Document:

exv10w32

 

Exhibit 10.32

 

COUNTY COMMISSIONERS OF FREDERICK COUNTY,

EMERGENT BIOLOGICS INC.

a  n  d

MERCANTILE POTOMAC BANK

      

      

      

 

BOND PURCHASE AGREEMENT

Dated as of March 31, 2005

 

Frederick County, Maryland

Tax Increment Financing Bonds

(Dudrow Industrial Park Lot Three Development District)

Series 2005

 

 

BOND PURCHASE AGREEMENT

March 31, 2005

County Commissioners of Frederick County

Winchester Hall, 12 East Church Street

Frederick, Maryland 21701

Emergent Biologics Inc.

300 Professional Drive

Gaithersburg, Maryland 20879

Dear Sirs:

     The undersigned (herein called the “Purchaser”) hereby offers to enter into this Bond
Purchase Agreement with you for the purchase and sale of the Tax Increment Financing Bonds (Dudrow
Industrial Park Lot Three Development District) Series 2005 (the “Bonds”) described below. This
offer is made subject to acceptance by County Commissioners of Frederick County (the “Issuer”) and
Emergent Biologics Inc. (formerly Advanced BioSolutions, Inc.) (the “Company”). Upon such
acceptance, this Bond Purchase Agreement shall become effective in accordance with its terms and
shall become binding between you and the undersigned Purchaser.

     Section 1. Definitions. For purposes of this Agreement any word not
conventionally capitalized and not defined herein shall have the meaning indicated in the Bond
Authorization Legislation (hereinafter defined) or in the Proposal Letter dated February 11, 2005
which is attached hereto as Exhibit A and is by this reference incorporated herein (the
“Summary”) and, in addition, the following terms have the meanings specified below:

     “Agreement” means this Bond Purchase Agreement.

     “Bond Authorization Legislation” means the Ordinance No.05-02-363 enacted by the Board of
County Commissioners of Frederick County on March 1, 2005, and the Written Order of the President
of the Board of County Commissioners of Frederick County dated as of the Closing Date.

     “Closing” means the closing held on the Closing Date.

     “Closing Date” means March 31, 2005, or such later date as the Purchaser, the Company, and the
Issuer shall agree upon.

     “Commission” means the Securities and Exchange Commission.

 

 

     “Development Agreement” means the development agreement dated as of the Closing Date between
the Issuer and the Company.

     “Fiscal Year” means the consecutive 12-month period beginning on January 1st of each year and
ending on the December 31st of such year.

     “Governmental Body” means any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign.

     “Resolution” means Resolution No. 04-38 adopted on October 5, 2004, by the Board of County
Commissioners of Frederick County which created the Dudrow Industrial Park Lot Three Development
District and the Dudrow Industrial Park Lot Three Development District Special Fund.

     “Servicing Agreement” means the Servicing Agreement dated as of the Closing Date between the
Issuer, the Purchaser and the Company.

     Section 2. Sale and Purchase of Bonds.

     A. Sale of Bonds. Subject to the terms and conditions contained in this
Agreement (including the Summary), the Issuer hereby agrees to sell to the Purchaser, and the
Purchaser hereby agrees to purchase from the Issuer, for the account of the Purchaser an aggregate
of $300,000 principal amount of the Bonds at a purchase price of $300,000. The Bonds shall be in
substantially the same form as the specimen bond attached to this Agreement as Exhibit B
and shall be delivered as one fully registered certificated bond in the denomination or
denominations authorized under the Bond Authorization Legislation registered in the name of the
Purchaser or such other name as the Purchaser shall have designated in writing at or prior to the
Closing.

     B. Closing. The sale of the Bonds shall take place on the Closing Date at the
offices of Venable LLP, Towson, Maryland. The Purchaser shall make payment of the purchase price
for the Bonds on the Closing Date by certified or official bank check or by credit advice of
transfer to such account as the Issuer may have designated to the Purchaser in writing no later
than the third day prior to such Closing Date. At the Closing, against delivery by Purchaser of the
aggregate purchase price for the Bonds, the Issuer will deliver to Purchaser certificates
representing the Bonds, registered as specified in paragraph, and bearing the following legend:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. NO REGISTRATION OF TRANSFER OF SUCH SECURITIES
WILL BE MADE ON THE BOND REGISTER UNLESS SUCH TRANSFER IS MADE IN CONNECTION WITH AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR PURSUANT TO AN

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EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH ACT DOES NOT APPLY.

NEITHER THE ISSUER OF THIS BOND NOR THE BOND REGISTRAR OR TRANSFER AGENT FOR THIS
BOND MAY REGISTER THE TRANSFER OF, OR EXCHANGE THIS BOND FOR, A BOND OF THE ISSUE OF
BONDS IN A DENOMINATION WHICH IS LESS THAN THE DENOMINATION OF THIS BOND; PROVIDED
THAT EXCHANGE OF THIS BOND FOR ONE OR MORE BONDS IN DENOMINATIONS OF $100,000 OR
MORE SHALL BE PERMITTED IF SUCH EXCHANGE DOES NOT VIOLATE ANY APPLICABLE SECURITIES
LAWS INCLUDING SECURITIES AND EXCHANGE COMMISSION RULE 15c2-12.

NEITHER THE ISSUER OF THIS BOND NOR THE TRANSFER AGENT FOR THIS BOND MAY REGISTER
THE TRANSFER OF THIS BOND TO A TRANSFEREE UNLESS THE TRANSFEREE IS EITHER A
FINANCIAL INSTITUTION OR A SOPHISTICATED INVESTOR WHO IS EXPERIENCED IN BUSINESS AND
FINANCIAL MATTERS AND WHO IS ALSO ABLE TO EVALUATE THE RISKS AND MERITS OF INVESTING
IN SECURITIES SIMILAR TO THIS BOND.

     C. Right to Rescind. The Purchaser shall have the right to rescind or terminate this
Agreement at any time on or prior to the Closing Date or if the sale and purchase of the Bonds as
provided herein shall in the Purchaser’s reasonable judgment become impossible or impractical
because, since the date hereof: (1) any outbreak of major hostilities or any other national or
international calamity or crisis shall have occurred; (2) a general banking moratorium shall have
been declared by Federal or New York State authorities; or (3) trading on the New York Stock
Exchange shall have been suspended or minimum or maximum for prices shall have been required on the
New York Stock Exchange by such Exchange or by the Commission or any other Governmental Body.

     Section 3. Representations and Warranties of the Issuer. The Issuer represents and
warrants to the Purchaser that:

     A. Organization and Power. The Issuer is a body politic and corporate and political
subdivision of the State of Maryland. The Issuer is authorized and empowered by the provisions of
the Act to enter into the transactions contemplated by this Agreement.

     B. Authorization of Agreements. etc. The execution, delivery and performance of this
Agreement and the Bonds have been duly authorized by all necessary proceedings of the Issuer, and
such execution, delivery and performance do not and will not contravene,

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or constitute a default under, any provision of law, ordinance or regulation applicable to the
Issuer or any judgment, order, decree, agreement or instrument binding on it or result in the
creation of any lien or other encumbrance on any asset of the Issuer other than the restrictions on
the Dudrow Industrial Park Lot Three Development District Special Fund under the provisions of the
Act and the Resolution. This Agreement constitutes the valid and binding agreement of the Issuer,
and the Bonds, when duly executed and delivered by the Issuer in accordance with this Agreement and
the Bond Authorization Legislation, will constitute valid and binding obligations of the Issuer.

     C. Governmental Consents. All authorizations, consents and approvals of Governmental
Bodies required in connection with the execution and delivery by the Issuer of, or in connection
with the performance by the Issuer of its obligations under, this Agreement and the Bonds have been
obtained and are in full force and effect.

     D. No Litigation. There is no action, suit or proceeding pending, or to the Issuer’s
knowledge threatened, against or affecting the Issuer in any court or before any arbitrator or
before or by any Governmental Body calling into question the creation, organization or existence of
the Issuer, the title of any of its officers to their respective offices, the pledge or lien
securing the Bonds, the collection of any amounts pledged to the payment of the Bonds, or the power
of the Issuer to enter into the transactions contemplated hereby or wherein an unfavorable
decision, ruling or finding would adversely affect the transactions contemplated hereby or would
affect the enforceability of the Bonds or any other agreement or instrument to which the Issuer is
a party and that is to be used in connection with, or is contemplated by, this Agreement, nor to
the knowledge of the Issuer is there any basis therefor.

     E. Collection. In the event that the Company or any other owner fails to pay real
estate taxes on the Dudrow Industrial Park Lot Three Development District in a timely manner, the
County covenants to pursue such delinquency in accordance with its ordinary and customary
collection and tax sale procedures generally applicable to delinquent taxpayers.

     F. Grant of Security Interest. In order to secure the payment of the Bonds from the
Dudrow Industrial Park Lot Three Development District Special Fund (the “Special Fund”), the Issuer
hereby assigns, pledges and grants to the Purchaser a first lien security interest under the
Maryland Uniform Commercial Code in the Special Fund and all monies deposited therein, including
investment earnings thereon and all proceeds thereof. The Issuer authorizes the Purchaser to file
Financing Statements and to enter into Control Agreements, if the Purchaser deems necessary, in
order to perfect the Purchaser’s lien and security interest in the Special Fund and all monies
therein, including investment earnings thereon and all proceeds of the Special Fund.

     Section 4. Representations and Warranties of the Company. The Company represents and
warrants to the Issuer and the Purchaser that:

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     A. Organization and Power. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Maryland, and has all corporate powers
and all material governmental licenses, authorizations, consents and approvals required to carry on
its business as now conducted and to enter into and perform this Agreement.

     B. Authorization of Agreements. etc. This Agreement has been duly authorized by all
necessary corporate action on the part of the Company (no action by the stockholders of the Company
being required). This Agreement has been duly executed and delivered by the Company and constitutes
the valid and binding agreement of the Company except to the extent that enforceability may be
effected by any bankruptcy or insolvency proceeding filed by or against the Company and subject to
the exercise of judicial discretion in accordance with general principals of equity.

     C. INTENTIONALLY OMITTED.

     D. No Material Adverse Change. Since June 30, 2004, there has been no material
adverse change in the business, financial position, results of operations or prospects of the
Company, considered as a whole.

     E. Noncontravention. The execution, delivery and performance by the Company of this
Agreement does not and will not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or by-laws of the Company or of
any agreement, judgment, injunction, order, decree or other instrument binding upon the Company or
result in the creation of any lien or other encumbrance on any asset of the Company.

     F. Governmental Consents. No consent or approval is required to be obtained from,
and no action need be taken by, or document filed with, any Governmental Body in connection with
the execution, delivery and performance of this Agreement by the Company, or, if any such action is
required, the same has been duly taken, is in full force and effect and constitutes valid and
sufficient consent or approval therefor.

     G. Brokers. No person, corporation or other entity has, or as a result of any action
of or by the Company in connection with the transactions contemplated hereby and by the Resolution
and the Bond Authorization Legislation will have, any right, interest or valid claim against the
Purchaser for any commission, fee or other compensation as a broker or finder, or in any similar
capacity.

     H. No Litigation. As of the date hereof, there is no action, suit or proceeding
pending, or to the best of the Company’s knowledge threatened, against or affecting the Company in
any court or before any arbitrator or before or by any Governmental Body which in any manner raises
any question affecting the validity or enforceability of this Agreement, the Resolution, the Bond
Authorization Legislation, or any other agreement or instrument to which the Company is a party and
that is to be used in connection with,

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or is contemplated by, this Agreement, or which is likely to result in a materially adverse change
in the business, financial position or results of operations of the Company nor to the best of the
knowledge of the Company is there any basis therefor.

     Section 5. Representations and Warranties of the Purchaser. The Purchaser represents
and warrants to the Issuer that:

     A. Receipt of Information. The Purchaser has received the information with respect
to the Company, it affairs, and the Project which the Purchaser has requested and which the
Purchaser as an informed and experienced investor has deemed necessary in order to make an adequate
and thorough evaluation of the risks and rewards of an investment in the Bonds.

     B. Limited Obligation. The Purchaser acknowledges that the Bonds are limited
obligations of the Issuer and are payable solely from moneys deposited in the Dudrow Industrial
Park Lot Three Development District Special Fund created by the Issuer pursuant to Section 14-207
of the Act and the Resolution and that the Special Fund is subject solely to the limitations and
restrictions of Section 14-208 of the Act and the Resolution as to the use of moneys in that fund.
The Purchaser further acknowledges that the Bonds will be repaid solely by the Issuer’s pledge to
allocate and divide a portion of the property taxes actually received with respect to the real
property located within the Dudrow Industrial Park Lot Three Development District pursuant to
Section 14-206(3) of the Act and the Resolution and to pay that portion into the Special Fund. The
Bonds are not general obligations of the Issuer and the full faith and credit of the Issuer are not
pledged to the payment of the principal of and the interest and any redemption premium on the
Bonds. The Purchaser has no right to compel the levy of any taxes by the Issuer and the
insufficiency of monies in the Special Fund to pay the Bonds shall not constitute a default under
the Bonds.

     C. Review of Documents. The Purchaser has reviewed and approved the form of the
Bonds attached to this Agreement as Exhibit B, the Resolution, the Bond Authorization
Legislation, and such documents contain the terms which have been agreed to by the Purchaser.

     D. Financial Experience. The Purchaser is experienced in financial and business
matters, including the purchase and ownership of taxable and tax-exempt municipal obligations
payable solely from incremental real property tax revenues derived from limited owner development
districts and is able to evaluate the risks and merits of the investment in purchase of the Bonds.

     E. Access to Information. The Purchaser either has been supplied or has had access
to such information with regard to the Company, including financial statements and related
financial data, as it deems appropriate and to which a reasonable investor would attach
significance in making an investment decision to purchase securities such as the Bonds. The Company
has made itself available to the Purchaser at its request to

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enable Purchaser to determine those facts about the nature of Company’s business, the risks
attendant thereto, and the value of the security so as to enable Purchaser to make a knowledgeable
decision to purchase the Bonds. The Purchaser has not obtained any interest in real property as
security for the Bonds.

     F. No Reliance on the Issuer. Purchaser (1) has not relied upon the Issuer’s
decision to create the Dudrow Industrial Park Lot Three Development District and the Dudrow
Industrial Park Lot Three Development District Special Fund and to issue the Bonds as any
confirmation of the creditworthiness of the Company or the security for the Bonds, (2) has not
relied upon the Issuer to supply any information whatsoever about the Company, its business, its
prospects, or its financial affairs, and (3) has made the decision to purchase the Bonds solely on
the basis of its own independent judgment.

     G. Investment Purpose. The Purchaser is purchasing the Bonds for its own account,
with the purpose of investment and not with a view to the distribution or resale of the Bonds other
than to the Participants. The Purchaser has not offered, offered to sell, offered for sale, or sold
the Bonds by means of any form of general advertising and the Purchaser is not an “underwriter”
within the meaning of Section 2(11) of the Securities Act of 1933, as amended, and will not sell
the Bonds without registration under the Securities Act of 1933, as amended, or an exemption from
such registration.

     H. Authority to Execute. The Purchaser has full power and authority to execute this
Agreement and to purchaser or acquire the Bonds.

     I. Lawful Investment. The Purchaser has satisfied itself that the Bonds are a lawful
investment for the Purchaser under all applicable laws.

     J. No Credit Rating. The Purchaser acknowledges that no credit rating has been
sought or obtained with respect to the Bonds.

     K. No Continuing Disclosure. The Purchaser acknowledges that because (1) the
authorized denomination of the Bonds is $100,000 and (2) the sale of the Bonds is limited to no
more than 35 sophisticated persons none of whom is purchasing for more than one account with a view
toward distributing the Bonds, the Issuer shall have no ongoing continuing obligation in connection
with the Bonds under Securities and Exchange Commission Rule 15c2-12.

     Section 6. Conditions of Closing. The Purchaser’s obligation to purchase the Bonds
under this Agreement shall be subject to the satisfaction prior to the Closing Date or concurrently
with the Closing on such date, of the following conditions:

     A. Opinion of Counsel to the Company. The Purchaser shall have received favorable
opinions dated the Closing Date from Arent Fox PLLC, special counsel to the Company, satisfactory
to the Purchaser and the Purchaser’s counsel, to the effect that:

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     (1) the Company is a corporation duly incorporated, validly existing, in good standing
under the laws of Maryland, and duly authorized to transact business in Maryland, and
qualified to do business in Maryland, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals to carry on its business as
now conducted and to enter into and perform this Agreement and the Development Agreement;

     (2) this Agreement and the Development Agreement have been duly authorized by all
necessary corporate action on the part of the Company. This Agreement and the Development
Agreement have been duly executed and delivered by the Company and constitute valid and
binding agreements of the Company, subject to the customary qualifications for bankruptcy
and the application of equitable principles in actions to enforce contracts;

     (3) to the knowledge of such counsel upon reasonable inquiry, there are no actions,
suits or proceedings, pending or threatened against or affecting the Company or any
Subsidiary of the Company in any court or before any arbitrator or before or by any
Governmental Body in which there is a reasonable possibility of an adverse decision which
would materially adversely affect the business, financial position or results of operations
of the Company and its Subsidiaries, or which in any manner raises any question affecting
the validity of this Agreement or the Development Agreement;

     (4) the execution, by the Company of this Agreement and the Development Agreement do
not contravene, or constitute a default under, any provision of applicable law or regulation
or of the certificate of incorporation or by-laws of the Company or any agreement, judgment,
injunction, order, decree or other instrument binding upon the Company and known to such
counsel after reasonable inquiry, or result in the creation of any lien or other encumbrance
on any asset of the Company; and

     (5) no consent or approval is required to be by, or document filed with, any
Governmental Body in connection with the execution, delivery and performance of this
Agreement or the Development Agreement by the Company, or, if such action is required, the
same has been duly taken, is in full force and effect and constitutes valid and sufficient
authorization therefor.

     B. Opinion of Counsel to Issuer. The Purchaser shall have received a favorable
opinion dated the Closing Date from Venable LLP, Baltimore, Maryland, in the form attached to this
Agreement as Exhibit C.

     C. Representations and Warranties. The representations and warranties of the Issuer
and the Company contained herein shall be true on and as of the Closing Date with the same effect
as though such representations and warranties had been made on and as of the Closing Date.

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     D. Performance; No Default. The Company shall have performed and complied with all
agreements and conditions herein required to be performed or complied with by it prior to or on the
Closing Date, and at the time of the Closing no event of default or default shall have occurred and
be continuing with respect to the Development Agreement and the Bonds.

     E. Compliance Certificate. Unless this Agreement is dated the Closing Date, the
Company shall have delivered to the Purchaser on the Closing Date a certificate, dated the Closing
Date, signed by its President or one of its Vice Presidents, certifying that the conditions
relating to it in Section 6.C and Section 6.D have been fulfilled.

     F. Bond Authorization Legislation. The Bond Authorization Legislation shall have
been duly adopted, enacted, and executed by the duly elected or appointed officials of the Issuer,
shall be in full force and effect, and shall not be subject to any referendum.

     G. Other Documents and Proceedings. The Purchaser shall have received all other
documents and opinions as the Purchaser may have requested relating to (1) the existence of the
Company, (2) the corporate and governmental authority for and validity of this Agreement, Bond
Authorization Legislation, the Development Agreement, and the Bonds, and (3) other matters relevant
to the issuance and sale of the Bonds hereto. All proceedings to be taken in connection with the
transactions contemplated by this Agreement, the Resolution, and the Bond Authorization
Legislation, and all documents, opinions and certificates incident to such transactions shall be
satisfactory in form and substance to the Purchaser.

     H. The Bonds. The Purchaser shall have received the duly authenticated Bond in
compliance with the provisions of Section 2.A hereof.

     I. No Legal Action. There shall not be pending before any court or before any
administrative body any action, proceeding or investigation which is directed toward challenging,
restraining, prohibiting or invalidating the transactions contemplated hereby, nor shall the
Company have received from any Governmental Body official notification in writing objecting to the
sale of the Bonds.

     J. The Servicing Agreement. The Purchaser shall have received a duly executed copy
of the Servicing Agreement.

     Section 7.
INTENTIONALLY OMITTED.

     Section 8. A. Environmental Matters. The Company represents and warrants that it is
in compliance with the terms and provisions of the Loan Agreement and Deed of Trust between it and
the Purchaser dated October 12, 2004, in respect to Hazardous Materials (as defined in those
documents).

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               B. Compliance. With respect to the Project, the Company will at all times comply in
all respects with all applicable laws (whether statutory, common law or otherwise), rules,
regulations, orders, permits, licenses, ordinances, judgments, or decrees of any Governmental Body,
including, without limitation, all laws regarding public health or welfare, environmental
protection, water and air pollution, composition of product, underground storage tanks, toxic
substances, hazardous wastes, hazardous substances, hazardous materials, waste or used oil,
asbestos, occupational health and safety, nuisances, trespass, and negligence, except to the extent
the failure to comply would not materially adversely affect the Borrower’s properties (including
the Project), operations or financial conditions.

     Section 9. Payment of Certain Expenses and Taxes by the Company. Whether or not the
transactions contemplated by this Agreement shall be consummated, the Company will:

     (1) pay all reasonable expenses incurred by the Purchaser and the Issuer incident to
the transactions contemplated by this Agreement or in connection with any enforcement,
modification, amendment, or alteration of this Agreement, the Development Agreement, the
Bonds, the Resolution, or the Bond Authorization Legislation (whether or not any such
enforcement, modification, amendment or alteration becomes effective), including, but not
limited to, any out-of-pocket expenses incurred by the Purchaser or the Issuer and the fees,
charges and disbursements of counsel for the Issuer and for the Purchaser; and

     (2) pay and hold the Purchaser and the Issuer harmless against any and all liability
with respect to amounts payable as a result of (a) any taxes which may be determined to be
payable in connection with the execution and delivery of the Bonds, this Agreement, the
Development Agreement, Resolution, or the Bond Authorization Legislation, or any
modification, amendment or alteration, of the terms or provisions of any of the Bonds, this
Agreement, Development Agreement, the Resolution, or the Bond Authorization Legislation, (b)
any interest or penalties resulting from any delays in paying any of such expenses, charges,
disbursements, liabilities or taxes, and (c) any advisory, placement, brokers’, finders’ or
other similar fees incurred in connection with the sale of the Bonds hereunder.

The obligations of the Company under this Section shall survive the payment of the Bonds.

     Section 10. Survival of Covenants; Successors and Assigns. All covenants,
agreements, representations and warranties made by the Company or the Purchaser in this Agreement
or the Development Agreement, and in certificates or other documents delivered pursuant to them,
shall survive the delivery of the Bonds to the Purchaser and shall continue in full force and
effect, until all the Bonds are paid in full and thereafter to the extent provided by Section 9.
All such covenants, agreements, representations and

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warranties shall be binding upon any successors and assigns of the Company or the Purchaser, as the
case may be, and shall inure to the benefit of their successors and assigns.

     Section 11. A. No Oral Change; Amendments in Writing. This Agreement may not be
changed orally, but only by an agreement in writing and signed by the party against whom
enforcement of any waiver, change, modification or discharge is sought.

     B. No Assignment of Agreement. The Company may not assign any of its rights or
obligations under this Agreement without the Purchaser’s written consent, and the Purchaser shall
not be required to purchase the Bonds under this Agreement except from the Issuer.

     C. Conflicts. In the event of a conflict between the Summary and the terms hereof,
the terms of this Agreement shall control.

     Section 12. Notices. Except as otherwise provided in this Agreement, whenever notice
is required to be given pursuant to the provisions of this Agreement or the Support Agreement, such
notice shall be in writing and shall be mailed by first class mail postage prepaid addressed as set
forth in the Servicing Agreement at the address set forth adjacent to the signatures of the parties
hereto.

     Section 13. Law Governing. This Agreement shall be construed in accordance with and
governed by the laws of the State of Maryland.

     Section 14. Headings. The headings of the sections and subsections of this Agreement
are inserted for convenience only and shall not be deemed to constitute a part of this Agreement.

     Section 15. Immunity of Officers, Employees and Members of Issuer. No recourse shall
be had for the payment of the principal of or premium or interest on any of the Bonds or for any
claim based thereon or upon any obligation, covenant or agreement in this Agreement contained
against any past, present or future officer, director, member, employee or agent of the Issuer or
of any successor political subdivision, as such, either directly or through the Issuer or any
successor political subdivision, under any rule of law or equity, statute or constitution or by the
enforcement of any assessment or penalty or otherwise, and all such liability of any such officers,
directors, members, employees or agents as such is hereby expressly waived and released as a
condition of and consideration for the execution of this Agreement and the issuance of the Bonds.

     Section 16. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.

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     If you agree with the foregoing, please sign two copies of this Agreement in the space
provided below for your acceptance and return one copy so executed to the undersigned Purchaser,
whereupon this Agreement shall then become a binding agreement between the Purchaser, the Issuer,
and the Company.

[SIGNATURES BEGIN ON THE NEXT PAGE]

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The foregoing is hereby accepted as of the date set forth above.

	 	 	 	 	 
	 	Very truly yours,

MERCANTILE POTOMAC BANK

 	 
	 	By:  	/s/ Christopher A. Hesen
 	 
	 	 	Name:  	Christopher A. Hesen 	 
	 	 	Title:  	Senior Vice-President 	 
	 

[Page 1 of 3 signature pages of Bond Purchase Agreement]

 

 

The foregoing is hereby accepted as of the date set forth above.

EMERGENT BIOLOGICS INC.

	 	 	 	 	 
	By:

	 	/s/ Fuad El-Hibri
 

Name:
	 	 
	 

	 	Title:	 	 

[Page 2 of 3 signature pages of Bond Purchase Agreement]

 

 

The foregoing is hereby accepted as of the date set forth above.

COUNTY COMMISSIONERS OF FREDERICK COUNTY

	 	 	 	 	 
	By:

	 	/s/ John L. Thompson Jr.
 

John L. Thompson, Jr.
	 	 
	 

	 	President of the Board of County Commissioners	 	 

[Page 3 of 3 signature pages of Bond Purchase Agreement]

 

 

EXHIBIT A

SUMMARY OF TERMS

 

 

MERCANTILE POTOMAC BANK

                    February 11, 2005

Board of County Commissioners of Frederick County

12 East Church Street

Winchester Hall, MD

Dear Lady and Gentlemen:

     The Mercantile Potomac Bank is pleased to advise you that we have approved your request
associated with the planned Tax Increment Financing (“TIF”) for economic development purposes as
required by the State of Maryland’s Department of Business and Economic Development.

	 	 	 
	Purchaser:

	 	Mercantile Potomac Bank (“Bank”)
	 
	 	 
	Issuer:

	 	County Commissioners of Frederick County (“County” or “Issuer”).
	 
	 	 
	Amount:

	 	Not to exceed $325,000.00 
	 
	 	 
	Purpose:

	 	To fund certain allowable expenditures, including the acquisition of land and site work for the Dudrow Industrial
Park, Lot Three Development District also known as the Units 1, 2 & 3 Wedgewood IV Land Condo.
	 
	 	 
	Term:

	 	Five years.
	 
	 	 
	Repayment:

	 	Annual payments of principal and interest beginning on December 1, 2005 and annually thereafter due on December 1st of each year.
	 
	 	 
	Funding:

	 	Funding will occur on or before March 31, 2005. 
	 
	 	 
	Interest Rate:

	 	Fixed rate for the five year term at 6.625% (taxable) or the 4.08% (tax- exempt).
	 
	 	 
	Facility/
	 	 
	Collateral:

	 	The facility (“Bond”) will be a limited obligation of the County under which
ninety percent (90%) of the incremental increase of real estate taxes
(“Incremental Taxes”) from the TIF district will be deposited in a a special
fund and pledged to pay the Bond. Subject to the county’s consent, in the
event of a default or insufficient debt service coverage, 100% of the
Incremental Taxes then remaining in the special fund created to hold the
Incremental Taxes will be pledged for debt service requirements and
collection expenses of the Bond.

 

 

MERCANTILE POTOMAC BANK

Other Conditions:

	 	1.	 	Ninety percent (90%) of the Incremental Taxes will be pledged to the
debt service assigned to the Bond so that a minimum ratio of 1.0:1.0 of taxes
pledged (as a result of final tax assessed value on the property) to annual
debt service will be maintained. See Schedule A example of calculation.

	 	2.	 	The Bond will also be subject to a Bond Purchase Agreement entered into
by the Purchaser, the County and Emergent Biologics Inc. (“Emergent”), which
will include the terms and provisions set forth above as well as other terms
and conditions reasonably acceptable to the Issuer and Purchaser including the
Issuer’s covenant to treat the Property in a manner consistent with that of
other delinquent taxpayers and to offer the Property for sale under its tax
lien in the ordinary course of its tax collection activities.

General Conditions:

	 	1.	 	Any material change in the conditions contained in this letter, as determined
by the Purchaser in its sole discretion, will allow the Purchaser to terminate this
letter agreement by written notice to the County, and thereupon Purchaser shall have no
further obligations to the County to purchase the bond or otherwise perform any
obligation set forth herein or in other related document or agreement.
	 
	 	2.	 	Documentation: All documents evidencing or securing the Bond and any
other Liabilities (collectively, the “Bond Documents”) or relating to any such documents
and such other documents, instruments, opinions, assurance, consents, and approvals as
the Purchaser may deem necessary shall be subject to the approval of and shall be in
form and content satisfactory to the Purchaser and its counsel in their sole but
reasonable discretion. In particular, such documents may include, without limitation,
but subject to existing and future Deeds of Trust affecting the property, in the sole
discretion of the Purchaser and its counsel, provision for application of condemnation
proceeds for restoration of the improvements.
	 
	 	3.	 	Expenses: Emergent shall pay all fees, expenses, costs and charges with
respect to the issuance of the Bond, or in any way connected therewith, including, but
not limited to attorney’s fees and expenses (including Purchaser’s counsel’s fees and
expenses). The Issuer’s counsel will prepare the Bond Documents. Such expenses may be
funded by the proceeds of the Bond.
	 
	 	4.	 	Interest Computation: Late Charges: Interest on the Bond shall be
computed on the basis of thirty (30) day months and a 360-day year. Upon default under
the Bond documents, a late charge equal to the lesser of five percent (5%) per month or
the interest rate otherwise chargeable for the delinquent tax payments based upon the
incremental tax payment due for that current tax

 

 

MERCANTILE POTOMAC BANK

	 	 	 	year shall be payable from incremental taxes or other funds then available in the
special fund, which charge should accrue if any payment of principal or interest
pursuant to the bond shall be more than fifteen (15) days delinquent and such interest
shall continue to accrue until the default is cured or the Bond is paid in full.
	 
	 	5.	 	Evidence of Compliance, etc. Evidence satisfactory to the Purchaser that:

	 	i.	 	The Bond and actual use of the Property complies in all material
respects with all laws, ordinances, rules and regulations of all
governmental authorities having jurisdiction over the same.
	 
	 	ii.	 	All requisite approvals for occupancy of the facility have been validly
granted without qualifications; and
	 
	 	iii.	 	There are no actions or proceedings pending before any court or
administrative agency or governmental body at the time which materially and
adversely affect the Issuer’s or Emergent ability to honor its obligations
under the Bond

	 	6.	 	Hazardous Materials: Emergent shall represent and warrant that it is in
compliance with the provision of the Deed of Trust and Loan Agreement dated October 12,
2004 between it and the Bank in respect to Hazardous Materials as therein defined.
	 
	 	7.	 	Assignment: Except to reimburse Emergent for qualifying expenditures, the
proceeds of the Bond shall not be assigned by the Issuer without the prior written consent
of the Purchaser, and any such assignment without such consent shall be void and, at the
option of the Purchaser, be deemed a default, hereunder. The Bond and any other bond or
documentation connected with or contemplated by this transaction may be placed, assigned,
serviced, and/or participated out (either in whole or in part) by the Purchaser and/or its
successors and assigns.
	 
	 	8.	 	Termination: The Purchaser may terminate this commitment if, except as may be
otherwise provided herein, the Bond or any other feature of the transaction has been or is
misrepresented by the Issuer, or any third party in the bond application or otherwise, or if
any adverse change, in the sole but reasonable judgment of the Purchaser, shall have
occurred with respect to any part of this transaction.
	 
	 	9.	 	Actions by the Purchaser: No statement, agreements, or representations oral or
written, which may have been made to the Issuer or any third party or to any employee or
agent of the Issuer, either by the Purchaser or by any employee, agent, or broker acting on
the Purchaser’s behalf, with respect to the Bond, shall be of any force or effect, except to
the extend stated in this commitment, and all prior agreements and representations with
respect to the Bond are merged herein. This commitment may not be changed except by written
agreement signed by the Issuer and the Purchaser.

 

 

MERCANTILE POTOMAC BANK

     We are very pleased to be able to make this commitment and we look forward to working with the
County and Emergent on the issuance of the Bond.

With regards,

/s/ Christopher A. Hesen

Christopher A. Hesen

Senior Vice President

Agreed and accepted this ___day of February 2005.

	 	 	 	 	 
	Witness:	 	Board of County Commissioners Of

Frederick County
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 

 

 

MERCANTILE
POTOMAC BANK

Schedule A

TIF Bond Calculations For

Emergent BioLogics Inc. Facility

Assessed Market Value:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Current Estimate	 
	As of January 1, 2004
	 	Land
	 	$	773,600.00	 
	As of July 1, 2005
	 	Building
	 	$	18,716,062.00	 
	 
	 	 	 	 	 	 	 	 
	     Assessment Ratio:	 	 	100	%
	     Assessable Base:	 	$	18,716,062.00	 
	     Less Original Assessable Base:	 	 	(773,600.00	)
	 
	 	 	 	 	 	 	 
	     Adjusted Assessable Base:	 	$	17,942,462.00	 

Tax Calculation:

	 	 	 	 	 
	County Tax Rate
	 	$	1.00	 
	County Base Tax Revenue
	 	$	7,736.00	 
	Tax Increment Revenue
	 	$	179,424.00	 
	Pledged Allocation @ 90%
	 	$	161,481.00	 

Bond Repayment Scenario:

	 	 	 	 	 
	Taxable Rate	 	 	 	Tax-Exempt Rate
	 
	 	 	 	 
	Rate

	 	6.625% 
	 	4.08% 
	Principal

	 	$325,000.00 
	 	$325,000.00 
	Term

	 	60 Months 
	 	60 Months 
	P&I

	 	$78,669.73 
	 	$ 73,287.33 
	 
	 	 	 	 
	Coverage

	 	2.053X 
	 	2.203X 

 

 

EXHIBIT B

SPECIMEN BOND

 

 

			
	 	 	 
	No. R-1
	 	$300,000.00

UNITED STATES OF AMERICA

STATE OF MARYLAND

FREDERICK COUNTY, MARYLAND

TAX INCREMENT FINANCING BOND

(DUDROW INDUSTRIAL PARK LOT THREE DEVELOPMENT DISTRICT)

SERIES 2005

	 	 	 	 	 
	Annual Interest Rate	 	Maturity Date	 	Bond Date
	 	 	 	 	 
	4.08%
	 	December 1, 2009
	 	March ___, 2005

Registered Owner:     Mercantile Potomac Bank

Principal Amount:     Three Hundred Thousand Dollars

     County Commissioners of Frederick County, a body politic and corporate organized and existing
under the Constitution and laws of the State of Maryland (the “County”), hereby acknowledges itself
indebted for value received and, promises to pay to the Registered Owner shown above, or his
registered assigns, on December 1, 2005 and on each December 1 thereafter up to and including the
Maturity Date shown above unless this bond shall have been called for prior redemption and payment
of the redemption price made or provided for, the Principal Amounts set forth on Schedule A
attached hereto and made a part hereof (“Schedule A”) and to pay interest on the outstanding
principal amount hereof from the date hereof in the amounts set forth on Schedule A.

     Interest on this Bond shall be paid at the Annual Interest Rate shown above, payable December
1, 2005 and annually thereafter on December 1 in each year (the “Interest Payment Dates”) until
payment of such Principal Amount shall be discharged in the amounts set forth on Schedule A. Such
interest shall be paid to the person in whose name this bond is registered on the registration
books maintained by the Servicer (as hereafter defined) who shall serve as bond registrar for the
Bond (the “Bond Registrar”) at the close of business on the 15th calendar day of the month next
preceding each Interest Payment Date (the “Record Date”).

     Interest on this Bond shall be computed on the basis of thirty (30) day months and a 360-day
year. If any payment due hereunder is not received within fifteen (15) days after its due date, a
late charge equal to the lesser of one percent (1%) per month or the interest rate then chargeable
by the County for delinquent tax payments shall accrue on such late payment and shall be payable
from any late payment proceeds received by the County on the incremental taxes pledged for
repayment of this Bond.

 

 

     This Bond is a limited obligation of the County, payable as provided in the Ordinance,
and the full faith and credit and unlimited taxing power of County Commissioners of Frederick
County are not pledged to the payment of the principal of this Bond and of the interest to
accrue hereon.

     Principal of, premium, if any, and interest on this Bond are payable in such money of the
United States of America as is lawful at the time of payment.

     This Bond is a single bond, limited in aggregate principal amount to $300,000.00, dated March
    , 2005 and known as “Frederick County, Maryland, Tax Increment Financing Bond (Dudrow
Industrial Park Lot Three Development District) Series 2005 (the “Bond”). The Bond is issued as a
registered bond, without coupons, in the denomination of $300,000.00. The Bond is numbered No. R-1
and matures on December 1, 2009.

     The Bond shall be subject to redemption at the option of the County in whole or in part from
funds available to the County for such purpose at any time without penalty or premium.

     Notice having been given in the required manner hereunder, the Bond or portion of the Bond
called for redemption shall, on the redemption date designated in such notice, become and be due
and payable at the redemption price provided for redemption of such Bond or portion of such Bond on
such date. On the date so designated for redemption, notice having been given as required hereunder
and monies for payment of the redemption price being held in separate accounts by the Servicer or
the County in trust for the Owner of the Bond or portions thereof to be redeemed, interest on the
Bond or portion of Bond shall cease to be entitled to any lien, benefit or security under the Bond
Documents, and the Owner of such Bond or portion of such Bond shall have no right in respect
thereof except to receive payment of the redemption price thereof and, upon presentation and
surrender of the Bond to the Servicer, to receive a new Bond for any unredeemed portion of the
Bond.

     The Bonds will be transferable only upon the Bond Register by the Bond Registrar. Any Bond
presented for transfer, exchange, registration, or redemption shall be accompanied by a written
instrument or instruments of transfer or authorization for exchange, in form and with guaranty of
signature satisfactory to the Bond Registrar, duly executed by the Registered Owner thereof or by
his duly authorized attorney. Upon any transfer or exchange, the County shall execute and the Bond
Registrar shall authenticate and deliver in the name of the Registered Owner or the transferee or
transferees, as the case may be, a new registered Bond or Bonds of any of the authorized
denominations in an aggregate principal amount equal to the principal amount of the Bond exchanged
or transferred and maturing on the same date and bearing interest at the same rate. In each case,
the County and the Bond Registrar may require payment by the Registered Owner requesting the
exchange or transfer of any tax, fee or other governmental charge, shipping charges and insurance
that may be required to be paid with respect thereto, but otherwise no charge shall be made to the
Registered Owner for the exchange or transfer.

-2-

 

     THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. NO REGISTRATION OF TRANSFER OF SUCH SECURITIES WILL BE MADE ON
THE BOND REGISTER UNLESS SUCH TRANSFER IS MADE IN CONNECTION WITH AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT
OR SUCH ACT DOES NOT APPLY.

     NEITHER THE ISSUER OF THIS BOND NOR THE BOND REGISTRAR OR TRANSFER AGENT FOR THIS BOND MAY
REGISTER THE TRANSFER OF, OR EXCHANGE THIS BOND FOR, A BOND OF THE ISSUE OF BONDS IN A DENOMINATION
WHICH IS LESS THAN THE DENOMINATION OF THIS BOND; PROVIDED THAT EXCHANGE OF THIS BOND FOR ONE OR
MORE BONDS IN DENOMINATIONS OF $100,000 OR MORE SHALL BE PERMITTED IF SUCH EXCHANGE DOES NOT
VIOLATE ANY APPLICABLE SECURITES LAWS INCLUDING SECURITIES AND EXCHANGE COMMISSION RULE 15C2-12.

     NEITHER THE ISSUER OF THIS BOND NOR THE TRANSFER AGENT FOR THIS BOND MAY REGISTER THE TRANSFER
OF THIS BOND TO A TRANSFEREE UNLESS THE TRANSFEREE IS EITHER A FINANCIAL INSTITUTION OR A
SOPHISTICATED INVESTOR WHO IS EXPERIENCED IN BUSINESS AND FINANCIAL MATTERS AND WHO IS ALSO ABLE TO
EVALUATE THE RISKS AND MERITS OF INVESTING IN SECURITIES SIMILAR TO THIS BOND.

     The Bond Registrar shall not be required to transfer or exchange any Bond after the mailing of
notice calling such Bond or portion thereof for redemption; provided, however, that this limitation
shall not apply to any portion of a Bond which is not being called for redemption.

     The Bond is issued pursuant to the authority of Article 41, Section 14-201 of the Annotated
Code of Maryland and in accordance with Resolution No. 04-38 of the Board of county commissioners
of the County adopted on October 5, 2004 and the Ordinance (as hereafter defined).

     It is hereby certified and recited that each and every act, condition and thing required to
exist, to be done, to have happened and to be performed precedent to and in the issuance of this
Bond, does exist, has been done, has happened and has been performed in full and strict compliance
with the Constitution and laws of the State of Maryland and Ordinance No. 05-02-363 of the Board of
County Commissioners of Frederick County, enacted on March 1, 2005 authorizing the issuance of the
issue of Bonds, of which this bond is the sole Bond (the “Ordinance”) and that said issue of Bonds,
together with all other indebtedness of the County, is within every debt and other limit prescribed
by the Constitution and laws of said State.

-3-

 

     IN WITNESS WHEREOF, the County has caused this Bond to be executed in its name by
the President of the Board of County Commissioners of Frederick County and attested by its
County Manager, and has also caused its corporate seal to be printed hereon.

	 	 	 	 	 	 	 
	ATTEST:	 	COUNTY COMMISSIONERS OF FREDERICK COUNTY
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 

	 	Douglas D. Browning
	 	 	 	John L. Thompson, Jr.
	 

	 	County Manager
	 	 	 	President, Board of County Commissioners of Frederick
County

-4-

 

ASSIGNMENT

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto (Tax
Identification or Social Security No.                                                             ) the within bond and all rights
thereunder, and does hereby constitute and appoint                                                             attorney to
transfer the within bond on the books kept for the registration thereof, with full power of
substitution in the premises.

Dated:                                             

	 	 	 
	Signature Guaranteed:
	 	 
	 
	 	 
	 

	 	 
	NOTICE: Signatures must be guaranteed by
a member firm of the New York Stock Exchange
or a commercial bank or trust
company

	 	(Signature of Registered Owner)
NOTICE: Signature must correspond with the name of the
Registered Owner of the within bond as it appears on
the face of the within bond in every particular,
without alteration or enlargement or any change
whatever

-5-

 

SCHEDULE A

BOND SCHEDULE

	(i)	 	Bond Identifying Number: R-I
	 
	(ii)	 	Company Name: EMERGENT BIOLOGICS INC.
	 
	(iii)	 	Property Address: 7114, 7116 and 7118 Geoffrey Way,
Frederick, Maryland 21701
	 
	(iv)	 	(a)  Original Loan Term: 5 years
	 
	 	 	(b)  Original Final Maturity: December 1, 2010
	 
	(v)	 	Bond Interest Rate: 4.08% per annum
	 
	(vi)	 	First Monthly Payment Due Date: December 1, 2005
	 
	(vii)	 	Annual Payment Amount: 12/01/05 $64,113.84; each 12/01 thereafter $67,649.84 [+
Annual Servicing Fee $0]
	 
	(viii)	 	Original Principal Balance: $300,000.00

-6-

 

EXHIBIT C

BOND OPINION

 

 

	 	 	 	 	 	 	 
	VENABLEllp

	 	210 Allegheny Avenue
	 	Telephone 410-494-6200
	 	www.venable.com
	 

	 	Post Office Box 5517
	 	Facsimile 410-821-0147	 	 
	 

	 	Towson, Maryland 21285-5517	 	 	 	 

March                     , 2005

County Commissioners of Frederick County

Winchester Hall

12 E. Church Street

Frederick, Maryland 21701

Mercantile Potomac Bank

702 Russell Avenue — Suite 200

Gaithersburg, Maryland 20877

			
	     Re:     	 	$300,000 Frederick County, Maryland

Tax Increment Financing Bond

(Dudrow Industrial Park Lot Three Development District) Series 2005

Ladies and Gentlemen:

     We have acted as bond counsel to County Commissioners of Frederick County, a body
politic and corporate and a political subdivision of the State of Maryland (the “Issuer”),
in connection with the issuance of the above-referenced bonds which are issued as a single,
fully registered bond in the amount of $300,000 (the “Bond”) dated the date hereof.

     In such capacity, we have examined the law and such certified proceedings and other
papers as we deem necessary to render this opinion.

     The scope of our engagement as bond counsel extends solely to an examination of the
facts and law incident to rendering the opinion specifically expressed herein.

     Unless the context clearly indicates otherwise, each capitalized term used in this
opinion shall have the same meaning as set forth in the Bond and in the Purchase Agreement.

     The Bond has been authorized and issued pursuant to the Tax Increment Financing Act,
Sections 14-201 through 14-214 of Article 41 of the Annotated Code of Maryland, as amended
(the “Act”), Resolution No. 04-38 of the Issuer adopted on October 5, 2004 (the
“Resolution”), Ordinance No. 05-02-363 enacted on March 1, 2005 (the “Ordinance”), a
Written Order dated of even date herewith executed by the President of the Board of County
Commissioners of Frederick County (the “Written Order”) and under a Bond Purchase Agreement
among the Issuer, Emergent BioLogics Inc. (the “Developer”) and Mercantile Potomac Bank
(the “Purchaser”) dated as of even date herewith (the “Purchase Agreement”). The Bond is a
limited obligation of the Issuer payable solely from tax revenues of the Issuer allocated
and paid to the Special Fund (as defined in the Resolution).

 

 

VENABLEllp

County Commissioners of Frederick County

March                     , 2005

Page 2

     We refer you to the Bond, the Written Order and the Purchase Agreement for a
description of the purposes for which the Bond is issued, the security for the Bond, the
manner in which and times at which the principal of, premium (if any), and interest on,
the Bond are payable, the interest rate or rates payable on the Bond, the provisions under
which the Bond may be redeemed, and all other details of the Bond.

     Mercantile Potomac Bank, as servicer (the “Servicer”) will administer the Bond and
the collection of moneys for the payment thereof as fiscal agent for the Issuer pursuant
to a Servicing Agreement dated of even date herewith among the Issuer, the Servicer, the
Developer and the Purchaser.

     Proceeds of the Bond will be applied by the Issuer to reimburse the Developer for
costs incurred by the Developer in connection with certain improvements to the Dudrow
Industrial Park Lot Three Development District created by the Resolution, pursuant to a
Development Agreement dated of even date herewith among the Issuer and the Developer (the
“Development Agreement”).

     We have not reviewed or examined any financial information or other information with
respect to the Developer or any offering material relating to the Developer, and we
express no opinion relating thereto.

     We have made no investigations of, and are rendering no opinion regarding, title to,
liens on or security interests in real or personal property, and we express no opinion as
to the creation, validity or priority of any lien upon, assignment of, pledge of or
security interest in any real or personal property. It is the responsibility of the
Servicer to continue to maintain the perfection, priority or validity of any liens,
assignments, security interests or pledges created as security for the Bond.

     This opinion does not constitute or imply a recommendation of the market or financial
value of the Bond or an assessment of the strength or appropriateness of the covenants by
any of the parties to any of the documents relating to the issuance of, or securing, the
Bond, the possibility of default (other than on account of the invalidity of the Bond),
the eligibility or suitability of the Bond as an investment, or any other legal or
financial aspect of the Bond not expressly addressed.

     As to questions of fact material to our opinion, we have relied on representations of
the Developer, the Purchaser and the Issuer contained in the Issuer Documents (as defined
below), the certified proceedings and other certifications of public officials furnished to
us without undertaking to verify the same by independent investigation.

 

 

VENABLEllp

County Commissioners of Frederick County

March                     , 2005

Page 3

     We have assumed the authenticity of all documents submitted to us as originals, the
genuineness of all signatures, the conformity to original documents of all documents
submitted to us as certified or photostatic copies and the authenticity of the originals of
such latter documents.

     We do not express any opinion herein concerning any law other than the law of the
State of Maryland and the federal law of the United States of America.

     Based on the foregoing, we are of the opinion that, under existing law and as of the
date hereof:

     1. The Issuer is duly created and validly existing as a body politic and corporate
and a political subdivision of the State of Maryland and has full power and authority under
the laws of the State, including the Act, to issue the Bond and to execute and deliver, and
perform its obligations under, the Purchase Agreement, the Development Agreement and the
Servicing Agreement (the “Issuer Documents”).

     2. The Resolution has been validly adopted by the Issuer and has not been amended,
rescinded or revoked and is in full force and effect.

     3. The Ordinance has been validly enacted by the Issuer and has not been amended,
rescinded or revoked and is in full force and effect.

     4. The Written Order has been duly authorized, executed and delivered by the Issuer
and has not been amended, rescinded or revoked and is in full force and effect.

     5. The Bond has been duly authorized, executed and delivered by the Issuer,
constitutes the valid and legally binding limited obligation of the Issuer and is
enforceable against the Issuer in accordance with its terms. The Bond, the premium (if
any), and the interest thereon, are limited obligations of the Issuer, the principal of,
premium (if any), and interest on, which are payable solely from tax revenues of the Issuer
allocated and paid to the Special Fund (as defined in the Resolution). The Bond, the
premium (if any) and the interest thereon shall never constitute an indebtedness or a
charge against the general credit or taxing powers of the Issuer, the State of Maryland, or
any other public body within the meaning of any constitutional or charter provision or
statutory limitation, and shall never constitute or give rise to any pecuniary liability of
the Issuer, the State of Maryland, or any other public body. The Bond does not constitute
an indebtedness to which the faith and credit of the Issuer, the State of Maryland or any
public body is pledged.

 

 

VENABLEllp

County Commissioners of Frederick County

March                     , 2005

Page 4

     6. The Issuer Documents have been duly authorized, executed and delivered by the
Issuer and, assuming due authorization, execution and delivery of such agreements by the
other parties thereof, constitute legal, valid and binding agreements of the Issuer,
enforceable against the Issuer in accordance with their respective terms.

     7. In accordance with the Act, the principal amount of the Bond, the interest payable
thereon, its transfer, and any income derived therefrom, including any profit made in the
sale or transfer thereof, shall be exempt from taxation by the State of Maryland and by the
several counties and municipalities of this State, but no opinion is expressed as to estate
or inheritance taxes, Maryland franchise taxes on certain financial institutions measured
by income, or to any other taxes not levied or assessed directly on the Bond or the
interest thereon.

     8. Interest on the Bonds is excluded from gross income for federal income tax
purposes, and interest on the Bonds is not an item of tax preference for purposes of the
federal alternative minimum tax imposed on individuals and corporations; it should be
noted, however, that such interest is taken into account in determining adjusted current
earnings for the purpose of computing the alternative minimum tax imposed on certain
corporations (as defined for federal income tax purposes). The opinion set forth in the
preceding sentence is subject to the condition that the County comply with all requirements
of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the
issuance of the Bonds in order that interest thereon be, or continue to be, excluded from
gross income for federal income tax purposes. The County has covenanted to comply with all
such requirements. Failure to comply with certain of such requirements may cause interest
on the Bonds to be included in gross income for federal income tax purposes retroactively
to the date of issuance of the Bonds. In addition interest on the Bonds may be subject to
the branch profits tax imposed on foreign corporations engaged in a trade or business in
the United States.

     Other than as set forth in the preceding paragraphs 7 and 8, we express no opinion
regarding the federal or state income tax consequences arising with respect to the Bonds.

     The rights of any holder of the Bond and the enforceability of the Bond and the
Issuer Documents are subject to: (a) the exercise of judicial discretion in accordance
with general principles of equity (whether applied by a court of law or a court of
equity), including judicial limitations on rights to specific performance; (b) the valid
exercise of the constitutional powers of the United States of America and of the sovereign
police and taxing powers of state or other governmental units having jurisdiction; and (c)
bankruptcy,

 

 

VENABLEllp

County Commissioners of Frederick County

March                     , 2005

Page 5

insolvency, reorganization, moratorium or other similar laws heretofore or hereafter in
effect affecting creditors’ rights, to the extent constitutionally applicable.

Very truly yours,exv10w33

 

Exhibit 10.33

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.

Dated May 6, 2006

EMERGENT EUROPE LIMITED

and

SANOFI PASTEUR, S.A.

LICENCE AND CO-DEVELOPMENT AGREEMENT

265 Strand

London WC2R 1BH

Tel: +44 (0)20 7067 2000

Fax: +44 (0)20 7067 2222

 

 

CONTENTS

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	1.

	 	DEFINITIONS AND INTERPRETATION
	 	 	1	 
	 
	 	 	 	 	 	 
	2.

	 	COLLABORATION
	 	 	17	 
	 
	 	 	 	 	 	 
	3.

	 	STEERING COMMITTEE
	 	 	18	 
	 
	 	 	 	 	 	 
	4.

	 	JOINT PROJECT TEAM
	 	 	22	 
	 
	 	 	 	 	 	 
	5.

	 	CONDUCT OF THE DEVELOPMENT PROGRAMME
	 	 	25	 
	 
	 	 	 	 	 	 
	6.

	 	COMMERCIALISATION OF PRODUCT
	 	 	36	 
	 
	 	 	 	 	 	 
	7.

	 	MILESTONE AND ROYALTY PAYMENTS
	 	 	38	 
	 
	 	 	 	 	 	 
	8.

	 	LICENCE GRANTS
	 	 	45	 
	 
	 	 	 	 	 	 
	9.

	 	INTELLECTUAL PROPERTY
	 	 	47	 
	 
	 	 	 	 	 	 
	10.

	 	CONFIDENTIALITY
	 	 	51	 
	 
	 	 	 	 	 	 
	11.

	 	REGULATORY MATTERS
	 	 	54	 
	 
	 	 	 	 	 	 
	12.

	 	WARRANTIES
	 	 	55	 
	 
	 	 	 	 	 	 
	13.

	 	INDEMNIFICATION
	 	 	56	 
	 
	 	 	 	 	 	 
	14.

	 	TERM AND TERMINATION
	 	 	58	 
	 
	 	 	 	 	 	 
	15.

	 	FORCE MAJEURE
	 	 	67	 
	 
	 	 	 	 	 	 
	16.

	 	PUBLICITY
	 	 	68	 
	 
	 	 	 	 	 	 
	17.

	 	NOTICES
	 	 	69	 
	 
	 	 	 	 	 	 
	18.

	 	RELATIONSHIP OF PARTIES
	 	 	71	 
	 
	 	 	 	 	 	 
	19.

	 	ASSIGNMENT AND DELEGATION
	 	 	71	 
	 
	 	 	 	 	 	 
	20.

	 	THIRD PARTY RIGHTS
	 	 	72	 
	 
	 	 	 	 	 	 
	21.

	 	WAIVER
	 	 	72	 
	 
	 	 	 	 	 	 
	22.

	 	SEVERABILITY
	 	 	72	 
	 
	 	 	 	 	 	 
	23.

	 	ENTIRE AGREEMENT
	 	 	73	 
	 
	 	 	 	 	 	 
	24.

	 	AMENDMENTS
	 	 	73	 
	 
	 	 	 	 	 	 
	25.

	 	GOVERNING LAW AND JURISDICTION
	 	 	73	 

 

 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	26.

	 	SUCCESSORS AND ASSIGNS
	 	 	74	 
	 
	 	 	 	 	 	 
	27.

	 	COUNTERPARTS
	 	 	75	 
	 
	 	 	 	 	 	 
	28.

	 	LANGUAGE
	 	 	75	 
	 
	 	 	 	 	 	 

	 	 	 	 	 
	SCHEDULE 1	 	DEVELOPMENT PLAN
	 
	 	 	 	 
	            Appendix 1	 	Outline Candidate Evaluation and Selection Plan
	 
	 	 	 	 
	            Appendix 2	 	Phase I Product and Clinical Development Plan
	 
	 	 	 	 
	            Appendix 3	 	Later Stage Clinical Development Plan
	 
	 	 	 	 
	SCHEDULE 2	 	INDICATIVE COST SCHEDULE
	 
	 	 	 	 
	SCHEDULE 3	 	CANDIDATE ANTIGENS
	 
	 	 	 	 
	SCHEDULE 4	 	OUTLINE COMMERCIALISATION PLAN
	 
	 	 	 	 
	SCHEDULE 5	 	EMERGENT INDEPENDENT PATENT RIGHTS
	 
	 	 	 	 
	SCHEDULE 6	 	PRESS ANNOUNCEMENT
	 
	SCHEDULE 7	 	ACTIVITY FORM
	 
	SCHEDULE 8	 	THE INCLUSION CRITERIA
	 
	SCHEDULE 9	 	PATENT FILING COUNTRIES
	 
	SCHEDULE 10	 	WORKED EXAMPLES
	 
	SCHEDULE 11	 	TERMINATED ANTIGENS

 

 

			
	THIS AGREEMENT is dated
	 	2006

BETWEEN:

EMERGENT EUROPE LIMITED, a company organised and existing under the laws of England (Company number
03270465) and having its registered office at 545 Eskdale Road, Winnersh Triangle, Wokingham,
Berkshire, RG41 5TU (“Emergent”);

AND

SANOFI PASTEUR, S.A., a Société Anonyme organised and existing under the laws of France (Company
registration number 349 505 370 Lyon) and having its registered head office at 2, avenue pont
pasteur, Lyon 69007 France (“sanofi pasteur”).

WHEREAS:

	(A)	 	Emergent has intellectual property and related ongoing research activity directed towards the
development of a vaccine to prevent Neisseria meningitidis serogroup B infections.
	 
	(B)	 	sanofi pasteur has expertise in clinical development and registration of meningitis and
paediatric vaccines.
	 
	(C)	 	Emergent and sanofi pasteur agree that a collaboration between them will accelerate the
pre-clinical, and early clinical development of a prophylactic vaccine against Neisseria
meningitidis infections and wish to enter into such collaboration on the terms and conditions
of this Agreement.

IT IS AGREED as follows:

	1.	 	DEFINITIONS AND INTERPRETATION
	 
	1.1	 	In this Agreement the following definitions shall have the following meanings unless
otherwise expressly provided or unless the context otherwise requires:
	 
	 	 	“Activity Forms” means the activity forms to be completed by Emergent employees and
consultants engaged in Emergent Activities in the form set out in Schedule 7.
	 
	 	 	“Additional Antigen” means a sanofi pasteur Antigen or a Third Party Antigen that satisfies
the Inclusion Criteria.
	 
	 	 	“Adjusted Combination Net Sales” has the meaning set out in the definition of Net Sales.
	 
	 	 	“Adolescent” means a young adult between 11 and 18 (inclusive) years of age.
	 
	 	 	“Adverse Event” means any untoward medical occurrence in a patient or clinical investigation
subject administered a Clinical Candidate or Product, whether or not caused by the
treatment, including any unfavourable and unintended sign (including an abnormal laboratory
finding), symptom or disease (including clinically significant worsening of a disease or
pre-existing condition) temporally related to a Clinical Candidate or Product. Adverse
Event also means any report of lack of efficacy of a

1

 

	 	 	Clinical Candidate or Product and any treatment of a pregnant woman, any abuse or overdose
(accidental or intentional), any other accidental exposure and lack of expected
pharmacological action temporally related to a Clinical Candidate or Product.

“Affiliate” means any company or other business entity which controls, is controlled by, or
is under common control with, either Emergent or sanofi pasteur (as the context requires).
For the purpose of this definition, “control” means direct or indirect beneficial ownership
of at least fifty percent (50%) of the voting share capital in such company or other
business entity.

“Annual Budget” has the meaning set out in Clause 5.3.

“Annual Development Plan” means the detailed plan setting out the activities to be conducted
by Emergent and sanofi pasteur in any Year (or such other period as the SC may decide) as
part of the Development Programme.

“Antigen” means a distinct and uniquely identifiable protein (including glycoproteins and
lipoproteins), peptide, polysaccharide, or protein-polysaccharide conjugate, capable of
eliciting a specific immune response and reacting with the products of that response and in
respect of which a Party has provided to the other complete details of (a) in the case of a
protein, the amino acid sequence or (b) in the case of other molecules, the chemical
structure of such molecule, in each case sufficient to identify such molecule. For the
purpose of this Agreement in the case of: (i) a protein Antigen encoded by a given gene, any
antigenic determinants or epitope containing portions of such protein, and all fragments,
derivatives and variants of any such protein, shall all be deemed to be one Antigen; (ii) a
polysaccharide Antigen from a given serogroup of Neisseria meningitidis or another bacterial
pathogen, any antigenic determinants or epitope containing portions of such polysaccharide,
and all fragments, derivatives and variants of any such polysaccharide, shall all be deemed
to be one Antigen; and (iii) a protein-polysaccharide conjugate where each of the protein
and polysaccharide components would individually meet the definition of Antigen as defined
above and each component separately contributes to protection against Neisseria
meningitidis serogroup B infections, such protein and polysaccharide components will each be
deemed to be one Antigen (each of which will be deemed to be the same Antigen as the
relevant protein or polysaccharide and any antigenic determinants, epitope containing
portions, fragments, derivatives and variants of such protein or polysaccharide, as set out
above) and such protein-polysaccharide conjugate will in such circumstances be considered
two (2) Antigens.

“Applicable Law” means the applicable laws, rules and regulations (including any rules,
regulations, guidelines or other requirements of national and international patent offices
and of the Regulatory Authorities, including GMP, GLP and GCP) that may be in effect from
time to time in the Territory, to the extent applicable.

“Business Day” means a day other than a Saturday or Sunday on which banking institutions in
both Paris, France and London, England are open for business.

“Candidate Antigen” means any of the [**] candidate Antigens identified by Emergent prior to
the Effective Date as more particularly described in Schedule 3.

2

 

“Change of Control” means, with respect to Emergent, (a) a merger, consolidation, share
exchange or other similar transaction involving Emergent and any Third Party which results
in the holders of the outstanding voting securities of Emergent immediately prior to such
transaction ceasing to hold more than fifty percent (50%) of the combined voting power of
the surviving, purchasing or continuing entity immediately after such transaction; or (b)
any transaction or series of related transactions in which any person becomes the beneficial
owner of fifty percent (50%) or more of the combined voting power of the outstanding
securities of Emergent; provided that, for the avoidance of doubt a public offering of shares in Emergent or any Affiliate thereof shall not constitute a transaction capable of
triggering a Change of Control.

“Clinical Candidate” means any Candidate Antigen or other Programme Antigen selected by the
SC for clinical Development in accordance with this Agreement and the Development Plan (and
in particular the Outline Candidate Evaluation and Selection Plan). A Clinical Candidate is
a Programme Antigen.

“Clinical Study” means any investigation in human subjects intended to discover or verify
the clinical, pharmacological and/or other pharmacodynamic effects of any Antigen or
Meningitis B Product, or to identify any adverse reactions to any Antigen or Meningitis B
Product and/or to study absorption, distribution, metabolism and excretion of any Antigen or
Meningitis B Product with the object of ascertaining its safety and/or efficacy. Clinical
Study includes any Phase I Study, Phase II Study, Phase III Study, Phase IV Study or any
other investigation in human subjects involving a Clinical Candidate or Product that a
Regulatory Authority may require that either Party performs for inclusion in Regulatory
Documentation or as a condition of a Regulatory Approval.

“Clinical Study Application” means an investigational new drug application filed with a
Regulatory Authority for any Regulatory Approval required to supply or use a Clinical
Candidate or Product for the purposes of a Clinical Study in a country or jurisdiction in
the Territory.

“Co-Exclusive Antigen” has the meaning set out in Clause 5.12.5.

“Combination Product” means a product developed and administered as a single product
pursuant to a single Marketing Authorisation that comprises a Unitary Product combined with
another product that is not a Meningitis B Product and does not contain a Programme Antigen
or an Additional Antigen. For the avoidance of doubt a Unitary Product will not constitute
a Combination Product merely because it is packaged with another product and sold as one
product or is sold as a “bundle” with one or more products.

“Commercialisation” or “Commercialise” means any and all lawful activities directed to the
commercialisation of a Product (whether before or after Marketing Authorisation has been
obtained), including marketing, manufacturing for commercial sale, promoting, detailing,
distributing, offering to sell and selling a Product, importing a Product for sale,
conducting additional human clinical studies with respect to an indication for which
Marketing Authorisation has been obtained
and interacting with Regulatory Authorities regarding the foregoing. When used as a

3

 

verb,
“Commercialising” means to engage in Commercialisation and “Commercialised” has a
corresponding meaning.

“Commercialisation Plan” means the written plan for the Commercialisation of a Product in
the Territory (including detailed strategy, budget and proposed timelines), as more
particularly described in Clause 6.3 as may be amended or updated in accordance with Clause
6.3.

“Commercially Reasonable Efforts” means, with respect to the Development or
Commercialisation of any Programme Antigen or Product, the level of efforts and resources
customarily applied in the research-based pharmaceutical industry in the development of a
product candidate or the commercialisation of a product of similar commercial potential at a
similar stage in its lifecycle, taking into consideration its safety and efficacy, its cost
to develop, the competitiveness of alternative products, its proprietary position, the
likelihood of regulatory approval, its profitability (provided that in assessing such
profitability sanofi pasteur shall not be entitled to take into account the royalties,
milestones or other payments due or potentially due to Emergent with respect to such
Programme Antigen or Product pursuant to this Agreement), and all other relevant factors.

“Competitive Product” means a Meningitis B Product or potential Meningitis B Product (in
each case, other than a Product) Exploited by sanofi pasteur or any of its Affiliates or
Sub-Licensees.

“Confidential Information” means either the Emergent Confidential Information or the sanofi
pasteur Confidential Information, or both the Emergent Confidential Information and the
sanofi pasteur Confidential Information, as the context requires.

“Control” means, with respect to any Antigen or other Materials, or Patent Rights, item of
Know How, Regulatory Documentation, Trademark or other intellectual property right,
possession of the right, whether directly or indirectly, and whether by ownership, licence
or otherwise (other than pursuant to this Agreement), to grant access to such Antigen, other
Materials or Regulatory Documentation or to assign, or grant a licence, sub-licence or other
right to or under, such Patent Rights, Know How, Regulatory Documentation, Trademark or
other intellectual property right as provided for herein, without violating the terms of any
agreement with any Third Party or any other arrangement with any Third Party.

“Demonstration of Presence of SBAs” has the meaning set out in Clause 5.6.3.

“Development” and, with correlative meaning, “Develop”, means all activities related to
preclinical research, discovery and testing, toxicology, process development, stability
studies, formulation development, manufacturing scale-up, production of clinical product
batches, development of quality assurance/quality control testing, clinical studies and
regulatory affairs, including the conduct of
Clinical Studies, for a Product in connection with obtaining Regulatory Approvals of such
Product.

“Development Activities” means the activities of the Parties relating to the Development of
Programme Antigens and Products as set out in the Development Plan or any Annual Development
Plan.

4

 

“Development Plan” means the plan detailing the pre-clinical and clinical activities to be
conducted by the Parties in the course of the Development Programme and, as the Development
Programme progresses, to the extent not already included, the matters referred to in Clause
5.2. The first Development Plan, incorporating the Outline Candidate Evaluation and
Selection Plan (Appendix 1), the Phase I Product and Clinical Development Plan (Appendix 2)
and the Later Stage Clinical Development Plan (Appendix 3), is attached hereto at Schedule
1.

“Development Programme” has the meaning set out in Clause 2.1.

“Early Development Phase” means the period from the Effective Date until the Transition
Date.

“Effective Date” means 1 April 2006.

“Emergent Activities” means the Development Activities allocated to Emergent in the
Development Plan or any Annual Development Plan.

“Emergent Combined Improvements” means any patentable improvement, enhancement or
modification, which is made, developed or conceived by employees or consultants of Emergent,
solely or jointly with Third Parties, in the conduct of the Development Programme, that
relates to any subject matter that is covered both by Emergent Independent Patent Rights and
sanofi pasteur Independent Patent Rights, such that the Exploitation of such improvement,
enhancement or modification without consent would infringe both Emergent Independent Patent
Rights and sanofi pasteur Independent Patent Rights.

“Emergent Confidential Information” means Emergent Independent Know How, non-patented
Emergent Programme Technology and trade secrets and any other confidential information
relating to the business affairs or finances of Emergent or its Affiliates.

“Emergent Expenses” means (i) costs or expenditures incurred by Emergent (or for its account
by an Affiliate) in connection with the engagement of any Third Party to conduct work in
connection with Emergent Activities; and (ii) any capital expenditures incurred by Emergent
(or for its account by an Affiliate of Emergent) in connection with the Development
Programme; and (iii) any other costs or expenses incurred by Emergent (or for its account by
an Affiliate of Emergent), in each case as provided for in an Annual Budget and without any
mark-up.

“Emergent Independent Know How” means all Know How that (i) as of the Effective Date is in
the Control of Emergent, (ii) Emergent is free to disclose to a
Third Party and (iii) is necessary or reasonably useful to the Development Programme or to
the Exploitation of a Product.

“Emergent Independent Patent Rights” means those Patent Rights Controlled by Emergent as of
the Effective Date that are set out in Schedule 5.

“Emergent Independent Technology” means Emergent Independent Patent Rights and Emergent
Independent Know How.

5

 

“Emergent Patent Rights” means the Emergent Independent Patent Rights and the Emergent
Programme Patent Rights.

“Emergent Programme Patent Rights” means the Patent Rights Controlled by Emergent that claim
or otherwise cover Emergent Programme Technology.

“Emergent Programme Technology” means any Technology made, developed or conceived by
employees or consultants of Emergent, alone or jointly with Third Parties, in the conduct of
the Development Programme other than Emergent Combined Improvements.

“Emergent Project Leader” means the Project Leader appointed by Emergent pursuant to Clause
2.2.

“Emergent Technology” means the Emergent Independent Technology and the Emergent Programme
Technology.

“European Union” or “EU” means the countries of the European Union as constituted from time
to time during the term of this Agreement.

“Exploit” means to make, have made, import, use, sell, or offer for sale, including to
discover, research, develop, register, modify, enhance, improve, manufacture, have
manufactured, hold/keep (whether for disposal or otherwise), formulate, optimise, have used,
export, transport, distribute, promote, market or have sold or otherwise dispose or offer to
dispose of, a product or process and “Exploitation” means the act of Exploiting a product or
process.

“FDA” means the United States Food and Drug Administration and any successor agency or
authority thereto.

“Field” means the prophylactic immunisation of human populations to prevent Neisseria
meningitidis infections.

“First Commercial Sale” means the first commercial sale by or on behalf of sanofi pasteur,
its Affiliates or Sub-Licensees of a Product in each country of the Territory after
Marketing Authorisation has been granted by the appropriate Regulatory Authority in that
country.

“First Year” means the period commencing on the Effective Date and ending on 31 December
2006.

“FTE” means a Full Time Equivalent of one thousand, five hundred and eighty nine (1,589)
hours of work per year (based on a thirty-five (35) hour working week and standard vacations
and holidays), devoted to or in support of the Emergent Activities that is carried out by
employees, contract personnel or consultants of Emergent as recorded on Activity Forms.

“FTE Cost” means, for any period, the FTE Rate multiplied by the applicable number of FTEs
in such period. The FTE Cost shall be denominated in pounds sterling (£).

“FTE Rate” means an amount reflecting the average annual gross salary, social charges and
benefits (including for notice periods in compliance with applicable

6

 

employment law) of
Emergent employees, contract personnel and consultants engaged or to be engaged in Emergent
Activities together with provisions, allocations of general and administrative charges,
amortization, depreciation, overhead, and normal laboratory expenses, which amount is at the
Effective Date [**] pounds (£[**]) per FTE. For the avoidance of doubt the FTE Rate may
only be amended with the agreement of both Parties.

“GAAP” means in relation to Emergent, United Kingdom, and in relation to sanofi pasteur,
French, generally accepted accounting principles consistently applied, or such other
generally accepted accounting principles, consistently applied, as may be applicable to the
relevant Party or Third Party at the relevant time.

“GCP” means the then-current standards for Clinical Studies involving pharmaceuticals as are
required by the Regulatory Authorities in Europe, the United States and Japan and other
organisations and governmental agencies in countries in which any Product is intended to be
sold or tested, to the extent such standards are not less stringent than ICH Topic E6: Good
Clinical Practice Consolidated Guideline.

“GLP” means the then-current standards for laboratory activities for pharmaceuticals, as are
required by the Regulatory Authorities of Europe, the United States and Japan, including 21
C.F.R. part 58 and EC Directives 87/18/EEC, 88/320/EEC and 1999/11/EC, in each case, as
amended from time to time and any relevant international standards or principles such as
those adopted by the Organisation for Economic Co-operation and Development.

“GMP” means the then-current standards for good manufacturing practices as are required by
the Regulatory Authorities in Europe, the United States and Japan and other organisations
and governmental agencies in countries in which any Product is intended to be manufactured
or sold, to the extent such standards are not less stringent than standards of good
manufacturing practice in Europe, the United States and Japan.

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

“Inclusion Criteria” means the criteria set out in Schedule 8 for the inclusion of an
Antigen into a Meningitis B Product.

“Indicative Cost Schedule” means the indicative FTE Costs and Emergent Expenses set out in
Schedule 2.

“Joint Patent Rights” means the Patent Rights that claim or otherwise cover Joint
Technology.

“Joint Project Team” or “JPT” means the committee of Emergent and sanofi pasteur
representatives established in accordance with Clause 4.1.

“Joint Technology” means any and all Technology conceived, discovered, developed or
otherwise made jointly by or on behalf of Emergent (or its Affiliates or, to the extent
permitted by their agreements therewith, their respective licensees and sub-licensees), on
the one hand, and sanofi pasteur (or its Affiliates or, to the extent permitted by their
agreements therewith, their respective licensees and sub-licensees)

7

 

on the other hand, in
connection with the work conducted under or in connection with this Agreement, whether or
not patented or patentable, together with any Emergent Combined Improvements.

“Know How” means unpatented technical and other information which is not known to the
public, including information comprising or relating to concepts, discoveries, data,
designs, formulae, ideas, experience, inventions, improvements, methods, models, assays,
research plans, procedures, designs or experiments and tests and results of experimentation
and testing, including results of research or development, together with processes,
including manufacturing processes, specifications, techniques, chemical, pharmacological,
toxicological, clinical, analytical and quality control data, trial data, case report forms,
data analyses, reports or summaries and information contained in submissions to and
information from ethical committees and regulatory authorities. The fact that an item is
known to the public shall not be taken to exclude the possibility that a compilation
including the item, or a development related to the item, is (or remains) not known to the
public.

“Late Development Phase” means the period commencing on the Transition Date and continuing
for so long as any Product is in Development including, if applicable, any period(s) during
which the Development Programme is continuing pursuant to Clause 5.9.

“Later Stage Clinical Development Plan” means the plan set out in Appendix 3 to the
Development Plan.

“Liabilities” has the meaning set out in Clause 13.1.

“Major Market Country” means each country in the European Union, the United States, Japan,
Australia, Canada, China, New Zealand, Norway, Russia, Singapore, Hong Kong, India and South
Korea.

“Marketing Authorisation” means a Biologics License Application (as defined in the United
States Federal Food Drug and Cosmetic Act (as amended from time to time) and the regulations
promulgated thereunder), and any corresponding Regulatory Approval necessary to import,
market, transfer, supply or sell a product in any country, but not including pricing and
reimbursement approvals.

“Materials” means biological and chemical materials including Antigens, screens, cell lines,
cells, vectors, nucleic acids and reagents, and any progeny or derivatives thereof.

“Meningitis B Product” means a product or potential product for the prophylactic
immunisation of human populations to prevent Neisseria meningitidis serogroup B infections
(whether or not such product confers protection against any other meningococcal serogroup
infection).

“Net Sales” means the gross invoice price of Products sold by sanofi pasteur, its Affiliates
and Sub-Licensees to the first Third Party less, to the extent specifically allocable to the
Product and actually incurred or allowed and if not already deducted in the amount invoiced:

8

 

	 	(a)	 	normal and customary trade or quantity discounts to the extent included on the
invoice as a separate item, credits, allowances, rebates, returns (including wholesaler
and retailer returns);
	 
	 	(b)	 	retroactive price reductions;
	 
	 	(c)	 	excise taxes, other consumption taxes, customs duties and compulsory payments
made to governmental authorities to the extent included on the invoice as a separate
item;
	 
	 	(d)	 	normal and customary sales commissions that are actually paid to Third Party
distributors and Third Party selling agents to the extent included on the invoice as a
separate item; and
	 
	 	(e)	 	transportation, transit and insurance for transportation each to the extent
separately invoiced and paid by sanofi pasteur.

Any of the deductions listed above that involves a payment by sanofi pasteur, its Affiliates
or its Sub-Licensees, as the case may be, shall be taken as a deduction in the Quarter in
which the payment is accrued by such entity. For purposes of determining Net Sales, any
Product shall be deemed to be sold when invoiced. For purposes of calculating Net Sales,
sales between or among sanofi pasteur, its Affiliates, and its Sub-Licensees shall be
excluded from the computation of Net Sales, but sales by sanofi pasteur, its Affiliates or
its Sub-Licensees to Third Parties (other than its Sub-Licensees) shall be included in the
computation of Net Sales. If, in any country, any Product is sold or otherwise disposed of
for any consideration other than an exclusively monetary consideration on bona fide arm’s
length terms, such Product shall be deemed to have been sold exclusively for money at the
average sales price during the applicable Quarter generally achieved for such Product in the
country in which such sale or other disposition occurs or if there is no average sales price
in that country, the average sales price in comparable countries.

Adjusted Combination Net Sales. In the event that a Product is sold in any country in any
Quarter in the form of a Combination Product, Net Sales of such Combination Product shall be
adjusted to represent the contribution of each product to the value of the Combination
Product by multiplying actual Net Sales of such Combination Product in such country in such
Quarter calculated as set out above by the fraction A/(A+B) (such adjusted amount the
“Adjusted Combination Net Sales”) where A and B are determined as follows:

	 	(i)	 	if sanofi pasteur has already launched a Unitary Product in
such country, A shall be the highest official list price of the Unitary Product
in that country in the relevant Quarter;
	 
	 	(ii)	 	if sanofi pasteur has not already launched a Unitary Product in
such country, but a unitary product for exactly the same indications as the
Unitary Product is already on the market in such country, A shall be the
highest official list price of such competitive unitary product in such country
in such Quarter. For the avoidance of doubt, if there is more than one
competitive unitary product on the relevant market, then

9

 

	 	 	 	A shall be referenced
to the competitive unitary product with the highest official list price in such
country in such Quarter;
	 
	 	(iii)	 	B shall be the highest official list price in such country in
such Quarter of the other product included in the Combination Product;
	 
	 	(iv)	 	if when sanofi pasteur first submits an application for
Marketing Authorisation for a Combination Product in a country or at any time
subsequently it is not possible to determine A or B in accordance with
paragraphs (i) to (iii) above, the Parties shall seek to agree A or B (as
required) but failing such agreement within thirty (30) days (or such longer
period as the parties may agree) of either Party notifying the other that such
values are to be determined in accordance with this paragraph (iv) either Party
can require an independent third party expert to determine such values so that
application of the formula A/(A+B) fairly reflects the contribution of the
Unitary Product to the value of the Combination Product in that country.
Within fifteen (15) days of either Party notifying the other that an expert
determination is required, the Parties shall appoint an independent expert with
expertise in the field of vaccine development and commercialisation reasonably
acceptable to both Parties. If the Parties are unable to agree on the identity
of the independent expert within such period, the independent expert shall be
appointed by Emergent, and approved by sanofi pasteur, which approval shall not
be unreasonably withheld, conditioned or delayed. Within thirty (30)
days of such appointment, each of the Parties shall furnish to the expert
(subject to such obligations of confidentiality and non-use as may be
reasonably required by them), with a copy to the other Party, a written
summary of such Party’s position as to the values of A and B in such country
and any relevant evidence supporting such position. Any such written
summary and evidence shall not, unless the Parties otherwise agree, exceed
15,000 words. Within fifteen (15) days of receipt of the other Party’s
summary (or such longer period as may be required to ensure the presence of
the expert) there shall be a one-day oral hearing before the expert at which
each Party shall be given an equal opportunity to present its own position
and hear and respond to the oral presentation given by the other Party.
Within fifteen (15) days of such oral hearing each Party may submit a
written rebuttal of the other Party’s summary, providing that any rebuttal
shall not exceed 5,000 words, and amend its final position with regard to
the values of A and B. The expert shall be required by the Parties to
select the resolution proposed by one of the Parties that as a whole most
fairly and reasonably reflects the relative contributions of the Unitary
Product and the other product to the Combination Product and shall provide
the Parties with a written statement setting forth the basis of such
determination. For the avoidance of doubt, the expert shall only have the
right to select a resolution proposed by one of the Parties in its entirety
and without modification. The expert shall be required by the Parties to
use all reasonable efforts to render his decision within sixty (60) days of
his appointment or, if earlier, within thirty days following his receipt of
all

10

 

	 	 	 	such information and such decision shall be final and binding upon each
of the Parties unless and until it becomes possible to determine A and B in
accordance with paragraphs (i) to (iii) above. If the expert adopts the
resolution proposed by Emergent, then sanofi pasteur shall pay the fees and
expenses of the expert. If the expert adopts the resolution proposed by
sanofi pasteur, then Emergent shall pay the fees and expenses of the expert.
If due to any act or omission by one of the Parties, the Parties have not
agreed, or the expert has not determined, the values of A and/or B (as
required) in any country before launch of the Combination Product in that
country, A and/or B (as required) shall be as determined by the other Party.

Minimum royalties payable to Emergent on a Combination Product in any country: If the
Product is sold as a Combination Product, the royalty payable to Emergent on sales of the
Combination Product in the relevant country in the applicable Quarter shall be the higher
of:

	 	(1)	 	the royalty payable to Emergent pursuant to Clause 7.3 (as adjusted pursuant to
Clause 7.4.1 or Clause 7.4.2 if applicable) for such country and Quarter;
	 
	 	(2)	 	[**] per cent ([**]%) X the royalty rate applicable to the Unitary Product X
A/C X Net Sales of the Combination Product (before application of the formula A/(A+B))
where C is the highest official list price of the Combination Product in that country
and Quarter and A for that country and Quarter is determined in accordance with
paragraphs (i) to (iv) above (as applicable); and
	 
	 	(3)	 	if the royalty would otherwise be payable pursuant to Clause 7.3(a), [**] per
cent ([**]%) X actual Net Sales of the Combination Product in that country and Quarter
(before application of the formula A/(A+B)); or if the royalty would otherwise be
payable pursuant to Clause 7.3(b), [**] per cent ([**]%) X actual Net Sales of the
Combination Product in that country and Quarter (before application of the formula
A/(A+B)).

Bundled products: If, in any country, a Product and one or more products capable of
separate sales are “bundled” and sold without separate pricing for each product within the
bundle, Net Sales per unit of such Product shall be deemed to be the average sales price at
which that Product has been sold unbundled in such country during the applicable Quarter.

“Outline Candidate Evaluation and Selection Plan” means the plan for the screening,
selection and progression of Programme Antigens prior to clinical Development as set out in
Appendix 1 to the Development Plan.

“Outline Commercialisation Plan” means the Outline Commercialisation Plan set out in
Schedule 4.

“Party” means either Emergent or sanofi pasteur and “Parties” means Emergent and sanofi
pasteur.

“Patent Rights” means any and all (a) patents, (b) pending patent applications, including
all provisional applications, continuations, continuations-in-part, divisions,

11

 

reissues,
renewals, and all patents granted thereon, and (c) all patents-of-addition, reissue patents,
re-examinations and extensions or restorations by existing or future extension or
restoration mechanisms, supplementary protection certificates or the equivalent thereof, and
(d) any equivalent of any of the foregoing in any jurisdiction.

“Phase I Product and Clinical Development Plan” means the plan set out as Appendix 2 to the
Development Plan.

“Phase I Study” means a Clinical Study in any country that is intended to initially evaluate
the safety or pharmacological effect of an Antigen or Meningitis B Product in subjects or
that would otherwise satisfy requirements of 21 C.F.R. 312.21(a), or its equivalent outside
the United States.

“Phase II Study” means a Clinical Study in any country that is intended to initially
evaluate the effectiveness of an Antigen or Meningitis B Product for a particular indication
or indications in patients with the disease or indication under study or that would
otherwise satisfy requirements of 21 C.F.R. 312.21(b), or its equivalent outside the United
States.

“Phase III Study” means a pivotal Clinical Study, the principal purpose of which is to
establish safety and efficacy in patients with the disease or indication under study as
required in 21 C.F.R. 312.21(c), or similar clinical studies prescribed by the Regulatory
Authorities in a country other than the United States whether or not such study is a
traditional Phase III Study.

“Phase IV Study” means a Clinical Study that is required or requested by a Regulatory
Authority as a condition of or in connection with obtaining or maintaining a Regulatory
Approval (whether commenced either prior to or after receipt of such Regulatory Approval).

“Pre-Clinical Study” means any investigation in animals or in vitro intended to discover or
verify the pharmacological or other pharmacodynamic effects of any Programme Antigen or
Product, or to study absorption, distribution, metabolism and excretion of any Programme
Antigen or Product with the object of ascertaining its safety.

“Primary Inclusion Criteria” means the criteria set out in Schedule 8 Part I for the
progress of Antigens into Phase II Studies.

“Product” means a vaccine or potential vaccine containing one or more Programme Antigens.
Unitary Products and Combination Products are Products.

“Product Trademark” has the meaning set out in Clause 6.5.

“Programme Antigen” means any Candidate Antigen, including any Antigen derived from a
Candidate Antigen by either Party, or any other Antigen (other than a Terminated Antigen or
a Repatriated Antigen) claimed or otherwise covered by Emergent Patent Rights or Joint
Patent Rights.

“Project Leader” has the meaning set out in Clause 2.2.

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“Quarter” means a period of three (3) consecutive calendar months ending on March 31, June
30, September 30 or December 31 and “Quarterly” shall be construed accordingly.

“Regulatory Approval” means any and all approvals (including any applicable supplements,
amendments, pre- and post-approvals, governmental price and reimbursement approvals and
approvals of applications for regulatory exclusivity), licences, registrations, or
authorisations of any federal, national, multinational, international, state, provincial or
local regulatory agency, department, bureau, commission, council or other governmental
entity necessary for the manufacture, distribution or other transfer of possession, use,
holding, storage, import, export, transport, promotion, marketing, supply or sale of a
product in a country or jurisdiction in the Territory, or the use of a product or Antigen in
any Pre-Clinical
Study or Clinical Study. For clarity, a compendia listing shall not be deemed to be a
Regulatory Approval.

“Regulatory Authority” means the FDA or any counterpart of the FDA outside the United
States, or other national, supra-national, regional, state or local regulatory agency,
department, bureau, commission, council or other governmental entity with authority over the
distribution, importation, exportation, manufacture, production, use, storage, transport,
pre-clinical or clinical testing or sale of a Meningitis B Product or Antigen.

“Regulatory Documentation” means all applications, registrations, governmental licences,
authorisations and approvals (including all Regulatory Approvals), all correspondence
submitted to or received from Regulatory Authorities and all supporting documents and all
clinical studies and tests, relating to a Programme Antigen or Product, and all data
contained in any of the foregoing.

“Repatriated Antigen” means a Programme Antigen repatriated to Emergent in accordance with
Clause 5.12.3(f). An Antigen shall cease to be a Programme Antigen on becoming a
Repatriated Antigen.

“Royalty Burden” has the meaning set out in Clause 7.4.1.

“sanofi pasteur Antigen” means an Antigen Controlled by sanofi pasteur that is not either a
Third Party Antigen or a Programme Antigen.

“sanofi pasteur Confidential Information” means sanofi pasteur Independent Know How,
unpatented sanofi pasteur Programme Technology and trade secrets and any other confidential
information relating to the business affairs or finances of sanofi pasteur or an Affiliate.

“sanofi pasteur Independent Know How” means all Know How which either at the Effective Date
or subsequently during the Term is in the Control of sanofi pasteur or its Affiliates (other
than any Know How that constitutes unpatented Joint Technology or unpatented sanofi pasteur
Programme Technology) and which sanofi pasteur is free to disclose to a Third Party which is
necessary or reasonably useful to the Development Programme or to the Exploitation of a
Product.

13

 

“sanofi pasteur Independent Patent Rights” means (a) any Patent Rights Controlled by sanofi
pasteur pursuant to a sanofi pasteur In-Licence at any time during the Term and (b) any
other Patent Rights Controlled by sanofi pasteur at any time during the Term otherwise than
pursuant to a sanofi pasteur In-Licence necessary or reasonably useful to the Development
Programme or to the Exploitation of a Product; in each case excluding, for the avoidance of
doubt, sanofi pasteur Programme Patent Rights and Joint Patent Rights

“sanofi pasteur Independent Technology” means sanofi pasteur Independent Patent Rights and
sanofi pasteur Independent Know How.

“sanofi pasteur In-Licence” means any licence deemed to be a sanofi pasteur In-Licence
pursuant to Clause 5.8.1.

“sanofi pasteur Patent Rights” means the sanofi pasteur Independent Patent Rights and the
sanofi pasteur Programme Patent Rights.

“sanofi pasteur Programme Patent Rights” means the Patent Rights Controlled by sanofi
pasteur that claim or otherwise cover sanofi pasteur Programme Technology.

“sanofi pasteur Programme Technology” means any Technology made, developed or conceived by
employees or consultants of sanofi pasteur, alone or jointly with Third Parties, in the
conduct of the Development Programme.

“sanofi pasteur Project Leader” means the Project Leader appointed by sanofi pasteur
pursuant to Clause 2.2.

“sanofi pasteur Technology” means the sanofi pasteur Independent Technology and the sanofi
pasteur Programme Technology.

“SBA” means a serum bactericidal antibody, i.e., an antibody or antibodies which, in the
presence of an exogenous source of complement, has the ability to kill Neisseria
meningitidis bacteria. For clarity, the source of the complement used in the SBA assay
shall be appropriate to the serum being measured, for example, for human sera, a human
complement source obtained from a donor without bactericidal activity against the test
strain shall be utilised.

“SBA Activity” means measurement of SBA titres in serum.

“Selection Criteria” means the technical selection criteria set out in the Outline Candidate
Evaluation and Selection Plan and included in Appendix 1 to the Development Plan for the
selection of Candidate Antigens to progress into Phase I Studies.

“Senior Officer” has the meaning set out in Clause 3.5.1.

“Serious Adverse Event” means an Adverse Event that at any dose: (a) results in death, (b)
puts the patient at risk of death at the time of the event or occurrence, (c) requires
inpatient hospitalisation or prolongation of existing hospitalisation, (d) results in
persistent or significant disability or incapacity, (e) is a congenital anomaly/birth defect
or (f) based upon reasonable medical scientific judgment, places a patient in jeopardy or
may require intervention to prevent any of the events or occurrences

14

 

described in (a)
through (e). In the event of doubt as to whether an Adverse Event is a Serious Adverse
Event, the Adverse Event shall be treated as if it is a Serious Adverse Event.

“Steering Committee” or “SC” means the committee of Emergent and sanofi pasteur
representatives established in accordance with Clause 3.1.

“Sub-Licensee” means a person (other than an Affiliate of sanofi pasteur) that is authorised
by sanofi pasteur (with the express prior written consent of Emergent) to manufacture and
sell a Product in the Field in the Territory (including any Third Party acting in
collaboration with sanofi pasteur or its Affiliates). For clarity, a Sub-Licensee shall not
include a Third Party to whom sanofi pasteur sells bulk Product together with a right to
fill/finish, label, market and distribute such Product, provided
that sanofi pasteur is not entitled to any additional consideration upon the Exploitation of
such Product.

“Technology” means inventions, discoveries, improvements, trade secrets and proprietary
methods, whether or not patentable, including Know How.

“Term” means the term of this Agreement, which term shall be the period commencing on the
Effective Date and ending either on the date on which the final obligation of sanofi pasteur
to make royalty payments under Clause 7.3 expires or, if earlier, the date on which this
Agreement is terminated in accordance with Clause 14.2.

“Terminated Antigen” means the Antigens listed on Schedule 11 and each Programme Antigen
determined by the SC to be a Terminated Antigen in accordance with Clause 5.15. An Antigen
shall cease to be a Programme Antigen on becoming a Terminated Antigen.

“Territory” means all countries of the world.

“Third Party” means any corporation, unincorporated organisation, person or other legal
entity other than Emergent or sanofi pasteur or their respective Affiliates.

“Third Party Antigen” means any Antigen Controlled by sanofi pasteur the Exploitation of
which as a constituent of any Unitary Product would, but for a sanofi pasteur In-Licence
infringe the Patent Rights of a Third Party.

“Trademark” means any corporate name, trade name, trade dress, service mark, logos and
trademarks (whether or not registered) and all applications for, and registrations of, and
all renewals, extensions or modifications to, and any goodwill associated with, any of the
foregoing in the Territory.

“Transition Date” means the date on which all Pre-Clinical Studies and Phase I Studies
involving a Programme Antigen and described in any Development Plan or Annual Development
Plan have been completed or, if later, the date on which all Transition Plans in effect at
such date are fully implemented to the satisfaction of the Parties.

“Transition Plan” has the meaning set out in Clause 5.5.1.

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“Unitary Product” means a Product for use in the prevention of meningococcal serogroup B
infections (whether or not such Product confers protection against any other meningococcal
serogroup infection) in which Programme Antigens and Additional Antigens are the only
Antigens. For the avoidance of doubt, a Product that is not a Combination Product is a
Unitary Product.

“Valid Claim” means a claim of (i) an issued and unexpired patent, (ii) a patent the term of
which has been extended pursuant to an extension of term or equivalent right anywhere in the
world, (iii) a patent listed in a supplementary protection certificate or equivalent
instrument anywhere in the world, (iv) a pending patent application providing that such
application has been pending for no longer than ten (10) years, in each case which has not
been withdrawn, cancelled, abandoned, disclaimed, revoked
or held unpatentable, invalid or unenforceable by final decision of a court or other
governmental agency of competent jurisdiction, which decision is unappealable or unappealed
within the time allowed for appeal.

“Year” means the First Year and thereafter each successive period of twelve (12) months
ending on the last day of December.

	1.2	 	In this Agreement, unless the context otherwise requires:

	 	(a)	 	references to “this Agreement” shall mean this Agreement and any and all
Schedules to it, each as amended from time to time in accordance with the provisions of
this Agreement;
	 
	 	(b)	 	references to a particular Clause, Schedule or paragraph shall be a reference
to that clause, schedule or paragraph in this Agreement;
	 
	 	(c)	 	words in the singular shall include the plural and vice versa and references to
the masculine gender shall include the feminine gender and vice versa;
	 
	 	(d)	 	headings are for convenience only and shall be ignored in interpreting this
Agreement;
	 
	 	(e)	 	reference to a person shall mean any individual, partnership, company,
corporation, joint venture, trust, association, organisation or other entity, in each
case whether or not having separate legal personality;
	 
	 	(f)	 	the words “include”, “including” or “in particular” are to be construed without
limitation to the generality of the preceding words;
	 
	 	(g)	 	references to a statute include any statutory modification, extension or
re-enactment of that statute;
	 
	 	(h)	 	any reference to “writing” includes a reference to any communication effected
by facsimile transmission or similar means;
	 
	 	(i)	 	the word “or” has the inclusive meaning represented by the phrase “and/or”; and

16

 

	 	(j)	 	any covenant by a Party not to do an act or thing shall be deemed to include an
obligation not to permit or suffer such act or thing to be done by another person.

	1.3	 	If there is any inconsistency between Clauses 1 to 28 (inclusive) of this Agreement and any
Schedule, such Clauses shall prevail.
	 
	2.	 	COLLABORATION
	 
	2.1	 	Objectives and Overview
	 
	 	 	The Parties wish to evaluate and screen the Candidate Antigens, select Clinical Candidates
and Develop a Product for use in the Field (the “Development Programme”). The Development
Programme shall comprise all activities relating
to Development. It is anticipated that the majority of Pre-Clinical Studies and Phase I
Studies relating to Programme Antigens will be undertaken by Emergent during the Early
Development Phase, at sanofi pasteur’s cost, and that the majority of Phase II Studies
relating to Programme Antigens and the subsequent Development of Programme Antigens (whether
during the Early Development Phase or the Late Development Phase) will be undertaken by
sanofi pasteur, at its own cost. The SC shall oversee the overall execution of the
objectives of the Development Programme and the JPT shall manage the day-to-day running of
the collaboration in the Early Development Phase. The Project Leaders shall facilitate the
flow of information and otherwise promote communications and collaboration within and among
the Parties, the SC, JPT and any other sub-committees or teams that the SC may appoint or
constitute.
	 
	2.2	 	Project Leaders
	 
	 	 	Within sixty (60) days of the Effective Date, each Party shall appoint a senior
representative with a good general understanding of the vaccine development process to act
as a co-ordinator and project leader (“Project Leader”). Each Party may replace its Project
Leader with another suitably qualified individual, on written notice to the other Party.
Each Project Leader shall be primarily responsible for the day-to-day management of each
Party’s activities within the collaboration.
	 
	2.3	 	Intellectual Property Strategy
	 
	 	 	The Parties acknowledge the importance of effectively securing and managing the intellectual
property relating to Programme Antigens and any Product. The Parties shall, consistent with
Clause 9 and Schedule 9, seek to obtain and maintain the broadest patent protection that is
commercially reasonable across the Territory, extending this protection through additional
filings and the use of supplementary protection certificates where appropriate, and to
protect the confidentiality of all Know How relating to the Programme Antigens and any
Product.
	 
	2.4	 	Exclusivity
	 
	 	 	Emergent shall not and shall procure that none of its Affiliates shall, other than pursuant
to this Agreement, conduct any activity, either on its own, or with, for the benefit of, or
sponsored by, any Third Party, that is designed to research, develop or

17

 

	 	 	commercialise, or
grant any licence or other rights to any Third Party to utilise, the Programme Antigens for
the purpose of researching, developing, commercialising or otherwise Exploiting any product
in the Territory provided that this shall not prevent Emergent from Exploiting, or granting
a Third Party the right to Exploit, any Co-Exclusive Antigen.
	 
	2.5	 	Co-operation
	 
	 	 	Emergent and sanofi pasteur shall co-operate in the performance of the Development Plan and
each Annual Development Plan and, subject to the terms of
this Agreement and any confidentiality obligations to Third Parties, each shall at its own
cost (providing that such costs are not substantial), if requested by the other Party,
exchange such Materials, data and information in its Control as are reasonably necessary for
the other Party to perform its obligations under any Annual Development Plan.
	 
	3.	 	STEERING COMMITTEE
	 
	3.1	 	Establishment and Membership of SC
	 
	 	 	Within sixty (60) days of the Effective Date, Emergent and sanofi pasteur shall establish a
Steering Committee (“SC”) comprising not less than six (6) members, with at least three (3)
being appointed and replaced by Emergent, of which one shall be the Emergent Project Leader,
and at least three (3) being appointed and replaced by sanofi pasteur, of which one shall be
the sanofi pasteur Project Leader. All such representatives shall be individuals of
suitable authority and seniority with significant experience and expertise in vaccine
development, commercialisation or marketing commensurate with the responsibilities and
activities of the SC from time to time. Any appointment or replacement shall be notified to
the other Party in writing. Any member of the SC may designate a substitute of equal
experience and seniority to attend and perform the functions of such member at any meeting
of the SC.
	 
	3.2	 	Meetings
	 
	 	 	The first meeting of the SC shall take place within seventy-five (75) days of the Effective
Date. The SC shall meet Quarterly during the Development Programme and thereafter
bi-annually and in addition within fifteen (15) days of a request by any SC member to have
such a meeting. Meetings may take place by video conference or telephone conference or such
other means as the SC shall decide and all members participating in the meeting by video
link, telephone or such other means shall be deemed to be present at the meeting, provided
however, that the SC shall meet in person at least twice per Year, unless otherwise agreed
by the SC. Meetings held in person shall alternate between Emergent and sanofi pasteur
designated locations. The first meeting shall be held at sanofi pasteur’s facilities. The
chair of the SC shall rotate between Emergent and sanofi pasteur from meeting to meeting.
The first meeting shall be chaired by a sanofi pasteur representative. The quorum for
meetings shall be one sanofi pasteur representative and one Emergent representative.
Decisions and determinations of the SC shall be made by unanimous agreement of the members
present. Each Party may invite additional employees, or consultants to attend SC meetings
but any such additional attendees shall not have any right to vote. The principal business
and any decisions of any meeting shall be recorded in minutes

18

 

	 	 	which shall be circulated by
the chair to the members of the SC promptly following the meeting for review, comment and
adoption.
	 
	3.3	 	Responsibilities of the SC
	 
	 	 	Except as otherwise provided in this Agreement, the SC shall have authority to make all
necessary strategic decisions relating to the Development of a Product and
the implementation of the Development Plan. Specifically, and in addition to any other
responsibilities assigned to the SC elsewhere in this Agreement, the SC shall be responsible
for:

	 	(a)	 	reviewing and approving any major amendments to the Development Plan (including
the Outline Candidate Evaluation and Selection Plan, the Phase I Product and Clinical
Development Plan and the Later Stage Clinical Development Plan);
	 
	 	(b)	 	reviewing and approving each Annual Development Plan and any major amendments
thereto;
	 
	 	(c)	 	reviewing and resolving all significant strategic issues relating to the
Development of Unitary Products including the review and approval of:

	 	(i)	 	the target product profile of a Product;
	 
	 	(ii)	 	any go/no go decision points relating to Development;
	 
	 	(iii)	 	prioritising Candidate Antigens, selecting Clinical Candidates
and designating Terminated Antigens;
	 
	 	(iv)	 	Clinical Study endpoints and success criteria;
	 
	 	(v)	 	insurance coverage for Clinical Studies;
	 
	 	(vi)	 	the regulatory strategy for a Product;
	 
	 	(vii)	 	patent, trademark and other intellectual property strategy
and, to the extent applicable, patent, trademark and other intellectual
property litigation strategy;

	 	(d)	 	reviewing all significant strategic issues (including, as applicable, those
matters listed in paragraph c above) relating to the Development of any Combination
Product;
	 
	 	(e)	 	reviewing and approving each Transition Plan;
	 
	 	(f)	 	reviewing and commenting on the Commercialisation Plan;
	 
	 	(g)	 	reviewing the efforts of the Parties in performing their respective
responsibilities under the Development Plan, any Annual Development Plan, each
Transition Plan and the Commercialisation Plan;
	 
	 	(h)	 	reviewing the implementation of each Transition Plan; and

19

 

	 	(i)	 	reviewing and approving any external corporate communication regarding the
Development Programme.

	 	 	For the avoidance of doubt, if this Agreement provides that any matter is to be determined
by the Parties or either of them , such matter shall not be considered to be the
responsibility, or within the authority, of the SC.
	 
	3.4	 	Role of the Project Leader within the SC
	 
	 	 	Within the framework of the SC, each Project Leader shall facilitate the execution of the
SC’s responsibilities and in particular shall be responsible for:

	 	(a)	 	facilitating coordination among the various functional representatives of
either Emergent or sanofi pasteur, as appropriate;
	 
	 	(b)	 	seeking consensus both internally within the respective Party’s organisation
and together regarding key global Development and Commercialisation strategy and issues
concerning the Development Plan, each Annual Development Plan, each Transition Plan and
each Commercialisation Plan, as appropriate, including facilitating review of external
corporate communications;
	 
	 	(c)	 	raising to the SC in a timely manner cross-Party or cross-functional disputes,
or proposed modifications to any Development Plan, Annual Development Plan, Transition
Plan or Commercialisation Plan;
	 
	 	(d)	 	providing a single point of communication between the SC, the JPT and any
subcommittee created pursuant to Clause 3.6;
	 
	 	(e)	 	submitting to the SC the reports referred to in Clause 5.10; and
	 
	 	(f)	 	such other matters as the SC may consider appropriate.

	3.5	 	SC Dispute Resolution
	 
	3.5.1	 	Escalation of Disputes within the SC. If the SC is unable to resolve any dispute with
respect to a matter within the scope of Clause 3.3 within thirty (30) days (or fourteen days
(14) days if the matter is expedited in accordance with Clause 3.5.3) after such matter was
first referred to or considered by the SC, whichever is earlier, or in such longer period of
time as the Parties may agree such matter shall, at the written request of either Party, be
referred to the Chief Executive Officer of Emergent and the sanofi pasteur Head of Research
and Development (the “Senior Officers”) as soon as practicable but in any event no later than
fifteen (15) days after such request. Each Senior Officer shall have the right to engage the
services of any number of independent experts in the field in question (such independent
expert(s) to be engaged under obligations of confidentiality and non-use equivalent to those
set out in Clause 10 and at the expense of the Party so engaging such expert(s)) to assist the
Senior Officers in making a determination on the unresolved dispute, and each Senior Officer
shall consider in good faith the analyses and opinions of any such experts engaged by either
of them in making a determination. Subject to Clause 3.5.2, if the Senior Officers are unable
to resolve the dispute within thirty (30) days after such referral, or

20

 

	 	 	such longer period as the Senior Officers may agree, the sanofi pasteur Head of Research and Development shall be
entitled to determine the matter. Any such determination shall be commercially reasonable and
consistent with Applicable Law. Prior to resolving any such dispute unilaterally, sanofi
pasteur shall consider in good
faith Emergent’s position and the analyses and opinions of any independent expert engaged by
Emergent. For the avoidance of doubt, in reaching any such decision sanofi pasteur shall
act in good faith and in the best interests of the Development and Commercialisation of a
Product but shall not be bound to follow the recommendations of any such expert. For the
avoidance of doubt, all other disputes arising under or in connection with this Agreement
shall, unless subject to final and binding expert determination in accordance with this
Agreement, be resolved in accordance with Clause 25.2 and, if necessary, Clause 25.3.
	 
	3.5.2	 	Notwithstanding Clause 3.5.1, the sanofi pasteur Head of Research and Development shall not
be entitled to determine a dispute with respect to a matter within the scope of Clause 3.3, if
such decision relates to any of the following matters and no such proposal or decision with
respect to any such matter shall be effective unless and until agreed by Emergent:

	 	(a)	 	any proposal to amend the Development Plan, adopt or amend any Annual
Development Plan (including any Annual Budget), or adopt or amend any Transition Plan
in a manner that alters an existing obligation of Emergent or imposes a new obligation
on Emergent;
	 
	 	(b)	 	any proposal to amend the Outline Candidate Evaluation and Selection Plan
(including the Selection Criteria);
	 
	 	(c)	 	any proposal to amend the standard assay system for measurement of SBA Activity
set out in the Development Plan;
	 
	 	(d)	 	any proposal to use an Alternative Assay to demonstrate the presence of SBAs
with a Clinical Candidate or Product unless such proposal is consistent with Clause
5.6.3.
	 
	 	(e)	 	any proposal to incorporate an Additional Antigen in a Product or include an
Additional Antigen in the Development Programme unless such proposal is consistent with
the decision of the expert appointed pursuant to Clause 5.7.2;
	 
	 	(f)	 	any proposal relating to the patent strategy for Emergent Patent Rights or
Joint Patent Rights or any proposal to seek patent term extensions regarding the
Emergent Patent Rights, the sanofi pasteur Patent Rights or the Joint Patent Rights
with respect to any Product in each country in the Territory;
	 
	 	(g)	 	any decision that would constitute a deviation from any of the terms of, or
would require an amendment to, this Agreement (other than an amendment to the
Development Plan as expressly permitted in accordance with this Agreement); and
	 
	 	(h)	 	any proposal that would affect when a milestone payment under Clause 7.2 would
be payable.

21

 

	3.5.3	 	Expedited Escalation. If either the SC or JPT is unable to resolve a dispute relating to a
matter for which it is responsible, either Party may designate such dispute an urgent matter.
The SC shall resolve such issue within fourteen (14) days after such matter was first
designated an urgent matter. The Parties shall ensure that the SC meets (by
teleconference/videoconference as necessary) to discuss and resolve such urgent matter within
such period. If the SC does not resolve such matter within such
fourteen (14) day period, the matter
will be referred to the Senior
Officers in accordance with Clause
3.5.1.
	 
	3.6	 	Subcommittees
	 
	 	 	The SC is empowered to create such sub-teams or subcommittees of itself as it may deem
appropriate or necessary. Each such sub-team or subcommittee shall report to the SC, which
shall have authority to approve or reject recommendations or actions proposed subject to the
terms of this Agreement. No sub-team or subcommittee shall have authority to make any
decision binding upon the SC or the Parties. For the avoidance of doubt, a Party may
appoint the same individual as its representative on more than one committee.
	 
	4.	 	JOINT PROJECT TEAM
	 
	4.1	 	Establishment and Membership of JPT
	 
	 	 	Within sixty (60) days of the Effective Date Emergent and sanofi pasteur shall establish a
Joint Project Team (“JPT”) comprising up to six (6) members, with up to three (3) being
appointed and replaced by Emergent, of which one shall be the Emergent Project Leader, and
up to three (3) being appointed and replaced by sanofi pasteur, of which one shall be the
sanofi pasteur Project Leader. All such representatives shall be individuals of suitable
authority and seniority with significant experience and expertise in vaccine research and
development to commensurate with the responsibilities of the JPT. Any appointment or
replacement shall be notified to the other Party in writing. Any member of the SC may
designate a substitute of equal experience and seniority to attend and perform the functions
of such member at any meeting of the JPT. Any changes to the size of the JPT shall be
decided by the SC. Unless otherwise decided by the Parties, the JPT shall be disbanded on
the Transition Date and have no further responsibilities thereafter; provided that if the SC
determines that pre-clinical Development activities, or a Phase I Study, are to be
undertaken with or in connection with a Programme Antigen and it is proposed that all or any
of such activities are commenced or continued after the Transition Date or the anticipated
Transition Date the JPT shall not be disbanded, or if it has been disbanded it shall be
reconstituted before commencement of any such activities. The JPT shall prepare the
amendments to the Development Plan and any Annual Development Plan required in connection
with such proposed activities and shall not be disbanded until all pre-clinical Development
activities and any Phase I Studies for such Programme Antigen are complete or discontinued.
	 
	4.2	 	Meetings
	 
	 	 	The first meeting of the JPT shall take place within seventy-five (75) days of the Effective
Date and thereafter the JPT shall meet monthly or as otherwise determined by the Parties.
Meetings may take place by video conference or telephone conference

22

 

	 	 	or such other means as the SC shall decide and all members participating in the meeting by
video link, telephone or such other means shall be deemed to be present at the meeting,
provided however, that the JPT shall meet in person at least once per Quarter, unless
otherwise agreed by the SC. Meetings held in person shall alternate between Emergent and
sanofi pasteur designated locations. The first meeting shall be held at Emergent’s
facilities. The chair of the JPT shall rotate between Emergent and sanofi pasteur from
meeting to meeting, the first meeting shall be chaired by a sanofi pasteur representative.
The quorum for meetings shall be one sanofi pasteur representative and one Emergent
representative. Decisions and determinations of the JPT shall be made by unanimous
agreement of the members present. Each Party may invite additional employees, or
consultants to attend JPT meetings but any such additional attendees shall not have any
right to vote. The principal business of any meeting shall be recorded in minutes, which
minutes shall be circulated by the chairperson to the members of the JPT promptly following
the meeting for review, comment and adoption.
	 
	4.3	 	Responsibilities of the JPT
	 
	 	 	Until the Transition Date (or such later date as the Parties may agree) and during any
subsequent period during which the JPT is reconstituted pursuant to Clause 4.1, the JPT
shall have the general responsibility for the day-to-day management of the collaboration,
including co-ordinating the Development Activities of each of the Parties and making
recommendations and referring strategic issues to the SC. Specifically, the JPT shall be
responsible for:

	 	(a)	 	preparing Annual Development Plans in accordance with Clause 5.3, and
submitting such Annual Development Plan to the SC for approval;
	 
	 	(b)	 	preparing each Transition Plan and submitting such plan to the SC for approval;
	 
	 	(c)	 	proposing to the SC any amendments to the Development Plan or any Annual
Development Plan, including proposals relating to Product Development, the Outline
Candidate Evaluation and Selection Plan, and clinical, regulatory and intellectual
property strategy, in each case as appropriate to the stage of the Development
Programme;
	 
	 	(d)	 	overseeing and managing the implementation of the Development Plan, and each
Annual Development Plan and Transition Plan;
	 
	 	(e)	 	facilitating the exchange of information and data between the Parties and the
Parties’ representatives engaged in the day-to-day conduct of the Development
Activities;
	 
	 	(f)	 	referring any significant strategic issues relating to the Development
Programme, including any issues that have a material effect on quality, cost and time
needed to undertake any Development Activities, to the SC;
	 
	 	(g)	 	making recommendations to the SC with respect to:

	 	(i)	 	Development go/no go decision points;

23

 

	 	(ii)	 	amendments to the Outline Candidate Evaluation and Selection
Plan;
	 
	 	(iii)	 	the prioritisation of Candidate Antigens, the selection of
Clinical Candidates and the designation of Terminated Antigens;
	 
	 	(iv)	 	Clinical Study endpoints, success criteria and protocols for
Clinical Studies;
	 
	 	(v)	 	insurance requirements for Clinical Studies;

	 	(h)	 	co-ordinating and monitoring the regulatory strategy and intellectual property
strategy with respect to any Programme Antigen or Product;
	 
	 	(i)	 	recommending the appointment of any necessary additional subcommittees;
	 
	 	(j)	 	preparing and submitting to the SC the Transition Plans in accordance with
Clause 5.5.1;
	 
	 	(k)	 	reviewing and then reporting on the efforts of the Parties in performing their
respective Development Activities to the SC; and
	 
	 	(l)	 	such other activities consistent with this Agreement as determined by the SC.

	4.4	 	Role of the Project Leader within the JPT
	 
	 	 	Within the framework of the JPT, each Project Leader shall facilitate the execution of the
JPT’s responsibilities and in particular shall be responsible for:

	 	(a)	 	providing a single point of communication between the Parties concerning the
day-to-day operation of the collaboration;
	 
	 	(b)	 	seeking consensus both internally within the respective Party’s organisation
and together regarding the preparation or implementation of the Development Plan, each
Annual Development Plan and Transition Plan and any recommendations to be made by the
JPT to the SC; and
	 
	 	(c)	 	raising to the JPT in a timely manner cross-Party or cross-functional disputes.

	4.5	 	Dispute Resolution
	 
	4.5.1	 	Referral to the SC. If the JPT is unable to resolve any dispute with respect to a matter
within the scope of Clause 4.3, within thirty (30) days after such matter was first referred
to or considered by the JPT, whichever is earlier, then such matter shall, at the written
request of either Party, be referred to the SC for resolution. The referral shall be made in
writing and if the form of such referral is not agreed each Party may make written submissions
to the SC.
	 
	4.5.2	 	Expedited Referral. Either Party may designate a dispute within the JPT an urgent matter
and, if the JPT is unable to resolve such dispute within fourteen (14) days of such matter
first being designated an urgent matter, either Party may immediately refer such matter to the
SC for resolution.

24

 

	5.	 	CONDUCT OF THE DEVELOPMENT PROGRAMME
	 
	5.1	 	The Development Programme
	 
	 	 	The Development Programme shall be conducted in accordance with this Agreement, the
Development Plan and any Annual Development Plan. Each Party shall conduct the Development
Activities allocated to it in the Development Plan diligently, in good scientific manner and
in compliance with this Agreement, the Development Plan, the relevant Annual Development
Plan and Applicable Law. As part of the Development Programme, the Parties will seek to
evaluate and screen the Programme Antigens, select Clinical Candidates and Develop a
Product.
	 
	5.2	 	The Development Plan
	 
	 	 	The overall strategy and anticipated budget for the Development of any Product are set out
in the first Development Plan attached as Schedule 1. The Development Plan, including the
Outline Candidate Evaluation and Selection Plan, Phase I Product and Clinical Development
Plan and Later Stage Clinical Development Plan, shall be revised and updated by the SC as
and when necessary during the course of the Development Programme with the intent that the
Development Plan shall:

	 	(a)	 	identify Development Activities to be conducted by each of the Parties and the
anticipated timelines for such activities;
	 
	 	(b)	 	specify the standards applicable to any Development Activities including
whether particular Development Activities are to be conducted in accordance with GLP,
GMP or GCP;
	 
	 	(c)	 	include and, if necessary, update the criteria for the selection of Clinical
Candidates;
	 
	 	(d)	 	describe the clinical and regulatory strategy for any Clinical Candidate or
Product;
	 
	 	(e)	 	describe the intellectual property strategy for Emergent Patent Rights and
Joint Patent Rights;
	 
	 	(f)	 	incorporate a manufacturing plan for clinical supplies of Clinical Candidates
and any Product; and
	 
	 	(g)	 	include such other matters as the SC consider appropriate in relation to the
Development Programme.

	 	 	During the Early Development Phase and during any other period during which the JPT has
responsibilities pursuant to Clause 4.3, the JPT, and at any other time, sanofi pasteur,
shall be responsible for proposing amendments to the Development Plan. No major amendment
to the Development Plan shall be effective until approved by the SC. For the purpose of
this Agreement any change to the Development Plan or an Annual Development shall be
considered major if the change affects Emergent’s obligations under the Development Plan or
any Annual Development Plan, or, in isolation or in aggregate with any other changes not
previously approved by the SC, represents a material change to the resources engaged or to
be engaged by sanofi

25

 

	 	 	pasteur in the Development of a Product, or affect or might be reasonably expected to affect
the anticipated timetable for Development of a Product. sanofi pasteur shall provide
Emergent with an up to date summary of the Development Plan and any Annual Development Plan
within thirty (30) days of the commencement of each Quarter which summaries shall highlight
any amendments (whether or not major amendments) made to such plan in the previous Quarter.
sanofi pasteur shall promptly answer any queries raised by Emergent in connection with any
such summary.
	 
	5.3	 	Annual Development Plan and Budget
	 
	 	 	As soon as practicable following the Effective Date, and in any event within sixty (60) days
following the Effective Date, the JPT shall submit to the SC, and the SC shall review and
agree to, the Annual Development Plan for the First Year (or such other period as the SC may
decide). For each subsequent Year (or such other period as the SC may decide) prior to or
including the anticipated Transition Date and during any other period during which the JPT
has responsibilities pursuant to Clause 4.3, the JPT shall prepare a draft Annual
Development Plan. For each Year during the Late Development Phase, sanofi pasteur shall
prepare a draft Annual Development Plan (unless the JPT has been reconstituted pursuant to
Clause 4.1, in which case the JPT shall prepare the draft Annual Development Plan). Each
draft Annual Development Plan shall be submitted to the SC for review, modification and if
appropriate, as determined by the SC, approval. The JPT or sanofi pasteur, as the case may
be, shall manage the preparation and submission of each draft Annual Development Plan (other
than the Annual Development Plan for the First Year) in a manner designed to result in
approval of such plan, if there is no dispute within the SC, by no later than thirty (30)
days prior to the end of the then-current Year or such other date (taking into account the
budget cycle of sanofi pasteur) as the SC may decide. Each Annual Development Plan shall
describe with reasonable specificity the Development objectives for, and activities to be
performed in, the applicable Year (or other period covered by the Annual Development Plan)
and an estimated timeline for such activities. During the Early Development Phase and
thereafter if and for so long as the Parties agree that any Development Activities shall be
conducted by Emergent, each Annual Development Plan shall identify which Development
Activities are Emergent Activities and with respect to such Emergent Activities the number
of FTEs estimated to be required to perform such activities, the corresponding estimated FTE
Cost, and the estimated Emergent Expenses (such estimates for each Year, once approved by
the SC, an “Annual Budget”). The Annual Budget for the First Year shall be based on the
Indicative Cost Schedule. Each Annual Budget shall be reviewed and if appropriate updated
in June of each year or at such other time or times as the SC may agree. No major amendment
to an Annual Development Plan shall be effective until approved by the SC. All FTE Costs
and Emergent Expenses incurred by Emergent in connection with the Emergent Activities shall
be paid by sanofi pasteur in accordance with Clause 5.13.
	 
	5.4	 	The Early Development Phase
	 
	5.4.1	 	Conduct. During the Early Development Phase each Party shall undertake the Development
Activities allocated to it in the relevant Annual Development Plan. It is anticipated that
the majority of Pre-Clinical Studies and Phase I Studies will be

26

 

	 	 	undertaken by Emergent. In particular, Emergent shall, with assistance from sanofi pasteur
and at sanofi pasteur’s cost, (i) evaluate and screen the Candidate Antigens and the SC
shall select Clinical Candidates as more particularly described in the Outline Candidate
Evaluation and Selection Plan; and (ii) Develop Clinical Candidates and undertake Phase I
Studies as more particularly described in the Phase I Product and Clinical Development Plan.
	 
	5.4.2	 	Role of the JPT. The JPT shall be responsible for day-to-day management of the Development
Programme during the Early Development Phase and any subsequent period during which
pre-clinical Development Activities or a Phase I Study are to be undertaken with or in
connection with a Programme Antigen, and in particular shall have the responsibilities set out
in Clause 4.3. Each of sanofi pasteur and Emergent shall cause its representatives on the JPT
to collaborate with the other Party’s representatives in the discharge of those
responsibilities. In addition to the reports prepared pursuant to Clause 5.10, each of
Emergent and sanofi pasteur shall keep the other informed of the conduct of their respective
Development Activities through the JPT and their respective Project Leaders.
	 
	5.5	 	Transition from Early Development to Late Development
	 
	5.5.1	 	Transition Plans. If sanofi pasteur notifies Emergent that it intends to progress a
Clinical Candidate into a Phase II Study, the JPT shall prepare and submit to the SC a
transition plan for such Clinical Candidate (each a “Transition Plan”), which plan shall
provide for the smooth, orderly and cost-effective transfer of principal responsibility for
the conduct of Development Activities relating to that Clinical Candidate from Emergent to
sanofi pasteur and shall include each Party’s responsibilities (and, with respect to any
responsibilities allocated to Emergent, the estimated FTE Costs and Emergent Expenses) and a
timetable for such transfer. The Transition Plan shall provide for:

	 	(a)	 	securing supplies of any Clinical Candidate as required for planned Clinical
Studies involving that Clinical Candidate;
	 
	 	(b)	 	the transfer of copies of all relevant information, files or data relating to
the Clinical Candidate;
	 
	 	(c)	 	the assignment and transfer from Emergent to sanofi pasteur of all of
Emergent’s rights, title or interest in or to any Regulatory Documentation and
Regulatory Approvals relating to that Clinical Candidate then in Emergent’s name;
provided that if the Clinical Candidate is a Co-Exclusive Antigen Emergent shall only
be required to grant sanofi pasteur co-exclusive rights in such Regulatory
Documentation and Regulatory Approvals; and
	 
	 	(d)	 	such other matters as the SC may consider appropriate.

	5.5.2	 	Assignment of Regulatory Documentation. Emergent shall, at sanofi pasteur’s cost, duly
execute and deliver, or cause to be duly executed and delivered, such instruments and shall do
and cause to be done such acts and things, including the filing of such assignments,
agreements, documents and instruments, as may be necessary to give effect to Clause 5.5.1(c).

27

 

	5.5.3	 	Transition Costs. All FTE Costs and Emergent Expenses incurred by Emergent in implementing
each Transition Plan shall be paid by sanofi pasteur in accordance with Clause 5.13.
	 
	5.6	 	The Late Development Phase
	 
	5.6.1	 	Conduct. During the Late Development Phase each Party shall undertake the Development
Activities allocated to it in the Development Plan and the relevant Annual Development Plan.
It is anticipated that the majority of such Development Activities will be undertaken by
sanofi pasteur. In particular, sanofi pasteur shall, with such assistance from Emergent as
may be described in any Annual Development Plan, undertake further research and Development
and Clinical Studies as described in the Later Stage Clinical Development Plan including all
clinical, regulatory, manufacturing and other work that is required to conduct Phase II
Studies and Phase III Studies and as may be necessary to obtain Marketing Authorisation for a
Unitary Product in each Major Market Country. In addition to the reports to be provided
pursuant to Clause 5.10, sanofi pasteur shall keep the Emergent Project Leader regularly
updated as to progress under the Development Plan or any Annual Development Plan.
	 
	5.6.2	 	Additional sanofi pasteur Responsibilities. The JPT shall be disbanded on the Transition
Date or on such later date as the Parties may agree. Thereafter, except during such periods
as the JPT is reconstituted pursuant to Clause 4.1, sanofi pasteur shall be responsible for
proposing and submitting to the SC for review and, where required by this Agreement, approval
as to:

	 	(a)	 	any amendments to the Development Plan or any Annual Development Plan including
proposals relating to clinical, regulatory and intellectual property strategy, in each
case as appropriate to the stage of the Development Programme; and
	 
	 	(b)	 	any strategic issues relating to the Development Programme including the
progression of Clinical Candidates and the Development of Combination Products.

	5.6.3	 	Demonstration of Presence of SBAs. Subject to this Clause 5.6.3, sanofi pasteur shall
commence a Clinical Study with a Clinical Candidate or Product to demonstrate the presence of
SBAs in Adolescents within six (6) months of receipt of a final clinical study report
demonstrating, in adults, the presence of SBAs in connection with use of a Clinical Candidate
or Product. For the purpose of this Agreement, presence of SBAs will be deemed to have been
demonstrated against Neisseria meningitidis serogroup B (“Demonstration of Presence of SBAs”),
if a Programme Antigen or a Product (i) elicits a [**] fold increase in SBA Activity, as
measured with a standard assay system, as identified in the Development Plan, which utilises
human complement as the exogenous complement source, against at least [**] percent ([**]%) of
a representative panel of Neisseria meningitidis serogroup B strains, in at least [**] percent
([**]%) of the subjects allocated to receive one test vaccine (i.e. at least one dosage with
or without adjuvant) (the “Response Rate”); and (ii) satisfies the safety endpoints of that
Clinical Study with the very same formulation. Without prejudice to the generality of the
foregoing, following the design of the relevant Clinical Study, the Steering Committee will
agree the statistical analysis to be

28

 

	 	 	performed on the Clinical Study results, including possible
determination of the confidence intervals or other statistical
measures for the Response Rate endpoint. If the Steering
Committee agree statistical limits around the Response Rate
endpoint and Demonstration of Presence of SBAs shall also be
deemed to have occurred if the Clinical Study results are
within these agreed limits and Clause 5.6.3 (ii) is also
satisfied. If either the FDA or the European Agency for the
Evaluation of Medicinal Products establishes a functional assay
other than SBA Activity (an “Alternative Assay”) as an
alternative efficacy endpoint for the grant of a Marketing
Authorisation for a Meningitis B Product, the Parties shall adopt
such Alternative Assay and Demonstration of Presence of SBAs will
be deemed satisfied if there is a successful demonstration of
such functional activity using the Alternative Assay.

	 
	5.7  	 	Incorporation of Additional Antigens
	 
	5.7.1	 	Proposal to incorporate Additional Antigens. The Parties each acknowledge and agree that,
although the primary objective of the Development Programme is to Develop a Product comprising
only Programme Antigens, the effectiveness of a potential Product for the prevention of
Neisseria meningitidis serogroup B may be enhanced by the incorporation of one or more
Additional Antigens. Subject to Clause 5.8, sanofi pasteur may propose any such addition (and
any corresponding amendments to the Development Plan) during the Early Development Phase or
the Late Development Phase provided that sanofi pasteur is able to demonstrate that the
proposed Additional Antigen satisfies the Inclusion Criteria. Any such proposal by sanofi
pasteur shall be in writing and shall include all information required to determine whether
the Additional Antigen satisfies the Inclusion Criteria and shall either be submitted to
Emergent or, if sanofi pasteur is not prepared to disclose such information to Emergent,
sanofi pasteur shall confirm that such information is available for review by an independent
expert in accordance with Clause 5.7.2. Emergent shall within thirty (30) days from the date
of such submission notify sanofi pasteur whether it agrees to the inclusion of such Additional
Antigen or alternatively that it wishes the matter to be referred to an independent expert in
accordance with Clause 5.7.2. If Emergent fails to provide such notice within such thirty
(30) day period, Emergent shall be deemed to have consented to the incorporation of such
Antigen into the Product or potential Product.
	 
	5.7.2	 	Expert Review. If sanofi pasteur is unable to demonstrate to Emergent’s reasonable
satisfaction that any proposed Additional Antigen satisfies the Inclusion Criteria, the
Parties shall appoint an independent expert with expertise in the field of vaccine development
and licensing reasonably acceptable to both Parties to determine whether the Antigen satisfies
the Inclusion Criteria. If the Parties are unable to agree on the identity of the independent
expert within ten (10) days of Emergent’s notifying sanofi pasteur that it desires the
appointment of such expert, the independent expert shall be appointed by Emergent, and
approved by sanofi pasteur, which approval shall not be unreasonably withheld, conditioned or
delayed. Within twenty (20) days of such appointment, sanofi pasteur shall furnish to the
expert (subject to such obligations of confidentiality and non-use as may be reasonably
required by sanofi pasteur) all information necessary for the expert to make such
determination with a copy to Emergent, provided that sanofi pasteur shall be entitled to
redact sanofi pasteur Confidential Information from such copy. Emergent may also make
submissions to the expert, with a copy to sanofi pasteur, within such period. Any such
submission

29

 

	 	 	shall not, unless the Parties otherwise agree, exceed 15,000 words. Within fifteen (15) days
of receipt of the other Party’s summary (or such longer period as may be required to ensure
the presence of the expert), there shall be a one-day oral hearing before the expert at
which each Party shall be given an equal opportunity to present its own position and hear
and respond to the oral presentation given by the other Party. Within fifteen (15) days of
such oral hearing each Party may submit a written rebuttal of the other Party’s summary
providing that any rebuttal shall not exceed 5,000 words. The expert shall be required by
the Parties to use all reasonable efforts to render his decision within sixty (60) days of
his appointment or if earlier within thirty days following his receipt of all such
information and such decision shall be final and binding upon each of the Parties. Should
the expert determine that the proposed Additional Antigen satisfies the Inclusion Criteria,
then Emergent shall pay the fees and expenses of the expert. Should the expert determine
that the proposed Additional Antigen does not satisfy the Inclusion Criteria, then sanofi
pasteur shall pay the fees and expenses of the expert.
	 
	5.7.3	 	Non-discrimination. Whether or not any Additional Antigen satisfies the Inclusion Criteria,
sanofi pasteur shall not in any event discriminate against any Programme Antigen and shall
make all proposals and decisions relating to the prioritisation and screening of Antigens and
the inclusion of any Antigen in a Unitary Product in good faith based on all available
technical and scientific information. For the avoidance of doubt in making any such proposal
or decision (including pursuant to Clause 3.5.1), sanofi pasteur shall not be entitled to take
into account the royalties, milestones or other payments due or potentially due to Emergent
with respect to any Programme Antigen or Product pursuant to this Agreement.
	 
	5.7.4	 	sanofi pasteur activities with Programme Antigens. For the avoidance of doubt, sanofi
pasteur shall not conduct any activities in relation to the Development of Programme Antigens
unless such activities are set out in the Development Plan or any Annual Development Plan and
are conducted in accordance with this Agreement as part of the Development Programme.
	 
	5.8	 	Third Party Technology and sanofi pasteur Technology
	 
	5.8.1	 	Independent review of Technology. Prior to the incorporation of any Third Party Antigen
into a Product or application to a Product of any Patent Rights licensed to sanofi pasteur,
sanofi pasteur shall disclose such Antigen or technology to Emergent and shall, upon
Emergent’s request, allow an independent third party access to any relevant licenses granted
to sanofi pasteur by Third Parties to verify the terms on which such Antigen or technology is
licensed to sanofi pasteur (including any royalty obligations that would form part of the
Royalty Burden). If sanofi pasteur incorporates or applies any such Antigen or technology in
or to a Unitary Product the licence of such Antigen or technology to sanofi pasteur shall be
deemed to be a sanofi pasteur In-Licence and Emergent will be provided with a schedule listing
such sanofi pasteur In-License(s) and related Patent Rights. Except as expressly provided in
Clause 7.4, no royalties or other consideration paid or payable by sanofi pasteur, its
Affiliates or any Sub-Licensees to any Third Party pursuant to any sanofi pasteur In-Licence
or any other licence shall be taken into consideration in the calculation of Net Sales
hereunder or credited against any amounts owed by sanofi pasteur to Emergent hereunder.

30

 

	5.8.2	 	Disclosure of Technology. From time to time throughout the Term, sanofi pasteur shall
disclose to Emergent any sanofi pasteur Independent Technology and sanofi pasteur Programme
Technology necessary for the conduct of the Emergent Activities.
	 
	5.9	 	Combination Products
	 
	 	 	Without prejudice to Clause 6.2, sanofi pasteur may at any time after commencement of the
Late Development Phase propose Development of a Combination Product. In such event, whether
or not there are, at that time, any ongoing Development Activities, any such Development
shall be considered to be part of the Development Programme and the Late Development Phase
shall be extended or revived as required. Without prejudice to its obligations under this
Agreement, sanofi pasteur shall be entitled to make all strategic decisions relating to the
Development of Combination Products; provided that sanofi pasteur shall promptly inform
Emergent of any such decisions and shall provide such further information and explanation
for such decision as Emergent may reasonably request.
	 
	5.10	 	Reports of Development Activities
	 
	 	 	During the Development Programme, each Party (acting through its Project Leader) shall
furnish to the SC:

	 	(a)	 	within thirty (30) days after the end of each Quarter, summary reports
describing its progress under the Annual Development Plan during that Quarter. The
format and degree of detail required for such summary reports shall be defined and
agreed by the SC with the objective of ensuring that each of the Parties provides an
adequate amount of information to the other about its activities pursuant to the Annual
Development Plan; and
	 
	 	(b)	 	within sixty (60) days after the end of each Year or at such other times as the
Parties may determine, comprehensive written reports describing in detail the work
accomplished by it under the Annual Development Plan during such Year and discussing
and evaluating the results of such work.

	5.11	 	Performance by Emergent
	 
	 	 	In performing the Emergent Activities, Emergent shall use such FTEs as are specified in the
relevant Annual Development Plan. Emergent shall notify the SC promptly upon becoming aware
of a scientific or technical problem that is likely to preclude Emergent from completing any
Emergent Activity with the FTEs set out in the applicable Annual Budget for such Emergent
Activity. As part of such notification, Emergent shall provide the SC with a reasonably
detailed description of such problem, together with its good faith belief as to the steps
necessary to complete such Emergent Activity, if practicable at all, in light of such
problem. Upon receipt of such notification, the SC shall then meet within ten (10) days to
determine what action to take and Emergent shall not be required to perform the relevant
Emergent Activity unless and until the SC resolves how to proceed.
	 
	5.12	 	Performance by sanofi pasteur
	 
	5.12.1	 	Development of a Unitary Product. sanofi pasteur shall use Commercially Reasonable Efforts
to Develop a Unitary Product.

31

 

	5.12.2	 	sanofi pasteur Diligence. sanofi pasteur warrants and undertakes that it shall at all times
prior to the grant of a Marketing Authorisation for a Product in a Major Market Country have
at least one Programme Antigen in active clinical Development provided that at least one
Programme Antigen has met the Selection Criteria and provided further that:

	 	(a)	 	if all Programme Antigens have been tested in preclinical Development and none
have met the Selection Criteria then sanofi pasteur will have no obligation to conduct
clinical activities with any Programme Antigen and the absence of ongoing clinical
activities by sanofi pasteur shall not constitute a lack of diligence; and
	 
	 	(b)	 	if all Programme Antigens that have met the Selection Criteria have been tested
in a Phase I Study, and none of the Programme Antigens that have met the Selection
Criteria have been found to meet the Primary Inclusion Criteria, then sanofi pasteur
will have no obligation to conduct further clinical activities with any such Programme
Antigen and the absence of ongoing clinical activities by sanofi pasteur shall not
constitute a lack of diligence.

	 	 	sanofi pasteur shall be deemed to be actively Developing at least one Programme Antigen if a
Programme Antigen is in a Phase I Study, a Phase II Study or a Phase III Study.
	 
	5.12.3	 	Clinical Development. Without limiting the generality of Clause 5.12.2:

	 	(a)	 	sanofi pasteur shall use Commercially Reasonable Efforts to screen all
Candidate Antigens to determine whether they meet the Selection Criteria;
	 
	 	(b)	 	sanofi pasteur shall use Commercially Reasonable Efforts to progress into a
Phase I Study any Programme Antigen that meets the Selection Criteria unless there is
already a Programme Antigen in a Phase I Study or a later stage of active clinical
Development;
	 
	 	(c)	 	any Programme Antigen in a Phase I Study will be assessed to determine whether
it satisfies the Primary Inclusion Criteria;
	 
	 	(d)	 	subject to paragraph (e) below, sanofi pasteur shall use Commercially
Reasonable Efforts to progress into a Phase II Study any Programme Antigen that meets
the Primary Inclusion Criteria unless there is already a Product in a Phase II Study or
a later stage of active clinical Development;
	 
	 	(e)	 	provided that if sanofi pasteur has another Programme Antigen in a Phase I
Study, sanofi pasteur shall not be obliged to include a Programme Antigen in a
Meningitis B Product going into a Phase II Study if each of the Antigens included in
that product are superior to that Programme Antigen or the combination of those
Antigens is superior to all combinations of all or some of those Antigens with that
Programme Antigen;
	 
	 	(f)	 	if sanofi pasteur (or one of its Affiliates or Sub-Licensees) has a Competitive
Product in a Phase II Study or later clinical development or a Competitive Product has
been granted a Marketing Authorisation, any Programme Antigen

32

 

	 	 	 	that satisfies the Primary Inclusion Criteria shall be assessed to determine (i)
whether it is superior to one or more Sanofi Pasteur Antigens or Third Party
Antigens included in that Competitive Product, or (ii) whether a combination of that
Programme Antigen with one or more of those Sanofi Pasteur Antigens or Third Party
Antigens is superior to the combination of Antigens in the Competitive Product.
Superiority shall be determined in accordance with Clause 5.12.4. If it is
determined that a Programme Antigen is superior to one or more Antigens included in
the Competitive Product or would provide a superior combination of Antigens for use
in a Meningitis B Product, sanofi pasteur must either (i) commence a Phase II Study
with a Meningitis B Product including the superior Programme Antigen and, if
applicable, the best combination of Antigens from the Competitive Product and
thereafter actively continue the clinical Development of such Meningitis B Product;
or (ii) notify Emergent in writing that it is not progressing a Meningitis B Product
including the superior Programme Antigen and, if applicable, the best combination of
Antigens from the Competitive Product into a Phase II Study or, if later, that it is
suspending the further clinical Development of such Programme Antigen. On sanofi
pasteur serving such notice or, if sanofi pasteur does not serve such notice and
does not, within three (3) months from the date on which it is determined that the
Programme Antigen is superior, commence development activities leading to the
commencement of a Phase II Clinical Study with a Meningitis B Product including the
superior Programme Antigen and, if applicable, the best combination of Antigens from
the Competitive Product, or having commenced such activities suspends active
clinical Development of such Programme Antigen, on Emergent serving written notice
on sanofi pasteur, all rights in that Programme Antigen (the “Repatriated Antigen”)
shall revert to Emergent and Emergent shall be entitled to Exploit such Repatriated
Antigen in and outside the Field; and
	 
	 	(g)	 	if the Programme Antigen assessed pursuant to paragraph (f) above is not
superior to the Antigens in the Competitive Product, sanofi pasteur shall be entitled
to suspend further clinical Development of such Programme Antigen provided that, and
for so long as, sanofi pasteur has another Programme Antigen in a Phase I Study or a
later stage of active clinical Development.

	 	 	For the avoidance of doubt, sanofi pasteur’s obligations in relation to the clinical
Development of Programme Antigens shall cease on the grant of a Marketing Authorisation for
a Product in a Major Market Country.
	 
	5.12.4	 	Superiority of Antigens. For the purposes of this Agreement, a Programme Antigen will be
deemed to be superior to a sanofi pasteur Antigen or Third Party Antigen (as the case may be)
if that Programme Antigen, had its characteristics been known at the time sanofi pasteur
decided which Antigens would be included in the Competitive Product, would, applying the
principles of non-discrimination set out in Clause 5.7.3, have been included standing alone or
with other Antigens in a Meningitis B Product. The assessment of the relative superiority of
Antigens shall be made on the basis of the same tests or assessments for each Antigen,
including protection coverage against the same representative panel of clinically relevant
Neisseria meningitidis serogroup B strains for each Antigen, immunogenicity, potential
synergistic effects when in combination with other Antigens and the optimum protection
coverage obtained with

33

 

	 	 	combinations of Antigens. The level of SBA or readout from any Alternative Assay considered
to confer protection shall be applied equally to all Antigens. One Antigen shall not be
considered superior to another on the basis of tests or assessments that may not be applied
equally to both Antigens. Activities required to generate the data required to allow
determination of the relative superiority of Antigens will be included in the Development
Plan and Annual Development Plan and will be completed prior to the end of Phase I clinical
development for the relevant Antigen.
	 
	5.12.5	 	Co-Exclusive Antigens. If prior to the grant of a Marketing Authorisation for a Product in
a Major Market Country, sanofi pasteur suspends development of a Programme Antigen in
accordance with Clause 5.12.3(g) and at the time of such suspension has or subsequently
obtains a Marketing Authorisation for any Competitive Product, Emergent and sanofi pasteur
shall have co-exclusive rights to Exploit such Programme Antigen (a “Co-Exclusive Antigen”)
unless sanofi pasteur has and continues to have a Product incorporating a Programme Antigen in
a Phase II Study or later active clinical Development. A Co-Exclusive Antigen shall remain a
Programme Antigen but once a Programme Antigen has become a Co-Exclusive Antigen it shall
remain a Co-Exclusive Antigen even if sanofi pasteur subsequently commences a Phase II Study
or any later clinical Development with it or a different Programme Antigen.
	 
	5.12.6	 	Expert Determination. If sanofi pasteur is unable to demonstrate to Emergent’s reasonable
satisfaction that a Programme Antigen is being Developed as required pursuant to this Clause
5.12, Emergent shall notify sanofi pasteur and the Parties shall appoint an independent expert
with expertise in the field of vaccine development and licensure reasonably acceptable to both
Parties to determine whether the Programme Antigen (i) satisfies the Selection Criteria and
the Primary Inclusion Criteria; and (ii) is superior to any sanofi pasteur Antigen or Third
Party Antigen in active clinical Development. If the Parties are unable to agree on the
identity of the independent expert within ten (10) days of Emergent notifying sanofi pasteur
that it wishes the appointment of such expert, the independent expert shall be appointed by
Emergent, and approved by sanofi pasteur, which approval shall not be unreasonably withheld,
conditioned or delayed. Within twenty (20) days of such appointment, each of the Parties
shall furnish to the expert (subject to such obligations of confidentiality and non-use as may
be reasonably required by them), with a copy to the other Party, a written summary of such
Party’s position and any relevant evidence supporting such position including all information
necessary for the expert to make such determination. Any such written summary and evidence
shall not, unless the Parties otherwise agree, exceed 15,000 words. Within fifteen (15) days
of receipt of the other Party’s summary (or such longer period as may be required to ensure
the presence of the expert) there shall be a one-day oral hearing before the expert at which
each Party shall be given an equal opportunity to present its own position and hear and
respond to the oral presentation given by the other Party. Within fifteen (15) days of such
oral hearing each Party may submit a written rebuttal of the other Party’s summary providing
that any rebuttal shall not exceed 5,000 words. The expert shall be required by the Parties
to use all reasonable efforts to render his decision within thirty days following his receipt
of all such summaries and information and such decision shall be final and binding upon each
of the Parties. Should the expert find in favour of Emergent, then sanofi pasteur shall pay
the fees and expenses of the expert. Should

34

 

	 	 	the expert find in favour of sanofi pasteur,
then Emergent shall pay the fees and expenses of
the expert.
	 
	5.13	 	Development Funding
	 
	 	 	sanofi pasteur shall pay Emergent (i) the aggregate FTE Cost for all FTEs, and (ii) the
amount of all Emergent Expenses incurred by Emergent in accordance with the Indicative Cost
Schedule, any Annual Budget or Transition Plan. On the date of this Agreement and on the
first day of each subsequent Quarter, sanofi pasteur shall make a payment in pounds sterling
(£) equal to the estimated FTE Cost and Emergent Expenses for the Quarter commencing on the
Effective Date and thereafter each subsequent Quarter and, in relation to the payment to be
made on the date of this Agreement, FTE Costs of £[**] and Emergent Expenses of £[**]
incurred between 1 January 2006 and the Effective Date, as reflected in the then-current
Indicative Cost Schedule, Annual Budget or Transition Plan provided that each such payment
shall be made against an invoice issued by Emergent. Emergent acknowledges that sanofi
pasteur may not be able to pay invoices received by sanofi pasteur in a particular month
before the tenth day of the following month. Each of the Parties will use reasonable
endeavours to ensure that invoices for each Quarter are issued at least one month prior to
end of the immediately preceding Quarter to enable payment by sanofi pasteur against such
invoice on or before the first day of each Quarter. Emergent shall provide sanofi pasteur
with annual reconciliation statements that specify the actual number of FTEs and the actual
Emergent Expenses for the last four (4) Quarters in the aggregate within sixty (60) days of
the completion of each Year. If, with respect to a particular Year:

	 	(a)	 	the actual FTE Cost plus the Emergent Expenses specified in such annual
reconciliation statement is less than the amount paid by sanofi pasteur to Emergent
with respect to that Year, such excess shall be set against the amounts due to Emergent
with respect to forthcoming Emergent Activities until such balance is zero or if no
such activities are contemplated, repaid to sanofi pasteur; or
	 
	 	(b)	 	the actual FTE Cost plus the Emergent Expenses specified in such annual
reconciliation statement is more than the amount actually paid by sanofi pasteur to
Emergent with respect to that Year, sanofi pasteur shall pay the deficiency within
thirty (30) days of the date of such statement.

	5.14	 	Funding Audit Rights
	 
	 	 	Emergent shall keep complete and accurate books and financial records pertaining to its
costs and expenses of conducting the Emergent Activities (including duly completed Activity
Forms), which books and financial records shall be retained by Emergent until three (3)
years after the end of the Year to which they pertain. sanofi pasteur shall have the right
to appoint at its expense an independent certified public accountant reasonably acceptable
to Emergent to inspect and audit, during normal business hours and upon reasonable prior
written notice, the books and financial records of Emergent relating to its costs and
expenses of conducting the Emergent Activities during any Year; provided that sanofi pasteur
shall not have the right to inspect or audit any Year more than once and will not go back
over records more than three (3) years old unless a discrepancy is found. All books and
financial records

35

 

	 	 	
made available for inspection or audit shall be deemed to be Emergent Confidential
Information.
	 
	5.15	 	Terminated Antigens
	 
	 	 	If having been evaluated in accordance with the Outline Candidate Evaluation and Selection
Plan, the SC determines that a Programme Antigen is not to be prioritised or is not to be
selected as a Clinical Candidate, the SC shall consider whether such Programme Antigen can
be a back-up Antigen and may or may reasonably be likely at a later point during the
Development Programme to be subject to further Development Activities. If the SC determines
that such Programme Antigen will not, or may not, be subject to further Development
Activities then such Programme Antigen shall be designated a Terminated Antigen.
	 
	5.16	 	Employees, Consultants, Agents and Sub-contractors
	 
	 	 	Each Party undertakes that any of its employees, consultants, agents or sub-contractors
engaged in any Development Activities shall be bound by obligations of confidentiality and
non-use consistent with the terms of this Agreement and shall be bound by an agreement
pursuant to which he, she or it is obliged to:

	 	(a)	 	follow such Party’s policies and procedures regarding reporting any invention,
discovery, process, software programme, information, Know How or Material
characterised, conceived, developed, derived, discovered, generated, identified or
otherwise made by such person in the course of his or her employment or its retainer
with such Party;
	 
	 	(b)	 	assign to such Party all of his or her right, title and interest in and to any
such invention, discovery, process, software program, information, Know How or Material
characterised, conceived, developed, derived, discovered, generated, identified or
otherwise made by such person in the course of his or her employment or its retainer
with such Party, including any intellectual property or proprietary right thereto;
	 
	 	(c)	 	co-operate in the preparation, filing, prosecution, maintenance, defence and
enforcement of any Patent Rights claiming the same; and
	 
	 	(d)	 	perform all acts and sign, execute, acknowledge and deliver any and all papers,
documents and instruments required for effecting the obligations and purposes of that
agreement.

	6.	 	COMMERCIALISATION OF PRODUCT
	 
	6.1	 	Commercialisation Activities
	 
	 	 	Subject to the terms and conditions of this Agreement, sanofi pasteur shall have sole
discretion over, and sole responsibility for, the Commercialisation of Products in the
Territory including all decisions with respect to medical affairs, pricing, product launch,
marketing, and sales activities. sanofi pasteur shall have sole responsibility for all
costs and expenses in connection with such Commercialisation activities. sanofi pasteur
shall conduct all Commercialisation activities in compliance in all 

36

 

	 
	 	 	material respects with
all requirements of Applicable Law.
	 
	6.2	 	sanofi pasteur Diligence
	 
	 	 	sanofi pasteur shall use Commercially Reasonable Efforts:

	 	(a)	 	to Commercialise a Unitary Product in each Major Market Country; and
	 
	 	(b)	 	if a Combination Product is Developed, to Commercialise such Combination
Product in each Major Market Country.

	 	 	sanofi pasteur shall Commercialise each Product (whether a Unitary Product or a Combination
Product) in accordance with the Commercialisation Plan for such Product.
	 
	6.3	 	Commercialisation Plan
	 
	 	 	No later than six (6) months prior to the anticipated date of submission to any Regulatory
Authority in any Major Market Country of the first application for a Marketing Authorisation
for any Product (whether a Unitary Product or a Combination Product), sanofi pasteur shall
prepare and provide to Emergent a Commercialisation Plan for such Product. That
Commercialisation Plan shall include the matters referred to in the Outline
Commercialisation Plan. sanofi pasteur shall consider in good faith any comments made by
Emergent. Each Commercialisation Plan shall be updated by sanofi pasteur and submitted to
the SC as provided for in this Clause 6.3 not less than annually. Within thirty (30) days
of the submission of any Commercialisation Plan or any amendment or update to a
Commercialisation Plan, the SC shall, if so requested by Emergent, meet to review and
consider that plan or amendment.
	 
	6.4	 	Commercialisation Reports
	 
	 	 	sanofi pasteur shall keep Emergent reasonably informed of the progress of sanofi pasteur’s
efforts to Commercialise any Product in the Field in the Territory through semi-annual
reports, which reports shall summarise sanofi pasteur’s efforts to Commercialise such
Product in accordance with the Commercialisation Plan for such Product.
	 
	6.5	 	Development and Use of Trademarks
	 
	 	 	sanofi pasteur shall have the sole right, in its sole discretion (but in consultation with
Emergent) to determine the Trademarks to be used with respect to any Product throughout the
Territory (such Trademarks, the “Product Trademarks”); provided however, that sanofi pasteur
shall not, and shall not permit its Affiliates, to use in their respective businesses, any
Trademark that is confusingly similar to, misleading or deceptive with respect to, or that
dilutes any of the Trademarks used by Emergent or its Affiliates in their respective
businesses.
	 
	6.6	 	Combination Products
	 
	 	 	Without prejudice to its obligations under this Agreement, sanofi pasteur shall be entitled
to make all strategic decisions relating to the Commercialisation of 

37

 

	 	 	Combination Products
including in relation to launch and pricing; provided that sanofi pasteur shall promptly
inform Emergent of any such decisions and shall provide such further information and explanation of such decision as Emergent may reasonably request.
	 
	6.7	 	Emergent Distribution Option
	 
	 	 	In the event that sanofi pasteur wishes to appoint a Third Party to distribute, co-market or
co-promote any Product, or act as its sales representative or commissionaire for any
Product, in any country in the Territory or is contemplating any similar arrangement, sanofi
pasteur shall notify Emergent accordingly and shall, at Emergent’s request, and to the
extent that any contractual obligation that sanofi pasteur may have with Third Parties does
not prohibit it from doing so, consider Emergent as a potential appointee in such country
and in deciding which (if any) person to appoint in such country shall in all respects treat
Emergent equally with any Third Party being considered for such appointment.
	 
	7.	 	MILESTONE AND ROYALTY PAYMENTS
	 
	7.1	 	Upfront Fee
	 
	 	 	sanofi pasteur shall pay Emergent a non-refundable, non-creditable upfront fee in the amount
of Three Million Euros (€ 3,000,000) in immediately available funds on the date of this
Agreement provided that such payment shall be made against an invoice issued by Emergent.
	 
	7.2	 	Milestone Payments
	 
	7.2.1	 	Milestone Events. sanofi pasteur shall, with respect to the Products, make each of the
following non-refundable, non-creditable payments to Emergent in accordance with Clause 7.2.2
on the first occurrence of the corresponding milestone event:

	 	 	 	 	 	 
	 	 	 	 	 	Milestone
	 	 	 	Milestone Event	 	Payments
	1	 	 	[**]

	 	€ [**]
	2	 	 	[**]

	 	€ [**]
	3	 	 	[**]

	 	€ [**]
	4	 	 	[**]

	 	€ [**]
	5	 	 	[**]

	 	€ [**]
	6	 	 	[**]

	 	€ [**]
	7	 	 	[**]

	 	€ [**]
	8	 	 	[**]

	 	€ [**]

38

 

	 	 	 	 	 	 
	 	 	 	 	 	Milestone
	 	 	 	Milestone Event	 	Payments
	9	 	 	[**]

	 	€ [**]
	10	 	 	[**]

	 	€ [**]
	11	 	 	[**]

	 	€ [**]
	 

	7.2.2	 	Notice that a Milestone Event has Occurred and Payment. sanofi pasteur or Emergent (as the
case may be) shall provide the other Party with prompt written notice upon each occurrence of
a milestone event set out in Clause 7.2.1. On such occurrence, Emergent shall issue an
invoice for the amount due and sanofi pasteur shall pay such within ten (10) days of the end
of the calendar month in which it received such invoice.
	 
	7.2.3	 	Milestone payments paid only once. For the avoidance of doubt (a) milestones 1 to 11
(inclusive) set forth in Clause 7.2.1 shall be payable no more than once, irrespective of the
number of trigger events associated with any such given milestone and irrespective of whether
the milestone is triggered by the activities of sanofi pasteur, its Affiliates or any
Sublicensee; and (b) each of milestones 1 to 5 (inclusive) are payable prior to milestones 6
or 8 and if any of milestones 1 to 5 (inclusive) has not been paid when either milestone 6 or
8 becomes payable sanofi pasteur shall immediately pay such unpaid milestone.
	 
	7.2.4	 	Definition. For the purpose of this Clause 7.2 an “Efficacy and Effectiveness Study” means
a study designed and sufficiently powered to show that a vaccine candidate confers a reduction
in the infection rate in cases per thousand or the reduction of clinical signs of confirmed
serogroup B meningococcal disease in immunized populations (“Efficacy”) and demonstrates
direct and indirect protection or any clinical benefit obtained in a vaccinated population
(“Effectiveness”).
	 
	7.3	 	Royalties
	 
	 	 	In consideration of the licences granted by Emergent to sanofi pasteur under Clause 8.1 and
in recognition of Emergent’s contribution to the Development Programme and Emergent’s joint
ownership with sanofi pasteur of the Joint Technology, sanofi pasteur shall, subject to the
terms and conditions of this Agreement, pay Emergent on a country-by-country basis royalties
in an amount equal to the following:

	 	(a)	 	[**] percent ([**]%) of, in the case of a Unitary Product, the aggregate Net
Sales and, in the case of a Combination Product, the aggregate Adjusted Combination Net
Sales, in each case in a country, provided that the Emergent Patent Rights or Joint
Patent Rights in such country include at least one Valid Claim covering the Product;
	 
	 	(b)	 	[**] percent ([**]%) of, in the case of a Unitary Product, the aggregate Net
Sales and, in the case of a Combination Product, the aggregate Adjusted Combination Net
Sales, in each case in any country in which the Exploitation of such Product would not
infringe a Valid Claim of Emergent Patent Rights or Joint Patent Rights (or, for the
avoidance of doubt, there are no Emergent Patent Rights or Joint Patent Rights); and

39

 

	 	(c)	 	[**] percent ([**]%) of any license fees, upfront payments or milestones
received by sanofi pasteur or any of its Affiliates from any Sub-Licensee provided that
if a milestone is payable by such Sub-Licensee to sanofi pasteur or one of its
Affiliates on the occurrence of one of the events listed in Clause 7.2.1, sanofi
pasteur shall only be required to pay a royalty of [**] percent ([**]%) on the amount
(if any) by which the milestone payable by the Sub-Licensee on such occurrence exceeds
the amount payable by sanofi pasteur to Emergent on such occurrence pursuant to Clause
7.2.1.

	7.4	 	Adjustment of Royalty Rate
	 
	7.4.1	 	Royalty under Clause 7.3(a). If a Unitary Product (whether developed and launched as a
stand alone product or as a constituent of a Combination Product) contains one or more
Additional Antigens, the royalty payable pursuant to Clause 7.3(a) shall be adjusted according
to the number of Programme Antigens compared to the total number of Programme Antigens and
Additional Antigens in such Unitary Product as follows:

Number of Programme Antigens and Additional Antigens in a Unitary Product

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Number
of 

Programme 

Antigens in 

that Unitary

 Product
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	 	[**]	 	 	 	[**]	 	[**]	 	[**]	 	[**]
	 	[**]	 	 	 	 	 	[**]	 	[**]	 	[**]
	 	[**]	 	 	 	 	 	 	 	[**]	 	[**]
	 	[**]	 	 	 	 	 	 	 	 	 	[**]

	 	 	provided that, if the aggregate royalties payable by sanofi pasteur to (i) Emergent as set
out in the table above; and (ii) any Third Party pursuant to a sanofi pasteur In-Licence on
the sale of the Unitary Product (whether sold as a stand alone product or as a constituent
of a Combination Product) in the relevant country if and to the extent that such royalty is
payable for access to a Third Party Antigen in the Unitary Product or any adjuvant or for
access to any technology necessary or reasonably useful for the manufacture of any Programme
Antigen or Additional Antigen incorporated in such Unitary Product but, for the avoidance of
doubt, excluding any technology relating to delivery of the Product, ((i) and (ii) in
aggregate, the “Royalty Burden”) are equal to or less than [**] percent ([**]%) of Net Sales
of such Unitary Product or, if the Unitary Product is sold as a constituent of a Combination
Product, [**] percent ([**]%) of Adjusted Combination Net Sales of such Combination Product,
the royalty payable to Emergent pursuant to Clause 7.3(a) shall not be less than [**]
percent ([**]%). If on a recalculation of the Royalty Burden to include such increased
royalty to Emergent the Royalty Burden would be more than [**] percent ([**]%), such royalty
shall be reduced so that the Royalty Burden calculated to include the revised royalty
payable to Emergent equals [**] percent ([**]%). For the avoidance of doubt, the royalty
payable to Emergent pursuant to Clause 7.3(a) shall not in any event be less than the
applicable amount provided for in the royalty grid in this Clause 7.4.1. The Royalty Burden
shall be calculated at the time of the relevant sale of the Unitary

40

 

	 	 	Product or the Combination Product (as the case may be) and no specific royalty shall be
counted more than once.
	 
	7.4.2	 	Royalty under Clause 7.3(b). If a Unitary Product (whether developed and launched as a
stand alone product or as a constituent of a Combination Product) contains one or more
Additional Antigens the royalty payable pursuant to Clause 7.3(b) shall be adjusted according
to the number of Programme Antigens compared to the total number of Programme Antigens and
Additional Antigens in that Unitary Product as follows:

Number of Programme Antigens and Additional Antigens in a Unitary Product

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Number
of 

Programme 

Antigens in 

that Unitary 

Product
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	 	[**]	 	 	 	[**]	 	[**]	 	[**]	 	[**]
	 	[**]	 	 	 	 	 	[**]	 	[**]	 	[**]
	 	[**]	 	 	 	 	 	 	 	[**]	 	[**]
	 	[**]	 	 	 	 	 	 	 	 	 	[**]

	 	 	provided that, if the Royalty Burden is equal to or less than [**] percent ([**]%) of Net
Sales of such Unitary Product, or, if such Unitary Product is sold as a constituent of a
Combination Product, [**] percent ([**]%) of Adjusted Combination Net Sales of such
Combination Product, the royalty payable to Emergent pursuant to Clause 7.3(b) shall not be
less than [**] percent ([**]%). If on a recalculation of the Royalty Burden to include
such increased royalty to Emergent the Royalty Burden would be more than [**] percent
([**]%), such royalty shall be reduced so that the Royalty Burden calculated to include the
revised royalty payable to Emergent equals [**] percent ([**]%). For the avoidance of
doubt, the royalty payable to Emergent pursuant to Clause 7.3(b) shall not in any event be
less than the applicable amount provided for in the royalty grid in this Clause 7.4.2.
	 
	7.4.3	 	Minimum Royalties for Combination Products. If the Product is sold as a Combination
Product, the royalty payable to Emergent pursuant to Clause 7.3 (as adjusted pursuant to
Clause 7.4.1 or Clause 7.4.2, if applicable) shall be subject to a minimum as set out in the
definition of Net Sales.
	 
	7.4.4	 	Verification of Royalty Burden. If at any time during the Term, either or both Clauses
7.4.1 or 7.4.2 apply to reduce the royalty payable pursuant to Clause 7.3, Emergent shall be
entitled to appoint an independent Third Party to verify the applicable Royalty Burden.
sanofi pasteur shall provide such Third Party with all information necessary for him to verify
the applicable Royalty Burden including access to any agreements pursuant to which a royalty
included in the Royalty Burden is payable and any other information necessary to explain or
verify the amount of such royalty with respect to any country at the relevant time. All
agreements and information made available for inspection shall be deemed to be sanofi pasteur
Confidential Information. For the avoidance of doubt, any such Third Party shall prior to
such inspection enter into a non-disclosure agreement in a form reasonably

41

 

	 	 	acceptable to sanofi pasteur. The Third Party shall disclose to the Parties the correct
Royalty Burden for the relevant country at the relevant time and the specific details
concerning any discrepancy with sanofi pasteur’s calculation of the Royalty Burden but no
other information shall be provided to Emergent.
	 
	7.4.5	 	Worked Examples. The Parties have set forth in Schedule 10 illustrative examples of the
calculation of royalties that would be payable on Unitary Products and Combination Products in
certain circumstances pursuant to Clauses 7.3 and 7.4.
	 
	7.5	 	Royalty Term
	 
	 	 	sanofi pasteur’s obligation to pay royalties to Emergent under Clause 7.3 on Net Sales shall
terminate, on a country-by-country basis, with respect to any Product on the later to occur
of (i) the [**] anniversary of the First Commercial Sale in such country; and (ii) the
expiration date in such country of the last to expire of any Emergent Patent Rights or Joint
Patent Rights that include at least one Valid Claim covering such Product in such country.
Upon termination of the royalty obligations of sanofi pasteur under this Clause 7.5 in a
country, the licence grants to sanofi pasteur in Clause 8.1 shall become non-exclusive,
irrevocable and fully paid-up with respect to such country and Net Sales of such Product in
such country shall be excluded from the royalty calculations set out in Clause 7.3.
	 
	7.6	 	Royalty Statements
	 
	7.6.1	 	Written Reports. During the Term, following the First Commercial Sale, sanofi pasteur shall
on or before the thirtieth (30th) day following the end of each Quarter deliver to Emergent a
written report for that Quarter showing, in each case on a country-by-country basis:

	 	(a)	 	invoiced sales, Net Sales and, if applicable, Adjusted Combination Net Sales
(including the calculation of Adjusted Combination Net Sales);
	 
	 	(b)	 	the number of units of Product sold;
	 
	 	(c)	 	if there has been any adjustment to the royalty rate pursuant to Clause 7.4,
the basis and calculation of such adjustment and a breakdown of the Royalty Burden;
	 
	 	(d)	 	the amount of royalties due on such Net Sales or Adjusted Combination Net Sales
(calculated in accordance with GAAP and Clauses 7.3 and 7.4); and
	 
	 	(e)	 	all license fees, upfront payments or milestones received by sanofi pasteur or
any of its Affiliates from any Sub-Licensee and the amount payable pursuant to Clause
7.3(c).

	7.6.2	 	Invoices. sanofi pasteur shall, at the same time as it delivers each written report
required by Clause 7.6.1, submit to Emergent a model form invoice for the amount of royalties
shown in each such written report to be due. Emergent shall issue an invoice for the
royalties payable according to such written report and such model form invoice. sanofi
pasteur acknowledges and agrees that all such invoices shall be issued by Emergent in reliance
on the information provided by sanofi pasteur. Neither the 

42

 

	 	 	issue of any such invoice nor
receipt of payment, shall be, nor shall either be deemed to be, acceptance by Emergent of the accuracy of any written report and shall in each case
be without prejudice to Emergent’s rights to audit or dispute the amount of royalties
payable.
	 
	7.6.3	 	Payments. sanofi pasteur shall, within ten (10) days of the end of the month in which it
receives the relevant invoice in accordance with Clause 7.6.2, pay to Emergent or, if not
prohibited by law, to whomsoever Emergent shall direct in writing (provided that, for the
avoidance of doubt, the provisions of Clause 7.9.1 shall continue to apply to any payment to
any such designee and sanofi pasteur shall not be required to incur any additional cost as a
result of a payment to any such designee), in Euros to a bank designated in writing by
Emergent (such designation to include relevant wiring instructions), or in such other manner
as may be agreed between the Parties from time to time, the amount stated in such invoice.
	 
	7.6.4	 	Currency Conversions. Where the Product is sold in a currency other than Euros all amounts
payable will first be calculated in the currency of sale and then converted by sanofi pasteur
into Euros at the mid-market exchange rate(s) quoted by Barclays Bank plc in London (or such
other bank as the Parties may agree from time to time) for Euros in exchange for that other
currency on the final day of the period to which the payment relates.
	 
	7.7	 	Records and Audits
	 
	7.7.1	 	Records. sanofi pasteur shall keep, and shall cause its Affiliates and Sub-Licensees to
keep, complete and accurate books and financial records containing all data necessary for the
calculation of the amounts payable by sanofi pasteur pursuant to this Agreement including with
respect to the calculation and actual payment of the Royalty Burden, which books and financial
records shall be kept in accordance with GAAP and shall be retained by sanofi pasteur, and its
Affiliates and Sub-Licensees as appropriate, until three (3) years after the end of the Year
to which they relate.
	 
	7.7.2	 	Audit Procedure. Upon the written request of Emergent, sanofi pasteur shall permit an
independent certified public accounting firm of internationally recognised standing selected
by Emergent, and reasonably acceptable to sanofi pasteur, to inspect and audit, during normal
business hours and upon reasonable prior written notice, such of the records of sanofi pasteur
as may be reasonably necessary to verify the accuracy of the reports provided in accordance
with Clause 7.6; provided that Emergent shall not have the right to inspect or audit records
for any Year more than once or records more than three (3) years old unless a discrepancy is
found. If such accounting firm concludes that sanofi pasteur owed additional amounts to
Emergent during such period, sanofi pasteur shall pay Emergent the difference between the
amount actually owed, as determined by the accounting firm, and the amount actually paid by
sanofi pasteur, with interest calculated in accordance with Clause 7.8 from the date
originally due to the date of payment, within thirty (30) days after the date on which such
accounting firm’s written report is delivered to sanofi pasteur. If the accounting firm
determines that there has been an underpayment, sanofi pasteur shall bear all costs related to
such audit otherwise Emergent shall bear the cost of such audit. All books and financial
records made available for inspection or audit shall be deemed to be sanofi pasteur
Confidential Information. For the avoidance of doubt, any such independent accounting firm
shall, prior to such inspection, enter into a non-

43

 

	 	 	disclosure agreement in a form reasonably
acceptable to sanofi pasteur. The accounting firm shall disclose to the Parties whether nor not the payment in question was
accurately calculated by sanofi pasteur and the specific details concerning any
discrepancies but no other information shall be provided to Emergent.
	 
	7.7.3	 	Access to Sub-Licensees. sanofi pasteur shall include in each sub-licence granted by it
pursuant to this Agreement a provision requiring the Sub-Licensee to make reports to sanofi
pasteur, to keep and maintain records of sales made pursuant to such sub-licence and to grant
access to such records by Emergent’s independent accountant to the same extent required of
sanofi pasteur under this Agreement.
	 
	7.8	 	Interest
	 
	 	 	All amounts due from sanofi pasteur to Emergent under this Agreement shall be paid by wire
transfer in immediately available funds to an account designated by Emergent. Any payment
that is not paid on the date such payment is due under this Agreement shall bear interest at
a rate equal to the lesser LIBOR plus two (2) percentage points and the maximum rate
permitted by law, calculated on the number of days such payment is delinquent, compounded
monthly. For the purposes of this Agreement LIBOR shall mean the London Interbank Offered
Rate as calculated by the British Bankers’ Association or, if LIBOR ceases to be available,
the base rate of a London bank selected by Emergent.
	 
	7.9	 	Withholding
	 
	7.9.1	 	Payments. Any consideration payable by either Party shall be paid free and clear of any
deduction or withholding for or on account of tax, setoffs or counterclaims whatsoever, save
for any deduction or withholding required by Applicable Law. Where such a deduction or
withholding is required to be made, the Party making the deduction or withholding shall give
the other Party such assistance as may be necessary or expedient to enable that other Party to
claim exemption therefrom or a reduction thereof and upon request of such other Party shall
provide documentation in a form sufficient to evidence the payment of the tax. Such
assistance shall include the provision by sanofi pasteur to Emergent of such forms as the
relevant tax authority may require Emergent to complete.
	 
	7.9.2	 	Information to be provided by Emergent. Emergent shall complete and return to sanofi
pasteur any form provided by sanofi pasteur that is required by the relevant tax authorities
from time to time (including, if required, prior to the first payment in any calendar year) to
(i) attest Emergent’s fiscal residence and (ii) obtain the application of the reduced
withholding tax rate or the exemption of withholding tax rate, according to the relevant
bilateral convention for the prevention of double taxation. In the event that Emergent fails
to return to sanofi pasteur such forms duly completed and signed before the due date for the
relevant payment, sanofi pasteur will, if and to the extent required by Applicable Law,
declare and pay withholding tax at the rate prescribed by Applicable Law, and such tax will be
deducted from the amount payable by sanofi pasteur to Emergent. sanofi pasteur shall remit
the withholding tax to the proper tax authority and proof of payment of such tax shall be
secured and sent to Emergent as evidence of such payment; provided, however, that Emergent
may, at any time prior to a payment due date, specify a later due date for payment, and sanofi
pasteur shall delay making such payment to such later due date (without incurring any
liability 

44

 

	 	 	pursuant to Clause 7.8), in order to provide Emergent with additional time in which
to obtain the required information
or otherwise secure approval for
exemption of withholding tax or
reduction of the withholding tax
rate.
	 
	7.10	 	VAT
	 
	 	 	If VAT is payable on any supply by either Party under this agreement, the Party receiving
the supply shall, in addition to any consideration due hereunder with respect to such
supply, promptly pay to the Party making the supply the amount of such VAT upon receipt of a
valid VAT invoice in the prescribed form with respect to such supply.
	 
	7.11	 	Changing Standards
	 
	 	 	Each Party shall consider in good faith, and not unreasonably refuse, any request by the
other Party to modify any reporting requirements or provisions relating to records as set
out in this Agreement in a manner necessary to permit the requesting Party to comply with
any reporting or financial standards applicable to it or its Affiliates from time to time.
	 
	8.	 	LICENCE GRANTS
	 
	8.1	 	Emergent Licence Grants
	 
	8.1.1	 	Licence under Emergent Technology. Subject to the terms of this Clause 8.1.1 and the other
terms of this Agreement, Emergent hereby grants to sanofi pasteur an exclusive (even as to
Emergent) worldwide licence during the term of this Agreement in the Territory in the Field,
with the right, subject to Clause 8.1.3, to grant sub-licences, under the Emergent Technology
and Emergent’s right and interest in Joint Technology:

	 	(a)	 	to research and Develop any Programme Antigen; and
	 
	 	(b)	 	to Exploit any Product;

	 	 	provided that (i) no Product shall include, and Emergent grants no rights to Exploit, any
Terminated Antigen or Repatriated Antigen; and (ii) Emergent expressly reserves for itself
such rights as may be necessary or reasonably useful to (A) perform the tasks assigned to it
in the Development Plan and any Annual Development Plan and to conduct the Emergent
Activities in accordance with this Agreement; (B) Exploit any Terminated Antigen outside the
Field; (C) Exploit any Repatriated Antigen in or outside the Field; and (D) Exploit any
Co-Exclusive Antigen in or outside the Field provided that such rights shall, in the Field,
be co-exclusive with sanofi pasteur. For the avoidance of doubt, sanofi pasteur shall have
no right to research, Develop or otherwise Exploit any Terminated Antigen or Repatriated
Antigen, and Emergent will have no right to research, Develop or otherwise Exploit any
Terminated Antigen in the Field.
	 
	8.1.2	 	Regulatory Documentation. Subject to the other terms of this Agreement, Emergent and its
Affiliates hereby grant to sanofi pasteur and its Affiliates a co-exclusive (with Emergent and
its Affiliates) licence and right of reference in the Territory during the 

45

 

	 	 	term of this
Agreement, with the right to grant sub-licences subject to Clause 8.1.3, under Emergent’s
rights and interests in the Regulatory Documentation for or relating to any Clinical Candidate or Product to the extent not otherwise assigned pursuant to Clause
5.5.2 so as to enable sanofi pasteur to exercise its rights under the grants set out in
Clause 8.1.1. Emergent shall, as soon as reasonably practicable following sanofi pasteur’s
written request, provide sanofi pasteur with access to all such Regulatory Documentation and
all information contained therein.
	 
	8.1.3	 	Right to Sublicense. sanofi pasteur shall be entitled to grant sublicences under the rights
granted pursuant to Clause 8.1.1 and 8.1.2 subject to Emergent’s prior written consent, such
consent not to be unreasonably withheld, conditioned or delayed. In the event that sanofi
pasteur wishes to obtain Emergent’s consent to a proposed sublicence pursuant to Clause 8.1.1
or Clause 8.1.2, sanofi pasteur shall provide written notice to Emergent of the proposed
sublicence at least thirty (30) days prior to its execution and provide copies to Emergent of
each such sublicence with the financial terms redacted but otherwise substantially in the form
to be executed at least ten (10) Business Days prior to such execution. Within ten (10)
Business Days of execution of such sublicence, sanofi pasteur shall provide a copy of the
sublicence in the form executed. For the avoidance of doubt, any such sublicence shall be
consistent with the terms of this Agreement (including with regard to audit rights and
confidentiality) and shall not relieve sanofi pasteur of its obligations pursuant to this
Agreement. Sub-Licensees shall not be entitled to grant further sublicenses under the
Emergent Technology or Joint Technology.
	 
	8.2	 	Materials
	 
	 	 	Emergent hereby grants to sanofi pasteur the right to use Materials provided by Emergent to
sanofi pasteur pursuant to this Agreement provided that any such Materials including any
replication, copy, progeny or derivative thereof and any Materials derived from such
Materials (the “Emergent Materials”), shall be used solely for the Development Activities as
provided in the Development Plan or any Annual Development Plan and in compliance with
Applicable Law. sanofi pasteur shall not make any Emergent Materials available to any Third
Party without Emergent’s prior written consent. Any Emergent Materials are provided subject
to Clause 12.2 and all right, title and interest in and to any such Emergent Materials shall
be, and remain, vested in Emergent.
	 
	8.3	 	sanofi pasteur Licence Grants
	 
	8.3.1	 	Development. Subject to the other terms of this Agreement, sanofi pasteur and its
Affiliates hereby grant to Emergent and its Affiliates a non-exclusive (with sanofi pasteur),
royalty-free, worldwide licence, without the right to grant sub-licences (except as necessary
or reasonably useful in connection with any engagement by Emergent of a Third Party to conduct
any Emergent Activity as provided for in any Annual Development Plan), under the sanofi
pasteur Technology and sanofi pasteur’s right and interest in the Joint Technology solely to
conduct Emergent Activities.
	 
	8.3.2	 	Repatriated Antigens and Co-Exclusive Antigens. Subject to the other terms of this
Agreement, sanofi pasteur and its Affiliates hereby grant to Emergent and its Affiliates (a)
an exclusive, royalty-free, worldwide licence, with the right to grant sub-licences under
sanofi pasteur’s right and interest in the Joint Technology to 

46

 

	 	 	Exploit Repatriated Antigens in
and outside the Field; and (b) a co-exclusive (with sanofi pasteur), royalty-free, worldwide
licence, with the right to grant a Third Party a sub-licence under sanofi pasteur’s right and
interest in the Joint Technology to Exploit
Co-Exclusive Antigens in and outside the
Field. For the purpose of this Agreement,
Emergent’s co-exclusive right to Exploit the
Co-Exclusive Antigens shall mean that
Emergent is entitled to Exploit the
Co-Exclusive Antigens itself or license or
sub-license one Third Party to Exploit the
Co-Exclusive Antigens, in or outside the
Field.
	 
	8.4	 	No Other Rights
	 
	 	 	For avoidance of doubt, no Party or any of its Affiliates shall have any right, express or
implied, to the Know How, Patent Rights or other intellectual property of the other Party,
except as expressly provided in Clauses 8.1, 8.2, 14.1 and 14.3.
	 
	9.	 	INTELLECTUAL PROPERTY
	 
	9.1	 	Ownership of Intellectual Property
	 
	9.1.1	 	Emergent Intellectual Property. Subject to the licence granted by Emergent to sanofi
pasteur in Clause 8.1, as between the Parties, Emergent shall own and retain all right, title
and interest in and to the Emergent Technology.
	 
	9.1.2	 	sanofi pasteur Intellectual Property. Subject to the licence granted by sanofi pasteur to
Emergent in Clause 8.3, as between the Parties, sanofi pasteur shall own and retain all right,
title and interest in and to the sanofi pasteur Technology.
	 
	9.1.3	 	Joint Intellectual Property. As between the Parties, each Party shall own an undivided
one-half interest in and to the Joint Technology. Except as expressly provided for in this
Agreement, neither Party shall use, or permit any Third Party to use, any Joint Technology for
any purpose, other than the Development or Commercialisation of a Programme Antigen or Product
in accordance with this Agreement, without the prior written consent of the other Party.
	 
	9.1.4	 	Determination of Ownership. The determination of whether any Technology is made, developed
or conceived by or on behalf of a Party in the conduct of the Development Programme, and
consequently the ownership of such Technology, shall be determined in good faith by both
Parties in accordance with Applicable Law of the United States. All such determinations shall
be documented to ensure that any applications for Patent Rights reflect appropriate
inventorship and that inventions and Patent Rights are assigned to or held by the appropriate
Party. In the event of a disagreement, the Parties agree to jointly select and appoint an
independent outside patent counsel (who is not the usual patent counsel of either party), or
failing agreement as to the identity of such patent counsel within ten (10) days of either
Party notifying the other that it requires such appointment, independent patent counsel
appointed by Emergent, with the consent of sanofi pasteur, which consent shall not be
unreasonably withheld, conditioned or delayed. Within twenty (20) days of such appointment,
each of the Parties shall furnish to the expert (subject to such obligations of
confidentiality and non-use as may be reasonably required by them), with a copy to the other
Party, a written summary of such Party’s position and any relevant evidence supporting such
position including all information necessary for the expert to make such determination. Any
such written summary and evidence shall not, unless the 

47

 

	 	 	Parties otherwise agree, exceed 15,000
words. Within fifteen (15) days of receipt of the other Party’s summary (or such longer
period as may be required to ensure the presence of the expert) there shall be a one-day oral hearing before the expert at which each Party shall be
given an equal opportunity to present its own position and hear and respond to the oral
presentation given by the other Party. Within fifteen (15) days of such oral hearing, each
Party may submit a written rebuttal of the other Party’s summary providing that any rebuttal
shall not exceed 5,000 words. The expert shall determine inventorship and ownership of such
Technology in accordance with this Agreement. The decision of such outside patent counsel
shall be final and binding on the Parties. In the event the independent outside patent
counsel rules in favour of sanofi pasteur’s position then Emergent shall pay the fees and
expenses of the expert, and in the event that the independent outside patent counsel rules
in favour of Emergent’s position then sanofi pasteur shall pay the fees and expenses of the
expert.
	 
	9.1.5	 	Disclosure. During the Development Programme, each Party shall promptly disclose, and shall
cause its Affiliates and sub-licensees to disclose, to the other Party in writing the
characterisation, conception, development, derivation, discovery, generation, identification
or making of any Technology in the course of work conducted under or in connection with this
Agreement.
	 
	9.1.6	 	Assignment. Each Party shall, and does hereby, assign, and shall cause its Affiliates,
sub-contractors and sub-licensees to so assign, to it or to the other Party, as applicable,
without additional compensation, such right, title and interest in and to any Know How, Patent
Rights or other intellectual property, as is necessary to fully effect the ownership
provisions set out in this Clause 9.1.
	 
	9.1.7	 	Registration and Protection of Trademarks. sanofi pasteur shall have the sole right, at its
sole cost and expense, to obtain, maintain, register, extend, enforce and defend trademark
protection for all Product Trademarks.
	 
	9.2	 	Filing, Prosecution and Maintenance of Patent Rights
	 
	9.2.1	 	Emergent Patent Rights. Emergent shall have the first right (but not the obligation) to
prepare, file, prosecute and maintain the Emergent Patent Rights. Emergent shall diligently
file and prosecute claims relating to Clinical Candidates in the countries specified in
Schedule 9. Emergent shall provide sanofi pasteur at least once per Year with an updated list
of the patents and patent applications comprising the Emergent Patent Rights. Emergent shall
also notify sanofi pasteur of the lapse, revocation, surrender or abandonment of any patent or
patent application included among the Emergent Patent Rights.
	 
	9.2.2	 	sanofi pasteur Patent Rights. sanofi pasteur shall have the first right (but not the
obligation) to prepare, file, prosecute and maintain the sanofi pasteur Patent Rights
throughout the Territory, in its sole discretion. In the event that sanofi pasteur shall
grant Emergent a license to sanofi pasteur Patent Rights pursuant to Clauses 14.3.1 or 14.3.2
then sanofi pasteur shall provide Emergent with a list of all patents and patent applications
comprising sanofi pasteur Patent Rights.
	 
	9.2.3	 	Joint Patent Rights. Decisions regarding the preparation, filing, prosecution and
maintenance of the Joint Patent Rights shall be made by the SC. Upon the identification of
Joint Technology the SC shall: (i) promptly discuss such Joint 

48

 

	 	 	Technology; (ii) promptly
discuss the desirability of filing patent application(s) covering such Joint Technology, and
the relevant countries for filing which shall in any event include those countries listed in
Schedule 9; and (iii) make the final decision with respect to any such filings as soon as
practicable. Thereafter, sanofi pasteur, at its expense and through patent attorneys or
agents of its choice and reasonably acceptable to Emergent, shall prepare, file, prosecute and
maintain the Joint Patent Rights provided that Emergent shall at sanofi pasteur’s request and
expense make such filings and take such other actions in relation to the prosecution and
maintenance of the Joint Patent Rights as the SC considers appropriate from time to time.
Such applications shall be filed expeditiously at the appropriate time in all countries listed
in Schedule 9 and all other countries in which the SC determines patent protection is
necessary or desirable. sanofi pasteur shall not abandon any such application for patent or
permit any patent issuing therefrom to lapse in a country listed in Schedule 9 without
Emergent’s prior written consent.

	9.2.4	 	Consultation. Each Party (in this paragraph, the “Controlling Party”) shall regularly
provide the other Party with copies of all patent applications to be filed by it under Clause
9.2 and other material submissions and correspondence with any patent authorities, as
applicable, in sufficient time to allow for review and comment by the other Party. In
addition, to the extent practicable, the Controlling Party shall provide the other Party and
its counsel with an opportunity to consult with the Controlling Party and its counsel
regarding the filing and contents of any application, amendment, registration, submission,
response or correspondence with any patent authorities with respect to, and the Controlling
Party shall consider in good faith the reasonable requests of the other Party regarding the
filing and prosecution of such Patent Rights.
	 
	9.2.5	 	Election not to File, Prosecute or Maintain. If a Party elects not (i) to pursue in any
country in the Territory the filing, prosecution or maintenance of Patent Rights in respect of
which it has the first right or obligation to file, prosecute or maintain pursuant to Clauses
9.2.1, 9.2.2, 9.2.3 or 9.2.4, or (ii) to take any other action with respect to such Patent
Rights in a country in the Territory that is necessary or useful to establish or preserve
rights thereto, then such Party shall so notify the other Party promptly in writing to enable
the other Party to meet any deadlines by which an action must be taken to establish or
preserve a right in such Patent Rights, as applicable, in such country. The Party receiving
such notice shall have the right, but not the obligation, to pursue the filing or
registration, or support the continued prosecution or maintenance, of such Patent Rights in
such country through patent attorneys or agents of its choice and reasonably acceptable to the
other Party. If the Party receiving such notice elects to pursue such filing or registration,
as the case may be, or to continue such support, then such Party shall notify the other Party
of such election and the other Party shall, and shall cause its Affiliates to, reasonably
cooperate with such Party in this regard. If Emergent elects to pursue the filing or
registration, or support the continued prosecution or maintenance of Joint Patent Rights in a
country other than a Major Market Country and sanofi pasteur subsequently Commercialises a
Product in such country, sanofi pasteur shall reimburse Emergent for all out-of-pocket costs
and expenses incurred in filing, prosecuting or maintaining such Patent Rights in such
country. For clarity, sanofi
pasteur shall not be entitled to make an election
pursuant to this Clause 9.2.5 with respect to Joint
Patent Rights in any Major Market Country.

49

 

	 
	9.3	 	Enforcement of Patent Rights
	 
	9.3.1	 	Notification of Infringement. If either Party learns of any infringement or threatened
infringement by a Third Party of the sanofi pasteur Patent Rights, the Emergent Patent Rights
or the Joint Patent Rights, such Party shall promptly notify the other Party and shall provide
such other Party with any available evidence of such infringement.
	 
	9.3.2	 	Enforcement.

	 	(a)	 	In the event of any infringement of an Emergent Patent Right, a sanofi pasteur
Patent Right or a Joint Patent Right in the Territory, sanofi pasteur shall have the
first right, but not the obligation, to attempt to remove such infringement by
commercially appropriate steps, including filing an infringement suit or taking other
similar action. If required by Applicable Law in order for sanofi pasteur to prosecute
such suit, Emergent shall join such suit as a party, and sanofi pasteur shall reimburse
Emergent on a Quarterly basis for reasonable out-of-pocket costs and expenses incurred
by Emergent with respect to such joinder.
	 
	 	(b)	 	If sanofi pasteur fails within three (3) months following notice of
infringement to take commercially appropriate steps to remove such infringement in
accordance with paragraph (a) above, then Emergent shall have the right to attempt to
remove such infringement; provided, however, that if sanofi pasteur has commenced
negotiations with an alleged infringer for discontinuance of such infringement within
such three-month period, sanofi pasteur shall have an additional period of three (3)
months to conclude its negotiations before Emergent may bring suit for such
infringement.
	 
	 	(c)	 	The Party not enforcing the applicable Patent Rights shall provide reasonable
assistance to the other Party, including providing access to relevant documents and
other evidence and making its employees available at reasonable business hours,
subject, if the enforcing Party is sanofi pasteur, to reimbursement to Emergent on a
Quarterly basis of any reasonable out-of-pocket costs and expenses incurred by
Emergent. Any damages or other monetary awards recovered pursuant to this Clause 9.3.2
shall be allocated first to the costs and expenses of the Parties. Any amounts
remaining shall be deemed to be [**].

	9.3.3	 	Settlement with a Third Party. The Party that controls the prosecution of a claim with
respect to any Patent Right shall also have the right to control settlement of such claim;
provided, however, that no settlement shall be entered into without the written consent of the
other Party if such settlement would materially adversely affect the interests of such other
Party. Any amount paid by a Third Party pursuant to this Clause 9.3.3 shall be allocated
first to the costs and expenses of the Parties. Any amounts remaining shall be deemed to be
[**].
	 
	9.4	 	Infringement of Third Party Rights
	 
	9.4.1	 	Third Party Infringement Suit. In the event that a Third Party institutes a Patent Right
infringement suit against sanofi pasteur or Emergent during the term of this Agreement,
alleging that the Exploitation of a Programme Antigen or Product in 

50

 

	 	 	accordance with this
Agreement infringes the intellectual property rights of such Third Party, then sanofi pasteur
shall have the first right, but not the obligation, at its sole cost and expense, to assume
direction and control of the defence of claims arising therefrom (including the right to
settle such claims at its sole discretion, provided that sanofi pasteur shall not settle or
otherwise compromise any such claims in any way that would materially adversely affect the
Emergent Patent Rights). Emergent shall assist and cooperate in connection with the defence
of such suit upon the reasonable request of sanofi pasteur, subject to sanofi pasteur’s
reimbursement on a Quarterly basis of any reasonable out-of-pocket costs and expenses incurred
by Emergent.
	 
	9.5	 	Patent Extensions
	 
	 	 	The SC shall make determinations as to whether to seek patent term extensions, including
supplementary protection certificates and any other extensions that are now or become
available in the future regarding the Emergent Patent Rights, the sanofi pasteur Patent
Rights or the Joint Patent Rights with respect to any Product in each country in the
Territory so as to secure optimal protection for such Product under Applicable Law; provided
that no such extensions shall be sought without the consent of both Parties. Emergent shall
be responsible for seeking any such extensions for the Emergent Patent Rights and sanofi
pasteur shall be responsible for seeking any such extensions for the sanofi pasteur Patent
Rights and the Joint Patent Rights. Each Party shall reasonably cooperate, as requested by
the other Party, to implement such decisions of the SC.
	 
	9.6	 	Patent Costs
	 
	 	 	Except as expressly provided for in this Clause 9, sanofi pasteur shall be responsible for
all costs incurred after the Effective Date in connection with the filing, prosecution,
maintenance (including in connection with oppositions, re-examinations, interferences and
re-issues), defence (including in connection with proceedings for declaratory judgment) and
enforcement of the Emergent Patent Rights, the Joint Patent Rights and the sanofi pasteur
Patent Rights. Within thirty (30) days of the end of each Quarter, Emergent shall provide
sanofi pasteur with an invoice that specifies the reasonable and verifiable out-of-pocket
costs (including the expenses paid to outside legal counsel and experts, filing and
maintenance expenses) incurred by Emergent in connection with (a) the preparation, filing,
prosecution and maintenance of Emergent Patent Rights and Joint Patent Rights (including in
connection with seeking patent term extensions); (b) any infringement action relating to the
Emergent Patent Rights or Joint Patent Rights, or otherwise for sanofi pasteur’s account
pursuant to this Clause 9, in such Quarter and sanofi pasteur shall pay such amount to
Emergent within thirty (30) days of receiving such invoice.
	 
	10.	 	CONFIDENTIALITY
	 
	10.1	 	Confidentiality Requirements
	 
	 	 	Each Party (the “Receiving Party”) shall treat any and all Confidential Information that it
receives from the other Party (the “Disclosing Party”) under this Agreement as
strictly confidential and shall not disclose the same to any Third Party or use it except in
connection with the Development and Commercialisation of a Product in 

51

 

	 
	 	 	accordance with this
Agreement without the prior written consent of the Disclosing Party, except for any part of
the Confidential Information which:

	 	(a)	 	is known to the Receiving Party prior to the date of first disclosure by the
Disclosing Party as evidenced by written record or other proof;
	 
	 	(b)	 	is or shall become in the public domain through no breach of this Agreement;
	 
	 	(c)	 	is acquired lawfully by the Receiving Party from a Third Party that has no
confidentiality obligation to the Disclosing Party; or
	 
	 	(d)	 	has been independently discovered or developed (as demonstrated by
contemporaneous written or electronic evidence maintained in the ordinary course of
business of the Receiving Party) by employees or agents of the Receiving Party without
access to, or use of, Confidential Information disclosed by the Disclosing Party to the
Receiving Party.

	 	 	Specific aspects or details of Confidential Information shall not be deemed to be in the
public domain or in the possession of a Party merely because the Confidential Information is
embraced by more general information in the public domain or in the possession of such
Party. Further, any combination of Confidential Information shall not be considered in the
public domain or in the possession of a Party merely because individual elements of such
Confidential Information are in the public domain or in the possession of such Party unless
the combination and its principles are in the public domain or in the possession of such
Party.
	 
	10.2	 	Confidentiality of Unpatented Joint Technology
	 
	 	 	Each Party shall treat all unpatented Joint Technology as strictly confidential and shall
not disclose the same to any Third Party except to the extent that it is or shall become
public knowledge through no fault on its part and neither Party shall use such Joint
Technology except in connection with the Development and Commercialisation of a Product in
accordance with this Agreement.
	 
	10.3	 	Exceptions
	 
	 	 	Notwithstanding the terms of Clauses 10.1 and 10.2 each Party may disclose any information
and data in respect of which it is restricted pursuant to either Clause:

	 	(a)	 	to its employees but only on a “need to know” basis provided each such employee
enters into a confidentiality agreement at least as restrictive with respect to the
Confidential Information as this Clause 10; or
	 
	 	(b)	 	to Affiliates, permitted sub-licensees and sub-contractors and their respective
employees (but only on a “need to know” basis) and Third Party consultants, scientific
and clinical investigators and others (in each case, subject to such persons entering
into a confidentiality agreement at least as restrictive with respect to the
Confidential Information as this Clause 10) where reasonably necessary for carrying out
the purposes of this Agreement or, in the case of
Affiliates and such Affiliates employees, for the conduct of its, or such
Affiliates’, business;

52

 

	 
	 	(c)	 	on a “need to know” and confidential basis to its, or its Affiliates’, legal
and financial advisors to the extent such disclosure is reasonably
necessary in connection with such Party’s activities as expressly permitted by this Agreement or for
the conduct of its, or such Affiliates’, business;
	 
	 	(d)	 	to a prospective assignee pursuant to Clause 19.1 and such Third Party’s
employees, advisors, representatives, Affiliates, partners, members, shareholders and
financing sources in each case on a “need to know” basis and subject to such persons
entering into a confidentiality agreement at least as restrictive with respect to the
Confidential Information as this Clause 10 (except that the obligations under such
confidentiality agreement shall terminate five (5) years after disclosure of the
relevant Confidential Information to such assignee or other Third Party);
	 
	 	(e)	 	to any Regulatory Authority or government agency or authority to the extent
such disclosure is useful or reasonably necessary to achieve the purposes of this
Agreement or to any taxing or other authority competent to impose, administer or
collect taxation to the extent such disclosure is useful or reasonably necessary; and
	 
	 	(f)	 	as required by Applicable Law, the rules or regulations of a relevant stock
exchange or similar governing body (including the U.S. Securities and Exchange
Commission) or an order of any government agency, department or court; provided that:

	 	(i)	 	to the extent permitted prompt written notice of the disclosure
shall be given to the Disclosing Party;
	 
	 	(ii)	 	such disclosure shall be only to the extent so required;
	 
	 	(iii)	 	if permitted, and to the extent reasonably practicable,
written notice of the requirement shall be given to Disclosing Party and the
Parties shall discuss the timing and content of such disclosure with a view to
preventing or minimising loss of confidentiality for the material; and
	 
	 	(iv)	 	insofar as material so required to be disclosed is not made
public, the obligation of confidentiality hereunder shall continue to apply to
it.

	10.4	 	Survival of Confidentiality Requirements
	 
	 	 	The obligations of the Parties under Clauses 10.1 to 10.3 shall survive the expiration or
termination of this Agreement for whatever reason for a period of five (5) years to the
extent the Confidential Information or the unpatented Joint Technology remains confidential;
provided that in the event that either Party remains entitled to use the unpatented Joint
Technology after the expiration or termination of this Agreement, that Party shall be
entitled to disclose the unpatented Joint Technology to a Third Party to the extent that
such disclosure is necessary to that Party’s effective exercise of such entitlement.
	 
	10.5	 	Injunctive Relief

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	 	 	The Parties understand and agree that remedies in damages may be inadequate to protect
against any breach of any of the provisions of this Clause 10 by either Party or their
employees, officers and any other person acting in concert with it or
on its behalf. Accordingly, each Party shall be entitled to the granting of interim and final injunctive
relief by a court of competent jurisdiction in the discretion of that court against any
action that constitutes any breach of this Clause 10.
	 
	10.6	 	Use of Name
	 
	 	 	Neither Party shall mention or otherwise use the name, symbol, trademark, trade name or
logotype of the other Party (or any abbreviation or adaptation thereof) in any publication,
press release, promotional material or other form of publicity without the prior written
approval of such other Party in each instance. The restrictions imposed by this Clause
shall not prohibit either Party from making any disclosure identifying the other Party that
is required by Applicable Law.
	 
	10.7	 	Publications and Presentations
	 
	 	 	During the term of this Agreement, each Party shall submit to the other Party (the
“Non-Publishing Party”) for review and approval all proposed academic, scientific and
medical publications and public presentations relating to any aspect of the Development
Programme or to any Programme Antigen or any Product. Such review and approval shall be
conducted for the purposes of preserving intellectual property protection and determining
whether any portion of the proposed publication or presentation containing the Confidential
Information of the Non-Publishing Party or the unpatented Joint Technology should be
modified or deleted. Written copies of such proposed publications and presentations shall
be submitted to the Non-Publishing Party no later than sixty (60) days before submission for
publication or presentation. The Non-Publishing Party shall provide its comments, if any,
and (if it so chooses) its approval within thirty (30) days of its receipt of such written
copy. The review period may be extended for an additional sixty (60) days upon request of
the Non-Publishing Party in the event the Non-Publishing Party can demonstrate reasonable
need for such extension, including the preparation and filing of patent applications. By
mutual written agreement of the parties, this period may be further extended. Each Party
shall comply with standard academic practice regarding authorship of scientific publications
and recognition of contribution of the other Party in any publications and presentations.
For the avoidance of doubt, nothing in this Clause 10.7 shall require either Party to allow
disclosure of its Confidential Information.
	 
	11.	 	REGULATORY MATTERS
	 
	11.1	 	Regulatory Approvals
	 
	 	 	Except with respect to Regulatory Approvals and Clinical Study Applications required to
commence any Phase I Study undertaken by Emergent in accordance with the Development Plan,
which approvals shall be obtained by Emergent, sanofi pasteur shall be responsible for the
preparation and submission, at its own expense, but generally in consultation with Emergent,
of all applications for any Regulatory
Approvals required for the Exploitation of the Programme Antigens or any Product in any
country in the Territory and Emergent shall, at sanofi pasteur’s cost, provide such

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	 	 	assistance as sanofi pasteur may reasonably require in connection with such applications.
Within a reasonable time prior to filing, Emergent or sanofi pasteur, as the case may be,
shall provide to the SC for its consideration and comment (a) summaries of significant
documents or reports relating to any Clinical Candidate or Product to be filed with any
Regulatory Authority; and (b) copies or details of all significant communications and
interactions with Regulatory Authorities relating to any Clinical Candidate or Product. For
the avoidance of doubt, sanofi pasteur will not be required to share with Emergent any
sanofi pasteur Confidential Information or Know How relating to sanofi pasteur Antigens or
Third Party Antigens.
	 
	11.2	 	Adverse Event Reporting
	 
	 	 	The Parties shall develop, maintain and implement standard operating procedures for the
investigation and reporting of Adverse Events concerning the Programme Antigens and any
Product. The Parties shall immediately implement such agreed upon procedures and shall
provide each other on a regular basis with any information which has become available to
them and which is relevant to the safe use of the Programme Antigens or any Product or which
is required by Applicable Law in all countries where any Programme Antigen or Product is
marketed or is in a Clinical Study. Emergent shall be responsible for reporting Serious
Adverse Events arising in connection with Emergent sponsored studies to the appropriate
Regulatory Authorities in accordance with Applicable Law. sanofi pasteur shall be
responsible for making all other such reports. Each Party shall forward to the other any
information it receives relating to a Serious Adverse Event for a Product or Programme
Antigen within twenty-four (24) hours of coming into possession or control of such
information, by transmitting it in accordance with such procedures as the Parties may agree
in writing from time to time. The Parties shall transmit to each other a copy of any report
relating to a Serious Adverse Event for a Product or Programme Antigen made to any
Regulatory Authority or ethics committee within two (2) Business Days following its
submission to the Regulatory Authority by transmitting it in accordance with such procedures
as the Parties may agree in writing from time to time.
	 
	12.	 	WARRANTIES
	 
	12.1	 	Mutual Warranties
	 
	 	 	Each Party hereby warrants to the other Party that:

	 	(a)	 	it is duly organised, validly existing and in good standing under the laws of
the state or country, as applicable, in which it is organised;
	 
	 	(b)	 	it has the requisite power and authority and the legal right to enter into this
Agreement and to perform its obligations hereunder;
	 
	 	(c)	 	it has taken all requisite action on its part to authorise the execution and
delivery of this Agreement and the performance of its obligations hereunder;
	 
	 	(d)	 	this Agreement has been duly executed and delivered on behalf of such Party,
and constitutes a legal, valid, binding obligation enforceable against such Party in
accordance with its terms except as enforcement may be limited by (i)

55

 

	 	 	 	applicable
bankruptcy, insolvency, reorganisation, moratorium, and other laws of general
application affecting enforcement of creditors’ rights generally
and (ii) by laws relating to the availability of specific performance, injunctive relief or other
equitable remedies;
	 
	 	(e)	 	all necessary consents, approvals and authorisations of all governmental
authorities and other persons required to be obtained by it in connection with this
Agreement have been obtained; and
	 
	 	(f)	 	the execution and delivery of this Agreement and the performance of such
Party’s obligations hereunder (i) do not conflict with or violate any requirement of
Applicable Law or any orders of governmental bodies; and (ii) do not conflict with, or
constitute a default under, any contractual obligation of it.

	12.2	 	Disclaimer
	 
	 	 	EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY
REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND REGARDING TECHNOLOGY AND INFORMATION,
MATERIALS, PRODUCTS OR INTELLECTUAL PROPERTY, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT
LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NONINFRINGEMENT, ENFORCEABILITY OR VALIDITY.
	 
	12.3	 	Limitation on Liability
	 
	 	 	Except in circumstances of gross negligence or wilful misconduct by a Party or any of its
Affiliates, directors, officers, employees or agents, neither Party shall be liable to the
other with respect to the subject matter of this Agreement for special (including punitive
and exemplary), indirect, incidental or consequential damages or lost profits, whether in
contract, warranty, negligence, tort, strict liability or otherwise. This Clause 12.3 shall
not limit either Party’s liability pursuant to Clause 13.
	 
	13.	 	INDEMNIFICATION
	 
	13.1	 	Emergent Indemnity
	 
	 	 	Emergent shall indemnify, protect and hold harmless sanofi pasteur
and its Affiliates, directors, officers, employees and agents (the
“sanofi pasteur Indemnitees”) against any and all losses, damages,
fines, costs, expenses (including reasonable attorneys’ fees) and
liabilities (“Liabilities”) incurred or imposed upon the sanofi
pasteur Indemnitees, or any of them, in connection with any claims,
suits, actions, demands or judgments of Third Parties (“Third Party
Claim”) arising from or occurring as a result of:

	 	(a)	 	the breach by Emergent of any terms of this Agreement or the negligence of
Emergent or any of the Emergent Indemnitees; and

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	 	(b)	 	Emergent’s activities under the Development Plan or any Annual Development Plan
(including the use of any Programme Antigen or Product in any Phase I Study conducted
by or for Emergent); except for those Liabilities for Third Party Claims in respect of which sanofi pasteur is
responsible pursuant to Clause 9.6, which liabilities shall be borne by sanofi pasteur in
accordance with that Clause, or for which sanofi pasteur has an obligation to indemnify
Emergent and its Affiliates, directors, officers, employees and agents under Clause 13.2, as
to which Liabilities each Party shall indemnify the other to the extent of their respective
liability for such Liabilities. For the avoidance of doubt, Emergent shall have no
liability to sanofi pasteur for any Third Party Claim alleging that any Emergent Activities
infringe the intellectual property rights of any Third Party.

	 
	13.2	 	sanofi pasteur Indemnity
	 
	 	 	sanofi pasteur shall indemnify, protect and hold harmless Emergent
and its Affiliates, directors, officers, employees and agents (the
“Emergent Indemnitees”) against any and all Liabilities incurred or
imposed upon the Emergent Indemnitees, or any of them, in connection
with any Third Party Claim arising from or occurring as a result of:

	 	(a)	 	the breach by sanofi pasteur of any terms of this Agreement or the negligence
of sanofi pasteur or any of the sanofi pasteur Indemnitees;
	 
	 	(b)	 	sanofi pasteur’s activities under the Development Plan or any Annual
Development Plan (including the use of any Programme Antigen or Product in any Clinical
Study other than any Phase I Study conducted by or for Emergent);
	 
	 	(c)	 	the Exploitation of any Programme Antigen or Product; and
	 
	 	(d)	 	any allegation that the activities of either Party in accordance with this
Agreement infringe the intellectual property rights of a Third Party.

	 	 	except for those Liabilities for Third Party Claims for which Emergent has an obligation to
indemnify sanofi pasteur Indemnitees under Clause 13.1, as to which Liabilities each Party
shall indemnify the other to the extent of their respective liability for such Liabilities.
	 
	13.3	 	Indemnification Procedure
	 
	 	 	In the event that either Party receives notice of a Third Party Claim such Party shall
inform the other Party as soon as reasonably practicable. Subject to Clause 9, the Parties
shall confer on how to respond to the Third Party Claim and how to handle the Third Party
Claim in an efficient manner. In the event that a Party is seeking indemnification under
this Clause 13 it shall permit the indemnifying Party (at the indemnifying Party’s option)
to assume direction and control of the defence of the Third Party Claim (including the right
to settle the claim solely for monetary consideration), shall co-operate as requested (at
the expense of the indemnifying Party) in the defence of the Third Party Claim, and shall
not settle or compromise the Third Party Claim without the express written consent of the
indemnifying Party, such

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	 	 	consent not to be unreasonably withheld, conditioned or delayed.

	 
	14.	 	TERM AND TERMINATION
	 
	14.1	 	Expiry by country
	 
	 	 	Unless terminated earlier pursuant to Clause 14.2, this Agreement shall expire on a
country-by-country basis on the expiration of the obligation of sanofi pasteur to make
royalty payments under Clause 7.3 with respect to that particular country and thereafter
sanofi pasteur shall have, with respect to that country, a fully paid-up, non-exclusive,
royalty free, perpetual licence under the Emergent Technology and Emergent’s right and
interest to the Joint Technology to Exploit Products in the Field.
	 
	14.2	 	Termination
	 
	14.2.1	 	Termination by either Party. Either Party will be entitled to terminate this Agreement with
immediate effect by notice in writing if the other Party files for protection under bankruptcy
or insolvency laws, makes an assignment for the benefit of creditors, appoints or suffers
appointment of a receiver, administrator, manager, trustee or like official over its property
that is not discharged within ninety (90) days, proposes a written agreement of composition or
extension of its debts, proposes or is a party to any dissolution, winding-up or liquidation,
files a petition under any bankruptcy or insolvency act or has any such petition filed against
it which involuntary petition is not discharged within sixty (60) days of the filing thereof
or undergoes or suffers any analogous event or process in any jurisdiction.
	 
	14.2.2	 	Termination by sanofi pasteur. sanofi pasteur may terminate this Agreement:

	 	(a)	 	for any reason or no reason, upon not less than six (6) months’ prior written
notice to Emergent, provided that such notice may not be served prior to the first
anniversary of the Effective Date; and
	 
	 	(b)	 	with immediate effect on a Change of Control of Emergent upon written notice to
Emergent provided that such notice is served within thirty (30) days of the earlier of
the date on which Emergent notifies sanofi pasteur of such Change of Control or the
date on which sanofi pasteur becomes aware of such Change of Control.

	14.2.3	 	Termination by Emergent. Emergent shall be entitled to terminate this Agreement:

	 	(a)	 	with immediate effect if sanofi pasteur challenges the validity or
enforceability of any Emergent Patent Rights or Joint Patent Rights;
	 
	 	(b)	 	if sanofi pasteur is in material breach of its obligation to use Commercially
Reasonable Efforts pursuant to Clause 5.12 and does not remedy such breach within
ninety (90) days of its receipt of written notice from Emergent requiring such breach
to be remedied and without prejudice to the generality of the foregoing, sanofi pasteur
shall be deemed to be in breach of such obligation if:

	 	(i)	 	there has been a material failure by sanofi pasteur to execute,
resource or deliver the Development Plan;

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	 	(ii)	 	at any time prior to the grant of a Marketing Authorisation for
a Product in a Major Market Country, sanofi pasteur does not have at least one Programme Antigen in active clinical Development provided that at least one
Programme Antigen has met the Selection Criteria;
	 
	 	(iii)	 	sanofi pasteur fails to select and progress into clinical
Development a Programme Antigen that has met the Selection Criteria unless
there is already a Programme Antigen in a Phase I Study or a later stage of
active clinical Development or a Product is being marketed in a Major Market
Country;
	 
	 	(iv)	 	there is a material failure by sanofi pasteur to maintain,
augment, exploit or defend the Emergent Technology or the Joint Technology in
a commercially reasonable manner;
	 
	 	(v)	 	sanofi pasteur fails to conduct any substantial Development
activities during any twelve (12) month period;
	 
	 	(vi)	 	there is a material failure by sanofi pasteur, other than for
technical reasons, to use Commercially Reasonable Efforts to Develop the
Product for all target vaccine populations agreed in the target product profile
(e.g., new-borns, children to age two (2) and Adolescents);
	 
	 	(vii)	 	sanofi pasteur or one of its Affiliates or any Sub-Licensee
undertakes a Phase II study with a Competitive Product and sanofi pasteur is
not actively continuing to Develop or Commercialise a Product;
	 
	 	(viii)	 	sanofi pasteur or one of its Affiliates or any Sub-Licensee commences a Phase
III Study with a Competitive Product, before sanofi pasteur commences a Phase
III Study with a Product and sanofi pasteur is not actively continuing to
Develop or Commercialise a Product;
	 
	 	(ix)	 	there is a material failure by sanofi pasteur to provide
Emergent with adequate and sufficiently detailed information to enable Emergent
to assess whether sanofi pasteur is in breach of its diligence obligations
pursuant to Clause 5.12, particularly after the Transition Date; or
	 
	 	(x)	 	there is a registering/filing by sanofi pasteur or any
Affiliate of sanofi pasteur or any Sub-Licensee for a Marketing Authorisation
for a Competitive Product, if sanofi pasteur is not actively Developing or
Commercialising a Product.

	 	(c)	 	if sanofi pasteur is in material breach of its obligation to use Commercially
Reasonable Efforts pursuant to Clause 6.2 and does not remedy such breach within ninety
(90) days of its receipt of written notice from Emergent requiring such breach to be
remedied and without prejudice to the generality of the foregoing, sanofi pasteur shall
be deemed to be in breach of such obligation if:

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	 	(i)	 	there is a material failure by sanofi pasteur to apply
Commercially Reasonable Efforts to execute, resource and deliver the agreed
Commercialisation Plan;
	 
	 	(ii)	 	there is a material failure by sanofi pasteur to apply
Commercially Reasonable Efforts as assessed by time, resource and performance
criteria that would be applied by a commercial organisation to launch,
commercialise, exploit and maximise the value of a paediatric vaccine product
in a competitive global marketplace;
	 
	 	(iii)	 	sanofi pasteur (or one of its Affiliates or a Sub-Licensee)
launches, Commercialises or Exploits a Competitive Product, and sanofi pasteur
is not actively Developing or Commercialising a Product;
	 
	 	(iv)	 	there is a material failure by sanofi pasteur to provide
Emergent with adequate and sufficiently detailed information to be able to
assess whether sanofi pasteur is in breach of its diligence obligations
pursuant to Clause 6.2; or
	 
	 	(v)	 	there is a material failure by sanofi pasteur to provide
sufficient information or access to an independent representative to enable
assessment of royalties payable by sanofi pasteur to Third Parties as required
pursuant to Clause 7.4.4, particularly in relation to the calculation of the
Royalty Burden.

For the avoidance of doubt, the Parties acknowledge that whether or not it is
commercially reasonable to launch a Unitary Product before a Combination Product in
any market will depend on market conditions at the relevant time and that
consequently a failure by sanofi pasteur to launch a Unitary Product prior to a
Combination Product in any country is not in itself sufficient to demonstrate that
sanofi pasteur has failed to use Commercially Reasonable Efforts in accordance with
Clause 6.2.

	 	(d)	 	if sanofi pasteur commits a material breach of its obligations under this
Agreement (including any failure to pay when due an amount or amounts in aggregate
exceeding Euros [**]) which (if capable of remedy) is not remedied within ninety (90)
days of written notice requiring it to be remedied being received by sanofi pasteur.
If there is a dispute relating to any payment to be made by sanofi pasteur, sanofi
Pasteur shall pay the undisputed portion of such amount and the dispute relating to the
disputed portion shall be resolved by the Senior Officers in accordance with Clause
25.2 or, failing that, in accordance with Clause 25.3. To the extent applicable, the
decision of the Senior Officers or courts shall be applied to the future calculation of
amounts properly due from sanofi pasteur in connection with this Agreement.
	 
	 	(e)	 	with immediate effect upon written notice by Emergent, if (i) all Programme
Antigens have been tested in preclinical Development and none have met the Selection
Criteria, or (ii) all Programme Antigens that have met the Selection Criteria have been
tested in a Phase I Study, and none of the Programme Antigens that have met the
Selection Criteria have been found to meet the

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	 	 	 	Primary Inclusion Criteria, and in either case there has been no active Clinical
Study involving a Programme Antigen for a period of twelve (12) months.

	14.3	 	Consequences of Termination
	 
	14.3.1	 	Termination by Emergent other than pursuant to Clause 14.2.3(e). In the event that this
Agreement is terminated by Emergent pursuant to Clause 14.2.1 or Clause 14.2.3(a) to (d) then:

	 	(a)	 	sanofi pasteur shall reimburse Emergent for all FTE Costs (including in respect
of FTEs that would have been devoted to or supported Emergent Activities in the absence
of such termination) and Emergent Expenses in each case incurred or suffered in, or
relating to, the period ending on the later of (i) six (6) months from the date of the
notice of termination; (ii) eighteen (18) months from the Effective Date and (iii) the
date of termination, together with any non-cancellable Emergent Expenses committed to
prior to the date of notice of termination whenever incurred;
	 
	 	(b)	 	Emergent shall have a non-exclusive, fully paid-up, royalty free licence under
the sanofi pasteur Programme Technology in the Field and, without prejudice to
Emergent’s rights pursuant to Clause 14.3.7, sanofi pasteur’s interest in the Joint
Technology, to Exploit any Programme Antigens, Terminated Antigens, Repatriated
Antigens or Product anywhere in the world with the right to grant sub-licences;
provided that with respect to any Technology Controlled by sanofi pasteur pursuant to a
sanofi pasteur In-Licence, the sub-licence granted by sanofi pasteur under such sanofi
pasteur In-Licence shall be limited to such rights (if any) as sanofi pasteur is
permitted to grant Emergent pursuant to the relevant sanofi pasteur In-Licence and
provided further that Emergent shall be responsible for any payments under any such
sanofi pasteur In-Licence attributable to the Exploitation of any Products by Emergent
after the date of such termination.
	 
	 	(c)	 	sanofi pasteur and Emergent shall, if requested by Emergent, discuss in good
faith the terms, which terms shall be commercially reasonable, for the grant by sanofi
pasteur to Emergent of a non-exclusive licence under the sanofi pasteur Independent
Technology in the Field to Exploit Programme Antigens, Terminated Antigens, Repatriated
Antigens and Products anywhere in the world; provided that in relation to any
Technology Controlled by sanofi pasteur pursuant to a sanofi pasteur In-Licence, the
Parties acknowledge that any sub-licence granted by sanofi pasteur under such sanofi
pasteur In-Licence would be limited to such rights (if any) as sanofi is permitted to
grant Emergent pursuant to the relevant sanofi pasteur In-Licence; and provided further
that if requested by Emergent, sanofi pasteur shall use reasonable efforts to
facilitate discussions between Emergent and any Third Party and shall not unreasonably
restrict or impede the grant by any Third Party of rights to any Technology Controlled
by such Third Party and necessary or reasonably useful for the Exploitation of
Programme Antigens, Terminated Antigens, Repatriated Antigens or Products in the Field;

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	 	(d)	 	sanofi pasteur shall cease to use the Emergent Technology for any purpose and
shall cease to Exploit any Programme Antigen or Product anywhere in the world;
	 
	 	(e)	 	unless otherwise agreed pursuant to paragraph (c) above, Emergent shall cease
to use the sanofi pasteur Independent Technology for any purpose;
	 
	 	(f)	 	sanofi pasteur shall at Emergent’s request transfer to Emergent:

	 	(i)	 	all of its right, title and interest in all Regulatory
Documentation and Regulatory Approvals then in its name applicable to any
Programme Antigens or Product, and all material aspects of Confidential
Information and correspondence Controlled by it as of the date of termination
relating to such Regulatory Documentation and Regulatory Approvals; and
	 
	 	(ii)	 	all relevant Know How, information, files or data relating to
any Programme Antigens or Product, including copies of all reports and data
generated or obtained by sanofi pasteur or its Affiliates pursuant to this
Agreement that have not previously been provided to Emergent;

	 	(g)	 	sanofi pasteur shall, at its cost, take such actions as Emergent may reasonably
require (including notifications to Regulatory Authorities) to ensure a smooth, orderly
and cost-effective transfer of the conduct of Development and Commercialisation (to the
extent then conducted by sanofi pasteur) of any Programme Antigens and Product (in the
form of such Product as at the date of such termination) from sanofi pasteur to
Emergent including in connection with:

	 	(i)	 	securing supplies of such Product, including, if appropriate,
the assignment of relevant agreements for the manufacture of such Product to
Emergent (unless if and to the extent any such agreement precludes sanofi
pasteur, having taken, at Emergent’s request and expense, such action as
Emergent may reasonably require, from making such assignment), the transfer by
sanofi pasteur to Emergent or its designee, at Emergent’s request, of all
stocks of Product or constituent materials available to sanofi pasteur at the
time of termination at a transfer price equal to sanofi pasteur’s cost of goods
for the supply of such Product or constituent plus [**] percent ([**]%) and the
transfer to Emergent of all information in its possession with respect to the
manufacture of such Product or any constituent; and
	 
	 	(ii)	 	the transfer to Emergent of control of all Clinical Studies of
Clinical Candidates being conducted as of the effective date of termination.

For the avoidance of doubt, nothing in this Clause 14.3.1 is intended nor shall it operate
to (i) grant any rights to Emergent under the sanofi pasteur Independent Technology; (ii)
grant any rights to sanofi pasteur under the Emergent Technology; (iii) restrict sanofi
pasteur’s rights with respect to the sanofi pasteur Technology or the Joint Technology; or
(iv) restrict Emergent’s rights with respect to the Emergent Technology or the Joint
Technology.

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	14.3.2	 	Termination at Will by sanofi pasteur. In the event that this Agreement is terminated by
sanofi pasteur pursuant to Clause 14.2.2(a) then:

	 	(a)	 	Clause 14.3.1 other than sub-clause 14.3.1(b) shall apply;

	 	(b)	 	without prejudice to Emergent’s rights pursuant to Clause 14.3.7, Emergent
shall have a non-exclusive, fully paid-up, royalty free licence under sanofi pasteur’s
interest in the Joint Technology to Exploit any Programme Antigens, Terminated
Antigens, Repatriated Antigens or Product anywhere in the world with the right to grant
sub-licences for the Exploitation of such Programme Antigens, Terminated Antigens and
Repatriated Antigens;
	 
	 	(c)	 	sanofi pasteur and Emergent shall, if requested by Emergent, discuss in good
faith the terms, which terms shall be commercially reasonable, for the grant by sanofi
pasteur to Emergent of a non-exclusive licence under the sanofi pasteur Programme
Technology in the Field to Exploit Programme Antigens, Terminated Antigens, Repatriated
Antigens and Products anywhere in the world; provided that in relation to any
Technology Controlled by sanofi pasteur pursuant to a sanofi pasteur In-Licence, the
Parties acknowledge that any sub-licence granted by sanofi pasteur under such sanofi
pasteur In-Licence would be limited to such rights (if any) as sanofi is permitted to
grant Emergent pursuant to the relevant sanofi pasteur In-Licence; and
	 
	 	(d)	 	sanofi pasteur and Emergent shall, if requested by sanofi pasteur, discuss in
good faith the terms, which terms shall be commercially reasonable, for the grant by
Emergent to sanofi pasteur of a non-exclusive licence under the Emergent Programme
Technology in the Field.

	14.3.3	 	Termination by Emergent pursuant to Clause 14.2.3(e). In the event that this Agreement is
terminated by Emergent pursuant to Clause 14.2.3(e) then:

(a) Clause 14.3.1 other than sub-clauses 14.3.1(a), (b) and (c) shall apply; and

(b) without prejudice to Emergent’s rights pursuant to Clause 14.3.7, Emergent
shall have a non-exclusive, fully paid-up, royalty free licence under sanofi pasteur’s
interest in the Joint Technology to Exploit any Programme Antigens, Terminated
Antigens, Repatriated Antigens or Product anywhere in the world with the right to grant
sub-licences for the Exploitation of such Programme Antigens, Terminated Antigens and
Repatriated Antigens.

	14.3.4	 	Termination of Collaboration for a Change of Control of Emergent or Emergent’s Insolvency.
In the event that sanofi pasteur terminates this Agreement pursuant to Clause 14.2.1 (an
insolvency event) or Clause 14.2.2(b) (a Change of Control) such termination shall be treated
as a termination at will pursuant to Clause 14.2.2(a), and Clause 14.3.2 shall apply. If
sanofi pasteur elects not to terminate this Agreement in such circumstances it may, by serving
notice on Emergent within thirty (30) days of the date on which sanofi pasteur’s right to
terminate this Agreement arose under Clause 14.2.1 or within the period specified in Clause
14.2.2(b) (as the case may be), elect to continue to Exploit Programme Antigens and Products
on the terms of this Agreement subject to the following modifications:

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	 	(a)	 	the JPT and the SC shall be disbanded and cease to have any responsibilities
and, subject to Clause 3.5.2, which shall continue to apply to any decisions made by
sanofi pasteur, sanofi pasteur shall be entitled to make all strategic decisions
relating to the Development of Programme Antigens and Products, provided that in
reaching any such decision sanofi pasteur shall act in good faith and in the best
interests of the Development and Commercialisation of the Product;
	 
	 	(b)	 	Emergent shall cease to have any obligations under the Development Plan or
Annual Development Plan; provided that if the Change of Control or insolvency occurs
prior to the Transition Date, sanofi pasteur shall continue to reimburse Emergent for
all FTE Costs and Emergent Expenses, in each case incurred or suffered in, or relating
to, the period ending six (6) months from the date of such notice together with any
non-cancellable Emergent Expenses committed to prior to such date, provided that during
such period Emergent shall follow sanofi pasteur’s reasonable instructions for the
smooth, orderly and cost-effective transfer of Emergent Activities to sanofi pasteur;
	 
	 	(c)	 	sanofi pasteur shall prepare each Development Plan, Annual Development Plan and
Commercialisation Plan and submit each such plan to Emergent. If and to the extent
sanofi pasteur is not prepared to disclose information contained in any such plan to
Emergent such information shall be disclosed to an independent expert appointed
pursuant to paragraph (e) below;
	 
	 	(d)	 	sanofi pasteur shall prepare reports of its Development Activities in
accordance with Clause 5.10 and submit the same to Emergent. If and to the extent the
Parties are unable to agree the form of the report or sanofi pasteur is not prepared to
disclose information contained in the report to Emergent such information shall be
disclosed to an independent expert appointed pursuant to paragraph (e) below;
	 
	 	(e)	 	in the event that sanofi pasteur refuses to disclose any plans or reports to
Emergent pursuant to paragraphs (c) or (d) above, or at Emergent’s request at any other
time but not more frequently than once in any Year, the Parties shall upon Emergent’s
request appoint an independent expert with suitable experience reasonably acceptable to
both Parties to review and verify the activities being conducted by sanofi pasteur in
connection with the Development and Commercialisation of any Programme Antigen or
Product. If the Parties are unable to agree on the identity of the independent expert
within ten (10) days of Emergent notifying sanofi pasteur that it desires the
appointment of such expert, the independent expert shall be appointed by Emergent and
approved by sanofi pasteur, which approval shall not be unreasonably withheld,
conditioned or delayed. Upon such appointment, sanofi pasteur shall promptly furnish
to the expert (subject to such obligations of confidentiality and non-use as may be
reasonably required by sanofi pasteur) all information necessary for the expert to
determine whether sanofi pasteur is using Commercially Reasonable Efforts to Develop
and Commercialise Products in accordance with this Agreement but for the avoidance of
doubt such determination shall not be binding on Emergent. The expert shall be
required by the Parties to use all reasonable efforts to render his

64

 

	 	 	 	decision within thirty (30) days following his receipt of all such information. The
Parties shall share equally the fees and expenses of such expert;
	 
	 	(f)	 	for the purposes of Clause 5.15, sanofi pasteur shall assume the
responsibilities of the SC and shall consider whether Programme Antigens should be
designated Terminated Antigens;
	 
	 	(g)	 	all other provisions of this Agreement shall continue in full force and effect
without modification.

	 	 	For the avoidance of doubt, if sanofi pasteur does not elect either to terminate this
Agreement or terminate the collaborative aspects of this Agreement by serving notice on
Emergent in accordance with Clause 14.2.1, Clause 14.2.2(b) or this Clause 14.3.4 (as the
case may be) within thirty (30) days of the date on which sanofi pasteur’s right to
terminate this Agreement arose under Clause 14.2.1 or within the period specified in Clause
14.2.2(b) (as the case may be), this Agreement shall continue in full force and effect
without any modification.
	 
	14.3.5	 	Termination of Emergent Activities. If Emergent commits a material breach of its
obligations under this Agreement with respect to the performance by Emergent of the Emergent
Activities which (if capable of remedy) is not remedied within ninety (90) days of written
notice requiring it to be remedied being received by Emergent, sanofi pasteur may on written
notice terminate all Emergent Activities and on such termination Emergent shall cease to have
any right or obligation to undertake activities under the Development Plan or Annual
Development Plan and the Joint Project Team shall be disbanded.
	 
	14.3.6	 	Termination of Collaboration for Emergent’s Breach. In the event that Emergent commits a
material breach of its obligations under (i) Clauses 2.4 or 9.2.5; (ii) Clause 10 and the
prohibited disclosure constitutes a statutory bar to obtaining patent protection in a Major
Market Country that would otherwise have been available for an invention within the Emergent
Technology or Joint Technology; (iii) Clause 10 and the prohibited disclosure results in the
loss of trade secret status for any trade secret previously identified as such by sanofi
pasteur in writing to Emergent provided that Emergent has agreed that the information so
identified is a trade secret (provided further that such agreement shall not be unreasonably
withheld, conditioned or delayed), and the prohibited disclosure is a direct result of
Emergent’s gross negligence or wilful misconduct and such prohibited disclosure has a material
and irreparable adverse effect on the value or commercial potential of the Emergent Technology
or Joint Technology (taken as a whole) in at least one Major Market Country; or (iv) this
Agreement with respect to the performance of the Emergent Activities and such material breach
is a direct result of Emergent’s gross negligence or wilful misconduct and has a material and
irreparable adverse effect on the value or commercial potential of the Emergent Technology or
Joint Technology (taken as a whole) in at least one Major Market Country, in each case where
such material breach (if capable of remedy) is not remedied within ninety (90) days of written
notice requiring it to be remedied being received by Emergent, sanofi pasteur may serve
further notice on Emergent terminating the collaborative aspects of this Agreement and on
receipt of such notice by Emergent Clause 14.3.4 (a) and (c) to (g) shall apply except that:

65

 

	 	(a)	 	sanofi pasteur shall cease to have any obligation to pay any milestone payment
pursuant to Clause 7.2.1 if the relevant milestone event occurred after receipt of such
notice;
	 
	 	(b)	 	sanofi pasteur shall not have any obligation to reimburse Emergent for any FTE
costs or Emergent Expenses relating to the period after such notice
unless if and to the extent that sanofi pasteur requires Emergent to provide assistance with the
transfer of any Emergent Activities to sanofi pasteur; and
	 
	 	(c)	 	Emergent shall cease to have any obligations under the Development Plan or
Annual Development Plan.

	14.3.7	 	Joint Technology. In relation to the Joint Technology after termination:

	 	(a)	 	Ownership and Rights. As between the Parties, each Party shall own an
undivided one-half interest in and to the Joint Technology with full ownership rights
in and to any field and each Party shall have the right, subject to the rights and
licences granted under, and the other provisions of, this Agreement, to freely Exploit,
transfer, license or encumber its rights in any such jointly owned subject matter
without the consent of, or payment or accounting to, the other Party, and each Party
waives any right it may have under Applicable Law to require such payment, accounting
or consent.
	 
	 	(b)	 	Filing, Prosecution and Maintenance. The Parties shall agree which Party (in
this Clause 14.3.7, the “Controlling Party”) shall be responsible, using counsel
reasonably acceptable to both Parties, for the preparation, filing, prosecution and
maintenance of the Joint Patent Rights as agreed by the Parties. All out-of-pocket
costs incurred by the Parties in connection with the preparation, filing, prosecution
and maintenance of Joint Patent Rights shall be shared equally between the Parties. To
the extent practicable, the Controlling Party shall provide the other Party and its
counsel with an opportunity to consult with the Controlling Party and its counsel
regarding the filing and contents of any application, amendment, registration,
submission, response or correspondence with any patent authorities with respect to, and
the Controlling Party shall consider in good faith the reasonable requests of the other
Party regarding the filing and prosecution of such Patent Rights and shall not, without
the prior written consent of the other Party (which approval shall not be unreasonably
withheld, conditioned or delayed), cease the prosecution or maintenance of, or modify
the claims of, or elect not to file a patent application in respect of any Joint Patent
Rights.
	 
	 	(c)	 	Election not to File, Prosecute or Maintain. If one Party does not wish to
bear the expenses in connection with the preparation, filing, prosecution or
maintenance of any Joint Patent Rights in any country it shall notify the other Party
who shall have the right to prepare, file, prosecute and maintain such Joint Patent
Rights at its own expense, through counsel of its choosing, without the consent of such
first Party, whereupon the first Party shall, and shall cause its Affiliates to, (i)
reasonably cooperate with the other Party in this regard, and (ii) promptly release or
assign to the other Party, without consideration, all right, title and interest in and
to such Joint Patent Rights in such country. If the other Party fails to notify the
first Party within ninety (90)
days 

66

 

	 
	 	 	 	that it wishes to assume such responsibility at its own cost, and the first
Party is the Controlling Party, the Controlling Party shall be free to allow such
Joint Patent Rights to lapse.

	14.3.8	 	Confidential Information and Materials. On expiration or termination of this Agreement for
any reason, (i) each Party shall promptly return all
Confidential Information of the other
Party that is not subject to a licence grant hereunder that survives such expiration or
termination; provided that each Party may retain one copy of the Confidential Information of
the other Party in its archives solely for the purpose of establishing the contents thereof
and ensuring compliance with its obligations under this Agreement and (ii) sanofi pasteur
shall either return or, at Emergent’s request, destroy all Emergent Materials provided that
sanofi pasteur may retain Materials that are subject to a continuing licence grant hereunder.
	 
	14.3.9	 	Other Consequences. The expiration or termination of this Agreement for any reason shall be
without prejudice to:

	 	(a)	 	the obligation of either Party to pay to the other Party any amount due to the
other Party with respect to the period prior to the effective date of such expiration
or termination, by way of royalty or otherwise, under this Agreement;
	 
	 	(b)	 	any right of, or remedy available to, either Party against the other Party in
respect of anything done or omitted under this Agreement prior to such expiration or
termination; and
	 
	 	(c)	 	those rights, and shall not release either Party from those of its obligations,
which expressly survive termination in accordance with this Agreement and Clauses
8.3.2, 9.1.4, 9.1.6, 10, 11.2, 12.3, 13, 14.3, 16, 17, 18, 21, 22, 23, 25, and 28 and
all payment, reporting and audit terms to the extent applicable to activities occurring
before or surviving termination and any other provisions which are expressed to survive
expiration or termination or which are required to give effect to such expiration or
termination shall continue in full force and effect.

	14.4	 	No Further Grant
	 
	 	 	Except as specified in Clauses 14.1 and 14.3 neither Party shall be under any obligation to
grant the other Party any licence under any Emergent Technology or sanofi pasteur Technology
with respect to the period after the expiration or termination of this Agreement.
	 
	15.	 	FORCE MAJEURE
	 
	15.1	 	Force Majeure
	 
	 	 	A Party shall not be liable for a failure to perform any of its obligations under this
Agreement during the period and to the extent that that Party is prevented or hindered from
complying with them by any cause beyond its reasonable control including (insofar as beyond
such control but without prejudice to the generality of the foregoing expression) strikes,
lock-outs, labour disputes, act of God, war, riot, civil

67

 

	 	 	commotion, terrorism, epidemic disease, malicious damage, compliance with any law or
governmental order, rule, regulation or direction, accident, breakdown of plant or
machinery, fire, flood, storm, earthquake (each an “event of Force Majeure”). The affected
Party shall give notice to the other Party of the event of Force Majeure and its effect on
its ability to perform its obligations. If the notice is not given by the affected Party
within a reasonable period after that Party knew or ought to have
known of the event of Force Majeure, it shall remain liable to the other Party for the consequences of its failure
to perform.
	 
	15.2	 	Obligation to Consult
	 
	 	 	The exemption provided by Clause 15.2 shall be granted to the relevant Party for as long as
the event of Force Majeure persists; provided that if it shall persist for a continuous
period of more than six (6) months the Party not affected by the event of Force Majeure may
terminate this agreement on thirty (30) days notice.
	 
	16.	 	PUBLICITY
	 
	16.1	 	Press Announcement.
	 
	 	 	The Parties shall release the press announcement set out in Schedule 6 on the date of this
Agreement or on such later date as may be agreed by the Parties.
	 
	16.2	 	No Publicity Without Consent
	 
	 	 	Subject to Clauses 16.1 and 16.3 neither Party shall make any public announcement or
statement or issue any press release or other publicity materials or make any other
disclosure with respect to the existence of this Agreement, its terms, conditions or subject
matter, or the status or content or conduct of the Development Programme without the prior
written consent of the other Party except if and to the extent (i) required by Applicable
Law, the rules or regulations of a relevant stock exchange or similar governing body
(including the U.S. Securities and Exchange Commission) or an order of any government
agency, department or court, provided that in each such case the disclosing Party shall to
the extent permitted promptly notify the other of such disclosure; or (ii) the proposed
public announcement does not contain information beyond that included in an earlier press
release issued in accordance with this Clause 16.
	 
	16.3	 	Permitted Disclosure
	 
	 	 	Either Party may disclose the terms or conditions of this Agreement and, subject to Clause
10, information relating to the status, content or conduct of the Development Programme:

	 	(a)	 	on a “need to know” basis to its, and its Affiliates, legal and financial
advisors to the extent such disclosure is reasonably necessary in connection with such
Party’s activities as expressly permitted by this Agreement or for the conduct of its
business;
	 
	 	(b)	 	to a Third Party in connection with:

68

 

	 	(i)	 	an equity investment or other form of financing in such Party,
or one of its Affiliates, by such Third Party;
	 
	 	(ii)	 	a merger, consolidation or similar transaction entered into by
such Party, or one of its Affiliates; or

	 	(iii)	 	the sale of all or substantially all of the assets of such
Party, or one of its Affiliates;

	 	(c)	 	as may be required in connection with an offer of shares or other securities by
that Party or one of its Affiliates to the public;
	 
	 	(d)	 	on a “need to know” basis, to a prospective assignee pursuant to Clause 19.1
and such Third Party’s employees, advisors, representatives, Affiliates, partners,
members, shareholders and financing sources; or
	 
	 	(e)	 	to any government agency or authority, at its request or as may be required by
Applicable Law, regulation, rule or order.

	17.	 	NOTICES
	 
	17.1	 	Notices
	 
	 	 	Any notice in connection with this Agreement (a “Notice”) will be in writing, in the English
language, signed by or on behalf of the Party giving it and will be delivered by hand
(including by internationally recognised courier), or prepaid airmail, facsimile
transmission, but not e-mail, either to the recipient at the address or facsimile number set
out for that Party in Clause 17.3 or such other address or facsimile number within the same
country as set out below for that Party as the recipient has previously notified to the
sender in accordance with this clause.
	 
	17.2	 	Deemed service of Notices
	 
	 	 	A Notice shall be deemed to have been duly served:

	 	(a)	 	if delivered by hand, at the time of delivery;
	 
	 	(b)	 	if sent by prepaid airmail at 10.00 a.m. (local time at the place of
destination) on the fifth Business Day after the date on which it was mailed; and
	 
	 	(c)	 	if sent by facsimile, at the time of transmission; provided that a confirming
copy is sent by first class post or prepaid airmail if the sender and recipient are in
different countries within twenty-four (24) hours after transmission and that no
notification informing the sender that the facsimile has not been delivered has been
received by the sender;

provided that if the Notice is delivered by hand or transmitted by facsimile and such
delivery or transmission occurs after 4.00 pm on a Business Day or on a day other than a
Business Day, service will be deemed to occur at 9.00 am on the next following Business Day
(such times and dates being local time at the address of the recipient).

	17.3	 	Addresses for Notices

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	 	 	The addresses and facsimile numbers for the parties are as follows:
	 
	 	 	If to Emergent:

Emergent Europe Limited

545 Eskdale Road,

Winnersh Triangle,

Wokingham,

Berkshire, RG41 5TU

England

Fax no. 44 (0) 118 9443301

Attention: President, Emergent Europe Limited

With copy to:

Emergent Biosolutions, Inc

300 Professional Drive

Gaithersburg, MD 20879

USA

Fax no: 1 301 944 0173

Attention: General Counsel

If to sanofi pasteur:

Sanofi Pasteur S.A.

2, avenue pont pasteur

Lyon 69007 France

Fax no. 33 4 3737 7061

Attention: General Counsel

With copy to: Vice President, Corporate Development

Sanofi Pasteur SA

1541 avenue Marcel Mérieux

Marcy l’Etoile, 69280 France

	17.4	 	Notices Served In Court Proceedings
	 
	 	 	For the avoidance of doubt, where proceedings have been commenced in any court of competent
jurisdiction, any documents issued in the course of those proceedings will be served in
accordance with the procedural rules governing the service of documents in those
proceedings.
	 
	17.5	 	Other Communications

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	 	 	For the avoidance of doubt, this Clause 17 shall not apply to routine communications between
members of the SC, JPT or the Project Leaders. Any such communications shall be in English
and may be via e-mail. The SC shall establish, and the Parties shall comply, and shall each
cause its respective employees, representatives and agents to comply, with, such procedures
as the SC considers appropriate to ensure the security and confidentiality of any such
communications.
	 
	18.	 	RELATIONSHIP OF PARTIES
	 
	18.1	 	No Partnership nor Agency
	 
	 	 	Nothing in this Agreement shall be deemed to constitute the relationship of partners nor of
principal and agent between the Parties.
	 
	18.2	 	No Responsibility for Other Party
	 
	 	 	Neither Party nor its Affiliates shall be responsible for the acts or defaults of the other
Party or its Affiliates or the employees or representatives of the other Party or its
Affiliates.
	 
	19.	 	ASSIGNMENT AND DELEGATION
	 
	19.1	 	Permitted Assignments
	 
	19.1.1	 	Assignment by either Party. Either Party may on written notice to the other Party but
without that other Party’s consent, assign any or all of its rights and delegate any or all of
its obligations under this Agreement to any of its Affiliates or to any successor in interest
(whether by merger, acquisition, asset purchase or otherwise) to all or substantially all of
the business to which this Agreement relates.
	 
	19.1.2	 	Assignments by Emergent. Emergent may:

	 	(a)	 	on written notice to sanofi pasteur but without sanofi pasteur’s consent,
assign to any Third Party any or all of Emergent’s rights under Clause 7.2 and Clause
7.3, and in connection with such an assignment, any or all of its rights under Clause
7.4, Clause 7.6 through 7.9 and/or Clause 7.11; and
	 
	 	(b)	 	assign, and grant a security interest in, without the consent of sanofi
pasteur, any or all of its rights under this Agreement to any Third Party providing
financing to Emergent, and its successors and assigns, or any agent or trustee acting
on its behalf. sanofi pasteur hereby acknowledges that any such assignment and
granting of a security interest are made only for the purpose of securing Emergent’s
obligations to such Third Party under the applicable financing documents, and shall not
subject such Third Party, and its respective successors and assigns, or any agent or
trustee acting on its behalf, to, or transfer or in any way affect or modify, any
obligation or liability that Emergent may have to sanofi pasteur hereunder. Further,
notwithstanding Clause 20, any such Third Party shall be considered a third-party
beneficiary of this Agreement with a right of enforcement as if it were a Party hereto.

	19.2	 	Other Assignments

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	 	 	Subject to the foregoing provisions of Clause 19.1 neither Party shall assign, sub-contract,
sub-license, charge or part with or otherwise dispose of this Agreement or the benefit
thereof or any right or obligation hereunder to a Third Party without the express prior
written consent of the other Party such consent not to be
unreasonably withheld, conditioned, or delayed.
	 
	19.3	 	Performance by Affiliates
	 
	 	 	Each Party may perform any and all of its obligations and exercise any and all of its rights
under this Agreement through any Affiliate; provided that such Party shall remain
responsible to the other Party for the compliance by any such Affiliate of its performance
of this Agreement.
	 
	20.	 	THIRD PARTY RIGHTS
	 
	 	 	This Agreement does not create any right enforceable by any person who is not a Party except
that a person who is the permitted successor to or assignee of the rights of a Party shall,
subject to and upon any succession or assignment permitted by this Agreement, be deemed to
be a party to this Agreement and the rights of such successor or assignee shall be regulated
by the terms of this Agreement.
	 
	21.	 	WAIVER
	 
	 	 	The failure on the part of either Party to exercise or enforce any right conferred upon it
hereunder shall not be deemed to be a waiver of any such right or operate to bar the
enforcement thereof at any time or times thereafter.
	 
	22.	 	SEVERABILITY
	 
	22.1	 	Severability
	 
	 	 	If the whole or any part of this Agreement is or becomes or is declared illegal, invalid or
unenforceable in any jurisdiction for any reason (including both by reason of the provisions
of any legislation and also by reason of any decision of any court or Regulatory Authority
which either has jurisdiction over this Agreement or has jurisdiction over any of the
Parties):

	 	(a)	 	in the case of the illegality, invalidity or unenforceability of the whole of
this Agreement, it shall terminate in relation to the jurisdiction in question; or
	 
	 	(b)	 	in the case of the illegality, invalidity or unenforceability of part of this
Agreement, that part shall be severed from this Agreement in the jurisdiction in
question and that illegality, invalidity or unenforceability shall not in any way
whatsoever prejudice or affect the remaining parts of this Agreement which shall
continue in full force and effect.

	22.2	 	Good Faith Negotiation
	 
	 	 	If any such circumstances arise and the commercial relationship between the Parties
contemplated hereby is as a result significantly altered the Parties shall negotiate in good
faith an appropriate amendment to this Agreement.

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	23.	 	ENTIRE AGREEMENT
	 
	23.1	 	Entire Agreement
	 
	 	 	This Agreement (including the Schedules) constitute the entire agreement between the parties
relating to their subject matter, and supersede all prior written or oral agreements,
representations or understandings between the parties relating to that subject matter.
	 
	23.2	 	No Reliance on Other Provisions
	 
	 	 	Each Party confirms that, in agreeing to enter into this Agreement, it has not relied on any
representation, warranty, collateral contract or other assurance except those set out in
this Agreement and to the extent any previous representation, warranty, collateral contract
or assurance was made to a Party, such Party waives all rights and remedies with respect
thereto.
	 
	23.3	 	Implied Terms
	 
	 	 	ALL CONDITIONS, WARRANTIES AND OTHER TERMS IMPLIED BY STATUTE OR COMMON LAW ARE HEREBY
EXCLUDED TO THE FULLEST EXTENT PERMITTED BY LAW.
	 
	23.4	 	No Exclusion for Fraud
	 
	 	 	Nothing in this Agreement will operate to limit or exclude a Party’s liability for fraud.
	 
	24.	 	AMENDMENTS
	 
	 	 	No amendment or variation of this Agreement shall be valid and effective unless in writing
and signed by or on behalf of each Party.
	 
	25.	 	GOVERNING LAW AND JURISDICTION
	 
	25.1	 	Governing Law
	 
	 	 	This Agreement shall be governed and construed in accordance with the laws of the State of
Delaware, without giving effect to the conflicts of laws principles thereof.
	 
	25.2	 	Dispute Resolution
	 
	 	 	Except as provided in Clause 3.5.1, or in relation to any matter which is to be finally
determined by an independent expert in accordance with this Agreement, if a dispute arises
between the Parties in connection with or relating to this Agreement or any document or
instrument delivered in connection with this Agreement, then either Party shall have the
right to refer such dispute to the Senior Officers who shall seek to resolve such dispute.
Any final decision mutually agreed to by the Senior Officers shall be in writing and shall
be conclusive and binding on the Parties. If the Senior Officers are not able to agree on
the resolution of an issue within twenty (20) days after such issue was first referred to
them (or such longer period as they may agree), Clause 25.3 shall apply.

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	25.3	 	Jurisdiction
	 
	 	 	Subject to Clause 25.2, all disputes between the Parties arising in connection with this
Agreement shall be referred to and finally resolved by the courts located in the State of
Delaware and the Parties irrevocably and unconditionally submit to the exclusive
jurisdiction of such courts for any action, suit or proceeding arising out of or relating to
this Agreement, and agree not to commence any action, suit or proceeding related thereto
except in such courts. The Parties irrevocably and unconditionally waive their right to a
jury trial. The Parties further hereby irrevocably and unconditionally waive any objection
to the laying of venue of any action, suit or proceeding arising out of or relating to this
Agreement in such courts, and hereby further irrevocably and unconditionally waive and agree
not to plead or claim in any such court that any such action, suit or proceeding brought in
any such court has been brought in an inconvenient forum.
	 
	25.4	 	Process Agents
	 
	 	 	Without prejudice to any other mode of service allowed under any relevant law:

	 	(a)	 	Emergent irrevocably appoints Emergent Biosolutions, Inc as its agent for
service of process in relation to any proceedings before the courts located in the
State of Delaware in connection with this Agreement and further agrees that service of
any process, summons, notice or document by U.S. registered mail to the General Counsel
of Emergent Biosolutions, Inc at the address for that company set out in Clause 17.3
(or such other address in the United States as may have been notified to sanofi pasteur
in accordance with Clause 17) shall be effective service of process for any action,
suit or proceeding brought against it under this Agreement; and
	 
	 	(b)	 	sanofi pasteur irrevocably appoints Connaught Technology Corp. as its agent for
service of process in relation to any proceedings before the courts located in the
State of Delaware in connection with this Agreement and further agrees that service of
any process, summons, notice or document by U.S. registered mail to Kathleen Winter,
President of Connaught Technology Corp. (or any successor President) at 3711 Kennett
Pike, Suite 200 Greenville, Delaware 19807; (or such other address in the United States
as may have been notified to Emergent in accordance with Clause 17) shall be effective
service of process for any action, suit or proceeding brought against it under this
Agreement in any such court.

	25.5	 	Interim Relief
	 
	 	 	Nothing in this Agreement shall prohibit a Party from seeking interim relief in any court of
competent jurisdiction.
	 
	26.	 	SUCCESSORS AND ASSIGNS
	 
	 	 	This Agreement shall be binding upon and enure for the benefit of both Parties and their
successors and permitted assigns, as the case may be.

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	27.	 	COUNTERPARTS
	 
	 	 	This Agreement may be executed in any number of counterparts and all the counterparts when
taken together will constitute one agreement. Each Party may enter into this Agreement by
executing a counterpart.
	 
	28.	 	LANGUAGE
	 
	 	 	This Agreement is drawn up and executed in the English language. If there is any conflict
between this Agreement and any translation of this Agreement, the English language version
of this Agreement will prevail.

         IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly
authorised representatives.

	 	 	 	 	 	 	 	 	 	 
	EMERGENT EUROPE LIMITED	 	 	 	SANOFI PASTEUR, S.A.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ S.N. Chatfield
	 	 	 	By:
	 	/s/ Dominique Carouge
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name: Dr. Steve Chatfield PhD	 	 	 	Name: Dominique Carouge
	Title: President	 	 	 	Title: Chief Financial Officer
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Michel DeWilde
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	Name: Michel DeWilde
	 	 	 	 	 	 	Title: Sr. Vice President of Research &
Development

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Schedule 1

Appendix 1

Outline Candidate Evaluation and Selection Plan

1. Introduction

This appendix is intended to serve as supporting documentation to the main body of the Agreement.
It has been compiled on the basis of a number of face to face interactions and represents the
parties shared view of the work-plan required to fully evaluate the Candidate Antigens and to
select Candidate Antigens for clinical development. The plan will be subject to change as agreed by
the Steering Committee (SC), but it is recognised that the plan will require both parties to commit
resources (personnel and equipment) that cannot be redeployed easily.

Sanofi pasteur and Emergent propose to enter a collaboration to develop a Meningitis B vaccine
based on one or more of the potential [**] Candidate Antigens that Emergent has identified. These
Candidate Antigens were identified as virulence genes encoding probable surface located proteins in
a signature–tagged mutagenesis (STM) screen, or as surface located or secreted proteins in a
leaderless PhoA functional screen. The Candidate Antigens are described and claimed in the Emergent
owned patent applications [**] and [**] and related national filings and divisionals (as listed in
Schedule 5 under Emergent Independent Patent Rights).

The starting point of the Co-Development Programme is to evaluate the pool of approximately [**]
Candidate Antigens as potential meningitis vaccine candidates. An effective vaccine providing broad
coverage against multiple menB strains or even potentially against multiple meningitis serogroups
may contain multiple antigens ([**] antigens). In order to select Candidate Antigens or Programme
Antigens for clinical development the Parties have agreed the Outline Candidate Evaluation and
Selection plan detailed within this Appendix. This plan describes the main tasks to be performed
and the Party or Parties responsible for performing each task. This plan may be refined
periodically as necessary upon the agreement of the SC. In the following plan the evaluation and
selection steps apply equally to Programme Antigens as to Candidate Antigens, however only the term
Candidate Antigen is used for simplicity.

The aim of the candidate evaluation process is to comprehensively evaluate the pool of Candidate
Antigens and to ensure that a suitable preclinical data package (with emphasis on functional assays
and conservation) is generated on each of the Candidate Antigens in a systematic and objective
manner to enable selection of individual Candidate Antigens for clinical development within an
appropriate timeframe. However, if promising Candidate Antigens are

			
	 	 	 
	Schedule 1 Appendix 1
	 	1     

 

 

identified early in the evaluation process that meet the pre-clinical selection criteria for
clinical development, the SC will consider these Candidate Antigens for immediate entry into
clinical development, ahead of completing evaluation of the remaining Candidate Antigens. In
addition, promising Candidate Antigens will also be evaluated in combinations where appropriate.

The selection criteria for selecting Candidate Antigens for clinical development are to be
finalised and agreed by the SC, but will be based on the selection criteria listed below.

2. Prioritisation of Candidate Antigens for Pre-Clinical Screening

Given the large number of potential Candidate Antigens [**], the Candidate Antigens will first be
evaluated on the basis of [**] and [**] to enable a prioritised Candidate Antigen list to be
compiled.

2.1 [**] (Task Responsibility; Emergent and sanofi pasteur)

Emergent has performed some initial screens for [**]. Sanofi pasteur has also performed [**].

[**] Candidate Antigens have been identified that have potentially significant [**] and which
may require further [**].

Sanofi pasteur has strong [**] capabilities, particularly in the areas of [**]. It is proposed that
sanofi pasteur lead the [**] analysis of these Candidate Antigens.

If the [**], then a decision will be taken on whether the [**]. The collaboration will then
consider the use of these [**] proteins. Candidate Antigens that [**] will be excluded.

			
	 	 	 
	Schedule 1 Appendix 1
	 	2     

 

 

2.2 Intellectual property review (Task Responsibility; Emergent and sanofi pasteur)

Sanofi pasteur and Emergent will agree on the patentability and freedom to operate position for
each Candidate Antigen or Programme Antigen. It is envisaged that the [**] will be key to and
underpin the product development and that additional Intellectual Property [**] is likely to be
generated during the collaboration which will provide further patent protection for any
collaboration Product.

2.3 [**] (Task Responsibility; Emergent and sanofi pasteur)

Emergent and sanofi pasteur have performed a number of [**] screens to rank the Candidate Antigens
(see below). Sanofi pasteur and Emergent have agreed to a prioritised list of Candidate Antigens
[**].

2.3.1. [**] (Task Responsibility; Emergent)

An [**] screen has been performed to determine the level of [**]. Candidate Antigens have been
ranked in the following order;

	 	•	 	[**]

2.3.2. [**] (Task Responsibility; Emergent and sanofi pasteur)

Candidate Antigens have been updated for [**] using [**] Candidate Antigens have been predicted to
be [**]. The work plan below is focused on these [**] candidates. [**] of remaining Candidate
Antigens will be experimentally confirmed at a later stage.

The Candidate Antigens clearly predicted to be [**] have been prioritised, followed by those with
[**].

2.3.3. Literature search (Task Responsibility; Emergent)

The literature search for each Candidate Antigen will be updated. Candidate Antigens known to be
[**] have been identified [**].

			
	 	 	 
	Schedule 1 Appendix 1
	 	3     

 

 

3. Preclinical Evaluation – [**]

[**] Candidate Antigens will be evaluated for [**]. Expressed Candidate Antigen proteins will be
used to [**].

Of those [**] prioritized Candidate Antigens, [**]

3.1 Candidate Antigen [**] (Task Responsibility; Emergent)

The high degree of [**] seen within the [**] of the Candidate Antigens [**] suggests that the
Candidate Antigens are likely to be [**].

[**] screening of each Candidate Antigen will be performed initially for approximately [**]. This
involves using [**]. These would first be checked [**], but would be underwritten by [**]. This
approach should pick up Candidate Antigens that have [**] and will be used as a criterion to
exclude Candidate Antigens from further progress on the basis of [**]. However, even if [**] is
poor, this data may be valuable in later decisions on [**].

It is likely that many if not all Candidate Antigen will pass this [**] screen and that a
significant number of Candidate Antigens will require extended [**] screening against a [**] at a
later point in the Co-Development Programme, particularly if selected as a Clinical Candidate.

			
	 	 	 
	Schedule 1 Appendix 1
	 	4     

 

 

3.2. Candidate Antigen [**] (Task Responsibility; Emergent)

It is likely that [**] of Candidate Antigens will prove to be a significant rate-limiting step
within the pre-clinical screening programme. The approach taken will be to [**]. Less emphasis
will be applied in producing a [**] for a given Candidate Antigen at this initial evaluation stage,
with the emphasis on producing [**] as quickly as possible for [**] evaluation.

[**]. Emergent propose to use the [**] that should be suitable for down-stream process (DSP)
development. [**] Candidate Antigens may not be at suitable levels or be deemed as unsuitable for
further process development and alternate [**] may be considered.

Given that many of the Candidate Antigens are predicted to be [**] proteins, it is likely that they
will be [**] that contain highly pure Candidate Antigen [**]. This can be advantageous for [**].
However, the [**]. Once in a [**] state the protein is [**]. The aim of the [**] step is to obtain
protein in a [**] form suitable for [**]. Emergent proposes to assess the success of the [**] using
[**]. The [**] protein should [**].

Particular attention will be given to protein [**], as maintaining [**] may be important in
generating [**], particularly in the case of [**]. A [**] screen will be performed to assess a
range of [**]. As [**] assays are not available, it is proposed that the [**] of the protein [**]
will be defined as the [**]. The success of [**] will initially be assessed by [**]. Samples
which show [**] will then be further analysed by [**].

Emergent propose to [**] only once [**] is demonstrated.

Candidate Antigen proteins that are successfully [**]. This ensures that the material is
sufficiently [**] to allow material to be [**].

3.3. [**] (Task Responsibility; Emergent)

[**] assays depend on the ability of [**]. Different [**], and in particular, different [**] vary
[**]. Therefore they can be expected to vary in [**]. Overall, there is not a clear [**] among
[**], although in most systems, [**] has lowest activity in terms of [**] regimen that induces [**]
would give the best chances of [**]. Therefore [**] are selected for pre-clinical studies, as the
priority should be [**] will thus initially be selected on the basis of [**], rather than whether
or not [**].

Accordingly Emergent proposes to use the [**] may be included at a later stage with Candidate
Antigens firstly selected with [**].

			
	 	 	 
	Schedule 1 Appendix 1
	 	5     

 

 

[**] obtained from [**] will be analysed in a specific protein [**] in order to confirm that a [**]
each Candidate Antigen. [**] will then be analysed [**] in order to identify [**] from those
[**] which are seen to [**] will not be processed any further. All remaining [**] will be [**]
tested in the remaining pre-clinical assays.

[**] will only be performed if time and resource permits, priority will be given to performance of
the [**] assays.

3.4 Pre-clinical [**] evaluation (Task Responsibility; Emergent and sanofi pasteur)

Pre-clinical [**] testing will be used to establish which Candidate Antigens will be selected for
further clinical development. Selection can be based upon [**]

[**] used in the pre-clinical assays may be very important for each antigen and [**] in some or all
of the pre-clinical assays. [**] will be evaluated, first under [**] and alternate [**].

3.5 [**] (Task Responsibility; Emergent)

[**] will be used to measure if [**] the Candidate Antigens [**]. Furthermore, a number of [**]
will be evaluated to demonstrate [**]. Alternatively, [**] may be used to [**].

3.6 [**] (Task Responsibility; Emergent and sanofi pasteur)

A reliable and well-understood [**] is a key functional activity test for each Candidate Antigen as
this assay is currently the [**]. Both Emergent and sanofi pasteur will perform [**]. Candidates
that meet the [**] selection criteria set by the SC, will be considered by the SC for entry into
clinical development.

A candidate that does not demonstrate [**], or in another agreed [**] assay [**], is unlikely to be
taken forward into clinical development.

3.7 [**] assays (Task Responsibility; Emergent or sanofi pasteur),

Assays that utilise [**] will be used as an alternative [**] measure [**]. Both [**] assays
provide [**] measurement, although these assays can be [**]. However, the assay may be more
sensitive than the [**]. Positive activity in either assay format is valuable, however

			
	 	 	 
	Schedule 1 Appendix 1
	 	6     

 

 

[**] will be analysed in this assay.

3.8 [**] (Task Responsibility; sanofi pasteur)

[**] can give valuable characterisation data on individual Candidate Antigens. Demonstration of
[**] for a Candidate Antigen is valuable as [**]. The parties intend that only Candidate Antigens
that fail to generate [**] but are positive in pre-clinical
[**] assays [**], should be further
evaluated for the [**]. Further [**] work may be performed once a Candidate Antigen has been
selected for clinical development.

A flow chart of the proposed Candidate Evaluation and Selection Plan is shown below.

[**]

			
	 	 	 
	Schedule 1 Appendix 1
	 	7     

 

 

4. Task Responsibilities

The table below summarises the main tasks and responsible parties for the Candidate Evaluation and
Selection Plan.

Table 1. Task responsibilities for the Candidate Evaluation and Selection Plan

	 	 	 	 	 
	Task	 	 	 	 
	no.	 	Task Description	 	Responsible Party
	 

	 	Prioritisation of Candidate Antigens	 	 
	 
	 	 	 	 
	1

	 	[**]
	 	Joint
	2

	 	[**]
	 	Joint
	3

	 	[**]
	 	Emergent
	4

	 	[**]
	 	Joint
	5

	 	[**]
	 	Emergent
	 
	 	 	 	 
	 

	 	Preclinical Evaluation	 	 
	 
	 	 	 	 
	6

	 	[**]
	 	Emergent
	7

	 	[**]
	 	Emergent
	8

	 	[**]
	 	Emergent
	9

	 	[**]
	 	Emergent
	10

	 	[**]
	 	Joint
	11

	 	[**]
	 	Emergent
	12

	 	[**]
	 	sanofi pasteur

5. Project Management and Resources Required (Task Responsibility; Joint)

5.1 Project Timelines

The current project work-plan to evaluate the [**] Candidate Antigens will be completed within
approximately [**] with the proposed level of resource below. A Gantt chart outlining the main
tasks and associated timelines follows.

[**]

			
	 	 	 
	Schedule 1 Appendix 1
	 	8     

 

 

The Gantt chart assumes that full preclinical testing [**] will be performed for a maximum of [**]
candidates, to allow for an attrition rate of those candidates that are deprioritised during the
evaluation process, for instance if the [**].

5.2 Emergent Resource Required

In order to resource the programme adequately, Emergent will need to dedicate the necessary number
of skilled Full Time Equivalents (FTEs) to the project. Whilst it is recognised that the work-plan
may be modified by the SC, the following represents Emergent’s best estimate of the Emergent
resource that will be required to execute the work-plan illustrated in the Gantt chart above.
Resource levels assume a [**]. The proposed resource levels do not include any contingency resource
[**]

Year 1

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Function	 	M1	 	M2	 	M3	 	M4	 	M5	 	M6	 	M7	 	M8	 	M9	 	M10	 	M11	 	M12
	Mol Biol
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Purification
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Purification
management
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pre-clinical
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Pre-clinical
management
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Project Leader
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Total (FTE)
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]

Year 2

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Function	 	M13	 	M14	 	M15	 	M16	 	M17	 	M18	 	M19	 	M20	 	M21	 	M22	 	M23	 	M24
	Mol Biol
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Purification
	 	[**]	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Purification
management
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pre-clinical
	 	[**]	 	[**]	 	[**]	 	[**]	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pre-clinical
management
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	 	 	 	 	 	 	 	 	 
	Project Leader
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	 	 	 	 	 	 	 	 	 
	Total (FTE)
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	 	 	 	 	 	 	 	 	 

5.3 [**]

			
	 	 	 
	Schedule 1 Appendix 1
	 	9     

 

 

The major external cost associated with the project work-plan will be [**].

At the present time, based on current rates, this is estimated as being approximately [**].

5.4 Capital Expenditure Equipment

At this point it is anticipated that the following capital expenditure equipment will be required
to meet the projected needs of the project work-plan. Any further

capital expenditure required will be discussed and agreed at the Joint Project Team level and
approved as necessary by the SC. This equipment remains the property of [**].

	 	 	 	 	 	 	 
	 	 	No.	 	Unit	 	Total
	Equipment	 	Req.	 	Cost (£)	 	Cost (£)
	[**]
	 	[**]	 	[**]	 	[**]
	[**]
	 	[**]	 	[**]	 	[**]
	[**]
	 	[**]	 	[**]	 	[**]

6. Selection of Candidate Antigens for clinical development

(Emergent and sanofi pasteur)

Following completion of the pre-clinical evaluation of the Candidate Antigens a final ranking of
the Candidate Antigens will be performed to facilitate selection of the best Candidate Antigens for
clinical development.

Candidate Antigens will only be selected for clinical development by the SC if they pass certain
criteria, currently anticipated to include the following;

[**]

These criteria will be defined and agreed by the SC in advance of any Candidate Antigen selection
for clinical development.

Assuming all of the above criteria are met for more than one Candidate Antigen, each criterion
ranking, together with the ability to develop a scalable commercial process will be used to
prioritise the Candidate Antigens for entry into full-scale development and ultimately clinical
development.

At the SC’s discretion, there is also the option to [**] into the clinic ahead of completing the
evaluation of all Candidate Antigens, if the Candidate Antigens meet the agreed pre-clinical
selection criteria.

The Parties envisage that [**] Candidate Antigens will be selected for clinical development, with
the final vaccine comprising [**].

[**]

			
	 	 	 
	Schedule 1 Appendix 1
	 	10     

 

 

Schedule 1

Appendix 2

Early Development Phase

Phase I Product and Clinical Development Plan

This appendix is intended to serve as supporting documentation to the main body of the agreement.

It is recognised that it is difficult to plan precisely the further one goes out from the
commencement of the project. In this regard it is acknowledged that the following plan may change,
subject to approval by the Steering Committee (SC). However the material below represents an
overview of the work that will be required to take one protein through from selection for clinical
development to the end of Phase I.

Specifically, this plan highlights the work that will be required to take one protein from the
point at which it becomes a Clinical Candidate in the evaluation and selection phase to the point
at which the data from a Phase I will have been analysed and reported.

It is recognised that there may need to be a Transition Plan to attain smooth and efficient
handover of pilot scale processes and associated data to Sanofi after completion of Phase I trials.

If more than one Clinical Candidate were to be chosen for clinical development then the plan will
need to be modified appropriately to take account of the extra resource (and potential synergies)
required by such a decision.

Following the selection of Clinical Candidates(s) for clinical development, the Steering Committee
will finalise and agree the details of a Phase I Product and Clinical Development Plan for each
selected antigen including the main activities to be performed, allocation of responsibilities, an
appropriate level of product compliance, the resource requirements (financial, FTEs, contractors,
hardware and reagents) and expected timelines. The general principles and the anticipated major
components of the plan are listed below.

General Principles

Emergent will be responsible for manufacture of Phase I clinical material, for interactions with
regulatory bodies relating to Phase I, and for conducting/managing Phase I clinical trials.

The components of a Phase I Product and Clinical Development Plan will include the following;

			
	 	 	 
	Schedule 1 Appendix 2
	 	1     

 

 

	 	 	 	 	 
	 

	 	•
	 	[**]
	 

	 	•
	 	[**]
	 

	 	•
	 	[**]
	 

	 	•
	 	[**]
	 

	 	•
	 	[**]
	 

	 	•
	 	[**]
	 

	 	•
	 	[**]
	 

	 	•
	 	[**]
	 

	 	•
	 	[**]
	 

	 	•
	 	[**]
	 

	 	•
	 	[**]

An outline description of the anticipated tasks is given below.

1. Further Preclinical Characterisation (Task responsibility; Emergent and Sanofi)

The intention of the pre-clinical screening and evaluation process is to select candidates that are
suitable for development as a vaccine against N. meningitidis serogroup B within an appropriate
timeframe. When a Clinical Candidate moves from pre-clinical screening into clinical development
further pre-clinical characterisation will be performed. Whilst the additional pre-clinical work
required is likely to be Clinical Candidate specific, further [**] studies may be performed, [**].

Following selection of a Clinical Candidate for clinical development, one of the first steps will
be to demonstrate that the [**] profile for the Clinical Candidate remains consistent following
[**]. For this purpose the Clinical Candidate [**] Clinical Candidate protein will then be [**].

The [**] assays used to demonstrate [**] in the preclinical selection screen will then be repeated
for [**]. Depending on the [**] assay selected, these assays may be performed at both Emergent and
Sanofi. The corresponding [**] will be repeated alongside the [**] as a positive control. This
will confirm that the [**]. However, if the [**] fails to demonstrate [**] activity, this may
indicate a technical problem, which will

			
	 	 	 
	Schedule 1 Appendix 2
	 	2     

 

 

result in the investigation of the [**] methods employed. Assuming comparability in [**] activity
between [**] is demonstrated, the next steps in the development pathway will commence.

As further Clinical Candidates move into clinical development, detailed pre-clinical studies will
be performed to support [**] that would support the clinical development strategy

2. Product Development (Task responsibility; Emergent)

[**] characterisation will be performed on the [**].

2.1 [**] and Selection

Emergent will [**] and select the [**] in-house. The criteria for selection are:

	 	i)	 	[**]
	 
	 	ii)	 	[**]
	 
	 	iii)	 	[**]

If a [**] meets all of these criteria, a [**] will be manufactured in-house. This [**] will be
progressed into development. No animal-derived materials will be used in the [**] in-house or at
Contract Manufacturing Organisations (CMOs).

2.2 [**]

The [**] will be transferred to the selected Contract Manufacturing Organisation (CMO) and will be
tested to ensure that it is pure and free from adventitious agents before being accepted into the
CMO facility. The [**] will be manufactured from the [**]. This manufacture will be performed by
[**]. Phase I clinical supplies will be manufactured directly from the [**]. It is anticipated
that the [**] will be manufactured following successful completion of Phase I.

2.3 Process Development and Manufacturing Strategy

[**] purification processes suitable for transfer to a CMO will be developed in-house and will
immediately focus on deriving both a commercially and regulatory acceptable process. Emergent will
systematically screen each process step to find the optimal process conditions e.g. [**]

The selected skeleton process will be refined and scaled up at a CMO so that it is suitable for the
manufacture of clinical trials material. Emergent will provide the necessary support to the CMO to
ensure that a suitable manufacturing process is developed in a timely manner. Emergent will manage
the transfer of

			
	 	 	 
	Schedule 1 Appendix 2
	 	3     

 

 

the process, further process development and manufacture at the CMO of material for use in
toxicology and clinical studies.

2.3.1 Development of Processes

2.3.1.1 Early Process Development

The purpose of early process development, undertaken in the laboratories of Emergent, is to
determine a skeleton process that will be transferred to a CMO for refinement and scale-up.

2.3.1.2 Upstream Development

[**] will be determined, [**] for the Clinical Candidate performed. The [**] will be determined.
[**] will be performed.

2.3.1.3 Downstream Development

In the case that the protein is [**], then scouting of [**] will be performed. Where the protein
is [**], then [**] will be performed and optimised. [**] will be evaluated [**] and the data
analysed using [**] analysis, [**]. Scouting of the [**], where possible. No animal components
will be used in the manufacturing process for any of the candidates.

This small-scale material will likely be used to begin performing the primary pharmacodynamic
studies and analytical method development and formulation studies. Additionally, degradation and
stability studies will begin at once to assess the degradation profile of the material and
selection of suitable methods to perform longer-term stability studies.

This material may form an early reference preparation for use in various analytical and
pre-clinical assays.

2.4 Process Transfer, Scale Up and Consistency Runs

Once the small-scale process is transferred to the CMO, it will be refined/optimised [**]. Finally
the process will be performed several times to ensure reasonable process robustness and consistency
as part of process understanding studies. Material from this stage may also be used for ongoing
pre-clinical work in addition to the continued development of In-Process Control (IPC) and Drug
Substance (DS) assays.

2.5 Manufacturing Scale Batch

After successful completion of consistency runs at small scale, the process will be operated at the
pilot manufacturing scale under non-GMP conditions to verify

			
	 	 	 
	Schedule 1 Appendix 2
	 	4     

 

 

its scalability by comparing appropriate parameters of both the small and large-scale batches. This
also gives the opportunity for the GMP operators in the manufacturing plant to learn the
manufacturing process and to develop appropriate batch manufacturing records. The material
generated from this batch represents the first large-scale batch that would be comparable to that
planned for the clinical batch. This material will be used in the pre-clinical package and also to
qualify methods used for release of the toxicology and clinical batches as well as providing the
basis for the setting of specifications. Stability studies will also be performed on the material.

2.6 Toxicology Batch

The toxicology batch will be produced at the same scale as the clinical batch [**], will be
released to specification and will be used primarily for toxicology studies. It will also undergo
analytical characterisation suitable for incorporation within a Clinical Trial Application (CTA).
Stability studies will also be performed on the material and it may also be used as a reference
preparation for use as reference controls and standards in assays.

2.7 Clinical Batch (GMP)

The clinical batch will be produced to GMP and released for use in a clinical study. Again, this
batch will undergo product characterisation and stability testing.

2.7.1 Method Development

Analytical methods for IPC, DS and Drug Product (DP) will be developed and qualified prior to
initiation of Phase I clinical trials. Methods will be developed in-house or contracted to a CMO
depending on the complexity or nature of the assay. This will initially be performed on early
process material once available. Qualification of assays will be performed upon large-scale
process derived material. Assays will be transferred to the QC laboratory of the CMO or nominated
sub-contractor, as appropriate, where QC release testing of cGMP lots will be undertaken.

			
	 	 	 
	Schedule 1 Appendix 2
	 	5     

 

 

2.8 Formulation

At the current time, it is anticipated that the DP formulation will be based on [**] will be
evaluated [**]. Conditions for the optimum [**] will be determined and these initial experiments
will be carried out using protein prepared from the in-house skeleton process. Once material
manufactured at the CMO is available, formulation experiments will be repeated using the knowledge
gained from the initial formulation development work using the early material from the skeleton
process.

The formulation process will then be transferred to a secondary manufacturer for the manufacture of
transfer, toxicology and clinical batches of DP.

2.9 Stability of Product

Stability studies will be performed on both DS and DP. Tests used will be shown to be stability
indicating and will selectively be used throughout the stability assessment. [**] will be used to
predict a suitable shelf life for the product.

2.10 Product Characterisation

Preliminary product characterisation will be performed upon the active pharmaceutical ingredient
(API). This will assess [**] of the product, potentially using state of the art techniques
indicated in ICH guidelines, e.g. [**].

2.11 Generation of a Pre-Clinical package for a Clinical Trial Application [**]

2.11.1 Primary Pharmacodynamic Studies

Data obtained from the pre-clinical screening of the candidate will be detailed in this section of
the application, including [**]. Dosing studies in animals will help to determine [**]. These
studies will also support the formulation studies as described above.

2.11.1.1 [**] Studies

[**] will be assessed. [**] will be evaluated in an appropriate [**]. The [**] will then be
assessed by [**].

2.11.1.2 [**] Studies

			
	 	 	 
	Schedule 1 Appendix 2
	 	6     

 

 

The effect of [**] will be evaluated for each candidate [**]. This may well be performed as part of
the [**] studies outlined above.

2.11.2 Secondary Pharmacodynamic Studies

2.11.2.1 Screening of [**]

[**] will be assessed in a [**]. Furthermore, [**].

2.11.3 Toxicology Studies

Repeat dose toxicology and local tolerance will be performed [**]. Studies will be reflective of
the clinical dosing regimen.

2.12 GMP Manufacturing

The Parties intend that GMP manufacturing will be performed by the same CMO that is carrying out
the process development work for an individual protein candidate.

2.12.1 Transfer of Process from Development to GMP

Emergent will oversee the transfer of the process from the in-house development group to the GMP
group at the chosen CMO. GMP operators from the CMO will be trained on the details of the process
by Emergent. Emergent will approve the GMP batch records prior to commencement of manufacturing.

2.12.2 Manufacturing

The CMO will produce a transfer batch (non-GMP) at full (pilot) scale, one GMP-like
toxicology/stability batch and one GMP clinical batch of Drug Substance. The final process
developed by the CMO will yield [**].

3. Phase I Clinical and Regulatory Plan (Task responsibility; Emergent)

3.1 General Principles

It is anticipated that Clinical Candidate(s) selected for clinical development will have
demonstrated the ability to [**]. However, Clinical Candidates may have demonstrated [**]. The
objective of the Phase I studies will be to determine safety and immunogenicity (serum antibody
levels) of Clinical Candidates. However, it is important for ease of clinical development that [**]
antibodies generated by the Clinical Candidate(s) demonstrate [**].

			
	 	 	 
	Schedule 1 Appendix 2
	 	7     

 

 

The final vaccine product may contain [**] Clinical Candidate. It is considered unlikely that the
final vaccine product will contain [**] Clinical Candidates [**] raises a number of challenges in
the clinical development path. Hence the early clinical research work will be designed to
demonstrate [**], safely and that the immune response induced is likely to be protective [**].

The Parties intend that the Phase I safety and immunogenicity studies will be undertaken by
Emergent in the UK, under Clinical Trial Applications (CTA). This is considered to be the [**].
The Phase I studies will be Emergent sponsored studies and each study will require its own CTA. In
support of each CTA, each Clinical Candidate will require its own Investigational Medicinal Product
Dossier (IMPD), as each Clinical Candidate will be classified as a different product.

Each [**] studied is also likely to require its own IMPD as it is potentially classified as a
separate product. [**].

An outline of the likely Phase I clinical development path is provided below. Detailed clinical
development plans will be compiled following further discussion between the Parties and agreed by
the SC ahead of selection of candidate antigens for clinical development. [**]. In addition, the
preferred optimal study design needs to be decided on the basis of a number of factors and it is
not possible to be definitive about the final study design at this stage of development.

3.2 Phase I Clinical Studies

3.2.1 Objectives

The key objective for the Phase I studies will be to demonstrate for individual Clinical Candidates
[**] that a range of doses can be administered, that the Clinical Candidates have an acceptable
safety profile and induce a potentially protective immune response [**] against [**].

3.2.2 Previous Study

Emergent have already undertaken a Phase I study in healthy volunteers [**]. However, the design
of the [**] study can however be used to assist the design of future Phase I studies.

3.2.3 Design of Study

Phase I studies are exploratory and are usually performed in small groups of twenty (20) to forty
(40) adults to assess the safety of the product and to detect the expected immune response [**].
Phase I studies might also be extended to the final target population [**]. The following general
design is proposed at present. Each Phase I study will investigate a number of different dose
levels (normally up to 4 dose levels) of Clinical Candidates [**]

			
	 	 	 
	Schedule 1 Appendix 2
	 	8     

 

 

and involve [**] subjects per dose group. The studies will enrol male and female adult
volunteer subjects [**]. Each subject will receive up to [**] doses of a single dose level. The
doses will be administered at Time [**] month and [**] months after the first injection [**]. For
reasons of safety, dose escalation will be [**]. Subjects will be dosed [**], such that the first
[**] to be dosed will receive the lowest dose, the second [**] will receive the next highest dose
with the third and fourth [**] receiving the third and fourth highest doses. Consideration of
administering only [**] doses on Days [**] and [**] may also be appropriate. Alternatively,
planning the study to administer [**] doses, but with a review of the [**] data after the second
dose, with a view to stopping the administration of the third dose should [**] be seen after the
second dose, might be worthy of consideration as this will shorten the Phase I development
timelines.

It is proposed that [**] dose levels will be included to establish a no effect/minimal effect dose
group and to investigate if there is a dose response.

Safety will be of primary importance. For this reason dose escalation will be done [**] with the
lowest dose group dosed first and safety reviewed prior to the second dose group receiving their
first dose. Following an appropriate safety review the third [**] will receive their first dose
and if appropriately safe the final [**] will receive their first dose. Hence, the dosing of each
subsequent [**] will occur approximately [**] days after dosing the preceding [**]. Subjects will
receive their second dose [**] days after the first dose and their third dose [**] months after the
first dose. Eligibility for administration of the second and third doses to individual volunteers
will depend on the safety profile in the individual subjects following the first and second doses
and will only be administered if a subject tolerates the first/second injection. Safety reviews
will be conducted after each [**] receives their second and third dose to determine if it is
appropriate to administer the second/third doses to the next [**].

3.2.4 Immunological and Safety Endpoints

Immunological endpoints will be [**]. The [**] will be evaluated [**] will also be evaluated.
Emergent will be responsible for ensuring suitable clinical assays exist that have been qualified
and may be performed within Emergents’s clinical assay laboratory or at a suitable contractor that
is skilled in the testing of clinical samples that possess suitable experience in the techniques
proposed.

Safety endpoints will be adverse events, incidence of flu-like illnesses (myalgia, fever,
muscle/joint aches, general malaise and headache), serious adverse events and injection site
reactions assessed by the modified Draize score.

			
	 	 	 
	Schedule 1 Appendix 2
	 	9     

 

 

3.2.5 Phase I Study Costs and Timelines

The costs of a Phase I study are estimated in section 4.3. These are Emergents’ best estimates of
potential costs, at this stage, based on previous Phase I trial experience. The budget for Phase I
studies will be agreed by the SC on an annual basis, or at the appropriate time during development.
The estimates in section 4.3 includes the contract fees for a Phase I unit to run the study along
with the project management fees, monitoring costs and performing immunological analysis of
clinical samples. Each study will run for approximately a total of [**] in clinic [**].

If more than one Clinical Candidate becomes available for clinical evaluation at any time [**].

3.2.6 [**] Phase I Studies

The final vaccine formulation may contain [**] Clinical Candidate to provide an effective immune
response against [**]. Therefore there may need to be a need to study [**]. Broadly, there are
[**] potential strategies for a Phase I clinical programme investigating the safety and
immunogenicity [**] and these are outlined below. Emergent’s proposed approach to Phase I clinical
evaluation is the [**] approach, however these plans are for indicative purposes only, until the
number of Clinical Candidates for evaluation and the timing of availability of GMP manufactured
material is known.

3.2.6.1 [**] Approach (Emergent Proposed Approach)

A Phase I clinical trial will be performed as outlined above, to evaluate the first Clinical
Candidate available for clinical evaluation. Assuming that the protein in the study has an
acceptable safety profile, [**] and a second suitable protein is available to move into clinical
research a second Phase I study will be planned that investigates a [**].

The second study in the series will utilise [**]. In this way information on the safety and
immunogenicity [**] will be determined and [**].

			
	 	 	 
	Schedule 1 Appendix 2
	 	10     

 

 

(Note non-clinical and toxicology work [**] will be required, as will an IMPD for Clinical
Candidate 2 [**]). The study will need to investigate up to [**] dose levels of Clinical Candidate
2 as outlined above and [**] at doses identified to be immunogenic and to have an acceptable safety
profile. This could result in up to [**] groups or [**] subjects as outlined below and using
assumed doses as indicated: -

	 	•	 	Clinical Candidate 2 at [**] escalating dose levels ([**] groups). These groups to be
dosed in escalating [**] before [**].
	 
	 	•	 	[**] at escalating dose levels (same quantity of each protein).

Hence, [**] groups could be involved [**]. The duration of the [**] study will depend on how many
groups are dosed, but could be up to [**] weeks in clinic if there are [**] dose groups and [**]
dose levels of each product.

When a third protein is available the next study will investigate [**] doses of Clinical Candidate
3 [**].

The advantage of this approach over screening all proteins [**] is that the safety and efficacy
[**] are potentially looked at much earlier. [**] as soon as Clinical Candidates become available
and this approach is thought to be the quickest route through the Phase I clinical research.

The limitation of this design is that the timings of when [**] become available is unknown. Also,
prior to starting a study where a [**] is to be used all materials for the study will need to have
been manufactured. At this time it will not be known if the new protein [**].

3.2.6.2 Alternative Approaches

Alternative strategies for clinical evaluation [**] include a direct [**] approach where [**] are
selected for clinical studies based on preclinical data. The [**] will then be tested in human
subjects directly in a study as outlined above. The dose groups will be made up of [**]. The
study will be conducted under a

			
	 	 	 
	Schedule 1 Appendix 2
	 	11     

 

 

single CTA but again there will need to be an IMPD for each product used in the study. The size of
the study is difficult to determine, [**] cannot easily be predicted at this time.

The main advantage of this approach is that it could reduce the number of early clinical trials to
be conducted (potentially to one Phase I clinical study) and thus provide a rapid development path.
However, there is a potential risk that a [**]. A further risk of this approach is that a safety
issue [**] could prevent further development of potential safe and effective vaccine [**]. It may
also be more difficult to evaluate [**]. The Clinical Candidates will also have to be available
[**] for preclinical [**] testing, which could delay early clinical proof of concept if a promising
Clinical Candidate is identified early in the selection process.

[**] Phase I studies of Clinical Candidates may also be performed. The safety and immunogenicity
of all the Clinical Candidates is then established [**]. This is the most protracted route of
clinical development and requires extensive resources, particularly if multiple Phase I studies are
to be performed [**].

3.2.6.3 Selection of Phase I Approach

The choice of which approach to take to Phase I development may not be ideally determined at
present, however it seems probable that the proposed series approach will be the most expedient.

4. Project Management and Resources Required; (Task Responsibility; Joint)

4.1 Project Timelines

The parties recognise that it is important to try to perform the clinical studies in as timely a
manner as possible, without compromising the quality or integrity of the programme. As such this
plan will be subject to periodic review by the SC and Joint Project Team. It is anticipated that
the timeline for the Phase I clinical development of a single Clinical Candidate (with the proposed
level of Emergent resource below) will be approximately [**].

These estimates are based upon Emergent’s past experience of Phase I clinical development of
protein vaccine candidates. While the intention is to use a contract manufacturer for manufacture
of GMP clinical material and a contract clinical trial unit for the performance of the clinical
trial, Emergent staff will closely manage and interact with these contract organisations. The
selection of appropriate contract organisations will be agreed at the SC.

			
	 	 	 
	Schedule 1 Appendix 2
	 	12     

 

 

The Gantt chart below represents the main tasks and associated timelines for conducting a Phase I
clinical study for a single protein.

[**]

4.2 Emergent Resource Requirement

In order to resource the programme adequately, Emergent will need to dedicate the necessary number
of skilled Full Time Equivalents (FTEs) to the project. Whilst it is recognised that the work-plan
may be modified by the SC, the following represents Emergent’s best estimate of the Emergent
resource that will be required to execute the work-plan for the Phase I clinical development of a
single Clinical Candidate.

Year 1

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Function	 	M1-Y1	 	M2-Y1	 	M3-Y1	 	M4-Y1	 	M5-Y1	 	M6-Y1	 	M7-Y1	 	M8-Y1	 	M9-Y1	 	M10-Y1	 	M11-Y1	 	M12-Y1
	Mol Biol
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Process Dev
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Analytical Dev
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Pre-clinical Dev
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Regulatory
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	QA
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Clinical Dev
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Project Leader
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Management
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Total (FTEs)
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]

			
	 	 	 
	Schedule 1 Appendix 2
	 	13     

 

 

Year 2

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Function	 	M1-Y2	 	M2-Y2	 	M3-Y2	 	M4-Y2	 	M5-Y2	 	M6-Y2	 	M7-Y2	 	M8-Y2	 	M9-Y2	 	M10-Y2	 	M11-Y2	 	M12-Y2
	Mol Biol
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Process Dev
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Analytical Dev
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Pre-clinical Dev
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Regulatory
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	QA
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Clinical Dev
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Project Leader
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Management
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Total (FTEs)
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]

Year 3

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Function	 	M1-Y3	 	M2-Y3	 	M3-Y3	 	M4-Y3	 	M5-Y3	 	M6-Y3	 	M7-Y3	 	M8-Y3	 	M9-Y3	 	M10-Y3	 	M11-Y3	 	M12-Y3
	Mol Biol
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Process Dev
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Analytical Dev
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Pre-clinical Dev
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Regulatory
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	QA
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Clinical Dev
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Project Leader
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Management
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Total (FTEs)
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]

			
	 	 	 
	Schedule 1 Appendix 2
	 	14     

 

 

Year 4

	 	 	 	 	 	 	 	 	 	 	 
	Function	 	M1-Y4	 	M2-Y4	 	M3-Y4	 	M4-Y4	 	M5-Y4
	Mol Biol
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Process Dev
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Analytical Dev
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Pre-clinical Dev
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Regulatory
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	QA
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Clinical Dev
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Project Leader
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Management
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]
	Total (FTEs)
	 	[**]	 	[**]	 	[**]	 	[**]	 	[**]

4.2.1 Emergent Resource for Production of Multiple Proteins

Resource estimate for clinical development of more than one candidate simultaneously will not be
direct multiples of the FTE figures above but are anticipated to be less than this, as it is
expected that there will be resource efficiencies in developing two or more Clinical Candidates
simultaneously.

			
	 	 	 
	Schedule 1 Appendix 2
	 	15     

 

 

4.3 External Costs – Contract Manufacturing and Performance of Clinical Trials

The external costs associated with the Phase I clinical development of a single protein candidate
is estimated to be approximately £[**]. A break down of the estimated external costs is given
below.

	 	 	 	 	 	 	 
	Function	 	Process / Task	 	Cost (£)	 
	Molecular Biology
	 	[**]	 	 	[**]	 
	Total Molecular Biology
	 	 	 	 	[**]	 
	 
	 	 	 	 	 	 
	Product development
	 	[**]	 	 	[**]	 
	 
	 	[**]	 	 	[**]	 
	 
	 	[**]	 	 	[**]	 
	 
	 	[**]	 	 	[**]	 
	 
	 	[**]	 	 	[**]	 
	 
	 	[**]	 	 	[**]	 
	 
	 	[**]	 	 	[**]	 
	Total product Development
	 	 	 	 	[**]	 
	 
	 	 	 	 	 	 
	Analytical
	 	[**]	 	 	[**]	 
	 
	 	[**]	 	 	[**]	 
	 
	 	[**]	 	 	[**]	 
	 
	 	[**]	 	 	[**]	 
	Total Analytical
	 	 	 	 	[**]	 
	 
	 	 	 	 	 	 
	Pre-clinical
	 	[**]	 	 	[**]	 
	 
	 	[**]	 	 	[**]	 
	Total Pre-Clinical
	 	 	 	 	[**]	 
	 
	 	 	 	 	 	 
	Clinical testing
	 	[**]	 	 	[**]	 
	 
	 	[**]	 	 	[**]	 
	Total clinical Testing
	 	 	 	 	[**]	 
	 
	 	 	 	 	 	 
	Clinical
	 	[**]	 	 	[**]	 
	 
	 	[**]	 	 	[**]	 
	 
	 	[**]	 	 	[**]	 
	 
	 	[**]	 	 	[**]	 
	 
	 	[**]	 	 	[**]	 
	 
	 	[**]	 	 	[**]	 
	 
	 	[**]	 	 	[**]	 
	Total Clinical
	 	 	 	 	[**]	 

			
	 	 	 
	Schedule 1 Appendix 2
	 	16

 

 

	 	 	 	 	 	 	 
	Function	 	Process / Task	 	Cost (£)	 
	Quality
	 	[**]	 	 	[**]	 
	 
	 	[**]	 	 	[**]	 
	 
	 	[**]	 	 	[**]	 
	 
	 	[**]	 	 	[**]	 
	 
	 	[**]	 	 	[**]	 
	Total Quality
	 	 	 	 	[**]	 
	 
	 	 	 	 	 	 
	Regulatory
	 	[**]	 	 	[**]	 
	Total Regulatory
	 	 	 	 	[**]	 
	 
	 	 	 	 	 	 
	Total Other Costs
	 	[**]	 	 	[**]	 
	 
	 	 	 	 	 	 
	Total Direct Project Cost
	 	 	 	 	[**]	 

			
	 	 	 
	Schedule 1 Appendix 2
	 	17

 

 

Schedule 1

Appendix 3

Later Stage Clinical Development Plan

General Principles

Following the completion of the Phase I activities for a Clinical Candidate, Sanofi will assume the
main responsibility for subsequent Development, including later stage clinical trials (Phase II,
Phase III and Phase IV or other post-marketing studies) together with the corresponding regulatory
applications.

Sanofi have considerable expertise and experience in the development of paediatric and
meningococcal vaccines, with marketed polysaccharide vaccines Mengivac® (A + C) and Menomune®
(A/C/W/Y) and marketed polysaccharide conjugate vaccine Menactra® (A/C/W/Y). The Parties intend
that Sanofi will use this expertise to benefit the Development of a serogroup B vaccine Product and
will proceed with Phase II and later stage clinical Development in the most appropriate and time
efficient manner.

Whilst it is not possible at the current stage of development to be definitive in the Later Stage
Clinical Development Plan, the following represents the current view of the probable Later Stage
Clinical Development Plan. This plan will be subject to periodic review by the Steering Committee
(SC) and a more definitive Later Stage Clinical Development Plan will be agreed by the SC ahead of
implementation of the Transition Plan for the relevant Clinical Candidate. For clarity, it is
anticipated that the Later Stage Clinical Development Plan will include the Phase II and Phase III
clinical study design, accompanying regulatory strategy, details of trial sites, investigators and
any involvement or interaction with public health bodies, as well as a manufacturing strategy for
clinical trial materials in support of the proposed studies.

1.1 Phase II studies (Task Responsibility; Sanofi Pasteur)

Once a single protein candidate [**] has been determined to be immunogenic, able to induce [**] and
displaying an acceptable safety profile a series of Phase II studies will be undertaken. Phase II
studies are carried out in the final target population for immunisation and are aimed at confirming
the immunogenicity observed in Phase I and at determining the final composition of the vaccine
(dose-ranging, and determination of the immunisation schedule). These Phase II studies are an
important part of the regulatory submission and must be powered to
confirm the statistical hypothesis. Accordingly, [**]will be selected for dose-optimisation in
Phase II studies of similar design to the Phase I studies. The [**]

			
	 	 	 
	Schedule 1 Appendix 3
	 	1

 

 

vaccine will be evaluated in descending age groups starting with adults [**] with approximately
[**] subjects to be included. Once this is complete development would continue [**] with
approximately [**] subjects in each age group and [**] again approximately [**] subjects. [**]. It
is anticipated that further proteins [**].

1.2 Phase III studies (Task Responsibility; Sanofi-Pasteur)

Following on from the relatively recent licensure of Meningitis C conjugate vaccines, in the UK and
some additional countries based on a correlate of protection data [**] and recent comments from the
UK Health Protection Agency and Department of Health and US FDA (Atlanta April 2005 – MenB
Correlates of Protection Meeting), it is envisaged that a serogroup B vaccine may potentially be
launched [**]. The health authorities in the UK and some other countries [**] appear to be
particularly favouring this approach. [**] and the data generated could be used for regulatory
submissions for marketing approval in other territories.

If this approach is not acceptable to the regulatory authorities, [**]. It is expected that the
Phase III trial will be run in all age groups that previous studies have demonstrated an
appropriate immune response in [**]. It is also expected that the study

			
	 	 	 
	Schedule 1 Appendix 3
	 	2

 

 

will have to demonstrate vaccine efficacy in all population age groups that the vaccine receives an
indication for. However, once a suitable safety database has been generated, [**]. However, the
Parties recognise that [**].

			
	 	 	 
	Schedule 1 Appendix 3
	 	3

 

 

Schedule 2

Indicative Cost Schedule

As described in Clause 5.3 the Annual Budget for the First Year shall be based on the
following indicative costs related to the resource, capital expenditure equipment and predicted
external costs required to perform the agreed work-plan.

     1. Emergent Resource Requirement

In order to resource the programme adequately, Emergent will need to dedicate the necessary number
of skilled Full Time Equivalents (FTEs) to the project. Whilst it is recognised that the work-plan
may be modified by the SC, the following represents Emergent’s best estimate of the Emergent
resource that will be required to execute the agreed work-plan.

  Year 1

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Function	 	M1	 	M2	 	M3	 	M4	 	M5	 	M6	 	M7	 	M8	 	M9	 	M10	 	M11	 	M12
	Mol Biol
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	Purification
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	Purification
management
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pre-clinical
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	Pre-clinical
management
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	Project Leader
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	Total (FTE)
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 

  Year 2

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Function	 	M13	 	M14	 	M15	 	M16	 	M17	 	M18	 	M19	 	M20	 	M21
	Mol Biol
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Purification
	 	 	[**]	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Purification
management
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pre-clinical
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	 	 	 	 	 	 
	Pre-clinical
management
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	 	 	 	 	 	 
	Project Leader
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	 	 	 	 	 	 
	Total (FTE)
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 	 	 	 	 	 	 	 	 

			
	 	 	 
	Schedule 2
	 	1

 

 

2. Capital Expenditure Equipment

At this point it is anticipated that the following capital expenditure equipment will be required
to meet the projected needs of the project work-plan. The majority of this equipment [**]. The
remaining [**] should be included in the first quarter payment by sanofi pasteur to Emergent as
described in Clause 5.13. Any further capital expenditure required will be discussed and agreed at
the Joint Project Team level and approved as necessary by the Steering Committee. This equipment
remains the property of [**].

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Unit	 	 
	Equipment	 	No. Req.	 	Cost (£)	 	Total Cost (£)
	[**]
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	[**]
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	[**]
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 

3. Predicted External Costs

As described in Clause 2.1 it is anticipated that during the Early Development Phase the majority
of activities will be undertaken by Emergent at sanofi pasteurs’ cost. The major external cost
associated with the project work-plan will be the [**].

At the present time, based on current rates, this is estimated as being approximately [**].

There will also be external costs related to [**]. However, these are not anticipated to be
substantial and will be agreed at the SC or JPT as appropriate ahead of commencing the work.

4. The FTE Costs and Emergent Expenses incurred between 1 January 2006 and the Effective Date

As described in Clause 5.13, on the Effective Date sanofi pasteur shall pay Emergent the FTE Costs
and Emergent Expenses incurred between 1 January 2006 and the Effective Date as listed below;

4.1 FTE Costs

Number of FTE Months

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Jan	 	Feb	 	Mar
	Function	 	06	 	06	 	06
	Mol Biol
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	Purification
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 

			
	 	 	 
	Schedule 2
	 	2

 

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Jan	 	Feb	 	Mar
	Function	 	06	 	06	 	06
	Purification management
	 	 	 	 	 	 	 	 	 	 	 	 
	Pre-clinical
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	Pre-clinical management
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	Project leader
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 
	Total (FTE)
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 

[**] FTE months = [**] FTEs

FTE Cost Calculation

FTE Cost = FTE Rate x Number of FTEs

FTE Cost = £[**] x [**]

FTE Cost = £[**]

FTE Cost = £[**]

4.2 Emergent Expenses

4.2.2 Capital Expenditure Equipment

Capital Expenditure Equipment purchased to date for the project work-plan is as follows. [**].

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Total
	Equipment	 	No.	 	Cost (£)
	[**]
	 	 	[**]	 	 	 	[**]	 
	[**]
	 	 	[**]	 	 	 	[**]	 
	[**]
	 	 	[**]	 	 	 	[**]	 
	Total Costs to date (£)
	 	 	 	 	 	 	[**]	 

Schedule 3

Candidate Antigens

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Candidates	 	Emergent	 	 
	Number	 	NMB No.	 	Designation	 	Function
	[**]
	 	 	[**]	 	 	 	[**]	 	 	 	[**]	 

			
	 	 	 
	Schedule 2
	 	3

 

 

Schedule 4

Meningitis B — Proposed Commercialization Plan

Outline

Executive
Summary

Meningitis
Franchise Overview

Meningococcal
B vaccine — Market Strategy

[**]

[**]

[**]

[**]

[**]

[**]

Product
Strategy

[**]

[**]

[**]

[**]

[**]

[**]

[**]

Disease
& Product Communication

[**]

[**]

[**]

[**]

Market
Forecasts

[**]

 

 

Schedule 5

Emergent Independent Patent Rights

1. Neisseria meningitidis vaccine candidates discovered using STM technology; entitled “Virulence
Genes and Proteins and their use”. (WO01/85772)

	 	 	 	 	 
	Document Type	 	Territory	 	Document Number (Application and Publication)
	PCT
	 	 	 	PCT/GB01/02003
	 
	 	 	 	WO01/85772
	 
	 	 	 	 
	National Filings
	 	EP	 	01925742.7
	 
	 	US	 	10/275026
	 
	 	AU	 	52422/01
	 
	 	 	 	776508
	 
	 	AU/div	 	2004203417
	 
	 	CA	 	2408738
	 
	 	CN	 	01809191.1
	 
	 	CN/div	 	Not Yet Known
	 
	 	CZ	 	PV 2002-3642
	 
	 	HK	 	03108186.4
	 
	 	HU	 	P0302481
	 
	 	JP	 	2001-582371
	 
	 	KR	 	2002-7014876
	 
	 	NO	 	2002-5329
	 
	 	NZ	 	522277
	 
	 	NZ	 	532297
	 
	 	NZ	 	539912
	 
	 	RU	 	2002132891
	 
	 	RU/div	 	2005101623
	 
	 	SG	 	2002068393

     Continued overleaf

	Schedule 5	1

 

 

2. NMB candidates discovered using PhoA technology; entitled “Virulence Genes and Proteins and
their use”. (WO02/016612)

	 	 	 	 	 
	Document Type	 	Territory	 	Document Number (Application and Publication)
	PCT
	 	 	 	PCT/GB01/03759
	 
	 	 	 	WO02/016612
	 
	 	 	 	 
	National Filings
	 	EP	 	01960908.0
	 
	 	US	 	10/362327
	 
	 	AU	 	2001/282299
	 
	 	CA	 	2420261
	 
	 	CN	 	01815395.X
	 
	 	CZ	 	PV 2003495
	 
	 	HK	 	05102145.5
	 
	 	HU	 	P0300813
	 
	 	IN	 	00223/DELNP/200
	 
	 	JP	 	2002-522283
	 
	 	KR	 	2003-7002608
	 
	 	NO	 	2003 0821
	 
	 	NZ	 	524277
	 
	 	NZ/div	 	538864
	 
	 	RU	 	2003107837
	 
	 	SG	 	2003029345

	Schedule 5	2

 

 

Schedule 6

Press Announcement

[To be agreed]

	Schedule 6	1

 

 

Schedule 7

Activity Form

[To be agreed]

	Schedule 7	1

 

 

Schedule 8

The Inclusion Criteria

The goal being the development of a Product that will [**].

Part I:

The Primary Inclusion Criteria for entry into Phase II clinical development

To be selected for a Phase II Study an Antigen [**].

Part II:

Additional Inclusion Criteria [**]

[**], an antigen must [**].

	Schedule 8	1

 

 

Schedule 9

Patent Filing Countries

	 	 	 	 	 	 	 
	[**]

	 	 	 	 	 	 
	 

	 	(*)
	EP	=	 	 
	 

	 	[**]
	 	[**]	 	 
	 

	 	[**]
	 	[**]	 	 
	 

	 	[**]
	 	[**]	 	 
	 

	 	[**]
	 	[**]	 	 
	 

	 	[**]
	 	[**]	 	 
	 

	 	[**]
	 	[**]	 	 
	 

	 	[**]
	 	[**]	 	 
	 

	 	[**]
	 	[**]	 	 
	 

	 	[**]
	 	[**]	 	 
	 

	 	[**]
	 	[**]	 	 
	 

	 	[**]
	 	[**]	 	 
	 

	 	[**]
	 	[**]	 	 
	 

	 	[**]
	 	[**]	 	 
	 

	 	[**]
	 	[**]	 	 
	 

	 	[**]
	 	[**]	 	 
	 

	 	[**]
	 	[**]	 	 

	Schedule 9	1

 

 

Schedule 10

Worked Examples

Net Sales, Adjusted Combination Net Sales and Royalty Burden

Example 1: Where a Unitary Product is sold as a Unitary Product

A Unitary Product for meningitis B is sold in France. The Emergent Patent Rights in France include
a Valid Claim that covers the Product. There are [**] Programme Antigens and [**] Additional
Antigens in the Unitary Product. Net Sales of the Unitary Product in the relevant Quarter are
€[**].

Step 1: Determine the applicable Royalty Rate for the Unitary Product

The royalty applicable under Clause 7.3(a) is [**]% of Net Sales but as the Unitary Product
contains Additional Antigens, Clause 7.4.1(a) applies. [**] of the [**] Antigens in the Unitary
Product are Programme Antigens therefore the adjusted royalty rate is [**]%.

The Royalty Burden comprises (i) the royalty payable to Emergent as set out in the royalty grid,
i.e. [**]% X Net Sales = €[**]; and (ii) the relevant royalties payable to Third Parties on the
sale of the Unitary Product in France in the relevant Quarter (calculated in accordance with the
relevant sanofi pasteur In-Licences) which in this example amount, in aggregate, to €[**].

The total royalty burden is € [**] or [**]% of Net Sales of € [**]. As the royalty is
increased to [**]% if the Royalty Burden is [**]% or less of Net Sales, the applicable royalty will
be increased to [**]%.

Step 2: Calculate the amount payable

The royalty payable to Emergent is [**]% of € [**] = € [**].

Step 3: As the royalty has been increased from that stated in the royalty grid, recalculate the
Royalty Burden to check whether it exceeds [**]%.

The revised Royalty Burden is € [**] plus € [**] = € [**] or [**]%. As the revised
Royalty Burden must not exceed [**]%, the royalty increase is capped at [**]%.

The royalty payable to Emergent is [**]% of € [**] = € [**].

Example 2: Combination Product comprising Menactra and a previously launched Unitary Product.

A Combination Product comprising Menactra and a Unitary Product for meningitis B is launched in
France. The Emergent Patent Rights in France include a Valid Claim that covers the Product. There
[**] Programme Antigen and [**] Additional Antigens in the Unitary Product. Net Sales of the Combination Product (before calculation of

	Schedule 10	1

 

 

Adjusted
Combination Net Sales) in the relevant Quarter are €[**]. The highest official list price of
the Combination Product (C) is €[**].

Step 1: Calculate Adjusted Combination Net Sales using the formula A/(A+B) X Net Sales of the
Combination Product

A is the highest official list price of the Unitary Product in France = €[**]
B is the highest list price of Menactra in France = €[**]
A/(A+B) = [**]

Adjusted Combination Net Sales = [**] X [**]

= € [**]

Step 2: Establish the applicable Royalty Rate for the Unitary Product within the Combination
Product

The royalty applicable under Clause 7.3(a) is [**]% of Adjusted Combination Net Sales but as the
Unitary Product within the Combination Product contains Additional Antigens, Clause 7.4.1(a)
applies. [**] of the [**] Antigens in the Unitary Product [**] Programme Antigens therefore the
adjusted royalty rate is [**]%

The Royalty Burden comprises (i) the royalty payable to Emergent as set out in the royalty grid,
i.e. [**]% X Adjusted Combination Net Sales = €[**]; and (ii) the relevant royalties payable to
Third Parties on the sale of the Combination Product in France in the relevant Quarter (calculated
in accordance with the relevant sanofi pasteur In-Licences) which in this example amount, in
aggregate, to €[**].

The total Royalty Burden is € [**] or [**]% of Adjusted Combination Net Sales of €[**]. As a
percentage of Adjusted Combination Net Sales, the Royalty Burden is more than [**]% of Adjusted
Combination Net Sales, therefore the royalty increase to [**]% does not apply and the applicable
royalty is [**]%.

The royalty payable to Emergent pursuant to this provision is therefore [**]% of Adjusted
Combination Net Sales (€[**]) or €[**].

Step 3: Establish whether the minimum royalty applicable to Combination Products applies

(i) Apply the formula: [**]% X the royalty rate applicable to the Unitary Product X (A/C) X Net
Sales, which becomes

     [**]% X [**]% X [**] X €[**] = €[**]

(ii) Apply the formula: [**]% X Net Sales, which becomes

     [**]% X €[**] = €[**]

The royalty payable pursuant to both protection formulas is less than the royalty payable pursuant
to Clause 7.3(a) (as adjusted pursuant to Clause 7.4.1) (as

	Schedule 10	2

 

 

calculated as set out in Step 2 above) and therefore the minimum royalty provisions do not apply

The royalty payable to Emergent is therefore [**]% of €[**] = €[**]

Example 3: Combination Product comprising Menactra and a Unitary Product that has not been
launched where a minimum royalty applies. 

A Combination Product comprising Menactra and a Unitary Product for meningitis B is launched in
France. The Emergent Patent Rights in France include a Valid Claim that covers the Product. There
[**] Programme Antigen and [**] Additional Antigens in the Unitary Product, but it has not been
launched in France. Net Sales of the Combination Product (before calculation of Adjusted
Combination Net Sales) in the relevant Quarter are €[**]. The highest official list price of
the Combination Product (C) is €[**].

Step 1: Calculate Adjusted Combination Net Sales using the formula A/(A+B) X Net Sales of the
Combination Product. The Unitary Product has not been launched in France but there is a
competitive product for the same indication. The highest official list price of the competitive
product in France is €[**]. B is the highest list price of Menactra in France = €[**].
Therefore as in Example 2, A/(A+B) = [**] and Adjusted Combination Net Sales are €[**].

Step 2: Establish the applicable Royalty Rate for the Unitary Product within the Combination
Product. As in Example 2, the relevant royalty is [**]% and the royalty payable to Emergent
pursuant to this provision is [**]% of Adjusted Combination Net Sales (€[**]) or €[**].

Step 3: Establish whether the minimum royalty applicable to Combination Products applies:

(i) Apply the formula: [**]% X the royalty rate applicable to the Unitary Product X (A/C) X Net
Sales, which becomes

     [**]% X [**]% X [**] X €[**] = € [**]

(ii) Apply the formula: [**]% X Net Sales, which becomes

     [**]% X €[**] = €[**]

The royalty payable pursuant to the first protection formula is higher than the royalty payable
pursuant to Clause 7.3(a) (as adjusted pursuant to Clause 7.4.1) (see Step 2 above) and therefore
the minimum royalty provision prevails and the royalty payable is € [**].

	Schedule 10	3

 

 

Schedule 11

Terminated Antigens

	 	 	 	 	 	 	 
	 	 	Candidates	 	Emergent	 	 
	Number	 	NMB No.	 	Designation	 	Function
	[**]
	 	[**]
	 	[**]
	 	[**]

	Schedule 11	1

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