EXHIBIT 10.89
DISTRIBUTION AND LICENSE AGREEMENT
This DISTRIBUTION AND LICENSE AGREEMENT ("Agreement"), dated as of August
---------
31, 2001 ("Effective Date") is entered into by and between ▇▇▇▇▇▇ Healthcare
--------------
Corporation, a Delaware corporation having its principal place of business at
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Baxter"), and Nexell of
------
California, Inc., a Delaware corporation having its principal place of business
at Nine ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Nexell").
------
RECITALS
A. Nexell has certain rights in and to Products (as hereafter defined) and the
Licensed Intellectual Property (as hereafter defined) that are used in the ex
vivo cell therapies business.
▇. ▇▇▇▇▇▇ desires rights in and to such Products and Licensed Intellectual
Property in order to make, have made, use, import, distribute and sell such
Products in the Territory.
C. Nexell has agreed to appoint ▇▇▇▇▇▇ as its exclusive distributor for the
Products and to license to Baxter certain rights in and to the Products and
Licensed Intellectual Property for the purposes set forth in this Agreement,
under the terms and conditions set forth in this Agreement.
D. As an integral part of this Agreement, Nexell has granted to Baxter certain
rights of first offer with respect to Future Opportunities (as hereafter
defined), all as more fully described in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, Baxter and Nexell hereby agree as follows:
1. Definitions. As used herein, the following capitalized terms shall have the
following meanings:
1.1 "Act" shall mean the Federal Food, Drug and Cosmetic Act, as may be
---
amended from time to time.
1.2 "Affiliate" of a party shall mean any entity (A) which directly or
---------
indirectly through one or more intermediaries Controls, is Controlled
by, or is under common Control with, the party or (B) fifty percent
(50%) or more of the voting capital stock (or in the case of an entity
which is not a corporation, fifty percent (50%) or more of the equity
interest) of which is beneficially owned or held by a party or any of
such party's Subsidiaries. The term "Control" means the possession,
directly or indirectly, of the power to direct or cause the direction
of the management policies of an entity (other than a natural person),
whether through the ownership of voting capital stock, by contract or
otherwise. For the avoidance of doubt, Nexell and its Affiliates shall
not be considered Affiliates of Baxter.
1.3 "Asset Purchase Agreement" shall mean the Asset Purchase Agreement
------------------------
dated as of August 3, 2001 by and among Baxter, Nexell and Nexell
Therapeutics Inc.
1.4 "FDA" shall mean the United States Food and Drug Administration.
---
1.5 "Future Opportunity" shall have the meaning set forth in Section 3.
------------------
1.6 "License" shall have the meaning set forth in Section 2.
-------
1.7 "Licensed Intellectual Property" shall mean the Licensed Patents, the
------------------------------
Licensed Cell Lines (as so identified on Schedule 1.7), and any
------------
copyrights or copyrightable works, all as set forth on Schedule 1.7,
------------
and any non-patented and non-patentable technical information,
specifications, inventions, processes and formulations, discoveries,
trade secrets, know-how and technical data, and any other protectable
property rights that are related thereto, that Nexell owns or
otherwise has rights in or to, anywhere in the Territory.
1.8 "Licensed Patents" shall mean the patents and patent applications,
----------------
including any continuations, continuations-in-part, re-examinations,
patents by addition, Supplemental Protection Certificates, patent term
extensions, divisions, renewals, reissues and extensions thereof as
set forth on Schedule 1.8.
------------
1.9 "Licensed Trademarks" shall mean the trademarks, trade names, service
-------------------
marks, domain names, trade dress, logos and other similar designations
set forth on Schedule 1.9.
------------
1.10 "Manufacturing Facility" shall mean any production site selected by
----------------------
Baxter for manufacture of the Products.
1.11 "Net Sales" shall mean the actual invoiced amounts attributable to
---------
Products that are received by Baxter (or an Affiliate of Baxter) from
the first third party trade purchaser, less, whether or not such
costs are invoiced separately, (i) amounts refunded or credits for
Products which were rejected, spoiled, damaged, out-dated or
returned, (ii) freight, shipment and insurance costs incurred in
transporting Products, (iii) quantity, trade, cash and other
discounts, rebates (including pursuant to governmental regulation),
charge-backs, retroactive price reductions, credits or allowances
allowed or taken, and (iv) Taxes, tariffs, customs duties and
surcharges and other governmental charges incurred in connection with
the sale, exportation or importation of the Products. The transfer of
a Product by Baxter (or an Affiliate of Baxter) to another Affiliate
of Baxter (or to Baxter) shall not be considered a sale; in such
cases, Net Sales shall be determined based on the invoiced sales
price by such Affiliate (or Baxter) to the first third party trade
purchaser. In no event shall any amounts paid to Baxter or its
Affiliates by Nexell or its Affiliates be considered Net Sales. The
amount of Net Sales for any period shall be determined on the basis
of sales recorded in the ordinary course on the books and records of
Baxter (or ▇▇▇▇▇▇'▇ Affiliates) during such period in accordance with
GAAP and past practices.
2
1.12 "New Offer" shall have the meaning set forth in Section 3.
---------
1.13 "Non-Compete Agreement" shall mean the Non-Competition and
---------------------
Confidentiality Agreement, by and among Baxter, Nexell, and VIMRx
Pharmaceuticals Inc., dated as of December 17, 1997, as amended.
1.14 "Product Categories" shall mean the categories of Products set
------------------
forth in Schedule 1.15.
-------------
1.15 "Products" shall mean systems for the ex vivo selection of a desired
--------
human, nucleated cell type using a biological component, such as an
antibody or modified antibody, a lectin, or a ligand to selectively
and specifically bind to a particular molecule on the surface of the
cells to be selected so as to confer specificity or selectivity for
such cells in the cell selection process, or for genetic alteration,
modification, activation and/or expansion in combination with such
selection. The current Products are set forth in Schedule 1.15.
-------------
1.16 "Regulatory Files" shall mean the regulatory files that relate to
----------------
the Products which were sold to Baxter pursuant to the Asset
Purchase Agreement, as set forth in Schedule 1.16.
-------------
1.17 "Sublicenses" shall mean the sublicense agreements set forth on
-----------
Schedule 1.17.
-------------
1.18 "Taxes" shall mean all taxes, including all federal, state, local,
-----
foreign and other income, franchise, sales, use, license, excise,
employment, property, payroll, stamp, withholding, environmental,
alternative or add-on minimum, ad valorem, value-added, VAT,
transfer, stamp and other taxes, assessments, charges, duties, fees,
levies or other governmental charges of any kind whatsoever, and all
estimated taxes, deficiency assessments, additions to tax, penalties
and interest, and any contractual or other obligation to indemnify
or reimburse any person with respect to any such assessment.
1.19 "Term" shall mean the Initial Term and any Renewal Term.
----
1.20 "Territory" shall mean worldwide.
---------
2. License. Nexell hereby grants to Baxter: (i) an exclusive (even as to
Nexell), worldwide license under the Licensed Intellectual Property to market
and sell the Products, and any components thereof; (ii) an exclusive (except as
to Nexell), worldwide license under the Licensed Intellectual Property to make,
have made and import the Products, and any components thereof; (iii) an
exclusive (even as to Nexell) worldwide license under the Licensed Intellectual
Property to use the Products and components solely for the distribution purpose
set forth in Section 5; and (iv) an exclusive (except as to Nexell), worldwide
license under the Licensed Intellectual Property for internal research and
development purposes (including clinical trials) to improve Products for Ex Vivo
Cell Processing (as such term is defined in the Non-Compete Agreement) (the
"License"). The foregoing license rights shall not include the right for Baxter
-------
to use the Licensed Intellectual Property to practice Ex Vivo Cell Processing
commercially. Either party shall have the right to sublicense its rights
described in this Section 2, provided such party
3
has obtained the other party's prior written consent (such consent not to be
unreasonably withheld or delayed) and any such sublicensee agrees to be bound by
the terms and conditions of this Agreement and the Non-Compete Agreement (the
terms of which shall be binding upon any sublicensee in the same manner and to
the same extent such terms bind the applicable licensor).
3. Right of First Offer. Baxter shall have a right of first offer with respect
to acquiring marketing, manufacturing, sales and distribution rights, and use
rights in connection therewith, for other systems developed or acquired by
Nexell which compete with the Products or which are useful for the selection or
isolation of cells using ligands which bind to such cells, or which are useful
for the culturing of such isolated or separated cells ("Future Opportunity"), in
------------------
the event Nexell decides, in its sole discretion, to make a Future Opportunity
available to a third party. After Nexell notifies Baxter of a Future
Opportunity, Baxter will have sixty (60) days to respond to Nexell and to
negotiate the material terms and conditions of a license, with the right to
grant sublicenses, to make, have made, market, sell, distribute, import and use
such Future Opportunity prior to Nexell discussing the Future Opportunity with
any and all third parties. The terms and conditions of such license with regard
to any such Future Opportunity shall be negotiated by Nexell and Baxter,
bargaining in good faith, and documented in a written agreement, signed by
authorized representatives of both parties. If, after notice to Baxter and
expiration of sixty (60) days without completed negotiation of the material
terms of an agreement for a license, with the right to grant sublicenses, to
make, have made, market, sell, distribute, import and use such Future
Opportunity, Nexell desires to enter into an agreement on a Future Opportunity
with a third party on terms or conditions that are less favorable to Nexell than
the terms and conditions offered by or to Baxter in connection with ▇▇▇▇▇▇'▇
right of first offer (a "New Offer"), then Nexell must give Baxter notice and an
---------
additional thirty (30) days to respond to the offer on substantially the same
terms and conditions as those of the New Offer.
4. Baxter Improvements. Any and all line extensions, modifications,
enhancements or replacements to the Products developed, generated or produced by
or on behalf of Baxter shall be ▇▇▇▇▇▇'▇ sole and exclusive property.
5. Appointment; Distribution. Nexell hereby appoints ▇▇▇▇▇▇ as its exclusive
worldwide marketing, sales and distribution entity for the Products (or any
components thereof) anywhere in the Territory. Baxter accepts such an
appointment. In connection therewith, Baxter shall market, distribute and sell
the Products in the Territory; provided, however, that Baxter shall not be held
-------- -------
to "best efforts" as construed by judicial precedent under the Uniform
Commercial Code, but rather shall be required to use commercially reasonable
marketing, distribution and sales efforts which are consistent with its efforts
for products of a comparable marketing opportunity. To that effect, Baxter shall
maintain and utilize a competent and adequate staff, organization and facilities
to satisfy its obligations under this Agreement. If Baxter fails to use such
efforts as described herein with regard to any Product Category(ies) in any
country within the Territory, Nexell shall provide notice to Baxter of such
failure and allow Baxter the opportunity to cure such failure within thirty (30)
days after such notice or for such longer period as may be reasonably necessary
to cure such failure provided that Baxter is diligently proceeding in good faith
to cure such failure (the "Cure Period"). If Baxter does not cure such failure
within the Cure Period, Nexell's sole and exclusive remedy for such failure
shall be to terminate ▇▇▇▇▇▇'▇ exclusive distributorship with regard to such
affected Product Category(ies) within such country, at which time Baxter shall
become a non-exclusive worldwide marketing, sales and distribution
4
entity for such Product Category(ies) in such country. For the avoidance of
doubt, it is understood that Baxter shall not be liable for any monetary damages
or any other liability or obligation with respect to any such failure under this
Section 5.
6. Term. The term of this Agreement shall commence upon the Effective Date and
continue thereafter for a period of ten (10) years ("Initial Term"). This
------------
Agreement shall automatically renew for successive periods of five (5) years
(each a "Renewal Term") under the same terms and conditions set forth herein,
------------
unless Baxter, at least sixty (60) days prior to the expiration of the Initial
Term or then-current Renewal Term, elects to:
6.1 terminate this Agreement; or
6.2 provide Nexell notice that it desires to be a non-exclusive
distribution entity rather than an exclusive distribution entity with
regard to any or all of the Product Categories in any countries in the
Territory (in which case the Agreement shall renew under the terms of
such modified distribution license).
7. Royalties; Reports; Payment of Royalties.
7.1 Royalties. For all Products sold by Baxter or any Affiliate of Baxter
---------
during the Initial Term, or during any Renewal Term for which Baxter
is the exclusive distributor, Baxter will pay to Nexell an earned
royalty of two percent (2%) of the Net Sales of such Products;
provided, however, that Baxter shall only have an obligation to pay
-------- -------
such royalties for those Products set forth on Schedule 1.15 or that
-------------
use the Licensed Patents, the Licensed Cell Lines or the Licensed
Trademarks. For all Products sold by Baxter or any Affiliate of Baxter
during any Renewal Term for which Baxter is a non-exclusive
distributor, Baxter will pay to Nexell an earned royalty of one
percent (1%) of the Net Sales of such Products; provided, however,
-------- -------
that Baxter shall only have an obligation to pay such royalties for
those Products set forth on Schedule 1.15 or that use the Licensed
-------------
Patents, the Licensed Cell Lines or the Licensed Trademarks.
7.2 Reports.
-------
A. Quarterly Reports. Baxter agrees to make written reports to
-----------------
Nexell quarterly, within sixty (60) days following the end of
each calendar quarter during the Term, identifying in each such
report ▇▇▇▇▇▇'▇ worldwide Net Sales of Products during the
preceding calendar quarter and the amount of royalty due.
Calendar quarters shall begin on January 1, April 1, July 1, and
October 1 of each year. The first such report shall include all
such sales granted between the Effective Date and the end of the
quarter that follows the Effective Date.
B. Final Report. Baxter agrees to make a last written report to
------------
Nexell within sixty (60) days after the Term for worldwide Net
Sales of Products by Baxter upon which royalties are payable
hereunder but which were not previously reported. The obligation
to make reports and pay royalties shall terminate upon
termination of this Agreement, except that royalties
5
accrued but not paid prior to such termination shall be payable
with the last written report of this Section 7.2B.
C. Audit. During the Term and for one (1) year thereafter, Baxter
-----
agrees to keep records of all worldwide Net Sales of Products by
Baxter in sufficient detail to enable the royalties paid
hereunder to be determined. Nexell may audit ▇▇▇▇▇▇'▇ books and
records of the other for the purpose of determining compliance
with the terms of this Section 7. Nexell may use independent
outside auditors (who may participate fully in such audit). In
the event that an audit is proposed with respect to ▇▇▇▇▇▇'▇
proprietary information ("Restricted Information"), then on the
----------------------
written demand of Baxter the individuals conducting the audit
with respect to the Restricted Information will be limited to
Nexell's independent auditors. In such event, Baxter shall pay
the costs of the independent auditors conducting such audit, but
only with respect to that portion of the audit relating to the
Restricted Information. Such independent auditors shall enter
into an agreement with Baxter, on terms that are agreeable to the
parties, under which such independent auditors shall agree to
maintain the confidentiality of the information obtained during
the course of such audit and establishing what information such
auditors will be permitted to disclose in reporting the results
of any audit of Restricted Information. Any such audit shall be
conducted during regular business hours in a manner that does not
interfere unreasonably with the operations of Baxter. The
aggregate number of audits of ▇▇▇▇▇▇'▇ books and records
conducted under this Section 7 shall not exceed one (1) financial
audit in any twelve (12) month period unless the next preceding
audit disclosed a failure to conform to the terms of this Section
7. Subject to the foregoing limitations, any such audit shall be
conducted when requested by notice given not less than thirty
(30) days prior to the commencement of the audit. If by such
audit Nexell discovers unauthorized activities, or if the amount
of the royalties due set forth in the auditor's report deviates
by more than ten percent (10%) from the amount of royalties due
reported by Baxter for the same period, Baxter shall reimburse
Nexell for the cost of the audit. Any disputes arising out of an
audit performed hereunder shall be submitted by the parties to an
accounting firm acceptable to both Baxter and Nexell (or, if they
cannot agree on such selection, a national (big five) accounting
firm will be selected by lot after eliminating ▇▇▇▇▇▇'▇ and
Nexell's regular outside firm of auditors) and the firm so
selected (the "Arbitrator") shall be directed by Baxter and
----------
Nexell to review the items in dispute as promptly as reasonably
practicable and, upon completion of such review, to deliver
written notice to each of Baxter and Nexell setting forth the
Arbitrator's resolution of each disputed item. The Arbitrator's
review shall be conducted in accordance with the Commercial
Arbitration Rules of the Center for Public Resources and the
Arbitrator's determination shall be final and binding on the
parties hereto. The place for such arbitration shall be Chicago,
Illinois, or at such other place as may be agreed upon by Baxter
and Nexell.
6
7.3 Payment of Royalties. Together with each report referred to in Section
--------------------
7.2 hereof, Baxter shall pay to Nexell the applicable royalties due as
specified in this Section 7 for the worldwide Net Sales of Products
covered by the report. Nexell acknowledges that royalties may, under
certain circumstances, be set-off by Baxter pursuant to the Asset
Purchase Agreement or Section 19.2 of this Agreement.
8. Installation, Training and Maintenance.
8.1 Operator Training. Nexell will develop, publish and revise as needed
-----------------
all technical operational materials (for example, operator manuals)
relating to the Products. Further, Nexell shall train ▇▇▇▇▇▇ personnel
as reasonably requested by Baxter free of charge.
8.2 Installation and Maintenance. Baxter will be responsible for the
----------------------------
installation and servicing of the Products, as well as customer
training. Baxter will also be responsible for customer support,
including customer phone hotline coverage to handle customer inquiries
and complaints. In addition, Baxter will offer to customers service
and maintenance contracts for Products for post-warranty servicing of
the Products.
9. Regulatory Responsibility.
9.1 Baxter Responsibilities. Baxter will maintain, in compliance in all
-----------------------
material respects with applicable law, all Regulatory Files related to
the Products and components thereof. For any products that Baxter may
distribute and sell to third parties in connection with the Products,
Baxter shall maintain all regulatory files relating to such products
and Baxter shall have full responsibility with regard to such
regulatory files. Baxter agrees to grant Nexell Right of Reference
and/or any other rights available under FDA regulations or policies to
allow Nexell to cross-reference the regulatory files. In addition,
Baxter shall provide Nexell with reasonable access to and a copy of
such portions of its regulatory files relating to the Products as
Nexell shall reasonably request.
9.2 Nexell Responsibilities. Nexell shall promptly forward product
-----------------------
complaints received on Products to Baxter. In addition, Nexell shall
cooperate, as mutually agreed by the parties, in ▇▇▇▇▇▇'▇
administration of mandatory notifications, repairs, replacements and
refunds, safety alerts, "cease distribution and notification" and
mandatory recall actions, voluntary recalls, market withdrawals and
stock recoveries, and device removals and corrections, as defined or
understood under law or FDA policy, or related or analogous actions
involving the Products.
9.3 Ongoing Compliance. Each party agrees to comply in all material
------------------
respects with the requirements of the FDA, any state, local or other
regulatory authority, or any analogous authority outside the United
States, which in each case relates to the Products.
7
9.4 Matched Donor Recipient Clinical Trial. With respect to the matched
--------------------------------------
donor recipient clinical trial, Baxter shall determine, in its sole
discretion, whether such clinical trial shall be continued and/or
completed. In the event Baxter determines to continue such clinical
trial, Baxter may elect to complete the clinical phase of such trial
at its own expense (which the parties agree will involve monitoring,
data collection, data compilation, data analysis, regulatory file
preparation and regulatory file submissions). In the alternative,
Baxter may elect to designate all or any portion of the tasks required
to complete the clinical phase of such trial to Nexell (in which case
Nexell would be reimbursed for its actual, reasonable costs associated
with performing the required work in accordance with a separate
agreement to be negotiated by the parties).
10. Intentionally Omitted.
11. Customer Feedback. As either party develops, surveys or otherwise receives
feedback from customers, operators and others relative to the Products, it will
share the results and data obtained with the other. The parties may choose to
jointly seek customer feedback or use similar data to agree upon changes or
improvements to the Products, to the delivery, installation and maintenance of
the Products, to the training of operators or to the technical presentation of
the Products. Notwithstanding anything to the contrary set forth herein, Nexell
shall not have the right to access any Baxter customers independently of Baxter
with regard to any customer complaints or sales and marketing activities as such
relates to the Products.
12. Non-Compete Agreement. Baxter and its Affiliates shall be permitted to
exercise all rights granted to Baxter hereunder to their fullest extent, subject
to the Non-Compete Agreement. In connection therewith, in order to permit Baxter
to exercise all rights granted to it under this Agreement, the first sentence in
the first paragraph after 2.1(b) shall be replaced in its entirety with the
following: "for therapeutic purposes such as cellular or gene therapy, except as
Baxter is permitted to manufacture, supply, market, import, distribute, use and
sell Products of the Business pursuant to the Distribution License Agreement,
the Sublicense Agreements and the Supply Agreement." The Non-Compete Agreement
shall be deemed to have been amended accordingly.
13. Trademarks. Nexell hereby grants to Baxter an exclusive (even as to
Nexell), worldwide fully paid-up license to use the Licensed Trademarks in
connection with ▇▇▇▇▇▇'▇ manufacturing, marketing, selling, importing, use and
distribution of the Products; provided that ▇▇▇▇▇▇'▇ use of the Licensed
--------
Trademarks shall be in accordance with the quality control standards and other
guidelines issued by Nexell and delivered to Baxter hereunder. From time to
time, Nexell shall have the right to review and evaluate the activities
performed and the Products distributed by Baxter using the Licensed Trademarks
for purposes of ensuring that Nexell's guidelines are being adhered to and that
the good will associated with the Licensed Trademarks is not being adversely
affected by Baxter. Except as set forth herein, neither party shall use the
other party's
8
trademarks, trade names, service marks, logos or other company identifiers
without such party's prior written approval. Neither party shall at any time
assert any claim to any good will, reputation or ownership of the other party's
trademarks, trade names service marks, logos or other company identifiers.
Neither party shall use any trademarks, trade names, service marks, logos or
other company identifiers that are confusingly similar to the other party's
trademarks, trade names, service marks, logos or other company identifiers.
Nothing in this Agreement or any other agreement referenced herein shall imply
or grant Nexell any rights to any Baxter trademarks, trade names, service marks,
logos or other company identifiers. Any use of a Baxter trademark, trade name,
service ▇▇▇▇, logo or other company identifier shall inure to the benefit of
Baxter. Any use of a Licensed Trademark shall inure to the benefit of Nexell.
14. Label Copy. The parties acknowledge and agree that Nexell has provided all
specifications for labeling, product inserts and packaging for the Products
covered under the Regulatory Files prior to the Effective Date.
15. Interest on Overdue Payments. Interest shall accrue and be payable on all
overdue payments owing by a party under this Agreement from the date due at the
rate of one and one-half percent (1.5%) per month (or the highest rate allowed
by law, if lower), compounded annually, until fully paid (including full payment
of such interest).
16. Foreign Currency Conversion. Where calculations of any payments required
hereunder relate to currency other than United States dollars, all such
calculations shall be made pursuant to ▇▇▇▇▇▇'▇ then current, accounting
policies and practices, as consistently applied.
17. Enforcement of Licensed Intellectual Property Rights. Baxter and Nexell
shall each, promptly, but in no event no later than ten (10) days after receipt
of notice thereof, notify the other of any patent nullity actions, oppositions,
reexaminations, any declaratory judgment actions or any alleged or threatened
infringement of patents or patent applications or misappropriation or violation
of any Licensed Intellectual Property or Licensed Trademark, or if Baxter or
Nexell, or any of their respective Affiliates, shall be named as a defendant in
a legal proceeding by a third party alleging infringement, misappropriation or
violation of a patent or other intellectual property right as a result of the
manufacture, production, use, distribution or sale of any Product or of any
other information or notification regarding the Licensed Intellectual Property
or Licensed Trademarks.
17.1 ▇▇▇▇▇▇ and Nexell shall cooperate in any action taken by a third
party solely involving a nullity action, opposition, reexamination
or any other action taken by such third party alleging the
invalidity or unenforceability of any Licensed Intellectual Property
or any Licensed Trademark. Both parties agree to share equally in
the cost of the defense of such Licensed Intellectual Property or
Licensed Trademarks.
17.2 ▇▇▇▇▇▇ shall have the first right to respond to, defend or prosecute
any actions taken to defend any alleged or threatened infringements,
misappropriations or any other violations by a third party of
▇▇▇▇▇▇'▇ rights under the License granted in Section 2. It is
understood that such action may include defending against a nullity
action or similar action or causes of action taken by such third
party in such proceedings or actions. Nexell agrees to cooperate
with ▇▇▇▇▇▇ and its legal counsel, join in suits or actions that may
be brought by ▇▇▇▇▇▇, at ▇▇▇▇▇▇'▇ request, allow itself to be named
as a party, at ▇▇▇▇▇▇'▇ request, and be available at ▇▇▇▇▇▇'▇
reasonable request to be an expert witness or otherwise to assist in
such proceedings. If ▇▇▇▇▇▇ elects to respond to, defend, prosecute
or settle any
9
such actions, challenges, infringements, misappropriations or
proceedings by a third party alleging infringement, misappropriation
or violation of ▇▇▇▇▇▇'▇ rights as described above then: (i) ▇▇▇▇▇▇
shall bear all legal fees and other costs and expenses associated
with such response or defense, including those incurred by Nexell at
▇▇▇▇▇▇'▇ request; and (ii) ▇▇▇▇▇▇ shall keep all amounts recovered
from third parties in connection with such response or defense.
Furthermore, ▇▇▇▇▇▇ shall have the right to license such Licensed
Intellectual Property or Licensed Trademarks in connection with any
settlement of any such claim, with the prior written consent of
Nexell (such consent not to be unreasonably withheld or delayed).
▇▇▇▇▇▇ shall have six (6) months to elect to respond to, defend or
prosecute any such allegations of infringement, misappropriation or
violation of rights. If ▇▇▇▇▇▇ declines to respond to, defend or
prosecute any such action within such six (6) month period, then
Nexell shall have the right to elect to bring any necessary action
to defend or prosecute any such allegations of infringement,
misappropriation or violation of rights. Notwithstanding the
foregoing, it is understood that nothing contained in this Section
17.2 shall limit, impose any additional obligation on or otherwise
alter Nexell's obligation to indemnify ▇▇▇▇▇▇ under Section 19.2.
17.3 For any such actions against a third party alleging any
infringement, misappropriation or violation of rights that are not
included under the rights granted to ▇▇▇▇▇▇ under the License,
Nexell shall have six (6) months to elect to respond to, defend or
prosecute any such allegations of infringement, misappropriation or
violation of rights. If Nexell declines to make any such election
within such six (6) month period, then Nexell hereby grants ▇▇▇▇▇▇
automatically the exclusive right to elect to bring any necessary
action to defend or prosecute any such allegations of infringement,
misappropriation or violation of rights. If ▇▇▇▇▇▇ elects to do so,
then Nexell's license grant to ▇▇▇▇▇▇ under Section 2 shall be
deemed to be amended to include an exclusive license to take
whatever actions are necessary for ▇▇▇▇▇▇ (and solely for the
purpose of the foregoing) to respond to, defend or prosecute any
such actions to enforce such rights. In connection therewith, Nexell
agrees to cooperate with ▇▇▇▇▇▇ and its legal counsel, join in suits
or actions that may be brought by ▇▇▇▇▇▇, at ▇▇▇▇▇▇'▇ request, allow
itself to be named as a party, at ▇▇▇▇▇▇'▇ request, and be available
at ▇▇▇▇▇▇'▇ reasonable request to be an expert witness or otherwise
to assist in such proceedings. ▇▇▇▇▇▇ shall bear all legal fees and
other costs and expenses associated with such response or defense,
including those incurred by Nexell at ▇▇▇▇▇▇'▇ request, and ▇▇▇▇▇▇
shall keep all amounts recovered from third parties in connection
with such response or defense. Furthermore, ▇▇▇▇▇▇ shall have the
right to license such Licensed Intellectual Property or Licensed
Trademarks in connection with any settlement of any such claim, with
the prior written consent of Nexell (such consent not to be
unreasonably withheld or delayed). Notwithstanding the foregoing, it
is understood that nothing contained in this Section 17.3 shall
limit, impose any additional obligation on or otherwise alter
Nexell's obligation to indemnify ▇▇▇▇▇▇ under Section 19.2.
18. Warranties.
10
18.1 General. Each party represents and warrants to the other that: (A)
-------
all corporate action necessary for the authorization, execution and
delivery of this Agreement by such party and the performance of its
obligations hereunder has been taken; (B) the execution, delivery
and performance of this Agreement do not violate or conflict with
any law applicable to it, any provision of its charter or bylaws,
any order or judgment of any court or other agency of government
applicable to it or any of its assets or any contractual restriction
binding on or affecting it or any of its assets; and (C) its
obligations hereunder constitute its legal, valid and binding
obligations, enforceable in accordance with their respective terms
(subject to applicable bankruptcy, reorganization, insolvency,
moratorium or similar laws affecting creditors' rights generally and
subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a
proceeding in equity or at law)).
18.2 Products and Licensed Intellectual Property Warranty. Nexell
----------------------------------------------------
warrants to ▇▇▇▇▇▇ that (A) the Products set forth on Schedule 1.15
-------------
do not infringe, misappropriate or violate the intellectual property
of any entity; and (B) the Licensed Intellectual Property and the
Licensed Trademarks, together with the Sublicenses, constitute all
of the intellectual property that Nexell owns or otherwise has
rights in or to that are necessary or desirable to make, have made,
market, sell, import and use the Products, or any components
thereof, as permitted to be used by ▇▇▇▇▇▇ under this Agreement
anywhere in the Territory. Nexell agrees that if there are any
additional rights in any patents, know-how, trademarks, or any other
intellectual property that ▇▇▇▇▇▇ needs to fully exercise its
license rights granted under Section 2 with regard to the Products
set forth on Schedule 1.15, such rights shall be deemed to be
-------------
included in the license granted under Section 2.
19. Indemnification.
19.1 ▇▇▇▇▇▇'▇ Indemnity. ▇▇▇▇▇▇ shall indemnify Nexell and hold it
------------------
harmless from any liability, loss, expense, cost, claim or judgment
arising out of any claim for property damage, personal injury or
death that is caused by (A) ▇▇▇▇▇▇'▇ failure to manufacture the
Products in accordance with their applicable specifications; (B)
▇▇▇▇▇▇'▇ failure to meet its obligations with respect to its
regulatory responsibilities set forth in Section 9, or which arises
out of ▇▇▇▇▇▇'▇ performance of service contracts or sales and
marketing activities performed by ▇▇▇▇▇▇ personnel; (C) defects in
any specifications for labeling for Products covered under the
Regulatory Files; provided that any such defect was caused by a
change, by ▇▇▇▇▇▇, of such specifications for labeling after the
Effective Date; or (D) any negligent acts or omissions of ▇▇▇▇▇▇ in
connection with its performance under this Agreement. At ▇▇▇▇▇▇'▇
expense, Nexell shall cooperate fully with ▇▇▇▇▇▇ in defending or
otherwise resolving any such claim. ▇▇▇▇▇▇ shall have full control
of any litigation brought against Nexell with respect to any claim
that is indemnifiable by ▇▇▇▇▇▇ hereunder; but Nexell may, at its
expense, also be represented by its own counsel in any such
litigation. If ▇▇▇▇▇▇ elects not to assume control of such
litigation, Nexell may assume and control the defense of such claim.
11
19.2 Nexell's Indemnity. Nexell shall indemnify ▇▇▇▇▇▇ and hold it
------------------
harmless from any liability, loss, expense, cost, claim or judgment
arising out of any claim for property damage, personal injury or
death that is caused by (A) defects in the design, specifications,
or product drawings/blueprints provided by Nexell for the Products
set forth on Schedule 1.15, or resulting from the use of the
-------------
Products set forth on Schedule 1.15 in accordance with the
-------------
specification for labeling provided by Nexell; (B) defects in
specifications for any labeling for Products covered under the
Regulatory Files; provided, however, that, Nexell shall only have an
-------- -------
obligation with respect to the specifications for any labeling for
such Products as such existed as of the Effective Date; (C) Nexell's
failure to meet its obligations with respect to its regulatory
responsibilities set forth in Section 9; (D) any negligent acts or
omissions of Nexell in connection with its performance under this
Agreement; or (E) any negligent acts or omissions of Nexell with
regard to any customers of ▇▇▇▇▇▇. Furthermore, Nexell shall
indemnify ▇▇▇▇▇▇ and hold it harmless from any liability, loss,
expense, cost, claim or judgment arising out of any breach of
Section 18.2. Notwithstanding anything contained in this Agreement
to the contrary, it is understood that ▇▇▇▇▇▇ may recover any
indemnification payment due from Nexell pursuant to the foregoing
sentence by retaining and setting off any amounts due or to become
due from ▇▇▇▇▇▇ to Nexell pursuant to Section 7. At Nexell's
expense, ▇▇▇▇▇▇ shall cooperate fully with Nexell in defending or
otherwise resolving any such claim. ▇▇▇▇▇▇ shall have full control
of any litigation brought against ▇▇▇▇▇▇ with respect to any claim
that is indemnifiable by Nexell hereunder. If ▇▇▇▇▇▇ elects not to
assume control of such litigation, Nexell may assume and control the
defense of such claim.
19.3 Exclusions. Notwithstanding anything to the contrary set forth in
----------
Sections 19.1 and 19.2, neither party shall be required to indemnify
the other party under Section 19.1 or 19.2, as applicable, to the
extent any claim is caused by the other party's negligent acts or
omissions.
20. Limitation of Liability. IN NO EVENT, WHETHER AS A RESULT OF BREACH OF
CONTRACT, TORT LIABILITY (INCLUDING NEGLIGENCE), OR OTHERWISE, SHALL EITHER
PARTY BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, PUNITIVE, EXEMPLARY OR
LIQUIDATED DAMAGES.
21. General Provisions.
21.1 Force Majeure. Neither party to this Agreement shall be liable for
-------------
delay or failure in the performance of any of its obligations
hereunder if such delay or failure is due to causes beyond its
reasonable control, including acts of God, fires, earthquakes,
strikes and labor disputes, acts of war, civil unrest or
intervention of any governmental authority, but any such delay or
failure shall be remedied by such party as soon as is reasonably
possible. A party's lack of financial resources to effect its
performance hereunder shall not be considered a force majeure event.
21.2 Foreign Government Approval or Registration. If this Agreement or
-------------------------------------------
any associated transaction is required by the law of any nation to
be either approved or
12
registered with any governmental authority, or any agency or
political subdivision thereof, ▇▇▇▇▇▇ shall assume all legal
obligations to do so. In connection therewith, Nexell shall
cooperate and assist with all reasonable requests by ▇▇▇▇▇▇.
21.3 Notices. All notices required under this Agreement shall be in
-------
writing, and all such notices and other written communications
(including purchase orders) shall be delivered either by hand, by a
nationally recognized overnight delivery service (with delivery
charges prepaid), by first class, registered or certified United
States mail (postage prepaid), or by facsimile transmission
(provided that in the case of facsimile transmission, a confirmation
copy of the notice shall be delivered by hand, by a nationally
recognized overnight delivery service (with charges prepaid), or by
first class, registered or certified United States mail (postage
prepaid) within two (2) days of facsimile transmission), addressed
to each party as follows:
If to ▇▇▇▇▇▇, such notices shall be delivered to:
▇▇▇▇▇▇ Healthcare Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇ - General Manager
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇▇ Healthcare Corporation
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq. - Chief Patent Counsel
Telecopy: 474-6330
▇▇▇▇▇▇ Healthcare Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq. - General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to Nexell, such notices shall be delivered to:
Nexell of California, Inc.
Nine ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President and CEO
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
13
With a copy to:
▇▇▇▇▇ ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
Nexell Therapeutics Inc.
Nine ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chairman
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as any such party may designate in writing and
delivered to the other party hereto pursuant to this Section 21.3.
All such notices or other written communications shall be deemed to
have been received by the addressee if delivered by: hand or by a
nationally recognized overnight delivery service (with delivery
charges prepaid) at the time of delivery; by first class, registered
or certified United States mail (postage prepaid), three (3)
business days after delivery thereof to the United States Postal
Service; or by facsimile transmission, at the time of transmission.
21.4 Choice of Law and Jurisdiction. This Agreement shall be governed by
------------------------------
and construed in accordance with the internal laws of the State of
Delaware, without application of conflicts of law principles, and,
subject to Section 21.11, each party hereby submits to the
jurisdiction and venue of any state or federal court in the State of
Delaware. To the extent permissible by law, each of the parties
hereby waives, releases and agrees not to assert, and agrees to
cause its Affiliates to waive, release and not assert, any rights
such party or its Affiliates may have under any foreign law or
regulation that would be inconsistent with the terms of this
Agreement as governed by Delaware law.
21.5 Provisions Contrary to Law/Severability. In performing this
Agreement, the parties hereto shall comply with all applicable laws.
Nothing in this Agreement shall be construed so as to require the
violation of any law, and wherever there is any conflict between any
provision of this Agreement and any applicable law, the applicable
law shall prevail. If any provision of this Agreement conflicts with
any applicable law or is otherwise determined by an arbitrator or
court having valid jurisdiction thereof to be enforceable, the
affected provision of this Agreement shall be deemed to have been
modified to the extent necessary so as not to conflict with the
applicable law or to be unenforceable or, if such modification is
not possible, such provision shall be deemed to have been deleted
herefrom, without affecting, impairing or invalidating the remaining
provisions of this
14
Agreement.
21.6 Entire Agreement. This Agreement, together with any schedules
----------------
attached hereto, the Asset Purchase Agreement and all agreements
contemplated thereby (including the agreements noted on Schedule
5.15 thereof as continuing in effect), and the Non-Compete Agreement
constitute the entire agreement between the parties as to subject
matter hereof, and all prior negotiations, representations,
agreements and understandings are merged into, extinguished by and
completely expressed by this Agreement and the other agreements
referred to above.
21.7 Waivers and Modifications. The failure of any party to insist on the
-------------------------
performance of any obligation hereunder shall not be deemed to be a
waiver of such obligation. Waiver of any breach of any provision
hereof shall not be deemed to be waiver of any other breach of such
provision or any other provision. No waiver, modification, release
or amendment of any obligation under or provision of this Agreement
shall be valid or effective unless in writing signed by the other
party to be bound by such waiver, modification, release or
amendment.
21.8 Assignment. Nexell may assign its rights or obligations under this
----------
Agreement to any Affiliate of Nexell without the prior written
consent of ▇▇▇▇▇▇; provided that such assignee remains an Affiliate
--------
of Nexell; and, provided, further, that no such assignment shall
-------- -------
relieve Nexell of the obligation to satisfy and discharge the
obligation(s) so assigned. ▇▇▇▇▇▇ may assign its rights and
obligations hereunder to any Affiliate of ▇▇▇▇▇▇ without prior
notice to or consent of Nexell. No assignment by ▇▇▇▇▇▇ or Nexell,
or by any permitted assignee, (by operation of law or otherwise)
shall be effective unless and until the assignee shall have agreed
to become bound by the provisions of the Non-Compete Agreement, to
the same extent and in the same manner as ▇▇▇▇▇▇ (in the case of a
▇▇▇▇▇▇ assignee) or Nexell (in the case of a Nexell assignee) is
bound. No party hereto may assign (by operation of law or otherwise)
any of its rights or obligations under this Agreement, unless and to
the extent expressly permitted by this Section 21.8. Subject to the
foregoing, this Agreement shall inure to the benefit of and be
binding on the parties' permitted successors and assigns.
21.9 Independent Parties. By virtue of this Agreement, neither party
-------------------
constitutes the other as its agent (except as may otherwise be
expressly provided herein), partner, joint venturer, or legal
representative and neither party has express or implied authority to
bind the other in any manner whatsoever.
21.10 Counterparts. This Agreement may be executed in any number of
------------
counterparts with the same effect as if all parties had signed the
same document. All such counterparts shall be deemed an original,
shall be construed together, and shall constitute one and the same
instrument.
21.11 Dispute Resolution.
------------------
A. Provisional Remedies. The procedures specified in this Section
--------------------
21.11
15
shall be the sole and exclusive procedures for the resolution of
disputes (other than disputes regarding any royalty payments,
which shall be resolved in accordance with Section 7.2C) between
the parties arising out of or relating to this Agreement;
provided, however, that a party, without prejudice to these
procedures, may seek a preliminary injunction or other
provisional relief if, in its sole judgment, such action is
deemed necessary to avoid irreparable damage or to preserve the
status quo. During such action, the parties will continue to
participate in good faith in the procedures specified in this
Section 21.11.
B. Negotiations Between Executives. The parties will attempt in
-------------------------------
good faith to resolve any claim or controversy arising out of or
relating to the execution, interpretation or performance of this
Agreement (including the validity, scope and enforceability of
the provisions contained in this Section 21.11) promptly by
negotiations between executives who have authority to settle the
controversy and who are at a higher level of management than the
persons with direct responsibility for the administration of this
Agreement.
C. Arbitration. In the event that any dispute arising out of or
-----------
relating to this Agreement or its breach, termination or validity
has not been resolved after good faith negotiation pursuant to
the procedures of Section 21.11B, such dispute shall upon written
notice by either party to the other, be finally settled by
arbitration administered by the Center for Public Resources in
accordance with the provisions of its Commercial Arbitration
Rules and the United Stated Federal Arbitration Act, as modified
below:
(i) The arbitration shall be heard by a panel of three (3)
independent and impartial arbitrators, all of whom shall be
selected from a list of neutral arbitrators supplied by the
Center for Public Resources. From such list, each of ▇▇▇▇▇▇
and Nexell shall select one (1) arbitrator, and the
arbitrators so selected shall select a third. The panel
shall designate one (1) among them to serve as chair.
(ii) The arbitration proceedings shall be conducted in Los
Angeles County or Orange County in the State of California.
(iii) Any party may seek interim or provisional remedies under
the Federal Rules of Civil Procedure and the United States
Federal Arbitration Act as necessary to protect the rights
or property of the party pending the decision of the
arbitrators.
(iv) The parties shall allow and participate in limited
discovery for the production of documents and taking of
depositions, which shall be conducted in accordance with
the Commercial Arbitration Rules of the Center for Public
Resources. All discovery shall be completed within sixty
(60) days following the filing of the answer or other
16
responsive pleading. Unresolved discovery disputes shall be
brought to the attention of the chair of the arbitration
panel and may be disposed of by the chair.
(v) Each party shall have up to fifty (50) hours to present
evidence and argument in a hearing before the panel of
arbitrators, provided that the chair of the panel of
arbitrators may establish such longer times for
presentations as the chair deems appropriate.
(vi) The arbitration award shall be rendered by the arbitrators
within fifteen (15) business days after conclusion of the
hearing of the matter, shall be in writing and shall
specify the factual and legal basis for the award. Judgment
thereon may be entered in any court having jurisdiction
thereof.
(vii) The arbitrators are empowered to order money damages in
compensation for a party's actual damages, specific
performance or other appropriate relief to cure a breach;
provided, however, that the arbitrators will have no
authority to award special, punitive or exemplary damages,
or other money damages that are not measured by the
prevailing party's actual damages.
D. Performance During Dispute. Each party is required to continue
--------------------------
to perform its obligations under this Agreement pending final
resolution of any dispute arising out of or relating to this
Agreement, unless to do so would be commercially impossible or
impractical under the circumstances.
21.12 Rules of Construction. In this Agreement, unless a clear contrary
intention appears:
A. The singular number includes the plural number and vice versa;
B. Reference to any party includes such party's permitted successors
and assigns;
C. Reference to any gender includes the other gender;
D. Reference to any Section, Exhibit or Schedule means such section
of this Agreement, exhibit to this Agreement or schedule to this
Agreement, as the case may be, and references in any section or
definition to any clause means such clause of such section or
definition;
E. "Herein," "hereunder," "hereof," "hereto," and words of similar
import shall be deemed references to this Agreement as a whole
and not to any particular section or other provision of this
Agreement;
F. "Including" (and with the correlative meaning "include") means
including
17
without limiting the generality of any description preceding such
term;
G. Relative to the determination of any period of time, "from" means
"from and including," "to" means "to but excluding" and "through"
means "through and including";
H. Reference to any law (including statutes and ordinances) means
such law as amended, modified, codified or reenacted, in whole or
in part, and in effect from time to time, including rules and
regulations promulgated thereunder;
I. Accounting terms used herein shall have the meanings historically
attributed to them by ▇▇▇▇▇▇ International Inc., a Delaware
corporation, and its subsidiaries prior to the date hereof;
J. In the event of any conflict between any of the provisions of the
body of this Agreement and any exhibit or schedule hereto, the
provisions of the body of this Agreement shall control;
K. The headings contained in this Agreement have been inserted for
convenience of reference only, and are not to be used in
construing this Agreement; and
L. Any rule of construction or interpretation which might otherwise
require this Agreement to be construed or interpreted against
either party shall not apply to any construction or
interpretation hereof.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
18
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first set forth above.
▇▇▇▇▇▇ HEALTHCARE CORPORATION
By: /s/
---------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President, Corporate
Strategy and Development
NEXELL OF CALIFORNIA, INC.
By: /s/
---------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
President
19