Document:

exv4w14

 

Exhibit 4.14

2000

SUBSCRIPTION AGREEMENT

between

PEPTIDE THERAPEUTICS GROUP plc

and

BAXTER INTERNATIONAL INC.

 

 

 

 

 

 

Weil, Gotshal & Manges

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 	 	 	 	

	1	 	
DEFINITIONS AND INTERPRETATION
	 	 	1	 
	2	 	
AGREEMENT TO SUBSCRIBE
	 	 	8	 
	3	 	
COMPLETION
	 	 	9	 
	4	 	
ANNOUNCEMENTS
	 	 	11	 
	5	 	
RESTRICTIONS ON SALES AND NO STANDSTILL
	 	 	11	 
	6	 	
APPOINTMENT OF DIRECTOR
	 	 	13	 
	7	 	
COMPANY’S WARRANTIES
	 	 	14	 
	8	 	
BAXTER’S WARRANTIES
	 	 	18	 
	9	 	
CHANGE OF CONTROL
	 	 	19	 
	10	 	
FURTHER TERMS
	 	 	19	 
	11	 	
COSTS
	 	 	20	 
	12	 	
FURTHER ASSURANCE
	 	 	20	 
	13	 	
GENERAL
	 	 	20	 
	14	 	
ASSIGNMENT AND THIRD PARTY RIGHTS
	 	 	21	 
	15	 	
NOTICES
	 	 	21	 
	16	 	
GOVERNING LAW AND JURISDICTION
	 	 	21	 
	17	 	
COUNTERPARTS
	 	 	22	 

 

 

THIS AGREEMENT is made on                  2000 between the following parties:

	(1)	 	PEPTIDE THERAPEUTICS GROUP plc, a company incorporated in England and
Wales (registered no: 2863682) whose registered office is at Peterhouse
Technology Park, 100 Fulbourn Road, Cambridge CB1 9PT (the “Company”); and
	 
	(2)	 	BAXTER INTERNATIONAL INC., a company incorporated in Delaware whose
principal place of business is at One Baxter Parkway, Deerfield, IL
60015-4633, USA (“Baxter”).

WHEREAS

	(A)	 	The Company is a public company limited by shares incorporated on 19
October 1993 in England and Wales under the Companies Act 1985 and having
at the date hereof an authorised share capital of £10,000,000 divided into
100,000,000 ordinary shares of 10p each, of which 78,934,358 such shares
are issued and fully paid.
	 
	(B)	 	On the terms and conditions set out herein Baxter has agreed to subscribe
and the Company has agreed to allot to Baxter a number of ordinary shares
of 10p each in the Company.

IT IS AGREED as follows:-

	1	 	DEFINITIONS AND INTERPRETATION
	 
	1.1	 	The Recitals form part of this Agreement and any references to this
Agreement shall include the Recitals.
	 
	1.2	 	In this Agreement the following words and expressions shall have the
following meanings:-

	 	 	 
	“Act”	 	
the Companies Act 1985
	 
	“acting in concert”	 	
shall bear the same meaning as in the Code
	 
	“Admission”	 	
means Admission to Listing together with
Admission to Trading
	 
	“Admission to Listing”	 	
admission to the Official List of the UK Listing
Authority and such admission becoming effective
by the UK Listing Authority disseminating an
announcement in accordance with paragraph 7.1 of
Chapter 7 of the Listing Rules
	 
	“Admission to Trading”	 	
admission to trading on the London Stock Exchange
	 
	“Appointment Letter”	 	
means the letter of appointment in the agreed
form between the Company and the Baxter Director
(as defined in Clause 6.1) setting out the terms
of the appointment of the Baxter Director to the
Board

1

 

	 	 	 
	“Arilvax Sub-Distribution
Agreement”	 	
means the agreement between PTL and Baxter
Healthcare Corporation in the agreed form to be
entered into once the Medeva Consent is obtained
by PTL whereby PTL appoints Baxter Healthcare
Corporation as its exclusive sub-distributor for
Arilvax in the USA
	 
	“Articles”	 	
means the current articles of association of the
Company
	 
	“Baxter Group”	 	
Baxter and any holding company or subsidiary of
Baxter or a subsidiary of a holding company of
Baxter from time to time
	 
	“Baxter Person”	 	
means (i) Baxter, (ii) any member of the Baxter
Group and (iii) any person or persons with whom
Baxter or any member of the Baxter Group are
acting in concert in relation to the Company
	 
	“Board”	 	
means the board of directors of the Company from
time to time
	 
	“business day”	 	
means a day other than a Saturday or Sunday on
which banks in the City of London are open for
all forms of normal banking business
	 
	“Change of Control”	 	
means the acquisition by any person or persons
(other than a Baxter Person or any Baxter
Persons and any Baxter Persons in a concert
party with non-Baxter Persons shall be
disregarded in determining whether there has
been a Change of Control) who in relation to
each other are acting in concert of such number
of shares in the Company which, when added to
any shares in the Company already held or
controlled by them, confer in aggregate more
than 50% of the total voting rights conferred by
all the shares in the capital of the Company for
the time being in issue and having the right to
attend and vote at general meetings of the
Company
	 
	“Circular”	 	
means the circular to be sent by the Company to
its shareholders in connection with the
Subscription and which comprises listing
particulars and a Class 1 circular in relation
to the Company and which contains the notice
convening the EGM
	 
	“Code”	 	
means The City Code on Takeovers and Mergers

2

 

	 	 	 
	“Commercial Agreements”	 	
means (a) each of the Option Agreement, the
Contract Manufacturing Agreement and the Vero
Cell Know-How Licence or if, at Completion,
Medeva consent has been obtained (b) each of the
Arilvax Sub-Distribution Agreement, the Contract
Manufacturing Agreement and the Vero Cell
Know-How Licence and severally each is a
“Commercial Agreement”
	 
	“Company’s Solicitors”	 	
Weil, Gotshal & Manges, One South Place, London

EC2M 2WG
	 
	“Completion”	 	
completion of the subscription of the First
Subscription Shares in accordance with Clause 3
	 
	“Contract Manufacturing
Agreement”	 	
means the agreement between Baxter Healthcare
Corporation, Baxter Healthcare S.A, OraVax and
the Company in the agreed form to be entered
into on Completion whereby the aforementioned
Baxter companies appoint OraVax as their
exclusive manufacturer for certain vaccine
intermediates, such manufacturing functions to
be performed by OraVax at the Canton facility in
Massachusetts, USA
	 
	“Directors”	 	
means the directors of the Company as at the
date of this Agreement
	 
	“EGM”	 	
the extraordinary general meeting of the Company
to be convened for 4 December 2000 as soon as
practicable thereafter but in any event on or
before 28 December 2000 for the purpose of
passing the Resolutions pursuant to the notice
of EGM included in the Circular
	 
	“disposal”	 	
means, in respect of the Subscription Shares and
any other Ordinary Shares, any sale, grant of
options, transfer, charge, pledge, hypothecation
or other disposal of any nature whatsoever, and
"dispose” shall be construed accordingly
	 
	“First Subscription”	 	
the subscription of the First Subscription
Shares by Baxter pursuant to the terms of this
Agreement
	 
	“First Subscription Amount”	 	
£10,431,880
	 
	“First Subscription Date”	 	
4 December 2000 or if later the day of the
passing of the Resolutions
	 
	“First Subscription Price”	 	
means in relation to the First Subscription
Shares 115p per share
	 
	“First Subscription Shares”	 	
9,071,200 Ordinary Shares

3

 

	 	 	 
	“Fourth Subscription”	 	
the subscription of the Fourth Subscription
Shares by Baxter pursuant to the terms of this
Agreement
	 
	“Fourth Subscription Amount”	 	
£6,954,586.50 less the Rights Issue Amount (if
any) in accordance with Clause 10.5 and only to
the extent that the same Rights Issue Amount has
not been deducted from the Second Subscription
Amount or Third Subscription Amount
	 
	“Fourth Subscription Date”	 	
1 June 2003
	 
	“Fourth Subscription Price”	 	
means in relation to the Fourth Subscription
Shares 150p per share
	 
	“Fourth Subscription Shares”	 	
means the number of Ordinary Shares (rounded
down to the nearest whole number) which is
calculated by dividing the Fourth Subscription
Amount by the Fourth Subscription Price
	 
	“FSA”	 	
the Financial Services Act 1986
	 
	“Group”	 	
the Company and its subsidiaries and subsidiary
undertakings
	 
	“Group Company”	 	
the Company or one of its subsidiaries or
subsidiary undertakings
	 
	“Healthcare Organisation”	 	
any organisation (including its subsidiary,
holding and associated companies) in which the
majority of the organisation’s activities are
that of providing healthcare, pharmaceutical or
other related goods or services
	 
	“Listing Rules”	 	
the listing rules made by the UK Listing
Authority for the purposes of Part IV of the FSA
and in the exercise of its functions in respect
of the admission of securities to the Official
List otherwise than in accordance with Part IV
of the FSA 1986
	 
	“London Stock Exchange”	 	
London Stock Exchange plc
	 
	“Medeva Consent”	 	
the consent of Medeva to the appointment of
Baxter Healthcare Corporation as PTL’s
sub-distributor of Arilvax on the terms and
conditions of the Arilvax Sub-Distribution
Agreement

4

 

	 	 	 
	“Option Agreement”	 	
means the agreement between PTL and Baxter
Healthcare Corporation in the agreed form to be
entered into on Completion pursuant to which
Baxter Healthcare Corporation shall provide
advice, assistance and consultancy services to
PTL pending receipt of the Medeva Consent and
whereby PTL grants Baxter Healthcare Corporation
the exclusive option to enter into the Arilvax
Sub-Distribution Agreement within ten (10)
business days of receiving written notification
from PTL that Medeva Consent has been obtained
	 
	“OraVax”	 	
OraVax Inc. a wholly-owned US subsidiary of the
Company
	 
	“Ordinary Shares”	 	
ordinary shares of 10p each in the capital of
the Company as consolidated or subdivided from
time to time
	 
	“PTL”	 	
Peptide Therapeutics Limited, a wholly-owned
subsidiary of the Company
	 
	“Press Announcement”	 	
the press announcement giving information
relating, inter alia, to this Agreement and the
Commercial Agreements in the agreed form
	 
	“Qualifying Rights Issue”	 	
means an offer by the Company to its
shareholders to subscribe for new Ordinary
Shares on a pre-emptive basis at a price per new
Ordinary Share of less than 130p
	 
	“Relevant Date”	 	
means the earlier of (i) third anniversary of
the First Subscription Date and (ii) 15 December
2003
	 
	“Resolutions”	 	
means (i) an ordinary resolution of the Company
increasing the authorised share capital of the
Company by an amount at least sufficient to
enable allotment of the Subscription Shares to
Baxter; (ii) an ordinary resolution of the
Company conferring on the Board authority
pursuant to section 80 of the Act at least
sufficient to enable allotment of the
Subscription Shares to Baxter; (iii) a special
resolution of the Company conferring on the
Board power pursuant to section 95 of the Act at
least sufficient to enable allotment of the
Subscription Shares to Baxter without the need
to offer them first to shareholders of the
Company; and (iv) an ordinary resolution of the
Company approving the Subscription and the
Commercial Agreements

5

 

	 	 	 
	“Rights Issue Amount”	 	
means the sterling amount subscribed by Baxter
from time to time for new Ordinary Shares in
taking up its entitlement to new Ordinary Shares
pursuant to a Qualifying Rights Issue
	 
	“Second Subscription”	 	
the subscription of the Second Subscription
Shares by Baxter pursuant to the terms of this
Agreement
	 
	“Second Subscription Amount”	 	
£3,477,293.30 less the Rights Issue Amount (if
any) in accordance with Clause 10.5
	 
	“Second Subscription Date”	 	
1 June 2001
	 
	“Second Subscription Price”	 	
means in relation to the Second Subscription
Shares 130p per share
	 
	“Second Subscription Shares”	 	
means the number of Ordinary Shares (rounded
down to the nearest whole number) which is
calculated by dividing the Second Subscription
Amount by the Second Subscription Price
	 
	“Subscription”	 	
the subscription of the Subscription Shares by
Baxter pursuant to the terms of this Agreement
	 
	“Subscription Amount”	 	
means the Second Subscription Amount, the Third

Subscription Amount or the Fourth Subscription

Amount as the context so requires
	 
	“Subscription Dates”	 	
means each of the First Subscription Date, the
Second Subscription Date, the Third Subscription
Date and the Fourth Subscription Date and each
is a “Subscription Date”
	 
	“Subscription Shares”	 	
up to 21,349,994 Ordinary Shares to be
subscribed by Baxter pursuant to the terms of
this Agreement
	 
	“Supplemental Warranties”	 	
the representations and warranties contained in
Clause 7.11
	 
	“Third Subscription”	 	
the subscription of the Third Subscription
Shares by Baxter pursuant to the terms of this
Agreement
	 
	“Third Subscription Amount”	 	
£6,954,586.80 less the Rights Issue Amount (if
any) in accordance with Clause 10.5 and only to
the extent that the same Rights Issue Amount has
not been deducted against the Second
Subscription Amount
	 
	“Third Subscription Date”	 	
1 June 2002
	 
	“Third Subscription Price”	 	
means in relation to the Third Subscription
Shares 140p per share

6

 

	 	 	 
	“Third Subscription Shares”	 	
means the number of Ordinary Shares (rounded
down to the nearest whole number) which is
calculated by dividing the Third Subscription
Amount by the Third Subscription Price
	 
	“UK Listing Authority”	 	
means the Financial Services Authority acting in
its capacity as the competent authority for the
purposes of Part IV of the FSA and in the
exercise of its functions in respect of the
admission to the Official List otherwise than in
accordance with Part IV of the FSA, including
where the context so permits, any committee,
employee, officer or servant to whom any
function of the UK Listing Authority may for the
time being be delegated
	 
	“Vero Cell Know-How Licence”	 	
means the agreement between OraVax and Baxter AG
in agreed form to be entered into at Completion
whereby Baxter AG grants to OraVax the sole
right and licence to use a working cell bank of
Vero Cell Line and technical information
relating to the same for the making, using and
selling of West Nile and Japanese encephalitis
vaccines throughout the world
	 
	“Warranties”	 	
means the representations and warranties
contained in Clause 7.1

	1.3	 	In this Agreement, a reference to:

	 	  1.3.1	 	a “subsidiary” or “holding company” shall be construed in
accordance with section 736 of the Act and a reference to
“subsidiary undertaking” shall be construed in accordance with
section 258 of the Act.
	 
	 	  1.3.2	 	a document in the “agreed form” is a reference to a document
in a form approved and for the purposes of identification signed by
or on behalf of the parties or in such other form as may be agreed
by or on behalf of the parties;
	 
	 	  1.3.3	 	a statutory provision includes a reference to:-

	 	  (a)	 	a statutory provision as modified or
re-enacted or both before the date of this Agreement; and
	 
	 	  (b)	 	any subordinate legislation made under the
statutory provision before the date of this Agreement;

	 	  1.3.4	 	person includes a reference to any body corporate,
unincorporated association or partnership;
	 
	 	  1.3.5	 	a person includes a reference to that person’s legal
personal representatives, successors and assigns;
	 
	 	  1.3.6	 	a Clause or Schedule, unless the context otherwise requires,
is a reference to a Clause of or schedule to this Agreement;

7

 

	1.4	 	The headings in this Agreement shall not affect the interpretation of
this Agreement.
	 
	1.5	 	References to interests in Ordinary Shares or any other shares (whether
in the Company or otherwise) shall be construed in accordance with
Sections 198 to 209 of the Act and “interested” shall be construed
accordingly.
	 
	2	 	AGREEMENT TO SUBSCRIBE
	 
	2.1	 	Subject to and conditional only upon the passing of the Resolutions at
the EGM and subject to clause 2.3, Baxter agrees:

	 	  2.1.1	 	on the First Subscription Date to subscribe the First
Subscription Amount for the First Subscription Shares at the First
Subscription Price;
	 
	 	  2.1.2	 	on the Second Subscription Date to subscribe the Second
Subscription Amount for the Second Subscription Shares at the Second
Subscription Price;
	 
	 	  2.1.3	 	on the Third Subscription Date to subscribe the Third
Subscription Amount for the Third Subscription Shares at the Third
Subscription Price; and
	 
	 	  2.1.4	 	on the Fourth Subscription Date to subscribe the Fourth
Subscription Amount for the Fourth Subscription Shares at the Fourth
Subscription Price

	 	 	  and the Company agrees to allot and issue the respective Subscription
Shares to Baxter on the respective Subscription Dates.

	2.2	 	The Subscription Shares to be issued to Baxter pursuant to Clause 2.1
shall be issued fully paid up and free from all liens, charges and
encumbrances and shall on issue rank pari passu in all respects with
existing Ordinary Shares then in issue.
	 
	2.3	 	At any time after the First Subscription Date, Baxter may, by giving to
the Company 15 business days’ written notice, set a revised subscription
date for the Second Subscription, the Third Subscription and the Fourth
Subscription (the “Accelerated Subscription Date”). In the event that the
Company is required by the Listing Rules to issue listing particulars in
relation to the Second, Third and Fourth Subscription the Accelerated
Subscription Date shall be the first practicable day following the
publication of the listing particulars by the Company. On the Accelerated
Subscription Date, Baxter shall subscribe for the Second Subscription
Shares, the Third Subscription Shares and the Fourth Subscription Shares
at the relevant price referred to in clauses 2.1.2, 2.1.3 and 2.1.4
respectively. In the event that Baxter serves a notice pursuant to this
clause 2.3, the Company and Baxter shall comply with their respective
obligations as set out in clauses 3.3, 3.4 and 3.5 on the Accelerated
Subscription Date.
	 
	2.4	 	The Company agrees to convene the EGM for a date no later than 28
December 2000 and to use reasonable endeavours to procure that the EGM is
held on or prior to such date and that the Resolutions are duly passed at
the EGM. If all of the Resolutions are not duly passed at an EGM held on
or before 28 December 2000 the parties shall have no further obligations
whatsoever to each other in relation to the Subscriptions or the
Commercial Agreements. The Company shall obtain Baxter’s approval (such
approval not to be unreasonably withheld) to the sections in the Circular
which describe the Baxter Group, its business or the arrangements
contemplated by this Agreement.

8

 

	2.5	 	In the event that between the date of the Circular and the date of the
EGM a director of the Company publicly states that he no longer supports
the proposed transaction described in the Circular (the “Transaction”) and
accordingly the Board is unable to unanimously recommend the Transaction
or should the Board change its recommendation of the Transaction prior to
the EGM and the Resolutions are not passed by the requisite shareholder
majority then the Company shall pay to Baxter within 30 days of the EGM an
abort fee of £200,000.
	 
	3 	 	COMPLETION
	 
	3.1	 	Completion of the First Subscription shall take place on the First
Subscription Date when:-

	 	  3.1.1	 	Baxter shall pay the Company the First Subscription Amount
for the First Subscription Shares by telegraphic transfer to the
following account (the “Peptide Account”):-

	 	 	 	Account Name:

Account Number:

Sort Code:

Bank:	Peptide Therapeutics Group plc

40683167

20-17-19

Barclays Bank, Bene’t Street Business Centre,
PO Box No. 2, Cambridge, CB2 3PZ

	 	  3.1.2	 	the Company shall allot the First Subscription Shares to
Baxter subject only to Admission becoming effective and will deliver
to Baxter a certified copy of the resolution of the Board making
such conditional allotment;
	 
	 	  3.1.3	 	the Company shall instruct the registrars to deliver to
Baxter a duly executed share certificate in respect of the First
Subscription Shares within 5 business days of Admission;
	 
	 	  3.1.4	 	Baxter shall deliver the Commercial Agreements to the
Company duly executed by Baxter, Baxter Healthcare Corporation,
Baxter Healthcare S.A. or Baxter AG (as appropriate); and
	 
	 	  3.1.5	 	the Company shall deliver to Baxter the Commercial
Agreements duly executed by OraVax, PTL or the Company (as
appropriate).

	3.2	 	Neither party is obliged to complete this Agreement unless the other
party complies with its obligations under Clause 3.1. The Company will
use reasonable endeavours to procure Admission of the First Subscription
Shares and pending Admission all matters relating to completion of the
First Subscription shall be held in escrow by the Company’s Solicitors.
Immediately on Admission all matters relating to completion of the First
Subscription shall be released from escrow by the Company’s Solicitors.
If Admission of the First Subscription Shares does not become effective on
or before the fifteenth business day (or such later date as Baxter and the
Company may agree) following the allotment of the First Subscription
Shares (the “First End Date”) Baxter may at its option terminate this
Agreement. If Baxter does not terminate in such circumstances the Company
will be under a continuing obligation to use reasonable endeavours to
procure Admission of the First Subscription Shares within 90 days of the
First End Date (the “Second End Date”). The Agreement will terminate if
Admission of the First Subscription Shares does not occur by the Second
End Date. In the event of termination upon the First or Second End Date
the parties shall have no obligations whatsoever to 

9

 

	 	 	each other in relation
to the Subscriptions or the Commercial Agreements and the Company shall
repay to Baxter the First Subscription Price (with interest actually
earned by the Company in the period) paid by Baxter to the Company
pursuant to Clause 3.1.1 above.
	 
	3.3	 	On the Second Subscription Date:

	 	  3.3.1	 	Baxter shall pay to the Company the Second Subscription
Amount for the Second Subscription Shares by telegraphic transfer to
the Peptide Account;
	 
	 	  3.3.2	 	the Company shall allot the Second Subscription Shares to
Baxter; and
	 
	 	  3.3.3	 	the Company shall instruct the registrars to deliver to
Baxter a duly executed share certificate in respect of the Second
Subscription Shares within 5 business days of Admission.

	 	 	The Company will use reasonable endeavours to procure Admission of the
Second Subscription Shares and pending Admission all matters relating to
completion of the Second Subscription shall be held in escrow by the
Company’s Solicitors. Immediately on Admission all matters relating to
completion of the Second Subscription shall be
released from escrow by the Company’s Solicitors. If Admission of the
Second Subscription Shares does not become effective on or before the
fifteenth business day (or such later date as Baxter and the Company may
agree) following the allotment of the Second Subscription Shares (the
“Third End Date”) Baxter may at its option terminate this Agreement. If
Baxter does not terminate in such circumstances the Company will be under
a continuing obligation to use reasonable endeavours to procure Admission
of the Second Subscription Shares within 90 days of the Third End Date
(the “Fourth End Date”). The Agreement will terminate if Admission of
the Second Subscription Shares does not occur by the Fourth End Date. In
the event of termination upon the Third or Fourth End Date the parties
shall have no obligations whatsoever to each other in relation to the
Second Subscription and the Company shall repay to Baxter the Second
Subscription Price (with interest actually earned by the Company in the
period) paid by Baxter to the Company.

	  3.4	 	On the Third Subscription Date:

	 	  3.4.1	 	Baxter shall pay the Company the Third Subscription Amount
for the Third Subscription Shares by telegraphic transfer to the
Peptide Account;
	 
	 	  3.4.2	 	the Company shall allot the Third Subscription Shares to
Baxter; and
	 
	 	  3.4.3	 	the Company shall instruct the registrars to deliver to
Baxter a duly executed share certificate in respect of the Third
Subscription Shares within 5 business days of Admission.

	 	 	The Company will use reasonable endeavours to procure Admission of the
Third Subscription Shares and pending Admission all matters relating to
completion of the Third Subscription shall be held in escrow by the
Company’s Solicitors. Immediately on Admission all matters relating to
completion of the Third Subscription shall be released from escrow by the
Company’s Solicitors. If Admission of the Third Subscription Shares does
not become effective on or before the fifteenth business day (or such
later date as Baxter and the Company may agree) following the allotment
of the Third Subscription Shares (the “Fifth End Date”) Baxter may at its
option terminate this Agreement. If 

10

 

	 	 	Baxter does not terminate in such
circumstances the Company will be under a continuing obligation to use
reasonable endeavours to procure Admission of the Third Subscription
Shares within 90 days of the Fifth End Date (the “Sixth End Date"). The
Agreement will terminate if Admission of the Third Subscription Shares
does not occur by the Sixth End Date. In the event of termination on the
Fifth or Sixth End Date the parties shall have no obligations whatsoever
to each other in relation to the Third Subscription and the Company shall
repay to Baxter the Third Subscription Price (with interest actually
earned by the Company in the period) paid by Baxter to the Company.

	3.5	 	On the Fourth Subscription Date:

	 	  3.5.1	 	Baxter shall pay to the Company the Fourth Subscription
Amount for the Fourth Subscription Shares by telegraphic transfer to
the Peptide Account;
	 
	 	  3.5.2	 	the Company shall allot the Fourth Subscription Shares to
Baxter ; and
	 
	 	  3.5.3	 	the Company shall instruct the registrars to deliver to
Baxter a duly executed share certificate in respect of the Fourth
Subscription Shares within 5 business days of Admission.

	 	 	The Company will use reasonable endeavours to procure Admission of the
Fourth Subscription Shares and pending Admission all matters relating to
completion of the Fourth Subscription shall be held in escrow by the
Company’s Solicitors. Immediately on Admission all matters relating to
completion of the Fourth Subscription shall be released from escrow by
the Company’s Solicitors. If Admission of the Fourth Subscription Shares
does not become effective on or before the fifteenth business day (or
such later date as Baxter and the Company may agree) following the
allotment of the Fourth Subscription Shares (the “Seventh End Date”)
Baxter may at its option terminate this Agreement. If Baxter does not
terminate in such circumstances the Company will be under a continuing
obligation to use reasonable endeavours to procure Admission of the
Fourth Subscription Shares within 90 days of the Seventh End Date (the
“Eighth End Date”). The Agreement will terminate if Admission does not
occur by the Eighth End Date. In the event of termination on the Seventh
or Eighth End Date the parties shall have no obligations whatsoever to
each other in relation to the Fourth Subscription and the Company shall
repay to Baxter the Fourth Subscription Price (with interest actually
earned by the Company in the period) paid by Baxter to the Company.

	4	 	ANNOUNCEMENTS

	 	 	The Press Announcement shall be issued (including to the UK Listing
Authority) immediately following execution of this Agreement. Apart from
the Press Announcement no other public announcement, communication or
circular (other than the Circular or to the extent required by law, a
regulatory authority, the UK Listing Authority, The London Stock Exchange
or the Panel on Takeovers and Mergers) concerning the transactions
referred to in this Agreement shall be made or despatched by any party
without the prior written consent of the other party (such consent not to
be unreasonably withheld or delayed).

	5	 	RESTRICTIONS ON SALES AND NO STANDSTILL
	 
	5.1	 	Baxter undertakes and agrees with the Company that:-

	 	  5.1.1	 	during the period from the date of this Agreement up to and
including the Relevant Date, it will retain (1) all the Subscription
Shares subscribed for by it; 

11

 

	 		 	(2) Ordinary Shares subscribed for by
it by reference to Subscription Shares pursuant to a Qualifying
Rights Issue but only where Baxter elects to deduct the Rights Issue
Amount from a Subscription in accordance with Clause 10.5 (“Rights
Shares”); and (3) any Ordinary Shares which are issued to it by way
of capitalisation of profits or bonus issue in respect of any of the
Subscription Shares or the Rights Shares subscribed for by it, and
during such period will not dispose of or agree to dispose of any
interest in all or any such Subscription Shares, Rights Shares or
Ordinary Shares;
	 
	 	  5.1.2	 	after the Relevant Date, any disposal by Baxter of Ordinary
Shares acquired or subscribed for by it (together with any Ordinary
Shares issued by way of capitalisation of profits or bonus issue in
respect of such Ordinary Shares) during the period from the date of
this Agreement up to and including the Relevant Date be made through
the Company’s brokers so long as the terms on which they are willing
to effect the sale are no less advantageous to Baxter than terms
which Baxter can obtain from elsewhere; and
	 
	 	  5.1.3	 	in the event that the Company makes an off market purchase
of Ordinary Shares approved by the Company’s shareholders which has
the effect of increasing Baxter’s interest in the share capital of the Company
to twenty per cent. (20%) or more of the issued share capital of
the Company, then notwithstanding Clause 5.1.1, Baxter shall be
permitted to sell such number of Subscription Shares or Rights
Shares as would have the effect of reducing its interest in the
issued share capital of the Company to nineteen point nine per
cent. (19.9%).

	5.2	 	The restrictions contained in Clause 5.1 shall not apply to any of the
following:-

	 	  5.2.1	 	any compromise or arrangement under Section 425 of the Act
providing for the acquisition by any person (or group of persons
acting in concert) of 50 per cent. or more of the equity share
capital of the Company; or
	 
	 	  5.2.2	 	any scheme of reconstruction under Section 110 of the
Insolvency Act 1986 in relation to the Company; or
	 
	 	  5.2.3	 	an acceptance by Baxter of a general offer for the share
capital of the Company made in accordance with the Code or otherwise
where such offer relates to the entire share capital of the Company
other than any shares held or controlled by the offeror or persons
acting in concert with him or it for the purposes of the Code in
relation to such offer and which is either (i) recommended by the
Board of Directors of the Company or (ii) unconditional as to
acceptances; or
	 
	 	  5.2.4	 	to the sale, transfer or other disposal of any title to or
interest in any Ordinary Shares which are subject to Clause 5.1 by
Baxter to any member of the Baxter Group PROVIDED THAT:-

	 	(a)	 	any such transferee shall first agree with
the Company to be bound by the restrictions to which Baxter
is subject under this Agreement as regards such interests
by execution of a deed of adherence in a form approved by
the Company (such approval not to be unreasonably
withheld); and

12

 

	 	(b)	 	in the event that any such transferee
ceases to be such a subsidiary or subsidiary undertaking,
any such interest in any such Ordinary Shares will first be
transferred to Baxter or any of its subsidiaries or
subsidiary undertakings as Baxter shall specify and shall
be held subject to the restrictions to which Baxter is
subject under this Agreement.

	5.3	 	Baxter will procure that any Baxter Person who acquires any Ordinary
Shares at any time during the period from the date of this Agreement until
the Relevant Date (and irrespective of whether such Ordinary Shares are
subscribed for or otherwise acquired and irrespective of whether they are
acquired from Baxter or another Baxter Person or otherwise) complies with
the provisions of clause 5.1, subject only to the exceptions contained in
clause 5.2
	 
	5.4	 	This Agreement does not in any way restrict or prevent Baxter or any
Baxter Person from acquiring further shares in the Company. Baxter
acknowledges that it is bound by the provisions of the Code and undertakes
to the Company to comply at all times with the provisions of the Code.
	 
	6	 	APPOINTMENT OF DIRECTOR
	 
	6.1	 	Upon Completion, and subject to the Articles, the Directors will appoint
a person nominated in writing by Baxter as a non-executive director of the
Company (the “Baxter Director”). The Baxter Director must be acceptable
to the Directors, such acceptance not to be unreasonably withheld and will
be appointed on the terms of the Appointment Letter and subject to the
memorandum and articles of association of the Company. Baxter has the
right on giving written notice to the Company at any time, subject always
to Baxter procuring the resignation of the existing Baxter Director to
nominate another person to be the Baxter Director in place of the Baxter
Director previously nominated by Baxter whereupon the Directors will
appoint such person (being acceptable to the Directors, such acceptance
not to be unreasonably withheld). Baxter shall ensure that the Baxter
Director and any Baxter Person with whom the Baxter Director shares
information properly obtained by the Baxter Director in his capacity as a
non-executive director is kept confidential.
	 
	6.2	 	The Company will use reasonable endeavours to procure that the Baxter
Director is duly re-appointed in accordance with the Articles at the next
Annual General Meeting of the Company following the date of his
appointment and when proposed for re-election by rotation and the Company
will not, prior to the EGM, appoint such number of additional Directors to
the Board which would prevent the Company from validly appointing the
Baxter director.
	 
	6.3	 	If Baxter or any Baxter Person:

	 	  6.3.1	 	following the Relevant Date, as a result of any disposal or
transfer (otherwise than pursuant to clause 5.2.4) ceases to own
fifteen per cent. (15%) or more of the Ordinary Shares; or
	 
	 	  6.3.2	 	is in breach of any of its obligations under this Agreement
and the breach has not been cured within thirty days of receipt by
Baxter from the Company of notice specifying reasonable details of
the breach alleged; or
	 
	 	  6.3.3	 	terminates this Agreement in accordance with Clause 9.

13

 

	 	 	Baxter shall procure the immediate removal from the Board of the Baxter
Director. If Baxter does not voluntarily procure the resignation and
removal from the Board of the Baxter Director then the Directors shall,
in accordance with the Articles, immediately procure the removal of the
Baxter Director from the Board by notice in writing to the Baxter
Director without any liability of any nature whatsoever to Baxter, any
Baxter Person or the Baxter Director.

	7	 	COMPANY’S WARRANTIES
	 
	7.1	 	The Company warrants to Baxter that, as at the date of the Circular and
immediately prior to the EGM, save as disclosed in the Circular or in any
supplementary prospectus or supplementary listing particulars published by
the Company prior to the EGM:-

	 	  7.1.1	 	The Circular complies in all respects with the FSA and the
Listing Rules.
	 
	 	  7.1.2	 	Each statement of fact contained in the Circular is true and
accurate in all material respects and not misleading in any
material respect. Each forecast, estimate and expression of
opinion, intention or expectation contained in the
Circular is made on reasonable grounds, is honestly held, is
fairly based and has been made after due and careful enquiry and
consideration.
	 
	 	  7.1.3	 	The Circular contains all information about the Group which
is or might be material for disclosure to a prospective subscriber
of the Subscription Shares and their respective professional
advisers or which they would reasonably require, and reasonably
expect to find there, for the purpose of making an informed
assessment of the assets and liabilities, financial position,
profits and losses, and prospects of the Group and the rights
attaching to the Subscription Shares.
	 
	 	  7.1.4	 	No information has been omitted from the Circular which
makes a statement of fact, forecast, estimate or expression of
opinion, intention or expectation in the Circular untrue, inaccurate
or misleading in a material respect or which, in the context of the
Subscription, is material for disclosure in the Circular.
	 
	 	  7.1.5	 	Except as disclosed in the Circular, there are no rights
(conditional or otherwise) to require the issue of any shares or
other securities (including, without limitation, any loan capital)
of a Group Company (other than to another Group Company) which are
outstanding.
	 
	 	  7.1.6	 	There is no fact or circumstance which is not disclosed in
the Circular which ought to be taken into account by the UK Listing
Authority or the London Stock Exchange in considering the
suitability for listing and trading respectively of the Subscription
Shares.
	 
	 	  7.1.7	 	The Group has sufficient working capital for its present
requirements taking into account the Subscriptions to be made by
Baxter pursuant to this Agreement.
	 
	 	  7.1.8	 	The Accounts:

	 	(a)	 	have been prepared on bases consistent with
the bases on which the consolidated accounts of the Company
for the year ended 31 December 1998 were prepared;

14

 

	 	(b)	 	have been prepared and audited in
accordance with and comply with the Act and all applicable
accounting standards, principles and practices generally
accepted in the United Kingdom; and
	 
	 	(c)	 	give a true and fair view of the assets,
liabilities and the state of affairs of the Group as at 31
December 1999 and of the consolidated losses of the Group
for the financial year ended on that date.

	 	  7.1.9	 	No circumstances have arisen or so far as the Company is
actually aware are about to arise in which a person is, or would
with the giving of notice, lapse of time or both become, entitled to
require repayment of a Group Company’s borrowing or indebtedness in
the nature of borrowing before its stated maturity or performance of
a guarantee given by a Group Company. No Group Company has received
notice to repay under an agreement relating to borrowing or
indebtedness in the nature of borrowing which is repayable on
demand.
	 
	 	  7.1.10	 	No Group Company and no person for whose acts or defaults any
Group Company is vicariously liable is involved, or has during the
twelve months ending on the date of this Agreement been involved, in
any civil, criminal, arbitration, administrative or other
proceedings in any jurisdiction which, by itself or with other
proceedings, is of material importance in the context of the Group
taken as a whole or may have a significant effect on the financial
position of the Group taken as a whole; and so far as the Company is
actually aware no such civil, criminal, arbitration, administrative
or other proceeding in any jurisdiction is pending or threatened by
or against a Group Company or a person for whose acts or defaults a
Group Company may be vicariously liable.
	 
	 	  7.1.11	 	no Group Company has taken any action nor so far as the Company is
actually aware have any other steps been taken or legal proceedings
started or threatened against any Group Company for its winding up
or dissolution, or for it to enter into any arrangement or
composition for the benefit of creditors, or for the appointment of
a receiver, trustee, administrator, administrative receiver or
similar officer of it or any of its properties, revenues or assets;
	 
	 	  7.1.12	 	subject only to the Resolutions being passed by the shareholders
of the Company, the Company and the Directors have power under the
Company’s memorandum and articles or pursuant to resolutions duly
passed in general meeting (such resolutions not having lapsed or
been revoked) to allot and issue the Subscription Shares in the
manner proposed by this Agreement and to enter into, perform and
complete all the arrangements contemplated by this Agreement in
accordance with its terms without any further sanction or consent
and have taken all such actions as may be necessary to approve the
execution and delivery of this Agreement by the Company and to
approve the performance of the arrangements contemplated herein and
this Agreement will when executed on behalf of the Company
constitute a legally binding obligation of the Company;
	 
	 	  7.1.13	 	in the case of each document (“Prior Document”) issued and each
announcement (“Prior Announcement”) made to the public or the press
or the London Stock Exchange or the UK Listing Authority by or on
behalf of the Company since 31 December 1999 and attached hereto as
Appendix 1 (but save as disclosed in any such document or
announcement issued or made after 

15

 

	 	 	 	the publication of such Prior
Document or Prior Announcement) all statements of fact contained
therein which are material in the context of the Subscription were,
when made, and remain, true and accurate in all material respects;
	 
	 	  7.1.14	 	save as disclosed in any Prior Documents or Prior Announcements,
since 31 December 1999 the business of the Group has been carried on
in the ordinary and usual course and since such date no material (in
the context of the Group as a whole) acquisition or disposal or
binding agreement to make any material (in the context of the Group
as a whole) acquisition or disposal of any business, company or
material (in the context of the Group as a whole) asset other than
in the ordinary course of business has been made or entered into by
the Group;
	 
	 	  7.1.15	 	the allotment and issue of the Subscription Shares will comply
with the Act, the FSA, the Listing Rules and the rules and
regulations of the London Stock Exchange;
	 
	 	  7.1.16	 	subject only to the Company’s shareholders passing the
Resolutions, neither the creation, allotment or issue of the
Subscription Shares nor their Admission nor the performance of this
Agreement by the Company will infringe any powers or restrictions of
or the terms of any contract legally binding upon the Company or any
member of the Group or the constitutional documents of the Company
or any member of the Group.

	7.2	 	The Company acknowledges that Baxter has entered into this Agreement in
reliance upon the Warranties. The Warranties shall be separate and
independent.
	 
	7.3	 	The Warranties and the Supplemental Warranties when given shall remain in
full force and effect notwithstanding the completion of all matters and
arrangements referred to in or contemplated by this Agreement.
	 
	7.4	 	In the event of a material breach of Warranty at Completion, Baxter shall
be entitled (at its option) to terminate this Agreement in its entirety or
to proceed with the First Subscription. In the event that Baxter elects
to proceed to Completion of the First Subscription notwithstanding the
breach of Warranty, the parties agree that Baxter’s only remedy for breach
of Warranty shall be to claim damages. In the event that Baxter elects to
terminate this Agreement, Baxter shall waive any right it may have to
bring a claim against the Company for breach of Warranty.
	 
	7.5	 	Subject to Clause 7.6, in the event of a material breach of a
Supplemental Warranty at a Subscription Date, Baxter shall be entitled (at
its option) to terminate this Agreement in its entirety or to proceed with
the Subscription. In the event that Baxter elects to proceed to
completion of the Subscription, notwithstanding the breach of Supplemental
Warranty, the parties agree that Baxter’s only remedy for breach of
Supplemental Warranty shall be to claim damages. In the event that Baxter
elects to terminate this Agreement, Baxter shall waive any right it may
have to bring a claim against the Company for breach of Supplemental
Warranty.
	 
	7.6	 	In the event that the Company is in breach of the Warranty set out in
Clause 7.11.3 but has obtained from a lender to a Group Company or the
beneficiary of a guarantee issued by a Group Company a confirmation that
the breach of the terms of the borrowing or guarantee would be remedied by
the relevant Subscription taking place, then Baxter shall have no right to
either terminate the Agreement or to bring a claim for breach of
Supplemental Warranty.

16

 

	7.7	 	The aggregate liability of the Company in respect of all claims for
breach of the Warranties shall not exceed:-

	 	  7.7.1	 	£10,431,880 if the First Subscription is completed; or
	 
	 	  7.7.2	 	£13,909,173.30 if the First and Second Subscriptions are
completed.

	7.8	 	The aggregate liability of the Company in respect of all claims for
breach of the Supplemental Warranties shall not exceed:-

	 	  7.8.1	 	£6,954,586.80 if the Third Subscription is completed; or
	 
	 	  7.8.2	 	£6,954,586.50 if the Fourth Subscription is completed.

	7.9	 	The Company shall have no liability for any claim for breach of the
Warranties unless notice in writing of the claim (stating in reasonable
detail the nature of the claim and, so far as practicable, the amount
claimed) has been given to the Company on or before the later of 30
September 2001 and the date of publication of the Company’s annual
accounts for the year ended 31 December 2000.
	 
	7.10	 	Any claim which has been made against the Company for breach of the
Warranties and which has not been previously satisfied, settled or
withdrawn shall be deemed to have been withdrawn and shall become fully
barred and unenforceable on the expiry of the period of six months
commencing on the date on which notice of the claim was given to the
Company in accordance with Clause 7.9 unless proceedings in respect of the
claim shall have been issued and served on the Company.
	 
	7.11	 	Immediately prior to each Subscription after the First Subscription, the
Company shall be deemed to warrant to Baxter that:

	 	  7.11.1	 	neither the allotment nor issue of the Subscription Shares nor
their Admission will breach the terms of or the terms of any
contract legally binding upon the Company or any member of the Group
or the constitutional documents of the Company or any member of the
Group;
	 
	 	  7.11.2	 	the allotment and issue of the Subscription Shares will comply
with the Act, the FSA, the Listing Rules and rules and regulations
of the London Stock Exchange;
	 
	 	  7.11.3	 	neither the Company nor any member of the Group is in material
breach or material default of any Group Company borrowing or
guarantee issued by a Group Company relating to a Group Company
borrowing and no valid demand for repayment has been made in respect
of such borrowing or guarantee.
	 
	 	  7.11.4	 	no order has been made or petition presented or resolution passed
for the winding-up of the Company or any trading subsidiary of the
Company which is material in the context of the Group (a “Major
Subsidiary”) and there being no outstanding petition or order for
winding-up or administration of or appointment of a receiver over
the whole or any part of the undertaking or assets of the Company or
a Major Subsidiary or the appointment of a liquidator and there
being no voluntary arrangement between the Company or a Major
Subsidiary and any of its creditors or any distress or execution or
other process being levied in respect of them or any of them which
remains undischarged.

17

 

	7.12	 	The Company shall have no liability for breach of a Supplemental Warranty
unless notice in writing of the claim (stating in reasonable detail the
nature of the claim and, so far as practicable, the amount claimed) has
been given to the Company on or before the expiry of a period of 9 months
from the relevant Subscription Date.
	 
	7.13	 	Clause 7.10 shall apply mutatis mutandis to claims made against the
Company for breach of a Supplemental Warranty, save that the reference in
Clause 7.10 to “Warranties” shall be deemed to be a reference to
“Supplemental Warranties” and the reference to “Clause 7.9” shall be
deemed to be a reference to “Clause 7.12”.
	 
	8	 	BAXTER’S WARRANTIES
	 
	8.1	 	Baxter represents and warrants to the Company that:-

	 	  8.1.1	 	it has all necessary power and authority to enter into,
perform and complete all the arrangements contemplated by this
Agreement in accordance with its terms without any sanction or
consent and that this Agreement will when entered into by Baxter
constitute a legally binding obligation of Baxter enforceable in
accordance with its terms;
	 
	 	  8.1.2	 	the execution and delivery of, and the performance by Baxter
of its obligations under, this Agreement will not:

	 	  (i)	 	result in a breach of any provisions of the
bye-laws of Baxter;
	 
	 	  (ii)	 	result in a breach of, or constitute a
default under, any instrument to which Baxter is a party or
by which Baxter is bound; or
	 
	 	  (iii)	 	result in breach of any order, judgment or
decree of any court or governmental agency to which Baxter
is a party or by which Baxter is bound;

	 	  8.1.3	 	it is subscribing for the Subscription Shares for its own
account and not on behalf of any other person;
	 
	 	  8.1.4	 	it is a person falling within Article 11(3) of the Financial
Services Act 1986 (Investment Advertisements) (Exemptions) Order
1996 (SI No. 1586);
	 
	 	  8.1.5	 	it does not have knowledge of any fact or matter which is a
breach of any of the Warranties.

	8.2	 	Baxter acknowledges that the Company has entered into this Agreement in
reliance upon the representations and warranties in Clause 8.1. The
Warranties shall be separate and independent.
	 
	8.3	 	Clause 8.1 shall remain in full force and effect notwithstanding the
completion of all matters and arrangements referred to in or contemplated
by this Agreement.
	 
	8.4	 	Baxter confirms to the Company as at the date thereof that save for the
Warranties, in connection with the Subscription by it for Subscription
Shares, neither the Company nor any other person whatsoever (including any
employee, director, officer or agent of the Company or any adviser to any
of them) has made and nor do they hereby make any representation, warranty
or undertaking in respect of any matter or thing (including, without
limitation, the Subscription Shares being subscribed, the Company or its
assets 

18

 

	 	 	and liabilities) and it has not relied on any representation,
warranty or undertaking or any information save for the Warranties in
subscribing for Subscription Shares pursuant to this Agreement.
	 
	9	 	CHANGE OF CONTROL
	 
	9.1	 	On the occurrence of a Change of Control of the Company, Baxter may
within 60 days of the Change of Control occurring by written notice to the
Company immediately terminate this Agreement and if the Subscription of
any Subscription Shares has not yet been completed such Subscriptions will
not be completed.
	 
	9.2	 	If Baxter elects pursuant to clause 9.1. to complete all outstanding
Subscriptions early, then the Company and Baxter will complete all
outstanding Subscriptions within 15
business days of receipt by the Company of the notice referred to in
clause 9.1. In the event that the Company is required by the Listing
Rules to issue listing particulars in relation to the Subscription, the
Subscription Date shall be the first business day following the
publication of the listing particulars by the Company
	 
	9.3	 	If Baxter does not exercise any of the options in clause 9.1 within the
60 day period mentioned in that clause, this Agreement shall continue in
full force and effect unamended.
	 
	10	 	FURTHER TERMS
	 
	10.1	 	The Company hereby undertakes to Baxter that for so long as any of the
Subscriptions remain outstanding:

	 	  10.1.1	 	it shall at all times maintain available for issue a number of
unissued Ordinary Shares sufficient to satisfy the outstanding
Subscriptions;
	 
	 	  10.1.2	 	it will procure that the Board has at all times all necessary
authorities to allot and issue such number of Ordinary Shares as are
necessary to satisfy the outstanding Subscriptions on a
non-preemptive basis;
	 
	 	  10.1.3	 	it will not issue new Ordinary Shares directly to any Healthcare
Organisation so that the Healthcare Organisation would, as a result
of such allotment, own directly or indirectly 10% or more of the
enlarged issued ordinary share capital of the Company. In the event
that the Company issues any new Ordinary Shares directly to any
Healthcare Organisation, it will only do so on the basis that such
Healthcare Organisation undertakes that it will not acquire further
Ordinary Shares that would result in the Healthcare Organisation
owning directly or indirectly 10% or more of the enlarged issued
ordinary share capital of the Company. This Clause shall not
restrict the Company issuing new Ordinary Shares to a Healthcare
Organisation as a result of such Healthcare Organisation taking up
its rights as a shareholder to a pre-emptive offer of the Ordinary
Shares to the Company’s shareholders generally;
	 
	 	  10.1.4	 	notwithstanding Clause 5.1.1, it will use reasonable endeavours to
permit Baxter to participate on a pro rata basis in any on market
purchase of Ordinary Shares by the Company.

	10.2	 	If Ordinary Shares are consolidated into Ordinary Shares of a higher
nominal value than 10p or subdivided into Ordinary Shares of a smaller
nominal value than 10p, the number 

19

 

	 	 	of Subscription Shares not then
subscribed for by Baxter and/or the Subscription Price in respect of such
Subscription Shares shall be adjusted so that the aggregate nominal value
of such Subscription Shares remains unchanged and the Subscription Price
remains unchanged.
	 
	10.3	 	In the event of any dispute as to any adjustment pursuant to Clause 10.2,
either party may refer the matter to the Company’s auditors (acting as
experts) whose decision on the matter will (in the absence of manifest
error) be final and binding upon the parties.
	 
	10.4	 	If the Company undertakes a Qualifying Rights Issue, Baxter undertakes
and agrees to subscribe in full for all of its pre-emptive entitlement to
new Ordinary Shares pursuant to such Qualifying Rights Issue.
	 
	 	 	The Company shall, prior to publication of a prospectus or listing
particulars, relating to a Qualifying Rights Issue give Baxter at least
twenty-one business days notice prior to such publication date (the
“Impact Date”). Baxter shall within five business days prior to the
Impact Date confirm in writing to the Company whether or not Baxter will
at the next Subscription Date deduct from the relevant Subscription
Amount the sum to be subscribed for by Baxter and taking up its pro rata
entitlement pursuant to the Qualifying Rights Issue. In the event that
Baxter fails to notify the Company of its intentions pursuant to this
Clause 10.4, Baxter shall waive its right to deduct the Rights Issue
Amount from the relevant Subscription Amount.
	 
	11	 	COSTS
	 
	 	 	Each party shall pay its own costs of and incidental to the negotiation,
preparation, execution and implementation by it of this Agreement.
	 
	12	 	FURTHER ASSURANCE
	 
	 	 	Each party shall (at its own expense) do and execute or procure to be
done and executed all necessary acts, deeds, documents and things within
their power as may be reasonably necessary to give effect to this
Agreement.
	 
	13	 	GENERAL
	 
	13.1	 	This Agreement constitutes the entire agreement between the parties
relating to the subject matter of this Agreement and supersedes all
previous such agreements.
	 
	13.2	 	No variation of this Agreement shall be valid unless it is in writing and
signed by or on behalf of each of the parties.
	 
	13.3	 	The failure to exercise or delay in exercising a right or remedy under
this Agreement shall not constitute a waiver of the right or remedy or a
waiver of any other rights or remedies and no single or partial exercise
of any right or remedy under this Agreement shall prevent any further
exercise or the right or remedy or the exercise of any other right or
remedy.
	 
	13.4	 	Except as expressly provided in this Agreement the rights and remedies
contained in this Agreement are cumulative and not exclusive of any rights
or remedies provided by law.

20

 

	13.5	 	Any date, time or period referred to in this Agreement shall be of the
essence except only to the extent to which the parties agree in writing to
vary any date, time or period in which event the varied date, time or
period shall be of the essence.
	 
	14	 	ASSIGNMENT AND THIRD PARTY RIGHTS
	 
	14.1	 	No party shall assign or transfer or purport to assign or transfer any of
its rights or obligations under this Agreement provided that Baxter may
assign all of its rights under this Agreement to any member of the Baxter
Group on condition that should that company leave the Baxter Group the
rights will be assigned back to Baxter.
	 
	14.2	 	A person who is not a party to this Agreement has no right under the
Contracts (Rights of Third Parties) Act 1999 to enforce any term of this
Agreement but this does not affect any right or remedy of a third party
which exists or is available apart from that Act.
	 
	15 	 	NOTICES
	 
	15.1	 	Any notice or other communication under or in connection with this
Agreement shall be in writing in the English language and shall be
delivered personally or sent by first class post pre-paid recorded
delivery (and by air mail if overseas) or by telefax to the party due to
receive the same at its address as set out in this Agreement or to such
other address, as either party may specify by notice in writing to the
other.
	 
	15.2	 	In the absence of evidence of earlier receipt, any notice or other
communication shall be deemed to have been duly given:

	 	  15.2.1	 	if delivered personally, when left at the address referred to in Clause 15.1;
	 
	 	  15.2.2	 	if sent by mail other than air mail, two days after posting it;
	 
	 	  15.2.3	 	if sent by air mail, six days after posting it;
	 
	 	  15.2.4	 	if sent by telefax, on completion of its transmission.

	15.3	 	For the avoidance of doubt, notice given under this Agreement shall not
be validly served if sent by e-mail.
	 
	16	 	GOVERNING LAW AND JURISDICTION
	 
	16.1	 	This Agreement is governed by, and shall be construed in accordance with,
English law.
	 
	16.2	 	The courts of England shall have exclusive jurisdiction to hear and
determine any suit, action or proceedings, and to settle any disputes,
which may arise out of or in connection with this Agreement (respectively,
“Proceedings” and “Disputes”) and, for such purposes, the parties
irrevocably submit to the jurisdiction of the courts of England.
	 
	16.3	 	Each party irrevocably waives any objection which it might at any time
have to the courts of England being nominated as the forum to hear and
determine any Proceedings and to settle any Disputes and agrees not to
claim that the courts of England are not a convenient or appropriate
forum.
	 
	16.4	 	Each party agrees that the process by which any Proceedings are begun in
England may be served

21

 

	 	 (i)	 	on the Company by being delivered in accordance with Clause
15 its address as set out in this Agreement. Nothing contained in
this Clause 15.4 shall affect the right to serve process in any
other manner permitted by law;
	 
	 	 (ii)	 	on Baxter, by being delivered to Baxter Healthcare Limited,
Caxton Way, Thetford, IP24 3SE marked for the attention of the
Company Secretary.

	17	 	COUNTERPARTS
	 
	 	 	This Agreement may be executed in any number of counterparts each of
which when executed and delivered shall be an original, but all the
counterparts together shall constitute one and the same instrument.

AS WITNESS the hands of the parties or their duly authorised representatives
the day and year first above written.

22

 

	 	 	 
	SIGNED by	 	)
	
	
	
	

	for and on behalf of PEPTIDE	 	)
	
	
	
	

	THERAPEUTICS GROUP plc	 	)
	
	
	
	

	in the presence of:	 	)
	 
	SIGNED by	 	)
	
	
	
	

	for and on behalf of BAXTER	 	)
	
	
	
	

	INTERNATIONAL INC.	 	)
	
	
	
	

	in the presence of:	 	)

23exv4w15

 

Exhibit 4.15

Confidential treatment has been requested for certain portions of
this exhibit. The copy filed herewith omits the information subject
to the confidential treatment request. Omissions are designated as
“[*****]” or “*****”. A complete
version of this exhibit has been filed separately with the Commission
pursuant to an application for confidential treatment under
Rule 24b-2 promulgated under the Securities Exchange Act of
1934, as amended.

BAXTER AG

AND

ORAVAX INC.

VERO CELL KNOW-HOW LICENCE

 

 

CONTENTS

	 	 	 	 	 	 	 	 	 
	Clause	 	 	 	Page
	
	 	 	 	

	 	1	 	 	INTERPRETATION
	 	 	1	 
	 	2	 	 	GRANT
	 	 	3	 
	 	3	 	 	PAYMENTS
	 	 	3	 
	 	4	 	 	PROVISION OF KNOW-HOW AND BIOLOGIC MATERIAL
	 	 	5	 
	 	5	 	 	OBLIGATIONS OF THE LICENSEE
	 	 	6	 
	 	6	 	 	IMPROVEMENTS
	 	 	6	 
	 	7	 	 	INTELLECTUAL PROPERTY RIGHTS
	 	 	7	 
	 	8	 	 	TECHNICAL ASSISTANCE
	 	 	7	 
	 	9	 	 	INFRINGEMENT
	 	 	8	 
	 	10	 	 	CONFIDENTIALITY
	 	 	9	 
	 	11	 	 	TERM AND TERMINATION
	 	 	10	 
	 	12	 	 	CONSEQUENCES OF TERMINATION
	 	 	11	 
	 	13	 	 	ADEQUACY OF DAMAGES
	 	 	12	 
	 	14	 	 	EXCLUSION OF CONSEQUENTIAL LOSS
	 	 	12	 
	 	15	 	 	ASSIGNMENT AND SUB-LICENSING
	 	 	12	 
	 	16	 	 	GENERAL
	 	 	13	 
	 	17	 	 	NOTICES
	 	 	13	 
	 	18	 	 	GOVERNING LAW
	 	 	14	 
	 	19	 	 	JURISDICTION
	 	 	14	 

 

 

THIS AGREEMENT is made on              2000

BETWEEN:

	(1)	 	BAXTER AG, a company incorporated in              (registered
no.             ),
whose registered office is
at             (the
“Licensor”); and
	 
	(2)	 	ORAVAX INC., a company organised and existing under the laws of the State
of Delaware whose principal place of business is at 38 Sidney Street,
Cambridge, Massachusetts 02139, USA (the “Licensee”).

INTRODUCTION:

	(A)	 	The Licensor is possessed of the Know-How.
	 
	(B)	 	The Licensor has agreed to license the Licensee to use the Know-How upon
the terms and conditions of this Agreement.

THE PARTIES AGREE as follows:

	1	 	INTERPRETATION
	 
	1.1	 	In this Agreement:
	 
	 	 	“Affiliate” means, in relation to a person, (i) any corporation or
business entity fifty per cent (50%) or more of the voting stock of which
is and continues to be owned directly or indirectly by that person; (ii)
any corporation or business entity which directly or indirectly owns fifty
per cent (50%) or more of the voting stock of that person; or (iii) any
corporation or business entity under the direct or indirect control of
such corporation or business entity described in (i) or (ii);
	 
	 	 	“Baxter Person” means (i) Baxter, (ii) any member of the Baxter Group and
(iii) any person or persons with whom Baxter or any member of the Baxter
Group are acting in concert in relation to the Licensee but (for the
avoidance of doubt) will not include employees of Baxter Group other than
those with responsibilities in relation to Baxter’s relationship with the
Licensee pursuant to this Agreement;
	 
	 	 	“Biologic Material” means a working cell bank of Vero Cell Line;
	 
	 	 	“Change of Control” means the acquisition by any person or persons (other
than a Baxter Person or any Baxter Persons and any Baxter Persons in a
concert party with non-Baxter Persons shall be disregarded in determining
whether there has been a Change of Control) who in relation to each other
are acting in concert of such number of shares in Peptide Therapeutics
Group plc which, when added to any shares in Peptide Therapeutics Group
plc already held or controlled by them, confer in aggregate more than
fifty per cent (50%) of the total voting rights conferred by all the
shares in the capital of Peptide Therapeutics Group plc for the time being
in issue and having the right to attend and vote at general meetings of
Peptide Therapeutics Group plc;
	 
	 	 	“Field of Use” means the development and commercialisation of the
Products;

1

 

	 	 	“Improvement” means any improvement, modification or alteration to the
Products or the Know-How, including any such improvement, modification or
alteration of the Biologic Material, protein free culture media or
procedure for affecting the infection of the Vero Cell Lines with the
Japanese Encephalitis or West Nile viruses; provided that such Improvement
shall not include any improvement, modification or alteration of the
Japanese Encephalitis or West Nile viruses owned or used by Licensee to
manufacture the Products;
	 
	 	 	“Japanese Encephalitis Vaccine” means a vaccine either therapeutically or
prophylactically active against Japanese encephalitis viruses produced
using Vero Cell Line;
	 
	 	 	“Know-How” means Biologic Material and technical information concerning
the use of Biologic Material for the making, using and/or selling the
Products, which is owned, licensed to or otherwise held and known by the
Licensor with the right to license or sub-license such information;
	 
	 	 	“Net Multivalent Price” means the net average selling price in any given
quarter of any multivalent vaccines containing a Product sold by the
Licensee, being the gross invoice price before deduction of any discounts
or allowances given and after deduction of any charges for freight or
insurance and any tax or duty charged to the purchaser;
	 
	 	 	“Net Product Price” means the net average selling price in any given
quarter of a Product sold by the Licensee, being the gross invoice price
before deduction of any discounts or allowances given and after deduction
of any charges for freight or insurance and any tax or duty charged to the
purchaser;
	 
	 	 	“Products” means West Nile Vaccine and Japanese Encephalitis Vaccine
produced using the Biologic Material according to the Know-How provided by
the Licensor;
	 
	 	 	“Termination Date” means the date upon which this Agreement is terminated
under the provisions of this Agreement;
	 
	 	 	“Territory” means the world;
	 
	 	 	“West Nile Vaccine” means a vaccine either therapeutically or
prophylactically active against West Nile viruses produced using Vero Cell
Line;
	 
	 	 	“Vero Cell Line” means African Green Monkey (Ceropithecus aethiops) kidney
vero cells supplied by the Licensor including cells at passage #133
derived from cells obtained from the ATC at passage #124 under the
designation ATCC CCL81; and
	 
	 	 	“Year” means each consecutive period of twelve (12) months during the
currency of this Agreement, beginning on the Commencement Date and each
anniversary of the Commencement Date.
	 
	1.2	 	In this Agreement, a reference to:

	 	1.21	 	a person includes a reference to a corporation, body
corporate, association or partnership;

2

 

	 	1.2.2	 	a person includes a reference to that person’s legal
personal representatives, successors and permitted assigns; and
	 
	 	1.2.3	 	a clause or schedule, unless the context otherwise requires,
is a reference to a clause of or schedule to this Agreement.

	1.3	 	The headings in this Agreement do not affect its interpretation.
	 
	2	 	GRANT
	 
	2.1	 	The Licensor grants to the Licensee, with a right to grant sub-licenses
only to Affiliates, the sole right and licence within the Field of Use to
use the Know-How, and any Improvements, to manufacture, use and sell the
Products in the Territory for the duration of this Agreement. The
Licensee agrees further not to disclose such Know How to any third party.
	 
	2.2	 	The Licensee shall not use the Know-How for any purpose other than that
permitted under clause 2.1. For the avoidance of doubt, the Licensee
shall not use the Know-How in connection with any product other than the
Products or any cell line other than the Vero Cell Line.
	 
	2.3	 	Notwithstanding the provisions of clause 2.1, the Licensor shall itself
be entitled to use the Know-How for any purpose, including (but without
limitation) for the purposes of manufacturing, using and/or selling
vaccines similar to or which compete with the Products.
	 
	2.4	 	The Licensee agrees that it will only utilize the Know-How and/or the
Biologic Material for manufacturing and developing either a West Nile
Vaccine or Japanese Encephalitis Vaccine in serum-free cell culture media
or serum-free and protein-free cell culture media.
	 
	2.5	 	The Licensee shall use reasonable efforts to promote and extend the sale
of the Products including the allocation of sufficient resources, capital,
equipment, materials and labour to make the Products readily available
throughout the Territory, having regard to the Licensee’s resources, the
size and accessibility of each market, to all potential purchasers and
shall provide such advertising and promotion as may reasonably be expected
to bring the Products to the attention of as many such purchasers as
possible.
	 
	2.6	 	The Licensee shall indemnify the Licensor on demand against each loss,
liability and cost which the Licensor incurs arising out of the Licensee’s
use of the Know-How (including, without limitation, each loss, liability
and cost reasonably incurred by the Licensor as a result of defending or
settling a claim alleging such a liability.
	 
	3	 	PAYMENTS
	 
	3.1	 	The Licensee shall pay to the Licensor a royalty calculated as follows:

	 	3.1.1	 	in the case of a monovalent vaccine, [ * * * * ]; and
	 
	 	3.1.2	 	in the case of a multivalent vaccine, [ * * * * ],

3

 

	 	 	 	in each case sold or otherwise disposed of by the Licensee.
	 
	 	 	 	For the purposes of this clause, “component proportion” means:

	 	(a)	 	[ * * * * ]; and
	 
	 	(b)	 	[ * * * * ].

	 	 	 	Worked example of (a)
	 
	 	 	 	[ * * * * ]
	 
	 	 	 	Worked example of (b)
	 
	 	 	 	[ * * * * ]

	3.2	 	The Licensee shall within thirty (30) days after the last days of March,
June, September and December in each Year and three (3) months after the
Termination Date send to the Licensor a statement showing the quantity,
description and Net Product Price or Net Multivalent Price (as
appropriate) of the Products sold by the Licensee during the three (3)
months (or such shorter period as may be applicable) ending on that day
and showing the amount of royalty due under this Agreement in respect of
the relevant period. With each statement the Licensee shall send a
remittance to the Licensor for the total aggregate amount of royalty shown
by that statement to be due.
	 
	3.3	 	The Licensee shall keep proper records and books of account showing the
quantity, description and Net Product Prices or Net Multivalent Price (as
appropriate) of the Products sold under this Agreement. These records and
books of accounts shall be, so far as practicable, kept separate from any
books and records not relating solely to the Products and shall be open at
all times to inspection on behalf of the Licensor by an independent
accounting firm to be agreed between the parties, or, in the event of the
parties failing to agree, by an independent accounting firm nominated at
the request of either party by the then President of the US Institute of
Public Accountants.
	 
	3.4	 	The royalty payable to the Licensor in respect of a sale of the Products
by the Licensee to an Affiliate or to a third party otherwise associated
with or acting in concert with the Licensee shall be that which would be
payable on a sale of the Products at full market value payable by a
purchaser at arm’s length unless the price actually paid by the purchaser
exceeds such market value and Net Product Price or Net Multivalent Price
(as appropriate) shall be construed accordingly.
	 
	3.5	 	All sums payable under this Agreement shall be paid in US $. Any Net
Product Price or Net Multivalent Price (as appropriate) not expressed in
US $ shall be converted to US $ at the open middle market spot rate of
exchange in London as published in the Financial Times (or, failing that,
such other published source as the Licensor may reasonably select) on the
last day of the relevant period referred to in clause 3.2.
	 
	3.6	 	All amounts payable by the Licensee under this Agreement shall be paid in
full without any withholding or deduction, whether on account of any
set-off, taxes, duties, levies or charges or otherwise, unless the
Licensee is required by law or by a ruling of a tax

4

 

	 	 	authority to make such
deduction or withholding. The parties shall take all reasonable action as
may be necessary at their own expense to ensure that royalties may be paid
under this Agreement without any such deductions or withholding.
	 
	4	 	PROVISION OF KNOW-HOW AND BIOLOGIC MATERIAL
	 
	4.1	 	The Licensor shall forthwith disclose to the Licensee all the Know-How in
the possession of the Licensor which is in documentary form. Licensee
agrees that all such Know-How is confidential and proprietary to Licensor.
	 
	4.2	 	Neither party shall be obliged to disclose any information to the other
if it is prevented from doing so by an obligation to another person
provided however that the parties agree to make all reasonable efforts to
obtain consent to disclose such information. If that obligation is not
absolute but is conditional upon the observance of conditions there shall
be no obligation to make such disclosure except against an undertaking to
observe such conditions. Each party warrants and represents to the other
that it is not aware of any requirement for it to obtain the consent of a
third party before disclosing any such information to the other.
	 
	4.3	 	The Licensor shall promptly after the date of this Agreement provide the
Licensee with a sufficient quantity of Biologic Material for it to
commence the development of the Products. Thereafter during the term of
this Agreement the Licensor shall, subject to availability and reasonable
notice from Licensee, provide the Licensee with such further Biologic
Material as the Licensee may from time to time request. All Know-How,
including, but without limitation, all such Biologic Material, shall
remain the property of the Licensor. For the avoidance of doubt, the
master cell bank of Vero Cell Line from which the Licensor produces the
Biologic Material which it supplies to the Licensee shall remain the
property of and in the possession and control of the Licensor. The
Licensee shall retain ownership of those West Nile and Japanese
encephalitis virus strains which it owns at the date of this Agreement or,
in the future, develops, and no licence in respect thereof is granted to
the Licensor under this Agreement.
	 
	4.4	 	Except as required by a competent regulatory authority, and then subject
to consulting with the Licensor, the Licensee shall not investigate,
analyse, reverse engineer or make any other attempts to gain an
understanding of the composition of the Biologic Material, provided that the provisions of clause 10
shall apply to any such understanding gained in the
course of complying with a request of a competent
regulatory authority.
	 
	5	 	OBLIGATIONS OF THE LICENSEE
	 
	5.1	 	The Licensee shall comply with all applicable laws, rules, regulations
and orders applicable to the manufacture, sale and use of the Products.
	 
	5.2	 	The Licensee shall indemnify the Licensor against all losses, liabilities
and costs which the Licensor may incur arising from or in connection with
the Licensee’s breach of any its obligations under this clause.
	 
	5.3	 	If the Licensor becomes aware of a matter which might give rise to a
claim under the indemnity given to it in clause 5.2, it shall as soon as
practicable notify the Licensee of

5

 

	 	 	the matter, stating in reasonable
detail the nature of the matter and, if practicable the amount claimed.
	 
	5.4	 	The Licensee shall have the conduct of the defence, settlement,
compromise, counterclaim and any third party proceedings in respect of any
such claims (“Conduct”) provided that the Licensee shall keep the Licensor
regularly informed as to the conduct thereof.
	 
	5.5	 	The Licensee may not admit liability in respect of or settle any such
proceedings without first obtaining the Licensor’s written consent.
Should the Licensor withhold such consent, the Licensee shall thereupon be
entitled to return the Conduct to the Licensor and, upon that return,
shall be released from its obligation under clause 5.2 to indemnify the
Licensor in respect of the matter the Conduct of which the Licensee is
returning to the Licensor, who shall then be responsible for all costs
reasonably incurred by the Licensee in the course of the Conduct.
	 
	6	 	IMPROVEMENTS
	 
	6.1	 	If the Licensee makes or acquires any Improvement it shall promptly
notify the Licensor in writing giving details of the Improvement and shall
provide to the Licensor free of charge such information or explanations as
the Licensor may reasonably require to be able legally and effectively to
utilise the Improvement. The Licensee hereby grants to the Licensor a
non-exclusive worldwide royalty-free licence (with the right to
sub-license Affiliates and, with the prior written consent of the
Licensee, to license third parties, provided however that such consent
shall not be required where the use of an Improvement of the Licensee is
necessary to utilise an improvement of the Licensor) to use the
Improvements disclosed by the Licensee under this Agreement.
	 
	6.2	 	If the Licensor makes or acquires any Improvement, it shall promptly
notify the Licensee in writing giving details of the Improvement and shall
provide the Licensee with such information or explanations at no
additional charge as the Licensee may
reasonably require to be able legally and effectively to utilise the Improvement and any such
Improvement shall be deemed Know-How and subject to the terms and conditions of this Agreement.
	 
	7	 	INTELLECTUAL PROPERTY RIGHTS
	 
	7.1	 	The Licensor warrants and represents to the Licensee that the Licensor:

	 	7.1.1	 	owns the Know-How;
	 
	 	7.1.2	 	has the right to grant to the Licensee the rights and
licences hereby granted or agreed to be granted;
	 
	 	7.1.3	 	has not, at the date of this Agreement, received notice of
any third party claims alleging that the Licensor’s use of the Vero
Cell Line or the Know-How infringes any third party right; and

6

 

	 	7.1.4	 	has not granted and will not grant or purport to grant any
other licences, rights, assignments over or relating to the Know-How
in the Field of Use during the term of this Agreement.

	7.2	 	The Licensor does not warrant or represent that the Know-How:

	 	7.2.1	 	will enable specific results to be obtained;
	 
	 	7.2.2	 	is comprehensive within its field;
	 
	 	7.2.3	 	are suitable for the Licensee’s purposes;
	 
	 	7.2.4	 	does not infringe the rights of any third party; or
	 
	 	7.2.5	 	that the Know-How will not cause any loss, damage or injury when used.

	8	 	TECHNICAL ASSISTANCE
	 
	 	 	During the term of this Agreement the Licensor shall, as and when
reasonably requested by the Licensee, provide such technical assistance
and advice as the Licensee reasonably requires and the Licensor is in a
position to provide in connection with the development of the Products
and, for any technical assistance and advice given in excess of twenty
(20) working days, the Licensee shall reimburse the Licensor all the
Licensor’s employment costs, travel, subsistence, out of pocket and other
expenses attributable to the provision of such advice and assistance. The
Licensor’s obligation to provide such technical assistance shall be at
it’s reasonable discretion and a failure to provide the same at the
specific time so requested by the Licensee, if the Licensor provides the
Licensee with prior notice of its inability to do so, shall not constitute
a breach of this Agreement.
	 
	9	 	INFRINGEMENT
	 
	9.1	 	The Licensee shall promptly give the Licensor notice in writing in the
event that it becomes aware of:

	 	9.1.1	 	any infringement or suspected infringement of the Know-How
or any patents owned by the Licensor; and
	 
	 	9.1.2	 	any claim that any Product or the manufacture, use or sale
of any Product infringes the rights of any third party.

	9.2	 	In the case of any matter falling within clause 9.1.1:

	 	9.2.1	 	Licensor shall have the absolute and sole discretion
determine what action if any shall be taken in respect of such
matter;
	 
	 	9.2.2	 	Licensor shall have sole control over and shall conduct any
such action as it shall deem necessary in pursuance of clause 9.2.1;
and

7

 

	 	9.2.3	 	Licensor shall pay all costs in connection with such action
and shall be entitled to all damages and other sums which may be
paid or awarded as a result of any such action.

	9.3	 	In the case of any matter falling within clause 9.1.2:

	 	9.3.1	 	the Licensor and the Licensee shall consult to decide
whether such alleged infringement involves the use of the Know-How
or Biologic Material provided to Licensee by Licensor under this
Agreement;
	 
	 	9.3.2	 	if the parties determine that such alleged infringement
involves the use of Know-How or Biologic Material then they shall
consult to determine what steps may be taken to handle such
allegations, including steps to alter the use of such Know-How or
Biologic Material and the proportions in which they shall share the
cost of such steps and any damages and other sums which may be
awarded in their favour or against them;
	 
	 	9.3.3	 	failing agreement between the parties under clause 9.3.1 or
9.3.2, either party (but in the case of the Licensee, only with the
prior written consent (such consent not to be unreasonably withheld
or delayed) of the Licensor) shall be entitled to take all such
action as it shall consider to be necessary or appropriate at its
own expense to defend such claim and shall be entitled and subject
to all damages and other sums which may be recovered or awarded
against it as a result of any such action; provided that neither
party shall take any action that compromises the other party’s
rights, including any action taken by Licensee which could
compromise Licensor’s rights to use Know-How or Biologic Material
without the written consent and agreement of the other.

	9.4	 	Each party shall, at the request and expense of the other, provide all
reasonable assistance to the other (including but not limited to the use
of its name in or being joined as a party to proceedings) in connection
with any action to be taken by the other party pursuant to this clause.
	 
	9.5	 	The Licensor hereby undertakes to the Licensee that, in the event of any
process employed by the Licensee in the manufacture of the Products
infringing a patent which the Licensor owns or controls, the Licensor
covenants not to sue Licensee, or any Affiliate to which it has granted a
sub-licence under the terms of this Agreement in respect of such
infringement provided however that this covenant not to sue shall only
apply to the Licensee and any such Affiliate, and shall not be
transferable to any other party.
	 
	10	 	CONFIDENTIALITY
	 
	10.1	 	In this clause 10 “Confidential Information” means any information
disclosed (including, in the case of the Licensor, the Know-How), whether
in writing, orally or by another means and whether directly or indirectly,
by a party (the “Disclosing Party”) to the other party (the “Receiving
Party”) whether before or after the date of this

8

 

	 	 	Agreement including,
without limitation, any information relating to the Disclosing Party’s
business affairs.
	 
	10.2	 	During the term of this Agreement and after termination or expiration of
this Agreement for any reason whatsoever the Receiving Party shall:

	 	10.2.1	 	keep the Confidential Information confidential, separate from all
other information and stored in a manner designed to restrict access
to those persons entitled to such access;
	 
	 	10.2.2	 	not disclose the Confidential Information to any other person
other than with prior written consent of the Disclosing Party or in
accordance with clauses 10.3 and 10.4; and
	 
	 	10.2.3	 	not use the Confidential Information for any purpose other than
the enjoyment of its rights and the performance of its obligations
under this Agreement.

	10.3	 	During the term of this Agreement the Receiving Party may disclose
Confidential Information to those of its employees (a “Recipient”) whom
the Disclosing Party has approved in writing and then only to the extent
that it is reasonably necessary for the purposes of this Agreement.
	 
	10.4	 	Before disclosure of any Confidential Information to a Recipient the
Receiving Party shall procure that the Recipient is made aware of and
complies with the Receiving Party’s obligations of confidentiality under
this Agreement as if the Recipient was a party to this Agreement.
	 
	10.5	 	The Licensee shall, before giving access to any Confidential Information
to any of its employees, first secure that such employees sign an
enforceable confidentiality undertaking on terms at least equivalent to
the Licensee’s obligations hereunder.
	 
	10.6	 	Clauses 10.2 to 10.5 do not apply to Confidential Information which is at
the date of this Agreement, or at any time after that date, becomes
publicly known other than by the Receiving Party’s or a Recipient’s breach
of this Agreement provided however that it shall be the responsibility of
the Licensee to demonstrate to the reasonable satisfaction of the Licensor
that such Confidential Information is publicly known before disclosing it
other than in accordance with the provisions of this clause. Furthermore,
but in the case of the Licensor only, clauses 10.2 to 10.5 do not apply to
any Confidential Information relating to any Improvements. The public
availability of a general description of any information contained within
the Confidential Information does not release the Receiving Party from its
obligation to maintain the confidentiality of more specific descriptions
of such information which are provided by the Disclosing Party.
	 
	10.7	 	Should the Licensee be obliged by a competent regulatory authority to
disclose any Confidential Information to that authority, the Licensee
shall first notify the Licensor and allow the Licensor a reasonable period
of time either to contest such disclosure or to provide such disclosure
under suitable confidentiality restrictions, failing which the

9

 

	 	 	Licensee
shall be free to disclose the Confidential Information requested by that
authority. In any event the Licensee shall advise that authority of the
confidential nature of any Know-How and Confidential Information so
disclosed.
	 
	11	 	TERM AND TERMINATION
	 
	11.1	 	This Agreement shall come into force on the date first set out above and,
unless terminated at an earlier date pursuant to this clause 11, shall
remain in full force and effect.
	 
	11.2	 	Either party (the “Initiating Party”) may terminate this Agreement with
immediate effect by written notice to the other party (the “Breaching
Party”) on or at any time after the occurrence of an event specified in
clause 11.3 in relation to the Breaching Party.
	 
	11.3	 	The events are:

	 	11.3.1	 	the Breaching Party being in material breach of any of its
obligations under this Agreement and, if the breach is capable of
remedy, failing to remedy the breach within thirty (30) days
starting on the day after receipt of written notice from the
Initiating Party giving full details of the breach and requiring the
Breaching Party to remedy the breach and stating that a failure to
remedy the breach may give rise to termination under this clause.
For the purposes of this clause 11.3.1 a breach is capable of remedy
if time
is not of the essence in performance of the obligation and if
the Breaching Party can comply with the obligation within the
thirty (30) day period;
	 
	 	11.3.2	 	files in any court, pursuant to any statute of any government in
any country, a petition in bankruptcy or insolvency or for
reorganisation, or for an arrangement or for the appointment of a
receiver or trustee of the party or of its assets; or proposes a
written agreement of composition for extension of its debts; or is
served with an involuntary petition against it, filed in any
insolvency proceeding and such petition is not dismissed within
sixty (60) days after filing thereof; or is subject to any
dissolution or liquidation, or makes a general assignment for the
benefit of its creditors; or is subject to any final order or
debarment which can be expected to have a material adverse effect on
the sale of the Product; and
	 
	 	11.3.3	 	the Licensee agrees that the Know How provided under this
Agreement shall be security for any monetary amounts owed under this
Agreement, and further agrees that the Licensor shall be entitled to
file a notice of a security interest in the Know How for such
amounts owed.

	11.4	 	In the event of any Change of Control of Peptide Therapeutics Group plc
or in the event that the Licensee ceases to be an Affiliate of Peptide
Therapeutics Group plc, the Licensee shall forthwith notify the Licensor
(such disclosure being kept confidential by the Licensor until it becomes
a matter of public knowledge) and this Agreement and any sub-licences
granted to Affiliates by the Licensee shall terminate immediately. In the

10

 

	 	 	event of a Change of Control of an Affiliate to whom the Licensee has
granted a sub-licence under the terms of this Agreement, that sub-licence
shall terminate immediately.
	 
	11.5	 	The Licensor may terminate this Agreement with immediate effect by notice
in writing to the Licensee if the Licensee at any time challenges the
enforcement of any of the provisions of this Agreement.
	 
	11.6	 	The Licensor may terminate this Agreement with immediate effect by notice
in writing to the Licensee in the event that the Licensee has used the
Know-How in connection with any product other than the Products, any cell
line other than the Vero Cell Line, or is in breach of clause 2.2.
	 
	12	 	CONSEQUENCES OF TERMINATION
	 
	12.1	 	All rights and obligations of the parties shall cease to have effect
immediately upon termination of this Agreement except that termination
shall not affect:

	 	12.1.1	 	the accrued rights and obligations of the parties at the date of
termination; and
	 
	 	12.1.2	 	the continued existence and validity of the rights and obligations
of the parties under those clauses which are expressed to survive
termination and
any provisions of this Agreement necessary for the
interpretation or enforcement of this Agreement.

	12.2	 	On termination of this Agreement howsoever occasioned:

	 	12.2.1	 	(unless required to do otherwise by law or regulation) at the
Licensor’s option the Licensee shall either forthwith return
promptly to the Licensor or destroy all Know-How which is in
documentary form, and all copies of such material, and any remaining
portion of any Biologic Material provided by the Licensor. In the
case of destruction the Licensee shall promptly provide to the
Licensor a certificate in a form acceptable to the Licensor
certifying that destruction has taken place;
	 
	 	12.2.2	 	the Licensor may at its discretion grant the Licensee sufficient
time to complete any clinical trials being conducted at such time
and/or to sell existing stocks of the Products which were
manufactured using the Know-How including stocks on order and in
transit at that time, which period shall not exceed three (3)
months;
	 
	 	12.2.3	 	the Licensee shall immediately cease the manufacture of Products
using the Know-How and the Cell Banks; and
	 
	 	12.2.4	 	if either party has a claim against the other there shall (in the
absence of express written agreement between the parties in respect
thereof) be no right of set-off against any monies due from the
other party.

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	13	 	ADEQUACY OF DAMAGES
	 
	 	 	The Licensor shall be entitled, upon the breach or threatened breach by
the Licensee of any provision of this Agreement, to obtain a temporary
restraining order and a subsequent injunction prohibiting such breach or
threatened breach (as the case may be) and the Licensee shall not resist
any application by the Licensor for any such order or injunction. The
Licensee acknowledges that monetary damages will not be an adequate remedy
for the Licensor in respect of any such breach or threatened breach (as
the case may be).
	 
	14	 	EXCLUSION OF CONSEQUENTIAL LOSS
	 
	 	 	Neither party is liable to the other, whether for negligence, breach of
contract, misrepresentation or otherwise, for any indirect or
consequential damage suffered by the other party including, without
limitation, loss of profit, goodwill, business opportunity or anticipated
saving.
	 
	15	 	ASSIGNMENT AND SUB-LICENSING
	 
	15.1	 	Neither party shall assign or transfer or purport to assign or transfer
any of its rights or obligations under this Agreement without the prior
written consent of the other party, provided however that the Licensor may
assign any of its rights or obligations
under this Agreement to an Affiliate or to a successor in interest
without the consent of the Licensee.
	 
	15.2	 	The Licensee shall not other than as permitted under the terms of this
Agreement grant or purport to grant any sub-licence or sub-contract of its
rights or obligations under this Agreement.
	 
	16	 	GENERAL
	 
	16.1	 	This Agreement together with any documents referred to in this Agreement
constitute the entire agreement, and supersede any previous agreements,
between the parties relating to the subject matter of this Agreement.
	 
	16.2	 	A variation of this Agreement is valid only if it is in writing and
signed by or on behalf of each party.
	 
	16.3	 	The failure to exercise or delay in exercising a right or remedy provided
by this Agreement or by law does not constitute a waiver of the right or
remedy or a waiver of other rights or remedies. No single or partial
exercise of a right or remedy provided by this Agreement or by law
prevents further exercise of the right or remedy or the exercise of
another right or remedy.
	 
	16.4	 	Except where this Agreement provides otherwise the rights and remedies
contained in this Agreement are cumulative and not exclusive of rights or
remedies provided by law.
	 
	16.5	 	The parties shall interpret each provision of this Agreement, wherever
possible, so as to be valid and effective under applicable law.
Notwithstanding, in the event that a provision (or part thereof) of this
Agreement is, for any reason, held to be invalid,

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	 	 	illegal or unenforceable
in any respect, that provision (or part thereof) shall be ineffective to
the extent of such invalidity, illegality or unenforceability (as the case
may be), but without invalidating the remainder of that provision or any
other provisions of this Agreement, unless such a construction would be
unreasonable.
	 
	16.6	 	This Agreement shall not confer any rights or remedies upon any person or
entity other than the Licensor and the Licensee, and their respective
successors and permitted assigns.
	 
	17	 	NOTICES
	 
	17.1	 	A notice under or in connection with this Agreement (a “Notice”):

	 	17.1.1	 	shall be in writing;
	 
	 	17.1.2	 	shall be in the English language; and
	 
	 	17.1.3	 	shall be delivered personally or sent by first class post pre-paid
recorded delivery (and air mail if overseas) or by fax to the party
due to receive the
Notice at its address set out in this Agreement or to another
address or fax number specified by that party by not less than
seven (7) days’ written notice to the other party received
before the Notice was despatched.

	17.2	 	Unless there is evidence that it was received earlier, a Notice is deemed
given:

	 	17.2.1	 	if delivered personally, when the person delivering the notice
obtains the signature of a person at the address referred to in
clause 17.1;
	 
	 	17.2.2	 	if sent by post, except air mail, two business days after posting
it;
	 
	 	17.2.3	 	if sent by air mail, six business days after posting it; and
	 
	 	17.2.4	 	if sent by fax, when confirmation of its transmission has been
recorded by the sender’s fax machine.
	 
	 	 	 	In this clause “business day” means a day other than a Saturday
or Sunday or a public holiday in either the country where the
Notice is posted or that to which it is sent.

	18	 	GOVERNING LAW
	 
	 	 	This Agreement and all matters arising from or connected with it are
governed by the State of Delaware, USA, law, without regard to its
conflict of law rules.
	 
	19	 	JURISDICTION
	 
	19.1	 	The courts of the State of Delaware, USA, have exclusive jurisdiction to
settle any dispute arising from or connected with this Agreement (a
“Dispute”).

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	19.2	 	The parties agree that the courts of the State of Delaware, USA, are the
most appropriate and convenient courts to settle any Dispute and,
accordingly, that they will not argue to the contrary.

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	EXECUTED by the parties	 	 
	 	 	 
	Signed by	 	
)
	a duly authorised	 	
)
	representative of	 	
)
	BAXTER AG:	 	
)
	 	 	 
	 	 	
Signature
	
	 	 
	 	 	 
	Signed by	 	
)
	a duly authorised	 	
)
	representative of	 	
)
	ORAVAX INC.:	 	
)
	 	 	 
	 	 	
Signature
	
	 	 

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