**Exhibit 10.3**

** **

**Confidential Treatment has been requested for portions of this exhibit.The copy filed herewith omits the information subject to the confidentialityrequest.  Omissions are designated as “***”.A complete version of this exhibit has been filed separately with theSecurities and Exchange Commission.**

 

**KBI BioPharma, Inc. Services Agreement**

 

ThisServices Agreement (“Agreement”) dated 5 September, 2008 between SenescoTechnologies, Inc, a Delaware company (“Client”) having its principal placeof business at 303 George Street, Suite 420, New Brunswick, NJ 08901and KBI BioPharma, Inc., a Delaware company (“KBI BioPharma”) having itsprincipal place of business at 1101 Hamlin Road, Durham, North Carolina 27704(each a “Party”, collectively the “Parties”).

 

Whereas:

 

Clientdesires KBI BioPharma to perform services in accordance with the terms of thisAgreement and KBI BioPharma desires to perform such services.

 

Inconsideration of the above statements, which form part of this Agreement, andother good and valuable consideration, the sufficiency and receipt of which arehereby acknowledged, the Parties hereto agree as follows:

 

1.             Performance

 

KBIBioPharma will perform the services (the “Services”) detailed in the proposaland/or scope-of-work set forth in Attachment One (the “Proposal”) on behalf ofClient in accordance with this Agreement herein incorporating the Proposal andincorporating the Quality Agreement (applicable only for projects with cGMPactivities) attached hereto as Attachment Two.  In the event of any conflict between thisAgreement and the Proposal, this Agreement shall control.  In the event of any conflict between theProposal and any applicable Quality Agreement, the Quality Agreement shall control.

 

Clientshall support and cooperate with the execution of the services and shall notengage in any act or omission, which may reasonably be expected to prevent ordelay the successful execution of the Services. Such support and cooperationshall include, but not be limited to, informing KBI BioPharma of globalregulatory strategy for development and approval of the product(s) to theextent relevant to the Proposal, prompt review and approval of documentsrequiring Client’s signature, timely delivery of methods and materials andprompt response to other similar issues.

 

2.             Compliance with ApplicableGovernment Regulations

 

KBIBioPharma will undertake the Services in compliance in all material respectswith applicable laws, rules, regulations and guidelines; provided that the U.S.Food and Drug Administration (FDA) current Good Manufacturing Practices (cGMP)shall apply if and only to the extent cGMP activities are specified in theProposal.

 

3.             Client Obligations

 

Unlessotherwise agreed to by the Parties in writing, Client is solely responsible, ineach case in accordance with the Proposal, for: (a) provision of completeand accurate scientific data regarding the Proposal; (b) provision of allinformation necessary to effect the reliable transfer of methods to KBIBioPharma; (c) provision of specific reagents, reference standards orother materials 

 

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necessaryfor execution of the Proposal; (d) if applicable, review and approvein-process and finished product test results to ensure conformity of suchresults with product specifications, regardless of which party is responsiblefor finished product release; (e) preparation of all submissions toregulatory authorities; and (f) performance of other obligations of Clientset forth in the Proposal.

 

4.             Hazardous Materials

 

Clientwarrants to KBI BioPharma that no specific safe handling instructions areapplicable to any substance or material provided by Client to KBI BioPharma,except as disclosed to KBI BioPharma in sufficient time for review and trainingby KBI BioPharma prior to delivery. Where appropriate or required by law Client shall provide a MaterialSafety Data Sheet and instructions for proper storage for all Client-providedmaterials, finished product and reference standards.

 

5.             Facility Visits and Audits

 

Client’srepresentatives may visit KBI BioPharma’s facilities during normal businesshours and with prior written notice to observe the progress of the Proposal,provided that such access does not compromise cGMP compliance or safety.  KBI BioPharma will assist Client inscheduling such visits, which will be conducted in a manner reasonably requiredto protect confidentiality of other clients.Client may conduct one qualityassurance audit per calendar year at no cost in accordance with the provisionsof the Quality Agreement (if applicable). Additional audits will be invoiced separately on a time and materialsbasis at the then current rate for such services.

 

6.             Regulatory Inspections

 

KBIBioPharma will promptly notify Client of any regulatory inspections directlyrelating to the Proposal in accordance with the terms of the Quality Agreement(if applicable) incorporated herein. Client accepts reasonable and documented costs charged by a regulatoryauthority for inspections directly related to the Proposal.

 

7.             Compensation

 

KBIBioPharma will invoice Client as set forth in the Proposal.  Payments are due thirty (30) days from dateof invoice.  Late payments are subject toan interest charge of one and one half percent (11⁄2%) per month or, if less, themaximum legal interest rate per month. Failure to bill for interest due shall not be a waiver of KBI BioPharma’sright to charge interest.

 

KBIBioPharma requires payment of an initial fee, specified in the proposal, priorto commencement of Services, to account for facilities preparation costs andresource allocation commitments with respect to Client’s project(s).  Unless otherwise provided in the applicableProposal, initial fees are nonrefundable (absent an uncured breach by KBI BioPharma)and are due and payable at signing, or in any event within five (5) days,without issuance of an invoice by KBI BioPharma.

 

8.             Taxes

 

Clientwill pay (or reimburse in full to KBI BioPharma) any sales, use, grossreceipts, compensating or other taxes, licenses or fees (excluding KBIBioPharma’s net income and franchise taxes) to be paid by KBI BioPharma to anytax jurisdiction arising from the Proposal.

 

9.             Change Orders

 

KBIBioPharma may revise the price for the Services as set forth in the Proposal if(a) Client revises KBI BioPharma’s responsibilities, the specifications,the Proposal instructions, procedures, assumptions, processes, test protocols,test methods, analytical requirements or otherwise requests a modification tothe Proposal, (b) Client’s requirements or any Client-provided 

 

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informationis inaccurate or incomplete and such inaccuracy or incompleteness results inincreased costs to KBI BioPharma, (c) necessitated by changes to applicablelaws, rules or regulations (d) if necessitated by an event outsidethe control of KBI BioPharma, including , without limitation, the eventsdescribed in section 16 (Force Majeure) or (e) for other such reasons setout in the Proposal.  Client will be notifiedof such revision via issuance of a Change Order detailing the reasons for theprice revision and subject to Client’s written consent.

 

10.           Shipment

 

Unlessotherwise agreed in writing by the parties, all products, raw materials,samples components or other materials shipped by KBI BioPharma are deliveredF.O.B. KBI BioPharma’s facilities.  KBIBioPharma shall package for shipment such product, raw materials, samples,components or other materials at Client’s expense (including insurance) and inaccordance with Client’s full written and reasonable instructions.

 

11.           Limitations of Liability

 

Notwithstandingany other provision in this Agreement, KBI BioPharma’s liability for losses toActive Pharmaceutical Ingredient, bulk drug product, intermediates, samples,reagents or other materials provided by Client, whether or not incorporatedinto finished product, shall in no event exceed the undisputed fair marketvalue thereof.

 

Notwithstandinganything herein to the contrary, **UNDER NOCIRCUMSTANCES SHALL EITHER PARTY BE ENTITLED TO INCIDENTAL, INDIRECT,CONSEQUENTIAL, EXEMPLARY OR SPECIAL DAMAGES, WHETHER OR NOT FORESEEABLE,ARISING IN CONNECTION WITH THE DEFAULT OR BREACH OF ANY OBLIGATION OF THE OTHERPARTY UNDER THIS AGREEMENT, THE PROPOSAL, THE QUALITY AGREEMENT OR ANYAPPENDICES OR DOCUMENTS RELATED THERETO, SUBJECT TO SECTION 15 HEREOF.**

 

12.           Warranties

 

KBIBioPharma warrants to Client that (i) it will render the Services in amanner that meets professional and industry standards for work of a similar natureand (ii) it will use commercially reasonable efforts to perform theServices and, to the extent applicable for cGMP services, the QualityAgreement. **EXCEPT AS EXPRESSLY STATED IN THISSECTION 12, KBI BIOPHARMA DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIEDWITH RESPECT TO THE SERVICES AND ANY MATERIALS PROVIDED HEREUNDER, AND CLIENTHEREBY WAIVES ALL SUCH WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUTLIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT ORFITNESS FOR A PARTICULAR PURPOSE.  **Exceptas otherwise provided in this Agreement, Client’s sole remedy and KBI BioPharma’sexclusive obligation under the foregoing warranty in this Section 12 isfor KBI BioPharma, at its option, to either re-perform or correct such services(without cost or expense to Client, including shipping conforming KBI BioPharmadeliverables to Client) or to refund to Client the amount paid therefore,including the cost of shipping.  Foravoidance of doubt, Client understands and agrees that the Services are experimentalin nature, that biopharmaceutical process development is subject to certaininherent risks, and as such nothing in this Agreement shall be construed as aguarantee or warranty by KBI BioPharma that the Services, or the materials,data, information of other results produced in connection therewith, will meetor otherwise satisfy any of the objectives, goals or targets stated in theProposal.

 

13.           Confidentiality

 

Allinformation disclosed by a party in connection with the Proposal shall be consideredconfidential information.  For theduration of the Proposal and for a period of five (5) years thereafter,neither Party shall disclose confidential information disclosed by the otherParty without prior written permission unless such information is (i) disclosedto an affiliate that is under similar obligation to 

 

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keepsuch information confidential; (ii) is or becomes publicly availablethrough no fault of the receiving Party; (iii) is disclosed by a thirdparty entitled to disclose it; (iv) is already known to the receivingParty as shown by its prior written records; or (v) is required to bedisclosed by any law, rule, regulation, order, decision, decree, subpoena orother legal process provided that the receiving Party shall give prompt noticethereof to the disclosing Party and shall cooperate with the disclosing Partyto obtain a confidentiality order or other similar protection.

 

14.           Intellectual Property

 

AllClient Materialsthat KBIBioPharma may have access to in order to perform the Services shall be ownedexclusively by the Client.  Nothing inthis Agreement shall be deemed to grant any rights to KBI BioPharma in anyClient Materials, other than the right for KBI BioPharma to perform the Servicesin accordance with the terms of this Agreement. For the purposes hereof, “Client Materials” means all Client proprietaryinformation, intellectual property and developments, including withoutlimitation, all patents, patent applications, know-how, inventions, design,concepts, technical information, manuals, instructions which are owned,licensed or controlled by Client relating to pharmaceutical or diagnosticproducts or the development, formulation, manufacture, processing, packaging,analysis or testing thereof.  In theevent that Client loses or forfeits its rights in such proprietary technologiesduring the term of this Agreement for any reason, Client shall provide noticeof same to KBI BioPharma immediately and this Agreement shall be subject toimmediate termination by KBI BioPharma at that time.

 

Anyand all ***, and ***, whether *** of this Agreement (“***”), including withoutlimitation any *** and *** which are based on Client Materials, shall be ***KBI BioPharma shall at Client’s request assign to Client or its designee all ofits rights and title in the Custom Intellectual Property, which assignment isaccepted by Client. Prior to the commencement of work hereunder, KBI BioPharmahas or shall enter into agreements with all employees and consultants involvedin the carrying out of this Agreement sufficient to provide Client with theassignments and licenses set forth in this Agreement.

 

Clientacknowledges that KBI BioPharma, and KBI BioPharma’s personnel, possess andcontinuously update proprietary inventions, tools, templates, models,methodologies, processes, know-how, trade secrets, improvements, and otherintellectual properties and other assets (including but not limited, toanalytical methods, procedures and techniques, computer technical expertise andsoftware, and business practices, related to the development andcommercialization of biopharmaceuticals, as well as other areas, which havebeen independently developed by KBI BioPharma and its personnel), certain ofwhich may be used, improved, modified or developed by KBI BioPharma in thecourse of a rendering Services (collectively, “KBI BioPharma Process Technology”).  Except as otherwise specified herein, KBIBioPharma, and KBI BioPharma’s personnel, shall retain exclusive right, titleand interest in and to all KBI BioPharma Process Technology and improvementsthereto.

 

15.           Indemnification

 

KBIBioPharma will indemnify and hold harmless Client, its affiliates and theirofficers, directors, agents, and employees against any loss, cost, damage orexpense (a “Loss”) from any lawsuit, action, claim, demand, assessment orproceeding brought by a third party (a “Claim”) arising directly or indirectlyfrom (i) the conduct of the Proposal as a result of KBI BioPharma’s grossnegligence or intentional misconduct or inaction or (ii) KBI BioPharma’smaterial breach or non-performance of this Agreement; provided that ifsuch Loss or Claim arises in whole or part from Client’s gross negligence orintentional misconduct or inaction, then the amount of such loss that KBIBioPharma shall indemnify Client for shall be reduced by an amount proportionalto Client’s responsibilities for such Loss as determined by a court ofcompetent jurisdiction.

 

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Clientwill indemnify and hold harmless KBI BioPharma, its affiliates and theirofficers, directors, agents, and employees against any Loss or Claim arisingdirectly or indirectly from (i) Client’s gross negligence or intentionalmisconduct or inaction, (ii) Client’s material breach or non-performanceof this Agreement, or (iii) Client’s use, handling, distribution or saleof the products or other deliverables resulting from a Proposal; providedthat if such Loss or Claim arises in whole or part from KBI BioPharma’s grossnegligence or intentional misconduct or inaction, then the amount of such lossthat Client shall indemnify KBI BioPharma for shall be reduced by an amountproportional to KBI BioPharma’s responsibilities for such Loss as determined bya court of competent jurisdiction.

 

16.           Force Majeure

 

Neitherparty will be liable for any failure to perform or for delay in performanceresulting from any cause beyond its reasonable control, including, withoutlimitation, acts of God, fires, floods, or weather, disease, strikes orlockouts, factory shutdowns, embargoes, wars, hostilities or riots, acts ofterrorism, shortages in transportation, government action or power failure,provided that such failure to perform shall be excused only to the extent ofand during such disability.  Any timespecified or estimated for completion of performance of Services falling dueduring or subsequent to the occurrence of any such events shall beautomatically extended for a period of ninety (90) days to recover from suchdisability.  If any part of the Proposalis invalid as a result of such disability, KBI BioPharma will, upon writtenrequest from Client, and at Client’s sole cost and expense, repeat that part ofthe Proposal affected by the disability.

 

17.           Use and Disposal

 

Clientrepresents and warrants to KBI BioPharma that it has legal title and/or a validlicense to materials, process patents and other intellectual property necessaryto conduct the Proposal and that KBI BioPharma’s performance of the Proposalwill not violate or infringe on the patents, trademarks, service marks orcopyrights of any third party.  Clientfurther represents and warrants to KBI BioPharma that it will hold, use and/ordispose of Product and materials provided by KBI BioPharma in accordance withall applicable laws, rules and regulations.

 

KBIBioPharma represents and warrants to Client that it has legal title and/or avalid license to those materials, process patents and other intellectualproperty not furnished by Client that are necessary to conduct the Services,and that KBI BioPharma’s use or application thereof in its performance of theServices will not violate or infringe on the patents, trademarks, service marksor copyrights of any third party.  KBIBioPharma further represents and warrants to Client that it will hold, useand/or dispose of information and materials provided by Client in accordancewith all applicable laws, rules and regulations.

 

18.           Independent Contractor

 

KBIBioPharma shall perform the Proposal as an independent contractor of the Clientand shall have complete and exclusive control over its facilities, equipment,employees and agents.  The relationshipbetween the parties shall not constitute a partnership, joint venture or agencynor constitute either party as the agent, employee or legal representative ofthe other.

 

19.           Publicity

 

NeitherParty will make any press release or public disclosure or use the name of theother party or its employees in any advertising or sales promotional materialwithout the other Party’s express prior written consent.

 

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20.           Authority

 

Clientgrants KBI BioPharma full authority to use any Client supplied materials orsubstances *** for the ***. Each party represents and warrants to the otherparty that it has the full right and authority to enter into this Agreement andto perform in accordance with the terms and conditions set forth herein.  Each Party further represents and warrants tothe other Party that it has obtained and will, at all times during the term ofthis Agreement, hold and comply with all licenses, permits and authorizationsnecessary to perform this Agreement as now or hereafter required under anyapplicable statutes, laws, ordinances, rules and regulations of the UnitedStates and any applicable foreign, state and local governments and governmentalagencies.

 

21.           Amendment and Precedence

 

TheProposal, the terms and conditions herein and any applicable Quality Agreementconstitute the entire agreement between the Parties relative to the Proposaland may not be modified without the mutual written consent of both Parties. TheParties agree that the terms and conditions contained in this Agreement shallprevail over any terms and conditions of any purchase order, acknowledgmentform or other instrument.  Each Party hashad the opportunity to consult with counsel in connection with the review,drafting and negotiation of this Agreement. Accordingly, the rule of construction that any ambiguity in thisAgreement shall be construed against the drafting Party shall not apply.

 

22.           Choice of Law

 

ThisAgreement between the Parties governed by these standard terms and conditionsshall be construed and enforced in accordance with the laws of and in the venueof the State of North Carolina except for its rules regarding conflict oflaws.

 

23.           Dispute Resolution

 

Ifa dispute arises between the Parties in connection with this Agreement, therespective presidents or senior executives of KBI BioPharma and Client shallfirst meet as promptly as practicable and attempt to resolve in good faith suchdispute.  If such parties cannot resolvethe dispute, then such dispute shall be referred to mediation in accordancewith the rules of the American Arbitration Association.  The Parties shall participate in themediation in a good faith attempt to settle the dispute.  The mediation shall be held in Durham County,North Carolina.  If mediation fails toresolve the dispute, such dispute shall be resolved in the jurisdiction of thedefendant by binding arbitration, by a neutral arbitrator, under the rules ofthe American Arbitration Association.

 

24.           Assignment

 

ThisAgreement between the Parties shall not be assigned in whole or in part byeither Party without the prior written consent of the other, which consentshall not be unreasonably withheld or delayed except that no such consent shallbe required for an assignment by a Party in whole or in part in connection witha merger or other business combination or sale of all or substantially allassets.

 

25.           Termination

 

Clientmay terminate this Agreement prior to completion of the Proposal by providingsixty (60) days written notice to KBI BioPharma.  Upon receipt of such notice of termination,KBI BioPharma will promptly scale down the affected portion of the Proposal andavoid (or minimize, where non-cancellable) any further related expenses.  In the event that Client elects to terminatefor reasons other than a material breach of this Agreement by KBI BioPharma thatKBI BioPharma fails to cure or commence such cure within thirty (30) days ofwritten notice of such breach, Client shall pay KBI BioPharma upon receipt ofinvoice all of its costs incurred or irrevocably obligated related 

 

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tothe Proposal, plus, as liquidated damages and not as a penalty, a cancellationfee equal to twenty percent (20%) of the uninvoiced portion of the totalProposal as of the effective date of termination.

 

Inthe event of a material breach of this Agreement by Client that is not curedafter a thirty (30) day written notice of such breach, KBI BioPharma mayterminate this Agreement prior to completion of the Proposal by giving sixty(60) days written notice to Client.  Uponsuch termination, KBI BioPharma will promptly scale down the affected portionof the Proposal and avoid (or minimize, where non-cancellable) any furtherrelated expenses.  In addition, Clientshall pay KBI BioPharma upon receipt of invoice all of its costs incurred orirrevocably obligated related to the Proposal, plus, as liquidated damages andnot as a penalty, a cancellation fee equal to twenty percent (20%) of theuninvoiced portion of the total Proposal as of the effective date oftermination.

 

Thetermination of this Agreement for any reason shall not relieve either Party ofits obligations to the other in respect of: (i) confidentiality; (ii) consentsfor advertising purposes and publications; (iii) indemnification; (iv) intellectualproperty; and (v) compensation for Services performed.

 

26.           Survival

 

Sections13, 14, 15, 18, 19, 22, 23 and this Section 26 of the terms and conditionsherein shall survive termination or expiration of this Agreement.

 

27.           Notice

 

Anynotice required to be given pursuant to the terms and provisions hereof shallbe in writing and shall be sent by certified or registered mail, postageprepaid with return receipt requested, or by nationally recognized overnightcourier, postage prepaid with return receipt requested, or by confirmedfacsimile (with printed confirmation of receipt), to the other Party at theaddress first indicated above, or at such other address or addresses indicatedin written notice by a Party from time to time hereafter.  Each notice shall be deemed sufficientlygiven, served, sent, or received for all purposes at such time as it isdelivered to the addressee or at such time as delivery is refused by theaddressee upon presentation.

 

28.           Severability

 

Inthe event that any one or more of the provisions of this Agreement should beheld for any reason by any court or authority having jurisdiction over thisAgreement, or over any of the Parties to this Agreement, to be invalid,illegal, or unenforceable, such provision or provisions shall be reformed toapproximate as nearly as possible the intent of the parties, and ifunreformable, shall be divisible and deleted in such jurisdictions; elsewhere,this Agreement shall not be affected.

 

29.           Waiver.

 

Thewaiver by either Party hereto of any right hereunder, or of any failure of theother Party to perform, or of any breach by the other Party, shall not bedeemed a waiver of any other right hereunder or of any other breach by orfailure of such other Party, whether of a similar nature or otherwise.  No remedy referred to in this Agreement isintended to be exclusive, but each shall be cumulative and in addition to anyother remedy referred to in this Agreement or otherwise available under law.

 

30.           Counterparts

 

ThisAgreement may be executed in duplicate and either copy or both copies areconsidered originals.

 

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InWitness Whereof, the Parties by their authorized representatives execute thisAgreement as of the date first above written

 

 
| **KBI BioPharma, Inc.** |                | **Client** |   |
|------------------------------|---------------------|------------|--------|
|                         |                |       |   |
| By:                     | /s/  KHURSHID IQBAL |       | By:    | /s/  Richard S. Dondero |   |
|                         |                |       |   |   |   |
| Name:                        | KHURSHID  IQBAL     |       | Name:  | Richard  S. Dondero |   |
|                         |                |       |   |   |   |
| Title:                       | Senior  VP and CSO  |       | Title: | VP  of Research and Development |   |

 

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