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[CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT
HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION]
EXHIBIT 10.2
CANINE HEARTWORM COOPERATION AGREEMENT
THIS AGREEMENT, is entered into as of June 10, 1994 between Paravax, Inc., 0000
Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxx Xxxxxxx, Xxxxxxxx ("Paravax") and Xxxxx XX,
X-00000 Xxxxxxxxxx, Xxxxxxx Xxxxxxxx of Germany ("Bayer").
Whereas Paravax is engaged in the research and development of a
vaccine for the prevention of canine heartworm (Dirofilaria immitis) infection;
Whereas Bayer is interested in providing Paravax with certain funds to
support such research and development and to fund a portion of the research and
development expenses which Paravax has incurred prior to the date of this
Agreement; and
Whereas in exchange for providing such research and development
funding, Paravax is willing to xxxxx Xxxxx options to obtain certain rights
with respect to such canine heartworm vaccine;
Now therefore:
The parties hereto agree as follows:
ARTICLE 1. OVERVIEW
1.1. Overview. This Canine Heartworm Cooperation Agreement (this
"Agreement" or this "Cooperation Agreement") is intended to set forth
the parameters pursuant to which Bayer and Paravax intend to develop,
manufacture and market a vaccine for the prevention of canine
heartworm (Dirofilaria immitis) infection. During the initial phases
of the Cooperation Agreement, the primary goal shall be the
development and preliminary testing of a vaccine for the prevention
of canine heartworm infection. As set forth in ARTICLE 3. RESEARCH
AND DEVELOPMENT, Paravax will undertake the primary responsibility
for attempting to develop and preliminarily testing such a vaccine,
and Bayer shall offer Paravax such technical and scientific
assistance in this endeavor as Bayer deems desirable and appropriate.
Bayer will also provide funding to allow Paravax to perform such
research and development and preliminary testing activities. The
primary goal of the next stage of the Cooperation Agreement will be
to conduct the clinical testing necessary to determine and optimize
the safety and efficacy of the vaccine and to obtain the regulatory
approvals required to allow its manufacture and marketing. As set
forth in ARTICLE 4. CLINICAL TRIALS, Bayer shall determine the scope
and nature of such clinical testing, and Bayer and Paravax shall
jointly determine how to allocate responsibility for conducting such
clinical testing and obtaining such regulatory approvals. Bayer shall
provide the funding necessary to allow Paravax to conduct its portion
of these responsibilities. As set forth in ARTICLE
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5. OPTION AND LICENSE, Bayer shall have the option at any time to
obtain a license to the technology which Paravax develops pursuant to
this Agreement, for certain uses and subject to certain conditions
and the payment of certain royalties. As set forth in ARTICLE 6.
MANUFACTURE OF CANINE HEARTWORM VACCINE, to the extent that upon the
completion of Phase II of the Research Program Paravax has in place a
manufacturing facility that is approved by the appropriate regulatory
authorities, Paravax shall be entitled to manufacture the Canine
Heartworm Vaccine, and to the extent that Paravax does not have such
a facility in place, or chooses not to so manufacture the Canine
Heartworm Vaccine, Bayer shall manufacture, or have manufactured, the
Canine Heartworm Vaccine for sale in the Territory and shall
manufacture Canine Heartworm Vaccine for Paravax as required for sale
outside the Territory. As set forth in ARTICLE 7. DISTRIBUTION
RIGHTS, upon completion of the development and testing of a safe and
efficacious Canine Heartworm Vaccine, Bayer shall have the right to
enter into a Distribution agreement which shall allow Bayer to
distribute the vaccine throughout the world, with certain exceptions.
ARTICLE 2. DEFINITIONS
For purposes of this Agreement, the terms set forth below shall be
deemed to have the meanings indicated:
2.1. Distribution Agreement shall mean he Canine Heartworm Vaccine
Distribution Agreement referred to in Section 7. hereof.
2.2. Manufacturing Agreement shall mean the Canine Heartworm Vaccine
Manufacturing Agreement referred to in Section 6.2 hereof.
2.3. Paravax Technology shall mean all intellectual property of Paravax
as of date of this Agreement and any intellectual property of Paravax
developed during the term of this Agreement, to the extent related to
the research, development, manufacture or sale of a recombinant live
vector vaccine for the prevention of canine heartworm infection,
including but not limited to all patents and patent applications with
respect to such intellectual property.
2.4 Net Sales shall mean gross receipts from independent, unrelated
partes in a bona fide arm's length transactions, less the following
deductions: (a) trade and/or quantity discounts actually allowed and
taken in such amounts as are customary in the trade; (b) commission
paid or allowed to independent brokers and agents; (c) sales and
other excise taxes and duties paid, to the extent separately stated
on an invoice; and (d) amounts paid to cover transportation costs, to
the extent separately stated on any invoice.
2.5 Research Program shall mean the research program for the development
of a vaccine
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for the prevention of canine heartworm infection as set forth on
Exhibit A hereto, as amended by the parties pursuant to the terms of
this Agreement.
2.6. Territory shall mean the entire world, with the exception of Japan
and Southeast Asia (which shall be deemed to include Korea, Thailand,
Singapore, Taiwan, China, Hong Kong, Malaysia Indonesia, and the
Philippines).
2.7 Canine Heartworm Vaccine shall mean a recombinant live vector
vaccine for the prevention of canine heartworm (Dirofilaria immitis)
infection developed during the term of this Agreement pursuant to the
Research Program.
ARTICLE 3. RESEARCH AND DEVELOPMENT
3.1. Phases of the Research Program. The Canine Heartworm Research
Program is divided into four Phases, as described on Exhibit A
hereto, which will be referred to in this Agreement as Phases I
through IV. Phases I and II of the Research Program are primarily
concerned with the initial research and development and preliminary
testing of the Canine Heartworm Vaccine. Phases III and IV of the
Research Program are primarily concerned with the conduct of the
clinical testing necessary to determine and optimize the safety and
efficacy of the vaccine and to obtain the regulatory approvals
required to allow manufacture and marketing, and their performance is
addressed in Article 4 of this Agreement.
3.2. Paravax Responsibility, Phases I and II. Paravax shall have primary
responsibility for performing Phases I and II of the Research
Program. Bayer shall offer Paravax such technical, scientific and
other assistance and cooperation for this undertaking as Bayer deems
appropriate. Paravax shall use diligent efforts to conduct Phases I
and II of the Research Program, with such modifications, additions
and deletions as Bayer and Paravax shall reasonably agree upon.
Paravax will provide Bayer with reports on a quarterly basis with
respect to it progress as to the Research Program. At Semi-annual
intervals, these reports will contain significant detail, and Paravax
will host semi-annual meetings, as requested by Bayer, to update
Bayer personnel as to its progress and plans with respect to the
Research Program. Paravax will use diligent efforts to promptly
replace any significant personnel who depart from Paravax while
working on the Research Program with appropriate personnel who meet
reasonable criteria agreed to with Bayer.
3.3. Research and Development Funding. Upon the execution of this
Agreement, Bayer shall pay to Paravax a lump sum payment of
US$[ ]. In addition, eight months, sixteen months and twenty-four
months after the date of this Agreement Bayer shall pay to Paravax
further lump sum payments of US$[ ] each. The total of such lump
sum payments, US$[ ], shall be deemed to be funding for a
portion of the research and development expenditures which Paravax
has undertaken prior to the
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CONFIDENTIAL TREATMENT REQUESTED
date of this Agreement. Bayer shall also make an initial advance
research and development milestone payment of US[ ] to Paravax upon
the execution of this Agreement. Bayer shall make further research and
development funding payments to Paravax as set forth on Exhibit A hereto
upon completion of the milestones through the end of Phase II of the
Research Program indicated on Exhibit A hereto. The specific dollar
amounts set forth herein and on Exhibit A hereto are intended to be net
of any withholding required upon transfer of funds to Paravax.
3.4. Unexpected Expenses. To the extent that the expense of completing the
Research Program greatly exceeds that contemplated by Paravax at the
time this Agreement was entered into, whether due to a change in
regulatory requirements or other change in circumstance, Paravax and
Bayer shall negotiate in good faith to reach agreement upon a reasonable
level of additional research and development funding to be provided by
Bayer in order to allow Paravax to complete the Research Program;
provided, however, that Bayer shall continue to be entitled to terminate
this Agreement pursuant to the provisions of Section 11.2 hereof. The
parties agree that Paravax shall not be entitled to any additional
research and development funding simply by reason of the fact that the
research and development takes longer than Paravax originally
contemplated due to delays that are customary for research and
development such as the Research Program.
3.5. Bayer Technology. It is contemplated by the parties that Bayer may from
time to time, in its discretion, offer Paravax access to certain Bayer
proprietary technology which would assist in the development and/or
manufacture of the Canine Heartworm Vaccine. In the event that Bayer is
willing to offer access to such technology to Paravax, the parties will
negotiate in good faith to reach agreement upon reasonable terms and
conditions upon which Paravax may make use of such technology for the
development and/or manufacture of the Canine Heartworm Vaccine.
3.6. Additional Antigens. Bayer and/or Paravax may from time to time wish to
consider adding additional non-heartworm antigens to the Canine
Heartworm Vaccine being developed pursuant to this Agreement. In such
event, the parties shall cooperatively discuss the costs and benefits of
adding such additional antigens and shall negotiate in good faith to
reach agreement concerning the wisdom of adding such additional
antigens, how to perform the necessary research and development and how
this Agreement shall be appropriately amended.
3.7. Full Cooperation. Bayer and Paravax agree to cooperate fully during the
term of this Agreement to attempt in good faith to accomplish and
enhance the performance of the Research Program, including, among other
things, keeping each other fully informed of any possible ancillary
technology which would improve the Canine Heartworm Vaccine, such as
live vaccine vector technology, which one or the other has, or might be
able to obtain, access to, to the extent they are entitled to do so.
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ARTICLE 4. CLINICAL TRIALS
4.1. Phase III and IV of the Research Program. Phase III and IV of the
Research Program are primarily concerned with optimizing the safety,
efficacy and manufacturing of the Canine Heartworm Vaccine and
obtaining the regulatory approvals required to allow its
manufacturing and marketing. It is agreed that, as Bayer has greater
regulatory experience than Paravax and as Bayer will have
responsibility for marketing the Canine Heartworm Vaccine, Bayer will
be responsible for designing the regulatory program, including
clinical trial protocols, to obtain the required regulatory
approvals. Bayer shall complete such design of the regulatory program
prior to the completion of Phase II of the Research Program, so that
no delay exists between the completion of Phase II of the Research
Program and the commencement of Phase III of the Research Program.
Once such a regulatory program has been designed, Paravax and Bayer
shall jointly determine how to allocate responsibility for conducting
Phases III and IV of the Research Program in order to complete such
Phases in the most efficient and expeditious manner. To the extent
that Paravax is to undertake responsibility for conducting portions
of Phases III and IV of the Research Program, Bayer shall provide
Paravax in a timely manner with an amount of funding which is
sufficient to allow Paravax to reasonably conduct and complete such
portions of the Research Program, including amounts necessary to
conduct the clinical trials and obtain the regulatory approvals
contemplated. Paravax agrees that it shall use diligent efforts to
conduct all formal clinical trials in a manner which is satisfactory
for regulatory approval, as directed by Bayer.
ARTICLE 5. OPTION AND LICENSE
5.1. Interim License. During the term of this Agreement, Bayer shall have
a license to use all Paravax Technology, including all results
obtained during the Research Program, and all biological materials
created during the Research Program, for purposes of assisting and
evaluating the conduct of the Research Program, including designing
and conducting the regulatory program referred to in Article 4
hereof, and preparing for and conducting preliminary manufacturing of
the Canine Heartworm Vaccine and for all other purposes which are
consistent with the provisions of this Cooperation Agreement.
5.2 Option. For a period 180 days after a termination of this Agreement,
Bayer shall have an option to acquire a license to use all Paravax
Technology to the extent set forth below. The rights to be granted
pursuant to such license shall differ depending upon the
circumstances under which such option is exercised, as set forth
below.
5.3. Exercise upon Completion. In the event that this Agreement terminates
upon completion of the Research Program, as set forth in section 11.1
hereof, Bayer shall obtain an exclusive license to use the Paravax
Technology to manufacture Canine
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Heartworm Vaccine for sale in the Territory. Such license shall
terminate upon a termination of the Distribution Agreement at the
election of Bayer or by reason of a material breach by Bayer. During
the term of such license, Paravax shall not grant any other party a
license to use the Paravax Technology for the manufacture of any
recombinant vaccine for the prevention of canine heartworm infection
for sale in the Territory and Paravax will not use the Paravax
Technology for the manufacture of any recombinant vaccine for the
prevention of canine heartworm infection for sale in the Territory
except for sale through Bayer pursuant to the Distribution Agreement.
Bayer shall also be entitled to obtain various nonexclusive licenses
to use the Paravax Technology for purposes other than a vaccine for
the prevention of canine heartworm infection, to the extent Paravax
is contractually permitted to grant such licenses. In the event that
Bayer elects to obtain such a license, Paravax and Bayer shall
negotiate in good faith a reasonable royalty rate and other
reasonable terms and conditions for such license.
5.4. Exercise upon Premature Termination caused. by Paravax. In the event
that Bayer exercises its option to obtain a license to the Paravax
Technology upon the termination of this Agreement pursuant to Section
11.3 hereof as a result of a breach by Paravax, or upon the
termination of this Agreement by Bayer at its election pursuant to
Section 11.4 hereof as a result of an acquisition of Paravax, Bayer
shall obtain an exclusive license to use all of the Paravax
Technology to manufacture and sell vaccines for the prevention of
canine heartworm infection in the Territory. In such event, Paravax
will not use the Paravax Technology to manufacture and/or sell any
recombinant vaccine for the prevention of canine heartworm infection
in the Territory and will not grant any other party a license to use
the Paravax Technology to manufacture and/or sell any recombinant
vaccine for the prevention of canine heartworm infection in the
Territory; provided, however, that Paravax shall be entitled to use
the Paravax Technology in the Territory to manufacture, or have
manufactured, a vaccine for the prevention of canine heartworm for
sale outside of the Territory. Bayer shall also be entitled to obtain
various nonexclusive licenses to use the Paravax Technology for
purposes other than a vaccine for the prevention of canine heartworm
infection, to the extent Paravax is contractually permitted to grant
such licenses. In the event that Bayer elects to obtain such a
license, Paravax and Bayer shall negotiate in good faith a reasonable
royalty rate and other reasonable terms and conditions for such a
license.
5.5. Exercise upon Premature Termination caused by Bayer. In the event that
Bayer terminates this Agreement at its election pursuant to Section
11.2 hereof, Bayer shall be entitled to obtain various nonexclusive
licenses to use the Paravax Technology for other than a vaccine for
the prevention of canine heartworm infection, to the extent Paravax
is Contractually permitted to grant such licenses. In the event that
Bayer elects to obtain such a license, Paravax and Bayer shall
negotiate in good faith a reasonable royalty rate and other
reasonable terms and conditions for such license.
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5.6 Royalty Rates. The license granted to Bayer pursuant to Section 5.1
hereof shall be royalty free. A license with respect to Canine
Heartworm Vaccine granted to Bayer pursuant to Section 5.3 hereof
shall provide for the payment of royalties to Paravax of [ ]% of Net
Sales of Canine Heartworm Vaccine, other than Canine Heartworm
Vaccine which is sold by Paravax to Bayer pursuant to the
Distribution Agreement. A license with respect to a vaccine for the
prevention of canine heartworm infection granted to Bayer pursuant to
Section 5.4 hereof shall provide for the payment of royalties to
Paravax of [ ]% of Net Sales of any such canine heartworm vaccine.
Bayer's obligation to pay any such royalties shall terminate upon the
later of (i) the expiration of all of the licensed patents, or (ii)
ten years from the first commercial sale of a licensed product by or
on behalf of Bayer. In the event that any royalty and/or license fee
is required to be paid to any third party with respect to the use,
manufacture of sale of Canine Heartworm Vaccine, other than any
amounts which Paravax is contractually obligated to pay as of the
date of this Agreement, such expense shall be borne equally by
Paravax and Bayer. Paravax and Bayer shall jointly decide to
undertake any contractual commitment to pay any such license fee or
royalty with respect to the manufacture or sale of Canine Heartworm
Vaccine. Paravax shall be solely responsible to bear the cost of any
license fee or royalty which Paravax is contractually obligated to
pay as of the date of this Agreement.
5.7. License Agreements. At any time, upon the request of Bayer, Bayer and
Paravax shall negotiate in good faith the form of the license
agreement for any license to be granted to Bayer pursuant to this
Article 5. Such license agreement shall contain the substantive terms
described in this Article 5, together with such other reasonable and
customary terms as the parties shall agree upon. Such license
agreement shall be subject to appropriate decreases in royalties upon
the expiration of patents. Such license agreement shall also provide
for Paravax to provide Bayer with reasonable assistance and
documentation in order to facilitate Bayer's permitted use of the
Paravax Technology.
ARTICLE 6. MANUFACTURE OF CANINE HEARTWORM VACCINE
6.1. Manufacturing Source. To the extent that upon the completion of Phase
II of the Research Program Paravax owns, or leases pursuant to a long
term lease, a manufacturing facility which has been approved by the
United States Department of Agriculture or, if applicable, the United
States Food and Drug Administration which allows Paravax to produce
Canine Heartworm Vaccine for which regulatory approval or clearance
for sale can be obtained in a specific country in the Territory, the
parties shall proceed as though Paravax shall manufacture the Canine
Heartworm Vaccine for distribution in that country by Bayer pursuant
to the Distribution Agreement. To the extent that upon the completion
of Phase II of the Research Program Paravax does not have such an
approved manufacturing facility which allows it to produce Canine
Heartworm Vaccine for which regulatory approval or clearance for sale
can be
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obtained in a specific country, the parties shall proceed as though
Bayer shall manufacture the Canine Heartworm Vaccine for distribution
in that country by Bayer pursuant to the Distribution Agreement.
Paravax may elect to forego or cease manufacture of Canine Heartworm
Vaccine at any time, provided that Paravax gives Bayer adequate
notice to allow Bayer, or a third party, to prepare for the
manufacturing requirements of producing the Canine Heartworm Vaccine
for, as applicable, Phases III ans IV of the Research Program and/or
manufacture for commercial sale. After the commencement of Phase III
of the Research Program, Paravax shall have no right to regain from
Bayer the right to manufacture the Canine Heartworm Vaccine; however,
Bayer agrees that is shall favorably consider any such request made
by Paravax. In the event that Paravax elects to forego or cease
manufacture of the Canine Heartworm Vaccine, Bayer shall be entitled
to manufacture all of Bayer's requirements for Canine Heartworm
Vaccine pursuant to the license described in Section 5.3 above.
6.2 Manufacturing Agreement. In the event that Paravax does not
manufacture any Canine Heartworm Vaccine, as described in Section 6.1
hereof, Bayer and Paravax shall enter into a Manufacturing Agreement
pursuant to which Bayer shall manufacture, or have manufactured, the
Canine Heartworm Vaccine for Paravax for sale outside of the
Territory and sell such Canine Heartworm Vaccine to Paravax at a
reasonable price to be agreed upon by Paravax and Bayer. Such
Manufacturing Agreement shall include such other reasonable and
customary terms as the parties shall agree upon, consistent with the
terms of this Cooperation Agreement.
ARTICLE 7. DISTRIBUTION RIGHTS
7.1. Distribution Agreement. Upon Bayer's decision to file for regulatory
approvals for a Canine Heartworm Vaccine, Bayer and Paravax shall
enter into a Canine Heartworm Vaccine Distribution Agreement. Such
Distribution Agreement shall include the substantive terms described
in Articles 7,8,9 and 10 of this Cooperation Agreement, together with
such other reasonable and customary terms as the parties shall agree
upon, consistent with the terms of this Cooperation Agreement. The
terms of such Distribution Agreement shall be perpetual, subject to
termination by Bayer at its election or termination by Bayer or
Paravax as a result of a breach by the other party.
7.2. Grant of Rights. During the term of the Distribution Agreement, Bayer
and its affiliated companies shall have the exclusive right to
distribute Canine Heartworm Vaccine in the Territory. Bayer and its
affiliated companies shall be entitled to distribute the Canine
Heartworm Vaccine both directly and through distributors. Bayer shall
use diligent efforts during the term of the Distribution Agreement to
promote, market, distribute and sell Canine Heartworm Vaccine in the
countries in the Territory listed on Exhibit B hereto. Bayer shall
have no obligation to promote, market, distribute or sell Canine
Heartworm Vaccine in any portion of the Territory
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in which it is not commercially reasonable to do so.
7.3. Competing Products. Other than Canine Heartworm Vaccine, and any other
vaccine licensed from and/or developed by Paravax, Bayer shall not
directly, or through any subsidiary or affiliated corporation, sell
in the Territory any vaccine for the prevention of canine heartworm
infection during the term of the Distribution Agreement. Bayer also
agrees that neither it nor any subsidiary or affiliated corporation
shall directly or indirectly solicit sales of Canine Heartworm
Vaccine for use in any animal other than domestic canines.
7.4. Additional Territories. In the event that a Paravax relationship for
the distribution of Canine Heartworm Vaccine with an existing partner
terminates as to any portion of the world not included in the
Territory, Paravax agrees that, before entering into a relationship
with any new partner for the distribution of the Canine Heartworm
Vaccine in such portion of the world, it will first offer Bayer the
option to obtain distribution rights for the Canine Heartworm Vaccine
in that portion of the world upon reasonable terms and conditions and
will negotiate in good faith with Bayer with respect to such
reasonable terms and conditions if Bayer is interested in obtaining
such rights.
ARTICLE 8. PURCHASE OF CANINE HEARTWORM VACCINE
8.1. Purchase Obligation. To the extent that Paravax is entitled to be the
manufacturing source for Canine Heartworm Vaccine in some or all of
the Territory, pursuant to the provisions of Section 6.1 hereof, the
Distribution Agreement shall provide that Bayer will purchase from
Paravax all quantities of Canine Heartworm Vaccine to be sold by it
or on behalf of it pursuant to the Distribution Agreement in such
portions of the Territory. Bayer's obligation to purchase Canine
Heartworm Vaccine from Paravax shall terminate in the event that
Paravax consistently fails to provide in a timely manner the Canine
Heartworm Vaccine which Bayer orders pursuant to the terms of the
Distribution Agreement or in the event that Paravax elects to cease
or forego manufacture of the Canine Heartworm Vaccine pursuant to
Section 6.1 hereof. To the extent that Paravax manufacturers Canine
Heartworm Vaccine, the terms set forth in this Article 8 shall be
incorporated in the Distribution Agreement for purposes of Bayer's
purchases of such Canine Heartworm Vaccine.
8.2. Transfer Price. The per dose price at which Bayer shall purchase
Canine Heartworm Vaccine from Paravax pursuant to the Distribution
Agreement shall be equal to the sum of (i) [
], (ii) [ ], and (iii) [
]. To the extent that Paravax and Bayer are
unable to agree upon the price at which [ ] would
manufacture the Canine Heartworm Vaccine, Paravax
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and Bayer shall agree upon [
] for the
manufacture of the Canine Heartworm Vaccine in those quantities which
Bayer reasonably expects to purchase Canine Heartworm Vaccine in the
upcoming year. Upon [
] for purposes of the calculation of the transfer
price payable to Paravax. In addition, Paravax and Bayer will discuss
increases to this price in good faith on a yearly basis in order to
compensate Paravax for increases in the costs of raw materials, labor
and other manufacturing expenses.
8.3. Shipment. All prices and shipments shall be F.C.A. Paravax's Fort
Xxxxxxx, Colorado location, and risk of loss or damage shall pass to
Bayer on delivery to a common carrier. Bayer shall pay, or reimburse
Paravax for, the amount of any sales, use, excise or similar taxes
and all expenses of clearing customs and duties associated with
importing or exporting the Canine Heartworm Vaccine purchased from
Paravax for sale by or on behalf of Bayer within the Territory.
8.4. Packaging. Bayer shall supply the art work and language for all
labels, packaging, product inserts and related items. Bayer shall
bear any expense, including discarded materials, resulting from any
change in such packaging, labeling, inserts or art work requested by
Bayer. Bayer shall market the Canine Heartworm Vaccine using Bayer's
tradenames, trademarks, logos and trade dress; however, to the extent
the Canine Heartworm Vaccine is manufactured by Paravax, Bayer's name
as distributor and Paravax's name as manufacturer shall receive equal
prominence in the descriptive materials.
8.5. Forecasts and Purchase Orders. In order to assist Paravax in
planning its production schedule for the Canine Heartworm Vaccine,
Bayer shall, no later than last day of each calendar quarter, provide
Paravax with a good faith forecast of the Canine Heartworm Vaccine
that Bayer expects to purchase during each of the following four
calendar quarters. The amounts so forecast for the immediately
following two quarters shall be deemed to be a noncancellable order
for delivery during such quarter; provided, however, that Bayer shall
not be obligated to purchase more than 75 % of the amount so forecast
for the second such quarter. Any additional amounts to be purchased
by Bayer shall be purchased by written purchase order submitted to
Paravax. Paravax shall not be obligated to accept any purchase order
which provides for delivery in less than 90 days from the date of its
receipt. Paravax shall be entitled to establish economically
reasonable minimum quantities for individual deliveries in light of
production expenses.
8.6. Payment. Payment for Canine Heartworm Vaccine shall be due in full
thirty (30) days
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from the date of receipt of invoice, which shall be on or after the
date of shipment. Accounts outstanding more than thirty (30) days
will be subject to a monthly charge at the rate of one and one half
percent (1.5 %) per month, or the maximum permitted by law, whichever
is less.
8.7. Warranty. Paravax will warrant that the Canine Heartworm Vaccine
supplied by Paravax will be free from defects in manufacturing and
workmanship, and will conform to agreed upon standards and
specifications, during the shelf life indicated by Paravax for such
Canine Heartworm Vaccine (the "Warranty Period"), provided that the
Canine Heartworm Vaccine is maintained under the storage conditions
defined by Paravax. Any Canine Heartworm Vaccine which is found to be
defective during the Warranty Period may be returned for replacement.
Bayer agrees to report to Paravax any suspected product defect or
customer complaint. Paravax shall have the right to decide to recall
any or all of the Canine Heartworm Vaccine, and Bayer agrees to
comply with any recall procedures for such Canine Heartworm Vaccine
decided on by Paravax. There shall be no remedies for defective
Canine Heartworm Vaccine other than those expressly set forth herein,
and Paravax will make no other warranties of any kind, express or
implied, with respect to Canine Heartworm Vaccine. Paravax will,
however, bear any producer liability to third parties with respect to
any Canine Heartworm Vaccine manufactured by Paravax, to the extent
imposed by applicable law.
ARTICLE 9. PATENT INDEMNIFICATION
9.1. Infringement Defense. Paravax and Bayer will jointly defend any
claim, suit or proceeding brought against Bayer and/or Paravax to the
extent it is based upon a claim that the Canine Heartworm Vaccine
sold by Bayer or on behalf of Bayer pursuant to the Distribution
Agreement infringes upon any patent or trade secret rights of any
third party. Bayer and Paravax agree that they shall promptly notify
the other in writing of any such claim or action and give the other
full information and assistance in connection therewith. Paravax and
Bayer shall jointly control the defense of any such claim or action
and the settlement or compromise of any such claim or action. Paravax
and Bayer will jointly pay all damages, costs and expenses paid in
settlement or finally awarded to third parties against Bayer and/or
Paravax for such claim or in such action. If the Canine Heartworm
Vaccine is, or in Paravax's or Bayer's opinion might be, held to
infringe as set forth above, Paravax and Bayer shall jointly
determine whether to replace or modify such Canine Heartworm Vaccine
so as to avoid infringement, or procure the right for Bayer and
Paravax to continue the manufacture, use and resale of such Product.
Paravax and Bayer shall also jointly determine how the expense of any
replacement, modification or procurement of rights shall be borne by
Paravax and Bayer. If neither of such alternatives is commercially
reasonable, any infringing Canine Heartworm Vaccine held by Bayer and
purchased from Paravax shall be returned to Paravax and Paravax's
sole liability, in addition to
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its obligation to pay damages, costs and expenses as set forth above,
shall be to refund the amounts paid for such returned Canine
Heartworm Vaccine by Bayer, and Paravax shall have no further
obligation to supply Canine Heartworm Vaccine to Bayer pursuant to
the Distribution Agreement.
9.2. Limitation. Paravax will have no liability for any claim of
infringement arising as a result of Bayer's use of the Canine
Heartworm Vaccine in combination with any items not supplied by
Paravax, any modification of the Canine Heartworm Vaccine by Bayer or
third parties, or, in the event that Bayer manufactures the Canine
Heartworm Vaccine, any manufacturing process used by Bayer. THE
FOREGOING STATES THE ENTIRE LIABILITY OF PARAVAX TO BAYER OR ANY
PURCHASER OR USER OF CANINE HEARTWORM VACCINE CONCERNING INFRINGEMENT
OF INTELLECTUAL PROPERTY RIGHTS, INCLUDING BUT NOT LIMITED TO, PATENT
AND TRADE SECRET RIGHTS.
ARTICLE 10. PATENTS
10.1. Ownership of Inventions. As between the parties, all rights to
inventions or discoveries invented or discovered jointly by Paravax
and Bayer under this Cooperation Agreement shall be jointly owned.
Each party shall have the right to use such inventions and
discoveries for such purposes as it shall deem appropriate, upon
agreement with the other party as to appropriate and reasonable
compensation for uses other than those contemplated by this
Agreement; provided, however, that to the extent set forth in the
Distribution Agreement, Bayer shall have the sole right to distribute
Canine Heartworm Vaccine in the Territory. As between the parties,
all rights to inventions or discoveries invented or discovered solely
by Paravax under this Cooperation Agreement shall belong to Paravax.
Bayer shall have no rights with respect to such inventions or
discoveries other than the rights to enter into the license
agreements and the Distribution Agreement, as set forth herein. As
between the parties, all rights to inventions or discoveries invented
or discovered solely by Bayer under this Cooperation Agreement shall
belong to Bayer.
10.2. Patent Filings. During the term of this Cooperation Agreement and the
Distribution Agreement, Paravax shall consult with Bayer as to all
patent filings and other patent actions related to the Canine
Heartworm Vaccine. Paravax and Bayer shall make such patent filings,
and take such other actions with respect to patent filings, as they
jointly determine are appropriate, using counsel selected by Paravax
and consented to by Bayer, which consent will not be unreasonably
withheld.
10.3. Patent Enforcement. During the term of the Distribution Agreement,
Bayer shall have the right to bring actions to enforce any patent
rights held by Paravax with respect to the Canine Heartworm Vaccine
against infringement in the countries in the Territory in which Bayer
has the right to distribute the Canine Heartworm Vaccine pursuant to
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the Distribution Agreement. Paravax shall provide such assistance and
cooperation in connection with such enforcement actions as Bayer
shall reasonably request. In the event that Bayer elects not to
enforce any such patent rights, Paravax may, but is not obligated to,
bring actions with respect to such infringement, and Bayer shall
provide such assistance and cooperation in connection with such
actions as Paravax shall reasonably request. Bayer shall not settle
or compromise any such action which it brings to enforce any patent
with respect to the Canine Heartworm Vaccine without Paravax's
consent, which consent will not be unreasonably withheld. Where such
an enforcement action has been brought by Bayer, Bayer shall maintain
the litigation at its own expense and shall keep any judgment and
award arising from such action. Where such an enforcement action has
been brought by Paravax, Paravax shall maintain the litigation at its
own expense and shall keep any judgments and awards arising from such
action.
ARTICLE 11. TERM AND TERMINATION
11.1. Term. The term of this Agreement shall commence on the date first set
forth above and shall end on the earlier of the date upon which this
Agreement is terminated pursuant to the provisions of this Article 11
or upon the completion of the Research Program.
11.2. Bayer Termination. Bayer shall have the right to terminate this
Agreement upon any anniversary of the date hereof, beginning with the
second such anniversary (but not before payment of the twenty-four
month lump sum payment due pursuant to Section 3.3 hereof), upon
written notice given not less than 90 days prior to such anniversary.
In the event that Bayer elects to so terminate this Agreement,
Paravax shall repay all amounts paid by Bayer pursuant to this
Agreement at a rate of [
] of any
vaccine for the prevention of canine heartworm infection developed by
Paravax based on the work conducted pursuant to the Research Program
during the term of this Agreement. Paravax's obligation to make such
payments to Bayer shall not commence until after the completion of
the second full calendar year in which such a vaccine has been
marketed in the Territory, and such payments shall only be made with
respect to Net Sales of such vaccine which take place after the
completion of such second full calendar year.
11.3. Termination for Breach. Either party shall have the right to terminate
this Agreement upon written notice if
(a) the other party is in breach of any material provision of
this Agreement and such breach has not been remedied within
30 days after written notice of such breach has been given;
or
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(b) the other party enters into liquidation, whether compulsory
or voluntary, or has a receiver appointed as to all or any
part of its assets, or takes or suffers any similar action
in consequence of debt.
11.4. Paravax Acquisition. Bayer shall have the right to terminate this
Agreement upon written notice to Paravax given within ninety (90)
days of any acquisition of Paravax by a third party, whether by
merger or sale or other transfer of a substantial majority of the
assets of Paravax. In the event that Bayer elects to so terminate
this Agreement, Bayer shall, upon the request of Paravax, provide
reasonable assistance to aid Paravax in satisfying its contractual
obligations with respect to the supply of vaccines for the prevention
of canine heartworm infection for sale outside of the Territory.
11.5. Paravax Termination. Paravax shall not have the right to unilaterally
terminate this Agreement; provided, however, that in the event that
Paravax determines that it is unlikely that the Research Program can
be successfully completed, Paravax and Bayer shall negotiate an
appropriate termination of this Agreement.
ARTICLE 12. CONFIDENTIALITY
12.1. Confidential Information. It is agreed that during the term of this
Agreement Paravax and Bayer may each disclose certain Confidential
Information to the other for purposes of furthering or evaluating
progress under this Agreement. The term "Confidential Information"
for these purposes shall include all technical, business, financial,
or marketing information which one party (the "Disclosing Party")
discloses to the other party (the "Receiving Party"), except any
portion of such information which:
a. is now or later made known to the public through no default by
the Receiving Party of its obligations under this Agreement;
b. the Receiving Party can show was in its possession prior to
disclosure by the Disclosing Party;
c. is rightfully received by the Receiving Party from a third party
without any accompanying secrecy obligation; or
d. is independently developed by the Receiving Party by persons who
neither had access to Confidential Information of the Disclosing
Party nor received direction from persons who had access to
Confidential Information of the Disclosing Party.
12.2. Confidentiality Obligation. A Receiving Party agrees to hold in
confidence and not
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disclose to any third parties any of the Confidential Information of
the Disclosing Party without the prior consent of the Disclosing
Party; provided, however, that to the extent required in order to
obtain regulatory approval, a Receiving Party may disclose such
Confidential Information to the appropriate regulatory authorities. A
Receiving Party agrees to limit any disclosure of the Confidential
Information only to those of its employees and outside professional
advisors who have a need to know and who are bound by confidentiality
obligations, and to advise such persons of the Receiving Party's
obligations under this Agreement. A Receiving Party further agrees to
use Confidential Information received from the other party only for
purposes of furthering or evaluating progress under this Agreement.
Any tangible materials that contain any Confidential Information
shall be returned to the Disclosing Party promptly upon request, and
any portions of any memoranda, reports or documents created by the
Receiving Party which contain any Confidential Information shall be
destroyed upon the request of the Disclosing Party; provided,
however, that the Receiving Party may keep a single copy of all such
tangible materials for purposes of demonstrating compliance with the
provisions of this Agreement.
12.3. Confidentiality of Agreement. In addition, neither party will disclose
to any third party, other than with the prior written consent of the
other party, the terms and conditions of this Agreement, except as
may be required by applicable law, regulation or court order. The
provisions of this Article 12 shall survive any termination of this
Agreement for a period of ten (10) years.
ARTICLE 13. MISCELLANEOUS
13.1. Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the assigns of Paravax and Bayer; however,
neither Paravax nor Bayer shall be entitled to assign its rights and
obligations under this Agreement without the express written consent
of the other. Notwithstanding the immediately preceding, such consent
shall not be required for an assignment of the rights and obligations
of Paravax or Bayer to a wholly owned subsidiary or which takes place
as part of an acquisition of Paravax, whether by merger or sale or
other transfer of substantially all of the assets of Paravax;
provided, however, that nothing in this Section 13.1 shall be deemed
to limit the rights of Bayer pursuant to the provisions of Section
11.4 hereof.
13.2. Relationship of Parties. Nothing in this Agreement shall constitute
or be deemed to constitute a partnership between the parties. The
relationship between Bayer and Paravax shall be strictly that of
sponsor and researcher. Bayer, its officers, agents and employees,
shall under no circumstances be considered the agents, employees or
representatives of Paravax, and Paravax, its officers, agents and
employees, shall under no circumstances be considered the agents,
employees or representatives of Bayer. Bayer shall not have the right
to enter into any contracts or binding commitments in the name of or
on behalf of Paravax in any respect whatsoever, and
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Paravax shall not have the right to enter into any contracts or
binding commitments in the name of or on behalf of Bayer in any
respect whatsoever.
13.3. Notices. Notices required hereunder shall be deemed properly given
upon hand delivery (including professional courier such as Federal
Express) to the addresses set forth below, or to such other address
as a party shall have given notice of in accordance herewith.
Paravax: Paravax, Inc.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxx Xxxxxxx, XX 00000
Attn: President
Bayer: Xxxxx XX
Geschaftsbereich Veterinar
VT-F/Leitung
D-51368 Leverkusen
Germany
Attn: Prof. Xx. X. Xxxxxx
13.4. Force Majeure. Neither party shall be liable for any failure to
perform any of its obligations hereunder (other than the payment of
money) which results from act of God, the elements, fire, flood,
component shortages, force majeure, riot, insurrection, industrial
dispute, accident, war, embargoes, legal restrictions or any other
cause beyond the control of such party.
13.5. Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Kansas, without regard to
its provisions concerning the applicability of the laws of other
jurisdictions.
13.6. Arbitration. Should any dispute, controversy or difference of opinion
arise between the parties hereto out of or in relation to or in
connection with this Agreement, or the breach thereof, the parties
shall first endeavor to reach an amicable resolution thereof. Should
the parties fail to reach such an amicable resolution, any such
dispute, controversy or difference of opinion shall be resolved by
arbitration in accordance with the arbitration rules of the
International Chamber of Commerce, then in force, by one or more
arbitrators appointed in accordance with such rules. Any such
arbitration shall be held in Kansas City, Missouri if requested by
Bayer, and in Leverkusen, Germany if requested by Paravax, and all
proceedings shall be held in the English language. Any award rendered
shall be final and binding upon the parties. Judgement upon the award
may be entered in any court having jurisdiction, or application may
be made to such court for judicial acceptance of the award and/or an
order of enforcement as the case may be.
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13.7. Severability. If any provision or provisions of this Agreement shall
be held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
13.8. Entire Agreement. This Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter hereof and
may only be amended by a writing signed by both parties.
13.9. Titles and Headings. The titles or headings, articles, sections or
paragraphs set forth in this Agreement have been inserted merely to
facilitate reference and shall have no bearing upon the
interpretation of any of the provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on their behalf as of the date first set forth above.
PARAVAX, INC.
By /s/ XXXXX X. XXXX
---------------------
Title President
------------------
XXXXX XX
By /s/ X. XXXXXX
---------------------
Title Head of Research
------------------
BG Animal Health
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CANINE HEARTWORM VACCINE RESEARCH & DEVELOPMENT PLAN: EXHIBIT A
[
]
1
19
[
]
2
20
[
]
3
21
EXHIBIT B
TO
CANINE HEARTWORM COOPERATION AGREEMENT
UNITED STATES OF AMERICA
CANINE HEARTWORM VACCINE TIMETABLE
-------------------------------------------------------------------------------
Year 1 Year 2 Year 3
-------------------------------------------------------------------------------
PHASE 1
-------------------------------------------------------------------------------
TASK
-------------------------------------------------------------------------------
[
]
22
CANINE HEARTWORM VACCINE
PHASE I/II MILESTONES AND PAYMENTS
----------------------------------------------------------------------------------------------------------
Milestones Mos. PAYMENT BY
($000 OMITTED)
----------------------------------------------------------------------------------------------------------
Performance(1) Milestones(2)
----------------------------------------------------------------------------------------------------------
UPFRONT 0 0 600
----------------------------------------------------------------------------------------------------------
[
]
1 Payment upon completion of the time (month) listed if performance level
is acceptable.
2 Payment upon successful achievement of milestone, independent of time.
3 Payment upon fulfilling criteria of Milestone 6.
23
Exhibit B
to
Canine Heartworm Cooperation Agreement
United States of America
