Exhibit 10.29


 


DATED APRIL 2, 2008


 


TRANSITIONAL
SERVICES AGREEMENT


 


between


 


AVECIA
BIOLOGICS LIMITED


 


and


 


PHARMATHENE
UK LIMITED


 





 

















 


TABLE
OF CONTENTS


 


	
  1.

  	
  DEFINITIONS AND INTERPRETATION

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  SUPPLY OF THE SERVICES

  	
  4

  
	
   

  	
   

  	
   

  
	
  3.

  	
  CHARGES

  	
  5

  
	
   

  	
   

  	
   

  
	
  4.

  	
  LICENCES FROM COMPETENT AUTHORITIES

  	
  6

  
	
   

  	
   

  	
   

  
	
  5.

  	
  LIABILITY

  	
  7

  
	
   

  	
   

  	
   

  
	
  6.

  	
  CONFIDENTIALITY

  	
  8

  
	
   

  	
   

  	
   

  
	
  7.

  	
  FORCE MAJEURE

  	
  9

  
	
   

  	
   

  	
   

  
	
  8.

  	
  TERM

  	
  9

  
	
   

  	
   

  	
   

  
	
  9.

  	
  TERMINATION

  	
  10

  
	
   

  	
   

  	
   

  
	
  10.

  	
  CONSEQUENCES OF TERMINATION

  	
  10

  
	
   

  	
   

  	
   

  
	
  11.

  	
  DISPUTE RESOLUTION

  	
  11

  
	
   

  	
   

  	
   

  
	
  12.

  	
  INDEPENDENT CONTRACTORS

  	
  12

  
	
   

  	
   

  	
   

  
	
  13.

  	
  AMENDMENTS

  	
  13

  
	
   

  	
   

  	
   

  
	
  14.

  	
  ACCESS RIGHTS

  	
  13

  
	
   

  	
   

  	
   

  
	
  15.

  	
  ASSIGNMENT

  	
  14

  
	
   

  	
   

  	
   

  
	
  16.

  	
  NOTICES AND SERVICE

  	
  14

  
	
   

  	
   

  	
   

  
	
  17.

  	
  WAIVERS

  	
  16

  
	
   

  	
   

  	
   

  
	
  18.

  	
  SEVERABILITY

  	
  16

  
	
   

  	
   

  	
   

  
	
  19.

  	
  COUNTERPARTS

  	
  17

  
	
   

  	
   

  	
   

  
	
  20.

  	
  ENTIRE AGREEMENT

  	
  17

  
	
   

  	
   

  	
   

  
	
  21.

  	
  RIGHTS OF THIRD PARTIES

  	
  17

  
	
   

  	
   

  	
   

  
	
  22.

  	
  DATA PROTECTION

  	
  17

  
	
   

  	
   

  	
   

  
	
  23.

  	
  GOVERNING LAW AND JURISDICTION

  	
  18

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 1 – Storage Services

  	
  20

  
	
   

  	
   

  
	
  SCHEDULE 2 – Human Resources Services

  	
  21

  
	
   

  	
   

  
	
  SCHEDULE 3 – Finance/Accounting Services

  	
  22

  



 


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  SCHEDULE 4 – Information Technology Services

  	
  23

  
	
   

  	
   

  
	
  SCHEDULE 5 – Storage of Bulk Drug Substance

  	
  24

  



 


3

















 


THIS AGREEMENT is made the 2nd
day of April, 2008 between:


 


(1)                                 AVECIA BIOLOGICS LIMITED, a company
incorporated in England and Wales (company number 5803359) and having its
registered office at PO Box 42, Hexagon Tower, Blackley, Manchester M9 8ZS (the
“Supplier”); and


 


(2)                                 PHARMATHENE UK LIMITED, a company incorporated in England and Wales (company
number6534363) and having its registered office at Juxon House, 100 St Paul’s Churchyard, London EC4M 8BU  (the “Consumer”).


 


BACKGROUND:


 


(A)                              Pursuant to an agreement entered into on 20 March 2008 among
Avecia Investments Limited, the Supplier, Avecia Biologics Inc., Avecia
Limited, Pharmathene, Inc., Pharmathene U.S. Corporation and the Consumer
(the “SPA”), the Business Vendors
agreed, inter alia, to sell the Target Business and the Business Assets (each
as defined in the SPA) to the Consumer, Pharmathene Inc. and Pharmathene U.S. Corporation.


 


(B)                                In order to aid the Consumer to operate the Target Business in the
manner in which it has been carried on prior to the date of this Agreement, the
Supplier has agreed to continue to supply the Services (as defined herein) to
the Consumer and the Consumer has agreed to accept such supply under the terms
and conditions of this Agreement.


 


IT
IS AGREED AS FOLLOWS:


 


1.             DEFINITIONS AND INTERPRETATION


 


1.1.                              In this Agreement, unless the context otherwise requires, the
following expressions shall have the following meanings:


 


“Affiliate” means a company which from time
to time is a subsidiary of the party concerned or which is a holding company of
such party or a direct or indirect subsidiary of such holding company;


 


“Aggregate Liability” means the total
aggregate liability of a party under all and any heads of claim and whether in
respect of one or more related or unrelated acts, events, omissions or
defaults;


 


“Business Day” means any day (other than a
Saturday or Sunday) on which clearing banks are open for normal business in
London;


 


“Charges” means the charges payable by the
Consumer to the Supplier in relation to a Service as set out in the relevant
Schedules;


 


“Commencement
Date” means the date hereof;


 


“Confidential Information” has the meaning
given to it in Clause 6.1;


 


“Indemnified Party” and “Indemnifying Party” each have the meaning
given to them in Clause 5.2;


 

















 


“Initial Period” means, in relation to a
Service, the initial period set out in the relevant Schedule;


 


“Insolvency Event”, in relation to a party,
means:


 


(a)                                  the party enters into or resolves to enter into any arrangement,
composition, compromise or similar arrangement with (including, but not limited
to, a company voluntary arrangement pursuant to Part I of the Insolvency Act
1986) or assignment for the benefit of its creditors or any class of them;


 


(b)                                 the party is unable to pay its debts when they are due or is deemed
under any statutory provision to be insolvent or a moratorium under Schedule A1
to the Insolvency Act 1986 is in force;


 


(c)                                  a liquidator or provisional liquidator is appointed to the party or
a receiver (which expression shall include an administrative receiver),
receiver and manager, trustee or similar official is appointed over any of the
assets or undertakings of the party;


 


(d)                                 an application or order is made or a resolution is passed for the
winding up of the party (except for the purposes of a bona fide reconstruction
or amalgamation); or


 


(e)           an administration order is made, an administrator is appointed in
respect of the party, any resolution is passed resolving to appoint an
administrator, or any meeting of the board of directors resolves to appoint an
administrator.


 


“Internal Consumers” has the
meaning set out in Clause 2.2;


 


“Losses” means any and all claims, losses,
injunctive relief, clean up costs, awards, judgements, settlements, fines,
penalties, liabilities, damages, expenditures (but excluding any capital
improvements and investments), costs or expenses (including, without
limitation, reasonable legal fees);


 


“Notice Period” means, in relation to a
Service, the notice period set out in the relevant Schedule;


 


“Recipient” has the meaning given to it in
Clause 6.1;


 


“Services” means the services as identified
in the Schedules;


 


“Site” means, in respect of a Service, the
site at which the Service is to be provided;


 


“Specifications” means, in relation to a
Service, the specifications set out in the relevant Schedule;


 


“Supplier’s Group” means the
Supplier and its Associated Companies;


 


2

















 


“Tax Authority” means HM Revenue and Customs
or any other person, authority, body or official which is from time to time
responsible for the care, management or administration (inter alia) of Value Added Tax;


 


“Term” means, in relation to
a Service, the term set out in the relevant Schedule;


 


“Transfer Regulations” bears the meaning
given in Clause 12.4; and


 


“Value Added Tax” or “VAT” means


 


(a)                                  any tax imposed in conformity with the Sixth Directive of the
Council of the European Economic Communities (77/388/EEC) (including, in
relation to the United Kingdom, value added tax imposed by the Value Added Tax
Act 1994 and legislation and regulations supplemental thereto); and


 


(b)                                 any other tax of a similar nature, whether imposed in a member state
of the European Union in substitution for, or levied in addition to, such tax
referred to in (a), or elsewhere.


 


1.2.                              In this Agreement unless the context otherwise requires:


 


	
  1.2.1.

  	
  the Schedules form part of, and shall be construed
  as incorporated into this Agreement;

  
	
   

  	
   

  
	
  1.2.2.

  	
  references to Clauses and Schedules are to
  the clauses of, and schedules to, this Agreement;

  
	
   

  	
   

  
	
  1.2.3.

  	
  the Clause headings, use of bold or italic
  type and the contents page in this Agreement are for convenience only
  and shall not affect the construction or interpretation thereof;

  
	
   

  	
   

  
	
  1.2.4.

  	
  words and expressions defined in the SPA
  where used in this Agreement shall have the same meaning;

  
	
   

  	
   

  
	
  1.2.5.

  	
  any phrases introduced by the terms
  “including” or “include” or any similar expression are illustrative and do
  not limit the sense of the words preceding those terms and shall be deemed to
  be followed by the words “without limitation”;

  
	
   

  	
   

  
	
  1.2.6.

  	
  a reference to any legislation or
  legislative provision includes any statutory modification, amendment,
  extension or re-enactment of, or legislative provision substituted for, and
  any subordinated legislation issued under, that legislation or legislative
  provision;

  
	
   

  	
   

  
	
  1.2.7.

  	
  a reference to any party to this Agreement
  (or any other document or agreement) includes that party’s successors and
  permitted assigns;

  
	
   

  	
   

  
	
  1.2.8.

  	
  references in this Agreement to persons
  shall include references to firms, corporations or unincorporated
  associations;

  



 


3

















 


	
  1.2.9.

  	
  the masculine gender shall be deemed to
  include the feminine and neuter and the singular number shall be deemed to
  include the plural and vice versa;

  
	
   

  	
   

  
	
  1.2.10.

  	
  the expressions “subsidiary” and “holding
  company” shall have the same meaning in this Agreement as their respective
  definitions in the Companies Act 1985 (as amended);

  
	
   

  	
   

  
	
  1.2.11.

  	
  where a word or expression is given a
  particular meaning, other parts of speech and grammatical forms of that word
  or expression have a corresponding meaning;

  
	
   

  	
   

  
	
  1.2.12.

  	
  a reference to any agreement or document is
  to that agreement or document (and, where applicable, any of its provisions)
  as amended, novated, supplemented or replaced from time to time; and

  
	
   

  	
   

  
	
  1.2.13.

  	
  a reference to a person, at any time when
  that person is treated as a member of a group for the purposes of sections 43
  to 43D of the Value Added Tax Act 1994 and the Value Added Tax (Groups:
  eligibility) Order 2004 includes (where appropriate for VAT purposes) a
  reference to the representative member of that group at that time, and
  “representative member” is to be construed in accordance with those sections.

  



 


1.3.          Where specific terms appear in the Schedules they shall apply with
respect to the Services to which such Schedule relates. In the case of
inconsistency between the Schedules and the terms of the rest of this
Agreement, the Schedules shall have priority.


 


2.             SUPPLY OF THE SERVICES


 


2.1.          The Supplier shall supply or make available the Services to the
Consumer in accordance with the terms of, and the Specifications set out in,
this Agreement in relation to each Service with reasonable skill and care.  The Charges are predicated on the nature and
extent of the provision of the Services to the Consumer after the Commencement
Date being consistent with the nature and extent of such Services as they were
provided by the Supplier to the Target Business in the twelve months prior to
the Commencement Date. Accordingly, for the avoidance of doubt, subject to any
express provision to the contrary contained in this Agreement, the Supplier
shall not be obliged to provide a level, extent or type of Service which is
materially more extensive, different or more onerous from that previously
provided by the Supplier to the Target Business in the twelve months prior to
the Commencement Date.  Any dispute
regarding the level, extent or type of Service shall be dealt with in
accordance with Clause 11.


 


2.2.          In relation to those Services which the Supplier also provides to
itself, its Affiliates or to other third party customers (“Internal Consumers”), the Supplier will
supply such Services to the Consumer in good faith and in a manner which does
not discriminate against the Consumer in favour of Internal Consumers in
relation to (i) the level of the Service to be provided or 


 


4

















 


(ii) the
allocation of Services in circumstances of restricted availability of supply.


 


2.3.          If either party wishes to change the nature, volume or cost of the
Services provided under this Agreement, that party shall make a request to the
other party in writing setting out in as much detail as reasonably possible the
change required and the reason for requesting the change.  The other party shall consider the request in
good faith with a view to implementing it if it can reasonably do so provided
always that no change to the nature, volume or cost of the Services shall be
implemented without the prior consent of the other party.


 


2.4.          If, by agreement between the parties, the Consumer decides to offer
permanent employment to any of the Supplier’s staff who would have been part of
the resources providing the Services to the Consumer, and they accept such
offers, the Supplier and the Consumer will review the extent and cost of the
relevant Service and make any necessary adjustment.


 


2.5.          The Supplier shall provide the Consumer with copies of any relevant
health and safety information and product literature in relation to the
Services that it may possess.


 


3.             CHARGES


 


3.1.                              In consideration of the provision of the Services, the Consumer
shall pay to the Supplier the Charges for so long as this Agreement has not
been terminated in accordance with Clauses 7, 8 or 9 or Schedule 1. The Charges
shall be invoiced on a monthly basis, in arrears, in respect of calendar
months, and shall be paid by the 30th day after an original invoice is
received.  All payments shall be made by
wire transfer to a bank designated by the Supplier or by such other method as
the parties may agree.


 


3.2.                              All sums payable by one party to another party pursuant to this
Agreement are exclusive of VAT.


 


3.3.                              If the Supplier makes a taxable supply to the Consumer for VAT
purposes pursuant to this Agreement:


 


3.3.1.       the Consumer shall pay to the Supplier (in addition to any other
consideration for that supply) a sum equal to the amount of VAT which is or
becomes chargeable on that supply for which the Supplier has the liability to
account to the relevant Tax Authority; and


 


3.3.2.                     the Consumer shall pay that sum not later than:


 


(a)                                  the date by  which the
relevant Charges are required under the terms of this Agreement to be paid; or


 


(b)                                 the date falling five (5) Business Days after receipt by the
Consumer of a valid VAT invoice in respect of that supply,


 


whichever
is the later.


 


5

















 


3.4.          If:


 


3.4.1.       the Consumer has paid any amount in respect of VAT pursuant to
Clause 3.3.2 on the basis that the relevant transaction gave rise to a positive
rated supply for VAT purposes, and it subsequently transpires that the
transaction did not give rise to a positive rated supply; or


 


3.4.2.       the Consumer has paid any amount in respect of VAT pursuant to
Clause 3.3.2, and it subsequently transpires that such amount was in excess of
the amount of VAT actually chargeable on the relevant supply for which the
party to whom that amount in respect of VAT was paid has the liability to
account to the relevant Tax Authority,


 


the
Supplier shall repay to the Consumer an amount equal to the difference between
such amount in respect of VAT and the amount of VAT actually chargeable in
respect of the relevant transaction or on the relevant supply, such repayment
to be made within three Business Days after the Supplier first becomes aware of
the relevant error.


 


3.5.          If one
party (“Party A”) is required by
the terms of this Agreement to reimburse another party (“Party B”) for any cost or expense, Party A
shall reimburse Party B for the full amount of such cost or expense, including
any part of it which represents VAT, except:


 


(a)           where
this Agreement provides otherwise, or


 


(b)           to the
extent that Party B is entitled to credit or repayment in respect of that VAT
from the relevant Tax Authority.


 


3.6.          If the
Consumer fails to pay any amount payable by it under this Agreement, to the
extent that the amount is undisputed, the Supplier shall be entitled to charge
the Consumer interest on the overdue amount from the date falling five (5) Business
Days after the due date to the actual payment at a rate equal to 2% per annum
above the base rate for the time being of Barclays Bank plc.  The interest shall accrue daily and be
calculated on a 365-day year basis.


 


3.7.          The
Supplier shall establish and maintain accurate books and records documenting
the costs charged to the Consumer under this Agreement.  The Supplier shall provide the Consumer and
its representatives with access, during normal working hours and subject to
reasonable prior notice from the Consumer, to such books and records as is
reasonably necessary to review the accuracy of the costs billed to the Consumer
under this Agreement.


 


4.             LICENCES FROM COMPETENT
AUTHORITIES


 


4.1.          The
Supplier confirms that it holds all approvals known by the Supplier to be
required by any regulatory authorities for the provision of the Services in
substantially the same form as they were provided in the 12 months prior to the
Commencement Date.


 


6

















 


4.2.          The
Supplier shall obtain and maintain, at its own cost, any approval required from
any regulatory authorities for the provision of the Services, the Supplier
shall obtain all necessary third party consents, and the Consumer shall provide
the Supplier with all reasonable assistance required in this regard, provided that the Supplier shall
be liable for any third party costs incurred by the Consumer in respect of such
assistance, provided such costs shall not be incurred
without the prior approval of the Supplier.


 


4.3.          The
Supplier shall, at its own cost, secure any and all permits, licences and/or
variations thereof, governmental or other regulatory authorities required to
ensure compliance with all local laws, regulations and ordinances applicable to
the provision of the Services to the Consumer.


 


5.             LIABILITY


 


5.1.          Without
limiting the liability of either party for death or personal injury caused by
negligence, for fraud or fraudulent misrepresentation nor where liability
cannot be excluded or limited as a matter of law, neither party shall be under
any liability whatsoever to the other for any indirect, consequential or
special loss or expense or any loss of profits arising out of this Agreement
however caused.


 


5.2.          Subject
to Clause 5.3, each party (the “Indemnifying
Party”) shall indemnify the other (the “Indemnified Party”) in respect of any Losses directly incurred
by the Indemnified Party in respect of destruction, loss of or damage to the
Indemnified Party’s assets located at the Site and/or arising in respect of the
Indemnifying Party’s breach of this Agreement, in each case, only to the extent
that such Loss is caused by the negligence, recklessness, wilful misconduct,
wilful default or fraud of the Indemnifying Party, its servants or agents and
not otherwise.


 


5.3.          Without
limiting the liability of either party for death or personal injury caused by
negligence for fraud or fraudulent misrepresentation nor where liability cannot
be excluded or limited as a matter of law, each party’s Aggregate Liability to
the other in respect of any Losses for which the first-mentioned party is
liable under this Agreement shall in respect of all such Losses arising by
reference or attributable to acts, event, omissions or defaults occurring
during a calendar year be limited to a maximum amount equal to £100,000.


 


5.4.          Except
as otherwise provided in this Agreement, the Supplier makes no representation
or warranty of any kind or nature whatsoever, express or implied, with respect
to the Services delivered or purchased hereunder and, without limiting the
generality of the foregoing, the Supplier expressly disclaims any warranty as
to the suitability of the Services for the Consumer’s requirements or any other
purpose.  Any suggestions made or advice
given by the Supplier concerning the Services and the use thereof reflect the
Supplier’s opinion only and the Supplier makes no warranty in relation
thereto.  The Consumer assumes all risk
and responsibility in respect of any such suggestion or advice and the receipt,
taking or use of the Services.


 


7
















 


6.             CONFIDENTIALITY


 


6.1.          Any
know-how, trade secrets, information of commercial value or other information
proprietary to either party to this Agreement which is disclosed by that party
or on its behalf to, or has been made available to, the other party (“Recipient”) in connection with this
Agreement (“Confidential  Information”) shall remain the property of
the party making the disclosure and shall not, without the prior written
consent of that party, be disclosed to any third party or used by the Recipient
except for the performance of the Recipient’s obligations under this Agreement.
The obligations of non-use and confidentiality contained in this Clause shall
not apply to any information which the Recipient can reasonably demonstrate
from its written records or otherwise:


 


(a)           is or
has become part of the public domain other than through the fault of the
Recipient or the breach of this Agreement by the Recipient;


 


(b)           was
known to or in the possession of the Recipient otherwise than pursuant to the
terms of the Agreement;


 


(c)           has
been lawfully acquired by the Recipient from a third party (other than a member
of the Supplier’s group) on a non-confidential basis;


 


(d)           the
Recipient is required to disclose pursuant to any applicable law, lawful
governmental, quasi governmental, or judicial order (or on which is required by
the applicable rules of any stock exchange on which the securities of the
Recipient (or its holding company) are listed or quoted (or on which it is
proposed that such securities be listed or quoted during the process of
applying to become so listed or quoted) or any other competent regulatory
authority (provided that, in any such event, only the obligations of
confidentiality in this Clause shall not apply and for the avoidance of doubt the
obligation of non-use in this Clause shall continue to apply);


 


(e)           has
been conceived or generated by the Recipient after the date hereof
independently of the information received from the other party; or


 


(f)            is
required to be disclosed for the purpose of any judicial proceedings arising
out of this Agreement.


 


6.2.          Either
party may freely disclose Confidential Information to its Affiliates and may,
with the other party’s consent, not to be unreasonably withheld, disclose the
Confidential Information to a proposed assignee or transferee under a proposed
assignment or transfer permitted under this Agreement provided such proposed
assignee or transferee agrees in writing to be bound by Clause 6.1 as if it was
a party to this Agreement.


 


6.3.          Upon
expiry or termination of this Agreement, all information supplied by either
party to this Agreement to the other party that contains Confidential
Information within the scope of this Clause shall (a) if in a form capable
of delivery, be promptly returned by the Recipient to the party which supplied
it, and (b) so far as reasonably technically practicable be erased from
any 


 


8

















 


computer, word processor or other device
except in either case for that information which is required to be retained by
law or regulation.  The obligations of
each party under this Clause shall survive the expiry or termination of this
Agreement for a period of three (3) years.


 


6.4.          In
addition to the Confidential Information identified in Clause 6.1, each party
shall (subject, mutatis mutandis, to the exclusions in Clause 6.1(a) to
6.1(f)) treat as Confidential Information all information which it receives or
obtains relating to:


 


6.4.1.       the
contents of or negotiations relating to this Agreement; and


 


6.4.2.       the
business and customers of the other party.


 


6.5.          Each of
the parties may disclose Confidential Information to its directors and
employees and professional advisers who need to know the Confidential
Information.


 


7.             FORCE MAJEURE


 


7.1.          In this
Agreement, a “force majeure event”
shall mean any cause preventing either party from performing any or all of its
obligations hereunder (other than payment obligations) due to factors beyond
the control of the party, comprising, war, terrorism, sabotage, revolution,
riot or civil commotion, prohibitions or measures of any kind on the part of
any governmental, parliamentary or local authority (including in respect of
imports or exports), explosion, fire, flood, natural disaster, other casualty,
or act of God.


 


7.2.          If
either party is prevented or delayed in the performance of any of its
obligations under this Agreement by a force majeure event, that party shall
forthwith serve notice in writing on the other party giving full written
particulars of the force majeure event, and shall, subject to service of such
notice and to Clause 7.3, have no liability in respect of the performance or
non-performance of such of its obligations as are prevented by the force
majeure event during the continuation of such event, and for such time after it
ceases as is necessary for that party, using its best endeavours, to resume
full performance of its obligations under this Agreement without delay.


 


7.3.          If the
circumstances referred to in Clause 7.2 continue for a continuous period of
thirty (30) days, the party notified of such circumstances in accordance with
Clause 7.2 may, without prejudice to any other rights or remedies which may be
available to it, terminate this Agreement with immediate effect by giving
written notice of termination to the other party.


 


7.4.          The
obligations of the Consumer to pay any monies payable under this Agreement, in
respect of the Services affected by the relevant force majeure event, shall
abate for so long as such force majeure event subsists.


 


8.             TERM


 


8.1.          This
Agreement shall commence on the Commencement Date and, subject to Clauses 8.2
and 8.3 and to the provisions for early termination set out 


 


9

















 


elsewhere in this Agreement, in respect of
each Service, shall continue for the Term set out in the relevant Schedule.


 


8.2.          The
Consumer shall have the right, at any time to give notice to the Supplier for
the termination of any Service, such notice to comprise the relevant Notice
Period and to expire at any time.


 


8.3.          Termination
under this Clause 8 with respect to any one or more Services shall not affect
this Agreement with respect to any other Services continuing hereunder.


 


9.             TERMINATION


 


9.1.          Without
prejudice to any other rights or remedies which may be available to them,
either party may terminate this Agreement with immediate effect by giving
written notice of termination to the other party (the “Defaulting Party”) in any of the following
circumstances:


 


(a)           the
Defaulting Party commits a breach of any of the provisions of this Agreement
and, in the case of a breach capable of being remedied, fails to remedy that
breach within twenty (20) Business Days of receiving written notice specifying
that breach and requiring the same to be remedied provided that failure to pay
any amount to the extent that it is in bona fide
dispute shall not be a breach;


 


(b)           an
Insolvency Event occurs in relation to the Defaulting Party and whilst such Insolvency Event is
continuing (but not after it ceases) the Defaulting Party fails to pay within
ten (10) Business Days of written demand any sum due and payable under
this Agreement; or


 


(c)           the
Defaulting Party ceases to carry on the whole or substantially the whole of its
business or that part of its business to which this Agreement relates; or


 


(d)           in the
case of a force majeure event as set out in Clause 7.3.


 


9.2.          In the
case of termination under Clause 9.1(a) such termination may be either in
respect of this Agreement as a whole or in respect of Services in respect of
which the breach was committed (and, for the avoidance of doubt, any other
Services identified in the same Schedule as such Services) at the terminating
party’s sole discretion.


 


9.3.          If the
Agreement is terminated by the Consumer due to Clause 7.3 or 9.1 where the
Supplier is the Defaulting Party, the Supplier shall provide the Consumer with
reasonable assistance in replacing the Service.


 


10.          CONSEQUENCES OF TERMINATION


 


10.1.        Without
prejudice to any other rights or remedies which either party may have, upon the
expiry or termination of this Agreement or any part thereof, howsoever the same
occurs, each party shall:


 


10

















 


	
   

  	
  10.1.1.

  	
  immediately pay to the other party all sums
  to the extent such sums are not disputed which at the date of termination are
  due and payable to the other party hereunder, no further Charges shall become
  payable and any Charges paid in advance prior to the termination of the
  Services shall be immediately reimbursed to the Consumer;

  
	
   

  	
   

  	
   

  
	
   

  	
  10.1.2.

  	
  immediately cease all use of any property
  of the other party, including without limitation any Intellectual Property of
  the other party; and

  
	
   

  	
   

  	
   

  
	
   

  	
  10.1.3.

  	
  within 14 days of such expiry or
  termination, at the expense of the Defaulting Party (where termination is
  pursuant to Clause 9.1), return to the other party all property of the other
  party in its possession, custody or control, relating to such expired or
  terminated Services and subject as provided in this Clause and except in
  respect of accrued rights, neither party shall have any further obligations
  to the other.

  
	
   

  	
   

  	
   

  
	
  10.2.

  	
  Clauses 1, 5, 6, 10, 11, 12, 17, 18 and 23
  and any other provision of this Agreement which is similarly intended to be
  capable of continuing to apply after the termination of this Agreement, shall
  survive such termination howsoever the same occurs.

  
	
   

  	
   

  
	
  10.3.

  	
  In the case of expiry or termination in
  respect of one or some, but not all, Services:

  
	
   

  	
   

  
	
   

  	
  10.3.1.

  	
  Clause 10.1 shall apply in respect of sums
  and property exclusively in relation to the Services in respect of which such
  termination occurred only; and

  
	
   

  	
   

  	
   

  
	
   

  	
  10.3.2.

  	
  the Charges attributable to such terminated
  Services shall cease to be incurred by the Consumer with effect from the date
  of termination.

  



 


11.          DISPUTE RESOLUTION


 


	
  11.1.

  	
  In the event of any disputes which may
  arise out of or in connection with this Agreement the parties shall in the
  first instance promptly refer the matter to the parties’ on-site
  representatives at the relevant site. 
  Should the on-site representatives be unable to resolve the dispute
  within ten (10) Business Days of the matter having been first considered
  or such longer period as may be agreed by these on-site representatives,
  senior executives of each of the parties shall meet as soon as reasonably
  practicable and shall use their best endeavours  to attempt to resolve such dispute or
  difference.  If the parties’ senior
  executives are unable to resolve the dispute within a period of ten (10) Business
  Days following the senior executives’ first meeting to discuss the matter
  (including a meeting by telephone) then the provisions of Clause 11.2 shall
  apply.

  
	
   

  	
   

  	
   

  
	
  11.2.

  	
  The following provisions shall apply in the
  case of any disputes which may arise out of or in connection with this
  Agreement which have not been resolved in accordance with Clause 11.1:

  
	
   

  	
   

  	
   

  
	
   

  	
  11.2.1.

  	
  such dispute shall be submitted to
  arbitration at the request of either party upon notice to that effect to the
  other party (a Notice of 

  



 


11

















 


	
   

  	
   

  	
  Reference) and be finally determined under
  the arbitration rules of the London Court of International Arbitration
  (LCIA) in force at the date of this Agreement (the Rules) from time to time
  (which Rules are deemed to be incorporated by reference into this
  Clause);

  
	
   

  	
   

  	
   

  
	
   

  	
  11.2.2.

  	
  the parties shall be entitled to appoint
  one arbitrator each;

  
	
   

  	
   

  	
   

  
	
   

  	
  11.2.3.

  	
  the third arbitrator, who shall act as
  chairman of the tribunal, shall be nominated by the two arbitrators nominated
  by or on behalf of the parties. If he is not so nominated within 30 days of
  the date of nomination of the later of the two party-nominated arbitrators to
  be nominated, he shall be chosen by the LCIA; and

  
	
   

  	
   

  	
   

  
	
   

  	
  11.2.4.

  	
  neither party shall be required to give
  general discovery of documents but may be required only to produce specific
  identified documents which are relevant to the dispute.

  



 


12.          INDEPENDENT CONTRACTORS


 


12.1.        In making
and performing this Agreement, the parties are acting and shall act as
independent contractors. Neither party is, nor shall be deemed to be, an agent,
legal representative, joint venturer or partner of the other party for any
purpose.


 


12.2.        Neither
party shall be entitled to (i) enter into any contracts in the name of or
on behalf of the other party, (ii) pledge the credit of the other party in
any way or hold itself out as having authority to do so or (iii) make
commitments or incur any charges or expenses for or in the name of the other
party.


 


12.3.        Neither
party’s personnel are, nor shall they be deemed to be at any time during the
term of this Agreement, employees of the other party.  Subject to the other terms of this Agreement,
each party shall be solely responsible for payment of all compensation owed to
its personnel (and all associated income taxes and national insurance
contributions).


 


12.4.        The
Supplier confirms that there are no individuals who will be engaged in
providing the Services to the Consumer to such an extent that on the
termination of this Agreement in relation to the provision of such Services,
the employment of such individual would transfer to the Consumer under the
Transfer of Undertakings (Protection of Employment) Regulations 2006 (the “Transfer Regulations”).


 


12.5.        If any
person employed or engaged by the Supplier in the provision of the Services
asserts or alleges that his employment or any liability associated with his
employment has transferred to the Consumer by operation of the Transfer
Regulations in relation to the provision of the Services (a “Transferring Employee”) the Consumer shall
within 21 days after being notified of this either by the Transferring Employee
or by the Supplier (whichever is the earlier) have the option to terminate the
employment or purported employment of the Transferring Employee and the Supplier
shall indemnify and keep indemnified the
Consumer against all liabilities including but not limited to costs, claims,
losses, actions, proceedings, penalties, awards, 


 


12

















 


demands, expenses, damages, compensation, fines (including without
limitation, any liability to tax and national insurance) arising out of or in
connection with any claim by a Transferring Employee or any person other than a
Transferring Employee (in either case whether on their own behalf or in their
capacity as an appropriate representative) relating to or arising from any
claims made or threatened before, on or after the transfer and which the
Consumer may incur or suffer by virtue of the operation of the Transfer
Regulations in connection with the termination of this Agreement provided
however that this indemnity shall not apply in respect of any such employee if
any member of the Purchaser’s Group has accepted services from such employee
for a period of three months or more from the date of such notification.


 


13.          AMENDMENTS


 


13.1.        No
amendment or variation of this Agreement shall be effective unless in writing
and signed by a duly authorised representative of each of the parties.


 


14.          ACCESS RIGHTS


 


14.1.        Subject
(save in cases of emergency) to not less than one day’s notice and subject to
obtaining a “Permit to Work” for engineering work from the Consumer (not to be
unreasonably denied or delayed) the Consumer grants the Supplier (and all
others authorised and reasonably required by the Supplier, with the Consumer’s
prior consent) the right during the term of this Agreement and solely in
connection with the supply of a Service to enter the Consumer’s premises at the
Site to the extent necessary in order to carry out the Service and to comply
with any of its obligations under this Agreement together with the right to use
all access ways within the Consumer’s premises at the Site as are necessary for
the Supplier to provide the Service to the Consumer provided that the Supplier
shall cause as little inconvenience to the Consumer as reasonably practicable
in the exercise of such rights and shall promptly make good all damage to the
Consumer’s premises at the Site and/or any property or chattels of the Consumer
caused by such entry and shall fully comply at all times and in all respects
with all directions, including but not limited to all health and safety
directions, given by the Consumer.


 


14.2.        For the
avoidance of doubt, in respect of each Service, the rights granted to the
Supplier in Clause 14.1 above shall lapse upon termination of the Service or of
this Agreement in accordance with Clause 9.


 


14.3.        The
Supplier grants the Consumer (and all others authorised and reasonably required
by the Consumer, with the Supplier’s prior consent) the right during the term
of this Agreement and solely in connection with the use and enjoyment of a
Service to enter at any time the Supplier’s premises at the relevant site to
the extent necessary in order to use and enjoy the Service provided that the
Consumer shall cause as little inconvenience as reasonably practicable in the
exercise of such rights and shall promptly make good all damage to the Supplier’s
premises at the relevant site and/or any property or chattels of the Supplier
caused by such entry and shall fully comply at all 


 


13

















 


times
and in all respects with all directions, including but not limited to all
health and safety directions, given by the Supplier.


 


14.4.        For the
avoidance of doubt, in respect of each Service, the rights granted to the
Consumer in Clause 14.3 above shall lapse upon expiry or termination of the
Service or of this Agreement in accordance with Clauses 8 or 9.


 


15.          ASSIGNMENT


 


15.1.        A party
may not assign or transfer all or any part of its rights or obligations under
this Agreement without the prior written consent of the other party (such
consent not to be unreasonably withheld or delayed) save that:


 


	
   

  	
  15.1.1.

  	
  the
  Supplier may assign and transfer this Agreement to a purchaser of all or
  substantially all of the assets or rights of its business related to the
  provision of the Services provided the purchaser thereof agrees in writing to
  be bound by the terms and conditions of this Agreement;

  
	
   

  	
   

  	
   

  
	
   

  	
  15.1.2.

  	
  the
  Consumer may assign and transfer this Agreement to a purchaser of all or
  substantially all of the assets or rights of its business related to the
  receipt of the Services provided the purchaser thereof agrees to in writing
  to be bound by the terms and conditions of this Agreement; and

  
	
   

  	
   

  	
   

  
	
   

  	
  15.1.3.

  	
  either
  of the parties may assign this Agreement to any Affiliate subject to that
  Affiliate (i) not being subject to an Insolvency Event at the time of
  the assignment, (ii) agreeing in writing to be bound by the terms and
  conditions of this Agreement, and (iii) agreeing in writing to assign
  the Agreement back to the party concerned or another of its Affiliates before
  itself ceasing to be an Affiliate in relation to such party.

  



 


16.          NOTICES AND SERVICE


 


16.1.        All
notices and other communications given or made in relation to this Agreement:


 


	
   

  	
  16.1.1.

  	
  shall
  be in English and in writing;

  
	
   

  	
   

  	
   

  
	
   

  	
  16.1.2.

  	
  shall
  be delivered by hand or facsimile or sent by first class registered post;

  
	
   

  	
   

  	
   

  
	
   

  	
  16.1.3.

  	
  shall
  be delivered or sent to the party concerned at the relevant address or
  facsimile number shown in Clause 16.2, subject to such amendments as may be
  notified from time to time in accordance with this Clause 16 by the relevant
  party to the other party by not less than 3 Business Days’ notice; and

  
	
   

  	
   

  	
   

  
	
   

  	
  16.1.4.

  	
  shall
  be deemed to have been received if addressed in the aforesaid manner:

  



 


14

















 


(a)           in the
case of delivery by hand prior to 5pm on a Business Day, upon delivery and in
any other case on the Business Day following the day of delivery;


 


(b)           in the
case of delivery by first class registered post, on the second Business Day
following the day of posting;


 


(c)           in the
case of air mail posted from a country different to the country of address, be
deemed to have been received on the sixth Business Day after the date of
posting; or


 


(d)           in the
case of facsimile, on acknowledgement by the addressee’s facsimile receiving
equipment or on receipt by the sender of an error free confirmation statement
from its facsimile provided such acknowledgement or confirmation is dated prior
to 5pm on a Business Day, but otherwise, on the next Business Day following the
date of such acknowledgement or confirmation.


 


16.2         For the
avoidance of doubt, notices, requests, demands and other communications may be
served by other means (including e-mail) but such other means shall not benefit
from the presumption of delivery set out at Clause 16.1.


 


16.3         The
initial details for the purposes of Clause 16.1, are in the case of the Supplier:


 


	
  Avecia Biologics Limited

  
	
  PO Box 42

  
	
  Hexagon Tower

  
	
  Blackley

  
	
  Manchester M9 8ZS

  
	
   

  
	
  Facsimile: 0161 721 1886

  
	
  Attention: Company Secretary/General
  Counsel

  



 


	
  and in the case of the Consumer:

  
	
  Pharmathene UK Limited

  
	
  c/o Hogan & Hartson Corporate
  Services Limited

  
	
  Juxon House

  
	
  100 St Paul’s Churchyard

  
	
  London EC4M 8BU

  
	
   

  
	
  Facsimile: 020 7367 0220

  
	
  Attention: S. J. Atkinson

  



 


15

















 


	
  With a copy to:

  
	
  McCarter & English, LLP

  
	
  Four Gateway Center

  
	
  100 Mulberry Street

  
	
  Newark, NJ 07102

  
	
   

  
	
  Facsimile: 001 973 624 7070

  
	
  Attention: Jeff Baumel

  



 


and
in the case of any assignee pursuant to the terms of Clause 15.1 as set out in
the assignee’s undertaking to be bound by this Agreement.


 


16.4         Subject
to Clause 16.1, either party may by notice in writing to the other specify a
different or additional address or facsimile number for the service of notices
or copies of notices.


 


17.          WAIVERS


 


17.1.        A failure
to exercise or delay in exercising a right or remedy provided by this Agreement
or by law does not constitute a waiver of the right or remedy or a waiver of
other rights or remedies and a failure to exercise or delay in exercising a
right or remedy provided by this Agreement or by law does not constitute a
waiver of the right or remedy or a waiver of other rights or remedies and no
single or partial exercise of any right or remedy shall preclude any other or
further exercise of it or the exercise of any other right or remedy.


 


17.2.        A waiver
of a breach of any of the terms of this Agreement or of a default under this
Agreement does not constitute a waiver of any other breach or default  and shall not affect the other terms of this
Agreement.


 


17.3.        No waiver
shall be effective unless in writing and signed by the party whose waiver it
purports to be.


 


17.4.        The
rights and remedies provided by this Agreement are cumulative (provided that no
party may make recovery more than once in respect of the same loss) and
(subject as otherwise provided in this Agreement) are not exclusive of any
rights or remedies provided by law or this Agreement.


 


18.          SEVERABILITY


 


18.1.        Should
any provision of this Agreement be held to be illegal, invalid or unenforceable
in any respect by any judicial or other competent authority under any
applicable law:


 


	
   

  	
  18.1.1.

  	
  such
  provision shall, so far as it is illegal, invalid or unenforceable, be given
  no effect by the parties and shall be deemed not to be included in this
  Agreement; and

  



 


16

















 


18.1.2.     the other
provisions of this Agreement shall be binding on the parties as if such
provision were not included herein,


 


the parties shall use their best endeavours
to amend such provision in such reasonable manner as most closely achieves the
intention of the parties without substantially impairing the parties’ original
interests and without rendering such provision invalid or unenforceable.


 


19.          COUNTERPARTS


 


19.1         This
Agreement may be executed in more than one counterpart, each of which when
executed and delivered shall be deemed to constitute an original.  This Agreement shall become effective when
one or more counterparts have been signed by all of the parties hereto and such
a counterpart (so signed) has been delivered to each of the parties hereto.


 


19.2         To
facilitate execution, this Agreement may be executed through the use of
facsimile transmission, and a counterpart of this Agreement that contains the
facsimile signature of a party, which counterpart has been transmitted by
facsimile transmission to the other party at its facsimile number set out in
Clause 17 or at such other facsimile number as such other party shall request,
shall constitute an executed counterpart of this Agreement.


 


20.          ENTIRE AGREEMENT


 


20.1.        This
Agreement constitutes the entire agreement and understanding of the parties
with respect to the subject matter of this Agreement and supersedes all prior
agreements, negotiations and discussions between the parties relating to it.


 


20.2.        Each of
the parties acknowledges and agrees that in entering into this Agreement it
does not rely on, and shall have no remedy in respect of, any statement,
representation, warranty or understanding (whether negligently or innocently
made) of any person (whether party to this Agreement or not) other than as
expressly set out in this Agreement.


 


20.3.        Nothing
in this Clause 20 shall, however, operate to limit or exclude any liability for
fraud or fraudulent misrepresentation.


 


21.          RIGHTS OF THIRD PARTIES


 


No person who is not a party to this
Agreement shall have any right to enforce any term of this Agreement whether by
virtue of the Contracts (Rights of Third Parties) Act 1999 or otherwise.


 


22.          DATA PROTECTION


 


Each
party undertakes to comply with the Data Protection Act 1998 and any other
applicable data protection legislation in connection with performance of this
Agreement.


 


17
















 


23.          GOVERNING LAW AND
JURISDICTION


 


This Agreement shall be governed and
construed in accordance with English law and each party hereby irrevocably
submits to the exclusive jurisdiction of the English Courts.


 


IN
WITNESS WHEREOF the parties have executed this document as their Agreement on
the date first written above.


 


18

















 


	
  Executed
  on behalf of

  	
   

  	
   

  
	
  AVECIA BIOLOGICS LIMITED

  	
   

  	
   

  
	
  by:
  Adrian Buckmaster

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    /s/ Adrian Buckmaster

  
	
   

  	
   

  	
    Director/Authorised
  Signatory

  



 


 


	
  Executed
  on behalf of

  	
   

  	
   

  
	
  PHARMATHENE UK LIMITED

  	
   

  	
   

  
	
  by:
  David P. Wright

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
    /s/
  David P. Wright

  
	
   

  	
   

  	
    Director/Authorised
  Signatory

  
	
   

  	
   

  	
   

  



 


19

















 


SCHEDULE 1 – Storage
Services


 


Service to be Provided


 


The
storage of such equipment as the Consumer may reasonably request from time to
time at the Supplier’s premises (the “Equipment”).  Such Equipment shall be stored until either (i) the
next manufacture by the Supplier for the Consumer under the terms of the Master
Supply Agreement to be entered into on or around the date of this Agreement, or
(ii) the Consumer requests that the Equipment be delivered to an alternate
site (at the Consumer’s cost), whichever is the earlier.


 


Specifications


 


The
Equipment shall be stored in a secure area without climate control.


 


The
Equipment shall remain the property of the Consumer at all times.


 


The
Supplier will not modify the Equipment in any way.


 


The Supplier shall be
responsible for any loss, damage, or destruction to the Equipment in its
possession to the extent caused by the Supplier’s (or its employees or
sub-contractor’s) misconduct, wilful default, bad faith or negligence but
otherwise the Supplier shall have no liability to the Consumer in respect of
storage of Equipment under this Agreement, whether resulting from loss or
deterioration of or damage to the Equipment or otherwise, howsoever arising.


 


Charge for the Service


 


The Charge for
the Service shall be £1,000 per calendar month.


 


Term of the
Service


 


The Service
will be provided for a term of (i) 12 months or (ii) until the expiry
of the Master Supply Agreement (if later), unless terminated prior to that date
in accordance with the terms of this Agreement.


 


Notwithstanding
Clause 10 or any other provision of this Agreement, the Consumer may terminate
the Services at any time upon 30 days’ notice to the Supplier.  Such notice will be deemed to be given if the
Consumer notifies the Supplier that it does not intend for the Equipment to be
used by the Supplier under the Master Supply Agreement prior to the expiry of
the 18 month term.


 

















 


SCHEDULE 2 – Human
Resources Services


 


1.             Service Description


 


The provision
of advice and assistance to management in personnel matters including


 


·      Selection and interviewing of new staff;


 


·      Communications with staff on matters of terms & conditions;


 


·      Performance review and remuneration decisions;


 


·      Benefits administration support; and


 


·      Staff grievances and disciplinary matters.


 


2.             Termination


 


Notice Period


 


One month


 


2.1.          Term


 


Three months from the Commencement Date.


 


3.             Charges


 


£1,000 per month.


 


21

















 


SCHEDULE 3 – Finance/Accounting
Services


 


1.             Service Description


 


The provision
of advice and assistance to management in accounting and financial matters
including:


 


·      Preparation and filing of tax returns, including VAT;


 


·      Accounting for transactions under IFRS; and


 


·      Banking and financing.


 


2.             Termination


 


2.1.          Notice Period


 


One month


 


2.2.          Term


 


Six months from the Commencement Date.


 


3.             Charges


 


£1,000 per month.


 


22

















 


SCHEDULE 4 – Information
Technology Services


 


1.             Service Description


 


The provision
of advice and assistance to management in information technology matters,
including:


 


·              Help desk handling and monitoring of IT problems;


 


·              Resolution of desktop and network problems; and


 


·              Implementation of new IT equipment and network solutions.


 


These services
would be provided during UK business hours, subject to availability of staff,
following a request from nominated members of staff in the consumer.


 


2.             Termination


 


2.1.          Notice Period


 


One month


 


2.2.          Term


 


Nine months from the Commencement Date.


 


3.             Charges


 


Charges will
be levied per day of time spent on Consumer’s issues at a daily rate of £750
and reasonable evidence of time spent by employees of the Supplier in a
particular month will be provided with that month’s invoice.


 


Fixed costs of
leased telecommunications lines used by the Consumer will be charged to the
Consumer at the cost incurred, until such time as ownership of the lines is
novated to the Consumer. No guarantee is given on the availability of the
lines.


 


Any equipment
purchased at the Consumer’s request will be re-invoiced at cost.


 


23

















 


SCHEDULE 5 – Storage
of Bulk Drug Substance


 


The
parties to this Agreement undertake to use reasonable endeavours to negotiate
and agree terms relating to the provision of services for the storage of bulk
drug substances as soon as reasonably practicable and in any case within 30
days of the Commencement Date.


 


24