Document:

Exhibit

    

Exhibit 10.48

DARDEN RESTAURANTS, INC. 
ANNUAL INCENTIVE PLAN 
Effective as of June 1, 2020
1.    Purpose.  The purposes of the Plan are to (a) provide incentives to a select group of employees of the Company and its Subsidiaries to enhance efficiency and profitability by providing such employees with an opportunity to earn financial rewards in the form of annual incentive payments based on achieving certain performance objectives, and (b) promote the interests of the Company and its Subsidiaries and its stockholders by strengthening the ability of the Company and its Subsidiaries to attract and retain key members of the executive management team and key employees.
2.    Definitions.  Where the context of the Plan permits, words in the masculine gender shall include the feminine gender, the plural form of a word shall include the singular form, and the singular form of a word shall include the plural form.  Unless the context clearly indicates otherwise, the following terms shall have the following meanings:
(a)    Administrator means: (i) with respect to Participants who are not Section 16 Officers, the Chief Executive Officer, or (ii) with respect to Participants who are Section 16 Officers other than the Chief Executive Officer, the Compensation Committee of the Board, or (iii) with respect to the Chief Executive Officer of the Company, the independent directors on the Board. 
(b)    Award Period means the Company’s fiscal year.
(c)    Base Salary means the annual base salary each Participant actually earns during the Award Period as an Eligible Employee (including any adjustments to such annual base salary during the Award Period), excluding, without limitation, incentives, bonuses, overtime pay, severance pay or other non-eligible post-employment pay, reimbursement of relocation and other expenses, auto allowances and employee and fringe benefits; provided, however, that the Base Salary of certain executives of non-U.S. Subsidiaries may include additional forms of remuneration determined by the Administrator.
(d)    Board means the board of directors of the Company. 
(e)    Company means Darden Restaurants, Inc. or any successor thereto.
(f)    Disability means a Participant’s termination from the Company or any Subsidiary due to an illness or injury which is expected to be permanent in nature and which prevents him or her from performing the material duties required by his or her regular occupation. 
(g)    Eligible Employee means an employee of the Company or a Subsidiary who is designated in writing as an “Eligible Employee” by the Administrator.  Only an individual who is a common law employee may be designated as an Eligible Employee under the Plan.
(h)    Incentive Award means the incentive compensation award made to an Eligible Employee under the Plan.
(i)    Participant means an Eligible Employee who is notified of eligibility for an Incentive Award pursuant to Section 3. 

(j)    Performance Objectives means the performance objectives for the Award Period established by the Administrator pursuant to Section 4(b) of the Plan.
(k)    Plan means this Darden Annual Incentive Plan.
(l)    Retirement means a Participant’s termination of employment with the Company and its Subsidiaries, other than for Cause (as defined under the Darden Restaurants, Inc. 2015 Omnibus Incentive Plan), on or after having attained at least age 55 with ten years of service with the Company or a Subsidiary (pursuant to the method for crediting service under the Darden Savings Plan) or with age and service with the Company or a Subsidiary (pursuant to the method for crediting service under the Darden Savings Plan) equal to or greater than 75 at the time of Retirement.
(m)    Section 16 Officer means any officer of the Company whom the Board has determined is subject to the reporting requirements of Section 16 of the Securities Exchange Act of 1934, as amended. 
(n)    Section 409A means Section 409A of the U. S. Internal Revenue Code and the applicable guidance issued thereunder. 
(o)    Subsidiary means any corporation (other than the Company) or non-corporate entity of which the Company owns, directly or indirectly, at least 50% of the total combined voting power or in which it has at least a 50% economic interest.  In addition, any other entity may be designated by the Administrator as a Subsidiary, provided that such entity could be considered as a subsidiary according to generally accepted accounting principles.
(p)    Target Award Opportunity means the amount of the Incentive Award expressed as a percentage of a Participant’s Base Salary or an amount that a Participant will be eligible to receive if the relevant Performance Objectives have been attained at designated target performance levels.
3.    Eligibility and Participation. 
(a)    Designation of Eligible Employees.  The Administrator shall determine the Eligible Employees selected for participation in the Plan for each Award Period.  The Administrator shall make such determination prior to the beginning of the Award Period or as soon as practicable thereafter.  An Eligible Employee shall not be entitled to participate in the Plan for an Award Period solely because such Eligible Employee was selected to participate in the Plan for any prior Award Period.
(b)    Newly Eligible Employees.  An individual who is hired by the Company or a Subsidiary into a position designated by the Administrator as eligible to participate in the Plan during an Award Period shall be eligible to receive an Incentive Award for such period prorated on a daily basis based on the Eligible Employee’s number of days of employed by the Company or a Subsidiary over the number of days in such Award Period. 
(c)    Change of Employment.  Unless otherwise determined by the Administrator, the following rules shall apply in the event of a change of employment during an Award Period: 
(i)     An employee whose position is changed into a position designated by the Administrator as an Eligible Employee shall be eligible to receive an Incentive Award prorated for the remaining portion of the Award Period following such change in employment.

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(ii)     A Participant whose position with the Company or a Subsidiary changes during an Award Period such that he would no longer be considered an Eligible Employee shall remain eligible to receive payment under an Incentive Award under the Plan only with respect to such Award Period that the Participant provided services as an Eligible Employee.
(iii)    A Participant whose position with the Company or a Subsidiary is transferred between brands during an Award Period in a manner such that he is considered an Eligible Employee for multiple brands during such Award Period shall be eligible to receive an Incentive Award prorated based on days spent in an eligible position in each brand.  Notwithstanding the foregoing, if a Participant transfers employment between brands at any time during the Award Period beginning on June 1, 2020, the amount payable under the Plan with respect to such period shall remain the same.
(d)    Paid Leaves of Absence.  A Participant on a Company-paid leave of absence during an Award Period will remain eligible for an Incentive Award while on paid time off or short-term disability. A Participant who begins an unpaid leave of absence or long-term disability during an Award Period will not remain an Eligible Employee, and his or her Incentive Award will be prorated and paid based on the days spent as an Eligible Employee.
(e)    Terminations of Employment.  Any Participant who terminates from the Company or a Subsidiary during an Award Period for any reason other than Retirement, death, or Disability will forfeit his or her entire Incentive Award.  Participants who terminate during an Award Period for Retirement, death, or Disability will receive a prorated award.  In addition, any Participant whose employment is terminated for “Cause” (as defined under the Darden Restaurants, Inc. 2015 Omnibus Incentive Plan) after the end of an Award Period will forfeit his or her entire Incentive Award.
4.    Incentive Awards.
(a)    Target Award Opportunities.  Each Award Period, the Administrator shall establish Target Award Opportunities that will apply to Participants for such Award Period, either by individual or by position.  In the event that a Participant is promoted during the Award Period, unless otherwise determined by the Administrator, the Participant shall be eligible to receive an Incentive Award under the Plan equal to (i) the Target Award Opportunity prior to such promotion multiplied by the Participant’s Base Salary prior to such promotion (or, in the case of a Target Award Opportunity that is expressed as dollar amount, the Target Award Opportunity prior to such promotion multiplied by a fraction, the number of days employed during such Award Period prior to the promotion divided by 365); plus (ii) the Target Award Opportunity following such promotion multiplied by the Participant’s Base Salary following such promotion (or, in the case of a Target Award Opportunity that is expressed as dollar amount, the Target Award Opportunity on and after such promotion multiplied by a fraction, the number of days employed during such Award Period on and after the promotion divided by 365).
(b)    Performance Objectives.  The payment of Incentive Awards to Participants under the Plan shall be determined by the extent to which designated Performance Objectives have been attained with respect to an Award Period.  For the Award Period that corresponds to the Company’s 2021 fiscal year, the Incentive Awards shall be determined according to the Performance Objectives outlined in Exhibit A.  With respect to any later Award Period, the Administrator will establish specific Performance Objectives for the payment of Incentive Awards within the first 90 days of that Award Period.  The Performance Objectives shall consist of one or more subjective and/or objective business criteria determined and applied by the Administrator in its sole discretion, including, but not limited to, any of the performance criteria set forth in 

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the Darden Restaurants, Inc. 2015 Omnibus Incentive Plan as of the date hereof, or as amended from time to time.
The Administrator shall specify, for each position and/or location of Participants, or for individual Participants where appropriate, the categories of Performance Objectives, the target, minimum, and maximum levels of performance for each Performance Objective, where appropriate, and the relative weight to be attributed to each Performance Objective.  The Administrator may select one or more Performance Objectives and may apply those Performance Objectives on a corporate-wide, brand-wide, division/business segment basis, geographic or other basis.  The Administrator may also designate certain qualitative individual Performance Objectives with respect to any Participant.  
(c)    Notification of Incentive Award.  As soon as reasonably practicable after the determination of Eligible Employees and the establishment of Target Award Opportunities and Performance Objectives are made, the Company shall notify, in writing, Participants of their selection for participation in the Plan for such Award Period, and of the manner in which their Incentive Awards may be earned, including the Target Award Opportunity and Performance Objectives.  The Administrator shall determine the manner of providing written notice to Participants in its sole discretion, and the method of written notice need not be the same for each Participant.
(d)    Evaluation of Performance.  As soon as practicable following the end of each Award Period, the Administrator shall evaluate the extent to which the Performance Objectives have been met for the Award Period.  The Administrator may , in its sole discretion,  provide for the exclusion of the impact of an event or occurrence which the Committee determines should appropriately be excluded, including but not limited to: (a) restructurings, discontinued operations, extraordinary items, and other unusual, infrequently occurring or non-recurring charges or events, including the impact of COVID-19, (b) asset write-downs, (c) litigation or claim judgments or settlements, (d) acquisitions or divestitures, (e) reorganization or change in the corporate structure or capital structure of the Company, (f) an event either not directly related to the operations of the Company, Subsidiary, division, business segment or business unit or not within the reasonable control of management, (g) foreign exchange gains and losses, (h) a change in the fiscal year of the Company, (i) the refinancing or repurchase of bank loans or debt securities, (j) unbudgeted capital expenditures, (k) the issuance or repurchase of equity securities and other changes in the number of outstanding shares, (l) any business interruption event, (m) the cumulative effects of tax or accounting changes in accordance with U.S. generally accepted accounting principles, or (n) the effect of changes in other laws or regulatory rules affecting reported results.
(e)    Vesting and Payment of Incentive Awards.  Except as set forth in subsection (f) below or otherwise determined by the Administrator, a Participant must be employed by the Company or a Subsidiary and in good standing on the last day of the Award Period to receive payment of an Incentive Award.  Incentive Awards that have become vested shall be payable to Participants within two and one-half months after the end of the Award Period for which payment is being made, except to the extent a Participant defers all or a portion of an Incentive Award to a later date pursuant to a deferred compensation arrangement sponsored by the Company or a Subsidiary made in accordance with Section 409A.  A Participant’s Incentive Award shall be paid in his or her payroll currency, unless otherwise determined in the Administrator’s sole discretion.  
(f)    Payment of Incentive Awards Following Certain Terminations of Employment.  In the event a Participant’s employment with the Company or a Subsidiary is terminated during the Award Period due to the Participant’s death, Disability, or Retirement, the Participant’s (or the Participant’s estate, as applicable) Incentive Award will be paid at the same time as Incentive Awards are paid to actively employed Participants, generally, for the Award Period, based on the satisfaction of the applicable Performance 

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Objectives.  The Administrator may, in its sole discretion, for any or no reason, waive the requirement to be employed on the last day of an Award Period to receive payment under an Incentive Award in the event of a Participant’s termination employment with the Company and its Subsidiaries other than for  Cause (as defined in the Darden Restaurants,  Inc. 2015 Omnibus Incentive Plan), either in whole or in part, or a Change in Control (as defined in the Darden Restaurants, Inc. 2015 Omnibus Incentive Plan) on such terms and conditions as it sees fit, including but not limited to signing of a release. 
(g)    Administrator Discretion.  The Administrator may exercise discretion in good faith to adjust the amount of any payment under any Incentive Award that would otherwise be made to any Participant or to decide that no payment shall be made consistent with the purposes of the Plan and the business results of the Company and its Subsidiaries. 
(h)    Incentive Award Not Included for Purposes of Determining Other Compensation.  Payments and other benefits received by a Participant under an Incentive Award made pursuant to the Plan generally shall not be deemed a part of a Participant’s compensation for purposes of determining the amount of a Participant’s benefits under any other employee benefit plans or arrangements provided by the Company or a Subsidiary, unless the Administrator expressly provides otherwise in writing or unless expressly provided under such plan.  
(i)    Nonduplication of Incentive Award.  In the event that, pursuant to a Company-sponsored severance plan or agreement, or other written agreement, a Participant would be entitled to receive an amount upon termination of employment that represents such Participant’s annual incentive compensation for the year of such Participant’s termination of employment, the Participant shall receive an amount under such plan or agreement and shall not be entitled to an Incentive Award under this Plan for the Award Period in which such Participant’s termination of employment occurred.
5.    Administration.
(a)    Administrator’s Authority.  The Plan shall be administered by the Administrator, which shall have the sole discretion and authority to interpret, construe and administer the Plan in accordance with the provisions herein set forth and to resolve any issues arising out of, relating to, or resulting from its administration and operation.  The Administrator’s interpretation and construction hereof, and actions hereunder, or the amount or recipient of the payments to be made herefrom, shall be binding and conclusive on all persons for all purposes, subject to the requirements of any applicable local regulation and/or specific contractual obligations. 
(b)    Non-US Employees.  In the event any Incentive Award under this Plan is granted to an employee who is employed or providing services outside the United States and who is not compensated from a payroll maintained in the United States, the Administrator may, in its sole discretion: (i) modify the provisions of the Plan as they pertain to such individuals to comply with applicable law, regulation or accounting rules consistent with the purposes of the Plan; and (ii) cause the Company to enter into an internal accounting transaction with any local branch or affiliate consistent with internal accounting/audit protocols and pursuant to which such branch or affiliate will reimburse the Company for the cost of such incentives.  
(c)    Delegation of Authority.  The Administrator may delegate to any other employee of the Company or a Subsidiary some or all of the Administrator’s duties and authorities under the Plan with respect to any individual Participant or a class of Participants, in which case such person shall be considered the Administrator for all purposes under the Plan.  The Administrator may delegate to any corporation, committee or individual, regardless of whether the individual is an employee of the Company or a Subsidiary, any administrative duties necessary to implement the Plan.  

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6.    Amendment or Termination.  The Plan may be amended or terminated at any time and for any reason by the Administrator.  The Plan is specifically designed to guide the Company in granting Incentive Awards and shall not create any contractual right of any employee to any Incentive Award prior to the payment of such award.
7.    Nontransferability.  No Incentive Award payable hereunder, nor any right to receive any future Incentive Award hereunder, may be assigned, alienated, sold, transferred, anticipated, pledged, encumbered, or subjected to any charge or legal process, and if any such attempt is made, or a person eligible for any Incentive Award hereunder becomes bankrupt, the Incentive Award under the Plan which would otherwise be payable with respect to such person may be terminated by the Administrator which, in its sole discretion, may cause the same to be held or applied for the benefit of one or more of the dependents of such person or make any other disposition of such award that it deems appropriate.
8.    Withholding/Rights of Offset/Recoupment.  The Company shall have the right to deduct and withhold from all Incentive Awards all federal, state, and local taxes as may be required by law.  In addition to the foregoing:
(a)    Offsets.  The Company shall have the right to offset against the amount of any Incentive Award which would otherwise be payable hereunder, the amount of any debt, judgment, claim, expense or other obligation owed at such time by the Participant to the Company or any Subsidiaries.  By accepting an Incentive Award, a Participant consents to and authorizes the Company to deduct any amounts owed to the Company under this Section from any amounts payable by the Company for any reason.  This right of offset is in addition to any other remedies the Company may have.
(b)    Wrongful Conduct.  If a Participant engages in any activity inimical, contrary or harmful to the interests of the Company or any Subsidiary, including but not limited to: (1) without the prior written consent of the Company, counseling or becoming employed by, or otherwise engaging or participating in, or performing consulting services for, any Competing Business (regardless of whether the Participant receives any compensation of any kind), where “Competing Business” means any business that competes with any business that the Company or its Subsidiaries conducted as of the date the Participant’s employment terminates with the Company and its Subsidiaries, (2) violating the Company’s written policies regarding employee conduct, (3) without the prior written consent of the Company, inducing or attempting to induce any employee of the Company or its Subsidiaries to leave the employ of the Company or its Subsidiaries, interfering with the relationship between the Company or its Subsidiaries and any employee or prospective employee thereof, or hiring or causing the hiring of any person who is an employee of the Company or its Subsidiaries, (4) without the prior written consent of the Company, calling on, soliciting or servicing any customer or vendor of the Company or its Subsidiaries in order to induce or attempt to induce such person or entity to cease or reduce doing business with the Company or its Subsidiaries or interfering with the relationship between the Company or its Subsidiaries and any such customer, (5) disclosing or misusing any confidential information regarding the Company or its Subsidiaries, (6) participating in any activity not approved by the Board which could reasonably be foreseen as contributing to or resulting in a Change in Control of the Company, or (7) disparaging, orally or in writing, the business, products, policies, decisions, directors, officers or employees of the Company or its Subsidiaries to any person (all such activities described in (1)-(7) above collectively referred to as “wrongful conduct”), then, to the extent permitted by applicable law, the Participant shall pay to the Company in cash an indemnity amounting to the amount paid with respect to an Incentive Award within the 12-month period immediately preceding such wrongful conduct.  Notwithstanding anything in this Plan to the contrary, a Participant shall not be restricted from: (i) disclosing information that is required to be disclosed by law, court order or other valid and appropriate legal process; provided, however, that in the event such disclosure is required by law, the Participant shall provide the 

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Company with prompt notice of such requirement so that the Company may seek an appropriate protective order prior to any such required disclosure by such Participant; or (ii) reporting possible violations of laws of the Participant’s country or of United States federal, state or local law or regulation to any governmental agency or entity, or from making other disclosures that are protected under the whistleblower provisions of the laws of the Participant’s country or of United States federal, state or local law or regulation.  In the event of (ii), the Participant shall not need the prior authorization of the Company to make any such reports or disclosures and shall not be required to notify the Company that the Participant has made such reports or disclosures.
(c)    Other Recoupment Policies.  Any incentive compensation paid to a Participant under the Plan or any other incentive compensation plan maintained by the Company shall be subject to policies established and amended from time to time by the Company from time to time regarding the recovery of erroneously-awarded compensation from current and former employees, including but not limited to the Company’s clawback policy as of the date hereof.
(d)    Clawback  Notwithstanding any provision to the contrary, if the Administrator determines that it is required by law to apply a “clawback” or “recoupment” provision to an Incentive Award  pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act or otherwise, then such clawback or recoupment provision shall automatically apply to the Incentive Award.
9.    Section 409A.  Where applicable, Incentive Awards paid under this Plan are intended to be “short-term deferrals” within the meaning of Section 409A.  To the extent any amounts payable hereunder are deferred compensation within the meaning of Section 409A, the terms of this Plan shall be applied consistent with the requirements of Section 409A.  
10.    Claim to Incentive Awards and Employment Rights.  Nothing in this Plan shall require the Company or any Subsidiaries to segregate or set aside any funds or other property for purposes of paying all or any portion of an Incentive Award hereunder.  No Participant shall have any right, title or interest in or to any Incentive Award hereunder prior to the actual payment thereof, nor to any property of the Company or any Subsidiaries.  Neither the adoption of the Plan nor the continued operation thereof shall confer upon any employee any right to continue in the employ of the Company or any Subsidiaries or shall in any way affect the right and power of the Company or any Subsidiaries to dismiss or otherwise terminate the employment of any employee at any time for any reason, with or without cause (to the extent a termination without cause is permissible under local regulations).
11.    Construction.  Titles and headings of sections in the Plan are for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.  In the event any provision of the Plan shall be held to be illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if such illegal or invalid provisions had never been contained in the Plan.
12.    Governing Law.  All questions pertaining to the construction, validity and effect of the Plan shall be determined in accordance with the laws of the State of Florida without regard to any conflict of laws principles.
13.    Severability.  In the event any provision of this Plan shall be held to be illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if such illegal or invalid provision(s) had never been contained in the Plan.

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IN WITNESS WHEREOF, the following duly authorized officer has caused the adoption of the Darden Restaurants, Inc. Annual Incentive Plan effective as of June 1, 2020 as per authorization of the Compensation Committee on June 23, 2020.

DARDEN RESTAURANTS, INC.

By:    /s/ Eugene I. Lee, Jr.                    Dated:   August 25, 2020 
Name:    Eugene I. Lee, Jr.    
Title:    President and Chief Executive Officer

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Exhibit A
Performance Objectives for the Award Period
Beginning June 1, 2020

The Performance Objectives for Incentive Awards granted to Participants with respect to the Award Period beginning on June 1, 2020 (“FY ’21”) shall be the performance of the Company on a consolidated basis in navigating the pandemic, ramping up its operations, positioning itself for future growth, and the Company’s financial performance, each as assessed by the Compensation Committee on such basis and in such manner as it determines to be appropriate in its sole discretion.  The Administrator may, but is not required, to establish rules as to how it will measure performance with respect to one or more of these Performance Objectives during FY ’21 in its sole discretion. 

9gtbp_ex101

 

Exhibit 10.1

 

Master Services Agreement

 

This
Master Services Agreement (this “Agreement”), effective
October 5, 2020 (the “Effective Date”), is
between GT Biopharma, Inc. (“Client”), a Delaware
corporation having a place of business at 9350 Wilshire Blvd.,
Suite 203, Beverly Hills, CA 90212, and Cytovance Biologics, Inc.
(“Cytovance”), a Delaware
corporation having a place of business at 800 Research Parkway,
Suite 200, Oklahoma City, OK 73104. Client and Cytovance are each
referred to as a “Party” and collectively
referred to as the “Parties”.

 

Recitals

 

WHEREAS, Client desires Cytovance to
perform various biologic development and manufacturing services
from time to time in accordance with the terms of this
Agreement;

 

WHEREAS, Cytovance desires to perform
the development and manufacturing services requested by Client in
accordance with the terms of this Agreement;

 

NOW THEREFORE, for and in consideration
of the mutual promises, covenants, and conditions, and other good
and valuable consideration, the sufficiency and receipt of which
are hereby acknowledged and which form part of this Agreement, the
Parties agree as follows:

 

Agreement

 

1.            

Definitions. The following terms,
whether used in the singular or plural, have the respective
meanings set forth below:

 

1.1           “Affiliate”
means, with respect to a Party, any person or Entity that controls,
is controlled by, or is under common control with that Party. For
the purpose of this definition, “control” means: (i)
direct or indirect ownership of more than 50% of the shares of
stock entitled to vote for the election of directors (in the case
of a corporation), (ii) more than 50% of the equity interest in the
case of any other type of Entity, (iii) status as a general partner
in any partnership, or (iv) any other structure or arrangement that
includes the right to control the board of directors or equivalent
governing body of the Entity or the ability to cause the direction
of the management and policies of the Entity.

 

1.2           “Authorized
Agent” means, with respect to a Party, the Party, its
Affiliates, and their respective officers, directors, employees,
consultants, advisors, agents, representatives, and
subcontractors.

 

1.3           “Batch”
means Client Product that is produced during the same cycle of
manufacture and is intended to be of uniform character and quality
as defined in the applicable Manufacturing Process.

 

1.4           “Batch
Production Records” means the records
completed by Cytovance that document Cytovance’s steps and
processes utilized in the manufacture of a CGMP Batch.

 

 

 

1

 

 

 

 

1.5           “CGMP”
means “current Good Manufacturing Practices” or
“CGMP” as promulgated under U.S. Food, Drug &
Cosmetics Act (21 U.S.C. §301 et seq.) and the regulations thereunder
including 21 Code of Regulations chapters 210 and 211, as amended
from time to time. If Cytovance agrees to manufacture Client
Product in accordance with EMA regulations, then “CGMP”
also includes “Good Manufacturing Practices” or
“EU GMP” as specified in the EU Guidelines to Good
Manufacturing Practices: Medicinal Products for Human or Veterinary
Use, as amended from time to time.

 

1.6           “CGMP
Batch” means a Batch required to be manufactured in
accordance with CGMP.

 

1.7           “CGMP
Batch Documentation” means a complete and
accurate copy of the Batch Production Records and other documents
required by the Quality Technical Agreement, a certificate of
analysis, and a certificate of compliance for a Conforming CGMP
Batch, which are completed and approved by Cytovance.

 

1.8           “CGMP
Manufacturing Process” means the process and
procedures that Cytovance agrees to follow when manufacturing a
CGMP Batch, as evidenced by the Master Batch Records and the
Quality Technical Agreement.

 

1.9           “Change
Order” means an agreed-upon amendment, change, or
revision to an applicable SOW.

 

1.10           “Client
Components” means all materials provided by Client,
its Affiliates, or their respective designees to Cytovance, such as
cell lines, cell banks, and plasmids.

 

1.11           “Client
Equipment” means all equipment and tools provided by
Client, its Affiliates, or their respective designees to
Cytovance.

 

1.12           “Client
Indemnitees” means Client and its Affiliates and their
respective officers, directors, employees, consultants, advisors,
agents, and representatives.

 

1.13           “Client
Inventions” means all Inventions except for Cytovance
Inventions.

 

1.14           “Client
Product” means the RCB, MCB, Drug Substance, Drug
Product or other TriKE Product produced for Client by Cytovance
during performance of Services.

 

1.15           “Client
Technology” means all Know-How, Patents, and other
technology, methods, and processes transferred or otherwise shared
with Cytovance by Client or its Affiliates or their respective
designees.

 

1.16           “Confidential
Information” means any confidential or proprietary
Know-How or other data or information, in any form or
medium.

 

1.17           “Conforming
CGMP Batch” means a CGMP Batch that was manufactured
in accordance with the CGMP Manufacturing Process and meets the
applicable Specifications.

 

1.18           
“Conforming CGMP
Product” means the Client Product resulting from a
Conforming CGMP Batch that has been accepted in writing by
Client.

 

 

 

2

 

 

 

 

1.19           “Cytovance
Indemnitees” means Cytovance and its Affiliates and
their respective officers, directors, employees, consultants,
advisors, agents, and representatives.

 

1.20           “Cytovance
Inventions” means any: (a) Invention that does not use
or incorporate Client Technology, Client Product, or Client
Components; and (b) improvements or modifications to Cytovance
Technology.

 

1.21           “Cytovance
Technology” means any and all Know-How, Patents, and
other technology controlled by Cytovance or its Affiliates as of
the Effective Date or at any time during the term of this
Agreement.

 

1.22           “Discloser”
means a Party that discloses its Confidential Information to the
other Party.

 

1.23           “Deliverables”
means all materials, reports, information, data, findings, results,
conclusions, items, and recommendations, including Client Product,
that Cytovance is required to produce for Client during the
Services, as described in the applicable SOW.

 

1.24           “Defective
CGMP Manufacturing” means Cytovance’s failure to
follow the CGMP Manufacturing Process when manufacturing a CGMP
Batch, which results in a Non-Conforming CGMP Batch.

 

1.25           “Drug
Substance” means the unformulated TriKE
Product.

 

1.26           “Drug
Product” means the final marketed dosage form of the
Drug Substance.

 

1.27           “EMA”
means the European Medicines Agency or its successor
Entity.

 

1.28           “Engineering
Batch” means a test Batch manufactured in a
CGMP-qualified manufacturing suite at the same scale and with a
Manufacturing Process similar to the intended CGMP Manufacturing
Process of an intended CGMP Batch, but not subject to CGMP and
without any obligation to meet any Specifications.

 

1.29           “Entity”
means a partnership, limited partnership, limited liability
partnership, corporation, limited liability company, business
trust, trust, joint stock company, joint venture, association,
organization, governmental body, or any other entity, association,
or organization.

 

1.30           “Facility”
means Cytovance’s laboratory and manufacturing facilities
located in Oklahoma City.

 

1.31           “FDA”
means the United States Food and Drug Administration or its
successor Entity.

 

1.32           
“Invention” means any
invention, discovery, innovation, or improvement, whether or not
patentable, that is discovered, first conceived, made, developed,
or reduced to practice during the Services.

 

 

 

3

 

 

 

 

1.33           “Know-How”
means any and all tangible and intangible information, know-how,
data, results, and materials, including SOPs, discoveries,
improvements, compositions of matter, cell lines, assays,
sequences, processes, methods, knowledge, protocols, formulas,
utility, formulations, data, inventions, strategy, and trade
secrets, whether patentable or otherwise, and all other scientific,
pre-clinical, clinical, regulatory, manufacturing, marketing,
financial, and commercial information or data, in each case treated
as confidential or proprietary information and that is not
generally known by the public, but excluding any of the foregoing
to the extent described or claimed in any Patents.

 

1.34           “Latent
Defect” means a defect or other non-conformance in
Conforming CGMP Product that: (i) was not discoverable upon
commercially reasonable physical inspection and testing of the
Conforming CGMP Product; and (ii) causes the Conforming CGMP
Product to be a Non-Conforming CGMP Batch.

 

1.35           “Law”
means any federal, state, or local law, statute, standard,
ordinance, code, rule, regulation, resolution, promulgation, or
similar order by any Regulatory Authority or government authority
with competent jurisdiction.

 

1.36           “Manufacturing
Audit” means Client’s planned, independent,
documented, objective assessment of Cytovance and the portions of
the Facility used for production of Client Product to verify that
Cytovance’s systems and processes used to manufacture Client
Product are in accordance with the agreed-upon quality expectations
and applicable requirements from Regulatory Authorities. A
Manufacturing Audit is not all inclusive and only includes review
of systems, processes, procedures, and documentation related to
Client Product.

 

1.37           “Manufacturing
Process” means the process and procedures that
Cytovance agrees to follow when manufacturing a Batch.

 

1.38           “Master
Batch Records” means the Client-approved, step-by-step
description of the entire Manufacturing Process and all necessary
production tasks and activities for the manufacture of a CGMP Batch
and the MCB.

 

1.39           “Master
Cell Bank” or “MCB” shall mean a single
pool of E. coli cells or CHO cells expressing the TriKE Product
that has been derived from the RCB using a single E. coli cell
clone or CHO cell clone expressing the TriKE Product. The MCB will
be prepared under CGMP conditions in accordance with the applicable
Manufacturing Process, and subsequently dispensed into multiple
containers, and stored under defined conditions. The MCB is used to
derive all working cell banks used to manufacture an Engineering
Batch or CGMP Batch.

 

1.40           “Non-Conforming
CGMP Batch” means a CGMP Batch that does not meet the
applicable Specifications.

 

1.41           “Patents”
means all patents, patent applications, and any patents issuing
therefrom, including all certificates of invention, applications
for certificates of invention, divisionals, continuations,
substitutions, continuations-in-part, converted provisionals,
continued prosecution applications, adjustments, re-examinations,
reissues, additions, renewals, revalidations, extensions (including
patent term extensions and supplemental certificates),
registrations, pediatric exclusivity periods of any such patents
and patent applications, and any and all foreign equivalents of the
foregoing.

 

 

 

4

 

 

 

 

1.42           
“Person in the
Plant” means an employee, consultant, advisor, agent,
or representative of Client located in the Facility during the
Services for reasons other than a Manufacturing Audit or Facility
visit.

 

1.43           “Quality
Technical Agreement” means the agreement between the
Parties defining the quality responsibilities, including CGMP
standards, regarding the performance of the Services.

 

1.44           “Raw
Materials” means all materials (such as media, resins,
excipients, components, supplies, and other materials) other than
Client Components that are utilized by Cytovance in the production
of Client Product.

 

1.45           “R&D
Batch” means a Batch manufactured in a research and
development laboratory and without any obligation to adhere to CGMP
or meet any Specifications.

 

1.46           “Recall”
means a recall, withdrawal, field alert, or similar action relating
to any Client Product, whether mandatory or voluntary, regardless
of whether the Client Product violates any applicable
Law.

 

1.47           “Recipient”
means a Party that receives a Discloser’s Confidential
Information.

 

1.48           “Regulatory
Authority” means any agency or authority responsible
for regulation of Client Product in the United States, including
the FDA. If Cytovance agrees to manufacture Client Product in
accordance with EMA regulations, then “Regulatory
Authority” also includes the EMA.

 

1.49           “Research
Cell Bank” or “RCB” shall mean an E.
coli cell bank or CHO cell bank expressing TriKE Product produced
under research conditions used for the production of the R&D
Batch. The RCB should be derived from a single E. coli cell clone
or CHO cell clone expressing the TriKE product.

 

1.50           “Service
Documentation and Samples” means the Batch Production
Records of Client Product, laboratory notebooks, SOPs, or other
records related to the performance of Services, as well as samples
of Client Products and key Raw Materials used for the manufacture
of Client Product that are required to be retained by Cytovance
under the Quality Technical Agreement.

 

1.51           “Service
Standard” means Cytovance’s requirement to
perform all Services in accordance with industry standards,
applicable Law, this Agreement, and the applicable SOW (which may
contain Specifications or other acceptance criteria agreed to by
the Parties).

 

1.52           “Services”
means the services Cytovance agrees to perform for Client as
described in any applicable SOW.

 

1.53           “SOPs”
means standard operating procedures.

 

1.54           “SOW”
means an agreed-upon scope of work that the Parties enter into from
time to time that defines the Services to be performed under that
scope of work, as amended by one or more Change Orders. A proposal
for services becomes a scope of work when it is signed by both
Parties. An SOW may also contain the Specifications or other
acceptance criteria agreed to by the Parties.

 

 

 

5

 

 

 

 

1.55           “Specifications”
means the agreed-upon criteria necessary for Cytovance to
release a CGMP Batch to Client as defined in the product
specifications document approved by Client. The Specifications may
be included in the applicable SOW.

 

1.56           “Third
Party” means any person or Entity other than Cytovance
and Client.

 

1.57           “Third
Party Expert” means a person or persons of recognized
standing in the industry with respect to the development and CGMP
manufacture of biologic therapeutics, qualified to resolve a
dispute between the Parties, and is a recognized expert in the
field of NK cell biology and the development of NK cell
engagers

 

1.58           “Third
Party Licensed Materials” means materials, technology,
or both, licensed to Cytovance by a Third Party for use in
development and manufacturing services provided by Cytovance to its
clients.

 

1.59           “TriKE
Product” shall mean the single gene protein expression
product derived from the DNA sequence and amino acid sequence
provided to Cytovance by Client.

 

2.            

General
Terms of Service.

 

2.1           Independent
Contractor. Cytovance is an independent contractor of Client
and has complete and exclusive control over its Facilities,
equipment, and employees. The relationship between the Parties is
not a partnership, joint venture, agency relationship, or similar
relationship, and neither Party is the agent, employee, or legal
representative of the other.

 

2.2           Excluded
Services. Cytovance is under no obligation to produce
products which are classified as antibiotics, cytotoxic, or highly
active drugs, or are complexed with radioisotopes, all of which
generally require segregated and specialized facilities and
equipment. Cytovance will notify Client if it becomes aware of any
safety or toxicity issues related to Client Product.

 

2.3           SOWs.
Each SOW will detail the Services to be performed by Cytovance,
including the Deliverables, any Raw Materials to be procured by
Cytovance, any outsourced services, the fees and costs to be paid
by Client, and any other details or provisions deemed necessary or
appropriate by the Parties (which may include the Specifications or
other acceptance criteria agreed to by the Parties). Each SOW must
be in writing, dated, and signed by the Parties. The Services
specified in SOWs are the only Services Cytovance will
perform.

 

2.4           Change
Orders. Due to the nature of the Services, changes to the
scope and duration of Services under an SOW may be necessary,
including to: (a) revise the Deliverables, procedures, assumptions,
processes, test methods, or outsourced services; (b) comply with
applicable Law or amendments to applicable Law; or (c) revise the
Services for any other reason, including as necessitated by a force
majeure event as described in Section 0. Either Party may propose a change to any
Services under any SOW. The Parties must agree to the changes prior
implementing the changes in the Services. Any agreed-upon changes
to a SOW will be set forth in a Change Order signed by both
Parties. Each Change Order will be considered part of the SOW it
amends.

 

 

 

6

 

 

 

 

2.5           Regulatory
Compliance. Client is responsible for complying with all Law
and securing all approvals from all Regulatory Authorities and any
other governmental or quasi-governmental entities related to the
creation, manufacture, use, sale, licensing, and other disposition
of Client Components, Client Equipment, Client Technology, and
Client Product, including any approvals necessary to transfer
Client Components, Client Equipment, and Client Technology to
Cytovance for Cytovance’s provision of the Services. Client
will promptly notify Cytovance if Client fails to maintain any
approval from any Regulatory Authority or other governmental or
quasi-governmental entity. Cytovance shall maintain its CGMP
manufacturing facility and all related quality documentation,
processes and systems in compliance with U.S. FDA and other CGMP
quality standards.

 

2.6           Client
Cooperation. Client shall support and cooperate with
Cytovance in the execution of the Services and shall not engage in
any act or omission that may reasonably be expected to prevent or
delay the successful execution of the Services. Support and
cooperation includes but is not limited to, prompt review and
approval of documents requiring Client’s signature, timely
delivery of accurate methods and materials, and prompt response to
other matters.

 

2.7           Instructions
for Client Product. Prior to the Cytovance’s
manufacturing of any Client Product, Client shall provide Cytovance
with reasonable instructions for the proper storage, handling,
shipping, and disposal or destruction of all Client Product to be
produced, with sufficient time for Cytovance’s review and
training of its employees. 

 

2.8           Ownership
of Deliverables. As between the Parties, Client shall own
all Deliverables, but Cytovance may withhold Deliverables (whether
completed or in-process) as expressly permitted in this Agreement
without any liability to Client.

 

2.9           Subcontractors.
Subject to advance written notice to Client by Cytovance and
Client’s approval, Cytovance may subcontract the performance
of Services to any of its approved subcontractors. Cytovance will
provide its list of approved subcontractors to Client upon
Client’s request. If Cytovance subcontracts any Services,
Cytovance will ensure that the subcontracted Services are performed
in compliance with this Agreement and Cytovance will be liable to
Client for the subcontractor’s performance of subcontracted
Services as if Cytovance performed those Services for Client.
However, Cytovance will have no liability to Client for the acts or
omissions of a subcontractor identified by Client and engaged by
Cytovance for the performance of subcontracted Services at
Client’s request.

 

2.10        
Outsourced Services.
Outsourced services, such as outsourced testing or analytical
services, are not considered subcontracted Services. Cytovance will
have no liability to Client for the performance or accuracy of any
outsourced services. Any outsourced services to be performed will
be specified in the applicable SOW.

 

2.11        
Exclusivity. Cytovance shall
not use any of Client’s Confidential Information for the
benefit of itself or a Third Party, including using Client’s
Confidential Information to develop, manufacture, or use products
or ideas that are similar to or compete with TriKE
Product.

 

 

 

7

 

 

3.            

Payment,
Invoicing, and Taxes.

 

3.1        
Payment. Payment of fees and
reimbursement of any expenses with respect to Services under a SOW
will be set forth in the SOW.  Any changes to a SOW may be
subject to a change in fees and costs to be paid by Client. Any
change of fees or costs must be agreed to by the Parties in a
Change Order.

 

3.2        
Non-Refundable Prepayments.
Cytovance dedicates significant time, labor, and resources into the
preparation, planning, and initiation of the Services under an SOW,
the value of which is difficult to measure and determine.
Non-refundable prepayments in an SOW are designed to compensate
Cytovance for its time, labor, and resources devoted to preparing,
planning, and initiating the Services to be performed under the
SOW. For this reason, the Parties agree that if Client terminates a
SOW for any reason (excepting termination of the SOW for cause),
Cytovance will be entitled to keep the non-refundable prepayments
as liquidated damages (which the Parties agree does not serve as a
penalty) to compensate Cytovance for its significant time, labor,
and resources devoted to preparing, planning, and initiating the
Services that were terminated by Client.

 

3.3        
Late Payments. Cytovance may
charge interest at a rate of 1.5% per month on any pass-due balance
owed by Client. Cytovance’s failure to bill for interest due
is not a waiver of Cytovance’s right to charge interest on
any pass-due invoice. If full payment of any invoice is not
received within 60 days of the date when due, Cytovance may suspend
any Services and withhold any Deliverables (whether completed or
in-process) without any liability to Client.

 

3.4        
Cytovance Taxes. Cytovance
shall pay all taxes, duties, and levies imposed upon
Cytovance’s performance of Services except for applicable
sales and use taxes that by Law Cytovance must add to the cost of
Services. These taxes, if any, will be separately stated on
Cytovance’s invoice to Client.

 

3.5        
Client Taxes. Client shall
pay all national, state, municipal, or other sales, use excise,
import, property, value added, or other similar taxes, assessments,
or tariffs assessed upon or levied against the sale of Client
Product from Cytovance to Client or the sale or distribution of
Client Product by Client. Cytovance shall notify Client of any such
taxes that any governmental authority is seeking to collect from
Cytovance, and Client will assume the defense thereof in
Cytovance’s name. Cytovance will cooperate in such defense at
Client’s expense.

 

4.            

Materials
for the Services.

 

4.1         Client
Components.

 

(a)           Sufficiency;
Ownership. As defined in an SOW, Client will provide
Cytovance with sufficient quantities of Client Components necessary
for the performance of the Services. Client shall adequately insure
the Client Components against all risk of loss (at replacement
value with an industry standard deductible). As between the
Parties, all Client Components are and will remain the property of
Client. Cytovance shall use the Client Components solely for the
purpose of performing Services.

 

(b)           No
Hazardous Properties. The Client Components must not contain
hazardous properties nor require specific safe handling
instructions. If requested by Cytovance, Client will supply
Cytovance with material safety data for Client Components.
Cytovance will notify Client if Cytovance becomes aware of any
safety or toxicity issues related to Client
Components.

 

 

 

8

 

 

 

 

(c)           Handling
of Client Components. Prior to sending Client Components to
Cytovance, Client shall provide Cytovance with reasonable
instructions for the proper storage, handling, and disposal of all
Client Components, with sufficient time for Cytovance’s
review and training of its employees.

 

(d)           Cell
Lines Quantities. Cytovance shall create and maintain
sufficient quantities of RCB, MCB, and working cell banks that are
required for the development, manufacturing and testing of Client
Product. The quantities of RCB, MCB, and working cell bank
necessary for the Services will be agreed upon by the Parties in
one or more SOWs or Change Orders. Once a MCB is established, 50%
of the MCB shall be stored with Client or a Third Party at
Client’s expense.

 

(e)           Remedy
for Negligently Destroyed Client Components. If Cytovance
negligently destroys or loses a Client Component necessary for the
successful completion of the applicable Services, as Client’s sole and exclusive
remedy, Cytovance will credit to Client’s account the
fair market value of the Client Component, minus any insurance proceeds available to
Client from an insurance policy covering the Client Component or
any insurance proceeds that would have been available to Client if
the Client Component was insured as required under Section
4.1(a).

 

(f)           Destruction
or Return of Client Components. Within 90 days after the
completion of Services under an SOW or the termination of the SOW,
whichever occurs first, Client will direct Cytovance to dispose of,
destroy, or return to Client or its designee all unused Client
Components applicable to that SOW. Client will pay the costs for
disposal, destruction, or return of Client Components to Client or
its designee. If Client does not direct Cytovance to dispose of,
destroy, or return the Client Components within the 90 day period,
Cytovance may, in its sole discretion: (i) charge a monthly storage
fee for the Client Components until they are returned to Client or
its designee or disposed of or destroyed; (ii) dispose of or
destroy the Client Components at Client’s expense without any
liability to Client for the disposal or destruction of the Client
Components; or (iii) both (i) and (ii).

 

(g)           Replenishment
of Client Components. If any
Client Components expire or are unusable for any reason, upon
notice from Cytovance, Client (at its expense) shall promptly send
additional Client Components to Cytovance. 

 

4.2        
Raw
Materials.

 

(a)           In
General. Unless otherwise
stated in the applicable SOW, Cytovance will be responsible for
procuring from its approved vendors and maintaining inventory of
all Raw Materials necessary to perform the
Services.

 

(b)           Handling
of Raw Materials. Cytovance
will be responsible for adopting, maintaining, and enforcing safety
procedures for Cytovance’s internal handling and processing
of Raw Materials.

 

 

 

9

 

 

 

 

(c)           Raw
Materials Chosen by Client. If
Client requires the use of a specific Raw Material from a vendor
that is not a Cytovance approved vendor, that specific Raw Material
must meet Cytovance’s quality requirements and Client shall
identify a primary and backup supplier for the Raw Material. If
Cytovance, in its sole discretion, determines that any vendor of
any specific Raw Material requested by Client requires an audit by
Cytovance, Client shall pay a fee for the audit as set forth in the
applicable SOW.

 

(d)           Raw
Material Specifications. Unless
otherwise agreed in the SOW, Cytovance will create up to three Raw
Materials specifications per SOW at no charge to Client. Client
will pay Cytovance a fee for the creation of each additional Raw
Material specification as set forth in the applicable
SOW.

 

(e)           No
Warranty. Cytovance makes no
warranty regarding any Raw Materials used in the Services or
incorporated into Client Product. If a Raw Material includes a
manufacturer’s warranty, Cytovance will transfer any rights
it has under the warranty to Client (if allowed by the warranty).
Cytovance will not be liable for the performance of any Raw
Materials used in the Services or Client Product. However, if
Cytovance’s negligence causes a Raw Material to fail during
the manufacture of a Batch and that failure results in a failed
R&D Batch, failed Engineering Batch, or Defective CGMP
Manufacturing, the applicable remedy in Section 6.4,
Section 7.4, or
Section 7.8(f) will apply. Notwithstanding the foregoing, unless
otherwise agreed in an applicable SOW, Cytovance warrants it shall
only use Raw Materials that comply with the Raw Material
specifications set forth in the applicable SOW.

 

(f)           Replenishment
of Raw Materials. If any Raw
Materials expire or are unusable as a result of Cytovance’s
negligent handling or storage of the Raw Materials,
Cytovance will purchase
replacement Raw Materials for use in the Services at
Cytovance’s expense.

 

(g)           Disposal
of Raw Materials. If any Raw
Materials expire or are rendered unusable or the Services requiring
the Raw Materials are completed or terminated for any reason,
Cytovance will dispose of or destroy the Raw Materials at
Client’s expense. However, if any unexpired Raw Materials
remain after the completion of the Services requiring those Raw
Materials, Client may elect, at its expense, to have Cytovance ship
the Raw Materials to Client or its designee.

 

4.3        
Third Party
Licensed Materials.

 

(a)           Optional
Materials. Cytovance has access
to certain Third Party Licensed Materials that may be used in the
Services for development of Client Product and the manufacture of
R&D Batches without a separate license between Client and the
Third Party. Cytovance shall notify Client in writing of
Cytovance’s intention is use Third Party Licensed Materials
prior to commencing Services. If desired by Client, Cytovance will
assist Client in determining what Third Party Licensed Materials
may benefit any Client Product.

 

(b)           Use
of Third Party Licensed Materials. Cytovance shall only use Third Party Licensed
Materials in the Services if expressly approved in writing by
Client. Cytovance will comply with all restrictions, limitations,
and obligations applicable to Cytovance with respect to the Third
Party Licensed Materials. If Client agrees to allow Cytovance to
use any Third Party Licensed Materials in the Services, Client
shall comply with any restrictions, limitations, and obligations
applicable to Client with respect to the Third Party Licensed
Materials.

 

 

 

10

 

 

 

 

(c)           Additional
License. If Client decides to
incorporate any Third Party Licensed Materials into Client Product
beyond research and development Services, a separate license will
be required between the Third Party and Client. Cytovance will
connect Client with the Third Party so that Client and the Third
Party can negotiate a license for the Third Party Licensed
Materials used in the Client Product prior to Cytovance commencing
Services. If Client obtains a separate license from the Third
Party, Client will comply with all restrictions, limitations, and
obligations applicable to the license.

 

(d)           No
Warranty. Cytovance makes no
warranty regarding any Third Party Licensed Materials used in the
Services or incorporated into Client Product. Cytovance will not be
liable for the performance any Third Party Licensed Material used
in the Services or Client Product. However, if Cytovance’s
negligence causes a Third Party Licensed Material to fail during
the manufacture of a Batch and that failure results in a failed
R&D Batch, failed Engineering Batch, or Defective CGMP
Manufacturing, the applicable remedy in Section 6.4,
Section 7.4, or
Section 7.8(f) will apply.

 

(e)           Replenishment
of Third Party Licensed Materials. If any Third Party Licensed Materials expire or
are unusable for any reason, upon notice from Cytovance, Client
shall promptly pay Cytovance for the procurement of additional
Third Party Licensed Materials. However, if Cytovance negligently damages or
destroys a Third Party Licensed
Material and the
Services cannot continue without that Third Party Licensed Material, as Client’s sole and
exclusive remedy, Cytovance will purchase a replacement
Third Party Licensed Material
for use in the
Services.

 

(f)           Disposal
of Third Party Licensed Materials. If any Third Party Licensed Materials expire or
are rendered unusable or the Services requiring the Third Party
Licensed Materials are completed or terminated for any reason,
Cytovance will dispose of or destroy the Third Party Licensed
Materials at Client’s expense.

 

5.            

Equipment
for the Services.

 

5.1           Cytovance
Equipment. Except for Client Equipment, Cytovance will
provide all equipment necessary for the Services. If the Services
require any specialized equipment and Client elects not to send
Client Equipment to Cytovance, the Parties may agree for Cytovance
to procure the necessary equipment at Client’s expense. Any
procurement of additional equipment at Client’s expense will
be set forth in the applicable SOW. The Parties will agree in the
applicable SOW whether the additional equipment is considered
Cytovance equipment or Client Equipment.

 

5.2           Client
Equipment. If the Services
include any Client Equipment, title to the Client Equipment will
remain with Client. Client shall pay for insuring (at replacement
value with an industry standard deductible), shipping, installing,
validating, revalidating, calibrating, recalibrating, repairing
(including preventative maintenance), upgrading (including software
and hardware updates), and replacing any Client Equipment. Spare
parts provided by Client for Client Equipment will remain the
property of Client and will be used by Cytovance only for the
Client Equipment. Cytovance will notify Client if it believes any
Client Equipment has been damaged, lost, or
stolen. 

 

 

 

11

 

 

 

 

5.3           Remedy
for Negligently Damaged Equipment. If Cytovance negligently
causes damage to Client Equipment, as Client’s sole and exclusive
remedy, Cytovance’s will credit to Client’s
account the value of the repairs to the Client Equipment or the
fair market value of the Client Equipment, whichever is less, minus
any insurance proceeds
available to Client from an insurance policy covering the Client
Equipment or any insurance proceeds that would have been available
to Client if the Client Equipment was insured as required under
Section 5.2.

 

5.4           Performance
of Client Equipment. Cytovance
will have no liability for the performance any Client Equipment
during the Services. However, if Cytovance’s negligence
causes Client Equipment to fail during the manufacture of a Batch
and that failure results in a failed R&D Batch, failed
Engineering Batch, or Defective CGMP Manufacturing, the applicable
remedy in Section 6.4,
Section 7.4, or
Section 7.8(f) will apply.

 

5.5           Storage
of Client Equipment. If Client Equipment is not in use
during the Services for more than 60 days, Client shall pay a
storage fee to Cytovance for the Client Equipment until Cytovance
resumes using the Client Equipment for the Services or returns the
Client Equipment to Client or its designee.

 

5.6           Shipment
of Client Equipment. If Client Equipment is returned to
Client or sent to its designee for any reason, Client shall pay the
cost of packaging and shipping (including shipping insurance) the
Client Equipment.

 

6.            

Research and Development Services.

 

6.1           Standard
of Services. Cytovance will
perform research and development Services in accordance with the
Service Standard. Because of the experimental nature of research
and development Services, Cytovance does not warrant any outcomes
or results with respect to any Deliverables resulting from research
and development Services, including R&D Batches. However, if
Cytovance specifically agrees in writing to follow a specific
Manufacturing Process when manufacturing an R&D Batch,
Cytovance will manufacture that R&D Batch in accordance with
the Manufacturing Process.

 

 6.2           Dispute
Regarding Research and Development Services. If the Parties
dispute whether Cytovance complied with the Service Standard when
completing research and development Services, including
Cytovance’s adherence to the Manufacturing Process when
manufacturing an R&D Batch, the Parties will attempt to resolve
the dispute within 30 days. If the dispute is not resolved, the
Parties will submit the R&D Batch or other Deliverable, as
applicable, and all relevant records and information to a Third
Party Expert, mutually agreed upon by the Parties. Neither Party
may unreasonably withhold its consent to the appointment of the
Third Party Expert.

 

 

 

12

 

 

6.3        
Third Party Expert Determination of
Dispute.

 

(a)           Factors
for Consideration. When determining whether Cytovance met
the Service Standard when conducting research and development
Services, including Cytovance’s adherence to the
Manufacturing Process when manufacturing an R&D Batch, the
Third Party Expert shall consider the information supplied by the
Parties, Cytovance’s acts and omissions, Client’s acts
and omissions, and any deficiencies in the Client Technology,
Client Components, Client Equipment, and Raw
Materials.

 

(b)           Third
Party Expert Decision. If the Third Party Expert determines
that the research and development Services did not meet the Service
Standard, or, if applicable, that Cytovance did not manufacture the
R&D Batch in accordance with the Manufacturing Process, then
Cytovance will pay the fees and expenses of the Third Party Expert
and the remedy in Section 6.4 will
apply. If the Third Party Expert determines that a failed R&D
Batch did not result from Cytovance’s failure to adhere to
the Manufacturing Process, Client will pay the fees and expenses of
the Third Party Expert and Client will have no remedy against
Cytovance for the research and development Services or R&D
Batch, as applicable. The determination by the Third Party Expert
will be final and binding on the Parties absent fraud or manifest
error.

 

6.4        
Remedy for Failed Research and
Development Services.

 

(a)           Eligibility
for Remedy. Client will only be entitled to a remedy for
failed research and development Services if Client has paid for the
failed research and development Services and: (i) Cytovance failed
to follow the Service Standard when conducting research and
development Services; or (ii) if the dispute concerns
and R&D Batch, Cytovance failed to follow the applicable
Manufacturing Process when manufacturing an R&D
Batch.

 

(b)           Sole
and Exclusive Remedy. Client’s sole and exclusive
remedy for failed research and development Services is: (i) a
repeat of the failed research and development Services or the
manufacture of a replacement R&D Batch, as applicable, at
Cytovance’s expense; or (ii) a credit to
Client’s account equal to the fees charged for the failed
research and development Services or R&D Batch, as
applicable.

 

(c)           Use
of Failed Client Product.  If Client uses Client Product from
failed research and development Services for any purpose (excluding
testing or analysis to determine whether the R&D Batch failed),
Client will not be entitled to a remedy for the failed research and
development Services (including any R&D Batches).

 

7.            

CGMP Manufacturing Services.

 

7.1           Engineering
Batches.

 

(a)           Engineering
Batches Required. If the Services include the manufacture of
one or more CGMP Batches, Cytovance requires the manufacture of an
Engineering Batch prior to the manufacture of the first CGMP Batch
at each scale of Client Product (unless the Parties agree in the
SOW that no Engineering Batch is necessary). The purpose of the
Engineering Batch is to familiarize Cytovance with the intended
CGMP Manufacturing Process, observe the Client Technology, Client
Components, Client Equipment, and Raw Materials, and reveal whether
the intended Master Batch Records, CGMP Manufacturing Process, or
Specifications require modifications or changes.

 

 

 

13

 

 

 

 

(i)           Refusal
of Engineering Batch. Unless agreed by the Parties in the
SOW that no Engineering Batch is necessary, if Client directs
Cytovance to forgo a required Engineering Batch required under
Section 7.1(a) and the CGMP Batch
results in a Non-Conforming CGMP Batch for any reason (excepting
Cytovance’s gross negligence or willful misconduct), Client
will have no remedy against Cytovance for the Non-Conforming CGMP
Batch, including the costs of Raw Materials and Client Components
utilized in the Non-Conforming CGMP Batch.

 

(ii)           Intentionally
Blank.

 

(b)           Client
Approval of Manufacturing Process. Four (4) weeks prior to
Cytovance’s commencement of the manufacture of any
Engineering Batch (or other time period agreed upon by the
Parties), all applicable records for the agreed-upon Manufacturing
Process (e.g., draft Master Batch Records for the intended CGMP
Batch) must be approved by Client so that Cytovance will have
adequate time to instruct its employees on the Manufacturing
Process as well as complete a dry-run walk through of the
Manufacturing Process. Cytovance shall allow Client four (4) weeks
(or other time period agreed upon by the Parties) to review Master
Batch Records and other documents required for the Manufacturing
Process prior to commencement of the manufacture of any Engineering
Batch.

 

(c)           Standard
for Engineering Batches. Cytovance will adhere to the
Service Standard and follow the Manufacturing Process when
manufacturing each Engineering Batch. However, no Engineering Batch
is required to comply with CGMP or meet any
Specifications.

 

7.2         
Dispute Regarding Engineering
Batches. If the Parties dispute whether Cytovance complied
with the Service Standard when completing Service Standard or
Manufacturing Process when manufacturing an Engineering Batch, the
Parties will attempt to resolve the dispute within 30 days. If the
dispute is not resolved, the Parties will submit the Engineering
Batch or other Deliverable, as applicable, and all relevant records
and information to Third Party Expert, mutually agreed upon by the
Parties. Neither Party may unreasonably withhold its consent to the
appointment of the Third Party Expert.

 

7.3         
Third Party Determination of
Dispute.

 

(a)           Factors
for Consideration. When determining whether Cytovance met
the Service Standard or followed the Manufacturing Process when
manufacturing an Engineering Batch, the Third Party Expert shall
consider the information supplied by the Parties, Cytovance’s
acts and omissions, Client’s acts and omissions, and any
deficiencies in the Client Technology, Client Components, Client
Equipment, and Raw Materials.

 

(b)           Third
Party Expert Decision. If the Third Party Expert determines
that Cytovance failed to meet the Service Standard or did not
manufacture the Engineering Batch in accordance with the
Manufacturing Process, then Cytovance will pay the fees and
expenses of the Third Party Expert and the remedy in Section 7.4
will apply. If the Third Party Expert determines that a failed
Engineering Batch did not result from Cytovance’s failure to
adhere to the Manufacturing Process, Client will pay the fees and
expenses of the Third Party Expert and Client will have no remedy
against Cytovance for the failed Engineering Batch. The
determination by the Third Party Expert will be final and binding
on the Parties absent fraud or manifest error.

 

 

 

14

 

 

 

 

7.4        
Remedy for Failed Engineering
Batches.

 

(a)           Client
will only be entitled to a remedy for a failed Engineering Batch if
Client has paid for the failed Engineering Batch and: (A) Cytovance
fails to follow the Service Standard when manufacturing the
Engineering Batch; or (B) Cytovance fails to
follow the applicable Manufacturing Process when manufacturing the
Engineering Batch.

 

(b)           At
Client’s sole discretion, Client’s sole and exclusive
remedy for a failed Engineering Batch is either: (A) the
manufacture of a replacement Engineering Batch at Cytovance’s
sole expense inclusive of the cost for all replacement Raw
Materials and Client Components; or (B) a credit to
Client’s account equal to the fees charged for the failed
Engineering Batch inclusive of the cost for all Raw Materials used
in the failed Engineering Batch.

 

(c)           If
Client uses Client Product resulting from a failed Engineering
Batch for any purpose (exclusive of testing or analysis to
determine if the Engineering Batch was manufactured in accordance
with the Manufacturing Process), Client will not be entitled to a
remedy for the failed Engineering Batch and Client shall pay all
fees for the manufacture of the failed Engineering
Batch.

 

7.5         CGMP
Batch Manufacturing.

 

(a)           Standard
for CGMP Manufacturing. Unless otherwise agreed in the SOW
(which may also contain
the Specifications or other acceptance criteria agreed to by the
Parties), Cytovance warrants that each CGMP Batch will be
manufactured in accordance with the Service Standard, the SOW, the
CGMP Manufacturing Process, and be free of Defective CGMP
Manufacturing.

 

(b)           Specifications.
Specifications must be agreed to in writing. Any changes to
Specifications must be agreed upon by the Parties. If Client
requests a material change to the Specifications, Cytovance and
Client shall discuss and determine if an additional Engineering
Batch is required to be manufactured in accordance with Section
7.1.

 

(c)           Client
Approval of CGMP Manufacturing Process. Six (6) weeks prior
to Cytovance’s commencement of the manufacture of any CGMP
Batch (or other timeline agreed upon by the Parties), all
applicable Master Batch Records and other documents required for
the CGMP Manufacturing Process must be approved by Client so that
Cytovance will have adequate time to instruct its employees on the
CGMP Manufacturing Process as well as complete a dry-run walk
through of the CGMP Manufacturing Process. Cytovance shall allow
Client six (6) weeks (or other timeline agreed upon by the Parties)
to review Master Batch Records and other documents required for the
CGMP Manufacturing Process prior to commencement of the manufacture
of any CGMP Batch.

 

 

 

15

 

 

7.6        
Testing of Completed CGMP
Batches.

 

(a)           Testing
by Cytovance. Upon completion of the manufacture of each
CGMP Batch, Cytovance will sample and test the CGMP Batch in
accordance with the applicable Master Batch Records and any
applicable Specifications to assess if the CGMP Batch is a
Conforming CGMP Batch.

 

(b)           Testing
by Client. Upon completion of the manufacture of each CGMP
Batch, Cytovance will send to Client a sample of the CGMP Batch for
testing and analysis to assess if the CGMP Batch is a Conforming
CGMP Batch.

 

(c)           Conforming
CGMP Batch. If Cytovance and Client determine the completed
CGMP Batch is a Conforming CGMP Batch, the appropriate CGMP Batch
Documentation will be prepared. As long as any invoice sent to
Client for any Services is not 60 or more days past due, Cytovance
will deliver the CGMP Batch Documentation to Client for
review.

 

(d)           Non-Conforming
CGMP Batch. If Cytovance and Client determine a completed
CGMP Batch is a Non-Conforming CGMP Batch, Cytovance will deliver
the Master Batch Records, Batch Production Records, Specifications,
and testing results to Client. Cytovance and the Client will also
conduct an investigation in accordance with the Quality Technical
Agreement to determine the cause of the Non-Conforming CGMP
Batch.

 

7.7        
Client Review of CGMP Batch
Documentation.

 

(a)           60-Day
Review Period. Upon receipt of the CGMP Batch Documentation
for a Conforming CGMP Batch, Client must notify Cytovance in
writing of its acceptance or rejection of the Conforming CGMP Batch
within sixty (60) days. If Client receives the Conforming CGMP
Batch in accordance with Section 7.6(c) above, it may conduct its
own testing (or testing done at its behalf by a Third Party) on a
Conforming CGMP Batch within this 60 day period to determine
whether to accept or reject the Conforming CGMP Batch. During this
review period, the Parties will respond within seven days to any
reasonable inquiry or request for a correction or change by the
other Party with respect to the CGMP Batch
Documentation.

 

(b)           Client
Acceptance of Conforming CGMP Batch. Client shall promptly
notify Cytovance if it accepts the Conforming CGMP Batch as
Conforming CGMP Product. If accepted by Client, the Conforming CGMP
Batch will be considered Conforming CGMP Product as of the date
Cytovance determined the CGMP Batch was a Conforming CGMP Batch in
accordance with Section 7.6(c). If
Client does not notify Cytovance within the 60-day time period that
the Conforming CGMP Batch is a Non-Conforming CGMP Batch, on the
day following the 60-day time period the Conforming CGMP Batch will
be deemed Conforming CGMP Product as of the date that Cytovance
determined the CGMP Batch was a Conforming CGMP Batch under Section
7.6(c) and Client will have waived its
right to revoke acceptance.

 

(c)           Client
Rejection of Conforming CGMP Batch. If Client rejects a
Conforming CGMP Batch as a Non-Conforming CGMP Batch during the
60-day review period, Client shall promptly notify Cytovance of its
rejection in writing, including a detailed explanation of the
non-conformity. The Parties will attempt in good faith to resolve
any disagreement to determine whether the rejected CGMP Batch is a
Conforming CGMP Batch or a Non-Conforming CGMP Batch. Client and
Cytovance will follow their respective SOPs during this
process.

 

 

 

16

 

 

 

 

(d)           Cytovance
Investigation of Rejected Conforming CGMP Batch. If
Cytovance agrees that the rejected CGMP Batch is a Non-Conforming
CGMP Batch, Cytovance and Client will conduct an investigation in
accordance with the Quality Technical Agreement to determine
whether the Non-Conforming CGMP Batch resulted from Defective CGMP Manufacturing. If the
investigation reveals that the Non-Conforming CGMP Batch did not
result from Defective CGMP
Manufacturing, Client shall either accept the results of the
investigative report or dispute the results in good faith pursuant
to Section 7.8. If the investigation reveals that the
Non-Conforming CGMP Batch resulted from Defective CGMP Manufacturing, the remedy in
Section 7.8(f) will apply.

 

7.8        
Dispute Regarding CGMP
Batch.

 

(a)           Third
Party Arbitrator Dispute Resolution. If the Parties dispute
whether a CGMP Batch is a Conforming CGMP Batch or a Non-Conforming
CGMP Batch, or the Parties dispute whether a Non-Conforming CGMP
Batch resulted from Defective CGMP Manufacturing, the Parties shall
engage an independent Third Party Expert to resolve the dispute. If
the dispute concerns the CGMP Batch’s conformance to the
Specifications or Cytovance’s adherence to the CGMP
Manufacturing Process, the Parties will submit the Master Batch
Records, Batch Production Records, Specifications, SOW, and other
information relevant to the dispute (including a representative
sample of the CGMP Batch, if necessary) to an independent testing
laboratory mutually agreed to by the Parties. If the dispute
concerns Cytovance’s adherence to CGMP, the Parties will
submit the Master Batch Records, Batch Production Records,
Specifications, SOW, and other information relevant to the dispute
to a CGMP consultant mutually agreed to by the
Parties.

 

(b)           Factors
for Consideration. The determination by the Third Party
Expert will be final and binding on the Parties absent fraud or
manifest error. In making its determination, the Third Party Expert
shall consider the information supplied by the Parties,
Cytovance’s acts and omissions, Client’s acts and
omissions, and any deficiencies in the Client Technology, Client
Components, Client Equipment, Raw Materials, and the CGMP
Manufacturing Process. The Third Party Expert shall use the test
and analysis methods contained in the CGMP Manufacturing Process
and SOW when conducting their analysis.

 

 

 

17

 

 

(c)           Third
Party Expert Determination.

 

(i)           If
the Third Party Expert determines that the CGMP Batch was a
Conforming CGMP Batch: (A) the CGMP Batch will be deemed Conforming
CGMP Product as of the date that Cytovance and Client determined
the CGMP Batch was a Conforming CGMP Batch in accordance with
Section 7.6(c); and (B) Client shall
pay the fees and expenses of the Third Party Expert.

 

(ii)           If
the Third Party Expert makes any other determination, including,
but not limited to, that the results are inconclusive or that the
CGMP Batch was a Non-Conforming CGMP Batch but not as a result of
Defective CGMP Manufacturing, Client shall pay the fees and
expenses of the laboratory or consultant and will have no remedy
against Cytovance for the Non-Conforming CGMP Batch.

 

(e)           Latent
Defects. Client will have six (6) months from the date a
Conforming CGMP Batch is deemed Conforming CGMP Product to reject
the Conforming CGMP Product because of a Latent Defect. However, if
Conforming CGMP Product expires prior to the six-month period in
the foregoing sentence, then Client will have until the Conforming
CGMP Product expires to reject the Conforming CGMP Product because
of a Latent Defect. Notice of rejection of Conforming CGMP Product
because of a Latent Defect must be in writing and sent to Cytovance
within two weeks of the discovery of the Latent Defect. The notice
must detail how the Latent Defect resulted from Defective CGMP Manufacturing. The Parties
will attempt in good faith to resolve a Latent Defect issue within
30 days of Cytovance’s receipt of the Latent Defect notice.
If Cytovance admits that the Latent Defect resulted from
Defective CGMP Manufacturing,
the remedy in Section 7.8(f) will apply. If Cytovance disputes that
a Latent Defect resulted from Defective CGMP Manufacturing, the
Parties will resolve the dispute in accordance with to Section
7.8.

 

(f)           Replacement
CGMP Batch or Credit.

 

(i)           Client’s
sole and exclusive remedy for a Non-Conforming CGMP Batch resulting
from Defective CGMP Manufacturing is, at Client’s sole
discretion, either:

 

(1)           A
replacement CGMP Batch manufactured at Cytovance’s expense,
including the costs of replacement Raw Materials; or

 

(2)           A
credit to Client’s account equal to the fees charged for the
Non-Conforming CGMP Batch, including any fees charged for the Raw
Materials used in the manufacture of the Non-Conforming CGMP
Batch.

 

(ii)           However,
if only a portion of a CGMP Batch is considered non-conforming as a
result of Defective CGMP Manufacturing, at Client’s sole
discretion, Client’s sole and exclusive remedy for the
partially non-conforming CGMP Batch is either:

 

(1)           A
replacement CGMP Batch manufactured at Client’s expense minus
the fees charged for the manufacture of the partially
Non-Conforming CGMP Batch multiplied by the percentage of the
partially Non-Conforming CGMP Batch that was non-conforming as a
result of Defective CGMP Manufacturing; or

 

 

 

18

 

 

 

 

(2)           A
credit to Client’s account equal to the fees charged for the
partially non-conforming CGMP Batch (inclusive of the fees charged
for the Raw Materials used in the partially non-conforming CGMP
Batch) multiplied by the percentage of the partially non-conforming
CGMP Batch that was non-conforming as a result of Defective
Manufacturing.

 

(g)           Client’s
Use of Non-Conforming CGMP Batch. Client is only allowed to
use a Non-Conforming CGMP Batch for testing and analysis to help
determine why the CGMP Batch failed.

 

7.9        
Fees for Canceling
or Rescheduling a CGMP Batch. Unless a different cancellation provision is
expressly stated in an SOW, the Parties agree that if Client
cancels or reschedules a CGMP Batch (excepting Client’s
termination of the applicable SOW for cause), or a Batch is
canceled or rescheduled as a result of Sections 8.1, 8.2,
or 8.3,
Client will pay to Cytovance as liquidated damages (which the
Parties agree does not serve as a penalty) an amount equal to a
percentage of the fees set forth in the applicable SOW for the
canceled or rescheduled CGMP Batch in accordance with the following
schedule:

 

	

Days Prior Notice
to Cytovance

 

>
90

60 to
90

<
60

 

	

Cancellation Fee
for Canceled or Rescheduled CGMP Batch

 

0%

50%

100%

 

7.10           Termination
of CGMP Batches during CGMP Manufacturing. If Client terminates the manufacture of a CGMP
Batch after Cytovance commences the CGMP Manufacturing Process for
any reason (except termination of the applicable SOW for cause),
Cytovance may withhold from Client the Deliverables (whether
completed or uncompleted) from such CGMP Batch until Client pays
all fees due for the CGMP Batch, which will be prorated according
to the Services completed up to the time of termination of the
terminated CGMP Batch.

 

8. 

Suspension of Services.

 

8.1           Failure
to Pay Invoices. Unless
different payment terms are set forth in the applicable SOW, upon
notice to Client, Cytovance may immediately suspend any Services at
any time, including the withholding of any Deliverables (whether
completed or in-process), if Client has failed to pay an invoice
within 60 days as required by Section 3.3.
Cytovance will have no liability for the suspended Services or
withheld Deliverables. Client shall pay any fees under
Section 7.9 that
result from the rescheduling or cancellation of any Batch affected
by the suspension of Services, and any fees for the procurement of
additional Raw Materials to replace Raw Materials that expired
because of the suspended Services. Cytovance will resume the
Services upon full payment of all invoices 60 or more days past
due.

 

 

 

19

 

 

 

 

8.2           Failure
to Maintain Approvals for Client Product. If Cytovance learns, or reasonably suspects in
good faith, that Client does not maintain the appropriate approvals
from any Regulatory Authorities for any Client Product as required
by Section 2.5,
Cytovance may, upon notice to Client, immediately suspend any
Services, including the withholding of any Deliverables (whether
completed or in-process), related to the Client Product at issue.
Cytovance will have no liability for the suspended Services or
withheld Deliverables. Client shall pay any fees under
Section 7.9 that
result from the rescheduling or cancellation of any Batch because
of the suspension of Services, and any fees for the procurement of
additional Raw Materials to replace Raw Materials that expired
because of the suspended Services. Cytovance will resume the
Services when Client demonstrates to Cytovance’s reasonable
satisfaction that Client has received and maintains the appropriate
approvals from all necessary Regulatory Authorities for the
manufacture of that Client Product. Any Services related to other
Client Product not affected by this Section will continue in
accordance with this Agreement and the applicable
SOW.

 

8.3           Failure
to Maintain Intellectual Property Rights. If Cytovance learns, or reasonably suspects in
good faith, that Client does not maintain the appropriate
intellectual property rights for Cytovance’s use of Client
Technology, Client Components, Client Equipment, or Client Product
as required by Section 15.3(c) or
Section 15.3(d),
Cytovance may, upon notice to Client, immediately suspend Services
and withhold any Deliverables (whether completed or in-process)
affected by Client’s failure to maintain the appropriate
intellectual property rights. Cytovance will have no liability for
the suspended Services or withheld Deliverables. Client shall pay
any fees under Section 7.9 that
result from the rescheduling or cancellation of any Batch because
of the suspension of Services, and any fees for the procurement of
additional Raw Materials to replace Raw Materials that expired
because of the suspended Services. Cytovance will resume the
Services when Client demonstrates to Cytovance’s reasonable
satisfaction that Client has received and maintains the appropriate
intellectual property rights required by Sections 15.3(c)
or 15.3(d).
Any Services not affected by this Section will continue in
accordance with this Agreement and the applicable
SOW.

 

8.4           Force
Majeure. Cytovance may suspend
any Services because of a force majeure event described in
Section 0.

 

9. 

Document and Sample
Retention.

 

9.1           Cytovance
Storage. Cytovance shall keep and maintain Service
Documentation and Samples for a period of two (2) years after the
completion of the relevant Services. Cytovance shall provide Client
with electronic copies of all Service Documentation. Client shall
pay all fees associated with such storage and maintenance of the
Service Documentation and Samples up front and in full each year as
set forth in the relevant SOW.

 

9.2           Return
or Destruction Samples

 

(e)           Conclusion
of Storage Period. At the conclusion of the two-year
retention period, Cytovance shall contact Client in writing to
inquire whether Client desires Cytovance to destroy the Samples or
transfer the Samples to Client or its designee. Within twenty (20)
business days of receiving the notice from Cytovance, Client shall
notify Cytovance in writing of its decision. If Cytovance does not
receive an answer from Client within twenty (20) business days of
delivery of the notice to Client, Cytovance may destroy the Service
Documentation and Samples without any liability to
Client.

 

 

 

20

 

 

 

 

(f)           Return
of Documents and Samples. If Client elects to have Cytovance
transfer the Samples to Client or its designee, Client shall pay
all fees and expenses related to the transfer of the Samples,
including all shipping charges, shipping insurance, and
Cytovance’s labor in gathering and preparing the Samples for
shipment, prior to the transfer of the Samples. Client shall pay
Cytovance for transfer of the Samples net 30 from date of Cytovance
Invoice.

 

10. 

Shipping.

 

10.1           In
General. All items (including, but not limited to, Client
Components, Client Equipment, Client Product, and Raw Materials)
shipped from Cytovance to Client or Client’s designee are
delivered Ex Works (Incoterms 2010) Cytovance Facility. Client is
responsible for all costs and risk of loss during shipment.
 Client shall procure (or
have Cytovance procure), at Client’s cost, insurance covering
damage or loss of any items during shipping.

 

10.2           Cytovance
Responsibilities.

 

(a)           Adherence
to Client Instruction. Cytovance shall package the items for
shipment at Client’s expense and in accordance with
Client’s written and reasonable instructions, or, if no
instructions are applicable, then in accordance with
Cytovance’s SOPs.

 

(b)           Remedy.

 

(i)           Items
other than Client Product. If Cytovance fails to package for
shipment any items in accordance with Client’s written and
reasonable instructions or Cytovance’s SOPs, as applicable,
and that failure results in the damage or destruction of the item
shipped, at Client’s sole discretion, Client’s sole and
exclusive remedy is either: (i) Cytovance will credit to
Client’s account the value of the repairs (if the item is
reparable), or (ii) pay the fair market value of the item (if the
item is destroyed), minus any insurance proceeds available to
Client from an insurance policy covering the item damaged or
destroyed, or any insurance proceeds that would have been available
to Client if the item should have been insured under this
Agreement.

 

(ii)           Client
Product. If the item destroyed or
damaged is Client Product, at Client’s sole discretion, as
Client’s sole and exclusive remedy, Cytovance will either:
(i) remanufacture Client Product at Cytovance sole expense; or (ii)
credit to Client’s account the fees charged by Cytovance for
the portion of the Client Product that was damaged or destroyed as
a result of Cytovance’s failure to follow Client’s
written and reasonable instructions or Cytovance’s SOPs, as
applicable.

 

10.3           Imports.
Client will be the importer of record for any items (including, but not limited to,
Client Components, Client Equipment, and Raw Materials)
shipped to Cytovance from a foreign country by or on behalf of
Client or its designee. Client shall comply with all applicable
United States import Laws and all applicable export Laws of the
country of exportation. Client shall obtain and pay for any
licenses, clearances, and other governmental authorization(s)
necessary for the import of any items to Cytovance. Client shall
select and pay the freight forwarder, who will solely be
Client’s agent. Client and its freight forwarder are solely
responsible for preparing and filing any documentation required for
the import.

 

 

 

21

 

 

 

 

10.4           Exports.
Client will be the exporter of record for any items (including, but not limited to,
Client Components, Client Equipment, Client Product, and Raw
Materials) shipped out of the United States to Client or its
designee. Client shall comply with all applicable United States
export Laws and all applicable import Laws of the country of
deportation. Client shall obtain and pay for any licenses,
clearances, and other governmental authorization(s) necessary for
the export of the items. Client shall select and pay the freight
forwarder, who will solely be Client’s agent. Client and its
freight forwarder are solely responsible for preparing and filing
the shipper’s export declaration and any other documentation
required for the export. In connection with the export of Client
Product to Client or its designee, Cytovance will deliver to Client
all certificates of analysis, certificates of conformity, and other
documentation with respect to the Client Product that is required
by applicable Law.

 

11.          
Client Product Recalls. If
Client performs or is subject to a Recall, Client is responsible
for coordinating the Recall. Client shall promptly notify Cytovance
if any Client Product is the subject of a Recall and provide
Cytovance with a copy of all relevant documents relating to the
Recall. Client is responsible for all of the costs and expenses of
such Recall, including any expenses incurred by Cytovance as a
result of the Recall. Cytovance may notify any Regulatory Authority
or other governmental or quasi-governmental authority of the
necessity of a Recall of Client Product as required by applicable
Law.

 

12.          
Audits and Facility Visits.

 

12.1        Manufacturing
Audits.

 

(a)           Duration
and Frequency. Client, at its
own expense, once per calendar year, upon at least 30 days’ prior written notice
to Cytovance (or 24 hours’ prior written notice to Cytovance
in the event of an incident involving the Facility or Services that
immediately justifies Client’s inspection or attention), may
perform a Manufacturing Audit. The Manufacturing Audit must
occur during normal business hours at mutually agreeable times, for
not more than two business days, and include not more than two
Client employees or representatives. All Client employees or
representatives conducting the audit must be qualified to conduct a
Manufacturing Audit.

 

(b)           Enlarged
Audits. If the Parties agree to more than one Manufacturing
Audit in a calendar year, or to a Manufacturing Audit that occurs
outside normal business hours, lasts for more than two business
days, or involves more than two Client employees or
representatives, Client shall pay a reasonable fee to Cytovance to
compensate Cytovance for accommodating the enlarged Manufacturing
Audit. The fee will be specified in an SOW or Change
Order.

 

(c)           For
Cause Audits. Upon reasonable advance notice to Cytovance,
Client may conduct a “for cause” audit if Cytovance
exhibits a material deficiency with CGMP requirements relating to
Client Product. The notice must set forth the specific deficiency
exhibited by Cytovance and the justification for the “for
cause” audit. The scope of a “for cause” audit is
limited to the material or deficiency contained in the notice to
Cytovance and must only directly relate to the Client Product at
issue. The timing, duration, and Client employees or
representatives allowed to participate in the “for
cause” audit must reflect the limited scope of the
audit.

 

 

 

22

 

 

 

 

(d)           Confidentiality.
All audited information, data, and documents examined during a
Manufacturing Audit or “for cause” audit will be
treated as Confidential Information of Cytovance (except the
information, data, or documents that are Client Confidential
Information), and Client may not remove or copy any Cytovance
Confidential Information data without Cytovance’s prior
written consent.

 

12.2      
Facility
Visits.

 

(a)           Virtual
Audit. Prior to or in connection with the commencement of
the Services, Client may conduct a virtual audit of
Cytovance’s Facilities. Cytovance will not charge Client for
accommodating the virtual audit.

 

(b)           Duration
and Frequency. Client, at its own expense, up to
two times per calendar year, upon at least ten (10)
days’ prior written notice to
Cytovance, may
visit Cytovance’s Facilities to casually observe the
Services. The visit must
occur during normal business hours at mutually agreeable times, up
to four hours during one business day, and include not more than
two Client employees or representatives. Access to the Facility is
limited to the public areas of the Facility and the areas of the
Facility in which Client Product is in process. However, access to
the actual manufacturing suite where Client Process is being
manufactured is prohibited.

 

(c)           Enlarged
Facility Visits. If the Parties agree to
more than two Facility visits in a calendar year, or to a Facility
visit that occurs outside normal business hours, lasts for more
than four hours or occurs over more than one business day, or
involves more than two Client employees or representatives, Client
shall pay a reasonable fee to Cytovance to compensate Cytovance for
accommodating the enlarged Facility visit. The fee will be
specified in an SOW or Change Order.

 

12.3           Person
in the Plant. If necessitated by the Services and agreed
upon by the Parties, Client may have one or more Persons in the
Plant. Each Person in the Plant will not be an employee, agent, or
independent contractor of Cytovance for any purpose.
Cytovance’s fees for supporting the Person(s) in the Plant
will be set forth in the SOW.

 

12.4           Liability
of Client. All
Client employees and representatives conducting the initial virtual
audit, a Manufacturing Audit, or “for cause” audit,
visitors to the Facility on Client’s behalf, and Person(s) in
the Plant must: (a) adhere to all Cytovance safety
procedures and Facility access rules and restrictions while located
at the Facility; (b) not interfere with Cytovance’s
operations or employees; and (c) refrain from inquiring about and
investigating other clients of Cytovance or services provided by
Cytovance to other clients. Cytovance may remove any individual
from the Facility at any time for failing to adhere to the rules in
this Section or any other reasonable rules or procedures
implemented by Cytovance. Client will be liable to Cytovance
for all damages caused by the acts or omissions of its employees
and representatives conducting a Manufacturing Audit or “for
cause” audit, visitors to the Facility on Client’s
behalf, and Person(s) in the Plant.

 

 

 

23

 

 

 

 

12.5           Regulatory
Authority’s Audit of Cytovance. Any notice from
Cytovance to Client regarding a Regulatory Authority’s audit
or inspection of Cytovance or the Facility will be handled in
accordance with the Quality Technical Agreement.

 

13.         
Intellectual Property.

 

13.1           Inventorship.
Inventorship of any Invention will be determined according to the
patent laws of the United States of America.

 

13.2           Client
Inventions. As between the Parties, Client will own all
right, title and interest in and to any Client Inventions.
Cytovance hereby irrevocably sells, assigns, and transfers to
Client all of Cytovance’s right, title, and interest in and
to all Client Inventions. Cytovance shall cooperate with Client as
may be necessary for the perfection, enforcement, or defense of any
intellectual property rights in or to any Client
Inventions.

 

13.3           Licenses
to Cytovance. Client grants to Cytovance a non-exclusive,
irrevocable, fully paid-up, worldwide license (including the right
to sublicense to a subcontractor in accordance with Section
2.9) to make, have made, use, and have
used Client Technology, Client Inventions, Client Components,
Client Equipment, and Client Product solely to the extent necessary
to perform Services in accordance with this Agreement and the
relevant SOW.

 

13.4           Cytovance
Inventions. As between the Parties, Cytovance will own all
right, title, and interest in and to any Cytovance Inventions that
were discovered, first conceived, made, developed, or reduced to
practice in performance of the Services. Except in the case of
Cytovance Inventions which include or is based on Client
Technology, Client hereby irrevocably sells, assigns, and transfers
to Cytovance all of Client’s right, title, and interest in
and to all Cytovance Inventions. Client shall cooperate with
Cytovance as may be necessary for the perfection, enforcement, or
defense of any intellectual property rights in or to any Cytovance
Inventions.

 

13.5           Licenses
to Client. Cytovance grants to Client a non-exclusive,
irrevocable, fully paid-up, worldwide license (including the right
to sublicense) to use, have used, make, and have made Cytovance
Inventions incorporated into Client Product solely for the purposes
of making, having made, using, offering to sell, selling, having
sold, importing, and exporting Client Product. However, the
non-exclusive license from Cytovance to Client for the use of
Cytovance’s Keystone Expression System® or
Cytovance’s CHO expression system is not included in this
Agreement, and will be set forth in a separate license agreement
between Cytovance and Client.

 

13.6           No
Implied Licenses. This
Agreement does not confer upon a Party any right, title, or
interest to or under any Patent, Know-How, or other intellectual
property right owned or controlled by the other Party, except for
those rights expressly granted in this Section 13. All
rights, title, and interests not expressly conveyed herein are
reserved by the respective Parties.

 

 

 

24

 

 

 

 

13.7           Technology
Transfer Assistance. Client, at
its option, may elect to engage a Third Party to perform the
Services or services substantially similar to the Services during
or after the termination or expiration of this Agreement. Cytovance
will provide assistance to Client in transferring to the Third
Party any and all of Client’s rights in Client Inventions,
Client Product, Client’s licensed rights to Cytovance
Inventions, and any other technology, processes, methodologies, and
information necessary for the making, scale-up, processing,
manufacture, filling, or bulk packaging of Client Product. However,
Client shall compensate Cytovance for its time complying with this
Section at an agreed-upon rate and reimburse Cytovance for its
out-of-pocket expenses. Additionally, Client will be liable to
Cytovance for any breach by the Third Party of any licenses from
Cytovance to Client with regards to the Client Product under
Section 13.5.

 

14.         
Confidentiality.

 

14.1           Disclosure
of Confidential Information. The Parties may disclose its
Confidential Information to the other in connection with this
Agreement. Each Discloser warrants that it owns or is otherwise
authorized to disclose its Confidential Information to the
Recipient and that disclosure of its Confidential Information will
not violate any obligations it has to any other Third Party. If a
Discloser’s Confidential Information contains any
confidential or proprietary information belonging to another Third
Party, the Discloser warrants that it is authorized to disclose
that Third Party’s information to the Recipient.

 

14.2           Previous
Disclosures of Confidential Information. All information
considered Confidential Information under the Mutual Confidential Disclosure
Agreement, effective September 12, 2019 between the Parties
is considered Confidential Information under this Agreement. This
Agreement will control the handling of any Confidential Information
of either Party, regardless of whether the Confidential Information
was received under the agreement referred to in the foregoing
sentence or under this Agreement.

 

14.3           Recipient
Obligations. The Recipient may use the Discloser’s
Confidential Information solely for the Services and in furtherance
of this Agreement. The Recipient shall not disclose to any Third
Party any Confidential Information of the Discloser. The Recipient
shall use at least the same degree of care to preserve the
confidentiality of the Discloser’s Confidential Information
as the Recipient uses to protect its own Confidential Information,
but in no event less than a reasonable standard of care. The
Recipient shall promptly notify the Discloser upon the
Recipient’s discovery of any unauthorized use or disclosure
of the Discloser’s Confidential Information.

 

14.4           Excluded
Information. Any
idea, documents, data, or information, in any form or medium, is
not considered “Confidential Information” of the
Discloser if the Recipient can demonstrate with competent evidence
that such data or information: (a) is or becomes
generally known or available through no breach of this Agreement by
the Recipient; (b) is already known by the Recipient at the
time of receiving the information from the Discloser; (c) is
furnished to the Recipient by a Third Party on a non-confidential
basis and the Third Party is not known or suspected by the
Recipient to be bound by confidentiality obligations to the
Discloser; or (d) is independently developed by the Recipient
without any use of the Discloser’s Confidential Information.
An exception to Confidential Information will not apply to a
combination of items of Confidential Information if one or more
individual items of the combination, but not all, fall within the
exception.

 

 

 

25

 

 

 

 

14.5      
Permitted
Disclosures.

 

(a)           Authorized
Agents. The Recipient may disclose the Discloser’s
Confidential Information to its Authorized Agents in connection
with the performance of Services or exercising Recipient’s
rights under this Agreement who have signed confidentiality
agreements containing, or are otherwise bound by, confidentiality
obligations at least as restrictive as those in this
Agreement.

 

(b)           Compelled
Disclosure. The Recipient may disclose the Discloser’s
Confidential Information in response to a valid order, rule, or
regulation of a court or governmental body with competent
jurisdiction. However, the Recipient shall first give notice to the
Discloser (if legally permissible and practicable) so that the
Discloser may intervene and seek a protective order or other
remedy.

 

(c)           Investors
and Acquirers. The Recipient may disclose the
Discloser’s Confidential Information to actual or prospective
Third Party investors, lenders, or acquirers of the Recipient to
the extent relevant and for the purpose of evaluating any actual or
potential investment, lending relationship, or acquisition of the
Recipient if each such Third Party is bound by obligations of
confidentiality and non-use substantially consistent with those
contained in this Agreement and the Recipient informs the Third
Party of the restrictions and obligations under this Agreement
prior to such disclosure.

 

(d)           Client
Product Disclosures. Client may disclose Cytovance’s
Confidential Information: (i) to potential investors, acquirers, or
licensees of Client Product, (ii) to Regulatory Authorities in
Investigational New Drug Applications; or (iii) to obtain
governmental licenses or marketing approval, including a Biologics
License Application, regarding Client Product. However, Client must
limit disclosure of Cytovance’s Confidential Information to
what is reasonably necessary to satisfy the applicable requirements
of such regulatory agency and seek to avoid or minimize any
disclosure to the public of such Confidential
Information.

 

14.6        
Ownership; No License. As
between the Parties, the Discloser’s Confidential Information
is the property of the Discloser. Except as described in Section
13, this Agreement does not grant the
Recipient any property rights, by license or otherwise, to any of
the Discloser’s Confidential Information, nor to any
intellectual property right based on the Discloser’s
Confidential Information.

 

14.7        
Return or Destruction of
Confidential Information. Upon termination or expiration of
this Agreement, if requested in writing by the Discloser, the
Recipient shall promptly return to the Discloser or destroy (and
certify the destruction of) the Discloser’s Confidential
Information in the Recipient’s possession. However, the
Recipient may retain one copy of the Discloser’s Confidential
Information for legal or regulatory compliance reasons and will not
be required to access or delete electronic backup, active archive,
or archived copies of the Discloser’s Confidential
Information that were generated in accordance with the
Recipient’s bona fide backup or archiving practices. Any
copies of the Discloser’s Confidential Information retained
by the Recipient will remain subject to the confidentiality and
non-use provisions of this Agreement (and exceptions
thereto).

 

14.8        
Term of Confidentiality. A
Recipient’s obligations under this Agreement (and exceptions
thereto) with respect to confidentiality and non-use of the
Discloser’s Confidential Information will remain binding upon
the Recipient for a period of five years after the date of this
Agreement’s expiration or termination.

 

 

 

26

 

 

 

 

15.         
Representations and Warranties.

 

15.1      
General Covenants, Representations
and Warranties. Each Party represents and warrants to the
other Party that:

 

(a)           It
has the full right and authority to enter into this Agreement and
to perform this Agreement in accordance with its
terms.

 

(b)           Neither
the execution of this Agreement nor the performance of or
compliance with this Agreement will: (i) conflict with or result in
a breach of any provision of the Party’s certificate of
incorporation, bylaws, or similar governing documents; or (ii)
conflict with any obligations to, or any agreements with, any Third
Party.

 

(c)           It
has obtained and will at all times during the term of this
Agreement maintain and comply with all licenses, permits, and
authorizations necessary to perform its obligations under this
Agreement as required by applicable Law.

 

(d)           It
is in good standing under the laws of each state or other
jurisdiction in which it is incorporated or engages in business
activities.

 

15.2      
Cytovance Representations and
Warranties. Cytovance represents and warrants to Client
that:

 

(a)           Cytovance
will perform the Services in accordance with the Service Standard
and Client Product will be manufactured in accordance with the
applicable Manufacturing Process and, if a CGMP Batch, be
manufactured free of Defective CGMP Manufacturing.

 

(b)           Cytovance
is not under investigation by the FDA for debarment, nor is
Cytovance presently or in the last five years been debarred,
pursuant to 21 U.S.C. §335a or any other similar applicable
Law, and Cytovance will not knowingly use the services of any
person or Entity debarred or suspended under 21 U.S.C. § 335a
in any capacity related to the Services.

 

(c)           Cytovance
will not knowingly hire or retain as an officer or employee any
individual who has been convicted of a felony under the laws of the
United States for conduct relating to the regulation of any drug
product under the United States Food, Drug, and Cosmetic
Act.

 

(d)           At
all times during the Services Cytovance will maintain adequate
comprehensive public liability and property damage insurance, or
equivalent programs of self-insurance, with single limits of at
least $2,000,000 per occurrence and $5,000,000 in the aggregate.
Cytovance agrees to issue to Client a Certificate of Insurance
evidencing such coverage within 30 days of Client’s written
request. Any deductible and self-insurance retention is the sole
responsibility of Cytovance.

 

 

 

27

 

 

 

 

15.3       
Client Representations and
Warranties. Client represents and warrants to Cytovance
that:

 

(a)           Client
shall: (i) provide complete and accurate scientific data necessary
to Cytovance’s performance of Services; (ii) provide
Cytovance with all information necessary to effect the reliable
transfer of Client Technology to Cytovance for performance of the
Services; (iii) provide Cytovance with sufficient Client Components
necessary for the performance of Services; (iv) if applicable,
review and approve in-process and finished Client Product test
results; and (v) be responsible for the preparation of all Client
Product-related submissions to Regulatory Authorities and other
governmental and quasi-governmental entities.

 

(b)           Client
will maintain all appropriate regulatory approvals required by
Section 2.5. Client will promptly
notify Cytovance if it fails to maintain any of these
approvals.

 

(c)           Client
will retain all rights, title, and interest in and to Client
Components, Client Equipment, Client Technology, and Client Product
necessary for Cytovance’s performance of Services, including
all rights necessary for Cytovance to manufacture Client Product in
accordance with this Agreement. Client will promptly notify
Cytovance if it fails to maintain any of these rights.

 

(d)           Cytovance’s
use of Client Components, Client Equipment, Client Technology, and
Client Product will not violate or infringe on the Patents,
Know-How, trademarks, service marks, copyrights, any other
intellectual property right, or confidential information of any
Third Party. Client will promptly notify Cytovance if it learns or
suspects that any of these Third Party will by violated by
Cytovance’s use of Client Components, Client Equipment,
Client Technology, and Client Product.

 

(e)           Client
will hold, use, market, sell, and dispose of any Deliverables
provided by Cytovance to Client in accordance with all applicable
Law.

 

(f)           Client
will procure and maintain, from the Effective Date through the date
that is two years after the expiration date or last date of use
(whichever is later) of all Client Product produced under this
Agreement, commercial general liability, clinical trial product
liability, and contractual liability insurance coverage (the
“Client
Insurance”). Each type of coverage of the Client
Insurance must cover amounts not less than $3,000,000 per
occurrence and must be with an insurance carrier reasonably
acceptable to Cytovance. Client shall name Cytovance as an
additional insured on the Client Insurance and Client shall
promptly deliver a certificate of Client Insurance and endorsement
of additional insured to Cytovance evidencing such coverage. If
Client fails to furnish such certificates or endorsements, or if at
any time during the term of this Agreement Cytovance learns of the
cancellation or lapse of the Client Insurance and Client fails to
rectify the same within 10 days after notice from Cytovance,
Cytovance, at its option, may terminate this Agreement. Any
deductible and self-insurance retention is the sole responsibility
of Client.

 

15.4      
Warranty Disclaimer. EXCEPT
FOR THE WARRANTIES EXPRESSLY STATED IN THIS SECTION 15 AND SECTION 14.1, NEITHER PARTY PROVIDES TO THE OTHER PARTY
ANY WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE MATERIALS
AND SERVICES PROVIDED UNDER THIS AGREEMENT, AND EACH PARTY WAIVES
ALL SUCH WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED
TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.

 

 

 

28

 

 

16.        
Limitations of Liability.

 

16.1           Remedies
for Failed Services. THE REMEDIES IN SECTION 4.1(e), SECTION 4.2(f), SECTION 4.3(e), SECTION 5.3, SECTION 6.4,
SECTION 7.4, SECTION 7.8(f), AND
SECTION 10.2(b), AS APPLICABLE,
CONSTITUTE THE SOLE AND EXCLUSIVE REMEDY OF CLIENT AND THE SOLE AND
EXCLUSIVE LIABILITY OF CYTOVANCE FOR FAILED SERVICES OR
NON-CONFORMING DELIVERABLES CAUSED BY ANY REASON WHATSOEVER. UNDER
NO CIRCUMSTANCES WILL CYTOVANCE BE LIABLE FOR INDIRECT, COLLATERAL,
SPECIAL, CONSEQUENTIAL, PUNITIVE, OR OTHER DAMAGES, LOSSES, OR
EXPENSES IN CONNECTION WITH THE PRODUCTION OR DELIVERY OF
DELIVERABLES UNDER THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO,
LOSS OF USE, LOST PROFITS, THE COST OF COVER, OR THE COST OF A
RECALL, REGARDLESS OF WHETHER SUCH CLAIMS FOR DAMAGES ARE FOUNDED
IN TORT, CONTRACT, STATUTE, OR OTHER SOURCES OF
LAW. 

 

16.2      
Limit of
Liability.

 

(a)           Waived
Damages. WITHOUT LIMITING A PARTY’S DUTY TO DEFEND AND
INDEMNIFY THE OTHER PARTY AGAINST A THIRD PARTY CLAIM AS DESCRIBED
IN SECTION 17, NEITHER PARTY WILL BE
ENTITLED TO INCIDENTAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY, OR
SPECIAL DAMAGES, WHETHER OR NOT FORESEEABLE, ARISING IN CONNECTION
WITH THE DEFAULT OR BREACH OF ANY OBLIGATION OF THE OTHER PARTY
UNDER THIS AGREEMENT, ANY SOW, THE QUALITY TECHNICAL AGREEMENT, OR
ANY OTHER DOCUMENTS RELATED THERETO.

 

(b)           Maximum
Liability. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE
CONTRARY, IN NO EVENT WILL CYTOVANCE’S TOTAL LIABILITY TO
CLIENT EXCEED SIX MILLION DOLLARS.

 

 

 

29

 

 

 

 

17.        
Indemnification.

 

17.1           By
Client.

 

(a)           Duty
to Defend. Except to the extent a claim for indemnification
results from the fraud or criminal conduct of Cytovance, Client
shall defend each and all Cytovance Indemnitees against any Third
Party lawsuit, action, claim, demand, assessment, proceeding, or
subpoena (collectively, a “Claim”) arising directly
or indirectly from or related to one or more of the following: (i)
Client’s breach, violation, non-compliance, or
non-performance of any of the terms of this Agreement; (ii)
Client’s gross negligence or willful misconduct; (iii) the
acts and omissions of any person who visits the Facility on behalf
of Client, including auditors, Facility visitors, and Persons in
the Plant; (iv) the destruction of Client Components in accordance
with Section 4.1(e); (v) any suspension
of Services or withholding of Deliverables (whether completed or in-process) in
accordance with Section 3.3 or Sections
8.1–8.3; (vi) the destruction of Service
Documentation and Samples in accordance with Section 9.2; (vii) Client’s violation of the
terms of any Third Party Licensed Materials used in the production
of Client Product or incorporated into Client Product; (viii) the
marketing, distribution, or use of any Deliverables (including, but
not limited to, Client Product, Conforming CGMP Product, and Client
Product from Non-Conforming CGMP Batches);
(ix) any allegation that the composition of matter or use of Client
Technology infringes the Patents, Know-How, trademarks, service
marks, copyrights, any other intellectual property rights, or
confidential information rights of a Third Party; and (x) any
allegation that the composition of matter or use of Deliverables
infringes the Patents, Know-How, trademarks, service marks,
copyrights, any other intellectual property rights, or confidential
information rights of a Third Party.

 

(b)           Duty
to Indemnify. In addition to Client’s duty to defend,
with regards to any Claim in Section 17.1(a), except
to the extent a claim for indemnification results from the fraud or
criminal conduct of Cytovance, Client shall indemnify any Cytovance
Indemnitee against any loss, cost, damage, or expense, including
attorney fees and litigation expenses (collectively,
“Loss”), awarded to any
Third Party or agreed to in a settlement by Cytovance with that
Third Party in accordance with Section 17.4.

 

(c)           Breach
of Duty to Defend or Indemnity. If Client breaches its duty
to defend and indemnify a Cytovance Indemnitee in accordance with
Sections 17.1(a) and Section 17.1(b), Client shall reimburse that Cytovance
Indemnitee for its attorney fees and any Loss incurred as a result
of the Third Party Claim and the reasonable attorney fees and
litigation expenses incurred by that Cytovance Indemnitee in
recouping the Loss from Client.

 

17.2       By
Cytovance.

 

(a)           Duty
to Defend. Except to the extent a claim for indemnification
results from the fraud or criminal conduct of Client, Cytovance
shall defend each and all Client Indemnitees against any Third
Party Claim arising directly or indirectly from or related to one
or more of the following: (i) Cytovance’s breach, violation,
non-compliance, or non-performance of any of the terms of this
Agreement; (ii) Cytovance’s gross negligence or willful
misconduct; (iii) Cytovance’s breach of its obligations with
respect to any Third Party Licensed Materials used by Cytovance in
the Services; and (iv) any claim that Cytovance Technology
infringes the Patents, Know-How, trademarks, service marks,
copyrights, any other intellectual property rights, or confidential
information rights of a Third Party.

 

(b)           Duty
to Indemnify. In addition to Cytovance’s duty to
defend, with regards to any Claim in Section 17.2(a), except
to the extent a claim for indemnification results from the fraud or
criminal conduct of Client, Cytovance shall indemnify Client
against any Loss awarded to any Third Party or agreed to in a
settlement by Client with that Third Party in accordance with
Section 17.4.

 

(c)           Breach
of Duty to Defend or Indemnity. If Cytovance breaches its
duty to defend and indemnify a Client Indemnitee in accordance with
Sections 17.2(a) and Section 17.2(b), Cytovance shall reimburse that Client
Indemnitee for its attorney fees and any Loss incurred and the
reasonable attorney fees and litigation expenses incurred by that
Client Indemnitee in recouping the Loss from
Cytovance.

 

 

 

30

 

 

 

 

17.3      
Indemnification
Procedure.

 

(a)           Notice
of Claim. A Cytovance Indemnitee or Client Indemnitee
entitled to defense and indemnification under Section 17.1 or Section 17.2 (the “Indemnified Party”) shall
inform the indemnifying Party (the “Indemnifying Party”) of
the Third Party Claim giving rise to the duty to defend and
indemnify within seven days after receiving notice of such Claim.
Delayed or late notice will not absolve an Indemnifying Party of
its indemnification obligations to the Indemnified Party, but the
Indemnifying Party will not be responsible for any Loss resulting
solely from a delayed or late notice.

 

(b)           Acceptance
of Claim. Within seven (7) days of receipt of the notice of
Claim, the Indemnifying Party shall give the Indemnified Party
notice of whether it accepts or in good-faith disputes its duty to
defend and indemnify. If the Indemnifying Party accepts its duty to
defend and indemnify, the Indemnified Party shall cooperate with
the Indemnifying Party and the Indemnifying Party’s insurer
as the Indemnifying Party may reasonably request, and at the
Indemnifying Party’s cost and expense. The Indemnified Party,
at its own expense and with counsel of its choice, will have the
right to participate in the defense of any Claim that has been
assumed by the Indemnifying Party.

 

(c)           Dispute
of Duty to Indemnify. An Indemnifying Party’s
good-faith dispute of its duty to defend and indemnify does not
absolve the Indemnifying Party of its actual duty to defend and
indemnify the Indemnified Party. Moreover, the Indemnified Party is
free pursue any remedy available at law, equity, and as described
in Section 17.1(c) or Section 17.2(c), as applicable, to require the
Indemnifying Party to fulfill its duty to defend and
indemnify.

 

17.4      
Settlement with a Third
Party. No Indemnifying Party will be obligated to indemnify
an Indemnified Party in connection with any settlement of a Claim
made by the Indemnified Party without the Indemnifying
Party’s written consent. However, the Indemnifying Party
shall not unreasonably withhold, condition, or delay its consent.
If an Indemnifying Party receives notice of the Indemnified
Party’s intent to settle a Claim and does not respond within
seven days, the Indemnifying Party will be presumed to have
consented to the settlement.

 

18.        
Terms of this Agreement, the Quality Technical Agreement, and
SOWs.

 

18.1      
Term of this
Agreement.

 

(a)           Initial
Term. The term of this Agreement commences on the Effective
Date and ends on the fifth anniversary of the Effective Date or the
date this Agreement is terminated pursuant to Section 19, whichever occurs first, subject to the
provisions of Section 18.4.

 

(b)           Limited
Extension. In the event Section 18.4 applies, this Agreement will continue
solely with respect to any in-process SOW until that SOW(s) is
completed or is terminated, and no other SOWs may be entered into
by the Parties under this Agreement.

 

(c)           Extension
of Term. Regardless of whether Section 18.4 applies, prior to the expiration of the
initial term of this Agreement, the Parties may agree in writing to
extend the term of this Agreement, with or without modification or
amendment.

 

 

 

31

 

 

 

 

18.2      
Term of Quality
Technical Agreement.

 

(a)           Initial
Term. The term of the Quality
Technical Agreement will expire upon the termination of this
Agreement, subject to the provisions of Section 18.4 if not otherwise renewed as part of any
extension of this Agreement as set forth in Section
18.1(c).

 

(b)           Limited
Extension. In the event Section 18.4 applies, the
Quality Technical Agreement will continue solely with
respect to the in-process SOW until that SOW(s) is completed or is
terminated.

 

18.3      
Term of SOW. The term of any
SOW will expire on the earlier of: (i) the completion of Services
under such SOW; or (ii) the date such SOW is terminated pursuant to
Section 19. The termination of
any SOW will not cause the termination of this Agreement, the
Quality Technical Agreement, or any other SOW.

 

18.4      
Termination of Agreement and
Uncompleted SOWs. If this Agreement is terminated or expires
and a SOW is then in process but has not yet completed, the SOW
will continue in accordance with its terms and the terms of this
Agreement and the Quality Technical Agreement (if applicable to any
in-process SOW) until completion of the SOW or the termination of
the SOW pursuant to Section 19.

 

19.        
Justifications for Termination.

 

19.1      
Termination for
Convenience.

 

(a)           Termination
of Agreement. Client may terminate this Agreement for
convenience by providing one hundred eighty (180) days’ prior
written notice to Cytovance. Upon receipt of such notice of
termination for convenience, Cytovance will scale down the affected
portion of any in-process SOW and avoid (or minimize, where
non-cancelable) any further related expenses. All fees and
reimbursements, if any, for termination of this Agreement will be
paid as set forth in Section 20.

 

(b)           Termination
of SOW. Unless otherwise stated in the SOW, Client may
terminate any SOW for convenience by providing 90 days’ prior
written notice to Cytovance. Upon receipt of such notice of
termination for convenience, Cytovance will scale down the affected
portion of the SOW and avoid (or minimize, where non-cancelable)
any further related expenses. All fees and reimbursements, if any,
for termination of an SOW under this Section will be paid as set
forth in Section 20.

 

19.2      
Termination for Bankruptcy.
Upon 30 days written notice to the other Party, either Party may
terminate this Agreement if the other Party files for bankruptcy,
reorganization, liquidation, or receivership proceedings (or is
forced into such proceedings by another party), or the other Party
assigns a substantial portion of its assets for the benefit of
creditors.

 

19.3      
Termination for Force
Majeure. Upon written notice to the other Party, either
Party may terminate this Agreement if a force majeure event results
in a delay of either Party’s performance under this Agreement
for a period that exceeds 90 days as described in Section
0.

 

 

 

32

 

 

 

 

19.4      
Termination for
Cause.

 

(a)           Notice
of Breach. If either Party believes that the other is in
material breach of this Agreement or an SOW, the Party may deliver
notice of the breach to the breaching Party. The Party receiving
the notice will have seven days from receipt of such notice to
dispute the breach in good faith or commence a cure of the breach.
If the Party receiving the notice commences a cure, it will have 60
days from receipt of the notice of breach to complete the cure,
except when the breach is a non-payment of an invoice, in which
case the breach must be cured within 15 days from the date of
notice.

 

(b)           Failure
to Remedy Breach. If the Party receiving the notice of
breach fails to cure or dispute the breach within the applicable
periods set forth Section 19.4(a), the
Party delivering the notice of breach may terminate this Agreement
or the applicable SOW, effective upon delivery of notice of
termination to the other Party.

 

(c)           Dispute
Regarding Breach. If the Party receiving the notice of
breach in good faith disputes that it is in breach or disputes that
it failed to cure or remedy the breach, the matter will be
addressed under Section 22. In such
event, the notifying Party may not terminate this Agreement for
cause until the date that it has been determined in accordance with
Section 22 that the allegedly breaching
Party is in material breach of this Agreement.

 

20.        
Effect of
Termination.

 

20.1      
Prior
Obligations. Termination or
expiration of this Agreement or any SOW will not relieve either
Party of any obligations (including payment obligations) which
accrued prior to the date of termination or
expiration. 

 

20.2      
Payments to
Cytovance. If Client terminates
this Agreement or any SOW or Change Order for any reason, Client
shall reimburse Cytovance for all: (i) Raw Materials, Third
Party Licensed Materials, outsourced services, other supplies or
services ordered by, and any other obligations incurred by,
Cytovance pursuant to the terminated SOW(s) or Change Order(s)
prior to termination; (ii) work-in-process commenced by Cytovance
pursuant to any terminated SOW(s) or Change Order(s); and (iii)
completed Client Product at applicable fees as of the date of
termination. Any remaining Client Components will be handled
pursuant to Section 4.1(f).
Any remaining Raw Materials will be handled pursuant to
Section 4.2(g).
Storage fees for Client Equipment will accrue under Section
5.5
until the Client Equipment is returned
to Client or its designee in accordance with Section
5.6.

 

21.
        Correspondence and
Notices.

 

21.1      
Ordinary Course Notices.
Correspondence, reports, documentation, and any other written
communications between the Parties in the ordinary course of
performing this Agreement must be delivered by hand, or sent by
mail, fax, or email or to the employee or agent of the other Party
who is designated by the other Party to receive such written
communication.

 

 

 

33

 

 

 

 

21.2      
Other
Notices. Any notices regarding this Agreement, other than ordinary course
communications, must be delivered to the other Party at the
address specified below or at such other address as the other Party
specifies in writing. The notice must be in writing and will be
deemed given: (a) upon personal delivery to the appropriate
address; (b) if sent by certified mail to a recipient in the
same country, three business days after the date of mailing (if
mailed internationally, then seven business days after the date of
mailing), or the date that the recipient signs for the delivery,
whichever occurs first; or (c) if sent by reputable overnight
courier, the next business day that the courier regularly makes
deliveries.

 

All
correspondence to Client must be addressed as follows:

 

GT
Biopharma, Inc.

9350
Wilshire Blvd., Suite 203

Beverly
Hills, CA 90212

Attention: Anthony Cataldo,
CEO and Steve Weldon, CFO

 

All
correspondence to Cytovance must be addressed as
follows:

 

Cytovance
Biologics, Inc.

800
Research Parkway, Suite 200

Oklahoma City,
Oklahoma 73104

Attention: Matt
Delaney, VP of Business Development

Email:
mdelaney@cytovance.com

        
   info@cytovance.com

 

with a
copy to:

 

John B.
Davis & Associates, PLLC

101
Park Avenue, Suite 250

Oklahoma City,
Oklahoma 73102

Attention: John B.
Davis

Email:  
john@jbdavislaw.com

   
         info@jbdavislaw.com

 

22.        
Dispute
Resolution.

 

22.1           Disputes
Regarding Client Product. Any
dispute regarding Cytovance’s performance of research and
development Services, including the manufacture of an R&D
Batch, the manufacture of an Engineering Batch, or the manufacture
of a CGMP Batch (including Latent Defects) will be handled in
accordance with Section 6.2,
Section 7.2, and
Section 7.8, as
applicable.

 

 

 

34

 

 

22.2           Good
Faith Negotiations. Prior to initiating any court,
administrative, or other action to enforce or terminate this
Agreement, the claimant shall give notice to the other Party
detailing the nature of the dispute and all relevant facts. Upon
the other Party’s receipt of the notice, the Parties shall in
good faith attempt to resolve such dispute. No court,
administrative, or other action may be initiated until the Parties
have exhausted good faith settlement attempts by direct
negotiation, which will take no more than 30 days unless otherwise
agreed by the Parties.

 

22.3           Injunctive
Relief. If the either Party
breaches this Agreement, the aggrieved Party may suffer an
irreparable injury that no remedy at law would adequately
compensate the aggrieved Party for such injury. Accordingly, the
aggrieved Party will have the right to enforce this Agreement by
injunction or other equitable relief, without bond and without
prejudice to any other rights and remedies that the aggrieved Party
may have for the other Party’s breach of this
Agreement.

 

22.4           Choice
of Law and Venue. This Agreement is governed by and will be
construed in accordance with the laws of the State of Delaware
without regard to its conflicts of laws principles and, if
applicable, the federal laws of the United States. Any lawsuit
regarding this Agreement must take place in the state courts of
Delaware located in New Castle County, Delaware, and each Party
consents to the jurisdiction of these courts. However, if federal
jurisdiction exclusively applies to any issue regarding this
Agreement, each Party consents to the jurisdiction of the federal
courts located in New Castle County for resolution of that issue
and the remaining issues (if any) may be heard by that federal
court or the Delaware state courts in New Castle County in
accordance with applicable subject matter jurisdiction
rules.

 

22.5           Attorney
Fees. The successful Party in any litigation or other
dispute resolution proceeding to enforce the terms and conditions
of this Agreement will be entitled to recover from the other Party
reasonable attorney fees and related costs incurred in connection
with such litigation or dispute resolution proceeding, to be
determined by the presiding court or other dispute resolution
official.

 

23.        
Publicity. Without the prior
written consent of the other Party, neither Party will make any
public announcement, issue any press release, nor use the name of
the other Party or its employees in any advertising or sales
promotional material.

 

24.        
Non-solicitation of
Employees. From the Effective Date until 12 months after the
expiration or termination of this Agreement, neither Party may, nor
cause a Third Party to, directly solicit or recruit any employee,
consultant, or contractor of the other Party to terminate his, her,
or its relationship with the other Party in order to accept or
enter into any employment or independent contractor or other
business relationship with any Third Party. However, either Party
may engage, hire, or enter into business with any employee,
consultant, or contractor of the other Party who contacted the
Party without direct solicitation or recruitment by the Party or a
Third Party at the direction of the Party. Additionally, this
Section does not prohibit either Party, whether by itself or
through a Third Party, from advertising any open positions of
employment to the general public.

 

 

 

35

 

 

25.         Force
Majeure.

 

25.1           Force
Majeure Event. Neither Party shall be held liable or responsible
to the other Party nor be deemed to have defaulted under or
breached this Agreement for failure or delay in fulfilling or
performing any term of this Agreement to the extent, and for so
long as, such failure or delay is caused by or results from causes
beyond the reasonable control of the affected party including but
not limited to fire, floods, earthquakes, hurricanes, acts of
nature, embargoes, war, acts of war (whether declared or not), acts
of terrorism, insurrections, riots, civil unrest, labor strikes,
lockouts or other labor disturbances, epidemics, pandemics or other
public health disasters, acts of God, government imposed business
closures resulting from “Shelter-in-Place” orders, or
omissions or delays in acting by any governmental
authority.

 

25.2           Effect
of Force Majeure Event. Any time specified or estimated for
completion of performance inhibited by a force majeure event will
be automatically extended for a period of 90 days from the end of
such event to allow the affected Party(ies) to recover from the
disability caused by the event. When a force majeure event occurs,
the Parties will discuss in good faith the force majeure
event’s impact on the Services. If the force majeure event
results in a delay of performance that exceeds 90 days, either
Party may, but is not obligated to, terminate this
Agreement.

 

25.3           Services
Invalidated by Force Majeure Event. If any part of the
Services is invalid as a result of a force majeure event and this
Agreement is not terminated as a result of the force majeure event,
Cytovance will, upon written request from Client, but at
Client’s sole cost and expense, repeat that part of the
Services affected by the disability.

 

26.        
English
Language. This Agreement, the
Quality Technical Agreement, each SOW and Change Order, including
their respective amendments, modifications, waivers, and other
related documents, any notices required by this Agreement, and all
litigation or dispute resolution proceedings relating to this
Agreement must be in the English language. The English language
will control any documents or proceedings also translated into
another language.

 

27.        
Amendment and Modification.
This Agreement may be amended or modified only by a written
instrument duly executed by an authorized representative of each
Party.

 

28.        
Waiver. A
Party’s waiver of any right or remedy under this Agreement
must be in writing and signed by an authorized representative of
the waiving Party. A Party’s failure to enforce any
right or remedy under this Agreement is not a waiver of any rights
or remedies unless a written waiver is obtained from that
Party.

 

29.        
Assignment. This Agreement
may not be assigned or otherwise transferred by either Party
without the prior written consent of the other Party.
Notwithstanding the foregoing sentence, either Party may, without
the consent of the other Party, assign this Agreement to its
Affiliate or to its successor in interest in connection with a
sale, merger, acquisition, or similar transaction involving
substantially all of its stock or assets. Any permitted assignee
shall assume all obligations of its assignor under this Agreement.
Any attempted assignment not in accordance with this Section is
null and void and of no legal effect.

 

 

 

36

 

 

 

 

30.        
Binding Effect. The terms
and conditions of this Agreement are binding upon, and will inure
to the benefit of, the Parties and their respective successors and
assigns.

 

31.        
Conflicts. In the event of a
conflict between the terms and conditions of this Agreement and any
SOW, the terms and conditions of this Agreement will control. In
the event of a conflict between any of the provisions of the
Quality Technical Agreement and this Agreement with respect to
quality responsibilities, including compliance with CGMP, the
provisions of the Quality Technical Agreement will control. In the
event of any other conflict between the provisions of the Quality
Technical Agreement and this Agreement or any SOW (e.g., commercial
terms, pricing, and dispute resolution), the provisions of this
Agreement or the SOW, respectively, will prevail.

 

32.        
Severability. The provisions
of this Agreement are severable and if any provision of this
Agreement is determined to be invalid, illegal, or unenforceable
for any reason, such provision will be adjusted rather than voided,
to the extent possible, in order to achieve the intent of the
Parties to this Agreement, and if adjustment is not possible, the
provision will be severed from this Agreement. The remaining
provisions of this Agreement will not be affected by the adjustment
or severing of the invalid, illegal, or unenforceable
term.

 

33.        
No Third-Party
Beneficiaries. No third-party beneficiary rights are
intended by this Agreement.

 

34.        
Captions. Captions are for
reference only and may not affect the meaning or interpretation of
this Agreement.

 

35.        
Survival.                       

 

36.        
No Strict Construction. This
Agreement has been prepared jointly and will not be strictly
construed against either Party

 

37.        
Entire Agreement. This
Agreement, together with the Quality Agreement and each SOW,
constitutes the entire understanding of the Parties with respect to
the subject matter hereof and supersedes all previous
understandings, negotiations, writings and commitments, either oral
or written, with respect to the subject matter hereof.

 

38.        
Counterparts. This Agreement
and each SOW may be executed electronically and in counterparts in
any format, including facsimile versions or electronically
delivered versions, each of which will be deemed to be an original
and will fully bind each Party who has executed it, but all such
counterparts together will constitute one and the same
agreement.

 

[Remainder of page intentionally blank; signature page
follows]

 

 

 

 

 

37

 

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

 

	

GT Biopharma, Inc.

 

 

By: //ss                                                                

 

Name: Anthony
Cataldo                                     

 

Title: Chairman &
CEO                                                                

	

Cytovance Biologics, Inc.

 

 

By: //ss                                                                

 

Name: Mathew
Delaney                                      

 

Title: VP Marketing &
Business Development

 

 

 

 

38

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