Exhibit 10.2

 

TRANSITION SERVICES AGREEMENT

BY AND BETWEEN

EMERGENT BIOSOLUTIONS INC.

AND

APTEVO THERAPEUTICS INC.

DATED AS OF JULY 29, 2016

 

 

 

 

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TABLE OF CONTENTS

 

Page

 

ARTICLE I DEFINITIONS

1

 

 

ARTICLE II SERVICES, DURATION AND SERVICES MANAGERS

3

 

 

Section

2.01.

Services

3

 

 

 

 

Section

2.02.

Duration of Services

3

 

 

 

 

Section

2.03.

Services Not Included

3

 

 

 

 

Section

2.04.

Additional Services

3

 

 

 

 

Section

2.05.

Personnel

4

 

 

 

 

ARTICLE III ADDITIONAL ARRANGEMENTS

5

 

 

Section

3.01.

Software and Software Licenses

5

 

 

 

 

Section

3.02.

Computer-Based and Other Resources

6

 

 

 

 

Section

3.03.

Connectivity to Host Systems

6

 

 

 

 

Section

3.04.

Access to Facilities

6

 

 

 

 

Section

3.05.

Cooperation

7

 

 

 

 

Section

3.06.

License Grants

7

 

 

 

 

Section

3.07.

Data Protection

7

 

 

 

 

ARTICLE IV COSTS AND DISBURSEMENTS

7

 

 

Section

4.01.

Costs and Disbursements

7

 

 

 

 

Section

4.02.

Tax Matters

9

 

 

 

 

ARTICLE V STANDARD FOR SERVICE

10

 

 

Section

5.01.

Standard for Service

10

 

 

 

 

Section

5.02.

Disclaimer of Warranties

11

 

 

 

 

Section

5.03.

Compliance with Laws and Regulations

11

 

 

 

 

ARTICLE VI REPRESENTATIONS; LIMITED LIABILITY AND INDEMNIFICATION

11

 

 

Section

6.01.

Representations

11

 

 

 

 

Section

6.02.

Consequential and Other Damages

11

 

 

 

 

Section

6.03.

Limitation of Liability

12

 

 

 

 

Section

6.04.

Obligation To Reperform; Liabilities

12

 

 

 

 

Section

6.05.

Release and Recipient Indemnity

12

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Section

6.06.

Provider Indemnity

12

 

 

 

 

Section

6.07.

Indemnification Procedures

13

 

 

 

 

Section

6.08.

Liability for Payment Obligations

13

 

 

 

 

Section

6.09.

Exclusion of Other Remedies

13

 

 

 

 

Section

6.10.

Confirmation

13

 

 

 

 

ARTICLE VII TERM AND TERMINATION

13

 

 

Section

7.01.

Term and Termination

13

 

 

 

 

Section

7.02.

Effect of Termination

14

 

 

 

 

Section

7.03.

Force Majeure

14

 

 

 

 

ARTICLE VIII DISPUTE RESOLUTION; SERVICES MANAGERS

15

 

 

Section

8.01.

Disputes

15

 

 

 

 

Section

8.02.

Negotiation and Mediation

15

 

 

 

 

Section

8.03.

Arbitration

16

 

 

 

 

Section

8.04.

Interim Relief

17

 

 

 

 

Section

8.05.

Remedies

17

 

 

 

 

Section

8.06.

Expenses

17

 

 

 

 

Section

8.07.

Continuation of Services and Commitments

17

 

 

 

 

Section

8.08.

Transition Services Managers

17

 

 

 

 

ARTICLE IX GENERAL PROVISIONS

18

 

 

Section

9.01.

Provisions from the SDA

18

 

 

 

 

Section

9.02.

No Agency

18

 

 

 

 

Section

9.03.

Treatment of Confidential Information

18

 

 

 

 

Section

9.04.

Further Assurances

18

 

 

 

 

Section

9.05.

Dispute Resolution

19

 

 

 

 

Section

9.06.

Notices

19

 

 

 

 

Section

9.07.

Entire Agreement

19

 

 

 

 

Section

9.08.

No Third-Party Beneficiaries

19

 

 

 

 

Section

9.09.

Interpretation

19

 

 

 

 

Section

9.10.

Assignability

20

 

 

 

 

Section

9.11.

Non-Recourse

21

 

 

 

 

Section

9.12.

Expenses

21

 

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Schedules & Exhibits:

 

Exhibit:

Exhibit A

Services Managers

Exhibit B

Quality Agreement

 

 

Schedule:

 

Schedule A-1

Analytical/Bioanalytical Services

Schedule A-2

Alzheimer’s Research and Development

Schedule A-3

Clinical Research

Schedule A-4

Clinical Data Management and Biostatistics

Schedule A-5

Distribution of WinRho in Uruguay

Schedule A-6

Finance

Schedule A-7

IT

Schedule A-8

Medical Affairs

Schedule A-9

Pharmacovigilance

Schedule A-10

Product Development (IXINITY)

Schedule A-11

Project Management (IXINITY)

Schedule A-12

Quality Assurance

Schedule A-13

Regulatory Affairs

Schedule A-14

Sales, Marketing and Supply Chain

Schedule B

Service Charges

Schedule C

Annual Services Work Hours Cap

 

 

 

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TRANSITION SERVICES AGREEMENT

This TRANSITION SERVICES AGREEMENT, dated as of July 29, 2016 (this
“Agreement”), is entered into by and between Emergent BioSolutions Inc., a
Delaware corporation (“Emergent”), and Aptevo Therapeutics Inc., a Delaware
corporation (“Aptevo”).  Unless otherwise defined in this Agreement, all
capitalized terms used in this Agreement shall have the meaning set forth in the
Separation and Distribution Agreement, dated as of the date hereof, by and
between Emergent and Aptevo (as amended, modified or supplemented from time to
time in accordance with its terms, the “SDA”).

RECITALS

WHEREAS, the board of directors of Emergent has determined that it is in the
best interests of Emergent and its shareholders that the Aptevo Business be
operated by a newly incorporated publicly traded company;

WHEREAS, Emergent and Aptevo have entered into the SDA;

WHEREAS, in order to facilitate and provide for an orderly transition under the
SDA, the Parties (as defined herein) desire to enter into this Agreement to set
forth the terms and conditions pursuant to which members of the Emergent Group
shall provide to members of the Aptevo Group the Services (as defined herein)
for a transitional period; and

WHEREAS, the SDA requires execution and delivery of this Agreement by Emergent
and Aptevo on or prior to the Distribution Date.

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained in this Agreement, the Parties, intending to be legally bound, hereby
agree as follows:

ARTICLE I
DEFINITIONS

The following capitalized terms used in this Agreement shall have the meanings
set forth below:

“Agreement” shall have the meaning set forth in the Preamble.

“Additional Services” shall have the meaning set forth in Section 2.04.

“Aptevo” shall have the meaning set forth in the Preamble.

“Aptevo Local Service Manager” shall have the meaning set forth in Section
8.08(b).

“Aptevo Services Manager” shall have the meaning set forth in Section 8.08(b).

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Emergent” shall have the meaning set forth in the Preamble.

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“Emergent Local Service Manager” shall have the meaning set forth in Section
8.08(a).

“Emergent Services Manager” shall have the meaning set forth in Section 8.08(a).

“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of
this Agreement (or any amended or successor version thereof or any similar
non-U.S. law), any current or future regulations or official interpretations
thereof (including any Revenue Ruling, Revenue Procedure, Notice or similar
guidance issued by the IRS thereunder as a precondition to relief or exemption
from taxes under such provisions), and any intergovernmental agreements and any
agreements entered into pursuant to Section 1471(b) of the Code.

“Interest Payment” shall have the meaning set forth in Section 4.01(d).

“Party” shall mean Emergent and Aptevo individually, and “Parties” means
Emergent and Aptevo collectively, and, in each case, their permitted successors
and assigns.

“Provider” shall mean any member of the Emergent Group providing (or causing to
be provided) a Service under this Agreement.

“Provider Host Systems” shall mean the information technology systems and
platforms of the Provider.

“Provider Indemnified Party” shall have the meaning set forth in Section 6.05.

“Provider Individual User” shall mean those employees and contractors of the
Provider who have a need to access the Recipient Host Systems in order to
provide the Services.

“Quality Agreement” shall mean the Quality Agreement by and between Aptevo and
Emergent attached hereto as Exhibit B.

“Recipient” shall mean any member of the Aptevo Group to whom a Service under
this Agreement is being provided.

“Recipient Host Systems” shall mean the information technology systems and
platforms of the Recipient.

“Recipient Indemnified Party” shall have the meaning set forth in Section 6.06.

“Recipient Individual User” shall mean those employees and contractors of the
Recipient who have a need to access the Provider Host Systems in order to
receive the Services.

“Reimbursement Charges” shall have the meaning set forth in Section 4.01(c).

“Schedule(s)” shall have the meaning set forth in Section 2.01.

“SDA” shall have the meaning set forth in the Preamble.

“Service Charges” shall have the meaning set forth in Section 4.01(a).

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“Services” shall have the meaning set forth in Section 2.01.

“Tax” or “Taxes” shall have the meaning set forth in the Tax Matters Agreement.

“Term” shall have the meaning set forth in Section 7.01(a).

“Transfer Taxes” shall have the meaning set forth in Section 4.02(a).

“VAT” shall have the meaning set forth in Section 4.02(a).

ARTICLE II
SERVICES, DURATION AND SERVICES MANAGERS

Section 2.01.Services.  Subject to the terms and conditions of this Agreement,
Emergent shall use commercially reasonable efforts to provide or cause to be
provided to the Recipient the services (the “Services”) listed on Schedules A-1
through A-14 (each a “Schedule”, and collectively, the “Schedules”) in
accordance with the terms and conditions of this Agreement. For the avoidance of
doubt, Services provided in different regions or countries (as indicated by such
Services being listed on different subparts of the Schedules hereto) shall be
considered separate Services hereunder, notwithstanding that such Services may
be similar in nature. All of the Services shall be for the sole use and benefit
of the respective Recipient and the members of its Group. Emergent shall be
responsible for all actions and omissions of each Provider under this Agreement,
and Aptevo shall be responsible for all actions and omissions of each Recipient
under this Agreement. The Quality Agreement shall, together with this Agreement,
apply to the provision of any Service solely to the extent such Service relates
to quality assurance matters and is within the subject matter of the Quality
Agreement. In the event of any conflict or inconsistency between the Quality
Agreement and this Agreement solely with respect to quality assurance matters,
the Quality Agreement shall control. In the event of any other conflict or
inconsistency (including, for the avoidance of doubt, with respect to the
respective remedies of the parties with respect to any Service), this Agreement
shall control.

Section 2.02.Duration of Services.  Subject to the terms of this Agreement,
Emergent shall use commercially reasonable efforts to provide or cause to be
provided to the respective Recipient each Service until the earlier to occur of,
with respect to each such Service, (a) the expiration of the term for such
Service as set forth on the applicable Schedule or (b) the date on which such
Service is terminated under Section 7.01(b).

Section 2.03.Services Not Included.  It is not the intent of the Provider to
render, nor of the Recipient to receive from the Provider, professional advice
or opinions, whether with regard to Tax, legal or intellectual property
matters.  The Recipient shall not rely on, or construe, any Service rendered by
or on behalf of the Provider as such Tax, legal or intellectual property
professional advice or opinions, and the Recipient shall seek all third-party
professional advice and opinions with respect to such matters.  The Parties
expressly agree that no Provider shall have any Liability under any professional
code of conduct or other professional standards, duties or responsibilities.

Section 2.04.Additional Services.  During the Term, the Recipient may identify
additional services it wishes to receive that are not set forth in the Schedule,
provided that such

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services were provided to the Aptevo Business as of the Effective Time and are
necessary for its operation as conducted as of the Effective Time,
(collectively, the “Additional Services”). If the Provider agrees (in its sole
discretion) to provide Additional Services, the Parties shall work together in
good faith to determine the associated price, terms and conditions with respect
to the performance of each Additional Service. Upon written agreement to such
terms, such Additional Services shall be deemed Services hereunder and the
Parties shall execute a written amendment to the then-current Schedules to
reflect such Additional Service.  Notwithstanding the foregoing, the Provider
will not have any obligation to agree to provide any Additional Services. 

Section 2.05.Personnel.

(a)The Provider of any Service will have the right, in its sole discretion, to
(i) designate which personnel it will assign to perform any Service unless
specific personnel are identified as the personnel to be providing the
applicable Service in the Schedules and (ii) remove and replace such personnel
at any time; provided, however, that, in the event of any such replacement, the
Provider shall use commercially reasonable efforts to replace any such personnel
with personnel of similar expertise, education, training, qualification and
seniority (in each case to the extent such concepts are relevant to the delivery
of the applicable Service) and any such removal or replacement shall not relieve
the Provider of its obligation to provide any Service hereunder on the timeline
set forth in the Schedules; and provided, further, that the Provider will use
its commercially reasonable efforts to take such actions as may be reasonably
necessary to limit the disruption to the Recipient in the transition of the
Services to different personnel.  If the Recipient, in its reasonable discretion
and following discussions with the Provider, requests the Provider to remove
and/or replace any such personnel from their roles in respect of the Services
provided by the Recipient, the Provider shall consider such request in good
faith, and if such personnel are removed or replaced pursuant to the Recipient’s
request, then the Provider shall be under no obligation to provide the Services
previously provided by such personnel. Without limiting the foregoing, the
Recipient shall have the right to remove or require the removal of any Provider
personnel, agents or representatives from its premises whom the Recipient
believes in good faith are in violation of applicable Law, the terms of this
Agreement, or the Recipient’s reasonable policies generally applicable to its
employees or other service providers and of which the Provider has knowledge
based on written copies of such policies previously provided to the Provider by
the Recipient.

(b)In the event that the provision of any Service by the Provider requires the
cooperation and services of the personnel of the Recipient, the Recipient will
use commercially reasonable efforts to make available to the Provider such
personnel (who shall be appropriately qualified for purposes of so supporting
the provision of such Service by the Provider) as may be necessary for the
Provider to provide such Service, provided that nothing in this Agreement shall
be construed as an obligation of the Provider or the Recipient to hire, or
maintain the employment of, any individuals. If the Provider, in its reasonable
discretion and following discussions with the Recipient, requests the Recipient
to remove and/or replace any such personnel from their roles in respect of the
Services being provided by the Provider, the Recipient shall consider such
request in good faith.

(c)No Provider shall be liable under this Agreement for any Liabilities incurred
by the Recipient Indemnified Parties that are primarily attributable to, or that
are a

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consequence of, any actions or inactions of the personnel of the Recipient,
except for any such actions or inactions undertaken pursuant to the written
direction of the Provider. 

(d)A Provider may hire or engage one or more subcontractors to perform any or
all of its obligations under this Agreement; provided, however, that (i) the
Provider shall use the same degree of care in selecting any such subcontractor
as it would if such subcontractor was being retained to provide similar services
to the Provider and (ii) any contract with a subcontractor pertaining to the
provision of any Service by such subcontractor will be consistent with the
provisions of this Agreement. Without limitation of the foregoing, the Provider
agrees that any subcontract relationship that is evidenced by a written
agreement will obligate the subcontractor to provisions regarding standards of
service, compliance with applicable Law, inspection, Intellectual Property and
confidentiality no less stringent than those contained in this Agreement.  The
engagement of any subcontractor in compliance with this Section 2.05(d) will not
relieve the Provider of its obligations under this Agreement or any other
Ancillary Agreement, including without limitation, with respect to the scope of
the Services, the standard for services as set forth in ARTICLE V and the
content of the Services provided to the Recipient.

(e)Nothing in this Agreement shall grant any Party, or its employees, agents,
third-party providers and other Representatives, the right directly or
indirectly to control or direct the employees, business or operations of the
other Party or any member of its Group.  The employees, agents, third-party
providers and other Representatives of a Party shall not be required to report
to the management of the other Party nor be deemed to be under the management or
direction of the other Party.  The Recipient acknowledges and agrees that,
except as may be expressly set forth herein as a Service or in the Schedules or
otherwise expressly set forth in the SDA, another Ancillary Agreement or any
other applicable agreement, no Provider or any member of its Group shall be
obligated to provide, or cause to be provided, any service or goods to any
Recipient or any member of its Group.

ARTICLE III
ADDITIONAL ARRANGEMENTS

Section 3.01.Software and Software Licenses.

(a)If and to the extent requested by the Provider, the Recipient shall use
commercially reasonable efforts to assist the Provider in the Provider’s efforts
to obtain licenses (or other appropriate rights) to use, duplicate and
distribute, as necessary and applicable, certain computer software necessary for
the provision of Services and the Recipient shall be responsible for any fees,
payments or other Liabilities incurred by or on behalf of the Provider in
connection with obtaining any such license or rights to the extent such license
or rights relate exclusively to the provision of Services. The Parties
acknowledge and agree that there can be no assurance that such efforts will be
successful.  In the event that the Provider is unable to obtain such software
licenses, the Parties shall work together using commercially reasonable efforts
to obtain an alternative software license to allow the Provider to provide the
applicable Services, and the Parties shall negotiate in good faith an amendment
to the applicable Schedule to reflect any such new arrangement.

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(b)Without limitation of anything in Section 3.01(a), in the event that there
are any costs associated with obtaining software licenses in accordance with
Section 3.01(a), such costs shall be borne by the Recipient. 

Section 3.02.Computer-Based and Other Resources.  From and after the date of
this Agreement, each Party and its Affiliates shall cause all of their personnel
having access to the computer software, networks, hardware, technology or
computer based resources of the other Party pursuant to the SDA, or any
Ancillary Agreement, or in connection with performance, receipt or delivery of a
Service, to comply with all security guidelines (including physical security,
network access, internet security, confidentiality and personal data security
guidelines) of such other Party to the extent made known to the first
Party.  Each Party shall ensure that the access contemplated by this Section
3.02 shall be used by its personnel only for the purposes contemplated by, and
subject to the terms of, this Agreement.  Without limiting the foregoing,
subject to the terms and conditions of this Agreement, during the Term, (a) the
Recipient shall permit the Provider and authorized Provider Individual Users to
access the Recipient Host Systems for the sole purpose of providing the Services
in accordance with the terms and conditions expressly stated in this Agreement
and (b) the Provider shall permit the Recipient and authorized Recipient
Individual Users to access the Provider Host Systems for the sole purpose of
receiving the Services in accordance with the terms and conditions expressly
stated in this Agreement.  Notwithstanding anything else to the contrary in this
Agreement, (x) Emergent shall not permit any party (including contractors) other
than Provider Individual Users to access the Recipient Host Systems without
Aptevo’s prior written consent, which consent may be withheld in Aptevo’s sole
discretion and (y) Aptevo shall not permit any party (including contractors)
other than Recipient Individual Users to access the Provider Host Systems
without Emergent’s prior written consent, which consent may be withheld in
Emergent’s sole discretion.

Section 3.03.Connectivity to Host Systems.

(a)The Provider shall, at its sole expense, provide all equipment and network
connectivity necessary for each of its Representatives and each Provider
Individual User to connect to the Recipient Host Systems.

(b)The Recipient shall, at its sole expense, provide all equipment and network
connectivity necessary for each of its Representatives and each Recipient
Individual User to connect to the Provider Host Systems.

Section 3.04.Access to Facilities.  

(a)Subject to Section 2.05(a), Aptevo shall, and shall cause its Subsidiaries
to, allow Emergent and its Representatives reasonable access to the facilities
of Aptevo necessary (including if more efficient) for Emergent to provide the
Services in accordance with this Agreement.  Such access shall be conditioned on
compliance with applicable Laws, the terms of this Agreement, and Aptevo’s
reasonable policies generally applicable to its service providers or visitors of
which the Provider has knowledge based on written copies of such policies
previously provided to the Provider by the Recipient.

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(b)Notwithstanding the other rights of access of the Parties under this
Agreement, each Party shall, and shall cause its Subsidiaries to, afford the
other Party, its Subsidiaries and Representatives, following not less than ten
(10) business days’ prior written notice from the other Party, reasonable access
during normal business hours to the facilities, information, systems,
infrastructure, and personnel of the relevant Providers as reasonably necessary
for the other Party to verify the adequacy of internal controls over information
technology, reporting of financial data and related processes employed in
connection with the Services, including in connection with verifying compliance
with Section 404 of the Sarbanes-Oxley Act of 2002; provided, however, that such
access shall not unreasonably interfere with any of the business or operations
of such Party or its Subsidiaries.  

(c)Except as otherwise permitted by the other Party in writing, each Party shall
permit only its authorized Representatives, contractors, invitees or licensees
to access the other Party’s facilities, and shall permit such access only to the
extent necessary to perform obligations under this Agreement.

Section 3.05.Cooperation.  It is understood that it will require the significant
efforts of both Parties to implement this Agreement and to ensure performance of
this Agreement by the Parties at the agreed-upon levels in accordance with all
of the terms and conditions of this Agreement.  The Parties will cooperate,
acting in good faith and using commercially reasonable efforts, to permit the
Provider to provide the relevant Services and to effect a smooth and orderly
transition of the Services provided under this Agreement from the Provider to
the Recipient; provided, however, that this Section 3.05 shall not require
either Party to incur any out-of-pocket costs or expenses exceeding one thousand
dollars ($1,000) during any one (1) month period.

Section 3.06.License Grants.  Subject to the terms and conditions of this
Agreement, Aptevo hereby grants to Emergent a non-exclusive, non-sublicenseable
(except to those other members of the Emergent Group or third-party service
providers performing the Services on behalf of Emergent), non-transferable
(except in accordance with Section 9.10), limited license, to use during the
Term the intellectual property that is owned or controlled by Aptevo now or in
the future, solely to the extent necessary or reasonably useful for Emergent to
perform the Services.

Section 3.07.Data Protection.  The Provider shall only process personal data
which it may receive from the Recipient, while carrying out its duties under
this Agreement: (a) in such a manner as is necessary to carry out those duties
and (b) in accordance with the instructions of the Recipient.

ARTICLE IV
COSTS AND DISBURSEMENTS

Section 4.01.Costs and Disbursements.

(a)Except as otherwise provided in this Agreement, Aptevo shall pay, or cause to
be paid, to the Provider of Services the fee for the Services (or category of
Services, as applicable) (each fee constituting the “Service Charge” and,
collectively, “Service Charges”) as listed on Schedule B; provided, that,
Emergent shall give written notice to Aptevo when, in its

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reasonable business judgment, Emergent believes in good faith that it is likely
that Aptevo will request that Services be provided by Emergent during any
contract year after the Effective Time exceeding the number of hours in the
“Annual Services Work Hours Cap” set forth on Schedule C. Emergent shall neither
have any obligation to provide nor have any right to charge for such Services
above such Annual Services Work Hours Cap without the prior written consent of
Aptevo. With respect to each Service or category of Services, the applicable
Schedule shall set forth (i) the Recipient that will be invoiced the Service
Charge for such Service or category of Services and (ii) the Provider that will
be paid such Service Charge. 

(b)In addition, during the Term, the amount of a Service Charge for any Services
(or category of Services, as applicable) may increase: (i) as expressly set
forth on the applicable Schedule, (ii) as mutually agreed to by the Parties in
writing in advance of any such increase, provided that Aptevo may withhold such
agreement in its sole discretion, (iii) to the extent of any increase in the
Provider’s actual and direct costs of providing a Service are increased as a
result of any increase in the rates or charges imposed by any unaffiliated
third-party provider that is providing Services or (iv) to reflect the removal
or replacement of personnel pursuant to Section 2.05(a), prorated with respect
to the portion of Services provided under this Agreement; provided that, with
respect to foregoing clause (iii), the Provider shall provide the Recipient with
reasonably detailed written documentation evidencing the increased fees from the
applicable third-party provider and setting forth the calculation of the
Provider’s increased direct costs of providing the applicable Service.

(c)Notwithstanding Section 3.05, the Recipient shall reimburse the Provider for
reasonable out-of-pocket costs and expenses exceeding $1,000 during any one (1)
month period incurred by the Provider or its Affiliates in connection with
providing the Services (including necessary travel-related expenses) (each such
cost or expense, a “Reimbursement Charge” and, collectively, “Reimbursement
Charges”); provided, however, that any such cost or expense that is materially
inconsistent with the Provider’s historical practice for any Service (including
business travel and related expenses) shall require advance approval of the
Recipient.

(d)The Service Charges and Reimbursement Charges due and payable hereunder shall
be invoiced and paid in the currency expressly applicable to such Service in the
relevant Schedule hereto.  Each month the Provider shall provide to the
Recipient an invoice setting forth the Service Charges and Reimbursement Charges
for the immediately preceding month, and the Recipient shall pay the amount of
each monthly invoice by wire transfer (or such other method of payment as may be
agreed between the Parties) to the Provider within forty-five (45) days of the
receipt of each such invoice.  Each invoice provided by the Provider to the
Recipient shall also include reasonably detailed documentation to support the
calculation of such Service Charges and Reimbursement Charges. In the absence of
a timely notice of a billing dispute in accordance with the provisions of
Article VIII of the SDA, if the Recipient fails to pay such amount by the due
date, the Recipient shall be obligated to pay to the Provider, in addition to
the amount due, interest at an annual default interest rate of twelve percent
(12%), or the maximum legal rate, whichever is lower (the “Interest Payment”),
accruing from the date the payment was due through the date of actual
payment.  In the event of any billing dispute, the Recipient shall promptly pay
any undisputed amount.

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(e)Subject to the confidentiality provisions set forth in Section 9.03, Emergent
shall, and shall cause its Affiliates to, provide, upon ten (10) business days’
prior written notice from Aptevo, any information within Emergent’s or the
Provider’s possession or control that Aptevo reasonably requests in connection
with any Services being provided to Aptevo by an unaffiliated third-party
provider, including any applicable invoices, agreements documenting the
arrangements between such third-party provider and the Provider and other
supporting documentation. 

(f)If any amount to be paid under this Agreement is originally stated or
expressed in a currency other than United States Dollars, then, for the purpose
of determining the amount to be so paid, such amount shall be converted into
United States Dollars at the exchange rate between those two currencies most
recently quoted in The Wall Street Journal in New York as of the business day
immediately prior to (or, if no such quote exists on such business day, on the
closest business day prior to) the day on which the Party is required to make
such payment.

Section 4.02.Tax Matters.

(a)Without limiting any provisions of this Agreement, the Recipient shall be
responsible for (i) all excise, sales, use, transfer, stamp, documentary,
filing, recordation and other similar Taxes, (ii) any value added, goods and
services or similar recoverable indirect Taxes (“VAT”) and (iii) any related
interest and penalties (collectively, “Transfer Taxes”), in each case imposed or
assessed as a result of the provision of Services by the Provider.  In
particular, but without prejudice to the generality of the foregoing, all
amounts payable pursuant to this Agreement are exclusive of amounts in respect
of VAT.  Where any taxable supply for VAT purposes is made pursuant to this
Agreement by the Provider to the Recipient, the Recipient shall either (i) on
receipt of a valid VAT invoice from the Provider, pay to the Provider such
additional amounts in respect of VAT as are chargeable on the supply of the
services at the same time as payment is due for the supply of the services; or
(ii) where required by legislation to do so, account directly to the relevant
Governmental Authority for any such VAT amounts.  The Party required to account
for Transfer Tax shall provide to the other Party evidence of the remittance of
the amount of such Transfer Tax to the relevant Governmental Authority,
including, without limitation, copies of any Tax returns remitting such
amount.  The Provider agrees that it shall take commercially reasonable actions
to cooperate with the Recipient in obtaining any refund, return, rebate, or the
like of any Transfer Tax, including by filing any necessary exemption or other
similar forms, certificates, or other similar documents.  The Recipient shall
promptly reimburse the Provider for any costs incurred by the Provider or its
Affiliates in connection with the Recipient obtaining a refund or overpayment of
refund, return, rebate, or the like of any Transfer Tax.  For the avoidance of
doubt, any applicable gross receipts-based or net income-based Taxes shall be
borne by the Provider.

(b)The Recipient shall be entitled to deduct and withhold Taxes required by any
Governmental Authority to be withheld on payments made pursuant to this
Agreement.  To the extent any amounts are so withheld, except for amounts
withheld (i) attributable to the failure of the Provider to comply with the next
sentence of this Section 4.02(b), (ii) attributable to backup withholding under
Section 3406 of the Code or any similar provision of state, local, or non-U.S.
law, or (iii) pursuant to FATCA, the Recipient shall (A) pay, in addition to the
amount otherwise due to the Provider under this Agreement, such additional
amount as is necessary to

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ensure that the net amount actually received by the Provider will equal the full
amount the Provider would have received had no such deduction or withholding
been required, (B) pay such deducted and withheld amount to the proper
Governmental Authority, and (C) promptly provide to the Provider evidence of
such payment to such Governmental Authority.  The Provider shall, prior to the
date of any payment to be made pursuant to this Agreement, at the request of the
Recipient, use commercially reasonable efforts to provide the Recipient any
certificate or other documentary evidence that (1) is required by a Governmental
Authority and/or (2) the Provider is entitled by a Governmental Authority to
provide in order to reduce the amount of any Taxes that may be deducted or
withheld from such payment and the Recipient agrees to accept and act in
reliance on any such duly and properly executed certificate or other applicable
documentary evidence. 

(c)If the Provider (i) receives any refund (whether by payment, offset, credit
or otherwise) or (ii) utilizes any overpayment, of Taxes that are borne by
Recipient pursuant to this Agreement, then the Provider shall promptly pay, or
cause to be paid, to the Recipient the amount of such refund or overpayment
(including, for the avoidance of doubt, any interest or other amounts received
with respect to such refund or overpayment), net of any additional Taxes the
Provider incurs or will incur as a result of the receipt of such refund or such
overpayment.

ARTICLE V
STANDARD FOR SERVICE

Section 5.01.Standard for Service.  

(a)The Provider agrees (i) to perform the Services with at least substantially
the same nature, quality, standard of care and service levels at which the same
or similar services were performed by or on behalf of the Provider prior to the
Effective Time or, if not so previously provided, then substantially similar to
that which are applicable to similar services provided to the Provider’s
Affiliates or other business components; and (ii) upon receipt of written notice
from the Recipient identifying any outage, interruption or other failure of any
Service, to respond to such outage, interruption or other failure of such
Service in a manner that is at least substantially similar to the manner in
which such Provider or its Affiliates responded to any outage, interruption or
other failure of the same or similar services prior to the Effective Time.  The
Parties acknowledge that an outage, interruption or other failure of any Service
shall not be deemed to be a breach of the provisions of this Section 5.01 so
long as the applicable Provider complies with the foregoing clause (ii). In
addition, the Provider will perform all Services in a professional and
workmanlike manner.

(b)Nothing in this Agreement shall require the Provider to perform or cause to
be performed any Service to the extent the manner of such performance would
constitute a violation of applicable Law or any existing contract or agreement
with a third-party.  If the Provider is or becomes aware of any such potential
violation on the part of the Provider, the Provider shall promptly send a
written notice to the Recipient of any such potential violation.  The Parties
each agree to cooperate and use commercially reasonable efforts to obtain any
necessary third-party consents required under any existing contract or agreement
with a third-party to allow the Provider to perform or cause to be performed any
Service in accordance with the standards set forth in this Section 5.01. Any
costs and expenses incurred by either Party in

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connection with obtaining any such third-party consent that is required to allow
the Provider to perform or cause to be performed any Service shall be solely the
responsibility of the Recipient.  If, with respect to a Service, the Parties,
despite the use of such commercially reasonable efforts, are unable to obtain a
required third-party consent or the performance of such Service by the Provider
would continue to constitute a violation of applicable Laws, the Provider shall
use commercially reasonable efforts in good faith to provide such Services in a
manner as closely as possible to the standards described in this Section 5.01. 

Section 5.02.Disclaimer of Warranties.  EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, THE PARTIES ACKNOWLEDGE AND AGREE THAT THE SERVICES ARE PROVIDED
AS-IS, THAT EACH RECIPIENT ASSUMES ALL RISKS AND LIABILITY ARISING FROM OR
RELATING TO ITS USE OF AND RELIANCE UPON THE SERVICES AND EACH PARTY, TO THE
MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, MAKES NO OTHER REPRESENTATION OR
WARRANTY WITH RESPECT THERETO.  EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY EXPRESSLY
DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES REGARDING THE SERVICES, WHETHER
EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR
OTHERWISE, INCLUDING ANY REPRESENTATION OR WARRANTY IN REGARD TO QUALITY,
PERFORMANCE, NONINFRINGEMENT, COMMERCIAL UTILITY, MERCHANTABILITY OR FITNESS OF
ANY SERVICE FOR A PARTICULAR PURPOSE.

Section 5.03.Compliance with Laws and Regulations.  Each Party shall be
responsible for its own compliance and its subcontractors’ compliance with any
and all Laws applicable to its performance under this Agreement.  No Party will
knowingly take any action in violation of any such applicable Law that results
in liability being imposed on the other Party.

ARTICLE VI
REPRESENTATIONS; LIMITED LIABILITY AND INDEMNIFICATION

Section 6.01.Representations. The Provider represents, warrants and covenants
with respect to itself and the Recipient represents, warrants and covenants with
respect to itself:

(a)this Agreement is a legal and valid obligation binding upon such Person and
enforceable in accordance with its terms, and that such Person will undertake
and perform all of its obligations as set forth in this Agreement; and

(b)all of such Person’s personnel are, and shall at all times during the Term
remain, sufficient in number and qualification to perform or receive, as
applicable, the Services.

Section 6.02.Consequential and Other Damages.  Notwithstanding anything to the
contrary contained in the SDA or this Agreement, the Provider shall not be
liable to the Recipient or any of its Affiliates or Representatives, whether in
contract, tort (including negligence and strict liability) or otherwise, at law
or equity, for any special, indirect, incidental, punitive or consequential
damages whatsoever (including lost profits or damages calculated on multiples of
earnings approaches), which in any way arise out of, relate to or are a
consequence

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of, the performance or nonperformance by the Provider (including any Affiliates
and Representatives of the Provider and any unaffiliated third-party providers,
in each case, providing the applicable Services) under this Agreement or the
provision of, or failure to provide, any Services under this Agreement,
including with respect to loss of profits, business interruptions or claims of
customers.   

Section 6.03.Limitation of Liability.  The Liabilities of each PARTY and its
Affiliates and Representatives, collectively, under this Agreement for any act
or failure to act in connection herewith (including the performance or breach of
this Agreement), or from the sale, delivery, provision or use of any Services
provided under or contemplated by this Agreement, whether in contract, tort
(including negligence and strict liability) or otherwise, at law or equity,
shall not exceed the total aggregate Amounts PAID OR PAYABLE to EMERGENT by
APTEVO pursuant to this Agreement during the one (1) year preceding the event
that gave rise to such LIABILITY.

Section 6.04.Obligation To Reperform; Liabilities.  In the event of any breach
of this Agreement by any Provider with respect to the provision of any Services
(with respect to which the Provider can reasonably be expected to re-perform in
a commercially reasonable manner), the Provider shall (a) promptly correct in
all material respects such error, defect or breach or re-perform in all material
respects such Services at the request of the Recipient and at the sole cost and
expense of the Provider and (b) subject to the limitations set forth in Section
6.02 and Section 6.03, reimburse the Recipient and its Affiliates and
Representatives for Liabilities attributable to such breach by the
Provider.  The remedy set forth in this Section 6.04 shall be the sole and
exclusive remedy of the Recipient for any such breach of this Agreement.  Any
request for re-performance in accordance with this Section 6.04 by the Recipient
must be in writing and specify in reasonable detail the particular error, defect
or breach, and such request must be made no more than two (2) months from the
date such error, defect or breach becomes apparent or should have reasonably
become apparent to the Recipient.

Section 6.05.Release and Recipient Indemnity.  Subject to Section 6.02, each
Recipient hereby releases the applicable Provider and its Affiliates and
Representatives (each, a “Provider Indemnified Party”), and each Recipient
hereby agrees to indemnify, defend and hold harmless each such Provider
Indemnified Party from and against (a) all Liabilities arising from, relating to
or in connection with, in each case to the extent suffered, sustained or
incurred by the Provider Indemnified Party pursuant to a Third-Party Claim, the
provision of any Services by Provider hereunder or the use of any Services by
any Recipient or any of its Affiliates, Representatives or other Persons, except
in each case to the extent that such Liabilities arise out of, relate to or are
a consequence of the applicable Provider Indemnified Party’s bad faith, gross
negligence or willful misconduct, and (b) all Liabilities arising from, relating
to or in connection with a breach by any Recipient of its obligations under this
Agreement.

Section 6.06.Provider Indemnity.  Subject to Section 6.02, each Provider hereby
agrees to indemnify, defend and hold harmless the applicable Recipient and its
Affiliates and Representatives (each a “Recipient Indemnified Party”), from and
against all Liabilities arising from, relating to or in connection with, in each
case to the extent suffered, sustained or incurred

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by the Recipient Indemnified Party pursuant to a Third-Party Claim, the
provision of any Services by Provider hereunder or the use of any Services by
any Recipient or any of its Affiliates, Representatives or other Persons, in
each case to the extent that such Liabilities arise out of, relate to or are a
consequence of the applicable Provider’s bad faith, gross negligence or willful
misconduct. 

Section 6.07.Indemnification Procedures.  The provisions of Sections 4.4 and 4.5
of the SDA shall govern claims for indemnification under this Agreement.

Section 6.08.Liability for Payment Obligations.  Nothing in this ARTICLE VI
shall be deemed to eliminate or limit, in any respect, Aptevo’s express
obligation in this Agreement to pay Service Charges and Reimbursement Charges
for Services rendered in accordance with this Agreement.

Section 6.09.Exclusion of Other Remedies.  Notwithstanding anything to the
contrary contained in the SDA, the provisions of Section 6.04, Section 6.05 and
Section 6.06 of this Agreement shall, to the maximum extent permitted by
applicable Law, be the sole and exclusive remedies of the Provider Indemnified
Parties and the Recipient Indemnified Parties, as applicable, for any claim,
loss, damage, expense or liability, whether arising from statute, principle of
common or civil law, principles of strict liability, tort, contract or otherwise
under this Agreement.

Section 6.10.Confirmation.  Neither Party excludes responsibility for any
liability which cannot be excluded pursuant to applicable Law.

ARTICLE VII
TERM AND TERMINATION

Section 7.01.Term and Termination.  

(a)This Agreement shall commence immediately upon the Effective Time and shall
terminate upon the earliest to occur of: (i) the second anniversary of the
Effective Time, (ii) the last date on which either Party is obligated to provide
any Service to the other Party in accordance with the terms of this Agreement
and the Schedules or (iii) the mutual written agreement of the Parties to
terminate this Agreement in its entirety (the “Term”).

(b)Without prejudice to a Recipient’s rights with respect to a Force Majeure, a
Recipient may from time to time terminate this Agreement with respect to any
individual Service or a portion thereof:

(i)for any reason or no reason, upon providing the requisite prior written
notice to the Provider pursuant to the Schedules and in any event, at least
thirty (30) days’ prior notice; provided, however, that the Recipient shall pay
to the Provider the necessary and reasonable documented out-of-pocket costs
incurred prior to Provider’s receipt of such notice or in connection with the
wind down of such Service other than any employee severance and relocation
expenses; or

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(ii)if the Provider of such Service has failed to perform any of its material
obligations under this Agreement with respect to such Service, and such failure
continues to exist forty-five (45) days after receipt by the Provider of written
notice of such failure from the Recipient. 

(c)Without prejudice to a Provider’s rights with respect to a Force Majeure,
Provider may terminate this Agreement with respect to the entirety of any
individual Service but not a portion thereof if the Recipient of such Service
(i) has failed to pay Service Charges or Reimbursement Charges or any other
amounts due under this Agreement with respect to such Service, and such failure
shall continue to exist twenty (20) business days after receipt by the Recipient
of written notice of such failure to pay from the Provider, or (ii) has failed
to perform any of its other material obligations under this Agreement with
respect to such Service, and such failure shall continue to exist forty-five
(45) days after receipt by the Recipient of written notice of such failure from
the Provider.

In the event that any Service is terminated other than at the end of a month,
the Service Charge associated with such Service shall be pro-rated
appropriately.  The Parties acknowledge that there may be interdependencies
among the Services being provided under this Agreement that may not be
identified on the applicable Schedules and agree that, if the Provider’s ability
to provide a particular Service in accordance with this Agreement is materially
and adversely affected by the termination of another Service in accordance with
Section 7.01(b)(i), then the Parties shall negotiate in good faith to amend the
Schedule relating to such affected continuing Service, which amendment shall be
in writing and consistent with the terms of, and the pricing methodology used
for, comparable services.

Section 7.02.Effect of Termination.  Upon termination of any Service pursuant to
this Agreement, the Provider of the terminated Service will have no further
obligation to provide the terminated Service, and the relevant Recipient will
have no obligation to pay any future Service Charges relating to any such
Service; provided, however, that the Recipient shall remain obligated to the
relevant Provider for the (a) Service Charges and Reimbursement Charges owed and
payable in respect of Services provided prior to the effective date of
termination and (b) any applicable charges described in Section 7.01(b)(i),
which charges shall be payable only in the event that the Recipient terminates
any Service pursuant to Section 7.01(b)(i).  In connection with the termination
of any Service, the provisions of this Agreement not relating solely to such
terminated Service shall survive any such termination, and in connection with a
termination of this Agreement, ARTICLE I, Section 4.02, Section 5.02, ARTICLE VI
(including liability in respect of any indemnifiable Liabilities under this
Agreement arising or occurring on or prior to the date of termination), ARTICLE
VII, ARTICLE VIII, all confidentiality obligations under this Agreement and
liability for all due and unpaid Service Charges and Reimbursement Charges and
any applicable charges payable pursuant to Section 7.01(b)(i), shall continue to
survive indefinitely.

Section 7.03.Force Majeure.  

(a)Neither Party (nor any Person acting on its behalf) shall have any liability
or responsibility for failure to fulfill any obligation (other than a payment
obligation) under this Agreement so long as and to the extent to which the
fulfillment of such obligation is prevented,

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frustrated, hindered or delayed as a consequence of a Force Majeure; provided,
however, that (i) such Party (or such Person) shall have exercised commercially
reasonable efforts to minimize the effect of such Force Majeure on its
obligations; and (ii) the nature, quality and standard of care that the Provider
shall provide in delivering a Service after a Force Majeure shall be
substantially the same as the nature, quality and standard of care that the
Provider provides to its Affiliates with respect to such Service.  In the event
of an occurrence of a Force Majeure, the Party whose performance is affected
thereby shall give notice of suspension as soon as reasonably practicable to the
other stating the date and extent of such suspension and the cause thereof, and
such Party shall resume the performance of such obligations as soon as
reasonably practicable after the removal of such cause. 

(b)During the period of a Force Majeure affecting the Provider, the Recipient
shall be entitled to permanently terminate such Service(s) (and, in any event,
shall be relieved of the obligation to pay Service Charges and Reimbursement
Charges for such Services(s) throughout the duration of such Force Majeure) if a
Force Majeure shall continue to exist for more than twenty (20) consecutive
days, it being understood that the Recipient shall not be required to provide
any advance notice of such termination to the Provider or pay any charges in
connection therewith.

ARTICLE VIII
DISPUTE RESOLUTION; SERVICES MANAGERS

Notwithstanding anything to the contrary in the SDA, any Dispute (as defined
below) shall be resolved exclusively in accordance with the following provisions
of this ARTICLE VIII:

Section 8.01.Disputes.  Any controversy or claim arising out of or relating to
this Agreement, or the breach hereof (a “Dispute”), shall be resolved: (a)
first, by negotiation between the applicable Emergent Local Service Manager and
the Aptevo Local Service Manager, then (if there remains a Dispute) negotiation
between the Emergent Services Manager and the Aptevo Services Manager (each as
defined below), and then (if there remains a Dispute) negotiation by and among
the members of the Transition Committee, with the possibility of mediation as
provided in Section 8.02; and (b) then, if negotiation and mediation fail, by
binding arbitration as provided in Section 8.03. Each Party agrees on behalf of
itself and each of its Subsidiaries that the procedures set forth in this
ARTICLE VIII shall be the exclusive means for resolution of any Dispute. The
initiation of mediation or arbitration hereunder will toll the applicable
statute of limitations for the duration of any such proceedings.

Section 8.02.Negotiation and Mediation.  If either Party serves written notice
of a Dispute upon the other party (a “Dispute Notice”), the Parties will first
attempt to resolve such Dispute by direct discussions and negotiation (including
as set forth in Section 8.01). If the parties to the Dispute agree, the Parties
may also attempt to resolve the Dispute by a mediation administered by the
International Institute for Conflict Prevention & Resolution (“CPR”) under its
Mediation Procedure.

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Section 8.03.Arbitration.  

(a)If a Dispute is not resolved within forty-five (45) days (or later if
mutually agreed by the Parties) after the service of a Dispute Notice, either
Party shall have the right to commence arbitration. The arbitration shall be
administered by the CPR pursuant to its Arbitration Rules and Procedures.
References herein to any arbitration rules or procedures mean such rules or
procedures as amended from time to time, including any successor rules or
procedures, and references herein to the CPR include any successor thereto. The
arbitration shall be before three (3) arbitrators. Each Party shall designate
one arbitrator in accordance with the “screened” appointment procedure provided
in Rule 5.4 of the CPR Rules. The two Party-appointed arbitrators will select
the third, who will serve as the panel’s chair or president. This arbitration
provision, and the arbitration itself, shall be governed by the Laws of the
State of Delaware and the Federal Arbitration Act, 9 U.S.C. §§ 1-16.

(b)Consistent with the expedited nature of arbitration, each Party will, upon
the written request of the other Party, promptly provide the other with copies
of documents on which the producing Party may rely in support of or in
opposition to any claim or defense. At the request of a Party, the arbitrators
shall have the discretion to order examination by deposition of witnesses to the
extent the arbitrator deems such additional discovery relevant and appropriate.
Depositions shall be limited to a maximum of five (5) per Party and shall be
held within forty-five (45) days of the grant of a request. Additional
depositions may be scheduled only with the permission of the arbitrators, and
for good cause shown. Each deposition shall be limited to a maximum of one (1)
day’s duration. All objections are reserved for the arbitration hearing except
for objections based on privilege and proprietary or confidential information.
The Parties shall not utilize any other discovery mechanisms, including
international processes and U.S. federal statutes, to obtain additional evidence
for use in the arbitration. Any Dispute regarding discovery, or the relevance or
scope thereof, shall be determined by the arbitrators, which determination shall
be conclusive. All discovery shall be completed within sixty (60) days following
the appointment of the arbitrators. All costs and fees relating to the
retrieval, review and production of electronic discovery shall be paid by the
Party requesting such discovery.

(c)The panel of arbitrators shall have no power to award non-monetary or
equitable relief of any sort. The arbitrators shall have no power or authority,
under the CPR Rules for Non-Administered Arbitration or otherwise, to relieve
the Parties from their agreement hereunder to arbitrate or otherwise to amend or
disregard any provision of this Agreement. The award of the arbitrators shall be
final, binding and the sole and exclusive remedy to the Parties. Either Party
may seek to confirm and enforce any final award entered in arbitration, in any
court of competent jurisdiction.

(d)Absent fraud or manifest error, any arbitral award issued hereunder shall be
final and binding on the Parties.

(e)Except as may be required by Law or any applicable rules and regulations of
any stock exchange, neither a Party nor an arbitrator may disclose the
existence, content, or results of any arbitration hereunder without the prior
written consent of both Parties.

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Section 8.04.Interim Relief.  At any time during the resolution of a Dispute
between the Parties, either Party has the right to apply to any court of
competent jurisdiction for interim relief, including pre-arbitration attachments
or injunctions, necessary to preserve the Parties’ rights or to maintain the
Parties’ relative positions until such time as the arbitration award is rendered
or the Dispute is otherwise resolved. 

Section 8.05.Remedies.  The arbitrators shall have no authority or power to
limit, expand, alter, amend, modify, revoke or suspend any condition or
provision of this Agreement nor any right or power to award punitive, exemplary
or treble damages (or other multiple damages that are not actual damages).

Section 8.06.Expenses.  Each Party shall bear its own costs, expenses and
attorneys’ fees in pursuit and resolution of any Dispute; provided, however,
that, in the event of any arbitration with respect to any Dispute pursuant to
Section 8.03 in which the arbitrator issues an arbitral award in an amount that
is within ten percent (10%) of the amount of the most recent bona fide written
settlement offer submitted by a Party and rejected by a Party in connection with
such Dispute, then the Party that rejected such settlement offer shall bear both
Parties’ costs, expenses and attorneys’ fees incurred in connection with such
arbitration (including the fees and expenses of any arbitrator).

Section 8.07.Continuation of Services and Commitments.  Unless otherwise agreed
in writing, the Parties shall, and shall cause their respective Subsidiaries to,
continue to honor all commitments under this Agreement to the extent required by
this Agreement during the course of dispute resolution pursuant to the
provisions of this ARTICLE VIII with respect to all matters related to such
Dispute.

Section 8.08.Transition Services Managers.  

(a)Emergent hereby appoints and designates the individual holding the Emergent
position set forth on Exhibit A to act as its initial services manager (the
“Emergent Services Manager”), who will be directly responsible for coordinating
and managing the delivery of the Services and have authority to act on
Emergent’s behalf with respect to matters relating to the provision of Services
under this Agreement.  The Emergent Services Manager will be a member of the
Transition Committee established pursuant to Section 2.14 of the SDA.  The
Emergent Services Manager will work with the personnel of the Emergent Group to
periodically address issues and matters raised by Aptevo relating to the
provision of Services under this Agreement.  Notwithstanding the requirements of
Section 9.06, all communications from Aptevo to Emergent pursuant to this
Agreement regarding routine matters involving a Service shall be made through
the individual specified as the local service manager (the “Emergent Local
Service Manager”) with respect to such Service on the applicable Schedule or
such other individual as may be specified by the Emergent Services Manager in
writing and delivered to Aptevo by email or facsimile transmission with receipt
confirmed.  Emergent shall notify Aptevo of the appointment of a different
Emergent Services Manager or Emergent Local Service Manager(s), if necessary, in
accordance with Section 9.06.

(b)Aptevo hereby appoints and designates the individual holding the Aptevo
position set forth on Exhibit A to act as its initial services manager (the
“Aptevo Services

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Manager”), who will be directly responsible for coordinating and managing the
receipt of the Services and have authority to act on Aptevo’s behalf with
respect to matters relating to this Agreement.  The Aptevo Services Manager will
be a member of the Transition Committee established pursuant to Section 2.14 of
the SDA.  The Aptevo Services Manager will work with the personnel of the Aptevo
Group to periodically address issues and matters raised by Emergent relating to
this Agreement.  Notwithstanding the requirements of Section 9.06, except for
in-person communications made during the course of performing and receiving the
Services, all communications from Emergent to Aptevo pursuant to this Agreement
regarding routine matters involving a Service shall be made through the
individual specified as the local service manager (the “Aptevo Local Service
Manager”) with respect to such Service on the applicable Schedule or as
specified by the Aptevo Services Manager in writing and delivered to Emergent by
email or facsimile transmission with receipt confirmed.  Aptevo shall notify
Emergent of the appointment of a different Aptevo Services Manager or Aptevo
Local Service Manager(s), if necessary, in accordance with Section 9.06. 

ARTICLE IX
GENERAL PROVISIONS

Section 9.01.Provisions from the SDA.  The Parties agree and acknowledge that
this Agreement is an Ancillary Agreement and, therefore, that certain provisions
of the SDA apply hereto (including any capitalized terms used but not defined
herein), provided, however, that if there is any conflict between the terms of
this Agreement and the terms of the SDA, the terms of this Agreement apply with
respect to the subject matter hereof.  Sections 11.1 (Counterparts; Entire
Agreement; Corporate Power), 11.2 (Governing Law), 11.6 (Severability), 11.10
(Headings), 11.11 (Survival of Covenants), 11.12 (Waivers of Default), 11.14
(Amendments) and 11.16 (No Set Off) of the SDA are incorporated herein by
reference, mutatis mutandis.  

Section 9.02.No Agency.  Nothing in this Agreement shall be deemed in any way or
for any purpose to constitute any Party an agent of an unaffiliated party in the
conduct of such other party’s business.  A Provider of any Service under this
Agreement shall act as an independent contractor and not as the agent of the
Recipient in performing such Service, maintaining control over its employees,
its subcontractors and their employees and complying with all withholding of
income at source requirements, whether federal, national, state, local or
foreign.

Section 9.03.Treatment of Confidential Information.  Each Party shall, and shall
cause its Affiliates and its and their Representatives to, treat all
Confidential Information of the other Party in accordance with Section 7.7 of
the SDA.  For the avoidance of doubt, all proprietary or Confidential
Information of (a) Aptevo or any Recipient that is received or accessed by any
Provider or its personnel, agents or Representatives in the course of performing
obligations under this Agreement constitutes Aptevo’s Confidential Information
and (b) Emergent or any Provider that is received or accessed by any Recipient
or its personnel, agents or Representatives in the course of performing
obligations under this Agreement constitutes Emergent’s Confidential
Information.

Section 9.04.Further Assurances.  Each Party covenants and agrees that, without
any additional consideration, it shall execute and deliver any further legal
instruments and perform any acts that are or may become necessary to effectuate
this Agreement.

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Section 9.05.Dispute Resolution.  Any Dispute shall be resolved in accordance
with the procedures set forth in Article VIII of the SDA, which shall be the
sole and exclusive procedures for the resolution of any such Dispute unless
otherwise specified herein or in Article VIII of the SDA. 

Section 9.06.Notices.  Except with respect to routine communications by the
Emergent Services Manager, Aptevo Services Manager, Emergent Local Services
Manager and Aptevo Local Services Manager under Section 8.08, all notices,
requests, claims, demands and other communications under this Agreement shall be
in writing and shall be given or made (and shall be deemed to have been duly
given or made upon receipt) by delivery in person, by overnight courier service,
by facsimile or electronic transmission with receipt confirmed (followed by
delivery of an original via overnight courier service) or by registered or
certified mail (postage prepaid, return receipt requested) to the respective
Parties at the following addresses (or at such other address for a Party as
shall be specified in a notice given in accordance with this Section 9.06):

(i)if to Emergent:

General Counsel
400 Professional Drive
Suite 400
Gaithersburg, MD  20879

 

(ii)if to Aptevo:

General Counsel
2401 4th Avenue
Suite 1050
Seattle, WA  98121

Section 9.07.Entire Agreement.  This Agreement, together with the documents
referenced herein (including the SDA, the Quality Agreement and any other
Ancillary Agreements) contain the entire agreement between the Parties with
respect to the subject matter hereof, supersede all previous agreements,
negotiations, discussions, writings, understandings, commitments and
conversations with respect to such subject matter and there are no agreements or
understandings between the Parties other than those set forth or referred to
herein or therein.

Section 9.08.No Third-Party Beneficiaries.  Except as provided in ARTICLE VI
with respect to Provider Indemnified Parties and Recipient Indemnified Parties,
(a) the provisions of this Agreement are solely for the benefit of the Parties
and are not intended to confer upon any Person except the Parties any rights or
remedies hereunder, and (b) there are no third-party beneficiaries of this
Agreement and this Agreement shall not provide any third person with any remedy,
claim, liability, reimbursement, claim of action or other right in excess of
those existing without reference to this Agreement.

Section 9.09.Interpretation.  Interpretation of this Agreement shall be governed
by the following rules of construction: (a) words in the singular shall be held
to include the plural and

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vice versa and words of one gender shall be held to include the other genders as
the context requires; (b) the terms “hereof,” “herein,” and “herewith” and words
of similar import shall, unless otherwise stated, be construed to refer to this
Agreement as a whole (including all of the Schedules and Exhibits hereto and
thereto) and not to any particular provision of this Agreement; (c) Article,
Section, Exhibit and Schedule references are to the Articles, Sections, Exhibits
and Schedules to this Agreement unless otherwise specified; (d) references to
“$” shall mean U.S. dollars; (e) the word “including” and words of similar
import when used in this Agreement shall mean “including, without limitation”;
(f) the word “or” shall not be exclusive; (g) unless expressly stated to the
contrary in this Agreement, all references to “the date hereof,” “the date of
this Agreement,” “hereby” and “hereupon” and words of similar import shall all
be references to July 29, 2016, regardless of any amendment or restatement
hereof; (h) the verb “will” means “shall”; (i) except where the context
otherwise requires, references to Subsidiaries of Aptevo refers to Persons that
will be Subsidiaries of Aptevo upon consummation of the Distribution; (j)
Emergent and Aptevo have each participated in the negotiation and drafting of
this Agreement and if an ambiguity or question of interpretation should arise,
this Agreement shall be construed as if drafted jointly by the Parties and no
presumption or burden of proof shall arise favoring or burdening either Party by
virtue of the authorship of any of the provisions in this Agreement or any
interim drafts of this Agreement; (k) a reference to any Person includes such
Person’s successors and permitted assigns; (l) any reference to “days” means
calendar days unless business days are expressly specified; and (m) when
calculating the period of time before which, within which or following which any
act is to be done or step taken pursuant to this Agreement, the date that is the
reference date in calculating such period shall be excluded, and if the last day
of such period is not a business day, the period shall end on the next
succeeding business day. 

Section 9.10.Assignability.  This Agreement shall not be assigned by operation
of Law or otherwise without the prior written consent of Emergent and Aptevo,
except that each Party may:

(a)assign all of its rights and obligations under this Agreement to any of its
Subsidiaries (so long as it remains a Subsidiary); provided, that in connection
with any such assignment, the assigning Party provides a guarantee to the
non-assigning Party (in a form reasonably agreed upon) for any liability or
obligation of the assignee under this Agreement; and

(b)in connection with the sale, transfer or other divestiture to an acquiror
(that, in the case of an assignment by a Recipient, is not a competitor of the
Provider) of all or substantially all of an entire product line, division or
other business unit to which this Agreement relates, assign to the acquiror of
such product line, division or other business unit its rights and obligations as
a Recipient (in the case of an assignment by a Recipient) or a Provider (in the
case of an assignment by a Provider) under this Agreement to the extent related
to such product line, division or other business unit; provided that (i) in
connection with any such assignment, the assigning Party provides a guarantee to
the non-assigning Party (in a form reasonably agreed upon) for any liability or
obligation of the assignee under this Agreement, (ii) any and all costs and
expenses incurred by either Party in connection with such assignment (including
in connection with clause (iii) of this proviso) shall be borne solely by the
assigning Party, and (iii) the Parties shall in good faith negotiate any
amendments to this Agreement, including the Schedules hereto, that may be
necessary or appropriate in order to assign such Services.

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Section 9.11.Non-Recourse.  No past, present or future director, officer,
employee, incorporator, member, partner, shareholder, Affiliate, agent, attorney
or representative of either Emergent or Aptevo or their Affiliates shall have
any liability for any Liabilities of Emergent or Aptevo, respectively, under
this Agreement or for any claims based on, in respect of, or by reason of, the
transactions contemplated by this Agreement. 

Section 9.12.Expenses.  Except as expressly set forth in this Agreement, all
fees, costs and expenses incurred in connection with the preparation, execution,
delivery and implementation of this Agreement will be borne by the Party
incurring such fees, costs or expenses.

[The remainder of this page is intentionally left blank.]

 

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on the
date first written above by their respective duly authorized officers.

 

EMERGENT BIOSOLUTIONS INC.

By:

/s/ Daniel Abdun-Nabi

 

Name:  Daniel Abdun-Nabi

 

Title: President and Chief Executive Officer

 

APTEVO THERAPEUTICS INC.

By:

/s/ Marvin White

 

Name:  Marvin White

 

Title: President and Chief Executive Officer

 

 

 

[Signature Page to Transition Services Agreement]

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Exhibit A

Services Managers

 

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Exhibit B

Quality Agreement