the extent such disclosure is reasonably necessary in connection with SAFC’s (or its Affiliates’) activities as expressly authorized by this Agreement and upon obligations of confidentiality similar to those set forth herein; and (ii) not use or grant the use of the Confidential Information of Company for any purpose other than the performance of SAFC’s obligations hereunder. 

 

	
Page 17 of 28
	
 
	
Confidential

 

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

9.2Confidentiality Obligations of Company.  In the course of the performance of this Agreement, SAFC may, from time to time, disclose Confidential Information of SAFC to Company or its Affiliates.  Except as expressly permitted otherwise by the terms of this Agreement, Company shall:  (i) maintain in confidence and not disclose the Confidential Information of SAFC to any third party, except on a need-to-know basis to Company’s (or its Affiliates’) employees and agents to the extent such disclosure is reasonably necessary in connection with Company’s (or its Affiliates’) activities as expressly authorized by this Agreement and upon obligations of confidentiality similar to those set forth herein; and (ii) not use or grant the use of the Confidential Information of SAFC for any purpose other than the performance of Company’s obligations hereunder. 

9.3Exceptions.  The provisions of Sections 9.1 and 9.2 above shall not apply to any Confidential Information of the disclosing Party that can be shown by competent evidence by the receiving Party:

(a)To have been known to or in the possession of the receiving Party without any separate obligation of confidentiality before the date of its actual receipt from the disclosing Party;

(b)To be or to have become readily available to the public other than through any act or omission of any Party in breach of any confidentiality obligations owed to the disclosing Party;

(c)To have been disclosed to the receiving Party, other than under an obligation of confidentiality, by a third party which does not have an obligation to the disclosing Party not to disclose such information to others; or

(d)To have been subsequently independently developed by the receiving Party without use of or reference or access to the disclosing Party’s Confidential Information.

9.4License.  During the Term, Company hereby grants to SAFC a royalty-free, non-exclusive license under any know-how, trade secrets, copyrights, designs, databases, discoveries, improvements and inventions (whether patentable or not) related to Vector Product or the Manufacture of Vector Product that are owned or controlled by Company and that are reasonably required for SAFC’s performance of its obligations under this Agreement, but only for such purposes and only to the extent reasonably required for SAFC to perform its obligations under this Agreement.

9.5Proprietary Rights. 

(a)Except as expressly set forth in this Agreement each Party owns, and shall continue to own its existing intellectual property, without conferring any interests therein on the other Party. Nothing contained in this Agreement nor any disclosure or provision to SAFC of any Company Confidential Information or other Company information or items shall be deemed to transfer or grant to SAFC or any other person or entity any right to use or exploitation thereof nor to any right, title, interest, or license in, to or under any patent, patent application or other intellectual property, right or asset of Company (including without limitation, any Company Materials, cell banks, specimens, documentation, Production Records, Specifications, raw data, work product, improvements, discoveries, know-how, inventions and other insights), whether patentable or not.

 

	
Page 18 of 28
	
 
	
Confidential

 

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

(b)SAFC agrees that all data, information, documents, concepts, ideas, improvements and other insights, exclusive of Process Inventions (defined below), arising from SAFC’s performance of its obligations under this Agreement (collectively “Inventions”), shall promptly be disclosed to Company in writing.  SAFC agrees that all Inventions are the exclusive property of Company. SAFC hereby assigns to Company all right, title and interest, including copyrights and other intellectual property rights, in and to all Inventions which may be developed as a result of SAFC’s performance of the Manufacturing, or by SAFC in the course of performing its obligations under this Agreement.  SAFC will, at no cost to Company, execute (and will ensure that its employees will execute) any and all documents and, at Company’s cost, do any and all things reasonably requested by Company to vest and perfect Company’s interest in the Inventions.

(c) In performing the Manufacturing and in applying SAFC Technology to the Manufacture of the Vector Product, SAFC may develop ideas, know-how, inventions, techniques, improvements and other technology, whether or not patentable or copyrightable, and associated intellectual property that are of general applicability, or are applicable to the conduct of its business (“Process Inventions”). For the sake of clarity, ideas, know-how, inventions, techniques, improvements and other technology arising from the application of Company Confidential Information technology, or that relate exclusively to Vector Product or Manufacturing Process are Inventions and not Process Inventions. 

(d)SAFC shall ensure that all of SAFC’s employees, agents and authorized contractors are employed or engaged on terms consistent with this Section.

9.6Company Materials. As between the Parties, Company shall own and retain all rights in and title to the biological materials described [***].

	
10.
	
Term and Termination.

10.1Term. The initial term this Agreement shall commence as of the Effective Date and shall continue in full force and effect [***] (“Initial Term”), unless earlier terminated as provided in Section 10.2. The Initial Term and any duly exercised extension to the Initial Term, may be referred to herein as the “Term”. 

10.2Termination. Notwithstanding the provisions of Section 10.1 above, 

(a)Either Party may terminate this Agreement as follows:

(i)Termination for Material Breach.  Either Party may terminate this Agreement by written notice at a date set in the notice (allowing at least [***] for cure) in the event of a material breach of this Agreement by the other Party; provided that the breaching Party fails to cure such breach within [***] from the date of such notice, or if the nature of the breach is such as to reasonably require more than [***] to cure, the Party (1) fails to use diligent efforts to cure such material breach, or (2) fails to cure such material breach within an additional [***] period.

(ii)Insolvency. If either Party shall become insolvent or shall make or seek to make an arrangement with, or an assignment for the benefit of creditors, or if proceedings in voluntary or involuntary bankruptcy shall be instituted by, on behalf of or against such Party, that is not dismissed within [***], or if a receiver or trustee of such Party’s assets shall be appointed, or bankruptcy proceedings begin, the other Party may terminate this Agreement, as may be permitted by the applicable laws, with immediate effect. 

 

	
Page 19 of 28
	
 
	
Confidential

 

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

(iii)Force Majeure; No-Fault Termination. Either Party shall have the right to terminate this Agreement, upon providing written notice thereof to the other Party, such termination to be effective [***] from the effective date of such notice if, as a result of a Force Majeure Event, a Party is unable fully to perform its obligations under this Agreement for any consecutive period of [***], unless the Parties mutually agree in writing upon a shorter time period.

(b)Clinical Trial Failure. Prior to Company’s first Drug Product to receive Regulatory Approval for Sale, Company may terminate this Agreement upon [***] written notice of a clinical trial for a Drug Product is terminated or if Regulatory Approval for Sale is not granted following Company’s submission of an application for Regulatory Approval for Sale. 

10.3Rights and Obligations Upon Termination.

(a)Return of Inventory and Confidential Information.  In the event of any termination or expiration, SAFC shall return to Company: (i) all Company property (at Company’s expense, unless Company terminates this Agreement pursuant to Section 10.2(a)(i) or (iii), in which case such property shall be returned at SAFC’s expense), except to the extent required to be retained by law or to comply with such Party’s continuing obligations hereunder; and (ii) all Confidential Information of Company and shall make no further use of such Confidential Information without the prior written consent of Company.  In the event of any termination or expiration of the Term, Company shall return to SAFC all Confidential Information of SAFC and shall make no further use of such Confidential Information without the prior written consent of SAFC; provided, however, that Company may retain a reasonable number of copies to exercise its rights under Section 9, but which shall remain subject to the obligations of non-use and confidentiality set forth in this Agreement.

(b)Payments.  Termination of this Agreement shall not release either Party from the obligation to make payment of all amounts owing to the Party at the time of such termination. Upon termination of this Agreement by SAFC pursuant to Section 10.2, Company shall take delivery and pay for all Vector Product that is subject to an open Purchase Order, pay all monies due and owing pursuant to this Agreement and reimburse SAFC for its costs for all material, work in process, finished Vector Product and all other outstanding inventory (meaning all raw materials that are specifically required and purchased by SAFC for the Manufacture of the Vector Product) to the extent that such items were reasonably acquired by SAFC to meet its obligations hereunder in a timely manner, and make any such other payments to SAFC as required under this Agreement. 

(c)Raw Materials and Consumables.  Upon expiration or termination of this Agreement by Company, Company may elect (but shall have no obligation) to purchase from SAFC, at SAFC’s actual cost, all remaining usable Raw Materials and Consumables paid for by SAFC for the Manufacture of Vector Product under this Agreement as of the date of expiration or termination, together with all appropriate documentation related to such quantities of Raw Materials and Consumables.   

(d)Incomplete Task Orders. Upon termination or expiration of this Agreement, SAFC shall make all necessary arrangements to have any open and incomplete Task Orders completed or fulfilled by another contract manufacturer. SAFC’s obligations pursuant to this Section 10.3(d) shall include a technology transfer as may be necessary to a new contract manufacturer selected by Company or Company itself, in accordance with the provisions of Section 3.8(iii); provided, however, unless this Agreement is terminated by Company pursuant to Section 10.2(a), Company shall bear any and all cost of such technology transfer.

 

	
Page 20 of 28
	
 
	
Confidential

 

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

	
11.
	
Governing Law; Dispute Resolution

11.1Governing Law.  This Agreement shall be governed by, and interpreted and construed in accordance with, the laws of the State of Massachusetts, USA, without regard to its conflict of law provisions.  The U.N. Convention on International Sales of Goods shall not apply to this Agreement.

11.2Dispute Resolution; Venue. In the event that any dispute arises between the Parties out of or in connection with this Agreement, the Parties agree to use good faith efforts in an attempt to resolve such dispute, and if such dispute is not resolved within [***], each Party shall refer such dispute to each such Party’s senior executive officer for further attempts to resolve such dispute for a period of [***]. Any legal action or proceeding concerning the validity, interpretation and enforcement of this Agreement, matters arising out of or related to this Agreement or its making, performance or breach, or related matters will be brought exclusively in the courts of the United States of America for the District of Massachusetts, sitting in Suffolk County, Massachusetts. All parties consent to the exclusive jurisdiction of those courts and waive any objection to the proprietary or convenience of such venue. 

	
12.
	
Miscellaneous

12.1Termination of Prior Agreement, Transfer of Task Orders. Effective upon the Effective Date, the Parties hereby terminate the Prior Agreement in its entirety. Notwithstanding the foregoing, all outstanding task orders under the Prior Agreement and as more particularly listed and described in Exhibit 7, shall continue under this Agreement following the Effective Date (the “Transferred Task Orders”), and are hereby incorporated by reference as Task Orders hereunder as of the Effective Date; provided, however, the amounts payable for performance of Services provided pursuant to such Transferred Task Orders shall be in accordance with the amounts set forth on such Transferred Task Orders, and any Batches produced pursuant to such Transferred Task Orders shall not be considered or included for consideration of the Company’s Minimum Purchase Commitment or SAFC’s Performance Bonus.

12.2Financial Records. SAFC will keep accurate financial records of all Services performed under this Agreement including invoice calculations. Company, at its own expense, have access to such financial records upon [***] prior written notice to SAFC, and upon mutually agreeable times and dates during SAFC’s normal business hours for the sole purpose of verifying the correctness of such calculations. All information and materials made available to or otherwise obtained or prepared by or for Company in connection with such an audit shall be SAFC’s Confidential Information. Company may not exercise this right more than once for any Contract Year. Furthermore, in the event that Company is required to capitalize the Manufacturing Facility in accordance with U.S. generally accepted accounting principles and the applicable accounting standards (and any applicable updates or successor accounting guidance promulgated by the Financial Accounting Standards Board), and solely for such purpose, SAFC shall cooperate with Company and shall provide to Company such information reasonably necessary to permit Company to account for this Agreement as a capital lease in Company’s financial statements. Such information provided to Company shall be the Confidential Information of SAFC. 

 

	
Page 21 of 28
	
 
	
Confidential

 

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

12.3Publicity. Each party shall obtain the prior written approval of the other party, such approval not to be unreasonably withheld, to the content of any written publicity, news release or other public statement or announcement which includes the name of the other party and relates to this Agreement, prior to originating or releasing it. Each party shall advise the other as to whether or not any publicity, news release or other public statement or announcement is approved within [***] after the receipt of the text of the publicity, news release or other public statement or announcement, failing which it shall be deemed to be approved.  If a party advises that it will not approve any publicity, news release or other public statement or announcement, the party that is refusing to approve shall provide the other party with reasons for the refusal. If either party is prevented from complying with the foregoing as a result of the requirements of a securities commission or other regulatory body, the parties shall not be considered to be in breach of this Section or of the confidentiality obligations set forth in Section 9, but shall use reasonable efforts to consult with and keep the other party informed, and shall use reasonable efforts to obtain a protective order. 

12.4Use of Names.  SAFC shall not use the name of Company or the names of their employees, or representatives or Affiliates in any advertising materials or in any publication without prior written consent of Company.  Company shall not use the name of SAFC or the names of their employees, or representatives or Affiliates in any advertising materials or in any publication without prior written consent of SAFC.  Notwithstanding the foregoing, Company shall be entitled to identify SAFC as the source of Vector Product in any regulatory submission without SAFC’s prior written consent.

12.5Limitation of Liability and Damages.

(a)NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (SUCH AS LOST PROFITS), EXCEPT FOR BREACH OF CONFIDENTIALITY OBLIGATIONS OR AS EXPRESSLY PROVIDED IN THIS AGREEMENT, OR ANY SPECIAL OR PUNITIVE DAMAGES ARISING OUT OF THE PERFORMANCE OF THIS AGREEMENT, WHETHER BASED ON CONTRACT, NEGLIGENCE, STRICT LIABILITY, OTHER TORT OR OTHERWISE AND REGARDLESS OF WHETHER ANY PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

(b)THE MAXIMUM AGGREGATE LIABILITY OF SAFC AND ITS AFFILIATES TO COMPANY AND ITS AFFILIATES FOR ANY CAUSE OF ACTION (OR RELATED CAUSES OF ACTION) ARISING OUT OF OR RELATED TO THIS AGREEMENT AND/OR THE MANUFACTURE OR DELIVERY OF THE VECTOR PRODUCT [***] GIVING RISE TO THE LIABILITY.

(c)The foregoing limitations in above shall survive notwithstanding any failure of essential purpose of a limited remedy.

12.6Assignment; Successors; Subcontractors; Third-Party Beneficiaries.  

(a)Neither Party may assign or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the other Party, which will not be unreasonably withheld, except that Company may assign, in whole or in part, without such consent any of its rights or obligations under this Agreement (i) to any Affiliate, provided that any such assignment to an Affiliate shall not relieve the assigning Party as the primary obligor hereunder, or (ii) in connection with the merger, consolidation or sale of the stock or substantially all of the assets of the assigning Party’s business responsible for the performance of this Agreement. 

 

	
Page 22 of 28
	
 
	
Confidential

 

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

(b)Subject to the preceding subsection (a), this Agreement will apply to, be binding in all respects upon, and inure to the benefit of the successors and permitted assigns of the Parties.

(c)SAFC shall not subcontract or otherwise delegate the performance of any of its obligations hereunder to a non-affiliated third party without the prior written approval of Company.  If Company approves any subcontract, SAFC shall: (a) exercise reasonable diligence in the selection of such subcontractors, (b) fully qualify each subcontractor and (c) remain primarily liable for the performance of its obligations hereunder.

(d)Nothing expressed or referred to in this Agreement will be construed to give any person other than the Parties any legal or equitable right, remedy or claim under or with respect to this Agreement or any provision of this Agreement.  This Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the Parties to this Agreement and their successors and assigns.

12.7Transactions Outside Scope of Agreement.  Other than as expressly provided for otherwise in this Agreement, this Agreement shall in no way limit or restrict the ability of either Party or any Affiliate of such Party to offer its products or services to any other person.

12.8No Transfer of Rights.  No transfer, grant or license of rights under any patent or copyright or to any proprietary information or trade secret is made or is to be implied by this Agreement except as may be expressly stated otherwise herein.

12.9Independent Contractors.  The Parties undertake to carry out this Agreement as independent contractors.  No franchise, partnership, joint venture or relationship of principal and agent is intended by this Agreement.  Neither Party is authorized, in the name of or on behalf of the other Party, to incur any obligation, receive any benefit or right or otherwise bind the other Party.  All employees, agents, representatives and contractors of a Party are solely those of such Party and no acts thereof will be binding upon the other Party.

12.10Waiver.  The failure or the delay of any Party hereto to enforce at any time any provision of this Agreement shall not be construed to be a waiver of such provision or of the right of such Party thereafter to enforce such provision.  No waiver of any breach of this Agreement shall be held to constitute a waiver of any other or subsequent breach of this Agreement.

12.11Severability.  Should any provision of this Agreement become void or be cancelled, then the other provisions shall remain in full force and effect.  If a provision of this Agreement should be void or should be declared void, then the Parties will attempt to replace it by another valid provision or will leave the provision unreplaced by mutual consent.  Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

12.12Exhibits.  All Exhibits attached hereto are hereby incorporated in and made a part of this Agreement as if fully set forth herein.

12.13Entire Agreement.  This Agreement, including all Exhibits, Task Orders, Purchase Orders hereto, contains the final, complete and exclusive agreement of the Parties relative to the subject matter hereof and supersedes all prior and contemporaneous understandings and agreements relating to its subject matter.

 

	
Page 23 of 28
	
 
	
Confidential

 

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

12.14Amendment.  This Agreement shall not be deemed or construed to be modified, amended, rescinded, cancelled or waived, in whole or in part, except by written amendment signed by the Parties hereto.

12.15Notices. All notices, consents, waivers and other communications under this Agreement must be in writing and will be deemed to have been duly given when (i) delivered by hand (with written confirmation of receipt), (ii) sent by facsimile (with written confirmation of transmission), (iii) when received by the addressee if sent by registered or certified mail (return receipt requested) or if sent by an internationally recognized overnight delivery service, in each case to the appropriate addresses and facsimile numbers set forth below (or to such other addresses and facsimile numbers as a Party may designate by notice to the other Party): 

 

	
If to Company:
	
 
	
bluebird bio, Inc.

	
 
	
 
	
60 Binney Street

	
 
	
 
	
Cambridge, MA 02142

	
 
	
 
	
Attention: Chief Legal Officer

	
 
	
 
	
With copy to: Chief Technology and Manufacturing Officer

	
 
	
 
	
 

	
 
	
 
	
All invoices to:

	
 
	
 
	
invoices@bluebirdbio.com

	
 
	
 
	
 

	
If to SAFC:
	
 
	
SAFC Carlsbad, Inc.

	
 
	
 
	
6211 El Camino Real

	
 
	
 
	
Carlsbad, CA 92009

	
 
	
 
	
Attention: General Manager

	
 
	
 
	
 

	
With a copy to:
	
 
	
EMD Millipore Corporation

	
 
	
 
	
400 Summit Drive

	
 
	
 
	
Burlington, MA 01803

	
 
	
 
	
Attention: General Counsel

	
 
	
 
	
 

 

12.17Section Headings; Construction.  The headings of Sections in this Agreement are provided for convenience only and will not affect its construction or interpretation.  Unless otherwise expressly provided, the word “including” does not limit the preceding words or terms.

12.18Force Majeure.  Any events that are beyond the reasonable control of the Parties, such as fire, flood, war, strike, civil unrest, terrorism, natural catastrophes, government acts and regulations, national, international or sectoral financial crises and other cases of force majeure beyond a Party’s control (a “Force Majeure Event”), will, except for Company’s payment obligations hereunder, for the duration of the event as it affects the affected Party, suspend the obligations of the affected Party under this Agreement.  As soon as there is an indication of an event of force majeure, the Party affected by it will advise the other Party within [***] or as soon as practical of the effect of such event on this Agreement and about the measures to be taken to mitigate such effect.  The Parties are obligated to use reasonable efforts to mitigate damages and to resume the fulfilment of the contractual obligations as quickly as possible.

12.19Expenses.  Except as otherwise expressly provided in this Agreement, in the Exhibits hereto or in any agreement or other document expressly referenced herein and forming a part hereof, including the Quality Agreement, each Party to this Agreement will bear its respective expenses incurred in connection the performance of its obligations hereunder.  In the event of termination of this Agreement, the obligation of each Party to pay its own expenses will be subject to any rights of a Party arising from a breach of this Agreement by the other.

 

	
Page 24 of 28
	
 
	
Confidential

 

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

12.20Counterparts.  This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

12.21Entire Agreement.  This Agreement (including the Exhibits and executed Task Orders or Purchase Orders hereto) constitutes the entire agreement of the parties with respect to the subject matter hereof, and it supersedes all prior oral and written agreements, commitments or understandings with respect to the matters provided for herein, including without limitation the Prior Agreement, any Confidentiality Agreement and any other confidentiality agreement, memorandum of understanding, letter of intent or letter of agreement. 

12.22Survival.  Neither expiration nor termination of this Agreement shall terminate those obligations and rights of the parties pursuant to this Agreement which by their terms are intended to survive and such provisions shall survive the expiration or termination of this Agreement.  Without limiting the generality of the foregoing, the following provisions of this Agreement shall survive any expiration or termination hereof: Sections 2.8(b) and (c), 2.9, 7, 9.1, 9.2, 9.3, 9.5, 9.6, 10.3, 11, 12, and all definitions herein required to interpret the foregoing.

IN WITNESS WHEREOF, the Parties intending to be bound by the terms and conditions hereof have caused this Agreement to be signed effective as of the Effective Date by their duly authorized representatives.

 

 

	
SAFC CARLSBAD, INC.
	
 
	
bluebird bio, Inc.

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
By:
	
 
	
/s/ Martha Rook
	
 
	
By:
	
 
	
/s/ Jason F. Cole

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Name:
	
 
	
Martha Rook
	
 
	
Name:
	
 
	
Jason F. Cole

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
Title:
	
 
	
Head of Gene Editing and

Novel Modalities
	
 
	
Title:
	
 
	
Chief Legal Officer

 

 

Index of Exhibits

 

Exhibit 1 – [***]

 

Exhibit 2 – [***]

 

Exhibit 3 – [***]

 

Exhibit 4 – [***]

 

Exhibit 5 – [***]

 

Exhibit 6 – [***] 

 

Exhibit 7 – [***]

 

 

 

	
Page 25 of 28
	
 
	
Confidential

 

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

Amendment No. 1 to Clinical and Commercial Supply Agreement

 

This Amendment No. 1 to Clinical and Commercial Supply Agreement (this “Amendment”) is made on January 7, 2019 (“Amendment Effective Date”) by and between bluebird bio, Inc., a Delaware corporation (“Company”), and SAFC Carlsbad, Inc., a company incorporated under the laws of the State of California (“SAFC”). Reference is hereby made to that certain Clinical and Commercial Supply Agreement between Company and SAFC dated as of November 27, 2017, having an effective date of January 1, 2018 (as may be amended from time to time, the “Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings given to such terms in the Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the amount and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

	
 
	
1.
	
Section 3.3(b) of the Agreement is hereby amended by appending the following paragraphs, as paragraphs 3.3(b)(i) and 3.3(b)(ii), respectively:

 

[***]

 

	
 
	
2.
	
A new Section 12.23, Data Privacy, is hereby added to the Agreement as follows:

 

Data Privacy. [***]

 

	
 
	
3.
	
Exhibit F is hereby added to the Agreement as attached hereto.

 

This Amendment is binding upon and shall inure to the benefit of the Parties and their respective successors and assigns. The Agreement as modified by this Amendment is the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous oral and written agreements and discussions. Except as expressly modified by this Amendment, all terms and provisions of the Agreement remain in full force and effect. In the event of a conflict between the terms and provisions of this Amendment and the Agreement, the terms and provisions of this Amendment shall control. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute one and the same instrument.

 

[Remainder of the page is intentionally left blank]

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) WOULDLIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

IN WITNESS WHEREOF, the Parties have signed this Amendment as of the Amendment Effective Date.

 

	
SAFC CARLSBAD, INC.
	
	
 
	
 
	
 
	
 

	
By:
	
 
	
/s/ Joan Haab
	
1/4/2019

	
Name:
	
 
	
Joan Haab
	
 

	
Title:
	
 
	
Site Head, Carlsbad Viral Vector Manufacturing

	
 
	
 
	
 
	
 

	
BLUEBIRD BIO, INC.
	
	
 
	
 
	
 

	
By:
	
 
	
/s/ Jason Cole
	
 

	
Name:
	
 
	
Jason Cole

	
Title:
	
 
	
Chief Legal Officer

 

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) WOULDLIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

EXHIBIT F

[***]

[***] INDICATES MATERIAL THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL, AND (II) WOULDLIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

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