Document:

exv10w34

 

 [ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

Exhibit 10.34

EXCLUSIVE LICENSE AND DEVELOPMENT COLLABORATION AGREEMENT

by and between

MERCK & CO., INC.

and

DYNAVAX TECHNOLOGIES CORPORATION

Execution

 

 

EXCLUSIVE LICENSE AND DEVELOPMENT COLLABORATION AGREEMENT

     This Agreement (this “Agreement") is effective as of October 31, 2007 (the “Effective Date"),
and is entered into by and between MERCK & CO., INC., a corporation organized and existing under
the laws of New Jersey (“Merck"), and DYNAVAX TECHNOLOGIES CORPORATION, a corporation organized and
existing under the laws of Delaware (“Dynavax").

RECITALS:

     WHEREAS, Dynavax has developed Dynavax Know-How (as hereinafter defined) and has rights to
Dynavax Patent Rights (as hereinafter defined);

     WHEREAS, Merck and Dynavax desire to enter into a research collaboration to develop the
Licensed Vaccine (as hereinafter defined) upon the terms and conditions set forth herein;

     WHEREAS, Merck desires to obtain a license under the Dynavax Patent Rights and Dynavax
Know-How, upon the terms and conditions set forth herein and Dynavax desires to grant such a
license;

     WHEREAS, Merck and Dynavax desire to enter into a separate Manufacturing Agreement (as
hereinafter defined) as of the Effective Date with respect to furtherance of the collaboration
under this Agreement;

     NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein
contained, the receipt and sufficiency which are hereby acknowledged, Merck and Dynavax hereby
agree as follows:

ARTICLE 1 DEFINITIONS.

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

	1.1	 	“Act” shall mean, as applicable, the United States Federal Food, Drug and Cosmetic Act, 21
U.S.C. §§ 301 et seq., and/or the Public Health Service Act, 42 U.S.C. §§ 262 et seq., as such
may be amended from time to time.
	 
	1.2	 	“Affiliate” shall mean (i) any corporation or business entity of which [ * ] of the
securities or other ownership interests representing the equity, the voting stock or general
partnership interest are owned, controlled or held, directly or indirectly, by Merck or
Dynavax; or (ii) any corporation or business entity which, directly or indirectly, owns,
controls or holds [ * ] (or the maximum ownership interest permitted by law) of the securities
or other ownership interests representing the equity, the voting stock or, if applicable, the
general partnership interest, of Merck or Dynavax; or (iii) any corporation or business entity
of which [ * ] of the securities or other ownership interests representing the equity, the
voting stock or general partnership interest are owned, controlled or held, directly or
indirectly, by a corporation or business entity described in

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	 	(i) or (ii). Notwithstanding anything to the contrary in the foregoing, [ * ] shall not be
considered an Affiliate of Merck.
	 
	1.3	 	“Agreement” shall have the meaning given such term in the preamble to this document.
	 
	1.4	 	“BLA” shall mean a New Drug Application, Biologics License Application, Worldwide Marketing
Application, Marketing Application Authorization, filing pursuant to Section 510(k) of the
Act, or similar application or submission for Marketing Authorization of a Product filed with
a Regulatory Authority to obtain marketing approval for a biological, pharmaceutical or
diagnostic product in that country or in that group of countries.
	 
	1.5	 	“Bridging Study” shall mean the Clinical Trial conducted [ * ] as described in Schedule
2.1 as such study may be modified from time-to-time as part of the Development Plan in
accordance with Section 2.4.3. 
	 
	1.6	 	“Calendar Quarter” shall mean the respective periods of three (3) consecutive calendar months
ending on March 31, June 30, September 30 and December 31.
	 
	1.7	 	“Calendar Year” shall mean each successive period of twelve (12) months commencing on
“January 1 and ending on December 31.
	 
	1.8	 	“Ceased Development Notice” shall have the meaning given such term in Section 3.4.4.
	 
	1.9	 	“Change of Control” shall mean with respect to a Party: (1) the sale of all or substantially
all of such Party’s assets or business relating to this Agreement; (2) a merger,
reorganization or consolidation involving such Party in which the voting securities of such
Party outstanding immediately prior thereto cease to represent at least fifty percent (50%) of
the combined voting power of the surviving entity immediately after such merger,
reorganization or consolidation; or (3) a person or entity, or group of persons or entities,
acting in concert acquire more than fifty percent (50%) of the voting equity securities or
management control of such Party.
	 
	1.10	 	“Clinical Product” shall have the meaning given such term in Section 8.3.
	 
	1.11	 	“Clinical Trial” shall mean a Phase I Clinical Trial, Phase II Clinical Trial, Phase III
Clinical Trial, and/or post-approval Clinical Trial.
	 
	1.12	 	[ * ]
	 
	1.13	 	[ * ]
	 
	1.14	 	“Combination Product” shall mean a Product which includes [ * ]. All references to Product
in this Agreement shall be deemed to include Combination Products.
	 
	1.15	 	“Competing Pharma Change of Control” shall mean a Change of Control in which a company or
group of companies acting in concert (a) for whom aggregate worldwide sales of [ * ] in the
Calendar Year that preceded the Change of Control were [ * ], or (b) [ * ].
	 
	1.16	 	“Competitive Product” shall mean a product [ * ] whether for sale by prescription,
over-the-counter or any other method.

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	1.17	 	“Control”, “Controls” or “Controlled by” shall mean with respect to any item of or right
under Dynavax Patent Rights, Dynavax Know-How, Merck Know-How or any other intellectual
property rights, the possession of (whether by ownership or license, other than pursuant to
this Agreement) or the ability of a Party to grant access to, or a license or sublicense of,
such items or right as provided for herein without violating the terms of any agreement or
other arrangement with any Third Party existing at the time such Party would be required
hereunder to grant the other Party such access or license or sublicense.
	 
	1.18	 	“Development Budget” shall have the meaning given such term in Section 2.3.
	 
	1.19	 	“Development Plan” shall have the meaning given such term in Section 2.1.
	 
	1.20	 	“Development Program” shall mean the research and development activities for Licensed Vaccine
and Product undertaken by the Parties (or their respective Affiliate(s) and/or Third Parties
who are acting on their behalf) as set forth in Article 2 and the Development Plan, which
activities shall continue until [ * ].
	 
	1.21	 	“Dynavax” shall have the meaning given such term in the preamble to this Agreement.
	 
	1.22	 	[ * ]
	 
	1.23	 	“Dynavax IND” shall have the meaning given such term in Section 6.2.8.
	 
	1.24	 	“Dynavax Information and Inventions” shall mean all protocols, formulas, data, Inventions,
know-how and trade secrets, patentable or otherwise, resulting from the Development Program or
performance under this Agreement developed or invented solely by employees of Dynavax and/or
its Affiliate(s) or other persons not employed by Merck or its Affiliate(s) who are acting on
behalf of Dynavax and/or its Affiliates.
	 
	1.25	 	“Dynavax Know-How” shall mean all information and materials, including but not limited to,
discoveries, improvements, processes, methods, protocols, formulas, data, inventions
(including without limitation Dynavax Information and Inventions and Dynavax’s rights in Joint
Information and Inventions), know-how and trade secrets, patentable or otherwise, which during
the term of this Agreement (i) are Controlled by Dynavax and/or its Affiliate(s), (ii) are not
generally known and (iii) are necessary or useful to Merck in connection with the Development
Program or the research, development, manufacture, marketing, use or sale of Licensed Vaccine
or Product in the Territory; excluding, however, any Merck Know-How.
	 
	1.26	 	“Dynavax Patent Rights” shall mean any and all patents and patent applications in the
Territory (which for the purposes of this Agreement shall be deemed to include certificates of
invention and applications for certificates of invention) which during the term of this
Agreement are Controlled by Dynavax and/or its Affiliate(s), including but not limited to
those listed on Schedule 1.26, which: (i) claim or cover Licensed Vaccine and/or
Product, including without limitation any improvements thereto; or (ii) claim or cover Dynavax
Information and Inventions or Joint Information and Inventions; or (iii) are divisionals,
continuations, continuations-in-part, reissues, renewals, substitutions, registrations,
re-examinations, revalidations, extensions, supplementary protection certificates, pediatric
exclusivity periods and the likes of any such patents and patent applications and foreign
equivalents of the foregoing.

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	1.27	 	“Effective Date” shall have the meaning given such term in the preamble to this Agreement.
	 
	1.28	 	“European Market” shall mean any one of [ * ].
	 
	1.29	 	“Field” shall mean [ * ].
	 
	1.30	 	“Filing of a BLA” shall mean the acceptance by a Regulatory Authority of a BLA for filing.
	 
	1.31	 	“First Commercial Sale” shall mean the first sale for end use or consumption of Product in a
country, excluding, however, any sale or other distribution for use in a Clinical Trial or
“compassionate use” sales.
	 
	1.32	 	“Full Time Equivalent” or “FTE” shall mean the equivalent of a full-time employee’s work time
over a twelve-month period (including normal vacations, sick days and holidays);
provided that a FTE shall not include [ * ]. The portion of an FTE year devoted by an
employee to the Development Program shall be determined by dividing the number of full days
during any twelve-month period devoted by such employee to the Development Program by [ * ]
days during such twelve-month period.
	 
	1.33	 	“FTE Rate” shall mean the amount Merck will pay Dynavax over a consecutive twelve (12) month
period during the Development Program to support one (1) Dynavax FTE dedicated to the
Development Program. [ * ].
	 
	1.34	 	“GLP” or “Good Laboratory Practice” shall mean the applicable then-current standards for
laboratory activities for pharmaceuticals or biologicals, as set forth in the Act and any
regulations or guidance documents promulgated thereunder, as amended from time to time,
together with any similar standards of good laboratory practice as are required by any
Regulatory Authority in the Territory.
	 
	1.35	 	“Hep B Field” shall mean [ * ].
	 
	1.36	 	“Hepatitis B Surface Antigen” shall mean [ * ].
	 
	1.37	 	“IND” shall mean an Investigational New Drug application, Clinical Study Application,
Clinical Trial Exemption, or similar application or submission for approval to conduct human
clinical investigations filed with or submitted to a Regulatory Authority in conformance with
the requirements of such Regulatory Authority.
	 
	1.38	 	“Information” shall mean any and all information and data, including without limitation all
Merck Know-How, all Dynavax Know-How, and all other scientific, pre-clinical, clinical,
regulatory, manufacturing, marketing, financial and commercial information or data, whether
communicated in writing or orally or by any other method, which is provided by one Party
and/or its Affiliate(s) to the other Party and/or its Affiliate(s) in connection with this
Agreement.
	 
	1.39	 	“Invention” shall mean any process, method, composition of matter, article of manufacture,
discovery or finding that is conceived and/or reduced to practice as a result of the
Development Program.

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	1.40	 	“Joint Development Committee” or “JDC” shall mean the joint development committee established
to facilitate the Development Program as more fully described in Section 2.4.
	 
	1.41	 	“Joint Development Team” or “JDT” shall have the meaning given such term in Section 2.4.5.
	 
	1.42	 	“Joint Information and Inventions” shall mean all protocols, formulas, data, Inventions,
know-how and trade secrets, patentable or otherwise, resulting from the Development Program
developed or invented jointly by employees of Merck, its Affiliates and/or a Third Party
acting on behalf or Merck and/or its Affiliates, on the one hand, and Dynavax, its Affiliates
and/or a Third Party acting on behalf or Dynavax and/or its Affiliates, on the other hand.
	 
	1.43	 	“Licensed Vaccine” shall mean [ * ] preparation that contains both the Hepatitis B Surface
Antigen and 1018 ISS for [ * ].
	 
	1.44	 	“Manufacturing Agreement” shall mean the Manufacturing Agreement, effective as of the
Effective Date, by and between Merck and Dynavax, as such agreement may be amended, restated
or otherwise modified from time to time.
	 
	1.45	 	“Marketing Authorization” shall mean all approvals from the relevant Regulatory Authority
necessary to market and sell a Product in any country (including without limitation all
applicable pricing and governmental reimbursement approvals even if not legally required to
sell Product in a country).
	 
	1.46	 	“Merck” shall have the meaning given such term in the preamble to this Agreement.
	 
	1.47	 	“Merck Information and Inventions” shall mean all protocols, formulas, data, Inventions,
know-how and trade secrets, patentable or otherwise, resulting from the Development Program
developed or invented solely by employees of Merck and/or its Affiliate(s), or other persons
not employed by Dynavax and/or its Affiliate(s) who are acting on behalf of Merck and/or its
Affiliate(s).
	 
	1.48	 	“Merck Know-How” shall mean any information and materials, including but not limited to,
discoveries, improvements, processes, methods, protocols, formulas, data, inventions
(including without limitation Merck’s Information and Inventions and Merck’s rights in Joint
Information and Inventions), know-how and trade secrets, patentable or otherwise, which during
the term of this Agreement, (i) are Controlled by Merck and/or its Affiliate(s), (ii) are not
generally known and (iii) are in Merck’s reasonable opinion necessary to Dynavax in the
performance of its obligations under the Development Program and Manufacturing Agreement.
	 
	1.49	 	“Net Sales” small mean [ * ].
	 
	1.50	 	“Not Incurred Expense Period” shall have the meaning given such term in Section 2.3.1.
	 
	1.51	 	“Not Incurred Prior Development Expenses” shall have the meaning given such term in Section
2.3.1.
	 
	1.52	 	“Party” shall mean Merck or Dynavax, individually, and “Parties” shall mean Merck and
Dynavax, collectively.

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	1.53	 	“Phase I Clinical Trial” shall mean a human clinical trial in any country that would satisfy
the requirements of 21 CFR 312.21(a).
	 
	1.54	 	“Phase II Clinical Trial” shall mean a human clinical trial in any country that would satisfy
the requirements of 21 CFR 312.21(b).
	 
	1.55	 	“Phase III Clinical Trial” shall mean a human clinical trial in any country that would
satisfy the requirements of 21 CFR 312.21(c).
	 
	1.56	 	“Potential Future Sublicensed Technology” shall have the meaning given such term in Section
3.5.1.
	 
	1.57	 	“Product(s)” shall mean [ * ] preparation in final form containing Licensed Vaccine, (i) for
sale by prescription, over-the-counter or any other method; or (ii) for administration to
human patients in a Clinical Trial, for any and all uses in the Field, including without
limitation any Combination Product.
	 
	1.58	 	“Project Leader” shall have the meaning given such term in Section 2.4.6.
	 
	1.59	 	“Regulatory Authority” shall mean any applicable government regulatory authority involved in
granting approvals for the manufacturing, marketing, reimbursement and/or pricing of a Product
in the Territory, including, in the United States, the United States Food and Drug
Administration and any successor governmental authority having substantially the same
function.
	 
	1.60	 	“Related Party” shall mean each of Merck, its Affiliates, and their respective sublicensees
(which term does not include distributors), as applicable. Notwithstanding anything to the
contrary in the foregoing and for the purposes of clarity, [ * ] shall be a Related Party in
the event [ * ].
	 
	1.61	 	[ * ]
	 
	1.62	 	[ * ]
	 
	1.63	 	“Territory” shall mean all of the countries in the world, and their territories and possessions.
	 
	1.64	 	“Third Party” shall mean an entity other than Merck and its Related Parties, and Dynavax and
its Affiliates.
	 
	1.65	 	“Wind Down Activities” shall have the meaning given such term in Section 10.4.3(f).
	 
	1.66	 	“Wind Down Period” shall have the meaning given such term in Section 10.4.3(f).
	 
	1.67	 	“1018 ISS” shall mean the adjuvant commonly identified within Dynavax as 1018 ISS, an
immunostimulatory sequence (ISS) composed of the [ * ].

ARTICLE 2 RESEARCH PROGRAM

	2.1	 	General. Merck shall have sole responsibility for the development of Licensed Vaccine and
Products in the Field in the Territory within the scope of the rights granted to Merck under
this

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	 	Agreement, subject to Dynavax’s performance of its development obligations as set forth in
this Article 2, its manufacturing and supply, and technology transfer obligations set forth
in Article 8, and its other obligations set forth in this Agreement and the Manufacturing
Agreement. Development Program activities shall be conducted in accordance with the
development plan (the “Development Plan”), as it may be amended or otherwise modified from
time-to-time by the JDC in accordance with Section 2.4, or otherwise upon mutual written
agreement between the Parties. An initial general description of the various activities to
be undertaken as part of the Development Plan is set forth in Schedule 2.1 attached
hereto. The Development Program and the Development Plan shall cover the period from the
Effective Date until such time as [ * ]. Without limiting the foregoing, the Development
Plan, once comprehensively designed by the JDT in accordance with Section 2.4.5, shall
outline which Party is responsible for conducting particular Development Program activities,
and an outline of the major activities, goals and timelines for Licensed Vaccine and Product
development, which may include, without limitation, activities with respect to [ * ]. For
the purposes of clarity, the Development Plan shall not include the foregoing activities
with respect to [ * ].
	 
	2.2	 	Conduct of Development. Dynavax and Merck each shall use commercially reasonable efforts to
complete promptly the work assigned to it for the Development Program by using their
respective good faith efforts to allocate sufficient time, effort, equipment and facilities to
the Development Program and to use personnel, employees and agents with sufficient skills and
experience as are required to accomplish the Development Program, in each case in accordance
with the terms of this Agreement and the Development Plan. Without limiting any other
provision of this Agreement, neither Dynavax nor its Affiliates shall perform development or
other research work on the Licensed Vaccine or Product except in accordance with the
Development Plan or otherwise with the prior written consent of Merck.
	 
	 	 	Dynavax and Merck each shall conduct the Development Program in compliance with all
applicable laws, rules and regulations, including, without limitation, Good Laboratory
Practice. In addition, if animals are used in research hereunder, each Party will comply
with the Animal Welfare Act or any other applicable local, state, national and international
laws and regulations relating to the care and use of laboratory animals. Merck encourages
Dynavax to use the highest standards, such as those set forth in the Guide for the Care and
Use of Laboratory Animals (NRC, 1996), for the humane handling, care and treatment of such
research animals. Any animals which are used in the course of the Development Program, or
products derived from those animals, such as eggs or milk, will not be used for food
purposes, nor will these animals be used for commercial breeding purposes. Each Party shall
notify the other Party in writing of any material deviations from applicable regulatory or
legal requirements. Each Party hereby certifies to the other that it has not employed, and
will not employ or otherwise use in any capacity, the services of any person debarred under
United States law, including but not limited to Section 21 USC 335a, in performing any
portion of the Development Program.
	 
	 	 	Merck shall be entitled to utilize the services of its Affiliates and Third Parties to
perform its Development Program activities. Dynavax shall be entitled to utilize the
services of its Affiliates and Third Parties to perform its Development Program activities
only as specifically set forth in the Development Plan or upon Merck’s prior written
consent, which consent shall not be unreasonably withheld. The Parties agree that Rhein
Biotech GmbH (also identified as Dynavax Europe) shall be considered an approved Affiliate
under this Agreement so long as it remains an Affiliate of Dynavax. Notwithstanding any
such consent, both Parties shall remain at all times

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	 	fully liable for its respective responsibilities under the Development Program. Each Party
shall ensure by written agreement that its Affiliates, and their personnel, employees, and
agents and Third Parties performing activities under the Development Program on such Party’s
behalf comply with confidentiality and non-use obligations that substantially are no less
stringent than those confidentiality and non-use provisions contained in Article 4. Dynavax
shall further ensure by written agreement that its Affiliates and Third Parties performing
activities under the Development Program on Dynavax’s behalf are obligated to assign any
rights they may have in any Dynavax Information and Inventions or Joint Information and
Inventions arising as a result of such work to Dynavax.
	 
	2.3	 	Development Program Funding.

	 	2.3.1	 	Merck Funding Responsibility. Merck shall be responsible for its own
costs under the Development Program, and shall reimburse Dynavax for the costs of
Dynavax’s activities under the Development Program in accordance with this Section 2.3.
Subject to the Development Budget process outlined below, Merck shall reimburse
Dynavax for activities performed by Dynavax and, as permitted in accordance with
Section 2.2, its Affiliates and Third Parties under the Development Plan [ * ]. Unless
otherwise agreed in writing, Merck shall have no obligation to reimburse Dynavax for
any of Dynavax’s Development Plan expenses other than as specified above, including
without limitation for any [ * ]. Except as expressly provided in Section 5.2.2, Merck
shall have no obligation to reimburse Dynavax for (A) any development activities
conducted by, or on behalf of, Dynavax prior to the Effective Date, or (B) any
activities not specified in the Development Plan and the Development Budget unless
otherwise approved pursuant to Section 2.4.1; provided that with respect to
clause (A) above, the Parties acknowledge that Dynavax has accrued but not yet incurred
all of its costs for certain periods prior to the Effective Date and the Parties
therefore agree that Merck shall reimburse Dynavax for its development costs for its
efforts to develop the Licensed Vaccine only covering the period from September 1, 2007
through the Effective Date (the “Not Incurred Expense Period") consistent with the
reimbursement principals specified in the second sentence of this Section 2.3.1 and at
an amount not to exceed the amount budgeted for the Not Incurred Expense Period as
specified in Schedule 2.3 attached hereto (such development costs during the
Not Incurred Expense Period being referred to herein as the “Not Incurred Prior
Development Expenses”). Dynavax shall apply all development funding it receives from
Merck under this Section 2.3 solely to carry out its development activities in
accordance with the Development Plan, the Development Budget and the terms and
conditions of this Agreement. Notwithstanding anything to the contrary in this Section
2.3, any Merck obligation to compensate Dynavax for its manufacturing and supply of any
Clinical Product and commercial supply shall be as specified in Article 8 and the
Manufacturing Agreement.
	 
	 	2.3.2	 	Development Budget. 

	 	(a)	 	The JDC shall establish a budget (the “Development Budget”)
which shall cover all activities required by the Development Plan, and shall
specifically identify those activities that are to be carried out by, or on
behalf of Dynavax and the estimated FTE costs and out of pocket costs for such
Dynavax activities. The Development Budget for the current and the following
Calendar Year shall be

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	 	 	specified in a level of detail consistent with Merck’s standard practices
for such reports, which practices shall be identified to Dynavax by Merck
from time to time hereunder. An initial development budget has been
attached as Schedule 2.3 hereto and it is understood that any
amounts specified therein for the 2007 Calendar Year are to be adjusted as
appropriate to account for the amounts paid to Dynavax by Merck under
Section 5.2.2 for the period from January 1, 2007 through August 31, 2007
and any amounts paid by Merck to Dynavax for the Not Incurred Expense
Period.
	 
	 	(b)	 	The JDC shall review, monitor and propose revisions the
Development Budget on a periodic basis. To assist the JDC and Merck in
establishing and revising the Development Budget, upon the request of the JDC
or Merck from time-to-time, Dynavax shall provide Merck with estimates of its
costs for activities assigned to Dynavax under the Development Plan for any
subsequent Calendar Quarter(s) an/or Calendar Year(s). Unless specified in
Schedule 2.3 or previously agreed to by Dynavax as part of a JDC
approved Development Budget, Dynavax shall not be obligated to perform any
activities under the Development Plan if it in good faith believes that the
estimated costs specified in the then current Development Budget for such
activities are not sufficient.

	 	2.3.3	 	Invoicing for Dynavax Development Activities. Promptly and in any
event no later than [ * ] following the conclusion of each Calendar Quarter, in which
Dynavax has performed work under the Development Plan, Dynavax shall provide Merck with
a detailed invoice covering such Calendar Quarter including a detailed list of the work
actually performed by or on behalf of Dynavax under the Development Plan for such
Calendar Quarter, together with an accounting of Dynavax and its Affiliate’s FTE
efforts and its out of pocket costs for such work; provided that (a) within [ *
] after the Effective Date, Dynavax may provide Merck with an invoice for Not Incurred
Prior Development Expenses that cover development work performed by Dynavax during the
month of September 2007; and (b) the invoice for the first Calendar Quarter to conclude
after the Effective Date shall include Not Incurred Prior Development Expenses during
the Not Incurred Expense Period to the extent not already included in an invoice
provided by Dynavax in accordance with clause (a) above. Merck shall pay Dynavax
within [ * ] of Merck’s receipt of a reasonably detailed invoice. If Dynavax becomes
aware, or in good faith believes, that its costs for any particular Development Plan
activity assigned to it will exceed the amount set forth in the Development Budget
therefor, it shall obtain prior approval from the JDC for any such variance.
Notwithstanding anything to the contrary in this Agreement, unless otherwise agreed to
by the JDC or the Parties, Merck’s total financial obligations for work performed by
Dynavax under the Development Program for any Calendar Quarter shall not exceed the
amount set forth in the Development Budget therefor.
	 
	 	2.3.4	 	Informal Monitoring of Dynavax Costs. On a periodic basis (to be
agreed by the Parties) during each Calendar Quarter in which Dynavax is performing work
under the Development Plan, and as otherwise requested by Merck from time-to-time, on
an informal basis the Program Coordinators for each Party shall discuss Dynavax’s
progress based on Dynavax’s then current internal records and forecasts, including a
break down of Dynavax FTE efforts and its out of pocket costs expended and projected
for work

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	 	 	assigned to Dynavax under the Development Plan for such Calendar Quarter. The goal
of such discussions shall be to ensure that the contemplated Dynavax activities
under the Development Plan are appropriately completed and performed within the
Development Budget therefor.
	 
	 	2.3.5	 	Merck Audit Rights. Dynavax will keep (and cause its Affiliates and
agents performing services on its behalf under the Development Program to keep) true,
accurate and complete records of its work efforts on an FTE basis and its out of pocket
costs in sufficient detail to permit determination of the costs of such services
consistent with Section 2.3.1, and will provide Merck’s Program Coordinator with
reasonable evidence of such costs to enable Merck’s Program Coordinator to monitor and
report on such expenses as compared to the Development Budget. In addition, upon the
written request of Merck providing at least [ * ] notice and not more than [ * ] in
each Calendar Year, Dynavax will permit Merck or its independent certified accountants
of nationally and/or regionally recognized reputation, to have access during ordinary
business hours to such of Dynavax records (and shall cause its Affiliates, and agents
to permit such access to their records) as may be necessary to substantiate the
accuracy of any of Dynavax’s invoices provided to Merck and the conformance of such
invoices to the Development Budget. The audit of the expenses for a calendar year must
occur within [ * ] of the end of a Calendar Year. If there is a dispute between Merck
and Dynavax concerning the accuracy of any Dynavax invoice for its work under the
Development Program, such dispute shall first be submitted to the JDC for resolution
and if the JDC is unable to resolve such dispute, the Parties shall meet and in good
faith attempt to resolve such dispute between the Executive Officers (as defined in
Section 2.4.1), and if such dispute remains, either Party may submit the dispute to the
dispute resolution process set forth in Section 12.6.

	2.4	 	Joint Development Committee. The Parties hereby establish a committee to facilitate the
Development Program as follows:

	 	2.4.1	 	Composition of the Joint Development Committee. The Development
Program shall be conducted under the direction of a joint development committee (the
“Joint Development Committee” or “JDC”) comprised of [ * ] Merck representatives of
Merck and [ * ] representatives of Dynavax. The Parties shall identify their
representative to the JDC within [ * ] after the Effective Date. Each Party may change
its representatives to the JDC from time to time in its sole discretion, effective upon
written notice to the other Party of such change. These representatives shall have
appropriate technical credentials, experience and knowledge, and ongoing familiarity
with the Development Program. Additional representatives or consultants may from time
to time, by mutual consent of the Parties, be invited to attend JDC meetings, subject
to such representative’s or consultant’s written agreement to comply with the
requirements of Section 4.1. The JDC shall be chaired by a representative of Merck.
Decisions of the JDC shall be made unanimously by the representatives. In the event
that the JDC cannot or does not, after good faith efforts, reach agreement on an issue,
the resolution and/or course of conduct shall be determined by [ * ]; provided,
however, if such dispute relates to [ * ], the JDC (or either Party’s members
thereof) may refer such dispute to a discussion (to be held within [ * ], or such other
period as mutually agreed) by a vice president responsible for clinical research for
Merck and the Chief Executive Officer of

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	 	 	Dynavax, or their designees (the “Executive Officers”); provided
further if the Executive Officers are unable to resolve the dispute after
good faith discussion, the resolution and/or course of conduct shall be determined
by [ * ]. Each Party shall bear its own expenses related to the attendance of such
meetings by its representatives.
	 
	 	2.4.2	 	Meetings. The JDC shall meet in accordance with a schedule
established by mutual written agreement of the Parties, but no less frequently than
once per Calendar Quarter, alternating between Dynavax and Merck facilities (or such
other location may be determined by the JDC). Alternatively, the JDC may meet by means
of teleconference, videoconference or other similar communications equipment.
	 
	 	2.4.3	 	Minutes. The JDC shall assign a member to have the responsibility for
preparing definitive minutes of each JDC meeting, a draft of which shall be circulated
for comment to all members of the JDC within [ * ] after the relevant JDC meeting.
Such minutes shall provide a description, in reasonable detail, of the discussions held
at the meeting, a list of any actions or determination approved by the JDC and any
disagreements or other matters not resolved by the JDC at such meeting. The members
shall provide comments within [ * ] of receipt of the draft minutes. The Project
Leaders for the Parties shall discuss any comments on such minutes and finalize the
minutes by no later than [ * ] after the relevant meeting.
	 
	 	2.4.4	 	Scope of JDC responsibilities. The JDC shall have the following
responsibilities: [ * ].
	 
	 	 	 	Notwithstanding anything to the contrary in this Article 2, [ * ]; provided,
however, thereafter upon reasonable notice Merck may call a meeting of the
JDC from time-to-time to discuss and exchange information regarding the Products and
any other scientific and development information relating to the work performed
during the Development Program and to address additional development support to be
provided by Dynavax in accordance with the following paragraph.
	 
	 	 	 	In addition, upon Merck’s request, on terms and conditions to be mutually agreed in
good faith between the Parties, Dynavax shall provide reasonable assistance and
support to Merck after the Development Program has terminated, as needed [ * ].
Failure to agree on terms negotiated in good faith shall not be deemed a breach of
this Agreement by either Party.
	 
	 	2.4.5	 	Joint Development Team. 

	 	(a)	 	The JDC shall establish a working group (the “Joint Development
Team” or the “JDT”) whose first priority after the Effective Date shall be [ *
]. Subject to approval and oversight of the JDC, the JDT shall have the
day-to-day responsibility to implement the Development Program in accordance
with the Development Plan and to propose amendments to the Development Plan for
consideration by the JDC. The JDT shall also be responsible for forecasting
requirements for clinical supplies of Licensed Vaccine and Product. The
composition of the JDT shall include [ * ], and the composition may change from
time to time as determined by the JDC as appropriate to the stage of
development and the functional capabilities of the Parties. The JDT shall
operate consistent

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	 	 	with Merck’s procedures as they would apply to an internal Merck program at
an equivalent stage of development having a similar commercial value.
	 
	 	(b)	 	The Project Leaders shall be responsible for scheduling JDT
meetings, preparing agendas and sending out notices of JDT meetings and agendas
therefor. The JDT meetings may be held telephonically, by video-conference or
in person at the appropriate Merck facility or such other location established
by the JDT or agreed to by the Parties.
	 
	 	(c)	 	All strategic and operational activities of the JDT, including
without limitation, approval of, and modification to, the Development Plan and
Development Budget, shall be subject to the oversight and approval of the JDC
in accordance with Section 2.4.3.

	 	2.4.6	 	Project Leaders. Merck and Dynavax each shall appoint a person (a
“Project Leader”) to coordinate its part of the Development Program and the activities
of the JDT. The Project Leaders shall be the primary contact between the Parties with
respect to the Development Program. Each Party shall notify the other within [ * ] of
the Effective Date of the appointment of its Project Leader and shall notify the other
Party as soon as practicable upon changing this appointment.

	2.5	 	Exchange of Information. Upon execution of this Agreement, and on a regular basis during the
term of the Agreement, Dynavax shall disclose to Merck in English and in writing or in an
electronic format all Dynavax Know-How not previously disclosed. Without limiting the
foregoing, as requested by Merck after the Effective Date, Dynavax shall provide to Merck all
preclinical data, clinical samples, data with respect to drug development activities,
including without limitation analytical test method development and stability testing,
toxicology, formulation, quality assurance/quality control development, manufacturing, and
chemistry, or clinical data relating to Dynavax’s development activities for Licensed Vaccines
and/or Product in Dynavax’s possession or control that are necessary or useful for Licensed
Vaccine and/or Product regulatory filings worldwide. Merck shall promptly disclose to Dynavax
during the term of the Development Program all Merck Know-How.
	 
	2.6	 	Records and Reports.

	 	2.6.1	 	Records. Dynavax shall maintain records, in sufficient detail and in
good scientific manner appropriate for patent and regulatory purposes, which shall
fully and properly reflect all work done and results achieved in the performance of the
Development Program by Dynavax.

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	2.6.2	 	Copies and Inspection of Records. Merck shall have the right, during
normal business hours and upon reasonable notice, to inspect all such records of
Dynavax referred to in Section 2.6.1. Merck shall maintain such records and the
information disclosed therein in confidence in accordance with Section 4.1. Merck
shall have the right to arrange for its employees and/or consultants involved in the
activities contemplated hereunder to visit the offices and laboratories of Dynavax, its
Affiliates and any of its Third Party contractors as permitted under Section 2.2 during
normal business hours and upon reasonable notice, and to discuss the Development
Program work and its results in detail with the technical personnel and consultants of
Dynavax. Upon request, Dynavax shall provide copies of the records described in
Section 2.6.1.
	 
	 	2.6.3	 	Quarterly Reports. Within [ * ] following the end of each Calendar
Quarter during the Development Program and more frequently as specified in the
Development Plan, Dynavax shall provide to Merck a written progress report in English
which shall describe the work performed to date on the Development Program, evaluate
the work performed in relation to the goals of the Development Program and provide such
other information required by the Development Program or reasonably requested by Merck
relating to the progress of the goals or performance of the Development Program.

	2.7	 	Research Information and Inventions. The entire right, title and interest in:

	 	2.7.1	 	Dynavax Information and Inventions shall be owned solely by Dynavax;
	 
	 	2.7.2	 	Merck Information and Inventions shall be owned solely by Merck; and
	 
	 	2.7.3	 	Joint Information and Inventions shall be owned jointly by Dynavax and Merck.
Subject to the licenses granted under this Agreement to Merck, Merck and Dynavax will
each have an equal undivided share in the Joint Information and Inventions, without
obligation to account to the other for exploitation thereof, or to seek consent of the
other Party for the grant of any license thereunder.

	 	 	Dynavax shall promptly disclose to Merck in writing the development, making, conception or
reduction to practice of Dynavax Information and Inventions. Each Party shall promptly
disclose to the other Party in writing the development, making, conception or reduction to
practice of Joint Information and Inventions.
	 
	2.8	 	Materials. In order to facilitate the Development Program, each Party shall provide the
other Party with sufficient quantities of material as set forth in Development Plan and other
materials as each such Party may provide from time to time under this Agreement (the
“Materials”). Each Party shall use the Materials supplied by the other Party under the
Development Program solely for the purposes of carrying out its respective activities under
the Development Program in accordance with the terms of this Agreement and, consistent with
the licenses granted to either Party under this Agreement. Neither Party shall transfer,
deliver or disclose any such Materials of the other Party, or any derivatives, analogs,
modifications or components thereof, to any Third Party without the prior written approval of
the providing Party, except that Merck may transfer Materials provided by Dynavax (and/or any
derivatives, analogs, modifications or components thereof) without Dynavax’s prior written
consent to Related Parties, agents and subcontractors, and to Regulatory Authorities for the
purpose of carrying out the development and

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	 	commercialization of Licensed Vaccine and Product. The Materials supplied by Merck are not
to be used in humans, except as contemplated by this Agreement and permitted by applicable
law and shall not be transferred, delivered or disclosed to any Third Party by Dynavax
without the prior written approval of Merck. Any unused Materials supplied by a Party
hereunder and any derivatives, analogs, modifications or components thereof shall be, at the
receiving Party’s option, either returned to or destroyed in accordance with instructions by
the Party providing the Materials.
	 
	2.9	 	Use of Human Materials. If any human cell lines, tissue, human clinical isolates or similar
human-derived materials (“Human Materials") have been or are to be collected and/or used in
the Development Program by a Party, such Party represents and warrants (i) that it has
complied, or shall comply, with all applicable laws, guidelines and regulations relating to
the collection and/or use of the Human Materials and (ii) that it has obtained, or shall
obtain, all necessary approvals and appropriate informed consents, in writing, for the
collection and/or use of such Human Materials. The Party using the Human Materials shall
provide documentation of such approvals and consents upon the other Party’s request. Each
Party further represents and warrants that to its knowledge such Human Materials may be used
as contemplated in this Agreement without any obligations to the individuals or entities
(“Providers") who contributed the Human Materials, including, without limitation, any
obligations of compensation to such Providers or any other Third Party for the intellectual
property associated with, or commercial use of, the Human Materials for any purposes.

ARTICLE 3 LICENSE; EXCHANGE OF INFORMATION; DEVELOPMENT AND COMMERCIALIZATION; CERTAIN SUBLICENSE
OBLIGATIONS.

	3.1	 	License Grants.

	 	3.1.1	 	Grants to Merck.

	 	(a)	 	Subject to the terms and conditions of this Agreement, Dynavax
hereby grants to Merck an exclusive (even as to Dynavax) license in the
Territory under Dynavax Patent Rights and Dynavax Know-How with a right to
sublicense, to use, offer to sell, sell or import the Licensed Vaccine and/or
the Product(s) for any and all uses in the Field.
	 
	 	(b)	 	Subject to the terms and conditions of this Agreement, Dynavax
hereby grants to Merck an exclusive (even as to Dynavax) license under Dynavax
Patent Rights and Dynavax Know-How with a right to sublicense, to make and have
made the Licensed Vaccine and/or the Product(s) in the Territory other than the
United States, for any and all uses in the Territory in the Field within the
license scope specified under 3.1.1(a).
	 
	 	(c)	 	Subject to the terms and conditions of this Agreement, Dynavax
hereby grants to Merck a non-exclusive license under Dynavax Patent Rights and
Dynavax Know-How with a right to sublicense, to make and have made the Licensed
Vaccine and/or the Product(s) in the United States, for any and all uses in the
Territory in the Field within the license scope specified under 3.1.1(a).

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	3.1.2	 	Grants to Dynavax. Subject to the terms and conditions of this
Agreement, Merck hereby grants to Dynavax a non-exclusive, non-sub-licensable (except
to the extent Dynavax is permitted to use its Affiliate(s) or Third Parties in
performing its obligations under the Development Program in accordance with Section
2.2) license under Merck Know-How to the extent necessary for Dynavax to perform its
obligations under the Development Program in accordance with Article 2 and its
regulatory obligations in accordance with Article 9.
	 
	 	3.1.3	 	Dynavax Retained Rights. Within the scope of the licenses granted to
Merck under Section 3.1.1, Dynavax shall retain rights under the Dynavax Patent Rights
and Dynavax Know-How solely as necessary for Dynavax to perform its obligations under
this Agreement and the Supply Agreement, including its obligation under the Development
Program in accordance with Article 2; and its obligations to manufacture and supply
Clinical Product and commercial supply to Merck and its Related Parties in accordance
with Article 8 and the Manufacturing Agreement. Dynavax further agrees that it shall
not use or permit its Affiliates or Third Parties to use (directly or indirectly
whether through a license or otherwise) Dynavax Patent Rights or Dynavax Know-How to
develop, use, make, have made, offer to sell, sell or import Licensed Vaccines or
Products in the Field within the Territory other than to perform its obligations under
this Agreement and the Manufacturing Agreement.

	3.2	 	Non-Exclusive License Grant. In the event that the making, having made, use, offer for sale,
sale or import by Merck, or its Related Parties, of Licensed Vaccine or Products would
infringe during the term of this Agreement a claim of issued letters patent which Dynavax owns
(or, as of the Effective Date has the rights to license) and which patents are not covered by
the grant in Section 3.1.1, Dynavax hereby grants to Merck, to the extent Dynavax is legally
able to do so and subject to Section 3.5.1, a non-exclusive, sublicensable, royalty-free
license in the Territory under such issued letters patent for Merck and its Related Parties to
develop, make, have made, use, sell, offer for sale or import Licensed Vaccine(s) and
Product(s) in the Territory.
	 
	3.3	 	No Implied Licenses. Except as set forth in Sections 3.1 and 3.2, neither Party shall
acquire any license or other intellectual property interest, by implication or otherwise, in
any Information disclosed to it under this Agreement or under any patents or patent
applications owned or controlled by the other Party or its Affiliates. In furtherance of the
foregoing except as expressly provided under this Agreement and the Manufacturing Agreement,
Dynavax acknowledges and agrees that Merck is not granting to Dynavax any rights under Merck
Know-How to make, have made, use, offer to sell, sell or import the Licensed Vaccine, or any
component thereof, including without limitation, the Hep B Surface Antigen, on behalf of
Dynavax itself, its Affiliates or any Third Party other than to perform Dynavax’s obligations
under this Agreement and the Manufacturing Agreement on behalf of Merck.
	 
	3.4	 	Diligence and Progress Reports.

	 	3.4.1	 	Development and Commercialization. Merck shall use commercially
reasonable efforts, consistent with the usual practice followed by Merck in pursuing
the commercialization and marketing of its other vaccine products of a similar
commercial value, at its own expense, to develop and commercialize a Product in such
countries in the Territory where in Merck’s reasonable opinion it is commercially
viable to do so.

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	3.4.2	 	Development Progress Reports. During the Development Program, Dynavax
will be informed as to the development status of the Licensed Vaccine and the Product
through its participation in the JDC and the fulfillment of its obligations under the
Development Plan. [ * ].
	 
	 	3.4.3	 	Commercialization Reports. In addition, commencing [ * ] for Product
in the Territory. Such meetings shall be held in person or by videoconference or other
means mutually agreed upon and at a time consistent with the business and profit
planning cycles of Merck for Product.
	 
	 	3.4.4	 	Ceased Development Notice. Merck shall promptly notify Dynavax (such
notice being a “Ceased Development Notice") within [ * ] in the event that [ * ].
Following receipt of a Ceased Development Notice, Dynavax shall have a right to
terminate this Agreement in accordance with Section 10.2.2.
	 
	 	3.4.5	 	Confidentiality. For the purposes of clarity, all Information
provided by Merck or its Affiliates under this Section 3.4 shall remain subject to the
confidentiality and non-use obligations of Dynavax in accordance with Article 4 and,
without limiting the foregoing, Dynavax shall not use any such Information for purposes
that might reasonably be expected to compete with Licensed Vaccine and Product.
	 
	 	3.4.6	 	Excused Performance. Subject to Merck’s obligation under Section
3.4.4 and Dynavax’s resulting rights under Section 10.2.2, the obligation of Merck with
respect to Product under Section 3.4.1 are expressly conditioned upon the continuing
absence of any significant adverse condition or event relating to the safety or
efficacy of the Product, [ * ], and the obligation of Merck to develop or market
any such Product shall be delayed or suspended so long as in Merck’s opinion any such
condition or event exists and Merck is diligently seeking to resolve such condition or
event.

	3.5	 	Third Party Technology.

	 	3.5.1	 	[ * ]
	 
	 	3.5.2	 	Other Third Party Technology. Dynavax shall be responsible for all
consideration payable under any agreement between Dynavax and a Third Party under which
Dynavax has been granted a license or otherwise obtains rights in such Third Party’s
intellectual property (other than as expressly provided in Section Error! Reference
source not found. with respect to the [ * ] as follows:

	 	(a)	 	After the Effective Date, Dynavax shall provide Merck with
prior notice if Dynavax intends to negotiate an agreement with any Third Party
under which Dynavax will be granted a license to, or will otherwise obtain
rights in, a Third Party’s intellectual property (whether or not patented or
patentable) that with respect to the Licensed Vaccine and/or Product would be
sublicensed, in whole or in part, to Merck under the licenses granted by
Dynavax to Merck under Section 3.1.1 (each a “Potential Future Sublicensed
Technology”), and Dynavax shall keep Merck advised of the status of such
negotiations;

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	(b)	 	If Merck desires to obtain rights to such Potential Sublicensed
Technology under a sublicense from Dynavax pursuant to Section 3.1.1: (i) Merck
shall promptly so notify Dynavax and thereafter the Parties shall discuss, in
good faith, on the terms and conditions under which such Potential Future
Sublicensed Technology shall be obtained with respect to the Licensed Vaccine
and/or Product and Dynavax shall use commercially reasonable efforts to secure
a license that is sublicensable to Merck on the same terms and conditions
applicable to Dynavax thereunder, (ii) if Dynavax is successful in obtaining
such Potential Future Sublicensed Technology, the Parties shall in good faith
negotiate [ * ], and (iii) such Potential Future Sublicensed Technology shall
be within the scope of the rights licensed by Dynavax to Merck under Section
3.1.1; and
	 
	 	(c)	 	If Merck does not desire to obtain sublicensed rights to such
Potential Sublicensed Technology under Section 3.1.1 Merck shall so notify
Dynavax, and if Dynavax is successful in obtaining such Potential Future
Sublicensed Technology, such Potential Future Sublicensed Technology shall be
excluded from the rights licensed by Dynavax to Merck under Section 3.1.1 and
Merck shall have no responsibility to reimburse Dynavax for any cost related
thereto.

ARTICLE 4 CONFIDENTIALITY AND PUBLICATION.

	4.1	 	Nondisclosure Obligation. All Information disclosed by one Party and/or its Affiliate(s)
(the “Disclosing Party") to the other Party and/or it Affiliate(s) (the “Receiving Party")
under this Agreement shall be maintained in confidence by the Receiving Party and shall not be
disclosed to any Third Party or used for any purpose except as set forth herein without the
prior written consent of the Disclosing Party, except to the extent that such Information:

	 	4.1.1	 	is known by the Receiving Party at the time of its receipt, and not through a
prior disclosure by the Disclosing Party, as documented by the Receiving Party’s
business records;
	 
	 	4.1.2	 	is in the public domain by use and/or publication before its receipt from the
Disclosing Party, or thereafter enters the public domain through no fault of the
Receiving Party;
	 
	 	4.1.3	 	is subsequently disclosed to the Receiving Party by a Third Party who may
lawfully do so and is not under an obligation of confidentiality to the Disclosing
Party;
	 
	 	4.1.4	 	is developed by the Receiving Party independently of Information received from
the Disclosing Party, as documented by the Receiving Party’s business records;
	 
	 	4.1.5	 	is disclosed to governmental or other regulatory agencies in order to obtain
and/or maintain patents or to gain or maintain approval to conduct clinical trials or
to market Product, but such disclosure may be only to the extent reasonably necessary
to obtain and/or maintain patents or authorizations;
	 
	 	4.1.6	 	is deemed reasonably necessary by Merck to be disclosed to Related Parties,
agent(s), consultant(s), and/or other Third Parties for the research and development,
manufacturing and/or marketing of the Product (or for such entities to determine their
interest in

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	 	 	performing such activities) in accordance with this Agreement on the condition that
such Related Parties and Third Parties agree to be bound by confidentiality and
non-use obligations that substantially are no less stringent than those
confidentiality and non-use provisions contained in this Agreement; or
	 
	 	4.1.7	 	is deemed necessary by counsel to the Receiving Party to be disclosed to such
Party’s attorneys, independent accountants or financial advisors for the sole purpose
of enabling such attorneys, independent accountants or financial advisors to provide
advice to the Receiving Party, on the condition that such attorneys, independent
accountants and financial advisors agree to be bound by the confidentiality and non-use
obligations contained in this Agreement; provided, however, that the
term of confidentiality for such attorneys, independent accountants and financial
advisors shall be no less than [ * ].

	 	 	Any combination of features or disclosures shall not be deemed to fall within the foregoing
exclusions merely because individual features are published or available to the general
public or in the rightful possession of the Receiving Party unless the combination itself
and principle of operation are published or available to the general public or in the
rightful possession of the Receiving Party.
	 
	 	 	If a Receiving Party is required by judicial or administrative process to disclose
Information that is subject to the non-disclosure provisions of this Section 4.1 or Section
4.2, such Party shall promptly inform the other Party of the disclosure that is being sought
in order to provide the other Party an opportunity to challenge or limit the disclosure
obligations. Information that is disclosed by judicial or administrative process shall
remain otherwise subject to the confidentiality and non-use provisions of this Section 4.1
and Section 4.2, and the Party disclosing Information pursuant to law or court order shall
take all steps reasonably necessary, including without limitation obtaining an order of
confidentiality, to ensure the continued confidential treatment of such Information.
	 
	4.2	 	Dynavax Know-How. Dynavax agrees to (a) keep, and to cause its Affiliates to keep, all
Dynavax Know-How relating to Licensed Vaccine and/or Product confidential so long as such
information remains subject to Section 4.1 as applied to Merck as the receiving party thereof;
and (b) to not use, or permit a Third Party to use Dynavax Know-How with respect to Licensed
Vaccine and/or Product in the Field in the Territory, except to fulfill its obligations under
this Agreement.
	 
	4.3	 	Publication. Merck and Dynavax each acknowledge the other Party’s interest in publishing the
results of its research in order to obtain recognition within the scientific community and to
advance the state of scientific knowledge. Each Party also recognizes the mutual interest in
obtaining valid patent protection and in protecting business interests and trade secret
information. Consequently, except for disclosures permitted pursuant to Section 4.1, either
Party, it Affiliates, Related Parties, its employees or consultants wishing to make a
publication shall deliver to the other Party a copy of the proposed written publication or an
outline of an oral disclosure at least (a) in the case of an abstract, [ * ] prior to
submission for publication or presentation; or (b) in the case of all other publications, [ *
] prior to submission for publication or presentation. The reviewing Party shall have the
right (a) to propose modifications to the publication or presentation for patent reasons,
trade secret reasons or business reasons or (b) to request a reasonable delay in publication
or presentation in order to protect patentable information. If the reviewing Party

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	 	requests a delay, the publishing Party shall delay submission or presentation for a period
of [ * ], extendable by written letter agreement, to enable patent applications protecting
each Party’s rights in such information to be filed in accordance with Article 7. Upon
expiration of such [ * ] and absent a written letter agreement to extend such [ * ] period,
the publishing Party shall be free to proceed with the publication or presentation. If the
reviewing Party requests modifications to the publication or presentation, the publishing
Party shall edit such publication to prevent disclosure of trade secret or proprietary
business information prior to submission of the publication or presentation.
	 
	4.4	 	Publicity/Use of Names. No disclosure of the existence or the terms of this Agreement may be
made by either Party (or its respective Affiliates), and no Party (or its respective
Affiliates) shall use the name, trademark, trade name or logo of the other Party, its
Affiliates or their respective employees in any publicity, promotion, news release or
disclosure relating to this Agreement or its subject matter, without the prior express written
permission of the other Party, except as may be required by law; provided,
however, if Merck desires to use any trademark identified by Dynavax as of the
Effective Date for use for the Licensed Vaccine and/or Product in the Territory (excluding the
trademark DynavaxTM, but including without limitation the trademark HeplisavTM), in connection
with the marketing, promotion and/or sale of Product, Dynavax shall grant Merck a
non-exclusive, royalty-free, perpetual license to such trademark(s), with a right of
sublicense, solely for the marketing, promotion and sale of Products in the Field in the
Territory in accordance with this Agreement.
	 
	 	 	The Parties acknowledge and agree that, upon and/or following the Effective Date, the
Parties shall issue a joint press release announcing the execution of this Agreement. The
Parties agree to consult with each other reasonably and in good faith with respect to the
text and timing of such press release prior to the issuance thereof; provided,
however, that neither Party shall issue any such press release without the other
Party’s consent, which may not be unreasonably withheld. Either Party may issue such press
releases or otherwise make such public statements or disclosures (such as in annual reports
to stockholders or filings with the Securities and Exchange Commission) as it determines in
good faith based on advice of counsel, are reasonably necessary to comply with applicable
public disclosure laws and regulations; provided, however, to the extent
practicable (i) a Party shall not issue any such press releases or make such statements or
disclosures without the other Party’s prior review and comment and (ii) each Party shall
provide the other Party with no less than [ * ] prior review for each such press release
unless an otherwise shorter period of time is required under applicable public disclosure
laws and regulations. In addition, following any initial press release(s) announcing this
Agreement or other public disclosure approved by both Parties, either Party shall be free to
disclose, without the other Party’s prior written consent, the existence of this Agreement,
the identity of the other Party and those terms of the Agreement which have already been
publicly disclosed in accordance herewith. [ * ].

ARTICLE 5 PAYMENTS; ROYALTIES AND REPORTS

	5.1	 	Up Front License Fee. Subject to the terms and conditions of this Agreement, in
consideration for the licenses granted to Merck in Section 3.1.1 and Section 3.2, and the
other rights granted to Merck under this Agreement, Merck shall pay to Dynavax a
non-refundable, non-creditable license fee of [ * ] within [ * ] after the Effective Date.

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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5.2 Development Funding.

	 	5.2.1	 	Development Program Funding. Subject to the terms and conditions of
this Agreement, Merck shall reimburse Dynavax for Dynavax’s work on the Development
Program under the Development Plan in accordance with Section 2.3 pursuant to the
Development Budget.
	 
	 	5.2.2	 	Additional Development Program Funding. Subject to the terms and
conditions of this Agreement, Merck will pay Dynavax the non-refundable, non-creditable
amount of [ * ] within [ * ] after the Effective Date for development work conducted by
Dynavax prior to the Effective Date; provided that Merck shall remain
responsible for reimbursing Dynavax for work performed by Dynavax during the Not
Incurred Expense Period in accordance with Section 2.3.1 and Section 2.3.3.

	5.3	 	Milestone Payments.

	 	5.3.1	 	Development Milestones. Subject to the terms and conditions of this
Agreement, Merck shall pay to Dynavax the following non-refundable, non-creditable
development milestone amounts upon [ * ]:

	 	(a)	 	[ * ];
	 
	 	(b)	 	[ * ]; and
	 
	 	(c)	 	[ * ].

	 	5.3.2	 	Sales Milestone. Merck shall pay to Dynavax the following
non-refundable, non-creditable sales milestone amounts upon [ * ]:

	 	(a)	 	[ * ];
	 
	 	(b)	 	[ * ];
	 
	 	(c)	 	[ * ]; and
	 
	 	(d)	 	[ * ].

	 	5.3.3	 	Merck shall notify Dynavax in writing and pay the applicable amount within [ *
] following the achievement of each milestone under Section 5.3.1. Each milestone
payment shall be payable only upon the initial achievement of the respective milestone
event and no amounts shall be due hereunder for subsequent or repeated achievement of
such milestone event.

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	5.4	 	Royalties.

	 	5.4.1	 	Royalties Payable By Merck.

	 	(a)	 	Royalty Rate. Subject to the terms and conditions of
this Agreement, including without limitation the remaining provision of this
Section 5.4, Merck shall pay Dynavax royalties in an amount equal to the
following percentage of Net Sales of Products by Merck or its Related Parties:

	 	(i)	 	[ * ];
	 
	 	(ii)	 	[ * ]; and
	 
	 	(iii)	 	[ * ].

	 	(b)	 	Royalty Term. Merck obligation to pay royalties on Net
Sales of Product at the rates set forth above shall continue [ * ].
	 
	 	(c)	 	Additional Conditions. All royalties are subject to
the following conditions:

	 	(i)	 	that only one royalty shall be due with respect
to the same unit of Product;
	 
	 	(ii)	 	that no royalties shall be due upon the sale or
other transfer among Merck or its Related Parties, but in such cases
the royalty shall be due and calculated upon Merck’s or its Related
Party’s Net Sales to the first independent Third Party;
	 
	 	(iii)	 	no royalties shall accrue on the sale or other
disposition of Product by Merck or its Related Parties for use in a
Clinical Trial; and
	 
	 	(iv)	 	no royalties shall accrue on the disposition of
Product in reasonable quantities by Merck or its Related Parties as
samples (promotion or otherwise) or as donations (for example, to
non-profit institutions or government agencies for a non-commercial
purpose).

	 	5.4.2	 	Change in Sales Practices. The Parties acknowledge that during the
term of this Agreement, Merck’s sales practices for the marketing and distribution of
Product may change to the extent to which the calculation of the payment for royalties
on Net Sales may become impractical or even impossible. In such event the Parties
agree to meet and discuss in good faith new ways of compensating Dynavax to effect the
same economic outcome contemplated under Section 5.4.1.
	 
	 	5.4.3	 	Royalties for Bulk Licensed Vaccine. In those cases in which Merck
sells bulk Licensed Vaccine rather than Product in packaged form to an independent
Third Party, the royalty obligations of this Section 5.4 shall be applicable to the
bulk Licensed Vaccine; provided that and for the purposes of clarity, in no
event shall any Related Party (including with out limitation [ * ] in the event that it
obtains rights to Licensed Vaccine

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	 	 	and Product under any rights licensed to Merck by Dynavax under this Agreement under
Sections 3.1.1 or 3.2) be considered an independent Third Party under the foregoing.
	 
	 	5.4.4	 	Compulsory Licenses. If a compulsory license is granted to a Third
Party with respect to Product in any country in the Territory with a royalty rate lower
than the royalty rate provided by Section 5.4.1, then the royalty rate to be paid by
Merck on Net Sales in that country under Section 5.4.1 shall be reduced to the rate
paid by the compulsory licensee.
	 
	 	5.4.5	 	Third Party Licenses. In the event that one or more licenses from
Third Parties identified after the Effective Date are required by Merck or its Related
Parties in order to make, have made, use, offer to sell, sell or import Licensed
Vaccine or Product(s) in the Territory in the Field (hereinafter “Third Party
Licenses”), [ * ] of the royalties actually paid under such Third Party Licenses by
Merck or its Related Parties for sale of such Licensed Vaccine or Product shall be
creditable against the royalty payments due Dynavax by Merck with respect to the sale
of such Licensed Vaccine or Products; provided, however, that in no
event shall any royalties otherwise owed by Merck to Dynavax in any affected Calendar
Quarter be reduced by more than [ * ]. For clarity, royalties to Third Parties for [ *
] as well as royalties for Third Party Licenses identified or in effect as of the
Effective Date shall not be deemed Third Party Licenses hereunder.
	 
	 	5.4.6	 	Competitive Product. Notwithstanding anything else to the contrary in
this Section 5.4, in the event that sales of a Competitive Product [ * ] sold by a
party other than Merck or its Related Parties has or attains on a Calendar Year basis [
* ], then the royalty rate to be paid by Merck on Net Sales of Product in that country
under subsection 5.4.1 shall be [ * ].

	5.5	 	Reports; Payment of Royalty. During the term of this Agreement following the First
Commercial Sale of a Product, Merck shall furnish to Dynavax a quarterly written report for
the Calendar Quarter showing the Net Sales of all Products subject to royalty payments sold by
Merck and its Related Parties on a country by country basis in the Territory during the
reporting period and the royalties payable under this Agreement. Reports shall be due on the
[ * ] following the close of each Calendar Quarter. Royalties shown to have accrued by each
royalty report shall be due and payable on the date such royalty report is due. Merck shall
keep complete and accurate records in sufficient detail to enable the royalties payable
hereunder to be determined.

	5.6	 	Audits.

	 	5.6.1	 	Upon the written request of Dynavax and not more than [ * ] in each Calendar
Year, Merck shall permit an independent certified public accounting firm of nationally
recognized standing selected by Dynavax and reasonably acceptable to Merck, at
Dynavax’s expense, to have access during normal business hours to such of the records
of Merck as may be reasonably necessary to verify the accuracy of the royalty reports
hereunder for any Calendar Year ending not more than [ * ] prior to the date of such
request. The accounting firm shall disclose to Dynavax whether the royalty reports are
correct or incorrect, a reasonably specific summary of the basis for such incorrect
reporting and the amount of any discrepancy.

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	5.6.2	 	If such accounting firm identifies a discrepancy made during such period, the
appropriate Party shall pay the other Party the amount of the discrepancy within [ * ]
of the date Dynavax delivers to Merck such accounting firm’s written report with its
conclusions, or earlier as otherwise agreed upon by the Parties. The fees charged by
such accounting firm shall be paid by Dynavax; provided, however, if
such audit uncovers an underpayment of royalties by Merck that exceed [ * ], then the
fees of such accounting firm shall be paid by Merck. Nothing in the foregoing sentence
shall limit Merck’s right to refer any dispute on the interpretation of any provision
of this Agreement to dispute resolution pursuant to Section 12.6.
	 
	 	5.6.3	 	Merck shall include in each sublicense granted by it pursuant to this
Agreement a provision requiring the sublicensee to make reports to Merck, to keep and
maintain records of sales made pursuant to such sublicense and to grant access to such
records by Dynavax’s independent accountant to the same extent required of Merck under
this Agreement. Moreover, Merck shall inform Dynavax of the results of any Related
Party audits conducted by Merck that identify any underpayment or overpayments of
royalties owed to Dynavax identified in such audit.
	 
	 	5.6.4	 	Upon the expiration of [ * ] following the end of any Calendar Year, the
calculation of royalties payable with respect to such year shall be binding and
conclusive upon Dynavax, and Merck and its Related Parties shall be released from any
liability or accountability with respect to royalties for such Calendar Year.
	 
	 	5.6.5	 	Dynavax shall treat all financial information subject to review under this
Section 5.6 or under any sublicense agreement in accordance with the confidentiality
and non-use provisions of this Agreement, and shall cause its accounting firm to enter
into an acceptable confidentiality agreement with Merck and/or its Related Parties
obligating it to retain all such information in confidence pursuant to such
confidentiality agreement.

	5.7	 	Payment Exchange Rate. All payments to be made by Merck to Dynavax under this Agreement
shall be made in United States dollars and may be paid by check made to the order of Dynavax
or bank wire transfer in immediately available funds to such bank account in the United States
as listed below or as otherwise may be designated in writing by Dynavax from time to time:
	 
	 	 	          [ * ]
	 
	 	 	In the case of sales outside the United States, the rate of exchange to be used in computing
the monthly amount of currency equivalent in United States dollars due Dynavax shall be made
at the monthly rate of exchange utilized by Merck in its worldwide accounting system (which
as of the Effective Date is the applicable rate quoted by [ * ]), prevailing on the third to
the last business day of the month preceding the month in which such sales are recorded by
Merck.
	 
	5.8	 	Income Tax Withholding. If applicable laws, rules or regulations require withholding of
income or other taxes imposed upon any payments made by Merck to Dynavax under Article 5,
Merck shall make such withholding payments as may be required and shall subtract such
withholding payments from such payments. Merck shall submit appropriate proof of payment of
the withholding taxes to Dynavax within a reasonable period of time. Merck shall promptly
provide Dynavax with the official receipts. Merck shall render Dynavax reasonable assistance
in order to

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	 	allow Dynavax to
obtain the benefit of any present or future treaty against double taxation
which may apply to such payments. If Merck had a duty to withhold taxes in connection with
any payment it made to Dynavax under the Agreement but Merck failed to withhold, and such
taxes were assessed against and paid by Merck, then Dynavax will reimburse Merck for such
taxes (including any interest charged Merck on such taxes). If Merck makes a claim under
this Section, it will comply with the obligations imposed by this Section as if Merck had
withheld taxes from a payment to Dynavax.

ARTICLE 6 REPRESENTATIONS AND WARRANTIES

	6.1	 	REPRESENTATIONS AND WARRANTIES OF EACH PARTY. Each Party represents and warrants to the
other Party that as of the Effective Date:

	 	6.1.1	 	it has the full right, power and authority to enter into this Agreement and to
perform its obligations hereunder; and
	 
	 	6.1.2	 	this Agreement has been duly executed by it and is legally binding upon it,
enforceable in accordance with its terms, and does not conflict with any agreement,
instrument or understanding, oral or written, to which it is a party or by which it may
be bound, nor violate any material law or regulation of any court, governmental body or
administrative or other agency having jurisdiction over it.

	6.2	 	DYNAVAX REPRESENTATIONS AND WARRANTIES. Dynavax represents and warrants to Merck that as of
the Effective Date:

	 	6.2.1	 	to Dynavax’s knowledge, the Dynavax Patent Rights and Dynavax Know-How exist
and are not invalid or unenforceable, in whole or in part;
	 
	 	6.2.2	 	it has the full right, power and authority to perform the Development Program
and to grant the licenses granted by Dynavax under Article 3;
	 
	 	6.2.3	 	it has not previously assigned, transferred, conveyed or otherwise encumbered
its right, title and interest in Dynavax Patent Rights or Dynavax Know-How with respect
to the Licensed Vaccine or the Product in the Field in the Territory;
	 
	 	6.2.4	 	to Dynavax’s knowledge, it is the sole and exclusive owner of the Dynavax
Patent Rights set forth in Schedule 1.26 and Dynavax Know-How, all of which are
(and shall be, in the case of Dynavax Information and Invention) free and clear of any
liens, charges and encumbrances, and no other person, corporate or other private
entity, or governmental entity or subdivision thereof, has or shall have any claim of
ownership whatsoever with respect to the Dynavax Patent Rights (except as to rights
licensed to Dynavax, including its rights under the [ * ]) and Dynavax Know-How other
than as provided under this Agreement;
	 
	 	6.2.5	 	[ * ];

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	6.2.6	 	there are no claims, judgments or settlements against or owed by Dynavax and
no pending or threatened claims or litigation relating to the Dynavax Patent Rights and
Dynavax Know-How;
	 
	 	6.2.7	 	Dynavax has disclosed to Merck all reasonably relevant information known to it
regarding the Dynavax Patent Rights and Dynavax Know-How licensed under this Agreement,
including without limitation all patent opinions obtained by Dynavax related thereto;
	 
	 	6.2.8	 	Schedule 6.2.8 sets forth all IND(s) covering the Licensed Vaccine
under development by Dynavax as of the Effective Date (collectively, the “Dynavax IND”)
and all such Dynavax IND(s) are (i) owned and under the exclusive control of Dynavax,
(ii) are in good standing with the FDA and other Regulatory Authorities, and (iii) have
not been, and are not currently, subject to any clinical hold by any Regulatory
Authority;
	 
	 	6.2.9	 	Dynavax is in compliance with the Dynavax IND; and neither Dynavax, nor any
officer, employee or agent of Dynavax, made any untrue statement of a material fact to
the FDA or any regulatory Authority or knowingly failed to disclose a material fact
required to be disclosed to the FDA or any Regulatory Authority in connection with
seeking any Dynavax IND; and (iii) other than the Dynavax INDs disclosed on
Schedule 6.2.8, neither Dynavax nor any of its Affiliates have made any filing
for an IND with any Regulatory Authority with respect to any vaccine incorporating a
Hepatitis B Surface Antigen and 1018 ISS;
	 
	 	6.2.10	 	except for customary ongoing reporting and administrative requirements and except as
otherwise disclosed in publicly available FDA records and filings, there are no
outstanding material commitments or obligations of Dynavax to the FDA or any other
Regulatory Authority with respect to the Dynavax IND or any IND covering a Hepatitis B
Surface Antigen or 1018 ISS;
	 
	 	6.2.11	 	Dynavax has provided access to Merck, if any, of all serious and unexpected adverse
experience reports and periodic adverse experience reports, IND safety reports
(written, in person, telephonic, and/or facsimile transmission safety reports) with
respect to the Licensed Vaccine, the Hepatitis B Surface Antigen and/or 1018 ISS that
have been filed by Dynavax with the FDA or any other Regulatory Authority, including
any correspondence relating thereto;
	 
	 	6.2.12	 	to Dynavax’s knowledge, there is no action or proceeding by the FDA or any other
Regulatory Authority pending or threatened seeking the revocation or suspension of any
Dynavax IND or any other IND relating to the Hepatitis B Surface Antigen and/or 1018
ISS, in the Territory, which shall include without limitation any clinical hold or
similar orders;
	 
	 	6.2.13	 	Dynavax has made available to Merck all material written communications, written
records of any telephone IND safety reports and contact information between Dynavax and
FDA or any Regulatory Authority with regard to the Licensed Vaccine, the Hepatitis B
Surface Antigen and/or 1018 ISS;

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	6.2.14	 	Dynavax has disclosed to Merck all scientific, technical and other information in the
possession of Dynavax or its Affiliates that is material to the safety and efficacy of
the Licensed Vaccine, Product, the Hepatitis B Surface Antigen and/or 1018 ISS, which
includes, without limitation, any information generated from any Dynavax INDs;
	 
	 	6.2.15	 	Neither Dynavax nor any of its Affiliates is currently subject to an FDA consent
decree or any other similar action of a Regulatory Authority;
	 
	 	6.2.16	 	Schedule 6.2.16 contains a true, correct and complete copy of the [ * ] and
such copy includes any and all amendments, restatements, side letters, or other
modifications thereto, in effect as of the Effective Date, and that such copies have
been redacted of only financial terms and other provisions that taken collectively do
not, and will not, materially effect any rights under the [ * ] that have been
sublicensed to Merck under this Agreement; and
	 
	 	6.2.17	 	(i) Dynavax is not in breach, material or otherwise, of the [ * ] and has not
received any notice or claim by [ * ] alleging any breach by Dynavax thereunder, and
(ii) under the [ * ] Dynavax has the right to sublicense all patent rights granted
to Dynavax as identified under the [ * ] as Dynavax Patent Rights, to Merck consistent
with the licenses granted to Merck within the Hep B Field by Dynavax under Sections
3.1.1 and 3.2.

	6.3	 	Disclaimer of Warranties. The warranties expressly provided in this Agreement are the sole
warranties given by the Parties hereunder, and are made expressly in lieu of, and exclude, any
implied warranties of merchantability, fitness for a particular purpose, non-infringement or
otherwise, and all other express or implied representations and warranties provided by common
law, statute or otherwise are hereby disclaimed by both Parties.

	6.4	 	Limitation on Damages to Other Party. In no event will either Party be liable for any
punitive, special, indirect, consequential, incidental or exemplary damages or similar damages
or losses to the other Party arising out of this agreement or the exercise of its rights
hereunder, including but not limited to lost profits, regardless of whether arising from
breach of contract, warranty, tort, strict liability or otherwise, even if the Party is
advised of the possibility of such loss or damage or if such loss or damage could have been
reasonably foreseen; provided, however, the foregoing limitation of liability
shall not apply to the liabilities arising from a Party’s gross negligence or willful
misconduct and this Section 6.4 shall not be construed to limit either Party’s indemnification
obligations under Sections 11.1 or 11.2 or a Party’s right to obtain such damages for a breach
of Article 4.

ARTICLE 7 PATENT PROVISIONS.

	7.1	 	Filing, Prosecution and Maintenance of Patents. Dynavax agrees to file, prosecute and
maintain in the Territory, in consultation with Merck, the Dynavax Patent Rights licensed to
Merck under this Agreement; provided, however, that with respect to Joint
Information and Inventions, the Parties agree to select outside counsel acceptable to both
Parties to file, prosecute and maintain in the Territory, upon appropriate consultation with
the Parties, patent applications and patents with respect to Joint Information and Inventions
and such outside counsel will be instructed to keep both Parties informed of all matters, give
both Parties appropriate time to review all filings and consider in good faith the comments of
both Parties on all filings. The

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	 	costs, fees and expenses related to patent applications and patents for Joint
Information and Inventions shall be shared equally by Dynavax and Merck. If
either party elects not to file a patent application on Joint Information and
Inventions, it shall notify the other Party and the other Party shall have
the right to file such patent applications. In such event, the non-filing
Party shall execute such documents and perform such acts at the non-filing
Party’s expense as may be reasonably necessary to effect an assignment of
such Joint Information and Inventions to the other Party in a timely manner
to allow the other Party to assume such prosecution or maintenance. With
respect to Dynavax Information and Inventions and Dynavax Patent Rights,
Dynavax may elect not to file and if so, Dynavax shall notify Merck and Merck
shall have the right to file such patent applications. In such event, Dynavax
shall execute such documents and perform such acts at Dynavax’s expense as
may be reasonably necessary to effect an assignment of such Dynavax Patent
Rights to Merck in a timely manner to allow Merck to continue such
prosecution or maintenance. In each case, the filing Party shall give the
non-filing Party an opportunity to review the text of the application before
filing, shall consult with the non-filing Party with respect thereto, and
shall supply the non-filing Party with a copy of the application as filed,
together with notice of its filing date and serial number. Each Party shall
keep the other Party advised of the status of the actual and prospective
patent filings and upon request, shall provide advance copies of any papers
related to the filing, prosecution and maintenance of such patent filings.
Dynavax shall promptly give notice to Merck of the grant, lapse, revocation,
surrender, invalidation or abandonment of any Dynavax Patent Rights licensed
to Merck for which Dynavax is responsible for the filing, prosecution and
maintenance. With respect to all filings hereunder, the filing Party shall
be responsible for payment of all costs and expenses related to such filings.
Any patents or patent applications assigned hereunder shall not be
considered patent rights of the Party executing such assignment.
	 
	7.2	 	Interference, Opposition, Reexamination and Reissue.

	 	7.2.1	 	Dynavax shall, within [ * ] of notice of an interference, opposition,
reexamination or reissue with respect to Dynavax Patent Rights, inform Merck of such
event. If any claim of the patent involved covers Merck’s activities in the Field,
Merck and Dynavax shall thereafter consult and cooperate fully to determine a course of
action with respect to any such proceeding. Merck shall have the right to review and
consult with respect to any submission to be made in connection with such proceeding.
	 
	 	7.2.2	 	Dynavax shall not initiate any reexamination, interference or reissue
proceeding relating to Dynavax Patent Rights within the Field without the prior written
consent of Merck, which consent shall not be unreasonably withheld.
	 
	 	7.2.3	 	In connection with any interference, opposition, reissue, or reexamination
proceeding relating to Dynavax Patent Rights within the Field, Merck and Dynavax will
cooperate fully and will provide each other with any information or assistance that
either may reasonably request. Dynavax shall keep Merck informed of developments in any
such action or proceeding, including, to the extent permissible by law and
attorney-client privilege, consultation with respect to any settlement, the status of
any settlement negotiations and the terms of any offer related thereto.
	 
	 	7.2.4	 	Dynavax shall bear the expense of any interference, opposition, reexamination,
or reissue proceeding relating to Dynavax Patent Rights.

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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7.3 Enforcement and Defense.

	 	7.3.1	 	Dynavax shall give Merck notice of either (i) any infringement of Dynavax
Patent Rights within the Field, or (ii) any misappropriation or misuse within the Field
of Dynavax Know-How, that may come to Dynavax’s attention. Merck and Dynavax shall
thereafter consult and cooperate fully to determine a course of action, including but
not limited to the commencement of legal action by either or both Merck and Dynavax, to
terminate any infringement of Dynavax Patent Rights or any misappropriation or misuse
of Dynavax Know-How. However, Dynavax, upon notice to Merck, shall have the first
right to initiate and prosecute such legal action at its own expense and in the name of
Dynavax and Merck, or to control the defense of any declaratory judgment action
relating to Dynavax Patent Rights or Dynavax Know-How. Dynavax shall promptly inform
Merck if it elects not to exercise such first right and Merck shall thereafter have the
right to either initiate and prosecute such action or to control the defense of such
declaratory judgment action in the name of Merck and, if necessary, Dynavax. Each
Party shall have the right to be represented by counsel of its own choice at such
Party’s sole expense.
	 
	 	7.3.2	 	In the event that Dynavax elects not to initiate and prosecute an action as
provided in Section 7.3.1, and Merck elects to do so, the costs of any agreed-upon
course of action to terminate infringement of Dynavax Patent Rights or misappropriation
or misuse of Dynavax Know-How, including without limitation the costs of any legal
action commenced or the defense of any declaratory judgment, shall be borne by Merck.
	 
	 	7.3.3	 	For any action to terminate any infringement of Dynavax Patent Rights or any
misappropriation or misuse of Dynavax Know-How, in the event that Merck is unable to
initiate or prosecute such action solely in its own name under Section 7.3.2, Dynavax
will join such action voluntarily and will execute and cause its Affiliates to execute
all documents necessary for Merck to initiate litigation to prosecute and maintain such
action. In connection with any action, Merck and Dynavax will cooperate fully and will
provide each other with any information or assistance that either may reasonably
request. Each Party shall keep the other informed of developments in any action or
proceeding, including, to the extent permissible by law and attorney-client privilege,
consultation on any settlement, the status of any settlement negotiations and the terms
of any offer related thereto.
	 
	 	7.3.4	 	Any recovery obtained by either or both Merck and Dynavax in connection with
or as a result of any action contemplated by this Section, whether by settlement or
otherwise, shall be shared in order as follows:

	 	(a)	 	the Party which initiated and prosecuted the action shall
recoup all of its costs and expenses incurred in connection with the action;
	 
	 	(b)	 	the other Party shall then, to the extent possible, recover its
costs and expenses incurred in connection with the action; and
	 
	 	(c)	 	the amount of any recovery remaining shall then be allocated
between the Parties on a pro rata basis taking into consideration the relative
economic losses suffered by each Party.

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	7.3.5	 	Dynavax shall inform Merck of any certification regarding any Dynavax Patent
Rights it has received pursuant to either 21 U.S.C. §§355(b)(2)(A)(iv) or
(j)(2)(A)(vii)(IV) or its successor provisions or any similar provisions in a country
in the Territory other than the United States, and shall provide Merck with a copy of
such certification within five (5) business days of receipt. Dynavax’s and Merck’s
rights with respect to the initiation and prosecution of any legal action as a result
of such certification or any recovery obtained as a result of such legal action shall
be as defined in Sections 7.3.1 through 7.3.4; provided, however, that
Dynavax shall exercise its first right to initiate and prosecute any action and shall
inform Merck of such decision within [ * ] of receipt of the certification, after which
time Merck shall have the right to initiate and prosecute such action. Regardless of
which Party has the right to initiate and prosecute such action, both Parties shall, as
soon as practicable after receiving notice of such certification, convene and consult
with each other regarding the appropriate course of conduct for such action. The
non-initiating Party shall have the right to be kept fully informed and participate in
decisions regarding the appropriate course of conduct for such action, and the right to
join and participate in such action.

	7.4	 	Patent Term Restoration. The Parties agree to cooperate and to take reasonable actions to
maximize the protections available under the safe harbor provisions of 35 U.S.C. 103(c) for
United States patents and patent applications. The Parties shall cooperate with each other,
including without limitation to provide necessary information and assistance as the other
Party may reasonably request, in obtaining patent term restoration or supplemental protection
certificates or their equivalents for Dynavax Patent Rights in any country in the Territory
where applicable. Dynavax shall be responsible for all costs associated with obtaining patent
term restoration, supplemental protection certificates or their equivalents.

ARTICLE 8 TECHNOLOGY TRANSFER AND MANUFACTURING AND SUPPLY OBLIGATIONS.

	8.1	 	Commitment. Pursuant and subject to the terms and conditions of the Manufacturing Agreement,
Dynavax agrees to manufacture and supply Merck and Related Parties with all of their
requirements, and Merck [ * ] Dynavax as the manufacturer and supplier of (i) the Hepatitis B
Surface Antigen for use with Licensed Vaccine and Product under and during the term of this
Agreement; and (ii) the Licensed Vaccine and the Product, in the case of this clause (ii)
until such time that (A) the process technology transfer and analytical method transfer from
Dynavax to Merck is completed, and (B) Merck determines that such process technology transfer
and analytical method transfer is validated and can be filed with a Regulatory Authority, each
of (A) and (B) as provided in the Manufacturing Agreement.

	8.2	 	Process Transfer. Pursuant and subject to the terms and conditions of the Manufacturing
Agreement, Dynavax shall transfer the process technology and analytical methods to Merck, its
Affiliates or Third Party manufacturer necessary to allow Merck to replicate the process
employed by Dynavax or its Third Party manufacturer to manufacture the Licensed Vaccine or
Product at commercial scale at a site to be designated by Merck. Merck will periodically
inform Dynavax of the status of transfer. Dynavax shall allow, and cause its Third Party
manufacturers to allow Merck employees or agents to reasonably observe the manufacturing of
Licensed Vaccine or Product. Upon completion of the process technology transfer, Dynavax will
continue, and will cause its Third Party’s to continue, to be reasonably available to Merck
and will provide,

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	 	at Merck’s expense for third Party support only, reasonable assistance requested by Merck in
connection with the establishment and implementation of such manufacturing. For clarity,
the provisions of this Section 8.2 shall not alter, limit or otherwise amend Dynavax’s
obligation to supply and Merck’s obligation to purchase, pursuant to the Manufacturing
Agreement, Hepatitis B Surface Antigen during the term of this Agreement.
	 
	8.3	 	Clinical Supply. Until the technology transfer is completed under Section 10.2 of the
Manufacturing Agreement, Dynavax shall, or cause its Third Party manufacturer, to manufacture
and supply Merck, and Merck shall order from Dynavax all of its requirements for Licensed
Vaccine or Product for use in Clinical Trials to be performed in accordance with the
Development Plan (the “Clinical Product"). The JDT shall provide Dynavax with a forecast of
Clinical Product requirements as part of the Development Plan as specified in Section
2.4.5(a). Dynavax represents and warrants that the Clinical Product shall (i) meet the
specifications as agreed to by the Parties; (ii) be manufactured and delivered to Merck in
accordance with cGMP, cGLP, and the IND; and (iii) not be adulterated or misbranded within the
meaning of the Act. All manufacture and supply of Clinical Product hereunder shall be
initiated by purchase orders placed by Merck. Each purchase order shall include the quantity
of Clinical Product ordered, requested delivery date(s), and shipping destination and/or
instruction. Dynavax shall accept and fill all purchase orders for Clinical Product placed by
Merck hereunder, and shall deliver the Clinical Product by the delivery dates requested
therein; provided that [ * ]. Dynavax shall provide all Clinical Product ordered
herein [ * ].
	 
	8.4	 	[ * ] of Dynavax for Manufacturing. Subject to the terms and conditions of this Agreement
and the Manufacturing Agreement, Merck hereby [ * ] Dynavax, and Dynavax accepts such [ * ],
on Merck’s behalf to perform itself (or through its Affiliates or Third Parties as permitted
in accordance with Section 2.2) the manufacture and supply of Clinical Product and the
commercial supply of Hepatitis B Surface Antigen for Merck and its Related Parties in
accordance with this Article 8 and the Manufacturing Agreement.

ARTICLE 9 REGULATORY

	9.1	 	Regulatory.

	 	9.1.1	 	Regulatory Responsibilities. Merck, or its designee, shall have
primarily responsibility and control for all regulatory filings, communications and
correspondence with the Regulatory Authorities relating to Licensed Vaccine and/or
Product in the Territory and should hold the BLA and, after the transfer of the INDs in
accordance with Section 9.1.2, the IND. Subject to the assistance of Dynavax as
specified below, Merck, at its sole expense, shall be responsible for timely performing
all regulatory activities which it deems necessary for Licensed Vaccine and Products in
the Territory. Merck shall consult with Dynavax with respect to its regulatory
strategy and consult with Dynavax prior to any filings with Regulatory Authorities,
provide a copy of all filings, communications and correspondence with Regulatory
Authorities relating to Licensed Vaccine and/or Product in the Territory and allow
Dynavax to participate in any meetings with Regulatory Authorities in the United
States. Dynavax will assist Merck in establishing and maintaining filings with the
Regulatory Authorities, including the IND and any BLA, and participate and/or assist in
communication and correspondence with the Regulatory Authorities as set forth in
Schedule 9.1 attached hereto. Merck shall fund the regulatory

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	 	 	assistance that Dynavax provides to Merck to obtain Regulatory Authorizations for
the Product in accordance with this Section 9.1.1 as set forth in Section 2.3.
Merck may utilize the services of its Affiliates and Third Parties to perform its
regulatory responsibilities and Dynavax may utilize the services of its Affiliates
and Third Parties to perform its regulatory responsibilities only with Merck’s prior
written consent and otherwise in accordance with Section 2.2.
	 
	 	9.1.2	 	Transfer of Regulatory Filing To Merck. As soon as practicable after
the Effective Date, but in no event later than [ * ] after the Effective Date, Dynavax
shall, at Merck’s expense, transfer and assign to Merck (or its designee) any and all
Dynavax INDs for Licensed Vaccine or Product in the Territory and, upon completion of
such transfer, Merck shall assume complete ownership of and responsibility for all
Dynavax INDs. Prior to Dynavax’s transfer of the INDs to Merck in accordance with the
foregoing, subject in all cases to prior consultation with, and approval from, Merck,
Dynavax shall take all reasonable or necessary steps to properly maintain the Dynavax
INDs with the Regulatory Authority. Dynavax hereby provides Merck with a right of
reference to and agrees to properly maintain with applicable Regulatory Authority any
and all Drug Master Files that cover, in whole or in part, Licensed Vaccine and/or
Products which are in Dynavax’s or its Affiliate’s possession or control as of the
Effective Date.

9.2 Adverse Experience Reporting.

	 	9.2.1	 	Dynavax agrees throughout the duration of this agreement to notify Merck
within the earlier of [ * ] and [ * ], in English of any information of which Dynavax
becomes aware concerning any side effect, injury, toxicity or sensitivity reaction, or
any unexpected incident, and the severity thereof, whether or not determined to be
attributable to any Licensed Vaccine and/or Product (hereinafter “Adverse Experience”),
where such Adverse Experience is (i) serious and associated with the clinical uses,
studies, investigations, tests and marketing of Product (to the extent performed or is
the responsibility of Dynavax), whether or not determined to be attributable to
Product. With respect to all other adverse experiences (non-serious expected or
non-serious unexpected adverse experiences), Dynavax shall furnish Merck with copies of
such non-serious adverse experiences reported to Dynavax in connection with the
marketing of Product, in English, within [ * ] after receipt. “Serious” as used in
this Section refers to an experience which results in death, is immediately life
threatening, results in persistent and significant disability/incapacity or requires
in-patient hospitalization, or prolongation of existing hospitalization, or is a
congenital anomaly, cancer or an overdose. Other important medical events that may
jeopardize the patient or may require intervention to prevent one of the outcomes
previously listed should also be considered serious. “Unexpected” as used in this
Section refers to a condition or development not listed in the current labeling or
investigator’s brochure for Product, and includes an event that may be symptomatically
and pathophysiologically related to an event listed in the labeling, but differs from
the event because of increased frequency or greater severity or specificity.
	 
	 	9.2.2	 	With respect to clinical trials being carried out by or on behalf of Dynavax,
adverse experience reports of unexpected and fatal or life-threatening events which are
possibly, probably, definitely related or of unknown relationship to the use of Product
must be forwarded to Merck within [ * ] after receipt of the information. In addition,
Dynavax

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	 	 	shall furnish to Merck copies of the end of study summary of adverse experiences in
English within the time period set forth in the applicable then-current clinical
development plan for Product.
	 
	 	9.2.3	 	It is understood and agreed that these adverse experience reporting
requirement provisions are based on the policies and procedures of Merck and regulatory
reporting requirements. In the event of changes to regulatory requirements for adverse
experience reporting, Merck shall promptly notify Dynavax of any such changes and
Dynavax agrees to comply with any such reasonably required revised notification
requirements applicable to Merck and other parties generally subject to the Merck
procedures.
	 
	 	9.2.4	 	By no later than [ * ] after the Effective Date the Parties shall meet to
discuss the details and implementation of a formal procedure for the mutual exchange of
adverse event reports and safety information associated with the Licensed Vaccine
and/or the Product. Details of the operating procedure respecting such adverse event
reports and safety information exchange shall be the subject of a mutually-agreed
pharmacovigilance agreement between the Parties which that Parties shall endeavor to
finalize within [ * ] following the Effective Date. Such pharmacovigilance agreement
shall be implemented at a time sufficient to permit compliance with applicable
Regulatory Authority guidelines and regulations.

Article 10 TERM AND TERMINATION

	10.1	 	Term and Expiration. This Agreement shall be effective as of the Effective Date and unless
terminated earlier pursuant to Sections 10.2 or 10.3, this Agreement shall continue in effect
until expiration of all payment obligations of Merck to Dynavax under Article 5. Upon
expiration of this Agreement, Merck’s licenses pursuant to Sections 3.1.1 and 3.2 shall become
fully paid-up, perpetual licenses.
	 
	10.2	 	Termination by Either Party.

	 	10.2.1	 	Termination By Merck. Notwithstanding anything contained herein to the
contrary, Merck shall have the right to terminate this Agreement at any time in its
sole discretion by giving [ * ] advance written notice to Dynavax.
	 
	 	10.2.2	 	Termination by Dynavax. In the event that Merck provides Dynavax with a
Ceased Development Notice under Section 3.3 and [ * ], Dynavax shall have the right to
terminate this Agreement in its sole discretion by giving [ * ] advance written notice
to Merck.

	10.3	 	Termination for Cause. This Agreement may be terminated at any time during the term of this
Agreement:

	 	10.3.1	 	upon written notice by either Party if the other Party is in breach of its material
obligations hereunder by causes and reasons within its control and has not cured such
breach within [ * ] after notice requesting cure of the breach; provided,
however, in the event of a good faith dispute with respect to the existence of
a material breach, the [ * ]

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	 	 	cure period shall be tolled until such time as the dispute is resolved pursuant to
Section 12.6; or
	 
	 	10.3.2	 	by either Party upon the filing or institution of bankruptcy, reorganization,
liquidation or receivership proceedings, or upon an assignment of a substantial portion
of the assets for the benefit of creditors by the other Party; provided,
however, that in the case of any involuntary bankruptcy proceeding such right
to terminate shall only become effective if the Party consents to the involuntary
bankruptcy or such proceeding is not dismissed within [ * ] after the filing thereof.

	10.4	 	Effect of Certain Terminations.

	 	10.4.1	 	If Merck terminates this Agreement under Section 10.3.1, [ * ]; and (b) Dynavax
shall, within [ * ] after the effective date of such termination return or cause to be
returned to Merck all Materials provided to it by Merck, all Licensed Vaccine and
Product, all Information in tangible form, and all substances or compositions, in each
case delivered or provided by Merck, as well as any other material provided by Merck in
any medium; provided, however, that Dynavax may keep one copy of
Information received from Merck (and/or its Affiliates) in its confidential files for
record purposes.
	 
	 	10.4.2	 	If Dynavax terminates this Agreement under Section 10.3.1, subject to Section
10.4.3(d), [ * ].
	 
	 	10.4.3	 	Upon termination of this Agreement by Merck pursuant to Section 10.2.1, or by Dynavax
pursuant to Section 10.2.2 or Section 10.3.1:

	 	(a)	 	Subject to Section 10.4.3(e), no later than thirty (30) days
after the effective date of such termination, each Party shall return or cause
to be returned to the other Party all Information received from the other Party
and all copies thereof; provided, however, that each Party may
keep one copy of Information received from the other Party in its confidential
files for record purposes;
	 
	 	(b)	 	Subject to Section 0, each Party shall pay all amounts then due
and owing as of the termination date;
	 
	 	(c)	 	[ * ];
	 
	 	(d)	 	[ * ];
	 
	 	(e)	 	[ * ]:

	 	(i)	 	[ * ];
	 
	 	(ii)	 	[ * ]; and
	 
	 	(iii)	 	[ * ];

	 	 	 	[ * ].

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	 	 	[ * ].

	 	10.4.4	 	If this Agreement is terminated by Merck pursuant to Section 10.3.2 due to the
rejection of this Agreement by or on behalf of Dynavax under Section 365 of the United
States Bankruptcy Code (the “Code"), all licenses and rights to licenses granted under
or pursuant to this Agreement by Dynavax to Merck are, and shall otherwise be deemed to
be, for purposes of Section 365(n) of the Code, licenses of rights to “intellectual
property” as defined under Section 101(35A) of the Code. The Parties agree that Merck,
as a licensee of such rights under this Agreement, shall retain and may fully exercise
all of its rights and elections under the Code, and that upon commencement of a
bankruptcy proceeding by or against Dynavax under the Code, which proceeding is not
stayed within [ * ] after initiation of such proceedings, Merck shall be entitled to a
complete duplicate of or complete access to (as Merck deems appropriate), any such
intellectual property and all embodiments of such intellectual property. Such
intellectual property and all embodiments thereof shall be promptly delivered to Merck
(i) upon written request therefore by Merck following the expiration of the [ * ],
unless Dynavax elects to continue to perform all of its obligations under this
Agreement or (ii) if not delivered under (i), upon the rejection of this Agreement by
or on behalf of Dynavax upon written request therefore by Merck.
	 
	 	 	 	The foregoing Section 10.4.4 is without prejudice to any rights Merck may have
arising under the Code or other applicable law.

	10.5	 	Effect of Expiration or Termination; Survival. Expiration or termination of this Agreement
shall not relieve the Parties of any obligation accruing prior to such expiration or
termination. Any expiration or termination of this Agreement shall be without prejudice to
the rights of either Party against the other accrued or accruing under this Agreement prior to
expiration or termination, including without limitation the obligation to pay royalties for
Product(s) or Licensed Vaccine sold prior to such expiration or termination. The provisions of
Article 4 shall survive the expiration or termination of this Agreement and shall continue in
effect for [ * ]. In addition, the provisions of Article 1, Section 2.6, Section 2.7, Article
4, Article 6, Article 7, Section 8.2 (if Merck terminates this Agreement under Section
10.3.1), Section 9.2.4, Article 10, Article 11and Article 12shall survive any expiration or
termination of this Agreement.

ARTICLE 11 INDEMNITY

	11.1	 	Indemnification By Merck. Merck shall indemnify, defend and hold Dynavax, its Affiliates and
their respective agents, employees, officers and directors (each a “Dynavax Indemnitee”)
harmless from and against any and all claims, suits, actions, demands, liabilities, expenses
and/or loss, including reasonable legal expense and attorneys’ fees (collectively, “Losses”)
to which any Dynavax Indemnitee may become subject as a result of any claim, demand, action or
other proceeding by any person or entity other than a Party or its Affiliates to the extent
such Losses arise directly or indirectly out of [ * ]; except, in each case, to the extent
such Losses result from the material breach by Dynavax, its Affiliates, sublicensees or
subcontractors of any covenant, representation, warranty or other agreement made by Dynavax in
this Agreement or the negligence or willful misconduct of any Dynavax Indemnitee.

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	11.2	 	Indemnification by Dynavax. Dynavax shall indemnify, defend and hold Merck, its Affiliates,
Related Parties and their respective agents, employees, officers and directors (each a “Merck
Indemnitee”) harmless from and against any and all Losses, to which any Merck Indemnitee may
become subject as a result of any claim, demand, action or other proceeding by any person or
entity other than a Party or its Affiliates to the extent such Losses arise directly or
indirectly out of [ * ], to the extent such Losses result from the material breach by Merck,
its Related Party or subcontractors of any covenant, representation, warranty or other
agreement made by Merck in this Agreement or the negligence or willful misconduct of any Merck
Indemnitee.

	11.3	 	Notice of Indemnification Obligation and Defense. Any Party entitled to indemnification
under Sections 11.1 or 11.2 shall give notice to the indemnifying Party of any Losses that may
be subject to indemnification, promptly after learning of such Losses, but the omission to so
notify the indemnifying Party promptly will not relieve the indemnifying Party from any
liability under Sections 11.1 or 11.2 except to the extent that the indemnifying Party shall
have been prejudiced as a result of the failure or delay in providing such notice. The
indemnifying Party shall assume the defense of such Losses with counsel reasonably
satisfactory to the indemnified Party. If such defense is assumed by the indemnifying Party,
the indemnifying Party will not be subject to any liability for any settlement of such Losses
made by the indemnified Party without its consent (but such consent will not be unreasonably
withheld or delayed), and will not be obligated to pay the fees and expenses of any separate
counsel retained by the indemnified Party with respect to such Losses. The indemnified Party
shall provide the indemnifying Party with all information in its possession and all assistance
reasonably necessary to enable the indemnifying Party to carry on the defense of any such
Losses.

ARTICLE 12 MISCELLANEOUS

	12.1	 	Force Majeure. Neither Party shall be held liable to the other Party nor be deemed to have
defaulted under or breached this Agreement for failure or delay in performing any obligation
under this Agreement to the extent such failure or delay is caused by or results from causes
beyond the reasonable control of the affected Party, potentially including, but not limited
to, embargoes, war, acts of war (whether war be declared or not), acts of terrorism,
insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances, fire,
floods, earthquakes, or other acts of God, or acts, omissions or delays in acting by any
governmental authority or the other Party. The affected Party shall notify the other Party of
such force majeure circumstances as soon as reasonably practical, and shall promptly undertake
all reasonable efforts necessary to cure such force majeure circumstances.

12.2 Assignment/ Change of Control.

	 	12.2.1	 	Except as provided in this Section 12.2, this Agreement may not be assigned or
otherwise transferred, nor may any right or obligation hereunder be assigned or
transferred, by either Party without the consent of the other Party.
	 
	 	12.2.2	 	Merck may, without consent of Dynavax, assign this Agreement and its rights and
obligations hereunder in whole or in part to an Affiliate of Merck or in connection
with a Change of Control of Merck. Dynavax may assign this Agreement in its entirety
to the successor party in connection with a Change of Control.

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	12.2.3	 	In the event that there is a Dynavax Change of Control that is a Competing Pharma
Change of Control, then Dynavax shall [ * ] and Merck shall have the right, at Merck
election at any time after such Change of Control to implement some or all of the
following revisions to this Agreement:

	 	(a)	 	[ * ];
	 
	 	(b)	 	[ * ];
	 
	 	(c)	 	[ * ]; or
	 
	 	(d)	 	[ * ].

	 	12.2.4	 	[ * ].
	 
	 	12.2.5	 	Any attempted assignment not in accordance with this Section 12.2 shall be void. Any
permitted assignee shall assume all assigned obligations of its assignor under this
Agreement. The terms and conditions of this Agreement shall be binding upon, and shall
inure to the benefit of, the Parties and their respected successors and permitted
assigns.

	12.3	 	Severability. If any one or more of the provisions contained in this Agreement is held
invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected or impaired
thereby, unless the absence of the invalidated provision(s) adversely affects the substantive
rights of the Parties. The Parties shall in such an instance use their best efforts to
replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable
provision(s) which, insofar as practical, implement the purposes of this Agreement.

	12.4	 	Notices. All notices which are required or permitted hereunder shall be in writing and
sufficient if delivered personally, sent by facsimile (and promptly confirmed by personal
delivery, registered or certified mail or overnight courier), sent by nationally-recognized
overnight courier or sent by registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:

	 	 	 
	if to Dynavax, to:

	 	Dynavax Technologies Corporation
	 

	 	2929 Seventh Street, Suite 100
	 

	 	Berkeley CA 94710
	 

	 	Attention: Chief Executive Officer
	 

	 	Facsimile No.: 510-848-1376

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	and:

	 	Cooley Godward Kronish LLP
	 

	 	3175 Hanover Street
	 

	 	Palo Alto, CA 94304-1130
	 

	 	Phone: 650-843-5000
	 
	 

	 	:
	 

	 	Fax: 650-849-7400
	 

	 	Attention: Glen Sato, Esq.
	 
	 	 
	if to Merck, to:

	 	Merck & Co., Inc.
	 

	 	[ * ]
	 
	 	 
	And

	 	Merck & Co., Inc.
	 

	 	[ * ]

	 	 	or to such other address(es) as the Party to whom notice is to be given may have furnished
to the other Party in writing in accordance herewith. Any such notice shall be deemed to
have been given: (a) when delivered if personally delivered or sent by facsimile on a
business day (or if delivered or sent on a non-business day, then on the next business day);
(b) on the business day after dispatch if sent by nationally-recognized overnight courier;
or (c) on the fifth (5th) business day following the date of mailing, if sent by mail.
	 
	12.5	 	Applicable Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York and the patent laws of the United States without reference to
any rules of conflict of laws.
	 
	12.6	 	Dispute Resolution.

	 	12.6.1	 	The Parties shall negotiate in good faith and use reasonable efforts to settle any
dispute, controversy or claim arising from or related to this Agreement or the breach
thereof. If the Parties do not fully settle, and a Party wishes to pursue the matter,
each such dispute, controversy or claim that is not an “Excluded Claim” shall be
finally resolved by binding arbitration in accordance with the Commercial Arbitration
Rules and Supplementary Procedures for Large Complex Disputes of the American
Arbitration Association (“AAA”), and judgment on the arbitration award may be entered
in any court having jurisdiction thereof.

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
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	 	12.6.2	 	The arbitration shall be conducted by a panel of three persons experienced in the
pharmaceutical business: within [ * ] 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 [ * ] 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 AAA. The place of arbitration shall be New
York, New York, and all proceedings and communications shall be in English. The
arbitrators shall have the right to provide discovery by the Parties; provided
that the period for discovery shall not exceed [ * ].
	 
	 	12.6.3	 	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 no
authority to award punitive or any other type of damages not measured by a Party’s
compensatory damages. Each Party shall bear its own costs and expenses and attorneys’
fees and an equal share of the arbitrators’ fees and any administrative fees of
arbitration.
	 
	 	12.6.4	 	Except to the extent necessary to confirm an award or as may be required by law or
regulation, neither a Party nor an arbitrator may disclose the existence, content, or
results of an arbitration without the prior written consent of both Parties. In no
event shall an arbitration be initiated after the date when commencement of a legal or
equitable proceeding based on the dispute, controversy or claim would be barred by the
applicable New York statute of limitations.
	 
	 	12.6.5	 	The Parties agree that, in the event of a 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.
	 
	 	12.6.6	 	As used in this Section, the term “Excluded Claim” shall mean a dispute, controversy
or claim that concerns (a) the validity or infringement of a patent, trademark or
copyright; or (b) any antitrust, anti-monopoly or competition law or regulation,
whether or not statutory.

	12.7	 	Entire Agreement; Amendments. This Agreement, together with the Schedules and Exhibits
hereto, contains the entire understanding of the Parties with respect to the subject matter
hereof and supersedes and cancels all previous express or implied agreements and
understandings, negotiations, writings and commitments, either oral or written, in respect to
the subject matter hereof. The Schedules and Exhibits to this Agreement are incorporated
herein by reference and shall be deemed a part of this Agreement. This Agreement may be
amended, or any term hereof modified, only by a written instrument duly executed by authorized
representatives of both Parties hereto.
	 
	 	 	Notwithstanding anything to the contrary in the foregoing, that certain Disclosure Agreement
between the Parties dated on or about [ * ], shall remain in full force and effect with
respect to the

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
	 	38
	 	Execution

 

 

	 	 	subject matter thereof and information disclosed thereunder; provided that any
information disclosed thereunder may be utilized by the Parties for the purposes of this
Agreement as if it were disclosed hereunder.
	 
	12.8	 	Headings. The captions to the several Articles, Sections and subsections hereof are not a
part of this Agreement, but are merely for convenience to assist in locating and reading the
several Articles and Sections hereof.
	 
	12.9	 	Independent Contractors; No Third Party Beneficiaries. It is expressly agreed that Dynavax
and Merck shall be independent contractors and that the relationship between the two Parties
shall not constitute a partnership, joint venture or agency. Neither Dynavax nor Merck shall
have the authority to make any statements, representations or commitments of any kind, or to
take any action, which shall be binding on the other Party, without the prior written consent
of the other Party. No person or entity other than Dynavax. Merck and their respective
Affiliates and permitted assignees under this Agreement shall be deemed an intended
beneficiary under or have any right to enforce any obligation of this Agreement.
	 
	12.10	 	Waiver. The waiver by either Party hereto of any right hereunder, or of any failure of the
other Party to perform, or of any breach by the other Party, shall not be deemed a waiver of
any other right hereunder or of any other breach by or failure of such other Party whether of
a similar nature or otherwise.
	 
	12.11	 	Cumulative Remedies. No remedy referred to in this Agreement is intended to be exclusive,
but each shall be cumulative and in addition to any other remedy referred to in this Agreement
or otherwise available under law.
	 
	12.12	 	Waiver of Rule of Construction. Each Party has had the opportunity to consult with counsel
in connection with the review, drafting and negotiation of this Agreement. Accordingly, the
rule of construction that any ambiguity in this Agreement shall be construed against the
drafting Party shall not apply.

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
	 	39
	 	Execution

 

 

	12.13	 	Certain Conventions. Any reference in this Agreement to an Article, Section, subsection,
paragraph, clause, Schedule or Exhibit shall be deemed to be a reference to an Article,
Section, subsection, paragraph, clause, Schedule or Exhibit, of or to, as the case may be,
this Agreement, unless otherwise indicated. Unless the context of this Agreement otherwise
requires, (a) words of any gender include each other gender, (b) words such as “herein”,
“hereof”, and “hereunder” refer to this Agreement as a whole and not merely to the
particular provision in which such words appear, (c) words using the singular shall include
the plural, and vice versa. All references to “dollars” or “$” in this Agreement shall be a
reference to United States dollars, unless otherwise expressly stated.
	 
	12.14	 	Business Day Requirements. In the event that any notice or other action or omission is
required to be taken by a Party under this Agreement on a day that is not a business day then
such notice or other action or omission shall be deemed to required to be taken on the next
occurring business day.
	 
	12.15	 	Counterparts. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same
instrument.
	 
	12.16	 	Affiliates. Each Party shall cause its respective Affiliates to comply with the terms,
conditions, and obligations of this Agreement that are applicable to its Affiliates, and to
the extent that a Party performs its obligations, or exercise its rights, under this Agreement
through it Affiliate(s) such Party shall cause such Affiliates to comply with the terms,
conditions, and obligations applicable to such Party under this Agreement with respect to such
obligation and rights.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

	 	 	 	 	 	 	 	 	 	 	 
	MERCK & CO., INC.	 	 	 	DYNAVAX TECHNOLOGIES CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	BY:

	 	/s/ Richard T. Clark
	 	 	 	BY:
	 	/s/ Dino Dina	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	NAME: Richard T. Clark
	 	 	 	 	 	NAME: Dino Dina, M.D.	 	 
	 

	 	TITLE: Chairman, President and
	 	 	 	 	 	TITLE: President and Chief Executive Officer
	 	 
	 

	 	             Chief Executive Officer	 	 	 	 	 	 	 	 

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
	 	40
	 	Execution

 

 

SCHEDULE 1.26 PATENT RIGHTS

[ * ]

SCHEDULE 2.1 GENERAL DESCRIPTION OF DEVELOPMENT PLAN

[ * ]

SCHEDULE 2.3 INITIAL DEVELOPMENT BUDGET

[ * ]

SCHEDULE 6.2.8 INDs FOR LICENSED VACCINE

[ * ]

SCHEDULE 6.2.16 [ * ]

[ * ]

SCHEDULE 9.1 REGULATORY RESPONSIBILITIES

[ * ]

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.

					
	 	 	 	 	 
	 
	 	41
	 	Executionexv10w35

 

[ * ] = Certain confidential information contained in this document, marked by brackets,
has been omitted and filed separately with the Securities and Exchange Commission pursuant
to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Exhibit 10.35

Execution Copy

MANUFACTURING AGREEMENT

between

DYNAVAX TECHNOLOGIES CORPORATION

and

MERCK & CO., INC.

 

 

Execution Copy

     This Manufacturing Agreement (the “Agreement”) dated as of October 31, 2007 (“Effective Date”)
is made by and between Dynavax Technologies Corporation (“Dynavax”), a corporation organized under
the laws of Delaware, and Merck & Co., Inc. (“Merck”), a corporation organized under the laws of
New Jersey. Each of Dynavax and Merck is sometimes referred to individually herein as a “Party”
and collectively as the “Parties”.

W I T N E S S E T H:

     Whereas, Dynavax and Merck have entered into that certain Exclusive License and
Development Collaboration Agreement (the “License Agreement”), dated as of the Effective Date under
which Dynavax has provided an exclusive license to Merck for its hepatitis B surface antigen
(“Hepatitis B Surface Antigen”) combined with the 1018 ISS (as defined in the License Agreement) in
the Hep B Field (as defined in the License Agreement); and

     Whereas, Merck desires to use the Hepatitis B Surface Antigen, along with the 1018
ISS together with Merck’s fill and finish capabilities to sell Licensed Vaccines or Product (as
defined herein); and

     Whereas, until such time that the process and formulation technology transfer from
Dynavax to Merck is completed, Dynavax shall supply Merck and Merck shall purchase, its
requirements for Licensed Vaccines or Products (solely for use in Clinical Trials (as defined in
the License Agreement)), [ * ]; and

     Whereas, Merck wishes to engage Dynavax to Manufacture (as defined herein) on Merck’s
behalf its requirements of Hepatitis B Surface Antigen in accordance with the terms and conditions
set forth in this Agreement and the License Agreement.

     Now Therefore, in consideration of the foregoing premises and mutual covenants herein
contained, Dynavax and Merck hereby agree as follows:

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

1

 

1. DEFINITIONS

     As used herein, the following capitalized terms shall have the respective meanings set forth
below unless otherwise specifically provided herein and where the context requires otherwise,
whenever used the singular includes the plural, the plural includes the singular. Capitalized
terms used but not defined herein shall have the meanings ascribed to them in the License
Agreement:

     1.1 “Act” shall have the meaning given such term in Section 5.1(a).

     1.2 “Affiliate” shall have the meaning given such term in the License Agreement.

     1.3 “Agreement” shall have the meaning given such term in the preamble to this Agreement.

     1.4 “Authorization” shall mean all approvals or permits granted by a Regulatory Authority
necessary to market and sell a Product, including without limitation all applicable pricing and
reimbursement approvals, required to sell such Product in a country within the Territory.

     1.5 “BLA” shall mean the Biologics License Application prepared in accordance with applicable
FDA regulations for filings with the FDA for marketing authorization of Product, or its equivalent
in other countries within the Territory in conformance with the requirements of the applicable
Regulatory Authority.

     1.6 “Calendar Year” shall mean each successive period of twelve (12) months commencing from
January 1 and ending on December 31.

     1.7 “cGMPs” shall mean all laws and regulations relating to the manufacture of Hepatitis B
Surface Antigen, Licensed Vaccine or Product, as the case may be, in the USA and European Union,
including but not limited to the current Good Manufacturing Practices as specified in the United
States Code of Federal Regulations and/or in the European Commission Guide to Good Manufacturing
Practice for Medicinal Products (also known as EudraLex Volume 4), Q7A Good Manufacturing Practice
Guidance for Active Pharmaceutical Ingredients

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(also known as EudraLex Volume 4 part 2), in each case, as are in effect on the Effective Date
and as may be modified or supplemented during the term of this Agreement.

     1.8 “Complete Invoice” shall have the meaning set forth in Section 8.3.

     1.9 “Delivery” shall have the meaning set forth in Article 7.

     1.10 “Dose”; “Doses” shall mean the target fill quantity of formulated Hepatitis B Surface
Antigen required to fill a vial of Licensed Vaccine or Product for clinical use or commercial sale
as more fully described and calculated on Exhibit B attached hereto.

     1.11 “Effective Date” shall have the meaning given such term in the preamble to this
Agreement.

     1.12 “Facility” shall mean Dynavax’s new Manufacturing facility currently expected to be
located at [ * ] at which Hepatitis B Surface Antigen is Manufactured.

     1.13 “FDA” shall mean the United States Food and Drug Administration and any successor
governmental authority having substantially the same function.

     1.14 “Firm Order” shall mean a binding commitment on the part of Merck or its Related Party to
purchase, and on the part of Dynavax to supply, certain quantity of Hepatitis B Surface Antigen.

     1.15 “Hepatitis B Surface Antigen” shall have the meaning given such term in the preamble to
this Agreement.

     1.16 “Initial Pricing” shall have the meaning given such term in Section 8.1.

     1.17 “Initial Pricing Period” shall have the meaning given such term in Section 8.1.

     1.18 “Know-How” shall mean, any non-public, documented or otherwise recorded or memorialized
knowledge, experience, know-how, technology, information, and data, including formulas and
formulations, processes, techniques, unpatented inventions, discoveries, ideas, and

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

developments, test procedures, and results, together will all documents and files embodying
the foregoing.

     1.19 “Launch” shall mean, on a country-by-country basis, after receipt of Authorization for
Product in any country the first day on which Merck or a Related Party ships Product to a
wholesaler or Third Party in such country, excluding however, any sale or other distribution for
use in a Clinical Trial in such country.

     1.20 “License Agreement” shall have the meaning given such term in the preamble to this
Agreement.

     1.21 “Licensed Vaccine” shall have the meaning given such term in the License Agreement.

     1.22 “Live Agent” shall have the meaning given such term in Section 6.9.

     1.23 “Long Range Forecast” shall have the meaning set forth in Section 3.1.

     1.24 “Major Market Launch” shall have the meaning set forth in Section 3.1.

     1.25 “Manufacture” shall mean all operations of Dynavax involved in (i) the receipt, incoming
inspections, storage and handling of Materials and (ii) the manufacturing, warehousing, quality
control testing (including in-process, release and stability testing), releasing, and shipping of
bulk Hepatitis B Surface Antigen.

     1.26 “Manufacturing Fee” shall have the meaning set forth in Section 8.1.

     1.27 “Manufacturing Technology” shall mean all inventions, discoveries, improvements, methods,
processes, formulas, Materials, Know-How, trade secrets, technology, data or information Controlled
by Dynavax whether patentable or not which are related to the manufacturing process of Hepatitis B
Surface Antigen, in the Control of Dynavax or its Affiliates as of the effective date of the
License Agreement, or which thereafter become Controlled by Dynavax or its Affiliates and subject
to the grant of a license under Section 3.2 of the License Agreement.

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

     1.28 “Master Cell Bank(s)” shall have the meaning given such term in Section 9.1.

     1.29 “Materials” shall mean all raw materials necessary for the Manufacture of Hepatitis B
Surface Antigen, including without limitation, intermediates, components, containers, labels and
packaging materials.

     1.30 “MST” shall have the meaning given such term in Section 4.3.

     1.31 “Party/Parties” shall have the meaning given such term in the preamble to this Agreement.

     1.32 “Pilot Facility” shall have the meaning given such term in Section 9.2.

     1.33 “Product” shall have the meaning given such term in the License Agreement.

     1.34 “Quality Agreement” shall have the meaning set forth in Section 6.11.

     1.35 “Regulatory Authority” shall mean any applicable governmental organization, agency or
administrative body subject to state supervision which has the authority to grant approvals and
regulate pharmaceutical/biological manufacturing, marketing, reimbursement and/or pricing of the
Product within the Territory, as applicable.

     1.36 “Related Party” shall mean Affiliates of Merck, and any sublicensee of Merck, in whole or
in part, of the licenses granted by Dynavax to Merck under the License Agreement (which term does
not include distributors), as applicable.

     1.37 “Rolling Forecast” shall have the meaning set forth in Section 3.2.

     1.38 “Specifications” shall mean manufactured in accordance with cGMPs and those
specifications for Hepatitis B Surface Antigen Product as set forth on Exhibit A attached hereto,
which can only be changed or modified with the prior written agreement of both Parties.

     1.39 “Steady State Pricing” shall have the meaning given such term in Section 8.1.

     1.40 “Supply Failure” shall mean [ * ].

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

     1.41 “Supply Failure Technology Transfer Notice” shall have the meaning given such term in
Section 9.1.

     1.42 “Term” shall have the meaning set forth in Section 12.1.

     1.43 “Territory” shall mean any and all countries in the world, and their territories and
possessions.

     1.44 “Third Party” shall mean any or all persons or entities other than Merck and its Related
Parties, and Dynavax and its Affiliates.

     1.45 “Working Cell Bank” shall have the meaning given such term in Section 13.1.

			
	2.	 	[ * ]; HEPATITIS B SURFACE ANTIGEN SUPPLY; LICENSED VACCINE OR PRODUCT SUPPLY

     2.1 Merck hereby [ * ] Dynavax to act for and on the behalf of Merck and Related Parties to
Manufacture and supply the Hepatitis B Surface Antigen for use with Licensed Vaccine and Product,
and Dynavax accepts [ * ] to Manufacture Hepatitis B Surface Antigen for use with Licensed Vaccine
or Product. The Parties acknowledge that the use of any Merck Know-How is solely for the
performance of [ * ] hereunder and the retained rights of Dynavax with respect to Dynavax Know-How
remain subject to Section 3.1.3 of the License Agreement. As part of its obligations, Dynavax shall
supply all Materials necessary to satisfy the production requirements of Merck for Hepatitis B
Surface Antigen in accordance with this Agreement. Materials shall remain the property of Dynavax
and shall be used by Dynavax for satisfying its exclusive Manufacturing and supply rights to the
Hepatitis B Surface Antigen.

     2.2 Except as set forth in Sections 3.3, 4.2 and 9.2 below, Dynavax shall supply Merck and
Related Parties, and Merck and Related Parties shall purchase from Dynavax, Merck’s total
requirements of Hepatitis B Surface Antigen for the manufacture of Licensed Vaccine and Product for
commercial sale by Merck and its Related Parties in the Field in the Territory; provided, however,
that the Parties acknowledge and agree Dynavax’s ability to Manufacture Hepatitis B Surface Antigen
is subject to [ * ]. For the purposes of this Agreement, the reference to the requirement of Merck
shall include those of its Related Parties.

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

     2.3 Dynavax shall supply Merck, and Merck shall purchase from Dynavax, Merck’s and its Related
Party’s total requirements of Licensed Vaccine or Product, as the case may be, for use in Clinical
Trials, until [ * ] (a) [ * ] and (b) [ * ] and in any event subject to (i) the terms and
conditions of the Development Program (as defined in the License Agreement); and (ii) the capacity
constraints of the Pilot Facility and Facility as described in Section 2.2 above. For the
avoidance of doubt, the Development Program shall provide order mechanism and Delivery schedule for
any Delivery of the Licensed Vaccine or Product ordered in connection with Clinical Trials.

			
	3.	 	FORECASTING AND ORDERING FOR COMMERCIAL SUPPLY OF HEPATITIS B SURFACE ANTIGEN

     3.1 Long Range Forecast: At least [ * ] prior to the expected first Delivery date of Product
for the first Launch in the United States or European Market (as defined in the License Agreement)
(the “Major Market Launch”), the Parties shall discuss the projected annual quantity requirements
for the Hepatitis B Surface Antigen for [ * ]. Thereafter, by December 1st of each Calendar Year,
Merck shall provide Dynavax with an updated forecast of its annual requirements for the Hepatitis B
Surface Antigen for [ * ], along with the projected annual quantity requirements for Launch in the
Territory, other than the Major Market Launch (the “Long Range Forecast”). Merck shall use
commercially reasonable efforts to make its long range forecast as accurate as possible. In the
event the requirements for Hepatitis B Surface Antigen as set forth in the most recently updated
long range forecast are significantly different from those set forth in the Rolling Forecast for
the same period, Merck shall, at Dynavax’s request, provide to Dynavax an explanation for such
difference. The Parties shall discuss in good faith any adjustments to potential capacity and
availability of supply based on significant adjustments to the Long Range Forecast, provided that
in any event Merck and Dynavax shall only be bound by the Rolling Forecast. For the avoidance of
doubt, Dynavax shall not be obligated to supply, and Merck shall not be obligated to purchase, the
quantities of Hepatitis B Surface Antigen set forth in the Long Range Forecast.

     3.2 Rolling Forecast: At least [ * ] prior to the expected first Delivery date of Product for
the first Major Market Launch, and thereafter, on or before the dates agreed upon by

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

the MST, and in any event at least [ * ], Merck shall provide Dynavax with a good faith
forecast of monthly quantity requirements for the Hepatitis B Surface Antigen for [ * ] (the
“Rolling Forecast”).

     3.3 Firm Order: The first [ * ] of each monthly Rolling Forecast shall be deemed as a Firm
Order. Merck shall designate a Delivery date or Delivery date(s) for the Firm Orders. The Parties
agree that (i) prior to the [ * ] of the first Major Market Launch, the [ * ] of each Firm Order
shall not vary by more than [ * ] of the estimated quantity of the [ * ] of the previous Rolling
Forecast; and (ii) following the [ * ] of the first Major Market Launch, the [ * ] of each Firm
Order shall not vary by more than [ * ] of the estimated quantity of the [ * ] of the previous
Rolling Forecast. If Merck places a Firm Order in excess of the maximum amount allowed pursuant to
the foregoing sentence, Dynavax shall use its commercially reasonable efforts to meet Merck’s
request; provided that Dynavax’s failure to supply the excess quantities shall not constitute a
breach of this Agreement. Notwithstanding the foregoing, the Parties agree that all Rolling
Forecasts and Firm Orders shall be subject to the capacity constraints for the Manufacture of
Hepatitis B Surface Antigen as described in Section 2.2 above.

     3.4 Form of Firm Order: Each Firm Order will be in such form as Merck may specify from time
to time in writing; provided that, (a) the terms and conditions of this Agreement shall be
controlling over any terms and conditions included in any Firm Order and (b) any term or condition
of such Firm Order that is different from or contrary to the terms and conditions of this Agreement
shall be null and void and of no force or effect.

     3.5 [ * ]: Merck may [ * ], provided that (a) a notice is received by Dynavax [ * ]; and (b)
such [ * ]; and provided further that in any event [ * ]. Merck acknowledges and agrees that in no
event [ * ].

     3.6 Delivery Timing: Dynavax shall satisfy each Firm Order on or before the date specified in
such Firm Order by Merck unless otherwise agreed to by Merck. No Deliveries of Hepatitis B Surface
Antigen shall be made more than [ * ] in advance of the date specified for Delivery in a Firm Order
without Merck’s written approval. Site of Manufacture shall be indicated on documents accompanying
each shipment of Hepatitis B Surface Antigen.

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

     3.7 Pre-Major Market Launch Production: Subject to the capacity restraints set forth in
Section 2.2 above, the Parties acknowledge and agree that in order for Dynavax to supply Merck’s
requirements for Hepatitis B Surface Antigen, Dynavax shall commence Manufacture of the Hepatitis B
Surface Antigen prior to the submission of the BLA with the Regulatory Authority. Upon execution
of this Agreement, through the JDC, the Parties shall mutually agree upon a commencement date for
the Manufacture of the Hepatitis B Surface Antigen and the amount to be produced to support the
first Major Market Launch. Merck will issue a Firm Order for such Hepatitis B Surface Antigen to
support the first Major Market Launch at least [ * ] prior to the expected first Major Market
Launch. [ * ]. For the avoidance of doubt, the Parties agree that any Hepatitis B Surface Antigen
Delivered under this Section 3.7 shall meet the warranties set forth in Section 5.1(a) in order for
[ * ].

4. ALLOCATION; MANUFACTURING AND SUPPLY TEAM

     4.1 Notice: In the event that Hepatitis B Surface Antigen is or is anticipated by Dynavax to
be in short supply due to a shortage of Hepatitis B Surface Antigen, Materials, resources or
existing capacity, Dynavax shall notify Merck in writing of such circumstances as soon as possible,
including the underlying reasons for such anticipated shortage, proposed remedial measures and the
date such shortage is expected to end.

     4.2 Allocation: In the event of a shortage contemplated in Section 4.1, Dynavax shall
allocate to Merck an amount of Hepatitis B Surface Antigen proportionate to the (x) [ * ], divided
by (y) [ * ]. For clarity, [ * ]. In making any allocation under this Section 4.2, Dynavax shall
[ * ].

     4.3 Manufacturing and Supply Team: No less than [ * ], the Parties shall establish a
manufacturing and supply team (the “MST”) of a minimum of [ * ] members, [ * ] of whom shall be
designated by Dynavax and [ * ] of whom shall be designated by Merck and its Affiliates. The MST
shall be a deemed to be a sub-team of the JDC (as defined in the License Agreement) and shall
substantially follow the procedures of the JDC with respect to meetings and decisions as set forth
in Section 2.4 of the License Agreement; provided, however, that the Parties acknowledge and agree
that the MST (and related procedures) shall (a) not have the

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

authority to bind a Party with respect to manufacturing and ordering except as provided in
this Agreement, and (b) in any event survive past either the dissolution of the JDC or the change
in function of the JDC pursuant to Section 2.4.4 of the License Agreement. Each Party shall
appoint its representatives to the MST by written notice to the other Party and may substitute,
from time to time, one or more of its MST representatives, at its sole discretion, effective upon
notice to the other Party. The MST representatives of each Party shall have appropriate
manufacturing, quality, regulatory and/or technical background, experience and knowledge. The MST
shall serve as forum for discussion and resolution of manufacturing, quality, and regulatory issues
contained in the BLA and supply chain issues, including, but not limited to scheduling production
runs, Delivery forecasts, other production planning, capacity review and metrics. Dynavax shall
provide the MST, from time to time, an update of the status, timing, and critical/key issues
related to the completion of the Facility and overview of the capacity at the Facility and Pilot
Facility compared to the utilization rate of each Facility or Pilot Facility, as the case may be,
in order for the MST to identify any potential supply issues of the Hepatitis Surface B Antigen
prior to their occurrence. Merck shall provide the MST, from time to time, an update of the
status, timing, and critical/key issues in connection with the formulation, filling and packaging
processes in connection with Manufacturing the Licensed Vaccines or Product, as the case may be.

5. REPRESENTATIONS, WARRANTIES AND COVENANTS

     5.1 Representations and Warranties:

          (a) Dynavax represents, warrants and covenants that (i) the Hepatitis B Surface Antigen,
Licensed Vaccine or Product, as the case may be, shall, at the time of arrival at the facility
designated by Merck, from time to time (A) meet the Specifications; and (B) have been Manufactured
in accordance with cGMPs; and (ii) no Hepatitis B Surface Antigen, Licensed Vaccine or Product
shall, at the time of Delivery, (A) be adulterated or misbranded within the meaning of the U.S.
Federal Food, Drug and Cosmetic Act (the “Act”) or (B) have been Manufactured at a Facility that
employs any debarred persons pursuant to sections 306(a) and (b) of the Act.

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

          (b) Dynavax represents, warrants and covenants that, as of the Effective Date: (i) to its
knowledge, the Manufacture of Hepatitis B Surface Antigen does not infringe the intellectual
property rights of any Third Party in the United States, other than those set forth on Schedule
5.1(b) hereto, or the European Market, as applicable; and (ii) Dynavax has not received written
notice from any Third Party of or has no knowledge of (A) any actual or threatened claim or
assertion that the Manufacture of Hepatitis B Surface Antigen infringes the intellectual property
rights of such Third Party; or (B) any actual or threatened claim or assertion that the use of the
Dynavax Manufacturing Technology as contemplated by this Agreement infringes any intellectual
property rights of such Third Party in the United States or the European Market, as applicable.

     5.2 Expiry Dating: Dynavax represents that [ * ] for Hepatitis B Surface Antigen. Dynavax
shall use its best efforts to extend such dating, such that, subject to Section 3.5, all Hepatitis
B Surface Antigen; Licensed Vaccine or Product, as the case may be, supplied by Dynavax under this
Agreement will have no less than [ * ] remaining when Delivered under Section 7.

     5.3 Warranty Claims:

          (a) Merck shall, within [ * ] after arrival at the facility designated by Merck, notify
Dynavax in writing of any Hepatitis B Surface Antigen, Licensed Vaccine or Product that fails to
meet the warranties set forth in Section 5.1(a)(i), and shall notify Dynavax in writing of all
other defects within [ * ] after its discovery of the defect.

          (b) Merck shall have the right to perform analytical testing of Hepatitis B Surface Antigen,
Licensed Vaccine or Product Delivered, including, without limitation, identification testing. In
the event that the tests performed by Merck indicate that a shipment of such Hepatitis B Surface
Antigen, Licensed Vaccine or Product does not meet the Specifications, Merck shall promptly notify
Dynavax and Dynavax shall, within [ * ] after its receipt of Merck’s notice, use its best efforts
to start re-test of such Hepatitis B Surface Antigen, Licensed Vaccine or Product, as the case may
be, and shall expeditiously complete such testing so that any additional testing by the testing
organization that may be required as provided herein-below may

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

be completed within [ * ] of Merck’s notice. If the test performed by Merck and the re-test
performed by Dynavax reach inconsistent results, the Parties shall, within [ * ] after the
completion of re-test by Dynavax, have Hepatitis B Surface Antigen, Licensed Vaccine or Product, as
the case may be, sample(s) mutually agreed upon by the Parties tested by a reputable Third Party
testing organization selected jointly by the Parties. The Parties agree that such dispute shall
not be submitted to arbitration in accordance with Section 12.6.1 of the License Agreement, and the
results of such laboratory testing shall be final and binding on the Parties. If the Hepatitis B
Surface Antigen, Licensed Vaccine or Product, as the case may be is determined to meet the
Specifications by such testing organization, then Merck shall bear the cost of the Third Party
testing and pay for such Hepatitis B Surface Antigen, Licensed Vaccine or Product, as the case may
be, to the extent the Manufacturing Price for such Hepatitis B Surface Antigen has not been paid,
or the price agreed to by the Parties in the case of the Licensed Vaccine or Product. If the
Hepatitis B Surface Antigen, Licensed Vaccine or Product, as the case may be, is determined not to
have met the Specifications, then Dynavax shall bear the cost of Third Party testing, and Dynavax
shall, within [ * ], (a) replace the quantity of the Hepatitis B Surface Antigen, Licensed Vaccine
or Product, as the case may be affected at no additional cost to Merck, or (b) in the event Dynavax
cannot replace the quantity of the Hepatitis B Surface Antigen within such [ * ] period, then at
Merck’s election either (i) be granted an additional period of time to be agreed to by the Parties
to replace the quantity of the Hepatitis B Surface Antigen or (ii) refund the Manufacturing Price
paid by Merck for such Hepatitis B Surface Antigen, or the price agreed to by the Parties in the
case of the Licensed Vaccine or Product, and shall in either case, reimburse Merck for any freight,
insurance, customs duties and other charges incurred by Merck in connection with Hepatitis B
Surface Antigen, Licensed Vaccine or Product, as the case may be, that is determined not to meet
the Specifications.

          (c) Notwithstanding the foregoing provisions of Section 5.3(b), in the event the testing
results of the independent Third Party testing organization are not available within [ * ]
after Dynavax’s receipt of Merck’s notice that the Hepatitis B Surface Antigen, Licensed Vaccine or
Product, as the case may be, failed to meet the Specifications, Dynavax shall, at Merck’s request,
Deliver additional Hepatitis B Surface Antigen Licensed, Vaccine or Product, as the case may be, to
Merck corresponding to the amount of Hepatitis B Surface Antigen,

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

Licensed Vaccine or Product, as the case may be, in dispute. Any Hepatitis B Surface Antigen,
Licensed Vaccine or Product, as the case may be, which is determined by the independent testing
organization to have failed to meet the Specifications shall be destroyed or returned to Dynavax,
at Dynavax’s cost. If the independent testing organization determines that Hepatitis B Surface
Antigen, Licensed Vaccine or Product, as the case may be, meets the Specifications, Merck shall pay
for the additional Hepatitis B Surface Antigen, Licensed Vaccine or Product, as the case may be, to
the extent the Manufacturing Price for such Hepatitis B Surface Antigen has not been paid, or the
price agreed to by the Parties in the case of the Licensed Vaccine or Product.

          (d) The Parties agree that the sole remedy for Merck for failure of the warranty under this
Section 5.3 shall be to either (i) be provided a refund of amounts previously paid, or (b) for
Dynavax promptly to manufacture and Deliver a replacement quantity that meets the Specifications.

     5.4 Disclaimers: The Parties intend and agree that no warranties exist beyond these stated in
this Agreement. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES
ANY REPRESENTATIONS AND GRANTS NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF
LAW, BY STATUTE OR OTHERWISE, AND SPECIFICALLY DISCLAIMS ANY OTHER WARRANTIES, WHETHER WRITTEN OR
ORAL, OR EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR USE OR PURPOSE. FURTHERMORE, EXCEPT FOR BREACH OF ITS OBLIGATIONS TO THE OTHER PARTY
UNDER SECTION 4.1 OF THE LICENSE AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER
PARTY, ITS AFFILIATES, LICENSEES OR SUBLICENSEES, OFFICERS, DIRECTORS, AGENTS, REPRESENTATIVES OR
EMPLOYEES FOR ANY LOST PROFITS, LOSS OF BUSINESS, LOSS OF CONTRACTS, DIMINISHED GOODWILL,
DIMINISHED REPUTATION, OR CONSEQUENTIAL, INDIRECT, INCIDENTAL, PUNITIVE, EXEMPLARY OR SPECIAL
DAMAGES OF THE OTHER PARTY ARISING FROM OR IN CONNECTION WITH THIS AGREEMENT, PROVIDED, HOWEVER,
THAT THIS SECTION 5.4 SHALL NOT LIMIT EITHER PARTY’S

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

INDEMNIFICATION OBLIGATIONS UNDER ARTICLE 11 OF THE LICENSE AGREEMENT.

6. QUALITY CONTROL

     6.1 Compliance with Specifications, cGMP, etc: Dynavax shall Manufacture Hepatitis B Surface
Antigen in accordance with the Specifications. Hepatitis B Surface Antigen supplied hereunder
shall be labelled in compliance with the drug listing, and Dynavax shall notify Merck and the FDA
of any change to the labelling that would affect the drug listing.

     6.2 Change Control: Dynavax shall provide Merck with prior written notice of, and obtain
Merck’s prior written consent to, any proposed changes in Specifications, subcontractors,
facilities (including the Facility or Pilot Facility), equipment, Materials (including source
thereof) and Manufacturing processes in accordance with the Quality Agreement, and shall bear all
costs and expenses associated with such changes, including without limitation, direct costs and
expenses incurred by Merck as a result of such changes. All direct costs and expenses for changes
requested by Merck shall be borne by Merck. In addition, Dynavax shall at its expense, (a) provide
Merck with all information required by Merck to amend the Authorizations due to the changes
implemented by Dynavax, and (b) continue to supply Merck with Hepatitis B Surface Antigen approved
under the existing Authorizations until such time as the changes are permitted under the applicable
Authorizations.

     6.3 Quality Control Testing: Dynavax shall perform quality control testing of all the batches
of Hepatitis B Surface Antigen manufactured by Dynavax under this Agreement and shall Deliver only
the batches which passed the quality control testing. Dynavax shall furnish Merck with signed
original certificates of quality control testing for each such batch of Hepatitis B Surface
Antigen. Dynavax shall complete and maintain intermediate bulk Hepatitis B Surface Antigen hold
time stability to support defined hold times for bulk Hepatitis B Surface Antigen and the resulting
Licensed Vaccine or Product. Dynavax shall release Hepatitis B Surface Antigen in accordance with
EU Qualified Person Guidelines.

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

     6.4 Facilities, Audit and Inspection: Dynavax shall Manufacture Hepatitis B Surface Antigen
at the Pilot Facility or Facility (once qualified), which may not be relocated without Merck’s
prior written consent. Merck shall be entitled, [ * ] with reasonable notice, to audit Dynavax’s
manufacturing documents and to inspect the Pilot Facility and/or Facility or both, and Dynavax
shall, at its sole cost and expense, implement corrective actions mutually agreed upon by the
Parties if Merck identifies and documents to Dynavax any noncompliance with cGMP in Dynavax’s
manufacturing process. Notwithstanding the foregoing, Merck shall have the right to conduct
additional audits to the extent necessary to address specific quality problems relating to the
Manufacture or in response to Regulatory Authority requirements. Dynavax shall also cause its
subcontractors and suppliers to permit Merck, at reasonable intervals with appropriate notice, to
audit such subcontractors and suppliers in the event Merck elects to do so, and shall cause such
subcontractors and suppliers to implement corrective actions mutually agreed upon by the Parties if
Merck identifies and documents any noncompliance with the cGMP with respect to the performance of
Dynavax’s subcontractors or suppliers. Dynavax shall advise Merck promptly of any Regulatory
Authority inspections and their outcomes, or any written or oral inquiries by such Regulatory
Authority. Dynavax shall provide Merck promptly with a summary of the inspection results and a
copy of any responses to such inspection results.

     6.5 Equipment Validation: Dynavax shall be responsible for operating and maintaining the
Facility, the Pilot Facility and equipment, validating the equipment (including without limitation
conducting installation, operational and performance qualification), production, cleaning,
packaging, process and any other appropriate steps performed at the Facility or Pilot Facility in
accordance with (a) cGMPs and (b) Dynavax’s standard operating procedures.

     6.6 Certificates of Analysis: Dynavax shall provide Merck with certificates of analysis
related to Hepatitis B Surface Antigen for each batch released for Delivery hereunder. These
certificates will document that each batch received by Merck conforms to the Specifications at the
time such Hepatitis B Surface Antigen is Delivered from the Facility or Pilot Facility, as the case
may be. These certificates shall include results of tests performed to meet the Specifications,
the date of Manufacture, expiry date for Hepatitis B Surface Antigen as

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

appropriate, and any other information to support final release of Licensed Vaccine or
Product. A copy of each certificate shall be included with each batch Delivered to Merck, and one
copy shall be delivered by electronic media contemporaneously to the Merck representative specified
in the applicable Firm Order.

     6.7 Test Methods: Dynavax shall supply Merck and any Regulatory Authority that conducts
testing with analytical test methods and other testing know-how, including method validation,
required to perform local testing as may be required by the Regulatory Authority in the Territory,
upon request, with appropriate quantities of reference standards relating to Hepatitis B Surface
Antigen, ISS 1018, and Licensed Vaccine (to the extent controlled by Dynavax) free of charge, in
order to facilitate Merck’s testing.

     6.8 Final Release: Merck shall be responsible for the final release of Product for sale in
the Territory in accordance with Merck’s standard practices and the BLA. Dynavax shall provide
Merck with copies of all relevant records as requested by Merck, including, but not limited to any
significant Manufacturing deviations or any out-of-Specification test result, significant changes
to manufacturing or testing, and copies of each batch record controlled by Dynavax with respect to
Manufacturing hereunder and necessary in order for Merck to comply with its responsibilities for
final release of Licensed Vaccine and/or Product. A complete listing of documents required for
final release will be listed in the Quality Agreement (as defined below).

     6.9 Avoidance of Cross-Contamination: Dynavax hereby confirms, as of the Effective Date, that
Dynavax is not producing, packaging, labelling, warehousing, quality control testing (including
in-process, release and stability testing), releasing or shipping any chemical entity classified as
penicillins or other beta-lactam antibiotics such as cephalosporins or carbapenems, steroids,
hormones, alkaloids, controlled substances, Live Agents, cytotoxic drug substances, pesticides,
herbicides, fungicides, or other toxic non-drug substances in the Facilities. The term “Live
Agent” means a product containing a living organism that causes infectious disease, including, but
not limited to, viruses, bacteria, rickettsia, fungi, and protozoa. In the event that Dynavax
intends, during the Term, to produce, package, label, warehouse, quality

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

control test (including in-process, release but excluding stability testing), release or ship
any chemical entity belonging to the classes of products listed above in the Facility or Pilot
Facility, Dynavax shall promptly notify Merck in writing of its intention to do so in order to
allow Merck to consider any potential questions of cross-contamination or regulatory requirements.
In the event Merck reasonably identifies a potential problem which may result in
cross-contamination with Product or Regulatory Authority requirements that would prohibit the
activity, Merck shall provide Dynavax with written notice and the Parties shall meet to seek to
resolve the problem in good faith; provided that, in no event shall Hepatitis B Surface Antigen
Manufactured at the Pilot Facility or Facility identified in Merck’s notice be Delivered to Merck
after the date of the notice until such problem has been resolved to the reasonable satisfaction of
both Parties.

     6.10 Annual Reviews: Dynavax shall implement and perform an annual review program for the
Manufacture of bulk Hepatitis B Surface Antigen mutually agreed by the Parties including, but not
limited to, a review of production-related and quality control testing, as more fully described in
the Quality Agreement.

     6.11 Quality Agreement: No later than [ * ] after the Effective Date, the Parties shall
negotiate in good faith and execute a quality agreement (the “Quality Agreement”) which shall (a)
supplement the terms of this Article 6, and (b) set forth in detail the quality assurance
arrangements and procedures with respect to Hepatitis B Surface Antigen and the cGMPs
responsibilities between the Parties.

7. DELIVERY

     7.1 Dynavax shall Deliver, or arrange for Delivery of, the Hepatitis B Surface Antigen
purchased by Merck hereunder in accordance with the Firm Order [ * ] (as the case may be, “Deliver”
or a “Delivery”). Merck shall [ * ] for (a) [ * ], and (b) [ * ].

8. MANUFACTURING PRICE; PAYMENT PROCEDURE

     8.1 Manufacturing Price: The manufacturing price of the Hepatitis B Surface Antigen shall be
[ * ] (the “Initial Pricing”); and [ * ] (the “Steady State Pricing”, together with

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

the Initial Pricing, the “Manufacturing Fee”). On an ongoing basis but not less than once per
year, the Parties agree to hold good faith discussions to review ways in which [ * ].

     8.2 Adjustment to Steady State Pricing: The Steady State Pricing shall be subject to an
adjustment commencing [ * ] of the Major Market Launch equal to the increase in the [ * ];
provided, however, that in no event shall the annual increase be greater than [ * ] when compared
to the previous years Steady State Price; provided further that if the increase in such index for
the immediately preceding anniversary exceeds [ * ].

     8.3 Invoice and Payment: Dynavax shall invoice Merck for each shipment of Hepatitis B Surface
Antigen upon Delivery in accordance with this Section 8.3. Each Complete Invoice shall be sent via
facsimile or similar electronic means, followed by an original copy forwarded via first class mail.
Merck shall pay in full for each Complete Invoice within [ * ] from the date of Merck’s receipt of
the Complete Invoice.

     A “Complete Invoice” is an invoice that contains the following information and any other
information specifically requested by Merck prior to Delivery: (a) name of Dynavax and “Remit to”
wire account and address, (b) Merck’s purchase order number, (c) invoice number, (d) invoice date,
(e) description of goods and services, (f) total invoice amount with miscellaneous charges listed
separately and (g) payment terms consistent with the terms of this Agreement.

     8.4 Taxes: To the extent that Hepatitis B Surface Antigen supplied hereunder is subject to
any sales, use, value added or any other taxes, payment of said taxes, if any, is Merck’s sole
responsibility; provided that Dynavax shall be liable for any and all taxes on any and all income
it receives from Merck under this Agreement.

9. SECURITY OF SUPPLY

     The Parties shall undertake the following arrangements to ensure continued supply of Hepatitis
B Surface Antigen.

     9.1 Master Cell Banks. Dynavax shall [ * ] (each, a “Master Cell Bank”, together the “Master
Cell Banks”) [ * ].

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

     9.2 Backup Source. Following [ * ], in order to [ * ], Dynavax agrees to maintain [ * ]
(the “Pilot Facility”) [ * ].

10. TECHNOLOGY TRANSFER

     10.1 Supply Failure Technology Transfer: Dynavax shall promptly notify Merck in writing of
the reasons for a Supply Failure, any proposed remedial measures with regard thereto and the date
such Supply Failure is expected to end. If such Supply Failure will end [ * ], the Parties shall
continue the supply relationship. If Merck believes that the Supply Failure will not end in such
period, the Parties shall submit the matter for dispute resolution pursuant to Section 12.6 of the
License Agreement; provided, however, [ * ].

     10.2 Process Technology Transfer: As soon as practicable following the Effective Date, but no
later than [ * ] from the Effective Date, [ * ].

11. CUSTOMER COMPLAINTS AND RECALL

     11.1 Customer Complaints: Merck shall be responsible for and take control over responding to
any complaint or claim relating to the Product which is distributed and sold by Merck or its
Related Parties in the Territory; provided however that when any such complaint or claim is
reasonably suspected to be due to Dynavax’s Manufacturing of Hepatitis B Surface Antigen, Merck
shall so notify Dynavax and Dynavax shall promptly investigate its Manufacturing and report to
Merck the result of such investigation, including the rectifying steps to be taken if any defect is
found in the Manufacturing or the quality control, and shall implement such rectifying steps at
Dynavax’s sole cost and expense. In any event, Merck shall keep Dynavax informed of any complaints
or claims relating to the Product that might reasonably be related to the Manufacture of the
Hepatitis B Surface Antigen.

     11.2 Recalls: Merck shall have the right to make decisions to recall Product in the Territory
and shall promptly notify Dynavax after Merck makes such decision. In the event that a recall is
caused by (a) breach of any of the representations, warranties and covenants set forth in Sections
5.1 and 5.2 of this Agreement, or (b) Dynavax’s negligence or willful misconduct, Dynavax shall
reimburse Merck for (i) the Manufacturing Price paid by Merck for Hepatitis B

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

Surface Antigen incorporated in the recalled Product, (ii) all costs associated with shipping
and distributing the recalled Product, and (iii) all expenses reasonably incurred in connection
with such recall.

12. TERM AND TERMINATION

     12.1 Term: This Agreement shall become effective on the Effective Date and shall continue in
full force and effect for [ * ], unless otherwise terminated in accordance with this Agreement or
the License Agreement (the “Term”).

     12.2 Termination by Either Party for Uncured Material Breach: This Agreement may be
terminated by written notice given by either Party for material breach by the other Party,
effective upon notice following the expiry of the cure periods described in the License Agreement,
as set forth in Section 10.3.1 of the License Agreement, or if the BLA relating to the Licensed
Vaccine or Product is deactivated or withdrawn by any Regulatory Authority in the US or European
Market, provided that such termination shall only be effective if the deactivation or withdrawal
remains in effect [ * ] of such notice.

     12.3 Termination by Merck: This Agreement may be terminated by written notice given by Merck
to Dynavax, effective upon notice following the expiry of the cure periods described below, as
follows:

          (a) if the License Agreement terminates for other than a breach by Merck; or

          (b) if any required license (including the commercial manufacturing license issued in
Germany), permit or certificate of Dynavax to Manufacture Hepatitis B Surface Antigen is not
approved or not issued or is deactivated or withdrawn by any Regulatory Authority in the US or
European Market and such non-approval, non-issue, deactivation or withdrawal would inevitably cause
Dynavax to be unable to meet its supply obligations hereunder; provided, that such termination
shall only be effective if remaining uncured [ * ] after receipt of such notice.

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

     12.4 Consequences of Certain Terminations by Merck: In the event that this Agreement is
terminated by Merck in accordance with Sections 12.2 or 12.3 above, Merck shall, at its option,
either (a) have the right (but not the obligation) within [ * ] of termination to purchase all
Hepatitis B Surface Antigen already Manufactured by Dynavax pursuant to Firm Orders at the
Manufacturing Price and (i) to sell the resulting Product in the Territory, and (ii)receive a
technology transfer for the Hepatitis B Surface Antigen pursuant to Section 10.1; [ * ]; or (b)
require Dynavax to purchase at the Manufacturing Price all Hepatitis B Surface Antigen inventory in
Merck’s possession, along with the cost of Materials reasonably incurred by Merck to further
process the Hepatitis B Surface Antigen into Product. In such event, all Firm Orders shall be
cancelled and Merck and Dynavax shall have no further liability with respect thereto.

     12.5 Consequences of Certain Terminations by Dynavax and by Merck for Convenience: In the
event that this Agreement is terminated by Dynavax in accordance with Section 12.2 above or by
Merck in accordance with Section 10.2.1 of the License Agreement, Dynavax shall have the right to
(a) sell to Merck (and Merck shall have the obligation to purchase) (i) all Hepatitis B Surface
Antigen already Manufactured by Dynavax pursuant to Firm Orders at the Manufacturing Price and (ii)
to the extent that Dynavax shall not exercise it rights pursuant to Section 10.4.3 of the License
Agreement, all Materials and work-in-process then owned by Dynavax or for which Dyanvax has
non-cancellable commitments which cannot be diverted to Dynavax’s other uses; and (b) (i) either
cancel all Firm Orders or require Merck to purchase all Hepatitis B Surface Antigen to be
Manufactured pursuant to Firm Orders and (ii) to the extent that Dynavax shall not exercise its
rights pursuant to Section 10.4.3 of the License Agreement, all Materials and work-in-process then
owned by Dynavax or for which Dyanvax has non-cancellable commitments which cannot be diverted to
Dynavax’s other uses.

     12.6 Consequences of Natural Expiration: Upon the expiration of the Term, other than for
termination under Sections 12.2 or 12.3, Dynavax shall grant Merck a technology transfer for the
Hepatitis B Surface Antigen pursuant to Section 10.1; [ * ]. [ * ] prior to the expiration of this
Agreement, Dynavax shall provide copies of all existing Manufacturing

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

Technology to Merck in order to allow Merck to commence the process of performing the
technology transfer outlined in Section 10.1.

     12.7 Accrued Rights: Unless otherwise agreed in this Agreement, termination of this Agreement
shall not relieve the Parties of any liability or obligation which accrued under this Agreement
prior to the termination. Upon the termination under Section 12.2, outstanding debts due to the
other Party shall become due and payable immediately irrespective of any payment terms previously
agreed upon by the Parties.

     12.8 Other Remedies: Termination of this Agreement shall not preclude either Party from
pursuing all rights and remedies it may have under this Agreement or at law or in equity with
respect to any breach of this Agreement.

13. MANUFACTURING RECORDS

     13.1 All Manufacturing records (other than the Master Cell Bank and Working Cell Bank records,
which shall be retained indefinitely) shall be retained by Dynavax for a period of [ * ];
provided that all Manufacturing records associated with validation batches shall be retained by
Dynavax throughout the term of this Agreement. Dynavax shall provide Merck with complete and
accurate copies of the appropriate documents for each production batch, upon Merck’s request.
Dynavax shall notify Merck of any intention to destroy Manufacturing records after the applicable
retention period set forth above and shall afford Merck the opportunity to obtain such records.
For purposes of this Section 13.1, “Working Cell Bank” shall mean a cell bank prepared from
aliquots of a homogeneous suspension of cells obtained from culturing the Master Cell Bank.

14. INSURANCE

     14.1 Dynavax shall procure and maintain, at it sole cost and expense, with a carrier rated
“A-” or higher by A.M. Best, (a) comprehensive general liability and/or umbrella insurance, with
coverage limits of not less than [ * ], and (b) property/casualty insurance on all material
property owned, leased or in the possession of Dynavax, including, but not limited to the Facility
and Pilot Facility, with coverage limits of not less than replacement cost. In addition

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

to the foregoing, Dynavax shall maintain product liability insurance against claims arising
from the Manufacture, distribution and use of Hepatitis B Surface Antigen, Licensed Vaccine or
Product (to the extent provided by Dynavax to Merck herein), with coverage limits of not less than
[ * ]. Dynavax shall maintain such policies at all times during the Term (and any extension
thereof), and shall provide such coverage for no less than [ * ]. All Dynavax insurance required
under this Section 14.1 shall name Merck as an additional insured. Dynavax shall provide Merck
with certificates of insurance with respect to this Section 14.1 promptly following the Effective
Date. Dynavax shall immediately notify Merck or any changes in the status of the insurance
specified in this Article 14, and shall from time to time thereafter, at Merck’s reasonable
request, provide to Merck with a certificate of insurance attesting that such insurance remains in
full force and effect. Maintenance by Dynavax of the insurance required by this Section 14.1 shall
not relieve Dynavax of any responsibility for liability in excess of insurance limits or otherwise.

     14.2 Merck shall procure and maintain or otherwise self-insure at the levels corresponding to
those provided for Dynavax in Section 14.1, and shall provide coverage, if under a policy of
insurance, for no less than [ * ]. Maintenance by Merck of the insurance or self-insurance
required by this Section 14.2 shall not relieve Merck of any responsibility for liability in excess
of insurance limits or otherwise.

15. INTEGRATION; SURVIVAL

     15.1 All the following provisions of the License Agreement are hereby incorporated by
reference for all purposes herein: Articles 4, 11 and 12.

     15.2 The following provisions shall survive any expiration or termination of this Agreement:
Articles 1, 4, 5, 6, 7, 8, 9, 10, 12, 13, 14 and 15; and Sections 2.1, 2.2, 11.4, 11.5, 11.6, 11.7,
and 11.8 of this Agreement; and Articles 11 and 12 of the License Agreement. Any and all such
provisions shall remain in full force and effect in accordance with their terms.

     15.3 In the event of any conflicts between the terms of this Agreement and the License
Agreement, the terms of this Agreement shall prevail; provided that in no event shall any term of

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

this Agreement be deemed to amend or modify Article 2, Article 3, Article 5 and Article 9 of
the License Agreement.

16. U.N. CONVENTION ON INTERNATIONAL SALE OF GOODS

     16.1 Notwithstanding any provision contained herein to the contrary, the Parties hereby
expressly agree that the U.N. Convention on International Sale of Goods shall not apply.

17. COUNTERPARTS

     17.1 This Agreement may be executed in identical duplicate copies exchanged by telefacsimile
transmission or by electronic mail in .pdf format with acknowledgment of receipt (other than by
automated response) by the receiving Party. The Parties agree to execute two (2) identical
original copies of this Agreement after exchanging signed telefacsimile/electronic versions. Each
identical counterpart shall be deemed an original, but all of which together shall constitute one
and the same instrument.

     In Witness Whereof, the Parties hereto have caused this Agreement to be executed by
their duly authorized representatives as of the Effective Date.

Merck & Co., Inc.

By: /s/ Richard T. Clark                                        

Name: Richard T. Clark

Title: Chairman, President and Chief Executive Officer

Dynavax Technologies Corporation

By: /s/ Dino Dina                                                  

Name: Dino Dina, M.D.

Title: President and Chief Executive Officer

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

Exhibit A

[ * ]

     [ * ].

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	[ * ]

	 	[ * ]
	 	[ * ]
	[ * ]

	 	[ * ]
	 	[ * ]

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

Exhibit B

Price

[ * ]

[ * ]

[ * ]

[ * ].

[ * ]

[ * ].

[ * ]

[ * ]

	 	 	 	 	 	 	 	 	 
	 

	 	[ * ]
	 	[ * ]
	 	[ * ]	 	 
	[ * ]

	 	[ * ]
	 	 	 	[ * ]
	 	[ * ] [ * ]

[ * ]

	 	 	 	 	 	 	 	 	 
	 

	 	[ * ]
	 	[ * ]
	 	[ * ]	 	 
	[ * ]

	 	[ * ]
	 	 	 	[ * ]
	 	[ * ] [ * ]

[ * ].

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

SCHEDULE 5.1(b)

[ * ]

[ * ] = Certain confidential information contained in this document,
marked by brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00138-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00138-of-00352.parquet"}]]