-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KZGTV0NflsMbGptr+IGoTlB/6p2kysmdcZ41SUcubNkNTptOQxT1Yuf7Tl+25FB7 tIJhLleXFSrbDsWBuUrEqQ== 0001012870-98-000657.txt : 19980317 0001012870-98-000657.hdr.sgml : 19980317 ACCESSION NUMBER: 0001012870-98-000657 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19980313 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AVIRON CENTRAL INDEX KEY: 0000949173 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 770309686 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: SEC FILE NUMBER: 333-41649 FILM NUMBER: 98565209 BUSINESS ADDRESS: STREET 1: 297 N BERNARDO AVE CITY: MOUNTAIN VIEW STATE: CA ZIP: 94043 BUSINESS PHONE: 4159196500 MAIL ADDRESS: STREET 1: 297 NORTH BERNARDO AVE CITY: MOUNTAIN VIEW STATE: CA ZIP: 94043 S-3/A 1 AMENDMENT #1 TO FORM S-3 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 13, 1998 REGISTRATION NO. 333-41649 ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------------- AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------------ AVIRON (Exact name of Registrant as specified in its charter) DELAWARE 77-0309686 (State or other jurisdiction of (I.R.S. Employer Identification incorporation or organization) Number) ------------------------------ 297 NORTH BERNARDO AVENUE MOUNTAIN VIEW, CALIFORNIA 94043 (650) 919-6500 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) _______________ J. LEIGHTON READ, M.D. CHAIRMAN AND CHIEF EXECUTIVE OFFICER 297 NORTH BERNANDO AVENUE MOUNTAIN VIEW, CALIFORNIA 94043 (650) 919-6500 (Name, address, including zip code, and telephone number, including area code, of agent for service) _______________ COPIES TO: ALAN C. MENDELSON, ESQ. ROBERT J. BRIGHAM, ESQ. COOLEY GODWARD LLP FIVE PALO ALTO SQUARE 3000 EL CAMINO REAL PALO ALTO, CA 94306-2155 (650) 843-5000 _______________ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective. _______________ If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is filed in a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement of the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] _______________ ---------------------------- THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. ================================================================================ Explanatory Note This Amendment to the Registration Statement on Form S-3 (the "Registration Statement") is being filed solely to amend Exhibit 10.16 to the Registration Statement. PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following table sets forth the expenses payable by the Registrant in connection with the sale, issuance and distribution of the securities being registered, other than underwriting discounts and commissions. All amounts are estimates except the SEC registration fee. None of these expenses will be paid by the Selling Securityholder. SEC Registration Fee.............. $15,000 Printing Expenses................. 5,000 Legal Fees and Expenses........... 15,000 Accounting Fees and Expenses...... 10,000 Total............................. $45,000 ------ ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Under Section 145 of the Delaware General Corporation Law, Aviron has broad powers to indemnify its directors and officers against liabilities they may incur in such capacities, including liabilities under the Act. Aviron's Bylaws also provide that the Registrant will indemnify its directors and executive officers and may indemnify its other officers, employees and agents to the fullest extent not prohibited by Delaware General Corporation Law. Aviron's Certificate of Incorporation provides for the elimination of liability for monetary damages for breach of the directors' fiduciary duty of care to Aviron and its stockholders. These provisions do not eliminate the director's duty of care, and in appropriate circumstances, equitable remedies such as injunctive or other forms of non-monetary relief will remain available under Delaware law. In addition, each director will continue to be subject to liability for breach of the director's duty of loyalty to the Company, for acts or omissions not in good faith or involving intentional misconduct or a knowing violation of law, for any transaction from which the director derived an improper personal benefit and for payment of dividends or approval of stock repurchases or redemptions that are unlawful under Delaware Law. The provision also does not affect a director's responsibilities under any other laws, such as the federal securities laws or state or federal environmental laws. II-1 ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT ------- ----------------------- 1.1 Form of Underwriting Agreement.(1) 3.1 Bylaws of the Registrant. (2) 3.2 Restated Certificate of Incorporation of the Registrant. (2) 4.1 Reference is made to Exhibits 3.1 and 3.2. 4.2 Specimen Stock Certificate. (1) 4.3 Warrant for Series A Preferred Stock, issued to The Mount Sinai School of Medicine of the City of New York. (1) 4.4 Warrant for Series A Preferred Stock, issued to The Mount Sinai School of Medicine of the City of New York. (1) 4.5 Warrant for Series A Preferred Stock, issued to The Mount Sinai School of Medicine of the City of New York. (1) 4.6 Warrant for Series A Preferred Stock, issued to The Mount Sinai School of Medicine of the City of New York. (1) 4.7 Warrant for Series C Preferred Stock, issued to Raymond, James & Associates. (1) 4.8 Investors Rights Agreement, dated July 18, 1995, among the Registrant and the investors named thereon. (1) 4.9 Common Stock Purchase Agreement between the Registrant and Biotech Target, S.A., dated as of March 27, 1997. (3) 4.10 Rights Agreement between the Registrant and BankBoston, N.A., dated as of October 8, 1997.(5) 5.1 Opinion of Cooley Godward LLP. (6) +10.1 License Agreement between the Registrant and ARCH Development Corporation, dated July 1, 1992. (1) +10.2 Technology Transfer Agreement between the Registrant and The Mount Sinai School of Medicine of the City University of New York, dated February 9, 1993. (1) +10.3 Materials Transfer and Intellectual Property Agreement between the Registrant and the Regents of the University of Michigan, dated February 24, 1995. (1) +10.4 Stock Transfer Agreement between the Registrant and the Regents of the University of Michigan, dated February 24, 1995. (1) +10.5 Development and License Agreement between the Registrant and Sang-A Pharm. Co., Ltd., dated May 3, 1995. (1) +10.6 Cooperative Research and Development Agreement, between the Registrant and the National Institute of Health, dated May 30, 1995 (1) +10.7 Heads of Agreement between the Registrant and SmithKline Beecham Biologicals S.A., dated October 8, 1995. (1) +10.8 Manufacturing and Development Agreement between the Registrant and Evans Medical Limited, dated November 7, 1995. (1) 10.9 1996 Equity Incentive Plan. (1) 10.10 1996 Non-Employee Directors' Stock Option Plan. (1) 10.11 1996 Employee Stock Purchase Plan. (1) 10.12 Industrial Lease between the Registrant and the Vanni Business Park General Partnership, dated August 29, 1995. (1) +10.13 First Amendment to License Agreement between the Registrant and ARCH Development Corporation, dated March 15, 1996. (1) +10.14 Biological Materials License Agreement between the Registrant and the National Institutes of Health, dated May 31, 1996. (1) +10.15 Contract Manufacture Agreement between the Registrant and Evans Medical Limited, dated as of April 16, 1997. (4) ++10.16 Production Agreement between the Registrant and Packaging Coordinators, Inc. dated as of October 31, 1997. 10.17 Facility Reservation Agreement between the Registrant and Packaging Coordinators, Inc. dated as of October 31, 1997. (6) 23.1 Consent of Ernst & Young LLP, Independent Auditors. (6) 23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1. (6)
- ------------------ + Confidential treatment has been granted for portions of this exhibit ++ Confidential treatment has been requested for portions of this exhibit. (1) Incorporated by reference to the correspondingly numbered exhibit to the Company's Registration Statement on Form S-1, File No. 333-05209, filed June 5, 1996, as amended. (2) Incorporated by reference to the correspondingly numbered exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1996, File No. 0-20815, filed December 20, 1996. (3) Incorporated by reference to the correspondingly numbered exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997, File No. 0-20815, filed May 15, 1997. (4) Incorporated by reference to the correspondingly numbered exhibit to the Company's Current Report on Form 8-K File No. 0-20815, dated April 16, 1997 and filed July 21, 1997. (5) Incorporated by reference to the correspondingly numbered exhibit to the Company's Current Report on Form 8-K File No. 0-20815, dated October 8, 1997 and filed October 10, 1997. (6) Previously filed with the Registration Statement. ITEM 17. UNDERTAKINGS. The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post- effective amendment to this registration statement to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; (2) That, for purposes of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to provisions described in Item 15, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II-2 SIGNATURES Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Palo Alto, State of California, on March 11, 1998. AVIRON By /s/ J. Leighton Read, M.D. _____________________________________ J. Leighton Read, M.D. Chairman of the Board & Chief Executive Officer (Principal Executive Officer) Pursuant to the requirements of the Securities Act, this Registration Statement has been signed below by the following persons in the capabilities and on the date indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ J. Leighton Read, M.D. Chairman of the Board & Chief March 11, 1998 - ------------------------------ Executive Officer (Principal Executive J. Leighton Read, M.D. Officer) /s/ Fred Kurland Chief Financial Officer (Principal March 11, 1998 - ------------------------------ Financial and Accounting Officer) Fred Kurland * Director March 11, 1998 - ------------------------------ Reid W. Dennis * Director March 11, 1998 - ------------------------------ Paul H. Klingenstein * Director March 11, 1998 - ------------------------------ Bernard Roizman, Sc.D. * Director March 11, 1998 - ------------------------------ L. James Strand, M.D. * Director March 11, 1998 - ----------------------------- Jane E. Shaw, Ph.D. *By: J. Leighton Read, M.D. ------------------------ Attorney-in-Fact
II-3 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION OF DOCUMENT ------- ----------------------- 1.1 Form of Underwriting Agreement.(1) 3.1 Bylaws of the Registrant. (2) 3.2 Restated Certificate of Incorporation of the Registrant. (2) 4.1 Reference is made to Exhibits 3.1 and 3.2. 4.2 Specimen Stock Certificate. (1) 4.3 Warrant for Series A Preferred Stock, issued to The Mount Sinai School of Medicine of the City of New York. (1) 4.4 Warrant for Series A Preferred Stock, issued to The Mount Sinai School of Medicine of the City of New York. (1) 4.5 Warrant for Series A Preferred Stock, issued to The Mount Sinai School of Medicine of the City of New York. (1) 4.6 Warrant for Series A Preferred Stock, issued to The Mount Sinai School of Medicine of the City of New York. (1) 4.7 Warrant for Series C Preferred Stock, issued to Raymond, James & Associates. (1) 4.8 Investors Rights Agreement, dated July 18, 1995, among the Registrant and the investors named thereon. (1) 4.9 Common Stock Purchase Agreement between the Registrant and Biotech Target, S.A., dated as of March 27, 1997. (3) 4.10 Rights Agreement between the Registrant and BankBoston, N.A., dated as of October 8, 1997.(5) 5.1 Opinion of Cooley Godward LLP. (6) +10.1 License Agreement between the Registrant and ARCH Development Corporation, dated July 1, 1992. (1) +10.2 Technology Transfer Agreement between the Registrant and The Mount Sinai School of Medicine of the City University of New York, dated February 9, 1993. (1) +10.3 Materials Transfer and Intellectual Property Agreement between the Registrant and the Regents of the University of Michigan, dated February 24, 1995. (1) +10.4 Stock Transfer Agreement between the Registrant and the Regents of the University of Michigan, dated February 24, 1995. (1) +10.5 Development and License Agreement between the Registrant and Sang-A Pharm. Co., Ltd., dated May 3, 1995. (1) +10.6 Cooperative Research and Development Agreement, between the Registrant and the National Institute of Health, dated May 30, 1995 (1) +10.7 Heads of Agreement between the Registrant and SmithKline Beecham Biologicals S.A., dated October 8, 1995. (1) +10.8 Manufacturing and Development Agreement between the Registrant and Evans Medical Limited, dated November 7, 1995. (1) 10.9 1996 Equity Incentive Plan. (1) 10.10 1996 Non-Employee Directors' Stock Option Plan. (1) 10.11 1996 Employee Stock Purchase Plan. (1) 10.12 Industrial Lease between the Registrant and the Vanni Business Park General Partnership, dated August 29, 1995. (1) +10.13 First Amendment to License Agreement between the Registrant and ARCH Development Corporation, dated March 15, 1996. (1) +10.14 Biological Materials License Agreement between the Registrant and the National Institutes of Health, dated May 31, 1996. (1) +10.15 Contract Manufacture Agreement between the Registrant and Evans Medical Limited, dated as of April 16, 1997. (4) ++10.16 Production Agreement between the Registrant and Packaging Coordinators, Inc. dated as of October 31, 1997. 10.17 Facility Reservation Agreement between the Registrant and Packaging Coordinators, Inc. dated as of October 31, 1997. (6) 23.1 Consent of Ernst & Young LLP, Independent Auditors. (6) 23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1. (6)
- ------------------ + Confidential treatment has been granted for portions of this exhibit ++ Confidential treatment has been requested for portions of this exhibit. (1) Incorporated by reference to the correspondingly numbered exhibit to the Company's Registration Statement on Form S-1, File No. 333-05209, filed June 5, 1996, as amended. (2) Incorporated by reference to the correspondingly numbered exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1996, File No. 0-20815, filed December 20, 1996. (3) Incorporated by reference to the correspondingly numbered exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997, File No. 0-20815, filed May 15, 1997. (4) Incorporated by reference to the correspondingly numbered exhibit to the Company's Current Report on Form 8-K File No. 0-20815, dated April 16, 1997 and filed July 21, 1997. (5) Incorporated by reference to the correspondingly numbered exhibit to the Company's Current Report on Form 8-K File No. 0-20815, dated October 8, 1997 and filed October 10, 1997. (6) Previously filed with the Registration Statement. EX-10.16 2 PRODUCTION AGMT BETWEEN PACKAGING COORDINATORS Exhibit 10.16 PRODUCTION AGREEMENT BETWEEN PACKAGING COORDINATORS, INC. AND AVIRON This Agreement made effective as of October 31, 1997 (the "Effective Date") by and between Packaging Coordinators, Inc., a Pennsylvania corporation with offices at 3001 Red Lion Road, Philadelphia, Pennsylvania 19114 (hereinafter called "PCI"); and Aviron, a Delaware corporation with offices at 297 N. Bernardo Avenue, Mountain View, CA 94043 (hereinafter called "Aviron"). PCI and Aviron may be referred to herein as a "Party" or, collectively, as "Parties." WITNESSETH WHEREAS, PCI specializes in packaging for the pharmaceutical industries and has certain technical and commercial information and know-how relating to, among other things, performing assembly functions and packaging of pharmaceutical products. WHEREAS, Aviron is a corporation that develops, conducts stability trials, registers, and intends to market pharmaceutical products, and is the owner of certain proprietary technical and commercial information and know-how relating to, among other things, the formulation and development of such products. WHEREAS, Aviron desires to engage PCI to provide certain services to Aviron in connection with the manufacture of certain of Aviron's products; and WHEREAS, Aviron desires to collaborate with PCI to construct and develop an appropriate site for such manufacture at PCI's facility; NOW, THEREFORE, in consideration of the premises and the mutual promises contained herein and intending to be legally bound hereby, the Parties agree as follows: 1. DEFINITIONS ----------- The following terms as used in this Agreement shall have the meanings set forth in this Article unless otherwise specifically provided herein: 1.1 "Affiliate(s)" shall mean 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 (50%) percent of the voting share capital of such entity or any other comparable equity or ownership interest. 1.2 "Agency" shall mean any governmental regulatory authority involved in regulating any aspect of the development, Manufacture, Storage and sale of the Product. [*]= CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. 1. 1.3 "Aviron Production Equipment" shall mean the [*] equipment purchased by Aviron set forth in Appendix 1 attached hereto, which may be amended from time to time. 1.4 "Aviron Area" shall mean the area reserved for [*] Production pursuant to, and more fully described in, the Facility Reservation Agreement. 1.5 "cGMP" shall mean all the laws, regulations and standards relating to Primary and Secondary Production, including but not limited to, the United States Food And Drug Administration (FDA) current Good Manufacturing Practices, as set forth in the Code Of Federal Regulations (CFR), and the EEC Good Manufacturing Guidelines, Volume IV as such Regulations and Guidelines may be revised from time to time, and any other applicable laws, guidelines and regulations. If there should be a conflict between the FDA and EEC standards, the more stringent of the two shall apply. Aviron shall be responsible to advise PCI of cGMP and other Agency requirements which shall apply to Primary and Secondary Production conducted hereunder. 1.6 "Delivery Date" shall mean the date on which Product is delivered to the carrier for shipment from PCI to Aviron pursuant to Section 7.2. 1.7 "Facility" shall mean PCI's facility at [*] or other facility that may be mutually agreed in writing by the Parties. 1.8 "Facility Reservation Agreement" shall mean that certain agreement dated October 31, 1997 under which the Parties agreed to construct and build-out the Aviron Area and reserve the Aviron Area for Aviron. 1.9 "FDA" shall mean the United States Food and Drug Administration and any successor agency having substantially the same function. 1.10 "Manufacture" shall mean the process of [*] Production. 1.11 "Materials" shall mean all components utilized in [*] Production except for the Vaccine and Syringes. 1.12 "Michigan" shall mean the Regents of the University of Michigan, a constitutional corporation of the State of Michigan with offices located at Wolverine Tower, Room 2071, 3003 South State Street, Ann Arbor, Michigan, 48109-1280, USA. 1.13 "Michigan Agreement" shall mean a certain Materials Transfer and Intellectual Property Agreement between Aviron and Michigan dated 24 February 1995. 1.14 "PCI Production Equipment" shall mean all of the [*] purchased by PCI as set forth in Appendix 2, which may be amended from time to time. [*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. 2. 1.15 [ * ] Production" shall mean the [ * ] as set forth in Appendix 3. 1.16 "Product" shall mean the product which is the result of [*] Production. 1.17 "Proprietary Information" shall have the meaning set forth in Article 12. 1.18 "[ * ]" shall mean [ * ] as set forth in Appendix 3. 1.19 "Specifications" shall mean the procedures, test results, requirements, quality standards data and other documentation with respect to Materials, Syringes, [*] Production, [*] Production, Product, Production Equipment, and Vaccine and Storage of the Vaccine and the Product to be determined by the parties as set forth in Section 6.7, and, once completed, to be appended hereto as Appendix 3, as may be amended from time to time. 1.20 "Store" or "Storage" shall mean the storage of [ * ] as set forth in the Specifications. 1.21 "Syringe" shall mean the unfilled syringe and holder supplied to PCI by Aviron as set forth in the Specifications. 1.22 "Vaccine" shall mean the bulk cold-adapted multivalent influenza vaccine provided to PCI by Aviron as set forth in the Specifications. 2. FACILITY -------- 2.1 CONSTRUCTION AND RESERVATION OF AVIRON AREA. The Parties agree to collaborate on the construction, build-out and reservation of the Aviron Area pursuant to the Facility Reservation Agreement attached as Appendix 4 hereto. 3. PRODUCTION EQUIPMENT -------------------- 3.1 INSTALLATION AND QUALIFICATION. Each Party will, at its sole expense, provide, install in the Aviron Area and qualify its respective Production Equipment in compliance with cGMP. 3.2 MAINTENANCE. PCI agrees to maintain and operate the Aviron and PCI Production Equipment used, directly or indirectly, for [ * ] Production, in all material respects, in accordance with (i) cGMPs, (ii) applicable Agency requirements and (iii) the Specifications. PCI shall be responsible for routine maintenance in accordance with the equipment manufacturers' guidelines, cGMPs and other applicable laws and regulations, and for other repairs required as a result of the negligence or intentional misconduct of PCI or its employees. Aviron shall bear all other expenses incurred for the maintenance (other than routine maintenance), repair and/or replacement, as needed of the Aviron Production Equipment. For the purpose of this Agreement, "routine [*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. 3. maintenance" shall mean preventive maintenance as set forth in the Specifications. 3.3 OWNERSHIP. Aviron shall at all times hold all right, title and interest in the Aviron Production Equipment. PCI shall not, at any time during the term of this Agreement, encumber the Aviron Production Equipment. PCI shall at all times hold all right, title and interest in the PCI Production Equipment. Aviron shall not, at any time during the term of this Agreement, encumber the PCI Production Equipment. Prior to the commencement of [ * ] Production, each Party shall provide evidence to the other Party's reasonable satisfaction indicating that Party's Production Equipment is insured and that such insurance covers the other Party (as an additional insured) for any loss or damage to the other Party, or its property or employees, except where such loss or damage is a result of the negligence or intentional misconduct of the other Party or its employees. 4. SUPERVISION WITHIN THE AVIRON AREA ---------------------------------- 4.1 AVIRON TECHNICAL REPRESENTATIVE. Aviron shall have the right to have one or more representatives in the Aviron Area during [ * ] Production to (i) review Production Equipment and [ * ] Production, (ii) review any relevant records in connection with such [ * ] Production and assess its compliance with cGMP and quality assurance standards set forth in the Specifications and (iii) discuss any related issues with PCI's management. Aviron's technical representatives, when on-site, shall comply with PCI's rules and regulations. Aviron shall indemnify and hold PCI and its Affiliates harmless from all liability, including claims by Aviron's technical representatives for workers' compensation, resulting from the presence of Aviron's technical representatives at the Facility except for claims resulting from the negligent or willful misconduct on the part of PCI and its employees. 4.2 RESPONSIBILITIES. Aviron's technical representative, if present, shall not have responsibility for the supervision of PCI's personnel conducting [ * ] Production. However, if at any time Aviron's technical representatives feel that PCI is operating in a manner inconsistent with this Agreement, he/she is to notify PCI immediately to cease operations until such condition is remedied. PCI will immediately cease operations and will not recommence [ * ] Production operations without Aviron's approval. PCI shall use its best efforts to remedy any such condition and Aviron shall authorize PCI to resume [ * ] Production upon reasonable satisfaction that such condition has been remedied. Nothing herein shall amend or alter the status of PCI as an independent contractor. 5. FORECAST, PURCHASE AND SUPPLY OF PRODUCT ---------------------------------------- 5.1 PURCHASE AND SUPPLY. During the term of this Agreement, Aviron shall purchase and PCI shall supply such quantities of Product as may be set forth on purchase orders placed by Aviron under this Agreement. All purchases of Product hereunder shall be governed by the terms of this Agreement which shall [*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. 4. supersede any inconsistent provisions in any purchase order delivered by Aviron to PCI. 5.2 FORECASTS. On or before September 30 and March 31 of each year during the term of this Agreement, Aviron will provide PCI with a written eighteen (18) month rolling forecast, to be updated in six (6) month intervals, of the quantity of Product which Aviron expects to require from PCI during each of the next eighteen (18) months. The first six (6) months of the first such rolling forecast shall be binding upon Aviron. Aviron's first forecast shall include (i) the required Delivery Date for the binding portion of the forecast and (ii) the quantity of Product to be delivered. 5.3 ORDERS. Following the Effective Date, Aviron will provide PCI with one or more purchase orders at six month intervals. Each such purchase order will set forth (i) the quantity of Product ordered for delivery during the six months after the date on which the purchase order is deemed to be received, (ii) the requested Delivery Date for such order, (iii) the quantity of Product to be delivered to Aviron as a quality control sample, (iv) the quantity of Product to be delivered on the Delivery Date in each form of packaging and (v) the lot numbers to be applied to such Product. Such purchase order shall be delivered no later than ninety (90) days prior to the earliest requested Delivery Date. 5.4 CONFIRMATION; ORDERS GREATER THAN FORECAST. Within fifteen (15) days of receipt of any purchase order, PCI shall confirm in writing such order and the Delivery Date therefor. PCI shall use reasonable commercial efforts to supply the quantity of Product ordered, regardless of the quantity forecast by Aviron, subject to the capacity limitations of the Aviron and PCI Production Equipment. In the event that PCI is unable to fill any order, PCI shall so notify Aviron in its written confirmation. 5.5 AMENDMENT OF PURCHASE ORDERS. PCI will use best efforts to accommodate a request to amend a purchase order to increase or decrease the quantity of Product to be delivered. 5.6 CANCELLATIONS. Aviron may cancel any purchase order by providing PCI written notice at least ninety (90) days prior to the confirmed Delivery Date. In the event that Aviron cancels any order for Product, Aviron shall reimburse PCI for non- cancellable direct costs reasonably incurred by PCI in connection with performance of such purchase order up to the time of receipt of such notice. 5.7 SUPPLY COMMITMENTS. Subject to the limitations set forth in Section 5.4, PCI represents and warrants that it has the ability to, and hereby covenants that it will, supply the quantity of Product ordered by Aviron. 5.8 LIMITED WARRANTY. PCI WARRANTS THAT PRODUCT DELIVERED HEREUNDER WILL (i) BE MANUFACTURED BY PCI IN ACCORDANCE WITH cGMP AND OTHER APPLICABLE FEDERAL, STATE AND LOCAL LAWS AND REGULATIONS, INCLUDING BUT NOT LIMITED TO FDA REGULATIONS, (ii) BE MANUFACTURED IN ACCORDANCE WITH THE SPECIFICATIONS AND 5. (iii) CONFORM TO THE APPLICABLE SPECIFICATIONS, AS THEN IN EFFECT, AS OF THE DELIVERY DATE. EXCEPT AS SET FORTH HEREIN, PCI MAKES NO WARRANTIES, EXPRESS OR IMPLIED, CONCERNING THE PRODUCTS, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE. 6. SUPPLY AND PROCESSING OF VACCINE, SYRINGES, HOLDERS AND MATERIALS ----------------------------------------------------------------- 6.1 LICENSE; INVENTIONS. (a) Aviron hereby grants to PCI, during the term of this Agreement, a non-exclusive, non-transferable, royalty-free license during the term of this Agreement to use the data, information and technology provided by Aviron related to the Vaccine for the limited purpose of assisting PCI in carrying out its obligations set forth in this Agreement. (b) PCI agrees that any and all ideas, improvements, inventions and works of authorship conceived, written or first reduced to practice in the performance of this Agreement whether by PCI's employees alone or in conjunction with Aviron, that are related to the Vaccine or [ * ] Production (the "Aviron Inventions") shall be the sole and exclusive property of Aviron and PCI hereby assigns to Aviron all right, title and interest in and to any and all such Aviron Inventions. (c) Aviron agrees that any and all ideas, improvements, inventions and works of authorship conceived, written or first reduced to practice in the performance of this Agreement that are related to [ * ] Production (the "PCI Inventions") shall be the sole and exclusive property of PCI and Aviron assigns all right, title and interest in and to any and all such PCI Inventions. PCI hereby grants to Aviron a non-exclusive, worldwide, royalty-free license to use and practice such PCI Inventions for the manufacture, by or for Aviron of any of Aviron's products. Such license shall survive the termination or expiration of this Agreement. 6.2 SUPPLY OF VACCINE AND SYRINGES. Aviron shall, at Aviron's expense, deliver or cause to be delivered, sufficient quantities of Vaccine and Syringes meeting the Specifications to the Facility such that PCI can fill purchase orders for the Manufacture of the Product submitted pursuant to Section 5.3. 6.3 RISK OF LOSS OF VACCINE AND SYRINGE. PCI shall bear all risk of loss for Vaccine and Syringes delivered to PCI under Section 6.2 which results from PCI's failure to comply with the Specifications or from the negligence or intentional misconduct of PCI or its employees. If, for any purpose under this Agreement, PCI is required to obtain Vaccine or Syringes from Aviron at PCI's expense, Aviron's charges to PCI for such Vaccine or Syringes will be equal to Aviron's direct costs to deliver such Vaccine or Syringes to PCI. 6.4 SUPPLY OF MATERIALS. Unless otherwise notified by Aviron, PCI shall purchase all Materials, including but not limited to those set forth in the Specifications, required to complete the [ * ] Production of the Product. PCI shall provide Aviron with a monthly inventory of all Vaccine, Syringes and Materials. Detailed Material usage reports will be provided to Aviron by PCI each month. In the event Aviron desires to obtain the Materials from sources other than PCI, it shall have the right to do so, at its own expense, provided Aviron notifies PCI ninety [*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. 6. (90) days in advance. In the event Aviron purchases such Materials itself, the price for Product shall be adjusted as set forth in Section 13. 6.5 LABELS AND [ * ] PRODUCTION. (a) Thirty (30) days prior to the intended date of commencement of commercial production, Aviron shall provide PCI with: (i) any particular Specifications it may have with respect to labels and packaging materials and (ii) camera-ready artwork for reproduction on the labels, package inserts and packaging materials. Such information shall include, but need not be limited to, the quality, weight and color of the packaging materials and labels, the type and colors of ink to be used in printing the labels or packaging materials and any special requirements for the labels or packaging for the Product to be delivered to specific countries. The method to assign lot numbers will be set forth in the Specifications. (b) PCI shall reproduce the artwork on the labels, packages inserts and packaging materials and imprint the appropriate lot number on each individual unit and each carton of Product in accordance with the lot numbers designated on the applicable purchase order. PCI shall conduct all [ * ] Production in accordance with the Specifications and the applicable purchase order (to the extent not inconsistent with the Specifications). (c) In the event that Aviron desires to change any label, packaging insert or packaging Material for all or any portion of the Product, Aviron shall supply PCI with new camera-ready artwork and work with PCI to promptly coordinate the use of such new artwork into [ * ] Production process. In such event, Aviron shall purchase from PCI, at a price equal to PCI's cost, all Materials in PCI's inventory made obsolete by such changes. 6.6 [ * ] PRODUCTION OF PRODUCT. (a) PCI shall conduct [ * ] Production of the Vaccine in accordance with the Specifications and applicable federal, state and local laws and regulations including, without limitation, cGMP. PCI shall notify Aviron of any difficulty in meeting Specifications or any deviation therefrom as soon as reasonably possible. PCI shall not conduct [ * ] Production nor Store Materials or Product at any other location other than the Facility without the prior written approval of Aviron. Before, during and after [ * ] Production of each batch of Vaccine, PCI shall monitor the Manufacturing environment and keep such records as all of the foregoing are required by the Specifications and cGMP. Both Parties shall promptly notify the other of any new instructions or specifications required by the FDA or the United States Federal Food, Drug and Cosmetic Act, and of other applicable rules and regulations, and shall confer with each other with respect to the best [*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. 7. means to comply with such requirements and shall [ * ] of implementing such changes on an [ * ] (b) The Parties agree that it is their intention to identify ways in which to enhance efficiencies in the [ * ] Production and the [ * ] Production and so reduce production costs ("Cost Reduction Measures") In the event PCI expends amounts in undertaking Cost Reduction Measures, including, for example, the purchasing of additional production equipment and provided such costs are agreed upon in advance by the parties in writing, Aviron shall reimburse PCI for such amounts. Any additional equipment paid for by Aviron under this Section 6.6(b) shall be deemed Aviron Equipment. 6.7 PRODUCT SPECIFICATIONS; TESTING. (a) The Parties agree and acknowledge that the Specifications will be developed and defined by Aviron after the Effective Date and following validation and qualification, subject to input, review and approval by PCI. Each Party agrees to act in good faith in defining and finalizing the Specifications. Once finalized, the Specifications will be appended to this Agreement as Appendix 3. The Parties further agree and acknowledge that the final piece price to be charged Aviron for the Product under Section 13.1. can be determined only after the final Specifications have been agreed upon. The Parties acknowledge that, once agreed upon, the Specifications set forth in Appendix 3 may need to be refined and modified as the Parties gain experience with [ * ] Production, testing and use of Product. Accordingly, the Parties agree to negotiate in good faith to modify Appendix 3 from time to time as the Parties' experience with Primary and Secondary Production, testing and use of Product warrant; and PCI further agrees that it will facilitate changes to Appendix 3 that are necessary or appropriate in light of FDA or other regulatory requirements. The Parties agree to allocate on an equitable basis any special costs of developing and implementing revised procedures. (b) Product supplied hereunder will conform to the Specifications, and such conformance will be verified in accordance with the testing standards and procedures specified therein. PCI will forward a sample of each batch of Product to Aviron for testing and supply Aviron with a certificate of analysis ("Certificate of Analysis") confirming that such Product meets the Specifications. 6.8 FDA AND REGULATORY SUPPORT. (a) PCI agrees to establish and maintain a Drug Master File ("DMF") in accordance with the requirements of the FDA, as well as any comparable files required by other Agencies, and to provide Aviron with letters of access to the DMF, any other comparable files and documents regarding its [ * ] Production. Aviron shall have sole [*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. 8. responsibility for obtaining from any Agency all permits and/or licenses necessary or required for the sale, marketing or commercialization of Product. Aviron shall be responsible for all other filings necessary for approval and import of Product into countries outside the United States. PCI further agrees to use reasonable commercial efforts to assist Aviron in obtaining any government or Agency approval which may be required for the marketing of Product in any country. Aviron shall provide PCI with written notice of any additional regulatory requirements of countries other than the United States that relate to [ * ] Production of Product. PCI shall use its reasonable commercial efforts to comply with such additional requirements and shall provide Aviron with prompt written notice of whether it is able to do so. PCI will provide Aviron copies of all supporting documentation in PCI's possession required for FDA licensing of the Product. Aviron will hold the FDA and any other Agency license(s) for the Product. (b) Upon request, PCI shall allow the Aviron Area and the Facility to be inspected by FDA or other Agency officials. In the event that the Aviron Area is audited or inspected by an Agency, PCI will provide Aviron with prompt written notice of such audit. PCI will also promptly provide Aviron with copies of any correspondence or reports relating to such audit or inspection. 6.9 cGMP COMPLIANCE AND QA AUDITS. Within ten days of Aviron's written request, PCI shall supply Aviron with copies of PCI's manufacturing records, including its batch records, for the purposes of assuring product quality and compliance with the Specifications. Any found discrepancies, other than discrepancies resulting from directions received from Aviron or its representatives, will be reported to PCI and PCI will within 30 days correct said discrepancies to Aviron's reasonable satisfaction. Failure to do so will give Aviron the right to terminate the Agreement pursuant to Section 10.5. Aviron's failure to exercise its right to audit PCI's Facility will not represent a waiver of any future exercise of this right or of any other rights under this Agreement, nor does it represent acceptance of any conditions past or present that might exist or result from such conditions at the Facility. Aviron acknowledges that all copies of PCI's manufacturing records shall be subject to the confidentiality provisions of Article 12. 6.10 COMPLIANCE WITH LAWS. PCI shall comply with all applicable present and future orders, regulations, requirements and laws of any and all applicable, federal, state, and local authorities and Agencies, including without limitation all laws and regulations of applicable to the transportation, storage, use, handling and disposal of hazardous materials. PCI represents and warrants to Aviron that it has and will maintain during the term of this Agreement all government permits, including without limitation health, safety and environmental permits, necessary for the conduct of the actions and procedures that it undertakes pursuant to this Agreement. 6.11 DOCUMENTATION. PCI shall keep, for a period of [ * ], complete, accurate and authentic accounts, notes, data and records of the work performed [*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. 9. under this Agreement. Each Party shall maintain complete and adequate records pertaining to the methods and Facility used for [ * ] Production, testing, and distribution of Product in accordance with the Specifications, cGMP, Michigan Agreement and other applicable laws and regulations. 6.12 REWORK. PCI shall not rework any batch of Product without Aviron's prior written consent, which consent shall not be unreasonably withheld. 6.13 SAMPLES. PCI shall retain quantities of samples of Product in accordance with cGMP. Within ten (10) days following Aviron's written request, PCI shall provide Aviron, at Aviron's expense, with up to one-half the original amount of the retained samples. 6.14 STORAGE AND HANDLING. PCI shall Store and handle Materials, Syringes, Vaccine and Product as required by the Specifications. 6.15 CORRECTIVE ACTION. In the event any Agency shall request or order, or if Aviron shall determine to undertake, any corrective action with respect to Products supplied hereunder, including any Product recall, customer notice, restriction, change, corrective action or market action, and the cause or basis for such corrective action results from the material breach by PCI of Section 5.8, then PCI shall replace and reship only the lot(s) of Products which are subject to such corrective action. PCI shall pay all costs incurred in replacing such Product, including the Vaccine, Syringes, Materials and shipping costs, subject to the limitations set forth in Section 9.2. Any costs resulting from corrective actions for any other cause, including but not limited to the Specifications or product tampering after the Products have been shipped from PCI's Facility, shall be the sole responsibility of Aviron. Aviron shall promptly notify PCI in writing upon the occurrence of any such corrective action (or, to the extent practicable, not less than ten days prior thereto). 7. DELIVERY AND ACCEPTANCE OF FINISHED PRODUCT ------------------------------------------- 7.1 QUALITY CONTROL SAMPLE OF PRODUCT. Prior to the delivery of any batch of Product, PCI shall provide Aviron with (i) a quality control sample of such batch for the purpose of confirming that such batch meets the Specifications, (ii) a copy of the batch records for such batch, together with written confirmation that such batch records have been reviewed and approved by PCI's quality assurance unit and (iii) a Certificate of Analysis. The quality control sample shall consist of the number of individual Product units specified in the relevant purchase order delivered pursuant to Section 5.3 above. No delivery of Product shall be deemed to have been made until Aviron accepts or is deemed to have accepted the quality-control sample and associated documentation in accordance with the Specifications and Section 7.3. 7.2 DELIVERY OF PRODUCT. All deliveries shall be shipped [ * ], unless otherwise agreed upon by PCI and Aviron in a particular purchase order. [ * ] [*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. 10. shall be responsible for [ * ] and [ * ] and shall [ * ] of [ *] of the Product [ * ] of [ * ] to [ * ]. 7.3 ACCEPTANCE AND REJECTION OF PRODUCT. (a) Aviron may reject any quality control sample or batch delivery which does not conform with the Specifications or with applicable documentation or other requirements. Any such notice of rejection shall be in writing and shall indicate the reasons for such rejection. (b) In order to reject or put on hold delivery of Product based on testing of a quality control sample, Aviron must give written notice to PCI of Aviron's rejection of any delivery within (i) [ * ], or (ii) [ * ] after receipt of the applicable quality control sample, whichever is later (the "Acceptance Period"). If no such notice of rejection/hold is received during such time period, Aviron shall be deemed to have accepted such quality control sample upon the expiration of the Acceptance Period, and PCI shall be authorized to make delivery of the Product. (c) After notice of rejection/hold is given, Aviron shall cooperate with PCI in determining whether rejection is necessary or justified and, in situations in which the type of damage so warrants, provide PCI with the allegedly non-conforming Product for PCI evaluation. PCI will evaluate the cause for such non-compliance. PCI shall notify Aviron as promptly as reasonably possible whether it accepts Aviron's basis for any rejection. If PCI disagrees with Aviron's determination that certain Product does not meet the Specifications, [ * ]. Whether or not PCI accepts Aviron's basis for rejection, promptly on receipt of a notice of rejection/hold of Product, PCI shall use reasonable commercial efforts at Aviron's request to replace such rejected Product. [ * ] shall bear the expenses of such replacement. If [ * ], Aviron guarantees to purchase that Product and any replacement Product which PCI has delivered to Aviron at the price set forth in Section 13.1. [ * ]. 7.4 DESTRUCTION OF PRODUCT. Neither Party may destroy any Product alleged not to meet Specifications until [ * ]. Thereafter, upon Aviron's written request, PCI shall return to Aviron or promptly destroy any rejected Product. The Party determined [ * ] [*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. 11. [ * ] shall bear all costs for such return or destruction. In the event PCI destroys such Product, PCI shall provide Aviron with certification of such destruction. 7.5 REPLACEMENT PRODUCT. In the event that PCI bears responsibility for the failure of Product, promptly following the rejection of any Product, Aviron shall, at PCI's expense, deliver sufficient quantities of Vaccine and Syringes to the Facility in order for PCI to comply with Section 7.3(c). In accordance with the terms of Section 6.6 and 6.7, PCI shall Manufacture enough Product to deliver to Aviron the amount of Product originally ordered for the rejected delivery and shall do so as promptly as technically feasible. 8. REPRESENTATIONS AND WARRANTIES ------------------------------ 8.1 EXISTENCE AND POWER. Each Party hereby represents and warrants to the other Party that such Party (i) is duly organized, validly existing and in good standing under the laws of the state in which it is organized, (ii) 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 (iii) is in compliance with all requirements of applicable law, except to the extent that any noncompliance would not materially adversely affect such party's ability to perform its obligations under the Agreement. 8.2 AUTHORIZATION AND ENFORCEMENT OF OBLIGATIONS. Each Party hereby represents and warrants to the other Party that such Party (i) has the power and authority and the legal right to enter into the Agreement and to perform its obligations hereunder and thereunder and (ii) has taken all necessary action on its part to authorize the execution and delivery of the Agreement and the performance of its obligations hereunder. The 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. 8.3 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 the Agreement have been obtained. 8.4 NO CONFLICT. Each Party hereby represents and warrants to the other Party that the execution and delivery of the Agreement and the performance of such party's obligations hereunder and thereunder (i) does not conflict with or violate any requirement of applicable laws or regulations or any material contractual obligation of such Party and (ii) does not materially conflict with, or constitute a material default or require any consent under, any material contractual obligation of such Party. 8.5 NON-DEBARMENT. PCI represents and warrants that PCI is not and does not, to the best of its knowledge, use in any capacity the services of any person barred by an applicable Agency (including, but not limited to, the FDA) from providing such services. PCI covenants it will not in the performance of its obligations [*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. 12. hereunder use in any capacity the services of any person that it knows is barred by an applicable Agency and will immediately disclose in writing to Aviron promptly, before it becomes aware of any person who is performing services hereunder is so barred or if any action, suit, claim, investigation or legal or administrative proceeding is pending or, to the best of PCI's knowledge, threatened, relating to the debarment of PCI or any person performing services hereunder by any applicable Agency. 9. INDEMNIFICATION --------------- 9.1 INDEMNITY. (a) Except to the extent that claims, suits, losses, damages, costs, fees or expenses arise or result from any negligent or wrongful act or omission of PCI or PCI's breach of Section 5.8, Article 8, or Article 15, Aviron agrees to indemnify, hold harmless and defend PCI and PCI's directors, officers, employees and agents, and the directors, officers, employees and agents of any PCI parent, subsidiary or related company (the "PCI Indemnitees") from and against any and all claims, suits, losses, damages, costs, fees and expenses resulting from or arising out of the development, creation, sale, distribution, possession or use of Product by any person, or asserted by or on behalf of [*] against the PCI Indemnitees, including without limiting the generality of the foregoing any damages, losses or liabilities whatsoever with respect to death or injury to person or damage to property. (b) To the extent that such claims, suits, losses, damages, costs, fees or expenses arise or result from any negligent or wrongful act or omission of PCI or the breach by PCI of Section 5.8, Article 8 or Article 15, PCI agrees to indemnify, hold harmless and defend Aviron and Aviron's directors, officers, employees and agents, and the directors, officers, employees and agents of any Aviron parent, subsidiary or related company (the "Aviron Indemnitees") from and against any and all claims, suits, losses, damages, costs, fees and expenses resulting from or arising out of [ * ], including without limiting the generality of the foregoing any damages, losses or liabilities whatsoever with respect to death or injury to person or damage to property. 9.2 LIMITATION OF LIABILITY. (a) Notwithstanding anything to the contrary in this Agreement, PCI's liability (individually or in the aggregate) under this Agreement or in any manner arising out of this Agreement or its Manufacture, Storage, use or handling of the Product shall be limited as set forth in this Section 9.2(a) and Section 9.2(b). PCI's liability shall not exceed the lesser of (i) the sum of the [*] of this Agreement, plus the [*] during the twelve (12) months immediately preceding the event which resulted in such liability; and (ii) either (A) [*] where the liability results from a claim arising out of or resulting from [*] or a reason other than PCI's negligence in conducting the [*] and (B) [*] where the liability results from a claim arising out of or resulting from PCI's negligence in the conduct of the [*] (including storage of the Product). [*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. 13. (b) In the case where two claims are made, one based upon the [ * ] Production (or upon other than negligence in PCI's conduct of the [ * ] Production) and another based upon PCI's negligence in the conduct of the [ * ] Production, whether contemporaneously or serially, the limitation on aggregate liability under this Agreement shall be the lesser of (i) the sum of the [*] of this Agreement, plus the [*] during the twelve (12) months immediately preceding each of the two events which resulted in such liability; and (ii) [*]. (c) IN NO EVENT SHALL EITHER AVIRON OR PCI BE LIABLE TO THE OTHER FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL LOSS, DAMAGE, COSTS OR EXPENSES OF ANY NATURE WHATSOEVER, INCLUDING, WITHOUT LIMITATION, LOST REVENUES OR PROFITS. 9.3 NOTICE AND PAYMENT. (a) Promptly after acquiring knowledge of any damage, loss, deficiency, liability, encumbrances, penalty, cost, expense, action, suit, investigation, proceeding, assessment, audit, judgment, or claim against which Aviron or PCI must indemnify the other pursuant to Section 9.1 (the "Indemnifying Party"), the Indemnified Party shall give to the Indemnifying Party written notice thereof, specifying the nature of the claim for indemnity (the "Claim Notice"); provided, however, that the delay or failure to give a Claim Notice shall not be a bar to indemnification hereunder, except and to the extent that the indemnifying Party is materially prejudiced by the delay or failure to give such Claim Notice. (b) With respect to any claim, action, suit, investigation, proceedings, demand, assessment or audit brought by a Third Party ("Third Party Matter"), the Indemnifying Party shall have the right, at its own expense, to contest and defend against or attempt to settle or compromise (subject to the limitations set forth below), such Third Party Matter and any damages, losses, deficiencies, liabilities, encumbrances, penalties, costs, expenses and assessments ("Damages") resulting therefrom. If the Indemnifying Party so elects, such defense shall be instituted promptly and the Indemnifying Party shall receive from the Indemnified Party all necessary and reasonable cooperation in said defense. If the [*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. 14. Indemnifying Party is successful in respect of any counterclaim asserted by it in defending a Third Party Matter, any sums recovered shall first be applied to reimburse the Indemnifying Party for its reasonable out- of-pocket expenses in connection therewith, and any sums in excess of such amount shall be paid to the Indemnified Party. (c) In the event that an Indemnifying Party, after written notice from the Indemnified Party, elects not to defend the same or fails to so notify the Indemnified Party within thirty (30) days of the giving of the Claim Notice, the Indemnifying Party shall be deemed to have elected not to defend and if the Indemnified Party elects to contest and defend against such claim, it shall have the right to do so with counsel of its own choosing, at the cost and expense of the Indemnifying Party. (d) Neither the Indemnified Party nor the Indemnifying Party shall have the right to settle, compromise or make payment with respect to any claim, demand, or litigation without the written consent of the other party, except that the Indemnified Party shall have the right to settle, compromise or make payment with respect to any claim, demand, or litigation against it without such consent if it has given a Claim Notice to the Indemnifying Party, and (i) the Indemnifying Party has elected, or shall be deemed to have elected, not to defend the same or (ii) the Indemnifying Party fails to promptly attempt to settle or compromise the claim. 9.4 PCI INSURANCE. Throughout the term of this Agreement and for five (5) years thereafter, PCI shall maintain the following minimum insurance coverage with insurance carriers reasonably acceptable to Aviron: (a) Comprehensive General Liability in the amount of at least five million dollars ($5,000,000) combined single limit, including contractual coverage for bodily injury and property damage, which shall name Aviron as an additional insured and may not be canceled by PCI or its insurer without, ten (10) days prior written notice to Aviron; and (b) Worker's Compensation Insurance to the full extent required by applicable state law. 9.5 AVIRON INSURANCE. Aviron shall purchase and maintain, during the term of this Agreement and for a period of five (5) years thereafter, at its own cost, liability insurance coverage in an amount of at least five million dollars ($5,000,000) and worker's compensation insurance coverage in amounts required pursuant to applicable state laws, from an insurer reasonably acceptable to PCI to cover liabilities which may arise under this Agreement, which insurance shall name PCI as an additional insured and may not be canceled by Aviron or its insurer without ten (10) days prior written notice to PCI. 15. 10. TERM AND TERMINATION -------------------- 10.1 Unless earlier terminated as provided herein, the term of this Agreement is seven (7) years and shall begin on October 31, 1997 and shall continue through October 31, 2004. The term of this Agreement may be extended by the mutual written agreement of the Parties. 10.2 Aviron may terminate this Agreement at any time upon twelve (12) months prior written notice to PCI; provided, however that in the event that Aviron terminates because it desires to undertake [ * ] at Aviron's own facility, Aviron shall provide PCI with twenty-four (24) months prior written notice of termination of this Agreement. 10.3 Any time following September 30, 2002, PCI may deliver to Aviron written notice of PCI's intention to terminate this Agreement and not to renew, such termination to be effective twenty-four (24) months following receipt of such notice. 10.4 Either Party shall have the right to immediately terminate this Agreement if the other Party files a petition in bankruptcy, or enters into an agreement with its creditors, or applies for or consents to the appointment of a receiver or trustee, or makes an assignment for the benefit of creditors, or suffers or permits the entry of an order adjudicating it to be bankrupt or insolvent, provided that such bankruptcy is not discharged within thirty (30) days. 10.5 If either Party materially breaches any of the provisions of this Agreement and such breach is not cured within thirty (30) days after the giving of written notice, the Party claiming the breach shall have the right to terminate this Agreement. 10.6 Either Party may terminate this Agreement upon ninety (90) days written notice and without penalty in the event of failure to obtain FDA approval for the Product in the United States or any license, permit or certificate required by any governmental or regulatory agency is not approved and/or issued by any applicable Agency, provided that such other party may no longer appeal such decision, reapply or otherwise pursue such permit, license or certificate. 10.7 In the event of expiration or termination of this Agreement, (i) Aviron shall pay for all completed Product whether or not Aviron takes delivery of such Product, (ii) Aviron shall bear no responsibility for the payment of any [*] not completed prior to termination of this Agreement, (iii) PCI shall promptly, at Aviron's request and expense, destroy or return to a location to be specified by Aviron, any remaining inventory of Vaccine, Syringes, Materials and Product to Aviron, unless such termination shall have been as a result of termination or a breach of this Agreement by PCI, in which case such Vaccine, Syringes and Materials shall be returned or destroyed at PCI's expense, and Aviron shall reimburse PCI for the cost of all Materials so returned, (iv) each Party shall promptly return all Proprietary Information (as described in Article 12) to the disclosing Party, and (v) Aviron shall remove the Aviron Production Equipment from the Aviron Area in accordance with the Facility Reservation Agreement. If Aviron fails to remove the Aviron Production Equipment and make such repairs, PCI may do so, and Aviron shall, within 10 days after receipt of evidence thereof, reimburse PCI in full for all reasonable expenses incurred by PCI in connection with such removal and restoration. [*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. 16. 10.8 Termination of this Agreement shall not affect any rights or claims of either Party that accrued prior to the date of such termination. The rights and obligations of each of the Parties under the provisions of Sections 6.8, 6.9, 6.11, 6.13, 6.15, 10.7, 10.8, 13.3, and Articles 9, 11 and 12 shall survive the termination or expiration of this Agreement for any reason. 10.9 Upon termination of this Agreement, the Facility Reservation Agreement shall terminate, and the consequences of such termination shall be as set forth in Section 10 of that agreement. 11. DISPUTE RESOLUTION ------------------ 11.1 Any controversy, claim, or dispute (the "Dispute") between the Parties arising out of or relating to this Agreement, or the breach thereof, shall be submitted to the chief executive officer of PCI and the Chief Executive Officer of Aviron for twenty (20) days for resolution. If the Dispute has not been resolved in such period, the Dispute shall be resolved through arbitration before three (3) arbitrators. Such arbitration shall take place in Philadelphia and shall proceed in accordance with the Commercial Arbitration Rules of the American Arbitration Association (Commercial Rules) and the laws of Pennsylvania without regard to the provisions thereof concerning conflict of laws. Within thirty (30) calendar days of either Party making a demand for arbitration, Aviron and PCI shall each select one (1) arbitrator. A third arbitrator shall be selected by the arbitrators selected by the Parties within ninety (90) days of the demand for arbitration. In the event that either Party shall fail to appoint its arbitrator, or the two arbitrators selected by the Parties fail to appoint the third arbitrator, in either case within the prescribed time period, then either Party may apply to the American Arbitration Association for the appointment of such arbitrator. The determination of a majority of the panel of arbitrators shall be the decision of the arbitrators and shall be binding regardless of whether one of the Parties fails or refuses to participate in the arbitration; said determination shall be enforceable by any court of competent jurisdiction. Each Party shall [ * ] for the arbitrator it selects with the cost of the third arbitrator being divided equally between the Parties. All other costs related to the arbitration shall be borne by the Party incurring such costs, unless otherwise agreed to by the Parties. 12. CONFIDENTIALITY --------------- 12.1 DEFINITION. As used in this Agreement, the term "Proprietary Information" shall mean any information, either enabling or disabling, including the terms of this Agreement, any batch record, any purchase order or other commercial relationship between the Parties, know-how, trade secrets, research, data, process, technique, algorithm, program, design, drawing, formula, experimental design or test data relating to any research project, work in process, future development, scientific, manufacturing, marketing, business plan, financial or [*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. 17. personnel matter relating to the disclosing Party (the "Disclosing Party"), its present or future products, sales, suppliers, customers, employees, investors or business, whether in oral, written, graphic or electronic form and whether received from the Disclosing Party or a third party. The term "Proprietary Information" shall include, without limitation, (i) any cost information related to the manufacture of Product, and (iii) the Specifications for Product, each of which has previously been disclosed to PCI. 12.2 OBLIGATION. During the term of this Agreement and for a period of [ * ] thereafter, the receiving Party (the "Receiving Party") shall maintain in confidence all Proprietary Information, as defined in Section 12.1 above, and shall not use, disclose or grant use of such Proprietary Information except as expressly authorized by this Agreement. The Receiving Party may disclose Proprietary Information, as authorized hereunder, only to those employees, agents or consultants of the Receiving Party reasonably requiring access. The Receiving Party shall use the standard of care which is practical to ensure that such employees do not disclose or make any unauthorized use of Proprietary Information. The Receiving Party shall promptly notify the Disclosing Party upon discovery of any unauthorized use of disclosure of Proprietary Information. 12.3 EXCLUSIONS. The term "Proprietary Information" shall not be deemed to include information which the Receiving Party can demonstrate by competent written proof (i) is now, or hereafter becomes, through no act or failure to act on the part of the Receiving Party, generally known or available, (ii) is known by the Receiving Party at the time of receiving such information as evidenced by its records, (iii) is hereafter furnished to the Receiving Party by a third party, as a matter of right and without restriction on disclosure, or (iv) is the subject of a written permission to disclose provided by the Disclosing Party. Further, the obligations of confidentiality under this Article 12 shall not apply to the extent that the Receiving Party is required to disclose Proprietary Information in support of applying for, obtaining or maintaining a product approval or other filings with, by an order or regulation of, an Agency or in the course of litigation or other legal or administrative proceedings, provided that in all cases the Receiving Party shall to the extent permitted give the other Party prompt notice of the pending disclosure and shall cooperate in such other party's attempts, at such other party's sole expense, to seek an order maintaining the confidentiality of the Proprietary Information. 13. FEES & PAYMENT TERMS -------------------- 13.1 PRODUCT PRICING. (a) The definitive piece price per unit of Product shall be comprised of the following components: (i) [ * ]; (ii) [ * ] and (iii) [ * ] [*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. 18. [ * ]. An example of the pricing for 20 million units of Product, incorporating the price components set forth above, is set forth on Appendix 5. In the event Aviron purchases itself any Materials, the Materials Unit Cost attributable to such Materials shall be deducted from the price per unit charged by PCI. The Parties agree that where the number of units manufactured in a twelve (12) month period is less than 5 million, the [ * ] shall be at a rate mutually agreed upon by the Parties at such time. (b) The Parties agree and acknowledge that the [ * ] Rate, the [ * ] and the [ * ] shall remain in effect with respect to all Product ordered and shipped prior to [ * ]. After such date such cost factors are subject to annual upward or downward adjustment in accordance with the Product Price Index for Pharmaceutical preparations, S.I.C. Code Number 2834. (c) The price for Product shall be invoiced to Aviron within [ * ] after completion of the [ * ] of such Product, net [ * ]. In the event Aviron rejects Product pursuant to Section 7.3, any such amount paid by Aviron for such rejected Product shall be credited to Aviron's account immediately. 13.2 All amounts due hereunder shall be paid to PCI in U.S. dollars by check or wire transfer per PCI's instructions. Failure by Aviron to make a payment when due shall be deemed to be a material breach for purposes of Section 10.5. 13.3 PCI shall keep accurate records in sufficient detail to permit the determination of all invoices and fees payable, credits due, and units of Product packaged hereunder and, within ten (10) days following a request by Aviron shall permit either Aviron or its agents, to examine during ordinary business hours such records for the purpose of verifying the correctness of any such invoices, fees, credits and units. 13.4 The cost of employee training on the Parties' Production Equipment, as defined and determined by [ * ], during the validation phase will be charged to [ * ] at a rate of $[ * ] per hour up to a total number of hours to be agreed upon by the Parties. After [ * ] begins, on-going employee training will be at [ * ] expense. 14. GENERAL ------- 14.1 INTERPRETATION. The construction, validity, and performance of this Agreement shall be governed in all respects by the laws of Pennsylvania, exclusive of its conflict-of-law provisions. This Agreement was negotiated by sophisticated parties at arms' length and neither party shall be construed as the drafting party against which the Agreement could be construed. [*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. 19. 14.2 FORCE MAJEURE. Failure or omission by either Party hereto in the performance of any obligation of this Agreement (other than obligations to pay amounts due hereunder) shall not be deemed a breach of this Agreement and shall not create any liability if the same shall arise from any cause or causes beyond the reasonable control of such Party, including, but not limited to, (other than the failure or refusal of the FDA to approve the Product for sale), fire, storm, flood, earthquake, accident, acts of the public enemy, war, rebellion, insurrection, riot, and invasion. In the event of Force Majeure, the Party affected shall promptly notify the other Party, and shall use reasonable commercial efforts to eliminate, cure or overcome such event and to resume performance of its obligation hereunder. Notwithstanding the foregoing, should any event of force majeure as defined above prevent the Parties from performing the Agreement for a period exceeding three (3) months, the non- affected Party shall have the right to terminate this Agreement without further notice. It is expressly agreed by the Parties that strikes, lockouts and other labor problems shall not be deemed incidences of Force Majeure. 14.3 NOTICES. Any notice or consent required to be given by either Party shall be given in writing addressed to the Party for whom it is intended at the address set forth in the preamble to this Agreement, or such other address as such Party may designate in writing, and sent by overnight courier or certified mail, return receipt requested, or confirmed facsimile. Such facsimile to be sent to (215) 281-9190 in the case of PCI and (650) 919-6610 in the case of Aviron. 14.4 WAIVER. The failure on the part of any Party to exercise or enforce any rights conferred upon it hereunder shall not be deemed to be a waiver of any such rights nor operate to bar the exercise or enforcement thereof at any time or times thereafter. 14.5 ASSIGNABILITY. Neither Party may assign this Agreement or any rights granted hereunder in whole or in part (other than a transaction involving or between PCI and Cardinal Health, Inc. or other subsidiaries or divisions of Cardinal Health, Inc., provided such assignee is an Affiliate of Cardinal Health, Inc.) without the prior written consent of the other Party, except either Party may assign this Agreement in whole or in part to one of its Affiliates or to the successor(s) to or assignee(s) of all or substantially all of the part of its business to which this Agreement relates. The Parties agree that any change of ownership or control of either Aviron or PCI shall not affect the Parties' rights and obligations under this Agreement. 14.6 ENTIRE AGREEMENT. This Agreement and the Schedules, Exhibits and Appendices hereto, constitute the entire agreement between the Parties concerning the subject matter hereof and supersede all prior agreements or understandings whether written or oral between the Parties with respect to the subject matter hereof. 14.7 TITLES. The headings appearing at the beginning of the numbered Articles hereof have been inserted for convenience only and do not constitute any part of this Agreement. 20. 14.8 PUBLICITY AND PRESS RELEASES. Except to the extent necessary under applicable laws, each Party agrees that no press releases or other publicity relating to the existence or substance of the matters contained herein will be made without the other Party's prior written approval; provided, however, that any press release containing information released in a prior release approved of by the Parties shall require no additional consent. 14.9 RELATIONSHIP OF THE PARTIES. Notwithstanding any provision hereof, for all purposes of this Agreement each Party shall be and act as an independent contractor and not as partner, joint venture, or agent of the other and shall not bind nor attempt to bind the other to any contract. 14.10 MODIFICATIONS. No changes or modifications or waivers are to be made to this Agreement unless evidenced in writing and signed for and on behalf of both Parties. 14.11 SEVERABILITY. In the event that any provision of this Agreement shall be determined to be illegal or unenforceable, that provision will be limited or eliminated to the minimum extent necessary so that this Agreement shall otherwise remain in full force and effect and enforceable. 15. MICHIGAN LICENSE ---------------- 15.1 PCI accepts: (a) The Vaccine may be used only for the Manufacture of Product; and (b) Except as set forth in this Agreement, PCI shall not provide any Vaccine or derivatives thereof to any third party. PCI shall limit access to the Vaccine supplied by Aviron to those employees reasonably requiring such access for [*], which employees are governed by PCI's customary confidentiality obligations. 15.2 Aviron shall: (a) use every reasonable effort to honor and observe its obligations under the Michigan Agreement and shall not act or fail to act in any way which might jeopardize or cause to be terminated the Michigan Agreement; and, (b) promptly notify PCI of any amendment to the Michigan Agreement that affects PCI's performance under this Agreement; and, (c) make every reasonable effort to notify PCI in writing of the expiration or termination of the Michigan Agreement at least six weeks prior to either event. 15.3 PCI will use every reasonable effort to conduct [*] and to Store the Vaccine and Product in accordance with all applicable government laws and regulations. [*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. 21. 15.4 Aviron, on Michigan's behalf, may request from PCI at reasonable times and in reasonable quantities at a cost equal to PCI's cost for production of Product as it may desire, provided that PCI shall be under no obligation under this sub-clause or otherwise to produce extra batches of Product solely or substantially to meet Michigan's requirements. Any requirements of Michigan shall be supplied from Product being produced for Aviron with Aviron being solely responsible for apportioning such part thereof to Michigan as Aviron sees fit. Aviron shall promptly pay to PCI the difference between the cost of Product supplied to Michigan hereunder and the price of Product as set forth in Section 13.1. 15.5 PCI acknowledges Michigan's warranty disclaimer and limitation of liability contained in the Michigan Agreement but makes no assessment or admission of its validity or reasonableness. Notwithstanding such, PCI will not make any statements, representations or warranties inconsistent with such warranty disclaimer or limitation of liability other than in pursuance or prosecution of its own rights and remedies. 15.6 PCI will indemnify Michigan, its fellows, officers, employees and agents for and against any and all claims, damages, losses and expenses of any nature resulting from, but not limited to, death, personal injury, illness or property damage, arising directly and solely as a result of; (a) any Manufacture, use or other disposition by PCI of the Vaccine or Product; (b) the use by PCI, its agents or employees of Vaccine or Product made or used by PCI; (c) the use, handling, storage or disposal of Vaccine, any derivatives or Product by PCI; or (d) the unauthorized and negligent use by PCI of any know- how, or technical data sub-licensed to Aviron from Michigan (and of which know-how and technical data Aviron has expressly notified PCI as being sub-licensed to Aviron by Michigan) or developed by PCI pursuant to the Manufacture, where but only where such claims, damages, losses and expenses are a direct consequence of the negligence of PCI, its agents or employees. 15.7 PCI shall not use the name of Michigan in publicity or advertising concerning the Product or the Vaccine without the prior written consent of Michigan, such consent not to be unreasonably or arbitrarily withheld nor delayed. Reports in scientific literature and presentations of joint research and development work are not considered publicity for the purpose of this clause. 22. IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their respective duly authorized officers or representatives as of the day and year first above written. PACKAGING COORDINATORS, INC. AVIRON By: /s/ Dan Gerner By: /s/ J. Leighton Read, M.D. ------------------------------- -------------------------------- Name: Dan Gerner Name: J. Leighton Read, M.D. ----------------------------- ------------------------------- Chairman and Title: President Title: Chief Executive Officer ---------------------------- ------------------------------- 23. APPENDIX 1 ---------- Aviron Production Equipment --------------------------- Master Equipment List ID # Equipment Vendor [ * ] [ * ] [ * ] [*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. 24. APPENDIX 2 ---------- PCI Production Equipment ------------------------ ==================================================== Function Manufacturer ---------------------------------------------------- * * [___________] [___________] ==================================================== * [___________] [*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. 25. APPENDIX 3 ---------- Specifications -------------- (INTENTIONALLY BLANK) 26. APPENDIX 4 ---------- Facility Reservation Agreement ------------------------------ See Exhibit 10.17 27. APPENDIX 5 ---------- AVIRON PROJECT PRICING APPENDIX 5 All prices shown are per syringe when packaged two (2) syringes per carton. All production rates are based on an average of [*] syringes per hour. [*] Production------------------ [*] Production labor rate of [*]. PCI and Aviron will develop a [*] labor reporting system. [*] costs will be billed upon [*]. [*] - -------------------
==================================================================================================================================== Target Price Reduction [*] Increase Potential Syringes Potential - ----------------------------------------------------------------------------------------------------------------------------------- [*] Subtract [*] for each [*] decrease in material cost [*] Add [*] for each [*] increase in material cost [*] Subtract [*] for each [*] decrease in material cost [*] Add [*] for each [*] increase in material cost [*] Subtract [*] for each [*] decrease in material cost [*] Add [*] for each [*] increase in material cost [*] Subtract [*] for each [*] decrease in material cost [*] Add [*] for each [*] increase in material cost [*] Subtract [*] for each [*] decrease in material cost [*] Add [*] for each [*] increase in material cost Shift crew size Subtract [*] for each person less than [*] [*] Add [*] for each additional person over [*] for [*] is [*] people - ------------------------------------------------------------------------------------------------------------------------------------ Secondary Total: [*] [*] [*] ==================================================================================================================================== NOTE: REDUCTION/INCREASE POTENTIAL FOR [*] TOTALS SHOW EFFECT OF ALL ITEMS CHANGING. THE LIKELIHOOD OF THIS HAPPENING IS REMOTE. FINAL PRICE IS LIKELY TO BE A BLENDED COMBINATION.
[*]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. 28. -----END PRIVACY-ENHANCED MESSAGE-----