These terms and conditions of manufacturing services (the “Terms of Service”) shall, by themselves and as part of the Final Terms of Service, govern all orders for, and purchases of, services (the “Services”) from Advanced BioScience Laboratories, Inc., a Delaware corporation with offices at 9800 Medical Center Drive, Building D, Rockville, Maryland 20850 (“ABL”), by the purchaser thereof (the “Client”). BY ACCEPTING ANY SERVICE FROM ABL, CLIENT IS DEEMED TO HAVE AGREED TO ALL OF THESE TERMS OF SERVICE WITHOUT THE NEED FOR ANY EXECUTION OR DELIVERY BY CLIENT OR ABL OF ANY FURTHER INSTRUMENT, AGREEMENT OR OTHER DOCUMENT. 

1. FINAL TERMS OF SERVICE. These Terms of Service, together with the Proposal and any Modification, Minor Modification or Risk Memorandum (collectively, the “Final Terms of Service”), (a) shall constitute the complete, exclusive and entire agreement between ABL and Client with respect to purchase of Services, and ABL’s offer to sell Services is expressly limited to such terms, and (b) shall control over and supersede and replace all prior or contemporaneous understandings or agreements, written or oral, between ABL and Client with respect to such purchase(s), and (c) shall control over and supersede and replace, to the extent not accepted in writing by ABL, any additional or different terms and conditions contained in any statement in any purchase order by Client, which additional or different terms and conditions are hereby rejected and shall be void unless specifically so accepted in writing by ABL.

 To the extent Client’s order documents and any terms and conditions contained therein materially alter the Final Terms of Service, the Final Terms of Service shall be deemed a counteroffer to any offer made by Client through Client’s order documents. ABL reserves the right to delay performance of any Services until such counteroffer has been accepted by Client, provided, that Client’s acceptance of or payment for the Services shall be deemed final acceptance of and agreement to the terms of such counteroffer. In the event of an inconsistency between these Terms of Service and the terms appearing in the Proposal or other agreement signed by an authorized representative of ABL, these Terms of Service shall prevail. 

2. MANUFACTURING SERVICES. Client hereby retains ABL to manufacture one or more compositions (each, a “Product”) as described in the signed proposal attached hereto (the “Proposal”). ABL may subcontract or delegate some of its rights or obligations hereunder to perform the Services to its Affiliates or to Third Parties. In the event of a conflict between the terms of the Proposal and these Terms of Service, these Terms of Service shall govern. ABL shall use commercially reasonable efforts to perform the Services in compliance with all applicable laws and regulations, including cGMP, if applicable, and in accordance with the Proposal. Client acknowledges and agrees that the development and manufacture of developmental batches of Product is experimental in nature, and that subject only to the warranty given in Section 13(e), ABL cannot and does not guarantee a successful outcome for the Services. ABL shall use commercially reasonable efforts to meet the timelines set forth in the Proposal; however Client acknowledges that such timelines are estimates only and Client shall have no recourse if estimated timelines are not met.

 Client shall identify in the Proposal and shall supply to ABL all materials (the “Client Materials”), and all information, technology and intellectual property (the “Client Technology”), in each case that is owned or controlled by Client and necessary for ABL to perform the Services. ABL shall not be responsible for any delays arising out of Client’s failure to provide any of the foregoing to ABL in a timely manner. The Client Materials, when delivered to ABL, shall be free from any lien, mortgage, security interests or other encumbrance. ABL shall procure all other materials and outsourced services required to perform the Services hereunder, other than the Client Materials, and shall charge Client the price paid by ABL therefor, including, but not limited to, shipping, storage and handling costs, taxes and customs duties, plus an administration fee as set forth in the Proposal (the “Acquisition Costs”). Upon termination of the Proposal, all unused Client Materials shall be paid for by Client within thirty (30) days of invoice and, at Client’s option, will either be (a) delivered to Client, or (b) disposed of by ABL, in each case at Client’s expense. ABL reserves the right to carry out such testing on any Client Materials as ABL deem necessary to comply with cGMP, applicable laws and regulations, or ABL Procedures, at Client’s expense, and acceptance or rejection of any Client Materials shall be at ABL’s sole discretion in accordance with cGMP, applicable laws and regulations, or ABL Procedures. 

3. Any material change in the assumptions, scope or timelines of the Proposal that may materially affect the performance, cost or schedule for activities described therein shall require a written amendment to the Proposal signed by the Parties (a “Modification”). If the change is not anticipated to materially affect the performance, cost or timeline for the Proposal, ABL may in its sole discretion require that such change be memorialized in a stand-alone change order (a “Minor Modification”). If Client requests one or more changes to the Manufacturing Process that, in ABL’s sole determination, is reasonably likely to negatively affect the likelihood of a successful conclusion of a Proposal, ABL may require Client to sign a written risk allocation addendum (the “Risk Memorandum”). The Risk Memorandum will set forth the requested changes and the justifications therefor and will allocate the risk of implementing such changes between the Parties, up to and including voiding the warranty provided in Section 13. Each fully executed Modification, Minor Modification or Risk Memorandum will be deemed a part of the Final Terms of Service and are incorporated herein by this reference. ABL will not give effect to any changes in the Services until the Parties agree to and execute the corresponding Modification, Minor Modification or Risk Memorandum, as applicable.

 

4. ABL shall provide Client with a copy of all of the documentation relating to the manufacture and testing of a given batch of Product, including without limitation the documentation specifying the Manufacturing Process to be conducted by ABL for a cGMP Batch and made part of the Batch Documentation (the “Manufacturing Records”), sampling documentation, test results, deviation reports, all applicable process data, and any applicable certificates (the “Batch Documentation”). The Batch Documentation shall be deemed approved if Client has not rejected it in writing within ten (10) business days following delivery. Upon acceptance of the Batch Documentation ABL will deliver the Product to Client. If Client requests documents or other work product that are not specified or contemplated in the Proposal or produced by ABL in the ordinary course of business, or makes other substantive requests for assistance in compiling any regulatory filing, ABL shall prepare a Modification or Minor Modification covering such additional Services.

 ABL shall deliver each batch of Product EXW (Incoterms 2020) ABL’s Facility. ABL shall, at Client’s instruction, (i) arrange for the shipment to be delivered to the carrier specified by Client, or (ii) arrange for outside storage of the same, in either case within ten (10) business days following the date of Client’s approval of the batch pursuant to this Section 4. Client shall hold title to each batch as of the earlier of: (a) the date of delivery of such batch to the carrier or outside storage vendor, or (b) ten (10) business days following Client approval, and the risk of loss for such batch shall be borne by Client from such date. ABL shall not be required to deliver any batch to the carrier until the later of (i) all invoices relating to such batch has been paid by Client, and (ii) the carrier informs ABL that it has obtained all appropriate approvals and consents of any governmental authorities required to transport or ship the same. Client shall be responsible for all costs including shipping, packing, handling, taxes, duties, customs, insurance, warehousing, and/or all other similar and/or related costs. 

5. ACCEPTANCE AND REJECTION. If Client believes that a batch of Product is not conforming (a “Non-Conforming Product”) to the agreed-upon specifications therefor (the “Specifications”) for reasons that cannot be determined from the Batch Documentation, Client may reject the same by giving written notice thereof to ABL within ten (10) business days after the date of Client’s approval pursuant to Section 4, after which time any batch of Product not rejected shall be deemed accepted by Client. Such written notice shall specify the nonconformity and shall be accompanied by any test results or reports evidencing such nonconformity. If ABL discovers after shipment of a batch of Product any information that reasonably suggest that it is a Non-Conforming Product or that it should not otherwise be used, ABL shall promptly notify Client in writing thereof. Client shall have the right to revoke its acceptance of any such batch in writing within ten (10) business days of Client’s receipt of such notice. If it is determined by agreement of the Parties (or in the absence of such agreement, pursuant to this Section 5) that a batch of Product is Non-Conforming Product, the following shall apply:

• If the Non-Conforming Product was produced in accordance with cGMP, and the non-conformity arose as a result of a breach of the warranty set forth in Section 13(e) hereof, then ABL shall replace such Non-Conforming Product with Conforming Product (the “Replacement Product”) as promptly as possible in light of available manufacturing capacity. The manufacture of such Replacement Product shall be conditioned on Client paying all invoices outstanding on account of manufacturing the Non-Conforming Product, and Client agreeing to pay all Acquisition Costs incurred by ABL in the manufacture of the Replacement Product. Prior to delivery of the Replacement Product, Client shall make the final payment that is due upon completion of the project. The delivery of Replacement Product shall be Client’s sole and exclusive remedy with respect to Non-Conforming Product arising from a breach of the warranty set forth in Section 13(e) hereof, and Client hereby waives all other remedies at law or in equity with respect thereto.
• If the Non-Conforming Product was not produced in accordance with cGMP, or the nonconformity of a cGMP batch did not arise as a result of a breach of the warranty set forth in Section 13(e), then Client shall pay ABL for such batch per the Proposal. Upon written instruction from Client, ABL will deliver such Non-Conforming Product in accordance with Section 4, provided that such Non-Conforming Product shall be delivered “AS IS” with no warranties, express or implied. If Client requests additional Services to be provided with respect to such batch, including without limitation the manufacture of Replacement Product, ABL shall prepare a Modification and invoice Client for such additional Services in accordance with Section 3.

 The Parties shall in good faith resolve any dispute regarding whether a batch of Product is a Non-Conforming Product, and whether such Non-Conforming Product arose as a result of a breach of the warranty in Section 13(e) hereof. If the Parties are unable to resolve a dispute in good faith, either Party may refer the dispute to the Chief Executive Officer (or other designee) of each Party. In the event that no agreement is reached with respect to such dispute within thirty (30) days after such referral, either Party may refer the dispute to an independent third-party testing laboratory (the “Independent Laboratory”). If the parties cannot agree on the Independent Laboratory, ABL shall select a nationally recognized, independent testing laboratory. The Independent Laboratory shall determine the existence and source of the specific nonconformity asserted by Client, and, if applicable, the cause thereof. ABL shall submit to the Independent Laboratory retained samples of Product from the same batch of Product as the alleged Non-Conforming Product together with a complete copy of the relevant Batch Documentation, and Client shall submit samples of Product from the same batch of Product as such alleged Non-Conforming Product. The Independent Laboratory shall determine whether the Product is a Non-Conforming Product, and if applicable, if the Non-Conforming Product arose as a result of a breach of the warranty in Section 13(e). The Independent Laboratory’s decision shall be in writing explaining the reasons for such decision and shall be binding and not be appealable to any court in any jurisdiction except in the case of manifest error. The Parties shall equally share the up-front cost of the Independent Laboratory. Following the final decision all amounts paid by the prevailing Party will be promptly reimbursed by the non-prevailing Party. 

6. Pricing for Services are set forth in the applicable Proposal and are subject to adjustment pursuant to any Modifications, Minor Modifications, or as otherwise provided in this Section 6. Estimated pricing for all ingredients, media, buffers, and other components of the Product required to perform the Services (the “Raw Materials”), other supplies and outsourced services is included in the Proposal, to the extent known. Actual pricing for Raw Materials, other supplies and outsourced services will be based on the acquisition price actually paid by ABL, plus an administration fee thereon as set forth in the Proposal (the “Acquisition Cost”), provided, however that in the event there are substantial changes in the availability or cost of materials or components necessary to provide the Services, such changes shall be incorporated in the prices charged to Client hereunder. Pricing for any additional Services will reflect ABL’s standard pricing for the services in question at the time such additional Services are requested and are subject to subsequent adjustment as provided herein. Amounts due for Raw Materials and all other amounts incurred by ABL in the performance of the Services will be invoiced to the Client at Acquisition Cost when incurred by ABL or otherwise as provided in the Proposal. The Acquisition Cost for any goods or services paid for by ABL in any currency other than U.S. dollars shall be calculated based on ABL’s effective exchange rate at the time of purchase.

 Client will pay ABL a non-refundable reservation fee for Services to be conducted with respect to the Proposal in the amount set forth in the Proposal (the “Reservation Fee”). Unless otherwise agreed by the Parties in writing, (a) the Reservation fee does not include Acquisition Costs or project management fees, and (b) the Reservation Fee shall be due and payable (i) if the Proposal calls for both development and manufacturing Services, when the date for manufacturing Services is scheduled, or (b) if the Proposal calls for manufacturing Services only, upon execution of the Proposal. ABL will invoice Client in accordance with the payment schedule set forth in the Proposal, or otherwise as Services are performed. Unless disputed in good faith, Client agrees to pay invoices within thirty (30) days of receipt. Invoiced amounts may be withheld only in the event of a good faith dispute on the basis of mathematical error or failure of ABL to provide the Service or procured the item to which the amount relates, and the undisputed portion of the invoice shall be paid as provided above. All payments to ABL shall be in United States currency and shall be by check, wire transfer, money order or other method of payment approved in writing by ABL. Payment made by check should be sent to the address set forth above.  Any past due undisputed amounts shall bear interest from the date due until paid at the rate of one and one half percent (1.5%) per month, calculated from the due date. In the case where disputed invoices are found in favor of ABL, the interest charge will apply from the date the amount originally came due. Payment shall be made without deduction, deferment, set-off, lien or counterclaim. When sending payment to ABL, the Client shall quote the relevant invoice number in its remittance advice. Client agrees to pay, indemnify and hold ABL harmless from any sales, use, excise, import or export, value-added, withholding or similar tax or duty, and any other tax not based on ABL’s assets or net income, including any penalties and interest, and all government permit or license fees and all customs and similar fees, levied upon the manufacture and supply of the Products hereunder, and any costs associated with the collection or withholding of any of the foregoing (the “Taxes”). If Client fails to pay any Taxes as of the original due date and ABL receives any assessment or other notice from any governmental taxing authority providing that such Taxes are due from ABL, ABL shall give Client written notice thereof and Client shall pay to ABL or to the taxing authority, the amount set forth in such notice within thirty (30) business days of receipt of such notice. If payments to ABL are subject to withholding taxes, Client shall promptly provide all tax certificates, applications and related documents to ABL. Client shall provide ABL with the authority for the withholding obligation, documentation of such withholding and payment that is sufficient to cover such obligation. Any withholdings paid when due hereunder shall be for the account of ABL. Client shall pay in advance the amounts set forth in the Proposal for the purchase and installation of any Client-dedicated equipment, or modifications to ABL’s Facility necessary for performing the Services, as described in the Proposal. The costs of maintaining such equipment shall be paid by Client. Client shall own such equipment upon termination or expiration of these Final Terms of Service and satisfaction of any outstanding Client payment obligations to ABL. ABL is hereby authorized to remove such equipment, and deliver the same to Client at Client’s sole cost, with Client remaining liable for the costs of storage at ABL once Client assumes ownership of Client equipment. ABL shall have no responsibility for damage to or loss of such equipment other than by reason of ABL’s gross negligence or willful misconduct. 

7. ABL shall provide storage in accordance with the requirements set forth in any separate agreement for storage executed by the Parties, and consistent with ABL’s internal procedures. ABL will store batch(es) of Product at no charge for up to ten (10) business days following the date of Client Approval. Any additional storage will be take place off-site at a third party vendor, subject to availability and at prevailing storage rates, and will be charged to Client pursuant to a separate agreement between Client and such vendor, or in the absence of a separate agreement, ABL shall invoice client for such costs as Acquisition Costs until such separate agreement is executed, in accordance with ABL’s procedures. Storage by ABL of any Client Materials or other materials, whether furnished by Client or manufactured or purchased by ABL, shall commence on the date agreed in writing and shall continue for a period of up to thirty (30) days following completion or earlier termination of the Proposal. Thereafter, if Client wishes ABL to continue to store any materials, and ABL agrees to provide such storage, the Parties shall enter into a separate agreement with respect thereto.

 Batches of Product and other materials stored at ABL shall at all times remain Client’s property subject to the terms of any other agreements between Client and ABL; provided, that to the extent permitted by applicable laws, ABL retains a security interest in such batches and other materials to secure payment of all amounts due hereunder. If Client fails to pay any amount when due, ABL shall have the right to repossess and remove all or any part of such materials, and any repossession or removal shall be without prejudice to any other remedy of ABL hereunder, at law or in equity. Client agrees to take any act and execute and deliver any document reasonably requested by ABL to transfer, create, perfect, preserve, protect and enforce this security interest. If Client wishes to remove any materials from storage or terminate the storage hereunder or pursuant to any separate agreement, it shall give ABL thirty (30) days prior written notice thereof, and ABL and Client shall agree on a date for such materials to be withdrawn. Client shall be responsible for arranging and the costs of collection and shipping. Once any materials have been removed from storage, ABL shall have no further obligations with respect thereto. 

8. QUALITY AGREEMENT. Responsibility for quality assurance and quality control of Product shall be allocated as set forth in the Quality Agreement. If there is a conflict between the terms and conditions of these Final Terms of Service and the Quality Agreement, the terms and conditions hereof shall prevail. ABL and Client shall enter into the Quality Agreement in a timely manner, and ABL shall not be obligated to commence cGMP manufacturing until such time as a Quality Agreement is signed. If an audit or inspection any regulatory authority identifies any deficiencies in Client Technology, ABL will promptly notify Client and the remedy of such deficiencies shall be exclusively at Client’s expense.

 

9. PROJECT MANAGEMENT. Each Party will appoint a project manager who will be the person primarily responsible for overseeing the Proposal on a Party’s behalf and the other Party’s primary contact for all matters relating to the Proposal. Each Party shall also name an appropriate number of representatives for a team (the “Joint Project Team”) to provide representation of key functions depending on on-going activities. The Joint Project Team oversees the day to day activities within the applicable Proposal and is co-led by a project team lead assigned by each Party. If a dispute on the Joint Project Team cannot be resolved, it shall be escalated for resolution to the Joint Steering Committee, and if one has not been appointed, to a senior executive of each Party. The Joint Project Team shall meet weekly or as otherwise mutually agreed by the Parties.

 At the request of ABL, each Party shall name an equal number of representatives to a Joint Steering Committee, which shall meet twice per calendar year, or as otherwise mutually agreed by the Parties. The primary function of the Joint Steering Committee is to ensure the ongoing communication between the Parties and discuss and resolve any issues arising under the Proposal. The Joint Steering Committee shall also discuss and seek resolution of issues around management of the Services, agree and monitor deadlines for the Services, discuss and recommend any Modifications or Minor Modifications to the Services, discuss any clinical failures of any Product and seek to agree on appropriate next steps. If a Joint Steering Committee dispute cannot be resolved, such dispute shall be escalated to a senior executive of each Party who shall negotiate in good faith a resolution of the issue. Any final decision shall be reduced to writing and signed by the Parties and shall be conclusive and binding. At the reasonable request of Client, Client shall be permitted to have one (1) employee in the ABL’s facility at any time during the production of manufacturing batches for the purpose of observing the performance of the Services, which observation may take place, at ABL’s sole discretion, via closed-circuit video or similar systems. Such employee shall abide by ABL’s practices and operating procedures regarding persons in plant as in effect from time to time, and such employee agrees to comply with all confidentiality, safety and related instructions applicable at such facility. No photography, video or audio recording is permitted any time at the facility including of closed circuit or similar video feeds. ABL may, at its sole discretion, require such employee to execute a specific confidentiality agreement relating to the subject matter under observation, including a personal attestation that such employee has been granted access to ABL trade secrets and/or other sensitive proprietary information, all of which shall be ABL Confidential Information. 

10. INTELLECTUAL PROPERTY. Neither Party will acquire any right, title, or interest in any intellectual property (i) owned or controlled by a Party prior to the Effective Date; or (ii) developed or acquired by a Party independently from the performance of the Services hereunder (the “Background Intellectual Property”). Client shall own all right, title, and interest in the intellectual property that ABL or its Affiliates, develop, invent, reduce to practice or make, solely or jointly with Client or others, in connection with the Services to the extent that it is solely a direct derivative of or improvement to the Client’s Confidential Information and Background Intellectual Property (the “New Client Intellectual Property”). For the avoidance of doubt, “New Client Intellectual Property” excludes any New General Application Intellectual Property. ABL hereby assigns to Client all its right, title and interest in any New Client Intellectual Property. ABL shall execute, and shall require its Affiliates and subcontractors to execute, any documents reasonably required to confirm Client’s ownership of the New Client Intellectual Property, and any documents required to apply for, maintain and enforce any patent or other right therein. Client hereby grants ABL and its Affiliates and subcontractors the non-exclusive right to use Client’s Confidential Information, Client Materials, Client’s Background Intellectual Property, New Client Intellectual Property, and/or any other intellectual property or information supplied by or on behalf of Client, during the Term to perform the Services hereunder.

 ABL shall own all right, title and interest in intellectual property that ABL and its Affiliates and subcontractors, solely or jointly with Client, develop, invent, reduce to practice or make in the performance of the Services that: (i) is generally applicable to testing, developing or manufacturing chemical or biological products or components; or (ii) is an improvement to, or derivative of, ABL’s Background Intellectual Property or ABL’s Confidential Information (“New General Application Intellectual Property”). ABL hereby grants to Client a non-exclusive, worldwide, fully paid-up, irrevocable, transferable license, including the right to grant sublicenses, under the New General Application Intellectual Property, to use, sell, offer for sale and import the Product manufactured hereunder (but no other products). Any sublicensees shall be bound by written agreement to maintain the confidentiality of such New General Application Intellectual Property. 

11. ABL shall indemnify, defend and hold Client, its Affiliates, and its/their directors, officers, employees, and agents (“Client’s Indemnified Parties”) harmless from and against any loss, liabilities, expenses and other costs (including reasonable attorney fees and expenses) that Client’s Indemnified Parties may suffer arising directly out of any claims made or actions (collectively “Liabilities”) brought by a third party other than the Client’s Indemnified Parties as a result of: (a) any material breach of Section 13(e) hereof, or (b) ABL’s gross negligence or willful misconduct in the performance of Services hereunder. ABL’s obligations shall not extend to any Liabilities to the extent that such Liabilities arise from or in connection with (a) the gross negligence or willful misconduct of Client’s Indemnified Parties, (b) any matter for which the Client’s Indemnified Parties must indemnify ABL hereunder, or (c) any matter that arise from or in connection with: (i) the composition, design of or suitability of any Product; (ii) a failure of Client to adequately or properly carry out analytical, animal, clinical and other testing of any Product; (iii) the labels, labeling, instructions for use, marketing and promotional materials and promotional activities provided, disseminated or approved, used or disseminated by or on behalf of Client; or (iv) the use, distribution, export, import, testing, sale or marketing of any Product.

 Client shall indemnify, defend and hold ABL, its Affiliates, directors, officers, employees, agents and subcontractors (ABL’s Indemnified Parties”) harmless from and against any Liabilities brought by a third party other than ABL’s Indemnified Parties as a result of: (a) the manufacture, packaging, testing, labeling, handling, distribution, marketing, use, import, export or sale of any Product, in any form, including but not limited to, any third party infringement claims based on claims that the Product, or its use, or its manufacture infringes such third party’s Intellectual Property (b) any material breach of these Final Terms of Service, (c) Client’s gross negligence or willful misconduct, (d) Client’s use of any Product or other results of the Services, including but not limited to use of the manufacturing process and/or Product and/or New Client Intellectual Property, and any results of research and development and/or clinical trials using any Product and/or New Client Intellectual Property, and Client’s commercialization of any such items. The Party seeking indemnification (the “Indemnitee”) must (1) provide notice to the indemnifying Party (“Indemnitor”) within thirty (30) calendar days after receipt by the Indemnitee of such claim or suit (“Third Party Claim”) or within such shorter time period as not to materially prejudice the rights of the Indemnitor; (2) allow the Indemnitor to manage and control the defense and settlement of any such third party Claim; (3) cooperate with the Indemnitor in the defense or the settlement negotiations of the third party Claim to the extent reasonably requested by the Indemnitor; and (4) abstain from making any statements or taking any actions that damage the defense against a third party Claim. The Indemnitor shall not agree to any settlement that adversely affects the Indemnitees’ rights or interests without the Indemnitees’ prior written approval, which approval shall not be unreasonably withheld, conditioned or delayed. The Indemnitor will not be responsible for any costs or expenses (including attorney fees) incurred or made by the Indemnitees without Indemnitor’s prior written consent. The Indemnitees may retain their own legal counsel at their own cost and expense. 

12. INSURANCE. Each Party shall obtain and maintain, whether through a self-insurance program or commercial policies, insurance with (i) commercial general liability coverage no less than $1,000,000 per occurrence and $2,000,000 in the aggregate, (ii) product liability coverage of no less than $5,000,000 per occurrence and in the aggregate, (iii) and (iii) at least five-year tail coverage if such policies are on a claims made basis. Each Party shall promptly, upon the other Party’s reasonable request, furnish the requesting Party with certificates of insurance evidencing such insurance. Each Party will notify the other Party in the event of any material change to any of its policies.

 

13. WARRANTIES; LIMITATIONS ON LIABILITY. ABL represents and warrants to Client that: (a) it is a duly organized and valid corporation under the laws of the State of Delaware; (b) these Final Terms of Service constitute its legal and valid obligation, enforceable against it in accordance with its terms; (c) it or its Affiliate holds all necessary permits, approvals, consents and licenses to enable it to perform the Services at the ABL’s Facility; (d) it will not in any capacity use in connection with the Services any person who has been debarred under the Generic Drug Enforcement Act, or who is otherwise precluded from the provision of the Services; (e) each cGMP batch meets the applicable Product Sterility, and was manufactured in accordance with the Manufacturing Records and cGMP. “Product Sterility” means the level of sterility required for release of a Product by ABL to Client. “cGMP” means the then-current good manufacturing practices set forth under Section 501 of the Federal Food, Drug and Cosmetic Act, Section 351 of the Public Health Service Act, and 21 C.F.R. § 210, 211 and 600 through 610 as in effect at the time when such Services are performed and to the extent applicable to such Services, as such obligations are generally interpreted and enforced by the FDA, and any other EU equivalents of the foregoing applicable to the Services at the time when such Services are performed.

Client represents and warrants to ABL that: (i) it is a corporation, duly organized and validly existing under the laws of the state of  its incorporation; (ii) these Final Terms of Service constitute a legal and valid obligation, enforceable against it in accordance with its terms; (iii) it has not misrepresented or failed to disclose any material information about the Client Technology or Client Materials or its rights therein; (iv) all testing, use, sale and distribution of the Deliverables by Client do not and will not require any filing, approval, authorization, permit or license from or with any governmental authority or other third party which has not been made or obtained, or will be timely made or obtained; (v) the use or manufacture of the Client Materials, Client Technology or Client Confidential Information, as applicable, by ABL pursuant to the terms and conditions hereof, do not misappropriate or infringe any Intellectual Property right of any third party, and no claims or actions of infringement or misappropriation have been made, brought or, to Client’s knowledge, have been threatened by a third party. EXCEPT AS AND TO THE EXTENT SPECIFICALLY PROVIDED IN THIS SECTION 13, ABL AND CLIENT MAKE NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE SUBJECT MATTER OF HEREOF, AND EACH SPECIFICALLY DISCLAIMS AND WAIVES ALL REPRESENTATIONS AND EXPRESS WARRANTIES AND ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND WORKMANSHIP. ALL WARRANTIES ARE MADE ONLY TO CLIENT AND ABL, RESPECTIVELY, AND DO NOT EXTEND TO ANY THIRD PARTY. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INDIRECT, INCIDENTAL, PUNITIVE, STATUTORY, MULTIPLE OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT LIMITATION LOSS OF PROFITS (EXCEPT FOR AMOUNTS INVOICED BY ABL IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THESE TERMS OF SALE AND NOT REASONABLY DISPUTED BY CLIENT), LOSS OF OPPORTUNITY, LOSS OF DATA, INTERRUPTION OF BUSINESS, LOSS OF GOODWILL, AND COSTS OF COVER), OR OTHER SIMILAR DAMAGES, ARISING OUT OF ANY BREACH OF THESE TERMS OF SALE OR OUT OF ANY DISPUTE RELATING THERETO, REGARDLESS OF WHETHER THE PARTY AGAINST WHICH SUCH DAMAGES ARE SOUGHT KNEW OR SHOULD HAVE KNOWN OF THE LIKELIHOOD OF SUCH DAMAGES OCCURRING. USE OF ANY OF THE RESULTS FROM THE SERVICES, INCLUDING BUT NOT LIMITED TO ANY PRODUCT OR MANUFACTURING PROCESS PRODUCED, OR ANY DATA, RESULTS OR INFORMATION DERIVED FROM THE ACTIVITIES HEREOF FOR ANY REGULATORY SUBMISSIONS OR FOR ANY OTHER RESEARCH OR COMMERCIAL PURPOSES IS DONE AT THE SOLE DISCRETION AND RESPONSIBILITY OF CLIENT. IN NO EVENT SHALL THE AMOUNT OF EITHER PARTY’S TOTAL CUMULATIVE LIABILITY UNDER THE PROPOSAL, UNDER ANY THEORY OF LAW OR EQUITY, BE IN EXCESS OF THE AMOUNTS PAID OR PAYABLE TO ABL FOR THE SERVICES RELATING TO THE DISPUTE FOR WHICH SUCH DAMAGES ARE SOUGHT AND FOR WHICH CLIENT OR ABL, AS THE CASE MAY BE, HAS BREACHED ITS OBLIGATIONS UNDER THESE FINAL TERMS OF SALE. 

14. Each Party agrees that it shall not use or disclose any business, technical and other information of the other party (the “Disclosing Party”) that is (i) not generally known or publicly available, or that is proprietary to a Party; (ii) maintained in confidence by such Party; and (iii) disclosed by such Party to the other Party in connection with the Proposal (“Confidential Information”), except as reasonably necessary to carry out the activities contemplated hereunder, and shall take all reasonable efforts to protect the Confidential Information from unauthorized use or disclosure, including restricting access to and use of such disclosed Confidential Information to only those persons to whom such access and use is reasonably necessary and who are bound by written obligations of confidentiality at least as protective as those set forth herein. This restriction on the use and disclosure of Confidential Information shall not extend to any information to the extent such information is demonstrated to be: (i) generally known in the industry or generally available to the public or otherwise part of the public domain at the time of its disclosure; (ii) independently discovered or developed by or on behalf of the receiving Party without the use of the Confidential Information; (iii) disclosed on a non-confidential basis to the receiving Party by a third party who was not making such disclosure in breach of any obligation to the Disclosing Party; (iv) already known by the receiving party (other than under an obligation of confidentiality owed to the Disclosing Party) at the time of disclosure; (v) is after disclosure made generally available to the public or otherwise part of the public domain other than through any act or omission of the receiving party in breach hereof; (vi) approved for release by the Disclosing Party in writing; and (vii) where disclosure is required by lawful governmental or judicial order, law or requirement; provided, that where reasonably possible the receiving Party notifies the Disclosing Party and reasonably assists it in avoiding or limiting such disclosure. Upon the expiration or earlier termination of the Proposal, the receiving Party shall reasonably remove the Disclosing Party’s Confidential Information from its possession, either through destruction or return to the Disclosing Party at the Disclosing Party’s written preference; provided that the receiving Party may maintain a copy of such returned or destroyed Confidential Information solely for legal archive purposes.

 

15. TERMINATION OF PROPOSAL. Either Party may terminate the Proposal (a) if the other Party breaches a material provision of the Final Terms of Service and fails to cure such breach to the reasonable satisfaction of the non-breaching Party within thirty (30) days following written notification of such breach; provided, however, that except for failures to pay monies due such thirty (30) day period shall be extended if the identified breach is incapable of cure within thirty (30) days and if the breaching Party provides a plan and timeline to cure, promptly commences efforts to cure and diligently prosecutes such cure, or (b) (i) upon the entry of a decree or order for relief by a court in an involuntary case under the Federal Bankruptcy Code, as now constituted or hereafter amended, or any bankruptcy, insolvency, reorganization, receivership or other similar law, in the United States or any other country, and the continuance of any such decree or order unstayed and in effect for a period of sixty (60) consecutive days; (ii) upon the filing by the other Party of a petition for relief under the Federal Bankruptcy Code, as now constituted or hereafter amended, or any other applicable federal or state bankruptcy, insolvency, reorganization, receivership or similar law, in the United States or any other country; or (iii) if the other Party makes an assignment for the benefit of its creditors or proposes a composition of its debts.

 If it becomes apparent to either ABL or the Client that it will not be possible to complete the Services for scientific or technical reasons, the Parties shall in good faith discuss and attempt to resolve such issue for a period of sixty (60) days. If such issues are not resolved within such period, ABL and the Client shall each have the right to immediately terminate the Proposal by notice in writing, subject to the termination charges set forth below. ABL may terminate the Proposal immediately if ABL receives notice that the provision of Services infringes a patent or other intellectual property right of a third party, and Client fails to obtain consent from such third party to continue such Services, within ninety (90) days after ABL notifying Client in writing of such alleged infringement. ABL and Client will cooperate in good faith to accommodate schedule flexibility during discussions leading up to an agreement on the Proposal for manufacturing Services. However, upon the payment of the Reservation Fee pursuant to Section 6 hereof, the manufacturing schedule becomes binding on the Parties. If the manufacturing Service is subsequently canceled by Client, or the Proposal is terminated for any reason other than by Client for ABL’s material breach or bankruptcy, Client must pay ABL a termination/cancellation fee equal to a percentage of the total cost of the manufacturing Services set forth in the Proposal subject to such cancellation or termination (excluding Acquisition Costs and project management fees), as follows: 

For Drug Substance Manufacturing Services:Notification Given:              Termination Fee:≤30 days                            100%31 – 60 days                       75%61 – 90 days                       50%

For Drug Product Manufacturing Services:Notification Given:              Termination Fee:≤30 days                            100%31-60 days                         50%

 ABL will offset against such termination/cancellation fee any Reservation Fee for such manufacturing Services previously paid. For the avoidance of doubt, the termination/cancellation fee is payable in addition to Client’s other payment obligations under the last paragraph of this Section 15. If, after the payment of the Reservation Fee, Client requests that the manufacturing Services to be performed under the Proposal be postponed or rescheduled, Client shall pay ABL a postponement/rescheduling fee equal to a percentage of the total cost of the manufacturing Services set forth in the Proposal subject to such postponement or rescheduling (excluding all Acquisition Costs and project management fees), as follows: 

For Drug Substance Manufacturing Services:Notification Given:              Termination Fee:≤30 days                            100%31 – 60 days                       75%61 – 90 days                       50%

For Drug Product Manufacturing Services:Notification Given:              Termination Fee:≤30 days                            100%31-60 days                         50%

 The postponement/rescheduling fee is payable in addition to Client’s other payment obligations under the last paragraph of this Section 15. ABL will offset against the postponement/rescheduling fee the Reservation Fee for such Services previously paid by Client, and as a result of such offset Client must pay a new Reservation Fee upon execution of a Modification re-scheduling the performance of the Services. Upon termination of the Proposal in accordance with this Section 15, ABL shall be entitled to payment of all fees that have accrued as of the date of termination. All outstanding invoices for the foregoing, including any termination fee, shall be immediately due upon receipt by the Client. Upon satisfaction of all payment obligations due by Client to ABL, ABL shall deliver all deliverables generated up to the termination date and paid for by Client. If Client provides Client Materials to ABL under the Proposal and to the extent any such Client Materials remain at the expiration or earlier termination of the Proposal, ABL shall destroy such Client Materials or return the same to Client, at Client’s sole cost and expense, within thirty (30) days of such expiration or termination. The rights and obligations under Articles 1, 10 – 16 and 19 shall survive the expiration or earlier termination of the Final Terms of Service, together with all other provisions that by their plain meaning are intended to survive, for as long as necessary to effectuate their purposes and shall bind the Parties and their representatives, successors and assigns. 

16. DISPUTE RESOLUTION. If a dispute between the Parties cannot be resolved by the Parties’ authorized contacts, the chief executive officer of each Party shall meet and in good faith attempt to resolve the dispute. If they are unable to resolve such a dispute, except for an Excluded Claim, the Parties shall submit the dispute to binding arbitration in accordance with the Rules of Commercial Arbitration of the American Arbitration Association, to be conducted by a single arbitrator mutually acceptable by both Parties in writing, or if there is no such mutually acceptable arbitrator, the arbitrator will be chosen by the American Arbitration Association. The arbitrator shall be an individual with training and expertise in the drafting, performance and interpretation of biopharmaceutical manufacturing and supply agreements. Judgment upon the award rendered by the arbitrator shall be binding, final, and non-appealable and may be entered by any court having jurisdiction thereof. All proceedings and communications shall be in English. The arbitrator may grant legal, equitable, and monetary relief. The arbitrator shall award to the substantially prevailing Party such Party’s costs and expenses incurred in connection with the arbitration and the collection of the award, including reasonable attorneys’ fees. Except to the extent necessary to confirm an award or as may be required by law, neither a Party nor the arbitrator may disclose the existence, content, or results of an arbitration without the prior written consent of all Parties.

 These Final Terms of Service shall be governed by and construed under the laws of the State of Delaware, without regard to its conflict of laws provisions. The Proposal is for the performance of Services only and not for the sale of goods, and neither the Uniform Commercial Code as adopted in the State of Delaware, nor the United Nations Convention on Contracts for the International Sale of Goods shall apply. “Excluded Claim” shall mean a dispute, controversy, or claim that concerns: (a) the validity or infringement of a patent, trademark, or copyright; or (b) any antitrust, anti-monopoly, or competition law or regulation, whether or not statutory; or (c) the use or practice of inventions or other intellectual property that is otherwise governed by federal law or the applicable foreign equivalent thereof. All Excluded Claims shall be brought in the state or federal courts of the State of Maryland, and the Parties hereby waive any objections to the personal jurisdiction or venue of such courts. 

17. FORCE MAJEURE. Neither Party shall be held liable or responsible for its failure or delay to perform or fulfill any of its obligations hereunder, except for incurred payment obligations, to the extent such failure or delay is due to circumstances beyond that Party’s reasonable control and is not due to such Party’s breach of these Final Terms of Service, including earthquakes, acts of war or terrorism, embargoes, epidemics, strikes, judicial or governmental regulation or order, fire, flood, labor difficulties, interruption of supply of key raw materials for reasons un-attributable to a Party, and acts of God. Each Party agrees to notify the other Party within three (3) business days following its first knowledge of any such force majeure event, as to the nature thereof and the extent to which the affected Party expects to be unable to fully perform its obligations hereunder. The Party experiencing any such event agrees to use commercially reasonable efforts to correct or mitigate the force majeure event as soon as commercially practicable and to give the other Party periodic updates about when it expects to be fully able to perform such obligations.

 

18. ANTI-CORRUPTION LAWS. Each Party represents to the other Party that neither it nor any of its subsidiaries, nor any of their respective directors, officers, employees or agents (all of the foregoing, including affiliates collectively, “Representatives”) has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), the  Convention on Combating Bribery of Foreign Public Officials in International Business Transactions adopted by the Negotiating Conference of the Organization for Economic Co-operation and Development on 21 November 1997 (the “OECD Convention”), the French “Sapin II Law,” the U.K. Bribery Act of 2010 (“Bribery Act”), or any other applicable anti-corruption laws, rules or regulations (collectively with the FCPA, the OECD Convention and the Bribery Act, the “Anti-Corruption Laws”). Each Party further represents, warrants and covenants that they have conducted and will conduct their businesses in compliance with the Anti-Corruption Laws. Each Party represents, warrants and covenants it has necessary procedures in place to prevent bribery and corrupt conduct by its representatives. Without limiting any other remedies at law or at equity, a Party may, at its sole discretion, terminate the Proposal for any violation of the Anti-Corruption Laws by the other Party.

 

19. No amendment to the Final Terms of Service shall be effective unless mutually agreed by the Parties and in writing and signed by authorized individuals for both Parties. Waivers of any obligation hereunder shall not be effective unless in writing and signed by an authorized individual for the Party giving the waiver, and no course of dealings shall act as a waiver or amendment hereof. The failure of either Party to assert any of its rights hereunder shall not be deemed to constitute a waiver of that Party’s right thereafter to enforce each provision hereof. The Final Terms of Service constitute the entire, final, complete and exclusive agreement between the Parties with respect to the subject matter hereof, and supersede all previous written, oral or other agreements, representations, advertisements, proposals, reports with respect to such subject matter. In the event any provision hereof is held to be invalid or unenforceable, such provision shall, to the extent of such invalidity or enforceability, be severed from these Final Terms of Service without in any way affecting the remainder of such provision or any other provision hereof, all of which shall continue in full force and effect.

ABL is an independent contractor to Client, and the Parties do not establish any form of fiduciary, agency, joint venture, partnership, employment, or any other form of relationship for any purpose hereunder. Neither Party shall have or represent itself as having any authority to enter into any contracts in the name of or on behalf of the other Party, or in any way bind the other Party, without the express prior written consent of such Party. The Final Terms of Service are not intended to benefit any person other than the Parties, and no such person shall have any right to enforce these terms or obtain any remedy for their breach unless otherwise expressly provided for herein. Except in connection with the sale of all or substantially all of either Party’s business or assets, whether direct or indirect, by purchase, merger, consolidation, operation of law or otherwise, any attempted assignment of the rights or delegation of the obligations under these Final Terms of Service shall be void without the prior written consent of the non-assigning or non-delegating Party; provided that ABL may subcontract or delegate its obligations as otherwise provided hereunder.