Document:

Exhibit 10.1

 

SETTLEMENT AND

TERMINATION OF
LICENSE AGREEMENT

 

Besins Healthcare Luxembourg
SARL and its Affiliates (“Besins”) and Atossa Genetics, Inc. (“Atossa”) (collectively with Besins, the
“Parties”) enter into this Settlement and Termination of License Agreement (“Termination Agreement”) as
of this 4th day of August, 2016 (the “Effective Date”).

 

RECITALS

 

A.Besins and Atossa
entered into an Intellectual Property License Agreement as of May 14, 2015 (“License Agreement”) which provided, among
other terms, that Besins granted to Atossa an exclusive, transferable license under Besins Core IP and Besins Platform IP to make,
have made, manufacture, have manufactured, use, sell, have sold, offer to sell, have offered to sell, import, have imported, export,
have exported, and otherwise transfer, dispose of, distribute, or Develop and improve Afimoxifene Gel for the sole purposes of
Atossa obtaining Regulatory Approval and Commercialization of Afimoxifene Gel in the Field in the Territory during the Term and
practicing any method claimed in the Besins Core IP and Besins Platform IP in the Field in the Territory during the Term.

 

B.Prior to entering
into the License Agreement, in connection with its due diligence efforts, and subsequent to entering into the License Agreement,
Atossa received from and/or was provided access to substantial amounts of Besins’ proprietary and confidential information.

 

C.After entering
into the License Agreement, Besins and Atossa disputed certain terms and conditions of the License Agreement, including the scope
of the rights granted to Atossa pursuant to the License Agreement.

 

D.When Besins and
Atossa could not resolve the dispute through negotiations, Atossa filed suit on January 29, 2016, against Besins in the United
States District Court for the District of Delaware (“Court”) in a case captioned Atossa Genetics, Inc. v. Besins
Healthcare Luxembourg SARL, Case No. 1:16-cv-00045 (GMS) (the “Litigation”), claiming, among other allegations,
that Besins had breached the License Agreement. Atossa sought damages and declaratory relief. Besins answered the Complaint on
March 8, 2016, denying the Atossa allegations and asserting counterclaims against Atossa alleging that Atossa breached the License
Agreement, committed fraud, and committed negligent misrepresentation. Besins sought damages, declaratory and other relief.

 

E.The Parties have
engaged in extensive discussions and negotiations since filing their respective claims in the Litigation seeking to resolve the
disputes between them and have agreed to resolve all outstanding disputes between them in accordance with this Termination Agreement.

 

TERMS

 

In consideration of
their respective performance of the promises, terms, conditions and obligations in this Termination Agreement, Besins and Atossa
agree to terminate all rights granted to Atossa under the License Agreement and to voluntarily dismiss the Litigation in accordance
with all terms of this Termination Agreement.

 

1.Defined Terms. Unless
otherwise defined in this Termination Agreement, capitalized terms shall have the same meaning as set forth in the License Agreement.

 

 2. Termination of License Agreement.

 

a.The License Agreement
shall automatically terminate as of the Effective Date, by mutual agreement of Besins and Atossa in accordance with paragraph 8.2(a)
of the License Agreement, except for those terms set forth in paragraph 9 below that the Parties expressly agree will survive termination
of the License Agreement.

 

     

     

    

 

b.Effect of
Termination.

 

i.Upon termination
of the License Agreement, Atossa shall have relinquished and shall no longer have or retain any right, title or interest whatsoever
to Develop or Commercialize Afimoxifene Gel for treatment and/or prevention of or in any way related to Hyperplasia, Breast Density,
Proliferative Breast Disease, Benign Breast Disease, Mastalgia, Gynecomastia, Breast Scarring, DCIS, any other Indication or Additional
Indication, or any indication relating in any way to breast cancer or breast disease, whether within the Field or outside the Field.

 

ii.Upon termination
of the License Agreement, Atossa also shall have relinquished and shall no longer have or retain, any right, title or interest
whatsoever in any Besins Core IP (as defined in paragraph 1.12 of the License Agreement); Besins Platform IP (as defined in paragraph
1.13 of the License Agreement); Besins’ Confidential Information; Besins Data; Besins Development Record; Besins Intellectual
Property; Besins Know-How; Besins Manufacturing Information; and Besins Regulatory Information (including but not limited to IND
59,081 and IND 66,076; and any samples of API (as defined in paragraph 1.7 of the License Agreement), whether in final or in-process
intermediate form; all of the foregoing is referred to collectively as “Besins Proprietary Information.”

 

iii.Upon termination
of the License Agreement, Atossa also shall have relinquished and shall no longer have or retain, any right, title, or interest
whatsoever in API.

 

iv.Upon termination
of the License Agreement, Atossa shall have relinquished and shall no longer have or retain any right, title or interest whatsoever
to make, have made, manufacture, have manufactured, use, sell, have sold, offer to sell, have offered to sell, import, have imported,
export, have exported, or otherwise transfer, dispose of, distribute or Develop and/or improve Afimoxifene Gel and may not practice
any method claimed in the Besins Core IP and Besins Platform IP (as defined in paragraphs 1.12 and 1.13 of the License Agreement)
or any other Besins Intellectual Property.

 

v.Upon termination
of the License Agreement, and except as set forth in this Termination Agreement, Besins shall have relinquished and shall no longer
retain any right, title or interest whatsoever in any Atossa Background IP or Atossa Foreground IP or any other Atossa Know-How,
Atossa Intellectual Property, or Atossa Confidential Information.

 

vi.To avoid doubt,
any and all rights, grants, or licenses, express or implied (i) granted to Atossa pursuant to the License Agreement, including
with respect to the manufacture, use or development of API using Besins Proprietary Information, or the DMF or DMF Proprietary
Information, as defined in paragraph 5 hereof, for any purpose, shall terminate and shall revert to Besins; and (ii) granted to
Besins pursuant to paragraph 2.2 of the License Agreement, shall terminate and shall revert to Atossa, on the Effective Date.

 

c.To the extent
that it has not already done so, Atossa shall, immediately as of the Effective Date, terminate all efforts whatsoever to make,
have made, manufacture, have manufactured, use, sell, have sold, offer to sell, have offered to sell, import, have imported, export,
have exported, or otherwise transfer, dispose of, distribute, or Develop and/or improve Afimoxifene Gel and/or API using Besins
Proprietary Information, the DMF or DMF Proprietary Information, as defined in paragraph 5 hereof, Atossa also shall, immediately
as of the Effective Date, terminate all efforts to Develop, obtain Regulatory Approval for, Commercialize, and/or conduct research
and/or clinical trials of Afimoxifene Gel for use in treatment and/or prevention of Hyperplasia, Breast Density, Proliferative
Breast Disease, Benign Breast Disease, Mastalgia, Gynecomastia, Breast Scarring, DCIS, any other Indication or Additional Indication,
or any indication relating in any way to breast cancer. To the extent that it has not already done so, Atossa shall, as of the
Effective Date, discontinue any communications with current or former employees or representatives of the National Institutes of
Health/National Cancer Institute (“NCI”), members of Medical Advisory Boards convened by Atossa for the purpose of
evaluating Afimoxifene Gel and/or manufacturing API, and any other Third Parties, solely to the extent that such communications
relate to the Development or Commercialization of Afimoxifene Gel and/or manufacturing API using Besins Proprietary Information,
the DMF, or DMF Proprietary Information, as defined in paragraph 5 hereof.

 

    2.

     

    

 

d.Notwithstanding
the foregoing, Atossa agrees that for a period of three years following the Effective Date, it will reasonably cooperate with Besins
upon request with respect to Besins’ efforts to Develop and Commercialize Afimoxifene Gel, provided that Besins will reimburse
Atossa for the reasonable costs of any such cooperation.

 

e.Atossa warrants
and represents that it engaged in no efforts to Develop or Commercialize Afimoxifene Gel and/or to manufacture API outside the
United States except with respect to potential locations for conducting clinical trials and/or manufacturing API.

 

f.Atossa has recently
announced that it has initiated a new drug development program for oral application of Endoxifen, an active metabolite of Tamoxifen,
and has announced that the indication being pursued through this development program is to treat breast cancer patients who are
refractory to Tamoxifen. The Parties acknowledge that Besins’ patent applications identified in Exhibits C and D to the License
Agreement refer to certain transdermal hydroalcoholic gel compositions with derivatives of Tamoxifen not licensed to Atossa under
the License Agreement (“Tamoxifen Derivatives”). In connection with this Termination Agreement, Atossa warrants and
represents (A) that it has not relied upon, incorporated, or otherwise used Besins Proprietary Information in connection with any
pre-clinical or clinical development of Endoxifen or any other Tamoxifen Derivatives; and (B) that it shall not rely upon, incorporate,
or otherwise use Besins Proprietary Information in connection with any pre-clinical or clinical development or commercialization
of Tamoxifen Derivatives. Notwithstanding the foregoing, this Termination Agreement shall not preclude Atossa’s development
of Endoxifen or other Tamoxifen Derivatives (other than Afimoxifene) using information in the public domain, even to the extent
such information in the public domain is also referred to in Besins Proprietary Information, provided that such information has
not entered the public domain via Atossa’s unauthorized disclosure of Besins’ Proprietary Information.

 

3.Dismissal of
Litigation. Within 15 business days after the Effective Date, the Parties shall jointly file a stipulation with the Court that
the Litigation is voluntarily dismissed with prejudice. Each Party shall be solely responsible for its own costs, expenses, and
attorneys’ fees incurred in connection with the Litigation.

 

4.Return of Besins
and Atossa Data and Information. On or before five (5) business days after the Effective Date, Atossa shall deliver to Besins
and/or certify the destruction of, as indicated in this paragraph 4 and paragraphs 4(b)–(f) below, all copies and versions
of documents and data, including electronic documents, within Atossa’s possession, custody, or control, whether created by
Besins, Atossa, or a Third Party, containing or revealing Besins Proprietary Information. The Parties agree that the definition
of “Atossa’s possession, custody, or control” and Atossa’s obligations under paragraphs 4–8 does
not encompass accessing, restoring, or searching disaster-recovery backup media maintained in third-party offsite storage facilities,
provided that Atossa agrees that it shall not access or restore such backup media at any time for any purpose other than (i) for
disaster-recovery purposes; (ii) if necessary, to identify and produce materials responsive to a court order or valid subpoena;
or (iii) if necessary to enforce or prove compliance with this Termination Agreement. To the extent that Atossa accesses its disaster
recovery backup media for any of the limited purposes permitted under this paragraph, it shall promptly notify Besins and shall
take steps to preserve and ensure non-disclosure of Besins Proprietary Information. Further, in the event that Atossa accesses
such backup media in response to a court order or valid subpoena in accordance with subparagraph (ii) above, Atossa shall notify
Besins prior to the production of any materials recovered from backup media so that Besins can determine whether it will take steps
to object to such court order or subpoena or seek to modify the scope of any request for information. Atossa acknowledges that
the restrictions and prohibitions on its use of Besins Proprietary Information set forth in this Agreement shall continue to apply
under all such circumstances.

 

    3.

     

    

 

a.Notwithstanding
the foregoing, the Parties agree that (i) Atossa need not deliver to Besins or destroy documents containing or revealing in the
body of the document itself Atossa attorney-client privileged communications or attorney work product; (ii) Atossa’s production
to Besins of any document containing or revealing Atossa attorney-client privileged communications or attorney work product does
not constitute and shall not be construed as a waiver of any applicable privileges; and (iii) Besins Proprietary Information set
forth in a non-privileged attachment to a privileged communication must be delivered to Besins or destroyed in accordance with
the provisions of this paragraph 4. The Parties further agree that a single archival copy of (i) all such privileged or work product
documents and (ii) all other materials referred to in paragraphs 4–8, shall be stored separately on encrypted media and maintained
in third-party escrow pursuant to a separate Escrow Agreement between the Parties, which Atossa may access, after notice to Besins,
exclusively to meet any requirements of Applicable Law and to confirm Atossa’s compliance with its obligations under this
Termination Agreement; provided, however, that Atossa may not disseminate or disclose any such documents or the Besins Proprietary
Information contained in them to anyone other than other Atossa’s in-house or outside counsel.

 

b.Atossa warrants
and represents that it has conducted a diligent search for all hard-copy documents containing or revealing Besins’ Proprietary
Information in Atossa’s possession, custody, or control, in accordance with the steps set forth in a side letter between
the Parties (the “Side Letter”), all of which steps are considered material to Besins’ decision to enter into
this Agreement. The Parties agree that they shall execute the Side Letter within two (2) business days after the Effective Date.
Subject to paragraph 4(a) regarding privileged or work product documents, Atossa shall deliver all versions and copies of such
documents to Besins at Atossa’s sole expense on or before five (5) days after the Effective Date. As used in this Termination
Agreement, “deliver” is defined as the date Atossa deposits materials with a carrier to be selected by Besins for shipment
to Besins.

 

c.Atossa warrants
and represents that it has also conducted a diligent search for all documents and data maintained by Atossa in electronic form
that contain or reveal Besins’ Proprietary Information in accordance with the Side Letter. Subject to paragraph 4(a) regarding
privileged or work product documents, Atossa further shall ensure that all such electronic documents in the possession, custody,
or control of every Atossa custodian and/or stored on servers within Atossa’s possession, custody, or control are permanently
deleted.

 

    4.

     

    

 

d.In addition,
Atossa warrants and represents that it disclosed Besins Proprietary Information to the individuals and entities identified in the
Side Letter for the sole purpose of pursuing the development of Afimoxifene Gel pursuant to the License Agreement. Atossa shall
send a written notice to each such recipient of Besins Proprietary Information, with a copy to Besins, within five (5) business
days after the Effective Date to notify such entities or persons (i) that the License Agreement has been terminated, (ii) that
they continue to be obligated to maintain and preserve the confidentiality of Besins Proprietary Information, (iii) that the terms
and conditions of non-disclosure agreements entered into with such persons or entities remain in full force and effect, and (iv)
that Atossa has assigned to Besins all such non-disclosure agreements for purposes of enabling Besins to enforce such agreements
after the Effective Date. Atossa further warrants and represents that it did not disclose any Besins Proprietary Information to
any persons or entities other than as identified in the Side Letter.

 

e.To the extent
Atossa becomes aware after the Effective Date of or has a reasonable belief that there are documents or data, including electronic
documents, that contain or reveal Besins Proprietary Information that are not within Atossa’s possession, custody, or control,
other than as set forth in paragraph 4(c), Atossa shall advise Besins of the persons and entities who possess or may possess such
documents and shall take reasonable steps requested by Besins to secure the return or destruction of such documents.

 

f.To the extent
that any documents containing or revealing Besins Proprietary Information within Atossa’s possession, custody, or control
also could be construed to contain or reveal Atossa’s Confidential Information, Intellectual Property, or Know-How that is
not related to Afimoxifene Gel: (i) Atossa may redact all such Atossa Confidential Information, Intellectual Property, and/or Know-How
from such documents prior to producing such documents to Besins; and (ii) Atossa shall generally describe for Besins the information
redacted from each such document and identify the document from which it was redacted. Atossa may also use the Atossa Confidential
Information, Intellectual Property, or Know-How for uses other than the Development or Commercialization of Afimoxifene Gel only
if consistent with the restrictions set forth in paragraph 2 above. Atossa represents that its Confidential Information, Intellectual
Property, and/or Know-How, includes information relating to (i) Atossa’s proprietary medical devices (e.g., ForeCYTE
and FullCYTE); (ii) Atossa’s laboratory services and diagnostics test business, including Atossa’s former subsidiary
National Reference Laboratory for Breast Health, Inc. and NextCYTE; (iii) all therapeutics other than Afimoxifene (e.g.,
fulvestrant). Any materials produced by Atossa containing such information shall be identified as such when provided to Besins.
The Parties further agree that such information shall remain subject to the confidentiality obligations in Article 6 of the License
Agreement and paragraph 8(b) of this Termination Agreement; and Besins shall not rely upon, incorporate, or otherwise use any such
information for any purpose whatsoever other than to Develop and Commercialize Afimoxifene Gel. For avoidance of doubt, Atossa
remains the exclusive owner of all rights in Atossa’s Confidential Information, Intellectual Property, and/or Know-How even
if disclosed to Besins.

 

 g. Materials to be Delivered to Besins.

 

i.FDA materials.
In connection with the License Agreement, Atossa engaged in communications with the United States Food and Drug Administration
(“FDA”). Atossa warrants and represents that it has conducted a diligent search, as set forth in the Side Letter, for
all copies and versions of documents and data relating to Atossa’s efforts to obtain Regulatory Approval for Afimoxifene
Gel, including Atossa Regulatory Information and documents and data reflecting communications between Atossa and the FDA; internal
Atossa documents reflecting Atossa regulatory strategies, protocols and/or proposed protocols; briefing packages and briefing documents
submitted to the FDA including investigative drug brochures; pre-IND packages; meeting requests, IND-submissions and any and all
other submissions and/or supplemental submissions to the FDA; and all documents and data reflecting communications by the FDA.
Subject to paragraph 4, Atossa shall deliver to Besins all copies and versions of such documents and data at Atossa’s sole
expense on or before five (5) business days after the Effective Date. Atossa also warrants and represents that it did not develop
any IND relating to Afimoxifene Gel.

 

    5.

     

    

 

ii.NCI Materials.
Prior to and subsequent to entering into the License Agreement, Atossa engaged in extensive communications with NCI relating to
proposed Development, Regulatory Approval, and/or Commercialization of Afimoxifene Gel, including in connection with Hyperplasia,
Breast Density, and DCIS. Atossa warrants and represents that it has conducted a diligent search, as set forth in the Side Letter,
for the following to the extent related to proposed Development, Regulatory Approval, and/or Commercialization of Afimoxifene Gel
and within Atossa’s possession, custody, or control: all copies and versions of documents and data relating to communications
between Atossa and any representative of NCI; all protocols and proposed protocols prepared by Atossa or NCI; all materials submitted
to NCI; all documents related to or reflecting discussions about solicitations for funding for any clinical studies to be conducted
by or through NCI; all unpublished Besins Data; all documents provided to NCI pursuant to an October 21, 2015 nondisclosure agreement
between Atossa and NCI; and all other documents relating to Atossa’s Development of Afimoxifene Gel. Subject to paragraph
4(a), Atossa shall deliver to Besins at Atossa’s sole expense or, if electronic documents, shall permanently delete, all
such documents and data on or before five (5) business days after the Effective Date.

 

iii.Medical Advisory
Boards and Other Atossa Presentations. Pursuant to its efforts under the License Agreement, Atossa engaged third-party medical
advisors for advice and guidance concerning Development, Regulatory Approval, and/or Commercialization of Afimoxifene Gel and made
presentations to other Third Parties for the same or similar purposes. Such efforts included a meeting at the San Antonio Breast
Cancer Symposium on or about December 8, 2015; a meeting in San Francisco on September 24, 2015; and a presentation in Rockville,
Maryland in October, 2015. Atossa warrants and represents that it has conducted a diligent search, as set forth in the Side Letter,
for the following to the extent related to proposed Development, Regulatory Approval, and/or Commercialization of Afimoxifene Gel
and within Atossa’s possession, custody, or control: all documents reflecting communications between Atossa and any member
of any Medical Advisory Board, consultant, or other Third Party engaged by Atossa; briefing or meeting packages presented to any
Medical Advisory Board member, consultant or other Third Party; documents reflecting input or feedback from any Medical Advisory
Board member, consultant or other Third Party, including marketing, legislative or other strategic information; documents presented
by Atossa or Third Parties at Medical Advisory Board meetings; documents generated as a result of input from Medical Advisory Board
members, consultants or other Third Parties; confidentiality agreements entered into by Medical Advisory Board members, consultants
or other Third Parties; all documents containing or reflecting presentations made by Atossa relating in any way to Afimoxifene
Gel; and any other documents reflecting participation by medical doctors, consultants, or other Third Parties to advise Atossa
about Developing and/or Commercializing Afimoxifene Gel. Subject to paragraph 4(a), Atossa shall deliver to Besins at Atossa’s
sole expense, or, if electronic documents, shall permanently delete, all such documents and data on or before five (5) business
days after the Effective Date.

 

    6.

     

    

 

h.Pursuant to paragraph
6.1 of the License Agreement, Atossa shall provide a certification signed by an Atossa corporate officer in the form attached hereto
as Exhibit A on or before five (5) business days after the Effective Date affirming that it has complied with the provisions
of this paragraph 4.

 

5.Inabata Drug
Master File. Atossa acquired ownership and exclusive rights to the Drug Master File for API, known as DMF n° 1429, from
its owner, Inabata France (“Inabata”), pursuant to a July 2015 Agreement for Transfer of Drug Master File (“DMF
Transfer Agreement”), a copy of which is attached hereto as Exhibit B. (The Drug Master File shall be referred to
as the “DMF.”) Inabata developed a manufacturing process for API, which Atossa acquired from Inabata in connection
with Atossa’s efforts to Develop, obtain Regulatory Approval for, and Commercialize Afimoxifene Gel pursuant to the License
Agreement.

 

a.Pursuant to this
Termination Agreement, as of the Effective Date Atossa hereby sells, assigns, transfers, conveys, and delivers
to Besins its entire right, title and interest in and to the DMF and to the DMF Proprietary Information, as defined below in paragraph
5(b). Atossa shall also deliver or cause to be delivered to Besins the entire DMF, including any revisions or updates thereto,
and all copies thereof that Atossa has in its possession, custody, or control on or before five (5) business days after the Effective
Date.

 

b.Pursuant to the
DMF Transfer Agreement, Atossa also acquired rights, title and interest in and to all of the information, records, files, know-how
relating to or included in the DMF and in Annex 1 of the DMF Transfer Agreement, and all rights, title and interest in all
intellectual property rights (including concepts, inventions whether or not patentable, patents and patent applications, trademarks,
copyrights, trade secrets, and know-how) related thereto, and particularly the industrial ownership rights relating thereto. This
includes all scientific, technical and administrative files and the pharmaceutical files together with the formula and production
files and manufacturing batch records. (All of the foregoing information will be collectively referred to in this Termination Agreement
as the “DMF Proprietary Information”). Atossa shall deliver or cause to be delivered to Besins all copies and versions
of the DMF Proprietary Information at Atossa’s sole expense on or before five (5) business days after the Effective Date.

 

c.Atossa warrants
and represents to Besins that, as of the Effective Date, it is the sole owner of the DMF and the DMF Proprietary Information, to
the extent purchased pursuant to the DMF Transfer agreement attached as Exhibit B, and that Atossa has not sold, assigned, transferred,
conveyed or delivered any right, title or interest in or to the DMF or DMF Proprietary Information or copies of any such information,
to any Affiliate or Third Party.

 

d.Atossa warrants
and represents to Besins that it has paid Inabata in full, including all costs, duties, taxes or charges of any nature whatsoever
resulting from or arising out of Atossa’s acquisition of the DMF and the DMF Proprietary Information pursuant to the DMF
Transfer Agreement.

 

e.Atossa also warrants
and represents to Besins that it is not aware of any claims or demands asserted by Inabata or by any Third Party against Atossa
or, to Atossa’s knowledge, against Inabata relating in any way to the DMF or the DMF Proprietary Information.

 

f.Atossa shall
indemnify and hold Besins harmless from and against any claims, demands, or liabilities arising out of Atossa’s acquisition,
ownership, or use of the DMF and DMF Proprietary Information prior to the Effective Date.

 

    7.

     

    

 

 6. Delivery of API.

 

a.Atossa relinquishes,
sells, and assigns to Besins any and all right, title, and interest in and to (i) Afimoxifene Gel; and (ii) all samples, batches,
and supplies of and API, whether in final or in-process intermediates form, and whether acquired from Inabata or from Cambridge
Major Laboratories, Inc. and/or its affiliate AAI Pharma Services Corp. (“CML”). The Parties understand that there
are approximately 900 grams of API and intermediates sufficient to manufacture approximately one additional kilo of API, all of
which is in the possession of CML. Upon the Effective Date, Besins shall have exclusive authority to coordinate with CML and to
control the delivery of any or all of such samples, batches, and supplies of API, in-process intermediates, or Afimoxifene Gel
at Besins’ discretion and sole expense. In the event CML requests Atossa’s consent to Besins’ exclusive authority
to coordinate with CML, Atossa shall promptly provide such consent to CML.

 

b.To the extent
Besins cannot obtain the following from CML and requests Atossa’s assistance, Atossa shall also deliver or cause to be delivered
at Atossa’s sole expense on or before five (5) business days after the Effective Date for all such samples, batches, and
supplies:

 

		i.	Sample Name;

		ii.	Batch Number;

		iii.	Lot Number;

		iv.	Quantity of the Respective Samples;

		v.	Date of Manufacture;

		vi.	Certificate of Conformance for such samples including, but not limited to, the samples identified in Annex 2 to the DMF Transfer
Agreement; and

		vii.	Stability data.

 

c.Atossa shall
not have or retain any right, title, or interest in or to any documents, information, data, samples, contracts, protocols, API
specifications, or other information relating to the services performed by CML for Atossa, including any right to manufacture a
batch of API (collectively referred to as “API Information”).

 

d.Atossa shall
deliver or cause to be delivered to Besins at Atossa’s sole expense all copies and versions of all documents containing or
referring to API Information within five (5) business days after the Effective Date.

 

e.Atossa warrants
and represents to Besins that it has paid CML in full, including all costs, duties, taxes or charges of any nature whatsoever resulting
from or arising out of Atossa’s contract with CML and/or CML’s manufacture of API for Atossa for services performed
on or before the Effective Date. 

 

f.Atossa also warrants
and represents to Besins that it is not aware of any claims or demands asserted by CML any consultant or any other Third Party
against Atossa or, to Atossa’s knowledge, against CML relating to the manufacture of API by CML.

 

g.Atossa shall
indemnify and hold harmless Besins from and against any claims, demands, or liabilities arising out of the manufacture of API by
CML for Atossa or Atossa’s directions to CML to manufacture API.

 

 7. Termination Payments.

 

a.Termination
Payment. Besins shall pay Atossa One Million Dollars ($1,000,000) as consideration for Besins to acquire the DMF, DMF Proprietary
Information, all samples of API and intermediates, API Information, Medical Advisory Board information, assignment of non-disclosure
agreements and other data, documents, and information referred to in paragraphs 4–6. Besins shall pay the Termination Payment
by the later of seven (7) business days after the Effective Date or five (5) business days after Atossa certifies that it has complied
with its obligations in paragraphs 4–8, including to deliver notice to all third-party recipients of Besins Proprietary Information
of such third-parties’ continuing obligations to protect the confidentiality of such information, as reflected in the Side
Letter. The payment will be made via wire instructions to be provided by Atossa.

 

    8.

     

    

 

b.Reimbursement
of Atossa Out-of-Pocket Expenses. Besins shall also reimburse Atossa for the reasonable, documented, out-of-pocket payments
made by Atossa referred to below in subparagraphs (i) through (iii) by the later of seven (7) business days after the Effective
Date or five (5) business days after Atossa certifies that it has complied with its obligations in paragraphs 4–8, per wire
instructions to be provided by Atossa. The Parties have agreed as of the Effective Date that adequate documentation has been provided
to Besins to substantiate Atossa out-of-pocket expenses in the aggregate total amount of $762,931, as detailed below.

 

i.API Expenses.
Besins shall reimburse Atossa for its reasonable costs and expenses to manufacture API, including payments to CML, consultants
retained to perform services relating to the manufacture of API, and employee expenses relating thereto. Atossa warrants and represents
to Besins that it has presented all documents reflecting such costs and payments, including invoices, to Besins to substantiate
the requested reimbursement amounts of $389,024 in payments to CML and $135,676 in related expenses and payments.

 

ii.DMF Expenses.
Besins also shall reimburse Atossa for its costs and expenses to acquire and have translated the DMF and DMF Proprietary Information
from Inabata. Atossa warrants and represents to Besins that it has presented all documents reflecting such costs and payments,
including invoices, to Besins to substantiate the requested reimbursement amount of $111,000.

 

iii.Medical Advisory
Board Expenses. Besins also shall reimburse Atossa for its reasonable costs and expenses to conduct Medical Advisory Board
meetings in connection with Atossa’s efforts to Develop, obtain Regulatory Approval and to Commercialize Afimoxifene Gel.
Atossa warrants and represents to Besins that it has presented all documents reflecting such costs and payments, including invoices,
to Besins to substantiate the requested reimbursement amount of $127,230.

 

c.Atossa warrants
and represents to Besins that it has paid all costs, expenses, taxes, duties, and charges of any kind whatsoever arising out of
or relating to Medical Advisory Board meetings, consultant fees, and other out-of-pocket expenses for which it seeks reimbursement
from Besins pursuant to this Termination Agreement. Atossa shall indemnify and hold harmless Besins from and against any claims,
demands, or liabilities arising out of Atossa’s conduct of Medical Advisory Board meetings.

 

 d. No Assumption of Liabilities or Obligations.

 

i.Besins and Atossa
agree that Besins is not assuming, through this Termination Agreement or otherwise, any obligations or liabilities of Atossa of
any kind or nature whatsoever and that the only financial obligations undertaken by Besins to or on behalf of Atossa arising out
of this Termination Agreement shall be the Termination Payment set forth in paragraph 7(a) and the reimbursement of Atossa out-of-pocket
expenses set forth in paragraph 7(b).

 

    9.

     

    

 

ii.Subject to the
indemnity provisions in this Termination Agreement, Besins and Atossa agree that Atossa is not assuming and shall not assume, through
this Termination Agreement or otherwise, any obligations or liabilities of Besins of any kind or nature whatsoever arising from
or relating to any acts or omissions by or on behalf of Besins subsequent to the Effective Date.

 

 8. Confidential Information.

 

a.Atossa agrees
that it shall not use Besins’ Confidential Information at any time for any purpose whatsoever after the Effective Date. Atossa
also agrees that any act or omission by Atossa that results in the unauthorized disclosure, loss, or use of Besins’ Confidential
Information, including Atossa’s failure to enforce or comply with a non-disclosure agreement with any third party despite
knowledge of such third-party’s breach of such non-disclosure agreement through the Effective Date, may cause irreparable
harm entitling Besins to seek injunctive relief, in addition to any other remedies available in law or equity.

 

b.Atossa further
agrees to assign to Besins all non-disclosure agreements between Atossa and any third-party that received Besins’ Proprietary
or Confidential Information, pursuant to a separate Assignment Agreement between Atossa and Besins, as attached to the Side Letter.
To the extent any non-disclosure agreements to be assigned by Atossa require consent from third parties for such assignment, Atossa
will request such third parties’ consent within two (2) business days after the Effective Date and will use best efforts
to secure such consent. If any third party does not so consent, Atossa shall continue to be obligated to enforce the terms of such
confidentiality agreements during the term of any such agreement and any material failure to do so despite knowledge of such third
party’s breach will constitute a breach of this Agreement.

 

c.Besins agrees
that it shall not use Atossa’s Confidential Information at any time for any purpose whatsoever after the Effective Date.
Besins also agrees that any act or omission by Besins that results in the unauthorized disclosure, loss or use of Atossa’s
Confidential Information may cause irreparable harm entitling Atossa to seek injunctive relief, in addition to any other remedies
available in law or equity.

 

d.Besins and Atossa
agree that Besins’ Confidential Information includes all information encompassed within the definition of “Confidential
Information” in paragraph 1.19 of the License Agreement, as well as all documents and information reflecting the Parties’
negotiations prior to execution of the License Agreement, including all drafts of the License Agreement, but excluding materials
containing or revealing attorney-client privileged communications or attorney work product; and communications between Atossa and
Besins during the Parties’ performance under the License Agreement, including any Development Plans, also excluding materials
containing or revealing attorney-client privileged communications or attorney work product. Provided, however, that the Parties’
prior disclosure of the substance of the foregoing information pursuant to SEC disclosures shall not constitute a violation of
this paragraph 8. Subject to paragraph 8(d) below, Besins and Atossa further agree that Besins’ Confidential Information
includes all non-public documents reflecting the Parties’ dispute and negotiations relating to and the terms of this Termination
Agreement, excluding materials containing or revealing attorney-client privileged communications or attorney work product. Besins
and Atossa further agree that Besins’ Confidential Information includes Besins’ Proprietary Information, DMF, DMF Proprietary
Information, and API Information.

 

e.The Parties agree
that Atossa may disclose in an SEC regulatory filing a copy of this Termination Agreement and a statement substantially consistent
with the language of Exhibit C in response to analyst or investor questions. To the extent either Party intends to make any public
statement regarding the subject matter of this Termination Agreement, such statement shall be substantially consistent with the
substance of Exhibit C. No statement inconsistent with the substance of Exhibit C shall be made without first obtaining the other
Party’s written consent. The Parties further agree that that the terms and conditions of this Termination Agreement may be
disclosed only: (i) pursuant to a court order; (ii) pursuant to a valid subpoena; (iii) to the Parties’ respective insurers,
legal, tax, accounting, or similar professional advisors; (iv) to bona fide prospective investors and acquirers; (v) upon written
agreement of both Parties to this Settlement Agreement; or (vi) as is necessary to enforce this Termination Agreement. In the event
that either Party receives a court order or valid subpoena in accordance with subparagraphs (i) or (ii), the receiving Party shall
notify the other Party of such receipt so that the other Party can determine whether it will take steps to object to such court
order or subpoena or seek to modify the scope of any request for information. If either Party provides a copy of this Termination
Agreement to a Third Party in accordance with subparagraphs (iii) or (iv), they shall notify each such recipient of the confidentiality
obligations set forth in this Termination Agreement and that such Third Party has no authorization or approval to disclose any
of the terms or conditions of this Termination Agreement to any other person or entity.

 

    10.

     

    

 

f.Atossa warrants
and represents that it did not disclose any Besins’ Confidential Information to any Third Party other than as identified
in the Side Letter, which Third Parties were engaged for the limited purpose of pursuing Atossa’s efforts to Develop, obtain
Regulatory Approval for, or to Commercialize Afimoxifene Gel. Atossa further warrants and represents that it instructed all such
Third Parties at the time of any such disclosure to maintain Besins’ Confidential Information in strict confidence, including
by entering into agreements with such Third Parties containing confidentiality restrictions.  

 

g.In the event
that Atossa believes that any documents or information referred to as Besins’ Confidential Information in this Termination
Agreement do not constitute Confidential Information pursuant to paragraph 6.4 of the License Agreement, Atossa shall advise Besins
in writing on or before the Effective Date of the basis for its contention about each document or piece of information that it
believes does not constitute Besins’ Confidential Information, including which exclusion in paragraph 6.4 it believes applies
and all facts and circumstances which support its position.

 

9.Survival of
License Agreement Terms. Atossa and Besins agree that the following terms of the License Agreement shall survive termination
of the License Agreement: § 3.1, Ownership of Intellectual Property; and Article 6, Confidentiality and Publications. Notwithstanding
that Article 6 will survive termination of the Licensing Agreement, the definition of Confidential Information, which is set forth
in paragraph 6.7 of the Licensing Agreement, shall be modified as set forth in this paragraph 8 and paragraph 6.7 of the License
Agreement is hereby modified so that the Parties’ confidentiality obligations will continue in effect for a period of 15
years after the Effective Date or until such other time as the Parties agree to terminate such obligations. However, Atossa shall
not be liable for confidential disclosure of any Besins trade secrets made in compliance with Defend Trade Secrets Act of 2016.

 

10.No Assignment
by Atossa. Atossa warrants and represents that it has not sublicensed, granted, or otherwise transferred any rights to any
Atossa Affiliate or any Third-Party arising out of or relating to the License Agreement including, but not limited to, Besins Proprietary
Information, DMF, DMF Proprietary Information, or API Information, except for rights granted to CML for purposes of manufacturing
API.

 

    11.

     

    

 

11.Knowledge of
Demands, Claims, or Litigation. Except for the Litigation, Atossa represents that there has been no action, suit, claim, demand,
investigation, arbitration, proceeding, grievance, citation, summons or subpoena served upon it or pending and that it has not
received any notice of any ongoing inquiry, investigation or threat of any nature, civil, criminal, regulatory, or otherwise, in
law or in equity, that relates in any way to the License Agreement or Atossa’s efforts to Develop and/or Commercialize Afimoxifene
Gel.

 

12.Authorized
Corporate Action. Besins and Atossa each acknowledge that the undersigned who enter into this Termination Agreement on their
behalf has the full corporate authority to do so and to bind the signatory Parties and that their execution of this Termination
Agreement will not violate or breach any obligation or restriction to which such Party is legally bound by contract, judicial order
or otherwise.

 

13.Amendments.
No waiver, modification or amendment of any provision of this Termination Agreement shall be valid or effective unless made in
writing referencing this Termination Agreement and signed by a duly authorized officer of both Besins and Atossa. 

 

14.Assignment;
Binding. Neither Party shall have the right to assign, delegate or otherwise transfer any of its rights or obligations under
this Termination Agreement without the prior written consent of the other Party, which consent shall not be unreasonably withheld,
delayed or conditioned; except that prior written consent shall not be required for (i) any transfer, assignment, or delegation
in connection with the sale of substantially all assets, merger, or consolidation of either Party; or (ii) any transfer, assignment,
or delegation of rights by Besins of any rights sold, assigned, transferred, conveyed, or delivered to Besins pursuant to paragraphs
4–6 of this Termination Agreement, excluding Atossa’s Confidential Information, Intellectual Property, or Know-How.
Subject to the foregoing, this Termination Agreement will be binding upon and will insure to the benefit of Besins and Atossa and
their respective successors and permitted assigns.

 

15.Construction.
This Termination Agreement has been negotiated by the Parties and their respective counsel and will be interpreted fairly in accordance
with its terms and without any strict construction in favor of or against either Party.

 

16.Counterparts.
This Termination Agreement may be executed including, without limitation, by electronic or PDF signature, in one or more counterparts,
each of which be deemed an original instruction and all of which will constitute one and the same agreement.

 

17.Governing Law.
This Termination Agreement will be interpreted, enforced and governed in all respects by the laws of the Commonwealth of Virginia,
including the Parties’ adherence to and performance of the terms of this Termination Agreement. The Parties agree that any
dispute arising out of this Termination Agreement shall be resolved exclusively in the state or federal courts of the Commonwealth
of Virginia. The Parties hereby irrevocably consent, and waive any objections, to the exclusive jurisdiction of such courts for
all purposes relating to this Termination Agreement.

 

18.Notices.
Any consent or notice required or permitted to be given or made under this Termination Agreement by one of the Parties to the other
shall be in writing and addressed to the other Party at its address indicated below and shall be considered effective and/or received:

 

a.Upon the date
of receipt by the address if hand-delivered;

 

b.If sent via electronic
mail, upon the date a personalized electronic mail confirmation or acknowledgement of receipt is sent;

 

c.Upon the date
delivered by the U.S. Postal Service via registered or certified mail, or by reputable courier service, in each case as indicated
with a written confirmation or acknowledgement of receipt.

 

    12.

     

    

 

	
        If to Besins:

        Leslie Grunfeld, CEO

        Besins Healthcare Holding
        Ltd.

        A Gildo Pastor Center

        7 rue du Gabian,

        98000 Monaco

        lgrunfeld@besins-healthcare.com

         

        With a copy to:

        Francois Brault, Head
        of Legal Affairs

        fbrault@besins-healthcare.com 
	
        If to Atossa:

        Steven C. Quay, President
        and CEO

        Atossa Genetics, Inc.

        2300 Eastlake Avenue,
        E.

        Suite 200

        Seattle, Washington 98102
        USA

 

19.Severability.
In the event that any provision of this Termination Agreement is determined for any reason to be invalid or unenforceable by a
court of competent jurisdiction, the remainder of the Agreement will remain in full force and effect without that provision. In
such event, the Parties will negotiate in good faith a substitute clause for any provision declared invalid or unenforceable, which
will most nearly approximate the intent of the Parties.

 

20.Waiver.
The waiver of or failure to enforce by any one Party any breach of any term, covenant or condition contained in this Termination
Agreement will not be construed or deemed to be a waiver of any subsequent or similar breach of the same or any similar term, covenant,
representation, warranty or condition; nor will any delay or omission on the part of either Party to exercise or avail itself of
any remedy or right that it has or may have hereunder operate as a waiver of any right or remedy.

 

IN WITNESS
WHEREOF, the undersigned, intending for their respective companies to be legally bound by their signature, have duly executed this
Termination Agreement as of the Effective Date.

 

	BESINS HEALTHCARE LUXEMBOURG 	 	ATOSSA GENETICS, INC.
	SARL	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	By: 	/s/ Leslie Grunfeld	 	By: 	/s/ Kyle Guse
	 	Leslie Grunfeld, CEO	 	 	Kyle Guse, CFO and General Counsel
	 	 	 	 	 
	Date:  	August 4, 2016	 	Date:  	August 4, 2016

 

    13.

     

    

 

EXHIBIT A

 

Certification
of Compliance

 

__________________,
in his/her capacity as ________________ of Atossa Genetics, Inc., (“Atossa”), pursuant to that certain Termination
Agreement dated as of August __, 2016 (the “Termination Agreement”) by and between Atossa and Besins Healthcare Luxembourg,
SARL and its Affiliates (“Besins”), is authorized to certify and does hereby certify to Besins on behalf of Atossa,
on information and belief after due inquiry, that Atossa has fully complied with and performed its obligations under paragraphs
4–8 of the Termination Agreement.

 

IN WITNESS WHEREOF,
the undersigned has caused this Certification to be executed as of this ___ day of August, 2016.

 

	 	By:  	 
	 	Name:   	 
	 	Title:  	 

  

     

     

    

 

EXHIBIT B

 

[July 2015 Agreement
for Transfer of Drug Master File]

 

     

     

    

 

EXHIBIT C

 

Public Disclosure

 

Atossa Genetics (“Atossa”)
and Besins Healthcare Luxembourg SARL (“Besins”) have agreed, pursuant to a Termination Agreement dated August 4, 2016,
to terminate their Intellectual Property License Agreement dated May 14, 2015 (the “License Agreement”), dismiss the
legal action relating to the License Agreement pending in the United States District Court for the District of Delaware captioned
Atossa Genetics Inc. v. Besins Healthcare Luxembourg SARL, Case No. 1:16-cv-00045-UNA (the “Litigation”), and
settle all claims and counterclaims asserted in the Litigation. Atossa and Besins have further agreed, pursuant to and as set forth
in the Termination Agreement, that Besins will assume, and Atossa shall have no further rights to, all clinical, regulatory, manufacturing,
and all other development and commercialization of 4-hydroxy tamoxifen and Afimoxifene Topical Gel (the “AfTG Program”).
In consideration for Atossa’s comprehensive relinquishment of all rights granted in the License Agreement, termination of
the License Agreement, cessation of all efforts to develop Afimoxifene Gel, delivery of all API manufactured to date, assignment
of a Drug Master File, delivery to Besins of the work product Atossa has completed to date, and other consideration, Besins will
reimburse Atossa for out-of-pocket expenses incurred by Atossa to pursue the AfTG Program and will make a termination payment in
the total amount of $1,762,931.EXHIBIT 10.2

 

FOURTH AMENDED AND RESTATED

EMERGENT BIOSOLUTIONS INC. 2006 STOCK INCENTIVE PLAN

 

	
1.

	
Purpose

The purpose of this Fourth Amended and Restated 2006 Stock Incentive Plan (the "Plan") of Emergent BioSolutions Inc., a Delaware corporation (the "Company"), is to advance the interests of the Company's stockholders by enhancing the Company's ability to attract, retain and motivate persons who are expected to make important contributions to the Company and by providing such persons with equity ownership opportunities and performance-based incentives that are intended to align their interests with those of the Company's stockholders. The Plan amends and restates the 2006 Stock Incentive Plan (the "Original Plan") that was originally adopted by the board of directors of the Company (the "Board") on October 25, 2006 and approved by the stockholders on October 27, 2006, was amended by the Board on March 31, 2009 and approved by the stockholders on May 21, 2009, was amended by the Board on March 6, 2012 and approved by the stockholders on May 17, 2012, was amended by the Board on March 20, 2014 and approved by the stockholders on May 22, 2014 and was amended by the Board on March 24, 2016 and approved by our stockholders on May 19, 2016. Except where the context otherwise requires, the term "Company" shall include any of the Company's present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder (the "Code") and any other business venture (including, without limitation, joint venture or limited liability company) in which the Company has a controlling interest, as determined by the Board.

 

	
2.

	
Eligibility

All of the Company's employees, officers, directors, consultants and advisors to the Company (as such terms consultants and advisors are defined and interpreted for purposes of Form S-8 under the Securities Act of 1933, as amended (the "Securities Act"), or any successor form) are eligible to receive options, stock appreciation rights, restricted stock, restricted stock units and other stock-unit awards (each, an "Award") under the Plan. Each person who receives an Award under the Plan is deemed a "Participant".

 

	
3.

	
Administration and Delegation

(a) Administration by Board of Directors.    The Plan will be administered by the Board. The Board shall have authority to grant Awards and to adopt, amend and repeal such administrative rules, guidelines and practices relating to the Plan as it shall deem advisable. The Board may construe and interpret the terms of the Plan and any Award agreements entered into under the Plan. The Board may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem expedient to carry the Plan into effect and it shall be the sole and final judge of such expediency. All decisions by the Board shall be made in the Board's sole discretion and shall be final and binding on all persons having or claiming any interest in the Plan or in any Award. No director or person acting pursuant to the authority delegated by the Board shall be liable for any action or determination relating to or under the Plan made in good faith.

(b) Appointment of Committees.    To the extent permitted by applicable law, the Board may delegate any or all of its powers under the Plan to one or more committees or subcommittees of the Board (a "Committee"). All references in the Plan to the "Board" shall mean the Board or a Committee of the Board or the officers referred to in Section 3(c) to the extent that the Board's powers or authority under the Plan have been delegated to such Committee or officers.

(c) Delegation to Officers.     Subject to any requirements of applicable law (including as applicable Sections 152 and 157(c) of the General Corporation Law of the State of Delaware), the Board may delegate to one or more officers of the Company the power to grant Awards (subject to any limitations under the Plan) to employees or officers of the Company and to exercise such other powers under the Plan as the Board may determine, provided that the Board shall fix the terms of Awards to be granted by such officers, the maximum number of shares subject to Awards that the officers may grant, and the time period in which such Awards may be granted; and provided further, that no officer shall be authorized to grant Awards to any "executive officer" of the Company (as defined by Rule 3b-7 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) or to any "officer" of the Company (as defined by Rule 16a-1(f) under the Exchange Act).

(d) Awards to Non-Employee Directors.    Awards made to non-employee directors will be granted and administered by a Committee, all of the members of which are independent directors as defined by Section 303A.02 of the New York Stock Exchange Listed Company Manual.

 

	
4.

	
Stock Available for Awards.

(a) Maximum Number of Shares.    An aggregate of 3,750,000 shares of common stock, $0.001 par value per share, of the Company (the "Common Stock") shall be added to the 15,178,826 shares issuable or transferable under the Plan as of March 23, 2016 for a total of 18,928,826 shares.

If any Award expires or is terminated, surrendered or canceled without having been fully exercised or is forfeited in whole or in part (including as the result of shares of Common Stock subject to such Award being repurchased by the Company at the original issuance price pursuant to a contractual repurchase right), is settled in cash, or results in any shares of Common Stock not being issued, the unused shares of Common Stock covered by such Award shall again be available for the grant of Awards under the Plan. Shares of Common Stock delivered (either by actual delivery, attestation or net exercise) to the Company by a Participant to (i) purchase shares of Common Stock upon the exercise of an Award or (ii) satisfy tax withholding obligations with respect to Options and Stock Appreciation Rights (including shares retained from the Option or Stock Appreciation Right creating the tax obligation) shall not be added back to the number of shares available for future grant of Awards (for the avoidance of doubt, shares of Common Stock delivered to the Company by a Participant to satisfy tax withholding obligations with respect to Restricted Stock, Restricted Stock Units and Other Stock Unit Awards (including shares retained from the Restricted Stock, Restricted Stock Unit or Other Stock Unit Award creating the tax obligation) shall be added back to the number of shares available for future grant of Awards).  However, in the case of Incentive Stock Options (as hereinafter defined), the foregoing provisions shall be subject to any limitations under the Code. Shares of Common Stock issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares. Notwithstanding anything to the contrary herein, with respect to Stock Appreciation Rights settled in shares of Common Stock upon exercise, the aggregate number of shares of Common Stock with respect to which the Stock Appreciation Right is exercised, rather than the number of shares of Common Stock actually issued upon exercise, shall be counted against the number of shares of Common Stock available for Awards under the Plan. In no event shall shares of Common Stock repurchased by the Company on the open market using the proceeds from the exercise of an Award increase the number of shares available for future grant of Awards.

(b) Computing the Total Number of Shares of Common Stock Available Under the Plan.    For purposes of computing the maximum aggregate number of shares of Common Stock available for issuance under the Plan, the following rules shall apply:

(i) Any shares of Common Stock made subject to Awards of Options or Stock Appreciation Rights shall be counted against the maximum aggregate number of shares of Common Stock available for issuance under the Plan as one (1) share of Common Stock for every one (1) share of Common Stock granted.

(ii) Any shares of Common Stock made subject to Awards of Options or Stock Appreciation Rights which shares are returned to the Plan pursuant to Section 4(a) shall be retuned as one (1) share of Common Stock for every one (1) share of Common Stock granted.

(iii) Any shares of Common Stock made subject to a Full-Value Award (as defined below): (A) granted prior to May 21, 2009, shall be counted against the maximum aggregate number of shares of Common Stock available for issuance under the Plan as one (1) share of Common Stock for every one (1) share of Common Stock granted; (B) granted on or after May 21, 2009 but prior to May 17, 2012, shall be counted against the maximum aggregate number of shares of Common Stock available for issuance under the Plan as 1.5 shares of Common Stock for every one (1) share of Common Stock granted; (C) granted on or after May 17, 2012 but prior to May 22, 2014, shall be counted against the maximum aggregate number of shares of Common Stock available for issuance under the Plan as 1.86 shares of Common Stock for every one (1) share of Common Stock granted; and (D) granted on or after May 22, 2014, shall be counted against the maximum aggregate number of shares of Common Stock available for issuance under the Plan as 2.3 shares of Common Stock for every one (1) share of Common Stock granted. A "Full-Value Award" is an Award of Restricted Stock, a Restricted Stock Unit Award, an Other Stock Unit Award or a Performance Award.

(iv) Any shares of Common Stock made subject to a Full-Value Award which shares are returned to the Plan pursuant to Section 4(a): (A) shall be returned as one (1) share of Common Stock for every one (1) share of Common Stock granted prior to May 21, 2009; (B) shall be returned as 1.5 shares of Common Stock for every one (1) share of Common Stock granted on or subsequent to May 21, 2009 and prior to May 17, 2012; (C) shall be returned as 1.86 shares of Common Stock for every one (1) share of Common Stock granted on or subsequent to May 17, 2012 and prior to May 22, 2014. Beginning on May 22, 2014, any shares of Common Stock subject to a Full-Value Award that are returned to the Plan will be returned as 2.3 shares of Common Stock for every one (1) share of Common Stock subject to such Award, regardless of when the Award was granted.

(c) Sublimits.

(i) Section 162(m) Per Participant Limit.  The maximum number of shares of Common Stock with respect to which Awards may be granted to any Participant under the Plan shall be 1,000,000 per calendar year. For purposes of the foregoing limit, the combination of an Option in tandem with a SAR (as each is hereafter defined) shall be treated as a single Award. The per Participant limit described in this Section 4(c) shall be construed and applied consistently with Section 162(m) of the Code or any successor provision thereto, and the regulations thereunder ("Section 162(m)"). For the avoidance of doubt, all shares of Common Stock underlying Awards granted under the Plan shall be counted on a one-for-one basis for purposes of the sublimit set forth in this section.

(ii) Limit Applicable to Non-Employee Directors. In any calendar year, the sum of cash compensation paid to any non-employee director for service as a director and the value of Awards under the Plan made to such non-employee director (calculated based on the grant date fair value of such Awards for financial reporting purposes) shall not exceed $1,000,000.

(d) Substitute Awards.    In connection with a merger or consolidation of an entity with the Company or the acquisition by the Company of property or stock of an entity, the Board may grant Awards in substitution for any options or other stock or stock unit awards granted by such entity or an affiliate thereof. Substitute Awards may be granted on such terms as the Board deems appropriate in the circumstances, notwithstanding any limitations on Awards contained in the Plan. Substitute Awards shall not count against the overall share limit set forth in Section 4(a), except as may be required by reason of Section 422 and related provisions of the Code.

 

	
5.

	
Stock Options

(a) General.    The Board may grant options to purchase Common Stock (each, an "Option") and determine the number of shares of Common Stock to be covered by each Option, the exercise price of each Option and the conditions and limitations applicable to the exercise of each Option, including conditions relating to applicable federal or state securities laws, as it considers necessary or advisable. An Option that is not intended to be an Incentive Stock Option (as hereinafter defined) shall be designated a "Nonstatutory Stock Option".

(b) Incentive Stock Options.    An Option that the Board intends to be an "incentive stock option" as defined in Section 422 of the Code (an "Incentive Stock Option") shall only be granted to employees of Emergent BioSolutions Inc., any of Emergent BioSolutions Inc.'s present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Code, and any other entities the employees of which are eligible to receive Incentive Stock Options under the Code, and shall be subject to and shall be construed consistently with the requirements of Section 422 of the Code. The Company shall have no liability to a Participant, or any other party, if an Option (or any part thereof) that is intended to be an Incentive Stock Option is not an Incentive Stock Option or for any action taken by the Board, including without limitation the conversion of an Incentive Stock Option to a Nonstatutory Stock Option.

(c) Exercise Price.    The Board shall establish the exercise price of each Option and specify such exercise price in the applicable option agreement; provided, however, that the exercise price shall not be less than 100% of the Fair Market Value (as defined below) on the date the Option is granted.

(d) Duration and Vesting of Options.    Each Option shall be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable option agreement subject to the limitations of the Plan; provided, however, that no Option granted before March 6, 2012 will be granted for a term in excess of 10 years and no Option granted on or after March 6, 2012 will be granted for a term in excess of 7 years. Options granted to Participants other than non-employee directors that vest solely based on the passage of time shall not vest (i) prior to the first anniversary of the date of grant; (ii) as to more than one-third of the Award prior to the second anniversary of the date of grant; and (iii) as to more than two-thirds of the Award prior to the third anniversary of the date of grant. Options to non-employee directors that vest solely based on the passage of time shall not vest: (i) prior to the earlier of the first anniversary of the date of grant and the date of the first annual meeting held after the date of grant; (ii) as to more than one-third of the Award prior to the earlier of the second anniversary of the date of grant and the date of the second annual meeting held after the date of grant; and (iii) as to more than two-thirds of the Award prior to the earlier of the third anniversary of the date of grant and the date of the third annual meeting held after the date of grant. Notwithstanding the foregoing, the Board or the Committee, either at the time the Option is granted or at any time thereafter, may allow an Option to accelerate and become vested, in whole or in part, prior to the vesting date specified above, in the event of the death or disability of the Participant.Options that do not vest solely based on the passage of time shall not vest prior to the first anniversary of the date of grant (or, in the case of Awards to non-employee directors, the earlier of the first anniversary of the date of grant and the date of the first annual meeting held after the date of grant).   The foregoing minimum vesting requirements shall not apply to Awards granted, in the aggregate, for up to 5% of the authorized number of shares specified in Section 4(a).  For the avoidance of doubt, all shares of Common Stock underlying Awards granted under the Plan shall be counted on a one-for-one basis for purposes of the minimum vesting provision set forth in this section.  The six foregoing sentences shall apply to Options granted on or after May 19, 2016.

(e) Exercise of Option.    Options may be exercised by delivery to the Company of a written notice of exercise signed by the proper person or by any other form of notice (including electronic notice) approved by the Board together with payment in full as specified in Section 5(f) for the number of shares for which the Option is exercised. Subject to Section 10(e), shares of Common Stock subject to the Option will be delivered by the Company following exercise either as soon as practicable.

(f) Payment Upon Exercise.    Common Stock purchased upon the exercise of an Option granted under the Plan shall be paid for as follows:

(i) in cash or by check, payable to the order of the Company;

(ii) except as otherwise provided in the applicable option agreement, by (i) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price and any required tax withholding or (ii) delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price and any required tax withholding; (iii) to the extent provided for in the applicable option agreement or approved by the Board, in its sole discretion, by delivery (either by actual delivery or attestation) of shares of Common Stock owned by the Participant valued at their fair market value as determined by (or in a manner approved by) the Board ("Fair Market Value"), provided (i) such method of payment is then permitted under applicable law, (ii) such Common Stock, if acquired directly from the Company, was owned by the Participant for such minimum period of time, if any, as may be established by the Board in its discretion and (iii) such Common Stock is not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements;

(iv) to the extent permitted by applicable law and provided for in the applicable option agreement or approved by the Board, in its sole discretion, by (i) delivery of a promissory note of the Participant to the Company on terms determined by the Board, or (ii) payment of such other lawful consideration as the Board may determine; or

(v) by any combination of the above permitted forms of payment.

(g) Limitation on Repricing.    Unless such action is approved by the Company's stockholders or is pursuant to Section 9 of the Plan: (i) outstanding Options granted under the Plan may not be amended to provide an exercise price per share that is lower than the then-current exercise price per share of such outstanding Option, (ii) the Board may also not cancel any outstanding option (whether or not granted under the Plan) and grant in substitution therefor new Awards under the Plan covering the same or a different number of shares of Common Stock and having an exercise price per share lower than the then-current exercise price per share of the cancelled option, (iii) the Board may not cancel in exchange for a cash payment any outstanding Option with an exercise price per share above the then-current Fair Market Value or (iv) the Board may not take any other action under the Plan that constitutes a "repricing" under the rules of the New York Stock Exchange ("NYSE").

 

	
6.

	
Stock Appreciation Rights

(a) General.    A Stock Appreciation Right, or SAR, is an Award entitling the holder, upon exercise, to receive an amount of Common Stock determined by reference to appreciation, from and after the date of grant, in the fair market value of a share of Common Stock. The date as of which such appreciation or other measure is determined shall be the exercise date.

(b) Grants.    Stock Appreciation Rights may be granted in tandem with, or independently of, Options granted under the Plan.

(i) Tandem Awards.    When Stock Appreciation Rights are expressly granted in tandem with Options, (i) the Stock Appreciation Right will be exercisable only at such time or times, and to the extent, that the related Option is exercisable (except to the extent designated by the Board in connection with a Reorganization Event or a Change in Control Event) and will be exercisable in accordance with the procedure required for exercise of the related Option; (ii) the Stock Appreciation Right will terminate and no longer be exercisable upon the termination or exercise of the related Option, except to the extent designated by the Board in connection with a Reorganization Event or a Change in Control Event and except that a Stock Appreciation Right granted with respect to less than the full number of shares covered by an Option will not be reduced until the number of shares as to which the related Option has been exercised or has terminated exceeds the number of shares not covered by the Stock Appreciation Right; (iii) the Option will terminate and no longer be exercisable upon the exercise of the related Stock Appreciation Right; and (iv) the Stock Appreciation Right will be transferable only with the related Option. No tandem SAR may have a base amount that is less than 100% of the fair market value of a share of Common Stock on the date of grant. No tandem SAR granted prior to March 6, 2012 may have a term of more than ten (10) years from the date of grant and no tandem SAR granted on or after March 6, 2012 may have a term of more than seven (7) years from the date of grant.

(ii) Independent SARs.    A Stock Appreciation Right not expressly granted in tandem with an Option will become exercisable at such time or times, and on such conditions, as the Board may specify in the SAR Award; provided, however, that the base amount specified on the date of grant to calculate appreciation shall be no less than 100% of the fair market value of a share of Common Stock on the date of grant and the maximum term of any Stock Appreciation Right shall (i) with respect to Stock Appreciation Rights granted prior to March 6, 2012, be no more than ten (10) years from the date of grant and (ii) with respect to Stock Appreciation Rights granted on or after March 6, 2012 be no more than seven (7) years from the date of grant.

(c) Exercise.    Stock Appreciation Rights may be exercised by delivery to the Company of a written notice of exercise signed by the proper person or by any other form of notice (including electronic notice) approved by the Board, together with any other documents required by the Board.

(d) Vesting.    Stock Appreciation Rights granted to Participants other than non-employee directors that vest solely based on the passage of time shall not vest (i) prior to the first anniversary of the date of grant; (ii) as to more than one-third of the Award prior to the second anniversary of the date of grant; and (iii) as to more than two-thirds of the Award prior to the third anniversary of the date of grant. Stock Appreciation Rights granted to non-employee directors that vest solely based on the passage of time shall not vest: (i) prior to the earlier of the first anniversary of the date of grant and the date of the first annual meeting held after the date of grant; (ii) as to more than one-third of the Award prior to the earlier of the second anniversary of the date of grant and the date of the second annual meeting held after the date of grant; and (iii) as to more than two-thirds of the Award prior to the earlier of the third anniversary of the date of grant and the date of the third annual meeting held after the date of grant. Notwithstanding the foregoing, the Board or the Committee, either at the time the Stock Appreciation Right is granted or at any time thereafter, may allow an Stock Appreciation Right to accelerate and become vested, in whole or in part, prior to the vesting date specified above, in the event of the death or disability of the Participant.  Stock Appreciation Rights that do not vest solely based on the passage of time shall not vest prior to the first anniversary of the date of grant (or, in the case of Awards to non-employee directors, the earlier of the first anniversary of the date of grant and the date of the first annual meeting held after the date of grant). The foregoing minimum vesting requirements shall not apply to Awards granted, in the aggregate, for up to 5% of the authorized number of shares specified in Section 4(a).  For the avoidance of doubt, all shares of Common Stock underlying Awards granted under the Plan shall be counted on a one-for-one basis for purposes of the minimum vesting provision set forth in this section.  The six foregoing sentences shall only apply to Stock Appreciation Rights granted on or after May 19, 2016.

(e) Limitation on Repricing.    Unless such action is approved by the Company's stockholders or is pursuant to Section 9 of the Plan: (i) outstanding Stock Appreciation Rights granted under the Plan may not be amended to provide a base price per share that is lower than the then-current base price per share of such outstanding Stock Appreciation Right, (ii) the Board may also not cancel any outstanding stock appreciation right (whether or not granted under the Plan) and grant in substitution therefor new Awards under the Plan covering the same or a different number of shares of Common Stock and having a base price per share lower than the then-current base price per share of the cancelled stock appreciation right, (iii) the Board may not cancel in exchange for a cash payment any outstanding Stock Appreciation Right with a base price per share above the then-current Fair Market Value or (iv) the Board may not take any other action under the Plan that constitutes a "repricing" under the rules of the NYSE.

 

	
7.

	
Restricted Stock; Restricted Stock Units

(a) General.    The Board may grant Awards entitling recipients to acquire shares of Common Stock ("Restricted Stock"), subject to the right of the Company to repurchase all or part of such shares at their issue price or other stated or formula price from the recipient in the event that conditions specified by the Board in the applicable Award are not satisfied prior to the end of the applicable restriction period or periods established by the Board for such Award. Instead of granting Awards for Restricted Stock, the Board may grant Awards entitling the recipient to receive shares of Common Stock to be delivered at the time such shares of Common Stock vest ("Restricted Stock Units") (Restricted Stock and Restricted Stock Units are each referred to herein as a "Restricted Stock Award").

 

(b) Terms and Conditions for all Restricted Stock Awards.    The Board shall determine the terms and conditions of a Restricted Stock Award, including the conditions for vesting and repurchase (or forfeiture) and the issue price, provided that for Restricted Stock Awards granted on or after May 19, 2016, the following minimum vesting provisions shall apply. Restricted Stock Awards granted to Participants other than non-employee directors that vest solely based on the passage of time shall not vest: (i) prior to the first anniversary of the date of grant; (ii) as to more than one-third of the Award prior to the second anniversary of the date of grant; and (iii) as to more than two-thirds of the Award prior to the third anniversary of the date of grant. Restricted Stock Awards granted to non-employee directors that vest solely based on the passage of time shall not vest: (i) prior to the earlier of the first anniversary of the date of grant and the date of the first annual meeting held after the date of grant; (ii) as to more than one-third of the Award prior to the earlier of the second anniversary of the date of grant and the date of the second annual meeting held after the date of grant; and (iii) as to more than two-thirds of the Award prior to the earlier of the third anniversary of the date of grant and the date of the third annual meeting held after the date of grant. Restricted Stock Awards that do not vest solely based on the passage of time (excluding Performance Awards granted pursuant to Section 10(i)) shall not vest prior to the first anniversary of the date of grant (or, in the case of Awards to non-employee directors, the earlier of the first anniversary of the date of grant and date of the first annual meeting held after the date of grant).

Notwithstanding any other provision of the Plan (other than Section 10(i), if applicable), the Board or Committee may, either at the time a Restricted Stock Award is made or at any time thereafter, waive any right to repurchase shares of Common Stock (or waive the forfeiture thereof) or remove or modify the restrictions applicable to the Restricted Stock Award, in whole or in part, in the event of the death or disability of the Participant.  The foregoing minimum vesting requirements shall not apply to Awards granted, in the aggregate, for up to 5% of the authorized number of shares specified in Section 4(a).  For the avoidance of doubt, all shares of Common Stock underlying Awards granted under the Plan shall be counted on a one-for-one basis for purposes of the minimum vesting provisions set forth in this section.

(c) Additional Provisions Relating to Restricted Stock

(i) Dividends.    Unless otherwise provided in the applicable Award agreement, any dividends (whether paid in cash, stock or property) declared and paid by the Company with respect to shares of Restricted Stock ("Unvested Dividends") shall be paid to the Participant only if and when such shares become free from the restrictions on transferability and forfeitability that apply to such shares. Each payment of Unvested Dividends will be made no later than the end of the calendar year in which the dividends are paid to stockholders of that class of stock or, if later, the 15th day of the third month following the lapsing of the restrictions on transferability and the forfeitability provisions applicable to the shares of Restricted Stock.

(ii) Stock Certificates.    The Company may require that any stock certificates issued in respect of shares of Restricted Stock shall be deposited in escrow by the Participant, together with a stock power endorsed in blank, with the Company (or its designee). At the expiration of the applicable restriction periods, the Company (or such designee) shall deliver the certificates no longer subject to such restrictions to the Participant or if the Participant has died, to the beneficiary designated, in a manner determined by the Board, by a Participant to receive amounts due or exercise rights of the Participant in the event of the Participant's death (the "Designated Beneficiary"). In the absence of an effective designation by a Participant, "Designated Beneficiary" shall mean the Participant's estate.

(d) Additional Provisions Relating to Restricted Stock Units

(i) Settlement.    Upon the vesting of and/or lapsing of any other restrictions (i.e., settlement) with respect to each Restricted Stock Unit, the Participant shall be entitled to receive from the Company such number of shares of Common Stock or an amount of cash equal to the Fair Market Value of such number of shares of Common Stock, as provided in the applicable Award agreement. The Board may, in its discretion, provide that settlement of Restricted Stock Units shall be deferred, on a mandatory basis or at the election of the Participant.

 

(ii) Voting Rights.    A Participant shall have no voting rights with respect to any Restricted Stock Units.

(iii) Dividend Equivalents.    To the extent provided by the Board, in its sole discretion, a grant of Restricted Stock Units may provide Participants with the right to receive an amount equal to any dividends or other distributions declared and paid on an equal number of outstanding shares of Common Stock ("Dividend Equivalents"). Dividend Equivalents   may be settled in cash and/or shares of Common Stock and shall be subject to the same restrictions on transfer and forfeitability as the Restricted Stock Units with respect to which paid, as determined by the Board in its sole discretion, subject in each case to such terms and conditions as the Board shall establish, in each case to be set forth in the applicable Award agreement.

 

	
8.

	
Other Stock-Unit Awards

Other Awards of shares of Common Stock, and other Awards that are valued in whole or in part by reference to, or are otherwise based on, shares of Common Stock or other property, may be granted hereunder to Participants ("Other Stock Unit Awards"), including without limitation Awards entitling recipients to receive shares of Common Stock to be delivered in the future. Such Other Stock Unit Awards shall also be available as a form of payment in the settlement of other Awards granted under the Plan or as payment in lieu of compensation to which a Participant is otherwise entitled. Other Stock Unit Awards may be paid in shares of Common Stock or cash, as the Board shall determine. Subject to the provisions of the Plan, the Board shall determine the terms and conditions of each Other Stock Unit Award, including any purchase price applicable thereto, provided that for Other Stock Unit Awards granted on or after May 19, 2016 the following minimum vesting provisions shall apply.

Other Stock Unit Awards granted to Participants other than non-employee directors that vest solely based on the passage of time shall not vest: (i) prior to the first anniversary of the date of grant; (ii) as to more than one-third of the Award prior to the second anniversary of the date of grant; and (iii) as to more than two-thirds of the Award prior to the third anniversary of the date of grant. Other Stock Unit Awards granted to non-employee directors that vest solely based on the passage of time shall not vest: (i) prior to the earlier of the first anniversary of the date of grant and the date of the first annual meeting held after the date of grant; (ii) as to more than one-third of the Award prior to the earlier of the second anniversary of the date of grant and the date of the second annual meeting held after the date of grant; and (iii) as to more than two-thirds of the Award prior to the earlier of the third anniversary of the date of grant and the date of the third annual meeting held after the date of grant. Other Stock Unit Awards that do not vest solely based on the passage of time (excluding Performance Awards granted pursuant to Section 10(i)) shall not vest prior to the first anniversary of the date of grant (or, in the case of Awards to non-employee directors, the earlier of the first anniversary of the date of grant and date of the first annual meeting held after the date of grant).

Notwithstanding any other provision of the Plan (other than Section 10(i), if applicable), the Board or Committee may, either at the time a Stock Unit Award is made or at any time thereafter, waive any right to repurchase shares of Common Stock (or waive the forfeiture thereof) or remove or modify the restrictions applicable to the Stock Unit Award, in whole or in part, in the event of the death or disability of the Participant.  The foregoing minimum vesting requirements shall not apply to Awards granted, in the aggregate, for up to 5% of the authorized number of shares specified in Section 4(a)(1).  For the avoidance of doubt, all shares of Common Stock underlying Awards granted under the Plan shall be counted on a one-for-one basis for purposes of the minimum vesting provisions set forth in this section.

 

	
9.

	
Adjustments for Changes in Common Stock and Certain Other Events

(a) Changes in Capitalization. In the event of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event, or any dividend or distribution to holders of Common Stock other than an ordinary cash dividend, (i) the number and class of securities available under this Plan, (ii) the limits set forth in Section 4(c), (iii) the share- and per-share provisions and the exercise price of each SAR, (iv) the number of shares subject to and the repurchase price per share subject to each outstanding Restricted Stock Award, and (v) the share- and per-share-related provisions and the purchase price, if any, of each outstanding Other Stock Unit Award, shall be appropriately adjusted by the Company (or substituted Awards may be made, if applicable) to the extent determined by the Board. Without limiting the generality of the foregoing, in the event the Company effects a split of the Common Stock by means of a stock dividend and the exercise price of and the number of shares subject to any outstanding Options are adjusted as of the date of the distribution of the dividend (rather than as of the record date for such dividend), then optionees who exercise such Options between the record date and the distribution date for such stock dividend shall be entitled to receive, on the distribution date, the stock dividend with respect to the shares of Common Stock acquired upon such Option exercise, notwithstanding the fact that such shares were not outstanding as of the close of business on the record date for such stock dividend.

(b) Reorganization and Change in Control Events

(i) Definitions

(A) A "Reorganization Event" shall mean:

(1) any merger or consolidation of the Company with or into another entity as a result of which all of the Common Stock of the Company is converted into or exchanged for the right to receive cash, securities or other property or is cancelled;

(2) any exchange of all of the Common Stock of the Company for cash, securities or other property pursuant to a share exchange transaction; or

(3) any liquidation or dissolution of the Company.

(B) A "Change in Control Event" shall mean:

(1) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d 3 promulgated under the Exchange Act) 50% or more of either (x) the aggregate number of shares of Common Stock then-outstanding (the "Outstanding Company Common Stock") or (y) the combined voting power of the then-outstanding securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (1), the following acquisitions shall not constitute a Change in Control Event: (A) any acquisition directly from the Company (excluding an acquisition pursuant to the exercise, conversion or exchange of any security exercisable for, convertible into or exchangeable for common stock or voting securities of the Company, unless the Person exercising, converting or exchanging such security acquired such security directly from the Company or an underwriter or agent of the Company), (B) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (C) any acquisition by any corporation pursuant to a Business Combination (as defined below) which complies with clauses (x) and (y) of subsection (3) of this definition; or

(2) such time as the Continuing Directors (as defined below) do not constitute a majority of the Board (or, if applicable, the Board of Directors of a successor corporation to the Company), where the term "Continuing Director" means at any date a member of the Board (x) who was a member of the Board on the date of the initial adoption of this Plan by the Board or (y) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; provided, however, that there shall be excluded from this clause (y) any individual whose initial assumption of office occurred as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents, by or on behalf of a person other than the Board; or (3) the consummation of a merger, consolidation, reorganization, recapitalization or share exchange involving the Company or a sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (x) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns the Company or substantially all of the Company's assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the "Acquiring Corporation") in substantially the same proportions as their ownership of the Outstanding Company Common Stock and Outstanding Company Voting Securities, respectively, immediately prior to such Business Combination and (y) no Person (excluding any employee benefit plan (or related trust) maintained or sponsored by the Company or by the Acquiring Corporation) beneficially owns, directly or indirectly, 50% or more of the then-outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors (except to the extent that such ownership existed prior to the Business Combination); or

(3) the liquidation or dissolution of the Company.

(C) "Good Reason" shall mean any significant diminution in the Participant's title, authority, or responsibilities from and after such Reorganization Event or Change in Control Event, as the case may be, or any reduction in the annual cash compensation payable to the Participant from and after such Reorganization Event or Change in Control Event, as the case may be, or the relocation of the place of business at which the Participant is principally located to a location that is greater than 50 miles from its location immediately prior to such Reorganization Event or Change in Control Event.

(D) "Cause" shall mean any (i) willful failure by the Participant, which failure is not cured within 30 days of written notice to the Participant from the Company, to perform his or her material responsibilities to the Company, (ii) willful misconduct by the Participant which affects the business reputation of the Company, (iii) material breach by the Participant of any employment, consulting, confidentiality, non-competition or non-solicitation agreement with the Company, (iv) conviction or plea of nolo contendere (no contest) by the Participant to a felony, or (v) commission by the Participant of any act involving fraud, theft or dishonesty with respect to the Company's business or affairs. The Participant shall be considered to have been discharged for "Cause" if the Company determines, within 30 days after the Participant's resignation, that discharge for Cause was warranted.

(ii) Effect on Options

(A) Reorganization Event. Upon the occurrence of a Reorganization Event (regardless of whether such event also constitutes a Change in Control Event), or the execution by the Company of any agreement with respect to a Reorganization Event (regardless of whether such event will result in a Change in Control Event), the Board shall provide that all outstanding Options shall be assumed, or equivalent options shall be substituted, by the acquiring or succeeding corporation (or an affiliate thereof); provided that if such Reorganization Event also constitutes a Change in Control Event, except to the extent specifically provided to the contrary in the instrument evidencing any Option or any other agreement between a Participant and the Company such assumed or substituted options shall become immediately exercisable in full if, on or prior to the first anniversary of the date of the consummation of the Reorganization Event, the Participant's employment with the Company or the acquiring or succeeding corporation is terminated for Good Reason by the Participant or is terminated without Cause by the Company or the acquiring or succeeding corporation or the Participant's service on the Board is terminated. For purposes hereof, an Option shall be considered to be assumed if, following consummation of the Reorganization Event, the Option confers the right to purchase, for each share of Common Stock subject to the Option immediately prior to the consummation of the Reorganization Event, the consideration (whether cash, securities or other property) received as a result of the Reorganization Event by holders of Common Stock for each share of Common Stock held immediately prior to the consummation of the Reorganization Event (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Common Stock); provided, however, that if the consideration received as a result of the Reorganization Event is not solely common stock of the acquiring or succeeding corporation (or an affiliate thereof), the Company may, with the consent of the acquiring or succeeding corporation, provide for the consideration to be received upon the exercise of Options to consist solely of common stock of the acquiring or succeeding corporation (or an affiliate thereof) equivalent in value (as determined by the Board) to the per share consideration received by holders of outstanding shares of Common Stock as a result of the Reorganization Event.

Notwithstanding the foregoing, if the acquiring or succeeding corporation (or an affiliate thereof) does not agree to assume, or substitute for, some or all of such Options, or in the event of a liquidation or dissolution of the Company, the Board shall, upon written notice to the Participants, provide with respect to any Options that are not to be assumed by an acquiring or succeeding corporation that all then unexercised Options will become exercisable in full as of a specified time prior to the Reorganization Event and will terminate immediately prior to the consummation of such Reorganization Event, except to the extent exercised by the Participants before the consummation of such Reorganization Event; provided, however, that in the event of a Reorganization Event under the terms of which holders of Common Stock will receive upon consummation thereof a cash payment for each share of Common Stock surrendered pursuant to such Reorganization Event (the "Acquisition Price"), then the Board may instead provide that all such outstanding Options shall terminate upon consummation of such Reorganization Event and that each Participant shall receive, in exchange therefor, a cash payment equal to the amount (if any) by which (A) the Acquisition Price multiplied by the number of shares of Common Stock subject to such outstanding Options (whether or not then exercisable), exceeds (B) the aggregate exercise price of such Options and any applicable tax withholdings.

(B) Change in Control Event that is not a Reorganization Event. Upon the occurrence of a Change in Control Event that does not also constitute a Reorganization Event, except to the extent specifically provided to the contrary in the instrument evidencing any Option or any other agreement between a Participant and the Company, then outstanding Options shall continue to become vested in accordance with the original vesting schedule set forth in such Option, provided, however, that each such Option shall be immediately exercisable in full if, on or prior to the first anniversary of the date of the consummation of the Change in Control Event, the Participant's employment with the Company or the acquiring or succeeding corporation is terminated for Good Reason by the Participant or is terminated without Cause by the Company or the acquiring or succeeding corporation.

(iii) Effect on Restricted Stock Awards

(A) Reorganization Event that is not a Change in Control Event. Upon the occurrence of a Reorganization Event that is not a Change in Control Event, the repurchase and other rights of the Company under each outstanding Restricted Stock Award shall inure to the benefit of the Company's successor and shall apply to the cash, securities or other property which the Common Stock was converted into or exchanged for pursuant to such Reorganization Event in the same manner and to the same extent as they applied to the Common Stock subject to such Restricted Stock Award.

 

(B) Change in Control Event. Upon the occurrence of a Change in Control Event (regardless of whether such event also constitutes a Reorganization Event), except to the extent specifically provided to the contrary in the instrument evidencing any Restricted Stock Award or any other agreement between a Participant and the Company, each then outstanding Restricted Stock Award shall continue to become free from conditions or restrictions in accordance with the original schedule set forth in such Restricted Stock Award, provided, however, that each such Restricted Stock Award shall immediately become free from all conditions or restrictions if, on or prior to the first anniversary of the date of the consummation of the Change in Control Event, the Participant's employment with the Company or the acquiring or succeeding corporation is terminated for Good Reason by the Participant or is terminated without Cause by the Company or the acquiring or succeeding corporation.

(iv) Effect on Stock Appreciation Rights and Other Stock Unit Awards

The Board may specify in an Award at the time of the grant the effect of a Reorganization Event and Change in Control Event on any SAR and Other Stock Unit Award.

 

	
10.

	
General Provisions Applicable to Awards

(a) Transferability of Awards.    Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by the person to whom they are granted, either voluntarily or by operation of law, except by will or the laws of descent and distribution or, other than in the case of an Incentive Stock Option, pursuant to a qualified domestic relations order, and, during the life of the Participant, shall be exercisable only by the Participant, except as may be otherwise provided in an Award agreement; provided, however, that the gratuitous transfer of the Award by the Participant to or for the benefit of any immediate family member, domestic partner, family trust or other entity established for the benefit of the Participant and/or an immediate family member thereof if, with respect to such proposed transferee, the Company would be eligible to use a Registration Statement on Form S-8 for the registration of the sale of the Common Stock subject to such Award under the Securities Act ; provided, further, that the Company shall not be required to recognize any such transfer until such time as the Participant and such authorized transferee shall, as a condition to such transfer, deliver to the Company a written instrument in form and substance satisfactory to the Company confirming that such transferee shall be bound by all of the terms and conditions of the Award; and, provided, further, that no option intended to be an incentive stock option shall be transferable unless the Board shall otherwise permit. References to a Participant, to the extent relevant in the context, shall include references to authorized transferees.

(b) Documentation.    Each Award shall be evidenced in such form (written, electronic or otherwise) as the Board shall determine. Each Award may contain terms and conditions in addition to those set forth in the Plan.

(c) Board Discretion.    Except as otherwise provided by the Plan, each Award may be made alone or in addition or in relation to any other Award. The terms of each Award need not be identical, and the Board need not treat Participants uniformly.

(d) Termination of Status.    The Board shall determine the effect on an Award of the disability, death, termination of employment, authorized leave of absence or other change in the employment or other status of a Participant and the extent to which, and the period during which, the Participant, or the Participant's legal representative, conservator, guardian or Designated Beneficiary, may exercise rights under the Award.

(e) Withholding.    The Participant must satisfy all applicable federal, state, and local or other income and employment tax withholding obligations before the Company will deliver stock certificates or otherwise recognize ownership of Common Stock under an Award. The Company may decide to satisfy the withholding obligations through additional withholding on salary or wages. If the Company elects not to or cannot withhold from other compensation, the Participant must pay the Company the full amount, if any, required for withholding or have a broker tender to the Company cash equal to the withholding obligations. Payment of withholding obligations is due before the Company will issue any shares on exercise or release from forfeiture of an Award or, if the Company so requires, at the same time as is payment of the exercise price unless the Company determines otherwise. If provided for in an Award or approved by the Board in its sole discretion, a Participant may satisfy such tax obligations in whole or in part by delivery of shares of Common Stock, including shares retained from the Award creating the tax obligation, valued at their Fair Market Value; provided, however, except as otherwise provided by the Board, that the total tax withholding where stock is being used to satisfy such tax obligations cannot exceed the Company's minimum statutory withholding obligations (based on minimum statutory withholding rates for federal and state tax purposes, including payroll taxes, that are applicable to such supplemental taxable income), except that, to the extent that the Company is able to retain shares of Common Stock having a Fair Market Value that exceeds the statutory minimum applicable withholding tax without financial accounting implications or the Company is withholding in a jurisdiction that does not have a statutory minimum withholding tax, the Company may retain such number of shares of Common Stock (up to the number of shares having a fair market value equal to the maximum individual statutory rate of tax (determined by (or in a manner approved by) the Company)) as the Company shall determine in its sole discretion to satisfy the tax liability associated with any Award. Shares surrendered to satisfy tax withholding requirements cannot be subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements.

(f) Amendment of Award.    Except as otherwise provided in Sections 5(g) and 6(e) with respect to repricings, Sections 5(d), 6(d), 7(b) and 8 with respect to minimum vesting of Awards, Section 10(i) with respect to Performance Awards or Section 11(d) with respect to actions requiring stockholder approval, the Board may amend, modify or terminate any outstanding Award, including but not limited to, substituting therefor another Award of the same or a different type, changing the date of exercise or realization, and converting an Incentive Stock Option to a Nonstatutory Stock Option, provided either (i) that the Participant's consent to such action shall be required unless the Board determines that the action, taking into account any related action, would not materially and adversely affect the Participant or (ii) that the change is permitted under Section 9 hereof; provided further, notwithstanding anything to the contrary herein, the Board shall have no authority to amend, modify or terminate any outstanding Award that has the same effect of actions expressly prohibited by Section 5(g) and requires approval by the Company's stockholders.

(g) Conditions on Delivery of Stock.    The Company will not be obligated to deliver any shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously delivered under the Plan until (i) all conditions of the Award have been met or removed to the satisfaction of the Company, (ii) in the opinion of the Company's counsel, all other legal matters in connection with the issuance and delivery of such shares have been satisfied, including any applicable securities laws and any applicable stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules or regulations.

(h) Acceleration.    Except as provided in Sections 5(d), 6(d), 7(b), 8 and 10(i), the Board may at any time provide that any Award shall become immediately exercisable in full or in part, free of some or all restrictions or conditions, or otherwise realizable in full or in part, as the case may be.

(i) Performance Awards

(i) Grants.    Restricted Stock Awards and Other Stock Unit Awards under the Plan may be made subject to the achievement of performance goals pursuant to this Section 10(i) ("Performance Awards"), subject to the limit in Section 4(c) on shares covered by such grants. Performance Awards can also provide for cash payments of up to $2,000,000 per calendar year per individual. Performance Awards shall not vest prior to the first anniversary of the date of grant. If Dividends or Dividend Equivalents are granted in connection with a Performance Award, such Dividend or Dividend Equivalent shall be paid only if the performance goal or goals associated with such Performance Award are satisfied.

(ii) Committee.    Grants of Performance Awards to any Covered Employee intended to qualify as "performance-based compensation" under Section 162(m) ("Performance-Based Compensation") shall be made only by a Committee (or subcommittee of a Committee) comprised solely of two or more directors eligible to serve on a committee making Awards qualifying as "performance-based compensation" under Section 162(m). In the case of such Awards granted to Covered Employees, references to the Board or to a Committee shall be deemed to be references to such Committee or subcommittee. "Covered Employee" shall mean any person who is a "covered employee" under Section 162(m)(3) of the Code.

(iii) Performance Measures.    For any Award that is intended to qualify as Performance-Based Compensation, the Committee shall specify that the degree of granting, vesting and/or payout shall be subject to the achievement of one or more objective performance measures established by the Committee, which shall be based on the relative or absolute attainment of specified levels of one or any combination of the following, which may be determined in accordance with Generally Accepted Accounting Principles ("GAAP") or on a non-GAAP basis:

(A) Earnings or Profitability Measures, including but not limited to: (i) revenue (gross, operating or net); (ii) revenue growth; (iii) income (gross, operating, net or adjusted); (iv) earnings before interest and taxes ("EBIT"); (v) earnings before interest, taxes, depreciation and amortization ("EBITDA"); (vi) earnings growth, (vii) profit margins or contributions; and (viii) expense levels or ratios;

(B) Return Measures, including, but not limited to: return on (i) investment; (ii) assets; (iii) equity; or (iv) capital (total or invested);

(C) Cash Flow Measures, including but not limited to: (i) operating cash flow; (ii) cash flow sufficient to achieve financial ratios or a specified cash balance; (iii) free cash flow; (iv) cash flow return on capital; (v) net cash provided by operating activities; (vi) cash flow per share; and (vii) working capital or adjusted working capital;

(D) Stock Price and Equity Measures, including, but not limited to: (i) return on stockholders' equity; (ii) total stockholder return; (iii) stock price; (iv) stock price appreciation; (v) market capitalization; (vi) earnings per share (basic or diluted) (before or after taxes); and (vii) price-to-earnings ratio;

(E) Strategic Metrics, including, but not limited to: (i) acquisitions or divestitures; (ii) collaborations, licensing or joint ventures; (iii) product research and development; (iv) clinical trials; (v) regulatory filings or approvals; (vi) patent application or issuance; (vii) manufacturing or process development; (viii) sales or net sales; (ix) sales growth, (x) market share; (xi) market penetration; (xii) inventory control; (xiii) growth in assets; (xiv) key hires; (xv) business expansion; (xvi) achievement of milestones under a third-party agreement; (xvii) financing; (xviii) resolution of significant litigation; (xix) legal compliance or risk reduction; (xx) improvement of financial ratings; or (xxi) achievement of balance sheet or income statement objectives,

(F) In each case such performance measures may be adjusted to exclude any one or more of (i) extraordinary items, (ii) gains or losses on the dispositions of discontinued operations, (iii) the cumulative effects of changes in accounting principles, (iv) the impairment or writedown of any asset or assets, (v) charges for restructuring and rationalization programs or (vi) other extraordinary or non-recurring items, as specified by the Committee when establishing the performance measures. Such performance measures: (i) may vary by Participant and may be different for different Awards; (ii) may be particular to a Participant or the department, branch, line of business, subsidiary or other unit in which the Participant works and may cover such period as may be specified by the Committee; and (iii) shall be set by the Committee within the time period prescribed by, and shall otherwise comply with the requirements of, Section 162(m). Awards that are not intended to qualify as Performance-Based Compensation may be based on these or such other performance measures as the Board may determine.

(iv) Adjustments.    Notwithstanding any provision of the Plan, with respect to any Performance Award that is intended to qualify as Performance-Based Compensation, the Committee may adjust downwards, but not upwards, the cash or number of Shares payable pursuant to such Award, and the Committee may not waive the achievement of the applicable performance measures except in the case of the death or disability of the Participant or a change in control of the Company.

 

(v) Other.    The Committee shall have the power to impose such other restrictions on Performance Awards as it may deem necessary or appropriate to ensure that such Awards satisfy all requirements for Performance-Based Compensation.

 

	
11.

	
Miscellaneous

(a) No Right To Employment or Other Status.    No person shall have any claim or right to be granted an Award, and the grant of an Award shall not be construed as giving a Participant the right to continued employment or any other relationship with the Company. The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan, except as expressly provided in the applicable Award.

(b) No Rights As Stockholder.    Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any shares of Common Stock to be distributed with respect to an Award until becoming the record holder of such shares.

(c) Effective Date and Term of Plan.    The Plan shall become effective immediately prior to the closing of the Company's initial public offering. No Awards shall be granted prior to (i) the date on which the Plan was adopted by the Board or (ii) the date the Plan was approved by the Company's stockholders. The Plan shall expire on December 31, 2021.

(d) Amendment of Plan.    The Board may amend, suspend or terminate the Plan or any portion thereof at any time; provided, however, that, to the extent determined by the Board, no amendment requiring stockholder approval under any applicable legal, regulatory or listing requirement shall become effective until such stockholder approval is obtained; provided further, that stockholder approval shall be required for any amendment to the Plan that (i) materially increases the number of shares of Common Stock available for issuance under the Plan (other than an increase to reflect an adjustment described in Section 9) or (ii) materially expands the class of service providers eligible to participate in the Plan.

(e) Authorization of Sub-Plans.    The Board may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable blue sky, securities or tax laws of various jurisdictions. The Board shall establish such sub-plans by adopting supplements to this Plan containing (i) such limitations on the Board's discretion under the Plan as the Board deems necessary or desirable or (ii) such additional terms and conditions not otherwise inconsistent with the Plan as the Board shall deem necessary or desirable. All supplements adopted by the Board shall be deemed to be part of the Plan, but each supplement shall apply only to Participants within the affected jurisdiction and the Company shall not be required to provide copies of any supplement to Participants in any jurisdiction which is not the subject of such supplement.

(f) Provisions for Foreign Participants.    The Board may modify Awards or Options granted to Participants who are foreign nationals or employed outside the United States or establish subplans or procedures under the Plan to recognize differences in laws, rules, regulations or customs of such foreign jurisdictions with respect to tax, securities, currency, employee benefit or other matters.

(g) Compliance with Code Section 409A.    Except as provided in individual Award agreements initially or by amendment, if and to the extent (i) any portion of any payment, compensation or other benefit provided to a Participant pursuant to the Plan in connection with his or her employment termination constitutes "nonqualified deferred compensation" within the meaning of Section 409A of the Code and (ii) the Participant is a specified employee as defined in Section 409A(a)(2)(B)(i) of the Code, in each case as determined by the Company in accordance with its procedures, by which determinations the Participant (through accepting the Award) agrees that he or she is bound, such portion of the payment, compensation or other benefit shall not be paid before the day that is six months plus one day after the date of "separation from service" (as determined under Section 409A of the Code) (the "New Payment Date"), except as Section 409A of the Code may then permit. The

aggregate of any payments that otherwise would have been paid to the Participant during the period between the date of separation from service and the New Payment Date shall be paid to the Participant in a lump sum on such New Payment Date, and any remaining payments will be paid on their original schedule.

The Company makes no representations or warranty and shall have no liability to the Participant or any other person if any provisions of or payments, compensation or other benefits under the Plan are determined to constitute nonqualified deferred compensation subject to Section 409A of the Code but do not to satisfy the conditions of that section.

(h) Governing Law.    The provisions of the Plan and all Awards made hereunder shall be governed by and interpreted in accordance with the laws of the State of Delaware, excluding choice-of-law principles of the law of such state that would require the application of the laws of a jurisdiction other than such state.

Approved by the Board of Directors of Emergent

BioSolutions Inc. on March 24, 2016, subject to

stockholder approval.

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