Document:

Biological Processing Services Agreement

 
Exhibit 10.1

 
[*] Portions of this exhibit have been omitted pursuant to a
request for confidential treatment filed with the Securities and Exchange Commission (“SEC”). The omitted portions of this exhibit have been filed separately with the SEC. 
 
BIOLOGICAL PROCESSING SERVICES AGREEMENT 
 
This BIOLOGICAL PROCESSING SERVICES AGREEMENT (“Agreement”) is made effective as of March 28, 2003
(“Effective Date”) by and between GenVec, Inc. (“GenVec”), having its principal place of business at 65 West Watkins Mill Road, Gaithersburg, Maryland 20878, and Targeted Genetics Corporation (“Targeted Genetics”),
having its principal place of business at 1100 Olive Way, Suite 100, Seattle, Washington 98101. 
 
WHEREAS, Targeted Genetics has agreed to be a provider of contract pharmaceutical development, biopharmaceutical development, and manufacturing services to the pharmaceutical and biopharmaceutical
industry; and 
 
WHEREAS, GenVec has certain
technology relating to certain biopharmaceutical products and wants Targeted Genetics to assist in bio-chemical manufacturing of such products as provided in this Agreement and the attachments hereto. 
 
NOW, THEREFORE, in consideration of the mutual covenants,
terms and conditions set forth below, the parties agree as follows: 
 
ARTICLE I: DEFINITIONS 
 
The following terms have the following meanings in this Agreement: 
 

	1.1	 	“Accept” shall have the meaning set forth in Section 2(a) with respect to Feasibility Batches [*], and in Section 6.2 with respect to all other Batches.

 

	1.2	 	“Affiliate(s)” means any corporation, firm, partnership or other entity which controls, is controlled by or is under common control with a party. For
purposes of this definition, “control” shall mean the ownership of at least fifty percent (50%) of the voting share capital of such entity or any other comparable equity or ownership interest. 

 

	1.3	 	“Applicable Laws” means all laws, ordinances, rules and regulations of jurisdictions within the Territory governing drug products to the extent applicable
to bulk drug substances, and all laws, ordinances, rules and regulations of jurisdictions within the Territory directly applicable bulk drug substances, including, without limitation, (i) all applicable federal, state and local laws and regulations
of each jurisdiction within the Territory, (ii) the U.S. Federal Food, Drug and Cosmetic Act, (iii) the current Good Manufacturing Practices promulgated by the Regulatory Authorities, as amended from time to time (“cGMPs”), and (iv)
applicable guidance documents issued by Regulatory Authorities (in each case, as such obligations are generally interpreted and enforced by the applicable Regulatory Authority, and prevailing industry standards). Applicable Laws shall also include
all laws, ordinances, rules and regulations applicable in jurisdictions added to the Territory in an amendment to this Agreement. 

*   Confidential treatment requested. 

 

	1.4	 	“Batch” means each unit of Bulk Drug Substance or other substance to be Processed pursuant to this Agreement, the Statement of Work or a Change Order.

 

	1.5	 	“Bulk Drug Substance” means the active pharmaceutical ingredient manufactured through Processing. 

 

	1.6	 	“Change Order” shall have the meaning set forth in Section 2.3. 

 

	1.7	 	“Claim” shall mean any suits, claims, losses, demands, liabilities, damages, costs and expenses (including costs, reasonable attorney’s fees and
reasonable investigative costs) incurred by a party in connection with any suit, demand or action by any third party. 

 

	1.8	 	“Commercial Facility Modification Project” shall have the meaning set forth in Article V. 

 

	1.9	 	“Criteria” means those items in the Specifications (Exhibit C) that are identified as Targeted Genetics’ “Responsibility for pass/fail.”

 

	1.10	 	“Deliverables” means all Batches and any work product, item or other deliverable to be provided to GenVec pursuant to this Agreement, or with respect to a
Change Order or Additional Statement of Work, any such work product, item or other deliverable to be provided thereunder. 

 

	1.11	 	“Early Termination Fee” means that amount which equals $500,000 minus any payments made (including the $335,000 payment, set forth as Milestone 1 in
Exhibit G, made to Targeted Genetics upon execution) or that have become due and payable, by GenVec in connection with this Agreement (which such Early Termination Fee shall be zero dollars ($0) in the event that such equation yields zero or a
negative dollar amount). 

 

	1.12	 	“Facility” means Targeted Genetics’ facility located at 1100 Olive Way, Suite 100, Seattle, Washington 98101 or such other facility as agreed by the
parties in writing. 

 

	1.13	 	“FDA” means the United States Food and Drug Administration. 

 

	1.14	 	“Feasibility Study” shall have the meaning set forth in Section 2.1(a). 

 

	1.15	 	“GenVec Equipment” shall have the meaning set forth in Section 4.1(b). 

 

	1.16	 	“GenVec Materials” means [*] that GenVec agrees in writing to provide to Targeted Genetics pursuant to a change in the Procedures or Specifications, a
Change Order or otherwise. 

 

	1.17	 	“GenVec SOPs” means GenVec’s Standard Operating Procedures and other methods, protocols and controls generally used by GenVec to carry out its
operations, as modified by and in compliance with this Agreement. 

 

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	1.18	 	“Intellectual Property” means all manner of U.S. and foreign legal protection of rights in inventions, biological materials, data, databases, information,
know-how, works of authorship, designations of origin and other intellectual property, that are now or later come into effect, including but not limited to patents, trade secrets, copyrights, trademarks, service marks, trade dress and any other
intellectual property rights. 

 

	1.19	 	“Manufacturing Core” means those portions of the Facility that are designated in Exhibit I as the “Manufacturing Core.”

 

	1.20	 	“Marketing Application” shall have the meaning set forth in Section 9.8. 

 

	1.21	 	“Materials” shall mean collectively, the Targeted Genetics Materials and GenVec Materials. 

 

	1.22	 	“Parameters” means those items in the Specifications (Exhibit C) that are identified as GenVec’s “Responsibility for pass/fail”.

 

	1.23	 	“Procedures” means those methods, protocols, controls and procedures to be documented and agreed upon by the parties in connection with the transfer of
GenVec’s manufacturing process to Targeted Genetics and the provision of Services hereunder, pursuant to which Targeted Genetics shall perform its obligations with respect to Processing of the Bulk Drug Substance, as well as any other
manufacturing, testing, storage, distribution, shipment or other process of or related to the Bulk Drug Substance, along with any valid amendments or modifications thereto, subject to the terms set forth below in Section 2.3.

 

	1.24	 	“Processing” or “Process” means the manufacturing or processing of Bulk Drug Substance or any other drug products or substances in accordance
with the Statement of Work, Procedures and Specifications, and any Change Order. 

 

	1.25	 	“Processing Date” means the day on which Targeted Genetics is due to begin Processing of a Batch. 

 

	1.26	 	“Processing Fees” shall have the meaning set forth in Section 8.1. 

 

	1.27	 	“Production Batch” means a Batch Processed in accordance with this Agreement after the Feasibility Batch [*]. 

 

	1.28	 	“Proprietary Information” shall have the meaning set forth in Section 12.1. 

 

	1.29	 	“Remaining Processing Fees” shall mean those fees set forth in Milestones 3 and 4 of Exhibit G, as applicable according to the description set forth
therein. 

 

	1.30	 	“Regulatory Authority” means any governmental regulatory authority within a jurisdiction in the Territory involved in regulating any aspect of the
development, manufacture, market approval, sale, shipping, distribution, packaging or use of the Bulk Drug Substance. 

 

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	1.31	 	“Statement of Work” means the written description of the Services to be performed and Batches to be Processed pursuant to this Agreement, which is attached
as Exhibit B and such other mutually agreed upon written description of Services to be performed and Batches to be Processed pursuant to this Agreement which are attached as exhibits to this Agreement. 

 

	1.32	 	“Services” means the Processing and other services provided, and to be provided, pursuant to this Agreement, including, without limitation, the Statement
of Work and any Change Order. 

 

	1.33	 	“Shipping Materials” means all pouches, labels, shipping containers and other materials required under the Procedures to make the Bulk Drug Substance ready
for shipment. 

 

	1.34	 	“Specifications” means the items set forth in Exhibit C, with which each Batch covered by those items must comply, within any analytical, statistical and
other technical limitations set forth in such Specifications, along with any valid amendments or modifications thereto, subject to the terms set forth below in Section 2.3. 

 

	1.35	 	“Targeted Genetics Equipment” shall have the meaning set forth in Section 4.1(a). 

 

	1.36	 	“Targeted Genetics SOPs” means Targeted Genetics’ Standard Operating Procedures and other methods, protocols and controls generally used by Targeted
Genetics to carry out its operations, as modified by and in compliance with this Agreement. 

 

	1.37	 	“Targeted Genetics Materials” means all raw materials, supplies, components and bulk packaging necessary for Processing in accordance with the Procedures
and consistent with the Targeted Genetics’ SOPs and Specifications, except for GenVec Materials. 

 

	1.38	 	“Term” shall have the meaning set forth in Section 10.1. 

 

	1.39	 	“Territory” means the United States of America, the European Union, Japan and any other country which the parties agree in writing to add to this
definition of Territory in an amendment to this Agreement. 

 

	1.40	 	“Testing Samples” shall have the meaning set forth in Section 6.1. 

 
ARTICLE II: PRODUCTION & RELATED SERVICES 
 
2.1 Services. 
 
(a) Feasibility Study. 
 
(i) Promptly following the Effective Date,
the parties shall meet and discuss in good faith the development and implementation of a study pursuant to which Targeted Genetics shall evaluate the use of the GenVec Materials, GenVec SOPs, GenVec Procedures and GenVec Specifications for
production of Bulk Drug Substance in accordance with this Agreement (“Feasibility Study”). Exhibit C sets forth the Criteria and Parameters upon which to assess the results of the Feasibility Study, and Targeted Genetics shall as soon
thereafter as 

 

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possible, Process a Batch against which to test the Criteria and Parameters (“Feasibility Batch”). Targeted Genetics shall complete
and provide to GenVec a written report of the performance of the Feasibility Batch (in relation to the Criteria and any relevant information regarding the Batch production that could affect or impact the pass/fail of the Parameters) and a sample of
the Feasibility Batch as soon as possible, but in no event later than three (3) months following the Effective Date. 
 
(ii) Upon receiving the written report and Feasibility Batch in accordance with Section 2.1(a)(i), GenVec shall thereafter
generate data to evaluate the performance of the Feasibility Study, and the parties shall in good faith, within the later of [*] after GenVec receives a written report of the performance of the Feasibility Batch or [*] after GenVec receives a sample
of the Feasibility Batch, unless the parties agree that more time is necessary, [*] a determination as to whether the Criteria and Parameters after making a determination as to whether the Criteria and Parameters are satisfied, and [*]. In the event
that the parties determine that the Criteria and Parameters are satisfied, GenVec [*] “Accept” the Batch by providing written notice of acceptance [*] after making a determination as to whether the Criteria and Parameters are satisfied,
and [*] elect to have Targeted Genetics continue to perform the Services set forth herein (“Project Continuation”), in which event Targeted Genetics shall immediately continue with the performance of Services as set forth herein [*].

 
(iii) If the parties determine
that the Criteria are not satisfied or based on review of any in process documentation that the Parameters are not satisfied due to Targeted Genetics’ failure to perform Processing in accordance with the Targeted Genetics SOP’s, the GenVec
SOP’s or the Procedures, then GenVec may [*] reject the Feasibility Batch [*] and terminate this Agreement, effective immediately, in accordance with Section 10.2(d)(i). [*] 
 
(iv) If the parties determine that the Criteria are satisfied but the Parameters are not, and
further determine that Targeted Genetics performed the Processing in accordance with the Targeted Genetics SOP’s, the GenVec SOP’s or the Procedures, then such Batch shall be deemed “Accepted” [*]. 
 
(v) If in assessing the results of a
Feasibility Batch [*] pursuant to Sections 2.1(a)(ii)—(iv) the parties disagree as to whether the Feasibility Batch [*] satisfied the Criteria or Parameters, or whether Targeted Genetics Processed the Batch in accordance with the Targeted
Genetics SOP’s, GenVec SOP’s and the Procedures, then the dispute shall be escalated to the Executive Committee which shall review the any in-process documentation. If the Executive Committee cannot reach agreement as to whether such
Criteria or Parameters were satisfied, or whether Targeted Genetics Processed the Batch in accordance with the Targeted Genetics SOP’s, the GenVec SOP’s and the Procedures, then the parties shall retain an Independent Consultant to review
the in-process documentation to determine and report on whether the Criteria and Parameters were satisfied, and/or whether failure of the Parameters was caused by Targeted Genetics’ failure to Process the Batch in accordance with the Targeted
Genetics SOP’s, the GenVec SOP’s and the Procedures. The Independent Consultant shall be [*], or in the event that [*] is unable or unwilling to perform such analysis, or the parties otherwise agree, another equally qualified individual
agreed upon in writing by GenVec and Targeted Genetics. The Feasibility Batch [*] shall be deemed “Accepted” pursuant to Section 2(a)(ii) if the Independent Consultant determines that the Criteria and Parameters were satisfied, or pursuant
to 2(a)(iv) if 

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the Independent Consultant determines that the Parameters were not satisfied, but that such failure was not caused by Targeted Genetics’
failure to Process the Batch in accordance with the Targeted Genetics SOP’s, the GenVec SOP’s and the Procedures [*]. If the Independent Consultant determines that the Criteria were not satisfied, or that the Parameters were not satisfied
and that such failure was caused by Targeted Genetics’ failure to Process the Batch in accordance with the Targeted Genetics SOP’s, the GenVec SOP’s and the Procedures, then the Feasibility Batch [*] shall be deemed
“rejected” pursuant to Section 2(a)(iii). Payment to Independent Consultant shall be borne by GenVec if the Feasibility Batch [*] is deemed Accepted hereunder, and by Targeted Genetics in the event such Batch is not deemed Accepted.

 
(vi) [*]  
 
(b) In General. Subject to Section 2.1(a) and pursuant
to this Agreement, Targeted Genetics shall perform Services according to the Statement of Work and any Change Order, which shall, among other things, include the Processing of Bulk Drug Substance and delivery thereof to GenVec or to GenVec’s
designee. Targeted Genetics shall perform all such Services hereunder in accordance with the Procedures, Applicable Laws, the Targeted Genetics SOPs, the Specifications, the Quality Requirements (attached hereto as Exhibit D) and the terms and
conditions of this Agreement. 
 
2.2 Schedule for Processing
Dates. Targeted Genetics shall Process the Batches in accordance with the Schedule to be mutually agreed to in writing by the parties as soon as possible following the Effective Date, and which when executed by both parties shall be attached
hereto as Exhibit J (“Schedule”). GenVec may modify such Schedule for any Batch by providing at least [*] of modification to the timing of the Schedule [*] for such Batch, in which event the parties shall reasonably agree upon an
alternative Processing Date with respect to such Batch. [*] In the event of a Change Order, the parties shall either agree upon a schedule for the Processing Dates of the Batches subject thereto, or shall include in such Change Order an appropriate
mechanism by which to schedule such Processing Dates.  
 
2.3 Changes in Statement of Work, Procedures or Specifications. Any changes to the Statement of Work, the Procedures or Specifications shall be agreed to by the parties in a writing dated and signed by the parties
(“Change Order”). No Change Order shall be implemented by Targeted Genetics, whether requested by a party or requested or required by any Regulatory Authority, until the parties have agreed in writing to such Change Order, the
implementation date of such Change Order, and any increase or decrease in costs, expenses or fees associated with such Change Order. Targeted Genetics shall respond promptly to any request made by GenVec for a Change Order[*]. Both parties shall use
commercially reasonable, good faith efforts to agree to the terms of such Change Order in a timely manner. [*] after a request is made for any Change Order, Targeted Genetics shall notify GenVec of the costs associated with such change and shall
provide such supporting documentation as GenVec may reasonably require. If there is a conflict between the numbered Articles of this Agreement and the Statement of Work, the Procedures, Specifications or Change Order, the numbered Articles of this
Agreement shall control. 
 
2.4 Additional Statement(s) of
Work. Targeted Genetics acknowledges that from time to time during the Term, GenVec may require additional Services not subject to an attached 

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Statement of Work. Targeted Genetics shall use commercially reasonable, good faith efforts to agree [*] to the terms of any additional
Statement of Work. Each such additional Statement of Work shall include Procedures and Specifications applicable to the Services to be provided pursuant thereto. All Services performed pursuant to the additional Statement of Work shall be subject to
the terms and conditions of this Agreement, except as the parties specifically may agree otherwise in the additional Statement of Work. No additional Statement of Work shall become effective or be implemented by Targeted Genetics until the parties
have agreed in writing to such additional Statement of Work, including, without limitation, the implementation date of such additional Statement of Work, and the costs, expenses or fees associated with such additional Statement of Work. Targeted
Genetics shall respond [*] to any request made by GenVec regarding an additional Statement of Work; provided however, Targeted Genetics [*]. Both parties shall use commercially reasonable, good faith efforts to agree to the terms of such additional
Statement of Work [*]. In addition to the foregoing, [*] after a request is made for any additional Statement of Work, Targeted Genetics shall notify GenVec of the costs associated with such additional Statement of Work and shall provide such
supporting documentation as GenVec may reasonably require. 
 
2.5 Subcontracting. Targeted Genetics shall not subcontract any of its obligations under this Agreement without the prior written consent of GenVec. To the extent any subcontractors are approved by GenVec, unless agreed
otherwise, all such subcontractors shall perform their work in accordance with this Agreement and Targeted Genetics shall remain fully responsible for the performance of any obligations subcontracted. 
 
2.6 Project Management; Meetings. The parties shall cooperate in the
full and prompt performance of this Agreement, and identify and attempt to resolve any obstacles or problems affecting such performance. The parties shall hold periodic progress meetings [*], to discuss the activities related to this Agreement, in
order to identify, discuss and resolve any obstacles to performance or other issues encountered or anticipated. The parties shall endeavor to have appropriate technical staff participate in such progress meetings. The parties shall conduct the
periodic progress meetings telephonically or in person at a location as mutually agreed. 
 
2.7 Executive Committee. For the purposes of resolving disputes, controversies or disagreements arising under this Agreement (“Disputes”), GenVec and Targeted Genetics shall establish an “Executive
Committee” of four (4) members consisting of two (2) senior executives designated by each Party. Each of GenVec and Targeted Genetics shall designate its initial representatives to the Executive Committee promptly after the Effective Date. In
the event of a Dispute, the parties shall first present such dispute to the Executive Committee, the respective members of which shall in good faith consider and attempt to resolve the dispute. Either party may initiate such consideration of the
Dispute by the Executive Committee by delivering a written notice to the other party demanding such consideration. In the event that the Executive Committee is unable to resolve the Dispute within [*], upon written demand from either party, the
Dispute shall be escalated according to Section 14.7. 
 
2.8
Personnel. Targeted Genetics shall provide a sufficient number of properly trained staff for the performance of all activities under this Agreement (“Personnel”). The Personnel as of the Effective Date are identified in Exhibit E.
[*] Should it be necessary to make a substitution of any Personnel listed on Exhibit E or to otherwise assign any Personnel to perform Services 
 

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hereunder, Targeted Genetics shall promptly provide resumes for the proposed individuals and shall promptly provide any additional
information reasonably requested by GenVec. Proposed substitutes shall have substantially equal abilities and qualifications to those of the person(s) being replaced. All Personnel shall be and at all times remain employees of Targeted Genetics and
not of GenVec. GenVec shall not directly solicit any such Personnel for employment by GenVec during the Term and for a period of [*] thereafter; provided, however, that “directly solicit for employment” shall not include advertising in
newspapers, trade publications, web sites or other media addressed to the general public, nor shall it be deemed to include solicitation by any recruiter or similar third party retained by GenVec to recruit employees so long as GenVec has not
instructed the recruiter to solicit such Personnel or identified such Personnel as potential recruits, and GenVec may employ any such person who responds to such an advertisement or who is solicited by any such third party recruiter. 
 
2.9 Future Services. The parties acknowledge that they intend to
discuss in good faith the possibility of entering into a subsequent agreement or agreements [*], and possibly other manufacturing undertakings. [*] 
 
ARTICLE III: PRODUCTION SUPPLIES 
 
3.1 GenVec Materials. GenVec shall supply the GenVec Materials to Targeted Genetics for Processing in accordance with the Statement of Work or a
Change Order, in quantities sufficient, according to the Procedures and Specifications, to meet GenVec’s requirements for Processing of the Batches of Bulk Drug Substance. The parties acknowledge the Specifications listed in Exhibit C are
anticipated to be modified by the parties in the future in a manner suitable for determining whether the [*] Batches are acceptable, with any request by a party for such modification to not be unreasonably withheld by the other party. Targeted
Genetics shall use the GenVec Materials solely and exclusively for Processing under this Agreement, and shall not distribute any such items to any person or entity unless first authorized by GenVec in writing. Targeted Genetics shall use, store, and
otherwise handle the GenVec Materials in accordance with the terms and conditions of this Agreement, including, without limitation the Procedures, the Quality Requirements, the Targeted Genetics SOPs, and with the standard of care that Targeted
Genetics normally would exercise [*], but in no event less than a commercially reasonable standard of care. GenVec is and shall at all times remain the owner of all right, title and interest in the GenVec Materials, all materials derived therefrom,
and all Intellectual Property rights therein. Upon termination or expiration of this Agreement, Targeted Genetics shall return to GenVec or dispose of all unused GenVec Materials in accordance with GenVec’s instructions. 
 
3.2 Targeted Genetics Materials. Targeted Genetics shall be responsible
for procuring and inspecting adequate Targeted Genetics Materials as necessary to Process Batches according to the Statement of Work or a Change Order, unless otherwise agreed to by the parties in writing. GenVec shall have no liability under this
Agreement for any lost, damaged or defective Targeted Genetics Materials whether or not such Targeted Genetics Materials are incorporated in the Bulk Drug Substance. 
 

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ARTICLE IV:
EQUIPMENT AND FACILITY 
 
4.1 Equipment Purchase and
Maintenance. 
 
(a) Targeted Genetics
Equipment. Except to the extent of the GenVec Equipment, Targeted Genetics shall purchase (to the extent not already owned by Targeted Genetics), [*], and shall dedicate to the performance of its obligations hereunder in accordance with Section
4.2, the equipment identified in Exhibit F as Targeted Genetics Equipment, as well as all other equipment commercially reasonably necessary to perform the Processing or other Services (“Targeted Genetics Equipment”). Exhibit F may be
modified as agreed to in writing to by the parties from time to time. Targeted Genetics will be responsible for any and all taxes, including property taxes, applicable to the Targeted Genetics Equipment. Targeted Genetics shall bear all risk of loss
or damage to the Targeted Genetics Equipment at all times during the Term, and shall, at its expense, obtain and maintain property insurance in sufficient amounts to protect against any such loss or damage to the Targeted Genetics Equipment.

 
(b) GenVec Equipment. GenVec shall
purchase (to the extent not already owned by GenVec) and shall supply to Targeted Genetics that equipment identified as “GenVec Equipment” in Exhibit F (“GenVec Equipment”). [*] Targeted Genetics shall provide to GenVec all
documentation and other information relating to [*] as such documentation and information becomes available, and shall provide GenVec with a reasonable time period within which to [*] prior to the use of the GenVec Equipment. Targeted Genetics will
install and maintain the GenVec Equipment in the Facility. GenVec will be responsible for any and all taxes, including property taxes, applicable to the GenVec Equipment. Targeted Genetics will maintain, use, house, and otherwise handle the GenVec
Equipment with the standard of care that Targeted Genetics would exercise [*], but in no event less than a commercially reasonable standard of care. Targeted Genetics shall immediately notify GenVec in the event that any GenVec Equipment is misused,
misappropriated, lost or damaged, and shall provide commercially reasonable cooperation to GenVec with respect to GenVec’s efforts to obtain and enforce any warranties given by the manufacturer of such GenVec Equipment, and any other rights and
remedies that GenVec may seek to enforce with respect to such equipment. GenVec shall hold title to the GenVec Equipment. GenVec Equipment shall at all times remain personal property, notwithstanding that they may be attached to real property or any
building thereon. Targeted Genetics shall use its best efforts to obtain a waiver from the lessor of the Facility such that the lessor shall have no rights in respect of the GenVec Equipment, and in the event Targeted Genetics is unable to obtain
such a waiver in a timely manner or otherwise prior to delivery of such GenVec Equipment, Targeted Genetics shall provide GenVec with prompt written notice with respect thereto, and provide any further cooperation to achieve a satisfactory
resolution. Targeted Genetics shall keep GenVec Equipment free and clear of any liens, claims or encumbrances arising from the actions or inaction of Targeted Genetics. If GenVec supplies Targeted Genetics with labels or other markings identifying
GenVec as the owner of such GenVec Equipment, Targeted Genetics shall affix them in a prominent place on the GenVec Equipment. Except with respect to gross negligence or willful misconduct by Targeted Genetics, GenVec shall bear all risk of loss or
damage to the GenVec Equipment at all times while the GenVec Equipment is in Targeted Genetics’ possession, and shall, at its expense, obtain and maintain property insurance in sufficient amounts to protect against any such loss or damage to
the GenVec Equipment. If GenVec Equipment includes software, such software shall be subject 

 

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to license terms and conditions prescribed by GenVec or the third party vendor of such software. Upon reasonable notice to Targeted Genetics,
GenVec may inspect the GenVec equipment during normal business hours and in accordance with Targeted Genetics’ reasonable security procedures. 
 
(c) Removal of Equipment. Upon termination or expiration of this Agreement for any reason, GenVec shall have the right to remove
all GenVec Equipment from the Facility. Within [*] after written request by GenVec, Targeted Genetics shall provide GenVec with reasonable access and assistance in any such removal of the GenVec Equipment. A Targeted Genetics representative shall be
entitled to be present during any such removal of the GenVec Equipment. 
 
4.2 Dedicated Manufacturing Capabilities. Targeted Genetics shall provide all Services from its Facility. During the Term, Targeted Genetics shall dedicate [*] to the extent necessary to provide the Services hereunder;
provided however, that subject to the terms of this Agreement, including, without limitation, the Quality Requirements attached as Exhibit D, Target Genetics shall be permitted [*], to manufacture another product [*], that does not interfere with
Targeted Genetics’ ability to complete the Services specified in the Statement of Work or Change Orders. 
 
4.3 [*] 
 
4.4 On-Site Employees. GenVec may base two (2) representatives at the Facility for all or any part of the Term to observe the Processing and other
Services. Subject to approval of Targeted Genetics, which shall not be unreasonably withheld or delayed, GenVec may base additional representatives at the Facility upon written request. Targeted Genetics shall provide a workspace outside of, but
within reasonable proximity to, the dedicated processing space for GenVec representatives, which space shall include reasonable and customary accommodations to conduct daily business activities, including, without limitation, such items as telephone
service, Internet access and access to fax machines and photocopiers. GenVec shall reimburse Targeted Genetics for [*] costs [*] incurred by Targeted Genetics as a result of such workspace and accommodations[*]. Notwithstanding the foregoing, GenVec
shall not be obligated to reimburse Targeted Genetics for any such costs over [*] unless Targeted Genetics first obtains GenVec’s prior written approval for such expenditures. 
 
ARTICLE V: [*] 
 
[*] 

 

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ARTICLE VI:
DELIVERY; ACCEPTANCE; TITLE 
 
6.1 Delivery. Upon
completion of the Processing of each Batch, Targeted Genetics shall deliver each such Batch as directed by GenVec; provided that, at GenVec’s direction, Targeted Genetics shall store any completed Batch pending delivery or for some other
reasonable time as directed by GenVec, and in such event shall do so in accordance with the standard of care that Targeted Genetics normally would exercise with respect to similar materials of its own or its other customers, but in no event less
than a commercially reasonable standard of care. In the event that GenVec directs Targeted Genetics to either store such Batches, or to otherwise ship such Batches to some location or entity other than GenVec, Targeted Genetics shall deliver to
GenVec samples of such Batch (the number of samples of which shall be set forth in the applicable Targeted Genetics SOP and/or Batch Records) for GenVec’s testing and acceptance in accordance with Section 6.2 (“Testing Samples”).
Targeted Genetics shall segregate and store all Batches until delivery to GenVec. Targeted Genetics shall deliver each Batch and Testing Samples thereof for delivery [*] GenVec’s premises (or such other location as GenVec may provide), in
accordance with the Procedures, Applicable Laws, this Agreement (including, without limitation, the Quality Requirements) and the Targeted Genetics SOPs. 
 
6.2 Acceptance and Rejection of Production Batches. 
 
(a) In General. Testing and acceptance of Feasibility Batches [*] shall be conducted in accordance with Section 2.1(a). Upon
receipt of each Batch (or Testing Samples thereof) other than a Feasibility Batch [*], GenVec may inspect and test each such Batch and/or Testing Samples and based thereon may accept or reject each such Batch in accordance with this Section 6.2.
GenVec shall notify Targeted Genetics of any rejection of such Batch within [*] after GenVec’s receipt thereof. Notwithstanding the foregoing, if GenVec requires more than [*] to complete its testing, GenVec may notify Targeted Genetics of its
need for additional time to complete the testing, and the parties shall in good faith agree to [*] extension of time for GenVec to perform such testing. GenVec shall provide written notice to Targeted Genetics notifying Targeted Genetics of its
acceptance or rejection of such Batch pursuant to this Section 6.2. A Batch shall be deemed “Accepted” when GenVec provides written notice of such acceptance to Targeted Genetics, and in the case of Production Batches after the first
Production Batch, to the escrow agent described in Section 8.5. In the event that, after conducting testing pursuant to this Section 6.2 (or pursuant to Section 2.1(a) with respect to the Feasibility Batch [*]), GenVec Accepts a Batch, Targeted
Genetics may invoice GenVec, and in the case of Production Batches after the first Production Batch the escrow agent, for such Batch in accordance with Section 8.4. 
 
(b) Effect of Acceptance or Rejection of Production Batches. In the event that GenVec notifies
Targeted Genetics of the rejection of a Batch, Targeted Genetics shall have the right to sample and retest the rejected Batch, the cost of which shall be the responsibility of [*]. 
 

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In the event that Targeted Genetics and GenVec test results for the rejected Batch do not agree, an
“Independent Contractor” agreed upon in writing in advance by GenVec and Targeted Genetics shall perform appropriate testing and analysis of the rejected Batch, according to a [*] GenVec and the results of the Independent Contractor
findings shall be reviewed by an “Independent Consultant”. In the event that the Independent Contractor test results demonstrate that such rejected Batch conforms to the Specifications and other requirements in this Agreement and is
otherwise suitable for Phase III human testing, at Targeted Genetics request, the parties shall retain an Independent Consultant to perform analysis of the rejected Batch testing results and to determine and report on whether such rejected Batch
conforms to the Specifications and other requirements in this Agreement and is otherwise suitable for Phase III human testing. The Independent Consultant shall be [*], or in the event that [*] is unable or unwilling to perform such analysis, another
equally qualified individual agreed upon in writing by GenVec and Targeted Genetics. In the event that the Independent Consultant determines that the rejected Batch conforms to the Specifications and other requirements in this Agreement and is
otherwise suitable for Phase III human testing, then the Batch shall be deemed Accepted for the purposes hereof. Payment for the Independent Contractor and Independent Consultant shall be borne by GenVec in the event that the Batch is deemed
Accepted, and by Targeted Genetics in the event the batch is not deemed Accepted, by the Independent Consultant. In the event that GenVec notifies Targeted Genetics of the rejection of a Batch, GenVec may elect the following remedies: (a) GenVec may
require [*]; or (b) GenVec may provide notice to Targeted Genetics [*]. In the event that GenVec elects to have Targeted Genetics initiate Processing of the replacement Batch immediately, Targeted Genetics shall do so [*], but in no event later than
[*] after GenVec requests that Targeted Genetics process a replacement Batch. If GenVec elects to have Targeted Genetics Process a replacement Batch, GenVec again shall have the period of time specified above to inspect and accept or reject the
replacement Batch. Notwithstanding the foregoing, in the event that GenVec notifies Targeted Genetics of the rejection of a Batch [*], GenVec may provide notice either (a) that it elects to have Targeted Genetics initiate Processing of a replacement
Batch [*]; or (b) that [*], in which event Targeted Genetics [*]. The terms and conditions of this Section 6.2(b) shall not apply with respect to any Feasibility Batch [*]. 
 
ARTICLE VII: REMEDIES FOR FAILURE OF PERFORMANCE 
 
Targeted Genetics shall use its [*] efforts to ensure that the Processing and
any other Services provided hereunder shall not be interrupted due to Targeted Genetics’ [*], and shall allocate to the Processing and such other Services all financial, personnel and other resources necessary for the performance thereof and,
if necessary, shall use its best commercial efforts to, among other things, [*] fully perform such obligations. In addition, in the event that Targeted Genetics reasonably believes that for any reason it may be unable to fully perform its
obligations hereunder, it shall [*] notify GenVec, and shall cooperate in good faith with GenVec to undertake all measures necessary and desirable to ensure completion of Processing and any other Services. 
 
ARTICLE VIII: PRICING AND PAYMENT 
 
8.1 Processing Fees. In consideration for Target
Genetics’ satisfactory performance of the Services, GenVec shall pay Targeted Genetics the “Milestone Payment” applicable to each “Milestone” as set forth in Exhibit G, provided that Targeted Genetics satisfactorily achieves

 

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such respective Milestone (“Processing Fees”). In the event that a Milestone requires or involves any Deliverables, then such
Milestone shall be “achieved” only after GenVec has Accepted all such Deliverables. Targeted Genetics shall invoice GenVec in accordance with Section 8.4 upon achieving each Milestone.  
 
8.2 Cost Reimbursement. Targeted Genetics may, as part of an invoice
submitted to GenVec for the Processing Fee in accordance with Section 8.1, also submit to GenVec an invoice for [*] listed in the bill of materials included with the Batch record for such Batch, to the extent that such [*] were necessary and used in
Processing of such Batch. 
 
8.3 Taxes; Duties. All taxes,
duties and other amounts assessed on the GenVec Materials or Bulk Drug Substance prior to or upon sale to GenVec are the responsibility of GenVec, and GenVec shall reimburse Targeted Genetics for any such taxes, duties or other expenses paid by
Targeted Genetics; provided, however, that GenVec shall not be required to pay any taxes based on the net income of Targeted Genetics. 
 
8.4 Payment Terms. For any amounts that become due and payable hereunder, Targeted Genetics shall provide to GenVec a detailed invoice identifying
the charge and the basis for the invoiced amount. Payment for undisputed invoices shall be due within [*] after the date of such invoice, except that with respect to Milestone No. 1 in Exhibit G, [*] shall be paid to Targeted Genetics within [*]
after the Effective Date and the balance of such Milestone [*] shall be paid within [*] after the date of such invoice. Moreover, in the case of invoices for Remaining Processing Fees for Production Batches after the first Production Batch, Targeted
Genetics shall provide a duplicate invoice to the escrow agent described in Section 8.5 and receive its payment in accordance with Section 8.5. 
 
8.5 Escrow. If GenVec Accepts the [*] Batch, GenVec shall, within [*] following GenVec’s notice thereof, deposit with a mutually agreeable
escrow agent, and pursuant to appropriate terms mutually agreeable to GenVec and Targeted Genetics, the applicable [*] in accordance with Milestone 4 of Exhibit G hereto [*]. Subject to terms and conditions which the parties shall mutually agree
upon, and provided that the escrow agent has received notice of GenVec’s Acceptance of a subsequent Production Batch, the escrow agent shall be instructed to release to Targeted Genetics the Processing Fees applicable to each subsequent
Production Batch within [*] after the date of its receipt from Targeted Genetics of a proper invoice for that Batch. Targeted Genetics shall [*] an escrow agent pursuant to this Section 8.5. 
 
ARTICLE IX: RECORDS; REGULATORY MATTERS 
 
9.1 In-Process Testing. During Processing, Targeted
Genetics shall deliver to GenVec or a designee of GenVec samples of the in-process Batch in accordance with the Statement of Work or as otherwise directed by GenVec for purposes of in-process testing. If in-process testing reveals an
out-of-Specification result, Targeted Genetics shall use its [*] efforts to fully investigate such out-of-Specification result within [*] following such testing, and shall provide such [*] to GenVec within [*] following the conclusion of such
investigation as to the nature and cause of the out-of Specification result. 
 

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9.2 Batch Records.
Within [*] following the completion of Processing of each Batch, Targeted Genetics [*] properly completed Batch records prepared in accordance with the Procedures and [*] the Specifications.  
 
9.3 Recordkeeping. Targeted Genetics shall accurately prepare and
maintain true and accurate books, records, test and laboratory data, reports and all other information relating to Processing, and the Bulk Drug Substance in compliance all Applicable Laws, this Agreement and the Targeted Genetics SOPs, and any
other of its obligations under this Agreement, including, without limitation, all information required to be maintained by Applicable Laws, the Targeted Genetics SOPs, and any requirements of the Quality Requirements. Such information shall be
maintained in forms, notebooks and records for a period of at least [*] from the date of shipment of such Batch or longer if required under Applicable Laws. GenVec shall [*] such data or information. 
 
9.4 Regulatory Compliance. 
 
(a) GenVec shall be responsible for obtaining the approvals
and licenses required by Regulatory Authorities with respect to the clinical testing of the drug product manufactured from the Bulk Drug Substance Processed under this agreement, including the submission of any necessary applications or amendments
thereto. During the Term and until the expiration date of the last drug product manufactured using the Batch Drug Substance Processed by Targeted Genetics, Targeted Genetics shall provide all necessary or useful information and otherwise assist
GenVec in all regulatory matters with respect to Bulk Drug Substance and Processing at GenVec’s request. Each party intends and commits to cooperate to satisfy all Applicable Laws with respect to Processing under this Agreement. 
 
(b) Except with respect to those approvals and licenses
referenced in Section 9.4(a), Targeted Genetics shall obtain and maintain all other federal, state and local approvals, permits, licenses and registrations required for performance of, or the absence of which would have material adverse effect on
its ability to perform, its obligations hereunder. 
 
9.5
Governmental Inspections and Requests. Targeted Genetics shall permit and fully cooperate with any inspections conducted by the FDA or any other Regulatory Authority of its operations or as necessary for GenVec to use, sell, market, import,
or distribute the Bulk Drug Substance or obtain approval of the Marketing Applications described in Section 9.8. Targeted Genetics shall [*] advise GenVec if an [*] agent of any Regulatory Authority requests to visit or visits the Facility, or
requests to audit or audits Targeted Genetics’ books or records, concerning the Processing or the Bulk Drug Substance, and shall, upon receipt of such request, [*] provide GenVec with a copy of any written document received from such Regulatory
Authority. Targeted Genetics shall furnish to GenVec a copy of any related report of inspectional observations or findings by such Regulatory Authority within [*] of Targeted Genetics’ receipt of such report. Targeted Genetics shall use its
best efforts to promptly remedy any [*] deficiency (and address any disputes regarding deficiencies) in Targeted Genetics’ operations asserted by such Regulatory Authority that might affect the Bulk Drug Substance. With respect to any report by
a Regulatory Authority, Targeted Genetics shall provide GenVec a reasonable opportunity to consult with Targeted Genetics as to a response by Targeted Genetics, if any, and shall provide GenVec a reasonable opportunity to review a draft of any
proposed response and offer 

 

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suggestions or revisions thereto, which suggestions and proposed revisions shall be reasonably considered and incorporated into such
response. 
 
9.6 Recall. In the event Targeted Genetics
believes a recall, field alert, product withdrawal or field correction may be necessary with respect to the Bulk Drug Substance, Targeted Genetics shall immediately notify GenVec in writing. Targeted Genetics shall not act to initiate a recall,
field alert, product withdrawal or field correction without the express prior written approval of GenVec, unless otherwise required by Applicable Laws. In the event GenVec believes a recall, field alert, product withdrawal or field correction may be
necessary with respect to the Bulk Drug Substance, GenVec shall immediately notify Targeted Genetics in writing and Targeted Genetics shall provide all necessary cooperation and assistance to GenVec. The cost of any recall, field alert, product
withdrawal or field correction shall be borne by GenVec except to the extent that such recall, field alert, product withdrawal or field correction is caused by Targeted Genetics’ breach of its obligations under this Agreement or violation of
Applicable Laws or its negligence or willful misconduct, in which event such cost shall be borne by Targeted Genetics. 
 
9.7 GenVec Audits. GenVec may on reasonable notice perform reasonable audits of Targeted Genetics’ operations, personnel performance, the
Facility, the GenVec Equipment, Targeted Genetics Equipment and any other equipment used by Targeted Genetics in Processing, Targeted Genetics SOPs and records that relate to the activities performed in relation to this Agreement; provided that
Targeted Genetics may require that all GenVec employees, auditors and other contractors carrying out any such audit to agree to a nondisclosure obligation substantially similar to Sections 12.1 through 12.4 and abide by all of Targeted
Genetics’ security, safety, health, and other generally applicable operations policies while carrying out such audit at Targeted Genetics’ Facility. 
 
9.8 Marketing Applications. Upon GenVec’s request and at GenVec’s expense, Targeted Genetics shall reasonably assist GenVec in preparing
and submitting information related to Processing and the Bulk Drug Substance to all appropriate Regulatory Authorities and other governmental authorities, in obtaining approvals of applications from such Regulatory Authorities or other governmental
authorities necessary for carrying out research or investigational testing of the Bulk Drug Substance, and in responding to related questions from such authorities (“Marketing Applications”). Such reasonable assistance shall include the
provision of such information and materials relating to the performance of the Processing as necessary to support GenVec’s required submissions to such Regulatory Authority and other governmental authorities. To the extent that any such
Regulatory Documentation, Targeted Genetics SOPs and other documentation that GenVec deems reasonably necessary in connection with a Statement of Work for a Marketing Application is Targeted Genetics Proprietary Information, Targeted Genetics shall
permit GenVec to reference such facility information or other information required by a Regulatory Authority [*], and Targeted Genetics agrees to maintain all such submitted information in compliance with all Applicable Laws. 
 
ARTICLE X: TERM AND TERMINATION 
 
10.1 Term. This Agreement shall commence on the Effective Date and,
unless terminated earlier in accordance with this Agreement, shall continue for a period continuing until the later of 

 

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either (a) six (6) months thereafter or (b) when GenVec has Accepted all Batches Processed in accordance with the Schedule (“Term”)
and Article 6.2. 
 
10.2 Termination. 
 
(a) Material Breach. If a party
materially breaches this Agreement, and the non-breaching party has provided written notice of the breach to the breaching party and the breaching party fails to cure its breach within [*] after such written notice, then the other party shall have
the right to immediately terminate this Agreement upon notice to the breaching party. In addition to any other rights or remedies that may be available at law or in equity and pursuant to the terms of this Agreement, if GenVec terminates this
Agreement pursuant to this Section 10.2(a) prior to its election of Project Continuation, then Targeted Genetics shall [*] upon execution of this Agreement [*] as of the date of the breach giving rise to GenVec’s notice of termination. For
purposes hereof, the “Period” means the [*] time period beginning on the Effective date.  
 
(b) Bankruptcy. Either party may terminate this Agreement effective upon written notice to the other party, if the
other party becomes insolvent or admits in writing its inability to pay its debts as they become due, files a petition for bankruptcy, makes an assignment for the benefit of its creditors or has a receiver, trustee or other court officer appointed
for its properties or assets. 
 
(c) Force Majeure. If any default or delay occurs which prevents or materially impairs a party’s performance and is due to a cause beyond the party’s reasonable control, including but not limited to an act of God,
flood, fire, explosion, earthquake, casualty, accident, war, revolution, civil commotion, blockade or embargo, injunction, law, proclamation, order, regulation or governmental demand, and provided that the default or delay is not caused by or the
fault of such party, the affected party shall promptly notify the other party in writing of such cause and shall exercise diligent efforts to resume performance under this Agreement as soon as possible. Neither party will be liable to the other
party for any loss or damage due to such cause, and the Term will not be extended thereby. Neither party may terminate this Agreement because of such default or delay except upon [*] prior written notice to the other party if the default or delay
has existed for [*] and is continuing at the end of the [*] notice period. 
 
(d) Termination for Convenience. 
 
(i) Prior to GenVec’s election of Project Continuation in accordance with Section 2.1(a)(ii)(A), GenVec may terminate
this Agreement immediately, with or without cause, at any time. Any termination by GenVec pursuant to this Section 10.2(d)(i) [*] (other than for breach by Targeted Genetics in accordance with Section 10.2(a)) shall be considered “Termination
for Convenience.” In the event GenVec exercises its right of Termination for Convenience pursuant to this Section 10.2(d)(i), then GenVec shall pay to Targeted Genetics (A) [*], to the extent that any such amount is due plus (B) [*] in-process
at GenVec’s request as of the date of termination [*], provided that GenVec has already Accepted pursuant to Section 2(a)(iv) a Feasibility Batch [*]. 
 

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(ii) At any time after GenVec’s election of Project Continuation in accordance with Section 2.1(a)(ii)(A), GenVec may terminate this Agreement on written notice, with or without cause. In the event GenVec exercises its right of
Termination pursuant to this Section 10.2(d)(ii) [*] GenVec Accepts [*], GenVec shall pay Targeted Genetics [*]. In the event GenVec exercises its right of Termination pursuant to this Section 10.2(d)(ii) [*] GenVec Accepts [*], GenVec shall pay
Targeted Genetics [*]; there shall be released to Targeted Genetics from the escrow described in Section 8.5 [*] of the Remaining Processing Fees not yet paid to Targeted Genetics; and the balance of the escrow [*]. 
 
(iii) Targeted Genetics shall invoice for
payments for Termination in accordance with this Section 10.2(d) at the earlier of the date Targeted Genetics gives notice in writing to GenVec that all activities undertaken pursuant to this Agreement have been concluded or [*] after GenVec’s
notice of such Termination. Such invoice shall be due and payable within [*] of notice to GenVec by Targeted Genetics.  
 
10.3 Effects of Termination. Upon notice of Termination pursuant to Section 10.2, except as GenVec may instruct otherwise, Targeted
Genetics shall immediately cease all manufacturing and production activities and reasonably attempt to conclude all other activities being undertaken pursuant to this Agreement as quickly and efficiently as possible, and, in addition to other
requirements of this Article 10 shall cooperate with GenVec in the orderly organization of any data, information or other materials, and the transition or delivery of such items to GenVec or any other third party designated by GenVec to assist it in
such respect. Any provision of this Agreement, including but not limited to Sections 2.8, 4.1, 8.3, 10.3 and Article 9, 11, 12, 13 and 14, that imposes or contemplate continuing obligations on a party will survive the termination or expiration of
this Agreement. Except as otherwise specifically provided in Section 10.2(d)(ii), upon any termination of this Agreement, the escrow agent described in Section 8.5 shall promptly pay to Targeted Genetics any properly invoiced payments then due to
Targeted Genetics and refund any balance to GenVec. 
 
10.4 Technology Transfer. Targeted Genetics shall provide to GenVec all documentation and information necessary or useful [*], including any [*] used therein. Such documentation and information shall include, without
limitation, [*] and all documentation and information relating to [*]. To the extent that such documentation and information, including, without limitation, documentation and information relating to [*], is Proprietary Information of Targeted
Genetics, it shall not be transferred to any third party without the express written consent of Targeted Genetics unless otherwise permitted pursuant to the terms of this Agreement; notwithstanding the foregoing or anything else to the contrary in
this Agreement, but subject to Section 12.7, if such documentation and information [*]. Targeted Genetics shall provide all such documentation and information prescribed by this Section 10.4 as it becomes available, and in the manner and to the
location as directed by GenVec. In the event of termination or expiration of this Agreement or breach of this Agreement [*], GenVec may give written notice that it has elected to [*]. Within [*] following such notice, Targeted Genetics shall provide
to GenVec [*]. Targeted Genetics shall not in any way interfere [*] pursuant to this Section 10.4. 
 

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ARTICLE XI
REPRESENTATIONS AND WARRANTIES; 
LIMITATION OF LIABILITY 
 
11.1 Existence and Power. Each party hereby represents
and warrants to the other party that such party (a) is duly organized, validly existing and in good standing under the laws of the state in which it is organized, (b) has the power and authority and the legal right to own and operate its property
and assets, and to carry on its business as it is now being conducted, and (c) is in compliance with all requirements of Applicable Laws, except to the extent that any noncompliance would not materially adversely affect such party’s ability to
perform its obligations under this Agreement. 
 
11.2 Authorization and Enforcement of Obligations. Each party hereby represents and warrants to the other party that it (a) has the power and authority to enter into this Agreement and to perform its obligations hereunder and
thereunder and (b) has taken all necessary action on its part to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder. This Agreement has been duly executed and delivered on behalf of such party,
and constitutes a legal, valid, binding obligation, enforceable against such party in accordance with its terms, subject to applicable bankruptcy and similar laws affecting creditors’ rights and remedies generally and to general principles of
equity. 
 
11.3 No Consents. Each party
hereby represents and warrants to the other party that all necessary consents, approvals and authorizations of all agencies and other persons required to be obtained by such party in connection with this Agreement have been obtained. 
 
11.4 No Conflict. Each party hereby represents and
warrants to the other party that the execution and delivery of this Agreement and the performance of such party’s obligations hereunder (a) do not conflict with or violate any requirement of Applicable Laws, and (b) do not materially conflict
with, or constitute a material default or require any consent under, any material contractual obligation of such party. 
 
11.5 GenVec Warranty. GenVec represents and warrants to Targeted Genetics that (a) GenVec’s Materials, GenVec SOPs, GenVec
Procedures and GenVec Specifications for production of Bulk Drug Substance have previously been performed [*] to produce the Bulk Drug Substance; and (b) to GenVec’s knowledge, GenVec’s Materials, GenVec SOPs, GenVec Procedures and GenVec
Specifications are in compliance with Applicable Laws. 
 
11.6 Targeted Genetics Warranty. Targeted Genetics represents and warrants to GenVec that (a) the Facility, Targeted Genetics Equipment, and all manufacturing space and process utilities, will be qualified and validated as
necessary and suitable for the provision of all Processing hereunder in compliance with Applicable Laws and this Agreement, including, without limitation, the Targeted Genetics SOPs and the Quality Requirements; (b) all GenVec Material and all Bulk
Drug Substance located at the Facility will be stored in compliance with Applicable Laws; (c) the Processing will be performed in a workmanlike manner consistent with the Targeted Genetics SOPs, and in no event less than the standard of performance
of nationally recognized companies performing similar services; (d) at the time the Bulk Drug Substance is delivered, the Bulk Drug Substance Processed hereunder will conform to the Specifications, Quality Requirements and Applicable Laws; (e) it
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any of its obligations any person who has been debarred under the Generic Drug Enforcement Act, or who is otherwise precluded from the
provision of performing any of Targeted Genetics’ obligations hereunder; and (f) it will not deliver to GenVec any Batch of Bulk Drug Substance that has not undergone and passed sterility testing and microplasm testing in accordance with the
Specifications. 
 
11.7 DISCLAIMER OF
WARRANTIES. THE LIMITED WARRANTY SET FORTH IN THIS ARTICLE 11 AND ANY OTHER WARRANTIES PROVIDED BY EITHER PARTY PURSUANT TO THIS AGREEMENT ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY AND ANY
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. MOREOVER, NEITHER GENVEC NOR TARGETED GENETICS MAKES ANY REPRESENTATION OR WARRANTY (EXPRESS OR IMPLIED) THAT THE USE OR MANUFACTURE OF THE TARGETED GENETICS MATERIALS, GENVEC MATERIALS, GENVEC
PROPRIETARY INFORMATION, TARGETED GENETICS PROPRIETARY INFORMATION, OR THE BULK DRUG SUBSTANCE DOES NOT, OR WILL NOT, INFRINGE ON ANY PATENT, TRADE SECRET OR OTHER INTELLECTUAL PROPERTY RIGHT OF ANY THIRD PARTY. 
 
11.8 Limitation of Liability. EXCEPT WITH
RESPECT TO A CLAIM FOR INDEMNIFICATION UNDER ARTICLE 13 OR A BREACH OF ARTICLE 12 (PROPRIETARY INFORMATION), NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES FOR BREACH OF THIS AGREEMENT, AND NEITHER
PARTY’S TOTAL LIABILITY FOR ANY OTHER DAMAGES FOR BREACH OF THIS AGREEMENT SHALL EXCEED [*]. 
 
ARTICLE XII: PROPRIETARY INFORMATION 
 
12.1 Proprietary Information. For purposes of this Agreement, “Proprietary Information” of each party means all information owned by suchp party, including without limitation, to the
extent owned by such party, Statements of Procedure, Batch Records and all documentation and information relating to cleaning validation and process validation, and which is disclosed by such party to the other at any time in connection with this
Agreement, except for any information expressly excluded by the Disclosing Party in writing or any information which the Receiving Party can establish by competent written evidence (a) was known to the Receiving Party at the time of disclosure by
the Disclosing Party, (b) was generally available to the public at the time of disclosure by the Disclosing Party, (c) after disclosure by the Disclosing Party, became generally available to the public other than in breach of this Section 12.1, or
(d) after disclosure by the Disclosing Party, became known to the Receiving Party from a third party lawfully disclosing such information and was not disclosed to the Receiving Party under any obligations of confidentiality. The term “Receiving
Party” means a party that has access to Proprietary Information of the other party (the “Disclosing Party”). 
 
12.2 Use of Proprietary Information. Neither party shall (a) disclose, publish or otherwise make available (orally or in writing) any Proprietary
Information of the other party to any person (including any employee of the Receiving Party without a need to know or to have access to such Proprietary Information or who does not agree to be bound by these terms), except as expressly 

 

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authorized herein or to its employees and independent contractors who are subject to a nondisclosure obligation comparable in scope to this
Article 12 and who have a need to know such Proprietary Information for purposes of performing under this Agreement, and except as required by Applicable Laws; or (b) use any Proprietary Information of the other party except as contemplated by this
Agreement or upon express prior written consent of the other party. Moreover, each party shall use commercially reasonable efforts to protect the other party’s Proprietary Information from unauthorized use or disclosure, using at least the
level of efforts such party uses to protect its own similar information from unauthorized use or disclosure. 
 
12.3 Disclosure of Proprietary Information. Notwithstanding Section 12.2, a Receiving Party may disclose Proprietary Information to
the extent required by a court or other governmental authority, provided that (i) the Receiving Party gives the Disclosing Party advance written notice of the disclosure, (ii) the Receiving Party uses reasonable efforts to resist disclosing the
Proprietary Information, (iii) the Receiving Party cooperates with the Disclosing Party on request to obtain a protective order or otherwise limit the disclosure, and (iv) as soon as reasonably possible, the Receiving Party provides a letter from
its counsel confirming that the Proprietary Information is, in fact, required to be disclosed. Notwithstanding the foregoing, either party may also disclose the main body of this Agreement (i.e., this Agreement without any exhibits or attachments),
and GenVec may disclose all attachments and exhibits hereto except for Exhibit I (Manufacturing Core), to the extent useful or necessary to pursue financing, to pursue relationships relating to corporate joint ventures, or with respect to asset or
stock acquisition transactions,  provided such disclosure is made to the applicable third party pursuant to a nondisclosure obligation comparable in scope to this Article 12. 
 
12.4 Return or Destruction of Proprietary Information. Upon either party’s request of the other
party at any time or upon expiration or termination of this Agreement, the other party shall return or destroy, as requested by such party, all of the other party’s Proprietary Information provided under this Agreement in accordance with such
party’s directions; provided, however, that the other party shall not be required to return or destroy any such Proprietary Information if doing so would cause that party to violate any Applicable Law, or with respect to Targeted Genetics’
Proprietary Information received by GenVec, if GenVec is entitled to retain such Proprietary Information pursuant to this Agreement or the Agreement otherwise contemplates continued use of such Proprietary Information, if it is necessary or
desirable to GenVec to retain such Proprietary Information for purposes of making any submissions to a Regulatory Authority, or in order to otherwise comply with any requirements of, or obligations to, a Regulatory Authority. 
 
12.5 Intellectual Property. 
 
(a) The rights of each party in Intellectual
Property owned by or licensed to it prior to or developed during the Term separately from the performance of its obligations under this Agreement, shall not be affected by this Agreement. 
 
(b) GenVec shall own all Intellectual Property arising from Targeted Genetics’
performance of its obligations (or as a result of any other work performed by Targeted Genetics for GenVec or in anticipation of this Agreement), arising as a result of any information provided to Targeted Genetics by GenVec or its representatives,
or relating primarily to the Bulk Drug 

 

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Substance, GenVec Materials [*]. Targeted Genetics shall promptly disclose and communicate full information regarding the same to GenVec.

 
(c) To the extent that any
works of authorship result from Targeted Genetics’ obligations under this Agreement, such works of authorship shall be deemed “works made for hire” within the meaning of the copyright Laws of the United States and any similar laws of
other jurisdictions, and GenVec shall own all right, title and interest in and to such works of authorship. 
 
(d) With respect to all Intellectual Property that GenVec is to own pursuant to Section 12.5(b), and to the extent, if
any, that Targeted Genetics or its personnel have rights in any works of authorship notwithstanding Section 12.5(c), Targeted Genetics hereby irrevocably assigns to GenVec all right, title and interest in and to such Intellectual Property or works
of authorship. Upon the request of GenVec, Targeted Genetics shall sign and deliver (or cause its personnel to sign and deliver) all patent applications, assignments and other documents and shall otherwise assist GenVec to obtain, maintain, perfect
or enforce any of GenVec’ rights hereunder. Targeted Genetics acknowledges and agrees that GenVec may use all Intellectual Property and such works of authorship for any purposes that GenVec deems appropriate, including submission of such works
of authorship to governmental or regulatory authorities, and Targeted Genetics agrees that it shall not claim that any such Intellectual Property or works of authorship is not Proprietary Information of GenVec, is Proprietary Information of Targeted
Genetics or that Targeted Genetics otherwise has rights in or to such Intellectual Property or works of authorship. 
 
(e) Targeted Genetics shall have valid and enforceable written agreements with all of its personnel performing any
obligations hereunder containing a non-disclosure obligation comparable in scope to that set forth in this Article 12 and giving Targeted Genetics all rights and authority necessary to effectuate the provisions of this Article 12. Targeted Genetics
shall provide copies of such agreements to GenVec upon GenVec’ request. 
 
12.6 Injunctive Relief. The parties acknowledge that either party’s breach of this Article 12 would cause the other party irreparable injury for which it would not have an adequate remedy
at law. In the event of such a breach, notwithstanding anything to the contrary herein, including the dispute resolution procedures set forth in Section 2.7 and 14.7, the non-breaching party shall be entitled to immediate injunctive relief in
addition to any other remedies it may have at law or in equity. 
 
12.7 License. Targeted Genetics shall not use or employ any Intellectual Property owned or controlled by Targeted Genetics in Processing Bulk Drug Substance or otherwise in performing Services under this Agreement without the
prior written consent of GenVec. In the event that Intellectual Property owned by Targeted Genetics is useful or required for Processing Bulk Drug Substance or otherwise in performing Services under this Agreement, Targeted Genetics shall so notify
GenVec and at GenVec’s request negotiate in good faith a Change Order and the fees associated with such Change Order, but in the absence of such a Change Order, the first sentence of this Section shall apply. [*]. 
 

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ARTICLE
XIII: INDEMNIFICATION AND INSURANCE 
 
13.1 Indemnification
by Targeted Genetics. Targeted Genetics shall defend, indemnify and hold harmless GenVec, its Affiliates, directors, officers, employees and agents from and against any Claim arising out of or resulting from any (a) breach of its
representations, warranties or obligations set forth in this Agreement, (b) negligence, willful misconduct or breach of this Agreement by Targeted Genetics, except to the extent that such breach, negligence or willful misconduct arises out of or
results from the breach of this Agreement by GenVec or the negligence or willful misconduct of GenVec; (c) incorporation of Targeted Genetics Materials into a Bulk Drug Substance; and (d) infringement or violation of any patent, trade secret,
copyright, trademark or other proprietary rights with respect to Targeted Genetics Materials or Targeted Genetics’ performance hereunder, except to the extent such liabilities are those which GenVec is obligated to indemnify pursuant to Section
13.2(d). 
 
13.2 Indemnification by GenVec. GenVec shall
defend, indemnify and hold harmless Targeted Genetics, its Affiliates, directors, officers employees and agents from and against any Claim arising out of or resulting from (a) any breach of its representations, warranties or obligations set forth in
this Agreement; (b) any manufacture, sale, promotion, distribution or use of a product manufactured using the Bulk Drug Substance, including, without limitation, product liability or strict liability, except to the extent that such liability arises
due to the negligence, willful misconduct or breach of this Agreement by Targeted Genetics; (c) GenVec’s exercise of control over the Processing under this Agreement, to the extent that GenVec’s instructions or directions violate
Applicable Law or regulation; (d) infringement or violation of any patent, trade secret, copyright, trademark or other proprietary rights of such third party in any jurisdiction in the Territory by Targeted Genetics in manufacturing the Bulk Drug
Substance as the necessary result of Targeted Genetics’ compliance with the Procedures (except to the extent such infringement relates to any portion of such Procedures originating from or provided by Targeted Genetics) or use of GenVec
Materials in accordance with the Procedures, GenVec’s SOPs or GenVec’s Specifications; (e) any negligence or willful misconduct by GenVec, except to the extent that any of the foregoing arises out of or results from the breach by Targeted
Genetics of this Agreement, or the negligence or willful misconduct of Targeted Genetics. 
 
13.3 Indemnification Procedures. 
 
(a) Notice. The indemnification obligations of either party set forth in this Section 13.3 are conditioned upon the party entitled to indemnification under this Agreement (the “Indemnified
Party”) promptly notifying the other party from whom the Indemnified Party is seeking indemnification (the “Indemnifying Party”) in writing of any Claim of which the Indemnified Party becomes aware, except to the extent the
Indemnifying Party is not prejudiced by such failure. Thereafter, the Indemnified Party will promptly deliver to the Indemnifying Party copies of all notices and documents received by the Indemnified Party relating to the Claim. 
 
(b) Defense by Indemnifying Party. The
Indemnifying Party shall have the right, within ten (10) days after receipt of notice of the Claim, to assume the defense of the Claim with counsel reasonably satisfactory to the Indemnified Party. 
 
(c) Right to Participate and Retain
Separate Counsel. The Indemnified Party will have the right to participate in any such proceeding and to retain its own counsel to participate in 

 

22 

its defense in any such proceeding. The Indemnified Party shall pay for its own counsel except to the extent representation of both parties
by the same counsel would be inappropriate due to an actual or potential conflict of interests between them. In any such case and to such extent, the Indemnifying Party shall be responsible to pay for the reasonable costs and expenses of the
separate counsel retained to participate in the defense of the Indemnified Party, provided that such expenses are attributable to those Claims covered by the indemnity provided hereunder. 
 
(d) Cooperation. The Indemnified Party will cooperate in all reasonable respects with
the Indemnifying Party in connection with any Claims and the defense or compromise thereof. Such cooperation will include the retention and (upon the Indemnifying Party’s request) the provision to the Indemnifying Party of records and
information reasonably relevant to the Claim, making employees available on a mutually convenient basis to provide additional information, and explanation of any material provided under this Agreement. The Indemnified Part shall not admit any
liability with respect to settlement, compromise or discharge of the Claim without the Indemnifying Party’s prior written consent; provided however, that the Indemnified Party may make admissions of facts which it is reasonably required to
make. 
 
(e) Settlement.
The Indemnifying Party will have the right, in consultation with the Indemnified Party, to settle those aspects of the Claim dealing only with the payment of money and/or with other relief not affecting the activities of the Indemnified Party,
provided that the Indemnifying Party pays such money and such settlement includes a general release of the Indemnified Party from the Claim. In connection with any such defense or settlement, the Indemnifying Party will not enter into a consent
decree involving any admission, injunctive or non-monetary relief or consent to an injunction without the Indemnified Party’s prior written consent, which will not be unreasonably withheld or delayed. 
 
13.4 Insurance. 
 
(a) Targeted Genetics. Targeted
Genetics shall, at its own cost and expense, obtain and maintain in full force and effect the following insurance during the Term of this Agreement: (i) Commercial General Liability insurance with per-occurrence and general aggregate limits of not
less than [*]; (ii) Products and Completed Operations Liability Insurance with per-occurrence and general aggregate limits of not less than [*]; (iii) Workers’ Compensation and Employer’s Liability Insurance with statutory limits for
Workers’ Compensation and Employer’s Liability insurance limits of not less than [*]; (iv) Professional Services Errors & Omissions Liability Insurance with per claim and aggregate limits of not less than [*] covering sums that
Targeted Genetics becomes legally obligated to pay as damages resulting from claims made by GenVec for errors or omissions committed in the conduct of the services outlined in this Agreement. In the event that any of the required policies of
insurance are written on a claims made basis, then such policies shall be maintained during the entire Term of this Agreement and for a period of not less than [*] following the termination or expiration of this Agreement. Targeted Genetics shall
obtain a waiver from any insurance carrier with whom Targeted Genetics carries Workers’ Compensation insurance releasing its subrogation rights against GenVec. GenVec shall be named as an additional insured under the Commercial General
Liability and Products and Completed Operations Liability insurance policies as respects the manufacturing services outlined in this Agreement. Targeted Genetics shall furnish certificates of insurance for all of the above noted policies and
required additional insured status to GenVec 

 

	*	 	Confidential treatment requested. 

 

23 

as soon as practicable after the Effective Date of this Agreement and upon renewal of any such policies. Each insurance policy that is
required under this Section shall be obtained from an insurance carrier with an A.M. Best rating of at least A- VII. 
 
(b) GenVec Insurance. GenVec shall, at its own cost and expense, obtain and maintain in full force and effect the
following insurance during the Term of this Agreement: (i) Products and Completed Operations Liability Insurance with per-occurrence and general aggregate limits of not less than [*]; and (ii) Workers’ Compensation and Employer’s Liability
Insurance with statutory limits for Workers’ Compensation and Employer’s Liability insurance limits of not less than [*]. In the event that any of the required policies of insurance are written on a claims made basis, then such policies
shall be maintained during the entire Term of this Agreement and for a period of not less than [*] following the termination or expiration of this Agreement. GenVec shall obtain a waiver from any insurance carrier with whom GenVec carries
Workers’ Compensation insurance releasing its subrogation rights against Targeted Genetics. Targeted Genetics shall be named as an additional insured under the Products and Completed Operations Liability insurance policies as respects the Bulk
Drug Substance. GenVec shall furnish certificates of insurance for all of the above noted policies and required additional insured status to Targeted Genetics as soon as practicable after the Effective Date of this Agreement and upon renewal of any
such policies. Each insurance policy that is required under this Section shall be obtained from an insurance carrier with an A.M. Best rating of at least A- VII. 
 
ARTICLE XIV: MISCELLANEOUS 
 
14.1 Entire Agreement; Amendments. This Agreement is the entire understanding between the parties and supersedes any
prior contracts, agreements or understanding (oral or written) of the parties with respect to the subject matter hereof. No term of this Agreement may be amended except upon written agreement of both parties, unless otherwise provided in this
Agreement. 
 
14.2 No Waiver. Failure by either party to
insist upon strict compliance with any term of this Agreement in one (1) or more instances will not be deemed to be a waiver of its rights to insist upon such strict compliance with respect to any subsequent failure. 
 
14.3 Notices. Any notice from either party to the other party will be
effective upon receipt and must be personally delivered to such party or sent to such party by deposit in the United States mail, first class, postage prepaid or telecopy transmission (with written confirmation copy to follow via United States
mail), to the address for such party below or such other address as a party may designate from time to time in accordance with this Section: 
 

	 To GenVec:
	  	 GenVec, Inc.

	 	  	 65 West Watkins Mill Road

	 	  	 Gaithersburg, MD 20878

	 	  	 Attn: Vice President,

	 	  	           Process Development and
Clinical Supply

	 	  	 Facsimile: 240-632-0735

 

	*	 	Confidential treatment requested. 

 

24 

 

	 With a copy to:
	  	 GenVec, Inc.

	 	  	 65 West Watkins Mill Road

	 	  	 Gaithersburg, MD 20878

	 	  	 Attn: Senior Vice President, Corporate Development

	 	  	 Facsimile: 240-632-0735

 

	 To Targeted Genetics:
	  	 Targeted Genetics Corporation

	 	  	 1100 Olive Way

	 	  	 Suite 100

	 	  	 Seattle, Washington 98101

	 	  	 Attn:Vice President,

	 	  	           Process Sciences and
Manufacturing

	 	  	 Facsimile: 206-223-0288

 

	 With a copy to:
	  	 Targeted Genetics Corporation

	 	  	 1100 Olive Way

	 	  	 Suite100

	 	  	 Attn: Legal Dept.

	 	  	 Facsimile: 206-521-4783

 
14.4 Successors and
Assigns. This Agreement will be binding upon and inure to the benefit of the parties, their successors and permitted assigns. Neither party may assign this Agreement, in whole or in part, without the prior written consent of the other party,
except that either party may without the other party’s consent assign this Agreement to a successor of all or substantially all of the business or assets of the assigning company, and except that GenVec may assign rights with respect to those
products manufactured under this Agreement to any company which acquires GenVec’s rights to, or the right to distribute, all or some of such products. 
 
14.5 Independent Contractors. The relationship of the parties is that of independent contractors, and neither party will incur any debts or make
any commitments for the other party except to the extent expressly provided in this Agreement. Nothing in this Agreement is intended to create or will be construed as creating between the parties the relationship of joint ventures, co-partners,
employer/employee or principal and agent. 
 
14.6 Further
Assurances. The parties agree to execute, acknowledge and deliver such further instruments and of all such other incidental acts as may be reasonably necessary or appropriate to carry out the purpose and intent of this Agreement. 
 
14.7 Dispute Resolution. In the event of a Dispute that the parties are
unable to resolve through the Executive Committee (as set forth in Section 2.7), the parties shall next attempt to resolve the Dispute by presenting it to their respective Presidents, who shall in good faith consider and attempt to resolve the
Dispute (“Dispute Escalation”). Either party may initiate such Dispute Escalation by delivering written notice to the other party demanding such Dispute Escalation. If the parties remain unable to resolve such dispute within thirty (30)
days after delivery of such notice of Dispute Escalation, either party may pursue any remedy it may have at law or in equity. Nothing herein or in Section 2.7 shall prevent either party from seeking injunctive relief from a court of competent
jurisdiction at any time. 
 

25 

 
14.8 Severability. If
any term of this Agreement is declared invalid or unenforceable by a court or other body of competent jurisdiction, the remaining terms of this Agreement will continue in full force and effect. 
 
14.9 Governing Law and Venue. This Agreement shall be governed by and
construed under the laws of the State of Maryland, excluding its conflicts of law provisions. Courts of competent jurisdiction in Maryland shall have exclusive venue and jurisdiction over any disputes arising under this Agreement. 
 
14.10 Captions. The captions in this Agreement are for convenience only
and are not to be interpreted or construed as a substantive part of this Agreement. 
 
14.11 Counterparts. This Agreement may be executed in one (1) or more counterparts, each of which will be deemed an original but all of which together will constitute one (1) and the same instrument. 
 
14.12 Public Announcements. Upon execution of this Agreement, the
parties may publicize and disclose this Agreement through a press release in the form attached as Exhibit H. Neither party will make any other press release or other public disclosure regarding this Agreement or the transactions contemplated hereby
without the other party’s express prior written consent, except as required under Applicable Law or by any governmental agency, in which case the party required to make the press release or public disclosure shall use commercially reasonable
efforts to obtain the approval of the other party as to the form, nature and extent of the press release or public disclosure prior to issuing the press release or making the public disclosure. Once approved, the language of the press release may be
used in other contexts by either party in any substantially similar form. 
 
IN WITNESS WHEREOF, the parties have caused their duly authorized representative to execute this Agreement effective as of the date first written above. 
 

	 TARGETED GENETICS CORPORATION
	    	 GENVEC, INC.

	
	 By:
	  	
	    	 By:
	  	

	 Name:
	  	
	    	 Name:
	  	

	 Its:
	  	
	    	 Its:
	  	

 

26 

 
EXHIBIT A

GENVEC MATERIALS 
 
[*] 
 

	*	 	Confidential treatment requested. 

 

27 

 
EXHIBIT B

STATEMENT OF WORK 
 
[*] 
 

	*	 	Confidential treatment requested. 

 

28 

 
EXHIBIT C

SPECIFICATIONS 
 
[*] 
 

	*	 	Confidential treatment requested. 

 

29 

 
EXHIBIT D

QUALITY REQUIREMENTS 
 
[*] 
 

	*	 	Confidential treatment requested. 

 

30 

 
EXHIBIT E

PERSONNEL 
 
[*] 
 

	*	 	Confidential treatment requested. 

 

31 

 
EXHIBIT F

EQUIPMENT 
 
[*] 
 

	*	 	Confidential treatment requested. 

 

32 

 
EXHIBIT G

PROCESSING FEES 
 
[*] 
 

	*	 	Confidential treatment requested. 

 

33 

 
EXHIBIT H

PRESS RELEASE 
 

34 

 
EXHIBIT I

MANUFACTURING CORE 
 
[*] 
 

	*	 	Confidential treatment requested. 

 

35Study Funding Agreement

 
Exhibit 10.2

 
[*] Portions of this exhibit have been omitted pursuant to a
request for confidential treatment filed with the Securities and Exchange Commission (“SEC”). The omitted portions of this exhibit have been filed separately with the SEC. 
 
Study Funding Agreement 
 
This Study Funding Agreement, dated as of April 23, 2003, is made by and between Targeted Genetics Corporation, a corporation
organized and existing under the laws of the State of Washington, having offices located at 1100 Olive Way, Suite 100, Seattle, Washington 98101 (“TG”), and Cystic Fibrosis Foundation Therapeutics, Inc., a not for profit corporation
organized and existing under the laws of the State of Delaware, having offices located at 6931 Arlington Road, Bethesda, Maryland 20814 (“CFFT”) with respect to Study Protocol and involving the Compound, both as defined below.

 
Witnesseth That: 
 
Whereas, TG is engaged in the development and commercialization of the
Compound (as defined below) which may be useful for a gene therapy treatment of cystic fibrosis (“CF”); and 
 
Whereas, CFFT is organized and operated to develop the means to cure and control CF and to improve the quality of life for those with the disease; and

 
Whereas, CFFT desires to assist TG by funding certain of
TG’s costs (as described more fully in Section 2.2(b)) related to the conduct of a multi-center phase II clinical trial of the Compound for the CF indication (the “Study”) primarily through CFFT’s existing national network
of care centers known as the Therapeutics Development Network (“TDN”) and other mutually agreed upon sites on the terms and conditions set forth herein; and 
 

1 

 
Whereas, TG is willing to
sponsor such Study (as described more fully in Section 2.2(a)), and commit to further development of the Compound for the CF indication in the event the Success Criteria (as defined below) are met, on the terms and conditions set forth herein.

 
Now Therefore, in consideration of the premises and mutual
covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties (as defined below) hereto agree as follows: 
 
1. Definitions. As used in this Agreement, the following terms
shall have the meanings set forth in this Section 1 unless context dictates otherwise: 
 
1.1 “AAA” shall have the meaning assigned to such term in Section 10.2. 
 
1.2 “Affiliate” shall mean,
with respect to a Party, any entity which directly or indirectly controls, is controlled by, or is under common control with, such Party. For these purposes, “control” shall refer to (A) the ownership, directly or indirectly, of at
least fifty percent (50%) of the voting securities or other ownership interest of an entity; or (B) the possession, directly or indirectly, of the power to direct the management or policies of an entity, whether through the ownership of voting
securities, by contract or otherwise. 
 
1.3 “Agreement” shall mean this study funding agreement together with the recitals and all exhibits hereto. 
 
1.4 “Applicable Rate” shall mean the prime rate published in the Wall Street Journal from time to
time plus [*] percentage points. 
 

	*	 	Confidential treatment requested. 

 

2 

 
1.5 “Approval Payment” shall have the meaning assigned to such term in Section 4.1. 
 
1.6 “Breaching Party” shall have the meaning assigned to such term in Section 8.2. 
 
1.7 “Budget” shall have the
meaning assigned to such term in Section 2.2(b). 
 
1.8 “CF “ shall have the meaning assigned to such term in the first whereas clause. 
 
1.9 “CFFT Repayment Amount” shall have the meaning assigned to such term in Section 4.4(a)(1).

 
1.10 “Commercially
Reasonable Efforts” shall mean, with respect to a Party, those commercially reasonable efforts by that Party equivalent to the efforts that Party would make in similar circumstances with respect to similar operations entirely for its own
account at that time; provided such efforts are those as would be reasonably made by a prudent business person acting in good faith and in the exercise of reasonable commercial judgment exerting such effort and employing such resources as
would normally be taken, exerted or employed by such person for a product of similar market potential at a similar stage of its product life, taking into account the competitiveness of the relevant marketplace, the proprietary positions of Third
Parties, the regulatory structure involved, and the profitability of the product. 
 
1.11 “Compound” shall mean aerosolized tgAAVCF as defined in the attached Study Protocol 25E01 entitled
“ A Multicenter, Double-Blind, Placebo Controlled, Phase II Study of Areosolized tgAAVCF for the Treatment of Cystic Fibrosis”. 
 
1.12 “Confidential Information” shall mean, with respect to either Party, all confidential or proprietary
information and materials, patentable or otherwise, in any form 

 

3 

(written, oral, photographic, electronic, magnetic, or otherwise) which are disclosed by or on behalf of such Party to the other Party
pursuant to and in contemplation of this Agreement, including, without limitation, information relating to the Compound or the Product. 
 
1.13 “Contribution” shall mean the actual amounts paid by CFFT under Section 2.2(b) plus [*] of such
actual amounts paid hereunder. 
 
1.14 “Data Package” shall have the meaning assigned to such term in Section 2.3(b). 
 
1.15 “Disclosing Party” shall have the meaning assigned to such term in Section 6.1. 
 
1.16 “DSMB” shall mean the
Data Safety Monitoring Board for the Study. 
 
1.17 “Effective Date” shall mean the date of this Agreement as set forth in the Preamble. 
 
1.18 “Executive Officers” shall have the meaning assigned to such term in Section 10. 
 
1.19 “FDA” shall mean the
United States Food and Drug Administration, or any successor agency having regulatory jurisdiction over the manufacture, distribution and sale of drugs in the United States, and its territories and possessions. 
 
1.20 “Field” shall mean the
gene therapy treatment of CF in humans. 
 
1.21 “IND” shall mean the investigational new drug application filed with the FDA pursuant to Part 312 of Title 21 of the U.S. Code of Federal Regulations, and designated BB5933, including any amendments thereto
limited to those referred to in Study Protocol 25E01 

 

	*	 	Confidential treatment requested. 

 

4 

entitled “A Multicenter, Double-Blind, Placebo Controlled, Phase II Study of Aerosolized tgAAVCF for the Treatment of Cystic
Fibrosis”. 
 
1.22
“Indemnitee” shall have the meaning assigned to such term in Section 7.2. 
 
1.23 “License Grant” shall have the meaning assigned to such term in Section 4.2. 
 
1.24 “Licensing Income”
shall have the meaning assigned to such term in Section 4.4(a). 
 
1.25 “Net Sales” shall mean the gross amount invoiced for the sale of the Product for use in the Field in arm’s length sales to Third Parties less deductions not otherwise
reimbursed by the Third Party for: [*] 
 
[*] 
 
1.26
“Neutral Member” shall have the meaning assigned to such term in Section 2.3. 
 
1.27 “Non-breaching Party” shall have the meaning assigned to such term in Section 8.2. 
 
1.28 “Party” shall mean TG
or CFFT and, when used in the plural, shall mean TG and CFFT. 
 
1.29 “Payee” shall have the meaning assigned to such term in Section 5.1(a). 
 
1.30 “Payor” shall have the meaning assigned to such term in Section 5.1(a). 
 

	*	 	Confidential treatment requested. 

 

5 

 
1.31 “Principal Investigator” shall mean those Investigators who will personally conduct or supervise a study in accordance with the Study Protocol and are mutually agreed upon by TG and the TDN. Any subinvestigators
to be involved in the treatment of patients under the Study Protocol are listed in Exhibit B hereto. In the event that the Principal Investigator becomes unable to complete the Study Protocol for any reason, TG may terminate the Study Protocol and
this Agreement if a substitute principal investigator acceptable to TG is not promptly designated by the TDN, such acceptance not to be unreasonably withheld. 
 
1.32 “Product” shall mean tgAAVCF as defined in Clinical Protocol 25E01. 
 
1.33 “Qualified Subject” is
a research subject who, on entrance into the treatment phase of the Study, has met all of the eligibility criteria and none of the exclusion criteria in the Study Protocol and has given his or her written informed consent to participate in the
Study. 
 
1.34 “Receiving
Party” shall have the meaning assigned to such term in Section 6.1. 
 
1.35 “Registration” shall mean, with respect to each country in the Territory, written approval of the Registration Application for the Product filed in such country, including pricing
or reimbursement, where applicable, by the Regulatory Authority in such country. 
 
1.36 “Registration Application” shall mean a New Drug Application under the United States Federal Food,
Drug and Cosmetics Act and the regulations promulgated thereunder, or a comparable filing for Registration in a country, in each case with respect to the Product for application in the Field in the Territory. 
 

6 

 
1.37 “Regulatory Authority(ies)” shall mean the FDA in the U.S., and any health regulatory authority(ies) in any country in the Territory that is a counterpart to the FDA and holds responsibility for granting
regulatory marketing approval for the Product in such country, and any successor(s) thereto as well as any state or local health regulatory authorities having jurisdiction for any activities contemplated by the Parties. 
 
1.38 “Rules” shall have the
meaning assigned to such term in Section 10.2. 
 
1.39 “Study” or “Study Protocol” shall mean Study Protocol 25E01 entitled “ A Multicenter, Double-Blind, Placebo Controlled, Phase II Study of Aerosolized tgAAVCF for the Treatment of Cystic
Fibrosis”. 
 
1.40
“Study Review Committee” or “SRC” shall have the meaning assigned to such term in Section 2.3. 
 
1.41 “Success Criteria” shall mean the criteria established by the Parties and annexed hereto as
Exhibit A, which must be met by the results of the Study before any further development of the Compound. Fulfillment of the Success Criteria shall either be determined by the SRC, or if the SRC is not established, then in accordance with the
agreement of the parties. The parties’ failure to agree whether or not Success Criteria have been met shall be subject to dispute resolution pursuant to Section 10 of this Agreement. 
 
1.42 “TDN” shall have the meaning assigned to such term in the third whereas
clause. 
 
1.43
“TDNCC” shall mean the TDN’s coordinating center. 
 

7 

 
1.44 “Territory” shall mean [*]. 
 
1.45 “tgAAVCF” shall mean the gene transfer vector comprising [*] as described in the Study set forth in protocol number 25E01 entitled “ A Multicenter, Double-Blind, Placebo Controlled,
Phase II Study of Aerosolized tgAAVCF for the Treatment of Cystic Fibrosis”. 
 
1.46 “TG Repayment Amount” shall have the meaning assigned to such term in Section 4.4(ii)(2).

 
1.47 “Third
Party” shall mean any person who or which is neither a Party nor an Affiliate of a Party. 
 
1.48 “United States” or “U.S.” shall mean the United States of America. 
 
1.49 “Work Plan” shall have
the meaning assigned to such term in Section 2.2. 
 
2. Conduct and Oversight of the Study. 
 
2.1 Generally. The Parties shall use Commercially Reasonable Efforts to fulfill their respective obligations under this Agreement and shall cooperate, in good faith, with the other in reasonably facilitating the other
Party’s fulfillment of its obligations under this Agreement.  
 
2.2 Performance of the Study. The Study shall commence as soon as practicable after the Effective Date and shall be performed at various sites in the TDN and at various sites outside the TDN if
it is deemed necessary by TG, utilizing the TDN’s oversight services, in accordance with (i) the draft summary work plan developed and agreed to by the Parties (the “Work Plan”), as amended, from time to time, upon the mutual
agreement of the Parties, and (ii) the details of 

 

	*	 	Confidential treatment requested. 

 

8 

the Study set forth in protocol number 25E01 entitled “A Multicenter, Double-Blind, Placebo Controlled, Phase II Study of Aerosolized
tgAAVCF for the Treatment of Cystic Fibrosis”. 
 
(a) Obligations of TG. TG shall be principally responsible for the conduct of the Study. TG shall be responsible for: 
 
(i) working with the TDNCC to identify appropriate clinical sites to conduct the Study; 
 
(ii) providing the TDN with a mutually
agreed upon Study Protocol 25E01 entitled “A Multicenter, Double-Blind, Placebo-Controlled, Phase II Study of Aerosolized tgAAVCF for the Treatment of Cystic Fibrosis” attached as Exhibit X; 
 
(iii) providing the Principal Investigators
at approved clinical sites with the required quantity of the Study Material (tgAAVCF or placebo), appropriately formulated in accordance with the Study Protocol and the preparation and delivery of any Study-related materials; 
 
(iv) monitoring compliance of selected sites
with the Study protocol, data collection, completion of case report forms, and the like. TG’s Study Monitor will contact the Principal Investigator or designee at periodic intervals by telephone and visit to assess the progress of the Study
Protocol. Case report forms and subject records will be reviewed at on—site visits in an effort to verify and achieve completeness of all entries. The status of the Study Material storage, dispensing and accountability will also be assessed;

 
(v) monitoring patient safety
data in anticipation of the DSMB reviews; 
 

9 

 
(vi) providing the Principal Investigator with an Investigator Brochure describing all known contraindications, warnings, precautions, and adverse reactions associated with the administration of the Study Material. If such
information is revised while the Study Protocol is in progress, the latest revision will also be sent to the Principal Investigator at that time; 
 
(vii) performing laboratory analyses on samples collected from study patients as outlined in Exhibit X (list of
samples)—[*]; 
 
(viii)
maintaining Regulatory Compliance. TG warrants that it has at all times complied and will continue to comply with all FDA and applicable foreign rules, regulations, requirements, and guidelines regarding administration, manufacture and production of
the Study Material and any other drugs or fluids under the regulatory control of the FDA or such comparable foreign agencies which are to be supplied by TG for use in connection with the Study. In addition, if items are shipped in interstate
commerce, TG warrants that it will comply with all FDA rules, regulations, requirements and guidelines applicable to such shipment; 
 
(ix) indemnifying CFFT, the TDN and the TDNCC in accordance with Section 7.1; 
 
(x) cover all its own internal costs
incurred in connection with the conduct of the Study; and 
 
(xi) enter into a clinical trial agreements with the TDNCC and the TDN’s, which agreements shall include TG as a party. 
 

	*	 	Confidential treatment requested. 

 

10 

 
(b) Obligations of CFFT. CFFT shall provide such advice and assistance as TG may reasonably request and shall: 
 
(i) enter into a clinical trial agreement with the TDNCC, which agreement shall include TG as a party; 
 
(ii) pay, on behalf of TG, Study-site
expenses [*], and the clinical costs related to the conduct of the Study through the TDN, directly to such Study-sites and the TDN; 
 
(iii) pay directly for the DSMB; 
 
(iv) enter into third party relationships via the CF foundation and pay directly on behalf
of TG for data analysis costs, data management costs including without limitation [*]; 
 
(v) provide TG with copies of all data analysis received by CFFT; 
 
(vi) shall make all payments due under
Section 2.2(b) in accordance with the payment schedule(s) agreed to by and between TG and the Study sites and TG and the TDN, as the case may be and shall provide TG with copies of all invoices/payment statements and the like. 
 
Payments made by CFFT pursuant to this Section 2.2(b) shall
not exceed the [*] and attached to this Agreement as Exhibit A (the “Budget”). Requested payments in excess of [*] shall be considered a proposed amendment to this Agreement. 
 

	*	 	Confidential treatment requested. 

 

11 

 
(c) Mutual Obligations. 
 
(i) The Parties agree to comply with all federal, state, and local laws and regulations applicable to the conduct of the Study 
 
(ii) Annexed hereto as Exhibit B is an estimated budget for the costs and expenses agreed to by the Parties, which
may be amended, from time to time, upon the mutual written agreement of the Parties. 
 
2.3 The Study Review Committee. 
 
(a) Members; Responsibility. At the request of CFFT, if CFFT determines it shall be beneficial to the Study, the Parties shall establish a review committee (the “Study Review
Committee” or “SRC”), which shall consist of two (2) representatives from each of TG and CFFT and a fifth (5th) member mutually acceptable to both Parties (the “Neutral Member”). Each Party may replace any or all of its representatives on the SRC at any time upon written notice to the other Party in accordance with
Section 11.6 of this Agreement. The Neutral Member may only be replaced upon the mutual consent of both Parties. In the event the SRC is formed, the SRC’s only responsibility shall be to review the Study results and determine whether the
Success Criteria have been met. 
 
(b) Meeting. TG and the TDNCC shall provide each member of the SRC a copy of the [*] (the “Data Package”) promptly after they become available. Thereafter the SRC shall promptly convene a meeting on such date,
and at such place and time, as the members of the SRC shall agree, which shall in no case be more than [*] after receipt of the Data Package. 
 

	*	 	Confidential treatment requested. 

 

12 

 
At the meeting the SRC shall
review, discuss and compare the Data Package vis-à-vis the Success Criteria. The Parties acknowledge and agree that the Data Package shall be Confidential Information of TG pursuant to Section 6. 
 
(c) Decision-making; Minutes. The
decision of the Study Review Committee determining whether or not the Success Criteria have been met shall be made by [*] vote, with each member having [*] and shall be final. If [*] of the members find that the Success Criteria has not been met,
then this Agreement shall expire as set forth in Section 8.1(a). In any case, definitive minutes of the SRC meeting shall be finalized no later than [*] after the meeting. 
 
(d) Expenses. Each Party shall be responsible for all travel and related costs and
expenses for its SRC representatives to attend meetings of, and otherwise participate on, the SRC and shall share on an equal, 50/50 basis all such costs and expenses of the Neutral Member, in accordance with the consulting agreement between such
Neutral Member and the Parties regarding his/her membership. 
 
2.4 Use of Study Results. Notwithstanding anything contained herein to the contrary, CFFT shall be entitled to use the Study results as they relate to [*] in furtherance of its charitable and educational purposes including
sharing such Study results with other commercial entities (subject to appropriate confidentiality obligations); provided however that CFFT may not publish the Study results or other information relating to the Study without TG’s consent
and may not use treatment group data in whole or part for any purpose and may not [*] from any such sharing arrangement and further provided that such use does not diminish the intellectual property rights 

 

	*	 	Confidential treatment requested. 

 

13 

of TG. TG shall consent to any use of Study Results by CFFT prior to such use; TG’s consent shall not be unreasonably withheld.

 
3. Further Development Efforts. 
 
3.1 Generally. In the event that it is
determined in accordance with this Agreement that the Study meets the Success Criteria and except as set forth elsewhere in this Agreement, TG shall use Commercially Reasonable Efforts to develop and commercialize the Product for use in the Field,
including conducting all additional clinical trials, filing all required Registration Applications, and conduct any post-marketing clinical studies, [*], as TG may deem necessary or desirable to meet the requirements of the Regulatory Authorities
for Registration in the Territory. 
 
3.2 Statistically Significant Results. TG’s obligation to continue development and commercialization efforts with respect to the Product shall terminate if any additional multi-center clinical trial fails to achieve
statistically significant results [*] on a clinical meaningful endpoint acceptable to the FDA for Registration of the Product in the U.S. In such event, CFFT shall be promptly provided with a summary of the study results and an explanation of
TG’s methodology for calculating the statistical significance of such results so that CFFT may verify the computation. 
 
4. Compensation. 
 
4.1 Upon Receipt of Registration by TG. As partial consideration to CFFT for the Contribution, upon receipt of Registration in the
U.S. and subject to Section 4.2, TG shall pay to CFFT: (A) [*] the Contribution (the “Approval Payment”). 
 

	*	 	Confidential treatment requested. 

 

14 

 
(i) [*] of the Approval Payment within sixty (60) days of the first [*] of receipt of Registration [*]; 
 
(ii) [*] of the Approval Payment within [*] of the [*] of receipt of Registration [*]; 
 
(iii) [*] of the Approval Payment within [*]
of the [*] of receipt of Registration [*]; 
 
(iv) [*] of the Approval Payment within [*] of the [*] of receipt of Registration [*]; 
 
(v) [*] of the Approved Payment within [*] of the [*] of receipt of Registration [*] 
 
4.2 License to CFFT. In the event that
TG or any licensee or transferee terminates its development and commercialized arrangements [*] with respect to the Product for any reason other than [*] reasons including, but not limited to, [*], or (B) to [*]. TG hereby grants to CFFT an [*]
right and license in the Territory with the right to [*] in the Field (the “License Grant”) which license shall be activated upon such termination. In such event, TG shall provide CFFT with copies of [*] of the Product for use in
the Field [*]. In the event of the activation of such license, Section 4.1 shall not be applicable and the Parties shall [*]. Any license grant or transfer of [*] for the Compound by TG after the date of this Agreement shall be subject to the
license granted pursuant to this Section 4.2. The license rights granted to CFFT pursuant to this Section 4.2 shall be deemed to constitute intellectual property as defined in Section 365(n) of the U.S. 

 

	*	 	Confidential treatment requested. 

 

15 

Bankruptcy Code. The Parties agree that CFFT as a licensee of such rights shall retain and may exercise all of its rights and elections under
the U.S. Bankruptcy Code; provided however, that nothing in this Agreement shall be deemed to constitute a present exercise of such rights and elections. For purposes of this Section 4.2, TG will be considered to have terminated its
commercialization and development efforts with respect to the Product if it: (x) so notifies CFFT in writing; or (y) fails to use Commercially Reasonable Efforts to undertake activities designed to further the development of the Product in the U.S.
(which activities may include, but not be limited to, discussions with the FDA, additional preclinical studies, and the like) for any period of [*] or more. TG agrees, and shall cause its transferees to agree, to promptly notify CFFT upon
termination of the scientific development or commercialization of the Product. 
 
4.3 Third Party Development. In the event TG transfers [*] Product in the Field at any time prior to [*], the third party that TG transfers [*] the Product in the Field will honor the
obligations of TG to CFFT under Sections 4.1 and 4.2. 
 
4.4 Sharing of Revenues. 
 
(a) In the event Section 4.2 is applicable, in lieu of any payment set forth in Section 4.1, TG and CFFT shall [*], whether in the form of [*] (collectively, “Licensing Income”) paid to TG for the grant of
any license or the transfer of TG’s rights to develop and market the Product in the U.S., [*] after the repayment of: 
 
(1) first, [*] of the Contribution plus an additional [*] of such amount to CFFT (the “CFFT Repayment
Amount”); and 
 

	*	 	Confidential treatment requested. 

 

16 

 
(2) following repayment of the CFFT Repayment Amount, the [*] to the date of such transfer to TG (the “TG Repayment Amount”). A final accounting of the TG Repayment Amount shall be provided to CFFT promptly, but in
no case later than [*], after the execution of the final agreement for such transfer. 
 
(b) Payments under this Section 4.4 from CFFT to TG of CFFT’s share of Licensing Income shall be made within [*] of
CFFT’s receipt of any Licensing Income and shall be made first to CFFT until the CFFT Repayment Amount has been [*] and then to TG until the TG Repayment Amount has been [*], and thereafter shall be split, on [*]. 
 
4.5 Net Sales Milestone. As further
consideration to CFFT for the Contribution, in the event that cumulative Net Sales by TG, its Affiliates and sublicensees, if any, of the Product in the Field, and in any [*], in the Territory exceeds [*] during the period ending on the last day of
the month in which the [*] of receipt of Registration occurs, TG shall pay to CFFT the following payments: 
 
(i) a payment equal to [*] which shall be due within [*] of the [*] of receipt of Registration [*]; and 
 
(ii) a payment equal to [*] which shall be
due within [*] of the [*] of receipt of Registration [*] 
 
5. Payments. 
 
5.1 Reports. 
 

	*	 	Confidential treatment requested. 

 

17 

 
(a) Payment Reports. All payments due under this Agreement shall be accompanied by a report prepared by TG or CFFT, as the case may be (the “Payor”), summarizing the calculation used as the basis for
determining the payment and providing copies or reports from Third Parties and/or other supporting documentation for such calculations to the other Party (the “Payee”). Payor shall in addition furnish such other information, at
least annually, as Payee may request to verify any such payment and shall allow any relevant records to be examined by an independent certified public accountant chosen by [*]. Any and all records examined by such independent accountant shall be
deemed the Payor’s Confidential Information which may not be disclosed by said independent certified public accountant to any Third Party. 
 
(b) Net Sales. In order to assist CFFT in monitoring Net Sales in connection with the milestone payment set forth
in Section 4.5, TG agrees to provide CFFT with a report of annual Net Sales of the Product in the Field in the Territory, such report to be provided to CFFT within [*] of each fiscal year such information is relevant to CFFT for purposes of
verifying payments made pursuant to this Agreement. 
 
(c) Audit. At the request of a Party (“Requesting Party”), the other Party (“Audited Party”) shall permit an independent, certified public accountant of nationally recognized standing appointed by
Requesting Party, and acceptable to Audited Party, upon reasonable notice, to examine such records as may be necessary for the sole purpose of verifying the calculation of payments made pursuant to this Agreement. Any and all records examined by
such independent accountant shall be deemed Audited Party’s Confidential Information which may not be disclosed by said independent, certified public accountant to any Third Party. 
 

	*	 	Confidential treatment requested. 

 

18 

 
Requesting Party shall pay the
costs of such audit, provided that, if as a result of any inspection of the books and records of Audited Party, it is shown that the calculation of any amount paid to Requesting Party was underpaid by [*] or more, in addition to paying
Requesting Party the amount of the underpayment plus interest at the Applicable Rate, Audited Party shall reimburse Requesting Party for the fees it incurred for the audit. 
 
5.2 Mode of Payment. All payments shall be paid, in full, in U.S. dollars, and shall be made directly
to the Payee, at its offices first identified in the Preamble, or at such other location as the Payee may designate, in writing, pursuant to Section 11.6, from time to time, or by wire transfer to an account of the Payee, as Payee may reasonably
direct, in any case [*]. 
 
6. Ownership of Results and
Confidentiality 
 
6.1 Study Results.
Subject to applicable subject confidentiality requirements, all data, results, and other information derived from the Study using the Study Material shall be the exclusive property of TG. 
 
6.2 Intellectual Property. The Parties shall each retain ownership of any patent or other intellectual
property rights in inventions made by their respective employees in the course of the Study in accordance with applicable patent laws. Parties agree to assign to each other, at the request of either Party all of its rights in any such inventions.

 

	*	 	Confidential treatment requested. 

 

19 

 
6.3
Confidentiality. Recipient will protect and preserve the confidentiality of all information that is (a) derived from the Study (including the goals of the Study, and the information contained in the Protocol) or (b) disclosed in writing,
visually or orally by TG to CFFT and is not generally known outside of TG, including but not limited to data, methods, plans, findings and conclusions. CFFT will not without the written consent of TG disclose such information to any third party,
other than employees of CFFT who have a need to know such information and who are under similar obligations of confidentiality, for a period of five (5) years from the completion of the Study. The obligations of this paragraph do not apply to:

 
(a) information that is in the
public domain or that comes into the public domain through no fault of CFFT; 
 
(b) information learned by CFFT from a third party not subject to a duty to TG not to disclose information; 
 
(c) information known to CFFT from independent sources; 
 
(d) information that CFFT is required by law to disclose, provided that TG is given as much
prior notice and an opportunity to restrict or limit such disclosure as the circumstances permit. 
 
6.4 Publicity. Neither TG nor CFFT will, without the prior written approval of the other, use the name of the other, or any
abbreviation thereof, or the name of the Principal Investigator, expressly or by implication in connection with the Study or its results, in any news, publicity release, advertisement or other similar public disclosure. Notwithstanding any other
provision of this Agreement, TG may disclose information in response to a valid order of a court 

 

20 

or other governmental body, or as required by law, provided that TG gives CFFT prior written notice and cooperates with CFFT in contesting
such request, requirement or order or otherwise assists in protecting CFFT’s rights. 
 
7. Indemnification. 
 
7.1 Indemnification by TG. Subject to 7.2, TG shall indemnify, defend and hold harmless CFFT, its Affiliates, the TDNCC and the TDN’s conducting the study clinical trials, and their respective directors, officers,
employees and agents, from and against any and all liabilities, damages, losses, costs and expenses (including the reasonable fees of attorneys and other professionals) arising out of or resulting from claims by Third Parties based upon:

 
(a) [*] of TG or its Affiliates
and their respective directors, officers, employees and agents, in connection with TG’s performance of its obligations under this Agreement; or 
 
(b) any [*] relating to or arising out of any [*] the administration of the Compound in [*] compliance with the Study
Protocol to a Study subject during the Study. 
 
7.2 Exclusion from Indemnification. TG shall not be obligated to indemnify or hold harmless any Indemnitee for any claims, demands, liabilities, penalties, damages, losses, and expenses to the extent arising from:

 
(a) any Indemnitee’s [*]
or failure to adhere substantially and materially [*] or to comply [*]; and, 
 

	*	 	Confidential treatment requested. 

 

21 

 
(b) with respect to the TDN and the TDNCC as Indemnitees, their willful, reckless, or negligent acts or failure to adhere substantially and materially and to the terms of the Study Protocol and or to comply with applicable federal,
state and local laws and regulations, the reasonable recommendations, suggestions, or patient literature provided by TG. 
 
7.3 Procedures for Indemnification. In the event that any person (an “Indemnitee”) entitled to
indemnification under Section 7.1 is seeking such indemnification, such Indemnitee shall (A) inform, in writing, the indemnifying Party of the claim as soon as reasonably practicable after such Indemnitee receives notice of such claim, (B) permit
the indemnifying Party to assume direction and control of the defense of the claim (including the sole right to settle it at the sole discretion of the indemnifying Party; provided that such settlement does not impose any obligation on, or
otherwise adversely affect, the Indemnitee or another Party), (C) cooperate as requested (at the expense of the indemnifying Party) in the defense of the claim, and (D) undertake all reasonable steps to mitigate any loss, damage or expense with
respect to the claim(s). 
 
7.4
Complete Indemnification. All costs and expenses incurred by an Indemnitee in connection with enforcement of Section 7.1 shall also be reimbursed by the indemnifying Party. 
 
8. Term and Termination. 
 
8.1 Term. This Agreement shall become effective as of the Effective Date and, unless
earlier terminated pursuant to the other provisions of this Section 8, shall expire as follows: 
 
(a) In the event it is determined in accordance with this Agreement that the Success Criteria have not been met, or
thereafter if TG’s ongoing development efforts fail to 

 

22 

yield statistically significant results, this Agreement shall immediately expire and be of no further force or effect; provided
however in the event that TG elects, in its sole discretion, to continue development of the Product despite any such failure(s) or to resume development of the Product after any cessation of this Agreement shall be in full force and effect; or

 
(b) In the event it is
determined in accordance with this Agreement that the Success Criteria have been met, and TG’s ongoing development activities continue to achieve statistically significant results, this Agreement shall expire upon the expiration of all payment
obligations under this Agreement with respect to the Product in the Field in the Territory. 
 
8.2 Termination for Cause. Either TG or CFFT (the “Non-breaching Party”) may, without prejudice to any other remedies available to it at law or in equity, terminate this
Agreement in the event the other (the “Breaching Party”) shall have materially breached or defaulted in the performance of any of its material obligations hereunder, and such default shall have continued for [*] after written notice
thereof was provided to the Breaching Party by the Non-breaching Party. Any such termination shall become effective automatically at the end of such [*] period unless the Breaching Party has cured any such breach or default prior to the expiration
of such [*] period. The right of either TG or CFFT to terminate this Agreement as provided in this Section 8.2 shall not be affected in any way by such Party’s waiver or failure to take action with respect to any previous default. 
 
8.3 Termination Without Cause. CFFT may terminate this
Agreement without cause by providing TG [*] written notice of its intent to do so. The parties will safely withdraw subjects from the Study over a mutually agreeable period if [*] notice is insufficient based upon 

 

	*	 	Confidential treatment requested. 

 

23 

an evaluation of risks to the subjects. At the time of such termination, CFFT shall pay TG for all work completed prior to the effective date
of termination. Without limiting the foregoing such payment shall include payment for any [*] outstanding at that date and any [*] to an orderly and prompt termination plus applicable indirect costs. 
 
8.4 Accrued Rights; Surviving Obligations.

 
(a) Termination, relinquishment
or expiration of this Agreement for any reason shall be without prejudice to any rights that shall have accrued to the benefit of any Party prior to such termination, relinquishment or expiration. Such termination, relinquishment or expiration shall
not relieve any Party from obligations which are expressly indicated to survive termination of this Agreement. 
 
(b) All of the Parties’ rights and obligations under, and/or the provisions contained in, Sections 5, 6, 7, 8.4, 10,
11.6, 11.8, 11.13, and 11.17 shall survive expiration, termination or relinquishment of this Agreement. 
 
9. Force Majeure. 
 
(a) No Party shall be held liable or responsible to the other Parties nor be deemed to be in default under, or in breach
of any provision of, this Agreement for failure or delay in fulfilling or performing any obligation of this Agreement when such failure or delay is due to force majeure, and without the fault or negligence of the Party so failing or delaying.
For purposes of this Agreement, force majeure is defined as causes beyond the control of the Party, including, without limitation, acts of God; acts, regulations, or laws of any government; war; 

 

	*	 	Confidential treatment requested. 

 

24 

civil commotion; destruction of production facilities or materials by fire, flood, earthquake, explosion or storm; labor disturbances;
epidemic; and failure of public utilities or common carriers. In such event TG or CFFT, as the case may be, shall immediately notify the other Parties of such inability and of the period for which such inability is expected to continue. The Party
giving such notice shall thereupon be excused from such of its obligations under this Agreement as it is thereby disabled from performing for so long as it is so disabled. To the extent possible, each Party shall use reasonable efforts to minimize
the duration of any force majeure. 
 
10.
Dispute Resolution. 
 
10.1 The
Parties recognize that disputes as to certain matters may from time to time arise during the term of this Agreement which relate to any Party’s rights and/or obligations hereunder. If the Parties cannot resolve any such dispute within [*] after
notice of a dispute from one Party, either Party may, by notice to the other in accordance with Section 11.6, have such dispute referred to the Chief Executive Officer of TG, or such other person holding a similar position as designated by TG from
time to time and the Chief Executive Officer of CFFT, or such other person holding a similar position as designated by CFFT from time to time (such officers collectively, the “Executive Officers”). The Executive Officers shall meet
promptly to negotiate in good faith the matter referred and to determine a resolution. During such period of negotiations, any applicable time periods under this Agreement shall be tolled. If the Executive Officers are unable to determine a
resolution in a timely manner, which shall in no case be more than [*] after the matter was referred to them, the matter may be resolved through arbitration in accordance with the arbitration provisions set forth in Section 10.2, upon notice by a
Party on the other disputing Party specifically requesting such arbitration. 
 

	*	 	Confidential treatment requested. 

 

25 

 
10.2 Where a Party has served a written notice upon the other requesting binding arbitration of a dispute pursuant to this Section 10.2, any such arbitration shall be held in Washington, D.C. and its environs, according to the
Commercial Arbitration Rules (the “Rules”) of the American Arbitration Association (the “AAA”). The arbitration shall be conducted by one arbitrator who is knowledgeable in the subject matter which is at issue in
the dispute and who is selected by mutual agreement of the Parties or, failing such agreement, shall be selected according to the Rules. The Parties shall have such discovery rights as the arbitrator may allow, but in no event broader than that
discovery permitted under the Federal Rules of Civil Procedure. In conducting the arbitration, the arbitrator shall apply the Delaware Rules of Evidence and shall be able to decree any and all relief [*]. The arbitrator shall also be able to award
[*] damages but shall not award any other [*]. The reasonable fees and expenses of the arbitrators, along with the reasonable legal fees and expenses of the Parties (including all expert witness fees and expenses), the fees and expenses of a court
reporter, and any expenses for a hearing room, shall be paid as follows: If the arbitrators rule in favor of one Party on all disputed issues in the arbitration, the losing Party shall pay 100% of such fees and expenses; if the arbitrators rule in
favor of one Party on some issues and the other Party on other issues, the arbitrators shall issue with the rulings a written determination as to how such fees and expenses shall be allocated between the Parties. The arbitrators shall allocate fees
and expenses in a way that bears a reasonable relationship to the outcome of the arbitration, with the Party prevailing on more issues, or on issues of greater value or gravity, recovering a relatively larger share of its legal fees and expenses.
The decision of the arbitrator shall be final and may be entered, sued on or enforced by the Party in whose favor it runs in any court of competent jurisdiction at the option of such Party. Whether a claim, dispute or other matter in question would
be barred by the 

* Confidential treatment requested. 
 

26 

applicable statute of limitations, which statute of limitations also shall apply to any claim or disputes subject to arbitration under this
Section, shall be determined by binding arbitration pursuant to this Section 10.2. 
 
11. Miscellaneous. 
 
11.1 Relationship of Parties. Nothing in this Agreement is intended or shall be deemed to constitute a partnership, agency, employer-employee or joint venture relationship between the Parties.
Neither Party shall incur any debts or make any commitments for another, except to the extent, if at all, specifically provided herein. 
 
11.2 Assignment. Neither Party shall be entitled to assign its rights or delegate its obligations hereunder without
the express written consent of the other Party hereto, except that (A) CFFT may assign its right to receive payments under this Agreement to any Third Party upon [*] prior written notice to TG; and (B) either Party may assign its rights and transfer
its duties hereunder to an Affiliate or to any successor to all or substantially all of its business (or that portion thereof to which this Agreement relates) or in the event of merger, consolidation or involvement in a similar transaction. No
assignment and transfer shall be valid or effective unless done in accordance with this Section 11.2 and unless and until the assignee/transferee shall agree in writing to be bound by the provisions of this Agreement. 
 
11.3 Books and Records. Any books and
records to be maintained under this Agreement by a Party or its Affiliates or sublicensees shall be maintained in accordance with U.S. generally accepted accounting principles, consistently applied, except that the same need not be audited.

 

	*	 	Confidential treatment requested. 

 

27 

 
11.4 Further Actions. Each Party shall execute, acknowledge and deliver such further instruments, and do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.

 
11.5 No Implied Rights.
No right or license is granted under this Agreement by either Party to the other, either expressly or by implication, except as those set forth explicitly herein. Nothing contained in this Agreement shall impose an obligation of exclusivity on one
by the other. Both Parties reserve the right to enter into and participate in other activities (either alone or with Third Parties) including, but not limited to, clinical trials and sponsored research projects. 
 
11.6 Notice. Any notice or request
required or permitted to be given under or in connection with this Agreement shall be deemed to have been sufficiently given if in writing and personally delivered or sent by certified mail (return receipt requested), facsimile transmission (receipt
verified), or overnight express courier service (signature required), prepaid, to the Party for which such notice is intended, at the address set forth for such Party below: 
 

	 In the case of TG, to:
	  	 Targeted Genetics Corporation

	 	  	 1100 Olive Way, Suite 100

	 	  	 Seattle, Washington 98101

	 	  	 Attention: Chief Executive Officer

	 	  	 Facsimile No.: (206) 223-0288

	 	  	 Telephone No.: (206) 623-7612

	
	 	  	 With copies to:

	
	 	  	 Targeted Genetics Corporation

	 	  	 1100 Olive Way, Suite 100

	 	  	 Attention: Legal Department

	 	  	 Facsimile No.: (206) 521-4783

 

28 

 

	 In the case of CFFT, to:
	  	 Cystic Fibrosis Foundation Therapeutics, Inc.

	 	  	 6931 Arlington Road

	 	  	 Bethesda, Maryland 20814

	 	  	 Attention: Robert J. Beall, Ph.D.

	 	  	 Facsimile No.: (301) 907-2540

	 	  	 Telephone No.: (301) 907-2541

	 	  	 
	
	 With copies to:
	  	 Swidler, Berlin, Shereff, Friedman, LLP

	 	  	 3000 K Street, N.W., Suite 300

	 	  	 Washington, District of Columbia 20007

	 	  	 Attention: Kenneth Schaner, Esq.

	 	  	 Facsimile No.: (202) 424.7518

	 	  	 Telephone No.: (202) 424.7643

 
or to such other address
for such Party as it shall have specified by like notice to the other Parties, provided that notices of a change of address shall be effective only upon receipt thereof. If delivered personally or by facsimile transmission, the date of delivery
shall be deemed to be the date on which such notice or request was given. If sent by overnight express courier service, the date of delivery shall be deemed to be the next business day after such notice or request was deposited with such service. If
sent by certified mail, the date of delivery shall be deemed to be the third business day after such notice or request was deposited with the U.S. postal service. 
 
11.7 Use of Name. Except as may be otherwise provided herein, no Party shall have any right, express
or implied, to use in any manner the name or other designation of the other Parties or any other trade name, trademark or logos of the other Parties for any purpose in connection with the performance of this Agreement. 
 
11.8 Public Announcements and Publications. Subject to
6.3, neither Party shall make any public announcement or publication concerning this Agreement, the subject matter hereof or its activities hereunder without the prior written consent of the other Parties, which shall not be 

 

29 

unreasonably withheld, provided that it shall not be unreasonable for a Party to withhold consent with respect to any public announcement
containing any of such Party’s Confidential Information. 
 
11.9 Waiver. A waiver by any Party of any of the terms and conditions of this Agreement in any instance shall not be deemed or construed to be a waiver of such term or condition for the future,
or of any subsequent breach hereof. All rights, remedies, undertakings, obligations and agreements contained in this Agreement shall be cumulative and none of them shall be in limitation of any other remedy, right, undertaking, obligation or
agreement of any Party. 
 
11.10
Compliance with Law. Each Party acknowledges that the laws and regulations of the United States restrict the export and re-export of commodities and technical data of United States origin. Each Party agrees that it will not export or
re-export restricted commodities or the technical data of the other Party in any form without the appropriate United States and foreign government licenses. 
 
11.11 Severability. When possible, each provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement. 
 

30 

 
11.12 Amendment. No amendment, modification or supplement of any provisions of this Agreement shall be valid or effective unless made in writing and signed by a duly authorized officer of each Party. 
 
11.13 Governing Law. This Agreement
shall be governed by and interpreted in accordance with the laws of the State of Delaware without regard to conflicts of law principles. 
 
11.14 Entire Agreement. This Agreement, together with exhibits hereto, sets forth the entire agreement and
understanding between the Parties as to the subject matter hereof and merges all prior discussions and negotiations between or among any of them, and neither Party shall be bound by any conditions, definitions, warranties, understandings or
representations with respect to such subject matter other than as expressly provided herein and therein. 
 
11.15 Parties in Interest. All of the terms and provisions of this Agreement shall be binding upon, inure to the
benefit of and be enforceable by the Parties hereto and their respective permitted successors and assigns. 
 
11.16 Descriptive Headings. The descriptive headings of this Agreement are for convenience only, and shall be of no
force or effect in construing or interpreting any of the provisions of this Agreement. 
 
11.17 Construction of Agreement. The terms and provisions of this Agreement represent the results of negotiations
between the Parties and their representatives, each of which has been represented by counsel of its own choosing, and neither of which has acted under duress or compulsion, whether legal, economic or otherwise. Accordingly, the terms and provisions
of this Agreement shall be interpreted and construed in accordance with their usual 

 

31 

and customary meanings, and each of the Parties hereto hereby waives the application in connection with the interpretation and construction
of this Agreement of any rule of law to the effect that ambiguous or conflicting terms or provisions contained in this Agreement shall be interpreted or construed against the Party whose attorney prepared the executed draft or any earlier draft of
this Agreement. 
 
11.18
Counterparts. This Agreement may be signed in counterparts, any one of which need not contain the signature of more than one Party, and each and every one of which shall be deemed an original, notwithstanding variations in format or file
designation which may result from the electronic transmission, storage and printing of copies of this Agreement from separate computers or printers. Facsimile signatures shall be treated as original signatures. 
 
* * * * 
 

32 

 
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed by its duly authorized representative as of the day and year first above written.

 

	 TARGETED GENETICS CORPORATION

	
	 By:
	 	 /s/    H. STEWART
PARKER        

	
	 Name:
	 	 H. Stewart Parker

	 Title:
	 	 President & CEO

	
	 CYSTIC FIBROSIS FOUNDATION
THERAPEUTICS, INC.

	
	 By:
	 	 /s/    ROBERT J. BEALL,
Ph.D.        

	
	 Name:
	 	 Robert J. Beall, Ph.D.

	 Title:
	 	 President and CEO

 

33 

 
EXHIBIT A 
 
SUCCESS CRITERIA 
 
Success Criteria for Study 25E01 
 
[*] 
 

	*	 	Confidential treatment requested. 

 

3 

 
EXHIBIT B 
 
ESTIMATED BUDGET 
 
[*] 
 

	*	 	Confidential treatment requested.

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