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EXCLUSIVE DISTRIBUTION AGREEMENT
THIS EXCLUSIVE DISTRIBUTION AGREEMENT (this Agreement), effective as of November 23, 2004, (the Effective Date), by and between Emergent BioSolutions, Inc. a corporation organized and existing under the laws of the State of Delaware (Emergent), and the Health Protection Agency, a governmental agency organized and existing under the laws of England (Supplier) (each of Emergent and Supplier, a Party).
WHEREAS, Emergent desires to obtain exclusive rights from Supplier to distribute and sell the Products (as defined herein) to Approved Customers (as defined herein) in the Territory (as defined herein), and Supplier desires to grant such rights, on the terms set forth below.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises and covenants of the Parties contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, do hereby agree as follows:
Unless specifically set forth to the contrary herein, the following terms shall have the respective meanings set forth below:
1.1 AAA Rules shall have the meaning set forth in Section 9.6.2.
1.2 Affiliate shall mean, (a) with respect to Emergent, any Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with Emergent, and (b) with respect to HPA, any Person, that, directly or indirectly, through one or more intermediaries, is controlled by HPA. For purposes of this definition, control and, with correlative meanings, the terms controlled by and under common control with, shall mean (a) the possession, directly or indirectly, of the power to direct the management or policies of a Person, whether through the ownership of voting securities, by contract relating to voting rights or corporate governance, by application of applicable law, or otherwise, or (b) the ownership, directly or indirectly, of at least fifty percent (50%) of the voting securities or other ownership interest of a Person (or, with respect to a limited partnership or other similar entity, its general partner or controlling entity); provided that, if local law restricts foreign ownership, control will be established by direct or indirect ownership of the maximum ownership percentage that may, under such local law, be owned by foreign interests.
1.3 Agreement shall have the meaning set forth in the preamble hereto.
1.4 Applicable Law shall mean all laws, rules, and regulations applicable to the Exploitation of the Products, including any such rules, regulations, guidelines, guidances, or other requirements of the Regulatory Authorities, that may be in effect from time to time in the
Territory, including current good manufacturing practices applicable to the Manufacturing of the Products.
1.5 Approved Customer shall mean any Person in the Territory other than a Restricted Customer.
1.6 BT Development Agreement shall mean that certain BT Vaccine Development Agreement, of even date herewith, by and between the Parties, as amended from time to time in accordance with its terms.
1.7 BT License Agreement shall mean that certain BT Vaccine License Agreement, of even date herewith, by and between the Parties, as amended from time to time in accordance with its terms.
1.8 Business Day shall mean any day other than a Saturday, Sunday, any public holiday and any bank holiday in either the United States or England.
1.9 Certificate of Analysis shall mean a certificate in the form reasonably agreed by the Parties evidencing the analytical tests conducted on a specific lot of a Product and setting forth, inter alia, the items tested, specifications and test results.
1.10 Corresponding Emergent Product shall mean, with respect to any Product, a Licensed Product as defined in the BT License Agreement or Licensed Product as defined in the rBOT License Agreement, in each case in finished, packaged form, that is substantially equivalent to such Product from a regulatory perspective.
1.11 Confidential Information shall have the meaning set forth in Section 4.3.1.
1.12 Cure Period shall have the meaning set forth in Section 8.3.
1.13 Customer Orders shall have the meaning set forth in Section 2.4.1.
1.14 Dispute shall have the meaning set forth in Section 9.6.1.
1.15 Effective Date shall mean the date of this Agreement as set forth in the preamble hereto.
1.16 Emergent shall have the meaning set forth in the preamble hereto.
1.17 Expert shall have the meaning set forth in Section 3.6.1.
1.18 Exploitation shall mean the making, having made, importation, use, sale, offering for sale or disposition of a product or process, including the research, development, registration, modification, enhancement, improvement, Manufacture, storage, formulation, optimization, import, export, transport, distribution, promotion or marketing of a product or process.
1.19 Indemnification Claim Notice shall have the meaning set forth in Section 6.3.1.
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1.20 Indemnified Party shall have the meaning set forth in Section 6.3.1.
1.21 Inquiries shall have the meaning set forth in Section 3.1.1.
1.22 Losses shall have the meaning set forth in Section 6.1.
1.23 Manufacture and Manufacturing shall mean, with respect to a product, the manufacturing, processing, formulating, packaging, labeling, holding and quality control testing of such product.
1.24 Manufacturing Costs shall mean the then current manufacturing costs for a product calculated in accordance with Exhibit 3.3.
1.25 Person shall mean an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or other similar entity or organization, including a government or political subdivision, department or agency of a government (whether or not having a separate legal personality).
1.26 Product shall mean (a) an HPA Product as defined in the BT License Agreement or (b) an HPA Product as defined in the rBOT License Agreement, in each case in finished, packaged form.
1.27 Product Trademarks shall mean all Trademarks owned, used or held for use by Supplier in connection with the Products.
1.28 Purchase Orders shall have the meaning set forth in Section 3.1.3.
1.29 rBOT Development Agreement shall mean that certain rBOT Vaccine Development Agreement, of even date herewith, by and between the Parties, as amended from time to time in accordance with its terms.
1.30 rBOT License Agreement shall mean that certain rBOT Vaccine License Agreement, of even date herewith, by and between the Parties, as amended from time to time in accordance with its terms.
1.31 Regulatory Approval shall mean any and all approvals (including pricing and reimbursement approvals), governmental licenses, registrations or authorizations of any Regulatory Authority, necessary for the Exploitation of the Products or the Corresponding Emergent Products, as the case may be, in a country in the Territory, including any (a) approval of any Product or Corresponding Emergent Product (including any marketing authorizations and supplements and amendments thereto); (b) pre- and post-approval marketing authorizations (including any prerequisite Manufacturing approval or authorization related thereto); (c) labeling approval; and (d) technical, medical and scientific licenses.
1.32 Regulatory Authority shall mean any applicable supra-national, national, regional, state, provincial or local regulatory agencies, departments, bureaus, commissions, councils or other government entities regulating or otherwise exercising authority with respect to
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the Exploitation of the Products in the Territory, but excluding HPA acting in its capacity as Supplier.
1.33 Reply shall have the meaning set forth in Section 3.1.2.
1.34 Restricted Customer shall mean (a) any national, local, regional or provincial governmental agency of the United Kingdom, including any components of the National Health Service, or (b) any hospital, clinic or other similar health care organization to the extent of such entitys purchases of Products for the purpose of supplying Products to or for the National Health Service.
1.35 Supplier shall have the meaning set forth in the preamble hereto.
1.36 Term shall have the meaning set forth in Section 8.1.
1.37 Territory shall mean all countries of the European Union and Norway, Iceland and Liechtenstein.
1.38 Third Party shall mean any Person other than Emergent, Supplier and their respective Affiliates.
1.39 Third Party Claim shall have the meaning set forth in Section 6.3.2.
1.40 Trademarks shall include any word, name, symbol, color, designation or device or any combination thereof, including any trademark, trade dress, brand mark, trade name, brand name, logo or business symbol.
Appointment and Grant
2.1 Exclusive Distributor. Supplier hereby appoints Emergent, for the duration of the Term, to distribute, offer for sale and sell the Products to Approved Customers in the Territory on an exclusive basis (even with regard to Supplier and its Affiliates), and Emergent hereby accepts such appointment. Supplier acknowledges and agrees that during the Term it shall not, and it shall cause its Affiliates not to, market, promote, distribute, offer for sale or sell any Product to (a) any Approved Customer in the Territory and (b) any Person (other than Emergent or its Affiliates) outside the Territory that (i) is reasonably likely, directly or indirectly, to market, promote, distribute, offer for sale or sell any Product to Approved Customers in the Territory or assist another Person to do so, or (ii) has directly or indirectly marketed, promoted, distributed, offered for sale or sold the Product to Approved Customers in the Territory or assisted another Person to do so.
2.2 Sub-distributors. Supplier acknowledges and agrees that Emergent shall have the right to appoint sub-distributors (which may be Affiliates of Emergent), as determined from time to time in Emergents sole discretion, to distribute, offer for sale and sell the Products to Approved Customers in the Territory.
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2.3 Trademark License. Supplier hereby grants to Emergent an exclusive license for the duration of the Term, with the right to grant sub-licenses to sub-distributors, under the Product Trademarks to distribute, offer for sale and sell the Products to Approved Customers in the Territory.
2.4 Product Orders.
2.4.1 Supplier promptly shall forward to Emergent all orders for, or inquiries related to, the Products, whether oral or written, that Supplier or its Affiliates receive from any Approved Customer (Customer Orders).
2.4.2 Emergent shall use commercially reasonable efforts to satisfy all Customer Orders received from Supplier. Supplier acknowledges and agrees that Emergent shall have the right, in its sole discretion, to satisfy any and all Customer Orders by supplying Corresponding Emergent Products to the applicable Approved Customer in lieu of Products, to the extent that Emergent legally may do so.
2.5 Terms of Sale. Supplier acknowledges and agrees that Emergent, in its sole discretion, shall determine the price and other terms and conditions of sale on which it shall distribute, offer for sale and sell the Products (or Corresponding Emergent Products) to Approved Customers (including sales pursuant to Customer Orders). All sales of Products by Emergent shall be in its own name and for its own account.
2.6 Compliance with Law. Emergent shall store and handle all Products sold to it by Supplier hereunder in accordance with the labeling therefor and in material compliance with all Applicable Law. Emergent shall sell and distribute the Products in material compliance with all Applicable Law. Emergent shall maintain complete and accurate records of its distribution and sale of the Products in accordance with Applicable Law to enable appropriate procedures to be implemented in the event that a recall or market withdrawal of any Product is required or appropriate.
3.1 Purchase Orders.
3.1.1 From time to time during the Term, Emergent may submit to Supplier written inquiries (Inquiries) with respect to possible orders of Products, each of which shall specify (a) the quantity of each Product to be ordered by Emergent, (b) the required delivery date therefor, (c) the place of delivery, and (d) the type of customer.
3.1.2 Supplier shall, within ten (10) days after Supplier receives each Inquiry submitted in accordance with Section 3.1.1, inform Emergent in writing (a) whether it is willing to supply such Products on such terms and conditions, and (b) if so, the purchase price payable by Emergent pursuant to Section 3.3 and the additional warranties and indemnities that Supplier would provide to Emergent in connection with such sale of Products (a Reply).
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3.1.3 Within thirty (30) days after receipt of a Reply from Supplier, Emergent may submit to Supplier a written purchase order (Purchase Order) for Products, which shall contain the items of information listed in Section 3.1.1 and the warranties and indemnities that the customer will require in connection with such purchase. In the event that the Purchase Order is consistent with the applicable Inquiry and Reply (including as to the warranties and indemnities to be provided), then Supplier shall accept such Purchase Order in writing within five (5) days after receipt thereof.
3.1.4 Emergent shall be obligated to purchase, and Supplier shall be obligated to sell and deliver by the delivery date set forth therein, such quantity of each Product as is set forth in each such Purchase Order. In the event that the terms of any Purchase Order are inconsistent with the terms of this Agreement, the terms of this Agreement shall control.
3.2 Delivery. Supplier shall deliver the quantities of Products set forth in each Purchase Order CIP (as defined in Incoterms 2000) at the place specified in such Purchase Order, not later than the required delivery date specified therein. Title to and risk of loss of all Products shall pass to Emergent at the time of delivery. All Products shall be packed for shipping in accordance with Applicable Law and packing instructions provided by Emergent. All Product delivered hereunder shall be accompanied by a Certificate of Analysis.
3.3 Purchase Price. The purchase price payable by Emergent for each unit of Product purchased hereunder shall be equal to [**]% of Suppliers actual Manufacturing Costs for such Product, allocated on a per unit basis.
3.4 Invoicing. Supplier promptly shall invoice Emergent for all quantities of Products delivered in accordance herewith. Subject to Section 3.6, payment with respect to each shipment of Product delivered shall be due forty-five (45) days after receipt by Emergent of the invoice and the related Certificate of Analysis; provided, however, that if Emergent notifies Supplier pursuant to Section 3.6 that such Product is not conforming, then payment shall be due within forty-five (45) days after determination that such Product is conforming Product in accordance with Section 3.6 or the receipt by Emergent of replacement Product if so elected by Emergent, as the case may be. In the event of any inconsistency between an invoice and this Agreement, the terms of this Agreement shall control.
3.5 Warranty. Supplier warrants to Emergent that, at the time of delivery pursuant to Section 3.2, all Products delivered hereunder following Regulatory Approval thereof (a) will have been Manufactured and released in accordance with the applicable Regulatory Approvals and Applicable Law, (b) will comply with any specifications therefor set forth in the applicable Regulatory Approvals, and (c) may legally be distributed or sold by Emergent to the Approved Customer under Applicable Law. Supplier acknowledges and agrees that Emergent and its sub-distributors may extend the foregoing warranties to all Approved Customers.
3.6 Rejection of Product.
3.6.1 In the event that Emergent determines that any Product delivered by Supplier does not conform to the warranty set forth in Section 3.5, Emergent shall give Supplier written notice thereof and the reasons for such nonconformance (including a sample of such
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Product) within forty-five (45) days after delivery (or within ten (10) days after discovery of any nonconformity that could not reasonably have been detected by a customary visual inspection on delivery). Supplier shall undertake appropriate testing of such sample and shall notify Emergent whether it has confirmed such nonconformity within thirty (30) days after receipt of such notice from Emergent. If Supplier notifies Emergent that it has not confirmed such nonconformity, then the Parties shall mutually select an independent laboratory or other applicable expert (the Expert) to evaluate if the Products comply with the warranty set forth in Section 3.5 and each Party shall cooperate with the Experts reasonable requests for assistance in connection with its analysis hereunder. The findings of the Expert shall be binding on the Parties, absent manifest error. The expenses of the Expert shall be borne by Supplier if the Expert confirms the nonconformity and otherwise by Emergent. If the Expert or Supplier confirms that a batch of Product does not conform to the warranty set forth in Section 3.5, Supplier, at Emergents option, promptly shall (a) supply Emergent with a conforming quantity of Product at Suppliers expense or (b) reimburse Emergent for any purchase price paid by Emergent with respect to such Product. In any event Supplier promptly shall reimburse Emergent for all costs incurred by Emergent with respect to such nonconforming Product, including costs of recall and destruction of such Product, which costs Emergent shall have the right to offset against any payments owed by Emergent to Supplier under this Agreement.
3.6.2 The rights and remedies provided in this Section 3.6 shall be cumulative and in addition to any other rights or remedies that may be available to Emergent.
3.7 Audit Rights.
3.7.1 Supplier shall keep, or shall cause to be kept, complete and accurate books and records of all information necessary, and in sufficient detail, to determine its Manufacturing Costs for products.
3.7.2 Upon the written request of Emergent and not more than once in each calendar year, Supplier shall permit an independent certified public accounting firm of internationally recognized standing selected by Emergent, and reasonably acceptable to Supplier, to have access during normal business hours, and upon reasonable prior written notice, to such of the books and records of Supplier as may be reasonably necessary to verify the accuracy of the amounts invoiced to Emergent, based on Suppliers Manufacturing Costs, in any calendar year ending not more than twenty-four (24) months prior to the date of such request. The accounting firm shall disclose to Emergent and Supplier only whether the invoices are correct or incorrect and the specific details concerning any discrepancies. If such accounting firm concludes that Emergent owed additional amounts to Supplier during such period, Emergent shall pay Supplier the difference between the amount actually owed, as determined by the accounting firm, and the amount actually paid by Emergent, with interest from the date originally due at the prime rate, as published in The Wall Street Journal, Eastern United States Edition, on the last business day preceding such date, within thirty (30) days after the date on which such accounting firms written report is delivered to Supplier. If such accounting firm concludes that Emergent has overpaid Supplier during such period, Supplier shall pay such difference to Emergent, with interest from the date originally paid at the prime rate, as published in The Wall Street Journal, Eastern United States Edition, on the last business day preceding such date, within thirty (30) days after the date of delivery of such report. If, and only if, the amount of the overpayment is
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greater than five percent (5%) of the total actual amount owed as determined by the accounting firm, Supplier shall bear all costs related to such audit. In all other cases, Emergent shall bear the cost of such audit.
3.7.3 Emergent shall treat all information of Supplier subject to review under this Section 3.7 in accordance with the confidentiality provisions of Article IV and shall cause its accounting firm to enter into a reasonably acceptable confidentiality agreement with Supplier obligating such firm to retain all such financial information in confidence pursuant to such confidentiality agreement.
3.8 Currency. All amounts invoiced to Emergent hereunder shall be expressed and paid in United Kingdom Pounds Sterling.
Confidentiality and Nondisclosure
4.1 Confidentiality Obligations. Except as provided herein, the Parties agree that, during the term of this Agreement and for five (5) years after this Agreements expiration or termination pursuant to Article VIII, each Party shall hold in strict confidence and shall not publish or otherwise disclose, directly or indirectly, to any Person (other than employees, Affiliates, legal counsel, consultants, auditors and advisors who, except in the case of legal counsel, are bound in writing by confidentiality and non-use obligations no less onerous than those set forth herein) any Confidential Information of the other Party. During such period, a Party (and its Affiliates) shall not use for any purpose, directly or indirectly, Confidential Information of the other Party or its Affiliates furnished or otherwise made known to it, except as permitted hereunder.
4.2 Permitted Disclosures. Each Party may disclose Confidential Information to the extent that such disclosure is:
4.2.1 Made in response to a valid order of a court of competent jurisdiction or other supra-national, federal, national, regional, state, provincial or local governmental or regulatory body of competent jurisdiction; provided, however, that the receiving Party shall first have given notice to the disclosing Party and, insofar as permitted by applicable law, given the disclosing Party a reasonable opportunity to quash such order and to obtain a protective order requiring that the Confidential Information and documents that are the subject of such order be held in confidence by such court or agency or, if disclosed, be used only for the purposes for which the order was issued; and provided further that if a disclosure order is not quashed or a protective order is not obtained, the Confidential Information disclosed in response to such court or governmental order shall be limited to that information which is legally required to be disclosed in response to such court or governmental order;
4.2.2 Otherwise required by law, in the opinion of legal counsel to the receiving Party as expressed in an opinion letter in form and substance reasonably satisfactory to the disclosing Party, which shall be provided to the disclosing Party at least two (2) Business Days prior to the receiving Partys disclosure of the Confidential Information pursuant to this Section 4.2.2;
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4.2.3 Made by the receiving Party to the Regulatory Authorities as required in connection with any filing, application or request for Regulatory Approval; provided, however, that reasonable measures shall be taken to assure confidential treatment of such information;
4.2.4 Made by Emergent to existing or potential acquirers or merger candidates; existing or potential pharmaceutical collaborators; investment bankers; existing or potential investors, venture capital firms or other financial institutions or investors for purposes of obtaining financing; each of whom prior to disclosure must be bound by obligations of confidentiality and non-use at least equivalent in scope to those set forth in this Article IV; or
4.2.5 Made by HPA to potential investors in any spin-off entity to which HPA intends to transfer its business relating to the Development Program (as defined in each of the BT Development Agreement and the rBOT Development Agreement) and the Exploitation of Licensed Products (as defined in each of the BT License Agreement and the rBOT License Agreement) and HPA Products (as defined in each of the BT License Agreement and the rBOT License Agreement), each of whom prior to disclosure must be bound by obligations of confidentiality and non-use at least equivalent in scope to those set forth in this Article IV.
4.3 Confidential Information.
4.3.1 Defined. Confidential Information of a Party shall mean all information and know-how and any tangible embodiments thereof provided by or on behalf of such Party to the other Party in the course of performing this Agreement, including data; knowledge; practices; processes; ideas; research plans; engineering designs and drawings; research data; manufacturing processes and techniques; scientific, manufacturing, marketing and business plans; and financial and personnel matters relating to the disclosing Party or to its present or future products, sales, suppliers, customers, employees, investors or business. For the avoidance of doubt, Confidential Information shall be deemed to include any and all information provided by one Party to the other Party relating to the Products and the terms of this Agreement.
4.3.2 Exclusions. Notwithstanding the foregoing, information or know-how of a Party shall not be deemed Confidential Information with respect to the receiving Party for purposes of this Agreement if such information or know-how: (a) was already known to the receiving Party or its Affiliates, other than under an obligation of confidentiality or non-use, at the time of disclosure to, or, with respect to know-how, discovery or development by, such receiving Party; (b) was generally available or known, or was otherwise part of the public domain, at the time of its disclosure to, or, with respect to know-how, discovery or development by, such receiving Party; (c) became generally available or known, or otherwise became part of the public domain, after its disclosure to, or, with respect to know-how, discovery or development by, such receiving Party through no fault of the receiving Party; (d) was disclosed to such receiving Party or its Affiliates, other than under an obligation of confidentiality or non-use, by a Third Party who had no obligation to the Party that controls such information and know-how not to disclose such information or know-how to others; or (e) was independently discovered or developed by such receiving Party or its Affiliates, as evidenced by their written records, without the use of Confidential Information belonging to the Party that controls such information and know-how.
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Specific aspects or details of Confidential Information shall not be deemed to be within the public domain or in the possession of a Party merely because the Confidential Information is embraced by more general information in the public domain or in the possession of such Party. Further, any combination of Confidential Information shall not be considered in the public domain or in the possession of a Party merely because individual elements of such Confidential Information are in the public domain or in the possession of such Party unless the combination and its principles are in the public domain or in the possession of such Party.
4.4 Equitable Relief. Each Party acknowledges and agrees that breach of any of the terms of this Article IV would cause irreparable harm and damage to the other Party and that such damage may not be ascertainable in money damages and that as a result thereof the non-breaching Party would be entitled to seek from a court equitable or injunctive relief restraining any breach or future violation of the terms contained herein by the breaching Party without the necessity of proving actual damages. Such right to equitable relief is in addition to whatever remedies either Party may be entitled to as a matter of law or equity, including money damages, which other remedies are subject to Section 9.6.
Regulatory Approvals, Complaints, Adverse Event Reporting and Product Recall
5.1 Regulatory Approvals.
5.1.1 Supplier shall inform Emergent promptly after each Regulatory Approval of a Product has been obtained in the Territory, and of any amendments thereto. Supplier shall take all actions reasonably necessary to have Emergent recorded as a distributor of the Product in the Territory during the Term in accordance with Section 2.1. To the extent permitted by Applicable Law, Emergent shall cooperate with, and provide reasonable assistance to, Supplier in obtaining Regulatory Approvals of the Products in the Territory, including by attending meetings with Regulatory Authorities if reasonably requested by Supplier.
5.1.2 Supplier shall be solely responsible for (a) taking all actions, paying all fees and conducting all communication with the appropriate Regulatory Authority in respect of all Regulatory Approvals, including preparing and filing all reports (including adverse event and complaint reports) with the appropriate Regulatory Authority, (b) taking all actions and conducting all communication with Third Parties in respect of Products sold by Emergent and its sub-distributors, including responding to all Product complaints in respect thereof, including complaints related to tampering or contamination, and (c) investigating all Product complaints and adverse events in respect of Products sold by Emergent. Emergent shall, at Suppliers expense, cooperate with all of Suppliers reasonable requests and use its commercially reasonable efforts to assist Supplier in connection with (x) preparing any and all such reports for Regulatory Authorities (including, without limitation, supplying distribution information necessary to prepare annual reports), (y) preparing and disseminating all such communications with Third Parties, and (z) investigating and responding to any Product complaint or adverse event related to a Product sold by Emergent or its sub-distributors.
5.1.3 Each Party promptly shall provide notice to the other Party of any material communications with any Regulatory Authority concerning the Products. To the extent
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permitted by Applicable Law, copies of all such material communications shall be attached to the notice sent pursuant to this Section 5.1.3.
5.1.4 Each Party shall immediately notify the other of any information received regarding any threatened or pending action by any Regulatory Authority that may affect the Products or the continued Manufacture, distribution, sale or use of the Products in the Territory. Upon receipt of any such information, the Parties shall consult in an effort to arrive at a mutually acceptable procedure for taking appropriate action; provided, however, that nothing set forth in this Section 5.1 shall be construed as restricting the right of either Party to make a timely report of such matter to any Regulatory Authority or take other action that it deems appropriate under Applicable Law.
5.2 Complaints. Each Party shall maintain a record of any and all complaints it receives with respect to the Products. Each Party shall notify the other Party in reasonable detail of any complaint received by it within thirty (30) days or such shorter period as may be required by Applicable Law.
5.3 Adverse Event Reporting. Each Party shall provide notice to the other Party within twenty-four (24) hours from the time it becomes aware of an adverse event associated with use of a Product (whether or not the reported effect is (a) described in the prescribing information or the published literature with respect to such Product or (b) determined to be attributable to such Product) of any information in or coming into its possession or control concerning such adverse event.
5.4 Product Recall.
5.4.1 Notification and Recall. In the event that any Regulatory Authority issues or requests a recall or market withdrawal or takes similar action in connection with any Product sold or distributed by Emergent or its sub-distributors, or in the event either Party determines that an event, incident or circumstance has occurred that may result in the need for a recall or market withdrawal of any Product sold or distributed by Emergent or its sub-distributors, the Party notified of or desiring such recall or similar action shall, within twenty-four (24) hours, advise the other Party thereof by telephone or facsimile. Following such notification, within seventy-two (72) hours, Supplier shall decide in its sole discretion whether to conduct a recall or market withdrawal (except in the case of a government-mandated recall) and the manner in which any such recall or market withdrawal shall be conducted. Emergent shall cooperate with Supplier as reasonably requested by Emergent in the implementation of any recall or market withdrawal.
5.4.2 Recall Expenses. Supplier promptly shall reimburse Emergent for all expenses incurred by Emergent in connection with any recall or market withdrawal of any Product, except to the extent that such recall or market withdrawal results from Emergents gross negligence or willful misconduct. Such expenses of recall or market withdrawal shall include expenses for notification, destruction or return of the recalled or withdrawn Product, and any refund of amounts paid for the recalled or withdrawn Product, legal and administrative costs incurred in connection with the recall (including any such expenses incurred in meeting with and responding to any issues raised by any Regulatory Authority).
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6.1 Indemnification of Emergent. Subject to Section 6.3, Supplier shall indemnify Emergent, its Affiliates and its and their respective directors, officers, employees and agents, and defend and save each of them harmless, from and against any and all losses, damages, liabilities, costs and expenses (including reasonable attorneys fees and expenses) in connection with any and all suits, investigations, claims or demands (collectively, Losses) arising from or occurring as a result of (a) any material breach by Supplier of this Agreement, (b) any gross negligence or willful misconduct of Supplier in performing Suppliers obligations under this Agreement, (c) any death or personal injury caused by the negligence of Supplier or its Affiliates and resulting from the purchase, use or consumption of any Product, or (d) any claim or allegation that the use of the Product Trademarks by Emergent or its sub-distributors in accordance with the terms hereof infringes or misappropriates the intellectual property rights of any Third Party, except for those Losses for which Emergent has an obligation to indemnify Supplier pursuant to Section 6.2, as to which Losses each Party shall indemnify the other to the extent of their respective liability for the Losses. Any additional indemnities to be provided to Emergent by Supplier in connection with specific Purchase Orders shall be mutually agreed pursuant to Section 3.1 on a case-by-case basis, and shall be subject to the procedure set forth in Section 6.3.
6.2 Indemnification of Supplier. Subject to Section 6.3, Emergent shall indemnify Supplier, its Affiliates and their respective directors, officers, employees and agents, and defend and save each of them harmless, from and against any and all Losses arising from or occurring as a result of (a) any material breach by Emergent of this Agreement or (b) the gross negligence or willful misconduct of Emergent, its Affiliates or its other sub-contractors in performing Emergents obligations under this Agreement, except for those Losses for which Supplier has an obligation to indemnify Emergent and its Affiliates pursuant to Section 6.1, as to which Losses each Party shall indemnify the other to the extent of their respective liability for the Losses.
6.3 Indemnification Procedure.
6.3.1 Notice of Claim. The indemnified Party shall give the indemnifying Party prompt written notice (an Indemnification Claim Notice) of any Losses or discovery of fact upon which such indemnified Party intends to base a request for indemnification under Section 6.1 or Section 6.2, but in no event shall the indemnifying Party be liable for any Losses that result from any delay in providing such notice. Each Indemnification Claim Notice must contain a description of the claim and the nature and amount of such Loss (to the extent that the nature and amount of such Loss is known at such time). The indemnified Party shall furnish promptly to the indemnifying Party copies of all papers and official documents received in respect of any Losses. All indemnification claims in respect of a Party, its Affiliates or their respective directors, officers, employees and agents shall be made solely by such Party to this Agreement (the Indemnified Party).
6.3.2 Third Party Claims. The obligations of an indemnifying Party under this Article VI with respect to Losses arising from claims of any Third Party that are subject to indemnification as provided for in Sections 6.1 or 6.2 (a Third Party Claim) shall be governed by and be contingent upon the following additional terms and conditions:
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(a) Control of Defense. At its option, the indemnifying Party may assume the defense of any Third Party Claim by giving written notice to the Indemnified Party within thirty (30) days after the indemnifying Partys receipt of an Indemnification Claim Notice. The assumption of the defense of a Third Party Claim by the indemnifying Party shall not be construed as an acknowledgment that the indemnifying Party is liable to indemnify any Person seeking indemnification in respect of the Third Party Claim, nor shall it constitute a waiver by the indemnifying Party of any defenses it may assert against any such claim for indemnification. Upon assuming the defense of a Third Party Claim, the indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any legal counsel selected by the indemnifying Party. In the event the indemnifying Party assumes the defense of a Third Party Claim, the Indemnified Party shall immediately deliver to the indemnifying Party all original notices and documents (including court papers) received by any indemnified Party in connection with the Third Party Claim. Should the indemnifying Party assume the defense of a Third Party Claim, the indemnifying Party shall not be liable to the Indemnified Party or any other indemnified Party for any legal expenses subsequently incurred by such indemnified Party in connection with the analysis, defense or settlement of the Third Party Claim. In the event that it is ultimately determined that the indemnifying Party is not obligated to indemnify, defend or hold harmless an indemnified Party from and against the Third Party Claim, the Indemnified Party shall reimburse the indemnifying Party for any and all costs and expenses (including attorneys fees and costs of suit) and any Losses incurred by the indemnifying Party in its defense of the Third Party Claim with respect to such indemnified Party.
(b) Right to Participate in Defense. Without limiting Section 6.3.2(a), any indemnified Party shall be entitled to participate in, but not control, the defense of such Third Party Claim and to employ counsel of its choice for such purpose; provided, however, that such employment shall be at the indemnified Partys own expense unless (i) the employment thereof has been specifically authorized by the indemnifying Party in writing or (ii) the indemnifying Party has failed to assume the defense and employ counsel in accordance with Section 6.3.2(a) (in which case the Indemnified Party shall control the defense).
(c) Settlement. With respect to any Losses relating solely to the payment of money damages in connection with a Third Party Claim and that will not result in the Indemnified Partys becoming subject to injunctive or other relief or otherwise adversely affect the business of the Indemnified Party in any manner, and as to which the indemnifying Party shall have acknowledged in writing the obligation to indemnify the Indemnified Party hereunder, the indemnifying Party shall have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss, on such terms as the indemnifying Party, in its sole discretion, shall deem appropriate. With respect to all other Losses in connection with Third Party Claims, where the indemnifying Party has assumed the defense of the Third Party Claim in accordance with Section 6.3.2(a), the indemnifying Party shall have authority to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss provided it obtains the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld or delayed). The indemnifying Party shall not be liable for any settlement or other disposition of a Loss by an Indemnified Party that is reached without the written consent of the indemnifying Party. Regardless of whether the indemnifying Party chooses to defend or prosecute any Third Party Claim, no Indemnified Party shall admit any liability with respect to,
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or settle, compromise or discharge, any Third Party Claim without the prior written consent of the indemnifying Party.
(d) Cooperation. Regardless of whether the indemnifying Party chooses to defend or prosecute any Third Party Claim, the Indemnified Party shall, and shall cause each other indemnified Party to, cooperate in the defense or prosecution thereof and shall furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection therewith. Such cooperation shall include access during normal business hours afforded to indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Third Party Claim, and making indemnified Parties and other employees and agents available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, and the indemnifying Party shall reimburse the Indemnified Party for all its reasonable out-of-pocket expenses in connection therewith.
(e) Expenses. Except as provided above, the costs and expenses, including fees and disbursements of counsel, incurred by the Indemnified Party in connection with any claim shall be reimbursed on a calendar quarter basis by the indemnifying Party, without prejudice to the indemnifying Partys right to contest the Indemnified Partys right to indemnification and subject to refund in the event the indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party.
6.4 LIMITATION ON DAMAGES.
6.4.1 SUBJECT TO SECTIONS 6.1 AND 6.2, AND EXCEPT IN CIRCUMSTANCES OF GROSS NEGLIGENCE OR INTENTIONAL MISCONDUCT, NONE OF EMERGENT, SUPPLIER OR ANY OF THEIR RESPECTIVE AFFILIATES SHALL BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING FOR LOST PROFITS), WHETHER IN CONTRACT, WARRANTY, NEGLIGENCE, TORT, STRICT LIABILITY OR OTHERWISE, ARISING OUT OF (A) ANY BREACH OF OR FAILURE TO PERFORM ANY OF THE PROVISIONS OF THIS AGREEMENT, OR (B) THE DEVELOPMENT, MANUFACTURE, USE OR SALE OF ANY PRODUCT DEVELOPED, MANUFACTURED OR MARKETED HEREUNDER. NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS ATTEMPTING TO EXCLUDE OR LIMIT THE LIABILITY OF EITHER OF THE PARTIES OR THEIR RESPECTIVE AFFILIATES (A) FOR DEATH OR PERSONAL INJURY CAUSED BY THE NEGLIGENCE OF EITHER OF THE PARTIES, THEIR RESPECTIVE AFFILIATES, OR OF THE OFFICERS, EMPLOYEES OR AGENTS OF THE PARTIES OR THEIR RESPECTIVE AFFILIATES, (B) FOR FRAUD OR FRAUDULENT MISREPRESENTATION OR (C) FOR ANY MATTER IN RESPECT OF WHICH IT WOULD BE ILLEGAL FOR EITHER PARTY TO EXCLUDE OR ATTEMPT TO EXCLUDE ITS LIABILITY.
6.4.2 SUBJECT TO THE PRECEDING SENTENCE, BUT NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, IN NO EVENT SHALL THE COMBINED AGGREGATE LIABILITY OF EITHER PARTY UNDER THIS AGREEMENT, TAKEN TOGETHER WITH SUCH PARTYS AGGREGATE LIABILITY
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UNDER THE rBOT LICENSE AGREEMENT, THE rBOT DEVELOPMENT AGREEMENT, THE BT LICENSE AGREEMENT, AND THE BT DEVELOPMENT AGREEMENT, EXCEED THE COMBINED AGGREGATE AMOUNTS PAID BY EMERGENT TO HPA, WHETHER AS LUMP SUMS OR PERIODIC PAYMENTS OF ROYALTIES OR SUBLICENSE INCOME, UNDER THIS AGREEMENT, THE rBOT LICENSE AGREEMENT, THE rBOT DEVELOPMENT AGREEMENT, THE BT LICENSE AGREEMENT, AND THE BT DEVELOPMENT AGREEMENT (THE AGGREGATE AMOUNT); PROVIDED, HOWEVER, THAT IN THE EVENT THAT EITHER PARTY (THE LIABLE PARTY) HPA SHALL BECOME LIABLE TO THE OTHER PARTY HEREUNDER OR THEREUNDER FOR AN AMOUNT (THE TOTAL LIABILITY) LARGER THAN THE AGGREGATE AMOUNT CALCULATED AS OF THE DATE THAT THE TOTAL LIABILITY BECAME DUE AND PAYABLE, THE LIABLE PARTY SHALL PROMPTLY PAY SUCH OTHER PARTY A LUMP SUM EQUAL TO THE AGGREGATE AMOUNT AS SO CALCULATED AND PROVIDED, FURTHER, THAT IF HPA IS THE LIABLE PARTY, EMERGENT SHALL THEREAFTER HAVE A RIGHT OF OFFSET WITH RESPECT TO ANY PAYMENT OBLIGATIONS OF EMERGENT TO HPA HEREUNDER AND THEREUNDER THAT BECOME DUE AND PAYABLE AFTER SUCH DATE, UNTIL SUCH TIME AS THE TOTAL AMOUNTS OFFSET BY EMERGENT EQUAL THE DIFFERENCE BETWEEN THE TOTAL LIABILITY AND SUCH LUMP SUM PAYMENT BY HPA; AND PROVIDED, FURTHER, THAT IF EMERGENT IS THE LIABLE PARTY, THEN THEREAFTER, AT SUCH TIMES AS EMERGENT SHALL MAKE PAYMENTS TO HPA THAT ARE OTHERWISE DUE AND PAYABLE HEREUNDER OR THEREUNDER, EMERGENT SHALL PAY TO HPA AN EQUAL AMOUNT AS ADDITIONAL DAMAGES, UNTIL SUCH TIME AS THE TOTAL AMOUNTS SO PAID TO HPA AS ADDITIONAL DAMAGES EQUAL THE DIFFERENCE BETWEEN THE TOTAL LIABILITY AND SUCH LUMP SUM PAYMENT BY EMERGENT.
6.5 Insurance. Supplier shall have and maintain such program of self-insurance covering the Exploitation of the Products as is normal and customary in the pharmaceutical industry generally for parties similarly situated.
Representations and Warranties
7.1 Representations and Warranties. Each Party hereby represents, warrants and covenants to the other Party as of the Effective Date as follows:
7.1.1 Such Party (a) has the power and authority and the legal right to enter into this Agreement and perform its obligations hereunder, and (b) has taken all necessary action on its part required 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 and binding obligation of such Party and is enforceable against it in accordance with its terms subject to the effects of bankruptcy, insolvency or other laws of general application affecting the enforcement of creditor rights and judicial principles affecting the availability of specific performance and general principles of equity, whether enforceability is considered a proceeding at law or equity.
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7.1.2 Such Party is not aware of any pending or threatened litigation (and has not received any communication) that alleges that such Partys activities related to this Agreement have violated, or that by conducting the activities as contemplated herein such Party would violate, any of the intellectual property rights of any other Person.
7.1.3 All necessary consents, approvals and authorizations of all regulatory and governmental authorities and other Persons required to be obtained by such Party in connection with the execution and delivery of this Agreement and the performance of its obligations hereunder have been obtained.
7.1.4 The execution and delivery of this Agreement and the performance of such Partys obligations hereunder (a) do not conflict with or violate any requirement of applicable law or regulation or any provision of the articles of incorporation, bylaws, limited partnership agreement or any similar instrument of such Party, as applicable, in any material way, and (b) do not conflict with, violate, or breach or constitute a default or require any consent under, any contractual obligation or court or administrative order by which such Party is bound.
7.2 Additional Representations, Warranties and Covenants of Emergent. Emergent represents, warrants and covenants to Supplier that Emergent is a corporation duly organized and in good standing under the laws of the State of Delaware, and has full 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 as it is contemplated to be conducted by this Agreement.
7.3 Additional Representations, Warranties and Covenants of Supplier. Supplier represents, warrants and covenants to Emergent that Supplier is a governmental entity duly organized, validly existing and in good standing under the laws of England, and has full governmental 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 as it is contemplated to be conducted by this Agreement.
7.4 Disclaimer of Warranties. EXCEPT FOR THOSE WARRANTIES SET FORTH IN THIS ARTICLE VII, AND SUBJECT TO SECTION 6.4.1, EACH PARTY HEREBY DISCLAIMS ANY AND ALL WARRANTIES, CONDITIONS AND TERMS, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING (A) ANY WARRANTY OF QUALITY, PERFORMANCE, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE, (B) ANY WARRANTY WITH RESPECT TO THE VALIDITY OR ENFORCEABILITY OF ANY PATENT OR OTHER INTELLECTUAL PROPERTY, AND (C) ANY WARRANTY THAT THE PERFORMANCE OF ITS RIGHTS OR OBLIGATIONS HEREUNDER WILL NOT INFRINGE THE INTELLECTUAL PROPERTY RIGHTS OF ANY PERSON. SUBJECT TO SECTION 6.4.1, NO PARTY MAKES ANY REPRESENTATIONS HEREUNDER OTHER THAN THOSE SET FORTH EXPRESSLY HEREIN.
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Term and Termination
8.1 Term and Expiration. This Agreement shall become effective as of the Effective Date and unless terminated earlier pursuant to Section 8.2, 8.3, 8.4, or 8.6, the term of this Agreement (the Term) shall continue in effect until the tenth (10th) anniversary of the date on which Supplier obtains or is issued the last Regulatory Approval for any Product.
8.2 Termination by Emergent without Cause. Notwithstanding anything contained herein to the contrary, Emergent shall have the right to terminate this Agreement in its entirety or with respect to one or more countries in the Territory at any time in its sole discretion by giving one hundred and eighty (180) days written notice to Supplier.
8.3 Termination of this Agreement by Either Party for Material Breach. Material failure by a Party to comply with any of its material obligations contained herein shall entitle the Party not in default to give to the Party in default notice specifying the nature of the default, requiring the defaulting Party to make good or otherwise cure such default, and stating its intention to terminate if such default is not cured. In the event that Emergent is the notifying Party, Emergent shall have the right, in addition to all other remedies available to it by law, in equity or pursuant to this Agreement, to suspend payment of any amounts that it would otherwise owe to Supplier hereunder until such time as the material breach of Supplier is cured. If a noticed default is not cured within thirty (30) days (the Cure Period) after the receipt of such notice (or, if such default cannot be cured within such thirty (30)-day period, if the Party in default does not commence actions to cure such default within the Cure Period and thereafter diligently continue such actions), the Party not in default shall be entitled, without prejudice to any of its other rights conferred on it by this Agreement, and in addition to any other remedies available to it by law or in equity, to terminate this Agreement in its entirety; provided, however, that any right to terminate under this Section 8.3 shall be stayed in the event that, during any Cure Period, the Party alleged to have been in default shall have initiated dispute resolution in accordance with Section 9.6 with respect to the alleged default, which stay shall last so long as the initiating Party diligently and in good faith cooperates in the prompt resolution of such dispute resolution proceedings.
8.4 Accrued Rights; Survival.
8.4.1 Accrued Rights. Termination or expiration of this Agreement for any reason shall be without prejudice to any rights that shall have accrued to the benefit of a Party prior to such termination or expiration. Such termination or expiration shall not relieve a Party from obligations that are expressly indicated to survive the termination or expiration of this Agreement.
8.4.2 Survival. Sections 3.6, 3.7, and this Section 8.4, and Articles I, IV, V, VI, and IX, shall survive the termination or expiration of this Agreement for any reason.
8.4.3 Product Sell-Off. Emergent shall have a period of ninety (90) days from the effective date of termination or expiration of this Agreement during which it may sell in the
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Territory in accordance with the terms hereof any stocks of Products in its possession at the effective date of such termination or expiration.
8.5 Termination upon Insolvency. Either Party may terminate this Agreement if, at any time, the other Party shall file in any court or agency pursuant to any statute or regulation of any state, country or jurisdiction, a petition in bankruptcy or insolvency or for reorganization or for an arrangement or for the appointment of a receiver or trustee of that Party or of its assets, or if the other Party proposes a written agreement of composition or extension of its debts, or if the other Party shall be served with an involuntary petition against it, filed in any insolvency proceeding, and such petition shall not be dismissed within sixty (60) days after the filing thereof, or if the other Party shall propose or be a Party to any dissolution or liquidation, or if the other Party shall make an assignment for the benefit of its creditors.
9.1 Force Majeure. Neither Party shall be held liable or responsible to the other Party or be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any term of this Agreement, when such failure or delay is caused by or results from causes beyond the reasonable control of the non-performing Party, including fires, floods, embargoes, shortages, epidemics, quarantines, war, acts of war (whether war be declared or not), insurrections, riots, civil commotion, strikes, lockouts or other labor disturbances, acts of God or acts, omissions or delays in acting by any governmental authority. The non-performing Party shall notify the other Party of such force majeure within ten (10) days after such occurrence by giving written notice to the other Party stating the nature of the event, its anticipated duration, and any action being taken to avoid or minimize its effect. The suspension of performance shall be of no greater scope and no longer duration than is necessary and the non-performing Party shall use commercially reasonable efforts to remedy its inability to perform; provided, however, that in the event the suspension of performance continues for one-hundred and eighty (180) days after the date of the occurrence, that Parties shall meet and discuss in good faith how best to proceed.
9.2 Assignment. Without the prior written consent of the other Party, neither Party shall sell, transfer, assign, charge, delegate, pledge or otherwise dispose of, whether voluntarily, involuntarily, by operation of law or otherwise, this Agreement or any of its rights or duties hereunder, nor purport to do any of the same; provided, however, that Emergent may, without such consent, assign this Agreement and its rights hereunder to an Affiliate, to the purchaser of all or substantially all of its assets, or to any Third Party pursuant to or in connection with any agreement and plan of merger, acquisition, reorganization, or other similar corporate transaction; and provided, further, that HPA may, without such consent, assign the benefit of this Agreement and its rights hereunder to an Affiliate, or to a Third Party in connection with the permitted assignment to such Third Party of HPAs rights under the rBOT License Agreement and the BT License Agreement. Any attempted assignment in violation of the preceding sentence shall be void and of no effect. All validly assigned rights of the Parties hereunder shall be binding upon and inure to the benefit of and be enforceable by the permitted assigns of Emergent or Supplier, as the case may be. No assignment validly made pursuant to this Section 9.2 shall relieve the
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assigning Party of any of its obligations under this Agreement, unless the other Party has given its prior consent thereto.
9.3 Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law, (a) such provision shall be fully severable, (b) this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom, and (d) the Parties agree to attempt to substitute for any such illegal, invalid or unenforceable provision a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and reasonably acceptable to the Parties. To the fullest extent permitted by applicable law, each Party hereby waives any provision of law that would render any provision hereof prohibited or unenforceable in any respect.
9.4 Notices. All notices or other communications which are required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by facsimile (promptly confirmed by personal delivery or courier as provided herein) or sent by internationally-recognized overnight courier, addressed as follows:
or to such other address as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith. Any such communication shall be deemed to have been given when delivered if personally delivered on a Business Day, when
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transmitted if sent by facsimile (in accordance with this Section 9.4) on a Business Day, and on the third (3rd) Business Day after dispatch if sent by internationally-recognized courier. It is understood and agreed that this Section 9.4 is not intended to govern the day-to-day business communications necessary between the Parties in performing their duties, in due course, under the terms of this Agreement.
9.5 Governing Law. This Agreement shall be governed by and construed in accordance with English law (without reference to the rules of conflict of laws thereof). Subject to Section 9.6, the Parties hereby irrevocably and unconditionally consent to the exclusive jurisdiction of (a) the courts of the State of New York and the United States District Court for the Southern District of New York for any action, suit or proceeding (other than appeals therefrom) initiated by HPA and arising out of or relating to this Agreement, and (b) the English courts located in London for any action, suit or proceeding (other than appeals therefrom) initiated by Emergent and arising out of or relating to this Agreement. The Parties agree not to commence any action, suit or proceeding (other than appeals therefrom) related thereto except in such courts, respectively. The Parties further hereby irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding (other than appeals therefrom) arising out of or relating to this Agreement in the courts of the State of New York or the United States District Court for the Southern District of New York, or the English courts located in London, as the case may be, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. Each Party hereto further agrees that service of any process, summons, notice or document by internationally recognized courier to its address set forth above shall be effective service of process for any action, suit or proceeding brought against it under this Agreement in any such court.
9.6 Dispute Resolution.
9.6.1 Negotiation. The Parties shall negotiate in good faith and use reasonable efforts to settle any dispute, controversy or claim arising from or related to this Agreement (or any document or instrument delivered in connection herewith) (each, a Dispute). In the event that the Parties are unable to, within ten (10) days, to reach a resolution, such Dispute shall be referred to the chief executive officers of Emergent and Supplier, or their respective successors, who shall attempt in good faith to reach a resolution of the Dispute. If the foregoing procedures fail to achieve a mutually satisfactory resolution within ten (10) days, then either Party may, by written notice to the other Party, elect to have the matter settled by binding arbitration pursuant to Section 9.6.2.
9.6.2 Arbitration. Any arbitration under this Agreement shall take place at a location to be agreed by the Parties; provided, however, that in the event that the Parties are unable to agree on a location for an arbitration under this Agreement within five (5) days of the demand therefor, such arbitration shall be held in New York, New York if Supplier is the Party that first demanded such arbitration or in London, England if Emergent is the Party that first demanded such arbitration. Any arbitration under this Agreement shall be administered by the American Arbitration Association under its Commercial Arbitration Rules then in effect (the AAA Rules). The Parties shall appoint an arbitrator by mutual agreement. If the Parties cannot agree on the appointment of an arbitrator within thirty (30) days of the demand for
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arbitration, an arbitrator shall be appointed in accordance with AAA Rules. The arbitrator shall have the authority to grant any equitable and legal remedies that would be available in any judicial proceeding instituted to resolve the Dispute submitted to such arbitration in accordance with this Agreement; provided, however, that the arbitrator shall not have the power to alter, amend or otherwise affect the terms or the provisions of this Agreement. Judgment upon any award rendered pursuant to this Section may be entered by any court having jurisdiction over the Parties other assets. The arbitrator shall have no authority to award punitive or any other type of damages not measured by a Partys compensatory damages. Each Party shall bear its own costs and expenses and attorneys fees and an equal share of the arbitrators fees and any administrative fees of arbitration, unless the arbitrator shall otherwise allocate such costs, expenses and fees between the Parties. The Parties agree that all arbitration awards shall be final and binding on the Parties and their Affiliates. The Parties hereby waive the right to contest the award in any court or other forum. Except to the extent necessary to confirm an award or as may be required by law, neither a Party nor an arbitrator may disclose the existence, content, or results of an arbitration without the prior written consent of both Parties. In no event shall an arbitration be initiated after the date when commencement of a legal or equitable proceeding based on the dispute, controversy or claim would be barred by the applicable English statute of limitations.
9.6.3 Interim Relief. Notwithstanding anything herein to the contrary, nothing in this Section 9.6 shall preclude either Party from seeking interim or provisional relief, including a temporary restraining order, preliminary injunction or other interim equitable relief concerning a Dispute, either prior to or during any arbitration hereunder, if necessary to protect the interests of such Party. This Section 9.6.3 shall be specifically enforceable.
9.7 Equitable Relief. Supplier acknowledges and agrees that the restrictions set forth in Section 2.1 and Article IV of this Agreement are reasonable and necessary to protect the legitimate interests of Emergent and that Emergent would not have entered into this Agreement in the absence of such restrictions, and that any violation or threatened violation of any provision of Section 2.1 or Article IV will result in irreparable injury to Emergent. Supplier also acknowledges and agrees that in the event of a violation or threatened violation of any provision of Section 2.1 or Article IV, Emergent shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving irreparable injury or actual damages and without the necessity of having to post a bond, as well as to an equitable accounting of all earnings, profits and other benefits arising from any such violation. The rights provided in the immediately preceding sentence shall be cumulative and in addition to any other rights or remedies that may be available to Emergent. Nothing in this Section 9.7 is intended, or should be construed, to limit Emergents right to preliminary and permanent injunctive relief or any other remedy for a breach of any other provision of this Agreement.
9.8 No Benefit to Third Parties. The Parties do not intend that any term of this Agreement should be enforceable by virtue of the Contracts (Rights of Third Parties) Act 1999 by any person who is not a party to this Agreement.
9.9 Further Assurances. Each Party shall duly execute and deliver, or cause to be duly executed and delivered, such further instruments and do and cause to be done such further acts and things, including the filing of such assignments, agreements, documents and
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instruments, as may be necessary or as the other Party may reasonably request in connection with this Agreement or to carry out more effectively the provisions and purposes hereof, or to better assure and confirm the rights and remedies of the other Party under this Agreement.
9.10 English Language. This Agreement shall be written and executed in the English language. Any translation into any other language shall not be an official version thereof, and in the event of any conflict in interpretation between the English version and such translation, the English version shall control. All notices and other disclosure required of the Parties hereunder.
9.11 References. Unless otherwise specified, (a) references in this Agreement to any Article, Section, or Exhibit shall mean references to such Article, Section, or Exhibit of this Agreement, (b) references in any section to any clause are references to such clause of such section, and (c) references to any agreement, instrument or other document in this Agreement refer to such agreement, instrument or other document as originally executed or, if subsequently varied, replaced or supplemented from time to time, as so varied, replaced or supplemented and in effect at the relevant time of reference thereto.
9.12 Independent Contractors. It is expressly agreed that Supplier and Emergent shall be independent contractors and that the relationship between the Parties shall not constitute a partnership, joint venture or agency. Neither Supplier nor Emergent shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other, without the prior consent of the other Party. All persons employed by a Party shall be employees of such Party and not of the other Party and all costs and obligations incurred by reason of any such employment shall be for the account and expense of such Party.
9.13 Waiver. Any term or condition of this Agreement may be waived at any time by the Party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the Party waiving such term or condition. The waiver by either Party of any right hereunder or the failure to exercise, or any delay in exercising a right or remedy provided by this Agreement or by law, or the waiver of a breach by the other Party, shall not be deemed a waiver of any other right hereunder or of any other breach or failure by such other Party whether of a similar nature or otherwise.
9.14 Counterparts. The Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
9.15 Construction. Except where the context otherwise requires, wherever used, the singular shall include the plural, the plural the singular, the use of any gender shall be applicable to all genders and the word or is used in the inclusive sense. The captions of this Agreement are for convenience of reference only and in no way define, describe, extend or limit the scope or intent of this Agreement or the intent of any provision contained in this Agreement. The term including as used herein shall mean including, without limiting the generality of any description preceding such term. The language of this Agreement shall be deemed to be the language mutually chosen by the Parties, and no rule of strict construction shall be applied against either Party.
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9.16 Entire Agreement; Modifications. This Agreement, together with the rBOT Development Agreement, the rBOT License Agreement, the BT Development Agreement and the BT License Agreement, sets forth and constitutes the entire agreement and understanding between the Parties with respect to the subject matter hereof and all prior agreements, understanding, promises and representations, whether written or oral, with respect thereto are superseded hereby. Each Party confirms that it is not relying on any representations or warranties of the other Party except as specifically set forth herein. No amendment, modification, release or discharge hereof shall be binding upon the Parties unless in writing and duly executed by authorized representatives of both Parties.
[SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth above.
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A final cost objective will be established in order to segregate manufacturing costs that are incurred as a result of this project. A cost objective is a function, organizational subdivision, contract, or other work unit for which cost data are desired and for which provision is made to accumulate and measure the cost of processes, products, jobs, capitalized projects, etc.
The Suppliers accounting system may have both intermediate and final cost objectives. An intermediate cost objective is one to which costs are allocated for purposes of accumulating similar costs. Once accumulated, the costs are allocated to another intermediate cost objective or a final cost objective.
For purposes of this Agreement, Manufacturing Costs shall mean, for each Product, the sum of the following costs incurred by Supplier in connection with the Manufacture of such Product: (i) direct labor costs; (ii) direct materials cost (e.g. raw materials, intermediate compounds, active compounds, excipients, components and packaging materials used in the Manufacture of such Product, including shipping and taxes therefor) net of manufacturers discounts; (iii) other direct costs, meaning amounts paid to Third Party contract manufacturers or service providers to acquire such Product (which amount will be net of rebates or discounts, if any, from such manufacturers or service providers), and (iv) indirect costs, meaning a reasonable allocation of overhead, facilities expense (including depreciation over the expected life of the buildings and equipment), and costs for administration and for management of material procurement and other activities directly in support of Suppliers Manufacturing operation, calculated by Supplier in accordance with Suppliers cost accounting policies and procedures methods in effect from time to time, consistently applied.
(a) For purposes of this Exhibit, a direct cost is any cost that can be identified specifically with a final cost objective. In this instance, the manufacturing cost associated with each Product.
(1) Direct Labor Costs. For purposes of this Exhibit, direct labor costs are the costs of employees engaged in production activities that are directly identifiable with manufacturing the Product, including first line supervision and project management. Direct labor costs include:
(2) Direct Material Costs. For purposes of this Exhibit, direct material costs are the costs of materials used in the manufacturing process that are traced to the completed Product, or are consumed in the process.
(3) Other Direct Costs. For purposes of this Exhibit, other direct costs include amounts paid to Third Party contract manufacturers or service providers to acquire such Product (which amount will be net of rebates or discounts, if any, from such manufacturers or service providers).
(b) For purposes of this Exhibit, an indirect cost is any cost that cannot be identified specifically with a final cost objective but provides benefit to contract performance and other work, and can be distributed to them in reasonable proportion to the benefits received. Indirect costs that are properly allowable and
allocable to the project are to be included in the definition of Manufacturing Costs under this Agreement.
Any disputes about what is properly allowable and allocable to the contract shall be governed by the cost allowability provisions of the U.S. Federal Acquisition Regulations (primarily, but not limited to, FAR part 31) and any applicable case law. Final indirect rates, as negotiated with the U.S. Federal Government, will be deemed as reasonable for the purpose of this Agreement. If the Supplier does not have a current manufacturing agreement, or establish indirect rates, with the U.S. Government, support necessary to establish the fairness of such rates shall be provided, upon request, and will be subject to audit.
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