EXHIBIT 10.15
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
JOINT DEVELOPMENT,
MARKETING AND DISTRIBUTION AGREEMENT
BETWEEN
PALL CORPORATION
AND
V.I. TECHNOLOGIES, INC.
FEBRUARY 19, 1998
THIS FORM OF AGREEMENT IS SUBJECT TO REVISION UPON APPROPRIATE NOTIFICATION AND
SHALL BE KEPT CONFIDENTIAL PURSUANT TO THE TERMS OF THE MUTUAL NON-DISCLOSURE
AGREEMENT ENTERED INTO BETWEEN PALL CORPORATION AND V.I. TECHNOLOGIES, INC. AS
OF MARCH 21, 1997.
TABLE OF CONTENTS
BACKGROUND 1
ARTICLE I DEFINITIONS......................................................... 1
Section 1.01 Defined Terms............................................... 1
Section 1.02 Other Definitional Provisions............................... 6
ARTICLE II COOPERATIVE DEVELOPMENT............................................ 7
Section 2.01 Cooperative Development..................................... 7
Section 2.02 Management Board............................................ 7
(a) Constitution.................................................... 7
(b) Voting.......................................................... 7
(c) Deadlock........................................................ 7
(d) Responsibilities of Management Board............................ 7
Section 2.03 Review of Project Plan, Budget and Timetable................ 9
Section 2.04 Exchange of Information..................................... 9
Section 2.05 Inventions.................................................. 9
(a) Joint Inventions................................................ 9
(b) Sole Inventions................................................. 9
(c) Patent Prosecution of Inventions................................10
Section 2.06 Cost-Sharing................................................10
(a) Cost-Sharing Generally..........................................10
(b) Recordkeeping...................................................10
(c) Management Board Costs..........................................10
Section 2.07 Budget Contingencies........................................10
(a) Exceeding Previously Established Budget.........................10
(b) Reconciliation of Expenditures..................................11
Section 2.08 Responsibilities of Parties.................................11
ARTICLE III SUPPLY OF VITEX INACTIVATION COMPOUNDS AND SYSTEM MANUFACTURING...11
Section 3.01 Pall Responsibilities.......................................11
Section 3.02 Vitex Responsibilities......................................11
Section 3.03 Reference Set Production....................................12
Section 3.04 Systems Specifications......................................12
Section 3.05 Vitex Specifications........................................12
Section 3.06 Source of Supply............................................12
Section 3.07 Failure of Vitex to Meet Pall Requirements..................12
i
Section 3.08 System Improvements......................................... 13
ARTICLE IV MARKETING AND EXCLUSIVE DISTRIBUTION RIGHTS........................ 13
Section 4.01 Appointment as Exclusive Distributor........................ 13
Section 4.02 Meetings Concerning Marketing............................... 13
Section 4.03 Responsibilities of the Parties during the Exclusive
Distributorship Period...................................... 13
(a) Pall Responsibilities........................................... 13
(b) Vitex Responsibilities.......................................... 13
Section 4.04 Revenue Sharing............................................. 14
Section 4.05 NYBC....................................................... 14
ARTICLE V PATENTS, KNOW-HOW, AND LICENSE GRANTS............................... 14
Section 5.01 Vitex Sole Ownership........................................ 14
Section 5.02 Pall Sole Ownership......................................... 14
Section 5.03 Regulatory Files............................................ 14
Section 5.04 License of Vitex Patents and Vitex Know-How................. 15
ARTICLE VI PROSECUTION OF PATENT RIGHTS....................................... 15
Section 6.01 Vitex Patents............................................... 15
Section 6.02 Pall Patents................................................ 15
Section 6.03 Joint Patents............................................... 15
Section 6.04 Material; Review and Comment................................ 15
Section 6.05 Election Not to Pay Expenses................................ 15
ARTICLE VII TRADEMARKS........................................................ 16
Section 7.01 Pall Trademarks............................................. 16
Section 7.02 Vitex Trademarks............................................ 16
ARTICLE VIII REGULATORY REQUIREMENTS.......................................... 16
Section 8.01 Recalls..................................................... 16
Section 8.02 Compliance With Other Regulatory Requirements............... 17
Section 8.03 Press Releases.............................................. 17
ARTICLE IX CONFIDENTIAL INFORMATION........................................... 18
Section 9.01 General..................................................... 18
ii
Section 9.02 Exceptions.................................................. 18
Section 9.03 Survival.................................................... 19
ARTICLE X ADDITIONAL SYSTEMS.................................................. 19
ARTICLE XI REPORTS............................................................ 19
Section 11.01 Quarterly Sales Reports.................................... 19
Section 11.02 Cost of Goods/Reference Revenue............................ 20
Section 11.03 Vitex Reports.............................................. 20
ARTICLE XII BOOKS AND RECORDS................................................. 20
Section 12.01 Records.................................................... 20
Section 12.02 Retention.................................................. 20
ARTICLE XIII TERM AND TERMINATION............................................. 21
Section 13.01 Term....................................................... 21
Section 13.02 Termination by Agreement................................... 21
Section 13.03 Termination for Cause...................................... 21
ARTICLE XIV REPRESENTATIONS, WARRANTIES, COVENANTS
AND INDEMNITIES............................................................... 22
Section 14.01 Vitex Representations...................................... 22
Section 14.02 Vitex Indemnification: Representations and Warranties...... 25
Section 14.03 Vitex Indemnification: Products............................ 25
Section 14.04 Material Breach: Patents................................... 26
Section 14.05 Vitex Insurance............................................ 26
Section 14.06 Pall Representations....................................... 26
Section 14.07 Pall Indemnification: Representations and Warranties....... 28
Section 14.08 Pall Indemnification: Products............................. 28
Section 14.09 Pall Insurance............................................. 28
Section 14.10 Covenants and Assurances of Pall and Vitex................. 28
(a) Mutual Covenants of the Parties................................. 28
(b) Covenants of Vitex.............................................. 29
ARTICLE XV INFRINGEMENT....................................................... 30
Section 15.01 Defense of Third Party Infringement Suits.................. 30
Section 15.02 Third Party Patent Expenses................................ 30
iii
Section 15.03 Suits for Infringement by Others........................... 31
(a) Joint Patents................................................... 31
(b) Vitex Patents; Vitex Know-How; Pall Patents; Pall Know-How...... 31
ARTICLE XVI MISCELLANEOUS..................................................... 32
Section 16.01 Notices.................................................... 32
Section 16.02 Entire Agreement........................................... 33
Section 16.03 Amendments................................................. 33
Section 16.04 Deadlocks: Governing Law; Arbitration...................... 33
Section 16.05 Disputes Other than Deadlocks.............................. 33
Section 16.06 Assignment................................................. 34
Section 16.07 Binding Effect............................................. 34
Section 16.08 Waivers.................................................... 34
Section 16.09 Partial Invalidity......................................... 34
Section 16.10 Severability............................................... 34
Section 16.11 Governing Law; Consent to Jurisdiction..................... 34
Section 16.12 Costs and Attorneys' Fees.................................. 35
Section 16.13 Counterparts............................................... 35
iv
Page [Section]
Exhibits Reference
-------- --------------
Exhibit A - Pall Patents 4 [Article 1]
Exhibit B - Vitex Patents 6 [Article 1]
Exhibit C - Cooperative Development Exceptions 7 [2.01]
Exhibit D - Vitex Representation Exceptions 22 [14.01]
Exhibit E - Amendment to Exclusive License 24 [14.01(h)]
Agreement (#5) For Virally Inactivated
Cellular Products
Exhibit F - License Agreements to be Amended 29 [14.10(b)]
v
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
THIS JOINT DEVELOPMENT, MARKETING AND DISTRIBUTION AGREEMENT (the
"Agreement") is made between PALL CORPORATION, a New York corporation ("Pall")
with principal offices at 0000 Xxxxxxxx Xxxx., Xxxx Xxxxx, Xxx Xxxx 00000, and
V.I. TECHNOLOGIES, INC., a Delaware corporation ("Vitex") with principal offices
at 000 Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000, dated as of the 19th day of
February, 1998.
BACKGROUND
Vitex has developed proprietary compounds for the inactivation of
viruses and pathogens for the decontamination of certain blood products. Pall
has developed a variety of filtration products including those relating to the
collection, preservation, processing, manipulation, storage and treatment of
blood and blood components.
Pall and Vitex wish to combine their efforts and resources in the
development and commercialization of systems consisting of instrumentation,
disposables and compounds for use in the inactivation of viruses and pathogens
for the decontamination of red blood cells and/or platelets in either whole
blood, packed red cells, platelet concentrates or apheresis platelets.
ARTICLE I
DEFINITIONS
-----------
SECTION 1.01 DEFINED TERMS. The capitalized words in this Agreement
-------------
shall have the meanings assigned to them in this Article I.
"AFFILIATE" with respect to any Person, means any other Person that
-----------
directly or indirectly, through one or more intermediaries, controls or is
controlled by or is under common control with the Person specified.
"CARRYING COSTS" means the cost of capital employed (including
----------------
inventory plus receivables plus net fixed assets used in or dedicated to the
development, manufacture, marketing and distribution of the Systems, less
payables), which shall be calculated on the last day of the previous fiscal
quarter of Pall by multiplying such capital by the prevailing Federal Funds rate
as adjusted from time to time, as published in The Wall Street Journal and
-----------------------
determined on the first day of each fiscal quarter of Pall.
********** ************ **** ***** * ******* ********** **
****************************
************ ******** ******** **** * ********* *** ** *** ***** ******** ** *
********* ****
"COOPERATIVE DEVELOPMENT WORK" means the Cooperative Development Work
------------------------------
defined in Section 2.01 of this Agreement.
1
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
***** ** ****** ****** *** ****** **** ** ****** *** **** **
***************
********** ******** *** * ********* ************ *** ** ** ************
********* ********* *** *** ******* ** ***** ************ ********* *********
*** ************* ****** ******* ******** ******** *** ************ ****** ****
**** ***** ** ** ********** ** ********** **** **** *** ****** ** ******* ***
*** **** *** *** ***** ********** ******* ** ******* ** * ********** ***** ***
** ******** ** *** ********** ****** ********* ******** **** **** ** ***** *****
******** ********
*** ******* *** ******* ******** ** ************ ******** ******* ** *****
******* ******** ** ************ ******** ******* ******* ** **** **********
****** *** ********** ********* ** ******* ***** ** **** *********** *******
************ *** ********** ****** ********* *** *********** *************
******** ***** **** *** ******** *** ******** ** **** ** ***** ** ******** **
*** ********** ******
*******************************************************************
********************************************************
*** ** *** ************ ******** ** **** ** * *********** ***** ******
**** ** ****** **
*** ** *** ************ ******** ** **** ** * **** ** * *********
************ **** ****** **** ** ***** *** *** ************ ******** **** ******
********* ********
"DOLLARS" AND "$" means dollars in lawful currency of the United
-----------------
States of America.
"FDA" means the United States Food and Drug Administration.
-----
"FULLY ALLOCATED MANUFACTURING COST" means the cost of direct
------------------------------------
materials, direct labor (which includes fringe benefits), other direct
manufacturing costs, including, but not limited to, factory costs, and indirect
costs, such as supervisory and support labor, supplies, utilities, machinery and
equipment maintenance costs (including associated depreciation) and plant
operating and maintenance costs (including associated depreciation).
"GAAP" means generally accepted accounting principles in the United
------
States of America in effect from time to time as applied by Pall or Vitex, as
the case may be, on a consistent basis.
"GOOD MANUFACTURING PRACTICES" means "good manufacturing practices" as
------------------------------
defined by the FDA (including under 21 C.F.R. Part 820), or other Governmental
Authority with respect to the Vitex Inactivation Compounds.
2
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
------------------------
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
********************************************************************
******************************************************************************
******************************************************************************
**********************************
"INSTRUMENTATION" means light boxes developed and manufactured by or
-----------------
for Vitex which are part of the Systems necessary for activating the Vitex
Inactivation Compounds.
"INVENTIONS" means any and all technical information, applications,
------------
data or knowledge developed or acquired in the performance of or through
cooperation under this Agreement, including but not limited to operating
conditions, process designs, specifications, drawings, devices, technology,
discoveries and know-how relating thereto, whether or not these would be
patentable.
"JOINT PATENTS" means patents which have been obtained for a Joint
---------------
Invention in accordance with Section 6.03 of this Agreement.
"KNOWLEDGE" means the actual knowledge of any executive officer of
-----------
Pall or Vitex.
"LOSS" for any given System configuration means the amount by which
------
the sum of (i) Carrying Costs, (ii) Pall's Costs of Goods/Reference Revenue,
(iii) Pall's Marketing and Administrative Expenses and (iv) Vitex's Cost of
Goods exceeds Net Sales.
"MANAGEMENT BOARD" means the Management Board created pursuant to
------------------
Section 2.02 of this Agreement.
"MARKETING AND ADMINISTRATIVE EXPENSES" for Pall in any calendar year
---------------------------------------
means Pall's costs incurred for the marketing, selling and administering
(customer support) of the Systems, as the Management Board shall approve from
time to time.
"NET SALES" means the amount invoiced by Pall for sales of either a
-----------
*****************************************************************; less credits
or allowances, if any, for rejections or returns; less customary trade discounts
actually given; less customs and duties paid; less bad debts; less separately
invoiced and actually incurred taxes and other charges of any Governmental
Authority that are imposed directly on or measured by the sale, transfer,
transportation, delivery or use (but excluding taxes on net income). *********
********************************************************************************
********************************************************************************
****************************************************************
3
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
*** ***** ********* ************* **** ** *** ****** **** ** ********** **** **
*** **** ***** ********** ******** ** *** ********** ******
"PALL KNOW-HOW" means unpatented inventions, applications, data,
---------------
processes, compositions, techniques and other technical information proprietary
to Pall, which are solely owned by Pall or which Pall has the right to control
the use of, relating to the Systems, including methods for manufacture *********
************************************************ or any portions thereof.
"PALL PATENTS" means all United States and foreign patent applications
--------------
and patents that relate to the Systems or any portion thereof or methods for
manufacture or use thereof, owned by Pall or licensed to Pall with the right to
sublicense and claiming an invention conceived solely by employees and/or agents
and/or licensors of Pall both prior to the date of this Agreement and during the
term of this Agreement pursuant to the Cooperative Development Work, including
any continuations, divisions, reissues, re-examinations and all foreign
counterparts thereof, as set forth in Exhibit A hereto.
---------
"PALL'S FIELD OF USE" means filtration, separation, filters, filter
---------------------
media and supports and their design and manufacture.
"PERSON" means any individual, corporation, partnership, association,
--------
joint-stock company, trust, unincorporated association, joint venture or
Governmental Authority.
"PROFIT" for any given System configuration means Net Sales minus
--------
******** ****** ***** *** ********* *** *** *** ****** **** ** ***************
******* **** **** ****** ********* *** ************** ******** **** *****
******* **** ** ******
"PROJECT PLAN" means the project plan detailing the responsibilities
--------------
of the parties and the projected milestones for the Cooperative Development Work
as approved by the Management Board and as amended from time to time by the
Management Board.
"REFERENCE REVENUE" means for any ********* ************ *** ** ***
-------------------
***** ***** *** ******* *** ***** ***** ** * **** * ********* *** ** * **** **
********* **** ** *** **** *** ** ***** ****** ********* *** **************
******** ** ********** **** **** ********* *****, based on sales during the
three calendar months prior to the date of determination, or, in the case of
**** *** ********* ************ **** ***** ** ***** ** **** * ********* **** **
**** ** ********* ***** ** ************ during the three calendar months prior
to the first sale of such ********* ************ *** (the "Initial Reference
Revenue"). Reference Revenue shall be determined once every three months.
*******************************************************************
****
4
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
"REGULATORY APPROVALS" means (1) in the United States, approval from
----------------------
the FDA for marketing and promotion of the System, or (2) outside of the United
States, an analogous order by a non-U.S. Governmental Authority which requires
regulatory approval prior to marketing and promotion of a System in such non-
U.S. country.
"REVENUE SHARING PAYMENTS" means the payments described in Section
--------------------------
4.04.
"SPECIFICATIONS FOR THE VITEX INACTIVATION COMPOUNDS" means the
-----------------------------------------------------
performance, quality and reliability standards which the Management Board
requires for the Vitex Inactivation Compounds to be acceptable for commercial
implementation, promulgated by the Management Board in accordance with Section
2.02(a) of this Agreement and in conformity with any applicable FDA
requirements. Such Specifications shall include a provision that the Vitex
Inactivation Compounds be made according to Good Manufacturing Practices or (if
Vitex shall elect to manufacture the Vitex Inactivation Compounds outside the
United States) other applicable regulatory authority.
*****************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
*****************************************************
***************************************************************
**************************************************************
"SYSTEMS SPECIFICATIONS" means such performance, cost, quality and
------------------------
reliability requirements as the Management Board agrees must be met by a System
in order for the System to be acceptable for marketing and distribution under
this Agreement.
*******************************************************************
********************************************************************************
********************************************************************************
****
******************************************************************
********************************************************************************
***************
"VITEX INACTIVATION COMPOUNDS" means the compounds developed by Vitex
------------------------------
for the inactivation of viruses and pathogens in red blood cells.
"VITEX KNOW-HOW" means unpatented inventions, applications, data,
----------------
processes, compositions, techniques and other technical information proprietary
to Vitex, which is solely owned by Vitex or which Vitex has the right to control
the use of, relating to the Systems,
5
including methods for manufacture or use of Vitex Inactivation Compounds and
Systems or portions thereof.
"VITEX PATENTS" means all United States and foreign patent
---------------
applications and patents that relate to the Vitex Inactivation Compounds or
compositions or formulations thereof, or otherwise relating to a System or
portion thereof, or methods for manufacture or use of such System or Vitex
Inactivation Compounds owned by or licensed to Vitex with the right to
sublicense and claiming an invention conceived solely by employees and/or agents
and/or licensors of Vitex both prior to the date of this Agreement and during
the term of the Cooperative Development Work, including any continuations,
divisions, reissues, reexaminations and all foreign counterparts thereof, as set
forth in Exhibit B hereto.
---------
"VITEX'S FIELD OF USE" means Vitex's processes or compounds for
----------------------
inactivating viruses and pathogens in red blood cells, platelets and other blood
products and components.
SECTION 1.02 OTHER DEFINITIONAL PROVISIONS. In addition to the terms
-----------------------------
defined in Section 1.01, the following terms are defined in the Sections of this
Agreement noted below:
--------------------------------------------------------------------------------------
Term Section
----- -------
--------------------------------------------------------------------------------------
AAA 16.04(a)
--------------------------------------------------------------------------------------
Agreement Preamble
--------------------------------------------------------------------------------------
Advance 2.07(a)
--------------------------------------------------------------------------------------
Confidential Information 9.01
--------------------------------------------------------------------------------------
Cooperative Development Work 2.01
--------------------------------------------------------------------------------------
Cure Period 13.03(b)
--------------------------------------------------------------------------------------
Defaulting Party 13.03(a)
--------------------------------------------------------------------------------------
EFOS 3.02
--------------------------------------------------------------------------------------
Exclusive Distributor 4.01
--------------------------------------------------------------------------------------
Exclusive Distributorship Period 4.01
--------------------------------------------------------------------------------------
Fair Price 13.03(d)
--------------------------------------------------------------------------------------
Joint Invention 2.05(a)
--------------------------------------------------------------------------------------
License Agreements 14.01(i)
--------------------------------------------------------------------------------------
License Amendment 14.01(h)
--------------------------------------------------------------------------------------
Licensed Intellectual Property 5.04
--------------------------------------------------------------------------------------
Losses 14.03
--------------------------------------------------------------------------------------
Material Default 13.03(a)
--------------------------------------------------------------------------------------
Non-Defaulting Party 13.03(a)
--------------------------------------------------------------------------------------
Notice of Termination 13.03(b)
--------------------------------------------------------------------------------------
Notice to Cure 13.03(b)
--------------------------------------------------------------------------------------
6
----------------------------------------------------------------------------------------
NYBC 3.02
----------------------------------------------------------------------------------------
Pall Preamble
----------------------------------------------------------------------------------------
Platelet Inactivation Compounds Article X
----------------------------------------------------------------------------------------
Revenue Sharing Payments 4.04
----------------------------------------------------------------------------------------
Rules 16.04(a)
----------------------------------------------------------------------------------------
Sole Invention 2.05(b)
----------------------------------------------------------------------------------------
Sole Patent 2.05(c)
----------------------------------------------------------------------------------------
UH 3.02
----------------------------------------------------------------------------------------
Vitex Preamble
----------------------------------------------------------------------------------------
ARTICLE II
COOPERATIVE DEVELOPMENT
-----------------------
SECTION 2.01 COOPERATIVE DEVELOPMENT. From the date of this
-----------------------
Agreement, Pall and Vitex shall work together diligently to develop, and obtain
Regulatory Approval for, the Systems, including research and development and
clinical work (the "Cooperative Development Work") and thereafter market Systems
for the filtration of human blood and the inactivation of viruses and pathogens
in red blood cells. Except for the work currently conducted by Pall and set
forth on Exhibit C hereto, neither party shall work independently or with a
---------
third party in the development and/or commercialization of systems for use in
the inactivation of viruses and pathogens for decontamination of red blood cells
and/or platelets, unless approved by the Management Board. Except as set forth
in the preceding sentence, if either party is planning to work independently or
with a third party in the development and/or commercialization of systems for
use in the inactivation of viruses and pathogens for decontamination of red
blood cells and/or platelets, it shall disclose such planned activity to the
Management Board, and the Management Board shall have the option of bringing
such activity within the scope of this Agreement and requiring the parties to
pursue it jointly.
SECTION 2.02 MANAGEMENT BOARD.
----------------
2.02(A) CONSTITUTION. The Management Board shall be composed of four
------------
people consisting of two officers or employees of each party designated by such
party. The role of the Management Board is to facilitate the overall
relationship of Pall and Vitex under this Agreement and to manage the research,
development and marketing of Systems. System Specifications and Vitex
Inactivation Compounds Specifications recommended by Pall or Vitex shall not be
deemed finalized until they are approved by the Management Board. The
Management Board shall meet from time to time as appropriate, but not less
frequently than four times during each calendar year, alternating between the
offices of Pall and Vitex, unless the parties shall agree otherwise.
7
2.02(B) VOTING. All decisions of the Management Board shall be made
------
by unanimous vote or written consent, with Pall and Vitex each having one vote
regardless of the number of representatives attending any meeting.
2.02(C) DEADLOCK. In the event of a deadlock of the Management
--------
Board, if it is unable to reach agreement within two days of the onset of the
deadlock, then the matter shall first be referred to the Chief Executive
Officers of Pall and Vitex who shall use their best efforts to reach an amicable
resolution, and then failing such resolution, shall be finally settled by
arbitration as set forth in Section 16.04 hereof.
2.02 (D) RESPONSIBILITIES OF MANAGEMENT BOARD. The Management Board
------------------------------------
shall be responsible for:
(i) approving Project Plans, all changes to any Project Plans and
determining whether to engage in a new project;
(ii) setting budgets and approving all changes to budgets, and
resource allocation;
(iii) approving accounting methods of the parties for purposes of
determining Cost of Goods for either party;
(iv) approving the amortization of capital expenditures;
(v) approving Pall's Marketing and Administrative Expenses;
(vi) in its sole discretion, revising the percentage used in
calculating the floor price of a System;
(vii) approving Specifications for the Vitex Inactivation Compounds
and Systems Specifications, and any changes thereto;
(viii) overseeing Cooperative Development Work;
(ix) approving matters set forth in Section 2.01 of this Agreement;
(x) approving the filing of Sole Patents, where such filing would
involve the disclosure of Confidential Information (however, Management
Board approval is not required for the filing of a Sole Patent where such
filing would not involve the disclosure of Confidential Information);
(xi) designating the party which shall be primarily responsible for
the prosecution of Joint Patents;
8
(xii) reviewing records of the parties relating to costs and
expenses incurred in connection with the Cooperative Development Work,
approving and reconciling cash outlays and expenditures of the parties and
directing payment by either of the parties to the other party;
(xiii) developing timetables for Pall's requirements projections for
the Vitex Inactivation Compounds and Instrumentation;
(xiv) approving changes to Vitex's source of raw materials, the
Vitex Inactivation Compounds or Instrumentation, and approving improvements
to the Systems;
(xv) determining the countries in which the Systems shall be
marketed and sold;
(xvi) approving all claims made regarding the Systems in connection
with labeling, marketing or promotional matters;
(xvii) all matters relating to Joint Patents;
(xviii) ensuring compliance with the applicable clinical, medical and
regulatory requirements and fulfilling and discharging or arranging for a
party to this Agreement (or both) to fulfill and discharge all applicable
requirements of the FDA or other Governmental Authority; and
(xix) determining what action should be taken when a party to this
Agreement has reason to believe or has received notice from the FDA or
another Governmental Authority that a product developed, manufactured or
sold pursuant to the terms of this Agreement must be withdrawn or recalled.
SECTION 2.03 REVIEW OF PROJECT PLAN, BUDGET AND TIMETABLE. The
--------------------------------------------
Project Plans, budget and timetable for the Cooperative Development Work will be
reviewable by the Management Board from time to time, with the intent that the
parties move expeditiously and effectively toward commercialization of the
Systems.
SECTION 2.04 EXCHANGE OF INFORMATION. Subsequent to March 21, 1997
-----------------------
and in connection with the Cooperative Development Work, Pall and Vitex shall
exchange all material information developed pursuant to the Cooperative
Development Work, including the exchange of Pall Know-How and information
concerning Pall Patents and Vitex Know-How and information concerning Vitex
Patents. The exchange will occur subject to the confidentiality provisions of
Article IX of this Agreement. Under this Agreement the cooperation between Pall
and Vitex will be solely in connection with developing the Systems.
9
SECTION 2.05 INVENTIONS.
----------
2.05(A) JOINT INVENTIONS. If an Invention has been made by both
----------------
parties jointly, each party making an inventive contribution to such Invention,
such Invention shall be referred to as a "Joint Invention." Such Joint
Inventions shall be the joint property of the parties, each party having an
undivided one-half interest, with Pall having an exclusive royalty-free
worldwide license under all Joint Inventions relating to Pall's Field of Use and
Vitex having an exclusive royalty-free worldwide license under all Joint
Inventions that relate to Vitex's Field of Use.
For any uses outside of either Pall's Field of Use or Vitex's Field of
Use, each party has joint rights to the Joint Invention. The parties agree that
neither party may grant any sublicenses under any Joint Invention without the
prior written approval of the other party.
2.05(B) SOLE INVENTIONS. Should either party conceive and reduce to
---------------
practice any Invention without any inventive input of the other party (a "Sole
Invention"), then that party shall own all rights to its Sole Invention, except
that the other party shall have a non-exclusive right to practice the Sole
Invention only in furtherance of this Agreement.
2.05(C) PATENT PROSECUTION OF INVENTIONS. Patent prosecution for
--------------------------------
Joint Inventions shall be carried out as set forth in Section 6.03 hereof. Each
party shall bear full responsibility for all patent prosecution and maintenance
matters with respect to its Sole Inventions provided that each party gives the
Management Board reasonable notice prior to filing an application for any patent
with respect to a Sole Invention (the "Sole Patent") and, to the extent that
such filing involves the disclosure of any Confidential Information, obtains the
approval of the Management Board prior to such filing. The Management Board
shall designate one party as primarily responsible for the prosecution of Joint
Patents. The costs of such prosecution and the costs of maintenance of the
Joint Patents shall be equally shared by the parties.
SECTION 2.06 COST-SHARING.
------------
2.06(A) COST-SHARING GENERALLY. Pall and Vitex shall equally share
----------------------
costs and expenses associated with the Cooperative Development Work, fifty
percent to be borne by Pall and fifty percent to be borne by Vitex. Cost and
expenses shall include only those expenditures made in accordance with budgets
approved by the Management Board related to research, development, clinical
trials, Regulatory Approval, certain patent royalties as described in Section
15.02 of this Agreement, filing of Joint Patents (subject to Section 6.05), and
other expenses that this Agreement expressly provides shall be subject to cost
sharing. All changes to a budget must be approved by the Management Board.
2.06(B) RECORDKEEPING. Each party shall maintain detailed records
-------------
which accurately identify costs and expenses incurred and paid in connection
with the Cooperative
10
Development Work. Each party shall submit this information to the Management
Board on the last business day of March for the period ending January 31, and on
the last business day of September for the period ending July 31 (or such
alternative dates as the Management Board may establish) with an estimate of
expenses to be incurred during the subsequent six months. Expenses internally
generated in the event that tasks are performed by a party's own staff will be
accounted for on a uniform average cost per full time equivalent basis.
2.06(C) MANAGEMENT BOARD COSTS. Each of Pall and Vitex shall bear
----------------------
their respective costs with respect to participation on the Management Board
during the Cooperative Development Work, including travel expenses for meetings
and participation on the Management Board.
SECTION 2.07 BUDGET CONTINGENCIES.
--------------------
2.07(A) EXCEEDING PREVIOUSLY ESTABLISHED BUDGET. If the Management
---------------------------------------
Board determines that the budget for the Cooperative Development Work must be
increased over the previously established budget, then Pall will fund fifty
percent and Vitex will fund fifty percent of any increase in the previously
approved budget; provided that in the event Vitex is unable to fund such
increase, Pall may, at its sole discretion, fund Vitex's share of such increase
(or any portion thereof) (the "Advance") and deduct the Advance over time
through deductions from Vitex's share of the Profits, on a schedule approved by
the Management Board.
2.07(B) RECONCILIATION OF EXPENDITURES. Unless otherwise agreed, the
------------------------------
Management Board shall reconcile actual cash outlays and expenses approved by
the Management Board with respect to the Cooperative Development Work on a
quarterly basis to the goal that costs are borne in the proportion of fifty
percent by Pall and fifty percent by Vitex. The Management Board shall review
the budgets at the beginning of each fiscal quarter of Pall, and to the extent
that either Pall or Vitex is expected to incur more than fifty percent of the
expenses budgeted for such fiscal quarter, the Management Board shall direct the
other party, within thirty days after the beginning of such fiscal quarter, to
pay to the party expected to incur such expenses an amount necessary to ensure
that projected expenses for such fiscal quarter are borne fifty percent by each
party. Any portion of a payment made in accordance with the preceding sentence
which is not utilized by either party in connection with the Cooperative
Development Work for such fiscal quarter shall be carried forward by such party
to the following fiscal quarter.
SECTION 2.08 RESPONSIBILITIES OF PARTIES. Pall and Vitex shall
---------------------------
cooperate in the Cooperative Development Work as set forth in the Project Plan.
Any changes to the Project Plan must be approved by the Management Board.
ARTICLE III
11
SUPPLY OF VITEX INACTIVATION COMPOUNDS
AND SYSTEM MANUFACTURING
--------------------------------------
After Regulatory Approval has been obtained for the Systems, the
Systems shall be manufactured, marketed and sold in accordance with the
provisions of this Article III.
SECTION 3.01 PALL RESPONSIBILITIES. Pall shall be responsible for
---------------------
all aspects relating to production, manufacturing, assembly, sterilization,
packaging, warehousing, marketing (including customer support) and distribution
of the Systems, but not including manufacturing of the Vitex Inactivation
Compounds or the Instrumentation, except as provided in Section 3.07. Pall
shall provide Vitex with its projected requirements for the Vitex Inactivation
Compounds and Instrumentation in accordance with a timetable developed by the
Management Board.
SECTION 3.02 VITEX RESPONSIBILITIES. Vitex shall supply or arrange
----------------------
for a third party to supply, Pall's requirements for the Vitex Inactivation
Compounds and Instrumentation used in each System. The parties shall agree upon
an order, supply and delivery mechanism for the Vitex Inactivation Compounds and
Instrumentation. Vitex shall also diligently pursue any rights it may have
under agreements with third parties, including, but not limited to, The New York
Blood Center, Inc. ("NYBC"), EFOS International ("EFOS"), University Hospitals,
Inc. or any current successor ("UH"), and Collaborative BioAlliance, Inc., and
their respective Affiliates, for obtaining new technology developed by such
third parties, whether in conjunction with Vitex or not, which technology may be
necessary or useful in achieving the objectives of this Agreement.
SECTION 3.03 REFERENCE SET PRODUCTION. Pall shall tool and scale up
------------------------
the production model of all Reference Sets and any necessary additions to
Reference Sets required for the Systems.
SECTION 3.04 SYSTEMS SPECIFICATIONS. Pall's manufacture of each
----------------------
System shall be in accordance with the Systems Specifications. Any change to
the Systems Specifications must be approved in writing by the Management Board.
SECTION 3.05 VITEX SPECIFICATIONS. Vitex shall supply Vitex
--------------------
Inactivation Compounds in bulk form to Pall to be used as a component of the
Systems and Pall shall obtain from Vitex Inactivation Compounds to meet Pall's
requirements of inactivation compounds for use in the Systems. Vitex
Inactivation Compounds shall meet the Specifications for the Vitex Inactivation
Compounds determined by the Management Board pursuant to Section 2.02(a) hereof.
Any change in specifications for the Vitex Inactivation Compounds must be
approved in writing by the Management Board.
12
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
SECTION 3.06 SOURCE OF SUPPLY. In the event Pall recommends, and the
----------------
Management Board approves such recommendation, that Vitex change Vitex's source
of raw materials or Vitex Inactivation Compounds or Instrumentation because of
actual or anticipated irregularity of supply, or failure to meet specifications,
and viable alternate sources of supply are available, Vitex will use its
reasonable best efforts to implement Pall's recommendation that Vitex utilize
such alternate sources of raw materials, Vitex Inactivation Compounds and/or
Instrumentation.
SECTION 3.07 FAILURE OF VITEX TO MEET PALL REQUIREMENTS. Pall shall
------------------------------------------
be free to obtain the Vitex Inactivation Compounds or Instrumentation from a
third party if Vitex fails to meet Pall's requirements for the Vitex
Inactivation Compounds or Instrumentation within ******** after Pall gives
written notice to Vitex that Vitex is in default of its obligations to supply
Pall's requirements hereunder. Vitex agrees to grant, such third party that Pall
selects, the right to manufacture the Vitex Inactivation Compounds or
Instrumentation, for Pall's account, and further agrees to provide such third
party with the information and the right to use the Vitex Patents and Vitex
Know-How that are necessary to permit such third party to make the Vitex
Inactivation Compounds or Instrumentation for Pall's account, provided, however
-------- -------
that such third party shall first provide Vitex with written undertakings,
executed by a properly authorized officer of such third party, that it will
treat such information, Vitex Patents and Vitex Know-How as Confidential
Information and be subject to confidentiality requirements similar to those set
forth in Article IX of this Agreement. To the extent that Pall obtains the Vitex
Inactivation Compounds or Instrumentation from a third party, all payments made
by Pall to such third party shall be included in Pall's Cost of Goods.
SECTION 3.08 SYSTEM IMPROVEMENTS. During the term of this Agreement,
-------------------
as approved by the Management Board, Pall and Vitex will cooperate in making
improvements to each System to meet changing market needs. The costs for such
improvements shall be budgeted by the Management Board and subject to cost
sharing pursuant to Section 2.06(a) of this Agreement.
ARTICLE IV
MARKETING AND EXCLUSIVE DISTRIBUTION RIGHTS
-------------------------------------------
SECTION 4.01 APPOINTMENT AS EXCLUSIVE DISTRIBUTOR. Pall and Vitex
------------------------------------
agree that Pall shall be the exclusive worldwide distributor (the "Exclusive
Distributor") for the Systems during the term of this Agreement (the "Exclusive
Distributorship Period"). In acting as the Exclusive Distributor, Pall may
solicit sales directly or through one or more of its Affiliates or independent
distributors. Pall shall use commercially reasonable efforts to promote, market
and sell Systems developed under this Agreement in those countries of the world
in which the Management Board determines that such Systems should be promoted,
marketed and sold. All responsibilities of Pall set forth in this Section 4.01
shall be conducted in compliance with all
13
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
pertinent regulatory requirements of the FDA and other Governmental Authorities.
Pall shall send copies of any reports submitted to the FDA or any other
Governmental Authority under the terms of this Section 4.01, upon their
submission, to Vitex.
SECTION 4.02 MEETINGS CONCERNING MARKETING. The Management Board
-----------------------------
shall meet from time to time at the request of either Pall or Vitex to discuss
and approve marketing strategies in order to optimize customer acceptance and
effective promotion of the Systems. All final decisions regarding Systems
marketing, distribution and pricing shall be made by Pall.
SECTION 4.03 RESPONSIBILITIES OF THE PARTIES DURING THE EXCLUSIVE
----------------------------------------------------
DISTRIBUTORSHIP PERIOD. During the Exclusive Distributorship Period the
-----------------------
responsibilities of the parties shall be as follows:
4.03(A) PALL RESPONSIBILITIES. Pall shall use its reasonable best
---------------------
efforts to promote and distribute the Systems within ******** after the
Regulatory Approval is obtained, using generally the same channels and methods,
exercising the same diligence, and adhering to the same standards which it
employs with respect to its own products sold to the health care market.
4.03(B) VITEX RESPONSIBILITIES. Vitex shall use reasonable best
----------------------
efforts to supply Pall's requirements for the Vitex Inactivation Compounds and
Instrumentation consistent with Pall's forecasts of its expected requirements
for the Vitex Inactivation Compounds and Instrumentation, and shall promptly
notify Pall of any expected delay and the duration of any expected delay. Vitex
shall provide Pall with certificates of analysis for the Vitex Inactivation
Compounds, certificates of free sale, trademark authorizations, and any other
documents which Pall may require for registration purposes of the Vitex
Inactivation Compounds or the Instrumentation, at Pall's request, if available.
Unless prohibited by local law, all such registrations and approvals shall be in
the name of Vitex and Pall.
SECTION 4.04 REVENUE SHARING. In consideration of the Cooperative
---------------
Development Work to be undertaken and other obligations set forth in this
Agreement, Pall and Vitex shall share Net Sales as follows: (i) no later than
thirty days after the first and all subsequent fiscal quarters of Pall following
the first commercial sale of the Systems, Pall shall pay to Vitex, with respect
to Net Sales in such fiscal quarter, Vitex's Cost of Goods; and (ii) no later
than sixty days after the first and all subsequent fiscal quarters of Pall
following the first commercial sale of Systems, Pall shall pay to Vitex, with
respect to Net Sales in such fiscal quarter, a sum equal to fifty percent of the
Profits for such fiscal quarter (less any Advances made to Vitex pursuant to the
terms of Section 2.07(a) of this Agreement, royalty payments deducted pursuant
to Section 15.02 of this Agreement and Losses for such fiscal quarter) (the
"Revenue Sharing Payments"), and Pall shall retain the balance of the proceeds
of the Net Sales of Systems as to which Pall has invoiced the customer during
such fiscal quarter. To the extent Profits are exceeded by Losses in any fiscal
quarter of Pall, Vitex's share of such net loss shall be
14
carried forward cumulatively to the subsequent fiscal quarters of Pall and shall
offset any Profit payable to Vitex for such subsequent fiscal quarters until
fully exhausted.
The Revenue Sharing Payments due and payable hereunder shall be
computed for each fiscal quarter of Pall in the currency in which the sale was
made, but shall be definitively discharged by payments to Vitex in dollars
converted from such currency using the average of spot rates for such currency
for the last business day of the second and third months of such quarter and of
the first month of the subsequent quarter, as quoted in The Wall Street Journal.
-----------------------
SECTION 4.05 NYBC. Pall agrees to make available to NYBC a
----
reasonable quantity of Inactivation Assemblies at the lowest price charged by
Pall to third parties in the U.S. and Canada for such Inactivation Assemblies.
It is the understanding of the parties hereto that said Inactivation Assemblies
will be for NYBC's own use and not for resale by NYBC and Pall's obligation to
make such sales shall be conditioned on NYBC's compliance with that
understanding.
ARTICLE V
PATENTS, KNOW-HOW, AND LICENSE GRANTS
-------------------------------------
SECTION 5.01 VITEX SOLE OWNERSHIP. Vitex shall own and/or control
--------------------
all Vitex Patents and Vitex Know-How.
SECTION 5.02 PALL SOLE OWNERSHIP. Pall shall own and/or control all
-------------------
Pall Patents and Pall Know-How.
SECTION 5.03 REGULATORY FILES. Pall and Vitex shall each have full
----------------
access to all materials filed and correspondence with the FDA and other
regulatory agencies in connection with the Cooperative Development Work and the
Systems, and shall be entitled to use and rely on such materials with respect to
any Regulatory Approval for a product covered by this Agreement which is sought
by either Pall or Vitex.
SECTION 5.04 LICENSE OF VITEX PATENTS AND VITEX KNOW-HOW. With
-------------------------------------------
respect to any Vitex Patents, Vitex Know-How or any other Vitex intellectual
property needed by Pall for the performance of its responsibilities and exercise
of its rights under this Agreement (the "Licensed Intellectual Property"), Vitex
grants to Pall an exclusive, paid-up royalty-free license under the Licensed
Intellectual Property with the right to sublicense, as approved by the
Management Board.
ARTICLE VI
PROSECUTION OF PATENT RIGHTS
----------------------------
15
SECTION 6.01 VITEX PATENTS. Vitex shall have the right to timely
-------------
prepare, file, prosecute and maintain, under its exclusive control and at its
expense, Vitex Patents.
SECTION 6.02 PALL PATENTS. Pall shall have the right to timely
------------
prepare, file, prosecute and maintain, under its exclusive control and at its
expense, Pall Patents.
SECTION 6.03 JOINT PATENTS. The Management Board shall have the
-------------
right to timely prepare, file, prosecute and maintain (or direct the appropriate
party to timely prepare, file, prosecute and maintain), under its exclusive
control, Joint Patents, with costs and expenses to be shared by Pall and Vitex
as set forth in Section 2.06(a) hereof and subject to Section 6.05, but if it
does not, then either Pall or Vitex may, subject to joint ownership rights set
forth in Section 2.05(a) and subject to Section 6.05, prepare, file, prosecute
and maintain such Joint Patents. The parties shall file internationally under
the Patent Cooperation Treaty and/or the European Patent Convention or the most
appropriate mechanism in order to minimize expenses, as determined by the
Management Board. The reasonable expenses of preparing, filing, prosecuting and
maintaining corresponding Joint Patents in the countries that are approved by
the Management Board shall be borne equally by the parties. Unless such other
countries are agreed to by the parties in writing, such other country filings
shall not be made. Such patent expenses should be included in the budget
approved by the Management Board and shall be shared equally by the parties as
set forth in Section 2.06(a).
SECTION 6.04 MATERIAL; REVIEW AND COMMENT. Each party shall
----------------------------
cooperate with the other so that all material that is pertinent to the
examination of a Joint Patent is brought to the attention of the other party.
The parties to this Agreement shall have the right to review and comment on
substantive documents prepared in connection with the preparation, filing,
prosecution and maintenance of the Joint Patents prior to the filing of such
papers; however, such review and comment shall be performed expeditiously so as
not to negatively affect patent rights and shall be performed at the reviewing
party's sole cost and expense.
SECTION 6.05 ELECTION NOT TO PAY EXPENSES. If either party elects
----------------------------
for any reason not to pay its share of the reasonable expenses for a particular
Joint Patent, then, at the option of the other party:
6.05(A) the joint ownership of that nonpaying party under this
Agreement with respect to that particular patent application or patent shall
immediately terminate and the paying party shall exclusively own that particular
patent or patent application, without affecting the nonpaying party's rights
under all other patent applications and patents; or
6.05(B) the application or patent shall be allowed to lapse.
16
In the event the paying party elects option (a) above, the nonpaying
party hereby agrees to execute documents necessary to transfer its interest in
such patent or patent application to the paying party provided that the paying
party agrees to license back to the non-paying party rights to such patent or
patent application on a royalty-free basis to the extent necessary to
manufacture, use or sell the Systems.
ARTICLE VII
TRADEMARKS
----------
SECTION 7.01 PALL TRADEMARKS. Vitex shall make no use of any Pall
---------------
trademark without the prior written approval of Pall.
SECTION 7.02 VITEX TRADEMARKS. Except as set forth in this Section
----------------
7.02, Pall shall make no use of any Vitex trademark without the prior written
approval of Vitex. Pall shall include the Vitex name and xxxx (or successor name
and xxxx acceptable to Pall) on the Systems and on packaging, literature and
promotional material and advertising for the Systems unless Pall makes a good
faith determination that the Vitex name cannot be used due to third party
rights. Pall shall, to the extent practical, provide to Vitex for review copies
of all proposed uses of the Vitex name and xxxx and references to Vitex. To the
extent practical, Pall shall include on material bearing such trademarks an
acknowledgment that such trademarks are the property of Vitex. If necessary in
any market to maintain Vitex's rights in the Vitex trademarks, Pall shall enter
into a registered user agreement regulating its use of the Vitex trademarks.
ARTICLE VIII
REGULATORY REQUIREMENTS
-----------------------
SECTION 8.01 RECALLS. In the event that either party to this Agreement
-------
has reason to believe that a recall or market withdrawal of any product or
products developed, manufactured or sold pursuant to this Agreement is warranted
for any reason, or if either party is notified by the FDA or another
Governmental Authority of a request or demand for such a withdrawal or recall,
such party shall immediately notify the Management Board. Within 24 hours of
receipt of such notice the Management Board shall meet and: (i) determine if
such a withdrawal or recall is warranted and, if warranted, to formulate a
strategy for implementing such withdrawal or recall, or (ii) to formulate a
position why such a withdrawal or recall is not warranted, and (iii) if the
withdrawal or recall request originated from the FDA or other Governmental
Authority, to formulate a plan to address such request. The actual withdrawal or
recall of a product under the terms of this Section 8.01 shall be conducted by
Pall, unless otherwise directed by the Management Board.
17
The expenses of a withdrawal or recall, if conducted in accordance with the
terms of this Section 8.01, shall be equally shared, provided, however, that if
-------- -------
the recall or withdrawal is solely due to the fault of one of the parties, as
determined by the Management Board, that party shall bear the full cost of such
recall or withdrawal.
SECTION 8.02 COMPLIANCE WITH OTHER REGULATORY REQUIREMENTS.
---------------------------------------------
(a) The Management Board shall control and be responsible for the parties'
compliance with the clinical, medical and regulatory requirements applicable to
the products developed, manufactured or sold and the transactions engaged in
under this Agreement. The Management Board shall fulfill and discharge, or
arrange for one of the parties (or both) to fulfill and discharge, each
applicable FDA or other Governmental Authority requirement, arising from or
related to the transactions contemplated by this Agreement; provided, however,
-------- -------
that Pall shall solely be responsible for fulfilling and discharging all
requirements which exist in connection with such of Pall's responsibilities as
are set forth in Section 4.01 of this Agreement, and further provided, that
------- --------
requirements which exist by reason of investigational activities with respect to
any System or part thereof shall be fulfilled and discharged by the party
performing such investigational activity. Copies of all reports submitted to or
by the FDA or other Governmental Authority under the terms of this Section 8.02
shall be provided by the party submitting or receiving such reports to the other
party.
(b) Each party to this Agreement shall promptly notify the Management
Board of any inspection or other action taken or threatened to be taken by the
FDA or other Governmental Authority with respect to any System, or any part
thereof, of which they become aware.
(c) In the event that a meeting is scheduled between the FDA or other
Governmental Authority in connection with the transactions contemplated by this
Agreement, the party arranging such meeting shall provide the other party and
the Management Board with reasonable advance notice of such meeting so that the
parties can discuss the contents of such meeting before it takes place and
determine if representatives of the second party should be present at the
meeting.
(d) The parties agree to, during the term of this Agreement, maintain
records and otherwise establish procedures to assure compliance with all
statutory, regulatory and professional requirements which apply to the
transactions contemplated by this Agreement.
SECTION 8.03 PRESS RELEASES. Each party may issue various press releases
--------------
and other public announcements concerning approval by the FDA or other
Governmental Authority for, or marketing of any System, or other matters or
transactions contemplated by this Agreement. However, neither party shall issue
any such press release or other public announcement prior to the review and
written approval of the other party, which approval shall not be unreasonably
withheld.
18
ARTICLE IX
CONFIDENTIAL INFORMATION
------------------------
SECTION 9.01 GENERAL. The Mutual Non-Disclosure Agreement, entered
-------
into by Pall and Vitex as of March 21, 1997 is hereby merged into and subsumed
by the provisions of this Article IX. The parties to this Agreement, at all
times, shall maintain in strictest confidence and shall not disclose, distribute
or use, for any purpose or in any manner, other than a purpose or manner
approved by the Management Board, and shall cause their directors, officers,
employees, agents, counsel and representatives to maintain in strictest
confidence, all proprietary and confidential information and materials (whether
or not patentable), including, without limitation, equipment, processes,
methods, data, software, reports, know-how, sources of supply, price information
and quotations, customer lists, patent positions and business plans which are
communicated to, learned of, developed or otherwise acquired by either party,
directly or indirectly, pursuant to this Agreement and any other information
designated by the disclosing party as confidential or proprietary in relation to
the subject matter of this Agreement, which information is provided by one party
to the other either directly or indirectly ("Confidential Information"). All
such Confidential Information shall remain the property of Pall or Vitex as the
case may be, or shall be jointly owned if relating to a Joint Invention, and
upon the termination of this Agreement shall be returned to Pall or Vitex or
both of them as applicable, or, at either party's election (or by mutual
agreement in the case of jointly owned Confidential Information), if permitted
by law, destroyed. Failure to comply with the terms of this Section shall
constitute a Material Default (as defined in Section 13.03(a) of this
Agreement).
SECTION 9.02 EXCEPTIONS. Confidential Information shall not include
----------
any information that (a) was rightfully in the possession of the receiving party
prior to the date of disclosure of such information to the receiving party as
evidenced by written documents; (b) was in the public domain prior to the
disclosure to the receiving party; (c) becomes part of the public domain by
publication or otherwise, except by an unauthorized act or omission by the part
of the receiving party; (d) is supplied to the receiving party by a third party
who is under no obligation to the disclosing party to maintain such information
in confidence; (e) is developed by or for the receiving party independently of
the disclosure made under this Agreement; or (f) is required to be disclosed
pursuant to applicable law; provided that if the receiving party believes it is
required to disclose any Confidential Information pursuant to any applicable
law, it shall give timely written notice to the other party so that the other
party may have an opportunity to obtain a protective order or other appropriate
relief. Each party shall be entitled, in addition to any other right or remedy
it may have, at law or in equity, to an injunction, without the posting of any
bond or other security, enjoining or restraining the other party from any
violation or threatened violation of this Article IX.
19
SECTION 9.03 SURVIVAL. The obligations of this Article IX shall
--------
survive termination of this Agreement and each of the parties hereto shall
continue to observe them regardless of whether its rights hereunder shall be
terminated or it shall cease to be a party hereto.
ARTICLE X
ADDITIONAL SYSTEMS
------------------
In consideration of the transactions contemplated by this Agreement
with respect to the Systems, Vitex shall work to develop compounds for the
inactivation of viruses and pathogens in platelets (the "Platelet Inactivation
Compounds") and agrees with Pall that if it develops a Platelet Inactivation
Compound during the term of this Agreement, the parties will, as soon as
feasible, prepare a project plan detailing Cooperative Development Work to be
performed in connection with the filtration of blood and inactivation of viruses
and pathogens in platelets. The parties agree to engage in Cooperative
Development Work for the development and commercialization of systems utilizing
the Platelet Inactivation Compounds and market, sell and distribute such systems
on the terms and conditions contained in this Agreement, including, but not
limited to, the equal sharing of costs, profits and expenses. The parties agree
that Vitex's failure to develop Platelet Inactivation Compounds shall not be a
ground for termination of this Agreement.
ARTICLE XI
REPORTS
-------
SECTION 11.01 QUARTERLY SALES REPORTS. Each quarterly payment made
-----------------------
under Section 4.04 shall be accompanied by a full and accurate accounting of all
Net Sales of Systems by Pall for the fiscal quarter. Each such report shall
include the following information for each type of System, separately as to each
of the following regions: Western Hemisphere, Europe, Japan, rest of world:
11.01(A) The number of Stand-Alone Inactivation Assemblies and Composite
Inactivation Sets sold to third parties by Pall;
11.01(B) The Net Sales, with a breakdown between Net Sales of Stand-Alone
Inactivation Assemblies and Composite Inactivation Sets;
11.01(C) Cost of Goods/Reference Revenue;
11.01(D) Computation of the Revenue Sharing Payment due to Vitex;
20
11.01(E) Customer published price lists for Systems; and
11.01(F) Any deductions from Revenue Sharing Payments.
To the extent Pall is unable to provide any such information when due,
Pall will provide to Vitex at such time Pall's best estimates of such
information, and will provide actual information as soon as it is available,
provided, however, that Pall will, in any event, provide reports when due of
actual Net Sales and Cost of Goods/Reference Revenue.
SECTION 11.02 COST OF GOODS/REFERENCE REVENUE. To the extent not
-------------------------------
provided under Section 11.01 above, each party will furnish quarterly reports to
the other party on such party's Cost of Goods/Reference Revenue for components
supplied by such party.
Each report under this Article XI shall include the certification of
the party making the report attesting to the fact that the report is an accurate
and complete accounting of all information required hereunder.
SECTION 11.03 VITEX REPORTS. Vitex agrees to provide Pall with a
-------------
copy of and obtain Pall's consent to any report to be delivered by Vitex to a
third party, prior to such delivery, if such report contains any Confidential
Information, or any information regarding the Systems, Pall, this Agreement or
any other matters which are the subject of this Agreement.
ARTICLE XII
BOOKS AND RECORDS
-----------------
SECTION 12.01 RECORDS. Pall and Vitex shall keep full and accurate
-------
books of account containing all particulars that may be necessary for the
purpose of calculating all amounts owing to either party. Books of account
maintained by the parties shall be kept at their principal place of business,
except that with respect to books of account ordinarily kept by either party
elsewhere (e.g. abroad), the originals or copies thereof shall be made available
at the principal place of business on request. All such reports and data shall
be open for inspection on a confidential basis at all reasonable times and
either party may conduct, at its own expense, once every year during normal
business hours through an independent certified public accountant, an
examination of the accounts contemplated above. If any audit shall show that
either party underpaid amounts due under this Agreement as to the period covered
by the audit, then the party which underpaid shall immediately pay to the other
any such deficiency, and if such party has underpaid by ten percent or more, the
underpaying party shall pay the other party's audit expenses.
21
SECTION 12.02 RETENTION. Books and records required to be maintained
---------
by the parties hereunder shall be retained for at least three years from the
date of the payment to which they pertain.
ARTICLE XIII
TERM AND TERMINATION
--------------------
SECTION 13.01 TERM. This Agreement shall continue so long as any
----
System is being developed or marketed under this Agreement, unless terminated
earlier pursuant to Section 13.02 or Section 13.03.
SECTION 13.02 TERMINATION BY AGREEMENT. This Agreement may be
------------------------
terminated by the mutual written agreement of Pall and Vitex, with such effect
as shall be set forth in such agreement.
SECTION 13.03 TERMINATION FOR CAUSE.
---------------------
13.03(A) As used herein, "Material Default" means the failure of a
party hereto (the "Defaulting Party") to perform or fulfill such party's
obligations under this Agreement and either (i) the obligations which such party
has failed to perform or fulfill are of such nature or importance that it is
impractical for the parties to continue jointly the business which is
contemplated by this Agreement or unreasonable to expect the other party (the
"Non-Defaulting Party") to continue such business jointly or (ii) the nature of
the obligations which the Defaulting Party has failed to perform or fulfill or
the circumstances of such failure are such as to evidence either bad faith by
the Defaulting Party or the inability of the Defaulting Party, for financial or
other reasons, to continue to perform its obligations under this Agreement. In
addition, the termination of XXXXXXX XXXXXXXX'x employment with Vitex shall be
deemed a Material Default by Vitex.
13.03(B) If either party hereto shall be in Material Default, the
Non-Defaulting Party shall have the right to give the Defaulting Party a notice
(a "Notice to Cure") advising the Defaulting Party in reasonable detail of the
respects in which, in the judgment of the Non-Defaulting Party, the Defaulting
Party is in Material Default. The Notice to Cure shall specify a period of
time, not less than 30 days from the date on which such notice is given, within
which the Defaulting Party must cure its Material Default, and the Defaulting
Party shall have such specified period of time (or such longer period as may
reasonably be required to cure the alleged Material Default in light of the
nature thereof) (the "Cure Period") within which to cure its Material Default.
Unless the Material Default has been cured by the end of the Cure Period, then
within 60 days thereafter the Non-Defaulting Party may give the Defaulting Party
a further notice (the "Notice of Termination") to the effect that this Agreement
shall terminate as of the date specified in such notice which shall be not less
than 30 days from the date on which
22
such Notice of Termination is given. On the date so specified, unless prior to
said date the effect of the Notice of Termination has been suspended or
nullified by court order, this Agreement shall be deemed terminated as between
the parties, but such termination shall not relieve the Defaulting Party of
liability to the Non-Defaulting Party for damages (including consequential but
not punitive damages) arising from its Material Default and from the termination
of this Agreement.
13.03(C) In the event of termination under the terms of Section
13.03(b) above, the Non-Defaulting Party shall have the right, if it so elects,
to take over and continue the business and operations to be conducted by the
parties under this Agreement and to acquire from the Defaulting Party, for a
"Fair Price" (as hereinafter defined), all of the patents, know-how and other
intellectual property required for such continuance of the business and
operations and all other rights and property, tangible and intangible, including
inventory and work in process, required for such continuance, provided, however,
-------- -------
that if Pall is the Defaulting Party, Vitex shall acquire no rights to
manufacture or market Reference Sets or any Systems which include a Reference
Set, or any patents, know-how or other intellectual or other property or rights
relating to Reference Sets. If the Non-Defaulting Party does not, in the event
of termination, elect, in accordance with the preceding sentence to take over
and continue the business and operations conducted under this Agreement, the
Non-Defaulting Party shall nevertheless, at its option, be entitled to request,
and the Defaulting Party shall be obligated to grant to the Non-Defaulting Party
upon such request, a license, upon the same terms as applicable to the
Defaulting Party, and at no additional cost to the Non-Defaulting Party, to all
the patents, know-how and other intellectual property controlled by or licensed
to the Defaulting Party, or if such patents, know how and other intellectual
property are owned by the Defaulting Party, a perpetual worldwide royalty-free
license to such patents, know-how or other intellectual property, which is
required or used in connection with the Systems and the transactions
contemplated by this Agreement; provided, however, that if Pall is the
-------- -------
Defaulting Party, Pall shall not be obligated to grant a license to Vitex with
respect to any patents, know-how or intellectual property or rights relating to
Reference Sets.
13.03(D) As used in this Section, a "Fair Price" means (i) the amount
which, as of the effective date of the termination, an unrelated third party
would pay to acquire the rights of the Defaulting Party under this Agreement
without giving effect to the Material Default minus (ii) the damages for which
the Defaulting Party has become liable by reason of the Material Default.
Pending determination of the Fair Price, either by agreement of the parties or
by court decision, the Non-Defaulting Party shall have the right to take over
and continue the business as aforesaid provided the Non-Defaulting Party
furnishes adequate security for the payment of the estimated amount of the Fair
Price. Adequate security shall be deemed to be a letter of credit of a
responsible financial institution selected by the Non-Defaulting Party or the
deposit of cash or readily saleable securities in escrow with such institution.
If the parties are unable to agree on the estimated amount of the Fair Price
within 30 days after the effective date of the termination, such estimated
amount shall be determined by arbitration in accordance with Section 16.04
hereof.
23
ARTICLE XIV
-----------
REPRESENTATIONS, WARRANTIES, COVENANTS AND INDEMNITIES
------------------------------------------------------
SECTION 14.01 VITEX REPRESENTATIONS. Except as set forth in Exhibit
--------------------- -------
D hereto, Vitex represents and warrants that as of the date of this Agreement:
-
14.01(A) Vitex is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, has the corporate
power and authority to own and operate its properties and assets and to conduct
its business as presently conducted, and is qualified to do business as a
foreign corporation and is in good standing in the State of New York and in all
other jurisdictions where such qualification is required, except where failure
to so qualify would not have a material adverse effect on the condition
(financial or otherwise), results of operations, business, assets, or prospects
of Vitex. As of the date of this Agreement, Vitex has no majority-owned,
consolidated subsidiaries.
14.01(B) Vitex has the corporate power and authority to execute,
deliver and perform this Agreement, has taken all corporate action necessary to
authorize the execution, delivery and performance by Vitex of this Agreement and
has delivered to Pall a certificate of the Secretary or Assistant Secretary of
Vitex as to (A) the incumbency and signature of each officer of Vitex executing
instruments and agreements on behalf of Vitex in connection with the
transactions contemplated hereby, and (B) duly adopted resolutions of Vitex's
Board of Directors authorizing the execution, delivery and performance by Vitex
of this Agreement and the instruments and agreements to be executed and
delivered by Vitex hereunder. No consent or authorization of, or filing with,
any Person (including, without limitation, any Governmental Authority) is
required in connection with the execution, delivery and performance by Vitex of
this Agreement, except for consents, authorizations or filings which to obtain
or make would not, in the aggregate, have a material adverse effect on the
ability of Vitex to perform its obligations hereunder.
14.01(C) This Agreement has been duly executed and delivered by
Vitex, and this Agreement constitutes the legal, valid and binding obligation of
Vitex, enforceable against Vitex in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting creditors' rights generally or by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
14.01(D) [INTENTIONALLY DELETED]
14.01(E) Vitex has granted no prior license or assignment of rights
under the Vitex Patents, Vitex Know-How or other Vitex intellectual property
rights to be used in the
24
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
Cooperative Development Work and has all right, power and authority necessary to
allow the use of all such intellectual property for the purposes of and as
required or contemplated by this Agreement.
14.01(F) To Vitex's Knowledge, there are no material foreign or
United States administrative, judicial or Patent and Trademark Office
proceedings contesting the inventorship or ownership of any Vitex Patent.
14.01(G) Neither the execution and delivery of this Agreement nor the
performance of the obligations of Vitex hereunder will result in a violation,
breach or event of default (or any event or condition which with notice or the
passage of time or both would constitute an event of default) of or with respect
to any material agreement or any order of any court of competent jurisdiction
binding upon Vitex or upon the property of Vitex.
14.01(H) Vitex has arranged for the execution by NYBC of the Amendment
to Exclusive License Agreement (#5) for Virally Inactivated Cellular Products,
dated February 16, 1998 (the "License Amendment"), and has delivered to Pall,
prior to or at the time of the execution of this Agreement, a fully executed
copy of the License Amendment, which is annexed hereto as Exhibit E.
---------
14.01(I) Vitex has given Pall copies of the following agreements which
represent all agreements that are necessary or are otherwise of material
importance to (except to the extent that failure to have an agreement would not
individually or in the aggregate have a material adverse effect upon the
obligations undertaken and transactions contemplated by this Agreement) the
development and commercialization of Systems and the performance of the
transactions contemplated by this Agreement: (i) Exclusive License Agreement
(#5) For Virally Inactivated Cellular Products, dated September 21, 1995, with
NYBC, as amended by the License Amendment, (ii) Licensing Agreement, dated
January 1, 1996, with ******** and NYBC, as amended by First Amendment to
Licensing Agreement, dated December 11, 1995 (and any amendments thereto), (iii)
Research, Development, License and Manufacturing Master Agreement, dated as of
March 15, 1997, with EFOS (and any amendments thereto), and (iv) Omnibus
Agreement, dated May 22, 1996, with NYBC (and any amendments thereto)
(collectively referred to as the "License Agreements"). If amended in accordance
with the terms of Section 14.10(b)(ii) of this Agreement, the License Agreements
will provide the necessary rights to carry out the transactions contemplated by
this Agreement.
14.01(J) Vitex has given Xxxxxx X. Xxxxxxx, Group Vice President of
Pall, a fully executed copy of Xxxxxxx Xxxxxxxx'x Employment Agreement with
Vitex, which Employment Agreement constitutes the legal, valid and binding
obligation of each of Vitex and Xxxxxxx Xxxxxxxx, enforceable against each of
Vitex and Xxxxxxx Xxxxxxxx, in accordance with its terms.
25
14.01(K) Vitex has formally terminated and has no further obligations
under Project Agreement, dated October 15, 1996 and Letter Agreement dated
November 25, 1996, each with The Ohio State University Research Foundation (and
any other amendments thereto).
14.01(L) The agreement, effective as of May 6, 1994, between Vitex,
NYBC, The Alberta Research Council and Synsorb Biotech Inc. is not necessary for
and is not of material importance to the development and commercialization of
Systems and the performance of the transactions contemplated by this Agreement.
14.01(M) The execution of this Agreement and delivery to Pall does
not conflict with the terms of the License Agreements if amended pursuant to the
terms of Section 14.10(b)(ii) of this Agreement.
14.01(N) The transactions contemplated by this Agreement will not
result in the loss by Vitex of the benefits of the License Agreements or of any
business relationship with the parties to the License Agreements.
14.01(O) As of the date of this Agreement, no litigation,
investigation or proceeding by or before any court or Governmental Authority or
arbitrator is pending or, to Vitex's Knowledge, threatened against Vitex with
respect to or in connection with the Vitex Patents and the Vitex Know-How which,
if adversely determined, would have a material adverse effect on the ability of
Vitex to perform its obligations hereunder, or which relates, in any way to the
validity of this Agreement or of any action taken or to be taken by Vitex
pursuant to this Agreement.
14.01(P) Vitex has advised Pall of any Knowledge of any third party
patent or know-how that might be infringed by the incorporation of any Vitex
Patent or Vitex Know-How likely to be embodied or used in a System.
14.01(Q) Vitex has no Knowledge of any technology not licensed to
Pall hereunder that it believes would be necessary to optimally use the Vitex
Inactivation Compounds or Instrumentation.
14.01(R) This Agreement and the other documents, certificates or
written statements furnished or to be furnished to Pall by or on behalf of Vitex
in connection with the transactions contemplated by this Agreement, taken as a
whole, do not, as of the date of this Agreement, contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements contained therein, in light of the circumstances in which they were
made, not misleading. The representations and warranties of Vitex set forth in
this Agreement are true and correct as of the date of this Agreement (except for
such inaccuracies or breaches of warranties as will not have a material adverse
effect on the ability of Vitex to
26
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
perform its obligations hereunder) and Pall shall have received a certificate to
that effect signed on behalf of Vitex by an authorized officer of Vitex.
SECTION 14.02 VITEX INDEMNIFICATION: REPRESENTATIONS AND WARRANTIES.
-----------------------------------------------------
Vitex shall indemnify Pall for any losses sustained or expenses incurred by Pall
as a result of a breach by Vitex of any of the foregoing representations and
warranties.
SECTION 14.03 VITEX INDEMNIFICATION: PRODUCTS. Vitex shall defend,
-------------------------------
indemnify and hold Pall harmless from and against any and all claims, actions,
causes of action, judgments, awards, losses, damages (but not including punitive
damages), liabilities, suits and expenses, including reasonable attorney's fees
(collectively, "Losses") by reason of liability imposed by law upon Pall
********* **** *** **** ** ******* ** *** ****** *** **** *********, *********
*********, *** *** ******* ** ******** *********, ****** **** *** ******* **
******* ** ************** *** *** ***** *********** ********** **
*************** ************ **** *** *******; provided that Pall shall give
Vitex prompt written notice of such claim and Vitex shall have the right to
defend such claim at its expense (Pall having the right to participate in any
such defense at Pall's own expense).
SECTION 14.04 MATERIAL BREACH: PATENTS. A breach by Vitex of its
------------------------
representations and warranties contained in Section 14.01(e) of this Agreement
shall constitute a Material Default under the terms of this Agreement.
SECTION 14.05 VITEX INSURANCE. Vitex shall, at its own expense,
---------------
establish and at all times during the period from Regulatory Approval until
three years after the last delivery of a System under this Agreement carry
products liability insurance in an amount not less than ******** initially,
adjusted for inflation annually thereafter, each occurrence combined single
limit bodily injury and property damage, provided that such insurance is
available on commercially reasonable terms. The insurance policy shall be
endorsed to name Pall as an additional insured and to provide for written
notification to Pall by the insurer not less than thirty (30) days prior to
cancellation, non-renewal or material change. A certificate of insurance
evidencing compliance with this section and referencing this Agreement shall be
furnished to Pall by Vitex within ten (10) days after Regulatory Approval.
SECTION 14.06 PALL REPRESENTATIONS. Pall represents and warrants to
--------------------
Vitex that as of the date of this Agreement:
14.06(A) Pall is a corporation duly organized, validly existing and
in good standing under the laws of New York, and has the corporate power and
authority to own its properties and to carry on its business as presently
conducted.
14.06(B) Pall has the corporate power and authority to execute,
deliver and perform this Agreement, has taken all corporate action necessary to
authorize the execution,
27
delivery and performance by Pall of this Agreement and has delivered to Vitex a
certificate of the Secretary or Assistant Secretary of Pall as to (A) the
incumbency and signatures of each officer of Pall executing instruments and
agreements on behalf of Pall in connection with the transactions contemplated
hereby, and (B) duly adopted resolutions of Pall's Executive Committee of the
Board of Directors authorizing the execution, delivery and performance by Pall
of this Agreement and the instruments and agreements to be executed and
delivered by Pall hereunder. No consent or authorization of, or filing with, any
Person (including, without limitation, any Governmental Authority) is required
in connection with the execution, delivery and performance by Pall of this
Agreement, except for consents, authorizations or filings which to obtain or
make would not, in the aggregate, have a material adverse effect on the ability
of Pall to perform its obligations hereunder.
14.06(C) This Agreement has been duly executed and delivered by Pall,
and this Agreement constitutes the legal, valid and binding obligation of Pall,
enforceable against Pall in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium, or similar
laws affecting creditors' rights generally or by general principles or equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
14.06(D) Pall has granted no prior license or assignment of rights
under the Pall Patents, Pall Know-How or other Pall intellectual property rights
to be used in the Cooperative Development Work that would materially impair its
ability to develop, manufacture or sell Systems and has all right, power and
authority necessary to allow the use of all such intellectual property for the
purposes of and as required or contemplated by this Agreement.
14.06(E) To Pall's Knowledge, there are no material foreign or United
States administrative, judicial or Patent and Trademark Office proceedings
contesting the inventorship or ownership of any Pall Patent that is likely to be
embodied or used in a System.
14.06(F) Neither the execution and delivery of this Agreement, nor
the performance of the obligations of Pall hereunder will result in a violation,
breach or event of default (or any event or condition which with notice or the
passage of time or both would constitute an event of default) of or with respect
to any material agreement or any order of any court of competent jurisdiction
binding upon Pall or upon the property of Pall.
14.06(G) Pall is not a party to any agreement materially adverse to
the obligations undertaken and rights granted in this Agreement.
14.06(H) The execution of this Agreement and delivery to Vitex does
not conflict with the terms of any agreement which Pall is a party to or which
it is bound by.
28
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
14.06(I) As of the date of this Agreement, no litigation
investigation or proceeding by or before any court or Governmental Authority or
arbitrator is pending or, to Pall's Knowledge, threatened against Pall with
respect to or in connection with the Pall Patents and the Pall Know-How which,
if adversely determined, will have a material adverse effect on the ability of
Pall to perform its obligations hereunder, or which relates in any way to the
validity of this Agreement or of any action taken or to be taken by Pall
pursuant to this Agreement.
14.06(J) Pall has advised Vitex of any Knowledge of any third party
patent or know-how that might be infringed by the incorporation by Pall of any
Pall Patent or Pall Know-How likely to be embodied or used in a System.
14.06(K) Pall has no Knowledge of any technology not licensed to
Vitex it believes would be necessary to optimally use the Pall Patents or Pall
Know-How in a System.
14.06(L) This Agreement and the other documents, certificates or
written statements furnished or to be furnished to Vitex by or on behalf of Pall
in connection with the transactions contemplated by this Agreement, taken as a
whole, do not as of the date of this Agreement, contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements contained therein, in light of the circumstances in which they were
made, not misleading. The representations and warranties of Pall set forth in
this Agreement are true and correct as of the date of this Agreement (except for
such inaccuracies or breaches of warranties as will not have a material adverse
effect on the ability of Pall to perform its obligations hereunder) and Vitex
shall have received a certificate to that effect signed on behalf of Pall by an
authorized officer of Pall.
SECTION 14.07 PALL INDEMNIFICATION: REPRESENTATIONS AND WARRANTIES.
----------------------------------------------------
Pall shall indemnify Vitex for losses sustained or expenses incurred by Vitex as
a result of a breach by Pall of the foregoing representations and warranties.
SECTION 14.08 PALL INDEMNIFICATION: PRODUCTS. Pall shall indemnify
------------------------------
and hold Vitex harmless from and against any and all Losses by reason of
liability imposed by law upon Vitex resulting from the sale of Systems to the
extent any such liability, including but not limited to product liability,
arises from the failure of components of Systems manufactured, marketed or
distributed by or for Pall (excluding Vitex Inactivation Compounds and
Instrumentation if manufactured by a third party) to conform to specifications;
provided that Vitex shall give Pall prompt written notice of such claim and Pall
shall have the right to defend such claim at its expense (Vitex having the right
to participate in such defense at its own expense).
SECTION 14.09 PALL INSURANCE. Pall shall, at its own expense,
--------------
establish and maintain until three years after the last delivery of a System
under this Agreement products liability insurance in an amount not less than
******** initially, adjusted for inflation annually thereafter, each
occurrence combined single limit bodily injury and property damage, provided
29
that such insurance is available on commercially reasonable terms. The insurance
policy shall be endorsed to name Vitex as an additional insured and to provide
for written notification to Vitex by the insurer not less than thirty days prior
to cancellation, non-renewal or material change. A certificate of insurance
evidencing compliance with this Section and referencing this Agreement shall be
furnished to Vitex by Pall within ten days of the date that Pall becomes
obligated to establish such insurance.
SECTION 14.10 COVENANTS AND ASSURANCES OF PALL AND VITEX.
------------------------------------------
14.10(A) MUTUAL COVENANTS OF THE PARTIES.
-------------------------------
(i) At any time subsequent to the date of this Agreement, each of
the parties hereto will use its reasonable best efforts in good faith to take,
or cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective the transactions
contemplated by this Agreement.
(ii) At any time subsequent to the date of this Agreement, each of
Pall and Vitex will not knowingly or intentionally take, or voluntarily omit to
take, any action which will result in a breach of any representation, warranty
or covenant by such party in this Agreement.
(iii) At all times subsequent to the date of this Agreement, Vitex
will permit Pall and its representatives and Pall will permit Vitex, and its
representatives, reasonable access to each of their respective records,
materials, information and data, in connection with the transactions
contemplated by this Agreement, excluding any such materials containing
confidential information not related to the transactions contemplated by this
Agreement. Vitex shall, in particular, xxxxx Xxxx and its representatives,
access to such records, materials, information and data as necessary to
satisfactorily complete its technical, business and legal due diligence.
(iv) During the term of this Agreement, each of the parties hereto
agrees that it shall not, without the prior written consent of the other,
directly or indirectly, own, manage, operate, finance, join, control, or
participate in the ownership, management, operation, financing or control of, or
be connected as a partner or otherwise with, any other business which (A)
directly or indirectly competes with the provision, distribution, marketing or
sale of the Systems (the "Business"), except, with respect to Pall, as set forth
in Section 2.01 and Exhibit C, or (B) solicits any customers or clients of the
Business in connection with the Systems. In the event that the provisions of
this Section 14.10(a)(iv) should ever be deemed to exceed the time, geographic
or product limitations or any other limitations permitted by applicable laws,
then such provisions shall be deemed reformed to the maximum extent required by
applicable laws. Each of the parties acknowledges, however, that this Section
14.10(a)(iv) has been negotiated by the parties and that the time, geographic
and product limitations, as well as the limitation on activities, are reasonable
in light of the circumstances pertaining to this Agreement and the
30
transactions contemplated hereby. Any violation of this Section 14.10(a)(iv)
shall constitute a Material Default (as defined in Section 13.03(a) of this
Agreement).
SECTION 14.10(B) COVENANTS OF VITEX. Vitex hereby covenants that
------------------
Vitex will use its reasonable best efforts in good faith to take, or cause to be
taken, all actions necessary, proper or advisable in order to ensure that:
(i) Vitex is not a party to any agreement materially adverse to the
obligations undertaken and rights granted in this Agreement;
(ii) Certain of the License Agreements, as are listed in Exhibit F
---------
annexed hereto, are amended (to Pall's sole satisfaction) as provided in the
annexed Exhibit F, and shall deliver to Pall, on or before April 1, 1998, fully
---------
executed copies of such amendments;
(iii) The execution of this Agreement and delivery to Pall does not
conflict with the terms of any agreement which Vitex is a party to or which it
is bound by; and
(iv) From and after the date of this Agreement and for two (2) years
following its termination, Vitex agrees that it shall not, without the prior
written consent of Pall, directly or indirectly, own, manage, operate, finance,
join, control or participate in the ownership, management, operation, financing
or control of, or be connected as a partner or otherwise with, any other
business which (A) directly or indirectly competes with any systems for
collection, processing and storage of blood and leukocyte depletion filters
produced or manufactured by or for Pall or its Affiliates and sold by Pall or
its Affiliates ("Pall's Business") or (B) solicits any customers or clients of
Pall's Business, now or hereafter existing, in connection with the provision,
distribution, marketing or sale of systems for collection, processing and
storage of blood and leukocyte depletion filters. In the event that the
provisions of this Section 14.10(b)(iv) should ever be deemed to exceed the
time, geographic or product limitations or any other limitations required by
applicable laws, then such provisions shall be deemed reformed to the maximum
extent permitted by applicable laws. Vitex acknowledges, however, that this
Section 14.10(b)(iv) has been negotiated by the parties and that the time,
geographic and product limitations, as well as the limitation on activities, are
reasonable in light of the circumstances pertaining to this Agreement and the
transactions contemplated hereby. Any violation of this Section 14.10(b)(iv)
shall constitute a Material Default (as defined in Section 13.03(a) of this
Agreement).
ARTICLE XV
INFRINGEMENT
------------
31
SECTION 15.01 DEFENSE OF THIRD PARTY INFRINGEMENT SUITS. In the
-----------------------------------------
event that a third party shall xxx either party alleging that the manufacture,
use or sale of a System, or any part thereof, infringes a patent of such third
party, the Management Board shall have the option to control the defense of such
suit. The parties shall provide reasonable cooperation in the defense of such
suit and furnish all evidence in their control. All attorneys' fees as well as
any judgments, settlements, or damages payable with respect to such suit shall
be subject to cost sharing pursuant to Section 2.06(a), except that to the
extent the suit is based on a product used by either Pall or Vitex outside of a
System, the other party shall only be required to contribute pro rata to the
defense and to the ultimate payment of damages or settlement. Neither party
shall enter into any settlement that materially affects the other party's rights
or interests without such other party's prior written consent, which consent
shall not be unreasonably withheld.
SECTION 15.02 THIRD PARTY PATENT EXPENSES. All patent royalties
---------------------------
payable to NYBC in connection with the Vitex Patents pursuant to the terms of
the License Amendment, net of any offsets or credits to which Vitex is entitled
to under Paragraph H of the License Amendment, shall be borne equally by Pall
and Vitex. For purposes of this Section 15.02, the terms "patent royalties" and
"patent royalty payments" shall not include any payments described in Section
4.3 of the Exclusive License Agreement (#5) for Virally Inactivated Cellular
Products dated September 21, 1995 (as amended by the License Amendment) to the
extent such payments exceed the amount of "ROYALTIES" (as such term is defined
in the License Amendment) payable under Paragraph E(i) of the License Amendment.
With respect to Vitex's share of the patent royalties paid to NYBC in connection
with the Vitex Patents under the terms of this Section 15.02, Pall may deduct
from Revenue Sharing Payments due to Vitex, Vitex's share of such patent royalty
payments if Pall, at Vitex's request, shall have paid Vitex's share of such
patent royalty payments. The parties to this Agreement agree and acknowledge
that all other patent royalties or patent payments which must be paid in
connection with the Vitex Patents shall be borne exclusively by Vitex and all
patent royalties or patent payments which must be paid in connection with the
Pall Patents shall be borne exclusively by Pall.
SECTION 15.03 SUITS FOR INFRINGEMENT BY OTHERS.
--------------------------------
15.03(A) JOINT PATENTS. In the event Pall or Vitex acquires
-------------
Knowledge of any actual or threatened infringement of a Joint Patent or Joint
Invention, that party shall promptly notify the Management Board and the
Management Board shall determine the most appropriate action to take. All
expenses in pursuing any such suit shall be subject to cost-sharing. Any award
in such suit shall be divided equally between the parties.
15.03(B) VITEX PATENTS; VITEX KNOW-HOW; PALL PATENTS; PALL KNOW-HOW.
----------------------------------------------------------
In the event Pall or Vitex acquires Knowledge of any actual or threatened
infringement of the Vitex Patents or Vitex Know-How, or the Pall Patents or Pall
Know-How, that party shall promptly notify the Management Board and (i) with
respect to actual or threatened infringement of such of Vitex's Patents as are
licensed to Vitex under agreements with third parties or such of Pall's
32
Patents as are licensed to Pall under agreements with third parties, the
Management Board shall promptly provide written notification to such third
parties and in determining the appropriate action to be taken, comply with the
other requirements of the relevant third-party agreement and (ii) with respect
to actual or threatened infringements of all other Vitex Patents, Pall Patents,
Pall Know-How, or Vitex Know-How, the Management Board shall determine the most
appropriate action to take. All expenses for pursuing any such suit shall be
subject to cost sharing, except where Pall and Vitex shall not share control of
such suit or the award or settlement in any such suit, or as otherwise required
by an agreement between Pall or Vitex and a third party. Any award in such suit
shall be divided equally between the parties, except where otherwise required by
an agreement between Pall or Vitex and a third party. In the event that the
Management Board determines not to proceed with suit, the owner of the relevant
Patent and Know-How may at its sole discretion and expense initiate and conduct
an infringement action relating to alleged infringement of such Patent or Know-
How and retain any settlement or award which may be obtained.
In the event the accused product is not in competition with a System:
(i) Vitex alone may, in its sole discretion and at its expense,
initiate and conduct an infringement action relating to alleged infringement of
Vitex Patents or Vitex Know-How and retain any settlement or award which may be
obtained, provided, however, that Vitex complies with the applicable provisions
-------- -------
of any relevant agreement between Vitex and a third party.
(ii) Pall alone may, in its sole discretion and at its expense,
initiate and conduct an infringement action relating to alleged infringement of
Pall Patents or Pall Know-How and retain any settlement or award which may be
obtained provided, however, that Pall complies with the applicable provisions of
-------- -------
any relevant agreement between Pall and a third party.
ARTICLE XVI
MISCELLANEOUS
-------------
SECTION 16.01 NOTICES. Any notice, consent or approval required or
-------
permitted to be given or sent hereunder shall be in writing and shall be sent by
registered or certified mail or overnight delivery service such as Federal
Express, and, if intended for either party, shall be addressed to it (if sent by
mail or overnight delivery service) at the address given below for each party,
or at such other address and for the attention of such other Person of which
either party shall have given notice to the other in the manner herein provided.
Each such notice shall be deemed to be given on the date five days after the
date on which it is mailed or one business day after the date on which it is
received by the overnight delivery service.
(a) If to Pall to:
33
Pall Corporation
0000 Xxxxxxxx Xxxx.
Xxxx Xxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
with a copy to:
Xxxxxx, Xxxxxxx & Xxxxxxx
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. XxXxxxxxx, Esq.
(b) If to Vitex, to:
V.I. Technologies, Inc.
000 Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: President
with a copy to:
Xxxxxxx, Del Deo, Dolan, Griffinger & Xxxxxxxxx, P.C.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
SECTION 16.02 ENTIRE AGREEMENT. This Agreement constitutes the
----------------
entire agreement between the parties with respect to the matters dealt with in
this Agreement and supersedes any previous agreements or understandings between
the parties in relation to such matters. Each of the parties acknowledges that
in entering into this Agreement, it has not relied on any representation or
warranty save as expressly set out herein or in any document referred to herein.
SECTION 16.03 AMENDMENTS. This Agreement may be amended, modified or
----------
supplemented only by a written instrument that refers expressly to this
Agreement and that is executed by an authorized signatory of the party to be
charged therewith. Any modification or variation of this Agreement other than
in accordance with this Section 16.03 shall be null and void.
SECTION 16.04 DEADLOCKS: GOVERNING LAW; ARBITRATION.
-------------------------------------
34
16.04(A) All deadlocks of the Management Board shall be finally
settled by binding arbitration in New York, New York under the Arbitration Rules
(the "Rules") of the American Arbitration Association (the "AAA") by one
arbitrator selected by the AAA.
16.04(B) This contract shall be governed, interpreted and construed
exclusively under the substantive laws of the State of New York. The arbitrator
shall apply New York law to the merits of any dispute or claim, without
reference to rules of conflict of law. The arbitration proceedings shall be
governed by the Rules, without reference to state arbitration law. At the
request of either party, the arbitrator will enter an appropriate protective
order to maintain the confidentiality of information produced or exchanged in
the course of the arbitration proceedings. Judgment on the award rendered by
the arbitrator may be entered in any court having jurisdiction thereof.
16.04(C) The parties may apply to any court of competent jurisdiction
for a temporary restraining order, preliminary injunction, or other interim or
conservatory relief, as necessary, without breach of this arbitration agreement
and without any abridgment of the powers of the arbitrator.
16.04(D) The arbitrator will award to the prevailing party, if any,
as determined by the arbitrator, all of its costs and fees, including, without
limitation, AAA administrative fees, arbitrator fees, travel expenses, out-of-
pocket expenses (including, without limitation, such expenses as copying,
telephone, facsimile, postage, and courier fees), witness fees, and attorneys'
fees and disbursements. If the arbitrator determines that there is no clearly
"prevailing party", the arbitrator can apportion such expenses between the
parties in such respective percentages as he deems appropriate.
SECTION 16.05 DISPUTES OTHER THAN DEADLOCKS. All disputes other than
-----------------------------
deadlocks of the Management Board (including disputes or claims arising out of
or in relation to this Agreement, or the interpretation, making, performance,
breach, validity or termination thereof) shall be resolved by appropriate legal
proceedings and not by arbitration and the governing law and jurisdiction shall
be as set forth in Section 16.11 of this Agreement.
SECTION 16.06 ASSIGNMENT. The rights and liabilities conferred by
----------
this Agreement are personal to the parties hereto and may not be assigned or
transferred in whole or in part by either party hereto without the prior consent
in writing of the other party; except that Pall may assign its rights and
obligations hereunder to any of its Affiliates.
SECTION 16.07 BINDING EFFECT. This Agreement shall be binding upon,
--------------
and shall inure to the benefit of and be enforceable by, the parties hereto and
their respective successors and permitted assigns. This Agreement is for the
sole benefit of the parties hereto and nothing in this Agreement, expressed or
implied, is intended or shall be construed to confer upon any
35
Person, other than the parties and successors and assigns permitted by Section
16.06, any right, remedy or claim under or by reason of this Agreement.
SECTION 16.08 WAIVERS. No failure to exercise and no delay in
-------
exercising on the part of any party hereto any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege preclude any other or further exercise
thereof. In the event that any party hereto shall expressly waive any breach,
default or omission hereunder, no such waiver shall apply to, or operate as, a
waiver of similar breaches, defaults or omissions or be deemed a waiver of any
other breach, default or omission hereunder. The rights and remedies of each of
the parties in connection herewith are cumulative and are not exclusive of any
rights or remedies provided by law or equity.
SECTION 16.09 PARTIAL INVALIDITY. The respective restrictions on
------------------
the parties herein contained are considered reasonable by the parties but, if
any such restriction shall be found void but would be valid if some part thereof
were deleted or the period or area of application reduced, such restriction
shall apply with such modification as may be necessary to make it valid and
effective.
SECTION 16.10 SEVERABILITY. If at any time any provision of this
------------
Agreement is or becomes invalid, illegal or unenforceable in any respect under
the law of any jurisdiction, neither the validity, legality or enforceability of
the remaining provisions shall in any way be affected or impaired thereby.
SECTION 16.11 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement
--------------------------------------
will be deemed to have been made and delivered in the State of New York and will
be governed as to validity, interpretation, construction, effect and in all
other respects by the internal laws of the State of New York. Pall and Vitex
(a) agree that any legal suit, action or proceeding arising out of or relating
to this Agreement may be instituted in the Supreme Court of the State of New
York, County of Nassau, or in the United States District Court for the Southern
District of New York, (b) waive any objection to the venue of any such suit,
action or proceeding, and (c) irrevocably consent to the jurisdiction of the
Supreme Court of the State of New York, County of Nassau, and the United States
District Court for the Southern District of New York in any such suit, action or
proceeding. Both parties further agree to accept and acknowledge service of any
and all process which may be served in any such suit, action or proceeding in
such courts and agree that service of process sent by registered mail, return
receipt requested, to the other party at such party's then current address under
Section 16.01 of this Agreement will be deemed in every respect effective
service of process in any such suit, action or proceeding.
SECTION 16.12 COSTS AND ATTORNEYS' FEES. Each party will pay its own
-------------------------
costs and attorneys' fees incident to this Agreement and the transactions
contemplated hereby (except as may be specifically provided for herein) whether
or not these transactions shall be consummated.
36
SECTION 16.13 COUNTERPARTS. This Agreement may be executed in any
------------
number of counterparts, and by each party on separate counterparts, each of
which as so executed and delivered shall be deemed an original but all of which
together shall constitute one and the same instrument, and it shall not be
necessary in making proof of this Agreement as to any party hereto to produce or
account for more than one such counterpart executed and delivered by such party.
37
IN WITNESS WHEREOF, Pall and Vitex have caused this Agreement to be
executed by their authorized representatives as of the date first above written.
PALL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Group Vice President
V.I. TECHNOLOGIES, INC.
By: /s/ Xxxx Xxxx
----------------------------------------------
Name: Xxxx Xxxx
Title: President
38
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
EXHIBIT A
PALL PATENTS
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["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
EXHIBIT B
---------
VITEX PATENTS
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EXHIBIT C
COOPERATIVE DEVELOPMENT EXCEPTIONS
1. The alliance with Quadrant Healthcare, Ltd., in Cambridge, England,
pursuant to Technology License Agreement, dated August 3, 1997, between
Pall Corporation and Quadrant Holdings Cambridge Ltd.
EXHIBIT D
VITEX REPRESENTATION EXCEPTIONS
The following agreements are excepted from Vitex's representations and
warranties:
(1) Biomanufacturing Agreement, dated as of July 23, 1997, between Vitex
and Collaborative Bio Alliance, Inc.
EXHIBIT E
[See Exclusive License Agreement (#5) and amendment thereto filed as
Exhibit 10.8 to the Registration Statement]
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
EXHIBIT F
LICENSE AGREEMENTS TO BE AMENDED
As provided in Section 14.10(b) of the Joint Development, Marketing and
Distribution Agreement, Vitex shall use its reasonable best efforts in good
faith to amend, in accordance with the instructions set forth below, and deliver
to Pall, on or before April 1, 1998, fully executed amendments of the following
License Agreements (terms not defined herein shall have the meaning given to
them in the Joint Development, Marketing and Distribution Agreement):
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2. RESEARCH DEVELOPMENT, LICENSE AND MANUFACTURING MASTER AGREEMENT (THE "EFOS
---------------------------------------------------------------------------
AGREEMENT"), DATED AS OF MARCH 15, 1997, BETWEEN VITEX AND EFOS
---------------------------------------------------------------
(A) TERM AND TERMINATION. Unless earlier terminated, the EFOS Agreement
---------------------
remains in force for a period of two years from March 15, 1997, automatically
renewing thereafter for one year terms (unless terminated by either party with
six months prior notice). EFOS may earlier terminate the EFOS Agreement for an
uncured failure by Vitex to make the required payments or to perform any of its
material obligations thereunder, and thus, the amendment of this Agreement, must
require that EFOS notify Pall of any default by Vitex under the terms of the
EFOS Agreement and give Pall an opportunity to cure the default and take over
Vitex's position vis-a-vis EFOS.
3. OMNIBUS AGREEMENT (THE "NYBC AGREEMENT"), DATED MAY 22, 1995, BETWEEN VITEX
---------------------------------------------------------------------------
AND NYBC
--------
(A) DUTY TO ASSIST. Section 7.5 of the NYBC Agreement provides that if
--------------
Vitex seeks to enter into a license agreement with a third party whereby
intellectual property rights of the third party in the field of viral
inactivation are to be licensed to Vitex, then Vitex, if NYBC so desires, must
assist NYBC to obtain rights in such intellectual property. The NYBC Agreement
must be amended to provide that it does not apply to any licenses that Vitex
obtains as a result of the Pall-Vitex transaction.
(B) TERMINATION. The NYBC Agreement may be terminated by NYBC upon an
-----------
uncured breach by Vitex of a material condition. Therefore, the amendment of
this Agreement must contain notice and cure provisions similar to those of the
License Amendment.
(C) DEFINITIONS. The definition Section of the NYBC Agreement should be
-----------
amended to provide that the "Cellular Agreement" and the "Edison Agreement"
include the original agreement and any amendments thereto.
