ASSET PURCHASE AND LICENSE AGREEMENT BETWEEN AVANIR PHARMACEUTICALS INC. XENEREX BIOSCIENCES INC. EMERGENT PRODUCT DEVELOPMENT GAITHERSBURG INC. AND EMERGENT BIOSOLUTIONS INC. Dated as of March 6, 2008
Exhibit 10.1
EXECUTION COPY
CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “***”. A COMPLETE
VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24B-2 OF THE
EXCHANGE ACT OF 1934.
BETWEEN
XENEREX BIOSCIENCES INC.
EMERGENT PRODUCT DEVELOPMENT GAITHERSBURG INC.
AND
EMERGENT BIOSOLUTIONS INC.
Dated as of Xxxxx 0, 0000
XXXXX PURCHASE AND LICENSE AGREEMENT
This Asset Purchase and License Agreement is entered into as of March 6, 2008 (the
“Agreement”) by and between Emergent Product Development Gaithersburg Inc., a Delaware corporation
(“Buyer”), Emergent BioSolutions Inc., a Delaware corporation (“Buyer Parent”), Avanir
Pharmaceuticals Inc., a California corporation (“Seller Parent”), and Xenerex Biosciences Inc., a
California corporation (“Seller” and, together with Seller Parent, the “Sellers”). Each party to
this Agreement is sometimes referred to herein as a “Party” or collectively, the “Parties.”
Capitalized terms used in this Agreement shall have the meanings ascribed to them where defined or
in Article IX.
ARTICLE I
1.1 Purchase and Sale of Assets. Upon the terms and subject to conditions of this
Agreement, Buyer shall purchase from Seller, and Seller shall sell, transfer, convey, license,
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assign and deliver to Buyer, at the Closing, for the consideration specified below in
Article II, all of its right, title and interest in, to and under the Acquired Assets.
(a) Upon the terms and subject to the conditions of this Agreement, Buyer shall assume and
become responsible for, from and after the Closing, the Assumed Liabilities.
(b) Notwithstanding the terms of Section 1.2(a) or any other provision of this Agreement to
the contrary, Buyer shall not assume or become responsible for, and Seller shall remain liable for,
the Retained Liabilities.
(a) Assigned Contracts. On the Closing Date, Seller shall assign to Buyer, and Buyer
shall assume, the Assigned Contracts to the extent provided in this Agreement. The list of all
Assigned Contracts is set forth in Schedule 1.3(a) hereto. To the extent that the assignment of
all or any portion of any Assigned Contract shall require the consent of the other party thereto or
any other third party, this Agreement shall not constitute an agreement to assign any such Assigned
Contract if an attempted assignment without any such consent would constitute a breach or violation
thereof. In order, however, to seek to provide Buyer the full realization and value of every
Assigned Contract of the character described in the immediately preceding sentence (i) as soon as
practicable after the Closing, Seller and Buyer shall cooperate, in all reasonable respects, to
obtain any necessary consents to the assignment of the Assigned Contracts, provided that neither
Party shall be required to make any payments or agree to any material undertakings in connection
therewith, and (ii) until all such consents are obtained or all such Assigned Contracts expire or
are terminated, Seller and Buyer shall cooperate, in all reasonable respects, to provide to Buyer
the benefits under the Assigned Contracts (with Buyer entitled to all the gains and responsible for
all the losses, Taxes, liabilities and/or obligations thereunder). In connection with clause (ii)
of this Section 1.3(a), if requested in writing by Buyer, Seller shall, at Buyer’s cost and
expense, seek to enforce for the benefit of Buyer all claims or rights of Seller arising under the
Assigned Contracts, and Buyer shall perform and comply with, at Buyer’s cost, all of Seller’s
obligations under the Assigned Contracts as if Buyer was Seller thereunder.
(b) Registrations and Applicable Permits. On the Closing Date, Seller shall assign or
transfer to Buyer, and Buyer shall assume, the Registrations and Applicable Permits to the extent
provided in this Agreement. To the extent that the assignment or transfer of all or any portion of
any Registration or Applicable Permit shall require the consent of the other party thereto or any
other third party, this Agreement shall not constitute an agreement to assign or transfer any such
Registration or Applicable Permit if an attempted assignment or transfer without any such consent
would constitute a breach or violation thereof. In order, however, to seek to provide Buyer the
full realization and value of the Registrations and Applicable Permits (a) as soon as practicable
after the Closing, Seller shall use commercially reasonable efforts to obtain and Buyer shall
cooperate, in all reasonable respects to obtain any necessary consents to the assignment of the
Registrations and Applicable Permits, provided that neither Party shall be required to make any
payments or agree to any material undertakings in connection therewith,
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and (b) until all such consents are obtained or all such Registrations and Applicable Permits
expire or are terminated, Seller and Buyer shall cooperate, in all reasonable respects, to provide
to Buyer the benefits under the Registrations and Applicable Permits.
1.4 Asset License. Sellers hereby grants to Buyer an exclusive (even as to Sellers)
limited to the Anthrax Field, worldwide, perpetual license under the Xenerex Technology to Develop
and Commercialize Products intended for use in the Anthrax Field, with the right to grant
sublicenses (the “Asset License”). Any sublicense granted to a Third Party, shall be in writing
and include provisions which obligate such a party to comply with all the terms and conditions of
this Agreement. Buyer shall remain fully responsible to Sellers for performance of this Agreement.
1.5 Third Party Agreements. Seller shall be solely responsible for all obligations
under the agreements listed in Schedule 1.5 (each such agreement a “Third Party Agreement”).
Seller shall maintain the Third Party Agreements in good standing and not take any actions (or omit
or fail to take any actions) which would result in a breach of any of such Third Party Agreements
other than as contemplated by this section. Seller agrees that it shall not amend, modify or
supplement or take any action or inaction with respect to any of the Third Party Agreements in any
manner that would materially adversely affect Buyer’s rights under this Agreement without the
consent of Buyer, such consent not to be unreasonably withheld or delayed. In the alternative,
Seller may arrange for the assignment of such Third Party Agreements (with the consent of the
applicable third party licensor, if required) to Buyer at no transactional expense to Buyer. In
addition, Seller shall not sell, assign (except as permitted in Section 10.4 hereof), convey,
pledge, hypothecate or otherwise transfer any of the Third Party Agreements or Seller’s rights or
obligations thereunder, or otherwise make any commitments or offers in a manner that materially
conflicts with Buyer’s rights hereunder without the consent of Buyer, such consent not to be
unreasonably withheld or delayed. Seller shall immediately notify Buyer upon receipt by Seller of
any notice from a licensor under any Third Party Agreements of such licensor’s intent to (i)
terminate Seller’s rights that are sublicensed to Buyer hereunder, or (ii) exercise its respective
rights or remedies thereunder, or (iii) otherwise take any other action, in each case that would
reasonably be expected to materially and adversely affect Buyer’s rights. This provision shall not
affect, in any manner, the parties’ rights to assign this Agreement or rights to the Xenerex
Technology not transferred under this Agreement as provided for in Section 10.4 of this Agreement.
1.6 Technology Transfer. Sellers shall, as reasonably requested by Buyer, furnish
Buyer with copies of, and provide Buyer with ongoing access to, all information or documentation in
the control of Sellers or any of their Affiliates relating to, or necessary or useful to exploit
the Product, which information and documentation includes, but is not limited to: (i) all Seller
Know-How and (ii) all data, documentation and information relating to or that may be necessary or
useful for the filing of an Investigational New Drug Application, a Biologics License Application
or their foreign counterparts for any product having the Product as an active ingredient (including
all databases, toxicology reports, and other regulatory, scientific and safety information).
Sellers shall make available to Buyer appropriate personnel of Sellers and any of their Affiliates
as reasonably requested by Buyer from time to time, to assist in the effectuation of the technology
transfer contemplated by Section 6.3, at Seller’s expense for the four-week period following the
Closing, not to exceed eight (8) hours per week during such
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period (with any out-of-pocket expenses incurred during such period by the Seller’s
representatives and approved by Buyer in writing to be reimbursed by Buyer to Seller), and at
Buyer’s expense thereafter. Sellers hereby assign to Buyer their rights in any regulatory filings
for products having the Product as an active ingredient, to the extent any such regulatory filings
exist. Sellers agree to work diligently and in good faith to complete the transfers set forth in
this Section 1.6 from Seller to Buyer.
1.7 Further Assurances. At any time and from time to time after the Closing, at
the reasonable request of Buyer and without further consideration, Sellers shall execute and
deliver such other instruments of sale, transfer, conveyance and assignment and take such actions
as Buyer may reasonably request to transfer, convey and assign to Buyer, and to confirm Buyer’s
rights to, title in and ownership of, the Acquired Assets and to place Buyer in actual possession
and operating control thereof.
ARTICLE II
2.1 Execution Date Payment. In consideration of the transactions contemplated by this
Agreement, Buyer shall assume the Assumed Liabilities and pay to Seller, by wire transfer of
immediately available funds directly to an account designated by Seller $100,000 (the
“Execution Date Payment”) and make the additional payments, if applicable, set forth in
this Article II. The parties acknowledge that Buyer previously paid a non-refundable amount of
$50,000 (the “Proposal Payment”) in conjunction with the submission of the Proposal on
November 7, 2007 and that such amount shall constitute part of the purchase price for the Acquired
Assets. Buyer Parent agrees to be jointly and severally liable for the complete and prompt payment
of Buyer’s payment obligations under this Agreement.
2.2 GMP Payment. In addition to any other amounts due hereunder, upon release by
AppTec of the GMP Clinical Materials to Buyer and Buyer’s written acceptance thereof (which
acceptance will not be unreasonably withheld, conditioned or delayed), Buyer shall, upon receipt of
Seller’s invoice, promptly pay to Seller, by wire transfer of immediately available funds directly
to an account designated by Seller $100,000 (the “GMP Payment”).
2.3 Milestone Payments. Subject to the achievement of the following, Buyer shall,
upon receipt of Seller’s invoice, promptly pay to Seller:
(a) In addition to any other amounts due hereunder, upon the terms and subject to the
conditions set forth herein, upon the receipt of official notification of an award of a grant or
contract (a copy of such notification to be promptly provided to the Sellers) from NIAID
(excluding grants or contracts for Commercial Sales) with respect to AVP-21D9 in response to the
Proposal (the “NIAID Grant”):
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(i) | $* * * if the aggregate amount of the NIAID Grant award is equal to or greater than $* * *; or | ||
(ii) | $* * * if the aggregate amount of the NIAID Grant award is less than $* * *. |
In the event the Buyer does not receive a NIAID Grant in response to the Proposal, upon the
acceptance by Buyer or any Affiliate of a grant or contract from NIAID (excluding grants or
contracts for Commercial Sales) with respect to AVP-21D9 in response to any proposal other than the
Proposal:
(i) | $* * * if the aggregate amount of the NIAID Grant award is equal to or greater than $* * *; or | ||
(ii) | $* * * if the aggregate amount of the NIAID Grant award is less than $* * * but greater than $* * *. |
Buyer shall make only one payment to Seller under this Section 2.3(a). The payment under
subsections (i) and (ii) above shall be payable only one time. In no event shall aggregate
payments due under this Section 2.3(a) exceed $* * *.
(b) If (and only if) Buyer or any Affiliate receives aggregate payments from the NIAID
pursuant to the NIAID Grant of at least $* * * , Buyer shall promptly pay Seller, in addition to
all other amounts payable under this Article II, an amount equal to $* * *. The payment due under
this Section 2.3(b) is a one-time payment and shall only be paid upon receipt of the first $* * *
paid under the NIAID Grant.
(c) If (and only if) Buyer, any Affiliate or any sublicensee achieves Net Sales of at least $*
* * (for the avoidance of doubt, the $* * * of Net Sales does not include the $* * * NIAID Grant
described in clause (b) above), Buyer shall promptly pay Seller, in addition to all other amounts
payable under this Article II, an amount equal to $* * *. The payment due under this Section
2.3(c) is a one-time payment and shall only be paid upon receipt of the first $* * * of Net Sales.
(a) In addition to any other amounts due under Article II, upon the terms and subject to the
conditions set forth herein, in consideration of the sale, transfer, conveyance, assignment and
delivery of the Acquired Assets, Buyer shall pay, or cause to be paid, to Seller quarterly payments
in arrears in accordance with this Section 2.4(a) and Section 2.4(b) (the “Sales-Based
Contingent Purchase Price Payments”) based upon cumulative Net Sales of the Product or any
product or antibody made, produced, manufactured or sublicensed under the Asset License. The
payments shall be determined in accordance with the following scale:
* * * | Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission. |
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(i) until the amount of cumulative Net Sales is equal to $* * *, * * * percent (* *
*%) of such Net Sales;
(ii) for that portion of cumulative Net Sales equal to or greater than
$* * * but less than $* * * , * * * percent (* * *%) of such Net Sales; and
$* * * but less than $* * * , * * * percent (* * *%) of such Net Sales; and
(iii) for that portion of cumulative Net Sales equal to or greater than
$* * * but less than $* * *, *** percent (***%) of such Net Sales; and
(iv) for that portion of cumulative Net Sales equal to or greater than
$* * *, * * * percent (* * *%) of such Net Sales.
(b) Payment and Reports.
(i) Quarterly Payment Reports. Buyer shall deliver to Seller, within forty-five (45)
days after the end of each calendar quarter, a written accounting of Net Sales during the prior
calendar quarter. Such quarterly reports shall indicate (i) gross sales of Product, an itemization
of deductions made to gross sales to reach Net Sales, Net Sales and cumulative Net Sales, and (ii)
the calculation of payment amounts owed to Seller from such gross sales and Net Sales. Buyer shall
deliver amounts due pursuant to Section 2.4(a) to Seller for each calendar quarter concurrently
with the delivery to Seller of the accounting for such calendar quarter.
(ii) Audits. Buyer shall keep, and shall require its Affiliates and its and their
sublicensees to keep, records of the latest three (3) years relating to gross sales and Net Sales.
For the sole purpose of verifying the reports provided for in Section 2.4(b), Buyer further agrees
to permit such records to be examined by an independent accounting firm selected by Seller at
Seller’s cost and expense and in the location(s) where such records are maintained by Buyer and its
Affiliates upon reasonable notice, during regular business hours and without unreasonable
disruption to Buyer’s and its Affiliates’ operations. Unless Seller obtains the prior written
consent of Buyer, which consent shall not be unreasonably withheld, such accounting firms must be
selected from U.S. accounting firms that are AICPA registered accounting firms. Such audit shall
not be performed more frequently than once per calendar year nor more frequently than once with
respect to records covering any specific period of time. Seller shall provide a copy of the results
(and backup) of such review promptly after Seller receives such results. If the review reflects an
underpayment to Seller, Buyer shall promptly remit such underpayment to Seller, Together with a
rate of interest equal to an annual percentage rate of nine percent (9%), provided, that if
Buyer notifies Seller that Buyer disagrees with the determination of the underpayment amount and if
thereafter the Parties are unable to agree in good faith as to such underpayment amount, then such
matter shall be referred to a mutually agreed independent auditor or valuation expert for
resolution, and the determination of such auditor or valuation expert shall be conclusive and
binding on the parties. If the underpayment is equal to or greater than ten percent (10%) of the
amount that was otherwise due, Seller shall be entitled to have Buyer pay all of the costs of such
review, including the cost of the independent auditor.
* * * | Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission. |
6
(i) If, in any calendar quarter, sales of Follow-On Biological Products reach *** percent
(***%) worldwide market share (calculated on a unit basis), then, the payment owed under Section
2.4 for Net Sales shall be decreased by *** percent (***%) for the remainder of the time period
that payments are due pursuant to Section 2.4.
(ii) On a country-by-country basis, Buyer may reduce the amount of any payments otherwise due
to Seller under this Section 2.4 with respect to Net Sales in such country by up to * *
* percent (* * *%) of any royalties or other amounts paid to Third Party(ies) to permit the
Development or Commercialization of the Product (or any amounts paid to such Third Party(ies) in
settlement of a claim of infringement by the Product).
(d) Duration of Payments. The amounts payable under this Section 2.4 shall be paid on
a country-by-country basis until the earlier of (i) seven (7) years following the first Commercial
Sale of the Product in such country or (ii) expiration or discontinuation of the last to expire
Valid Claim that Covers the Development or Commercialization of the Product in such country.
ARTICLE III
3.1 Closing. Upon the terms and subject to the conditions of this Agreement, the
Closing shall take place concurrently with the execution of this Agreement by the Parties hereto
(the “Closing Date”). The Parties to this Agreement will exchange (or cause to be
exchanged) at the Closing the funds, agreements, instruments, certificates and other documents, and
do, or cause to be done, all of the things respectively required of each Party as specified in
Sections 3.2(a) and 3.2(b)
(a) Seller’s Actions and Deliveries. At the Closing, Seller shall:
(i) execute and deliver to Buyer this Agreement;
(ii) execute and deliver to Buyer a xxxx of sale in the form attached hereto as Exhibit
A;
(iii) execute and deliver to Buyer one or more patent assignments in the form attached hereto
as Exhibit B;
(iv) execute and deliver such other instruments of conveyance as Buyer may reasonably request
in order to effect the sale, transfer, conveyance, assignment and license to Buyer of valid
ownership of the Acquired Assets;
* * * | Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission. |
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(v) deliver to Buyer, or otherwise put Buyer in possession and control of, all of the Acquired
Assets of a tangible nature;
(vi) execute and deliver to each other a cross-receipt evidencing the transactions referred to
in this Section 3.2(a); and
(vii) execute and deliver an Incumbency and Officer’s Certificate from each of Seller and
Seller Parent in form and substance reasonably satisfactory to Buyer.
(b) Buyer’s Actions and Deliveries. At the Closing Buyer shall:
(i) execute and deliver to Sellers this Agreement;
(ii) execute and deliver to Seller an instrument of assumption in the form attached hereto as
Exhibit C;
(iii) execute and deliver such other instruments as Sellers may reasonably request in order to
effect the assumption by Buyer of the Assumed Liabilities;
(iv) pay to Seller, payable by wire transfer of immediately available funds to an account
designated by Seller, the Execution Date Payment;
(v) execute and deliver to each other a cross-receipt evidencing the transactions referred to
in this Section 3.2(b); and
(vi) execute and deliver an Incumbency and Officer’s Certificate from each of Buyer and Buyer
Parent in form and substance reasonably satisfactory to Sellers.
ARTICLE IV
Each of the Sellers, jointly and severally, represents and warrants to Buyer that, except as
set forth in the Disclosure Schedule, the statements contained in this Article IV are true and
correct. The Disclosure Schedule shall be arranged in sections and subsections corresponding to
the numbered sections and subsections contained in this Article IV. The disclosures in any section
or subsection of the Disclosure Schedule shall qualify the corresponding section or subsection in
this Article IV as well as any other section or subsection to which the nature of the disclosure
made relates but only to the extent it is reasonably apparent from a reading of the disclosure that
such disclosure is applicable to such other section and subsection. Nothing in the Disclosure
Schedules is intended to broaden the scope of any representation, warranty or covenant of Sellers
contained in this Agreement. The inclusion of any information in the Disclosure Schedules (or any
update thereto) shall not be deemed to be an admission or acknowledgment, in and of itself, that
such information is required by the terms hereof to be disclosed, is material to the Business, has
resulted in or would result in a Material Adverse Effect or is outside the Ordinary Course of
Business.
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4.1 Organization, Qualification and Corporate Power. Each of the Sellers is a
corporation duly organized, validly existing and in corporate and tax good standing under the laws
of the State of California. Seller has all requisite corporate power and authority to own, lease
and operate, as applicable, the Acquired Assets.
4.2 Authorization of Transaction. Each of the Sellers has all requisite power and
authority to execute and deliver this Agreement and the Ancillary Agreements to which it is a party
and to perform its obligations hereunder and thereunder. The execution and delivery by each of the
Sellers of this Agreement and the Ancillary Agreements to which it is a party and the performance
by each of the Sellers of this Agreement and each Ancillary Agreement to which it is a party and
the consummation by each of the Sellers of the transactions contemplated hereby and thereby have
been duly and validly authorized by all necessary corporate action on the part of each of the
respective Sellers. Each of this Agreement and the Ancillary Agreements has been duly and validly
executed and delivered by each of Sellers that is a party thereto and constitutes a valid and
binding obligation of Sellers, enforceable against each of the Sellers in accordance with its terms
except as may be limited by the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar Laws relating to or affecting creditors’ rights
generally and general equitable principles (whether considered in a proceeding in equity or at
law).
4.3 Noncontravention. Except as disclosed on Schedule 4.3(c), neither the execution
and delivery by Sellers of this Agreement or any of the Ancillary Agreements, nor the consummation
by Sellers of the transactions contemplated hereby or thereby, does or will (a) conflict with or
violate any provision of the Articles of Incorporation or by-laws of either of the Sellers, (b)
require on the part of either of the Sellers any notice to or filing with, or any permit,
authorization, consent or approval of, any Governmental Entity, (c) conflict with, result in a
breach of, constitute (with or without due notice or lapse of time or both) a default under, result
in the acceleration of obligations under, create in any party the right to terminate, modify or
cancel, or require any notice, consent or waiver under, any contract or instrument to which either
of the Sellers is a party or by which either of the Sellers is bound or to which any of its assets
is subject, (d) result in the imposition of any Lien upon any of the Acquired Assets or (e) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to Seller or any of its
respective properties or assets.
4.4 Absence of Certain Changes. Between December 31, 2006 and the date of this
Agreement, there has not been with respect to the Product Line Operations:
(a) any Material Adverse Effect, except that Sellers have reorganized and downsized their
operations and have terminated the employment of all personnel working on the Product Line
Operations and the Xenerex Technology except for one person, and Sellers have greatly reduced the
amount of laboratory and research space used for the development of the Product Line Operations and
the Xenerex Technology, resulting in a substantial slowdown in development efforts;
(b) any incurrence, assumption or guarantee of any material Liability in the Ordinary Course
of Business other than restructuring and other restructuring charges for
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personnel and facilities incurred in connection with the downsizing described in Section
4.4(a); or
(c) any material transaction, agreement or event except as described in Section 4.4(a) outside
the Ordinary Course of Business.
4.5 Taxes. There are no Liens for Taxes upon the Acquired Assets except those
relating to Taxes that are not yet due and payable.
(a) Except with respect to Product Line Intellectual Property (which is subject to Section
4.7) and the Books and Records, Seller is the true, lawful and sole owner, and has good title to
the Product and Seller’s rights in the Assigned Contracts (subject to the rights of each
counterparty in such Assigned Contracts), free and clear of all Liens. Upon execution and delivery
by Seller to Buyer of the instruments of conveyance referred to in Section 3.2, Buyer will become
the true, lawful and sole owner of, and will receive good title to, the Product and Seller’s rights
in the Assigned Contracts (subject to the rights of each counterparty in such Assigned Contracts),
free and clear of all Liens.
(b) Seller has the lawful right to use the Books and Records. Upon execution and delivery by
Seller to Buyer of the instruments of conveyance referred to in Section 3.2, Buyer will have the
lawful right to use the Books and Records.
(c) The Acquired Assets, together with the assets licensed pursuant to the license set forth
in Section 1.4 are sufficient for the conduct of the Product Line Operations except that Seller
does not have any right to Commercialize any Product other than AVP-21D9. Each tangible Acquired
Asset is free from material defects, has been maintained in accordance with normal industry
practice, and is in good operating condition and repair (subject to normal wear and tear).
4.7 Intellectual Property. Notwithstanding anything to the contrary set forth in this
Agreement, the representations set forth in this Section 4.7 constitute Seller Parent’s and
Seller’s sole representations with respect to Product Line Intellectual Property, except for the
representations set forth in Sections 4.2, 4.3, 4.5, and 4.10.
(a) Ownership; Sufficiency. The AVP Anthrax Patents constitute all patents and patent
applications owned by Sellers necessary or useful for the exploitation of the Product and the
conduct of the Product Line Operations. Section 4.7(a) of the Disclosure Schedule lists, with
respect to the AVP Anthrax Patents, the applicable application or patent number, title, and
jurisdiction in which filing was made, date of filing or issuance. Seller is the owner of and has
good title to the AVP Anthrax Patents in existence as of the Closing Date, free and clear of any
Lien. All assignments to the Seller of AVP Anthrax Patents in existence as of the Closing Date
have been properly executed and recorded. All issuance, renewal, maintenance and other payments
that are or have become due with respect thereto have been timely paid by or on behalf of Seller.
The AVP Anthrax Patents will be owned by the Buyer immediately following the
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Closing on the same terms and conditions as they were held by the Seller immediately prior to
the Closing.
(b) Prosecution Matters. Subject to 4.7(a), there are no inventorship challenges, opposition
or nullity proceedings or interferences declared, commenced or provoked, or to the knowledge of
Seller, threatened, with respect to any AVP Anthrax Patents in existence as of the Closing Date.
In Application No. 11/041,763, the Seller copied claims from U.S. Patent Publication No.
20060258842, published on November 16, 2006 to Xxxxx et al. and PCT Publication No. WO 2005/120567,
published on December 22, 2005 to Xxxxx et al. (IQ Corporation), which claims were subsequently
cancelled. Seller and entities involved in the prosecution of the AVP Anthrax Patents (such as
Seller’s attorneys, inventors, agents) have complied with their duty of candor and disclosure to
the United States Patent and Trademark Office and any foreign patent office requiring such
disclosure with respect to all patent applications filed by or on behalf of Seller and have made no
material misrepresentation in such applications. To the extent that patent applications are
pending, Seller may still be in the process submitting Information Disclosure Statements in the
United States, or equivalent submissions in Foreign Patent Offices.
(c) Protection Measures. Seller has taken reasonable measures to protect the proprietary
nature of the Product Line Intellectual Property, and to maintain in confidence all trade secrets
and information comprising a part thereof. To the Knowledge of the Seller, there has been no: (i)
unauthorized disclosure of any third party proprietary information in the possession, custody or
control of Seller, or (ii) breach of Seller’s security procedures wherein information has been
disclosed to a third person.
(d) Non-infringement of Third Party Rights. To the knowledge of the Seller, the Product Line
Operations do not infringe or violate, or constitute a misappropriation of, any Patents and
Know-How rights of any Third Party. Sellers have not received any complaint, claim or notice, or
threat of any of the foregoing (including any notification that a license under any patent is or
may be required. Sellers have provided or made available to Buyer copies of all complaints, claims,
notices or threats concerning any alleged infringement by the Product, in its possession.
(e) Infringement of Seller’s Rights. To the knowledge of Seller, no third party (including,
without limitation, any current or former employee, founder, inventor of any Product Line Patent,
or consultant to Seller) is infringing, violating or misappropriating any of the Product Line
Intellectual Property. Sellers have provided or made available to Buyer copies of all complaints,
claims, notices or threats concerning the infringement, violation or misappropriation of any
Product Line Intellectual Property.
(f) Outbound IP Agreements. Section 4.7(f) of the Disclosure Schedule identifies each
license, covenant or other agreement pursuant to which Seller has assigned, transferred, licensed,
distributed or otherwise granted any right or access to any person or entity, or covenanted not to
assert any right, with respect to any past, existing or future Product Line Intellectual Property.
Neither of the Sellers is a member of or party to any patent pool, industry standards body, trade
association or other organization pursuant to the rules of which it is obligated to license any
existing or future Product Line Intellectual Property to any person.
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(g) Inbound IP Agreements. Section 4.7(g) of the Disclosure Schedule identifies each
agreement, contract, assignment or other instrument between Seller and a third party which are part
of the Acquired Assets.
(h) Employee and Inventor Assignments. Schedule 4.7(h) identifies each employee of Seller
materially involved in the research or development of the Product, and any inventor of the AVP
Anthrax Patents has executed a valid and binding written agreement expressly or in substance
assigning to Seller all right, title and interest in any inventions and works of authorship,
whether or not patentable, invented, created, developed, conceived and/or reduced to practice
during the term of such employee’s employment and all Patents and Know-How rights therein.
(i) Support and Funding. The U.S. Government may have certain rights to the AVP Anthrax
Patents by virtue of one or more Grants Received. Except as set forth on Schedule 4.7(i)
of the Disclosure Schedule, Seller has not received any direct support, funding, resources or
assistance from any federal, state, local or foreign governmental or quasi-governmental agency or
funding source in connection with the development or exploitation of the Product or conduct of the
Product Line Operations or any facilities or equipment used in connection therewith.
4.8 Biological Materials. To Seller’s Knowledge, the Biological Materials listed on
Schedule 9.1(d) constitute all of the Biological Materials. To Sellers’ Knowledge, all Biological
Materials in the possession of AppTec have been developed, produced and stored in accordance with
Good Laboratory Practices as defined by the U.S. Food and Drug Administration (“GLP”).
4.9 Contracts. Seller has made available or delivered to Buyer a complete and
accurate copy of each Assigned Contract. The Assigned Contracts include all of the contracts and
agreements to which Seller or any of its Affiliates is a party that relate primarily or exclusively
to the Product Line Operations. Neither Seller nor any of its Affiliates is a party to or bound by
any contract, agreement or arrangement (written or oral) that is material to the Product Line
Operations, except for the Assigned Contracts. All of the Assigned Contracts are in full force and
effect. All of the Assigned Contracts are valid and binding and are enforceable in accordance with
their terms against Seller and, to Seller’s Knowledge, all other parties thereto. Except as set
forth in Section 4.9 of the Disclosure Schedule, all of the Assigned Contracts are freely
assignable to Buyer pursuant to this Agreement without the consent of any party thereto. To the
knowledge of Seller, no condition exists or event has occurred as a result of action or inaction by
Seller or any other person that, with notice or lapse of time or both, would constitute (a) default
of any Assigned Contract by Seller, or any other party thereto or (b) a basis for force majeure or
other claim of excusable delay or non-performance under any Assigned Contract against Seller or
against any other party thereto.
4.10 Litigation. There is no action, suit, litigation, proceeding, claim,
governmental investigation or administrative action pending or, to Seller’s Knowledge, threatened
directly or indirectly involving the Product, the Product Line Operations, the Acquired Assets, any
Assigned Contract or the transactions contemplated hereby or by any of the Ancillary Agreements,
which has had or would, individually or in the aggregate, reasonably be expected to cause a
Material Adverse Effect.
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4.11 Permits. All permits, licenses, franchises or authorizations from any
Governmental Entity that are required for the Product Line Operations are listed on Schedule 4.11
(collectively, the “Applicable Permits”) and are valid and in full force and effect and
Seller is not in violation of or in default under any Applicable Permit. No suspension or
cancellation of any such Applicable Permit has been threatened in writing.
4.12 Legal Compliance. Seller is, and has since December 31, 2005 been, in material
compliance with all applicable laws (including rules and regulations thereunder) of any
Governmental Entity, relating to the Product Line Operations, the Acquired Assets and the use of
the Acquired Assets.
4.13 Regulatory Compliance.
(a) Seller has delivered or made available to Buyer true, correct and complete copies of all
material written communications between Seller, on the one hand, any applicable Medical Product
Regulatory Authority on the other hand, relating to the Product, including copies of any
pre-Investigational New Drug Application meeting packages submitted by Seller for the Product, and
any similar state or foreign regulatory submission made by or on behalf of Seller, including all
supplements and amendments thereto. There have been no meetings or oral discussions between
Seller, on the one hand, any applicable Medical Product Regulatory Authority on the other hand,
relating to the Product.
(b) The conduct of the production and Development activities related to the Product Line
Operations has been conducted in material compliance with current Good Manufacturing Practices and
other applicable rules and regulations of the FDA. Buyer acknowledges and Seller represents that
Product scale up has been outsourced to Third Parties. Sellers agree to require vendors to conduct
studies to be performed under the U01 in accordance with Good Laboratory Practices.
(c) Seller has not been and is not, and to Sellers Knowledge none of its subcontractors
engaged in the Development or production of the product have been or is, subject to any adverse FDA
inspection, finding of deficiency, finding of non-compliance, warning, investigation, penalty for
corrective or remedial action or other compliance or enforcement action relating to Seller’s
operations, the Product, or any of Seller’s other products.
(d) Neither Seller nor any of Seller’s officers, employees or agents acting for Seller is
subject to any pending or threatened investigation by (A) the FDA pursuant to its “Fraud, Untrue
Statements of Material Facts, Bribery, and Illegal Gratuities” policy set forth in 56 Fed. Reg.
46191 (September 10, 1991) or any amendments thereto, (B) the Department of Health and Human
Services Office of Inspector General, Department of Justice, or other Governmental Entity pursuant
to the Federal Anti-Kickback Statute (42 U.S.C. §1320a-7(b)), or the Federal False Claims Act, or
similar state or foreign law. Neither Seller nor any of Seller’s officers, employees or agents
acting for Seller has committed any act, made any statement or failed to make any statement that
would reasonably be expected to provide a basis for action under any of the statutes, regulations
or policy referred to in the preceding sentence. Neither Seller nor any of Seller’s officers,
employees or agents acting for Seller has been convicted of any crime or engaged in any conduct
that would reasonably be expected to result in (A)
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debarment under 21 U.S.C. §335a or any similar state or foreign law or (B) exclusion under 42
U.S.C. §1320a-7 or any similar state or foreign law.
4.14 Environmental Matters.
(a) Seller and the conduct of the Product Line Operations are and have been in compliance with
applicable Environmental Laws, except for any failure to comply with Environmental Laws that would
not reasonably be expected to result in a Material Adverse Effect.
(b) There is no pending or, to the knowledge of Seller, threatened action, suit, notice of
violation or judicial or administrative proceeding, investigation or claim relating to
Environmental Matters, including Off-Site Liabilities or any violation of Environmental Law,
involving the Product Line Operations, or any property currently, or, to the knowledge of Seller,
formerly owned or operated by Seller in connection with the Product Line Operations.
4.15 Specifications. The specifications included in Schedule 4.15 of the
Disclosure Schedule (the “Specifications”) are the specifications that are used by Seller
to produce AVP-21D9 at a 100 liter scale as of the date hereof, and the GMP Clinical Materials to
be released by Apptec shall satisfy the Specifications.
(a) To Sellers’ knowledge, Seller has made available to Buyer all available pre-clinical study
data, including raw data and reports, created by Seller, or any third party on behalf of Seller
relating to the Product (“Scientific Data”) and in Seller’s possession. Seller will following the
Closing, continue to take commercially reasonable steps to make available or assist Buyer in
obtaining access to all Scientific Data.
(b) Seller either owns and has possession, or has the right to use and full rights of access
to, all Scientific Data.
(c) There have been no human clinical studies conducted in connection with the Product.
(d) The Proposal is materially consistent with the Scientific Data.
ARTICLE V
Buyer and Buyer Parent, as the case may be, represent and warrant to Seller as follows:
5.1 Organization and Corporate Power. Buyer and Buyer Parent are corporations duly
organized, validly existing and in good standing under the laws of the State of Delaware. Buyer
and Buyer Parent have all requisite corporate power and authority to carry on the businesses in
which they are engaged and to own and use the properties owned and used by them.
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5.2 Authorization of the Transaction. Buyer and Buyer Parent have all requisite power
and authority to execute and deliver this Agreement and the Ancillary Agreements and to perform
their respective obligations hereunder and thereunder. The execution and delivery by Buyer and
Buyer Parent of this Agreement and the Ancillary Agreements and the consummation by Buyer of the
transactions contemplated hereby and thereby have been duly and validly authorized by all necessary
corporate action on the part of Buyer and Buyer Parent. This Agreement and the Ancillary
Agreements have been duly and validly executed and delivered by Buyer and Buyer Parent and
constitute valid and binding obligations of Buyer and Buyer Parent enforceable against them in
accordance with their respective terms.
5.3 Noncontravention. Neither the execution and delivery by Buyer and Buyer Parent
of this Agreement or the Ancillary Agreements, nor the consummation by Buyer and Buyer Parent of
the transactions contemplated hereby or thereby, will (a) conflict with or violate any provision of
the Certificate of Incorporation or by-laws of Buyer or Buyer Parent, (b) require on the part of
Buyer or Buyer Parent any filing with, or permit, authorization, consent or approval of, any
Governmental Entity, (c) conflict with, result in breach of, constitute (with or without due notice
or lapse of time or both) a default under, result in the acceleration of obligations under, create
in any party any right to terminate, modify or cancel, or require any notice, consent or waiver
under, any contract or instrument to which Buyer or Buyer Parent is a party or by which it is bound
or to which any of its assets is subject, except for (i) any conflict, breach, default,
acceleration, termination, modification or cancellation which would not adversely affect the
consummation of the transactions contemplated hereby or (ii) any notice, consent or waiver the
absence of which would not reasonably be expected to adversely affect or delay the consummation of
the transactions contemplated hereby, or (d) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to Buyer, Buyer Parent or any of their respective properties or
assets.
5.4 Compliance with Applicable Law. Buyer conducts its business in compliance with
all applicable laws, except for violations, if any, which would not, individually or in the
aggregate, reasonably be expected to materially affect or delay the ability of Buyer to consummate
the transactions contemplated hereby.
5.5 Litigation. There is no material action, suit, litigation, proceeding, claim or
investigation pending, or to the knowledge of Buyer, threatened that is reasonably likely to
adversely affect or delay Buyer’s or Buyer Parent’s performance under this Agreement or the
consummation of the transactions contemplated herein.
5.6 Brokers’ Fees. Buyer does not have any liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the transactions contemplated by this
Agreement.
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ARTICLE VI
6.1 Proprietary Information. From and after the Closing, Sellers shall not disclose
or make use of (except to pursue its rights, under this Agreement or the Ancillary Agreements), and
shall use their best efforts to cause all of its Affiliates not to disclose or make use of, any
knowledge, information or documents of a confidential nature or not generally known to the public
with respect to Acquired Assets or Buyer or its business, except to the extent that such knowledge,
information or documents shall have become public knowledge other than through improper disclosure
by Seller or an Affiliate. Sellers shall enforce, for the benefit of Buyer, all confidentiality,
invention assignments and similar agreements between either Seller or Seller Parent and any other
party relating to the Acquired Assets. Except with respect to the Xenerex Technology not licensed
or assets not sold under this Agreement, the Buyer shall be entitled to assume the control of any
litigation, action, arbitration or proceeding in connection with the enforcement of any of the
rights associated with the Acquired Assets at Buyer’s expense. Notwithstanding the foregoing or any
other provision in this Agreement, Sellers may market, sell, hypothecate, transfer or otherwise
assign any asset or right not specifically sold, transferred or licensed under this Agreement
subject to Sellers’ confidentiality and non-disclosure agreements.
6.2 Tax Matters.
(a) After the Closing Date, Buyer and Sellers shall cooperate in the filing of any Tax returns
or other Tax-related forms or reports, to the extent such filing requires providing each other with
necessary relevant records and documents relating to the Acquired Assets or the Product, or
providing reasonable access to employees. Sellers and Buyer shall cooperate in the same manner:
(i) in defending or resolving any Tax audit, examination or tax-related litigation relating to the
Acquired Assets or the Product; and (ii) to minimize any transfer, sales and use Taxes and notarial
and registry fees and recording costs.
(b) All transfer, documentary, sales, use, stamp, registration and other such Taxes and fees
(including any penalties and interest) incurred in connection with this Agreement shall be paid by
Buyer when due, and Buyer will, at its own expense, file all necessary Tax returns and other
documentation with respect to such transfer, documentary, sales, use, stamp, registration and other
Taxes and fees.
6.3 Books and Records.
(a) Sellers shall not destroy any Books and Records retained by them without first providing
Buyer with the opportunity to obtain or copy the portion thereof at Buyer’s expense. Following the
Closing, Sellers shall promptly make available to Buyer all Books and Records that are discovered
to be in the possession of Sellers and that have not previously been furnished to the Buyer at
Buyer’s expense, provided that Seller may restrict Buyer’s right to access attorney client
privileged communications or work product if such restriction is exercised by Sellers in a
reasonable manner. Sellers may retain one copy of the Books and Records for archival purposes
only.
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(b) Promptly upon request by Buyer made at any time following the Closing Date, Sellers shall
authorize the release to Buyer the portion of any files pertaining to the Acquired Assets or the
conduct of the Product Line Operations held by any Governmental Entity.
(c) The Parties agree that Sellers may maintain copies of the Other Books and Records
that are jointly necessary or useful for the exploitation of the other Seller assets not sold
transferred or licensed under this Agreement. Such Other Books and Records are not exclusively
transferred to the Buyer and may be disclosed to, jointly transferred to or jointly licensed to
other Third Parties subject to the terms of this Agreement, provided that the party to which such
Other Books and Records are disclosed, transferred or licensed agrees to not use such Other Books
and Records to exploit any product in the Anthrax Field.
6.4 Use of Name. Except in the circumstances described in Section 8.3(a) pertaining
to Sellers’ disclosure obligations, compliance with this Agreement, and for Sellers’ own internal
reporting purposes, Sellers shall not use, and shall not permit any Affiliate to use, the name
AVP-21D9 or any name reasonably similar thereto after the Closing Date in connection with any
business related to, competitive with, or an outgrowth of, the business conducted by Seller on the
date of this Agreement.
6.5 Employees. Buyer shall be permitted to offer employment to any employee of
Sellers necessary for the operation of the Product Line Operations. Each of the Sellers hereby
consents to the hiring of any such employees by Buyer and waives, with respect to the employment by
Buyer of such employees, any claims or rights it may have against Buyer or any such employee under
any non-competition, confidentiality or employment agreement.
6.6 Patent Extension. Buyer shall be solely responsible for all patent term
extensions, including supplementary protection certificates and any other extensions that are now
or become available in the future, that are applicable to any AVP Anthrax Patents. Upon Buyer’s
request, Seller shall execute all documents for such applications and take any additional action as
Buyer reasonably requests in connection therewith at Buyer’s expense. Except as specifically set
forth in this Agreement, Sellers shall have no further or ongoing obligation to extend or maintain
any of the AVP Anthrax Patents or to support any Product Line Intellectual Property.
6.7 Patent Prosecution. After the Closing Date, Buyer shall have the sole right,
obligation and option to file and prosecute any patent applications and to maintain any patents
included in the AVP Anthrax Patents, at Buyer’s cost and expense. If and to the extent reasonably
requested by Buyer, Sellers will provide reasonable assistance to Buyer at Buyer’s expense in
prosecuting any administrative action brought by Buyer against a Third Party in order to oppose or
secure reexamination of a patent held by such Third Party that is deemed to Cover exploitation of a
Product, or defending any action brought against Buyer by a Third Party asserting a patent alleged
to Cover exploitation of a Product.
6.8 Due Diligence Development and Commercialization Obligations. Buyer agrees to use
commercially reasonable efforts to Develop and Commercialize a Product.
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(a) Seller shall perform its remaining obligations under its current U01 grant as required by
the NIAID (the “Services”). The obligation to perform the Services shall terminate upon completion
of the Services as determined jointly by the NIAID and Seller. In the course of performing the
Services, Seller shall consult with Xxxx Xxxxxx, or any alternate contact specified by Buyer (the
“Emergent Contact”), and perform the Services in a collaborative manner. Buyer agrees not to
interpose or add any additional requirements to the Services unless such additional requirements
are required by the NIAID in writing, agreed to in writing and in advance by Sellers, such
agreement not to be unreasonably withheld, delayed or conditioned (it being understood that if the
work is not required by the NIAID, Seller is not obligated to perform such work). Sellers
represent and warrant that the Services to be performed hereunder by the Sellers will be performed
in a competent, diligent and workmanlike manner, and to the extent the work is done by Third
Parties, Sellers shall contract that the work will be performed in a competent, diligent and
workmanlike manner and using Good Laboratory Practices.
(b) Any work requested by Buyer that expands the resources required to perform the work
required by NIAID, or the technology transfer work beyond what will be provided by Seller to Buyer
pursuant to Section 1.6, shall be paid for by Buyer at a rate of one hundred fifty U.S. Dollars
($150) an hour, or fraction thereof, pursuant to a mutually agreeable work order. Work performed
shall be acceptable to Buyer. Seller shall submit invoices on a monthly basis accompanied by a
timesheet detailing the hours worked and signed by an authorized representative of the Seller.
Buyer will reimburse Seller for reasonable out-of-pocket expenses that have are accompanied by
receipts submitted for reimbursement with an invoice. Invoices will not be processed and paid
unless they refer to the applicable Accounting Code which Buyer shall provide in advance of any
work order. Invoices shall be payable within thirty (30) days of receipt by Buyer.
(c) Representatives of Sellers performing Services hereunder will not receive employee
benefits from Buyer, including but not limited to paid vacation, sick leave or any insurance
benefits.
(d) All right, title, and interest in and to all reports, data, information, documents,
materials and inventions arising out of the direct performance of Services provided hereunder,
subject to any rights to such items asserted by the U. S government or any agency thereof, shall
belong to and be the property of Buyer. Sellers agree, without further payment by Buyer, to make
any assignments, and shall cause any other employees or agents as applicable to assign, and execute
all documents necessary to effect Buyer’s title thereto in all countries of the world.
Furthermore, all documents and materials prepared by Sellers in the performance of duties hereunder
will constitute works-made-for-hire and shall belong to and be the exclusive property of Buyer and
shall be surrendered by Sellers to Buyer upon completion of the Services. Sellers hereby assign to
Buyer all rights that Sellers may have to data, information, documents, materials and inventions
referred to in this paragraph.
(e) In performing the Services, Sellers shall comply with all applicable existing and future
laws, rules and regulations.
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ARTICLE VII
7.1 Indemnification by Seller and Seller Parent. Seller and Seller Parent shall,
jointly and severally, indemnify Buyer in respect of, and hold Buyer harmless against, Damages
incurred or suffered by Buyer or any Affiliate thereof resulting from, relating to or constituting:
(a) any breach of any representation or warranty of either of the Sellers contained in this
Agreement, any Ancillary Agreement or any other agreement or instrument furnished by either of the
Sellers to Buyer pursuant to this Agreement;
(b) any failure to perform any covenant or agreement of either of the Sellers contained in
this Agreement, any Ancillary Agreement or any agreement or instrument furnished by either of the
Sellers to Buyer pursuant to this Agreement;
7.2 Indemnification by Buyer. Buyer shall indemnify Seller in respect of, and hold it
harmless against, any and all Damages incurred or suffered by Seller resulting from, relating to or
constituting:
(a) any breach of any representation or warranty of Buyer contained in this Agreement, any
Ancillary Agreement or any other agreement or instrument furnished by Buyer to Sellers pursuant to
this Agreement;
(b) any failure to perform any covenant or agreement of Buyer contained in this Agreement,
any Ancillary Agreement or any other agreement or instrument furnished by Buyer to Sellers pursuant
to this Agreement; or
(c) any Assumed Liabilities.
(a) Notwithstanding anything to the contrary set forth in this Agreement, the right to
indemnification under Section 7.1(a) shall, unless otherwise explicitly stated in this Agreement,
be subject to the following limitations:
(i) With respect to Damages arising of out of a breach of Sections 4.1, 4.2, 5.1, and 5.2,
Buyer and Seller shall be liable for all such Damages suffered by the other Party.
(ii) With respect to Damages arising of out of a breach of a representation or warranty not
expressly covered by Section 7.3(a)(i), Sellers shall not be liable for any Damages suffered by
Buyer unless the Damages arising out of the applicable breach are in excess of $150,000 (the
“Deductible”) at which point Sellers shall be liable for 50% of all Damages in excess of
the Deductible, provided that Damages actually paid by Sellers shall not
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exceed the lesser of
$800,000 or the aggregate amount actually paid by Buyer pursuant to this agreement (the
“Overall Cap”).
(iii) Nothing in this Article VII shall be deemed to limit Buyer Parent’s financial
obligations set forth in this Agreement.
(b) Except in the event of fraud or for the breach by Buyer of any obligation to pay any
amounts pursuant to Article II, the indemnification provisions contained in this Article VII shall
be the Parties’ exclusive remedy for any inaccuracy in or breach of any representation, warranty,
covenant or obligation set forth in this Agreement or any Ancillary Agreement; provided, however,
that nothing contained in this Section 7.3 or elsewhere in this Agreement shall limit the rights of
a Party to seek or obtain injunctive relief or any other equitable remedy to which such Party is
otherwise entitled.
(c) Following the Closing Date, each Indemnified Party agrees to use commercially reasonable
efforts to mitigate any Damages, including seeking recovery (i) under any available insurance
policy that would insure any claim with respect to such Damages or (ii) from any third party.
Subject to the limitations contained herein, all costs and expenses reasonably incurred in
connection with such mitigation shall be Damages reimbursable as part of the relevant
indemnification claim. In the event that any Party receives a payment with respect to any Damages,
and thereafter such Party receives payment with respect to such Damages from any insurer or other
third party, such Party shall pay to the other Party such amount received from such insurer or
third party in respect of such Damages for which the Party received an indemnification payment.
(a) An Indemnified Party shall give prompt written notification to the Indemnifying Party of
the commencement of any Third Party Action. In any event, such notification shall be given within
20 days after receipt by the Indemnified Party of notice of such Third Party Action, and shall
describe in reasonable detail (to the extent known by the Indemnified Party) the facts constituting
the basis for such Third Party Action and the amount of the claimed damages; provided, however,
that no delay or failure on the part of the Indemnified Party in so notifying the Indemnifying
Party shall relieve the Indemnifying Party of any liability or obligation hereunder except to the
extent of any damage or liability caused by or arising out of such failure. Within 20 days after
delivery of such notification, the Indemnifying Party may, upon written notice thereof to the
Indemnified Party, assume control of the defense of such Third Party Action with counsel reasonably
satisfactory to the Indemnified Party; provided that (i) the Indemnifying Party may only assume
control of such defense if (A) it acknowledges in writing to the Indemnified Party that any
damages, fines, costs or other liabilities that may be assessed against the Indemnified Party in
connection with such Third Party Action constitute Damages for which the Indemnified Party shall be
indemnified pursuant to this Article VII and (B) the ad damnum is less than or equal to the amount
of Damages for which the Indemnifying Party is liable under this Article VII and (ii) the
Indemnifying Party may not assume control of the defense of a Third Party Action if (i) the Third
Party Action involves criminal liability or seeks equitable relief against the Indemnified Party or
(ii) the Indemnified Party has different defenses
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available to it with respect to such Third Party
Action. If the Indemnifying Party does not, or is not permitted under the terms hereof to, so
assume control of the defense of a Third Party Action, the Indemnified Party shall control such
defense. The non-Controlling Party may participate in such defense at its own expense. The
Controlling Party shall keep the non-Controlling Party reasonably advised of the status of such
Third Party Action and the defense thereof and shall consider in good faith recommendations made by
the non-Controlling Party
with respect thereto. The non-Controlling Party shall furnish the Controlling Party with such
information as it may have with respect to such Third Party Action (including copies of any
summons, complaint or other pleading which may have been served on such party and any written
claim, demand, invoice, billing or other document evidencing or asserting the same) and shall
otherwise cooperate with and assist the Controlling Party in the defense of such Third Party
Action. The fees and expenses of counsel to the Indemnified Party with respect to a Third Party
Action shall be considered Damages for purposes of this Agreement only if the Indemnified Party
controls the defense of such Third Party Action pursuant to the terms of this Section 7.4(d). The
Indemnifying Party shall not agree to any settlement of, or the entry of any judgment arising from,
any Third Party Action without the prior written consent of the Indemnified Party, which shall not
be unreasonably withheld, conditioned or delayed; provided that the consent of the Indemnified
Party shall not be required if (i) such settlement is purely monetary and (ii) the Indemnifying
Party agrees in writing to pay any amounts payable pursuant to such settlement or judgment and such
settlement or judgment includes a complete release of the Indemnified Party from further liability.
The Indemnified Party shall not agree to any settlement of, or the entry of any judgment arising
from, any such Third Party Action without the prior written consent of the Indemnifying Party,
which shall not be unreasonably withheld, conditioned or delayed.
(b) In order to seek indemnification under this Article VII, an Indemnified Party shall
deliver a Claim Notice to the Indemnifying Party.
(c) Within 20 days after delivery of a Claim Notice, the Indemnifying Party shall deliver to
the Indemnified Party a Response, in which the Indemnifying Party shall: (i) agree that the
Indemnified Party is entitled to receive all of the Claimed Amount (in which case the Response
shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed
Amount, by check or by wire transfer), (ii) agree that the Indemnified Party is entitled to receive
the Agreed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying
Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer), or (iii)
dispute that the Indemnified Party is entitled to receive any of the Claimed Amount.
(d) If the Indemnifying Party delivers a Response to the Indemnified Party indicating that
there is an amount in Dispute, the Indemnifying Party and the Indemnified Party shall attempt in
good faith to resolve the Dispute related to such amount. If the Indemnifying Party and the
Indemnified Party resolve such dispute in writing, then their resolution of such dispute shall be
binding on the Indemnifying Party and the Indemnified Party and a settlement agreement stipulating
the amount owed to the Indemnified Party (the “Stipulated Amount”) shall be signed by the
Indemnifying Party and the Indemnified Party. Within three days after the execution of such
settlement agreement, the Indemnifying Party shall pay to the Indemnified Party the Stipulated
Amount by check or by wire transfer.
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(e) If the Indemnifying Party and the Indemnified Party are unable to resolve the dispute
relating to any amount in Dispute during the 30-day period commencing upon the delivery of the
Response to the Indemnifying Party, then either the Indemnifying Party or the Indemnified Party may
submit the amount in Dispute to binding arbitration in the State of California in accordance with
the JAMS Comprehensive Arbitration Rules and Procedures then in effect. Arbitration will be
conducted by one arbitrator, mutually selected by the Indemnified
Party and the Indemnifying Party; provided, however, that if the Indemnified Party and the
Indemnifying Party fail to mutually select an arbitrator within 15 business days after the
contested portion of the indemnification claim is submitted to arbitration, then the arbitrator
shall be selected by JAMS in accordance with its Comprehensive Arbitration Rules and Procedures
then in effect. The parties agree to use commercially reasonable efforts to cause the arbitration
hearing to be conducted within 75 days after the appointment of the arbitrator, and to use
commercially reasonable efforts to cause the decision of the arbitrator to be furnished within 15
days after the conclusion of the arbitration hearing. The arbitrator’s authority shall be confined
to: (i) whether the Indemnified Party is entitled to recover the amount in Dispute (or a portion
thereof), and the portion of the amount in Dispute the Indemnified Party is entitled to recover;
and (ii) whether either party to the arbitration shall be required to bear and pay all or a portion
of the other party’s attorneys’ fees and other expenses relating to the arbitration. The final
decision of the arbitrator shall include the dollar amount of the award to the Indemnified Party,
if any (the “Award Amount”), and shall be furnished in writing to the Indemnifying Party, the
Indemnified Party and shall constitute a conclusive determination of the issues in question,
binding upon the Indemnifying Party and the Indemnified Party. Within three days following the
receipt of the final award of the arbitrator setting forth the Award Amount, if any, the
Indemnifying Party shall pay to the Indemnified Party the Award Amount by check or by wire
transfer.
7.5 Survival of Representations and Warranties. All representations and warranties
of the Parties shall (a) survive the Closing and (b) shall expire on the date that is the
twenty-four (24) month anniversary of the Closing Date, except that (i) the representations and
warranties set forth in Sections 4.1, 4.2, 4.3, 5.1, 5.2 and 5.3 shall survive the Closing without
limitation and (ii) the representations and warranties set forth in Sections 4.7, 4.13, 4.14, 4,15
and 4.16 shall survive until 30 days following expiration of all statutes of limitation applicable
to the matters referred to therein (with respect to each of the foregoing, the “Designated
Date”). If an Indemnified Party acting in good faith delivers to an Indemnifying
Party, either a Claim Notice or an Expected Claim Notice prior to the applicable Designated
Date, then the claim asserted in such notice shall survive until such time as such claim is fully
and finally resolved in accordance with the provisions of Article VII. If the legal proceeding
or written claim with respect to which an Expected Claim Notice has been given is definitively
withdrawn or resolved in favor of the Indemnified Party, the Indemnified Party shall promptly so
notify the Indemnifying Party.
7.6 Additional Limitations. Notwithstanding anything herein to the contrary, in no
event shall an Indemnified Party be entitled to any consequential, punitive or special damages
except in the event of fraud or willful misconduct.
7.7 Treatment of Indemnity Payments. Any payments made to an Indemnified Party
pursuant to this Article VII shall be treated as an adjustment to the Purchase Price for tax
purposes.
22
ARTICLE VIII
8.1 Confidential Information. As used in this Agreement, the term “Confidential
Information” means all secret, confidential or proprietary information or data, whether
provided in written, oral, graphic, video, computer, electronic or other form, provided pursuant to
this Agreement or generated pursuant to this Agreement by one Party (the “Disclosing
Party”) to the other Party (the “Receiving Party”), including information relating to
the Disclosing Party’s existing or proposed research, development efforts, patent applications,
business or products, and all notes, analyses, compilations, studies, interpretations or other
documents whether in tangible form or on electronic or other data storage media, prepared by the
Receiving Party and its directors, managers, employees, independent contractors, agents or
consultants (collectively, “Representatives”), which contain, reflect or are based on, in
whole or in part, Confidential Information furnished to the Receiving Party or its Representatives
by the Disclosing Party or any to its Representatives, and any other materials that have not been
made available by the Disclosing Party to the general public. Notwithstanding the foregoing
sentence, Confidential Information shall not include any information or materials that:
(a) were already known to the Receiving Party (other than under an obligation of
confidentiality), at the time of disclosure by the Disclosing Party;
(b) were generally available to the public or otherwise part of the public domain at the time
of disclosure thereof to the Receiving Party;
(c) became generally available to the public or otherwise part of the public domain after
disclosure or development thereof, as the case may be, and other than through any act or omission
of the Receiving Party in breach of the Receiving Party’s confidentiality obligations under this
Agreement;
(d) were disclosed to a Party, other than under an obligation of confidentiality, by a Third
Party who had no obligation to the Disclosing Party not to disclose such information to others; or
(e) were independently discovered or developed by or on behalf of the Receiving Party without
the use of the Confidential Information belonging to the other Party.
8.2 Confidentiality Obligations. Each Receiving Party shall keep all Confidential
Information received from the other Party with the same degree of care it maintains the
confidentiality of its own Confidential Information. The Receiving Party shall not use such
Confidential Information for any purpose other than in performance of this Agreement or disclose
the same to any other Person other than to such of its and its Affiliates’ directors, managers,
employees, independent contractors, agents or consultants who have a need to know such Confidential
Information to implement the terms of this Agreement or enforce its rights under this Agreement;
provided, however, that a Receiving Party shall advise any of its and its
23
Affiliates’ directors,
managers, employees, independent contractors, agents or consultants who receives such Confidential
Information of the confidential nature thereof and of the obligations contained in this Agreement
relating thereto, and the Receiving Party shall be responsible for the compliance by such
Representatives with such obligations as if they had been a party hereto. Upon termination of this
Agreement, the Receiving Party shall return or destroy all documents, tapes or other media
containing Confidential Information of the Disclosing Party that remain in
the possession of the Receiving Party’s Representatives. It is understood that receipt of
Confidential Information under this Agreement will not limit the Receiving Party from assigning its
employees to any particular job or task in any way it may choose, subject to the terms and
conditions of this Agreement.
8.3 Permitted Disclosure and Use. Notwithstanding Section 8.2, either Party may
disclose Confidential Information belonging to the other Party only to the extent such disclosure
is reasonably necessary to: (a) comply with or enforce any of the provisions of this Agreement; (b)
comply with a bona fide legal requirement (including by deposition, interrogatories, requests for
information or documents, subpoena, civil investigative demand, or similar legal process); or (c)
comply with applicable securities laws and regulations, applicable stock exchange, New York Stock
Exchange regulation or NASDAQ regulation. Seller may disclose the terms of the license being
granted pursuant to this Agreement by Seller to a Third Party under a confidentiality or
nondisclosure agreement in connection with potential divestitures of the Sellers’ assets that are
the subject of the license. Seller may disclose to a Third Party under a confidentiality or
nondisclosure agreement regarding assets, business and operations of the Sellers in connection with
capital raising and other potential transactions involving the Sellers’ assets that are not the
subject of this Agreement. If a Party deems it necessary to disclose Confidential Information
(other than disclosures being made under a confidentiality or nondisclosure agreement in connection
with capital raising and potential divestitures of the Sellers’ assets as permitted by the previous
two sentences) of the other Party pursuant to this Section 8.3, such Party shall give prompt prior
(to the extent possible) notice of such disclosure to the other Party.
8.4 Notification. The Receiving Party shall notify the Disclosing Party promptly upon
discovery of any unauthorized use or disclosure of the Disclosing Party’s Confidential Information,
and will cooperate with the Disclosing Party, at the Disclosing Party’s expense, in any reasonably
requested fashion to assist the Disclosing Party to regain possession of such Confidential
Information and to prevent its further unauthorized use or disclosure.
8.5 Confidentiality of this Agreement. Subject to the applicable obligations required
under securities laws as advised by Sellers’ outside securities counsel and the provisions of
Section 10.1, the terms of this Agreement shall be Confidential Information of each Party and, as
such, shall be subject to the provisions of this Article VIII.
ARTICLE IX
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For purposes of this Agreement, each of the following terms shall have the meaning set forth
below.
“Acquired Assets” shall mean the following assets, properties and rights of
Seller existing as of the Closing:
a) | all right, title and interest to the Product; | ||
b) | all rights under Assigned Contracts; | ||
c) | all rights of Seller to Product Line Intellectual Property; | ||
d) | all Biological Materials listed on Schedule 9.1(d); | ||
e) | Applicable Permits listed on Schedule 4.11; | ||
f) | all Anthrax Books and Records and Other Books and Records; and | ||
g) | all right, title and interest to the assets listed on Schedule 9.1(g). |
“Affiliate” shall mean an affiliate, as defined in Rule 12b-2 under the
Securities Exchange Act of 1934.
“Agreed Amount” shall mean part, but not all, of the Claimed Amount.
“Ancillary Agreements” shall mean the xxxx of sale and other instruments of conveyance
referred to in Section 3.2(a), and the instrument of assumption and other instruments referred to
in Section 3.2(b).
“Applicable Permits” is defined in Section 4.11.
“Anthrax Books and Records” shall mean all books, records, accounts, ledgers, files,
documents, correspondence, manufacturing and procedural manuals, Product Line Intellectual Property
records, studies, reports and other printed or written materials relating solely to the Product or
the Product Line Operations.
“Anthrax Field” shall mean the treatment or prevention of infections, diseases or
conditions in humans caused by exposure to Bacillus anthracis.
“Apptec” shall mean App Tec Laboratory Services, Inc. located in Philadelphia
Pennsylvania or any successor entity thereto.
“Assigned Contracts” shall mean the contracts, licenses, agreements and other
instruments relating to the Product or the Product Line Operations set forth on Schedule
1.3(a).
“Assumed Liabilities” shall mean all Liabilities, whether or not accruing, arising
out of or relating to events or occurrences happening or conditions existing, before, on or after
the Closing
25
Date, which relate directly to the Acquired Assets, other than Retained Liabilities.
Without limiting the foregoing, Assumed Liabilities include:
(a) the Liabilities of Seller arising under the Assigned Contracts (other than as a result
of a breach thereunder prior to the Closing Date); and
(b) the Liabilities arising from the Product excluding (i) tort claims related to
periods on or prior to the Closing Date, (ii) any and all Liability for Taxes payable by Seller and
any Taxes related to or associated with the Product to the extent attributable to taxable periods
on or before
the Closing Date, and (iii) claims arising under any violation or breach of law, rule or
regulation of any Governmental Entity to the extent attributable to periods on or before the
Closing Date.
“AVP-1C6” shall mean the monoclonal antibody which binds to the protective antigen of
Bacillus anthracis having a heavy chain variable domain amino acid sequence (VH) and a light chain
variable domain amino acid sequence (VK) as depicted as depicted in Figure 8 of U.S. Patent
Application Publication No. 2006-0246079.
“AVP-21D9” shall mean the monoclonal antibody which binds to the protective antigen of
Bacillus anthracis having a heavy chain variable domain amino acid sequence as depicted in Figure 5
and a light chain variable domain amino acid sequence as depicted in Figure 6 of U.S. Patent
Application Publication No. 2006-0246079.
“AVP-22G12” shall mean the monoclonal antibody which binds to the protective antigen
of Bacillus anthracis having a heavy chain variable domain amino acid sequence (VH) and a light
chain variable domain amino acid sequence (VL) as depicted as depicted in Figure 10 of U.S. Patent
Application Publication No. 2006-0246079.
“AVP-4H7” shall mean the monoclonal antibody which binds to the protective antigen of
Bacillus anthracis having a heavy chain variable domain amino acid sequence (VH) and a light chain
variable domain amino acid sequence (VL) as depicted as depicted in Figure 9 of U.S. Patent
Application Publication No. 2006-0246079.
“AVP Anthrax Patents” shall mean any existing or future patents which disclose the
Product or methods of making or using the Product in the Anthrax Field, including those patents
listed in Schedule 4.7(a) of the Disclosure Schedule and any substitutions, divisions,
continuations, continuations-in-part, reissues, renewals, registrations, confirmations,
re-examinations, extensions, supplementary protection certificates and the like, and any
provisional applications, of those patents listed in Section 4.7(a) of the Disclosure Schedule.
“Biological Materials” shall mean media (other than commercially available), cell
banks, cDNA, vectors, plasmids, cell lines, and protein antibodies directly related to the Product.
“Biologics License Application” shall mean a biologics license application filed with
the FDA pursuant to 21 C.F.R §601 for the authorization to market a biological product in the
United States.
26
“Books and Records” shall mean Anthrax Books and Records and Other Books and Records.
“Buyer” shall have the meaning set forth in the first paragraph of this Agreement.
“CERCLA” shall mean the federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
“Claim Notice” shall mean written notification which contains (i) a description of the
Damages incurred or reasonably expected to be incurred by the Indemnified Party and the Claimed
Amount of such Damages, to the extent then known, (ii) a statement that the
Indemnified Party is entitled to indemnification under Article VII for the Claimed
Amount and a reasonable explanation of the basis therefor, and (iii) a demand for payment in
the amount of such Damages.
“Claimed Amount” shall mean the amount of any Damages incurred or reasonably expected
to be incurred by the Indemnified Party.
“Closing” shall mean the closing of the transactions contemplated by this Agreement.
“Closing Date” is defined in Section 3.1.
“Code” shall mean the Internal Revenue Code of 1986, as amended.
“Combination Product” means any pharmaceutical product that includes both
(x) a Licensed Product and (y) other active ingredient(s).
“Commercial Sale” means, the sale of (i) the Product or (ii) any product Developed
or Commercialized under a sublicense of the rights granted under the Asset License in this
Agreement, to a Third Party for end use consumption by Buyer, any of its Affiliates, or by
Buyer’s or its Affiliate’s sublicensees. Commercial Sale excludes any sale or other
distribution for use in a clinical trial or other Development activity, for compassionate or
named-patient use or for test marketing.
“Commercialization” or “Commercialize” means any activities directed to producing,
manufacturing, marketing, promoting, distributing, importing, exporting or selling a Product.
“Competitive Product” shall mean a pharmaceutical product incorporating a monoclonal
antibody used for the treatment and prevention of infections, diseases or conditions in humans
caused by exposure to Bacillus anthracis.
“Controlling Party” shall mean the party controlling the defense of any Third Party
Action.
“Cover,” “Covering” or “Covered” shall mean, with respect to a product, that, but for
a license granted to a Party under a Valid Claim, the Development or Commercialization of such
product would infringe such Valid Claim.
27
“Damages” shall mean any and all Liabilities, monetary damages, fines, fees,
penalties, interest obligations, deficiencies, losses and expenses (including amounts paid in
settlement, interest, court costs, costs of investigators, fees and expenses of attorneys,
accountants, financial advisors and other experts, and other expenses of litigation).
Notwithstanding anything herein to the contrary the amount of any Damages for which indemnification
is provided shall be reduced to take account of any amounts for which an indemnified party actually
recovers against an insurance policy or against any third party other than pursuant to this
Agreement.
“Development” or “Develop” shall mean all research, development, and regulatory
activities regarding the Product. This includes (a) research, preclinical testing, toxicology,
formulation, and clinical studies of the Product; and (b) preparation, submission, review, and
development of data or information for the purpose of submission to a Governmental
Entity to obtain Regulatory Approval of the Product. Development shall include development and
regulatory activities for additional forms or formulations for the Product after Regulatory
Approval of the Product, including, post-approval clinical trials or phase 4 clinical trials with
respect to an approved indication.
“Disclosure Schedule” shall mean the disclosure schedule provided by Seller to Buyer
on the date hereof.
“Dispute” shall mean the dispute resulting if the Indemnifying Party in a Response
disputes its liability for all or part of the Claimed Amount.
“Environmental Law” shall mean any federal, state or local law, statute, rule, order,
directive, judgment, Permit or regulation relating to the environment, occupational health and
safety, or exposure of persons or property to Materials of Environmental Concern, including any
statute, regulation, administrative decision or order pertaining to: (i) the presence of or the
treatment, storage, disposal, generation, transportation, handling, distribution, manufacture,
processing, use, import, export, labeling, recycling, registration, investigation or remediation of
Materials of Environmental Concern or documentation related to the foregoing; (ii) air, water and
noise pollution; (iii) groundwater and soil contamination; (iv) the release, threatened release, or
accidental release into the environment, the workplace or other areas of Materials of Environmental
Concern, including emissions, discharges, injections, spills, escapes or dumping of Materials of
Environmental Concern; (v) transfer of interests in or control of real property which may be
contaminated; (vi) community or worker right-to-know disclosures with respect to Materials of
Environmental Concern; (vii) the protection of wild life, marine life and wetlands, and endangered
and threatened species; (viii) storage tanks, vessels, containers, abandoned or discarded barrels
and other closed receptacles; and (ix) health and safety of employees and other persons. As used
above, the term “release” shall have the meaning set forth in CERCLA.
“Environmental Matters” shall mean any Liability arising under Environmental
Law, whether arising under theories of contract, tort, negligence, successor or enterprise
liability, strict liability or other legal or equitable theory, including (i) any failure to comply
with an applicable Environmental Law and (ii) any Liability arising from the presence of,
release or threatened release of, or exposure of persons or property to, Materials of Environmental
Concern at the Acquired Assets or elsewhere. As used above, the term “release” shall have the
meaning set forth in CERCLA.
28
“Expected Claim Notice” shall mean a notice that, as a result of a legal proceeding
instituted by or written claim made by a third party, an Indemnified Party reasonably expects to
incur Damages for which it is entitled to indemnification under Article VII.
“FDA” shall mean the United States Food and Drug Administration, or any successor
agency thereto.
“Follow-On Biologic Product” shall mean a product developed by or on behalf of a
person or entity other than Buyer, its Affiliates or its or their sublicensees (a) that
contains an antibody having identical or substantially identical amino acid sequences in its
complementarity
determining regions (CDR’s) to the CDR amino acid sequences of the antibody that is the active
pharmaceutical ingredient in the Product; and (b) that has received regulatory approval for use
through any current or future regulatory approval process by which the sponsor or the regulatory
agency relies, in whole or in part, directly or indirectly, upon the data supporting the Product.
“GAAP” shall mean United States generally accepted accounting principles.
“Governmental Entity” shall mean any court, arbitrational tribunal, administrative
agency or commission or other governmental or regulatory authority or agency.
“GMP Clinical Materials” shall mean the following provided by Seller for review and
inspection by Buyer’s authorized representatives:
1) | All vials of the finished and released drug product (“FDP”) as contracted with Apptec for delivery under the U01 Grant and authorized for release by AppTec less a sufficient amount to enable Seller to complete its obligations under the U01 Grant; | ||
2) | AppTec’s documentation authorizing the release of the FDP, which for the avoidance of doubt includes the Certificate of Analysis; | ||
3) | Seller’s toxin neutralization assay (“TNA”) potency results as reflected in Seller’s report from tests performed by the Seller on a sample of the FDP provided by Apptec; |
“Grants Received” shall mean U.S. Government funding provided to Seller listed in
Schedule 4.7(i).
“Indemnified Party” shall mean a party entitled, or seeking to assert rights, to
indemnification under Article VII of this Agreement.
“Indemnifying Party” shall mean the party from whom indemnification is sought by the
Indemnified Party.
“Know-How” means inventions, discoveries, trade secrets, information, experience,
data, formulas, procedures, technology and results (whether or not patentable), including without
limitation discoveries, formulae, materials including biological materials, practices, methods,
processes, experience and test data (including physical, chemical, biological, toxicological,
pharmacological, clinical, and veterinary data), control assays, product specifications, analytical
and quality control data.
29
“Investigational New Drug Application” shall mean an investigational new drug
application submitted to the FDA, or equivalent application submitted to a regulatory authority in
any regulatory jurisdiction outside the United States, seeking authorization to test a biological
product in humans in order to generate data necessary for submission of a Biologics License
Application or an equivalent application in any regulatory jurisdiction outside the United States
“Liabilities” shall mean all debts, liabilities and obligations, whether accrued or
fixed, absolute or contingent, matured or unmatured or determined or determinable, including those
arising under any contract, agreement, arrangement, commitment or undertaking.
“Liens” shall mean any mortgage, pledge, security interest, encumbrance, charge,
easement, reversion or purchase right (whether arising by contract or by operation of
law), other than (i) mechanic’s, materialmen’s, warehousemen’s, landlords’, suppliers’ and
similar liens, (ii) liens arising under worker’s compensation, unemployment insurance, social
security, retirement, and similar legislation, (iii) unmatured Liens securing the payment of
Taxes which are not yet due and payable, and (iv) liens on goods in transit incurred pursuant
to documentary letters of credit, in each case arising in the Ordinary Course of Business of Seller
and not material to Seller.
“Licensed Product” means the Product as licensed or approved by any applicable
Regulatory Authority or any product Developed or Commercialized under a sublicense of the rights
granted under the Asset License in this Agreement.
“Material Adverse Effect” shall mean any change or effect that is materially adverse
to the Product or the Product Line Operations, taken as a whole in accordance with and as
contemplated under this Agreement, other than any change or effect arising out of (a) changes to
the economy or financial markets in general except to the extent such changes have a
disproportionate impact on the Product or the Product Line Operations, (b) conditions affecting the
industries in which the Product or the Product Line Operations participates generally, except
to the extent such conditions have a disproportionate impact on the Product or the Product Line
Operations, (c) actions taken by the Parties pursuant to the transactions contemplated by this
Agreement or (d) the negotiation, execution or announcement of this Agreement and the
transactions contemplated hereby, including any impact thereof on relationships, contractual or
otherwise with customers, suppliers, distributors, consultants or employees.
“Materials of Environmental Concern” shall mean any: pollutants, contaminants or
hazardous substances (as such terms are defined under CERCLA), pesticides (as such term is defined
under the Federal Insecticide, Fungicide and Rodenticide Act), solid wastes and hazardous wastes
(as such terms are defined under the Resource Conservation and Recovery Act), chemicals, other
radioactive or toxic materials, oil, petroleum and petroleum products (and fractions thereof), or
any other material (or article containing such material) listed or subject to regulation under any
law, statute, rule, regulation, order, Permit, or directive due to its potential, directly or
indirectly, to harm the environment or the health of humans or other living beings.
“Medical Product Regulatory Authority” means any Governmental Entity that is concerned
with the safety, efficacy, reliability, manufacture, investigation, sale or marketing of
pharmaceuticals, medical products, biologics or biopharmaceuticals, including the FDA.
30
“NDA” shall mean a new drug application, submitted to the FDA for commercial sale or
use of the Product, including any supplements, amendments or modifications thereto, or divisions
thereof, submitted to or required by the FDA.
“Net Sales” shall mean with respect to the Product or any product or antibody made,
produced, manufactured or sublicensed under the Asset License, the gross amount invoiced by
Buyer or any of its Affiliates or any sublicensee of Buyer or any of its Affiliates in
respect of Commercial Sales of the Product or other product by Buyer or any of its
Affiliates (or such
sublicensee) for which delivery has been made to Third Parties (but, for the
avoidance of doubt, excluding amounts paid by NIAID in grants), in each case less the following
deductions:
(a) normal and customary trade, cash and quantity discounts actually allowed and taken
directly with respect to such sales or dispositions (including retrospective price
reductions), and normal and customary inventory management fees actually paid
to wholesalers and reasonably allocated to Product;
(b) tariffs, duties, excises and sales taxes imposed upon and paid with respect to such sales
or dispositions (which does not include income, withholding or similar taxes);
(c) normal and customary commissions actually paid to third party distributors or selling
representatives or agents (to the extent included in the invoice);
(d) amounts repaid or credited by reason of rejections, defects, recalls or returns or because
of adjustments, billing errors, or trial prescriptions;
(e) reasonably allocated freight, transportation, transit, logistics
and shipping insurance expenses; and
(f) invoiced amounts that are written off as uncollectible in accordance with Buyer’s
accounting policies, as consistently applied.
Such amounts shall be determined in accordance with GAAP, consistently applied.
In the event the Product is sold as part of a Combination Product, the Net Sales from the
Combination Product, for the purposes of determining royalty payments, shall be determined by
multiplying the Net Sales (as determined above) of the Combination Product, during the applicable
royalty reporting period, by the fraction, A/(A+B), where A is the average sale price of the
Product when sold separately in finished form and B is the average sale price of the other active
ingredient(s) included in the Combination Product when sold separately in finished form, in each
case during the applicable royalty reporting period or, if sales of both the Product and the other
active ingredient(s) did not occur in such period, then in the most recent royalty reporting period
in which sales of both occurred. In the event that such average sale price cannot be determined
for both the Product and all other active ingredient(s) included in such Combination Product, Net
Sales for the purposes of determining royalty payments shall be calculated by multiplying the Net
Sales of the Combination Product by the fraction of C/(C+D) where C is the fair market value of the
Product and D is the fair market value of all other active ingredient(s) included in the
Combination Product. In such event, Buyer shall in good faith make a
31
determination of the
respective fair market values of the Product and all other active ingredient(s) included in the
Combination Product, and shall notify Seller of such determination and provide Seller with data to
support such determination. Seller shall have the right to review such determination of fair
market values and, if Seller disagrees with such determination, to notify Buyer of such
disagreement within sixty (60) days after Buyer notifies Seller of such determination. If Seller
notifies Buyer that Seller disagrees with such determination within such sixty (60) day period and
if thereafter the Parties are unable to agree in good faith as to such respective fair market
values, then such matter shall be referred to a mutually agreed independent Third
Party with experience regarding the pricing of pharmaceutical products for resolution, and
the determination of such Third Party shall be conclusive and binding on the parties. If
Seller does not notify Buyer that Seller disagrees with such determination within such sixty (60)
day period, such determination shall be conclusive and binding on the Parties.
“NIAID” shall mean the National Institute of Allergy and Infectious Diseases.
“NIAID Payments” shall mean the amounts payable by Buyer pursuant to
Section 2.3.
“non-Controlling Party” shall mean the Party that does not Control the defense
of any Third Party Action.
“Off-Site Liabilities” shall mean Environmental Matters resulting from any
transportation, treatment, storage, disposal or Release, or the arrangement therefor, in connection
with the Product Line Operations, of any Materials of Environmental Concern, to or at any property,
location, site or facility.
“Ordinary Course of Business” shall mean the ordinary course of business consistent
with past custom and practice.
“Other Books and Records” shall mean all books, records, accounts, ledgers, files,
documents, correspondence, manufacturing and procedural manuals, Product Line Intellectual Property
records, studies, reports and other printed or written materials, other than the Anthrax Books and
Records, necessary or useful to exploit the Product or the Product Line Operations.
“Parties” shall mean Buyer, Buyer Parent, Seller and Seller Parent. Party means any of
the foregoing.
“Patent” means (a) all patents and patent applications in any country or supranational
jurisdiction, and (b) any substitutions, divisions, continuations, continuations-in-part, reissues,
renewals, registrations, confirmations, re-examinations, extensions, supplementary protection
certificates and the like, and any provisional applications, of any such patents or patent
applications.
“Product” shall mean the anthrax monoclonal antibodies XXX-00X0, XXX-0X0, XXX-0X0, and
AVP-22G12 as well as any anthrax monoclonal antibodies which would be rendered unpatentable by the
disclosure of the AVP Anthrax Patents, any compositions of matter comprising the variable domains
of these anthrax monoclonal antibodies or any fragment or variants thereof, including any one or
more complementarity determining regions (CDR’s) of
32
these anthrax monoclonal antibodies, or nucleic
acids encoding any such anthrax monoclonal antibodies or fragments.
“Product Line Intellectual Property” shall mean all AVP Anthrax Patents and Seller
Know-How and any in-licenses necessary or useful to exploit the Product and carry out Product Line
Operations, including a royalty-free paid up internal use license to the Xenerex Technology solely
insofar as such technology may have been used to identify the Product or may in the future be used
to identify a monoclonal antibody for use in the Anthrax Field. As set forth below, the Xenerex
Technology shall exclude the use of human splenocytes to make human monoclonal
antibodies, as claimed in U.S. Patent 5,958,765 and insofar as claimed in any Patent that
claims priority to or from U.S. Patent 5,958,765.
“Product Line Operations” shall mean the research, development, manufacturing,
exploitation and sale of the Product as currently conducted.
“Proposal” shall mean the proposal submitted to NIAID in response to Broad Agency
Announcement NIH-NIAID-DMID-08-20 “Development of Therapeutic Agents for Select Biodefense
Pathogens.”
“Purchase Price” shall mean the Proposal Payment, the Execution Date Payment, NIAID
Payments, the GMP Payment, and the Sales-Based Contingent Purchase Price Payments.
“Registrations” shall mean the regulatory approvals, licenses and applications held or
made by Seller relating to the Product as listed on Schedule 9.2, and all related
correspondence, reports and other submissions to Governmental Entities.
“Regulatory Approval” shall mean the approvals (including any applicable governmental
price and reimbursement approvals), licenses, registrations or authorizations of Regulatory
Authorities necessary for the Commercialization of a product in a country or territory.
“Response” shall mean a written response containing the information provided for in
Section 7.3(c).
“Retained Liabilities” means the following, and only the following, Liabilities of
Sellers which, notwithstanding any other provision of this Agreement, will not be assumed by
Buyer:
(a) all Liabilities of Sellers to the extent not related to the Acquired Assets
other than as set forth in this definition;
(b) all obligations and Liabilities of Sellers for the performance of work
required under the U01 Grant including, unless waived by the NIAID:
• | New Zealand Rabbit tissue cross reactivity study; | ||
• | viral clearance study; | ||
• | Apptec 100 liter scale development of the Product; |
33
• | stability and other studies as agreed to between Seller and Apptec; and | ||
• | four week single dose toxicology study in New Zealand White rabbits. |
(c) all amounts due and payable to Lonza Biologics PLC,
Lonza Sales AG, or any successors or assigns that have accrued on or prior to the date
hereof;
(d) all liabilities and obligations to pay any fees or commissions to any broker, finder or
agent with respect to the transactions contemplated by this Agreement;
(e) all Liabilities of Sellers for Taxes incurred, or arising out of the conduct
of the Product Line Operations through the Closing;
(f) all Liabilities for wages, pensions, incentive compensation, equity
compensation, severance, retiree or other benefits, overtime, workers compensation benefits,
occupational safety and health liabilities and other similar Liabilities in respect of Sellers’
employees relating to the period through the Closing and in respect of employees of the Sellers who
do not become employed by Buyer as a result of the transactions contemplated by this Agreement,
whether relating to the period before or after the Closing;
(g) all Liabilities of Sellers for costs and expenses (including legal fees and
expenses) that Sellers have incurred in connection with this Agreement and the transactions
contemplated hereby; and
(h) any liability or obligation of Sellers under this Agreement and the Ancillary
Agreements.
“Seller” shall have the meaning set forth in the first paragraph of this Agreement.
“Seller Know-How” shall mean Know-How controlled by Seller or its Affiliates and
reasonably necessary or useful for the development and commercialization of the Product.
“Seller Knowledge” whenever a phrase in this Agreement is qualified “to the knowledge
of Seller,” “ to Seller’s knowledge” or a similar phrase, it shall mean, with respect to a fact,
(a) the current actual knowledge of any of the following individuals: Xxxxx Xxxxxx, Xxxx Xxxxxxx,
Xxxxxxxx Xxxxxx, Xxxxxxx Xxxx, and Xxxx Xxxxxxxxxxx and (b) the knowledge of such individuals
obtained after making inquiry of their direct reports most likely to have knowledge of such fact;
provided, however, that with respect to this subsection (b), with respect to facts related to any
in-licensed intellectual property, the knowledge of Seller shall only relate to actually known
facts.
“Services” shall have the meaning set forth in Section 6.9 of this Agreement.
“Taxes” shall mean any and all taxes, charges, fees, duties, contributions, levies or
other similar assessments or liabilities in the nature of a tax, including income, gross receipts,
corporation, ad valorem, premium, value-added, net worth, capital stock, capital gains,
documentary, recapture, alternative or add-on minimum, disability, estimated, registration,
recording, excise, real property, personal property, sales, use, license, lease, service, service
use,
34
transfer, withholding, employment, unemployment, insurance, social security, national
insurance, business license, business organization, environmental, workers compensation, payroll,
profits, severance, stamp, occupation, windfall profits, customs duties, franchise and other taxes
of any kind whatsoever imposed by the United States of America or any state, local or foreign
Governmental Entity, and any interest, fines, penalties, assessments or additions to tax
imposed with respect to such items or any contest or dispute thereof.
“Tax Benefit” means, with respect to any Damages for which indemnity is paid, all
items of deduction, loss or credit arising out of any such Damages, and in the case of any
carryback of
any such item, any interest received from any Tax authority as a result of the carryback of
such item.
“Third Party” shall mean any person or entity other than a Party or its Affiliates.
“Third Party Action” shall mean any suit or proceeding by a person or entity other
than a Party for which indemnification may be sought by a Party under Article VII.
“U01 Grant” shall mean NIAID grant award number 1U01AI070493-01 awarded by the U.S.
National Institute of Allergy and Infectious Diseases of the National Institutes of Health awarded
on June 27, 2006, as amended.
“Valid Claim” means a claim in any issued patent or pending patent application in the
patents included in the Acquired Assets, that such claim (a) has not been held invalid or
unenforceable by a non-appealed or un-appealable decision of a Governmental Entity (b) has
not been admitted invalid through disclaimer or dedication to the public, or (c) has not expired,
been determined to be unenforceable, been cancelled, withdrawn, or abandoned.
“Xenerex Technology” means Know-How or intellectual property owned, or licensed, by
Seller reasonably necessary or useful in connection with the development or commercialization of
pharmaceutical products incorporating human monoclonal antibodies. For purposes of this Agreement,
the Xenerex Technology shall exclude the use of human splenocytes to make human monoclonal
antibodies, as claimed in U.S. Patent 5,958,765 and insofar as claimed in any Patent that claims
priority to or from U.S. Patent 5,958,765.
ARTICLE X
10.1 Publicity.
(a) Generally. The Parties agree to the form of press release attached as Exhibit
E. With respect to any xxxxxx xxxxx release to be issued in connection with the transactions
contemplated by this Agreement, and the Parties will cooperate in the release thereof as soon as
practicable after the execution of this Agreement by the Parties. The Parties also recognize that
each Party may from time to time desire to issue additional press releases and make other public
statements or disclosures regarding the terms of this Agreement. In such event, the Party desiring
to issue an additional press release or make a public statement or
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disclosure shall provide the
other Party with a copy of the proposed press release, statement or disclosure for review and
approval in advance, which advance approval shall not be unreasonably withheld, conditioned or
delayed. Notwithstanding the foregoing, if the parties are unable to agree on the disclosures on a
timely basis to permit compliance with a party’s disclosure and filing obligations under the
securities laws of the United States, rules and regulations of the Securities and Exchange
Commission, or any applicable stock exchange or NASDAQ regulation, the parties may nonetheless make
such disclosures as they are required to make after consultation with their outside securities law
counsel, provided that such disclosures shall not include any Specially Designated Confidential
Terms (defined below) for which
confidential treatment has been granted. Except as permitted by Section 8.3, no other public
statement or disclosure concerning the terms of this Agreement shall be made, either directly or
indirectly, by either Party hereto, without first obtaining the approval of the other Party (which
may be provided electronically). Once any public statement or disclosure has been approved in
accordance with this Section 10.1, then either Party may appropriately communicate information
contained in such permitted statement or disclosure.
(b) Confidential Treatment Request. The Parties agree that the royalty rates set
forth in Section 2.4 (the “Specially Designated Confidential Terms”) are competitively sensitive
information. In addition to the Parties’ general agreement to keep the terms of this Agreement
confidential, the Parties agree to take additional measures to keep confidential the Specially
Designated Confidential Terms. The Parties agree that Buyer and Seller will make a one-time
request for confidential treatment of the Specially Designated Confidential Terms (at a minimum) in
connection with any filing of this Agreement as an exhibit to any registration statement or
periodic report filed with the Securities and Exchange Commission, and will not disclose the
Specially Designated Confidential Terms in any such filing unless such request for confidential
treatment of the Specially Designated Confidential Terms is denied. Any confidentiality request
shall be submitted to and approved by the other Party in advance of filing, such approval not to be
unreasonably conditioned, delayed, or withheld.
10.2 No Third Party Beneficiaries. This Agreement shall not confer any rights or
remedies upon any person other than the Parties and their respective successors and permitted
assigns.
10.3 Entire Agreement; Amendments. This Agreement constitutes the entire agreement
between the Parties with respect to the subject matter hereof, and supersedes all previous
arrangements with respect to the subject matter hereof, whether written or oral. Any amendment or
modification to this Agreement shall be made in writing signed by both Parties.
10.4 Assignment. Neither Seller nor Buyer may assign this Agreement in whole or in
part without the consent of the other, except if such assignment occurs in connection with the
merger, consolidation, reorganization or similar transaction sale or transfer of all or
substantially all of the business and assets of Sellers, on the one hand, or Buyer, on the other,
to which the subject matter of this Agreement pertains. Notwithstanding the foregoing, any Party
may assign its rights pursuant to this Agreement in whole or in part to an Affiliate of such Party.
For the avoidance of doubt, Seller may license, assign, hypothecate, pledge or otherwise transfer
or sell the Xenerex Technology, or other rights of Sellers not sold or licensed under this
Agreement, to
36
Third Parties for applications or other uses that are not in the Anthrax Field
without the consent of Buyer, provided that the party to which Seller so assigns, hypothecates,
pledges or otherwise transfers the Xenerex Technology agrees to be bound by the limited exclusive
and non-exclusive license-related obligations of Seller hereunder.
10.5 Counterparts and Facsimile Signature. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which together shall
constitute one and the same instrument. This Agreement may be executed by facsimile signature.
10.6 Headings. The section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation of this Agreement.
10.7 Notices. All notices, requests, demands, claims, and other communications
hereunder shall be in writing. Any notice, request, demand, claim, or other communication
hereunder shall be deemed duly delivered (a) four business days after it is sent by registered or
certified mail, return receipt requested, postage prepaid, or (b) one business day after it is sent
for next business day delivery via a reputable nationwide overnight courier service, or (c) on the
date on which delivered if sent by facsimile transmission, in each case to the intended recipient
as set forth below:
If to Seller or Seller Parent:
|
Copy to: | |
Xxxxxx Xxxxxxx Xxxxx & Bear LLP | ||
000 Xxxxxxxxxx, Xxxxx 000
|
0000 Xxxx Xxxxxx, 00xx Xxxxx | |
Xxxxx Xxxxx, XX 00000
|
Xxxxxx, XX 00000-0000 | |
Attn:
|
Attn: | |
Xxxxxxx X. Xxxxxxx
|
Xxxxxx Xxxxxx, Ph.D. | |
Vice President, Business Development
|
Fax: 000-000-0000 | |
Facsimile No.: (000) 000-0000
|
Email: Xxxxxx.Xxxxxx@xxxx.xxx | |
Xxxxxxxxx Xxxxxx |
||
Vice President, Finance |
||
Facsimile No.: (000) 000-0000 |
||
If to Buyer or Buyer Parent: |
||
Emergent BioSolutions Inc. |
||
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000 |
||
Xxxxxxxxx, XX 00000 |
||
Attn: General Counsel |
||
Facsimile No.: (000) 000-0000 |
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Any Party may change its address by giving notice to the other Party in the manner herein
provided.
10.8 Governing Law. This Agreement shall be construed and the respective rights of
the Parties determined according to the substantive laws of the State of New York, notwithstanding
the provisions governing conflict of laws under such New York law to the contrary.
10.9 Severability. If, under applicable law or regulation, any provision of this
Agreement is invalid or unenforceable, or otherwise directly or indirectly affects the validity of
any other material provision(s) of this Agreement (such invalid or unenforceable provision, a
“Severed Clause”), this Agreement shall endure except for the Severed Clause. The Parties shall
consult one another and use reasonable efforts to agree upon a valid and enforceable provision that
is a reasonable substitute for the Severed Clause in view of the intent of this Agreement.
10.10 Expenses. Except as set forth in Article VII or as expressly provided in this
Agreement, each Party shall bear its own costs and expenses (including legal fees and expenses)
incurred in connection with this Agreement and the transactions contemplated hereby.
10.11 Submission to Jurisdiction. Except as provided with respect to the resolution
of Disputes in Section 7.4(e), each Party (a) submits to the jurisdiction of any state or federal
court sitting in the State of New York in any action or proceeding arising out of or relating to
this Agreement or the Ancillary Agreements, (b) agrees that all claims in respect of such action or
proceeding may be heard and determined in any such court, (c) waives any claim of inconvenient
forum or other challenge to venue in such court, (d) agrees not to bring any action or proceeding
arising out of or relating to this Agreement or the Ancillary Agreements in any other court. Each
party agrees to accept service of any summons, complaint or other initial pleading made in the
manner provided for the giving of notices in Section 10.7, provided that nothing in this Section
10.11 shall affect the right of either Party to serve such summons, complaint or other initial
pleading in any other manner permitted by law.
10.12 Specific Performance. Each Party acknowledges and agrees that the other Party
would be damaged irreparably in the event any of the provisions of this Agreement are not performed
in accordance with their specific terms or otherwise are breached. Accordingly, each Party agrees
that the other Party shall be entitled to an injunction or other equitable relief to prevent
breaches of the provisions of this Agreement and to enforce specifically this Agreement and the
terms and provisions hereof in any action instituted in any court of the United States or any state
thereof having jurisdiction over the Parties and the matter, in addition to any other remedy to
which it may be entitled, at law or in equity.
10.13 Buyer Parent Payment Obligation. From and after the date of this Agreement,
Buyer Parent agrees to be jointly and severally liable for the complete and prompt payment of all
Buyer’s payment obligations under this Agreement.
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10.14 Construction.
a) The language used in this Agreement shall be deemed to be the language chosen by the
Parties to express their mutual intent, and no rule of strict construction or contra preferentum
shall be applied against either Party.
b) Any reference to any federal, state, local, or foreign statute or law shall be deemed also
to refer to all rules and regulations promulgated thereunder, unless the context requires
otherwise.
c) Any reference to any Article, Section or paragraph shall be deemed to refer to an Article,
Section or paragraph of this Agreement, unless the context clearly indicates otherwise.
10.15 No Implied Waivers; Rights Cumulative. No failure on the part of Seller or
Buyer to exercise, and no delay in exercising, any right, power, remedy or privilege under this
Agreement, or provided by statute or at law or in equity or otherwise, shall impair, prejudice or
constitute a waiver of any such right, power, remedy or privilege or be construed as a waiver of
any breach of this Agreement or as an acquiescence therein, nor shall any single or partial
exercise of any such right, power, remedy or privilege preclude any other or further exercise
thereof or the exercise of any other right, power, remedy or privilege.
EMERGENT PRODUCT DEVELOPMENT GAITHERSBURG
INC. |
||||
By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
Name: | Xxxxxxx X. Xxxxxxxx | |||
Title: | President, EPDG | |||
Date: | Xxxxx 0, 0000 | |||
XXXXXXX BIOSCIENCES INC. |
||||
By: | /s/ Xxxxx X. Xxxxxx | |||
Name: | Xxxxx X. Xxxxxx | |||
Title: | President and CEO | |||
Date: | 3-6-08 |
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AVANIR PHARMACEUTICALS INC. |
||||
By: | /s/ Xxxxx X. Xxxxxx | |||
Name: | Xxxxx X. Xxxxxx | |||
Title: | President and CEO | |||
Date: | 3-6-08 | |||
Buyer Parent joins this Agreement solely for purposes of making the representations set forth in Article V and agreeing to be jointly and severally liable for complete and prompt payment of all Buyer’s financial obligations set forth in this Agreement. EMERGENT BIOSOLUTIONS INC. |
||||
By: | /s/ Xxxxxx X. Xxxxx-Nabi | |||
Name: | Xxxxxx X. Xxxxx-Nabi | |||
Title: | President and COO | |||
Date: | March 6, 2008 | |||
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