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 This Manufacturing Agreement involves

PROPANC HEALTH GROUP CORP | Propanc Health Group Corporation | Q-Biologicals NV

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Date: 8/23/2016
Industry: Biotechnology and Drugs     Sector: Healthcare

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Exhibit 10.1




This Manufacturing Services Agreement (this “ Agreement ”) is made and entered into this 12 th day of August 2016 (the “ Effective Date ”) by and between Propanc Health Group Corporation, having its office at 555 Riversdale Road, Camberwell, Victoria, 3124, Australia (“ COMPANY ”) and Q-Biologicals NV, having its office at Technologiepark 4, 9052 Zwijnaarde, Belgium, RPR Gent 840.165.203 (“ Q-BIOLOGICALS ”).


Q-BIOLOGICALS and COMPANY being collectively referred to below as the “ Parties ” and individually as a “ Party .”


Whereas, Q-BIOLOGICALS is a contract manufacturing organization with premises at Technologiepark 4, 9052 Ghent Belgium;


Whereas, COMPANY is a research and development organization with premises at level 2, 555 Riversdale Road, Camberwell, Victoria, 3124, Australia.


Whereas, COMPANY desires to engage Q-BIOLOGICALS to provide, and Q-BIOLOGICALS desires to provide to COMPANY, under the terms and conditions set forth herein, the Services (as defined in Section 1.1) for the Products (as defined in Section 1.1);


NOW, THEREFORE, in consideration of the foregoing, and the mutual covenants contained herein, COMPANY and Q-BIOLOGICALS, intending to be legally bound, hereby agree as follows:


Article 1


1.1           COMPANY appoints Q-BIOLOGICALS, who accepts, to perform the cGMP contract manufacturing services described in Annex 1 hereto (the “ Services ”) with respect to the enzymes trypsinogen and chymotrypsinogen. When used in this Agreement (or in the Quality Assurance Agreement, as defined below), “Products” shall mean, as the context may require, (i) purified trypsinogen and chymotrypsinogen (“Drug Substance”), or (ii) the formulated and/or filled/finished product containing trypsinogen or chymotrypsinogen (“Drug Product”), or (iii) both the Drug Substance and Drug Product, as further described in detail in Annex 1 .


1.2           Q-BIOLOGICALS shall carry out the Services in good faith and with the standards of care and diligence currently applied in the biopharmaceutical industry. Q-BIOLOGICALS shall perform the Services in accordance with (i) the cGMP terms and conditions more amply described in the Quality Assurance Agreement attached in Annex 2 to this Agreement (the “ Quality Assurance Agreement ”), (ii) the applicable laws and regulations of the country where the Facility (as defined in Section 1.3) is located, any all other laws applicable to the performance of the Services and Q-BIOLOGICALS’s obligations under this Agreement or the Quality Assurance Agreement (collectively, “ Laws ”); (iii) Q-BIOLOGICALS’s standard operating procedures agreed between the Parties through the signing of the batch records by Parties’ respective quality persons; and (iv) the Product specifications set forth in Annex 3 hereto (the “ Specifications ”). “ cGMP ” as used herein shall mean current Good Manufacturing Practices as defined in the EU Directive 2003/94/EC, as implemented (if any) into local law, including any and all future amendments thereto.





1.3           Q-BIOLOGICALS shall perform the Services at its premises at Technologiepark 4, Ghent, Belgium (the “ Facility ”), except for that part of the Services which shall be performed by Authorized Subcontractors (as defined in Section 3.3).


1.4           Q-BIOLOGICALS shall use commercially reasonable efforts to perform the Services within the timelines set forth in Annex 1 hereto. Q-BIOLOGICALS shall inform COMPANY promptly if at any time during the Term (as defined in Section 8.1) Q-BIOLOGICALS is unable to comply with said timelines. Unless in the case of negligence or willful misconduct of Q-BIOLOGICALS or any of its Personnel, Q-BIOLGICALS shall not be liable towards COMPANY for not meeting said timelines. As used in this Agreement, “Personnel” shall mean, with respect to a Party, the agents, employees, contractors or subcontractors engaged or appointed by such Party.


1.5           Q-BIOLOGICALS shall obtain and maintain such approvals, permits and licenses as may be required by any regulatory authority of the jurisdiction where the Facility is located or any applicable Law, for the Services or the manufacturing at the Facility of the Products for clinical development.


1.6           Q-BIOLOGICALS shall maintain, during the Term and for a period of five (5) years after the relevant batch release, true, accurate and complete books, records, reports and accounts in connection with or relative to the Product and the performance of the Services, as set forth in the Quality Assurance Agreement.


1.7           Q-BIOLOGICALS shall maintain the Facility in good working order and within cGMPs (e.g., qualification, calibration, maintenance, validation), including critical systems (e.g., utilities, HVAC, clean steam, compressed gasses, etc.).


1.8           COMPANY’s contact person at Q-BIOLOGICALS shall be Martine Vandermarliere (the “Project Manager”). Q-BIOLOGICALS shall notify COMPANY promptly in writing of a change (if any) in Project Manager. The Parties shall regularly organize face-to-face meetings and/or calls to discuss the progress of the Services. Each Party will bear its own costs in relation to such meetings and/or calls.


1.9           COMPANY shall have the right to use the Products manufactured under this Agreement for development purposes, including for clinical trial purposes. COMPANY shall not have the right to use the Products manufactured under this Agreement for commercialization relating to human use, unless explicitly agreed in writing in advance by Q-BIOLOGICALS.


1.10         Q-BIOLOGICALS will use commercially reasonable efforts to cooperate with COMPANY and its successors, licensees or sublicensees with respect to obtaining all regulatory approvals relating to the Products. Q-BIOLOGICALS will provide COMPANY with such manufacturing information and quality control documents as set forth in the Quality Assurance Agreement. Notwithstanding anything to the contrary in this Section, all CMC information that relates solely to the Products will be owned exclusively by, and will be the exclusive proprietary information of COMPANY.




Article 2


2.1           COMPANY shall provide Q-BIOLOGICALS with the information and assistance described in Annex 1 hereto, and such other information and assistance as the Parties may agree in writing from time to time.


2.2           Within two (2) weeks from Q-BIOLOGICALS’s request, COMPANY shall provide Q-BIOLOGICALS, free of charge and at COMPANY’s transportation risk, with the materials described in Annex 1 hereto and in the quantities (if any) stated in that paragraph, which Q-BIOLOGICALS shall use to perform the Services (hereafter the “ Materials ”). Q-BIOLOGICALS shall promptly notify COMPANY in writing of obvious defects in the Materials delivered by COMPANY or on behalf of COMPANY hereunder discovered by Q-BIOLOGICALS upon receipt of the Materials. As soon as practicable after receipt of said notice COMPANY shall provide Q-BIOLOGICALS with replacement Materials at its own cost and Q-BIOLOGICALS shall promptly return said defective Materials to COMPANY at COMPANY’s expense or, at Company’s election, destroy them.


2.3           Q-BIOLOGICALS shall not use the information and Materials referred to in Articles 2.1 and 2.2 hereof received from COMPANY for any purpose other than performing the Services hereunder. Said information and Materials shall at all times remain the property of COMPANY.


2.4           Q-BIOLOGICALS shall not be liable for any loss or damage to COMPANY Materials while in storage at the Facility, except if such loss or damage is caused by the willful misconduct or gross negligence of Q-BIOLOGICALS or its Personnel.


2.5           Q-BIOLOGICALS shall not be liable for any Defective Product (as defined in Section 5.3) or for any Product not complying with the manufacturing standards set forth in Article 1.2 to the extent such Defect or non-compliance results solely from defective COMPANY Materials.


2.6           COMPANY acknowledges that on the Effective Date there are no lawsuits, actions, administrative proceedings against COMPANY for infringing third party patent and/or intellectual property rights. COMPANY further acknowledges that on the Effective Date it is not aware of any third party patent rights that would be infringed by COMPANY, or Q-BIOLOGICALS relating to the information or Materials provided by COMPANY, or by Q-BIOLOGICALS performing the Service in accordance with this Agreement.


Article 3


3.1           Q-BIOLOGICALS shall not transfer, assign or subcontract this Agreement or any of its rights and obligations under this Agreement, in whole or in part, without the prior written agreement of COMPANY, which shall not be unreasonably withheld; provided, however, in the event of a contemplated transfer or assignment of this Agreement or of any of Q-BIOLOGICALS’ rights and obligations under this Agreement to an acquirer of all or part of the business to which this Agreement relates, COMPANY shall only be entitled to refuse its agreement if the aforementioned transfer or assignment manifestly conflicts with the legitimate interests of COMPANY or otherwise will have a material negative impact on the quality of the Product .




3.2           Contrary to the provisions of Article 3.1 hereof but subject to the provisions of Section 3.3, it is agreed that Q-BIOLOGICALS may sub-contract certain Services to the subcontractors approved by COMPANY listed in Annex 4 hereto.


3.3           Any subcontractor to which Q-BIOLOGICALS subcontracts any Services pursuant to Section 3.1 (with the consent of COMPANY) or pursuant to Section 3.2 is referred to as an “ Authorized Subcontractor .” Where required under cGMP Q-BIOLOGICALS shall audit the Authorized Subcontractor and Q-BIOLOGICALS will impose on each Authorized Subcontractor obligations no less strict than the ones binding upon Q-BIOLOGICALS under this Agreement, and Q-BIOLOGICALS will remain liable to COMPANY for any breach by such Authorized Subcontractor, as if such breach had been committed by Q-BIOLOGICALS.


Article 4


4.1           In consideration of the performance of the Services and of the associated tasks defined herein, COMPANY shall pay Q-BIOLOGICALS the fixed price (exclusive of VAT) set out in Annex 1 hereto. Q-BIOLOGICALS will provide COMPANY with invoices at the intervals specified in said Annex 1 .


4.2           COMPANY shall reimburse Q-BIOLOGICALS for the raw materials and supplies in the quantities as defined in the batch records, as well as for the other costs set out in Annex 1 hereto. Reimbursement of costs shall be subject of separate invoices, which shall be accompanied by supporting documents and which shall be sent to COMPANY on a regular basis during the Term.


4.3           COMPANY shall pay the invoices in Euro within thirty (30) days from receipt by COMPANY of a written invoice from Q-BIOLOGICALS, specifying the amount payable and the bank account number to which the payment should be made. The invoice shall be sent to COMPANY at the address and the to the attention of the person referred to in Article 12 or to any other address or person that may be communicated by COMPANY to Q-BIOLOGICALS. Any invoice due which remains unpaid by COMPANY after the due date shall bear an interest on a daily basis at a rate equivalent to Libor one (1) month plus two percent (2%).


Article 5


5.1           Q-BIOLOGICALS shall store and warehouse all Materials received and Products manufactured pursuant to this Agreement in the Facility in a secure and clean area and compliant with Q-BIOLOGICALS’s Standard Operating Procedures. All Materials and Products shall be clearly marked in such a way as to identify that they are owned by COMPANY and for use only for or by COMPANY.




5.2           Q-BIOLOGICALS shall deliver the Products manufactured under this Agreement to COMPANY ex-works (lncoterms 2010) at Q-BIOLOGICALS’s Facility in accordance with COMPANY’s directions (packaging, temperature, etc.). Said delivery shall either take place promptly upon positive review by COMPANY of the manufacturing batch records provided by Q-BIOLOGICALS to COMPANY or upon request of COMPANY after storage of the Products at Q-BIOLOGICALS. Q-BIOLOGICALS shall store the Products at Q-BIOLOGICALS’s Facility in qualified storage freezers, free of charge for a maximum period of six (6) weeks after receipt of the completed manufacturing batch records by COMPANY. After this six (6) weeks period, Q-BIOLOGICALS will store the Products at a storage price of five hundred Euro (500 €) per month for a maximum period of six (6) months.


The costs related to the storage shall be paid by COMPANY thirty (30) days from the date of the invoice for such costs. After said six (6) month period, Q-BIOLOGICALS will ship the Products to COMPANY or designated site at COMPANY’s expense. Risk and title to the Products shall pass to COMPANY upon delivery of the Products.


5.3           (a) COMPANY shall notify Q-BIOLOGICALS in writing (and provide supporting documentation and samples of the delivery concerned to Q-BIOLOGICALS) if it considers that any Products delivered hereunder is subject to a Defect (a “ Defective Product ”), in which case the Parties shall immediately use good faith efforts to agree whether or not such Products are Defective Products. As used in this Agreement, “ Defect ” means the failure of any Product to conform in any material respect to (i) the Specifications or (ii) any other requirement (including manufacturing requirements) for such Product specified in this Agreement (including, without limitation, Section 1.2) or the Quality Assurance Agreement.


Any such notification by COMPANY to Q-BIOLOGICALS shall be done, in case of visible Defect(s) (i.e. Defect(s) that could reasonably be detected upon proper visual inspection), within thirty (30) days from the date of receipt of the relevant shipment or, in case of hidden Defect(s) (i.e. defect(s) that could not be reasonably detected upon proper visual inspection), within thirty (30) days from the date of detection of the hidden Defect(s). Failure by COMPANY to notify Q-BIOLOGICALS in writing within said timelines will constitute acceptance of the Products by COMPANY and Q-BIOLOGICALS shall be released from any liability towards COMPANY in relation to such Products


Q-BIOLOGICALS shall be entitled at all reasonable times to inspect and/or analyze the Product delivery in question.


Q-BIOLOGICALS shall only be responsible for Defects that existed on or prior to delivery to COMPANY. Q-BIOLOGICALS shall in no way be responsible for Defects caused after the delivery thereof (such as, non-compliance that is caused by the incorrect handling, storage and/or shipment of the Products after the delivery). Q-BIOLOGICALS shall not be responsible for any Defect in the Products to the extent such Defect (i) results from any non-compliance of or defect in the COMPANY Materials, consumables, raw materials and/or components delivered by COMPANY to Q-BIOLOGICALS, except to the extent Q-BIOLOGICALS was aware of such defect or non-compliance and failed to advise COMPANY in accordance with this Agreement.




(b)          In the event that the Parties cannot agree as to whether any Product is a Defective Product, the Parties shall appoint an independent laboratory agreed upon between the Parties, who shall be instructed to determine within sixty (60) days from its appointment whether such Products are Defective Products and what the cause of such Defect is. The independent laboratory’s decision shall be regarded as final settlement of the dispute and its decision shall be binding upon the Parties. The costs of such laboratory shall be borne by the Party against which the decision is rendered.


(c)          If, at the time of delivery, any Products are Defective Products, Q-BIOLOGICALS will deliver replacement Products, or multiple replacement deliveries until said Defect is resolved, of the Products to COMPANY as soon as practicable at Q-BIOLOGICALS’s own cost, contingent upon receipt from COMPANY of the COMPANY Materials, at COMPANY’s costs (except in the event the Defect results from Q-BIOLOGICALS’s gross negligence, in which case Q-BIOLOGICALS will bear the costs of the COMPANY Materials required for such replacement), in such quantities needed for the replacement of the Products. COMPANY shall promptly return to Q-BIOLOGICALS such Defective Products at Q-BIOLOGICALS’s expense.


Except for Q-BIOLOGICALS’s indemnification obligations pursuant to Article 9.2.1, any replacement of Products to which Q-BIOLOGICALS is obligated in accordance with the above, shall constitute Q-BIOLOGICALS’s sole and exclusive liability in relation to such Defective Products. Except for Q-BIOLOGICALS’s indemnification obligations pursuant to Article 9.2.1, the liability of Q-BIOLOGICALS to COMPANY in connection with any Defective Product shall not exceed the cost of replacement thereof (such replacement costs including shipping expenses of the Defective Products referred to above [and excluding any and all costs related to COMPANY Materials]), except for liability arising from gross negligence or willful misconduct of Q-BIOLOGICALS or its Personnel.


(d)          If any Defect is due to a change in the Products after delivery, Q-BIOLOGICALS will deliver a replacement delivery of the Products to COMPANY as soon as practicable at COMPANY’s cost and COMPANY shall, at its discretion either keep or promptly return such Defective Products to Q-BIOLOGICALS at COMPANY’s expense.


(e)          If any Defect is due to a hidden defect in the COMPANY Materials, consumables, components and raw materials provided by COMPANY, Q-BIOLOGICALS will deliver a replacement delivery of the Defective Products to COMPANY as soon as practicable at COMPANY’s cost and COMPANY shall at its discretion either keep or promptly return such Defective Products to Q-BIOLOGICALS at COMPANY’s expense. COMPANY will be entitled to keep the retain samples of said Defective Products.


Article 6


6.1          From time to time during the Term, either Party (as the “ Disclosing Party ”) may disclose or make available to the other Party (as the “ Receiving Party ”) information about its business affairs, product

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