Exhibit 10.1

Execution Version

Confidential Material Omitted and filed

separately with the Securities and Exchange Commission.

Asterisks denote such omissions.

ACQUISITION, LICENSING, DEVELOPMENT AND SUPPLY AGREEMENT

THIS ACQUISITION, LICENSING, DEVELOPMENT AND SUPPLY AGREEMENT (this
“Agreement”), is made and entered into as of this 22nd day of June, 2008 (the
“Signing Date”), by and among GTC Biotherapeutics, Inc., a corporation organized
under the laws of the Commonwealth of Massachusetts (“GTC”), ATIII LLC, a
limited liability company organized under the laws of the State of Delaware and
a direct wholly-owned subsidiary of GTC (“ATIII LLC”), and Ovation
Pharmaceuticals, Inc., a corporation organized under the laws of the State of
Illinois (“Ovation”). GTC, ATIII LLC and Ovation may be referred to herein
individually as a “Party” or collectively as the “Parties.”

RECITALS

WHEREAS, GTC is developing the Product (as defined in Article 1) for the
Territory (as defined in Article 1);

WHEREAS, Ovation has substantial knowledge, experience and expertise in
developing, marketing and selling pharmaceutical and biologic products in the
Territory;

WHEREAS, on and subject to the terms and conditions set forth herein, GTC
desires to sell, transfer, assign, convey and exclusively license, as the case
may be, to Ovation, and Ovation desires to acquire and exclusively license, as
the case may be, from GTC, all of GTC’s right, title and interest in and to the
Product in, for and with respect to the Territory;

WHEREAS, GTC enjoys the full right, title and interest in and to the GTC
Intellectual Property Rights, Trademarks, Technical Information and Other
Product Assets (each as defined in Article 1), or valid licenses thereto, as
applicable;

WHEREAS, on and subject to the terms and conditions set forth herein, GTC
desires to sell, transfer, assign and convey to Ovation, and Ovation desires to
acquire from GTC, (i) all right, title and interest of GTC in, under or with
respect to the Product BB-IND’s, the Product BLA’s or other Registrations and
the Orphan Drug Designations (each as defined in Article 1) (with such Product
BB-IND’s, Product BLA’s and other Product Registrations to be formally
transferred to Ovation, at Ovation’s option, at a later date as provided for in
Section 5.2 of this Agreement), (ii) those GTC Intellectual Property Rights and
Trademarks (and, with respect to such Trademarks, the good will appurtenant
thereto) that are listed on Schedule 1 hereto and (iii) the Ovation Herd and
Purchased Material (each as defined in Article 1) (collectively, the “Purchased
Property”).

WHEREAS, on and subject to the terms and conditions set forth herein, GTC
desires to grant to Ovation, and Ovation desires to accept from GTC, an
exclusive license or sublicense, as the case may be (even as to GTC), in and for
the Territory with respect to all GTC Intellectual Property Rights, Trademarks,
Technical Information and the Other Product Assets which are not included in the
Purchased Property (collectively, the “Licensed Property”).

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Confidential Material Omitted and filed

separately with the Securities and Exchange Commission.

Asterisks denote such omissions.

 

WHEREAS, on and subject to the terms and conditions set forth herein, GTC
desires to be the sole supplier to Ovation for the Product in the Territory on
an exclusive basis (even as to GTC), and Ovation desires to accept such
appointment as the sole recipient of GTC’s supply of the Product in the
Territory and to purchase the Product for the Territory solely from GTC,
provided that GTC has the capability to provide the Product in accordance with
the terms of this Agreement, the Supply Agreement and the Quality Agreement;

WHEREAS, GTC entered into that certain Licensing and Supply Agreement, dated as
of October 31, 2005 and as in full force and effect as of the Signing Date (the
“LEO Agreement”), by and among GTC, ATIII LLC and LEO Pharma A/S (“LEO”),
pursuant to which LEO acquired an exclusive license with respect to the Product
in certain countries outside of the Territory; and

WHEREAS, on and subject to the terms and conditions set forth herein, the
Parties intend to cooperate in the development of the Product for the Territory
for the Indications (as defined in Article 1) set forth herein through clinical
trials, regulatory approval, manufacturing, sales and marketing.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and the mutual terms,
conditions and agreements set forth herein and other good and valuable
consideration, the sufficiency of which are hereby acknowledged, the Parties
hereby agree as follows:

ARTICLE 1

DEFINITIONS

As used in this Agreement, the singular includes the plural and the plural
includes the singular, wherever so required by fact or context. Titles used in
the Articles hereof shall be only for convenience and shall not be regarded as
part of this Agreement. “Schedule” shall mean any schedule to this Agreement,
each of them being made a part hereof. As used in this Agreement, and unless
otherwise provided, the following terms shall have the meanings specified below.
Certain other capitalized terms are defined elsewhere in this Agreement. Any
reference to the term “Agreement” contained in this Agreement shall mean and
include this Agreement and all exhibits and schedules thereto.

Any reference in this Agreement to GTC shall also be deemed to include a
reference to ATIII LLC, and a reference to ATIII LLC in this Agreement shall
also be deemed to include a reference to GTC, as the two Parties shall be
treated as one legal entity in all aspects for purposes of this Agreement. GTC
and ATIII LLC agree and acknowledge that for the term of this Agreement, ATIII
LLC shall remain a wholly-owned direct subsidiary of GTC, unless Ovation gives
its prior written consent otherwise.

 

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separately with the Securities and Exchange Commission.

Asterisks denote such omissions.

 

“Additional Indication” means any indication for the Product other than the HD
Indication, the HR Indication or the DIC/Sepsis Indication for which the Parties
develop the Product for use in the Territory or seek Approval for the Product in
the Territory.

“Adverse Event” shall mean any untoward medical occurrence in a patient
administered a medicinal product and which does not necessarily have to have a
causal relationship with this treatment as per the applicable FDA or ICH
guidelines, including, without limitation, any unfavorable and unintended sign
(for example, an abnormal laboratory finding), symptom, or disease temporally
associated with the use of a medicinal product, whether or not considered
related to this medicinal product.

“Adverse Drug Reaction” shall mean noxious and unintended responses to a
medicinal product, as established by national and/or regional regulations,
guidance, and practices.

“Affiliate(s)” shall mean with respect to any Party, any corporation,
partnership or other business entity that controls, is controlled by, or is
under common control with such Party. A corporation, partnership or other entity
shall be regarded as in control of another corporation, partnership or entity if
it owns or directly or indirectly controls at least fifty percent (50%) of the
voting stock or other ownership interest of the other corporation, partnership
or entity or if it possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the corporation,
partnership or other entity or the power to elect or appoint at least fifty
percent (50%) of the members of the governing body of the corporation,
partnership or other entity. The term “control” means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of an entity, whether through the ownership of voting securities,
by contract or otherwise.

“Applicable Laws” means all applicable provisions of constitutions, statutes,
laws, rules, treaties, regulations, orders and decrees of all applicable
governmental authorities in the applicable territory, jurisdiction or region.

“Approval” means receipt of Regulatory Approval of a BLA or other Registration
for the Product from the FDA for a certain Indication.

“BB-IND” means a biologic Investigational New Drug Application filed with the
FDA with respect to the Product for the Territory.

“Best Efforts” shall mean the level of effort which, consistent with the
exercise of prudent scientific and reasonable business judgment, is diligently
applied by the relevant Party to its other therapeutic products at a similar
stage of development and with similar commercial potential.

 

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Asterisks denote such omissions.

 

“BLA” means a Biologic License Application filed with the FDA after completion
of human clinical trials to obtain marketing approval for the Product for the
Territory.

“Business Day” means any day other than Saturday, Sunday or a day which banking
institutions in the State of Illinois or the Commonwealth of Massachusetts are
permitted or obligated by law to close.

“cGMP” means the regulatory requirements for current good manufacturing
practices promulgated by the FDA or other applicable Regulatory Authority.

“Commercial Sale” means any commercial arms-length Sale of Product by Ovation or
any of its Affiliates or sublicensees to a Third Party (other than in any
non-commercial patient use or in connection with clinical trials, compassionate
use or patient assistance programs or sampling or free goods programs) following
Approval and, as applicable, Reimbursement Approval of the Product in the
Territory.

“Cost of Goods” means ************.

“CTD” means the Common Technical Document format (as defined by the ICH and
adopted by the FDA) used to prepare an application to be filed with the FDA or
other applicable Regulatory Authority in the Territory after completion of human
clinical trials to obtain Approval in the Territory.

“DIC/Sepsis Indication” means use of the Product for the treatment and/or
prevention of Disseminated Intravascular Coagulation (“DIC”) associated with
Sepsis.

“Event of Default” means any failure of a Defaulting Party (as defined below) to
cure any breach of or default under any material covenant (including failure to
perform) or agreement contained in this Agreement within a period of
************ after receipt by the Defaulting Party of notice of such breach or
default from the other Party. “Defaulting Party” shall mean the Party to which
such an event relates.

“FDA” means the United States Food and Drug Administration or any successor
agency with responsibilities comparable to the United States Food and Drug
Administration.

“Field” means all therapeutic, diagnostic, prophylactic and monitoring
applications of the Product in humans, including, without limitation, for
(a) the HD Indication, (b) the HR Indication (unless Ovation elects not to
pursue the HR Indication pursuant to Section 6.1(a)(i)), (c) the DIC/Sepsis
Indication (unless Ovation elects not to pursue the DIC/Sepsis Indication
pursuant to Section 6.2(a)(i)) and (d) any Additional Indication (unless Ovation
elects not to exercise its right of first refusal with respect to such
Additional Indication pursuant to Section 6.3).

 

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Asterisks denote such omissions.

 

“GAAP” means United States generally accepted accounting principles,
consistently applied.

“GTC Intellectual Property Rights” means those patents, patent applications and
licensed or sublicensed rights relating to the Territory which are necessary to
achieve the objectives of the Program for the purposes of this Agreement
(including, without limitation, those set forth on Schedule 2 hereto) including,
but not limited to, Patent Rights, divisional applications, continuation
applications, continuation-in-part applications and any patent issued on said
applications and any reissues, extensions or Supplementary Protection
Certificates granted on such patents.

“GTC’s Knowledge” means the actual knowledge of any senior executive of GTC or
ATIII LLC with operational responsibility, and the persons who report directly
to such person, who would reasonably be expected to know of the subject matter
of the applicable representation or warranty in the ordinary course of his/her
employment with GTC and/or ATIII LLC, as applicable.

“HD Indication” means use of the Product as indicated for the prevention of
peri-operative and peri-partum thromboembolic events, as well as the treatment
of such events, in hereditary antithrombin deficient patients.

“Herd Management Agreement” means the Herd Management Agreement to be negotiated
by the Parties prior to the Closing and attached hereto as Exhibit D.

“HR Indication” means use of the Product as indicated in patients with heparin
resistance (meaning an inadequate response to heparin treatment which does not
result in a medically acceptable activated clotting time) to enable surgery
requiring cardiopulmonary bypass or in other clinical situations requiring
management of activated clotting time.

“ICH” means the International Conference on Harmonization of Technical
Requirements for Registration of Pharmaceuticals for Human Use.

“Indication” means the HD Indication, the HR Indication, the DIC/Sepsis
Indication or any Additional Indication.

“Insolvency Event” means: (i) filing a petition in voluntary bankruptcy or
making an assignment for the benefit of creditors or consenting to the
appointment of a receiver of all or any substantial part of the property of a
Party, or filing a petition to take advantage of any debtors act; (ii) the
commencement against a Party of any case, proceeding or other action seeking the
adjudication of such Party as bankrupt by a court of competent jurisdiction or
the appointment by such a court of a trustee or receiver or receivers of such
Party or of all or any substantial part of the property of such Party upon the
application of any creditor in any insolvency or bankruptcy proceeding or other
creditors suit, which case, proceeding or other action is not dismissed within
sixty (60) days after its commencement; or (iii) any event or act analogous to
any of these.

 

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separately with the Securities and Exchange Commission.

Asterisks denote such omissions.

 

“Invention” means any invention conceived and reduced to practice (either
actually or constructively) by GTC, Ovation or GTC and Ovation jointly during
the course of conducting the development activities contemplated by this
Agreement during the Term (whether or not such inventions are patentable) which
is necessary or useful to discover, develop, make, use or sell the Product in
the Field and in the Territory, and all Patent Rights and other intellectual
property rights associated with the Invention

“Launch Commercialization Plan” means the marketing, sales and distribution plan
developed by Ovation’s Sales, Marketing and Medical Affairs Departments for the
initial commercialization of the Product for the HD Indication.

“Licensed Intellectual Property” means that GTC Intellectual Property which is
included in the Licensed Property.

“Licensed Patent Rights” means those Patent Rights which are included in the
Licensed Property.

“Licensed Trademarks” means those Trademarks which are included in the Licensed
Property.

“MedDRA” means the Medical Dictionary for Regulatory Activities Terminology
developed under the auspices of ICH.

“Net Sales” means the gross invoiced Commercial Sales of Ovation, or its
Affiliates or sublicensees within the Territory of the Product billed to Third
Party customers less, to the extent such amounts are included in the gross
invoiced sales price, the actual amount of: (i) freight and insurance costs
incurred in transporting such Product to such customers; (ii) quantity, cash and
other trade discounts actually allowed and taken; (iii) customs duties,
surcharges and taxes and other governmental charges incurred in connection with
the exportation or importation of such Product in final form; (iv) amounts
repaid or credited by reason of returns or rejections (due to Product spoilage,
damage, expiration or useful life or otherwise) or retroactive price reductions;
(v) amounts incurred resulting from governmental mandated rebate or discount
programs; and (vi) Third Party rebates and charge backs actually allowed and
taken, including, without limitation, hospital buying group charge backs,
hospital buying group/group purchasing organization administration fees or
managed care organization rebates.

“Orphan Drug Designations” means the Orphan Drug Designations granted by the FDA
for the Product for the HD Indication and the HR Indication.

“Other Product Assets” means any assets or properties owned, held or licensed by
GTC relating to the Product necessary or appropriate to achieve the objectives
of the Program and the purposes of this Agreement.

 

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Asterisks denote such omissions.

 

“Ovation Herd” means the herd of ************ genotypically qualified transgenic
animals and their descendants used for development and manufacture of the
Product to be developed and maintained by GTC pursuant to the Herd Management
Agreement.

“Patent Rights” means: (a) an unexpired patent the claims of which have not been
held invalid or unenforceable by a court of competent jurisdiction from which no
appeal can be taken or has been taken within the required time period (excluding
a writ of certiorari to the U.S. Supreme Court), including without limitation
any substitution, extension, registration, confirmation, reissue,
re-examination, renewal or any like filing thereof, and including any and all
embodiments of the claims of such unexpired patent; and (b) pending patent
applications, including without limitation any provisional, converted
provisional, continued prosecution application, continuation, divisional,
continuation-in-part or any like filing thereof.

“Pharmacovigilance Procedures Agreement” means the Pharmacovigilance Procedures
Agreement to be negotiated by the Parties prior to the Effective Date and
attached hereto as Exhibit A (which agreement shall include, among other things,
terms and conditions consistent with the pharmacovigilance principles set forth
on Schedule 6 attached hereto).

“Positive Opinion” shall mean an opinion by ************ of the members of the
Advisory Committee with respect to the BLA for the HD Indication that the
Advisory Committee would grant Approval for the HD Indication without material
restrictions or commitments.

“Product” shall mean released and accepted finished product or partially
finished product (as defined in the Supply Agreement) that is a pharmaceutical
preparation for human use incorporating ************ as its active
pharmaceutical ingredient.

“Program” means the marketing, sales, manufacturing, distribution and clinical
development activities related to the Product with respect to the Territory
which are described in this Agreement.

“Purchased Intellectual Property” means the GTC Intellectual Property
(including, without limitation, the Purchased Patent Rights) which is included
in the Purchased Property.

“Purchased Patent Rights” means those Patent Rights which are included in the
Purchased Property.

“Purchased Material” means reasonable quantities of frozen semen and frozen
source material (i.e., milk containing the recombinant form of ATryn) which are
required to manufacture the Product pursuant to the Specifications, the cGMP and
the BLA(s).

“Purchased Trademarks” means those Trademarks which are included in the
Purchased Property.

 

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Asterisks denote such omissions.

 

“Quality Agreement” means the Quality Agreement to be negotiated by the Parties
prior to the Closing and attached hereto as Exhibit B

“Registration” means a marketing authorization application or similar
application (other than a BLA) filed with a Regulatory Authority in the
Territory after completion of human clinical trials to obtain marketing approval
for the Product in the Territory.

“Regulatory Approval” means receipt of a license from a Regulatory Authority to
sell the Product in the Territory following review of a BLA or other
Registration or for revision of a BLA or other Registration for any Product
issued by any Regulatory Authority in the Territory that is required for the
commercial sale of such Product in the Territory. Regulatory Approval shall not
include Reimbursement Approval.

“Regulatory Authority” means any federal or state regulatory authority in the
Territory with responsibility for approving the Product for sale in and
throughout the Territory, including, without limitation, the FDA.

“Reimbursement Approval” means, if applicable, the approval of the Reimbursement
Price for any Product as established by a Reimbursement Authority in the
Territory. Reimbursement Approval shall not include Regulatory Approval.

“Reimbursement Authority” means any regulatory authority in the Territory (if
applicable) with responsibility for setting the Reimbursement Price within the
Territory.

“Reimbursement Price” means the reimbursement price, if applicable, for the
Product established, approved and as modified from time to time by the
Reimbursement Authority in the Territory.

“Responses to Medicinal Product” means that a causal relationship between a
medicinal product and an adverse event is at least a reasonable possibility (as
per ICH guideline E2A). A reaction, in contrast to an event, is characterized by
the fact that a causal relationship between the drug and the occurrence is
suspected. For regulatory reporting purposes, if an event is spontaneously
reported, even if the relationship is unknown or unstated, it meets the
definition of an adverse event.

“Sale(s)” (or “Sell” or “Sold”) means any sale, assignment, transfer, conveyance
or other disposition of the Product by Ovation or any of its Affiliates or
sublicensees to a Third Party (other than for quality assurance or control
purposes). For the sake of clarification, a sale, assignment, transfer,
conveyance or other disposition of the Product by Ovation to any of its
Affiliates shall not be considered a Sale for purposes of this definition.

“Serious Adverse Event/Adverse Drug Reaction” means, in accordance with the
applicable ICH guidelines, a serious adverse event or drug reaction is any
untoward medical occurrence that at any dose:

 

  •  

results in death

 

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  •  

is life threatening (i.e. at risk of death at the time of the event/reaction,
and not an event/reaction which hypothetically might have caused death if it
were more severe)

 

  •  

requires inpatient hospitalization or results in prolongation of existing
hospitalization

 

  •  

results in persistent or significant disability/incapacity

 

  •  

is a congenital anomaly/birth defect

 

  •  

results in other medically important conditions.

“Sharing Percentage” means, as to each Party, the percentage of ************.

“Specifications” means the set of criteria for acceptance/rejection of bulk drug
substance or the Product, as the case may be, when tested by methods described
in the BLA (or other Registration), as approved by the FDA and any additional
specifications as are mutually agreed upon by the Parties, whether in writing or
through the applicable Committee.

“Strategic Partner” means a Third Party engaged in the pharmaceutical or
biologic industry which enters into a license and development agreement (or
similar agreement) with GTC pursuant to which such Third Party and GTC shall
work collaboratively to develop the Product for a Rejected Indication. For
purposes of clarification, Strategic Partner shall not be deemed to include a
Third Party primarily engaged in the financing or lending industry.

“Supply Agreement” means the Supply Agreement to be negotiated by the Parties
prior to the Closing and attached hereto as Exhibit C.

“Technical Information” means all information in the possession of GTC and/or
its Affiliates (to the extent GTC and/or its Affiliates are not prohibited from
licensing such information as a result of contractual obligations to LEO under
the LEO Agreement) regarding preclinical and biological-chemical-pharmaceutical
and clinical data or other scientific information (including specifications,
master batch records, analytical methods including validation protocols and the
drug master file), trade secrets and know-how or uses for the Product including,
but not limited to, marketing know-how or uses for the Product in the possession
of GTC regarding the Product necessary or appropriate for Ovation to fulfill its
obligations under this Agreement.

“Territory” means the United States of America and its territories, possessions
and protectorates (including, but not limited to, the District of Columbia and
the Commonwealth of Puerto Rico).

“Timely Approval” shall mean receipt of Approval for the Product with respect to
the HD Indication ************.

“Third Party” means any person other than a Party or its Affiliates.

 

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Asterisks denote such omissions.

 

“Trademarks” means all of GTC’s trademarks, service marks, trade names, trade
dress and logos used on or in connection with the identification or marketing of
the Product, including, without limitation, those listed on Schedule 2 attached
hereto (as the same may be amended and supplemented from time to time by the
Parties, whether in writing or by decision of the Joint Steering Committee).

“Unit” means one international unit of antithrombin as measured by a thrombin
inhibition assay as defined by the World Health Organization for International
Biological Standards and as described and approved by the EMEA and/or national
authorities.

“Vial” means approximately ************ of the Product, or the applicable number
of USP units as may be required by the FDA for the Territory.

“Waste” shall mean a “hazardous substance” (as defined in the Federal
Comprehensive Response, Compensation and Liability Act, as amended) and “Waste”
(as defined in the Federal Resource Conservation and Recovery Act, as amended),
and includes waste of any kind, including without limitation both routine
process waste and by-product which are disposed of, and the foreign equivalents
of such terms as defined by the relevant regulatory authorities of countries
other than the United States.

ARTICLE 2

ACQUISITION, LICENSE GRANT AND APPOINTMENT

2.1 Purchased Property.

(a) Acquisition. Subject to the terms and conditions hereof, at the Closing, GTC
agrees to sell, assign and transfer to Ovation, and Ovation agrees to purchase
from GTC, the Purchased Property (including, without limitation, the good will
appurtenant to the Purchased Trademarks), in all respects free of any and all
liens, hypothecations, mortgages, charges, security interests, pledges and other
encumbrances and claims of any nature (“Liens”), whether such assets are held by
GTC, ATIII LLC or any of their respective Affiliates.

(b) Grant of License to GTC. During the Term, Ovation agrees to grant to GTC,
and GTC accepts from Ovation, a non-exclusive license, with the right to
sublicense, within the Field and in the Territory with respect to the Purchased
Property, but only for the purpose of carrying out GTC’s rights, duties and
obligations under this Agreement and the Supply Agreement, including with
respect to any Rejected Indication (the “GTC License”).

2.2 Appointment and Grant of License. During the Term (subject to
Section 15.4(b)) and subject to the terms and conditions of this Agreement, GTC
agrees to grant to Ovation, and Ovation accepts from GTC, an exclusive license
(even as to GTC) within the Field and in the Territory, with the exclusive right
to sublicense within the Territory, to and under the Licensed Property and any
Inventions owned by GTC pursuant to Section 10.2, including, without limitation,
the right to import, store, package, label, use, develop, register, sell, offer
for

 

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sale, distribute and have imported the Product in the Field (the “License”).
Ovation shall ensure that any sublicense Ovation enters into under the License
shall adhere to the terms and conditions set forth in this Agreement, and
Ovation shall notify GTC of any such sublicenses Ovation enters into within
************ thereof. In no other respect, other than as set forth in this
Agreement (including, without limitation, under the License and to the extent
such GTC Intellectual Property Rights, Trademarks or Technical Information
constitute Purchased Property transferred to Ovation pursuant to Section 2.1),
may Ovation or its sublicensees practice GTC Intellectual Property Rights,
Trademarks or Technical Information. The Parties agree that the patent license
referenced herein is governed by Section 365(n) of the Bankruptcy Code (11
U.S.C. Section 365(n)).

ARTICLE 3

COMMITTEES

3.1 Establishment of Joint Steering Committee. Promptly after the Effective
Date, the Parties shall establish a committee consisting of personnel from GTC
and Ovation with expertise in the commercialization, manufacturing, clinical
development, medical and regulatory affairs, reimbursement, sales, marketing,
intellectual property and finance of pharmaceutical and biologic products in
general and, in particular, the Product in the Field (the “Joint Steering
Committee”). The Joint Steering Committee shall be comprised of such number of
members as the Parties may determine from time to time, provided that each Party
shall at all times ************. A Party may replace one or more of its
representatives on the Joint Steering Committee at any time. A member of the
Joint Steering Committee may be replaced at any meeting by another person
appointed by the respective Party which appointed such replaced member. Both
Parties shall have equal voting rights on the Joint Steering Committee,
notwithstanding the number of representatives of each Party present at any
meeting of the Joint Steering Committee. The Joint Steering Committee may, in
its discretion, establish subcommittees consisting of individuals from GTC and
Ovation with expertise in particular areas relevant to the Product in any
Indication in the Field; provided, that the composition of such subcommittee
shall comply with all terms of this Section 3.1 relating to the composition of
the Joint Steering Committee. Without limiting the generality of the foregoing,
the Joint Steering Committee shall decide on the following matters with respect
to any Indication in the Field (except as otherwise set forth herein):

(a) development of the Product within the Territory and all potential
investigator sponsored studies;

(b) any and all issues related to the manufacturing and/or quality of the
Product including, but not limited to, changes therein that can affect the
Product registration file, regardless whether such changes are required or
discretionary in nature;

(c) until such time as the BLA(s) are transferred to Ovation pursuant to
Section 5.2 hereof, all issuances of, or changes to be made to, the Product
regulatory files or labeling within the Territory; and

 

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(d) such actions as the Parties may decide are appropriate to further the
development of the Product such as a review of scientific publications and
medical information provided to healthcare professionals both within and outside
of the Territory, respectively.

The Joint Steering Committee shall discuss and review the development of the
Product and all potential investigator-sponsored studies outside the Territory,
to the extent they may negatively impact the commercialization or sales of the
Product within the Territory, as well as all changes to be made to the Product
regulatory files or labeling outside the Territory, to the extent such changes
may negatively impact the commercialization or sales of the Product within the
Territory.

The Joint Steering Committee shall be provided the Launch Commercialization Plan
for purposes of review and shall be consulted regarding overall strategy for
launch and commercialization of the Product; provided, however, that the
approval of the Launch Commercialization Plan and any decisions regarding launch
and commercialization of the Product shall be at the sole discretion of Ovation.

3.2 Operation of the Joint Steering Committee. The Joint Steering Committee
shall meet at such times and places as it may determine but, in any event, it
shall meet within ************ after the Effective Date and at least
************ during each ************ after the Effective Date. If the Joint
Steering Committee does not determine to meet elsewhere, its meetings shall
alternate locations between the offices of GTC and Ovation, with the first
meeting to be held at Ovation. The Joint Steering Committee may meet in person
or by video or telephone conference (as practical), and individual members may
participate in any of the foregoing ways. All costs of participation by each
member in the activities of the Joint Steering Committee shall be borne by the
Party appointing such member. Ovation and GTC shall each designate one (1) of
their respective representatives on the Joint Steering Committee to act as
Co-Chair. The Joint Steering Committee shall appoint a secretary each year that
shall maintain the records of the Joint Steering Committee and shall keep
minutes of the meetings thereof. The secretary shall distribute minutes to all
members of the Joint Steering Committee at the same time not later than two
weeks following said meeting. The secretary shall be provided on a rotating
basis each year by GTC and Ovation (initially to be selected by Ovation).
Moreover, each Party shall appoint one person as the point person for
communications between the Parties regarding on-going progress hereunder.

3.3 Decision-Making. The Joint Steering Committee will strive to reach consensus
on matters over which it has authority. Subject to the foregoing and except as
otherwise provided herein, if, at a meeting of the Joint Steering Committee, the
Joint Steering Committee is unable to reach consensus on a particular issue, the
members of the Joint Steering Committee will make good faith efforts to resolve
such issue over ************. If after ************ such effort is unsuccessful,
the Parties will refer any such dispute to two duly appointed senior officers of
the Parties, one officer from GTC and the other officer from Ovation, for
attempted resolution by good faith negotiations. Either Party may reject a
proposal which the Party can demonstrate by objective financial, economic or
regulatory data is likely to have a negative impact on the Party, it being
understood and agreed that a “negative impact” shall not include

 

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any duty or obligation of a Party under this Agreement, the Quality Agreement,
the Pharmacovigilance Procedures Agreement or the Supply Agreement. If, after a
further period of ************, the appointed officers of the Parties are still
unable to resolve the matter successfully, the Parties will refer the pending
dispute to the respective chief executive officers of the Parties for a final
attempted resolution by good faith negotiations. In the event the chief
executive officers are also unable to resolve the dispute, the matter may be
referred to arbitration as set forth in Article 16 below.

3.4 Limitations of Joint Steering Committee Powers. The Joint Steering Committee
will have only such powers as are specifically delegated to it in this
Agreement, and shall have no power to amend this Agreement or waive a Party’s
rights or obligations under this Agreement.

3.5 Appointment of Joint Steering Committee Members. The appointment of members
of the Joint Steering Committee is a right of each Party and not an obligation
and shall not be a “deliverable” as defined in EITF Issue No. 00-21. Each Party
shall be free to determine not to appoint members to the Joint Steering
Committee. If a Party does not appoint members of the Joint Steering Committee,
it shall not be a breach of this Agreement, nor shall any consideration be
required to be returned and, unless and until such persons are appointed, the
other Party may discharge the role of the Joint Steering Committee.

ARTICLE 4

MANUFACTURE AND SUPPLY OF PRODUCT

4.1 Manufacture of Product, Supply Agreement and Quality Agreement. At or prior
to the Closing, the Parties shall enter into (a) the Supply Agreement to be
attached hereto as Exhibit C to govern the manufacture and supply of the Product
hereunder and to establish operating procedures for forecasting, ordering,
production scheduling and inventory management of the Product and (b) the
Quality Agreement to be attached hereto as Exhibit B. All terms and conditions
of the Supply Agreement and the Quality Agreement shall be in accordance with
the terms, conditions and principles set forth in this Article 4. GTC shall be
the sole and exclusive supplier of Product to Ovation at all times during the
Term, and Ovation shall purchase all of its requirements for the Product during
the Term from GTC (provided that GTC has the capability to provide the Product
in accordance with the terms of this Agreement, the Supply Agreement and the
Quality Agreement).

(a) Covenants of GTC. GTC or its subcontractors shall manufacture the Product in
accordance with cGMP, the Specifications and the BLA(s) and deliver, within
designated timeframes and agreed upon quantities in accordance with the terms of
the Supply Agreement and the Quality Agreement, the Product to Ovation at such
location or locations, specified by Ovation, all in accordance with the Supply
Agreement and the Quality Agreement and orders placed by Ovation thereunder.
Without limiting the foregoing, GTC shall, and shall cause its subcontractors
to, perform, or have performed, at GTC’s own expense each of the following
activities with respect to Product to be supplied to Ovation or intended for use
or sale by Ovation (in each case, in accordance with and subject to the terms
and conditions of the Supply Agreement and the Quality Agreement):

(i) register and maintain a valid registration of the GTC manufacturing facility
(and/or, such other suitable facility, including a Third Party manufacturing
facility, as GTC may designate with Ovation’s prior written consent, which
consent shall not be unreasonably withheld) with the relevant and appropriate
Regulatory Authorities (including, without limitation, the FDA) as a facility
performing manufacturing operations for pharmaceutical and biologic products and
prepare site master files as required by Applicable Laws and regulations. GTC
shall not make any change or take any action which requires amendment of the BLA
or other Registration, including, but not limited to, transfer of any Product to
alternative manufacturing facilities or changes in or replacement of equipment
or a change in the Specifications, without the prior written consent of Ovation,
which consent shall not be unreasonably withheld. GTC shall pay for all
manufacturing-related costs for any harmonized (meaning U.S. and E.U.)
regulatory compliance for the HD Indication. In the event GTC makes a change or
takes an action for good reason, including, without limitation, a change
mandated by a Regulatory Authority, any costs relating to such change or action
shall be at the sole expense of GTC. Ovation will discuss in good faith
investments that may be necessary for capacity expansion required for Approval
of the HR Indication, DIC/Sepsis Indication and/or Additional Indications.

 

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(ii) validate and operate the production process for the Product to ensure that
such process is compliant with cGMP in the Territory. All Product delivered by
GTC to Ovation hereunder shall have been manufactured using a process that
(x) has been validated in accordance with cGMP and (y) has been and is in
compliance with the Specifications and BLA(s) for such Product and with cGMP and
all Applicable Laws with respect to the manufacture of each Product;

(iii) handle and store the Product prior to shipment to Ovation (x) as mandated
by cGMP and (y) to ensure that the raw materials, recipients, packaging
articles, intermediate products and the Product are handled and stored under
such conditions and that the quality of such materials and the Product
manufactured therefrom are not affected;

(iv) ensure that each shipment of the Product meets the Specifications, the
requirements of the BLA(s) and all applicable warranties set forth herein;

(v) deliver the Product to Ovation in accordance with the Supply Agreement and
the Quality Agreement;

(vi) handle, store, treat and dispose of Wastes generated in the performance of
its obligations pursuant to this Section 4.1(a) and the Supply Agreement and the
Quality Agreement;

 

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(vii) comply with all Applicable Laws and regulations relating to its activities
under this Section 4.1(a) and the Supply Agreement and the Quality Agreement,
including, without limitation, cGMP;

(viii) if the GTC manufacturing facility (or other such facility as in
accordance with Section 4.1(a)(i) hereof) is being used to manufacture material
other than the Product, adopt and enforce a standard operating procedure for
segregation of the Product from such other manufactured materials;

(ix) supply sufficient quantities of the Product to Ovation to satisfy the
purchase requirements of Ovation in accordance with the Supply Agreement In
consideration of the arrangements provided in this Agreement, GTC agrees that
Ovation will be treated with “most favored distributor” status in connection
with allocation of Product, so that if there is a shortfall of Product as
between Ovation and a distributor (including GTC or LEO) outside the Ovation
Territory, GTC will allocate Product in such a manner no less favorable to
Ovation than a percentage that is equivalent to the current Sharing Percentage
of Ovation. Failure by GTC to supply sufficient amounts of Product based on the
above forecasting shall not constitute a breach of this Agreement by GTC,
provided such inability is caused by an increase in the quarterly manufacturing
forecast by more than ************ compared to the previous quarterly forecast
received from Ovation;

(x) except as otherwise specifically agreed between the Parties in writing, be
responsible for procuring all raw materials and other components for each
Product. GTC shall be responsible for testing of all raw materials and
components procured by or on behalf of GTC and used in the Product to ensure
that they meet applicable Specifications and quality standards (including, but
not limited to, those set forth in the Quality Agreement); and

(xi) perform all of the services provided herein in compliance with all
environmental laws and shall be solely responsible for all environmental losses
at sites controlled by GTC. GTC shall be solely responsible for implementing and
maintaining health and safety procedures for the manufacture, generation,
packaging, handling and storage of the raw materials, hazardous materials,
Waste, packaging components and Product as provided herein. Such procedures
shall comply with all relevant environmental laws. Ovation shall have no
responsibility for developing, implementing or overseeing health and safety
programs at GTC.

Subject to the covenants, duties and obligations of GTC under this Agreement,
GTC shall be permitted to contract with one or more Third Parties to perform the
activities described in this Section 4.1(a) and the Supply Agreement, in
accordance with the terms hereof and thereof, as applicable. GTC shall be
responsible for the performance of its subcontractors under this Agreement, the
Quality Agreement and the Supply Agreement.

 

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(b) Covenants of Ovation. In carrying out its covenants, duties and obligations
hereunder and under the Supply Agreement, Ovation shall, and shall cause its
subcontractors (if any) to comply with all Applicable Laws and regulations
relating to its activities hereunder, including all requirements of the
applicable Regulatory Authorities (including, without limitation, the FDA) and
cGMP. Ovation shall be responsible for the performance of its subcontractors, if
any, under this Agreement and the Quality Agreement.

4.2 Quality Assurance. The Quality Agreement shall contain applicable provisions
regarding quality assurance and quality control of the Product.

4.3 Orders and Shipments.

(a) Ovation shall order the Product from GTC, and GTC shall supply the Product
to Ovation, in accordance with the terms and conditions of the Supply Agreement
and to fulfill Ovation’s Product requirements for the performance of clinical
trials and sale and distribution of the Product within the Territory.

(b) Subject to Section 4.7, the Product supplied by GTC for purposes of
Commercial Sale shall have a minimum shelf life of ************ from the date of
delivery. Ovation and GTC shall agree upon the minimum shelf life of Product
supplied by GTC for purposes of clinical studies prior to the shipment of such
Product; provided, that if Product for clinical studies is not able to be used
in the intended clinical study due to expiry, then GTC shall either credit
Ovation’s account for the full price paid for such expired Product or replace
such expired Product at no further cost to Ovation.

(c) After delivery, Ovation shall, within ten (10) Business Days, visually
inspect the Product shipment, with visual inspection by Ovation consisting of
(i) comparing the applicable order against the documentation accompanying the
shipment to verify that the delivery date, identity, quantity and exterior
shipment labelling comply with the order and (ii) visually inspecting the
exterior of the Product shipment to verify that the shipment appears to be in
good condition. Promptly after visual inspection of the Product shipment (or ten
(10) Business Days from the date Ovation becomes aware of any hidden defect and
the Product fails to meet the Specifications or the requirements of the BLA(s)),
determine whether to reject such Product shipment and communicate such rejection
to GTC in writing.

(d) If GTC does not agree to any rejection of the Product, the Parties will seek
the opinion of an independent laboratory expert reasonably acceptable to both
Parties, whose opinion shall be final and binding. The expenses for such expert
opinion shall be borne by the Party against whom the expert rules, unless the
expert cannot make a determination with respect to the matter, in which event
the Parties shall share equally the expenses connected with the expert and the
expenses connected with the Products rejected and/or returned.

4.4 Storage. Ovation shall store and transport the Product in accordance with
the Applicable Laws and regulations of the Territory (and/or any international
rules and regulations, if applicable) and the national Regulatory Authorities
within the Territory. In all cases, Ovation shall comply with all Applicable
Laws, rules and regulations concerning the labeling, packaging, warehousing and
distribution of the Product in the Territory.

 

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4.5 Return and Replacement of Product.

(a) Any quantities of the Product that are rejected and/or returned by Ovation
in accordance with this Article 4, the Quality Agreement or the Supply Agreement
whose rejection has been accepted by GTC shall be returned to GTC at the expense
of GTC and, at the option of Ovation, (i) shall be promptly replaced by GTC at
GTC’s sole expense, and Ovation’s payment for such replaced quantities shall be
postponed until such replacement quantities are received and accepted by
Ovation, or (ii) GTC shall refund any amounts paid for such quantities to
Ovation.

(b) Ovation may return to GTC any Product which is not in all respects in
accordance with this Article 4 and the terms and provisions of the Supply
Agreement and the Quality Agreement. If GTC so notifies Ovation of its desire to
destroy such returned Product, such Product shall be transported to a location
designated by GTC for destruction. The destruction is to take place by an
organization authorized for this purpose, such organization to issue an official
confirmation of the destruction to GTC. All expenses regarding the
transportation and/or destruction of such Product are to be paid by GTC. Upon
the return of such Product to GTC or the delivery of such Product to a location
for destruction, GTC shall credit Ovation’s account in the amount of the actual
purchase price paid by Ovation for the Products returned and/or destroyed.

4.6 Prices and Payments.

(a) Price for Product for Commercial Sales. For the term of the Supply
Agreement, GTC shall supply Ovation with released and accepted finished Product
for Commercial Sale by Ovation and its Affiliates and sublicensees in accordance
with the Supply Agreement for a price equal to the following:

(i) for a given ************ during such term, if Ovation’s annual firm orders
for the Product are less than or equal to ************, then the price of the
Product for such ************ shall be equal to the Cost of Goods for such
Product, which Cost of Goods shall in no event exceed ************ per Unit,
plus a transfer price of ************ per Unit;

(ii) for a given ************ during such term, if Ovation’s annual firm orders
for the Product are greater than ************, then the price of the Product for
such ************ shall be equal to the Cost of Goods for such Product, which
Cost of Goods shall in no event exceed ************ per Unit, plus a transfer
price of ************ per Unit; and

(iii) for any ************ during such term which commences after the
************ of the first Commercial Sale of the Product in the Territory by
Ovation or its Affiliates, if Ovation’s annual firm orders for the Product for
such ************ do not exceed ************, then the price of the Product for
such ************ shall be equal to the Cost of Goods, which Cost of Goods shall
in no event exceed ************ per Unit;

 

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provided, however, that in the event that for any ************ during such term,
the Cost of Goods is equal to or less than ************ per Unit, Ovation shall
pay to GTC a price equal to the Cost of Goods plus a transfer price of
************ per Unit.

(b) Clinical or Non-Commercial Materials. Notwithstanding the foregoing, the
price for all Product supplied by GTC to Ovation on an ex-factory basis for
clinical or other non Commercial Sale uses shall be equal to the Cost of Goods
for such Product; provided, however, that such price shall not in any event
exceed, on a per Unit basis, the price for the Product for Commercial Sale as in
effect under Section 4.6(a) excluding any transfer price thereon.

(c) Payments. Ovation shall pay GTC for all shipments of Product in accordance
with the terms and conditions of the Supply Agreement and in the manner provided
in Article 8 below.

4.7 Initial Supply of Product. As soon as practicable, and as forecasted by
Ovation, following receipt of Approval for the HD Indication, GTC shall supply,
or cause to be supplied, to Ovation ************ Vials of released and accepted
finished Product (which Product is satisfactory to Ovation and has a minimum
shelf life of ************) (the “Initial Supply”) in accordance with the terms
of this Article 4 and the Supply Agreement, and Ovation shall purchase the
Initial Supply from GTC for the price for such Product set forth in
Section 4.6(a) (which price ************). In the event that any of the Initial
Supply expires prior to being sold and distributed by Ovation, then Ovation may
return such expired Product to GTC, and GTC shall credit Ovation’s account for
the full price paid for such expired Product or replace such Product at no
further cost to Ovation.

4.8 Term of Supply Agreement and Quality Agreement. The term of the Supply
Agreement and the Quality Agreement shall be no less than twenty (20) years from
the date of Approval of the Product for the HD Indication.

ARTICLE 5

OBLIGATIONS OF THE PARTIES REGARDING MANUFACTURING, SALE AND

CLINICAL DEVELOPMENT OF PRODUCT

5.1 General Obligations. GTC shall be solely responsible for obtaining Approval
of the Product with the FDA for the HD Indication. Except as otherwise expressly
set forth in this Agreement, during the term of the Supply Agreement, GTC shall
be responsible for the manufacturing, testing, purification filling and
finishing (to coded vials) of the Product. In the Territory, except as otherwise
expressly set forth in this Agreement, during the Term, Ovation shall be
responsible for regulatory guidance, adverse experience reporting, packaging,
labeling, storage, marketing, sales and distribution of the Product with respect
to the HD Indication (subject to Section 5.2 and Article 6 below).

(a) GTC’s Obligations for HD Indication. Except as otherwise expressly set forth
in this Agreement, prior to Approval of the Product for the HD Indication, GTC
shall be responsible for the conduct of all clinical activities and other
clinical responsibilities regarding the Product with respect to the HD
Indication Except as otherwise expressly set forth in this Agreement, GTC will
be responsible for, and will use Best Efforts with respect to, all product
quality and safety-related issues (subject to Section 5.2 hereof) in connection
with the Product with respect to the HD Indication. The Joint Steering Committee
shall monitor GTC’s performance of its obligations and progress towards
achieving the goals set forth in the development plans for the HD Indication
presented to and approved by the Joint Steering Committee.

 

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(b) Ovation’s Obligations for HD Indication. During the Term, Ovation will be
responsible for, and will use Best Efforts with respect to, all non-clinical,
marketing, sale and distribution issues in connection with the Product with
respect to the HD Indication in the Territory, as well as those safety-related
responsibilities set forth in the Pharmacovigilance Procedures Agreement. The
Joint Steering Committee shall monitor Ovation’s performance of its obligations
and progress towards achieving the goals set forth in the development plans for
the HD Indication presented to and approved by the Joint Steering Committee.

5.2 Assignment and Transfer of BLA’s, BB-IND’s and other Registrations. GTC
shall, at or prior to the Closing, execute and deliver such documents and
instruments to Ovation for filing with the FDA in order to assign and transfer
to Ovation GTC’s BLA filing or other Registration for the Product with respect
to the HD Indication, and all documents, instruments, and certificates related
thereto, including, without limitation, with respect to the BB-IND’s for the
Product (collectively, the “HD BLA Assignment Documents”), and shall take all
such actions reasonably requested by Ovation in order to effect such transfer
and assignment; provided, however, that GTC shall hold the BLA until such time,
if any, that Ovation, in its sole and absolute discretion, elects for the BLA to
be assigned and transferred to Ovation. After the BLA(s) or other Registrations
for the Product for the HD Indication have been transferred to Ovation
hereunder, Ovation shall thereafter be responsible with respect to the Product
in the Territory for (a) transfer fees, annual Product and Establishment fees
required by PDUFA and other administrative fees associated with the regulatory
maintenance of such Product BLA or other Registrations in the Territory and
(b) adverse experience reporting with respect to the Territory.

5.3 Specific Ovation Obligations. Ovation hereby agrees (and shall use its
reasonable Best Efforts to impose similar obligations on its distributors and
agents within the Territory) to exercise their respective Best Efforts to
import, label, pack, store, market, sell and distribute the Product in the
Territory for the HD Indication (and other Indications, as applicable) after
receipt of the Approval for the HD Indication (and other Indications, as
applicable), which shall include:

(a) promoting the sale of the Product in the Territory, and preparation and
dissemination of promotional materials and advertising in the Territory
regarding the Product;

 

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(b) establishing and maintaining a well-trained sales force for the Product
(together with a well-trained support staff) adequate to service all the
customers of Ovation and to promote the sale of the Product in the Territory and
keep the sales force knowledgeable and fully informed as to the Product;

(c) maintaining an effective distribution system for the Product in the
Territory in accordance with good business practice, the Quality Agreement and
the requirements of its customers;

(d) transportation and storage of the Product to preserve the quality of the
Product in accordance with the Quality Agreement and all Applicable Laws and
regulatory filings in the Territory;

(e) obtaining and maintaining all material licenses, approvals and permits
(other than those which must be obtained by GTC as set forth in this Agreement
or the Supply Agreement) in the Territory necessary for Ovation to perform its
obligations under this Agreement;

(f) notifying GTC as soon as reasonably practicable upon Ovation’s becoming
aware of any material occurrence of disparagement of the Product or infringement
of any rights relating to the Product in the Territory;

(g) promptly evaluating any Adverse Events with respect to the Product as a
result of Ovation’s performance of its obligations hereunder to determine if
they are Serious Adverse Events, and report to GTC any Serious Adverse Events in
accordance with the Pharmacovigilance Procedures Agreement attached hereto as
Exhibit A;

(h) establishing and maintaining suitable systems and records (including lot
numbers of the Product sold and the purchasers of the Product) to enable a
recall of Product in a timely, efficient and accurate manner and otherwise in
accordance with Applicable Laws and regulations in the Territory;

(i) abiding by all applicable rules and regulations related to sales, marketing
and reimbursement with respect to the Product in the Territory;

(j) ensuring that no Product shipped by Ovation is, at the time of shipment,
adulterated or misbranded as a result of Ovation’s acts or omissions; and

(k) providing timely and reasonable assistance to GTC to enable GTC to comply
with its obligations under this Agreement, including, without limitation, by
responding to reasonable requests by GTC and providing GTC with reasonable
information relating to the Product;

 

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(l) maintaining adequate control over the physical security of the Product,
including, but not limited to, controls necessary to prevent potential
distribution or sale of the Product outside of the Territory; and

(m) complying with, and causing all Affiliates, sublicensees and subcontractors
of Ovation to comply with, all terms and provisions of the Quality Agreement.

5.4 Commencement of Marketing and Sales. Ovation shall, in accordance with the
Launch Commercialization Plan and other actions validly taken by the Joint
Steering Committee, commence the marketing, sale and distribution of the Product
in the Territory as soon as commercially reasonable following the date on which
Approval and, if applicable, Reimbursement Approval for the Product are granted,
to the extent GTC has supplied Ovation with the Product in accordance with the
terms of Article 4 hereof and the Supply Agreement.

5.5 Restrictions.

(a) Restrictions on Ovation’s Activities. Notwithstanding the above and to the
extent allowed by Applicable Law within the Territory, Ovation agrees that
during the Term of this Agreement it shall not sell, co-promote or market, by
itself or in cooperation with a Third Party, any plasma derived or recombinant
antithrombin product which is competitive to the Product; provided, however,
that ************. Ovation shall refrain from seeking customers, establishing
any branch and/or maintaining any distribution depot regarding the Product
outside the Territory (except with the written approval of GTC or as otherwise
contemplated by this Agreement or the Supply Agreement), and shall take
reasonably appropriate legal measures to assure that no Product sold by Ovation
or its Affiliates or sublicensees is exported to any other country outside the
Territory for any purpose (except with the written approval of GTC or as
otherwise contemplated by this Agreement or the Supply Agreement). GTC has
neither expressly nor implicitly given its consent to Ovation to the storage
(except, if applicable, as otherwise contemplated by this Agreement or the
Supply Agreement), distribution, promotion, marketing and sale of the Product by
Ovation outside the Territory, and GTC expressly reserves its right to enforce
Trademarks and the GTC Intellectual Property Rights in the Product outside the
Territory and to prevent the importation, storage (except with the written
approval of GTC or as otherwise contemplated by this Agreement or the Supply
Agreement), distribution, promotion, marketing and sale of the Product to any
location outside the Territory, to the extent such prevention is legally
possible.

(b) Restrictions on GTC’s Activities. During the Term of this Agreement, GTC
shall refrain from (i) seeking customers, establishing any branch and/or
maintaining any distribution depot regarding the Product for Commercial Sale
within the Territory and (ii) selling, co-promoting or marketing (except for the
purposes of conducting clinical trials in the HD Indication (or other
Indication, as applicable) by itself or in cooperation with a Third Party, any
plasma derived or any recombinant antithrombin product or combination product
incorporating the Product which is competitive to the Product.

 

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5.6 Specific GTC Obligations. GTC hereby agrees to exercise its Best Efforts to
do the following:

(a) ensure that all Product shipped hereunder at the time of shipment is not
adulterated or misbranded as a result of acts or omissions by GTC or its
Affiliates or subcontractors;

(b) obtain and maintain in its name or in the name of any of its Affiliates all
material licenses, approvals and permits (other than those which must be
obtained by Ovation) for the Product necessary for GTC to perform fully its
obligations under this Agreement;

(c) provide Ovation, from time to time, with data, analyses, studies and other
information available to GTC at any time during the Term which the Joint
Steering Committee (or other Committee, as applicable) believes will assist
Ovation in its brand planning and marketing activities for the Product in the
Territory;

(d) promptly evaluate any Adverse Events with respect to the Product as a result
of GTC’s performance of its obligations hereunder to determine if they are
Serious Adverse Events, and report to Ovation any Serious Adverse Events in
accordance with the Pharmacovigilance Procedures Agreement attached hereto as
Exhibit A;

(e) provide timely and reasonable assistance to Ovation to enable Ovation to
comply with its obligations under this Agreement, including, without limitation,
by responding to reasonable requests by Ovation and providing Ovation with
information relating to the Product reasonably available to GTC;

(f) establish and maintain suitable systems and records to enable a recall of
Product in a timely, efficient and accurate manner and otherwise in accordance
with Applicable Laws and regulations;

(g) promptly after the Closing, provide Ovation with relevant data and
information with respect to GTC’s Product BLA or other Registrations for the HD
Indication and, to the extent not prohibited by the terms of the LEO Agreement,
LEO’s Product registrations or marketing authorization applications outside the
Territory to assist Ovation in making appropriate filings in the Territory.

(h) provide Ovation with an Approved Product for the HD Indication (and other
Indications, as applicable) in the Territory; and

(i) comply with, and cause all Affiliates, sublicensees and subcontractors of
GTC to comply with, all terms and provisions of the Quality Agreement.

5.7 Pharmacovigilance. At or prior to the Closing, GTC and Ovation shall enter
into a Pharmacovigilance Procedures Agreement substantially in the form attached
hereto as Exhibit A, which shall govern collection, investigation and reporting
to the regulatory authorities and each other of Product-related adverse drug
experience reports, quality reports and complaint

 

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reports post-Approval of the Product for the HD Indication, such that each of
the Parties may be in compliance with all Applicable Laws. The Parties shall
promptly amend or modify the standard operating procedures described in the
Pharmacovigilance Procedures Agreement as required by changes in Applicable
Laws. Additionally, in the event that GTC receives notice of (or otherwise
becomes aware of) any adverse drug experience reports, quality reports or
complaint reports related to the Product outside of the Territory (whether from
LEO or otherwise), GTC shall promptly notify Ovation of such reports, if any,
and provide details reasonably requested by Ovation with respect to such
reports, if any.

5.8 Ovation’s Option to Manufacture. During the term of the Supply Agreement,
Ovation may, upon written notice to GTC, initiate good faith negotiations with
GTC for the ************ right to test, purify, fill and finish (to coded vials)
the Product in the Territory. Under such terms, Ovation shall have the right to
appoint or assume subcontractors to perform these duties on behalf of Ovation.
************.

5.9 Plans for Securing Raw Materials. Within ************ following the Signing
Date, GTC shall provide sufficient evidence to Ovation, in Ovation’s discretion,
that GTC has prepared and implemented sufficient detailed back-up plans for
securing adequate supplies of raw materials to meet Ovation’s requirements for
the Product pursuant to Article 4 and the Supply Agreement.

5.10 Tax Credits. To the extent Ovation funds any clinical development under
this Agreement (including, without limitation, pursuant to Article 6 hereof) for
any Indication, Ovation shall retain all tax attributes associated with such
clinical development funding, including, without limitation, the Credit for
Increasing Research Activities and the Orphan Drug Tax Credit (each as defined
in Section 41 of the Internal Revenue Code of 1986, as amended). GTC agrees to
retain and make readily available to Ovation all supporting documentation
reasonably requested by Ovation related to the funding of such clinical
development (including, without limitation, copies of invoices, work orders and
project summaries).

ARTICLE 6

OTHER INDICATIONS

6.1 HR Indication.

(a) With respect to the HR Indication, the Parties hereby acknowledge that prior
to the Closing, Ovation will not have obtained, audited or verified the accuracy
of the data to be provided by GTC with respect to the HR Indication and cannot,
therefore, determine in advance of a meeting with the FDA regarding the “HR
Phase III Clinical Study Protocol” the regulatory weight, if any, that the FDA
will give to GTC’s pre-clinical and clinical data in support of the HR
Indication. Accordingly, promptly after GTC receives the final FDA comments or
other guidance regarding the HR Indication and the “HR Phase III Clinical Study
Protocol,” GTC shall deliver such FDA comments and guidance to Ovation for its
review, analysis and consideration and, within ************ thereafter, Ovation
shall have the right, in its sole and absolute discretion, to:

(i) elect not to proceed with the development plans for the HR Indication, in
which event Ovation shall have no further obligations under this Section 6.1 and
the HR Indication shall no longer be included in the Field; or

 

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(ii) elect to proceed with the development of the Product for the HR Indication
under the modified clinical study protocol and/or regulatory development plans
with respect to the HR Indication if, subsequent to the FDA comments and other
guidance received, additional clinical development or related work is likely to
be necessary for Ovation’s receipt of timely and feasible FDA Approval of the
Product for the HR Indication in the Territory;

In the event that Ovation does not notify GTC of its election to proceed with
the development plans for the HR Indication pursuant to Section 6.1(a)(ii)
within the ************ described above, then Ovation shall be deemed to have
elected not to proceed with the development plans for the HR Indication pursuant
to Section 6.1(a)(i).

(b) Subject to Section 6.1(a), in the event that Ovation decides to proceed with
the development of the HR Indication, in addition to payments, if any, to be
made by Ovation to GTC pursuant to Article 4, Article 8 and Section 6.2 hereof,
Ovation will pay to GTC the following amounts in accordance with Section 8.7
hereof:

(i) Ovation shall provide funding for the clinical development of the Product
for the HR Indication up to a total of ************ (in addition to the price
payable for the Product for such clinical development set forth in
Section 4.6(b)), which funding shall be made in installments by Ovation to GTC,
with each installment set forth on Schedule 3 hereto becoming due and payable
within ************ following the occurrence of the event opposite such
installment on Schedule 3;

(ii) within ************ after ************, Ovation shall pay to GTC the amount
of ************; and

(iii) within ************ after ************, Ovation shall pay to GTC the
amount of ************.

(c) GTC shall be responsible for conducting the clinical development program for
the HR Indication and preparing and filing all proper regulatory submissions in
connection therewith; provided, that in the event the development of the Product
for the HR Indication under the modified clinical study protocol and/or
regulatory development plans with respect to the HR Indication incurs costs in
excess of a total of ************ (in addition to the price payable for the
Product for such clinical development set forth in Section 4.6(b)), then the
Parties shall negotiate in good faith regarding each Party’s responsibilities
with respect to such excess costs. Ovation shall be the holder of the BLA or
other Registration for the Product for the HR Indication in the Territory, and
Ovation and its Affiliates and sublicensees, if any, shall be the sole entities
permitted to market, distribute and sell the Product for the HR Indication
within the Territory.

 

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6.2 DIC/Sepsis Indication.

(a) With respect to the DIC/Sepsis Indication, the Parties hereby acknowledge
that prior to the Effective Date, Ovation will not have obtained, audited or
verified the accuracy of the data to be provided by GTC with respect to the
DIC/Sepsis Indication and cannot, therefore, determine, in advance of a meeting
with the FDA or the European Medicines Agency (the “EMEA”) regarding the
“DIC/Sepsis Phase III Clinical Study Protocol” the regulatory weight, if any,
that the FDA will give to GTC’s pre-clinical and clinical data in support of the
DIC/Sepsis Indication. Accordingly, within ************ after all of the
following have occurred: (x) GTC receives the final FDA and EMEA comments or
other guidance regarding the DIC/Sepsis Indication and the “DIC/Sepsis Phase III
Clinical Study Protocol,” and GTC has delivered such FDA and EMEA comments and
guidance to Ovation for its review, analysis and consideration, (y) the FDA and
EMEA regulatory processes are harmonized and (z) GTC, Ovation and LEO have
agreed upon a plan and process for obtaining Regulatory Approval for the Product
for the DIC/Sepsis Indication from the FDA and EMEA, Ovation shall have the
right, in its sole and absolute discretion, to:

(i) elect not to proceed with the development plans for the DIC/Sepsis
Indication, in which event Ovation shall have no further obligations under this
Section 6.2 and the DIC/Sepsis Indication shall no longer be included in the
Field; or

(ii) elect to proceed with the development of the Product for the DIC/Sepsis
Indication under the modified clinical study protocol and/or regulatory
development plans with respect to the DIC/Sepsis Indication if, subsequent to
the FDA and/or EMEA guidance received, additional clinical development or
related work is likely to be necessary for Ovation’s receipt of timely and
feasible FDA Approval of the Product for the DIC/Sepsis Indication in the
Territory.

In the event that Ovation does not notify GTC of its election to proceed with
the development plans for the DIC/Sepsis Indication pursuant to
Section 6.2(a)(ii) within the ************ period described above, then Ovation
shall be deemed to have elected not to proceed with the development plans for
the DIC/Sepsis Indication pursuant to Section 6.2(a)(i).

(b) Subject to Section 6.2(a), the Joint Steering Committee shall form a
subcommittee that shall work collaboratively with LEO with respect to the
DIC/Sepsis Indication (which subcommittee may include personnel from LEO with
expertise in the commercialization, manufacturing, clinical development, medical
and regulatory affairs, reimbursement, sales, marketing, intellectual property
and finance of pharmaceutical and biologic products in general and, in
particular, the Product with respect to the DIC/Sepsis Indication possibly
becoming full or ad hoc members of the DIC/Sepsis Committee, if GTC and Ovation
mutually agree). Such subcommittee, on behalf of the Parties, and in
collaboration with LEO shall govern all matters with respect to the development,
clinical studies and obtaining regulatory approvals for the Product for the
DIC/Sepsis Indication for the Territory.

 

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(c) Subject to Section 6.2(a), in the event that Ovation decides to proceed with
the development of the DIC/Sepsis Indication pursuant to this Section 6.2, in
addition to payments, if any, to be made by Ovation to GTC pursuant to Article
4, Article 8 and Section 6.1 hereof, Ovation will pay to GTC the following
amounts in accordance with Section 8.7 hereof:

(i) within ************ after Ovation’s receipt of the later of
(x) ************, and (y) a mutually agreed upon Joint Clinical Development
Agreement among GTC and Ovation and/or LEO (which Joint Clinical Development
Agreement (if entered into) shall provide, among other things, that Ovation
shall hold all rights to the Product for the DIC/Sepsis Indication in the
Territory, Ovation shall pay to GTC the amount of ************;

(ii) Ovation shall provide funding for the clinical development (in accordance
with an agreed upon budget) of the Product for the DIC/Sepsis Indication up to a
total of ************ (in addition to the price payable for the Product for such
clinical development set forth in Section 4.6(b)), but not to exceed
************ of the total expense of such U.S. and E.U. clinical development
program, which funding shall be made in installments by Ovation to GTC, with
each installment set forth on Schedule 4 hereto becoming due and payable within
************ following the occurrence of the event opposite such installment on
Schedule 4;

(iii) ************ after Ovation’s receipt of the FDA BLA filing letter
indicating acceptance of the complete BLA filing for the Product with respect to
the DIC/Sepsis Indication, Ovation shall pay to GTC the amount of ************;
and

(iv) within ************ after Ovation’s receipt of Approval of the BLA for the
DIC/Sepsis Indication, Ovation shall pay to GTC the amount of ************.

(d) GTC shall be responsible for conducting the clinical development program for
the DIC/Sepsis Indication and preparing and filing all proper regulatory
submissions in connection therewith; provided, that in the event the development
of the Product for the DIC/Sepsis Indication under the modified clinical study
protocol and/or regulatory development plans with respect to the DIC/Sepsis
Indication for the Territory incurs costs in excess of a total of ************
(or ************ for a U.S. and E.U. combined development program) (in addition
to the price payable for the Product for such clinical development set forth in
Section 4.6(b)), then the Parties shall negotiate in good faith regarding each
Party’s responsibilities with respect to such excess costs. Ovation shall be the
holder of the BLA or other Registration for the Product for the DIC/Sepsis
Indication in the Territory, and Ovation and its Affiliates and sublicensees, if
any, shall be the sole entities permitted to market, distribute and sell the
Product for the DIC/Sepsis Indication within the Territory.

 

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6.3 Additional Indications. Ovation shall have the right, but not the
obligation, to conduct (either individually or together with GTC) clinical
trials for the Product for Additional Indications in the Territory. At any time
during the Term, GTC may propose in writing that the Parties proceed with
development and commercialization of the Product for any Additional Indication,
with costs for clinical development for the Product for any Additional
Indication to be discussed and negotiated by the Parties in good faith. Within
************ of the receipt of any such written proposal, Ovation shall have the
right to either:

(a) elect not to proceed with the development plans for such Additional
Indication, in which event Ovation shall have no further obligations under this
Section 6.3 with respect to such Indication and such Indication shall no longer
be included in the Field; or

(b) subject to the Parties’ written agreement regarding funding of the clinical
development of the Product for such Additional Indication, elect to proceed with
the development of the Product for such Indication.

In the event that Ovation does not notify GTC of its election to proceed with
the development plans for such Additional Indication pursuant to Section 6.3(a)
within the ************ period described above, then Ovation shall be deemed to
have elected not to proceed with the development plans for such Additional
Indication pursuant to Section 6.3(b).

6.4 Rejected Indications.

(a) Second Offers. Notwithstanding anything in this Article 6 to the contrary,
in the event that Ovation elects not to proceed with respect to the HR
Indication, the DIC/Sepsis Indication or any Additional Indication pursuant to
the terms of this Article 6 (collectively, the “Rejected Indications”), and GTC
proceeds with the clinical development of the Product for such Rejected
Indication either on its own or with a Third Party which is not a Strategic
Partner, then no sooner than after completion of the Phase III clinical
study(ies) for such Rejected Indication and prior to FDA’s acceptance of the
complete BLA filing for the Product for such Rejected Indication, GTC shall
submit a written offer to Ovation to develop the Product for such Indication as
though such Indication was not a Rejected Indication, which offer shall remain
open for ************ (the “Second Offer Period”) and pursuant to which Ovation
shall, if such offer is accepted by Ovation, pay to GTC the following amounts,
which shall be payable to GTC in accordance with Section 8.7 hereof (each, a
“Second Offer”):

(i) With respect to the DIC/Sepsis Indication:

(A) within ************ after acceptance of the Second Offer, Ovation shall pay
to GTC the sum of (x) ************ and (y) ************ of the actual documented
clinical development costs incurred by GTC for the DIC/Sepsis Indication;

(B) by the later of (x) ************ after Ovation’s ************ with respect
to the DIC/Sepsis Indication and (y) ************ Business Days after acceptance
of the Second Offer, Ovation shall pay to GTC the amount of ************;

 

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(C) within ************ after Ovation’s receipt of Approval of the BLA for the
DIC/Sepsis Indication, Ovation shall pay to GTC the amount of ************; and

(D) the Royalty Payment described in Section 8.2(a)(v) shall be increased from
************ of Ovation’s Net Sales for a given calendar year to the extent such
Net Sales exceed ************ to ************ of Ovation’s Net Sales for such
calendar year to the extent such Net Sales exceed ************.

(ii) For the HR Indication or any Additional Indication, the Parties shall
negotiate in good faith the amounts payable in connection with the Second Offer.

In the event that Ovation accepts a Second Offer described herein, then the
Field shall be deemed to include the Indication relating to such Second Offer.

In the event that Ovation does not notify GTC of its acceptance of a Second
Offer within the Second Offer Period, then Ovation shall be deemed to have
elected not to accept such Second Offer.

(b) Ovation as Sole Distributor. Notwithstanding anything herein to the
contrary, for any Rejected Indication, whether launched by GTC and/or any Third
Party (including, but not limited to, a Strategic Partner), Ovation shall be the
sole and exclusive distributor of the Product in the Territory and shall collect
an annual distribution fee equal to ************ of Net Sales for such Rejected
Indication.

6.5 Applicability of Agreement. To the extent that Ovation elects to proceed
with development of the HR Indication, the DIC/Sepsis Indication and/or any
Additional Indication, as the case may be, the terms and provisions of this
Agreement (including, without limitation, the provisions of Sections 5.1, 5.3,
5.5, 5.6, 7.1, 7.2, 7.3 and 7.4) shall be applicable to and govern the Parties’
rights, duties and obligations with respect to such Indication(s).

ARTICLE 7

REGULATORY REQUIREMENTS

7.1 Regulatory and Reimbursement Approvals. Until the assignment and transfer to
Ovation of the Product BLA or other Registration for the HD Indication has been
effected in accordance with Section 5.2, GTC shall adhere to all reasonable
instructions given by Ovation from time to time with respect to engaging with
the FDA. Upon completion of such assignment and transfer to Ovation, Ovation, as
holder of such BLA or other Registration, shall apply for such other Regulatory
Approvals (other than the BLA’s or other Registrations for the Product), if any,
necessary within the Territory and, if applicable, Reimbursement Approvals in
its own name or in the name of one of its Affiliates, distributors or agents
subject to the following conditions:

(a) the corresponding initial application, any material amendment to such
application (including any variation in the Specifications and any content on
any Product label or package insert), and any answers to questions pertaining to
that part of the manufacturing process under the control of GTC shall be
submitted to the applicable Regulatory Authority only after approval by the
Joint Steering Committee of such initial application, amendment or answers; and

 

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(b) the contents of the applications shall at all times be kept strictly
confidential by Ovation, GTC and ATIII LLC (except to the extent reasonably
required to be disclosed to LEO for the purposes of this Agreement).

7.2 Suspension of Distribution. Each Party shall promptly notify the other Party
if it becomes aware of a problem with the quality or safety of the Product
distributed in the Territory, or a directive from any Regulatory Authority or
similar foreign regulatory authority related to the Product’s marketing, sale or
distribution in the Territory. Upon receipt of any such notice from GTC,
Ovation, in consultation with GTC, shall determine whether to immediately
suspend the sale and/or distribution of the Product in the Territory. After any
such suspension, Ovation shall, in its reasonable discretion, determine whether
and when to resume the sale and/or distribution of the Product in the Territory;
provided, however, that no such suspension shall be deemed to be a breach of
Ovation’s obligations hereunder, except to the extent that Ovation does not
resume the sale and distribution of the Product within ************ after the
Parties agree that such quality or safety issue has been resolved. Should
Ovation resume the sale of the Product in the Territory notwithstanding GTC’s
written opinion to Ovation to the contrary, Ovation shall be responsible for any
liability towards any Third Party as a result of such sales of the Product in
the Territory.

7.3 Product Recall. Each Party shall promptly notify the other Party of any
recalls required by any Regulatory Authority or, if applicable, Reimbursement
Authority or similar foreign regulatory authority with respect to the Product,
whether within or outside the Territory. Upon such a recall, Ovation and GTC
shall determine if such recall is applicable to any Product lot in distribution
in the Territory and immediately notify its affected customers in the Territory
using a letter containing appropriate instructions as to whether the customer
should return or dispose of the affected Product. GTC shall be responsible for
any expenses incurred by Ovation associated with the mailing, shipping and
reasonable administrative expenses in connection with such recall, as well as
the cost of replacement Product for Ovation and its customers, unless the reason
for the recall was caused by the negligence of Ovation, in which case Ovation
shall be responsible for any expenses incurred by GTC or Ovation associated with
the mailing, shipping and reasonable administrative expenses in connection with
such a recall in the Territory, as well as the cost of replacement Product for
Ovation and its customers. The covenants contained in this Section 7.3 shall
survive for a period of ************ after the latest expiry date of Product
marketed, distributed or sold under this Agreement or the Supply Agreement. Each
Party shall maintain for ************ after the later of the termination or
expiration of this Agreement or the Supply Agreement the records related to
Parties’ respective obligations under this Section 7.3 and such other
information as may be reasonably required to effect a recall of the Product in
the Territory, and shall make such information available to the other Party at
its request in the event of such a recall. Furthermore, each Party shall
cooperate with the other Party in investigating any Product failure which
results in the need for a recall in the Territory.

 

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7.4 Advertising and Promotional Materials. As permitted by Applicable Laws and
regulations in the Territory, all documentary information, promotional material
and oral presentations (where practical) promoting the Product in the Territory
shall display: (a) the Trademarks of the Product in a manner that promotes the
Product, and (b) the names and/or logos of each of the Parties in an appropriate
manner and shall identify Ovation as the BLA or other Registration holder and
distributor of the Product, GTC as the manufacturer of the Product, and ATryn®
as a Trademark of Ovation, unless otherwise required by Applicable Law,
regulation or requirement of the FDA or other Regulatory Authority in the
Territory. Ovation shall be responsible for reviewing and discussing all
promotional material to be used in the Territory with the FDA and other
applicable Regulatory Authorities or Reimbursement Authorities (if applicable)
in the Territory, and Ovation shall file with the FDA and any other applicable
Regulatory Authorities or Reimbursement Authorities (if applicable) in the
Territory all promotional materials in accordance with applicable regulatory
requirements.

ARTICLE 8

CONSIDERATION

8.1 Milestone Payments for HD Indication. In addition to the payments, if any,
to be made by Ovation to GTC pursuant to Article 4, Article 6 or Sections 8.2 or
8.3 hereof, Ovation shall, upon the following events, pay to GTC the following
respective amounts:

(a) at the Closing, Ovation shall pay to GTC a one-time, non-refundable payment
in the amount of $3,000,000 (the “Closing Payment”);

(b) within ************ after Ovation’s receipt of the FDA BLA filing letter
indicating acceptance of the complete rolling BLA filing for the HD Indication,
but not sooner than ************, Ovation shall pay to GTC the amount of
$1,500,000;

(c) within ************ after Ovation’s receipt of an FDA Priority Review filing
designation, but not sooner than ************, Ovation shall pay to GTC the
amount of $500,000;

(d) within ************ after Ovation’s receipt of the FDA Advisory Committee
written meeting minutes indicating a Positive Opinion (but if a Positive Opinion
is received at any time during ************, then on ************), Ovation
shall pay to GTC the amount of $1,000,000; provided, however, that if a Positive
Opinion is not received and, thereafter, Approval of the Product for the HD
Indication is ultimately received, then the payment to be made under this
Section 8.1(d) shall be made at the same time as the payment set forth in
Section 8.1(e), subject to the terms and conditions thereof; and

(e) within ************ after (i) Ovation’s receipt of Timely Approval of the
Product for the HD Indication, assuming mutually agreed-upon label (target
product profile) and post-approval commitments and (ii) Ovation’s confirmation
that GTC has sufficient quantity

 

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and quality of Product to provide the Initial Supply in accordance with
Section 4.7, Ovation shall pay to GTC the amount of $3,000,000; provided,
however, that in the event Approval of the Product for the HD Indication is not
received prior to ************, GTC shall, within ************, pay to Ovation
************ of the amounts paid to GTC pursuant to Sections 8.1(b), 8.1(c) and
8.1(d) hereof (the “Rebate”); provided, further, that in the event that Approval
for the Product for the HD Indication is received after such date and GTC has
failed to pay the Rebate to Ovation in accordance with the terms hereof, Ovation
shall, within ************ after (x) Ovation’s receipt of Approval of the
Product for the HD Indication, assuming mutually agreed-upon label (target
product profile) and post-approval commitments and (y) Ovation’s confirmation
that GTC has sufficient quantity and quality of Product to provide the Initial
Supply in accordance with Section 4.7, pay to GTC the amount of $3,000,000 less
the amount of the Rebate.

8.2 Royalty Payments.

(a) Amounts of Royalty Payments. In addition to the payments, if any, to be made
by Ovation to GTC pursuant to Article 4, Article 6 or Sections 8.1 or 8.3
hereof, Ovation shall pay to GTC the following amounts in accordance with the
Section 8.2(b) below for each calendar year during the Term (collectively, the
“Royalty Payments”):

(i) the lesser of (i) an amount equal to ************ of Ovation’s Net Sales for
such calendar year or (ii) ************;

(ii) the lesser of (i) an amount equal to ************ of Ovation’s Net Sales
for such calendar year to the extent such Net Sales exceed ************ or
(ii) ************;

(iii) the lesser of (i) an amount equal to ************ of Ovation’s Net Sales
for such calendar year to the extent such Net Sales exceed ************ or
(ii) ************;

(iv) the lesser of (i) an amount equal to ************ of Ovation’s Net Sales
for such calendar year to the extent such Net Sales exceed ************ or
(ii) ************; and

(v) an amount equal to ************ of Ovation’s Net Sales for such calendar
year to the extent such Net Sales exceed ************ (subject to
Section 6.4(a)(i)(D)).

Example #1: If during a given calendar year during the Term, Ovation’s Net Sales
for such calendar year equal************, the total Royalty Payments for such
calendar year due to GTC shall be equal to ************, calculated as the sum
of:

(i) ************ pursuant to subsection (i) above, as ************ is less than
************ of Net Sales, or ************;

 

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(ii)************ pursuant to subsection (ii) above, as ************ is less than
************ of ************, or ************;

(iii) ************ pursuant to subsection (iii) above, as ************ is less
than ************ of************, or ************;

(iv) ************ pursuant to subsection (iv) above, as ************ is less
than ************ of ************, or ************; and

(v)************ of ************, or ************ pursuant to subsection
(v) above.

Example #2: If during a calendar year during the Term, Ovation’s Net Sales for
such calendar year equal ************, the total Royalty Payment for such
calendar year due to GTC shall be equal to ************ pursuant to subsection
(i) above.

(b) Payment Terms. Within ************ after the end of each calendar quarter
during the Term, Ovation shall pay to GTC an amount equal to (i) the Royalty
Payments due to GTC for such calendar year through the end of such calendar
quarter (taking into account reasonable estimates for deductions, chargebacks
and other credits, if any, for such period included in the definition of Net
Sales) less (ii) the aggregate amount of Royalty Payments made to GTC for
previous quarters of such calendar year; provided, however, that in the event
that amounts payable to GTC under this Section 8.2(b) for a calendar quarter are
less than the amounts actually paid to GTC for such calendar quarter, then such
shortfall may be immediately set off against any other amount that may be due or
owing, or to become due and owing, from Ovation to GTC under this Agreement or
the Supply Agreement.

Example: If during Quarter 1 of a given calendar year during the Term, Ovation’s
Net Sales for such quarter (taking into account reasonable estimates for
deductions, chargebacks and other credits included in the definition of Net
Sales) equal ************, the Royalty Payment due to GTC for such quarter shall
be equal to ************ pursuant to Section 8.2(a)(i), or************ of
************.

If during Quarter 2 of such calendar year, Ovation’s Net Sales for such quarter
(taking into account reasonable estimates for deductions, chargebacks and other
credits included in the definition of Net Sales) equal ************ for such
quarter and ************ in aggregate for the calendar year, the Royalty Payment
due to GTC for such quarter shall be equal to ************, or:

(i) ************, or the sum of (x) ************ pursuant to Section 8.2(a)(i)
above, as ************ is less than ************ of Net Sales for the calendar
year to date, or ************ and (y) ************ pursuant to
Section 8.2(a)(ii) above; minus

(ii)************ (the Royalty Payment made to GTC for Quarter 1 of such calendar
year).

 

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If during Quarter 3 of such calendar year, Ovation’s Net Sales for such quarter
(taking into account reasonable estimates for deductions, chargebacks and other
credits included in the definition of Net Sales) equal ************ for such
quarter and ************ in aggregate for the calendar year to date, the Royalty
Payment due to GTC for such quarter shall be equal to ************, or:

(i) ************, or the sum of (x) ************ pursuant to Section 8.2(a)(i)
above, as ************ is less than ************ of Net Sales for the calendar
year to date, or ************, (y) ************ pursuant to Section 8.2(a)(ii)
above, as ************ is less than ************ of Net Sales for the calendar
year to date, or ************, and (z) ************ pursuant to
Section 8.2(a)(iii) above; minus

(ii)************ (the sum of Royalty Payments made to GTC for Quarters 1 and 2
of such calendar year).

(c) The Parties agree that in the event that one or more generic or biosimilar
recombinant antithrombin products become sold in the Territory in competition
with the Product during the Term, and such competitive product(s) reach a market
share of ************ or more of the total recombinant antithrombin business in
the Territory in either dollars or units, then ************. In the event
Ovation terminates this Agreement pursuant to Sections 15.3(a), 15.3(b) or
15.3(e), the Royalty Payments hereunder, and each of them, shall be reduced by
************ (the “Reduced Royalty Payments”) for a period of time equal to the
remainder of the Term as if the Agreement had not been terminated.

8.3 Net Sales Payments. In addition to payments, if any, to be made by Ovation
to GTC pursuant to Article 4, Article 6 or Sections 8.1 or 8.2 hereof, Ovation
shall, within ************ after the first calendar year during the Term in
which Net Sales of the Product in the Territory for such calendar year fall
within each of the Net Sales Ranges listed below, pay to GTC an amount equal to
the sum of (i) the Net Sales Payment listed below for such Net Sales Range plus
(ii) all Net Sales Payments listed below, if any, for any Net Sales Ranges
having a number less than such Net Sales Payment unless Ovation has previously
made a Net Sales Payment under this Section 8.3 with respect to such Net Sales
Range. For purposes of clarification, Ovation shall only be required to make
each of the Net Sales Payments listed below to GTC one (1) time during the Term.
The aggregate Net Sales Payments potentially payable under this Section 8.3
shall in no event exceed $155,000,000.

 

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NET SALES
RANGE /
PAYMENT NO.

  

NET SALES RANGE FOR CALENDAR YEAR

  

NET SALES PAYMENT

1    Exceeding ************ up to ************    ************ 2    Exceeding
************ up to ************    ************ 3    Exceeding ************ up
to ************    ************ 4    Exceeding ************ up to ************
   ************ 5    Exceeding ************ up to ************    ************ 6
   Exceeding ************ up to ************    ************ 7    Exceeding
************ up to ************    ************ 8    Exceeding ************ up
to ************    ************ 9    Exceeding ************    ************

Example #1: If, during the first calendar year of the Term, Net Sales of the
Product equal ************ (within Net Sales Range No. 3), then the Net Sales
Payment due to GTC within************ after the end of such calendar year shall
be equal to ************, or the sum of (i) Net Sales Payment No. 3, or
************, (ii) Net Sales Payment No. 2, or ************ and (iii) Net Sales
Payment No. 1, or ************.

If, during the second calendar year of such Term, Net Sales of the Product equal
************, then there shall be no Net Sales Payment due to GTC for such
calendar year, as Net Sales Range No. 3 was reached in a previous calendar year.

Example #2: If, during the first calendar year of the Term, Net Sales of the
Product equal ************, then there shall be no Net Sales Payment due to GTC,
as Net Sales did not fall within a Net Sales Range.

If, during the second calendar year of the Term, Net Sales of the Product equal
************ (within Net Sales Range No. 1), then the Net Sales Payment due to
GTC within ************ after the end of such calendar year shall be equal to
************ (Net Sales Payment No. 1).

If, during the third calendar year of the Term, Net Sales of the Product equal
************ (within Net Sales Payment No. 6), then the Net Sales Payment due to
GTC within ************ after the end of such calendar year shall be equal to
************, or the sum of (i) Net Sales Payment No. 6, or ************,
(ii) Net Sales Payment No. 5, or ************, (iii) Net Sales Payment No. 4, or
************, (iv) Net Sales Payment No. 3, or ************ and (v) Net Sales
Payment No. 2, or ************.

 

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8.4 Quarterly Reports. Within ************ after the end of each calendar
quarter ending each March 31, June 30, September 30 and December 31 during the
Term, beginning with the first calendar quarter after Ovation’s receipt of
Approval for the HD Indication, Ovation shall provide to GTC a report (a
“Quarterly Report”) including the following information for such calendar
quarter:

(a) the aggregate amount of the Royalty Payments accrued to GTC for such
calendar quarter;

(b) the Units, gross Commercial Sales and Net Sales of Product accrued during
such calendar quarter; and

(c) the amount and basis for all deductions taken in the calculation of Net
Sales for such calendar quarter.

Each Quarterly Report shall contain a statement by the chief financial officer
of Ovation on behalf of Ovation that the contents of such Quarterly Report are,
to Ovation’s knowledge, true, correct and complete.

8.5 Ovation’s Accounting Books and Records; Audits. Ovation shall keep, and
shall require its Affiliates and sublicensees to keep, complete and accurate
accounting books and records, including records containing data reasonably
required for the computation and verification of payments due and payable to GTC
under Sections 8.2 and 8.3 hereof. Ovation shall permit GTC access to such books
and records upon reasonable notice to Ovation during business hours for
inspection by an independent certified accountant selected by GTC and reasonably
acceptable to Ovation, for the sole purpose of verifying the amount of payments
due and payable to GTC hereunder. GTC shall not be entitled to conduct any such
inspection more than ************ during the Term of this Agreement. GTC shall
be responsible for all expenses of each such inspection; provided, however, that
if any such inspection reveals an underpayment to GTC of at least ************
of the amount due to GTC, and an independent auditor conducts such inspection or
verifies the conclusions of such inspection made by GTC, then Ovation shall pay
all reasonable and documented expenses of such inspection, including, without
limitation, the reasonable and documented expenses incurred in connection with
the verification by an independent auditor of the conclusions of the inspection
by GTC auditors, if applicable. The amount of any such underpayment, together
with the expenses of such inspection, shall be due and payable by Ovation to GTC
within ************ after Ovation’s receipt of the written report of such
independent auditor with respect to such matters.

8.6 GTC’s Accounting Books and Records; Audits. GTC and ATIII LLC shall keep,
and shall require their respective Affiliates to keep, complete and accurate
accounting books and records, including, without limitation, records containing
data reasonably required for the computation and verification of its Cost of
Goods of the Product. GTC and ATIII LLC shall permit Ovation access to such
books and records upon reasonable notice to GTC or ATIII LLC, as applicable,
during business hours for inspection by an independent certified accountant
selected by Ovation and reasonably acceptable to GTC and ATIII LLC, for the sole
purpose of

 

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verifying the Cost of Goods of the Product. Ovation shall not be entitled to
conduct any such inspection more than ************ during the term of the Supply
Agreement. Ovation shall be responsible for all expenses of each such
inspection; provided, however, that if any such inspection reveals a deviation
at least ************ of the Cost of Goods previously stated by GTC, and an
independent auditor conducts such inspection or verifies the conclusions of such
inspection made by Ovation, then GTC shall pay all reasonable and documented
expenses of such inspection, including, without limitation, the reasonable and
documented expenses incurred in connection with the verification by an
independent auditor of the conclusions of the inspection by Ovation auditors, if
applicable. The amount of any adjustments due to Ovation as a result of such
deviation, together with the expenses of such inspection, shall be due and
payable by GTC to Ovation within ************ after GTC’s receipt of the written
report of such independent auditor with respect to such matters.

8.7 Payment Terms. All payments to be made under this Agreement shall be payable
by certified or bank check or by wire transfer of immediately available funds to
such bank account(s) as shall be designated by the Party receiving such payment.

8.8 Late Payments. In the event that any payment under this Article 8 is not
made within ************ after such payment is due and payable, interest shall
accrue on such late payment from the date on which such amount became due at a
rate per annum equal to ************ per annum, or at a lower rate if so
required by Applicable Law, calculated on the number of days that lapse until
such amount is paid in full; provided, however, that if such late payment has
been delayed due to a dispute raised by a Party in good faith and such dispute
is the subject of any dispute resolution process set forth in this Agreement,
interest shall be calculated based on the number of days payment is delinquent
starting on the day after such dispute is resolved pursuant to the terms of this
Agreement.

8.9 Withholding of Taxes. Any withholding of taxes levied by tax authorities on
the payments hereunder shall be deducted by Ovation from the sums otherwise
payable by it hereunder for payment to the proper tax authorities on behalf of
GTC, and shall be borne by GTC. Ovation agrees to cooperate with GTC in the
event that GTC claims exemption from such withholding or seeks deductions under
any double taxation or other similar treaty or agreement from time to time in
force, such cooperation to consist of providing receipts of payment of such
withheld tax, tax certificates, affidavits or other documents reasonably
available to Ovation.

ARTICLE 9

TRADEMARKS

9.1 Maintenance and Defense of Licensed Trademarks. GTC shall be responsible for
seeking, maintaining and defending the Licensed Trademarks at GTC’s sole
expense. Ovation shall, as soon as practicable after receiving notice of any
potential infringement of the Licensed Trademarks in the Territory, inform GTC
of any such potential infringement. GTC shall, as soon as practicable after
receiving notice of any potential infringement of the Purchased Trademarks,
inform Ovation of any such potential infringement.

 

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9.2 Use of Licensed Trademarks. Ovation shall have the right to use the Licensed
Trademarks for the Territory in accordance with Section 2.1 hereof; provided,
however, that, subject to Section 15.4(b), such use shall be limited to the
marketing, sale and distribution of the Product in the Territory during the Term
and during the term of the Supply Agreement. Ovation shall properly designate
the Licensed Trademarks and the name of GTC in a manner approved in advance in
writing by GTC (such approval not to be unreasonably withheld or delayed) on the
packaging of the final Product, to the extent required or permissible by the
applicable Regulatory Approvals. To the extent approved by the applicable
Regulatory Authorities, use of the Licensed Trademarks shall indicate that the
Licensed Trademarks are owned and/or registered by GTC (i.e. by using the
appropriate TM or ® symbol or by stating that the Licensed Trademarks are owned
by GTC). All rights arising from the use of the Licensed Trademarks in the
Territory shall inure solely to GTC’s benefit, it being understood that nothing
contained herein shall give Ovation any ownership right or interest in the
Licensed Trademarks.

9.3 Product Trade Dress. Ovation may include its company name, trademarks and
associated logos on all Product packaging and promotional materials for the
Territory.

ARTICLE 10

INTELLECTUAL PROPERTY RIGHTS

10.1 Acknowledgement. The Parties acknowledge that, pursuant to Article 2
hereof, at the Closing and thereafter, (i) the Purchased Property (including,
without limitation, the Purchased Patent Right) shall be owned by Ovation,
(ii) the Purchased Property shall be licensed to GTC pursuant to the terms of
the GTC License, and (iii) the Licensed Property (including, without limitation,
the Licensed Patent Rights), shall be licensed by Ovation pursuant to the terms
of the License.

10.2 Ownership of Inventions. All right, title and interest in and to all
Inventions developed solely by GTC hereunder shall be owned by GTC; all right,
title and interest in all Inventions developed solely by Ovation hereunder shall
be owned by Ovation; and all right, title and interest in all Inventions
developed jointly by GTC and Ovation hereunder shall be jointly owned by the
Parties. Each of Ovation and GTC shall promptly disclose to other Party the
making, conception or reduction to practice of Inventions by its employees or
others acting on behalf of such Party in the course of performing its
obligations hereunder. Ovation may, at its election, sublicense any Inventions
owned jointly by GTC and Ovation in the Territory and GTC may, at its election,
exploit or license any Inventions owned jointly by GTC and Ovation outside the
Field and/or outside the Territory.

10.3 Cooperation of Employees. Each Party agrees that all officers, employees,
independent contractors, agents or others acting on its behalf in performing its
obligations under this Agreement shall be obligated under a binding written
agreement to assign to such Party, or such other entity as such Party shall
direct, all Inventions made or conceived by such employee or other person. In
the case of non-employees working for other companies or institutions on behalf
of either Party, such Party, as applicable, shall obtain licenses to the fullest
extent available for all Inventions made by such non-employees on behalf of such
Party, as applicable, in accordance with the policies of said company or
institution. The Parties shall enforce such agreements (including, where
appropriate, by legal action), taking into account, among other things, the
commercial value of any such Inventions.

 

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10.4 Filing, Prosecution and Maintenance. Each Party shall be responsible for
the filing, prosecution and maintenance of all patent applications and patents
which make up its Patent Rights and which relate to the Program. Each Party
agrees to file and prosecute patent applications and maintain the Patent Rights
which it owns and which relate to the Program. Each Party shall consult with and
keep the other Parties fully informed of important issues relating to the
preparation, filing, prosecution and maintenance of such patent applications and
patents, and shall furnish to the other Party copies of documents relevant to
such preparation, filing, prosecution or maintenance in sufficient time prior to
filing such document or making any payment due there under to allow for review
and comment by the other Party and, to the extent possible in the reasonable
exercise of its discretion, the filing Party shall incorporate all such
comments. With respect to Inventions, if any, jointly owned by GTC and Ovation,
the Parties shall determine, through the Joint Steering Committee, allocation of
responsibilities regarding preparation, filing, prosecution and maintenance of
such patent applications and/or patents with respect to such Inventions. The
Parties will confer and cooperate in good faith through the Joint Steering
Committee with respect to the prosecution and maintenance of Patent Rights that
claim Inventions developed jointly by GTC and Ovation.

10.5 Cooperation. Each Party shall make available to the other Party (or to the
other Party’s authorized attorneys, agents or representatives) its employees,
agents or consultants to the extent necessary or appropriate to enable the
appropriate Party to prepare, file, prosecute and maintain patent applications
and resulting patents with respect to Inventions owned by a Party for reasonable
periods of time sufficient for such Party to obtain the assistance needed from
such personnel. Each Party shall sign or cause to have signed all documents
relating to said patent applications or patents where appropriate at no charge
to the other Party.

10.6 Notification. Each Party shall promptly notify the other Party of the
issuance of each patent included within the Patent Rights for which the
notifying Party or one of its Affiliates is responsible, and shall provide the
date of issue and patent number of each such patent.

10.7 No Other Technology Rights. Except as otherwise expressly provided in this
Agreement (including, without limitation, Article 2 hereof), under no
circumstances shall a Party hereto, as a result of this Agreement, obtain any
ownership interest in or other rights to the patent rights or technology of the
other Party, including, without limitation, items owned, controlled or developed
by the other Party or transferred by the other Party to said Party at any time
pursuant to this Agreement. The Parties agree and acknowledge that other than
the License or as otherwise set forth in this Agreement, this Agreement does not
grant either Party any license or other right in the rights of the other Party.

 

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10.8 Enforcement of Patent Rights; Defense of Infringement Actions. Each Party
shall promptly notify the other Party in writing of any actual or threatened
Third Party infringement in the Field within or outside of the Territory of a
Patent Right of GTC, a Patent Right of Ovation or a Patent Right jointly owned
by GTC and Ovation related to the Program, including infringement arising from
the manufacture, use or sale of a product competitive with a Product that is
being developed or commercialized by GTC or Ovation (“Competitive Product
Infringement”).

(a) Infringement of Licensed Patent Rights and GTC’s Inventions. GTC will have
the first right, but not the obligation, to bring, at its own expense and in its
sole control, an appropriate action against a Third Party engaged in any
Competitive Product Infringement of a Licensed Patent Right or an Invention
owned by GTC. If GTC does not bring such action within forty (40) days of
notification thereof between the Parties pursuant to this Section 10.8, Ovation
will have the right, but not the obligation, to bring at Ovation’s expense and
in its sole control and name GTC as a plaintiff, such appropriate action. GTC
will have the right, but not the obligation, to bring, at its own expense and in
its sole control, an appropriate action against a third party engaged in any
infringement of a Licensed Patent Right or an Invention owned by GTC that is not
a Competitive Product Infringement or otherwise is not included in the Licensed
Property. The Party not bringing an action under this Section 10.8 will be
entitled to separate representation in such matter by counsel of its own choice
and at its own expense, and will cooperate fully with the Party bringing such
action, but in any event shall a Party not bringing an action under this
Section 10.8(a) shall have no control over conduct of the litigation. In the
event that either Party brings an action under this Section 10.8(a), and such
Party is awarded damages for such action, Ovation shall receive a portion of
such damages equal to the damages suffered by Ovation as a result of such
infringement, and GTC shall receive the remainder of such damages.

(b) Non-competitive Infringement of Jointly-Owned Patent Rights. With respect to
Third Party infringement of any Patent jointly owned by GTC and Ovation which is
not a Competitive Product Infringement, the Parties will confer and take such
action, and allocate expenses and recoveries, as shall be agreed upon by the
Parties in good faith.

(c) Infringement of Purchased Patent Rights and Ovation’s and Jointly-Owned
Inventions. Ovation will have the first right, but not the obligation, to bring,
at its own expense and in its sole control, an appropriate action against a
Third Party engaged in any Competitive Product Infringement of a Purchased
Patent Right or an Invention owned by Ovation or jointly owned by GTC and
Ovation. If Ovation does not bring such action within ninety (90) days of
notification thereof between the Parties pursuant to this Section 10.8, GTC will
have the right, but not the obligation, to bring at GTC’s expense and in its
sole control, such appropriate action. Ovation will have the right, but not the
obligation, to bring, at its own expense and in its sole control, an appropriate
action against a third party engaged in any infringement of a Patent Right owned
by Ovation that is not a Competitive Product Infringement. The Party not
bringing an action under this Section 10.8 will be entitled to separate
representation in such matter by counsel of its own choice and at its own
expense, and will cooperate fully with the Party bringing such action.

 

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(d) Settlement Restrictions. Neither Party shall settle a claim brought under
this Section 10.8 involving a Purchased Patent Right, a Licensed Patent Right or
an Invention owned by GTC, Ovation or jointly owned by GTC and Ovation that
would limit or restrict the ability of Ovation to sell the Product in the
Territory without the prior written consent of Ovation. Ovation shall not,
without the prior written consent of GTC, settle any claim brought under this
Section 10.8 involving a Patent Right which is not a Licensed Patent Right or a
Purchased Patent Right or an Invention owned by GTC that would (i) limit or
restrict GTC’s ability to sell the Product outside the Territory, (ii) permit a
Third Party to sell GTC’s other products or products that infringe Licensed
Patent Rights or an Invention owned by GTC, or (iii) result in an admission of
invalidity or unenforceability of any Licensed Patent Rights or an Invention
owned by GTC.

ARTICLE 11

GENERAL REPRESENTATIONS AND WARRANTIES

11.1 Mutual Representations and Warranties. As of the Signing Date (and the
Effective Date, as the case may be), GTC and ATIII LLC, jointly and severally,
represent and warrant to Ovation, and Ovation represents and warrants to GTC and
ATIII LLC, that:

(a) it has the authority and right to enter into and perform this Agreement;

(b) Except for approvals required under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the “HSR Act”), and those approvals set
forth on Schedule 5 attached hereto, no authorization, consent or approval of,
or any filing or registration with, any governmental authority or regulatory
body or any other Third Party (other than as contemplated by this Agreement) is
required for the execution, delivery and performance of this Agreement;

(c) the execution, delivery and performance of this Agreement will not conflict
with the terms of any other agreement to which such Party is or may become a
party or by which it is or becomes bound; and

(d) this Agreement is a legal and valid obligation binding upon such Party and
is enforceable against such Party in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent transfer and conveyance,
reorganization, receivership, moratorium and other similar laws (including
judicially developed doctrines with respect to such laws) affecting the rights
and remedies of creditors generally).

11.2 GTC’s General Representations and Warranties. As of the Signing Date (and
the Effective Date, as the case may be), GTC and ATIII LLC, jointly and
severally, represent and warrant to Ovation that:

(a) the manufacture, use, development, sale or importation of the Product in the
Territory (including a Sale or Commercial Sale) or will not infringe the
intellectual property rights of any Third Parties;

 

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(b) neither GTC or ATIII LLC, nor any of their respective Affiliates, is or has
been a party to any agreement with any federal, state, local or foreign
government or governmental agency pursuant to which any federal, state, local or
foreign government or governmental agency provided funding for the development
of the Product such that any federal, state, local or foreign government or
governmental agency has any intellectual property rights with respect to the
Product;

(c) GTC has made available to Ovation true and correct copies of all of the
following information in its possession or control to the extent related to the
development, manufacture and commercialization of the Product as conducted prior
to the Signing Date (and the Effective Date, as the case may be): (x) Adverse
Event reports; (y) clinical study reports and material study data; and
(z) inspection reports, notices of adverse findings, warning letters and
regulatory approval filings; and

(d) all of the studies, tests and pre-clinical and clinical trials of the
Product conducted prior to, or being conducted as of, the Signing Date and the
Effective Date have been and are being conducted in accordance with all
Applicable Laws and regulations in all material respects.

11.3 GTC’s Trademark Representations and Warranties. GTC and ATIII LLC hereby
jointly and severally represent and warrant to Ovation as of the Signing Date
(and the Effective Date, as the case may be) that:

(a) there is no Third Party using or infringing any of the Trademarks (whether
Purchased Trademarks or Licensed Trademarks) in derogation of the rights granted
to Ovation in this Agreement (including, without limitation, the License);

(b) neither GTC nor ATIII LLC has received notice of (or is otherwise aware of)
any interference action or litigation pending or any communication which
expressly threatens an interference action, or other litigation before any
trademark office, court or any other governmental entity in the Territory with
respect to any of the Trademarks (whether Purchased Trademarks or Licensed
Trademarks);

(c) the Trademarks listed on Schedule 2 attached hereto are the only Trademarks
owned, held, controlled, licensed or otherwise used (or intended to be used) by
GTC, ATIII LLC and their respective Affiliates with respect to the Product in
the Territory;

(d) GTC has good and marketable title, free and clear of all Liens, to all of
the Purchased Trademarks; has all rights necessary to use the Licensed
Trademarks and to license or sublicense the Licensed Trademarks to Ovation under
the License; no claim by any Third Party contesting the validity,
enforceability, use or ownership of the Trademarks (whether Purchased Trademarks
or Licensed Trademarks) has been made or is currently outstanding or, to GTC’s
Knowledge, threatened, and there is no reasonable basis for any such claim; and
GTC has not infringed, misappropriated or otherwise violated any trademark of
any third parties by registering or using the Trademarks (whether Purchased
Trademarks or Licensed Trademarks).

 

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11.4 GTC’s Intellectual Property Representations and Warranties. GTC and ATIII
LLC hereby jointly and severally represent and warrant to Ovation as of the
Signing Date (and the Effective Date, as the case may be) that:

(a) neither the manufacture, use or Sale of the Product or the practice of any
of the inventions included in the GTC Intellectual Property Rights, nor the use
of the Technical Information by Ovation as contemplated by this Agreement,
infringes upon any Third Party’s intellectual property rights or constitutes a
misappropriation of a Third Party’s trade secrets or other intellectual property
rights;

(b) to GTC’s Knowledge, no Third Party is using or infringing, nor has any Third
Party used or infringed, any of the GTC Intellectual Property Rights, and no
Third Party is misappropriating or using, nor has any Third Party
misappropriated or infringed, any of the Technical Information in derogation of
the rights granted to Ovation in this Agreement;

(c) GTC has obtained the assignment or exclusive licenses of all interests and
all rights of any and all Third Parties (including, but not limited to,
employees) with respect to the GTC Intellectual Property Rights. GTC has
obtained the assignment or exclusive licenses of all interests and all rights of
any and all Third Parties (including, but not limited to employees) with respect
to the Technical Information;

(d) GTC has not received notice of any interference action or litigation pending
or any communication which, to GTC’s Knowledge, expressly threatens an
interference action or other litigation before any patent and trademark office,
court, or any other governmental entity in the Territory or outside the
Territory in regard to the GTC Intellectual Property Rights;

(e) the GTC Intellectual Property Rights and the patent applications listed on
Schedule 2 are the only intellectual property rights owned, held, controlled,
licensed or otherwise used (or anticipated to be used) by GTC, ATIII LLC and
their respective Affiliates covering the Product in the Territory;

(f) that GTC has fully informed Ovation of any material facts and information of
material significance regarding the Product and the Program, that the
information provided to Ovation during due diligence is in all material respects
true, accurate and complete and not misleading, and that has not omitted or
failed to disclose any material fact or information of material significance
regarding the Product and the Program; and

(g) GTC has good and marketable title, free and clear of all Liens, to all of
the Purchased Intellectual Property, and owns or holds, free and clear of all
Liens, a valid license or sublicense (with the right to sublicense to Ovation in
accordance with the terms of this Agreement) in, to and under all of the
Licensed Intellectual Property.

 

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ARTICLE 12

INDEMNIFICATION

12.1 Indemnification by GTC. GTC and ATIII LLC shall jointly and severally
defend, indemnify and hold Ovation, its Affiliates, and their respective
directors, officers, employees, shareholders and agents (collectively, the
“Ovation Indemnified Parties”) harmless from and against all liabilities,
penalties, costs, losses, damages and expenses including, without limitation,
reasonable attorneys’ fees and expenses (including any of the foregoing to the
extent actually paid by such indemnitees in connection with a Third Party Claim,
which the Parties hereby acknowledge and agree do not constitute special,
indirect, consequential, punitive, exemplary or incidental damages, in all cases
subject to Section 12.3) (collectively, “Liabilities”), to the extent incurred
and arising out of or resulting from:

(a) any misrepresentation, breach of warranty or non-fulfillment of or failure
to perform any agreement or covenant made under this Agreement or the Supply
Agreement by GTC, ATIII LLC and/or their respective Affiliates;

(b) the death of or injury to any person or any damage to or loss of property
arising out of or resulting from the quality, condition, manufacture or use of
the Product purchased by Ovation from GTC, except to the extent that the event
which is the proximate cause of such death, injury, damage or loss is due to the
negligence, willful misconduct or fraud of Ovation;

(c) any act or omission of GTC, ATIII LLC or their respective Affiliates,
distributors, wholesalers, sublicensees or agents in the manufacture, storage,
transportation of the Product or any other improper activity conducted by GTC,
ATIII LLC or their respective Affiliates under this Agreement or the Supply
Agreement which is the proximate cause of injury, death or property damage to a
Third Party;

(d) any act or omission of GTC, ATIII LLC or their respective Affiliates in
connection with interactions and communications with governmental authorities;

(e) the manufacture of the Product in a manner which infringes on the
intellectual property rights of a Third Party; or

(f) any liability, debt or obligation of GTC or ATIII LLC of any kind or nature
whatsoever arising out of, relating to, resulting from or caused by any
transaction, status, event, condition, occurrence or situation relating to,
arising out of or in connection with the business of GTC or ATIII LLC existing,
arising or occurring prior to the Effective Date or outside the Territory,
including, without limitation, any Product sold, distributed or used prior to
the Effective Date, outside the Territory or otherwise outside the scope of this
Agreement.

12.2 Indemnification by Ovation. Ovation shall defend, indemnify and hold GTC,
its Affiliates, and their respective directors, officers, employees,
shareholders and agents (the “GTC Indemnified Parties”), harmless from and
against all Liabilities to the extent incurred and arising out of or resulting
from:

(a) any misrepresentation , breach of warranty or non-fulfillment of or failure
to perform any agreement or covenant under this Agreement or the Supply
Agreement by Ovation or its Affiliates;

 

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(b) the death of or injury to any person or any damage to or loss of property
arising out of or resulting from marketing, distribution and Sale of the Product
purchased by Ovation from GTC, except to the extent that the event which is the
proximate cause of such death, injury, damage or loss is due to the act or
omission of GTC, ATIII LLC or any of their respective Affiliates;

(c) any negligence, willful misconduct or fraud of Ovation or its Affiliates,
distributors, wholesalers, sublicensees or agents in the promotion, marketing,
distribution and Sale of the Product or any other improper activity conducted by
Ovation or its Affiliates under this Agreement which is the proximate cause of
injury, death or property damage to a Third Party;

(d) any negligence, willful misconduct or fraud of Ovation or its Affiliates in
connection with interactions and communications with governmental authorities;
or

(e) the use or sale of the Product in the Territory, or the manufacture of the
Product by Ovation, in a manner which infringes on the intellectual property
rights of a Third Party unless such event is caused by an act or omission of
GTC, ATIII LLC or any of their respective Affiliates.

12.3 Defense of Third Party Claims. In the event that, subsequent to the
Closing, any party entitled to indemnification under this Agreement (each, an
“Indemnified Party”) receives notice of the assertion of any claim or of the
commencement of any action or proceeding by any Person who is not a Party or an
Affiliate of a Party to this Agreement (a “Third Party Claim”) against such
Indemnified Party, with respect to which a party to this Agreement is or may be
required to provide indemnification under this Agreement (an “Indemnifying
Party”), the Indemnified Party shall give written notice to the Indemnifying
Party as promptly as practicable after learning of such Third Party Claim
(including, without limitation, any claims asserted or made by any governmental
authority having jurisdiction over such claim). To the extent the Indemnifying
Party is so entitled pursuant to the terms of this Agreement (including, without
limitation, Section 10.8 hereof), but subject to Sections 12.1 and 12.2, the
Indemnified Party shall give the Indemnifying Party the opportunity to defend,
negotiate and settle such claims. The Indemnified Party shall give the
Indemnifying Party commercially reasonable assistance in the defense of such
claims, to the extent required by the terms of this Agreement. The Indemnifying
Party shall not be entitled to control the defense or settlement of any claim if
(i) the claim for indemnification is with respect to a criminal proceeding,
action, indictment, allegation or investigation, (ii) the Indemnified Party has
been advised by counsel that a reasonable likelihood exists of a conflict of
interest between the Indemnifying Party and the Indemnified Party, (iii) the
Indemnifying Party has failed or is failing to vigorously prosecute or defend
such claim, (iv) the claim seeks an injunction or other equitable relief against
the Indemnified Party, Ovation or any Affiliate of Ovation, or (v) defense

 

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or resolution of the claim could affect the liability of Ovation or any of its
Affiliates for taxes. Neither Party may settle a Third Party Claim without the
prior written consent of the other Party if such settlement would impose any
monetary obligation on the other Party or requires the other Party to submit to
an injunction. Any payment made by a Party to settle any such Third Party Claim
shall be at its own cost and expense.

12.4 Other Claims. Any claim by an Indemnified Party for indemnification other
than indemnification against a Third Party Claim will be asserted by giving the
Indemnifying Party reasonably prompt written notice thereof, and the
Indemnifying Party will have a period of thirty (30) calendar days within which
to satisfy such claims. If the Indemnifying Party does not so respond within
such thirty (30) calendar day period, the Indemnifying Party will be deemed to
have accepted such claim.

12.5 Failure to Give Timely Notice. A failure by an Indemnified Party to give
timely, complete or accurate notice as provided in this Article 11 will not
affect the rights or obligations of any Party hereunder except and only to the
extent that, as a result of such failure, any party entitled to receive such
notice was deprived of its right to recover any payment under its applicable
insurance coverage or was otherwise directly and materially damaged as a result
of such failure to give timely notice.

12.6 Insurance. Each Party shall, during the term of this Agreement, maintain
commercially reasonable amounts of insurance or self-insurance given the size,
nature and scope of its business from a reputable insurance carrier to cover
against liability risks, including Product liability insurance for the benefit
of the other Party. Each Party shall provide the other Party with evidence of
such insurance or self-insurance upon request. Notwithstanding the generality of
the foregoing, with respect to Product to be manufactured and supplied to
Ovation and its Affiliates under this Agreement and the Supply Agreement
(including, but not limited to, Product to be supplied to Ovation and its
Affiliates under Section 4.7 hereof), GTC shall maintain, and cause its
Affiliates and subcontractors to maintain, product liability insurance of not
less than ************ with a reputable insurance carrier during the Term of
this Agreement and during the term of the Supply Agreement.

12.7 Payments. Any payment required to be made under this Article 11 shall be
made by the Indemnifying Party within ************ after the resolution of the
claim by any Indemnified Party hereunder pursuant to which such Indemnified
Party is entitled to such payment. Any indemnification payments not made within
such five (5) Business Day period shall include interest at the rate of
************ per annum from the due date of such payment. Interest on such
unpaid amount shall be compounded quarterly and payable on demand. The
Indemnifying Party shall reimburse the Indemnified Party for any and all costs
or expenses of any nature or kind whatsoever (including, but not limited to, all
attorneys’ fees) incurred in seeking to collect any payments due under this
Section 12.7.

12.8 Set-Off Rights. In addition to any other remedy available to Ovation, in
the event that GTC, ATIII LLC or any of their Affiliates fail to indemnify an
Ovation Indemnified Party under the provisions of this Agreement or otherwise
breach their respective agreements

 

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with or obligations to Ovation under this Agreement or the Supply Agreement,
then Ovation shall have the right to set off such amounts against any payment(s)
then due or to become due from Ovation (or any Affiliate of Ovation) to GTC,
ATIII LLC or any of their respective Affiliates.

ARTICLE 13

CONFIDENTIALITY

13.1 Confidentiality. During the Term of this Agreement and for a period of
************ thereafter, each Party agrees and shall undertake to keep the terms
and conditions of this Agreement as well as any information regarding the
Product, including all Technical Information, or otherwise received under this
Agreement confidential (collectively, the “Confidential Information”) and shall
refrain from disclosing such Confidential Information to any Third Party, unless
(and to the extent that):

(a) such Party is compelled to disclose such Confidential Information by
judicial or administrative process or, in the opinion of such Party’s counsel,
by the requirements of Applicable Law or regulations (including Securities and
Exchange Commission rules and regulations, e.g. filings on Form 8-K). In such
event, the Party seeking to disclose such Confidential Information shall give
the other Party reasonable advance notice of such contemplated disclosure in
order to permit the other Party to seek an appropriate protective order or to
attempt to reach mutual agreement regarding the portions of such Confidential
Information that should be subject to a request for confidential treatment;

(b) such Confidential Information is required to be disclosed by either Party in
order to carry out its rights or obligations hereunder;

(c) such Confidential Information is in the public domain through no fault of
the Party to which it is furnished, including through prior public disclosure
made in accordance with this Article 13;

(d) such Confidential Information is independently developed by the Party to
which it is furnished without use of, reference to, or reliance upon, the
furnishing Party’s information, as evidenced by written documentation; or

(e) such Confidential Information is later lawfully acquired from other sources
(without obligations of confidentiality) by the Party hereto to which it is
furnished.

Notwithstanding the foregoing, each Party may issue its own press release
regarding the transactions contemplated hereby, the text of which first shall
have been reviewed and approved by the other Party (such approval not to be
unreasonably withheld or delayed), provided that such press release shall not
disclose any Confidential Information of either Party. Each Party also agrees
not to use any Confidential Information of the other Party obtained by it in
connection with this Agreement for any purpose other than the to fulfill its
obligations hereunder. Each Party shall have sole and exclusive responsibility
for its own press release and compliance with all Applicable Laws in connection
with such press release, irrespective of the fact that the other Party reviewed
and approved the press release pursuant to this Section 13.1.

 

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ARTICLE 14

CLOSING

14.1 Closing. The closing of the transactions contemplated by this Agreement
(the “Closing”) shall take place within five (5) Business Days after all of the
Closing Conditions set forth in Section 14.4 having been met or waived by the
appropriate Party, unless the Parties agree otherwise (such date, the “Effective
Date”), and the Parties shall endeavor in good faith to satisfy all Closing
Conditions (excluding any consents or approvals required under the HSR Act)
within thirty (30) days of the Signing Date. The Closing shall take place at the
offices of Katten Muchin Rosenman LLP at 525 West Monroe Street, Suite 1900,
Chicago, Illinois 60661-3693. If agreed to by the parties, the Closing may take
place remotely via telephone, facsimile transmission and/or email.

14.2 Closing Deliveries of GTC and ATIII LLC. At the Closing, GTC and ATIII LLC
shall deliver to Ovation the following:

(a) the Supply Agreement, duly executed by GTC and ATIII LLC;

(b) the Quality Agreement, duly executed by GTC and ATIII LLC;

(c) the Pharmacovigilance Procedures Agreement, duly executed by GTC and ATIII
LLC;

(d) the Herd Management Agreement, duly executed by GTC;

(e) a certificate from the Secretary of each of GTC and ATIII LLC attesting to
the resolutions of the board of directors, board of managers or similar
governing body of GTC and ATIII LLC, as applicable, authorizing the consummation
by GTC and ATIII LLC, as applicable, of the transactions contemplated hereby,
and certifying that such written consents have not been rescinded or amended as
of the Signing Date;

(f) the HD BLA Assignment Documents, each duly executed by GTC and/or ATIII, as
applicable;

(g) a Bill of Sale and Assignment in form satisfactory to Ovation (the “Bill of
Sale”), duly executed and acknowledged by GTC and/or ATIII LLC, conveying to
Ovation the Purchased Property, free and clear of all Liens;

(h) an Assignment of Patents in form satisfactory to Ovation (the “Patent
Assignment”), duly executed and acknowledged by GTC and/or ATIII LLC, conveying
to Ovation the Purchased Patent Rights, free and clear of all Liens;

 

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(i) an Assignment of Trademarks in form satisfactory to Ovation (the “Trademark
Assignment”), duly executed and acknowledged by GTC and/or ATIII LLC, conveying
to Ovation the Purchased Trademarks, free and clear of all Liens;

(j) to the extent required, duly authorized and executed releases of any Liens
of Third Parties on the Purchased Property; and

(k) such other documents as may be reasonably requested by Ovation or its
counsel.

14.3 Closing Deliveries of Ovation. At the Closing, Ovation shall deliver to GTC
the following:

(a) the Closing Payment, in accordance with Section 8.1(a);

(b) the Supply Agreement, duly executed by Ovation;

(c) the Quality Agreement, duly executed by Ovation;

(d) the Pharmacovigilance Procedures Agreement, duly executed by Ovation;

(e) the Herd Management Agreement, duly executed by Ovation; and

(f) such other documents as may be reasonably requested by GTC or its counsel.

14.4 Covenants of the Parties Prior to the Closing.

(a) Covenants of GTC, ATIII LLC and Ovation. From and after the Signing Date
until the Closing (or the earlier termination of this Agreement in accordance
with Section 14.6), GTC, ATIII LLC and Ovation shall perform the following
covenants:

(i) Subject to the terms and conditions hereof, each Party will use commercially
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable under all Applicable
Laws and regulations to consummate the transactions contemplated by this
Agreement as promptly as practicable. Ovation, GTC and ATIII LLC shall each
furnish to one another and to one another’s counsel all such information as may
reasonably be required in order to accomplish the foregoing actions.

(ii) GTC, ATIII LLC and Ovation shall cooperate with one another in
(i) determining whether any other action by or in respect of, or filing with,
any governmental entity is required, or any actions, consents, approvals or
waivers are required to be obtained from parties to any material contracts, in
connection with the consummation of the transactions contemplated hereby and
(ii) seeking any such other actions, consents, approvals or waivers or making
any such filings, furnishing

 

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information required in connection therewith and seeking promptly to obtain any
such actions, consents, approvals or waivers. Without limiting the generality of
the foregoing, GTC, ATIII LLC and Ovation shall each file any documents that it
may be required to file in connection with the transactions contemplated by this
Agreement with the Federal Trade Commission and the Antitrust Division of the
United States Department of Justice under the HSR Act within ten (10) Business
Days after the Signing Date, shall each use its diligent efforts to obtain an
early termination of the applicable waiting period and shall each make any
further filings pursuant thereto that may be necessary, proper or advisable. No
Party shall be required to provide to the other Parties confidential information
regarding its Affiliates included in any filing under the HSR Act. Ovation shall
pay the costs of filing fees under the HSR Act.

(iii) GTC, ATIII LLC and Ovation shall promptly notify the other Parties of:
(i) any notice or other communication from any person or entity alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement; (ii) any notice or other
communication from any governmental entity in connection with the transactions
contemplated by this Agreement; (iii) any actions, suits, claims, investigations
or proceedings commenced or, to the knowledge of GTC, ATIII LLC or Ovation, as
the case may be, threatened against, relating to or involving or otherwise
affecting a Party which relate to the consummation of the transactions
contemplated by this Agreement; and (iv) any action, event or occurrence that
would constitute a material breach by such party of any representation,
warranty, covenant or agreement set forth in this Agreement.

(b) Covenants of GTC and ATIII LLC. From and after the Signing Date and until
Closing (or earlier termination of this Agreement in accordance with
Section 14.6), GTC and ATIII LLC shall perform the following covenants:

(i) Ordinary Course. GTC and ATIII LLC agree that, except (i) as expressly
contemplated or permitted by this Agreement, (ii) as required by Applicable Law
or regulation, or (iii) to the extent that Ovation shall otherwise consent in
writing, GTC and ATIII LLC (x) shall conduct its business with respect to the
Product in substantially the same manner as presently conducted and (y) shall
not have commenced or otherwise undergone the occurrence of an Insolvency Event.

(ii) Exclusivity. GTC and ATIII LLC agree that from and after the execution of
this Agreement it shall not, nor shall it give permission or authorize its
representatives to, and GTC and ATIII LLC shall each use its reasonable best
efforts to cause its representatives not to, directly or indirectly (i) solicit,
initiate or knowingly facilitate or encourage any inquiries regarding, or the
making of any proposal or offer that constitutes, a proposal or indication of
interest in, a transaction regarding the import, storage, packaging, labeling,
use, development, registration, sale or distribution of the Product within the
Territory or another transaction that is adverse or otherwise contrary to the
transactions contemplated by this Agreement (a “Competing Transaction”),
(ii) enter into, participate in, continue, or otherwise engage in, any
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negotiations regarding, or furnish to any Person any information with respect
to, or take any other action knowingly to facilitate any inquiries or the making
of any proposal that constitutes, or could be expected to lead to, any Competing
Transaction or (iii) enter into any agreement with respect to any Competing
Transaction.

14.5 Conditions to Closing.

(a) The obligations of GTC, ATIII LLC and Ovation to consummate the Closing are
subject to the satisfaction of the following conditions:

(i) any applicable waiting period under the HSR Act relating to the transactions
contemplated hereby shall have expired or been terminated; and

(ii) no judgment, injunction, order, decree or Applicable Law shall prohibit the
consummation of the transactions contemplated hereby, and no governmental entity
shall have commenced and not withdrawn any proceeding seeking to enjoin or
otherwise prohibit the consummation of the transactions contemplated hereby; and

(iii) the third party consents, if any, listed on Schedule 5 shall have been
obtained.

(b) The obligations of Ovation to consummate the Closing are subject to the
satisfaction of the following further conditions:

(i) each of GTC and ATIII LLC shall have performed in all respects all of its
covenants, agreements and obligations hereunder required to be performed by it
at or prior to Closing;

(ii) all representations and warranties of GTC and ATIII LLC contained herein
shall be true and correct in all respects as of the Effective Date, and Ovation
shall have received a certificate signed by a duly authorized officer of each of
GTC and ATIII LLC to the foregoing effect;

(iii) there shall have been no change or effect that (i) individually or when
taken together with all other changes or effects that have occurred prior to the
Effective Date is, or could reasonably be expected to be, materially adverse to
the development, marketing, distribution or sale of the Product within the
Territory, the prospects thereof, or the transactions contemplated hereby or
(ii) materially adversely affects the ability of Ovation to perform its
obligations under this Agreement or to consummate the transactions contemplated
hereby;

(iv) GTC and ATIII LLC shall have delivered to Ovation all closing deliveries
required by Section 14.2, each in a form reasonably satisfactory to Ovation;

(v) Ovation’s Board of Directors shall have approved this Agreement and the
transactions contemplated hereby; and

 

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(vi) Ovation’s lenders and financing sources shall have approved this Agreement
and the transactions contemplated hereby.

(c) The obligations of GTC and ATIII LLC to consummate the Closing are subject
to the satisfaction of the following further conditions:

(i) Ovation shall have performed in all respects all of its covenants,
agreements and obligations hereunder required to be performed by it at or prior
to the Closing; and

(ii) Ovation shall have delivered to GTC all closing deliveries required by
Section 14.3, each in a form reasonably satisfactory to GTC.

14.6 Termination Prior to Closing.

(a) Notwithstanding anything to the contrary in this Agreement, this Agreement
may be terminated and the transactions contemplated hereby abandoned at any time
prior to the Closing:

(i) by mutual written consent of GTC, ATIII LLC and Ovation;

(ii) by GTC if any of the conditions set forth in Sections 14.5(a) or 14.5(c)
become incapable of fulfilment and have not been expressly waived by GTC;

(iii) by Ovation if any of the conditions set forth in Sections 14.5(a) or
14.5(b) become incapable of fulfilment and have not been expressly waived by
Ovation; or

(iv) by GTC or Ovation if the Closing does not occur on or prior to
September 30, 2008;

provided, however, that the Party seeking termination pursuant to clauses (ii),
(iii) or (iv) is not in breach in any material respect of any of its
representations, warranties, covenants or agreements contained in this
Agreement.

(b) In the event of termination by a Party pursuant to this Section 14.6,
written notice thereof shall be given to the other Parties and the transactions
contemplated by this Agreement shall be terminated, without further action by
any Party. If the transactions contemplated by this Agreement are terminated as
provided herein:

(i) each Party shall return to the other Parties all documents and other
materials received from such Party (or Parties) relating to the Product and to
the transactions contemplated hereby, whether obtained before or after the
Signing Date; and

 

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(ii) all confidential information received by a Party with respect to the other
Parties or the Product shall be treated in accordance with Article 13 hereof,
which will remain in full force and effect notwithstanding the termination of
this Agreement.

(c) If this Agreement is terminated and the transactions contemplated hereby are
abandoned prior to the Closing, this Agreement shall become null and void and of
no further force and effect, except as otherwise provided in Section 14.6(b);
provided, however, that nothing in this Section 14.6 shall be deemed to release
any Party from any liability for any breach by such Party of any of the terms or
provisions of this Agreement prior to such termination.

ARTICLE 15

TERM AND TERMINATION

15.1 Term. The term of this Agreement (the “Term”) shall commence on the
Effective Date and, unless terminated earlier in accordance with this Article
15, shall continue in effect until the twentieth (20th) anniversary of the date
of Approval of the Product for the HD Indication.

15.2 Termination by GTC. GTC may terminate this Agreement during the Term upon
ninety (90) days’ prior written notice to Ovation following the occurrence of
either of the following events during the Term:

(a) the occurrence of an Event of Default with respect to Ovation; or

(b) the occurrence of any Insolvency Event with respect to Ovation.

15.3 Termination by Ovation. Ovation may terminate this Agreement during the
Term upon written notice to GTC following the occurrence of any of the following
events during the Term, such termination to be effective upon receipt of such
notice by GTC:

(a) the occurrence of an Event of Default with respect to GTC or ATIII LLC;

(b) the occurrence of any Insolvency Event with respect to GTC or ATIII LLC;

(c) failure of the Product to receive Approval for the HD Indication by
January 31, 2011;

(d) a material adverse change in the frequency or severity of Adverse Events
(other than as a result of the activities which are the responsibilities of
Ovation hereunder) which experiences require material additional or materially
modified warnings in Product labeling, and as a result the distribution of the
Product is significantly and adversely affected during each of three
(3) consecutive months, or a recall of the Product approved by GTC (such
approval not to be unreasonably withheld or delayed) or mandated by any
Regulatory Authority (either within or outside the Territory) for any reason
related to safety;

 

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(e) ATIII LLC ceases to be an Affiliate of GTC without Ovation’s prior written
consent; or

(f) existence of an injunction affecting the ability of Ovation to sell the
Product in the Territory as a result of a court decision that the Product
infringes a Third Party’s patent, trademark or other intellectual property
rights or, if in the reasonable business judgment of Ovation the Product is
likely to become the subject of infringement of a patent, trademark or other
intellectual property right.

15.4 Rights and Obligations Upon Termination. Subsequent to the Closing, the
Parties shall have the following rights and duties upon termination of this
Agreement unless otherwise agreed to by the Parties:

(a) By GTC. In the event that GTC terminates this Agreement pursuant to
Section 15.2(a):

(i) At GTC’s option and upon receipt of GTC’s written instructions, Ovation
shall (A) deliver to GTC, or to such other persons as may be specified by GTC,
in accordance with GTC’s written instructions, such Product in the possession of
Ovation as GTC may instruct, and (B) destroy all other Product in the possession
of Ovation (any such destruction to be accomplished in conformity with all
Applicable Laws and regulations) except for amounts reasonably necessary to
satisfy the obligations of Ovation to Third Parties existing at the time of
termination for a period of twelve (12) months, which amounts Ovation shall be
entitled to retain and use and shall pay for in accordance with the terms of
this Agreement;

(ii) Ovation shall (A) cease selling and distributing the Product, except to the
extent necessary to satisfy the obligations of Ovation to Third Parties existing
at the time of termination for a period of twelve (12) months, and
(B) thereafter, in accordance with GTC’s written instructions, either deliver to
GTC or GTC’s designee or destroy all display, point of sale, advertising and
promotional materials and any other items then in the possession of Ovation
bearing the Trademarks or other indicia of origin or quality pertaining to the
Product. Ovation shall also promptly remove all signs, advertising, and similar
materials bearing the Trademarks and other indicia of origin or quality of the
Product from the buildings of Ovation, stationery and other property and
advertising, at no cost to GTC;

(iii) In the event that Product is returned or destroyed in accordance with
GTC’s instructions, GTC shall pay to Ovation the following sum of monies within
thirty (30) days following receipt by GTC of the Product or notice of their
destruction: (x) (A) the amount paid by Ovation for such Product, plus (B) any
non refundable taxes and duties actually paid by Ovation in respect of the
returned or destroyed such Product, plus (C) the reasonable, documented expenses
actually incurred by Ovation to return or destroy such Product, minus (y) any
amount owed to GTC by Ovation pursuant to this Agreement;

 

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(iv) Ovation shall, at the expense of Ovation and without delay and without
taking recourse to legal action to prevent such transfer or assignment, transfer
and assign to GTC or its designee any and all licenses, approvals and permits in
the name of Ovation or its Affiliates (and all documentation necessary or
relating thereto) relating to the marketing, sale, use, handling and
distribution of the Product in the Territory, including without limitation
Regulatory Approvals, Reimbursement Approvals, if any, and Orphan Drug
designations and approvals, if any, and the License shall be terminated as of
the date of the termination or expiration of the Agreement. In the event that
Ovation is unable to so transfer any Regulatory Approvals, Reimbursement
Approvals, if any or Orphan Drug designations, if any, Ovation shall, at the
cost of GTC, maintain such Regulatory Approvals, Reimbursement Approvals, if
any, or Orphan Drug designations, if any, in accordance with GTC’s reasonable
instructions for GTC’s exclusive benefit; and

(v) Ovation shall, at GTC’s request and within ninety (90) days after such
termination of this Agreement by GTC, assign and transfer to GTC the Purchased
Property (including, without limitation, the good will appurtenant to the
Purchased Trademarks).

(b) By Ovation. In the event that Ovation terminates this Agreement pursuant to
Sections 15.3(a), 15.3(b) or 15.3(e), then:

(i) the License granted to Ovation shall survive perpetually;

(ii) Ovation shall make Reduced Royalty Payments to GTC pursuant to
Section 8.2(c);

(iii) GTC, its Affiliates and/or successors shall not sell, co-promote or
market, by itself or in cooperation with a Third Party, any plasma derived or
any recombinant antithrombin product or combination product incorporating the
Product, including GTC’s antithrombin alfa, in the Territory for a period of
three (3) years after termination;

(iv) at Ovation’s option, GTC shall be obligated to (and shall cause its
Affiliates or any new distributor of the Product in the Territory to)
(A) fulfill all post-marketing commitments of Ovation or its Affiliates for the
Product in the Territory (to the extent that GTC agreed in advance to the scope
of such commitments) and (B) continue to supply the Product to patients in the
Territory who are receiving treatment at the time of termination. The continued
supply of Product pursuant to this Article shall be on terms substantially
similar to the terms on which such Product was supplied to Ovation prior to
termination; and

(v) GTC’s obligation to pay the Rebate, if any, pursuant to Section 8.1(e),
shall survive such termination.

 

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(c) In the event that Ovation terminates this Agreement pursuant to Sections
15.3(c), 15.3(d) or 15.3(f), then:

(i) Ovation, at its option, may deliver to GTC, or to such other persons as may
be specified by GTC, such Product in the possession of Ovation as Ovation
desires, and GTC shall credit Ovation’s account for such returned Product; and

(ii) Ovation shall (A) cease selling and distributing the Product, except to the
extent necessary to satisfy the obligations of Ovation to Third Parties existing
at the time of termination, and (B) thereafter, in accordance with GTC’s written
instructions, either deliver to GTC or GTC’s designee or destroy all display,
point of sale, advertising and promotional materials and any other items then in
the possession of Ovation bearing the Licensed Trademarks or other indicia of
origin or quality pertaining to the Product. Ovation shall also promptly remove
all signs, advertising, and similar materials bearing the Licensed Trademarks
and other indicia of origin or quality of the Product from the buildings of
Ovation, stationery and other property and advertising.

(d) Expiration of Term. Upon the expiration of the Term:

(i) the License granted to Ovation shall survive perpetually;

(ii) GTC’s obligation to pay the Rebate, if any, pursuant to Section 8.1(e),
shall survive such expiration; and

(iii) the Parties shall enter into a mutually agreeable new supply agreement,
pursuant to which GTC shall be Ovation’s sole and exclusive supplier of the
Product in the Territory, and Ovation shall exclusively purchase the Product for
the Territory from GTC.

(e) Payment Obligations. The termination for any reason whatsoever of this
Agreement shall not release either Party from the obligation to pay any sums
then owing to the other Party or from the obligation to perform any other duty
or to discharge any other liability that such Party has incurred prior thereto.
Notwithstanding the aforementioned in case the Agreement is terminated for other
reasons than the occurrence of an Event of Default with respect to Ovation,
Ovation shall be released from its payment obligation with respect to any
payments as set forth in Article 8 (or Sections 6.1 or 6.2, if any) to the
extent such payments have not fallen due when the termination becomes effective.

15.5 Survival. In addition to any other survival provisions contained herein,
the following provisions of this Agreement shall survive any termination or
expiration of this Agreement under this Article 15: Article 11, Article 13,
Article 16 and Sections 15.4 and 15.5.

 

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ARTICLE 16

MISCELLANEOUS

16.1 Entire Agreement. This Agreement, together with the Exhibits and Schedules
hereto and the Supply Agreement, sets forth the entire agreement and
understanding between the Parties as to the subject matter hereof, and fully
supersedes all prior agreements and understandings, if any, between the Parties
pertaining to such matters, including, without limitation, that certain revised
non-binding Indication of Interest, dated as of June 6, 2008, by and between GTC
and Ovation.

16.2 Amendment. Except as otherwise provided expressly herein, no modification,
amendment or supplement to this Agreement or to such Exhibits or Schedules shall
be effective for any purpose unless in writing and signed by the Parties hereto.

16.3 Binding Effect; Assignment. This Agreement shall inure to the benefit of
and be binding upon the Parties hereto and their respective successors and
permitted assigns. Neither this Agreement nor the rights granted or obligations
assumed hereunder shall be assigned or otherwise transferred by either Party
without the prior written consent of the other Party; provided, however, that a
Party (other than ATIII LLC) may assign this Agreement without the consent of
the other Party (a) to any Affiliate of such Party; or (b) to a Third Party in
connection with a merger, consolidation or sale of all or substantially all of
such Party’s assets, provided that the assigning Party’s rights and obligations
under this Agreement shall be assumed by its successor-in-interest in any such
transaction and shall not be transferred separate from all or substantially all
of its other business assets; provided, further, that Ovation may assign its
rights and remedies hereunder to any bank or other financial institution that
has loaned funds or otherwise extended credit to Ovation or any of Ovation’s
affiliates. Any assignment by a Party hereunder shall not in any event release
such Party of any of its obligations hereunder.

16.4 Change of Ownership. GTC shall, in any agreement of divestiture, sale of
all or substantially all of its assets or stock, or any other act which results
in a change of control of GTC or ATIII LLC, include in such agreement language
which requires the acquiring party to comply with the terms and conditions of
this Agreement. For purposes of clarification, in such circumstances, Ovation
shall retain the Purchased Property the License under and in accordance with the
terms of this Agreement. GTC’s successor shall be obligated to provide Ovation
the know-how, technical and regulatory support and Product supply necessary to
perform its obligations under the Agreement.

16.5 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Illinois, without regard to the
conflicts of laws provisions thereof.

16.6 SERVICE OF PROCESS. EACH OF THE PARTIES HERETO IRREVOCABLY CONSENTS TO THE
SERVICE OF ANY AND ALL PROCESS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH
PARTY AT ITS ADDRESS SPECIFIED IN SECTION 16.9.

 

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16.7 No Waiver; Remedies. Except as expressly provided herein, the waiver by any
Party hereto of any right hereunder or of any failure to perform or any breach
by any other Party shall not be deemed a waiver of any other right hereunder or
of any other failure to perform or breach by such other Party, whether of a
similar nature or otherwise, nor shall any singular or partial exercise of such
right preclude any further exercise thereof or the exercise of any other such
right. The remedies herein are cumulative and not exclusive of any remedies
provided by law.

16.8 Force Majeure. No Party shall be held liable or responsible to any other
Party, nor be deemed to have defaulted under or breached this Agreement, for
failure or delay in fulfilling or performing any term of this Agreement when
such failure or delay is caused by or results from causes beyond the reasonable
control of the affected Party, including without limitation contamination or
diseases affecting the herd of transgenic animals from which Product is produced
(provided such event is not due to the negligence or willful misconduct of GTC,
ATIII LLC or their respective Affiliates and subcontractors), fires, flood,
earthquakes, accidents, explosions, sabotage, strikes or other labor
disturbances (regardless of the reasonableness of the demands of labor), civil
commotions, riots, invasions, acts of terrorism, wars (whether declared or
undeclared), acts, restraints, requisitions, regulations, or directions of
governmental authorities, shortages of labor, fuel, power, or raw material,
inability to obtain equipment or supplies, inability to obtain or delays in
transportation, acts of God, peril of the sea; provided, however, that the Party
so affected shall use commercially reasonable and diligent efforts to avoid or
remove such causes of non-performance, and shall continue performance hereunder
with reasonable dispatch wherever such causes are removed. Each Party shall
provide the other Party with prompt written notice of any delay or failure to
perform that occurs by reason of force majeure. The Parties shall seek mutually
and in good faith a resolution of the delay or the failure to perform.

16.9 Notices. Any consent, notice or report required or permitted to be given or
made under this Agreement by one of the Parties to any other Party shall be in
writing, delivered (i) personally, (ii) by facsimile (and promptly confirmed by
personal delivery or courier), (iii) by a next Business Day delivery service of
a nationally recognized overnight courier service or by courier, postage prepaid
(where applicable) or (iv) by certified United States mail, postage prepaid,
addressed to such other Party at its address indicated below, or to such other
address as the addressee shall have last furnished in writing to the addressor
in accordance herewith and shall be effective upon receipt by the addressee:

 

If to Ovation:    Ovation Pharmaceuticals, Inc.    Four Parkway North, Suite 200
   Deerfield, Illinois 60015    Attn:   Patrick J. Morris, Esq.    Phone:    
(847) 282-1052    Fax:   (847) 282-1059

 

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with a copy to:    Katten Muchin Rosenman LLP    525 West Monroe Street, Suite
1900    Chicago, Illinois 60661-3693    Attn:   Mark R. Grossmann    Phone:    
(312) 902-5297    Fax:   (312) 577-4408 If to GTC or ATIII:    GTC
Biotherapeutics, Inc.    175 Crossing Boulevard, Suite 410    Framingham,
Massachusetts 01702    Attn:   Chairman, President and Chief Executive Officer
   Phone:   (508) 620-9700    Fax:   (508) 370-5304 with a copy to:    Edwards
Angell Palmer & Dodge LLP    11 Huntington Avenue    Boston, Massachusetts 02199
   Attn:   Marcia H. Anderegg    Phone:   (617) 239-0540    Fax:   (617)
316-8201

The date of service for any notice sent in compliance herewith shall be (i) the
date such notice is personally delivered, (ii) the next succeeding Business Day
after transmission by facsimile, (iii) one (1) Business Day after date of
delivery to the overnight courier if sent by overnight courier or (iv) three
(3) Business Days after the date of mailing if sent by certified or registered
mail.

16.10 Severability. Each Party hereby agrees that it does not intend to violate
any public policy, statutory or common laws, rules, regulations, treaty or
decision of any federal, state, local or foreign government agency or executive
body thereof. Should one or more provisions of this Agreement be or become
invalid, the Parties hereto shall substitute, by mutual consent, valid
provisions for such invalid provisions which valid provisions in their economic
effect are sufficiently similar to the invalid provisions that it can be
reasonably assumed that the Parties would have entered into this Agreement with
such valid provisions. In the event such valid provisions cannot be agreed upon,
the invalidity of one or several provisions of this Agreement shall not affect
the validity of this Agreement as a whole, unless otherwise specified herein or
the invalid provisions are of such essential importance to this Agreement that
it is to be reasonably assumed that the Parties would not have entered into this
Agreement without the invalid provisions.

16.11 Relationship of Parties. Ovation shall act as an independent contractor
which purchases the Product and resells it for its own account. Nothing in this
Agreement shall constitute or be deemed to constitute either Party as the legal
representative or agent of the other, nor shall either Party have the right or
authority to assume, create or incur any liability or any obligation of any
kind, expressed or implied, in the name or on behalf of the other Party. The
Parties do not intend, by entering into this Agreement, to enter into a
partnership arrangement as described in the Internal Revenue Code of 1986, as
amended, or any applicable regulations.

 

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16.12 Dispute Resolution. All disputes arising out of or in connection with this
Agreement shall be finally settled under the Rules of Arbitration of the
Judicial Arbitration Mediation Services by one or more arbitrators appointed in
accordance with the said Rules. The arbitration shall be held in Chicago,
Illinois.

16.13 Performance by Affiliates. To the extent that this Agreement imposes
obligations on Affiliates of a Party, such Party agrees to cause its Affiliates
to perform such obligations. Either Party may use one or more of its Affiliates
to perform its obligations and duties hereunder, provided that Ovation and GTC
shall remain liable hereunder for the prompt payment and performance of all
their respective obligations hereunder.

16.14 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which, when taken together,
shall constitute one and the same agreement. One or more counterparts of this
Agreement may be delivered via PDF, fax or telecopier, and shall have and be
deemed to have the same force and effect as an original counterpart hereof.

16.15 Interpretation. By executing this Agreement, both Parties acknowledge and
accept that the final draft of this Agreement was reached by negotiation and
mutual consent, and this Agreement shall be deemed drafted by both Parties and
shall not be interpreted against any one Party. The Parties agree that
references to approvals not being unreasonably withheld includes consideration
of a number of factors, including without limitation material increases in
costs, material changes in supply obligations of GTC and medical and regulatory
considerations.

16.16 Limitation of Liability. WITH RESPECT TO ANY CLAIM BY ONE PARTY AGAINST
THE OTHER ARISING OUT OF THE PERFORMANCE OR FAILURE OF PERFORMANCE OF THE OTHER
PARTY UNDER THIS AGREEMENT, THE PARTIES EXPRESSLY AGREE THAT THE LIABILITY OF
SUCH PARTY TO THE OTHER PARTY FOR SUCH BREACH SHALL BE LIMITED UNDER THIS
AGREEMENT (OTHER THAN AS PROVIDED IN SECTION 12.1) OR OTHERWISE AT LAW OR EQUITY
TO DIRECT DAMAGES, ATTORNEYS’ FEES AND THE LIKE, AND IN NO EVENT SHALL A PARTY
BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL
DAMAGES, INCLUDING WITHOUT LIMITATION, LOST PROFITS.

16.17 Expenses. Each Party shall pay its own expenses in connection with this
Agreement, except as specifically provided herein.

16.18 Use of Names. Except as otherwise provided herein, neither Party shall use
the name of the other Party in any advertising or other form of publicity
including press releases, without the prior written permission of the other
Party, such permission not to be unreasonably withheld or delayed.

 

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[Signature pages follow]

 

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

 

GTC: GTC BIOTHERAPEUTICS, INC. By:   /s/ Geoffrey F. Cox Name:    Geoffrey F.
Cox Its:   Chairman, President and CEO ATIII LLC: ATIII LLC By:   /s/ Geoffrey
F. Cox Name:   Geoffrey F. Cox Its:   President OVATION: OVATION
PHARMACEUTICALS, INC. By:   /s/ Jeffrey S. Aronin Name:   Jeffrey S. Aronin Its:
  President & CEO

[Signature Page to Acquisition, Licensing, Development and Supply Agreement]

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Exhibit A

PHARMACOVIGILANCE PROCEDURES AGREEMENT

To be attached hereto at or prior to Closing.

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Asterisks denote such omissions.

 

Exhibit B

QUALITY AGREEMENT

To be attached hereto at or prior to Closing.

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separately with the Securities and Exchange Commission.

Asterisks denote such omissions.

 

Exhibit C

SUPPLY AGREEMENT

To be attached hereto at or prior to Closing.

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separately with the Securities and Exchange Commission.

Asterisks denote such omissions.

 

Exhibit D

HERD MANAGEMENT AGREEMENT

To be attached hereto at or prior to Closing.

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Asterisks denote such omissions.

 

Schedule 1

ITEMS INCLUDED IN PURCHASED PROPERTY

U.S. Patent No. 7,019,193 (Transgenically Produced Antithrombin III), expiration
date February 21, 2015.

U.S. Trademark Registration No. 2743233 for “ATryn”

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Schedule 2

GTC INTELLECTUAL PROPERTY RIGHTS, TRADEMARKS AND TECHNICAL

INFORMATION

************

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Schedule 3

PAYMENTS FROM OVATION TO GTC FOR FUNDING OF CLINICAL

DEVELOPMENT OF PRODUCT FOR HR INDICATION

 

EVENT

  

INSTALLMENT

************

   ************

************

   ************

************

   ************

************

   ************

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Schedule 4

PAYMENTS FROM OVATION TO GTC FOR FUNDING OF CLINICAL

DEVELOPMENT OF PRODUCT FOR DIC/SEPSIS INDICATION

 

EVENT

   INSTALLMENT

************

   ************

************

   ************

************

   ************

************

   ************

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Schedule 5

REQUIRED CONSENTS AND APPROVALS

The consent of (and/or release of liens held by) GE Capital Corporation is
required prior to GTC’s assignment and transfer of the Purchased Trademarks and
Purchased Patent Rights, and may be required for GTC’s assignment, transfer
and/or creation of the Ovation Herd and Purchased Materials.

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Schedule 6

PHARMACOVIGILANCE PRINCIPLES

Introduction

The procedures and definitions outlined in this document reflect ICH Topic E 2 A
Clinical Safety Data Management: Definitions and Standards for Expedited
Reporting. The following procedures and definitions are being used to be
consistent with current procedures and definitions to maintain uniformity for
reporting of clinical and post-marketing adverse drug reactions for ATryn®
(antithrombin alfa).

The following terms, when used herein, shall have the meanings ascribed to them
within the following International Conference on Harmonisation of Technical
Requirements for Registration of Pharmaceuticals for Human Use: (1) ICH E2A
Clinical Safety Data Management: Definitions and Standards for Expedited
Reporting; (2) ICH E2C Clinical Safety Data Management: Periodic Safety Update
Reports for Marketed Drug; and (3) ICH E2D Post-approval Safety Data Management:
Definitions and Standards for Expedited Reporting, (as officially amended from
time to time thereafter, collectively, the “ICH”), and Volume IXA effective from
January 2007.

(a) Adverse Event (AE)/Adverse Drug Reaction (ADR)

(b) Serious, Non-Serious

(c) Unexpected/Expected

(d) Minimum Information

Medical Definitions

Adverse Drug Reaction (ADR) (regarding pre-approval clinical experience) shall
mean a response to a medicinal product related to any dose should be considered
adverse drug reaction.

Adverse Drug Reaction (ADR) (regarding marketed products) shall mean a response
to a drug which is noxious and unintended and which occurs at doses normally
used in man for prophylaxis, diagnosis, or therapy of diseases or for
modification of physiological function.

Serious Adverse Event (SAE) shall mean any untoward medical occurrence that, at
any dose:

 

  •  

results in death

 

  •  

is life-threatening

 

  •  

requires inpatient hospitalization or prolongation of existing hospitalization

 

  •  

results in persistent or significant disability/incapacity

 

  •  

is a congenital anomaly/birth defect

 

  •  

results in other medically important conditions

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Suspected Unexpected Serious Adverse Reaction (SUSAR) shall mean any suspected
unexpected serious adverse reaction occurring in clinical trials.

‘Date of First Receipt’ (‘DFR’) shall mean the calendar date when the first
person at either Ovation or GTC is notified of an adverse drug reaction. Date of
first receipt shall be considered as Day “0” for Regulatory reporting purposes

Safety Database

Ovation Patient Safety Department will be responsible for maintaining the world
wide safety database.

Exchange of Information (EOI)

EOI will be between Ovation Patient Safety Department and GTC Regulatory
Department in accordance with the procedures outlined below.

Adverse Event Reporting (Cases) -

 

  •  

For fatal or life-threatening, unexpected, and related ADRs occurring in
clinical trials relating to the Product, case of information shall occur within
the timeframe required by applicable local regulations, but in no event later
than three (3) calendar days after the date of first receipt so that the very
rapid reporting regulations can be met

 

  •  

GTC agrees to provide to Ovation and its affiliates or subsidiaries, from and
after the transfer date, for such product within the territory all serious and
non-serious case reports (initial and follow-up) including literature relating
to the Product within three (3) calendar days after the first date of receipt
but in no event later than five (5) calendar days of the date of first receipt.

 

  •  

GTC will send reports to Ovation by email or fax

 

  •  

Ovation confirms receipt of fax or email to GTC.

 

  •  

Ovation’s Patient Safety Department processes case reports and maintains the
Drug Safety Database.

 

  •  

Ovation’s Patient Safety Department will fax or email the completed MedWatch
form for serious reports only to GTC by calendar day ten (10) for submission to
the Food and Drug Administration by GTC.

 

  •  

GTC shall send to Ovation a copy of the cover letter of submission

Monthly Line Listings

GTC will email or fax on a monthly basis a line listing of all non-serious ADRs
received by GTC to Ovation’s Patient Safety Department.

Ovation will email or fax on a monthly basis a line listing of all non-serious
ADRs originating from the territory to GTC.

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Reports from Literature

Ovation’s Patient Safety Department will conduct on a regular basis literature
monitoring worldwide with respect to the Product using a major literature
database/source that indexes major medical journals. Literature case reports
will be exchanged as the Adverse Event Reporting (Cases) in this agreement. If
GTC becomes aware, however, of any literature cases relating to the Product that
are published within the territory and are not indexed in the major literature,
GTC will notify Ovation’s Patient Safety Department in accordance with the
Adverse Event Reporting (Cases) in this agreement. The first date of receipt
will be the day that GTC becomes aware of the literature case. GTC will forward
a copy of the original article describing the AE/ADR that was identified to
Ovation’ Patient Safety Department. If the article was reported in a local
language, and English language translation of the article should be sought by
GTC and provided to Ovation’s Patient Safety Department. If Ovation’s Patient
Safety Department identifies a literature case in a foreign language, the first
date of receipt will be the date when an English copy of the article has been
obtained by Ovation’s Patient Safety Department. GTC will assist by notifying of
case reports from literature brought to its knowledge from outside the
Territory.

Ovation’s Patient Safety Department will provide the causality assessment for
all reports from clinical trials which are considered related to the
investigational product by either the reporter or the sponsor.

Notification of Regulatory Authorities

GTC will be responsible for appropriate regulatory notifications.

Regulatory Authority Requests for Additional Information

Additional Information to an Individual Case Report:

Ovation’s Patient Safety Department will be responsible for obtaining the
requested information from the reporter for Post Marketing Adverse Reactions.
The Contract Research Organization will be responsible for obtaining the
requested information from the reporter for Clinical Adverse Reactions per
mutually agreed upon Standard Operating Procedures. The response to the
Regulatory Authorities is the responsibility of GTC.

Safety Reports

Ovation’s Patient Safety Department has the responsibility for preparing
Periodic Safety Reports accordance with the applicable data lock point (DLP) and
the requirements of applicable laws and regulations and ICH E2C. GTC shall
provide to Ovation all safety and regulatory information which can reasonably by
provided to produce the PSUR by Patient Safety Department. GTC has the
responsibility of submitting the documentation to the Food and Drug
Administration.

Signaling

GTC and its affiliates and subsidiaries, with respect to the territory, and
Ovation and its affiliates and subsidiaries, with respect to the Ovation
territory, will notify the other Party no later than three (3) calendar days
after it becomes aware of any regulatory actions, pending actions or signals
within such territory that it perceives at the time might result in a change in
labeling or market restriction thereof including, but not limited to, the
following:

 

  (i) marketing authorization withdrawal or suspension;

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  (ii) recalls dir to product safety or efficacy inquiries, product quality
complaints or AE/ADR events;

 

  (iii) failure to obtain a marketing authorization renewal;

 

  (iv) restrictions on distribution;

 

  (v) clinical trial suspension;

 

  (vi) dosage modification for safety reasons

 

  (vii) changes in target population or indications for safety reasons;

 

  (viii) formulation changes for safety reasons; and

 

  (ix) change of core safety data sheet or labeling which is though to be
important from a safety standpoint.

Contact Information

Ovation Pharmaceuticals, Inc.

Please forward all case exchange and other correspondence to the following group
e-mail address at Ovation Pharmaceuticals, Inc.:

************

For immediate correspondence regarding regulatory:

************

For immediate correspondence regarding pharmacovigilance:

************

************

For immediate correspondence regarding quality assurance:

************

All legal notices and correspondence to:

************

For immediate correspondence regarding medical information:

************

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GTC Biotherapeutics, Inc.

************

Any changes in contact persons will be communicated in writing to the other
party without undue delay.

Changes in Regulatory Requirements

GTC and Ovation agree to update this Agreement according to changes in
regulatory requirements, ICH Guidance and/or post-approval commitments.