AMENDMENT NO. 3 TO DISTRIBUTION AND MANUFACTURING SERVICES AGREEMENTDistribution Agreement |
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AMENDMENT NO. 3 TO
DISTRIBUTION AND MANUFACTURING
SERVICES AGREEMENT
This
Amendment No. 3 to Distribution and Manufacturing Services
Agreement (this “
Amendment ”)
is made as of September 24, 2007 (the “
Effective Date ”)
and amends the Distribution and Manufacturing Services Agreement,
dated as of January 16, 2004, by and between Lev Development
Corp.(formerly known as Lev Pharmaceuticals, Inc.), a Delaware
corporation (“
LEVPHARMA ”),
and Sanquin Blood Supply Foundation (“
SANQUIN ”),
a not-for-profit corporation organized under the laws of The
Netherlands, as amended by a First and Second Amendment
(collectively, the “
Original Agreement ”
and together with this Amendment, the “
Agreement ”).
Capitalized terms used in this Amendment without definition shall
have the meanings given them in the Original
Agreement.
WHEREAS,
LEVPHARMA and SANQUIN entered into the Original Agreement in
January 2004;
WHEREAS,
LEVPHARMA is willing to fund SANQUIN’s augmentation and
expansion of its facilities for the purposes of enabling
SANQUIN to meet LEVPHARMA’s supply requirements for the
Product, in accordance with the terms and conditions of this
Amendment;
WHEREAS,
the Parties desire to convert the Original Agreement into a
toll manufacturing agreement whereby SANQUIN is willing to
provide toll manufacturing of the Product for LEVPHARMA using
blood plasma supplied by LEVPHARMA, in accordance with the
terms and conditions set forth in
this Amendment;
and
WHEREAS,
the Parties to the Original Agreement desire to amend the
Original Agreement as more fully set forth herein to reflect
developments in the relationship between the Parties and the
status of the manufacturing of the Product.
NOW
THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged by each of the Parties, the Parties hereby amend
the Original Agreement as follows:
1.
Section 4.1(c) of the Original Agreement is deleted in its
entirety and replaced with the following:
c)
Commercial Supply .
Commencing on LEVPHARMA’s Commercial Launch (defined as the
date on which LEVPHARMA commences marketing the Product in any
country in the Territory following its receipt of Regulatory
Approval in the applicable country) of the Product and thereafter
during the term of the Agreement (including all renewal terms of
the Agreement), subject to the terms and conditions of this Article
IV, SANQUIN shall supply LEVPHARMA with LEVPHARMA’s
requirements for Product for commercial use pursuant to this
Agreement in each country in the Territory where LEVPHARMA has
Regulatory Approval (the “
Commercial Supply ”).
Said Commercial Supply of Product shall at all times be ordered and
supplied according to the procedures outlined in Sections 4.2 and
4.3.
[*CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND
REPLACED WITH AN ASTERISK [***], HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.]
i.
Scale
Up and LEVPHARMA Funding
SANQUIN
has performed an analysis of the feasibility of scaling up the
production of the Product and provided the results of this
analysis to LEVPHARMA. Commencing on the Effective Date of
this Amendment, SANQUIN shall initiate a project to scale up
the production of the Product (the “
Scale Up ”)
at both the Brussels and Amsterdam Facilities in accordance with
the following terms and conditions of the Scale Up
process:
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a.
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In
accordance with the project plan (the “Project Plan”)
to be approved by the Parties, LEVPHARMA shall fund, up to a
maximum required total investment of 7.5 million euros, through a
loan facility upon the terms set forth in paragraph 4.1(c)(i)(e), *
* *
of
the capital investments at the Brussels Facility, and * * *
of
the capital investments at the Amsterdam Facility, required to
conduct the Scale Up for the purposes of LEVPHARMA’s
obtaining from SANQUIN the Commercial Supply of its requirements
for the Product pursuant to paragraphs 4.1(c)ii(d) and (e) of this
Agreement. The remaining * * *
of
funding required for the Scale Up of the Amsterdam Facility shall
be the obligation of SANQUIN. Further, the Project Plan and budget
shall be premised on the basis that the total cost of the capital
investments necessary for the successful completion of the Scale Up
will be such that the loan maximum of LEVPHARMA will be sufficient
to fund completion of the Scale Up. LEVPHARMA and SANQUIN shall
cooperate in the development of the Project Plan for the Scale Up
and shall jointly agree on a final project budget for the Scale Up
prior to commencement of the Scale Up project. Other than as
expressly set forth herein, the Parties shall have no liability
pursuant to this Section until they have provided their written
approval of the final Project Plan and budget other than
LEVPHARMA’s obligations to fund the engineering component of
the Scale Up, which precedes the Project Plan, as under (c)
hereunder. The Project Plan shall also provide that upon completion
of the Scale Up, SANQUIN shall have the manufacturing capacity to
satisfy the maximum output of Product contemplated by this
Agreement.
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[*CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH
SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH
AN ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.]
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b.
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LEVPHARMA’s
loan obligation pursuant to the above paragraph a) includes,
without limitation, the costs of all required engineering (as
jointly determined by LEVPHARMA and SANQUIN, but subject to the
ceiling set forth in paragraph (a)), and is based on the
Parties’ assumptions as of the Effective Date of this
Amendment. In the event that SANQUIN shall at any time anticipate
or project a need for any material increase in the amount of funds
required for the Scale Up, SANQUIN will promptly notify LEVPHARMA
of this fact in writing and the Parties shall confer in good faith
to reach agreement as to whether, and to what extent, such increase
will be funded by the respective Parties. A material increase shall
mean an amount equal or greater to * * * of the initial budget
agreed to by the Parties for the Scale Up. Increases that are below
this threshold shall be funded by SANQUIN up to a cumulative
maximum of * * *
of
the initial budget.
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c.
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The
costs for the engineering component of the Scale Up are estimated
to be * * *
euros.
This includes costs for hiring an additional engineer by SANQUIN as
well as the costs for engineering services contracted out. As part
of its funding obligation pursuant the above paragraphs a) and b),
LEVPHARMA will reimburse SANQUIN for these engineering costs within
30 days of receiving SANQUIN’s invoices documenting its
expenditure or payment of such costs. LEVPHARMA’s obligations
for other costs and expenses related to the Scale Up, and the terms
and conditions pursuant to which LEVPHARMA shall make any payments,
shall be as set forth in the final Project Plan and budget approved
by SANQUIN and LEVPHARMA.
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d.
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In
addition, SANQUIN agrees to fund any necessary non-clinical studies
required as a result of the Scale Up, including but not limited to
conformance lot production and testing, comparability testing
between product from the licensed facility/process and the scaled
up facility/process, and any other non-clinical studies required by
the Regulatory Authorities to obtain approval of the Scale
Up.
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e.
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With
respect to the loan provided by LEVPHARMA as contemplated by
paragraph 4.1(c)(i)(a), SANQUIN hereby agrees that: (a) the loan
shall be due and payable in full by the maturity date as defined in
paragraph 4.1(c)(i)(f); (b) no interest shall accrue on the
outstanding principal amount of the loan; (c) SANQUIN shall repay
the outstanding principal by crediting LEVPHARMA a * * *
discount
on the Purchase price per Unit of Commercial Product delivered to
LEVPHARMA upon execution of this Amendment and the amount of such
discount shall be applied against the outstanding balance of the
loan; and (d) SANQUIN shall continue to conduct its operations in a
manner substantially similar to its current operations for all
periods prior to the repayment in full of the loan.
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[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS
TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS
BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
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f.
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Given
the volumes as outlined under 4.1(c)ii, the credit per unit of
Product as under (e) above allows SANQUIN to pay back the loan
before July 1, 2014 (maturity date). Should the Agreement be
terminated before July 1, 2014 because of the default of Levpharma
or if by July 1, 2014 the volume of Product ordered by Levpharma
has been less than the volume needed by SANQUIN to pay back the
loan as per clause (e) above, then LEVPHARMA shall waive the part
of the loan still outstanding on July 1, 2014. Also in the event
that LEVPHARMA files for bankruptcy under Chapter 7 of the US
Bankruptcy Code before the loan has been fully paid back by
SANQUIN, the then outstanding balance of the loan shall be
forgiven.
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g.
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Should,
on the other hand, the Agreement be terminated because of the
default of SANQUIN
before
the loan has been fully paid back, then SANQUIN shall pay to
LEVPHARMA the remaining principal amount of the loan outstanding as
of the date of termination within 60 (sixty) days from such
termination date. For purposes of clarity, the Parties expressly
agree that any Change in Control event at Sanquin, as defined in
Article 8.d) of this Amendment 3, shall not be considered a default
by Sanquin.
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h.
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The
Scale Up shall be conducted in accordance with the following
timelines:
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*
* *
*
* *
*
* *
*
* *
*
* *
*
* *
08/2009:
Scale-Up approved by regulatory Authorities
[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS
TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS
BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
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ii.
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Minimum Annual Purchase .
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a.
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In
accordance with the Product ordering process provided for in the
Original Agreement, SANQUIN agrees to make available and LEVPHARMA
agrees to purchase the following estimated volumes of
Product:
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Q4
2007 *
* *
Units
Q1
2008 *
* *
Units
Q2
2008 *
* *
Units
Q3
2008 *
* *
Units
Q4
2008 *
* *
Units
Q1
2009 *
* *
Units
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b.
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The
Parties agree to negotiate in good faith to modify the purchase
commitments of LEVPHARMA set forth above in the event Commercial
Launch does not occur prior to the end of LEVPHARMA’s first
fiscal quarter in 2008.
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c.
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Commencing
in the Calendar Year that LEVPHARMA and SANQUIN receive Regulatory
Approval in the USA for the Scale Up, LEVPHARMA shall purchase and
SANQUIN shall, subject to any revised forecast which may hereafter
be provided by LEVPHARMA to SANQUIN on or before January 1, 2008,
supply a minimum of the Pro Rata share of * * *
Units,
on an annualized basis, based on the actual number of days from
when the Registration Application for the Scale Up is approved by
the Regulatory Authorities in the United States until the end of
such Calendar Year.
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d.
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Subject
to the provisions of paragraph 4(c)(ii)(h), each Calendar Year
after Regulatory Approval in the U.S. of the Scale Up and during
the term, LEVPHARMA shall purchase and SANQUIN shall supply a
minimum of * * *
Units
of Product
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e.
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Should
LEVPHARMA require more than * * *
Units
of Product in any Calendar Year during the term after Regulatory
Approval in the U.S. of the Scale Up, SANQUIN shall supply such
additional amounts upon the terms and conditions set forth herein.
However, SANQUIN shall never be obliged to supply to LEVPHARMA more
than * * *
Units
of Product per Calendar Year under the terms of this Agreement
unless the Parties shall hereafter otherwise expressly agree in
writing, except where necessary to replace nonconforming or
rejected Units of Product.
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[*CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH
SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH
AN ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.]
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f.
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The
quantities specified under clauses (a), (b), (c) and (d) above are
applicable to the Territory as defined on the Effective Date of
this Amendment. These quantities may be modified by mutual
agreement of the Parties in the event that the Territory is
extended according to Sections 2.1 and/or 2.2(a).
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g.
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The
quantities specified under clauses (a), (b), (c) and (d) above
shall supersede and replace any minimum or maximum quantities
otherwise contained in the Original Agreement.
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h.
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The
volumes of Product specified under (a), (b), (c), and (d) above as
well as the Purchase price as under article 5.1 may, after good
faith discussions between the Parties, be modified by the mutual
written agreement in the event that the forecast provided by
LEVPHARMA to SANQUIN on or before January 1, 2008 is at least * *
*
less
than * * *
Units
per Calendar Year. Subsequently, the Product volume specified in
paragraph (d) above may be reduced in subsequent Calendar Years in
the event LEVPHARMA’s forecasts for the third quarter of a
Calendar Year is at least * * *
less
than the then-current minimum purchase commitment.
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2. Section
4.1.f of the Original Agreement is deleted in its entirety and
replaced with the following:
(f)
Commercial Specifications and Manufacturing Standards
.
The Commercial Product shall be manufactured by SANQUIN at the
locations and according to the manufacturing process as used to
manufacture the Product for the Clinical Study (including the open
label clinical trials) unless otherwise agreed to by the Parties
according to Section 4.1(d) above. LEVPHARMA and SANQUIN shall
cooperate in good faith and shall revise the Quality Agreement to
reflect the Commercial Specifications and Manufacturing Standards
for this Agreement. This revised Quality Agreement shall also
describe the services concerning intake, handling, processing,
storage and testing of LEVPHARMA owned plasma as contracted out by
SANQUIN to SANQUIN’s subsidiary CAF-DCF in Brussels on behalf
of LEVPHARMA. Further, the Quality Agreement shall also provide for
the agreed-upon parameters for the intake, handling, processing,
storage, testing, packaging and shipment of any residuals of the
LEVPHARMA owned plasma after it has been processed by Sanquin,
including without limitation, cryoprecipitate and the double
depleted plasma (the “Residuals”). SANQUIN shall hold
and/or transfer the Residuals in accordance with the Quality
Agreement and any instructions received from or on behalf of
LEVPHARMA. The Parties shall conclude such Quality Agreement before
the audit which the FDA is expected to carry out as part of the
process of the initial BLA-review but in any event prior to
LEVPHARMA’s Commercial Launch. The Parties agree that the
Commercial Specifications and Manufacturing Standards for this
Agreement shall conform to any requirements from the FDA or any
other Regulatory Authorities where the Product is either subject to
Registration or under review for Registration and, to the extent
practicable, to the specifications and standards applicable to
SANQUIN's current manufacturing process for the Product. The
Parties agree that SANQUIN shall be obligated for the cost for
upgrading the SANQUIN facilities and procedures specifically needed
for the Manufacturing Standards, up to a limit of * * *
euros.
This limitation shall only reflect any changes specifically
requested by the FDA and does not include any changes made at the
request of any other Regulatory Authority. In the event that the
aggregate cost for this upgrade for FDA-compliance would exceed * *
*
euros,
the Parties shall either agree upon an arrangement whereby
LEVPHARMA bears the additional cost or the Parties shall terminate
the Agreement without any Party bearing any liability to the other
Party under the terms of this Agreement.
[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS
TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS
BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
3.
Section 4.4 of
the Original Agreement is deleted in its entirety and replaced
with the following:
4.4
Delivery .
SANQUIN shall ship the Product “FCA (free carrier), Amsterdam
airport” and in accordance with LEVPHARMA's written
instructions as detailed on the Purchase Order. SANQUIN shall be
responsible for obtaining insurance for the shipment until the
Product is on board of the carrier at Amsterdam airport. LEVPHARMA
shall be responsible for obtaining insurance for the Product as of
the point t
