Exhibit 10.37.1

 

PharmAthene, Inc.

Confidential Materials Omitted and Filed Separately with the

Securities and Exchange Commission

Confidential Portions denoted by [***]

 

PRIVATE BETWEEN THE PARTIES

 

AMENDED AND RESTATED LICENCE AGREEMENT

 

between

 

THE SECRETARY OF STATE FOR DEFENCE

 

as represented by

 

THE DEFENCE SCIENCE AND TECHNOLOGY LABORATORY (Dstl)

 

and

 

PHARMATHENE UK LTD.

 

in respect of

 

RECOMBINANT [***] VACCINE

 

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PRIVATE BETWEEN THE PARTIES

 

THIS AMENDED AND RESTATED AGREEMENT is made the 5th day of  February, 2009

 

BETWEEN

 

THE SECRETARY OF STATE FOR DEFENCE acting through the Defence Science and
Technology Laboratory [***] the “Licensor”) of the one part

 

AND

 

PHARMATHENE UK LTD. Having an address at Johnson Mathey Building, PO Box 88,
Haverton Hill Road, Billingham, Cleveland TS23 1XN (hereinafter referred to as
the “Licensee”) of the second part hereinafter referred to collectively as the
“Parties” or in the singular as a “Party”.

 

WHEREAS

 

A.                             Licensor and Avecia Limited entered into a
Manufacturing License Agreement as of May     , 2006, (the “License Agreement”);

 

B.                               With the consent of Licensor, the License
Agreement was assigned by Avecia Limited to Avecia Biologics Limited;

 

C.                               The License Agreement was amended by a Letter
Agreement dated March 20, 2008 by and between Licensor and Avecia Biologics
Limited (the “Amended Agreement”);

 

D.                              With the consent of Licensor, Avecia Biologics
Limited assigned the Amended Agreement to Licensee;

 

E.                                Licensor and Licensee desire to amend and
restate the Amended Agreement.

 

NOW IT IS HEREBY AGREED BETWEEN THE PARTIES AS FOLLOWS:-

 

1.              DEFINITIONS AND INTERPRETATION

 

1.1.                                     For the purposes of this Agreement,
unless the context clearly or necessarily indicates otherwise, the following
words and phrases shall have the meanings set forth below:

 

1.1.1.                                           “Agreement” shall mean this
Amended and Restated Agreement.

 

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1.1.2.                                           “Commencement Date” shall mean
the day and year first above written.

 

1.1.3.                                           “The Intellectual Property”
shall mean the Patents and know-how, technical information and materials
(including but not limited to cell lines) owned by the Licensor necessary or
useful to develop, manufacture, have manufactured, import use, keep, sell and
offer to sell the [***] Vaccine.

 

1.1.4.                                           ““Licensed Product” shall mean
a [***] Vaccine including but not limited to a [***] Vaccine Dose, the
manufacture, use, sale, keeping, importing or exporting of which would, in the
absence of the license granted under this Agreement, constitute an infringement
of the Patents (for the avoidance of doubt, where the definition of Patents
includes pending patent applications, this includes doing anything in respect of
a claim in a pending patent application that had a patent been granted on such a
claim would constitute infringement of that claim) or that uses other
Intellectual Property.

 

1.1.5.                                           “Net Sales Price” shall mean
the actual sale price of Licensed Product invoiced by the Licensee or, where
applicable, a Partner of the Licensee less any separate charges identified for
packaging, transportation, insurance and sales taxes and (where applicable) any
royalties paid to any Third Party in respect of the Licensed Product in
question. If the Licensee sells or disposes of any Licensed Product on otherwise
than an arms length transaction basis at the open full market price (eg to
another company in the Licensee’s group  or under an off-set or barter
agreement), the open market price shall be taken as the actual sales price.

 

1.1.6.                                           “Patents” The patents and
patent applications set out in Schedule 1 and any equivalents thereof, and any
divisionals, continuations, continuations-in-part, re-filings or re-issues of
any of the foregoing, and any other patent applications or patents that would be
infringed by manufacture, use or sale of a [***] Vaccine or component thereof.

 

1.1.7.                                           “Partner” shall mean any Third
Party organisation which the Licensee elects to involve in the performance of a
Supply Contract.

 

1.1.8.                                           “PIL” shall mean [***], [***]
UK.

 

1.1.9.                                           [***] [***]

 

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1.1.10.                                     [***]

 

1.1.11.                                     “Process Validation Contract” means
the contract dated May 10, 2006 between Licensor and Avecia (Licensor reference
[***]).

 

1.1.12.                                     “Process Validation Foreground IP”
means intellectual property developed under the Process Validation Contract that
(i) relates solely to Vaccine [***] or (ii) relates to the process for the
manufacture of the Vaccine [***].

 

1.1.13.                                     “Supply Contract” shall mean a
contract or contracts for the production and/or supply of Licensed Product.

 

1.1.14.                                     “Third Party” shall mean any person
other than the Government of the United Kingdom.

 

1.1.15.                                     “Vaccine” means a [***] vaccine
[***].

 

1.2.                            The singular shall include the plural and vice
versa, and the masculine shall include the feminine or the neuter gender and
vice versa.

 

1.3.                  Unless the context otherwise indicates, references to
Articles and Articles and Schedule, are to articles and Articles and the
Schedule of this Agreement.

 

1.4.                  Headings to Articles in this Agreement are included for
ease of reference only and shall not have any effect on the construction or the
interpretation of this Agreement.

 

1.5.                  References in this Agreement to any statute or statutory
provision shall include any statute or statutory provision which amends,
extends, consolidates or replaces the same and shall include any orders,
regulations, instruments or other subordinate legislation made under the
relevant statute.

 

2.                                     GRANT OF RIGHTS BY THE LICENSOR

 

2.1.                  In consideration for the payments to be made by the
Licensee to the Licensor under the provisions of Article 3 below, the Licensor,
warranting that he has the right to do so, hereby grants and the Licensee hereby
accepts a nonexclusive worldwide licence to use the Intellectual Property to
develop, make, or have made, use, keep, sell, offer to sell, import and export
Licensed Products.

 

2.2.                  Without prejudice to the provisions of Articles 2.3, 2.4
and 10.3 below, the Licensor undertakes that it shall not whilst this licence
remains in effect grant a licence to any third party for under the Intellectual
Property to make, have made, use, keep, export, sell or offer to sell Licensed
Products..

 

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2.3.                  For the avoidance of any doubt, the Licensor and any other
Department or Agency of the UK Government shall retain the right at any time to
use, or authorise others to use the Licensed Products for any UK Government
purpose or otherwise to the extent customary pursuant to standard UK Ministry of
Defence contracting procedures, and to dispose of products made in consequence
of such use but no longer required; and nothing in this Agreement shall be
construed as in any way limiting or derogating from such retained rights, nor
from any rights of the Crown arising under any other agreement or contract or
provision of law.

 

2.4.                  The restrictions imposed by Article 2.2 above shall not
prevent or restrict the use of any UK Government patent by or on behalf of the
US Government where such use is under the “Agreement between the Government of
the United Kingdom of Great Britain and Northern Ireland and the Government of
the United States of America to facilitate the interchange of patents and
technical information for defence purposes” done in London on 19th January 1953.
Furthermore the restrictions imposed by Article 2.2 above shall not be deemed to
prevent or hinder the UK Government from authorising any foreign Government to
use and have used the Intellectual Property where such use is in furtherance of
any formal international co-operative arrangement.

 

2.5.                  Save as permitted under Article 2.6 below, the licence
granted under this Agreement is personal to the Licensee and as such shall not
be assigned, sub-licensed, mortgaged or in any way dealt with by the Licensee
without the prior written consent of the Licensor, which consent shall not be
unreasonably withheld, provided that the Licensee may assign the licence and
this Agreement without consent in connection with a genuine business
reorganisation or to any corporation, association or other business entity which
directly or indirectly controls, is controlled by or is under common control
with the Licensee. For the avoidance of doubt, consent shall be deemed to be
reasonably withheld where the Chief Executive of Dstl receives written notice
from an appropriate authority at the Ministry of Defence or other UK Government
Department that assignment to such person would damage the essential public or
national interest. Any assignment, sub-licensing or mortgaging of this Agreement
by the Licensee, otherwise than as permitted by this Article 2.5, without the
prior written consent of the Licensor shall immediately invalidate this
Agreement and the licence granted hereunder.

 

2.6.                  Notwithstanding the provisions of Article 2.5 above, the
Licensee shall be entitled to employ Partners to assist the Licensee in
exercising the

 

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Licensee’s rights hereunder with respect to Licensed Products subject to the
provisions of Article 3 below.

 

2.7.                  Save as expressly stated under this Article 2 the Licensee
is not authorised hereunder to grant to any Third Party any sub-licence under
the Patents or to pass to such Third Party any of the Intellectual Property.

 

2.8.                  Should the Licensor wish to abandon a patent, patent
application or equivalent forming part of the Intellectual Property, it shall
offer it to the Licensee, which shall be entitled to maintain in force the said
patent, patent application or equivalent in the name of Licensor at the
Licensee’s expense but otherwise without charge and, the Licensee shall be
responsible for all further expenditure thereon. The Licensee shall retain a
royalty free non-exclusive license thereto pursuant to Section 2.1 that is
subject to Licensor’s obligations under Section 2.2.

 

2.9.                  At the request of Licensee, Licensor shall reasonably
consider expanding the license granted under Section 2.1 by amending the
definition [***] at no additional cost to Licensee.

 

3.                                     LICENCE PAYMENTS

 

3.1                       In consideration for the grant of rights by the
Licensor in Article 2 above, the Licensee shall pay to the Licensor a royalty on
each and every [***] Vaccine Dose, equal to the greater of:

 

3.1.1                              [***] of the Net Sales Price of Licensed
Product;

 

3.1.2                              [***] of the Net Sales Price of any Licensed
Product where such sale is to a Third Party and when Process Validation
Foreground IP has been used in the process for production of such Licensed
Product; or

 

3.1.3                              [***].

 

Notwithstanding the foregoing, no royalties shall be payable in respect of any
samples of Licensed Product which are provided by Licensee for clinical, product
development, marketing development or bona fide study purposes.

 

3.2                      Payment of the royalty as set out in Clause 3.1
discharges all obligations of the Licensee to pay any levies in respect of the
support given by the Licensor and the US and Canadian Governments pursuant to
the Process Validation Contract and, for the avoidance of doubt,

 

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upon execution of this Agreement by the Licensor and the Licensee, clause 6.10
of the Process Validation Contract shall no longer apply.

 

3.3                     If the UK Ministry of Defence, US Department of Defense
or the Department of Defense of the Government of Canada claims that Licensed
Products should be supplied free of royalties or at a reduced royalty rate under
an existing international agreement or arrangement mentioned in Artciles 2.3 or
2.4 and seeks a waiver of any part of the royalty attributable to Patents set
out in Schedule 1, the Licensee shall inform the Licensor. If it is agreed by
the Licensor that such supply should be free of patent royalties or at an
appropriately reduced royalty, then the Licensor shall inform the Licensee of
the royalty (if any) that the Licensor will apply to the supply of Licensed
Products concerned. In such a case the notified royalty (if any) shall be
substituted for the royalty mentioned Article 3.1 in respect of the relevant
supply of Licensed Products.

 

3.4                     The royalty in respect of a Licensed Product shall
become payable by the Licensee under this Agreement when the cost of the
Licensed Product is invoiced by Licensee. Where the cost of a Licensed Product
is payable in two or more installments, the invoice for each installment will be
considered separately for the payment of royalties. If no invoice is issued,
royalty will become due on delivery of the Licensed Product concerned.

 

3.5                     The Licensee shall reimburse Licensor for the cost and
expense incurred by Licensor after the date of this Agreement for prosecuting
and maintaining Patents licensed to Licensee under this Agreement.

 

3.6                     The payments due under Articles 3.1 and 3.5 of this
Agreement will fall due half-yearly on 30 June and 31 December and will be
payable in accordance with the instructions contained in Articles 3.7 and 3.8
below.

 

3.7                     The Licensor has appointed PIL as its agent to act on
its behalf for the administration of royalties and other moneys due under this
Agreement.

 

3.8                     Within (60) days of the end of each half-year period as
mentioned in Article 3.5 hereof, the Licensee shall send to PIL (or as otherwise
advised) a true and complete statement in writing, including where appropriate a
Zero return, of the number of Licensed Products manufactured and sold by or for
Licensee during the relevant period, the Net Sales Price derived from sales of
such Licensed Products, and the royalty calculated to be payable in respect
thereof in accordance with the provisions of Article 3.1.

 

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3.9                     All payments due to the Licensor under this Agreement
shall be made by the end of the month following the month of the date of receipt
of an invoice from PIL and in accordance with the instructions issued with the
relevant invoice. All royalty statements, correspondence and payments to PIL
under the provisions of this Article 3 shall quote the PIL reference [***].

 

3.10               All payments due to PIL shall be paid in pounds Sterling
plus, if applicable, VAT at the UK rate prevailing at the time of payment. Where
a payment due is in a currency other than pounds Sterling, the rate of exchange
to be applied shall be the rate of exchange applied by the Bank of England on
the date of the relevant invoice for Licensed Product(s) supplied by the
Licensee.

 

3.11               Without prejudice to the provisions of Article 10.2, if the
Licensee fails to make any payment to the Licensor within the time specified in
this Agreement, then the Licensee shall be liable to pay interest on the
outstanding payment calculated at [***] per annum with effect from the date on
which the payment originally fell due, where [***].

 

3.12               Subject to the provisions of Article 3.13 below, the Licensee
shall keep at its usual place of business proper records and books of account
showing the quantities and Net Sales Price of all Licensed Products supplied by
the Licensee and its Partners under this Agreement and such records and books
shall be kept separate from any records and books not relating solely to the
Licensed Products. Such records and books of account shall contain such true
entries (complete in every particular) as may be necessary or proper for
enabling the amount of the payments due to the Licensor under this Agreement to
be ascertained. The Licensor or PIL by giving no less than ten (10) working days
notice shall be entitled to inspect such records and books. The Licensee shall,
and shall ensure that its Partners shall, make the appropriate records and books
of account available to inspection at all times during office hours by the
Licensor or PIL or their duly authorised agent or representative who shall be
entitled to take copies of or extracts from the same. In addition to the
foregoing, the Licensee shall also provide the Licensor or PIL or their duly
authorised agent or representative with any other information which may be
necessary or appropriate with a view to determining or verifying the royalties
due under this Agreement. In the event that such inspection or audit should
reveal an underreporting in the royalties payable under this Agreement, the
Licensee shall make up any shortfall within thirty (30) days of written
notification and, in the event that the said shortfall is more than [***], shall
reimburse the Licensor or PIL in respect of any professional charges incurred
for such audit or inspection.

 

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3.13               The books of account referred to in Article 3.12 above shall
be kept for a minimum of six years after any relevant transaction and thereafter
in accordance with applicable commercial law.

 

3.14               In accordance with the provisions of Article 11 (Consequences
of Termination), the provisions of this Article 3 shall continue to apply
notwithstanding termination or expiry of this Agreement until all royalties
properly owed by the Licensee to the Licensor in accordance with this Article 3
have been paid to the Licensor.

 

3.15               In the event that any of the patents, patent applications or
equivalents listed in the Schedule expire or are abandoned or revoked, or are
reduced in scope such that operation within the scope of a patent claim to
manufacture or sell Licensed Products is no longer necessary, but it remains
necessary for the Licensee to use some or all of the other Intellectual Property
in order to fulfill an extant order for the Licensed Products, then the Licensee
shall have the right to request a meeting of the parties at which the parties
shall negotiate in good faith with a view to agreeing upon an appropriate
reduction to the royalty payable under this Agreement.

 

3.16               The Licensor may himself at any time, terminate the
arrangements with PIL by notice in writing to the Licensor and in which case
“the Licensor” will be substituted for PIL in this Artcile 3.

 

4.              OWNERSHIP, AND PROTECTION, OF INTELLECTUAL PROPERTY

 

4.1.                            Both of the Parties acknowledge that nothing
contained in this Agreement shall affect the ownership of any intellectual
property existing at the Commencement Date and which is owned by either of the
Parties.

 

4.2.                            Both the Parties acknowledge that nothing
contained in this Agreement shall affect the arrangements for the protection of
information which are contained in the Contracts.

 

4.3.                            The Licensee shall promptly and fully notify the
Licensor in writing of:

 

4.3.1.                                          any actual, threatened or
suspected infringement by any Third Party of the patents listed in Schedule 1
or, if granted, any patent that might be granted pursuant to a patent
application listed in Schedule 1

 

4.3.2.                                          any proceedings commenced or
threatened against the Licensee in which it is alleged that any patent listed in
Schedule 1 is invalid and/or its use would infringe Third Party rights, or that
use of any of the know how or

 

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information, or material contained in any patent application listed in Schedule
1 would infringe Third Party rights;

 

4.3.3.                                          that comes to the notice of the
Licensee during the term of this Agreement.

 

4.4.                            In the event that the Licensor decides (in the
circumstances referred to in Article 4.3.1 above) to institute any proceedings
or (in the circumstances referred to in Article 4.3.2 above) to defend any
proceedings instituted against the Licensee with respect to the validity of a
patent listed in Schedule 1, the Licensee shall render to the Licensor at the
Licensor’s expense such reasonable assistance in connection with such
proceedings as the Licensor may request.  For the avoidance of doubt, Licensee
rather than Licensor shall have the sole right to defend any proceeding against
Licensee as to infringement of Third Party rights.

 

4.5.                            Nothing herein shall oblige the Licensor to
institute proceedings in the circumstances referred to in Artcile 4.3.1 above,
or to defend any proceedings in the circumstances referred to in Artcile 4.3.2
above with respect to the validity of a patent listed in Schedule 1.  In the
event that the Licensor decides not to institute proceedings in the
circumstances referred to in Article 4.3.1 or defend any proceedings in the
circumstances of Article 4.3.2 above with respect to the validity of a patent
listed in Schedule 1, the Licensor will allow the Licensee, if necessary in the
Licensor’s name, to institute or defend such proceedings at its own expense, in
which event:

 

4.5.1.                                          the Licensee shall have sole
control of the proceedings and shall take or conduct such action in its
discretion in any way that it deems necessary or appropriate; and

 

4.5.2.                                          the Licensor shall render to the
Licensee at the Licensee’s expense such reasonable assistance (including
performing such acts and executing such documents) in connection with such
proceedings, as the Licensee may request; and

 

4.5.3.                                          the Licensee shall be
responsible for all costs and expenses arising therefrom and shall be solely
responsible for any damages payable to the third party and for satisfying any
award or judgment in favour of any third party and shall be solely entitled to
the full benefit of all remedies awarded including but not limited to all
damages and other sums which may be paid or awarded as a result thereof, except
that in the event that Licensee recovers damages in such an action, then
Licensee shall pay Licensor the lower of (i) [***].

 

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5.              WARRANTY AND LIABILITY

 

5.1.                             Nothing contained in this Agreement or in any
licence granted hereunder shall be construed as or deemed to be:-

 

5.1.1.                                          a representation or warranty
that use of any the Patents will not infringe any intellectual property rights
owned by a Third Party anywhere in the world; or

 

5.1.2.                                          an indemnity against costs,
damages, royalties, liabilities, expenses or other payments arising out of any
proceedings based on infringement brought against the Licensee or customers,
agents or distributors of the Licensee; and any such representation, warranty or
indemnity is hereby expressly excluded.

 

5.2.                             The Licensee shall at all times indemnify and
keep indemnified the Licensor against all costs, claims, damages or expenses
incurred by the Licensor for which the Licensor may become liable with respect
to any product liability claim relating to any products supplied or put into use
by the Licensee pursuant to this Agreement. The Licensee shall maintain
sufficient product liability insurance coverage to cover its commitments under
this Agreement.

 

5.3.                             The Licensor shall not be liable for any loss
or damage howsoever caused which results from the Licensee’s use of the Patents
in exercise of the Licensee’s rights under this Agreement and the Licensor gives
no warranty that anything contained in the Patents, any know-how or information
is suitable for any purpose.

 

6.              TAXATION

 

6.1.                             If any stamp taxes, registration taxes,
turnover taxes, or other taxes, duties or governmental charges are levied on
this Agreement by reason of its execution or performance, it shall be the
responsibility of the Licensee to pay all such taxes and charges when due.

 

6.2.                             The Licensee agrees to release and indemnify
the Licensor from and against any liability of whatever nature arising out of
the Licensee’s failure duly and timely to pay and discharge any of the
above-mentioned taxes.

 

7.              DISCLOSURES OF INFORMATION

 

7.1.                             Each Party will keep all know-how and other
information belonging to the other Party confidential and will not disclose it
to any Third Party. 

 

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Except either Party shall have the right to disclose information and know-how of
the other Party where such Party engages a Third Party, including an agent (such
as PIL) to undertake anything in connection with this Agreement, or in
connection with a proposed or permitted assignment of or sublicense under this
Agreement, provided that the disclosing Party shall procure that the Third Party
is bound likewise to confidentiality obligations and any breaches of the
confidentiality obligations by such Third Party shall be treated as a breach of
this Agreement by the Party. In addition, the Licensee shall have the right to
disclose information, know-how and materials of Licensor in connection with
obtaining regulatory approval of a Licensed Product.  This restriction does not
apply to disclosures made in accordance with Article 7.2 below, or to:

 

7.1.1.                                          Any information which is or
comes into the public domain otherwise than through breach of this Agreement;

 

7.1.2.                                          Any information already known,
at the time of its disclosure, by the recipient;

 

7.1.3.                                          Any information received from a
Third Party which has the right to disclose the same;

 

7.1.4.                                          Any information that it is
necessary to impart to customers of the recombinant protective antigen Licensed
Products to ensure its safe and effective use.

 

7.1.5.                                          Any information required to be
disclosed in accordance with an applicable law, rule or regulation or pursuant
to a court order or legal proceeding, provided that the disclosing Party takes
reasonable available steps to protect the confidentiality thereof.

 

7.2.                             The Licensor permits the Licensee to disclose
any know-how and information owned or controlled by the Licensor and in the
possession of the Licensee as necessary or useful to secure from any government
or government agency contracts for the further development, manufacture and
supply of Licensed Products.

 

8.              EXPORT CONTROL

 

8.1.                             The Licensee shall be responsible for complying
with the applicable Export of Goods (Control) Order.

 

8.2.                             This Agreement does not grant authority for the
Licensee to export from the United Kingdom, any Licensed Product, or any
information relating thereto without any necessary licence under any applicable
Export of Goods (Control) Order. Any necessary export licence must

 

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be made to the Export Licensing Unit of the Department of Trade and Industry.

 

9.              COMING INTO EFFECT AND DURATION

 

9.1.                             This Agreement shall come into effect on the
Commencement Date and, unless terminated in accordance with the provisions of
Article 10, shall remain in effect indefinitely.

 

10.       TERMINATION

 

10.1.                       The Licensor shall have the right to terminate this
Agreement at any time forthwith by notice in writing to the Licensee on the
happening of any of the following events:

 

10.1.1.                                    if the Licensee is in breach of any
of its obligations under this Agreement, and fails to remedy such breach or
fails to take steps to substantially remedy the breach within thirty (30) days
of a written notice issued to it by the Licensor to do so; or

 

10.1.2.                                    if the Licensee shall have a Receiver
or Liquidator appointed to the whole or any part of its assets or if an Order
shall be made or any resolution passed for winding up the Licensee unless such
Order or resolution is part of a scheme for amalgamation or reconstruction of
the Licensee; or

 

10.1.3.                                    if the Licensee assigns,
sub-licences, mortgages, or in any other way deals with the licence granted
under this Agreement without the prior written consent of the Licensor; or

 

10.1.4.                                    if a person, whether alone or in
conjunction with any Connected Person (as defined in section 839 of the Taxes
Act 1998) acquires control of the Licensee and the Chief Executive of Dstl
receives notice from an appropriate authority at the Ministry of Defence or
other UK Government Department that such an acquisition would damage the
essential public or national interest, where control of the Licensee means the
power of a person to secure either by means of the holding of share or
possession of voting power in or in relation to the Licensee or by virtue of any
powers conferred by articles of association or other document regulating the
Licensee that

 

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its affairs are conducted in accordance with the wishes of that person; or

 

10.1.5.                                    in any other event expressly
identified in this Agreement as giving the Licensor a right to terminate.

 

10.2.                      The Licensee shall have the right to terminate this
Agreement at any time on giving three (3) months prior written notice to the
Licensor.

 

10.3.                      In the event that Licensee fails to diligently pursue
development of a Licensed Product, Licensor shall have the right to notify
Licensee in writing of such failure and the specifics thereof and that Licensor
intends to terminate the exclusivity of Article 2.2 of this Agreement.  Such
exclusivity shall terminate thirty (30) days after receipt of such written
notice unless prior to the expiration of such thirty (30) days period, Licensee
notifies Licensor in writing that such issue is being submitted for resolution
pursuant to Article 16.1 of this Agreement, in which case, such exclusivity
period shall terminate only in the case that it is finally determined in an
arbitration pursuant to Article 16.1 that Licensee has failed to diligently
pursue development of a Licensed Product.

 

11.       CONSEQUENCES OF TERMINATION

 

11.1.                      Upon the termination of this Agreement under the
provisions of Article 10 above, all rights and licences granted in favour of the
Licensee hereunder shall cease, except and to the extent expressly provided
otherwise under the terms of this Agreement.

 

11.2.                      Immediately upon the termination of this Agreement
all licence payments accrued to date under Article 3.1 above shall become
payable and all other obligations shall become due. In the event of termination
of this Agreement under the provisions of Article 10 the Licensee shall have the
right from the date of termination to dispose of all stocks of Licensed Products
its possession and to fulfill any outstanding orders for the Licensed Products,
subject in each case to the payment of royalties as payable under Article 3.1
hereof.

 

11.3.                      The expiry or termination of this Agreement shall be
without prejudice to the provisions of Article 5 (Warranty and Liability) and
this Article 11 (Consequences of Termination), to any other express obligations
in his Agreement of a continuing nature, and to any rights of either Party which
ay have accrued up to the date of termination.

 

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12.         ASSIGNMENT BY THE LICENSOR

 

12.1                         Licensor may assign this Agreement or any of the
Intellectual Property to any Third Party without the consent of the Licensee. 
Any such assignment made will preserve the rights of the Licensee set out in
this Agreement.

 

13.         VALIDITY OF THE AGREEMENT

 

13.1.                      In the event that any provisions of this Agreement
shall for any reason be declared or rendered invalid, illegal or unenforceable
in any respect, such provisions shall, to the extent of such invalidity,
illegality or unenforceability, be deemed severable and shall not affect the
validity, legality or enforceability of the remainder of this Agreement, which
shall continue in full force and effect, save that if the nature of the
invalidity, illegality or unenforceability is such that it destroys the business
efficacy of this Agreement, the Parties shall confer to determine whether the
Agreement shall be terminated or whether such severed provisions shall be
replaced with enforceable provisions to the satisfaction of both of the Parties.

 

14.       MISCELLANEOUS PROVISIONS

 

14.1.                      Each Party shall at any time on the request of the
other do and execute all such acts, deeds, documents and things as may
reasonably be required by the other to perfect and complete the grant of rights
and licences conferred by this Agreement on the other, or to record any change
in the status of such rights, including, in particular, entry into forms of
licence or other instruments confirmatory of such rights for registration with
appropriate authorities in any country.

 

14.2.                      No relaxation, forbearance, delay or indulgence by
either party in enforcing any of the terms and conditions of this Agreement or
the granting of time by either Party to the other shall prejudice, affect or
restrict the rights and powers of that Party under this Agreement nor shall any
waiver by either Party of any breach of this Agreement operate as a waiver of or
in relation to any subsequent or any continuing breach of this Agreement.

 

14.3.                      No variation of this Agreement shall be effective
unless it is in writing signed by a duly authorised officer of each Party.

 

14.4.                      Nothing in this Agreement shall be deemed to
constitute a partnership between the Parties nor shall either Party be taken to
have any authority to bind or commit the other or be taken to have authority to
act as the agent of the other or in any other capacity other than as expressly
authorised in this Agreement.

 

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14.5.                      Any notice or communication authorised or required to
be given hereunder or for the purpose hereof shall be deemed to be duly given if
left or sent by post or if sent by cable, facsimile or telex so addressed if
confirmed by post in like manner to:- the Licensor at:

 

[***]

[***]

[***]

[***]

[***]

[***]

 

[***]

[***]

 

the Licensee at:

 

PharmAthene UK LTD.

Attn:  The President

Johnson Mathey Building

PO Box 88

Haverton Hill Road

Billingham, Cleveland TS23 1XN

 

and a copy to:

 

PharmAthene, Inc.

Attn:  [***]

One Park Place, Suite 450

Annapolis, MD 21401

 

Any notice so given by post shall be deemed to be served at the expiration of
seven (7) days after it has been posted and in proving such service it shaII be
sufficient to prove that the envelope containing the notice was properly
addressed and posted.

 

14.6.                       A person who is not a party to this Agreement shall
have no right under the Contracts (Rights of Third Parties) Act 1999 to enforce
any term of this Agreement. This Article does not affect any right or remedy of
any person which exists or is available otherwise than pursuant to that Act.

 

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15.       LAW AND JURISDICTION

 

15.1.                      This Agreement shall be considered as a contract made
in England subject to English Law.

 

15.2.                      Subject to Article 15 and without prejudice to the
dispute resolution process set out in that Article, each Party hereby
irrevocably submits and agrees to the exclusive jurisdiction of the Courts of
England to resolve, and the laws of England to govern, any actions, proceedings,
controversy or claim of whatever nature arising out of or relating to this
Agreement or breach thereof.

 

15.3.                      Other jurisdictions may apply solely for the purpose
of giving effect to this Article and for the enforcement of any judgment, order
or award given under English jurisdiction.

 

16.       DISPUTE RESOLUTION

 

16.1.                      Without prejudice to the operation of the dispute
resolution or arbitration provisions, if any, governing disputes, differences or
questions arising out of the Development Contracts and where necessary the
examination of this Agreement pursuant to such dispute resolution or arbitration
provisions:

 

16.1.1.                                    the parties will attempt in good
faith to resolve any dispute or claim arising out of or relating to this
Agreement through negotiations between the respective representatives of the
parties having authority to settle the matter, which attempts may include the
use of any Alternative Dispute Resolution (ADR) procedure on which the parties
may agree;

 

16.1.2.                                    in the event that the dispute or
claim is not resolved by negotiation, or where the parties have agreed to use an
ADR procedure, by the use of such procedure, the dispute shall be referred to
arbitration;

 

16.1.3.                                    the party initiating the arbitration
shall give a written Notice of Arbitration to the other party, which Notice of
Arbitration shall specifically state:

 

that the dispute is referred to arbitration; and

 

the particulars of this Agreement out of or in relation to which the dispute
arises;

 

16.1.4.                                    unless otherwise agreed in writing by
the parties, the arbitration and this Article 14 shall be governed by the
provisions of the Arbitration Act 1996 or any statutory modification or
re-enactment thereof;

 

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16.1.5.                                    it is agreed between the Parties that
for the purposes of the arbitration, the arbitrator shall have the power to make
provisional awards as provided for in Section 39 of the Arbitration Act 1996;
and

 

16.1.6.                                    for the avoidance of doubt it is
agreed between the Parties that the arbitration process and anything said, done
or produced in or in relation to the arbitration process (including any awards)
shall be confidential as between the Parties, except as may be lawfully required
in judicial proceedings relating to the arbitration or otherwise; and no report
relating to anything said, done or produced in or in relation to the arbitration
process may be made beyond the tribunal, the Parties, their legal
representatives and any person necessary to the conduct of the proceedings,
without the concurrence of all the Parties to the arbitration.

 

17.       COMPLETE AGREEMENT

 

This Agreement consisting of seventeen (17) Articles represents the entire
agreement between the Parties on the subject of the use by the Licensee of the
Patents and other Intellectual Property for the purposes set out herein and
supersedes all prior proposals, oral or written, between the Parties on this
subject.

 

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IN WITNESS WHEREOF the Parties entered into this Agreement in two
(2) counterparts, each of which is equally valid, the day and year first above
written.

 

SIGNED on behalf of THE SECRETARY OF STATE FOR DEFENCE by:

 

[***]

[***]

[***]

[***]

 

in the presence of

 

(witness)

 

SIGNED for and on behalf of PHARMATHENE UK LTD. by:

 

[***]

(President of PharmAthene UK LTD.)

 

in the presence of

 

(witness)

 

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The Schedule 1

 

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· [***]

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[***]

 

 

[***]

 

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*[***]

 

#360826 v2 - DSTL amended and restated

(was 346763 v4)

 

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