Sample Business Contracts

Service Agreement - British Columbia Cancer Agency ProPharma Pharmaceutical Clean Room and Celsion Corp.

Sponsored Links

                                SERVICE AGREEMENT

This Agreement,  made and entered into this 20th day of September 2000,  between
the   British   Columbia   Cancer   Agency,   Division   of  Medical   Oncology,
Investigational  Drug Section's ProPharma  Pharmaceutical  Clean Room (hereafter
ProPharma),  and  Celsion  Corp.,  having its  principal  place of  business  at
10220-Suite 1, Old Columbus Road,  Columbia,  MD (hereafter  Celsion)  witnessed

WHEREAS,  each  party  desires  to enter into this  Agreement  for the  benefits
reasonably expected to be gained therefrom;

1.       ProPharma  will provide the service as  described  in the  statement of
         work budget  which is attached to this  agreement  as APPENDIX A, under
         the direction of the Division of Medical Oncology BCCA.

2.       CELSION  agrees to pay  ProPharma for the  performance  of the work set
         forth in APPENDIX A provided that such costs will be in accord with the
         budget  attached in APPENDIX A and  provided  that  CELSION will not be
         obligated  to pay  ProPharma  any  sums in  excess  of $ #  (US$),  not
         including  specified raw material costs and stability  monitoring costs
         nor will  ProPharma  be  obligated to incur costs in excess of the said
         sum without the written consent of both parties.  It is agreed that the
         amount shown in the respective budget categories are estimates and that
         changes  from item to item  will be  acceptable.  CELSION  will make an
         initial payment of $ # ($ # for GMP implementation,  $ # for1/2of batch
         production  costs and $ # for assay  qualification)  upon  receipt of a
         fully  executed  copy of the  agreement  and CELSION  will make a final
         payment of $ # plus additional raw material and other incidental direct
         costs for items such as shipping, requested testing, etc. (e.g. lipids)
         upon ProPharma competing the manufacturing  production.  CELSION agrees
         to make the final  payment  within  thirty days of receipt of the final
         invoice providing that ProPharma has delivered the product manufactured
         according  to GMP and all test records  including,  but not limited to,
         the following:

2.1.   Batch  Production  Records  (BPR)  with all the data,  printouts,  etc.
       specified by the BPR.
2.2.   All test data.
2.3.   Raw material receiving and disposition records.
2.4.   Sterilization records for equipment and supplies, stoppers, seals, vials.
2.5.   Cleaning records for equipment,  materials,  supplies, stoppers, vials,
       seals and clean rooms.
2.6.   Label manufacturing, testing, and release records.

     ProPharma  reserves the right to  discontinue  the work if CELSION fails to
     make payments tendered within the time herein specified.



3.       If the number of final product vials  delivered to CELSION by ProPharma
         falls  below  # % of  theoretical  batch  yield  (taking  into  account
         processing  and dead volume  losses) and the low yield is determined to
         be due to the  performance  of ProPharma  personnel,  the final payment
         will be  adjusted  by  dividing  the number of vials  delivered  by the
         number of vials representing # % theoretical yield and multiplying this
         factor times $ # or $ # for liposomes and alkalinizer, respectively.

4.       CELSION  will provide  materials as described in Appendix B.  ProPharma
         agrees  not to use nor permit  the use of these  materials  for its own
         purposes or for any other party through ProPharma.  ProPharma will take
         all  reasonable  steps  to  ensure  reasonable  confidentiality  of the
         documentation  produced  and proper  handling  and  containment  of the
         materials  supplied  in  accordance  with good  manufacturing  practice
         (GMP).  Any materials or equipment  purchased by CELSION that is in the
         possession of ProPharma will be returned to CELSION upon termination of
         the agreement.

5.       Potential   CELSION   participation  in  Batch   Production   Services.
         Representatives  of  CELSION  may  attend at the  ProPharam  clean room
         facility under the  supervision of a qualified  clean room  technician,
         GMP  facility  manager  or clean  room  director  to observe or perform
         processes involved in batch production activities. any such individuals
         will only be admitted to the clean room facility after having completed
         such training and having  performed  such other  formalities  as may be
         required by ProPharma pursuant to their Standard Operating  Procedures.
         any such individuals shall at all times be subject to the direction and
         control of ProPharma  regarding clean room occupation  operations while
         in attendance at the clean room facility. Any CELSION equipment brought
         into the clean room  facility  must be  pre-approved  by ProPharma  and
         shall at all times remain the property and responsibility of CELSION.

6.       Indemnity  by  CELSION.  CELSION  shall  indemnify  and  save  harmless
         ProPharma  and  the BC  Cancer  Agency  and  its  directors,  officers,
         employees,  agents and invitees  (collectively the "Indemnities")  from
         and against any and all losses, costs, liabilities,  expenses,  claims,
         damages, actions, causes of action and obligations that the Indemnities
         or any of them  may  sustain,  suffer,  incur  or be put to at any time
         either before or after the expiration or termination of this agreement,
         which arise out of, relate to or are caused directly or indirectly by:

a.       the very presence of CELSION raw materials or final batched  product at
         the clean  room  facility  and  related  laboratories  (aside  from the
         services performed hereunder on such product);
b.       the presence and activity of any CELSION  representatives  at the clean
         room facility;
c.       the presence or  operation  of any CELSION  equipment at the clean room
         facility; and
d.       the  transportation,  distribution  or use of any final batched product
         after it has been accepted by and becomes under the control of CELSION.

except that CELSION shall not have any obligations  hereunder arising out of the
negligence, misconduct or reckless acts or omissions of ProPharma or its agents,
employees or contractors.


7.       Limited  Warranties.  CELSION raw  materials  and final  batch  product
         remain at all time the  property  of  CELSION  and  ProPharma  makes no
         representations  or warranties  whatsoever either expressed or implied,
         oral or written, in fact or by operation of law, concerning the CELSION
         raw materials, the final batched product or its fitness for use (either
         before or after the performance of the services).  ProPharma convenants
         to perform the  services  specified  in Schedule A and to report on the
         results of those services  (together with such quality  testing results
         specified in Schedule B).  ProPharma shall have no  responsibility  for
         determining  whether  the  services  contracted  for  will or will  not
         achieve  any  intended  compliance,  result or  purpose  on the part of
         CELSION  except for those  responsibilities  specified  in  Appendix A.
         Under no  circumstances  will  ProPharma be responsible to CELSION with
         respect to any indirect,  economic or consequential loss or damage. The
         performance of the services  hereunder  shall not be interpreted in any
         manner as any approval of any product or protocal design.

8.       Batching  and test  results from work  performed  under this  Agreement
         shall be delivered by ProPharma to CELSION upon completion of the batch
         production.  The  documentation  will  become the  property of CELSION:
         however,  ProPharma  shall  have the right to retain  and use copies of
         said documentation as required for GMP compliance.

9.       This  agreement   constitutes  the  entire  understanding  between  the
         parties.   No  other  terms  and   conditions,   be  they   consistent,
         inconsistent, or additional to those contained herein, shall be binding
         upon  ProPharma,  unless and until such terms and conditions  have been
         specifically accepted in writing by ProPharma.

10.      Arbitration. IN the event of any controversy or claim arising out of or
         relating to any  provision of this  Agreement,  or the breach  thereof,
         CELSION and ProPharma  shall attempt to settle such conflicts  amicably
         between themselves. Any conflict that the parties are unable to resolve
         shall  be  submitted  to   arbitration   pursuant  to  the   Commercial
         Arbitration Act (British Columbia).  Submission to arbitration shall be
         to a single  independent  arbitrator  appointed by agreement of CELSION
         and  ProPharma  within ten days after  written  notice by either one of
         them to the other requesting the appointment of an arbitrator,  failing
         which,  the  arbitrator  may be appointed in the manner  provided under
         section 17 of the Commercial  Arbitration Act (British  Columbia).  The
         arbitrator agreed to or appointed shall have the appropriate  technical
         expertise to consider and make a determination in respect of the issues
         submitted to arbitration.  the arbitration shall take place in the city
         of Vancouver,  British Columbia.  Each party will bear its own costs of
         the  arbitration.  The costs of the arbitrator and related costs of the
         arbitration shall be apportioned  equally between CELSION and ProPharma
         and determined by the arbitrator. The decisions of the arbitrator shall
         be final and binding upon the parties.

11.      Notice  is  sufficiently  given  if  it is  mailed,  postage  paid  and
         registered, addressed:

a.                in the case of ProPharma, to
                  Dr. Lawrence D. Mayer
                  Director, ProPharma Pharmaceutical Clean Room
                  British Columbia Cancer Agency
                  600 West 10th Avenue

                  Vancouver,  BC V5Z 4E6 Tel (604) 877-6000 local 3153 FAX (604)


b.                and, in the case of CELSION, to
                  Dr. Augustine Cheung
                  Celsion Corp.
                  10220-Suite 1
                  Old Columbia Road
                  Columbia, MD  21046-1705
                  Tel:  410-290-5390
                  Fax:  410-290-5394

12.      This Agreement  shall be governed and construed in accordance  with the
         laws of British Columbia.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by those duly authorized officers this day and year first above written.

Dr. Lawrence Mayer                                   Dr. Augustine Cheung
BCCA-ProPharma Pharmaceutical                        Chairman, Celsion Corp.
Clean Room



                                   APPENDIX A

ProPharma Pharmaceutical Clean Room Batch Production Activities/Cost Analysis

         Production of Lyso-Thermosensitive Liposomes and Alkalinizer

1. Assist with preparation of Master  Production and Control Records:  ProPharma
personnel  will  assist  PhotoVision  in the  preparation  of master  production
records  required for GMP  compliance.  These  documents may include (but not be
limited to)  Quantitative  Formula,  Raw  Materials,  Supplies and Final Product
Specifications and Master Batch Records.

2.  Preparation  of batch  records:  Batch  production  records  will be drafted
according  to standard  format  utilized by  ProPharma.  the batch  records will
contain  information on the quantitative  formula;  raw materials,  supplies and
equipment used for  production;  batching  process and in process  tests;  batch
reconciliation.  Batch records will be reviewed by the Quality Assurance Officer
of the BC Cancer Agency Investigational Drug Program.

3. Qualify vial,  stopper and crimp  supplies:  Non-destructive  measurements of
vials,  stoppers and crimp seals to be used for batch production will be made on
10% of all supply lots  delivered to ProPharma and checked for  compliance  with
supplier specifications.

4. Maintain materials and supply inventory:  All materials and supplies used for
the batch production will be handled through the Inventory Control system of the
Investigational  Drug  Program at the BC Cancer  Agency in  compliance  with GMP
regulations   regarding   quarantine,   release,  use,  storage  conditions  and
associated documentation.

5. Maintenance of clean room: ProPharma personnel will ensure that all cleaning,
preparation  and  monitoring  of the  pharmaceutical  clean room is performed in
accordance  with GMP  guidelines  and that the clean room  facility is operating
within design specifications.

6. Preparation for batch production:  ProPharma personnel will perform cleaning,
sterilization  and  depyrogenation  for all  equipment  and supplies used in the
batch production.  These activities will be documented and the documents will be
attached to the batch records.

7. Batch  production:  For GMP  batches of  Lyso-thermosensitive  liposomes  and
Sodium Carbonate  alkalinizer,  ProPharma will provide all conventional batching
equipment and will ensure that the batch is produced under conditions  complaint
with GMP  regulations for the preparation of sterile  parenteral  products.  All
necessary documents will also be maintained for GMP compliance.

8. Visual  inspection and vial pulls:  Vials will be 100% visually  inspected by
ProPharma  personnel in compliance  with GMP regulations and will be verified by
the QA officer of the BC Cancer Agency  Investigational  Drug Program. The vials
required for specification testing stability testing and QA retain will be taken
at this time.

9.   Labeling of vials:  Labels for the vials will be  provided  by PhotoVision.
Labels will be 100% inspected and placed onto vials.

10.  Qualification  of specification  assays:  Assays to be utilized to test the
final products for compliance with  specifications will be adapted and qualified
for  suitability  with the  products to be  manufactured.  Basic  validation  of
specific assays such as lipid concentration and percent  doxorubicin  entrapment
will be performed as necessary. Bacteriostasis and fungistasis validation of USP
sterility tests will be performed at an external contract microbiology lab.

11. QC testing for release specifications: Liposome and alkalinizer batches will
be tested for compliance with specifications such as lipid content, pH, liposome
size,  osmolality,  and  appearance.  In addition,  percent  entrapment  will be
evaluated for the individual  components  constituted with doxorubicin according
to standard  procedures.  Analysis report  summaries will be provided to Celsion
with notation of results in relationship to specifications.

12. Stability  monitoring of GMP batches:  Liposome and alkalinizer batches will
be  tested  for  compliance  with  specifications  during  extended  storage  at
4(degree)C. Timepoints will be according to GMP recommendations for establishing
shelf life, namely 3, 6, 9, 12, 18 and 24 months. Analysis report summaries will
be  provided  to  Celsion   with   notation  of  results  in   relationship   to



         ACTIVITY                                                    COST (US$)

1.  Master Production and Control Records (Incl. QC specs.)            $   #
2.  Batch Record preparation (Master and Production)                   $   #
3.  Raw Material and Packaging Sourcing and spec. development          $   #
4.  Raw Material Qualification                                         $   #
5.  Packaging Qualification                                            $   #
         Sub-Total for GMP Implementation                              $   #


1.  Materials and supplies (not incl. lipids):                          $   #
2.  Preparation for and production of batch (Inc. QA):                  $   #
3.  Vial inspection and pulls (incl. QA):                               $   #
4.  Vial labeling (inc. QA)                                             $   #
         Sub-Total for GMP Production Phase                             $   #


5.  Materials and supplies:                                             $   #
6.  Preparation for and production of batch (Inc. QA):                  $   #
7.  Vial inspection and pulls (inc. QA):                                $   #
8.  Vial labeling (incl. QA)                                            $   #
         Sub-Total for GMP Production Phase                             $   #

                           QC ANALYTICAL ACTIVITIES

1.  Qualification of all QC spec. assays (incl. trapping efficiency):   $   # *
2.  QC testing for release of GMP batches (incl. USP sterility + pyro)  $   #
3.  Stability monitoring of GMP batches (3,6,9,12,18,24 months)         $   #

*Does not include direct costs for sterility and  pyrogenicity  validation (cost
approx. $ * )

#  Confidential  portions  have  been  omitted  and  filed  separately  with the


                                   APPENDIX B

                           ADDITIONAL RESPONSIBILITIES

1.  Addition  activities  such as outside  identity  testing  of raw  materials,
contracted  microbiological  monitoring  and shipping  costs will be billed at a
rate of direct costs +25% processing and handling fee. Lipids  purchased for the
liposome  batch will be billed at direct cost plus 15%  processing  and handling

2. Results from QC analyses either for release or stability  monitoring purposes
will be  reviewed  by the IDP QA  unit.  The  results  will  be  summarized  and
presented in comparison to the product  specifications.  The IDP QC Officer will
indicate whether to the best of our understanding whether the results are within
acceptance criteria of the specifications.  However, Celsion will be responsible
for  establishing  whether the batches  should be rejected or released for their
intended use.

3. The IDP focuses on production and testing of GMP supplies  intended for early
stage Phase I and II) clinical  trials,  as well as  preclinical  and  stability
evaluation.  The IDP will not be responsible for aspects of product,  process or
equipment  validation  that may be required for the use of batches in late stage
clinical trials  (pivotal Phase II and beyond).  The site reference file for the
IDP manufacturing and QC facility and procedures will be forwarded upon approval
of this  agreement  to  provide  details  on the  procedures  in  place  for GMP
compliance at the IDP.