Exhibit 10.20
Portions redacted
* Certain information on this page has been
omitted and filed separately with the
Securities and Exchange Commission.
Confidential treatment has been requested
with respect to the omitted portions.
DEVELOPMENT AND MANUFACTURING AGREEMENT
THIS AGREEMENT is made as of October 31, 2003.
BETWEEN:
Dragon Pharmaceutical, Inc., a corporation duly incorporated under the laws
of the state of Florida, USA, having an office at 0000-0000 Xxxx Xxxxxxxx
Xx., Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx, and duly licensed to do business
there.
("Dragon")
AND:
Polymun Scientific lmmunbiologische Forschung GmbH, a corporation duly
incorporated under the laws of the Republic of Austria having its principal
place of business at Xxxxxxxxxx Xxxxxx 00, 0000 Xxxxxx, Xxxxxxx, and duly
licensed to do business there.
("Polymun")
WHEREAS:
(A) Dragon does not presently have either the technical Know-How or
manufacturing capacity for manufacturing therapeutic cytokines for European and
international markets, and has commercial interest in developing both technology
and capacity that will enable it to do so.
(B) Polymun has both technical Know-How and manufacturing capacity for
development and manufacture of therapeutic biopharmaceuticals.
NOW THEREFORE, in furtherance of and in consideration of the premises and the
mutual covenants, terms and conditions contained herein and for other good and
valuable consideration, the receipt and adequacy of which are acknowledged, the
Parties hereby agree as follows:
PART 1
DEFINITIONS AND INTERPRETATION
Definitions
1.1 In this Agreement, except as otherwise expressly provided or as the context
otherwise requires:
(a) "Additional Taxes" has the meaning as set out in Section 3.2(b).
(b) "Affiliate(s)" means any entity that directly or indirectly owns, is
owned by or is under common ownership with, a Party to this Agreement,
where "Own" or "Ownership" means direct or indirect possession of at least
fifty percent (50%) of the outstanding voting securities of a corporation
or a comparable ownership in any other type of entity,
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PROVIDED, HOWEVER, that if the law of the jurisdiction in which such entity
operates does not allow fifty percent (50%) or greater ownership by a Party
to this Agreement, such ownership interest shall be the direct or indirect
ownership by a Party of the maximum amount permitted by the law of such
jurisdiction of outstanding voting securities of such entity.
(c) "Business Information" means any and all information belonging to
either Party concerning the methods of manufacturing EPO, as well as steps
taken for its subsequent commercialization.
(d) "CGMP" means current good manufacturing practices as determined by and
promulgated as guidance by the International Conference on Harmonization
(ICH).
(e) "CHO" has the meaning as set out in Section 2.1(a).
(f) "CMC" has the meaning as set out in Section 2.3(a).
(g) "Commercial EPO Availability Date" means the date when Polymun
successfully produces the * * * consistent batch of EPO at industrial scale
and under CGMP conditions.
(h) "Commercially Reasonable Efforts" shall mean efforts and resources
commonly used in the pharmaceutical industry, taking into consideration
safety and efficacy, cost of development, availability of funds to carry
out operations, the relative competitive positions of parties as a result
of alternative products, proprietary positions) the likelihood of
regulatory approval and all other relevant factors that go into making
reasonable, informed business decisions.
(i) "Confidential Information" has the meaning as set out in Section 5.1.
(j) "EPO" means recombinant human erythropoietin, in bulk purified form.
(k) "Exclusive License" has the meaning as set out in Section 2.1(b).
(1) "Exclusive Period" means the period from signing of this Agreement
until the end of the first 3-year period subsequent to the Commercial EPO
Availability Date, during which Dragon is granted the Exclusive License
under Section 2.1.
(m) "Financial Information" means any and all information concerning costs,
prices, royalties, payments and any other commercial information relevant
in the context of this Agreement.
(n) "FOB" has the meaning as set out in Section 3.2(a).
(o) "Improvement," as used in this Agreement, refers to an improvement that
is new, useful and unobvious over the subject matter of the first patent.
(p) "Know-How" shall mean any and all technical, scientific and other
Know-How and information, Trade Secrets, knowledge, technology, means,
methods, processes, practices, formulae, instructions, skills, techniques,
procedures, experiences, ideas, technical assistance, designs, drawings,
assembly procedures, computer programs apparatuses, specifications, data,
results and other material, including clinical data, patient data,
improvements and/or Technical Information.
* * * CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.
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(q) "Licensed Cell Line" has the meaning as set out in Section 2.1(a).
(r) "Licensed Intellectual Properly" has the meaning as set out in Section
2.1 (b).
(s) "Manufacturing Orders" has the meaning as set out in Section 3.4.
(t) "Market Area" means all countries of the world excluding only * * *.
(u) "Master Cell Bank" or "MCB" means a collection of vials containing
copies of the Licensed Cell Line.
(v) "3-Month-Period" has the meaning as set out in Section 3.6.
(w) "Most Favored Pricing" is the euro price per gram, subject to the terms
and conditions set forth in Annex C hereto and made a part hereof.
(x) "Net Sales" means the invoice price, net of sales tax discount and
rebate, of EPO products made incorporating or developed by using the
Licensed Intellectual Property sold by Dragon or its Affiliates to any
party in the Market Area. A sale to an Affiliate that is an end-user is
included in the ambit of Net Sales. Notwithstanding anything to the
contrary, no deduction against the invoice price shall be given for
commission, stocking allowance or marketing and promotional expenses.
(y) "Non-Competition List" has the meaning as set out in Section 5.11(a).
(z) "Non-Exclusive License" has the meaning as set out in Section 2.3(a).
(aa) "Non-Exclusive Period" means the four (4) year period after the expiry
of the Exclusive Period, during which Dragon is granted the Non-Exclusive
License under Section 2.1.
(bb) "Non-Signers" has the meaning as set out in Section 5.8.
(cc) "Notice" has the meaning as set out in Section 9.9.
(dd) "Party" or "Parties" refers to either Dragon or Polymun or both as
required by the context.
(ee) "Prior Agreement" has the meaning as set out in Section 5.9.
(ff) "Process" has the meaning as set out in Section 8.3.
(gg) "Product Specifications" means the minimum passing specifications for
EPO in bulk purified form as described in the European Pharmacopoeia
version 4.2, * * *.
(hh) "Reasonable Efforts," as used herein, means a lower standard than that
of Commercially Reasonable Efforts, but it implies that Parties will try to
do what is necessary to comply with the provisions of this Agreement where
such a standard is called for and in no way act in an unreasonable fashion.
(ii) "Recipient(s)" has the meaning as set out in Section 5.2.
* * * CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.
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(jj) "Royalty Reporting Period" has the meaning set out in Annex B Section
2.
(kk) "Scope of Work" has the meaning set out in Section 7 .3(b).
(ll) "Semi.Exclusive License" has the meaning set out in Annex B Section 1
(a).
(mm) "Technical Information" means any and all information relevant for
CHO-technology platform as used to manufacture EPO.
(nn) "Term" has the meaning as set out in Section 7 .1.
(oo) "Trade Secrets" means that secret compilation (the secrecy of which is
guarded by Polymun) of information that Polymun has to develop a CHO cell
line suitably transfected with the human erythropoietin gene and adapted
for use in cell culture for the manufacture of EPO in industrial quantities
and enables the optimization of both cell culture and downstream
purification processes for the manufacture of EPO. But for the grant of a
license to use the Trade Secrets, it would take an immense amount of time,
effort and money for others to innocently acquire the information that
gives Polymun an advantage over competitors who do not possess the Trade
Secrets.
(pp) "Transferred Technology" has the meaning as set out in Section 2.4(a).
(qq) "Therapeutically Equivalent Recombinant Proteins" means recombinant
proteins having molecular structure, bio-activity, and method of
manufacture significantly similar to like innovator recombinant drug
products currently under patent and marketed by other companies.
Interpretation
1.2 In this Agreement, except as otherwise expressly provided or as the context
otherwise requires,
(a) "this Agreement" means this agreement as from time to time supplemented
or amended by one or more agreements entered into pursuant to the
applicable provisions of this Agreement,
(b) a reference to a "Part" is to a Part of this Agreement, and the word
"Section" followed by a number or some combination of numbers and letters
refers to the section, paragraph, subparagraph, clause or subclause of this
Agreement so designated,
(c) headings are solely for convenience of reference and are not intended
to be complete or accurate descriptions of content or to be guides to
interpretation of this Agreement or any part of it)
(d) an accounting term not otherwise defined herein has the meaning
assigned to it, and every calculation to be made hereunder is to be made,
in accordance ,with accounting principles generally accepted in the United
States applied on a consistent basis,
(e) a reference to currency means European Union Euros,
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(f) a reference to a statute includes all regulations made thereunder, all
amendments to the statute or regulations in force from time to time, and
every statute or regulation that supplements or supersedes such statute or
regulations unless otherwise indicated,
(g) a reference to an entity includes any successor to that entity, whether
by merger, acquisition, or any other means by which the entity may be
succeeded by another
(h) a word importing the masculine gender includes the feminine and neuter,
a word in the singular includes the plural, a word importing a corporate
entity includes an individual, and vice versa, and
(i) a reference to "approval", "authorization" or "consent" means written
approval, authorization or consent.
PART 2
SCOPE OF WORK
2.1 Development of EPO Cell Line and downstream process by Polymun and Dragon
(a) Subject to the terms of this Agreement, Polymun undertakes the
development of a Chinese Hamster Ovary (CHO) cell line suitably transfected
with the human erythropoietin gene and adapted for use in cell culture for
the manufacture of EPO in industrial quantities (the "Licensed Cell Line").
This Licensed Cell Line shall be developed in compliance with ICH
guidelines for cell substrate safety. This Licensed Cell Line as well as
associated manufacturing processes shall be clearly and distinctly
different from any previous cell line developed by Polymun for any other
client, and in that respect it is not subject to any claim of ownership by
any third party in connection with making, using, selling, offering to
sell, importing and/or exporting EPO.
(b) Polymun hereby grants to Dragon an exclusive, royalty bearing license,
to the Licensed Cell Line, Know-How, Technical Information and Trade
Secrets associated with the cell culture and downstream purification
processes for EPO (the "Licensed Intellectual Property") to make, use,
sell, offer to sell, import and/or export EPO in the Market Area during the
Exclusive period ("Exclusive License"). At the expiration of the Exclusive
Period Polymun hereby grants Dragon a non-exclusive license for the
Non-Exclusive period subject to the terms and conditions set forth
hereinafter to the Licensed Intellectual Property (the "Non-Exclusive
License"). During the Non-Exclusive Period, Polymun grants Dragon the Most
Favored Pricing and Polymun agrees to abide by the non-competition
provisions set forth in Sections 5.10, 5.11 and 5.12.
(c) Polymun will develop and optimize both cell culture and downstream
purification processes for the manufacture of EPO. Polymun shall integrate
selected technical staff from Dragon or its Affiliates into the process of
optimizing and finalizing the downstream purification process and establish
a manufacturing technology in a bioreactor scale of up to * * * in volume
that shall be satisfactory to fulfil the following technical
specifications:
(i) Manufacture not less than * * * EPO per litre of raw supernatant
using Polymun's proprietary low cost serum-free cultivation &
production medium.
* * * CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.
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(ii) Apply a downstream processing procedure for purification of raw
supernatant leading to a yield of not less than * * */litre of bulk
purified EPO meeting or surpassing Product Specifications.
(iii) Transfer to Dragon not less than * * * of bulk purified EPO
manufactured during the pilot manufacture process.
(d) Dragon will pay Polymun for development work milestones has undertaken
according to the schedule set forth in Annex A, within thirty (30) days of
having been informed by Polymun that the milestone has been met and Dragon
has informed Polymun in writing that the milestone is acceptable, and
acknowledges that it satisfies the criteria stated in the Agreement. Dragon
shall have the right to audit records and inspect the work and determine
completion to its satisfaction prior to its acceptance of the milestone
being met. Payment will be by wire transfer to accounts specified by
Polymun.
(e) Upon Polymun's receipt of all the milestone payment as per Annex A,
Dragon may use the Licensed Cell Line for manufacturing directly executed
by Dragon and its Affiliates using its own cell culture media and
processes. Polymun will also make available any and all Licensed Cell Line
development documentation needed for regulatory filings to any regulatory
body to which Dragon may apply for registration of EPO.
2.2 Polymun to manufacture EPO for Dragon
(a) During the Term of this Agreement, Polymun shall manufacture EPO for
Dragon in Polymun's Austrian-certified facilities in accordance with
Section 2 of this Agreement. Polymun will manufacture the BPO under CGMP
conditions and bear the costs of batch releases, tests and assays to be
undertaken in accordance with the Product Specifications.
For and in consideration of Dragon entering into this Agreement) Dragon's
price per gram is in accordance with the terms and conditions set forth in
Annex C.
(b) During the Term of this Agreement, Polymun shall reserve and Dragon
shall purchase CGMP manufacturing capacity to manufacture a minimum of * *
* grams and a maximum of * * * grams of bulk purified EPO per year in
ccordance with the Product Specifications in the Agreement.
(c) During the Exclusive Period of the Term of this Agreement, Dragon shall
have the exclusive right to be supplied by Polymun, in the Market Area with
EPO which will be used by Dragon in accordance with the rights granted
hercunder in the Market Area. Dragon agrees that it will purchase the
minimum quantities of EPO manufactured by Polymun for Dragon during the
Exclusive Period and Non Exclusive Period as follows:
- * * * of EPO for the first twelve (12)-month after the Commercial
EPO Availability Date,
- * * * of EPO for the second twelve (12)-month after the
Commercial EPO Availability Date,
- * * * of EPO for the third twelve (12) month after the Commercial
EPO Availability Date.
* * * CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE
COMMISSION.
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- * * * grams of EPO for each year of the Non-exclusive Period
until its expiry.
(d) During the Non-Exclusive Period of the Term of this Agreement, Polymun
is free to sell and market its EPO to any customers in the Market Area,
other than * * * subject to the terms and conditions set forth herein,
including but not limited to, the Most Favored Pricing and the
non-competition clause in Section 5 of this Agreement.
2.3 Polymun to provide documentation and technical advice to Dragon
(a) Polymun will provide Dragon with all necessary documentation in its
custody and control required by regulatory authorities in a chemical
manufacturing controls (CMC) documentation for the registration of the
Licensed Cell Line and the associated EPO. No obligation is established to
provide data with respect to toxicology, experiences in human application
or any other data beyond the ICH-specifications. In the event that this
documentation contains information proprietary to Polymun, such information
shall be transmitted at Dragon's request to relevant regulatory authorities
for submission as a "closed part" of a submission for registration and
approval. Costs for provision of this documentation are to be borne by
Polymun.
(b) Polymun, by virtue of its prior experience of developing drugs and
biological products from recombinant proteins, will provide advisory
assistance to Dragon during the time Polymun is developing the EPO
manufactured at its own facilities. Such advisory assistance shall apply to
issues of outsourcing of tests and assays for protein characterization and
preclinical studies. Polymun will provide this advice at no cost to Dragon,
PROVIDED, HOWEVER, it will do so on a basis whereby Polymun's qualified
expert staff members do not encounter disruption of their normal duties.
2.4 Transfer of Technology from Polymun to Dragon
(a) Subject to the conditions set forth in Annex B, Dragon, in its sole
discretion, can pay Polymun, as specified in Annex B, to transfer to Dragon
the Polymun-developed cell culture and downstream processes for the
manufacture of EPO with the Licensed Cell Line for manufacture in any
facility designated by Dragon ("Transferred Technology"). Polymun agrees to
render any and all assistance necessary in the localization of the
Transferred Technology in the Dragon-designated facility, PROVIDED,
HOWEVER, Dragon pays Polymun's fees and expenses for rendering the
aforesaid assistance, should Polymun's fees and expenses exceed
(euro)200,000 (TWO HUNDRED THOUSAND EUROS) in the case of Dragon's exercise
rights described in Annex B:1.(a) or (euro)50,000 (FIFTY THOUSAND EUROS) in
the case of Dragon's exercise of rights described in Annex B:1.(b). Polymun
shall advise Dragon of the amount of these fees in writing within a
reasonable time after Polymun's fees and/or expenses exceed the amounts
enumerated above and Dragon shall remit payment to Polymun within thirty
(30) days.
(b) Limitation on Dragon's usage of Polymun technology and its products
(i) If Dragon obtains the Transferred Technology in accordance with
Section 2.4(a), immediately preceding this section, it is agreed that
Dragon will not make, use, offer to sell, sell, import and/or export
the Transferred Technology in, to, or from * * *. With this exception
Dragon's rights pertaining to the Transferred Technology apply in the
remainder of the Market Area.
* * * CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.
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2.5 Both parties to share unilaterally developed information
(a) Polymun will, under the provisions set forth in Section 2.1 through 2.4
disclose to Dragon all improvements and/or developments to the process
applicable to the Licensed Cell Line, cell culture and downstream
purification process for manufacturing and/or producing EPO. The results of
such technology Improvements will be immediately disclosed to Dragon and
made available for its use at no cost, however, these will be owned by
Polymun and its Affiliates and Dragon agrees that it will not transfer any
such Improvements and/or developments to any third parties.
(b) Dragon acknowledges Polymun's intent to sell certain amounts of EPO in
* * * and will support this effort by providing any data concerning
preclinical and clinical development of the EPO into a therapeutic drug to
* * * regulatory authorities via Polymun. Subject to this Section 2.5(b)
this information otherwise remains Dragon's exclusive property.
2.6 Option of First Information
(a) Polymun hereby grants to Dragon an option to obtain information
pertinent to the making, using, offering to sell, selling, importing and/or
exporting and subsequent commercialization of additional Therapeutically
Equivalent Recombinant Proteins, subject to obligations of confidentiality
imposed upon Polymun by third parties, if any. Such subsequent
commercialization shall be the subject of a separate development and
manufacturing agreement.
2.7 Nothing in this Agreement confers on Dragon any additional interest,
license, or right in respect of either the Licensed Cell Line or the Licensed
Intellectual Property, other than as set out in Sections 2.1 through 2.6, and
Annexes A-C.
PART 3
PRICING, ORDERS AND PAYMENT
Price of EPO Manufactured by Polymun for Dragon
3.1 Polymun will sell the manufactured EPO to Dragon at the prices set out in
Annex C, such prices to be in effect for the entire seven (7)-year period of the
agreement.
3.2 (a) Prices are FOB (* * * International Airport) exclusive of sales tax and
import duties, or any other taxes and duties now existing or hereinafter imposed
by national authorities or those of any political subdivision thereof upon the
sale of EPO by Polymun to Dragon, which are to be paid by Dragon, along with
costs of transportation and insurance to cover the risk of loss.
3.2 (b) Prices as set forth in Annex C are also exclusive of customs fees,
excise and sales taxes in the importing country, and other taxes in the
importing country in the nature of a sales tax, now existing or hereinafter
imposed by national authorities or those of any political subdivision thereof
upon the sale of EPO by Polymun to Dragon. In the event any such fee or tax is
imposed on, or assessed against, Polymun as a result of the sale and delivery of
EPO hereunder, (the "Additional Taxes"), Polymun shall separately itemize such
Additional Taxes on the applicable invoices and Dragon shall pay the Additional
Taxes within thirty (30) days after receiving such invoices from Polymun.
* * * CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.
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3.3 Notwithstanding any change in the EPO pricing set out in Annex C, no price
change will effect the price of any EPO for which a Manufacturing Order, as
defined in Section 3.4 hereinafter, has been issued and accepted.
Manufacturing Orders
3.4 Dragon will prepare Manufacturing Orders for all EPO and each such order
will specify the quantity of EPO and any other information that either Party
considers necessary ("Manufacturing Orders"). Such Manufacturing Orders cannot
be amended without the consent of Dragon.
3.5 Polymun will acknowledge receipt of all Manufacturing Orders by a facsimile
sent within five business days after receipt of the Manufacturing Order from
Dragon.
Delivery Times
3.6 Polymun will start the production of EPO within a 3-month period of
receiving a Manufacturing Order from Dragon (the "3-Month-Period"). Thereafter,
depending upon Polymun's available capacity, it will at minimum fulfil
Manufacturing Orders received from Dragon up to the first * * * within six
(6)-months from the 3-Month-Period and within 12-months for any additional
amount over * * *, not to exceed * * *. If Polymun is able to deliver the EPO in
a shorter period of time than specified in the Manufacturing Order, PROVIDED,
the Manufacturing Order takes the foregoing time periods into consideration, it
will notify Dragon of such earlier delivery date.
3.7 Notwithstanding Section 3.6, if Polymun for any reason canno meet the
delivery times in a Manufacturing Order, it will notify Dragon of the expected
delivery date when it confirms the Manufacturing Order pursuant to Section 3.5.
Upon receipt of Polymun's notice of the expected delivery date, Dragon may, on
notice delivered to Polymun within five business days of Dragon's receipt of
Polymun's confirmation of the Manufacturing Order, withdraw the Manufacturing
Order. If the Manufacturing Order is not withdrawn, the delivery times in
Section 3.6 will be deemed to be amended to the time set out in Polymun's
confirmation of the Manufacturing Order.
Payment
3.8 Dragon will make full payment for EPO shipped to it by Polymun on or before
sixty (60) days after the date of shipment provided that Dragon has received
from Polymun the following documents:
(a) Polymun's detailed invoice;
(b) customs' invoice;
(c) air waybill;
(d) packing list; and
(e) pharmaceutical certificate of analysis, quality assurance and
quality control documents and batch certificates.
* * * CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.
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Payments, that are not been received within ninety (90) days after the date of
shipment will be assessed interest at the rate of 1 % per month commencing as of
the 31st day after the date of shipment. Dragon's payment obligation under this
Section 3.8 shall survive any termination or expiration of this Agreement.
Additional Procedures
3.9 The Parties recognize that additional procedures related to the purchase
and shipment of EPO may be necessary from time to time during the term of this
Agreement and each will cooperate with the other to formulate and implement new
policies and procedures, when necessary
PART 4
SHIPPING, STORAGE, AND INSPECTION
Shipping
4.1 Polymun will ensure that each shipment conforms to the Manufacturing Order
and all EPO will be packaged for shipment in accordance with recognized
standards for the maintenance of the cold chain from Polymun's manufacturing
facility to a Dragon-designated facility, through a mutually agreed upon air
courier service. Polymun will equip each shipment with a temperature recording
unit that must be sent back to Polymun upon arrival by Dragon to ensure the cold
chain documentation. To permit the proper tracking of the shipment of EPO, the
air waybill number will be transmitted to Dragon as soon as practicable after
shipment of EPO,
Storage and Inspection
4.2 Dragon or its designated consignee will promptly store all EPO immediately
upon receipt in appropriate cold storage and will, as soon as practicable after
receipt of any EPO, inspect the shipment and advise Polymun of conformity with
the Manufacturing Order.
Testing of EPO, Audit of Polymun's Manufacturing Facility
4.3 Dragon may arrange for the EPO to be tested by a mutually agreed upon
independent third party to determine whether the biological activity or purity
of the EPO is within manufacturing specifications as provided in the Product
Specifications. Additionally to the test sample drawn from the EPO-shipment a
retention sample from the same EPO-Lot must be tested in the same test setting
together with a certified EPO-reference standard. Dragon will promptly notify
Polymun of such test results once received.
4.4 If the testing conducted under Section 4.3 determines that both samples of
EPO fail to meet the standards of biological activity or purity required under
the terms of the Product Specifications, Dragon will be entitled to receive, at
the option of Polymun, a refund of the purchase price as specified in the
Manufacturing Order or a replacement shipment of the EPO. If the results of
Polymun's retention sample indicate that the EPO does meet the standards set out
in the Product Specifications, Polymun and Dragon will use good faith efforts to
resolve the discrepancy and make a determination as to the suitability of the
shipment for use in elaboration into a finished drug product.
4.5 Dragon, on behalf of itself and/or its Affiliates and/or its customers may
arrange for CGMP compliance audits to be conducted at Polymun's manufacturing
facilities. Dragon will give
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Polymun not less than forty-five (45) days' notice prior to conduct of such
audits, unless Polymun agrees to a lesser period of time. Dragon will not
conduct or permit its Affiliates or customers to conduct "no-notice" audits of
Polymun's manufacturing facilities.
PART 5
CONFIDENTIALITY, NON DISCLOSURE AND NON-COMPETION
Confidentiality and Non-Disclosure
5.1 Definition
For purposes of this Agreement, "Confidential Information" will include, but not
be limited to inventions, discoveries, Technical Information, Trade Secrets,
Know-How provisional patents, patent applications, computer software code,
designs algorithms, and structures; product information; medical, biomedical,
research, testing and development information; pricing; lists of customers and
clients and other related information; financial data and information; business
plans and processes; marketing and advertising material, and any other
information in any media or format of each Party that it shares with the other
Party or advises the other Party that the information is to be kept
confidential. Certain materials may be affixed with a legend indicating their
confidential nature. The absence of any such legend on any item containing or
relating to Confidential Information, however, will not give rise to any
inference that the information contained therein or derived therefrom is not
Confidential Information.
5.2 Treatment of Confidential Information
The Parties each recognize that the other Party's Confidential Information
constitutes highly valuable and proprietary Confidential Information. Licensors
and licensee each agree that during the Terms of the Agreement and for three (3)
years thereafter, it will keep confidential, and will cause its Officers,
directors, employees, consultants, agents, independent contractors, Affiliates.
sublicensees, assignees and any other persons or entities to ,whom Confidential
Information is disclosed (the foregoing are sometimes referred to hereinafter
collectively and individually, respectively) as "Recipients" and "Recipient") to
keep confidential and not disclose or publish any Confidential Information of
the other Party. Neither Licensors nor Licensee nor any Recipients shall use
Confidential Information of the other Party for any purpose whatsoever other
than to exercise any rights granted to it or reserved by it hereunder.
5.3 Limited Disclosure
The Parties each agree that any disclosure of the other Party's Confidential
Information to any Recipient shall be made only if and to the extent necessary
to carry out a Recipient's rights and responsibilities under this Agreement
(including but not limited to the officers, employees, agent contractor
sublicensee, agent or legal advisor of Recipient), shall be limited to the
maximum extent possible consistent with such rights and responsibilities and
shall only be made to persons who are bound by written confidentiality
obligations to maintain the confidentiality thereof and not to use such
Confidential Information except as expressly permitted by this Agreement. The
parties each further agree not to disclose or transfer the other Party's
Confidential Information to any third parties under any circumstance without the
prior written approval from the other Party (such approval not to be
unreasonably withheld), except as otherwise required by law, and except as
otherwise expressly permitted by this Agreement. Each Party shall take such
action, and shall cause its respective Recipients to take such action, to
preserve the confidentiality of its own Confidential Information, and in no
event, less than reasonable care. Each Party, upon the request
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of the other Party, will return all the Confidential Information disclosed or
transferred to it by the other Party pursuant to this Agreement, including all
copies end extracts of document and all manifestations in whatever form, within
sixty (60) days of the request or, if earlier, the termination or expiration of
this Agreement, PROVIDED, HOWEVER, that a Party may retain Confidential
Information of the other party relating to any right which survives such
termination and one copy of all other Confidential Information may be retained
for archival purposes.
5.4 Each Party may disclose information to the extent such disclosure is
reasonably necessary in
(a) filing and prosecuting patent applications and maintaining patents, or
(b) filing, prosecuting or defending litigation or
(c) complying with applicable laws, regulations or court orders PROVIDED,
HOWEVER, that if a Party is required to make any such disclosure of the
other Party's Confidential Information, it will give reasonable advance
notice to the other Party of such disclosure requirement and will use
Commercially Reasonable Efforts to assist such other Party in efforts to
secure confidential treatment of such information required to be disclosed.
5.5 Specific aspects or details of Confidential Information shall not be deemed
to be within the public domain or in the possession of a Party merely because
the Confidential Information is embraced by more general information in the
public domain or in the possession of such Party. . Further, any combination of
Confidential Information shall not be considered in the public domain or in the
possession of a party merely because individual elements of such Confidential
Information are in the public domain or in the possession of such Party.
5.6 Exclusion
Confidential Information does not include any information or Know-How which:
(a) is already public or becomes available to the public through no breach
of this Agreement by either Party, or
(b) was in the receiving Party's possession prior to receipt from the
disclosing Party, or
(c) is lawfully received independently from a third party who is free to
disclose such information to either Party, or
(d) is independently developed by, or on behalf of, either Party, or
(e) is required to be disclosed by a government agency or court of law. In
such a case, the requested Party shall give the other Party notice
immediately upon receipt of such a request to enable it to take such action
as it may deem appropriate to protect the confidentiality of the
information, including but not limited to seeking injunctive relief.
5.7 In the case that Dragon exercises the right to manufacture EPO in its own
facilities using a Master Cell Bank developed and transferred by Polymun to
Dragon, Dragon recognizes that this Master Cell Bank constitutes a major
component of the Licensed Intellectual Property, and
12
covenants that it will take any and all necessary steps to safeguard and prevent
transmission of all or a part of the Master Cell Bank to unauthorized parties
not covered by this Agreement. In the event that Dragon should breach this
Section 5.7, it is agreed that damages are difficult to ascertain and would
require a trial and expert testimony, thus the parties agree that it is
reasonable, and that it is not intended as a penalty to impose liquidated
damages in the amount of (euro)10 million (TEN MILLION EUROS), which amount is
the same amount that is provided for in Annex. B, if Dragon were to acquire the
fully paid off royalty-free license to the Transferred Technology. For its part,
Polymun agrees to deposit) at its own expense, a separate Master Cell Bank with
either a contract service or government-sponsored organization in order that a
Master Cell Bank is available in the case of catastrophic failure of cell
banking operations at Polymun's facilities.
5.8 Publicity
Neither Party may publicly disclose the existence or terms of this Agreement
without the prior written consent of the other Party, PROVIDED, HOWEVER, that
either Party may make such a disclosure
(a) to the extent required by law or by the requirements of any nationally
recognized securities exchange, quotation system or over-the-counter market
on which such Party has its securities listed or traded or
(b) to any investors, prospective investors, lenders and other potential
financing sources who are obligated to keep such information confidential.
In this regard, the Parties will use Commercially Reasonable Efforts to obtain a
written nondisclosure agreement, but it is understood that certain potential
financing sources may refuse to sign such agreements (the "Non-Signers"), in
which event, the Parties shall give notice to each other in advance of
disclosure contemplated to a Non-Signer and will coordinate with each other the
contemplated disclosure and in all other situations (i.e, other than with
Non-Signers), the disclosing Party shall make reasonable efforts to provide the
other Party with notice beforehand and to coordinate with the other Party with
respect to the wording and timing of any such disclosure. The Parties, upon the
execution of this Agreement, will mutually agree to a press release with respect
to the Agreement for publication. Once such press release or any other written
statement is approved for disclosure by both Parties, either Party may make
subsequent public disclosure of the contents of such statement without the
further approval of the other Party. Notwithstanding the foregoing, nothing in
this Section 5 is intended to prohibit or inhibit either Party from
communications with an Affiliate and any disclosure requirements incumbent upon
either Party by applicable law or regulation, including but not limited to
security laws and/or regulations.
5.9 The Mutual Non-Disclosure Agreement effective January 10, 2003 (hereinafter
"Prior Agreement") between the Parties is superseded by the confidentiality
provisions of this Section 5 except in so far as obligations of confidentiality,
survive termination of that agreement, and in so far as that agreement was made
under and to be construed according to the laws of the Province of British
Columbia of Canada, without giving effect to the principles of conflicts of law,
it will to the extent of the surviving provisions be construed under the laws of
Austria, without reference to its conflicts of law, rules, as is the within
Agreement. Similarly, any breach of the surviving provisions of that agreement
will, as is the case of all other provisions within this Agreement, be submitted
by the Parties irrevocably to the exclusive jurisdiction of Austria.
13
Non-Competition
5.10 During the Exclusive Period, Polymun will not, directly or indirectly,
engage in or carry out the business of licensing, distributing, marketing or
selling the Licensed Cell Line or EPO outside of * * *, other than as
contemplated under this Agreement between Polymun and Dragon.
5.11 During the Non-Exclusive Period and subject to the fulfillment of the Most
Favored Pricing granted to Dragon, Polymun will not directly or indirectly,
engage in or carry out the, business of licensing, distributing, marketing or
selling the Licensed Cell Line or EPO to any then existing customers or
licensees of Dragon. The Parties agree that an existing customer or sub-licensee
is respectively one who purchases in gram quantities or one who sells in gram
quantities from Dragon or as a sub-licensee of Dragon, or with whom Dragon has
executed letters of intent, collaboration agreements, or material transfer
agreements incident to new drug development or delivery technologies within any
twelve (12) month period commencing with the Commercial EPO Availability Date.
(a) One year prior to the expiration of the Exclusive Period. Dragon shall
prepare and deliver to Polymun a list of then existing customers or
sub-licensees of Dragon ("Non-Competition List") and such Non-Competition
List shall be updated three (3) months prior to the expiration of the
Exclusive Period and further on in twelve (12) month intervals during the
Non-Exclusive Period. This Non-Competition List will then serve as the
basis of the non-competition clause in this Section 5.11.
5.12 The Parties agree and acknowledge that all the restrictions in this
Agreement, including but not limited to those in Section 5 are reasonable for
the protection of the legitimate business interests and proprietary rights of
the parties and their Affiliates, if any, and hereby waive all defenses to the
strict enforcement thereof.
PART 6
DISPUTE RESOLUTION
Disputes
6.1 If at any time there is a dispute between the Parties with respect to any
matter relating to this Agreement, including the validity thereof any Party that
wishes the issue to be considered further will give notice to the other that it
requires the dispute to be decided under the terms of this Agreement.
Referral to Senior Officers
6.2 If a notice is given under Section 6.1, a senior officer designated by each
Party will undertake discussions for the purpose of settling the dispute. A
decision reached by these officers and communicated in writing to the Parties
will be determinative of the dispute and will be binding on each Party.
*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.
14
PART 7
TERM AND TERMINATION
Term
7.1 This Agreement will be in effect from the signing of this Agreement until
seven (7) years subsequent to the Commercial EPO Availability Date and will be
renewed automatically for successive one year terms unless otherwise terminated
in accordance with the terms hereof (the `Term").
Termination by Either Party
7.2 Either Party may terminate this Agreement
(a) upon notice given at least one hundred eighty (180) days before the end
of the current Term, such termination to come into effect at the end of
that Term, or
(b) immediately upon written notice if the other Party
(i) is in breach or violates any of the terms and conditions of
or fails to perform any of its obligations under this Agreement
and, after receiving notice from the other Party, does not cure
such default within thirty (30) days, or
(ii) becomes insolvent, bankrupt, makes an assignment for the
benefit of its creditors or has a receiver, receiver/manager,
trustee or liquidator appointed in respect of its business or its
assets,
Termination by Dragon
7.3 Notwithstanding any other provision of this Agreement, Dragon may terminate
this Agreement immediately upon written notice to Polymun, if
(a) Dragon and Polymun have not agreed to a revised pricing schedule after
the entire 7 year period of this agreement
(b) Polymun has failed to satisfy any material provision of the current
Scope of Work described in Section 2, including a failure to meet any
minimum Product Specifications, or
(c) there is a breach by Polymun of the non-disclosure requirements of this
Agreement.
Termination by Polymun
7.4 Notwithstanding any other provision of this Agreement, Polymun may
terminate this agreement immediately upon written notice to Dragon, if
(a) Dragon and Polymun have not agreed to a revised pricing schedule after
the entire 7-year period of this agreement
(b) Dragon fails to meet the minimum annual requirements applicable in any
one year respecting either minimum royalty payments and/or a milestone
payment and/or a
15
minimum purchase requirement. Polymun at its option may give Dragon a
thirty (30) day period to cure any of the foregoing breaches, or
(c) there is a breach by Dragon of the non-disclosure requirements of this
Agreement.
Effect of Expiration and Termination
7.5 Expiration or termination of the Agreement shall not relieve the Parties of
any obligations accruing prior to such expiration or termination. The provisions
of Section 2.1 through Section 2.6, in particular to all confidential Financial
Information, Technical Information, Business Information and other license
matters shall survive the expiration or termination of the Agreement unless
stated otherwise in this Agreement.
7.6 Upon termination of this Agreement pursuant to Section 7.2(a), Polymun will
be required to complete any and all existing Manufacturing Orders as at the date
of termination unless it is unable to as a result of physical damage occurring
to its plant, force majeure of any other natural phenomena causing the situation
and Dragon will be required to receive and pay for all EPO shipped in connection
with such Manufacturing Orders and be current as to all other previously shipped
EPO pursuant to Manufacturing Orders.
7.7 Upon termination of this Agreement pursuant to Section 7.2(b)(i) and/or
(ii), prior to the achievement of certain milestones in Annex A, Dragon is not
obliged to pay for the unfulfilled milestones.
PART 8
LIABILITIES AND INDEMNIFICATION
Limitation of Liability
8.1 Polymun will not be liable to Dragon or any of its Affiliates for any
incidental, special, or consequential damages resulting from exercise of the use
of the EPO. The maximum amount of any liability of Polymun to Dragon will be the
amount of the Manufacturing Order, if it was proven not to meet the Product
Specifications.
Indemnification
8.2 Dragon will indemnify, hold harmless, and defend Polymun and its
Affiliates, its officers, employees, and agents against any and all claims,
suits, losses, damage, costs, fees, and expenses resulting from or arising out
of exercise of the rights granted under this Agreement, the use of the purchased
EPO and the sale of the purchased EPO (after it has been elaborated into
finished drug form). This indemnification will include, but will not be limited
to, any product liability.
8.3 Polymun assures Dragon and its Affiliates that the Licensed Cell Line and
processes it will use for the manufacture of EPO (together the "Process") are to
its knowledge free from legal impediments to their use, and subject to the
disclaimer in this Section 8.3, will indemnify and hold Dragon and its
Affiliates harmless from any legal action taken by any Party seeking to enjoin
Dragon and/or its Affiliates from commercializing EPO manufactured by Polymun's
technology, PROVIDED, HOWEVER, POL YMUN MAKES NO REPRESENTATION OR WARRANTY
EXPRESS OR IMPLIED AS TO WHETHER OR/NOT COMMERCIALIZING
16
EPO INCLUDING BUT NOT LIMITED TO MAKING, USING, SELLING, OFFERING TO SELL,
IMPORTING AND/OR EXPORTING EPO MANUFACTURED BY POLYMUN TECHNOLOGY HEREUNDER,
INFRINGES ANY INTELLECTUAL PROPERTY AND/OR IF PATENTS ARE INVOLVED, THAT THEY
ARE VALID AND THAT THERE IS FREEDOM TO OPERATE OR THAT THE PROCESS AND/OR THE
EPO MANUFACTURED IS FIT FOR A PARTICULAR PURPOSE.
Insurance
8.4 Polymun at its sole cost and expense, will insure its activities in
connection with the work under this Agreement and obtain, keep in force, and
maintain insurance or an equivalent program of self insurance.
Notice of Claim
8.5 Polymun and Dragon will promptly notify each other in writing of any claim
or suit brought against either Party in respect of which either Party intends to
invoke the provisions of this Part 8. Both Parties will keep each other informed
on a current basis of its defense of any claims pursuant to this Part 8 and will
not take any action that is harmful to the other Party.
PART 9
GENERAL PROVISIONS
Entire Agreement
9.1 This Agreement constitutes the entire agreement between the Parties and
supersedes very previous agreement, communication, negotiation, representation
or understanding, whether oral or written, expressed or implied, between the
Parties with respect to the subject matter of this Agreement except for the
Mutual Non-Disclosure Agreement insofar as this Agreement incorporates certain
provisions of that agreement.
9.2 No director, officer, employee or agent of any party has any authority to
make any representation or commitment not contained in this Agreement and each
Party has executed this Agreement without reliance upon any such representation
or commitment.
Force Majeure
9.3 No Party will be liable for its failure to perform any of its obligations
under this Agreement as a result of Acts of God (including all natural
disasters), strikes, acts of terrorism, lockouts, civil disturbances,
government, including but not limited to all regulatory authorities such as the
FDA, Austrian Ministry of Health, the EMEA, or court ordered interruptions or
delays, acts of war and riots, but that either Party to this Agreement may elect
to terminate it upon three months written notice to the other after it is
determined that the situation resulting from force majeure has not been remedied
within three months after its occurrence.
Severability
9.4 If any provision of this Agreement is at any time unenforceable or invalid
for any reason it will be severable from the remainder of this Agreement and
this Agreement will be construed as though such provision was not contained
herein and the remainder will continue in full force and effect and be construed
as if this Agreement had been executed without the invalid or
17
unenforceable provision and the Parties will substitute another provision, if
necessary, that is enforceable and is as close in meaning and content as the
unenforceable provision without being unenforceable.
Amendments
9.5 This Agreement may not be amended except in writing signed by both Parties.
Assignment
9.6 Neither Party will be entitled to assign this Agreement without the written
consent of the other Party, which consent may be withheld for any reason or no
reason. Notwithstanding the foregoing, Dragon may assign this Agreement to an
Affiliate, provided it remains primarily liable under this Agreement.
Governing Law
9.7 This Agreement is and will be deemed to have been made in Austria. For all
purposes it will be governed exclusively by and construed and enforced in
accordance with the laws of Austria and the rights and remedies of the Parties
will be determined in accordance with those laws, without reference to Austria's
conflicts of law rules.
Jurisdiction
9.8 Each of the Parties irrevocably submits to the exclusive jurisdiction of
the courts of Austria in the city of Vienna and all Courts having appellate
jurisdiction thereover. The Parties also agree that they will accept service of
process by hand delivery or courier service with the signed receipt by an
individual employed by the party of suitable age and discretion.
Notice
9.9 To be effective, a notice, request, demand or direction (each for the
purposes of this provision a "Notice") to be given pursuant to this Agreement by
one Party to another Party must be in writing and must be
(a) delivered by hand or by mail, or
(b) received by telecopier transmission or other similar from of written
communication by electronic means, provided same allows)
in each case addressed as applicable as follows:
If to Dragon at:
0000-0000 Xxxx Xxxxxxxx Xx.
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
Attention: Xx. Xxxxxxxxx Xxxx
Fax: x0 000 000 0000
with a copy to such other offices of Dragon as may be specified by Dragon
to Polymun.
18
If to Polymun at:
Xxxxxxxxxx Xxxxxx 00
X-0000 Xxxxxx, Xxxxxxx
Attention: Prof. Xx. Xxxxxxx Xxxxxxxx
Fax: x00 0 0000000
with a copy to Xxxxxxx X. Xxxxxx,
Ferskos LLC,
Chrysler Center,
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000, XXX
Fax: x0000 000 0000
or to such other address or fax number as is specified by the addressee by
notice to the other Party.
9.10 A notice delivered or sent in accordance with this section, Section 9.9 is
only effective if actually received and will be deemed to have been received
between the hours of 9:00 a.m. and 5:30 p.m. otherwise it will be deemed to have
been received on the next business day.
No Partnership
9.11 Nothing in this Agreement will constitute, by any means, a partnership or
joint venture or similar legal relationship and/or entity existing between the
Parties. The relationship of the Parties established by this Agreement is that
of independent contractors. Nothing contained in this Agreement shall be
construed to create any other relationship such that one Party shall have the
power to direct or control the day-to-day activities of the other Party or have
any right, power or authority to bind the other or assume, create or incur any
expense, liability or obligation, expressed or implied, on behalf of the other
Party. All financial obligations associated with each Party's business are the
sole responsibility of that Party. It is mutually agreed and understood that
neither Party to this Agreement is authorized to act as an agent for the other
Party by virtue of this Agreement.
Binding Effect
9.12 This Agreement will ensure to the benefit of and be binding upon the
respective successors and permitted assigns of the Parties.
Further Assurances
9.13 Each Party will, at such Party's own expense and without expense to the
other Party, execute and deliver such further agreements and other documents and
do such further acts and things as the other Party reasonably requests to
evidence, carry out or give full force end effect to the intent of this
Agreement.
19
Counterparts
9.14 This Agreement may be executed in any number of counterparts with the same
effect as if both Parties to this Agreement had signed the same document, and
all counterparts will be construed together and constitute one and the same
instrument.
Survival
9.15 Unless otherwise expressly stated in this Agreement, Sections 5, 6, 7, 8, 9
and 10 shall survive the termination or expiration of this Agreement.
PART 10
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PARTIES
The Parties each represent and warrant that, as of the Effective Date:
10.1 Neither the execution nor the delivery of this Agreement nor the
consummation of the transactions contemplated hereby nor compliance with nor
fulfilment of the terms and provisions of this Agreement will conflict with or
result in a breach of the terms, conditions, covenants or provisions of, or
constitute a default of, or violate any material statute, code, rule, regulation
or other laws, judgment, order, award, decree or other restriction by contract
or by action of law, by which either Party is bound.
10.2 Both Parties have full power and authority to do and perform all acts and
things required to be done by it under this Agreement. This Agreement
constitutes the valid and binding obligation of the Parties, enforceable in
accordance with its terms.
10.3 Each Party represents that it is duly incorporated, in the case of Dragon
in the State of Florida, USA and in the case Polymun under the laws of the
Republic of Austria.
10.4 Each Party represents that the signatories hereto are duly authorized to
execute this Agreement on behalf of their respective corporations.
IN WITNESS WHEREOF this Agreement was executed by the Parties as of the day and
year first above written.
Dragon Pharmaceutical Inc.
By: /s/ Xxxxxxxxx Xxxx
---------------------------------------------------
Xx. Xxxxxxxxx Xxxx, President and CEO
Polymun Scientific Immunbiologische Forschung GmbH
By: /s/ Prof. Xx. Xxxxxxx Xxxxxxxx
--------------------------------------------
Prof. Xx. Xxxxxxx Xxxxxxxx
20
Annex A:
Milestone Payments for the Development and Manufacturing Agreement between
Polymun and Dragon.
------------------------------------------------------------------------------------------- -------------
Milestones Payment
------------------------------------------------------------------------------------------- -------------
1. On signing the Agreement. (euro)100,000
2. On satisfactory completion of the adaptation of the recombinant cell line to (euro)100,000
grow and manufacture EPO in serum/protein-free medium.
3. On demonstration & documentation proving that said recombinant CHO-cells (euro)100,000
shall yield not less than * * */EPO per liter raw supernatant
harvested from a scaleable fed-batch process.
4. On completion of preparation of a master cell bank (MCB) that provides a (euro)100,000
satisfactory characterization of the MCB for regulatory
authorities.
5. Transfer of * * * vials of the MCB including documentation to Dragon. (euro)100,000
------------------------------------------------------------------------------------------- -------------
Total: (euro)500,000
------------------------------------------------------------------------------------------- -------------
*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.
21
Annex B:
1. As per Section 2.4 of this Agreement, Dragon, at its sole discretion may
pay Polymun to transfer to Dragon the "Transferred Technology" in exchange for a
payment from Dragon to Polymun, as follows:
(a) In exchange for a one-time payment of 10 million (TEN MILLION EUROS)
prior to the conclusion of the Exclusive Period, Dragon may obtain a fully
paid, royalty-free, Semi-Exclusive License to use the Transferred
Technology in the Field with the right to sub-license (Semi-Exclusive
License as used in this Agreement is defined as an exclusive license to use
the Transferred Technology in the Field subject only to the licensor having
the same right), or alternatively;
(b) Dragon may obtain a Semi-Exclusive License to use the Transferred
Technology in the Field provided the following payments and royalty
provisions are observed. A one-time royalty-fee of 1.5 million (ONE AND A
HALF MILLION EUROS) to Polymun contemporaneously with the grant by Polymun
to Dragon of the Semi-Exclusive License and a running royalty of * * * of
Net Sales of any products derived from the use of the Transferred
Technology during the Terms of this Agreement.
(i) Irrespective of the Net Sales, the minimum annual royalty to be
paid to Polymun by Dragon is 200,000 (TWO HUNDRED THOUSAND EUROS) per
year, payable before the last day of each calendar year.
2. Dragon agrees that Polymun has the right to audit the records of Dragon
pertaining to Net Sales both during performance and after completion of this
Agreement. Dragon will make available all records, papers, vouchers, books,
correspondence or other documentation or evidence pertaining to this Agreement
as requested by Polymun at all reasonable times for review, inspection or audit
by duly authorized officials of Polymun or Polymun's designated accountants. If
the results of such an audit demonstrate an under-reporting of royalties of ten
percent (10%) or more for any Royalty-Reporting Period, then Dragon shall pay
the reasonable costs incurred by Polymun plus the outstanding royalties.
*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.
22
Annex C:
1. As per Section 2.2 of this Agreement, the terms and conditions pursuant to
which Dragon shall purchase EPO from Polymun are:
------------------------------------------------------- -----------------------------------------------------
Amount of bulk purified EPO purchased per year by Pricing ((euro) per gram) for Dragon
Dragon
------------------------------------------------------- -----------------------------------------------------
1 gram - 50 grams * * *
------------------------------------------------------- -----------------------------------------------------
51 grams - 75 grams * * *
------------------------------------------------------- -----------------------------------------------------
76 grams - 100 grams * * *
------------------------------------------------------- -----------------------------------------------------
101 grams - 125 grams * * *
------------------------------------------------------- -----------------------------------------------------
126 grams - 150 grams * * *
------------------------------------------------------- -----------------------------------------------------
151 grams - 175 grams * * *
------------------------------------------------------- -----------------------------------------------------
176 grams - 200 grams * * *
------------------------------------------------------- -----------------------------------------------------
201 grams - 250 grams * * *
------------------------------------------------------- -----------------------------------------------------
251 grams - 300 grams * * *
------------------------------------------------------- -----------------------------------------------------
301 grams - 350 grams * * *
------------------------------------------------------- -----------------------------------------------------
351 grams - 400 grams * * *
------------------------------------------------------- -----------------------------------------------------
401 grams - 450 grams * * *
------------------------------------------------------- -----------------------------------------------------
451 grams - 500 grams * * *
------------------------------------------------------- -----------------------------------------------------
501 grams - 600 grams * * *
------------------------------------------------------- -----------------------------------------------------
601 grams - 700 grams * * *
------------------------------------------------------- -----------------------------------------------------
701 grams - 800 grams * * *
------------------------------------------------------- -----------------------------------------------------
2. For and in consideration of Dragon having entering into this Agreement and
for so long as Dragon is meeting its obligations under the Agreement,
Polymun will sell the EPO to Dragon for * * * less than the price Polymun
is selling the EPO for, to other customers at the time that Polymun accepts
the Manufacturing Orders from Dragon.
3. Polymun extends the above pricing schedule into the four (4)-year period
following the initial Exclusivity Period, providing that Dragon meets the
requirements for purchase amounts in those years according to conditions
laid down in Section 2.2.C.
*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE COMMISSION.
23
