FAILS TO MAKE PAYMENTS AS REQUIRED HEREUNDER, AVECIA MAY REFUSE ALL
FURTHER PROJECT PLANS, REFUSE TO PRODUCE OR DISPOSITION ANY DRUG SUBSTANCE OR
CARRY OUT PROGRAMMES UNTIL ALL OUTSTANDING SUMS ARE PAID IN FULL, MODIFY THE
FOREGOING TERMS OF PAYMENT, PLACE THE ACCOUNT ON A LETTER OF CREDIT BASIS,
REQUIRE FULL OR PARTIAL CASH PAYMENT IN ADVANCE AND/OR SUSPEND DELIVERIES OF
DRUG SUBSTANCE UNTIL PHARMATHENE PROVIDES ASSURANCE OF FURTHER OR FUTURE PAYMENT
REASONABLY SATISFACTORY TO AVECIA.
2.11
FLOWDOWN PROVISIONS:
TO THE EXTENT THAT ANY WORK
PERFORMED BY AVECIA UNDER THIS AGREEMENT IS PERFORMED PURSUANT TO A PRIME
CONTRACT, AVECIA ACKNOWLEDGES AND AGREES THAT ANY AND ALL WORK PERFORMED
THEREUNDER IS SUBJECT TO THE TERMS AND CONDITIONS OF THE PRIME CONTRACT THAT ARE
APPLICABLE TO A SUBCONTRACTOR UNDER THE PRIME CONTRACT.
AVECIA ACKNOWLEDGES
THAT IT HAS BEEN PROVIDED WITH A COPY OF
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CONFIDENTIAL
THE EXISTING PRIME CONTRACTS AND IS INFORMED AS TO THE TERMS, CONDITIONS AND
OBLIGATIONS OF THE PRIME CONTRACT THAT ARE APPLICABLE TO A SUBCONTRACTOR
THEREUNDER.
AVECIA COVENANTS AND AGREES TO BE BOUND BY THE TERMS, CONDITIONS
AND OBLIGATIONS OF THE PRIME CONTRACT THAT ARE APPLICABLE TO A SUBCONTRACTOR
THEREUNDER.
WITHOUT LIMITING THE FOREGOING, IT IS UNDERSTOOD THAT PROGRAMMES
UNDER THIS AGREEMENT WILL BE CARRIED OUT PURSUANT TO OBLIGATIONS CONTAINED IN
THE PRIME CONTRACTS AND SUCH PRIME CONTRACTS CONTAIN OBLIGATIONS ON PHARMATHENE
TO FLOW DOWN CERTAIN CLAUSES (INCLUDING, WITHOUT LIMITATION, US GOVERNMENT FAR,
DFAR AND HHSAR CLAUSES AND UK GOVERNMENT DEFCON CLAUSES) TO PHARMATHENE'S
SUBCONTRACTORS, INCLUDING AVECIA.
CLAUSES APPLICABLE TO PRIME CONTRACT WITH
DAIL ARE SET OUT IN SCHEDULE 1A AND CLAUSES APPLICABLE TO PRIME CONTRACTS WITH
NIH ARE SET OUT IN SCHEDULE 1)B.
CLAUSES FLOWING DOWN FROM ADDITIONAL PRIME
CONTRACTS WILL BE SET OUT IN FURTHER SCHEDULES, TO BE ADDED BY WRITTEN AGREEMENT
OF THE PARTIES.
IF A PROJECT PLAN REFERS TO A SCHEDULE TO THIS AGREEMENT, THE
CLAUSES SET OUT IN THE RELEVANT SCHEDULE SHALL BE INCORPORATED INTO THIS
AGREEMENT BY REFERENCE SOLELY IN RESPECT OF SUCH PROJECT PLAN.
3.
TERM AND TERMINATION
3.1
TERM:
THIS AGREEMENT SHALL COMMENCE ON THE
DATE FIRST ABOVE WRITTEN AND WILL CONTINUE UNTIL ALL PROGRAMMES HAVE BEEN
COMPLETED, UNLESS TERMINATED EARLIER PURSUANT TO SECTION 32 BELOW (THE "TERM").
3.2
TERMINATION:
THIS AGREEMENT OR A PROJECT PLAN
(AS APPROPRIATE) MAY BE TERMINATED AT ANY TIME UPON THE OCCURRENCE OF ANY OF THE
FOLLOWING EVENTS:
(A)
TERMINATION FOR MATERIAL BREACH:
EITHER
PARTY MAY TERMINATE THIS AGREEMENT OR A PROJECT PLAN IF THE OTHER IS IN MATERIAL
BREATH OF THIS AGREEMENT AND DOES NOT RECTIFY SUCH BREACH (IF SUCH BREATH IS
CAPABLE OF REMEDY) WITHIN FOURTEEN (14) CALENDAR DAYS FOR MONETARY DEFAULTS
(WHICH DEFAULT CAN BE CURED BY MAKING SUCH PAYMENT WITHIN SAID FOURTEEN (14)
CALENDAR DAY PERIOD) OR THIRTY (30) CALENDAR DAYS FOR NON-MONETARY DEFAULTS (OR
SUCH ADDITIONAL TIME REASONABLY NECESSARY TO CURE SUCH NON-MONETARY DEFAULT
PROVIDED THE BREACHING PARTY HAS COMMENCED A CURE WITHIN THE THIRTY (30) DAY
PERIOD (OR SUCH OTHER PERIOD AS IS REASONABLY PRACTICABLE)