Joint Development, Marketing & Distribution Agreement

EXHIBIT 10.15



["****" indicates material omitted and filed separately with the Securities and

Exchange Commission pursuant to a request for confidential treatment.]





JOINT DEVELOPMENT,



MARKETING AND DISTRIBUTION AGREEMENT





PALL CORPORATION





V.I. TECHNOLOGIES, INC.







FEBRUARY 19, 1998





THIS FORM OF AGREEMENT IS SUBJECT TO REVISION UPON APPROPRIATE NOTIFICATION AND SHALL BE KEPT CONFIDENTIAL PURSUANT TO THE TERMS OF THE MUTUAL NON-DISCLOSURE AGREEMENT ENTERED INTO BETWEEN PALL CORPORATION AND V.I. TECHNOLOGIES, INC. AS OF MARCH 21, 1997.

TABLE OF CONTENTS



BACKGROUND 1



ARTICLE I DEFINITIONS......................................................... 1



Section 1.01 Defined Terms............................................... 1

Section 1.02 Other Definitional Provisions............................... 6



ARTICLE II COOPERATIVE DEVELOPMENT............................................ 7



Section 2.01 Cooperative Development..................................... 7

Section 2.02 Management Board............................................ 7

(a) Constitution.................................................... 7

(b) Voting.......................................................... 7

(c) Deadlock........................................................ 7

(d) Responsibilities of Management Board............................ 7

Section 2.03 Review of Project Plan, Budget and Timetable................ 9

Section 2.04 Exchange of Information..................................... 9

Section 2.05 Inventions.................................................. 9

(a) Joint Inventions................................................ 9

(b) Sole Inventions................................................. 9

(c) Patent Prosecution of Inventions................................10

Section 2.06 Cost-Sharing................................................10

(a) Cost-Sharing Generally..........................................10

(b) Recordkeeping...................................................10

(c) Management Board Costs..........................................10

Section 2.07 Budget Contingencies........................................10

(a) Exceeding Previously Established Budget.........................10

(b) Reconciliation of Expenditures..................................11

Section 2.08 Responsibilities of Parties.................................11



ARTICLE III SUPPLY OF VITEX INACTIVATION COMPOUNDS AND SYSTEM MANUFACTURING...11



Section 3.01 Pall Responsibilities.......................................11

Section 3.02 Vitex Responsibilities......................................11

Section 3.03 Reference Set Production....................................12

Section 3.04 Systems Specifications......................................12

Section 3.05 Vitex Specifications........................................12

Section 3.06 Source of Supply............................................12

Section 3.07 Failure of Vitex to Meet Pall Requirements..................12



Section 3.08 System Improvements......................................... 13



ARTICLE IV MARKETING AND EXCLUSIVE DISTRIBUTION RIGHTS........................ 13



Section 4.01 Appointment as Exclusive Distributor........................ 13

Section 4.02 Meetings Concerning Marketing............................... 13

Section 4.03 Responsibilities of the Parties during the Exclusive

Distributorship Period...................................... 13

(a) Pall Responsibilities........................................... 13

(b) Vitex Responsibilities.......................................... 13

Section 4.04 Revenue Sharing............................................. 14

Section 4.05 NYBC....................................................... 14



ARTICLE V PATENTS, KNOW-HOW, AND LICENSE GRANTS............................... 14



Section 5.01 Vitex Sole Ownership........................................ 14

Section 5.02 Pall Sole Ownership......................................... 14

Section 5.03 Regulatory Files............................................ 14

Section 5.04 License of Vitex Patents and Vitex Know-How................. 15



ARTICLE VI PROSECUTION OF PATENT RIGHTS....................................... 15



Section 6.01 Vitex Patents............................................... 15

Section 6.02 Pall Patents................................................ 15

Section 6.03 Joint Patents............................................... 15

Section 6.04 Material; Review and Comment................................ 15

Section 6.05 Election Not to Pay Expenses................................ 15



ARTICLE VII TRADEMARKS........................................................ 16



Section 7.01 Pall Trademarks............................................. 16

Section 7.02 Vitex Trademarks............................................ 16



ARTICLE VIII REGULATORY REQUIREMENTS.......................................... 16



Section 8.01 Recalls..................................................... 16

Section 8.02 Compliance With Other Regulatory Requirements............... 17

Section 8.03 Press Releases.............................................. 17



ARTICLE IX CONFIDENTIAL INFORMATION........................................... 18



Section 9.01 General..................................................... 18



Section 9.02 Exceptions.................................................. 18

Section 9.03 Survival.................................................... 19



ARTICLE X ADDITIONAL SYSTEMS.................................................. 19



ARTICLE XI REPORTS............................................................ 19



Section 11.01 Quarterly Sales Reports.................................... 19

Section 11.02 Cost of Goods/Reference Revenue............................ 20

Section 11.03 Vitex Reports.............................................. 20



ARTICLE XII BOOKS AND RECORDS................................................. 20



Section 12.01 Records.................................................... 20

Section 12.02 Retention.................................................. 20



ARTICLE XIII TERM AND TERMINATION............................................. 21



Section 13.01 Term....................................................... 21

Section 13.02 Termination by Agreement................................... 21

Section 13.03 Termination for Cause...................................... 21



ARTICLE XIV REPRESENTATIONS, WARRANTIES, COVENANTS

AND INDEMNITIES............................................................... 22



Section 14.01 Vitex Representations...................................... 22

Section 14.02 Vitex Indemnification: Representations and Warranties...... 25

Section 14.03 Vitex Indemnification: Products............................ 25

Section 14.04 Material Breach: Patents................................... 26

Section 14.05 Vitex Insurance............................................ 26

Section 14.06 Pall Representations....................................... 26

Section 14.07 Pall Indemnification: Representations and Warranties....... 28

Section 14.08 Pall Indemnification: Products............................. 28

Section 14.09 Pall Insurance............................................. 28

Section 14.10 Covenants and Assurances of Pall and Vitex................. 28

(a) Mutual Covenants of the Parties................................. 28

(b) Covenants of Vitex.............................................. 29



ARTICLE XV INFRINGEMENT....................................................... 30



Section 15.01 Defense of Third Party Infringement Suits.................. 30

Section 15.02 Third Party Patent Expenses................................ 30



Section 15.03 Suits for Infringement by Others........................... 31

(a) Joint Patents................................................... 31

(b) Vitex Patents; Vitex Know-How; Pall Patents; Pall Know-How...... 31



ARTICLE XVI MISCELLANEOUS..................................................... 32



Section 16.01 Notices.................................................... 32

Section 16.02 Entire Agreement........................................... 33

Section 16.03 Amendments................................................. 33

Section 16.04 Deadlocks: Governing Law; Arbitration...................... 33

Section 16.05 Disputes Other than Deadlocks.............................. 33

Section 16.06 Assignment................................................. 34

Section 16.07 Binding Effect............................................. 34

Section 16.08 Waivers.................................................... 34

Section 16.09 Partial Invalidity......................................... 34

Section 16.10 Severability............................................... 34

Section 16.11 Governing Law; Consent to Jurisdiction..................... 34

Section 16.12 Costs and Attorneys' Fees.................................. 35

Section 16.13 Counterparts............................................... 35





Page [Section]

Exhibits Reference

-------- --------------



Exhibit A - Pall Patents 4 [Article 1]

Exhibit B - Vitex Patents 6 [Article 1]

Exhibit C - Cooperative Development Exceptions 7 [2.01]

Exhibit D - Vitex Representation Exceptions 22 [14.01]

Exhibit E - Amendment to Exclusive License 24 [14.01(h)]

Agreement (#5) For Virally Inactivated

Cellular Products

Exhibit F - License Agreements to be Amended 29 [14.10(b)]











["****" indicates material omitted and filed separately with the Securities and

Exchange Commission pursuant to a request for confidential treatment.]



THIS JOINT DEVELOPMENT, MARKETING AND DISTRIBUTION AGREEMENT (the "Agreement") is made between PALL CORPORATION, a New York corporation ("Pall") with principal offices at 2200 Northern Blvd., East Hills, New York 11548, and V.I. TECHNOLOGIES, INC., a Delaware corporation ("Vitex") with principal offices at 155 Duryea Road, Melville, New York 11747, dated as of the 19th day of February, 1998.





Vitex has developed proprietary compounds for the inactivation of viruses and pathogens for the decontamination of certain blood products. Pall has developed a variety of filtration products including those relating to the collection, preservation, processing, manipulation, storage and treatment of blood and blood components.



Pall and Vitex wish to combine their efforts and resources in the development and commercialization of systems consisting of instrumentation, disposables and compounds for use in the inactivation of viruses and pathogens for the decontamination of red blood cells and/or platelets in either whole blood, packed red cells, platelet concentrates or apheresis platelets.



ARTICLE I



-----------



SECTION 1.01 DEFINED TERMS. The capitalized words in this Agreement

------------- shall have the meanings assigned to them in this Article I.



"AFFILIATE" with respect to any Person, means any other Person that

----------- directly or indirectly, through one or more intermediaries, controls or is controlled by or is under common control with the Person specified.



"CARRYING COSTS" means the cost of capital employed (including

---------------- inventory plus receivables plus net fixed assets used in or dedicated to the development, manufacture, marketing and distribution of the Systems, less payables), which shall be calculated on the last day of the previous fiscal quarter of Pall by multiplying such capital by the prevailing Federal Funds rate as adjusted from time to time, as published in The Wall Street Journal and

----------------------- determined on the first day of each fiscal quarter of Pall.



********** ************ **** ***** * ******* ********** **

**************************** ************ ******** ******** **** * ********* *** ** *** ***** ******** ** * ********* ****



"COOPERATIVE DEVELOPMENT WORK" means the Cooperative Development Work

------------------------------ defined in Section 2.01 of this Agreement.







["****" indicates material omitted and filed separately with the Securities and

Exchange Commission pursuant to a request for confidential treatment.]



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*************** ********** ******** *** * ********* ************ *** ** ** ************ ********* ********* *** *** ******* ** ***** ************ ********* ********* *** ************* ****** ******* ******** ******** *** ************ ****** **** **** ***** ** ** ********** ** ********** **** **** *** ****** ** ******* *** *** **** *** *** ***** ********** ******* ** ******* ** * ********** ***** *** ** ******** ** *** ********** ****** ********* ******** **** **** ** ***** *****

******** ******** *** ******* *** ******* ******** ** ************ ******** ******* ** ***** ******* ******** ** ************ ******** ******* ******* ** **** ********** ****** *** ********** ********* ** ******* ***** ** **** *********** ******* ************ *** ********** ****** ********* *** *********** ************* ******** ***** **** *** ******** *** ******** ** **** ** ***** ** ******** ** *** ********** ******



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*** ** *** ************ ******** ** **** ** * *********** ***** ****** **** ** ****** **



*** ** *** ************ ******** ** **** ** * **** ** * ********* ************ **** ****** **** ** ***** *** *** ************ ******** **** ****** ********* ********



"DOLLARS" AND "$" means dollars in lawful currency of the United

----------------- States of America.



"FDA" means the United States Food and Drug Administration.

-----



"FULLY ALLOCATED MANUFACTURING COST" means the cost of direct

------------------------------------ materials, direct labor (which includes fringe benefits), other direct manufacturing costs, including, but not limited to, factory costs, and indirect costs, such as supervisory and support labor, supplies, utilities, machinery and equipment maintenance costs (including associated depreciation) and plant operating and maintenance costs (including associated depreciation).



"GAAP" means generally accepted accounting principles in the United

------ States of America in effect from time to time as applied by Pall or Vitex, as the case may be, on a consistent basis.



"GOOD MANUFACTURING PRACTICES" means "good manufacturing practices" as

------------------------------ defined by the FDA (including under 21 C.F.R. Part 820), or other Governmental Authority with respect to the Vitex Inactivation Compounds.



["****" indicates material omitted and filed separately with the Securities and

Exchange Commission pursuant to a request for confidential treatment.]



"GOVERNMENTAL AUTHORITY" means any nation or government, any state or

------------------------ other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.



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"INSTRUMENTATION" means light boxes developed and manufactured by or

----------------- for Vitex which are part of the Systems necessary for activating the Vitex Inactivation Compounds.



"INVENTIONS" means any and all technical information, applications,

------------ data or knowledge developed or acquired in the performance of or through cooperation under this Agreement, including but not limited to operating conditions, process designs, specifications, drawings, devices, technology, discoveries and know-how relating thereto, whether or not these would be patentable.



"JOINT PATENTS" means patents which have been obtained for a Joint

--------------- Invention in accordance with Section 6.03 of this Agreement.



"KNOWLEDGE" means the actual knowledge of any executive officer of

----------- Pall or Vitex.



"LOSS" for any given System configuration means the amount by which

------ the sum of (i) Carrying Costs, (ii) Pall's Costs of Goods/Reference Revenue, (iii) Pall's Marketing and Administrative Expenses and (iv) Vitex's Cost of Goods exceeds Net Sales.



"MANAGEMENT BOARD" means the Management Board created pursuant to

------------------ Section 2.02 of this Agreement.



"MARKETING AND ADMINISTRATIVE EXPENSES" for Pall in any calendar year

--------------------------------------- means Pall's costs incurred for the marketing, selling and administering (customer support) of the Systems, as the Management Board shall approve from time to time.



"NET SALES" means the amount invoiced by Pall for sales of either a

----------- *****************************************************************; less credits or allowances, if any, for rejections or returns; less customary trade discounts actually given; less customs and duties paid; less bad debts; less separately invoiced and actually incurred taxes and other charges of any Governmental Authority that are imposed directly on or measured by the sale, transfer, transportation, delivery or use (but excluding taxes on net income). ********* ******************************************************************************** ******************************************************************************** ****************************************************************







["****" indicates material omitted and filed separately with the Securities and

Exchange Commission pursuant to a request for confidential treatment.]



*** ***** ********* ************* **** ** *** ****** **** ** ********** **** ** *** **** ***** ********** ******** ** *** ********** ******



"PALL KNOW-HOW" means unpatented inventions, applications, data,

--------------- processes, compositions, techniques and other technical information proprietary to Pall, which are solely owned by Pall or which Pall has the right to control the use of, relating to the Systems, including methods for manufacture ********* ************************************************ or any portions thereof.



"PALL PATENTS" means all United States and foreign patent applications

-------------- and patents that relate to the Systems or any portion thereof or methods for manufacture or use thereof, owned by Pall or licensed to Pall with the right to sublicense and claiming an invention conceived solely by employees and/or agents and/or licensors of Pall both prior to the date of this Agreement and during the term of this Agreement pursuant to the Cooperative Development Work, including any continuations, divisions, reissues, re-examinations and all foreign counterparts thereof, as set forth in Exhibit A hereto.

---------



"PALL'S FIELD OF USE" means filtration, separation, filters, filter

--------------------- media and supports and their design and manufacture.



"PERSON" means any individual, corporation, partnership, association,

-------- joint-stock company, trust, unincorporated association, joint venture or Governmental Authority.



"PROFIT" for any given System configuration means Net Sales minus

-------- ******** ****** ***** *** ********* *** *** *** ****** **** ** *************** ******* **** **** ****** ********* *** ************** ******** **** ***** ******* **** ** ******



"PROJECT PLAN" means the project plan detailing the responsibilities

-------------- of the parties and the projected milestones for the Cooperative Development Work as approved by the Management Board and as amended from time to time by the Management Board.



"REFERENCE REVENUE" means for any ********* ************ *** ** ***

------------------- ***** ***** *** ******* *** ***** ***** ** * **** * ********* *** ** * **** ** ********* **** ** *** **** *** ** ***** ****** ********* *** ************** ******** ** ********** **** **** ********* *****, based on sales during the three calendar months prior to the date of determination, or, in the case of **** *** ********* ************ **** ***** ** ***** ** **** * ********* **** ** **** ** ********* ***** ** ************ during the three calendar months prior to the first sale of such ********* ************ *** (the "Initial Reference Revenue"). Reference Revenue shall be determined once every three months.



******************************************************************* ****





["****" indicates material omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.]



"REGULATORY APPROVALS" means (1) in the United States, approval from

---------------------- the FDA for marketing and promotion of the System, or (2) outside of the United States, an analogous order by a non-U.S. Governmental Authority which requires regulatory approval prior to marketing and promotion of a System in such non- U.S. country.



"REVENUE SHARING PAYMENTS" means the payments described in Section

-------------------------- 4.04.



"SPECIFICATIONS FOR THE VITEX INACTIVATION COMPOUNDS" means the

----------------------------------------------------- performance, quality and reliability standards which the Management Board requires for the Vitex Inactivation Compounds to be acceptable for commercial implementation, promulgated by the Management Board in accordance with Section 2.02(a) of this Agreement and in conformity with any applicable FDA requirements. Such Specifications shall include a provision that the Vitex Inactivation Compounds be made according to Good Manufacturing Practices or (if Vitex shall elect to manufacture the Vitex Inactivation Compounds outside the United States) other applicable regulatory authority.



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*************************************************************** **************************************************************



"SYSTEMS SPECIFICATIONS" means such performance, cost, quality and

------------------------ reliability requirements as the Management Board agrees must be met by a System in order for the System to be acceptable for marketing and distribution under this Agreement.



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"VITEX INACTIVATION COMPOUNDS" means the compounds developed by ...