Exhibit 10.11

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

cause competitive harm if publicly disclosed.

MASTER SERVICES AGREEMENT

between

SAMSUNG BIOLOGICS CO., LTD.

and

CYTODYN INC.

 

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Table of Contents

 

SECTION 1

   DEFINITIONS      3  

SECTION 2

   RELATED AGREEMENTS AND EXHIBITS      10  

SECTION 3

   MANAGEMENT OF SERVICE      10  

SECTION 4

   SERVICES      13  

SECTION 5

   SERVICE DESCRIPTIONS      14  

SECTION 6

   CHANGES TO THE SPECIFICATIONS, ANALYTICAL METHODS, MANUFACTURING PROCESS,
FACILITY OR EQUIPMENT      20  

SECTION 7

   REGULATORY APPROVALS AND INSPECTIONS      21  

SECTION 8

   QUALITY COMPLIANCE      22  

SECTION 9

   CONSIDERATION AND PAYMENT TERMS      23  

SECTION 10

   CONFIDENTIALITY      24  

SECTION 11

   OWNERSHIP OF MATERIALS AND INTELLECTUAL PROPERTY      26  

SECTION 12

   WARRANTIES      26  

SECTION 13

   INDEMNIFICATION      27  

SECTION 14

   DISCLAIMER OF CONSEQUENTIAL DAMAGES; LIMITATION OF LIABILITY      28  

SECTION 15

   TERM AND TERMINATION OF AGREEMENT      29  

SECTION 16

   ARBITRATION      33  

SECTION 17

   MISCELLANEOUS      34  

 

 

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MASTER SERVICES AGREEMENT

This Master Services Agreement (this “MSA”) is made and entered into as of the
date of last signature below (the “Effective Date”) by and between CytoDyn Inc.,
a Delaware corporation having its principal place of business at 1111 Main
Street, Suite 660, Vancouver, WA 98660 (“Client”), and Samsung BioLogics Co.,
Ltd., a company with offices at 300, Songdo bio-daero, Yeonsu-gu, Incheon,
21987, Republic of Korea (“SBL”). Client and SBL are sometimes referred to
herein individually as a “Party” and collectively as the “Parties”.

WHEREAS, Client and SBL wish to enter into a business relationship whereby SBL
will provide Client with certain biologics manufacturing and/or development
services;

NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements hereinafter set forth and for other valuable consideration, the
Parties agree as follows:

SECTION 1 DEFINITIONS

Each of the following capitalized terms as used in this MSA, whether in the
singular or plural, shall have the respective meanings set forth below.

 

1.1

“Acceptance Procedure” means the review of the Batch Related Documents and any
additional test(s) of a Batch of Product which are performed to verify that the
Product delivered meets the Specifications and complies with Regulatory
Authority requirements, which are conducted by Client after SBL’s release of a
Batch of Product, to determine whether to accept the same, in accordance with
the applicable PSA and QAG.

 

1.2

“Affected Party” is defined in Section 17.3.

 

1.3

“Affiliate” means any corporation, company, partnership or other entity which
directly or indirectly, controls, is controlled by or is under common control
with either Party hereto. A corporation or other entity shall be regarded as
controlling another corporation or other entity if it owns or directly or
indirectly controls more than fifty percent (50%) of the voting stock or other
ownership interest of the corporation or other entity, or if it possesses,
directly or indirectly, the power to direct or cause the direction of the
management and policies of the corporation or other entity or the power to elect
or appoint more than fifty percent (50%) of the members of the governing body of
the corporation or other entity.

 

1.4

“Applicable Laws” means any and all applicable laws of any jurisdiction which
are applicable to the Services in this MSA or any PSAs that may be in effect
from time to time, and shall include all statutes, enactments, acts of
legislature, laws, ordinances, rules, regulations, notifications, guidelines,
directions, directives and orders of any Regulatory Authority, statutory
authority, stock exchange, securities regulatory agency, tribunal, board, or
court or any central or state government or local authority or other
governmental entity in such jurisdictions.

 

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1.5

“Background IP” means any Intellectual Property related to a Product and/or its
use, or the Manufacture of such Product, in each case, which is owned and/or
controlled by a Party prior to the Effective Date or outside or not relating to
the performance of the MSA.

 

1.6

“Batch” means the quantity of Product Manufactured by SBL which results from a
single run of the applicable Manufacturing Process.

 

1.7

“Batch Record” is defined in the applicable QAG.

 

1.8

“Batch Related Documents” means Manufacturing Documentation in support of the
SBL’s release of a Product.

 

1.9

“Binding Year” shall be defined in the applicable PSA.

 

1.10

“Cell Line” means in respect of a given Product, the cell bank vials supplied or
otherwise made available to SBL by Client to perform the Services.

 

1.11

“Certificate of Analysis” is defined in the applicable QAG.

 

1.12

“Certificate of Compliance” is defined in the applicable QAG.

 

1.13

“Change” is defined in Section 6.1.

 

1.14

“Client” is defined in the preamble.

 

1.15

“Client Materials” means Client reagents and other materials supplied by Client
or its third party supplier to be used in the Service hereunder, as each is
further defined in the PSA and/or applicable QAG. In the case of a Drug Product
PSA, Client Materials shall also include Drug Substance and/or other active
pharmaceutical ingredients, which may or may not be Manufactured by SBL.

 

1.16

“Client Technology” means know-how, technology, research and other information
of Client including and relating to the Manufacturing Process, analytical
methods, quality control analysis, specifications, transportation and storage
requirements provided by Client to SBL in connection with this MSA and
applicable PSA.

 

1.17

“Clinical Product” means a Drug Substance or Drug Product which is Manufactured
by SBL pursuant to a PSA and which is to be used by Client in a research study
or studies that prospectively assigns human participants or groups of humans to
one or more health-related interventions to evaluate the effects on health
outcomes.

 

1.18

“Commercial Product” means a Drug Substance or Drug Product which is
Manufactured by SBL which is intended for commercial sale and use by humans and
for importation or exportation into countries or regions designated in each PSA.

 

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1.19

“Commercially Reasonable Efforts” means with respect to an activity to be
carried out by a Party pursuant to this MSA, the carrying out of such activity
in a diligent manner, and using efforts and resources comparable to the efforts
and resources commonly used in the contract manufacturing of biologics (in the
case of SBL) or in the biopharmaceutical industry (in the case of Client) by
companies with resources and expertise similar to those of such Party.
“Commercially Reasonable Efforts” requires prompt assignment of responsibility
for such task or activity to specific qualified employee(s) and allocation of
resources designed to advance progress with respect to such task or activity but
does not require the taking of actions (a) which would require or is likely to
require a material adverse change in such Party’s existence or solvency, or
significant assets, (b) disproportionate to the benefits received under this
MSA, or (c) would require either Party to violate Applicable Laws or materially
breach any existing contractual commitments with third parties which were
entered into prior to the Effective Date.

 

1.20

“Common Raw Materials” is defined in Section 5.3.1.

 

1.21

“Confidential Information” means any data, know-how and other information,
whether technical or non-technical disclosed by one Party (hereinafter the
“Disclosing Party”) or otherwise became known to the other Party (hereinafter
the “Receiving Party”) hereunder relating to the subject matter of the MSA,
regardless of form or manner of disclosure, i.e., whether disclosed in writing,
in electric file or format or in other tangible manner, or orally, visually or
in other intangible manner.

 

1.22

“Control” (including, with correlative meanings, “Controlled”) means possession,
directly or indirectly, of power to direct or cause the direction of management
or policies (whether through ownership of securities or other ownership
interest, by contract or otherwise) of that person or entity and/or the
ownership of more than 50% of the voting shares of that person or entity.

 

1.23

“Core Team” is defined in Section 3.3.

 

1.24

“Current Good Manufacturing Practices” or “cGMP” means current good
manufacturing practices and regulations applicable to the Manufacture of Product
that are promulgated by any Regulatory Authority, including as promulgated under
and in accordance with (i) the U.S. Federal Food, Drug and Cosmetic Act, Title
21 of the U.S. Code of Federal Regulations, Parts 210, 211, 600, 601 and 610,
(ii) relevant EU legislation, including European Directive 2003/94/EC or
national implementations of that Directive, (iii) relevant guidelines, including
the EU Guidelines for Good Manufacturing Practices for Medicinal Products
(Eudralex Vol. 4 and Annexes thereto), (iv) International Conference on
Harmonisation Good Manufacturing Practice Guide for Active Pharmaceuticals
Ingredients and (v) and any analogous set of regulations, guidelines or
standards as defined, from time to time, by any relevant Regulatory Authority
having jurisdiction over the development, manufacture or commercialization of
the Product, as applicable, in each case as in effect as of the date such
manufacturing for the Product are or were conducted.

 

1.25

“Damages” means any direct damages, costs, expenses, fines, penalties (including
reasonable attorneys’ fees and costs), losses and liabilities.

 

1.26

“Dispute” is defined in Section 16.1.

 

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1.27

“Drug Product” means a finished or intermediate dosage form that contains a Drug
Substance, generally, but not necessarily, in association with one or more other
ingredients.

 

1.28

“Drug Substance” means an active ingredient that is intended to furnish
pharmacological activity or other direct effect in the diagnosis, cure,
mitigation, treatment, or prevention of disease or to affect the structure or
any function of the human body, but does not include intermediates used in the
synthesis of such ingredient.

 

1.29

“Effective Date” is defined in the preamble.

 

1.30

“EMA” means the European Medicines Agency, or any successor agency.

 

1.31

“Engineering Batch” means a commercial-scale Batch that is intended to
demonstrate the transfer of the Manufacturing Process to the Facility. After
Manufacture, Client shall have the right to make whatever further use of
non-cGMP Engineering Batches as it shall determine, provided that Client pays
for such Batches according to this MSA, and such use is not for human use and
does not violate any Applicable Laws. SBL makes no warranty that Engineering
Batches will meet cGMP or the Specifications.

 

1.32

“Facility” means one or more of the manufacturing facilities of SBL where the
Services shall be performed, located at 300, Songdo bio-daero, Yeonsu-gu,
Incheon, 21987, Republic of Korea.

 

1.33

“FDA” means the United States Food and Drug Administration or any successor
agency thereto.

 

1.34

“Firm Period” shall be defined in the applicable PSA.

 

1.35

“Force Majeure Event” is defined in Section 17.3.

 

1.36

“Implementation Plan and Budget” is defined in Section 6.2(b).

 

1.37

“Indemnified Party” is defined in Section 13.3.

 

1.38

“Indemnifying Party” is defined in Section 13.3.

 

1.39

“Intellectual Property” is means (a) patents, patent rights, provisional patent
applications, patent applications, designs, registered designs, registered
design applications, industrial designs, industrial design applications and
industrial design registrations, including any and all divisions, continuations,
continuations-in-part, extensions, restorations, substitutions, renewals,
registrations, revalidations, reexaminations, reissues or additions, including
supplementary certificates of protection, of or to any of the foregoing items;
(b) copyrights, copyright registrations, copyright applications, original works
of authorship fixed in any tangible medium of expression, including literary
works (including all forms and types of computer software, including all source
code, object code, firmware, development tools, files, records and data, and all
documentation related to any of the foregoing), pictorial and graphic works;
(c) trade secrets, technology, developments, discoveries and improvements, know-

 

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  how, proprietary rights, formulae, confidential and proprietary information,
technical information, techniques, inventions, designs, drawings, procedures,
processes, models, formulations, manuals and systems, whether or not patentable
or copyrightable, including all biological, chemical, biochemical,
toxicological, pharmacological and metabolic material and information and data
relating thereto and formulation, clinical, analytical and stability information
and data which have actual or potential commercial value and are not available
in the public domain; (d) trademarks, trademark registrations, trademark
applications, service marks, service mark registrations, service mark
applications, business marks, brand names, trade names, trade dress, names,
logos and slogans, Internet domain names, and all goodwill associated therewith;
and (e) all other intellectual property or proprietary rights, in each case
whether or not subject to statutory registration or protection.

 

1.40

“Joint Steering Committee” or “JSC” is defined in Section 3.2.1.

 

1.41

“Manufacturing” or to “Manufacture” means the manufacturing of the Product, and
any services relating to such manufacturing, including, but not limited to,
testing, quality control, documentations, archiving, and packaging, and up to
release of the Product, to be performed by SBL at the Facility under the MSA and
any applicable PSA.

 

1.42

“Manufacturing Documentation” means with respect to a given Product, the data
acquired and generated, documents and records describing or otherwise related to
the Manufacturing Process including, without limitation: documents and records
consisting of or containing process descriptions, requirements and
specifications; Client Materials and Specifications; analytical methods, process
trend and variability data; validations protocols and reports; process
development reports; Batch Records; Batch Related Documents, and SOPs,
including, without limitation, SOP’s for the Raw Materials handling, the
Manufacturing operations, equipment operation, in-process, final Product and
stability quality control testing, quality assurance, validation, storage and
shipping.

 

1.43

“Manufacturing Process” means, with respect to a given Product, the mutually
agreed production process and analytical methods for the Manufacturing of the
Product pursuant to the applicable PSA, as summarily described in the applicable
QAG and as described in the Manufacturing Documentation, as such process may be
changed from time to time in accordance with the MSA.

 

1.44

“Non-Affected Party” is defined in Section 17.3.

 

1.45

“Non-Conforming Product” means an entire Batch of Product that fails to conform
to the Specifications, cGMP (if applicable), and any/or other mutually agreed
upon written express requirements for SBL to follow under the applicable PSA and
the applicable QAG.

 

1.46

“Party” and “Parties” is defined in the preamble.

 

1.47

“Pilot Batch” means a Batch of Product designated as a pilot Batch which shall
not comply with cGMP and is not required to meet the Specifications.

 

1.48

“Pre-Approval Inspection” or “PAI” means an on-site inspection of the Facility
by the Regulatory Authority prior to granting the Regulatory Approval for a
Commercial Product as required by various Regulatory Authorities to ensure that
the Manufacturing Process and the Facility meet the appropriate requirements and
comply with cGMP.

 

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1.49

“Process Validation Batch” means a Batch of Commercial Product produced from a
process validation run conducted by SBL hereunder to (i) demonstrate and
document the consistency and reproducibility of the Manufacturing Process at the
Facility, and (ii) support the Regulatory Approval of both the Product
Manufactured and the Manufacturing Process at the Facility each as defined in
the Project Plan.

 

1.50

“Product” means Clinical Product or Commercial Product to be Manufactured by SBL
pursuant to this MSA and any applicable PSA.

 

1.51

“Product Purchase Commitment” is defined in Section 5.7.

 

1.52

“Product specific agreement” or “PSA” is defined in Section 2.1.

 

1.53

“Project Management Team Leader” is defined in Section 3.3.2.

 

1.54

“Project Plan” means a formal, approved document used to guide both project
execution and project control. The primary uses of the Project Plan are to
document planning assumptions and decisions, facilitate communication among
project stakeholders, and document approved scope, cost, and schedule baselines.
The Project Plan will contain the description and overall objectives of the
Services for Manufacturing a Product and may include, among other things:
(a) JSC and Core Team membership rosters, (b) change request procedures,
(c) details, intentions, and deliverables for Technology Transfer, (d) project
schedule, (e) detailed procurement plan, as needed, and (f) project budgets and
invoicing plans.

 

1.55

“PSA Effective Date” means the effective date of any PSA governed by this MSA.

 

1.56

“Purchase Order” is defined in Section 5.6.

 

1.57

“Quality Agreement” or “QAG” means that certain quality agreement that governs
the responsibilities related to quality systems and quality requirements for the
Product(s) Manufactured hereunder, including quality control, testing and
release of such Product(s) at the Facility entered into by the Parties.

 

1.58

“Quarter” means each period of three (3) consecutive calendar months beginning
on January 1, April 1, July 1, or October 1.

 

1.59

“Raw Materials” means those materials that are used in the Services, including,
but not limited to, chemicals, reagents, filters, excipients, disposable
consumables, and secondary packaging materials. Raw Materials exclude the Client
Materials.

 

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1.60

“Reference Standards” means standard materials prepared by Client and/or SBL in
accordance with the applicable QAG.

 

1.61

“Regulatory Approval” means all approvals, licenses, registrations or
authorizations thereof of any national, regional, state or local regulatory
agency, department, bureau or other governmental entity in any jurisdiction
where the Product is marketed or intended to be marketed, necessary for the
manufacture and sale of the Product, which manufacturing includes the
Manufacturing of the Products at the Facility.

 

1.62

“Regulatory Authority” means any national (e.g., the FDA), supra-national (e.g.,
the EMA), regional, state or local regulatory agency, department, bureau,
commission, council or other governmental entity, in any jurisdiction
responsible for granting the Regulatory Approval.

 

1.63

“SBL Assignable Error” means: [***].

 

1.64

“Service” or “Services” is defined in Section 2.1.

 

1.65

“Service Fee” is defined in Section 9.1.

 

1.66

“Specialized Raw Materials” is defined in Section 5.3.1.

 

1.67

“Specification(s)” means the criteria for the Products, Client Materials, or Raw
Materials, as the case maybe, which details are provided in documentation as
reviewed and approved in writing by the Parties.

 

1.68

“Standard Operating Procedure(s)” or “SOP(s)” means the standard operating
procedures established by and mutually agreed upon by both Parties regarding the
Manufacturing Process.

 

1.69

“Technology Transfer” means the activities by the Parties necessary to
Manufacture the Product for Client at the Facility as further described in the
applicable Project Plan which may include: (i) transfer of the Client Technology
and Client Material from Client to SBL; (ii) implementation of the Manufacturing
Process at the Facility, including establishing a small scale Manufacturing
Process model at SBL; (iii) Manufacturing Process fit activities, including
required small- and large-scale process development and validation work as
allocated between the Parties to SBL and process engineering required to modify
/ equip, qualify and validate the Facility for the Manufacturing of the
Commercial Product; (iv) stability testing, if applicable, for the Product
required for licensure; (v) comparability testing to the appropriate reference
product, and (vi) regulatory support for Regulatory Approvals.

 

1.70

“Term” is defined in Section 15.1.

 

1.71

“Warehouse” means SBL’s warehouse for storage of the Product located at 300,
Songdo bio-daero, Yeonsu-gu, Incheon, 21987, Republic of Korea.

 

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SECTION 2 RELATED AGREEMENTS AND EXHIBITS

 

2.1

Product specific agreements. Pursuant to one or more product specific agreements
entered into and mutually agreed from time to time by duly authorized
representatives of the Parties (“Product specific agreements” or “PSAs”), SBL
will perform manufacturing services for Client as specified in such PSAs and
applicable Project Plan and in accordance with the terms and conditions of this
MSA (“Services”). Each PSA shall refer to this MSA and contain as applicable
(i) a high level scope of work of the Services to be performed under such PSA
which describes key activities, (ii) the Product for which Samsung will perform
such Services for Client, (iii) a description of the Cell Line; (iv) fees to be
paid to SBL by Client for the Services with a general timing plan for invoicing
and a more detailed plan to be in the Project Plan, (v) if the Services pertain
to the manufacture of the Product, the number of batches of Product to be
manufactured by SBL and delivered to Client and the Specifications, (vi) any
other deliverables, (vii) the Samsung facility where the Services are to be
performed, and (viii) the Regulatory Approvals to be obtained by the Parties.
Services shall be governed by the terms and conditions of this MSA, the
applicable PSA, and any applicable Quality Agreement. In the event of a conflict
between a Quality Agreement and either any provision of this MSA or any PSA, the
MSA or PSA shall control except with respect to Product quality terms, in which
case, the Quality Agreement will control. In the event of a conflict between any
provision of this MSA and the PSA, this MSA shall control, except as explictly
specified in the PSA.

 

2.2

Project Plan. Concurrently with the execution of a PSA or within a reasonable
time after the PSA effective date, the Parties shall agree upon a Project Plan
which will specify in detail scope and schedule of the Services, including
Technology Transfer and Manufacture. The Project Plan shall also set forth the
JSC members (if applicable), Core Team members, and Project Management Team
Leader for the Services as well as the frequency and duration of meetings. The
Project Plan may be updated as needed by the mutual agreement of the Client and
SBL and is governed by and incorporated into the applicable PSA by reference. If
there is a conflict between the Project Plan and the applicable PSA, the PSA
shall control. If any of the assumptions on which the Parties have relied upon
in defining the scope of the activities required to effect the Technology
Transfer and/or other Services including but not limited to Manufacture, and the
associated timeframes, fees, expenditures and costs proves to be invalid, or if
for any reason it becomes apparent that additional activities are required as
part of or in connection with the Technology Transfer and/or other Services
including but not limited to Manufacture, the Parties shall (acting reasonably
and in good faith) discuss and seek to agree appropriate revisions to the
Technology Transfer activities, and associated timelines and pricing.

 

2.3

Quality Agreement (QAG). The Parties shall agree upon and finalize a Quality
Agreement within a reasonable period time after each PSA Effective Date which
shall cover such PSA and such Quality Agreement shall be incorporated into this
MSA. The Quality Agreement may be amended from time to time, subject to the
JSC’s approval followed by the Parties’ written agreement pursuant to
Section 17.9 (if applicable).

SECTION 3 MANAGEMENT OF SERVICE

 

3.1

General. Each Party will be responsible for its internal decision making process
and for reasonably informing the other Party of decisions affecting the Service
in a regular and timely manner. Without limiting the foregoing, the Parties
shall establish the joint committees or teams set forth herein to advise the
Parties on certain matters including, without limitation, the Facility
modification, the Technology Transfer, and optimization of the Manufacturing
operation relating to the Product.

 

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3.2

Joint Steering Committee.

 

  3.2.1

Formation and Composition. The applicable Project Plan will set forth a Joint
Steering Committee for that Product (the “Joint Steering Committee” or “JSC”) if
the Parties mutually agree that such JSC is necessary. The JSC will be a
cross-functional committee composed of an equal number of representatives
appointed by each of Client and SBL with each of Client and SBL having at least
three (3) representatives, and with one (1) representative from each of Client
and SBL having oversight for quality activities, and with one (1) representative
from each of Client and SBL having oversight for manufacturing and supply chain
activities, including the transfer and implementation of the Manufacturing
Process at the Facility. Either Party may replace any or all of its
representatives at any time. Such Party shall notify, in writing, of such
replacement to the other Party.

 

  3.2.2

Responsibilities. The JSC shall (i) establish and oversee the governance
structure for the Service including the formation of the subcommittee herein;
(ii) monitor any Facility modification and the Technology Transfer and
Manufacturing strategy of the Product at the Facility, including strategies for
the Regulatory Approval of the Facility to Manufacture the Product;
(iii) provide strategic guidance to the Core Team as required by the Project
Plan; (iv) conduct high level project stage reviews with the Core Team as
required by the Project Plan at appropriate milestones or completion of key
deliverables or a sequence of event to review and approve key deliverables,
evaluate the Core Team’s progress and performance, all in order to ensure that
the Manufacturing Process is being implemented appropriately; (v) advise on
and/or resolve business, manufacturing, supply chain, quality, regulatory or
other issues unresolved at the Core Team level; (vi) review and recommend for
approval by the Parties any changes to the MSA or the applicable PSA;
(vii) review and approve changes to the Specifications, analytical methods, the
Manufacturing Process, the Facility or equipment as escalated to the JSC by the
Core Team or by a Party pursuant to Section 3.6 below; (viii) review completion
of the Service; (ix) settle disputes or disagreements unresolved by a
subcommittee; and (x) perform such other functions as appropriate to further the
purposes of the MSA as determined by the Parties.

 

3.3

Core Team.

 

  3.3.1

Formation and Composition. The applicable Project Plan will set forth a Core
Team for that Product (the “Core Team”). The Core Team shall be composed of an
equal number of representatives from each of SBL and Client, with at least four
(4) representatives appointed by each of Client and SBL. Such representatives
will include the Project Management Team Leaders of Client and SBL as well as
their representatives from manufacturing, technical operations, supply chain,
quality assurance, quality control, regulatory affairs or other individuals with
expertise and responsibilities for those functions required to execute the
Facility modification, the Technology Transfer and Manufacturing. Either Party
may replace any or all of its representatives at any time. Such Party shall
notify, in writing, of such replacement to the other Party.

 

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  3.3.2

Appointment of Project Management Team Leader. Each Party shall appoint a
Project Management Team Leader (each, a “Project Management Team Leader”) to act
as the primary contact for such Party in connection with matters related to the
Service. Each Project Management Team Leader, unless otherwise mutually agreed,
shall serve as the leaders of the Core Team. A Party may replace its Project
Management Team Leader at any time and from time to time for any reason. Such
Party shall notify, in writing, of such replacement to the other Party.

 

  3.3.3

Responsibilities. The Core Team shall (i) develop and maintain the Project Plan
and monitor, review and manage the Service according to the MSA and applicable
PSA; (ii) conduct project stage reviews with the JSC as required by the Project
Plan at appropriate milestones or completion of key deliverables or a sequence
of event to review key deliverables, review its progress and performance against
plans; (iii) develop a change management process to identify, review and
recommend any significant changes in the project scope, time, fee or risk to the
JSC; (iv) investigate and resolve business, manufacturing, supply chain,
quality, regulatory or other issues arising during the Service; (v) review and
escalate to the JSC, as needed, changes to the Project Plan or applicable QAG;
(vi) review and recommend to the JSC changes to the Specifications, analytical
methods, the Manufacturing Process, the Facility or equipment; (vii) coordinate
the activities of the Parties relating to the Manufacturing hereunder, including
but not limited to: managing the technical operations and quality aspects of
routine manufacturing, conducting Product testing technical operations and
quality aspects of routine manufacturing, conducting Product testing and
release, and managing supply chain activities including shipping and delivery
logistics; (viii) report periodically on operation and quality progress and
performance; and (ix) perform such other tasks and undertake such other
responsibilities as may be specifically delegate to the Core Team by mutual
agreement of the Parties.

 

3.4

Meetings

 

  3.4.1

JSC.The JSC shall meet by audio or video teleconference as agreed by the JSC or
as necessary to make determinations as required of it. Any member of the JSC may
designate a substitute to attend and perform the functions of that member at any
meeting of the JSC and each Party may, in its reasonable discretion, invite
non-member representatives of such Party to attend such meetings with advance
notice to the other Party.

 

  3.4.2

Core Team.The Core Team shall meet by audio or video teleconference as agreed by
the Core Team. Any member of the Core Team may designate a substitute to attend
and perform the functions of that member at any meeting of the Core Team and
each Party may, in its reasonable discretion, invite non-member representatives
of such Party to attend such meetings with advance notice to the other Party.

 

  3.4.3

Travel Expenses. Each Party shall be responsible for all of its own expenses of
traveling to and participating in any joint committee or team meeting, including
the JSC and Core Team.

 

3.5

Decisions. All decisions of JSC, the Core Team and any other joint committee or
team formed under the MSA or any applicable PSA, except as expressly set forth
herein, shall be made by the unanimous agreement of all of its members or their
designated representatives, and shall be reflected in written

 

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  meeting reports which summarily address topics discussed, delegation of work,
schedules and decision of such committee or team. Written reports of the JSC and
Core Team shall be subject to approval by the authorized representatives of the
Parties; provided, however, that no joint committee or team herein may amend or
waive any provision of the MSA or applicable PSA, including without limitation,
the financial terms set forth in Section 9. It being understood that the MSA or
any PSA may be amended, and provision of the MSA or any PSA may be waived
pursuant to Section 17.9 only.

 

3.6

Disputes.

 

  3.6.1

General. In the event that the Core Team and any other joint committee or team
formed under the MSA or any applicable PSA, is unable, despite the good faith
efforts of all members, to resolve a disputed issue that is within the purview
of such joint committee or team within fourteen (14) days of meeting request by
either party, the disputed issue shall be referred immediately by such joint
committee or team to the JSC. If the disputes still cannot be resolved within an
additional thirty (30) days of meeting request by the JSC, the matter may be
handled in accordance with Section 16.

 

  3.6.2

Project Management Team Leaders. Subject to Section 3.6.1, the Project
Management Team Leaders (or their respective designee) will in good faith
attempt to mutually resolve in a timely fashion any disagreement with respect to
the Service hereunder, which could reasonably affect the quality of the
Manufacturing of the Product, including without limitation, the related
management processes and operations, control of production planning and
scheduling, prioritization decisions, allocation of resources, timing of
in-process and release testing, oversight of auxiliary facilities (e.g.,
in-process tests that need to be conducted at laboratories other than those at
the Facility), Facility modification, the Technology Transfer, registration and
troubleshooting decisions, and any other matters relating to implementation of
the Manufacturing Process and the Manufacturing of the Product hereunder.

SECTION 4 SERVICES

 

4.1

Services. During the Term, in accordance with and subject to the terms and
conditions set forth in this MSA, applicable PSA, and the applicable QAG, SBL
shall provide the Services to Client relating to the Product(s). SBL and Client
shall at all times make Commercially Reasonable Efforts to complete the Services
in accordance with the timelines set forth in the applicable PSA. Except as
otherwise expressly set forth in the MSA, applicable PSA, or the applicable QAG
or as otherwise mutually agreed in writing by the Parties.

 

4.2

Compliance with Applicable Law. Subject to the provisions of Section 6 below,
SBL shall maintain the Facility in accordance with cGMP and in such condition as
will allow SBL to Manufacture the Products in accordance with the terms of the
MSA and the applicable QAG. SBL shall perform the Services under the MSA in
conformance of cGMP, if applicable, the Specifications, any requirements of the
Regulatory Authorities that shall be mutually agreed upon by the Parties, and
all Applicable Laws.

 

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4.3

Project Personnel. SBL shall adequately staff the Facility with personnel
necessary (including consultants and contractors), and with sufficient technical
expertise to perform its obligations under the MSA. Notwithstanding anything to
the contrary and in addition to the JSC and Core Team meetings described in
Section 3 above, Client and SBL may arrange for core project personnel to have
regular meetings, which shall be by audio or video teleconference. The Project
Plan shall specify the frequency and duration of such meetings; provided that
the associated costs for meetings requested solely by Client in excess of the
agreed amount shall be passed through to Client by SBL.

 

4.4

Subcontract. SBL may not subcontract any portion of the Services without prior
approval from the Client. In the event SBL subcontracts any portion of the
Services, SBL shall be primarily obligated to Client for any subcontracted
services as if it were providing the Services itself. All costs associated with
activities outsourced to 3rd party contractors will be passed through to Client
with an additional [***] handling fee (e.g. [***]).

 

4.5

Development and Manufacturing Site. Unless otherwise agreed by Client, all
Services shall be performed by SBL at the Facility.

 

4.6

Manufacturing Documentation. SBL shall maintain Manufacturing Documentation to
be true and accurate, and shall keep in strict confidence and shall not use for
purposes other than providing or performing the Service or other obligations
hereunder. SBL shall maintain all such Manufacturing Documentation for at least
that period specified in the applicable QAG. Upon written request of Client and
at mutually agreeable times, Client shall have the right to review Manufacturing
Documentation, including the Batch Records, at the Facility as further defined
in the applicable QAG. Client may also request scanned or printed copies of such
Manufacturing Documentation, but shall be responsible for reasonable costs
associated therewith. SBL shall record and maintain such records, data,
documentation and other information in the language as so required in the
applicable QAG or as so required by a Regulatory Authority and in compliance
with Applicable Law. To the extent necessary, SBL may redact or withhold
Manufacturing Documentation provided pursuant this MSA or any applicable PSA to
protect the confidential information of its other clients or third parties. The
form and style of Batch documents, including, but not limited to, Batch
production records, lot packaging records, equipment set up control, operating
parameters, and data printouts, raw material data, and laboratory notebooks are
the exclusive property of SBL. Notwithstanding anything to the contrary, SBL
SOPs not specific to the Client’s Products may be provided to Client for on-site
review if deemed necessary by both SBL and Client. Such SOPs cannot be removed
from the SBL premises, copied, photographed or otherwise replicated.

SECTION 5 SERVICE DESCRIPTIONS

 

5.1

Technology Transfer.The Parties shall make their personnel available at the
Facility to enable the transfer and implementation in accordance with the
Project Plan. Client shall transfer to and [***] to SBL in accordance with the
plan, timelines and quantities set forth in the Project Plan. In the event that
Client agrees to utilize SBL’s [***] portal for Technology Transfer, Client
agrees that (a) in the event of any relevant change that affects a Client user’s
authorization to use such portal, Client shall immediately notify SBL so that
SBL may disable their usernames and remove / change passwords in order to secure
the SBL Portal and (b) Client shall ensure that all of Client’s users have
up-to-date antivirus software installed on the computer devices used to access
such portal.

 

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5.2

Facility Modification and Equipment. Except as otherwise specifically provided
herein to the contrary, and upon mutual agreement of the Parties, Client and SBL
will agree on what equipment in the Facility is necessary to perform the
Services, and if it is necessary or Client deems it necessary to procure
additional equipment beyond that which is in the Facility as of the applicable
PSA Effective Date, the Core Team shall determine equitable allocation of costs
including, as applicable, procurement, validation, installation, maintenance,
commissioning, and decommissioning/validation (which determination shall be
escalated to the JSC if in dispute). Thereafter, if any additional equipment is
necessary, such costs shall be dealt with by the Change provisions of this MSA.
Except as provided in this MSA or any applicable PSA, the Facility, Warehouse
and all the equipment shall be mantained, tested, validated, calibrated and
qualified for their intended use by SBL at SBL’s expenses.

 

5.3

Raw Materials.

 

  5.3.1

Management. SBL shall procure and maintain a reasonable quantity of the Raw
Materials, required for the Services in accordance with the MSA and any
applicable PSA. On a per-Product basis, the Core Team shall finalize the
categorization of the Raw Materials into Raw Materials which shall be used for
that specific Product only (“Specialized Raw Materials”), Raw Materials which
can be used across multiple products and/or customers (“Common Raw Materials”),
and Raw Materials which will not be charged on a cost-plus basis to the Client,
and shall attach such list to the applicable PSA. Such list of common and
specialized Raw Materials may be amended from time to time, subject to the
Parties’ approval. During Technology Transfer, the Core Team shall agree on
estimates for Raw Materials anticipated to be consumed in the Manufacture of
each Batch. Although SBL will make Commercially Reasonable Efforts to use no
more than those amounts, SBL will not be responsible for Raw Materials used in
excess of the agreed-upon estimate; provided, however, that SBL shall be
responsible for [***]. Client shall agree to SBL’s strategies regarding Raw
Material safety stock and sourcing from qualified vendors. In the event SBL is
not able to utilize any capacity reserved to Manufacture Product according to an
agreed-upon forecast or manufacturing plan due to Client’s failure to agree to
such strategies, then Client shall be responsible for the costs of such reserved
capacity regardless of whether it is utilized or not.

 

  5.3.2

Raw Material Specifications. Client and SBL shall agree on the Specifications of
the Raw Materials, including without limitation analytical methods, supplier
information including supplier site information, and other information
concerning the stability, storage, and safety thereof that are required for the
Manufacturing hereunder, as further described in the applicable QAG.

 

  5.3.3

Testing and Evaluation. SBL or vendors qualified by SBL shall perform all
testing and evaluation of the Raw Materials as required by the Specifications
for the Raw Materials and the cGMPs, as further described in the applicable QAG,
if applicable.

 

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  5.3.4

Storage. SBL shall secure sufficient and suitable cGMP storage for the Raw
Materials; provided that such storage requirements shall be customary within
SBL’s industry. SBL shall exercise reasonable care to preserve and protect the
Raw Materials [***], Client shall be responsible for the risk of loss of the Raw
Materials. At the end of each calendar year of the relevant PSA, Client shall be
responsible for the loss of Raw Material to the extent purchased in reliance on
a Purchase Order, Firm Period, or Binding Year which expires or becomes obsolete
because Client fails to honor such Purchase Order, Firm Period or Binding Year
and SBL cannot reasonably otherwise utilize such Raw Material.

 

  5.3.5

Service Fee Related to Raw Material. Common Raw Materials and Specialized Raw
Materials will be charged on a cost-plus basis to Client in accordance with
Sections 9.1(ii) and 9.2.2, subject to any changes in the scope of work.

 

5.4

Client Materials.

 

  5.4.1

Management. Client shall provide, either by itself or through its third party
supplier, to SBL free of charge, Client Materials in amounts reasonably
necessary to carry out the Services as agreed by the Parties. The applicable PSA
shall set forth the exact timing of such provision of Client Materials to SBL.
SBL shall make Commercially Reasonable Efforts to import the Client Materials to
the Republic of Korea in a timely manner, provided that Client provides
reasonable assistance. Delivery conditions for the Client Materials shall be
[***]. During Technology Transfer, the Core Team shall agree on estimates for
Client Material anticipated to be consumed in the Manufacture of each Batch.
Although SBL will make Commercially Reasonable Efforts to use no more than those
amounts, SBL will not be responsible for Client Materials used in excess of the
agreed-upon estimate; provided, however, that (a) SBL shall be responsible for
[***] and (b) notwithstanding anything to the contrary, SBL will not in any
circumstance be responsible for [***]. Client shall agree to SBL’s strategies
regarding Client Material safety stock and sourcing from qualified vendors. In
the event SBL is not able to utilize any capacity reserved to Manufacture
Product according to an agreed-upon forecast or manufacturing plan due to
Client’s failure to agree to such strategies, then Client shall be responsible
for the costs of such reserved capacity regardless of whether it is utilized or
not.

 

  5.4.2

Client Materials Specifications. Client shall provide SBL with the
Specifications of the Client Materials, including without limitation analytical
methods, supplier information, and other information concerning the stability,
storage, and safety thereof that are required for the Manufacturing hereunder,
as further described in the applicable QAG.

 

  5.4.3

Testing and Evaluation. SBL shall perform testing of the Client Materials in
accordance with the applicable QAG and/or Client’s instruction prior to the
performance of the Manufacturing hereunder, in order to determine whether such
Client Materials meet the Specification described in the applicable QAG (if
applicable). SBL shall inform Client of (a) any damage to the Client Materials
received that is visually obvious (e.g., damaged or punctured containers and
temperature monitoring results outside of predetermined Specifications) within
[***] after SBL’s receipt of the Client Materials and (b) any non-conformance of
the Client Materials to Specification either: (i) within [***] of SBL’s
discovery of such non-conformance; or (ii) within [***] days after SBL’s receipt
of the Client Materials or (iii) if release testing of

 

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  Client Materials is not performed until it is needed for Manufacture, within
[***] days after such release testing is performed; or (iv) as other wise agreed
between the Parties. If, prior to performing any Service on the Client
Materials, SBL determines that such Client Materials are defective or damaged,
SBL shall not perform the Service on such Client Materials and shall follow
Client’s written instructions regarding disposal or return of such Client
materials to Client, such disposal or return to be at Client’s discretion and
cost.

 

  5.4.4

Storage. SBL shall secure sufficient and suitable cGMP storage for the Client
Materials; provided that such storage requirements shall be customary within
SBL’s industry. SBL shall exercise reasonable care to preserve and protect the
Client Materials from [***], Client shall be responsible for the risk of loss of
the Client Materials.

 

  5.4.5

Service Fee Related to Client Material. Handling fees relating to the Client
Material will be charged to Client in accordance with Sections 9.1(iii) and
9.2.3.

 

5.5

Forecasts. For each Commercial Product, the Parties shall determine a mutually
agreeable mechanism for forecasting of each Product, which shall be detailed in
writing and attached to each relevant PSA. For Clinical Product, the Parties
shall agree upon the number and schedule of Batches to be Manufactured by SBL in
the applicable PSA.    In the event SBL is not able to utilize any capacity
reserved to Manufacture Product according to an agreed-upon forecast or
manufacturing plan due to a reason attributable to Client, then Client shall be
responsible for the costs of such reserved capacity regardless of whether it is
utilized or not to the extent that SBL is not able to reassign such reserved
capacity.

 

5.6

Purchase Orders. For each Clinical Product or Commercial Product, Client shall
notify SBL in a binding form and procedure to be agreed upon in the applicable
PSA requesting a specific amount of Product to be Manufactured (a “Purchase
Order”).

 

5.7

Product Purchase Commitment. As further set forth in a PSA, during the Term the
Parties may agree that Client will purchase a minimum quantity of batches of a
certain Product in a given year (a “Product Purchase Commitment”).

 

5.8

Batch Failure during Manufacture

 

  5.8.1

If, during Manufacture of a Batch and prior to SBL’s batch release, the Core
Team determines that all of a Batch is Non-Conforming Product (a “Batch
Failure”), SBL shall use Commercially Reasonable Efforts to promptly
re-Manufacture and deliver to Client a replacement Batch on a date to be
mutually agreed by the Parties, which Service Fees and associated costs/fees (as
set forth in Section 9.1 below) shall be invoiced and paid for by the Client.
Client shall ensure that SBL has adequate Client Materials to Manufacture such
Batches. The remedies contained in Section 5.8 of this MSA shall be the sole and
exclusive remedies of Client regarding a Batch Failure and a Batch Failure shall
not constitute a material breach of this MSA or a PSA unless SBL fails to
provide the remedies contained in this Section 5.8.

 

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  5.8.2

The Parties shall conduct a root cause analysis of the Batch Failure, which
shall be done through SBL’s deviation process and which result will be reviewed
and confirmed by the JSC. If either the Core Team does not agree on the Batch
Failure root cause, or the JSC does not agree on the results of the Core Team’s
Batch Failure root cause analysis, the Parties shall refer to an independent
mutually agreed-on laboratory or firm with international repute, acting as a
neutral arbiter, to conduct a root cause analysis of the Batch Failure. The
costs of the independent laboratory will be shared by the Parties equally;
provided, however, that the Party that is determined to be incorrect as to the
Batch Failure will be responsible for those reasonable costs and must reimburse
the correct Party for its share of the reasonable costs incurred. The decision
of the independent laboratory must be in writing and will be binding on the
Parties.

 

  5.8.3

The PSA applicable to such Product Batch Failure shall set forth responsibility
among the Parties of the following costs in the event of a Batch Failure: [***].
Notwithstanding anything to the contrary, SBL shall not be responsible in the
event of Batch Failure for: [***].

 

  5.8.4

In the event that any of the foregoing procedures results in a Batch being
delivered in a different year than the year in which the original Batch was
ordered for delivery by Client, the Service Fee for such re-Manufactured Batch
shall be the Service Fee in effect in the Year in which such re-Manufactured
Batch is actually delivered by SBL.

 

5.9

Storage, Packaging and Delivery.

 

  5.9.1

Service Deliverables other than Products.Storage, packaging and delivery of the
Service deliverables other than Products Manufactured, and the Products
Manufactured hereunder shall be made in accordance with the terms of this MSA,
applicable PSA, Project Plan, applicable QAG and the Applicable Laws.

 

  5.9.2

Products.

 

  (a)

Release by SBL and Acceptance by Client.

 

  (i)

SBL shall perform all testing in accordance with the Specifications of the
Product and release Product satisfying the Specifications in accordance with the
terms of the applicable QAG. Upon such release SBL shall deliver to Client copy
of Manufacturing Documentation in support of the SBL’s release of the Product
for each Batch (“Batch Related Documents”), including a Certificate of Analysis
and Certificate of Compliance, in accordance with the applicable QAG;

 

  (ii)

Acceptance of Product. Client will complete the Acceptance Procedure and
determine the acceptability of such Product in accordance with the applicable
QAG and notify SBL of the result within [***] of Client’s receipt of the Batch
Related Documents. Upon Client’s acceptance, SBL will have no liability for such
Product, except as set forth in Section 5.9.2(a)(iv) regarding Latent Defects.
If Client does not reject such Product within the [***] period, the Product will
be deemed to have been accepted by Client.

 

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  (iii)

Non-Conforming. If, during the Acceptance Procedure, any Product is determined
by Client as Non-Conforming Product, and SBL confirms such non-conformity, such
non-conformity shall be treated as a Batch Failure, and the remedy set forth in
Section 5.8 above shall apply to the Non-Conforming Product mutatis mutandis.
The remedies contained in this Section 5.9.2 shall be the sole and exclusive
remedy of client in the event of Non-Conforming Product.

 

  (iv)

Latent Defect.After completion of review of the Batch Related Documents, if
Client finds any hidden defects of the Product which could not have been
reasonably discovered through the review of the Batch Related Documents (“Latent
Defect”), Client shall promptly give notice of such claim in writing to SBL. In
such case, if the Latent Defect is solely due to SBL Assignable Error, the above
Section 5.9.2(a)(iii) and Section 13.1 shall apply. If no written claim for
Latent Defect of the Product is received by SBL within [***], the Product shall
be deemed as irrevocably accepted. Notwithstanding anything to the contrary;
such claim for Latent Defect must be made within [***] from Client’s initial
acceptance of the Product.

 

  (b)

Delivery. Shipping conditions for the Product Manufactured hereunder shall be
[***], unless otherwise agreed to in the applicable PSA. The title to Product
hereunder shall be transferred from SBL to Client when the Product is made
available at the point of delivery consistent with [***] or the Incoterm set
forth in the PSA. The Parties further agree as follows:

 

  (i)

After SBL’s release of the Product and prior to each pick-up by Client or
Client’s designated carrier, SBL shall propose to Client a delivery schedule of
the Product, in order for the Parties to agree on it in advance for each
pick-up. SBL shall schedule Delivery with the carrier selected and paid for by
Client;

 

  (ii)

SBL shall not deliver the Product until it has been instructed to by Client in
accordance with the applicable QAG. Client shall confirm specific delivery
instructions with SBL prior to SBL release. Upon SBL’s release of Product, SBL
shall store the Manufactured Product as described in Section 5.9.2(c) and Client
shall compensate SBL for storage costs for the Manufactured Product as set forth
in the applicable PSA;

 

  (iii)

SBL shall provide Client with invoice, packing lists, supporting export
documents as specified by Client by separate delivery and shipment documentation
instructions, together with each shipment of the Product (or such other
deliverables); and

 

  (iv)

In cooperation with Client and subject to the delivery schedule agreed by the
Parties, SBL shall adhere to the first-expire-first-out (FEFO) principle in
shipping all released Product.

 

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  (c)

Storage, Packaging and Shipping Container.

 

  (i)

Pursuant to the terms of this MSA and any applicable PSA, and subject to the
availability of space and storage conditions, SBL shall store the Products
Manufactured hereunder.

 

  (ii)

SBL shall store, package, label and prepare shipment according to the
Specifications for the Product Manufactured hereunder, the applicable QAG and
the SOPs, and using storage and/or shipping containers determined in the
applicable PSA.

 

  (iii)

If Client does not direct SBL to prepare Manufactured Product to be picked up by
Client or Client’s designated carrier with a pick-up [***] days of Client’s
receipt of the Batch Related Documents, SBL shall store the Product at the
Warehouse, subject to the availability of space and storage conditions, and
Client shall pay storage fees to SBL as set forth in Section 9.1 for the period
of storage at the Warehouse until the actual delivery date. SBL shall be
responsible for [***].

SECTION 6 CHANGES TO THE SPECIFICATIONS, ANALYTICAL METHODS, MANUFACTURING
PROCESS, FACILITY OR EQUIPMENT

 

6.1

Approval for Change. SBL shall not make any change to the Manufacturing Process,
the Services, or the Specifications (a “Change”), without the prior written
consent of Client in accordance with the applicable QAG.

 

6.2

Changes Required by cGMP, Regulatory Authorities or Requested by Client. Except
as otherwise expressly set forth to the contrary in the applicable QAG, in the
event that cGMP, a Regulatory Authority, Applicable Law, or any other regulatory
or legal authority requires, or Client requests, a Change, SBL shall accommodate
such requirements or requests, subject to the following:

 

  (a)

Client shall promptly notify SBL in writing of the required and/or requested
Change(s), and provide information necessary for SBL to evaluate the effect of
such Change(s), and SBL shall promptly advise Client as to any (i) additional
equipment required, modifications to the Facility or equipment, and/or
additional equipment and the Facility qualification and validation requirements;
(ii) Manufacturing Process development, transfer, scale-up, testing,
qualification, or validation requirements; (iii) regulatory requirements
pursuant to such Changes; (iv) changes to the Manufacturing scheduling and/or
Product delivery schedule; and (v) other impacts on the Facility or SBL’s
ability to manufacture products (including the Products) in the Facility, if
any, which may result from such Change(s). The notification and formal approval
procedure of such Changes shall be in accordance with the applicable QAG (i.e.,
change control procedures) (if applicable). The Parties shall meet in a timely
manner to identify and discuss such Changes as appropriate;

 

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  (b)

Prior to implementation of any such Change(s), SBL shall provide Client with an
estimated plan and budget of the reasonable and necessary costs that would be
incurred by SBL as a result of the implementation of any such Change(s),
including, but not limited to for (i) process and analytical development;
(ii) equipment and/or the Facility modifications, qualification, validation,
maintenance, and decommissioning/disposal; (iii) process and analytical
validation; (iv) document revisions or changes, the Facility, equipment, and
system modifications or changes; (v) additional stability testing; and
(vi) preparing submissions to Regulatory Authorities (collectively, the
“Implementation Plan and Budget”). Following review and approval by Client of
such Implementation Plan and Budget, subject to the Core Team’s approval and
agreement followed by the Parties’ written agreement pursuant to Section 17.9
(if applicable), SBL shall commence implementation of such Change(s);

 

  (c)

During any such implementation, SBL shall provide Client with regular updates on
the progress of implementation. Subject to any timeframe imposed by Applicable
Law, SBL shall implement the Change according to the Implementation Plan and
Budget’s target completion date. SBL shall provide written notice to Client if
SBL becomes aware of any cause which may create delay with the implementation of
Changes. Following any such notice, both Parties shall discuss an amendment of
Implementation Plan and Budget; and

 

  (d)

Upon the approval of the Implementation Plan and Budget for Change(s), both
Parties shall negotiate in good faith to determine the allocation of the costs
incurred by SBL for the implementation of any such Change(s) between the
Parties, in accordance with the following principles:

 

  (i)

the costs for the general Facility Changes required by cGMP, any Regulatory
Authority, or any Applicable Laws related to the maintaining the Manufacturing
Facility by SBL as set forth in Section 7.2, shall be borne by SBL, provided
that where the Change relates exclusively or partially to the Manufacture of
Product in which case the costs shall be borne by Client fully or
proportionally, respectively;

 

  (ii)

the costs for the Changes other than (i) above, and requested by Client and
required uniquely to the Manufacture of the Product and beneficial solely to
Client shall be borne by Client; and

 

  (iii)

the costs for the Changes other than (i) and (ii) above shall be discussed in
good faith by the Parties to achieve equitable allocation of costs.

SECTION 7 REGULATORY APPROVALS AND INSPECTIONS.

 

7.1

Regulatory Approvals. SBL shall provide reasonable assistance and cooperation in
order for Client to obtain and maintain the Regulatory Approvals. The costs and
fees associated with such assistance and cooperation, to the extent not detailed
in the MSA or PSA shall be borne by Client, or as otherwise mutually agreed
between the Parties. As specified in the applicable PSA, the Parties shall agree
on which Regulatory Approvals are to be obtained.

 

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7.2

Regulatory Approvals for the Facility. SBL shall obtain and maintain all
approvals, licenses, registrations or authorizations of any federal, state or
local regulatory agency, department, bureau or other governmental entity (other
than the Regulatory Approvals, which will be obtained or maintained by Client)
that are required to Manufacture and ship the Product at the Facility and
perform the Services.

 

7.3

Regulatory Inspections. SBL shall facilitate on-site inspections of the Facility
conducted by Regulatory Authorities. SBL shall notify Client according to the
applicable QAG provisions of any contacts or inquiries by the Regulatory
Authorities, including inspections, Pre-Approval Inspections, sample requests,
and written correspondence and its result, related to the Product, as further
defined in the applicable QAG. Any expenses or costs incurred by SBL for such
inspections including Pre-Approval Inspections at the Facility shall be borne by
Client.

SECTION 8 QUALITY COMPLIANCE

 

8.1

Quality Agreement. Both Parties shall adhere to the provisions of the applicable
QAG and the Parties agree that all elements of quality assurance, quality
control and the like shall be governed by the terms and conditions of the
applicable QAG. In the event of a conflict between the MSA and the applicable
QAG, the MSA shall prevail over those of the applicable QAG with the exception
of Product quality-related matters, cGMP and related regulatory requirements in
which case, the terms of the applicable QAG shall prevail.

 

8.2

Audit. Upon Client’s request, but no more than [***], except in the event of a
for-cause audit, SBL shall accept a formal audit of the Facility and, if
necessary, the Warehouse, by Client to allow Client to inspect the Manufacture
of the Product during provision of the Services solely to ascertain compliance
by SBL with the terms of this MSA or any applicable PSA; provided, however that
in the event Client uses a designee, SBL must provide prior written consent. SBL
shall be reimbursed for its reasonable costs for audits beyond the audit
described in the first sentence of this Section 8.2.1. SBL will make
Commercially Reasonable Efforts to require vendors or subcontractor to accept an
audit or visit to the their facilities by Client upon similar notice as
described in Section 8.3.2 below. Client will provide SBL with written notice at
least [***] prior to any visits, and the Parties shall decide on a mutually
agreeable date, duration, visitor list, and agenda prior to the audit. While at
the Facility, all such Client personnel shall have reasonable access to all
areas as are relevant to SBL’s performance of the Service hereunder, provided
that SBL may reasonably restrict Client personnel’s access to the Facility as it
deems necessary and visitors pursuant to this Section shall comply with all
applicable SBL policies and procedures including but not limited to safety,
confidentiality, and cGMP.

 

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SECTION 9 CONSIDERATION AND PAYMENT TERMS

 

9.1

Consideration. In consideration for SBL’s performing the Service and other
obligations undertaken by SBL pursuant to a PSA, Client shall pay SBL amounts as
set forth in the applicable PSA (the “Service Fee”); (ii) a handling surcharge
of a certain percentage or certain amount to be set forth in the applicable PSA
of the costs of Raw Materials paid by SBL (including but not limited to taxes
and customs duties/fees); (iii) a handling surcharge of a certain percentage or
certain amount to be set forth in the applicable PSA related to the Client
Materials (which shall be based on the actual costs of such materials as
supported by reasonable documentary evidence as opposed to the market value
thereof and which may include taxes and customs duties/fees); and (iv) storage
fees as set forth in the relevant PSA.

 

9.2

Invoices.

 

  9.2.1

Service Fee of the Project Stages and Batches.    Batches of Product shall be
invoiced upon SBL’s release of a Batch of Product. Otherwise, Service Fees shall
be invoiced according to the invoicing plan set forth in the applicable Project
Plan or applicable PSA. SBL’s invoices pursuant to this MSA shall be electronic,
unless otherwise agreed by the Parties.

 

  9.2.2

Raw Materials. With respect to the Raw Materials, SBL shall submit invoices to
Client for the applicable Raw Materials cost (including any agreed upon safety
stock) as set forth according to Section 9.1 as follows. SBL shall submit an
invoice to Client (i) for the cost of Specialized Raw Materials [***]; and
(ii) for the cost of Common Raw Materials [***]. Notwithstanding the foregoing,
the Parties shall collaborate in the selection of the vendors of the Raw
Materials. All such vendors shall be approved by Client before supplying SBL
with Raw Materials for Product.

 

  9.2.3

Client Materials.With respect to the Client Materials, which shall be supplied
by Client to SBL at no cost during SBL’s performance the Service, SBL shall
submit an invoice to Client in an amount as set forth in Section 9.1 upon SBL’s
completion of such project stage of the Service SBL’s release of a Batch of
Product, as applicable.

 

9.3

Payment.

 

  9.3.1

Mode of Payment; Foreign Exchange. All payments to SBL due under the MSA or any
applicable PSA shall be made in USD $ within [***] from the receipt of SBL’s
invoice in USD $ by means of telegraphic transfer to the account with the bank
designated by SBL in the foregoing invoice. For the purpose of computing payment
amounts incurred by SBL in a currency other than USD $, such currency shall be
converted into USD $ using the basic exchange rate published by the Korean
Exchange Bank (or its successor institution) at the opening of business on such
invoice date.

 

  9.3.2

Taxes. All prices and charges are exclusive of any applicable taxes, levies,
imposts, duties and fees of whatever nature imposed by any law or regulations in
any country in respect of the Services, importation or exportation of Raw
Materials, Client Materials, Batches, and Product, which shall be paid by
Client. For the avoidance of doubt, the foregoing shall not include any taxes
imposed on the income or profit of SBL and any withholding tax lawfully levied
on any payment to be made by Client to SBL, each of which shall be solely borne
by SBL. Client shall pay or reimburse SBL for all customs duties and taxes in
connection with the purchase, sale, importation or exportation of any Raw
Materials, Client Materials, Batches, or Product or the provision of Services,
except to the extent such duties and taxes are recoverable by or refundable to
SBL. SBL agrees to assist Client in claiming exemption under double taxation or
similar agreement or treaty from time to time in force to obtain a refund of any
customs duties, value added taxes, and other taxes payable by SBL.

 

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  9.3.3

Price Adjustments. The Service Fees as set forth in the applicable PSA, shall be
adjusted annually on January 1 of each year during the Term, effective
immediately, by the percentage change in the consumer price index as published
by the Bank of Korea for the immediately preceding twelve (12) months. The
relevant date for price adjustment under this Section shall be the issue date of
SBL’s invoice.

 

  9.3.4

Default Interest. Any reasonably undisputed amount that is not paid by a Party
to the other when due under the MSA or any PSA shall bear default interest at
the rate of [***]. In the event there is a reasonably undisputed amount which is
invoiced by SBL but not paid by Client for more than [***] after the due date,
such event shall be considered a material breach of the relevant PSA.

SECTION 10 CONFIDENTIALITY

 

10.1

Confidential Information. If a Party intends to disclose such information in
writing, in electric file or format or in other tangible manner, such Party will
make reasonable efforts to indicate it is confidential; and if to disclose
orally, visually or in other intangible manner, such Party will make reasonable
efforts to reduce it in writing or in electric file or format, identified as
confidential and delivered to another Party within thirty (30) days after such
oral or visual disclosure: provided, however, that, in each case of the
foregoing, a failure to do so shall not constitute a breach of this term nor
shall deny, negate or destroy the confidential nature thereof, and no such
failure shall serve as conclusive evidence that the disclosed information shall
not be considered Confidential Information by and between the Parties.
Furthermore, the existence and terms of the MSA shall be deemed to be the
Confidential Information of both Parties.

Notwithstanding the foregoing, Confidential Information shall not include the
information, which as evidenced by written records:

 

  (a)

was at the time of disclosure by the Disclosing Party hereunder publicly known
or available;

 

  (b)

after disclosure by the Disclosing Party hereunder, became publicly known or
available by publication or otherwise, other than by an authorized act or
omission by the Receiving Party;

 

  (c)

was in the possession of the Receiving Party without confidentiality restriction
at the time of the disclosure by the Disclosing Party hereunder;

 

  (d)

was lawfully received from any third party having the lawful right to make such
disclosure, without obligation of confidentiality; or

 

  (e)

was independently developed by the Receiving Party’s directors, officers or
employees without reference to the Confidential Information, as demonstrated by
records contemporaneous with such development.

 

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10.2

Confidentiality. The Receiving Party recognizes the proprietary and confidential
nature of the Disclosing Party’s Confidential Information and agrees that no
right, title, ownership, license, or interest of any character in the Disclosing
Party’s Confidential Information other than as specifically granted herein, is
conveyed or transferred to the Receiving Party. Both Parties further agree to
maintain the Disclosing Party’s Confidential Information in confidence and not
to disclose or divulge the Disclosing Party’s Confidential Information, in whole
or in part, to any third party, and not use the Disclosing Party’s Confidential
Information for any purpose other than pursuing the MSA. Each Party shall guard
such Confidential Information using the same degree of care as it normally uses
to guard its own confidential or proprietary information of like importance, but
in any event no less than reasonable care. The Receiving Party shall limit
disclosure of the Disclosing Party’s Confidential Information to its and those
of its Affiliates’ directors, officers, employees, consultants and agents
(“Representatives”) who have a need to know the Disclosing Party’s Confidential
Information for performance of the Service and implementation of the MSA,
provided that, the Receiving Party shall undertake procedures to ensure that
each of its Representatives to whom the Disclosing Party’s Confidential
Information is disclosed understands (i) the confidential nature of the
Disclosing Party’s Confidential Information and (ii) that he or she is under an
obligation similar to those contained herein to hold the Disclosing Party’s
Confidential Information disclosed strictly confidential.

 

10.3

Authorized Disclosures. Disclosure is permitted in the event that (a) the
Disclosing Party’s Confidential Information is reasonably required to obtain or
maintain any Regulatory Approvals for the Products in any or all jurisdictions
or (b) the Disclosing Party needs to disclose such Confidential Information to
comply with Applicable Law; provided that such Receiving Party shall exercise
its Commercially Reasonable Efforts to limit disclosure of the Disclosing
Party’s Confidential Information to that which is necessary for compliance and
to otherwise maintain the confidentiality of the Confidential Information.

 

10.4

Survival of confidential obligations. The confidential obligations of the
Receiving Party shall survive for a period of five (5) years from the expiration
or termination of this MSA.

 

10.5

Return of the Confidential Information. All written, printed or other tangible
Confidential Information of the Disclosing Party disclosed under the MSA, and
all copies thereof shall be returned to the Disclosing Party (or destroyed at
the Disclosing Party’s request) by the Receiving Party within thirty (30) days
from the written request by the Disclosing Party. All Confidential Information
disclosed electronically shall be completely deleted and destroyed by the
Receiving Party within thirty (30) days from the written request by the
Disclosing Party. Notwithstanding the foregoing, (i) digital backup files
automatically generated by the Receiving Party’s customary electronic data
processing system may be retained and properly stored as confidential files for
the sole purpose of backup and will be deleted in accordance with the Receiving
Party’s retention policy, and (ii) a single copy of the Confidential Information
may be retained in the secured files of the Receiving Party for the sole purpose
of determining the scope of obligations incurred by it under the MSA provided
that the Receiving Party shall keep such Confidential Information in confidence
and will use the Confidential Information solely to comply with the terms of the
MSA as well as the applicable law, rule and regulation.

 

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SECTION 11 OWNERSHIP OF MATERIALS AND INTELLECTUAL PROPERTY

 

11.1

Reference Standard, Client Technology, Client Materials, Cell Line, and Product.
SBL hereby understands and agrees that all rights to, titles of and interests in
the Reference Standards, Client Technology, Client Materials, and Cell Line
belong to Client, unless otherwise provided herein.

 

11.2

Background Intellectual Property.It is acknowledged that each Party possesses
Background IP. Any Intellectual Property relating to the Reference Standards,
Client Technology, Client Materials and Cell Line owned and/or controlled by
Client as of the date of provision of such Reference Standards, Client
Technology, Client Materials and Cell Line by Client to SBL pursuant to
Section 5.1, shall be deemed to be included in the Background IP of Client.
Client hereby grants SBL [***] license to use such Intellectual Property
relating to such Reference Standards, Client Technology, Client Materials, Cell
Line, during the Term for the sole purposes of Manufacturing of the Product or
Services in accordance with the MSA.

 

11.3

Inventions.Any Intellectual Property arising out of or resulting from the
Service under the MSA, including but not limited to those contained in the
Manufacturing Documentation, shall be hereinafter collectively called an
“Invention”.

 

  11.3.1

Client Invention. Any Invention that [***] shall be a “Client Invention”. SBL
shall notify Client of such Client Invention(s) to Client immediately after SBL,
the Project Management Team Leader, respective project personnel, SBL employees
or officers or other applicable third parties working for SBL hereunder makes,
conceives or reduces to practice such Client Invention, and shall take all
necessary measures so that Client would have [***] of any and all Client
Invention. Client may use any Client Invention for any purpose, including filing
patent application and SBL shall provide reasonable cooperation to Client at the
expense of Client (as to all reasonable out-of-pocket expenses incurred by SBL
that are supported by adequate documentation).

 

  11.3.2

SBL Invention. Any Invention that [***], shall be the property of SBL (“SBL
Invention”), and shall not be deemed to be Client Invention or Joint Invention
for the purposes of the MSA.

 

  11.3.3

Client-SBL Joint Invention. Any Invention that [***] and which is not a Client
Invention shall be jointly owned by Client and SBL (a “Joint Invention”), and
shall not be a Client Invention or SBL Invention for the purposes of the MSA.
Subject to the terms and conditions of the MSA, any such Joint Invention may be
exploited by SBL or Client without compensation and liability of other
obligation (including accounting obligations) to the other Party, and each Party
has a [***]. This license shall continue for the life of the applicable right.

SECTION 12 WARRANTIES.

 

12.1

The Parties General Warranties. Each Party warrants and represents that: (i) it
has the corporate power and authority to enter into this MSA and has taken all
necessary action on its part required to authorize the execution, delivery and
performance of this Agreement; (ii) it is aware of no legal, contractual or
other restriction, limitation or condition that might adversely affect its
ability to enter into this MSA and perform its obligations hereunder; (iii) it
is duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated; (iv) this MSA (a) has been duly
executed and delivered by a duly authorized representative of it, and (b) is the
legal,

 

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  valid and binding obligation of it, enforceable against it in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting creditors’ rights generally; and (v) the
execution, delivery and performance of this Agreement by it does not and will
not (a) violate any Applicable Laws applicable to it, or (b) violate or conflict
with any provision of its Articles of Incorporation or By-laws or other
organizational documents.

 

12.2

Client’s Warranties. Client represents and warrants to SBL that as of the
Effective Date of the MSA and during the Term: (a) the formulation and
composition of the Product shall comply with all Applicable Laws and that during
the Term, Client will perform all obligations and take other necessary actions
to be in compliance with such requirements, Applicable Laws, rules and
regulations, including applicable cGMPs; (b) Client will comply with all
Applicable Laws, and that it will keep SBL informed of any information known to
Client which would affect SBL’s provision of the Service hereunder; (c) all
Reference Standard, Client Technology, Client Materials, and Cell Line provided
to SBL by or on behalf of Client will be suitable for the Manufacture of the
Product; and (d) SBL’s use of the Client Materials, Manufacturing Process and
Client Technology for the purpose of the Service and to the extent as set forth
in the MSA will not infringe any third party’s Intellectual Property rights.

 

12.3

SBL’s Warranties. SBL represents and warrants that:

 

  12.3.1

As of the Effective Date and during the Term, (i) SBL is the lawful owner,
lessee, operator, or licensee of the Facility, equipment, machinery, as has all
licenses, consents or permissions required, to enable SBL to perform its
obligations under this MSA, and (ii) none of the SBL Inventions or SBL
Background IP infringes any third party Intellectual Property Right

 

  12.3.2

All Product Batches, at the time of delivery to Client’s designated carrier,
shall (a) conform to the Specifications (except for Pilot Batches and
Engineering Batches unless otherwise agreed); (b) be Manufactured, packaged,
handled and stored in compliance with the requirements of cGMPs (except for
Pilot Batches and Engineering Batches unless otherwise agreed) and all
Applicable Laws; (c) comply with the Standard Operating Procedures; (d) be
Manufactured in compliance with the Quality Agreement; and (e) be transferred
free and clear of any liens, claims or encumbrances of any kind.

 

12.4

No Other Warranties. THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS
SECTION ARE EXPRESSLY IN LIEU OF AND EXCLUDE, AND THE PARTIES HEREBY EXPRESSLY
DISCLAIM AND NEGATE, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAWS, ALL
OTHER REPRESENTATIONS AND WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED (ARISING BY
OPERATION OF LAW OR OTHERWISE), INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE, EVEN IF THAT PURPOSE IS KNOWN.

SECTION 13 INDEMNIFICATION

 

13.1

Indemnification by SBL. SBL shall indemnify and hold harmless Client, its
Affiliates, and their officers, directors, employees or agents from and against
any Damages arising or resulting from any third party (which shall exclude
Client Affiliates) claims to the extent such Damages are relating to, arising
out of, in connection with, or resulting from claims, demands, or actions based
upon negligence or willful misconduct, or breach of cGMP of SBL or its officers,
directors, employees or agents with respect to Services under this MSA, except
to the extent that such Damages are caused by the causes as set forth in
Section 13.2 for which Client is obliged to indemnify.

 

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13.2

Indemnification by Client. Client shall indemnify and hold harmless SBL, its
Affiliates, and their officers, directors, employees or agents from and against
any Damages arising or resulting from any third party (which shall exclude SBL
Affiliates) claims to the extent such Damages are relating to, arising out of,
in connection with, or resulting from claims, demands or actions based upon
(i) negligence or willful misconduct of Client or its officers, directors,
employees or agents, or (ii) any claim that any SBL activity undertaken for the
purposes of or in relation to the Services pursuant to the MSA or any PSA
(including but not limited to use of the Client Materials, Manufacturing Process
and Client Technology, as well as any tests, studies, experiments, or other
activities undertaken at the request of, or with the consent of, Client)
infringes any third party’s Intellectual Property rights; in each case (i) and
(ii) except to the extent that such Damages are caused by the causes as set
forth in Section 13.1 for which SBL is obliged to indemnify.

 

13.3

Indemnification Procedure.The foregoing indemnification by SBL or Client shall
be conditioned, if and to the extent Damages are based on or related to a third
party claim, upon a Party who intends to claim indemnification under Sections
13.1 and 13.2 (the “Indemnified Party”) (i) providing written notice to the
other Party (“Indemnifying Party”) within twenty (20) calendar days after the
Indemnified Party have been given written notice of such third party claim,
provided that absence or delay of such prior written notice will not relieve the
Indemnifying Party of its obligation to indemnify except to the extent such
absence or delay materially prejudices the Indemnifying Party’s ability to
defend the third party claim; (ii) permitting the Indemnifying Party, upon
timely notice by the Indemnified Party, the opportunity to assume full
responsibility (at the Indemnifying Party’s cost and expense) for the
investigation and defense of any such claim with counsel reasonably satisfactory
to the Indemnified Party, provided, however, that the Indemnifying Party shall
keep the Indemnified Party informed as to the progress of the defense of any
claim and that the Indemnified Party shall cooperate in such defense and shall
make available all records, materials and witness reasonably requested by the
Indemnifying Party in connection therewith; and (iii) not settling or
compromising any such claim without the Indemnifying Party’s prior written
consent, with such consent not to be unreasonably denied, withheld or
conditioned.

SECTION 14 DISCLAIMER OF CONSEQUENTIAL DAMAGES; LIMITATION OF LIABILITY

 

14.1

Disclaimer of Consequential Damages. EXCEPT IN THE EVENT OF A PARTY’S [***],
NEITHER PARTY WILL BE LIABLE UNDER THIS AGREEMENT FOR ANY SPECIAL, PUNITIVE,
CONSEQUENTIAL, INCIDENTAL OR OTHER INDIRECT DAMAGES OF ANY TYPE OR NATURE,
WHETHER BASED IN CONTRACT, TORT, STRICT LIABILITY, NEGLIGENCE OR OTHERWISE,
INCLUDING LOSS OF PROFITS OR REVENUES.

 

14.2

Limitation of Liability. Specific caps on Damages shall be set forth in the
applicable PSA.

 

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SECTION 15 TERM AND TERMINATION OF AGREEMENT

 

15.1

Term. This MSA will become effective as of the Effective Date and will be in
effect for as long as a PSA is in effect (the “Term”). Each PSA will have its
own initial term as stated therein and shall automatically renew for successive
terms of two (2) years each unless either Party gives written notice to the
other Party of its intention to terminate the Product Agreement at least six
(6) months prior to the end of the then current PSA term.

 

15.2

Termination. This MSA or a PSA may be earlier terminated as set forth in this
Section 15.2.

 

  15.2.1

Material Breach. A Party may terminate any PSA for a material breach by the
other Party; provided, however, that the non-breaching Party shall give the
breaching Party written notice of such breach and if the breaching Party [***]
after receipt of such written notice, then the non-breaching Party may terminate
this Agreement on [***] written notice after expiration of such [***] period.
This MSA shall terminate if all effective PSAs are terminated.

 

  15.2.2

Insolvency. This MSA may be terminated by either Party upon written notice at
any time during the MSA if the other Party: (a) files in any court pursuant to
any statute a petition in bankruptcy or insolvency or for reorganization or for
an arrangement or for the appointment of a receiver or trustee of such Party, or
of its assets; (b) proposes a written agreement of composition for extension of
its debts; (c) is served with an involuntary petition against it, filed in any
insolvency proceeding which is admitted in the court; or (d) makes an assignment
for the benefit of its creditors. The Party affected shall immediately notify
the other Party in writing of the occurrence of any of the foregoing events.

 

  15.2.3

Termination for Market Withdrawal. If during the period starting from the date
of completion of Manufacture of the last Process Validation Batch until the end
of the Term, Client decides or is required to withdraw from all markets in the
world for any scientific, medical or efficacy reasons, Client may terminate the
applicable PSA for the Product upon one and a half (1.5) year prior written
notice to SBL, subject to Section 15.3 below.

 

  15.2.4

Force Majeure. Either Party may terminate a PSA if a Party is unable to perform
its obligations pursuant to a PSA in the event of a Force Majeure Event in
accordance with Section 17.3.

 

15.3

Effect of Expiration or Termination.

 

  15.3.1

Payment of Amounts Due. Expiration or termination of the MSA or PSA for any
reason shall not exempt any Party from paying to any other Party any amounts
owing to such Party at the time of such expiration or termination.

 

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  15.3.2

Decommissioning. Upon expiration or termination of a PSA for any reason, SBL
shall cease and refrain from the Services described in any applicable PSA
(including the Manufacturing and supplying the Product) for Client unless
otherwise provided in the following Sections 15.3.2(a) to 15.3.2(d), and both
Parties shall pursue decommissioning activities as set forth hereunder.

 

  (a)

Fully Manufactured Product.

 

  (i)

If Client terminates a PSA pursuant to Section 15.2.1 or 15.2.2, upon Client’s
election, SBL shall, at Client’s election, (i) deliver already fully
Manufactured Product to Client in accordance with the terms and conditions of
the MSA and applicable PSA or (ii) destroy such Product. If Client elected
(i) above, Client shall pay the Service Fees and any related costs or fees for
the Service relating to such Product in accordance with the terms and conditions
of the MSA and applicable PSA, and if Client elected (ii) above, SBL shall bear
the costs and expenses for such destruction.

 

  (ii)

If SBL terminates a PSA pursuant to Section 15.2.1 15.2.2 or, Client terminates
a PSA pursuant to Section 15.2.3, upon payment of any amounts owed to SBL under
the applicable PSA, SBL shall deliver the fully Manufactured Product to Client
in accordance with the terms and conditions of the MSA and applicable PSA
(including the current Firm Period period or Binding Year in the PSA). Client
shall pay the Service Fee and any related costs or fees for the Service relating
to such Product in accordance with the terms and conditions of the MSA and
applicable PSA.

 

  (iii)

If either Party terminates a PSA pursuant to Section 15.2.4, both Parties shall
negotiate in good faith manner for the handling of the fully Manufactured
Product and the allocation of costs and expenses between the Parties.

 

  (iv)

If a PSA is naturally expired or terminated pursuant to Section 15.1, the
provisions of (ii) above shall apply.

 

  (b)

Client Materials being used for the Service (Product in Process).

 

  (i)

If Client terminates a PSA pursuant to Section 15.2.1 or 15.2.2, upon Client’s
election, SBL shall (i) continue to use the Client Materials being used for the
Manufacturing hereunder (the Product in process) and deliver the fully
Manufactured Product to Client in accordance with the terms and conditions of
the MSA and applicable PSA, or (ii) deliver to Client or destroy such Product in
process. If Client elected (i) above, Client shall pay the Service Fee and any
related costs or fees for the Service relating to the fully Manufactured Product
in accordance with the terms and conditions of the MSA and applicable PSA, and
if Client elected (ii) above, SBL shall bear the costs and expenses for such
activities.

 

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  (ii)

If SBL terminates a PSA pursuant to Section 15.2.1, 15.2.2, or Client terminates
a PSA pursuant to Section 15.2.3, upon payment of any amounts owed to SBL under
the applicable PSA, SBL shall continue to use the Client Materials being used
for the Manufacturing hereunder (the Product in process) and deliver the fully
Manufactured Product to Client in accordance with the terms and conditions of
the MSA and applicable PSA. Client shall pay the Service Fee and any related
costs or fees for the Service relating to the fully Manufactured Product in
accordance with the terms and conditions of the MSA.

 

  (iii)

If either Party terminates a PSA pursuant to Section 15.2.4, both Parties shall
negotiate in good faith manner for the handling of the Client Materials being
used for the Manufacturing hereunder (Product in process) and the allocation of
costs and expenses between the Parties.

 

  (iv)

If a PSA is naturally expired or terminated pursuant to Section 15.1, the
provisions of (ii) above shall apply.

 

  (c)

Client Materials, Cell Line, and Reference Standards.Upon expiration or
termination of a PSA, upon Client’s election, SBL shall deliver to Client and/or
destroy all remaining Client Materials (subject to Sections 15.3.2(a) and
15.3.2(b)), all remaining Cell Line vials, Reference Standards and other
materials required for Manufacturing.

The costs and expenses for such activities shall be borne by the Parties as
follows:

 

  (i)

If Client terminates aPSA pursuant to Section 15.2.1 or 15.2.2, SBL shall
deliver or dispose at no additional cost to Client and SBL shall bear such costs
and expenses for such activities;

 

  (ii)

If SBL terminates a PSA pursuant to Section 15.2.1, 15.2.2, or Client terminates
the PSA pursuant to Section 15.2.3, Client shall bear such costs and expenses
for such activities;

 

  (iii)

If either Party terminates a PSA pursuant to Section 15.2.4, both Parties shall
negotiate in good faith manner the allocation of all such costs and expenses for
such activities; and

 

  (iv)

If a PSA is naturally expired or terminated pursuant to Section 15.1, the
provisions of (ii) above shall reply.

 

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  (d)

Raw Materials.

 

  (i)

If Client terminates a PSA pursuant to Section 15.2.1 or 15.2.2 and if Client so
elects, SBL shall deliver the remaining Raw Materials to Client for Client’s
payment of SBL’s cost to procure such Raw Materials, or dispose of them at
Client’s election. SBL shall bear the costs and expenses for the delivery of the
Raw Materials.

 

  (ii)

If SBL terminates a PSA pursuant to Section 15.2.1 or 15.2.2, or Client
terminates a PSA pursuant to Section 15.2.3, SBL shall deliver the remaining
Specialized Raw Materials to Client. Client shall pay SBL’s cost to procure such
Specialized Raw Materials and bear the costs and expenses for the delivery of
such Specialized Raw Materials by SBL. In the case of Common Raw Materials, the
Parties shall discuss in good faith whether to have SBL keep, send to Client, or
dispose of the remaining Common Raw Materials.

 

  (iii)

If either Party terminates a PSA pursuant to Section 15.2.4, both Parties shall
negotiate in good faith manner for the handling of the Raw Materials and the
allocation of costs and expenses between the Parties.

 

  (iv)

If a PSA is naturally expired or terminated pursuant to Section 15.1, the
provisions of (ii) above shall apply.

 

  (e)

Outstanding Obligations Regarding Purchase of Product.

 

  (i)

If Client terminates a PSA pursuant to Section 15.2.1 or 15.2.2, Client shall
[***].

 

  (ii)

If SBL terminates a PSA pursuant to Section 15.2.1 or 15.2.2, or Client
terminates a PSA pursuant to Section 15.2.3, [***].

 

  (iii)

For all other cases of termination of a PSA, subsection (ii) shall apply, and
the Parties will discuss in good faith the extent to which Client will be
released from such obligations.

 

  (f)

Survival. Any termination or expiration of this MSA shall not affect any
outstanding obligations due hereunder prior to such termination or expiration,
nor shall it prejudice any other remedies that the parties may have under this
MSA. For greater certainty, except as otherwise expressly provided, termination
or expiration of this MSA, irrespective of the cause, shall not affect any
rights or obligations which, from the context thereof, are intended to survive
termination or expiration of this MSA, including but not limited to Sections 8,
9, 10, 11, 12, 13, 14, 15, 16 and 17.3.

 

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SECTION 16 ARBITRATION

 

16.1

Informal Discussions. Except as otherwise provided herein, in the event of any
controversy or claim arising out of or relating to this MSA, or the rights or
obligations of the Parties hereunder, the Parties shall first try to settle
their differences amicably between themselves through the Core Team and then JSC
level. Thereafter, either Party may initiate informal dispute resolution on the
Executive level by sending written notice of the dispute to the other Party, and
within thirty (30) days after such notice appropriate Executives of the Parties
shall meet for attempted resolution by good faith negotiations. If such
representatives are unable to resolve promptly such disputed matter within the
said thirty (30) days, either Party may refer the matter by written notice to
the Chief Executive Officer of the other Party, or his/her designee, and the
Chief Executive Officer of such Party, for discussion and resolution. If such
individuals or their designees are unable to resolve such dispute within thirty
(30) days of such written notice, either Party may initiate arbitration
proceedings in accordance with the provisions of this Article 16.

 

16.2

Arbitration. If the Parties do not fully settle a dispute pursuant to
Section 16.1, and a Party wishes to pursue the matter, each such dispute,
controversy or claim shall be finally resolved by binding arbitration in
accordance with the Commercial Arbitration Rules of the International Chamber of
Commerce (“ICC”), and judgment on the arbitration award may be entered in any
court having jurisdiction thereof to enforce the arbitration award. The
arbitration shall be conducted by a panel of three persons experienced in the
pharmaceutical business, and within thirty (30) days after initiation of
arbitration, each Party shall select one person to act as arbitrator and the two
Party-selected arbitrators shall select a third arbitrator within thirty
(30) days of their appointment. If the arbitrators selected by the Parties are
unable or fail to agree upon the third arbitrator, the third arbitrator shall be
appointed by the ICC. The place of arbitration shall be New York, New York,
United States and all proceedings and communications shall be in English. Either
Party may apply to the arbitrators for interim injunctive relief until the
arbitration award is rendered or the controversy is otherwise resolved. Either
Party also may, without waiving any remedy under this Agreement, seek from any
court having jurisdiction any injunctive or provisional relief necessary to
protect the rights or property of that Party pending the arbitration award. The
arbitrators shall have authority to award punitive any other type of damages not
measured by a Party’s direct compensatory damages, and in all cases, any
decision or determination by the arbitrators shall comply with Article 14, as
applicable. The Parties agree that, in the event of a good faith dispute over
the nature or quality of performance under this Agreement, neither Party may
terminate this Agreement until final resolution of the dispute through
arbitration or other judicial determination. The Parties further agree that any
payments made pursuant to this Agreement pending resolution of the dispute shall
be refunded if an arbitrator or court determines that such payments are not due.

 

16.3

Costs and Fees. Each Party shall bear its own attorneys’ fees, costs, and
disbursements arising out of the arbitration, and shall pay an equal share of
the fees and costs of the arbitrators. Absent the filing of an application to
correct or vacate the arbitration award as permitted by Applicable Law, each
Party shall fully perform and satisfy the arbitration award within fifteen
(15) days after the service of the award on such Party.

 

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SECTION 17 MISCELLANEOUS

 

17.1

Notices. Any notice required or permitted under the MSA shall be in writing with
duly authorized signature and made to the following addresses or facsimile
numbers:

If to Client:

CytoDyn Inc.

1111 Main Street

Suite 660

Vancouver, WA 98660

Attention:

Facsimile: (360) 980-8549

If to SBL:

Samsung BioLogics Co., Ltd.

300, Songdo bio-daero, Yeonsu-gu

Incheon 21987, South Korea

Attention: Head of Corporate Business Planning

Facsimile: +82-32-455-3242

With copy to: SBL Legal & Compliance Team

Either Party may change its designated address and facsimile number by notice to
the other Party in the manner provided in this Section 17.1.

Any notice shall be deemed to have been delivered on the date of delivery of
delivered personally, or on the next day of sending if sent by facsimile, or on
the fifth day of posting if sent by registered or certified mail with return
receipt requested and postage prepaid.

 

17.2

Governing Law. This MSA shall be construed and interpreted in accordance with
the laws of State of New York, United States and all rights and remedies shall
be governed by such laws without regard to principles of conflicts of law. The
United Nations Convention on Contracts for the International Sale of Goods shall
not apply to the transactions contemplated by the MSA.

 

17.3

Effect of Force Majeure Event. Except as set forth in this Section 17.3, neither
Party (the “Affected Party”) shall be liable to the other Party (the
“Non-Affected Party”) for failure or delay to perform its obligation under the
MSA or any applicable PSA when such failure or delay is due to riots, storms,
fires, explosions, floods, earthquakes, war, embargoes, blockades,
insurrections, an act of God or any other cause which is beyond the reasonable
control of the Affected Party including those affected upstream suppliers
(“Force Majeure Event”).

Each Party agrees to give the other Party prompt written notice of the
occurrence of any Force Majeure Event, the nature thereof, and the extent to
which the affected Party will be unable fully to perform its obligations under
the MSA. If a condition constituting Force Majeure Event as defined herein
exists for more than [***], the Parties shall negotiate a mutually satisfactory
solution to the problem, if practicable, including termination of this MSA upon
[***] written notice from the failure of reaching a mutually satisfactory
solution to the Force Majeure Event, or the use of a third party to fulfill the
obligations hereunder of the party invoking Force Majeure Event, at the expense
of the party invoking Force Majeure Event.

 

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17.4

Assignment. Neither Party shall assign, in whole or in part, the MSA without the
prior written consent of the other Party, such approval not to be unreasonably
withheld, except in the event of a sale of all, or substantially all of the
assets of a Party to which this MSA relates, in which case no consent shall be
required, in which case, the Party shall provide a written notice to the other
Party within one (1) month of the sale. For clarity, in the event that any Party
assigns the MSA as permitted under this Section 17.4, it shall be required to
contemporaneously assign any and all PSAs which are then in effect together with
this MSA.

 

17.5

No Grant of License. Nothing in the MSA shall affect, or grant any right to,
patents, know-how or other intellectual property owned by either Party prior to
the commencement of the MSA unless otherwise expressly provided in the MSA.

 

17.6

No Right to Use Names. Except as expressly provided herein, no right, expressed
or implied, is granted by the MSA to use in any manner the name of either of the
Parties or any other trade name, symbol, logo or trademark of the other Party in
connection with the performance of the MSA, without the prior written consent of
the other Party.

 

17.7

Independent Contractors. The Parties hereto are independent contractors and
nothing contained in the MSA shall be deemed or construed to create a
partnership, joint venture, employment, franchise, agency or fiduciary
relationship between the Parties.

 

17.8

Integration. This MSA constitutes the entire agreement between the Parties
relating to the subject matter of the MSA and supersedes all previous oral and
written communications between the Parties with respect to the subject matter of
the MSA.

 

17.9

Amendment; Waiver. Except as otherwise expressly provided herein, no alteration
of or modification to the MSA shall be effective unless made in writing and
executed by an authorized representative of both Parties. No course of dealing
or failing of either Party to strictly enforce any term, right or condition of
the MSA in any instance shall be construed as a general waiver or relinquishment
of such term, right or condition. The observance of any provision of the MSA may
be waived (either generally or any given instance and either retroactively or
prospectively) only with the written consent of the Party granting such waiver.

 

17.10

Severability. The Parties do not intend to violate any applicable law. However,
if any sentence, paragraph, clause or combination of the MSA is in violation of
any law or is found to be otherwise unenforceable, such sentence, paragraph,
clause or combination of the same shall be deleted and the remainder of the MSA
shall remain binding, provided that such deletion does not alter the basic
purpose and structure of the MSA.

 

17.11

Construction. The Parties mutually acknowledge that they have participated in
the negotiation and preparation of the MSA. Ambiguities, if any, in the MSA
shall not be construed against any Party, irrespective of which Party may be
deemed to have drafted the MSA or authorized the ambiguous provision.

 

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17.12

Interpretation. The captions and headings to the MSA are for convenience only,
and are to be of no force or effect in construing or interpreting any of the
provisions of the MSA. Unless context otherwise clearly requires, whenever used
in the MSA: (a) the words “include” or “including” shall be construed as
incorporating, also, “but not limited to” or “without limitation”; (b) the words
“hereof,” “herein,” “hereby” and derivative or similar words refer to the MSA;
(c) the word “law” or “laws” means any applicable, legally binding statute,
ordinance, resolution, regulation, code, guideline, rule, order, decree,
judgment, injunction, mandate or other legally binding requirement of a
governmental authority (including a court, tribunal, agency, legislative body or
other instrumentality of any (i) government or country or territory, (ii) any
state, province, county, city or other political subdivision thereof, or
(iii) any supranational body); and (d) all references to the word “will” are
interchangeable with the word “shall” and shall be understood to be imperative
or mandatory in nature. All references to days, months, quarters or years are
references to calendar days, calendar months, calendar quarters, or calendar
years. Whenever any matter hereunder requires consent or approval, such consent
or approval shall not be unreasonably withheld or delayed.

 

17.13

Counterparts. This MSA may be executed in two or more counterparts, each of
which will be deemed an original, but all of which together will constitute one
and the same instrument.

IN WITNESS WHEREOF, the Parties have executed the MSA as of the date first above
written.

 

CYTODYN INC. Signature:   /s/ Nader Pourhassan Name:  

Dr. Nader Pourhassan

Title:  

President and CEO

Date:   30 March 2019 SAMSUNG BIOLOGICS CO., LTD. Signature:   /s/ Dr. Tae Han
Kim Name:   Dr. Tae Han Kim Title:   Representative Director and President Date:
  April 1, 2019

 

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