PROCESS DEVELOPMENT AND MANUFACTURING AGREEMENT

Manufacturing Agreement

You are currently viewing:

This Manufacturing Agreement involves

pSivida LTD | AEA TECHNOLOGY QSA GmbH

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: PROCESS DEVELOPMENT AND MANUFACTURING AGREEMENT
Date: 1/20/2005

PROCESS DEVELOPMENT AND MANUFACTURING AGREEMENT, Parties: psivida ltd , aea technology qsa gmbh

[***] - INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL

TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE

COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE

ACT OF 1934, AS AMENDED.

PROCESS DEVELOPMENT AND MANUFACTURING

AGREEMENT

BETWEEN

pSiMEDICA LIMITED

AND

AEA TECHNOLOGY QSA GmbH

<PAGE>

INDEX

ARTICLE 1 - DEFINITIONS 5

ARTICLE 2 - PURPOSE 8

ARTICLE 3 - TERM 8

ARTICLE 4 - DEVELOPMENT PHASE 8

ARTICLE 5 - FACILITY PROGRAM 9

ARTICLE 7 - GENERAL MANUFACTURE AND SUPPLY OBLIGATIONS 12

ARTICLE 8 - GENERAL OBLIGATIONS 13

ARTICLE 9 - PAYMENTS 14

ARTICLE 10 - ORDERS AND SHIPMENTS 16

ARTICLE 11 - LICENSE 18

ARTICLE 12 - pSiMEDICA REPRESENTATIONS AND WARRANTIES 18

ARTICLE 13 - pSiMEDICA'S INTELLECTUAL PROPERTY INDEMNITY 19

ARTICLE 14 - QSA'S REPRESENTATIONS AND WARRANTIES 20

ARTICLE 15 - QSA'S INTELLECTUAL PROPERTY INDEMNITY 21

ARTICLE 16 - ARISING INTELLECTUAL PROPERTY 22

ARTICLE 17 - REGULATORY MATTERS 24

ARTICLE 18 - GENERAL INDEMNITY 26

ARTICLE 19 - DISCLOSURE OF TECHNOLOGY 27

ARTICLE 20 - CONFIDENTIALITY 27

ARTICLE 21 - TERMINATION 28

ARTICLE 22 - NOTICES 30

ARTICLE 23 - DISCLAIMER OF CONSEQUENTIAL DAMAGES 31

ARTICLE 24 - ASSIGNMENT 31

ARTICLE 25 - COMPLIANCE 31

ARTICLE 26 - NON-WAIVER 32

ARTICLE 27 - FORCE MAJEURE 32

ARTICLE 28 - INSURANCE 32

<PAGE>

ARTICLE 29 SEVERABILITY 34

ARTICLE 30 GENERAL 34

ARTICLE 31 - APPLICABLE LAW 35

Schedule A Development Phase 37

Schedule B Facility Description 38

Schedule C Product Description (For Phase IIa Product) 44

Schedule D Source Specifications 45

Schedule E Pricing 49

<PAGE>

THIS AGREEMENT made in duplicate this 15th day of March, 2004,

BETWEEN: AEA TECHNOLOGY-QSA, GMBH

having a place of business at

Gieselweg 1

D-38110, Braunschweig

GERMANY

("QSA")

AND: pSiMedica Ltd

having a place of business at

Malvern Hills Science Park

Geraldine Road

Malvem, Worcestershire,

WR14 3SZ

UNITED KINGDOM

("pSiMedica")

WHEREAS:

I. pSiMedica is the owner of certain patents, data, information and

technology related to a new biomaterial (BioSilicon(TM)) that it wishes to

be the basis for a potentially new class of P-32 containing "sources" for

use in intratumoural brachytherapy;

II. QSA has expertise in the production and processing of radioactive

material, including the necessary patents, know-how, techniques, methods,

processes and trade secrets for the development and manufacture of sealed

sources and dosimetry;

III. pSiMedica desires that QSA manufactures P-32 BioSilicon(TM) "sources" to

meet pSiMedica's commercial supply requirements; and

IV. pSiMedica desires that QSA develops the required sources, construct a

facility at its subsidiaries sites, initially at Braunschweig, Germany,

and then to manufacture pSiMedica's requirements for P-32 BioSilicon(TM)

sources, in accordance with the terms, conditions and specifications set

out herein.

<PAGE>

NOW THEREFORE in consideration of the mutual covenants and agreements herein

contained, and subject to the terms and conditions hereinafter set out, the

Parties hereto agree as follows:

ARTICLE 1 - DEFINITIONS

For the purposes of this Agreement:

1.1 "Affiliated Company" shall mean either

(a) a company which is at least majority owned or majority controlled by a

Party hereto or which holds at least a majority interest or majority

control in such Party;

(b) a parent company to one of the Parties hereto

1.2 "Batch" shall mean a production batch of P-32 BioSilicon(TM) manufactured

by QSA under this Agreement.

1.3 "Background Technology" shall mean all QSA or its Affiliated Company(s)

proprietary technology, including patents, copyrights, know-how,

techniques, methods, processes and trade secrets which is required for the

purposes of performing the obligations of QSA under this Agreement and

which is owned by QSA or its Affiliated Company(s), or which QSA is

authorized to use, or which is licensed to QSA from third parties and

which is in existence in the form of a written, description, prototype or

can otherwise be demonstrated to be the property of QSA or its Affiliated

Company(s), prior to the Effective Date.

1.4 "Clinical Trials" shall mean human trials for clinical development of the

Medical Device.

1.5 "Commercial Phase" shall mean the period commencing at the date of the

first commercial sale of P-32 BioSilicon(TM) Sources from QSA to pSiMedica

which have been manufactured in the Facility, for pSiMedica after receipt

of marketing authorization from the appropriate Regulatory Authorities and

ending at the date of the last commercial sale of P-32 BioSilicon(TM)

Sources from QSA to pSiMedica.

1.6 "Development Phase" shall mean the period commencing from the Effective

Date until completion to pSiMedica's reasonable satisfaction of the

activities described in Schedule A and any other schedules referred to in

Schedule A.

1.7 "Effective Date" shall mean the date of the signature of this Agreement.

<PAGE>

1.8 "Equipment(s)" shall mean the moveable assets to be purchased or

manufactured by QSA for and on behalf of pSiMedica. Said equipment will be

detailed in project invoices from QSA to pSiMedica and will be clearly

tagged and identified as pSiMedica property.

1.9 "European Authority" shall mean pSiMedica's Notified Body.

1.10 "Facility" shall mean the production line facility to be constructed by

QSA in its currently existing factory in Braunschweig, Germany, as

described in Schedule B and which will be constructed and installed for

the production of Sources.

1.11 "Facility Program" or "Facility Phase" shall mean the program for the

construction of the Facility as described in Article 5.

1.12 "Hot Cell(s)" shall mean the assets to be purchased or manufactured by QSA

for and on behalf of pSiMedica and installed in the Facility for the term

of this Agreement (unless QSA exercises the option under Article 6.1

(ii)), as more specifically defined in Schedule "B".

1.13 "Improvements" shall mean the extension of Intellectual property gained

during the Term of this Agreement

1.14 "Initial Term" shall have the meaning set forth in Article 3.1 hereof

1.15 "Initial Term Notice" shall mean the written notice by either Party which

shall be given at least eighteen (18) months prior to the end of the

Initial Term and by which the notifying Party informs the other Party that

it does not wish to extend the term of the Agreement beyond the Initial

Term.

1.16 "Isotope" or "P-32" shall mean the Phosphorous-32 in the medical device.

1.17 "Intellectual Property Rights" (IPR) shall mean all intellectual rights

(including but not limited to) rights to inventions, patent rights,

know-how, copyrights and design rights in any part of the world to the

fullest extent and for the full period thereof (including without

limitation any extensions, reversions and renewals) and all rights thereto

and interests therein."

1.18 "Major Repair(s)" shall mean a repair to a given asset entailing

expenditures in excess of the lesser of:

(i) [***] of the subject asset's purchase price as determined at the

time of purchase by the invoice price less any discounts received,

(ii) [***].

1.19 "Medical Device" shall mean pSiMedica's P-32 BioSilicon(TM) as described

in Schedule C.

<PAGE>

1.20 "Minimum Batch Size" shall mean the minimum number of dose vials to be

assembled in one batch and the number of which is to be mutually agreed in

writing prior to the commencement of the Commercial Phase.

1.21 "Notice of Termination" shall mean the written notice given by either

Party to the other Party to terminate the Agreement after the Initial Term

has ended. Notice of Termination must be given at least eighteen (18)

months prior to the date of effective termination.

1.22 "pSiMedica Notified Body" shall mean the appropriately designated medical

authority.

1.23 "pSiMedica Technology" shall mean all pSiMedica proprietary technology,

including patents, know-how, techniques, methods, processes and trade

secrets which is required for the purposes of performing the obligations

of pSiMedica under this Agreement and which is owned by pSiMedica, or

which pSiMedica is authorized to use, or which is licensed to pSiMedica

from third parties and which is in existence in the form of a written,

description, prototype or can otherwise be demonstrated to be the property

of pSiMedica, prior to the Effective Date.

1.24 "Process" shall mean the process of formulation, irradiation, preparation,

dispensing into dose vials, encapsulation, de-encapsulation,

re-encapsulation, inspection and testing of Sources to meet pSiMedica's

Specification.

1.25 "QSA Repairs" shall mean repairs or maintenance to the Equipment and Hot

Cells that are necessary through QSA's negligent abuse, improper

operation, inadequate maintenance, negligence or willful misconduct.

1.26 "Scheduled Batch Completion Date" The date for which QSA has received

final confirmation from pSiMedica that a Batch is required. Such

confirmation from pSiMedica will be given at intervals no less than 14

(fourteen) days prior to when dispatch is required by pSiMedica

1.27 "Specification(s)" shall mean those specifications for the Sources set out

in Schedule D.

1.28 "Source(s)" shall mean the terminally sterilized patient dose vial

produced using the Process which meet the Specifications.

1.29 "Dose vial(s)" shall mean Sources dispensed to an agreed contained

activity and reference date meeting the Specifications suitable for use in

the Medical Device.

1.30 "Transfer Date" shall have the meaning set forth in Article 6.1 sub-clause

(v) hereof.

<PAGE>

1.31 "United States Authority" shall mean the United States Food and Drug

Administration.

1.32 "Validation" shall mean the program mutually agreed to by the Parties by

which documented evidence provides assurance that the Process will

consistently produce Sources that meet Specifications and quality

attributes, to the reasonable satisfaction of both Parties and the

appropriate Regulatory Authorities.

ARTICLE 2 - PURPOSE

2.1 SCOPE AND OBJECT

The scope and object of the Agreement is to complete the development of

Sources in accordance with the development responsibilities and

obligations attributed to each of the Parties as set out in this

Agreement. In addition, this Agreement shall provide for the construction

of a Facility at QSA's manufacturing site in Braunschweig, Germany, for

the manufacture of Sources and the supply of Sources for Clinical Trials

and initial commercial sales. It is anticipated that later duplication of

the Facility may be required at other QSA subsidiary sites in order to

follow market demands.

ARTICLE 3 - TERM

3.1 INITIAL TERM

The initial term of this Agreement shall commence upon the Effective Date

and, unless terminated earlier pursuant to this Agreement, shall continue

until the third anniversary of the commencement of the Commercial Phase

("Initial Term").

3.2 EXTENSION

The term of this Agreement shall be automatically extended after

expiration of the Initial Term unless either Party has given Initial Term

Notice to the other Party. At least two years prior to the end of the

Initial Term, the Parties agree to meet in order to discuss, in good

faith, their intentions with respect to whether or not to continue the

term of this Agreement beyond the Initial Term.

ARTICLE 4 - DEVELOPMENT PHASE

4.1 DEVELOPMENT ACTIVITIES

During the Development Phase, QSA and pSiMedica shall respectively carry

out their obligations described and attributed in Schedule "A", it being

understood that some activities may be reasonably delayed to the extent

that such activity is premised on the work or provision of data,

information or technology by the other

<PAGE>

Party which such other Party does not provide on a timely basis. Each

Party shall use their best efforts in order to carry out their respective

obligations and responsibilities set out in Schedule "A" to the timescales

specified.

The Parties acknowledge and agree that Schedule "A" may only be amended

during the course of the Development Phase to accommodate unforeseen

events and results beyond the reasonable control of the Parties. All such

changes to Schedule "A" shall be made by written agreement of the Parties.

The Project Managers (as specified at Article 22.1) will meet at least

bi-monthly, at locations to be agreed, including telephone or

videoconferencing, for the purpose of reviewing the status of the project

and to assess progress against the milestones and activities set forth in

Schedule "A". QSA shall also provide written reports to pSiMedica, on a

monthly basis, setting out the progress against milestones set forth in

Schedule "A".

4.2 DEVELOPMENT PHASE TERMINATION

At each review meeting of the Project Managers an assessment shall be made

of the progress of the Development Stage and the ability of both Parties

to fulfill the terms of this Agreement. Should both Parties agree in

writing during the Development Phase that it is no longer possible to

fulfill the terms of this Agreement, then this Agreement shall be

terminated.

ARTICLE 5 - FACILITY PROGRAM

5.1 CONSTRUCTION OF FACILITY

Subject to successful completion of the relevant parts of the Development

Phase to the satisfaction of pSiMedica, QSA shall construct the Facility

at its site in Braunschweig, Germany to carry out the manufacture of

Sources. QSA will use its commercially reasonable best efforts to complete

the Facility Program in accordance with the Gantt chart set forth in

Schedule B. Schedule B may only be modified as agreed in writing by the

Parties.

5.2 FACILITY PROGRAM CAPITAL COST

The actual capital cost of the Facility Program will be calculated on a

time and materials basis as set out in Article 9.1. The facility shall be

completed by QSA on or about 18th May, 2005. The budgeted capital cost for

performance of the Facility Program by QSA is estimated at the Effective

Date to be One million two hundred and forty four thousand one hundred

Euros.((euro) 1,244,100), inclusive of contingency and QSA administration

fees. Any cost in excess of the estimated budgeted capital cost shall be

subject to the prior written authorization of pSiMedica.

<PAGE>

ARTICLE 6 - ASSET OWNERSHIP

6.1 EQUIPMENT

(i) Under this Agreement QSA will purchase or manufacture, on behalf of

pSiMedica, the Hot Cell(s) and Equipment, which will be installed in

the Facility as described in Schedule B. Upon completion of the

purchase or manufacture of the Hot Cell(s) and Equipment, a warranty

bill of sale in a form reasonably acceptable to pSiMedica, shall be

executed and delivered to pSiMedica transferring full title to such

Hot Cell(s) and Equipment dedicated to pSiMedica requirements free

and clear of all liens, claims, or encumbrances. Subject to

pSiMedica's obligations to transfer ownership of the Hot Cell to QSA

under circumstances as set forth in this Agreement, pSiMedica shall

at all times hold all right, title and interest in the Hot Cell and

Equipment; provided, however, that during the term of this

Agreement, usage thereof shall belong exclusively to QSA for the

purposes of producing Sources for pSiMedica at the Braunschweig,

Germany site. Since the Equipment will be in QSA's possession, QSA

represents and warrants that the Hot Cell(s) and Equipment insofar

as circumstances that are wholly under the control of QSA shall not

be encumbered, and shall, during the term of this Agreement, remain

free and clear of any and all encumbrances including, but not

limited to, mortgages, charges and liens and that no effective

financing statement, pledge or other instrument similar in effect

covering all or any part of the Hot Cell(s) or Equipment has been

agreed or will be agreed by QSA or Parties claiming by, through or

under QSA.

(ii) In partial consideration of the services to be performed hereunder

by QSA and in consideration of the payment of [***] the sufficiency

of which is hereby acknowledged, on the earlier of the natural

expiration or termination of this Agreement by pSiMedica (for

whatever reason other than the default by QSA), should QSA wish to

retain the use of the Hot Cell(s), pSiMedica agrees without further

notice or demand to transfer all of its right, title and interest in

and to the Hot Cell and Equipment to QSA. After transfer of title,

QSA will following such transfer be responsible for any

decontamination or decommissioning costs of the Facility.

(iii) At the conclusion of this Agreement (for what ever reason) the Hot

Cell and other dedicated Equipment at Braunschweig, will need to be

decontaminated and decommissioned. This shall be the responsibility

of pSiMedica unless QSA is able and chooses to exercise its option

to acquire title to the Hot Cells and Equipment. At the time of the

completion of the Facility, on or about 30th December, 2004,

pSiMedica shall establish an Escrow Account for the estimated cost

to Decontaminate and Decommission the Facility [***]This Escrow

Account shall be funded either by an irrevocable letter of credit,

and be held by pSiMedica's attorney. Should QSA decline to exercise

its option, or fail to be allowed to exercise the option due to its

default of this Agreement, to own the Hot Cell and the Equipment,

then upon the natural expiration or termination of this Agreement by

pSiMedica the funds established by PSiMedica in the "Decontamination

and Decommissioning" Escrow Account or through the letter of credit

will be made available to QSA and shall be used exclusively for the

decontamination and decommissioning of the Hot Cell(s) and any other

Equipment prior to their removal by pSiMedica from the Braunschweig

site. Should QSA exercise the option to own the Hot Cell(s) and the

Equipment, then the funds held in the Escrow Account will revert to

pSiMedica or the letter of credit canceled. At each calendar year

end during this Agreement, pSiMedica will increase or decrease the

balance of the Escrow Account or the letter of credit to reflect the

reasonable costs of Decontamination and Decommissioning as estimated

by QSA. If the balance of the Escrow Account exceeds the funds

necessary for Decontamination and Decommissioning, the excess shall

be returned to pSiMedica immediately upon completion of

Decontamination and Decommissioning.

<PAGE>

(iv) Except as may be provided in accordance with Article 16.1 sub-clause

(ii), in no event may QSA use or permit any third Party to use the

Hot Cell(s) or Equipment for the manufacture of any Sources, any

products which use technology of pSiMedica, or any products which

could compete with the sale of Sources or the Medical Device

(including the Source) by pSiMedica. If title to the Equipment and

Hot Cell(s) is obtained by QSA, QSA may not sell, transfer, lease,

or permit the use of the Hot Cell(s) or the Equipment by third

parties without first notifying pSiMedica and providing pSiMedica

the opportunity to match the terms of any such sale, transfer,

lease, or permit. Should pSiMedica decline to exercise such an

option to purchase or acquire use of the Equipment and Hot Cell(s)

then QSA shall be relieved of all obligations under this Article.

(v) It is understood that pSiMedica may finance the purchase and

construction of the Hot Cell(s) and Equipment through debt and

provide a preferred security interest (Sicherungseigentum) in the

Hot Cell(s) and Equipment to a financing institution or other

lender. Until such time as pSiMedica has made the transfer as set

out in Article 6.1sub-clause(ii) or has otherwise transferred

ownership of the Hot Cell(s) or Equipment as set out elsewhere in

this Agreement (the "Transfer Date"), QSA shall have, and is hereby

granted a secondary security interest (nachrangiges

Anwartschaftsrecht auf Sicherungseigentum) in and to the Hot Cell(s)

behind any security interest provided to any financing institution

or other lender. The secondary security interest in the Hot Cell(s)

and the provision for eventual Decontamination and Decommissioning

set forth above shall be perfected by possession of the Hot Cell(s)

by QSA and shall be effective as of the date of commencement of

installation of such Hot Cell(s) and shall serve as collateral for

the carrying out of the obligations of pSiMedica set out in this

Agreement. Until the Transfer Date, QSA at all times during the Term

of this Agreement shall be entitled to the use and possession of the

Hot Cell(s) and Equipment in accordance with this Agreement, and the

Hot Cell(s) and Equipment, shall be maintained and preserved by QSA

at its expense in accordance with the provisions set out in this

Agreement. pSiMedica shall execute all documents reasonably required

to provide a secondary security interest in and to the Hot Cell(s)

to QSA.

<PAGE>

(iv) The labor rates and material handling markups on assets constructed

by QSA or its affiliates for this Phase are set forth at Article 9.1

hereto.

ARTICLE 7 - GENERAL MANUFACTURE AND SUPPLY OBLIGATIONS

7.1 SOURCE SUPPLY

QSA agrees to use the Process to produce Sources that meet the

Specifications in conformity with all applicable laws, rules and

regulations of Germany, the European Union and the United States and to

ship Sources as directed by pSiMedica. Subject to the provisions of

Article 27, during the Initial Term of this Agreement and any renewal or

extension thereof, QSA shall manufacture as provided in the preceding

sentence and provide pSiMedica with Sources which shall be ordered by

pSiMedica under this Agreement for the purposes of clinical trials and

commercial sale of the Medical Device.

7.2 BATCH SIZE AND MINIMUM PURCHASE COMMITMENT

pSiMedica agrees that it shall order Sources at the price set forth in

Article 9.3 in batch sizes no smaller than the Minimum Batch Size.

pSiMedica further agrees that it shall purchase from QSA a minimum of

[***] Sources during each twelve months period after commencement of the

Commercial Phase for the remaining period of this Agreement. Should

pSiMedica not order the minimum number of Sources in any twelve month

period from the commencement of the Commercial Phase, then it shall pay

QSA a penalty of [***] for the difference between the number of actual

Sources ordered and the minimum purchase requirement for that period.

7.3 TESTING AND DOCUMENTATION

QSA shall certify in writing, to pSiMedica, and shall provide backup

evidence as requested, that each Batch of Sources was produced and tested

in compliance with:

(i) the Specifications; and

<PAGE>

(ii) all applicable laws, rules and regulations of Germany, the European

Union and the United States, and in accordance with procedures

agreed between pSiMedica and QSA.

The tests and analyses provided in the Specifications as well as the

nature and form of written certification may be amended from time to time

only by mutual written consent of the Parties.

7.4 REPAIRS AND MAINTENANCE

After the Facility is installed, QSA shall maintain such Facility, Hot

Cell(s) and Equipment in satisfactory operating condition, as required to

enable QSA to manufacture Sources to Specification in accordance with the

Process and all other applicable laws, regulations, rules or orders. In

the event of any conflict between the applicable laws, regulations, rules

or orders, QSA will notify pSiMedica of such conflict and the Parties

shall act in good faith to resolve such conflict or to determine which

laws, regulations, rules or orders should take precedence. Routine

repairs, preventive maintenance and service contracts for the Facility and

Equipment shall be arranged by QSA.

ARTICLE 8 - GENERAL OBLIGATIONS

8.1 ISOTOPE SUPPLY

QSA shall obtain reactor irradiation space sufficient to meet its

obligations hereunder.

QSA shall contract for the supply of the irradiation facility(ies) to

produce the Isotope necessary for QSA's production of Sources pursuant to

this Agreement.

8.2 UNAVAILABILITY OR SCARCITY OF REACTOR IRRADIATION

It is understood that QSA's obligation to supply Isotope is conditional,

depending upon its ability to obtain a sufficient supply of the Isotope by

the reactor irradiation of feedstock doped BioSilicon(TM) supplied by

pSiMedica. QSA will use its best efforts to locate and obtain sufficient

reactor space to produce Isotope to manufacture the Sources required by

pSiMedica. QSA will notify pSiMedica upon QSA's first knowledge of a

shortage or likelihood of any shortage of Isotope if such shortage will

impact the manufacture of the Sources. Except as set out below, QSA shall

not be liable for any delays in the supply of Isotope if due to causes

described in Article 27 hereof.

8.3 PRODUCTION PLANNING FOR CLINICAL TRIAL AND COMMERCIAL SUPPLY

During the first five (5) business days of each month commencing with the

Commercial Phase of this Agreement, QSA and pSiMedica will establish a

schedule of Batch runs for the next twelve (12) weeks. pSiMedica shall

provide QSA with confirmation of Batch orders no later than fourteen (14)

days prior to a Scheduled Batch Completion Date. QSA shall be under an

obligation to deliver to pSiMedica the confirmed Batch order within the

agreed time schedule for such delivery. This approach to production

planning may be modified as mutually agreed to by the Parties based upon

pSiMedica's and QSA's experience in clinical and commercial supply.

<PAGE>

ARTICLE 9 - PAYMENTS

9.1 DEVELOPMENT AND FACILITY PROGRAM

As with the previous Agreements signed by the two Parties hereto, in

performing the Development Phase QSA will invoice pSiMedica monthly in

arrears, providing an adequate description of the work billed. [***]

In the Facility Program, QSA will provide labor at the hourly billing

rates detailed at Schedule A, [***].

All charges not included in Schedule A or B hereto shall be subject to the

prior written approval of pSiMedica. Charges shall be due only for

services, material and equipment authorized by the terms of Schedule A or

Schedule B. Monthly invoices that include detailed cost statements shall

be submitted to pSiMedica for work performed during the prior month.

[***]

9.2 PAYMENT FOR REPAIRS AND MAINTENANCE

QSA shall be responsible for the payment of all repair and maintenance

costs. pSiMedica will repay all reasonable expenses for any Major Repairs

to or replacement of the Equipment except for QSA Repairs. All costing for

all repairs shall be on the same basis as the Facility Phase.

The maximum amount QSA will be required to pay in any calendar year for

routine repairs, preventive maintenance and service contracts for the

Facility and Equipment shall be [***], plus all amounts required for QSA

Repairs. Any reasonable amounts for routine repairs, preventive

maintenance and service contracts for the Facility and Equipment other

than QSA Repairs in excess of [***] in any calendar year will be borne by

pSiMedica. Preventive maintenance and service contracts for the Equipment

in excess of [***] which are approved in advance by pSiMedica will be

borne by pSiMedica. All amounts set forth in this Article shall be based

on [***] QSA shall co-ordinate with and advise pSiMedica regarding the

advisability of any Major Repair or replacement. The only repairs, if any,

to the Facility or Equipment which shall be borne by pSiMedica are those

set forth in this Article. All other repairs shall be borne by QSA.

<PAGE>

9.3 PURCHASE PRICE FOR SOURCES

Prior to the commencement of the Commercial Phase, the Parties shall agree

the price that shall be paid by pSiMedica for each Source that QSA

produces to Specification. [***]

9.4 [***]

9.5 PAYMENT TERMS

Except as otherwise provided herein, all invoices shall be paid within 30

days. Where there is any dispute with regard to any item on any cost

statement and or invoice, payment for that item shall be withheld until

such time as any dispute is settled. Payment shall not be withheld from

any item that is not under dispute.

All payments, costs and prices included in this Agreement shall be

exclusive of all taxes.

9.6 CURRENCY

Unless otherwise specified, all sums set out in this Agreement shall be in

Euros.

<PAGE>

9.7 AUDIT

QSA shall keep accurate books and accounts of record in connection with

the manufacture by it of the Sources in sufficient detail to permit

accurate determination of all figures necessary for verification of all

compensation required to be paid pursuant to Article 9. QSA shall maintain

such records for a period of three (3) years after the end of the year in

which they were generated. These records may be audited by pSiMedica in

accordance with this Agreement, and shall be available for review by

pSiMedica at any time upon reasonable notice.

Except as provided below, pSiMedica, at its sole expense and through its

accounting personnel or, if pSiMedica elects, through an independent

certified public accountant reasonably acceptable to QSA, shall have the

right to examine the books and records of QSA relating to the activities

of QSA hereunder and compensation due QSA hereunder for the sole purpose

of verifying such statements. Such audit shall be conducted upon six (6)

weeks' prior written notice to QSA during ordinary business hours, and

shall not be more frequent than once during each calendar year. pSiMedica

agrees to keep in strict confidence all information learned in the course

of such audits, except when it is necessary to reveal such information in

order to enforce its rights under this Agreement. pSiMedica's right to

have such records examined shall survive termination or expiration of this

Agreement for a period of one (1) year. As each Phase of this Agreement

shall be priced and invoiced in a different manner, any financial audits

undertaken by pSiMedica, shall be done in a way that is appropriate for

the type of pricing and invoicing that was undertaken. In all events, QSA

shall promptly remit to pSiMedica the amount of any overpayment, plus

interest at the rate of 10% per annum from the date such payment was

received by QSA until repaid to pSiMedica. In addition, if the audit

reveals an overcharge of more than ten percent (10%) of the amount due,

QSA shall reimburse pSiMedica for the cost of the related audit and any

costs incident thereto, including attorney's fees and all costs of

collection. Should such audits reveal that QSA have undercharged

pSiMedica, then pSiMedica shall promptly remit to QSA such sums as have

not been recovered.

ARTICLE 10 - ORDERS AND SHIPMENTS

10.1 ORDERS AND SHIPMENTS

During the term of this Agreement, pSiMedica will forward orders to QSA by

facsimile (or other suitable means). Such orders shall include the

identity of the recipient and delivery destination. Delivery of Sources to

pSiMedica or as otherwise directed by pSiMedica shall initially be

ex-Works transport vehicle at QSA's facility in Braunschweig, Germany.

Risk for the goods shall pass to pSiMedica at point of delivery to the

transport vehicle. Title to the goods shall pass to pSiMedica upon QSA

receiving payment from pSiMedica.

<PAGE>

During the term of this Agreement QSA shall subject to Article 27.1, meet

pSiMedica's orders and delivery requirements.

Prior to the first shipment of Sources to any third Party site, QSA shall

obtain from such third Party its license evidencing proper legal authority

for the receipt and possession of the Source by such third Party. If QSA

is unable to obtain such license from the third Party, pSiMedica, upon

QSA's request, shall obtain and provide such evidence of legal authority

for the receipt and possession of the Source by such third Party.

pSiMedica shall obtain all approvals, licenses and permits required to

import the Source into any territory where pSiMedica directs shipments to

be sent.

QSA shall make shipping arrangement with carriers designated in writing by

pSiMedica from the ex-Works point to the delivery site. All transportation

and packaging costs incurred to deliver Sources ordered by pSiMedica shall

be borne by pSiMedica.

10.2 BATCH NOT MEETING SPECIFICATIONS

If either Party or its designee discovers that a Batch of Sources does not

meet the Specifications, then the discovering Party shall promptly

communicate in writing with the other Party to determine a mutually agreed

course of action. With respect to any such Batch of Sources which do not

meet Specifications as a result of shortcomings in process or parameters

under the direct control of QSA, then QSA will promptly:

(i) replace such Batch of Sources at no additional cost (with QSA also

paying all costs to deliver such replacement Batch to the pSiMedica

designated site);

(ii) reimburse pSiMedica for its actual costs incurred to return the

Sources to QSA and for any purchase price paid by pSiMedica for such

Sources; and

(iii) indemnify pSiMedica for any other costs it incurs by reason of such

Batch of Sources or single Source not meeting Specifications. [***]

10.3 INVENTORY REQUIREMENTS

Within one month of the commencement of the Commercial Phase of this

Agreement, QSA shall maintain a reasonable minimum Source inventory of

Sources to be agreed between the parties which will have a value according

to the pricing agreed in Schedule E. This minimum inventory stock level

shall be reviewed by QSA and pSiMedica at quarterly intervals to ensure

compatibility with forecasted purchasing volumes. Upon Termination of this

Agreement for any reason whatsoever, pSiMedica shall purchase the minimum

inventory stock at QSA.

<PAGE>

ARTICLE 11 - LICENSE

11.1 ROYALTY FREE LICENSES

pSiMedica hereby provides to QSA a non-exclusive, non-transferable,

royalty free license during the term of this Agreement to use pSiMedica

Technology, for the sole purpose of assisting QSA in carrying out its

obligations set out in this Agreement. QSA hereby provides to pSiMedica a

non-exclusive, non-transferable, royalty free license during the term of

this Agreement to the Background Technology, for the sole purpose of

assisting pSiMedica in carrying out its obligations set out in this

Agreement.

ARTICLE 12 - PSIMEDICA REPRESENTATIONS AND WARRANTIES

12.1 PSIMEDICA REPRESENTATIONS AND WARRANTIES

pSiMedica represents, warrants and covenants that:

(i) it has full right, power and authority to enter into this Agreement;

(ii) it is the owner or licensee, in Germany, the United Kingdom and the

United States, of the patents, data, information and technology

supplied to QSA by pSiMedica to assist QSA in carrying out its

obligations hereunder;

(iii) exercise of the patent(s) and technology provided by pSiMedica do

not, to pSiMedica's best information and belief, infringe any

patents, copyright or other industrial or intellectual property

rights of third parties;

(iv) it has the right to provide any license and right to permit QSA to

use the patents and technology related to the Sources provided to

the extent required to assist QSA in carrying out its obligations

under this Agreement;

(v) it has not received any notice of adverse claim or infringement of

any patent or misappropriation of trade secrets in connection with

the use and exploitation of the patents, data, information and

technology provided hereunder and related to the Sources; and

(vi) this Agreement has been duly authorized by all necessary corporate

action and constitutes a valid and binding agreement of pSiMedica,

enforceable in accordance with its terms.

(vii) it has complied with all corporate formalities required to legally

bind it to this Agreement;

(viii) it has executed no agreement in conflict herewith;

<PAGE>

(ix) it shall exercise its rights and engag

SITE SEARCH

AGREEMENTS / CONTRACTS

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates