Common use of Post-Effective Date Affiliates Clause in Contracts

Post-Effective Date Affiliates. In the event a Party enters into any transaction (a “Subject Transaction”) whereby a Third Party that is engaged in activities that would otherwise be prohibited by Section 3.8(a) or (b) (the “Competing Activities”) becomes an Affiliate of such Party or merges with such Party (such Affiliate or, in the event of a merger the portion of the business which is not the Party’s business immediately prior to the Subject Transaction, in each such case the “Post-Execution Other Business”), then such Party (the [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. “Notifying Party”) shall provide notice to the other Party (the “Other Party”), within five (5) Business Days of the closing of the Subject Transaction, specifying the identity of the Post-Execution Other Business and describing in reasonable detail, to the extent permitted by Law and without disclosing any proprietary information, the Competing Activities and their focus. Such notice shall also state whether the Notifying Party elects to: (A) Divest the Competing Activities; (B) if Hospira is the Notifying Party, assign all of its rights and obligations under this Agreement to a Third Party (and such assignment shall not require the prior written consent of Pfenex pursuant to Section 13.6; provided, that such Third Party either (1) has a market capitalization of at least five (5) billion dollars and a sales force that will sell the Product at least as large as the sales force that Hospira has at the time of such assignment, or (2) has been approved as an acquiror of Hospira’s rights and obligations under this Agreement by the FTC and/or the DOJ in connection with a divestiture of assets); (C) keep separate all of the Competing Activities not so included within the activities under this Agreement; or (D) cease engaging in the Competing Activities within ninety (90) days following the consummation of the Subject Transaction; provided, that: (i) The Notifying Party shall not have the right to make the election described under clause (C) above if forty percent (40%) or more of the Post-Execution Other Business’ business immediately prior to the Subject Transaction consists of the Competing Activities (as measured by percentage of both research and development spend and revenue with respect to the Competing Activities when compared to the research and development spend or revenue, as applicable, of the Post-Execution Other Business in total for the trailing twelve month period ending upon the consummation of the Subject Transaction). (ii) In the event the Notifying Party elects the option described in clause (C) above, then (I) the Notifying Party shall not have the right to exercise any of its rights or fulfill any of its obligations hereunder through such Post-Execution Other Business, (II) such Post-Execution Other Business shall not receive any license or other right under any Pfenex Technology for any Competing Activities, (III) the Other Party shall not have any license under any Patents or Know-How controlled by the Post-Execution Other Business that was not licensed to the Other Party prior to the Subject Transaction, (IV) the Notifying Party shall maintain capacity and resources that are reasonably necessary for the Notifying Party to fulfill its obligations hereunder, to the extent the Notifying Party was required to maintain such capacity and resources had the Subject Transaction not occurred, and (V) the Notifying Party shall use its Commercially Reasonable Efforts to put procedures and mechanisms in place to separate its activities under this Agreement and the Competing Activities, including preventing any disclosure of the Confidential Information of the Other Party to the Post-Execution Other Business and to prevent receipt or use for activities under the Agreement of any technology or proprietary information of the Post-Execution Other Business. (iii) In the event the Notifying Party elects the option described in clause (A) or (B) above, then the Notifying Party shall Divest the Competing Activities or all of its rights and obligations under this Agreement (as applicable, the “Divestible Asset”) as soon as reasonably practicable following the Subject Transaction. For purposes of this Section 3.8(d), “Divest” means, with respect to the Divestible Asset, (y) the sale, exclusive license or other transfer of all of the right, title and interest in and to such Divestible Asset, including all [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. technology, intellectual property and other assets relating solely thereto, to an Third Party (other than the Post-Execution Other Business), without the retention or reservation of any rights, license or interest (other than solely an economic and other customary termination interests) by the Notifying Party or Post-Execution Other Business in such Divestible Asset and (z) the complete shutdown of the Divestible Asset such that no technology, intellectual property or other asset solely relating thereto is used by the Notifying Party or its Affiliates and delivery of written confirmation from the Notifying Party to the Other Party that the Notifying Party and its Affiliates covenant not to use any technology, intellectual property and assets solely relating to such Divestible Asset during the Term of this Agreement.

Post-Effective Date Affiliates. In the event a Party enters into any transaction (a “Subject Transaction”) whereby a Third Party that is engaged in activities that would otherwise be are prohibited by under Section 3.8(a) or 7.4 above (b) (the such activities, a “Competing ActivitiesProgram”) becomes an Affiliate of such Party or merges with such Party after the Effective Date (such Affiliate orAffiliate, in the event of a merger the portion of the business which is not the Party’s business immediately prior to the Subject Transaction, in each such case the “Post-Execution Other BusinessAffiliate”), then such Party (the [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. “Notifying Party”) shall provide notice to the other Party (for purposes of this Section 7.4.3, the “Other Party”), within five (5) Business Days business days of the closing of the Subject Transaction, specifying the identity of the Post-Execution Other Business Affiliate and describing in reasonable detail, to the extent permitted by Law law and without disclosing any proprietary information, the Competing Activities Program and their its focus. Such notice shall also state whether the Notifying Party elects to: (Ai) Divest include all or part of the Competing Activities; (B) if Hospira is Program within the Notifying Party, assign all of its rights and obligations activities under this Agreement to a Third Party on the terms and conditions herein, (and such assignment shall not require the prior written consent of Pfenex pursuant to Section 13.6; provided, that such Third Party either (1ii) has a market capitalization of at least five (5) billion dollars and a sales force that will sell the Product at least as large as the sales force that Hospira has at the time of such assignment, Divest all or (2) has been approved as an acquiror of Hospira’s rights and obligations under this Agreement by the FTC and/or the DOJ in connection with a divestiture of assets); (C) keep separate all any portion of the Competing Activities Program not so included within the activities under this the Agreement; or (Diii) cease engaging in keep separate all or any portion of the Competing Activities Program not so included within ninety the activities under the Agreement (90) days following if the consummation Notifying Party does not include all of the Subject TransactionCompeting Program within the activities under this Agreement, the portion of such Competing Program not so included shall be Divested under subsection (ii) or kept separate under subsection (iii)); provided, provided that: (ia) The the Notifying Party shall not have the right to make the election described under clause (Ciii) above if forty twenty percent (4020%) or more of the Post-Execution Other Business’ Affiliate’s business immediately prior to the Subject Transaction consists of the Competing Activities Program (as measured by percentage of both research and development spend and or revenue with respect to the Competing Activities Program when compared to the research and development spend or revenue, as applicable, other assets of the Post-Execution Other Business in total for the trailing twelve month period ending upon the consummation of the Subject TransactionAffiliate’s business)., or (iib) In in the event of the Notifying Party elects the option described in clause (C) aboveiii), then (I) the Notifying Party shall not have the right to exercise any of its rights or fulfill any of its obligations hereunder through such Post-Execution Other BusinessAffiliate, (II) such Post-Execution Other Business Affiliate shall not receive any license or other right under any Pfenex the NovaCal Technology or Data for any Competing Activitiesapplication in the Field, (III) the Other Party shall not have any license under any Patents or Know-How controlled by the Post-Execution Other Business Affiliate that was not licensed to the Other Party prior to the Subject Transaction, (IV) the Notifying Party shall maintain capacity and resources at least equivalent to those that were applied by the Notifying Party to activities under the Agreement or that are reasonably necessary for the Notifying Party to fulfill its obligations hereunder, to the extent the Notifying Party was required to maintain such capacity and resources had the Subject Transaction not occurred, and (V) the Notifying Party shall use its Commercially Reasonable Efforts best efforts to put procedures and mechanisms in place to separate its activities under this Agreement and the Competing Activities, Program including preventing any disclosure of the Confidential Information of the Other Party to the Post-Execution Other Business Affiliate and to prevent receipt or use for activities under the Agreement of any technology or proprietary information of the Post-Execution Other BusinessAffiliate. (iiic) In the event the Notifying Party elects the option described in clause (A) or (B) above, then the Notifying Party shall Divest the Competing Activities or all of its rights and obligations under this Agreement (as applicable, the “Divestible Asset”) as soon as reasonably practicable following the Subject Transaction. For purposes of this Section 3.8(d)7.4.3, “Divest” meansshall mean, with respect to the Divestible Asseta Competing Program, (yx) the sale, license (exclusive license in the Field) or other transfer of all of the right, title and interest in and to such Divestible AssetCompeting Program in the Field, including all [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. technology, intellectual property and other assets relating solely thereto, to an independent Third Party (other than the Post-Execution Other BusinessAffiliate), without the retention or reservation of any rights, license or interest (other than solely an economic and other customary termination interestsinterest) within the Field by the Notifying Party or Post-Execution Other Business Affiliate in such Divestible Asset Competing Program and (zy) the complete shutdown shut down of the Divestible Asset Competing Program such that no technology, intellectual property or other asset solely relating thereto is used by the Notifying Party or its Affiliates and delivery of written confirmation from the Notifying Party to the Other Party that the Notifying Party and its Affiliates covenant not to use any technology, intellectual property and assets solely relating to such Divestible Asset Competing Program during the Term of this AgreementExclusive Period.