Document:

EX-10.33

 

Exhibit 10.33

 

BUSINESS PURCHASE AGREEMENT

BY AND BETWEEN

PHIBRO ANIMAL HEALTH SA

AS THE SELLER,

AND

GLAXOSMITHKLINE BIOLOGICALS SA

AS THE PURCHASER

DATED AND ENTERED INTO ON THIS THE 16 DAY OF DECEMBER, 2004

 

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SIGNATURE VERSION

BUSINESS PURCHASE AGREEMENT

     THIS BUSINESS PURCHASE AGREEMENT (this “Agreement”) is dated and entered
into as of this sixteenth day of December 2004 (the “Effective Date”), by and
between PHIBRO ANIMAL HEALTH SA, a societe anonyme organized under the laws of
Belgium with its principal offices at 87a rue de l’Institut, B-1330 Rixensart,
Belgium (“Seller”), and GLAXOSMITHKLINE BIOLOGICALS S.A., a corporation
organized under the laws of Belgium having a place of business at 89, rue de
L’Institut, 1330 Rixensart, Belgium (the “Purchaser”) (the Seller and the
Purchaser, collectively, the “Parties”, and each individually, a “Party”).

PRELIMINARY STATEMENTS

     The Seller and the Purchaser entered into a Process Development Agreement
on August 19th, 2004 under which the Seller is acting as a subcontractor of the
Purchaser to perform pilot scale development of MPL in its facilities located in
Rixensart; and

     The Seller and the Purchaser have also expressed their potential interest
in the acquisition by the Purchaser of the Seller’s facilities in Rixensart; and

     The Seller desires to sell, and the Purchaser desires to purchase, subject
to the terms and conditions set forth herein, the Seller’s Activities, Site and
the Acquired Assets performed and/or located in Rixensart (as hereinafter
defined), pursuant to the transactions, documents and deliveries contemplated by
this Agreement; and

     On 17 November 2004, Seller has announced to its Work Council that Seller
intends to proceed with the collective dismissal for technical and economical
reasons of 52 of its employees.

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

SECTION 1

DEFINITIONS AND REFERENCES

     1.1. DEFINED TERMS. As used in this Agreement, the following defined terms
shall have the meanings specified below:

     “Acquired Assets” shall mean all assets physically on the Site as of the
Effective Date other than the Excluded Assets. An indicative list of the
Acquired Assets, which is not a detailed list but a simplified list, is set
forth on Exhibit A.

     “Activities” shall mean Seller’s industrial activities relating to its
manufacturing capacity and know-how in respect of Seller’s expertise in solvents
technology.

     “Affiliates” shall mean, with respect to any Person, any Persons directly
or indirectly controlling, controlled by, or under common control with, such
Person. For purposes hereof, the

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term “controlled” (including the terms “controlling,” “controlled by” and “under
common control with”), as used with respect to any Person, shall mean the direct
or indirect ability or power to direct or cause the direction of management
policies of such Person or otherwise direct the affairs of such Person, whether
through ownership of voting securities or otherwise.

     “Agreement” shall have the meaning in the introductory paragraph of this
Agreement.

     “Assumed Liabilities” shall have the meaning set forth in Section 2.2(a).

     “Claim Notification” shall have the meaning set forth in Section 6.2.1.

     “Closing” shall have the meaning set forth in Section 2.5(a).

     “Closing Date” shall have the meaning set forth in Section 2.5(a).

     “Company Guarantee” shall have the meaning set forth in Section 6.3.

     “Decommissioning” shall mean decommissioning carried out in compliance with
the document entitled “TP05 Facilities Decommissioning Process GMS Technical
Processes” attached hereto as Exhibit F, an outline of which is also included in
same Exhibit F.

     “Dispute” shall have the meaning set forth in Section 12.12.

     “Due Indemnity” shall have the meaning set forth in Section 6.2.5.

     “Effective Date” shall have the meaning in the introductory paragraph of
this Agreement.

     “Employees” shall mean the persons listed in Exhibit G and in Exhibit H
who are employed in the Activities being transferred to the Purchaser.

     “Encumbrance” means any claim, condition, lien, option, mortgage, pledge,
security interest, limitation, charge or encumbrance of any kind, restriction or
exercise of any right attributing ownership or other right whatsoever whether in
favour of third parties or held by third parties.

     “Excluded Assets” shall mean the assets set forth in Exhibit B hereto.

     “Excluded Liabilities” shall have the meaning set forth in Section 2.2(b).

     “Finishing Activities” shall mean all granulation and other reasonable and
necessary ancillary finishing activities for intermediate Virginiamycin products
to be carried out in Building 3 (granulation) and/or requiring QC in Building 1,
QA in Building 1, maintenance in Building 11, warehousing in Pavillon 5,
utilities in Building 6 and supervisor offices in Pavillon 11.

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     “Governmental Authority” shall mean any court of competent jurisdiction,
governmental agency, board or commission or other governmental authority or
other instrumentality of Belgium.

     “Industrial Activities” means all Seller’s activities, process, equipment
used in the manufacturing of Virginiamycin and Semduramicin, including but not
limited to all necessary services supports including QC, QA, maintenance,
warehousing, supervision and management.

     “Intellectual Property” means the software licences and service agreements
necessary to utilise the Acquired Assets, as listed in Exhibit J hereto.

     “Liabilities” shall mean, as to any Person, all debts, adverse claims,
liabilities and obligations, direct, indirect, absolute or contingent of such
Person, whether accrued, vested or otherwise, whether known or unknown, whether
in contract, tort, strict liability or otherwise and whether or not actually
reflected, or required by generally accepted accounting principles to be
reflected, in such Person’s balance sheets or other financial books and records.

     “Loss” shall have the meaning set forth in Section 6.1.5 (a).

     “Mortgage” shall mean the mortgage dated 14 April 2004 granted by Seller
to HSBC Bank USA for an amount of USD 15 million in principal.

     “MPL” shall have the meaning set forth in Section 4.8 (f) (ii).

     “Party” or “Parties” shall have the meaning in the introductory paragraph
of this Agreement.

     “Permitted Liens” shall mean (i) mechanics’, carriers’, workmen’s,
repairmen’s or other like Encumbrances arising or incurred in the ordinary
course of business, (ii) Encumbrances for industrial taxes excluding VAT and
registration duties that are not due and payable and (iii) such other
Encumbrances as would not be reasonably likely to be material to the Acquired
Assets. Bank Encumbrances and any other financial Encumbrances will in no
circumstances be considered as Permitted Liens.

     “Person” shall mean a natural person, a corporation, a partnership, a
trust, a joint venture, a limited liability company, any governmental authority
or any other entity or organization.

     “Phibro Animal Health Corporation” shall mean a New York Corporation which
is the ultimate parent company of Seller with offices at 65 Challenger Road, 3rd
Floor, Ridgefield Park, NJ 07660, USA.

     “Previous Liabilities” shall have the meaning set forth in Section 2.2(c).

     “Prior Rights” shall have the meaning set forth in Section 11.2(b).

     “Proceeding” shall mean all claims, litigation, proceedings,
investigations, actions, suits, or orders at law or in equity.

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     “Purchaser” shall have the meaning in the introductory paragraph of this
Agreement.

     “Purchase Price” shall have the meaning set forth in Section 2.1(a).

     “Seller” shall have the meaning in the introductory paragraph of this
Agreement.

     “Seller Position Notification” shall have the meaning set forth in Section
6.2.1.

     “Site” shall mean the site of the Seller located at 87a rue de l’Institut,
1330 Rixensart (Belgium). A plan of the Site is attached hereto as Exhibit C.

     “Transfer Tax” shall have the meaning set forth in Section 8.1.

     “Transition Period” shall have the meaning set forth in Section 2.4 (c).

     “Warranties” means the representations and warranties set forth in
Sections 4, 5 and 6 of this Agreement.

     1.2. INTERPRETATION

          1.2.1 Defined terms include the plural as well as the singular and the
use of any gender shall be deemed to include the other gender;

          1.2.2 References to clauses and Sections are to clauses of and the
Sections to this Agreement, references to paragraphs are, unless otherwise
stated, references to the Sections referred to in said paragraphs, and
references to this Agreement include the Sections;

          1.2.3 References to Persons include those Person’s successors and
other beneficiaries;

          1.2.4 Clause and Section headings are included for the convenience of
the Parties only and shall not be used for the interpretation thereof;

          1.2.5 References to all or any part of any statute or statutory
instrument include any statutory amendment, modification or re-enactment in
force from time to time and references to any statute include any statutory
instrument or regulations made under it.

          1.2.6 The use of terms including means “including but not limited to”;

          1.2.7 The words “herein”, “hereof”, “hereunder” and other words of
similar import refer to this Agreement as a whole and not to any particular
provision.

          
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SECTION 2

SALE AND PURCHASE OF ASSETS

     2.1. PURCHASE AND SALE OF ASSETS; SIGNING PAYMENT.

          (a) On the terms and subject to the conditions of this Agreement, at
the Closing the Seller shall sell, assign, transfer, convey and deliver to the
Purchaser, and the Purchaser shall purchase, acquire and accept from the Seller,
the Activities and all of the Acquired Assets, free and clear of all
Encumbrances, other than Permitted Liens, and in consideration for the
Purchaser’s acquisition of the Activities and all of the Acquired Assets, the
Purchaser shall assume the Assumed Liabilities and pay Seller, on the Closing
Date, free and clear of and without reduction for any value-added or withholding
tax, an amount equal to Six Million Two Hundred Thousand Euro (EUR 6,200,000)
(the “Purchase Price”) broken down as follows:

	(i)	 	One Million Three Hundred Thousand Euro (EUR 1,300,000) for the land (incl.
Equipment like roads, car parks,...) plus
	 
	(ii)	 	Four Million Nine Hundred Thousand Euro (EUR 4,900,000) for the buildings
and equipment.

          (b) In consideration of the advantages for Seller resulting from the
transaction contemplated hereby Seller agrees to make the following payments to
Purchaser:

	(i)	 	within six (6) months from the Closing Date: One Million Five Hundred
Thousand Euro (1,500,000 EUR)
	 
	(ii)	 	within eighteen (18) months from the Closing Date: One Million Five Hundred
Thousand Euro (1,500,000 EUR)
	 
	(iii)	 	within thirty (30) months from the Closing Date: One Million Five Hundred
Thousand Euro (1,500,000 EUR)
	 
	(iv)	 	within forty-two (42) months from the Closing Date: Five Hundred Thousand
Euro (500,000 EUR).

          (c) The payments pursuant to Section 2.1(a) shall be made by wire
transfer of immediately available funds to a bank account of the Seller in
Belgium as specified by the Seller before the Closing Date.

          (d) The payments pursuant to Section 2.1(b) shall be made by wire
transfer of immediately available funds to a bank account of the Purchaser in
Belgium as specified by the Purchaser before the Closing Date.

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     2.2. ASSUMED LIABILITIES.

          (a) At and by virtue of the Closing Purchaser shall assume and
thereafter will pay, discharge, perform or otherwise satisfy when due all
Liabilities (other than Excluded Liabilities) according to their respective
terms arising out of the use, ownership and/or operation of the Acquired Assets
on or after the Closing Date subject to the appropriate representations and
warranties of the Seller pursuant to Sections 4 and 6 below. The foregoing
Liabilities being assumed by Purchaser are referred to hereinafter collectively
as the “Assumed Liabilities.”

          (b) Notwithstanding any other provision of this Agreement to the
contrary, but subject to Section 2.2.(c) below and to the terms of the Letter
Agreement dated September 28, 2000 between Pfizer Inc., Pfizer Animal Heath S.A,
Philipp Brothers Chemicals, Inc. SmithKline Beecham plc and SmithKline Beecham
Biologicals S.A., a copy of which is attached hereto as Exhibit D, other than
the Assumed Liabilities, the Purchaser shall not assume or be deemed to have
assumed any Liability or obligation of the Seller whatsoever pursuant to this
Agreement, including any Liabilities arising out of the use, ownership and/or
operation of the Acquired Assets prior to the Closing Date (the “Excluded
Liabilities”).

          (c) All Site Liabilities in connection with events or activities
conducted by Purchaser on the Site before January 19th, 1995 will remain
Purchaser’s responsibility according to the terms of the Sale Agreement between
SmithKline Beecham Biologicals SA and Pfizer SA dated January 19th, 1995
(hereafter “Previous Liabilities”).

     2.3. MAINTENANCE OF ACQUIRED ASSETS AND CLEAN-UP ACTIVITIES

          (a) The Seller undertakes to keep all Acquired Assets and related
utilities, including without limitation the pilot unit referred to in Section
2.4 (b) (iv) below, fully operational until the Closing Date subject to normal
business considerations. The Seller also undertakes to keep all Acquired Assets
on the Site between the Effective Date and the Closing Date. Purchaser shall be
permitted to control that all Acquired Assets physically remain on the Site
after the Effective Date, including without limitation the analytical equipment
listed in Exhibit A, and Seller shall cooperate with Purchaser to set up and
effect such control.

          (b) The indicative list of buildings and equipment Purchaser intends
to clean-up is attached hereto as Exhibit E. The clean-up activities either
through destruction or otherwise shall be the responsibility of Purchaser. The
Seller shall reimburse to Purchaser clean-up costs according to demolition costs
up to a maximum amount of Seven Hundred Thousand Euro (EUR 700,000). Such
reimbursement shall be made by Seller to a bank account designated by Purchaser,
based on documented expenses submitted by Purchaser when the cost of clean-up
activities reach Seven Hundred Thousand Euro (EUR 700,000) or, if such cost is
lower than Seven Hundred Thousand Euro (EUR 700,000), when the clean-up
activities will be completed by Purchaser, such payment to be made no later than
on the first anniversary of the Closing Date. Purchaser shall be authorised to
start clean-up activities on the Site before the Closing Date, provided such
clean-up activities do not affect the on-going manufacturing and granulation
activities as well as the stockpiling or residual activities of Seller on the
Site. For the avoidance

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of doubt, the demolition costs to be reimbursed by Seller hereunder shall not be
diminished by the value of equipment dismantled or recovered by Purchaser.

     For the avoidance of doubt, the buildings and equipment referred to in this
Section 2.3 are all part of the Acquired Assets.

     2.4. JOINT ACTION; CO-OPERATION

          (a) General.

               (i) Subject to the terms and conditions of this Agreement, each
of the Parties shall use its respective best efforts, and shall co-operate with
the other Party, to take, or cause to be taken, all actions and to do, or cause
to be done, all things necessary, proper or advisable, including furnishing any
necessary information or copies of documentation, or obtaining any consents,
approvals, permits, authorisations or waivers, to cause the transaction
contemplated by this Agreement to be consummated, as expeditiously as reasonably
practicable in accordance with the provisions of this Agreement. In the event
that any action, suit, proceeding or investigation relating to this Agreement or
the transaction contemplated hereby is commenced at any time, each of the
Parties shall co-operate and use its best efforts to defend against the same.

               (ii) In particular, but without being considered as an exhaustive
list, the Seller and Purchaser shall jointly proceed with any official
notifications or other formalities as may be required by environmental or
planning regulations, and Seller and Purchaser shall cooperate to obtain such
official environmental or planning authorisations as may be required by such
environmental or planning regulations.

               (iii) Parties agree that all costs and expenses, including taxes,
related to the Activities, Site and Acquired Assets, and in particular, but
without this being an exhaustive list, all costs and expenses, including taxes,
related to the gas and electricity supply, shall be apportioned such that these
costs and expenses, including taxes, accrued during or referable to periods
prior to Closing Date, shall be borne by the Seller and thereafter by the
Purchaser.

               In the event Seller has prepaid during the period prior to the
Closing Date such costs and expenses which only accrued or are referable to
periods after the Closing Date, Purchaser shall reimburse such costs and
expenses to Seller.

               In the event Purchaser has paid during the period after the
Closing Date such costs and expenses which accrued or are referable to periods
prior to the Closing Date, Seller shall reimburse such costs and expenses to
Purchaser.

               Seller and Purchaser shall use all reasonable efforts to draw up
and agree a provisional statement of the apportionment, and the balance owing by
or between Seller and Purchaser, thirty (30) calendar days after the Closing
which statement shall be reviewed and finalized twelve (12) months after
Closing. Seller shall pay to Purchaser, and Purchaser shall pay

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to the Seller, as applicable, the balance agreed within ten (10) calendar days
after (i) agreeing on the provisional statement of the apportionment, and (ii)
agreeing on the final statement of apportionment.

               (b) Pre-Closing.

               (i) Seller shall arrange for the closure (fill in) of the water
well number 3 located on the Site in a professional manner before the Closing
Date and shall bore in a professional manner a new water well delivering water
the quantity and quality in accordance with the Seller’s current permit. Both
operations, closure and boring, will be duly documented and such documentation
shall be provided by Seller to Purchaser as available but in any event before
the Closing Date. In exchange for the closure of water well number 3, Purchaser
shall provide to Seller and Seller shall be entitled to receive from Purchaser
the water supply Seller requires to operate and conduct its business till the
Closing Date as its is currently conducted.

               (ii) Upon reasonable notice by Purchaser, Seller shall provide
Purchaser with all necessary and reasonable access to and use, including
occupation by Purchaser, of those facilities of the Site as Purchaser may
require for purposes of its MPL activities before the Closing Date provided such
access and use, including occupation by Purchaser, do not effect the on-going
activities of the Seller on the Site.

                    From July 1, 2005 or an earlier date as may be agreed upon
between the Parties Purchaser may start modifications to Buildings 1 and 1A as
per the drawings attached hereto as schedule 2.4 (b) (ii), except to the QC part
of those buildings, in order to set up Purchaser’s projects and activities
related to MPL. In particular Seller agrees that Purchaser may install a GMP
pilot unit or units for MPL in Building 1A if it does not interfere with the
Industrial Activities.

In case Purchaser decides to implement such GMP pilot unit before the Closing
Date, Seller shall carry out the necessary works to isolate the areas dedicated
to Virginiamycin and MPL activities in Buildings 1, 1A and 3 pursuant to
Purchaser’s instructions. All costs relating to modifications to Buildings 1 or
1A and 3 necessary to isolate the areas dedicated to Virginiamycin and MPL
activities made in accordance with such instructions will be borne by Purchaser,
including :

	 	•	 	modification of people access and material access,
	 
	 	•	 	fluids and energy separated pipes
	 
	 	•	 	isolation works.

               (iii) The Parties agree that during the period prior to and until
Closing, Seller shall place at the disposal of Purchaser such Employees as
Purchaser may request for its activities during the period prior to Closing,
based on the availability of such Employees. Purchaser shall reimburse Seller
for the services of such Employees and at a rate per Employee as specified in
Schedule 2.4.

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               (iv) Seller shall maintain the pilot unit used by Seller to
perform the activities described in the Work Plan under the Process Development
Agreement of August 19, 2004 between the Parties and continue operations of said
pilot unit during the period prior to and until Closing. In particular, but
without limitation, Seller agrees to maintain fully operational the analytical
equipment necessary for the MPL activities listed on Exhibit A attached hereto.

               (v) The Seller shall use its best efforts, with the collaboration
from Purchaser, to obtain regular town planning permits for the following
buildings : P11 and H31.

          (c) Post-Closing. Seller shall have until December 31st, 2006 to
complete the Finishing Activities for intermediate Virginiamycin products
(“Transition Period”).

          During such Transition Period, Purchaser shall (i) place at the
disposal of the Seller such employees as Seller may request for such Finishing
Activities including, but not limited to, production employees and laboratory
personnel, and (ii) provide Seller with all necessary and reasonable access to
those areas of the Site as Seller may require for purposes of the Finishing
Activities.

Seller shall reimburse Purchaser for such employees placed at the disposal of
Seller at a rate per such employee and for other costs as specified in Schedule
2.4.

Seller agrees that it will indemnify and hold harmless Purchaser for any damages
or claims incurred by Purchaser as a result of the Finishing Activities
conducted by Seller. This obligation of indemnification shall not be subject to
any other limitation set forth in this Agreement.

          (d) Process Development Agreement. Seller shall continue to perform
its obligations under the Process Development Agreement entered into with
Purchaser on 19 August 2004 and allocate its resources to achieve the
objectives, in particulars the milestones, set out in the Process Development
Agreement.

          (e) Seller shall be responsible for termination of all contracts
relating to the Excluded Assets and, as may be directed by Purchaser, Seller
shall either continue maintenance agreements listed in Schedule 2.4 (e) and
other relevant agreements related to the Acquired Assets in the name of
Purchaser or terminate said agreements. Seller and Purchaser shall jointly
notify utilities suppliers and other relevant contractors of change of name of
contracting party.

     2.5. CLOSING.

          (a) Closing. The consummation of the transactions contemplated by
this Agreement (the “Closing”) shall take place on November 30, 2005 or at
another date mutually agreed between the Parties provided such other date is not
earlier than July 1st, 2005 and not later than June 30th, 2006. The date on
which the Closing occurs is referred to in this Agreement as the “Closing Date”.

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          (b) Seller’s Obligations at the Closing. At the Closing the Seller
shall undertake, cause to be undertaken, deliver to the Purchaser and/or cause
to be delivered to the Purchaser, as applicable, the following:

               (i) those Acquired Assets which are capable of physical delivery
and which are cleaned, emptied of any raw materials unless otherwise indicated
by Purchaser and of which Decommissioning has been completed;

               (ii) a receipt for the Purchase Price.

          (c) Purchaser’s Obligations at the Closing. At the Closing the
Purchaser shall pay to the Seller the Purchase Price.

          (d) Both Parties’ Obligations at the Closing. At the Closing the
Purchaser and the Seller shall:

               (i) execute the notarial deed of transfer of the buildings and
fixtures set forth on Exhibit A. The notarial deed shall either contain the
representations and warranties from the Seller in Sections 4 and 6 hereof or
refer to Sections 4 and 6 hereof;

               (ii) jointly notify the competent environmental authorities and
any other competent authority of the change of operator pursuant to the
notification letter to be drafted by Seller who will modify this letter
following the reasonable comments of Purchaser and a form of which is attached
hereto as Exhibit I.

     2.6. RISK OF LOSS.

     Until the Closing, any loss of or damage to the Acquired Assets from fire,
casualty or any other occurrence shall be the sole responsibility of the Seller
(except for loss or damage caused by the Purchaser’s activities on the Site,
including MPL activities performed by Purchaser as set out in Section 2.4. (b)
(ii) and/or clean-up performed by Purchaser, as set out in Section 2.3(b)). Upon
the Closing, risk of loss to the Acquired Assets shall be transferred to the
Purchaser except that Seller shall remain solely responsible for any loss or
damage to the Acquired Assets from fire, casualty or any other occurrence
related to Seller’s Finishing Activities post Closing.

     The Parties acknowledge that if any Acquired Assets are lost or damaged by
fire, casualty or any other occurrence the Purchase Price shall be appropriately
adjusted, but the Closing shall nonetheless proceed.

     2.7. SCOPE OF THE PARTIES’ RIGHTS.

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     The Purchaser hereby acknowledges and agrees that it will acquire no right,
title, or interest whatsoever in any property or assets of the Seller except as
explicitly set forth in this Agreement.

SECTION 3

WORKFORCE

     3.1. TRANSFER OF EMPLOYEES

             (a) Parties acknowledge that the rights and obligations of Seller with
respect to the Employees referred to in Exhibit G and Exhibit H will at Closing
transfer with the Activities to the Purchaser pursuant to the Belgian Collective
Bargaining Agreement nr. 32bis on the safeguarding of employees’ rights in event
of transfers of undertakings, businesses or parts of businesses (“CBA nr.
32bis”).

             (b) Seller shall be responsible for all costs, expenses and other
liabilities arising from or relating to any claims or demands made by Employees,
and all liabilities for employee benefits received, earned, accrued or enjoyed,
in relation to any period up to and including the Closing Date and shall
accordingly indemnify and hold the Purchaser harmless.

             (c) Purchaser shall be responsible for all costs, expenses and other
liabilities arising from or relating to any claims or demands made by Employees,
and all liabilities for employee benefits received, earned, accrued or enjoyed,
in relation to any period following the Closing Date and shall accordingly
indemnify and hold the Seller harmless in respect thereto.

             (d) Parties agree that costs in relation to Employees borne by the
Seller shall be apportioned such that these costs in relation to Employees
accrued, or referable to periods, prior to the Closing Date shall be borne by
the Seller and thereafter by the Purchaser. Such costs in relation to Employees
shall include, but not be limited to: salaries, wages, expenses, commission,
bonuses, overtime pay, 13th month, sick pay, accrued holiday pay entitlement,
full financing of applicable benefit schemes, and other emoluments including
taxes, social security contributions or other amounts required to be withheld
there from or paid in relation to any of the foregoing. Seller and Purchaser
shall use all reasonable efforts to draw up and agree a statement of the
apportionment, and the balance owing by or between Seller and Purchaser, as soon
as practicable and at the latest thirty (30) calendar days after the Closing.
Seller shall pay to Purchaser or Purchaser shall pay to Seller, as the case may
be, the balance agreed within ten (10) calendar days after agreeing on the
statement of the apportionment.

             (e) If for any reason, any Employee listed on Exhibit G or Exhibit H
leaves the Seller before the Closing, Seller shall be entitled to fill
temporarily the open position(s) until the Closing Date with replacement
employees as necessary for its own activities. However, on or after the Closing
Date, Purchaser shall have no obligation whatsoever to take over or employ any
other person, including any such replacement employees, than the persons listed
in Exhibit G and Exhibit H, pursuant to the transaction set out in this
Agreement.

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     3.2. REDUNDANCIES

     Seller shall be responsible and shall bear the entire expense for all
redundancies, dismissals or lay-off of Seller’s employees who are not listed in
Exhibit G or Exhibit H attached hereto.

     3.3. NON-HIRING

          Purchaser agrees not to recruit any employee of Seller to start
employment at Purchaser before the Closing Date, except as otherwise expressly
agreed in writing between Parties. It is recognized and agreed that Purchaser
cannot prevent Seller’s employees to actively solicit or apply for positions
open at Purchaser. Hiring by Purchaser of any such Seller’s employee who has
solicited or applied for a job at Purchaser shall be permitted and shall not
constitute a breach of this Agreement

SECTION 4

REPRESENTATIONS AND WARRANTIES OF SELLER

     The Seller hereby represents and warrants to the Purchaser on the Effective
Date that:

     4.1. ORGANIZATION.

     The Seller is a corporation duly organized, validly existing and in good
standing under the laws of Belgium. The Seller has all requisite power and
authority to own, use and operate all of the Acquired Assets, and to conduct its
Activities as currently being conducted.

     4.2. AUTHORITY; EXECUTION AND DELIVERY; ENFORCEABILITY.

     The Seller has the requisite power and authority to execute and deliver
this Agreement and to perform all of its obligations hereunder. The execution
and delivery of this Agreement and the performance by the Seller of its
obligations hereunder have been authorized by all requisite action on the part
of the Seller. This Agreement has been validly executed and delivered by the
Seller and constitutes a legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, subject, as to
enforcement, to applicable bankruptcy, insolvency, fraudulent transfer,
moratorium, reorganization or similar laws affecting creditors’ rights generally
and to general equitable principles.

     4.3. CONSENTS AND APPROVALS; NO VIOLATIONS.

          (a) Neither the execution and delivery of this Agreement by the
Seller, nor the performance by the Seller of its obligations hereunder will: (i)
violate the organizational documents of the Seller; (ii) conflict with or result
in a violation or breach of, or constitute a default under, any contract,
agreement or instrument to which the Seller is a party or by which

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the Acquired Assets are bound, or result in the creation or imposition of any
Encumbrance upon any of the Acquired Assets (in particular the Asset Purchase
Agreement dated 28 September 2000 between Pfizer, Inc. and Philipp Brothers
Chemicals, Inc. (predecessor of Phibro Animal Health Corporation) does not
contain any obligation that would affect the Acquired Assets); or (iii) violate
or conflict with any law, rule, regulation, judgement, order or decree of any
court, other than, in the case of clauses (ii) and (iii) above, such as would
not, individually or in the aggregate, have a material adverse effect on the
Acquired Assets.

          (b) No filing with, and no permit, authorization, consent or approval
of, any Governmental Authority or any other Person is necessary for the
consummation by the Seller of the transactions contemplated by this Agreement.

     4.4. TITLE TO ASSETS.

     Subject to Section 6.1.7, on the Closing Date Seller shall hold good and
marketable title to the Acquired Assets, free and clear of any Encumbrance,
except for Permitted Liens. Upon delivery of the Acquired Assets to Purchaser on
the Closing Date, Seller shall convey to Purchaser good and marketable title to
the Acquired Assets, free and clear of any Encumbrance, except for Permitted
Liens.

     4.5. AS IS; WHERE IS.

     EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE ACQUIRED ASSETS
CONVEYED TO PURCHASER HEREUNDER BY SELLER ARE PROVIDED “AS IS” AND “WHERE IS”
AND SELLER MAKES NO OTHER REPRESENTATIONS OR WARRANTIES WITH RESPECT THERETO.

     4.6. BROKERS OR FINDERS.

     The Seller has had no dealings, negotiations or communications, whether in
writing or otherwise, with any broker(s), other intermediaries or other person
acting pursuant to the Seller’s authority who will be entitled to make any claim
against the Purchaser for any commission, finder’s fee or other fee may, in any
circumstance or event, be payable in connection with the transactions
contemplated by this Agreement.

     4.7. MATERIAL ASSETS RELATED TO ACQUIRED ASSETS.

     To the knowledge of the executive officers of Seller, all material assets
which are reasonably related to the Acquired Assets are listed in Exhibit A.

     4.8. SPECIFIC WARRANTIES.

(a) Acquired Assets. To the best of Seller’s knowledge, Seller has
operated the Acquired Assets and Activities in all material respects, on the
Site in compliance with all applicable laws and regulations and requirements,
and under all legally required authorisations and/or permits.

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          (b) Legal action. There is no legal action ongoing or pending or, to
the best of Seller’s knowledge, threatened against the Seller related to the
Acquired Assets. To the best of Seller’s knowledge, there is no circumstance
susceptible of giving rise to a claim for damages or other legal action relating
to or involving the Acquired Assets. To the best of Seller’s knowledge, Seller’s
activities on the Site or Seller’s operation of the Site are not subject to any
investigation from a Governmental Authority and the Seller has received no
notification that a similar investigation will be conducted on the Site.

          (c) Employees

               (i) Employees: the only persons assigned to the Activities on
the Closing Date are the persons listed in Exhibit G and Exhibit H, save for
changes in personnel to which the Purchaser has consented by prior written
agreement between the Effective Date and the Closing. On or after the Closing
Date, Purchaser shall have no obligation to employ any other person, including
the replacement employees referred to in Section 3.1(e), than the persons listed
in Exhibits G and H pursuant to the transaction set out in this Agreement.

               (ii) Representative Bodies: the Seller has complied with all
applicable regulations in respect of representative bodies, in particular with
regard to the establishment of Works Councils, or Health and Safety Committees.
Neither the Seller nor Seller’s officers have been investigated or prosecuted
for a “delit d’entrave” (impeding the course of the law) or any charge
subsequent to a refusal or delay in instituting Works Councils, or Health and
Safety Committees.

               No Works Council representative has been appointed to Seller’s
board of directors.

               (iii) Collective Bargaining Agreements — Employment contracts:
the Seller has respected the terms of all applicable collective bargaining
agreements and other agreements and the legal and contractual terms of all its
employment contracts. The Seller has complied with all applicable national,
sectoral and companies’ Collective Labour Agreement provisions as well as with
all applicable fiscal and social security laws, regulations and administrative
circulars. It has complied with all legal and statutory requirements of pension
schemes and group insurance policies, in particular the group insurance policy
concerning health, incapacity and/or death before retirement age. Seller
represents and warrants that on the Closing Date, it will have complied will all
legal and statutory requirements as to financing of its respective benefit
schemes as listed in Schedule 4.8. (c) (iv) hereof, it being in particular
understood that :

               (x) the minimum financing requirements of the old age pension
built up by Belgian legislation will have been respected, and

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               (y) the pension fund assets that will be transferred from Seller
to Purchaser on the Closing Date will not be less than the minimum financing
requirements. Any and all of the then existing surplus above the minimum
financing requirements will be transferred to Purchaser.

               The correct amounts under this clause will be determined and the necessary
adjustments will be made, within ninety (90) days after the Closing Date.

               (iv) Employee Benefits: Except as listed in Schedule 4.8.(c)(iv), there are no extra-legal pension plans, statutory or voluntary profit sharing
schemes retirement bonus plans, life or health insurance or other employee
benefit schemes of whatever nature in existence or proposed or due to take
effect after the Closing Date nor any contractual or moral obligation to create
or provide the same. has a right to make a claim for employee benefit arising
from past or existing statutory or voluntary profit sharing scheme.

               Seller represents and warrants that any and all benefit schemes
applicable comply with any and all applicable rules and legislation on
complementary pension schemes (old age, death, disability and medical coverage).

               (v) Indemnities: at the date hereof, the Seller does not owe any
amounts to or for the benefit of any person in respect of past service or the
termination of the employment contract.

               (vi) Remuneration: Schedule 4.8.(c)(vi) truly and accurately
lists the date of birth, date of commencement of continuous employment and
protection against dismissal of each Employee and the full remuneration and
benefit package to which each Employee is entitled. Except as listed in Schedule
4.8.(c)(vi), there are no agreements or outstanding commitments (other than
provided by law, collective labour agreements and/or individual employment
contracts) to increase the remuneration of any Employee in the future.
Furthermore there have been and there will be no negotiations that are due to
take place for any increase in the remuneration or benefits of any of the
Employees within a period of twenty-four (24) months after the Closing.

               (vii) Absence: Except as described in Exhibits G and H, as of
the Effective Date, no Employee is on secondment, absent on grounds of
disability or other long-term leave of absence or in receipt of any benefit
pursuant to any permanent health insurance or similar arrangement, on maternity
leave or on parental leave.

               (viii) Disputes: None of the Employees has any existing dispute,
claim or cause of action against the Seller or will have any dispute, claim or
cause of action against Purchaser whose triggering event originates in the
employment relationship between these Employees and the Seller prior to the
Closing Date nor is bringing or, to the best of Seller’s knowledge, threatening
to bring or will bring any proceedings before a court or otherwise, nor are

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there, so far as the Seller is aware, any circumstances in existence likely to
give rise to any such dispute, claim or cause of action.

               (ix) Change of control: No Employee will be entitled by reason
of this transaction contemplated by this Agreement to any one-off payment, bonus
or to terminate his/her employment.

               (x) Terms of employment: No proposal, assurance or commitment
has been communicated to any Employee regarding any change to his terms of
employment or working conditions.

               (xii) No special advantages: None of the Employees listed in
Exhibits G or H benefits from provisions in the event of dismissal or removal
from office which would oblige the Seller to pay amounts (i) exceeding those
amounts provided pursuant to law and applicable collective agreements or (ii)
due pursuant to a “Golden Parachute” clause. None of the Employees has the right
to a pension or other advantage at the time of retirement which exceeds that
which is provided under law, applicable collective agreements, and company
pension plans.

               (xiii) The Seller has not, in the past twelve months, given to or
received from any Employee notice of termination of employment.

          (d) Insurance

          The Seller is up to date with respect to the payment of the premiums
due for insurance policies related to the Acquired Assets which are in full
force and effect, and has infringed no provision of said policies which could
prejudice any claim. There are no outstanding claims made by the Seller under
any of the insurance policies related to the Acquired Assets.

          (e) Health, Safety, Environment and Planning

               (i) General representations and warranties.

               The Purchaser acknowledges that, prior to the date of signature
hereof, both itself and its advisers have had access to certain health, safety,
planning and environmental information related to the Seller, the Activities and
the Acquired Assets in the context of the due diligence performed in respect of
documentation and information made available by the Seller to the Purchaser, as
well as through various discussions with the Seller’s main executives, the
Seller’s statutory auditors and visits to the Seller’s Site, without having
conducted an audit on Site.

               The Purchaser considers that such information, if fairly
disclosed by Seller, is satisfactory to take its decision to purchase the
Activities and all of the Acquired Assets.

               The Seller hereby declares that at the Effective Date and until
the Closing Date:

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               (1) to the best of Seller’s knowledge, for both the Activities
and Acquired Assets, the Seller respects and materially complies with all
health, safety, planning and environmental protection and regulations and
standards applicable at the Closing Date, and has all necessary material permits
and authorisations and has completed all formalities as required with regards to
all health, safety, planning and environmental protection and regulations and
standards applicable at the date of the transfer.

               (2) the environmental audits that have been conducted from 1992
till 2001 do not reveal any significant detrimental findings in respect to the
Site, Activities or Acquired Assets; the Seller has carried out no environmental
audit of its facilities and its site since 2001 (other than cross-site audits
with Purchaser).

               (3) for both the Activities and the Acquired Assets, the Seller
has all necessary permits and authorisations related to town planning
(urbanisme) except for (i) the buildings P4, P5 and H5 which Purchaser intends
to demolish (ii) building H29 which Purchaser intends to move and (iii)
buildings P11 and H31 for which the Seller shall use its best efforts, with the
collaboration from Purchaser, to obtain permits before the Closing pursuant to
Section 2.4. (b)(v), and has completed all formalities as required with regard
to such authorisations and permits. Said authorisations and permits have been
lawfully issued and are valid.

               (4) the Seller has received no notification from Governmental
Authorities concerning any infringement of applicable environmental protection
regulations and standards or involving its liability with regard to any
environmental pollution or damage.

               (5) the Seller declares that the legal inspections made in
respect of health, safety, environmental and planning matters relating to the
Site, Activities and Acquired Assets do not reveal any significant detrimental
findings in respect to the Site, Activities or Acquired Assets.

               (6) the Seller is concerned by no legal action or decision
concerning health, safety, environmental and planning matters which has an
adverse effect on permits and authorisations for the Activities and Acquired
Assets

               (i) Special representations and warranties — Incidents

                    (1) The Seller declares that to his knowledge there have
been no operating incidents or other major events concerning the facilities
mentioned above.

                    (2) The Seller declares that to his knowledge there has been
no pollution or risk of pollution of the soil or sub-soil or the water table,
except for two (2) accidental discharges of MIBK that have occurred in April
1999 and April 2004 and the soil pollution well known to the Purchaser which is
currently under remediation by the Purchaser.

          (f) Equipment/Installations

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The Seller declares that all inspections in respect of equipment and
installations, included in the Acquired Assets, which are subject to acceptance
by official bodies, have been carried out in compliance with legal requirements
and that there is no report of non-conformity which would prevent Purchaser from
using Seller’s equipment and installations.

          (g) PCB/PCT

The Seller declares that all PCB/PCT have been professionally eliminated from
the facilities of the Seller in accordance with the Decree of the Walloon
government of 25 March 1999 on the elimination of PCB/PCT.

          (h) Use and future extensions of Site/Acquired Assets/Activities

The Seller declares that it has not made any arrangements or has entered into
any agreements with any third parties or Governmental Authorities at federal,
regional and/or local levels, which limit the use of the Site and the Acquired
Assets and the conduct of the Activities.

In particular, the Seller declares that it is not aware of, and has not agreed
with any third parties or Governmental Authorities whether federal, regional or
local, to any limitation to possible future extensions of the Site, Acquired
Assets and Activities.

          (i) Intellectual Property rights

The Seller declares that it does not control any intellectual property rights
which are relevant to the operations and activities, including the Activities,
which Purchaser will carry out with the Acquired Assets.

SECTION 5

REPRESENTATIONS AND WARRANTIES OF PURCHASER

     The Purchaser hereby represents and warrants to the Seller that on the
Effective Date:

     5.1. ORGANIZATION.

     The Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of Belgium. The Purchaser has all requisite power and
authority to own, lease and operate its properties and to conduct its business
ls now being conducted.

     5.2. AUTHORITY; EXECUTION AND DELIVERY; ENFORCEABILITY.

     The Purchaser has the requisite power and authority to execute and deliver
this Agreement and to perform all of its obligations hereunder. The execution
and delivery of this Agreement and the performance by the Purchaser of its
obligations hereunder have been authorized by all requisite action on the part
of the Purchaser. This Agreement has been validly executed and delivered by the
Purchaser and constitutes a legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms,
subject, as to enforcement, to applicable bankruptcy, insolvency, fraudulent
transfer, moratorium,

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reorganization or similar laws affecting creditors’ rights generally and to
general equitable principles.

     5.3. CONSENTS AND APPROVALS; NO VIOLATIONS.

          (a) Neither the execution and delivery of this Agreement by the
Purchaser nor the performance by the Purchaser of its obligations hereunder
will: (i) violate the certificate of formation, operating agreement or other
organizational document of the Purchaser; (ii) conflict with or result in a
violation or breach of, or constitute a default under, any contract, agreement
or instrument to which the Purchaser or any of its Affiliates is a party or by
which any of its or their properties or assets are bound; or (iii) violate or
conflict with any law, rule, regulation, judgement, order or decree.

          (b) No filing with, and no permit, authorization, consent or approval
of, any Governmental Authority is necessary for the consummation by the
Purchaser of the transactions contemplated by this Agreement.

SECTION 6

WARRANTIES — INDEMNIFICATION

     6.1. WARRANTIES

     The Seller hereby represents and warrants that all the Warranties given by
it in this Agreement are true, complete and accurate as of the date hereof,
subject only to the disclosure exceptions expressly mentioned in this Agreement
and its Sections and Exhibits.

     It is expressly agreed between Parties that information disclosed in the
context of the due diligence shall be considered as appropriate disclosure for
the purposes of releasing Seller’s liability pursuant to the representations and
warranties given by the Seller in Section 4 of this Agreement, only if such
information is fairly disclosed.

     It is expressly agreed between Parties that the Seller may not be released
from any liability under the representations and warranties of Section 4 of this
Agreement by the oral information disclosed to Purchaser and/or its counsels
prior to the Closing Date (including the oral information collected during the
due diligence mentioned in the above paragraph).

     6.1.1 The Purchaser acknowledges that, prior to the Effective Date, both
itself and its advisers have had access to certain technical, financial, legal,
tax, commercial and accounting information related to the Seller, as well as
through various discussions with the Seller’s main executives, the statutory
auditors and visits to the Site. The Purchaser considers that such information
is satisfactory to take its decision to purchase the Acquired Assets.

     6.1.2 The Seller shall be liable to the Purchaser in accordance with the
terms of the Warranties set forth in Section 4 and this Section 6. The Purchaser
shall be entitled to notify a

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claim to, and to actively enforce such claim against, the Seller for any
misrepresentation and/or material breach of the Warranties as set forth in
Section 4 or Section 6 by Seller and for the entire amount of such claim,
subject to Section 6 and the limitations set forth in Section 7.

     6.1.3. Each Warranty is given independently from and shall not be limited
by reference to any of the other Warranties; one and the same prejudice shall
however only be indemnified once under the terms hereof.

     6.1.4. The Seller shall as soon as possible and, in any event, within (15)
days from the occurrence of such event, disclose to the Purchaser in writing any
matter which becomes known to the Seller after the execution hereof which is or
could reasonably be expected to constitute a breach of the Warranties or affect
the accuracy thereof.

     6.1.5 Subject to the limitations set out in Section 7 of this Agreement,
the Seller undertakes to indemnify the Purchaser for any costs, expenses,
damages, claims or losses (including increase of liabilities or decrease of
value of assets) incurred by the Purchaser which directly results from:

     (a) a misrepresentation and/or material breach of any of the Warranties as
set forth in Section 4 or this Section 6 (a “Loss”). (b) the fact that Seller
has not obtained the consent from its bondholders and banks and/or has not
obtained the lifting of the mortgage on the Acquired Assets as referred to in
Section 4.3. and Section 4.4. above; or

     6.1.6. * Omitted pursuant to our request for confidential treatment.

     6.1.7. If at Closing the Mortgage is not lifted the Seller undertakes to
indemnify and keep indemnified Purchaser.

     6.2. NOTIFICATION OF CLAIMS, PAYMENT OF CLAIMS AND WARRANTIES

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          6.2.1 Upon the Purchaser becoming aware of any Loss which may give
right to a claim, the Purchaser shall, within a maximum period of sixty (60)
days notify the Seller in writing (as indicated in Section 12.1 of this
Agreement) of the details of the claim, including the Purchaser’s best estimate
of the amount of the claim, as well as any documents justifying Purchaser’s
claim (“Claim Notification”).

               Within thirty (30) days of receipt of a Claim Notification, the
Seller shall notify the Purchaser of its acceptance or rejection of the claim or
make an offer to settle (“Seller Position Notification”).

               In the event that, within such thirty (30) day period from the
date of the Claim Notification the Seller should fail to notify its position to
the Purchaser, or should notify its acceptance of the claim, or should the
Purchaser accept the proposed settlement, the claim shall be payable in
accordance with Section 6.2.2 of this Agreement.

               Should the Seller notify the Purchaser within such thirty (30)
day period from the date of the Claim Notification that it rejects the claim or
should the Purchaser reject the proposed settlement, the claim shall be (i)
dealt with under the expert procedure set forth in article 6.4 if the Purchaser
and the Seller agree that the dispute concerns the valuation either of the
prejudice or of the indemnity, or (ii) in all other cases, referred to the
Commercial Court of Nivelles.

          6.2.2. In the absence of any dispute in respect of a claim, the
payment of any amounts owed by the Seller to the Purchaser under any such claim
shall be made within fifteen (15) days from receipt of the Seller Position
Notification to the Purchaser and within thirty (30) days of the date of the
Claim Notification if the Seller fails to serve a Seller Position Notification
in accordance with Article 6.1.1 of this Agreement; such payment shall be made
in accordance with Section 6.2.4 hereafter.

          6.2.3. In the event of a dispute between the Seller and the Purchaser
in respect of any claim, the payment of any amounts owed by the Seller to the
Purchaser under any such claim shall be made within fifteen (15) days from the
notification by the Purchaser of any of the following events, and in accordance
with the provisions of:

	 	•	 	a full and final out of court settlement with respect to the claims ;
	 
	 	•	 	a final and unappealable court order ;
	 
	 	•	 	an expert decision, binding the Seller and the Purchaser, in
accordance with the provisions of Section 6.4 herein.

     Such payment shall be made in accordance with Section 6.2.4. hereafter.

          6.2.4. In the event of any amounts become due by the Seller to the
Purchaser pursuant to this Section (the “Due Indemnity”), the following payment
rules shall apply within the limitation period mentioned in Section 7.4
hereafter:

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          (i) firstly, the Purchaser shall set-off the Due Indemnity (but only
to the extent that it relates to amounts due under Section 6.1.6) against the
Purchase Price if not yet paid (or part of the Purchase Price) but only in
respect of two million six hundred thousand Euro (EUR 2,6 million), then

          (ii) secondly, the Purchaser shall be entitled to draw the remaining
amount due by the Seller of the Due Indemnity from the Company Guarantee under
the terms of the attached Company Guarantee in Schedule 6.3, then

          (iii) thirdly, the Seller shall be bound to pay the difference, if
any, between the portion of the Due Indemnity and the amounts charged against
the previous part incumbent upon him pursuant to the paragraphs (i) and (ii)
above.

     6.3. GUARANTEE OF PAYMENTS UNDER THE WARRANTIES

     To secure the performance of obligations made by the Seller to the
Purchaser, Phibro Animal Health Corporation, a New York corporation which is the
ultimate parent company of Seller, has issued in favour of the Purchaser a first
demand Company Guarantee attached hereto as Schedule 6.3.

     This Company Guarantee is not a substitution for all other rights or
actions available to the Purchaser arising under this Agreement, this Company
Guarantee being an integral part thereof.

     The Seller’s obligations under this Agreement shall survive expiry of the
above mentioned Company Guarantee and shall subsist until expiry of the
deadlines set forth in this Agreement.

     6.4. DISPUTES CONCERNING THE AMOUNT OF THE CLAIM

     In the event of any disagreement concerning the valuation of the Seller’s
liability for a claim, or the amount of the indemnity to be paid to the
Purchaser, and if the Purchaser and the Seller agree that the dispute concerns
solely such valuation of liability or amount of indemnity, the Parties agree to
submit the matter to a third party expert appointed by mutual agreement and, in
case of disagreement, appointed by the President of the Institute of Certified
Accountants (Institut des Reviseurs d’Entreprise) at the request of the most
diligent party.

     The Party initiating the action shall refer the matter and the expert shall
furnish its opinion within sixty (60) days of referral in a written report sent
by registered letter with acknowledgement of receipt to the Purchaser and the
Seller.

     Fees charged by the expert shall be shared equally between the Seller and
the Purchaser.

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SECTION 7

LIMITATIONS TO WARRANTIES

Any liability of the Seller for any claims for Losses, and any obligation of the
Seller to indemnify the Purchaser pursuant to Section 6 shall be subject to the
limitations of this Section 7:

     7.1. DURATION OF THE WARRANTIES

     The Seller shall not be liable in respect of any claims for Losses for
which a Claim Notification is notified by the Purchaser:

     (a) after 3 (three) years from the Closing Date; or

     (b) if the claim relates to tax or social matters after three (3) years
from the Closing Date or after the end of a period of thirty (30) days following
expiry of the relevant statute of limitations applicable to the claim, whichever
is later.

     7.2. EXCESS

     It is agreed that the Seller shall not be liable for any claims for Losses
unless:

          (a) The amount of each individual claim (which expression shall be
deemed to include any series of claims arising out of the same event or
circumstance) exceeds Thirty Five Thousand Euros (E 35,000); and,

          (b) The aggregate amount of all individual claims in excess of this
amount of Thirty Five Thousand Euros (E 35,000) (which expression shall be
deemed to include any series of claims arising out of the same event or
circumstance) exceeds Hundred Twenty Five Thousand Euros (E 125,000), it being
stipulated that if such aggregate amount is above this threshold, the Seller
shall indemnify the Purchaser for the entire amount of the claim or claims as
from the first Euro.

     7.3. LIMITATION

          The amounts payable by Seller for claims for Losses shall be limited
to an aggregate amount of 6,200,000 EUR which aggregate amount shall
automatically reduce and decline by the amount of any payment made to Purchaser
in respect of obligations of Seller under this Agreement, it being understood,
however, that such aggregate amount shall not reduce and decline by the amount
of the clean-up and demolition costs payable by Seller to Purchaser pursuant to
Section 2.3.(b) of this Agreement. For the avoidance of doubt, the indemnity
provided for in Section 6.1.6 if Purchaser is taking over more than eighty-eight
(88) employees is not subject to the limitation of this Section 7.3.

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     7.4. THIRD PARTY CLAIMS

     In the event that a third party should, after the Closing, assert a claim
or threaten to assert a claim against the Purchaser which is likely to give rise
to a claim by the Purchaser against the Seller for Losses:

          (a) The Purchaser shall notify such Third Party Claim to the Seller as
soon as practicable and at the latest within sixty (60) days from the date of
receipt of the Third Party Claim or the threat of Third Party Claim by the
Purchaser, giving details of the claim and Purchaser’s best estimate of the
amount of the Loss, which estimate is not binding upon the Purchaser.

          (b) The Purchaser shall consult with the Seller as to the handling of
any Third Party Claim. Notwithstanding Section 7.4.(a) above, in the event that
the Seller and the Purchaser do not agree on whether a given Third Party Claim
should be settled or defended, the ultimate decision shall rest with the
Purchaser notwithstanding any claim for Losses which the Purchaser could make in
that respect against the Seller;

          In this event, Purchaser may continue any proceedings at its own cost,
in which case any indemnity due by the Seller for Losses shall be limited to the
lower of the two following amounts:

               (i) the amount of the prejudice calculated as if the Third Party
Claim had been settled through an agreement offered and/or accepted by the Third
Party.

               (ii) the amount of the prejudice actually suffered by Purchaser,
as shown through a final judgement concerning the Third Party Claim.

          (c) Should the Seller decide to join in the defense of a Third Party
Claim, the Purchaser shall ensure that the Seller has full access to the
information and documents required or desirable to understand the claims made
against the Purchaser and shall consult with the Seller and take into account
the Seller’s reasonable views before making any decision in respect of the
defense or settlement of the Third Party Claim;

          (d) The Seller, inasmuch as it shall have control of any evidence or
information material to the defense against the Third Party Claim, shall fully
disclose and deliver to the Purchaser any such evidence or information.

     7.5. SET-OFF — PREJUDICE NOT GIVING ENTITLEMENT TO INDEMNIFICATION

          (a) If the Seller indemnifies the Purchaser under a claim for Losses
and if the Purchaser later receives from a third party any amount in relation to
such claim, the Purchaser shall reimburse within fifteen (15) days to the Seller
the amount received (principal, interest and other) from such third party to the
extent of the amount paid by the Seller to the Purchaser, after deduction of
costs made by the Purchaser in order to collect this amount, it being understood
that

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the costs which can be deducted by the Purchaser are limited to five percent
(5%) of the amount paid by the Seller to the Purchaser.

          (b) The following shall not be treated as a prejudice giving rise to a
claim for Losses: deficiency notices issued by the tax, social or customs
authorities which concern a simple timing difference for the payment of
mandatory contributions, for example readjustments concerning depreciation or
provisions or concerning tax provisions for deferred taxation, excluding any
connected penalties, surcharges and late payment interest.

     7.6. EXCLUSION OF LIMITATIONS

     No limitations on the Seller’s liability contained in this Agreement shall
apply to:

          (a) any claim for breach of Warranty or for breach of any other
provision of this Agreement which (or the delay on discovery of which) is the
result of deliberate misstatement or fraud of the Seller; or

          (b) any claim for breach of Warranty or for breach of any other
provision of this Agreement relating to Employees, or the indemnifications
payable by Seller as referred to in Section 6.1.6.

     Subject to the foregoing, for the avoidance of doubt, any claims for Losses
relating to a Third Party Claim shall be subject to the limitations of Sections
7.1 through 7.3.

SECTION 8

COVENANTS

     8.1. TRANSFER TAXES.

     The Purchaser shall pay any stamp, documentary, registration transfer or
similar tax (a “Transfer Tax”) imposed under applicable law in connection with
the transactions described in Section 2 hereof. The Purchaser shall also pay all
legal costs and notary fees (other than Seller’s legal costs) in connection with
such transactions. The Seller and the Purchaser shall cooperate to prepare and
timely file any tax returns required to be filed in connection with Transfer
Taxes described in the preceding sentence.

     8.2. FURTHER ASSURANCES.

     Each Party shall from time to time after the Closing take such other action
pnd, without consideration, execute and deliver such further instruments as may
be reasonably requested by the other Party to make effective the transactions
contemplated by this Agreement. Each Party shall use all commercially reasonable
efforts to consummate the transactions contemplated hereby as promptly as
practicable.

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     8.3. NON-COMPETITION.

          (a) For a period of ten (10) years from the Closing Date, the
Purchaser or its subsidiaries or affiliates shall not manufacture or market,
directly or indirectly, anywhere in the world any products which compete with
Viginiamycin or with any other products manufactured on the Site.

          (b) For a period of ten (10) years from the date of the signature
hereof, the Seller or its subsidiaries or affiliates will not carry out any
activities or assume any responsibilities with respect to the production of MPL,
and shall not develop, conduct, or form any business concerned with the process
development or manufacturing of MPL or other adjuvants in competition with the
Purchaser’s activities unless agreed to by Purchaser.

     8.4 LICENSING OF THE INTELLECTUAL PROPERTY; CONFIDENTIALITY

     The Parties agree that it is the intent of the Agreement to exclude all
Intellectual Property relating to Virginiamycin and other products manufactured
at the site by Seller which are Excluded Assets. However, to the extent that any
Intellectual Property related to Virginiamycin or other products manufactured at
the site by Seller is transferred to the Purchaser as part of the Acquired
Assets, the Purchaser hereby licenses such Intellectual Property to the Seller
on an exclusive, even as to the Purchaser, world-wide, royalty-free and
perpetual basis. In addition, the Purchaser will, and will cause its
subsidiaries and affiliates to, keep all information related to both the
excluded Intellectual Property and any Intellectual Property licensed pursuant
to this Section, confidential.

     8.5. REMOVAL OF ASSETS

     Subject to Section 8.9, the Parties agree that the Seller will have up to
and including six (6) months after Closing (i) to move all of the Excluded
Assets listed in Exhibit B, off the Site, and (ii) to terminate all maintenance
contracts related to the Excluded Assets and/or the Acquired Assets (if
applicable) pursuant to Section 2.4 (e).

     The Seller shall ensure that the removal of the Excluded Assets of the Site
after Closing will not affect the on-going activities of the Purchaser on the
Site

     8.6. INFORMATION — REPORTS

     Seller will inform and keep Purchaser informed in reasonable detail until
the Closing Date of all actions undertaken by and against Seller in respect of
its rights and obligations under this Agreement, and in particular, but not
limited to, (i) the preparations in respect of the transfer of the Site,
Activities and Acquired Assets to Purchaser on Closing Date and (ii) the status
of completion and execution of the collective dismissal of Seller’s employees as
announced to Seller’s work’s council on 17 November 2004, and the Seller shall
in this respect provide to Purchaser such information as Purchaser may
reasonably request from time to time.

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     8.7. PRESS RELEASES

     Any press release or public announcement regarding the transaction
contemplated herein shall be subject to the prior written consent of both
Parties, and, unless otherwise specified by the Purchaser, shall be made jointly
by the Parties.

     8.8. MATERNITY LEAVE/PARENTAL LEAVE

     Seller undertakes not to grant up and until the Closing Date additional
extra-legal benefits in respect of maternity leave or parental leave to
Employees as a result of which the costs related to such maternity
leave/parental leave granted to Employees would be increased after the Effective
Date.

     8.9. BUILDING 3 (GRANULATION PROCESS)

     The Seller undertakes to clean, empty of all raw materials and have the
Decommissioning of Building 3 completed by no later than December 31st, 2006.

SECTION 9

CONDITIONS

     9.1. CONDITIONS TO EACH PARTY’S OBLIGATIONS.

     The respective obligations of each Party to effect the Closing shall be
subject to the satisfaction or waiver at or prior to the Closing of the
following condition:

     There shall not be in effect any statute, regulation, order, decree or
judgment of any Governmental Authority which makes illegal or enjoins or
prevents the consummation of the transactions contemplated by this Agreement.

     9.2. CONDITIONS TO OBLIGATIONS OF THE PURCHASER.

     The obligation of the Purchaser to effect the Closing shall be further
subject to the satisfaction or waiver by the Purchaser at or prior to the
Closing of the following conditions:

          (a) Representations and Warranties. The representations and
warranties of the Seller made in this Agreement, except for the representation
and warranty made by Seller in Section 4.8.(c)(vii)(Absence) in respect of
maternity leave which shall only be made by Seller on the Effective date, shall
be repeated by Seller on the Closing Date and shall be materially true and
correct as of the Closing Date, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct on and as of such
earlier date), except where the failure to be so true and correct would not have
a material adverse effect on the transactions contemplated hereby.

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          (b) Obligations and Covenants. The Seller shall have performed in all
material respects all obligations and covenants required to be performed or
complied with by the Seller under this Agreement by the time of the Closing.

          (c) Seller shall have fully executed and completed the collective
dismissal for technical and economical reasons of 52 of its employees as
announced to Seller’s work’s council on 17 November 2004 as a result of which
the only persons assigned to the Activities on the Closing Date are the
* Omitted pursuant to our request for confidential treatment Employees referred
to in Exhibit G and Exhibit H.

          (d) The Seller shall have delivered to Purchaser a declaration from
the Social Secretariat that there are no outstanding amounts due by the Seller
in respect of the Employees.

          (e) The Seller shall have cleaned and emptied the Acquired Assets of
all raw materials, and completed the Decommissioning thereof, unless otherwise
indicated by Purchaser, according to criteria set and other conditions to be
agreed upfront between the Parties, with the exception of Building 3 which
building the Seller shall have decommissioned, cleaned, and emptied of all raw
materials by no later than December 31st, 2006.

          (f) Seller shall have obtained all consents from bondholders and banks
and shall have lifted the Mortgage subject to Article 6.1.7.

     9.3. CONDITIONS TO OBLIGATIONS OF THE SELLER.

     The obligation of the Seller to effect the Closing shall be further subject
to the satisfaction or waiver by the Seller at or prior to the Closing of the
following conditions:

          (a) Representations and Warranties. The representations and
warranties of the Purchaser made in this Agreement shall be materially true and
correct as of the Closing Date as though made on the Closing Date, except to the
extent such representations and warranties expressly related to an earlier date
(in which case such representations and warranties shall be true and correct on
and as of such earlier date) except where the failure to be so true and correct
would not have a material adverse effect on the transactions contemplated
hereby.

          (b) Obligations and Covenants. The Purchaser shall have performed in
all material respects all obligations and covenants required to be performed or
complied with by the Purchaser under this Agreement by the time of the Closing.

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SECTION 10

AMENDMENTS

     10.1. AMENDMENTS, ETC.

     This Agreement may not be amended except by an instrument in writing signed
on behalf of each of the Parties hereto. No delay or failure on the part of any
Party hereto in exercising any right, power or privilege under this Agreement
shall impair any such right, power or privilege or be construed as a waiver of
any default or any acquiescence therein. No single or partial exercise of any
such right, power or privilege shall preclude the further exercise of such
right, power or privilege, or the exercise of any other right, power or
privilege.

SECTION 11

TERMINATION

     11.1. TERMINATION PRIOR TO THE CLOSING.

     This Agreement may be terminated at any time prior to the Closing:

          (a) by mutual written consent of the Parties;

          (b) by either Party notifying the other Party if a Governmental
Authority shall have issued an injunction, order, decree or ruling or taken any
other action that permanently restrains, enjoins, or otherwise prohibits the
transactions contemplated by this Agreement and such injunction, order, decree,
ruling or other actions shall have become final and non-appealable; provided
that the Party seeking to terminate this Agreement pursuant to this Section
11.1(b) shall not have taken any action, or failed to take any action, that
would cause it to be in breach of any of its agreements, representations,
warranties or covenants set forth in this Agreement;

     11.2. EFFECTIVENESS AND EFFECTS OF TERMINATION.

     The termination of this Agreement in accordance with Section 11.1(a) or (b)
shall be effective upon notice of such termination being given by the
terminating Party to the other Party. Following such termination of this
Agreement:

          (a) The Parties shall have no further liability hereunder except that
each Party shall remain liable to the other for any material breach by it of
this Agreement;

          (b) All contracts, rights, licenses, obligations, agreements,
understandings and letters of intent to which the Parties were a party at any
time prior to the Effective Date (“Prior Rights”) shall remain in whatever force
and effect such contracts, agreements, understandings

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and letters of intent were prior to the Effective Date, without giving effect to
the execution and subsequent termination of this Agreement, or the negotiations
and course of conduct of the Parties in connection therewith. Furthermore,
neither Party shall be prejudiced, nor any Prior Rights such Persons may have be
diminished, altered or terminated, in any way by the execution and subsequent
termination of this Agreement and the negotiations and course of conduct of the
Parties and their Affiliates in connection therewith;

          (c) Sections 12.5, 12.7 and 12.12 shall survive any such termination;
and

          (d) Termination, relinquishment or expiration of this Agreement for
any reason shall be without prejudice to any rights, claims or amounts owed that
shall have accrued to the benefit of either Party prior to such termination,
relinquishment or expiration. Such termination, relinquishment or expiration
shall not relieve either Party from obligations that are expressly indicated to
survive termination or expiration of this Agreement.

SECTION 12

MISCELLANEOUS

     12.1. NOTICES.

     Any notice required or permitted under this Agreement shall be sent by
certified mail, return receipt requested, postage pre-paid, or by facsimile with
answer back to the following addresses of the Parties:

If to Seller:

Phibro Animal Health U.S., Inc.,

65 Challenger Road

3rd Floor

Ridgefield Park

NJ 07660

UNITED STATES OF AMERICA

Attention: President

and copy to:

Phibro Animal Health Corporation

65 Challenger Road

3rd Floor

Ridgefield Park

NJ 07660

UNITED STATES OF AMERICA

Attention: General Counsel

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     If to Purchaser:

     GlaxoSmithKline Biologicals S.A.

     rue de L’Institut 89

     1330 Rixensart

     BELGIUM

     Attention: Jean Stephenne, President, General Manager

     Any notice required or permitted to be given concerning this Agreement
shall be effective upon receipt by the Party to whom it is addressed.

     12.2. DESCRIPTIVE HEADINGS.

     The descriptive headings in this Agreement are inserted for convenience
only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement.

     12.3. COUNTERPARTS.

     This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement, and shall become effective when
one or more such counterparts have been signed by each of the Parties and
delivered to the other Party.

     12.4. ENTIRE AGREEMENT.

     This Agreement, entered into as of the date first written above, including
the Exhibits and Schedules (which are incorporated in this Agreement by this
reference and are made part hereof), constitutes the entire agreement between
the Parties relating to the subject matter hereof and supersedes all previous
writings and understandings relating to the subject matter hereof, including the
Letter of Intent signed on 19 August 2004 by the Purchaser. No terms or
provisions of this Agreement shall be varied or modified by any prior or
subsequent statement, conduct or act of either of the Parties, except that the
Parties may amend this Agreement pursuant to the terms of Section 10.1.

     12.5. FEES AND EXPENSES.

     Subject to Section 8.1, regardless of whether or not the transactions
contemplated by this Agreement are consummated, except as otherwise provided
herein each Party shall bear its own fees and expenses incurred in connection
with the transactions contemplated by this Agreement.

     12.6. INDEPENDENT CONTRACTORS.

     Nothing contained in this Agreement shall be deemed to constitute a
partnership or joint venture between the Seller and the Purchaser, or to
constitute one as the agent of the other. The Seller and the Purchaser shall act
solely as independent contractors, and nothing in this Agreement shall be
construed to give either Party the power or authority, express or implied, to
act for, bind, or commit the other Party.

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     12.7. GOVERNING LAW.

     This Agreement shall be deemed to have been made in Belgium and its form,
execution, validity, construction and effect shall be determined in accordance
with the laws of Belgium without regard to its conflict of laws principles.

     12.8. SPECIFIC PERFORMANCE.

     The Parties hereto agree that if any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached, irreparable damage would occur, no adequate remedy at law would exist
and damages would be difficult to determine, and that the Parties shall be
entitled to specific performance of the terms of this Agreement, in addition to
any other remedy at law or equity.

     12.9. ASSIGNMENT.

     This Agreement may not be assigned by any Party hereto without the prior
written consent of the other Party, provided, however, that the Purchaser may
assign its rights under this Agreement to any Affiliate without the consent of
the Seller; provided, that such assignment shall not be deemed to release the
Purchaser from its obligations hereunder. Any attempted assignment in violation
of this Section 12.9 shall be void.

     12.10. SUCCESSORS AND ASSIGNS.

     This Agreement, including all obligations hereunder, shall be binding upon
and inure to the benefit of the Parties hereto and their respective permitted
successors and assigns pursuant to this Agreement.

     12.11. SEVERABILITY

     In the event any portion of this Agreement shall be held illegal, void or
ineffective, the remaining portions hereof shall remain in full force and
effect. If any of the terms or provisions of this Agreement are in conflict with
any applicable statute or rule of law, then such terms or provisions shall be
deemed inoperative to the extent that they may conflict therewith and shall be
deemed to be modified to conform with such statute or rule of law. In the event
that the terms and conditions of this Agreement are materially altered as a
result of this Section 12.11, the Parties will renegotiate the terms and
conditions of this Agreement to resolve any inequities.

     12.12. COMPETENT COURTS

     Any dispute, controversy or claim arising out of or relating to this
Agreement, or the breach, termination, invalidity, or existence thereof (a
“Dispute”), shall be referred to the Belgian Courts (Commercial Court of
Nivelles).

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[THE NEXT PAGE IS THE SIGNATURE PAGE.]

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     IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first written
above in two original copies.

	 	 	 	 	 
	 	PHIBRO ANIMAL HEALTH SA.

 	 
	 	By:  	/s/ Jack C. Bendheim
 	 
	 	Name:  	Jack C. Bendheim 	 
	 	Title:  	President 	 
	 

	 	 	 	 	 
	 	GLAXOSMITHKLINE BIOLOGICALS S.A.

 	 
	 	By:  	/s/ Jean Stephenne
 	 
	 	Name:  	Jean Stephenne 	 
	 	Title:  	President, General Manager 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                        /s/ Jean-Pierre Suin
 	 
	 	Name:  	Jean-Pierre Suin 	 
	 	Title:  	Vice President

Finance & Management Services 	 

35

 

	 	 	 	 	 

TABLE OF CONTENT

	 	 	 
	EXHIBITS
	 	 
	 
	 	 
	Exhibit A
	 	Acquired Assets
	Exhibit B
	 	Excluded Assets
	Exhibit C
	 	Site Plan
	Exhibit D
	 	Letter Agreement dated September 28, 2000 between Pfizer
	 
	 	Inc., Pfizer Animal Health S.A, Philipp Brothers Chemicals,
	 
	 	Inc. SmithKline Beecham plc and SmithKline Beecham
	 
	 	Biologicals S.A
	Exhibit E
	 	List of Buildings Purchaser intends to clean-up
	Exhibit F
	 	“TP05 Facilities
Decommissioning Process — GMS Technological
	 
	 	Processes”
	Exhibit G
	 	List of Employees
	Exhibit H
	 	List of Employees — Managers
	Exhibit I
	 	Notification Letter to Environmental Authorities
	Exhibit J
	 	Intellectual Property
	 
	 	 
	SCHEDULES
	 	 
	 
	 	 
	Schedule 2.4
	 	FTE rate for Finishing Activities
	Schedule 2.4(b)(ii)
	 	Drawings
	Schedule 2.4(e)
	 	List of Maintenance Contracts related to the Acquired Assets
	Schedule 4.8(c)(iv)
	 	Employee Benefits
	Schedule 4.8(c)(vi)
	 	Remuneration
	Schedule 6.1.6
	 	Indemnification for Additional Employees Taken Over by
	 
	 	Purchaser
	Schedule 6.3
	 	Guarantee

36

 

EXHIBIT A

ACQUIRED ASSETS

TABLE OF CONTENT

	1.	 	Inventory list of movable Lab equipment in Bldg 1 and Bldg 2
	 
	2.	 	Inventory list of Offices material in buildings 1, 2, 3, 11 and 30
	 
	3.	 	Forklift (1 page)
	 
	4.	 	Inventory of Storages tanks (1 page)
	 
	5.	 	Inventory of electronic drawings (76 pages)
	 
	6.	 	Buildings 1 and 1A: main assets list and layout plan
	 
	7.	 	Building 2: main assets list and layout plan
	 
	8.	 	Building 3 (including H27): main assets list and layout plan
	 
	9.	 	Building 4: main assets list and layout plan
	 
	10.	 	Building 6: main assets list and layout plan
	 
	11.	 	Building 11: main assets list and layout plan indicating machines & tools
location

37

 

EXHIBIT A

ACQUIRED ASSETS (CONTINUED)

ANALYTICAL EQUIPMENT

Equipment and associated devices relating to MPL Development work

	a.	 	HPLC UV detector (1 chain)
	 
	b.	 	One Gas Chromatography
	 
	c.	 	One glassware machine
	 
	d.	 	Two Trebuchet weighing scales
	 
	e.	 	Two Water-baths
	 
	f.	 	One_Sonication bath
	 
	g.	 	One freeze -15degrees C
	 
	h.	 	Two vacuum ovens
	 
	i.	 	One Karl Fisher titration system
	 
	j.	 	Glassware materials

ALL HARDWARE LINKED TO MPL DEVELOPMENT WORK

38

 

EXHIBIT B

EXCLUDED ASSETS

This list is not a detailed list but a simplified list.

	1.	 	IP and Know-how relating to Virginiamycin / Semduramicin manufacturing
process technology
	 
	2.	 	All over the Seller’s site

	 	a.	 	All office Personnel Computers, Printers and related equipment
(cables, scanners, beamers, Citrix station,...
	 
	 	b.	 	All Servers and related equipment
	 
	 	c.	 	All software related to the above points a and b, among others
LIMS, GreatPlains and MAPS

Except all IT equipment (Server, PC, Screen,...) enabling standard
running operations (Cerberus, Utilities, ...) which are part of the
Acquired Assets.

	3.	 	Building 1 and Building 2

	 	a.	 	Analytical equipment, such as pHmeter, HPLC, GC, FIA, Atomic
Absorption analyzer, ...and IT related associated devices
	 
	 	b.	 	Movable Laminar hoods
	 
	 	c.	 	Centrifuges
	 
	 	d.	 	Ovens
	 
	 	e.	 	Glassware washing machine
	 
	 	f.	 	Strain selection equipment, such as NIR robot, Genesis, ...
	 
	 	g.	 	Strain storage equipment
	 
	 	h.	 	Shakers
	 
	 	i.	 	Freezers
	 
	 	j.	 	Glassware

Except equipment and associated devices relating to MPL Development
work listed in Exhibit A under “Analytical Equipment”.

	4.	 	Building 1A and 1A1

	 	a.	 	GL reactors (1.9 and 4.0 m(3))
	 
	 	b.	 	SS reactor of 2.0 m(3)
	 
	 	c.	 	Centrifuge Heine 200 kg
	 
	 	d.	 	Rotative dryers

	5.	 	Building 3

39

 

	 	a.	 	Micro and pilot fermenters and associated equipment (autoclave,
pumps, shakers, freezers, centrifuges, weighing scales,....)
located in room # 3109
	 
	 	b.	 	Olsa Evaporators (EV3001, EV 3002, EV 3003) located in room #
3200 including all instrumentation, regulation, PLC system and
all related supervision system and equipment
	 
	 	c.	 	Ortmans 7 and 8
	 
	 	d.	 	Stafac production equipment, including AZO hoper, Nauta mixer,
granulation machine, Bassano dryer, grinder, Ribbon blender, bags
filter (AAF), packing system for boxes and big bags and all
related ancillary devices, like piping, pumps, silos, weighing
scales, PLC supervision,...
	 
	 	e.	 	Niro Spray Dryer (located in H27)

	6.	 	Building 4

	 	a.	 	Centrifuges (S 4021, S 4022, S 4023, S 4024) located in B 4.1, B
4.2 & B 4.5
	 
	 	b.	 	Dryers (DR 4021, DR 4022, DR 4023, DR 4024) located in B 4.1, B
4.2 & B 4.5
	 
	 	c.	 	Funda and Sparklers
	 
	 	d.	 	Precipitation Vessels 1, 2, 3 and 4
	 
	 	e.	 	Stripping columns (C 4611A, C 4611B) located in B 4.0 & B 4.3
	 
	 	f.	 	Distillation column (D 4201)
	 
	 	g.	 	Herman Evaporators (C 4010A and C 4010B)

Including all instrumentation, regulation, PLC system and all related
supervision systems and equipments

	7.	 	Pavillon 11- offices materials from rooms # 11.125 + 11.126

	 	a.	 	5 desks
	 
	 	b.	 	5 desks-chairs
	 
	 	c.	 	8 storage cabinets (2 m high)
	 
	 	d.	 	5 storage cabinets (1 m high)
	 
	 	e.	 	1 table & 7 chairs

40

 

EXHIBIT C

SITE PLAN

41

 

 

 

EXHIBIT D

LETTER AGREEMENT DATED SEPTEMBER 28, 2000 BETWEEN PFIZER INC., PFIZER ANIMAL

HEATH S.A, PHILIPP BROTHERS CHEMICALS, INC. SMITHKLINE BEECHAM PLC AND

SMITHKLINE BEECHAM BIOLOGICALS S.A

42

 

[On Pfizer Inc. Letterhead]

September 28, 2000

Phillip Brothers Chemicals, Inc.

One Parker Plaza

Fort Lee, New Jersey 07024

     Re: Sale of Medicated Feed Additives Products

Gentlemen:

We refer to an Asset Purchase Agreement among Pfizer, Inc. the Asset Selling
Corporations named therein (hereinafter collectively called “Pfizer”) and
Philipp Brothers Chemicals, Inc. (“PBCI”) (the “APA”) dated the same date as
this letter agreement. This letter agreement is being entered into in connection
with, and as a condition of PBCI’s execution of the APA.

We also refer to a Stock and Asset Purchase Agreement between SmithKline Beecham
plc (“SB”) and Pfizer Inc. dated as of November 23, 1994 (the “SAPA”), and to
the Rixensart Site Agreement between SmithKline Beecham Biologicals S.A. (“SBB”)
and SmithKline Beecham Animal Health S.A. (in the process of changing its name
to Pfizer Animal Health S.A, “PAH”) dated as of January 19, 1995 (the “Rixensart
Site Agreement”) and a Notarial Deed covering Vente Immeubles (Sale of Real
Estate) dated February 8, 1995 documenting the sale of a biologicals production
facility in Rixensart, Belgium (hereinafter called the “Rixensart Site”) from
SBB to PAH (the “Contract of Sale”), both of which documents were entered into
as part of the closing under and to implement the SAPA. We also refer to a
Settlement Agreement dated November 12, 1999 between Pfizer and SB; letter
agreements dated July 13, 1998, October 23, 1998 and March 13, 2000 between
Pfizer and SB; a letter dated 24th January 2000 from SB to Pfizer, and to a
letter dated January 17, 2000 from Pfizer to SB (hereinafter collectively called
the “Remediation Agreements”) which refer to SB’s agreement to remediate soil
and groundwater contamination for which a claim was made by Pfizer in its July
14th 1997 letter to SB pursuant to Section 7.3 of the SAPA.

	 	1.	 	Pfizer and PAH hereby assign to PBCI or its designee, all of Pfizer’s
and PAH’s rights and obligations under the SAPA to the extent that
said rights and obligations relate to assets that are the subject of
the APA, and PBCI hereby accepts such assignment of rights and
obligations thereunder, all of the foregoing to be effective upon the
closing of the APA.

 

 

	 	2.	 	PAH hereby assigns to PBCI or its designees all of its rights and
obligations under the Rixensart Site Agreement and the “Remediation
Agreements,” and PBCI hereby accepts such assignment of rights and
obligations and agrees to perform all those obligations of Pfizer
under said agreements, all of the foregoing to be effective upon the
closing of the APA. Notwithstanding the foregoing, it is explicitly
agreed that PBCI is not succeeding to any default in performance by
Pfizer under said agreements.
	 
	 	3.	 	Pfizer and PAH hereby (i) represent and warranty that each of them has
performed all of their obligations required to be performed under the
SAPA and the Remediation Agreements up to the date hereof and (ii)
covenant and agree that they have performed or will have performed all
of such obligations required to be performed under the SAPA and the
Remediation Agreements as of the date of the closing of the sale of
the Rixensart Site to PBCI or its designee, in each case except for
those continuing obligations that arise after or are due to be
performed following the Closing of the APA and which obligations PBCI
will assume in order to “step into Pfizer’s shoes” under the SAPA and
the Remediation Agreements.
	 
	 	4.	 	SB agrees to waive its right of first refusal in respect of the sale
of the Rixensart Site to PBCI or its designee pursuant to the terms of
the APA on the condition that PBCI agrees that the contract of sale
and the notarial deed by which PAH conveys the Rixensart Site to PBCI
or its designee shall contain a right of first refusal in favor of SB
in substantially the same form as the “Right of First Refusal”
provision of the Contract of Sale and the notarial deed. PBCI agrees
further to cause its representatives to sign or acknowledge the new
contract of sale containing such a provision.
	 
	 	5.	 	SB acknowledges that it remains responsible for the effects of the
investigation and remediation it is and will be conducting of the
Rixensart, Belgium facility upon the property or operations at that
facility. PBCI represents that (i) it will operate the Rixensart,
Belgium facility in substantially the same manner as PAH, and intends
to continue to pump water from process wells in the Cretaceous
aquifer, and (ii) will not unreasonably withhold consents required by
SB and, upon request by SB, will provide such assistance reasonably
necessary to allow SB to complete the above-mentioned investigation
and remediation in accordance with the requirements of the local
environment authorities; provided that PBCI shall not be required to
expend or incur any out-of-pocket costs or expenses (other than
employee salaries, overhead and similar internal costs) in connection
with its providing any such consents or assistance. SB further
acknowledges that, as concerns that investigation and remediation, SB
will (a) keep PBCI reasonably informed, on a regular, periodic basis,
including notifying PBCI in advance of meetings with environmental
regulatory authorities, (b) provide to PBCI all material environmental
data and reports and all correspondence to and from environmental
regulatory authorities, and (c) afford PBCI a reasonable opportunity
to provide input on significant decisions concerning the investigation
and remediation to be conducted at the facility.

2

 

	 	6.	 	This letter agreement shall be governed by the laws of the State of
New York, without regard to its conflicts of laws principles.

Please indicate your acceptance of the foregoing by signing the enclosed
duplicate copies of this letter agreement under the words “Agreed to and
Accepted” and returning them to the undersigned. The parties intend that this
letter agreement shall become effective upon SB’s consent and agreement, as set
forth below, and upon the closing of the APA.

	 	 	 	 	 	 	 	 	 	 	 
	Very truly yours,	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Pfizer Inc.	 	 	 	PfizerAnimal Health S.A.  
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	[signature illegible]
	 	 	 	By:
	 	[signature illegible]	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Agreed to and Accepted:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Philipp Brothers Chemicals, Inc.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	         /s/ Jack C. Bendheim	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	  President	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	SmithKline Beecham plc and SmithKline
Beecham Biologicals S.A. hereby consent
and agree to the foregoing:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	SmithKline Beecham plc	 	 	 	SmithKline Beecham Biologicals S.A.
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	[signature illegible]
	 	 	 	By:
	 	/s/ Jean Stephenne	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	General Counsel
	 	 	 	Title:
	 	President General Manager	 	 
	 

	 	 
	 	 	 	 	 	 	 	 

3

 

EXHIBIT E

LIST OF BUILDINGS PURCHASER INTENDS TO CLEAN-UP

B3

B4

P4

P5

H5

H27

H28

B69

H19

H19 bis

43

 

EXHIBIT F

“TP05 FACILITIES DECOMMISSIONING PROCESS — GMS TECHNICAL PROCESSES”

Outline of Decommissioning of operational units and buildings

	–	 	Remaining production will have to be halted and each process area and
utility put into a safe, decontaminated state of an indefinite period.
	 
	–	 	This will involve an initial cGMP clean as would normally be carried out on
the equipment for the annul shutdown
	 
	–	 	This will be followed by an intrusive clean of the equipment infrastructure
and building surfaces to remove all active and potentially hazardous
materials to agreed threshold levels. Threshold levels may be defined
within the Material Safety Data Sheets or a level may need to be agreed
with quality or an appropriate environmental agency.
	 
	–	 	When the decontamination has been completed the site will need to be placed
in a maintenance/security mode. The buildings will still contain the
process equipment, lighting, fire alarms, fire sprinklers, power
distribution, telephone system, structural walls, HVAC unit an basic duct
work. It will be structurally sound, weather proof and safe for controlled
visits. The only categories are the assets taken by Phibro for its transfer
of technology.
	 
	–	 	The process and utilities production equipment will be subject to a regular
maintenance schedule to prevent the ingress of contaminants or corrosive
material and to ensure that moving parts are operational. The
Maintenance/Security mode will continue until a decision is reached about
the future of the site.

44

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

TP05 FACILITIES DECOMISSIONING PROCESS

     GMS TECHNICAL PROCESSES

Any queries or comments on this Process are to be forwarded to Nigel Armitage — ETCM

	 	 	 	 
	VERSION

	 	1	 
	DATE 
	 	March 2004	 
	REASON

	 	Original issue	 

Copyright (C) 2002 GlaxoSmithKline Group Of Companies. All Rights Reserved

 

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

TP05 Facilities Decomissioning Process

CONTENTS

	 	 	 	 	 	 	 	 	 
	Introduction
	 	 	1	 	 	 	 	 
	Target Audience
	 	 	1	 	 	 	 	 
	Purpose
	 	 	2	 	 	 	 	 
	The GSK Facilities decommissioning process will deliver
	 	 	2	 	 	 	 	 
	The GSK Facilities decommissioning process will not deliver
	 	 	3	 	 	 	 	 
	Benefits
	 	 	3	 	 	 	 	 
	Scope
	 	 	3	 	 	 	 	 
	Triggers
	 	 	3	 	 	 	 	 
	Good Practice Principles
	 	 	4	 	 	 	 	 
	Decommissioning Process Overview
	 	 	5	 	 	 	 	 
	Phase 1 – Planning
	 	 	5	 	 	 	 	 
	Step Overview — Input/Process/Output Diagram
	 	 	6	 	 	 	 	 
	Planning Phase Objectives
	 	 	7	 	 	 	 	 
	Timing
	 	 	7	 	 	 	 	 
	Documentation
	 	 	7	 	 	 	 	 
	Templates, Tools & Checklists
	 	 	7	 	 	 	 	 
	Detailed Planning Steps
	 	 	8	 	 	 	 	 
	Phase 1 – Planning — RACI Chart
	 	 	10	 	 	 	 	 
	Phase 2 – Design
	 	 	11	 	 	 	 	 
	Step Overview — Input/Process/Output Diagram
	 	 	11	 	 	 	 	 
	Planning Phase Objectives
	 	 	11	 	 	 	 	 
	Timing
	 	 	11	 	 	 	 	 
	Templates, Tools & Checklists
	 	 	11	 	 	 	 	 
	Detailed Design steps
	 	 	12	 	 	 	 	 
	Phase 2 – Design — RACI Chart
	 	 	13	 	 	 	 	 
	Phase 3 – Implementation
	 	 	14	 	 	 	 	 
	Step Overview — Input/Process/Output Diagram
	 	 	14	 	 	 	 	 
	Implementation Phase Objectives
	 	 	14	 	 	 	 	 
	Timing
	 	 	14	 	 	 	 	 
	Templates, Tools and Checklist
	 	 	15	 	 	 	 	 
	Detailed Implementation Steps
	 	 	16	 	 	 	 	 
	Phase 3 – Implementation RACI Chart
	 	 	18	 	 	 	 	 
	Phase 4 – Close Out
	 	 	19	 	 	 	 	 
	Step Overview — Input/Process/Output Diagram
	 	 	19	 	 	 	 	 
	Close Out phase objectives
	 	 	19	 	 	 	 	 
	Timing
	 	 	19	 	 	 	 	 
	Detailed Implementation Steps
	 	 	19	 	 	Tips
 A planned, phased release of the facility or area to the decommissioning project team can accelerate project timings.
	Phase 4 – Close Out RACI Chart
	 	 	20	 	 	 	 	 
	Appendices
	 	 	 	 	 	 	 	 
	Appendix I — Site closure process list
	 	 	21	 	 	 	 	 
	Appendix II — Decommissioning options (levels 1 – 4)
	 	 	23	 	 	 	 	 

TP05 Facilities Decomissioning Process

-2-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

GSK FACILITIES DECOMMISSIONING PROCESS

INTRODUCTION

This global process provides a standardised approach to the sequence, methods
and documentation of decommissioning all GSK facilities and assets.

The process embodies and builds upon experience and good practices previously
developed and implemented on facilities decommissioning projects. Application of
this process on future facilities decommissioning projects will generate
continuous improvement through sharing of knowledge and good practices.

Decommissioning a facility requires that good project management practice is
applied. This Technical Process aligns with the GMS Project Management Standard.
In applying this process it is assumed that the appointed Project Manager is
fully conversant with and applies the GMS Project Management Standard.

	–	 	Effective operation of this process assumes that the following are in
place:
	 
	–	 	A decision to cease operations at the facility or asset has been made and
is communicated
	 
	–	 	A schedule for the transfer or cessation of products made within the
facility or asset
	 
	–	 	Resources will be made available to implement the decommissioning process.
Where possible it is preferred that existing site staff fully participate
in the planning and implementation of the process
	 
	–	 	An accurate and up-to-date asset register

This process interfaces and aligns with several related processes: See Appendix I

	–	 	Site closure processes. (There are several processes and these are
referenced in Appendix I)
	 
	–	 	GMS Project Management Standard — to ensure good project management
throughout a facilities decommission project
	 
	–	 	Capital approval (PIP) process — to obtain the funding required in order to
undertake facilities decommissioning
	 
	–	 	Product transfer process
	 
	–	 	Global supply chain planning processes

TARGET AUDIENCE

	 	 	 
	A number of key groups have been identified as users of this process. These
groups are required to familiarise themselves with the details of the process
before commencing the decommissioning project.

	 	Tips

TIP use PM STD

Tool 3D
	In addition, there are a potentially large number of groups that are required to
be aware of this process as they will be undertaking activities that directly
interface with the decommissioning project. It is recommended that the
decommissioning project manager includes awareness training for the stakeholders
in this process as part of stakeholder identification.
	 	 

-3-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

TP05 Facilities Decomissioning Process

	 	 	 	 	 
	USERS:	 	 
	-

	 	Decommissioning
	 	project managers
	-

	 	Site engineering
	 	managers
	-

	 	Decommissioning
	 	project sponsor
	-

	 	Decommissioning
	 	project steering group
	-

	 	Site directors	 	 
	AWARENESS :	 	 
	-

	 	Site Leadership Team	 	 
	-

	 	Regional Supply
	 	Directors (RSD’s)
	-

	 	Network strategy
	 	leaders
	-

	 	Asset disposal
	 	managers
	-

	 	All project managers	 	 
	-

	 	ETCM & Regional

Engineering Directors	 	 
	-

	 	Environmental Health

& Safety	 	 
	-

	 	Quality Assurance.	 	 
	-

	 	Finance	 	 
	-

	 	Procurement	 	 
	-

	 	Corporate Risk Management	 	 
	-

	 	Legal	 	 
	-

	 	Real Estate & Facilities

Management	 	 
	-

	 	Corporate

Communications	 	 
	-

	 	Regulatory	 	 

PURPOSE

The purpose of this process is to ensure that GSK facilities and assets are
decommissioned in a safe, controlled, compliant and ethical manner thereby
protecting GSK long-term interests and ongoing operations. The correct
application of this process delivers the most benefit to GSK and minimises the
business operations risk.

	 	 	 	 	 
	-

	 	The GSK Facilities Decommissioning Process will deliver :
	 	Tips

Link to records retention site
	 
	 	 	 	 
	-

	 	Standardised approach to managing facilities decommissioning that is
compliant with internal & external standards	 	 
	 
	 	 	 	 
	-

	 	Options for the decommissioning of the facility and assets to meet the
requirements of the business case after cease of business. See appendix II	 	 
	 
	 	 	 	 
	-

	 	An asset disposal strategy	 	 
	 
	 	 	 	 
	-

	 	Decontamination of the facility and assets to a pre-defined level. See
appendix ll.	 	 
	 
	 	 	 	 
	-

	 	Residual risks & liabilities for facilities and equipment assets are
identified, evaluated, and minimised	 	 
	 
	 	 	 	 
	-

	 	Facility and asset historical information (for due diligence and EHS
requirements).	 	 

-4-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

	–	 	Effective assessment and control of scope, costs and schedule
	 
	–	 	Links to key tools and documents that have been developed on previous
facilities decommissioning projects
	 
	–	 	Mechanism to ensure key learning’s captured & incorporated in future
practice
	 
	–	 	Facilities and decommissioning project files archived in accordance with
GSK policy and good practice
	 
	–	 	Evaluation of proposed decommissioning scenarios against agreed business
strategy Identification of external agencies environmental health and
safety to agree methods of decontamination disposal

TP05 Facilities Decomissioning Process

THE DECOMMISSIONING PROCESS WILL NOT DELIVER

	–	 	An assessment of consequential impacts e.g.:

	 	–	 	On local or national economies
	 
	 	–	 	On security of supply
	 
	 	–	 	Process, product or technology transfer
	 
	 	–	 	HR issues

	–	 	Site exit communications
	 
	–	 	Regulatory & commercial impacts of ceasing manufacture
	 
	–	 	Product Archive documentation and samples for products
	 
	–	 	Site records (HR, Finance, e.g site asset register,) IT decommissioning
process
	 
	–	 	Planning title and site legal status
	 
	–	 	Post cease of manufacture supply chain logistics issues e.g sample
retention

BENEFITS

The benefits of the facilities decommissioning process will be achieved through
a consistent approach which provides:

	–	 	Managed risk, cost and schedule
	 
	–	 	Knowledge and best practice shared and retained
	 
	–	 	Optimised process and resource utilisation
	 
	–	 	Clear roles, responsibilities, boundaries and interfaces
	 
	–	 	Improved communication and visibility of activities
	 
	–	 	Documentation trail
	 
	–	 	Reduction of re-work and waste

SCOPE

This process applies to all GSK facilities and assets and all individuals
involved in facility and asset decommissioning.

The document is primarily aimed at major facility decommissioning projects,
however, the process steps and tools can be applied at all sizes of project.

For the purposes of this process, facilities and assets shall include:

	–	 	Buildings

-5-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

	–	 	Land
	 
	–	 	Engineering systems and utility infrastructure
	 
	–	 	Equipment and equipment systems e.g. packaging lines. Note: this also
includes distributed and individual plant control and operating systems
which do not form part of the normally supported facility IT infrastructure
(e.g. DCS and PLC systems)

TRIGGERS

Operation of the Facilities Decommissioning process can be triggered by:

	–	 	A business decision to cease operations
	 
	–	 	A catastrophic event e.g. fire, explosion etc

TP05 Facilities Decomissioning Process

GOOD PRACTICE PRINCIPLES

Application of the following Good Practice Principles will help users to secure
maximum benefit from the process.

	 	 	 	 	 
	1.

	 	Decommissioning project management should consult with Regional and Central
functions as early as possible in the process.	 	 
	 
	 	 	 	 
	2.

	 	To minimise duplication, the principles and tools identified in the PM
Standard have been referenced and should be used. Links to the appropriate
section of the PM Standard are incorporated within the relevant process
step.
	 	Tips
	 
	 	 	 	 
	3.

	 	All required documentation should be identified and located early in the
process. Furthermore, decommissioning project documentation should be
stored electronically, preferably using LiveLink or a designated off-site
server.
	 	Link to records
retention site
	 
	 	 	 	 
	4.

	 	Existing personnel with detailed knowledge of the facilities should be
involved in the decommissioning process- don’t let GSK’s knowledge assets
disappear without documenting.
	 	Link to
Procurement
	 
	 	 	 	 
	5.

	 	Facts and data should be used to evaluate alternative project proposals and
alternative solutions for decommissioning.	 	 
	 
	 	 	 	 
	6.

	 	Consideration should be given to early input from professional services
contractors and specialist decommissioning and decontamination service
providers.	 	 

-6-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

TP05 Facilities Decomissioning Process

-7-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

DECOMMISSIONING PROCESS OVERVIEW

	 	 	 
	Planning
	1.1

	 	Appoint a decommissioning project manager and secure resources
	1.2

	 	Agree prioritised project objectives
	1.3

	 	Conduct Initial Decommissioning Assessment
	1.4

	 	Identify contractors for professional services (if required)
	1.5

	 	Evaluate external influences on scope & schedule
	1.6

	 	Recommended decommissioning proposals
	1.7

	 	Prepare +/- 25% (class 2) cost estimate and funding proposal
	Design
	2.1

	 	Identify and select contractors for professional services (if required)
	2.2

	 	Produce a detailed decommissioning scope of works
	2.3

	 	Prepare the control budget and update project schedule
	2.4

	 	Establish project control procedure
	Implement
	3.1

	 	Formally transfer facility to project
	3.2

	 	Engage decommissioning resources
	3.3

	 	Carry out decommissioning and decontamination
	3.4

	 	Dismantle systems and equipment
	3.5

	 	Dispose of assets
	3.6

	 	Carry out demolition of facilities
	3.7

	 	Dispose of waste
	3.8

	 	Establish maintenance security mode
	3.9

	 	Release decommissioned facility
	Close-out
	4.1

	 	Complete close-out activities as defined in PM standard
	4.2

	 	Incorporate learnings into decommissioning process
	4.3

	 	Realise benefits from asset disposal
	4.4

	 	Document facility and retained assets change in status
	4.5

	 	Produce duty of care audit trail

TP05 Facilities Decomissioning Process

PHASE 1 : PLANNING

-8-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

STEP OVERVIEW — INPUT/PROCESS/OUTPUT DIAGRAM

INPUT

	–	 	Business case for the cessation of operating/site closure business case
	 
	–	 	“Pre-spend budget”
	 
	–	 	Existing Asset Inventory Data
	 
	–	 	Existing Drawings
	 
	–	 	Inventory of materials & safety data sheets for past and present products
	 
	–	 	Knowledge of and access to relevant information sources: e.g. Previous
decommissioning close-out reports
	 
	–	 	Decontamination safety acceptance criteria
	 
	–	 	Relevant GSK standards
	 
	–	 	Regulatory requirements
	 
	–	 	Knowledge of site, regional and central organisational structures, roles,
responsibilities and interfaces
	 
	–	 	Existing Facility Management data
	 
	–	 	Planning Title & Legal status of site

PROCESS

	1.1	 	Appoint a decommissioning project manager and secure resources
	 
	1.2	 	Agree prioritised project objectives
	 
	1.3	 	Conduct Initial Decommissioning Assessment
	 
	1.4	 	Identify contractors for professional services (if required)
	 
	1.5	 	Evaluate external influences on scope & schedule
	 
	1.6	 	Recommended decommissioning proposals
	 
	1.7	 	Prepare +/- 25% (class 2) cost estimate and funding proposal

OUTPUT

	–	 	Decommissioning strategy and high level scope of work definition
	 
	–	 	Team and organisation strategy.
	 
	–	 	Identified key site resources to deliver the facilities decommissioning
	 
	–	 	Schedule
	 
	–	 	Site Assess impact on site infrastructure impact assessment infrastructure
	 
	–	 	Facilities Plan for knowledge transfer
	 
	–	 	An Executive Summary authorised by the Site Director
	 
	–	 	Risk analysis
	 
	–	 	Business case recommendations endorsed by the project sponsor
	 
	–	 	Detailed cash flow, and cost summaries (cost estimates +/- 25%)
	 
	–	 	Recommended technical solution and evaluation of alternatives considered
	 
	–	 	Project plan sufficiently developed to support the +/- 25% cost estimate
	 
	–	 	Funding for phases 2 released
	 
	–	 	Agree procurement plan
	 
	–	 	Agree site hand-over strategy

-9-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

TP05 Facilities Decomissioning Process

OBJECTIVES :

Project planning ensures that project-specific strategies are developed,
implemented, communicated, and constructed around the key project management
elements. Project planning is used to:

	–	 	Define prioritised project objectives
	 
	–	 	Document project planning assumptions
	 
	–	 	Document key decisions regarding alternatives considered
	 
	–	 	Facilitate communication among stakeholders
	 
	–	 	Guide project delivery

TIMING

Planning of the decommissioning must begin as early as possible, taking into
account product transfer schedules and the site closure announcement and
subsequent consultation period. For most decommissioning projects, the planning
phase should be of around 3 months duration.

DOCUMENTATION

Details of the templates, tools and checklists to be used in the Planning Phase
can be found in the Decommissioning livelink area.

TIP: Also refer to the Project Management Standard roadmap for more information
on the work needed to meet the appropriate standard of documentation.

TEMPLATES, TOOLS & CHECKLISTS

Documents associated with phase 1 — Planning are contained in the following
Livelink folder:

	–	 	Links to other processes
	 
	–	 	Site exit processes — See appendix I
	 
	–	 	Maintenance management.
	 
	–	 	Finance assets tracking process
	 
	–	 	Save-track & capex-trak processes
	 
	–	 	Supply Chain Planning (SCP) process.
	 
	–	 	Site S&OP process
	 
	–	 	Procurement Global disposal framework agreement

-10-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

TP05 Facilities Decomissioning Process

DETAILED PLANNING STEPS:

1.1 APPOINT A DECOMMISSIONING PROJECT MANAGER AND SECURE RESOURCES

Following the business decision to cease operations, the project manager should
be selected and appointed. Ideally, candidates should be keen to take on the
role, experienced in project management methodology and knowledgeable about the
assets and facilities that will be decommissioned.

The project manager will then take responsibility for the decommissioning
programme of work.

The decommissioning project manager’s first task should be to determine and
secure the resources needed to undertake the planning phase.

1.2 AGREE PRIORITISED PROJECT OBJECTIVES

	 	 	 
	The project objectives guide numerous decisions required throughout a project.
These decisions involve tradeoffs between time, cost, quality, and various
technical and administrative performance characteristics.
	 	 
	 
	 	 
	Some of the objectives may conflict, and the Customer’s preference for one
versus others can significantly affect the project strategy. For example,
highest quality, lowest cost, and shortest schedule generally are conflicting
objectives. Therefore, the project objectives must be prioritised.
	 	 
	 
	 	 
	The Customer (with help from the Project Sponsor, RED, and PM) defines the top
project objectives and identifies the primary project driver (e.g. schedule,
cost, quality or minimum disruption to operations). The prioritised objectives
must be stated clearly in terms that produce real, meaningful, measurable, and
attainable goals. To obtain a clear focus on project goals, the project
objectives should include no more than five prioritised objectives.
	 	 
	 
	 	 
	Safety is of the highest importance for all GSK decommissioning projects. Safety
always has the highest priority and will never be compromised in favour of any
other project objective. For more information on safety as a prioritised
objective, see Tool 2E, Project Plan Instructions.
	 	 
	 
	 	 
	The prioritised objectives set success criteria for the project delivery to the
Customer. At the end of the project, the Customer evaluates the level of success
in achieving the objectives by completing a Customer Satisfaction Survey (see
Tool 2B).

	 	Tips

Make an early
assessment. There
could be
significant cost
associated with
rectifying a pod
asset data base

1.3 CONDUCT INITIAL DECOMMISSIONING ASSESSMENT

An initial decommissioning assessment is carried out by the project team to
establish the readiness of the site to implement decommissioning. The assessment
comprises an evaluation of the current facility and asset status, development of
decommissioning options and risk assessment. Key elements will include a review
of existing documentary records and procedures which will assist decommissioning
implementation and identification of key personnel.

Example recommended structures for the initial decommissioning assessment can be
found in the documents from Dartford and Speke located in phase 1 — planning
Livelink folder.

-11-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

	 	 	 
	TP05 Facilities Decomissioning Process
	 	 
	 
	 	 
	INITIAL ASSESSMENT STEP
	 	 
	 
	 	 
	Develop decommissioning options in line with disposal strategy(Levels 1-4)
	 	 
	 
	 	 
	Conduct technical risk assessment
	 	 
	 
	 	 
	Develop proposed procurement plan
	 	 
	 
	 	 
	Stakeholder analysis document
	 	 
	 
	 	 
	Identify key personnel
	 	 
	 
	 	 
	Plan retention of key personnel

	 	Tips

Look in AAR’s
	 
	 	 
	Desktop study on the impact of each level of the decommissioning proposal
	 	 
	 
	 	 
	Identify site specific decommissioning procedures required
	 	 
	 
	 	 
	Analyse potential project risks by applying established risk evaluation methods
	 	 
	 
	 	 
	Develop a Marketing Plan
	 	 
	 
	 	 
	TOOL OR REFERENCE SOURCE
	 	 
	 
	 	 
	Appendix II Flow chart
	 	 
	 
	 	 
	Technical risk assessment tool
	 	 
	 
	 	 
	PM standard element 10.4 & Tool 10D
	 	 
	 
	 	 
	PM standard tool 3E
	 	 
	 
	 	 
	Develop Checklist from Dartford and Speke info
	 	 
	 
	 	 
	What tips / recommendations are there to retain key personnel from other sites?

	 	Link to
procurement
	 
	 	 
	Levels as defined in appendix II for decommissioning options
	 	 
	 
	 	 
	See Dartford and Speke documents in Livelink for examples
	 	 
	Refer to the Project Management Standard element 8 and relevant tools on risk
management

	 	Create contents
list, headers and
questions using
Dartford PIP
package as basis
	See Dartford / Speke examples in Livelink
	 	 
	 	 	 

1.4 IDENTIFY CONTRACTORS FOR PROFESSIONAL SERVICES (IF REQUIRED)

From the initial scope of work and procurement plan, identify work packages
suitable for allocation to professional services contractors. Contractors should
be selected from the list of preferred suppliers

1.5 EVALUATE EXTERNAL INFLUENCES ON SCOPE & SCHEDULE

Review recommended decommissioning proposal against the prioritized project
criteria defined in the Project Management roadmap

1.6 RECOMMEND DECOMMISSIONING PROPOSAL

Carry out a cost-benefit analysis for the disposal and/or retention of
facilities and assets and recommend a preferred solution

Verify at a high level that the recommended proposal is feasible.

1.7 PREPARE FEASIBILITY COST ESTIMATE AND FUNDING PROPOSAL

Prepare the feasibility (+/- 25%) cost estimate in accordance with the good

-12-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

practices laid down in the PM standards (insert link to PM standards)(example
cost estimates from historical projects in LL)

Secure appropriate funding approval using established finance procedure

TP05 Facilities Decomissioning Process

PHASE 1 — PLANNING — RACI CHART

STEP

	1.1	 	Appoint a Decommissioning Project Manager and Secure Resources
	 
	1.2	 	Agree Prioritised Project Objectives
	 
	1.3	 	Conduct Initial Decommission-ing Assessment
	 
	1.4	 	Identify Contractors for professional services(if required)
	 
	1.5	 	Evaluate external influences on scope & schedule
	 
	1.6	 	Recommend decommission-ing proposal
	 
	1.7	 	Prepare +/- 25% cost estimate and funding proposal

PERSON RESPONSIBLE

Site Director

& ETCM

RED

Project Manager

Project Manager

-13-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

Project Manager

Project Manager

Project Manager

Project Manager

PERSON

ACCOUNTABLE

Project Sponsor for above site or global projects

Site Director for site initiated projects

Site Director or Sponsor

Site Director or Sponsor

Site Director or Sponsor

Site Director or Sponsor

Site Director

-14-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

Site Director

PERSON CONSULTED

Site Leadership Team

Relevant specialists, regional and central functions as determined by ETCM RED

Site Leadership Team

Project team members Key site personnel

Project team

Procurement

Relevant specialists

Project team

Relevant specialists

Site Leadership Team

Relevant specialists, regional and central functions as determined by ETCM RED

Project team Site finance

PERSON INFORMED

For projects >L250k expenditure:

ETCM RED

Regional EHS

Regional QA

Regional Risk Management

Procurement

Real estate

Legal

Site Management Team.

Site personnel

Site Leadership Team.

Site personnel.

For projects >L250k expenditure:

Regional functions

Project sponsor

-15-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

Site Leadership team.

For projects > L250k expenditure:

Regional Finance

ETCM RED

Procurement

TP05 Facilities Decomissioning Process

PHASE 2 — DESIGN

STEP OVERVIEW — INPUT/PROCESSES/OUTPUT DIAGRAM

-16-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

INPUT

	–	 	Business case justification endorsed by the project sponsor
	 
	–	 	Confirmation of site sale strategy
	 
	–	 	An Executive Summary authorised by the Site Director.
	 
	–	 	Planning & Legal status of site
	 
	–	 	Risk analysis
	 
	–	 	Cash flow, and cost summaries (cost estimates +/- 25%)
	 
	–	 	Funding for phase 2.
	 
	–	 	Recommended decommissioning proposal and evaluation of alternatives
considered
	 
	–	 	An implementation plan sufficiently developed to support the +/- 25% cost
estimate
	 
	–	 	Team and organisation strategy.
	 
	–	 	Schedule
	 
	–	 	Assess impact on site infrastructure. Plan for knowledge transfer

PROCESS

	2.1	 	Identify and select contractors for professional services (if required)
	 
	2.2	 	Produce a detailed decommissioning scope of works
	 
	2.3	 	Prepare the control budget and update project schedule Establish project
control procedure

OUTPUT

	–	 	Reconfirmed business justification endorsed by the project sponsor
	 
	–	 	Class 4 control budget, associated work breakdown structure (See Dartford
document) and schedule
	 
	–	 	Confirmed recommended technical solution
	 
	–	 	Updated team and organisation strategy
	 
	–	 	GSK resources utilisation and run-down plan for decommissioning
	 
	–	 	Updated risk analysis.
	 
	–	 	Site infrastructure impact assessment
	 
	–	 	Professional services contractors appointed
	 
	–	 	Detailed decommissioning scope of works and implementation plan
	 
	–	 	Specifications and bid packages
	 
	–	 	Site specific decommissioning procedures
	 
	–	 	Previously agreed procurement plan reviewed, update and re-approved
	 
	–	 	Agreed site handover plan
	 
	–	 	Detailed contamination assessment
	 
	–	 	Funding

TP05 Facilities Decomissioning Process

-17-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

DESIGN PHASE OBJECTIVES

	 	 	 
	To refine the decommissioning scope, cost estimate and work breakdown structure
sufficient to enable effective cost control in accordance with good practice as
defined in the PM standard.
	 	 
	 
	 	 
	To complete the procurement plan and determine the types of contractors required
for professional services, decommissioning, demolition and asset disposal.

	 	Tips

Also see decommissioning 
	In addition, if the business case requires facility or asset sale(s),
information packs to support due diligence shall be developed.
	 	procurement folder in Livelink
	 
	 	 
	TIMING
	 	 
	 
	 	 
	If the decision to decommission has been included in an approved business case
for ceasing manufacture, phase II, decommissioning design can commence in
parallel with step I, the planning phase. Design should not commence until the
business case to cease manufacture has been approved.

	 	This can shorten

the project

schedule
	 
	 	 
	For most ‘whole site’ decommissioning projects, the design phase should be
around 6 months duration. However the timescale must be sufficient to allow
completion of the project in accordance with the project delivery plan and
objectives declared in the decommissioning strategy document.
	 	 
	 
	 	 
	TEMPLATES, TOOLS & CHECKLISTS
	 	 
	 
	 	 
	Documents associated with phase 2 — Design are contained in the following
Livelink folder:
	 	 
	 
	 	 
	GETTING STARTED
	 	 

2.1 IDENTIFY AND SELECT CONTRACTORS FOR PROFESSIONAL SERVICES (IF REQUIRED)

Using the standard bid package protocols, develop bid packages for professional
services contractor(s) as appropriate to the scope of the decommissioning
project.

Evaluate professional services contractor(s) bid proposals using the practices
and tools defined in PM standard

It is recommended that disposal and demolition expertise is sought as early as
possible in the design phase.

2.2 PRODUCE A DETAILED DECOMMISSIONING SCOPE OF WORKS

A detailed decommissioning assessment is carried out to develop a comprehensive
scope of works for individual assets, systems and facilities. At this level, as
well as revisiting the phase 1 outputs, the assessment should include
decontamination and asset disposal plans, evaluation of external influences and
input from GSK central functions as appropriate.

A recommended structure for the elements to be considered in developing the
scope of works is:

TP05 Facilities Decomissioning Process

-18-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

ELEMENT

	–	 	Conduct decommissioning detailed investigation. Review & Confirm options
for decommissioning by asset and/or system as appropriate
	 
	–	 	Develop decommissioning project team and organisation strategy
	 
	–	 	Develop Decontamination Plan
	 
	–	 	Determine site assets disposal routes
	 
	–	 	Determining project-specific decommissioning documentation requirements.
	 
	–	 	Perform GSK Central Functions Decommissioning Review
	 
	–	 	Re-evaluate external influences on scope & schedule
	 
	–	 	Prepare contractor detailed scope specification.
	 
	–	 	Develop a Detailed Cost Plan

TOOL OR REFERENCE SOURCE

Speke process flow to be referred to as good practice example.

PM standard ref element 6

Decontamination master plan template and checklist (Dartford / Speke)

	 	 	 
	See Dartford for tools / templates. Develop a checklist for asset disposal e.g.
equipment transfer, sale, destruction.

	 	Tips

See livelink for

example project

control procedures
	 
	 	 
	Decontamination documentation checklist + guidance to be developed. Examples
from sites on Livelink.
	 	 
	 
	 	 
	PM standard ref tool 10Z
	 	 
	 
	 	 
	Check list
	 	 
	 
	 	 
	See examples of good practice in Livelink
	 	 
	 
	 	 
	PM Std Tool 11B. See Livelink for example
	 	 

2.3 PREPARE THE CONTROL BUDGET AND UPDATE PROJECT SCHEDULE

The control budget (class 3 or 4 estimate) and schedule should be prepared in
accordance with PM Standard

2.4 ESTABLISH PROJECT CONTROL PROCEDURES

Develop the procedures in order to manage control of the project

-19-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

TP05 Facilities Decomissioning Process

PHASE 2 — RACI CHART

STEP

	2.1	 	Identify and select contractors for professional services (if required)
	 
	2.2	 	Produce a detailed decommissioning scope of works
	 
	2.3	 	Prepare the control budget and update project schedule
	 
	2.4	 	Establish project control procedures

PERSON RESPONSIBLE

Project Manager

Project Manager ETCM RED (to determine extent of consultation with other Central functions)

Project Manager

Project Manager

PERSON

ACCOUNTABLE

Site Director

-20-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

Site Director

Site Director

Site Director

PERSON CONSULTED

Procurement

Project team members

Key site personnel

Relevant specialists (Central functions as determined by ETCM RED)

ETCM RED

ETCM Project Controls Director

PERSON

INFORMED

Site Leadership Team

Site Leadership Team

ETCM RED

Regional EHS

Regional QA

Regional Risk Management

Procurement

Real estate

-21-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

Legal

Site Leadership Team

Procurement

Real estate

Legal

Site Leadership Team

Procurement

TP05 Facilities Decomissioning Process

PHASE 3 — IMPLEMENTATION

STEP OVERVIEW — INPUT/PROCESS/OUTPUT DIAGRAM

STEP OVERVIEW

INPUT

	–	 	Reconfirmed business justification endorsed by the project sponsor
	 
	–	 	Class 4 control budget, associated work breakdown structure (See Dartford
document) and schedule
	 
	–	 	Confirmed recommended technical solution
	 
	–	 	Updated team and organisation strategy
	 
	–	 	GSK resources utilisation and run-down plan for decommissioning
	 
	–	 	Updated risk analysis
	 
	–	 	Site infrastructure impact assessment
	 
	–	 	Professional services contractors appointed
	 
	–	 	Detailed decommissioning scope of works and implementation plan
	 
	–	 	Specifications and bid packages
	 
	–	 	Site specific decommissioning procedures

PROCESS

-22-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

	3.1	 	Formally transfer facility to project.
	 
	3.2	 	Engage decommissioning resources
	 
	3.3	 	Carry out decommissioning and decontamination
	 
	3.4	 	Dismantle systems and equipment.
	 
	3.5	 	Dispose of assets.
	 
	3.6	 	Carry out demolition of facilities (if required)
	 
	3.7	 	Dispose of waste.
	 
	3.8	 	Establish maintenance security mode
	 
	3.9	 	Release decommissioned facility

OUTPUT

	–	 	Reconfirmed business justification endorsed by the project sponsor
	 
	–	 	Safe, secure facility/area
	 
	–	 	Data sheet on each piece of equipment
	 
	–	 	Decontamination certificate
	 
	–	 	Formal release document / handover package
	 
	–	 	Scrap log for controlled waste
	 
	–	 	Updated drawings, records & documentation
	 
	–	 	Project control reports
	 
	–	 	Technical due diligence data
	 
	–	 	Retained documents
	 
	–	 	Documentation trail

IMPLEMENTATION PHASE OBJECTIVES

To decommission the facilities and/or assets in accordance with the scope
defined in Step 2.

TIMING

Implementation of the decommissioning will be driven by completion of the design
phase and the site Supply Chain Plan (SCP). The duration of the project will be
dictated by scope of work.

TP05 Facilities Decomissioning Process

TEMPLATES, TOOLS & CHECKLISTS

Documents associated with phase 3 -Implementation are contained in the following
Livelink folder:

http://livelink.gsk.com/livelink/

livelink.exe?func=ll&objId=1466889&objAction=browse&sort=name

DETAILED IMPLEMENTATION STEPS

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	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

	 	 	 
	3.1 FORMALLY TRANSFER FACILITY TO PROJECT
	 	 
	 
	 	 
	Transfer the facility or area to the control of the decommissioning project team
and clearly mark the boundaries of this area in accordance with the area release
package.

	 	Tips

A planned,
phased release of the facility or area to the decommissioning
project team can accelerate project timings.
	 
	 	 
	Determine and document the controlling authority and regime for engineering
services which supply the area and/or cross the area to support other ongoing
operations.
	 	 
	 
	 	 
	Mobilise the decommissioning implementation team, including appropriate site
resources, in accordance with the team and organisation strategy developed in
the design phase.

	 	Review Speke release of areas and decommissioning document and then
customise for a particular project
	 
	 	 
	For major facility decommissioning projects, it is recommended that the
decommissioning project manager is included on the site leadership team / site
sales team to ensure that the execution of the decommissioning plan is fully
integrated with site business operations.
	 	 
	 
	 	 
	3.2 ENGAGE DECOMMISSIONING RESOURCES
	 	 
	 
	 	 
	Appoint selected decommissioning works contractors, ensuring contractors are in
place and prepare for implementation in accordance with the PM standard.

	 	Also see

procurement

folder in Livelink
	 
	 	 
	Ensure that safety, health and welfare facilities are in place for the
decommissioning project team in accordance with PM standard.
	 	 
	 
	 	 
	3.3 CARRY OUT DECOMMISSIONING AND DECONTAMINATION
	 	 
	 
	 	 
	The contractor(s) shall survey the released area and prepare method statements
and protocols for the decommissioning and decontamination of the facilities and
assets.

	 	See examples in

Livelink
	 
	 	 
	The method statements / risk assessments should align with the scope of works as
defined in the design phase and take account of latest information arising since
release of the area to the decommissioning team.
	 	 
	 
	 	 
	The contractor will then carry out the decommissioning and decontamination of
the facilities and assets in accordance with the authorised method statements.
The status of facilities and assets must be clearly indicated at all times using
status labels as defined in the decontamination and waste disposal of equipment
and facilities documents.

	 	See examples in

Livelink
	 
	 	 
	3.4 DISMANTLE SYSTEMS AND EQUIPMENT
	 	 
	 
	 	 
	Systems and equipment should not be removed unless engineering change control
and a certification of decontamination has been signed.

	 	See Dartford &

Speke examples in Livelink
	 
	 	 
	The extent to which equipment is dismantled should be determined by the disposal
route and the means available to remove it from the facility.
	 	 
	 
	 	 
	TP05 Facilities Decomissioning Process
	 	 
	 
	 	 
	3.5 DISPOSE OF ASSETS

	 	Tips

Develop plan from Speke and Dartford examples
	 
	 	 
	Asset disposal should be carried out in accordance with the completed and agreed
asset disposal plan.
	 	 
	 
	 	 
	It is essential that special attention is paid to assets that contain GSK
intellectual property e.g. tablet tooling, licensed software to ensure that
GSK’s interests are protected and risk of counterfeiting is removed.
	 	 

-24-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

	 	 	 
	For assets intended for sale, specific decontamination and removal requirements
may be determined by the purchaser.

	 	Develop demolition checklist and guidance based on disposal route
and product history — refer to Speke and Dartford examples
	 
	 	 
	3.6 CARRY OUT DEMOLITION OF FACILITIES (IF REQUIRED)
	 	 
	 
	 	 
	Demolition of facilities should be carried out to the extent identified in the
scope of works developed during the design phase. This extent of demolition will
be determined by the intended future use or disposal route for the facilities
and assets and by risk assessment driven by the product history assessment.
	 	 
	 
	 	 
	Where facilities are not demolished they should be made safe vermin, and
weatherproof.

	 	Develop checklist
based on Speke and Dartford examples

3.7 DISPOSE OF WASTE

Waste associated with the process of decontamination and demolition should be
classified according to its hazard status, labelled and disposed of accordingly.
Assets which are not being transferred or sold will be disposed of by sale for
scrap or destruction. All assets for scrap should be recorded in the scrap log
for controlled waste and their decontamination status documented. A copy of the
certificate of decontamination should be issued to the disposal contractor.
Assets for scrap should be cleaned in accordance with the facilities and
equipment waste disposal document.

3.8 ESTABLISH MAINTENANCE SECURITY MODE

Where the scope of works indicates that a facility will be retained by GSK
(either as a mothballed facility or a decommissioned shell), then basic
infrastructure services should be retained. The extent of these services will be
those necessary to maintain the facility structure and fabric in the condition
determined in the plan and scope of works.

3.9 RELEASE DECOMMISSIONED FACILITY

On completion of all decommissioning activities, as set out in the scope of
works, the facility will be handed over to site operations or GSK landlord. This
handover should be managed throughout the implementation phase to ensure that
issues are addressed during implementation without extending the project
timescale.

A decommissioning summary report will be produced which will include a
completion certificate, together with CD ROM / links to the associated
supporting documentation, should be provided.

TP05 Facilities Decomissioning Process

PHASE 3 — RACI CHART

STEP

	3.1	 	Formally transfer facility to project
	 
	3.2	 	Engage decommission-ing resources
	 
	3.3	 	Carry out decommission-ing and decontamina-tion
	 
	3.4	 	Dismantle systems and equipment

-25-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

	3.5	 	Dispose of assets
	 
	3.6	 	Carry out demolition of facilities (if required)
	 
	3.7	 	Dispose of waste
	 
	3.8	 	Establish maintenance security mode
	 
	3.9	 	Release decommission- ed facility

PERSON RESPONSIBLE

Project Manager

Project Manager

Project Manager

Project Manager

Project Manager

Project Manager

Project Manager

Project Manager

Project Manager

PERSON

ACCOUNTABLE

Site Director

-26-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

Site Director

Site Director

Site Director

Site Director

Site Director

Site Director

Site Director

Site Director

PERSON CONSULTED

Procurement

Project Manager

Procurement

Site EHS

Specialist contractors

Site EHS

Specialist contractors

Site EHS

Site EHS

Site Procurement

Site EHS

Site EHS

Site Security

Site Engineering

-27-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

Site Security

PERSON INFORMED

Site production team

Site decommission-ing team

Legal (if required)

Site leadership team

Central Sales

Finance

GSK Landlord

Site security

GSK Landlord

GSK Landlord

TP05 Facilities Decomissioning Process

PHASE 4 — CLOSE OUT

STEP OVERVIEW

INPUT

	–	 	Formal release document / handover package
	 
	–	 	Scrap log for controlled waste
	 
	–	 	Updated drawings, records & documentation.
	 
	–	 	Project control reports
	 
	–	 	Technical data for site sale
	 
	–	 	Other retained documents as determined in scope of works and deliverables

-28-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

PROCESS

	4.1	 	Complete closeout activities as defined in PM standard
	 
	4.2	 	Perform a post project review and incorporate learnings into the facilities
decommissioning process and sub processes
	 
	4.3	 	Realise benefits from asset disposal
	 
	4.4	 	Document facility and retained assets change in status
	 
	 	 	Produce duty of care audit trail

	 	 	 
	 

	 	Tips

Refer to PM Std
Stage 9 and Tools
1A, 12D & 12G

OUTPUT

	–	 	Reconfirmed business justification endorsed by the project sponsor
	 
	–	 	Schedule of benefits realised versus expenditure
	 
	–	 	Archived documentation package
	 
	–	 	Updated GSK asset and facility record
	 
	–	 	GSK residual risks and liabilities support package
	 
	–	 	Lessons learned
	 
	 	 	Updated decommissioning process

	 	 	 
	 

	 	See GSK archiving

policy

CLOSE OUT PHASE OBJECTIVES

To close out the project in accordance with the good practices in the PM
standard.

To capture the learnings from the decommissioning project and incorporate into
process updates.

To create an archive documentation package to support GSK’s residual risks and
liabilities and ensure accurate records.

TIMING

The decommissioning closeout should be completed concurrent with handover.

DETAILED IMPLEMENTATION STEPS

4.1 COMPLETE CLOSEOUT ACTIVITIES AS DEFINED IN PM STANDARD

On completion of the project close out review, the key learnings identified from
the project should be made available to the decommissioning process owner (ETCM)
to be incorporated into process updates.

4.2 REALISE BENEFITS FROM ASSET DISPOSAL.

A record of benefits realised from asset disposal should be maintained for input
to the project financial close-out.

4.3 DOCUMENT FACILITY AND RETAINED ASSETS CHANGE IN STATUS

Facility and retained assets change of status records should be documented and
inserted into the Documented Site Records. A copy of the Documented Site Records
should be retained by the GSK landlord or if the site has been disposed of,
archived according to GSK policy

TP05 Facilities Decomissioning Process

-29-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

4.4 PRODUCE DUTY OF CARE AUDIT TRAIL

For assets and facilities disposed of as a result of the decommissioning,
documentary records of the EHS status of the assets at the time of disposal
should be retained as part of the documented site records. Examples of such
documents include: survey reports, risk assessments, decontamination and
decommissioning certificates, disposal records, sale and purchase documents.

Note that for specific projects, assistance should be sought from regional EHS,
QA and Legal as appropriate.

PHASE 4 — RACI CHART

STEP

	4.1	 	Complete closeout activities as defined in the PM standard
	 
	4.2	 	Realise benefits from asset disposal
	 
	4.3	 	Document facility and retained assets change in status
	 
	4.4	 	Produce duty of care audit trail

PERSON RESPONSIBLE

Project Manager

Project Manager

Project Manager

Project Manager

PERSON

ACCOUNTABLE

Site Director or nominee

Site Director or nominee

Site Director or nominee

Site Director or nominee

PERSON CONSULTED

Project team Site leadership team

Business Case Owner

Archiving Leader Site Leadership Team

Regional EHS, QA and legal, ETCM RED

-30-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

PERSON

INFORMED

Decommission-ing process owner

Site sales director

Site Engineering Site Operations

APPENDIX LIST

Appendix I: Site closure processes list

Appendix II: Decommissioning options (levels 1 — 4)

TP05 Facilities Decomissioning Process

APPENDIX 1

SITE CLOSURE PROCESSES LIST

DOCUMENT NAME (MAP)

Archiving and Storage Guideline

Asset Management and Disposal Guideline (GSN)

Asset Management and Disposal Guideline (GMS)

Environment, Health and Safety Service Termination Guideline

Environment, Health and Safety Service Termination Guideline

Financial Closure Guideline

-31-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

GSN Site Exit Process

Human Resources Exit Guideline

IS/IT Termination Guideline (Site Closure)

DOCUMENT NAME (LIVELINK)

Global Information and Records

Management Intranet Site

Asset Management and Disposal Guideline (GSN Process P26 — Site Sale)

Asset Management and Disposal Guideline (via Planning and Sourcing website)

Due Diligence Checklist (Asset Sale)

EHS Due Diligence

GSN Finance Close Out Document v1

GSN Site Exit Process

The examples have been withheld because they are confidential and specific to local circumstances

GSN IT Closure Process

OWNER

Phil Sawyer

Nick Davies

Nick Davies

-32-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

Tom Beggs

Tom Beggs

Helen Vincent

Nick Davies

Fiona Whittaker

John Blake

HYPERLINK

http://ukpub.ggr.co.uk/Global-IRM/RecordsManagement.htm

http://livelink.gsk.com/livelink/livelink.exe/204439/Site_Sale–Process_
_P26.doc?func=doc.Fetch&nodeid=204439

http://manufacturing.gsk.com/ planningandsourcing/

http://livelink.gsk.com/livelink/livelink.exe/515007/
Due_Diligence_Checklist_(Asset_Sale).doc?func=doc.Fetch&nodeid =515007

http://livelink.gsk.com/livelink/livelink.exe/515104/EHS_Due_Diligence_11_28
_01.doc?func=doc.Fetch&nodeid=515104

http://livelink.gsk.com/livelink/livelink.exe/515003/GSN_Finance_Close_Out
_Document_v1.doc?func=doc.Fetch&nodeid=515003

http://livelink.gsk.com/livelink/livelink.exe/515066/GSN_Site_Exit_Process
_v0.09.doc?func=doc.Fetch&nodeid=515066

http://livelink.gsk.com/livelink/livelink.exe/515210/GSN_IT_Close_v0.04?func=doc.Fetch&

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	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

nodeid=515210

TP05 Facilities Decomissioning Process

APPENDIX 1

SITE CLOSURE PROCESSES LIST

DOCUMENT NAME (MAP)

IS/IT Termination Guideline (Site Sale)

Legal Responsibility Guideline

Management Of Supplies and Stockbuild Guideline

Manufacturing Operations Termination Example Plan

Procurement Termination Guideline

Quality Assurance Termination Checklist

Quality Assurance Termination Example

Quality Assurance Termination Guideline

Site Exit Certification

Example Site Exit Guideline

DOCUMENT NAME (LIVELINK)

GSN IT Sale Process

Contact Nicky Fell for advice

Management of Supplies and Stockbuild

Example Site Closure Project Plan

Procurement Site Closure Plan Example

QA Protocol Chart v0.03

QA Site Closure Plan

QA Guideline for Closure

Site Exit Certification

Example Site Exit Plan

OWNER

-34-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

John Blake

Nicky Fell

Phil Priest

James Hogg

Richard Alderton

Afshin Hossieny

Afshin Hossieny

Afshin Hossieny

Nick Davies

Nick Davies

HYPERLINK

http://livelink.gsk.com/livelink/livelink.exe/515472/GSN_IT_Sale_v0.04?func=doc.
Fetch&nodeid=515472

http://uspub.glaxo.com/GSKSupplyChainEducation/reference/ stockbuild/
stock_build.htm

http://livelink.gsk.com/livelink/livelink.exe/515101/Procurement_Site_Closure_
Plan_Example.doc?func=doc.Fetch&nodeid=515101

http://livelink.gsk.com/livelink/livelink.exe/522692/QA_Protocol_Chart_v0.03?
func=doc.Fetch&nodeid=522692

http://livelink.gsk.com/livelink/livelink.exe/514965/QA_Site_Closure_Plan_v3.
doc?func=doc.Fetch&nodeid=514965

http://livelink.gsk.com/livelink/livelink.exe/515207/QA_Guideline_for_Closure_
v0.02?func=doc.Fetch&nodeid=515207

http://livelink.gsk.com/livelink/livelink.exe/750684/Site_Exit_Certification.
doc?func=doc.Fetch&nodeid=750684

http://livelink.gsk.com/livelink/livelink.exe/515485/Example_Site_Exit_Plan.doc?
func=doc.Fetch&nodeid=515485

-35-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

TP05 Facilities Decomissioning Process

APPENDIX IL

Decommissioning Options (Options 1-4)

APPENDIX II SITE DISPOSAL OPTIONS & DECOMMISSIONING LEVELS

Site Disposal Options

There are several possibilities for the disposal or part disposal of a
GlaxoSmithKline site. Company preferred options may be predetermined by the
Disposal Sponsor or may have recommendation from the decommissioning Project
Manager as a result of decommissioning investigations.

A key factor is that no matter what option is selected, GlaxoSmithKline must be
seen to do decommissioning in a defined, safe, documented and ethical manner.
This will reduce potential future liabilities from contaminated material, land,
soil and surface water make the disposal of the asset easier — a buyer is more
likely to buy an asset with a documented decommissioning history.

Each of the options will require a degree of decontamination to reduce the
possibility of harm to any person in contact with the equipment, site or
disposed material. The permitted threshold ranges of contaminants will be
difficult to obtain and establish. There may well be national or local
regulatory requirements for this or, if not, it will be the responsibility of
GlaxoSmithKline to define an appropriate standard to be achieved. In all cases,
it must be defined and agreed with the final decontamination documented to prove
conformance.

The main disposal options have been identified below:

DISPOSAL OPTION AND

DECOMMISSIONING LEVELS

	1.	 	Site disposal, with maintenance of supply

               Decontamination and decommissioning thresholds to be agreed with Buyer

CONSIDERATION

For this option a buyer has been found who will continue operation with supply
to GlaxoSmithKline for a contracted period. It will be important to ensure that
the equipment and operation are handed over in a documented, validated manner.

The degree of decontamination required for the site, land and facilities will
need to be agreed, implemented and documented, with the buyer prior to
hand-over. It will be important to define and limit GSK exposure to future
liability concerning decontamination.

There will also be important supply chain and regulatory considerations
concerning pharmaceutical products, these may well affect the decommissioning
timelines.

TP05 Facilities Decomissioning Process

-36-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

DISPOSAL OPTION AND

DECOMMISSIONING LEVELS

	2.	 	Site disposal, without maintenance of supply

               Decommissioning Level 1

	3.	 	Mothball Site

               Decommissioning Level 1

	4.	 	Dismantle and remove equipment, keep buildings

               Decommissioning Level 2

	5.	 	Demolish buildings to ground floor slab

               Decommissioning Level 3

CONSIDERATION

Similar to option 1 but more emphasis will need to be made on the safe shutdown
of the plant and decontamination.

The site may well be re-configured and re-started to produce non pharmaceutical
products. In this case careful consideration must be given to minimise the risk
of cross contamination.

-37-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

Consideration and costing will need to be made for the continued maintenance and
security of the site.

This is likely to be a transitional stage until a decision is made for the site.
It is also likely to occur if there is a delay between production ceasing and
the actual implementation of the decommissioning.

Similar to 2, but the site will remain the property of GlaxoSmithKline perhaps
transferred to another supply chain or into the responsibility of Corporate Real
Estate.

Consideration and costing will need to be made for the continued maintenance and
security of the site.

Building will need to be decontaminated agreed limits after an assessment of the
environmental risks.

The buildings will need to be made weather proof and consideration and costing
given for the continued maintenance and security of the site.

By keeping the ground floor slabs, it decreases the risk of decontamination
seeping into the water tablet.

Any contaminated material and soil will need to be removed and decontaminated to
agreed limits.

Consideration and costing will need to be made for landscaping the site,
continued maintenance and security of the site.

TP05 Facilities Decomissioning Process

DISPOSAL OPTION AND

DECOMMISSIONING LEVELS

	6.	 	Removal of ground floor slabs, pits, roads and site infrastructure

               Decommissioning Level 3

	7.	 	Partition Site

               Decommissioning Level 2

-38-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

CONSIDERATION

This is further split according to the future use of the land:

Within GSK

Outside GSK — Industrial US

Outside GSK — Non Industrial Use

Some countries/states will have defined soil contamination thresholds for
different classes of subsequent usage for a site. Where no thresholds exist,
this requires agreement with the potential purchaser or environmental regulatory
authority.

If the land is to be retained by GSK then consideration and costing will need to
be made for landscaping the site, continued maintenance and security of the
site.

This will be a mixture of all the above.

Consideration must be made on how this affects the site infrastructure and
utilities and whether they can still function with a reduced or changed duty.

Whilst decommissioning is in progress the remaining operational units must be
protected against ingress or contaminants and dust from areas being
decommissioned.

TP05 Facilities Decomissioning Process

-39-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

(FLOW CHART)

TP05 Facilities Decomissioning Process

This preceding diagram illustrates the various steps and different routes which
may be encountered during the decommissioning of an operational site. The end
result of the decommissioning will be one of the disposal options discussed in
the

-40-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

previous section.

Decontamination of Plant Equipment and Building to Level 1 Decommissioning

Once the decision has been taken to decommission the site, it must be decided
whether facility has been sold or not, ie, there are following two
possibilities:

1. The site may have been sold to a third party for continuation of supply of
the product. In this case production continues and the site must be
decontaminated to the mutually agreed specification between GlaxoSmithKline and
the Purchaser. It will be important to ensure that the equipment and operation
are handed over in a documented, validated manner. There will also be regulatory
considerations concerning pharmaceutical products.

CONSIDERATION A

2. If the site has not been sold, then production will have to be halted and
each process area and utility put into a safe, decontaminated state of an
indefinite period. This will involve an initial cGMP clean as would normally be
carried out on the equipment for the annul shutdown, normal site procedures
should be in place for this. This will be followed by an intrusive clean of the
equipment infrastructure and building surfaces to remove all active and
potentially hazardous materials to agreed threshold levels. Threshold levels may
be defined within the Material Safety Data Sheets or a level may need to be
agreed with quality or an appropriate environmental agency. These levels will be
set to a threshold as such that when dismantling, demolition and material
disposal occur, it can be carried out safely without the need for specialised
protection equipment. Alternative threshold levels may be set if the process is
to be re-started manufacturing a different material, these would normally be
more stringent. When the decontamination has been completed the site will need
to be placed in a maintenance/security mode. The buildings will still contain
the process equipment, lighting, fire alarms, fire sprinklers, power
distribution, telephone system, structural walls, HVAC unit an basic duct work.
It will be structurally sound, weather proof and safe for controlled visits.

The process equipment will be subject to a regular maintenance schedule to
prevent the ingress of contaminants or corrosive material and to ensure that
moving parts are operational. The Maintenance/Security mode will continue until
a decision is reached about the future of the site.

There are three possible routes from this maintenance/security mothball state.

1. Sale of the site to a third party without necessarily the continuation of the
product supply. This will involve the decontamination of the site to the
mutually agreed specification between GlaxoSmithKline and the Purchaser. Again
this will need to be carried out in a documented and validateable manner

2. The re-commissioning of the plant to an operational unit. This may involve
some re-assembly because of the decontamination and necessary dismantling
carried out during the previous intrusive cleaning.

3. The removal of the process equipment with or without the demolition of the
buildings or the clearing of the site.

Rout 3 has several different paths depending on what happens to the building and
the site. It will always involve the dismantling and disposal of the equipment.
The equipment can either be scrapped or reused within GSK or sold to a third
party.

TP05 Facilities Decomissioning Process

-41-

 

	 	 	 
	 

	 	Introduction
	 

	 	phase 1 — planning
	 

	 	phase 11 — design
	 

	 	phase 111 — implementation
	 

	 	Phase 1V — close out

DECOMMISSIONING OF PLANT EQUIPMENT AND BUILDINGS TO LEVEL 2 DECOMMISSIONING

Retain the buildings, this will involve making safe and temporary
weatherproofing the buildings, they will still contain lighting, fire alarms,
fire sprinklers, power distribution, telephone system, structural wall, HVAC
unit and basic duct work. The buildings will be structurally sound, weather
proof and safe for controlled visits.

DECOMMISSIONING OF SITE AND BUILDINGS TO LEVEL 3 DECOMMISSIONING

The demolition of the buildings and their contents to ground floor slab and the
safe disposal of the removed material offsite by an appropriate route. All
roads, paved areas, gardens to remain. Any below ground areas will have above
ground walls and all equipment removed and, if necessary because of
contamination, the remaining concrete surface areas scrabbled. Underground pits
will need to be fenced off or filled in to prevent accidental falling in.

DECOMMISSIONING OF SITE AND BUILDINGS TO LEVEL 4 DECOMMISSIONING

The removal and disposal of all buildings with ground floor slabs, paving, pad
and trench foundations but not piles. Removal and disposal of underground drains
and services. Removal of contaminated topsoil and its treatment and disposal.
Replacement of the top soil with landscaping and fencing of the cleaned site.

-42-

 

EXHIBIT G

LIST OF EMPLOYEES

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1ERE
	 	 	 	 	 	 	 	 	Seniority	 	 	 	Age	 	Salary	 	 	 	Target	 	D.S.	 	D.S.	 	CE	 	CE	 	CPPT	 	CPPT	 	CE	 	CPPT	 	CANDI?
	 	 	 	 	Name	 	Entry	 	01/01/04	 	Birth	 	01/01/04	 	11/04	 	Shift?	 	Bonus	 	(Eff.)	 	(Supp.)	 	(Eff.)	 	(Supp.)	 	(Eff.)	 	(Supp.)	 	 	 	 	 	oui/non
	1

	 	O
	 	ADAM, DANY
	 	17/12/84
	 	 	20	 	 	09/08/59
	 	 	45	 	 	 	16.84	 	 	 	 	 	 	 	 	 	 	 	 	O	 	 	 	 	 	 	 	 	 	 
	2

	 	O
	 	BEELEN GERY
	 	13/09/99
	 	 	5	 	 	11/02/73
	 	 	31	 	 	 	13.02	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	3

	 	O
	 	BORRENS DOMINIQUE
	 	02/08/02
	 	 	2	 	 	30/04/75
	 	 	29	 	 	 	11.88	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	4

	 	O
	 	BROUWERS, ALAIN
	 	12/06/78
	 	 	26	 	 	18/04/57
	 	 	47	 	 	 	15.95	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5

	 	O
	 	CARLIER, DENIS
	 	04/11/96
	 	 	8	 	 	13/08/63
	 	 	41	 	 	 	14.86	 	 	 	 	 	 	 	 	O
	 	 	 	O	 	 	 	 	 	 	 	 	 	 
	6

	 	O
	 	COLLIN, LAURENT
	 	02/10/00
	 	 	4	 	 	27/04/78
	 	 	26	 	 	 	12.92	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	7

	 	O
	 	COPIN, LUC
	 	26/05/86
	 	 	18	 	 	04/06/65
	 	 	39	 	 	 	15.23	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	8

	 	O
	 	DANDUMONT,

JEAN-PAUL
	 	05/08/85
	 	 	19	 	 	06/12/58
	 	 	46	 	 	 	15.23	 	 	yes
	 	 	 	 	 	O
	 	 	 	 	 	 	 	O	 	 	 	 	 	 
	9

	 	O
	 	DELENS, LUC
	 	02/12/82
	 	 	22	 	 	15/06/56
	 	 	48	 	 	 	15.60	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	10

	 	O
	 	DELLISSE, ALAIN
	 	18/06/90
	 	 	14	 	 	16/05/62
	 	 	42	 	 	 	15.01	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	11

	 	O
	 	DERYS, ALAIN
	 	10/12/84
	 	 	20	 	 	15/10/56
	 	 	48	 	 	 	17.08	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	12

	 	O
	 	EGGERICKX,

BERTRAND
	 	15/10/86
	 	 	18	 	 	27/09/64
	 	 	40	 	 	 	15.23	 	 	yes
	 	 	 	 	 	 	 	 	 	 	 	 	 	O	 	 	 	 	 	 
	13

	 	O
	 	ESSER, DENIS
	 	14/11/88
	 	 	16	 	 	07/07/68
	 	 	36	 	 	 	15.10	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	14

	 	O
	 	ETIENNE, ERIC
	 	01/04/89
	 	 	15	 	 	24/07/65
	 	 	39	 	 	 	15.10	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	15

	 	O
	 	FLORUS, PHILIPPE
	 	12/03/95
	 	 	9	 	 	05/08/55
	 	 	49	 	 	 	13.81	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	16

	 	O
	 	KIHL, DANIEL
	 	13/04/87
	 	 	17	 	 	26/07/62
	 	 	42	 	 	 	15.19	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	17

	 	O
	 	LOUVIAUX, BENOIT
	 	28/04/81
	 	 	23	 	 	01/12/60
	 	 	44	 	 	 	15.70	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	18

	 	O
	 	MAROTTA VINCENZO
	 	02/08/02
	 	 	2	 	 	27/08/71
	 	 	33	 	 	 	11.88	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	19

	 	O
	 	MAYNE, PHILIPPE
	 	17/03/82
	 	 	22	 	 	27/07/57
	 	 	47	 	 	 	17.22	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	20

	 	O
	 	MELCHIOR

CHRISTOPHE
	 	17/12/01
	 	 	3	 	 	25/09/79
	 	 	25	 	 	 	13.28	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	21

	 	O
	 	MOINI TABATABAI,

SEYED ALI
	 	11/04/89
	 	 	15	 	 	30/06/60
	 	 	44	 	 	 	15.10	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	22

	 	O
	 	NAISSE, CHRISTIAN
	 	20/10/87
	 	 	17	 	 	24/09/60
	 	 	44	 	 	 	15.19	 	 	yes
	 	 	 	O
	 	 	 	O	 	 	 	 	 	 	 	 	 	 	 	 
	23

	 	O
	 	NAMUR,

JEAN-PIERRE
	 	07/04/88
	 	 	16	 	 	20/06/54
	 	 	50	 	 	 	15.15	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

45

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1ERE
	 	 	 	 	 	 	 	 	SENIORITY	 	 	 	AGE	 	SALARY	 	 	 	TARGET	 	D.S.	 	D.S	 	CE	 	CE	 	CPPT	 	CPPT	 	CE	 	CPPT	 	CANDI?
	 	 	 	 	NAME	 	ENTRY	 	01/01/04	 	BIRTH	 	01/01/04	 	11-04	 	SHIFT?	 	BONUS	 	(EFF)	 	(SUPP)	 	(EFF)	 	(SUPP)	 	(EFF)	 	(SUPP)	 	 	 	 	 	OUI/NON
	24

	 	O
	 	PANADERO ALCARAZ,

GASPAR
	 	08/08/86
	 	 	18	 	 	17/09/57
	 	 	47	 	 	 	15.74	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	25

	 	O
	 	PIERRE, PATRICK
	 	02/10/85
	 	 	19	 	 	09/07/56
	 	 	48	 	 	 	16.84	 	 	 	 	 	 	O
	 	 	 	O
	 	 	 	O	 	 	 	 	 	 	 	 
	26

	 	O
	 	PLUMAT, ALAIN
	 	13/04/92
	 	 	12	 	 	02/02/66
	 	 	38	 	 	 	16.02	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	27

	 	O
	 	RENARD, PIERRE
	 	02/05/95
	 	 	9	 	 	23/03/58
	 	 	46	 	 	 	14.12	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	28

	 	O
	 	SELOSSE, CEDRIC
	 	02/05/95
	 	 	9	 	 	03/02/73
	 	 	31	 	 	 	14.12	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	29

	 	O
	 	SEVRAIN, BERNARD
	 	02/06/89
	 	 	15	 	 	28/01/64
	 	 	40	 	 	 	15.10	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	30

	 	O
	 	TOUNE FABRICE
	 	06/02/02
	 	 	2	 	 	07/07/69
	 	 	35	 	 	 	11.88	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	31

	 	O
	 	TOUSSAINT,

JEAN-MARIE
	 	24/04/85
	 	 	19	 	 	07/03/58
	 	 	46	 	 	 	15.52	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	32

	 	O
	 	VAN BELLE, JOSEPH
	 	08/04/86
	 	 	18	 	 	16/05/57
	 	 	47	 	 	 	15.23	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	33

	 	O
	 	VAN ELDOM,

JEAN-LUC
	 	22/05/89
	 	 	15	 	 	31/03/62
	 	 	42	 	 	 	16.63	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	34

	 	O
	 	VAN EYKEN, MICHEL
	 	30/11/90
	 	 	14	 	 	13/10/67
	 	 	37	 	 	 	14.66	 	 	yes
	 	 	 	 	 	O
	 	 	 	O	 	 	 	 	 	 	 	 	 	 
	35

	 	O
	 	VANDERVORST, RUDY
	 	01/05/89
	 	 	15	 	 	18/08/67
	 	 	37	 	 	 	15.10	 	 	yes	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	36

	 	O
	 	WASTIELS, LUCIEN
	 	16/06/97
	 	 	7	 	 	07/05/54
	 	 	50	 	 	 	14.86	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	37

	 	O
	 	WINAND, ALAIN
	 	06/12/82
	 	 	22	 	 	02/09/62
	 	 	42	 	 	 	17.16	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	38

	 	E
	 	BASTEYNS, DIDIER
	 	01/01/98
	 	 	6	 	 	18/06/66
	 	 	38	 	 	 	3 304	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	39

	 	E
	 	BEN AHMED NADIA
	 	12/08/02
	 	 	2	 	 	09/08/72
	 	 	32	 	 	 	2 847	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	40

	 	E
	 	BLAIN PHILIPPE
	 	01/02/84
	 	 	20	 	 	25/01/60
	 	 	44	 	 	 	3 265	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	41

	 	E
	 	BORDON,

JEAN-PIERRE
	 	28/05/90
	 	 	14	 	 	12/07/64
	 	 	40	 	 	 	3 209	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	42

	 	E
	 	CASTREMANNE,

STEPHANE
	 	25/03/91
	 	 	13	 	 	02/08/66
	 	 	38	 	 	 	3 304	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Non

elu
	 	 	 	non 
(cand.
CE en 00)
	43

	 	E
	 	DARDENNE, BERNARD
	 	01/06/97
	 	 	7	 	 	10/07/1954
	 	 	50	 	 	 	3 491	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	44

	 	E
	 	DE BEUGHER,

GREGORY
	 	01/10/00
	 	 	4	 	 	18/08/77
	 	 	27	 	 	 	2 528	 	 	 	 	 	 	 	 	 	 	 	 	O	 	 	 	 	 	 	 	 	 	 
	45

	 	E
	 	DIMITRIADIS,

VASILAKI
	 	01/11/00
	 	 	4	 	 	17/07/63
	 	 	41	 	 	 	3 416	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	O
	 	Non

elu	 	 	 	 
	46

	 	E
	 	FONTAINE, MICHEL
	 	13/03/95
	 	 	9	 	 	01/01/1968
	 	 	36	 	 	 	3 058	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	47

	 	E
	 	GALLEE, ARNAUD
	 	01/02/89
	 	 	15	 	 	20/01/60
	 	 	44	 	 	 	3 265	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	48

	 	E
	 	GEENENS CAROLINE
	 	03/06/02
	 	 	2	 	 	18/04/75
	 	 	29	 	 	 	2 437	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	49

	 	E
	 	GILIS, DIDIER
	 	01/09/98
	 	 	6	 	 	17/05/69
	 	 	35	 	 	 	3 029	 	 	 	 	 	 	O
	 	 	 	O	 	 	 	 	 	O	 	 	 	 	 	 
	50

	 	E
	 	HANQUET, MICHEL
	 	28/04/80
	 	 	24	 	 	29/03/54
	 	 	50	 	 	 	3 491	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	51

	 	E
	 	HEYLEN, MARTINE
	 	11/12/78
	 	 	26	 	 	15/05/58
	 	 	46	 	 	 	1 676	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	52

	 	E
	 	LEBLANC, ISABELLE
	 	14/01/91
	 	 	13	 	 	28/06/69
	 	 	35	 	 	 	2 424	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	53

	 	E
	 	LIBERT, BENOIT
	 	04/01/93
	 	 	11	 	 	15/05/69
	 	 	35	 	 	 	3 265	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Non

elu
	 	Non

elu
	 	 	 	non
(cand.

CE en 00)

 46

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	SENIORITY	 	 	 	AGE	 	SALARY	 	 	 	TARGET	 	D.S.	 	D.S	 	CE	 	CE	 	CPPT	 	CPPT	 	CE	 	CPPT	 	1ERE CANDI?
	 	 	 	 	NAME	 	ENTRY	 	01/01/04	 	BIRTH	 	01/01/04	 	11-04	 	SHIFT?	 	BONUS	 	(EFF)	(SUPP)	(EFF)	 	(SUPP)	 	(EFF)	 	(SUPP)	 	 	 	 	 	OUI/NON
	54

	 	E
	 	LONFILS AURELE
	 	01/02/02
	 	 	2	 	 	29/08/60
	 	 	44	 	 	 	2 590	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	55

	 	E
	 	MARCUCCI, LAURA
	 	02/01/91
	 	 	13	 	 	13/09/68
	 	 	36	 	 	 	2 992	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	56

	 	E
	 	MEUNIER, ALAIN
	 	02/06/86
	 	 	18	 	 	19/07/59
	 	 	45	 	 	 	3 330	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	57

	 	E
	 	MEUNIER, THIERRY
	 	06/06/86
	 	 	18	 	 	29/11/62
	 	 	42	 	 	 	14.89	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	58

	 	E
	 	RAMOS TORNAY LUIS
	 	01/11/90
	 	 	14	 	 	12/12/61
	 	 	43	 	 	 	3 237	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	59

	 	E
	 	REMACLE,

JEAN-MARIE
	 	22/08/88
	 	 	16	 	 	22/10/60
	 	 	44	 	 	 	3 647	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	60

	 	E
	 	THESIN, DOMINIQUE
	 	19/12/1989
	 	 	15	 	 	27/04/66
	 	 	38	 	 	 	3 117	 	 	 	 	 	 	 	 	 	 	 	 	O
	 	 	 	 	 	 	 	 	 	Non

elu	 	 
	61

	 	E
	 	VOS BERANGERE
	 	01/12/01
	 	 	3	 	 	03/05/78
	 	 	26	 	 	 	2 468	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	62

	 	E
	 	WIBAUT, NICOLAS
	 	16/06/91
	 	 	13	 	 	16/05/65
	 	 	39	 	 	 	3 146	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	63

	 	C
	 	AZORNE LYSIANE
	 	20/08/01
	 	 	3	 	 	06/09/66
	 	 	38	 	 	 	3 611	 	 	 	 	 	2.75	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	64

	 	C
	 	BARKET, MICHEL
	 	01/09/87
	 	 	17	 	 	11/06/54
	 	 	50	 	 	 	5 182	 	 	 	 	 	2.75	%	 	 	 	 	 	 	 	 	 	 	 	 	 	Non

elu
	 	 	 	non (elu

suppleant

CE en 00)
	65

	 	C
	 	BORZYK, DIMITRI
	 	01/09/95
	 	 	9	 	 	23/08/64
	 	 	40	 	 	 	3 921	 	 	 	 	 	2.75	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	66

	 	C
	 	CASTELLI, DANIEL
	 	02/11/98
	 	 	6	 	 	20/03/70
	 	 	34	 	 	 	2 924	 	 	yes
	 	 	2.75	%	 	 	 	 	 	 	 	 	 	O	 	 	 	 	 	 	 	 
	67

	 	C
	 	CHARLES, PHILIPPE
	 	17/11/86
	 	 	18	 	 	16/08/63
	 	 	41	 	 	 	4 969	 	 	 	 	 	2.75	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	68

	 	C
	 	CHARMOT

JEAN-FRANCOIS
	 	01/10/99
	 	 	5	 	 	10/11/70
	 	 	34	 	 	 	2 780	 	 	yes
	 	 	2.75	%	 	 	 	 	 	 	 	 	 	 	 	O	 	 	 	 	 	 
	69

	 	C
	 	COREMANS,

JEAN-MARC
	 	01/10/86
	 	 	18	 	 	29/06/59
	 	 	45	 	 	 	4 575	 	 	 	 	 	2.75	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	70

	 	C
	 	GEORGES, PATRICE
	 	01/06/92
	 	 	12	 	 	21/07/63
	 	 	41	 	 	 	4 321	 	 	 	 	 	2.75	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	71

	 	C
	 	HEILPORN, SYLVIE
	 	01/02/00
	 	 	4	 	 	12/12/63
	 	 	41	 	 	 	4 331	 	 	 	 	 	2.75	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	72

	 	C
	 	JOLY, VALERIE
	 	20/11/95
	 	 	9	 	 	04/04/73
	 	 	31	 	 	 	3 077	 	 	 	 	 	2.75	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	73

	 	C
	 	LECAILLE, ANTOINE
	 	01/06/98
	 	 	6	 	 	26/12/69
	 	 	35	 	 	 	2 982	 	 	yes
	 	 	2.75	%	 	 	 	 	 	 	 	 	 	 	 	 	 	Non

elu
	 	 	 	oui
	74

	 	C
	 	LEMAIRE, JEAN-LUC
	 	10/02/97
	 	 	7	 	 	14/05/69
	 	 	35	 	 	 	4 167	 	 	 	 	 	2.75	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	75

	 	C
	 	MARNEFFE, THIERRY
	 	01/03/84
	 	 	20	 	 	01/12/58
	 	 	46	 	 	 	5 140	 	 	 	 	 	2.75	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	76

	 	C
	 	MARY, DANIEL
	 	27/04/87
	 	 	17	 	 	22/05/63
	 	 	41	 	 	 	3 750	 	 	 	 	 	2.75	%	 	O	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	77

	 	C
	 	MEURISSE, ERIC
	 	02/01/96
	 	 	8	 	 	25/06/66
	 	 	38	 	 	 	4 302	 	 	 	 	 	2.75	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	78

	 	C
	 	PIECQ, MARTINE
	 	01/01/92
	 	 	12	 	 	22/11/57
	 	 	47	 	 	 	4 886	 	 	 	 	 	2.75	%	 	 	 	 	 	O
	 	 	 	O	 	 	 	 	 	 	 	 
	79

	 	C
	 	PIERARD, DIDIER
	 	16/10/95
	 	 	9	 	 	09/07/70
	 	 	34	 	 	 	2 837	 	 	yes
	 	 	2.75	%	 	 	 	 	 	 	 	 	 	 	 	O	 	 	 	 	 	 
	80

	 	C
	 	ROUXHET,

CHRISTOPHE
	 	23/06/97
	 	 	7	 	 	27/08/72
	 	 	32	 	 	 	3 338	 	 	 	 	 	2.75	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	81

	 	C
	 	WEGRIA, STEPHANE
	 	18/10/99
	 	 	5	 	 	17/02/76
	 	 	28	 	 	 	2 914	 	 	 	 	 	2.75	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 47

 

EXHIBIT H

LIST OF EMPLOYEES — MANAGERS

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Seniority	 	 	 	Age	 	Nov-04	 	Monthly	 	Company	 	Top Hat	 	Target
	 	 	 	 	Name	 	Entry	 	01/01/2004	 	Birth	 	01/01/2004	 	Salary	 	Allowance	 	Car	 	Insurance	 	Bonus
	1

	 	M
	 	BERNARD, ANDRE
	 	05/01/1987
	 	 	17	 	 	06/09/1963
	 	 	41	 	 	5 953.16
	 	 	225	 	 	yes
	 	yes
	 	 	15	%
	2

	 	M
	 	GOSSELE, FRANCIS
	 	16/09/1985
	 	 	19	 	 	13/10/1956
	 	 	48	 	 	6 914.88
	 	 	225	 	 	yes
	 	yes
	 	 	15	%
	3

	 	M
	 	RENARD, PHILIPPE
	 	05/01/1987
	 	 	17	 	 	05/10/1962
	 	 	42	 	 	4 850.00
	 	 	 	 	 	 	 	 	 	 	4.75	%
	4

	 	M
	 	RENSON, BENOIT
	 	18/04/1988
	 	 	16	 	 	10/11/1964
	 	 	40	 	 	4 995.42
	 	 	150	 	 	 	 	 	 	 	4.75	%
	5

	 	M
	 	RIKIR, RAFAELE
	 	18/08/1992
	 	 	12	 	 	11/01/1963
	 	 	41	 	 	8 908.19
	 	 	300	 	 	yes
	 	yes
	 	 	20	%
	6

	 	M
	 	WALRAVE, LUC
	 	01/10/2001
	 	 	3	 	 	20/07/1966
	 	 	38	 	 	5 304.11
	 	 	 	 	 	 	 	 	 	 	4.75	%
	7

	 	M
	 	WILLEM, LUC
	 	04/06/2001
	 	 	3	 	 	08/08/1965
	 	 	39	 	 	4 405.59
	 	 	 	 	 	 	 	 	 	 	4.75	%

 48

 

EXHIBIT I

NOTIFICATION LETTER TO ENVIRONMENTAL AUTHORITIES

PROJET DE NOTIFICATION CONJOINTE DE CHANGEMENT DE TITULAIRE DES PERMIS AUX

AUTORITES COMPETENTES

A l’attention du college des bourgmestre et echevins de et a 1330 RIXENSART,
avenue de Merode, 75

Conformement a l’article 60 du decret du 11 mars 1999 relatif au permis
d’environnement, PHIBRO ANIMAL HEALTH SA, 87a, rue de l’Institut, B-1330
Rixensart, representee par M.

Et

GLAXOSMITHKLINE BIOLOGICALS SA, 89, rue de l’Institut, B-1330 Rixensart,
representee par M.

Vous notifient le changement d’exploitant de l’etablissement de PHIBRO ANIMAL
HEALTH SA, 87a, rue de l’Institut ayant fait l’objet des autorisations
administratives requises ; ce changement interviendra au (CLOSING)

GLAXOSMITHKLINE BIOLOGICALS SA confirme avoir pris connaissance des permis,
poursuivre l’exploitation et accepter les conditions fixees par les permis en
vigueur.

Pourriez-vous nous donner acte de cette declaration et en informer le
fonctionnaire technique.

Fait a ___, le ___.

49

 

EXHIBIT J

INTELLECTUAL PROPERTY

None

50

 

SCHEDULE 2.4

FTE RATE FOR FINISHING ACTIVITIES AND FOR MPL ACTIVITIES

AND OTHER COSTS FOR FINISHING ACTIVITIES

1. FTE RATE FOR FINISHING ACTIVITIES AND FOR MPL ACTIVITIES (BASE SALARY WITHOUT
SHIFT PREMIUM)

Cost per manager = 365.73 Euro per day

Cost per white collar = 283.76 Euro per day

Cost per technician and blue collar = 242.00 Euro per day

2. OTHER COSTS FOR FINISHING ACTIVITIES

Energy cost to run the granulation and downstream process after Closing Date:
200 Euro per ton.

51

 

SCHEDULE 2.4 (B) (II)

DRAWINGS

52

 

SCHEDULE 2.4 (E)

LIST OF MAINTENANCE CONTRACTS RELATED TO THE ACQUIRED ASSETS

	 	 	 
	EQUIPMENT	 	FOURNISSEURS
	Compresseurs frigo McQuay

	 	ACT
	Mesures vibratoires compresseurs

	 	Elap Airel
	No-break B1/B2

	 	MGE
	No-break B6

	 	Socomec
	Groupes electrogenes

	 	EuroDiesel
	Hottes labos

	 	Gera-Filtest
	Etalons industriels

	 	Intermes
	Detection incendie

	 	Siemens
	Sprinklage

	 	Tyco Wormald
	Protection cathodique PAS 41

	 	Fluxys
	Supervision SCADA

	 	Thermo Automation
	HVAC B30

	 	ISB
	Compacteur dechets

	 	AJK

53

 

SCHEDULE 4.8 (C) (IV)

EMPLOYEE BENEFITS

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Compagnie	 	Contrats	 	 
	ASSURANCES
	 	 	 	 	 	 	 	 	 	 
	Assurance Vie/Pension

	 	But a atteindre
	 	Swiss Life
	 	 	G 8552	 	 	O
	 

	 	 	 	 	 	 	G 8554	 	 	E
	 

	 	 	 	 	 	 	G 8556	 	 	C
	 

	 	 	 	 	 	 	G 8558	 	 	D
	 
	 	 	 	 	 	 	 	 	 	 
	Plan Prevoyance — Vie

	 	Prime fixee
	 	Swiss Life
	 	 	G 8572	 	 	O/E/C/D
	 
	 	 	 	 	 	 	 	 	 	 
	Deces

	 	Deces +
	 	Swiss Life
	 	 	G 8552-01-02	 	 	O
	 

	 	Complementaire
	 	 	 	 	G 8554-01-02	 	 	E
	 

	 	Deces/Invalidite
	 	 	 	 	G 8556-01-02	 	 	C
	 

	 	(ass. Facultative)
	 	 	 	 	G 8558-01	 	 	D
	 

	 	(ex Accram)	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Invalitide

	 	 	 	Swiss Life
	 	 	G 8553	 	 	O
	 

	 	 	 	 	 	 	G 8555	 	 	E
	 

	 	 	 	 	 	 	G 8557

G 8559	 	 	C

D
	 
	 	 	 	 	 	 	 	 	 	 
	Hospitalisation

	 	 	 	Swiss Life
	 	 	K 98552	 	 	O
	 

	 	 	 	 	 	 	K 98554	 	 	E
	 

	 	 	 	 	 	 	K 98556	 	 	C
	 

	 	 	 	 	 	 	K 98558	 	 	D
	 
	 	 	 	 	 	 	 	 	 	 
	DKV

	 	Frais ambulatoires
	 	DKV
	 	 	42003979	 	 	All
	 
	 	 	 	 	 	 	 	 	 	 
	Suppletive

	 	 	 	Swiss Life
	 	 	8288	 	 	D
	 
	 	 	 	 	 	 	 	 	 	 
	VOITURES SOCIETE
	 	 	 	 	 	 	 	 	 	 
	Location a long terme

	 	 	 	LeasePlan
	 	 	472.931.319	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	D’Ieteren Lease
	 	 	P0102B	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	CHEQUES-REPAS

	 	Cheques-repas
	 	Sodexho
	 	 	139697	 	 	All
	 
	 	 	 	 	 	 	 	 	 	 
	CENTRALE ACHAT

	 	Carte reduction :
	 	ECONET/NETBUY SA
	 	 	344	 	 	All
	 

	 	mazout/Texaco	 	 	 	 	 	 	 	 

54

 

SCHEDULE 4.8 (C) (VI)

REMUNERATION

This is subject to the 2% maximum salary review for Managers and bonus plan,
agreed upon by the Purchaser and applicable on July 1st, 2005.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	DEATH	 	 	 	 	 	CH.
	 	 	 	 	 	 	 	 	SENIORITY	 	 	 	AGE	 	SALARY	 	 	 	TARGET	 	PART	 	PARENTAL	 	LIFE	 	LIFE	 	SUPP	 	DEATH	 	INVAL	 	/INV	 	HOSP.	 	AMB.	 	REP
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	FIXED	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	NAME	 	ENTRY	 	01/01/04	 	BIRTH	 	01/01/04	 	NOV 2004	 	SHIFT?	 	BONUS	 	TIME	 	LEAVE	 	BAA	 	PR.	 	 	 	 	 	 	 	COMPL.	 	 	 	 	 	 
	1

	 	O
	 	ADAM, DANY
	 	17/12/84
	 	 	20	 	 	09/08/59
	 	 	45	 	 	 	16.84	 	 	 	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	2

	 	O
	 	BEELEN GERY
	 	13/09/99
	 	 	5	 	 	11/02/73
	 	 	31	 	 	 	13.02	 	 	yes
	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	3

	 	O
	 	BORRENS
DOMINIQUE
	 	02/08/02
	 	 	2	 	 	30/04/75
	 	 	29	 	 	 	11.88	 	 	yes
	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	4

	 	O
	 	BROUWERS, ALAIN
	 	12/06/78
	 	 	26	 	 	18/04/57
	 	 	47	 	 	 	15.95	 	 	yes
	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	5

	 	O
	 	CARLIER, DENIS
	 	04/11/96
	 	 	8	 	 	13/08/63
	 	 	41	 	 	 	14.86	 	 	 	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	6

	 	O
	 	COLLIN, LAURENT
	 	02/10/00
	 	 	4	 	 	27/04/78
	 	 	26	 	 	 	12.92	 	 	yes
	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	7

	 	O
	 	COPIN, LUC
	 	26/05/86
	 	 	18	 	 	04/06/65
	 	 	39	 	 	 	15.23	 	 	yes
	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	8

	 	O
	 	DANDUMONT,
JEAN-PAUL
	 	05/08/85
	 	 	19	 	 	06/12/58
	 	 	46	 	 	 	15.23	 	 	yes
	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	9

	 	O
	 	DELENS, LUC
	 	02/12/82
	 	 	22	 	 	15/06/56
	 	 	48	 	 	 	15.60	 	 	yes
	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	10

	 	O
	 	DELLISSE, ALAIN
	 	18/06/90
	 	 	14	 	 	16/05/62
	 	 	42	 	 	 	15.01	 	 	yes
	 	 	 	 	 	 	 	x
	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	11

	 	O
	 	DERYS, ALAIN
	 	10/12/84
	 	 	20	 	 	15/10/56
	 	 	48	 	 	 	17.08	 	 	 	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	12

	 	O
	 	EGGERICKX,
BERTRAND
	 	15/10/86
	 	 	18	 	 	27/09/64
	 	 	40	 	 	 	15.23	 	 	yes
	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	13

	 	O
	 	ESSER, DENIS
	 	14/11/88
	 	 	16	 	 	07/07/68
	 	 	36	 	 	 	15.10	 	 	yes
	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	14

	 	O
	 	ETIENNE, ERIC
	 	01/04/89
	 	 	15	 	 	24/07/65
	 	 	39	 	 	 	15.10	 	 	yes
	 	 	 	 	 	 	 	x
	 	 	 	 	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	15

	 	O
	 	FLORUS, PHILIPPE
	 	12/03/95
	 	 	9	 	 	05/08/55
	 	 	49	 	 	 	13.81	 	 	yes
	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	16

	 	O
	 	KIHL, DANIEL
	 	13/04/87
	 	 	17	 	 	26/07/62
	 	 	42	 	 	 	15.19	 	 	yes
	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	17

	 	O
	 	LOUVIAUX, BENOIT
	 	28/04/81
	 	 	23	 	 	01/12/60
	 	 	44	 	 	 	15.70	 	 	yes
	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	18

	 	O
	 	MAROTTA VINCENZO
	 	02/08/02
	 	 	2	 	 	27/08/71
	 	 	33	 	 	 	11.88	 	 	yes
	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	19

	 	O
	 	MAYNE, PHILIPPE
	 	17/03/82
	 	 	22	 	 	27/07/57
	 	 	47	 	 	 	17.22	 	 	 	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	20

	 	O
	 	MELCHIOR
CHRISTOPHE
	 	17/12/01
	 	 	3	 	 	25/09/79
	 	 	25	 	 	 	13.28	 	 	yes
	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	21

	 	O
	 	MOINI
TABATABAI,
SEYED ALI
	 	11/04/89
	 	 	15	 	 	30/06/60
	 	 	44	 	 	 	15.10	 	 	yes
	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	22

	 	O
	 	NAISSE,
CHRISTIAN
	 	20/10/87
	 	 	17	 	 	24/09/60
	 	 	44	 	 	 	15.19	 	 	yes
	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	23

	 	O
	 	NAMUR,
JEAN-PIERRE
	 	07/04/88
	 	 	16	 	 	20/06/54
	 	 	50	 	 	 	15.15	 	 	yes
	 	 	 	 	 	 	 	x
	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x

55

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	DEATH	 	 	 	 	 	CH.
	 	 	 	 	 	 	 	 	SENIORITY	 	 	 	AGE	 	SALARY	 	 	 	TARGET	 	PART	 	PARENTAL	 	LIFE	 	LIFE	 	SUPP	 	DEATH	 	INVAL	 	/INV	 	HOSP.	 	AMB.	 	REP
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	FIXED	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	NAME	 	ENTRY	 	01/01/04	 	BIRTH	 	01/01/04	 	NOV 2004	 	SHIFT?	 	BONUS	 	TIME	 	LEAVE	 	BAA	 	PR.	 	 	 	 	 	 	 	COMPL.	 	 	 	 	 	 
	24

	 	O
	 	PANADERO
ALCARAZ, GASPAR
	 	08/08/86
	 	 	18	 	 	17/09/57
	 	 	47	 	 	 	15.74	 	 	yes
	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	25

	 	O
	 	PIERRE, PATRICK
	 	02/10/85
	 	 	19	 	 	09/07/56
	 	 	48	 	 	 	16.84	 	 	 	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	26

	 	O
	 	PLUMAT, ALAIN
	 	13/04/92
	 	 	12	 	 	02/02/66
	 	 	38	 	 	 	16.02	 	 	yes
	 	 	 	 	 	 	 	x
	 	 	 	 	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	27

	 	O
	 	RENARD, PIERRE
	 	02/05/95
	 	 	9	 	 	23/03/58
	 	 	46	 	 	 	14.12	 	 	yes
	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	28

	 	O
	 	SELOSSE, CEDRIC
	 	02/05/95
	 	 	9	 	 	03/02/73
	 	 	31	 	 	 	14.12	 	 	yes
	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	29

	 	O
	 	SEVRAIN, BERNARD
	 	02/06/89
	 	 	15	 	 	28/01/64
	 	 	40	 	 	 	15.10	 	 	yes
	 	 	 	 	 	 	 	x
	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	30

	 	O
	 	TOUNE FABRICE
	 	06/02/02
	 	 	2	 	 	07/07/69
	 	 	35	 	 	 	11.88	 	 	yes
	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	31

	 	O
	 	TOUSSAINT,
JEAN-MARIE
	 	24/04/85
	 	 	19	 	 	07/03/58
	 	 	46	 	 	 	15.52	 	 	yes
	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	32

	 	O
	 	VAN BELLE,
JOSEPH
	 	08/04/86
	 	 	18	 	 	16/05/57
	 	 	47	 	 	 	15.23	 	 	yes
	 	 	 	IC80%
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	33

	 	O
	 	VAN ELDOM,
JEAN-LUC
	 	22/05/89
	 	 	15	 	 	31/03/62
	 	 	42	 	 	 	16.63	 	 	yes
	 	 	 	 	 	 	 	x
	 	 	 	 	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	34

	 	O
	 	VAN EYKEN,
MICHEL
	 	30/11/90
	 	 	14	 	 	13/10/67
	 	 	37	 	 	 	14.66	 	 	yes
	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	35

	 	O
	 	VANDERVORST,
RUDY
	 	01/05/89
	 	 	15	 	 	18/08/67
	 	 	37	 	 	 	15.10	 	 	yes
	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	36

	 	O
	 	WASTIELS, LUCIEN
	 	16/06/97
	 	 	7	 	 	07/05/54
	 	 	50	 	 	 	14.86	 	 	 	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	37

	 	O
	 	WINAND, ALAIN
	 	06/12/82
	 	 	22	 	 	02/09/62
	 	 	42	 	 	 	17.16	 	 	 	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	38

	 	E
	 	BASTEYNS, DIDIER
	 	01/01/98
	 	 	6	 	 	18/06/66
	 	 	38	 	 	 	3 304	 	 	 	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	39

	 	E
	 	BEN AHMED NADIA
	 	12/08/02
	 	 	2	 	 	09/08/72
	 	 	32	 	 	 	2 847	 	 	 	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	40

	 	E
	 	BLAIN PHILIPPE
	 	01/02/84
	 	 	20	 	 	25/01/60
	 	 	44	 	 	 	3 265	 	 	 	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	41

	 	E
	 	BORDON,
JEAN-PIERRE
	 	28/05/90
	 	 	14	 	 	12/07/64
	 	 	40	 	 	 	3 209	 	 	 	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	42

	 	E
	 	CASTREMANNE,
STEPHANE
	 	25/03/91
	 	 	13	 	 	02/08/66
	 	 	38	 	 	 	3 304	 	 	 	 	 	 	 	 	 	 	x
	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	43

	 	E
	 	DARDENNE,
BERNARD
	 	01/06/97
	 	 	7	 	 	10/07/54
	 	 	50	 	 	 	3 491	 	 	 	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	44

	 	E
	 	DE BEUGHER,
GREGORY
	 	01/10/00
	 	 	4	 	 	18/08/77
	 	 	27	 	 	 	2 528	 	 	 	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	45

	 	E
	 	DIMITRIADIS,
VASILAKI
	 	01/11/00
	 	 	4	 	 	17/07/63
	 	 	41	 	 	 	3 416	 	 	 	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x

56

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	SENIORITY	 	 	 	AGE	 	SALARY	 	 	 	TARGET	 	PART	 	PARENTAL	 	LIFE	 	LIFE	 	SUPP	 	DEATH	 	INVAL	 	DEATH/INV	 	HOSP.	 	AMB.	 	CH. REP
	 	 	 	 	NAME	 	ENTRY	 	01/01/04	 	BIRTH	 	01/01/04	 	NOV 2004	 	SHIFT?	 	BONUS	 	TIME	 	LEAVE	 	BAA	 	FIXED PR.	 	 	 	 	 	 	 	COMPL.	 	 	 	 	 	 
	46

	 	E
	 	FONTAINE,
MICHEL
	 	13/03/95
	 	 	9	 	 	01/01/68
	 	 	36	 	 	 	3 058	 	 	 	 	 	 	 	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	47

	 	E
	 	GALLEE,
ARNAUD
	 	01/02/89
	 	 	15	 	 	20/01/60
	 	 	44	 	 	 	3 265	 	 	 	 	 	 	 	 	IC80%
	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	48

	 	E
	 	GEENENS
CAROLINE
	 	03/06/02
	 	 	2	 	 	18/04/75
	 	 	29	 	 	 	2 437	 	 	 	 	 	 	 	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	49

	 	E
	 	GILIS,
DIDIER
	 	01/09/98
	 	 	6	 	 	17/05/69
	 	 	35	 	 	 	3 029	 	 	 	 	 	 	 	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	50

	 	E
	 	HANQUET,
MICHEL
	 	28/04/80
	 	 	24	 	 	29/03/54
	 	 	50	 	 	 	3 491	 	 	 	 	 	 	 	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	51

	 	E
	 	HEYLEN,
MARTINE
	 	11/12/78
	 	 	26	 	 	15/05/58
	 	 	46	 	 	 	1 676	 	 	 	 	 	 	 	 	PT50%
	 	 	 	 	 	x
	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	52

	 	E
	 	LEBLANC,
ISABELLE
	 	14/01/91
	 	 	13	 	 	28/06/69
	 	 	35	 	 	 	2 424	 	 	 	 	 	 	 	 	PT80%
	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	53

	 	E
	 	LIBERT,
BENOIT
	 	04/01/93
	 	 	11	 	 	15/05/69
	 	 	35	 	 	 	3 265	 	 	 	 	 	 	 	 	 	 	 	 	 	 	x
	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	54

	 	E
	 	LONFILS
AURELE
	 	01/02/02
	 	 	2	 	 	29/08/60
	 	 	44	 	 	 	2 590	 	 	 	 	 	 	 	 	 	 	 	50	%	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	55

	 	E
	 	MARCUCCI,
LAURA
	 	02/01/91
	 	 	13	 	 	13/09/68
	 	 	36	 	 	 	2 992	 	 	 	 	 	 	 	 	PT80%
	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	56

	 	E
	 	MEUNIER,
ALAIN
	 	02/06/86
	 	 	18	 	 	19/07/59
	 	 	45	 	 	 	3 330	 	 	 	 	 	 	 	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	57

	 	E
	 	MEUNIER,
THIERRY
	 	06/06/86
	 	 	18	 	 	29/11/62
	 	 	42	 	 	 	14.89	 	 	 	 	 	 	 	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	58

	 	E
	 	RAMOS TORNAY
LUIS
	 	01/11/90
	 	 	14	 	 	12/12/61
	 	 	43	 	 	 	3 237	 	 	 	 	 	 	 	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	59

	 	E
	 	REMACLE,
JEAN-MARIE
	 	22/08/88
	 	 	16	 	 	22/10/60
	 	 	44	 	 	 	3 647	 	 	 	 	 	 	 	 	 	 	 	 	 	 	x
	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	60

	 	E
	 	THESIN,
DOMINIQUE
	 	19/12/89
	 	 	15	 	 	27/04/66
	 	 	38	 	 	 	3 117	 	 	 	 	 	 	 	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	61

	 	E
	 	VOS BERANGERE
	 	01/12/01
	 	 	3	 	 	03/05/78
	 	 	26	 	 	 	2 468	 	 	 	 	 	 	 	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	62

	 	E
	 	WIBAUT,
NICOLAS
	 	16/06/91
	 	 	13	 	 	16/05/65
	 	 	39	 	 	 	3 146	 	 	 	 	 	 	 	 	 	 	 	 	 	 	x
	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	63

	 	C
	 	AZORNE LYSIANE
	 	20/08/01
	 	 	3	 	 	06/09/66
	 	 	38	 	 	 	3 611	 	 	 	 	 	2.75	%	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	64

	 	C
	 	BARKET, MICHEL
	 	01/09/87
	 	 	17	 	 	11/06/54
	 	 	50	 	 	 	5 182	 	 	 	 	 	2.75	%	 	 	 	 	 	 	 	x
	 	 	 	 	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	65

	 	C
	 	BORZYK,
DIMITRI
	 	01/09/95
	 	 	9	 	 	23/08/64
	 	 	40	 	 	 	3 921	 	 	 	 	 	2.75	%	 	 	 	 	 	 	 	x
	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	66

	 	C
	 	CASTELLI,
DANIEL
	 	02/11/98
	 	 	6	 	 	20/03/70
	 	 	34	 	 	 	2 924	 	 	yes
	 	 	2.75	%	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	67

	 	C
	 	CHARLES,
PHILIPPE
	 	17/11/86
	 	 	18	 	 	16/08/63
	 	 	41	 	 	 	4 969	 	 	 	 	 	2.75	%	 	 	 	 	 	 	 	x
	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	68

	 	C
	 	CHARMOT
JEAN-FRANCOIS
	 	01/10/99
	 	 	5	 	 	10/11/70
	 	 	34	 	 	 	2 780	 	 	yes
	 	 	2.75	%	 	 	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x

57

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	SENIORITY	 	 	 	AGE	 	SALARY	 	 	 	TARGET	 	PART	 	PARENTAL	 	LIFE	 	LIFE	 	SUPP	 	DEATH	 	INVAL	 	DEATH/INV	 	HOSP.	 	AMB.	 	CH. REP
	 	 	 	 	NAME	 	ENTRY	 	01/01/04	 	BIRTH	 	01/01/04	 	NOV 2004	 	SHIFT?	 	BONUS	 	TIME	 	LEAVE	 	BAA	 	FIXED PR.	 	 	 	 	 	 	 	COMPL.	 	 	 	 	 	 
	69

	 	C
	 	COREMANS,
JEAN-MARC
	 	01/10/86
	 	 	18	 	 	29/06/59
	 	 	45	 	 	4 575
	 	 	 	 	2.75	%	 	 	 	 	 	x
	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	70

	 	C
	 	GEORGES,
PATRICE
	 	01/06/92
	 	 	12	 	 	21/07/63
	 	 	41	 	 	4 321
	 	 	 	 	2.75	%	 	 	 	 	 	x
	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	71

	 	C
	 	HEILPORN,
SYLVIE
	 	01/02/00
	 	 	4	 	 	12/12/63
	 	 	41	 	 	4 331
	 	 	 	 	2.75	%	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	72

	 	C
	 	JOLY,
VALERIE
	 	20/11/95
	 	 	9	 	 	04/04/73
	 	 	31	 	 	3 077
	 	 	 	 	2.75	%	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	73

	 	C
	 	LECAILLE,
ANTOINE
	 	01/06/98
	 	 	6	 	 	26/12/69
	 	 	35	 	 	2 982
	 	yes
	 	 	2.75	%	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	74

	 	C
	 	LEMAIRE,
JEAN-LUC
	 	10/02/97
	 	 	7	 	 	14/05/69
	 	 	35	 	 	4 167
	 	 	 	 	2.75	%	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	75

	 	C
	 	MARNEFFE,
THIERRY
	 	01/03/84
	 	 	20	 	 	01/12/58
	 	 	46	 	 	5 140
	 	 	 	 	2.75	%	 	 	 	 	 	x
	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	76

	 	C
	 	MARY, DANIEL
	 	27/04/87
	 	 	17	 	 	22/05/63
	 	 	41	 	 	3 750
	 	 	 	 	2.75	%	 	 	 	 	 	x
	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	77

	 	C
	 	MEURISSE,
ERIC
	 	02/01/96
	 	 	8	 	 	25/06/66
	 	 	38	 	 	4 302
	 	 	 	 	2.75	%	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	78

	 	C
	 	PIECQ, MARTINE
	 	01/01/92
	 	 	12	 	 	22/11/57
	 	 	47	 	 	4 886
	 	 	 	 	2.75	%	 	 	 	 	 	x
	 	 	 	 	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	79

	 	C
	 	PIERARD,
DIDIER
	 	16/10/95
	 	 	9	 	 	09/07/70
	 	 	34	 	 	2 837
	 	yes
	 	 	2.75	%	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	80

	 	C
	 	ROUXHET,
CHRISTOPHE
	 	23/06/97
	 	 	7	 	 	27/08/72
	 	 	32	 	 	3 338
	 	 	 	 	2.75	%	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	81

	 	C
	 	WEGRIA,
STEPHANE
	 	18/10/99
	 	 	5	 	 	17/02/76
	 	 	28	 	 	2 914
	 	 	 	 	2.75	%	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	SENIORITY	 	 	 	AGE	 	SALARY	 	 	 	 	 	 	 	TOP II at	 	TARGET	 	LIFE	 	LIFE	 	SUPP	 	DEATH	 	INVAL	 	DEATH/INV	 	HOSP.	 	AMB.	 	CH. REP
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	MONTHLY	 	Cdegrees	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	NAME	 	ENTRY	 	01/01/04	 	BIRTH	 	01/01/04	 	NOV 2004	 	ALLOWANCE	 	CAR	 	INSURANCE	 	BONUS	 	BAA	 	FIXED PR.	 	 	 	 	 	 	 	COMPL.	 	 	 	 	 	 
	1

	 	M
	 	BERNARD,
ANDRE
	 	05/01/87
	 	 	17	 	 	06/09/63
	 	 	41	 	 	5 953.16
	 	 	 	 	 	yes
	 	yes
	 	 	15	%	 	x
	 	 	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	 	x
	2

	 	M
	 	GOSSELE,
FRANCIS
	 	16/09/85
	 	 	19	 	 	13/10/56
	 	 	48	 	 	6 914.88
	 	 	225	 	 	yes
	 	yes
	 	 	15	%	 	x
	 	x
	 	x
	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	3

	 	M
	 	RENARD,
PHILIPPE
	 	05/01/87
	 	 	17	 	 	05/10/62
	 	 	42	 	 	4 850.00
	 	 	 	 	 	 	 	 	 	 	4.75	%	 	x
	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	4

	 	M
	 	RENSON, BENOIT
	 	18/04/88
	 	 	16	 	 	10/11/64
	 	 	40	 	 	4 995.42
	 	 	150	 	 	 	 	 	 	 	4.75	%	 	x
	 	 	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	5

	 	M
	 	RIKIR, RAFAELE
	 	18/08/92
	 	 	12	 	 	11/01/63
	 	 	41	 	 	8 908.19
	 	 	300	 	 	yes
	 	yes
	 	 	20	%	 	x
	 	x
	 	x
	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	6

	 	M
	 	WALRAVE, LUC
	 	01/10/01
	 	 	3	 	 	20/07/66
	 	 	38	 	 	5 304.11
	 	 	 	 	 	 	 	 	 	 	4.75	%	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x
	7

	 	M
	 	WILLEM, LUC
	 	04/06/01
	 	 	3	 	 	08/08/65
	 	 	39	 	 	4 405.59
	 	 	 	 	 	 	 	 	 	 	4.75	%	 	x
	 	x
	 	 	 	x
	 	x
	 	 	 	x
	 	x
	 	x

58

 

SCHEDULE 6.3

GUARANTEE

A. To induce Glaxosmithkline Biologicals SA (“GSK”), with registered office at
89, Rue de l’Institut, 1330 Rixensart, Belgium, to enter into the Business
Purchase Agreement to be dated December ___, 2004 (the “Business Purchase
Agreement”) between Phibro Animal Health SA (“Phibro Belgium”), with registered
office at 87a, Rue de l’Institut, 1330 Rixensart, Belgium, and GSK, Phibro
Animal Health Corporation, a New York corporation with registered office at
[___], (“Guarantor”), hereby :

     (i) irrevocably and unconditionally guarantees the due and punctual
performance of any and all obligations and liabilities of Phibro Belgium (but
excluding any indemnification under Section 6.1.6) under or pursuant to the
Business Purchase Agreement (“Obligations”) during a period of three (3) years
from the Closing Date, and

     (ii) irrevocably and unconditionally undertakes to pay, upon GSK’s first
written demand, any costs, expenses, loss and damages howsoever arising from a
breach by Phibro Belgium of its Obligations and for which GSK has made a claim
under this Guarantee by registered letter sent to Guarantor within, three (3)
years from the Closing Date, including all expenses and costs (including
reasonable attorneys’ fees) incurred by GSK in enforcing this Guarantee against
the Guarantor, up to the aggregate amount of 6.2 million EUR (the “Maximum
Amount”).

          The Maximum Amount shall automatically reduce and decline by the
amount of any payment made to GSK in respect of Obligations of Phibro Belgium
(but excluding any indemnification under Section 6.1.6), it being understood,
however, that the Maximum Amount shall not reduce and decline by the amount of
the clean-up and demolition costs payable by Phibro Belgium to GSK pursuant to
Section 2.3.(b) of the Business Purchase Agreement.

B. Demand for payment under this Guarantee shall be made by written notice from
GSK to the Guarantor at the Guarantor’s principal executive offices as set out
above. Such demand shall specify in reasonable detail the basis for such demand.

C. This Guarantee is not a guaranty of and does not cover any Obligations of
Phibro Belgium in excess of the Maximum Amount.

D. This Guarantee shall terminate upon the third anniversary of the Closing Date
and shall only apply to those Obligations (up to the Maximum Amount) of Phibro
Belgium incurred prior to such termination.

59

 

E. Subject to paragraphs C and D above, this Guarantee and the obligations of
the Guarantor hereunder shall be unaffected and unimpaired by or by reason of
any invalidity, irregularity, illegality, voidness, voidability or
unenforceability of the Business Purchase Agreement or any of the Obligations.

F. The Guarantor shall not be discharged or released from its undertakings
hereunder by any modification, amendment of, or changes to the terms of the
Business Purchase Agreement, nor by any waiver by GSK of any of the terms of the
Business Purchase Agreement, nor by any failure by GSK to insist on the proper
performance of the Business Purchase Agreement or to pursue all remedies
available to it against the Guarantor, nor by granting of extension of time or
other indulgence or concession to the Guarantor, nor by any forbearance,
forgiveness or any other thing done, omitted or neglected under the Business
Purchase Agreement or by any other bond, security or guarantee.

G. This Guarantee shall continue to be effective, or be reinstated, as the case
may be, with respect to Obligations incurred prior to the termination of this
Guarantee and which are guaranteed hereby, if at any time due and punctual
performance by Phibro Belgium of any of the Obligations is rescinded, cancelled
or declared null and void upon the insolvency, bankruptcy or reorganization of
Phibro Belgium, or in accordance with any other law affecting or available to
creditors or otherwise, all as though such performance had not been made.

H. GSK may freely assign, transfer or otherwise alienate any or all of its
rights under this Guarantee to any assignee or transferee of its rights and
obligations under the Business Purchase Agreement in which case the Guarantee
shall inure to the benefit of the successors and assigns of GSK.

               The Guarantor may not assign any of its rights or transfer any of its
obligations under this Guarantee or enter into any transaction which would
result in any of those rights or obligations passing to another person or legal
entity, save with GSK’s prior written consent in which case this Guarantee shall
be binding upon the successors and assigns of the Guarantor.

I. This Guarantee may be amended or waived only by a writing jointly signed by
GSK and the Guarantor.

J. Phibro Animal Health Corporation represents that it is the ultimate parent
company of Phibro Belgium, and Guarantor represents that it has fully complied
with its articles of association and other legal provisions related to the
validity and enforceability of the present Guarantee and that this Guarantee has
been duly executed by its authorised representatives.

K. This Guarantee is governed by the laws of the Kingdom of Belgium. Any dispute
arising out or in connection with this Guarantee shall be submitted to the
exclusive jurisdiction of the Courts of Brussels.

60

 

	 	 	 	 	 	 	 
	Dated as of: December ___, 2004
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	PHIBRO ANIMAL HEALTH CORPORATION
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

61EX-10.1

 

Exhibit 10.1

AMENDED AND RESTATED

STRATEGIC ALLIANCE AGREEMENT

(Nicotinic Alpha-7 Program)

 

among

 

F. Hoffmann-La Roche Ltd

 

and Hoffmann-La Roche Inc.

 

and

 

Memory Pharmaceuticals Corp.

 

 

Table of Contents

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	ARTICLE 1.
	 	DEFINITIONS	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE 2.
	 	GRANTS	 	 	8	 
	 
	 	 	 	 	 	 
	ARTICLE 3.
	 	DILIGENCE	 	 	10	 
	 
	 	 	 	 	 	 
	ARTICLE 4.
	 	PAYMENTS TO MEMORY	 	 	13	 
	 
	 	 	 	 	 	 
	ARTICLE 5.
	 	ROYALTIES	 	 	13	 
	 
	 	 	 	 	 	 
	ARTICLE 6.
	 	PAYMENT, REPORTING, AUDITING	 	 	18	 
	 
	 	 	 	 	 	 
	ARTICLE 7.
	 	GOVERNANCE; STRATEGIC ALLIANCE	 	 	20	 
	 
	 	 	 	 	 	 
	ARTICLE 8.
	 	INTENTIONALLY OMITTED	 	 	24	 
	 
	 	 	 	 	 	 
	ARTICLE 9.
	 	CLINICAL DEVELOPMENT AND REGULATORY MATTERS	 	 	24	 
	 
	 	 	 	 	 	 
	ARTICLE 10.
	 	MANUFACTURE AND SUPPLY	 	 	26	 
	 
	 	 	 	 	 	 
	ARTICLE 11.
	 	COMMERCIALIZATION	 	 	26	 
	 
	 	 	 	 	 	 
	ARTICLE 12.
	 	TRADEMARKS	 	 	26	 
	 
	 	 	 	 	 	 
	ARTICLE 13.
	 	OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS	 	 	26	 
	 
	 	 	 	 	 	 
	ARTICLE 14.
	 	REPRESENTATIONS AND WARRANTIES	 	 	33	 
	 
	 	 	 	 	 	 
	ARTICLE 15.
	 	CONFIDENTIAL INFORMATION	 	 	35	 
	 
	 	 	 	 	 	 
	ARTICLE 16.
	 	TERM AND TERMINATION	 	 	38	 
	 
	 	 	 	 	 	 
	ARTICLE 17.
	 	ARBITRATION	 	 	43	 
	 
	 	 	 	 	 	 
	ARTICLE 18.
	 	MISCELLANEOUS	 	 	43	 

Schedules and Exhibits

	 	 	 
	SCHEDULE 1
	 	COMPOUND 3454 DATA AND REPORTS
	 
	 	 
	SCHEDULE 2
	 	INTENTIONALLY OMITTED
	 
	 	 
	SCHEDULE 3
	 	[*] GUIDELINES FOR COMPOUNDS
	 
	 	 
	SCHEDULE 4
	 	END OF PHASE I CRITERIA
	 
	 	 
	EXHIBIT A
	 	WORKPLAN
	 
	 	 
	EXHIBIT B
	 	PAYMENTS WITH RESPECT TO 3454 PRODUCTS
	 
	 	 
	EXHIBIT C
	 	PAYMENTS WITH RESPECT TO MEMORY PRODUCTS
	 
	 	 
	EXHIBIT D
	 	PAYMENTS WITH RESPECT TO COLLABORATION PRODUCTS
	 
	 	 
	EXHIBIT E
	 	ROYALTIES WITH RESPECT TO 3454 PRODUCTS
	 
	 	 
	EXHIBIT F
	 	ROYALTIES WITH RESPECT TO MEMORY PRODUCTS

[*] CONFIDENTIAL TREATMENT REQUESTED

 i 

 

 

	 	 	 
	EXHIBIT G
	 	ROYALTIES WITH RESPECT TO COLLABORATION PRODUCTS
	 
	 	 
	EXHIBIT H
	 	INTENTIONALLY OMITTED
	 
	 	 
	EXHIBIT I
	 	MEMORY PATENT RIGHTS
	 
	 	 
	EXHIBIT J
	 	MEMORY PATENT RIGHTS PRIMARILY APPLICABLE TO MEMORY SCREENING TECHNOLOGY
	 
	 	 
	EXHIBIT K
	 	HEADS OF AGREEMENT FOR CO-PROMOTION OF 3454 PRODUCT
	 
	 	 
	EXHIBIT L
	 	INCLUDED ROCHE COMPOUNDS

[*] CONFIDENTIAL TREATMENT REQUESTED

ii

 

 

AMENDED AND RESTATED STRATEGIC ALLIANCE AGREEMENT

          This AGREEMENT, having a date of February 27, 2006, is made by and among, on the one hand, F.
HOFFMANN-LA ROCHE LTD, a Swiss corporation having its principal place of business at
Grenzacherstrasse 124, CH-4070, Basel, Switzerland and HOFFMANN-LA ROCHE INC., a New Jersey
corporation, having its principal place of business at 340 Kingsland Street, Nutley, New Jersey
07110 (collectively “Roche”) and, on the other hand, MEMORY PHARMACEUTICALS CORP., a
Delaware corporation, having its principal place of business at 100 Philips Parkway, Montvale, New
Jersey 07645 (“Memory”). This “Agreement” means this Amended and Restated
Strategic Alliance Agreement, as hereafter amended or otherwise modified.

INTRODUCTION

	1.	 	Memory has a research and development program relating to the neuronal nicotinic alpha-7
receptor (“Memory’s Program”), and owns related intellectual property rights.

	 
	2.	 	Roche has a research and development program relating to the neuronal nicotinic alpha-7
receptor, and owns related intellectual property rights (“Roche’s Program” and
together with Memory’s Program, the “Program”).

	 
	3.	 	Roche has expertise in the research, development, manufacture and commercialization of
pharmaceutical products.

	 
	4.	 	Memory and Roche previously entered into a Strategic Alliance Agreement dated August 19, 2003
with respect to Memory’s Program (the “Original Strategic Alliance Agreement”) and
Memory and Roche desire to amend and restate the Original Strategic Alliance Agreement in its
entirety.

	 
	5.	 	In consideration of the mutual covenants and promises contained in this Agreement and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Memory and Roche hereby amend and restate the Original Strategic Alliance Agreement in its
entirety and agree as follows:

Article 1. Definitions

          As used in this Agreement, the following terms, whether used in the singular or plural, shall
have the following meanings:

	1.1	 	“Affiliate” means (a) a business entity which owns, directly or indirectly, at least
fifty percent (50%) of the voting shares or other means of control of a Party; or (b) a
business entity in which at least fifty percent (50%) of the voting shares or other means of
control are owned by a Party, either directly or indirectly; or (c) a business entity, the
majority ownership of which is directly or indirectly common to the majority ownership of a
Party. Anything to the contrary in this paragraph notwithstanding, [*] a Delaware
corporation, shall not be deemed an Affiliate of Roche unless Roche provides written notice to
Memory of its desire to include [*] as an Affiliate of Roche. Notwithstanding

[*] CONFIDENTIAL TREATMENT REQUESTED

1

 

	 	 	the preceding provisions, once an entity ceases to be an Affiliate, then such entity shall,
without any further action, cease to have any rights, including license and sublicense
rights, under this Agreement that it has by reason of being an Affiliate.

	 
	 	 	If [*] does not agree to be bound by the terms and conditions of this Agreement, then [*]
shall have none of the rights and obligations of an Affiliate of Roche under this Agreement,
and [*] shall be treated as a Third Party under this Agreement and, accordingly, Roche may
not grant a sublicense to [*] except as provided in Section 2.4 hereof.

	 
	1.2	 	“Agreement Term” means the term of this Agreement, more fully described in Section
16.2.

	 
	1.3	 	“Bioequivalent Product” means, with respect to a given Product sold in a given
country of the Territory by Roche, its Affiliate or sublicensee, a product sold by a Third
Party in such country containing the same or similar compound (or an acid, salt or ester
thereof) as such Product.

	 
	1.4	 	“Change of Control” means (i) the sale, lease, exchange, transfer or other
disposition (including, without limitation, by merger, consolidation or otherwise) of assets
constituting all or substantially all of the assets of the company and its subsidiaries, taken
as a whole, to a person (or entity) or group of persons (or entities) acting together, (ii)
any merger, consolidation or other business combination or refinancing or recapitalization of
the company as a result of which the voting securities of the continuing or surviving entity
issued in respect of the company’s voting securities outstanding immediately prior to the
transaction represent less than [*] % of the total issued and outstanding voting securities of
the continuing or surviving entity immediately following such transaction, (iii) any
transaction or series of transactions in or as a result of which any “person” (as that term is
defined in Sections 3(a)(9) or 13(d) of the Securities Exchange Act of 1934, as amended (the
“1934 Act”)) becomes the “beneficial owner” (as that term is defined in Rule 13d-3 under the
1934 Act), directly or indirectly, of securities of the company representing [*] % or more of
the total voting power represented by the company’s then outstanding voting securities, and
(iv) whether by virtue of an actual or threatened proxy contest (including a consent
solicitation) or any merger, reorganization, consolidation or similar transaction persons who
are directors of the company immediately prior to such proxy contest or the execution of the
agreement pursuant to which such transaction is consummated (other than a director whose
initial assumption of office was in connection with a prior actual or threatened proxy
contest) cease to constitute [*] of the Board of Directors of the company or any successor
entity immediately following such proxy contest or the consummation of such transaction.

	 
	1.5	 	“Collaboration Compound” means (a) a compound (or a prodrug or metabolite thereof)
other than a Memory Compound or Compound 3454, which is: (i) a nicotinic alpha-7 agonist [*]
that is conceived, acquired or Controlled by either Party prior to the date hereof and (ii)
has previously been demonstrated by either Party to have Threshold Activity prior to the
Effective Date or during the Extended Period [*] or (b) a compound (or a prodrug or metabolite
thereof), other than a Memory Compound or Compound

[*] CONFIDENTIAL TREATMENT REQUESTED

2

 

	 	 	 	3454, which is: (i) a nicotinic alpha-7 agonist [*] is conceived, acquired or Controlled by
either party after the date hereof and prior to the end of the Extended Period and (ii)
demonstrated by either Party to have Threshold Activity prior to the end of the Extended
Period.

	 
	 	1.6	 	“Collaboration Patent Rights” means all Patent Rights other than Memory Patent Rights
that Memory and/or Roche owns or Controls during the Agreement Term that Cover any
Collaboration Compound and/or relating to any other invention conceived, acquired or
Controlled by either Party during the Extended Period.

	 
	 	1.7	 	“Collaboration Product” means any pharmaceutical product that includes, in whole or
as a component, a Collaboration Compound as an active ingredient thereof.

	 
	 	1.8	 	“Combination Product” means any product containing both a pharmaceutically active
agent which causes it to be considered a Product and one or more other pharmaceutically active
agents which are not Products.

	 
	 	1.9	 	“Composition of Matter Claim” means, for a given Product in a given country of the
Territory, a Valid Claim of a Memory Patent Right and/or a Collaboration Patent Right that
Covers the molecule per se of any compound that is included in such Product, in whole or as a
component thereof, as an active ingredient of such Product.

	 
	 	1.10	 	“Compound” means any Memory Compound, Collaboration Compound or, from and after the
date that Roche obtains a License to Compound 3454 pursuant to Section 2.1 hereof, Compound
3454.

	 
	 	1.11	 	“Compound 3454” means the compound developed by Memory, designated as “compound 3454”
[*].

	 
	 	1.12	 	“Control” (including the variations such as “Controls” or “Controlled”) means with
respect to a Party and as to any material, data, information or intellectual property right,
that such Party owns, co-owns or has a license to such material, data, information or
intellectual property right and has the ability to grant access a license, or a sublicense to
such material, data, information or intellectual property right to the other Party and its
Affiliates and Sublicensees for use or application as provided herein, without violating an
agreement with, or infringing any rights of, a Third Party.

	 
	 	1.13	 	“Cover” (including the variations such as “Covered”, “Coverage” or “Covering”) shall
mean that the making, using, offering for sale, selling, importing or exporting of a given
product would infringe a claim of a Patent Right in the absence of a License under such Patent
Right. The determination of whether a product is Covered by a particular Patent Right shall
be made on a country-by-country basis.

	 
	 	1.14	 	“Effective Date” means the date that all conditions subsequent under Section 16.1
have occurred provided that if Section 16.1 is inapplicable, Effective Date means the date on
which this Agreement was last executed by Memory or Roche.

	 
	 	1.15	 	“End of Phase I” means the date that all Phase I clinical trials have been completed.

[*] CONFIDENTIAL TREATMENT REQUESTED

3

 

	1.16	 	“End of Phase IIa” means the date that all Phase IIa clinical trials have been
completed.

	 
	1.17	 	“Europe” means the United Kingdom, Germany, Italy, France and Spain.

	 
	1.18	 	“Event” means any of the events listed in Section 5.9 hereof and Exhibits B through G
hereto with respect to which payments are required to be made by Roche to Memory as provided
therein.

	 
	1.19	 	“Extended Period” means the period commencing on the Effective Date and ending on the
later of (a) the date that is six (6) months after the end of the Strategic Alliance Term and
(b) March 31, 2008.

	 
	1.20	 	“Field” means prophylaxis and treatment of diseases, in all indications, for either
human or veterinary use.

	 
	1.21	 	“FTE” means a full-time equivalent scientific person year, consisting of a total of
1840 hours per year of scientific work on an annualized basis, in the conduct of the Program.

	 
	1.22	 	“Included Roche Compounds” means the compounds listed on Exhibit L [*].

	 
	1.23	 	“IND” means an Investigational New Drug Application filed with the US Food and Drug
Administration (“FDA”) for human clinical testing of a drug.

	 
	1.24	 	“Indication” means a Neurological Indication, a Psychiatric Indication or an Other
Indication.

	 
	1.25	 	“Initiation of Phase I” means the date that a human is first dosed with a Product in
a Phase I clinical trial.

	 
	1.26	 	“Initiation of Phase IIa” means the date that a patient is first dosed with a Product
in a Phase IIa clinical trial.

	 
	1.27	 	“Initiation of Phase III” means the date that a patient is first dosed with a Product
in a Phase III clinical trial.

	 
	1.28	 	“Invention” means an invention that is made in the conduct of the Strategic Alliance.

	 
	1.29	 	“Joint Patent Rights” means all Patent Rights that Memory and Roche jointly own, or
otherwise jointly have the right to grant the licenses herein, during the Agreement Term.

	 
	1.30	 	“JSC” means the committee organized and operating as provided in Article 7.

	 
	1.31	 	“Know-How” means data, knowledge and information, including materials, samples,
chemical manufacturing data, toxicological data, pharmacological data, preclinical data,
assays, platforms, formulations, specifications, quality control testing data, that are
necessary or useful for the discovery, manufacture, development or commercialization of
Product in the Territory.

[*] CONFIDENTIAL TREATMENT REQUESTED

4

 

	1.32	 	“Launch” means, with respect to a Product in a country of the Territory, the date of
the first commercial sale by Roche, its Affiliate or its sublicensee of the given Product in
the given country after Regulatory Approval, if any, in such country.

	 
	1.33	 	“License Exercise Period” means, with respect to Compound 3454, the sixty (60) day
period immediately following the later of the End of Phase IIa or the date of delivery by
Memory to Roche of the data and reports specified in Schedule 1 related to such Compound 3454.

	 
	1.34	 	“License Rights Maintenance Fees” means, with respect to any Product, the payments by
Roche to Memory pursuant to Section 4.4 hereof.

	 
	1.35	 	“Major Market Countries” means the US, Canada, Japan and Europe.

	 
	1.36	 	“Memory Compound” means any compound which is a nicotinic alpha-7 agonist [*] (a) (i)
the composition of matter of which is Covered in the United States by any of the Memory Patent
Rights as of the Effective Date or (ii) that is listed in a letter of even date from Memory to
Roche and (b) demonstrated by either Party to have Threshold Activity prior to the Effective
Date or during the Extended Period provided that Compound 3454 is not a Memory Compound.

	 
	1.37	 	“Memory Know-How” means all Know-How that Memory owns or Controls during the Extended
Period and thereafter, to the extent necessary for the discovery, manufacture, development,
making use, sale or commercialization of Product in the Territory, during the Agreement Term.

	 
	1.38	 	“Memory Patent Rights” means all Patent Rights that Memory owns, or otherwise has the
right to grant the licenses herein, (a) as of the Effective Date, and listed in Exhibit I
hereto, (b) that Covers a Memory Compound during the Agreement Term or (c) if Roche exercises
the License to Compound 3454, that Covers Compound 3454 during the Agreement Term.

	 
	1.39	 	“Memory Product” means any pharmaceutical product that includes, in whole or as a
component, any Memory Compound as an active ingredient thereof.

	 
	1.40	 	“NDA” means a New Drug Application filed with the FDA, or its foreign equivalent, for
a drug.

	 
	1.41	 	“NDA Filing” means for a given Product, the date that an NDA is filed for the
Product.

	 
	1.42	 	“Net Sales” and the related term “Adjusted Gross Sales” mean:

	 
	 	 	“Adjusted Gross Sales” means the amount of gross sales of the Product invoiced by Roche, its
Affiliates and its sub-licensees to independent third parties less deductions of returns and
return reserves (such reserves consistent with Generally Accepted Accounting Principles)
(including allowances actually given for spoiled, damaged, out-dated, rejected, returned
Product sold, withdrawals and recalls), rebates to the extent consistently applied by Roche
to its products (price reductions, rebates to social and

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	 	 	welfare systems, charge backs and charge back reserves (such reserves consistent with
Generally Accepted Accounting Principles), cash sales incentives (but only to the extent it
is a sales related deduction which is accounted for within Roche on a product-by-product
basis)), government mandated rebates and similar types of rebates (e.g., P.P.R.S, Medicaid,
each as consistently applied by Roche to its products), volume (quantity) discounts, each as
consistently applied by Roche to its products, taxes (value added or sales taxes, government
mandated exceptional taxes and other taxes directly linked to the gross sales amount), it
being understood that income and capital gains taxes are not the type of taxes contemplated
as a deduction in this definition of Adjusted Gross Sales.

	 
	 	 	“Net Sales” means, for the US, the amount calculated by subtracting from the amount of
Adjusted Gross Sales a lump sum deduction of [*] percent ([*]%) of Adjusted Gross Sales in
lieu of those sales related deductions which are not accounted for within Roche on a product
by product basis (e.g. outward freights, postage charges, transportation insurance,
packaging materials for dispatch of goods, custom duties, bad debt, discounts granted later
than at the time of invoicing, and cash discounts).

	 
	 	 	“Net Sales” means, for the ROW Territory, the amount calculated by subtracting from the
amount of Adjusted Gross Sales a lump sum deduction of [*] percent ([*]%) of Adjusted Gross
Sales in lieu of those sales related deductions which are not accounted for within Roche on
a product by product basis (e.g. outward freights, postage charges, transportation
insurance, packaging materials for dispatch of goods, custom duties, bad debt, discounts
granted later than at the time of invoicing, and cash discounts).

	 
	 	 	Notwithstanding the foregoing, amounts received by Roche, its Affiliates and sublicensees
for the sale of Product among Roche, its Affiliates or sublicensees for resale shall not be
included in the computation of Adjusted Gross Sales and Net Sales.

	 
	1.43	 	“Neurological Indication” means prophylaxis or treatment of Alzheimer’s disease
(including management of psychotic symptoms of Alzheimer’s disease), prophylaxis or treatment
of mild cognitive impairment (“MCI”) or treatment of vascular dementia.

	 
	1.44	 	“Other Indication” means any indication other than a Neurological Indication or a
Psychiatric Indication.

	 
	1.45	 	“Party” means Roche and/or Memory.

	 
	1.46	 	“Patent Right” means all rights under any patent or patent application in any country
of the Territory, including any substitution, extension or supplementary protection
certificate, reissue, reexamination, renewal, division, continuation or continuations-in-part
thereof, relating to the discovery, manufacture, development or commercialization of nicotinic
alpha-7 agonist [*] compounds in the Territory.

	 
	1.47	 	“Phase I” means the first phase of human clinical trials of a drug required by the US
FDA to gain evidence of safety in volunteers, as described in 21 CFR Part 312, as it may be
amended.

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	1.48	 	“Phase II” means the second phase of human clinical trials of a drug required by the
US FDA to gain evidence of efficacy in the target population, determine optimal dosage, and
obtain expanded evidence of safety for Product(s), as described in 21 CFR Part 312, as it may
be amended.

	 
	1.49	 	“Phase IIa” means one or more Phase IIa trials (at least one of which is conducted in
a Major Market Country) collectively designed to demonstrate preliminary proof of clinical
efficacy using medically recognized surrogate markers or end points.

	 
	1.50	 	“Phase IIb” means one or more Phase IIb trials (at least one of which trials was
conducted in a Major Market Country) collectively designed to demonstrate efficacy of a
pharmaceutical product in a target population and/or to establish the optimal dosing regimen
for such product.

	 
	1.51	 	“Phase III” means the third phase of human clinical trials of a drug required by the
US FDA to gain evidence of efficacy in the target population, and obtain expanded evidence of
safety for Product(s), as described in 21 CFR Part 312, as it may be amended.

	 
	1.52	 	“Product” means any and all products that include, in whole or as a component
thereof, a Memory Compound, Collaboration Compound or, after Roche obtains a License to
Compound 3454 pursuant to Section 2.1 hereof, Compound 3454, as an active ingredient thereof.

	 
	1.53	 	“Psychiatric Indication” means schizophrenia (including management of the
manifestations of symptoms of schizophrenia), depression, bipolar disorders, anxiety and ADHD.

	 
	1.54	 	[*] means, with respect to any Compound, [*].

	 
	1.55	 	[*] means, with respect to any Compound, [*].

	 
	1.56	 	“Regulatory Approval” means any approvals (including pricing and reimbursement
approvals), licenses, registrations or authorizations of any national or international or
local regulatory agency, department, bureau or other governmental entity, necessary for the
manufacture and sale of a Product in the Field in a regulatory jurisdiction in the Territory.

	 
	1.57	 	“Roche Patent Rights” means all Patent Rights that Roche owns, or otherwise has the
right to grant the licenses herein, during the Agreement Term.

	 
	1.58	 	“ROW Territory” means all countries and territories other than the US.

	 
	1.59	 	“Strategic Alliance” means discovery and development by Memory and/or Roche and its
Affiliates of pharmaceuticals acting against nicotinic alpha-7 receptor and development and
commercialization of such pharmaceuticals by Roche and/or Memory, as provided for in this
Agreement.

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	1.60	 	“Strategic Alliance Term” means the period commencing on the Effective Date and
ending on December 31, 2007, as such period may be extended by mutual agreement of the Parties
in writing.

	 
	1.61	 	“Territory” means all countries and territories in the world.

	 
	1.62	 	“Third Party” means a person or entity other than (i) Memory or any of its
Affiliates, or (ii) Roche or any of its Affiliates.

	 
	1.63	 	“Threshold Activity” means [*].

	 
	1.64	 	“3454 Product” means any pharmaceutical product that includes, in whole or as a
component, the Compound 3454 as an active ingredient thereof.

	 
	1.65	 	“US” means the United States of America and its possessions and territories,
including Puerto Rico.

	 
	1.66	 	“Valid Claim” means a claim in any (i) unexpired and issued Memory Patent Right or
Collaboration Patent Right that has not been disclaimed, revoked or held invalid by a final
unappealable decision of a court of competent jurisdiction or government agency or (ii)
pending patent application that is a Memory Patent Right or Collaboration Patent Right, which
application has been on file with the applicable patent office for no more than ten (10) years
and for which there has been reasonably consistent activity to advance to issuance of a
patent.

Article 2. Grants

	2.1	 	Grants. Subject to the terms and conditions of this Agreement, Memory hereby grants
to Roche a sole and exclusive license, including the right to grant sublicenses pursuant to
Section 2.4, under the Memory Patent Rights and Memory’s interest in the Collaboration Patent
Rights and to use the Memory Know-How, to make, use, offer for sale, sell, import and export
all Products other than Compound 3454 in the Territory for use in the Field. Subject to the
terms and conditions of this Agreement, during the License Exercise Period, Roche shall have
the right with respect to Compound 3454 to obtain a sole and exclusive license, including the
right to grant sublicenses pursuant to Section 2.3, under the Memory Patent Rights and
Memory’s interest in the Collaboration Patent Rights and to use the Memory Know-How, to make,
use, offer for sale, sell, import and export such Compound 3454 and 3454 Products in the
Territory for use in the Field (a “License”). In addition, subject to the terms and
conditions of this Agreement, Memory hereby grants to Roche a non-exclusive license, including
the right to grant sublicenses pursuant to Section 2.4, under any additional patent rights
that Memory Controls to the extent necessary to make, use, offer for sale, sell, import and
export (i) all Products other than Compound 3454 in the Territory for use in the Field and
(ii) if Roche exercises the right to obtain the license for Compound 3454, Compound 3454. The
right of Roche to obtain a License to Compound 3454 as provided in this Section 2.1 shall be
exercisable by Roche giving written notice to Memory and making or having made payment to
Memory of all License Rights Maintenance Fees for such Product under Section 4.4 with respect
to a License for a Product for an Indication. If Roche exercises such right as provided

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	 	 	herein, Memory shall be deemed to have granted such License hereunder without any
requirement for further action by or on behalf of either Party.

	 
	 	 	Nothing in this Agreement grants to Roche any right or license to use Memory Know-How for
any purpose other than to make, use, offer for sale, sell, import and export Products in the
Territory for use in the Field. Further, nothing in this Agreement shall limit the right of
Memory to use Memory Know-How for any purpose other than the making, using, offering for
sale, selling, importing or exporting Products in the Territory for use in the Field.

	 
	2.2	 	Intentionally Omitted.

	 
	2.3	 	Restrictions on Third Party Rights. Memory shall not grant any license or rights to
a Third Party with respect to Compound 3454 or itself commercialize Compound 3454 unless and
until Roche has declined or failed to exercise its right to obtain a License to such compound
pursuant to Sections 2.1 and 16.4(a) hereof. In the event that Roche so declines or fails to
exercise its right to obtain a License to such compound, Memory shall be free to license or
grant any rights to a Third Party with respect Compound 3454 and/or itself commercialize
Compound 3454.

	 
	2.4	 	Sublicense Rights. The rights and licenses granted to Roche under Section 2.1 shall
include the right to grant sublicenses to its Affiliates and Third Parties under such rights
and licenses, in whole or in part, solely to the extent necessary to make, use, offer for
sale, sell, import or export Products in the Territory for use in the Field. If Roche grants
such a sublicense, Roche shall ensure that all of the applicable terms and conditions of this
Agreement shall apply to the Affiliate or Third Party sublicensee to the same extent as they
apply to Roche for all purposes. Roche assumes full responsibility for the performance of all
obligations and observance of all terms so imposed on such Affiliate or Third Party
sublicensee and will itself account to Memory for all payments due under this Agreement by
reason of such sublicense.

	 
	 	 	Roche shall not sublicense its rights to offer a Memory Product for sale or sell a Memory
Product in a Major Market Country [*] without the prior written consent of Memory which
shall not be unreasonably withheld. With respect to any 3454 Product, Roche shall not have
the right to sublicense the rights granted to Roche under Section 2.1 to any Third Party
with respect to any 3454 Product, except upon the prior written approval of Memory, which
approval Memory shall not unreasonably withhold.

	 
	 	 	Any sublicense may, at the written election of Memory, continue in full force and effect
after the termination of any of the underlying licenses granted herein to Roche (the
foregoing shall apply to a termination in whole or in part of such underlying licenses).
Upon the licenses granted herein to Roche becoming fully paid up pursuant to Section
16.1(b), any and all sublicenses granted by Roche similarly shall become fully paid up as to
Memory.

	 
	2.5	 	Memory Co-Promotion Right. Memory shall have the right to co-promote in the US each
Product containing Compound 3454, in accordance with the provisions of Exhibit K

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	 	 	hereto. Within forty-five (45) days after the end of Phase II with respect to any such
Product, Roche shall provide Memory with (i) the results and analysis of Phase II studies,
and (ii) Roche’s then final, approved Phase III development plan (including budget). Memory
shall exercise its co-promotion right with respect to any such Product by (a) giving written
notice thereof to Roche within forty-five (45) days after receipt of the items described in
the immediately preceding sentence, and (b) making a one-time payment to Roche in the amount
of [*] percent ([*]%) of Roche’s budgeted Phase III global development costs for such
Product as set forth in Roche’s then final, approved Phase III development plan (including
budget). If Memory exercises its right to co-promote any such Product in the US, the
royalties otherwise payable by Roche to Memory hereunder with respect to the Net Sales of
such Product in the US shall be reduced by [*] percent ([*]%). Upon Memory’s exercise of
its co-promotion right with respect to any such Product, the Parties shall negotiate in good
faith and enter into a Co-Promotion Agreement consistent with terms set forth in Exhibit K
hereto.

	 
	2.6	 	Requirement to Divest. If Roche is required by a relevant government authority in a
given country of the Territory to divest rights to a Memory Compound, Compound 3454, 3454
Product, and/or a Memory Product with respect to which Roche has not commenced the Initiation
of Phase III, then Roche shall use its reasonable best efforts to obtain authority to fulfill
such requirement by returning rights to Memory to the Memory Compound, Compound 3454, 3454
Product and/or Memory Product, as the case may be, in accordance with Section 16.5.

Article 3. Diligence

	3.1	 	Diligence. Memory shall use reasonable diligence in proceeding with the development
of Compound 3454 through the End of Phase IIa. Roche shall use reasonable diligence in
proceeding in the Major Market Countries with the development [*] of at least one Compound
[*].

	 
	 	 	Reasonable diligence as used in this Agreement shall mean the same standard of effort as
used by the Parties, or in any case not less than common in the industry taken as a whole
for similarly situated companies for the activities to be undertaken pursuant to this
Agreement, including, in the case of Roche, the development, clinical testing,
manufacturing, marketing and sale of a product which (i) must receive regulatory approval in
Major Market Countries and (ii) has similar potential for an Indication as the compounds for
which Roche has obtained a license hereunder, taking into account scientific, business and
marketing and return on investment considerations. It is understood that such compound
potential may change from time to time based upon changing scientific, business and
marketing and return on investment considerations. The Parties also acknowledge that, even
within the Major Market Countries, Roche and its Affiliates do not always seek to market
their own products in every such country or seek to obtain regulatory approval in every such
country or for every potential indication or every compound that has potential for an
indication. As a result, the exercise by Roche of reasonable diligence is to be determined
by judging its efforts taken as a whole.

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	 	 	If either Party believes in good faith that the other Party has failed to utilize reasonable
diligence as required by this Section 3.1, then such Party may give the other Party written
notice of such alleged failure, identifying the nicotinic alpha-7 agonist [*] compound or
Product (if known) and giving specific detailed reasons of such allegation. Within sixty
(60) days following the other Party’s receipt of any such notice (“Response
Period”), the other Party shall have the right to provide such Party with a written
response specifying, in reasonable detail, how it has used reasonable diligence as required
hereby.

	 
	 	 	If the other Party has failed to provide within the Response Period a written response, in
reasonable detail, indicating the manner in which it is in compliance with its obligations
under this Section 3.1 or in which it has remedied any breach thereof, or the other Party
has failed within the Response Period to remedy any breach of its obligations under this
Section 3.1, then the non-defaulting Party shall have the right to terminate this Agreement,
in whole or in part, as described in this Section 3.1, upon written notice to such Party
effective as of the end of the Response Period.

	 
	 	 	In the event of a dispute between the Parties with respect to whether either Party has
complied with its obligation under this Section 3.1, then such dispute shall be resolved in
accordance with Article 17. The consequences of any termination under this Section 3.1 are
set forth in Section 16.5 and Article 17.

	 
	3.2	 	Effect of Merger on Diligence.

	 	(a)	 	Acquisition of Roche. If (i) substantially all of the pharmaceutical
business of Roche becomes merged or acquired or (ii) Roche acquires substantially all
of the pharmaceutical business of an entity having an average annual pharmaceutical
preclinical research expenditure in excess of [*] dollars (US $[*]) per year, then at
any time during the period from a public announcement by Roche of its intention to
effect such merger or acquisition (each such transaction described in clauses (i) and
(ii) being hereinafter called a “Transaction”) through [*] after the closing of
such Transaction, Memory shall have the right to request in writing to the Head of
Global Pharmaceuticals of Roche a status of and future plans for the progress of
development and commercialization of Products (“Status Request”). This right
may be exercised by Memory not more than [*].

	 
	 	 	 	If, following a Status Request, Memory believes in good faith that Roche has failed
to progress development and commercialization of Products solely because of the
Transaction, then Memory may give Roche written notice of such alleged failure,
identifying the Product and region at issue and giving specific detailed reasons of
such allegation. Within [*] days following Roche’s receipt of any such notice from
Memory (“Status Response Period”), Roche shall have the right to provide
Memory with a written response specifying, in reasonable detail, how the Transaction
per se has not had any negative impact on such development and commercialization
progress.

	 
	 	 	 	If Roche has failed to provide within the Status Response Period a written response,
in reasonable detail, indicating the manner in which development and

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	 	 	 	commercialization of Products has not failed to progress solely because of the
Transaction or in which it has remedied any such failure, or Roche has failed within
the Status Response Period to remedy any such failure to progress, then Memory shall
have the right to terminate this Agreement, in whole or in part, as described below
in this Section 3.2, upon written notice to Roche effective as of the end of the
Status Response Period. Memory shall have the right to terminate this Agreement as
to any region described in Section 16.4(b) if development and commercialization of
the Products has failed to progress solely because of the Transaction with respect
to the Products (taken as a whole) in such region. Memory shall have the right to
terminate this Agreement in the Territory with respect to any Product if development
and commercialization of such Product has failed to progress solely because of the
Transaction in at least two of the three regions described in Section 16.4(b).
Memory shall have the right to terminate this Agreement in its entirety if
development and commercialization of the Products (taken as a whole) has failed to
progress solely because of the Transaction in at least two of the three regions
described in Section 16.4(b). The Parties confirm and agree that nothing in this
Section 3.2 limits the obligations of Roche or the rights of Memory under Section
3.1.

	 
	 	(b)	 	Change of Control of Memory. Upon a Change of Control of Memory, Roche
shall have the right to terminate Memory’s participation in the Strategic Alliance, as
provided in Section 7.5(g) hereof provided that any such termination shall not in any
manner terminate, reduce or otherwise modify any of Memory’s rights to royalty and
event payments hereunder. In addition, upon a Change of Control of Memory, Roche shall
have the right to terminate Memory’s participation in Phase I studies and all other
work or activities pursuant to Articles 7 and 9 of this Agreement; provided that (i)
any such termination shall not in any manner terminate, reduce or otherwise modify any
of Memory’s rights to royalty and milestone payments hereunder and (ii) Roche shall
complete any Phase I studies then in process.

Article 4. Payments to Memory

	4.1	 	Intentionally Omitted.

	 
	4.2	 	Intentionally Omitted.

	 
	4.3	 	Intentionally Omitted.

	 
	4.4	 	Payments With Respect to Certain Events. Roche shall pay to Memory, in order to
maintain its License rights pursuant to Section 2.1 and the other provisions of this Agreement
with respect to Compound 3454 and to reimburse Memory for previously incurred research
expenditures, and with respect to certain development based Events, the non-refundable and
non-creditable payments set forth in Exhibit B hereto upon the first occurrence of the Events
relating to Compound 3454 described therein. With respect to each Memory Product and each
Collaboration Product, Roche shall pay to Memory, the

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	 	 	non-refundable and non-creditable payments set forth in Exhibit C and Exhibit D hereto,
respectively, upon the first occurrence of the Events listed therein for such Product.

	 
	 	 	Each payment required pursuant to this Section 4.4 shall be due and payable by Roche within
sixty (60) days after occurrence of the applicable Event. Roche will make each of such
payments only once for each Product, regardless of the number of Indications for which such
Product may be developed or the subject of any Regulatory Approvals.

	 
	 	 	For the avoidance of doubt, the Parties confirm and agree that no amount payable under this
Article 4 shall reduce any royalties payable under Article 5.

Article 5. Royalties

	5.1	 	Royalties. Roche shall pay to Memory the percentage of Net Sales of any 3454
Products, Memory Products and Collaboration Products as set forth in Exhibit E, Exhibit F and
Exhibit G hereto, respectively. Such royalty payments shall be calculated by multiplying the
percentages set forth in such Exhibit by the annual Net Sales of such Product (all Net Sales
amounts in $ US million) set forth in such Exhibit and shall be subject to adjustment as
provided in this Article 5.

	 
	5.2	 	Intentionally Omitted.

	 
	5.3	 	Adjustment Related to Other Indications of 3454 Products. Roche shall pay to Memory
royalties for a given 3454 Product having a Regulatory Approval for an Other Indication, in an
amount equal to [*] of the royalties otherwise payable for such 3454 Product having a
Regulatory Approval for a Neurological Indication based upon the Net Sales of such Product,
which royalty rate shall be subject to adjustment as provided in this Article 5.

	 
	5.4	 	Adjustment Related to Multiple Indications of 3454 Products. Notwithstanding
anything to the contrary contained in Sections 5.1 or 5.2 hereof, in the event that a given
3454 Product has a Regulatory Approval for more than one indication, Roche shall pay royalties
to Memory based upon the royalty schedule providing the highest applicable royalty rates for
which a Regulatory Approval has been obtained in a Major Market Country. Specifically, if any
such 3454 Product is approved for (i) a Neurological Indication in a Major Market Country and
for another indication other than a Psychiatric Indication, the royalties payable by Roche to
Memory shall be based upon Net Sales of such 3454 Product in the Territory as if all of such
Net Sales occurred for such Neurological Indication; (ii) a Psychiatric Indication in a Major
Market Country and for an Other Indication, the royalties otherwise payable by Roche shall be
based upon Net Sales of such 3454 Product in the Territory as if all of such Net Sales
occurred for the Psychiatric Indication; and (iii) multiple Other Indications only, then the
royalties payable by Roche to Memory shall be equal to [*] of the royalties otherwise payable
under the royalty schedule for a 3454 Product approved for a Neurological Indication.

	 
	5.5	 	Term of Royalty Payments. Roche shall calculate and make royalty payments to Memory
under this Article 5 commencing on Launch in any country. The Net Sales of a given country
shall be included for purposes of calculating royalties under this Section until the later of
(a) expiration of the last to expire of Composition of Matter Claim in

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	 	 	such country and (b) ten (10) years from the Launch of such Product in such country. With
respect to the ten (10) year period, the EU will be considered as one country.

	 
	5.6	 	Adjustments Related to Valid Claims. For a given Product, if in, or with respect to,
a country of the Territory no Valid Claim Covers such Product, then Roche may calculate
royalties for such Product using [*] percent ([*]%) of the amount Roche would have used for
such country to calculate royalties for such Product if a Valid Claim Covered such Product in
such country unless prior to ten years from the Launch of such Product in, or with respect to,
such country (EU considered as one country) a Valid Claim Covering such Product exists in, or
with respect to, such country in which case Roche shall resume calculating royalties using [*]
percent ([*]%) of such amount.

	 
	5.7	 	Adjustments Related to Third Party Competition. For a given Product in a given
calendar quarter, if in a country of the Territory (a) a Third Party is selling Bioequivalent
Product, and (b) Roche has an obligation to make payments under this Agreement with respect to
Net Sales of the given Product in such country, and (c) a Valid Claim Covers the given Product
in such country and (d) in such country, sales of units of Bioequivalent Products in aggregate
total at least [*] percent ([*]%) of the aggregate sales of units of Bioequivalent Products
and Products as measured at the end of such calendar quarter, and (e) Roche has, if it is
reasonable under the circumstances, brought in the country and continued to diligently
prosecute a patent infringement suit under any relevant Composition of Matter Claims against
the Third Party or another in privity, then Roche shall have the right to calculate royalties
with respect to such calendar quarter by including [*] percent ([*]%) of the amount Roche
would have otherwise included for such country to calculate sales-based payments if no
Bioequivalent Product existed in such country.

	 
	5.8	 	Adjustments Related to Third Party Payments. Roche or its Affiliate shall pay and be
responsible for the entire consideration owed to any Third Party pursuant to the terms of any
existing or future patent licensing agreement relating to a Product. Roche shall have the
right to deduct a maximum of [*] percent ([*]%) of the consideration actually paid by Roche or
its Affiliate to a Third Party (other than [*]) with respect to any license under a patent
which Covers the molecule per se of the compound which is the nicotinic alpha-7 agonist [*]
that is included in a given Product, from payments otherwise due and payable by Roche to
Memory under this Agreement. In no event as a result of this Section 5.8 shall Roche reduce
the royalties owed to Memory under this Article 5 such that the royalties payable pursuant to
this Article 5 for such Product are less than [*] percent ([*]%)of Net Sales in the Territory
for a given calendar quarter (and Roche shall be entitled to accumulate amounts not permitted
to be deducted in a prior period and deduct such amounts in a future period).

	 
	 	 	Notwithstanding the above, (i) any payment owed under an agreement between Memory and The
Trustees of Columbia University dated July 22, 1998, as it may be amended, shall be the sole
responsibility of Memory, and (ii) any payment owed under any agreement between Roche or its
Affiliate and any Third Party entered into prior to the Effective Date shall be the sole
responsibility of Roche, for which Roche shall not be

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	 	 	entitled to any deduction from payments due and payable to Memory under this Agreement.

	 
	5.9	 	Bonus Payment.

	 	(a)	 	With Respect to 3454 Products. Roche shall pay to Memory a one-time,
non-refundable and non-creditable amount after the first occurrence of the following
Event with respect to the 3454 Product if it receives Regulatory Approval for a
Neurological Indication:

	 	 	 	 	 	 
	 
	 	Event	 	 	Payment (US$)	 
	 	Net Sales exceed [*] for a full calendar year (Jan. 1 - Dec.
31 (during the Agreement Term

	 	 	[*]	 
	 	Net Sales exceed [*] for a full calendar year (Jan 1 - Dec
31) during the Agreement Term

	 	 	[*]	 
	 

	 	 	 	Roche shall pay to Memory a one-time, non-refundable and non-creditable amount after
the first occurrence of the following event with respect to the 3454 Product if it
receives Regulatory Approval for a Psychiatric Indication:

	 	 	 	 	 	 
	 
	 	Event	 	 	Payment (US$)	 
	 	Net Sales exceed [*] for a full calendar year (Jan. 1 -
Dec. 31) during the Agreement Term

	 	 	[*]	 
	 	Net Sales exceed [*] for a full calendar year (Jan. 1 -
Dec. 31) during the Agreement Term

	 	 	[*]	 
	 

	 	 	 	Each payment in this Section 5.9(a) shall be due and payable by Roche within sixty
(60) days after occurrence of the applicable Event. If a 3454 Product receives
Regulatory Approval for both a Neurological Indication and a Psychiatric Indication,
then bonus payments will be due and payable only once for the first Indication for
which a bonus Event in this Section 5.9(a) is achieved. [*].

	 
	 	(b)	 	With Respect to Memory Products. Roche shall pay to Memory a one-time,
non-refundable and non-creditable amount after the first occurrence of the following
Event with respect to each Memory Product having Regulatory Approval for any
Indication:

	 	 	 	 	 	 
	 
	 	Event	 	 	Payment (US$)	 
	 	Net Sales exceed [*] for a full calendar year (Jan. 1 - Dec.
31 (during the Agreement Term

	 	 	[*]	 
	 

	 	 	 	Each payment in this Section 5.9(b) shall be due and payable by Roche within sixty
(60) days after occurrence of the applicable Event.

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	 	(c)	 	With Respect to Collaboration Products. Roche shall pay to Memory a
one-time, non-refundable and non-creditable amount after the first occurrence of the
following Event with respect to each Collaboration Product having Regulatory Approval
for any Indication:

	 	 	 	 	 	 
	 
	 	Event	 	 	Payment (US$)	 
	 	Net Sales exceed [*] for a full calendar year (Jan. 1 - Dec.
31 (during the Agreement Term

	 	 	[*]	 
	 

	 	 	 	Each payment in this Section 5.9(c) shall be due and payable by Roche within sixty
(60) days after occurrence of the applicable Event.

	5.10	 	Combination Products. In the event Roche or its Affiliates intend to sell a
Combination Product, the Parties shall meet approximately one (1) year prior to the
anticipated commercial launch of such Combination Product to negotiate in good faith and agree
to an appropriate adjustment to Net Sales to reflect the relative significance and value
(including consideration of relative market share, sales potential and price potential) of the
Product and the other pharmaceutically active agent(s) contained in the Combination Product.
If, after good faith negotiations (not to exceed ninety (90) days), the Parties cannot agree
to an appropriate adjustment, Net Sales shall equal Net Sales of the Combination Product
multiplied by a fraction, the numerator of which is the reasonable fair market value of the
Product and the denominator (including consideration of relative market share, sales potential
and price potential) of which is the reasonable fair market value (including consideration of
relative market share, sales potential and price potential) in the aggregate of all
pharmaceutically active agents contained in the Combination Product.

	 
	5.11	 	Mechanisms for Adjustments. Notwithstanding anything to the contrary in this
Agreement, in no event shall any adjustments, individually or in the aggregate, pursuant to
Sections 5.6, 5.7 and 5.8 result in Memory receiving royalties for a given calendar quarter
pursuant to Section 5.1 in an amount less than [*] percent ([*]%) of the amounts set forth
therein as if no adjustment(s) had been made. If Roche obtains a license to a compound which
is a nicotinic alpha-7 agonist [*] from a Third Party and includes such compound in a Product,
as a result of which the Product becomes a Combination Product, Roche shall not be entitled to
an adjustment pursuant to Section 5.8 as a result of such license.

Article 6. Payment, Reporting, Auditing

	6.1	 	Currency and Conversion.

	 	(a)	 	All payments under this Agreement shall be in U.S. Dollars by wire transfer of
immediately available funds in accordance with instruction or instructions from the
Party being paid.

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	 	(b)	 	Whenever calculation of Net Sales or any other payment pursuant to this
Agreement requires conversion from any foreign currency, Roche shall convert the amount
of Net Sales or any other payment pursuant to this Agreement in foreign currencies as
computed in Roche’s central Swiss Francs Sales Statistics for the countries concerned,
using for internal foreign currency translation Roche’s then current standard practices
actually used on a consistent basis in preparing its audited financial statements.

	 
	 	(c)	 	For sublicensees in a country, when calculating the Net Sales, the sublicensee
shall report to Roche the amount of such sales within thirty (30) days from the end of
the reporting period, after having converted each applicable monthly sales in foreign
currency into Swiss Francs using the average rate of exchange published in the Wall
Street Journal (or some other source agreed upon by the Parties for any particular
country) for each respective month of the reporting period.

	6.2	 	Payments. After the Launch of the Product in any country of the Territory, Roche
shall calculate royalty payments set forth in Article 5 quarterly as of March 31, June 30,
September 30 and December 31 (each being the last day of a reporting period). Roche shall pay
such payments quarterly within sixty (60) days after the end of each reporting period in which
Net Sales occur during the Agreement Term.

	 
	 	 	With each such payment, Roche shall deliver to Memory the following information split
between the US and the ROW Territory:

	 	(a)	 	Adjusted Gross Sales for each Product;

	 
	 	(b)	 	Net Sales for each Product;

	 
	 	(c)	 	the royalty payments due to Memory for the reporting period;

	 	 	If Memory reasonably requests additional information relating to gross sales of the Products
in the Major Market Countries, deductions therefrom to calculate Adjusted Gross Sales or Net
Sales and/or adjustments thereto, Roche agrees to provide such information to Memory within
a reasonable time, provided, that Memory shall have the rights to exercise such requests not
more than once during any period of twelve (12) consecutive months.

	 
	 	 	In the event Roche does not pay Memory any amounts due under this Agreement, including
pursuant to Articles 4 and 5, within the applicable time period set forth herein, without
limiting Memory’s rights under Article 16, such payment shall bear interest, to the extent
permitted by applicable law, at the rate of interest (prime rate) as published from time to
time in the weekly Federal Reserve H.15 bulletin (or a successor or similar publication)
plus [*]% for the applicable period calculated on the number of days such a payment is
overdue.

	 
	6.3	 	Taxes.

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	 	(a)	 	Memory shall pay all applicable taxes levied on Memory under this Agreement.

	 
	 	(b)	 	If provision is made in law or regulation of any country for withholding of
taxes of any type, levies on Memory or other charges against Memory with respect to any
amounts payable under this Agreement to Memory, Roche shall promptly pay such tax, levy
or charge for and on behalf of Memory to the proper governmental authority, and shall
promptly furnish Memory with receipt of such payment. Roche shall have the right to
deduct any such tax, levy or charge actually paid from payment due Memory or be
promptly reimbursed by Memory if no further payments are due Memory. Each Party agrees
to assist the other Party in claiming exemption from such deductions or withholdings
under double taxation or similar agreement or treaty from time to time in force and in
minimizing the amount required to be so withheld or deducted.

	6.4	 	Blocked Countries. If by reason of law Roche is unable to convert to U.S. Dollars a
portion of the amount due by Roche under this Agreement, then Roche shall notify Memory in
writing and, upon written request from Memory, Roche shall pay to Memory such portion, in the
currency of any other country designated by Memory and legally available to Roche.

	 
	6.5	 	Accounting.

	 	(a)	 	Roche shall maintain and cause its Affiliates and sublicensees to maintain
books of account containing all particulars that may be necessary for the purpose of
calculating all payments under this Agreement. Such books of account shall be kept at
their principal place of business. Memory shall have the right to engage Roche’s
independent, certified public accountant to perform, on behalf of Memory, an audit of
such books and records of Roche and its Affiliates and sublicensees as is necessary to
confirm any amounts payable to Memory under this Agreement for the period or periods
requested by Memory and the correctness of any report or payments made under this
Agreement.

	 
	 	(b)	 	Such audits shall be conducted during normal business hours upon reasonable
prior written notice from Memory (minimum of thirty (30) days) in such a manner as to
not unnecessarily interfere with Roche’s normal business activities, and shall include
results of no more than three (3) preceding calendar years prior to audit notification.

	 
	 	(c)	 	Such audit shall not occur more frequently than once per calendar year nor more
frequently than once with respect to records covering any specific period of time.
Notwithstanding the preceding, if Memory reasonably believes, after reviewing
information received from Roche’s independent public accountant, that an additional
audit is appropriate to address an apparent discrepancy between Roche’s returns and
other information as is necessary for reporting hereunder, Memory shall have the right,
by an audit specialty firm reasonably acceptable to Roche and employed by Memory and at
Memory’s own expense, to perform such appropriate audit procedures.

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	 	(d)	 	The use of all information, data, documents and abstracts referred above shall
be for the sole purpose of verifying statements or compliance with this Agreement,
shall be treated as Roche Confidential Information subject to Article 15 of this
Agreement and, except in the event of a dispute between the Parties regarding amounts
payable hereunder or the results of any audit, need not be retained more than three (3)
years from the end of the calendar year to which each shall pertain. Audit results
shall be shared by Roche and Memory.

	 
	 	(e)	 	If any audit hereunder reveals an underpayment, Roche shall promptly make up
such underpayment. If any audit hereunder reveals an overpayment, Memory shall
promptly reimburse such overpayment. Memory shall bear the full cost of any audit
under this Section 6.5, unless such audit discloses an underpayment by Roche of more
than [*] percent ([*]%) of the amount owed hereunder if Net Sales exceeds [*] dollars
($[*]) in the Territory for the calendar year, or [*] percent ([*]%) of the amount owed
hereunder if Net Sales are equal to or less than [*] dollars ($ [*]) in the Territory
for the calendar year, in which case Roche shall bear the full cost of such audit as
performed by Roche’s independent, certified public accountant and any audit specialty
firm employed by Memory, together with interest on any such underpayment from the date
otherwise due through the date of payment at the rate set forth in Section 6.2.

	 
	 	(f)	 	The failure of Memory to request verification of any payment calculation during
which corresponding records are required to be retained under this Section 6.5 shall be
considered acceptance of such reporting by Memory.

Article 7. Governance; Strategic Alliance

	7.1	 	The Strategic Alliance. The Parties hereby continue their Strategic Alliance with
respect to the development of Products and the determination of licensing rights with respect
thereto.

	 
	7.2	 	Joint Steering Committee. Subject to Section 7.2(e), a Joint Steering Committee
(“JSC”) shall govern the research and development of Products, including
prioritization of compounds for research and development, approving research plans and
development plans (and updates and modifications thereof), supervising ongoing research and
development activities, recommending actions in response to unforeseen events, supervising the
transition of development, manufacturing and regulatory activities from Memory to Roche and
development of preclinical and clinical strategies (including clinical candidate selection,
the commencement of the Initiation of Phase I and the Initiation of Phase IIa). Neither Party
shall conduct activities with respect to Compounds outside the scope of the Workplan pursuant
to Exhibit A unless approved by the JSC. On a quarterly basis during the Strategic Alliance
Term and promptly after the end of the Extended Period, the JSC shall specify what Compounds
have met the Threshold Activity.

	 	(a)	 	Organization. The JSC shall consist of six (6) members, three (3)
members to be designated by Roche and three (3) members to be designated by Memory.
Each

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	 	 	 	Party may add additional members to the JSC. At least one (1) of each Party’s three
(3) members of the JSC shall not be members of such Party’s Working Team, as defined
pursuant to Section 7.2(b). A JSC member may not be a member of more than one
Working Team. As appropriate, other employee representatives of the Parties may
attend JSC meetings, subject to the reasonable approval of the other Party. Each
Party shall notify the other Party of the member(s) designated by such Party, in
writing, within thirty (30) days after the Effective Date. Any Party may withdraw
the designation of any of its members of the JSC and designate a replacement at any
time by giving prior written notice of the withdrawal and identifying the
replacement to the other Party. [*]. The JSC is authorized to establish separate
subcommittees from time to time, provided that the decision-making process
established in Section 7.2(d) shall continue to apply.

	 
	 	(b)	 	Working Teams. Each Party shall appoint members to working teams
(“Working Teams”), such as a research team and a development team. The Working
Teams will be responsible for delivering a plan for research and/or development
activities to the JSC for their review, modification and approval pursuant and subject
to Section 7.2(d). Further, any issues that are not resolved by the Working Teams
shall be submitted to the JSC for resolution pursuant and subject to Section 7.2(d).
The Working Teams shall be cooperative bodies that will work together and have meetings
as appropriate.

	 
	 	(c)	 	Meetings. The JSC shall hold quarterly meetings during the Extended
Period and thereafter shall hold semi-annual meetings during the balance of the
Agreement Term, on mutually agreeable dates, with the location of the meetings to
alternate between Memory and Roche, or their Affiliate’s, facilities. The frequency
and location of such meetings may be modified by mutual agreement of the Parties.
Notwithstanding the foregoing, at least one (1) of the quarterly meetings per year and
one (1) of the semi-annual meetings shall be held in person and the remaining meetings
may be held by videoconference. Each Party shall pay its own expenses associated with
the meeting. Each Party may, in its discretion, invite non-member employees to attend
meetings of the JSC.

	 
	 	(d)	 	Decision-Making. Decisions of the JSC shall be by consensus, with each
Party having one collective vote. If the JSC is unable to decide a matter by
consensus, the Parties shall refer such matter for resolution to the Head of Global
Research or the Head of Global Development on behalf of Roche and the Chief Scientific
Officer of Memory (“Alliance Executives”). If the Alliance Executives are
unable to resolve any such matter after good faith discussions, then the final decision [*].

	 
	 	(e)	 	Roche Development Team. With respect to each Product for which there
has been an Initiation of Phase IIb, [*]. Memory shall discuss with Roche the proposed
status and development and provide comments with respect thereto.

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	 	(f)	 	Minutes. Within thirty (30) days after each meeting of the JSC, the
chairperson shall prepare or cause to be prepared written minutes of such meeting and
circulate the same to each member of the JSC.

	 
	 	(g)	 	Dissolution of the JSC. The JSC shall decide when it expects that no
Product will thereafter proceed to Initiation of Phase III and the JSC will then
dissolve provided that the JSC shall be reconstituted if the Parties do agree that
there will thereafter be an Initiation of Phase III with respect to a Product.

	7.3	 	Research and Development Activities. Subject to the provisions of Section 3.1 and
the oversight of the JSC, with respect to each Product other than Compound 3454, Memory or
Roche, consistent with their responsibilities pursuant to this Agreement and Section 3.1,
shall conduct, at its cost (except as otherwise provided in this Agreement), those research
and development activities required pursuant to this Agreement and the Workplan. Subject to
the provisions of Section 3.1 and in consultation with the JSC, Memory shall conduct, at its
cost except as provided in this Agreement, those research and development activities through
the End of Phase IIa for Compound 3454 that Memory deems necessary or appropriate.

	 
	7.4	 	Progress Reports. Within fifteen (15) days after the end of each calendar quarter
through [*], Memory shall prepare and deliver to Roche a written progress report for the JSC
summarizing in reasonable detail the results to date of the [*]. In addition, upon request,
Roche shall have the right to receive copies of the raw data from all test results of [*].

	 
	7.5	 	The Strategic Alliance.

	 	(a)	 	Subject to the terms and conditions of this Agreement, the Parties agree to
conduct a Strategic Alliance in accordance with Section 3.1 hereof and the Workplan set
forth as Exhibit A to this Agreement.

	 
	 	(b)	 	For calendar year 2006, Roche shall pay to Memory the sum of one million seven
hundred fifty thousand dollars (US $1,750,000), which amount shall be non-refundable
and non-creditable, and which will be due and payable in two (2) equal installments of
eight hundred seventy-five thousand dollars (US $875,000) per installment. Such
installments shall be due and payable within thirty (30) days after (1) April 1, 2006
and July 1, 2006 and (2) receipt by Roche of an invoice for such sums.

	 
	 	(c)	 	In the event that the JSC determines [*] has been satisfied [*] Roche shall pay
to Memory the sum of three million Swiss Francs (CHF 3,000,000) for FTE funding, which
amount shall be non-refundable and non-creditable [*]. Notwithstanding any other
provision in this Article 7 to the contrary, Memory has the right to terminate its
research and development obligations after March 31, 2007 pursuant to this Article 7
and the Workplan if, prior to March 31, 2007, Roche has not committed to provide Memory
with such funding of three million Swiss Francs (CHF 3,000,000) for calendar year 2007
[*].

	 
	 	(d)	 	[*]

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	 	(e)	 	Once a Compound has achieved [*], the Parties shall design and Roche shall fund
[*] for such Compound, and [*] Notwithstanding the above, Memory shall supply Memory
Compound designated as 63908 for purposes of conducting GLP toxicology studies with
respect thereto, and [*].

	 
	 	(f)	 	If a Compound achieves [*].

	 
	 	(g)	 	In the event that there is a Change of Control of Memory during the Strategic
Alliance Term, Roche shall have the right, exercisable by giving at least sixty (60)
days’ prior written notice to Memory, to terminate Memory’s involvement in the
Strategic Alliance and participation in the JSC and thereupon Memory shall have no
further research or development obligations in connection with the Strategic Alliance.
Upon such termination, Memory shall promptly transfer to Roche all data and other
information related to the Strategic Alliance, including but not limited to Memory
Compounds, Collaboration Compounds, and Compound 3454 (if Roche has exercised its
License thereto), of the same type and nature as more fully described in Section
16.5(a)(ii) and (iii). Notwithstanding any such termination by Roche, this Agreement
and the remaining obligations of Memory and Roche shall continue, including, but not
limited to, Roche’s payment obligations pursuant to Articles 4 and 5 and funding
obligations pursuant to Section 7.5(b). [*].

Article 8. Intentionally Omitted

Article 9. Clinical Development and Regulatory Matters

	9.1	 	Clinical Development. Memory, at its sole cost, shall pursue clinical development of
Compound 3454 through the earlier of the End of Phase IIa or the date that Roche obtains a
License with respect to 3454 Products pursuant to Section 2.1 hereof. Notwithstanding the
provisions of Section 3.1 hereof but in consultation with the JSC, Memory shall have sole
control of all such clinical development activities for Compound 3454. If a Compound achieves
[*]. The End of Phase I Criteria is set forth in Schedule 4. From and after the End of Phase I with respect to such Compound, and from and after
Roche obtains a License with respect to 3454 Products, Roche shall be responsible for clinical
development of the Compound, subject to the provisions of Section 3.1 and the oversight of the
JSC (during its existence), and all related costs.

	 
	9.2	 	Regulatory Matters. Memory, at its sole cost, shall be responsible for all
regulatory activities in the Territory related to 3454 Products through the earlier of the End
of Phase IIa or the date that Roche obtains a License with respect to such 3454 Products
pursuant to Section 2.1 hereof, and upon Roche obtaining such License with respect to such
3454 Products, Roche, at its sole cost, shall thereafter be responsible for all regulatory
activities in the Territory relating to 3454 Products. Memory, at its sole cost, shall
prepare and file all regulatory applications and documents, including, for example, an
Investigational New Drug (IND) application (or foreign equivalent in consultation with

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	 	 	Roche) with respect to each Compound that has achieved [*] and has been approved for
clinical development by the JSC. Following the End of Phase I, Roche, at its sole cost,
shall be responsible for the preparation and filing of all regulatory applications and
documentation for Regulatory Approvals with respect to such Compounds. With respect to such
Compounds, Memory shall transfer to Roche all regulatory applications and documentation in
accordance with the procedures established by the JSC pursuant to Section 7.2, but in any
event no later than promptly after the [*]. After such transfer by Memory, Roche shall own
all regulatory filings and Regulatory Approvals for all Products in all countries of the
Territory.

          Each Party shall supply the other Party with a copy of all material communications related to
Product to or from the regulatory agencies for all Major Market Countries.

          Each Party, at its sole cost, shall report to appropriate authorities in accordance with local
requirements all adverse events related to use worldwide of Products or Compounds for which that
Party then has primary responsibility for development and/or commercialization under this Agreement
and the Workplan. Adverse events related to the use of the Products or Compounds worldwide shall
be in a single database, centralized, held and owned by Memory, through the End of Phase I with
respect to each Compound. Thereafter, Memory shall transfer the database to Roche, who shall be
responsible for the maintenance thereof at its sole cost with respect to the Products or Compounds.

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Article 10. Manufacture and Supply

	10.1	 	Clinical Supplies of Product for GLP toxicology and Clinical Studies. Memory shall
supply at its own cost all clinical supply of Compound 3454 and placebo related to Compound
3454 to be used in the Territory through the date that Roche obtains a License with respect to
such Product, either by itself or through a Third Party. Memory, at its sole cost, shall be
responsible for the manufacture of each Compound through [*] with respect thereto. After any
such Compound has achieved [*], Roche, at its sole cost, shall be responsible for
manufacturing scale up and the manufacture and supply of Compound as required for clinical
development, except that Roche shall manufacture and supply Memory with Memory’s requirements
of such Compound for Phase I clinical trials and Memory shall reimburse Roche at Roche’s
direct cost of manufacture thereof. Notwithstanding the above, Memory shall supply Memory
Compound designated as 63908 for purposes of conducting Phase I studies with respect thereto,
and Roche shall have no obligation to reimburse Memory for the cost of manufacture. Roche
shall supply at its own cost all clinical supply of each Product and all clinical supply of
each placebo for each Product to be used in the Territory, either by itself or through a Third
Party. Roche’s requirements for supplying Product necessary to fill orders for sales for any
particular calendar quarter shall take precedence over providing clinical supplies of the
Product to Memory for that calendar quarter. The Parties shall cooperate in all reasonable
respects relating to the transition of manufacturing activities from Memory to Roche (for
example, Roche will need Memory to continue to provide clinical supplies of the Product for
Compound 3454 during this transition period).

	 
	10.2	 	Commercial Supply. Roche shall be solely and exclusively responsible at its own
expense for the manufacture and supply of Product for sale in the Territory, either by itself
or through Third Parties.

Article 11. Commercialization

          Except as expressly set forth in Section 3.1, Roche, at its own expense, shall have sole
responsibility and decision making authority for the marketing, promotion, sale and distribution of
Product in the Territory. During the Agreement Term, upon written request of Memory not to exceed
once per year, Roche will fully inform Memory regarding the commercialization of Products in the
Territory by Roche, its Affiliates and sublicensees.

Article 12. Trademarks

          Roche shall own worldwide all trademarks on and in connection with Products, and shall, at its
cost, be responsible for procurement, maintenance and enforcement of all worldwide trademarks
registration on and in connection with Products.

Article 13. Ownership of Intellectual Property and Patent Rights

	13.1	 	Ownership of Intellectual Property. Ownership of any Patent Rights developed in the
course of the Strategic Alliance shall be determined in accordance with United States federal
law. Memory shall own all Inventions having as inventors only employees, consultants or
agents of Memory or its Affiliate. Roche shall own all Inventions having

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	 	 	as inventors only employees, consultants or agents of Roche
or its Affiliate. Inventions having as inventors at least
one employee, consultant or agent of Roche and at least one
employee, consultant or agent of Memory shall be owned
jointly by the Parties. Each of Memory and Roche shall
require all of its employees, consultants and agents to
assign all inventions related to Products made by them to
it.

	 
	13.2	 	Patent Prosecution and Maintenance.

	 	(a)	 	General. Memory shall have the right, but not the obligation, to
prepare, file, prosecute (including interference and opposition proceedings) and
maintain (including interferences, re-examination and opposition proceedings)
(collectively, “Handle”) the Memory Patent Rights. [*]

	 
	 	 	 	Should Memory decide that it does not desire to Handle a Memory Patent Right in a
given country, it shall provide written notice to Roche thereof no less than sixty
(60) days prior to the date when the Memory Patent Right would become abandoned in
such country. After receiving such notice, Roche may, but is not obligated, to
Handle the Memory Patent Right in such country.

	 
	 	(b)	 	Memory Prosecution Obligations Prior to Roche Exercise. Prior to Roche
exercising its right to obtain a License to 3454 Products, Memory shall have no
obligation to consult Roche with respect to prosecution or maintenance of any Memory
Patent Rights to the extent such Memory Patent Right solely or primarily affects
Compound 3454. However, Memory shall have an obligation to keep Roche informed
generally as to the status of any pending patent applications and issued patents
relating to Compound 3454. Memory will provide Roche with updates as to the status of
Memory’s patent prosecution as to Compound 3454 on a regular basis (but no less than
once per quarter).

	 
	 	(c)	 	Memory Prosecution Obligations After Roche Exercise. With respect to
Compound 3454, after Roche has exercised its right to obtain a License to 3454 Products
pursuant to Section 2.1 hereof, Roche shall reimburse Memory, on a patent-by-patent
basis, as to any Memory Patent Rights Covering the 3454 Products, for fifty percent
(50%) of any reasonable and documented external costs for Handling such patent or
patent application incurred after the date Roche obtained such License.

	 
	 	(d)	 	Memory Prosecution Obligations Relating to Memory Patent Rights. With
respect to Memory Patent Rights Covering a Product, subject to Section 13.2(b):

	 	(A)	 	Memory shall use reasonable efforts to consult with Roche as to
the Handling of any such Memory Patent Rights in sufficient time (for example,
thirty (30) days for instances where actions are due within three (3) months of
a communication from a Patent Office) before any action is due to allow Roche
to provide comments thereon, which comments Memory must reasonably consider if
provided to Memory at least thirty (30) days before such action is due.

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	 	(B)	 	Memory shall promptly notify and consult with Roche regarding
any priority patent application (“Invention Priority Application”)
Covering such Product before filing said application.

	 
	 	(C)	 	Memory shall promptly prepare and send to Roche a draft of the
Invention Priority Application for Roche’s comment and approval, which shall be
provided within thirty (30) days after receipt of such draft Invention Priority
Application (“Comment Period”).

	 
	 	(D)	 	After reasonably considering Roche’s comments, Memory shall
file the Invention Priority Application. If Roche fails to provide comments on
a draft within the Comment Period, Memory shall be free to file the Application
at the end of the Comment Period or later.

	 
	 	(E)	 	Within nine (9) months after the filing of an Invention
Priority Application, Memory shall provide Roche a written list of countries
(“Country List”) in which Memory intends to file patent applications
that claim priority from the given Invention Priority Application. Roche, as
promptly as practicable, shall notify Memory in writing of those countries on
the Country List and any additional countries (“Additional Countries”)
where Roche requests that patent applications be filed. In turn, Memory
promptly shall notify Roche if it agrees with the filing of applications in
such Additional Countries selected by Roche.

	 
	 	(F)	 	Memory shall file patent applications at least in those
countries where Roche and Memory agree to the filing of patent applications
(“Mutually Agreed to Countries”) as well as in Additional Countries
selected by Roche that are not within the Mutually Agreed to Countries,
provided that Roche shall reimburse Memory for the reasonable external
prosecution costs in the Additional Countries. Memory shall have the option of
filing an international application designating at least the Mutually Agreed to
Countries, to be followed by national filings in the desired countries.

	 
	 	(G)	 	Memory shall be responsible for the filing and prosecution of
the patent applications and the maintenance of the granted patents as to the
Mutually Agreed to Countries. Memory and Roche each will pay fifty percent
(50%) of the reasonable external costs relating to the preparation, filing and
prosecution of the patent applications and the maintenance of the granted
patents.

	 
	 	(H)	 	As to those countries where Roche and Memory do not agree to
the filing of patent applications, the Party requesting the filing in said
country shall be responsible for all costs relating to the filing and
prosecution of the patent applications and the maintenance of the granted
patents in said countries.

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	 	(I)	 	Should Roche not respond to Memory within thirty (30) days
after the date Memory provides the Country List, then Memory shall be free to
initiate patent filings, at Memory’s sole expense and discretion, in the
countries Memory has selected or still selects.

	 
	 	(J)	 	Memory’s failure to notify Roche to the contrary within thirty
(30) days after the date upon which Roche notifies Memory of the Additional
Countries will be deemed an agreement on the part of Memory to file patent
applications in all such Additional Countries and to pay fifty percent (50%) of
the reasonable external costs associated with such filings.

	 
	 	(K)	 	If, in a country, at any time, Roche decides not to continue
funding the prosecution of a patent application or maintenance of a patent
under this Section 13.2, Roche shall notify Memory in writing (“Withdrawal
Notice”), and Roche shall be relieved from paying any further expenses with
regard to the patent filing in the country. After receiving the Withdrawal
Notice, Memory may but is not obligated, at its sole expense and discretion, to
continue to prosecute and maintain the patent filing in the country.

	 
	 	(L)	 	With respect to a Memory Compound that achieves [*] with
respect to Memory Patent Rights that are intended to Cover such Memory
Compound.

	 
	 	(M)	 	If, in a country, at any time, Memory decides not to continue
the prosecution of a patent application or maintenance of a patent under this
Section 13.2, and such patent application or patent is not one as to which
Roche has already sent a Withdrawal Notice, then Memory shall notify Roche in
writing no less than sixty (60) days prior to the date when the patent
application or patent would become abandoned in such country. At Roche’s
written request and no cost to Memory, Memory shall then permit Roche to
prosecute and maintain such patent application or patent in such country, at
Roche’s own cost, to the extent Roche desires to do so [*].

	 
	 	(N)	 	For the Mutually Agreed to Countries and Additional Countries,
Memory shall consult with Roche as to the prosecution and maintenance of all
patent applications and patents claiming Inventions in sufficient time (for
example, thirty (30) days for instances where actions are due within three (3)
months of a communication from a Patent Office) before any action is due to
allow Roche to provide comments thereon, which comments Memory must reasonably
consider.

	 
	 	(O)	 	With respect to any Collaboration Patent Rights in existence
during the Strategic Alliance Term, each of [*].

	13.3	 	Screening Patent Rights. Notwithstanding the provisions of Section 13.2 hereof [*].

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	13.4	 	Cooperation. The Parties agree to cooperate in the preparation, prosecution and
maintenance of all patent applications filed under Article 13, including obtaining and
executing necessary powers of attorney and assignments by the named inventors, providing
relevant technical reports to Memory concerning the invention disclosed in such patent
application, obtaining execution of such other documents which shall be needed in the filing
and prosecution of such patent applications, discussing in good faith foreign filing strategy,
obtaining patent term extensions, Supplementary Protection Certificates or similar foreign
equivalent types of rights, and, as requested, updating each other regarding the status of
such patent applications.

	 
	13.5	 	Infringement. Each Party shall promptly provide written notice to the other Party
during the Agreement Term of any known infringement or suspected infringement of any Memory
Patent Right or Collaboration Patent Right by a Third Party making, using, offering for sale,
selling, importing or exporting a compound which is a nicotinic alpha-7 agonist [*] or a
product containing a compound which is a nicotinic alpha-7 agonist [*] (collectively “NA7
Infringement”).

	 
	 	 	With respect to each Product Roche shall have the first right to bring and control any
action or proceeding with respect to NA7 Infringement relating to a Memory Patent Right or
Collaboration Patent Right Covering such Product at Roche’s own expense and by counsel of
its own choice, and Memory shall have the right, at its own expense, to be represented in
any such action by counsel of its own choice. Prior to Roche’s exercising its right to
obtain a License with respect to 3454 Products pursuant to Section 2.1 hereof, Memory shall
have the first right to bring and control any action or proceeding with respect to NA7
Infringement relating to a Memory Patent Right Covering any such 3454 Product at Memory’s
own expense and by counsel of its own choice, and Roche shall have the right, at its own
expense, to be represented in any such action by counsel of its own choice. If the Party
with the right to bring and control a proceeding fails to bring any such action or
proceeding with respect to NA7 Infringement within (a) [*] days following the notice of
alleged infringement or (b) [*] days before the time limit, if any, set forth in the
appropriate laws and regulations for the filing of such actions, whichever comes first, the
other Party shall have the right to bring and control any such action at its own expense and
by counsel of its own choice, and the Party that had the initial right to bring and control
any action or proceeding shall have the right, at its own expense, to be represented in any
such action by counsel of its own choice.

	 
	 	 	A Party that elects to bring and control an infringement action pursuant to this Section
13.5 shall provide prompt written notice to the other Party of any such suit commenced or
action taken by such Party.

	 
	 	 	Upon written request, the Party bringing suit or taking action (“Initiating Party”)
shall keep the other Party informed of the status of any such suit or action and shall
provide the other Party with copies of all substantive documents and communications filed in
such suit or action. The Initiating Party shall have the sole and exclusive right to select
counsel for any such suit or action.

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	 	 	The Initiating Party shall, except as provided below, pay all expenses of the suit or
action, including, without limitation, the Initiating Party’s attorneys’ fees and court
costs. With respect to 3454 Products, prior to Roche exercising its right to obtain a
License with respect to such 3454 Product that is the subject of the suit or action, Memory
shall pay attorneys’ fees and court costs and shall be entitled to retain any damages,
settlement fees or other consideration received as a result of such suit or action. With
respect to any other Product which is the subject of such suit or action, the Parties’
attorneys’ fees and court costs in connection with any such suit or action shall be deducted
from any damages, settlement fees or other consideration received as a result of such suit
or action and the balance thereof shall belong to the Initiating Party, except to the extent
such damages, settlement fees or other consideration are attributable to lost profits with
respect to Products in the Territory, in which case the Parties shall share in such recovery
as follows: (i) in the case of any 3454 Product where Roche has exercised its right to
obtain a License with respect to 3454 Products pursuant to Section 2.1 hereof and Memory has
exercised its co-promotion right with respect thereto, Memory shall receive [*] percent
([*]%) of the lost profits for such 3454 Product and Roche shall receive the remaining [*]
percent ([*]%) or (ii) in any other case, Memory shall receive the royalty that it would
have pursuant to Article 5 had the infringing sales been made by the Parties, and Roche
would receive the balance of the recovery.

	 
	 	 	If the Initiating Party believes it reasonably necessary, upon written request to the other
Party, the other Party shall join as a party to the suit or action but shall be under no
obligation to participate except to the extent that such participation is required as the
result of its being a named party to the suit or action. At the Initiating Party’s written
request, the other Party shall offer reasonable assistance to the Initiating Party at no
charge to the Initiating Party except for reimbursement of reasonable out-of-pocket expenses
incurred by the other Party in rendering such assistance. The other Party shall have the
right to participate and have its own representation in any such suit or action at its own
expense.

	 
	 	 	Prior to Roche obtaining a License with respect to any 3454 Product which is the subject of
such suit or action, Memory shall have the sole right to control any settlement and all
negotiations relating to any such suit or action. After Roche has exercised its right to
obtain a License with respect to any 3454 Product which is the subject of suit or action,
Roche shall have the right to control settlement; provided, however, that no settlement
shall be entered into without the written consent of the other Party, not to be unreasonably
withheld.

	 
	 	 	For the avoidance of doubt, Memory shall have the right, but not the obligation, to bring
and control any action or proceeding with respect to any Memory Patent Right relating to
infringement other than NA7 Infringement, at its own expense, without obligation or notice
to Roche.

	 
	13.6	 	Hatch-Waxman. Notwithstanding anything to the contrary, should a Party receive a
certification for a Product pursuant to the Drug Price Competition and Patent Term Restoration
Act of 1984 (Public Law 98-417), as amended, or its equivalent in a country other than the US,
then such Party shall immediately provide the other Party with a copy

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	 	 	of such certification. Prior to Roche exercising its right to obtain a License which
respect to 3454 Products pursuant to Section 2.1 hereof, Memory shall have the sole right to
enforce Memory Patent Rights (determined as if the 3454 Compound is a Compound) Covering any
such 3454 Products. With respect to each Product, Roche shall have the right to enforce
Memory Patent Rights and Collaboration Patent Rights Covering such Product; and Roche shall
have [*] days from the date on which it receives or provides a copy of such certification to
provide written notice to Memory (“H-W Suit Notice”) whether Roche will bring suit,
at its expense, within a [*] day period from the date of such certification. Should such
[*] day period expire without Roche bringing suit or providing such H-W Suit Notice, then
Memory shall be free to immediately bring suit in its name. If Roche brings suit, at
Roche’s written request, Memory agrees to be named as a party to such suit.

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	13.7	 	Patent Notices. All notices provided under this Article 13 to Roche shall be given
to:

	 
	 	 	F. Hoffmann-La Roche Ltd

Grenzacherstrasse 124

CH-4070 Basel, Switzerland

Attn:   Head, Patent Law

with copies of all notices relating to U.S. cases to:

	 	 	Hoffmann-La Roche Inc.

340 Kingsland Street

Nutley, New Jersey 07110

Attn:   Chief Patent Counsel

All notices provided under this Article 13 to Memory shall be given to:

	 	 	Memory Pharmaceutical Corp.

100 Philips Parkway

Montvale, New Jersey 07645

Attn: Head of Business Development

With copies of all notices to:

	 	 	Millen, White, Zelano and Branigan, P.C.

Arlington Courthouse, Plaza I

2200 Clarendon Blvd, Suite 1400

Arlington, Virginia 22201

Attn: Anthony Zelano, Esq.

Article 14. Representations and Warranties

	14.1	 	Representations and Warranties of Both Parties. Each Party warrants and represents
to the other Party that it has the full right and authority to enter into this Agreement and
that it is not aware of any impediment which would inhibit its ability to perform the terms
and conditions imposed on it by this Agreement.

	 
	14.2	 	Representations and Warranties of Memory.

	 	(a)	 	Corporate Action. Memory represents and warrants to Roche that all
corporate action on the part of Memory, its officers, directors and stockholders
necessary for (i) the authorization, execution and delivery of this Agreement and (ii)
the performance of all obligations of Memory hereunder has been taken and this
Agreement constitutes the legal and binding obligation of Memory, enforceable against
Memory in accordance with its terms.

	 
	 	(b)	 	No Conflict. Memory represents and warrants to Roche that the
execution of this Agreement and the performance of the transactions contemplated by
this

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	 	 	 	Agreement by Memory will not conflict with or result in a breach of any of the
terms, conditions or provisions of, or constitute a default under any agreement or
other instrument to which Memory is a party or by which it or any of its property is
bound.

	 
	 	(c)	 	Right to Grant Licenses. Memory represents and warrants to Roche that
it has the right to grant Roche the licenses and sublicenses that Memory hereby grants
to Roche under this Agreement. Memory also represents and warrants that, to the best
of its knowledge, the list of Memory Patent Rights set forth on Exhibit I, together
with the [*] list attached to and referred to in the letter dated the date hereby
between the parties, constitute a complete list of nicotinic alpha-7 agonists [*] that
are owned or Controlled by Memory on the date hereof.

	 
	 	(d)	 	Third Party Patent Infringement. Memory represents and warrants that
as of the Effective Date, to its actual knowledge of its senior executives, after
consultation with patent counsel, there is no issued patent right owned or controlled
by any Third Party which Covers the lead Memory Compounds of the Memory Program
identified by Memory to Roche or Compound 3454 and would prevent Roche from selling
such Memory Compound or Compound 3454 in any country of the Territory. As of the date
hereof, the Memory Patent Rights in existence as of the Effective Date are owned
exclusively by Memory; and Memory’s senior executives, after consultation with patent
counsel, have no actual knowledge of any information that would, in their opinion,
render invalid and/or unenforceable Composition of Matter Claims for the lead compounds
of the Program in such Memory Patent Rights.

	 
	 	(e)	 	No Material Misstatements. Memory warrants and represents to Roche
that (i) its senior executives have not intentionally failed to disclose any
information actually known to them which in their reasonable opinion, would be material
to Roche entering into this Agreement, with the intent to deceive or defraud Roche, and
to the actual knowledge of its senior executives any information actually disclosed to
Roche in connection with this Agreement does not contain any untrue statement of
material fact or omit to state a material fact, with the intent to deceive or defraud
Roche; (ii) it has provided correct and complete copies of all documents furnished to
Roche.

	14.3	 	Representations and Warranties of Roche. Roche represents and warrants to Memory
that all corporate action on the part of Roche, its officers, directors and stockholders
necessary for (i) the authorization, execution and delivery of this Agreement and (ii) the
performance of all obligations of Roche hereunder has been taken and this Agreement
constitutes the legal and binding obligation of Roche, enforceable against Roche in accordance
with its terms. Roche also represents and warrants that, to the best of its knowledge, the
list of Included Roche Compounds set forth on Exhibit L constitutes a [*]. The execution of
this Agreement and the performance of the transactions contemplated by this Agreement by Roche
will not conflict with or result in a breach of any of the terms, conditions or provisions of,
or constitute a default under any agreement

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	 	 	or other instrument to which Roche is a party or by which it or any of its property is
bound.

	 
	14.4	 	Disclaimer. THE FOREGOING REPRESENTATIONS AND WARRANTIES ARE IN LIEU OF ALL OTHER
REPRESENTATIONS AND WARRANTIES NOT EXPRESSLY SET FORTH HEREIN. MEMORY AND ROCHE DISCLAIM ALL
OTHER REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO EACH OF
THEIR RESEARCH, DEVELOPMENT AND COMMERCIALIZATION EFFORTS HEREUNDER, INCLUDING, WITHOUT
LIMITATION, WHETHER THE PRODUCTS CAN BE SUCCESSFULLY DEVELOPED OR MARKETED, THE ACCURACY,
PERFORMANCE, UTILITY, RELIABILITY, TECHNOLOGICAL OR COMMERCIAL VALUE, COMPREHENSIVENESS,
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WHATSOEVER OF THE PRODUCTS. IN NO EVENT
SHALL EITHER MEMORY OR ROCHE BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL
DAMAGES ARISING OUT OF THIS AGREEMENT BASED ON CONTRACT, TORT OR ANY OTHER LEGAL THEORY.

Article 15. Confidential Information

	15.1	 	Treatment of Confidential Information. In carrying out rights and obligations under
this Agreement, the Parties will be sharing proprietary information (“Confidential
Information”) with each other. Except as permitted by this Agreement, each Party shall
and shall cause its Affiliates to treat Confidential Information received from the other Party
as it treats its own proprietary information. In particular, it shall not disclose, divulge
or otherwise communicate such Confidential Information to Third Parties, or use it for any
purpose except pursuant to and in order to carry out its obligations under this Agreement
during the Agreement Term and for a period of five (5) years thereafter; provided that, each
Party (i) may disclose the Confidential Information to such of its directors, officers,
employees, Affiliates, consultants, subcontractors, sublicensees or agents to the extent
reasonably necessary to carry out its obligations under this Agreement, and (ii) hereby agrees
to exercise every reasonable precaution to prevent and restrain the unauthorized disclosure or
use of Confidential Information.

	 
	15.2	 	Release from Restrictions. The provisions of Section 15.1 shall not apply to any
Confidential Information which:

	 	(a)	 	was known or used by the Receiving Party or its Affiliates prior to its date of
disclosure to the Receiving Party or its Affiliates by the Disclosing Party or its
Affiliates, as evidenced by the prior written records of the Receiving Party or its
Affiliates; or

	 
	 	(b)	 	either before or after the date of the disclosure to the Receiving Party or its
Affiliates, is lawfully disclosed to the Receiving Party or its Affiliates by a Third
Party rightfully in possession of the Confidential Information; or

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	 	(c)	 	either before or after the date of the disclosure to the Receiving Party or its
Affiliates, becomes published or generally known to the public through no fault or
omission on the part of the Receiving Party or its Affiliates, but such inapplicability
applies only after such information is published or becomes generally known; or

	 
	 	(d)	 	is independently developed by the Receiving Party or its Affiliates without
reference to or reliance upon any Confidential Information of the Disclosing Party or
its Affiliates; or

	 
	 	(e)	 	is reasonably determined to be required to be disclosed by the Receiving Party
or its Affiliates to comply with applicable securities or other laws, to defend or
prosecute litigation or to comply with governmental regulations, provided that, the
Receiving Party or its Affiliates uses all reasonable efforts to provide prior written
notice of such disclosure to the Disclosing Party or its Affiliates and to take
reasonable and lawful actions to avoid or limit such disclosure; or

	 
	 	(f)	 	is disclosed to a Party’s financial sources or potential acquirors of its
stock or assets (directly or indirectly) so long as, with respect to a potential
purchase the potential acquirer or financial source executes a confidentiality
agreement which is at least as restrictive as the provisions of this Article 15.

	15.3	 	Exceptions. The restrictions set forth in this Article 15 shall not prevent either
Party from (i) preparing, filing, prosecuting or maintaining a patent application or its
resulting patents related to a Product in accordance with the terms of this Agreement or (ii)
disclosing Confidential Information to governmental agencies to the extent required or
desirable to secure government approval for the development or marketing of a Product.

	 
	15.4	 	Publications. During the Agreement Term, the following provisions shall apply with
respect to the disclosure in scientific journals, publications or scientific presentations by
any Party relating to any scientific work performed as part of the Strategic Alliance:

	 	(a)	 	A Party (the “Publishing Party”) shall provide the other Party with a
copy of any proposed publication relating to the work performed and/or the results
achieved in the conduct of the Strategic Alliance at least forty-five (45) days prior
to submission for publication so as to provide such other Party an opportunity to
recommend any changes it reasonably believes are necessary to preserve the Confidential
Information belonging in whole or in part to such other Party, and the incorporation of
such recommended changes shall not be unreasonably refused;

	 
	 	(b)	 	If such other Party in writing notifies (“Notice”) the Publishing
Party, within forty-five (45) days of receipt of the copy of the proposed publication,
that such publication in its reasonable judgment (i) contains an Invention for which
the other Party reasonably desires patent protection or (ii) constitutes disclosure of
any Confidential Information, the Publishing Party shall prevent such publication or
delay such publication for a mutually agreeable period of time. In the case of

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	 	 	 	Inventions, a delay shall be for a period reasonably sufficient to permit the timely
preparation and filing of a patent application(s) or application(s) on the
Invention, and in no event less than ninety (90) days from the date of Notice.

	 
	 	(c)	 	Notwithstanding the above, each Party shall only issue external media and
investor communications, including press releases related to the activities
contemplated by this Agreement that have either (i) been approved by the other Party or
(ii) are required to be issued by such Party as a matter of law as determined by such
Party’s legal counsel. Except as set forth in Section 15.4(d), the Party issuing the
external media or investor communication shall provide the other Party with a copy of
the press release or external communication at least two (2) weeks prior to its
intended publication or communication for the other Party’s review. During such
period, the other Party shall (i) approve the draft press release or communication and
permit the party issuing the press release to issue the press release, (ii) contact the
Party issuing the press release or communication to discuss modification to the draft
press release or communication, or (iii) contact the Party issuing the press release or
communication and disapprove the press release or communication. Except as set forth
in Section 15.4(d), if the other Party asks for modification, then the Party issuing
the press release or communication shall either make such modification or work with the
other Party to arrive at a press release or communication that the other Party
approves.

	 
	 	(d)	 	Nothing in this Agreement shall impair either Party’s compliance with any
requirements of: (i) governmental agencies to the extent required or desirable to
secure government approval for the development, manufacture or sale of Product in the
Territory (ii) the Securities and Exchange Commission or the national securities
exchange or other stock market on which such Party’s securities are traded, (iii) or
any other applicable law. In connection with any filing by either Party of a copy of
this Agreement with the Securities and Exchange Commission (or the national securities
exchange or other stock market on which such Party’s securities are traded), the filing
Party shall endeavor to obtain confidential treatment of economic and trade secret
information. Reasonably in advance of any filing under this Section (whether or not
this Agreement is included in the filing), the filing Party shall provide to the other
Party a copy of the proposed filing to the extent it relates to this Agreement and the
Parties shall work cooperatively in good faith, taking into consideration the other
Party’s suggestions, regarding the information for which the filing Party will seek to
obtain confidential treatment. However, in the event of any disagreements that cannot
be amicably resolved, the Party which is making the filing shall, together with input
from their own legal counsel, have the ultimate authority to make the filing in the
fashion in which it feels the filing must be made.

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Article 16. Term and Termination

	16.1	 	Conditions Subsequent. If the Hart-Scott-Rodino Antitrust Improvements Act of 1976
(the “HSR Act”) applies to the transactions contemplated by this Agreement, the
effectiveness of this Agreement and the transactions contemplated hereunder shall be subject
to and shall be contingent upon the satisfaction under the following condition subsequent to
the execution of this Agreement. The condition subsequent shall be the earlier to occur of
(i) approval of the transaction by the Federal Trade Commission or the appropriate US
anti-trust authorities or (ii) the expiration or termination of all applicable waiting
periods, requests for information (and any extensions thereof) under the HSR Act.

	 
	 	 	Subject to the terms and conditions of this Agreement, each Party shall use all reasonable
efforts to take, or cause to be taken, all reasonable actions and to do, or cause to be
done, all things necessary and appropriate to satisfy the condition subsequent and to
consummate the transactions contemplated by this Agreement in accordance with the terms
hereof.

	 
	 	 	Each Party shall cooperate with the other Party in the preparation, execution and filing of
all documents that are required or permitted to be filed on or before the Effective Date for
the purpose of consummating this transaction, including, filings pursuant to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976. Each Party shall bear its own costs
with respect to preparing, executing and filing such documents.

	 
	16.2	 	Agreement Term. The Agreement Term shall commence on the Effective Date and end,
unless earlier terminated upon the mutual agreement of the Parties or in accordance with the
provisions of this Article 16, on the date of expiration of all royalty and other payment
obligations (the “Expiration Date”) under this Agreement. Upon the occurrence of the
Expiration Date, if any, the Licenses granted to Roche by Memory under this Agreement to make,
have made, use, offer for sale, sell, import and export Products shall be fully paid-up.

	 
	16.3	 	Termination for Breach. (a) Each Party (“Non-Breaching Party”) shall be
entitled to terminate this Agreement by written notice to the other Party (“Breaching
Party”) in the event that the Breaching Party is in default of any of its material
obligations hereunder and fails to remedy such default within sixty (60) days (thirty (30)
days for payment defaults) after provision of written notice thereof by the Non-Breaching
Party. Any such notice shall specifically state that the Non-Breaching Party intends to or
reserves the right to terminate this Agreement in the event that the Breaching Party shall
fail to timely remedy the default.

	 
	 	 	The effective date of termination under this Section for breach of a material obligation
shall be the date sixty (60) days after provision of written notice thereof by the
Non-Breaching Party.

	 
	 	 	In the event Roche does not pay any full payment by reason of a good faith dispute as to
whether such payment is due pursuant to the terms of this Agreement, Memory shall not

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	 	 	have the right to terminate this Agreement as a result of such nonpayment until resolution
of the dispute.

	 
	16.4	 	Right to Terminate.

	 	(a)	 	Roche shall have the unilateral right to elect not to maintain its license
rights with respect to Compound 3454 upon the occurrence of each Event described in
Section 1 of Exhibit B hereto with respect to such Compound 3454. Roche may exercise
such right by giving written notice thereof to Memory within thirty (30) days after the
occurrence of such Event. In the event Roche exercises such right, Roche shall not
have any obligation to make the payment to Memory related to such Event and shall not
have the right to obtain a License with respect to 3454 Products, and this Agreement
shall terminate with respect to Compound 3454 and 3454 Products and Roche shall have no
further obligation to make any payments pursuant to Section 4.4 and Article 5 hereof
relating to Compound 3454 or 3454 Products.

	 
	 	(b)	 	Roche shall have the unilateral right to terminate this Agreement on a
region-by-region basis (the regions being North America (US and Canada), Europe and
Asia)) or Product-by-Product, either on a worldwide basis or as to North America (US
and Canada) only or ex-North America only, at any time by providing six (6) months
prior written notice to Memory; provided, however, that if the Parties do not agree as
to a proposed sublicense for which Memory has withheld consent, Roche shall have a
unilateral right to terminate this Agreement for the territory to which such proposed
sublicense relates. Notwithstanding the preceding sentence, if there has been a launch
of a Product in a Major Market Country, then such prior notice must be for twelve (12)
months. The effective date of termination under this Section shall be the date six (6)
months (or twelve (12) months as the case may be) after Roche provides such written
notice to Memory.

	 
	 	(c)	 	[*]

	16.5	 	Consequences of Termination.

	 
	 	 	Upon (i) any termination of this Agreement in its entirety pursuant to Section 16.2, Section
16.3 (but only in the case of termination by Memory by reason of breach of this Agreement by
Roche) or Section 16.4(b), (ii) termination of this Agreement by Roche in its entirety or in
a region or country or in respect of a Memory Product or 3454 Product pursuant to Section
16.4 hereof, or (iii) termination of this Agreement by Memory in its entirety or in a region
pursuant to Article 3, any and all rights and licenses of any kind or nature granted by
Memory to Roche under this Agreement (or, as applicable, with respect to termination of this
Agreement as to a country, region, Memory Product or 3454 Product, respectively) shall
terminate on the effective date of termination. For the purposes of this Section 16.5, in
the event of any such termination, the following shall apply.

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	 	(a)	 	Roche shall, upon Memory’s written request, assign and transfer (or, with
respect to termination of this Agreement as to any country or region, exclusively
license) to Memory, or its Affiliates as requested by Memory, at no expense to Memory,
or its Affiliates, and free of any liens, pledges or security interests other than
those incurred in the commercialization of any Memory Product or 3454 Product, all of
Roche’s right, title and interest in and to the relevant Memory Products or 3454
Product, together with an assignment of (or, with respect to termination of this
Agreement as to any country or region, an exclusive license relating to such country or
region) (i) all trademarks and trademark applications used or intended for use
specifically for the relevant Memory Product(s) or 3454 Product, (ii) all regulatory
filings (such as INDs and drug master files), Regulatory Approvals, and clinical trial
agreements (to the extent assignable and not cancelled) for the relevant Memory
Product(s) or 3454 Product, and (iii) all data, including clinical data, materials and
information of any kind or nature whatsoever, in Roche’s possession or in the
possession of its Affiliates or its or their respective agents related to the relevant
Memory Compounds and/or Compound 3454 and/or Memory Product(s) and/or 3454 Product and
(iv) all rights relating to the infringement of Memory Patent Rights and/or
Collaboration Patent Rights, related to and necessary for the commercialization of the
relevant Memory Product(s) or 3454 Product . Without limiting the generality of the
preceding sentence, Memory shall, upon such transfer (or exclusive license, as
appropriate), have the right to disclose such filings, approvals and data to (x)
governmental agencies of the country or region to the extent required or desirable to
secure government approval for the development, manufacturing or sale of such Memory
Products or 3454 Product in the country or region, (y) Third Parties acting on behalf
of Memory, its Affiliates or sublicensees, to the extent reasonably necessary or
desirable for the development, manufacture, or sale of such Memory Products or 3454
Product in the country or region, and (z) Third Parties to the extent reasonably
necessary or desirable to market such Memory Products or 3454 Product in the country or
region. All such filings, approvals and data may be transferred to Memory pursuant to
this Section 16.4 by a reference database and shall be deemed to be Memory Confidential
Information. In addition, Roche may retain access to the transfer database or a copy
of all of such filings, approvals and data for archival purposes.

	 
	 	(b)	 	In addition, for a given Memory Product, 3454 Product and country or region so
terminated, or for the Territory in the case of termination of this Agreement in its
entirety, Roche hereby grants to Memory the right to obtain a sole and exclusive,
royalty bearing license, under Collaboration Patent Rights and Roche Know-How Covering
such Memory Product or 3454 Product and Roche trademarks used or intended for use in
connection with the sale of such Memory Product or 3454 Product, to make, have made,
use, offer for sale, sell, import and export such Memory Product(s) or 3454 Product in
such country, region or the Territory, as applicable. Memory shall exercise such right
by giving written notice thereof to Roche within sixty (60) days after the date of
termination. In consideration of such license, Memory shall pay Roche reasonable
milestones and royalties consistent with industry practices as may be mutually agreed
upon by the Parties

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	 	 	 	(such royalties not to exceed [*] percent ([*]%) of Net Sales); and if the Parties
are unable to agree upon such financial terms, such matter shall be resolved by
arbitration in accordance with Article 17.

	 
	 	(c)	 	Roche shall supply, or cause to be supplied, to Memory, upon Memory’s written
request, Memory or its licensee’s clinical and/or commercial requirements of such
Memory Compounds or Compound 3454 [*] pursuant to a supply agreement to be negotiated
in good faith by the parties, provided that (i) such requirements shall be supplied to
Memory or its licensee at Roche’s direct manufacturing costs and allocation of
manufacturing overhead, and (ii) Roche’s supply obligation shall not continue for more
than [*] years after such termination, and (iii) Roche shall maintain the same quality
and specifications relating to such Memory Compounds, Compound 3454, Memory Product(s)
and 3454 Product(s) as immediately prior to notice of termination, and (iv) as to other
terms, such agreement shall be reasonably consistent with Roche’s other arm’s length
supply agreements, and (v) Memory shall use reasonable best efforts to effect a
transfer as soon as practicable of manufacturing activities relating to such Memory
Compounds, Compound 3454, Memory Product(s) and 3454 Product(s) from Roche to another
supplier. In addition, Roche shall also transfer to Memory and its designated supplier
a manufacturing transfer package that will enable Memory or such designated supplier to
manufacture such Memory Compounds, Compound 3454, Memory Product(s) or 3454 Product(s)
in a timely manner.

	 	 	Roche shall take prompt actions, including the execution of such instruments, agreements and
documents, as are necessary or desirable to effect the foregoing. It is agreed such
transfers and actions shall commence as soon as practicable and shall be completed [*] in a
manner that will permit Memory to continue without interruption the business of developing,
manufacturing, marketing and selling such Memory Product(s) or 3454 Products.

	 
	 	 	Upon any termination of this Agreement in whole or in part, [*].

	 
	 	 	Upon any termination [*] Roche’s license under Section 2.1 with respect to Memory Compounds
and Memory Products shall terminate. [*].

	 
	 	 	Upon [*] termination [*] Memory shall [*] have the right to negotiate with Roche for not
more [*] an assignment of [*] rights to any Collaboration Products and/or to obtain the sole and
exclusive, royalty bearing
license under the Collaboration Patent Rights and Roche Know-How Covering such Collaboration
Product(s) and Roche trademarks used or intended for use in connection with the sale of such
Collaboration Product(s)[*].

	 
	16.6	 	Royalty and Payment Obligations. Notwithstanding anything contained in this
Agreement to the contrary except Section 16.4(a), termination of this Agreement by either
Party for any reason will not release Roche from any obligation to pay royalties or make any
payments to Memory which were accrued prior to the effective date of termination (including
for sales made and Events achieved under Article 4, prior to the date of termination) or with
respect to any Collaboration Compounds, and Collaboration

[*] CONFIDENTIAL TREATMENT REQUESTED

39

 

	 	 	Products (and, to the extent the Licenses to Compound 3454 and 3454 Products survive,
Compound 3454 and/or any 3454 Products) in the amounts, at the times and in the manner set
forth in this Agreement as if this Agreement had not terminated, in whole or in part,
provided that the obligations under Section 13.2(O) shall not survive with respect to any
non-accrued obligations. However, except as is otherwise provided in this Agreement,
termination of this Agreement by either Party for any reason will release Roche from any
obligation to pay royalties or make any payments to Memory with respect to any Memory
Products and 3454 Products which would have otherwise become accrued after the effective
date of termination.

	 
	16.7	 	Termination for Failure to Satisfy the Condition Subsequent. Either Party may
terminate this Agreement in its entirety, upon ten (10) days prior written notice to the other
Party if the condition subsequent under Section 16.1 has not been fulfilled by December 31,
2006, in which case, upon termination there shall be no liabilities for obligations on the
part of either party except that Article 15 shall survive such termination and except for any
breach of Section 16.1, and the provisions of the Original Strategic Alliance Agreement shall
remain in full force and effect.

	 
	16.8	 	Survival of Obligations. Article 6, Section 13.1, Section 13.5, Section 13.6,
Section 13.7, Article 14, Article 15, Section 16.5, Section 16.6, Section 16.8, Article 17 and
Article 18, and any definitions used in such Section or Article, shall survive the termination
of this Agreement in its entirety. Except for obligations which clearly are not intended to
continue in respect of a partial termination (including the diligence obligation, and except
as provided in Section 16.6, royalty obligations), with respect to the region, country or
Product terminated, all obligations in this Agreement shall survive a partial termination.

Article 17. Arbitration

          Any dispute, controversy or claim (“Dispute”) arising out of or in relation to this
Agreement, or the breach, termination or invalidity thereof, that cannot be settled amicably by the
Parties after a good faith discussion to resolve the Dispute by the appropriate officers of the
Parties, shall be submitted by either Party to arbitration conducted in accordance with the rules
then in effect of the American Arbitration Association (“AAA”). Arbitration shall take
place in Newark, New Jersey and shall be conducted by three (3) arbitrators, one of whom shall be
designated by each Party, and the third selected by the other two (2) arbitrators, all within the
time limits established by the then existing rules of the AAA. If the two (2) designated
arbitrators are unable to agree upon a third arbitrator by two (2) months after submission of the
matter to arbitration, the AAA shall select such third arbitrator within three (3) months of such
original submission. The written decision of the arbitrators shall be final and binding on the
parties and may be enforced in any court having jurisdiction over the Parties or their current
assets. The award rendered by the arbitrators shall include the cost of arbitration, reasonable
attorneys’ fees and reasonable costs for expert and other witnesses, and in the event of a
termination, in whole or in part, a transition procedure, including the performance of transition
services by Roche, so as to maintain the value of the assets being transferred to Memory and, to
the extent contemplated by Section 16.4, permit Memory to conduct the business being transferred to
it. The parties shall be entitled to discovery as provided in the Federal Rules of Civil Procedure
then in effect in the District of New Jersey. If the issues in dispute involve

[*] CONFIDENTIAL TREATMENT REQUESTED

40

 

scientific or technical matters, at least one of the arbitrators chosen hereunder shall have
educational training and/or experience sufficient to demonstrate a reasonable level of knowledge in
the Field and pharmaceutical drug development. Notwithstanding the preceding provisions of this
Article 17, with respect to any breach or threatened breach of this Agreement of Section 15.1, 16.4
or any other provision where a Party would not be appropriately compensated by the payment of
money, a party has a right to seek injunctive relief from any court of competent jurisdiction to
enjoin such breach or threatened breach and/or to seek specific performance. [*]

          In the event of a Dispute, a Party shall have no right to toll or delay any obligation in this
Agreement unrelated to the Dispute as a result of the Dispute. By way of example, if Roche owes
Memory $5,000,000 and claims a $2,000,000 payment is not due by reason of breach of Memory, then
Roche shall pay the $5,000,000, and the parties will resolve such $2,000,000 Dispute pursuant to
Article 17.

Article 18. Miscellaneous

	18.1	 	Indemnification.

	 	(a)	 	Roche agrees to defend Memory and the other Memory Indemnified Parties at
Roche’s cost and expense, and will indemnify and hold Memory and its directors,
officers, employees and agents (the “Memory Indemnified Parties”) harmless from
and against any claims, losses, costs, damages, fees or expenses arising out of or
otherwise relating to (i) activities of Roche and its Affiliates in the conduct of the
Strategic Alliance, (ii) the development, manufacture, use, offer for sale, sale or
other disposition of any Product by Roche, its Affiliates or sublicensees, and each of
their distributors, representatives or anyone in privity therewith, or (iii) the gross
negligence or willful misconduct of Roche, its Affiliates or sublicensees. In the
event of any such claim against the Memory Indemnified Parties by a Third Party, Memory
shall promptly notify Roche in writing of the claim (provided that any failure or delay
to notify shall not excuse any obligations of Roche except to the extent Roche is
actually prejudiced thereby) and Roche shall solely manage and control, at its sole
expense, the defense of the claim and its settlement provided further that Roche shall
not settle any such claim, if such settlement may have an adverse effect on Memory,
without the prior written consent of Memory, which consent shall not be unreasonably
withheld. The Memory Indemnified Parties shall cooperate with Roche and may, at their
option and expense, be represented in any such action or proceeding. Roche shall not
be liable for any litigation costs or expenses incurred by the Memory Indemnified
Parties without Roche’s written authorization.

	 
	 	(b)	 	Memory agrees to defend Roche and the other Roche Indemnified Parties at
Memory’s cost and expense, and will indemnify and hold Roche and its directors,
officers, employees and agents (the “Roche Indemnified Parties”) harmless from
and against any claims, losses, costs, damages, fees and expenses arising out of any
claim, arising out of or otherwise relating to (i) activities of Memory in the conduct
of the Strategic Alliance, (ii) the development, manufacture, use, offer for sale, sale
or other disposition of any Product by Memory, its Affiliates, licensees

[*] CONFIDENTIAL TREATMENT REQUESTED

41

 

	 	 	 	other than Roche, sublicensees and each of their distributors, representatives or
anyone in privity therewith (a “Roche Responsible Person”) (but only to the
extent same is a consequence of Article 3 and/or Article 16), and (iii) the gross
negligence or willful misconduct of Memory, its Affiliates, licensees, distributors,
representatives or anyone in privity therewith other than a Roche Responsible
Person. In the event of any such claim against the Roche Indemnified Parties by a
Third Party, Roche shall promptly notify Memory in writing of the claim (provided
that any failure or delay to notify shall not excuse any obligation of Memory except
to the extent Memory is actually prejudiced thereby) and Memory shall solely manage
and control, at its sole expense, the defense of the claim and its settlement
provided further that Memory shall not settle any such claim if such settlement may
have an adverse effect on Roche without the prior written consent of Roche, which
consent shall not be unreasonably withheld. The Roche Indemnified Parties shall
cooperate with Memory and may, at their option and expense, be represented in any
such action or proceeding. Memory shall not be liable for any litigation costs or
expenses incurred by the Roche Indemnified Parties without Memory’s written
authorization.

	18.2	 	Force Majeure. Neither Party to this Agreement shall be responsible to the other
Party for nonperformance or delay in performance of the terms or conditions of this Agreement
due to acts of God, acts of governments, war, riots, strikes, accidents in transportation, or
other causes beyond the reasonable control of such Party, but such force majeure shall toll
any and all obligations and time periods for so long as such force majeure continues.

	 
	18.3	 	Bankruptcy. All licenses (and to the extent applicable rights) granted under or
pursuant to this Agreement by Memory to Roche are, and shall otherwise be deemed to be, for
purposes of Section 365(n) of Title 11, US Code (the “Bankruptcy Code”), licenses of
rights to “intellectual property” as defined under Section 101(60) of the Bankruptcy Code.
Unless Roche elects to terminate this Agreement under Article 16, the Parties agree that
Roche, as a licensee or sublicensee of such rights under this Agreement, shall retain and may
fully exercise all of its rights and elections under the Bankruptcy Code, subject to the
continued performance of its obligations under this Agreement.

	 
	18.4	 	Governing Law. This Agreement shall be governed by and interpreted in accordance
with the laws of New Jersey, without giving effect to principles of conflicts of law.

	 
	18.5	 	Waiver. The waiver by a Party of a breach or a default of any provision of this
Agreement by the other Party shall not be construed as a waiver of any succeeding breach of
the same or any other provision, nor shall any delay or omission on the part of a Party to
exercise or avail itself of any right, power or privilege that it has or may have hereunder
operate as a waiver of any right, power or privilege by such Party.

	 
	18.6	 	Notices. Any notice or other communication in connection with this Agreement must be
in writing and may be given by any of the following methods: (i) personal delivery against a
signed receipt; (ii) registered or certified mail, postage prepaid, return receipt requested;
or (iii) by overnight delivery service which obtains a signed receipt. Notice shall be
effective when delivered to the addressee at the address listed below or such

[*] CONFIDENTIAL TREATMENT REQUESTED

42

 

	 	 	other address as the addressee shall have specified in a written notice actually received by
the addresser.

	 
	 	 	If to Memory:

Memory Pharmaceuticals Corp.

100 Philips Parkway

Montvale, New Jersey 07645

Attn: Chief Executive Officer

Attn: Head of Business Development

	 	 	and

Sills Cummis Epstein & Gross P.C.

One Riverfront Plaza

Newark, New Jersey 07102

Attn: Ira A. Rosenberg, Esq.

	 	 	If to Roche:

F. Hoffmann-La Roche Ltd

Grenzacherstrasse 124

CH-4070

Basel, Switzerland

Attn: Legal Department

	 	 	and

Hoffmann La-Roche Inc.

340 Kingsland Street

Nutley, NJ 07110

Attn.: Corporate Secretary

	18.7	 	No Agency. Nothing herein shall be deemed to constitute either Party as the agent or
representative of the other Party. Each Party shall be an independent contractor, not an
employee or partner of the other Party. Each Party shall be responsible for the conduct of
activities at its own facilities and for any liabilities resulting therefrom. Neither Party
shall be responsible for the acts or omissions of the other Party, and neither Party will have
authority to speak for, represent or obligate the other Party in any way without prior written
authority from the other Party.

	 
	18.8	 	Entire Agreement. This Agreement and the Exhibits and Schedules hereto (which
Exhibits and Schedules are deemed to be a part of this Agreement for all purposes) contain the
full understanding of the Parties with respect to the subject matter hereof and supersede all
prior understandings and writings relating thereto. No waiver, alteration or modification of
any of the provisions hereof shall be binding unless made in writing and signed by the
Parties.

[*] CONFIDENTIAL TREATMENT REQUESTED

43

 

	18.9	 	Headings. The headings contained in this Agreement are for convenience of reference
only and shall not be considered in construing this Agreement.

	 
	18.10	 	Severability. In the event that any provision of this Agreement is held by a court
of competent jurisdiction to be unenforceable because it is invalid or in conflict with any
law of any relevant jurisdiction, the validity of the remaining provisions shall not be
affected, and the Parties shall negotiate a substitute provision that, to the extent possible,
accomplishes the original business purpose. During the period of such negotiation, and
thereafter if no substituted provision is agreed upon, any such provision which is enforceable
in part but not in whole shall be enforced to the maximum extent permitted by law.

	 
	18.11	 	Assignment. Neither this Agreement nor any of the rights or obligations hereunder
may be assigned by either Party without the prior written consent of the other Party, except
to an Affiliate of the assigning Party or to any other party who acquires all or substantially
all of the pharmaceutical business of the assigning Party by merger, sale of assets or
otherwise, subject to Roche’s rights pursuant to Sections 3.2(b) and 7.5(g) and so long as
such Affiliate or other party agrees in writing to be bound by the terms of this Agreement.
Notwithstanding the preceding, if Memory assigns its rights and/or obligations under this
Agreement to a party who acquires all or substantially all of the pharmaceutical business of
Memory by merger, sale of assets or otherwise, then Memory’s rights under Section 2.4 shall
become null and void

	 
	18.12	 	Successors and Assigns. Except as otherwise provided herein, this Agreement shall
be binding upon and inure to the benefit of the Parties hereto and their successors and
permitted assigns under Section 18.11. To the extent a Party has the right to terminate this
Agreement in connection with a Change of Control, the preceding sentence shall not in any
manner affect or reduce such Party’s right to terminate.

	 
	18.13	 	Intentionally Omitted.

	 
	18.14	 	Interpretation. The words “include,” “includes” and “including” shall be deemed to
be followed by the phrase “without limitation.” All references herein to Articles, Sections,
and Schedules shall be deemed references to Articles and Sections of, and Schedules to, this
Agreement unless the context shall otherwise require. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in accordance with
international accounting standards (“IAS”), as in effect from time to time. Unless
the context otherwise requires, countries shall include territories.

	 
	18.15	 	Counterparts. This Agreement may be executed by fax and in any number of
counterparts, each of which shall be deemed an original but all of such together shall
constitute one and the same instrument.

[*] CONFIDENTIAL TREATMENT REQUESTED

44

 

          IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed in their
names by their properly and duly authorized officers or representatives as of the dates below
written.

	 	 	 	 	 	 	 
	MEMORY PHARMACEUTICALS CORP.	 	HOFFMANN-LA ROCHE INC.
	 
	 	 	 	 	 	 
	By:

	 	/s/ James R. Sulat
	 	By:
	 	/s/ Dennis E. Burns
	Title:

	 	Chief Executive Officer
	 	Title:
	 	Vice President,
	 

	 	 	 	 	 	Global Head of Business Development
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	F. HOFFMANN-LA ROCHE LTD
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Stefan Arnold
	 

	 	 	 	Title:
	 	Deputy Director
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Dr. Peter Hug
	 

	 	 	 	Title:
	 	Executive Vice President,
	 

	 	 	 	 	 	Pharma Partnering

[*] CONFIDENTIAL TREATMENT REQUESTED

45

 

Schedule 1

Compound 3454 Data and Reports

[*]

[*] CONFIDENTIAL TREATMENT REQUESTED

 

 

SCHEDULE 2

Intentionally Omitted

[*] CONFIDENTIAL TREATMENT REQUESTED

 

 

Schedule 3

[*] Guidelines for Compounds

[*]

[*] CONFIDENTIAL TREATMENT REQUESTED

 

 

SCHEDULE 4

End of Phase I Criteria

[*]

[*] CONFIDENTIAL TREATMENT REQUESTED

 

 

EXHIBIT A

Workplan

[*]

[*] CONFIDENTIAL TREATMENT REQUESTED

 

 

EXHIBIT B

Payments With Respect to 3454 Products

	1.	 	Payments to Maintain Roche License Rights with respect to 3454 Products.

	 	(a)	 	Neurological Indications. Roche shall pay to Memory, in order to
maintain its license rights with respect to 3454 Products pursuant to Section 4.4 of
the Agreement and the other provisions of the Agreement with respect to such 3454
Products, the following non-refundable and non-creditable payments upon the first
occurrence of the following Events for such any such 3454 Product.

	 	 	 	 	 	 
	 
	 	Event	 	 	Payment (mio US$)	 
	 	[*](or foreign equivalent) for a Neurological Indication
and delivery of the data and reports specified in
Schedule 1

	 	 	[*]	 
	 	[*] (or foreign equivalent) for a Neurological
Indication and delivery of the data and reports
specified in Schedule 1

	 	 	[**]	 
	 

	 	(b)	 	Psychiatric Indications. Roche shall pay to Memory, in order to
maintain its license rights with respect to 3454 Products pursuant to Section 4.4 of
this Agreement and the other provisions of the Agreement with respect to such 3454
Products, the following non-refundable and non-creditable payments upon the first
occurrence of the following Events for any such 3454 Product.

	 	 	 	 	 	 
	 
	 	Event	 	 	Payment (mio US$)	 
	 	[*] (or foreign equivalent) for a Psychiatric Indication
and delivery of the data and reports specified in
Schedule 1

	 	 	[*]	 
	 	[*] (or foreign equivalent) for a Psychiatric Indication
and delivery of the data and reports specified in
Schedule 1

	 	 	[*+]	 
	 

	 	 	 	Each payment in Section 1(a) and 1(b) shall be due and payable by Roche within sixty
(60) days after occurrence of the applicable Event. Roche will make each of such
payments only once.

 

			
	*	 	If any Product is for a Neurological
indication other than Alzheimer’s Disease, then the payment shall be [*].

	 
	+	 	If any Product is for a Psychiatric
Indication other than schizophrenia, then the payment shall be [*].

[*] CONFIDENTIAL TREATMENT REQUESTED

 

 

	 	 	 	For the avoidance of doubt, the Parties confirm and agree that no amount payable
under Section 4.4 of the Agreement or this Exhibit B or any of the other Exhibits
thereto shall reduce any royalties payable under Article V of the Agreement or any
of the other Exhibits thereto.

	2.	 	Development Event Based Payments.

	 	(a)	 	Neurological Indications. Roche shall pay to Memory with respect to
any 3454 Product the following non-refundable and non-creditable payments upon the
first occurrence of the following Events for such 3454 Product:

	 	 	 	 	 	 
	 
	 	Event	 	 	Payment (mio US$)	 
	 	[*] (or a foreign equivalent) for a Neurological

Indication

	 	 	[*]	 
	 	[*] for a Neurological Indication

	 	 	[*]	 
	 	[*] for a Neurological Indication

	 	 	[*]	 
	 

	 	(b)	 	Psychiatric Indications. Roche shall pay to Memory with respect to any
3454 Product the following non-refundable and non-creditable payments upon the first
occurrence of the following Events for such 3454 Product:

	 	 	 	 	 	 
	 
	 	Event	 	 	Payment (mio US$)	 
	 	[*] (or foreign equivalent) for a Psychiatric Indication

	 	 	[*]	 
	 	[*] for a Psychiatric Indication

	 	 	[*]	 
	 	[*] for a Psychiatric Indication

	 	 	[*]	 
	 

	 	(c)	 	Other Indications. Roche shall pay to Memory the following
non-refundable, non-creditable payments upon the first occurrence of the following
Events for a 3454 Product:

	 	 	 	 	 	 
	 
	 	Event	 	 	Payment (mio US$)	 
	 	[*] (or foreign equivalent) for an Other Indication

	 	 	[*]	 
	 	[*] for an Other Indication

	 	 	[*]	 
	 	[*] for an Other Indication

	 	 	[*]	 
	 

[*] CONFIDENTIAL TREATMENT REQUESTED

 

 

	 	 	 	Each payment in Section 2(a), 2(b) and 2(c) shall be due and payable by Roche within
sixty (60) days after occurrence of the applicable Event. Roche will make each of
such payments only once.

	 
	 	 	 	For the avoidance of doubt, the Parties confirm and agree that no amount payable
under Section 4.4 of the Agreement or this Exhibit B or any of the other Exhibits
thereto shall reduce any royalties payable under Article 5 of the Agreement or any
of the other Exhibits thereto.

[*] CONFIDENTIAL TREATMENT REQUESTED

 

 

EXHIBIT C

Payments with respect to Memory Products

Roche shall pay to Memory with respect to each Memory Product the following non-refundable and
non-creditable payments upon each occurrence of the following Events with respect to such Memory
Product:

	 	 	 	 	 	 
	 
	 	Event	 	 	Payment (mio US$)	 
	 	[*] (or a foreign equivalent) for any Indication

	 	 	[*]	 
	 	[*] (or a foreign equivalent) for any Indication

	 	 	[*]	 
	 	[*] (or a foreign equivalent) for any Indication

	 	 	[*]	 
	 	[*] (or a foreign equivalent) for any Indication

	 	 	[*]	 
	 	[*] for any Indication

	 	 	[*]	 
	 	[*] for any Indication

	 	 	[*]	 
	 

Each payment described in this Exhibit C shall be due and payable by Roche within sixty (60) days
after the occurrence of the applicable Event. Roche will make each of such payments (i) upon the
occurrence of each of such Events, regardless of how many Memory Products achieve such Events and
(ii) only once with respect to each Memory Product.

For the avoidance of doubt, the Parties confirm and agree that (i) no amount payable under Section
4.4 of the Agreement or this Exhibit C shall reduce any royalties payable under Article 5 of the
Agreement or any of the other Exhibits thereto and (ii) the milestones and royalties payable with
respect to 3454 Products are set forth, respectively, in Exhibit B and Exhibit E.

[*] CONFIDENTIAL TREATMENT REQUESTED

 

 

EXHIBIT D

Payments with respect to Collaboration Products

Roche shall pay to Memory with respect to each Collaboration Product the following non-refundable
and non-creditable payments upon each occurrence of the following Events with respect to such
Collaboration Product:

	 	 	 	 	 	 
	 
	 	Event	 	 	Payment (mio US$)	 
	 	[*] (or a foreign equivalent) for any Indication

	 	 	[*]	 
	 	[*] (or a foreign equivalent) for any Indication

	 	 	[*]	 
	 	[*] (or a foreign equivalent) for any Indication

	 	 	[*]	 
	 	[*] (or a foreign equivalent) for any Indication

	 	 	[*]	 
	 	[*] for any Indication

	 	 	[*]	 
	 	[*] for any Indication

	 	 	[*]	 
	 

Each payment described in this Exhibit D shall be due and payable by Roche within sixty (60) days
after the occurrence of the applicable Event. Roche will make each of such payments (i) upon the
occurrence of each of such Events, regardless of how many Collaboration Products achieve such
Events and (ii) only once with respect to each Collaboration Product.

For the avoidance of doubt, the Parties confirm and agree that no amount payable under Section 4.4
of the Agreement or this Exhibit D shall reduce any royalties payable under Article 5 of the
Agreement or any of the other Exhibits thereto.

[*] CONFIDENTIAL TREATMENT REQUESTED

 

 

EXHIBIT E

Royalties with respect to 3454 Products

	1.	 	Royalties for Neurological Indications. Roche shall pay to Memory the following
payments for a given 3454 Product having a Regulatory Approval for a Neurological Indication,
based upon the Net Sales of such 3454 Product, which such Net Sales shall be subject to
adjustment as provided in Article 5 of the Agreement and this Exhibit E. Such royalty
payments shall be calculated by multiplying the following percentages by the following annual
Net Sales of such 3454 Product (all Net Sales amounts in $ US million):

	 	 	 	 	 	 
	 
	 	Annual Net Sales	 	 	Percent (%) of Net Sales	 
	 	> 0 - < [*]

	 	 	[*]	 
	 	>
[*] - < [*]

	 	 	[*]	 
	 	> [*] - < [*]

	 	 	[*]	 
	 	> [*]

	 	 	[*]	 
	 

	 	 	By way of illustration, assume in calendar year 2012 that (i) Net Sales of the 3454 Product
total $ [*] and (ii) no adjustments or deductions to payments under Article 5 of the
Agreement or this Exhibit E apply. The royalties due and payable by Roche to Memory for
such Net Sales would be $ [*], calculated as follows:

	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	Applicable	 	 	 	 
	 	Net Sales (in	 	 	Sales-Based Payment	 	 	Amount Payable (in	 
	 	millions)	 	 	Percentage	 	 	millions)	 
	 	US$ [*]

	 	 	[*] %
	 	 	US$ [*]	 
	 	US$ [*]

	 	 	[*] %
	 	 	US$ [*]	 
	 	US$ [*]

	 	 	[*] %
	 	 	US$ [*]	 
	 	US$ [*]

	 	 	[*] %
	 	 	US$ [*]	 
	 	Total

	 	 	 	 	 	US$ [*]	 
	 

	2.	 	Royalties for Psychiatric Indications. Roche shall pay to Memory the following
payments for a given 3454 Product having a Regulatory Approval for a Psychiatric Indication,
based upon the Net Sales of such 3454 Product, which such Net Sales shall be subject to
adjustment as provided in Article 5 of the Agreement and this Exhibit E. Such royalty
payments shall be calculated by multiplying the following percentages by the following annual
worldwide Net Sales of such 3454 Product (all Net Sales amounts in $ US million):

	 	 	 	 	 	 
	 
	 	Annual Net Sales	 	 	Percent (%) of Net Sales	 
	 	> 0 - < [*]

	 	 	[*]	 
	 	> [*] - < [*]

	 	 	[*]	 
	 	>
[*] - < [*]

	 	 	[*]	 
	 	> [*]

	 	 	[*]	 
	 

[*] CONFIDENTIAL TREATMENT REQUESTED

 

 

EXHIBIT F

Royalties with respect to Memory Products

Roche shall pay to Memory the following payments for each Memory Product having a Regulatory
Approval for any Indication, based upon the Net Sales of such Memory Product, which such Net Sales
shall be subject to adjustment as provided in Article 5 of the Agreement and this Exhibit F. Such
royalty payments shall be calculated by multiplying the following percentages by the following
annual Net Sales of such Memory Product (all Net Sales amounts in $ US million):

	 	 	 	 	 	 
	 
	 	Annual Net Sales	 	 	Percent (%) of Net Sales	 
	 	> 0 - < [*]

	 	 	[*]	 
	 	>
[*] - < [*]

	 	 	[*]	 
	 	> [*]

	 	 	[*]	 
	 

By way of illustration, assume in calendar year 2012 that (i) Net Sales of Memory Products
total $[1,700,000,000] and (ii) no adjustments or deductions to payments under Article 5 of
the Agreement or this Exhibit F apply. The royalties due and payable by Roche to Memory for
such Net Sales would be $ [165 million], calculated as follows:

	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	Applicable	 	 	 	 
	 	Net Sales (in	 	 	Sales-Based Payment	 	 	Amount Payable (in	 
	 	millions)	 	 	Percentage	 	 	millions)	 
	 	US$[*]

	 	 	[*] %
	 	 	US$[*]	 
	 	US$[*]

	 	 	[*] %
	 	 	US$[*]	 
	 	US$[*]

	 	 	[*] %
	 	 	US$[*]	 
	 	Total

	 	 	 	 	 	US$[*]	 
	 

[*] CONFIDENTIAL TREATMENT REQUESTED

 

 

EXHIBIT G

Royalties with respect to Collaboration Products

Roche shall pay to Memory the following payments for each Collaboration Product having a Regulatory
Approval for any Indication, based upon the Net Sales of such Collaboration Product, which such Net
Sales shall be subject to adjustment as provided in Article 5 of the Agreement and this Exhibit G.
Such royalty payments shall be calculated by multiplying the following percentages by the following
annual Net Sales of such Collaboration Product (all Net Sales amounts in $ US million):

	 	 	 	 	 	 
	 
	 	Annual Net Sales	 	 	Percent (%) of Net Sales	 
	 	> 0 - < [*]	 	 	[*]	 
	 	> [*] - < [*]
	 	 	[*]	 
	 	> [*]

	 	 	[*]	 
	 

     By way of illustration, assume in calendar year 2012 that (i) Net Sales of Collaboration
Products total $[*] and (ii) no adjustments or deductions to payments under Article 5 of the
Agreement or this Exhibit G apply. The royalties due and payable by Roche to Memory for
such Net Sales would be $[*], calculated as follows:

	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	Applicable	 	 	 	 
	 	Net Sales (in	 	 	Sales-Based Payment	 	 	Amount Payable (in	 
	 	millions)	 	 	Percentage	 	 	millions)	 
	 	US$[*]

	 	 	[*] %
	 	 	US$[*]	 
	 	US$[*]

	 	 	[*] %
	 	 	US$[*]	 
	 	US$[*]

	 	 	[*] %
	 	 	US$[*]	 
	 	Total

	 	 	 	 	 	US$[*]	 
	 

[*] CONFIDENTIAL TREATMENT REQUESTED

 

 

EXHIBIT H

Intentionally Omitted

[*] CONFIDENTIAL TREATMENT REQUESTED

 

 

EXHIBIT I

Memory Patent Rights

[*]

[*] CONFIDENTIAL TREATMENT REQUESTED

 

 

EXHIBIT J

Memory Patent Rights Primarily Applicable

to Memory Screening Technology

[*]

[*] CONFIDENTIAL TREATMENT REQUESTED

 

 

EXHIBIT K

Heads of Agreement for Co-Promotion

of 3454 Product

     1. Memory Election to Co-Promote. Memory shall have the right to elect to co-promote
each 3454 Product in the US, on a Product-by-Product basis, during the Co-Promotion Term beginning
on the date of the first commercial sale of such 3454 Product in the Co-Promotion Territory.
Within forty-five (45) days after the end of Phase II with respect to each 3454 Product, Roche
shall provide Memory with (i) the results and analysis of Phase II studies, and (ii) Roche’s then
final, approved Phase III development plan (including budget). Memory shall exercise its
co-promotion right with respect to each 3454 Product by giving written notice thereof to Roche
within forty-five (45) days after receipt of the items described in the immediately preceding
sentence.

     2. Co-Promotion Territory. United States of America and its possessions and
territories, including Puerto Rico.

     3. Term and Termination. The Co-Promotion Term for each 3454 Product shall be for a
period of ten (10) years from the first commercialization of such 3454 Product in the first
approved co-promotion indication in the Co-Promotion Territory. Memory shall have the right to
terminate the Co-Promotion Agreement with respect to any 3454 Product if the Net Sales thereof in
the US are less than an amount for which a co-promotion arrangement for such 3454 Product would be
financially practicable and profitable.

     4. Assignability. Memory may not assign its co-promotion rights without Roche’s
express written consent.

     5. Additional Indications. The co-promotion by the Parties with respect to any 3454
Product that has received a Regulatory Approval for a Neurological Indication or a Psychiatric
Indication and has been the subject of a Launch in the US shall extend to any additional
Neurological Indication or Psychiatric Indication which Roche determines to obtain the applicable
Regulatory Approvals to market and sell the 3454 Product in the US for such additional Neurological
Indication or Psychiatric Indication. In such case, Memory shall be responsible for [*] percent
([*]%) of the cost of obtaining such Regulatory Approvals, including the cost of conducting
clinical trials, which shall be paid by Memory to Roche promptly after Roche obtains all Regulatory
Approvals for such 3454 Product in the US to enable Roche and Memory to market and sell such 3454
Product in the US for such additional Neurological Indication or Psychiatric Indication.

          If Roche has received all Regulatory Approvals in the US to market and sell a 3454 Product for
a Neurological Indication or a Psychiatric Indication and an Other Indication and is the subject of
co-promotion by Memory, the Parties shall negotiate in good faith and agree upon an equitable
adjustment to the compensation and cost-sharing provisions set forth in the Co-Promotion Agreement,
to account for the fact that Memory shall not have any right or obligation to co-promote such 3454
Product for the Other Indication.

[*] CONFIDENTIAL TREATMENT REQUESTED

 

 

     6. Financials. If Memory exercises its right to co-promote a 3454 Product in the
Co-Promotion Territory, Memory will be responsible for (i) carrying out [*] percent ([*]%) of the
3454 Product detailing and (ii) [*] percent ([*]%) of the marketing costs of such 3454 Product in
the US; and Memory shall be entitled to receive from Roche [*] percent ([*]%) of the gross profits
from the sale of such 3454 Product in the US. For avoidance of doubt, the marketing costs referred
to in Section 5(ii) hereto do not include any direct cost of Roche field force; by way of example,
but not limitation, marketing costs include direct to consumer advertising, professional journal
advertising and professional symposia. In addition, if Memory exercises its right to co-promote a
3454 Product, the royalties otherwise payable by Roche to Memory hereunder with respect to the Net
Sales of such 3454 Product in the US shall be reduced by [*] percent ([*]%). Furthermore, in order
to exercise its right to co-promote a 3454 Product, Memory must make a one-time payment to Roche in
the amount of [*] percent ([*]%) of Roche’s budgeted Phase III global development costs for such
3454 Product as set forth in Roche’s final, approved Phase III development plan (including budget).

     7. Governance. Within ninety (90) days after Memory’s notice to Roche that it wishes
to co-promote a 3454 Product, the Parties shall form a Joint Promotional Team (“JPT”), which will
oversee the co-promotional activities of the Parties with respect to such 3454 Product. Consistent
with prudent business practices, the JPT will discuss co-promotional activities relating to such
3454 Product and establish mechanisms for achieving an effective co-promotion collaboration. The
JPT shall be comprised of three Roche representatives and one Memory representative, and a Roche
representative will be Chair of the JPT. Each Party shall have one collective vote, and decisions
shall be made by consensus. For avoidance of doubt, the final decision in all co-promotion matters
will reside with Roche.

     8. Memory’s Obligations. Memory must provide at least [*] percent ([*]%) of the total
promotional effort in a given calendar year as established by number and type of details in
accordance with the Co-Promotion Plan. Memory may not subcontract its field sales force to fulfill
its co-promotion obligations.

     9. Roche’s Obligations and Authority. Roche shall be ultimately responsible for
establishing and modifying the terms and conditions with respect to the sale of the 3454 Product,
including, without limitation, pricing for the 3454 Product. Roche shall provide Memory, without
charge, with copies of relevant training materials regarding the detailing and promotion of the
3454 Product. Memory shall then supply such copies of such training materials to its sales force.
Roche may elect, at its discretion, to make available sales and training personnel to assist Memory
in training Memory’s sales force to detail and promote the 3454 Product. For avoidance of doubt,
each Party has final responsibility for the adequate training of its own sales force.

     10. Non-Solicitation. Neither Party shall recruit sales personnel from the other
Party.

     11. Reporting Provisions. The Parties will negotiate in good faith and agree to
appropriate reporting provisions to be included in the Co-Promotion Agreement. Memory shall have
an obligation to report adverse events to Roche in a timely fashion.

[*] CONFIDENTIAL TREATMENT REQUESTED

 

 

     12. Indemnification. Each Party shall indemnify the other Party for all claims
related to the marketing or promotion of the 3454 Product to the extent that such Party is
negligent or fails to promote the 3454 Product in accordance with applicable federal and state
laws.

     13. Full Agreement. Consistent with the terms of this Heads of Agreement, the
Co-Promotion Agreement shall contain ordinary and customary terms for an agreement in which a
pharmaceutical product of like nature is jointly co-promoted and detailed in the US, such as
insurance, additional warranties and the like.

[*] CONFIDENTIAL TREATMENT REQUESTED

 

 

EXHIBIT L

Included Roche Compounds

[*]

[*] CONFIDENTIAL TREATMENT REQUESTED

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