Master Alliance Provisions Guide (MAPGuide)

Ocugen-BBIL, COVID-19 Vaccine (Covaxin), Co-development, Supply & Commercialization Agreement

  • Business model | Benefit sharing
  • Business model | Payment Structures

Definitions

Net Sales” means the gross amount actually received by Ocugen, any of its Affiliates or Sublicensees (each, a “Seller”) for Sales of the Product to third parties in the Ocugen Territory less the following accrued deductions (if and to the extent included in and not already deducted from the gross amounts invoiced or otherwise charged):

(a) [***];

(b) [***];

(c) [***];

(d) [***];

(e) [***];

(f) [***];

(g) [***].

Each of the above deductions to Net Sales shall be calculated in accordance with GAAP. In addition, if any Seller effects a sale, disposition or transfer of the Product to a customer in the Ocugen Territory other than on customary commercial terms or as part of a package of products and services, the Net Sales of such Product to such customer shall be deemed to be “the fair market value” of such Product, where “fair market value” means the value that would have been derived had the Product been sold as a separate product to another customer in the applicable country on customary commercial terms.

Sale” means any transaction for which consideration is received by Ocugen, its Affiliates or Sublicensees for sale, use, lease, transfer or other disposition of the Product to or for the benefit of a third party. For clarity, the sale, use, lease, transfer or other disposition of the Product by Ocugen or any of its Affiliates or Sublicensees to another of these entities for resale by such entity to a third party shall not be deemed a Sale, provided such resale by these entities to or for the benefit of a third party has not occurred. For further clarity, the sale, transfer or other disposition of the Product by Ocugen or any of its Affiliates orSublicensees to a wholesaler or a distributor for resale by such wholesaler or distributor shall not be deemed a Sale hereunder; but rather, the sale by the wholesaler or distributor to the end user shall be treated as a Sale by Ocugen, its Affiliates or Sublicensee, as applicable. For purposes of this definition, “Sale” shall not include the sale, transfer or disposition of the Product (a) for research, preclinical, clinical, Development or regulatory purposes (including for use in Clinical Trials or pre-clinical studies); or (b) for a bona fide charitable purpose, including so-called “treatment IND sales,” “named patient sales,” “expanded access program” or“compassionate use sales” or to physicians or hospitals for promotional purposes (including free samples to a level and in an amount which is customary in the industry or which is reasonably proportional to the market for the Product).

4. Co-Development of the Product

4.5. Costs of Development. BBIL is solely responsible for all costs and expenses associated with the performance of the BBIL Development Activities and the Development of the Product in the Field in and for the BBIL Territory and Ocugen is solely responsible for all costs and expenses associated with the performance of the Ocugen Development Activities and the Development of the Product in the Field in and for the Ocugen Territory.

8. Profit Share

8.1. Profit Share. The Parties will share in Operating Profit with respect to Sales of the Product by Ocugen, its Affiliates and Sublicensees in the Field in and for the Ocugen Territory as follows: Ocugen will be entitled to forty-five percent(45%) and BBIL will be entitled to fifty-five percent (55%) thereof (the “Profit Share”). Procedures for calculating the Profit Share on a Calendar Quarter basis and other finance and accounting matters, are set forth in Exhibit B attached hereto, and to the extent not set forth in Exhibit B or elsewhere in this Agreement, will be established by the JSC.

8.2. Sales Reports; Payments. Within [***] after the end of each of the first three Calendar Quarters of each Calendar Year (each such report, a “Quarterly Report”) and [***] after the end of each such Calendar Year (each such report, an “Annual Report”), Ocugen shall provide a written report to BBIL showing:(a) the gross Sales and Net Sales of the Product in and for the Ocugen Territory through the end of such Calendar Quarter (or Calendar Year, if applicable); (b) the total amount of deductions from gross Sales taken to determine Net Sales of the Product in and for the Ocugen Territory for such Calendar Quarter (or Calendar Year, if applicable); (c) a calculation of Operating Profit in accordance with Exhibit B for such Calendar Quarter (or Calendar Year, if applicable), and (d) a calculation of the Profit Share payable to BBIL in respect of such Calendar Quarter (or Calendar Year, if applicable). In addition, each Annual Report will include any applicable adjustments to Operating Profit reported in the Quarterly Reports for such Calendar Year. Ocugen shall pay any Profit Share owed to BBIL within [***] after the end of each of the first three Calendar Quarters of each Calendar Year and [***] after the end of such Calendar Year in which Sales of the Product by Ocugen, its Affiliates or Sublicensees occur in the Ocugen Territory, commencing with the Calendar Quarter in which the First Commercial Sale of the Product in the Ocugen Territory occurs. To the extent that the actual Operating Profit for the first three Calendar Quarters of any Calendar Year were in excess of the Operating Profit included in the applicable Quarterly Reports, Ocugen will pay to BBIL, within [***] after the end of the applicable Calendar Year, an amount equal to the Profit Share on such excess. To the extent that the actual Operating Profit for the first three Calendar Quarters of any Calendar Year were less than the Operating Profit included in the applicable Quarterly Reports, Ocugen may apply the amount of any overpayment as a credit against any Profit Share that may be payable to BBIL within [***] after the end of the applicable Calendar Year, or if no Profit Share is payable, against the future Profit Share payments owed to BBIL under this Agreement. If no such future Profit Share payments are payable, then BBIL shall refund the overpayment to Ocugen within [***] after the end of such Calendar Year.

[…]

8.5. Books and Records; Audit. Ocugen and its Affiliates and Sublicensees shall keep and maintain for [***] from the end of the Calendar Year in which such Net Sales occur (the “Retention Period”) materially complete and accurate records of gross Sales and Net Sales of the Product in the Ocugen Territory by, as applicable, Ocugen, its Affiliates and Sublicensees, in sufficient detail to allow Operating Profit and the Profit Share to be determined accurately. BBIL shall have the right during the applicable Retention Period, and at its cost, through an independent certified public accountant reasonably acceptable to Ocugen, to audit the relevant records of Ocugen, its Affiliates and Sublicensees to verify that the amount of such payment was correctly determined. Ocugen, its Affiliates and Sublicensees shall each make its records reasonably available for audit by such independent certified public accountant during regular business hours at such place or places where such records are customarily kept, upon [***] written notice from BBIL. Such audit right shall not be exercised by BBIL more than [***] or more than [***]. All records made available for audit shall be the Confidential Information of Ocugen. The results of each audit, if any, shall be binding on both Parties absent manifest error. In the event there was an underpayment by Ocugen hereunder, Ocugen shall promptly (but in any event no later than[***] after Ocugen’s receipt of the report so concluding) make payment to BBIL of any shortfall. BBIL shall bear the full cost of such audit unless such audit discloses an underreporting by Ocugen of the higher of (a) [***], or (b) [***] during the period audited, in which case Ocugen shall reimburse BBIL for all reasonable costs incurred by BBIL in connection with such audit. In the event the auditor finds an overpayment by Ocugen, Ocugen shall have the right to deduct the overpayment from any Profit Share Payment due to BBIL by Ocugen or, if no such future Profit Share payments are payable, then BBIL shall refund the overpayment to Ocugen within [***] after BBIL receives the audit report.