TOLLMANUFACTURING AGREEMENT FOR TESTING AND PACKAGING

Exhibit 10.35

*** TEXT OMITTED AND SUBMITTED SEPARATELY
PURSUANT TO CONFIDENTIAL TREATMENT REQUEST
UNDER 17 C.F.R. SECTIONS 200.80(b)(4) AND 230.406

TOLL MANUFACTURING AGREEMENT FOR TESTING AND PACKAGING

This Agreement is made as of this 4th day of April, 2008 (“Effective Date”), by and between Talecris Biotherapeutics GmbH, a German company with a place of business at Lyoner Strasse 15, D-60528 Frankfurt am Main, Niederrad, Deutschland (“Client”) and Catalent France Limoges SAS (“Catalent” collectively, with Client, the “Parties,” and each individually, a “Party”).

RECITALS

A.                                   Catalent provides packaging and related services to the pharmaceutical industry; and

B.                                     Client is a wholly owned subsidiary of Talecris Biotherapeutics, Inc. and is the marketing authorization holder for the products Gamunex®, Prolastin® and Plasbumin® and holds the Import Authorization according to § 72 AMG (Arzneimittelgesetz = German Drug Law) and holds the Manufacturing Authorization for Release to the Market according to § 13 AMG; and

C.                                     Client desires to engage Catalent to provide certain services to Client in connection with the packaging and testing of Client’s Final Container Product (as defined below) and Catalent desires to provide such services pursuant to the terms and conditions set forth in this Agreement.

THEREFORE, in consideration of the mutual covenants, terms and conditions set forth below, the Parties agree as follows:

ARTICLE I

DEFINITIONS

The following terms have the following meanings in this Agreement:

1.1                                 “Affiliate(s)” means, with respect to Client or any third party, any corporation, firm, partnership or other entity that controls, is controlled by or is under common control with such entity; and with respect to Catalent, any corporation, firm, partnership or other entity controlled by PTS Holdings Corp. For purposes of this definition, “control” shall mean the ownership of at least 50% of the voting share capital of entity or any other comparable equity or ownership interest.

1,2                                 “Applicable Laws” means all laws, ordinances, rules and regulations within the Territory applicable to the Testing and Packaging Services of the Final Container Product or any aspect thereof and the obligations of Catalent or Client, as the context requires under this Agreement, including, without limitation, (A) all applicable federal, state and local laws and regulations of each Tenitory; and (B) the current EU Good Manufacturing Practices for Medicinal Products for Human Use (“eGMPs”) promulgated by the Regulatory Authorities, as amended from time to time, as applicable to the Testing and Packaging Services.

1.3                                 “Certificate of Analysis” means a certificate in form and substance satisfactory to Client, signed by Catalent, and authenticating the pharmaceutical analysis in accordance with the cGMP requirements of each batch of Finished Product delivered to Client. The relevant Certificate shall contain the sentence: “This batch complies with specifications and is manufactured in accordance with EEC-GMP and the requirements laid down in the product license.”

1.4                                 “Certificate of Packaging Compliance” means a certificate in form and substance satisfactory to Client, signed by Catalent, and authenticating the proper packaging of each batch of the Finished Product delivered to Client. The relevant Certificate shall contain the following sentence: “This batch complies

with specifications and is manufactured in accordance with EEC-GMP and the requirements laid down in the product license.”

1.5                                 “Commencement Date” means the date upon which Catalent has fulfilled both (i) regulatory approval of Catalent’s Manufacturing License of Blood and Biological Products and (ii) completion of validations needed to perform Packaging Services and Testing. The Commencement Date signifies the ending of the Transfer Period and the beginning of the Operation Period of this Agreement between Catalent and Client.

1.6                                 “Confidential Information” has the meaning set forth in Section 9.2.

1.7                                 “Contract Year” means the period commencing on January 1st of each year during the Term and ending on December 31st of each year; provided, however, that the “Initial Contract Year” shall begin upon the Commencement Date and end on December 3lst of the same calendar year.

1.8                                 “Delivery Date(s)” means the date(s) set forth in the relevant Purchase Order on which Catalent must supply Client with Finished Product, as determined pursuant to Section 4.3.

1.9                                 “Distributor” means Arvato, Client’s single point distributor located at Gottlieb-Daimler-Str. 1, 33428 Harsewinkel, Germany.

1.10                           “Facility” means Catalent’s facility at Rue de Dion Bouton, Z.I.Nord, BP 1547, 87021 Limoges cedex 9, France, or such other facilities as agreed upon by the Parties.

1.11                           “Final Release” means provision by Qualified Person of a document stating that the Finished Product fulfills the requirement of Article 51 of EC Directive 2001/83/EC.

1.12                           “Final Container Product” means Product which has completed all processing stages including the filling in primary containers (unlabelled vials) but not including the secondary and tertiary packaging which shall be performed by Catalent.

1.13                           “Finished Product” means Product which has undergone all stages of production including secondary and tertiary packaging in its final container but prior to the Client or designated Qualified Person has performed the Final Release.

1.14                           “Operation Period” means the phase of this Agreement when Catalent is capable of providing Testing and Packaging Services of the Final Container Products.

1.15                           “Package(d) Services or Packaging Services” means secondary and tertiary packaging (including diluent and labeling) of the Final Container Products pursuant to the Specifications and in compliance with Applicable Laws, it being specified that Client shall be responsible for primary packaging (i.e., bottle and closure with Product).

1.16                           “Product(s)” means the products of Client which are listed and described in more detail in the Exhibit A.

1.17                           “Product Released to the Market” means Final Container Product as labeled and contained in the Packaging and after the Client or designated Qualified Person has performed the Final Release.

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1.18                           “Purchase Order” means a written document issued by Client to Catalent in accordance with Article 4 hereof, authorizing Catalent’s performance of Testing and Packaging Services and other related services pursuant to the terms of this Agreement.

1.19                           “Qualified Person” means the person referred to in Article 48 of Directive 2001/83/EC.

1.20                           “Quality Agreement” means the quality agreement between the Parties for ongoing operations/manufacturing, to be executed prior to the initiation of Testing and Packaging Services and incorporated herein by reference.

1.21                           “Reasonable Efforts” means the efforts, consistent with the practice of comparable contract manufacturing companies with respect to pharmaceutical products of comparable market potential, that a reasonable person in the position of Catalent would use so as to achieve a given goal as expeditiously as possible.

1.22                           “Regulatory Authority” means any governmental regulatory authority within a Territory involved in regulating any aspect of the development, manufacture, market approval, sale, distribution, packaging or use of the Finished Product.

1.23                           “Specifications” means the specifications for the Testing and Packaging Services set forth in Exhibit B attached to and incorporated in this Agreement, which shall become a part of this Agreement. The Specifications may be amended or modified only upon the written agreement of both Parties. These Specifications are the description in detail of the requirements with which the Finished Product has to conform — as related to Testing and Packaging Services provided by Catalent.

1.24                           “Technical Agreement” means the technical agreement between the Parties for ongoing operations/manufacturing, to be executed prior to the initiation of Testing and Packaging Services and incorporated herein by reference.

1.25                           “Territory” means those countries listed in Exhibit C.

1.26                           “Testing” means the carrying out of the tests relevant for the adherence to the Specifications and defined in the marketing authorizations for the Finished Product.

1.27                           “Transfer Agreement” means the combined technical and quality agreement between the Parties for activities that must occur during the transfer process, to be executed contemporaneously with this Agreement and incorporated herein by reference.

1.28                           “Transfer Period” means the phase of this Agreement devoted to the transfer of the product-related necessary know-how from Client to Catalent. This Transfer Period shall be governed by the terms and conditions of the Transfer Agreement.

ARTICLE 2

SCOPE

Catalent agrees to perform Testing and Packaging Services on Final Container Product at the Facility pursuant to the Transfer Agreement, Quality Agreement and Technical Agreement.

The Parties acknowledge that Catalent shall act as Client’s exclusive EU manufacturer for all of Client’s European Testing and Packaging Services.

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ARTICLE 3

PRICING AND PAYMENT TERMS

3.1                                 Price. The fees to be paid to Catalent for the Testing and Packaging Services of the Final Container Product shall be as set forth in Exhibit D attached to and incorporated herein by reference (“Price”).

Catalent shall issue separate invoices to Client for Milestone Payments, Packaging Services, Testing, monthly fixed costs and extraordinary items as specified. Extraordinary items shall be explicitly ordered by the Client.

The Price shall not include the costs of raw materials and packaging components purchased by Catalent pursuant to Section 5.3, which cost shall be passed through to Client with agreed upon mark-up as defined in Exhibit D.

Any other services performed by Catalent shall be charged on an hourly basis as defined in Exhibit D.

3.2                                 Price Adjustment.

(i)                                     Annual Adjustment

The Price shall be subject to adjustment once per Contract Year (“Price Adjustment”). Any Price Adjustment [***] may be notified to Client by Catalent. Any Price Adjustment [***] shall require good faith negotiations between the Parties. The Parties shall agree to the Price Adjustment by December 1 of the year preceding the Contract Year in issue, and the Price Adjustment shall become effective on January 1 of the Contract Year in issue.

(ii)                                  Adjustment due to Changes

In the event that Client changes vial sizes or lot sizes, the Parties shall negotiate in good faith new pricing to the extent Catalent’s direct costs have changed.

In the event that either changes to the Specifications requested by Client or changes in the applicable regulations result in an increase of more than [***] in the direct processing costs to Catalent, as calculated in accordance with French Generally Accepted Accounting Principles (GAAP) and evidenced by reasonable supporting documentation, the Parties agree to negotiate in good faith new pricing which reflects the change in Catalent’s direct costs. Notwithstanding the foregoing, in the event that changes in the applicable regulations are not specific to Client’s Product but apply to Catalent in its capacity of pharmaceutical manufacturer, the additional costs associated with complying with such regulations changes shall be borne exclusively by Catalent.

3.3                                 Invoice.

(i)                                     Catalent shall invoice Client upon completion of Packaging Services and shipment of Final Product sublots to Distributor including submission of Certificate of Compliance to Client for labeling of Products, barcoding of Products and procurement of secondary packaging material accordant to Exhibit D.

(ii)                                  Catalent shall invoice Client upon completion of Testing and submission of Certificate of Analysis to Client for management of test samples (Final Container Product), shipment of

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samples to laboratory for outsourced tests, management of test samples (Finished Product) for German batches, testing at internal laboratories and testing at external laboratories accordant to Exhibit D.

(iii)                               Catalent shall invoice monthly fixed costs for facility usage, storage and destruction of reference samples accordant to Exhibit D. The invoice shall be issued not later than at the 25th of the respective month.

(iv)                              Catalent shall invoice extraordinary items as management of recalls (including keeping Finished Product on hold at Catalent and destruction of products) in separate invoices on monthly basis accordant to Exhibit D.

3.4                                 Payment Terms. Client shall make full payment in Euro to Catalent, at the address specified on the invoice, no later than forty-five (45) calendar days from the date of each invoice. If Client has not made payment in full by the expiration of such forty-five (45) calendar day period, Catalent may charge a late payment fee on such unpaid and undisputed amount equal to one percent (1%) per month of such unpaid amount. However, in no event will the rate charged to Client be higher than the maximum rate allowable under applicable law. The Parties agree to cooperate to timely resolve all payment disputes.

3.5                                 Milestone Payments.

Client shall make five milestone payments (the “Milestone Payments”) to Catalent to acknowledge certain achievements made prior to the Initial Contract Year on following basis:

Client shall make full payment in Euro to Catalent, at the address specified on the invoice, no later than thirty (30) calendar days from the date of each invoice.

3.6                                 Shipping and Risk of Loss. Client shall be responsible for costs of shipping Final Container Product from a facility designated by Client in the United States to Catalent’s facility via Frankfurt Airport or Client’s warehouse. Client shall be responsible for routing of shipments as well as preparation of all necessary import documentation.

Final Container Product shall be deemed at all times to be the property of Client. Responsibility and risk of loss for the Final Container Product will transfer from Client to Catalent when the Final Container Product is removed from the truck onto the Catalent dock in Limoges, France. The Final Container Product shall be stored, while in Catalent’s custody, in accordance with the Specifications and Applicable Laws.

Shipments of Finished Product will be EXW Catalent’s facility in Limoges, France (Incoterms 2000). Delivery of Finished Product shall be deemed to have occurred when the Finished Product is delivered into the custody of the carrier selected by Client and approved by Client at Catalent’s facility. Client shall handle all shipping logistics to Distributor. Catalent shall number each lot with a vendor lot number such that each product lot is traceable to raw materials and/or components used, as well as product temperature storage history.

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Risk of loss as to all Finished Product shipped by Catalent shall pass to Client upon delivery to the common carrier at Catalent’s facility in Limoges, France. Catalent shall reasonably assist Client in arranging any desired insurance (in amounts that Client shall determine) and transportation. All associated customs, duties, costs, taxes, insurance premiums and other expenses shall be at Client’s expense.

3.7                                 Failure to Take Delivery. If Client fails to take delivery within five (5) business days of any scheduled Delivery Date, Client shall be billed at that time for all unshipped Finished Product, and on the first of each month thereafter for reasonable administration and storage costs. For each such batch of undelivered Finished Product, Client agrees that: (A) Client has made a fixed commitment to purchase such Packaging Services and packaging components, (B) risk of ownership for such Finished Product shall be borne by Client, (C) such Finished Product shall be on a bill and hold basis for legitimate business purposes, and (D) Client shall be responsible for any decrease in market value of such Finished Product that relates to factors and circumstances outside of Catalent’s control. Within five (5) business days following a written request from Catalent, Client shall provide Catalent with a letter confirming items (A) through (D) of this section for each batch of undelivered Finished Product. The Finished Product shall be stored, while in Catalent’s custody, in accordance with the Specifications and Applicable Laws.

ARTICLE 4

FORECAST, PURCHASE AND SUPPLY

4.1                                 Purchase and Supply. During the Term of this Agreement and subject to Section 4.4 of this Article 4, Client shall purchase and Catalent shall supply such quantities of Finished Product as shall be set forth on Purchase Orders issued by Client to Catalent under this Agreement.

Each Contract Year during the term of this Agreement, Catalent shall receive from Client a target range of [***] Final Container Product lots representing approximately [***] to be packaged (as prorated for partial years including the Initial Contract Year). Each lot received by Catalent may be subdivided into one (1) to five (5) sub-lots of Finished Product for release in the Territory. Catalent shall issue a Certificate of Packaging Compliance for each sublot of Finished Product.

The Final Container Product, the material in process at Catalent’s facility and the Finished Product shall be solely owned by Client at all times.

4.2                                 Forecasts. Within sixty (60) business days after the beginning of the Initial Contract Year, and thereafter on the first business day of each month during the Term of this Agreement, Client shall provide Catalent with a written, non-binding, twelve (12) month rolling forecast (commencing with the immediately following month) of the quantity of Finished Product which Client expects to require from Catalent during each of the subsequent twelve (12) months (“Forecast”). The first three (3) months of the Forecast shall be firm and binding upon Client (“Firm Commitment”), and the following nine (9) months shall constitute non-binding good faith estimates. This Forecast shall include (i) the requested Delivery Date for the Firm Commitment, (ii) the quantity of Finished Products to be delivered and (iii) the lot number to be applied to such Finished Product.

4.3                                 Purchase Order. Client shall provide Catalent a firm order (“Firm Order”) for Finished Product at least fifteen (15) business days in advance of the first day of the month in which Client wishes the Packaging Services to be performed. Within ten (10) business days of receipt of a Purchase Order, Catalent shall acknowledge in writing its receipt of a Firm Order and shall ship Finished Products on the

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date specified in the applicable Firm Orders. Such acknowledgement shall, as applicable, also confirm the Delivery Date or specify alternate Delivery Dates. Time is of the essence in the performance of the Testing and Packaging Services by Catalent and Catalent shall meet all Delivery Dates.

4.4                                 Cycle Times. Catalent shall use Reasonable Efforts to perform Testing and Packaging Services in an expeditious manner. Testing of Final Container Product at Catalent shall be initiated no later than 5 business days and completed within 30 business days after receipt of Final Container Product. Packaging Services shall be initiated within 20 business days and completed within 25 business days of receipt of Final Container Product, or as mutually agreed to in the Forecast as set out in Section 4.2. Samples of Final Container Product should be submitted to the Authorities for OMCL batch release upon receipt of the application from Client. Samples of Finished Product shall be submitted to the Authorities for OMCL batch release for Germany upon receipt of application from Client. Shipment of samples for OMCL batch release shall be fully described in the Quality Agreement and Catalent’s Standard Operating Procedures.

4.5                                 Orders Greater than Forecast. Catalent shall use Reasonable Efforts within its existing capacity to supply the quantity of Finished Product ordered as set forth on the relevant Purchase Order, regardless of the quantity forecast by Client, subject to the capacity limitations of Catalent’s packaging equipment and the Facility.

4.6                                 Amendment of Purchase Orders. Catalent shall use Reasonable Efforts to accommodate a request by Client to amend a Purchase Order to increase or decrease the quantity of Finished Product to be delivered, provided that Catalent shall accommodate increases or decreases of quantities up to ten percent (10%) of that stated on the original Purchase Order. In the event such amendment causes an increase in Catalent’s cost to perform the Packaging Services, the Price shall be increased to reflect such increased cost. Catalent shall notify Client in writing of such cost increase promptly after Catalent’s receipt from Client of the amended Purchase Order, and the increase in such Prices shall be effective for the first lot of Finished Product after the implementation date of such amendment.

Client may cancel any or all outstanding Firm Orders no later than 15 business days before the date scheduled for the beginning of the Packaging Services. Any outstanding order may be postponed by Client on ten (10) business days notice, and may be postponed on shorter notice in the event of a Force Majeure Event.

4.7                                 Terms of Agreement Govern. No modification or amendment to this Agreement shall be effected by or result from the receipt, acceptance, signing or acknowledgement of any Party’s Purchase Orders, Catalent quotations, invoices, shipping documents or other business forms containing terms or conditions in addition to or different from the terms and conditions set forth in this Agreement, and the terms of this Agreement shall supersede any provision in any Purchase Order, the Specifications or other document that is in addition to or inconsistent with the terms of this Agreement.

4.8                                 Secondary Source. In the event that Catalent, for any reason, is unable to fulfill Client’s Purchase Orders, Client reserves the right to secure the services of a qualified third party to perform the Testing and Packaging Services that were to be performed by Catalent under this Agreement (the “Secondary Source”). Such purchase from the Secondary Source shall be considered as purchase from Catalent for purposes of any annual volume commitment. Procurement of Testing and Packaging Services by Client from a Secondary Source shall not relieve Catalent of any liability arising from a breach of this Agreement.

4.9                                 Inventory Management Inspections. Client shall have the right during normal business hours, and upon at least ten (10) business days written notice to Catalent, to inspect and audit in a reasonable manner the inventory of Final Container Product, packaging components, and/or Finished Product.

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4.10                           Repackaging Services. In the event that Finished Product requires repackaging through no fault of Catalent but upon Client’s request for reasons including, but not limited to, repackaging Product for another Territory, Client shall assume the costs of depackaging (carton and label) at the rate established for other services as defined in Exhibit D, and the standard costs of repackaging the Final Container Product.

ARTICLE 5

MATERIALS

5.1                                 Supply of Product. Client shall supply to Catalent the Final Container Product in quantities sufficient to meet the requirements set forth in accepted Purchase Orders no later than 3 weeks before the scheduled date for Testing and Packaging Services. In the event that Client provides Product less than two (2) weeks prior to the scheduled processing date, Catalent shall use Reasonable Efforts to qualify the Finished Product to meet the scheduled dates set forth in the applicable Purchase Orders. Catalent shall use the Final Container Product solely and exclusively for Testing and Packaging Services under this Agreement.

5.2                                 Loss of Final Container Product. Catalent shall minimize the loss of Final Container Product subject to normal manufacturing losses of up to [***] of all Final Container Product to be delivered to Catalent calculated on an average annual basis (“Shrinkage Factor”) for the Initial Contract Year. The Shrinkage Factor shall be reduced to [***] at the beginning of the second Contract Year. In the event that losses exceed this percentage, Catalent shall indemnify Client for loss of Final Container Product as defined in Exhibit E, to be updated annually.

5.3                                 Packaging and Labeling Components. Catalent shall be responsible for procuring, inspecting, processing, storing and releasing adequate packaging (including diluent and labeling) components based on Client approved specifications and as necessary to meet the Firm Commitment. Client may, in its sole discretion, decide to provide any such packaging components to Catalent. Catalent may only purchase packaging (including diluent and labeling) materials from a third party vendor which is identified on a vendor list approved by Client. Once a vendor is selected, any changes in vendors shall be approved in writing by Client. Any such arrangements with third party vendors shall be required to be subject to audit and inspection by Client. Catalent will inspect each delivery of components for quality and identify problems promptly following receipt and prior to their use in providing Packaging Services. Client shall have the right to review and approve all test methods used by Catalent to assess the quality of such components.

5.4                                 Reimbursement for Materials. In the event of (A) a Specification change requested by Client for any reason, (B) termination or expiration of this Agreement, or (C) obsolescence of any packaging component, Client shall bear the cost of any unused packaging components, provided that Catalent purchased such packaging components in quantities consistent with Client’s most recent Finn Commitment plus three (3) months of inventory (as defined in Section 5.5).

5.5                                 Inventory. Catalent shall maintain a dedicated inventory of packaging components sufficient to meet at least three (3) months of Client’s forecasted requirements at no additional charge to Client. Should Client change the Specifications (as defined herein) and/or any associated packaging component, and should Catalent have any related items in stock that were intended to, but cannot as a result of such change, be used for production of the Finished Product and which have no other use by Client, or for the benefit of Catalent or another client, then Client shall reimburse Catalent for its costs associated with the acquisition and disposition of such items.

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5.6                                 Dedicated Equipment. The Parties agree and acknowledge that Catalent may purchase certain equipment and tooling necessary for the processing and testing of Client’s Final Container Product hereunder (the “Dedicated Equipment”). During the Term of this Agreement, the Dedicated Equipment shall be used solely and exclusively for Testing and Packaging Services under this Agreement unless Catalent has obtained Talecris’ prior written approval.

Notwithstanding the foregoing, should Catalent desire to use Dedicated Equipment in order to provide services to clients other than Client, then Catalent shall submit a request to Client and the Parties shall negotiate in good faith as to the terms of such use so as to minimize impact to the Testing and Packaging Services under this Agreement. The terms may include some form of compensation to Client.

ARTICLE 6

REGULATORY

6.1                                 Regulatory Authority Inspection. Catalent hereby agrees to advise Client promptly of any proposed or unannounced inspection of the Final Container Product(s), Finished Products or Testing and Packaging Services by any Regulatory Authority as further described in the Quality Agreement.

6.2                                 Client Technical Representative. During the Term of this Agreement, Client and/or Client’s Affiliate shall have the right to have one or more technical representatives present in the area of the Facility where the Testing and Packaging Services are being conducted during performance of the Testing and Packaging Services to (i) review the testing and packaging process; (ii) review any relevant records in connection with such testing and packaging process and assess its compliance with cGMPs, the Specifications and Applicable Law; and (iii) discuss any related issues with Catalent’s management personnel. Client’s technical representatives, when on-site (including during any inspection conducted pursuant to Section 6.1), shall comply with Catalent’s rules and regulations. Client shall indemnify and hold Catalent and its Affiliates harmless from all liability resulting from the presence of Client’s technical representatives at the Facility.

6.3                                 Audit. Client and/or Client’s Affiliate shall have the right during normal business hours and upon at least ten (10) business days written notice to Catalent, to inspect and audit in a reasonable manner those portions of the Facility in which Testing and Packaging Services are conducted in order to ensure Catalent’s compliance with its obligations under this Agreement as outlined in the Transfer, Technical and Quality Agreements.

6.4                                 Product Information. Client, at its expense, shall furnish Catalent with all available health, safety and environmental information concerning the Final Container Product to be tested and packaged by Catalent hereunder, including without limitation, material safety data sheets.

6.6                                 Regulatory Compliance. Client shall be responsible for securing all licenses or permits required by law or by any Regulatory Authority and comply with all ordinances, laws orders, rules, and regulations pertaining to the Finished Product. Without limiting the foregoing, Catalent, at its sole cost, shall be solely responsible for securing all licenses or permits required by law or by any Regulatory Authority and comply with all ordinances, laws orders, rules, and regulations which pertain to the use of the Facility and performance of the Testing and Packaging Services under this Agreement (provided such regulations apply to Catalent in its capacity of pharmaceutical product manufacturer and do not pertain to any specific Product).

Catalent shall be responsible to maintain (a) all permits and licenses required by any Regulatory Authority with respect to the Facility, (b) all records necessary to comply with Applicable Laws and

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regulations applicable to the packaging of the Final Container Product, as well as (c) a quality control program consistent with cGMPs and applicable regulations.

Without prior written consent of Client, Catalent shall not make any changes to the testing and packaging facilities, equipment, processes, testing procedures, validation procedures, suppliers of packaging components or documentation systems used to perform the Testing and Packaging Services if such change would affect any regulatory submission, license, permit, certification or approval required for the Product or the performance of the Testing and Packaging Services.

Catalent and Client shall enter into the Quality Agreement containing the policies, procedures and standard by which the Parties shall coordinate and implement the operational and quality assurance activities as well as regulatory and compliance objectives contemplated in this Agreement.

During the Term of this Agreement, Catalent shall assist Client with all regulatory matters relating to the Finished Product under this Agreement, at Client’s request and at Client’s expense. In particular, Catalent shall use Reasonable Efforts to assist Client in obtaining and maintaining all approvals and authorizations of any govermnental agencies necessary for the Final Release to the market, the use or distribution of the Finished Product. Each Patty intends and commits to cooperate to satisfy all Applicable Laws relating to Testing and Packaging Services under this Agreement.

6.7                                 Recalls and Adverse Events

Catalent shall inform Client promptly of any information relating to the activity, side effects, toxicity and/or safety of the Finished Product that becomes known to Catalent during the Term of this Agreement. Furthermore, Catalent shall inform Client promptly of any defects in the packaging processes for any Product that become known to Catalent during the Term of this Agreement.

Client shall have the right to control any recall, and the Parties will cooperate in implementing such recall. In the event that any governmental agency issues a recall or takes a similar action in connection with the Finished Product, or in the event that either Party determines that an event, incident or circumstance has occurred which may result in the need for a recall or market withdrawal, the Party with such information shall, within twenty-four (24) hours, advise the other Patty of the circumstances. Catalent shall have adequate systems to quarantine product upon receipt and in the event of a recall, as further described in the Quality Agreement.

ARTICLE 7

TESTING; SAMPLES

7.1                                 Sampling and Testing of Final Container Product. Pursuant to the Technical Agreement, Catalent shall be responsible for all quality control and testing of the Final Container Product, Finished Products and providing test samples to an Official Medicines Control Laboratory (OMCL) in order to assure that the Finished Product is in conformity in all material respects with the Specifications and Applicable Laws, including without limitation cGMP standards and EU Directives, and any other procedures and documents subsequently issued and agreed to by the Parties. Catalent shall issue a Certificate of Analysis for each batch of Finished Product.

Client, upon receipt of Finished Product from Catalent, shall have fifteen (15) business days to inspect such Finished Product. Any Finished Product that is not rejected by Client within fifteen (15) business days of receipt from Catalent shall be deemed to have been accepted by Client. Notwithstanding the foregoing, in the event of latent defects, Client shall notify Catalent of such defects within five (5) business days of discovery thereof. In the event Client believes that the Finished Product does not conform in all material respects to the Specifications, Client shall send to Catalent, via overnight delivery

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service or certified mail, return receipt requested, within three (3) business days of discovery of the defect, a notice of rejection along with samples of the rejected Finished Product. Finished Product that Catalent agrees are defective or non-conforming shall be handled by Catalent in accordance with Section 7.2.  If Catalent does not agree with Client’s determination that the Finished Product fail to meet the Specifications, the rejected Finished Product shall be handled pursuant to procedures described in the Quality Agreement.

Catalent shall keep an adequate quantity of reserve samples for the time required by Applicable Laws.

7.2                                 Nonconforming Finished Product. In the event that Catalent provides Finished Product that does not conform to the Specifications, or that has not been packaged, stored or tested in accordance with the Specifications (“Nonconforming Finished Product”), Client shall notify Catalent in writing of Client’s election to either (i) reprocess Nonconforming Finished Product, at Catalent’s sole expense, so that it meets all required Specifications using Reasonable Efforts or (ii) require Catalent to refund to Client the cost of goods contained in the Nonconforming Finished Product as defined in Exhibit E, to be updated annually. Such election shall be in addition to any other rights and remedies available to Client in law or in equity.