Document:

Exhibit 10.13

****CONFIDENTIAL PORTIONS OF THIS
AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT****

BIOPHARMACEUTICAL
DEVELOPMENT AND

MANUFACTURING SERVICES AGREEMENT

This
BIOPHARMACEUTICAL DEVELOPMENT AND MANUFACTURING SERVICES AGREEMENT, effective
as of this 16th day of August, 2006 (the “Effective
Date”), between Lpath, Inc., a Delaware corporation (“Customer”),
having its principal place of business at 6335 Ferris Square, San Diego, CA
92121 and LAUREATE PHARMA, INC.,
a Delaware corporation (“Laureate”), having a principal place of
business at 201 College Road East, Princeton, NJ 08540, (each a “Party”,
collectively the “Parties”).

W I T N E S S E T H:

WHEREAS,
Laureate provides a full range of bioprocessing services to the
biopharmaceutical industry, including cell line development, process
development, protein production, cell culture, protein purification,
bioanalytical chemistry, aseptic filling, and QC testing.

WHEREAS,
Customer desires Laureate to perform services in accordance with the terms of
this Agreement and the Scope (as hereinafter defined) related to the technology
transfer and cGMP production and purification of a recombinant monoclonal
antibody, produced by their corresponding cell line, and Laureate desires to
perform such services.

NOW,
THEREFORE, in consideration of the above statements and other good and valuable
consideration, the sufficiency and receipt of which are hereby acknowledged,
the Parties hereto agree as follows:

Section 1.  Definitions. Terms defined elsewhere
in this Agreement shall have the meanings set forth therein for all purposes of
this Agreement unless otherwise specified to the contrary.  The following terms shall have the meaning
set forth below in this Section 1:

1.1           “Affiliate(s)”
for purposes of this Agreement shall mean any person, firm, trust, partnership,
corporation, company, or other entity or combination thereof which directly or
indirectly: (i) controls a Party; (ii) is controlled by a Party; or (iii) is
under common control with a Party.  As
used in this definition, the terms “control” and “controlled”
shall mean ownership of fifty percent (50%) or more (including ownership by
trusts with substantially the same beneficial interests) of the voting and
equity rights of such person, firm, trust, partnership, corporation, company,
or other entity or combination thereof or the power to direct the management of
such person, firm, trust, corporation, or other entity or combination thereof.

1.2           “Agreement”
means this document as signed by the Parties, including the Scope and any
referenced appendix and any amendments and additions to this document.

1.3           “Assumptions”
shall have the meaning as set forth in Section 8(b).

1.4           “Batch”
means a number of vials each filled at the same time with the same Lot or a
group of Lots of Drug Product.

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1.5           “Batch
Record” means a manufacturing record for a Batch generated by Laureate and
approved by Customer made concurrently with the performance of each step of the
production, purification, and aseptic filling process for the Drug Substance
such that successive steps in such processes may be traced.

1.6           “Cell
Line” means the Chinese Hamster Ovary (CHO) cell line that has been
designed and engineered to produce the corresponding monoclonal antibody
product as shown in Appendix 1, supplied by Customer to Laureate,
particulars of which are set out in the Scope.

1.7           “Certificate
of Analysis” means a document containing the name, description, and
intended purpose of a chemical or biological material, instructions for proper
use and storage of the chemical or biological material, and any other technical
information deemed necessary for its proper use.

1.8           “Claim”
shall have the meaning set forth in Section 17(a).

1.9           “Contaminants”
shall have the meaning set forth in Section 17(c).

1.10         “Customer
Confidential Information” means any information, business, technical, or
financial data confidential or proprietary to Customer, including Customer
Know-How, that (i) concerns the Cell Line, Drug Substance, or Drug Product and
is supplied by Customer to Laureate or (ii) directly and solely relates to the
Cell Line, Drug Substance, or Drug Product that becomes known to Laureate
(other than from Customer) during the course of performing the Program (other
than the Process).

1.11         “Customer
Know How” means any and all scientific, technical, and other information
relating to the Cell Line, Drug Substance, or Drug Product known to Customer
from time-to-time, other than Laureate Confidential Information.

1.12         “Drug
Product” means the final dosage form pharmaceutical medicine containing
Drug Substance that Customer or its Affiliates will use for clinical trials.

1.13         “Drug Substance” is
the monoclonal antibody protein, described in Appendix 1, produced and
purified using the Cell Line and the Process.

1.14         “Facility”
means Laureate’s manufacturing facility located at 201 College Road East,
Princeton, NJ 08540.

1.15         “Filled
Product” means vials filled with Drug Product from an identified Lot or
Lots that are in a form ready for release and shipment from the Facility.

1.16         “Filling
Components” means vials, stoppers, and crimps used for an aseptic fill of
the Drug Substance to produce the Drug Product.

1.17         “Good
Manufacturing Practices” or “GMP” or “cGMP” means current
good manufacturing practices, as specified in regulations promulgated from time
to time by the FDA for the manufacture and testing of pharmaceutical
products.  Laureate’s operational quality
standards are defined in internal cGMP policy documents and are based on
Laureate’s current interpretation of cGMP.

1.18         “Laureate
Confidential Information” means any information, business, technical, or
financial data confidential or proprietary to Laureate, including, but not
limited to, Laureate’s production, purification, and aseptic filling process
and techniques and Laureate Know How, not known to Customer and supplied by
Laureate to Customer.

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1.19         “Laureate
Group” shall have the meaning set forth in Section 17(b).

1.20         “Laureate
Know How” means all scientific, technical, and other information
proprietary to Laureate relating to the Process, and includes any information,
enhancements, or improvements generated as a result of performing the Program,
but excluding Customer Confidential Information.

1.21         “Laureate
SOP” means the written standard operating procedures and methods of
Laureate, as the same may be amended, in Laureate’s sole discretion, from time
to time.

1.22         “Loss”
shall have the meaning set forth in Section 17(a).

1.23         “Lot”
means the Drug Substance produced in a single production, which may be
contained in one or more containers thereof.

1.24         “Materials”
means Cell Lines, expression plasmid, raw materials, reference standards,
and/or any other substances to be provided by Customer to Laureate in order to
undertake the Program as specified in the Scope and Appendix 2 to this
Agreement.

1.25         “Media
Fill” means a fill of bacteriological growth media into vials for
validation purposes.

1.26         “Modification”
shall have the meaning set forth in Section 8(a).

1.27         “Person”
means an individual, partnership, corporation, limited liability company, joint
stock company, unincorporated organization or association, trust or joint
venture, or a governmental agency or political subdivision thereof.

1.28         “Process”
means the proprietary production methods and purification processes used by
Laureate for the manufacture of Drug Substance and Drug Product from the Cell
Line, including any modifications, enhancements or improvements that may be
made thereto from time-to-time.

1.29         “Process
Consumables” means media, raw materials, filters, membranes, disposable
analytical test kits, tubing, filling needles, disposable bags, disposable
glass/plasticware, cleaning supplies, and other changeover parts consumed
during the manufacture of Drug Substance or Drug Product.

1.30         “Process
Invention” means any invention or discovery, whether or not patentable,
relating to the Process discovered or developed by or on behalf of Laureate in
connection with the Program, provided that such invention or discovery is then
applicable to an antibody product other than the antibody that is the Drug
Substance.

1.31         “Product-Dedicated
Equipment” means equipment such as chromatography columns and resins and
filters and filter housings that will be used by Laureate solely for the
manufacture of Drug Substance or Drug Products pursuant to this Agreement.

1.32         “Product
Invention” means any invention or discovery, whether or not patentable,
directly and solely related to Drug Product or Drug Substance (but excluding
any Process Invention) discovered or made by or on behalf of Laureate, its
employees, agents, consultants or contractors, exclusively as a result of
performing the Program under this Agreement.

1.33         “Program”
means the services to be performed by Laureate for Customer as described in the
Scope.

1.34         “Quality
Agreement” shall have the meaning set forth in Section 3(c).

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***CONFIDENTIAL
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

1.35         “Scope”
means the detailed scope-of-work documents attached hereto as Appendices 1
and 2.

1.36         “Specification”
means the requirements for tests, analysis, test procedures, and acceptable
test results with which Drug Substance and Materials, other raw materials, and
excipients shall conform as set forth on Appendix 3, as amended from
time-to-time by the Parties.

1.37         “Third
Party” shall mean any Person other than (i) Customer, Laureate, and their
respective Affiliates or (ii) any director, officer, employee, or agent of
Customer, Laureate, or their respective Affiliates.

Section 2.  Scope of Work; Orders for Products.

(a)           A detailed Scope prepared by Laureate
under Customer’s direction and approved by Customer is attached to this
Agreement as Appendices 2 and 3, as may be amended from time to time by
the Parties.  Laureate will perform the
services for Customer in accordance with the Scope. The Scope will specify the
Program design, information desired, estimated duration of the Program, and all
other matters pertinent to completion of the Program, and will be deemed a part
of this Agreement and is incorporated herein by reference.

(b)           Laureate consulted with Customer in
developing the Program design in a manner consistent with Laureate’s current
reasonable understanding of United States (the “US”) regulatory
guidelines.  However, Laureate does not
represent or warrant that the Program and/or the Program results will satisfy
the requirements of any regulatory agencies at the time of submission of
Program results to such agencies. 
Notwithstanding the foregoing, in the event Laureate fails to provide
Customer with any of the following deliverables:

(i)            an optimized producing cell line
derived from the Cell Line, which cell line is stable and produces not less
than *** of Drug Substance in a form suitable for subsequent purification into
bulk, purified Drug Substance and formulation into Drug Product;

(ii)           a scalable, commercially reasonable
bioreactor process for culturing the Cell Line to yield commercially reasonable
quantities of Drug Substance; and

(iii)          a scalable purification process having
a yield of  not less than *** of Drug
Substance initially input into the purification process, which Drug Substance,
once purified in accordance with such process, is suitable for production of
Drug Product,

or, if delivered, any such deliverable is not
accepted by Customer within ten (10) business days after receipt from Laureate,
then either Party will have the right to immediately terminate this Agreement,
upon notice to the other without further obligation to each other.  Customer will be deemed to have accepted any
deliverable provided by Laureate to Customer during the course of the Program
unless Customer rejects such deliverable by so notifying Laureate within ten
(10) business days after receipt of the deliverable from Laureate, and any such
notice will include a reasonably detailed description of the basis for such
rejection.  For purposes of this Section
2(b), “commercially reasonable” shall mean those quantities or yield which the
Parties determine in good faith to be sufficient given the results and
circumstances at the time the deliverables were made.

(c)           Laureate’s performance of the Program
will be based on the technical information provided to Laureate by Customer or
by Third Parties on Customer’s behalf. 
Laureate will use such 

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technical
information to prepare the documentations that will comprise the Program
documents, such as scale up plans, Batch Records and Specifications.  As the Program documents are developed by
Laureate, Laureate will offer Customer the opportunity to review and comment on
such document prior to use by Laureate. 
Such Program documents, and to the extent not included therein, Customer
Confidential Information and Laureate Confidential Information, will form the
sole basis upon which the Program will be implemented.  It is understood and agreed that the
implementation of the Program according to Customer’s instructions and the
Program documents may not result in any specific quantity or quality of Drug
Product or Drug Substance.

(d)           In addition to routine Program
meetings, a senior representative from each Party shall meet on an occasional
basis, but not less than monthly or at such other interval as the Parties agree
in writing, the first meeting being no later than two (2) weeks from the
Effective Date, to review progress of the Program relative to the Scope and to
agree on any necessary changes to the Scope, it being understood, however, than
any change to the Scope or to tasks to be performed pursuant to the Program
must be made pursuant to a Change Order (defined below) as set forth in Section
8.  Laureate’s representative at such
meetings shall be the Program Manager (as defined below in Section 3(b)), and
Customer’s representative will be its Customer Representative (as defined below
in Section 3(b)).   Such meetings shall
be at the Facility or such other location as the Parties agree, although
Customer shall have the right to direct that any such meeting take place
telephonically.

(e)           Customer hereby grants Laureate a
non-exclusive, royalty-free sub-license to use Materials solely to produce Drug
Substance and Drug Product in accordance with carrying out its obligations
under this Agreement.

Section 3.  Program Performance.

(a)           Laureate shall perform the Program as
provided in the Scope, as it may be modified as provided herein, at its
Facility using commercially reasonable efforts and employing staff having
appropriate training and skill necessary to complete the Program, in accordance
with the terms of this Agreement. Laureate will maintain an appropriate, secure
work site for conducting the Program in its Facility.  Laureate will cause its research team
performing the Program to keep detailed contemporaneous records and data in
connection with the Scope, and to prepare reports detailing work to date, which
will be furnished to Customer in a timely manner in accordance with the Scope
or as otherwise agreed between the Parties. 
Any Laureate personnel working on the Program will be obligated under
his/her terms and conditions of employment to (i) assign his/her entire
worldwide right, title, and interest in and to any discovery, invention,
improvement, or technological advance, including any Process Invention or
Product Invention, and any associated intellectual property, to Laureate, and
(ii) comply at all times with the confidentiality obligations imposed on
Laureate under this Agreement.  In the
event of any conflict between the terms and provisions of this document and the
Scope, the terms of this document shall control.

(b)           Laureate will appoint a Laureate
representative (the “Program Manager”) to be responsible for the
completion of the Program by Laureate. 
The Program Manager will coordinate performance of the Program with a
representative designated by Customer (the “Customer Representative”),
which representative shall have responsibility over all matters relating to
performance of the Program on behalf of Customer.  Unless otherwise agreed in the Scope, or
mutually agreed to by the Parties, all communications between Laureate and
Customer regarding the conduct of the Program pursuant to the Scope shall be
addressed to or routed through the Program Manager and Customer Representative.
 Laureate may, at its option and upon
notice to and after consultation with Customer, substitute the Program Manager
during the course of the Program. 
Customer may, at its option and upon notice to Laureate, substitute its
Customer Representative during the course of the Program.

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(c)           Within thirty (30) days after the
Effective Date, or such longer period as the Parties agree in writing, and
prior to Laureate commencing the Program in any event, the Parties will prepare
a detailed document (“Quality Agreement”) specifying the quality and
regulatory procedures and responsibilities of the Parties hereunder with
respect to the manufacture of Drug Substance and Drug Product.

(d)           Customer’s
representatives may visit the Facility at appropriate times consistent with the
Program to observe the progress of the Program or to audit the Program, subject
to the limitations provided in Appendix 6 to this Agreement.

(e)           During
the term of the Program, Laureate will maintain a commercially reasonable
program consistent with standard industry practice and/or applicable cGMP to
regularly monitor and test the Facility, and undertake such precautions and
procedures as are commercially reasonable so as to minimize the risks of
contamination from or to the Facilities and/or Materials as well as any damage
that occur in the event of an incident of contamination.  Upon reasonable prior request and during
business hours, Laureate will provide access to Customer, in accordance with
the terms set forth in Appendix 6, to review documentation detailing the
procedures and testing used by Laureate for such purposes.  In the event Laureate becomes aware of any
incident of contamination at the Facility that could have an impact on the
Program, Laureate will (i) immediately implement such commercially reasonably
steps as are necessary to minimize and mitigate damage to the Facility,
Materials, and Third Party property that may then be present in the Facility
and (ii) so notify Customer within two (2) business days after the date
Laureate becomes aware of the contamination.

Section 4.  Program Materials.

(a)           Customer will provide Laureate with
sufficient amounts of Cell Line, reference standards, or other substances with
which to perform the Program as specified in the Scope, as well as all documentation
and such other data as may be necessary to apprise Laureate of the stability of
the Materials, process characteristics, proper storage, and manufacturing and
safety requirements, including, without limitation, a certificate of analysis
relating to the Cell Line and reference standards as specified in Appendix 4.  Any Product-Dedicated Equipment provided to
Laureate by Customer shall be in good operating condition and free from all
material defects.  Laureate will maintain
within its sole possession and control any Cell Line and biological material
derived therefrom (for example, nucleic acids such as expression vectors, genes
encoding the Drug Substance, etc.), as well as any cell line derived therefrom
by Laureate for production of Drug Substance pursuant to the Program.  Notwithstanding anything to the contrary
herein, except for the purpose of carrying out the activities specified in the
Scope, Laureate will not for its own account or for the benefit of a Third
Party propagate, culture, express, produce, distribute, dispose of, transfer,
or sell any Cell Line or Material for any purpose whatsoever without the prior
written consent of Customer.

(b)           Laureate shall procure the Materials,
Filling Components, and Process Consumables for use in the Program and each
manufacturing run. By written notice to Laureate, Customer may procure certain
Filling Components specified in the Scope, such as media, resins, vials,
overseals, or stoppers.

(c)           Laureate shall identify to Customer
such Product-Dedicated Equipment as may be required, including recommended
vendors, quantities, and such other information as needed by Customer in order
to procure Product-Dedicated Equipment required by Laureate to perform the
Program.  Upon   Customer’s authorization, Laureate may
procure the Product-Dedicated Equipment and pass through the costs to Customer
consistent with Section 7, provided that Customer has approved in writing in
advance Laureate’s purchase thereof. By written notice to Laureate, Customer
may procure certain Product-Dedicated Equipment for use in the Program at its
own expense.

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(d)           Upon completion of the Program, (i)
the Product-Dedicated Equipment will be returned to the Customer, at the
Customer’s expense, and (ii) any remaining samples of the Materials or other
substances, documentation, or data provided to Laureate will be returned to the
Customer or retained by Laureate in compliance with applicable regulatory
requirements or destroyed/disposed of by Laureate under written authorization
from Customer.

Section 5.  Use of Subcontractors.

(a)           Laureate reserves the right to employ
subcontractors from time-to-time to undertake certain activities related to the
Program, provided that in any such event, Customer shall have the right, itself
or through a third party contractor of Customer that is reasonably acceptable
to Laureate, to perform such activities. 
All Laureate subcontractors will be pre-approved by Customer and will be
held under obligations of confidentiality consistent with Section 9 of this
Agreement.  A list of known and approved
subcontractors is provided in Appendix 5 to this Agreement.

(b)           Neither Laureate nor Customer will be
held responsible or liable for the performance of any pre-approved
subcontractor used for the Program or for any costs, expenses, damage or loss
of any nature, whether direct or consequential occasioned by the performance of
or failure to perform the subcontracted services.

(c)           Laureate will not be held responsible
or liable for the performance of any Third Party retained by Customer to
perform services related to the Program, including, without limitation,
distributors, consultants, and testing entities.

Section 6.  Compliance with Government Regulations.

(a)           Laureate will perform the Program in
accordance with the Scope.  Subject to
Section 6(b), below, Laureate will also comply in all material respects with
applicable government regulatory requirements concerning cGMP appropriate to
the Program.

(b)           Should such government regulatory
requirements concerning cGMP and applicable to the Program be changed, Laureate
will make every reasonable effort to comply in all material respects with the
new requirements.  In the event that
compliance with such new regulatory requirements necessitates, in the sole
discretion of Laureate, a change in the Scope or the Program or the cost of the
services provided by Laureate, pursuant to Section 8, below, Laureate will
submit to Customer a revised technical and cost proposal for Customer’s
acceptance.  Unless the Parties agree to
a revised Scope or Program or cost structure, as the case may be, Laureate will
not be obligated to continue to perform the existing Program, and either Party
shall have the right to immediately terminate this Agreement upon notice to the
other Party; thereafter, neither Party shall have any further obligation with
each other.

(c)           In the event of a conflict in
government regulations, Customer will designate, in writing, which regulations
shall be followed by Laureate in its performance of the Program and shall hold
Laureate harmless for following such written designation.

Section 7.  Compensation.

(a)           Subject to the terms of this
Agreement, Laureate shall be paid the development and service fees listed on Appendix
7 (the “ Service Fees”) to perform the services set forth on Appendix
3, which Service Fees shall be subject to increase in accordance with the
provisions of Section 8, and Customer shall pay Laureate such fees in
accordance with the payment schedule set forth on Appendix 7.  Laureate will invoice Customer for Product-Dedicated
Equipment purchased for the Program, provided 

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***CONFIDENTIAL
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

Customer pre-approves such
purchases in writing.  An administrative
fee equal to ten percent (10%) of Laureate’s actual cost of Product Dedicated
Equipment purchased for the Program will be added to Product-Dedicated
Equipment invoices.  Payments are due
thirty (30) days from the date of invoice, except that the Service Fees’
payments are due at the times indicated on Appendix 7.  Late payments are subject to an interest
charge of one percent (1%) per month.

(b)           As *** to have ***of the Drug
Substance and Drug Product paid by Customer, *** with a ***, which *** shall
be  ***. 
The foregoing *** shall not apply to any ***, including, but not limited
to, those ***.

Section 8.  Change Orders.

(a)           The Service Fees are subject to a
number of specific and general assumptions. 
The specific assumptions relate to the Scope and Program design and
objectives, timing, capital expenditure requirements, if any, and other matters
relating to the completion of the Program as set forth in the Scope (the “Program
Assumptions”).  Laureate also assumes
that the Customer will cooperate and perform its obligations under the
Agreement and Scope in a timely manner, that no event outside the control of
Laureate will occur, including, without limitation, the events described in
Section 21, and that there are no material changes during the term of the
Agreement to any applicable laws, rules, or regulations that affect the Program
(the foregoing assumptions together with the Program Assumptions, collectively,
the “Assumptions”).  In the event
that any of the Assumptions require modification or a deliverable listed in
Section 2(b), above or Appendix 3, below, cannot be delivered based on the
Assumptions (each being a “Modification”), then, upon written mutual
agreement, the Scope may be amended as provided in paragraph (b) of this
Section 8.

(b)           In the event a Modification is
identified by the Customer or by Laureate, the identifying Party shall notify
the other Party as soon as is reasonably possible.  Laureate shall use reasonable efforts to
provide the Customer with a change order containing an estimate of the required
adjustments to the Service Fees within ten (10) business days of receiving or
delivering such notice (the “Change Order”).  Laureate agrees to refrain from performing
that aspect of the Program pertaining to a Change Order until Customer approves
the Change Order. Customer shall use its best efforts to respond in writing to
such Change Order promptly, with the understanding that if Customer does not
approve a Change Order in writing within ten (10) business days of its receipt
from Laureate, Customer shall be deemed to have disapproved of the Change
Order.  If Customer does not approve such
Change Order and has not terminated this Agreement and the Program in
accordance with Section 23 but wants the Program to be modified to take into
account the Modification, then Customer and Laureate shall use commercially
reasonable efforts to agree on a Change Order that is mutually acceptable,
during which time, if practicable under such circumstances, Laureate may, in
its discretion, continue to work on the Program, but Laureate shall not be
obligated to continue to work on the Program during any such negotiations.  Laureate shall not commence work with respect
to a Change Order unless authorized to do so in writing by Customer.  Any disagreement between the Parties
concerning a Change Order (including, without limitation, the failure of the
Parties to agree upon a mutually acceptable Change Order) shall be addressed in
accordance with the dispute-resolution procedures set forth in Section 16(a)
hereof; provided, however, that if the Parties are unable to ultimately agree
on the Change Order, either Party shall have the right to immediately terminate
this Agreement upon notice.  If this Agreement
is terminated for failure of the Parties to agree to a Change Order, (i) ***,
as set forth in Section ***; and (ii) ***.

Section 9.  Confidential Information/Legal Proceedings.

(a)           Laureate will not disclose, without
Customer’s written permission, Customer Confidential Information unless such
disclosure:  (i) is to an Affiliate of
Laureate that is under a similar 

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obligation to keep such
information confidential; (ii) is to a subcontractor that has been pre-approved
by Customer and that is under a similar obligation to keep such information
confidential; (iii) is or becomes publicly available other than as a result of
a breach of this Agreement by Laureate; (iv) is disclosed by a Third Party
which Laureate reasonably believes is entitled to disclose it without
restriction; (v) is already known to Laureate as shown by its prior written
records; (vi) is independently developed by Laureate without the use of
Customer Confidential Information or (vii) is required by any law, rule,
regulation, order decision, decree, subpoena or other legal process to be
disclosed.  If such disclosure is
requested by legal process, Laureate will make all reasonable efforts to notify
Customer of this request promptly prior to any disclosure to permit Customer to
oppose such disclosure by appropriate legal action.

(b)           Customer will not disclose, without
Laureate’s written permission, Laureate Confidential Information unless such
disclosure:  (i) is to an Affiliate of
Customer that is under a similar obligation to keep such information
confidential; (ii) is or becomes publicly available other than as a result of a
breach of this Agreement by Customer; (iii) is disclosed by a Third Party which
Customer reasonably believes is entitled to disclose it without restriction;
(iv) is already known to Customer as shown by its prior written records; (v) is
independently developed by Customer without the use of Laureate Confidential
Information (including Laureate Know-How) or (vi) is required by any law, rule,
regulation, order decision, decree, subpoena or other legal process to be
disclosed.  If such disclosure is
requested by legal process, Customer will make all reasonable efforts to notify
Laureate of this request promptly prior to any disclosure to permit Laureate to
oppose such disclosure by appropriate legal action.

(c)           Laureate will not transfer any
Materials without Customer’s written permission to any Third Party unless such
transfer is to a pre-approved subcontractor and is consistent with the Program.

(d)           If Laureate shall be obliged to
provide testimony or records regarding the Program in any legal or
administrative proceeding, then Customer shall reimburse Laureate for its
reasonable out-of-pocket costs plus a reasonable hourly fee for its employees
or representatives at Laureate’s standard commercial rates.

Section 10.  Work Product.

(a)           All work outputs (e.g., reports) will
be prepared on Laureate’s standard format unless otherwise specified in the
Scope.

(b)           Periodically during performance of
the Program and at the conclusion thereof, Laureate will provide at no additional
cost to Customer the biological materials, data, information, and reports
listed in the Scope (collectively, the “Laureate Deliverables”).

Section 11.  Inventions; Patents; License.

(a)           Laureate shall promptly notify
Customer of any Product Invention made by or on behalf of Laureate in the
course of performing the Program. For good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Laureate hereby
assigns to Customer, and Customer hereby accepts, Laureate’s entire worldwide
right, title, and interest in and to any Product Invention.  If Customer requests, at Customer’s expense,
Laureate will, or cause those of its employees, consultants, or other personnel
to execute any and all applications, assignments, or other instruments, and, if
necessary, to give testimony which shall be necessary to apply for and obtain
Letters of Patent of the U.S. or of any foreign country with respect to the
Product Invention.  If, in the exercise
of its reasonable business judgment, Laureate believes that any request made by
Customer pursuant to this Section 11(a) is likely to require more than one (1)
man-hour of effort in order to comply, Laureate shall so inform Customer, and
if Customer requests Laureate to proceed and such efforts do exceed more than
one (1) man-hour in the 

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***CONFIDENTIAL
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

particular instance, Customer
agrees to promptly reimburse Laureate for those documented man-hours expended
in excess of one (1) man-hour, at the rate of *** per hour or portion
thereof.  Notwithstanding the foregoing,
with respect to the giving of testimony, court appearances, and the like, at
Customer’s request, Customer agrees to promptly reimburse Laureate on an hourly
basis at the rate of *** per hour or portion thereof, up to a maximum of eight
(8) hours per business day, in addition to reimbursement for all documented,
reasonable expenses associated with such testimony or appearance, including
meals, lodging, and travel-related expenses.

(b)           Notwithstanding anything to the
contrary herein, Laureate shall (i) retain all rights to any inventions,
enhancements, improvements, or modifications relating to the Process,
manufacturing methods, and processes, including any production, purification,
and aseptic filling process, owned or controlled by Laureate as of the
Effective Date, and (ii) own all rights in and to any Process Inventions and
all Laureate Confidential Information, or any improvements, modifications, or
enhancements thereto.

(c)           Customer acknowledges that the
Process, Process Inventions, and Laureate Confidential Information are vested
in Laureate and that Customer shall not at any time have any right, title, or
interest in or to the Process, Process Inventions, Laureate Confidential
Information, or any other intellectual property rights relating to the Process,
and any improvement, enhancements, or modifications to the Process, except as
provided in Section 11(e), below.

(d)           Laureate reserves the right to
utilize data generated during the course of the Program to support
applications, assignments, or other instruments necessary to apply for and
obtain Letters of Patent of the U.S. or of any foreign country with respect to
Process Inventions.

(e)           Subject to Customer’s payment of
Service Fees associated with cell line development, bioreactor process
development, and/or purification process development in accordance with
Program, Laureate hereby grants to Customer, and Customer hereby accepts, a
royalty-free, fully paid-up, irrevocable worldwide non-exclusive license,
including the rights to assign such licenses to Customer’s Affiliates,
successors, and permitted assigns and to grant and authorize sublicenses under
such license, to practice the Process (to the extent then developed) and
Process Inventions for the sole purpose of making and have made Drug Product or
Drug Substance for Customer, provided that Customer obtains Laureate’s prior
written consent for any sublicense to Third Parties, which consent shall not be
unreasonably withheld, provided, however, that such consent shall not be
required in the event Customer grants a sublicense hereunder to a Third Party
in connection with the further clinical development and commercialization of
Drug Product or Drug Substance, provided that any such Third Party is not
engaged primarily in the business of contract manufacturing of biological
products for third parties and Customer provides prompt notification to Laureate
along with a copy of the executed sublicense agreement.

(f)            Any technology transfer or
additional documentations or reports not covered within the Scope shall be at
Customer’s sole cost and expense. 
Subject to the reasonable requirements of its business and at Customer’s
expense, and provided that a license as set forth in Section 11(e) has come
into effect, during the term of this Agreement and thereafter Laureate agrees
to provide such technical assistance as may be reasonably requested by Customer
in connection with establishing and utilizing the Process, or a portion
thereof, at a facility owned by or contracted to Customer.  Laureate will provide such assistance at its
then current rates for such services, and Customer will promptly pay Laureate
for any such services so requested and rendered, in addition to reimbursing
Laureate for all documented, reasonable out-of-pocket expenses incurred by
Laureate in rendering such services, including meals, lodging, and
travel-related expenses for Laureate personnel providing such services.

Section 12.  Independent Contractor. Laureate shall
perform the Program as an independent contractor of Customer, and shall have
complete and exclusive control over its Facility, equipment, employees, and 

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PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

agents.  Nothing in this Agreement or other
arrangements for which it is made shall constitute Laureate, or anyone furnished
or used by Laureate in the performance of the Program, as an employee, joint
venture, partner, or servant of Customer. 
Laureate also agrees that it shall not have any rights to receive any
employee benefits such as health insurance and accident insurance, sick leave,
or vacation as are in effect generally for employees of Customer.  Laureate will not enter into any agreements
or incur obligations on behalf of Customer nor commit Customer in any other
manner without prior written consent from a duly authorized officer or
representative of Customer.

Section 13.  Insurance.

(a)           Laureate agrees to maintain (i)
workers’ compensation insurance, to the extent required by law in the state of
Laureate’s incorporation or location of the Facility; (ii) business
interruption insurance having policy limits that are commercially reasonable
given Laureate’s business of providing Program-related services; and (iii) a
standard property insurance policy covering the Drug Product, Drug Substance,
and Materials while under control and care of Laureate during the term of this
Agreement, including the replacement cost of Drug Product, Drug Substance,
and/or Materials.

(b)           Additionally, each of Laureate and
Customer agrees to maintain general liability insurance including coverage for
bodily injury, death, and property damage in the amount of *** Dollars (US$***)
per occurrence and *** Dollars (US$***) in the aggregate, during the term of
this Agreement.  At such time as Customer
begins to administer Drug Substance or Drug Product to humans, and for so long
as Customer is conducting a human clinical trial in respect of the Drug
Substance or Drug Product, Customer agrees to maintain general liability
insurance, including bodily injury, death, property damage, and product liability
coverage, in the amount of *** Dollars (US$***) per occurrence and *** Dollars
(US$***) in the aggregate, and to name Laureate as an additional insured under
such policy at no cost to Laureate.  In
addition to the foregoing, Customer agrees that it will maintain workers’
compensation insurance applicable to those of its employees who will be working
at the Facility.

(c)           Customer further agrees to provide
Laureate with a certificate(s) of insurance issued to Customer for an insurance
policy or policies directed to the aforementioned insurance coverage, that
names Laureate as an additional insured.

(d)           Once Drug Product is received by
Customer’s shipping agent at Facility, Customer acknowledges that it shall bear
all risk of loss, destabilization, alteration, or contamination of the Drug
Product or Materials due to any and all causes or hazards unless Laureate is
found to be grossly negligent or have engaged in intentional misconduct, as
well as risks associated with patent or other intellectual property rights of
Third Parties alleged to have been infringed by the manufacture, use,
importation, or sale of the Drug Product or Materials by Laureate, provided
that such allegations relate only to Materials, Customer Confidential
Information, or Customer Know How and not to the use of Laureate Confidential
Information or the exercise of rights granted under Section 11(e), above.

Section 14.  Shipping.  Laureate shall package for shipment Drug
Substance, Drug Product, samples, or other Materials in accordance with
Customer’s written instructions and at the Customer’s expense.  All shipments will be F.C.A. (Incoterms
2000), Facility, and Customer shall bear all packaging, shipping, and insurance
charges as per Appendix 8. 
Delivery of Drug Substance, samples, or other materials by Laureate
shall be deemed to have taken place upon delivery to carrier at the
Facility.  Title and risk of loss shall
transfer to Customer on transfer to carrier at the Facility.  Laureate shall accept no liability or
responsibility and risk associated with failure of Filled Products to meet
Specifications once this transfer has occurred, provided that such failure is
not attributable to acts or omissions of Laureate that occurred prior to such
transfer.  Laureate shall retain
representative samples of Drug Product and Filled Products for record keeping,
testing, and regulatory purposes.

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Section 15.  Default.

(a)           Notwithstanding anything to the
contrary herein, if Laureate is in default of a material obligation under this
Agreement (“Default”), then Customer shall promptly notify Laureate in writing
of any such Default.   Laureate shall
have a period of forty-five (45) days from the date of receipt of such notice
within which to cure such Default, provided that if such Default renders further
performance of the Program commercially impracticable or invalid, then Laureate
shall, at Customer’s option, either (1) repeat the Program at Laureate’s cost
within a time period mutually agreed to by Laureate and Customer or (2) refund
the Service Fees paid by Customer.  If
Laureate shall fail to cure such Default within the specified cure period or
repeat the Program, as the case may be, then this Agreement shall, at Customer’s
option, immediately terminate upon notice by Customer to Laureate to such effect,
without further obligation to Laureate. 
In the event of such termination, Customer’s sole remedy shall be, in
the case where such Default has not rendered completion of the Program
commercially impracticable, a reduction in the Service Fees in an amount equal
to the difference between (1) the Service Fees paid by Customer for that aspect
of the program and (2) the value of the work properly performed, as documented
by Laureate in meeting minutes, time sheets, and such other documentation as
manintained by Laureate for the purpose of tracking Program-related expenses.

(b)           Notwithstanding anything to the
contrary herein, if Customer is in default of a material obligation under this
Agreement, Laureate shall promptly notify Customer in writing of any such
default.  Customer shall have a period of
forty-five (45) days from the date of receipt of such notice within which to
cure such default, provided that if Customer fails to cure such breach within
the specified cure period, this Agreement shall, at Laureate’s option,
immediately terminate upon notice by Laureate to Customer to such effect.  Notwithstanding the cure period specified in
the preceding sentence, if Customer fails to make any payment to Laureate
within the time period specified in Section 7 and/or Appendix 7 attached
hereto, Laureate may, in its discretion, suspend performance of the Program
until Laureate receives such outstanding payment.

Section 16.  Dispute Resolution.

(a)           In the event any dispute shall arise
between the Customer and Laureate with respect to any of the terms and
conditions of this Agreement or the Program, then a senior executive of each of
Customer and Laureate shall meet as promptly as practicable, but in no event
within less than fifteen (15) business days, after notice of such dispute to
attempt to resolve in good faith such dispute.

(b)           Except as otherwise provided in this
Agreement, if senior executives of Customer and Laureate are unable to
satisfactorily resolve a dispute, then such dispute shall be finally settled by
binding arbitration in accordance with this Section 16.  The arbitration will be held in the State of
New Jersey, and except as noted below, shall be conducted in accordance with
the rules of the American Arbitration Association (or such successor organization)
by one (1) arbitrator appointed by mutual agreement of the Parties, or if the
Parties are unable to agree on an arbitrator within fifteen (15) business days
of a Party requesting arbitration, by the American Arbitration Association (or
such successor organization) upon receipt of a request by one of the
Parties.  The arbitrator shall have no
authority to vary from or ignore the terms of this Agreement and shall be bound
by controlling law.  Finally, the Parties
may seek judicial intervention for emergency relief, such as restraining orders
and injunctions where appropriate.

(c)           Any decision by the arbitrator shall
be final and binding upon the Parties, and may be entered as final judgment in
any court having competent jurisdiction. 
The cost of any arbitration proceeding shall be borne by the Parties as
the arbitrator shall determine if the Parties have not otherwise agreed.  The arbitrator shall render his/her final
decision in writing to the Parties.

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PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

Section 17.  Indemnification.

(a)           Laureate shall defend, indemnify, and
hold harmless Customer and its Affiliates and their respective officers, directors,
and employees for any loss, cost, damage, or expense (a “Loss”) arising
from any lawsuit, action, claim, demand, assessment, or proceeding (a “Claim”)
by a Third Party for (i) personal injury or property damage arising or
occurring during the conduct of the Program as a result of Laureate’s
negligence or intentional misconduct; (ii) the negligence or intentional
misconduct or inaction of or breach by Laureate in the performance of its
obligations under this Agreement; or (iii) Laureate’s breach of any of the
representations or warranties contained in this Agreement; provided, however,
that if such Loss or Claim arises in whole or in part from Customer’s
negligence or intentional misconduct, then the amount of the Loss that Laureate
shall indemnify Customer for pursuant to this Section 17 shall be reduced by an
amount in proportion to the percentage of Customer’s responsibilities for such
Loss.

(b)           Customer shall defend, indemnify, and
hold harmless Laureate and its Affiliates and their respective officers,
directors, employees, and agents (the “Laureate Group”) for any Loss
arising from any Claim by a Third Party for (i) personal injury or property
damage directly or indirectly caused by the Cell Line, Materials, Drug Product,
or Drug Substance; (ii) the harmful or otherwise unsafe effect of the Drug
Product or Drug Substance resulting from exposure thereto; (iii) the use,
consumption, sale, distribution, or marketing of the Drug Substance or Drug
Product; (iv) the negligence or intentional misconduct or inaction of or breach
by Customer in the performance of its obligations under this Agreement; (v) the
infringement of any patents or other intellectual property rights of any Third
Party with respect to Laureate’s use of Materials, Customer Confidential Information,
Customer Know How, Drug Substance, or Drug Product pursuant to performing the
Program, provided that such infringement is not the result of Laureate’s use or
practice of Laureate Confidential Information or a Laureate SOP, or (vi)  Customer’s breach of any of the
representations, warranties, or covenants contained in this Agreement;
provided, however, that if such Loss or Claim arises in whole or in part from
Laureate’s negligence or intentional misconduct (including infringement Claim
that is directly attributable to Laureate’s use of Laureate Confidential
Information), then the amount of such Loss that Customer shall indemnify the
Laureate Group for pursuant to this Section 17 shall be reduced by an amount in
proportion to the percentage of Laureate’s responsibilities for such Loss.

(c)           Subject to the limitations set forth
in Section 18(a), below, Laureate’s compliance with its obligations under
Section 3(e), above, and to the extent not covered by worker’s compensation
insurance carried by Laureate, which worker’s compensation insurance shall be
primary, Customer agrees to assume responsibility for *** for which Laureate is
otherwise uncompensated in the event that the handling of Cell Line, Materials,
Drug Substance, or Drug Product on its premises, in accordance with Laureate
SOP, the Scope, and the terms of this Agreement results in contamination of
equipment, facilities, personnel, or Third Parties by an infectious agent (in
any event, a “Contaminant”) in the Cell Line, Materials, Drug Substance,
or Drug Product as received by Laureate from Customer, but only to the extent
said Contaminant(s) have been conclusively determined to have arisen from the
infectious agent.  Here, “infectious
agent” refers to any (i) noxious, toxic, or corrosive agent, or (ii) any
microbiological or viral agents of infection, including, but not limited, to
bacteria, fungae, mycoplasmas, prions, and viruses detectable in accordance
with GMP.  For purposes of this Section
17(c), *** shall be deemed to include ***. 
To the extent that any contamination of equipment, facilities,
personnel, or Third Parties is conclusively determined to be materially caused
by Laureate’s negligent conduct (or that of a subcontractor retained by
Laureate to perform one or more aspects of the Program), including a failure to
follow GMP (if applicable) or Laureate SOP or the terms of this Agreement, then
Laureate will assume full responsibility for any such direct damages and
Customer shall have no obligation in this regard with respect to such contamination.

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PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

(d)           Upon receipt of notice of any Claim
that may give rise to a right of indemnity from the other Party hereto, the
Party seeking indemnification (the “Indemnified Party”) shall give
written notice thereof to the other Party (the “Indemnifying Party”) of
the Claim for indemnity within a time period that does not prejudice the rights
of the Indemnifying Party to exercise its full rights to provide
indemnification hereunder.  An obligation
to defend, indemnify, and hold harmless shall include the right of subrogation
with respect to any Claim for which indemnification is sought under this Agreement.  Such Claim for indemnity shall indicate the
nature of the Claim and the basis therefore. 
Promptly after a Claim is made for which the Indemnified Party seeks
indemnity, the Indemnified Party shall permit the Indemnifying Party, at its
option and expense, to assume the complete defense, including settlement, of
such Claim; provided, however, that (i) the Indemnified Party will have the
right to participate in the defense of any such Claim at its own cost and
expense; (ii) the Indemnified Party may retain separate counsel at Indemnifying
Party’s cost and expense if Indemnified Party shall have reasonably concluded,
upon the advice of outside counsel, that there is a conflict of interest
between the Indemnified Party and the Indemnifying Party; (iii) the
Indemnifying Party will conduct the defense of any such Claim with due regard
for the business interests and potential related liabilities of the Indemnified
Party; and (iv) the Indemnifying Party will, prior to making any settlement,
consult with the Indemnified Party as to the terms of such settlement.  The Indemnifying Party will not, in defense
of any such Claim, except with the consent of the Indemnified Party, which
consent shall not be unreasonable withheld, consent to the entry of any
judgment or enter into any settlement which does not include, as an
unconditional term thereof, the giving by the claimant or plaintiff to the
Indemnified Party of a release from all liability in respect thereof.  After notice to the Indemnified Party of the
Indemnifying Party’s election to assume the defense of such Claim, the
Indemnifying Party shall only be liable to the Indemnified Party for such
reasonable legal or other expenses subsequently incurred by the Indemnified
Party in connection with the defense thereof at the request of the Indemnifying
Party.  As to those Claims with respect
to which the Indemnifying Party does not elect to assume control of the
defense, the Indemnifying Party shall be liable for all reasonable legal or
other expenses incurred by the Indemnified Party in connection with the defense
thereof, and the Indemnified Party will afford the Indemnifying Party an
opportunity to participate in such defense at the Indemnifying Party’s own cost
and expense, and will not settle or otherwise dispose of any of the same
without the consent of the Indemnifying Party. 
In the event an Indemnified Party does not provide an Indemnifying Party
with adequate notice of a Claim for which indemnification is sought hereunder,
then the Indemnifying Party shall owe the Indemnified Party no further
obligation with respect to such Claim.

Section 18:  Limitations on Liability.

(a)           UNDER NO CIRCUMSTANCES SHALL EITHER
PARTY BE LIABLE TO THE OTHER PARTY, AN AFFILIATE OF THE OTHER PARTY, OR ANY
THIRD PARTY FOR INCIDENTAL, INDIRECT, CONSEQUENTIAL, OR SPECIAL DAMAGES ARISING
IN CONNECTION WITH THIS AGREEMENT, THE SCOPE, THE PROGRAM, OR ANY DOCUMENTS OR
APPENDICES RELATED THERETO.  IN NO EVENT
SHALL LAUREATE’S LIABILITY UNDER THIS AGREEMENT EXCEED the aggregate Service
Fees received by Laureate at the time the liability in question arose, and in
no event shall Customer’s liability to Laureate exceed *** Dollars ($***)
***.  These limitations of liability
reflect the allocation of risk between the Parties.  The limitations specified in this Section 18
will survive expiration or termination of this Agreement.

(b)           By way of clarification, Laureate’s
aggregate liability resulting from the loss, destabilization, alteration, or
contamination of Drug Product of a particular Batch in crude or purified form
as a result of Laureate’s breach of this Agreement, failure to comply with a
master Batch Record or negligence, wherein such Drug Product is lost,
destabilized, altered, or contaminated such that it cannot be used in clinical
trials or cannot be placed into commerce, shall not exceed the Service Fees
received by Laureate with respect to the Batch in question.

 14
 

 

 

(c)           By way of clarification, Laureate’s
aggregate liability in respect of any Claim by Customer shall not exceed the
Service Fees paid by Customer to Laureate up through the date of such Claim.

Section 19.  Representations and Warranties.

(a)           Customer hereby represents and
warrants to Laureate that it has legal title and/or a valid license to the Cell
Line and Materials and that, to the best of its knowledge as of the Effective
Date, Laureate’s performance in making and use of the Cell Line and Materials
in performance of the Program will not violate or infringe on the patents,
industrial property rights, trade secrets, trademarks, tradenames,
servicemarks, copyrights, or any other intellectual property rights of any
Third Party.  Customer further represents
and warrants that it is and throughout the term of this Agreement shall remain
entitled to supply Cell Line, Materials, and Customer Confidential Information,
and Customer Know How to Laureate.

(b)           Laureate hereby represents and
warrants that it has legal title and/or a valid license to use Laureate
Confidential Information and Laureate Know How in performing the Program, and
that to the best of its knowledge as of the Effective Date, Laureate’s use of
Laureate Confidential Information and/or Laureate Know How in performing the
Program will not violate or infringe on the patents, industrial property
rights, trade secrets, trademarks, tradenames, servicemarks, copyrights, or any
other intellectual property rights of any Third Party.

(c)           Customer will notify Laureate
immediately if Customer becomes aware that it is no longer entitled to supply
the Cell Line, Materials, Customer Confidential Information, or Customer Know
How to Laureate or that the use by Laureate of such materials and/or
information infringes or is alleged to infringe any rights (including any
intellectual or industrial property rights) vested in any Third Party.

(d)           Laureate will notify Customer
immediately if Laureate becomes aware that Customer’s practice of the Process
or Process Invention infringes or is alleged to infringe any rights (including
any intellectual or industrial property rights) vested in any Third Party.

(e)           Customer hereby represents to
Laureate that the Customer has performed all testing required by Laureate to
assure that the Materials and Cell Line are safe, stable, and effective, and
are and will be in compliance with all federal, state, and local laws and
regulations required for use, distribution, and testing of such materials and
that such materials pose no environmental risk.

(f)            Laureate hereby represents and
warrants that it will perform or have performed all testing specified by
Customer with respect to the Cell Line and in accordance with Customer’s
written instructions.

(g)           Customer hereby represents and
warrants to Laureate that any technical or regulatory information or
documentation supplied by Customer or on its behalf to Laureate (including, but
not limited to, process details, analytical methods, Specifications,
development reports, technology transfer documents, plans, engineering
documents and other documents) and required for execution of the Program is
accurate and suitable for its intended use

(h)           Laureate hereby represents and
warrants to Customer that if the Program is successfully completed, Laureate
will provide the necessary technical or regulatory information or documentation
in order for Customer to practice the Process, and any Process Invention, for
the production of Drug Product for human clinical use.

 15
 

 

 

(i)            Each Party hereby represents and
warrants to the other Party that it has full power and authority to enter into,
deliver, and perform its obligations under this Agreement, and it has taken all
action required to authorize the execution and delivery of this Agreement and
to consummate the transactions contemplated hereby, and the person signing this
Agreement on behalf of such Party has been duly authorized to act on behalf of
and to bind such Party.

(j)            Laureate warrants and represents
that (i) the Program will be performed in accordance in with standard industry
custom, (ii) it will use all commercially reasonable efforts to achieve the
specified deadlines for the Program, (iii) the Drug Product will meet in all
material respects the Specifications set forth in the Program at the time of
delivery to Customer; and (iv) that the Drug Product will be manufactured and
tested, and all associated documentation will be prepare and maintained, in
accordance with GMP, to the extent applicable, and Customer’s written
instructions.

(k)           THE EXPRESS WARRANTIES OF LAUREATE
SET FORTH IN SECTION 19 ARE IN LIEU OF ALL CONDITIONS, WARRANTIES, AND
STATEMENTS IN RESPECT OF THE PROGRAM AND/OR THE DRUG PRODUCT, WHETHER EXPRESS
OR IMPLIED BY STATUTE, CUSTOM OF THE TRADE, OR OTHERWISE, INCLUDING ANY SUCH
CONDITION, WARRANTY, OR STATEMENT RELATING TO THE DESCRIPTION OR QUALITY OF THE
DRUG PRODUCT UPON COMPLETION OF LAUREATE’S SERVICES, ITS FITNESS FOR A
PARTICULAR PURPOSE, OR USE UNDER ANY CONDITIONS, WHETHER OR NOT KNOWN TO
LAUREATE, AND THAT ANY SUCH CONDITION, WARRANTY, OR STATEMENT IS EXCLUDED FROM
THIS AGREEMENT.

Section 20.  Force Majeure.  Either Party shall be excused from performing
its respective obligations under this Agreement if its performance is delayed
or prevented by any event beyond such Party’s reasonable control, including,
but not limited to, acts of God, fire, explosion, weather, disease, war,
terrorism, insurrection, civil strife, riots, government action, or power
failure, provided that such performance shall be excused only to the extent of
and during such disability.  Any time
specified for completion of performance in the Scope falling due during or
subsequent to the occurrence of any or such events shall be automatically
extended for a period of time reasonably necessary to recover from such
disability.  Laureate will promptly
notify Customer if, by reason of any of the events referred to herein, Laureate
is unable to meet any such time for performance specified in the Scope.  If any part of the Program is invalid as a
result of such disability, Laureate will, upon written request from Customer,
but at Customer’s sole cost and expense, repeat that part of the Program affected
by the disability.

Section 21.  Use of Names.  Each party shall be permitted to use the name
and logo of the other Party in the promotion of its business.  Usage shall be permitted for (i) promotional
purposes, (ii) sales and marketing materials, (iii) web sites, and (iv) other
customary business uses agreed to by the Parties.  Without the consent of the other Party, such
usage shall be limited to general factual statements concerning the
relationship between Laureate and Customer, including, without limitation, that
Laureate and Customer have entered into an agreement for the provision of
production, purification, and aseptic filling services to Customer, but shall
not include any financial terms.

Section 22.  Term; Termination.

(a)           This Agreement shall commence on the
Effective Date and shall continue in full force and effect until December 31,
2007, unless earlier terminated in accordance with the other provisions of this
Agreement.  Customer shall also have the
right to terminate this Agreement and the Program with immediate effect, upon
notice to Laureate, upon the occurrence of any of the events specified in
Section 2(b), Section 6(b), Section 8(b) (Modification initiated by Laureate),
or Section 15(a), in which event Laureate shall immediately cease performance
hereunder, and upon presentation by Laureate to Customer 

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PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

of a final invoice for
non-cancelable obligations and other payments then due in accordance with Appendix
7 for services already provided pursuant to the Scope (the “Final
Invoice”), Customer will, within thirty (30) days after receipt of the
Final Invoice, pay to Laureate those amounts invoiced for non-cancelable
obligations incurred by Laureate prior to Customer’s notice of termination, it
being understood and agreed that Customer shall have no further payment
obligation to Laureate hereunder and that Customer may, at its option, apply any
amounts advanced to Laureate but not applied to the payment of such
non-cancelable obligations, if any; and provided further that Laureate shall
refund to Customer the balance of any advance(s) not then applied.   Additionally, (i) up until ten (10)
business days after *** in accordance with Section ***, above, Customer shall
have the right to terminate this Agreement for any reason, effective ***, and
(ii) after *** in accordance with Section ***, above, Customer shall have the
right to terminate this Agreement for any reason and at any time prior to
completion of the Program by giving ninety (90) days written notice to
Laureate, in which event Laureate shall comply with such notice and terminate
work on the Program as soon as practicable, and use its commercially reasonable
efforts to complete all activities underway and reduce cost to Customer, and
***.  For purposes of clarification, ***
is applicable for any early termination of this Agreement except for terminations
made pursuant to Section ***, Section ***, Section ***, and Section ***.

(b)           The termination of this Agreement for
any reason shall not relieve either Party of its obligation to the other Party
for obligations in respect of (i) compensation for services performed prior to
receipt of notice of termination (Section 7, Section 8, Section 22 and Appendix
7), (ii) confidentiality of information (Section 9), (iii) inventions and
patents (Section 11), (iv) insurance (Section 13), (vi) indemnification
(Section 17), and (vii) consents for advertising purposes and publications
(Section 21).  In addition, any provision
that, by it nature, is intended to survive expiration or termination hereof,
shall survive.

Section 23.  Assignment.  This Agreement may not be assigned or
otherwise transferred by either Party without the prior written consent of the
other Party; provided, however, either Party may, without such consent, assign
this Agreement (i) in connection with the transfer or sale of all or
substantially all of the assets of such Party or, in the case of Customer, the
Cell Line, Drug Substance, or Drug Product; (ii) in the event of the merger or
consolidation of a Party hereto with another company; or (iii) to any Affiliate
of the assigning Party.  Any purported
assignment in violation of the preceding sentence shall be void.  Any permitted assignee shall assume all
obligations of its assignor under this Agreement, provided however that if
Customer assigns this Agreement to an Affiliate, the Customer shall continue to
remain obligated under this Agreement.

Section 24.  Notice.

(a)           All notices to be given as required
in the Agreement shall be in writing and may be delivered personally, or mailed
either by a reputable overnight carrier with required receipt signature or
certified mail, postage prepaid to the Parties at the addresses set forth above
or at such other address as either Party may provide by written notice to the
other Party in accordance with the provisions of this Section 25. Such notice
shall be effective: (i) on the date sent, if delivered personally or by
facsimile (receipt of which is confirmed); (ii) the date after delivery if sent
by overnight carrier; or (iii) on the date received if sent by certified mail.

If to Customer

Lpath, Inc.

6335 Ferris Square

San Diego, CA 92121

Attn:   President & CEO

Telefax:  858-678-0900

 17
 

 

 

If to Laureate

Laureate, Inc.

201 College Road East

Princeton, NJ 08540

Attn:  Robert J. Broeze, Ph.D., Chief Executive
Officer

Telefax:  (609) 520-3963

 

With a copy to:

 

Safeguard Scientifics,
Inc.

800 The Safeguard Building

435 Devon Park Drive

Wayne, PA  19087

Attn:   Legal Department

Fax:  (610) 975 - 0261

Section 25.  Choice of Law.  This Agreement, and all matters arising
directly or indirectly hereunder, shall be governed by, and construed in
accordance with the laws of the State of New Jersey.

Section 26.  Headings.  The heading of each paragraph of this
Agreement is for descriptive purposes only and shall not be deemed to modify or
qualify any of the provisions, rights, or obligations set forth in this
Agreement.

Section 27.  Waiver/Severability. No waiver of any
provision of this Agreement, whether by conduct or otherwise, in any one or
more instances shall be deemed to be or be construed as a further or continuing
waiver of any such provision, or of any other provision or condition of this
Agreement.  The invalidity of any portion
of this Agreement shall not affect the validity, force, or effect of the
remaining portions of this Agreement.  If
it is ever held that any provision hereunder is too broad to permit enforcement
of such provision to its fullest extent, such provision shall be enforced to
the maximum extent permitted by law.

Section 28.  Entire Agreement;
Modification/Counterparts.  This
document (and the Scope and Appendices attached hereto) sets forth the entire
Agreement between the Parties hereto with respect to the performance of the
Program by Laureate for Customer and as such, supersedes all prior and
contemporaneous negotiations, agreements, representations, understandings, and
commitments with respect thereto and shall take precedence over all terms,
conditions, and provisions on any purchase order form or form of order
acknowledgment or other document purporting to address the same subject
matter.  This Agreement shall not be
waived, released, discharged, changed, or modified in any manner except by an
instrument signed by the duly authorized officers of each of the Parties
hereto, which instrument shall make specific reference to this Agreement and
shall express the plan or intention to modify same.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.  In the event of any conflict between this
Agreement and the Scope, as it may be modified as provided herein, the terms of
this Agreement shall control.  For
purposes of execution, facsimile signatures shall be deemed originals.

 18
 

 

 

This Agreement
becomes effective and binding on both Parties as of the Effective Date.  Should terms contained herein be at variance
with the terms and conditions specified in Customer’s written acceptance, then
the terms and conditions contained herein take precedence.

 

	
  LAUREATE PHARMA, INC.

  
	
   

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Robert J. Broeze, Ph.D.

  
	
  Title:

  	
  President & Chief Executive Officer

  
	
   

  
	
  LPATH, INC.

  
	
   

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  

 

 

 19

 

 

APPENDIX 1

Cell Lines and
Their Products

1.             “Humanized SphingomabTM”, a recombinant “humanized”
monoclonal antibody specific for sphingosine-1-phosphate (S1P) for use in
clinical trials as a therapeutic for diseases such as cancer and various
inflammatory and cardiovascular conditions, which recombinant “humanized”
monoclonal antibody constitutes the “Drug Substance” referenced in this
Agreement.

2.             Other antibodies / proteins as may be agreed upon in
writing by the Parties.

 

 

***CONFIDENTIAL PORTIONS
OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

APPENDIX 2

Scope of Work

Materials and Information
to be Provided by Customer

Customer shall provide
the following information and materials to Laureate:

1.             A technology transfer information package that includes:

a.             Information about each Cell Line
and Drug Substance that it produces, including results of sterility,
mycoplasma, and additional adventitious agent testing and characterization of
the Cell Line, to the extent such information is then available to Customer.

b.             Known information and procedures
pertaining to the production, purification, impurities, testing, stability, and
use of the Drug Substance, including Laureate’s product information
questionnaires for “Contract Production Services,” “Contract
Purification Services”, and “Aseptic Filling Services”, as
appropriate for each Drug Substance.  It
is understood, however, that, as of the Effective Date, Customer has not
produced Drug Substance, which is a “humanized” monoclonal antibody based on
Customer’s murine monoclonal SphingomabTM antibody (“Murine SphingomabTM”).  As a result, most, if not all, information
provided by Customer to Laureate re Drug Substance will be based on Murine
SphingomabTM.

c.             A Material Safety Data Sheet (MSDS)
for the Drug Substance or Murine SphingomabTM, as the case may be.

2.             A plasmid containing the genes encoding Drug Substance
and a selectable marker.  Customer will
also provide the Cell Line.  Customer
will provide documentation demonstrating that it has obtained all necessary
licenses for Customer and Laureate to use the selected expression system and
its components.

3.             The test method for the binding ELISA, as well as other
test methods developed by Customer that will be transferred to Laureate for use
solely in connection with the Program. 
If available, development reports for the methods will be provided.

4.             At least *** of purified Murine SphingomabTM for use as
an interim reference standard.

5.             Any other technical documents or information in the
possession of or available to Customer that are required by Laureate to
complete the Program.

 

 

***CONFIDENTIAL PORTIONS
OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

APPENDIX 3

Scope of Work

Scope of Activities To Be
Performed By Laureate

1.             Technology transfer of project information and
materials.

a.     Customer will transfer to Laureate all
information and materials required to initiate cell line development and to
begin development of process and method development.

b.     Laureate will provide Customer with a Gantt
chart of proposed timelines for studies outlined in Appendix 3.

2.             Cell line transfection.

a.     ***. 
Select a lead clone.

b.     Evaluate the growth and productivity of the
clone under the following conditions:

(i)            Batch culture, continue culture
until cell viability is ***.  Determine
antibody titer, antibody potency, cell count, and cell viability daily.

(ii)           Batch culture, change media and
suspend cells in fresh media daily, continue culture until cell viability is
***.   Determine antibody titer, antibody
potency, cell count, and cell viability daily.

(iii)          ***. 
Continue culture***.  Run may be
stopped earlier if good growth and antibody productivity is not achieved or
sustained.  Determine antibody titer,
antibody potency, cell count, and cell viability daily.

(iv)          ***, continue culture until cell
viability is less then ***, with the duration of the culture***.  Determine antibody titer, antibody potency,
cell count, and cell viability daily.

3.             Cell Line Development

a.             Assist Customer in transfecting ***
or *** cell lines, as specified by Customer, with plasmid DNA containing the
Drug Substance genes and a selectable marker, such a *** or ***. Carry out***.

b.             Screen and select clones for good
growth and productivity, as well as antibody potency, as determined by ELISA.

c.             Select and expand approximately ***
clones.  Evaluate growth and productivity
in shake flask cultures.  Screening will
also include antibody potency, as determined by ELISA.

d.             Select *** lead clones and evaluate
growth and productivity in commercially available serum-free media.  Screening will also include antibody potency,
as determined by ELISA.

e.             Select *** lead clones and a cell
culture medium; evaluate stability of each of the *** clones for 50
generations.  Screening will also include
antibody potency, as determined by ELISA.

f.              Select a lead clone, based on
double time, productivity and stability. 
Arrange pre-bank testing, creation of a master cell bank, and testing of
the master cell bank.

g.             Provide updates on the progress of
this aspect of the Program from time to time, as mutually agreed upon and
scheduled by Laureate and Customer, and provide a final written report to
Customer detailing the creation and development of the above-referenced cell
lines. If the above activities 3(a)-(f) do not yield a lead clone demonstrating
good growth, productivity, and antibody potency, Laureate will *** with respect
thereto in an effort to obtain a lead clone demonstrating good growth,
productivity, and antibody potency.

 

 

***CONFIDENTIAL PORTIONS
OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

4.             Bioreactor Process Development (selection of engineering
platform to be based upon results obtained pursuant to conducting the studies
referenced in activity 2, above, of this Appendix 3)

a.             Evaluate growth and productivity of
the lead clone ***, with control of pH, temperature, dissolved oxygen, and
agitation.  Evaluation to include
antibody potency, as determined by ELISA.

b.             Develop a commercially reasonable,
scalable fed batch production process by optimizing the times and amounts of
feed addition.  Evaluation to include
antibody potency, as determined by ELISA.

c.             Evaluate and optimize a temperature
shift in order to increase Drug Substance production.  Evaluation to include antibody potency, as
determined by ELISA.

d.             Complete *** runs *** and *** runs
*** in order to demonstrate reproducibility and initial scalability of the
selected process.  Evaluation to include
antibody potency, as determined by ELISA.

e.             Provide updates on the progress of
this aspect of the Program from time to time and provide a final written report
to Customer detailing the bioreactor process and its development.

5.             Purification Process Development

a.             Develop a commercially reasonable,
scalable process for the purification of Drug Substance from the bioreactor
harvest that optimizes product recovery and results in a product that meets
target specifications for product purity, activity, and viral clearance.  Evaluation to include antibody potency, as
determined by ELISA.

b.             Write and carry out a protocol for
validation of viral clearance; provide same to Customer.  The study, using a scaled-down process, will
be carried out at a third party contract virus testing facility, such as Charles
River Laboratories.

6.             Analytical method transfer and qualification

a.             Qualify all test methods by
demonstrating that the methods meet mutually agreed upon performance
requirements.  Performance requirements
and assays will be described in an “Assay Transfer and Qualification Protocol”,
which Laureate will develop in consultation with Customer.  The following test methods will be qualified:
SDS-PAGE, IEF, SE-HPLC, endotoxin, binding ELISA, host cell protein (HCP)
ELISA, and Protein A ELISA.

b.             Provide a final written report to
Customer describing the results of the qualification.

c.             Outsource other required Drug
Substance testing, with the understanding that Customer will have the first
option to provide any such required Drug Substance testing.

7.             Formulation Development and Stability Study

a.             Develop and carry out a protocol to
evaluate the effect of pH, buffers, salts, and excipients on Drug Substance
potency, integrity, and stability. 
Evaluate the effect of elevated temperature and agitation on Drug Substance
integrity.  Carry out a 6-week study of
formulations selected by the Parties. 
Describe the formulations and results in a detailed final written
report, to be provided to Customer.

8.             Production of Drug Substance for non-clinical studies

a.             Perform a non-cGMP production run
in ***, and purify the Drug Substance from the harvest.

b.             Analyze purified Drug Substance
using the following methods: pH, appearance, protein concentration, SDS-PAGE,
IEF, SE-HPLC, activity ELISA, HCP ELISA, Protein A ELISA, and endotoxin.  Results will be shared in writing with
Customer.  Other analysis may be required
and will be outsourced, with the understanding that Customer will have the
first option to provide any such required Drug Substance testing.

 

 

***CONFIDENTIAL PORTIONS
OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

9.             Process scale-up and Engineering Run

a.             Write specifications, standard
operating procedures, and master batch records required for the process;
provide same to Customer.

b.             Order, receive, and release
materials required for the process.

c.             Perform an engineering production
run in the 200 L bioreactor and purify the antibody from the harvest.

d.             Analyze Drug Substance using the
following methods: pH, appearance, protein concentration, SDS-PAGE, IEF,
SE-HPLC, activity ELISA, HCP ELISA, Protein A ELISA, and endotoxin.  Results will be shared in writing with
Customer.  Other analysis may be required
and will be outsourced, with the understanding that Customer will have the
first option to provide any such required Drug Substance testing.

e.             Material may be used for stability
studies, toxicology study, viral clearance validation, or other non-clinical
studies.

f.              If requested, aseptically fill
Drug Substance to make Drug Product.

10.           Clinical material production (cGMP)

a.             Production and purification at the
*** to meet Customer requirements for Drug Substance.

b.             Aseptic filling of Drug Product.

c.             Release testing of Drug Substance
and Drug Product.

11.           Stability studies of bulk Drug
Substance and vialed Drug Product

a.             Stability studies by protocol
agreed to by Customer.

b.             Stability data summarized at each
time point and described in a detailed written report provided to Customer at the
end of each study.

Activities Not Included
in Scope: Arrangement of transportation and carrier insurance of bulk or vialed
Drug Substance or Drug Product to Customer.

Laureate Deliverables

(i)            During the performance of the
Program, Laureate will provide Customer with at least *** viable aliquots of
any cell line adapted by Laureate for production of Drug Substance using the
Process.

(ii)           During the performance of the
Program, Laureate will provide Customer with secure online access to
information generated in the course of performing the Program in accordance
with such procedures as are customary with other Laureate customers.

(iii)          Within ten (10) days after the end of
each calendar month during the performance of the Program, Laureate will
provide Customer with all data relevant to the optimization or production of
Drug Substance using the Process, in electronic and paper forms reasonably
acceptable to Customer.

(iv)          Laureate will provide Customer with at
least three (3) samples of conditioned medium, each in triplicate, for
in-process testing, which samples will be taken during the course of each
scale-up, engineering, or production run performed in accordance with activity
3, 4, 8, 9, or 10, of this Appendix 3 in respect of making Drug Substance using
the Process. Laureate will inform Customer of antibody potency results and of
any excess cell supernatant during the periodic teleconferences to be conducted
between the Parties during the conduct of the Program.  Customer has the option to request 

 

shipment of supernatant
to Customer for internal analysis. 
Customer will supply a FedEx account number to support shipment of
biological materials to Customer or its designee.

(v)           Laureate will promptly provide
Customer with copies of the Batch Record for each lot of Drug Substance
produced using the Process.

(vi)          At the conclusion of the Program or
such other time as indicated, Laureate will provide Customer the following:

1.             at
Customer’s request and expense, at the conclusion of the cell line development
phase for any Cell Line (activity 3, above), or such later time as Customer may
request, a master cell bank of viable aliquots of the cell line that Laureate
and Customer select as the optimum Drug Substance producer (i.e., the Cell
Line), in such quantity as is reasonable; and

2.             such additional documentation as
Customer may reasonably request in order for Customer to prepare a complete
regulatory information package needed to support Customer’s  clinical trial application and such other
submissions Customer may elect to make for regulatory review and approval in
respect of the Drug Product.

Each Party providing
data, information, and reports shall provide the same in hard copy and
electronic versions, in each instance in a form acceptable to the other Party.

 

 

APPENDIX 4

Testing to be
Provided by Laureate

Cell Line: Review of
Certificate of Analysis and supporting documentation provided by Customer and
testing vendors.

Materials:

1.             Review of
information or Certificate of Analysis provided by Customer or its testing
vendor

2.             Identity testing as appropriate

Bulk Drug Substance: As
agreed by the Parties

Filled Vials: As agreed
by the Parties

 

 

***CONFIDENTIAL PORTIONS
OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

APPENDIX 5

Approved Subcontractors and
Services

	
  Subcontractor

  	
   

  	
  Service Provided

  
	
  ***

  	
   

  	
  Sterility, analytical, and bioburden testing

  
	
  ***

  	
   

  	
  Testing, Cell Banking, Viral Clearance Studies

  
	
  ***

  	
   

  	
  Testing, Cell Banking, Viral Clearance Studies

  

 

 

 

***CONFIDENTIAL PORTIONS
OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

APPENDIX 6

Access and Audits

1.             Access to production areas:

During the course of the
Program, Laureate will arrange Customer access to the Facility, manufacturing
floor, and its subcontractors’ facilities. 
Laureate escort will be assigned and will accompany the Customer’s
representative(s) at all times while in controlled areas of the Facility.
During this time it is critical that the Customer:

a.             Follows all GMP / access / gowning
/ safety procedures as directed by Laureate personnel.

b.             Does not touch or operate any
equipment in the production area.

c.             Does not
direct manufacturing personnel. 
Suggestions or recommendations may be made to an area manager or
director.

d.             Does not remove any documentation
or in-process data.  Requests for
documentation must be made in writing to an area manager or Director.  Any documentation provided in this fashion
will be tracked by the area Director.

e.             Makes all requests for additional
immediate in-process sampling, in writing to the area Manager or Director with
full justification, prior to sampling.

f.              Does not enter areas where
production is ongoing for another customer.

g.             Does not take any photos inside any
Laureate facility.  Laureate can provide
digital photographs as appropriate.

h.             Lack of adherence to these very
basic guidelines will result in immediate loss of access to production areas.

2.             GMP Audits:

a.             Within ninety (90) days after the
Effective Date, and then once per calendar year thereafter, Laureate will
support 1 (one) GMP audit during an active contract.

b.             The audit may be performed by
Customer or by a Third Party, with Third Party costs being at the sole expense
of the Customer.  A maximum of  auditors / Customer participants will be
allowed to take part in the actual audit, due to space limitations and
dedicated Laureate personnel availability.

c.             Dates for the audit must be
arranged and agreed with Laureate a minimum of one month prior to the
audit.   Laureate reserves the right to
make final approval of audit dates, based on availability of the facility and
appropriate Laureate personnel.

d.             Three weeks before the audit
occurs, a list of areas / topics to be covered in the audit will need to be
received by Laureate. This will allow Laureate to ensure appropriate Laureate
personnel availability during the audit, while also ensuring minimal impact to
programs in production for other customers.

e.             No access will be allowed into
areas where production is underway for another customer.

f.              Any audit observations being sent
to Laureate for review or response must be provided by the Customer, not
directly from a Third Party auditor. 
Laureate will formally respond to audit findings within 45 days.

g.             ll audit observations are
confidential, covered in the confidentiality agreement between Laureate and the
Customer, and may not be shared with any other party without express written
permission.  All Third Party auditors
must also sign confidentiality agreements with Laureate confirming adherence to
this condition and may not share their findings beyond the Customer who
contracts the audit, without express written permission from Laureate.

 

 

***CONFIDENTIAL PORTIONS
OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

APPENDIX 7

Service Fees and Payment
Schedule

	
  Service

  	
   

  	
  Price**

  	
   

  	
  Payment Terms*

  
	
  Cell Line
  Development 

  ·Variant
  1 Cell Line 

  ·Variant
  2 Cell Line

  	
   

  	
   

  $***

  $***

  	
   

  	
  ·  ***

  
	
  Evaluation of
  potential *** cell line inhibition by Spingomab produced by the *** cell
  line. Includes transfection, selection of a clone and evaluation in
  suspension and perfusion hollow-fiber cell culture

  	
   

  	
  $***

  	
   

  	
  ·  ***

  
	
  Bioreactor
  Process Development

  	
   

  	
  $***

  	
   

  	
  ·  ***

  
	
  Purification
  Process Development

  	
   

  	
  $***

  	
   

  	
  ·  ***

  
	
  Analytical
  Method Transfer and Qualification

  	
   

  	
  $***

  	
   

  	
  ·  ***

  
	
  Formulation
  Development and Stability Study

  	
   

  	
  $***

  	
   

  	
  ·  ***

  
	
  Arrange creation
  and testing of Master Cell Bank

  	
   

  	
  $***

  	
   

  	
  ·  ***

  
	
  Non-GMP ***
  production 2 x 100 L and one purification from combined harvest

  	
   

  	
  $***

  	
   

  	
  ·  ***reservation fee to schedule production
  timeslot

  ·  *** due upon ***

  ·  *** due upon ***

  
	
  Preparation of
  cGMP production documents (specifications, SOPs, batch records) (4 weeks)

  	
   

  	
  $***

  	
   

  	
  ·  ***

  
	
  Engineering
  and 200 L bioreactor production and purification (Non-cGMP). Note: Laureate
  offers its clients this price for a pilot run when scheduled together with
  cGMP production run. Pilot run will take place in the cGMP facility using the
  same equipment and staff as will be used for the cGMP run.

  	
   

  	
  $***

  	
   

  	
  ·  ***reservation fee to schedule production
  timeslot 

  ·  *** due upon *** 

  ·  *** due upon ***

  
	
  Viral clearance
  validation. 2 viruses, 4 process steps. Includes labor provided by Laureate.

  

  Does not include pricing from contract lab. ***

  	
   

  	
  $***/***

  	
   

  	
  ·  ***

  
	
  cGMP 2000 L
  production, purification

  	
   

  	
  $***/***

  	
   

  	
  ·  ***reservation fee to schedule production
  timeslot 

  ·  *** due upon *** 

  ·  *** due upon ***

  
	
  Quality Control
  release testing of bulk drug substance

  	
   

  	
  $***/ lot

  	
   

  	
  ·  ***

  

 

 

 

***CONFIDENTIAL PORTIONS
OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

	
  One-time product-specific
  filling set-up charge, including documentation.

  	
   

  	
  $***

  	
   

  	
  ·  ***

  
	
  Media Fill, if
  non-qualified vial requested, standard quantity is 3000 vials

  	
   

  	
  $***

  	
   

  	
  ·  ***

  
	
  Aseptic filling
  of product into vials. 100% visual inspection of filled vials and packaging
  of filled vials into trays.

  	
   

  	
  $***for up to 1,000 vials 

  $***for 1,001 to 5,000 vials 

  $***for 5,001 to 10,000 vials

  	
   

  	
  ·  ***reservation fee to schedule production
  timeslot 

  ·  *** due upon *** 

  ·  *** due upon ***

  
	
  Quality Control
  release testing of vialed product

  	
   

  	
  $***/ lot

  	
   

  	
  ·  To be determined

  
	
  Other services
  (e.g. stability studies, regulatory support, validation studies, tech
  transfer to an alternative commercial CMO)

  	
   

  	
  To be determined

  	
   

  	
  ·  To be determined

  

*
Notes:

·                  Payment
terms of ***.

·                  Cost
for Process Consumables and supplies are included in above pricing, except for
columns and resins, filters and membranes, which are Product-Dedicated
Equipment shall be paid for by Customer and become the property of Customer.

·                  Outsourced
activities provided by a third party subcontractor of Laureate, including any
required contract testing services (e.g., sterility, bioburden), will be billed
***.

·                  Any
cells brought into Laureate’s developmental facility must have documentation to
show that the cells are sterile and free of mycoplasma. For cells to enter the
Facility, they must meet the most recent “Points to Consider” FDA
guidelines for cell lines used to produce products for human use.

·                  Charges
for any required outside testing beyond that listed are not included.
Outsourced activities, including any required contract testing services, will
be billed ***.

**  Indicates
that the ***, other than as provided in Section ***.

**  If the *** by Laureate, Customer shall be ***
at the ***, as provided in Section ***, above.

 

 

***CONFIDENTIAL PORTIONS
OF THIS AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

APPENDIX 8

Shipping

1.             The shipment and timely arrival of samples, Drug
Product, Drug Substance, and other materials that Laureate produces and stores
for Customer is critical to keep the Program on schedule.

2.             Laureate requires a minimum of one week notice prior to
shipping (not prior to receipt at a remote location).  One week notice is reasonable for the vast
majority of the shipments.  Laureate
recognizes that there will be instances that will necessitate shipping
materials where a one week notice is not possible.   Laureate will continue to meet those
requirements; however, there will be an additional charge for shipments that
need to occur with less than the one week notice.  The charges for the shipping are summarized
in the table below.  Customer will be
responsible for the cost of shipping and insurance.  Customer will provide contact and account
information for approved shipping agent. 
Customer will review and authorize shipping configuration.

3.             Prior to shipment Drug Product will be stored at
Laureate under cGMP compliance conditions that will include but not be limited
to the following:

Temperature controlled
and monitored

Controlled access

Back-up power supply

Call out service
for alarms generated outside of normal business hours

4.             Shipping Policy:   

	
  Notice Period

  Prior To Shipping

  	
   

  	
  Shipping Charge

  	
   

  	
  Additional Fee

  For Expedited Shipments

  
	
  7 calendar days
  or longer

  	
   

  	
  The actual costs of shipping ***

  	
   

  	
  No additional fee

  
	
  4 days to 6 days

  	
   

  	
  The actual costs of shipping ***

  	
   

  	
  An additional fee of $***.

  
	
  2 days to 3 days

  	
   

  	
  The actual costs of shipping ***

  	
   

  	
  An additional fee of $***.

  
	
  Same day
  shipping

  	
   

  	
  The actual costs of shipping ***

  	
   

  	
  An additional fee of $***.Exhibit
10.18

PURCHASE
AND SALE AGREEMENT

between

PRB
ENERGY, INC. (“Seller”)

and

ARETE
INDUSTRIES, INC (“Purchaser”)

As
of September 1, 2006

 

PURCHASE
AND SALE AGREEMENT

This
Purchase and Sale Agreement (the “Agreement”) entered into this  4 th
day of August, 2006, is the agreement between PRB Energy, Inc., 1875 Lawrence
Street, Suite 450, Denver, Colorado 80202 (the “Seller”) and Arête
Industries, Inc., 7260 Osceola Street, Westminster, Colorado 80030 (the “Buyer”)
concerning the sale and purchase of certain coal bed methane gas gathering
pipeline and compressor station-related assets described below.  For purposes of this Agreement, the effective
date of the purchase and sale shall be 12:01 a.m. Mountain Time on September 1,
2006 (the “Effective Date”).  Seller
and Buyer shall close the transaction contemplated by this Agreement on or
before September 1, 2006, (the “Closing Date”.)

RECITALS:

A.                                   Buyer
and Seller desire to enter into an agreement whereby the Seller seeks to sell
and the Buyer seeks to buy the coal bed methane gas gathering pipeline and
compressor station-related assets currently associated with the TOP Gathering
System in Campbell County, Wyoming (hereinafter referred to as the “TOP”); and

B.                                     Buyer
and Seller desire to enter into this Agreement to complete said transaction.

Now
therefore, in consideration of the mutual agreements and covenants contained
herein, Buyer and Seller agree as follows:

1.                                       Purchase
and Sale of Assets.  Subject to the
terms, conditions and exclusions of this Agreement, Seller agrees to sell and
Buyer agrees to purchase Seller’s right, title and interest in and to “TOP”
located in Campbell County, Wyoming as depicted on Exhibit A

a.               Real
Property.  All easements, rights of way, permits,
licenses, prescriptive rights structures or other interests in real property
associated with or relating to the Assets as listed on Exhibit A-1;

b.              Equipment.  All pipelines, equipment, valves, vessels,
fittings, meters or other measurement facilities, operational and control
equipment, pig launchers, pig catchers, tanks and all other personal property,
as depicted on Exhibit A (one
dehydration unit & one ecology pot currently on site are excluded from the
purchase and sale) ;

c.               Contracts
et al.  All contracts and agreements
relating to the use of the assets, as depicted on Exhibit A-1; 

d.              Other
Interests in the Assets.  All other rights, titles and interests in and
to the Assets as described above are part of the Assets, it being the purpose
and intent of this Agreement that Seller sell and Buyer purchase all of Seller’s
right, title and interest in and to the Assets.

2.                                       Purchase
Price.  In consideration of the
conveyance of the Assets, upon execution of this Agreement, Buyer shall pay to
Seller the sum of Three Hundred and Thirty Thousand Dollars and no cents
($330,000.00)  (the “Purchase Price”)

3.                                       Seller’s
Representations and Warranties. 
Seller represents and warrants, to the best of its knowledge, the
following to Buyer as of the Closing Date:

a.               Preferential
Rights to Purchase.  No third party
holds any preferential right to purchase, right of first offer, right of last
refusal or other preferential right to purchase the Assets.

b.              Signatory for
Seller.  The signatory for Seller has
the full power and authority to bind the Seller to the terms hereof, and to
complete the sale contemplated hereby.

c.               Agreement
Represents.  This Agreement
represents the valid and subsisting agreement of Seller, fully binding upon
Seller and subject only to general principles of equity and bankruptcy laws.

d.              No Abandonment.  Seller has taken no actions that demonstrate
an intent to abandon the Assets, or released of record any rights of way
pertaining to the Assets.

e.               Fees.  Seller has incurred no liability, contingent
or otherwise, for broker’s or finder’s fees in respect to this transaction for
which Buyer shall have any responsibility whatsoever.

4.                                       Buyer’s
Representations and Warranties. 
Buyer represents and warrants, to the best of Buyer’s knowledge, the
following to Seller as of the Closing Date:

a.               Consents and
Approvals.  No consent, approval,
authorization, license, order or permit, or declaration, filing or registration
with, or notification to any governmental authority or any other person, is
required

 

to be obtained by the
Buyer in connection with the execution and delivery of this Agreement by the
Buyer or the performance of the Buyer’s obligations hereunder;

b.              Fees.  Buyer has not incurred any liability,
contingent or otherwise, for brokers’ or finders’ fees relating to the
transactions contemplated by this Agreement for which Seller shall have any
responsibility whatsoever;

c.               Restoration.  Buyer has the sole responsibility to
determine the necessary measures and to perform all necessary restoration of
the Assets.

5.                                      WARRANTY.   BUYER ACKNOWLEDGES
AND AGREES THAT THE ASSETS LISTED IN EXHIBITS A, A-1 AND B ARE BEING
TRANSFERRED, ASSIGNED AND CONVEYED FROM SELLER TO BUYER “AS IS, WHERE IS AND
WITH ALL FAULTS” IN THEIR PRESENT CONDITION AND STATE OF REPAIR.  SELLER HEREBY DISCLAIMS ANY AND ALL REPRESENTATIONS
AND WARRANTIES CONCERNING THE ASSETS, EXPRESS OR IMPLIED, WHETHER ARISING IN
CONTRACT, TORT OR ANY OTHER THEORY OF LAW, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTY OF TITLE, MERCHANTABILITY OR FITNESS FOR A GENERAL OR PARTICULAR
PURPOSE.  FURTHER, BUYER SPECIFICALLY
AGREES THAT SELLER IS MAKING NO REPRESENTATION OR WARRANTY, EITHER EXPRESS OR
IMPLIED, AS TO THE ADEQUACY OR COMPLETENESS OF THE UNDERLYING REAL PROPERTY
INTERESTS ASSOCIATED WITH OR USED IN CONNECTION WITH THE ASSETS, INCLUDING BUT
NOT LIMITED TO EASEMENTS AND RIGHTS OF WAY.

6.                                      Indemnification.

a.                                       By
Seller.  Seller agrees to indemnify,
defend and hold Buyer harmless on account of all debts, liabilities or causes
of action attributable to Buyer’s ownership of the property and to transactions
applicable to the Contracts which accrued prior to the date of Closing except
as otherwise set forth below; and

b.                                       By
Buyer.  Buyer agrees to indemnify,
defend and hold Seller harmless on account of all debts, liabilities or causes
of action attributable to Seller’s ownership of the property and to
transactions applicable to the Contracts which accrued after to the date of
Closing.

c.                                       All indemnities of or by the parties under this Agreement
shall survive the Closing Date hereof.

7.                                       Conveyance
Documents.  At Closing, Seller shall
execute and deliver an Assignment, Conveyance, and Bill of Sale in the form of
which is attached as Exhibit B.

8.                                       Conditions
to Closing - Seller.  The Seller’s
obligations at Closing are subject, at Seller’s option, to the satisfaction at
or prior to the Closing Date of the following conditions precedent:

a.               All representations
and warranties of Buyer contained in Paragraph 4 of this Agreement shall be
true and correct in all material respects, and Buyer shall have performed and
satisfied all covenants and agreements required by this Agreement to be
performed and satisfied by Buyer at or prior to the Closing Date in all
material respects;

b.              Buyer
shall have executed and delivered to Seller all of the documents that are contemplated
to be executed and delivered pursuant to this Agreement prior to or at the
Closing Date.

9.                                       Conditions
to Closing - Buyer.  The Buyer’s obligations at Closing are
subject, at Buyer’s option, to the satisfaction at or prior to the Closing Date
of the following conditions precedent:

a.               All
representations and warranties of Seller contained in Paragraph 3 of this
Agreement shall be true and correct in all material respects, and Seller shall
have performed and satisfied all covenants and agreements required by this
Agreement to be performed and satisfied by Seller at or prior to the Closing
Date in all material respects;

b.              Seller
shall have executed and delivered to Buyer all of the documents that are
contemplated to be executed and delivered pursuant to this Agreement prior to
or at the Closing Date.

10.                                 Termination. 
This Agreement may be terminated in accordance with the following
provisions:

a.               By
Seller if the conditions set forth in Paragraph 8 are not satisfied, through no
fault of the Seller, or waived by Seller in writing, as of the Closing Date; or

 

b.              By
Buyer if the conditions set forth in Paragraph 9 are not satisfied, through no
fault of the Buyer, or waived by Buyer in writing, as of the Closing Date.

11.                                 Confidentiality.
Unless required by applicable law, rules or regulations, neither party hereto
shall make a public announcement or communication to any third party concerning
this Agreement or the transactions contemplated hereby without the express
written consent of the other party.  Notwithstanding
any of the foregoing, Buyer and Seller shall be permitted to communicate as
deemed necessary in its sole discretion regarding change of ownership of
Property.

12.                                 Entire
Agreement.  This Agreement, together with Exhibits “A”, “A-1”
and “B” attached hereto and data delivered hereunder, shall constitute the
complete agreement between the parties hereto and shall supersede all prior
agreements, whether written or oral, and any representations or conversations
with respect to the purchase and sale of the Assets.

13.                                 Binding
Effect.  This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, and their successors and
assigns.  This Agreement may be assigned
to a party’s parent, subsidiary, member or affiliate without the consent of the
other party provided notice of such assignment is provided to the other
party.  No other assignment by either
party shall be made without the express written consent of the other party,
which shall not be unreasonably withheld.

14.                                 Counterparts.  This Agreement may be executed in any number
of counterparts each of which shall be considered an original and each of which
shall be an enforceable agreement.

15.                                 Law
Applicable.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Wyoming applicable to
contracts made and performed entirely therein.

16.                                 Joint
Draft.  This Agreement was drafted and prepared by
Seller and Buyer with each party having access to their own legal counsel.  Seller and Buyer each waive any position or
claim that it may now have or may have in the future based on the argument that
the Agreement was drafted by only one of the parties and not jointly prepared
by Seller and Buyer.

17.                                 Severability:  Each and every provision of this Agreement is
intended to be severable.  If any term or
provision is held to be invalid or illegal for any reason whatsoever, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance contemplated by
this transaction is not affected in a materially adverse manner with respect to
either party.

18.                                 Mediation:  No civil action with respect to any dispute,
claim or controversy arising out of or relating to this Agreement may be
commenced until the matter has been submitted to a mediator for mediation.  Either Party may commence mediation by
providing to the other party a written request for mediation, setting forth the
subject of the dispute, claim or controversy and the relief requested.  It is hereby agreed that the Parties, upon
occasion that such a notice is delivered, shall endeavor for a period of thirty
(30) days to reach an accord on the disputed matter prior to going to formal
mediation.  Should the Parties fail to
reach such an accord, the Parties agree to cooperate and act in good faith in
the selection of a mutually agreed to mediator and in scheduling the mediation
proceedings.  The Parties further
covenant that they will participate in the mediation in good faith, and that
they will share equally in its costs. 
All offers, promises, conduct and statements, whether oral or written,
made in the course of the mediation by any of the Parties, their agents,
attorneys, employees, or experts, and by the mediator and the mediator’s
employees, are confidential, privileged and inadmissible for any purposes,
including impeachment, in any litigation or other proceeding involving the
parties, provided that evidence that is otherwise admissible or discoverable
shall not be rendered inadmissible non-discoverable as a result of its use in
the mediation.  Either Party may seek
equitable relief prior to the mediation to preserve the status quo pending
completion of the mediation process. 
Except for an action to obtain equitable relief, neither party may
commence a civil action with respect to the matters submitted to mediation
until after the completion of the initial mediation session, or 45 days after
the date of filing of the written request for mediation, whichever occurs
first.  Mediation may continue after the
commencement of a civil action, if the Parties so desire.  The provisions of this clause may be enforced
by any Court of competent jurisdiction in the State of Wyoming, and the Party
seeking enforcement shall be entitled to an award of all costs, fees and
expenses, including attorneys’ fees, to be paid by the Party against whom the
enforcement is ordered.

19.                                 Attorney’s
Fees.  The prevailing party in any dispute hereunder
shall be entitled to recover its reasonable attorneys’ fees and costs.  In addition, should either party decline to
complete the closing and associated transaction, the declining party shall pay
all attorney’s fees and costs of the party seeking to close the transaction.

20.                                 Waivers.  No party’s rights hereunder will be deemed
waived except by a writing signed by such party.

 

21.                                 Incorporation
of Exhibits.  All exhibits and schedules referred to herein
are attached hereto and are made a part hereof by this reference.  This Agreement shall be the controlling document
to the extent there is any conflict between the language of this Agreement and
any of the exhibits.

22.                                 Survival.  Except as otherwise provided herein, the
representations and warranties contained in this Agreement shall not survive
the closing.

23.                                 Further
Assurances and Agreements. Seller and Buyer each
agree that it will take such further or other action(s) and to execute or
deliver such other documents necessary to carry out the purposes and intent of
this Agreement or any document delivered pursuant to this Agreement.

IN
WITNESS WHEREOF, the Parties to this Agreement have executed this Agreement as
of the Effective Date first above written.

 

	
  “ASSIGNOR”

  	
   

  	
  “ASSIGNEE”

  
	
  PRB ENERGY, INC.

  	
   

  	
  ARETE INDUSTRIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ William F.
  Hayworth

  	
   

  	
  By:

  	
  /s/ Charles
  Gamber

  
	
   

  	
  William F.
  Hayworth, President

  	
   

  	
  Charles Gamber,
  CEO President

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT
A

ATTACHED
TO AND MADE A PART OF THAT CERTAIN

PURCHASE
AND SALE AGREEMENT BY AND BETWEEN

ARETE
INDUSTRIES, INC. and PRB ENERGY, INC.

DESCRIPTION
OF ASSETS

Pipelines

 

·                  4.5 Miles 8”
coated steel pipe, hydro-tested, welds x-rayed and cathodically protected

·                  Pig
launcher/receiver

Interconnect

 

·                  Building

·                  Slug catcher

·                  Level
Controller/Scrubber pot

·                  400 BBL Tank

·                  Pig
launcher/receiver

Buff Station

·                  Inlet Separator

·                  Separator flash
tanks (2)

·                  400 BBL Tank

·                  Various Piping
and various valves – heat traced and insulated

·                  Emergency shut
down system – fire eyes (4), gas detectors (4)

·                  Meter houses (3)
– Barton Chart meter, Total Flow Meters

·                  Oxygen analyzer

·                  Suction control
valves (4)

·                  Regulators

·                  Buildings
(4)

 

EXHIBIT
A-1

 

ATTACHED
TO AND MADE A PART OF THAT CERTAIN

PURCHASE
AND SALE AGREEMENT BY AND BETWEEN

ARETE
INDUSTRIES, INC. and PRB ENERGY, INC.

Real
Property and Leasehold Interests

 

·                  Compressor Site
Agreement by and between the WYO Davis Family Limited Partnership and PRB Gas
Transportation, Inc. successor to TOP Gathering LLC, dated June 3, 2002

·                  Pipeline
Right-of-Way Grant by and between Ohmans, Inc. a Wyoming Corporation and PRB
Gas Transportation, Inc. successor to TOP Gathering LLC, dated September26,
2001

·                  Receipt Point
Site Lease by and between Ohmans, Inc., a Wyoming Corporation and PRB Gas
Transportation, Inc. successor to TOP gathering, LLC dated December 31, 2001

·                  Gas
Compressor Equipment Master Rental Agreement by and between Universal
Compression and PRB Gas Transportation, Inc. successor to TOP Gathering LLC,
dated December 17, 2001

Governmental Authorizations

·                  State
of Wyoming, Department of Environmental Quality Air Quality Permit CT-2598,
Buff Compressor Station, dated November 23, 2001 as modified by Permit No.
MD-837, dated December 17, 2002

Contracts and Agreements

·                  Gathering
Services Agreement by and between Bear Paw Energy, LLC and PRB Gas
Transportation, Inc. successor to TOP Gathering LLC, dated September 20, 2001

·                  Gathering
Services Agreement by and between PRB Gas Transportation, Inc. successor to TOP
gathering LLC and United Energy Trading, dated July 18, 2002

·                  Gathering Services
Agreement by and between PRB Gas Transportation, Inc. successor to TOP
Gathering LLC and Natural Gas Fuel Company, Inc. dated October 15, 2001

·                  Gathering
Services Agreement by and between PRB Gas Transportation, Inc. successor to TOP
Gathering LLC and Natural Gas Fuel Company, Inc. – Emerald  dated July 18, 2002 (Expired)

·                  Operating
Agreement of TOP Gathering LLC dated October 15, 2001 (Expired)

·                  Contribution
Agreement dated October 15, 2001, by and among Pete Haman, Knorstar Energy,
LLC, data management Consultants, Inc. and Crescent Holding, LLC (Expired)

·                  Letter
Agreement dated June 12, 2002 by and between TOP Gathering LLC and Global
Vision Solutions LLC for an internet based monitoring system (Expired)

 

EXHIBIT
B

ATTACHED
TO AND MADE A PART OF THAT CERTAIN

PURCHASE
AND SALE AGREEMENT BY AND BETWEEN

ARETE
INDUSTRIES, INC. and PRB ENERGY, INC.

ASSIGNMENT,
CONVEYANCE, and BILL OF SALE

	
  STATE OF WYOMING

  	
  )

  
	
   

  	
  )

  
	
  COUNTY OF CAMPBELL

  	
  )

  

 

THIS
ASSIGNMENT, CONVEYANCE, AND BILL OF SALE (the “Assignment”) dated as of
September 13, 2006 is entered into between ARETE INDUSTRIES, INC. (“Assignee”)
and PRB ENERGY, INC. (“Assignor”).

WITNESSETH:

FOR
TEN DOLLARS ($10.00) AND OTHER GOOD AND VALUABLE CONSIDERATION, the receipt and
sufficiency of which are hereby acknowledged, Assignor hereby GRANTS, CONVEYS,
QUITCLAIMS and ASSIGNS to Assignee all of Assignor’s right, title and interest
in and to the following properties (real, personal, or mixed) and rights
(contractual or otherwise) unless expressly reserved or excluded herein:
together with all rights incident thereto as set forth in Exhibits A and
A-1.  All properties, real, personal, or
mixed and rights (contractual or otherwise) included hereinabove are sometimes
referred to hereinafter as the “Property” or “Properties”.

TO
HAVE AND TO HOLD the Properties subject to the following terms and conditions:

1.                                       The
terms, covenants, and conditions hereof bind and inure to the benefit of the
parties hereto and their respective successors and assigns.  All future conveyances of any portion of the
Properties and/or their associated facilities and equipment shall recognize and
perpetuate the rights and obligations set out herein.

2.                                       ASSIGNEE
ACKNOWLEDGES AND AGREES THAT THE ASSETS LISTED IN EXHIBITS A and A-1 ARE BEING
TRANSFERRED, ASSIGNED AND CONVEYED FROM ASSIGNOR TO ASSIGNEE “AS IS, WHERE IS
AND WITH ALL FAULTS” IN THEIR PRESENT CONDITION AND STATE OF REPAIR.  ASSIGNOR HEREBY DISCLAIMS ANY AND ALL
REPRESENTATIONS AND WARRANTIES CONCERNING THE ASSETS, EXPRESS OR IMPLIED,
WHETHER ARISING IN CONTRACT, TORT OR ANY OTHER THEORY OF LAW, INCLUDING,
WITHOUT LIMITATION, ANY WARRANTY OF TITLE, MERCHANTABILITY OR FITNESS FOR A
GENERAL OR PARTICULAR PURPOSE.  FURTHER
ASSIGNEE SPECIFICALLY AGREES THAT ASSIGNOR IS MAKING NO REPRESENTATION OR
WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE ADEQUACY OR COMPLETENESS OF THE
UNDERLYING REAL PROPERTY INTERESTS ASSOCIATED WITH OR USED IN CONNECTION WITH
THE ASSETS, INCLUDING BUT NOT LIMITED TO EASEMENTS AND RIGHTS OF WAY.

3.                                       This
Assignment and its performance shall be construed in accordance with, and
governed by, the laws of the State of Wyoming without regard to the choice of
law rules of any jurisdiction, and Assignor and Assignee submits to the
exclusive jurisdiction of State Courts located in Gillette, Campbell County,
Wyoming.

EXECUTED
this 13 day of September, 2006.

IN
WITNESS WHEREOF, the Parties have executed this Agreement as
of the date first set forth above.

	
  “ASSIGNOR”

  	
   

  	
  “ASSIGNEE”

  
	
  PRB ENERGY, INC.

  	
   

  	
  ARETE INDUSTRIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ William F.
  Hayworth

  	
   

  	
  By:

  	
  /s/ Charles
  Gamber

  
	
   

  	
  William F.
  Hayworth, President

  	
   

  	
  Charles Gamber,
  CEO President

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