THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED ON EXHIBIT B AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
FACILITIES USE AGREEMENT
THIS AGREEMENT is made and entered into as of this 20th day of
September, 1994, by and between CENTOCOR, INC., a Pennsylvania corporation
("Centocor"), and APOLLON, INC., a Pennsylvania corporation ("Apollon").
W I T N E S S E T H:
WHEREAS, Centocor currently leases from ▇▇▇▇▇ & Associates-256 Great
Valley Parkway (the "Landlord"), pursuant to a lease agreement dated September
28, 1989, with Additional Articles 33 through 39 (collectively, the "Lease")
property (the "Property") located at 240-258 Great Valley Parkway, ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and the building and improvements thereon
(the "Building");
WHEREAS, the Building contains, among other things, facilities which
are suitable for use as a biopharmaceutical manufacturing facility;
WHEREAS, Apollon desires to have access to a biopharmaceutical
manufacturing facility to develop and manufacture nucleic acid-based product
candidates and genetic vaccine product candidates and Centocor is willing to
improve and upgrade a portion of its existing manufacturing facilities within
the Building to specifications suitable for Apollon's needs; and
WHEREAS, Centocor and Apollon desire to enter into this Agreement as
hereinafter set forth.
NOW THEREFORE, Centocor and Apollon, intending to be legally bound
hereby, agree as follows:
1. Premises and Use.
(a) Centocor hereby grants Apollon and its employees and
agents an irrevocable license (the "License") to use and occupy that portion of
the Building consisting of 3,100 square feet outlined on Exhibit A, attached
hereto (other than that portion which shall constitute Rooms 1059F, 1059G,
1059H, 1059I and 1059J as oulined on Exhibit A) (the "Facility"), together with
the right to use the passageways, halls, lobbies, elevators, entranceways,
parking lots, other common areas, restrooms and vestibules of the Building and
the Property.
(b) The Facility shall be used by Apollon for the development
and manufacture of nucleic acid-based product candidates and genetic vaccine
product candidates and related uses.
(c) Except as described in the remainder of this Subparagraph
(c), the License shall be exclusive as to all parties, including Centocor.
Subject to the remainder of this Subparagraph (c), Centocor shall have the right
to use, on a co-exclusive basis with Apollon, throughout the Initial Term
(defined below) of this Agreement and all extensions or renewals thereof, that
portion of the Facility which shall constitute Rooms 1059, 1059C, 1059D, 1059E,
1059K (including the contiguous Air Lock) and 1059L, as outlined on Exhibit A
attached hereto (the "Shared Space"). Notwithstanding anything to the contrary
contained herein or in the Standard Operating Procedures (defined below),
Centocor shall not, in exercising its rights under this Paragraph 1 or
otherwise, interfere with or obstruct Apollon's use of the Facility. Centocor
shall, at all times, provide Apollon with sufficient access to the Facility,
including the Shared Space, to enable Apollon to produce and manufacture in the
Facility nucleic acid-based product candidates and genetic vaccine product
candidates in such quantities and at such times as Apollon shall deem necessary
in its sole discretion.
(d) Each of Centocor and Apollon shall adhere at all times in
its use and occupancy of the Facility to the existing Standard Operating
Procedures with respect to the Facility (or such other Standard Operating
Procedures as the parties may agree upon from time to time), so that each party
shall be able to manufacture its product candidates in accordance with Good
Manufacturing Practices.
2. Term.
The term of this Agreement (the "Initial Term") shall, subject
to the terms, conditions and limitations of this Agreement, commence on the
later to occur of (i) the date Apollon may fully and legally use and occupy the
Facility; (ii) the date hereof; and (iii) ten (10) days after written notice by
Centocor of full completion (as determined in the sole discretion of Apollon) of
certain improvements and upgrades to the Facility (the "Improvements") as more
fully described in Exhibit B, attached hereto and made a part hereof (such date
being hereinafter referred to as the "Commencement Date"), and shall expire two
(2) years following the date Apollon shall successfully develop and manufacture
in the Facility its first GMP lot of a genetic vaccine product candidate for use
in connection with human clinical trials, as such date is determined by Apollon
(the "Product Completion Date"). In no event shall the term of this Agreement
extend beyond the term of the Lease.
2
3. Consideration.
In consideration of the grant of the License and the services
to be rendered by Centocor to Apollon pursuant to this Agreement, Apollon shall
pay to Centocor an aggregate amount of $1,000,000, payable in two installments
(the "Consideration"). On the Commencement Date, Apollon shall pay to Centocor,
at Apollon's sole option, either $500,000 by good check or 200,000 shares of
Apollon's Series B Convertible Preferred Stock. On the Product Completion Date,
Apollon shall pay to Centocor, at Apollon's sole option, either an additional
$500,000 or 200,000 shares of Apollon's Series B Convertible Preferred Stock.
The issuance of any shares of Series B Convertible Preferred Stock by Apollon to
Centocor shall be in accordance with and subject to the terms and conditions of
the Stock Purchase Agreement entered into between Apollon and Centocor dated as
of the date hereof (the "Stock Purchase Agreement").
4. Expenses, Taxes, Utilities and Other Charges.
Centocor shall be responsible for and shall pay all costs,
expenses, charges and obligations of every kind relating directly or indirectly
in any way, foreseen or unforeseen, to Apollon's use, occupancy and possession
of the Facility or to the Building or the Property including, but not limited
to, all charges for utilities, repair costs, taxes of whatever kind or nature,
and operating expenses relating to the Building, the Facility and the Property.
5. Consent.
Centocor represents and warrants that no consent,
authorization or approval of any other person, including without limitation the
Landlord, is required or necessary to enable Centocor to execute, deliver and
perform this Agreement.
6. Repairs and Maintenance.
Centocor, at its sole cost and expense, shall make all repairs
and replacements to the Facility, the Building and the Property and shall
maintain the Facility, the Building and the Property in good order and condition
so that Apollon can develop and manufacture its desired quantities of nucleic
acid-based product candidates and genetic vaccine product candidates. If
Centocor fails to perform its obligations under this ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇ shall
have the right to make such repairs or replacements and to maintain the Facility
and deduct any and all costs or expenses relating thereto from the
Consideration.
3
7. Assignment and Subletting.
Neither party may assign or delegate any of its rights or
obligations hereunder (whether voluntarily or by operation of law) without the
prior written consent of the other. Without limiting the generality of the
foregoing, Centocor shall not (i) grant any other person a license or other
right to use or occupy the Facility or any portion thereof, (ii) sublet the
Facility or any portion thereof, or (iii) enter into any sublease for any other
portion of the Building or enter into any other agreement if such sublease or
agreement would interfere or conflict with or otherwise affect Apollon's right
to use the Facility hereunder without the prior written consent of Apollon.
8. Damage or Destruction; Condemnation.
If the Facility or the Building or the Property shall be
damaged or destroyed by fire or other casualty or the Facility or the Building
or the Property is wholly or partially condemned, at Apollon's option, this
Agreement may be immediately terminated and to the extent Apollon has paid any
Consideration, Apollon shall receive an equitable refund of such Consideration,
and Apollon shall have no further obligations hereunder. If this Agreement is
not terminated, to the extent and for the time the Facility or the Building or
the Property, or a portion thereof, are thereby rendered wholly or partly
untenantable so that Tenant's permitted use of the Facility is diminished, the
Consideration shall be proportionally reduced.
9. Indemnity.
(a) Apollon shall indemnify, defend and hold Centocor harmless
from any claim, loss, damage, liability or expense (including, but not limited
to, reasonable legal fees and disbursements) (collectively "Losses") arising out
of or otherwise related to Apollon's negligence or willful misconduct or the
untruth, inaccuracy or breach of any representation, warranty, covenant or
agreement of Apollon contained herein, except to the extent such Losses are the
result of Centocor's or its agents' or employees' negligence or willful
misconduct or breach of any covenant, representation or warranty of Centocor
contained in this Agreement.
(b) Centocor shall indemnify, defend and hold Apollon harmless
from any Losses arising out of or otherwise related to Centocor's negligence or
willful misconduct or the untruth, inaccuracy or breach of any representation,
warranty, covenant or agreement of Centocor contained herein, except to the
extent such Losses are the result of Apollon's or its agents' or employees'
negligence or willful misconduct or breach of any
4
covenant, representation or warranty of Apollon contained in this Agreement.
10. Apollon Right to Cure Centocor's Default.
If Centocor defaults under the terms of this Agreement or the
Lease, then Apollon may, but shall not be required to, cure such default and
deduct and setoff such amount from the Consideration.
11. Insurance.
(a) Apollon shall maintain in full force and effect, at its
own expense, commercial general liability insurance naming Centocor as an
additional insured against claims for bodily injury, death or property damage in
amounts not less than $1,000,000. At or prior to the Commencement Date, Apollon
shall deliver the policy or policies of such insurance, or certificates thereof,
to Centocor and shall deliver to Centocor renewals thereof at least fifteen (15)
days prior to each expiration. Said policy or policies of insurance or
certificates thereof shall have attached thereto an endorsement that such policy
shall not be canceled without at least thirty (30) days' prior written notice to
Centocor.
(b) Centocor shall, during the term of this Agreement,
maintain fire and casualty insurance with respect to the Facility and the
Building against loss or damage and other risks as are customarily covered, with
extended coverage, for the full replacement value of the Building. At or prior
to the Commencement Date, Centocor shall deliver a certificate evidencing such
policy to Apollon, which certificate shall provide that the policy shall not be
cancelled, modified or renewed without at least thirty (30) days' prior written
notice to Apollon.
(c) Notwithstanding any provision to the contrary contained in
this Agreement, any property insurance policies obtained by the parties hereto
that relate to the Property, the Building or the Facility shall contain a waiver
by the insurer of all rights of subrogation against the other party.
Accordingly, each party hereto waives and releases any and every claim which
arises or which may arise in its favor and against the other party and its
directors, officers, employees and agents hereto during the term of this
Agreement, or any extension or renewal thereof, for any and all loss of, or
damage to its property located in or upon or constituting a part of the
Facility, the Building or the Property, to the extent such loss or damage is
covered by a policy of insurance carried by such party or that such party is
required to carry under the terms of this Agreement.
5
12. No Default.
Centocor represents, warrants to and covenants with Apollon
that (i) Centocor is not currently in default under the Lease and no occurrence
or event exists that with the passage of time or the giving of notice, or both,
could become a default under the Lease; (ii) the Lease is in full force and
effect and Centocor shall keep the Lease in full force and effect during the
Initial Term of this Agreement and all extensions or renewals thereof; (iii)
Centocor has delivered to Apollon a true and correct copy of the Lease with all
riders and amendments attached thereto; and (iv) Centocor shall not exercise any
right to terminate the Lease.
13. Environmental.
(a) Centocor hereby represents and warrants that the Facility,
the Building and the Property do not contain nor is there stored therein or
thereon, any hazardous, toxic or polluting substance or waste in violation of,
nor has Centocor received any notice of violation of, any federal, state or
local environmental law, regulation, order or ordinance. In addition, there are
no storage tanks, nor asbestos containing materials, nor polychlorinated
biphenyl containing equipment, nor urea formaldehyde foam insulation, nor any
other chemical, material or substance, exposure to which is prohibited, limited
or regulated by a federal, state or local governmental agency, authority or body
at, in or about the Facility, the Building or the Property.
(b) Centocor does hereby agree to indemnify, defend with
counsel acceptable to Apollon, and save harmless Apollon from all losses, costs,
damages, expenses, demands, liabilities, obligations and rights or causes of
action, including but not limited to governmental action, that is incurred by or
asserted against Apollon or the Facility, the Building or the Property as a
result of the presence of hazardous substances at, on, or under the Facility,
the Building or the Property or the release of hazardous substances from the
Facility, the Building or the Property, the Building or the Property prior to
the date of this Agreement, or, if not caused by Apollon, after the date of this
Agreement.
14. Americans with Disabilities Act.
Centocor represents, warrants and covenants that:
(a) It shall perform all alterations and/or new construction
(as those terms are defined under the Americans With Disabilities Act ("ADA"))
in or about the Building, and in the Facility, in compliance with the applicable
provisions of the ADA and with all other applicable statutes, rules, regulations
and
6
ordinances relating to handicapped accessibility, including, but not limited to,
Pennsylvania's Universal Accessibility Act; and
(b) Centocor hereby agrees to indemnify, defend with counsel
acceptable to Apollon, and hold Apollon harmless from and against any and all
damages, losses, costs and expenses arising from or in connection with any
failure of the Building, the Property or the Facility to comply with the ADA.
15. Termination; Renewal.
(a) Apollon may terminate this Agreement at any time upon
thirty (30) days' prior written notice to Centocor and thereafter the
Consideration shall be equitably reduced. In the absence of notice from Apollon
at the end of the Initial Term hereof, this Agreement shall automatically renew,
upon the same terms and conditions contained herein except there shall be no
additional consideration payable by Apollon, for a further period of one (1)
year and so on from year to year unless notice of termination has been given by
Apollon as provided above or unless written notice of termination shall have
been given by Centocor to Apollon at least ninety (90) days' prior to the end of
any term hereof.
(b) Apollon shall have the right to terminate this Agreement
immediately upon written notice to Centocor in the event (i) Centocor shall
consolidate or merge with or into any other person or entity (other than a
consolidation or merger with a subsidiary of Centocor in which Centocor is the
continuing corporation), (ii) Centocor shall sell, lease, transfer or convey all
or substantially all of its property or assets, or (ii) any person or group
shall acquire securities of Centocor representing 30% or more of the combined
voting power of Centocor's then outstanding securities having power to vote in
the election of directors.
(c) In the event of a breach by Centocor of any material
representation, covenant or other agreement contained herein, including without
limitation any representation, covenant or agreement contained in Paragraphs
1(c), 5, 7, 12, 13 or 15(b), Apollon shall be entitled to terminate this
Agreement and Centocor shall promptly rebate to Apollon an equitable portion of
the Consideration paid by Apollon.
16. Services.
Centocor shall provide, or cause to be provided, all customary
services to the Facility, at Centocor's expense, including, but not limited to,
heating, air-conditioning, electric, water, telephone, janitorial service and
trash removal, and snow and ice removal, all in suitable amounts for the
7
comfortable use of the Facility for production of nucleic acid-based product
candidates and genetic vaccine product candidates. If the services contemplated
under this Paragraph 16 are interrupted for a period of time greater than three
(3) days, the Consideration shall be equitably reduced.
17. Rebate of Consideration.
Whenever Apollon shall be entitled, whether pursuant to any
provision of this Agreement or otherwise, to reduce or prorate the Consideration
or to deduct or setoff any amount from the Consideration, and all of the
Consideration has previously been paid to Centocor or the amount of the
reduction, proration, deduction or setoff exceeds that portion of the
Consideration that has yet to be paid to Centocor, Centocor shall, upon written
request from Apollon, promptly rebate an equitable portion of any Consideration
previously paid by Apollon.
18. Equipment; Trade Fixtures.
Any and all equipment, machinery or trade fixtures installed
or brought onto the Facility by Apollon shall remain the property of Apollon and
may be removed by Apollon at the expiration or early termination of this
Agreement.
19. Confidentiality.
Centocor agrees and acknowledges that any information it
receives, obtains or is privy to with respect to the development and manufacture
of Apollon's nucleic acid-based product candidates or genetic vaccine product
candidates or any other projects, research or experiments of Apollon is
confidential and Centocor shall not disclose such information and shall direct
and prevent its employees, officers and agents from disclosing such information
to any other person.
20. No Implied License.
Nothing contained in this Agreement shall be construed so as
to grant to Centocor any right or license with respect to any genetic vaccine
product candidate or nucleic acid-based product candidate of Apollon, whether or
not developed or manufactured at the Facility, or to any other patent, trademark
or other intellectual property right of Apollon.
21. Broker.
Each of Centocor and Apollon represents and warrants that it
has not employed any broker or agent as its representative in the negotiation
for the obtaining of this
8
Agreement, and agrees to defend, indemnify and hold the other party harmless
from any and all cost or liability for compensation claimed by any broker or
agent with whom it has dealt.
22. Further Assurances; Cooperation.
From and after the date hereof, each party agrees to do, make,
execute, acknowledge and deliver such other documents as the other may
reasonably require in connection with this Agreement, and to otherwise assist
and cooperate fully with the other in order to enable the other to fulfill its
obligations hereunder. Without limiting the generality of the foregoing,
Centocor shall make the Facility and its documentation with respect thereto
available to any inspectors or other agents or employees of the Food and Drug
Administration ("FDA"), and shall otherwise cooperate with Apollon, in
connection with Apollon's efforts to obtain FDA approval for commercial sale of
any nucleic acid-based product candidate or genetic vaccine product candidate
manufactured at the Facility.
23. Disclaimers.
Nothing in this Agreement shall constitute or be construed so
as to constitute or tend to establish a partnership, joint venture or agency
relationship between Centocor and Apollon for any purpose whatsoever. Neither
party hereto, in the name of or on behalf of the other party hereto, shall make,
undertake or accept any promises, warranties, guarantees, or representations of
any kind or participate in the negotiation or conclusion of any contracts or
agreements, and, neither party shall be bound by or liable to any third party
for any act or omission of the other party hereto or for any obligations of debt
incurred by such other party hereto.
24. Notices.
Any notice or demand required or permitted by law or by way of
this Agreement shall be in writing. All notices or demands shall be deemed to
have been given when served personally or when sent by certified or registered
mail, return receipt requested addressed as follows:
With respect to notices and payments intended for Centocor:
Centocor, Inc.
▇▇▇-▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Great Valley Corporate Center
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
9
With respect to notices and payments intended for Apollon:
Apollon, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
25. Entire Agreement.
This Agreement is the entire agreement between the parties
hereto and there are no collateral or oral agreements with respect to the
Facility except for the Stock Purchase Agreement. Neither party has made or is
relying upon any representation, warranty or agreement except as expressly
provided herein or therein. This Agreement may not be modified or amended in any
manner except by an instrument in writing executed by both parties.
26. Time of the Essence.
All times, wherever specified herein for the performance by
Centocor or Apollon of their respective obligations hereunder, are of the
essence of this Agreement.
27. Successors and Assigns.
All terms and conditions contained in this Agreement shall
apply to and be binding upon Centocor and Apollon and their respective
successors and assigns.
28. Governing Law.
This Agreement shall be construed under the laws of the
Commonwealth of Pennsylvania without giving effect to the choice of law rules
thereof.
29. Survival.
The representations and warranties and the indemnities given
by Centocor under this Agreement shall survive termination or expiration of this
Agreement.
10
IN WITNESS WHEREOF, Centocor and Apollon have entered into
this Agreement as of the day and year first above written.
CENTOCOR:
Centocor, Inc., a
Pennsylvania corporation
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
APOLLON:
Apollon, Inc., a
Pennsylvania corporation
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
President
EXHIBIT B
Apollon Occupancy in Centocor Pilot Facility
Specifications
(August 10, 1994)
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