Document:

Interim Agreement, dated January 21, 2005

 EXHIBIT 10.51 
  

					
	

	 	 	 	CONFIDENTIAL
			
	 	 	 	 	Avecia Limited
			
	 	 	 	 	PO Box 2 Belasis Avenue
	 	 	 	 	Billingham Cleveland TS23 1YN
			
	 	 	 	 	Tel: +44 (0)1642 364499
	 	 	 	 	Fax: +44 (0)1642 364463
	 	 	 	 	www.avecia.com

  
 Luis
Pena 
 Vice President - Product Development 
 Nuvelo Inc. 
 675 Almanor Avenue 
 Sunnyvale 
 CA 94085 
 USA 
  

									
	 Our Ref:
	 	Direct Line:	 	Direct Fax:	 	E-mail:	 	Date:
					
	 RJC/SCT
	 	+44 1642 364001	 	+44 1642 364463	 	Stephen.taylor@avecia.com	 	 

  
 Dear Sirs 
  
 Interim Agreement: Alfimeprase Project 
  
 Background 
  

	1.	Nuvelo Inc. (“Nuvelo”) wishes Avecia Limited (“Avecia”) to carry out a range of activities in relation to Alfimeprase (“the API”)
which are referred to in this Interim Agreement as “the Project”, the details of which are more fully set out in the proposal attached hereto as Exhibit A (“the Proposal”), the terms of which are incorporated
into this Interim Agreement. 

  

	2.	The parties are in negotiation for a definitive agreement anticipated to cover the activities under the Project, as well as Avecia’s supply of commercial quantities of the API
during the initial 1 year after Nuvelo receives regulatory approval in the United States for the API (“the Definitive Agreement”). It is recognised however that, in order to meet the desired overall timescale for the Project,
it is necessary for the Project to be commenced prior to execution of the Definitive Agreement. This Interim Agreement therefore sets out the interim terms and conditions on which the following portions of the laboratory program set out in section 2
of the Proposal, consisting of (i) Assessment and Planning, (ii) Transfer of process and assays, (iii) purchase of capital equipment set forth in Exhibit B, [and] (iv) Replicate 15L fermentation and purification runs[, and (v) GMP consultancy
preparatory to GMP manufacture (collectively “the Initial Work”), will be carried out prior to execution of the Definitive Agreement. 

  
 Commencement and Conduct of the Initial Work 
  

	3.	Following signature of this Interim Agreement, Avecia shall commence the Initial Work in accordance with the terms and conditions of this Interim Agreement and Section 2 of the
Proposal. In order for Avecia to carry out the Initial Work, Nuvelo shall carry out communication of the existing process for production of the API and associated data and intellectual property to Avecia necessary for the Initial Work in accordance
with the terms and conditions of this Interim Agreement and Section 2 of the Proposal. 

  

 - 1 - 

	4.	Avecia shall carry out the Interim Work in accordance with the terms and conditions of this Interim Agreement and the Proposal with reasonable skill and care and no less than the
level of skill and care to be reasonably expected of a professional provider of such services. Avecia also shall perform the Initial Work in compliance with all relevant professional standards and all applicable supranational, national or local
laws, rules and regulations, including without limitation: (i) the United States Federal Food, Drug and Cosmetic Act, the regulations promulgated pursuant thereto, any non-U.S. equivalents thereof, and any successor laws, rules or regulations
thereto; and (ii) the Rules and Guidance for Pharmaceutical Manufacturers and Distributors (UK) 2002 Annex 18 and Good Manufacturing Practices for Active Pharmaceutical Ingredients (ICHQ7A) as incorporated in the Federal Register Vol. 66 No. 186 in
the USA. 

  
 Consideration 
  

	5.	Nuvelo shall pay to Avecia the following amounts at the following times: 

  

					
	 Amount (£)

	 	 Deliverables

	 	 Payment Event

	i) 105,000 in consideration for Avecia carrying out technical consultancy in relation to assessment and planning.	 	Commitment to secure staff to carry out project.	 	On signature of this Interim Agreement.
			
	ii) 105,000 in consideration for Avecia carrying out technical consultancy in relation to transfer of process and assays.	 	Method transfer reports, gap analysis, action plan, process flow diagram, process description and time line.	 	Upon completion of transfer of process and assays.
			
	iii) 50,000 in consideration for Avecia carrying out technical consultancy preparatory to GMP manufacture.	 	Commitment to secure manufacturing facility and investigate purchasing equipment.	 	On signature of this Interim Agreement.
			
	iv) 109,000 in consideration for Avecia carrying out technical consultancy in relation to the 15L fermentation and purification runs.	 	Fermentation, purification and analytical comparability reports.	 	On completion of the replicate 15L fermentation and purification runs.
			
	v) 300,000 in consideration for Avecia carrying out technical consultancy preparatory to GMP manufacture.	 	Weekly meetings updating on status of GMP preparation. Project plan with timings for centrifuge trials and GMP development batches	 	On 28th February 2005.

  

	5.1	Payments to be made in accordance with this Section 5 shall be made in United States dollars. The currency exchange rate for such payments shall be calculated based upon the
exchange rate quoted in the Wall Street Journal for the purchase of pounds using United States dollars on the calendar date the payment is due in accordance with this Section 5, or if no calendar date is stated, upon the date after the applicable
payment is triggered in accordance with Section 5, that Nuvelo receives an invoice for the applicable payment. For any payment due for which no calendar date for payment is set forth above in this Section 5, such payment is due within 10 business
days after Nuvelo’s receipt of the invoice for such payment. 

  

 - 2 - 

	6.	Any payment under this Interim Agreement is stated exclusive of UK VAT. It is the understanding of both parties that the technical consultancy services being provided under this
agreement are outside the scope of UK VAT. However in the unlikely event that UK VAT does become payable, this shall be for the account of Nuvelo and Avecia will give assistance to Nuvelo to seek recovery of such tax paid from the UK HM Customs and
Excise. 

  
 Purchase of Equipment 
  

	7.	In order for Avecia to provide technical consultancy services work under this Interim Agreement, it will be necessary for certain items of equipment (“the
Equipment”) to be purchased by Avecia. Avecia will be authorised to proceed with the relevant services for which the Equipment is required on the following terms: 

  

	 	7.1	Avecia shall obtain, from an independent third party, at least 2 quotations for each item of Equipment and send a copy of the quotations by fax or email to Nuvelo and Nuvelo shall
inform Avecia within 5 business days of receipt whether it authorises Avecia to proceed with the services for which the item of Equipment is required. In the absence of such approval, Avecia shall not proceed with the relevant services.

  

	 	7.2	If Nuvelo gives its approval to the relevant quotation, Avecia shall be considered authorised to proceed with the relevant services and shall purchase the item of Equipment for such
purpose. Any Equipment purchased by Avecia shall be dedicated to the Project, and shall not be used for any other use or purpose. Avecia shall keep the Equipment in good working order. The purchase price of the item of Equipment per the approved
quotation shall thereupon form part of the consideration for the provision of the technical consultancy services by Avecia and Avecia shall invoice Nuvelo for: (i) such amount; and (ii) a sum equivalent to 10% of the cost of the Equipment as a
handling fee (the “Handling Fee”). Nuvelo shall pay such invoices within ten (10) days of receipt. 

  

	 	7.3	Following completion or termination of the Initial Work or Project, whichever occurs first, at any time within 12 months following such completion or termination, Nuvelo shall be
entitled to purchase all or any of the Equipment from Avecia for £1.00 in its then current condition, subject to payment of any outstanding fees by Nuvelo to Avecia in respect of work carried out under this Interim Agreement in accordance with
the terms and conditions of this Interim Agreement and the Proposal. 

  

	 	7.4	Nuvelo shall provide to Avecia reasonable prior written notice of its wish to purchase the Equipment so as to minimize any unplanned facility downtime and Nuvelo shall be
responsible for all commercially reasonable removal costs and expenses. If the removal is performed by Nuvelo personnel, Nuvelo agrees to pay for the making good of any damage caused to Avecia’s facility as a result of such removal. If the
removal is performed by Avecia personnel, Avecia agrees to pay for the making good of any damage caused to the Equipment being removed as a result of such removal. 

  
 Confidentiality and Intellectual Property 
  

	8.	The provisions of the confidentiality agreement (“the CDA”) entered into, between the parties and dated 23rd September 2004 shall remain in full force and effect, except to the extent modified by the terms and conditions of this Interim Agreement. The obligations of
confidentiality and non disclosure set forth in the CDA will continue for 7 years after the expiration or termination of this Interim Agreement, and the CDA shall not terminate or expire before the termination of this Interim Agreement. Avecia may
use the Confidential Information solely for the purpose of the performance of the Initial Work. The CDA shall, with effect from the date hereof, be deemed to be extended to cover disclosures of information by either party pursuant to and subject to
this Interim Agreement. 

  

 - 3 - 

	9.	Nothing in this Interim Agreement shall affect the ownership by either party of its Background IP or imply any licence to a party’s Background IP unless granted expressly.
“Background IP” means any intellectual property owned by or in the possession of a party (and to which that party has the necessary rights): (a) at the date of this Interim Agreement; or (b) after the date of this Interim Agreement and
either (i) acquired independently of the Project or (ii) developed independently of the Project by any employee of that party without use or reference to any of the Confidential Information of the other party (as defined in the CDA, as amended by
this Interim Agreement) disclosed by the other party. 

  

	10.	Nuvelo shall own any and all intellectual property directly resulting from or arising out of the performance of the Initial Work (“New IP”), and Avecia shall assign
all its rights in any such New IP to Nuvelo. Avecia represents and warrants that its employees and contractors are required to assign any inventions and discoveries resulting from or arising out of the performance of the Initial Work to Avecia, to
enable Avecia to make the assignments set forth in this Section 10. Nuvelo hereby grants to Avecia a royalty-free, non-exclusive, world-wide licence, with power to sub-license, under New IP for use other than to make, have made, use, sell, offer for
sale, import, keep and otherwise deal in the API. 

  
 Licenses
and Warranties 
  

	11.	Nuvelo shall grant to Avecia a royalty free, non-exclusive licence to use any of its Background IP and the New IP necessary for the performance of the Initial Work for the purposes
of carrying out the Initial Work, and for no other use or purpose (save, in respect of the New IP, as permitted under Section 10 of this Interim Agreement). 

  

	12.	Except as otherwise disclosed by Nuvelo to Avecia, Nuvelo represents and warrants that, to its knowledge as of the effective date of this Interim Agreement, Avecia’s
application of Nuvelo’s Background IP or information provided to Avecia by Nuvelo for use in the performance of the Initial Work will not infringe the intellectual property of any third party. 

  

	13.	Avecia represents and warrants that, to its knowledge as of the effective date of this Interim Agreement, Avecia’s Background IP, to be used by Avecia in the performance of the
Initial Work will not infringe the intellectual property of any third party. 

  

	14.	Avecia represents and warrants that it has not been debarred under Section 306 of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §335a(a) or (b). In the event that Avecia
becomes debarred, Avecia shall notify Nuvelo immediately. 

  
 Indemnification and Limitation of Liability 
  

	15.	Except as provided below in this Section 15, Nuvelo shall indemnify Avecia from and against any loss, claim, suit, liability, damages or expense, of whatsoever kind or nature
(“Loss”), resulting from or arising out of: (i) actual or suspected infringement of the intellectual property of any third party arising from Avecia’s application of Nuvelo’s Background IP or information provided to Avecia
by Nuvelo, in the performance of the Initial Work; (ii) Nuvelo’s use of any results of the Initial Work performed by Avecia hereunder (including API or other materials manufactured); or (iii) the negligence, willful misconduct or breach of any
applicable laws or regulations by Nuvelo or its affiliates. Nuvelo shall have no obligation to indemnify Avecia for any Loss to the extent resulting from or arising out of: (a) the actual or suspected infringement of the intellectual property of any
third party arising from Avecia’s application of Avecia’s Background IP or information not provided to Avecia by Nuvelo, in the performance of the Initial Work; (b) the negligence or willful misconduct of Avecia or any of its affiliates;
(c) any breach of this Interim Agreement by Avecia or any of its affiliates; (d) any failure by Avecia or any of its affiliates to comply with applicable laws or regulations. 

  

 - 4 - 

	16.	Except as provided below in this Section 16, Avecia shall indemnify Nuvelo from and against any Loss resulting from or arising out of: (i) actual or suspected infringement of the
intellectual property of any third party arising from Avecia’s application of Avecia’s Background IP in the performance of the Initial Work; (ii) Nuvelo’s use of any results of the Initial Work performed by Avecia hereunder (including
API or other materials manufactured) to the extent Nuvelo’s use results in the actual or suspected infringement of the intellectual property of any third party arising from Avecia’s application of Avecia’s Background IP, in the
performance of the Initial Work; or (iii) the negligence, willful misconduct or breach of any applicable laws or regulations by Avecia or its affiliates. Avecia shall have no obligation to indemnify Nuvelo for any Loss to the extent resulting from
or arising out of: (a) the negligence or willful misconduct of Nuvelo or any of its affiliates; (b) any breach of this Interim Agreement by Nuvelo or any of its affiliates; (c) any failure by Nuvelo or any of its affiliates to comply with applicable
laws or regulations. 

  

	17.	EXCEPT WITH RESPECT TO INDEMNITY UNDER SECTIONS 15 and 16 ABOVE OR ANY BREACH OF CONFIDENTIALITY IN ACCORDANCE WITH SECTION 8, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY
SPECIAL, INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES ARISING IN ANY WAY OUT OF OR RELATING TO THIS INTERIM AGREEMENT, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY. THIS LIMITATION WILL APPLY EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. 

  

	18.	NEITHER PARTY’S LIABILITY UNDER THIS INTERIM AGREEMENT WILL EXCEED THE TOTAL AMOUNT THAT WOULD BE DUE TO AVECIA UNDER THIS INTERIM AGREEMENT FOR THE INITIAL WORK.

  
 Duration and Termination/Cancellation 
  

	19.	The term of this Interim Agreement shall be from the date of signature by both parties until the first to occur of entry into the Definitive Agreement, completion of the Initial
Work or earlier termination. The parties may agree to extend the duration and scope of the work carried out under this Interim Agreement by written agreement. Sections 8, 9, 10, 15, 16, 17, 18, 19, 21, 22, 23, 25 and 26 survive the termination or
expiration of this Interim Agreement for the period set forth therein, or if no period is specified, perpetually or the maximum permitted by applicable law. 

  

	20.	Nuvelo may terminate this Interim Agreement at any time with or without cause for its convenience, effective immediately upon written notice to Avecia. Avecia may terminate this
Interim Agreement immediately upon written notice to Nuvelo if Nuvelo fails to pay an amount owed to Avecia under this Interim Agreement within 5 days of when it is due. 

  

	21.	Upon termination of this Interim Agreement, other than for termination by Nuvelo in connection with a breach by Avecia, Nuvelo will pay Avecia: 

  

	 	21.1 	all sums due and payable up to the date of termination but not yet paid, but excluding any payments (other than the Handling Fee) due for Equipment: (i) that can be returned; or
(ii) the ordering of which can be cancelled; 

  

	 	21.2 	all reasonable costs already incurred by Avecia at the date of termination in accordance with the terms and conditions of this Interim Agreement and the Proposal and uncancellable
expenses incurred by Avecia after termination which could not reasonably be avoided after a reasonable attempt by Avecia to mitigate such costs, including cancellation charges payable by Avecia to the seller of Equipment in respect of Equipment (i)
that has been returned to the seller, or (ii) the order of which has been cancelled; and 

  

	 	21.3 	 if and only if the Agreement is terminated by Nuvelo other than for breach by Avecia, in consideration for technical consultancy services performed up to date of
termination and 

  

 - 5 - 

	 	 
in winding down and cancelling the Project, the Cancellation Fee set out in paragraph 14 below. 

  

	22.	The Cancellation Fee shall be a proportion of the total £2,951,000 fee for technical consultancy associated with GMP manufacture of development batches referred to in more
detail in Section 3.2 of the Proposal (“the GMP Fee”), less any sums paid by Nuvelo in consideration for Avecia carrying out technical consultancy preparatory to GMP manufacture already received under this Interim Agreement at the
date on which notice is given. The proportion shall be dependent on the date on which notice of termination is given in relation to the anticipated date for commencement of the GMP manufacturing stage. At the date hereof, the anticipated
commencement date of GMP manufacture is 1st October 2005. In the event that the parties agree to change this date,
the table below shall be amended accordingly. 

  

	 	22.1	The Cancellation Fee shall be calculated as follows: 

  

					
	 If terminated between
 dates (2005)

	  	 Proportion of the GMP
 Fee (%)

	  	Amount (£)

	 1 Feb to 28 Feb
	  	10	  	295,100
	 1 Mar to 30 Mar
	  	20	  	590,200
	 1 Apr to 30 Apr
	  	30	  	885,300

  

	 	22.2 	Avecia shall make commercially reasonable efforts to raise revenue by utilising the production facility during the period during which the manufacturing stage was intended to take
place but for early termination. Avecia shall refund to Nuvelo a sum equivalent to the revenue raised as a result of such alternative use up to a maximum of 80% of the Cancellation Fee paid. 

  

	 	22.3 	Where the Cancellation Fee is less than the amount already paid to Avecia by Nuvelo under this Interim Agreement in consideration for technical consultancy preparatory to GMP
manufacture, Avecia shall pay to Nuvelo the difference between the applicable Cancellation Fee and the amount already paid in consideration for technical consultancy preparatory to GMP manufacture. 

  

	23.	If Nuvelo terminates for Avecia’s unremedied breach or insolvency, Avecia shall refund to Nuvelo any monies paid to Avecia, less amounts paid for consultancy work done by
Avecia in accordance with the terms and conditions of this Interim Agreement and the Proposal and not affected by the breach. In the event of a material error by Avecia in the performance of any portion of the Initial Work, Nuvelo is entitled to
request Avecia to: (i) repeat the applicable portion at Avecia’s own cost or (ii) reimburse Nuvelo for the price for that particular portion of the Initial Work. The preceding provision does not limit Nuvelo’s rights under any provision of
this Interim Agreement. 

  
 Definitive Agreement 

 

	24.	Avecia and Nuvelo agree to commence negotiations in good faith for a Definitive Agreement, such Definitive Agreement to contain, amongst other things, the timing of the fees payable
during the remainder of the Project, a detailed description of the work to be undertaken during the Project, including detailed stage start/end trigger points, together with provisions relating to termination, liability, compliance with applicable
law and regulations, confidentiality, quality assurance, indemnity and intellectual property ownership and access. 

  
 Governing Law & Miscellaneous 
  

	25.	 This Interim Agreement is, and is intended by the parties to be, legally binding. This Interim Agreement is governed by, and should be construed in accordance with
the laws of the U.S. 

  

 - 6 - 

	 	 
State of Delaware and the parties expressly agree to submit to the exclusive jurisdiction and venue of the Courts of Delaware. 

 

	26.	A waiver of any provision or right under this Interim Agreement will be in writing and will not constitute a waiver of any subsequent similar or dissimilar occurrence. If any
provision of this Interim Agreement is held to be illegal, invalid, or unenforceable, the applicable provision is severed from this Interim Agreement and the remaining provisions remain in full force and effect. 

  

	27.	Avecia shall not subcontract any work under this Interim Agreement without Nuvelo’s prior written consent. 

  
 The parties to this Interim Agreement, by the signature of their duly authorized
representatives below, have executed this Interim Agreement as of the last date set forth below. 
  

			
	 For Avecia Limited

		
	 Signature:
	 	

	 SC Taylor (Dr)

	 General Manager, Biologics Business

			
		
	 Date:
	 	 21 January 2005

	
	 For Nuvelo, Inc.

			
		
	 Signature:
	 	 /s/ Michael D. Levy

		
	 Name:
	 	 Michael Levy

		
	 Position:
	 	 SR VP R&D

		
	 Date:
	 	 1.20.2005

  

 7 

			
	 Confidential
	  	Subject to contract

  
 

 
  
 PROPOSAL B2422.01 For Nuvelo Inc

  
 Program to carry out technology transfer of the Alfimeprase

 process, Process Characterization and Validation of 
 in-process and bulk API assays by Avecia and manufacture of 
 three GMP development batches and five
conformance 
 batches of Alfimeprase in Avecia’s ABC 5000 facility. 
  
 Prepared by: 
  
 Avecia Biotechnology 
  
 22 November 2004 
  

							
	Avecia Biologics	  	Proposal B2422.01	  	ALFIMEPRASE validation program	  	Page 1 of 9

	1.	INTRODUCTION 

  
 This proposal incorporates information from discussions held at Amgen over 2003/2004 and the recent meeting at with the Nuvelo team on 17 November 2004. 
  
 The proposal includes the activities listed below. It is unclear at this point what the exact scope of the program will need to be since
data from Amgen has not been evaluated and assessed. However it is Avecia’s belief that most of the process characterisation and all the assay validation remains to be done. 
  

	 	•	 	Data assessment and planning activity 

  

	 	•	 	Transfer to Avecia of process and assays 

  

	 	•	 	Validation of in-process and bulk API assays by Avecia, 24 assays in total 

  

	 	•	 	Replicate 15L fermentation and purification runs to establish the process at Avecia 

  

	 	•	 	Laboratory scale process characterisation (content to be defined) 

  

	 	•	 	Two x 3000L fermentation batches to scale up the process and define centrifugation conditions 

  

	 	•	 	Purification of product (non-GMP) from the 3000L batch supernatant but at 15L scale 

  

	 	•	 	Three full scale GMP development batches – product to be supplied from one to two of them for clinical purposes. 

  

	 	•	 	Process confirmation using process intermediates from Engineering runs 

  

	 	•	 	Five conformance batches 

  
 This proposal is subject to agreement of formal contractual terms.  
  
 QUALITY ASSURANCE 
  
 Avecia operates its
Quality System according to the Quality Policy as described in its Quality Manual. Avecia manufactures non-sterile bulk biologic Active Pharmaceutical Ingredients (API) in compliance with the Rules and Guidance for Pharmaceutical Manufacturers and
Distributors (UK) 2002 Annex 18 and Good Manufacturing Practices for Active Pharmaceutical Ingredients (ICHQ7A) as incorporated in the Federal Register Vol 66 No 186 in the USA. 
  
 Avecia and Nuvelo will jointly approve a Quality Agreement which defines the roles and responsibilities and interaction of Avecia and Nuvelo
when dealing with quality related issues during the manufacture of the API. The QA agreement shall be incorporated with, constitute a part of and be read in conjunction with the Contract between the two companies. 
  
 The content of the Quality Agreement will include: 
  

	 	•	 	Supplier management 

  

	 	•	 	Change control 

  

	 	•	 	Document management 

  

	 	•	 	Nonconformance system 

  

	 	•	 	Training 

  

	 	•	 	Internal audits 

  

							
	Avecia Biologics	  	Proposal B2422.01	  	ALFIMEPRASE validation program	  	Page 2 of 9

 This list is illustrative only 
  

	2.	WORK PROGRAM 

  
 Assessment and Planning. Data from Amgen will be reviewed and evaluated and the scope and extent of the work required to complete the laboratory process characterisation package will be determined. This
activity should be completed as soon as possible and will lead to definition of a detailed work program. 
  
 Transfer of process and assays. The process and assays will be transferred to and operated by Avecia. 
  
 Validation of in process and bulk API assays. Avecia has a list of assays that were to be used by Avecia and Amgen for in process and API analysis. The list is
attached as Appendix 1. Following assessment of the Amgen data and in discussion with Nuvelo a final list of assays will be derived. A validation program can then be defined. In arriving at the costings below an assumption has been that all the
current assays will be used and will need to be validated.  
  
 The features
typically included in a validation by Avecia are given below. 
  
 specificity

 precision (repeatability) 
 precision
(intermediate) 
 linearity 
 range 

accuracy 
 limit of quantitation 
 limit of detection 
 robustness 
 system suitability test 
  
 Replicate 15L fermentation and purification runs. It is our preference to carry out a number of replicate runs at 15L scale to establish data on the robustness and reproducibility of the process. These data
will also be valuable in establishing a baseline for the process characterisation work. 
  
 It was felt that the effort and resource that would need to be devoted to 100L runs of the process would not be cost effective for the following reasons. 
  

	 	•	 	Scale up to 100L is only a small step towards 3000L and is unlikely to indicate performance at that scale. 

  

	 	•	 	It has been Avecia experience that 15L, 100L and 1000L runs have all given closely similar results. 

  

	 	•	 	Nuvelo already have data concerning performance of the process at 300L and Avecia 15L data can be compared with this and other laboratory scale fermentations carried out at Amgen.

  
 In addition supernatant from the 3000L fermentation carried out
to establish centrifuge conditions will be processed through the purification process at 15L scale to gain experience with plant produced material. 
  

							
	Avecia Biologics	  	Proposal B2422.01	  	ALFIMEPRASE validation program	  	Page 3 of 9

 Fermentation scale up and Centrifuge trials. This was increasing felt to be a prudent step to take since it would;

  

	 	•	 	provide the first data on fermentation performance at 3000L scale 

  

	 	•	 	provide early definition of centrifuge operating conditions which can only be determined empirically 

  

	 	•	 	give time for batch record modification and writing 

  

	 	•	 	allow greater chance that the first engineering batch would make useful product and de-risk that stage of the program 

  
 Laboratory scale purification of Alfimeprase from the supernatant produced will be carried
out as mentioned above to confirm that product from the larger scale fermentation was comparable to that from laboratory fermentations and previously manufactured material. 
  
 Process characterisation. This work will be carried out concurrently with assay validation, the 3000L trial fermentation and GMP
preparation. Analytical methods used for the process characterisation will be considered qualified. The program content will be agreed with Nuvelo once the Amgen data has been acquired and progress has been assessed. A process characterisation plan
will be established and will be documented. 
  
 The purpose of the process
characterization is to establish the operating parameters for the alfimeprase Process B. The studies will include fermentation operating parameters, harvest operating parameters, operation parameters for each chromatographic, dead end filtration and
untrafiltration and diafiltration step. 
  
 NOTE No definite figure has been
included in the costings since the extent of the program required is not known. 
  
 Validation Documentation 
  
 Documentation to support successful
validation will be produced according to the Table below. Ahead of the Validation Campaign further changes may be made by agreement of Nuvelo and Avecia Quality Groups and the associated payment amended accordingly. 
  

							
	 Document

	  	 Purpose

	  	 Accountable Function

	  	 Approving Functions
 (Final formal release by QA)

	Validation Master Plan	  	Defines overview Validation strategy for Product	  	QA	  	QA,QC, M, R&D
				
	Validation Sub Plans	  	Defines specific Validation plans for Project relating to Equipment Qualification Cleaning Validation Analytical Validation Process Validation Electronic systems Training	  	Various	  	QA,QC, M, R&D
				
	Process Validation Sub Plan	  	Defines specific activities to be undertaken in Process Validation programme And links these to relevant technical reports and the Development Report	  	R&D	  	QA,QC, M, R&D

  

							
	Avecia Biologics	  	Proposal B2422.01	  	ALFIMEPRASE validation program	  	Page 4 of 9

							
	Process Validation Protocol	  	 Document listing: Runs to be undertaken in the manufacturing campaign, the expected specification of material produced (and the acceptances ranges
for this). Critical process control parameters and acceptance ranges.
  
 The
results derived from the process validation campaign shall be recorded in this document
	  	R&D	  	QA,QC, M, R&D
				
	Process Validation Sub Plan Report	  	Report detailing and analysing the outcome and data derived from the process validation campaign	  	 R&D
 Note Please. QA will make very strong input into
this document
	  	QA,QC, M, R&D
				
	Validation Summary Report	  	Document Summarising and reviewing output from Validation Programme and formally closing it.	  	QA	  	QA,QC, M, R&D

  
 Confirmation of Small Scale Process
Characterisation 
  
 Intermediate samples will be taken at appropriate scale
to allow for the confirmation of Process B at the 15 L scale. From DOE experiments performed during the initial process characterisation runs will be used to determine process extremes or failure points. The process extremes or failure points will
be tested using the collected intermediates at small scale. The selection of the steps and ranges to be tested will be determined by risk analysis. 
  
 GMP development batches and conformance batches. Two to three overlapping GMP development batches are scheduled followed by an extended gap. Avecia and Nuvelo will
continue to discuss the optimum period for this hold such that it will allow the data required for successful operation of the conformance batches to be obtained, final GMP documentation to be put in place and Avecia to make practical use of the
time with another process. 
  
 The third GMP Development batch will be carried out
immediately prior to the conformance batches. Since a long gap is planned after the end of GMP development batches it was felt more appropriate to and run one of the batches before the validation campaign rather than start up the process and
immediately run a validation batch. 
  
 Five overlapping conformance batches will
be run 
  

							
	Avecia Biologics	  	Proposal B2422.01	  	ALFIMEPRASE validation program	  	Page 5 of 9

	3.	COST SUMMARY 

  

	3.1.	Laboratory Program 

  

			
	 Activity

	  	 Price
£000’s

	 Data acquisition and assessment
	  	105
	 Process transfer into Avecia
	  	105
	 Replicate 15L runs
	  	109
	 Process characterisation Fermentation and downstream process
	  	Up to 1000 depending on the work program required
	 Assay validation
	  	1067
	 Total
	  	1492 (+ process characterisation)

  

	3.2.	Manufacturing 

  
 The freeze step at the DCCB stage has been retained since this allows fermenter purity checks to be carried out and results developed before loading the broth onto the first column. 
  

			
	 Activity

	  	Price
£000s

	Process transfer and preparation for large scale manufacture	  	260
	Laboratory based cleaning studies note 1	  	10
	2 x 3000L batches for centrifuge trials including small scale purification and PD support	  	1114
	2 x GMP Development batches includes blank run and PD support	  	2951
	Review period note 2	  	200
	1 X GMP Development batch 5 x Conformance batches Overlapping batches, includes blank run and PD support	  	5397
	Validation Master Plan/Protocols	  	50
	Execution of validation plan including validation reports note 3	  	TBA
	PAI Preparation and Inspection Quality and Regulatory Support FTE rate	  	£11K per
month

  
 NOTES 
  

	1.	Laboratory based cleaning studies will be required to establish the “cleanability” of Alfimeprase in relation to the protein used in cleaning validation studies. This work
is costed at £10K. Further cleaning validation at a cost of £10K per item may be required if Alfimeprase proves more difficult to clean than this protein. 

  

							
	Avecia Biologics	  	Proposal B2422.01	  	ALFIMEPRASE validation program	  	Page 6 of 9

	2.	The extended review period following the GMP Development batches will be a period of intense activity when product is analysed to ensure that the process is delivering product with
the required specification, batch record logistics are reviewed to ensure smooth operation, any equipment modifications are implemented and documentation changes carried out. 

  

	3.	No costs have been attributed to this activity at this point since the content of the validation plan has not been defined. The Validation Master Plan will be drafted by Avecia and
agreed with Nuvelo. Validation reports will be written at the end of the conformance batch campaign. 

  
 Compendial testing of raw materials can be carried out at a cost of £500 to £1000 per raw material depending on the tests required. 
  
 Raw materials, consumables, chromatography resins and UF membranes are not included in the
above costs for the ABC5000 campaigns and will be charged on a pass through basis plus 10% for administration and handling. 
  
 In addition pre-agreed expenses associated with visits of Avecia technical personnel to Amgen or Nuvelo facilities will be charged back to Nuvelo 
  

	3.3	Capital 

  
 Work with Amgen on process fit established that a number of items of process specific equipment would be required to operate the Alfimeprase process. In addition Avecia would need to make certain plant modifications
and provide items of a generic nature. 
  

	3.3.1 	Process specific equipment. 

  

			
	 Equipment

	  	Estimated
cost £000s

	 Lenticular depth filtration skid
	  	200
	 Delipid filter skid
	  	20
	 Columns (2 x 900mm)
	  	200
	 UF cassette holder
	  	25
	 Total
	  	445

  
 Qualification costs will be in
addition to this sum. Amgen were investigating whether the equipment can be purchased at a lower price by them in the US and shipped to Avecia. The status of these enquiries is not known. 
  

	3.3.2 	Generic modifications and equipment 

  
 Modification to fermenter control software 
 Trace heating on glucose line 
 Ammonia feed tank 
 Various tankage 
 0.2u filtration skid 
 Small UF rib (Sartorious Beta) 
  

							
	Avecia Biologics	  	Proposal B2422.01	  	ALFIMEPRASE validation program	  	Page 7 of 9

	4.	ESTIMATED OVERALL TIMELINES 

  
 [ * ] 
  
 NOTE 
  
 The review period in Nov-05 to
Jan 06 is illustrative only. Avecia and Nuvelo will continue to discuss the optimum period for this gap such that it will allow the data required for successful operation of the conformance batches to be obtained and Avecia to make practical use of
the time. 
  

	5.	DRAFT MANUFACTURING SCHEDULE 

  
 [ * ] 
  
 

 
  

	[ * ]	= Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities and
Exchange Act of 1934, as amended. 

  

 APPENDIX 1. ASSAY LIST 
  

[ * ] 
  

	[ * ]	= Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities and Exchange Act of 1934, as amended. 

  

 Exhibit B 
  

Capital Equipment List 
  
 [ * ] 
  

	*	Nuvelo desires that Avecia provide input with respect to these issues. 

  

	[ * ]	= Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities and Exchange Act of 1934, as amended. 

  

 - 9 -FORM OF CHANGE OF CONTROL AGREEMENT

 Exhibit 10.19 
  
 AGREEMENT 
  
 This Agreement dated as of             , is entered into by and between
             (“Employee”) and Insmed Incorporated, a Virginia corporation (“Insmed”). 
  
 Employee and Insmed hereby agree to the following terms and conditions: 
  
 1. Purpose of Agreement. The purpose of this Agreement is to provide
that, in the event of a “Change in Control,” Employee may become entitled to receive additional benefits in the event of his termination. It is believed that the existence of these potential benefits will benefit Insmed by discouraging
turnover and causing such employee to be more able to respond to the possibility of a Change in Control without being influenced by the potential effect of a Change in Control on his job security. 
  
 2. Change in Control. As used in this Agreement, “Change in
Control” means an event or occurrence set forth in any one or more of subsections (a) through (d) below (including an event or occurrence that constitutes a Change in Control under one of such subsections but is specifically exempted from
another such subsection): 
  
 (a) the acquisition by an
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership of any capital stock of Insmed if,
after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 40% or more of either (x) the then-outstanding shares of common stock of Insmed (the “Outstanding Company Common
Stock”) or (y) the combined voting power of the then-outstanding securities of Insmed entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from Insmed (excluding an acquisition pursuant to the exercise, conversion or exchange of any security exercisable for, convertible
into or exchangeable for common stock or voting securities of Insmed, unless the Person exercising, converting or exchanging such security acquired such security directly from Insmed or an underwriter or agent of Insmed), (ii) any acquisition by
Insmed, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Insmed or any corporation controlled by Insmed, or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses
(i) and (ii) of subsection (c) of this Section 2; or 
  
 (b) such
time as the Continuing Directors (as defined below) do not constitute a majority of the Board of Directors of Insmed (the “Board”) (or, if applicable, the Board of Directors of a successor corporation to Insmed), where the term
“Continuing Director” means at any date a member of the Board (i) who was a member of the Board on the date of the execution of this Agreement or (ii) who was nominated or elected subsequent to such date by at least a majority of the
directors who were Continuing Directors at the time of such nomination or election or whose election to the Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or
election; 

  

 - 1 - 

 
provided, however, that there shall be excluded from this clause (ii) any individual whose initial assumption of office occurred as a result of an actual or
threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Board; or 
  
 (c) the consummation of a merger, consolidation, reorganization,
recapitalization or statutory share exchange involving Insmed or a sale or other disposition of all or substantially all of the assets of Insmed in one or a series of transactions (a “Business Combination”), unless, immediately following
such Business Combination, each of the following two conditions is satisfied: (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote
generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns Insmed or substantially
all of the Insmed’s assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the “Acquiring Corporation”) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, respectively; and (ii) no Person (excluding the Acquiring Corporation or any employee benefit plan (or related trust)
maintained or sponsored by Insmed or by the Acquiring Corporation) beneficially owns, directly or indirectly, 40% or more of the then outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the
then-outstanding securities of such corporation entitled to vote generally in the election of directors (except to the extent that such ownership existed prior to the Business Combination); or 
  
 (d) approval by the stockholders of Insmed of a complete liquidation or
dissolution of Insmed. 
  
 3. Rights and Obligations Prior to a
Change in Control. Prior to a Change in Control the rights and obligations of Employee with respect to his employment by Insmed shall be whatever rights and obligations are negotiated between Insmed and Employee from time to time. The existence
of this Agreement, which deals with such rights and obligations subsequent to a Change in Control, shall not be treated as raising any inference with respect to what rights and obligations exist prior to a Change in Control unless specifically
stated elsewhere in this Agreement. 
  
 4. Effect of a Change
in Control. In the event of a Change in Control and the Employee’s employment is terminated pursuant to a “Qualifying Termination” (as set forth below) on or prior to the date that is within twelve (12) months of the effective
date of the Change in Control (the “Change in Control Date”), the Employee shall be entitled to the severance payments and other benefits set forth in this Agreement. 
  

 - 2 - 

 5. Qualifying Termination. If, subsequent to a Change in Control, Employee’s employment
terminates within one year of the Change in Control Date, such termination shall be considered a Qualifying Termination unless: 
  
 (a) Employee voluntarily terminates employment. However, it shall not be considered a voluntary termination of employment if, following the Change in
Control, Employee’s compensation or duties are changed in any material respect from what they were immediately prior to a Change in Control, and subsequent to such change Employee elects to terminate employment. A “change in any material
respect” shall encompass (i) any significant diminution in Employee’s position, authority, duties, responsibilities, or reporting relationship, (ii) any material reduction in Employee’s then compensation and/or benefits, unless such
reduction is an across-the-board reduction of the compensation and/or benefits of all similarly situated executives, (iii) any change in Employee’s job location to a site more than 50 miles away from his place of employment prior to the
Change in Control or (iv) the failure of Insmed to obtain the agreement of any successor to Insmed to assure and agree to perform this Agreement. 
  
 (b) The termination is on account of Employee’s death or disability. As used herein, “disability” refers to an illness or accident that
causes Employee to be unable to perform the duties of his job for at least six consecutive months, as determined by a physician mutually acceptable to Insmed and the Employee. 
  
 (c) Employee is involuntarily terminated for “Cause”, or it is determined that the facts conclusively demonstrate
that Employee would have been terminated had any of the events set forth in clauses (i) through (iii) below had been known at the date of termination. For this purpose “Cause” means: 
  
 (i) the Employee’s willful and continued failure to
substantially perform his reasonable assigned duties (other than any such failure resulting from incapacity due to physical or mental illness or any failure after the Employee gives notice of termination for any of the reasons set forth in Section
5(a)), which failure is not cured within 60 days after a written demand for substantial performance is received by the Employee from the Chief Executive Officer which specifically identifies the manner in which the Chief Executive Officer believes
the Employee has not substantially performed his duties; 
  
 (ii) the Employee’s willful engagement in illegal conduct or gross misconduct that is materially and demonstrably injurious to Insmed; or 
  
 (iii) the Employee’s conviction of a felony involving a crime of moral turpitude. 
  

 - 3 - 

 For purposes of this Section 5(c), no act or failure to act by the Employee shall be considered “willful”
unless it is done, or omitted to be done, in bad faith and without reasonable belief that the Employee’s action or omission was in the best interests of Insmed. 
  
 6. Constructive Qualifying Termination. If within six months prior to a Change in Control Employee’s employment
terminates as a result of any change described in Section 5(a) of this Agreement, Employee shall be entitled to the compensation, payments and other benefits that the Employee would have received if such termination had occurred after a Change in
Control. 
  
 7. Date and Notice of Termination. Any
termination of Employee’s employment by Insmed or by Employee shall be communicated by a written notice of termination to the other party (the “Notice of Termination”). Where applicable, the Notice of Termination shall indicate the
specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed. 
  
 8. Severance Payments. If Employee is terminated as a result of a Qualifying Termination, Insmed shall pay Employee within 30 days of said
Qualifying Termination a cash lump sum equal 1.0 times Employee’s “Compensation” as a severance payment (“Severance Payment”). 
  
 (a) “Compensation” means the sum of Employee’s highest annual salary rate (i.e. the Employee’s highest rate of annual salary while an
employee of Insmed) plus a bonus calculated by multiplying an employee’s annual salary by the maximum bonus potential for the change of control year prorated as of the date of the Change of Control. 
  
 (b) In lieu of a cash lump sum, Employee may, at his option, elect in writing
to receive the payments provided by this Section 8 in equal monthly installments over 18 months. 
  
 (c) The Severance Payment set forth in this Section 8 is in lieu of any severance payments that Employee might otherwise be entitled to receive from
Insmed under the terms of any severance pay arrangement not referred to in this Agreement. 
  
 9. Stock Option Grants and Other Forms of Employee Compensation. In the event of a Change in Control, (i) all stock options then held by Employee shall remain exercisable for the term of the option period set
forth in his option agreement(s), and (ii) any restricted stock held by Employee shall remain subject to the restrictions set forth in his restricted stock agreement. 
  
 10. Additional Benefits. In the event of a Qualifying Termination, Insmed shall continue to provide to the Employee
health, dental, long-term disability, life insurance, continuation of D&O insurance, and the other fringe benefits that Employee received prior to the Qualifying Termination on the same terms and conditions as though the Employee had remained

  

 - 4 - 

 
an active employee of Insmed for the 18 month period immediately subsequent to the Qualifying Termination. Insmed shall provide COBRA benefits to the
Employee following the end of this 18-month period, such benefits to be determined as though the Employee’s employment had terminated at the end of such period. 
  
 11. Taxes. 
  
 (a) The benefits that an Employee may be entitled to receive under this Agreement and other benefits that an Employee is entitled to receive under other
plans, agreements and arrangements (which, together with the benefits provided under this Plan, are referred to as “Payments”), may constitute Parachute Payments that are subject to the “golden parachute” rules of Section 280G of
the Internal Revenue Code of 1986 (the “Code”) and the excise tax of Code Section 4999. As provided in this Section 11, the Parachute Payments will be reduced if, and only to the extent that, a reduction will allow an Employee to receive a
greater Net After Tax Amount than an Employee would receive absent a reduction. 
  
 (b) The Accounting Firm will first determine the amount of any Parachute Payments that are payable to an Employee. The Accounting Firm also will determine the Net After Tax Amount attributable to the Employee’s
total Parachute Payments. 
  
 (c) The Accounting Firm will next
determine the largest amount of Payments that may be made to the Employee without subjecting the Employee to tax under Code Section 4999 (the “Capped Payments”). Thereafter, the Accounting Firm will determine the Net After Tax Amount
attributable to the Capped Payments. 
  
 (d) The Employee will
receive the total Parachute Payments or the Capped Payments, whichever provides the Employee with the higher Net After Tax Amount. If the Employee will receive the Capped Payments, the total Parachute Payments will be adjusted by first reducing the
amount of any noncash benefits under this Agreement or any other plan, agreement or arrangement (with the source of the reduction to be directed by the Employee) and then by reducing the amount of any cash benefits under this Agreement or any other
plan, agreement or arrangement (with the source of the reduction to be directed by the Employee). The Accounting Firm will notify the Employee and Insmed if it determines that the Parachute Payments must be reduced to the Capped Payments and will
send the Employee and Insmed a copy of its detailed calculations supporting that determination. 
  
 (e) As a result of the uncertainty in the application of Code Sections 280G and 4999 at the time that the Accounting Firm makes its determinations under
this Section 11, it is possible that amounts will have been paid or distributed to the Employee that should not have been paid or distributed under this Section 11 (“Overpayments”), or that additional amounts should be paid or distributed
to the Employee under this Section 11 (“Underpayments”). If the Accounting Firm determines, based on either the assertion of a deficiency by the Internal Revenue Service against Insmed or the Employee, which assertion the Accounting Firm
believes has a high probability of success or controlling precedent or substantial authority, that an 

  

 - 5 - 

 
Overpayment has been made, that Overpayment will be treated for all purposes as a loan ab initio that the Employee must repay to Insmed together with
interest at the applicable Federal rate under Code Section 7872; provided, however, that no loan will be deemed to have been made and no amount will be payable by the Employee to Insmed unless, and then only to the extent that, the deemed loan and
payment would either reduce the amount on which the Employee is subject to tax under Code Section 4999 or generate a refund of tax imposed under Code Section 4999. If the Accounting Firm determines, based upon controlling precedent or substantial
authority, that an Underpayment has occurred, the Accounting Firm will notify the Employee and Insmed of that determination and the amount of that Underpayment will be paid to the Employee promptly by Insmed. 
  
 (f) For purposes of this Section 11, the following terms shall have their
respective meanings: 
  
 (i) “Accounting
Firm” means the independent accounting firm engaged by Insmed immediately before the Change in Control Date. 
  
 (ii) “Net After Tax Amount” means the amount of any Parachute Payments or Capped Payments, as applicable, net of taxes imposed
under Code Sections 1, 3101(b) and 4999 and any State or local income taxes applicable to the Employee on the date of payment. The determination of the Net After Tax Amount shall be made using the highest combined effective rate imposed by the
foregoing taxes on income of the same character as the Parachute Payments or Capped Payments, as applicable, in effect on the date of payment. 
  
 (iii) “Parachute Payment” means a payment that is described in Code Section 280G(b)(2), determined in accordance with Code
Section 280G and the regulations promulgated or proposed thereunder. 
  
 12. Term of Agreement. This Agreement shall be effective from             through             .
Insmed may, in its sole discretion and for any reason, provide written notice of termination (effective as of the then applicable expiration date) to Employee no later than 60 days before expiration date of this Agreement. If written notice is not
so provided, this Agreement shall be automatically extended for an additional period of 12 months past the expiration date. This Agreement shall continue to be automatically extended for an additional twelve (12) months at the end of such 12-month
period and each succeeding 12-month period unless notice is given in the manner described in this Section 12. 
  
 13. Governing Law. Except to the extent that federal law is applicable, this Agreement is made and entered into in the Commonwealth of Virginia and
the laws of Virginia shall govern its validity and interpretation in the performance by the parties hereto of their respective duties and obligations hereunder. 
  

 - 6 - 

 14. Entire Agreement. This Agreement constitutes the entire agreement between the parties
respecting the compensation, payments and benefits due Employee in the event of a Change in Control followed by a Qualifying Termination, and there are no representations, warranties or commitments, other than those set forth herein, which relate to
such benefits. This Agreement may be amended or modified only by an instrument in writing executed by Insmed and the Employee. 
  
 15. No Duty to Mitigate. Employee shall not be required to mitigate the amount of any payment contemplated by this Agreement (whether by seeking
new employment or in any other manner), nor shall any earnings that Employee may receive from any other source reduce any such payment. 
  
 16. Successors: Binding Agreement. 
  
 (a) Assumption by Successor. Insmed shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of Insmed expressly to assume and to agree to perform its obligations under this Agreement in the same manner and to the same extent that Insmed would be required to perform such obligations if no such
assumption had occurred. As used herein, Insmed shall mean any successor to its business and/or assets as aforesaid that assumes and agrees to perform its obligations by operation of law or otherwise. 
  
 (b) Enforceability by Beneficiaries. This Agreement shall be binding upon and
inure to the benefit of Employee (and Employee’s personal representatives and heirs) and Insmed and any organization which succeeds to substantially all of the business or assets of Insmed, whether by means of merger, consolidation, acquisition
of all or substantially all of the assets of Insmed or otherwise, including, without limitation, as a result of a Change in Control, or by operation of law. This Agreement shall inure to the benefit of and be enforceable by Employee’s personal
or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Employee should die while any amount would still be payable to such Employee hereunder if he had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to his designee or, if there is no such designee, to his estate. 
  

17. Confidentiality. Employee acknowledges that in the course of his employment with Insmed, he has acquired non-public privileged or
confidential information and trade secrets concerning the operations, future plans and methods of doing business (“Proprietary Information”) of Insmed, and the Employee agrees that it would be extremely damaging to Insmed if such
Proprietary Information were disclosed to a competitor of Insmed or to any other person or corporation. Employee understands and agrees that all Proprietary Information Employee has acquired during the course of such employment has been divulged to
Employee in confidence and further understands and agrees to keep all Proprietary Information secret and confidential (except for such information which is or becomes publicly available other than as a result of a breach by Employee of this
provision) without limitation in time. In view of the 

  

 - 7 - 

 
nature of Employee’s employment and the Proprietary Information Employee has acquired during the course of such employment, Employee likewise agrees
that Insmed would be irreparably harmed by any disclosure of Proprietary Information in violation of the terms of this Section 16 and that Insmed shall therefore be entitled to preliminary and/or permanent injunctive relief prohibiting Employee from
engaging in any activity or threatened activity in violation of the terms of this Section and to any other judicial relief available to it. Inquiries regarding whether specific information constitutes Proprietary Information shall be directed to
Insmed’s General Counsel (or, if such position is vacant, Insmed’s Chairman of the Compensation Committee); provided, however, that Insmed shall not unreasonably classify information as Proprietary Information. 
  
 18. Non-Competition. 
  
 (a) For a period of twelve (12) months after the termination of
Employee’s employment with Insmed, Employee will not: 
  
 (i) as an individual proprietor, partner, stockholder, officer, director, employee, director, joint venturer, investor, lender, or in any capacity whatsoever (other than as the holder of not more than one percent (1%)
of the total outstanding stock of a publicly held company), engage in any business that competes directly with the products or services provided by Insmed at the time of termination or for which definitive Insmed plans then exist to so provide such
products or services; 
  
 (ii) directly or
indirectly recruit or solicit any person who is then an employee of Insmed or was an employee of Insmed at any time within six months prior to such retirement or solicitation; or 
  
 (iii) solicit, divert or take away, or attempt to divert or to take away, the business or patronage of any
of the clients, customers or accounts, or prospective clients, customers or accounts of Insmed. 
  
 (b) If any restriction set forth in this Section 18 is found by any court of competent jurisdiction to be unenforceable because it extends for too long a
period of time or over too great a range of activities or in too broad a geographic area, it shall be interpreted to extend only over the maximum period of time, range of activities or geographic area to which it may be enforceable. 
  
 (c) The restrictions contained in this Section 18 are necessary for the
protection of the business and goodwill of Insmed and are considered by Employee to be reasonable for such purpose. Employee agrees that any breach of this Section will cause Insmed substantial and irrevocable damage and therefore, in the event of
any such breach, in addition to such other remedies that may be available, Insmed shall have the right to seek specific performance and injunctive relief. 
  

 - 8 - 

 19. Outplacement Services. In the event the Employee is terminated by Insmed (other than for
Cause, disability or death), or the Employee voluntarily terminates employment for the reasons set forth in Section 5(a), within twelve (12) months following the Change in Control Date, Insmed shall provide outplacement services through one or more
outside firms of the Employee’s choosing up to an aggregate of $10,000, with such services to extend until the earlier of (i) 12 months following termination of Employee’s employment or (ii) the date the Employee secures full time
employment. 
  
 20. Notices. All notices, instructions and
other communications given hereunder or in connection herewith shall be in writing. Any such notice, instruction or communication shall be sent either (i) by registered or certified mail, return receipt requested, postage prepaid, or (ii) prepaid
via a reputable nationwide overnight courier service, in each case addressed to Insmed and to the Employee at their respective addresses set forth below (or to such other address as either Insmed or the Employee may have furnished to the other in
writing in accordance herewith). Any such notice, instruction or communication shall be deemed to have been delivered five business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, or two business
days after it is sent via a reputable nationwide overnight courier service. Either party may give any notice, instruction or other communication hereunder using any other means, but no such notice, instruction or other communication shall be deemed
to have been duly delivered unless and until it actually is received by the party for whom it is intended. 
  
 If to Insmed: 
  
 Insmed
Incorporated 
 4851 Lake Brook Drive 
 Glen Allen, Virginia 23058-2400 
 Attention: Chairman, Compensation Committee 
  
 If to Employee: 
  
  
 21. Captions. The captions of this
Agreement are inserted for convenience and do not constitute a part hereof. 
  
 22. Severability. In case any one or more of the provisions contained in this Agreement shall for any reasons be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein and there shall be deemed substituted such other
provision as will most nearly accomplish the intent of the parties to the extent permitted by applicable law. In case this Agreement, or any one or more of the provisions hereof, shall be 

  

 - 9 - 

 
held to be invalid, illegal or unenforceable within any governmental jurisdiction or subdivision thereof, this Agreement or any such provision thereof shall
not as a consequence thereof be deemed to be invalid, illegal or unenforceable in any other governmental jurisdiction or subdivision thereof. 
  
 23. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same Agreement. 
  
 [Signature
Page Follows] 
  
  

 - 10 - 

 IN WITNESS HEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of
the day and year first written above in Glen Allen, Virginia. 
  

					
	 	 	INSMED INCORPORATED
			
	  

	 	 By
	 	  

	 Witness
	 	 	 	 Geoffrey Allan, President and CEO

			
	  

	 	 	 	  

	 Witness
	 	 	 	 Employee

  

 - 11 -

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