Exhibit 10.16
PRODUCTION AGREEMENT
BETWEEN
PACKAGING COORDINATORS, INC.
AND
AVIRON
This Agreement made effective as of October 31, 1997 (the "Effective
Date") by and between Packaging Coordinators, Inc., a Pennsylvania corporation
with offices at 0000 Xxx Xxxx Xxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
(hereinafter called "PCI"); and Aviron, a Delaware corporation with offices at
000 X. Xxxxxxxx Xxxxxx, Xxxxxxxx Xxxx, XX 00000 (hereinafter called "Aviron").
PCI and Aviron may be referred to herein as a "Party" or, collectively, as
"Parties."
WITNESSETH
WHEREAS, PCI specializes in packaging for the pharmaceutical industries
and has certain technical and commercial information and know-how relating to,
among other things, performing assembly functions and packaging of
pharmaceutical products.
WHEREAS, Aviron is a corporation that develops, conducts stability
trials, registers, and intends to market pharmaceutical products, and is the
owner of certain proprietary technical and commercial information and know-how
relating to, among other things, the formulation and development of such
products.
WHEREAS, Aviron desires to engage PCI to provide certain services to
Aviron in connection with the manufacture of certain of Aviron's products; and
WHEREAS, Aviron desires to collaborate with PCI to construct and develop an
appropriate site for such manufacture at PCI's facility;
NOW, THEREFORE, in consideration of the premises and the mutual promises
contained herein and intending to be legally bound hereby, the Parties agree as
follows:
1. DEFINITIONS
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The following terms as used in this Agreement shall have the meanings set forth
in this Article unless otherwise specifically provided herein:
1.1 "Affiliate(s)" shall mean any corporation, firm, partnership or
other entity which controls, is controlled by or is under common
control with a Party. For purposes of this definition, "control"
shall mean the ownership of at least fifty (50%) percent of the
voting share capital of such entity or any other comparable
equity or ownership interest.
1.2 "Agency" shall mean any governmental regulatory authority
involved in regulating any aspect of the development,
Manufacture, Storage and sale of the Product.
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1.
1.3 "Aviron Production Equipment" shall mean the [*] equipment
purchased by Aviron set forth in Appendix 1 attached hereto,
which may be amended from time to time.
1.4 "Aviron Area" shall mean the area reserved for [*] Production
pursuant to, and more fully described in, the Facility
Reservation Agreement.
1.5 "cGMP" shall mean all the laws, regulations and standards
relating to Primary and Secondary Production, including but not
limited to, the United States Food And Drug Administration (FDA)
current Good Manufacturing Practices, as set forth in the Code
Of Federal Regulations (CFR), and the EEC Good Manufacturing
Guidelines, Volume IV as such Regulations and Guidelines may be
revised from time to time, and any other applicable laws,
guidelines and regulations. If there should be a conflict
between the FDA and EEC standards, the more stringent of the two
shall apply. Aviron shall be responsible to advise PCI of cGMP
and other Agency requirements which shall apply to Primary and
Secondary Production conducted hereunder.
1.6 "Delivery Date" shall mean the date on which Product is
delivered to the carrier for shipment from PCI to Aviron
pursuant to Section 7.2.
1.7 "Facility" shall mean PCI's facility at [*] or other facility
that may be mutually agreed in writing by the Parties.
1.8 "Facility Reservation Agreement" shall mean that certain
agreement dated October 31, 1997 under which the Parties agreed
to construct and build-out the Aviron Area and reserve the
Aviron Area for Aviron.
1.9 "FDA" shall mean the United States Food and Drug Administration
and any successor agency having substantially the same function.
1.10 "Manufacture" shall mean the process of [*] Production.
1.11 "Materials" shall mean all components utilized in [*] Production
except for the Vaccine and Syringes.
1.12 "Michigan" shall mean the Regents of the University of Michigan,
a constitutional corporation of the State of Michigan with
offices located at Wolverine Tower, Room 2071, 0000 Xxxxx Xxxxx
Xxxxxx, Xxx Xxxxx, Xxxxxxxx, 00000-0000, XXX.
1.13 "Michigan Agreement" shall mean a certain Materials Transfer and
Intellectual Property Agreement between Aviron and Michigan
dated 24 February 1995.
1.14 "PCI Production Equipment" shall mean all of the [*] purchased
by PCI as set forth in Appendix 2, which may be amended from
time to time.
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2.
1.15 [ * ] Production" shall mean the [ * ] as set forth in Appendix
3.
1.16 "Product" shall mean the product which is the result of [*]
Production.
1.17 "Proprietary Information" shall have the meaning set forth in
Article 12.
1.18 "[ * ]" shall mean [ * ] as set forth in
Appendix 3.
1.19 "Specifications" shall mean the procedures, test results,
requirements, quality standards data and other documentation
with respect to Materials, Syringes, [*] Production,
[*] Production, Product, Production Equipment, and Vaccine
and Storage of the Vaccine and the Product to be determined by
the parties as set forth in Section 6.7, and, once completed, to
be appended hereto as Appendix 3, as may be amended from time to
time.
1.20 "Store" or "Storage" shall mean the storage of [ * ] as set
forth in the Specifications.
1.21 "Syringe" shall mean the unfilled syringe and holder supplied to
PCI by Aviron as set forth in the Specifications.
1.22 "Vaccine" shall mean the bulk cold-adapted multivalent influenza
vaccine provided to PCI by Aviron as set forth in the
Specifications.
2. FACILITY
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2.1 CONSTRUCTION AND RESERVATION OF AVIRON AREA. The Parties agree
to collaborate on the construction, build-out and reservation of
the Aviron Area pursuant to the Facility Reservation Agreement
attached as Appendix 4 hereto.
3. PRODUCTION EQUIPMENT
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3.1 INSTALLATION AND QUALIFICATION. Each Party will, at its sole
expense, provide, install in the Aviron Area and qualify its
respective Production Equipment in compliance with cGMP.
3.2 MAINTENANCE. PCI agrees to maintain and operate the Aviron and
PCI Production Equipment used, directly or indirectly, for
[ * ] Production, in all material respects, in accordance with
(i) cGMPs, (ii) applicable Agency requirements and (iii) the
Specifications. PCI shall be responsible for routine maintenance
in accordance with the equipment manufacturers' guidelines,
cGMPs and other applicable laws and regulations, and for other
repairs required as a result of the negligence or intentional
misconduct of PCI or its employees. Aviron shall bear all other
expenses incurred for the maintenance (other than routine
maintenance), repair and/or replacement, as needed of the Aviron
Production Equipment. For the purpose of this Agreement,
"routine
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maintenance" shall mean preventive maintenance as set forth in
the Specifications.
3.3 OWNERSHIP. Aviron shall at all times hold all right, title and
interest in the Aviron Production Equipment. PCI shall not, at
any time during the term of this Agreement, encumber the Aviron
Production Equipment. PCI shall at all times hold all right,
title and interest in the PCI Production Equipment. Aviron shall
not, at any time during the term of this Agreement, encumber the
PCI Production Equipment. Prior to the commencement of [ * ]
Production, each Party shall provide evidence to the other
Party's reasonable satisfaction indicating that Party's
Production Equipment is insured and that such insurance covers
the other Party (as an additional insured) for any loss or
damage to the other Party, or its property or employees, except
where such loss or damage is a result of the negligence or
intentional misconduct of the other Party or its employees.
4. SUPERVISION WITHIN THE AVIRON AREA
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4.1 AVIRON TECHNICAL REPRESENTATIVE. Aviron shall have the right to
have one or more representatives in the Aviron Area during
[ * ] Production to (i) review Production Equipment and [ * ]
Production, (ii) review any relevant records in connection with
such [ * ] Production and assess its compliance with cGMP and
quality assurance standards set forth in the Specifications and
(iii) discuss any related issues with PCI's management. Aviron's
technical representatives, when on-site, shall comply with PCI's
rules and regulations. Aviron shall indemnify and hold PCI and
its Affiliates harmless from all liability, including claims by
Aviron's technical representatives for workers' compensation,
resulting from the presence of Aviron's technical
representatives at the Facility except for claims resulting from
the negligent or willful misconduct on the part of PCI and its
employees.
4.2 RESPONSIBILITIES. Aviron's technical representative, if present,
shall not have responsibility for the supervision of PCI's
personnel conducting [ * ] Production. However, if at any time
Aviron's technical representatives feel that PCI is operating in
a manner inconsistent with this Agreement, he/she is to notify
PCI immediately to cease operations until such condition is
remedied. PCI will immediately cease operations and will not
recommence [ * ] Production operations without Aviron's
approval. PCI shall use its best efforts to remedy any such
condition and Aviron shall authorize PCI to resume [ * ]
Production upon reasonable satisfaction that such condition has
been remedied. Nothing herein shall amend or alter the status of
PCI as an independent contractor.
5. FORECAST, PURCHASE AND SUPPLY OF PRODUCT
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5.1 PURCHASE AND SUPPLY. During the term of this Agreement, Aviron
shall purchase and PCI shall supply such quantities of Product
as may be set forth on purchase orders placed by Aviron under
this Agreement. All purchases of Product hereunder shall be
governed by the terms of this Agreement which shall
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supersede any inconsistent provisions in any purchase order
delivered by Aviron to PCI.
5.2 FORECASTS. On or before September 30 and March 31 of each year
during the term of this Agreement, Aviron will provide PCI with
a written eighteen (18) month rolling forecast, to be updated in
six (6) month intervals, of the quantity of Product which Aviron
expects to require from PCI during each of the next eighteen
(18) months. The first six (6) months of the first such rolling
forecast shall be binding upon Aviron. Aviron's first forecast
shall include (i) the required Delivery Date for the binding
portion of the forecast and (ii) the quantity of Product to be
delivered.
5.3 ORDERS. Following the Effective Date, Aviron will provide PCI
with one or more purchase orders at six month intervals. Each
such purchase order will set forth (i) the quantity of Product
ordered for delivery during the six months after the date on
which the purchase order is deemed to be received, (ii) the
requested Delivery Date for such order, (iii) the quantity of
Product to be delivered to Aviron as a quality control sample,
(iv) the quantity of Product to be delivered on the Delivery
Date in each form of packaging and (v) the lot numbers to be
applied to such Product. Such purchase order shall be delivered
no later than ninety (90) days prior to the earliest requested
Delivery Date.
5.4 CONFIRMATION; ORDERS GREATER THAN FORECAST. Within fifteen (15)
days of receipt of any purchase order, PCI shall confirm in
writing such order and the Delivery Date therefor. PCI shall use
reasonable commercial efforts to supply the quantity of Product
ordered, regardless of the quantity forecast by Aviron, subject
to the capacity limitations of the Aviron and PCI Production
Equipment. In the event that PCI is unable to fill any order,
PCI shall so notify Aviron in its written confirmation.
5.5 AMENDMENT OF PURCHASE ORDERS. PCI will use best efforts to
accommodate a request to amend a purchase order to increase or
decrease the quantity of Product to be delivered.
5.6 CANCELLATIONS. Aviron may cancel any purchase order by providing
PCI written notice at least ninety (90) days prior to the
confirmed Delivery Date. In the event that Aviron cancels any
order for Product, Aviron shall reimburse PCI for non-
cancellable direct costs reasonably incurred by PCI in
connection with performance of such purchase order up to the
time of receipt of such notice.
5.7 SUPPLY COMMITMENTS. Subject to the limitations set forth in
Section 5.4, PCI represents and warrants that it has the ability
to, and hereby covenants that it will, supply the quantity of
Product ordered by Aviron.
5.8 LIMITED WARRANTY. PCI WARRANTS THAT PRODUCT DELIVERED HEREUNDER
WILL (i) BE MANUFACTURED BY PCI IN ACCORDANCE WITH cGMP AND
OTHER APPLICABLE FEDERAL, STATE AND LOCAL LAWS AND REGULATIONS,
INCLUDING BUT NOT LIMITED TO FDA REGULATIONS, (ii) BE
MANUFACTURED IN ACCORDANCE WITH THE SPECIFICATIONS AND
5.
(iii) CONFORM TO THE APPLICABLE SPECIFICATIONS, AS THEN IN
EFFECT, AS OF THE DELIVERY DATE. EXCEPT AS SET FORTH HEREIN, PCI
MAKES NO WARRANTIES, EXPRESS OR IMPLIED, CONCERNING THE
PRODUCTS, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR ANY PARTICULAR PURPOSE.
6. SUPPLY AND PROCESSING OF VACCINE, SYRINGES, HOLDERS AND MATERIALS
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6.1 LICENSE; INVENTIONS. (a) Aviron hereby grants to PCI, during the
term of this Agreement, a non-exclusive, non-transferable,
royalty-free license during the term of this Agreement to use
the data, information and technology provided by Aviron related
to the Vaccine for the limited purpose of assisting PCI in
carrying out its obligations set forth in this Agreement. (b)
PCI agrees that any and all ideas, improvements, inventions and
works of authorship conceived, written or first reduced to
practice in the performance of this Agreement whether by PCI's
employees alone or in conjunction with Aviron, that are related
to the Vaccine or [ * ] Production (the "Aviron Inventions")
shall be the sole and exclusive property of Aviron and PCI
hereby assigns to Aviron all right, title and interest in and to
any and all such Aviron Inventions. (c) Aviron agrees that any
and all ideas, improvements, inventions and works of authorship
conceived, written or first reduced to practice in the
performance of this Agreement that are related to [ * ]
Production (the "PCI Inventions") shall be the sole and
exclusive property of PCI and Aviron assigns all right, title
and interest in and to any and all such PCI Inventions. PCI
hereby grants to Aviron a non-exclusive, worldwide, royalty-free
license to use and practice such PCI Inventions for the
manufacture, by or for Aviron of any of Aviron's products. Such
license shall survive the termination or expiration of this
Agreement.
6.2 SUPPLY OF VACCINE AND SYRINGES. Aviron shall, at Aviron's
expense, deliver or cause to be delivered, sufficient quantities
of Vaccine and Syringes meeting the Specifications to the
Facility such that PCI can fill purchase orders for the
Manufacture of the Product submitted pursuant to Section 5.3.
6.3 RISK OF LOSS OF VACCINE AND SYRINGE. PCI shall bear all risk of
loss for Vaccine and Syringes delivered to PCI under Section 6.2
which results from PCI's failure to comply with the
Specifications or from the negligence or intentional misconduct
of PCI or its employees. If, for any purpose under this
Agreement, PCI is required to obtain Vaccine or Syringes from
Aviron at PCI's expense, Aviron's charges to PCI for such
Vaccine or Syringes will be equal to Aviron's direct costs to
deliver such Vaccine or Syringes to PCI.
6.4 SUPPLY OF MATERIALS. Unless otherwise notified by Aviron, PCI
shall purchase all Materials, including but not limited to those
set forth in the Specifications, required to complete the
[ * ] Production of the Product. PCI shall provide Aviron
with a monthly inventory of all Vaccine, Syringes and Materials.
Detailed Material usage reports will be provided to Aviron by
PCI each month. In the event Aviron desires to obtain the
Materials from sources other than PCI, it shall have the right
to do so, at its own expense, provided Aviron notifies PCI
ninety
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(90) days in advance. In the event Aviron purchases such
Materials itself, the price for Product shall be adjusted as set
forth in Section 13.
6.5 LABELS AND [ * ] PRODUCTION.
(a) Thirty (30) days prior to the intended date of
commencement of commercial production, Aviron shall
provide PCI with: (i) any particular Specifications it
may have with respect to labels and packaging materials
and (ii) camera-ready artwork for reproduction on the
labels, package inserts and packaging materials. Such
information shall include, but need not be limited to,
the quality, weight and color of the packaging materials
and labels, the type and colors of ink to be used in
printing the labels or packaging materials and any
special requirements for the labels or packaging for the
Product to be delivered to specific countries. The
method to assign lot numbers will be set forth in the
Specifications.
(b) PCI shall reproduce the artwork on the labels, packages
inserts and packaging materials and imprint the
appropriate lot number on each individual unit and each
carton of Product in accordance with the lot numbers
designated on the applicable purchase order. PCI shall
conduct all [ * ] Production in accordance with the
Specifications and the applicable purchase order (to the
extent not inconsistent with the Specifications).
(c) In the event that Aviron desires to change any label,
packaging insert or packaging Material for all or any
portion of the Product, Aviron shall supply PCI with new
camera-ready artwork and work with PCI to promptly
coordinate the use of such new artwork into [ * ]
Production process. In such event, Aviron shall purchase
from PCI, at a price equal to PCI's cost, all Materials
in PCI's inventory made obsolete by such changes.
6.6 [ * ] PRODUCTION OF PRODUCT.
(a) PCI shall conduct [ * ] Production of the Vaccine in
accordance with the Specifications and applicable
federal, state and local laws and regulations
including, without limitation, cGMP. PCI shall notify
Aviron of any difficulty in meeting Specifications or
any deviation therefrom as soon as reasonably possible.
PCI shall not conduct [ * ] Production nor Store
Materials or Product at any other location other than
the Facility without the prior written approval of
Aviron. Before, during and after [ * ] Production of
each batch of Vaccine, PCI shall monitor the
Manufacturing environment and keep such records as all
of the foregoing are required by the Specifications and
cGMP. Both Parties shall promptly notify the other of
any new instructions or specifications required by the
FDA or the United States Federal Food, Drug and Cosmetic
Act, and of other applicable rules and regulations, and
shall confer with each other with respect to the best
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means to comply with such requirements and shall [ * ]
of implementing such changes on an [ * ]
(b) The Parties agree that it is their intention to identify
ways in which to enhance efficiencies in the [ * ]
Production and the [ * ] Production and so reduce
production costs ("Cost Reduction Measures") In the
event PCI expends amounts in undertaking Cost Reduction
Measures, including, for example, the purchasing of
additional production equipment and provided such costs
are agreed upon in advance by the parties in writing,
Aviron shall reimburse PCI for such amounts. Any
additional equipment paid for by Aviron under this
Section 6.6(b) shall be deemed Aviron Equipment.
6.7 PRODUCT SPECIFICATIONS; TESTING.
(a) The Parties agree and acknowledge that the
Specifications will be developed and defined by Aviron
after the Effective Date and following validation and
qualification, subject to input, review and approval by
PCI. Each Party agrees to act in good faith in defining
and finalizing the Specifications. Once finalized, the
Specifications will be appended to this Agreement as
Appendix 3. The Parties further agree and acknowledge
that the final piece price to be charged Aviron for the
Product under Section 13.1. can be determined only after
the final Specifications have been agreed upon. The
Parties acknowledge that, once agreed upon, the
Specifications set forth in Appendix 3 may need to be
refined and modified as the Parties gain experience with
[ * ] Production, testing and use of Product.
Accordingly, the Parties agree to negotiate in good
faith to modify Appendix 3 from time to time as the
Parties' experience with Primary and Secondary
Production, testing and use of Product warrant; and PCI
further agrees that it will facilitate changes to
Appendix 3 that are necessary or appropriate in light of
FDA or other regulatory requirements. The Parties agree
to allocate on an equitable basis any special costs of
developing and implementing revised procedures.
(b) Product supplied hereunder will conform to the
Specifications, and such conformance will be verified in
accordance with the testing standards and procedures
specified therein. PCI will forward a sample of each
batch of Product to Aviron for testing and supply Aviron
with a certificate of analysis ("Certificate of
Analysis") confirming that such Product meets the
Specifications.
6.8 FDA AND REGULATORY SUPPORT.
(a) PCI agrees to establish and maintain a Drug Master File
("DMF") in accordance with the requirements of the FDA,
as well as any comparable files required by other
Agencies, and to provide Aviron with letters of access
to the DMF, any other comparable files and documents
regarding its [ * ] Production. Aviron shall have sole
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responsibility for obtaining from any
Agency all permits and/or licenses necessary or required
for the sale, marketing or commercialization of Product.
Aviron shall be responsible for all other filings
necessary for approval and import of Product into
countries outside the United States. PCI further agrees
to use reasonable commercial efforts to assist Aviron in
obtaining any government or Agency approval which may be
required for the marketing of Product in any country.
Aviron shall provide PCI with written notice of any
additional regulatory requirements of countries other
than the United States that relate to [ * ] Production
of Product. PCI shall use its reasonable commercial
efforts to comply with such additional requirements and
shall provide Aviron with prompt written notice of
whether it is able to do so. PCI will provide Aviron
copies of all supporting documentation in PCI's
possession required for FDA licensing of the Product.
Aviron will hold the FDA and any other Agency license(s)
for the Product.
(b) Upon request, PCI shall allow the Aviron Area and the
Facility to be inspected by FDA or other Agency
officials. In the event that the Aviron Area is audited
or inspected by an Agency, PCI will provide Aviron with
prompt written notice of such audit. PCI will also
promptly provide Aviron with copies of any
correspondence or reports relating to such audit or
inspection.
6.9 cGMP COMPLIANCE AND QA AUDITS. Within ten days of Aviron's
written request, PCI shall supply Aviron with copies of PCI's
manufacturing records, including its batch records, for the
purposes of assuring product quality and compliance with the
Specifications. Any found discrepancies, other than
discrepancies resulting from directions received from Aviron or
its representatives, will be reported to PCI and PCI will within
30 days correct said discrepancies to Aviron's reasonable
satisfaction. Failure to do so will give Aviron the right to
terminate the Agreement pursuant to Section 10.5. Aviron's
failure to exercise its right to audit PCI's Facility will not
represent a waiver of any future exercise of this right or of
any other rights under this Agreement, nor does it represent
acceptance of any conditions past or present that might exist or
result from such conditions at the Facility. Aviron acknowledges
that all copies of PCI's manufacturing records shall be subject
to the confidentiality provisions of Article 12.
6.10 COMPLIANCE WITH LAWS. PCI shall comply with all applicable
present and future orders, regulations, requirements and laws of
any and all applicable, federal, state, and local authorities
and Agencies, including without limitation all laws and
regulations of applicable to the transportation, storage, use,
handling and disposal of hazardous materials. PCI represents and
warrants to Aviron that it has and will maintain during the term
of this Agreement all government permits, including without
limitation health, safety and environmental permits, necessary
for the conduct of the actions and procedures that it undertakes
pursuant to this Agreement.
6.11 DOCUMENTATION. PCI shall keep, for a period of [ * ], complete,
accurate and authentic accounts, notes, data and records of the
work performed
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under this Agreement. Each Party shall maintain complete and
adequate records pertaining to the methods and Facility used for
[ * ] Production, testing, and distribution of Product in
accordance with the Specifications, cGMP, Michigan Agreement and
other applicable laws and regulations.
6.12 REWORK. PCI shall not rework any batch of Product without
Aviron's prior written consent, which consent shall not be
unreasonably withheld.
6.13 SAMPLES. PCI shall retain quantities of samples of Product in
accordance with cGMP. Within ten (10) days following Aviron's
written request, PCI shall provide Aviron, at Aviron's expense,
with up to one-half the original amount of the retained samples.
6.14 STORAGE AND HANDLING. PCI shall Store and handle Materials,
Syringes, Vaccine and Product as required by the Specifications.
6.15 CORRECTIVE ACTION. In the event any Agency shall request or
order, or if Aviron shall determine to undertake, any corrective
action with respect to Products supplied hereunder, including
any Product recall, customer notice, restriction, change,
corrective action or market action, and the cause or basis for
such corrective action results from the material breach by PCI
of Section 5.8, then PCI shall replace and reship only the
lot(s) of Products which are subject to such corrective action.
PCI shall pay all costs incurred in replacing such Product,
including the Vaccine, Syringes, Materials and shipping costs,
subject to the limitations set forth in Section 9.2. Any costs
resulting from corrective actions for any other cause, including
but not limited to the Specifications or product tampering after
the Products have been shipped from PCI's Facility, shall be the
sole responsibility of Aviron. Aviron shall promptly notify PCI
in writing upon the occurrence of any such corrective action
(or, to the extent practicable, not less than ten days prior
thereto).
7. DELIVERY AND ACCEPTANCE OF FINISHED PRODUCT
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7.1 QUALITY CONTROL SAMPLE OF PRODUCT. Prior to the delivery of any
batch of Product, PCI shall provide Aviron with (i) a quality
control sample of such batch for the purpose of confirming that
such batch meets the Specifications, (ii) a copy of the batch
records for such batch, together with written confirmation that
such batch records have been reviewed and approved by PCI's
quality assurance unit and (iii) a Certificate of Analysis. The
quality control sample shall consist of the number of individual
Product units specified in the relevant purchase order delivered
pursuant to Section 5.3 above. No delivery of Product shall be
deemed to have been made until Aviron accepts or is deemed to
have accepted the quality-control sample and associated
documentation in accordance with the Specifications and Section
7.3.
7.2 DELIVERY OF PRODUCT. All deliveries shall be shipped [ * ],
unless otherwise agreed upon by PCI and Aviron in a particular
purchase order. [ * ]
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shall be responsible for [ * ] and [ * ] and shall [ * ] of
[ *] of the Product [ * ] of [ * ] to [ * ].
7.3 ACCEPTANCE AND REJECTION OF PRODUCT.
(a) Aviron may reject any quality control sample or batch
delivery which does not conform with the Specifications
or with applicable documentation or other requirements.
Any such notice of rejection shall be in writing and
shall indicate the reasons for such rejection.
(b) In order to reject or put on hold delivery of Product
based on testing of a quality control sample, Aviron
must give written notice to PCI of Aviron's rejection of
any delivery within (i) [ * ], or (ii) [ * ] after
receipt of the applicable quality control sample,
whichever is later (the "Acceptance Period"). If no such
notice of rejection/hold is received during such time
period, Aviron shall be deemed to have accepted such
quality control sample upon the expiration of the
Acceptance Period, and PCI shall be authorized to make
delivery of the Product.
(c) After notice of rejection/hold is given, Aviron shall
cooperate with PCI in determining whether rejection is
necessary or justified and, in situations in which the
type of damage so warrants, provide PCI with the
allegedly non-conforming Product for PCI evaluation. PCI
will evaluate the cause for such non-compliance. PCI
shall notify Aviron as promptly as reasonably possible
whether it accepts Aviron's basis for any rejection. If
PCI disagrees with Aviron's determination that certain
Product does not meet the Specifications, [ * ]. Whether
or not PCI accepts Aviron's basis for rejection,
promptly on receipt of a notice of rejection/hold of
Product, PCI shall use reasonable commercial efforts at
Aviron's request to replace such rejected Product. [ * ]
shall bear the expenses of such replacement. If [ * ],
Aviron guarantees to purchase that Product and any
replacement Product which PCI has delivered to Aviron at
the price set forth in Section 13.1. [ * ].
7.4 DESTRUCTION OF PRODUCT. Neither Party may destroy any Product
alleged not to meet Specifications until [ * ]. Thereafter, upon
Aviron's written request, PCI shall return to Aviron or promptly
destroy any rejected Product. The Party determined [ * ]
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[ * ] shall bear all costs for such return or destruction. In
the event PCI destroys such Product, PCI shall provide Aviron
with certification of such destruction.
7.5 REPLACEMENT PRODUCT. In the event that PCI bears responsibility
for the failure of Product, promptly following the rejection of
any Product, Aviron shall, at PCI's expense, deliver sufficient
quantities of Vaccine and Syringes to the Facility in order for
PCI to comply with Section 7.3(c). In accordance with the terms
of Section 6.6 and 6.7, PCI shall Manufacture enough Product to
deliver to Aviron the amount of Product originally ordered for
the rejected delivery and shall do so as promptly as technically
feasible.
8. REPRESENTATIONS AND WARRANTIES
------------------------------
8.1 EXISTENCE AND POWER. Each Party hereby represents and warrants
to the other Party that such Party (i) is duly organized,
validly existing and in good standing under the laws of the
state in which it is organized, (ii) has the power and authority
and the legal right to own and operate its property and assets,
and to carry on its business as it is now being conducted, and
(iii) is in compliance with all requirements of applicable law,
except to the extent that any noncompliance would not materially
adversely affect such party's ability to perform its obligations
under the Agreement.
8.2 AUTHORIZATION AND ENFORCEMENT OF OBLIGATIONS. Each Party hereby
represents and warrants to the other Party that such Party (i)
has the power and authority and the legal right to enter into
the Agreement and to perform its obligations hereunder and
thereunder and (ii) has taken all necessary action on its part
to authorize the execution and delivery of the Agreement and the
performance of its obligations hereunder. The Agreement has been
duly executed and delivered on behalf of such Party, and
constitutes a legal, valid, binding obligation, enforceable
against such Party in accordance with its terms.
8.3 NO CONSENTS. Each Party hereby represents and warrants to the
other Party that all necessary consents, approvals and
authorizations of all Agencies and other persons required to be
obtained by such Party in connection with the Agreement have
been obtained.
8.4 NO CONFLICT. Each Party hereby represents and warrants to the
other Party that the execution and delivery of the Agreement and
the performance of such party's obligations hereunder and
thereunder (i) does not conflict with or violate any requirement
of applicable laws or regulations or any material contractual
obligation of such Party and (ii) does not materially conflict
with, or constitute a material default or require any consent
under, any material contractual obligation of such Party.
8.5 NON-DEBARMENT. PCI represents and warrants that PCI is not and
does not, to the best of its knowledge, use in any capacity the
services of any person barred by an applicable Agency
(including, but not limited to, the FDA) from providing such
services. PCI covenants it will not in the performance of its
obligations
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THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
12.
hereunder use in any capacity the services of any person that it
knows is barred by an applicable Agency and will immediately
disclose in writing to Aviron promptly, before it becomes aware
of any person who is performing services hereunder is so barred
or if any action, suit, claim, investigation or legal or
administrative proceeding is pending or, to the best of PCI's
knowledge, threatened, relating to the debarment of PCI or any
person performing services hereunder by any applicable Agency.
9. INDEMNIFICATION
---------------
9.1 INDEMNITY.
(a) Except to the extent that claims, suits, losses,
damages, costs, fees or expenses arise or result from
any negligent or wrongful act or omission of PCI or
PCI's breach of Section 5.8, Article 8, or Article 15,
Aviron agrees to indemnify, hold harmless and defend PCI
and PCI's directors, officers, employees and agents, and
the directors, officers, employees and agents of any PCI
parent, subsidiary or related company (the "PCI
Indemnitees") from and against any and all claims,
suits, losses, damages, costs, fees and expenses
resulting from or arising out of the development,
creation, sale, distribution, possession or use of
Product by any person, or asserted by or on behalf of
[*] against the PCI Indemnitees, including without
limiting the generality of the foregoing any damages,
losses or liabilities whatsoever with respect to death
or injury to person or damage to property.
(b) To the extent that such claims, suits, losses, damages,
costs, fees or expenses arise or result from any
negligent or wrongful act or omission of PCI or the
breach by PCI of Section 5.8, Article 8 or Article 15,
PCI agrees to indemnify, hold harmless and defend Aviron
and Aviron's directors, officers, employees and agents,
and the directors, officers, employees and agents of any
Aviron parent, subsidiary or related company (the
"Aviron Indemnitees") from and against any and all
claims, suits, losses, damages, costs, fees and expenses
resulting from or arising out of [ * ], including
without limiting the generality of the foregoing any
damages, losses or liabilities whatsoever with respect
to death or injury to person or damage to property.
9.2 LIMITATION OF LIABILITY.
(a) Notwithstanding anything to the contrary in this
Agreement, PCI's liability (individually or in the
aggregate) under this Agreement or in any manner arising
out of this Agreement or its Manufacture, Storage, use
or handling of the Product shall be limited as set forth
in this Section 9.2(a) and Section 9.2(b). PCI's
liability shall not exceed the lesser of (i) the sum of
the [*] of this Agreement, plus the [*] during the
twelve (12) months immediately preceding the event which
resulted in such liability; and (ii) either (A) [*]
where the liability results from a claim arising out of
or resulting from [*] or a reason other than PCI's
negligence in conducting the [*] and (B) [*] where the
liability results from a claim arising out of or
resulting from PCI's negligence in the conduct of the
[*] (including storage of the Product).
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13.
(b) In the case where two claims are made, one based upon
the [ * ] Production (or upon other than negligence in
PCI's conduct of the [ * ] Production) and another based
upon PCI's negligence in the conduct of the [ * ]
Production, whether contemporaneously or serially, the
limitation on aggregate liability under this Agreement
shall be the lesser of (i) the sum of the [*] of this
Agreement, plus the [*] during the twelve (12) months
immediately preceding each of the two events which
resulted in such liability; and (ii) [*].
(c) IN NO EVENT SHALL EITHER AVIRON OR PCI BE LIABLE TO THE
OTHER FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL LOSS,
DAMAGE, COSTS OR EXPENSES OF ANY NATURE WHATSOEVER,
INCLUDING, WITHOUT LIMITATION, LOST REVENUES OR PROFITS.
9.3 NOTICE AND PAYMENT.
(a) Promptly after acquiring knowledge of any damage, loss,
deficiency, liability, encumbrances, penalty, cost,
expense, action, suit, investigation, proceeding,
assessment, audit, judgment, or claim against which
Aviron or PCI must indemnify the other pursuant to
Section 9.1 (the "Indemnifying Party"), the Indemnified
Party shall give to the Indemnifying Party written
notice thereof, specifying the nature of the claim for
indemnity (the "Claim Notice"); provided, however, that
the delay or failure to give a Claim Notice shall not be
a bar to indemnification hereunder, except and to the
extent that the indemnifying Party is materially
prejudiced by the delay or failure to give such Claim
Notice.
(b) With respect to any claim, action, suit, investigation,
proceedings, demand, assessment or audit brought by a
Third Party ("Third Party Matter"), the Indemnifying
Party shall have the right, at its own expense, to
contest and defend against or attempt to settle or
compromise (subject to the limitations set forth below),
such Third Party Matter and any damages, losses,
deficiencies, liabilities, encumbrances, penalties,
costs, expenses and assessments ("Damages") resulting
therefrom. If the Indemnifying Party so elects, such
defense shall be instituted promptly and the
Indemnifying Party shall receive from the Indemnified
Party all necessary and reasonable cooperation in said
defense. If the
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14.
Indemnifying Party is successful in respect of any
counterclaim asserted by it in defending a Third Party
Matter, any sums recovered shall first be applied to
reimburse the Indemnifying Party for its reasonable out-
of-pocket expenses in connection therewith, and any sums
in excess of such amount shall be paid to the
Indemnified Party.
(c) In the event that an Indemnifying Party, after written
notice from the Indemnified Party, elects not to defend
the same or fails to so notify the Indemnified Party
within thirty (30) days of the giving of the Claim
Notice, the Indemnifying Party shall be deemed to have
elected not to defend and if the Indemnified Party
elects to contest and defend against such claim, it
shall have the right to do so with counsel of its own
choosing, at the cost and expense of the Indemnifying
Party.
(d) Neither the Indemnified Party nor the Indemnifying Party
shall have the right to settle, compromise or make
payment with respect to any claim, demand, or litigation
without the written consent of the other party, except
that the Indemnified Party shall have the right to
settle, compromise or make payment with respect to any
claim, demand, or litigation against it without such
consent if it has given a Claim Notice to the
Indemnifying Party, and (i) the Indemnifying Party has
elected, or shall be deemed to have elected, not to
defend the same or (ii) the Indemnifying Party fails to
promptly attempt to settle or compromise the claim.
9.4 PCI INSURANCE. Throughout the term of this Agreement and for
five (5) years thereafter, PCI shall maintain the following
minimum insurance coverage with insurance carriers reasonably
acceptable to Aviron:
(a) Comprehensive General Liability in the amount of at
least five million dollars ($5,000,000) combined single
limit, including contractual coverage for bodily injury
and property damage, which shall name Aviron as an
additional insured and may not be canceled by PCI or its
insurer without, ten (10) days prior written notice to
Aviron; and
(b) Worker's Compensation Insurance to the full extent
required by applicable state law.
9.5 AVIRON INSURANCE. Aviron shall purchase and maintain, during the
term of this Agreement and for a period of five (5) years
thereafter, at its own cost, liability insurance coverage in an
amount of at least five million dollars ($5,000,000) and
worker's compensation insurance coverage in amounts required
pursuant to applicable state laws, from an insurer reasonably
acceptable to PCI to cover liabilities which may arise under
this Agreement, which insurance shall name PCI as an additional
insured and may not be canceled by Aviron or its insurer without
ten (10) days prior written notice to PCI.
15.
10. TERM AND TERMINATION
--------------------
10.1 Unless earlier terminated as provided herein, the term of this
Agreement is seven (7) years and shall begin on October 31, 1997
and shall continue through October 31, 2004. The term of this
Agreement may be extended by the mutual written agreement of the
Parties.
10.2 Aviron may terminate this Agreement at any time upon twelve (12)
months prior written notice to PCI; provided, however that in
the event that Aviron terminates because it desires to undertake
[ * ] at Aviron's own facility, Aviron shall provide PCI with
twenty-four (24) months prior written notice of termination of
this Agreement.
10.3 Any time following September 30, 2002, PCI may deliver to Aviron
written notice of PCI's intention to terminate this Agreement
and not to renew, such termination to be effective twenty-four
(24) months following receipt of such notice.
10.4 Either Party shall have the right to immediately terminate this
Agreement if the other Party files a petition in bankruptcy, or
enters into an agreement with its creditors, or applies for or
consents to the appointment of a receiver or trustee, or makes
an assignment for the benefit of creditors, or suffers or
permits the entry of an order adjudicating it to be bankrupt or
insolvent, provided that such bankruptcy is not discharged
within thirty (30) days.
10.5 If either Party materially breaches any of the provisions of
this Agreement and such breach is not cured within thirty (30)
days after the giving of written notice, the Party claiming the
breach shall have the right to terminate this Agreement.
10.6 Either Party may terminate this Agreement upon ninety (90) days
written notice and without penalty in the event of failure to
obtain FDA approval for the Product in the United States or any
license, permit or certificate required by any governmental or
regulatory agency is not approved and/or issued by any
applicable Agency, provided that such other party may no longer
appeal such decision, reapply or otherwise pursue such permit,
license or certificate.
10.7 In the event of expiration or termination of this Agreement, (i)
Aviron shall pay for all completed Product whether or not Aviron
takes delivery of such Product, (ii) Aviron shall bear no
responsibility for the payment of any [*] not completed prior to
termination of this Agreement, (iii) PCI shall promptly, at
Aviron's request and expense, destroy or return to a location to
be specified by Aviron, any remaining inventory of Vaccine,
Syringes, Materials and Product to Aviron, unless such
termination shall have been as a result of termination or a
breach of this Agreement by PCI, in which case such Vaccine,
Syringes and Materials shall be returned or destroyed at PCI's
expense, and Aviron shall reimburse PCI for the cost of all
Materials so returned, (iv) each Party shall promptly return all
Proprietary Information (as described in Article 12) to the
disclosing Party, and (v) Aviron shall remove the Aviron
Production Equipment from the Aviron Area in accordance with the
Facility Reservation Agreement. If Aviron fails to remove the
Aviron Production Equipment and make such repairs, PCI may do
so, and Aviron shall, within 10 days after receipt of evidence
thereof, reimburse PCI in full for all reasonable expenses
incurred by PCI in connection with such removal and restoration.
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16.
10.8 Termination of this Agreement shall not affect any rights or
claims of either Party that accrued prior to the date of such
termination. The rights and obligations of each of the Parties
under the provisions of Sections 6.8, 6.9, 6.11, 6.13, 6.15,
10.7, 10.8, 13.3, and Articles 9, 11 and 12 shall survive the
termination or expiration of this Agreement for any reason.
10.9 Upon termination of this Agreement, the Facility Reservation
Agreement shall terminate, and the consequences of such
termination shall be as set forth in Section 10 of that
agreement.
11. DISPUTE RESOLUTION
------------------
11.1 Any controversy, claim, or dispute (the "Dispute") between the
Parties arising out of or relating to this Agreement, or the
breach thereof, shall be submitted to the chief executive
officer of PCI and the Chief Executive Officer of Aviron for
twenty (20) days for resolution. If the Dispute has not been
resolved in such period, the Dispute shall be resolved through
arbitration before three (3) arbitrators. Such arbitration shall
take place in Philadelphia and shall proceed in accordance with
the Commercial Arbitration Rules of the American Arbitration
Association (Commercial Rules) and the laws of Pennsylvania
without regard to the provisions thereof concerning conflict of
laws. Within thirty (30) calendar days of either Party making a
demand for arbitration, Aviron and PCI shall each select one (1)
arbitrator. A third arbitrator shall be selected by the
arbitrators selected by the Parties within ninety (90) days of
the demand for arbitration. In the event that either Party shall
fail to appoint its arbitrator, or the two arbitrators selected
by the Parties fail to appoint the third arbitrator, in either
case within the prescribed time period, then either Party may
apply to the American Arbitration Association for the
appointment of such arbitrator. The determination of a majority
of the panel of arbitrators shall be the decision of the
arbitrators and shall be binding regardless of whether one of
the Parties fails or refuses to participate in the arbitration;
said determination shall be enforceable by any court of
competent jurisdiction. Each Party shall [ * ] for the
arbitrator it selects with the cost of the third arbitrator
being divided equally between the Parties. All other costs
related to the arbitration shall be borne by the Party incurring
such costs, unless otherwise agreed to by the Parties.
12. CONFIDENTIALITY
---------------
12.1 DEFINITION. As used in this Agreement, the term "Proprietary
Information" shall mean any information, either enabling or
disabling, including the terms of this Agreement, any batch
record, any purchase order or other commercial relationship
between the Parties, know-how, trade secrets, research, data,
process, technique, algorithm, program, design, drawing,
formula, experimental design or test data relating to any
research project, work in process, future development,
scientific, manufacturing, marketing, business plan, financial
or
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17.
personnel matter relating to the disclosing Party (the
"Disclosing Party"), its present or future products, sales,
suppliers, customers, employees, investors or business, whether
in oral, written, graphic or electronic form and whether
received from the Disclosing Party or a third party. The term
"Proprietary Information" shall include, without limitation, (i)
any cost information related to the manufacture of Product, and
(iii) the Specifications for Product, each of which has
previously been disclosed to PCI.
12.2 OBLIGATION. During the term of this Agreement and for a period
of [ * ] thereafter, the receiving Party (the "Receiving Party")
shall maintain in confidence all Proprietary Information, as
defined in Section 12.1 above, and shall not use, disclose or
grant use of such Proprietary Information except as expressly
authorized by this Agreement. The Receiving Party may disclose
Proprietary Information, as authorized hereunder, only to those
employees, agents or consultants of the Receiving Party
reasonably requiring access. The Receiving Party shall use the
standard of care which is practical to ensure that such
employees do not disclose or make any unauthorized use of
Proprietary Information. The Receiving Party shall promptly
notify the Disclosing Party upon discovery of any unauthorized
use of disclosure of Proprietary Information.
12.3 EXCLUSIONS. The term "Proprietary Information" shall not be
deemed to include information which the Receiving Party can
demonstrate by competent written proof (i) is now, or hereafter
becomes, through no act or failure to act on the part of the
Receiving Party, generally known or available, (ii) is known by
the Receiving Party at the time of receiving such information as
evidenced by its records, (iii) is hereafter furnished to the
Receiving Party by a third party, as a matter of right and
without restriction on disclosure, or (iv) is the subject of a
written permission to disclose provided by the Disclosing Party.
Further, the obligations of confidentiality under this Article
12 shall not apply to the extent that the Receiving Party is
required to disclose Proprietary Information in support of
applying for, obtaining or maintaining a product approval or
other filings with, by an order or regulation of, an Agency or
in the course of litigation or other legal or administrative
proceedings, provided that in all cases the Receiving Party
shall to the extent permitted give the other Party prompt notice
of the pending disclosure and shall cooperate in such other
party's attempts, at such other party's sole expense, to seek an
order maintaining the confidentiality of the Proprietary
Information.
13. FEES & PAYMENT TERMS
--------------------
13.1 PRODUCT PRICING.
(a) The definitive piece price per unit of Product shall be
comprised of the following components: (i) [ * ]; (ii)
[ * ] and (iii) [ * ]
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18.
[ * ]. An example of the pricing for 20 million units of
Product, incorporating the price components set forth
above, is set forth on Appendix 5. In the event Aviron
purchases itself any Materials, the Materials Unit Cost
attributable to such Materials shall be deducted from
the price per unit charged by PCI. The Parties agree
that where the number of units manufactured in a twelve
(12) month period is less than 5 million, the [ * ]
shall be at a rate mutually agreed upon by the Parties
at such time.
(b) The Parties agree and acknowledge that the [ * ] Rate,
the [ * ] and the [ * ] shall remain in effect with
respect to all Product ordered and shipped prior to
[ * ]. After such date such cost factors are subject to
annual upward or downward adjustment in accordance with
the Product Price Index for Pharmaceutical preparations,
S.I.C. Code Number 2834.
(c) The price for Product shall be invoiced to Aviron within
[ * ] after completion of the [ * ] of such Product, net
[ * ]. In the event Aviron rejects Product pursuant to
Section 7.3, any such amount paid by Aviron for such
rejected Product shall be credited to Aviron's account
immediately.
13.2 All amounts due hereunder shall be paid to PCI in U.S. dollars
by check or wire transfer per PCI's instructions. Failure by
Aviron to make a payment when due shall be deemed to be a
material breach for purposes of Section 10.5.
13.3 PCI shall keep accurate records in sufficient detail to permit
the determination of all invoices and fees payable, credits due,
and units of Product packaged hereunder and, within ten (10)
days following a request by Aviron shall permit either Aviron or
its agents, to examine during ordinary business hours such
records for the purpose of verifying the correctness of any such
invoices, fees, credits and units.
13.4 The cost of employee training on the Parties' Production
Equipment, as defined and determined by [ * ], during the
validation phase will be charged to [ * ] at a rate of $[ * ]
per hour up to a total number of hours to be agreed upon by the
Parties. After [ * ] begins, on-going employee training will be
at [ * ] expense.
14. GENERAL
-------
14.1 INTERPRETATION. The construction, validity, and performance of
this Agreement shall be governed in all respects by the laws of
Pennsylvania, exclusive of its conflict-of-law provisions. This
Agreement was negotiated by sophisticated parties at arms'
length and neither party shall be construed as the drafting
party against which the Agreement could be construed.
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OMITTED PORTIONS.
19.
14.2 FORCE MAJEURE. Failure or omission by either Party hereto in the
performance of any obligation of this Agreement (other than
obligations to pay amounts due hereunder) shall not be deemed a
breach of this Agreement and shall not create any liability if
the same shall arise from any cause or causes beyond the
reasonable control of such Party, including, but not limited to,
(other than the failure or refusal of the FDA to approve the
Product for sale), fire, storm, flood, earthquake, accident,
acts of the public enemy, war, rebellion, insurrection, riot,
and invasion. In the event of Force Majeure, the Party affected
shall promptly notify the other Party, and shall use reasonable
commercial efforts to eliminate, cure or overcome such event and
to resume performance of its obligation hereunder.
Notwithstanding the foregoing, should any event of force majeure
as defined above prevent the Parties from performing the
Agreement for a period exceeding three (3) months, the non-
affected Party shall have the right to terminate this Agreement
without further notice. It is expressly agreed by the Parties
that strikes, lockouts and other labor problems shall not be
deemed incidences of Force Majeure.
14.3 NOTICES. Any notice or consent required to be given by either
Party shall be given in writing addressed to the Party for whom
it is intended at the address set forth in the preamble to this
Agreement, or such other address as such Party may designate in
writing, and sent by overnight courier or certified mail, return
receipt requested, or confirmed facsimile. Such facsimile to be
sent to (000) 000-0000 in the case of PCI and (000) 000-0000 in
the case of Aviron.
14.4 WAIVER. The failure on the part of any Party to exercise or
enforce any rights conferred upon it hereunder shall not be
deemed to be a waiver of any such rights nor operate to bar the
exercise or enforcement thereof at any time or times thereafter.
14.5 ASSIGNABILITY. Neither Party may assign this Agreement or any
rights granted hereunder in whole or in part (other than a
transaction involving or between PCI and Cardinal Health, Inc.
or other subsidiaries or divisions of Cardinal Health, Inc.,
provided such assignee is an Affiliate of Cardinal Health, Inc.)
without the prior written consent of the other Party, except
either Party may assign this Agreement in whole or in part to
one of its Affiliates or to the successor(s) to or assignee(s)
of all or substantially all of the part of its business to which
this Agreement relates. The Parties agree that any change of
ownership or control of either Aviron or PCI shall not affect
the Parties' rights and obligations under this Agreement.
14.6 ENTIRE AGREEMENT. This Agreement and the Schedules, Exhibits and
Appendices hereto, constitute the entire agreement between the
Parties concerning the subject matter hereof and supersede all
prior agreements or understandings whether written or oral
between the Parties with respect to the subject matter hereof.
14.7 TITLES. The headings appearing at the beginning of the numbered
Articles hereof have been inserted for convenience only and do
not constitute any part of this Agreement.
20.
14.8 PUBLICITY AND PRESS RELEASES. Except to the extent necessary
under applicable laws, each Party agrees that no press releases
or other publicity relating to the existence or substance of the
matters contained herein will be made without the other Party's
prior written approval; provided, however, that any press
release containing information released in a prior release
approved of by the Parties shall require no additional consent.
14.9 RELATIONSHIP OF THE PARTIES. Notwithstanding any provision
hereof, for all purposes of this Agreement each Party shall be
and act as an independent contractor and not as partner, joint
venture, or agent of the other and shall not bind nor attempt to
bind the other to any contract.
14.10 MODIFICATIONS. No changes or modifications or waivers are to be
made to this Agreement unless evidenced in writing and signed
for and on behalf of both Parties.
14.11 SEVERABILITY. In the event that any provision of this Agreement
shall be determined to be illegal or unenforceable, that
provision will be limited or eliminated to the minimum extent
necessary so that this Agreement shall otherwise remain in full
force and effect and enforceable.
15. MICHIGAN LICENSE
----------------
15.1 PCI accepts:
(a) The Vaccine may be used only for the Manufacture of
Product; and
(b) Except as set forth in this Agreement, PCI shall not
provide any Vaccine or derivatives thereof to any third
party. PCI shall limit access to the Vaccine supplied by
Aviron to those employees reasonably requiring such
access for [*], which employees are governed by PCI's
customary confidentiality obligations.
15.2 Aviron shall:
(a) use every reasonable effort to honor and observe its
obligations under the Michigan Agreement and shall not
act or fail to act in any way which might jeopardize or
cause to be terminated the Michigan Agreement; and,
(b) promptly notify PCI of any amendment to the Michigan
Agreement that affects PCI's performance under this
Agreement; and,
(c) make every reasonable effort to notify PCI in writing of
the expiration or termination of the Michigan Agreement
at least six weeks prior to either event.
15.3 PCI will use every reasonable effort to conduct [*] and to Store
the Vaccine and Product in accordance with all applicable
government laws and regulations.
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21.
15.4 Aviron, on Michigan's behalf, may request from PCI at reasonable
times and in reasonable quantities at a cost equal to PCI's cost
for production of Product as it may desire, provided that PCI
shall be under no obligation under this sub-clause or otherwise
to produce extra batches of Product solely or substantially to
meet Michigan's requirements. Any requirements of Michigan shall
be supplied from Product being produced for Aviron with Aviron
being solely responsible for apportioning such part thereof to
Michigan as Aviron sees fit. Aviron shall promptly pay to PCI
the difference between the cost of Product supplied to Michigan
hereunder and the price of Product as set forth in Section 13.1.
15.5 PCI acknowledges Michigan's warranty disclaimer and limitation
of liability contained in the Michigan Agreement but makes no
assessment or admission of its validity or reasonableness.
Notwithstanding such, PCI will not make any statements,
representations or warranties inconsistent with such warranty
disclaimer or limitation of liability other than in pursuance or
prosecution of its own rights and remedies.
15.6 PCI will indemnify Michigan, its fellows, officers, employees
and agents for and against any and all claims, damages, losses
and expenses of any nature resulting from, but not limited to,
death, personal injury, illness or property damage, arising
directly and solely as a result of;
(a) any Manufacture, use or other disposition by PCI of the
Vaccine or Product;
(b) the use by PCI, its agents or employees of Vaccine or
Product made or used by PCI;
(c) the use, handling, storage or disposal of Vaccine, any
derivatives or Product by PCI; or
(d) the unauthorized and negligent use by PCI of any know-
how, or technical data sub-licensed to Aviron from
Michigan (and of which know-how and technical data
Aviron has expressly notified PCI as being sub-licensed
to Aviron by Michigan) or developed by PCI pursuant to
the Manufacture, where but only where such claims,
damages, losses and expenses are a direct consequence of
the negligence of PCI, its agents or employees.
15.7 PCI shall not use the name of Michigan in publicity or
advertising concerning the Product or the Vaccine without the
prior written consent of Michigan, such consent not to be
unreasonably or arbitrarily withheld nor delayed. Reports in
scientific literature and presentations of joint research and
development work are not considered publicity for the purpose of
this clause.
22.
IN WITNESS WHEREOF, the Parties hereto have caused this
Agreement to be executed by their respective duly authorized officers or
representatives as of the day and year first above written.
PACKAGING COORDINATORS, INC. AVIRON
By: /s/ Xxx Xxxxxx By: /s/ X. Xxxxxxxx Read, M.D.
------------------------------- --------------------------------
Name: Xxx Xxxxxx Name: X. Xxxxxxxx Read, M.D.
----------------------------- -------------------------------
Chairman and
Title: President Title: Chief Executive Officer
---------------------------- -------------------------------
23.
APPENDIX 1
----------
Aviron Production Equipment
---------------------------
Master Equipment List
ID # Equipment Vendor
[ * ] [ * ] [ * ]
[*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
24.
APPENDIX 2
----------
PCI Production Equipment
------------------------
====================================================
Function Manufacturer
----------------------------------------------------
* *
[___________] [___________]
====================================================
*
[___________]
[*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
25.
APPENDIX 3
----------
Specifications
--------------
(INTENTIONALLY BLANK)
26.
APPENDIX 4
----------
Facility Reservation Agreement
------------------------------
See Exhibit 10.17
27.
APPENDIX 5
----------
AVIRON PROJECT PRICING
APPENDIX 5
All prices shown are per syringe when packaged two (2) syringes per carton.
All production rates are based on an average of [*] syringes per hour.
[*] Production------------------
[*] Production labor rate of [*]. PCI and Aviron
will develop a [*] labor reporting system. [*] costs will be billed upon [*].
[*]
-------------------
====================================================================================================================================
Target Price
Reduction [*] Increase
Potential Syringes Potential
-----------------------------------------------------------------------------------------------------------------------------------
[*] Subtract [*] for each [*] decrease in material cost [*] Add [*] for each [*] increase in material cost
[*] Subtract [*] for each [*] decrease in material cost [*] Add [*] for each [*] increase in material cost
[*] Subtract [*] for each [*] decrease in material cost [*] Add [*] for each [*] increase in material cost
[*] Subtract [*] for each [*] decrease in material cost [*] Add [*] for each [*] increase in material cost
[*] Subtract [*] for each [*] decrease in material cost [*] Add [*] for each [*] increase in material cost
Shift crew size Subtract [*] for each person less than [*] [*] Add [*] for each additional person over [*]
for [*] is
[*] people
------------------------------------------------------------------------------------------------------------------------------------
Secondary Total: [*] [*] [*]
====================================================================================================================================
NOTE: REDUCTION/INCREASE POTENTIAL FOR [*] TOTALS SHOW EFFECT OF ALL ITEMS
CHANGING. THE LIKELIHOOD OF THIS HAPPENING IS REMOTE. FINAL PRICE IS LIKELY TO
BE A BLENDED COMBINATION.
[*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
28.
