EXHIBIT 10.1

Certain identified information has been excluded because it is both not material
and

would likely cause competitive harm if publicly disclosed.

DISTRIBUTION AND SUPPLY AGREEMENT

This Distribution and Supply Agreement (this “Agreement”) is entered into as of
July 2, 2020, (the “Effective Date”) by and between American Regent, Inc., a New
York corporation having an address at 5 Ramsey Road, Shirley, New York, 11967
(“American Regent”), and CytoDyn, Inc., a Delaware corporation having an address
at 1111 Main Street, Suite 660, Vancouver, Washington 98660 (“CytoDyn”).
American Regent and CytoDyn are each referred to herein individually as a
“Party” and together as the “Parties”.

RECITALS

WHEREAS, CytoDyn owns the rights to certain know-how and intellectual property
to manufacture and supply the Product (defined below) in the Territory (defined
below);

WHEREAS, American Regent has experience in the distribution, marketing and sale
of pharmaceutical products in the Territory; and

WHEREAS, CytoDyn desires to grant American Regent, and American Regent desires
to accept, the exclusive license to distribute and sell the Product in the Field
(defined below) subject to the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the covenants and promises
contained in this Agreement, the Parties agree as follows:

 

1.

DEFINITIONS

Unless specifically set forth herein, the following terms, whether used in the
singular or the plural, shall have the respective meanings set forth below.

1.1 “Adverse Event” means any untoward medical occurrence in a patient or
clinical investigation subject who is administered a Product that has at least a
reasonably possible causal relationship with the treatment for which a Product
is used. An untoward medical occurrence can include any unfavorable and
unintended sign (including an abnormal laboratory finding), symptom or disease
temporally associated with the use of a Product and may include a pre-existing
condition that worsened in severity after administration of a Product.

1.2 “Affiliate” means, with respect to any Party, any other Person directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, such Party. For purposes of this definition, a Person shall be
deemed to “control” any other Person if it owns or controls a sufficient
interest in the voting equity (or other comparable ownership if the other Person
is not a corporation) such that it can direct, order or control the actions of
such other Person. For the purposes of this Agreement, any company in the
Daiichi Sankyo family of companies shall not be considered an Affiliate of
American Regent hereunder.

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1.3 “Agreement” has the meaning set forth in the Preamble of this Agreement.

1.4 “American Regent” has the meaning set forth in the Preamble of this
Agreement.

1.5 “American Regent Indemnitees” means American Regent and each of its
respective Affiliates, subsidiaries, equity holders, directors, managers,
officers, employees, trustees, representatives, consultants, sublicensees,
agents, successors and permitted assigns.

1.6 “Applicable Laws” means all applicable statutes, ordinances, regulations,
codes, rules, or orders of any kind whatsoever of any governmental authority in
the Territory, including without limitation the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. ch. 9 § 301 et seq. (“the Act”)), the Generic Drug Enforcement
Act of 1992 (21 U.S.C. § 335a et seq.), the Prescription Drug Marketing Act, the
Anti-Kickback Statute (42 U.S.C. § 1320a-7b et seq.), the Health Insurance
Portability and Accountability Act of 1996, the Federal False Claims Act (31
U.S.C. §3729-3733), the Department of Health and Human Services Office of
Inspector General Compliance Program Guidance for Pharmaceutical Manufacturers,
released April 2003, the Antifraud and Abuse Amendment to the Social Security
Act, the AMA guidelines on gifts to physicians, the Securities Act of 1933 and
the Securities Exchange Act of 1944 (together with all rules promulgated
thereunder (including rules of Official Bodies)) as well as any state laws
impacting the promotion of pharmaceutical products, including any state
anti-kickback/fraud and abuse related laws, all as amended from time to time.

1.7 “Business Day” means any day other than a Saturday, a Sunday, or a day on
which banks in the State of New York are required or authorized to close.

1.8 “Change of Control” means with respect to a Party, the occurrence of any of
the following: (a) the sale of all or substantially all of such Party’s (or such
Party’s controlling Affiliate’s) assets or business relating to this Agreement;
(b) a merger, reorganization or consolidation involving such Party (or such
Party’s controlling Affiliate) in which the voting securities of such Party (or
such Party’s controlling Affiliate, as applicable) outstanding immediately
preceding thereto cease to represent at least fifty percent (50%) of the
combined voting power of the surviving entity immediately after such merger,
reorganization or consolidation; or (c) a Person, or group of Persons, acting in
concert acquire, directly or indirectly, more than fifty percent (50%) of the
voting equity securities or management control of such Party (or such Party’s
controlling Affiliate, as applicable), in one or a series of related
transactions.

1.9 “Commercially Reasonable Efforts” means exercising such reasonable efforts
and diligence in accordance with a Party’s reasonable business, legal, medical
and scientific judgment and accordance with the efforts and resources such Party
would use for a pharmaceutical product which is of similar market potential, at
a similar stage of its product life, taking into account the competitiveness of
the marketplace, the proprietary position of the product and the profitability
of the product.

 

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1.10 “Competing Product” means any biopharmaceutical drug product labeled for
treating Coronavirus Disease 2019 (COVID-19) that targets against the CCR5
receptor as an active moiety, alone or in combination with other ingredients and
is therapeutically interchangeable with the Product.

1.11 “Confidential Information” means with respect to a Party all confidential
Intellectual Property and confidential or proprietary information relating to
the business and affairs of a Party or any of its Affiliates that are disclosed
by or on behalf of a Party to the other Party and all information derived
therefrom, including financial information, business opportunities, information
relating to pharmaceutical products of any nature in any form; provided,
however, that “Confidential Information” shall not include any information that
(a) was already in the public domain at the time of disclosure; (b) becomes part
of the public domain through no action or omission of the receiving Party after
disclosure to the receiving Party; (c) was already known to the receiving Party,
other than under an obligation of confidentiality to the disclosing party, at
the time of the disclosure by the other Party; (d) was independently discovered
or developed by the receiving Party without the use of Confidential Information
belonging to the disclosing Party as shown by pre-existing proof, or (e) was
disclosed to the receiving Party, other than under an obligation of
confidentiality to which a Third Party was subject, by a Third Party who had no
obligation to the disclosing Party not to disclose such information to others,
as shown by independent proof.

1.12 “Cost of Goods Sold” means [***]. CytoDyn’s 2020 estimates of Cost of Goods
Sold for the Product are set forth in Exhibit A, attached hereto.

1.13 “CytoDyn” has the meaning set forth in the Preamble of this Agreement.

1.14 “CytoDyn Indemnitees” means any of CytoDyn and its Affiliates,
subsidiaries, equity holders, directors, managers, officers, employees,
trustees, representatives, consultants, sublicensees, agents, successors and
permitted assigns.

1.15 “CytoDyn Product” means a subcutaneous injectable biopharmaceutical drug
product that contains CytoDyn’s Leronlimab (a humanized monoclonal antibody
(also known as PRO 140) targeting against the CCR5 receptor) as the only active
pharmaceutical ingredient but not labeled for treating COVID-19 sold by the
CytoDyn Product Distributor.

1.16 “CytoDyn Product Distributor” any party, including CytoDyn or a licensed
and/or authorized Third Party, commercializing the CytoDyn Product in the
Territory.

1.17 “Effective Date” has the meaning set forth in the Preamble of this
Agreement.

1.18 “FDA” means the United States Food and Drug Administration or any successor
agency which issues a Regulatory Approval for the Marketing of a Product in the
United States.

1.19 “Field” means distribution, marketing, offering to sell and selling the
Product for the treatment of COVID-19.

 

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1.20 “Firm Order” means a binding, non-cancelable agreement to purchase Product
as evidenced by a purchase order, sales acknowledgement or other evidence to
purchase Product in writing and delivered to CytoDyn by American Regent and
accepted by CytoDyn in accordance with Section 6.2.

1.21 “First Commercial Sale” means with respect to a Product, the first
commercial sale of the Product by American Regent to a Third Party in the Field
in the Territory in final dosage form packaged for use by end-users, other than
for testing purposes and/or sale for experimental purposes, promotional
purposes, compassionate use programs, named patient programs, test market
purposes, or similar purposes.

1.22 “current Good Manufacturing Practices” or “cGMP” means at any time the
quality systems and good manufacturing practices as set forth in 21 C.F.R.
(Parts 210 and 211) and any other Applicable Laws, directives, rules,
regulations, guides and guidance in existence in the Territory at that time.

1.23 “Intellectual Property” means all patents, copyrights, trademarks, service
marks, service names, trade names, internet domain names, e-mail addresses,
applications or registrations for any of the foregoing, or extensions, renewals,
continuations or re-issues thereof, or amendments or modifications thereto,
brandmarks, brand names, trade dress, labels, logos, know-how (including the
Product Know-How), show-how, technical and non-technical information, trade
secrets, formulae, techniques, sketches, drawings, models, inventions, designs,
specifications, processes, apparatus, equipment, databases, research,
experimental work, development, pharmacology and clinical data, software
programs and applications, software source documents, Third Party licenses, and
any similar type of proprietary intellectual property right vesting in the owner
and/or licensee thereof pursuant to the Applicable Laws of any relevant
jurisdiction or under any applicable license or contract, whether now existing
or hereafter created, together with all modifications, enhancements and
improvements thereto.

1.24 “Latent Defect” means a defect that existed at the time that title to
Product passed to American Regent which could not have been detected by American
Regent utilizing American Regent’s usual and customary inspection procedures for
incoming finished product intended for distribution in the Territory, which in
any event will be in accordance with American Regent’s cGMP obligations.

1.25 “Losses” has the meaning set forth in Section 10.1.

1.26 “Manufacture” means to make Product in compliance with cGMP, including to
process, prepare, make and Test the raw materials used in the preparation of
Product and to Test a Product prior to release for Packaging, filling,
packaging, labeling, and preparation of Product for shipment, in each case in a
finished dosage form ready for administration to humans, and “Manufacturing” has
a corresponding meaning.

1.27 “Market” means to distribute, market, offer to sell and/or sell for
purposes of a commercial sale, and “Marketing” has a corresponding meaning.

 

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1.28 “NDC Number” means the National Drug Code number, which is a unique
10-digit, 3-segment number that is a universal product identifier for drugs in
the United States that identifies the labeler/vendor, the product and the trade
package size.

1.29 “Net Profit” means an amount equal to the [***] of the Product less (i) the
[***], and (ii) the [***].

1.30 “Net Profit Split” [***].

1.31 “Net Sales” means the total gross sales of the Product (number of units
shipped times the invoice price per unit) by American Regent, its sub-licensees
and Affiliates to independent third party customers, less the following
deductions incurred, allowed, paid, accrued, or specifically allocated, to the
extent actually taken by such third party customers on such sales: (a) [***] of
gross sales in the Territory to cover cash discounts given by American Regent;
(b) reasonable estimates for customary trade discounts, quantity discounts,
credits, rebates, charge backs, and fees (including without limitation those to
group purchasing organizations, managed-care entities, wholesalers, and
government agencies, including without limitation Medicare and Medicaid); (c)
reasonable estimates for allowances or credits to customers on account of
retroactive price reductions or returns (including without limitation wholesaler
and retailer returns), billing adjustments, bid defaults, shelf stock
adjustments, promotional payments, or other similar allowances affecting the
Product or on account of retroactive price reductions affecting the Product;
(d) sales and excise taxes, customs, and any other taxes, all to the extent
added to the sale price and paid by the selling party and not refundable in
accordance with Applicable Law and without reimbursement from any third party
(but not including taxes assessed against the income derived from such sale);
(e) government fees based on the sale of the Product, including any fees due or
made pursuant to the Patient Protection and Affordable Care Act; (f) reasonable
estimates for allowances and credits to third parties on account of rejected,
damaged, returned or recalled Product; (g) royalties payable to third parties in
connection with the sale of the Product in the Territory; (h) prompt pay
discounts paid to customers; and (i) other specifically identifiable amounts
that have been credited against or deducted from the Product’s gross sales and
are substantially similar to those credits and deductions listed above.
Notwithstanding anything to the contrary, the calculation of Net Sales shall be
made in accordance with American Regent’s standard practices for other
pharmaceutical products, consistently applied.

1.32 “Official Body” means any national, federal, state or local government or
government of any subdivision thereof, or any parliament, legislature, council,
agency, authority, board, commission, self-regulatory authority, department,
bureau or instrumentality thereof, or any court, tribunal, grand jury, mediator
or arbitrator, whether foreign or domestic, in each case having jurisdiction in
the relevant circumstances.

1.33 “Package” means to package and label Product for Marketing and “Packaging”
has a corresponding meaning.

1.34 “Person” means any individual, partnership, limited partnership, joint
venture, syndicate, sole proprietorship, company or corporation with or without
share capital, unincorporated association, trust, trustee, executor,
administrator or other legal personal representative or other entity or Official
Body.

 

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1.35 “Product” means a subcutaneous injectable biopharmaceutical drug product
labeled for treating COVID-19 that contains CytoDyn’s Leronlimab (a humanized
monoclonal antibody (also known as PRO 140) targeting against the CCR5 receptor)
as the only active pharmaceutical ingredient. For clarity, Product excludes any
intravenous or infusible biopharmaceutical drug product.

1.36 “Product Know-How” means the data, information, expertise, trade secrets,
manufacturing, mixing and production procedures, technical assistance, and shop
rights, known to in the possession of or licensed to CytoDyn or its Affiliates,
whether generally known to others or not, and relating to the Manufacturing,
Packaging, Marketing and/or Testing of Product, including:

(a) characteristics, selection of properties and data relating to materials,
such as excipients, used or useful in the Manufacturing, Packaging and/or
Testing of Product;

(b) techniques, equipment and methods used or useful in the Manufacturing,
Packaging or Testing of Product;

(c) equipment and data relating to the Manufacturing, Packaging or Testing of
Product; and

(d) all in vivo or clinical, pharmacology, toxicology, safety and efficacy data,
formulary submissions, pharmaco-economic data, and other such information useful
or required in preparing applications for or obtaining or maintaining Regulatory
Approval and/or for the Manufacturing, Packaging, Marketing and/or Testing of
Product.

1.37 “Product Liability Claim” means any Third-Party claim involving any actual
or alleged death or bodily or emotional injury arising out of or relating to any
Product sold in the Territory.

1.38 “Product Technology” means collectively Product Know-How and all other
Intellectual Property in or to the Product.

1.39 “Quality Agreement” means the mutually agreed Quality Agreement to be
entered into by and between American Regent and CytoDyn, or a CytoDyn Affiliate,
in accordance with Section 4.4.

1.40 “Recall” has the meaning set forth in Section 5.2(a).

1.41 “Regulatory Approval” means all approvals or authorizations granted by the
FDA for the Marketing of a Product in the Territory.

1.42 “Regulatory Requirements” means all applicable Regulatory Approvals,
licenses, registrations, cGMPs, and authorizations and all other requirements of
the FDA in relation to Product, including each of the foregoing which is
necessary for, or otherwise governs, the Manufacture, Marketing, Packaging and
Testing of Product in the Territory.

 

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1.43 “Sales, Marketing and Distribution Costs” means [***] to compensate
American Regent for its direct costs associated with selling, marketing and
distributing the Product (including the costs of obtaining the NDC Number).

1.44 “Specifications” means the specific requirement under a Biologics License
Application (“BLA”) approved by the FDA to govern the quality and integrity of
the Product, including, but not limited to, procedures, formula, process,
testing method, etc.

1.45 “Supply Interruption” has the meaning set forth in Section 6.4.

1.46 “Tax(es)” means, with respect to American Regent, all federal, state,
local, county, foreign and other taxes or government charges constituting sales,
use, transfer, value added, customs, duty or excise taxes payable by American
Regent in connection with the importation or sale of Product.

1.47 “Term” has the meaning set forth in Section 9.1.

1.48 “Territory” means the United States of America, including its territories,
possessions, districts, protectorates and commonwealths.

1.49 “Test” means to test a product or its ingredients prior to release for
further processing or for shipping and Marketing in compliance with Applicable
Law and “Testing” has the corresponding meaning.

1.50 “Third Party” means any Person, other than CytoDyn, American Regent or
their respective Affiliates.

 

2.

DISTRIBUTION RIGHTS

2.1 American Regent Distribution in the Field.

(a) Upon and subject to the terms and conditions of this Agreement, and upon FDA
approval of the BLA for the Product in the Field, CytoDyn hereby appoints
American Regent as the sole and exclusive authorized distributor in the Field in
the Territory, with the right to subcontract to its subcontractors, to sell and
distribute the Product in the Field in the Territory.

(b) Under the exclusive appointment set forth in Section 2.1(a), American Regent
shall obtain exclusively from CytoDyn the Product for Marketing in the Field in
the Territory. CytoDyn shall exclusively supply the Product (even to CytoDyn
itself) to American Regent for Marketing by American Regent in the Field in the
Territory in accordance with the terms of this Agreement.

(c) CytoDyn shall not sell, directly or indirectly through a distributor, any
Product bearing an American Regent NDC number.

 

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2.2 Retention of Rights. For the avoidance of doubt, CytoDyn retains all rights
to the Product Know-How and Intellectual Property worldwide. CytoDyn retains the
right to market, distribute and sell the Product during the Term outside of the
Field or outside the Territory, by itself and/or through its Affiliates and/or
Third Parties.

2.3 Restrictions on Marketing of Product. From and after the Effective Date,
American Regent shall not Market or export the Product outside the Field in the
Territory, or Market or export the Product to any Person who, to the knowledge
of American Regent intends, or is likely to, Market or export the Product
outside the Field in the Territory.

2.4 Covenant Not to Market Competing Product. From and after the Effective Date
and during the Term of this Agreement, American Regent shall not Market a
Competing Product in the Field in the Territory.

 

3.

MARKETING

3.1 Marketing Obligations. American Regent shall, at its sole costs, use
Commercially Reasonable Efforts to Market the Product in the Field in the
Territory, including, without limitation, directing the methods of sale and
distribution, organization and management of sales and Marketing and pricing in
accordance with the terms and conditions of this Agreement.

3.2 Pricing.

(a) American Regent shall solely set the resale prices for the Product in the
Field in accordance with Applicable Laws. American Regent shall be responsible
for allowing credit for sales returns in connection with the sale of a Product
to its customers according to its established procedures for other products.
American Regent shall have sole responsibility for deciding distribution related
decisions, including, but not limited to, issues concerning market launch, final
customer pricing and customer contracts. Within ninety (90) days after the First
Commercial Sale, the Parties shall conduct a business review meeting, either in
person or telephonically, to discuss market conditions, supply estimates and
expected Product trends.

3.3 NDC Number. American Regent shall submit drug listing information to the FDA
with respect to American Regent being the distributor of the Product. American
Regent shall only distribute and sell Product bearing an NDC Number that
reflects American Regent as the distributor and seller thereof. Within fourteen
(14) days after the Effective Date, or such other time period mutually agreed by
the Parties in writing, American Regent shall obtain an NDC Number for each
packaging configuration of the Product. American Regent shall have thirty
(30) days after the Effective Date to conduct additional diligence on the use of
its NDC Number on the Product packaging and it may terminate this Agreement with
fifteen (15) days written notice in the event it determines that there is an
unacceptable risk to American Regent in using its NDC Number.

3.4 Rebate; Processing.

(a) American Regent shall only be responsible for those federal, state and local
government and private purchasing, pricing or reimbursement programs with
respect to the

 

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Product sold by American Regent, including taking all necessary and proper steps
to execute agreements and file other appropriate reports and other documents
with governmental and private entities. American Regent shall be solely
responsible for payment and processing of all rebates, whether required by
contract or local, state or federal law, for the Product sold by American
Regent.

(b) Upon the written request of American Regent, CytoDyn agrees to provide to
American Regent information and data in its possession that American Regent
could not otherwise reasonably obtain but must provide to any state or federal
government regulators (including without limitation Centers for Medicare and
Medicaid Services) pursuant to government-mandated price reporting requirements
for the Product (such requirements, “Pricing Regulations”, and such information
and data, and the similarly required customer information in subsection
(c) below, collectively “Compliance Information”), including, as applicable,
aggregate sales and rebate transaction data, average manufacturer price and best
price calculations, other data or information regarding sales or pricing (both
on and off-invoice) of the Product or CytoDyn Product, and method(s) used for
generating the foregoing information, subject to the following conditions:

(i) No later thirty (30) days before the end of a calendar quarter, American
Regent shall request in writing the required Compliance Information for that
calendar quarter and allow CytoDyn up to fifteen (15) days to provide the
requested Compliance Information;

(ii) American Regent shall use all Compliance Information only for compliance
with Pricing Regulations and not any other purpose, particularly (but not
limited to) set or attempt to set its resale price or its rebate, discount or
other incentive amount offered to its customers, sub-distributors, suppliers, or
competitors of CytoDyn or American Regent;

(iii) American Regent may disclose the Compliance Information only to its
employees and agents who are primarily responsible for American Regent’s
compliance with Pricing Regulations (collectively, “Representatives”), in each
case who (A) need to know such Compliance Information to perform its Pricing
Regulations obligations, (B) are not involved in any activities related to price
setting or negotiation with any other customers, suppliers, or competitors of
CytoDyn, and (C) are bound in writing by restrictions regarding disclosure and
use of the Compliance Information no less restrictive than those set forth
herein;

(iv) American Regent shall be fully liable for any breach of its obligations
herein by its Representatives; and

(v) CytoDyn warrants that to its knowledge, all Compliance Information provided
to American Regent will be complete and accurate in all material respects. In
the event that American Regent discovers, through a routine audit,
reconciliation, its compliance program or otherwise, that any government price
reporting has been miscalculated or other data provided to American Regent
regarding the sales or pricing of the Product in the Territory are inaccurate,
it shall notify CytoDyn immediately of such circumstance and shall work with
CytoDyn to ensure that proper pricing information is provided to American Regent
as soon as possible, but in no event later than thirty (30) days after the end
of the calendar quarter in which such inaccuracy is discovered.

 

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(c) In the event that American Regent is required to access Compliance
Information to fulfill required reporting obligations pursuant to Pricing
Regulations for the Product, and upon written request, CytoDyn shall disclose to
American Regent a comprehensive list of customers to whom the CytoDyn Product is
directly sold by the CytoDyn Product Distributor, and CytoDyn shall (i) identify
mutual customers (wholesalers or other customers that are buying both the
American Regent labeled Product from American Regent and the CytoDyn Product
from the CytoDyn Product Distributor, and (i) ensure that such mutual customers
are segregating the CytoDyn Product from the Product sold by American Regent.
Such customer information shall also be Compliance Information hereunder. If
American Regent reasonably believes that any mutual customers are charging
American Regent fees for services contemplated in any agreements between a
mutual customer and the CytoDyn Product Distributor, the Parties shall cooperate
to confirm such, and in such a case, American Regent shall not be responsible
for paying such fees for service. Rather, the CytoDyn Product Distributor shall
work with American Regent to promptly correct such invoices and, if not
corrected, the CytoDyn Product Distributor shall be responsible for all
outstanding customer fees related to its sales of the American Regent labeled
Product.

(d) With respect to rebates that American Regent is obligated to pay pursuant to
any government (Federal Medicaid or state assistance) rebate programs for
amounts charged to an American Regent NDC Number (“Government Rebates”),
American Regent shall be responsible for the processing, handling and payment of
all such Government Rebates relating to the Products labeled with an American
Regent NDC Number. American Regent shall not be responsible for any reporting
obligations associated with the CytoDyn Product.

(e) For the avoidance of doubt, (i) the CytoDyn Product Distributor shall assume
all obligations to honor and fulfill the payment of chargeback claims,
administrative fees, indirect sales rebates, and all other rebates or fees
associated with an indirect sale of the CytoDyn Product through a wholesaler
outside the Field with respect to Products labeled with the CytoDyn Product
Distributor’s NDC Number; (ii) the CytoDyn Product Distributor shall be
responsible for all required government reporting of CytoDyn Product sold by the
CytoDyn Product Distributor; and (iii) all other payments made to customers for
sales of the CytoDyn Product sold by the CytoDyn Product Distributor, or audits
submitted from customers, shall be the sole responsibility of the CytoDyn
Product Distributor.

3.5 Promotional Materials. American Regent shall not use any promotional
materials in connection with the marketing, sale or distribution of the Product
without CytoDyn’s prior written approval other than (a) the labeling for the
Product approved by CytoDyn in accordance with Section 6.5, and (b) after the
First Commercial Sale, introduction announcements to the trade, bill sheets and
American Regent’s on-line product catalog; provided that any such promotional
materials shall not contain any information other than the name of the Product,
the available packaging configurations, and pricing and delivery terms. CytoDyn
shall not make any statement that is inconsistent with the information contained
in (a) or (b) in this Section. For purposes of this Agreement, “promotional
materials” means all labeling and advertising materials as defined in the Act
and the regulations of the FDA thereunder.

 

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3.6 Sampling. American Regent shall not distribute any samples of the Product to
any Third Party.

3.7 Reports. CytoDyn shall promptly keep American Regent fully informed of all
governmental and regulatory requirements, activities and plans of the FDA
including any changes thereto of which it becomes aware which materially affect,
or are reasonably likely to materially affect, the sales or distribution of the
Product in the Field in the Territory.

 

4.

REGULATORY MATTERS

4.1 Regulatory Responsibilities. CytoDyn will, at its own cost, continue to own
and maintain the applicable Regulatory Approvals necessary to Market the Product
in the Territory. CytoDyn shall be responsible for all regulatory and safety
reporting requirements associated with ownership of the Regulatory Approvals,
including without limitation, Adverse Event reporting and annual reporting and
pharmacovigilance activities in the Territory. American Regent shall assist
CytoDyn at its sole expense by providing customer service, complaint handling
and pharmacovigilance systems to support commercialization of the Product as set
forth in Section 4.3. The Parties shall bear their own costs associated with the
regulatory and safety reporting.

4.2 Pricing. American Regent shall be responsible for dealing with pricing
issues relating to price ceilings and reimbursement for the Product in the Field
and it shall share such decisions and related information with CytoDyn. American
Regent shall be responsible for all government price reporting for sales of the
Product in the Field.

4.3 Monitoring Adverse Events and Quality Complaints. Both Parties shall comply
fully with all applicable Adverse Event reporting recommendations under
Applicable Laws and agree to exchange such information as may be necessary to
achieve that end and to ensure that both Parties are completely informed
regarding Adverse Events with the Product, provided that CytoDyn, as the owner
of the BLA for the Product, shall be solely responsible for all medical
questions for the Product and for all Adverse Event reporting to the FDA in
relation to the Product. In order to enable CytoDyn to comply with its
regulatory reporting responsibilities, American Regent shall use reasonable
efforts to inform CytoDyn of all adverse events as promptly as practical, but no
later than forty-eight (48) hours of receiving information on such Adverse Event
and at such time shall forward to CytoDyn all Adverse Event information received
by it and all other information as required by CytoDyn by notice in writing to
American Regent. The Parties shall negotiate in good faith and use Commercially
Reasonable Efforts to enter into a mutually agreed Safety Data Exchange
Agreement promptly after the Effective Date which will set out the policies,
procedures and standards by which the Parties will coordinate and implement the
pharmacovigilance procedures.

4.4 Quality Agreement. The Parties shall negotiate in good faith and use
Commercially Reasonable Efforts to enter into the Quality Agreement promptly
after the Effective Date which Quality Agreement will set out the policies,
procedures and standards by which the Parties and any Affiliates will coordinate
and implement the operation and quality assurance activities and regulatory
compliance objectives contemplated under this Agreement with respect to Product.
To the extent there are any inconsistencies or conflicts between this Agreement
and the Quality Agreement, the terms and conditions of this Agreement shall
control unless specifically otherwise agreed to in writing by the Parties.

 

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4.5 Cooperation. Without limiting the foregoing, each of CytoDyn and American
Regent shall provide to each other in a timely manner all information which the
other Party reasonably requests regarding the Product in order to enable the
other Party to comply with all Applicable Laws applicable to the Product in the
Territory. Each of CytoDyn and American Regent shall provide to the other or if
applicable, directly to the FDA, any assistance and all documents reasonably
necessary to enable the other to carry out its obligations under this Article 4.
In general, requests for cooperation should be responded to by the other Party
within three (3) Business Days and both should make responsible efforts to
ensure cooperation is maintained to ensure completion of the given project.

 

5.

PRODUCT QUALITY AND PRODUCT RECALLS

5.1 Product quality inquiries other than Adverse Events.

(a) Each Party shall submit to the other Party, within forty-eight (48) hours of
receipt any complaints or issues that question Product quality (other than
Adverse Events) received by that Party or any of its Affiliates or, in the case
of American Regent, to which that Party must respond, together with all evidence
then available and all other information relating thereto subsequently obtained
or produced by either Party.

(b) Each of American Regent and CytoDyn shall promptly notify the other of any
notice of non-compliance with any Applicable Laws applicable to Product or the
Packaging of Product, received from any Official Body, and of any request for or
initiation of any inspection of any facility of either CytoDyn or American
Regent, or any Affiliate of CytoDyn or American Regent.

5.2 Product Recall.

(a) CytoDyn shall be responsible, at its sole expense, for serialization of the
Product. American Regent, at its sole expense, will maintain or cause to be
maintained such records of its sales of the Product, as are necessary to permit
a recall, market withdrawal or field correction of a Product including any
inventory withdrawal in connection with any of the foregoing (each a “Recall”).

(b) Each Party shall promptly (but in any case, not later than twenty-four
(24) hours of receipt) notify the other Party in writing of any information
which indicates a Recall of any Product may be necessary, any safety or
regulatory concerns, or any order, request or directive of a court or the FDA
requesting or requiring a Recall.

(c) To the extent permitted by circumstances, the Parties will confer before
initiating any Recall. If the Parties do not agree on the need for or the extent
of such a Recall, either Party may authorize the Recall.

 

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(d) With respect to Recalls agreed on by both Parties, American Regent shall
manage, in accordance with CytoDyn’s oversight and direction, the carrying out
of such Recalls of Product sold by it in accordance with Applicable Laws. In the
event CytoDyn materially impedes American Regent’s efforts to Recall the
Product, American Regent shall have the right to terminate this Agreement with
[***] written notice to CytoDyn.

(e) If any Recall is required primarily and substantially because of failure of
a Product to conform to the Specifications already existing at the time title is
transferred to American Regent or as a result of a material breach of CytoDyn’s
obligations, as confirmed by a mutually acceptable Third Party laboratory,
including a Latent Defect that is shown to have existed at the time of such
title transfer, CytoDyn will be responsible for only the direct costs of such
Recall (including reimbursement to American Regent and its Affiliates for their
direct, out-of-pocket costs and expenses incurred during such Recall). In such
event, CytoDyn shall supply to American Regent free of cost and expense
replacement Product for any removed Product.

(f) If any Recall is required primarily or substantially because of failure of a
Product to conform to the Specifications after title is transferred to American
Regent or in circumstances caused by the negligence, mistake, fault, error or
omission of American Regent, its Affiliates or subcontractors, including any
breach by American Regent of a representation, warranty or covenant hereunder,
American Regent will be responsible for the direct costs of such Recall
(including reimbursement to CytoDyn and its Affiliates for all of their direct
out-of-pocket costs and expenses incurred during such Recall) and the Transfer
Price of all Products removed from American Regent’s inventory.

(g) If any Recall is required under circumstances not covered in Section 5.2(e)
or (f) above, the Parties will equally share the direct costs of such Recall,
including direct out-of-pocket costs and expenses related to such Recall.

(h) Without limiting the foregoing, each Party will cooperate fully with the
other Party in connection with any Recall efforts.

 

6.

PURCHASE PRICE AND SUPPLY OF PRODUCT

6.1 Supply of Product.

(a) CytoDyn will be responsible for the Manufacture of the Product. American
Regent shall purchase from CytoDyn all of American Regent’s requirements for the
Product in the Territory during the Term, pursuant to Firm Orders submitted by
American Regent to CytoDyn from time to time in accordance with Section 6.2.

(b) CytoDyn shall supply all Product to American Regent for distribution in the
Territory in the Field during the Term in full and on time, and in accordance
with the terms and conditions of this Agreement.

(c) The terms and conditions of this Agreement shall control the Manufacture and
supply of Product by CytoDyn to American Regent, and no terms or conditions
contained in any purchase order, acknowledgment, invoice, bill of lading,
acceptance or other pre-printed form issued by any Party shall have any force or
effect to the extent they are inconsistent with or modify the terms and
conditions of this Agreement.

 

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6.2 Forecasts, Orders.

(a) Initial Firm Orders. Within [***] after FDA approval of the BLA for a
Product, American Regent shall deliver to CytoDyn its initial six (6)-month
order for delivery of the Product. Within [***] of CytoDyn’s receipt of the
initial order, CytoDyn shall notify American Regent whether it accepts or
rejects such initial order (in its discretion) and the applicable Transfer Price
and, in case of rejection, CytoDyn shall notify American Regent of the
quantities of a Product that CytoDyn can accept for such initial order and the
applicable Transfer Price. Once CytoDyn accepts the initial order, such initial
order shall be construed as the “Initial Firm Order.”

(b) No Forecasts. American Regent shall not be required to provide forecasts for
the supply of the Product in the Field. It shall purchase Product by providing
Purchase Orders. Notwithstanding the foregoing, the Parties shall meet and
confer at least once every calendar month to discuss the business issues
generally related to the supply and Marketing of the Product (including
anticipated demand and supply of Products).

(c) Firm Orders. American Regent shall place orders for a Product in writing
(each a “Purchase Order”) and CytoDyn shall, within ten (10) Business Days of
receipt of a Purchase Order, confirm in writing whether a given Purchase Order
has been accepted and the Transfer Price applicable to such Purchase Order.
CytoDyn shall use Commercially Reasonable Efforts to accept all Purchase Orders
which are provided to CytoDyn in accordance with the terms and conditions of
this Agreement. All accepted Purchase Orders are Firm Orders.

(d) Delivery Against Firm Orders. Delivery on each Firm Order, including the
Initial Firm Order, will take place [***] after CytoDyn has provided written
notice to American Regent that such Firm Order has been accepted. CytoDyn shall
deliver against each such Firm Order in accordance with this Section 6.2
(including with respect to the delivery dates and quantities set forth therein);
provided that notwithstanding anything to the contrary contained herein
(a) CytoDyn shall have satisfied its obligations with respect to delivery date
if the actual delivery date is [***] of the desired delivery date set forth in
the applicable Firm Order (or such other date as agreed to by the Parties), and
(b) CytoDyn shall have satisfied its obligations with respect to quantity of
Product if the actual quantity of Product Manufactured and supplied is within
plus or minus [***] of the quantity of Product set forth in the applicable Firm
Order.

(e) Terms and Conditions of Firm Orders. Each Firm Order shall be in the form
acceptable to CytoDyn and shall specify (a) the quantities and format (if
applicable) of Product ordered, (b) shipping instructions and destination(s),
and (c) the requested date of delivery (provided that there shall be no more
than one (1) delivery date in any thirty one (31)-day period and the delivery
date is consistent with the provisions of Section 6.2(g) herein). Firm Orders
shall not be made in any other form of document other than that prescribed by
this Agreement unless the Parties mutually agree otherwise in writing. Any term
or condition of a Firm Order that is different from or contrary to the terms and
conditions of this Agreement shall be void. Except as

 

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contemplated herein, all Firm Orders shall be non-cancelable by either Party and
American Regent shall be obligated to pay the Transfer Price for the Product
supplied to American Regent. CytoDyn agrees to use its commercially reasonable
efforts to comply with unplanned changes in Firm Orders.

(f) Maximum Capacity. Subject to a schedule to be agreed upon by the Parties at
the time of the Initial Firm Order, CytoDyn will use Commercially Reasonable
Efforts to supply the Product in accordance with its current manufacturing
capacity and operational strategy and it shall be entitled to reject any portion
of a Firm Order that CytoDyn believes will exceed its anticipated maximum
capacity for a given calendar year set forth in the applicable schedule (when
aggregated with all prior Firm Orders previously submitted for such calendar
year).

6.3 Continuity of Supply. If CytoDyn is unable to supply any Product to American
Regent pursuant to Section 6.2 for thirty (30) days or more after the
anticipated date of delivery specified in a Firm Order, to the location
specified therein, or if CytoDyn is unable to deliver on a timely basis at least
[***] of the amount covered by Firm Orders issued by American Regent pursuant to
Section 6.2(d) for [***] or more consecutive orders, (whether as a result of
cGMP issues, a Force Majeure event, failure to meet quality standards, or
otherwise) (individually or collectively a “Supply Interruption”), then at any
time such Supply Interruption is continuing and CytoDyn holds less than one week
of any dosage of saleable Product inventory, American Regent may declare a
Supply Interruption by providing CytoDyn with a notice that a Supply
Interruption has occurred. In the event that circumstances arise that may give
rise to a potential Supply Interruption, the Parties will work collaboratively
in good faith to avoid a Supply Interruption and in such connection CytoDyn
agrees to use Commercially Reasonable Efforts to provide American Regent with
the same or greater percentage of Product for its Firm Orders, as the percentage
of Product it provides to any other distributor of Product outside the Territory
with respect to its Firm Orders. If there is no resolution of this matter,
American Regent’s sole remedy shall be to terminate this Agreement.

6.4 Packaging Configuration. American Regent shall sell the Product with
CytoDyn’s labeling and packaging, bearing American Regent’s NDC Number, and
clearly identifying American Regent solely as the distributor of the Product.
[***] after receiving FDA approval of its own labeling and packaging for the
Product, CytoDyn shall supply American Regent with copies of CytoDyn’s approved
labeling and packaging for the Product. CytoDyn’s labeling and packaging shall
identify CytoDyn’s manufacturer of the Product. [***] after American Regent’s
receipt of such labeling, American Regent shall provide to CytoDyn proposed
camera ready artwork for the labeling and packaging for the Product American
Regent will sell, which shall be consistent with the labeling and packaging of
the Product provided by CytoDyn, with the addition of the American Regent’s NDC
Number obtained pursuant to Section 3.3. The American Regent labeling and
packaging for the Product shall be subject to the prior approval of CytoDyn,
which approval shall not be unreasonably withheld or delayed. CytoDyn shall only
be obligated to supply to American Regent the Product in mutually agreed upon
packaging configurations, including, but not limited to pallet level aggregation
for serialization. Any changes to the packaging and labeling of Product
requested by American Regent shall require the prior written consent of CytoDyn,
which approval shall not be unreasonably withheld or delayed. If CytoDyn
consents to such changes, such changes shall be effected at American Regent’s
sole cost and expense.

 

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6.5 Serialization.

(a) Connectivity. CytoDyn and American Regent connectivity between American
Regent’s and CytoDyn’s L4 (vendor supported) systems is required to be
established and validated prior to the first production lot of Product for sale
by American Regent. This connectivity testing confirms that the EPCIS
(Electronic Product Code Information Services) file containing the lot
information can be successfully transferred from American Regent to CytoDyn.
American Regent uses IRIS as its L4 system. Any updates made to the AS2 (a
specification about how to transport structured business-to-business data
securely and reliably over the Internet) need to be communicated directly to
either Party. Using its L4, CytoDyn will generate and provide the serial numbers
for the smallest unit of sale and aggregate the Serialized Shipping Container
Codes (SSCCs) and pallet to American Regent’s L4.

(b) Lot Numbering/Expiration Dates. CytoDyn shall make arrangements for and
implement the imprinting of lot numbers and expiration dates on the packaging of
Product shipped. Such lot numbers and expiration dates shall be affixed on the
Product packaging and on the shipping carton of Product as is required by cGMPs
and consistent with the Specifications. Electronic on-line verification of the
lot number, expiration date, and serialization will be performed by CytoDyn.

(c) Product Identifier and Serial Numbering. If required by Applicable Law,
CytoDyn shall make arrangements for the imprinting of the product identifier,
i.e., global trade identification number (GTIN) and serial number on the
packaging of each Product shipped. Such product identifier and serial number
shall be affixed on the Product packaging and on the shipping carton of each
Product as required by cGMPs and consistent with the Specifications. Electronic
on-line verification of the product identifier and serial number will be
performed by CytoDyn.

(d) Data Carrier Printing and Encoding. If required by Applicable Law, CytoDyn
shall make arrangements for the imprinting of the data carrier, i.e., 2D data
matrix or barcode, on the packaging of Product shipped. Such data carrier shall
encode the lot number, expiration date, Product identifier and serial number.
Such data carriers shall be affixed on the Product packaging and on the shipping
carton of each Product as required by cGMPs and consistent with the
Specifications. Electronic verification of the data carrier will be performed by
CytoDyn.

6.6 Method of Delivery of Product. Product shall be shipped and delivered DDP to
American Regent’s facility in Shirley, NY and/or New Albany, OH (Incoterms®
2010).). American Regent shall advise CytoDyn in writing at least fifteen (15)
days in advance of the scheduled shipping date specified in the applicable Firm
Order of the carrier to be used to ship Product to American Regent. CytoDyn
shall cause such carrier to comply with all Applicable Laws, and the Product
storage and shipping requirements, for the shipment of Product. CytoDyn shall
determine the appropriate carrier if CytoDyn receives no direction from American
Regent at least fifteen (15) days in advance of the scheduled shipping date
specified in the applicable Firm Order to use a particular carrier. CytoDyn
shall be responsible for providing temperature-controlled transport for the
Product, along with verifiable data through temperature tails to support that
the Product was not exposed to excursions during transport. Title and risk of
loss to Product shall pass to American Regent immediately upon such delivery.

 

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6.7 Acceptance, Rejection and Revocation of Acceptance.

(a) CytoDyn shall be responsible for Product test procedures for quality
assurance, including Product storage and shipping requirements, before Product
is released to American Regent. CytoDyn shall provide a certificate of analysis
and other documents (collectively, the “COA”) as set forth in the Quality
Agreement, in such forms as the Parties shall agree upon, for any Product batch
delivered to American Regent hereunder certifying that such Product have been
Manufactured, Packaged and shipped in compliance with the Specifications, cGMPs
and all other applicable Regulatory Requirements and with an expiry date of not
less than twelve (12) months from the date of shipment.

(b) American Regent shall inspect or shall cause to be inspected all shipments
of Product promptly upon receipt. American Regent may reject any Product which
does not conform to the Specifications, or the shipping and storage requirements
for the Product, at the time of receipt at American Regent’s location. American
Regent shall make any such rejection in writing, within ten (10) days of the
later of the receipt of the COA or the Product at the facility designated by
American Regent in the applicable Firm Order (the “Stipulated Rejection
Period”), to CytoDyn, and shall indicate the reasons for such rejection (the
“Rejection Notice”).

(c) If American Regent has not delivered a Rejection Notice within the
Stipulated Rejection Period, American Regent shall be deemed to have accepted
that shipment of Product. Once American Regent has accepted or has been deemed
to have accepted a shipment of Product, and except with respect to Latent
Defects discovered by American Regent or American Regent’s customers after the
expiration of the Stipulated Rejection Period, American Regent may not exercise
any rights to subsequently reject such shipment under this Section 6.7.

6.8 Rejection Procedures.

(a) After CytoDyn receives the Rejection Notice, it will evaluate process issues
and the reasons given by American Regent for the rejection. CytoDyn shall use
Commercially Reasonable Efforts to promptly notify American Regent whether it
agrees with the basis for American Regent’s rejection, but in no event shall
such notice be given later than thirty (30) days of CytoDyn’s receipt of a
Rejection Notice. If CytoDyn does not so notify American Regent within thirty
(30) days of receipt of the Rejection Notice as to whether it agrees with the
basis of American Regent’s rejection, CytoDyn shall be deemed to be in agreement
therewith.

(b) If CytoDyn agrees with or is deemed to agree with the basis for American
Regent’s rejection, CytoDyn shall use Commercially Reasonable Efforts to
promptly replace, at no cost to American Regent, such rejected Product.

(c) If CytoDyn disagrees with the basis for American Regent’s rejection
specified in the Rejection Notice: (i) CytoDyn shall use Commercially Reasonable
Efforts to promptly replace such rejected Product; (ii) no payment shall be due
with respect to the replacement Product until it is determined which Party shall
bear the burden of such cost hereunder; and (iii) the Parties shall submit
samples of the rejected Product to a mutually acceptable Third Party laboratory,
which shall determine whether such Product meets the

 

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Specifications and, as part of this process, may also carry out a full
investigation of the Manufacturing process for such Product if the Third Party
laboratory reasonably believes such an investigation is necessary to resolve the
disagreement. The Parties agree that the determination of the Third-Party
laboratory, after it has assessed the retention samples and following any full
investigation of the Manufacturing process it conducts, shall be final and
determinative. If the Third-Party laboratory determines that the retained
samples meet the Specifications, the rejection by American Regent is
unjustified, and American Regent shall promptly pay CytoDyn for any replacement
Product and, if the Product can no longer be distributed, Transfer Price on the
rejected Product. If the Third-Party laboratory determines that the relevant
shipment of Product does not meet the Specifications, CytoDyn shall not invoice
American Regent for the replacement Product. The Party against whom the
Third-Party laboratory rules shall also bear the fees charged by the Third Party
laboratory in connection with resolution of the disagreement, including all
out-of-pocket costs of investigating the Manufacturing process.

(d) At CytoDyn’s election and upon authorization from CytoDyn, American Regent
shall destroy the rejected Product promptly and provide CytoDyn with
certification of such destruction unless CytoDyn elects to have the Product
returned, in which event American Regent shall cooperate in arranging such
return. The party against who the Third-Party laboratory rules shall pay the
cost of destroying or returning the Product.

(e) Notwithstanding any of the other provisions in this Agreement and without
limiting any other provision herein, American Regent agrees that the remedies
set forth in this Section 6.8 are American Regent’s sole and exclusive remedies
with respect to the rejection of Product.

6.9 Prices and Payments.

(a) Transfer Price. The price payable by American Regent (the “Transfer Price”)
for all Product delivered hereunder shall be [***].    The Transfer Price shall
be paid to Cytodyn by American Regent at the time American Regent pays the [***]
owed to CytoDyn with respect to such calendar quarter.

(b) Adjustment to Transfer Price. CytoDyn shall use commercially reasonable
efforts to reduce its Manufacturing expenses for the Product. CytoDyn shall
conduct annual review on the costs of all materials and API required to
Manufacture the Product. In the event that the cost of materials decreases by
more than [***], CytoDyn shall reduce the Transfer Price accordingly. In the
event there is a change in the Manufacturing requirements applicable to the
Manufacture of the Product pursuant to this Agreement or an increase in
CytoDyn’s cost structure for the Manufacture of the Product (including with
respect to any materials used to Manufacture the Product) of more than [***],
CytoDyn shall promptly notify American Regent and the Transfer Price shall be
adjusted by CytoDyn to reflect such increase.

(c) American Regent shall be responsible for the payment of any duties, levies
or Taxes applied to the sale of Product in the Territory by any relevant Tax
authority.

 

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(d) Any payments to be made hereunder and which have not been made by the due
date, shall accrue interest at any rate equal to the lower of (a) a floating
annual rate of [***] above the commercial prime rate as published in the Wall
Street Journal on the first Monday of each month, or (b) the highest rate
permitted by law; provided that payments of such interest shall not constitute a
remedy to a material breach for purposes of terminating this Agreement under
Section 9.2. Additionally, American Regent shall be responsible for all
reasonable attorneys’ fees, witness fees and court costs and other costs
incurred by CytoDyn to recover amounts owing to it hereunder.

(e) American Regent shall make all payments contemplated by this Agreement in
U.S. Dollars and to such address as CytoDyn may from time to time direct in
writing to American Regent.

6.10 Net Profit Split. American Regent shall pay CytoDyn an amount equal to
[***] of the Net Profits from American Regent’s sales of the Product for each
calendar quarter during the Term, and any selloff period under Section 9.4 after
the Term.    To the extent the Net Profit is negative in any particular calendar
quarter or quarters, American Regent shall be entitled to accrue and set off
such shortfall against any positive Net Profit generated in any subsequent
calendar quarter or quarters. Each Party shall have the right to terminate this
agreement with thirty (30) days written notice in the event that the Net Profit
for American Regent’s sales of the Product are negative for two (2) or more
consecutive calendar quarters.

6.11 Reporting and Payment.

(a) Not later than thirty (30) days after the end of each calendar quarter,
through and including the calendar quarter in which all rebate and chargeback
amounts on Product sold during the Term and any applicable selloff period under
Section 9.4 are finally reconciled, American Regent shall:

(i) deliver to CytoDyn a written report that specifies in detail the breakdown
of individual components of the Net Sales that were used to calculate the Net
Profit with respect to such calendar quarter, as well as the Net Profit
calculation; and

(ii) pay to CytoDyn the Net Profit split amount owed to CytoDyn with respect to
such calendar quarter.

(b) Prior to May 21 every year during the Term, American Regent will use good
faith efforts to provide CytoDyn with American Regent’s actual and estimated
forecasted sales of Product, and estimated Net Profit through to May 31, for
CytoDyn’s use for its end of year reporting requirements.

6.12 Audit. American Regent shall keep and retain complete and accurate records
pertaining to the disposition of the Product and amounts payable under this
Agreement for each calendar year or part thereof during the Term in sufficient
detail to permit CytoDyn to confirm the accuracy of all payments made or due
hereunder for a period of three (3) years following the applicable calendar year
or part thereof. CytoDyn shall have the right to appoint an independent

 

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internationally recognized audit firm, reasonably acceptable to American Regent,
to audit the books of account of American Regent in order to determine whether
American Regent has properly reported and accounted for any fees or payments due
to CytoDyn pursuant to this Agreement. The appointed audit firm may perform
audits during regular business hours, not more than once in any calendar year
during the Term and upon reasonable prior notice to American Regent. CytoDyn
shall bear the audit fees, unless such Third Party auditor determines that the
amount actually due CytoDyn, in the aggregate, exceeds the amounts paid or
deemed paid by American Regent hereunder by the lower of [***] or [***], in
which case American Regent shall bear the audit fees. American Regent shall
forthwith pay any amounts discovered to be due pursuant to an audit together
with interest from the date payment was originally due at a rate equal to the
lower of (a) a floating annual rate of [***] above the commercial prime rate as
published in the Wall Street Journal on the first Monday of every month
calculated monthly or (b) the highest rate permitted by law. The results of the
audit shall be final and binding upon the Parties.

6.13 Facility Audits.

(a) American Regent and/or its nominee shall have the right to conduct an audit
of any manufacturing site at which the Product is being Manufactured during
business hours upon ten (10) Business Days prior written notice to CytoDyn not
more than once per calendar year during the Term of this Agreement, unless
either Party, the FDA or any Third Party raises any questions about the quality
of a Product which could have a material detrimental effect on the sales or use
of a Product, in which case American Regent’s audit right shall not be subject
to the foregoing limitation until the specific issue in question has been
resolved, and CytoDyn shall promptly supply to American Regent all data and
results relating to all Testing performed in connection with the issue in
question. CytoDyn shall be responsible for its own costs, and those of its
contract manufacturers, for a first audit by American Regent hereunder. American
Regent shall bear the fees and costs of any subsequent audit, including the fees
and costs payable by CytoDyn to any Third-Party subcontractor that Manufactures
the Product.

(b) CytoDyn and/or its nominee shall have the right to conduct an audit of the
facilities and records of American Regent relating to the Marketing, Testing,
and storage of the Product and of any correspondence between American Regent and
the FDA related to the Product or such facilities, during business hours upon
reasonable prior written notice to American Regent not more than once per any
twenty-four month period during the Term of this Agreement, unless any Official
Body reasonably believes that American Regent may be in material breach of its
obligations under Article 3 or Section 4.4 or Applicable Laws governing the
Marketing of Product that could have a material detrimental effect on the sales
or use of the Product, in which case CytoDyn’s audit right shall not be subject
to the foregoing limitation until the specific issue or question has been
resolved, and American Regent shall promptly supply to CytoDyn all data and
results relating to all Testing performed by American Regent on the Product.

 

7.

INTELLECTUAL PROPERTY

7.1 Ownership of CytoDyn Intellectual Property. CytoDyn shall retain all of its
rights, title and interest in and to all Product Technology, copyrights, and all
other industrial and Intellectual Property embodied in or which covers the
Product, in each case which is owned, held,

 

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or licensed by it as of the Effective Date or thereafter or developed, created
or discovered by it or on its behalf during the Term, subject to the rights
granted in this Agreement. Except as otherwise expressly provided in this
Agreement, American Regent has and shall have no right, title or interest in any
Intellectual Property owned by or licensed by CytoDyn relating to the Product
including the Product Technology.

7.2 Ownership of American Regent Intellectual Property. American Regent shall
retain all of its right, title and interest in and to any Intellectual Property
owned by American Regent. For clarification purposes, the Parties agree that
nothing herein grants, or constitutes an agreement or obligation to grant, to
CytoDyn, or any of their Affiliates or other Third Party any right, title or
interest in, to or under any Intellectual Property owned by American Regent.

7.3 Notice of Patent Infringement.

(a) Information Concerning Infringement. If either Party shall learn of (i) any
claim or assertion that the Manufacture, Marketing, Packaging or Testing of a
Product, or the use of the Product Technology or other Intellectual Property
related to a Product infringes, misappropriates or otherwise violates the
Intellectual Property rights of any Third Party, or (ii) the actual or
threatened infringement, misappropriation or other violation by any Third Party
of the Product Technology or other Intellectual Property related to a Product,
then the Party becoming so informed shall as soon as reasonably practicable, but
in all events within fifteen (15) Business Days thereof, notify the other Party
of such claim or assertion, or actual or threatened infringement,
misappropriation or other violation.

(b) Potential Infringement. In the event either CytoDyn or American Regent
learns of any Third-Party patents which may cover the Manufacturing, Marketing,
Testing or Packaging of a Product in the Territory, such Party will promptly
notify the other Party. The Parties agree to confer in good faith regarding such
potential infringement risk and to explore reasonable alternatives for avoiding
such risk and to provide such information to each other as either Party may
reasonably request.

7.4 Infringement of Product Technology by a Third Party. In the event that any
Party becomes aware of any Person infringing or potentially infringing the
Product Technology, whether by direct or indirect infringement, or by
misappropriation of Product Technology, it shall promptly notify the other
Party. CytoDyn shall notify American Regent within thirty (30) days of such
notice, whether CytoDyn wishes to commence, at its own expense, an infringement
action against any Person infringing or allegedly infringing the Product
Technology, including actions for direct or contributory infringement or
misappropriation of Product Technology. American Regent shall cooperate with
CytoDyn as reasonably requested, at CytoDyn’s expense. Any and all amounts
recovered with respect to such an action shall be retained by CytoDyn.

 

8.

CONFIDENTIALITY

8.1 CytoDyn’s Information. Except as provided in Section 8.3 or elsewhere in
this Agreement, American Regent shall maintain all Confidential Information
provided by CytoDyn to American Regent, whether in writing, electronically,
orally or through access to CytoDyn’s

 

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premises, in strict confidence. Such information shall remain the property of
CytoDyn, and American Regent shall not use the same for or on behalf of any
Person or entity other than CytoDyn or make use of any such information except
as permitted by this Agreement without the express prior written approval of
CytoDyn.

8.2 American Regent’s Information. Except as provided in Section 8.3 or
elsewhere in this Agreement, CytoDyn shall maintain all Confidential Information
provided by American Regent to CytoDyn, whether in writing, electronically,
orally or through access to American Regent’s premises, in strict confidence.
Such information shall remain the property of American Regent, and CytoDyn shall
not make use of any such information except as permitted by this Agreement
without the express prior written approval of American Regent.

8.3 Exceptions. The covenants of the receiving Party contained in Section 8.1
and Section 8.2 shall not apply to Confidential Information (a) that the
receiving Party can reasonably demonstrate by competent proof is required to be
disclosed by Applicable Law or a court or other Official Body pursuant to
(i) regulatory filings; (ii) prosecuting or defending litigation; or
(iii) complying with Applicable Law and orders or decisions of any Official Body
having jurisdiction; or (b) disclosed to Affiliates who agree to be bound by
similar terms of confidentiality. Notwithstanding any provision herein to the
contrary, nothing herein shall prevent or prohibit any disclosure of any
information concerning this Agreement (A) required under Applicable Laws and the
rules and regulations of any stock exchange or market system on which any
Party’s securities are or may be traded, (B) by either Party in connection with
an Approved Transaction (as defined below), where prospective parties or the
other party or parties to such Approved Transaction have entered into
confidentiality agreements with the Party concerning such Confidential
Information, (C) to either Party’s financial advisors or legal advisors who have
agreed to the limitations on disclosure contained herein and/or (D) to
investment bankers and/or financing sources in connection with bona fide
financing transactions involving either Party or an Affiliate. For the purposes
of this Agreement, each of the following shall constitute an “Approved
Transaction”: (i) the issuance by either Party of securities in connection with
any financing transaction or public offering, and/or (ii) a merger,
consolidation or other similar transaction involving either Party (i.e., wherein
another entity acquires all or substantially all of that Party’s equity
interests or assets or a merger or consolidation or similar transaction wherein
securities of the post transaction entity will be issued to the other party). If
a Party is required or permitted to make a disclosure of the other Party’s
Confidential Information pursuant to this Section 8.3, it will use Commercially
Reasonable Efforts to (I) limit the scope of the Confidential Information
disclosed and the number of persons to whom such Confidential Information is
disclosed, in each case to the minimum extent required to address the reason
such disclosure is permitted hereunder and (II) secure confidential treatment of
such Confidential Information and comply with any applicable provisions of
Section 12.7.

8.4 Survival. This Article 8 shall survive termination of this Agreement for a
period of five (5) years.

 

9.

TERM AND TERMINATION OF AGREEMENT

9.1 Term. The term of this Agreement shall commence on the Effective Date and
continue for three (3) years from the date of the First Commercial Sale (the
“Initial Term”). The

 

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Parties may mutually agree in writing to renew the Agreement for one additional
one (1) year period (the “Renewal Term”, if applicable, and together with the
Initial Term, subject to early termination pursuant to Section 9.2 the “Term”)
provided that if American Regent does not wish to renew it must provide CytoDyn
at least six (6) months written notice to CytoDyn prior to the expiry of the
Initial Term.

9.2 Termination.

(a) Material Breach. A Party shall have the right to terminate this Agreement
upon prior written notice to the other Party for material breach of this
Agreement by the other Party (which includes any failure by American Regent to
pay amounts when due to CytoDyn in accordance with the terms of this Agreement).
Any notice of material breach shall specify the breach in reasonable detail.
Unless otherwise provided in this Agreement, the termination shall be effective
thirty (30) days after receipt of the written notice, unless the breaching Party
cures the breach within that thirty (30) day notice period, or, if such breach
is incapable of cure within such thirty (30) day period, the breaching Party has
commenced good faith efforts to cure such breach within such thirty (30) day
period and cures such breach within three (3) months after the receipt of the
notice of material breach.

(b) Termination by CytoDyn. After the First Commercial Sale occurs, CytoDyn
shall have the right to terminate this Agreement at any time in its sole
discretion by giving six (6) months advance written notice to American Regent.

(c) Termination by American Regent. Notwithstanding anything contained herein to
the contrary, American Regent shall have the right to terminate this Agreement:

(i) upon six (6) months advance written notice to CytoDyn (a) if, following due
diligence and/or a quality inspection of the manufacturing facility associated
with the Product, it determines that the distribution of the Product by American
Regent should not be pursued, subject to the cure provisions of Section 9.2(a)
above, or (b) if there is an unresolved Supply Interruption pursuant to
Section 6.4.

(ii) immediately upon written notice to CytoDyn if (a) pursuant to Section 3.3,
American Regent determines there is an unacceptable risk of using American
Regent’s NDC Number on the Product labeling, (b) if both the mutually agreed
Quality Agreement and the Safety Data Exchange Agreement have not been executed
by the Parties within forty five (45) days of the Effective Date, (c) any patent
or trade secret infringement alleged by a Third Party (except any company in the
Daiichi Sankyo family of companies) against American Regent resulting from
American Regent’s Marketing of the Product survives motion to dismiss or has not
been resolved six (6) months after American Regent first receives written notice
of the alleged infringement, (d) any regulatory authority in the Territory
requires the cessation of sale or distribution of the Product, (e) pursuant to
Section 5.2(d), or (f) there is a negative Net Profit for the Product for two
(2) consecutive calendar quarters pursuant to Section 6.10.

(d) Bankruptcy and Insolvency. A Party shall have the right to terminate this
Agreement in the event that a court of competent jurisdiction declares the other
Party insolvent or

 

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bankrupt, or a bankruptcy proceeding is commenced against the other Party or the
other Party files a proposal, assignment for the benefit of creditors,
arrangement, composition or seeks similar relief under any Applicable Law or the
other Party is in receivership, in which case termination shall be effective
upon written notice to that effect.

(e) Termination Due to Change of Control. In the event of a Change of Control of
American Regent (or American Regent’s controlling Affiliate) during the Term,
American Regent shall deliver a written notice of such Change of Control to
CytoDyn within thirty (30) days of the Change of Control event. At any time
within ninety (90) days after the earlier of CytoDyn’s receipt of the notice of
such Change of Control, or the date CytoDyn otherwise becomes aware of such
Change of Control, CytoDyn may terminate this Agreement upon ninety (90) days
written notice to American Regent.

9.3 Accrued Rights, Surviving Obligations. Termination or expiration of this
Agreement shall not affect any accrued rights of either Party or payments
otherwise owing. Without limiting the foregoing, the terms of Sections 3.4, 4.3,
4.5, 6.11, 6.12, 9.3, 9.4, 9.5; Article 1 (to the extent needed to interpret any
surviving Articles or Sections) and Articles 5, 7, 8, 10, 11, and 12 shall
survive termination or expiration of this Agreement.

9.4 Transitional Matters.

(a) Upon expiration or termination of this Agreement, at CytoDyn’s option,
either (a) all Firm Orders previously submitted by American Regent prior to the
effective date of termination or expiration shall be cancelled, or (b) all Firm
Orders previously submitted by American Regent prior to the effective date of
termination or expiration shall remain in effect, and CytoDyn shall supply
Product, and American Regent shall purchase such Product under such Firm Orders,
in accordance with the terms of this Agreement; provided, however, that to the
extent CytoDyn elects to continue to fill such Firm Orders, American Regent
shall be required to pre-pay the [***] for all such Product (which payment shall
be made within [***] after American Regent’s receipt of notice of CytoDyn’s
election to fill such Firm Orders).

(b) Upon expiration or termination of the Agreement, American Regent may, where
permitted by Applicable Law, sell Product then in its inventory for a period of
[***] thereafter, which [***] period may be extended for up to an additional
[***] months but only to the extent CytoDyn has not granted a Third Party an
exclusive distribution right to such Product in the Territory, all in accordance
with the terms of this Agreement. Promptly after the expiration of the periods
set forth in the previous sentence, American Regent will, at its cost, destroy
any unsold Product remaining in its inventory and will provide appropriate
evidence of such destruction to CytoDyn or, at CytoDyn’s request, return the
inventory to CytoDyn at CytoDyn’s cost and provided CytoDyn pays American Regent
the Transfer Price with respect to such inventory. In addition, all information
and materials relating to Product, will, at CytoDyn’s request, promptly be
delivered to CytoDyn, at CytoDyn’s cost of delivery, CytoDyn will have the right
to cancel any Firm Orders placed by American Regent which were accepted by
CytoDyn prior to such termination, and which require delivery of Product after
the date of termination.

 

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(c) Upon termination, American Regent and CytoDyn shall at their own expense use
Commercially Reasonable Efforts to ensure that the continuity of patient care is
not disrupted. In addition, American Regent will remain responsible for returned
Product Marketed by American Regent during the Term and the sell-off period
specified under Section 9.4(b), and CytoDyn will be responsible for returned
Product not Marketed by American Regent. For the purpose of identifying the
responsible party, Product will be tracked via lot numbers.

9.5 Effect of Termination. Upon any termination of this Agreement, except to the
extent required for the purposes of Section 9.4, (i) all licenses and rights
granted to American Regent hereunder shall immediately terminate and (ii) all
rights, properties and interests granted by CytoDyn to American Regent shall
immediately revert to and become fully vested in CytoDyn and American Regent
shall return to CytoDyn all copies of documents regarding a Product and all
Confidential Information supplied by CytoDyn.

 

10.

INDEMNITY

10.1 Indemnification by CytoDyn. CytoDyn agrees to and hereby does indemnify,
defend and hold the American Regent Indemnitees harmless from and against all
losses, claims, damages, costs and expenses, including reasonable attorneys’
fees (including, without limitation, those resulting from a Third Party claims,
actions, or proceedings) (collectively “Losses”) to the extent arising from:
(a) the breach of any representation, warranty, covenant or obligation hereunder
by CytoDyn or its Affiliates, (b) any negligent act or omission, or willful
misconduct by CytoDyn or its Affiliates; (c) the failure of a Product sold to
American Regent to conform to the Specifications (whether the failure is patent
or latent) or any Product Liability Claims, in each case because of conditions
existing at the time title of such Product is transferred to American Regent,
(d) any claims of infringement or misappropriation of any Third Party’s patent
or trade secret rights.

10.2 Indemnification by American Regent. American Regent agrees to and hereby
does indemnify and hold the CytoDyn Indemnitees harmless from and against all
Losses arising from claims of negligent distribution of Product by American
Regent or any of its agents.

10.3 Procedure. This Section 10.3 describes the procedure for indemnification of
Losses for the Third-Party claims. With respect to Losses relating to the claim
of a Party hereto, the procedures provided in Article 10 shall govern. The Party
seeking indemnification for third party claims under Sections 10.1 or 10.2 (the
“Indemnified Party”) shall promptly notify the other Party (the “Indemnifying
Party”) in writing of all matters which may give rise to the right to
indemnification hereunder; provided, however, that failure to promptly give the
notice provided in this Section 10.3 shall not be a defense to the liability of
the Indemnifying Party for such claim, but the Indemnifying Party may recover
any actual Losses arising from the Indemnified Party’s failure to give such
prompt notice. The Indemnified Party shall not admit any liability with respect
to, or settle, compromise or discharge any such matter covered by this
Article 10 without the Indemnifying Party’s prior written consent (which shall
not be unreasonably withheld). The Indemnifying Party shall have the right, with
the consent of the Indemnified Party (which shall not be unreasonably withheld),
to settle all indemnifiable matters under this Article 10 related to claims by
Third Parties. In connection with any claim giving rise to indemnity under this
Article 10 resulting from or arising out of any claim or legal proceeding by a
Person other than the Indemnified

 

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Party, the Indemnifying Party at its sole cost and expense may, upon written
notice to the Indemnified Party and an acknowledgement of its indemnity
obligations hereunder, assume the defense of any such claim or legal proceeding.
If the Indemnifying Party assumes the defense of any such claim or legal
proceeding, the Indemnifying Party shall select counsel reasonably acceptable to
the Indemnified Party to conduct the defense of such claims or legal proceedings
and, at the Indemnifying Party’s sole cost and expense (which costs and expenses
shall not be applied against any indemnity limitation herein), shall take all
steps necessary in the defense or settlement thereof. The Indemnified Party
shall be entitled to participate in (but not control) the defense of any such
action, with its own counsel and at its own expense, and shall be entitled to
any and all information and documentation relating thereto. If the Indemnifying
Party does not assume (or continue to diligently and competently prosecute) the
defense of any such claim or litigation resulting therefrom in accordance with
the terms hereof, the Indemnified Party may, at the Indemnifying Party’s
expense, defend against such claim or litigation in such manner as it may deem
appropriate, but may not settle such claim or litigation without the consent of
the Indemnifying Party, which consent shall not be unreasonably withheld. The
Indemnified Party will cooperate reasonably with the Indemnifying Party in its
efforts to conduct or resolve such matters, including by making available to the
Indemnifying Party relevant documents and witnesses. The Indemnified Party and
the Indemnifying Party shall keep each other informed of all settlement
negotiations with Third Parties and of the progress of any litigation with Third
Parties. The Indemnified Party and the Indemnifying Party shall permit each
other reasonable access to books and records and shall otherwise cooperate with
all reasonable requests of each other in connection with any indemnifiable
matter resulting from a claim by a Third Party.

10.4 Indemnification Not Sole Remedy. Each Party hereby acknowledges that the
indemnification provided under this Article 10 shall in no manner limit,
restrict or prohibit (unless liability is otherwise expressly limited by the
terms of this Agreement) either Party from seeking any recovery or remedy
provided at law or in equity from the other Party in connection with any breach
or default by such other Party of any representation, warranty or covenant
hereunder, including injunctive relief.

10.5 Insurance. American Regent shall maintain insurance (including product
liability insurance) with respect to its activities under this Agreement
regarding the Product in such amount as such party customarily maintains with
respect to similar activities for its other products, but not less than such
amount as is reasonable and customary in the industry. American Regent shall
maintain such insurance for so long as it continues its activities under this
Agreement, and thereafter for so long as such party customarily maintains
insurance for itself covering similar activities for its other products. CytoDyn
will have in force prior to the First Commercial Sale and shall maintain in good
standing throughout the Term of this Agreement and for a period of three
(3) years thereafter, product liability insurance policies in respect of the
Product(s) with an internationally recognized insurer or insurers licensed to do
business in the Territory in an amount not less than [***] per occurrence, and
[***] in the aggregate, on such terms and conditions as are customary in the
industry. Upon written request, CytoDyn shall provide written proof of such
insurance to American Regent.

 

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11.

REPRESENTATIONS, WARRANTIES AND COVENANTS; LIMITATIONS OF LIABILITY

11.1 Representations, Warranties and Covenants.

(a) Organization and Authority. Each Party represents and warrants that it
(i) is duly organized, validly existing and in good standing under the
Applicable Laws of the jurisdiction of its organization, (ii) is qualified to do
business in each other’s jurisdiction in which the conduct of its business
requires such qualification including the Territory, (iii) is in compliance with
all Applicable Laws, relating to its business and assets, and (iv) is not in
material default of its memorandum or articles of association, its certificate
of incorporation or by-laws or all other constituent documents as the case may
be, except in the case of (ii) and (iii) where such failure to qualify or be in
compliance would not have a material adverse effect on the business and assets
of such Party or the performance of this Agreement by such Party.

(b) Due Authorization and Enforceability. Each Party represents and warrants
that (i) it has full authority to execute, deliver and perform its obligations
under this Agreement, (ii) that this Agreement has been duly executed and
delivered by such Party, and constitutes the legal, valid and binding
obligations of such Party and is enforceable against such Party in accordance
with its terms, and (iii) that the execution, delivery and performance of this
Agreement will not violate, be inconsistent with or result in a default under or
creation of lien or encumbrance under (except as specifically contemplated by
this Agreement) (A) the memorandum or articles of association, certificate of
incorporation or by-laws or other constituent documents, as the case may be, of
any Party and/or its Affiliates, (B) any material agreement, contract, license
understanding or instrument binding upon or affecting such Party or its
properties or assets, whether express, implied, written or oral, or (C) any
Applicable Laws affecting either Party or its properties or assets, except where
such violation would not have a material adverse effect on the business and
assets of such Party.

(c) Product Handling. Each Party covenants that it will and will cause its
agents to, comply with all Applicable Laws relating to the warehousing, storage,
Manufacturing, Marketing, Packaging and Testing of Product applicable to such
Applicable Laws and will ensure that all required approvals are in effect and
will maintain such approvals in good standing.

(d) Rights to Grant. CytoDyn represents and warrants that it has the sole,
exclusive and unencumbered right to grant the rights herein granted to American
Regent, and that neither CytoDyn, nor any other Person, has granted any option,
license, right or interest in or to the Product in the Field to any Third Party
which could conflict with the rights granted by it under this Agreement in the
Territory.

(e) No Claims. CytoDyn represents, warrants and covenants that as of the
Effective Date there are no proceedings currently pending or, to the knowledge
of CytoDyn, threatened against, CytoDyn or any of its Affiliates, relating to or
otherwise arising from (i) Product Liability Claims or claims for death or
bodily injury relating to any Product, or (ii) infringement, misappropriation or
other conflict with any intellectual property or other rights of any Person
relating to any Product, or (iii) the Marketing or Manufacture of any Product.

 

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11.2 No Other Warranties. Except as set forth in this Article 11, CytoDyn
neither assumes, nor authorizes any Person to assume, any liability for any
warranty in connection with the Product, and all liabilities of CytoDyn or any
other Person in respect of the Product shall be subject to the limitations as
provided under this Article 11. The warranties of CytoDyn set forth in this
Article 11 are in lieu of all other warranties, express or implied, and
specifically, without limitation, CytoDyn disclaims any implied warranty of
merchantability or fitness for a particular purpose.

11.3 Quality Assurance Representations, Warranties and Covenants.

(a) CytoDyn, and its Affiliates engaged in the performance of the actions
contemplated hereby, including the Manufacture, sale and delivery of Product
hereunder, hereby represents, warrants and covenants to American Regent that all
Product that CytoDyn or its Affiliates Manufactures, supplies and delivers under
and pursuant to this Agreement will:

(i) conform to the Specifications at time of shipment to American Regent;

(ii) be free and clear from all liens, encumbrances and defects of title, other
than those that arise directly as a result of actions taken by American Regent;
and

(iii) comply with the requirements under the cGMP standards, the Regulatory
Approvals and any other Applicable Law in the Territory, and will not, at the
time of such delivery, (A) be adulterated or misbranded, or (B) be an article
which may not, under the provisions of the Act, be introduced into interstate
commerce.

(b) American Regent shall be responsible for storing Product under appropriate
conditions as specified in labeling and for distribution in full compliance with
the applicable cGMP standards, the Regulatory Approvals and the Applicable Law.

(c) American Regent shall not, in bad faith, disrupt or cause the disruption of
the supply of Product into the marketplace in the Territory.

(d) CytoDyn shall at all times during the Term, be in current compliance with,
all Regulatory Approvals as may be required to Manufacture and/or to supply the
Product pursuant to this Agreement, and, as of the Effective Date.

(e) Each Party represents and warrants that neither it nor any of its
Affiliates, directly involved with the performance of this Agreement has been
debarred under subsections (a) or (b) of Section 306 of the Act, as amended, 21
U.S.C. Section 335a(a) and (b) or comparable foreign regulation, has been
excluded, debarred, suspended or otherwise ineligible to participate in a
federal, provincial, or state health care program, (e.g., Medicare or Medicaid)
or government procurement or non-procurement program or comparable foreign
programs (a “Program”). Moreover, if any Party or any of its Affiliates,
directly involved with the performance of this Agreement is subsequently
excluded, debarred or otherwise ruled ineligible to participate in a Program,
such Party agrees to immediately notify the other Party of such debarment,
exclusion or suspension. Each Party shall also immediately notify the other
Party in the event the notifying

 

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Party or any of its Affiliates, directly involved with the performance of this
Agreement has been proposed for exclusion from participation in any Program or
charged with a criminal offense which, if convicted, would result in mandatory
or discretionary exclusion in any such Program.

(f) Each Party represents and warrants that it did not and will not knowingly
use in any capacity the services of any person debarred under the Act or
comparable foreign regulation or excluded, debarred, or otherwise ineligible to
participate in any Program in connection with its performance of this Agreement.

11.4 Limitation of Liability. Except a Party’s indemnification obligations or
breach of Section 8, in no event shall either Party or its Affiliates be liable
to the other for any indirect, incidental, punitive or special damages,
including loss of profits, goodwill or revenue, data or use, incurred by the
other Party, however caused and on any theory of liability, arising in any way
out of this Agreement. Notwithstanding anything to the contrary contained
herein, American Regent’s maximum liability under this Agreement, subject to
Section 10.2, shall not exceed [***].

 

12.

MISCELLANEOUS

12.1 Force Majeure. The Parties shall not be liable for the failure or delay in
performing any obligation under this Agreement (except for the payment of money)
if and to the extent such failure or delay is due to (a) acts of God,
(b) weather condition, fire or explosion, (c) war, terrorism, invasion, riot or
other civil unrest, (d) any governmental laws, orders, restrictions, actions,
embargoes or blockades, (e) national or regional emergency, (f) injunctions,
strikes, lockouts, labor trouble or other industrial disturbances, (g) shortage
of adequate fuel, power, materials, or resources, or (h) any other event which
is beyond the reasonable control of the affected Party (each such event, a
“Force Majeure”); provided that the Party affected shall promptly notify the
other of the Force Majeure condition and shall use Commercially Reasonable
Efforts at its cost (except, for clarity, for any such costs of CytoDyn which
would be allocated to the Transfer Price) to eliminate, cure or overcome any
such causes and to resume performance of its obligations. In no event shall
American Regent’s inability to pay the amounts due under this Agreement be
deemed a Force Majeure event and a Force Majeure event shall not excuse American
Regent from its obligation to make payments, when due, under this Agreement.

12.2 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware and the trademark and patent
laws of the United States, without reference to any rules of conflict of laws.
The United Nations Conventions on Contracts for the International Sale of Goods,
as well as any other unified laws or regulations relating to the conclusion and
implementation of contracts for the international sale of goods, shall not
apply. The Parties shall negotiate in good faith and use reasonable efforts to
settle any dispute, controversy or claim arising from or related to this
Agreement or a breach thereof.

12.3 Consent and Waiver Regarding Services of Process, Personal Jurisdiction and
Jury Trial. In any action, suit, arbitration or proceeding to enforce the rights
of either Party under this Agreement or otherwise arising out of this Agreement
or from any acts, omissions or activities of either Party arising from or
related in any way to this Agreement or the transactions contemplated hereby or
related in any way to the Product, each Party, by execution and delivery of this

 

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Agreement, expressly and irrevocably consents to the service of any complaint,
summons, notice or other process relating to any such action, suit, arbitration
or proceeding by delivery thereof to it by hand or by any other manner provided
for in Section 12.5 hereof. Each Party hereby expressly and irrevocably waives
any claim or defense in any such action, suit, arbitration or proceeding based
on any alleged lack of personal jurisdiction, improper venue, forum non
conveniens or any similar doctrine or theory. IN ADDITION, EACH PARTY HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY SUIT, ACTION OR
OTHER PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

12.4 Entire Agreement; Amendments. This Agreement, including the Schedules
hereto, sets forth the entire terms of the supply and distribution arrangement
between the Parties hereto and, except as otherwise set forth herein, supersedes
and terminates all prior agreements and understandings between the Parties
regarding the subject matter hereof. No subsequent alteration, amendment, change
or addition to this Agreement shall be binding upon the Parties unless reduced
to writing and signed by an authorized officer of each Party.

12.5 Notice. When a Party is required or permitted to give notice under this
Agreement, the notice shall be in writing, shall be sent by email, nationally
recognized express delivery service, or delivered by courier or personal
delivery (with evidence of receipt where feasible) and shall be deemed to be
given upon receipt of the other Party. Unless otherwise specified in writing,
the mailing addresses of the Parties shall be as set forth below.

For CytoDyn:

CytoDyn Inc.

1111Main Street

Suite 660

Vancouver, Washington 98660

Attention: Nader Pourhassan

Email: npourhassan@cytodyn.com

With a copy (which shall not constitute notice) to:

General Counsel

(Same Mailing Address)

Email: legalnotices@cytodyn.com

For American Regent:

American Regent, Inc.

5 Ramsey Road

Shirley, New York 11967

Attention: Head of Business Development

Email: businessdevelopment@americanregent.com

 

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With a copy (which shall not constitute notice) to:

Vice President and General Counsel

(Same Mailing Address)

Email: legalnotices@americanregent.com

12.6 Assignment; Change of Control. Except as provided in this Section, this
Agreement may not be assigned or otherwise transferred, nor may any rights or
obligations hereunder be assigned or transferred, by either Party, whether in a
merger, sale of stock, sale of assets or other transaction, without the written
consent of the other Party. Notwithstanding the foregoing, (i) CytoDyn may,
without American Regent’s consent, assign this Agreement and its rights and
obligations hereunder in whole or in part to (a) a CytoDyn Affiliate or (b) to a
Third Party in connection with a Change of Control of CytoDyn and (ii) subject
to Section 9.2(e), American Regent may, without CytoDyn’s consent, assign this
Agreement and its rights and obligations hereunder to a Third Party in
connection with a Change of Control of American Regent. Any permitted assignee
shall assume all assigned obligations of its assignor under this Agreement. Any
attempted assignment not in accordance with this Section shall be void.
Notwithstanding the foregoing, in the event of a Change of Control of American
Regent, CytoDyn shall have the right to require American Regent (including the
Person who acquired American Regent in the Change of Control, if any), to adopt
procedures as reasonably requested by CytoDyn to prevent the disclosure of all
CytoDyn Confidential Information beyond American Regent personnel having access
to and knowledge of CytoDyn Confidential Information prior to the Change of
Control and to control the dissemination of CytoDyn Confidential Information
disclosed after the Change of Control. The purposes of such procedures shall be
to strictly limit such disclosures to only those personnel having a need to know
CytoDyn Confidential Information in order for American Regent to perform its
obligations under this Agreement and to prohibit the use of CytoDyn Confidential
Information for competitive reasons against CytoDyn (and its Affiliates)
products, including the use of CytoDyn Confidential Information for the
development or commercialization of competing products in the event of a Change
of Control of American Regent. This Agreement shall be binding on, and inure to
the benefit of, each Party, and its permitted successors and assigns.

12.7 Public Announcements. Neither Party shall make any voluntary publicity
releases, interviews or other dissemination of Confidential Information
concerning the Product, this Agreement or its terms, or either Party’s
performance hereunder, to communication media, financial analysts or others
without the prior written approval of the other Party, which approval shall not
be unreasonably withheld. Notwithstanding the foregoing, (a) CytoDyn may comply
with its legal or regulatory disclosure obligations upon prior written notice to
American Regent; and (b) upon written notice to American Regent, CytoDyn may
make a mutually agreeable publicity release that mentions American Regent upon
the execution of this Agreement, the FDA approval of the Product in the Field,
or first sale of the Product by American Regent, provided, however, that
American Regent shall have not less than three (3) Business Days to review and
comment on such disclosures and filings, unless a shorter period is necessitated
by securities laws, any such comments provided shall be reasonably accepted by
CytoDyn and American Regent shall not unreasonably withhold, delay or condition
its review and comments on such disclosures.

 

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12.8 Severance. If any Official Body having jurisdiction over either CytoDyn or
American Regent declares any Article or part thereof invalid or any such
Official Body deems any Article or part thereof to be contrary to any Applicable
Laws, then such Article or part thereof shall be deemed stricken from this
Agreement in that jurisdiction. To the extent possible the Parties shall revise
such invalidated Article or part thereof in a manner that will render such
provision valid without impairing the Parties’ original intent.

12.9 Non-Waiver. The failure of a Party in any one or more instances to insist
upon strict performance of any of the terms and conditions of this Agreement
shall not be construed as a waiver or relinquishment, to any extent, of the
right to assert or rely upon any such terms or conditions on any future
occasion. Except as otherwise specified, all rights, remedies, undertakings,
obligations and agreements contained in this Agreement shall be cumulative and
none of them shall be a limitation of any other remedy, right, undertaking,
obligation or agreement.

12.10 Further Assurances. Each Party hereto agrees to execute such further
documents and take such further steps as the other Party reasonably determines
may be necessary or desirable to effectuate the purposes of this Agreement.

12.11 Disclaimer of Agency. This Agreement shall not constitute either Party the
legal representative or agent of the other Party, nor shall either Party have
the right or authority to assume, create, or incur any Third Party liability or
obligation of any kind, express or implied, against or in the name of or on
behalf of another except as expressly set forth in this Agreement. None of a
Party’s directors, officers, agents or employees shall be considered employees
agents or legal representatives of the other Party for any purpose.

12.12 Construction. The language in all parts of this Agreement shall be
construed, in all cases, according to its fair meaning. The Parties acknowledge
that each Party and its counsel have reviewed and revised this Agreement and
that any rule of construction to the effect that any ambiguities are to be
resolved against the drafting Party shall not be employed in the interpretation
of this Agreement. The words “hereof,” “herein,” “hereto” and “hereunder” and
words of similar import, when used in this Agreement, shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. The
terms defined in the singular shall have a comparable meaning when used in the
plural, and vice versa. Whenever used herein, the words “include,” “includes”
and “including” shall mean “include, without limitation,” “includes, without
limitation” and “including, without limitation,” respectively. The masculine,
feminine or neuter gender and the singular or plural number shall each be deemed
to include the others whenever the context so indicates.

12.13 Counterparts. This Agreement shall become binding when any one or more
counterparts hereof, individually or taken together, shall bear the signatures
of each of the Parties hereto. This Agreement may be executed in any number of
counterparts, including by facsimile, each of which shall be deemed an original
as against the Party whose signature appears thereon, but all which taken
together shall constitute but one and the same document.

 

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12.14 Consents in Writing. Any consents or approvals required hereunder from a
Party must be in writing.

12.15 Set-offs. No Party may set-off against any payments owing hereunder
without the written consent of the other Party.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of
the date first written above.

 

AMERICAN REGENT, INC.     CYTODYN, INC. By:   /s/ Ken Keller     By:   /s/ Nader
Pourhassan Name:  Ken Keller     Name:  Nader Pourhassan Title:  President & CEO
    Title:  Chief Executive Officer

[SIGNATURE PAGE TO DISTRIBUTION AND SUPPLY AGREEMENT]

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EXHIBIT A

CYTODYN’S 2020 ESTIMATES FOR COST OF GOODS SOLD

AGC/Ajinomoto: $[***] per 700 mg dose ($[***] / vial).

Samsung: $[***] per 700 mg dose ($[***] / vial).

[***] will be adjusted on an annual basis based on [***].