SUPPLY AGREEMENT
BETWEEN
APOLLON, INC.
AND
AMERICAN CYANAMID COMPANY
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July 19, 1995
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS.................................................... 2
ARTICLE II - SUPPLY........................................................ 6
2.1 SUPPLY........................................................... 6
2.2 PRODUCT IMPROVEMENTS AND CHANGES................................. 6
2.3 FORECASTS........................................................ 7
2.4 FIRM ORDERS; INVENTORY LEVELS.................................... 7
2.5 TERMS............................................................ 8
2.6 MANUFACTURING EFFORTS............................................ 8
2.7 SPECIFICATIONS................................................... 10
2.8 INSPECTION....................................................... 10
ARTICLE III - MARKETING.................................................... 11
3.1 PROMOTIONAL EFFORTS.............................................. 11
3.2 MARKETING AND PROMOTIONAL MATERIALS.............................. 12
3.3 MARKETING AGREEMENTS............................................. 12
ARTICLE IV - REGULATORY.................................................... 13
4.1 OWNERSHIP........................................................ 13
4.2 ASSIGNMENT OF CERTAIN REGISTRATIONS PERMITS AND
GOVERNMENT APPROVALS........................................... 13
4.3 REGULATORY ACTION OR OTHER MITIGATION OF GOVERNMENT
APPROVAL....................................................... 13
4.4 ALTERNATE SOURCE FOR MANUFACTURE................................. 14
4.5 MANUFACTURING RECORDS............................................ 14
4.6 MANUFACTURING AUDIT.............................................. 15
4.7 TECHNICAL SUPPORT................................................ 15
ARTICLE V - FAILURE TO SUPPLY.............................................. 15
5.1 GRANT OF CONTINGENT MANUFACTURING RIGHTS......................... 15
5.2 EXERCISE OF CONTINGENT MANUFACTURING RIGHTS...................... 16
5.3 ASSISTANCE PROVIDED BY APOLLON................................... 17
5.4 LENGTH OF ALTERNATE MANUFACTURE.................................. 18
ARTICLE VI - PAYMENTS...................................................... 19
6.1 TRANSFER PRICE................................................... 19
6.2 ACY RESALE PRICES................................................ 21
6.3 ADVANCE PAYMENTS FOR PURCHASES OF PRODUCTS....................... 21
6.4 PAYMENTS; CURRENCY............................................... 22
6.5 PAYMENTS TO ACY.................................................. 23
6.6 TRANSFER PRICE IF PRODUCT MANUFACTURED BY ACY.................... 24
6.7 TIME PERIOD FOR PAYMENTS......................................... 25
6.8 LIABILITY RESERVE................................................ 26
ARTICLE VII - RECORD KEEPING AND AUDITS.................................... 26
7.1 RECORDS RETENTION................................................ 26
7.2 AUDIT RIGHTS..................................................... 27
7.3 TAXES............................................................ 27
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
ARTICLE VIII - TRADEMARKS, TRADENAMES, TRADEDRESS.......................... 28
8.1 RETENTION OF RIGHTS.............................................. 28
8.2 TRADE DRESS...................................................... 29
ARTICLE IX - INFRINGEMENTS................................................. 30
9.1 INFRINGEMENTS.................................................... 30
ARTICLE X - WARRANTIES..................................................... 34
10.1 AUTHORITY TO ENTER INTO AGREEMENT: OTHER RIGHTS
AFFECTING SALE OF PRODUCTS..................................... 34
10.2 AGREEMENT NOT TO BREACH OTHER AGREEMENTS........................ 35
10.3 COMPLIANCE WITH LAWS; PRODUCT WARRANTIES........................ 35
10.4 INDEMNIFICATION BY APOLLON...................................... 36
10.5 INDEMNIFICATION BY ACY.......................................... 36
10.6 ADDITIONAL INDEMNIFICATION BY PARTIES........................... 37
10.7 LIABILITY INSURANCE FOR APOLLON................................. 38
10.8 DEFENSE OF INDEMNIFICATION CLAIMS............................... 39
10.9 COMPLIANCE WITH EXPORT LAWS AND REGULATIONS..................... 39
10.10SURVIVAL OF PROVISIONS.......................................... 40
ARTICLE XI - THIRD-PARTY LICENSES.......................................... 40
11.1 NEED FOR ADDITIONAL LICENSES PRIOR TO FIRST
COMMERCIAL SALE................................................ 40
11.2 NEED FOR ADDITIONAL LICENSES AFTER FIRST
COMMERCIAL SALE................................................ 41
11.3 DISAGREEMENT OVER NEED FOR ADDITIONAL LICENSES.................. 41
11.4 EFFORTS TO OBTAIN LICENSE....................................... 41
ARTICLE XII - CHANGE IN CONTROL/INSOLVENCY................................. 42
12.1 RIGHTS OF ACY.................................................. 42
12.2 ADVANCE NOTICE OF INSOLVENCY EVENT............................. 42
12.3 APOLLON'S CONTINUED MANUFACTURE AND SUPPLY...................... 42
ARTICLE XIII - DURATION AND TERMINATION.................................... 43
13.1 TERM........................................................... 43
13.2 TERMINATION BY MUTUAL AGREEMENT................................ 44
13.3.UNILATERAL TERMINATION WITHOUT CAUSE............................ 44
13.4.TERMINATION FOR BREACH.......................................... 46
13.5.TERMINATION FOR CHANGE IN CONTROL............................... 47
13.6.TERMINATION DUE TO INSOLVENCY................................... 49
13.7.EFFECT OF TERMINATION ON RESEARCH AND DEVELOPMENT
AGREEMENT...................................................... 50
13.8 FAILURE TO EXERCISE RIGHTS..................................... 50
13.9 RIGHT TO SELL REMAINING INVENTORY.............................. 50
13.10 TRANSFER OF GOVERNMENT APPROVALS............................... 51
ARTICLE XIV - CONFIDENTIALITY.............................................. 51
14.1 CONFIDENTIALITY; EXCEPTIONS.................................... 51
14.2 AUTHORIZED DISCLOSURE........................................... 52
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
14.3 CONFIDENTIAL OR PROPRIETARY INFORMATION OF THIRD
PARTIES........................................................ 53
14.4 SURVIVAL........................................................ 53
ARTICLE XV - MISCELLANEOUS................................................. 54
15.1 NOTICES......................................................... 54
15.2 RELATIONSHIP OF PARTIES......................................... 55
15.3 FORCE MAJEURE................................................... 55
15.3 NO IMPLIED LICENSES............................................. 56
15.4 AMENDMENTS OR MODIFICATIONS..................................... 56
15.5 NO WAIVER....................................................... 56
15.6 LIMITATION OF LIABILITY......................................... 57
15.7 SEVERABILITY.................................................... 57
15.8 GOVERNING LAW; JURISDICTION.................................... 57
15.9 SEPARATE AGREEMENTS WITH ACY AFFILIATES......................... 58
15.10 ASSIGNMENT..................................................... 58
15.11 ENTIRE AGREEMENT............................................... 59
15.12 PUBLICITY...................................................... 59
15.13 COUNTERPARTS.................................................. 60
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
SUPPLY AGREEMENT
THIS AGREEMENT is made this 19th day of July, 1995 by and between
APOLLON, INC., a corporation organized and existing under the laws of the
Commonwealth of Pennsylvania, having its principal place of business at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ("APOLLON"), and AMERICAN CYANAMID
COMPANY, a corporation organized and existing under the laws of the State of
Maine, having its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ("ACY").
Whereas, APOLLON and ACY have entered into that certain Research and
Development and License Agreement, dated as of the date hereof, wherein the
parties have agreed to collaborate in the research and development of
polynucleotide-based genetic vaccination products for use in prophylaxis and/or
treatment of certain disease states (the "RESEARCH AND DEVELOPMENT AGREEMENT");
Whereas, in conjunction with said collaboration, APOLLON is willing
to manufacture certain quantities of such product(s) and supply the same to ACY;
and
Whereas, ACY is desirous of having APOLLON manufacture said
quantities of such product(s) and of purchasing such quantities from APOLLON.
Now Therefore, the parties hereto, intending to be legally bound,
hereby agree as follows:
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
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ARTICLE I
DEFINITIONS
Terms defined in this Article I shall for all purposes of this
AGREEMENT, as the same may be amended from time to time, have the meanings
herein specified.
1.1 The term "AFFILIATE" shall mean any corporation or other
business entity which directly or indirectly through stock ownership or through
another arrangement either controls, or is controlled by, or is under common
control with a party, with the proviso that Wyeth-Eisai Co., Ltd., Genetics
Institute, Inc., and Immunex Corporation shall not be considered AFFILIATES
hereunder, until such time as ACY shall notify APOLLON that one or more of said
companies shall be considered an AFFILIATE hereunder.
1.2 The term "EFFECTIVE DATE" shall mean the date first written
above.
1.3 The term "FAIR MARKET VALUE" shall mean the cash consideration
which the selling party would realize from an unaffiliated, unrelated buyer in
an arm's length sale of an identical item sold in the same quantity and at the
same time and place of the transaction.
1.4 The-term "FDA" shall mean the Federal Food and Drug
Administration of the United States Department of Health and Human Services, or
any successor agency thereto.
1.5 The term "GMP" shall mean the then current good manufacturing
practice regulations of the FDA as described in
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
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Title 21 of the United States Code of Federal Regulations or any successor
regulations.
1.6 The term "GOVERNMENT APPROVALS" shall mean any approvals,
licenses, registrations or authorizations, howsoever called, of any federal,
state or local regulatory agency, department, bureau or other government entity,
anywhere in the world, including, without limitation, the FDA, necessary for the
manufacture, use, storage, transport or sale of a PRODUCT, both interterritory
and intraterritory, anywhere in the TERRITORY, and including, without
limitation, PLAs or ELAs (as defined below). "GOVERNMENTAL APPROVAL" and
"GOVERNMENT APPROVED" shall each have a corollary adjectival meaning.
1.7 The term "NET SALES" shall mean the amount billed or invoiced
and paid on account of worldwide sales of PRODUCT to an independent third party
by ACY or its AFFILIATES or sublicensees (or APOLLON, if APOLLON sells
PRODUCT(S) under Paragraph 6.5 hereof), in bona fide arms' length transactions,
less the following deductions: (i) trade and/or quantity discounts
actually-taken by the customer in such amounts as are customary in the trade;
(ii) any tax, excise, or other governmental charges upon or measured by the
production, sale, transportation, delivery or use of said PRODUCT which are paid
by the selling party; (iii) transportation charges which are paid by the selling
party; (iv) customary and reasonable sales commissions actually paid by the
selling party to non-affiliated third parties in connection with the sale of
such
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
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PRODUCT; (v) amounts repaid or credited by reason of rejections or returns or
due to customary retroactive price reductions; and (vi) taxes paid by the
selling party to the United States Government or an instrumentality thereof
under 42 U.S.C. 300 aa-1 et seq. or other similar legislation, or to a State of
the United States insuring against liability arising out of the manufacture,
use, offer for sale, or sale of such PRODUCT. If a PRODUCT is sold in a non-cash
transaction, the NET SALES for such transaction shall be equal to the FAIR
MARKET VALUE attributable to such sale. In the event that a PRODUCT is sold in
the form of a combination product containing one or more products or immunogenic
components which are themselves not PRODUCTS, or is sold as part of a package
which includes one or more products which are themselves not PRODUCTS, the NET
SALES shall be calculated by multiplying the sales price of such combination
product or of such package, as applicable, by the fraction A/(A+B) where A is
the invoice price or FAIR MARKET VALUE, whichever is greater, of the PRODUCT and
B is the total-invoice price or FAIR MARKET VALUE, whichever is greater, of the
other products.
1.8 The term "PLA" or "ELA" shall mean a Product License Application
or Establishment License Application, including all necessary pre-approvals, or
foreign equivalents thereof, requesting approval for the commercial sale of a
PRODUCT.
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
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1.9 The term "PRODUCT" shall mean a GOVERNMENT APPROVED therapeutic
and/or prophylactic polynucleotide-based genetic vaccine as developed pursuant
to the Research and Development Agreement.
1.10 The term "PRODUCT IMPROVEMENT" shall mean (i) the use without
substantial modification of a PRODUCT to perform a function not initially
prescribed for it or (ii) any material improvement, redesign, or modification of
any PRODUCT.
1.11 The term "PRODUCT INFORMATION" shall mean all information and
data relating to a PRODUCT, including formulae, methods of manufacture,
biological materials, product descriptions, test methods, validation of test
methods, SPECIFICATIONS, and all other supporting documentation, data and
reports relating thereto, developed or acquired by APOLLON in the manufacture
and supply of PRODUCT hereunder.
1.12 The term "SPECIFICATIONS" shall mean any and all specifications
for a PRODUCT agreed to by the parties in writing, including without limitation,
data relevant to the imprinting and packaging thereof, as well as all physical
and chemical properties, product validation and process validation standards,
quality analysis and assurance, test methodologies, packaging, handling,
shipping and other standards, and instructions and procedures for use and
storage of such PRODUCT and raw materials and packaging.
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
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1.13 The term "TERRITORY" shall mean all territories, possessions,
and countries of the world.
1.14 The term "TRADEMARKS" shall mean any and all marks which are
owned by ACY or its AFFILIATES, or which ACY or its AFFILIATES are otherwise
authorized to use, and which are used to advertise, promote, market, sell or
identify PRODUCTS in the TERRITORY, whether or not registered.
ARTICLE II
SUPPLY
2.1 SUPPLY. Subject to the terms and conditions hereof, APOLLON
shall manufacture for and supply to ACY and its AFFILIATES, on an exclusive
basis throughout the TERRITORY, such quantities of PRODUCTS as requested by ACY
and/or its AFFILIATES, and ACY and its AFFILIATES shall purchase from APOLLON
all of their requirements of PRODUCTS for use and sale throughout the TERRITORY.
2.2 PRODUCT IMPROVEMENTS AND CHANGES. APOLLON shall keep ACY fully
informed of any proposed PRODUCT IMPROVEMENTS which APOLLON proposes to make to
any PRODUCT. The parties may agree from time to time to adopt such PRODUCT
IMPROVEMENTS or incorporate such other proposed changes as agreed into PRODUCTS,
to be governed by the terms and conditions of this AGREEMENT. Additionally,
APOLLON agrees to consider any PRODUCT IMPROVEMENTS suggested by ACY hereunder.
SPECIFICATIONS shall be amended in
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
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accordance with any such foregoing adoption, as well as the applicable
GOVERNMENTAL APPROVAL, if any.
2.3 FORECASTS. Within six (6) months of the filing of the first PLA
and/or ELA for a PRODUCT, and on the first day of each calendar quarter
thereafter, ACY shall supply APOLLON, for planning purposes, a non-binding
five-quarter good faith rolling forecast of projected requirements in units for
such PRODUCT. Forecasts may be expressed in a reasonable range.
2.4 FIRM ORDERS; INVENTORY LEVELS. (a) ACY and its AFFILIATES shall
provide binding orders of their requirements of PRODUCT to APOLLO within a
reasonable amount of time, but in any event not less than ninety (90) days prior
to the requested date of shipment. To the extent practicable, ACY shall
consolidate the orders of ACY and its AFFILIATES. The only terms of any purchase
order or acknowledgment for PRODUCT which shall be binding on APOLLON or ACY are
those which are set forth on the face of such purchase order or acknowledgment
and which deal with description, quantity, and delivery terms for such quantity
of PRODUCT. In the event of any conflict between this AGREEMENT and any such
purchase order or acknowledgment, this AGREEMENT shall govern.
(b) Subject to APOLLON's supply of PRODUCT in conformance with
ACY's orders, ACY shall order such quantities as to maintain at all times a
commercially reasonable inventory of each PRODUCT. APOLLON shall also maintain
at all times a commercially reasonable inventory of each PRODUCT suitable to be
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
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supplied hereunder, which the parties agree shall be equal to 400% of the
average monthly quantity of PRODUCT purchased by ACY during the prior 12-month
period. An appropriate inventory for the initial twelve-month period following
the first commercial sale of a PRODUCT will be determined by the parties within
six months following the submission of the first PLA for such PRODUCT.
(c) ACY's forecasts and orders shall separately identify
PRODUCTS to be used as free samples, the transfer price for which shall be
determined in accordance with Paragraph 6.1(c) hereof.
2.5 TERMS. In accordance with Paragraph 2.4, ACY and its AFFILIATES
shall place orders for PRODUCT with APOLLON from time to time, specifying the
quantities of PRODUCT desired, and the place(s) to which, and the manner and
dates by which, shipment is to be made; said shipping dates to be no less than
ninety (90) days from the purchase order date. The quantity of PRODUCTS to be
delivered pursuant to any purchase order shall be subject to a variation of 10%,
and within this limitation, ACY and its AFFILIATES shall accept and pay for the
quantity of PRODUCTS actually delivered. Upon acceptance of and full payment for
PRODUCTS by ACY in accordance with the relevant provisions hereof, title to such
PRODUCTS shall pass to ACY; provided that risk of loss shall pass to ACY on
delivery F.O.B. Malvern, PA.
2.6 MANUFACTURING EFFORTS. (a) APOLLON shall manufacture PRODUCT in
conformance with the SPECIFICATIONS and
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
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supply ACY with such quantities of PRODUCT as are ordered in accordance with the
terms of this AGREEMENT. Notwithstanding anything contained in this AGREEMENT to
the contrary, however, APOLLON shall not be obligated to supply ACY and its
AFFILIATES during any calendar quarter with any quantity of a particular PRODUCT
in excess of the average quarterly quantity of such PRODUCT purchased by ACY
during the prior 12-month period. For the first year of supply under this
AGREEMENT, such quantity shall be established by the parties within six months
following the submission of the first PLA for such PRODUCT.
(b) In fulfilling its obligations under this AGREEMENT,
APOLLON may subcontract out a portion of such manufacturing duties to a
subcontractor reasonably acceptable to ACY; provided that APOLLON shall have
first offered ACY in writing the option, which shall remain open for a period of
ninety (90) days from the date of such written offer, to have ACY provide such
manufacturing on terms and conditions which are no less favorable to ACY than
those last offered to such subcontractor. If ACY does not elect to perform such
manufacturing, the selected subcontractor shall, as a condition to ACY's
approval of such subcontractor, agree to be bound by the relevant terms and
conditions of this AGREEMENT. Notwithstanding the foregoing, APOLLON shall
guarantee the performance and monitoring of such subcontractor in accordance
therewith. To the extent APOLLON obtains rights to indemnification from any
subcontractor with respect to losses incurred by APOLLON arising
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
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out of any work performed by such subcontractor, APOLLON shall use reasonable
efforts to have ACY named as a third-party beneficiary of such indemnification
rights.
2.7 SPECIFICATIONS. All SPECIFICATIONS and any changes thereto
agreed to by the parties, and as approved by the appropriate government or
regulatory agency, if applicable, shall be set forth in writing. APOLLON shall
have a period of (90) ninety days from receipt of such written and, if
applicable, regulatory approved changes to SPECIFICATIONS in which to conform
its manufacture and supply of PRODUCTS hereunder to any such revised
SPECIFICATIONS, which shall then vest as the current version of SPECIFICATIONS.
2.8 INSPECTION. ACY and its AFFILIATES shall inspect all shipments
of PRODUCTS to determine whether or not the PRODUCTS are in conformity with the
relevant SPECIFICATIONS, or are otherwise adulterated, misbranded, or defective.
In the event that any portion of a shipment of PRODUCTS received by ACY fails to
conform to such SPECIFICATIONS or is otherwise adulterated, misbranded, or
defective, ACY may reject such non-conforming PRODUCT shipment by giving written
notice to APOLLON within sixty (60) days of ACY's (or its distributor's or other
agent's) receipt of the PRODUCTS, which notice shall specify the manner in which
the PRODUCTS fail to meet the SPECIFICATIONS or are otherwise adulterated,
misbranded, or defective. Failing such notification, ACY will be deemed to have
accepted the PRODUCTS,' and APOLLON shall not thereafter be
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
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required to indemnify ACY for breach of its warranties under Paragraph 10.4 as
to such PRODUCTS, except for defects arising out of the negligence of APOLLON
and not reasonably discoverable by ACY in such inspection. Within fifteen (15)
days from receipt by APOLLON of such notice that ACY has determined that the
PRODUCTS are in nonconformance, APOLLON shall notify ACY in writing as to
whether or not it concurs with ACY's determination. If APOLLON concurs with such
determination, APOLLON shall replace such nonconforming PRODUCT-with PRODUCT
that meets SPECIFICATIONS and is otherwise not adulterated, misbranded, or
defective. In the event APOLLON does not agree with ACY and the parties cannot
reach agreement with respect to a replacement shipment of such PRODUCT, the
parties will submit the question of whether the PRODUCT failed to meet the
SPECIFICATIONS or is otherwise adulterated, misbranded, or defective to an
independent laboratory skilled in biotechnological processes and manufacturing,
as mutually selected by the parties, for objective determination. The findings
of such laboratory shall be binding upon APOLLON and ACY and the cost of such
determination shall be paid by the party in error.
ARTICLE III
MARKETING
3.1 PROMOTIONAL EFFORTS. ACY shall use reasonable efforts,
consistent with its accepted business practices and legal requirements as they
relate to its global biologicals
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
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business, to promote the sale of PRODUCT in the TERRITORY. ACY's level of effort
in promoting the commercial sale of a PRODUCT shall not be less than the level
of effort which ACY uses for its own products which are at a similar stage of
introduction to the market as the PRODUCT promoted. Such promotional activities
shall be carried out through ACY's or its AFFILIATE's or distributors' sales
forces, who shall receive training and support and have skills and resources
commensurate with those of ACY's and its AFFILIATE's sales forces for other
products which are of a similar nature to the PRODUCT in question.
Notwithstanding the foregoing, ACY does not, however, guarantee that its
implementation of any of its marketing plans for a given country will be
successful in whole or in part.
3.2 MARKETING AND PROMOTIONAL MATERIALS. ACY shall have
responsibility for the preparation of all marketing and promotional materials
with respect to any PRODUCT. Except as required by law, neither party shall
distribute or have distributed any written information regarding a PRODUCT which
bears the name of the other without the prior written approval of the other,
which approval shall not be unreasonably withheld.
3.3 MARKETING AGREEMENTS. In effecting the commercial sale of
PRODUCTS, ACY, in its sole discretion, may enter into co-promotion,
co-detailing, marketing, distribution, or similar agreements with third parties.
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
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ARTICLE IV
REGULATORY
4.1 OWNERSHIP. All GOVERNMENTAL APPROVALS and any regulatory files
relating thereto will be owned by a party in accordance with applicable laws and
regulations. Notwithstanding ownership of any such GOVERNMENTAL APPROVAL in
accordance with applicable laws, the parties shall jointly own an undivided
one-half interest in all the underlying data, materials, and other information
relevant to such GOVERNMENTAL APPROVAL. Each party shall have such rights to
provide comments and to obtain copies of and to otherwise access all such
regulatory filings, data, materials and other information as shall be set forth
in Article IV of the RESEARCH AND DEVELOPMENT AGREEMENT.
4.2 ASSIGNMENT OF CERTAIN REGISTRATIONS PERMITS AND GOVERNMENT
APPROVALS. To the extent required under the laws or regulations of a particular
country to enable ACY to exercise its rights and carry out its obligations under
this AGREEMENT with respect to a particular PRODUCT, and to the extent permitted
by law, APOLLON shall transfer and assign to ACY the registrations, permits and
GOVERNMENT APPROVALS necessary for the distribution, promotion and selling of
such PRODUCT in such country.
4.3 REGULATORY ACTION OR OTHER MITIGATION OF GOVERNMENT APPROVAL. In
the event that a GOVERNMENT APPROVAL with respect to a PRODUCT is mitigated in
any way or withdrawn in any country within the TERRITORY, or in any other manner
ACY is prevented from selling or using any PRODUCT solely as a result of
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
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any regulatory action by a governmental agency or authority of competent
jurisdiction in the TERRITORY, and such regulatory action has a substantial
adverse impact on ACY's sales of such PRODUCT in the TERRITORY, APOLLON shall
use reasonable efforts to assist ACY in all respects in the abatement of such
mitigation or withdrawal. If such mitigation or withdrawal occurs in the United
States, for the period ACY is prevented from selling or using such PRODUCT,
ACY's obligation to make any advance payments with respect to such PRODUCT
pursuant to Paragraph 6.3 shall be suspended, as shall APOLLON's obligation to
supply such PRODUCT and to maintain any inventory of such PRODUCT pursuant to
Paragraphs 2.6 and 2.4(b), respectively.
4.4 ALTERNATE SOURCE FOR MANUFACTURE. To the extent commercially
reasonable as determined by the parties, APOLLON shall maintain an alternate
site for manufacture of the PRODUCTS meeting all necessary governmental and
regulatory requirements, such alternate site to be reasonably acceptable to ACY.
Any quantities of PRODUCT manufactured at such approved alternate site shall be
deemed to have been manufactured by APOLLON and shall not be deemed to have
involved the subcontracting of any manufacturing, and as such shall be deemed
bound to the terms and conditions hereof mutatis mutandis.
4.5 MANUFACTURING RECORDS. APOLLON agrees to keep, for a period of
five (5) years, or such longer period as may be required by law or agreed upon
by the parties in writing, exact, true and complete records of all operations
involved in the
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SECURITIES AND EXCHANGE COMMISSION.
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manufacture and supply of PRODUCT, which records shall at all reasonable times,
and upon reasonable prior written notice, be available for examination, audit,
and copying by ACY, its AFFILIATES, or their representatives.
4.6 MANUFACTURING AUDIT. ACY shall have the right to inspect at
reasonable intervals and during normal business hours, and on reasonable prior
notice, the operations (including without limitation, all such aforesaid
records, processes, and other facets of the manufacturing operations) and
facilities of APOLLON wherein PRODUCT is manufactured, packaged, inspected,
tested, labelled, stored or shipped, and to analyze any tangible material
relevant thereto.
4.7 TECHNICAL SUPPORT. ACY shall be responsible for technical
support for its customers, and shall investigate and respond to its customers
concerning PRODUCTS, with reasonable assistance requested of APOLLON. The
parties shall cooperate with one another in correcting any adverse reactions or
customer complaints and the reporting thereof, or any governmental or regulatory
defect notification or compliance requirements with respect to the PRODUCTS.
ARTICLE V
FAILURE TO SUPPLY
5.1 GRANT OF CONTINGENT MANUFACTURING RIGHTS. APOLLON hereby grants
to ACY the right to manufacture or have manufactured on its behalf any PRODUCT
with respect to which
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APOLLON is unable or unwilling to satisfy its obligations pursuant to Paragraph
2.6 hereof. At such time as ACY shall be entitled to exercise its rights under
this ▇▇▇▇▇▇▇▇▇ ▇.▇, ▇▇▇▇▇▇▇ will provide to ACY all relevant PRODUCT INFORMATION
and will otherwise provide ACY or a party designated by ACY with reasonable
assistance to enable such party to manufacture such PRODUCT according to the
best systems then known to APOLLON. Further, upon the filing of the first PLA
and/or ELA for a PRODUCT, ACY shall have the right, but not the obligation, to
qualify itself or its designee as an alternate manufacturer, to enable it to
exercise its rights pursuant to the first sentence of this Paragraph 5.1.
APOLLON shall actively support and participate in a meaningful manner in the
procurement by ACY or its designee of all GOVERNMENT APPROVALS requisite for any
such alternate manufacture, including the granting of assistance in accordance
with the provisions of Paragraph 5.3 hereof.
5.2 EXERCISE OF CONTINGENT MANUFACTURING RIGHTS. If APOLLON is
unable to supply any quantity of a PRODUCT required to be supplied by APOLLON
pursuant to Paragraph 2.6 for forty-five (45) consecutive days, ACY shall,
pursuant to Paragraph 5.1, be entitled to make or have made its entire
requirements for such PRODUCT until such time as APOLLON has built inventories
for such PRODUCT equal to twice the average monthly quantity of such PRODUCT
sold during the prior twelve-month period; provided that such inventories have
been manufactured on a production schedule reasonably consistent with that
required to regularly meet ACY's
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requirements. In the event that ACY shall, pursuant to this Paragraph 5.2, elect
to manufacture or have manufactured its requirements for a PRODUCT:
(a) ACY's obligation to make any advance payments for such
PRODUCT in accordance with Paragraph 6.3 hereof shall be suspended during the
time of alternate manufacture;
(b) APOLLON shall assign (if permitted by law) or otherwise
transfer and grant to ACY a co-exclusive right to use all PRODUCT INFORMATION
and GOVERNMENT APPROVALS and otherwise assist ACY in all material respects in
this alternate manufacture and supply; and
(c) Any expenses reasonably incurred by ACY in establishing
such alternate manufacturer (provided that such manufacturer is an unaffiliated
third party) may be credited against future payments to APOLLON for the purchase
of such PRODUCT; provided that with respect to each such payment due APOLLON,
only [ ] of such amount may be satisfied by credit of such expenses, until
such time as such expenses incurred by ACY have been fully credited.
5.3 ASSISTANCE PROVIDED BY APOLLON. In the event that ACY shall
exercise its rights with respect to qualification of an alternate manufacturer
pursuant to Paragraph 5.1 or with respect to any PRODUCT under Paragraph 5.2,
(a) APOLLON shall, from time to time, at the request of ACY,
arrange to have taken into APOLLON's manufacturing facilities, or those of its
permitted
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subcontractors, technical representatives of ACY, for the purpose of instruction
in all applicable processes of manufacture for such PRODUCT. Such
representatives shall comply with all of the ordinary regulations of such
facility(s) in respect of visitors.
(b) At ACY's request, and at times and for durations
convenient to APOLLON, APOLLON shall furnish the services of APOLLON scientists
and technicians, or any technicians involved in the manufacture of the
applicable PRODUCT, in such numbers as shall be mutually agreeable to the
parties, to advise ACY in connection with the operation of such manufacturing
facility for manufacture hereunder.
(c) To the extent APOLLON has not already done so, APOLLON
shall further provide the names of all suppliers of, and a statement setting
forth APOLLON's inventory of, the raw materials used in the manufacture of the
applicable PRODUCT. To the extent consistent with APOLLON's prior written
contractual obligations with such suppliers, and at the request of ACY, APOLLO
shall transfer to ACY all such inventories, at prices to be agreed upon by the
parties, and if requested, temporarily assign all applicable purchase orders or
other agreements with such suppliers, as applicable, to enable ACY or its
designee to act as an alternate manufacturer for the applicable PRODUCT
hereunder.
5.4 LENGTH OF ALTERNATE MANUFACTURE. In the event ACY shall have
exercised its right to manufacture a PRODUCT pursuant to ▇▇▇▇▇▇▇▇▇ ▇.▇, ▇▇▇▇▇▇▇
shall notify ACY when it is able and
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willing to resume manufacture and supply of such PRODUCT in accordance with its
obligations hereunder, and the parties shall negotiate a reasonable timetable
for APOLLON to resume the supply of such PRODUCT hereunder, subject to ACY's
then existing contractual commitments which shall be reasonable in magnitude and
duration.
ARTICLE VI
PAYMENTS
6.1 TRANSFER PRICE. (a) [
]
(b) In the event that, with respect to any HIV PRODUCT,
APOLLON shall have exercised its rights pursuant to Section 6.05 of the RESEARCH
AND DEVELOPMENT AGREEMENT, and thereby agreed to fund [ ]% of the costs of Phase
III clinical trials for such PRODUCT, the transfer price to be paid to APOLLON
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by ACY or its AFFILIATES with respect to such HIV PRODUCT shall
be [
]
(c) With respect to any PRODUCT to be used as free samples,
the transfer price to be paid to APOLLON by ACY or its AFFILIATES shall be
determined by the parties at the time of the submission of the first PLA for
such PRODUCT; provided, however, that in no event shall such transfer price be
less than [ ]% of APOLLON's FULLY BURDENED MANUFACTURING COST (as such term is
defined in the RESEARCH AND DEVELOPMENT AGREEMENT) for such PRODUCT.
(d) In addition to the transfer price to be paid to APOLLON
pursuant to Subparagraphs (a), (b) or (c), as applicable, ACY and its AFFILIATES
shall pay APOLLON the following amounts in connection with the sale of PRODUCTS
from APOLLON to ACY and its AFFILIATES: [
]
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(e) All prices set forth in this Paragraph 6.1 are F.O.B.
Malvern, PA and are paid on a cumulative basis [
]
6.2 ACY RESALE PRICES. For the avoidance of doubt, and
notwithstanding any provision of the RESEARCH AND DEVELOPMENT AGREEMENT, ACY
shall have the right to set its resale prices of the PRODUCTS without the
approval of APOLLON.
6.3 ADVANCE PAYMENTS FOR PURCHASES OF PRODUCTS. (a) Notwithstanding
any other provision of this AGREEMENT to the contrary, ACY shall pay APOLLON the
following non-refundable amounts with respect to each PRODUCT for each 12-month
period following the first GOVERNMENT APPROVAL to market such PRODUCT in the
U.S., as follows: [
]
(b) Payments payable pursuant to Subparagraph (a) of this
Paragraph shall be paid within forty-five (45) days following the first day of
the applicable 12-month period. Such payments shall serve as an advance payment
against payments due APOLLON for the applicable PRODUCT under Subparagraph 6.1
(a) or
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(b), as applicable, for such 12-month period and as such are fully creditable
against all such percentage of NET SALES due APOLLON for such 12-month period.
Notwithstanding anything contained in this Paragraph 6.3 to the contrary, no
payments shall be due to APOLLON pursuant to this Paragraph with respect to any
PRODUCT IMPROVEMENT, or for a PRODUCT for use in an INDICATION if ACY shall be
currently making payments to APOLLON under this Paragraph for a PRODUCT which
has substantially the same composition and formulation with regard to the active
moieties, but which is being used for another INDICATION ("INDICATION" being
defined as "Indication" in the RESEARCH AND DEVELOPMENT AGREEMENT).
6.4 PAYMENTS; CURRENCY. Payments to APOLLON hereunder shall be in
United States Dollars and made within 60 days of receipt of the quantities of
PRODUCT ordered by ACY, if not rejected by ACY in accordance with Paragraph 2.8
hereof. Payments may be effected by check or wire transfer. Any late payments
shall bear interest from the 61st day after ACY's receipt of the shipment of
such PRODUCT through the date of APOLLON's receipt of payment at a fixed annual
rate equal to 4% over the prime rate as in effect at PNC Bank, N.A. on the 61st
day after such receipt. Invoices shall be sent to, and payable by, the ACY
entity which placed the order. For the purpose of computing NET SALES for
PRODUCTS sold in a currency other than United States Dollars, such currency
shall be converted into United States Dollars in accordance with ACY's customary
and
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
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usual translation procedures (which shall be in accord with generally accepted
accounting principles). If by reason of any restrictive exchange laws or
regulations, ACY shall be unable to convert to U.S. Dollars amounts equivalent
to the payments payable by ACY hereunder in respect of PRODUCTS sold for funds
other than U.S. Dollars, ACY shall notify APOLLON promptly with an explanation
of the circumstances. In such event, all payments due hereunder in respect of
the transaction so restricted (or the balance thereof due hereunder and not paid
in funds other than U.S. Dollars as hereinafter provided) shall be deferred and
paid in U.S. Dollars as soon as reasonably possible after, and to the extent
that, such restrictive exchange laws or regulations are lifted so as to permit
such conversion to U.S. Dollars, of which lifting ACY shall promptly notify
APOLLON. At its option, APOLLON shall meanwhile have the right to request the
payment (to it or to a nominee), and upon such request, ACY shall pay, or cause
to be paid, all such amounts (or such portions thereof) as are specified by
APOLLON, in funds, other than U.S. Dollars, designated by and legally available
to APOLLON under such then existing restrictive exchange laws or regulations.
6.5 PAYMENTS TO ACY. In the event that the license granted to ACY
pursuant to Section 7.04 of the RESEARCH AND DEVELOPMENT AGREEMENT shall
terminate pursuant to Sections 14.03, 14.04, 14.05, or 14.07 of that Agreement,
APOLLON shall be entitled to sell or have sold such PRODUCT commercially and ACY
shall be entitled to receive a percentage of the NET SALES of
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such PRODUCT. Such percentage shall be based upon the proportion which the
research and development costs for the PRODUCT that were funded by ACY under the
RESEARCH AND DEVELOPMENT AGREEMENT bears to the total research and development
costs of such PRODUCT, all in accordance with the following schedule:
[
] [ ]
------ ---------------------------------
[
]
The compensation provided for in this Paragraph shall be in lieu of
any other payments or other compensation relating to the commercial sale of such
PRODUCT to which ACY or its AFFILIATES might otherwise be entitled pursuant to
this AGREEMENT or otherwise. Payments made by APOLLON to ACY under this
Paragraph 6.5 shall be subject to the provisions of Paragraph 6.4, mutatis
mutandis.
6.6 TRANSFER PRICE IF PRODUCT MANUFACTURED BY ACY. Notwithstanding
anything contained in Paragraph 6.1 to the contrary, in the event that ACY shall
manufacture or shall have manufactured on its behalf (other than by APOLLON or
its permitted designees) any PRODUCT,
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(a) Then ACY and its AFFILIATES shall pay APOLLON the
following [
]
(b) And in the event that, with respect to such PRODUCT, APOLLON
shall have exercised its rights pursuant to Section 6.05 of the RESEARCH AND
DEVELOPMENT AGREEMENT, then ACY and its AFFILIATES shall pay APOLLON an amount
equal [
]
(c) The compensation provided for in this Paragraph shall be
in lieu of any other payments or other compensation, including, without
limitation, the advance payments pursuant to Paragraph 6.3 hereof, relating to
the commercial sale of such PRODUCT manufactured by ACY or its AFFILIATES to
which APOLLON or its AFFILIATES might otherwise be entitled pursuant to this
AGREEMENT or otherwise, with the exception that Subparagraph 6.1(c) shall apply,
mutatis mutandis.
6.7 TIME PERIOD FOR PAYMENTS. All payments due to a party pursuant
to Paragraphs 6.5 or 6.6 shall be paid to such party within 60 days of the last
day of each calendar quarter.
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6.8 LIABILITY RESERVE. APOLLON shall establish and maintain a
reserve for any liabilities that it may incur arising out of the manufacture,
use, offer for sale or sale of PRODUCTS in a dollar amount equal to the
percentage of NET SALES paid to APOLLON under Paragraphs 6.1 or 6.6 hereof
multiplied by the dollar amount of such a reserve established and maintained by
ACY; provided that the establishment, maintenance and amount of such reserve
will not cause APOLLON'S independent auditors to fail to deliver their opinion
that APOLLON'S financial statements have been prepared in accordance with
generally accepted accounting principles.
ARTICLE VII
RECORD KEEPING AND AUDITS
7.1 RECORDS RETENTION. Each party shall keep, for a period of five
(5) years following shipment, full, true and accurate books of accounts and
other records containing all information and data which may be necessary to
ascertain and verify the transfer price charged for all PRODUCT shipped pursuant
to this AGREEMENT. The parties shall also each keep complete and accurate
records pertaining to the development, use and sale of PRODUCTs in sufficient
detail to permit the other party to confirm the accuracy of the calculations of
ACY's research and development expenses, and ACY's and its AFFILIATES' NET
SALES, and in the case of APOLLON, the accuracy of the calculations of APOLLON's
research and development, regulatory
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approval and manufacturing expenses and, if applicable, any APOLLON NET SALES
received as a result of its sale of a PRODUCT pursuant to Paragraph 6.5 hereof.
The provisions of this Paragraph 7.1 shall survive termination of this AGREEMENT
for any reason.
7.2 AUDIT RIGHTS. Each party shall have the right, limited to one
time per year and at its own expense, upon reasonable notice and during normal
business hours, and through an independent representative (who shall agree to be
bound to provisions of strict confidentiality and limited use, in perpetuity),
to inspect and audit the other party's books and records solely to verify a
party's financial calculations and reporting obligations under this AGREEMENT.
In the event that (i) ACY has understated by more than 5.0% of any NET SALES
relating to its sale of any PRODUCT as contemplated by Paragraphs 6.1 or 6.6
hereof, or (ii) APOLLON has understated by more than 5.0% any NET SALES relating
to its sale of any PRODUCT as contemplated by Paragraph 6.5 hereof, the party
making such understatement error shall pay the reasonable costs and expenses of
the other party's accountant in connection with its review or audit. The
provisions of this Paragraph 7.2 shall survive termination of this AGREEMENT for
any reason.
7.3 TAXES. APOLLON shall bear and pay all federal, state and local
taxes based upon or measured by its net income, and all franchise taxes based
upon its corporate existence, or its general corporate right to transact
business. Any other tax,
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however denominated and howsoever measured, imposed upon a PRODUCT, or upon the
production, sale, transportation, delivery, or use of a PRODUCT, shall be paid
directly by ACY and its AFFILIATES, or if prepaid by APOLLON, shall be invoiced
to ACY and its AFFILIATES as a separate item and paid by ACY and its AFFILIATES
to APOLLON. ACY and its AFFILIATES shall provide APOLLON with all documentation,
including without limitation any resale exemption certificates, reasonably
requested by APOLLON to enable it to qualify for any exemption from any sales,
transfer or excise tax based upon the sale of PRODUCTS from APOLLON to ACY and
its AFFILIATES.
ARTICLE VIII
TRADEMARKS, TRADENAMES, TRADEDRESS
8.1 RETENTION OF RIGHTS. ACY shall use any TRADEMARKS, trade names
and trade dress it may choose, in its sole discretion, in connection with any
PRODUCT, including, without limitation, (but provided that the license granted
to ACY with respect to such PRODUCT pursuant to Section 7.04 of the RESEARCH AND
DEVELOPMENT AGREEMENT shall not have terminated) any trade marks or trade names
of APOLLON. Nothing contained in this AGREEMENT, however, shall prohibit, or be
construed to prohibit, APOLLON from using its trade names and trade marks in
connection with the sale of any products not subject to this AGREEMENT, if
otherwise permitted by the relevant trademark laws.
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Notwithstanding anything in the RESEARCH AND DEVELOPMENT AGREEMENT or this
AGREEMENT to the contrary, and in the event the license granted to ACY with
respect to a particular PRODUCT pursuant to Section 7.04 of the RESEARCH AND
DEVELOPMENT AGREEMENT is terminated pursuant to Sections 14.03, 14.04, 14.05 or
14.07 of that Agreement, ACY and its AFFILIATES shall grant to APOLLON the
exclusive right to use, in connection with the sale of such PRODUCT, any
TRADEMARKS or trade names previously used by ACY and/or its AFFILIATES in
connection with the sale of such PRODUCT, provided however, that in no event
shall ACY be obliged to grant such right to use TRADEMARKS or trade names that
ACY determines to be part of, related to as related to a line of products,
housemarks, and the like) or confusingly similar with any other trade marks or
trade names of ACY or its AFFILIATES.
8.2 TRADE DRESS. To the extent permitted by all applicable laws and
regulations, APOLLON shall package and label PRODUCTS in trade dress of ACY's
choosing, and consistent with SPECIFICATIONS, and if directed by ACY, and
provided that the parties shall agree upon additional consideration, if any, to
be paid to APOLLON therefor, such PRODUCTS shall be packaged together with other
products for sale by ACY.
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ARTICLE IX
INFRINGEMENTS
9.1 INFRINGEMENTS.
(a) The party to this AGREEMENT first having knowledge of any
imitations of any PRODUCT or of any actual, suspected or threatened misuse or
infringement (hereinafter collectively "infringement") of any INTELLECTUAL
PROPERTY RIGHTS (as such term is defined in the RESEARCH AND DEVELOPMENT
AGREEMENT) necessary or materially useful to manufacture, import, offer for
sale, sell, or otherwise use one or more PRODUCTS, shall promptly notify the
other in writing and shall provide the other with any available evidence
thereof. The notice shall set forth the relevant facts in reasonable detail.
(b) Unless otherwise prohibited by law, prior agreement, or
regulation, (i) APOLLON (or its licensor, if applicable, shall have the primary
right in the first instance, but not the obligation, to institute, prosecute,
and control any action or proceeding with respect to the infringement of any
APOLLON INTELLECTUAL PROPERTY RIGHTS or those covered by a UNIVERSITY LICENSE,
and (ii) ACY shall have the primary right in the first instance, but not the
obligation, to institute, prosecute, and control any action or proceeding with
respect to the infringement of any INTELLECTUAL PROPERTY RIGHTS owned or
licensed by ACY (other than any licensed or sublicensed pursuant to the RESEARCH
AND DEVELOPMENT AGREEMENT or under any UNIVERSITY LICENSE) or INTELLECTUAL
PROPERTY RIGHTS relating to a JOINT
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INVENTION, in each case by counsel of its own choice. With respect to any
particular infringement proceeding, the party which is the primary party
pursuant to the preceding sentence (the "PRIMARY PARTY"), shall have the right
to control such action; provided, however, that the other party (the
"non-PRIMARY PARTY") shall have the right, at its own expense, to intervene (to
the extent permitted by law) and be represented in that action by counsel of its
own choice. The PRIMARY PARTY may not, without the prior written consent of the
non-PRIMARY PARTY (which consent may not be unreasonably withheld), enter into
any agreement or other arrangement effecting a settlement of such infringement
action which imposes any obligations or restrictions on the non-PRIMARY PARTY
regarding the use of the INTELLECTUAL PROPERTY RIGHTS which were the subject of
such infringement action.
(c) If the PRIMARY PARTY brings an infringement action and the
non-PRIMARY PARTY determines to pursue such action or proceeding also, the
non-PRIMARY PARTY shall, within thirty (30) days of receipt of notice by the
non-PRIMARY PARTY of the initiation of suit by such PRIMARY PARTY, notify the
PRIMARY PARTY of its desire to be joined as a party plaintiff, and shall
thereafter agree to join as a party plaintiff within fifteen (15) days of its
notice of such desire to the PRIMARY PARTY (to the extent such party is
permitted by law to so join); and further, shall give the PRIMARY PARTY
reasonable assistance and authority to file and prosecute such infringement
action. The out-of--
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pocket costs and expenses reasonably incurred by the PRIMARY PARTY in bringing
and maintaining any such infringement action (including, without limitation, any
such payments made to APOLLON'S licensors as required by any UNIVERSITY LICENSE)
shall be reimbursed first out of any damages or other monetary awards recovered.
Any remaining damages or other monetary awards shall be divided on an equitable
basis, taking into account the parties relative lost revenues and profits or
royalty income, as applicable and as such are allocated or payable hereunder.
(d) If the PRIMARY PARTY brings an infringement action and the
non-PRIMARY PARTY determines not to pursue such action or proceeding, the
non-PRIMARY PARTY nevertheless agrees to be joined as a party plaintiff (if
permitted by law and if the PRIMARY PARTY so requests) and to give the PRIMARY
PARTY reasonable assistance and authority to file and prosecute the suit. In
such case, the PRIMARY PARTY shall bear all costs associated therewith and be
entitled to all damages or other monetary awards to the exclusion of the
non-PRIMARY PARTY. If the PRIMARY PARTY does not request that the non-PRIMARY
PARTY be joined as a party plaintiff, the non-PRIMARY PARTY nevertheless agrees
to give the PRIMARY PARTY reasonable assistance in any such proceedings or
preparation therefor, at the PRIMARY PARTY's request and expense.
(e) Should the PRIMARY PARTY lack standing to bring an
infringement action, the non-PRIMARY PARTY shall bring such action at the
request of the PRIMARY PARTY upon an
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undertaking by the PRIMARY PARTY to indemnify and hold the non-PRIMARY PARTY
harmless (to the extent permitted by law) from all consequent liability.
(f) If the PRIMARY PARTY fails to bring an action or
proceeding within one hundred and eighty (180) days after written notification
of actual infringement of a substantial nature (which, for purposes hereof shall
mean that the infringing competitor has 20% of the relevant market share that
would reasonably inure to PRODUCT sold hereunder, but for such infringing sales,
as such market share is measured by IMS or other industry-accepted marketing
survey services) the non-PRIMARY PARTY shall have the right, but not the
obligation, to bring and control any such action by counsel of its own choice,
and at its own expense, and the PRIMARY PARTY (and/or its licensor) shall have
the right to be represented in any such action by counsel of its own choice at
its own expense. Any out-of-pocket costs and expenses reasonably incurred by the
non-PRIMARY PARTY pursuant to this Subparagraph (f) (including, without
limitation, any such payments made to APOLLON'S licensors as required by any
UNIVERSITY LICENSE) shall be reimbursed first out of any damages or other
monetary awards recovered. Any remaining damages or other monetary awards shall
be divided on an equitable basis, as set forth in Paragraph 9.1(c) above.
(g) The foregoing clauses (b) through (f) of this Paragraph
9.1 shall also apply to the issues of control of any action, costs and expenses,
and recoveries in the event a third
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party brings an action for declaratory judgment of invalidity and
non-infringement with respect to any INTELLECTUAL PROPERTY RIGHTS.
(h) Each party hereto shall promptly bring to the attention of
the other any information which it may receive indicating that any issued patent
would be infringed by the manufacture, use, importation, offer for sale or sale
of a PRODUCT. If a party to this AGREEMENT receives a claim of infringement from
a third party relating to the manufacture, use, importation, offer for sale or
sale of a PRODUCT, it shall promptly notify the other. The parties shall
cooperate in all reasonable respects in the resolution of any such claim of
infringement and the defense of any lawsuit arising thereunder.
(i) Capitalized terms used but not defined in this Article IX
shall have the meanings provided to such terms in the RESEARCH AND DEVELOPMENT
AGREEMENT.
ARTICLE X
WARRANTIES
10.1 AUTHORITY TO ENTER INTO AGREEMENT: OTHER RIGHTS AFFECTING SALE
OF PRODUCTS. Each party represents and warrants that it has and will continue to
have the full power and authority to enter into this AGREEMENT and to carry out
the transactions contemplated hereby. Each party further represents and warrants
that, except as disclosed in the RESEARCH AND
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DEVELOPMENT AGREEMENT, it has not granted any option, license, right or interest
in or to patents, technological data, products, or PRODUCTS, or any method of
manufacture or use of products or PRODUCTS to any third party that would
prohibit the use or sale of PRODUCTS, nor is it aware of any such claim by a
third party.
10.2 AGREEMENT NOT TO BREACH OTHER AGREEMENTS. The parties further
represent and warrant that the execution of this AGREEMENT and the full
performance and enjoyment of the rights of APOLLON and ACY under this AGREEMENT
will not breach the terms and conditions of any license, contract, or agreement,
whether written or oral, between APOLLON or ACY, as applicable, and any third
party.
10.3 COMPLIANCE WITH LAWS; PRODUCT WARRANTIES. Each party will
comply with all applicable Federal, state and local governmental and regulatory
requirements, including without limitation FDA rules and regulations, in
connection with the manufacture, transportation, storage and sale of the
PRODUCTS. APOLLON represents and warrants that any PRODUCT supplied by it
pursuant to this AGREEMENT shall meet GMP specifications required by the FDA and
shall meet current SPECIFICATIONS. Each party hereby represents that it will not
take any action or omit to take any action that will cause any PRODUCT supplied
hereunder to be (i) a PRODUCT that is adulterated or misbranded within the
meaning of governmental acts and regulations, and especially the U.S. Food,
Drug, & Cosmetic Act, or (ii) an article which may not, under the provisions of
Section 404 or Section 505 of the
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aforesaid Act, be introduced into interstate commerce. EXCEPT AS OTHERWISE
EXPRESSLY SET FORTH HEREIN, THE PARTIES MAKE NO REPRESENTATIONS AND EXTEND NO
WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO ANY PRODUCT.
BY WAY OF EXAMPLE BUT NOT OF LIMITATION, THE PARTIES MAKE NO REPRESENTATIONS OR
WARRANTIES (i) OF COMMERCIAL UTILITY; (ii) OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE; OR (iii) THAT THE MANUFACTURE, USE OR SALE OF PRODUCTS WILL
NOT INFRINGE ANY PATENT, COPYRIGHT OR TRADEMARK OR OTHER PROPRIETARY OR PROPERTY
RIGHTS OF OTHERS.
10.4 INDEMNIFICATION BY APOLLON. Subject to the limitations set
forth in ▇▇▇▇▇▇▇▇▇ ▇.▇, ▇▇▇▇▇▇▇ shall indemnify, defend and hold harmless ACY
from all actions, losses, claims, demands, costs and liabilities (including
reasonable attorneys' fees and expenses of total or partial recalls) to which
ACY is or may become subject insofar as they arise out of or are alleged or
claimed to arise out of (i) the inaccuracy of any representation or warranty of
APOLLON contained herein, or (ii) the negligence or willful misconduct of
APOLLON or its employees, subcontractors or agents, including, without
limitation, as relating to any manufacturing defect when APOLLON is the
manufacturer (collectively, "APOLLON INDEMNIFIED CLAIMS").
10.5 INDEMNIFICATION BY ACY. ACY shall indemnify, defend and hold
harmless APOLLON from all actions, losses, claims, demands, damages, costs and
liabilities (including reasonable attorneys' fees and expenses of total or
partial
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recalls) to which APOLLON is or may become subject insofar as they arise out of
or are alleged or claimed to arise out of (i) the inaccuracy of any
representation or warranty of ACY contained herein, or (ii) the negligence or
willful misconduct of ACY or its employees, subcontractors or agents, including,
without limitation, as relating to any manufacturing defect when ACY is the
manufacturer ("ACY INDEMNIFIED CLAIMS").
10.6 ADDITIONAL INDEMNIFICATION BY PARTIES. Except for APOLLON
INDEMNIFIED CLAIMS or ACY INDEMNIFIED CLAIMS, as applicable, each party shall
indemnify, defend and hold harmless the other for its PRO-RATA PERCENTAGE
(defined below) of all losses, claims, demands, damages, costs and liabilities
(including reasonable attorneys' fees and expenses of total or partial recalls)
to which the other is or may become subject insofar as they arise out of or are
alleged or claimed to arise out of the design, manufacture, use, handling,
storage or other disposition of a PRODUCT. For purposes of this Paragraph 10.6,
(i) with respect to any sales of a PRODUCT other than pursuant to Paragraph 6.5,
(x) APOLLON's PRO-RATA PERCENTAGE for such PRODUCT shall be equal to the
weighted average applicable percentage of NET SALES of such PRODUCT paid to
APOLLON pursuant to Article VI during the year immediately preceding the year in
which written notice is first received by a party alleging the occurrence of
losses, claims, demands, damages, costs or liabilities upon which the claim for
indemnification pursuant to this Paragraph 10.6 is based, and (y) ACY's PRO-RATA
PERCENTAGE for such PRODUCT shall
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be equal to 100% minus APOLLON's PRO-RATA PERCENTAGE, and (ii) with respect to
any sales of a PRODUCT pursuant to Paragraph 6.5, (x) ACY's PRO-RATA PERCENTAGE
for such PRODUCT shall be equal to the applicable percentage of NET SALES of
such PRODUCT paid to ACY pursuant to such Paragraph during the year immediately
preceding the year in which written notice is first received by a party alleging
the occurrence of losses, claims, demands, damages, costs or liabilities upon
which the claim for indemnification pursuant to this Paragraph 10.6 is based,
and (y) APOLLON's PRO-RATA PERCENTAGE for such PRODUCT shall be equal to 100%
minus ACY's PRO-RATA PERCENTAGE.
10.7 LIABILITY INSURANCE FOR APOLLON. During the period of APOLLON's
manufacture of PRODUCTS for supply hereunder, APOLLON shall use reasonable
efforts to maintain comprehensive general liability insurance with an insurance
carrier reasonably acceptable to ACY, which insurance policy or policies shall
maintain the full products hazards provisions with products hazards limits
subject to deductibles not in excess of $250,000 in the aggregate, and with at
least $2,000,000 overall coverage for claims of bodily injury and property
damage arising out of any loss, such coverage to be on a claims made basis. Such
policy or policies shall include ACY as an additional insured in each such
policy or policies insofar as its interests under this AGREEMENT. Both parties
shall provide notice to the other of any loss, whether actual or threatened,
promptly upon receipt of notice thereof.
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10.8 DEFENSE OF INDEMNIFICATION CLAIMS. A party entitled to
indemnification hereunder shall give prompt written notice to the indemnifying
party after the receipt by such party of any written notice of the commencement
of any action, suit, proceeding or investigation or threat thereof made in
writing for which such party may claim indemnification pursuant to this
AGREEMENT; provided, however, that a party's failure to notify promptly the
other of such claim or suit shall not obviate its right to receive
indemnification hereunder so long as such failure does not materially prejudice
the defense of such claim or suit. Unless, in the reasonable judgment of the
indemnified party, a conflict of interest may exist between the indemnified
party and the indemnifying party with respect to a claim, the indemnifying party
may assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party. If the indemnifying party is not entitled to, or elects not
to, assume the defense of a claim, the indemnified party shall assume the
defense of such claim with counsel reasonably satisfactory to the indemnifying
party (and the indemnifying party shall pay the fees and expenses of such
counsel). The indemnifying party will not be subject to any liability for any
settlement made without its written consent, which shall not be unreasonably
withheld.
10.9 COMPLIANCE WITH EXPORT LAWS AND REGULATIONS. In undertaking its
obligations hereunder and under the RESEARCH AND DEVELOPMENT AGREEMENT, each
party represents and warrants that it will comply with all export laws and
regulations of the
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Department of Commerce or other United States or foreign agency or authority,
and not export, or allow the export or reexport of any proprietary material or
information or any direct product thereof in violation of any such restrictions,
laws or regulations, or, without obtaining all necessary approvals and
authorizations, to Afghanistan, the People's Republic of China or any Group Q,
S, W, Y or Z country specified in the then current Supplement No. 1 to Section
770 of the U.S. Export Administration Regulations (or any successor supplement
or regulations, and as they may be amended from time to time).
10.10 SURVIVAL OF PROVISIONS. The provisions and obligations of this
Article X shall survive any termination of this AGREEMENT.
ARTICLE XI
THIRD-PARTY LICENSES
11.1 NEED FOR ADDITIONAL LICENSES PRIOR TO FIRST COMMERCIAL SALE. In
the event either ACY or APOLLON determines, at any time prior to the first
commercial sale of a PRODUCT, that a license(s) under any third-party patent is
necessary in order to make, use, import, offer for sale or sell such PRODUCT in
the TERRITORY, and neither APOLLON nor ACY is able to obtain such license(s) on
terms mutually acceptable to both parties, then APOLLON and ACY shall negotiate
in good faith to reach an agreement on a non-infringing substitute for such
PRODUCT, on
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terms and conditions acceptable to each party, which may include a modification
in the transfer price of such PRODUCT.
11.2 NEED FOR ADDITIONAL LICENSES AFTER FIRST COMMERCIAL SALE. In
the event ACY and APOLLON mutually agree, at any time before or subsequent to
the first commercial sale of a PRODUCT but prior to the expiration or
termination of this AGREEMENT with respect to such PRODUCT, that a license(s)
under any third-party patent is necessary or advisable in order to make, use or
sell a PRODUCT in the TERRITORY, and such license(s) is obtained, the parties
shall negotiate in good faith to reach an agreement regarding an equitable
modification of the transfer price or fees to be paid by one party to the other
with respect to such PRODUCT pursuant to Article VI hereof.
11.3 DISAGREEMENT OVER NEED FOR ADDITIONAL LICENSES. In the event
that APOLLON and ACY cannot agree on whether or not a license is necessary
pursuant to a party's determination in accordance with Paragraphs 11.1 or 11.2
hereof, such matter shall be referred to independent patent counsel for APOLLON
and ACY, respectively, (each assuming all costs of counsel representing it), who
shall attempt to reach agreement on such matters. If such independent counsel
are not able to reach an agreement within a reasonable time period, they shall
jointly chose an independent third patent counsel to make a binding
determination, and all costs thereof shall be shared equally by the parties.
11.4 EFFORTS TO OBTAIN LICENSE. Upon agreement by the parties
pursuant to Paragraph 11.1 or 11.2 or upon a binding
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determination pursuant to Paragraph 11.3 that a license is necessary, and in the
event that the parties cannot reach agreement as to an acceptable non-infringing
substitute, the parties shall use reasonable efforts to obtain such license, and
all costs of such acquisition of a license shall be borne equally by the
parties.
ARTICLE XII
CHANGE IN CONTROL/INSOLVENCY
12.1 RIGHTS OF ACY. Upon the occasion of a "CHANGE IN CONTROL" or an
"INSOLVENCY EVENT" (each as defined below) with respect to APOLLON, ACY shall,
in addition to any rights set forth in Article XIII, for a period of 180 days
following such CHANGE IN CONTROL or INSOLVENCY EVENT, be entitled to exercise
its rights as granted in Paragraph 5.1 hereof to manufacture or have
manufactured on its behalf all quantities of PRODUCT as required by ACY and its
AFFILIATES.
12.2 ADVANCE NOTICE OF INSOLVENCY EVENT. APOLLON will not take any
action to cause directly an INSOLVENCY EVENT without giving ACY at least thirty
days' prior written notice. Upon ACY's receipt of such notice, the parties may
negotiate in good faith for a period not to exceed thirty days regarding the
possibility of ACY's providing financing to APOLLON, on terms and conditions
mutually satisfactory to both parties, to prevent the occurrence of an
INSOLVENCY EVENT.
12.3 APOLLON'S CONTINUED MANUFACTURE AND SUPPLY. In
the event ACY exercises its right to manufacture PRODUCT pursuant
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to ▇▇▇▇▇▇▇▇▇ ▇▇.▇, ▇▇▇▇▇▇▇ shall not be relieved of its obligations of
manufacture and supply hereunder until such time (which in any event may not
exceed five years from the date ACY shall have exercised such right) as ACY has
qualified an alternate manufacturer and supplier in accordance with the terms
and conditions of Article V (Failure to Supply), which terms and conditions
shall apply mutatis mutandis to alternate manufacture pursuant to this Article
with the exception that ACY's rights to exclusive manufacture and supply
pursuant to Paragraph 12.1 shall be irrevocable and that the provisions of
Paragraph 5.2(c) shall be inapplicable, and all licenses or other rights
requisite to such manufacture, if not already vested in and to ACY, shall also
vest irrevocably in and to ACY.
ARTICLE XIII
DURATION AND TERMINATION
13.1 TERM. This AGREEMENT shall become effective as of the EFFECTIVE
DATE and shall continue in full force and effect as to each PRODUCT, unless
earlier terminated pursuant to the provisions set forth in this Article, until
the later of (i) the expiration date of the last to expire applicable patent
within PATENTS (as such term is defined in the RESEARCH AND DEVELOPMENT
AGREEMENT), or (ii) the date that is ten (10) years following the first
commercial sale of such PRODUCT. At least two years prior the expiration of this
AGREEMENT as to any PRODUCT, the parties shall meet to discuss their desire to
extend this AGREEMENT as to
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such PRODUCT so as to enable ACY to have a sufficient supply of such PRODUCT
following such expiration.
13.2 TERMINATION BY MUTUAL AGREEMENT. The parties may mutually agree
in writing to terminate this Agreement as to one or more PRODUCTS or in its
entirety. Upon any termination of this entire AGREEMENT pursuant to this
Paragraph 13.2, all rights and obligations of both parties hereunder shall,
except as expressly set forth herein, terminate. Upon any termination of this
AGREEMENT as to a specific PRODUCT pursuant to this Paragraph 13.2, all rights
and obligations of both parties hereunder with respect to such PRODUCT, but not
with respect to any other PRODUCT, shall, except as expressly set forth herein,
terminate.
13.3. UNILATERAL TERMINATION WITHOUT CAUSE. Either party may, upon
one hundred eight (180) days prior written notice, unilaterally terminate this
AGREEMENT in its entirety or as to any specific PRODUCT; provided, however, that
upon any termination by APOLLON pursuant to this ▇▇▇▇▇▇▇▇▇ ▇▇.▇, ▇▇▇▇▇▇▇ shall
continue to supply to ACY the terminated PRODUCTS under the terms and conditions
hereof until such time as ACY has procured a GOVERNMENT APPROVED alternative
source of supply for such PRODUCT, except in no event shall APOLLON be obligated
to continue to supply ACY with any quantities of any terminated PRODUCT after
the date that is five (5) years following the date that APOLLON shall have
delivered to ACY its notice of termination pursuant to this Paragraph 13.3
unless the
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unavailability of an alternate source of supply for the PRODUCT arises solely
out of regulatory constraints which are beyond the control of, and which could
not have been avoided by, ACY.
(a) Upon any termination of this entire AGREEMENT pursuant to
this Paragraph 13.3, (i) if the RESEARCH AND DEVELOPMENT AGREEMENT shall not
have been previously terminated, the terminating party shall be deemed to have
breached the RESEARCH AND DEVELOPMENT AGREEMENT (thereby entitling the
non-breaching party to terminate such agreement pursuant to Section 14.04
thereof), (ii) all rights and obligations of the terminating party hereunder
shall, except as expressly set forth herein, immediately terminate, and (iii)
all obligations of the non-terminating party hereunder (other than the
obligation to make any payments due the terminating party under Paragraph 6.5 or
Paragraph 6.6, as applicable) shall, except as expressly set forth herein,
immediately terminate.
(b) Upon any termination of this AGREEMENT as to any PRODUCT
pursuant to this Paragraph 13.3, (i) if the RESEARCH AND DEVELOPMENT AGREEMENT
shall not have been previously terminated with respect to such PRODUCT, the
terminating party shall be deemed to have breached the RESEARCH AND DEVELOPMENT
AGREEMENT as to such specific PRODUCT, but not with respect to any other PRODUCT
or any PRODUCT IMPROVEMENT (thereby entitling the non-terminating party to
terminate such agreement solely as to such specific PRODUCT pursuant to Section
14.04 thereof), (ii) all rights and obligations of the terminating party
hereunder as
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to such specific PRODUCT, but not with respect to any other PRODUCT or PRODUCT
IMPROVEMENT, shall, except as expressly set forth herein, immediately terminate,
and (iii) all obligations of the non-terminating party hereunder as to such
specific PRODUCT (other than the obligation to make any payments due the
terminating party under Paragraph 6.5 or 6.6, as applicable) shall, except as
expressly set forth herein, immediately terminate.
13.4. TERMINATION FOR BREACH. In the event that any material
provision of this AGREEMENT is breached by either party, the nonbreaching party
may give the breaching party written notice requiring it to remedy such breach.
In the event the breaching party shall not have fully cured such breach within
sixty days after receipt of such notice (or in the case of a breach which is not
by its nature capable of being cured within sixty days, if the breaching party
shall not have commenced performance to cure within the sixty day period and
thereafter diligently attempted to complete performance of the cure), or if the
parties have not otherwise agreed on a plan to remedy such breach, the
nonbreaching party shall, in addition to any other remedies available to it
hereunder, at law or in equity, be entitled, but not obligated, to terminate,
upon written notice to the breaching party, this AGREEMENT in its entirety, or
if such breach relates only to a specific PRODUCT, the non-breaching party shall
be entitled, but not obligated, to terminate this AGREEMENT only as to the
specific PRODUCT to which such breach
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relates. Notwithstanding anything contained in this AGREEMENT to the contrary,
APOLLON shall not be deemed to be in breach of this AGREEMENT in the event it
shall fail to satisfy its obligations pursuant to Article II hereof; provided
ACY is successfully manufacturing, pursuant to Article V hereof, the PRODUCT(S)
which APOLLON has failed to supply.
(a) Upon any termination of this entire AGREEMENT pursuant to
this Paragraph 13.4, (i) all rights and obligations of the breaching party
hereunder shall, except as expressly set forth herein, immediately terminate,
and (ii) all obligations of the non-breaching party hereunder (other.than the
obligation to make any payments due the breaching party under Paragraph 6.5 or
Paragraph 6.6, as applicable) shall, except as expressly set forth herein,
immediately terminate.
(b) Upon any termination of this AGREEMENT as to any PRODUCT
pursuant to this Paragraph 13.4, (i) all rights and . obligations of the
breaching party hereunder as to such specific PRODUCT shall, except as expressly
set forth herein, immediately terminate, and (ii) all obligations of the
non-breaching party hereunder as to such specific PRODUCT (other than the
obligation to make any payments due the breaching party under Paragraphs 6.5 or
6.6, as applicable) shall, except as expressly set forth herein, immediately
terminate.
13.5. TERMINATION FOR CHANGE IN CONTROL. (a) Within one year
following the occurrence of a "CHANGE IN CONTROL," either party may, upon sixty
days prior written notice, terminate
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this AGREEMENT in its entirety or as to a specific PRODUCT. A "CHANGE IN
CONTROL" shall be deemed to have occurred if (A) any person (as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, is or
becomes the beneficial owner (as defined in Rule 13d-3 under the Act), directly
or indirectly, of securities of a party representing 50% or more of the combined
voting power of such party's then outstanding securities; or (B) the
shareholders of such party approve a merger or consolidation of such party with
any other corporation, other than a merger or consolidation wherein the
shareholders of such party retain at least 50% of the combined voting power of
the outstanding securities of the surviving or resulting corporation; or, such
party enters into complete liquidation or otherwise enters into an agreement for
the sale or other disposition of all or substantially all of such party's assets
to an entity that is not 50% controlled by such party's shareholders.
(b) Upon any termination of this AGREEMENT pursuant to this
Paragraph 13.5, (i) all rights and obligations of the party with respect to whom
the CHANGE IN CONTROL shall have occurred under the entire AGREEMENT or solely
as to such specific PRODUCT, as applicable, shall, except as expressly set forth
herein, immediately terminate, and (ii) all obligations of the other party
hereunder (other than the obligation to make any payments due the party with
respect to whom the CHANGE IN CONTROL shall have occurred under Paragraphs 6.5
or 6.6, as applicable)
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shall, except as expressly set forth herein, immediately terminate.
13.6. TERMINATION DUE TO INSOLVENCY. (a) This AGREEMENT may be
terminated in its entirety by a party in the event (i) a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect shall be instituted by the other party, or the other party shall consent
in writing to the entry of an order for relief of an involuntary case under any
such law; (ii) a general assignment for the benefit of creditors shall be made
by the other party; (iii) the other party shall consent in writing to the
appointment of or possession by a receiver, liquidator, trustee, custodian,
sequestrator or similar official of all or any substantial part of such party's
property; (iv) the other party shall adopt a board resolution in furtherance of
any of the foregoing actions specified in Subparagraphs (i) through (iii) of
this Paragraph 13.6; or (v) a decree or order for relief by a court of competent
jurisdiction shall be entered in respect of any party in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, trustee, sequestrator
or other similar official of the other party or of any substantial part of such
party's assets, or ordering the winding up or liquidation of its affairs, and
any such decree or order shall remain unstayed or undischarged and in effect for
a period of ninety (90) days (hereinafter an "Insolvency Event").
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(b) Upon any termination of this AGREEMENT pursuant to this
Paragraph 13.6, (i) all rights and obligations of the insolvent party hereunder
shall, except as expressly set forth herein, immediately terminate, (ii) all
obligations of the noninsolvent party hereunder (other than the obligation to
make any payments due the insolvent party under Paragraph 6.5 or Paragraph 6.6,
as applicable) shall, except as expressly set forth herein, immediately
terminate.
13.7. EFFECT OF TERMINATION ON RESEARCH AND DEVELOPMENT AGREEMENT.
If this Agreement is terminated in its entirety or as to any PRODUCT(S), the
parties shall be relieved of their rights and obligations under Sections 9.02
and 9.03 of the RESEARCH AND DEVELOPMENT AGREEMENT in their entirety or as to
such PRODUCT(S), as applicable. Except as otherwise expressly set forth herein,
any termination of this AGREEMENT shall not affect any of the rights or
obligations of the parties under the RESEARCH AND DEVELOPMENT AGREEMENT.
13.8 FAILURE TO EXERCISE RIGHTS. Failure on the part of either party
to exercise or enforce any right conferred upon it hereunder shall neither be
deemed to be a waiver of any such right nor operate to bar the exercise or
enforcement thereof at any time thereafter.
13.9 RIGHT TO SELL REMAINING INVENTORY. Upon termination of this
AGREEMENT for any reason (other than a termination by APOLLON pursuant to
Paragraphs 13.4, 13.5 or 13.6), ACY and its AFFILIATES and distributors shall
have the
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right to advertise, promote, market and sell all quantities of such PRODUCTS
remaining in its or their inventory.
13.10 TRANSFER OF GOVERNMENT APPROVALS. To the extent it has not
already done so, the terminating party pursuant to Paragraph 13.3 hereof, and
the non-terminating party pursuant to Paragraphs 13.4, 13.5 and 13.6 hereof,
shall immediately assign (or grant a right of reference and use if assignment is
prohibited by law) and transfer all applicable GOVERNMENT APPROVALS, including
any information relating thereto, to the other party upon the prior written
request of such other party.
ARTICLE XIV
CONFIDENTIALITY
14.1 CONFIDENTIALITY; EXCEPTIONS. Except to the extent expressly
authorized by this AGREEMENT or otherwise agreed in writing, the parties agree
that, for the term of this AGREEMENT and for a period of five years thereafter,
the receiving party shall keep confidential and shall not publish or otherwise
disclose and shall not use for any purpose other than as provided for in this
AGREEMENT any patent application, know-how (including biological materials), or
other information furnished to the other party pursuant to this AGREEMENT
(hereinafter "CONFIDENTIAL INFORMATION"), except to the extent that it can be
established by the receiving party by competent proof that such CONFIDENTIAL
INFORMATION:
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
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(a) was already known to the receiving party, other than under
an obligation of confidentiality, at the time of disclosure by the other party;
(b) was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the receiving party;
(c) became generally available to the public or otherwise part
of the public domain after its disclosure and other than through any act or
omission of the receiving party in breach of this AGREEMENT;
(d) was disclosed to the receiving party, other than under an
obligation of confidentiality, by a third party, unless the receiving party knew
that such third party was under an obligation to the disclosing party not to
disclose such information to others; or
(e) was disclosed by the receiving party pursuant to a
requirement of law. The parties agree that the financial terms of this AGREEMENT
shall also be considered CONFIDENTIAL INFORMATION-hereunder.
14.2 AUTHORIZED DISCLOSURE. Upon notification to the other party,
each party may disclose the other's CONFIDENTIAL INFORMATION to the extent such
disclosure is reasonably necessary in filing or prosecuting patent applications,
prosecuting or defending litigation or complying with applicable governmental
regulations and as required by agreement with university collaborators. If a
party is required by law, regulation or
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
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prior agreement to make any disclosure of the other party's CONFIDENTIAL
INFORMATION, it will, except where impractical for necessary disclosures (e.g.,
in the event of medical emergency), give reasonable advance notice to the other
party of such disclosure requirement and, except to the extent inappropriate in
the case of patent applications, will use reasonable efforts to secure
confidential treatment of such CONFIDENTIAL INFORMATION required to be
disclosed, no less stringent than the obligations of confidentiality and limited
use imposed hereunder. In addition, each party may disclose the other's
CONFIDENTIAL INFORMATION to its employees, consultants and advisors on a
need-to-know basis, provided that any such employees, consultants and advisors
are subject to agreements of confidentiality no less stringent than the
obligations of confidentiality and limited use imposed hereunder.
14.3 CONFIDENTIAL OR PROPRIETARY INFORMATION OF THIRD PARTIES. Each
party agrees that it will not, during the term of this AGREEMENT, knowingly use,
disclose to the other, or induce the other to use, any confidential or
proprietary information belonging to third parties, except third party licensors
to a party wherein said party has the right to sublicense to the other party, or
as otherwise authorized by such third parties.
14.4 SURVIVAL. The provisions of this ARTICLE XIV shall survive the
termination or expiration of this AGREEMENT for any reason for a period of five
(5) years from said termination or expiration.
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
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ARTICLE XV
MISCELLANEOUS
15.1 NOTICES. Any notice required or permitted under this AGREEMENT
shall be deemed to have been sufficiently provided and effectively made as of
the delivery date if hand-delivered, or as of the date received if mailed by
registered or certified mail, postage-prepaid, or if by telecopy or overnight
airmail courier the business day the sender has written confirmation such
telecopy or overnight package was received, and addressed to the receiving party
at its respective address as follows:
If to ACY:
LEDERLE-PRAXIS BIOLOGICALS
division of AMERICAN CYANAMID COMPANY
c/o Wyeth-Ayerst Laboratories
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
with a copy to:
AMERICAN HOME PRODUCTS CORPORATION
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Associate General Counsel
If to APOLLON:
APOLLON, INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: PRESIDENT
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
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with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇., Esq.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & Ingersoll
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address which the receiving party has given notice pursuant to the
provisions of this Paragraph.
15.2 RELATIONSHIP OF PARTIES. The relationship of the parties under
this AGREEMENT is that of independent contractors and not as agents of each
other or partners or joint venturers, and neither party shall have the power to
bind the other in any way with respect to any obligation to any third party
unless a specific power of attorney is provided for such purpose. Each party
shall be solely and exclusively responsible for its own employees and
operations.
15.3 FORCE MAJEURE. (a) In the event that the performance of this
AGREEMENT or of any obligation hereunder, other than payment of money as herein
provided, by either party hereto is prevented, restricted or interfered with by
reason of any cause not within the control of the respective party, and which
could not by reasonable diligence have been avoided by such party, the party so
affected, upon giving prompt notice to the other party as to the nature and
probable duration of such event, shall be excused from such performance for a
period of one (1) year or to the extent and for the duration of such prevention,
restriction or interference, whichever is the shorter period of time, provided
that the party so affected shall use its
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
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reasonable efforts to avoid or remove such cause of non-performance and shall
fulfill and continue performance hereunder with the utmost dispatch whenever and
to the extent such cause or causes are removed.
(b) For the purpose of the preceding paragraph but without
limiting the generality thereof, the following shall be considered as not within
the control of the respective party: acts or omissions of a governmental agency,
compliance with requests, rules, regulations or orders of any governmental
authority or any department, agency or instrumentality thereof, flood, storm,
earthquake, fire, or other acts of God, war, riots, insurrection, accidents,
acts of the public enemy, invasion, quarantine restrictions, strike, lockout,
differences with workmen, embargoes, delays or failure in transportation and
acts of a similar nature.
15.3 NO IMPLIED LICENSES. Nothing in this AGREEMENT is intended to
or shall be construed to create, confer, give effect to or otherwise imply in
either party any license, right or property interest in any PRODUCT, or in any
know how or intellectual property owned or licensed by the other except as
expressly provided herein.
15.4 AMENDMENTS OR MODIFICATIONS. This AGREEMENT may be modified or
amended only in writing signed by duly authorized representatives of APOLLON and
ACY.
15.5 NO WAIVER. No failure or delay on the part of a party in
exercising any right hereunder shall operate as a waiver
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
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of, or impair, any such right. No single or partial exercise of any such right
shall preclude any other or further exercise thereof or of any other right. No
waiver of any such right shall be deemed a waiver of any other right hereunder.
15.6 LIMITATION OF LIABILITY. Neither party shall be liable to the
other for loss of profit or use or incidental or consequential damages in any
claims arising out of or relating to this AGREEMENT, whether based on warranty,
contract, negligence or strict liability.
15.7 SEVERABILITY. Should one of the provisions of this AGREEMENT
become or prove to be null and void, such will be without effect on the validity
of this AGREEMENT as a whole. Both parties will, however, endeavor to replace
the void provision by a valid one which in its economic effect is most
consistent with the void provision.
15.8 GOVERNING LAW; JURISDICTION. This AGREEMENT shall be governed
by and construed in accordance with the internal laws of the Commonwealth of
Pennsylvania without regard to principles of conflicts of laws. The appropriate
state and federal courts of the Commonwealth of Pennsylvania shall have
exclusive jurisdiction over any dispute between the parties, and each party
unconditionally submits to the jurisdiction of such courts; provided however,
that any patent question or controversy between the parties and related to a
U.S. patent shall be construed or resolved in accordance with the relevant
patent laws, and, the U.S. District Court for the Eastern District of
Pennsylvania
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
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shall have exclusive jurisdiction thereof. All other patent questions or
controversies shall be construed or resolved in accordance with the applicable
patent laws and in a forum of competent jurisdiction for such patent related
matter.
15.9 SEPARATE AGREEMENTS WITH ACY AFFILIATES. Upon request of ACY,
APOLLON shall enter into a direct agreement with an AFFILIATE of ACY for supply
of PRODUCT and receipt of payment therefor; provided that ACY shall have
guaranteed such AFFILIATE's performance thereunder. ACY hereby guarantees the
performance of its AFFILIATES under this AGREEMENT.
15.10 ASSIGNMENT. Neither party shall assign this AGREEMENT or any
of its rights or obligations hereunder without the prior written consent of the
other party hereto (which consent shall not be unreasonably withheld); provided,
however, that either party may assign this AGREEMENT to any wholly owned
subsidiary or, subject to a party's right to terminate pursuant to Paragraph
13.5 hereof, to any successor by merger or sale of substantially all of the
business unit to which this AGREEMENT relates in a manner such that the assignor
(if it continues as a separate entity) shall remain liable and responsible for
the performance and observance of all of its duties and obligations hereunder.
This AGREEMENT shall be binding upon the successors and permitted assigns of the
parties (regardless of whether such successor or assign shall be a competitor of
APOLLON or ACY) and the name of a party appearing herein shall be deemed to
include the names of such party's successor's and permitted assignees to
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
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the extent necessary to carry out the intent of this AGREEMENT. Any assignment
not in accordance with this Paragraph shall be void.
15.11 ENTIRE AGREEMENT. This AGREEMENT and the RESEARCH AND
DEVELOPMENT AGREEMENT, including the letter dated as of even date herewith and
attached as Exhibit A thereto, constitute the entire understanding between the
parties regarding the subject matter hereof and no party has relied on any
representation not expressly set forth or referred to in this AGREEMENT or in
the RESEARCH AND DEVELOPMENT AGREEMENT (including such aforesaid letter).
15.12 PUBLICITY. Except as otherwise provided herein, neither party
shall use or refer to, without the other party's prior written consent, which
shall not be unreasonably withheld, the other's name, this AGREEMENT or the
terms hereof in any public statement, whether oral or written, including, but
not limited to, communications with the media, advertising, shareholder reports,
communications with stock analysts or prospectuses; provided, however, that
either party may, without the consent of the other, make any disclosure required
by law, and particularly, but without limitation, by the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended, and the
regulations promulgated thereunder, further provided that in any such situation,
the other party is first given an opportunity to redact any information it is
permissible to redact from disclosure thereunder.
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
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15.13 COUNTERPARTS. This AGREEMENT may be executed in counterparts,
each of which shall be deemed an original and all of which shall constitute
together one and the same agreement.
IN WITNESS WHEREOF, the duly authorized representatives of the
parties hereto have caused this AGREEMENT to be executed.
AMERICAN CYANAMID COMPANY
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Print Name ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: PRESIDENT
-------------------------
LEDERLE DIVISION OF
AMERICAN CYANAMID
APOLLON, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
-----------------------------
Print Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: PRESIDENT AND CEO
-------------------------
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
