MANUFACTURING AND SUPPLY AGREEMENT

Alexia Publication 18 April 2023 | 0

NB; the highlighted passages correspond to variables or options

Between the undersigned

The subcontractor

The company [[subcontractor’s name]], [[company form of the subcontractor]] with a capital of [[amount of the subcontractor’s capital]] EUR with its registered office at [[address of the subcontractor’s registered office]], registered in the [[registration city of the subcontractor]] Trade and Companies Register under number [[subcontractor register number]], in the person of its legal representative, [[name of the subcontractor’s legal representative]], in the capacity of [[position of the subcontractor’s legal representative]] hereinafter referred to as “the subcontractor”

Of the first part,

The Client

The company [[Client’s name]], [[company form of the client]] with a capital of [[amount of the client’s capital]] EUR with its registered office at [[address of the client’s registered office]], registered in the [[registration city of the subcontractor]] Trade and Companies Register under number [[client register number]], in the person of its legal representative, [[name of the client’s legal representative]], in the capacity of [[position of the client’s legal representative]] Referred to hereinafter as “the Client”

Of the second part

Hereinafter individually referred to as the “Party” and jointly as the “Parties”.

WHEREAS

The Client’s corporate purpose is to prepare, manufacture andmarket the product [[Name of the product]].

The Client markets products defined in the Specifications Document in Appendix [[appendix to the specifications]] to this agreement, hereinafter referred to as “Product”, the design of which it controls.

The subcontractor has extensive experience in the techniques involved in manufacturing the “Product”.

Optional: Said Product has been previously developed in accordance with the terms of the development specifications document attached as Appendix [[prior development annex]] to this agreement

The subcontractor or its Affiliated Companies (companies belonging to the subcontractor) have manufacturing sites in [[cities and countries of the manufacturing sites]] and suitable manufacturing equipment complying with the requirements of the legislation in force, as well as the necessary administrative authorizations.

The Client holds the Authorization or Certification file for the Product and wants to have it manufactured by the subcontractor.

Said certification file or Authorization (1) is the product of the subcontractor’s research and development (see specific contract Number) (2) is supplied by the Client and is the product of its own research

The task to be entrusted to the subcontractor under this agreement will include, on the first part, the purchase and storage of the raw materials necessary for the manufacturing, and, on the second part, manufacturing, packaging and delivery of the Product to the Client

NOW, THEREFORE, THE FOLLOWING IS AGREED:

Article 1 – Purpose of the Agreement

1.1 – Definition of the purpose

The purpose of this Agreement is to define the terms under which the Client entrusts the manufacturing of the Products to the subcontractor.

The Products and their specifications are detailed in Appendix [[product annexes and their characteristics]].

The subcontractor undertakes to manufacture the Products according to said specifications.

The Products shall be stored and used under normal conditions, in accordance with the technical data sheet in Appendix [[technical data sheet apprendix]].

1.2 – Contractual documents

The contractual documents are hereby listed in decreasing order of priority:

These general terms and conditions of the Agreement, its annexes, i.e.:

Hereinafter referred to together as the “Agreement”

The Agreement prevails over any other document of any kind, prior or not, in particular any quote, general terms and conditions of sale or purchase, any correspondence between the Parties prior to signature of this Agreement, which shall alone govern the commercial relationship between the Parties and the Orders placed by the Client with the subcontractor regarding the Products, unless it is expressly decided otherwise in writing by the Parties.

In addition, all amendments which will, where necessary, be made to the terms of the Agreement shall be made in the form of a rider signed by the duly authorized representatives of the Parties.

Article 2 – Definitions

In this Agreement, the following definitions shall apply:

Affiliates	This means the subcontractor and all the subsidiaries it owns in law or controls in fact, which currently means [[name of the subcontractor and its subsidiaries]].
Agreement	This means this Manufacturing Agreement and its annexes.
Guaranteed Minimum	This means the minimum quantity of Products which the Client undertakes to order each contractual year.
Services	This means the manufacturing, sale, and delivery of the Products in accordance with the Agreement,
Products	This means the products listed in Appendix [[specifications and product descriptions]] which are composed of the Active Substance, excipients, and packaging components.
Active Substance	This means the Product component which gives it its diagnostic, preventive, or curative effect.
Technical Specifications	This means all the instructions and technical specifications in Appendix [[specifications and product descriptions]] developed and disclosed by the Client to the subcontractor, and with which the latter must comply during the manufacturing process.

Article 3 – Confidentiality and security of personal data

3.1 – Confidentiality

The Parties undertake as a non-disclosure clause, throughout the terms of this agreement, and for a period of five (5) years after its expiration, regardless of the reason for such termination, to maintain complete confidentiality, by refraining from disclosing, directly or indirectly, any information, knowledge or knowhow whatsoever concerning their co-contractor and its operating procedures, to which they may have had access in the performance of this contract, unless such information, knowledge or expertise have entered the public domain, or its disclosure is made necessary by virtue of a specific regulation or an administrative or judicial injunction.

They also undertake to ensure that this obligation is respected by all the members of their staff concerned.

They shall likewise refrain from disclosing to third parties the existence of this agreement and of all or part of the performance entrusted unless the other Party has given its prior written consent.

If there is a penalty clause

In the event that one of the parties does not fulfill its commitment, it shall automatically be liable to the other for a fixed indemnity of an amount equal to EUR [[indemnity Amount]].

3.2 – Personal Data Security

If personal data are present in the agreement

In accordance with Article 24 of the GDPR (General Data Protection Regulation), which entered into force on May 25, 2018, the data controller [[First name and last name of the data controller]] undertakes to implement appropriate technical and organizational measures to guarantee the security of personal data and the rights of persons whose data have been collected (the right of information, the right of access, the right to rectification and the right to erasure, the right to limitation of processing, the right to portability…

Similarly, the data controller must define a retention period for documents containing personal data, based on their purpose.

The data controller or its subcontractor in charge of archiving must adequately guarantee the security and confidentiality of the data in its possession.

If the use of personal data is limited to the performance of the agreement

Personal data will only be used for the purposes of the Agreement and not for any other purposes, in accordance with the GDPR (General Data Protection Regulation) which entered into force on May 25, 2018.

Article 4 – Purchase of raw materials, components, and packaging items

4.1- The subcontractor’s Task

If raw materials are purchased from suppliers

The subcontractor shall purchase, in accordance with the Specifications Document attached hereto, all Raw Materials, Components and packaging items from suppliers, which must have been approved by the Client in advance and whose details are listed in the above-mentioned specifications.

Optional

It is agreed between the parties that the subcontractor will under no circumstances be able to use a supplier not authorized by the Client, unless the Client has given its prior express written consent, and the subcontractor has to provide the Client with all the data necessary for the identification of such new supplier and the references justifying this choice.

4.2 – Purchase of raw materials by the subcontractor

If raw materials are purchased from suppliers

The subcontractor will purchase all the raw materials necessary for manufacturing the product from the [[suppliers approved by the Client]] and in accordance with what is defined in the Specifications Document.

4.3 – Purchase of packaging items by the subcontractor

4.3.1 – Supply of packaging materials

The subcontractor will procure the packaging materials freely, and without the need for any prior approval [[specify here, whether secondary or primary packaging materials are mentioned]]

If the client provides the necessary design elements

The Client will send to the subcontractor all the elements necessary to design the Product packaging and labelling.

The subcontractor undertakes to send to the Client a model of the Product packaging for validation.

The subcontractor may not commence production until it has received prior written validation from the Client.

Upon validation by the Client, the subcontractor may pack the Products in the packaging in question. If the Client has requested changes to the mock-up sent, the subcontractor undertakes to modify such mock-up before production and to resubmit it for validation, as long as the above-mentioned changes are within the contractual scope and do not entail any additional costs for the subcontractor.

If sourcing from third party suppliers

The subcontractor will purchase the various product packaging items from the [[suppliers approved by the client]] in accordance with what is defined in the Specifications Document, at the prices and terms negotiated by the Client.

4.3.2 – Responsibility for packaging

The Client is aware that the subcontractor will not carry out any checks on the legality of the desired packaging and labelling, nor of the promotional lines and materials, and consequently the subcontractor is released from any liability regarding the Product packaging and labelling.

Each packaged Product shall contain the Product’s information notice.

To this end, the Client will provide the subcontractor with the certified translations necessary for the Product packaging. The Client takes sole responsibility for these translations and the resulting labelling. The subcontractor shall not be obliged to check the translations for conformity with the original instruction notice, even if the instructions and other elements of the packaging items have been communicated to the client by the subcontractor in French, English, or a national language, in the case of a sold or licensed file. In this respect, the Client represents and warrants to the subcontractor that the translation is correct and that it alone shall bear the consequences of any incorrect translation of the instructions for use or of any other part of the packaging.

The subcontractor also reserves the right, in particular for licensed products, to have any of the translations submitted by the Client checked; in the event of deviation from the MA or the CE marking for medical devices, the following provisions shall apply:

a/ the Client shall reimburse the subcontractor for the translation costs incurred;

b/ the subcontractor may immediately suspend the production of any orders in progress;

c/ the Client will send the subcontractor amended labelling and packaging instructions reflecting the changes necessary to comply with the MA/CE marking application;

d/ the subcontractor will benefit from a new delivery period taking into account the production constraints involved;

e/ in any case the subcontractor will not be held liable for the potential consequences related to this discrepancy and the Client undertakes to hold the subcontractor harmless in this respect.

4.4 – Control on raw materials

Once the raw materials are delivered on its site, the subcontractor shall check them in accordance with the Specifications Document and the Technical Specifications

The subcontractor states that the raw materials described in the Specifications Document and included in the Product’s composition are not, as far as is known, prohibited by the French and European health authorities.

Should the subcontractor be informed of a decision by the health authorities prohibiting the use of one or more raw materials composing the Product, it undertakes to notify the Client immediately and to implement the procedure set forth in Article 6.1.1.

4.5 – Products Storage by the subcontractor

4.5.1 – Prior to delivery, the subcontractor shall store the Raw Materials, Components, Packaging Items, and the Product in a place designated for this purpose.

The Products storage area may be audited by the Client under the terms set out below.

4.5.2 – The subcontractor represents and warrants that it is insured with a reputed local company against the risks of fire, theft, total or partial destruction, water damage or deterioration.

Article 5 – Manufacture, Orders and Deliveries of the product

5.1- The subcontractor’s Task

Under the terms laid down in this contract, the subcontractor undertakes to manufacture products for the benefit of the Client and to deliver the Products to the place defined below.

5.2- Manufacturing Terms

The subcontractor shall provide the Client with all the information required by the regulatory authorities in order to maintain to the best of its knowledge the traceability of the entire manufacturing and packaging process.

The subcontractor will comply with the production process of the Products defined in the Specifications Document, annexed hereto as Appendix [[specifications and product descriptions]].

Optional:

The subcontractor undertakes to inform the Client of any significant changes in the operational process and production tool as defined in the Specifications Document.

In such a case, the Parties agree to meet and finalize the negotiation within a period of thirty (30) days at most, in order to establish the possible consequences that such modification could have on the performance of the contract by the subcontractor.

In order to ensure the traceability of the manufactured batches, the subcontractor shall indicate on each batch, in accordance with the Specifications Document, the year of manufacture, the month, the production order and the name of the product.

In accordance with the Specifications Document, the subcontractor undertakes to provide the Client with a batch file at the end of the production of each batch.

Safety, component, and product handling:

The subcontractor undertakes to deliver to the Client the safety data sheets for the materials specified in the Specifications Document.

5.3 – Audits/Visits

The Client may carry out a quality audit at the site involved in the manufacturing, or have a quality audit carried out, once a year during the Contract, at its own cost, by any auditor of an organization bound by professional secrecy, without being required to justify its reasons. The audit shall take place during normal working hours and shall not disrupt the subcontractor’s business. The external auditor is authorized to take samples.

Optional: The maximum duration of the audit shall be [[maximum duration of the audit]] days. (limitation of the number of persons per year, and be careful to check consistency with the quality agreement or the specifications)

The Client undertakes to notify the subcontractor in writing (by registered letter with return receipt) of its wish to carry out such an audit with a minimum notice of 7 days, stating the purpose of the task, its planned duration, and the name of the appointed auditors, being limited to [[maximum duration of the audit]] days.

The subcontractor undertakes to cooperate with the appointed auditor in good faith and without reservations.

At the subcontractor’s request, the Client also undertakes to ask each expert tasked with an audit to sign a personal confidentiality commitment.

A copy of the audit report will be given to the subcontractor free of charge and will be jointly examined by the Client and the subcontractor.

5.4 – Orders and Planning

5.4.1 Guaranteed Minimum

5.4.1.1 For each contractual year, the Client undertakes to order from the subcontractor the Guaranteed Minimum set out in Appendix [[minimum order commitment & minimum deliveries]] of this Agreement.

If the Client fails to comply with this Guaranteed Minimum, it undertakes to pay the subcontractor the difference between the orders actually placed and the applicable Guaranteed Minimum. The methods for calculating this differential are set out in Appendix [[minimum order commitment & minimum deliveries]].

5.4.2 – Order forecasts

Each month, the Client will send to the subcontractor its order forecasts for the next twelve (12) months, so as to enable it to draw up a manufacturing plan.

Upon signature of the Agreement, these forecasts are shown in Appendix [[minimum order commitment & minimum deliveries]].

In the event that the forecasts and firm orders come to exceed the initially confirmed quantities, the Client shall inform the subcontractor as soon as possible, so that the parties can jointly review the consequences and decide on any changes to the manufacturing schedule and, as applicable, the supply of Active Substances, excipients, and packaging items.

In this case, the subcontractor will make its best efforts to respond favorably to the Client’s request.

In the event of an increase in the order forecast that exceeds the subcontractor’s production capacity as provided for in this Agreement, and which is expected to result in investments for the subcontractor, the parties will confer on how they will respond to the request for an increase in volume and, if applicable, on the economic and financial effects of such potential investments on the subcontractor.

5.4.3 – Ordering procedure

The Client will send its firm orders, specifying the quantity of Products ordered. It will send its orders by e-mail or by any other written means to the following address: [[ordering address]] indicating the desired delivery date; this may not be less than three (3) months after the date on which the order has been processed or less than four (4) months after the first order and after validation of the packaging items.

If manufacturing of the Product is subject to prior supply of the Active Substance by the Client, the Client shall state this in its order, as well as the deadlines by which it intends to deliver the Active Substance to the subcontractor.

At the time orders are received, the subcontractor shall send by email an acknowledgement of receipt of the orders within five (5) days, setting forth dates of manufacture and delivery, which shall be no later than three (3) months from the order date. If the subcontractor fails to send such an acknowledgement receipt within five (5) days, the order is deemed as accepted by the subcontractor.

Orders will be deemed firm and irrevocable and will be binding on the Parties once they have been accepted and confirmed by the subcontractor.

Should the subcontractor fails to manufacture and supply the Products to the Client within three (3) months after the Client has received an order receipt acknowledgment by the subcontractor, the subcontractor shall provide the Client with a 50% discount on the prices of Products details in Appendix [[prices of products details]], as may be amended from time to time.

No order may be cancelled without the express written agreement of the subcontractor. Thus, in the event that the subcontractor accepts the cancellation of an order, the Client will owe the subcontractor an indemnity corresponding to: a) the price of the material, labor and expenses incurred by the subcontractor for the preparation of said order, and b) 15% of the price corresponding to the cancelled order.

5.5 – Delivery/ Acceptance

The Products will be delivered by [[cities of the factories that will deliver the product]]

The Client will bear all the costs (including transportation and insurance) and risks inherent in transporting the Products, from loading at the subcontractor’s premises until unloading at the desired destination. The subcontractor may not therefore be held liable in any case for events occurring during transport, such as destruction, damage, loss, or theft.

The minimum volume per delivery is specified in Appendix [[minimum order commitment & minimum deliveries]]. If the order volume does not reach the minimum delivery volume, deliveries will be deferred until the stated minimum is reached or, at the Client’s choice, delivered with an increase of [[percentage of the increase]]%.

The subcontractor will notify the Client when the Products are available. If the Client does not collect the products within seven (7) days from receiving this notification, the subcontractor is entitled to store the goods in a warehouse at the Client’s cost. If the Products have not been collected for seven days after they become available, the subcontractor may charge a penalty of 10 euros per pallet and per additional calendar day of delay.

5.6 Release of batches

The subcontractor will be responsible for the production of batch files in accordance with the specifications.

It shall forward the files corresponding to the batches to Quality Control as soon as they are dispatched to the Client, as referred to in the specifications attached in Appendix [[specifications and product descriptions]].

It is the Client’s responsibility to check the Products provided and to control their quality.

The subcontractor guarantees that the Products delivered comply with the specifications detailed in Appendix [[specifications and product descriptions]].

The Client proceeds to the definitive release of the batches allowing their distribution on the market.

Before the delivery date of the product, the subcontractor undertakes to inform the Client in writing of any significant incident noted during manufacturing.

The subcontractor will be responsible for archiving a copy of each of these files.

5.7- Refusal of a batch, defective batch

5.7.1 Complaints

Any complains after receipt of the Products, regarding Product conformity, or compliance of a delivery with its order, must be notified to the subcontractor by e-mail, duplicated by a registered letter with return receipt sent within eight (8) days of the Product delivery date. Beyond this deadline, the subcontractor will be released of its obligation to replace the disputed Products.

The Client undertakes to send to the subcontractor all elements proving its complaint, so that the subcontractor can assess the grounds of such complaint.

If the subcontractor deems such claim to be justified, it will inform the Client thereof immediately, so that the latter can, if necessary, send back the Products or have them destroyed, and the subcontractor can replace them as soon as possible. Any related expenses will be borne by the Client and reimbursed by the subcontractor in the form of a credit note.

5.7.2 Batches recall

The Client shall remain solely and exclusively responsible for the management of withdrawals and recalls of Product batches in accordance with its status as operator and the provisions defined in the Specifications.

However, in the event of withdrawal or recall of batches, the subcontractor undertakes to suspend all shipments of the lot(s) concerned and to cooperate in the withdrawal or recall.

The subcontractor will be liable for the costs of recall or withdrawal of batches, the replacement of the Products concerned, and the cost of destruction of non-recoverable Products exclusively when the non-conformity of the batches is entirely attributable to the subcontractor. In all other cases, the Client (or any third party designated by it) will bear all costs incurred for the withdrawal or recall of non-compliant batches.

5.7.3 Re-test

In the event that the subcontractor cannot deliver batches of the Products in line with the required Specifications , the subcontractor shall immediately re-test the batches at their own cost.

Article 6 – Representations and warranties

6.1 – Representations and warranties

6.1.1 Industry regulations

Throughout the term of the Agreement, the subcontractor undertakes to obtain and maintain the necessary authorizations for the performance of the Agreement and to inform the Client as soon as possible in the event of difficulties encountered.

More detailed clause on amendments of regulations in the course of the agreement:

The Parties will meet to discuss any significant regulatory changes affecting the Products. In the event of a change in the regulations applicable to the Products, which were to arise during the performance of the Agreement, and which would involve a significant increase in the subcontractor’s costs and obligations, the subcontractor will immediately notify the Client so that the Parties can discuss in good faith the terms for the continued manufacture of the Product affected by the change in the applicable regulations.

In the event of a persistent disagreement, the subcontractor will be entitled to refuse to manufacture the Product subject to a reasonable notice period, allowing the Client to find an alternative and to ensure a safety stock to prevent any stock shortage. These provisions are without prejudice to the provisions of this agreement regarding unforeseen circumstances.

6.1.2 Quality

The subcontractor represents and warrants that it has a quality assurance system which guarantees traceability, proper handling of complaints and product recall.

The subcontractor also represents and warrants that it carries out internal tests during the manufacturing process and before delivery to the Client.

6.1.3 Contractual warranty

The subcontractor undertakes to manufacture and deliver the Products to the Client in accordance with the terms of this Contract and the Product description given in Appendix [[specifications and product descriptions]].

The Client undertakes to keep the subcontractor informed of any modification that the Products may require in application of sanitary or regulatory provisions.

Under the warranty, the subcontractor’s sole obligation is the free replacement of a Product recognized as defective or non-compliant by the subcontractor, or its reimbursement by a credit note, at the subcontractor’s discretion.

The Client Warranty:

Optional:

That the formula belonging to it, which has been forwarded to the subcontractor for the purposes of manufacturing the Product, complies with the specifications defined in the Specifications Document,
That this formula does not violate any regulatory principles or prohibitions issued by the health authorities at the time of signing this agreement

Moreover, the subcontractor is not in any case liable for the regulatory conditions for marketing the Product on the part of the Client, nor for the local authorizations necessary to the Client so that it can market the product in the territories concerned. It is the Client’s responsibility to obtain prior information on any local regulatory constraints in this regard.

Warranty does not apply to any damage resulting from:

Force majeure,
Storage conditions not complying with the specifications detailed in Appendix [[product storage conditions]]
Inappropriate use and/or use that does not comply with the product specifications or data sheets referred to in Appendix [[specifications and product descriptions]],
Exceeding the expiration date,
Changes to the Products by the Client.
Fault or negligence of the Client.

Any complaint concerning an apparent defect or non-compliance of the Products must be made in writing with acknowledgement of receipt within 8 days of the Product being received by the Client. In the above cases, this warranty cannot be invoked against the subcontractor.

6.1.4 Legal warranty

With regard to hidden defects, any claim must be made in writing with return receipt by the Client to the subcontractor within 8 working days following discovery of the defect, under penalty of being declared inadmissible.

The warranty claim must specifically define in writing the defects in question. The Client must allow the subcontractor or its representative every opportunity to check the faults or defects and remedy them as appropriate.

The Client acknowledges that existence of a claim activating the warranty does not under any circumstances authorize it to withhold payment of any of the subcontractor’s invoices. The Client may not use a warranty claim to suspend or defer its payments.

Article 7 – Liability and Compensation

7.1 The subcontractor’s liability:

The subcontractor undertakes to do everything possible to ensure that the service is carried out properly and according to best industry practice.

It therefore undertakes to do everything in its power to ensure that the Product, when delivered to the Client under the terms provided for in this Agreement, complies with the specifications agreed between the parties in the Specifications Document under Appendix [[specifications and product descriptions]] hereto.

7.2 Client’s responsibilities:

The Client will assume all responsibilities related to its business and the marketing of the Products.

In particular, the Client shall be liable and assume all consequences for:

Specifications and instructions contained in the Specifications Document,
- Errors or omissions concerning the instructions given by the Client in the Specifications Document,
- The responsibilities assigned to it under the terms of the Specifications Document and/or the Agreement, according to the table detailing the distribution of tasks and responsibilities in the Specifications Document [or in the Quality Agreement].
- As well as, where applicable, obtaining any necessary governmental authorizations, permits and licenses relating to the Products.

7.3 – Limitation of Liability

It is expressly agreed that the total amount of compensation that may be owed by the subcontractor to the Client under this Agreement shall in no case exceed the total amount owed by the Client for the calendar year in which the claim was notified, it being specified that this amount may in no event exceed [[maximum amount]].

This limitation of liability shall not apply in the following cases:

Willful misrepresentation, gross negligence, or serious breach by the subcontractor in the performance of the Contract.
Serious or repeated negligence by the subcontractor, affecting the safety of the Products.
The subcontractor’s liability to the Client for personal injury to a third party.

In any event, each of the Parties shall be liable to the other only for direct damages that it may cause in connection with the Agreement, ruling out any compensation for indirect damages.

By express agreement between the Parties, any financial or commercial damage or disruption, loss of earnings, loss of turnover, operating income, profit, orders, or customers, data, or damage to reputation, as well as any lawsuit directed against the Parties by a third party, with the exception of a lawsuit by a third party entailing the tortious liability of one of the Parties, shall be considered as indirect damage that cannot give rise to a right to compensation.

This clause will not prevent either Party from being held liable in the event of a physical injury claim.

The subcontractor’s liability is excluded for all damages resulting from force majeure, storage conditions of defective Products, use of Products that is inappropriate and/or not compliant with the information sheet, and damage due to fault or negligence by the Client. Likewise, the subcontractor will not be held liable for the consequences of the Client’s failure to comply with the legislation in force governing the use, sale, or promotion of Products it sells.

The Client undertakes to indemnify and hold the subcontractor harmless from any claims, costs or damages arising out of any abnormal, improper, or non-compliant use of the Products, negligence, breach of this Agreement or any fault by the Client, including but not limited to storage of the Products in unsuitable conditions, use of the Products in conditions or for purposes other than those for which they are intended.

7.4 – Ethics Clause

7.4.1 The subcontractor acknowledges that it is aware of the Client’s ethical and sustainable development commitments, as applicable, and has a Code of Conduct available on the subcontractor’s website.

7.4.2. The subcontractor represents and warrants to the Client that it complies with all applicable international and national laws relating to:

(i) fundamental human rights, including the prohibition (a) of the use of child labor and any other form of forced or compulsory labor; (b) to discriminate in any way within its undertaking or against its suppliers or subcontractors;
(ii) embargoes, arms and narcotics trafficking, and terrorism;
(iii) trade, import and export licenses and customs;
(iv) the health and safety of personnel and third parties;
(v) labor, immigration, the prohibition of clandestine work;
(vi) environmental protection;
(vii) economic offenses, including corruption, fraud, influence peddling (or equivalent offense under the national law applicable to this agreement), fraud, theft, misuse of corporate property, counterfeiting, forgery and use of forgery, and any related offense;
(viii) combating money laundering;
(ix) competition law.

7.4.3. The subcontractor undertakes, on its own behalf and on behalf of its suppliers and subcontractors, to comply with these same standards in the performance of the agreement.

Article 8 – Insurance

The Parties undertake to subscribe to an insurance policy covering their respective professional civil liability for all activities and obligations arising out of this .

Likewise, the Parties undertake to maintain such policy for the entire duration of this Agreement and to provide proof thereof upon request by the other Party, by providing it with a certificate from its insurers, listing the covers taken out, the amount therefor and the period of validity thereof.

Any modification, suspension, termination, or withdrawal of a Party’s insurance policy, for any cause, shall be reported to the other Party as soon as possible.

Article 9 – Exclusivity

9.1- Exclusivity for the subcontractor’s benefit

The Parties agree that this is entered into without the Client giving any exclusivity; therefore, it may entrust the manufacturing of the Product to another manufacturer.

9.2 – Exclusivity for Client’s benefit

The Parties agree that this Agreement is concluded without the subcontractor giving any exclusivity; therefore, it may manufacture the Product or any similar Product for other clients.

Article 10 – Intellectual Property

10.1 Each Party retains ownership of its intellectual property rights. This Agreement shall not be construed as transferring any intellectual property rights from one Party to the other.

10.2 Thus, the Client, as the owner of the intellectual property rights on the elements forwarded to the subcontractor, undertakes to bear the entire responsibility for their use by the subcontractor.

Therefore, if proceedings are initiated by a third party against the subcontractor and involving the aforementioned elements on the grounds of patent infringement and/or unfair competition, all damages that the subcontractor is obliged to bear or pay will be entirely borne by the Client, provided that the Client has been notified within a reasonable period of time and that a final or provisionally enforceable decision has recognized such elements as being wholly or partially counterfeiting or constituting an act of unfair competition.

Article 11 – Duration and Termination

11.1 Duration of agreement

Option 1: In the case of fixed-term agreement (où s’arrête l’option 1 et commence l’option 2)

Op 1: This Agreement, which shall take effect from the date of its signature, is entered into for a period of [[number of years]] years.(the “initial period”)

The Parties agree to sign, in parallel with this Agreement, a “Safety data exchange agreements” or “SDEA”, on the understanding that all due diligence obligations incumbent on the Client by the effect of regulations must be met by it independently of the signing of the SDEA

The Agreement shall be tacitly renewed for further periods of twenty-four (24) months, unless terminated by either Party by registered letter with acknowledgement of receipt, subject to a notice period of at least eighteen (18) months before the end of its term.

In the even that the subcontractor terminates the Agreement within the Initial Period, it shall:

a. Reimburse the Client for all the fees it has received from the Client for the tech-transfer and the validation/registration Batches.

b. Assist the Client in locating a new provider for the manufacture of the Product, and;

c. Reimburse the Client for all costs the Client may reasonably incur in locating a new provider for the manufacture of the Product

Op 2: This Agreement, which shall take effect from the date of its signature.

In the even that the subcontractor terminates the Agreement, it shall:

a. Reimburse the Client for all the fees it has received from the Client for the tech-transfer and the validation/registration Batches.

b. Assist the Client in locating a new provider for the manufacture of the Product, and;

c. Reimburse the Client for all costs the Client may reasonably incur in locating a new provider for the manufacture of the Product

11.2 – Consequences of Agreement Termination

At the end of this Agreement, the Client may exhaust its stock of Products in its possession (“Sell-off period”), excluding cases of termination due to fault on its part.

During the Sell-off Period, if the latter applies, the Client undertakes to continue marketing the Products under the due terms and conditions and in accordance with the obligations stipulated in the Agreement.

In the event of breach of contract by the Client that has resulted in termination of the Agreement, the Client will be required to purchase from the subcontractor the excipients ordered for manufacture, whether processed or not, as well as the packaging materials held by the subcontractor. The Active Substance held by the subcontractor will be returned to the Client at the latter’s expense.

In the event of breach of contract by the subcontractor leading to the termination of the agreement, the Active Substance held by the subcontractor shall be returned to the Client at the latter’s written request; at its discretion, the Client may repurchase the excipients ordered for the manufacturing, as well as the packaging materials held at that point by the subcontractor.

Article 12 – Remuneration – Payment terms

12.1 Product Prices

The Client’s purchase price for each Product is laid down in Appendix [[purchase price]] of the Agreement.

12.2 Revision of Product Prices

The prices set out in Appendix [[purchase price]] will be amended on each anniversary date of this Agreement, if requested by the subcontractor, to take into account any rise in the cost of raw materials and labor.

The sale prices will be readjusted, by mutual agreement between the Client and the subcontractor, according to the following terms:

Manufacturing over the previous year;
Sales forecasts for the coming year;
(Variations in the cost of Low Density Polyethylene (“LDPE”) based on €[[amount increase per vial]] increase per vial for €[[amount increase in Low density]] increase in LDPE.)
Variations in the cost of packaging items, which will be passed on in full
The increase in the cost of labor will be passed on to [[something]] on the basis of the inflation index for the Pharmaceutical Industry (Index LEEM [Les Entreprises du médicament (French Medicines Undertakings)].

Under the terms referred to above, the Client acknowledges that the Products’ price is foreseeable, and it therefore accepts any amendment in the price based on the principles set out above. The subcontractor will send to the Client the new applicable prices three months before the anniversary date of the Agreement.

The subcontractor may immediately pass on in its rates, and without prior notice, any new compulsory or similar tax, or any compulsory increase in current taxes; the Client expressly accepts this.

12.3 Invoicing

12.3.1 Payment by the Client of the invoices corresponding to the Products ordered will be made to the subcontractor, thirty (30) days from the date of invoice. Invoices are payable to [[address for paying bills]], at the address on the invoice. Payments are to be made by bill of exchange, check, or transfer to the subcontractor’s bank account.

12.3.2. If the Client fails to pay within the agreed payment deadline, the subcontractor may, as of the following day, automatically and without notice of default, demand payment of interests equals to three (3) times the French legal interest rate in force on that date. The subcontractor may also suspend the orders and deliveries in progress, until full payment of the price.

12.4 – Retention of Ownership

The subcontractor shall retain ownership of the products sold until full payment of the invoiced price, the applicable VAT and all the ancillary charges relating thereto, including any late payment interest that is due.

The delivery of bills of exchange or other instruments creating an obligation to pay does not constitute payment within the meaning of this provision. Payment may only be considered as made upon actual collection of the price by the subcontractor.

The Client undertakes to identify at its premises and insure the products under retention of ownership, to include the subcontractor as a beneficiary of the said insurance, and, in the event of damage, to subrogate the subcontractor in its rights towards the insurer.

The Client is required to immediately inform the subcontractor of any attachment in favor of a third party of the products delivered under retention of ownership.

The Client is authorized, as part of the normal operation of its business, to resell the delivered products, but may not use them, under any circumstances, as collateral.

In the event that the products are resold before full payment, the sale price is deemed to be assigned to the subcontractor until full payment has been made. The authorization to resell before full payment will be automatically withdrawn in the event of court-ordered administration or liquidation of the Client.

Article 13 – Early termination

Optional: If the Parties provide for termination for unforeseen circumstances

13.1 – Termination for Hardship

Without prejudice to the provisions of Article 15 below and notwithstanding the Termination for failure of a party to perform its obligations clause set out below, termination for the impossibility of performing an obligation that has become excessively onerous may only occur, in the lack or failure of renegotiations, thirty (30) days after the sending of a formal notice declaring the intention to apply this clause, notified by registered letter with acknowledgement of receipt or any extrajudicial document.

13.2 – Termination for failure to fulfill a sufficiently serious obligation

Notwithstanding the Termination for failure of a party to perform its obligations clause set out below, in the event of a sufficiently serious breach of any of the obligations by the other Party, the Party that suffers a breach of contract may notify, by registered letter with request for notice of receipt, to the Defaulting Party the termination of this agreement for breach of contract, thirty (30) days after the receipt of an order to comply under the provisions of Article 1224 of the French Civil Code.

13.3 – Force majeure termination

Notwithstanding the Termination for failure of a party to perform its obligations clause set out below, legal termination due to force majeure may only take place thirty (30) days after a formal notice or any extrajudicial document has been sent by registered letter with acknowledgement of receipt.

If the Parties provide for termination for failure of a party to fulfill its obligations

13.4 – Termination for failure of a party to fulfill its obligations

In the event of non-compliance by either Party with the following obligations:

– List each of the obligations not fulfilled (For example, non-payment upon expiration of the services ordered by the Client)

referred to in the articles of this agreement, this may be terminated at the discretion of the damaged party.

It is expressly understood that such termination for failure of a Party to perform its obligations shall be legally effective thirty (30) days after receipt of a formal notice to comply which has remained without effect, fully or in part. The formal notice may be notified by registered letter with request for a notice of receipt or by any extrajudicial document.

Article 14 – Force majeure

14.1 Force majeure

The Parties shall not be held liable if the non-performance or delay in the performance of any of their obligations, as described herein, results from a case of force majeure, within the meaning of Article 1218 of the French Civil Code.

If the Parties agree to determine a particular event as a case of force majeure:

By express agreement, force majeure includes, but is not limited to, catastrophic storms and floods, lightning, earthquakes and other typical natural events, wars, riots, sabotage, trade embargoes, fires, explosions, intervention by governmental authorities, changes in applicable laws that prevent the subcontractor from performing its duties and obligations.

The Party noting the event shall immediately inform the other Party of its inability to perform the service and prove this to the latter. The suspension of obligations shall in no event be a cause of liability for non-performance of the obligation in question, nor shall it result in the payment of damages or penalties for delay.

The performance of the obligation shall be suspended for the duration of the force majeure, provided it is temporary and does not exceed six (6) months. Consequently, as soon as the cause of the suspension of their mutual obligations disappears, the Parties shall make every effort to resume the normal performance of their contractual obligations as soon as possible. To this end, the prevented Party shall notify the other of the resumption of its obligation by registered letter with request for a notice of receipt or by any extrajudicial document.

If the impediment is definitive or exceeds a period of six (6) months, this agreement will be terminated outright under the terms and conditions defined in article 13.3.

During this suspension, the Parties agree that the costs of the agreement generated by the situation will be divided equally.

14.2 Exceptional Period

The Parties are aware of the health emergency situation related to the Covid 19 epidemic, the effects of which are currently underway at the time of the signing of this contract, hereinafter referred to as the “Exceptional Period”.

Consequently, they agree on the following derogatory elements, for as long as the Exceptional Period lasts:

No penalty for delay, nor any claim of any kind, related to the impossibility to provide the service, partially or totally, can be claimed from the subcontractor, as long as the Exceptional Period is underway.

Where applicable, specific negotiations at the request of either party may be held with a view to adapting the Agreement to the Exceptional Period. Such negotiation may give rise, as applicable, and by mutual agreement between the parties, to an “Agreement Freeze”, that is to say, a full postponement of the performance of the Agreement in the event that the impossibility of performing the services were to require such a measure.

The Agreement Freeze period will not be included in the total term of the agreement. Accordingly, the term of the Agreement shall be increased by a period equal to the duration of the Agreement Freeze, so that the overall term of the Agreement is not impacted by the Agreement Freeze.

The subcontractor shall notify its co-contracting party of the end of the Exceptional Period by any means it deems appropriate. Once the end of the Exceptional Period has been notified, the agreement will resume its normal course, in accordance with the provisions prior to the Exceptional Period.

Article 15 – Hardship

In the event that one of the parties wishes to raise a case of hardship as defined by Article 1195 of the French Civil Code, i.e. a change in circumstances unforeseeable at the time of the signing of the contract that makes performance excessively onerous for a party that had not agreed to assume such risk, that party may request its co-contracting party to renegotiate the agreement. During the renegotiations, the latter shall continue to fulfill its obligations.

This reconciliation will take place in the following ways:

The Party wishing to avail itself of the hardship clause shall notify its intention to renegotiate the agreement to the other Party by registered letter with acknowledgement of receipt.

Within one (1) month from receipt of such notification, the Parties will meet in order first to ascertain the hardship situation and then renegotiate the provisions of this Agreement in good faith, with the aim of restoring the originally intended contractual balance. If they so wish, each Party may be assisted by a third party at that meeting.

Each Party shall bear its own costs, disbursements, and fees necessary for the reconciliation.

If no agreement is reached within two (2) months of the implementation of this clause, the agreement may be terminated by one of the parties in accordance with Article 13.1.

Article 16 – Non-Assignability

This Agreement may not be transferred or assigned, in whole or in part, by either Party without the prior written consent of the other Party, except in the case of a transfer to a subsidiary of the subcontractor or Affiliated Company. It is expressly agreed between the Parties that the assignee of all rights to this Agreement shall remain liable for the rights and obligations under this Agreement. Any transfer in breach of the provisions of this Article shall be deemed to be null and void.

Article 17 – Dispute resolution

17.1 Mediation

The Parties shall make every effort to resolve amicably any dispute arising out of the Agreement within three (3) months of notification of such dispute.

In the event of the failure of the amicable procedure, the Parties agree to entrust their dispute to the Center de Médiation et d’Arbitrage of [[city of the center of mediation]] ([[address of the center of mediation]]), at the initiative of the first party to act. The mediation rules and the mediator’s fees will be those of the Center of mediation ([[link to the website of the Center of mediation]]).

17.2 Jurisdiction

In the event that mediation fails, all disputes to which this agreement and the agreements resulting from it may give rise to, and concerning their validity, interpretation, performance, termination, consequences, and follow-ups, shall be submitted to the commercial court of [[city of the commercial court]].

Article 18 – Applicable law and language of the agreement

By express agreement between the Parties, this contract is governed by and subjected to French law.

It is written in French. In the event that it is translated into one or more languages, only the French text will be deemed authentic in the event of a dispute.

Clause 19 – Miscellaneous

19.1 This Agreement and its Appendixes express and contain the entire understandings between the Parties. They supersede all other agreements or negotiations, whether oral or written, between the Parties regarding the subject matter of this Agreement.

Amendments and/or changes to this Agreement shall not be considered valid or effective unless specified in writing and signed by duly authorized representatives of each Party.

19.2 Each Party represents and warrants that the performance of this Agreement is not in conflict with or does not constitute a violation of any other contractual obligation of the Agreement that may exist or come into existence with any third party.

19.3 During the term of this Agreement, each Party shall be deemed to be independent of the other Party.

Nothing in the performance of this Agreement shall be construed as establishing a partnership, a joint venture, or any other form of association between the Parties.

Neither Party to this Agreement shall have the power to bind or enter into the Agreement in place of the other Party, or to act as if it had such power or authority.

19.4 In the event that one or more of the provisions of this Agreement are deemed invalid by a court having jurisdiction, the remaining provisions shall remain in effect to the extent determined by law, provided, however, that the invalidation of the aforementioned provisions does not prevent the Parties from achieving the expected financial objectives established as of the date the Agreement became effective.

In this case, the Parties undertake to replace the invalid clause with a clause whose effect is as close as possible to the invalid clause, and which will preserve the financial balance of the agreement.

In case of difficulty of interpretation between a heading and the content of one of the clauses, the clause shall prevail.

19.5 The fact that a Party waives or omits (i) to invoke a defect or infringement committed by the other Party in respect of a provision in this Agreement or (ii) to exercise a right, does not constitute a definitive waiver by the aforementioned Party to invoke any other breach or infringement, or to exercise any other right provided for in this Agreement.

19.6 The Parties declare that they may exchange the information necessary for the performance of the services which are the subject matter of the Agreement by e-mail and fax, unless otherwise stated. Emails and faxes will be considered as written proof between them and will be deemed authentic until proven otherwise.

Done in [[city where the contract is done]], in two (2) original copies

On the [[$date]]

For the Client For the subcontractor

[[Name and Surname of the legal representative]] [[Name and Surname]]

[[client profession]] [[subcontractor profession]]

VERY IMPORTANT: EACH PAGE OF EACH APPENDIX

MUST BE INITIALLED.

List of Appendixes

Appendix [[specifications and product descriptions]]: Specifications Document and Product Descriptions
Appendix [[marketing authorization and certification file]]: Copy of the Marketing Authorization for the Products or the certification file
Appendix [[packaging and logistics description]]: Packaging and logistics description
Appendix [[purchase price]]: Purchase price
Appendix [[product storage conditions]]: Product Storage Conditions
Appendix [[safety data exchange agreement]]: Safety Data Exchange Agreement (SDEA) template
Appendix [[minimum order commitment & minimum deliveries]]: Minimum order commitment / Minimum deliveries
Appendix [[technical specifications]]: Technical Specifications.
Appendix [[non-disclosure agreement]]: Non-Disclosure Agreement

MANUFACTURING AND SUPPLY AGREEMENT

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