Exhibit 10.4

 

DEVELOPMENT AND MANUFACTURING SERVICES AGREEMENT

 

This DEVELOPMENT AND MANUFACTURING SERVICES AGREEMENT, effective as of this __
day of ___________, 2014 (the “Effective Date”), between, Omni Bio
Pharmaceutical, Inc., a Colorado corporation (“Customer”), having its principal
place of business at 5350 S. Roslyn Street, Suite 430 Greenwood Village, CO
80111 and Gallus Biopharmaceuticals, LLC, a Delaware limited liability company
with offices at 4766 LaGuardia Drive, St. Louis, MO 63134 (“Gallus”). Customer
and Gallus are referred to herein each as a “Party” and collectively as the
“Parties”.

 

WHEREAS, Gallus provides a full range of manufacturing and bioprocessing
services to the biopharmaceutical industry, including cell line development,
process development, protein production, cell culture, protein purification,
bioanalytical chemistry and QC testing and product release; and

 

WHEREAS, Customer desires Gallus to perform services in accordance with the
terms of this Agreement related to the development, manufacture (including cGMP
bioreactor production and purification) and clinical supply of a recombinant
protein product produced by Customer’s corresponding cell line, and Gallus
desires to perform such services.

 

NOW, THEREFORE, in consideration of the above statements and other good and
valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the Parties hereto agree as follows:

 

1. Definitions. Terms defined elsewhere in this Agreement shall have the
meanings set forth therein for all purposes of this Agreement unless otherwise
specified to the contrary. The following terms shall have the meaning set forth
below in this Section 1:

 

(a)        “Affiliate(s)” means any person, firm, trust, partnership,
corporation, company or other entity or combination thereof which directly or
indirectly: (i) controls a Party; (ii) is controlled by a Party; or (iii) is
under common control with a Party. As used in this definition, the terms
“control” and “controlled” shall mean ownership of fifty percent (50%) or more
(including ownership by trusts with substantially the same beneficial interests)
of the voting and equity rights of such person, firm, trust, partnership,
corporation, company or other entity or combination thereof or the power to
direct the management of such person, firm, trust, corporation or other entity
or combination thereof.

 

(b)        “Agreement” means this document as signed by the Parties; including
the Work Statement, Specifications Document and other Appendices and any
referenced attachments and any amendments and additions to any of the foregoing.

 

(c)        “Applicable Laws” means all relevant federal, state and local laws,
statutes, rules, regulations, and ordinances and industry standards and
guidelines as in effect on the Effective Date or adopted thereafter and which
are applicable to a Party’s activities hereunder.

 

(d)        “Assumptions” shall have the meaning as set forth in Section 9(a).

 

(e)        “Background Technology” of a Party means any and all Technology that
(i) is owned or otherwise controlled by such Party and (ii) is either (1) in
existence on or prior to the Effective Date or (2) conceived, created,
developed, reduced to practice or made by or on behalf of such Party after the
Effective Date independently of the activities contemplated by this Agreement.

 

(f)        “Batch” means a specific batch of Product produced in a single
manufacturing run.

 

 

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(g)       “Batch Record” means a manufacturing record for a Batch generated by
Gallus concurrently with the performance of each step of the production of a
specific Batch or Lot of material such that successive steps in such processes
may be traced.

 

(h)       “Cell Line” means the cell line identified in the applicable Work
Statement that has been designed and engineered to produce the corresponding
recombinant protein product and will be supplied by Customer to Gallus in
accordance with the Work Statement.

 

(i)         “Certificate of Analysis” shall mean a written certificate listing
the items tested, manufacturer, specifications, testing methods and test results
for a specific Batch or Lot of material.

 

(j)         “cGMP” means current Good Manufacturing Practice as defined in the
Rules and Guidance for Pharmaceutical Manufacturers and Distributors 2002 part
II: Basic Requirements for Active Substances used as Starting Materials, and
ICHQ7a – as incorporated in the Federal Register volume 66 No 186 (formerly
ICHQ7a) and those sections applicable within FDA regulations found at title 21
of the Code of Federal Regulations (CFR) Parts 210, 211, 600, 601 and 610.

 

(k)       “Change Order” shall have the meaning set forth in Section 9(b).

 

(l)         “Claim” shall have the meaning set forth in Section 18.

 

(m)      “Confidential Information” means, with respect to a Party, any and
data, information or materials that is supplied or made available by one Party
to the other Party, including Third Party information, whether disclosed
directly or indirectly in writing, orally, electronically or by drawings or
observation. “Confidential Information” of Customer includes business, technical
or financial data concerning the Cell Line or Product, and “Confidential
Information” of Gallus includes business, technical or financial data, Gallus’
production and purification methods, Gallus’ equipment and techniques and Gallus
Technology.

 

(n)       “Contaminants” shall have the meaning set forth in Section 16.

 

(o)       “Customer Provided Materials” means the Cell Line, materials,
documents, components and supplies provided by Customer hereunder.

 

(p)       “Defective Batch” means a Batch, other than a Batch produced in a
process verification, pre-engineering or engineering run, which cannot be
released or which does not comply with the parameters and specifications in the
Work Statement.

 

(q)       “Disposition” means a documented decision on the acceptability for use
of a specific Batch or Lot of material that is based on a process of reviewing
data associated with the production and testing of the material or product.

 

(r)       “Drug Product” means the final dosage form of an active pharmaceutical
ingredient that is intended for human use.

 

(s)       “Drug Substance” is the bulk purified recombinant protein produced
using the Cell Line and purified using the Process.

 

(t)       “Facility” means Gallus’ manufacturing, laboratory and warehouse
facilities located at 4766 LaGuardia Drive, St. Louis, MO 63134, or any other
Gallus facility as agreed to in writing by the Parties.

 

 

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(u)       “Gallus Failure” means a Defective Batch caused by Gallus’s negligence
or willful misconduct, or material failure to follow agreed upon procedures,
including a Defective Batch caused by contamination due to causes other than
Customer’s action or inaction. For the avoidance of doubt, a Defective Batch
caused by circumstances other than as set forth in the immediately preceding
sentence, including without limitation, an issue or circumstance inherent to the
Process, shall not be a Gallus Failure.

 

(v)       “Gallus SOP” means the written standard operating procedures and
methods of Gallus, as the same may be amended, in Gallus’ sole discretion, from
time to time.

 

(w)       “Gallus Technology” means any and all Technology developed by Gallus
hereunder that is general-purpose in nature, applicable to performance of
services for Gallus’ other customers, and not specific to the Product, including
any Improvements thereto.

 

(x)       “GMP Manufacturing Stage” means the Stage of the Program identified in
the Work Statement during which production of Product in accordance with cGMP is
intended to take place.

 

(y)       “GMP Stages” means the Stages of the Program identified in the Work
Statement during which activity associated with cGMP manufacture of Product is
intended to take place, including GMP preparation, the GMP Manufacturing Stage,
Disposition and reporting.

 

(z)       “Improvement” means any modification, enhancement or improvement to a
Technology, or any discovery related to such Technology, whether or not patented
or patentable, and all associated Intellectual Property Rights therein or
thereto.

 

(aa)     “Intellectual Property Rights” means any and all of the following: (i)
Patents, (ii) copyrights in both published and unpublished works, (iii) rights
(including without limitation trade secret rights) in know-how, (iv) other than
trademark and service mark rights, any and all other intellectual property
rights and (v) any and all registrations and applications for registration of
any of the foregoing.

 

(bb)     “Lot” means the Product produced in a single production run, which may
be contained in one or more containers thereof.

 

(cc)     “Master Batch Record” means the document containing the formula and
procedures for the manufacturing and quality assurance of the Product, as such
may be amended by the Parties in accordance with the terms hereof.

 

(dd)     “Materials” means Customer Provided Materials and Process Consumables.

 

(ee)     “Modification” shall have the meaning set forth in Section 9.

 

(ff)      “Non-GMP Stages” means all Stages of the Program identified in the
Work Statement, other than the GMP Stages.

 

(gg)     “Patents” means patents and patent applications and all divisions,
renewals, continuations and continuations-in-part thereof, and all patents
granted thereon, and all reissues, re-examination certificates, and extensions
and foreign counterparts thereof.

 

 

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(hh)     “Person” means an individual, partnership, corporation, limited
liability company, joint stock company, unincorporated organization or
association, trust or joint venture, or a governmental agency or political
subdivision thereof.

 

(ii)     “Process” means shall mean the processes and procedures used to
manufacture the Product in accordance with the Master Batch Record, including
all protocols and standard operating procedure documents referenced therein,
which are provided by Customer or developed by Gallus and Customer hereunder.

 

(jj)     “Process Consumables” means media, raw materials, chromatography
columns, resins, filters, membranes, disposable analytical test kits, hoses,
filter housings, tubing, filling needles, disposable bags, disposable
glass/plasticware, cleaning supplies and other changeover parts consumed during
the manufacture of Product.

 

(kk)     “Process Demonstration Stage” means the Stage of the Program identified
in the Work Statement during which process verification run of the Process is
intended to take place.

 

(ll)     “Product” means the Drug Substance and, if the Program includes supply
of a final dosage form of Drug Substance that is intended for human use in
clinical trials, Drug Product.

 

(mm)     “Product Invention” means any patentable Improvement to a Product
(excluding any Gallus Technology) discovered by Gallus, its employees, agents,
consultants or contractors, exclusively as a result of performing the Services
under this Agreement.

 

(nn)     “Program” means all of the services to be performed by Gallus for
Customer as described in a Work Statement(s), including any amendments or Change
Orders thereto.

 

(oo)     “Quality Agreement” shall have the meaning set forth in Section 3(c).

 

(pp)     “Service Fee” shall have the meaning set forth in Section 8(a).

 

(qq)     “Services” means activities to be performed by Gallus for Customer
hereunder as a part of a Program.

 

(rr)       “Special Waste” means waste or effluent which is required to be
collected in a special container for external disposal.

 

(ss)      “Specifications” means the requirements of cGMP (to the extent
applicable), and the tests, references to analytical procedures, and appropriate
acceptance criteria that are numerical limits, ranges, or other criteria for the
test described, as set forth in the Specifications Document.

 

(tt)       “Specifications Documents” means the document that (i) references
this Agreement, (ii) is signed by authorized representatives of both Parties and
(iii) sets forth the Specifications, as may be amended by the Parties in
accordance with Section 9(b) from time to time.

 

(uu)     “Stage” means a stage of the Program.

 

(vv)     “Technology” means all scientific, technical and other information,
data, know-how, trade secrets, inventions (whether or not patentable),
processes, compositions of matter, materials, methods, techniques,
documentation, hardware, software and technology and all associated Intellectual
Property Rights related thereto, whether or not protected or protectable under
patent, trademark, copyright or similar law.

 

 

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(ww)     “Third Party” shall mean any party other than Customer, Gallus and
their respective Affiliates.

 

(xx)       “Travel Expenses” means costs and expenses incurred by Gallus for
travel and lodging required in order to carry out the Program.

 

(yy)      “Work Statement” means a detailed work statement that (i) references
this Agreement, (ii) is signed by authorized representatives of both Parties and
(iii) sets forth, at a minimum, the Services to be provided by Gallus and the
fees to be paid by Customer for such Services, and any modifications to such
work statement that the Parties may agree in writing from time to time. The
agreed form Work Order is attached hereto as Appendix 1.

 

2. Work Statement; Orders for Products.

 

(a)          Gallus will use commercially reasonable efforts to perform the
Services for Customer in accordance with the applicable Work Statement. Each
Work Statement specifies the scope of the Services, information desired,
estimated duration of the Program, and all other matters pertinent to completion
of the Program, and is deemed a part of this Agreement and is incorporated
herein by reference. Customer acknowledges that the timelines set forth in any
Work Statement are good faith estimates using assumptions based on information
available at the time into which a Work Statement is entered.

 

(b)          A Program shall be complete when all Stages of the applicable Work
Statement have been completed or when a Work Statement or this Agreement has
been terminated pursuant to Section 23.

 

(c)          With respect to each Work Statement, Customer acknowledges that
Gallus consulted with Customer in developing the Work Statement in a manner
consistent with Gallus’ then current reasonable understanding of United States
(the “US”) regulatory guidelines. Gallus does not, however, represent or warrant
that the Program and/or the results of the Services will satisfy the
requirements of any regulatory agencies at the time of submission of such
results to such agencies. Customer shall be responsible for obtaining all
regulatory approvals relating to registration of the Drug Product shall pay any
applicable user fee for such registrations, and shall own the applicable
regulatory filings and approvals. Customer shall comply with all Applicable Laws
relating to the shipping, distribution and marketing of Drug Product.

 

(d)          Gallus’ performance of the Program will be based on technical
information provided by or for the Customer. This information will be
incorporated by Gallus into Program documents (e.g., scale up plans, Master
Batch Record, Specifications) that will be reviewed and approved by the Customer
prior to use by Gallus.

 

3. Program Performance.

 

(a)          Gallus shall use its commercially reasonable efforts to provide the
Facility, Process Consumables and staff necessary to complete the Program in
accordance with the terms of this Agreement. In the event of any conflict
between the terms and provisions of this document and the terms of a Work
Statement, the terms of this document shall control, unless expressly provided
otherwise in the applicable Work Statement.

 

 

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(b)          Customer acknowledges that the work to be performed hereunder is by
its nature developmental and that the Program involves biological processes that
are, by their nature, unpredictable such that Gallus does not guarantee to
Customer the achievement of a successful outcome. For the avoidance of doubt, it
shall not be considered a breach of this Agreement by Gallus if an objective of
the Program is not achieved so long as Gallus has complied with its obligations
set forth herein. Gallus shall not be responsible for any loss of a Batch in
crude or purified form unless it is a Defective Batch caused by a Gallus
Failure. Customer’s sole and exclusive remedy for a Gallus Failure shall be as
set forth in Section 20(h) below. In the event Customer’s actions or inactions
cause a delay in the schedule that is within Customer’s reasonable control, and
such delay requires additional Gallus expenses or the idling of Gallus’s
resources, then Customer shall be responsible to compensate Gallus accordingly
for such additional expenses and idled resources.

 

(c)          Gallus will appoint a Gallus representative (the “Program Manager”)
to be responsible for overseeing the completion of the Program by Gallus. The
Program Manager will coordinate performance of the Services with a
representative designated by Customer (the “Customer Representative”) and as set
forth in the Work Statement, which representative shall have responsibility over
all matters relating to performance of the Services on behalf of Customer.
Unless otherwise agreed in the Work Statement, or mutually agreed to by the
Parties, all communications between Gallus and the Customer regarding the
conduct of the Services pursuant to the Work Statement shall be addressed to or
routed through the Program Manager and Customer Representative. The Program
Manager is named in the Work Statement and Gallus may, at its option, substitute
the Program Manager during the course of the Program. The Customer
Representative is named in the Work Statement and Customer may, at its option,
substitute the Customer Representative during the course of the Program.

 

(d)          Promptly following the execution of this Agreement, the Parties
will negotiate and enter into a detailed document specifying the quality and
regulatory procedures and responsibilities of the Parties with respect to the
manufacture of Product (the “Quality Agreement”).

 

(e)          Customer may cancel one or more Batches subject to retention by
Gallus of any deposit or manufacturing suite reservation fee with respect to
such cancelled Batch(es). Notwithstanding the foregoing, if Customer cancels a
majority of remaining Batches, the Agreement shall be deemed to have been
terminated by Customer under Section 23(b), unless the Parties agree otherwise
in writing.

 

4. Program Materials.

 

(a)          Customer will provide Gallus with sufficient amounts of the
Customer Provided Materials with which to perform the Services as specified in
the Work Statement. Unless the Work Statement includes the development of a
manufacturing process by Gallus, Customer also will provide Gallus with all
necessary information to effect the reliable transfer of the Process from
Customer to Gallus.

 

(b)          Gallus shall procure Process Consumables for use in the Program and
each manufacturing run as set forth in the Work Statement.

 

(c)          Gallus shall procure Product-Dedicated Equipment as may be set
forth in a Work Statement and pass through the costs to the Customer as set
forth in Section 8. Customer may procure certain Product-Dedicated Equipment for
use in the Program at its own expense, provided that Customer first provides
written notice to Gallus and provides Gallus with an opportunity to confirm that
such Product-Dedicated Equipment conforms to the requirements of the Work
Statement and is otherwise suitable for use in the performance of the Services.
Any such Customer-procured Product-Dedicated Equipment will be subject to
charges from Gallus for activities such as evaluation, installation and
qualification.

 

 

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(d)          Upon completion of the Program, (i) the Product-Dedicated Equipment
will be returned to the Customer, at the Customer’s expense, unless the Parties
agree that such Product-Dedicated Equipment will be used in connection with
additional services to be provided to Customer in the foreseeable future, and
(ii) any remaining Materials will be, at Customer’s election (such election to
be made by Customer to Gallus in writing no later than sixty (60) days after
Gallus’ issuance of a Certificate of Analysis for the applicable Product),
returned to the Customer or destroyed/disposed of by Gallus, in either case at
the Customer’s expense. If Customer does not provide such notice to Gallus
within such 60-day period, Gallus shall, at Gallus’ election and at Customer’s
expense, return to the Customer or destroy/dispose of the applicable Materials.
Notwithstanding anything to the contrary contained in this Agreement, (i) Gallus
may retain Materials as required by Applicable Law, and (ii) in no event shall
Gallus be required to store Materials, Product-Dedicated Equipment or any other
materials for more than ninety (90) days after termination or expiration of an
applicable Work Statement or this Agreement unless the Parties have entered into
an appropriate storage agreement covering such items.

 

5. Use of Subcontractors.

 

(a)          Gallus reserves the right to employ subcontractors from
time-to-time to undertake certain activities related to the Program. All
subcontractors will be pre-approved by the Customer and will be held under
obligations of confidentiality consistent with those set forth in Section 10. A
list of known and approved subcontractors is provided in the Work Statement.

 

(b)          Gallus will not be held responsible or liable for the performance
of any pre-approved subcontractor used for the Program or for any costs,
expenses, damage or loss of any nature, whether direct or consequential
occasioned by the performance of or failure to perform the subcontracted
services. Notwithstanding the foregoing, Gallus shall be responsible for
managing and ensuring the performance of the subcontractor used for Cell Line
development activities under Work Statement 1.

 

6. Compliance with Government Regulations.

 

(a)          Subject to Section 6(b), Gallus will comply in all material
respects with cGMP applicable to the Services.

 

(b)          Should cGMP applicable to the Services be changed following the
Effective Date, Gallus will make commercially reasonable efforts to comply in
all material respects with the new requirements. In the event that compliance
with such new requirements necessitates, in the sole discretion of Gallus, a
change in the Work Statement or the Services or the cost of the Services, Gallus
will submit to Customer a proposed Change Order in accordance with Section 9(b).

 

7. Facility Visits and Audits. Customer’s representatives may visit the Facility
to observe the progress of the Program or to audit the Facility as set forth in
Appendix 2 and/or the Quality Agreement. In addition, Gallus will have the right
to audit any sites (including Customer sites) or laboratories used by Customer
(except for Customer’s contract manufacturers) or any Third Party analytical
subcontractor engaged by Customer in connection with any release assays.

 

 

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8. Compensation.

 

(a)          Customer shall pay Gallus the fees listed in the Work Statement
(the “Service Fees”), which Service Fees shall be subject to modification in
accordance with the provisions of Section 9. Gallus shall issue invoices for
Service Fees in accordance with the payment schedule set forth in the Work
Statement, and Customer shall pay the amounts set forth in each invoice within
thirty (30) days of the date of such invoice.

 

(b)          The Service Fees do not include amounts payable by Customer for (i)
Process Consumables; (ii) Product-Dedicated Equipment; (iii) Services
subcontracted to a Third Party (including shipping charges for delivery of
materials to and from a subcontractor); (iv) disposal of Special Waste; or (v)
Travel Expenses ((iii) through (v), collectively, “External Services”). Gallus
shall invoice Customer for all External Services as incurred by Gallus, and
Gallus shall invoice Customer for all Process Consumables and Product-Dedicated
Equipment as set forth in Sections 8(c) and 8(d). Product-Dedicated Equipment
will include the direct cost to acquire the equipment plus costs to specify,
procure, commission and validate the equipment so that it is ready for use. An
administrative fee set forth in Appendix 3 will be added to all invoices for
Process Consumables and External Services to cover the cost of vendor
qualification, vendor management and incoming quality control, inventory
management and warehousing, and Customer shall pay all such invoices in full
within thirty (30) days of the date of such invoice.

 

(c)          Prior to the initiation of each Stage of the Program, Gallus shall
prepare and provide to Customer a good-faith estimate (an “Estimate”) of
expected costs and expenses to be incurred by Gallus for Process Consumables,
Product-Dedicated Equipment and External Services for such Stage. Within three
(3) days of receipt of each Estimate, Customer shall either notify Gallus of
Customers acceptance and agreement of such estimate, or notify Gallus with
reasonable detail of any disputed items set forth in the Estimate. Failure to so
notify Gallus within such 3-day period shall be deemed to be Customer’s
agreement and acceptance of such Estimate. If Customer disputes any items set
forth in the Estimate within such 3-day period, the Parties shall discuss in
good faith the disputed items and Gallus shall re-issue an Estimate to Customer
and the review and acceptance process set forth above shall be applied to such
re-issued Estimate.

 

(d)          Following approval of each Estimate as set forth in Section 8(c),
Gallus shall proceed with purchase of Process Consumables and Product-Dedicated
Equipment included in such Estimate and shall invoice Customer for same. Upon
completion of the applicable Stage or earlier termination of this Agreement,
Gallus shall calculate the expenditure actually incurred for Process
Consumables, plus an administrative fee as set forth in Section 8(b), and the
Product-Dedicated Equipment procured for use during such Stage and associated
costs (collectively, the “Actual Expenditure”). If the Actual Expenditure is
greater than the corresponding Estimate, Gallus shall issue a further invoice
for a sum equivalent to the difference between the amount set forth in the
Estimate and actually paid by Customer and the Actual Expenditure. If the Actual
Expenditure is less than the corresponding Estimate, Gallus shall issue a credit
note against the earlier invoice for a sum equivalent to the difference, which
credit may be applied to future amounts payable under this Agreement. Customer
shall not be responsible for costs of External Services that exceed the amounts
set forth in an Estimate without the prior written consent of Customer.

 

(e)          In the event Gallus’ performance of Services is delayed or
suspended at the request of Customer, or the failure by Customer to fulfill its
obligations under this Agreement, then Gallus reserves the right to immediately
invoice Customer for all reasonable losses and expenses incurred by Gallus as a
direct result of such delay or suspension. Such losses and expenses include
without limitation idle production capacity caused by such delay or suspension
and non-reallocable human resources and materials that would have been used for
the Services but for such delay or suspension. Gallus will use reasonable
efforts to avoid and/or minimize such expenses and losses by using reasonable
efforts to reallocate internal resources and materials. In no event will any
invoice submitted pursuant to this Section 8(e) exceed (A) the original Service
Fees for the Services that are rescheduled by such delay or suspension, or (B)
in the case of a delayed or suspended manufacturing run, the deposit(s) required
for the originally scheduled run.

 

 

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(f)          Late payments shall incur an interest charge of the lesser of one
and one-half percent (1½ %) per month or the maximum amount permitted by
applicable law. Gallus reserves the right to suspend Services in the event of
late payments. All payments under this Agreement are exclusive of any taxes that
may apply and shall be paid gross, without deductions or set-offs, whether by
way of withholding or other income taxes, and Customer shall ensure that such
sum is paid to Gallus as shall, after deduction of such withholding or other
income taxes, be equivalent to the consideration payable under this Agreement.
If any taxes shall become due, it shall be for the account of Customer

 

(g)          All amounts payable to Gallus under this Agreement shall be paid in
US Dollars, without deduction, and by authenticated and value dated Swift
telegraphic transfer for any such payments made from outside the United States,
quoting invoice numbers of payment to the bank account identified in the
applicable invoice or by such other means as Gallus shall notify Customer in
writing from time to time.

 

9. Work Statement and Specification Document Changes.

 

(a)          The Service Fees are subject to a number of specific and general
assumptions. The specific assumptions relate to the Work Statement and Program
design and objectives, timing, capital expenditure requirements, if any, and
other matters relating to the completion of the Program as set forth in the Work
Statement (the “Program Assumptions”). Gallus also assumes that the Customer
will cooperate and perform its obligations under the Agreement in a timely
manner, that no event outside the reasonable control of Gallus will occur,
including the events described in Section 21, and that there are no changes to
any Applicable Laws that affect the Program (collectively, the “General
Assumptions,” and together with the Program Assumptions, collectively, the
“Assumptions”). In the event that any of the Assumptions require modification or
the objectives of the Program cannot be achieved based on the Assumptions then
the Work Statement may be amended as provided in Section 9(b).

 

(b)          Any change in (i) the details of a Work Statement or (ii) the
Assumptions upon which the Work Statement is based (including but not limited
to, changes regarding the start date for a Work Statement or suspension of a
Work Statement), may require changes to the budget, scope of work, and/or
timelines (collectively a “Modification”). Either Party may request a
Modification to the Work Statement by notifying the other Party of the requested
change(s) in reasonable detail. Gallus shall use reasonable efforts to provide
the Customer with a change order containing an estimate of the required
adjustments to the Service Fees within ten (10) business days of receiving or
delivering such notice (the “Change Order”). The Customer shall respond in
writing to such Change Order promptly, but in any event within three (3)
business days. If Customer does not approve such Change Order and has not
terminated this Agreement and the Program in accordance with Section 23 but
wants the Program to be modified to take into account the Modification, then
Customer and Gallus shall use commercially reasonable efforts to agree on a
Change Order that is mutually acceptable. If practicable, Gallus may, in its
discretion, continue to work on the Program but Gallus shall not be obligated to
continue to work on the Program during any such negotiations. Customer
acknowledges and agrees that, due to commitments to its other customers, Gallus
may be unable to accommodate a proposed change to the start date for a Work
Statement or other change to the agreed upon schedule for the performance of
Services. In the event that Gallus is able to accommodate such a proposed
change, Gallus reserves the right to charge, and Customer agrees to pay, a
reasonable fee for idle capacity that arises as a result of such change,
provided that in no event will such additional fees for idle capacity exceed (A)
the original Service Fees for the Services that are rescheduled by such change,
or (B) in the case of a rescheduled manufacturing run, the deposit(s) required
for the originally scheduled run. Gallus shall not commence work with respect to
a Change Order unless authorized in writing. Any disagreement between the
Parties concerning a Change Order (including the failure of the Parties to agree
upon a mutually acceptable Change Order) shall be resolved in accordance with
the dispute-resolution procedures set forth in Section 17.

 

 

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10. Confidential Information/Legal Proceedings/Publicity.

 

(a)          In addition to any confidentiality obligations between the Parties
existing prior to the Effective Date, each Party (the “Receiving Party”) agrees
that it shall use the other Party’s (the “Disclosing Party’s”) Confidential
Information solely to conduct the activities contemplated under this Agreement
and for no other purpose. Confidential Information of a Disclosing Party shall
only be disclosed to the those employees and agents of the Receiving Party or of
Receiving Party’s Affiliates who have a need to know such Confidential
Information and only to the extent necessary in order to fulfill the Receiving
Party’s obligations or exercise the Receiving Party’s rights under this
Agreement, who have been informed of the confidential nature of such information
and who are obligated by written agreement to comply with confidentiality
provisions no less restrictive than those set forth in this Agreement.
Notwithstanding the foregoing, the Receiving Party shall not be prevented from
using or disclosing any portion of the Disclosing Party’s Confidential
Information that: (i) is or becomes publicly available other than as a result of
a breach of this Agreement by the Receiving Party; (ii) is disclosed to the
Receiving Party by a Third Party which the Receiving Party reasonably believes
is entitled to disclose it without restriction; (iii) is already known to the
Receiving Party as shown by its prior written records; (iv) is independently
developed by employees of the Receiving Party that were not privy to nor had
access to such Confidential Information or (v) is required by any Applicable
Law, order decision, decree, subpoena or other legal process to be disclosed. If
such disclosure is requested by legal process, the Receiving Party will notify
the Disclosing Party of this request promptly prior to any disclosure and
cooperate with the Disclosing Party to oppose such disclosure by appropriate
legal action and thereafter the Receiving Party will disclose only the minimum
information required to be disclosed in order to comply.

 

(b)          Gallus will not transfer any Customer Provided Materials to any
Third Party without Customer’s written permission, unless such transfer is to a
pre-approved subcontractor and is consistent with the Program.

 

(c)          If Gallus becomes obliged to provide testimony or records regarding
the Program in any legal or administrative proceeding, Customer shall reimburse
Gallus for its reasonable out-of-pocket costs plus a reasonable hourly fee for
its employees or representatives at Gallus’ standard commercial rates.

 

(d)          Neither Party shall make a press release, announcement or other
formal publicity relating to the transactions which are the subject of this
Agreement, or any ancillary matter, without first obtaining the prior written
consent of the other Party (such consent not to be unreasonably withheld). The
Party wishing to make such release, announcement or publicity shall provide a
copy of the text thereof to the other Party at least ten (10) days prior to the
proposed release.

 

11. Work Product; Records.

 

(a)          All work outputs (e.g., reports) will be prepared on Gallus’
standard format unless otherwise specified in the Work Statement.

 

 

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(b)          For the longer of seven years from the date of manufacture or (ii)
the time required by Applicable Law (the “Retention Period”), Gallus shall keep
and maintain records sufficient to substantiate and verify its duties and
obligations relating to Program. In no event shall Gallus be required to store
such records for longer than the Retention Period. For clarity, Gallus shall be
entitled to retain all original documents relating to the Program and shall
provide to Customer an electronic and paper copy of all Batch Records and other
reports provided under this Agreement.

 

12. Intellectual Property.

 

(a)          Each Party acknowledges and agrees that the performance of both of
Parties’ activities contemplated hereunder is subject to the terms and
conditions set forth on Appendix 4 with respect to certain third party property
and rights.

 

(b)          As between the Parties, except as expressly provided in this
Agreement, each Party will retain exclusive right, title and interest in and to
its Background Technology and all Improvements thereto. Except as expressly
provided in this Agreement, neither Party has, by virtue of this Agreement, any
right, title, or interest to or in the other Party’s Background Technology. Each
Party hereby assigns to the other Party, and agrees to assign to the other Party
all of its right, title and interest in or to such other Party’s Background
Technology.

 

(c)          At Customer’s request, Gallus will assign to Customer any interest
Gallus may have in any Product Invention; provided, that Customer requests such
assignment, in writing, within one year of the discovery of such Product
Invention. If Customer requests in writing, Gallus will, at Customer’s expense,
execute any and all applications, assignments or other instruments and give
testimony which shall be necessary to apply for and obtain Patents with respect
to a Product Invention and Customer shall compensate Gallus at its standard
commercial rate for the time devoted to such activities and reimburse it for
expenses incurred.

 

(d)          Notwithstanding anything to the contrary herein, Gallus shall
retain all rights in and to the Gallus Technology. To the extent that Customer
retains any interest in such Gallus Technology, Customer hereby assigns to
Gallus and agrees to assign to Gallus all of Customer’s right, title and
interest in or to such Gallus Technology.

 

(e)          Customer hereby grants to Gallus a non-exclusive, royalty-free
license to use Customer’s Background Technology, Product Inventions and any
other Technology provided to or made available to Gallus hereunder for the sole
purpose of performing Gallus’ obligations hereunder.

 

(f)          In the event that any Background Technology of Gallus or Gallus
Technology is incorporated into the Process hereunder, Gallus hereby grants to
Customer a non-exclusive, worldwide, paid-up license to use such Background
Technology or Gallus Technology solely to the extent necessary to practice the
Process solely in connection with the development of Product. The foregoing
license shall only apply to such Background Technology of Gallus or Gallus
Technology as is used by Gallus in its performance hereunder and incorporated
into the Process, and for which Customer cannot develop or acquire an
alternative technology without substantial expense or delay.

 

(g)          Notwithstanding Sections 10 or 12, Gallus reserves the right to
utilize data generated during the course of the Program to support applications,
assignments or other instruments necessary to apply for and obtain Patents with
respect to Gallus Technology. Gallus shall notify Customer in advance of any
such application.

 

 

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13. Independent Contractor. Gallus shall perform the Services as an independent
contractor of Customer and shall have complete and exclusive control over its
Facility, equipment, employees and agents. Nothing in this Agreement or other
arrangements for which it is made shall constitute Gallus, or anyone furnished
or used by Gallus in the performance of the Services, as an employee, joint
venture, partner, or servant of Customer. Gallus also agrees that it shall not
have any rights to receive any employee benefits such as health insurance and
accident insurance, sick leave or vacation as are in effect generally for
employees of Customer. Neither Party will enter into any agreements or incur
obligations on behalf of the other Party, nor commit the other Party in any
other manner without prior written consent from a duly authorized officer or
representative of such other Party.

 

14. Insurance. During the performance of the Services, Gallus agrees to maintain
a standard property insurance policy covering the Product and Materials while
under control and care of Gallus. Customer agrees to maintain insurance
policy(ies) as set forth in Appendix 5. Such policy(ies) shall cover the Cell
Line, Product and Materials or any harms caused by the Cell Line, Product and
Materials, and will name Gallus as an additional insured under such policy(ies)
at no cost to Gallus. Customer further agrees to provide Gallus with a
Certificate(s) of Insurance issued to Customer for an insurance policy or
policies directed to the aforementioned insurance coverage, in which Gallus is
named as an additional insured. Customer acknowledges that Customer shall bear
(i) risk of loss, destabilization, alteration, aggregation or contamination of
the Product or Materials due to any and all causes or hazards unless Gallus is
found to be grossly negligent or have engaged in intentional misconduct, (ii)
risk of injury to Persons or property alleged to have been caused by the design,
manufacture, testing, instructions or warnings accompanying the Cell Line,
Product or Materials or the use or unavailability of the Cell Line, Product or
Materials, including patent or other Intellectual Property Rights of Third
Parties alleged to have been infringed by the manufacture, use, importation, or
sale of the Product or Materials.

 

15. Shipping. Gallus shall package for shipment Product, samples or other
materials in accordance with the Work Statement and Customer’s written
instructions and at the Customer’s expense. All shipments will be EX Works
(Incoterms 2010) the Facility and Customer shall bear all packaging, shipping
and insurance charges. Gallus will pass through actual shipping charges plus
handling and administrative charges as set forth in the Work Statement. Delivery
of Product, samples or other materials by Gallus shall be deemed to have taken
place upon delivery to carrier at the Facility. Title and risk of loss shall
transfer to Customer on transfer to carrier at the Facility. Gallus shall accept
no liability or responsibility and risk associated with failure of the Product
to meet Specifications once this transfer has occurred. Gallus reserves the
right to retain representative samples of Product for record keeping, testing
and regulatory purposes.

 

16. Contamination. In the event that Customer supplies Product-Dedicated
Equipment, Materials or Product, and the handling or use of such
Product-Dedicated Equipment, Materials or Product at the Facility in accordance
with Gallus SOP and the terms of this Agreement results in contamination of
equipment, facilities, personnel of Gallus or any Third Party by noxious or
toxic agents, infectious agents (including any microbiological or viral agents
of infection (e.g., bacteria, fungae, mycoplasmas, prions, and viruses)) and/or
corrosive agents (collectively, “Contaminants”), Customer assumes full
responsibility and liability for any and all resulting damages. This provision
will not apply to the extent that Customer does not supply, directly or
indirectly, any Product-Dedicated Equipment, Materials or Product.

 

 

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17. Dispute Resolution.

 

(a)          In the event any dispute shall arise between the Customer and
Gallus with respect to any of the terms and conditions of this Agreement or the
Program that cannot be resolved by the Customer and Gallus Program Managers or
by the Steering Committee, then senior executives of the Customer and Gallus
shall meet as promptly as practicable after notice of such dispute to resolve in
good faith such dispute.

 

(b)          If the Customer and Gallus are unable to satisfactorily resolve the
dispute, then such dispute shall be finally settled by arbitration in accordance
with this Section 17. The arbitration will be held in New York, New York, and
except as noted below, shall be conducted in accordance with the rules of the
American Arbitration Association (or such successor organization) by one
mutually agreeable arbitrator. If the Parties cannot agree on an arbitrator
within a reasonable period of time, an arbitrator will be appointed by the
American Arbitration Association (or such successor organization). The
arbitrator shall have no authority to vary from or ignore the terms of this
Agreement and shall be bound by controlling law. The Parties may seek judicial
intervention for emergency relief, such as restraining orders and injunctions
where appropriate.

 

(c)          Any decision by the arbitrator shall be binding upon the Parties
and may be entered as final judgment in any court having jurisdiction. The cost
of any arbitration proceeding shall be borne by the Parties as the arbitrator
shall determine if the Parties have not otherwise agreed. The arbitrator shall
render his or her final decision in writing to the Parties.

 

18. Indemnification.

 

(a)          Customer shall indemnify and hold harmless Gallus and its
Affiliates and each of its directors, officers, employees and shareholders (the
“Gallus Parties”) against any and all Third Party charges, complaints, actions,
suits, proceedings, hearings, investigations, claims and demands (“Claims”)
imposed upon a Gallus Party and associated damages awards, deficiencies,
settlement amounts, defaults, assessments, fines, dues, penalties, costs, fees,
liabilities, obligations and expenses payable or awarded to a Third Party with
respect to a Claim, together with all reasonable documented out-of-pocket costs
and expenses incurred in defending against or complying with any Claims of a
Third Party in accordance with the terms of this Agreement (collectively,
“Losses”) suffered or incurred in consequence of the following:

 

 

(i)

any material failure by Customer to perform any obligations under this Agreement
and any un-remedied breach by Customer of the representations, warranties or
covenants given in this Agreement;

 

 

(ii)

any infringement or alleged infringement or breach of any Third Party’s rights,
including Intellectual Property Rights, by a Party by use of the Product,
Process, Customer’s Confidential Information, Customer’s Background Technology
and/or Customer Provided Materials in the performance of the Program in
accordance with the terms and conditions of this Agreement;

 

 

(iii)

any product liability or other claims relating to the Product or Customer
Provided Materials including any derivatives of the foregoing, conjugated form
or formulation of the same to the extent such claim is based on the sale,
marketing, distribution or use of the Product following Gallus’ release; or

 

 

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(iv)

the negligence of Customer in relation to the use, processing, storage or
distribution of the Product or any derivative, conjugated form or formulation
thereof;

 

provided, however, that Customer shall have no obligation to indemnify Gallus to
the extent that any such Claims and associated Losses are caused by Gallus’ own
negligence or willful misconduct in the performance of its rights and
obligations under this Agreement or by Gallus’ breach of a representation,
warranty or covenant herein or failure by Gallus to perform an express
obligation under this Agreement.

 

(b)          Gallus shall indemnify and hold harmless Customer and its
Affiliates and each of its directors, officers, employees and shareholders (the
“Customer Parties”) against any and all Third Party Claims and associated Losses
that the Customer Parties suffered or incurred in consequence of the following:

 

 

(i)

any material failure by Gallus to perform any obligations under this Agreement
and any un-remedied breach by Gallus of the representations, warranties or
covenants given pursuant to Section 20;

 

 

(ii)

any infringement or alleged infringement or breach of any Third Party’s rights,
including Intellectual Property Rights, by any Party by use of the Gallus
Technology, Gallus’ Confidential Information and/or Gallus’ Background
Technology in the performance of the Program in accordance with the terms and
conditions of this Agreement; or

 

 

(iii)

the negligence of Gallus in relation to the use, processing or storage of the
Product or any derivative, conjugated form or formulation thereof;

 

provided, however, that Gallus shall have no obligation to indemnify Customer to
the extent that any such Claims and associated Losses are caused by Customer’s
own negligence or willful misconduct in the performance of its rights or
obligations hereunder or by Customer’s breach of a representation, warranty or
covenant herein or failure by Customer to perform an express obligation under
this Agreement.

 

(c)          Upon receipt of notice of any Claim that may give rise to a right
of indemnity from the other Party hereto, the Party seeking indemnification (the
“Indemnified Party”) shall give written notice thereof to the other Party, (the
“Indemnifying Party”) of the Claim for indemnity. Such Claim for indemnity shall
indicate the nature of the Claim and the basis therefore. Promptly after a claim
is made for which the Indemnified Party seeks indemnity, the Indemnified Party
shall permit the Indemnifying Party, at its option and expense, to assume the
complete defense of such Claim, provided, that, (i) the Indemnified Party will
have the right to participate in the defense of any such Claim at its own cost
and expense; (ii) the Indemnifying Party will conduct the defense of any such
Claim with due regard for the business interests and potential related
liabilities of the Indemnified Party; and (iii) the Indemnifying Party will,
prior to making any settlement, consult with the Indemnified Party as to the
terms of such settlement. The Indemnifying Party will not, in defense of any
such Claim, settle or consent to an adverse judgment in any such claim, demand,
action or other proceeding that adversely affects the rights or interests of any
Indemnified Party or imposes additional obligations (financial or otherwise) on
such Indemnified Party, without the prior express written consent of such
Indemnified Party (such consent not to be unreasonably withheld). After notice
to the Indemnified Party of the Indemnifying Party’s election to assume the
defense of such Claim, the Indemnifying Party shall only be liable to the
Indemnified Party for such reasonable legal or other expenses subsequently
incurred by the Indemnified Party in connection with the defense thereof at the
request of the Indemnifying Party. As to those Claims with respect to which the
Indemnifying Party does not elect to assume control of the defense, the
Indemnifying Party shall be liable for all reasonable legal or other expenses
incurred by the Indemnified Party in connection with the defense thereof and the
Indemnified Party will afford the Indemnifying Party an opportunity to
participate in such defense at the Indemnifying Party’s own cost and expense,
and will not settle or otherwise dispose of any of the same without the consent
of the Indemnifying Party (such consent not to be unreasonably withheld,
conditioned or delayed.) If Gallus shall be obliged to provide testimony or
records regarding the subject matter of this Agreement in any legal or
administrative proceeding not covered by the indemnity set forth above, Customer
shall reimburse Gallus for its reasonable out-of-pocket costs plus a reasonable
hourly fee for its employees or representatives at Gallus’ standard commercial
rates. If Customer shall be obliged to provide testimony or records regarding
the subject matter of this Agreement in any legal or administrative proceeding
pursuant to any general inspection of Gallus’ Facility or operations, Gallus
shall reimburse Customer for its reasonable out-of-pocket costs plus a
reasonable hourly fee for its employees or representatives at cost.

 

 

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19. Limitations Liability.

 

(a)     Consequential Damages Waiver. EXCEPT FOR AMOUNTS PAYABLE TO THIRD
PARTIES PURSUANT TO SECTION 18 OR BREACHES OF A PARTY’S CONFIDENTIALITY
OBLIGATIONS UNDER SECTION 10, UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE
LIABLE TO THE OTHER PARTY OR ANY THIRD PARTY FOR INCIDENTAL, INDIRECT,
CONSEQUENTIAL OR SPECIAL DAMAGES ARISING IN CONNECTION WITH THIS AGREEMENT, THE
WORK STATEMENT OR ANY DOCUMENTS OR APPENDICES RELATED THERETO. IN NO EVENT SHALL
GALLUS’ LIABILITY UNDER THIS AGREEMENT EXCEED THE SERVICE FEES RECEIVED BY
GALLUS WITH RESPECT TO THE BATCH GIVING RISE TO THE LIABILITY IN QUESTION. THE
LIMITATIONS OF LIABILITY REFLECT THE ALLOCATION OF RISK BETWEEN THE PARTIES. THE
LIMITATIONS SPECIFIED IN THIS SECTION 19(A) WILL SURVIVE AND APPLY EVEN IF ANY
LIMITED REMEDY SPECIFIED IN THIS AGREEMENT IS FOUND TO HAVE FAILED OF ITS
ESSENTIAL PURPOSE.

 

20. Representations, Warranties and Covenants.

 

(a)          Customer hereby represents, warrants and covenants to Gallus that
the Customer Provided Materials will be provided to Gallus free and clear of all
liens and encumbrances and will be free of Contaminants.

 

(b)          Customer will notify Gallus immediately if Customer knows or should
know that it is no longer entitled to supply the Cell Line, Materials, process
patents, Products, any other materials and/or the Customer Confidential
Information to Gallus or that the use by Gallus of such materials and/or
information infringes or is alleged to infringe any rights (including any
intellectual or industrial property rights) vested in any Third Party.

 

(c)          Customer hereby represents, warrants and covenants to Gallus that
it will comply with all Applicable Laws relating to the use, sale, distribution
and testing of the Materials, Cell Line and Product and that such proper use,
sale, distribution and testing of the Materials, Cell Line and Product pose no
environmental hazards.

 

(d)          Customer hereby represents, warrants and covenants to Gallus that
any technical or regulatory information or documentation supplied or that will
be supplied by Customer or on its behalf to Gallus (including process details,
analytical methods, Specifications, development reports, technology transfer
documents, plans, engineering documents and other documents) and required for
execution of the Program is accurate and suitable for its intended use.

 

 

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(e)          Each Party hereby represents, warrants and covenants to the other
Party that, as of the Effective Date, it has full power and authority to enter
into, deliver and perform its obligations under this Agreement, and it has taken
all action required to authorize the execution and delivery of this Agreement
and to consummate the transactions contemplated hereby and the Person signing
this Agreement on behalf of such Party has been duly authorized to act on behalf
of and to bind such Party.

 

(f)          Gallus warrants and represents that (i) the Program will be
performed in accordance with standard industry custom, and (ii) it will use
commercially reasonable efforts to achieve the estimated deadlines for the
Program.

 

(g)          Gallus warrants and represents that the Services performed
hereunder will conform in all material respects to the applicable Work Statement
(as may be amended from time to time pursuant to Section 9, above, and will be
free from an uncorrected Gallus Failure.

 

(h)          Gallus’s sole liability and Customer’s sole and exclusive remedy
for a breach by Gallus of a warranty hereunder shall be for Gallus to repeat the
applicable Services at no additional cost to Customer, provided that if the
applicable Services include a manufacturing run, Customer will be responsible
for the cost of Materials for such repeated manufacturing run.

 

(i)          THE EXPRESS WARRANTIES OF GALLUS SET FORTH IN THIS SECTION 20 ARE
IN LIEU OF ALL CONDITIONS, WARRANTIES AND STATEMENTS IN RESPECT OF THE PROGRAM
AND/OR THE PRODUCT, WHETHER EXPRESS OR IMPLIED BY STATUTE, CUSTOM OF THE TRADE
OR OTHERWISE INCLUDING ANY SUCH CONDITION, WARRANTY OR STATEMENT RELATING TO THE
DESCRIPTION OR QUALITY OF THE PRODUCT UPON COMPLETION OF GALLUS’ SERVICES, ITS
MERCHANTABILITY ITS FITNESS FOR A PARTICULAR PURPOSE OR USE UNDER ANY
CONDITIONS, WHETHER OR NOT KNOWN TO GALLUS, AND THAT ANY SUCH CONDITION,
WARRANTY OR STATEMENT IS EXCLUDED FROM THIS AGREEMENT.

 

21. Force Majeure. Either Party shall be excused from performing its respective
obligations under this Agreement, except for any obligation to make payment
under a validly issued invoice, if its performance is delayed or prevented by
any event beyond such Party’s reasonable control, including without limitation,
acts of God, fire, explosion, weather, disease, war, terrorism, insurrection,
civil strife, riots, labor dispute or strike, government action, provided that
such performance shall be excused only to the extent of and during such
disability. Any time specified for completion of performance in the Work
Statement falling due during or subsequent to the occurrence of any or such
events shall be automatically extended for a period of time reasonably necessary
to recover from such disability. Gallus will promptly notify Customer if, by
reason of any of the events referred to herein, Gallus is unable to meet any
such time for performance specified in the Work Statement. If any part of the
Program is invalid as a result of such disability, Gallus will, upon written
request from Customer, but at Customer’s sole cost and expense, repeat that part
of the Program affected by the disability.

 

22. Use of Names. Neither Party shall use the name or trademarks of the other
Party in the promotion of its business without the prior written consent of such
other Party.

 

 

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23. Term; Termination.

 

(a)          This Agreement shall commence on the Effective Date and shall
continue in full force and for the longer of (i) a period of five (5) years or
(ii) through the completion of Services, unless earlier terminated in accordance
with this Section 23.

 

(b)          Subject to Section 23(e), this Agreement may be terminated in the
following ways:

 

 

(i)

The Parties may terminate this Agreement by mutual written agreement at any time
prior to Completion.

 

 

(ii)

Either Party may terminate this Agreement for any reason by giving the other
Party no less than sixty (60) days written notice.

 

 

(iii)

Gallus may terminate this Agreement at any time up to completion of the Process
Demonstration Stage by giving written notice to Customer if Gallus reasonably
believes that it will be unable to carry out and complete the Services in
accordance with the Work Statement due to discovery of a factor which:

 

(A)     adversely affects the development of the Process; or

 

(B)     adversely affects, or is likely to adversely affect, production of
Product by the Process when conducted in accordance with the Gallus SOP;

 

Provided that in either case the factor was not known and could not reasonably
have been known at the commencement of the applicable Stage of the Program and
provided further that Gallus has used commercially reasonable efforts in its
attempts to address the factor prior to such termination.

 

 

(iv)

Either Party may terminate this Agreement if the other is in material breach of
this Agreement and does not rectify such breach (if such breach is capable of
remedy) within fourteen (14) calendar days for monetary defaults or thirty (30)
calendar days for non-monetary defaults (or such additional time reasonably
necessary to cure such non-monetary default provided the breaching Party has
commenced a cure within the thirty (30) day period (or such other period as is
reasonably practicable) and is diligently pursuing completion of such cure)
after receipt by the breaching Party of written notice of such default.

 

 

(v)

Either Party may terminate this Agreement immediately by giving written notice
if the other has a liquidator, receiver, manager receiver or administrator
appointed, or ceases to continue trading or is unable to pay debts or the
equivalent occurs in any jurisdiction in which the other is resident or carried
on business.

 

(c)          The following provisions shall apply if the Agreement is terminated
by mutual agreement under Section 23(b)(i), Customer terminates for convenience
under Section 23(b)(ii), or Gallus terminates due to technical issues under
Section 23(b)(iii) or for Customer’s material breach or insolvency under Section
23(b)(iv) or 23(b)(v):

 

 

(i)

Customer shall pay to Gallus all sums incurred up to the date of termination but
not yet paid, including sums which have been incurred but not invoiced at the
date of termination (including all sums due in relation to items referred to in
Section 8), and

 

 

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(ii)

Customer shall pay to Gallus, except where Gallus terminates due to technical
issues under Section 23(b)(iii) relating to cancellation of such of the Non-GMP
Stages as may be uncompleted at termination (including the effect of
redeployment of the Program team), the amounts set forth in Appendix 6 to cover
Gallus’s costs to wind the Program down. For the avoidance of doubt, Gallus
shall retain all deposits or advance payments made under an applicable Work
Statement, including without limitation, manufacturing suite reservation fees.

 

(d)          If the Agreement is terminated by Customer for Gallus’s un-remedied
material breach under Section 23(b)(iv), Customer’s total remedy for such breach
shall be equivalent to any monies paid to Gallus, less a sum in consideration
for Services provided by Gallus in carrying out the Program and completed as of
the date of termination but not affected by the breach. In the absence of
agreement upon such sum, the provisions of Section 17 shall apply. On
termination for any reason, Gallus will return, ship, or destroy Materials at
the Customer’s direction and sole expense, including expenses relating to
shipping costs, return fees to vendors and any unreimbursed costs on any
non-refundable or non-returnable items.

 

(e)          The termination of this Agreement for any reason shall not relieve
either Party of its obligation to the other Party for obligations in respect of
compensation for services performed prior to the effective date of such
expiration or termination. The following provisions shall survive any expiration
or termination of this Agreement: Sections 1, 2(c), 2(d), 4(c), 4(d), 5(b), 8,
10, 11(b), 12, 13, 14, 16 through 20 and 22 through 29.

 

(f)          For purposes of this Section 23, a “material breach” of a Party
shall mean that Party’s failure to perform a substantial part or an essential
term of this Agreement, such that the non-breaching Party receives substantially
less than it bargained for under a reasonable interpretation of this Agreement.

 

24. Assignment. This Agreement may not be assigned or otherwise transferred by
either Party without the prior written consent of the other Party; provided,
however, either Party may, without such consent, assign this Agreement (i) in
connection with the transfer or sale of all or substantially all of the assets
of such Party to which this Agreement relates or, in the case of Customer, the
Cell Line or Product; (ii) in the event of the merger or consolidation of a
Party hereto with another company; or (iii) to any Affiliate of the assigning
Party. Any purported assignment in violation of the preceding sentence shall be
void. Any permitted assignee shall assume all obligations of its assignor under
this Agreement, provided however that if Customer assigns this Agreement to an
Affiliate, the Customer shall continue to remain obligated under this Agreement.

 

25. Notice. All notices to be given as required in the Agreement shall be in
writing and may be delivered personally, or mailed either by a reputable
overnight carrier with required receipt signature or certified mail, postage
prepaid to the Parties at the addresses set forth above or at such other address
as either Party may provide by written notice to the other Party in accordance
with the provisions of this Section 25 Such notice shall be effective: (i) on
the date sent, if delivered personally or by facsimile (receipt of which is
confirmed); (ii) the date after delivery if sent by overnight carrier; or (iii)
on the date received if sent by certified mail.

 

(i)           If to Customer

 

OmniBio Pharmaceutical, Inc.

5350 S. Roslyn Street, Suite 430

Greenwood Village, CO 80111

Attn: Bruce Schneider, CEO

e-mail: bschneider@omnibiopharma.com 

 

 

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If to Gallus:

 

Gallus BioPharmaceuticals, LLC

4766 LaGuardia Drive

St. Louis, MO 63134

Attn: Mark Bamforth, President & CEO
Facsimile: (314) 733-3888

 

 

26. Choice of Law. Subject to the dispute resolution procedures set forth in
Section 17, this Agreement, and all matters arising directly or indirectly
hereunder, shall be governed by, and construed in accordance with the laws of
the State of New York, without giving effect to its choice of law provisions.

 

27. Waiver/Severability. No waiver of any provision of this Agreement, whether
by conduct or otherwise, in any one or more instances shall be deemed to be or
be construed as a further or continuing waiver of any such provision, or of any
other provision or condition of this Agreement. The invalidity of any portion of
this Agreement shall not affect the validity, force or effect of the remaining
portions of this Agreement. If it is ever held that any provision hereunder is
too broad to permit enforcement of such provision to its fullest extent, such
provision shall be enforced to the maximum extent permitted by law.

 

28. Entire Agreement; Modification/Counterparts. This document (and the Work
Statement and Appendices attached hereto) sets forth the entire Agreement
between the Parties hereto with respect to the performance of the Program by
Gallus for Customer and as such, supersedes all prior and contemporaneous
negotiations, agreements, representations, understandings, and commitments with
respect thereto and shall take precedence over all terms, conditions and
provisions on any purchase order form or form of order acknowledgment or other
document purporting to address the same subject matter. This Agreement shall not
be waived, released, discharged, changed or modified in any manner except by an
instrument signed by the duly authorized officers of each of the Parties hereto,
which instrument shall make specific reference to this Agreement and shall
express the plan or intention to modify same. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument. In the event of any
conflict between this Agreement and the Work Statement, as it may be modified as
provided herein, the terms of this Agreement shall control. For purposes of
execution, facsimile signatures shall be deemed originals.

 

29. Construction. Except where the context otherwise requires, wherever used,
the singular shall include the plural, the plural the singular, the use of any
gender shall be applicable to all genders and the word “or” is used in the
inclusive sense (and/or). The headings and captions of this Agreement are for
convenience of reference only and in no way define, describe, extend or limit
the scope or intent of this Agreement or the intent of any provision contained
in this Agreement. The term “including” as used herein shall mean including,
without limiting the generality of any description preceding such term. The
language of this Agreement shall be deemed to be the language mutually chosen by
the Parties and no rule of strict construction shall be applied against either
Party hereto.

 

 

Development and Manufacturing Services Agreement

CONFIDENTIAL

 

 

 
A-19

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the Effective Date by their duly authorized representatives.

 

 

GALLUS BIOPHARMACEUTICALS, LLC   OMNI BIO PHARMACEUTICAL, INC.    

 

 

 

 

 

By:

 

 

By

 

 

Name:  

 

Name:

 

 

Title:  

 

Title:

 

 

 

          

 

 

 

 

 

 

 

 

 

 

 

 

 

Development and Manufacturing Services Agreement

CONFIDENTIAL

 

  

A-20