EXHIBIT 10.202**
CONFIDENTIAL TREATMENT
LICENSE AND SUPPLY AGREEMENT
This Agreement, effective as of the 17th day of August, 1989, by and among
ORTHO DIAGNOSTIC SYSTEMS INC. ("ODS"), a New Jersey corporation with offices at
U.S. Xxxxx #000, Xxxxxxx, Xxx Xxxxxx 00000; CHIRON CORPORATION ("CHIRON"), a
Delaware corporation having offices at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxx 00000; and XXXXXX LABORATORIES ("ABBOTT"), an Illinois corporation
with offices at Xxx Xxxxxx Xxxx Xxxx, Xxxxxx Xxxx, Xxxxxxxx 00000.
WITNESSETH
WHEREAS, CHIRON has identified a nucleic acid sequence included within the
genome of a viral species causative of hepatitis C, formerly called hepatitis
Non-A, Non-B; and
WHEREAS, ODS has licensed from CHIRON proprietary technologies directed to
hepatitis C diagnosis and blood screening; and
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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[** This exhibit was filed in connection with Registrant's request for
confidential treatment for Exhibit 10.15 to the Registrant's Form 10-Q
report for the period ended June 10, 1994 and a consequent order by
the Commission dated November 30, 1994.]
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WHEREAS, ODS owns or controls additional proprietary technologies directed
to hepatitis C diagnosis and blood screening; and
WHEREAS, ODS and CHIRON have an ongoing research program to develop
additional technologies directed to hepatitis C diagnosis and body fluid
screening; and
WHEREAS, ABBOTT desires to enter the hepatitis C diagnosis and blood
screening markets as soon as possible, and believes that such early entry will
be of significant long-term value to ABBOTT; and
WHEREAS, ABBOTT believes that obtaining access to the above CHIRON
technologies and to the above ODS technologies will permit ABBOTT to enter the
hepatitis C diagnosis and blood screening market at an early date; and
WHEREAS, CHIRON possesses proprietary manufacturing know-how related to raw
materials for hepatitis C diagnosis and blood screening; and
WHEREAS, ABBOTT desires a long-term supply agreement with CHIRON and ODS
wherein ABBOTT purchases from CHIRON such raw materials and, under certain
circumstances as are more fully described herein, gains access to CHIRON's
proprietary manufacturing technology;
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WHEREAS, ABBOTT is conducting and may continue conducting research, both
independently and with collaborators, directed to hepatitis C diagnosis and
blood screening; and
WHEREAS, ODS and CHIRON are interested in obtaining access to XXXXXX'x
hepatitis C research, both existing and future;
NOW, THEREFORE, in consideration of the premises and the mutual promises
and covenants set forth below, ODS, CHIRON and ABBOTT mutually agree as follows:
I. DEFINITIONS
As used herein the following words and phrases shall have the following
respective meanings:
1.1 "Abbott Collaborator" means any third party obligated, under the terms
of an agreement entered into pursuant to Paragraph 20.1 below, during the first
seventeen (17) years after the effective date of this Agreement to xxxxx XXXXXX
the right to make, use, or sell Antigens or Antibodies.
1.2 "Abbott Collaborator Unpatented Technology" means unpatented
inventions, discoveries, trade secrets, information, experience, data, formulas,
procedures and results, and
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improvements used directly in connection with the development, manufacture, or
use of Antigens or Antibodies and owned or controlled by an Abbott Collaborator
during the first seventeen (17) years after the effective date of this Agreement
and licensed to ABBOTT with the right to sublicense.
1.3 "Abbott Know-How" means all inventions, discoveries, trade secrets,
information, experience, data, formulas, procedures and results, and
improvements, including all patents and patent applications, owned by ABBOTT
during the first seventeen (17) years after the effective date of this
Agreement, and all patents owned or controlled by an Abbott Collaborator during
the first seventeen (17) years after the effective date of this Agreement and
licensed to ABBOTT, with the right to sublicense, and used directly in
connection with the development, manufacture, or use of Antigens or Antibodies.
For the avoidance of doubt, Abbott Know-How does not include preclinical or
clinical data, assay formats or methods of labeling an Antigen or Antibody with
a detectable marker.
1.4 "Abbott Patent Right" means that portion of Abbott Know-How which : 1)
is a Valid Claim defining an Antigen or Antibody; and 2) is licensed to ABBOTT
by an Abbott Collaborator or assigned to ABBOTT; provided, however, that no
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Valid Claim shall be deemed to be an Abbott Patent Right *
1.5 "Abbott Selling Price", with respect to a Calendar Quarter, means the
total revenue in U.S. dollars, determined by an independent auditor, chosen in
accordance with Article V, at XXXXXX'x expense, invoiced to End Users for the
Affected Product in the Affected Market during the previous two (2) consecutive
Calendar Quarters, divided by the number of Units of Product of such Affected
Product invoiced to such End Users in the Affected Market during such previous
two (2) consecutive Calendar Quarters.
1.6 "Acceptance Criteria" means certain physical and/or biological
characteristics of a Raw Material.
1.7 "Act" means the Federal Food, Drug and Cosmetic Act, as amended, and
regulations promulgated thereunder.
1.8 "Affected Market", with respect to Paragraph 5.2 of this Agreement
means Donor Centers in the Affected Territory, and with respect to Paragraph 5.3
of this Agreement means Plasma Centers in the Affected Territory.
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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1.9 "Affected Product" has the meaning given to it in Paragraphs 5.2 and
5.3 of this Agreement.
1.10 "Affected Territory" has the meaning given to it in Paragraphs 5.2 and
5.3 of this Agreement.
1.11 "Affiliate", with respect to a party hereto, means any company owned
or controlled by the party or a company owned or controlling the party or a
company in common ownership or control with the party. Any entity controlled
equally by ODS and CHIRON shall be deemed to be an Affiliate of each of them.
1.12 "Aggregate Non-HCV Price Change", with respect to a Calendar Quarter,
means the aggregate sum of the Non-HCV Price Change of each Non-HCV Screening
Test made by or for ABBOTT and sold to End Users in the Affected Market;
provided, however, that in no event shall the Aggregate Non-HCV Price Change be
less than zero.
1.13 "Antibody" means any antibody, or fragment thereof, or other
anti-ligand immunologically reactive with HCV or a portion of HCV and which is
used to diagnose or screen for hepatitis. The term Antibody shall not include
those specific markers contained in the assays currently marketed by ABBOTT or
being developed by ABBOTT and listed on Exhibit 1.13, attached hereto and
incorporated herein.
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1.14 "Antigen" means any peptide, polypeptide or ligand which reacts
immunologically with antibodies which are immunologically reactive with HCV or a
portion of HCV and which is used to diagnose or screen for hepatitis. The term
Antigen shall not include those specific markers contained in the assays
currently marketed by ABBOTT or being developed by ABBOTT and listed on Exhibit
1.13, attached hereto and incorporated herein.
1.15 "Base Cost" means the average Manufacturing Costs over the fourth year
of this Agreement for each Raw Material which was utilized to manufacture
Primary Product in the last Calendar Quarter of such fourth year.
1.16 "Base Price" means U.S.*
1.17 "Calendar Quarter" means, with respect to Territory I, a three (3)
month period beginning on January 1, April 1, July 1, or October 1, and with
respect to Territories II-VII the periods from December 1 to February 25,
February 26 to May 25, May 26 to August 25 and August 26 to November 30;
provided, however, that if February 25, May 25 or August 25 is a Saturday,
Sunday or legal holiday in the respective Territory, the end of such period
shall be the last workday preceding the 25th of such month.
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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1.18 "Calendar Year" means a full year beginning on January 1.
1.19 "Challenge Cost" for each Raw Material means a) for the first two (2)
years after a challenge, the challenging party's Manufacturing Costs for such
Raw Material as determined by a current good faith estimate of the challenging
party pursuant to Paragraph 3.30; provided, however, that such good faith
estimate must be based on a level of production experience agreed upon by the
parties but in no event shall more than three (3) full scale GMP production runs
of such Raw Material be required and b) after such two (2) year period, the
Manufacturing Party's Current Cost for such Raw Material.
1.20 "Combination Product" means each Product which contains more than one
(1) distinct type of Antigen or Antibody.
1.21 "Comparison Price", with respect to each Affected Product during a
Calendar Quarter, shall mean the sum of (A) the Aggregate Non-HCV Price Change
and (B) the greater of (i) the ABBOTT Selling Price or (ii) the Third Party
Competition Price for the Third Party Product; provided, however, that in no
event shall the Comparison Price exceed U.S. *
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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1.22 "Confirmatory Product", with respect to a Territory, means each
Product utilized by Donor Centers or Plasma Centers to confirm the results of an
assay performed using a Primary Product or a Screening Product. For the
avoidance of doubt, a Confirmatory Product is included within the phrase
Diagnostic Product.
1.23 "Current Cost" for each Raw Material in any Calendar Year means the
Manufacturing Party's Manufacturing Costs for such Raw Material averaged over
the immediately preceding Calendar Year; provided, however, that if the
Manufacturing Party has manufactured less than three (3) full scale GMP
production runs of such Raw Material, the Current Cost shall be estimated by the
Manufacturing Party in good faith.
1.24 "Diagnostic Product", with respect to a Territory, means each Product
which is not a Primary Product or a Screening Product.
1.25 "Donor Center" means any entity or organization whose primary business
purpose is to provide whole human blood or components thereof for administration
to humans. If a Donor Center has its screening performed by a third party, the
term Donor Center shall include such third party with respect to such screening
activities.
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1.26 "End User" means a person or entity whose use of a Product results in
the Product's consumption, destruction, or loss of activity.
1.27 "FDA" means the United States Food and Drug Administration or any
successor entity thereto.
1.28 "Field" means all immunoassay formats other than: a) enzyme
immunoassays performed on a microtitre format (i.e., a solid support having
multiple xxxxx to which immunologically reactive components are immobilized);
and b) radioimmunoassays.
1.29 "Hepatitis C virus" or "HCV", which may be used interchangeably
throughout this Agreement, means any viral isolate, other than isolates within
the viral classes Hepatitis A, Hepatitis B (including Hepatitis B-2) and
Hepatitis delta, including any subtypes of such classes, that:
(a) is included in the viral class established by the International
Committee on the Taxonomy of Viruses, or any body that replaces the
Committee, and termed Hepatitis C (or other name selected by the
Committee), including any subtype of such class, wherein the class
includes an isolate having genomic sequences, cDNA transcripts of
which are disclosed in an "Existing Chiron HCV Patent Application",
which means:
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(i) United States patent application serial no. 122,714 filed 18
November 1987 (hereinafter "USSN 122,714"); or
(ii) a United States patent application filed on or before the
effective date of this Agreement that claims the benefit of
the filing date of USSN 122,714 under Title 00, xxxxxxx 000,
xx xxx Xxxxxx Xxxxxx Code; or
(iii) a non-United States patent application that claims priority
under the Paris Convention from a United States patent
application identified in (i) or (ii) above; or *
(b) (i) is at least * homologous at the amino acid level to an isolate
having genomic sequences that are disclosed in an Existing
Chiron HCV Patent Application determined by a comparison of
the corresponding protein sequences encoded by the entire
available genomes of the isolates with the software available
on the Xxxxxxx protein data base, or if the Xxxxxxx data base
is not available, any scientifically recognized protein
xxxxxxxx xxxx base in the public domain; and
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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(ii) has a genome that contains at least * non-overlapping
sequences of * nucleotides wherein each such non-overlapping
sequence either hybridizes to, or is at least * identical to,
a corresponding sequence of * * nucleotides, or its
complement, which are disclosed in an Existing Chiron HCV
Patent Application; and
(iii) has a genome of the same nucleic acid type (i.e., RNA or DNA)
as an isolate having genomic sequences, cDNA transcripts of
which are disclosed in an Existing Chiron HCV Patent
Application; and
(iv) has an organization of coding domains in its genome similar to
an isolate having genomic sequences, cDNA transcripts of which
are disclosed in an Existing Chiron HCV Patent Application; or
(c) any defective form of an isolate defined by (a) or (b), wherein
"defective" means a deletion of a portion of the genome including
deletions leading to replication defects.
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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This definition is independent of the definition of HCV in any CHIRON patent
application.
1.30 "Know-How" means all inventions, discoveries, trade secrets,
information, experience, data, formulas, procedures and results, and
improvements, including all patents and patent applications, owned or controlled
by CHIRON during the first seventeen (17) years after the effective date of this
Agreement and licensed to ODS, or owned or controlled by ODS or licensed to ODS,
under an agreement entered into with a third party other than pursuant to
Paragraph 2.9, with the right to sublicense, during the first seventeen (17)
years after the effective date of this Agreement and used directly in connection
with the development, manufacture, or use of Antigens or Antibodies. For the
avoidance of doubt, Know-How does not include preclinical or clinical data,
assay formats, or methods of labeling an Antigen or Antibody with a detectable
marker.
1.31 "Manufacturing Costs" means the fully burdened costs to the
Manufacturing Party for producing a Raw Material, expressed as U.S.
dollars/nanogram ($/ng), including all fairly allocable direct (including
standard costs, other manufacturing costs and variances from standard costs) and
indirect (including general and administrative costs associated with
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manufacturing, factory overhead, quality assurance, engineering and
production administration) costs thereof, determined by the Manufacturing
Party in a manner consistent with that which it uses in the ordinary course
of its business for internal accounting purposes.
1.32 "Manufacturing Party" means whichever of ODS, CHIRON, or ABBOTT is
manufacturing a given Raw Material.
1.33 "Net Purchase Price" means the Purchase Price for a Product less any
payment due: a) an Abbott Collaborator which is deducted from the Purchase
Price; or b) a third party pursuant to an agreement entered into in accordance
with Paragraph 2.9 and paid by ODS.
1.34 "Non-HCV Price Change", with respect to a Calendar Quarter, means the
U.S. dollar amount of any increase or decrease between the previous two (2)
consecutive Calendar Quarters in the average price, determined by an independent
auditor, chosen in accordance with Article V, at XXXXXX'x expense, of a Unit of
Non-HCV Screening Test made by or for ABBOTT and invoiced to End Users in the
Affected Market. For the purposes of this Paragraph, the average price of a Unit
of Non-HCV Screening Test shall be calculated by dividing the total revenue, in
U.S. dollars, invoiced to End Users in the Affected Market for the Non-HCV
Screening Test made by or for
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ABBOTT by the number of Units of the Non-HCV Screening Test invoiced to such End
Users in the Affected Market. There shall not be deemed to be any Non-HCV Price
Change for any Non-HCV Screening Test during the first two (2) Calendar Quarters
in which ABBOTT first sells such Non-HCV Screening Test in the Affected Market.
1.35 "Non-HCV Screening Test" means any test kit, other than a Product or
an HCV probe assay licensed from CHIRON, for screening human body fluids or
components thereof to determine if such body fluids or components thereof are
suitable for administration to humans.
1.36 "Patent Protected", with respect to any Product in a specific country,
means that the manufacture, use, or sale of such Product in such country
infringes a Valid Claim in such country.
1.37 "Patent Right" means that portion of Know-How which comprises patents
and all reissues, reexaminations and extensions thereof.
1.38 "Plasma Center" means any entity or organization whose primary
business purpose is to provide human plasma and/or plasma derivatives or body
fluids other than whole human blood. If a Plasma Center has its screening
performed by a third party, the term Plasma Center shall include such third
party with respect to such screening activities.
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1.39 "Price Differential" means two thirds of the difference between (A)
the Base Price and (B) the Comparison Price.
1.40 "Primary Product", with respect to a Territory, means all Products
included within the Product Category that has the highest volume of Units of
Product Shipped in such Territory.
1.41 "Priority Date" means the filing date of the U.S. patent application
with the earliest filing date, the benefit of which a Valid Claim is entitled
under 35 U.S.C. Paragraph 120.
1.42 "Product" means each immunoassay, immunoassay kit or immunoassay test
configuration, the manufacture, use or sale of which utilizes or contains one or
more Antigens or Antibodies.
1.43 "Product Category" means that grouping of Products which utilize or
contain the same number and immunologically distinct types of Antigens or
Antibodies, excluding Confirmatory Products.
1.44 "Product Requirement" means the estimated quantities agreed upon by
the parties of Raw Materials expected reasonably to be required in an efficient
commercial manufacturing and finishing process to produce each Unit of Product
in its final optimized formulation expressed as nanograms/Unit of Product.
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1.45 "Purchase Price" means the amount of money, calculated pursuant to
Paragraphs 3.2-3.22 below, payable by ABBOTT to ODS for each Unit of Product
Shipped.
1.46 "Purchase Price Material" means the amount of the Raw Material
utilized to manufacture a Unit of Product, expressed as nanograms per Unit of
Product (ng/unit of Product), for which ABBOTT is not obligated to pay ODS *
* of CHIRON's or ODS's Manufacturing Costs in accordance with Paragraph 3.25.
1.47 "Raw Material" means a composition of matter which contains one (1)
distinct type of Antigen or Antibody.
1.48 "Receiving Party" means whichever of ODS or ABBOTT is being supplied
with a given Raw Material.
1.49 "Release Specifications" means certain physical characteristics of a
Raw Material.
1.50 "Safety Stock Inventory" means an inventory of Raw Material maintained
by a Manufacturing Party in accordance with Paragraph 4.5.
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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1.51 "Screening Product", with respect to a Territory, means each
Product Shipped to a Donor Center or a Plasma Center in such Territory which is
not a Primary Product or a Confirmatory Product.
1.52 "Ship", "Shipped" or "Shipment" means the delivery of any Unit of
Product or Unit of Non-HCV Screening Test by ABBOTT or its Affiliates to a third
party for any purpose other than for preclinical or clinical trials, except any
Unit of Product for which said third party receives an actual credit for goods
damaged during transit, warranty replacement (excluding expired goods) and
product recalls or any Unit of Product delivered to End Users pursuant to
Paragraphs 2.5. or 2.6. For the purposes of this definition, if ABBOTT or any of
its Affiliates uses a Unit of Product to test a body fluid for a third party,
either for a fee or as a service to a customer for which compensation is
received, directly or indirectly, such Unit of Product shall be deemed Shipped.
1.53 "Territory" means each of the following:
I. the United States, its territories and possessions
II. Canada
III. the Xxxxxxx Xxxxxxxx xx Xxxxxxx
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XX. Xxxxx
V. France
VI. Japan
VII. all countries not accounted for in I-VI above.
1.54 "Third Party Competition Price", with respect to a Calendar
Quarter, means the generally prevailing price, determined by an independent
auditor, chosen in accordance with Article V, at XXXXXX'x expense, employing
actual sales data and/or demonstrably bona fide quotes to End Users in the
Affected Market for a Third Party Product during the previous two (2) Calendar
Quarters.
1.55 "Third Party Patent Right" means a Valid Claim defining an Antigen
or Antibody, and which is owned by or assigned to a third party and is licensed
to ABBOTT and ODS under an agreement entered into pursuant to Paragraph 2.9
below; provided, however, that no Valid Claim shall be deemed to be a Third
Party Patent Right * *
1.56 "Third Party Product" has the meaning given to it in Paragraphs 5.2
and 5.3 of this Agreement.
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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1.57 "Unit" means each of the number of assays that a Product, Third
Party Product, or Non-HCV Screening Test is capable of performing as specified
in the labeling for such Product, Third Party Product or Non-HCV Screening Test.
For the avoidance of doubt, a Product, Third Party Product, or Non-HCV Screening
Test labeled as being capable of performing one hundred (100) assays shall
represent one hundred (100) Units of such Product, Third Party Product, or
Non-HCV Screening Test.
1.58 "Valid Claim" means any claim of an issued and unexpired patent
which neither has been held unenforceable, unpatentable or invalid by a decision
of a court or governmental agency of competent jurisdiction, unappealable or
unappealed within the time allowed for appeal, nor has been admitted by the
holder of the patent to be invalid or unenforceable through reissue, disclaimer
or otherwise.
1.59 Within this Agreement, the terms "immunoassay", "immunologically"
and the like refer to both antigen/immunoglobulin binding and other
ligand/anti-ligand binding phenomena, excluding nucleic acid hybridization.
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II. GRANT OF RIGHTS
2.1 Subject to the terms and conditions of this Agreement, ODS
grants to ABBOTT and its Affiliates a non-exclusive worldwide license,
without the right to sublicense others, under Know-How:
(a) to make, have made, use and sell Products only within the Field;
(b) to make, but not have made, and use Antigens and Antibodies for
research purposes only limited to the development of Products
within the Field and for regulatory purposes as provided for
herein; and
(c) in the event ABBOTT obtains manufacturing rights for an Antigen
or Antibody pursuant to Article IV hereof, to make, but not
have made, such Antigen or Antibody.
2.2
(a) Any license granted to a third party by ODS to make, use and
sell Product shall license such third party to deliver Product
to other third parties for purposes other than preclinical and
clinical trials in
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accordance with Exhibit 2.2, attached hereto and incorporated
herein, only after the expiry of * * from the effective date
of this Agreement, unless ABBOTT Ships less than * Units of
Product worldwide during the first * month period following
the earlier date of:
(i) XXXXXX'x being granted a product license for any Product
from the FDA; or
(ii) * or unless ABBOTT Ships less than * Units of Product
worldwide during the second * * month period following
the earlier of (a) or (b) above. If at the end of each
such * month period ABBOTT has failed to Ship at least the
respective quantities of Units of Product above, then ODS
may grant any third party the right to sell Product at any
time thereafter.
(b) Within the first * after the effective date of this Agreement,
ODS will not market Products through a distributor of the kind
that is primarily engaged in the development and/or manufacture
and sale of diagnostic products, as exemplified by the current
activities of
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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*
2.3 Subject to the terms and conditions of this Agreement, ABBOTT
hereby grants to ODS, CHIRON and their respective Affiliates a worldwide,
non-exclusive license, without the right to sublicense, under Abbott Know-How
to make, have made, use and sell Products, including the right to make and
have made Antigens and Antibodies. Such license shall be royalty-free for
Abbott Know-How owned by ABBOTT and royalty-bearing for Abbott Know-How owned
or controlled by an Abbott Collaborator, with the proviso that any such
royalty which ODS, CHIRON and their respective Affiliates shall be obligated
to pay an Abbott Collaborator shall not exceed the royalty which ABBOTT shall
be obligated to pay the Abbott Collaborator under its license agreement with
the Abbott Collaborator.
2.4 XXXXXX'x license to Ship Product in Europe is effective
beginning July 1, 1990. XXXXXX'x license to Ship Product outside Europe is
effective beginning either upon the date of XXXXXX'x being granted a product
license from the FDA for any Product or upon January 1, 1990, whichever
happens first.
* = Confidential portions of material have been omitted and file separately with
the Securities and Exchange Commission.
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2.5 For the sole purposes of testing, demonstrating or evaluating
non-Diagnostic Products, i.e., Products which are not Diagnostic Products,
ABBOTT may deliver up to * * Units of each non-Diagnostic Product to End
Users without such Units being considered Shipped according to the following:
* in the first year after XXXXXX'x first Shipment of such non-
Diagnostic Product;
* in the second year after XXXXXX'x first Shipment of
such non-Diagnostic Product;
* in the third year after XXXXXX'x first Shipment of such non-
Diagnostic Product;
provided, however, that: a) no more than fifty percent (50%) of such delivered
Units of non-Diagnostic Product in any year shall be delivered to End Users in
any single Territory; and b) no such non-Diagnostic Product may be delivered to
End Users in Europe prior to July 1, 1990 or to End Users outside Europe prior
to either XXXXXX'x being granted a product license from the FDA for any Product
or upon January 1, 1990, whichever happens first; and c) such delivered Units of
non-Diagnostic Product are delivered to such End Users free of charge. For the
purposes of this Paragraph 2.5, a non-Diagnostic Product will be construed to be
distinct from another non-Diagnostic
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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Product and hence trigger the availability of another * * Units under this
Paragraph if the Antigen or Antibody employed in such non-Diagnostic Product is
immunologically distinct from the Antigen or Antibody employed in such another
non-Diagnostic Product.
2.6
(a) For the sole purposes of testing, demonstrating or evaluating
Confirmatory Products, ABBOTT may deliver up to * Units of
each Confirmatory Product to End Users without such Units being
considered Shipped provided that such Units of Confirmatory
Product are delivered to such End Users free of charge.
(b) For the sole purposes of testing, demonstrating or evaluating
Diagnostic Products, excluding Confirmatory Products, ABBOTT may
deliver up to * * Units of each Diagnostic Product to End Users
without such Units being considered Shipped according to the
following:
* in the first year after XXXXXX'x first Shipment of such
Diagnostic product;
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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* in the second year after XXXXXX'x first Shipment of such
Diagnostic product;
* in the third year after XXXXXX'x first Shipment of such
Diagnostic product;
provided, however, that: i) no more than fifty percent (50%) of
such delivered Units of Diagnostic Product in any year shall be
delivered to End Users in any single Territory; ii) no such
Diagnostic Product may be delivered to End Users in Europe prior to
July 1, 1990 or to End Users outside Europe prior to either
XXXXXX'x being granted a product license from the FDA for any
Product or upon January 1, 1990, whichever happens first; and iii)
such delivered Units of Diagnostic Product are delivered to such
End Users free of charge.
(c) For the purposes of this Paragraph 2.6, a Confirmatory Product or
Diagnostic Product will be construed to be distinct from another
Confirmatory Product or Diagnostic Product and hence trigger the
availability of another * or *
* Units under this Paragraph if the Antigen or Antibody employed
in such Diagnostic Product is immunologically distinct from the
Antigen or Antibody employed in such another Confirmatory Product
or Diagnostic Product.
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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2.7 XXXXXX'x license to deliver Product containing CHIRON's Antigen
designated C100-3 in European patent application publication no. 0 318 216 for
clinical trials is effective immediately and is limited to the number of Units
of Product as stated in Exhibit 2.2.
2.8
(a) If at any time during the term hereof:
(i) ODS grants to a third party a license or any immunity from
suit under Know-How allowing such third party to make, use
or sell Product, by way of a direct license or settlement of
litigation or a compulsory license or any other license
grant; or
(ii) a third party obtains an express or implied license under
Know-How, to make, use or sell Product, by the purchase of a
Raw Material not incorporated into a finished Product at the
time of such purchase, and such third party is not subject
to a contractual obligation with CHIRON not to make, use or
sell Product;
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then ODS or CHIRON will notify XXXXXX and provide XXXXXX with
a summary of the terms of any such license or immunity from
suit. If XXXXXX deems the effect of any such license or
immunity from suit, when all the terms and conditions thereof
are taken together, to be financially more favorable than
those available to XXXXXX under this Agreement, XXXXXX may
elect, by written notice to ODS, to amend this Agreement, if
such implied license is not terminated or otherwise
substantially abated or proceedings initiated and diligently
pursued to cause such termination or abatement within ninety
(90) days of receipt by ODS or CHIRON of such written notice
from XXXXXX of XXXXXX'x intent to amend this Agreement, to
give effect to all such terms and conditions so that the
terms of such agreement taken together are not substantially
more or less favorable than the terms of this Agreement as so
amended. In any proceedings initiated by CHIRON to xxxxx any
such implied license, CHIRON shall use reasonable efforts to
recover any damages incurred by XXXXXX in connection with
such implied license, and shall, upon receipt of any such
recovery, pay to XXXXXX the amount, if any, by which such
recovery exceeds that portion of CHIRON's reasonable costs
and expenses (including reasonable attorney's fees)
-29-
incurred in connection with such proceeding which is fairly
allocable to such recovery. Any amendment of this Agreement
pursuant to this Paragraph 2.8 (a) shall terminate, and this
Agreement shall be further amended to read in full as if such
amendment had not been made, if and when any such express or
implied license is terminated or otherwise abated.
(b) It is the intention of the parties that XXXXXX receive most
favored licensee status and treatment under this Agreement.
The parties recognize that commercial arrangements other than
a license may be to the advantage of ODS, such as
distributorship appointments. Accordingly, nothing herein
shall preclude ODS from marketing Products in the normal
course of business through distributors except as provided in
Paragraph 2.2(b) above; provided, however, that if ODS
appoints a distributor of the kind that is primarily engaged
in the development and/or manufacture and sale of diagnostic
products, ODS will notify XXXXXX and provide XXXXXX with a
summary of the terms of any such appointment. If XXXXXX deems
the effect of any such appointment, when all the terms and
conditions thereof are taken together, to be financially more
favorable than those available to
-30-
XXXXXX under this Agreement, XXXXXX may elect, by written
notice to ODS, to amend this Agreement to give effect to all
such terms and conditions so that the terms of such agreement
taken together are not substantially more or less favorable
than the terms of this Agreement as so amended.
For the avoidance of doubt, the kind of distributor giving rise to the most
favored licensee status and treatment provisions of this Paragraph 2.8 are
exemplified by the current activities of *
The kind of distributors not giving rise to such most favored licensee status
are exemplified by the current activities of *
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
-31-
2.9 If either ODS or XXXXXX identifies an HCV technology owned or
controlled by a third party, such party shall disclose its knowledge of the
existence of such HCV technology to the other. If ODS decides to seek a license
from the third party to the HCV technology, ODS shall negotiate with such third
party in an attempt to obtain such a license, which license shall extend to the
benefit of XXXXXX at the same terms and conditions if so requested by XXXXXX.
In the event ODS decides not to seek such a license or is unsuccessful in
obtaining such a license, only then shall XXXXXX be entitled to attempt to seek
such a license for itself and, if ODS so requests, for the benefit of ODS at the
same terms and conditions. ODS or XXXXXX shall, if requested by the other party,
use all reasonable efforts to obtain such rights for the other parties. In no
event shall any party obtain rights for the other parties under terms and
conditions different from those terms obtained for itself unless expressly
agreed to by the parties.
III. PAYMENTS
3.1 The Purchase Price for each Unit of Product shall be calculated in
accordance with the following paragraphs.
-32-
3.2
(a) Except as set forth in this Agreement and except as modified by
Articles V and VI of this Agreement, the Purchase Price, with
respect to all Primary Products Shipped during each Calendar
Quarter, shall be as follows:
(i) U.S. * for each of the first * million Units of Product
of all Primary Products Shipped per Calendar Year;
(ii) U.S. * for each of the next * million Units of Product
of all Primary Products Shipped per Calendar Year; and
(iii) U.S. * for each Unit of Product in excess of the first *
million Units of Product of all Primary Products Shipped per
Calendar Year.
3.3 Except as set forth in Paragraph 3.5, if the Primary Product is
Patent Protected by a Patent Right and is also Patent Protected by an XXXXXX
Patent Right, the Purchase Price shall continue to be calculated pursuant to
Paragraph 3.2 of this Agreement.
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
-33-
3.4 Except as set forth in Paragraph 3.5, the Purchase Price for a
Primary Product that is Patent Protected by a Patent Right and is also Patent
Protected by a Third Party Patent Right shall be the higher of either (i) the
Purchase Price calculated pursuant to Paragraph 3.2, or (ii) any payment due
under an agreement, entered into pursuant to Paragraph 2.9 above, licensing such
Third Party Patent Right. XXXXXX shall pay the Purchase Price determined
according to this Paragraph 3.4 to ODS and ODS shall make any payments required
under the agreement licensing such Third Party Patent Right.
3.5 The Purchase Price for a Primary Product that is Patent Protected
by a Patent Right, an XXXXXX Patent Right and a Third Party Patent Right shall
be the higher of either (i) the Purchase Price calculated pursuant to Paragraph
3.2, or (ii) any payment due under an agreement, entered into pursuant to
Paragraph 2.9 above, licensing such Third Party Patent Right. XXXXXX shall pay
the Purchase Price determined according to this Paragraph 3.5 to ODS and ODS
shall make any payments required under the agreement licensing such Third Party
Patent Right.
3.6 Except as set forth in Paragraph 3.8, if the Primary Product is not
Patent Protected by a Patent Right and is Patent Protected by an XXXXXX Patent
Right, the Purchase Price shall
-34-
continue to be calculated pursuant to Paragraph 3.2 of this Agreement except
that XXXXXX shall be entitled to deduct therefrom any payments, with respect to
the Shipment of the Unit of Product, that XXXXXX shall be required to make to
any Xxxxxx Collaborator under an agreement licensing such XXXXXX Patent Right up
to the full amount of the Purchase Price for such Primary Product.
3.7 Except as set forth in Paragraph 3.8, the Purchase Price for a
Primary Product that is not Patent Protected by a Patent Right and is Patent
Protected by a Third Party Patent Right shall be the higher of either (i) the
Purchase Price calculated pursuant to Paragraph 3.2, or (ii) any payment due
under an agreement, entered into pursuant to Paragraph 2.9 above, licensing such
Third Party Patent Right. XXXXXX shall pay the Purchase Price determined
according to this Paragraph 3.7 to ODS and ODS shall make any payments required
under the agreement licensing such Third Party Patent Right.
3.8 The Purchase Price for a Primary Product that is not Patent
Protected by a Patent Right and is Patent Protected by an XXXXXX Patent Right
and a Third Party Patent Right shall be the higher of either (i) the Purchase
Price calculated pursuant to Paragraph 3.2, or (ii) the sum of any payment due
under an agreement, entered into pursuant to Paragraph 2.9 above,
-35-
licensing such Third Party Patent Right and any payment, with respect to the
Shipment of the Unit of Product, that XXXXXX shall be required to make to an
Xxxxxx Collaborator under an agreement licensing such XXXXXX Patent Right;
provided, however that XXXXXX shall be entitled to deduct from such Purchase
Price determined according to (i) or (ii) above any payments, with respect to
the Shipment of the Unit of Product, that XXXXXX shall be required to make to
any Xxxxxx Collaborator under an agreement licensing such XXXXXX Patent Right.
XXXXXX shall pay the Purchase Price determined according to this Paragraph 3.8
to ODS and ODS shall make any payment required under the agreement licensing
such Third Party Patent Right.
3.9 Except as set forth in this Agreement and except as modified by
Articles V and VI of this Agreement, the Purchase Price, with respect to each
Screening Products Shipped to a given Territory during each Calendar Quarter,
shall be negotiated by the parties in good faith but in any event shall not be
less than U.S. * or more than U.S. * per Unit of Product. In the event that
the parties are unable to agree upon a mutually acceptable Purchase Price, the
Purchase Price for such Screening Product shall be U.S. * The Purchase Price
for Screening Products under this Paragraph 3.9 is not subject to the provisions
of Article XVIII.
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
-36-
3.10 Except as set forth in Paragraph 3.12, if the Screening Product is
Patent Protected by a Patent Right and is also Patent Protected by an XXXXXX
Patent Right, the Purchase Price shall be as follows:
(i) U.S. * for each of the first * million Units of Product
of all Screening Products Patent Protected by both a Patent
Right and an XXXXXX Patent Right and Shipped per Calendar
Year;
(ii) U.S. * for each of the next * million Units of Product
of all Screening Products Patent Protected by both a Patent
Right and an XXXXXX Patent Right and Shipped per Calendar
Year; and
(iii) U.S. * for each Unit of Product in excess of the first
* million Units of Product of all Screening Products Patent
Protected by both a Patent Right and an XXXXXX Patent Right
and Shipped per Calendar Year.
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
-37-
3.11 Except as set forth in Paragraph 3.12, the Purchase Price for a
Screening Product that is Patent Protected by a Patent Right and is also Patent
Protected by a Third Party Patent Right shall be the higher of either (i) the
Purchase Price calculated pursuant to Paragraph 3.9, or (ii) any payment due
under an agreement, entered into pursuant to Paragraph 2.9 above, licensing such
Third Party Patent Right. XXXXXX shall pay the Purchase Price determined
according to this Paragraph 3.11 to ODS and ODS shall make any payments required
under the agreement licensing such Third Party Patent Right.
3.12 The Purchase Price for a Screening Product that is Patent Protected
by a Patent Right, an XXXXXX Patent Right and a Third Party Patent Right shall
be the higher of either (i) the Purchase Price calculated pursuant to Paragraph
3.10, or (ii) any payment due under an agreement, entered into pursuant to
Paragraph 2.9 above, licensing such Third Party Patent Right. XXXXXX shall pay
the Purchase Price determined according to this Paragraph 3.12 to ODS and ODS
shall make any payments required under the agreement licensing such Third Party
Patent Right.
3.13 Except as set forth in Paragraph 3.15, if the Screening Product is
not Patent Protected by a Patent Right and is Patent Protected by an XXXXXX
Patent Right, the Purchase Price shall be determined as follows:
-38-
(a) U.S. * per Unit of Product Shipped during the first five (5)
years from the date of this Agreement; and
(b) U.S. * for each Unit of Product Shipped during the remaining term
of this Agreement.
3.14 Except as set forth in Paragraph 3.15, if the Screening Product is
not Patent Protected by a Patent Right and is Patent Protected by a Third Party
Patent Right, XXXXXX shall be responsible for all payments due under an
agreement, entered into pursuant to Paragraph 2.9 above, licensing such Third
Party Patent Right by virtue of XXXXXX'x exercising its rights under such
agreement. The Purchase Price for such Screening Product shall be U.S. *
3.15 If the Screening Product is not Patent Protected by a Patent Right
and is Patent Protected by an XXXXXX Patent Right and a Third Party Patent
Right, XXXXXX shall be responsible for all payments due under an agreement,
entered into pursuant to Paragraph 2.9 above, licensing such Third Party Patent
Right by virtue of XXXXXX'x exercising its rights under such agreement. The
Purchase Price for such Screening Product shall be U.S. *
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
-39-
3.16 Except as set forth in this Agreement and except as modified by
Articles V and VI of this Agreement, the Purchase Price, with respect to
Diagnostic Products Shipped in a given Territory during each Calendar Quarter,
shall be negotiated by the parties in good faith but in any event shall not be
less than U.S. * or more than U.S. * per Unit of Product. In the event the
parties are unable to agree upon a mutually acceptable Purchase Price, the
Purchase Price for such Diagnostic Product shall be U.S. * The Purchase Price
for Diagnostic Products under this Paragraph 3.16 is not subject to the
provisions of Article XVIII.
3.17 Except as set forth in Paragraph 3.19, if the Diagnostic Product is
Patent Protected by a Patent Right and is also Patent Protected by an XXXXXX
Patent Right, the Purchase Price shall be U.S. * per Unit of Product.
3.18 Except as set forth in Paragraph 3.19, the Purchase Price for a
Diagnostic Product that is Patent Protected by a Patent Right and is also Patent
Protected by a Third Party Patent Right shall be the higher of either (i) the
Purchase Price calculated pursuant to Paragraph 3.16, or (ii) any payment due
under an agreement, entered into pursuant to Paragraph 2.9 above, licensing such
Third Party Patent Right. XXXXXX shall pay the Purchase Price determined
according to
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
-40-
this Paragraph 3.18 to ODS and ODS shall make any payments required under the
agreement licensing such Third Party Patent Right.
3.19 The Purchase Price for a Diagnostic Product that is Patent
Protected by a Patent Right, an XXXXXX Patent Right and a Third Party Patent
Right shall be the higher of either (i) the Purchase Price calculated Pursuant
to Paragraph 3.17, or (ii) any payment due under an agreement, entered into
pursuant to Paragraph 2.9 above, licensing such Third Party Patent Right. XXXXXX
shall pay the Purchase Price determined according to this Paragraph 3.19 to ODS
and ODS shall make any payments required under the agreement licensing such
Third Party Patent Right.
3.20 Except as set forth in Paragraph 3.22, if the Diagnostic Product is
not Patent Protected by a Patent Right and is Patent Protected by an XXXXXX
Patent Right, the Purchase Price shall be determined as follows:
(i) U.S. * per Unit of Product Shipped during the first five (5)
years after the date of this Agreement; and
(ii) U.S. * per Unit of Product Shipped during the remaining term of
this Agreement.
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
-41-
3.21 Except as set forth in Paragraph 3.22, if the Diagnostic Product is
not Patent Protected by a Patent Right and is Patent Protected by a Third Party
Patent Right, XXXXXX shall be solely responsible for all payments due under an
agreement, entered into pursuant to Paragraph 2.9 above, licensing such Third
Party Patent Right by virtue of XXXXXX'x exercising its rights under such
agreement. The Purchase Price for such Diagnostic Product shall be U.S. *
3.22 If the Diagnostic Product is not Patent Protected by a Patent
Right and is Patent Protected by an XXXXXX Patent Right and a Third Party
Patent Right, XXXXXX shall be solely responsible for all payments due under
an agreement, entered into pursuant to Paragraph 2.9 above, licensing such
Third Party Patent Right by virtue of XXXXXX'x exercising its rights under
such agreement. The Purchase Price for such Diagnostic Product shall be U.S. *
3.23 With respect to Territory VII, the Purchase Price for each Product
Shipped therein shall be calculated according to Paragraphs 3.2-3.22, with the
proviso that for the purposes of determining whether a Product is Patent
Protected by a Patent Right, an Xxxxxx Patent Right or a Third Party Patent
Right, the Product will be deemed to have been made, used or sold in Territory
I.
-42-
3.24 The Purchase Price for a Combination Product shall be calculated
according to Paragraphs 3.2-3.22 and XXXXXX shall pay ODS for Raw Materials
included in the Combination Product according to Paragraph 3.35.
3.25
(a) At the end of each Calendar Quarter, XXXXXX shall prepare a
reconciliation of the material balance for each Raw Material as
follows:
A B C D E F
Prior Quarters + Raw Material = Raw Material** + Raw Material** + Raw Material** + Raw Material
balance forward delivered to incorporated in inventory otherwise obtained
of Raw Material XXXXXX into Product a) Raw Material used include- pursuant to
in inventory as Shipped in stock ing at least Paragraph
set forth in b) Products in research & 3.35 for
Column D in the process development, Combination
material balance c) finished quality Products
from the previous Products assurance
Calendar Quarter [(a),(b)&(c) and quality
to be indivi- control,
dually yield loss,
identified and wastage
and listed.]
* All amounts of Raw Materials shall be stated in nanograms.
** Other than Raw Material obtained pursuant to Paragraph 3.35 for
Combination Products
-44-
(b) At the end of each Calendar Quarter XXXXXX shall pay to ODS:
(i) the Purchase Price for each Unit of Product Shipped by
XXXXXX during such Calendar Quarter, modified if necessary
by Paragraph 3.34, 5.4 or 6.1; plus
(ii) * of CHIRON's or ODS's Manufacturing Cost for all Raw
Material in Column E of Paragraph 3.25(a) above; plus
(iii) * of CHIRON's or ODS's Manufacturing Cost for the
aggregate amount of C100-3 supplied by ODS or CHIRON that is
utilized by XXXXXX to manufacture Product during such
Calendar Quarter in excess of * * per Unit of Product; plus
(iv) * of CHIRON's or ODS's Manufacturing Cost for the
aggegate amount of each Raw Material other than C100-3
supplied by CHIRON or ODS that is utilized by XXXXXX to
manufacture Product during such Calendar Quarter in excess
of the lower of (a) the greater of *
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
-45-
* per Unit of Product or ODS's Product Requirement, if
any, for a Product utilizing such Raw Material or (b)
XXXXXX'x Product Requirement for the Product utilizing such
Raw Material; plus
(v) any incremental increase according to Paragraph 3.30; plus
(vi) * of CHIRON's or ODS's Manufacturing Cost for all Raw
Material included in Combination Products for which a
payment is due according to Paragraph 3.35.
From such payment, XXXXXX shall be entitled to deduct a credit for:
(i) any payments made by XXXXXX to CHIRON or ODS pursuant to
Paragraph 3.27 during such Calendar Quarter; plus
(ii) any incremental reduction according to Paragraphs 3.30,
3.32 and 3.33; plus
(iii) yield loss calculated as follows:
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
-46-
Yield Loss Credit = ( * x total nanograms x ( * of CHIRON's
of each Raw or ODS's Manufac-
Material supplied turing Cost for
to XXXXXX by CHIRON such Raw Material)
or ODS during such
Calendar Quarter)
3.26 All payments to be made to ODS by XXXXXX under this Agreement shall
be made in United States Dollars within sixty (60) days after the end of each
Calendar Quarter.
3.27 Within thirty (30) days after delivery of Raw Material to XXXXXX by
CHIRON, XXXXXX shall advance to CHIRON * (U.S. * ) per milligram or, upon
CHIRON's written notice to XXXXXX, CHIRON's Manufacturing Cost plus *
percent (* %), for Raw Material so delivered. All monies paid pursuant to
this Paragraph 3.27 shall be creditable against all payments due ODS
hereunder.
3.28 XXXXXX shall keep accurate books and records of sales and Shipments
of Products and of all payments due ODS and/or CHIRON hereunder. After the
first Unit of Product is Shipped, XXXXXX shall deliver to ODS in accordance
with Article XVI written reports of sales and Shipments of Products
categorized according to Paragraphs 3.2-3.22 during the preceding Calendar
Quarter on or before the 60th day following the end of each Calendar Quarter.
Such report shall include all information required to calculate all monies
due, including but not limited
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
-47-
to for each Territory, by individual Product: Purchase Price due, Units Shipped,
Units Shipped excluded from Purchase Price, adjustments to Units Shipped
(returns, etc.), credit for payments made under Paragraph 3.27, and a total
material balance for all Raw Materials received, by Raw Material according to
Section 3.25(a). Such report shall be accompanied by payment of all monies due
hereunder.
3.29
(a) With respect to a Raw Material, each Receiving Party shall have
the right, at its own expense, during each Calendar Quarter when
Manufacturing Costs are charged by the Manufacturing Party and
for three (3) years thereafter, to have an independent public
accountant, to whom the Manufacturing Party has no reasonable
objection, examine the relevant books and records of account of
the Manufacturing Party upon reasonable notice during reasonable
business hours and not more than once per Calendar Year, to
confirm that appropriate Manufacturing Costs have been charged by
the Manufacturing Party. Such independent public accountant shall
report to the Receiving Party only upon the correctness of the
calculations with respect to the Manufacturing Party's books and
records and
-48-
shall not disclose the details of the records examined. The
Receiving Party shall provide a copy of such report to the
Manufacturing Party.
(b) ODS and CHIRON shall have the right, at their own expense, for
each Calendar Quarter during which Purchase Price payments are
due to ODS and for three (3) years thereafter, to have an
independent public accountant, to whom XXXXXX has no reasonable
objection, examine the relevant books and records of account of
XXXXXX upon reasonable notice during reasonable business hours
and not more than once during each Calendar Year, to confirm that
appropriate Purchase Price payments have been made by XXXXXX
hereunder or to confirm any other representation made by XXXXXX
which is pertinent to the rights of ODS or CHIRON hereunder. Such
independent public accountant shall report to ODS or CHIRON or
both, as the case may be, only upon the correctness of the
calculations with respect to XXXXXX'x books and records and shall
not disclose the details of the records examined. ODS or CHIRON
shall provide a copy of such report to XXXXXX.
-49-
(c) With respect to each Calendar Quarter and for three (3) years
thereafter, XXXXXX shall have the right, at its own expense, to
have an independent public accountant, to which neither ODS nor
CHIRON has a reasonable objection, examine the relevant books and
records of account of ODS and/or CHIRON upon reasonable notice
during reasonable business hours and not more than once during
each Calendar Year, to confirm any representation made by ODS
and/or CHIRON which is pertinent to the rights of XXXXXX
hereunder. Such independent public accountant shall report to
XXXXXX only upon the correctness of the calculations with respect
to ODS' and CHIRON's books and shall not disclose the details of
the records examined. XXXXXX shall provide a copy of such report
to ODS and CHIRON.
3.30
(a) CHIRON shall within sixty (60) days following the fourth
anniversary date of this Agreement, notify XXXXXX in writing of
the Base Cost. Within sixty (60) days following the fourth annual
anniversary date of this Agreement and every succeeding
anniversary date thereafter, each Manufacturing Party shall
notify the other parties in writing of the Current Cost for each
Raw Material manufactured by such Manufacturing Party.
-50-
(b) If at any time ODS or CHIRON is the Manufacturing Party for a
given Raw Material and the Current Cost for such Raw Material
exceeds the Base Cost by at least * , XXXXXX shall pay to ODS, in
addition to the Calendar Quarter payments due in accordance with
Paragraph 3.28, (i) an increment for the Purchase Price Material
of each Product containing such Raw Material equal to the number
of Units of such Product Shipped in such Calendar Quarter
multiplied by the Purchase Price Material of such Product
further multiplied by * the difference between the Current Cost
and the Base Cost, plus (ii) a further increment for the Purchase
Price Material of such Product equal to the number of Units of
such Product Shipped in such Calendar Quarter multiplied by the
Purchase Price Material of such Product further multiplied by the
amount, if any, by which the sum of the Base Cost plus * the
difference between the Current Cost and the Base Cost exceeds *
* of the Net Purchase Price for such Product.
(c) If at any time ODS or CHIRON is the Manufacturing Party for a
given Raw Material and the Current Cost for such Raw Material is
less than the Base Cost by at least * , XXXXXX'x Calendar Quarter
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
-51-
payment due in accordance with Paragraph 3.28 shall be reduced by an
increment for the Purchase Price Material of each Product containing such
Raw Material equal to the number of Units of such Product Shipped in such
Calendar Quarter multiplied by the Purchase Price Material of such Product
further multiplied by * the difference between the Base Cost and the
Current Cost.
(d) (i) If at any time a party (the "Challenger") who is not the
Manufacturing Party for a given Raw Material wishes to
manufacture such Raw Material and the Challenge Cost for such
Raw Material is less than the Current Cost by at least * ,
the Challenger shall have the right to challenge the Current
Cost by notifying the Manufacturing Party of such Raw Material
in writing of the Challenge Cost within ninety (90) days after
notification by the Manufacturing Party of the Current Cost;
provided, however, that no cost challenge with respect to a
given Raw Material may occur until after the expiration of two
(2) years from the last cost challenge with respect to such
Raw Material. The Manufacturing Party may then
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
-52-
elect, by written notice within thirty (30) days after such
notification of the Challenge Cost, either to continue to supply
such Raw Material or to permit the Challenger to manufacture
such Raw Material. If the Manufacturing Party elects to
discontinue manufacturing, the Challenger shall become the
Manufacturing Party for such Raw Material upon the later of
six (6) months after such election or upon the date the
Challenger receives an establishment license, if required, from
the FDA. If the Manufacturing Party elects to continue
manufacturing, the Manufacturing Party shall pay the
Challenger's Manufacturing Cost for the production runs that
were agreed upon by the parties to determine the Challenge
Cost. In the event of a bona fide cost challenge made in
accordance with this Paragraph 3.30(d)(i), the Calendar
Quarter payments due in accordance with Paragraph 3.28 shall
be adjusted as follows:
(A) If ODS or CHIRON elects to continue manufacturing such Raw
Material after a cost challenge by XXXXXX or becomes the
-53-
Manufacturing Party for such Raw Material as the result of
a cost challenge and the Challenge Cost is greater than the
Base Cost, XXXXXX shall pay to ODS, in addition to the
Calendar Quarter payments due in accordance with Paragraph
3.28, (i) an increment for the Purchase Price Material of
each Product containing such Raw Material equal to the
number of Units of such Product Shipped in such Calendar
Quarter multiplied by the Purchase Price Material of such
Product further multiplied by * the difference between the
Challenge Cost and the Base Cost, plus (ii) a further
increment for the Purchase Price Material of such Product
equal to the number of Units of such Product Shipped in such
Calendar Quarter multiplied by the Purchase Price Material
of such Product further multiplied by the amount, if any, by
which the sum of the Base Cost plus * the difference
between the Challenge Cost and the Base Cost exceeds * of
the Net Purchase Price for such Product.
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
-54-
(B) If ODS or CHIRON elects to continue manufacturing such Raw
Material after a cost challenge by XXXXXX or becomes the
Manufacturing Party for such Raw Material as the result of a
cost challenge and the Challenge Cost is less than or equal
to the Base Cost, XXXXXX'x Calendar Quarter payment due in
accordance with Paragraph 3.28 shall be reduced by an
increment for the Purchase Price Material of each Product
containing such Raw Material equal to the number of Units of
such Product Shipped in such Calendar Quarter multiplied by
the Purchase Price Material of such Product further
multiplied by * the difference between the Base Cost and
the Challenge Cost.
(C) If XXXXXX elects to continue manufacturing such Raw Material
after a cost challenge by ODS or CHIRON or becomes the
Manufacturing Party for such Raw Material as the result of
a cost challenge and the Challenge Cost is greater than the
Base Cost, XXXXXX'x Calendar Quarter payment due in
accordance
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
-55-
with Paragraph 3.28 shall be reduced by an increment for the
Purchase Price Material of each Product containing such Raw
Material equal to the number of Units of such Product
Shipped in such Calendar Quarter multiplied by the Purchase
Price Material of such Product further multiplied by the sum
of the Base Cost and * the difference between the
Challenge Cost and the Base Cost.
(D) If XXXXXX elects to continue manufacturing such Raw Material
after a cost challenge by ODS or CHIRON or becomes the
Manufacturing Party for such Raw Material as the result of a
cost challenge and the Challenge Cost is less than or equal
to the Base Cost, XXXXXX'x Calendar Quarter payment due in
accordance with Paragraph 3.28 shall be reduced by an
increment for the Purchase Price Material of each Product
containing such Raw Material equal to the number of Units of
such Product Shipped in such Calendar Quarter multiplied by
the Purchase Price Material of such Product further
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
-56-
multiplied by the sum of the Challenge Cost and * the
difference between the Base Cost and the Challenge Cost.
(e) In the event XXXXXX is required to pay an additional increment
pursuant to subparagraph (ii) of Paragraphs 3.30(b) or (d)(i)(A), or
in the event an incremental reduction under Paragraphs 3.30(c) or
(d)(i)(B) is limited to * ) of the Net Purchase Price under
Paragraph 3.36 below, XXXXXX shall have the right, upon notice to the
Manufacturing Party, to begin manufacturing the Raw Material contained
in the Product for which such additional sum is payable. If Xxxxxx
elects to begin manufacturing pursuant to this subparagraph (e),
XXXXXX'x Calendar Quarter payment due in respect of such Product in
accordance with Paragraph 3.28 shall be reduced by an increment equal
to the number of Units of such Product Shipped in such Calendar
Quarter multiplied by * the aggregate Net Purchase Price for such
Product.
3.31 In the event that XXXXXX becomes the Manufacturing Party as the
result of a cost challenge, XXXXXX shall be obligated to supply ODS and its
Affiliates with their
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
-57-
requirements of Raw Materials at XXXXXX'x Manufacturing Costs plus * the
excess, if any, of the Current Cost at the time of the cost challenge over
XXXXXX'x Manufacturing Costs.
3.32 In the event that the Base Cost has not been established and XXXXXX is
the Manufacturing Party, XXXXXX'x Calendar Quarter payment due in accordance
with Paragraph 3.28 shall be reduced by an increment equal to the number of
Units of Product containing such Raw Material Shipped in such Calendar Quarter
multiplied by the Purchase Price Material of such Product further multiplied by
XXXXXX'x Manufacturing Cost.
3.33 If the Base Cost is established and XXXXXX becomes the Manufacturing
Party other than pursuant to Paragraph 3.30 or 3.35, XXXXXX'x Calendar Quarter
payments due in accordance with Paragraph 3.28 shall be reduced as follows: (a)
if XXXXXX'x Manufacturing Costs are greater than the Base Cost, XXXXXX'x
Calendar Quarter payment due in accordance with Paragraph 3.28 shall be reduced
by an increment for the Purchase Price Material of each Product equal to the
number of Units of such Product Shipped in such Calendar Quarter multiplied by
the Purchase Price Material of such Product further multiplied by the sum of
the Base Cost plus * the difference between XXXXXX'x Manufacturing Costs and
the Base Cost; and (b) if XXXXXX'x Manufacturing Costs are less
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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than the Base Cost, XXXXXX'x Calendar Quarter payment due in accordance with
Paragraph 3.28 shall be reduced by an increment for the Purchase Price Material
of each Product equal to the number of Units of such Product Shipped in such
Calendar Quarter multiplied by the Purchase Price Material of such Product
further multiplied by the sum of XXXXXX'x Manufacturing Costs plus * the
difference between the Base Cost and XXXXXX'x Manufacturing Costs.
3.34 In the event that CHIRON or ODS supplies XXXXXX with a Raw Material
which XXXXXX utilizes in manufacturing a Product and the Net Purchase Price
is less than CHIRON's or ODS's Manufacturing Costs of the Raw Material, the
Purchase Price shall be increased by the difference between * * of
CHIRON's or ODS's Manufacturing Costs of the Raw Material and the Net
Purchase Price. Such increased Purchase Price shall not be subject to any
reduction pursuant to Article VI or any offset pursuant to Article V.
3.35 With respect to Combination Products, in addition to the Purchase
Price determined according to Paragraphs 3.2-3.22 above, XXXXXX shall pay to ODS
* of CHIRON's Manufacturing Costs for each Raw Material utilized in the
manufacture of or contained in the Combination Product except for one (1) such
Raw Material. Such one (1) Raw Material shall be determined by the following
criteria:
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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(a) the Raw Material first utilized in a Product Shipped; or
(b) if such one (1) Raw Material cannot be determined, then the Raw
Material for which CHIRON's Manufacturing Costs is lowest.
In any event however, if XXXXXX'x Manufacturing Costs are less than CHIRON's
Manufacturing Costs with respect to any Raw Material other than the one (1) Raw
Material, XXXXXX shall have the option of manufacturing such other Raw Material
and XXXXXX shall offer to provide ODS with such Raw Material at * of XXXXXX'x
Manufacturing Costs.
3.36 Notwithstanding any provision to the contrary contained herein, in no
event shall the amount of any increment for Purchase Price Material pursuant to
Paragraphs 3.30(c), (d)(i)(B), (d)(i)(C), (d)(i)(D), (e), 3.32, or 3.33 reduce
the amount of money payable to ODS for Shipped Units of Product containing such
Purchase Price Material, as a component of XXXXXX'x Calendar Quarter payment due
in accordance with Paragraph 3.28, to less than * of the aggregate Net
Purchase Price for such Units of Product.
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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IV. SUPPLY OF RAW MATERIALS
4.1
(a) During the term of this Agreement and in consideration for the payment
by XXXXXX of the total monies due as determined in accordance with the
provisions hereinafter, CHIRON agrees to supply XXXXXX with such
quantities of Antigen and Antibody as XXXXXX requires, subject to the
provisions of this Article IV, for the development and manufacture of
Product, and subject to the terms of Article III and this Article IV
and during the term of this Agreement, XXXXXX agrees to obtain solely
from CHIRON all Antigen and Antibody required by XXXXXX and its
Affiliates, directly or indirectly, for the manufacture of Product.
(b) Paragraph 4.1(a) notwithstanding, nothing herein shall preclude XXXXXX
from making Antigens or Antibodies in the European Economic Community
for manufacturing Products for resale in the European Economic
Community after * from the effective date of this Agreement.
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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(c) It is the general intent of the parties hereto that CHIRON in the
first instance shall be the Manufacturing Party of Raw Materials and
that CHIRON shall, pursuant to the provisions set forth hereunder, use
reasonable efforts to supply XXXXXX with its forecasted requirements
and firm purchase orders for such Raw Materials. As the Manufacturing
Party of a Raw Material, CHIRON shall be obliged to maintain a Safety
Stock Inventory of such Raw Material. In the event that CHIRON does
not agree to supply a Raw Material, XXXXXX may manufacture the Raw
Material for itself; provided, however, that XXXXXX shall have a
concomitant obligation to supply the same Raw Material to ODS if ODS
so desires.
4.2 For each Raw Material, CHIRON shall propose in writing reasonable
Release Specifications. Upon proposing such Release Specifications, CHIRON shall
be obligated to meet each Receiving Party's requirements of such Raw Material
subject to the provisions of this Article IV. Release Specifications for
CHIRON's Antigen designated C100-3 are listed on Exhibit 4.2 attached hereto and
incorporated herein.
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4.3
(a) With respect to the Release Specifications of each Raw Material which
ODS is able to demonstrate can be used to manufacture Product, XXXXXX
may propose modified Release Specifications for such Raw Material, in
which case CHIRON may either: i) at XXXXXX'x expense, alter its
manufacturing processes to produce the Raw Material meeting the
proposed, modified Release Specifications; or ii) allow XXXXXX to
manufacture the Raw Material according to such proposed, modified
Release Specifications.
(b) With respect to the Release Specifications of each Raw Material which
ODS is not able to demonstrate can be used to manufacture Product,
XXXXXX may propose modified Release Specifications for such Raw
Material, provided XXXXXX certifies that such Raw Material
manufactured according to such proposed, modified Release
Specifications can be used to manufacture Product, in which case
CHIRON may either: i) alter its manufacturing processes to produce the
Raw Material meeting the proposed, modified Release Specifications; or
ii) allow XXXXXX to manufacture the Raw Material according to such
proposed, modified Release Specifications.
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(c) Once XXXXXX commences manufacturing a Raw Material, ODS shall have the
option of having ODS's requirements of the same Raw Material supplied
to it by XXXXXX meeting the same proposed, modified Release
Specifications and under supply, and delivery terms comparable to the
terms of this Article IV and terms comparable to Articles IX and XIII
below. ODS shall pay XXXXXX a supply price for any Raw Material
supplied by XXXXXX hereunder equal to ** of XXXXXX'x Manufacturing
Costs for the amounts of Raw Material so supplied.
4.4 After delivery of a Raw Material by CHIRON, XXXXXX and CHIRON shall
negotiate in good faith and agree upon and establish in writing reasonable
Acceptance Criteria for the Raw Material based on actual testing of delivered
Raw Material. Until Acceptance Criteria are agreed upon, the Release
Specification shall be the Acceptance Criteria for the Raw Material.
4.5 Effective April 1, 1990 for CHIRON's Antigen designated C100-3, and
effective as of the date of first commercial sale of Product containing a Raw
Material other than C100-3, CHIRON warrants that, with respect to C100-3 and
such other Raw Materials for which it is the Manufacturing Party, it
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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will use reasonable efforts to maintain a Safety Stock Inventory which shall
contain at least XXXXXX'x ordered and forecasted requirements for the following
* of each Raw Material being provided by CHIRON to XXXXXX hereunder. ODS and
XXXXXX each separately warrant that, with respect to a Raw Material for which it
is the Manufacturing Party, it will use reasonable efforts to maintain a Safety
Stock Inventory which shall contain at least the Receiving Party's ordered and
forecasted requirements for the following * of each Raw Material being
provided by ODS or XXXXXX as a Manufacturing Party hereunder.
4.6 Except as otherwise provided hereunder the parties shall, before
Shipping a Unit of Product, agree upon in writing the Product Requirement of
the Product. Such Product Requirement shall be initially estimated by the
parties and thereafter revised, if necessary, to reflect actual manufacturing
experience of the Product.
4.7 By September 1, 1989 XXXXXX shall provide ODS and CHIRON with:
(a) firm purchase orders for XXXXXX'x requirements for each Raw Material
to be delivered in September, October and November 1989; and
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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(b) a forecast of XXXXXX requirements for each Raw Material to be
delivered in each of the next succeeding * .
On or before October 2, 1989, and the first work day of each month thereafter,
XXXXXX shall update its forecast by providing ODS and CHIRON with the following:
(c) an additional firm purchase order for the next month succeeding the
last month covered by a firm purchase order; provided, however, that
such additional purchase order for such month may not vary by plus or
minus ten percent (10%) from the amount forecasted for such month in
the last forecast; and
(d) a forecast of XXXXXX requirements for each Raw Material in each of the
next succeeding * * ; provided, however, that the forecast for the
first month shall not vary by plus or minus twenty percent (20%) from
the amount forecasted for that month in the last forecast and the
forecast for the second month shall not vary by plus or minus twenty-
five percent (25%) from the amount forecasted for that month in the
last forecast.
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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CHIRON shall deliver to XXXXXX, from Safety Stock Inventory on a first
in/first out basis, all amounts of Raw Materials ordered by XXXXXX. XXXXXX
may from time to time, place an order for Raw Materials that is greater than
that permitted by the forecasting and firm purchase order limits set forth
above. In such event, CHIRON shall use its reasonable efforts to fulfill such
orders but shall not be so obligated and neither the failure to fill such
orders nor any reduction in Safety Stock Inventory caused by filling such
orders shall constitute a Delivery Default under Paragraph 4.9 on behalf of
CHIRON.
4.8
(a) CHIRON shall deliver to XXXXXX upon release of any lot of Raw Material
to Safety Stock Inventory, a certificate of analysis stating the
results of its Release Specification testing. The certificate of
analysis shall be signed by a responsible person duly-authorized to
certify the quality of the Raw Material.
(b) CHIRON shall provide to XXXXXX, with delivery of ordered Raw
Materials, a representative sample of each lot of Raw Material
included within the delivery.
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Xxxx XXXXXX'x receipt of delivery of any Raw Material and the
representative sample(s), XXXXXX will perform the agreed upon
Acceptance Criteria tests to determine acceptability of each Raw
Material lot.
(c) XXXXXX may reject any Raw Material which fails to meet the agreed upon
Acceptance Criteria ("Rejected Raw Material") and shall, within
forty-five (45) days after its receipt of any shipment of Rejected Raw
Material, notify CHIRON in writing of any claim relating to any
shortage in quantity of the shipment of Raw Material or any specific
alleged non-conformity with Acceptance Criteria. In the event of such
notice of rejection or shortage, CHIRON shall, if it concurs, replace
the Rejected Raw Material or make up the shortage within forty-five
(45) days of receiving such notice, at no cost to XXXXXX, and shall
make arrangements with XXXXXX for the return, destruction or other
disposal of any Rejected Raw Material, any charges therefore to be
paid by CHIRON. If CHIRON disagrees with XXXXXX'x determination of the
alleged non-conformity, then an independent laboratory, mutually
agreed upon by the parties, shall analyze for Acceptance Criteria a
sample to be furnished by CHIRON of the identical lot(s) of allegedly
non-conforming
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Raw Material delivered to XXXXXX, and both parties shall be bound by
such laboratory's results of such analysis. The losing party shall pay
the costs incurred by the laboratory and all other reasonable
out-of-pocket costs incurred by the other party by reason of such
allegation or actual nonconformance (but not any consequential
damages or lost profits). If CHIRON shall not have an identical batch
for analysis, then XXXXXX shall provide a sample from the shipment for
testing.
(d) If the independent laboratory confirms the delivery's non-conformance,
CHIRON shall replace, at its expense, the Rejected Raw Material with
conforming Raw Material within forty-five (45) days of its receipt of
the report of the independent laboratory confirming the
non-conformity.
(e) Replacement of the Rejected Raw Material by CHIRON pursuant to this
Paragraph 4.8 shall represent the sole remedy of XXXXXX against
CHIRON, ODS and their Affiliates for failure to deliver conforming
goods except that failure to so replace non-conforming goods shall
entitle XXXXXX to the alternate manufacturing provisions of Paragraph
4.9.
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4.9
(a) Subject to the terms of this Article and notwithstanding Article XII
hereof, if at any time the amount of a Raw Material in the Safety
Stock Inventory is less than XXXXXX'x ordered and forecasted
requirements of such Raw Material for the following three (3) months
(an "Inventory Shortfall"), CHIRON shall promptly give XXXXXX written
notice of such Inventory Shortfall, in which case ODS shall have the
right to manufacture, or have manufactured, such Raw Material if
CHIRON does not within forty-five (45) days of such notice return the
Safety Stock Inventory to an amount equal to XXXXXX'x ordered and
forecasted requirements of such Raw Material for the following three
(3) months. ODS shall notify XXXXXX within such forty-five (45) day
period of ODS's intention to manufacture or have manufactured such Raw
Material. If under this Paragraph 4.9 ODS becomes the Manufacturing
Party for any Raw Material, ODS shall have the right to manufacture,
or have manufactured, the Raw Material for the longer of six (6)
months or three (3) months after CHIRON notifies ODS that CHIRON has
accumulated a Safety Stock Inventory of the Raw Material equal to
XXXXXX'x ordered and forecasted
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requirements of such Raw Material for the following three (3) months.
If ODS elects not to manufacture or have manufactured the Raw
Material, or if within six (6) months of CHIRON's notice of Inventory
Shortfall CHIRON and ODS fail to accumulate among both parties a
Safety Stock Inventory of the Raw Material equal to XXXXXX'x
forecasted requirements of such Raw Material for the following three
(3) months, XXXXXX shall have the right to manufacture the Raw
Material for the longer of six (6) months or until three (3) months
after CHIRON and ODS notify XXXXXX that they have accumulated among
both parties a Safety Stock Inventory of the Raw Material equal to
XXXXXX'x ordered and forecasted requirements of such Raw Material for
the following three (3) months. If the Manufacturing Party is XXXXXX,
CHIRON shall have the right to manufacture the Raw Material if XXXXXX
does not within forty-five (45) days of such notice return the Safety
Stock Inventory to an amount equal to ODS's forecasted requirements of
such Raw Material for the following three (3) months. CHIRON shall
notify ODS within such forty-five (45) day period of CHIRON's
intention to manufacture or have manufactured such Raw Material. If
under this Paragraph 4.9 CHIRON becomes the Manufacturing Party for
any Raw Material, CHIRON
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shall have the right to manufacture the Raw Material for the longer of
six (6) months or three (3) months after XXXXXX notifies CHIRON that
XXXXXX has accumulated a Safety Stock Inventory of the Raw Material
equal to ODS's forecasted ordered and requirements of such Raw
Material for the following three (3) months. If CHIRON elects not to
manufacture or have manufactured the Raw Material, or if within six
(6) months of XXXXXX'x notice of Inventory Shortfall XXXXXX and CHIRON
fail to accumulate among both parties a Safety Stock Inventory of the
Raw Material equal to ODS's ordered and forecasted requirements of
such Raw Material for the following three (3) months, ODS shall have
the right to manufacture the Raw Material for the longer of six (6)
months or three (3) months after CHIRON and XXXXXX notify ODS that
CHIRON and XXXXXX have accumulated among both parties a Safety Stock
Inventory of the Raw Material equal to ODS's ordered and forecasted
requirements of such Raw Material for the following three (3) months.
(b) In the event of a Inventory Shortfall with respect to a Raw Material,
all amounts of such Raw Material produced thereafter until the Safety
Stock Inventory
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of such Raw Material contains the Receiving Party's ordered and
forecasted amounts of such Raw Material for the following three (3)
months, shall be allocated between XXXXXX and ODS in proportion to the
total amount of such Raw Material purchased by each party during the
Calendar Quarter preceding such Inventory Shortfall.
4.10 To effectuate the alternate manufacturing provisions of Xxxxxxxxx
0.0, XXXXXX shall promptly upon ODS's request, with respect to any Raw Material
for which CHIRON is the Manufacturing Party, provide ODS with all information
and materials sufficient to enable ODS to prepare, file and prosecute with the
FDA an establishment license application for the Raw Material. In the event ODS
becomes the Manufacturing Party with respect to the Raw Material pursuant to
Paragraph 4.9 or elects not to become the Manufacturing Party, CHIRON shall
provide XXXXXX with all information and materials sufficient to enable XXXXXX to
prepare, file and prosecute with the FDA an establishment license application
for the Raw Material.
4.11 To effectuate the alternate manufacturing provisions of Paragraph
4.9, XXXXXX shall promptly upon CHIRON's request, with respect to any Raw
Material for which XXXXXX is the
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Manufacturing Party, provide CHIRON with all information and materials
sufficient to enable CHIRON to prepare, file and prosecute with the FDA an
establishment license application for the Raw Material. In the event CHIRON
becomes the Manufacturing Party with respect to the Raw Material pursuant to
Paragraph 4.9 or elects not to become the Manufacturing Party, XXXXXX shall
provide ODS with all information and materials sufficient to enable ODS to
prepare, file and prosecute with the FDA an establishment license
application for the Raw Material.
4.12 If either XXXXXX or ODS determine that a Raw Material with which it
is being supplied will no longer be utilized in any of its Products and so
notifies the Manufacturing Party, then the Manufacturing Party may elect to be
relieved of its obligation to supply any Receiving Party with such Raw Material
provided that such Manufacturing Party:
(a) notifies the Receiving Party of its intention to terminate its supply
obligations with respect to the Raw Material; and
(b) provides the Receiving Party with the ability to manufacture the Raw
Material, if so requested by the Receiving Party;
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provided, however, that the Manufacturing Party will be obligated to supply the
Receiving Party with the Raw Material until after the earlier of:
(c) the Receiving Party's being granted an establishment license by the
FDA for the Raw Material; or
(d) one (1) year from the date the Manufacturing Party notifies the
Receiving Party of its intention to terminate its supply obligations
with respect to the Raw Material.
4.13 Within fifteen (15) days following the effective date of this
Agreement, CHIRON shall provide XXXXXX with fifty (50) milligrams of CHIRON's
Antigen designated C100-3. Thereafter, CHIRON shall provide XXXXXX with at least
one hundred (100) milligrams C100-3 per month until September 30, 1989.
4.14
(a) With respect to all Raw Materials, the Manufacturing Party warrants
that before supplying a Raw Material to a Receiving Party it will
place (i) with a mutually agreed upon escrow agent a description of
its process of the manufacture of each Raw Material in
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sufficiently clear and detailed terms that it can be readily followed
and carried out by a trained biologist to make said Raw Material and,
(ii) with a depository, all organisms containing the genetic material
necessary to enable such biologist to so make said Raw Material.
Furthermore, should the Manufacturing Party alter, modify or change
its process for manufacturing said Raw Material, the Manufacturing
Party agrees to amend the description in escrow and the material
deposited to include such alteration, modification or change. The
description held in escrow and the organisms held in a depository
pursuant to this Paragraph, shall be available to a party only in the
event and to the extent necessary to remedy a Inventory Shortfall
pursuant to Paragraph 4.9 or further to Paragraphs 4.10, 4.11 and
4.12. In such event, the Manufacturing Party shall, upon reasonable
request, provide reasonable assistance to such party such as
instructing appropriately trained personnel, as may be necessary to
enable such party to manufacture said Raw Material. Title to any and
all copies or embodiments of the description shall remain in the
owner. Title to any and all organisms, progeny of organisms, and
genetic material derived from organisms shall remain in the owner. No
party shall
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allow, without prior written approval of the owner, use of the
information in the description, the organism or any genetic material
derived therefrom for any purpose other than carrying out the limited
manufacturing rights granted pursuant to Paragraphs 4.9, 4.10, 4.11 or
4.12. For example and without limitation, no party shall cause the
alteration or mutation of the organism or its progeny, or the cloning
or sequencing of any genetic material derived from the organism or its
progeny without the prior written approval of the owner. In the event
of any unauthorized use of the information in the description, the
organism, its progeny or any genetic material derived therefrom, all
resulting data, biological material, and/or inventions shall be the
property of the owner of the original information, organism or genetic
or biological material and shall be promptly and fully delivered to
such owner.
(b) Upon termination by the Manufacturing Party of the limited
manufacturing rights granted to a party pursuant to Paragraph 4.9,
such party shall immediately cease to use the information supplied by
the escrow agent and the organism and shall return such information
and all copies or other embodiments
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thereof to the escrow agent, and shall return the organism, its
progeny and any genetic material derived therefrom, to the depository
or destroy it, at the owner's option.
4.15 Raw Material supplied hereunder shall be F.O.B. Manufacturing Party's
facility.
4.16 Title and risk of loss with respect to each Raw Material shall pass
to the Receiving Party upon acceptance of delivery at the Manufacturing Party's
facility.
4.17
(a) Each Manufacturing Party warrants that no Raw Material supplied
hereunder will at the time of acceptance of such delivery be
adulterated or misbranded within the meaning of the Act, or within the
meaning of any applicable federal, state, or local law in which the
definitions or adulteration and misbranding are substantially similar
to those contained in the Act, as such laws are constituted and
effective at the time of delivery, or will be an article which may
not, under the provisions of the Act, be introduced into interstate
commerce. Each Manufacturing Party also
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warrants that the facilities to be used in the manufacture of Raw
Material shall comply with all applicable federal, state, and local
laws and regulations, including good manufacturing practices ("GMP's")
as defined under the Act.
(b) Each party recognizes that ODS's and XXXXXX'x use of Raw Material may
be for sale as a federal government contractor to the U.S. government.
Each party, as a Manufacturing Party and at the Receiving Party's
request and expense, agrees to use reasonable efforts to comply with
any additional legal and/or regulatory requirements not set forth in
subparagraph (a) above that may apply to its provisions of Raw
Material to ODS or XXXXXX as a subcontractor in a federal government
contract.
Liability under this Paragraph 4.17 shall be limited to replacement of Raw
Material and shall not extend to damages incurred by a Receiving Party which are
of a consequential or incidental nature except for any third party product
liability.
4.18 Each Receiving Party may once per Calendar Year, upon no less than
thirty (30) days written notice and during reasonable business hours, inspect
the Manufacturing Party's
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facilities used in manufacturing Raw Material, the manufacturing procedures (for
compliance with GMP's and the Receiving Party's quality assurance requirements
only), as well as inventories of Raw Material, work-in-process, production
records and such other matters as may be relevant to proper quality assurance of
Raw Material to be delivered hereunder.
4.19 Each Manufacturing Party shall permit authorized representatives of
the FDA (or any similar government agency of any other country) to inspect the
facilities used in the manufacture of Raw Material, and shall promptly notify
the Receiving Party when it has received notice of such inspection. The
Manufacturing Party shall advise the Receiving Party of the findings of any
such inspection and shall promptly take steps to correct any deficiencies found
by the FDA (or like agency of any other country) relating to the manufacture of
Raw Material.
V. COMPETITION
5.1 It is the intent of the parties that the Purchase Price payable to ODS
by XXXXXX be reduced if XXXXXX encounters substantial third party competition
with respect to Products. Accordingly, subject to the provisions of this Article
V, the Purchase Price may be reduced if the requirements of Paragraphs
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5.2 and 5.3 below related to XXXXXX'x activities have been met primarily as a
result of XXXXXX'x marketing efforts directed toward a third party competitor.
If, however, either ODS or CHIRON believes that the requirements of Paragraphs
5.2 or 5.3 below related to XXXXXX'x activities have been met primarily as a
result of XXXXXX'x marketing efforts directed toward reducing the Purchase Price
rather than toward a third party competitor, the Purchase Price shall not be
reduced unless resolved in accordance with the following sentence. Any dispute
among the parties over whether any reduction of Purchase Price under this
Paragraph 5.1 is appropriate by reason of the second sentence of this Paragraph
5.1 and which the parties fail to resolve themselves may only be resolved by
resort to Article XVIII of this Agreement, in which case the neutral shall be
charged with determining and reporting one (1) of the following: a) that XXXXXX
has met the requirements of Paragraph 5.2 or 5.3 with respect to its activities
in an attempt to reduce the Purchase Price and hence is not entitled to an
offset from the Purchase Price under this Article V; or b) that XXXXXX has met
the requirements of Paragraph 5.2 or 5.3 with respect to its activities as a
response to third party competition and hence is entitled to an offset from the
Purchase Price under this Article V.
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5.2 During each Calendar Quarter after the * anniversary of the
effective date of this Agreement, XXXXXX shall be entitled to an offset against
the Purchase Price if all of the following conditions are satisfied in a
Territory (other than Territory VII) with respect to a * or * (such
Territory and Product are hereinafter respectively referred to as the "Affected
Territory" and the "Affected Product"):
(i) The Affected Product is being Shipped by XXXXXX in the Affected
Market;
(ii) The Affected Product is not a * ;
(iii) a third party (other than XXXXXX, ODS, an Affiliate of either or a
customer of either) is selling a HCV screening test to Donor Centers
in the Affected Territory which is used primarily for the same
purpose as the Affected Product (hereinafter referred to as the
"Third Party Product");
(iv) the Third Party Competition Price to Donor Centers in the Affected
Territory is lower than the Base Price;
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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(v) sales of the Third Party Product in the Affected Territory during
each of the previous two (2) consecutive Calendar Quarters represent
at least a * Unit market share, determined by an independent
auditor at XXXXXX'x expense, for each such Calendar Quarter of the
Affected Market for products primarily utilized for the same purpose;
(vi) the XXXXXX Selling Price for the Affected Product is less than the
Base Price; and
(vii) XXXXXX'x overall market share in the Calendar Quarter for Non-HCV
Screening Tests delivered to Donor Centers in the Affected Territory
does not increase by more than * on an aggregate Unit basis for all
such Non-HCV Screening Tests over the immediate previous Calendar
Quarter.
If all the foregoing conditions are satisfied, then XXXXXX shall determine the
Price Differential for the Affected Product in the Affected Market.
5.3 During each Calendar Quarter after the * anniversary of the
effective date of this Agreement, XXXXXX shall be entitled to an offset against
the Purchase Price if
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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all of the following conditions are satisfied in a Territory (other than
Territory VII) with respect to a * or * (such Territory and Product are
hereinafter respectively referred to as the "Affected Territory" and the
"Affected Product"):
(i) The Affected Product is being Shipped by XXXXXX in the Affected
Market;
(ii) The Affected Product is not a * ;
(iii) a third party (other than XXXXXX, ODS, an Affiliate of either or a
customer of either) is selling a HCV screening test to Plasma Centers
in the Affected Territory which is used primarily for the same
purpose as the Affected Product (hereinafter referred to as the
"Third Party Product");
(iv) the Third Party Competition Price to Plasma Centers in the Affected
Territory is lower than the Base Price;
(v) sales of the Third Party Product in the Affected Territory during
each of the previous two (2) consecutive Calendar Quarters represent
at least a * Unit market share, determined by an
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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independent auditor at XXXXXX'x expense, for each such Calendar
Quarter of the Affected Market for products primarily utilized for
the same purpose;
(vi) the XXXXXX Selling Price for the Affected Product is less than the
Base Price; and
(vii) XXXXXX'x overall market share in the Calendar Quarter for Non-HCV
Screening Tests delivered to Plasma Centers in the Affected Territory
does not increase by more than * on an aggregate Unit basis for all
such Non-HCV Screening Tests over the immediate previous Calendar
Quarter.
If all the foregoing conditions are satisfied, then XXXXXX shall determine the
Price Differential for the Affected Product in the Affected Market.
5.4 The amount of the Purchase Price offset shall be determined by
deducting from the Purchase Price, calculated pursuant to Paragraphs 3.2-3.22 of
this Agreement, the Price Differential determined according to either Paragraph
5.2 or 5.3. In no event shall the Price Differential exceed the Net Purchase
Price.
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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5.5 In any Calendar Quarter the percentage change in XXXXXX'x overall Unit
market share for Non-HCV Screening Tests required by condition (vii) of
Paragraphs 5.2 or 5.3 shall be calculated by dividing the difference between:
(a) the market share of Non-HCV Screening Tests held by XXXXXX in the Calendar
Quarter immediately prior to the Calendar Quarter in which a third party first
began selling its Third Party Product in the Affected Market; and (b) the market
share of Non-HCV Screening Tests held by XXXXXX in such Calendar Quarter; by (c)
the market share of Non-HCV Screening Tests held by XXXXXX in such Calendar
Quarter, and multiplying the quotient thereof by one hundred (100). In lieu of
measuring Unit market share, XXXXXX may at its election satisfy condition (vii)
of Paragraphs 5.2 or 5.3 by demonstrating that the total Units of all Non-HCV
Screening Tests Shipped in the Affected Market during such Calendar Quarter
have not increased by more than * * over the total Units of all Non-HCV
Screening Tests Shipped in the Affected Market in the Calendar Quarter
immediately prior to the Calendar Quarter that a third party first began selling
its Third Party Product in the Affected Market. Any calculation under this
Paragraph 5.5 shall not include any Units of a Non-HCV Screening Test sold in a
Territory during the first two (2) Calendar Quarters in which such Non-HCV
Screening Test is first sold by XXXXXX in the Territory.
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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5.6 To invoke a Purchase Price offset under Paragraph 5.2 or 5.3, the
parties shall agree upon the independent auditor, as well as the types and
methods of data acquisition to be utilized by such auditor, for quantifying the
prices, market shares, Units and all other determinations required by Paragraphs
5.2, 5.3 or 5.5. If the parties fail to agree upon the choice of an independent
auditor and the types and methods of data acquisition, the parties shall resolve
such issues in accordance with Article XVIII of this Agreement, in which case
the neutral shall be charged with selecting such independent auditor and/or
types and methods of data acquisition.
5.7 Once a Third Party Product captures at least a * * ) market share
of an Affected Market pursuant to clause (v) of Paragraphs 5.2 or 5.3, such
Third Party Product shall be deemed to continue to hold a * market share of
the Affected Market until the Third Party Product is completely withdrawn
from the Affected Market.
5.8 In the event of a dispute between the parties with respect to an
offset of Purchase Price under this Article V, the parties shall resolve such
dispute in accordance with Article XVIII; provided, however, that until such
dispute is resolved XXXXXX shall pay ODS the Purchase Price determined
according to Paragraphs 3.2-3.22.
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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5.9 All invoices and prices used in any calculation or determination under
this Article V shall be converted, before such calculation or determination is
made, to U.S. dollars at the same rate of exchange for identical time periods,
such rate of exchange being the rate of exchange used by XXXXXX in the normal
course of its business during the time periods to which this Article V pertains
unless such independent auditor determines XXXXXX'x rate of exchange to be
inequitable, in which case such independent auditor shall equitably determine
the rate of exchange to be used.
5.10 With respect to third party competition in any country included
within Territory VII, XXXXXX may request a Purchase Price offset in any such
country because of such third party competition. If ODS and CHIRON agree that
such Purchase Price offset is genuinely warranted in such country, ODS and
CHIRON may agree to a Purchase Price offset in such country; provided, however,
that nothing hereunder shall obligate ODS or CHIRON to offset the Purchase Price
in such country. Any issue concerning Purchase Price offset in any country
included within Territory VII shall be resolved among the parties and shall not
be subject to the provisions of Article XVIII.
5.11 In no event shall the Price Differential exceed * (U.S. * for any
Affected Product unless:
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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(a) an individual who is not under an obligation to assign his or her
interest in any U.S. patent application listed on Exhibit 9.8 to
CHIRON or ODS, or who's right to make, use or sell Product is not
exclusively licensed or assigned to CHIRON or ODS, is joined or
substituted as an inventor or coinventor on a U.S. patent application
listed on Exhibit 9.8 that issues as a U.S. patent (the "Affected
Patent"); and
(b) such individual assigns his or her interests in the Affected Patent,
or foreign counterparts thereof, to a third party or grants any
rights to a third party (including an implied license) under the
Affected Patent, or foreign counterparts thereof, permitting such
third party to make, have made, use or sell Products; and
(c) such third party assigned an interest or granted any rights under the
Affected Patent, or foreign counterparts thereof, markets or
distributes Product under such assignment or grant that does not
infringe a Valid Claim of a Patent Right contained in a patent other
than the Affected Patent.
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VI. INFRINGEMENT
6.1 If, with respect to Territories I-VI, XXXXXX becomes aware of third
party sales of Product which represent a substantial aggregate infringement of a
Patent Right (greater than * of XXXXXX'x Units Of Product of Primary Products,
Screening Products, or Diagnostic Products in such Territory) by one or more
third parties in such Territory, XXXXXX will promptly notify ODS and CHIRON.
Should ODS or CHIRON fail to file suit for infringement within one hundred
twenty (120) days after ODS or CHIRON promptly notifies the infringer(s) of the
infringement, XXXXXX shall be entitled to reduce the Purchase Price with respect
to corresponding Primary Products, Screening Products or Diagnostic Products in
such Territory by * of the Net Purchase Price. Said reduced Purchase Price
shall continue to be the prevailing Purchase Price with respect to such Primary
Products, Screening Products or Diagnostic Products in such Territory until said
infringement is abated to a level that no longer constitutes substantial
aggregate infringement and, thereafter, the Purchase Price shall revert to the
full Purchase Price in effect prior to the reduction hereunder. In the event of
any recovery of damages as a result of such infringement, ODS shall deduct all
legal expenses incurred as a result of said infringement from said recovery and
shall pay XXXXXX one third (1/3) of the remainder.
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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VII. CONFIDENTIALITY
7.1 With respect to all confidential information transmitted by either
party to the other in writing and designated confidential, the receiving party
shall during the term of this Agreement and for five (5) years after termination
hereof keep secret and prevent the disclosure of such confidential information
to parties other than its Affiliates and its and their agents, officers,
employees, and representatives authorized to receive such confidential
information, as it would its own confidential information except for such
confidential information which:
(a) at the time of its disclosure was known to the receiving party or an
Affiliate thereof and was not previously subject to any obligation of
confidentiality;
(b) was generally available to the public or was otherwise part of the
public domain at the time of its disclosure;
(c) becomes generally available to the public or otherwise part of the
public domain after its disclosure other than through any act or
omission of the receiving
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party, its Affiliates or their respective agents, officers, employees
or representatives, directly or indirectly, in breach of this
Agreement; or
(d) becomes known to the receiving party or an Affiliate thereof after
its disclosure from a source other than the disclosing party under no
obligation of confidentiality to the disclosing party.
VIII. TERM AND TERMINATION
8.1
(a) The term of this Agreement shall be for the later of seventeen (17)
years from the effective date hereof or the date on which the last
Patent Right expires which is licensed to XXXXXX hereunder and which
includes a Valid Claim which would, but for such license, be
infringed by XXXXXX'x making, using or selling a Product.
(b) Paragraph 8.1(a) above notwithstanding, this Agreement with respect
to the European Economic Community shall terminate in each member
country seventeen (17) years from the effective date hereof or on the
expiration
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date of the last to expire Patent Right in such member country based
upon a patent application pending as of the effective date of this
Agreement, whichever is later; provided, however, that prior to the
termination of this Agreement in the first member country in which it
would otherwise terminate pursuant to the foregoing, XXXXXX may in
its discretion elect by written notice to ODS and CHIRON to extend
this Agreement as to all such member countries for an additional term
which shall expire on a country-by-country basis on the expiration
date of the last to expire Patent Right existing in such member
country as of the date of such extension.
(c) After seventeen (17) years from the effective date of this Agreement,
the provisions of Articles III and IV shall only apply to Products
which are Patent Protected by a Valid Claim of a Patent Right and
which are not Patented Protected by a Valid Claim of an XXXXXX Patent
Right, wherein such Valid Claim of the XXXXXX Patent Right has a
Priority Date earlier than the Priority Date of such Valid Claim of
the Patent Right.
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8.2 Each party has the right to terminate this Agreement, and all licenses
granted hereunder, if
(a) the other party defaults in the performance of any of its material
obligations hereunder and such default is not corrected within sixty
(60) days after receiving written notice of such default, or
(b) the other party becomes bankrupt or insolvent or its business is
placed in the hands of a receiver, assignee, or trustee.
Such right to terminate shall not be the exclusive remedy of the
non-defaulting party and, by exercising such right, the non-defaulting party
shall not waive any other rights or remedies it may have under this Agreement or
otherwise. Resort to any remedy by a party hereto under this Paragraph 8.2 shall
not limit the party from exercising any other rights it may otherwise be
entitled to by law.
IX. REPRESENTATIONS, WARRANTIES AND DISCLAIMERS
9.1 Each party hereto acknowledges and agrees
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(a) that this Agreement supercedes all previous understandings,
agreements, and representations among the parties (whether written
or oral) with respect to the subject matter therein;
(b) that no representation or promise not expressly contained in this
Agreement has been made by the other party hereto or by any of its
agents, employees, representatives or attorneys;
(c) that this Agreement is not being entered into on the basis of, or in
reliance on, any promise or representation, expressed or implied, or
on any conditions, provisions or terms related thereto covering the
subject matter hereof, other than those which are set forth expressly
in this Agreement; and
(d) that each party has had the opportunity to be represented by counsel
of its own choice in this matter, including the negotiations which
preceded the execution of this Agreement.
9.2 Each party warrants and represents that it has the full right and
power to make the promises and grant the licenses set forth in this Agreement
and that there are no
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outstanding agreements, assignments or encumbrances in existence inconsistent
with the provisions of this Agreement.
9.3 EACH MANUFACTURING PARTY DISCLAIMS ALL WARRANTIES EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, FITNESS FOR ANY
PARTICULAR PURPOSE, AND ANY WARRANTIES CONCERNING THE INHERENT PROPERTIES OF RAW
MATERIALS SUPPLIED HEREUNDER, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT. EACH MANUFACTURING PARTY MAKES NO WARRANTY AS TO THE MERCHANTABILITY
OR FITNESS FOR PARTICULAR PURPOSE OF ANY PRODUCT OF KNOW-HOW, IMPROVEMENTS
THEREON OR LICENSED PATENT RIGHTS.
9.4 XXXXXX warrants that any third party to whom it provides a Raw
Material, whether as a Raw Material or as a component of an unfinished Product,
shall not transfer such Raw Material to any other third party or use such Raw
Material for purposes other than for preparing or packaging Product for which
XXXXXX will pay a Purchase Price in accordance with Article III.
9.5
(a) XXXXXX warrants that as of the effective date of this Agreement there
are no Xxxxxx Collaborators.
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(b) XXXXXX warrants that its agreement with * * has terminated and that
such agreement does not (i) give any rights to * or (ii) impose any
obligations on XXXXXX or give any rights to XXXXXX, which in either
case would adversely affect the rights and obligations set forth in
this Agreement.
(c) XXXXXX warrants that its agreement with * has terminated and that
such agreement does not (i) give any rights to * or (ii) impose any
obligations on XXXXXX, or give any rights to XXXXXX, which in either
case would adversely affect the rights and obligations set forth in
this Agreement.
(d) XXXXXX warrants that it has no agreement with any third party which
(i) gives any rights to such third party or (ii) imposes obligations
upon XXXXXX or gives any rights to XXXXXX, which in either case would
adversely affect the rights and obligations under this Agreement.
9.6 ODS and CHIRON warrant to XXXXXX that they have entered into one or
more agreements exclusively licensing to ODS Know-How owned or controlled by
CHIRON, to make, have made, use and sell Products, with the right to sublicense
to XXXXXX
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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under this Agreement, and that neither CHIRON nor ODS has alleged a breach of
any such agreement and that such agreements have not expired or terminated.
9.7 XXXXXX warrants that Exhibit 9.7 lists all U.S. patent applications
filed on or before the effective date of this Agreement directed to Xxxxxx
Know-How and hence subject to Paragraph 2.3 as well as the countries, regional
patent organizations, or international patent systems where applications have
been filed claiming priority from one or more of the listed U.S. applications.
XXXXXX further warrants that all of the inventors named in the applications
listed in Exhibit 9.7 have assigned, or are under an obligation to assign, to
XXXXXX all of their right, title and interest in the inventions claimed.
9.8 CHIRON warrants that Exhibit 9.8 lists all U.S. patent applications
filed on or before the effective date of this Agreement directed to Know-How
owned by CHIRON, as well as the countries, regional patent organizations, or
international patent systems where applications have been filed claiming
priority from one or more of the listed U.S. applications. CHIRON further
warrants that all of the inventors named in the applications listed in Exhibit
9.8 have assigned, or are under an obligation to assign, to CHIRON all of their
right, title
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and interest in the inventions claimed. ODS warrants that ODS has no U.S. patent
applications pending directed to Know-How owned or controlled by ODS.
9.9 XXXXXX warrants that to the best of its knowledge there are no actions
pending before any court alleging to be related to XXXXXX'x or an Xxxxxx
Collaborator's interest in Xxxxxx Know-How.
9.10
(a) ODS warrants that to the best of its knowledge there are no actions
pending before any court alleging to be related to ODS's interests in
Know-How, * , U.S. District Court for the * of * No. * Civ *.
(b) ODS believes that * may assert claims in the above-referenced
litigation that this Agreement or the performance hereunder by ODS or XXXXXX
might somehow * arising from the agreements between ODS and * dated * and
* . While ODS believes
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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that any such claims would be unjustified and meritless, there is
nothing that ODS can do to prevent * from making such baseless
allegations. Because there exists the possibility that * may
attempt to make * a party to the above-referenced litigation or to
a related proceeding, * * resulting from a claim or lawsuit brought
by * against * based on the same or similar issues as are alleged
in the litigation referred to in Paragraph 9.10(a), and based on the
rights and obligations set forth in this Agreement; provided,
however, that * shall fully cooperate with * in the * and/or *
of any such * or * and * shall have * of any such action,
including the * * will not * to * * * including, but not limited
to, except, however, that if * Product as * asserted by *
arising from or based on the same or similar issues as are alleged
in the litigation
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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referred to in Paragraph 9.10(a) together with the existence of this
Agreement, then * agrees to * * in * of * , and without any
further obligations to * a * of: (i) * if must * , based
on * , by * * of * and * at any time during the *
from the effective date of this Agreement from * such * in *
or * each if the same occurs in * or * ; or (ii) * * if *
must * based on * by * of * and * * at any time during
the * and extending through * after the effective date of this
Agreement from * in * or * * each if the same occurs in *
or *
In the event any such * in (i) or (ii) above causes * to *
Product in any * , * may * this Agreement with respect to such
*
(c) Although ODS believes that any potential * claims concerning this
Agreement would be totally baseless, it nonetheless is willing to
also agree to the following: in the event the * of product by
results in a * as a result of any * or any * asserted by *
arising from or based on the same or similar issues as are alleged in
the litigation referred to in Paragraph 9.10(a) together with the
existence of this Agreement, * shall * any * , provided,
however, that any * by * based on * of Product shall
not * the *
9.11 CHIRON warrants that to the best of its knowledge there are no
actions pending before any court alleging to be related to CHIRON's interest in
Know-How, * U.S. District Court for the * of * No. * Civ. * *
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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9.12 In the event ODS and XXXXXX become licensees pursuant to an agreement
entered into in accordance with Paragraph 2.9 and either ODS's or XXXXXX'x
license thereunder is subsequently terminated, the terminated licensee shall use
all reasonable efforts to prevent termination of the other party's license.
9.13 CHIRON and ODS hereby covenant in the event of the termination of any
agreement between ODS and CHIRON providing for a license of Know-How to ODS,
such termination shall not reduce or terminate the license to XXXXXX granted
under the terms of this Agreement including XXXXXX'x right to use any portion of
the Know-How licensed by CHIRON TO ODS.
9.14 CHIRON covenants that it will prosecute its patent applications
related to HCV in a manner intended to achieve the broadest and most effective
patent protection practical in CHIRON's sole judgement.
X. ASSIGNMENT
10.1 The parties hereto shall not assign their rights or obligations under
this Agreement, other than merely the right to be paid, without prior written
consent of the other party; provided, however, that any party hereto may
assign, upon prior notice to the others, its rights and obligations to an
Affiliate or to a legal entity acquiring all or substantially all of such
party's assets.
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XI. INDEPENDENT CONTRACTORS
11.1 The parties hereto shall not be deemed to be partners, joint
venturers or each other's agents, and neither shall have the right to act on
behalf of the other except as expressly provided hereunder or otherwise
expressly agreed to in writing.
XII. FORCE MAJEURE
12.1 The parties hereto shall not be liable for failure to perform as
required by any provision of this Agreement where such failure results from a
force majeure beyond such party's control. In the event of any delay
attributable to a force majeure, the time for performance affected thereby shall
be extended for a period equal to the time lost by reason of the delay, except
that this Paragraph 12.1 shall not affect any of the Inventory Shortfall
provisions under Article IV.
XIII. INDEMNITY
13.1 Except as hereinafter provided, a Receiving Party shall indemnify
and hold a Manufacturing Party harmless against any and all liabilities,
damages, losses, costs, and expenses, including attorneys' fees, arising from a
suit or claim by a
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third party alleging a product liability cause of action based on the use,
manufacture or sale of any Product by the Receiving Party, its Affiliates
including without limitation any product liability arising from the inherent
properties of any Product, the use by the Receiving Party of any Raw Material,
the development or manufacture of any Product by the Receiving Party, the use by
the Receiving Party or its Affiliates of Know-How, or the use of any Product
manufactured, used or sold by the Receiving Party or its Affiliates by any human
being regardless of whether such use was contemplated by the parties.
Notwithstanding the foregoing, a Receiving Party need not defend, indemnify and
hold a Manufacturing Party harmless against liabilities finally determined to
have arisen solely and directly from any negligence of the Manufacturing Party
relating to the manufacture or sale of any Raw Material that proximately causes
harm to the Receiving Party or any third party due to the use of contaminated,
non-conforming, adulterated, or mislabeled Raw Material supplied by the
Manufacturing Party when such contamination, non-conformity, adulteration, or
mislabeling could not reasonably have been discovered by the Receiving Party
prior to its use. Nothing herein contained shall require any party hereto to
indemnify another for lost profits.
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13.2 In order for this indemnification to apply, the Manufacturing Party
must promptly notify the Receiving Party upon receipt of any notice of any claim
or lawsuit. The Receiving Party may, at its discretion and cost, defend such
claims or suits. Assuming that the Receiving Party has chosen not to defend the
suit, then the Manufacturing Party may settle any such claim or suit, but not
without the prior consent of the Receiving Party, which consent shall not be
unreasonably withheld.
XIV. PUBLICITY AND DISCLOSURE
14.1 Unless mutually agreed upon by the parties, no party shall originate
any publicity, news release or other public announcement, written or oral,
whether to the public press, to stockholders or otherwise, relating to this
Agreement, to any amendment hereto or to performance hereunder, save only such
announcement as in the opinion of legal counsel to the party making such
announcement is required by law to be made. The party making any such
announcement shall give the other parties an opportunity to review the form of
the announcement before it is made. The parties acknowledge that CHIRON may file
this Agreement with the Securities and Exchange Commission pursuant to
applicable regulations.
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XV. COSTS AND EXPENSES
15.1 ODS, CHIRON, and XXXXXX shall each bear and pay for their respective
costs and expenses regarding the negotiation and preparation of this Agreement
and all documents, instruments, and agreements related thereto.
XVI. NOTICES AND PAYMENTS
16.1 Services of all notices in writing and payments to be made as
provided herein shall be deemed duly given and made if sent by courier or by
certified or registered mail, postage prepaid, to the addresses below; the
date of giving such notices shall be the date of mailing:
Ortho Diagnostic Systems, Inc.
U.S. Xxxxx 000
Xxxxxxx, XX 00000
Attention: President
Xxxxxx Laboratories
Xxx Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, XX 00000-0000
Attention: President, Diagnostics Division
Chiron Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: President
with a copy to the addressee's General Counsel.
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XVII. APPLICABLE LAW
17.1 This Agreement shall be construed according to the laws of the State
of New Jersey without giving effect to its principles of conflicts of law, and
without giving effect to any rules or laws relating to arbitration. Should any
provision of this Agreement be held unenforceable or in conflict with any
applicable law, the validity of the remaining provisions shall not be affected
thereby.
XVIII. DISPUTE RESOLUTION
18.1
(a) DISPUTES. The parties recognize that a bona fide dispute as to
certain matters may from time to time arise during the term of
this Agreement which relate to any party's rights and/or
obligations hereunder. In the event of the occurrence of such a
dispute, any party may, by written notice to the other parties,
have such dispute referred to their respective officers designated
below or their successors, for attempted resolution by good faith
negotiations within thirty (30) days after such notice is received.
Said designated officers are as follows:
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For Xxxxxx - President, Diagnostic Division
For ODS - President or Chairman
For Chiron - President
In the event the designated officers are not able to resolve such
dispute within such thirty-day period, any party may invoke the
provisions of Paragraph (b) below within such thirty day period.
(b) ALTERNATIVE DISPUTE RESOLUTION. Any dispute, controversy or claim
arising out of or relating to the validity, construction,
enforceability or performance of this Agreement shall be settled by
binding Alternative Dispute Resolution ("ADR") in the manner
described below:
(i) If a party intends to begin an ADR to resolve a dispute, such
party shall provide written notice (the "ADR Request") to
counsel for such other party or parties informing such other
party or parties of such intention and the issues to be
resolved. From the date of the ADR Request and until such time
as any matter has been finally settled by ADR, the running of
the time periods contained in Section 8.2 as to
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which party must cure a breach of this Agreement shall be
suspended as to the subject matter of the dispute.
(ii) Within ten (10) business days after the receipt of the ADR
Request, the other party or parties may, by written notice
to the counsel for the party initiating ADR, add additional
issues to be resolved and may add as a party to the ADR a
party to this Agreement who was not named as a respondent.
Within twenty (20) business days following the receipt of the
ADR Request a neutral shall be selected by the then-President
of the Center for Public Resources ("CPR"), 000 Xxxxx Xxx.,
Xxx Xxxx, Xxx Xxxx 00000. The neutral shall be an individual
who shall preside in resolution of any disputes between the
parties. The neutral selected shall be a member of the
Judicial Panel of the CPR and shall not be an employee,
director or shareholder of any party or of an Affiliate
of any party. Any party shall have ten (10) business days from
the date the neutral is selected to object in good faith to the
selection of that person. If any party
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makes such an objection, the then-President of the CPR shall, as
soon as possible thereafter, elect another neutral under the same
conditions set forth above. This second selection shall be final.
(iii) No later than ninety (90) business days after selection, the
neutral shall hold a hearing to resolve each of the issues
identified by the parties and shall render the award as
expeditiously thereafter as possible but in no event more than
thirty (30) days after the close of hearings. In making the award
the neutral shall rule on each disputed issue and, except as
provided in Paragraph 5.1 above, shall adopt in whole or in part
the proposed ruling of one of the parties on each disputed issue.
(iv) It is the intention of the parties that discovery, although
permitted as described herein, will be extremely limited except
in exceptional circumstances. The neutral shall permit such
limited discovery necessary for an understanding of any
legitimate issue raised in
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the ADR, including the production of documents. Each party shall
be permitted but not required to take the deposition of not
more than five (5) persons, each such deposition not to exceed
six (6) hours in length. If the neutral believes that
exceptional circumstances exist, and additional discovery is
necessary for a full and fair resolution of the issues, he may
order such additional discovery as he deems necessary. At the
hearing the parties may present testimony (either by live
witness or deposition) and documentary evidence. The hearing
shall be held at such place as agreed upon by the parties or
if they are unable to agree at a place designated
by the neutral. Each party shall have the right to be
represented by counsel. The neutral shall have sole discretion
with regard to the admissibility of any evidence and all other
matters relating to the conduct of the hearing. The neutral
shall, in rendering his decision, apply the substantive law of
New Jersey and without giving effect to its principles of
conflicts of law, and without giving effect to any rules or
laws relating to
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arbitration. The decision of the neutral shall be final and not
appealable, except in cases of fraud or bad faith on the part of
the neutral or any party to the ADR proceeding in connection with
the conduct of such proceedings.
(v) At least fifteen (15) business days prior to the date set for the
hearing, each party shall submit to each other party and the
neutral a list of all documents on which such party intends to
rely in any oral or written presentation to the neutral and a
list of all witnesses, if any, such party intends to call at
such hearing and a brief summary of each witnesses testimony.
At least five (5) business days prior to the hearing, each
party must submit to the neutral and serve on each other party
a proposed ruling on each issue to be resolved. Such writing
shall be limited to representing the proposed rulings, shall
contain no argument or analysis of the facts or issues, and
shall be limited to not more than fifty (50) pages. Not more
than five (5) business days following the close of
hearings, the parties may each submit post hearing briefs
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to the neutral addressing the evidence and issues to be
resolved. Such post hearing briefs shall not be more than
ten (10) pages.
(c) COSTS AND FEES. The neutral shall determine the proportion in which
the parties shall pay the costs and fees of the ADR. Each party shall
pay its own costs (including, without limitation, attorneys fees) and
expenses in connection with such ADR.
(d) CONFIDENTIALITY. The ADR proceeding shall be confidential and the
neutral shall issue appropriate protective orders to safeguard each
parties' Confidential Information. Except as required by law, no party
shall make (or instruct the neutral to make) any public announcement
with respect to the proceedings or decision of the neutral without the
prior written consent of each other party. The existence of any
dispute submitted to ADR, and the award of the neutral, shall be kept
in confidence by the parties and the neutral, except as required in
connection with the enforcement of such award or as otherwise
required by applicable law.
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(e) AWARD. Any judgment upon the award rendered by the neutral may be
entered in any court having jurisdiction thereof.
XIX. SUPPLY OF HTLV-1 AND HIV-1
19.1 XXXXXX agrees to supply ODS with ODS's manufacturing requirements of
HTLV-1 and HIV-1 reagents at terms to be negotiated in good faith.
XX. DISCLOSURE OF
XXXXXX COLLABORATOR UNPATENTED TECHNOLOGY
20.1 Prior to entering into an agreement with an Xxxxxx Collaborator after
the effective date of this Agreement, XXXXXX shall notify ODS and CHIRON of its
intent to enter into such relationship and shall disclose to ODS and CHIRON the
material business terms of such proposed agreement. XXXXXX shall use all
reasonable efforts to negotiate as low as possible a royalty rate, with respect
to the manufacture, use or sale of Products, with such Xxxxxx Collaborator and
extend the benefit of such agreement to both XXXXXX and ODS under the same
terms and conditions. XXXXXX shall pay any royalty due the Xxxxxx Collaborator
for the use of any Xxxxxx Collaborator Unpatented Technology with respect to its
Product or Antigen or Antibodies manufactured by any Manufacturing Party for
XXXXXX.
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20.2 XXXXXX shall, whenever it receives XXXXXX Collaborator Unpatented
Technology which XXXXXX reasonably believes to be of scientific or business
importance or interest, so notify ODS and CHIRON that such Xxxxxx Collaborator
Unpatented Technology exists but XXXXXX shall not disclose any Xxxxxx
Collaborator Unpatented Technology to either ODS or CHIRON unless ODS and CHIRON
request in writing that such disclosure be made or unless XXXXXX first notifies
ODS and CHIRON that XXXXXX intends to disclose such Xxxxxx Collaborator
Unpatented Technology and receives from ODS and CHIRON written direction to
proceed with such disclosure. ODS and CHIRON may elect to receive disclosure of
such Xxxxxx Collaborator Unpatented Technology for evaluation purposes only for
six (6) months. Within six (6) months of such disclosure ODS and CHIRON may
notify XXXXXX in writing of their election to include such Xxxxxx Collaborator
Unpatented Technology within the definition of Xxxxxx Know-How. ODS or CHIRON
shall pay to XXXXXX any royalty due the Xxxxxx Collaborator with respect to the
manufacture, sale or use of their Products or Antigens or Antibodies
manufactured by any Manufacturing Party for ODS for use of such Xxxxxx
Collaborator Unpatented Technology included within Xxxxxx Know-How. XXXXXX shall
not be deemed to have breached any obligation under this Agreement if its
failure to fulfill its obligation was caused solely by its inability to disclose
Xxxxxx Collaborator Unpatented
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Technology because either ODS or CHIRON have elected not to receive such Xxxxxx
Collaborator Unpatented Technology. If XXXXXX discloses any Xxxxxx Collaborator
Unpatented Technology to ODS or CHIRON without such party's written permission,
XXXXXX shall indemnify and hold ODS and CHIRON harmless against any and all
liabilities, damages, losses, costs, royalties, and expenses, including
attorneys' fees, arising from a suit or claim by a third party alleging a cause
of action based on such disclosure or the use of such Xxxxxx Collaborator
Unpatented Technology by ODS or CHIRON, including the manufacture, sale or use
of any Antigen, Antibody or Product by ODS or CHIRON based upon the use of such
Xxxxxx Collaborator Unpatented Technology. The parties shall agree upon a method
of controlling any such claim that shall protect their respective interests but
in no event shall any party settle such claim without XXXXXX'x written consent.
Notwithstanding the foregoing, XXXXXX shall not be obligated to indemnify ODS or
CHIRON for the continued use of any Xxxxxx Collaborator Unpatented Technology
beyond a reasonable period of time after XXXXXX gives ODS and CHIRON written
notice to discontinue the use of any technology that XXXXXX reasonably believes
may constitute Xxxxxx Collaborator Unpatented Technology. If XXXXXX gives such
notice, ODS or CHIRON may elect to discontinue the manufacture for XXXXXX of any
Raw Material that uses such Xxxxxx Collaborator Unpatented Technology.
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XXI. LABELING
21.1 Subject to any applicable law or regulation to the contrary, XXXXXX
agrees to display in a reasonably noticeable manner on its Product packaging a
notice that such Product is manufactured and sold by XXXXXX under license from
Ortho Diagnostic Systems Inc. and Chiron Corporation.
XXII. NOTIFICATION AND REFORMATION
22.1 NOTIFICATION
If CHIRON or ODS shall file a notification (the "Notification") with the
Competition Directorate of the Commission of the European Communities (the
"Commission") in accordance with the regulations established by the Commission,
XXXXXX shall execute all documents reasonably required by CHIRON or ODS and
shall otherwise reasonably cooperate in connection with the Notification. CHIRON
and/or ODS shall bear all costs incurred by CHIRON and/or ODS relating to the
Notification.
22.2 REFORMATION
If, at any time during the term of this Agreement, any of the parties
receives a request or other communication from the Commission with respect to
the Notification (the "Request"), such party shall promptly inform the other
parties of the
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nature of the Request and the parties shall cooperate as necessary to respond to
the Request. In the event that the Request requires that, unless the parties
undertake to modify this Agreement in certain respects, the Commission considers
this Agreement will or may violate the provisions of Articles 85 and 86 of the
Treaty of Rome, then the parties shall amend this Agreement by making those
minimal modifications necessary to satisfy the concerns of the Commission as set
forth in the Request. Notwithstanding the foregoing, the parties agree that
XXXXXX shall retain its license rights within the European Community.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized officers as of the day and year set forth
below.
ORTHO DIAGNOSTIC SYSTEMS INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Xxxxxxx X. Xxxxxx
President
Date: 8/17/89
--------------------
ATTEST:
Xxxxx Xxxxx
--------------------------
XXXXXX LABORATORIES
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------
Xxxxx X. Xxxxxxxx
President, Diagnostics
Division
Date: Aug. 17, 1989
------------------------
ATTEST:
Xxxx X. Xxxx
--------------------------
Ass't. Secretary
CHIRON CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------
Xxxxxxx X. Xxxxxxx
President
Date: 8/17/89
------------------------
ATTEST:
/s/ Xxxx X. Xxxxxxxx
--------------------------
Assistant Sec.
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EXHIBIT 1.13
HBsAG AUSRIA
AUSZYME-MONO CONFIRM
AUSCELL
AUSZYME
AUSZYME-MONO
*
AUSZYME-IMX
*
ANTI-HBC CORAB-RIA
CORZYME
CORZYME-IMX
ANTI-HBS AUSAB-RIA
AUSAB-EIA
AUSAB-QUANT
*
ANTI HBC IGM CORAB-M
CORZYME-M
*
CORZYME-M IMX
HBC-M
HBE HBE-RIA
HBE-RIA (rDNA)
HBE-EIA (rDNA)
HBE-EIA
OTHER DELTA-ANTI RIA
DELTA-ANTI EIA
*
*
HBV-DNA RIA
ANTI-HAV HAVAB-RIA
HAVAB-EIA
HAVAB-M RIA
HAVAB-M EIA
*
HAVAB-M IMX
*
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
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EXHIBIT 2.2
Products which utilize or contain C100-3 and are intended for screening
applications in Donor Centers and Plasma Centers:
US 10 sites 30,000 tests for aggregate of all sites
West Germany 5 sites 10,000 tests for aggregate of all sites
France 5 sites 10,000 tests for aggregate of all sites
Japan 5 sites 10,000 tests for aggregate of all sites
Products which utilize or contain C100-3 and are intended to be Diagnostic
Products only:
US 5 sites 5,000 tests for aggregate of all sites
West Germany 3 sites 5,000 tests for aggregate of all sites
France 3 sites 5,000 tests for aggregate of all sites
Japan 3 sites 5,000 tests for aggregate of all sites
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EXHIBIT 4.2
C-100 SPECIFICATIONS
1) *
2) *
3) * (expressed as mg/ml).
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
EXHIBIT 9.7
A. U.S. APPLICATIONS
U. S. S. N. FILING DATE
----------- -----------
* *
B. FOREIGN APPLICATIONS
*
C. EPO
*
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
EXHIBIT 9.7 (CONT'D)
D. NATIONAL FILING
*
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
EXHIBIT 9.8 (CONT'D)
C. *EPO
*Designating:
*
D . **PCT
*
E. ENTERING NATIONAL PHASE FROM PCT
*
* = Confidential portions of material have been omitted and filed separately
with the Securities and Exchange Commission.
