Exhibit 10.11

Execution Copy

Confidential material omitted and filed

separately with the Securities and Exchange Commission.

Asterisks denote such omissions.

AMENDED AND RESTATED JOINT DEVELOPMENT AND COMMERCIALIZATION

AGREEMENT

BY AND AMONG

GTC BIOTHERAPEUTICS, INC.

AND

LFB-BIOTECHNOLOGIES S.A.S.U.

AND

LFB/GTC LLC

AND

LFB BIOTECHNOLOGIES INC.

June 30, 2008

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with the Securities and Exchange Commission.

Asterisks denote such omissions.

 

TABLE OF CONTENTS

 

         Page ARTICLE 1  

        DEFINITIONS

   2 ARTICLE 2  

        SCOPE OF COLLABORATION; JOINT OBLIGATIONS; DILIGENCE

   17

2.1

 

Scope of Collaboration

   17

2.2

 

Conduct of Parties

   19

2.3

 

Assistance

   19

2.4

 

Product List

   19 ARTICLE 3  

        GRANT OF RIGHTS

   20

3.1

 

LFB Biotech License to LFB-US

   20

3.2

 

LFB-US Sublicense Grant to LFB/GTC LLC

   20

3.3

 

GTC License Grant to LFB/GTC LLC

   21

3.4

 

Sublicenses to GTC

   22

3.5

 

Sublicenses to LFB-US

   23

3.6

 

Exercise of Commercialization Rights in Co-Exclusive Territory

   24

3.7

 

Trademark License

   24

3.8

 

Performance of Development and Commercialization Activities By Third Parties

   25

3.9

 

Reservation of Rights

   25

3.10

 

Competing Products

   25

3.11

 

Third Party Patent Rights

   26

3.12

 

Effect of Bankruptcy on License Grants

   26 ARTICLE 4  

        COLLABORATION GOVERNANCE

   26

4.1

 

Team Leaders/Project Managers

   26

4.2

 

Joint Steering Committee; Minutes

   26

4.3

 

Subcommittees

   27

4.4

 

Responsibilities of the JSC

   27

 

-i-

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TABLE OF CONTENTS

(continued)

 

          Page

4.5

  

Decisions

   27 ARTICLE 5   

        DEVELOPMENT PHASE

   28

5.1

  

Development Plan

   28

5.2

  

Development Activities

   29

5.3

  

Diligence Requirements

   30

5.4

  

Development Costs

   30

5.5

  

Right of Reference to Data

   30

5.6

  

Transfer of Know-How

   31

5.7

  

Conduct of Clinical Trials

   31

5.8

  

Regulatory Filings and Approvals

   32

5.9

  

Ownership of Regulatory Approvals

   33 ARTICLE 6   

        COMMERCIALIZATION PHASE

   33

6.1

  

Commercialization Plan

   33

6.2

  

Commercialization Activities

   34

6.3

  

Commercialization Costs

   35

6.4

  

Diligence Requirements

   35

6.5

  

Advertising and Promotional Materials

   36

6.6

  

Customer Complaints and Inquiries

   36

6.7

  

Drug Safety

   36

6.8

  

Product Withdrawals and Recalls

   37 ARTICLE 7   

        PRODUCT SUPPLY

   37

7.1

  

Clinical Supply of Product

   37

7.2

  

Forecasts and Commercial Supply

   38

7.3

  

Disclaimer of Warranty

   38

7.4

  

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

   39

 

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TABLE OF CONTENTS

(continued)

 

          Page ARTICLE 8   

        PAYMENTS AND ACCOUNTING

   39

8.1

  

Equity Purchase

   39

8.2

  

Funding of Costs and Sharing of Profits

   39

8.3

  

Reports

   44

8.4

  

Records; Audit

   46

8.5

  

Currency of Account and Payment

   46

8.6

  

Blocked Currency

   46

8.7

  

Taxes

   46 ARTICLE 9   

        PATENTS AND INVENTIONS

   48

9.1

  

Ownership

   48

9.2

  

Patent Prosecution

   48

9.3

  

Enforcement of Patent Rights

   49

9.4

  

Claimed Infringement

   51

9.5

  

Declaratory Actions

   51

9.6

  

Costs of Patent Prosecution and Enforcement

   51 ARTICLE 10   

        TRADEMARK USAGE AND MAINTENANCE

   51

10.1

  

Trademarks

   51 ARTICLE 11   

        COVENANTS, REPRESENTATIONS, AND WARRANTIES

   53

11.1

  

Mutual Covenants

   53

11.2

  

Representations and Warranties of the Parties

   54

11.3

  

Additional Representations and Warranties of LFB Biotech

   54

11.4

  

Additional Representations and Warranties of GTC

   55

11.5

  

Performance by Affiliates

   55 ARTICLE 12   

        CONFIDENTIALITY

   55

12.1

  

Treatment of Confidential Information

   55

12.2

  

Exceptions

   56

12.3

  

Authorized Disclosures

   56

 

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TABLE OF CONTENTS

(continued)

 

          Page

12.4

  

Publicity

   57

12.5

  

Publication

   57

12.6

  

Termination of Prior Confidentiality Agreements

   58 ARTICLE 13   

        INDEMNIFICATION

   58

13.1

  

Indemnification by LFB Biotech

   58

13.2

  

Indemnification by GTC

   59

13.3

  

Procedure

   59

13.4

  

Shared Liability Claims

   60

13.5

  

Effect of Disclosures

   60

13.6

  

Insurance

   61 ARTICLE 14   

        TERM AND TERMINATION

   61

14.1

  

Term

   61

14.2

  

Termination Rights

   62

14.3

  

Effects of Termination

   64

14.4

  

Survival; Accrued Rights

   70

14.5

  

Effect of Termination on Sublicenses

   70 ARTICLE 15   

        DISPUTE RESOLUTION

   70

15.1

  

Disputes

   70

15.2

  

Arbitration

   70 ARTICLE 16   

        MISCELLANEOUS

   71

16.1

  

Actions by Affiliates

   71

16.2

  

Assignment

   71

16.3

  

Governing Law

   72

16.4

  

Non-Waiver

   72

16.5

  

Disclaimer of Indirect Damages

   72

16.6

  

Severability

   72

 

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TABLE OF CONTENTS

(continued)

 

          Page

16.7

  

Notice

   73

16.8

  

Headings

   73

16.9

  

Force Majeure

   73

16.10

  

Entire Agreement

   74

16.11

  

Amendments

   74

16.12

  

Independent Contractors and Relationship of the Parties

   74

16.13

  

Exhibits

   74

16.14

  

No Strict Construction

   74

16.15

  

Recording

   74

16.16

  

Counterparts

   74

 

-v-

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AMENDED AND RESTATED JOINT DEVELOPMENT

AND COMMERCIALIZATION AGREEMENT

This Amended and Restated Joint Development and Commercialization Agreement
(this “Agreement”) is entered into as of June 30, 2008 (the “Restatement Date”),
by and among GTC Biotherapeutics, Inc., a Massachusetts corporation, having
offices at 175 Crossing Boulevard, Framingham, Massachusetts 01702, USA (“GTC”);
LFB Biotechnologies S.A.S.U., a société par actions simplifiée unipersonnelle,
having offices at 3, avenue des Tropiques, Les Ulis, 91958 Courtaboeuf, France
(“LFB Biotech”); LFB/GTC LLC, a New York limited liability corporation, having
offices at 175 Crossing Boulevard, Framingham, Massachusetts 01702, USA
(“LFB/GTC LLC”) and LFB Biotechnologies Inc., a Delaware corporation having a
registered office at 2711 Centerville Road, Suite 400, Wilmington, Delaware
(“LFB-US”). GTC, LFB Biotech, LFB-US and LFB/GTC LLC are sometimes referred to
herein individually as a “Party” and collectively as the “Parties.”

INTRODUCTION

A. LFB Biotech and its Affiliates possess certain intellectual property,
know-how and skills with respect to processes and purification, expertise in
clinical and regulatory affairs, manufacturing, molecular biology and
biosecurity, extensive marketing and sales experience in therapeutic products,
commercial infrastructure and financial resources.

B. GTC possesses certain intellectual property with respect to the production of
transgenic proteins in milk, purification and promoters, know-how and skills in
the areas of regulatory affairs, quality systems animal husbandry, milking,
biosecurity, molecular biology, embryology, product recovery and purification.

C. GTC and LFB Biotech entered into a Joint Development and Commercialization
Agreement effective as of September 29, 2006, as amended by an Amendment
Agreement dated as of November 19, 2007 and by a Second Amendment Agreement
dated as of May 14, 2008 (as so amended, the “Original JDA”) for the purpose of
jointly developing and commercializing certain transgenic animal products based
on, derived from or incorporating recombinant plasma proteins and monoclonal
antibodies (the “Collaboration”).

D. LFB Biotech and GTC agreed that the first program to be undertaken pursuant
to their Collaboration will be the development and commercialization of an
rFVIIa product in respect of which LFB Biotech and its Affiliates have developed
certain intellectual property, know how and skills.

E. LFB Biotech and GTC have added three more programs to their Collaboration
since the date of the Original JDA, including programs for the development of an
antibody to CD20 (the “CD20 Antibody”), a recombinant form of coagulation Factor
IX (“rFIX”) and a recombinant form of the blood protein alpha-1 antitrypsin
(“rhAAT”).

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F. As contemplated by Section 4.7 of the Original JDA, GTC and LFB Biotech
(through its subsidiary LFB-US) have formed a separate legal entity in the form
of LFB/GTC LLC to facilitate the continuing Collaboration.

G. LFB Biotech, GTC, LFB/GTC LLC and LFB-US wish to amend and restate the
Original JDA to add LFB/GTC LLC and LFB-US as parties and to accurately reflect
the reallocation of responsibilities of the Collaboration and the use of LFB/GTC
LLC to facilitate the continuing Collaboration.

H. LFB Biotech is a wholly-owned subsidiary of Laboratoire Francais du
Fractionnement et des Biotechnologies S.A., a French société anonyme (“LFB SA”).
LFB-US is a wholly-owned subsidiary of LFB Biotech.

I. As a material inducement for GTC to enter into the Original JDA, GTC and
LFB SA entered into a certain Keepwell Agreement concurrently with the execution
of the Original JDA, pursuant to which, among other matters, LFB SA agreed
to (i) cause LFB Biotech and the Affiliates of LFB Biotech to perform and comply
with any relevant obligations under the Original JDA, (ii) be liable for any GTC
damages caused by the failure of LFB Biotech or its Affiliates to perform and
comply with such obligations, and (iii) indemnify and hold GTC harmless for any
such failures.

NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and
agreements set forth herein, the Parties hereby agree as follows:

ARTICLE 1

DEFINITIONS

1.1 “Accounting Standards” shall mean (a) with respect to GTC and LFB/GTC LLC,
United States Generally Accepted Accounting Principles, and (b) with respect to
LFB Biotech and LFB-US, International Financial Reporting Standards.

1.2 “Action” means any claim, action, cause of action or suit (whether in
contract or tort or otherwise), litigation (whether at law or in equity, whether
civil or criminal), controversy, assessment, arbitration, investigation,
hearing, charge, complaint, demand, notice or proceeding of, to, from, by or
before any governmental authority.

1.3 “Additional MAb Product” means the Transgenic version of any therapeutic
product based on, incorporating or derived from monoclonal antibodies, other
than the CD20 Mab Product.

1.4 “Additional Plasma Product” means a Transgenic version of any therapeutic
recombinant blood plasma product other than the Initial Product.

1.5 “Affiliate” means any Person who directly or indirectly controls or is
controlled by or is under common control with a Party to this Agreement. For
purposes of this Section 1.5, “control”, “controls”, or “controlled by” means
ownership directly or through one or more Affiliates, of more than fifty percent
(50%) or more of the shares of stock entitled to

 

2

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vote for the election of directors, in the case of a corporation, or more than
fifty percent (50%) of the equity interest in the case of any other type of
legal entity, status as a general partner in any partnership, or any other
arrangement whereby a Party controls or has the right to control the Board of
Directors or equivalent governing body of a corporation or other entity, or the
ability to direct the management or policies of a corporation or other entity.
The Parties acknowledge that in the case of certain entities organized under the
laws of certain countries outside of the United States, the maximum percentage
ownership permitted by law for a foreign investor may be less than fifty percent
(50%), and that in such case such lower percentage shall be substituted in the
preceding sentence, provided that such foreign investor has the power to direct
the management and policies of such entity. For purposes of this Agreement,
LFB/GTC LLC shall be deemed to be an Affiliate of each Operating Party.

1.6 “Agreement” shall have the meaning set forth in the preamble to this
Agreement.

1.7 “Alliance Affecting Core Business” means, with respect to an Operating
Party, a binding agreement between such Operating Party or its Affiliate and a
Third Party for the development and/or commercialization of a product which
(a) if developed or commercialized by the other Operating Party, would be within
the Core Business of such other Operating Party, and (b) Competes with a Core
Business Product of the other Operating Party as listed on Exhibit D.

1.8 “Base Product Term” shall have the meaning set forth in Section 14.1(b).

1.9 “CD20 Antibody” shall have the meaning set forth in the preamble to this
Agreement.

1.10 “CD20 Antibody Product” means a Transgenic version of a therapeutic product
incorporating, based on or derived from the CD20 Antibody.

1.11 “Change of Control” with respect to a Party means (a) a sale of all or
substantially all of such Party’s assets or business to which this Agreement
relates; (b) a merger, reorganization or consolidation involving such Party in
which the stockholders of such Party immediately prior to such transaction cease
to own collectively a majority of the voting equity securities of the successor
entity; or (c) a Person or group of Persons acting in concert acquires more than
fifty percent (50%) of the voting equity securities of such Party. For purposes
of this Agreement, a Party shall be deemed to have undergone a Change of Control
in the event that any of the transactions listed in (a), (b) or (c) above take
place with respect to: (1) an Affiliate of such Party that Controls such Party,
or (2) an Affiliate of such Party whose performance or assets are material to
such Party’s performance of its obligations under this Agreement, including
without limitation those obligations under any Development Plan or
Commercialization Plan hereunder.

1.12 “Co-Exclusive Territory” means the rest of the world outside the European
Territory and the North American Territory, except, in the case of the rFIX
Product, the Co-Exclusive Territory shall be limited to Monaco, Andorra, Mexico
and Japan.

 

3

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1.13 “Collaboration Term” means the term of this Agreement, as set forth in
Section 14.1.

1.14 “Combination Product” shall have the meaning set forth in Section 1.84.

1.15 “Commercial License” shall mean a commercial license agreement,
substantially upon the terms set forth in Exhibit C, that is executed by the
Operating Parties in the circumstances described in Section 8.2(c)(ii).

1.16 “Commercialization” or “Commercialize” means the promotion, detailing, sale
and distribution of a Product in the Territory, including, without limitation,
all LFB Biotech Commercialization Activities and GTC Commercialization
Activities.

1.17 “Commercialization Activities” means the LFB Biotech Commercialization
Activities and/or the GTC Commercialization Activities, as the context suggests.

1.18 “Commercialization Costs” means, with respect to a Product, all direct
external costs and direct internal costs properly incurred or paid by each
Operating Party with respect to such Product plus, to the extent permitted under
Appendix II to Exhibit B indirect costs properly allocated by such Operating
Party as Commercialization Costs, in each case during the Commercialization
Phase for such Product, excluding the specific costs required to achieve the
second Major Regulatory Approval and other costs properly allocated as
Development Costs hereunder. Commercialization Costs shall include, without
limitation, those costs described on Appendix II to Exhibit B, and which are
related to marketing and selling of the Product, and the cost of producing and
distributing Product for sale, sample and other uses approved in the
Commercialization Plan. For the avoidance of doubt, Commercialization Costs
shall exclude any transfer pricing mark-up or other intercompany transactions,
payable by a Party to one of its Affiliates in connection with such Affiliates’
performance of activities under a Commercialization Plan. Subject to Joint
Steering Committee approval, costs incurred for phase IV studies, distribution,
sales force, and any related promotional costs are to be considered
Commercialization Costs. For the avoidance of doubt, (a) any Development Costs,
including without limitation significant costs of expanding a Product’s labeled
indication or approved territory or other costs included in the determination of
Product Participation shall not be included as Commercialization Costs in the
calculation of Net Profits, and (b) Commercialization Costs shall not be
included in the determination of the Product Participation of each Operating
Party, and shall be included in the determination of Net Profits as per Exhibit
B.

1.19 “Commercialization Phase”, with respect to a Product, shall mean the period
commencing upon the first Major Regulatory Approval of such Product and
continuing throughout the remaining Product Term with respect to such Product;
provided that, notwithstanding commencement of the Commercialization Phase,
(a) Development Activities shall continue in other countries or regions of the
Territory until Regulatory Approval has been obtained in all countries or
regions set forth in the applicable Development Plan and (b) certain costs
incurred by the Operating Parties during the Commercialization Phase shall be
allocated as Development Costs as specified herein.

 

4

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1.20 “Commercialization Plan” shall have the meaning set forth in Section 6.1.

1.21 “Commercially Reasonable Efforts” means, with respect to each Operating
Party, commercially reasonable efforts in accordance with such Operating Party’s
business, legal, ethical, medical and scientific judgment, and in accordance
with the efforts and resources such Operating Party would use for a product
owned by it or to which it has rights, which is of similar market potential, at
a similar stage in its product life, taking into account the competitiveness of
the marketplace, the proprietary position of the product, the regulatory
structure involved, the profitability of the product and other relevant factors.

1.22 “Compete”, “Competes” or “Competing” means, with respect to any two
therapeutic products, whether or not one of such products is a Product, and
whether or not one or both of such products is Transgenic, that (a) one such
product which is a ************.

1.23 “Competing Product” means any Transgenic or non-Transgenic therapeutic
product, other than a Product, that Competes with a Product, provided that the
term “Competing Product” shall not include any products that ************.

1.24 “Confidential Information” of a Party means any scientific, technical,
trade or business information possessed, obtained by, developed for or given to
a Party which is treated by such Party as confidential or proprietary,
including, without limitation Research Materials (defined below), formulations,
techniques, methodology, assay systems, formulae, protocols, SOPs, procedures,
tests, equipment, data, reports, know-how, sources of supply, patent
positioning, relationships with consultants and employees, pricing, business
plans and business developments, information concerning the existence, scope or
activities of any research, development, manufacturing or other projects of such
Party (e.g., plans, rationale, competitive strategy or other information related
to developing or marketing products or technology covered by such Party’s
patents, patent applications or published patent applications), and any other
confidential information about or belonging to such Party’s suppliers,
licensors, licensees, partners, Affiliates, customers, potential customers or
others and which is disclosed by such Party to the other Party during the
Collaboration Term. “Research Materials” include, without limitation, genes, DNA
sequences, plasmids, vectors, expression systems, cells, cell lines, organisms,
antibodies, biological substances, and any constituents, progeny, mutants,
derivatives or replications thereof or therefrom, together with all reagents,
chemical compounds or other materials. It is understood and agreed by the
Parties that (a) the GTC Know-How shall be deemed to be the Confidential
Information of GTC for all purposes hereunder, (b) the LFB Biotech Know-How
shall be deemed to be the Confidential Information of LFB Biotech for all
purposes hereunder and (c) the terms of this Agreement shall constitute
Confidential Information of each Party.

1.25 “Control” means, with respect to any information or intellectual property
right, possession by a Party or its Affiliates of the ability (whether by
ownership, license, or otherwise) to grant access, a license, or a sublicense to
such information or intellectual property right without violating the terms of
any agreement or other arrangement with, and without the payment of additional
consideration (other than royalty payments, milestone payments and other amounts
otherwise payable under the relevant agreement) to, any Third Party as of the
time such Party would first be required hereunder to grant the other Party such
access, license, or sublicense.

 

5

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1.26 “Core Business” means (a) with respect to LFB Biotech and its Affiliates,
the development and commercialization of (i) protein obtained from human plasma
fractionation and their recombinant counterparts and (ii) recombinant monoclonal
antibodies with applications in oncology, auto immune diseases, infectious
diseases and graft rejection; and, (b) with respect to GTC and its Affiliates,
the development and commercialization of (i) therapeutic Transgenic protein
products and (ii) recombinant monoclonal antibodies with applications in
oncology, auto immune diseases, infectious diseases and asthma. The applications
for monoclonal antibodies may be extended as provided in the definition of “Core
Business Product”.

1.27 “Core Business Competitor” means, with respect to an Operating Party at the
relevant time, any Third Party that is developing or commercializing one or more
products that (a) if developed or commercialized by such Operating Party would
be within the Core Business of such Operating Party and its Affiliates and
(b) Competes with a Core Business Product of such Operating Party and its
Affiliates.

1.28 “Core Business Competitor Equity Acquisition” means with respect to an
Operating Party (a) the acquisition by a Core Business Competitor of such
Operating Party of more than ************ of the voting equity securities of the
other Operating Party or (b) a Core Business Competitor of such Operating Party
obtaining the right to ************. For purposes of this Agreement, a Core
Business Competitor Equity Acquisition shall be deemed to have occurred with
respect to an Operating Party in the event that any of the transactions listed
in (a) or (b) above take place with respect to: (1) an Affiliate of the other
Operating Party that Controls such other Operating Party, or (2) an Affiliate of
such other Operating Party whose performance or assets are material to such
other Operating Party’s performance of its obligations under this Agreement,
including without limitation those obligations under any Development Plan or
Commercialization Plan hereunder.

1.29 “Core Business Product/Products” means, with respect to an Operating Party
and its Affiliates, a specific product within the Core Business of such
Operating Party and its Affiliates as set forth on Exhibit D as the same shall
be amended in accordance with the following. Each Operating Party shall notify
the other Parties annually of any change in the Core Business Products of such
Operating Party and its Affiliates, together with adequate supporting
documentation, and, absent a dispute, Exhibit D shall be amended to reflect such
change subject to the following conditions: (i) neither Operating Party shall be
required to delete any product which is ************; (ii) any ************
product ************ may be added to or deleted from Exhibit D by either
Operating Party without restriction provided that in the case of an addition
such product is under development or being commercialized by such Operating
Party or its Affiliates; (iii) an Operating Party may add a ************ product
to Exhibit D only if such product meets any one of the following criteria:
(A) For products in the stage of research or development, (1) such Operating
Party and its Affiliates have spent in the preceding year at least ************
for research and/or development of such product, or (2) such Operating Party or
its Affiliates have developed a

 

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scalable manufacturing asset for such product, either through Transgenic process
or a cell line, or (3) such product is in a pre-clinical research program at a
stage that is reasonably expected to be within ************ of initiation of
human clinical trials or (4) such product has been licensed from an outside
institution, including a university or a company or partnership, provided that
if after ************ of the license term such licensed product does not also
satisfy either criteria, (2) or (3) above or the criteria set forth in the
following clause (B) or such Operating Party or its Affiliates have not spent at
least ************ in total during such ************ period on research and/or
development of such product (such amount not to include license fees payable to
the relevant outside institution), then such product shall be deleted from
Exhibit D; and (B) for products in the stage of commercialization a product
which, on an annual basis accounts for more than ************ of such Operating
Party’s or its Affiliates’ revenues, whether from sales, product milestones,
royalties or other product revenues; and (iv) an Operating Party shall delete a
************ product from Exhibit D if for the preceding year it has not met any
of the criteria set forth in the foregoing clauses (iii)(A) or (B). If a
recombinant monoclonal antibody product of an Operating Party or its Affiliates
would be eligible for addition to Exhibit D but is for an application not
covered in the definition of “Core Business” of such Operating Party and its
Affiliates, then such product may be added to Exhibit D and for so long as such
product remains on Exhibit D the definition of “Core Business” of such Operating
Party and its Affiliates shall be deemed amended to include such application.

1.30 “Damages” shall have the meaning set forth in Section 13.1.

1.31 “Development” or “Develop” means all activities performed by GTC or LFB
Biotech on behalf of LFB/GTC LLC pursuant to the Development Plan with respect
to a Product during the Development Phase, including, without limitation, all
activities related to preclinical testing, DNA construct discovery and
development, animal development and maintenance, test method development and
stability testing, toxicology, formulation, process development, manufacturing
scale-up, qualification and validation, quality assurance/quality control,
clinical studies (from Phase I Trials through Phase III Trials), regulatory
affairs, statistical analysis and report writing, and all other pre-marketing
activities, each to the extent performed pursuant to the Development Plan.

1.32 “Development Activities” means, collectively or individually, as the
context suggests, the LFB Biotech Development Activities and the GTC Development
Activities, as the context suggests.

1.33 “Development Costs”, for purposes of determining an Operating Party’s
Product Participation with respect to any Product under Section 8.2(b), shall
mean all direct external costs and direct internal costs properly paid or
incurred by such Operating Party in connection with the Development of such
Product, plus, to the extent permitted under Appendix I to Exhibit B, indirect
costs properly allocated by such Operating Party to the Development of such
Product, in each case during the Development Phase or thereafter as expressly
provided herein. Development Costs shall include, without limitation, all
Pre-Marketing Costs and the cost of producing and distributing Product for
preclinical, clinical and other uses approved in the Development Plan in
addition to those other costs set forth on Appendix I to Exhibit B, in each case
that are incurred in the performance of Development activities under the
Development Plan.

 

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1.34 “Development Phase” shall mean, with respect to a Product, the period
commencing upon the Product Start Date for such Product and continuing until the
first Major Regulatory Approval for such Product; provided that certain costs
incurred after the Development Phase shall be treated as Development Costs if
specified herein or agreed to in writing in advance by the Joint Steering
Committee.

1.35 “Development Plan” shall have the meaning set forth in Section 5.1.

1.36 “Disclosing Party” shall have the meaning set forth in Section 12.1.

1.37 “Dispute” shall have the meaning set forth in Section 15.1.

1.38 “ECB” means the European Central Bank.

1.39 “Effective Date” shall mean the effective date of the Original JDA,
June 29, 2006.

1.40 “EMEA” means the European Agency for the Evaluation of Medicinal Products,
or any successor organization.

1.41 “European Territory” means the member states (as of the Effective Date) of
the European Union, as well as Switzerland, Norway, Lichtenstein, Iceland,
Bulgaria,, Romania, Croatia, Serbia, Montenegro, Slovenia, Bosnia, Macedonia,
Albania, Turkey, Byelorussia, Ukraine and Moldavia and each of their respective
territories and possessions, except, in the case of the rFIX Product, the
European Territory shall exclude Turkey and Ukraine.

1.42 “FDA” means the United States Food and Drug Administration, or any
successor organization.

1.43 “First Commercial Sale” means the first commercial sale of a Product by or
on behalf of an Operating Party or its Affiliate in a country as part of a
nationwide introduction after Regulatory Approval has been achieved for such
Product in such country. Sales for test marketing, clinical trial purposes or
compassionate or similar use shall not be considered to constitute a First
Commercial Sale.

1.44 “FTE” shall have the meaning set forth in Section 5.2(b).

1.45 “Fully Absorbed Cost of Goods” means, with respect to a Product and the
Operating Party responsible for manufacturing or supplying such Product, (a) the
variable costs and fixed costs incurred by such Operating Party associated with
the manufacture (inclusive of finishing processes including filling, packaging,
labeling and/or other preparation), quality assurance, quality control and other
testing, storage and shipping of batches of such Product or (b) if such Product
is not manufactured by such Operating Party, the amounts paid to a Third Party
manufacturer for the manufacture of such Product plus, to

 

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the extent not included in the amounts paid to such Third Party manufacturer,
the actual costs associated with the acquisition of shipments of Product from
such Third Party manufacturer. For purposes of this definition, “variable costs”
means the cost of labor, raw materials, scrap (being product losses normally
recorded in the process of manufacturing and to the exclusion of abnormal waste,
spillage, processing, handling or idle facility costs), supplies and other
resources directly consumed in the manufacture, quality assurance, quality
control and other testing, storage and shipping of batches of the applicable
Product, and “fixed costs” means the cost of facilities, utilities, insurance
(including any product liability insurance or accrual for self-insurance),
facility and equipment depreciation (unless the capital cost of such facility or
equipment has been directly charged to the program), manufacturing overhead
(cost accounting, personnel management, and information technology), and other
fixed costs directly related to the manufacture, quality assurance, quality
control and other testing, storage and shipping of batches of such Product, as
well as amounts required to be paid to Third Parties in connection with the
manufacture, use, sale, offer for sale or import of such Product to the extent
not otherwise included as Development Costs or Commercialization Costs of such
Operating Party. Fixed costs shall be allocated to such Product based upon the
proportion of such costs directly attributable to support of the manufacturing,
quality assurance, quality control and other testing, storage and shipping
processes for such Product. If a facility is used to manufacture Products and
has the capacity to manufacture products for other programs of such Operating
Party, fixed costs shall be allocated in proportion to the actual use of such
facility for the manufacture of Products and the capacity to manufacture
products for such other programs. For the avoidance of doubt, no idle capacity
of a manufacturing facility, or a proportionate use thereof, shall be included
in Fully Absorbed Cost of Goods except, in the case of a facility dedicated
solely to the manufacture of Products, it shall be included to the extent the
JSC determines that such facility is appropriately sized. Fully Absorbed Cost of
Goods shall exclude all costs otherwise covered under Development Costs or
Commercialization Costs. Unless otherwise expressly provided in this Agreement,
all cost determinations made in the calculation of Fully Absorbed Cost of Goods
shall be in accordance with the Operating Parties’ respective Accounting
Standards, consistently applied.

1.46 “GMP” means the current Good Manufacturing Practices of the FDA or any
similar practice standards promulgated by applicable Regulatory Authorities with
jurisdiction over the manufacture, use, or sale of Product, as then in effect.

1.47 “Greater Funding Party” means, with respect to a Product, an Operating
Party that has funded more than ************ of the costs of Development of such
Product hereunder as of or after the date the Product Participation percentages
of the Operating Parties are first set pursuant to Section 8.2(b), and prior to
full reimbursement to such Operating Party of any IPV Difference in accordance
with Section 8.2(d).

1.48 “GTC Assumed Liability” shall have the meaning set forth in Section 13.2.

1.49 “GTC Commercialization Activities” means, with respect to a Product, the
designated Commercialization activities undertaken by GTC on behalf of LFB/GTC
LLC as specified in the Commercialization Plan for such Product.

 

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1.50 “GTC Development Activities” shall have the meaning set forth in
Section 5.2(c).

1.51 “GTC Indemnitee” shall have the meaning set forth in Section 13.1.

1.52 “GTC Know-How” means all Know-How that is Controlled by GTC or its
Affiliates as of the Effective Date or during the Collaboration Term that is
necessary or reasonably useful for the Development and/or Commercialization of
Products under this Agreement.

1.53 “GTC Patent Rights” means all Patent Rights Controlled by GTC or its
Affiliates as of the Effective Date or during the Collaboration Term the
practice of whose claims are necessary or useful to the Development and/or
Commercialization of Products under this Agreement, excluding Joint Patent
Rights.

1.54 “GTC Technology” means, collectively, GTC Know-How and GTC Patent Rights.

1.55 “Indemnified Party” shall have the meaning set forth in Section 13.3.

1.56 “Indemnifying Party” shall have the meaning set forth in Section 13.3.

1.57 “Initial Collaboration Term” shall have the meaning set forth in
Section 14.1(a).

1.58 “Initial Development Plan” shall have the meaning set forth in Section 5.1.

1.59 “Initial Product” means a Transgenic version of a therapeutic product
incorporating, based on or derived from rFVIIa.

1.60 “Insolvency Event” means, with respect to an Operating Party, (a) such
Operating Party’s 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 its property, or filing a petition to
take advantage of any laws affecting debtors generally, in each of the foregoing
cases only if it is directed to and will result in liquidation of such Operating
Party, or (b) the commencement against such Operating Party of any case,
proceeding or other action seeking the adjudication of such Operating 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 Operating Party of all or any
substantial part of the property of such Operating 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, in each of the foregoing cases only if it is directed to
and will result in liquidation of such Operating Party.

1.61 “Invention” means any invention or discovery, whether or not patentable,
made as a result of the activities of a Party or the Parties pursuant to this
Agreement, which invention or discovery relates to a Product in any manner,
including, but not limited to, any invention or discovery relating to the
making, using or selling of a Product.

 

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1.62 “Investment Present Value” or “IPV” means, with respect to a Product, the
net present value of the Operating Parties’ Development Costs for such Product
during the period commencing on the Product Start Date for such Product and
ending on the date of the first Major Regulatory Approval for such Product, as
calculated in accordance with the applicable Product Participation Model, and
subject to adjustment pursuant to Section 8.2(b)(iv).

1.63 “IPV Difference” means, with respect to a Product, the difference between a
Greater Funding Party’s IPV and the IPV if the Development Costs of such Product
were shared ************, taking into consideration the weighting of Development
Costs set forth in Section 8.2(b)(ii).

1.64 “IPV Payment” has the meaning set forth in Section 14.3(a)(iv).

1.65 “Joint Inventions” shall have the meaning set forth in Section 9.1(b).

1.66 “Joint Patent Rights” shall have the meaning set forth in Section 9.1(b).

1.67 “Joint Steering Committee” or “JSC” shall have the meaning set forth in
Section 4.1.

1.68 “Joint Technology” means the Joint Patent Rights and any Joint Inventions.

1.69 “Keepwell Agreement” has the meaning set forth in the Preamble to this
Agreement.

1.70 “Know-How” means any information or materials (whether or not proprietary
or patentable and whether stored or transmitted in oral, documentary, electronic
or other form), including, without limitation, ideas, concepts, formulas,
methods, procedures, designs, compositions, plans, documents, data, inventions,
discoveries, developments, works of authorship, biological materials, and any
information relating to research and development plans, experiments, results,
compounds, therapeutic leads, candidates and products, clinical and preclinical
data, toxicological data, pharmacological data, formulations, trade secrets and
manufacturing, marketing, financial, regulatory, personnel, customer sales and
invoicing and other business information and plans, and any scientific,
clinical, regulatory, marketing, financial and commercial information or data
which relates to a Product in any manner.

1.71 “LFB Biotech Assumed Liability” shall have the meaning set forth in
Section 13.1.

1.72 “LFB Biotech Commercialization Activities” means, with respect to a
Product, the designated Commercialization activities undertaken by LFB Biotech
on behalf of LFB/GTC LLC as specified in the Commercialization Plan for such
Product.

1.73 “LFB Biotech Development Activities” shall have the meaning set forth in
Section 5.2(b).

1.74 “LFB Biotech Indemnitees” shall have the meaning set forth in Section 13.2.

 

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1.75 “LFB Biotech Know-How” means all Know-How that is Controlled by LFB Biotech
or its Affiliates as of the Effective Date or during the Collaboration Term that
is necessary or reasonably useful for the Development and/or Commercialization
of Products under this Agreement.

1.76 “LFB Biotech Patent Rights” means all Patent Rights Controlled by LFB
Biotech or its Affiliates as of the Effective Date or during the Collaboration
Term the practice of whose claims are necessary or useful to the Development
and/or Commercialization of Products under this Agreement, excluding Joint
Patent Rights.

1.77 “LFB Biotech Technology” means, collectively, LFB Biotech Know-How and LFB
Biotech Patent Rights.

1.78 “LFB Licensed Technology” means, collectively, LFB Biotech Technology and
LFB Biotech’s and LFB-US’s rights in any and all Joint Technology.

1.79 “LLC Agreement” means the agreement between GTC and LFB-US dated as of
June 30, 2008 establishing and governing LFB/GTC LLC.

1.80 “Major Market EU Countries” means, individually and collectively, France,
Germany, Italy, Spain and the United Kingdom.

1.81 “Major Regulatory Approval” means a Regulatory Approval from the FDA or the
EMEA.

1.82 “Major Regulatory Filing” means a Regulatory Filing with the FDA or the
EMEA.

1.83 “Net Profits” means, with respect to a Product for a particular reporting
period, aggregate profits or losses resulting from the Commercialization of such
Product worldwide and shall be equal to (a) worldwide Net Sales of and any other
revenues relating to such Product for such period, including without limitation
any royalties, sublicense income or other payments received from Third Parties,
less (b) Commercialization Costs for such Product, before income taxes. For the
avoidance of doubt, Net Profits will be determined by the Parties on a
consolidated basis exclusive of any inter-company profits or mark-up between the
Parties and/or their Affiliates and will be shared based on each Operating
Party’s Product Participation as described in Section 8.2.

1.84 “Net Sales” means, with respect to a Product, the net sales on behalf of an
Operating Party or any Affiliate, licensee or sublicensee of such Operating
Party, for the Product sold to Third Parties (other than licensees or
sublicensees) in bona fide, arm’s-length transactions, as determined in
accordance with applicable IFRS Accounting Standards, as consistently applied,
and which shall include the following customary deductions from the invoiced
sale price, as generally and consistently applied by an Operating Party:

(a) ************.

 

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(b) ************.

(c) ************.

(d) ************.

(e) ************.

(f) ************.

(g) ************.

(h) ************.

(i) ************.

(j) ************.

(k) ************.

************.

************.

************.

1.85 “North American Territory” means the United States and Canada, and their
respective territories and possessions.

1.86 “Operating Party” or “Operating Parties” means GTC or LFB Biotech, or both,
as the context shall suggest, each of which is undertaking the Development and
Commercialization efforts of the Collaboration on behalf of LFB/GTC LLC as set
forth in this Agreement.

1.87 “Originating Party” means, with respect to a Product, the Operating Party
responsible for introducing such Product to the Collaboration under this
Agreement. The Parties acknowledge and agree that LFB Biotech is the Originating
Party of the Initial Product and GTC is the Originating Party of any rhAAT
Products.

1.88 “Party” and/or “Parties” shall have the respective meanings set forth in
the preamble to this Agreement.

1.89 “Patent Rights” means any patent applications and any divisions,
continuations, or continuations-in-part thereof, and any patents issuing thereon
and all substitutions, reissues, reexaminations and extensions thereof and
supplemental protection certificates relating thereto, and all counterparts of
the foregoing in any country.

 

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1.90 “Person” means any natural person, corporation, firm, business trust, joint
venture, association, organization, company, partnership, or other business
entity, or any government, or any agency or political subdivision thereof.

1.91 “Phase I Trial” means a clinical trial as defined in 21 C.F.R 312.21(a), as
may be amended from time to time, or any non-US equivalent thereto, in each case
that is designed to determine the metabolism and pharmacologic actions of the
applicable Product in humans, the side effects associated with increasing doses,
and, if possible, to gain early evidence on effectiveness.

1.92 “Phase II Trial” means a clinical trial as defined in 21 C.F.R. 312.21(b),
as may be amended from time to time, or any non-US equivalent thereto, in each
case that is designed to assess the clinical efficacy of the applicable Product
for a particular indication or indications and to determine the common
side-effects and safety risks associated with the use of such Product.

1.93 “Phase III Trial” means a clinical trial as defined in 21 C.F.R. 312.21(c),
as may be amended from time to time, or any non-US equivalent thereto, in each
case that is designed to gather additional information about the efficacy,
tolerability and safety of the applicable Product that is needed to evaluate the
overall benefit-risk relationship of the Product and to provide an adequate
basis for physician labeling.

1.94 “Pivotal Trial” means, with respect to a Product, a Phase III Trial or
other clinical trial, the results of which are identified by the JSC as the
essential data from which a Regulatory Authority will determine whether to grant
Regulatory Approval for such Product.

1.95 “Pivotal Trial Completion Date” means, with respect to a Product, the date
of the JSC’s decision that the results of the Pivotal Trial are adequate to
support a Regulatory Filing for purposes of obtaining the first Major Regulatory
Approval for such Product.

1.96 “Pre-Marketing Costs” means all costs related to market research and
development, strategic market plans, strategic product positioning, pricing
studies, inventory build and all other pre-approval activities, each to the
extent performed pursuant to the Development Plan. As part of Development Costs,
Pre-Marketing Costs should be approved by the Joint Steering Committee and
reflected in the Development Plan. For the avoidance of doubt, Pre-Marketing
Costs approved and incurred are included as Development Costs for the
calculation of Product Participation.

1.97 “Product” or “Products” means one or more of the following, as the context
suggests: (a) the Initial Product, (b) the rhAAT Product, (c) the rFIX Product,
(d) the CD20 MAb Product and (e) (i) any Additional Plasma Products and (ii) any
Additional MAb Products, and that are, with respect to (e)(i) and (ii), selected
by the Parties for inclusion in the Collaboration hereunder pursuant to
Section 2.1.

1.98 “Product Participation” shall have the meaning set forth in Section 8.2(a).

 

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1.99 “Product Participation Model” means, with respect to a Product, the model
agreed upon by the Operating Parties, substantially in the form attached as
Exhibit B hereto, for calculating the Operating Parties’ respective
contributions to the Development of such Product and, based upon such
contributions, determining the percentage of each Operating Party’s respective
participation in the aggregate Net Profits that are derived from such Product,
all as more fully described in Section 8.2.

1.100 “Product Start Date” means, (a) with respect to the Initial Product, the
Effective Date, and (b) with respect to any other Products, the date the
relevant Product becomes subject to this Agreement pursuant to Section 2.1.

1.101 “Product Trademark” shall have the meaning set forth in Section 10.1(a).

1.102 “Product Term” shall have the meaning set forth in Section 14.1(b)(iii).

1.103 “Publishing Party” shall have the meaning set forth in Section 12.5(a).

1.104 “rFIX” shall have the meaning set forth in the preamble to this Agreement.

1.105 “rFIX Product” means the Transgenic version of any therapeutic product
incorporating, based on or derived from rFIX.

1.106 “rFVIIa” means recombinant human blood factor VIIa.

1.107 “rFVIIa Goat” means a transgenically modified goat that produces rFVIIa in
its milk.

1.108 “rFVIIa Rabbit” means a transgenically modified rabbit that produces
rFVIIa in its milk.

1.109 “Recall” means the removal or correction of a marketed Product that the
FDA, EMEA or an equivalent Regulatory Authority considers to be in violation of
law and against which a Regulatory Authority would otherwise initiate legal
action (e.g., a seizure).

1.110 “Receiving Party” shall have the meaning set forth in Section 12.1.

1.111 “Regulatory Approvals” mean any approvals, licenses, registrations or
authorizations (including pricing and reimbursement approvals) of any Regulatory
Authority, whether or not conditional, that are necessary for the commercial
sale of a Product in a regulatory jurisdiction in the Territory.

1.112 “Regulatory Authority” means any and all national, supra-national,
regional, state, or local regulatory agency, department, bureau, commission,
council, or other governmental entity, whose approval or authorization is
necessary for, or to whom notice must be given prior to, the manufacture,
distribution, use, or sale of a Product in the Territory, including, without
limitation, the FDA and the EMEA.

 

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1.113 “Regulatory Filings” mean all applications, filings, dossiers and the like
submitted to a Regulatory Authority in the Territory for the purpose of
obtaining a Regulatory Approval from such Regulatory Authority in the Territory.

1.114 “Restatement Date” means the date set forth in the preamble of this
Agreement.

1.115 “rhAAT” shall have the meaning set forth in the preamble to this
Agreement.

1.116 “rhAAT Product” means the Transgenic version of any therapeutic product
incorporating, based on or derived from rhAAT.

1.117 “Senior Management” means, for a Party, the Chief Executive Officer or a
senior executive who is designated by the Chief Executive Officer of such Party.

1.118 “Shared Liability Claims” shall have the meaning set forth in
Section 13.4(a).

1.119 “Specifications” shall have the meaning set forth in Section 7.3.

1.120 “Stock and Note Purchase Agreement” shall have the meaning set forth in
Section 8.1.

1.121 “Supply Agreement” means, with respect to a Product, a definitive
agreement executed between the Operating Parties to govern the terms and
conditions of manufacture and supply of such Product hereunder.

1.122 “Target Antigen” means the ************.

1.123 “Target Receptor” means the ************.

1.124 “Territory” means, individually or collectively, as the context shall
suggest, the European Territory, the North American Territory and the
Co-Exclusive Territory.

1.125 “Third Party” means any person or entity (including, without limitation,
any governmental authority) other than a Party or its Affiliates.

1.126 “Third Party Claims” shall have the meaning set forth in Section 13.1.

1.127 “Trademark Owner” shall mean the Operating Party owning a Product
Trademark pursuant to Section 10.1.

1.128 “Trademark User” shall have the meaning set forth in Section 3.4.

 

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1.129 “Transgenic” means, with respect to any therapeutic product, including
without limitation a Product, that such product was produced or derived from
transgenically modified animals.

1.130 “United States”, “US” or “USA” shall mean the United States of America and
its territories and possessions, including without limitation the Commonwealth
of Puerto Rico and the U.S. Virgin Islands.

1.131 “Unsettled Shared Damages” shall have the meaning set forth in
Section 13.4.

ARTICLE 2

SCOPE OF COLLABORATION; JOINT OBLIGATIONS; DILIGENCE

2.1 Scope of Collaboration.

(a) General. LFB Biotech, GTC, LFB/GTC LLC and LFB-US have established in this
Agreement and the LLC Agreement and wish to continue a collaborative alliance to
Develop and Commercialize Products in the Territory on behalf of LFB/GTC LLC and
using LFB/GTC LLC as a vehicle for such Collaboration, all as more specifically
described herein, the LLC Agreement and in the applicable Development Plan and
Commercialization Plan. Without limiting the foregoing, the Parties agree to:
(i) engage in Development of Products on behalf of LFB/GTC LLC, with the goal of
obtaining Regulatory Approval for each Product as soon as reasonably practicable
in each market where it makes commercial sense to do so given the size of the
potential market and the safety and efficacy profile of the relevant Product;
and (ii) engage in Commercialization of Products on behalf of LFB/GTC LLC, with
the goal of optimizing the profit available to each Party. Each Party agrees to
use Commercially Reasonable Efforts in performing its tasks and responsibilities
and in conducting all activities ascribed or assigned to it from time to time
under this Agreement, the then current Development Plan, and the then current
Commercialization Plan with respect to each Product.

(b) Initial Product. The Parties shall continue to collaborate to Develop and
Commercialize the Initial Product on behalf of LFB/GTC LLC, in accordance with
the terms and conditions of this Agreement, the LLC Agreement, the Initial
Development Plan and the Commercialization Plan for the Initial Product.

(c) Other Products in Development. As of the Restatement Date, the Operating
Parties have begun to collaborate to Develop CD20 MAb, rhAAT and rFIX Products,
and the Parties shall continue to collaborate to Develop and Commercialize the
CD20 Product, the rhAAT Product and the rFIX Product on behalf of LFB/GTC LLC,
in accordance with this Agreement, the LLC Agreement and the respective
Development Plan and Commercialization Plan for each such Product.

 

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(d) Additional Plasma Products.

(i) Either Operating Party may, from time to time during the Term, but is not
obligated to, propose to the non-Originating Party for inclusion in the
Collaboration under this Agreement and the LLC Agreement any Additional Plasma
Products that such Operating Party believes are reasonably likely to enhance the
goals of the Collaboration.

(ii) The Originating Party may propose such Additional Plasma Product for
inclusion in the Collaboration by providing the non-Originating Party with a
written proposal for the Development of such Additional Plasma Product, and the
non-Originating Party shall have ************ following the receipt of such
proposal to inform the Originating Party whether or not it wishes to include
such Additional Plasma Product as a Product under this Agreement and the LLC
Agreement.

(iii) If the non-Originating Party notifies the Originating Party in writing
within such ************ day period that it wishes to include such Additional
Plasma Product under this Agreement and the LLC Agreement, the Operating Parties
shall negotiate in good faith for a period not to exceed ************, or such
longer time as the Parties may mutually agree, a preliminary Development Plan
with respect to such Additional Plasma Product, which Development Plan shall
include a preliminary Development budget. If the Operating Parties reach
agreement on a Development Plan for such Additional Plasma Product within such
time period or such longer time period as the Operating Parties may mutually
agree, such Additional Plasma Product shall become subject to this Agreement and
the LLC Agreement as a “Product” hereunder and thereunder.

(iv) If (a) the non-Originating Party (1) notifies the Originating Party that it
does not wish to pursue the Development or Commercialization of such Additional
Plasma Product hereunder, or (2) does not notify the Originating Party in
writing within such ************ period of its intention whether or not to
include such Additional Plasma Product hereunder, or (b) the non-Originating
Party timely notifies the Originating Party that it wishes to pursue such
Additional Plasma Product hereunder, but the Operating Parties are unable to
agree in good faith upon a Development Plan for the proposed Additional Plasma
Product within the time frame provided in subsection (iii) above, the
Originating Party may pursue the development and commercialization of such
Additional Plasma Product unilaterally or negotiate and enter into an agreement
with any Third Party for the development and commercialization of such
Additional Plasma Product with no further obligation to the non-Originating
Party or LFB/GTC LLC with respect thereto, subject to the provisions of
Section 3.10.

(e) Additional MAb Products.

(i) Either Operating Party may, from time to time during the Term, but is not
obligated to, propose to the non-Originating Party for inclusion in the
Collaboration under this Agreement and the LLC Agreement any Additional MAb
Products that such Operating Party believes are reasonably likely to enhance the
goals of the Collaboration.

 

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(ii) The Originating Party may propose an Additional MAb Product for inclusion
in the Collaboration by providing the non-Operating Party with a written
proposal for the Development of such MAb Product and the non-Originating Party
shall have ************ following the receipt of such proposal to inform the
Originating Party whether or not it wishes to include such MAb Product as a
Product under this Agreement and the LLC Agreement.

(iii) If the non-Originating Party notifies the Originating Party in writing
within such ************ period that it wishes to include such Additional MAb
Product under this Agreement and the LLC Agreement, the Operating Parties shall
negotiate in good faith for a period not to exceed ************, or such longer
time as the Operating Parties may mutually agree, a preliminary Development Plan
with respect to such Additional MAb Product, which Development Plan shall
include a preliminary Development budget. If the Operating Parties reach
agreement on a Development Plan for such MAb Product within such time period or
such longer time period as the Operating Parties may mutually agree, such
Additional MAb Product shall become subject to this Agreement and the LLC
Agreement as a “Product” hereunder and thereunder.

(iv) If (a) the non-Originating Party (1) notifies the Originating Party that it
does not wish to pursue the Development or Commercialization of such Additional
MAb Product hereunder, or (2) does not notify the Originating Party in writing
within such ************ period of its intention whether or not to include such
Additional MAb Product hereunder, or (b) the non-Originating Party timely
notifies the Originating Party that it wishes to pursue such Additional MAb
Product hereunder, but the Operating Parties are unable to agree in good faith
upon a Development Plan for the proposed Additional MAb Product within the time
frame provided in subsection (iii) above, the Originating Party may pursue the
development and commercialization of such Additional MAb Product unilaterally or
negotiate and enter into an agreement with any Third Party for the development
and commercialization of such Additional MAb Product with no further obligation
to the non-Originating Party or LFB/GTC LLC with respect thereto, subject to the
provisions of Section 3.10.

2.2 Conduct of Parties. Each Operating Party understands and agrees that it is
to its mutual benefit and the benefit of LFB/GTC LLC to maximize the clinical
and commercial potential of the Products. Each Operating Party shall conduct
itself and its activities hereunder consistent with that understanding and with
sound and ethical business and scientific practices, and in accordance with the
applicable Development Plan and Commercialization Plan, provided that the
foregoing shall not limit the activities of the Operating Parties with respect
to any product that is not a Product or a Competing Product and is not otherwise
subject to Section 3.10.

2.3 Assistance. Each Party agrees to provide to the other Parties all reasonable
assistance and take all actions reasonably requested by the other Parties that
are necessary to enable the requesting Party to comply with its obligations
under this Agreement and the LLC Agreement or otherwise meet the mutual
objectives of the Parties set forth in Section 2.2 above, or with any applicable
law or regulation.

2.4 Product List. Exhibit A attached hereto sets forth the Products under
Development pursuant to this Agreement as of the Restatement Date. As other
Products become subject to this Agreement as provided above, Exhibit A shall be
updated by including such other Products.

 

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ARTICLE 3

GRANT OF RIGHTS

Superseded Licenses; Restatement. All licenses granted under Article 3 of the
Original JDA are hereby superseded by the following licenses and sublicenses
granted pursuant to this Agreement.

3.1 LFB Biotech License to LFB-US. LFB Biotech shall grant LFB-US an exclusive
license in and to the LFB Licensed Technology.

3.2 LFB-US Sublicense Grant to LFB/GTC LLC.

(a) Research and Development License. Subject to the terms and conditions of
this Agreement and in consideration of the mutual covenants and the other good
and valuable consideration contained herein and in the LLC Agreement, LFB-US
hereby grants to LFB/GTC LLC an exclusive (even as to LFB-US) right and
sublicense during the Term, with the right to grant additional sublicenses as
described below, in the Territory, under the LFB Licensed Technology, to:

(i) with respect to the Initial Product, (A) create and breed one or more herds
of rFVIIa Rabbits and/or rFVIIa Goats and use such rFVIIa Rabbits and/or rFVIIa
Goats to produce rFVIIa for use in making the Initial Product and (B) Develop,
make and have made the Initial Product, all in accordance with applicable laws
and regulations and the Initial Development Plan; and

(ii) with respect to subsequent Product(s), (A) create and breed one or more
herds of transgenic mammals, and use such transgenic mammals to produce material
for use in making such Product(s) and (B) Develop, make and have made
Product(s), all in accordance with applicable laws and regulations and the
applicable Development Plan.

(b) Commercialization License. Subject to the terms and conditions of this
Agreement and in consideration of the mutual covenants and the other good and
valuable consideration contained herein and in the LLC Agreement, LFB-US hereby
grants to LFB/GTC LLC an exclusive (even as to LFB-US) right and sublicense,
with the right to grant additional sublicenses as described below, in the
Territory, during the Term, commencing upon the Commercialization Phase with
respect to the applicable Product, under the LFB Licensed Technology, to:

(i) with respect to the Initial Product, sell, offer for sale, and import the
Initial Product, all in accordance with applicable laws and regulations and the
applicable Commercialization Plan; provided, that, if a Regulatory Authority
requires a second site for the production of the Initial Product, such license
shall be extended to the use of rFVIIa Rabbits and rFVIIa Goats to manufacture
commercial quantities of rFVIIa and to the making of the Initial Product for
distribution and sale in the Territory; and

 

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(ii) with respect to subsequent Product(s), (A) use transgenic mammals created
pursuant to the license under Section 3.2(a)(ii) to manufacture commercial
quantities of material for use in the manufacture of Product(s) and (B) make,
have made, sell, offer for sale, and import Product(s), all in accordance with
applicable laws and regulations and the applicable Commercialization Plan.

3.3 GTC License Grant to LFB/GTC LLC.

(a) Research and Development License. Subject to the terms and conditions of
this Agreement and in consideration of the mutual covenants and the other good
and valuable consideration contained herein and in the LLC Agreement, GTC hereby
grants to LFB/GTC LLC an exclusive (even as to GTC) right and license during the
Term, with the right to grant sublicenses as described below, in the Territory,
under the GTC Technology and GTC’s interest in any and all Joint Technology, to:

(i) with respect to the Initial Product, (A) create and breed one or more herds
of rFVIIa Rabbits and/or rFVIIa Goats and use such rFVIIa Rabbits and/or rFVIIa
Goats to produce rFVIIa for use in making the Initial Product and (B) Develop,
make and have made the Initial Product, all in accordance with applicable laws
and regulations and the Initial Development Plan; and

(ii) with respect to subsequent Product(s), (X) create and breed one or more
herds of transgenic mammals, and use such transgenic mammals to produce material
for use in making such Product(s) and (Y) Develop, make and have made
Product(s), all in accordance with applicable laws and regulations and the
applicable Development Plan.

(b) Commercialization License. Subject to the terms and conditions of this
Agreement and in consideration of the mutual covenants and the other good and
valuable consideration contained herein and in the LLC Agreement, GTC hereby
grants to LFB/GTC LLC an exclusive (even as to GTC) right and license, with the
right to grant sublicenses as described below, in the Territory, during the
Term, commencing upon the Commercialization Phase with respect to the applicable
Product, under the GTC Technology and GTC’s interest in any and all Joint
Technology, to:

(i) with respect to the Initial Product, sell, offer for sale, and import the
Initial Product all in accordance with applicable laws and regulations and the
applicable Commercialization Plan; provided, that, if a Regulatory Authority
requires a second site for the production of the Initial Product, such license
shall be extended to the use of rFVIIa Rabbits and rFVIIa Goats to manufacture
commercial quantities of rFVIIa and to the making of the Initial Product for
distribution and sale in the Territory; and

 

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(ii) with respect to subsequent Product(s), (A) use transgenic mammals created
pursuant to the license under Section 3.3(a)(ii) to manufacture commercial
quantities of material for use in the manufacture of Product(s) and (B) make,
have made, sell, offer for sale, and import Product(s), all in accordance with
applicable laws and regulations and the applicable Commercialization Plan.

3.4 Sublicenses to GTC

(a) Research and Development Sublicense. Subject to the terms and conditions of
this Agreement, LFB/GTC LLC hereby grants to GTC a co-exclusive (together with
LFB Biotech) right and sublicense during the Term, in the Territory, under the
LFB Licensed Technology, the GTC Technology and GTC’s interest in any and all
Joint Technology, in each case, to the extent licensed to LFB/GTC LLC pursuant
to Section 3.2 and/or 3.3, to:

(i) with respect to the Initial Product, (A) create and breed one or more herds
of rFVIIa Rabbits and/or rFVIIa Goats and use such rFVIIa Rabbits and/or rFVIIa
Goats to produce rFVIIa for use in making the Initial Product and (B) Develop,
make and have made the Initial Product, all in accordance with applicable laws
and regulations and the Initial Development Plan; and

(ii) with respect to subsequent Product(s), (X) create and breed one or more
herds of transgenic mammals, and use such transgenic mammals to produce material
for use in making such Product(s) and (Y) Develop, make and have made
Product(s), all in accordance with applicable laws and regulations and the
applicable Development Plan.

(b) Commercialization Sublicense. Subject to the terms and conditions of this
Agreement, LFB/GTC LLC hereby grants to GTC an exclusive or co-exclusive (as
described below) right and sublicense during the Term, commencing upon the
Commercialization Phase with respect to the applicable Product, under the LFB
Licensed Technology; the GTC Technology and GTC’s interest in any and all Joint
Technology, in each case, to the extent licensed to LFB/GTC LLC pursuant to
Section 3.2 and/or 3.3, to:

(i) with respect to the Initial Product, (A) use the rFVIIa Rabbits and/or
rFVIIa Goats to manufacture commercial quantities of rFVIIa, (B) make, have
made, sell, offer for sale, and import the Initial Product in the North American
Territory, (C) subject to Section 3.6, in cooperation with LFB Biotech and
LFB/GTC LLC, make, have made, sell, offer for sale, and import the Initial
Product in the Co-Exclusive Territory, and (D) make, have made, and sell Initial
Product to LFB-US and LFB Biotech for further distribution and sale by LFB-US
and LFB Biotech in the European Territory, all in accordance with applicable
laws and regulations and the applicable Commercialization Plan; and

(ii) with respect to subsequent Product(s), (A) use transgenic mammals created
pursuant to the sublicense under Section 3.4(a)(ii) to manufacture commercial
quantities of material for use in the manufacture of Product(s), (B) make, have
made, sell, offer for sale, and import Product(s) in the North American
Territory, (C) subject to Section 3.6, in cooperation with LFB Biotech and
LFB/GTC LLC, make, have made, sell, offer for sale, and import Product(s) in the
Co-Exclusive Territory, and (D) make, have made, and sell Product(s) to LFB-US
and LFB Biotech for further distribution and sale by LFB-US and LFB Biotech in
the European Territory, all in accordance with applicable laws and regulations
and the applicable Commercialization Plan.

 

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For purposes of clarity, the foregoing sublicense shall be exclusive to GTC for
the North American Territory under Sections 3.4(b)(i)(B) and 3.4(b)(ii)(B) above
and co-exclusive (together with LFB Biotech) in the Co-Exclusive Territory under
Sections 3.4(b)(i)(C) and 3.4(b)(ii)(C) above.

3.5 Sublicenses to LFB-US.

(a) Research and Development Sublicense. Subject to the terms and conditions of
this Agreement, LFB/GTC LLC hereby grants to LFB-US a co-exclusive (together
with GTC) right and sublicense during the Term, in the Territory, under the GTC
Technology, GTC’s interest in any and all Joint Technology and the LFB Licensed
Technology in each case, to the extent licensed to LFB/GTC LLC pursuant to
Section 3.2 and/or 3.3, to:

(i) with respect to the Initial Product, (A) create and breed one or more herds
of rFVIIa Rabbits and/or rFVIIa Goats and use such rFVIIa Rabbits and/or rFVIIa
Goats to produce rFVIIa for use in making the Initial Product and (B) Develop,
make and have made the Initial Product, all in accordance with applicable laws
and regulations and the Initial Development Plan; and

(ii) with respect to subsequent Product(s), (X) create and breed one or more
herds of transgenic mammals, and use such transgenic mammals to produce material
for use in making such Product(s) and (Y) Develop, make and have made
Product(s), all in accordance with applicable laws and regulations and the
applicable Development Plan.

(b) Commercialization Sublicense. Subject to the terms and conditions of this
Agreement, LFB/GTC LLC hereby grants to LFB-US an exclusive or co-exclusive (as
described below) right and sublicense during the Term, commencing upon the
Commercialization Phase with respect to the applicable Product, under the GTC
Technology, GTC’s interest in any and all Joint Technology and the LFB Licensed
Technology, in each case, to the extent licensed to LFB/GTC LLC pursuant to
Section 3.2 and/or 3.3, to:

(i) with respect to the Initial Product, (A) sell, offer for sale, and import
the Initial Product in the European Territory and (B) subject to Section 3.6, in
cooperation with GTC and LFB/GTC LLC, sell, offer for sale, and import the
Initial Product in the Co-Exclusive Territory, all in accordance with applicable
laws and regulations and the applicable Commercialization Plan provided that if
a Regulatory Authority requires a second site for the production of the Initial
Product, such sublicense shall be extended to the use of rFVIIa Rabbits and
rFVIIa Goats to manufacture commercial quantities of rFVIIa and to the making of
the Initial Product for distribution and sale in the Territory; and

(ii) with respect to subsequent Product(s), (A) use transgenic mammals created
pursuant to the sublicense under Section 3.5(a)(ii) to manufacture commercial
quantities of material for use in the manufacture of Product(s), (B) make, have
made, sell,

 

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offer for sale, and import Product(s) in the European Territory, (C) subject to
Section 3.6, in cooperation with GTC and LFB/GTC LLC, make, have made, sell,
offer for sale, and import Product(s) in the Co-Exclusive Territory and
(D) make, have made, and sell Product(s) to GTC for further distribution and
sale by GTC in the North American Territory, all in accordance with applicable
laws and regulations and the applicable Commercialization Plan; provided, that,
LFB-US may not exercise the license to make and have made Products granted
pursuant to the foregoing unless and until the JSC determines to establish a
second manufacturing site, or LFB Biotech notifies GTC of its decision to
establish a second manufacturing site, in each case in accordance with the
provisions of Section 7.4.

For the purposes of clarity, the foregoing sublicense shall be exclusive to
LFB-US with respect to the European Territory under Sections 3.5(b)(i)(A) and
3.5(b)(ii)(B) above and co-exclusive (together with GTC) in the Co-Exclusive
Territory under Sections 3.5(b)(i)(B) and 3.5(b)(ii)(C) above.

3.6 Exercise of Commercialization Rights in Co-Exclusive Territory. Each
Operating Party acknowledges and agrees that the Commercialization rights
sublicensed to an Operating Party under Sections 3.4(b)(i)(C), 3.4(b)(ii)(C),
3.5(b)(i)(B) and 3.5(b)(ii)(C) shall only be exercisable by such Operating Party
with respect to each country or region of the Co-Exclusive Territory that the
JSC has designated to such Operating Party as provided in Section 6.2(c), and
neither Operating Party shall exercise such rights in a country or region of the
Co-Exclusive Territory that the JSC has exclusively designated to the other
Operating Party, its Affiliate or to a Third Party as provided in
Section 6.2(c).

3.7 Trademark License. Subject to the terms and conditions of this Agreement,
each Trademark Owner hereby grants to the other Operating Party (the “Trademark
User”) during the Term (a) a fully paid up, royalty free, exclusive right and
license to use the Product Trademarks of such Trademark Owner to Commercialize
Products in the Territory which is exclusive to the Trademark User as provided
in this Agreement, and (b) a fully paid up, royalty free, co-exclusive right and
license (together with the Trademark Owner) to use the Product Trademarks to
Commercialize Products in the Co-Exclusive Territory, all in accordance with
applicable laws and regulations and the applicable Commercialization Plan, and
subject to the following limitations:

(i) The Trademark User acknowledges that the Trademark Owner is and shall remain
the owner of the Product Trademarks owned by such Trademark Owner and that all
use of such Product Trademarks by the Trademark User shall inure to the benefit
of the Trademark Owner.

(ii) The Trademark User agrees that it will use such Product Trademark in
connection with the relevant Products manufactured by or for GTC or LFB Biotech,
as the case may be, pursuant to, or as permitted by, this Agreement and for no
other purpose, and shall agree to comply with such reasonable quality assurance
provisions of the Trademark Owner as the Trademark Owner may reasonably specify
in writing to ensure that the quality of any Product manufactured by or on
behalf of GTC or LFB Biotech, as the case may be, remains, in all material
respects, at least as high as that of Product manufactured by the Trademark
Owner.

 

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(iii) The Trademark User agrees to use the Product Trademarks of the Trademark
Owner only in the form and manner, and with appropriate proprietary markings,
reasonably prescribed in writing from time to time by the Trademark Owner. The
Trademark Owner will deliver such initial requirements with respect to the form
and manner of Product Trademarks use to the Trademark user prior to launch of
the applicable Product. The Trademark User agrees not to use any other trademark
in combination with the relevant Product Trademark or in connection with the
relevant Product without prior written approval of the Trademark Owner, which
approval will not be unreasonably withheld.

(iv) The Trademark User agrees, during the term of this Agreement and
thereafter, not to seek to register the Product Trademarks of the Trademark
Owner or any confusingly similar trademark in any country or region.

The Trademark User may sublicense the rights granted under this Section 3.7 to a
Third Party engaged by such Trademark User to Commercialize Products with the
approval of the JSC in accordance with Section 3.6 solely for purposes of such
Commercialization.

3.8 .Performance of Development and Commercialization Activities By Third
Parties. Neither Operating Party may subcontract any significant element of its
Development Activities and/or Commercialization Activities to one or more Third
Parties without the prior approval of the JSC.

3.9 Reservation of Rights. Each Party expressly reserves and retains all
intellectual property rights not expressly granted herein, and no right or
license under any Patent Rights, trademarks, Know How or other proprietary
rights of any Party is granted or shall be granted by implication.

3.10 Competing Products.

(a) During the Term, each Operating Party agrees not to, and shall cause its
Affiliates not to, alone or together with a Third Party, (i) develop or
commercialize any Competing Product in the Territory, or (ii) acquire, directly
or indirectly, any rights or interest in or to a Competing Product which is
being detailed, promoted, marketed or sold in the Territory. In addition to any
other remedies that may be available for a breach of the foregoing restrictions,
in the event an Affiliate of an Operating Party takes any of the actions
described in subsections (i) or (ii) above, the other Operating Party shall have
the right to immediately terminate this subsection 3.10(a) with respect to
itself and its Affiliates upon written notice and in the event of such
termination shall no longer be subject to the restrictions set forth in this
Section 3.10(a).

(b) Each Operating Party further undertakes that (i) it shall not, and shall
cause its Affiliates not to, enter into any undertaking with a Third Party which
would prohibit such Operating Party from Developing and/or Commercializing any
Product hereunder, and (ii) at the time a proposal is made for the inclusion of
a Product for Development and Commercialization pursuant to this Agreement, each
Operating Party will disclose to the other Operating Party ************.

 

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3.11 Third Party Patent Rights. In the event that a license under any Third
Party patent or other intellectual property right is necessary for the use,
Development, manufacture, sale, offer for sale or importation of a Product, the
costs of obtaining and maintaining such license shall be ************.

3.12 Effect of Bankruptcy on License Grants. All rights and licenses granted
under or pursuant to this Agreement by any Party are, and will otherwise be
deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code,
licenses of rights to “intellectual property” as defined under Section 101 of
the U.S. Bankruptcy Code. The Parties agree that each Party, as a licensee of
such rights under this Agreement, will retain and may fully exercise all of such
Party’s rights and elections under the U.S. Bankruptcy Code.

ARTICLE 4

COLLABORATION GOVERNANCE

4.1 Team Leaders/Project Managers. Within ************ after the Effective Date,
each Operating Party shall designate an individual (each, a “Team Leader”) to
facilitate communication among the Parties and mutually manage the objectives
and activities of the Parties, as specified by the JSC, with respect to the
Development and Commercialization of Products under this Agreement and who will
be the primary contact person within each Operating Party’s organization for
matters pertaining to the Collaboration hereunder. Each Operating Party may
change its designated Team Leader from time to time upon notice to the other
Operating Party and to LFB/GTC LLC, it being acknowledged by both Operating
Parties that they should endeavor to maintain continuity to the maximum extent
practicable. In addition, with respect to each Product to be Developed within
the Collaboration as decided by the JSC, the Originating Party shall designate
an individual (each such individual a “Project Leader”) who will be responsible
for the management of the Development of such Product and, if the JSC deems
appropriate, for its Commercialization. The non-Originating Party will also
designate an individual (a “Project Liaison”) to work closely with the Project
Leader with respect to such Development and Commercialization and who will have
overall responsibility within such other Operating Party for oversight of such
Product. The same individuals may be Team Leaders and Project Leaders/Project
Liaisons. Neither the Team Leaders nor the Project Leaders shall have authority
to make decisions with respect to the Development or Commercialization of
Products, which authority shall be within the sole power of the JSC.

4.2 Joint Steering Committee; Minutes. The Joint Steering Committee shall be
responsible for the operational management of the Collaboration. The same
individuals shall be members of the JSC and the Management Committee of LFB/GTC
LLC under the LLC Agreement and the members of the JSC shall, to the extent
practicable, schedule meetings of the JSC and the Management Committee of
LFB/GTC LLC on the same day. The chairperson of the JSC shall be responsible for
providing an agenda for each meeting of the JSC

 

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************ in advance of such meeting. Agenda items shall be added at the
request of either Operating Party provided that the chairperson receives such
request no later than ************ in advance of such meeting. The chairperson
of the JSC (or the vice chairperson) shall prepare written draft minutes of all
meetings in reasonable detail and distribute such draft minutes to all members
of the JSC for comment and review within ************ after the relevant
meeting. The members of the JSC shall have ************ to provide comments. The
chairperson (or the vice chairperson) shall incorporate timely received comments
and distribute finalized minutes to all members of the JSC within ************
following the relevant meeting.

4.3 Subcommittees. As provided in the LLC Agreement, the JSC shall have the
right to establish subcommittees as determined by the JSC. GTC and LFB Biotech,
through LFB-US, shall have the right to have ************ serve on each
subcommittee.

4.4 Responsibilities of the JSC. In addition to its other responsibilities and
activities expressly described in this Agreement and the LLC Agreement, the JSC
shall have the responsibility and authority to: (a) monitor and oversee all
aspects of the Development and Commercialization of Products under this
Agreement; (b) agree upon, adopt and/or amend or modify the Development Plans,
Commercialization Plans and Product Participation Models, and all updates or
amendments thereto; (c) establish and approve budgets for the activities of the
Operating Parties under this Agreement to be included in the Development Plans
and Commercialization Plans; (d) establish subcommittees pursuant to
Section 4.3, and address disputes or disagreements arising in any subcommittee
so established; (e) serve as the initial forum for discussion of and attempts to
resolve any disputes or disagreements between the Operating Parties relating to
this Agreement; (e) approve the design of clinical trials for studies that form
the basis of Regulatory Filings; (f) oversee the Regulatory Approval process for
all Products and create mechanisms for interaction of the Operating Parties with
respect to submission of Regulatory Filings; (g) coordinate efforts of the
Operating Parties to assure proper reporting of all adverse events; (h) develop
standard operating procedures for addressing customer inquiries and complaints;
(i) make decisions in such other matters pertaining to the implementation of
this Agreement as may be necessary; and (j) perform such other functions as the
Parties may agree in writing.

4.5 Decisions. The JSC shall attempt to decide all matters by consensus, in
accordance with the LLC Agreement. The members of the JSC shall act in good
faith to cooperate with one another and to reach agreement with respect to
issues to be decided by the JSC. In the event that the members of the JSC cannot
achieve consensus within ************ with respect to any matter over which the
JSC has authority and responsibility, the JSC shall refer the matter to Senior
Management of GTC and LFB Biotech, who shall in good faith attempt to resolve
such dispute. If Senior Management of GTC and LFB Biotech are unable to resolve
such matter with ************ thereafter, then, at the request of either of the
Operating Parties, the matter shall be submitted to non-binding mediation by a
mutually agreed independent third party knowledgeable as to the matter(s) in
dispute who shall render his/her decision within ************. If both Operating
Parties do not accept the decision of such mediator within ************ after
such decision having been rendered, or if the Operating Parties have not agreed
on a mediator within ************ after a request for mediation, then, subject
to the rights and obligations of the Operating Parties under this Agreement,
and, except for those matters expressly excluded from arbitration hereunder, the
matter shall be referred to arbitration as described in Section 15.2.

 

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ARTICLE 5

DEVELOPMENT PHASE

5.1 Development Plan.

(a) All Development with respect to any Product hereunder shall be conducted
pursuant to a Development Plan prepared and approved by the JSC, which shall set
forth the plan for the pre-clinical and clinical Development, and Regulatory
Approval of such Product in each of the European Territory, the North American
Territory and the Co-Exclusive Territories and the activities to be carried out
related thereto by LFB Biotech and GTC on behalf of LFB/GTC LLC, together with a
proposed budget for such activities (each, a “Development Plan”). The
Development Plan for the Initial Product (the “Initial Development Plan”) has
been agreed to by the Parties. Each Development Plan and updated Development
Plan shall include a projection of (a) the plan of Development activities with
respect to the relevant product and timelines for performing such activities,
(b) the proposed budget for such Development activities, (c) expected
Development funding by each Operating Party, and (d) a non-binding forecast of
clinical supply of Product to be supplied as provided under Article 7. The
Development Plan for a Product shall also specify the jurisdictions (other than
the US and EU) where Regulatory Approval will be sought for such Product and
prospective indication extension after the First Major Regulatory Approval. Such
business case shall be reviewed and updated on a regular basis by the JSC.

(b) For so long as necessary to complete Development of any Product, the
Operating Parties, through the JSC, shall update the Development Plan with
respect to such Product on an annual basis prior to the commencement of the next
calendar year, or more often as determined by the JSC.

(c) The JSC will review performance against the Development Plan for each
Product on a quarterly basis, and will report any variations to the Operating
Parties in writing. If, in any quarter, there is a variation of ************ or
greater from the budget, the JSC will revise the Development Plan and budget for
the applicable Product ************ prior to the commencement of the second
quarter following the quarter in which the variation occurred. For example, if a
************ variation is reported in quarter one, a revised Development Plan
and budget must be prepared at least ************ prior to the commencement of
quarter three.

(d) Until such time as a Development Plan is updated in accordance with this
Section 5.1, the preceding Development Plan (including, without limitation, all
budget projections and minimum expenditures therein) shall remain in effect. The
JSC shall not update any Development Plan in a manner that is inconsistent with
or contradicts the terms of this Agreement.

 

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5.2 Development Activities.

(a) General. Each Operating Party shall be responsible for carrying out its
designated activities relating to Development of the relevant Product on behalf
of LFB/GTC LLC, as set forth in and in accordance with this Agreement, the LLC
Agreement and the applicable Development Plan. Each Operating Party will commit
those financial and human resources specified for such Operating Party in the
Development Plan for each Product, it being acknowledged that (i) neither
Operating Party is required to commit all its financial and human resources to
the implementation of a Development Plan, and (ii) those capital and human
resources utilized by an Operating Party to the Development of Products
hereunder are not required to be exclusively dedicated to the Collaboration.

(b) LFB Biotech Development Activities. The designated Development activities
undertaken by LFB Biotech on behalf of LFB/GTC LLC as specified in the
applicable Development Plan shall be referred to as the “LFB Biotech Development
Activities”. In its performance of the LFB Biotech Development Activities with
respect to any Product, LFB Biotech shall devote no less than the minimum levels
of effort (in terms of full-time equivalent personnel “FTEs”) and financial
resources as set forth in the applicable Development Plan. Without limiting the
foregoing, the LFB Biotech Development Activities with respect to the Initial
Product shall include the following:

(i) Generate and supply to GTC reasonable quantities of rFVIIa produced by
************ for use by GTC in the performance of its activities under this
Agreement and the Initial Development Plan, ************.

(ii) Provide Know-How and expertise in the areas of process development,
purification and product characterization, design and management of clinical
trials, regulatory affairs, sales and marketing, plasma proteins and monoclonal
antibodies.

(iii) Under the direction and supervision of the JSC, and in accordance with the
Initial Development Plan, assume primary responsibility for clinical trials in
the Territory for the Initial Product pursuant to Section 5.7(b).

(c) GTC Development Activities. The designated Development activities undertaken
by GTC on behalf of LFB/GTC LLC as specified in the applicable Development Plan
shall be referred to as the “GTC Development Activities”. In its performance of
the GTC Development Activities with respect to any Product, GTC shall devote no
less than the minimum levels of effort (in terms of FTEs) and financial
resources as set forth in the applicable Development Plan. Without limiting the
foregoing, the GTC Development Activities with respect to the Initial Product
shall include the following:

(i) Generate rFVIIa Goats using GTC’s ************ to be used for production of
rFVIIa pursuant to this Agreement.

 

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(ii) Provide all necessary GTC Technology for purposes of herd development,
including for transgenic production of proteins in milk, purification technology
and promoters.

(iii) Provide Know-How and expertise in the areas of regulatory affairs, quality
systems, molecular biology, embryology, animal husbandry and milking, process
development and product recovery and purification.

(iv) Manufacture and supply rFVIIa material to LFB Biotech ************ in
sufficient quantities for Phase II Trials and Phase III Trials during the
Development Phase, and to the Operating Parties as specified below during the
Commercialization Phase.

5.3 Diligence Requirements.

(a) Development Milestones. The Operating Parties shall agree on objective
time-based Development milestones with respect to each Product for each of the
European Territory, the North American Territory and the Co-Exclusive Territory,
which shall be included in the Development Plan for each Product. Each Operating
Party will be responsible for meeting the milestones in its respective exclusive
Territory and in each country or region in the Co-Exclusive Territory designated
to such Operating Party in the applicable Development Plan.

(b) Failure to Meet Development Milestones. The failure of an Operating Party to
achieve any Development milestone for a Product shall ************.

5.4 Development Costs.

(a) Initial Product. Unless otherwise specified in the applicable Development
Plan, this Agreement or the LLC Agreement, subject to Section 5.7(b)(ii), each
Operating Party shall bear ************ costs and expenses incurred in
connection with its respective Development Activities with respect to the
Initial Product, as such costs are incurred. Notwithstanding the foregoing, LFB
Biotech shall purchase from GTC quantities of the Initial Product for the
conduct of the LFB Biotech Development Activities in the European Territory and
the Co-Exclusive Territory pursuant to the applicable Development Plans, as set
forth in Article 7.

(b) Other Products. Unless otherwise specified in the applicable Development
Plan, this Agreement or the LLC Agreement, subject to Section 8.2(c), each
Operating Party shall bear fifty percent (50%) of the costs and expenses
incurred in connection with the Development of each Product other than the
Initial Product.

5.5 Right of Reference to Data. Subject to this Section 5.5, the Operating Party
conducting any clinical trial or other Development Activities under the relevant
Development Plan shall own all data arising or resulting therefrom; provided
that ownership of Regulatory Filings and Regulatory Approvals shall be
determined in accordance with Sections 5.8 and

 

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5.9, respectively. Each Operating Party and LFB/GTC LLC agrees to provide the
other Operating Party and LFB/GTC LLC, as the case may be, in a timely manner,
with access to all clinical, safety and other data arising from its respective
Development Activities. The other Operating Party and LFB/GTC LLC shall have the
right to cross-reference all such data and information in any Regulatory Filing
for any Product under this Agreement.

5.6 Transfer of Know-How. Within ************ of the preparation of the
preliminary Development Plan with respect to any Product hereunder, each
Operating Party shall disclose and transfer to the other Operating Party and
LFB/GTC LLC all Know-How Controlled by such Operating Party and its Affiliates
not previously disclosed hereunder that is necessary or useful to the other
Operating Party in the performance of its obligations on behalf of LFB/GTC LLC
under this Agreement with respect to such Product. Throughout the Product Term
with respect to each Product, each Operating Party will disclose and supply to
the other Operating Party and LFB/GTC LLC from time to time any material
modifications or updates to the Know-How Controlled by such Operating Party or
its Affiliates that are necessary or useful to the other Operating Party in the
performance of its obligations under this Agreement with respect to such
Product. The transfer of Know-How pursuant to this Section 5.6 may occur by
means of written documentation, personal consulting or other communications
between the Operating Parties and LFB/GTC LLC, or by demonstration (show-how).
All Know-How transferred hereunder shall be used by the Operating Party
receiving the same solely in accordance with this Agreement and the LLC
Agreement and shall be the Confidential Information of the Operating Party
providing the same.

5.7 Conduct of Clinical Trials.

(a) General. The clinical Development and Regulatory Approval program with
respect to each Product, and the respective activities and responsibilities of
each Operating Party with respect thereto, shall be included in the Development
Plan for such Product. It is the intention of the Parties that all clinical
studies for Products shall be conducted in a manner such that the results will
be acceptable to Regulatory Authorities in the European Territory and the North
American Territory, as well as the Co-Exclusive Territory to the extent
reasonably possible. Unless otherwise specified in the applicable Development
Plan, subject to Section 8.2(c), each Operating Party shall bear fifty percent
(50%) of the costs and expenses incurred in connection with the clinical studies
of each Product other than the Initial Product.

(b) Initial Product.

(i) Conduct of Phase II Trials and Phase III Trials by LFB Biotech. Under the
direction and supervision of the JSC, LFB Biotech shall, on behalf of LFB/GTC
LLC, have primary responsibility for the conduct of Phase II Trials and Phase
III Trials for the Initial Product in the entire Territory in accordance with
this Agreement and the applicable Development Plan. ************ data from such
Phase II Trials and Phase III Trials shall be fully shared with GTC and LFB/GTC
LLC, and such data may be used by both Operating Parties in applications for
Regulatory Approval pursuant to Section 5.8.

 

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(ii) Funding of Clinical Development. LFB Biotech will bear all costs of
clinical trials with respect to the Initial Product in the entire Territory,
subject to GTC’s option to co-fund as provided below. GTC shall have the option,
but not the obligation, to fund up to ************ of the costs of clinical
trials with respect to the Initial Product in the Territory. GTC may exercise
such option by providing LFB Biotech with written notice of its election to
co-fund at any time prior to ************ with respect to the Initial Product
together with payment of the amount of funding GTC is willing to contribute. If
GTC elects not to participate, or not to fully participate, in the funding of
clinical trials with respect to the Initial Product, the Product Participation
with respect to the Initial Product shall be adjusted in accordance with the
Product Participation Model on Exhibit B to reflect LFB Biotech’s greater
participation in the funding of clinical trials, subject to readjustment
pursuant to Section 8.2(b)(iv). Notwithstanding the foregoing, provided that
GTC’s participation in the funding of the Development of the Initial Product is
at least ************ of the total IPV, GTC’s Product Participation with respect
to the Initial Product shall be no less than ************.

5.8 Regulatory Filings and Approvals.

(a) Preparation of Proposed Regulatory Filings. The Parties agree to seek
Regulatory Approvals from the FDA, the EMEA, and the applicable Regulatory
Authorities in each of the other countries listed in the applicable Development
Plan, as may be amended by the Parties from time to time. LFB Biotech shall,
subject to Section 5.9, prepare all Regulatory Filings for Products in the
European Territory. GTC shall, subject to Section 5.9, prepare all Regulatory
Filings for Products in the North American Territory. The JSC shall determine,
on a country-by-country basis, which Operating Party shall be responsible for
preparing Regulatory Filings and Regulatory Approvals in the Co-Exclusive
Territory. All such Regulatory Filings shall be prepared in accordance with the
applicable Development Plan and all applicable laws and regulations. Each
Operating Party shall submit to the other Parties each proposed Regulatory
Filing for the other Parties’ review and comment. The reviewing Parties shall
notify the Operating Party responsible for such Regulatory Filing in writing of
any proposed modifications to such Regulatory Filing as soon as reasonably
practicable after receipt of such filing, and the Operating Party preparing such
Regulatory Filing shall consider, in good faith, whether to implement such
proposed modifications; provided that the Operating Party responsible for making
such Regulatory Filing shall have the right to make the final determination, in
its sole discretion, as to the form and substance of such Regulatory Filing.

(b) Submission to Regulatory Authorities. Each Operating Party agrees to use
Commercially Reasonable Efforts to file promptly, in its own name, all
Regulatory Filings finalized in accordance with Section 5.8(a) with the proper
Regulatory Authority.

(c) Copies of Regulatory Filings. Each Operating Party shall provide to the
other Parties copies of all Regulatory Filings for Products submitted to
Regulatory Authorities in the Territory within a reasonable time following the
filing thereof. In addition, the Parties shall share all correspondence and
communications, other than Regulatory Filings, with Regulatory Authorities
relating to a Product in the Territory.

 

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(d) Interactions with Regulatory Authorities. The Operating Party responsible
for making a Regulatory Filing pursuant to this Section 5.8 shall also be
responsible for and control all interactions with Regulatory Authorities with
respect to such Regulatory Filing on behalf and for the benefit of LFB/GTC LLC.
To the extent practicable, each Operating Party shall provide to the other
Parties reasonable advance written notice of meetings and conference telephone
calls with any Regulatory Authority related to the Product in the Territory, and
shall use Commercially Reasonable Efforts to invite one senior executive or
regulatory counsel of the other Parties to attend meetings with such Regulatory
Authorities as a silent observer, if and to the extent permitted by the relevant
Regulatory Authority.

5.9 Ownership of Regulatory Approvals. Subject to Section 5.5, LFB Biotech shall
own and maintain all Regulatory Filings and all Regulatory Approvals that relate
to the Product in the European Territory. LFB/GTC LLC shall own and maintain all
Regulatory Filings and all Regulatory Approvals that relate to the Product in
the United States and, unless otherwise decided by the JSC, the rest of the
world.

ARTICLE 6

COMMERCIALIZATION PHASE

6.1 Commercialization Plan. All Commercialization with respect to a Product
under this Agreement shall be conducted pursuant to a Commercialization Plan,
which shall set forth the plan for the Commercialization of such Product and the
activities to be carried out with respect thereto, together with a proposed
budget for such activities (each, a “Commercialization Plan”). The Operating
Parties, through the JSC, shall agree upon a preliminary Commercialization Plan
for each Product at least ************ prior to the anticipated Regulatory
Approval for such Product. During the Commercialization Phase with respect to
each Product, the Operating Parties, through the JSC, shall update the
Commercialization Plan with respect to such Product on an annual basis prior to
the commencement of the next calendar year, or more often as determined by the
JSC. Each updated Commercialization Plan shall include, for the subsequent
************, the projection of the plan for Commercialization Activities for
the Product in each Territory and timelines for performing such activities, the
projected Net Sales and other revenues from the sale of the Product, together
with an updated Commercialization budget. The Commercialization Plan shall
contain an estimation of the resources that each Operating Party intends to
employ in connection with the Commercialization of the relevant Product. In
addition, the JSC will review performance against the Commercialization Plan for
each Product on a quarterly basis, and will report any variations to the
Operating Parties in writing. If, in any quarter, there is a variation of
************ or greater from the budget or from projected Net Sales and other
revenues, the JSC will revise the Commercialization Plan and budget for the
applicable Product ************ prior to the commencement of the second quarter
following the quarter in which the variation occurred. For example, if a
************ variation is reported in quarter one of a calendar year, a revised
Commercialization Plan and budget must be prepared at least ************ prior
to the commencement of quarter three of such calendar year. Until such time as
an updated Commercialization Plan is approved in accordance with this
Section 6.1, the preceding Commercialization Plan (including, without
limitation, all budget projections therein) shall remain in effect. The JSC
shall not approve any Commercialization Plan that is inconsistent with or
contradicts the terms of this Agreement.

 

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6.2 Commercialization Activities.

(a) European Territory. Subject to the terms and conditions of this Agreement,
LFB Biotech shall have exclusive rights to Commercialize Products in the
European Territory on behalf of LFB/GTC LLC. LFB Biotech shall use Commercially
Reasonable Efforts to maximize profits with respect to each Product in each
country of the European Territory where Regulatory Approval has been obtained,
including the performance of those activities with respect to the European
Territory specified in the applicable Commercialization Plan.

(b) North American Territory. Subject to the terms and conditions of this
Agreement, GTC shall have exclusive rights to Commercialize Products in the
North American Territory on behalf of LFB/GTC LLC. GTC shall use Commercially
Reasonable Efforts to maximize profits with respect to each Product in each
country of the North American Territory where Regulatory Approval has been
obtained, including the performance of those activities with respect to the
North American Territory specified in the applicable Commercialization Plan.

(c) Co-Exclusive Territory. Subject to the terms and conditions of this
Agreement, each Operating Party shall have the exclusive right to Commercialize
Products on behalf of LFB/GTC LLC in each country or region of the Co-Exclusive
Territory designated to such Operating Party by the JSC in the applicable
Commercialization Plan, and neither Operating Party shall grant
Commercialization rights to a Third Party in the Co-Exclusive Territory except
as expressly set forth herein. The JSC will decide the appropriate party,
whether one of the Operating Parties and/or its Affiliate or a Third Party, to
exclusively Commercialize Products in a given national or regional territory
within the Co-Exclusive Territory on the basis of criteria determined by the
JSC; provided, that, where one of the Operating Parties has an Affiliate within
such national or regional territory and the other Operating Party does not, then
such Affiliate shall have a first right to negotiate with the JSC for the
distribution of such Product. If such Affiliate agrees in writing to meet the
undertakings as to minimum sales commitments set by the JSC (which shall have
first obtained such information as it may require in order to determine what
minimum sales commitments would be reasonable in the circumstances) and
demonstrates to the satisfaction of the JSC that it has the capability of
performing such undertakings, such Affiliate shall be given the right to
Commercialize the relevant Product, even if such Affiliate may be of lesser
standing than a Third Party in terms of the criteria determined by the JSC.
Where both Operating Parties have an Affiliate in a given national or regional
territory within the Co-Exclusive Territory, the JSC will determine the
appropriate entity to Commercialize the relevant Product, which entity may be a
Third Party, based on the criteria it has previously determined, but with a view
to maximizing the profits for the collaboration while allowing each Operating
Party the opportunity to build its marketing and sales presence in the

 

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Co-Exclusive Territory taken as a whole and, on an overall basis, to share
equally in Commercialization activities in the Co-Exclusive Territory taken as a
whole. In any event, each Operating Party or its Affiliate shall use
Commercially Reasonable Efforts to maximize profits with respect to each Product
in each country of the Co-Exclusive Territory where Regulatory Approval has been
obtained, including the performance of those activities with respect to the
Co-Exclusive Territory designated to such Operating Party or its Affiliate
specified in the applicable Commercialization Plan. Each Operating Party shall
be responsible for the performance of the Commercialization activities of its
Affiliate hereunder.

(d) No Parallel Trade. Due to the territorial nature of Regulatory Approvals,
each Operating Party will undertake Commercially Reasonable Efforts within
applicable legal constraints to limit trade of Products between and among the
North American Territory, the European Territory, and the specific countries or
regions within the Co-Exclusive Territory exclusively designated to an Operating
Party under the applicable Commercialization Plan.

6.3 Commercialization Costs. Unless otherwise specified in the applicable
Commercialization Plan, each Operating Party shall bear all costs and expenses
incurred in connection with its respective Commercialization Activities with
respect to each Product. Notwithstanding the foregoing, except as otherwise
determined by the JSC, LFB Biotech shall purchase from GTC its commercial supply
of Initial Products in the European Territory and Co-Exclusive Territory
pursuant to the initial Commercialization Plan, as set forth in Article 8.

6.4 Diligence Requirements.

(a) Commercialization Milestones. The Operating Parties shall agree on objective
time-based Commercialization milestones with respect to each Product for each
Operating Party’s respective exclusive Territory and each country or region in
the Co-Exclusive Territory, which shall be included in the Commercialization
Plan for the relevant Product. Each Operating Party will be responsible for
meeting the milestones in its respective exclusive Territory and in each country
or region in the Co-Exclusive Territory designated to such Operating Party in
the applicable Commercialization Plan.

(b) Failure to Meet Commercialization Milestones. The failure of an Operating
Party to timely achieve any Commercialization milestone designated to such
Operating Party in the Commercialization Plan for a Product shall have the
consequences set forth below with respect to the applicable country or region in
the Territory; provided that such failure ************, unless such failure
occurs within ************ period following a Change of Control of the Operating
Party failing to achieve such milestone as provided in subsection (ii) below.

(i) If such Operating Party fails to achieve one or more applicable
Commercialization milestones for a Product in either of the first two full
calendar years following the First Commercial Sale of such Product,
************.

(ii) Commencing upon the beginning of third full calendar year following the
First Commercial Sale of a Product, if such Operating Party fails to achieve one
or more applicable Commercialization milestones during any full calendar year
during the Commercialization Phase for the Product, starting in the next full
calendar year ************.

 

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6.5 Advertising and Promotional Materials.

(a) Promotional Materials. The Operating Parties, through the JSC, shall
collaborate to develop all advertising and promotional materials related to the
Products (collectively, “Promotional Materials”) in the Territory utilizing the
Product Trademarks, in accordance with style and branding guidelines to be
mutually agreed upon and with applicable laws and regulations. Neither Operating
Party shall use in the conduct of its respective Commercialization Activities
any Promotional Materials that have not been finally approved by the JSC.
Ownership of Promotional Materials shall be determined consistently with
ownership of Regulatory Approvals under Section 5.9.

(b) Filing of Promotional Materials with Regulatory Authorities. Each Operating
Party shall be responsible for filing with the relevant Regulatory Authority, in
accordance with all applicable laws and regulations and industry standards,
Promotional Materials with respect to use of the Product in the respective
Territory, consistent with Section 5.8.

6.6 Customer Complaints and Inquiries. LFB Biotech shall be responsible for
receiving and addressing all customer complaints and inquiries regarding
Products in the European Territory. GTC shall be responsible for receiving and
addressing all customer complaints and inquiries regarding Products in the North
American Territory. The JSC shall determine, on a country-by-country or
region-by-region basis, which Operating Party shall be responsible for receiving
and addressing customer complaints and inquiries regarding Products in the
Co-Exclusive Territory. Following receipt of any customer complaint or inquiry,
the responsible Operating Party shall log the complaint or inquiry and determine
the appropriate response, in accordance with applicable laws and regulations and
the procedures established by the JSC and set forth in the applicable
Commercialization Plan; provided, that the Operating Party responsible for
addressing any complaint or inquiry shall promptly notify the other Parties
after receiving any material complaint or inquiry and shall consult with the
other Operating Party prior to taking any action in response thereto that would
materially affect the other Party’s rights or obligations under this Agreement.

6.7 Drug Safety.

(a) New Information. Each Operating Party shall promptly inform the other
Operating Party of any adverse safety information or data affecting any Product
in the Territory or either Operating Party’s obligations with respect to the
safety of Products under this Agreement.

 

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(b) Adverse Event Reporting; Safety Database. Each Operating Party shall be
responsible for reporting, at its expense, to appropriate authorities, in
accordance with local requirements, all adverse events related to use of a
Product in its respective Territory (or its respective designated country or
region in the Co-Exclusive Territory); provided, that each Operating Party shall
consult with the other Operating Party before making any such report. The
non-reporting Operating Party shall provide to the reporting Operating Party,
upon the reporting Operating Party’s request, reasonable assistance in
connection with the reporting of all of adverse events, responding to safety
queries and assessing safety issues, in each case, to the extent related to a
Product in the Territory. Adverse events related to the use of a Product in the
Territory shall be recorded in a single, centralized database for such Product.
Such database shall be held, owned and maintained by the Originating Party of
such Product at the Originating Party’s expense, which shall be a Development
Cost of the Originating Party hereunder. Direct access to the safety database
for each Product will be granted to both Operating Parties. Details of safety
reporting activities relating to the Product in the Territory will be addressed
in a pharmacovigilance agreement, which the Operating Parties shall enter into
within ************ following the first Regulatory Approval of such Product.

6.8 Product Withdrawals and Recalls. In the event that, within an Operating
Party’s Territory (or its designated country or region in the Co-Exclusive
Territory), (a) an Operating Party determines that an event, incident, or
circumstance that may result in the need for a Recall or other removal of a
Product or any lot or lots thereof from the market; (b) the applicable
Regulatory Authority threatens to remove a Product from the market; or (c) the
applicable Regulatory Authority requires distribution of a “Dear Doctor” letter
or its equivalent regarding the use of a Product, the Operating Party making
such determination or receiving notice of such threat or requirement shall
promptly advise the other Parties in writing with respect thereto, and shall
provide the other Operating Party with copies of all relevant correspondence,
notices and the like. The Operating Parties shall reasonably cooperate through
the JSC to determine what action is warranted and to take such action with
respect to the conduct of any such Recall, market withdrawal or other corrective
action with respect to a Product in the Territory.

ARTICLE 7

PRODUCT SUPPLY

7.1 Clinical Supply of Product.

(a) Initial Product.

(i) Requirements. Subject to the terms set forth in this Article 7, GTC shall
supply to LFB Biotech its requirements for the Initial Product for the conduct
of the LFB Biotech Development Activities and for Phase II Trials and Phase III
Trials at a transfer price ************.

(ii) Ordering Process. The Operating Parties shall agree upon and set forth in
the Supply Agreement for the Initial Product: (A) the amount of Initial Product
to be supplied by GTC to LFB Biotech during the Development Phase for such
Product (subject to

 

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maximums to be agreed upon), and (B) the procedures for LFB Biotech to submit
its requirements and GTC to supply such requirements. Such procedures shall
include, without limitation, (1) forecasting procedures, including annual
non-binding forecasts of LFB Biotech’s requirements, (2) firm purchase
commitments no less than ************ prior to the time the order must be
delivered to LFB Biotech by GTC, (iii) procedures for return and replacement of
Initial Product that is in breach of the product warranty set forth in the
relevant Supply Agreement, and (iv) payment terms. Any purchase orders, purchase
order releases, confirmations, acceptances, invoices, and similar documents
submitted by either Operating Party shall be for administrative purposes only
and shall not add to or modify the terms of this Agreement or the relevant
Supply Agreement, except for the specification of quantities or requested
delivery dates.

(b) Other Products. The Operating Parties shall mutually agree in writing upon
the availability and timing of delivery of clinical supplies of Products other
than the Initial Product, which shall be set forth in the applicable Development
Plan. All such Products shall be supplied at ************.

7.2 Forecasts and Commercial Supply.

(a) Initial Product.

(i) Exclusive Supply; Forecasts. Subject to Section 7.4(c), and unless otherwise
specified in the applicable Commercialization Plan, GTC or its designated Third
Party subcontractor shall be the exclusive manufacturer and supplier of
commercial quantities of the Initial Product throughout the Territory. The
Supply Agreement for the Initial Product shall set forth the forecasting
requirements of the Operating Parties for the Initial Product in the Territory.

(ii) Commercial Supply. Unless otherwise specified in the applicable
Commercialization Plan, GTC shall use Commercially Reasonable Efforts to supply
to LFB Biotech its commercial requirements for the Initial Product in the
European Territory, and the commercial requirements of the Collaboration for the
Initial Product in the Co-Exclusive Territory, at a transfer price equal
************. GTC shall supply Initial Product to LFB Biotech and, if
applicable, to any Third Party selected by the JSC to Commercialize or
distribute the Initial Product in a country or region in the Co-Exclusive
Territory, on a non-discriminatory basis. The Supply Agreement for the Initial
Product shall set forth the other relevant terms and conditions of the
manufacture and supply of Initial Product in the Territory.

(b) Other Products. The Operating Parties shall mutually agree in writing upon
the terms and conditions with respect to the manufacture and supply of
commercial quantities of Product(s) other than the Initial Product, which shall
be set forth in the relevant Supply Agreement. All such Products shall be
supplied at ************.

7.3 Disclaimer of Warranty. EXCEPT TO THE EXTENT EXPRESSLY PROVIDED IN THE
APPLICABLE SUPPLY AGREEMENT, EACH OPERATING PARTY EXPRESSLY DISCLAIMS ANY
WARRANTY WITH RESPECT TO THE PRODUCT(S) SUPPLIED HEREUNDER, WHETHER EXPRESS OR
IMPLIED, WRITTEN OR ORAL (INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE).

 

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7.4 ************:

(a) ************;

(b) ************;

(c) ************;

(d) ************;

(e) ************.

ARTICLE 8

PAYMENTS AND ACCOUNTING

8.1 Equity Purchase. In conjunction with the establishment of the Collaboration
pursuant to the Original JDA, LFB Biotech made an equity and debt investment in
GTC of $25 million pursuant to the Securities Purchase Agreement dated as of
September 29, 2006 between GTC and LFB Biotech (the “Stock and Note Purchase
Agreement”).

8.2 Funding of Costs and Sharing of Profits.

(a) General. Subject to the terms and conditions of this Agreement, on a
Product-by-Product basis, it is the Parties’ intention that each Operating Party
will share equally in the costs of Development and Commercialization and that in
such case each Operating Party will be entitled to fifty percent (50%) of the
Net Profits of the Collaboration with respect to such Product, as adjusted in
accordance with the profit participation percentage for such Operating Party
under the applicable Product Participation Model as described below (the
“Product Participation”).

(b) Product Participation Calculation.

(i) The Operating Parties shall agree upon the final (subject to adjustment by
the JSC as provided herein) Product Participation Model for each Product no
later than ************ following ************ for such Product, and shall
attach a copy of such Product Participation Model as part of Exhibit B to this
Agreement and such Product Participation Model shall be incorporated herein by
reference. Product Participation calculations will be included upon their
approval. A standard form of Product Participation Model is attached as part of
Exhibit B to this Agreement.

(ii) The Product Participation of an Operating Party with respect to a Product
shall be based upon the IPV of such Operating Party with respect to such Product
in accordance with the applicable Product Participation Model. All Development
Costs of an

 

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Operating Party shall be included in the IPV calculation under the Product
Participation Model. IPV will be calculated using a discount rate of
************. Development Costs of each Operating Party will be factored into
the Product Participation Model by calendar year based on the official statutory
accounts of each Operating Party, or properly allocated Development Costs
reconciled to the relevant Operating Party’s statutory accounts and approved by
the JSC, in each case as reflected in the reports delivered pursuant to Sections
8.3(a) and (b). Any significant differences between the Operating Parties’
statutory bases of accounting will be identified by the JSC during the annual
budgeting process. A common basis will be selected or approximated, subject to
approval of the JSC. Depreciation or amortization of expenditures will be
excluded from the IPV calculation to the extent such costs have previously been
incorporated elsewhere in the Product Participation Model. The JSC will evaluate
************ after the Effective Date the impacts of the discrepancies in such
accounting methods and decide on relevant rules to be applied to account for and
reconcile such discrepancies in the calculation of the respective Product
Participations.

For purposes of calculating each Operating Party’s IPV, to reflect the increased
risk associated with earlier investment, Development Costs paid or incurred by
an Operating Party in earlier stages of a Product’s Development program will be
weighted more highly than later-stage Development Costs, in accordance with the
following schedule:

 

Timing of Expenditure

  

        Weight Accorded        

From Product Start Date through last day of month ending before decision of JSC
to commence Phase III Trials    ************ of Development Cost From the month
when decision is made by JSC to commence Phase III Trials through Pivotal Trial
Completion Date    ************ of Development Cost Pivotal Trial Completion
Date to date of receipt of written confirmation of Major Regulatory Approval   
************ of Development Cost

(iii) Notwithstanding the foregoing, after the first Major Regulatory Approval
is obtained for a Product, only those Development Costs specifically allocable
to obtaining the other Major Regulatory Approval as per the Development Plan
previously approved by the JSC (including, without limitation, the costs of
additional clinical trials, if any, required for purposes of obtaining such
other Major Regulatory Approval) shall be subject to weighting in accordance
with the above schedule, and all other Development Costs properly incurred or
allocated by the Operating Parties shall be weighted ************ of cost. Any
costs with respect to a Product incurred by an Operating Party prior to the
decision

 

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by the JSC to proceed with the Development of such Product shall not be included
as Development Costs. Subject to adjustment from time to time pursuant to
Section 8.2(b)(iv), each Operating Party’s relative IPV will also represent such
Operating Party’s Product Participation percentage for such Product; provided,
that the Product Participation of the Operating Parties shall be rounded to the
closest full percentage point with no decimals. Notwithstanding any of the
foregoing, if GTC’s relative participation in funding the Development of the
Initial Product is ************, the minimum Product Participation of GTC with
respect to the Initial Product shall be no ************.

(iv) The Product Participation of each Operating Party with respect to a Product
shall be fixed as of ************, and shall remain fixed for the remainder of
the Product Term, subject to adjustment on ************ basis as follows:

(A) After the first Major Regulatory Approval is obtained for such Product, the
Product Participation Model for such Product shall be adjusted by the JSC in
accordance with Section 8.2(b)(iii) to account for Development Costs of the
Operating Parties specifically allocable to obtaining the other Major Regulatory
Approval, provided they are previously approved by the Joint Steering Committee
within the framework of the Development Plan.

(B) The Product Participation Model with respect to each Product shall be
reviewed and adjusted by the JSC to reflect any additional significant costs
properly allocated as Development Costs (such as capital costs and additional
costs incurred by an Operating Party to expand the indication or territory of
the Product), approved by the JSC and incurred by the Operating Parties in the
previous year with respect to such Product, and the Operating Parties’
respective Product Participation percentages shall be adjusted to reflect such
additional Development Costs. Within ************ after the Effective Date, the
Operating Parties will agree upon a methodology for determining which costs
shall be deemed “significant” for purposes of this Section 8.2(b) and costs not
satisfying the agreed upon criteria shall be treated as Commercialization Costs
and will be subject to reimbursement pursuant to Section 8.2(d).

(C) If an Operating Party’s Product Participation for a Product is ************
but is ************, then once the Greater Funding Party has been fully
reimbursed for any IPV Difference out of any distributed Net Profits in
accordance with Section 8.2(d), the Product Participation of each Operating
Party with respect to the relevant Product shall be set at ************ for the
remainder of the relevant Product Term, in each case (i) and (ii), subject to
further adjustment in accordance with subsections (A) and (B) above. If an
Operating Party’s Product Participation for a Product (other than the Initial
Product with respect to GTC) is ************ then the provisions of
Section 8.2(c)(ii) shall apply.

 

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(c) Funding of Development and Commercialization.

(i) Funding Obligations and Rights of the Operating Parties. Subject to Sections
5.7(b) and 8.2(c)(ii), and except as set forth in the applicable Development
Plan or Commercialization Plan, each Operating Party will be responsible for
paying those costs and expenses it incurs in the performance of its Development
Activities and Commercialization Activities with respect to each Product, in
each case as such costs are incurred.

(ii) Minimum Funding Commitment for Certain Products. Subject to the applicable
Development Plan, it is the Parties’ present intention that each Operating Party
will ultimately ************ of the costs of Development for each Product,
including the Initial Product. Notwithstanding the foregoing, and subject to the
specific provisions applicable to the funding of Development Costs for 2008 set
forth in Section 8.2(c)(iii), if an Operating Party is unable or unwilling to
fund ************ of the Development Costs with respect to a Product, including
the Initial Product, it shall notify the JSC in writing, within ************
prior to the completion of the annual budget under the applicable Development
Plan, the amount of Development Costs such Operating Party is able to fund
during the relevant upcoming calendar year. Upon receipt of such notice, the JSC
shall adjust the budget accordingly and such Operating Party shall be obligated
to fund that portion of Development Costs specified in the budget during the
applicable calendar year. Subject to further adjustment in accordance with
Section 8.2(b)(iv) and to the provisions of Section 8.2(c)(iii), the Profit
Participation Model shall be revised to reflect such lesser participation.
Notwithstanding the foregoing, in order to maintain its Profit Participation
with respect to any Product, including the Initial Product, each Operating Party
must have funded ************ of the Development Costs (as weighted in
accordance with the Product Participation Model) of such Product in the
aggregate during the period commencing on the relevant Product Start Date and
ending on ************ for such Product. If an Operating Party fails to fund
************ of such Development Costs of such Product during such period, then
such Product shall cease to be subject to this Agreement, the licenses hereunder
with respect to such Product shall terminate, and, without further action by the
Parties, the rights and obligations of the Parties with respect to such Product
after the time of such termination shall be governed by the terms of a
definitive Commercial License to be executed between the Operating Parties at
such time, the material terms of which are set forth in Exhibit G. The Operating
Parties shall mutually agree upon the definitive terms of the Commercial License
within ************ following the Product Start Date of each Product hereunder
(other than the Initial Product).

(iii) Funding of Development Costs for 2008.

A. With respect to the funding of Development Costs for the calendar year 2008
the Parties hereto agree as follows:

(1) The Parties, through the JSC, have agreed on the budget for Development
Costs to be incurred for the Products during the calendar year 2008 together
with the milestones for the Products concerned. LFB Biotech agrees to provide to
GTC an aggregate of up to USD 6 million of the budgeted Development Costs to be
incurred by GTC during the fiscal year ending December 28, 2008, (allocated on a
Product by Product basis, which allocation may be adjusted by the JSC) payable
in quarterly installments (in respect of the fiscal quarters ending 3/30, 6/29;
9/28 and 12/28), subject to the following cumulative annual limits for each
Product under Development pursuant to this Agreement on the Restatement Date:

-Factor VII: ************

-Factor IX: ************

-Alpha-Antitripsin: ************

-TG 20: ************.

 

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(2) Payments under this Section 8.2(c)(iii) shall be made to GTC upon receipt
and review by LFB Biotech of GTC’s invoice for the relevant Development Costs
for such calendar quarter which invoice shall be sent to LFB Biotech no later
than ************ prior to the end of such calendar quarter. Each such invoice
shall set forth in detail all internal and third party expenses incurred by GTC
in respect of such Development Costs during the first two months of the calendar
quarter as well as an estimate of such expenses for the third month of the
calendar quarter, The billing for expenses for the third month of the calendar
quarter will be adjusted to take into account actual expenses for such month
which adjustment shall be reflected on the next quarterly invoice. Upon request
by LFB Biotech from time to time, GTC shall provide LFB Biotech with relevant
audit tracking records relating to such invoices. GTC shall use all funds
provided by LFB Biotech under this Section 8.2(c)(iii) solely to pay budgeted
Development Costs and shall notify LFB Biotech promptly in writing of the actual
payment by GTC of any such funds to third parties to the extent ************.

B. Payments made to GTC by LFB Biotech under this Section 8.2(c)(iii) shall be
added to the amount of the Development Costs incurred by LFB Biotech as of the
date of each such payment for purposes of calculating the IPV of LFB Biotech
under the relevant Profit Participation Model determined in accordance with the
provisions of Section 8.2(b) of this Agreement. Pursuant to Section 8.2(b)(ii),
such payments will be given a weight of ************ in the calculation of LFB
Biotech’s IPV for each Product. For fiscal years starting with the fiscal year
2009, GTC shall be allowed to fund an amount in excess of ************ of the
Development Costs of a Product referred to in Section 8.2(c)(iii)(A)(an “Excess
Amount”), provided that the Excess Amount with respect to such Product may not
exceed ************. The funding of such Excess Amount by GTC shall be taken
into consideration in determining the IPV allocations for such Product pursuant
to the provisions of Section 8.2(b). Notwithstanding the foregoing, if on the
date of receipt of written confirmation of Major Regulatory Approval with
respect to any such Product, GTC shall not have funded the entire Excess Amount
with respect to such Product as provided above, then prior to the determination
of the final Product Participation Model with respect to such Product, GTC may
reimburse LFB Biotech up to an amount that would equalize the respective
Parties’ IPV with respect to such Product, with the amount so reimbursed being
credited to GTC in the calculation of its IPV with respect to such Product and
an equal amount being deducted from LFB Biotech in the calculation of its IPV
with respect to such Product.

(d) Reimbursement of Commercialization Costs. Each Operating Party will be
reimbursed for its Commercialization Costs with respect to a Product out of net
revenues on Net Sales and other revenues derived from such Product prior to the
distribution of Net Profits to the Operating Parties in accordance with
Section 8.3(c). After reimbursement of such costs, Net Profits shall be
allocated between the Operating Parties in accordance with their respective
Product Participation and distributed in accordance with Section 8.3(c). In
addition, in the first year that there are Net Profits, if one Operating Party’s
Product

 

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Participation for a Product is ************ but is ************, the IPV
Difference of the Greater Funding Operating Party with respect to such Product
shall be reimbursed to such Greater Funding Party out of its greater portion of
Net Profits (based upon Product Participation in the first year of Net Profits)
until such time as the IPV Difference is reimbursed in full, at which time the
Product Participations of each Operating Party shall be adjusted in accordance
with Section 8.2(b)(iv)(C). If the aggregate Commercialization Costs of the
Operating Parties exceed the aggregate Net Sales and other revenues of the
Collaboration as a whole with respect to such Product in a calendar year, the
amount of the net loss shall be treated as follows, depending on the calculated
Product Participation for each Operating Party:

(i) If each Operating Party’s Product Participation for the relevant Product is
************, the amount of the loss incurred by each Operating Party will be
counted at ************ of cost value in the IPV reimbursement calculation in
the Product Participation Model in the calendar year in which the loss is
recorded and will result in an adjustment to the amount of the IPV Difference
that must be reimbursed to the Greater Funding Party pursuant to this
Section 8.2(d).

(ii) If an Operating Party’s Product Participation for a Product is ************
but is ************, net losses incurred will be considered the responsibility
of each Operating Party in accordance with its Product Participation percentage.
For example, if an Operating Party has a Product Participation ************,
such Operating Party will be responsible for ************ of the net losses with
respect to such Product in the applicable calendar year. If at the end of any
calendar year, an Operating Party has funded less than its allocated percentage
of aggregate net losses, such Operating Party shall reimburse the other
Operating Party to the extent of such under funding. Such payment will be made
in accordance with Section 8.3(c).

(iii) If an Operating Party’s Product Participation for a Product is
************ net losses incurred will be considered the responsibility of each
Operating Party in accordance with its Product Participation percentage until
such time as the Product is no longer subject to this Agreement. When such
Operating Party ************ as described in Section 8.2(c)(ii), the foregoing
provisions, including reimbursement on an annual basis, will apply to the extent
applicable with respect to net losses incurred ************. Any reimbursement
payment will be made in accordance with Section 8.3(c).

8.3 Reports.

(a) Quarterly Development and Commercialization Reports. Within ************
following the close of each calendar quarter during the Term, each Operating
Party will submit to the JSC and LFB/GTC LLC a written report setting forth in
reasonable detail, on a Product-by-Product basis, such Operating Party’s
Development Activities and Commercialization Activities for such Product and its
actual costs (including Development Costs and Commercialization Costs) incurred
in connection with the Development and/or Commercialization of Product(s) for
such quarter, together with the aggregate amounts as at the end of such quarter
past due and unpaid to Third Parties in respect of goods or services

 

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furnished by such Third Parties to the reporting Operating Party in connection
with its activities under this Agreement. The reports specified in this
Section 8.3(a) shall be used in monitoring the Operating Parties’ compliance
with their respective Development and Commercialization obligations under this
Agreement and by the JSC in updating the Development and Commercialization Plans
in accordance with Sections 5.1 and 6.1 and the Product Participation Models in
accordance with Section 8.2.

(b) Quarterly Net Profits Reports. During the Term following First Commercial
Sale with respect to a Product, each Operating Party shall, within ************
following the end of each calendar quarter, furnish to the JSC and LFB/GTC LLC a
written quarterly report showing, in reasonable detail and on a
Product-by-Product basis: (i) the gross sales of Product sold by such Operating
Party, its Affiliates, sublicensees and/or subcontractors; (ii) any other
revenues relating to the Products, including without limitation royalties and
any other payments from sublicensees or subcontractors; (iii) a calculation of
Net Sales of the Operating Party for such quarter; (iv) the Development Costs of
such Operating Party for such quarter, and (v) the Commercialization Costs of
such Operating Party for such quarter.

(c) Annual Reconciliation of Net Profit. On an annual basis during the Term, and
upon the expiration or termination of this Agreement, the JSC (or a subcommittee
thereof) shall submit to LFB/GTC LLC and to each of the Operating Parties within
************ of the end of the applicable calendar year, or of the effective
date of termination, as the case may be, a summary report setting forth, on a
Product-by-Product basis for the previous calendar year (or portion thereof) and
for the cumulative program to date for each Product from the Product Start Date
through the period of the report: (i) the gross sales of Product sold by each
Operating Party, its Affiliates, sublicensees and/or subcontractors; (ii) any
other revenues of each Operating Party relating to the Products, including
without limitation royalties and any other payments from sublicensees or
subcontractors; (iii) a calculation of Net Sales of each Operating Party;
(iv) the Development Costs of each Operating Party, and (v) the
Commercialization Costs of each Operating Party. Such report shall account for
any differences between the Operating Parties’ accounting methodologies in a
manner to be reasonably agreed among the Parties. The report shall also
indicate, on a Product-by-Product basis, the Product Participation of each
Operating Party and the amount of IPV (if prior to the First Commercial Sale) or
of Net Profits due each Operating Party (if after the First Commercial Sale) for
the applicable reporting period based on the Product Participation Model, and
shall reconcile such amount with the net profits and loss statements of such
Operating Party for the applicable reporting period. If the report indicates
that the Net Profits received by an Operating Party with respect to a Product in
the reporting period exceed the amount due such Operating Party for such
reporting period, such Operating Party shall pay the other Operating Party the
amount of the difference within ************ following receipt of the report
(each such payment, a “Profit Payment”). If the report indicates that there is
an aggregate net loss, the provisions of Section 8.2 shall determine the
treatment of the Operating Parties’ respective losses and any reimbursement due
from one Operating Party to the other shall be made within ************ days
following receipt of the report.

 

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8.4 Records; Audit.

(a) Records. The Operating Parties shall keep, and shall cause their respective
Affiliates and subcontractors to keep, complete, true and accurate books and
records with respect to all data related to sales of and costs incurred in
connection with the Products, and specifically regarding sales figures, in
accordance with the defined Accounting Standards and in sufficient detail to
reflect all gross sales, Net Sales, Development Costs and Commercialization
Costs, and to enable the amount of Net Profits due each Operating Party
hereunder to be determined. The Operating Parties will keep, and shall cause
their respective Affiliates and subcontractors to keep, such books and records
for at least ************ following the end of the calendar quarter to which
they pertain. Such books and records shall be kept by each Operating Party, or
the applicable Affiliate or subcontractor, at its principal place of business.

(b) Audit of Records.

(i) During the Term and for ************ thereafter, LFB/GTC LLC and each
Operating Party shall have the right, at its own expense, through an independent
certified public accounting firm of nationally or internationally recognized
standing (or such other independent Third Party on which the Parties may agree)
acceptable to the other Operating Party, to review financial and related records
in the location(s) where such records are maintained by the other Operating
Party or such other Operating Party’s Affiliates or subcontractors, upon
reasonable notice, during regular business hours and under obligations of
confidence, for the sole purpose of verifying such other Operating Party’s
compliance with its obligations under this Agreement; provided that such
examination shall not take place more than once per calendar year and shall not
cover records for more than the preceding ************; and provided further
that such accounting firm or other Third Party auditor shall first have entered
into a confidentiality agreement mutually agreeable to the Operating Parties.
The results of such review shall be made available to all Parties.

(ii) If the review reflects any significant misreporting of expenses or
performance by the Operating Party subject to the review, i.e. the amount of
such misreporting is equal to or ************ of the expense or performance
amount that should have properly been reported during the applicable reporting
period or is in excess of ************, the Operating Party subject to the
review shall pay all of the costs of such review and, in the event of any
underpayment shall pay any additional sum, including interest charges (at a rate
************ percentage points above LIBOR), shown to be due to the other
Operating Party.

(iii) In the event that either Operating Party in good faith disputes the
results of the review, or any specific aspect thereof, then such Operating Party
shall inform the other Operating Party and LFB/GTC LLC by written notice within
************ days after receiving the result of the review, specifying in detail
the reasons for disputing the results thereof. The Operating Parties and LFB/GTC
LLC shall promptly thereafter meet and negotiate in good faith a resolution to
such dispute. In the event that the Parties are unable to resolve such dispute
within ************ days after such dispute notice is received, the matter shall
be resolved in a manner consistent with the procedures set forth in Article 15.

 

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8.5 Currency of Account and Payment. For purposes of Sections 8.2, 8.3 and 8.4,
all amounts will be calculated in United States Dollars and all Profit Payments
hereunder shall be calculated and paid in United States Dollars. Conversion into
United States Dollars from other currencies for purposes of calculating Net
Profits and of setting and adjusting the Product Participation Models shall be
calculated using average rates published by the ECB for the calendar month in
which the sale of the Product occurred or the relevant Development Cost or
Commercialization Cost was incurred, as the case may be. Any rates not listed by
the ECB, will be derived using the average Exchange Rates published in the Wall
Street Journal for the applicable calendar month. All amounts invoiced by GTC
for goods or services will be invoiced and paid in United States Dollars and all
amounts invoiced by LFB Biotech for goods or services shall be invoiced and paid
in Euros, in each case except as otherwise may be agreed.

8.6 Blocked Currency. If by reason of exchange controls or other laws in a
particular jurisdiction an Operating Party is unable to convert to United States
Dollars or Euros, as the case may be, in accordance with Section 8.5, and
transfer any portion of the amount payable by such Operating Party under this
Agreement, then such Operating Party shall promptly notify the other Operating
Party in writing and shall pay such amounts through such means or methods as are
lawful in such jurisdiction as the other Operating Party may reasonably
designate. Failing the designation by the other Operating Party of such lawful
means or methods within ************ after such notice is given to such other
Operating Party, the Operating Party responsible for making such payment shall
deposit such payment in local currency to the credit of the other Operating
Party in a recognized banking institution designated by the Operating Party
entitled to such payment, or if none is designated within the ************
period described above, in a local banking institution selected by the Operating
Party responsible for making such payment and identified in a written notice to
the Operating Party entitled to such payment, and such deposit shall fulfill all
obligations of the Operating Party responsible for making such payment with
respect thereto.

8.7 Taxes.

(a) Cooperation and Coordination. The Parties acknowledge and agree that it is
their mutual objective and intent to minimize, to the extent permitted under
applicable laws and regulations, taxes payable with respect to their
collaboration efforts under this Agreement and the LLC Agreement and that they
shall use their best efforts to cooperate and coordinate with each other to
achieve such objective.

(b) Payment of Tax. An Operating Party receiving a payment pursuant to this
Article 8, or otherwise deemed to receive a payment under this Agreement and/or
the LLC Agreement, shall pay any and all taxes levied on such payment or deemed
payment. If applicable laws or regulations require that taxes be deducted and
withheld from a payment made pursuant to this Article 8, the remitting Party
shall (i) deduct those taxes from the payment; (ii) pay the taxes to the proper
taxing authority; and (iii) send evidence of the obligation together with proof
of payment to the receiving Operating Party within ************ following that
payment.

 

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(c) Tax Residence Certificate. An Operating Party receiving a payment pursuant
to this Article 8 shall provide the remitting Operating Party a certification
from the revenue authorities of any jurisdiction that it is a tax resident of
that jurisdiction if such receiving Operating Party wishes to claim the benefits
of an income tax treaty to which that jurisdiction is a party. Upon the receipt
thereof, any deduction and withholding of taxes shall be made at the appropriate
treaty tax rate.

(d) Assessment. Either Operating Party may, at its own expense, protest any
assessment, proposed assessment, or other claim by any governmental authority
for any additional amount of taxes, interest or penalties or seek a refund of
such amounts paid if permitted to do so by law. The Parties shall cooperate with
each other in any protest by providing records and such additional information
as may reasonably be necessary for an Operating Party to pursue such protest.

ARTICLE 9

PATENTS AND INVENTIONS

9.1 Ownership.

(a) Sole Inventions. Except as otherwise expressly provided in this Agreement,
as between GTC and LFB Biotech, and subject to the express license grants under
Articles 3, 7.4 and 14 hereof, each Operating Party shall exclusively own all
and retain all right, title and interest in and to all Inventions and Know-How
made solely by the employees, contractors, consultants or agents of such
Operating Party, its Affiliates or sublicensees, as applicable (“Sole
Inventions”).

(b) Joint Inventions. LFB Biotech and GTC shall ************ all Inventions and
Know-How invented jointly by the employees or agents of LFB Biotech and GTC or
their respective Affiliates, with or without Third Parties (the “Joint
Inventions”), and any Patent Rights that claim such Joint Inventions (the “Joint
Patent Rights”). Neither LFB Biotech nor GTC, ************, shall have the right
************.

(c) Inventorship. Solely for the purpose of determining ownership of Inventions
with respect to any US Patent Rights under this Section 9.1, inventorship shall
be determined in accordance with United States patent laws.

9.2 Patent Prosecution.

(a) LFB Biotech Patent Rights and Joint Patent Rights in LFB Biotech’s
Territory.

(i) LFB Biotech shall retain sole and exclusive ownership of all LFB Biotech
Patent Rights and, subject to Section 9.2(a)(ii), shall retain control over, and
bear all expenses associated with, the filing, prosecution, and maintenance of
any LFB Biotech Patent Rights in the entire Territory and any Joint Patent
Rights in the European Territory and any country or region of the Co-Exclusive
Territory as the JSC may designate. LFB Biotech shall

 

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confer in good faith with LFB/GTC LLC and GTC regarding LFB Biotech’s patent
strategy with respect to any LFB Biotech Patent Rights licensed to LFB/GTC LLC
and sublicensed to GTC hereunder and any Joint Patent Rights in LFB Biotech’s
respective Territory or region and LFB/GTC LLC and GTC shall have the right to
comment upon LFB Biotech’s strategy.

(ii) In the event LFB Biotech decides, at its sole discretion, not to file,
nationalize or validate a patent application covering an LFB Biotech Sole
Invention or Joint Invention or LFB Biotech Know-How in any country in the
Territory or LFB Biotech decides not to continue to prosecute or maintain a
patent or patent application included in the LFB Biotech Patent Rights licensed
to LFB/GTC LLC and sublicensed to GTC hereunder, LFB Biotech shall promptly
notify LFB/GTC LLC and GTC of such decision and GTC shall have the right to
file, prosecute, and maintain such patent or patent application at its sole
expense and discretion. If GTC elects to file, prosecute, or maintain such
patent or patent application (as applicable) at its own expense, LFB/GTC LLC and
LFB Biotech shall reasonably cooperate with GTC in connection with such filing,
prosecution and/or maintenance.

(b) GTC Patent Rights and Joint Patent Rights in GTC’s Territory.

(i) GTC shall retain sole and exclusive ownership of all GTC Patent Rights and,
subject to Section 9.2(b)(ii), shall retain control over, and bear all expenses
associated with, the filing, prosecution, and maintenance of any GTC Patent
Rights in the entire Territory and any Joint Patent Rights in the North American
Territory and any country or region of the Co-Exclusive Territory as the JSC may
designate. GTC shall confer in good faith with LFB/GTC LLC and LFB Biotech
regarding GTC’s patent strategy with respect to any GTC Patent Rights licensed
LFB/GTC LLC and sublicensed to LFB Biotech hereunder and any Joint Patent Rights
in GTC’s respective Territory or region and LFB/GTC LLC and LFB Biotech shall
have the right to comment upon GTC’s strategy.

(ii) In the event GTC decides, at its sole discretion, not to file, nationalize
or validate a patent application covering a GTC Sole Invention or Joint
Invention or GTC Know-How in any country in the Territory or GTC decides not to
continue to prosecute or maintain a patent or patent application included in the
GTC Patent Rights licensed to LFB/GTC LLC and sublicensed to LFB Biotech
hereunder, GTC shall promptly notify LFB/GTC LLC and LFB Biotech of such
decision and LFB Biotech shall have the right to file, prosecute, and maintain
such patent or patent application at its sole expense and discretion. If LFB
Biotech elects to file, prosecute, or maintain such patent or patent application
(as applicable) at its own expense, LFB/GTC LLC and GTC shall reasonably
cooperate with LFB Biotech in connection with such filing, prosecution and/or
maintenance.

9.3 Enforcement of Patent Rights.

(a) Notice. Each Party shall give prompt written notice to the other Parties
promptly after gaining knowledge of any Third Party activity that infringes any
GTC Patent Right, LFB Biotech Patent Right, or Joint Patent Right, or if any
declaratory judgment action is filed by a Third Party against such Operating
Party alleging noninfringement or invalidity of any GTC Patent Right, LFB
Biotech Patent Right or Joint Patent Right.

 

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(b) Enforcement Rights.

(i) LFB Biotech Patent Rights. LFB Biotech shall have the primary right, but not
the obligation, to institute, prosecute and control any action or proceeding
with respect to any unauthorized Third Party activity under the LFB Biotech
Patent Rights, including any LFB Biotech Patent Rights licensed to LFB/GTC LLC
and sublicensed to GTC hereunder. If LFB Biotech fails to bring an infringement
action under such LFB Biotech Patent Rights or to notify LFB/GTC LLC and GTC
whether or not LFB Biotech intends to bring such action, in each case within a
period of ************ after delivery of the notice set forth in Section 9.3(a),
then GTC shall have the right, but not the obligation, to bring and control an
action with respect to such Third Party activity, by counsel of its own choice.

(ii) GTC Patent Rights. GTC shall have the primary right, but not the
obligation, to institute, prosecute and control any action or proceeding with
respect to any unauthorized Third Party activity under the GTC Patent Rights,
including any GTC Patent Rights licensed to LFB/GTC LLC and sublicensed to LFB
Biotech hereunder. If GTC fails to bring an infringement action under such GTC
Patent Rights or to notify LFB/GTC LLC and LFB Biotech whether or not it intends
to bring such action, in each case within a period of ************ after
delivery of the notice set forth in Section 9.3(a), then LFB Biotech shall have
the right, but not the obligation, to bring and control an action with respect
to such Third Party activity, by counsel of its own choice.

(iii) Joint Patent Rights. LFB Biotech shall have the primary right, but not the
obligation, to institute, prosecute and control any action or proceeding with
respect to any unauthorized Third Party activity under the Joint Patent Rights
in the European Territory. GTC shall have the primary right, but not the
obligation, to institute, prosecute and control any action or proceeding with
respect to any unauthorized Third Party activity under the Joint Patent Rights
in the North American Territory. The Operating Parties shall mutually agree upon
which Operating Party shall have the primary right, but not the obligation, to
institute, prosecute and control any action or proceeding with respect to any
unauthorized Third Party activity under the Joint Patent Rights in the
Co-Exclusive Territory. If the Operating Party having the primary right to
institute, prosecute and control any action or proceeding pursuant to this
Section 9.3(b)(iii) fails to bring an infringement action under the Joint Patent
Rights or to notify the other Operating Party and LFB/GTC LLC whether or not it
intends to bring such action, in each case within a period of ************ after
delivery of the notice set forth in Section 9.3(a), then the other Operating
Party shall have the right, but not the obligation, to bring and control an
action with respect to such Third Party activity, by counsel of its own choice.

(iv) Notification; Cooperation. If an Operating Party intends to initiate an
infringement action under this Section 9.3(b), or decides not to initiate such
action, it shall promptly provide written notice to the other Operating Party
and the JSC of such intent. The Operating Party controlling any action under
this Section 9.3(b) shall notify the other Operating Party and the JSC promptly
upon commencement of such action and shall keep the other Operating Party and
the JSC reasonably informed of the status of such action. In connection with any
action under this Section 9.3(b), the Parties will cooperate fully and

 

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will provide each other with any information or assistance that the other may
reasonably request, at the expense of the Operating Party initially bringing the
action. Notwithstanding an Operating Party’s right to control an action under
this Section 9.3(b), neither Operating Party shall settle or compromise any
claim or proceeding that would adversely affect the scope, validity or
enforceability of any Patent Right granted by one Party to another hereunder or
otherwise adversely affect the rights and licenses granted hereunder unless
agreed to in writing by both Operating Parties and LFB/GTC LLC, which consent
shall not be unreasonably withheld or delayed.

(c) Allocation of Recovery. Any damages or monetary awards recovered by the
Operating Party enforcing an action hereunder shall (i)(A) first be applied to
reimburse such Operating Party in an amount equal to the costs and expenses of
such Operating Party in connection with such litigation, and (B) then be applied
to reimburse the non-enforcing Parties in an amount equal to the costs and
expenses of such Parties in connection with such litigation, and (ii) any
remaining balance shall be ************.

9.4 Claimed Infringement. In the event that a Party becomes aware of any Third
Party claim that the manufacture, use, sale, offer for sale, and/or importation
of any Product in the Territory infringes the Patent Rights of any such Third
Party, the terms and conditions of Article 13 shall apply.

9.5 Declaratory Actions. The rights of the Operating Parties to defend any
declaratory judgment action alleging noninfringement or invalidity of any GTC
Patent Right, LFB Biotech Patent Right or Joint Patent Right shall be consistent
with the rights of the Operating Parties to prosecute and control an action
against a Third Party pursuant to Section 9.3(b).

9.6 Costs of Patent Prosecution and Enforcement. All costs incurred or paid by
an Operating Party in prosecuting and enforcing any Patent Rights in accordance
with this Article 9, to the extent not otherwise reimbursed to or recovered by
such Operating Party, shall be treated as Development Costs of such Operating
Party to the extent incurred during the Development Phase, and as
Commercialization Costs of such Operating Party to the extent incurred during
the Commercialization Phase.

ARTICLE 10

TRADEMARK USAGE AND MAINTENANCE

10.1 Trademarks.

(a) Selection of Product Marks. Promptly after the Effective Date, LFB Biotech
and GTC agree to undertake a program to identify suitable trademarks for use
with the Initial Product in the Territory under this Agreement, it being agreed
that the Originating Party shall make a presentation to the non-Originating
Party as to the trademarks it considers appropriate. The objective of the
Operating Parties is to develop a single trademark suitable for use throughout
the Territory but the Operating Parties recognize that it may be necessary or
desirable to use additional or alternative trademarks in certain Territories or
certain

 

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countries within the Territories. As additional Products are added to the
Agreement pursuant to Section 2.1, the Operating Parties shall undertake a
similar program with respect to each Product to identify suitable trademarks for
use in connection such Products hereunder, with the Originating Party making a
presentation to the non-Originating Party as to the trademarks it considers
appropriate. All trademarks which the Operating Parties decide should be used
for a Product (with respect to such Product the “Product Trademark” or the
“Product Trademarks”) will be owned by the Originating Party of such Product
(the “Trademark Owner”). Similarly, the Operating Parties will cooperate in the
selection and approval (i.e., through USAN and WIPO) of a generic name for each
Product and a domain name with respect to each Product, with the objective the
each Product shall have the same approved generic name and the same domain name
throughout the entire Territory. The provisions of this Agreement as to the
ownership and licensing of Product Trademarks shall apply mutatis mutandis to
the ownership and licensing of generic names and domain names.

(b) Product Trademark Prosecution. The Trademark Owner shall be responsible for
filing and prosecuting applications to register its Product Trademarks in the
entire Territory, and for maintenance of such registrations thereafter, and
shall initially bear all costs associated therewith, provided that the Trademark
User shall reimburse the Trademark Owner for all costs associated with filing,
prosecuting and maintaining its Product Trademark in the Trademark User’s
exclusive Territory and in each country or region in the Co-Exclusive Territory
designated to such Trademark User in the Commercialization Plan for such
Product. GTC shall consult with LFB Biotech and LFB/GTC LLC with respect to the
countries or regions (e.g. a Community Trade Mark) in which registration of
Product Trademarks owned by GTC will be sought in the European Territory, and
will register the Product Trademarks in all such countries or regions as
reasonably requested by LFB Biotech or LFB/GTC LLC in the European Territory.
LFB Biotech will register Product Trademarks owned by LFB Biotech in the United
States and Canada. The Trademark Owner will consult with the Trademark User and
LFB/GTC LLC with respect to the countries or regions within the Co-Exclusive
Territory in which the Product Trademarks owned by the Trademark Owner will be
registered and will register the Product Trademarks in all such countries or
regions as reasonably requested by the Trademark User or LFB/GTC LLC.

(c) Product Trademark Enforcement. LFB Biotech shall be responsible for
enforcing the Product Trademarks in the European Territory and shall bear all
costs associated therewith and GTC shall be responsible for enforcing the
Product Trademarks in the North American Territory and shall bear all costs
associated therewith. The Operating Parties shall mutually determine, through
the JSC, on a Product- by- Product and country-by-country basis, which Operating
Party shall be responsible for enforcing the Product Trademarks in respect of
the relevant Product in the Co-Exclusive Territory. Each Operating Party shall
promptly inform the other Operating Party, the JSC and LFB/GTC LLC in writing of
any alleged or threatened infringements of the Product Trademarks in the
Territory, or of any challenge to the validity of the Product Trademarks of
which they become aware, and the JSC shall consider the action to be taken. In
the event that the Operating Parties, through the JSC, elect to prosecute or
defend the matter, they will determine which Operating Party will do so using
counsel approved by both Operating Parties and the JSC, and no settlement,
consent judgment or other voluntary disposition of the matter may be entered
into by either Operating Party without the consent of the other Operating Party.

 

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(d) No Implied Licenses. Except for the license granted in Section 3.7, nothing
herein shall create any rights of either Operating Party in and to any Product
Trademarks owned by the other Party as provided in this Agreement.

(e) Costs of Trademark Prosecution and Enforcement. All costs incurred or paid
by an Operating Party in prosecuting and enforcing Product Trademarks for a
Product in accordance with this Article 10, to the extent not otherwise
reimbursed to or recovered by such Operating Party, shall be treated as
Development Costs of such Operating Party to the extent incurred during the
Development Phase, and as Commercialization Costs of such Operating Party to the
extent incurred during the Commercialization Phase.

ARTICLE 11

COVENANTS, REPRESENTATIONS, AND WARRANTIES

11.1 Mutual Covenants. Each Operating Party covenants the following:

(a) That it shall comply, and cause its Affiliates, employees, agents,
sublicensees and subcontractors to comply, with all federal, state, provincial,
territorial, governmental, and local laws, rules, and regulations applicable to
the Development, manufacture, and Commercialization of Products in the Territory
by such Operating Party pursuant to the Development Plan, the Commercialization
Plan, and this Agreement, including without limitation, with respect to the
United States, the Prescription Drug Marketing Act, the Federal Food, Drug and
Cosmetics Act of 1938, as amended, the Health Insurance Portability and
Accountability Act, the Federal Anti-Kickback Statute, and any applicable FDA
regulations relating to sampling practices.

(b) That it shall disclose promptly, without delay, to the other Parties all
information in its Control, and as to which it becomes aware, concerning side
effects, injury, toxicity, or sensitivity reaction and incidents or severity
thereof with respect to the Products.

(c) That it shall not, and shall cause its Affiliates not to, during the Term,
grant, assign, transfer, convey or otherwise encumber its right, title and
interest in its respective Patent Rights and Know-How in a manner that conflicts
or is inconsistent with the rights and licenses granted to the other Parties
under this Agreement.

(d) To the extent that any of its obligations under this Agreement require
performance or observance by one or more of its Affiliates, it has made, or
shall have made prior to the time such performance or observance is required,
arrangements with the relevant Affiliate(s) to cause such obligations to be
performed or observed in accordance with the terms and conditions of this
Agreement.

(e) At no time during the Term shall its past due and unpaid obligations to
Third Parties in respect of goods or services furnished by such Third Parties to
such Operating Party in connection with its activities under this Agreement
exceed ************ in the aggregate.

 

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11.2 Representations and Warranties of the Parties.

(a) LFB/GTC LLC, GTC, LFB Biotech and LFB-US each represents and warrants to the
other that, as of the Effective Date:

(i) it is duly organized, validly existing, and in good standing under the laws
of its jurisdiction of incorporation or organization;

(ii) it has the authority and right to enter into this Agreement and to perform
its obligations hereunder;

(iii) this Agreement is a legal and valid obligation binding upon it and is
enforceable in accordance with its terms, subject to applicable limitations on
such enforcement based on bankruptcy laws and other debtors’ rights;

(iv) its execution, delivery and performance of this Agreement will not conflict
in any material fashion with the terms of any other agreement or instrument to
which it is or becomes a party or by which it is or becomes bound, subject to
the terms of any disclosure that any Party shall have made to the other Parties
on the date hereof nor violate any law or regulation of any court, governmental
body or administrative or other agency having authority over it;

(v) to its knowledge, all necessary consents, approvals and authorizations of
all government authorities and other persons required to be obtained as of the
Effective Date in connection with the execution, delivery and performance of
this Agreement have been obtained; and

(vi) neither its name nor the name of any of its Affiliates or their respective
employees or consultants who will be undertaking any activities related to this
Agreement or the Product are listed on the debarment list maintained by the FDA
pursuant to 21 U.S.C. § 335(a) and § 335(b) and published on the internet at the
following address (or any successor address):
http://www.fda.gov/ora/compliance_ref/debar/default.htm.

11.3 Additional Representations and Warranties of LFB Biotech. LFB Biotech
hereby represents and warrants to LFB/GTC LLC and GTC that, as of the Effective
Date:

(a) There are no claims or, to LFB Biotech’s knowledge, written threats of
interference, nullity or similar invalidity proceedings (or the equivalent in
countries outside the United States) pending with respect to the LFB Biotech
Patent Rights;

(b) Neither LFB Biotech nor any of its Affiliates has previously granted,
assigned, transferred, conveyed or otherwise encumbered its right, title and
interest in the LFB Biotech Technology in a manner that conflicts or is
inconsistent with the rights and licenses granted to LFB/GTC LLC and GTC under
this Agreement;

 

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(c) To the best of LFB Biotech’s knowledge, LFB Biotech or its Affiliates
Controls all right, title and interest in and to the LFB Biotech Technology,
including any data, materials and animals provided to GTC hereunder, and LFB
Biotech has the right to grant the rights and licenses granted to LFB/GTC LLC
and GTC hereunder; and

(d) There is no action, claim, demand, suit, proceeding, arbitration, grievance,
citation, summons, subpoena, inquiry or investigation pending or relating to or,
to LFB Biotech’s knowledge, threatened that the LFB Biotech Technology infringes
upon the patent rights or other intellectual property rights of any Third Party.

11.4 Additional Representations and Warranties of GTC. GTC hereby represents and
warrants to LFB/GTC LLC and LFB Biotech that, as of the Effective Date:

(a) There are no claims or, to GTC’s knowledge, written threats of interference,
nullity or similar invalidity proceedings (or the equivalent in countries
outside the United States) pending with respect to the GTC Patent Rights;

(b) Neither GTC nor any of its Affiliates has previously granted, assigned,
transferred, conveyed or otherwise encumbered its right, title and interest in
the GTC Technology in a manner that conflicts or is inconsistent with the rights
and licenses granted to LFB/GTC LLC and LFB Biotech under this Agreement;

(c) To the best of GTC’s knowledge, GTC or its Affiliates Controls all right,
title and interest in and to the GTC Technology, including any materials
provided to LFB Biotech hereunder, and GTC has the right to grant the rights and
licenses granted to LFB/GTC LLC and LFB Biotech hereunder; and

(d) There is no action, claim, demand, suit, proceeding, arbitration, grievance,
citation, summons, subpoena, inquiry or investigation pending or relating to or,
to GTC’s knowledge, threatened that the GTC Technology infringes upon the patent
rights or other intellectual property rights of any Third Party.

11.5 Performance by Affiliates. Any Operating Party may perform some or all of
its obligations under this Agreement through one or more of its Affiliates or
sublicensees or subcontractors, provided, however, that such Operating Party
shall remain responsible for, and be guarantor of, the performance by its
Affiliates, sublicensees and subcontractors.

ARTICLE 12

CONFIDENTIALITY

12.1 Treatment of Confidential Information. Except as provided below, the
Parties agree that during the Term, and for a period of ************ thereafter,
each Party (the “Receiving Party”) shall (a) maintain in confidence Confidential
Information of each other Party (the “Disclosing Party”) to at least the same
extent and with the same degree of care as the Receiving Party maintains its own
proprietary information of similar kind and value (but at a minimum each Party
shall use Commercially Reasonable Efforts), including, without

 

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limitation, using Commercially Reasonable Efforts to protect the integrity and
confidentiality of the Disclosing Party’s Confidential Information, (b) not
disclose such Confidential Information to any Third Party without prior written
consent of the Disclosing Party, except for disclosures made in confidence to
any Third Party that are explicitly permitted by the Development Plan or
Commercialization Plan or approved by the JSC, and (c) not use such Confidential
Information for any purpose except those permitted by this Agreement.

12.2 Exceptions. Notwithstanding the foregoing, the Receiving Party shall have
no such confidentiality and non-use obligations with respect to any portion of
the Confidential Information of the Disclosing Party that:

(a) at the time of disclosure by the Disclosing Party to the Receiving Party,
was generally available to the public, or after such disclosure, becomes
generally available to the public through no fault attributable to the Receiving
Party; or

(b) was known to the Receiving Party, without obligation to keep it
confidential, prior to when it was received from the Disclosing Party, as
evidenced by the Receiving Party’s written records in existence at the time of
disclosure; or

(c) is subsequently disclosed to the Receiving Party, without obligation to keep
it confidential, by a Third Party lawfully in possession thereof and having the
right to so disclose; or

(d) as demonstrated by the Receiving Party by competent written proof, has been
independently developed by employees of the Receiving Party who do not have
access to or knowledge of such Confidential Information.

12.3 Authorized Disclosures. Nothing in this Agreement shall prohibit the
Receiving Party from disclosing Confidential Information of the Disclosing
Party, as well as the terms and conditions of this Agreement:

(a) to the Receiving Party’s Affiliates, employees, agents, consultants,
sublicensees, clinical investigators, and contract manufacturers, if any, but
only on a need-to-know basis for purposes provided for in this Agreement,
provided that such disclosure occurs pursuant to a written confidentiality
agreement containing provisions at least as protective as those of this Article
12;

(b) to the Receiving Party’s professional advisors or investors who are bound by
a duty of confidentiality with obligations at least as protective as the
provisions of this Article 12;

(c) to the extent required by court order, law, or regulation, provided that the
Receiving Party provides the Disclosing Party prior written notice of the
required disclosure and takes reasonable steps to limit such disclosure to the
minimum required amount and to obtain, or cooperate with the other Disclosing
Party in obtaining, a protective order or other similar order requiring that
such Confidential Information be used only for the purposes required by such
court order, law, or regulation.

 

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12.4 Publicity. All publicity, press releases, and other public announcements
relating to this Agreement or the performance hereunder other than publications
described in Section 12.5 shall be reviewed in advance by, and shall be subject
to the written approval of, all Parties (which approval shall not be
unreasonably withheld). Notwithstanding the foregoing, any disclosure which is
required by law or any listing or securities trading agreement concerning a
Party’s publicly traded securities, based upon advice of the disclosing Party’s
counsel, may be made without the prior consent of the other Parties, provided
that (a) the other Parties shall be given prompt notice of any such legally
required disclosure and to the extent practicable the disclosing Party shall
provide the other Parties an opportunity to comment on the proposed disclosure
and in the case of the legally required disclosure of the text of this
Agreement, to request the redaction of such parts hereof as may be appropriate,
which request shall be transmitted by the disclosing Party to the authority
requiring such disclosure, and (b) such disclosure is limited only to the
information that is required to be disclosed by the applicable foregoing
exception. Notwithstanding any of the foregoing, the Parties acknowledge that
GTC shall disclose on a Current Report on Form 8-K the existence of this
Agreement and its material terms within ************ Business Days after the
Restatement Date.

12.5 Publication.

(a) Each Party agrees that it shall not, and shall cause its Affiliates not to,
publish or present to the public the results of non-clinical studies or clinical
trials or other information related to any Product in the Territory without the
opportunity for prior review by the other Parties. If a Party (the “Publishing
Party”) wishes to publish or to present to the public such results, then it
shall provide the other Parties (the “Non-Publishing Parties”) the opportunity
to review any of the Publishing Party’s proposed abstracts, manuscripts or
presentations (including verbal presentations) which relate to the Product at
least ************ prior to its intended submission for publication and agrees,
upon request, not to submit any such abstract or manuscript for publication
until the other Parties are given a reasonable period of time to secure patent
protection for any material in such publication which it believes to be
patentable. All Parties understand that a reasonable commercial strategy may
require delay of publication of information or filing of patent applications.
The Parties agree to review and consider delay of publication and filing of
patent applications under certain circumstances. No Party or its Affiliates
shall have the right to publish or present to the public Confidential
Information of the other Parties, except as permitted under Sections 12.2 or
12.3. Nothing contained in this Section 12.5 shall prohibit the inclusion of
information necessary for a patent application, provided that the non-Publishing
Parties are given a reasonable opportunity to review the information to be
included prior to submission of such patent application. Notwithstanding
anything to the contrary herein, any Party may disclose information about the
clinical trials performed or to be performed on Products hereunder, without the
need to obtain the other Parties’ approval (provided, however, that the
Publishing Party will use reasonable efforts to inform the other Parties and to
allow the other Parties to comment on the disclosure), to the extent that such
disclosure is reasonably necessary to comply with applicable laws, regulations
and guidelines of Regulatory Authorities.

 

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(b) It is understood that a detail of the Product in the Territory shall not be
considered to be publication or presentation to the public and shall therefore
not be subject to the requirements of Section 12.5(a).

12.6 Termination of Prior Confidentiality Agreements. This Agreement supersedes
all nondisclosure agreements entered into by the Parties prior to the Effective
Date. All information exchanged between the Parties that qualified as
confidential or proprietary under such nondisclosure agreements prior to the
Effective Date shall be deemed Confidential Information hereunder and shall be
subject to the terms of this Article 12.

ARTICLE 13

INDEMNIFICATION

13.1 Indemnification by LFB Biotech and LFB-US. Unless otherwise provided
herein, LFB Biotech and LFB-US agree, jointly and severally, to indemnify, hold
harmless and defend LFB/GTC LLC, GTC, its Affiliates, and its and their
respective directors, officers, employees and agents (the “GTC Indemnitees”)
from any and all liabilities, costs, damages, fines, penalties, amounts paid in
settlement, fees and expenses (including reasonable fees and expenses of legal
counsel) (“Damages”) arising from an Action by a Third Party (collectively,
“Third Party Claims”) resulting or alleged to result from, directly or
indirectly, any of the following (each, an “LFB Biotech Assumed Liability”):

(a) a breach by LFB Biotech of a representation, warranty, or covenant made
under this Agreement;

(b) any negligence or willful misconduct of the LFB Biotech Indemnitees in
connection with their performance of LFB Biotech’s obligations under this
Agreement;

(c) the practice of the LFB Biotech Technology to manufacture, use, sale, offer
for sale, and/or import Products under this Agreement infringing the Patent
Rights of any Third Party;

(d ) the infringement of any Third Party Patent Rights by LFB Biotech or its
Affiliates or subcontractors in the manufacture, use, sale, offer for sale,
and/or importation of Products under this Agreement; or

(e) the manufacture, use, sale, offer for sale and/or importation of the
Products by LFB Biotech or its Affiliates or subcontractors causing, directly or
indirectly, any Third Party personal injury or death, possibility of injury or
death or economic loss.

Such indemnity shall not apply to the extent it is shown that such Third Party
Claim was the result of any GTC Assumed Liability (as defined below) or
constitutes a Shared Liability Claim.

 

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13.2 Indemnification by GTC. Unless otherwise provided herein, GTC shall
indemnify, hold harmless and defend LFB/GTC LLC, LFB-US, LFB Biotech, its
Affiliates, and its and their respective directors, officers, employees and
agents (the “LFB Biotech Indemnitees”) from any and all Damages arising from any
Third Party Claims resulting or alleged to result from, directly or indirectly,
any of the following (each, a “GTC Assumed Liability”):

(a) a breach by GTC of a representation, warranty, or covenant made under this
Agreement; or

(b) any negligence or willful misconduct of the GTC Indemnitees in connection
with their performance of GTC’s obligations under this Agreement;

(c) the practice of the GTC Technology to manufacture, use, sale, offer for
sale, and/or import Products under this Agreement infringing the Patent Rights
of any Third Party;

(d ) the infringement of any Third Party Patent Rights by GTC or its Affiliates
or subcontractors in the manufacture, use, sale, offer for sale, and/or
importation of Products under this Agreement; or

(e) the manufacture, use, sale, offer for sale and/or importation of the
Products by GTC or its Affiliates or subcontractors causing, directly or
indirectly, any Third Party personal injury or death, possibility of injury or
death or economic loss.

Such indemnity shall not apply to the extent it is shown that such Third Party
Claim was the result of any LFB Biotech Assumed Liability or constitutes a
Shared Liability Claim.

13.3 Procedure. In the event of a Third Party Claim against an Operating Party,
LFB-US or LFB/GTC LLC entitled to indemnification under Section 13.1 or 13.2
hereof (each an “Indemnified Party”), the Indemnified Party shall promptly
notify the other Operating Party (“Indemnifying Party”) in writing of the Third
Party Claim and the Indemnifying Party shall undertake and solely manage and
control, at its sole expense, the defense of the Third Party Claim and its
settlement; provided that the omission of such notice shall not relieve any
Operating Party from its obligations under this Section 13.3, except to the
extent the other Operating Party can establish actual prejudice and direct
damages as a result thereof. The Indemnified Party shall cooperate with the
Indemnifying Party, including, as requested by the Indemnifying Party and at the
Indemnifying Party’s cost, entering into a joint defense agreement. The
Indemnified Party may, at its option and expense, be represented in any such
action or proceeding by counsel of its choice. The Indemnifying Party shall not
be liable for any litigation costs or expenses incurred by the Indemnified Party
without the Indemnifying Party’s written consent. The Indemnifying Party shall
not settle any such Third Party Claim unless such settlement fully and
unconditionally releases the Indemnified Party from all liability relating
thereto, unless the Indemnified Party otherwise agrees in writing.

 

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13.4 Shared Liability Claims.

(a) Allocation. If any Third Party Claim is made that (A) the manufacture, use,
sale, offer for sale, and/or importation of Products under this Agreement
infringes the Patent Rights of any Third Party, or (B) the use of the Products
has caused, directly or indirectly, any Third Party personal injury or death,
possibility of injury or death or economic loss and such Third Party Claim does
not constitute an LFB Biotech Assumed Liability or a GTC Assumed Liability, then
such Third Party Claim shall be considered a “Shared Liability Claim”. GTC and
LFB Biotech shall each be liable for ************ of all Damages incurred by the
Operating Parties or their respective Affiliates or any of them arising from any
Shared Liability Claim. All such claims, actions, suits, proceedings, hearings,
investigations and demands shall be governed exclusively by this Section 13.4
and, except as expressly set forth in this Section 13.4, neither Operating Party
shall seek from the other Operating Party any indemnity or other recovery on
account of any such claims.

(b) Procedure. Each Operating Party shall give the other Operating Party prompt
written notice of any Shared Liability Claim, but the omission of such notice
shall not relieve either Operating Party from its obligations under this
Section 13.4, except to the extent the other Operating Party can establish
actual prejudice and direct damages as a result thereof. The Operating Parties
shall collaborate in good faith to defend any Shared Liability Claim in
accordance with this Section 13.4 and no settlement shall be entered into
without the approval of both Operating Parties, such approval not to be
unreasonably withheld or delayed. Any costs incurred by an Operating Party in
defense of a Shared Liability Claim shall be treated as the Development Costs of
such Operating Party.

(c) Reconciliation. Within ************ following the end of each calendar
quarter during which any Shared Liability Claim has been pending, each Operating
Party shall provide to the JSC a written statement of all Damages incurred by
such Operating Party or its Affiliates in connection with such claim (“Unsettled
Shared Damages”). ************ of any Unsettled Shared Damages shall be
allocated to each Operating Party as the Development Costs of such Party.

(d) Exception. For purposes of clarity, the obligations of each Operating Party
to indemnify the other Operating Party under a Commercial License executed in
accordance with Section 8.2(c)(ii) shall be governed by the terms of the
Commercial License and shall not be governed by this Article 13 unless otherwise
specifically agreed.

13.5 Effect of Disclosures. Notwithstanding any disclosure, whether in oral,
written, electronic or other form, made by either Operating Party or LFB-US
under the representation and warranty in Section 11.2(a)(iv) hereof, such
Operating Party’s and LFB-US’s indemnity obligations under this Agreement and
the other Operating Party’s and LFB/GTC LLC’s remedies shall remain in full
force and effect as if such representation and warranty were unqualified in any
way.

 

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13.6 Insurance. Each Operating Party shall procure and maintain insurance,
including product liability insurance, naming the other Operating Party and
LFB/GTC LLC as an additional insured, adequate to cover its obligations
hereunder and which is consistent with normal business practices of prudent
corporations similarly situated at all times during which the Product is being
clinically tested with human subjects or commercially distributed or sold. The
Operating Parties acknowledge and agree that such insurance shall not be
construed to create a limit of either Operating Party’s liability with respect
to its indemnification obligations under this Article 13. Each Operating Party
shall provide the other with written evidence of such insurance upon request.
Each Operating Party shall provide the other with written notice at least
************ prior to the cancellation, non-renewal or material change in such
insurance.

ARTICLE 14

TERM AND TERMINATION

14.1 Term.

(a) Collaboration Term. Unless earlier terminated in accordance with the terms
of this Article 14, the term of this Agreement shall commence on the Effective
Date and expire on the twenty-fifth (25th) anniversary thereof (the “Initial
Collaboration Term”). At least ************ prior to the expiration of the
Initial Collaboration Term, the Parties shall mutually determine whether to
(i) extend the collaboration to continue adding new Products in accordance with
Section 2.1, or (ii) if no Product Term is then in effect, allow the Agreement
to expire by its terms. In any event, the Collaboration under this Agreement
shall be continued with respect to those Products, if any, for which the Product
Term thereof is still in effect and shall continue for such purposes until the
last to expire of such Product Terms. The Initial Collaboration Term, together
with any extension or continuation thereof as provided in this Section 14.1, is
referred to herein as the “Collaboration Term”.

(b) Product Term.

(i) Unless earlier terminated in accordance with this Agreement, the initial
term of this Agreement with respect to each Product shall commence on the
applicable Product Start Date and end on the later of (a) the ************
anniversary of the Effective Date, and (b) the date that is ************ years
following the date of the last Regulatory Approval for such Product in any
country in the Territory. The initial Product term for any Product as set forth
in this Section 14.1(b) is referred to herein as the “Base Product Term”.

(ii) The Operating Parties and the JSC shall begin discussing in good faith an
extension of the Base Product Term for each Product on or about the date that is
************ prior to the end of such Base Product Term. Any extension of the
Base Product Term must be agreed upon by the date that is ************ prior to
the date upon which the Base Product Term of such Product shall expire, or this
Agreement shall terminate with respect to such Product on such date. The Base
Product Term with respect to any Product, together with any extension agreed by
the Operating Parties in accordance with this Section 14.1(b)(ii), is referred
to herein as the “Product Term”.

 

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(c) Upon expiration of the Product Term with respect to any Product, all rights
and licenses granted hereunder with respect to such Product shall terminate and
no Party shall have any obligations to the other Parties with respect to such
Product, except to the extent such obligations were incurred prior to such
expiration; provided, however, that in the case of a Product then in use for the
treatment of human patients, the Operating Parties shall, under the guidance of
the JSC, use Commercially Reasonable Efforts to continue to exercise such
responsibilities as shall ensure the continued availability of the Product to
patients, including continued licensing and supply arrangements, subject to
commercially reasonable compensation as the JSC shall determine.

14.2 Termination Rights.

(a) Termination of a Product Term Without Fault. The Product Term with respect
to a Product may be terminated without fault under the following circumstances:

(i) at any time by the mutual consent of the Operating Parties and LFB/GTC LLC;

(ii) with no further action required on the part of any Party if the JSC
determines that it is not commercially viable to proceed with Development or
Commercialization of such Product;

(iii) by either Operating Party upon ************ written notice to the other
Parties if, after commencing Development of a Product, the JSC fails to agree on
a subsequent Development Plan or Commercialization Plan for such Product in
accordance with Section 5.1 or 6.1 after such matter has been submitted to
Senior Management and to mediation for resolution in accordance with Section 4.6
(for the avoidance of doubt, such matters shall not be subject to arbitration
pursuant to Section 15.2); provided, that if any such failure to agree occurs
within a ************ period following a Change of Control of an Operating Party
and is not resolved through mediation in accordance with Section 4.6 such
failure to agree shall be deemed a material breach permitting the other
Operating Party to terminate the relevant Product Term immediately on written
notice to the Operating Party subject to the Change of Control unless the
Operating Party subject to the Change of Control can demonstrate that the
failure to agree was caused by the other Operating Party’s having negotiated in
bad faith (for the avoidance of doubt, the Operating Party subject to the Change
of Control may submit the question of whether the other Operating Party acted in
bad faith to arbitration in accordance with Section 15.2 and in such event such
termination shall not be effective unless and until a final decision is rendered
in the other Operating Party’s favor in such arbitration proceeding); and

(iv) In the event of a Force Majeure event as provided in Section 16.9.

(b) Termination of a Product Term for Material Breach. Either Operating Party
may terminate the Product Term with respect to a Product upon ************
written notice for (i) the other Operating Party’s material breach of any
material obligation under this Agreement with respect to such Product, including
without limitation, (A) any disclosure

 

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requirements with respect to Competing Products or with respect to an Alliance
Affecting Core Business, (B) the failure to achieve any express Development and
Commercialization milestone set forth in the applicable Development Plan and
Commercialization Plan, which failure ************, and (C) the obligation to
make any undisputed Profit Payment required under Section 8.3, or (ii) a deemed
material breach by the other Operating Party following a Change of Control of
such other Operating Party pursuant to Section 6.4(b)(ii), in each case (i) and
(ii) which breach is not cured during such ************.

(c) Termination of Agreement Without Fault. This Agreement may be terminated in
its entirety without the fault of either Operating Party under the following
circumstances:

(i) at any time by the mutual consent of the Operating Parties and LFB/GTC LLC;
or

(ii) by either Operating Party upon ************ written notice to the other
Operating Party at any time after the ************ of the Effective Date if at
the time of delivery of such notice no Products (including the Initial Product)
are then being Developed or Commercialized by the Operating Parties.

(d) Termination of Agreement for Insolvency Event. An Operating Party may
terminate this Agreement in its entirety on ************ notice to the other
Operating Party upon the occurrence of an Insolvency Event with respect to such
other Operating Party.

(e) Termination of Agreement in case of Alliance Affecting Core Business, Change
of Control or Core Business Competitor Equity Acquisition.

(i) If one Operating Party or its Affiliate proposes to enter into an Alliance
Affecting Core Business, it shall disclose such Alliance Affecting Core Business
to the other Parties and if the disclosing Operating Party or its Affiliate does
enter into such an Alliance Affecting Core Business the other Operating Party
shall have the right to (A) terminate this Agreement upon ************ prior
written notice to the Operating Party which itself or whose Affiliate is
entering into such Alliance Affecting Core Business, or (B) if the disclosing
Operating Party’s Affiliate enters into the Alliance Affecting Core Business, in
lieu of terminating this Agreement, to immediately terminate this subsection
14.2(e)(i) with respect to itself and its Affiliates upon written notice and in
the event of such termination shall no longer be subject to the restrictions set
forth in this Section 14.2(e)(i); provided that the foregoing termination rights
shall not apply if (A) ************. The Operating Party proposing to enter into
an Alliance Affecting Core Business shall not be required to disclose to the
other Operating Party (x) the identity of the Third Party with whom it or its
Affiliate proposes to enter into such Alliance Affecting Core Business or
(y) the product(s) proposed to be developed or commercialized in such Alliance
Affecting Core Business, other than in general terms sufficient to demonstrate
that such product(s) are within the description of the other Operating Party’s
Core Business and Compete with the other Operating Party’s Core Business
Product(s).

 

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(ii) If a Change of Control occurs with respect to an Operating Party or the
relevant Affiliate and the Third Party obtaining control of such Operating Party
or the relevant Affiliate is not a Core Business Competitor of the other
Operating Party, and if after the Change of Control such Operating Party does
not propose any products for Development or Commercialization under this
Agreement during the ************ period immediately following the effective
date of such Change of Control, then the other Operating Party shall have the
right to terminate this Agreement in its entirety upon ************ prior
written notice.

(iii) If a Change of Control occurs with respect to an Operating Party or the
relevant Affiliate and the Third Party obtaining control is a Core Business
Competitor of the other Operating Party or if a Core Business Competitor Equity
Acquisition occurs with respect to an Operating Party or the relevant Affiliate,
then the other Operating Party shall have the right to terminate this Agreement
in its entirety upon ************ prior written notice.

(f) Termination of Agreement if Two Products Subject to Termination for Material
Breach. If an Operating Party has the right to terminate two or more Products
for the other Operating Party’s material breach pursuant to Section 14.2(b),
then whether or not such Operating Party has exercised such right (unless such
Operating Party has expressly waived in writing such right with respect to one
or more Products), such Operating Party shall have the right to terminate this
Agreement in its entirety upon ************ prior written notice to the other
Operating Party, unless within such ************ period all material breaches
which gave rise to the right of termination of such Products are cured.

(g) Termination for Default of Covenant Under Section 11.1(e). If an Operating
Party fails to perform its undertaking set forth in Section 11.1(e) (as reported
pursuant to Section 8.3(a)) for ************, then the other Operating Party
shall have the right to terminate this Agreement in its entirety upon
************ prior written notice to the Operating Party in default, unless
within such ************ period such Operating Party has reduced the amounts
past due and unpaid referred to in Section 11.1(e) to no more than ************;
provided, that, if the other Operating Party does not provide written notice of
such termination within ************ after receipt of the applicable report
under Section 8.3(a), it shall be deemed to have irrevocably waived its
termination right with respect to that particular failure but not with respect
to any subsequent failure to perform under Section 11.1(e).

14.3 Effects of Termination.

(a) Termination of Product Term without Fault. If a Product Term is terminated
pursuant to Section 14.2(a)(i) (mutual agreement), Section 14.2(a)(ii) (JSC
decision), Section 14.2(a)(iii) (JSC unable to agree on Development Plan or
Commercialization Plan) (but excluding a termination for any deemed material
breach under the proviso thereof, the effect of which shall be determined in
accordance with Section 14.3(c)) or Section 14.2(a)(iv) (Force Majeure), such
termination shall have the following effects with respect to such Product:

(i) Such Product shall be removed from the Product List attached as Exhibit A
and shall no longer be subject to this Agreement.

 

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(ii) If the Product is in the Commercialization Phase:

(A)

(1) The sublicense granted to LFB/GTC LLC by LFB-US in Section 3.2(a) shall be
assigned by LFB/GTC LLC (as sublicensee) to GTC and will become an exclusive,
irrevocable, perpetual sublicense with respect to such Product.

(2) The sublicense granted to LFB/GTC LLC by LFB-US in Section 3.2(b) shall be
assigned by LFB/GTC LLC (as sublicensee) to GTC and will become an exclusive,
irrevocable, perpetual sublicense with respect to such Product in the North
American Territory and such part of the Co-Exclusive Territory as to which GTC
or any Affiliate of GTC had previously been granted an exclusive license in
respect of such Product, bearing an aggregate royalty as set forth in 14.3(a)(v)
below.

(3) The sublicenses granted to GTC by LFB/GTC LLC in Section 3.4 shall be
assigned by LFB/GTC LLC (as sublicensor) to LFB-US and become an exclusive,
irrevocable, perpetual sublicense with respect to such Product.

(B)

(1) The license granted to LFB/GTC LLC by GTC in Section 3.3(a) shall be
assigned by LFB/GTC LLC (as licensee) to LFB-US and become an exclusive,
irrevocable, perpetual license with respect to such Product.

(2) The license granted to LFB/GTC LLC by GTC in Section 3.3(b) shall be
assigned by LFB/GTC LLC (as licensee) to LFB-US and become an exclusive,
irrevocable, perpetual license with respect to such Product in the European
Territory and such part of the Co-Exclusive Territory as to which LFB Biotech or
any Affiliate of LFB Biotech had previously been granted an exclusive license in
respect of such Product, bearing an aggregate royalty as set forth in 14.3(a)(v)
below.

(3) The sublicenses granted to LFB-US by LFB/GTC LLC in Section 3.5 shall be
assigned by LFB/GTC LLC (as sublicensor) to GTC and will become will become an
exclusive, irrevocable, perpetual sublicense with respect to such Product.

(C) with respect to such remaining part of the Co-Exclusive Territory as shall
not be subject to an exclusive license in favor of GTC or LFB Biotech, the
Originating Party of such Product shall be assigned the exclusive license of
LFB/GTC LLC in respect of such remaining part of the Co-Exclusive Territory,
bearing an aggregate royalty as set forth in 14.3(a)(v) below, such license to
be of the same scope as the exclusive licenses described in subsections (A) or
(B) above, as applicable and

(D) if an Operating Party was manufacturing and supplying or was required to
manufacture and supply such Product to the other Operating Party as of the date
of termination, it shall continue to do so at ************ until the earlier of
(x) ************ following termination and (y) such time as the Continuing Party
has established a satisfactory alternative supply of such Product.

 

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(iii) If the Product is in the Development Phase and Phase II Trials have
commenced with respect to such Product, then:

(A) the Originating Party shall be deemed the “Continuing Party” with respect to
such Product, provided that the Originating Party shall promptly notify the
non-Originating Party in writing in the event that the Originating Party decides
not to continue to pursue the development or commercialization of such Product.
The non-Originating Party shall have the right, to be exercised within
************ after receiving such notice, to notify the Originating Party in
writing whether the non-Originating Party wishes to pursue the development and
commercialization of such Product. If the non-Originating Party timely notifies
the Originating Party that the non-Originating Party desires to develop and
commercialize the Product, the non-Originating Party shall become the Continuing
Party with respect to such Product. If the non-Originating Party notifies the
Originating Party that the non-Originating Party does not wish to develop and
commercialize the Product, or does not timely provide notice, the Originating
Party shall remain the Continuing Party with respect to such Product;

(B) all licenses from the Continuing Party to LFB/GTC LLC and the corresponding
sublicenses to the non-Continuing Party with respect to such Product shall
terminate;

(C) the non-Continuing Party shall grant to the Continuing Party with respect to
such Product, a perpetual exclusive licenses (subject to subsection (A) above)
with respect to the entire Territory, bearing an aggregate royalty as set forth
in Section 14.3(a)(v) below;

(D) until the earlier of (x) ************ following termination and (y) such
time as the Continuing Party has established an alternative supply of such
Product, if the non-Continuing Party was manufacturing and supplying or was
contemplated to manufacture and supply such Product, it shall continue to
manufacture and supply such Product to the Continuing Party at ************;

(E) the non-Continuing Party shall grant the Continuing Party a perpetual
(subject to subsection (A) above), non-exclusive, royalty-bearing license (such
royalty to be included in the royalty set forth in Section 14.3(a)(v) below)
under the non-Continuing Party’s technology and Know-How to the extent
reasonably necessary to manufacture such Product, with the right to sublicense
to Third Parties engaged by the Continuing Party to manufacture such Product for
the Continuing Party; and

(F) the non-Continuing Party shall return to the Continuing Party all Know-How
and Confidential Information of the Continuing Party then in the non-Continuing
Party’s possession that is solely related to the terminated Product.

 

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(iv) If the Product is in the Development Phase but Phase II Trials have not
commenced with respect to such Product, then the non-Originating Party in
respect of such Product shall have the right to elect in writing within either
to (x) be treated in accordance with Section 14.3(a)(iii) above or (y) receive
from the Originating Party a payment in cash (the “IPV Payment”) equal to
************ of such non-Originating Party’s IPV with respect to such Product as
of the date of termination as calculated in accordance with the Product
Participation Model. If the non-Originating Party elects to receive the IPV
Payment:

(A) the Originating Party shall pay the non-Originating Party the IPV Payment
within ************ of receipt of the non-Originating Party’s written notice of
such election;

(B) all licenses from the non-Continuing Party to LFB/GTC LLC with respect to
such Product shall be assigned to the Continuing Party and shall become
perpetual exclusive licenses with respect to the entire Territory, bearing a
commercially reasonable royalty to be determined by the non-Continuing Party and
Continuing Party through good faith negotiations within ************ after such
termination; provided, that if the non-Continuing Party and Continuing Party are
unable to agree upon such royalties within such ************ period, then the
matter shall be resolved through dispute resolution in accordance with
Section 14.3(d);

(C) the non-Continuing Party shall grant the Continuing Party a perpetual,
non-exclusive, royalty-bearing license (such royalty to be included in the
royalty calculation under subsection (iv)(B) above) under the non-Continuing
Party’s technology and Know-How to the extent reasonably necessary to
manufacture such Product, with the right to sublicense to Third Parties engaged
by the Continuing Party to manufacture such Product for the Continuing Party;
and

(D) the provisions of Sections 14.3(a)(iii)(B), (D), and (F) shall apply with
respect to such terminated Product.

(v) The royalty to be paid to an Operating Party in respect of the licenses
granted to such Operating Party under Sections 14.3(a)(ii)(A),(B) and (C) or
14.3(a)(iii)(C) above shall be an ************ for all such licenses in respect
of the relevant Product and shall be determined by the Operating Parties through
good faith negotiations within ************ after such termination in such
manner as the amount received by each Operating Party through the payment of
such royalties will be ************, it being agreed by the Operating Parties
that the then most recent Development and/or Commercialization Plans with
respect to such Product shall be accepted as a reference in determining such
royalty. If GTC and LFB Biotech are unable to agree on such royalties within
such ************ period, then the matter shall be resolved through dispute
resolution in accordance with Section 14.3(d).

 

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(b) Termination of Agreement Without Fault or Insolvency Event.

(i) If this Agreement is terminated in its entirety pursuant to
Section 14.2(c)(i) (mutual agreement), Section 14.2(d) (Termination of Agreement
for Insolvency Event) or Section 14.2(e) (Termination of Agreement in case of
Change of Control, Alliance Affecting Core Business or Core Business Competitor
Equity Acquisition), then the provisions of Section 14.3(a) shall be applicable
with respect to each of the Products then under Development or
Commercialization.

(ii) If this Agreement is terminated in its entirety pursuant to
Section 14.2(c)(ii) (no Products in Development or Commercialization after three
years) then all licenses granted hereunder by either Party shall immediately
terminate and each Party shall promptly return to the other Party all Know-How
and Confidential Information of the other Party then in such Party’s possession.

(c) Termination for Fault. If the Product Term with respect to a Product is
terminated under Section 14.2(b) (material breach) (including, for the avoidance
of doubt, a deemed material breach in accordance with subsection (ii) thereof or
in accordance with Section 14.2(a)(iii)), or this Agreement is terminated in its
entirety under Section 14.2(f) (Termination of the Agreement if two Products
subject to Termination for Breach), or 14.2(g) (Default of Covenant under
Section 11.1(e)) then:

(i) all rights and licenses granted by LFB/GTC LLC to the terminated Operating
Party, or with respect to the terminated Product, as the case may be, shall
terminate (provided that, subject to the terms and conditions of this Agreement,
the terminated Operating Party may continue to sell off its existing inventory
of Products on hand as of the effective date of termination, and may fill any
orders for Products accepted prior to the effective date of termination,
provided that such orders are filled within ************ after the effective
date of termination);

(ii) all rights and licenses granted by the terminated Operating Party to
LFB/GTC LLC and the corresponding sublicense from LFB/GTC LLC to the terminating
Operating Party hereunder with respect to any Products then being Developed or
Commercialized, or with respect to the terminated Product, as the case may be,
shall remain in effect, but shall convert to exclusive (in the terminating
Operating Party’s exclusive Territory hereunder, including those countries or
regions of the Co-Exclusive Territory that are exclusively designated to such
Operating Party or its Affiliates by the JSC) and non-exclusive (in the rest of
the Territory), worldwide, irrevocable, perpetual and royalty-free licenses;

(iii) the terminated Operating Party shall return to the terminating Operating
Party all Know-How and Confidential Information of the terminating Operating
Party then in the terminated Operating Party’s possession that is solely related
to the terminated Product(s);

(iv) to the extent legally permissible, the terminated Operating Party shall
transfer to the terminating Operating Party ownership, possession and control of
all Regulatory Filings prepared by and Regulatory Approvals held by the
terminated Operating Party or its Affiliates that solely relate to the
terminated Product(s), together with copies of all correspondence and
conversation logs with Regulatory Authorities relating thereto, and copies of
all data, reports, records and materials in the terminated Operating Party’s or
its Affiliates’ possession that solely relate to the use, sale, offer for sale
or importation of the terminated Product(s), including all non-clinical,
pre-clinical and clinical data relating thereto;

 

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(v) the terminated Operating Party shall grant the terminating Operating Party a
fully paid, non-exclusive, royalty-free, worldwide, irrevocable, perpetual
license to use in the manufacture of the terminated Product(s) any technology or
Know-How Controlled by the terminated Operating Party or its Affiliates that is
reasonably necessary for the manufacture of such Product(s);

(vi) if the terminated Operating Party is a Trademark Owner then the terminated
Operating Party shall assign the relevant Product Trademark(s) of which it is
the Trademark Owner, together with all goodwill associated therewith, to the
terminating Operating Party;

(vii) to the extent the terminated Operating Party was manufacturing and
supplying the terminated Product(s) to the terminating Operating Party, the
terminated Operating Party shall continue to manufacture and supply such
Product(s) to the terminating Operating Party ************ until the earlier of
(x) ************ following termination and (y) such time as the Continuing Party
has established a satisfactory alternative supply of such Product.; provided,
that the terminating Operating Party shall use good faith reasonable efforts to
establish a manufacturing site for such Product as soon as reasonably
practicable following the date of termination;

(viii) the terminated Operating Party agrees to use best efforts (subject to any
legal and regulatory constraints) to transfer the manufacture of the terminated
Product(s) (including any transgenic mammals it owns or controls and that are
used in the production of the terminated Product(s)) to the terminating
Operating Party or a Third Party designated by the terminating Operating Party
as soon as possible following such termination; and

(ix) the terminated Operating Party shall provide at cost to the terminating
Operating Party reasonable technical support with respect to the manufacture of
the terminated Product(s) as reasonably requested by the terminating Operating
Party for a period not to exceed ************ from the effective date of
termination.

(d) Disputes Regarding the Calculation of Royalties. If GTC and LFB Biotech are
unable to agree on the royalties to be paid under subsections (a)(iv)(B), (a)(v)
or (c)(ii) of this Section 14.3 within the negotiation period provided therein,
then, at the request of either of the Operating Parties, the matter shall be
submitted to non-binding mediation by a mutually agreed independent Third Party
knowledgeable as to the matter(s) in dispute who shall render his/her decision
within ************. If both Operating Parties do not accept the decision of
such mediator within ************ after such decision having been rendered, or
if the Operating Parties have not agreed on a mediator within ************ after
a request for mediation, then, subject to the rights and obligations of the
Operating Parties under this Agreement, the matter shall be referred to
arbitration as described in Section 15.2.

 

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14.4 Survival; Accrued Rights. The rights and obligations of the Parties under
the following provisions of this Agreement, as applicable to such Parties, shall
survive any expiration or any termination of this Agreement in its entirety or
with respect to any Product: Sections 1, 7.3, 7.4(e), 8.3(c) (with respect to
final reports and Profit Payments), 8.4, 8.5, 8.6 and 8.7 (in each case 8.5, 8.6
and 8.7, with respect to post-expiration or post-termination payment and
accounting obligations), 12.1, 12.2, 12.3, 12.5, 13.1, 13.2, 13.3, 13.4, 13.5,
14.3, 14.4, 14.5, 15.2, 16.3, 16.4, 16.5, 16.6, 16.7, 16.8, 16.10, 16.11, 16.12,
16.13 and 16.14. In any event, expiration or termination of this Agreement shall
not relieve the Parties of any liability which accrued hereunder prior to the
effective date of such expiration or termination nor preclude any Party from
pursuing all rights and remedies it may have hereunder or at law or in equity
with respect to any breach of this Agreement.

14.5 Effect of Termination on Sublicenses. If this Agreement is terminated in
the entirety or with respect to a particular Product, as the case may be, and a
given sublicense granted by the terminated Operating Party is in force and
effect on the date of such termination, then any Patent Rights and/or Know-How
of the terminating Operating Party sublicensed by the terminated Party to the
sublicensee shall automatically become directly licensed from the terminating
Operating Party to such sublicensee under the terms and conditions of this
Agreement with respect to the applicable Product(s), which license shall be of
the same scope licensed to the sublicensee, provided that the sublicensee
(a) agrees in writing to be bound to the terminating Operating Party under the
terms and conditions of this Agreement, (b) is not in breach of the relevant
sublicense and (c) agrees to thereafter make all reports and payments due under
this Agreement with respect to the applicable Product(s) directly to the
terminating Operating Party or its designee; provided, that the terminating
Operating Party will not be required to assume any obligations broader in scope
than it has under this Agreement.

ARTICLE 15

DISPUTE RESOLUTION

15.1 Disputes. Except as otherwise set forth in this Agreement, in the event of
any dispute, controversy or claim arising out of or relating to this Agreement,
or the breach, termination or invalidity thereof (a “Dispute”), either Operating
Party may promptly, upon written notice to the other Operating Party, refer such
Dispute to the respective Senior Management, and such Senior Management shall
attempt in good faith to resolve such Dispute. If the Operating Parties are
unable to resolve a given Dispute pursuant to this Section 15.1 within
************ after referring such Dispute to the Senior Management, either
Operating Party may elect to resolve such Dispute in accordance with
Section 15.2, to the exclusion of other remedies.

15.2 Arbitration.

(a) Subject to Section 15.1 and except as otherwise expressly provided in this
Agreement, any dispute, claim or controversy relating to, arising out of, or in
connection with this Agreement, including any question regarding its formation,
existence, validity, enforceability, performance, interpretation, breach, or
termination, shall be finally resolved under

 

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the rules of the London Court of International Arbitration by a panel of three
arbitrators appointed in accordance with such rules and having relevant legal or
business experience. Each Operating Party shall nominate one such arbitrator,
and the two arbitrators so nominated shall nominate the third. The place of
arbitration shall be London, England. The language of the arbitration shall be
English. The arbitrators shall be empowered to order production of all documents
reasonably calculated to lead to information or other documents relevant to such
proceeding. Notwithstanding the fact that LFB/GTC LLC will not be a participant
in the arbitration, LFB/GTC LLC shall be bound by any decision of the
arbitrators. Each Operating Party shall bear the fees and expenses of its legal
representation in the arbitration. Judgment upon the arbitrators’ award may be
entered in any court of competent jurisdiction. The award of the arbitrators may
include compensatory damages but under no circumstances will the arbitrators be
authorized to, nor shall they, award punitive damages or multiple damages
against any Operating Party, except to the extent consistent with Section 16.5,
and the Operating Parties expressly waive the right to assert claims for
punitive damages or multiple damages.

(b) Nothing in this Article shall prevent any Operating Party, whether before or
during the pendancy of an arbitration under this Article, from seeking
conservatory and interim measures, including, but not limited to temporary
restraining orders or preliminary injunctions, or their equivalent, from any
court of competent jurisdiction. Further, notwithstanding anything to the
contrary in this Article 15, without resort to arbitration in the first
instance, any Operating Party shall have the right to bring suit in a court of
competent jurisdiction against another Operating Party for (i) any breach of
such other Operating Party’s duties of confidentiality pursuant to Article 12 of
this Agreement, or (ii) any infringement of its own Patent Rights or other
proprietary rights by such other Operating Party.

ARTICLE 16

MISCELLANEOUS

16.1 Actions by Affiliates. In the event an Affiliate of a Party fails to
perform any obligation or comply with any provision hereunder that requires
performance or compliance by such Affiliate and such failure to perform or
comply would constitute or be deemed a breach of the relevant obligation or
provision of this Agreement if such Affiliate were the relevant Party, such
failure to perform or comply shall be deemed a breach of such obligation or
provision by the relevant Party. In the event of any failure of an Affiliate of
a Party to perform or comply with an applicable obligation hereunder, the other
Party shall provide notice of such failure to the Party whose Affiliate failed
to perform, in accordance with Section 16.7.

16.2 Assignment. No Party may assign this Agreement or any rights or obligations
hereunder without the prior written consent of the other Parties, such consent
not to be unreasonably withheld, and any attempted assignment without such
consent shall be null and void. Notwithstanding the foregoing, any Party may
assign this Agreement or all of its rights and obligations hereunder in
connection with (a) a merger or acquisition or a sale of all or substantially
all of such Party’s assets to which this Agreement relates, or (b) to an
Affiliate that Controls such Party in connection with a transfer to such
Controlling Affiliate of all or substantially all of such Party’s assets to
which this Agreement relates. This Agreement shall

 

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be binding upon and, subject to the other terms of this Section 16.2, inure to
the benefit of the Parties’ successors and permitted assigns and each Party
shall cause any successor or permitted assign to agree in writing to be bound by
the terms and conditions hereof.

16.3 Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of New York, USA, without regard to any
conflicts of law principles that would provide for the application of the laws
of another jurisdiction and excluding (a) the United Nations Convention on
Contracts for the International Sale of Goods, (b) the 1974 Convention on the
Limitation Period in the International Sale of Goods; and (c) the Protocol
amending the 1974 Convention, done at Vienna April 11, 1980. The foregoing
notwithstanding, the Parties acknowledge and agree that any arbitration
proceeding pursuant to Article 15 shall be subject to the procedural laws of
England and Wales.

16.4 Non-Waiver. The waiver by any of the Parties of any breach of any provision
hereof by another Party shall not be construed to be a waiver of any succeeding
breach of such provision or a waiver of the provision itself.

16.5 Disclaimer of Indirect Damages. NO PARTY WILL BE LIABLE FOR INCIDENTAL,
CONSEQUENTIAL, SPECIAL, EXEMPLARY (PUNITIVE), MULTIPLE DAMAGES OR OTHER INDIRECT
DAMAGES (INCLUDING, WITHOUT LIMITATION, LOST PROFITS) ARISING FROM OR RELATING
TO THIS AGREEMENT OR ANY BREACH HEREOF, REGARDLESS OF ANY NOTICE OF SUCH
DAMAGES. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 16.5 IS INTENDED
TO LIMIT OR RESTRICT (a) ANY RIGHTS OR REMEDIES OF ANY PARTY WITH RESPECT TO A
BREACH OF ARTICLE 12 BY ANOTHER PARTY, OR (b) THE INDEMNIFICATION RIGHTS OR
OBLIGATIONS OF EITHER OPERATING PARTY WITH RESPECT TO THIRD PARTY CLAIMS UNDER
SECTIONS 14.1, 14.2 AND 14.3.

16.6 Severability. If and to the extent that any court or tribunal of competent
jurisdiction holds any of the terms or provisions of this Agreement, or the
application thereof to any circumstances, to be invalid or unenforceable in a
final nonappealable order, the Parties shall use their best efforts to reform
the portions of this Agreement declared invalid to realize the intent of the
Parties as fully as practical, and the remainder of this Agreement and the
application of such invalid term or provision to circumstances other than those
as to which it is held invalid or unenforceable shall not be affected thereby,
and each of the remaining terms and provisions of this Agreement shall remain
valid and enforceable to the fullest extent of the law.

 

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16.7 Notice. Any notice or other communication required or permitted hereunder
shall be in writing and shall be deemed given (a) when delivered personally,
(b) on the next business day after timely delivery to an overnight courier
(postage prepaid), or (c) on the date delivered by email or facsimile
transmission (with receipt confirmed by automatic transmission report), as
follows:

 

To LFB Biotech:    To GTC: LFB-Biotechnologies    GTC Biotherapeutics, Inc. 3,
avenue des Tropiques    175 Crossing Boulevard 91958 Courtaboeuf Cedex – France
   Framingham, MA 01702 Attention: Président    Attention: CEO and General
Counsel Facsimile: +33 (0) 1 69 82 72 67    Facsimile: 1 (508) 370-3797 with a
copy to:    To LFB/GTC LLC Laboratoire Francais du Fractionnement    LFB/GTC LLC
et des Biotechnologies    c/o GTC Biotherapeutics, Inc. 3, avenue des Tropiques
   175 Crossing Boulevard; Suite 410 91958 Courtaboeuf Cedex – France   
Framingham, MA 01702 Attention: Président Directeur Général    Attention:
General Manager Facsimile: +33 (0) 1 69 82 72 67    Facsimile: (508) 271-3504

or to such other address as to which the Party has given written notice thereof.
For the avoidance of doubt, GTC shall send a copy of any notice with respect to
a default by LFB Biotech of its obligations hereunder (including without
limitation any failure of an Affiliate of LFB to perform or comply with an
applicable obligation hereunder) to LFB SA at the time such notice is sent to
LFB Biotech; provided, that the failure of GTC to send such copy to LFB SA shall
not relieve LFB Biotech from its obligations and liabilities hereunder or LFB SA
from its obligations and liabilities under the Keepwell Agreement or diminish in
any way the remedies available to GTC under this Agreement, the Keepwell
Agreement or otherwise, with respect to the applicable default.

16.8 Headings. The headings appearing herein have been inserted solely for the
convenience of the Parties and shall not affect the construction, meaning or
interpretation of this Agreement or any of its terms and conditions.

16.9 Force Majeure. No failure or omission by the Parties in the performance of
any obligation of this Agreement shall be deemed a breach of this Agreement nor
shall it create any liability if the same shall arise from any cause or causes
beyond the reasonable control of the affected Party, including, but not limited
to, the following, which for purposes of this Agreement shall be regarded as
beyond the control of the Party in question: acts of nature; acts or omissions
of any government; any rules, regulations, or orders issued by any governmental
authority or by any officer, department, agency or instrumentality thereof;
fire; storm; flood; earthquake; accident; war; rebellion; insurrection; riot;
invasion; terrorism; strikes; and lockouts or the like; provided that the Party
so affected shall use its best efforts to avoid or remove such causes of
nonperformance and shall continue performance hereunder with the utmost dispatch
whenever such causes are removed. The obligations of each Party hereunder shall
be deemed to be suspended until the effects of the Force Majeure are relieved.
If however, such cause or causes are not removed or discontinued within
************ of the

 

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commencement thereof, and the failure to remove them affects the performance of
a material obligation of a Party hereunder with respect to a Product, the other
Party may terminate the Product Term with respect to the applicable Product upon
written notice to the affected Party.

16.10 Entire Agreement. This Agreement and the LLC Agreement, including the
Exhibits hereto and thereto, constitute the entire understanding between the
Parties with respect to the subject matter contained herein and supersedes any
and all prior agreements, understandings and arrangements whether oral or
written between the Parties relating to the subject matter hereof. This
Agreement will control in the event of any conflict between this Agreement and
any Development Plan, between this Agreement and any Commercialization Plan
and/or between the LLC Agreement and this Agreement.

16.11 Amendments. No amendment, change, modification or alteration of the terms
and conditions of this Agreement shall be binding upon any Party unless in
writing and signed by the Party to be charged.

16.12 Independent Contractors and Relationship of the Parties. It is understood
that all Parties are independent contractors and engage in the operation of
their own respective businesses, and no Party is to be considered the agent or
partner of the other Parties for any purpose whatsoever, except as otherwise
expressly provided in this Agreement. No Party has any authority to enter into
any contracts or assume any obligations for the other Parties or make any
warranties or representations on behalf of the other Parties. Without limiting
the generality of the foregoing, no Party shall be liable for any obligations of
the other Parties to such other Parties’ subcontractors, sublicensees or other
Third Parties with whom such other Parties have contracted in connection with
the performance of their obligations hereunder. Furthermore, nothing in this
Agreement or the transactions contemplated hereby shall be construed as creating
a partnership among the Parties, including without limitation for tax purposes.

16.13 Exhibits. All Exhibits to this Agreement are part of this Agreement.

16.14 No Strict Construction. This Agreement has been prepared jointly and shall
not be strictly construed against any Party.

16.15 Recording. Each Party shall have the right, at any time, to record,
register or otherwise notify this Agreement in appropriate governmental or
regulatory offices anywhere in the Territory, and GTC or LFB Biotech, as the
case may be, shall provide reasonable assistance to the other in effecting such
record, registration or notification.

16.16 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original and both of which together shall constitute
one and the same instrument.

[Signature page follows.]

 

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IN WITNESS WHEREOF, the Parties hereto have caused this Amended and Restated
Joint Development and Commercialization Agreement to be executed by their duly
authorized officers as of the date first above written.

 

GTC BIOTHERAPEUTICS, INC.

By:    /s/ Geoffrey F. Cox  

Geoffrey F. Cox

Chairman, Chief Executive Officer and President

LFB-BIOTECHNOLOGIES S.A.S.U.

By:    /s/ Christian Béchon  

Christian Béchon

President

LFB/GTC LLC

By:    /s/ Sami Chtourou   Sami Chtourou

LFB BIOTECHNOLOGIES, INC.

By:    /s/ Evelyne Nguyen   Evelyne Nguyen

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ARTICLE 17

LIST OF EXHIBITS AND ANNEXES

 

EXHIBIT A:    PRODUCT LIST EXHIBIT B:    PRODUCT PARTICIPATION MODEL
             B-1    Appendix I to Exhibit B: Development Costs              B-2
   Appendix II to Exhibit B: Commercialization Costs EXHIBIT C:    TERMS OF
COMMERCIAL LICENSE EXHIBIT D:    CORE BUSINESS PRODUCTS EXHIBIT E:   
[Intentionally Left Blank] EXHIBIT F:    [Intentionally Left Blank} EXHIBIT G:
   HEADS OF AGREEMENT: COMMERCIAL PRODUCT LICENSE EXHIBIT H:    [Intentionally
Left Blank] ANNEX 1:    LIST OF CURRENT PRODUCTS EXCLUDED FROM “COMPETING
PRODUCTS” DEFINITION

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EXHIBIT A

Product List

 

  •  

Transgenic version of rFVIIa (Initial Product)

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EXHIBIT B

Product Participation Model

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

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Appendix I to Exhibit B

Development Costs

Development Costs of an Operating Party with respect to a Product may include
the following costs to the extent they are paid or incurred during the
Development Phase for such Product, as approved in advance by the JSC or, to the
extent expressly provided in the Agreement, thereafter, and are ordinary and
necessary for the Development of such Product:

 

  •  

Direct salary and wages.

 

  •  

Payroll taxes and fringe benefits related to direct salary and wages.

 

  •  

Travel, training, staff licenses and certifications.

 

  •  

Direct materials and direct supplies, including specialized software.

 

  •  

Direct costs for production of such Product including, but not limited to,
construct discovery and development, animal development, animal maintenance,
process development, validation, pre-clinical, clinical work and regulatory
filings.

 

  •  

Direct external costs for consultants, temporary help and special studies.

 

  •  

Direct costs for research and development and pre-commercialization sales and
marketing efforts, including without limitation the development and
documentation of process methods and procedures for the manufacture and the
Fully Absorbed Cost of Goods for batches manufactured and supplied for use in
preclinical and clinical trial and pre-Commercialization activities.

 

  •  

Direct costs for outside services contracted with Third Parties related to
performance of clinical trials, process development, pre-clinical studies, or
other activities, including without limitation:

 

  •  

direct, out-of-pocket external costs, including clinical grants, clinical
laboratory fees, positive controls and the cost of studies conducted and
services provided by contract research organizations and individuals,
consultants, toxicology contractors, and manufacturers necessary or useful for
the purpose of obtaining Regulatory Approvals;

 

  •  

costs related to data management, statistical designs and studies, document
preparation and other expenses associated with the clinical testing program; and

 

  •  

costs for preparing, submitting, reviewing or developing data or information for
the purpose of submission of applications to obtain Regulatory Approvals
(including user fees).

 

  •  

Direct costs for license fees and other amounts paid to a Third Party in
connection with the Development of such Product.

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  •  

Direct costs relating to the investigation, filing, prosecution and maintenance
of Patent Rights that cover the development, manufacture, use or sale of such
Product. that is incurred during the Development Phase.

 

  •  

Direct costs of filing and maintaining Product Trademark registrations that are
incurred during the Development Phase.

 

  •  

Other direct Development Costs to the extent mutually agreed by the Operating
Parties through the JSC.

 

  •  

Costs of building inventory necessary for Product launch to the extent incurred
during the Development Phase. – The JSC shall agree on an inventory plan for
build-up of commercial supplies of Product in advance of launch on a country by
country basis. The cash impact of this build up will be included in the Product
Participation calculation to the extent incurred during the Development Phase.

 

  •  

Indirect Costs should be allocated considering a reasonable and appropriate
share of

 

  •  

Indirect materials and supplies for the Development Activities of the relevant
Operating Party, properly allocated.

 

  •  

Indirect equipment rental, maintenance, and calibration, properly allocated.

 

  •  

administration, facilities costs, information resources, cost accounting and
forecasting, human resources, insurance, and incentive compensation performance
bonus (whether paid in cash or stock), but excluding non-cash expense resulting
from Accounting Standard SFAS123R or any equivalent accounting standard,
share-based compensation accounting for stock options, stock appreciation rights
and the like.

 

  •  

Cash costs for direct capital expenditures, or other significant investments,
licenses, or assets used for the Development of such Product, in each case to be
reviewed and approved by the JSC. If the asset is used for more than one
program, its costs will be attributed to each program based on the program’s use
of the asset’s available capacity.

 

  •  

Prior investments used in a program will be included based on their depreciation
in accordance with the relevant Accounting Standard.

Depreciation or amortization resulting from investments that have been allowed
on a cash basis will be excluded.

 

  •  

For clarity, the costs of issuing or repaying debt or equity financing,
including interest or dividends shall not be included as Development Costs of an
Operating Party.

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Development Costs will include only overhead costs that are ordinary and
necessary for the Development of the Products. Overhead costs will be allocated
by each Operating Party to Development Costs based on allowable cost items and
an allocation method to be approved by the JSC.

The Operating Parties will use their respective best efforts to specify within
************ of the Effective Date the project accounting allocation methods of
each Operating Party which will be used to attribute Development Costs to the
Development program for each Product.

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Appendix II to Exhibit B

Commercialization Costs

Commercialization Costs of an Operating Party with respect to a Product may
include the following costs to the extent they are paid or incurred during the
Commercialization Phase for such Product, except to the extent such costs are
properly allocated as Development Costs under the Agreement, and are ordinary
and necessary for the Development of such Product:

 

  •  

Direct salary and wages.

 

  •  

Payroll taxes and fringe benefits related to direct salary and wages

 

  •  

Travel, training, staff licenses and certifications.

 

  •  

Direct materials and direct supplies, including specialized software.

 

  •  

Direct costs for production of such Product, including Fully Absorbed Cost of
Goods for the manufacture and supply of Product.

 

  •  

Direct external costs for consultants, temporary help and special studies.

 

  •  

Costs of sales and marketing efforts, including without limitation:

 

  •  

Finished Product distribution expense, including all distribution expenses such
as transportation, customs duties, insurance, fees paid to warehouses, packaging
and labeling expenses;

 

  •  

Field selling expenses, meaning the actual costs of staff, expenses, and
external costs, incurred in the active detail or selling of a Product. In the
event that more than one Product is being actively detailed or marketed, these
costs will be allocated to each Product based on a reasonable method considering
time incurred, details performed, etc. The method will be approved by the JSC
during the annual budget process;

 

  •  

Direct promotion expense, including all Product-specific promotion expenses
incurred in the promotion of the Product including, but not limited to, journal
or direct to consumer advertising, agency fees, samples, speaker programs and
other costs incurred in the promoting and marketing of Products.

 

  •  

Marketing overhead, will include only overhead costs that are ordinary and
necessary for the marketing of the Products. Overhead costs will be allocated by
each Operating Party to marketing costs based on allowable cost items and an
allocation method to be approved by the JSC.

 

  •  

Direct costs for outside services contracted with Third Parties related to
performance of post-registration studies, including payments for contract
research, clinical grant costs, bulk drug, contract manufacturing costs, user
fees, etc.

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  •  

Direct costs for license fees and other amounts paid to a Third Party in
connection with the making, use or selling of such Product.

 

  •  

Direct costs relating to the investigation, filing, prosecution and maintenance
of Patent Rights that cover the Development, manufacture, use or sale of such
Product that are incurred during the Commercialization Phase.

 

  •  

Costs of filing and maintaining Product Trademark registration that are incurred
during the Commercialization Phase.

 

  •  

The direct cost of all the external and internal regulatory support necessary to
maintain the worldwide product registration for the Product including stability
testing, preparation of annual reports, answering questions of Regulatory
Authorities, preparing expert reports as required by Regulatory Authorities,
etc.

 

  •  

Costs of building inventory necessary for Product launch to the extent incurred
during the Commercialization Phase. The JSC shall agree on an inventory plan for
build-up of commercial supplies of Product in advance of launch on a country by
country basis. Costs incurred during Commercialization will be reimbursed from
net Sales.

 

  •  

Cash impact of Direct Working Capital changes, for example significant increases
in accounts receivable from customers.

 

  •  

Direct costs of support necessary for adverse experience documentation and
reporting, response to health professional and consumer inquiries about the
Product including the preparation and maintenance of the Product database,
administration of Phase IV study grants and supplies, the monitoring and review
of medical literature concerning the Product, evaluation of the need for
labeling changes, coordination with marketing to manage promotional material
review, and medical review and oversight of such activities.

 

  •  

Cash costs for direct capital expenditures, or other significant investments,
licenses, or assets used in the Development or Commercialization of such
Product. If the asset is used for more than one program, its costs will be
attributed to each program based on the program’s use of the asset’s available
capacity.

 

  •  

Prior investments used in a program will be included based on their depreciation
in accordance with the relevant Accounting Standard.

 

  •  

Depreciation or amortization resulting from investments that have been allowed
on a cash basis will be excluded.

 

  •  

Indirect costs should be allocated considering a reasonable and appropriate
share of:

 

  •  

Indirect materials and supplies for the Commercialization Activities of the
relevant Operating Party, properly allocated.

 

  •  

indirect equipment rental, maintenance, and calibration, properly allocated.

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  •  

To the extent specifically allocable to Commercialization of the Product, an
appropriate share of administration, facilities costs, information resources,
cost accounting and forecasting, human resources, insurance, and incentive
compensation performance bonus (whether paid in cash or stock), but excluding
non-cash expense resulting from Accounting Standard SFAS123R or any equivalent
accounting standard, share-based compensation accounting for stock options,
stock appreciation rights and the like.

 

  •  

For clarity, the costs of issuing or repaying debt or equity financing,
including interest or dividends shall not be included as Commercialization Costs
of an Operating Party.

Commercialization Costs will include only overhead costs that are ordinary and
necessary for the Commercialization of Products. Overhead costs will be
allocated by each Operating Party to Commercialization Costs based on allowable
cost items and an allocation method to be approved by the JSC.

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EXHIBIT C

HEADS OF AGREEMENT

COMMERCIAL PRODUCT LICENSE

by and between

GTC BIOTHERAPEUTICS, INC. (“GTC”)

and

LFB-BIOTECHNOLOGIES S.A.S.U. (“LFB”)

RECITALS

A. GTC and LFB are parties to that certain Amended and Restated Joint
Development and Commercialization Agreement (this “Agreement”) is entered into
as of June __, 2008 (hereinafter, the “Agreement”) (capitalized terms used
herein and not defined shall have the meaning ascribed to them in the
Agreement);

B. Pursuant to Section 8.2(c)(ii) of the Agreement, if an Operating Party fails
to fund ************ of the Development Costs of a Product (other than the
Initial Product) (hereinafter, an “Affected Product”) during the period
commencing on the relevant Product Start Date and ending on ************ for
such Product (hereinafter, the “Funding Commitment Period”), then such Affected
Product shall no longer be included within the Agreement and the rights and
obligations of the Parties with respect to such Affected Product after the
expiration of such period shall be governed by the terms of a definitive
commercial license agreement (hereinafter, the “Commercial License”) to be
executed between the Parties at such time; and

C. This Heads of Agreement sets forth the basic material terms of the Commercial
License and the Parties shall negotiate in good faith a definitive agreement
based on such terms within ************ from the Product Start Date with respect
to any Product other than the Initial Product.

 

1. SELECTED DEFINITIONS

1.1 “Commercial Party” means, for purposes hereof, the Operating Party that has
failed to fund ************ of the Development Costs of a Product during the
Funding Commitment Period.

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1.2 “Continuing Party” means, for purposes hereof, the Operating Party other
than the Commercial Party.

1.3 “Exclusive Collaboration Territory” means, for purposes hereof, the European
Territory with respect to LFB, and the North American Territory with respect to
GTC. For purposes hereof, an Operating Party’s Exclusive Collaboration Territory
shall not include any portion of the Co-Exclusive Territory that was designated
to such Operating Party or its Affiliates or its Third Party subcontractors by
the JSC under the Agreement.

1.4 “ROW” or “Rest of World” means, for purposes hereof, the rest of the
Territory outside the Commercial Party’s Exclusive Collaboration Territory.

 

2. RIGHTS OF THE PARTIES WITH RESPECT TO AFFECTED PRODUCTS

2.1 Termination of Product from Agreement. The Affected Product shall be
excluded from the Agreement and except to the extent described herein the terms
and conditions of the Agreement shall no longer apply to such Affected Product.

2.2 License to Continuing Party.

(a) The Commercial Party shall grant the Continuing Party an exclusive license
under the Commercial Party’s Patent Rights and Know How to develop and
commercialize the Affected Product in ROW, which license shall otherwise be of
the same scope as its license from the Commercial Party under the Agreement with
respect to the Affected Product.

(b) Such license shall bear an aggregate ************ royalty on Net Sales of
the Affected Product in ROW (the “Product Royalty”). The precise Product Royalty
will be negotiated in good faith by the Parties on an Affected
Product-by-Affected Product basis, taking into consideration the IPV of the
Commercial Party at the end of the Funding Commitment Period. Any dispute
regarding the amount of the Product Royalty to be paid with respect to Net Sales
of an Affected Product shall be subject to dispute resolution in accordance with
the terms set forth in Article 15 of the Agreement.

2.3 License to Commercial Party.

(a) The Commercial Party shall have no rights to develop and commercialize the
Affected Product in ROW and all rights and licenses granted by the Continuing
Party to LFB/GTC LLC and all rights and sublicenses granted by LFB/GTC LLC to
the Commercial Party in the Agreement, in each case, with respect to the
Affected Product in ROW shall terminate.

(b) The Commercial Party shall retain exclusive rights under the Continuing
Party’s Patent Rights and Know-How to develop and commercialize the Affected
Product in the Commercial Party’s Exclusive Collaboration Territory.

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(c) Subject to Section 2.4 below, the relevant terms and conditions of the
Agreement, including without limitation all performance obligations of the
Commercial Party thereunder, shall be incorporated into the Commercial License
and shall continue to apply to the Affected Product solely with respect to the
Commercial Party’s Exclusive Collaboration Territory.

2.4 Further Economic Terms.

(a) The Continuing Party shall retain ************ profits on Net Sales of the
Affected Product in ROW, subject to its obligation to pay to the Commercial
Party the Product Royalty and, if applicable, a reasonable transfer price in
connection with the manufacture and supply of the Affected Product for ROW as
set forth in 2.5 below.

(b) The Product Participation Model for the Affected Product and profit-sharing
mechanism under the Agreement shall be incorporated into the Commercial License
and shall apply solely to Net Sales of Affected Products in the Commercial
Party’s Exclusive Collaboration Territory. Thus, for example, if at the end of
the Funding Commitment Period the Continuing Party’s Product Participation
percentage is ************ and the Commercial Party’s Product participation
percentage is ************, the Continuing Party shall be entitled to
************ of Net Profits in the Commercial Party’s Exclusive Collaboration
Territory and the Commercial Party shall be entitled to ************ of such Net
Profits, subject to subsequent adjustment under the same terms provided in the
Agreement.

(c) The Commercial Party shall continue to bear Development Costs and
Commercialization Costs in its Exclusive Collaboration Territory and such costs
shall be factored into the Product Participation Model under the same terms
provided in the Agreement to adjust the Parties’ relative IPV solely with
respect to the Commercial Party’s Exclusive Collaboration Territory. Thus, the
Commercial Party may increase its Product Participation percentage solely in its
Exclusive Collaboration Territory by contributing a larger share of Development
Costs in its Exclusive Collaboration Territory; provided that the Commercial
Party shall not regain any rights in ROW by reason of such additional funding.

2.5 Manufacture and Supply of Product.

(a) If the Commercial Party was supplying the Affected Product to the Continuing
Party or a Third Party Commercialization partner under a Supply Agreement, it
shall continue to do so and the terms of the relevant Supply Agreement, other
than its economic terms, shall remain in effect. The Commercial Party shall
continue to supply the Affected Product for those territories in ROW which it
was previously supplying at a transfer price equal to its ************.

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(b) If the Continuing Party desires the Commercial Party to supply Affected
Product to the Continuing Party for additional regions of ROW, and the
Commercial Party is willing and has the capacity to supply Affected Product for
such additional regions, it shall supply such Affected Product at a transfer
price equal to ************ under the terms of a definitive Supply Agreement to
be negotiated for such purposes.

(c) If the Commercial Party is unable to supply, through itself or third
parties, all or part of the Continuing Party’s requirements for the Affected
Product, it shall grant the Continuing Party a perpetual, non-exclusive, royalty
bearing (such royalty to be included in the Product Royalty described above)
license under the Commercial Party’s Patent Rights and Know-How to the extent
reasonably necessary to enable the Continuing Party to manufacture the Affected
Product, with the right to sublicense to Third Parties engaged by the Continuing
Party to manufacture such Product, under the terms of the Commercial License.

(d) If the Continuing Party was supplying the Affected Product to the Commercial
Party under a Supply Agreement, it shall continue to do so with respect to the
Commercial Party’s Exclusive Collaboration Territory at a transfer price equal
to its ************.

2.6 Other Material Terms and Conditions. The Parties shall negotiate in good
faith the other terms and conditions of the Commercial License, which shall be
commercially reasonable and shall include, without limitation, customary
representations, warranties, covenants and indemnities, reasonable performance
obligations and appropriate remedies for default thereof, provisions regarding
intellectual property rights, confidentiality, payments and reporting and other
customary provisions for a commercial product license of this type.

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EXHIBIT D

Core Business Products

 

  •  

GTC Core Business Products:

 

  •  

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

 

  (ii) LFB Biotech Core Business Products

MARKETED PRODUCTS

 

  •  

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

R & D PRODUCTS

 

  •  

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

--------------------------------------------------------------------------------

Confidential material omitted and filed separately

with the Securities and Exchange Commission.

Asterisks denote such omissions.

 

ANNEX 1

Products Excluded from Competing Product Definition

GTC Excluded Products as of the Effective Date:

 

  •  

GTC Products:

 

  •  

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

 

  •  

Transgenic Products developed by GTC as part of pre-existing contracts or
agreements with external partners:

 

  •  

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

LFB Biotech Excluded Products as of the Effective Date:

MARKETED PRODUCTS

 

  •  

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

R & D PRODUCTS

 

  •  

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