-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ixzs3P6k2uvGHI5ITHlyK4CBAhCv9WTfV9ih2ehOkYkT1I4mNsk/pH6PUWz6l4y2 EKefaBbNcnjci2BlsJELGQ== 0000950135-04-001684.txt : 20040401 0000950135-04-001684.hdr.sgml : 20040401 20040401170654 ACCESSION NUMBER: 0000950135-04-001684 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20040317 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040401 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANTIGENICS INC /DE/ CENTRAL INDEX KEY: 0001098972 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 061562417 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-29089 FILM NUMBER: 04710360 BUSINESS ADDRESS: STREET 1: 630 FIFTH AVENUE SUITE 2170 CITY: NEW YORK STATE: NY ZIP: 10111 BUSINESS PHONE: 2123324774 MAIL ADDRESS: STREET 1: 630 FIFTH AVENUE SUITE 2170 CITY: NEW YORK STATE: NY ZIP: 10111 8-K 1 b49993age8vk.htm ANTIGENICS, INC. ANTIGENICS, INC.
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):
March 17, 2004

Commission File Number: 000-29089

ANTIGENICS INC.

(exact name of registrant as specified in its charter)
     
Delaware   06-1562417
(State or other jurisdiction of
incorporation or organization) 		  (I.R.S. Employer Identification No.)

630 Fifth Avenue, Suite 2100, New York, New York 10111
(Address of principal executive offices including zip code)
Registrant’s telephone number, including area code: (212) 994-8200

 

 

Item 2. Acquisition or Disposition of Assets.

     On March 17, 2004, Antigenics Inc., a Massachusetts corporation and a wholly-owned subsidiary of the registrant, completed the sale of its manufacturing rights for feline leukemia virus (FeLV) vaccine to French veterinary pharmaceutical manufacturer Virbac S.A. (“Virbac”), a French corporation, pursuant to an Asset Purchase Agreement (the “Asset Purchase Agreement”), dated December 10, 2003, and amended March 17, 2004, by and between Antigenics Inc. and PP Manufacturing Corporation (“PP Manufacturing”), a Delaware corporation and Virbac S.A. the parent company of PP Manufacturing. The transaction is contingent upon USDA product licenses being transferred from Antigenics Inc. to Virbac within 90 days from the date of closing. In the event that the USDA licenses are not transferred, both parties will use best efforts to work to put the parties back in the positions that they would have been in had the closing not taken place. A copy of the Asset Purchase Agreement and amendment are attached hereto as Exhibit 2.1 and 2.2 respectively, and are incorporated herein by reference.

     Pursuant to the Asset Purchase Agreement, as amended, in exchange for the sale of all manufacturing rights for FeLV vaccine and related equipment and inventories, the registrant will receive $14,934,511 in cash. The amount of consideration was determined through arms-length negotiations between the registrant’s subsidiary and Virbac.

     In addition to the Asset Purchase Agreement, a sublease agreement was entered into with PP Manufacturing for a portion of the manufacturing facility in Framingham, MA. A copy of the Sublease agreement is attached hereto as Exhibit 10.1 and is incorporated herein by reference.

     Virbac has held exclusive perpetual worldwide marketing rights to the FeLV vaccine since 1983. The supply agreement, under which the registrant’s subsidiary had been supplying Virbac with the FeLV vaccine, expired in July 2002, at which point the registrant’s subsidiary began to supply product to Virbac through month-to-month supply agreements.

     The foregoing descriptions of the Asset Purchase Agreement, First Amendment to the Asset Purchase Agreement, and Sublease, do not purport to be complete and are qualified in their entirety by reference to the Asset Purchase Agreement, First Amendment to the Asset Purchase Agreement and Sublease, copies of which are attached hereto as Exhibits 2.1, 2.2, and 10.1 respectively.

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.

(a) Pro Forma Financial Information

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

     The following unaudited pro forma consolidated financial statements are presented for illustrative purposes only, giving effect to the sale of the manufacturing rights for FeLV vaccine as described and therefore are not necessarily indicative of the operating results that might have been achieved had the sale occurred as of an earlier date nor indicative of operating results which may occur in the future. In the opinion of management, these statements include all material adjustments necessary to reflect, on a pro forma basis, the effect of the asset sale on the historical consolidated financial information of the registrant. The consolidated statement of operations of the registrant for the year ended December 31, 2003 is derived from the audited financial statements of the registrant. The unaudited pro forma consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the registrant’s Form 10-K for the year ended December 31, 2003 as filed with the Securities Exchange Commission on March 15, 2004.

     Effective March 17, 2004 (the “Closing Date”), the registrant completed the sale of all of the assets relating to the manufacturing operations for FeLV, subject to the contingency regarding USDA licenses noted above in Item 2.

 

 

     The unaudited pro forma consolidated balance sheet as of December 31, 2003 has been prepared as if the asset sale occurred on December 31, 2003. The unaudited pro forma consolidated statement of operations has been prepared as if the divestiture of the FeLV vaccine manufacturing rights occurred on January 1, 2003.

Antigenics Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Balance Sheet

                         
    December 31, 2003
            Pro Forma    
    Historical
   Adjustments
   Pro Forma
ASSETS
                        
Cash and cash equivalents
   $ 57,211,895     $ 8,762,425     $ 65,974,320  
Short-term investments
     32,266,347       —       32,266,347  
Accounts receivable
     589,698       —       589,698  
Inventories
     871,256       (603,831 )     267,425  
Prepaid expenses
     1,899,558       —       1,899,558  
Deferred offering costs
     110,934       —       110,934  
Other current assets
     372,296       4,250,000       4,622,296  
 
    
 		      
 		      
 		  
Total current assets
     93,321,984       12,408,594       105,730,578  
Restricted cash
     8,521,049       —       8,521,049  
Plant and equipment, net
     25,032,838       (212,997 )     24,819,841  
Goodwill
     3,081,703       —       3,081,703  
Core and developed technology, net of accumulated amortization of $3,107,907
     7,964,666       —       7,964,666  
Other assets
     2,157,295       —       2,157,295  
 
    
 		      
 		      
 		  
Total assets
   $ 140,079,535     $ 12,195,597     $ 152,275,132  
 
    
 		      
 		      
 		  
LIABILITIES AND STOCKHOLDERS’ EQUITY
                        
Accounts payable
   $ 3,179,567     $ (12,669 )   $ 3,166,898  
Accrued liabilities
     11,302,367       420,944       11,723,311  
Other current liabilities
     2,000,000       (2,000,000 )     —  
Current portion, long-term debt
     5,622,736       —       5,622,736  
 
    
 		      
 		      
 		  
Total current liabilities
     22,104,670       (1,591,725 )     20,512,945  
Long-term debt, less current portion
     10,244,796       —       10,244,796  
Other long-term liabilities
     2,484,317       77,914       2,562,231  
STOCKHOLDERS EQUITY
                        
Preferred stock, par value $0.01 per share, 25,000,000 shares authorized; Series A convertible preferred stock, par value $0.01 per share; 31,620 shares designated, issued and outstanding, liquidation value of $31,844,140
     316       —       316  
Common stock, par value $0.01 per share, 100,000,000 shares authorized; 39,522,699 shares issued and outstanding
     395,226       —       395,226  
Additional paid-in capital
     384,457,557       —       384,457,557  
Deferred compensation
     (72,081 )     —       (72,081 )
Accumulated other comprehensive income
     162,802       —       162,802  
Accumulated deficit
     (279,698,068 )     13,709,408       (265,988,660 )
 
    
 		      
 		      
 		  
Total stockholders’ equity
     105,245,752       13,709,408       118,955,160  
 
    
 		      
 		      
 		  
Total liabilities and stockholders’ equity
   $ 140,079,535     $ 12,195,597     $ 152,275,132  
 
    
 		      
 		      
 		  

 

 

Antigenics Inc. and Subsidiaries
Unaudited Pro Forma Consolidated Statement of Operations

                         
    For the Year Ended December 31, 2003
            Pro Forma    
    Historical
   Adjustments
   Pro Forma
Revenues:
          
Product sales
   $ 3,465,023     $ (3,465,023 )   $ —  
Research and development
     984,662       —       984,662  
 
    
 		      
 		      
 		  
Total revenues
     4,449,685       (3,465,023 )     984,662  
 
    
 		      
 		      
 		  
Expenses:
                        
Cost of sales
     (1,941,521 )     (1,941,521 )     —  
Research and development
     (48,526,842 )     (547,011 )     (47,979,831 )
General and administrative
     (21,716,531 )     31,385       (21,747,916 )
 
    
 		      
 		      
 		  
Operating loss
     (67,735,209 )     (1,007,876 )     (68,743,085 )
Other income
                  
Non-operating income
     882,790       483,500       1,366,290  
Interest income
     1,165,911       141,749       1,307,660  
Interest expense
     (247,072 )     —       (247,072 )
 
    
 		      
 		      
 		  
Net loss
     (65,933,580 )     (382,627 )     (66,316,207 )
Dividends on Series A convertible preferred stock
     (224,140 )     —       (224,140 )
 
    
 		      
 		      
 		  
Net loss attributable to common stockholders
   $ (66,157,720 )   $ (382,627 )   $ (66,540,347 )
 
    
 		      
 		      
 		  
Net loss attributable to common stockholders per common share, basic and diluted
   $ (1.70 )           $ (1.71 )
 
    
 		              
 		  
Weighted average number of common shares outstanding, basic and diluted
     38,989,304             38,989,304  
 
    
 		              
 		  

 

 

Notes to Unaudited Pro Forma Consolidated Financial Statements

1. Disposal of FeLV related assets

     The divested assets were sold for $14,934,511. All assets and liabilities relating to FeLV vaccine manufacturing have been removed from the unaudited pro forma consolidated balance sheet at December 31, 2003. The gain on disposal of FeLV vaccine assets results in a reduction to the accumulated deficit in the unaudited pro forma consolidated balance sheet at December 31, 2003 and was calculated in the table that follows. For pro forma purposes, the gain has been calculated based on the carrying value of the related assets and liabilities as of December 31, 2003. The actual gain will be calculated at the closing date.

         
Cash proceeds received from sale
   $ 10,684,511  
Receivable
     4,250,000  
Less carrying value of assets sold and liabilities assumed:
        
Inventories
     603,831  
Plant and equipment
     212,997  
Accounts payable
     (12,669 )
Accrued liabilities
     (7,726 )
 
    
 		  
Pre-tax gain on disposal
     14,138,078  
Income tax expense
     94,220  
Estimated additional transaction expenses
     334,450  
 
    
 		  
Gain on disposal, net
   $ 13,709,408  
 
    
 		  

     As consideration for the purchase of the manufacturing rights for FeLV vaccine and related equipment and inventories, the registrant received $10,684,511 on or prior to closing. An additional $4,250,000 is due upon the earlier of: (a) eight months from the closing, or (b) upon the production of “Initial Batches” by Virbac as defined in the Asset Purchase Agreement, provided that Virbac shall attempt in good faith to manufacture the Initial Batches within six months of the closing date. Accordingly, this amount is included in other current assets on the unaudited pro forma consolidated balance sheet.

     For pro forma purposes, the cash and cash equivalents adjustment is $8,762,425, which reflects cash received at closing for the assets purchased. Virbac also purchased related inventories and equipment with carrying values of $603,831 and $212,997 respectively at December 31, 2003.

     In addition to the assets acquired per the Asset Purchase Agreement, upon closing, Virbac paid the registrant a $77,914 security deposit pursuant to the Sublease agreement which is included in the unaudited pro forma consolidated balance sheet as other long-term liabilities.

     A net adjustment to accrued liabilities of $420,944 reflects: (a) a $7,726 decrease for the employee vacation liability assumed by Virbac, (b) a $94,220 increase for the state income tax provision more fully described below, and (c) $334,450 of estimated additional transaction expenses.

     Other current liabilities are reduced by $2,000,000 for the application of Virbac’s advance deposit towards the sale, which was credited toward the total purchase price.

     Antigenics Inc. has net operating loss carry forwards available to apply against the entire federal taxable gain on disposal. The state taxable income on disposal, after applying available state net operating loss carry forwards has been estimated at $1,905,000 resulting in a tax provision of $94,220 after application of available state tax credits and has been included in accrued liabilities in the unaudited pro forma consolidated balance sheet at December 31, 2003.

2. Removal of FeLV vaccine manufacturing operations

     The divestiture of the FeLV vaccine assets includes the disposal of related manufacturing operations of the registrant’s Framingham, MA facility. To reflect this divestiture, the revenue and expenses of the FeLV vaccine operations have been removed from the unaudited pro forma consolidated statement of operations for the year ended December 31, 2003. For the year ended December 31, 2003, this pro forma adjustment resulted in an increase in net loss of $382,627.

 

 

     The change in net loss noted above includes the following items:

  •   Revenues in the amount of $3,465,023 have been omitted as they relate entirely to FeLV vaccine product sales.
 
  •   Costs of sales in the amount of $1,941,521 have been omitted on a pro forma basis as they pertain entirely to the FeLV vaccine revenues.
 
  •   Research and Development expenses have been reduced by $547,011 due to the reduced operating costs of the Framingham facility in relation to Key Employees (as defined in the Asset Purchase Agreement) and facility maintenance.
 
  •   General and Administrative expenses have increased $31,385 to reflect adjustments for utilities, and other administrative costs which is offset by rent historically included in cost of sales being reclassified to general and administrative expense.
 
  •   Non-operating income reflects a $483,500 increase relating to the agreed annual rental income pursuant to the Sublease agreement.
 
  •   Interest income of $141,749 has been calculated for twelve months on the cash received at closing and for four months on the cash due upon the manufacture of the Initial Batches at an interest rate of 1.2%.

     Pursuant to the Asset Purchase Agreement, PP Manufacturing was granted the right to offer employment to Key Employees. On the day of closing ten Key Employees took employment with PP Manufacturing. As indicated above, these employee costs for the year ended December 31, 2003 have been removed from the unaudited pro forma consolidated statement of operations.

     Legal fees relating to the sale in the amount of $414,000 were incurred during 2003. These amounts are reflected in the historical consolidated statement of operations and no adjustment has been made in the unaudited pro forma consolidated statement of operations to remove these expenses.

     The unaudited pro forma consolidated statement of operations does not include the gain on disposal or the related tax provision of $94,220. In addition, a $200,000 payment to GTC Biotherapeutics, Inc. pursuant to the First Amendment to Sublease as attached hereto as Exhibit 10.2, has not been reflected in the unaudited pro forma consolidated statement of operations, but has been included in “Estimated additional transaction expenses” for purposes of calculating the gain on disposal in Note 1 above.

     (b) Exhibits

     
2.1
  Asset Purchase Agreement dated December 10, 2003, by and between Antigenics Inc., a Massachusetts corporation and a wholly-owned subsidiary of Antigenics Inc., a Delaware corporation and PP Manufacturing Corporation, a Delaware corporation and Virbac S.A., a French corporation. Filed herewith.
2.2
  First Amendment to Asset Purchase Agreement dated March 17, 2004, by and between Antigenics Inc., a Massachusetts corporation and a wholly-owned subsidiary of Antigenics Inc., a Delaware corporation and PP Manufacturing Corporation, a Delaware corporation and Virbac S.A., a French corporation. Filed herewith.
10.1
  Sublease Agreement by and between Antigenics Inc., a Massachusetts corporation, f/k/a Aquila Biopharmaceuticals, and PP Manufacturing, a Delaware corporation, dated March 16, 2004. Filed herewith.
10.2
  First Amendment to Sublease by and between Antigenics Inc., f/k/a/ Aquila Biopharmaceuticals, and GTC Biotherapeutics, Inc., dated March 16, 2004.

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

         
      ANTIGENICS INC.
 
        
Date: April 1, 2004
  By:   /s/ Garo H. Armen
     
 
      Garo H. Armen, Ph.D.
Chairman and Chief Executive Officer

 

EX-2.1 3 b49993agexv2w1.txt ASSET PURCHASE AGREEMENT Exhibit 2.1 --------------------------------- ASSET PURCHASE AGREEMENT --------------------------------- BY AND BETWEEN ANTIGENICS INC., A MASSACHUSETTS CORPORATION AND A WHOLLY-OWNED SUBSIDIARY OF ANTIGENICS INC., A DELAWARE CORPORATION AND PP MANUFACTURING CORPORATION, A DELAWARE CORPORATION, AND VIRBAC S.A., A FRENCH CORPORATION DECEMBER 10, 2003 TABLE OF CONTENTS
PAGE SECTION 1 -SALE AND PURCHASE OF ASSETS................................................................2 1.1 Sale of Assets.................................................................................2 1.2 Method of Conveyance...........................................................................2 1.3 Assumption of Liabilities......................................................................2 1.4 Price..........................................................................................3 1.5 Allocation of Price............................................................................5 1.6 Closing........................................................................................5 SECTION 2 -REPRESENTATIONS AND WARRANTIES OF SELLER...................................................7 2.1 Organization...................................................................................7 2.2 Authority; Approval Enforceability.............................................................7 2.3 No Violation...................................................................................7 2.4 Title to Assets; Liens.........................................................................7 2.5 Condition of Tangible Assets ..................................................................8 2.6 reserved. .....................................................................................8 2.7 Permits........................................................................................8 2.8 Litigation.....................................................................................8 2.9 Environmental Matters..........................................................................8 2.10 Brokers' and Finders' Fees.....................................................................9 2.11 Employment Agreements and Employee Plans.......................................................9 2.12 No Other Representations and Warranties.......................................................10 SECTION 3 -REPRESENTATIONS AND WARRANTIES OF BUYER ..................................................11 3.1 Organization..................................................................................11 3.2 Authority.....................................................................................11 3.3 No Violation..................................................................................11 3.4 Brokers' and Finders' Fees....................................................................11 3.5 Guarantee.....................................................................................12 3.6 Investigation.................................................................................12 SECTION 4 -COVENANTS AND AGREEMENTS..................................................................12 4.1 Corporate Examinations and Investigations.....................................................12
-i- TABLE OF CONTENTS (CONTINUED)
PAGE 4.2 Expenses......................................................................................12 4.3 Authorization from Others.....................................................................12 4.4 Related Agreements............................................................................13 4.5 Purchase of Inventories, Raw Materials, and Other Office Assets...............................13 4.6 Key Employees; Employment.....................................................................14 4.7 Non-Transferable Permits......................................................................15 4.8 Access to Records and Files...................................................................15 4.9 Further Assurances............................................................................16 4.10 Seller Assistance; Pre-Closing Access.........................................................16 4.11 Reorganization of Equipment for the Benefit of Seller.........................................17 SECTION 5 -CONDITIONS PRECEDENT TO THE OBLIGATION OF BUYER TO CLOSE..................................17 5.1 Representations and Warranties True...........................................................17 5.2 Litigation....................................................................................17 5.3 Deliveries of Seller..........................................................................17 5.4 Rights to be Secured With Respect to Third Parties............................................17 5.5 Necessary Permits.............................................................................17 5.6 Legal Opinion.................................................................................17 5.7 Employees.....................................................................................18 5.8 Phase I Site Assessment Report................................................................18 SECTION 6 -CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLER TO CLOSE.................................18 6.1 Representations and Warranties True...........................................................18 6.2 Litigation....................................................................................18 6.3 Deliveries of Buyer...........................................................................18 6.4 Employees.....................................................................................18 6.5 Rights With Respect to Third Parties..........................................................18 6.6 Purchase of Inventories, Raw Materials, and Other Office Assets ..............................19 SECTION 7 -INDEMNIFICATION...........................................................................19
-ii- TABLE OF CONTENTS (CONTINUED)
PAGE 7.1 By Seller.....................................................................................19 7.2 By Buyer......................................................................................19 7.3 Threshold.....................................................................................19 7.4 Minimum Claim.................................................................................20 7.5 Maximum Liability; Limitation on Liability....................................................20 7.6 Claims Period.................................................................................20 7.7 Indemnification Procedures....................................................................20 7.8 Third Party Recoveries........................................................................21 7.9 Legislation...................................................................................21 7.10 Contingent Liabilities........................................................................21 7.11 No Third Party Beneficiaries..................................................................21 7.12 Exclusive Remedy..............................................................................21 7.13 Liabilities Under Prior Agreements............................................................21 SECTION 8 -TERMINATION OF AGREEMENT..................................................................23 8.1 Termination...................................................................................23 8.2 Effect of Termination.........................................................................23 SECTION 9 -MISCELLANEOUS.............................................................................23 9.1 Confidentiality...............................................................................23 9.2 Uniform Commercial Code And United Nations Convention Warranties..............................24 9.3 Public Announcements..........................................................................24 9.4 Notices.......................................................................................24 9.5 Entire Agreement; Prior Agreements............................................................25 9.6 Waivers and Amendments; Non-Contractual Remedies; Preservation of Remedies....................25 9.7 Governing Law; Dispute Resolution.............................................................26 9.8 Governing Language............................................................................26 9.9 Enforceability in Jurisdictions; Consent......................................................26 9.10 Survival......................................................................................26 9.11 Binding Effect; No Assignment.................................................................27 9.12 Variations in Pronouns........................................................................27
-iii- TABLE OF CONTENTS (CONTINUED)
PAGE 9.13 Counterparts..................................................................................27 9.14 Severability..................................................................................27 9.15 Knowledge.....................................................................................27 9.16 Appendices; Schedules.........................................................................28* 9.17 Headings......................................................................................28
*APPENDICES AND SCHEDULES HAVE BEEN OMITTED. THE REGISTRANT WILL FURNISH SUPPLEMENTALLY TO THE COMMISSION UPON REQUEST. -iv- ASSET PURCHASE AGREEMENT This ASSET PURCHASE AGREEMENT (this "Agreement") is dated as of December 10, 2003 (the "Effective Date"), by and between ANTIGENICS INC., a Massachusetts corporation and a wholly-owned subsidiary of ANTIGENICS INC., a Delaware corporation, having its offices at 3 Forbes Road, Lexington, MA 02421 U.S.A. ("SELLER") and PP MANUFACTURING CORPORATION, a Delaware corporation that will have offices located on or after the Closing at 175 Crossing Boulevard, Framingham, Massachusetts, 01702-5404 ("SUB") and VIRBAC S.A., a French corporation having its offices at 1 ere Avenue-2065 m L.I.D.-06516 CARROS FRANCE ("PARENT," and together with SUB, "BUYER"). WITNESSETH WHEREAS, SELLER and PARENT are parties to (i) that certain Agreement dated June 13, 1983 by and between Virbac Laboratories S.A. and Cambridge Bioscience Corporation (as amended by Amendment dated December 20, 1988, by Amendment Agreement dated May 23, 1989, by Agreement and Amendment dated December 3, 1990, by Amendment Agreement dated April 21, 1993, and by Option Agreement dated September 30, 1993), pursuant to which PARENT obtained a perpetual, royalty-free, fully paid-up, exclusive license to market and have customers use a vaccine protective against feline leukemia virus ("FeLV") developed by the parties thereunder (the "Vaccine"), (ii) that certain Supply Agreement dated May 24, 1989 by and between Cambridge Bioscience Corporation and Virbac, Inc. (as amended by Amendment No. 1 dated December 21, 1990 and by Amendment No. 2 dated April 21, 1993) relating to the supply of the Vaccine for the North American market, and (iii) that certain Letter Agreement dated November 4, 2003 (and any successor agreement) by and between PARENT and SELLER relating to the supply of P45 (as hereinafter defined) for the ex-North American market (collectively, the "Prior Agreements"); WHEREAS, SELLER and PARENT have agreed to terminate the Prior Agreements and the agreements set forth on Appendix A (the "Other Prior Agreements") pursuant to this Agreement upon the Closing (as hereinafter defined); WHEREAS, SELLER desires to sell to SUB, and SUB desires to purchase from SELLER, certain equipment and other tangible assets listed on Schedule 1.1.1 hereto and utilized in the manufacture of (i) the antigen described in Appendix B to this Agreement ("P45") and (ii) a veterinary grade extract of Quillaja Saponaria bark as more specifically described on Appendix C to this Agreement ("QA-21 Adjuvant"); WHEREAS, pursuant to that certain Patent Purchase Agreement (as defined in Section 1.6.1(f)), SELLER desires to sell to PARENT, and PARENT desires to purchase from SELLER, the intangible assets set forth on Schedule 1.1.2 hereto; WHEREAS, SELLER desires to license to SUB and SUB desires to obtain a license from SELLER under certain intellectual property rights owned by or licensed to SELLER for the manufacture, use, sale, offer for sale or importation world-wide of the P45, and QA-21 Adjuvant for use in its own animal healthcare vaccines formulated to contain or comprise P45 (and/or other antigens) as one component and QA-21 Adjuvant as another component (the "Licensed Assets"); and WHEREAS, SELLER desires to grant SUB and SUB desires to obtain, a sublease to that portion of approximately 20,432 rentable square feet located in part on the first and second floors of SELLER's Framingham authorized manufacturing site (Establishment License no. 317) located at 175 Crossing Boulevard, Framingham, Massachusetts, 01702-5404 which is currently being occupied and utilized by SELLER for the manufacture of P45 and QA-21 Adjuvant (the "Manufacturing Site"). NOW THEREFORE, in consideration of the foregoing and of the mutual covenants set forth below, the parties hereby agree as follows: SECTION 1 -SALE AND PURCHASE OF ASSETS 1.1 Sale of Assets. On the terms and subject to the conditions of this Agreement, at the Closing (as defined in Section 1.6 hereof): 1.1.1 SELLER shall sell, convey, assign, transfer and deliver to SUB, and SUB shall purchase, acquire and accept delivery from SELLER the tangible properties and assets on Schedule 1.1.1 (the "Tangible Assets"). For the avoidance of doubt, the Tangible Assets shall specifically exclude any and all intellectual property rights, and any and all rights in or to the compound referred to as QS-21 Adjuvant (as defined in the attached Appendix C), as well as any and all assets of SELLER not specifically identified herein as Tangible Assets (the "Excluded Assets"). 1.1.2 Pursuant to the Patent Purchase Agreement, SELLER shall sell, convey, assign, transfer and deliver to PARENT and PARENT shall purchase, acquire and accept delivery of from SELLER certain intangible assets as more specifically described on Schedule 1.1.2 ("Intangible Assets"). 1.2 Method of Conveyance. The sale, transfer, conveyance, assignment and delivery by SELLER of the Tangible Assets to SUB in accordance with Section 1.1 hereof shall be effected on the Closing Date (as defined in Section 1.6) by SELLER's execution and delivery to SUB of one or more bills of sale in the form and scope reasonably satisfactory to SUB (the "Conveyance Documents"). At the Closing, good, valid and marketable title to the Tangible Assets shall be transferred, conveyed, assigned and delivered by SELLER to SUB pursuant to the Conveyance Documents, free and clear of any and all liens, encumbrances, mortgages, security interests, pledges, claims, equities and other restrictions or charges of any kind or nature whatsoever. 1.3 Assumption of Liabilities. At the Closing, SUB shall assume and agree to satisfy and discharge as the same shall become due, the liabilities and obligations of SELLER that are to be performed after the Closing and described on Schedule 1.3. The liabilities to be assumed by SUB under this Agreement are hereinafter sometimes referred to as the "Assumed Liabilities." Except as expressly set forth in this Section 1.3 and Section 1.4.5, or as described on 2 Schedule 1.3, neither SUB nor PARENT shall assume or be responsible at any time for any liability, obligation, debt or commitment of SELLER or any of its Affiliates (as defined herein), whether absolute or contingent, accrued or unaccrued, asserted or unasserted, or otherwise, including but not limited to any liabilities, obligations, debts or commitments of SELLER incident to, arising out of or incurred with respect to, this Agreement and the transactions contemplated hereby including any and all sales, income or other taxes arising out of the transactions contemplated hereby. "Affiliate" means any entity directly or indirectly controlling, controlled by or under common control with SUB, PARENT or SELLER, with "control" meaning the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of the entity, whether through the ownership of voting securities, by contract or otherwise. Without limiting the generality of the foregoing, SELLER expressly acknowledges and agrees that SELLER shall retain, and that neither SUB nor PARENT shall assume or otherwise be obligated to pay, perform, defend or discharge, with respect to liabilities incurred prior to the Closing Date (a) any liability of SELLER for taxes (other than taxes referenced in Section 1.4.5), whether measured by income or otherwise, (b) any liability of SELLER in connection with the violation of the terms of any SELLER Employee Plan, (c) any liability of SELLER under any federal, state or local law, rule, regulation, ordinance, program, permit, license or other legal requirement relating to health, safety, hazardous materials and environmental matters applicable to the Manufacturing Site (excluding any such liability that arises as a result of SUB's or PARENT's actions, or, where an action is required to be taken by law, rule or regulation, SUB's or PARENT's inaction, including the failure to comply with any European rules or regulations related to manufacturing practices), or (d) any liability or obligation of SELLER relating to any default taking place before the Closing Date under any of the Assumed Liabilities to the extent such default solely created the liability or obligation. 1.4 Price. In consideration for the sale of the Tangible Assets pursuant to this Agreement, the sale of the Intangible Assets pursuant to the Patent Purchase Agreement, and the licensing of the Licensed Assets pursuant to the License Agreement (as defined in Section 1.6.1(d)), SUB and/or PARENT shall deliver to SELLER an aggregate amount (the "Price") of fourteen million two hundred and fifty thousand US dollars ($14,250,000). Payments shall be made as follows: 1.4.1 The parties acknowledge and agree that PARENT has already paid SELLER one million US dollars ($1,000,000) (which amount shall be credited toward the purchase price for the Intangible Assets pursuant to the Patent Purchase Agreement), of which (i) two-hundred fifty thousand US dollars ($250,000) shall be refundable only in the event SELLER fails to obtain any consents necessary from the lessor of the Manufacturing Site in order to execute the Sublease Agreement (as defined in Section 1.6.1(e) hereof), and (ii) the remaining seven hundred fifty thousand US dollars ($750,000) shall be refundable only in the event either SUB or PARENT terminates this Agreement pursuant to Section 8.1(ii) hereof, or SELLER terminates this Agreement pursuant to Section 8.1(i) due to a failure of SELLER to obtain all consents as contemplated in Section 6.5. 1.4.2 Upon execution of this Agreement, PARENT shall deliver to SELLER one million US dollars ($1,000,000) (which amount shall be credited toward the purchase price for the Intangible Assets pursuant to the Patent Purchase Agreement), which shall be refundable only in the event either SUB or PARENT terminates this Agreement pursuant to Section 8.1(ii) 3 hereof, or SELLER terminates this Agreement pursuant to Section 8.1(i) due to a failure of SELLER to obtain all consents as contemplated in Section 6.5. PARENT shall make such payment by delivering to SELLER the aforementioned amount by official bank check or wire transfer (to an account specified by SELLER in writing), in next day funds. 1.4.3 At the Closing, (a) PARENT shall deliver to SELLER two million US dollars ($2,000,000) (which amount shall be credited toward the purchase price for the Intangible Assets pursuant to the Patent Purchase Agreement). (b) SUB shall deliver to SELLER six million US dollars ($6,000,000). (c) SUB shall deliver to SELLER payment for SELLER's inventories and raw materials in the amounts set forth in the applicable invoice(s) as set forth in Section 4.5. (d) SUB shall deliver to SELLER payment for the Other Office Assets (as defined in Section 4.5.5 of this Agreement) in the amounts to be mutually agreed upon in writing by SELLER and SUB. (e) All payments to SELLER as described in this Section 1.4.3 shall be made by official bank check or wire transfer (to an account specified by SELLER in writing), in next day funds. 1.4.4 After the Closing, upon the production by SUB of at least three (3) industrial batches of P45 for a total quantity of 100 grams, in conformance with the "Release Criteria" for P45 as set forth in Appendix B, and a total of 10 grams of QA-21 Adjuvant (the "Initial Batches"), provided that SUB shall attempt in good faith to manufacture the Initial Batches within six (6) months after the Closing Date, SUB shall deliver to SELLER four million two hundred fifty thousand US dollars ($4,250,000). In the event SUB fails to manufacture the Initial Batches and fails to attempt in good faith to do so as required hereunder, such payment shall become immediately due and payable upon the sixth (6th) month anniversary of the Closing Date. In the event SUB fails to manufacture the Initial Batches and has attempted in good faith to do so, such payment shall become immediately due and payable upon the eighth (8th) month anniversary of the Closing Date. SUB shall make any such payment set forth in this Section 1.4.4 by delivering to SELLER the aforementioned amount by official bank check or wire transfer (to an account specified by SELLER in writing), in next day funds. PARENT shall provide SUB with all necessary assistance in furtherance of SUB performing its manufacturing obligations as set forth in this Section 1.4.4. 1.4.5 In the event either SUB or PARENT is required to withhold any taxes from any of the payments to be made pursuant to this Agreement or the Related Agreements pursuant to applicable tax laws, then the amount of such payments shall be increased as necessary so that the net amount actually received by SELLER will equal the full amount SELLER would have received had no such withholding been required. 1.4.6 BUYER and SELLER acknowledge and agree that none of the consideration paid by either SUB or PARENT as set forth hereunder shall constitute 4 consideration for the sublease of the Manufacturing Site premises pursuant to the Sublease Agreement. 1.5 Allocation of Price. The Price will be allocated among the Tangible Assets, Intangible Assets and Licensed Assets in accordance with Schedule 1.5 attached hereto. Subject to the requirements of Section 1060 of the Internal Revenue Code and the Treasury regulations thereunder (and any similar provision of state, local or foreign law, as appropriate), all tax returns and reports filed by BUYER and SELLER (including, but not limited to Internal Revenue Service Form 8594) will be prepared consistently with such allocation and BUYER and SELLER shall use their reasonable best efforts to sustain such allocation in any subsequent tax audit or tax dispute. 1.6 Closing. The closing of the sale and purchase of the Tangible Assets pursuant hereto and the Intangible Assets pursuant to the Patent Purchase Agreement and the other transactions contemplated hereby (the "Closing"), shall take place at a time, on a date and at a place to be mutually agreed to by BUYER and SELLER in writing or, failing such agreement, on the second business day after the satisfaction or waiver (by the party entitled to grant such waiver) of the conditions set forth in Sections 5 and 6 hereof; provided, however, that if on March 1, 2004, (i) the conditions set forth in Section 5 have not been met or waived, then BUYER shall be entitled to postpone the Closing, by notice to SELLER, until up to five (5) business days after such condition shall have been met or waived, or (ii) the conditions set forth in Section 6 have not been met or waived, then SELLER shall be entitled to postpone the Closing, by notice to BUYER, until up to five (5) business days after such condition shall have been met or waived; provided, further, that in no event shall the Closing be postponed past May 1, 2004 unless BUYER and SELLER shall have agreed in writing to such postponement, or at such other place or such other time or date as BUYER and SELLER agree in writing. The date of such Closing is referred to herein as the "Closing Date." 1.6.1 Deliveries of SELLER. At or prior to the Closing, SELLER shall deliver to BUYER: (a) the Conveyance Documents, (b) a certificate executed by an authorized officer of SELLER, on behalf of SELLER, to the effect that the matters set forth in Section 5.1 are true and correct and the conditions set forth therein have been satisfied as of the Closing Date; (c) a certificate executed by the secretary of SELLER, dated as of the Closing Date, certifying that all requisite corporate actions of SELLER to authorize the execution and delivery of this Agreement and the other documents and instruments to be executed and delivered pursuant to this Agreement, and the consummation by SELLER of the transactions contemplated by this Agreement, have been taken; (d) a license agreement executed by SELLER substantially in the form attached hereto as Appendix D, pursuant to which SUB obtains a perpetual, non-terminable, royalty-free, right and license in and to the Licensed Assets for use in the Field (as defined therein) subject to the provisions thereof (the "License Agreement"); 5 (e) a sublease agreement executed by SELLER substantially in the form attached hereto as Appendix E, pursuant to which SUB subleases the Manufacturing Site (the "Sublease Agreement"); (f) a patent purchase agreement executed by SELLER substantially in the form attached hereto as Appendix F, pursuant to which PARENT purchases the Intangible Assets (the "Patent Purchase Agreement"); (g) a procedures manual(s) containing all reasonably necessary control and manufacturing procedures related to and for the manufacture of P45, QA-21 Adjuvant and the Vaccine as contemplated by this Agreement, the Patent Purchase Agreement, and the License Agreement (the "Manual"); and (h) a Phase I Site Assessment Report prepared following the "Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process, ASTM E-1527-00" (the "Phase I Site Assessment Report") to be conducted by a consultant retained by SELLER, and reasonably acceptable to BUYER, with each of BUYER and SELLER bearing liability of one-half the cost of such consultant's services. 1.6.2 Deliveries of BUYER. At or prior to the Closing, BUYER shall deliver to SELLER: (a) that portion of the Price required to be paid at Closing pursuant to Section 1.4.3, and payments for the inventories, raw materials, and Other Office Assets pursuant to Sections 1.4.3 and 4.5; (b) a certificate executed by an authorized officer of SUB, on behalf of SUB, to the effect that the matters set forth in Section 6.1 are true and correct and the conditions set forth therein have been satisfied as of the Closing Date; (c) a certificate executed by an authorized officer of PARENT, on behalf of PARENT, to the effect that the matters set forth in Section 6.1 are true and correct and the conditions set forth therein have been satisfied as of the Closing Date; (d) a certificate executed by the secretary of SUB, dated as of the Closing Date, certifying that all requisite corporate actions of SUB to authorize the execution and delivery of this Agreement and the other documents and instruments to be executed and delivered pursuant to this Agreement, and the consummation by SUB of the transactions contemplated by this Agreement, have been taken; (e) a certificate executed by an authorized officer of PARENT, dated as of the Closing Date, certifying that all requisite corporate actions of PARENT to authorize the execution and delivery of this Agreement and the other documents and instruments to be executed and delivered pursuant to this Agreement, and the consummation by PARENT of the transactions contemplated by this Agreement, have been taken; 6 (f) an agreement for assumption of the Assumed Liabilities by SUB containing provisions that are usual and customary for assuming the liabilities involved, executed by SUB; (g) the License Agreement, executed by SUB; (h) the Sublease Agreement, executed by SUB; (i) the Patent Purchase Agreement executed by PARENT; and (j) a supply agreement executed by PARENT and SUB substantially in the form attached hereto as Appendix G, pursuant to which PARENT and SUB agree to supply SELLER with QS-21 Adjuvant on the terms set forth therein (the "Supply Agreement"). SECTION 2 -REPRESENTATIONS AND WARRANTIES OF SELLER SELLER, represents and warrants to BUYER as follows: 2.1 Organization. SELLER is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Massachusetts. 2.2 Authority; Approval Enforceability. SELLER has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, have been duly authorized by all necessary corporate action on the part of SELLER. This Agreement has been duly executed and delivered by SELLER. Assuming due authorization, execution and delivery by BUYER, this Agreement constitutes, and when delivered at the Closing the Conveyance Documents and Related Agreements and any conveyance documents thereunder will constitute, the legal, valid and binding obligations of SELLER, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general principles of equity. 2.3 No Violation. To SELLER's knowledge, neither the execution and delivery of this Agreement, nor the performance by SELLER of its obligations hereunder, nor the consummation of the transactions contemplated hereby or thereby, will (i) violate any statute or law or any judgment, decree, order, regulation or rule of any court or governmental authority to which SELLER is bound; or (ii) violate, conflict with, result in a breach of or constitute a default under, any agreement set forth on Schedule 2.3 ("Material Agreements"), where such violation, conflict, breach or default would have a material adverse impact on the Tangible Assets. To SELLER's knowledge, the Material Agreements are the only material agreements to which the Tangible Assets are bound or subject. 2.4 Title to Assets; Liens. SELLER owns good, valid and marketable title to all of the Tangible Assets, free and clear of any and all liens, encumbrances, mortgages, security interests, pledges, claims, equities and other restrictions or charges of any kind or nature whatsoever. Upon delivery of and payment for the Tangible Assets as herein provided, SUB will 7 acquire good, valid and marketable title to all of the Tangible Assets, free and clear of any and all liens, encumbrances, mortgages, security interests, pledges, claims, equities and other restrictions or charges of any kind or nature whatsoever. 2.5 Condition of Tangible Assets. Except for normal wear and tear or as otherwise set forth on Schedule 2.5, the Tangible Assets are in substantially the same condition as on September 30, 2003. 2.6 reserved. 2.7 Permits. Set forth on Schedule 2.7 are all of the material licenses, permits, franchises, orders, registrations, authorizations, documentations or approvals of any federal, state, local or foreign governmental or regulatory body relating to the Tangible Assets and the use of the Manufacturing Site for the manufacture of P45, QA-21 Adjuvant and the Vaccine (collectively, "Permits") of SELLER. All such Permits are in full force and effect and, except for those Permits identified in Schedule 2.7 as "Non-Transferable Permits," such Permits will be transferred to SUB at or prior to Closing. Prior to the Closing, and for a reasonable time thereafter, SELLER shall cooperate with SUB, at SUB's sole cost and expense, to assist SUB in obtaining Permits substantially similar to the Non-Transferable Permits that are reasonably necessary for SUB to use the Tangible Assets and Manufacturing Site for the manufacture of P45, QA-21 Adjuvant and the Vaccine as of the Closing Date. 2.8 Litigation. Except as otherwise set forth in Schedule 2.8, to the knowledge of SELLER as of the Effective Date, there are no claims, actions, suits, investigations or proceedings (regardless of whether formal or informal) against SELLER pending or threatened in any court or before or by any governmental authority, or before any arbitrator, relating to and that would have a material adverse effect (whether covered by insurance or not) on the Tangible Assets, and to the knowledge of SELLER as of the Effective Date, there is no basis for any such claim, action, suit, investigation or proceeding. 2.9 Environmental Matters. Except as set forth on Schedule 2.9 or where the existence of an item would not have a material adverse effect on the Manufacturing Site, the Tangible Assets or the operations of SUB at the Manufacturing Site as were previously conducted by SELLER at the Manufacturing Site prior to the Effective Date, to the knowledge of SELLER as of the Effective Date or as of the date of receipt of the Phase I Site Assessment Report with respect to items first disclosed thereunder to SUB or PARENT, (i) there are no pending or threatened allegations, claims, liabilities, investigations, litigation, administrative proceedings, judgments, decrees or orders (collectively "Environmental Claims") relating to any alleged violation of Environmental Laws (as defined below) asserted against SELLER or relating to the Manufacturing Site; (ii) SELLER has obtained all permits under applicable Environmental Laws necessary for the operation of the Tangible Assets and Manufacturing Site and related activities; all such permits are in good standing and SELLER is in compliance with all terms and conditions of these permits; (iii) all operations or activities upon, or any use of or occupancy of the Manufacturing Site, or any portion thereof, by SELLER, and any agent, contractor or employee of SELLER, are now and have been in all respects in compliance with all applicable Environmental Laws; (iv) SELLER has not caused or permitted the use, generation, reclamation, transportation, treatment, storage or disposal of any Hazardous Material (as defined below) in 8 violation of applicable Environmental Laws or in a manner that could require any removal or remedial action at, on, in or about the Manufacturing Site or at any other site; (v) SELLER has not assumed the liability of any person for any Environmental Claims; (vi) no work, repair, remedy, construction or capital expenditure is required by any applicable Environmental Laws for the continued lawful use of the Tangible Assets or Manufacturing Site and (vii) SELLER has kept the Tangible Assets and the Manufacturing Site free of any lien imposed pursuant to any Environmental Laws. The term "Environmental Laws" shall mean all federal, state and local laws, statutes and ordinances relating to pollution or the regulation and protection of human health or the environment, including without limitation those relating to emissions, discharges, releases or threatened releases of Hazardous Material or the use or production of biological agents or otherwise relating to the manufacture, processing, use, treatment, storage, disposal, transportation or cleanup of Hazardous Material. The term "Hazardous Material" shall mean (a) oil or other petroleum products; (b) "hazardous substances" as defined by the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. ss.ss. 9601 et seq.; (c) "hazardous wastes" as defined by the Resource Conservation and Recovery Act, 42 U.S.C. ss.ss. 6901 et seq.; (d) "toxic substances" as defined by the Toxic Substances Control Act, 15 U.S.C. ss.ss. 2601 et seq.; (e) "hazardous materials" as defined by the Hazardous Materials Transportation Act, 49 U.S.C. ss. 1802; (f) radioactive materials, including those subject to the Atomic Energy Act, 42 U.S.C. ss.ss. 2011 et seq. and (g) any other pollutant, chemical or substance that is regulated under Environmental Laws. 2.10 Brokers' and Finders' Fees. SELLER has not incurred, nor will it incur, directly or indirectly, any liability for brokerage or finders' fees or agents' commissions or any similar charges in connection with this Agreement or the Related Agreements, or the transactions contemplated hereby or thereby. 2.11 Employment Agreements and Employee Plans. With respect to the Business Employees (as defined herein), to the knowledge of SELLER, SELLER (i) has at all times been in substantial compliance with all applicable legal requirements with respect to (a) employment, employment practices, employment verification (including, but not limited to, verification required under the Immigration Reform and Control Act of 1986, as amended), and (b) terms and conditions of employment and wages, overtime pay, and hours, withholding and workers' compensation; and (ii) has not illegally discriminated with regard to employment on the basis of age, color, national origin, race, religion, sex, handicap, or on the basis of any other legally prohibited category or classification. With respect to any "Employee Plan" (as defined herein) that SELLER maintains, participates under or is required to contribute to (i) each Pension Plan (as defined herein) that is intended to be qualified under Section 401(a) of the Internal Revenue Code has received a favorable determination letter or opinion letter, as applicable, from the IRS with respect to its qualified status and with respect to the tax-exempt status of the trust of any such Pension Plan under Section 501(a) of the Internal Revenue Code or SELLER has adopted a prototype plan the sponsor of which is not the SELLER, and there is no matter pending (other than determination letter filings) with respect to any Employee Plan before the IRS, the Department of Labor, the Securities and Exchange Commission, the Pension Benefit Guaranty Corporation or any other federal or provincial government agency; (ii) each Employee Plan, the administrator and fiduciaries of each Employee Plan, and SELLER have complied in all material respects with the applicable requirements of ERISA (as defined herein) (including, but not limited to, the fiduciary responsibilities imposed by Part 4 of Title I, Subtitle B of ERISA), the 9 Internal Revenue Code and any other applicable rules and regulations governing each Employee Plan, except where the failure to do so would not be reasonably expected to have a material adverse effect on the Employee Plan, the administrator and fiduciaries of the Employee Plan , or SELLER; and (iii) each Employee Plan has at all times been administered in all material respects in compliance with its terms and in accordance with all applicable rules and regulations, except where the failure to do so would not be reasonably expected to have a material adverse effect on the Employee Plan. For purposes of this Agreement, the term "Employee Plan" includes any written pension, retirement, savings, profit-sharing, deferred compensation, disability, medical, dental, health, life, incentive, severance pay, death benefit, group insurance, stock option, stock purchase, bonus, or vacation pay trust, contract, agreement, or policy (including, without limitation, any pension plan as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") ("Pension Plan"), and any welfare plan as defined in Section 3(1) of ERISA ("Welfare Plan")), whether or not any of the foregoing is funded or insured, (1) which provides benefits to Business Employees and (2) to which SELLER is a party or by which it is bound or which is maintained by any entity that, together with SELLER, would be treated as a single employer under Section 414 of the Internal Revenue Code. 2.12 No Other Representations and Warranties. SELLER SHALL NOT BE DEEMED TO HAVE MADE TO SUB OR PARENT ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OTHER THAN AS EXPRESSLY MADE BY SELLER IN THIS AGREEMENT OR THE RELATED AGREEMENTS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SELLER MAKES NO REPRESENTATION OR WARRANTY TO SUB OR PARENT WITH RESPECT TO ANY INFORMATION OR DOCUMENTS MADE AVAILABLE TO SUB OR PARENT OR EITHER OF THEIR COUNSEL, ACCOUNTANTS OR ADVISORS WITH RESPECT TO THE TANGIBLE ASSETS, INTANGIBLE ASSETS, LICENSED ASSETS, MANUFACTURING SITE AND/OR BUSINESS EXCEPT AS EXPRESSLY COVERED IN A REPRESENTATION AND WARRANTY CONTAINED IN THE FOREGOING DOCUMENTS. IN ANY EVENT, SELLER MAKES NO WARRANTY OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR QUALITY AS TO THE FOREGOING ASSETS, OR ANY PART THEREOF, OR THE MANUFACTURING SITE OR BUSINESS, OR THE ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT, IT BEING UNDERSTOOD THAT EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH HEREIN AND IN THE RELATED AGREEMENTS, THE TANGIBLE ASSETS, INTANGIBLE ASSETS, LICENSED ASSETS, AND MANUFACTURING SITE ARE TO BE CONVEYED HEREUNDER AND THEREUNDER "AS IS WHERE IS" AT THE CLOSING, AND IN THEIR THEN PRESENT CONDITION (SUBJECT TO SECTION 2.5 ABOVE WITH RESPECT TO THE TANGIBLE ASSETS), AND BUYER SHALL RELY UPON ITS OWN EXAMINATION THEREOF. NOTWITHSTANDING THE FOREGOING, SELLER HEREBY REPRESENTS AND WARRANTS THAT, EXCEPT WHERE THE FAILURE TO DO SO WOULD NOT BE MATERIAL TO BUYER'S DUE DILIGENCE INQUIRY, SELLER HAS MADE COMMERCIALLY REASONABLE EFFORTS TO PRODUCE OR MAKE AVAILABLE TO BUYER ANY AND ALL DOCUMENTS AND INFORMATION (SPECIFICALLY EXCEPTING ALL DOCUMENTS WHICH RELATE TO THE QS-21 ADJUVANT OR THE MANUFACTURE, SUPPLY, USE, SALE, OFFER FOR SALE OR IMPORTATION OF THE QS-21 ADJUVANT) IN RESPONSE TO BUYER'S DUE DILIGENCE INQUIRIES 10 RELATED TO THE TANGIBLE ASSETS, INTANGIBLE ASSETS, LICENSED ASSETS AND/OR THE MANUFACTURING SITE OR BUSINESS AND THAT AS OF THE EFFECTIVE DATE, SELLER HAS NO REASONABLE BASIS TO BELIEVE THAT ANY DOCUMENTS OR INFORMATION PROVIDED TO BUYER IN CONNECTION WITH SUCH INQUIRIES ARE MATERIALLY MISLEADING OR INACCURATE. SECTION 3 -REPRESENTATIONS AND WARRANTIES OF BUYER BUYER represents and warrants to SELLER as follows: 3.1 Organization. 3.1.1 SUB is duly organized, validly existing and in good standing under the laws of the State of Delaware, and has the corporate power and lawful authority to own, lease and operate its assets, properties and business and to carry on its business as now being conducted. 3.1.2 PARENT is duly organized, validly existing and in good standing under the laws of France, and has the corporate power and lawful authority to own, lease and operate its assets, properties and business and to carry on its business as now being conducted. 3.2 Authority. Each of SUB and PARENT has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of SUB and PARENT. This Agreement has been duly executed and delivered by SUB and PARENT. Assuming due authorization, execution and delivery by SELLER, this Agreement constitutes, and when delivered at the Closing the Related Agreements will constitute, the valid and binding obligations of SUB and PARENT, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general principles of equity. 3.3 No Violation. 3.3.1 To BUYER's knowledge, neither the execution and delivery of this Agreement, nor the performance by SUB of its obligations hereunder, nor the consummation of the transactions contemplated hereby will violate any statute or law or any judgment, decree, order, regulation or rule of any court or governmental authority to which SUB is bound. 3.3.2 To BUYER's knowledge, neither the execution and delivery of this Agreement, nor the performance by PARENT of its obligations hereunder, nor the consummation of the transactions contemplated hereby will violate any statute or law or any judgment, decree, order, regulation or rule of any court or governmental authority to which PARENT is bound. 3.4 Brokers' and Finders' Fees. Neither SUB nor PARENT has incurred, nor will either of them incur, directly or indirectly, any liability for brokerage or finders' fees or agents' 11 commissions or any similar charges in connection with this Agreement or the transactions contemplated hereby. 3.5 Guarantee. To the extent SUB is unable to perform any obligation pursuant to the transactions contemplated by this Agreement, PARENT guarantees that it will effect such performance and agrees to bear, at its sole cost and expense, any and all liability with respect to any failure by SUB to perform any such obligation. 3.6 Investigation. SUBJECT TO SECTION 2.12 ABOVE, BUYER ACKNOWLEDGES THAT IT IS NOT RELYING ON ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY OR COMPLETENESS OF ANY INFORMATION REGARDING THE TANGIBLE ASSETS FURNISHED OR MADE AVAILABLE TO BUYER OR ANY OF ITS REPRESENTATIVES, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT. BUYER HAS UNDERTAKEN ITS OWN INVESTIGATION OF THE TANGIBLE ASSETS. SECTION 4 -COVENANTS AND AGREEMENTS 4.1 Corporate Examinations and Investigations. Prior to the Closing Date, upon reasonable prior written notice to SELLER, BUYER shall be entitled, through its employees and representatives, to have such additional access to the Manufacturing Site, Tangible Assets and Intangible Assets and any and all documentation or other information specifically relating to the Licensed Assets as is reasonably necessary in connection with the performance by BUYER or its designees of additional due diligence on the Manufacturing Site, Tangible Assets, Intangible Assets and Licensed Assets, except as may be in contravention of any obligations SELLER may have under confidentiality obligations to third parties and such documents or information would not be material to BUYER's examination or investigation. Any such investigation and examination shall be conducted at BUYER's sole expense and at reasonable times and under reasonable circumstances (including reasonable advance notice to SELLER) so as to minimize any disruption to or impairment of SELLER's business. Prior to the Closing Date, BUYER shall have completed all of its due diligence as provided herein. Notwithstanding the foregoing or any other provision in this Agreement, SELLER and BUYER acknowledge and agree that SELLER has no obligation, except as may be expressly set forth in the Supply Agreement, to provide SUB or PARENT with access to, or information relating to, any documents that relate to QS-21 Adjuvant or the manufacture, supply, use, sale, offer for sale or importation of QS-21 Adjuvant. 4.2 Expenses. Each of BUYER and SELLER shall bear its respective expenses incurred in connection with the preparation, execution and performance of this Agreement and the transactions contemplated hereby, including without limitation all fees and expenses of agents, representatives, counsel and accountants. 4.3 Authorization from Others. Prior to the Closing, BUYER and SELLER shall each use its commercially reasonable efforts to obtain all authorizations, consents and permits of others required to permit the consummation by it of the transactions contemplated by this Agreement, except to the extent waived by the other party in writing. To the extent that the assignment of any assets which are among the Tangible Assets shall require the consent of other 12 parties thereto and BUYER shall have waived the receipt of such consent at the Closing, this Agreement shall not constitute an assignment thereof. 4.4 Related Agreements. From the date hereof until the Closing: 4.4.1 PARENT and SELLER shall each use commercially reasonable efforts to enter into the Patent Purchase Agreement; 4.4.2 SUB and SELLER shall each use commercially reasonable efforts to enter into the Sublease Agreement; 4.4.3 SUB and SELLER shall each use commercially reasonable efforts to enter into the License Agreement; and 4.4.4 PARENT, SUB and SELLER shall each use commercially reasonable efforts to enter into the Supply Agreement. The Patent Purchase Agreement, the Sublease Agreement, the License Agreement and the Supply Agreement are collectively referred to as the "Related Agreements." 4.5 Purchase of Inventories, Raw Materials, and Other Office Assets. At or prior to the Closing, SUB shall purchase the following inventories, raw materials, and other office assets from SELLER: 4.5.1 SUB shall purchase SELLER's then-current inventory of P45 at the purchase prices established for each batch of P45, which prices shall range from $3,000.00 per gram to $6,000.00 per gram, which SUB and SELLER agree are SELLER's "cost," provided that in no event shall SUB be required to purchase P45 inventory: (a) that does not meet the Release Criteria, or (b) in excess of 100 grams of P45 or (c) that is not manufactured within the six (6) month period immediately preceding the Closing Date. 4.5.2 In addition, SUB shall purchase SELLER's then-current inventory of QA-21 Adjuvant at the purchase price of [**] per gram, which SUB and SELLER agree is SELLER's "cost," provided that in no event shall SUB be required to purchase QA-21 Adjuvant in excess of 65 grams of QA-21 Adjuvant. 4.5.3 In addition, SUB shall purchase SELLER's raw materials relating to the manufacture of P45 and QA-21 Adjuvant in the quantities and at the purchase prices set forth on Schedule 4.5.3 hereto, which prices SUB and SELLER agree are SELLER's "cost." SUB acknowledges that the prices and quantities set forth on Schedule 4.5.3 are approximate and are subject to change due to the need of SELLER to use and/or advance-order such raw materials as well as make final price calculations prior to Closing. 4.5.4 No later than three (3) business days before the Closing, SELLER shall provide SUB with one or more invoices for the above inventories and raw materials, setting forth the quantities and total costs of such inventories and raw materials. Such invoices shall be payable by SUB at the Closing in accordance with Section 1.4.3 above. In addition, the parties acknowledge and agree that SUB and SELLER shall agree on additional raw materials and [**] Portions of this exhibit have been omitted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed with the commission. 13 inventories to be purchased by SUB, such raw materials and inventories to also be invoiced to SUB in accordance with this provision, and paid by SUB at the Closing. 4.5.5 In addition, SUB shall purchase certain other office assets of SELLER if agreed to by the parties, which may include without limitation, phone equipment, office furniture and general office equipment (such agreed to other office assets (if any) are collectively, the "Other Office Assets"), on terms and conditions to be mutually agreed upon by SUB and SELLER in writing prior to the Closing. 4.6 Key Employees; Employment. 4.6.1 SUB shall have the right to offer employment to the "Key Employees" of SELLER involved in the manufacture of P45, QA-21 Adjuvant and the Vaccine as set forth on Schedule 4.6, without the direct or indirect interference of SELLER. Prior to the Effective Date, and except as otherwise expressly set forth on Schedule 4.6, SELLER shall have executed and delivered retention letters in substantially the form attached hereto as Appendix H ("Retention Letters") to each of the individuals listed on Schedule 4.6, pursuant to which SUB agrees to pay cash bonuses to such individuals in an aggregate amount not to exceed $68,000. 4.6.2 To the extent some or all of the Key Employees set forth on Schedule 4.6 accept SUB's offer of employment, SELLER shall terminate the employment of such Key Employees effective as of 12:01 a.m., eastern standard time, on the Closing Date and SUB shall be deemed to have hired such Key Employees effective as of 12:01 a.m., eastern standard time, on the Closing Date (referred to herein as "Business Employees") upon substantially the same terms and conditions with substantially the same duties and responsibilities and at substantially the same rate of pay in effect on the Closing Date while such individuals were employed by SELLER. With respect to any Key Employee who is not actively at work on the Closing Date because of a disability, such individual shall not receive an offer of employment from SUB unless or until the Key Employee reports to work after termination of the disability, at which time he or she shall receive an offer of employment from the SUB, upon substantially the same terms and conditions with substantially the same duties and responsibilities and at substantially the same rate of pay in effect on the Closing Date while such individuals were employed by SELLER, and shall terminate employment with SELLER and be deemed employed by SUB as of the date the employee reports to work after termination of the disability. Notwithstanding the preceding sentence, SUB shall assume responsibility for any unpaid accrued vacation due to any Business Employee pursuant to any current employee benefit plan, program, agreement or law or regulation as of the Closing Date. Upon the date any Key Employee becomes a Business Employee, and except as provided in the applicable Retention Letter, SELLER shall have no liability or obligation with respect to such Business Employee's employment by SUB. 4.6.3 Except as provided herein and consistent with Section 1.3 of the Agreement, SELLER shall retain liability and responsibility for all amounts or benefits payable under the Employee Plans, including severance, sick or holiday pay, if any, to any Business Employee, whether or not payable as a result of the consummation of the transactions contemplated by this Agreement. Notwithstanding the foregoing, SUB agrees to assume responsibility for any accrued unpaid vacation pay due to any Business Employee pursuant to an Employee Plan or law or regulation as of the Closing Date. 14 4.6.4 SUB and SELLER acknowledge that the transactions provided for in this Agreement may result in obligations on the part of SELLER and one or more of its employee benefit plans that is a welfare benefit plan (within the meaning of Section 3(1) of ERISA) to comply with the health care continuation requirements of Part 6 of Title 1 of ERISA and Internal Revenue Code Section 4980B, as applicable ("COBRA"). SUB and SELLER expressly agree that SUB and SUB's benefit plans shall have no responsibility for compliance with such COBRA continuation requirements (i) for qualified beneficiaries who previously elected to receive continued coverage under SELLER's ERISA benefit plans or who between the Effective Date and the Closing Date elect to receive continued coverage, or (ii) with respect to those employees or former employees of SELLER who may become eligible to receive such continued coverage as a result of the transactions provided for in this Agreement. Notwithstanding the preceding sentence or any other provision in this Agreement, SUB shall reimburse each Business Employee 100% of the actual premium incurred by such Business Employee for purposes of maintaining COBRA coverage with the SELLER, where entitlement to such COBRA coverage resulted from the transactions provided for in this Agreement. SUB shall provide reimbursement as provided in the preceding sentence only for premiums paid for health care coverage for periods during which the Business Employee is employed by SUB. SELLER shall not be liable for any federal, state, or local taxes due in connection with the reimbursement of such premiums. 4.6.5 Except as specifically set forth in this Agreement and consistent with Section 1.3 of the Agreement: (i) neither SUB nor PARENT shall assume, continue or maintain any Employee Plan; (ii) no assets or liabilities of any Employee Plan shall be transferred to, or assumed by SUB or PARENT, or any employee plan maintained by either; (iii) SELLER shall be solely liable and responsible for funding and/or paying any benefits under any Employee Plan, including any termination benefits and other employee entitlements under such plans by or attributable to employees of SELLER as of the Closing Date. 4.6.6 Nothing in this Agreement, express or implied, shall confer upon any employee of SELLER, or any representative of any such employee, any rights or remedies, including any right to employment or continued employment for any period, of any nature whatsoever. 4.7 Non-Transferable Permits. From the date hereof until the Closing, SUB shall use its reasonable best efforts to obtain Permits (temporary or otherwise) substantially similar to any Non-Transferable Permits SELLER is unable to transfer to SUB. 4.8 Access to Records and Files. From and after the Closing, BUYER shall preserve such computer files, books, accounts, records, Permits and other similar information transferred to or otherwise obtained by SUB or PARENT pursuant to the terms of this Agreement or the Related Agreements (including any modifications and additions thereof made by SUB or PARENT after the Closing) (collectively, "Records"). For a period of five (5) years after the Closing, BUYER hereby grants and shall grant to SELLER full access to and the right and license to, at SELLER's sole cost and expense, reference, use and make copies and extracts of, such Records, for any reasonable purposes of SELLER related to (a) the Excluded Assets, other than the Intangible Assets, or (b) any assets in the case of (i), (ii) or (iii) of the next sentence. The five (5) year limitation in the preceding sentence shall not apply, and for the avoidance of doubt, no time limitation shall apply, if SELLER seeks such access or exercise of its right or 15 license (i) to Permits, (ii) in connection with any actual, threatened or potential litigation involving SELLER, or (iii) in connection with any inquiry from any taxing or regulatory authority or agency for so long as any party hereto may have any potential liabilities with respect thereto. Notwithstanding the foregoing, to the extent SELLER requires physical access to the Manufacturing Site, visits by SELLER shall be made during normal business hours upon prior written request and shall not unreasonably interfere with the business or activities of SUB. For the avoidance of doubt, nothing contained in this Section 4.8 shall be interpreted to interfere with or contradict SELLER's rights pursuant to the Sublease. Further notwithstanding the foregoing, in the event that BUYER desires to be released of its obligations under this Section 4.8 at any time after the fifth year anniversary of the Closing with respect to certain Records, it shall notify SELLER thereof in writing. Thereafter, the parties shall meet and cooperate to identify those such Records which SELLER desires to retain. BUYER shall then transfer to SELLER those Records identified by SELLER pursuant hereto, and BUYER shall thereafter have the right to dispose of the Records. 4.9 Further Assurances. Each of BUYER and SELLER shall use its reasonable commercial efforts to perform and fulfill all conditions and obligations to be performed and fulfilled by such party under this Agreement and further to ensure that, to the extent in its control or capable of influence by it, no breach of any of SUB's, PARENT's or SELLER's representations, warranties, covenants and agreements hereunder or contemplated hereby occurs or exists on or prior to the Closing Date, to the end that the transactions contemplated by this Agreement shall be carried out. Without limiting the generality of the foregoing, following the Closing Date, each of BUYER and SELLER shall execute such documents, further instruments of transfer, assumption and assignment and other papers and take such further actions as may be reasonably required to carry out the transactions contemplated hereby. 4.10 Seller Assistance; Pre-Closing Access. From the Effective Date until the six month anniversary of the Closing Date, SELLER agrees to provide to SUB, to the extent it is reasonably capable, within a reasonable time after receipt of a written request from SUB during normal business hours and at SUB's sole cost and expense, reasonably necessary and appropriate assistance through qualified personnel of SELLER, to the extent SELLER has such qualified personnel, provided such assistance does not interfere in any manner with the business or activities of SELLER, at the Manufacturing Site, in connection with the manufacture by SUB of the Initial Batches pursuant to Section 1.4.4. In the event SUB fails to manufacture the Initial Batches by the six month anniversary of the Closing Date and has attempted in good faith to do so, until the eight month anniversary of the Closing Date, SELLER agrees to provide to SUB, to the extent it is reasonably capable, within a reasonable time after receipt of a written request from SUB during normal business hours and at SUB's sole cost and expense, reasonably necessary assistance through qualified personnel of SELLER, to the extent SELLER has such qualified personnel, provided such assistance does not interfere in any manner with the business or activities of SELLER, at the Manufacturing Site, in connection with the manufacture by SUB of the Initial Batches pursuant to Section 1.4.4. In addition, prior to the Closing, in coordination with SUB, SELLER agrees to permit employees of SUB, at SUB's sole cost and expense, during normal business hours and upon prior written request, to access the Manufacturing Site as is reasonably necessary for the purpose of observing the manufacturing process related to the production of QS-21 Adjuvant, provided such access does not unreasonably interfere with the business or activities of SELLER. For the avoidance of doubt, nothing contained in this 16 Section 4.10 shall be interpreted to interfere with or contradict SELLER's rights pursuant to the Sublease. 4.11 Reorganization of Equipment for the Benefit of Seller. From and after the Closing Date, in the event that SELLER requests that SUB move equipment, fixtures or any other personal property located in the Manufacturing Site for the benefit of SELLER, SUB shall so move such personal property at the sole expense of SELLER and only to the extent that SUB believes such reorganization of personal property does not unreasonably interfere with the business or activities of SUB. SECTION 5 -CONDITIONS PRECEDENT TO THE OBLIGATION OF BUYER TO CLOSE The obligation of BUYER to enter into and complete the Closing is subject, at the option of BUYER acting in accordance with the provisions of this Agreement with respect to termination hereof, to the fulfillment of the following conditions, any one or more of which may be waived by it except as set forth below: 5.1 Representations and Warranties True. The representations and warranties of SELLER contained in this Agreement shall be true in all material respects on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date, except where the failure of such representations and warranties would not have a material adverse effect on the Tangible Assets, Intangible Assets or the Licensed Assets. SELLER shall have performed and complied in all material respects with all covenants and agreements required by this Agreement to be performed or complied with by it on or prior to the Closing Date, subject to those exceptions which could not reasonably be expected to have a material adverse effect on the Tangible Assets, Intangible Assets or Licensed Assets. 5.2 Litigation. No action, suit or proceeding shall have been instituted before any court or governmental or regulatory body, or instituted or threatened by any governmental or regulatory body, to restrain, modify or prevent the carrying out of the transactions contemplated hereby, or to seek damages or a discovery order in connection with such transactions. 5.3 Deliveries of Seller. SELLER shall have made each of the deliveries of SELLER as set forth in Section 1.6.1 above. 5.4 Rights to be Secured With Respect to Third Parties. SELLER shall have secured any authorizations, consents, permits, waivers, or rights with respect to third parties necessary to enable SELLER to consummate the transactions contemplated by this Agreement and the Related Agreements, as set forth in paragraphs 1 through 3 on Schedule 5.4 hereto. BUYER and SELLER agree that the consent referred to in paragraph 1 on Schedule 5.4 may not be waived by BUYER. 5.5 Necessary Permits. SUB shall have received all Permits set forth on Schedule 2.7 hereto unless identified in such schedule as "Non-Transferable Permits." 5.6 Legal Opinion. BUYER shall have received the opinion of Palmer & Dodge LLP, counsel to SELLER, addressed to BUYER substantially in the form as set forth on 17 Appendix I hereto. In rendering such opinion, counsel may rely as to factual matters on certificates of officers and/or directors of SELLER and on certificates of governmental officials. 5.7 Employees. Offers of employment extended to Curtis Bille and Rich Kilmer, by SUB shall have been accepted by such individuals. 5.8 Phase I Site Assessment Report. Delivery of the Phase I Site Assessment Report identifying no Recognized Environmental Condition (as defined in ASTM E-1527-00) which would have a material adverse effect on the Manufacturing Site, the Tangible Assets or the operations of SUB at the Manufacturing Site as were previously conducted by SELLER at the Manufacturing Site prior to the Effective Date, unless (a) such Recognized Environmental Condition had previously been disclosed to SUB or PARENT in paragraphs 1 through 5 on Schedule 2.9 hereto or (b) SELLER accepts in writing prior to the Closing responsibility for remediating such Recognized Environmental Condition in accordance with applicable Environmental Laws (each an "Unaccepted Condition"). SECTION 6 -CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLER TO CLOSE The obligation of SELLER to enter into and complete the Closing is subject, at the option of SELLER acting in accordance with the provisions of this Agreement with respect to termination hereof, to the fulfillment of the following conditions, any one or more of which may be waived: 6.1 Representations and Warranties True. The representations and warranties of BUYER contained in this Agreement shall be true in all material respects on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date. BUYER shall have performed and complied in all material respects with all covenants and agreements required by this Agreement to be performed or complied with by it on or prior to the Closing Date. 6.2 Litigation. No action, suit or proceeding shall have been instituted before any court or governmental or regulatory body, or instituted or threatened by any governmental or regulatory body, to restrain, modify or prevent the carrying out of the transactions contemplated hereby, or to seek damages or a discovery order in connection with such transactions. 6.3 Deliveries of Buyer. BUYER shall have made each of the deliveries of BUYER as set forth in Section 1.6.2 above. 6.4 Employees. SUB shall have delivered evidence of at least five (5) accepted offers of employment from SUB to the individuals listed on Schedule 4.6 hereto, such offers of employment to offer each individual substantially the same terms and conditions with substantially the same duties and responsibilities and at substantially the same rate of pay as in effect on the Closing Date while such individual was employed by SELLER. 6.5 Rights With Respect to Third Parties. SELLER and BUYER shall have secured any authorizations, consents, permits, waivers, or rights with respect to third parties necessary to enable SELLER and BUYER to consummate the transactions contemplated by this Agreement 18 and the Related Agreements, as set forth in paragraphs 1 through 3 on Schedule 5.4 hereto and on Schedule 6.5 hereto, respectively. In addition, SELLER shall have secured the third party consents as set forth in paragraphs 4 and 5 on Schedule 5.4 hereto. 6.6 Purchase of Inventories, Raw Materials, and Other Office Assets. SUB shall have purchased the inventories of P45 and QA-21 Adjuvant, and the raw materials relating to the manufacture thereof, and the Other Office Assets, in accordance with the provisions of Sections 1.4.3 and 4.5 above. SECTION 7 -INDEMNIFICATION 7.1 By Seller. Subject to the other provisions of this Section 7, from and after the date hereof, SELLER shall indemnify and hold harmless BUYER and its Affiliates and their respective officers, directors, employees and agents (each a "BUYER Indemnitee") from and against any loss, liability, cost or expense (including reasonable legal fees and expenses) (collectively, "Losses") suffered or incurred by any such BUYER Indemnitee to the extent arising out of or resulting from (i) any breach of any representation or warranty of SELLER in this Agreement, the Patent Purchase Agreement, or the License Agreement; (ii) any breach of any covenant or undertaking of SELLER in this Agreement, the Patent Purchase Agreement, or the License Agreement; (iii) liabilities of SELLER accrued prior to the Closing other than the Assumed Liabilities; (iv) subject to Section 7.13, the operation and ownership by SELLER of the Tangible Assets, the practice and ownership by SELLER of the Intangible Assets, and the practice (and ownership, if applicable) by SELLER of the Licensed Assets, prior to the Closing (including without limitation, with respect to QS-21 Adjuvant); and (v) subject to Section 7.13, the operation by SELLER of the Manufacturing Site prior to the Closing. 7.2 By Buyer. Subject to the other provisions of this Section, from and after the date hereof, SUB and PARENT shall, jointly and severably, indemnify and hold harmless SELLER and its Affiliates and their respective officers, directors, employees and agents (each a "SELLER Indemnitee") from and against any and all Losses suffered or incurred by any such SELLER Indemnitee to the extent arising out of or resulting from (i) any breach of any representation or warranty of SUB or PARENT under this Agreement, the Patent Purchase Agreement, or the License Agreement; (ii) any breach of any covenant or undertaking of SUB or PARENT in this Agreement, the Patent Purchase Agreement, or the License Agreement; (iii) the Assumed Liabilities; (iv) the operation and ownership of the Tangible Assets, the practice and ownership of the Intangible Assets, and the practice of the Licensed Assets, from and after the Closing; (v) the operation of the Manufacturing Site from and after the Closing; and (vi) the manufacture, use, sale, offer for sale or importation by or on behalf of SUB or PARENT or any Affiliates thereof of any of P45, QA-21 Adjuvant or animal health care vaccines containing or comprising P45 and/or QA-21 Adjuvant, including without limitation, a vaccine protective against feline leukemia virus. 7.3 Threshold. Neither SELLER, with respect to Sections 7.1(i) and 7.1(ii) nor BUYER, with respect to Sections 7.2(i) and 7.2(ii) shall have any liability for Losses hereunder to the other until the aggregate of the (a) amount of all claims for Losses then made by and (b) amount of all Losses previously paid to BUYER or SELLER, as applicable, pursuant to this 19 Section 7 exceeds the sum of $500,000, in which event all sums shall be recoverable, subject to the provisions of this Section 7. 7.4 Minimum Claim. Neither SELLER nor BUYER shall have any liability hereunder to the other with respect to any claim for Losses if the amount of such claim is less than $25,000, and any such claim shall not be taken into account in computing the limitation in Section 7.3 above. 7.5 Maximum Liability; Limitation on Liability. The aggregate liability of SELLER, with respect to Sections 7.1(i) and 7.1(ii) or BUYER, with respect to Sections 7.2(i) and 7.2(ii) for indemnification under this Agreement in respect of all liabilities for Losses shall not exceed 30% of the Price. EXCEPT WITH RESPECT TO A PARTY'S INDEMNIFICATION OBLIGATIONS UNDER THIS AGREEMENT FOR THIRD PARTY CLAIMS, IN NO EVENT SHALL BUYER OR SELLER BE LIABLE TO THE OTHER FOR ANY INCIDENTAL, INDIRECT, CONSEQUENTIAL, SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES (INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS RELATING TO THE SAME) ARISING FROM ANY CLAIM FOR LOSSES RELATING TO THIS AGREEMENT, WHETHER SUCH CLAIM IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EVEN IF AN AUTHORIZED REPRESENTATIVE OF SUCH PARTY IS ADVISED OF THE POSSIBILITY OR LIKELIHOOD OF SAME. 7.6 Claims Period. No claim for Losses shall be brought against SELLER (with respect to Sections 7.1(i) and 7.1(ii)) or SUB or PARENT (with respect to Sections 7.2(i) and 7.2(ii)) after the 18-month anniversary of the Closing Date (the date on which notice is so given being the "Claim Date"), except for any such claim with respect to Section 4.8 hereto. 7.7 Indemnification Procedures. Any SELLER Indemnitee or BUYER Indemnitee (each, an "Indemnitee") intending to claim indemnification for any Loss under this Section shall promptly notify the party from whom indemnification is sought (the "Indemnifying Party") of any Loss after the Indemnitee is aware thereof, setting forth the nature of the claim and the basis for indemnification under this Agreement, and with respect to any Losses arising or resulting from third-party claims, demands, suits or judgments, the Indemnifying Party shall assume, at its sole cost and expense, the defense thereof with counsel mutually satisfactory to the parties; provided, however, that any Indemnified Party shall have the right to retain its own counsel reasonably acceptable to the Indemnifying Party, at the expense of the Indemnifying Party, if representation of such Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate because of actual or potential differences in the interests of such Indemnitee and any other party represented by such counsel. The Indemnified Party shall cooperate fully with the Indemnifying Party in such defense and will permit the Indemnifying Party to conduct and control such defense and disposition of such claim, suit or action (including all decisions relative to litigation, appeal and settlement). The Indemnifying Party agrees to keep the Indemnified Party informed of the progress in the defense and disposition of such claim and to consult with the Indemnified Party with regard to any proposed settlement. The Indemnifying Party agrees not to enter into any settlement which would have a material adverse effect on the other party hereto without prior written consent of the other party hereto, which consent shall not be unreasonably withheld or delayed. 20 7.8 Third Party Recoveries. If SELLER makes a payment with respect to any claim for Losses under the representations or warranties set forth herein and SUB or PARENT subsequently receives from a third party or under the terms of any insurance policy a sum in respect of the same claim, SUB or PARENT, as applicable, shall repay SELLER such amount as is equal to the sum subsequently received. 7.9 Legislation. Neither SUB nor PARENT shall have the right to bring any warranty claim against SELLER if and to the extent that such warranty claim occurs as a result of any legislation not in force at the date of this Agreement that takes effect retrospectively or occurs as a consequence of a change in the interpretation of the law after such date in any jurisdiction; or to the extent that it relates to any loss for which SUB or PARENT is indemnified by insurance (or for which it would be so indemnified if at the relevant time there had been maintained valid and adequate insurance cover of a type in force in relation to SELLER at the date of this Agreement). 7.10 Contingent Liabilities. If any potential warranty claim shall arise by reason of a liability which is contingent only, then SELLER shall not be under any obligation to make any payment pursuant to such warranty claim until such time as the contingent liability ceases to be contingent and becomes actual. 7.11 No Third Party Beneficiaries. SELLER's representations and warranties set forth in this Agreement are made exclusively to BUYER and are not transferable or assignable, and no third party shall rely thereon. 7.12 Exclusive Remedy. BUYER and SELLER each acknowledge and agree that, from and after the Closing, their sole and exclusive remedy with respect to any and all claims relating to breaches of representations, warranties, covenants and undertakings contained in this Agreement, the Patent Purchase Agreement, or the License Agreement shall be pursuant to the indemnification provisions set forth in this Section 7. In furtherance of the foregoing, BUYER and SELLER hereby waive, from and after the Closing, to the fullest extent permitted under applicable law, any and all rights, claims and causes of action they may have against each other relating to breaches of representations, warranties, covenants and undertakings in this Agreement, the Patent Purchase Agreement, or the License Agreement arising under or based upon any federal, state or local statute, law (including common law), ordinance, rule or regulation or otherwise. 7.13 Liabilities Under Prior Agreements. Notwithstanding any other provision of this Section 7 or of the Prior Agreements, the parties hereto acknowledge and agree that the following provisions shall apply with respect to any loss, liability, cost, or expense (including reasonable legal fees and expenses) (collectively, "Prior Losses") arising out of an action or inaction of either party under the Prior Agreements: (a) Indemnification by PARENT. PARENT shall indemnify and hold harmless SELLER and its Affiliates and their respective officers, directors, employees and agents (each a "SELLER Indemnitee") from and against any and all Prior Losses suffered or incurred by any such SELLER Indemnitee resulting from any third-party claim, demand, suit or judgement arising out of or resulting from (i) the development, pre-clinical or clinical testing, 21 manufacture, use, sale, offer for sale or importation of the Vaccine , provided that such Prior Loss does not arise out of or result from any event for which SELLER has indemnification obligations pursuant to Section 7.13(b) below, (ii) the gross negligence or willful misconduct of PARENT or its Affiliates, or (iii) the breach of any representation, warranty or covenant of PARENT under the Prior Agreements, in each case, except to the extent that such Prior Loss is attributable to the gross negligence or willful misconduct of SELLER or its Affiliates. (b) Indemnification by SELLER. SELLER shall indemnify, defend, and hold harmless PARENT and its Affiliates and their respective officers, directors, employees and agents (each a "PARENT Indemnitee") from and against any and all Prior Losses suffered or incurred by any such PARENT Indemnitee resulting from any third-party claim, demand, suit or judgement to the extent arising out of or resulting from (i) the failure of the Vaccine to meet the Release Criteria at the time of shipment under the Prior Agreements (ii) the gross negligence or willful misconduct of SELLER or its Affiliates, or (iii) the breach of any representation, warranty or covenant of SELLER under the Prior Agreements, in each case, except to the extent that such Prior Loss is attributable to the gross negligence or willful misconduct of PARENT or its Affiliates. For the avoidance of doubt, SELLER acknowledges that although it was not a party to certain of the Prior Agreements, for purposes of this Section 7.13(b), the term SELLER shall include SELLER's predecessors under and parties to the Prior Agreements. (c) Conditions to Indemnification for Prior Losses. Any SELLER Indemnitee or PARENT Indemnitee (each, a "Section 7.13 Indemnitee") intending to claim indemnification under this Section 7.13 shall promptly notify the party from whom indemnification is sought (the "Section 7.13 Indemnifying Party") of any Prior Losses after the Section 7.13 Indemnitee is aware thereof, setting forth the nature of the claim and the basis for indemnification under this Agreement, and the Section 7.13 Indemnifying Party shall assume, at its sole cost and expense, the defense thereof with counsel mutually satisfactory to the parties; provided, however, that any Section 7.13 Indemnitee shall have the right to retain its own counsel reasonably acceptable to the Section 7.13 Indemnifying Party, at the expense of the Section 7.13 Indemnifying Party, if representation of such Section 7.13 Indemnitee by the counsel retained by the Section 7.13 Indemnifying Party would be inappropriate because of actual or potential differences in the interests of such Section 7.13 Indemnitee and any other party represented by such counsel. The Section 7.13 Indemnitee shall cooperate fully with the Section 7.13 Indemnifying Party in such defense and will permit the Section 7.13 Indemnifying Party to conduct and control such defense and disposition of such claim or suit (including all decisions relative to litigation, appeal and settlement). The Section 7.13 Indemnifying Party agrees to keep the Section 7.13 Indemnitee informed of the progress in the defense and disposition of such claim or suit and to consult with the Section 7.13 Indemnified Party with regard to any proposed settlement. The Section 7.13 Indemnifying Party agrees not to enter into any settlement which would have a material adverse effect on the other party hereto without prior written consent of the other party hereto, which consent shall not be unreasonably withheld or delayed. 22 SECTION 8 -TERMINATION OF AGREEMENT 8.1 Termination. This Agreement may be terminated on or prior to the Closing as follows: (i) at the election of SELLER upon written notice to BUYER from SELLER if, on or after May 1, 2004, any one or more of the conditions to the obligation of SELLER to close has not been fulfilled; (ii) at the election of SUB or PARENT upon written notice to SELLER if, on or after May 1, 2004, any one or more of the conditions to the obligation of BUYER to close has not been fulfilled; (iii) at the election of SELLER upon written notice to BUYER from SELLER, if SUB or PARENT has breached any representation, warranty, covenant or agreement contained in this Agreement and has not, within thirty (30) days of receipt by SUB or PARENT, as applicable, of written notice from SELLER of such breach of representation, warranty, covenant or agreement, cured such breach; (iv) at the election of SUB or PARENT upon written notice to SELLER if SELLER has breached any representation, warranty, covenant or agreement contained in this Agreement and has not, within thirty (30) days of receipt by SELLER of written notice from SUB or PARENT, as applicable, of such breach of representation, warranty, covenant or agreement, cured such breach; or (v) by mutual written agreement of SELLER and BUYER. 8.2 Effect of Termination. If this Agreement is terminated and the transactions contemplated hereby are not consummated as provided above, each and every representation and warranty contained in this Agreement or any Schedule hereto, or any certificate, document or other instrument delivered by the parties in connection herewith, shall expire and none of the parties hereto shall be under any liability whatsoever with respect to any such representation or warranty; provided, however, that notwithstanding the foregoing, each party hereto shall be and remain liable to the other parties hereto in the event that the failure so to close hereunder shall occur as a consequence of the failure of a party to fully perform its covenants and agreements hereunder or the material breach by a party of its representations or warranties contained herein. In the event that PARENT is entitled to a return of any amounts paid to SELLER pursuant to Sections 1.4.1 or 1.4.2, SELLER shall make such payment(s) by delivering to PARENT the aforementioned amounts by official bank check or wire transfer (to an account specified by PARENT in writing), in next day funds within two (2) business days of the termination of this Agreement. SECTION 9 -MISCELLANEOUS 9.1 Confidentiality. Each party hereto acknowledges and agrees that each such party shall be bound by that certain Mutual Confidential Disclosure Agreement by and between SELLER and PARENT dated as of July 31, 2003 (as amended by that certain First Amendment to Mutual Confidential Disclosure Agreement dated as of October 5, 2003) attached hereto as 23 Appendix J and incorporated herein by reference (as may be amended from time to time by mutual written agreement of SELLER and PARENT) with respect to Confidential Information (as defined therein) disclosed or otherwise obtained pursuant to, or in connection with, this Agreement and/or the Related Agreements. 9.2 Uniform Commercial Code And United Nations Convention Warranties. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, ALL UNIFORM COMMERCIAL CODE WARRANTIES AND UNITED NATIONS CONVENTION ON THE INTERNATIONAL SALE OF GOODS WARRANTIES ARE EXPRESSLY DISCLAIMED BY THE PARTIES HERETO. 9.3 Public Announcements. Prior to the Closing, SELLER and BUYER shall agree on the content of a public disclosure for such public disclosure to be issued by one or more of the parties hereto within a reasonable time after the Closing. Thereafter, no party hereto shall issue any press releases or public disclosure relating to this Agreement or the Related Agreements without the prior written consent of the other parties hereto, which consent shall not be unreasonably withheld or delayed, provided, however, that (i) a party hereto may, without the prior consent of any other party hereto, issue such press release or public disclosure as may be required by law or the rules and regulations of the New York Stock Exchange, Nasdaq, the Securities and Exchange Commission, or Euronext Paris and (ii) once any press release or other public disclosure is approved for disclosure by all the parties hereto, any party hereto may make a subsequent public disclosure of the contents of such approved press release or other public disclosure. Notwithstanding any other provision of this Agreement, the parties hereto (and each of their directors, officers, employees, representatives, or other agents) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated by this Agreement and all materials of any kind (including opinions or other tax analyses) that are provided to any party hereto relating to such tax treatment and tax structure. 9.4 Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be deemed given (a) when delivered personally, (b) on the next business day after timely delivery to an overnight courier (postage prepaid), or (c) on the third business day after deposit in the United States mail (certified or registered mail return receipt requested, postage prepaid), as follows: (i) if to SUB or PARENT, to: Virbac S.A. 1 ere Avenue 2065 m L.I.D. 06516 CARROS FRANCE Attn: Pierre Pages, Chief Operating Officer and Gerard Sicsic, General Counsel 24 With a copy to: Gardner Carton & Douglas LLP 1301 K Street, NW Suite 900, East Tower Washington, DC 20005-3317 Attn: Patrick Rock, Esq. (ii) if to SELLER, to: Antigenics Inc. 3 Forbes Rd. Lexington, MA 02421 Attn: Vice President, Business Development With a copy to: Antigenics Inc. 630 Fifth Avenue, Suite 2100 New York, NY 10111 Attn: Associate General Counsel Any party hereto may by notice given in accordance with this Section 9.4 to the other parties hereto designate another address or person for receipt of notices hereunder. 9.5 Entire Agreement; Prior Agreements. This Agreement (including the Schedules and Appendices hereto), the Related Agreements and all other documents executed in connection with the consummation of the transactions contemplated herein and therein, contain the entire agreement among the parties hereto with respect to the subject matter contained herein and therein, and supersedes all prior agreements, written or oral, with respect thereto. Notwithstanding the foregoing, the parties acknowledge and agree that, with respect to the Prior Agreements and the Other Prior Agreements, this Agreement shall supersede and terminate the Prior Agreements and the Other Prior Agreements subject to, and only upon, the Closing. For the avoidance of doubt, the Letter Agreement dated September 30, 2002 related to the Mastitis Agreement (as defined therein) and the Release dated October 11, 2002 related thereto shall remain in effect. 9.6 Waivers and Amendments; Non-Contractual Remedies; Preservation of Remedies. No modification of any of the terms of this Agreement shall be deemed to be valid unless it is in writing and signed by the party against whom enforcement is sought. No course of dealing or usage of trade shall be used to modify the terms and conditions herein. No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any waiver on the part of any party of any such right, power or privilege, nor any single or partial exercise of any such right, power or privilege, preclude any further exercise thereof or the exercise of any other such right, power or privilege. The rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies that any party may otherwise have at law or in equity. The rights and remedies of any party based upon, arising out of or otherwise in respect of any inaccuracy in or breach of any representation, warranty, covenant or agreement contained in this Agreement shall in no way be limited by the 25 fact that the act, omission, occurrence or other state of facts upon which any claim of any such inaccuracy or breach is based may also be the subject matter of any other representation, warranty, covenant or agreement contained in this Agreement (or in any other agreement between the parties) as to which there is not inaccuracy or breach. 9.7 Governing Law; Dispute Resolution. This Agreement shall be governed by and construed and enforced in accordance with the laws of the Commonwealth of Massachusetts without regard to the conflicts of law principles thereof. Except for the right of any party to apply to a court of competent jurisdiction for a temporary restraining order, a preliminary injunction, specific performance or other equitable relief to preserve the status quo or prevent irreparable harm, any dispute, other than disputes regarding the construction, validity or enforcement of patents, arising between the parties relating to, arising out of or in any way connected with this Agreement or any term or condition hereof, or the performance by either party of its obligations hereunder, whether before or after termination of this Agreement, shall be resolved as follows: 9.7.1 The parties hereto shall, through their duly authorized representatives, attempt in good faith for fifteen (15) business days to resolve the dispute. 9.7.2 If the dispute can not be resolved by the parties hereto within fifteen (15) business days, then any party hereto may bring such matter in a federal or state court in the Commonwealth of Massachusetts, to whose exclusive jurisdiction all parties hereto consent pursuant to Section 9.9. 9.8 Governing Language. This Agreement has been prepared in the English language and the English language shall control its interpretation. All consents, notices, reports and other written documents to be delivered or provided by any party under this Agreement shall be in the English language, and in the event of any conflict between the provisions of any document and the English language translation thereof, the terms of the English language translation shall control. 9.9 Enforceability in Jurisdictions; Consent. The parties hereto intend to and hereby confer jurisdiction to enforce the provisions of this Agreement upon the courts of the Commonwealth of Massachusetts. Each of the parties hereto consents to the jurisdiction of said court or courts in the Commonwealth of Massachusetts and to service of process by certified mail, return receipt requested, or by any other manner provided by law. In the case of any claim involving the parties hereto, any legal action, suit or proceeding arising out of or relating to such claim may be instituted against such persons in any state or federal court located in the Commonwealth of Massachusetts and each such party agrees not to assert, by way of motion, as a defense, or otherwise, in any such action, suit or proceeding, any claim that it is not subject personally to the jurisdiction of such courts, that the action, suit or proceeding is brought in an inconvenient forum, that the venue of the action, suit or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court. The provisions of this Section 9.9 shall be subject to the provisions of Section 9.7. 9.10 Survival. Notwithstanding the Closing, the provisions of this Agreement and the Related Agreements shall, to the extent that they remain to be performed or are capable of 26 existing, remain in full force and effect and shall be binding on, and enforceable by, the parties hereto or their respective successors or assignees. 9.11 Binding Effect; No Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, permitted assigns and legal representatives. Neither this Agreement nor any interest hereunder shall be assignable by any party hereto without the prior written consent of all other parties hereto; provided that (a) any party hereto may assign its rights hereunder without such prior written consent to an entity that acquires all or substantially all of its business or the assets to which this Agreement and the Related Agreements relate, whether by merger, consolidation, reorganization, acquisition, sale or otherwise and (b) SELLER may assign its rights hereunder to any of its Affiliates. Notwithstanding any assignment permitted by this Section 9.11, the assigning party shall not be relieved of its liabilities or obligations under this Agreement without the written consent of all other parties hereto. 9.12 Variations in Pronouns. All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require. 9.13 Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of a number of copies hereof each signed by less than all, but together signed by all of the parties hereto. 9.14 Severability. Nothing contained herein shall be construed to require the commission of any act contrary to law. Should one or more provisions of this Agreement be or become invalid, the parties hereto shall substitute, by mutual consent, valid provisions for such invalid provisions which valid provisions in their economic and other effects are sufficiently similar to the invalid provisions that it can be reasonably assumed that the parties hereto would have entered into this Agreement with such valid provisions. In case such valid provisions cannot be agreed upon, the invalidity of one or several provisions of this Agreement shall not affect the validity of this Agreement as a whole or the validity of any portions hereof, unless the invalid provisions are of such essential importance to this Agreement that it is to be reasonably assumed that the parties hereto would not have entered into this Agreement without the invalid provisions. 9.15 Knowledge. As used in this Agreement, the phrases "to the knowledge of," "known," "aware," "know" and similar phrases of SELLER shall mean the "knowledge" of the current directors, officers and Key Employees of SELLER as well as the following individuals with various responsibilities for SELLER: Lori Baranauskas, Brian Clark, Jeff Clark, Andrea Dellatto, Mario DiPaola, Lauren Foster, Neal Gordon, Christine Klaskin, Michael Kouchakdjian, Deanna Petersen and Claudia Wernick. For purposes of the preceding sentence, "knowledge" with respect to conduct, a fact or circumstance, or a result, means knowing or being aware that a person is engaging or has engaged in conduct, that a fact or circumstance exists, or that a result is more likely than not to occur; having a firm belief that a fact or circumstance exists or that a result is more likely than not to occur; or being aware of a high probability of the existence of a 27 fact or circumstance, unless the person actually believes that the fact or circumstance does not exist. 9.16 Appendices; Schedules. The Appendices and Schedules are a part of this Agreement as if fully set forth herein. All references herein to Sections, subsections, clauses, Appendices and Schedules shall be deemed references to such parts of this Agreement, unless the context shall otherwise require. 9.17 Headings. The headings in this Agreement are for reference only, and shall not affect the interpretation of this Agreement. [SIGNATURE PAGE FOLLOWS] 28 IN WITNESS WHEREOF, the parties hereto have executed this Agreement under seal as of the date first above written. SELLER: ANTIGENICS INC., a Massachusetts corporation and a wholly-owned subsidiary of ANTIGENICS INC., a Delaware corporation By: /s/ Garo H. Armen ---------------------------------------< Name: Garo Armen, PhD Title: Chief Executive Officer PARENT: VIRBAC, S.A., a French corporation By: /s/ Pierre PAGES ---------------------------------------- Name: Pierre PAGES Title: Directeur General SUB: PP MANUFACTURING CORPORATION, a Delaware corporation By: /s/ Pierre PAGES ---------------------------------------- Name: Pierre PAGES Title: President EX-2.2 4 b49993agexv2w2.txt 1ST AMENDMENT TO ASSET PURCHASE AGREEMENT Exhibit 2.2 FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT This FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT (this "Amendment") is dated as of March 17, 2004 (the "Effective Date"), by and between ANTIGENICS INC., a Massachusetts corporation and a wholly-owned subsidiary of ANTIGENICS INC., a Delaware corporation, having its offices at 3 Forbes Road, Lexington, MA 02421 U.S.A. ("SELLER") and PP MANUFACTURING CORPORATION, a Delaware corporation that will have offices located on or after the Closing at 175 Crossing Boulevard, Framingham, Massachusetts, 01702-5404 ("SUB") and VIRBAC S.A., a French corporation having its offices at 1 ere Avenue-2065 m L.I.D.-06516 CARROS FRANCE ("PARENT," and together with SUB, "BUYER"). Capitalized terms used in this Amendment and not otherwise defined herein shall have those meanings attributed to them in the Agreement (as defined below). WITNESSETH WHEREAS, SELLER and BUYER are parties to that certain Asset Purchase Agreement dated December 10, 2003 (the "Agreement"); and WHEREAS, SELLER and BUYER desire to amend the Agreement, to provide for, among other things, the acknowledgement that the Permits (as defined therein) relating to USDA Product Licenses are Non-Transferable Permits. NOW THEREFORE, in consideration of the foregoing and of the mutual covenants set forth below, the parties hereby agree as follows: 1. The third "WHEREAS" clause contained in the preamble to the Agreement is hereby deleted in its entirety and replaced with the following: WHEREAS, SELLER desires to sell to SUB, and SUB desires to purchase from SELLER, certain equipment and other tangible assets listed on Schedule 1.1.1 hereto and utilized (i) in the manufacture of (x) the antigen described in Appendix B to this Agreement ("P45") and (y) a veterinary grade extract of Quillaja Saponaria bark as more specifically described on Appendix C to this Agreement ("QA-21 Adjuvant"), and (ii) to fulfill SUB's obligations under the Supply Agreement (as defined in Section 1.6.2(j) below); 2. Schedule 1.1.1 of the Agreement is hereby amended to add the following items as Tangible Assets: HPLC RELATED EQUIPMENT: Prep-Systems: Dynamax SD-1 Pumps (pair) A (01157) B (01156) with 800 ml/min. heads ProStar Load Pump (200 ml) 141814 Absorbance Detector (UV-1) E30566 Fraction Collector (FC-1) 188098 COLUMNS: 5 cm Prochrom (w/ Jacket) N/A 11 cm Prochrom 413-10-VE-95 Solvent Ex. Clmn. (5 x 25 cm) N/A ANALYTIC SYSTEMS: HP Solvent Delivery System 135941 / 132923 with Pump A and B Knauer Detector 35633 Pressure Monitor 136214 Gilson Injector 132378 Dilutor 649F2S-808 Control Box C01146 COMPUTERS: Dell Opti-Plex System PC ( 84ZHT01) Screen (9172802101 80709670H7K421 H) Mac G-4 HPLC System G-4 (XB0202FUHSE) Disk Drive (1010118178A) Screen (EW01602555) MAJOR ITEMS: Water Bath (VWR) 704406 UPS System 328601014 UPS System 328601024 Explosion Proof Refrigerator 1538 / ANTI0049 3. Schedule 2.7 of the Agreement is hereby deleted in its entirety and replaced with the Schedule 2.7 attached hereto and incorporated herein. 4. Section 4 of the Agreement is hereby amended by adding the following Section: 4.12. USDA Product Licenses. SELLER and BUYER acknowledge and agree that obtaining permits substantially similar to the Non-Transferable Permits set forth on Schedule 2.7 of the Agreement identified as "USDA Product Licenses" is necessary in order for the parties to effectuate the purposes for which they have entered into this Agreement. Therefore, the parties acknowledge and agree that, in the event that, notwithstanding its good faith, best efforts, BUYER is unable to obtain such permits within ninety (90) days of the Closing Date (or such longer period as may be necessary to obtain the permits in the event the submitted applications are delayed at the USDA and remain under consideration), and BUYER is not able to legally operate the Manufacturing Site without such permits, then the parties shall use their good faith, best efforts to work together to put the parties back in the positions that they would have been in had the Closing not taken place and the Agreement had been mutually terminated without further liability to either party for failure of a condition precedent to the Closing to be met. 2 5. Section 4 of the Agreement is hereby amended by adding the following Section: 4.13. Assignment of Prime Lease. SELLER agrees that from and after the Closing Date until December 31, 2004 BUYER may, at its sole option, by written notice to the SELLER (the "Assignment Notice") request that the SELLER request that the Prime Lessor (as defined in the Sublease) consent to an assignment (the "Assignment") of the Prime Lease (as defined in the Sublease) by SELLER to SUB or PARENT. SELLER hereby agrees that it will in good faith use commercially reasonable efforts to negotiate an assignment with BUYER and assist BUYER to effect such an assignment on terms that are reasonably acceptable to BUYER for sixty (60) days after the date of the Assignment Notice. If the Assignment is not complete within said sixty (60) day period, SELLER shall not be obligated to make further efforts with respect to the Assignment; provided, however, that so long as BUYER, SELLER and Prime Lessor have made and continue to make significant progress in the negotiation of the Assignment, SELLER shall continue in good faith to make commercially reasonable efforts to complete the Assignment for a reasonable period of time after said sixty (60) day period. BUYER agrees that it will reimburse SELLER and Prime Lessor for all costs and expenses incurred by SELLER or Prime Lesser, as the case may be, in connection with the Assignment regardless of whether the Assignment is executed, including attorney's fees; provided that, BUYER shall not reimburse or pay to SELLER and/or Prime Landlord, any consideration for the Assignment unless BUYER has provided its prior consent to such consideration. However, SELLER shall not be required to pay Prime Landlord any consideration for the Assignment. BUYER acknowledges and agrees that in accepting any such assignment of the Prime Lease it shall also assume all of SELLER's obligations under any subleases of the Premises (as defined in the Sublease). BUYER further agrees that it shall provide Prime Landlord and SELLER with reasonable and customary guarantees and indemnities in the documentation related to the assignment of the Prime Lease, including without limitation an indemnity by the assignee in favor of the SELLER for any loss, cost or damage that SELLER may incur under the Prime Lease from and after the date of the Assignment and a guaranty of such indemnity by PARENT if SUB is the assignee. In addition, BUYER understands and agrees that in the event that the Assignment is effected, upon the effective date of the Assignment, all of SELLER's obligations and agreements related to and contained in the third full paragraph of Section 6 of the Sublease (i.e., the obligations and agreements related to "Restoration Costs" as such term is defined in the Sublease) shall be extinguished and void and shall no longer be enforceable against BUYER or SELLER. 6. BUYER acknowledges that any and all representations, warranties and other covenants or agreements related to the specific Tangible Assets identified on Exhibit A hereto, may under certain circumstances be subject to certain claims of the Prime Landlord as described and set forth in the written consent of the Prime Landlord related to the Sublease Agreement or in the Prime Lease. 3 7. Section 9.4 (ii) of the Agreement is hereby amended by deleting it in its entirety and replacing it with the following: (ii) if to SELLER, to: Antigenics Inc. 3 Forbes Rd. Lexington, MA 02421 Attn: Vice President, Business Development With a copy to: Antigenics Inc. 3 Forbes Rd. Lexington, MA 02421 Attn: Senior Attorney 8. Except as set forth in this Amendment, the Agreement shall remain in full force and effect. 9. This Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, U.S.A. without regard to the conflicts of law principles thereof. 10. This Amendment may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of a number of copies hereof each signed by less than all, but together signed by all of the parties hereto. [SIGNATURE PAGE FOLLOWS] 4 IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to Asset Purchase Agreement under seal as of the date first above written. SELLER: ANTIGENICS INC., a Massachusetts corporation and a wholly-owned subsidiary of ANTIGENICS INC., a Delaware corporation By: /s/ Deanna M. Petersen --------------------------------------- Name: Deanna M. Petersen Title: Vice President, Business Development PARENT: VIRBAC, S.A., a French corporation By: /s/ Pierre PAGES --------------------------------------- Name: Pierre PAGES Title: Directeur General SUB: PP MANUFACTURING CORPORATION, a Delaware corporation By: /s/ Pierre PAGES --------------------------------------- Name: Pierre PAGES Title: President SCHEDULE 2.7 PERMITS Transferable Permits: - -------------------- None. Non-Transferable Permits: - ------------------------ USDA Product Licenses: o USDA A555.R1 (antigen) o USDA A555.R0 (vaccine) o USDA Establishment license 317 MWRA (Massachusetts Water Resource Authority) Waste Water Permit Flammable Storage Permit (Fire department) Department of Public Health, Controlled Substance Permit Department of Environmental Protection- Hazardous Waste Recombinant DNA Permit (town) EXHIBIT A Tangible Assets that May Be Subject to Landlord Claims Autoclave #5 Room 215 Depyrogenation Oven Room 215 Solvent Delivery System Integral Diaphragm Pump/Filtration System 2 EX-10.1 5 b49993agexv10w1.txt SUBLEASE Exhibit 10.1 SUBLEASE This SUBLEASE is made as of __March 16_________, 2004, by and between ANTIGENICS INC. ("Sublessor"), f/k/a Aquila Biopharamaceuticals, Inc., a Massachusetts corporation having a place of business at 3 Forbes Road, Lexington, Massachusetts 02421, and PP Manufacturing Corporation ("Sublessee"), a Delaware corporation having a place of business at 175 Crossing Boulevard, Framingham, Massachusetts 01702 and which is a wholly owned subsidiary of VIRBAC S.A., a French corporation. W I T N E S S E T H: -------------------- WHEREAS, pursuant to that Lease dated as of September 19, 1997 between NDNE 9/90 Corporate Center LLC, as landlord ("Prime Lessor") and Sublessor, as tenant (as amended, the "Prime Lease"), a true and complete copy of which is attached hereto as EXHIBIT A, Sublessor leases approximately 41,020 rentable square feet of floor space on the first, second and third floors of the building known as and numbered 175 Crossing Boulevard, Framingham, Massachusetts (the "Building") all as more particularly described in the Prime Lease (the "Premises"); and WHEREAS, Sublessee desires to sublease a portion of the Premises from Sublessor, and Sublessor is willing to sublease the same, all on the terms and conditions hereinafter set forth; NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties covenant and agree as follows: 1. Sublease of Premises. For the rent and upon the terms and conditions herein set forth, Sublessor hereby subleases to Sublessee, and Sublessee hereby subleases from Sublessor, 21,132 rentable square feet of floor space on the first and second floors of the Building (the "Subleased Premises" as shown on EXHIBIT B attached hereto and made a part hereof. Sublessor shall have the right (which shall be personal to it and its employees) from time to time to access, occupy and use as an invitee of Sublesee the R&D Office No. 252 (the "R&D Office") for a period from the date hereof until April 2, 2004; provided, however, that such access, occupancy and use of the R&D Office and such access through the Access Passage, (i) may only occur during regular business hours, except in the event of an emergency, (ii) shall be subject to the reasonable rules and regulations of Sublessee (including, without limitation, any security and identification requirements) and (iii) may not unreasonably interfere with Sublessee's use and occupation of the Subleased Premises or the conduct of its business therein. Sublessor hereby agrees to indemnify and hold harmless Sublessee from and against all claims, damages, losses, liabilities, costs and expenses, including, without limitation, attorneys' fees, with respect to any and all activities of Sublessor carried out in connection with its access to the R&D Office. 2. Term. The term of this Sublease (the "Term") shall commence upon the date on which this Sublease has been fully executed by Sublessor and Sublessee and the Prime Lessor has delivered the "Consent" as hereinafter defined (the "Commencement Date"), and shall, unless earlier extended as herein set forth, expire at 11:59 p.m. on September 30, 2010 (the "Expiration Date") or such earlier date upon which said term may expire, be canceled or be terminated pursuant to any of the terms or provisions of the Prime Lease, this Sublease or applicable law. 3. Appurtenant and Reserved Rights. Sublessee shall have, as rights appurtenant to the Subleased Premises, the non-exclusive right in common with others in the Building to use the common areas of the land and the Building, as and to the extent Sublessor is permitted to use the same under the Prime Lease, except that as to parking, Sublessee shall only have the non-exclusive right in common with others to use four (4) parking spaces per each even 1,000 square feet of the Subleased Premises. Sublessor for itself, its successors and assigns and the Prime Lessor, reserves the right for such parties and their designees to pass and repass through the Subleased Premises to access the utility area and any utility service distribution network located in the Subleased Premises that services the Premises for the testing, repair, maintenance and replacement of utilities and provision of utilities and services therefrom; provided, however, that access to the utility area and any utility service distribution network, (i) may only occur during regular business hours with prior notice, except in the event of an emergency and (ii) shall be subject to the reasonable rules and regulations of Sublessee (including, without limitation, any security and identification requirements). Sublessor for itself, its successors and assigns and the Prime Lessor, also reserves the right for such parties and for other sublessees and users of the Premises to pass and repass along the central corridor to and to use the freight elevator and the restrooms in the locations shown as the "Central Corridor Area" on EXHIBIT C attached hereto; provided, however, that such access to the Central Corridor, (i) may occur twenty four hours a day, seven days a week and (ii) shall be subject to the reasonable rules and regulations of Sublessee (including, without limitation, any security and identification requirements). 4. Base Rent. Sublessee shall pay to Sublessor the following amounts annually as base rent (the "Base Rent"):
---------------------------------------------------------- --------------------------- Dates Base Rent ---------------------------------------------------------- --------------------------- Commencement Date until September 8, 2006 (the end of $ 483,500.16 per year the 8th lease year under the Prime Lease) ---------------------------------------------------------- --------------------------- From September 9, 2006 (the beginning of the 9th lease $ 515,198.16 per year year) until Expiration Date ---------------------------------------------------------- ---------------------------
In addition, Sublessee shall pay as additional rent hereunder ("Additional Rent") Sublessee's Share (as hereinafter defined) of amounts from time to time payable by Sublessor as "Tenant" as Additional Rent under the Prime Lease, including without limitation amounts for Real Estate Tax Escalation, Operating Cost Escalation and Park Common Expenses, in each case as defined in the Prime Lease. "Sublessee's Share" is 51.52% of what Sublessor is -2- obligated to pay for such costs. Because Sublessor pays 35.22% of such costs ("Tenant's Proportionate Share" in the Prime Lease), Sublessee is required to pay 18.15% of the total of such costs under the Prime Lease. In addition, either (a) Sublessee shall pay as Additional Rent an allocation of amounts due for payment for electricity, water, gas, HVAC and other utility charges with respect to the Subleased Premises as equitably determined by Sublessor and Sublessee or (b) at Sublessor's election, the Subleased Premises shall be separately metered at Sublessor's sole cost and expense and Sublessee shall pay all utility charges directly to the utility providers. Base Rent shall be due and payable in equal monthly installments in advance on the date that is five (5) days before the first day of each calendar month without demand, deduction, offset or abatement, at the address of Sublessor, or at such other place as Sublessor may designate. Base Rent shall be pro rated for any partial month. Sublessee shall pay monthly estimates of Operating Cost Escalation. Real Estate Tax Escalation and Park Common Expenses, as applicable from time to time, on the date that is five days prior to the first day of each calendar month. Sublessee shall pay all other Additional Rent to Sublessor not less than five (5) business days after demand from Sublessor. 5. Permitted Uses. Sublessee shall use the Subleased Premises only for the uses permitted by the Prime Lease. Without limiting any other term or provision hereof, Sublessee shall not do, suffer or permit anything to be done in or upon the Subleased Premises except in accordance with and as permitted by the Prime Lease and applicable law. Sublessor shall from time to time upon Sublessee's request notify Prime Lessor of substances to add to Exhibit "O" to the Prime Lease that Sublessee has notified Sublessor are to be used in the ordinary course of Sublessee's business at the Premises. 6. Condition of Subleased Premises. Sublessee acknowledges that it has inspected the Subleased Premises and agrees to accept the Subleased Premises in their present "as is" condition without representation or warranty of any kind by Sublessor, provided, however, that Sublessor represents and warrants that to its knowledge, the Subleased Premises are, as of the date of this Sublease, in the condition required by the Prime Lease in all material respects. Sublessee shall not in any way make any alterations, additions or improvements to the Subleased Premises without having first secured the written permission of Sublessor and Prime Lessor. Any work shall be done in accordance with the plans and specifications submitted to and approved by Sublessor and Prime Lessor. Any alterations, additions or improvements made by Sublessee to the Subleased Premises shall be done at Sublessee's sole cost and expense in a good and workmanlike manner using new materials of first-class quality consistent with the style and finish of the Subleased Premises. Sublessee shall secure all necessary permits in advance of commencement of any work and shall keep the Subleased Premises free of any mechanics' or other liens and shall hold Sublessor and Prime Lessor harmless from any loss, cost or damage arising out of any work done by Sublessee or its agents or contractors. All contractors working for Sublessee in the Subleased Premises shall be properly insured and shall provide certificates of insurance naming Sublessor and Prime Lessor as additional named insureds prior to commencement of any work. Sublessee, at the expiration of the Term or earlier termination of this Sublease, shall deliver the -3- Subleased Premises to Sublessor in the same condition as they were at the time of the commencement of this Sublease, reasonable wear and tear only excepted, and including removing any remaining alterations made by Sublessee if so requested by Prime Lessor or Sublessor, and otherwise in the condition required by the Prime Lease, and Sublessee shall remove all personal goods and effects of Sublessee leaving the Subleased Premises neat, clean and in first-class rentable condition. Sublessee shall be solely responsible for its own personal property. Notwithstanding the foregoing, each of Sublessor and Sublessee, soley as between themselves and their respective permitted sucessors and assigns (expressly excluding the Prime Lessor who shall in no way be bound hereby including in the event of any attornment of Sublessee under this Sublease directly to the Prime Lessor), hereby agree that in the event the costs of restoring the Subleased Premises at the expiration or termination of this Sublease (the "Restoration Costs") exceeds $210,000 (the "Threshold Amount") and (1) such expiration is at the contemplated expiration of the Term on September 30, 2010 then Sublessor shall pay or otherwise reimburse Sublessee for any Restoration Costs in excess of the Threshold Amount provided that Sublessor shall have sole control over and resolve with the Prime Lessor any issues relating to what items must be removed and/or restored; (2) any termination is as a result of a default under the Prime Lease caused by Sublessor for which Sublessee is not responsible and Sublessee is not allowed to holdover in the Subleased Premises for the balance of the Term by the Prime Lessor then Sublessor shall pay or otherwise reimburse Sublessee for all Restoration Costs whether or not the amount of such costs exceeds the Threshold Amount) provided that Sublessor shall have sole control over and resolve with the Prime Lessor any issues relating to what items must be removed and/or restored; and (3) any termination is as a result of a default under the Prime Lease caused by Sublessor for which Sublessee is not responsible and Sublessee is allowed to holdover in the Subleased Premises for the balance of the Term by the Prime Lessor then Sublessor shall pay or otherwise reimburse Sublessee for seventy percent (75%) of any such costs in excess of the Threshold Amount. Payment by Sublessor to Sublessee pursuant to this provision shall be made within sixty (60) days of Sublessor's receipt of written invoice for payment from Sublessee, accompanied by all reasonable support documention evidencing the amounts owed. 7. Insurance; Indemnification. Sublessee shall maintain during the Term hereof liability, property damage and other insurance in such amounts and coverages and in such form as are required of Sublessor under the terms of the Prime Lease. All such insurance shall specifically name Prime Lessor and Sublessor (together with any other party or parties as required under the terms of the Prime Lease) as additional insureds thereunder. Such insurance shall not be subject to cancellation, termination or change with respect to Prime Lessor, Sublessor or such other parties without thirty (30) days' prior written notice. A duplicate original of the policy, a binder evidencing coverage thereof or a certificate of such insurance shall be delivered to each of Prime Lessor and Sublessor. Sublessee agrees to protect, defend (with counsel approved by Prime Lessor and Sublessor), indemnify and hold Sublessor and Prime Lessor harmless from and against any and all claims, losses and liabilities (other than claims and liabilities arising from any negligence or willful misconduct of Sublessor or its agents or employees in or about the Subleased Premises), -4- arising: (i) from the conduct or management of or from any work or thing whatsoever done in or about the Subleased Premises during the Term hereof; (ii) from any condition arising, and any injury to or death of persons, damage to property or other event occurring or resulting from an occurrence in or about the Subleased Premises during the Term hereof; and (iii) from any breach or default on the part of Sublessee in the performance of any covenant or agreement on the part of Sublessee to be performed pursuant to the terms of this Sublease or from any negligent act or omission on the part of Sublessee or any of its agents, employees, licensees, invitees or assignees. Sublessee further agrees to indemnify Sublessor and Prime Lessor from and against any and all damages, liabilities, costs and expenses, including reasonable attorneys' fees, incurred in connection with any such indemnified claim or any action or proceeding brought in connection therewith. Notwithstanding anything in this Sublease to the contrary (including, without limitation, Sections 7, 9 and 11), Sublessor agrees that it will not seek to recover consequential damages from Sublessee under this Sublease unless and then limited to the extent a third party is seeking to recover consequential damages from Sublessor and Sublessor will not enforce any judgment for such consequential damages it obtains against Sublessee except to the extent necessary to pay consequential damages owed to a third party. 8. No Assignment or Subletting. Sublessee shall have no right to assign this Sublease or to sublease the Subleased Premises or any part thereof without, in each case, Sublessor's and Prime Lessor's prior written consent. For the purposes of this Sublease the word "assign" shall be defined to include any direct or indirect change in control of the Sublessee. Sublessor's consent to an assignment of this Sublease or to a subletting of all or a portion of the Subleased Premises shall not be deemed a waiver of Sublessor's consent to any further assignment of this Sublease or subletting of all or a portion of the Subleased Premises by Sublessee. Notwithstanding any assignment or subsublease of this Sublease (whether or not permitted hereunder), Sublessee shall remain fully liable for (and is not relieved or released from) all obligations of Sublessee under this Sublease. 9. Primacy and Incorporation of Prime Lease. This Sublease is subject and subordinate to the Prime Lease and Sublessor purports hereby to convey, and Sublessee takes hereby, no greater rights hereunder than those accorded to or taken by Sublessor as tenant under the terms of the Prime Lease. Except as may be inconsistent with the other provisions hereof, all of the terms and provisions in the Prime Lease are incorporated herein by reference as if set forth herein in full and shall be applicable to this Sublease with the same force and effect as if Sublessor were the landlord under the Prime Lease and Sublessee were the tenant thereunder. Sublessee and Sublessor agree from and after the date hereof to comply fully with all such terms, conditions and obligations of the Prime Lease applicable to the Subleased Premises. Except as otherwise provided herein, Sublessee covenants with Sublessor to fully and faithfully perform all of Sublessor's obligations, covenants and conditions under the Prime Lease to be paid, performed and observed with respect to the Subleased Premises from and after the commencement of the Term hereof and to protect, defend (with counsel reasonably approved by Sublessor), indemnify and hold Sublessor harmless from all acts or failures to act on the part of Sublessee during the Term hereof. Except as otherwise provided herein, this Sublease shall in all respects be subject to the Prime Lease and if the Prime Lease shall terminate during the Term hereof, this Sublease, subject to the rights of the Prime Lessor under the Consent referred to in Section 17 below, shall terminate upon such termination date with the same force and -5- effect as if such termination date had been set forth herein as the date of termination hereof. Sublessor represents, to the best of its knowledge, that as of the date hereof, no default has occurred under the Prime Lease giving rise then, or in the future, to the right of Prime Lessor to terminate the Prime Lease. Notwithstanding anything else to the contrary contained herein, the following Sections, Exhibits and Definitions of the Prime Lease are not incorporated herein by reference and are not applicable to this Sublease: (a) Section 2.3(c) (re-measurements), Section 3 (Commencement Date; Improvements) (exclusive of Section 3.7(b) (installations), Section 3.8 (general provisions) and the last sentence of Section 3.10 (Changes in Building or Lot), each of which Sections 3.7(b) and 3.8 and the last sentence of Section 3.10 are incorporated into this Sublease), the first sentence of Section 8.3 (Electricity, Water and Gas), Section 8.7 (Representations), Section 9.13 (Assignment and Subletting) (exclusive of Section 9.13(b), which Section 9.13(b) is incorporated into this Sublease),13.6 (Brokerage), 13.8 (Security Deposit) and 13.12 (Landlord's Holdover Contribution); (b) Exhibit D (Building Construction Work), Exhibit E (Tenant's Plans and Specifications), Exhibit G (Option to Extend, Right of First Offer), and Exhibit J (Plan of First Offer Space); (c) the definitions "Landlord's Construction Representative", "Tenant's Construction Representative", "Anticipated Term Commencement Date, "Commencement Date", "Landlord's Holdover Contribution" and "Tenant's Access Date" in Section 1; and (d) such other definitions in Section 1 and such other terms of the Prime Lease as are inapplicable, inconsistent with, or specifically modified by the terms of this Sublease. Provided Sublessee is not in default under this Sublease beyond applicable periods of notice and grace, Sublessor covenants and agrees not to voluntarily cancel or surrender the Prime Lease, except for a termination expressly permitted thereunder as a result of casualty or condemnation. Notwithstanding the foregoing, the provisions of Section 12.2 of the Prime Lease are incorporated herein by reference as if set forth herein in full and shall be applicable to this Sublease as provided above, except that Sublessee shall not be entitled to receive a recognition or non-disturbance agreement from any mortgagee or lessor. 10. Certain Services and Rights. Except to the extent otherwise expressly provided herein, the only services or rights to which the Sublessee is entitled hereunder, including without limitation rights relating to the repair, maintenance and restoration of the Subleased Premises, are those services and rights to which Sublessor is entitled under the Prime Lease. Sublessor shall reasonably cooperate with Sublessee in obtaining such services and rights from the Prime Lessor. Sublessee acknowledges and agrees that Sublessor shall have no obligation to furnish any services whatsoever to Sublessee, except as expressly provided in this Sublease, any such obligation being that of the Prime Lessor under the Prime Lease and that the sole obligation of Sublessor hereunder with respect to such services is to use reasonable efforts in cooperation with Sublessee to attempt to cause Prime Lessor to perform its responsibility thereunder. 11. Compliance with Prime Lease. Sublessee shall neither do nor permit anything to be done which would cause the Prime Lease to be terminated or forfeited by reason of any right of termination or forfeiture reserved or vested in Prime Lessor under the Prime Lease, and Sublessee shall protect, defend (with counsel reasonably approved by Sublessor), indemnify and hold Sublessor harmless from and against any and all claims, liability, loss, damage and expense (including reasonable attorneys' fees) of any kind whatsoever by reason of any action or inaction on the part of Sublessee by reason of which the Prime Lease may be terminated or -6- forfeited. Provided Sublessee complies with the terms of this Sublease, Sublessor shall not do anything, and Sublessor shall make reasonable efforts not to permit anything to be done by third parties (including, without limitation, by any other assignee or Sublessee of Sublessor), which would cause the Prime Lease to be terminated or forfeited by reason of any right of termination or forfeiture reserved or vested in Prime Lessor under the Prime Lease, and, provided Sublessee complies with the terms of this Sublease, Sublessor shall protect, defend (with counsel reasonably approved by Sublessee), indemnify and hold Sublessee harmless from and against any and all claims, liability, loss, damage and expense (including reasonable attorneys' fees) of any kind whatsoever by reason of any action or inaction on the part of Sublessor (and/or by any other assignee or Sublessee of Sublessor to the extent Sublessor has not made reasonable efforts as provided above) by reason of which the Prime Lease may be terminated or forfeited. Sublessee and Sublessor each hereby covenants and agrees that it will not do or omit to do anything which would constitute a default under the provisions of the Prime Lease (provided in the case of Sublessor, Sublease has complied with the terms of this Sublease) or omit to do anything which it is obligated to do under the terms of this Sublease, which would constitute a default under the Prime Lease. 12. Default. In the event that Sublessee shall default in any of its obligations hereunder, including any default of the nature described in the Prime Lease, Sublessor shall have available to it all of the rights and remedies available to Prime Lessor under the Prime Lease as though Sublessor were the landlord thereunder and Sublessee the tenant thereunder. Notwithstanding anything to the contrary contained herein, Sublessee shall be in default of this Sublease if: (a) Sublessee shall fail to pay Base Rent, Additional Rent or other charges hereunder when due and such failure shall continue for five (5) days after receiving notice from Sublessor, or (b) Sublessee shall fail to perform or observe any covenant contained herein or in the Prime Lease on Sublessee's part to be performed or observed and such failure shall continue for the period after receiving notice from Sublessor that is equal to five (5) days less than the required notice period for such failure under Section 11 of the Prime Lease. Sublessee further agrees to reimburse Sublessor for all costs and expenses, including reasonable attorney's fees, incurred by Sublessor in asserting its rights hereunder against Sublessee or any other party. 13. Brokerage. Sublessee represents that it has not dealt with any broker in connection with this Sublease. Sublessee shall protect, defend (with counsel approved by Sublessor), indemnify and hold Sublessor harmless from and against all claims for brokerage or commission on account of this Sublease arising out of dealings by Sublessee with any broker. 14. Notices. All notices or other communications hereunder shall be in writing and shall be delivered by hand, or by telecopy or other facsimile transmissions (followed with a "hard" copy sent by national prepaid overnight delivery service) or sent by generally recognized over-night courier or by United States registered or certified mail, postage prepaid, addressed to each party at the address first set forth above or at such other address as either party shall hereafter designate by notice to the other. Sublessee shall also deliver a copy of any notice required to be delivered by Sublessee to Sublessor hereunder to Sublessor's attorney: Walter R. McCabe III, Ropes & Gray. One International Place, Boston, MA 02110-2624. -7- Notices shall be deemed given when delivered, or if mailed, on the day deposited in the mail as herein provided. Sublessor shall also deliver a copy of any notice required to be delivered by Sublessor to Sublessee to VIRBAC S.A., 1 ere Avenue-2065 m L.I.D.-06516 Carros France, Attention: General Counsel. 15. Security Deposit. On the date of execution of this Sublease by Sublessee, Sublessee shall post with Sublessor (and maintain at all times during the Term hereof) a Security Deposit in the amount of $ 77,914.02 which shall be held as security for Sublessee's performance hereunder. Notwithstanding any provisions to the contrary contained within this Sublease, in the event of the occurrence of a default by Sublessee under the Prime Lease or this Sublease, Sublessor may use said Security Deposit to the extent necessary to cure such default. Upon the use of all or any part of the Security Deposit to cure any default by Sublessee, Sublessee shall forthwith deposit with Sublessor the amount of Security Deposit so used, and failure to do so shall be deemed a default hereunder. Sublessee understands that its potential liability under this Sublease is not limited to the amount of the Security Deposit. Use of said Security Deposit by Sublessor shall not constitute a waiver, but is in addition to other remedies to Sublessor under this Sublease and under law. Such amount held as a Security Deposit shall bear no interest. If the Sublessee has fulfilled all of its obligations under this Sublease, any remaining balance of said Security Deposit shall be returned to Sublessee within thirty (30) days of the expiration of the Term of this Sublease. 16. Miscellaneous. This Sublease may be executed in one or more counterparts which together shall constitute one instrument. The invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of any other term or provision hereof. The captions to the paragraphs hereof are for convenience of reference only and are not intended to affect the meaning of the provisions of this Sublease. This Sublease is to be construed as a Massachusetts' contract, is to take effect as a sealed instrument, supersedes all prior communications between the parties hereto, sets forth the entire agreement and understanding between the parties and may be canceled, modified, or amended only by a written instrument executed by both Sublessor and Sublessee. Terms used herein and not defined shall have the meaning set forth in the Prime Lease. 17. Consent of Prime Lessor. This Sublease is subject to the prior approval and consent of Prime Lessor, which Sublessor agrees to use commercially reasonable efforts to obtain. This Sublease shall not become effective unless and until a written consent to this Sublease is executed and delivered by the Prime Lessor. 18. Utilities. In the event that Sublessor does not provide utility services to GTC Biotherapeutics, Inc. ("GTC") pursuant to the terms of the Sublease dated July 16, 2002 by and between GTC and Sublessor, as amended by First Amendment to Sublease dated of even date herewith (as so amended, the "GTC Sublease"), or in the event that Sublessee enters into or is deemed to have entered into a direct lease with Prime Lessor, Sublessee will (i) maintain the utility systems that service GTC's premises under the GTC Sublease and (ii) supply to GTC the utility services that Sublessor is required to supply to GTC, in each case in accordance with Sublessor's obligations to GTC under the GTC Sublease. -8- IN WITNESS WHEREOF, Sublessor and Sublessee have executed this Sublease as a sealed instrument as of the date first written above. Sublessor ANTIGENICS INC., a Massachusetts corporation and a wholly owned subsidiary of Antigenics Inc., a Delaware corporation By: /s/ Deanna M. Petersen ----------------------------------------------- Name: Deanna M. Petersen Title: Vice President, Business Development Sublessee PP MAnufacturing Corporation, a Delaware corporation By: /s/ Pierre PAGES ----------------------------------------------- Name: Pierre PAGES Title: President Lease Guaranty The undersigned, Virbac, S.A., a French corporation (the "Guarantor") of which Sublessee is a wholly owned subsidiary, for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged and as a duly authorized corporate action hereby unconditionally guarantees to Antigenics Inc., as sublandlord (the "Sublessor"), under a Sublease dated as of March 16, 2004 to which this Guaranty is attached (as from time to time amended and in effect, the "Sublease") with PPM Manufacturing Corporation, as Sublessee (the "Sublessee"): (i) the full and prompt payment when due and at all times thereafter of each and all payments of rent, additional rent and each and all other payments required to be made by the Sublessee under the terms of the Sublease (whether to the Sublessor or to such other payee as may be specified in the Sublease); and (ii) the full and prompt performance and observance by the Sublessee of each and all of the covenants and agreements of the Sublessee under the terms of the Sublease. All payments by the Guarantor shall be paid in lawful money of the United States of America. The obligations of the Guarantor under this Guaranty shall be primary, absolute and unconditional and shall remain in full force and effect until the Sublessee shall have fully and satisfactorily discharged all of its obligations to the Sublessor under the Sublease irrespective of (a) the genuineness, validity, regularity or enforceability of the Sublease or any assignment, subsublease or termination thereof; or (b) any compromise, settlement, release, renewal, extension, indulgence, change in or waiver or modification of any of the obligations and liabilities of the Sublessee under the Sublease or the release or discharge of the Sublessee from the performance or observance of any agreement, covenant, term or condition contained in the Sublease by operation of law or otherwise; or (c) the voluntary or involuntary liquidation, dissolution, sale or other disposition of all or substantially all the assets, marshalling of assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of, or other similar proceeding affecting, the Sublessee or any of its assets, or the disaffirmance of the Sublease in any such proceeding. The Sublessor, at its sole election, shall have the right to proceed first and directly against the Guarantor under this Guaranty without proceeding against or exhausting its remedies against the Sublessee, and without resorting to any other security held by the Sublessor. The Guarantor shall also be liable to the Sublessor for the expense of enforcement of and collection on this Guaranty including reasonable attorneys' fees. This Guaranty and every part hereof shall be binding upon the Guarantor and its successors and assigns, shall inure to the benefit of the Sublessor and its successors and assigns and also the Prime Lessor under the Sublease, and may not be modified or amended without the prior written consent of the Sublessor. If the Prime Lessor makes an Election under the Consent (as defined in the Sublease), then the obligations hereunder shall also include all obligations under the Sublease as amended by the Consent. The terms of this Guaranty may be enforced as to any one or more breaches of the Sublease either separately or cumulatively. The Guarantor does hereby represent and warrant that: (1) It has power to enter into this Guaranty and has duly executed and delivered this Guaranty; and neither this Guaranty, the execution and delivery thereof nor the agreements herein contained are prevented or limited by, contravene, or constitute a default under, any agreement, instrument or indenture to which the Guarantor is a party or by which it is bound or any other requirement of law; and (2) The Guarantor is an affiliate of Sublessee and the assumption by the Guarantor of its obligations hereunder will result in a financial benefit to the Guarantor. The Guarantor hereby waives notice of acceptance hereof and of all notices and demands of any kind, including without limitation any and all demands of payment on, and notice of nonpayment, protest and dishonor with respect to the Sublease. The Guarantor further waives notice and hereby consents to any amendments of the Sublease and the same shall in no way impair the undersigned's liability hereunder. Nothing shall discharge or satisfy the undersigned's liability hereunder expect the full performance and payment of the obligations guaranteed hereunder. This instrument is a continuing Guaranty and shall continue in full force and effect and shall not be terminable so long as the obligations guaranteed hereby, or any modifications, supplements or amendments thereto shall remain in force and effect. Agreed under seal March 16, 2004. VIRBAC, S.A., a French corporation By: /s/ Pierre Pages _______________________________ Name: Pierre Pages Title: Director General EX-10.2 6 b49993agexv10w2.txt 1ST AMENDMENT TO SUBLEASE Exhibit 10.2 FIRST AMENDMENT TO SUBLEASE This FIRST AMENDMENT TO SUBLEASE (this "Amendment") is made as of March 16, 2004, by and between Antigenics Inc. ("Sublessor"), a Massachusetts corporation formerly known as Aquila Biopharmaceuticals, Inc. with an address of 3 Forbes Road, Lexington, Massachusetts 02421 and which is a wholly-owned subsidiary of Antigenics Inc., a Delaware corporation, and GTC Biotherapeutics, Inc. ("Sublessee"), a Massachusetts corporation, whose mailing address is 175 Crossing Boulevard, Suite 410, Framingham, Massachusetts 01702. W I T N E S S E T H: WHEREAS, Sublessor and Sublessee entered into a Sublease dated July 16, 2002 (the "Sublease"); WHEREAS, Sublessor and Sublessee desire to amend the Sublease to delete Sublessee's option to sublease the "Tertiary Space" (as defined in the Sublease) and otherwise as provided below. NOW THEREFORE, for good and valuable consideration, the mutual receipt and legal sufficiency of which is hereby acknowledged, Sublessor and Sublessee do hereby agree as follows: 1. Amendment of Third Whereas Clause. The third Whereas clause of the Sublease is deleted in its entirety. 2. Amendment to Section 1(i). The definition of Sublease Termination Date in Section 1(i) of the Sublease is deleted in its entirety and replaced with the following: "subject to Section 25 hereof, September 30, 2010." 3. Amendment of Section 1(j). Section 1(j) of the Sublease is deleted in its entirety and replaced with the following: "the Subleased Premises consists of the Primary Space and the Secondary Space as shown on the sketch plan attached hereto as Exhibit A attached hereto." 4. Amendment of Sections 1(n) and 1(o). Sections 1(n) and 1(o) of the Sublease are hereby deleted in their entirety. 5. Amendment of Section 4(b). Section 4(b) of the Sublease is amended by adding the words "or Sublessor may" after the second occurrence of the words "Additional Rent," in the second sentence thereof. -1- 6. Amendment of Section 5(a). Section 5(a) of the Sublease is deleted in its entirety and replaced with the following: "be in the stated original amount of not less than Two Hundred Thousand and 00/00 Dollars ($200,000.00);" 7. Amendment of Section 8. The third sentence of Section 8 is amended by deleting the phrase ", including the Tertiary Space,". 8. Amendment of Section 9(a). Section 9(a) of the Sublease is amended by (a) adding the words "At all times during the term of the Sublease," at the beginning thereof; (b) adding the phrase "or cause to be provided" after the word "provide" in the first line thereof and by deleting the phrase "which are located in the Tertiary Space" and replacing it with the following: "that are located in the utility equipment area as shown on Exhibit A-1 attached hereto (the "UTILITY EQUIPMENT AREA") in the second line thereof. 9. Amendment of Section 9(a)(i). Section 9(a)(i) of the Sublease is amended by adding the phrase "or cause to be provided" after the word "provide" in the second line thereof. 10. Amendment of Section 9(a)(ii). Section 9(a)(ii) of the Sublease is deleted in its entirety. 11. Amendment of Section 9(a)(iii). Section 9(a)(iii) of the Sublease is amended by adding the phrase "or cause to be provided" after the word "provide" in the first line thereof and by deleting the phrase "utility/maintenance room located in the Tertiary Space" with the following: "Utility Equipment Area". 12. Amendment of Section 9(a)(v). The first sentence of Section 9(a)(v) of the Sublease is amended by deleting the phrase "Utility Services Termination Date" and replacing it with: "Sublease Termination Date" each time it appears. 13. Amendment of Section 9(a)(vii). The first sentence of Section 9(a)(vii) of the Sublease is amended by deleting the phrase "utility/maintenance room in the Tertiary Space at its sole cost and expense until the Utility Services Termination Date" and replacing it with the following: "utility/maintenance room in Utility Equipment Area at its sole cost and expense until the Sublease Termination Date". 14. Amendment of Section 9(a)(viii). Section 9(a)(viii) of the Sublease is amended by deleting the phrase "the earlier of the Sublease Termination Date or the Sublessee's occupancy of the Tertiary Space" with the following: "the Sublease Termination Date". 15. Section 9(b)(iii). Section 9(b)(iii) is deleted in its entirety. 16. Section 9(b)(iv). The second sentence of Section 9(b)(iv) is deleted in its entirety. 17. Heading for Section 11 and Sections 11(a) and 11(b). The heading of Section 11 is deleted in its entirety and is replaced with the following: "Right to the Subleased Premises." The first sentence of Section 11 and Sections 11(a) and 11(b) are deleted in their entirety. -2- 18. Amendment of Section 14(a). Section 14(a) of the Sublease is amended by deleting the words "Default, as defined in Section 11 of the Prime Lease," and replacing them with the word "default under the Prime Lease". 19. Section 17. The second sentence of Section 17 is amended by deleting the phrase "at 34 Commerce Way, Woburn, Massachusetts 01801, Attention: Mr. Neal Gordon" and replacing it with the following: "at 3 Forbes Road, Lexington, Massachusetts 02421, Attention: SVP of Operations". 20. Section 18. The third sentence of Section 18 is deleted in its entirety. 21. Section 25. A new Section 25 is added to the Sublease as follows: "EARLY TERMINATION". Sublessee shall have the right to terminate this Sublease provided Sublessee shall satisfy the following conditions precedent: (i) there shall be no default or event of default beyond any applicable grace and/or cure period pursuant to Section 14 of this Sublease at the time Sublessee exercises its right to terminate this Sublease or upon the date of termination, (ii) Sublessee shall give Sublessor with written notice of its election to terminate this Sublease with such notice being given not later than July 1, 2006 and (iii) Sublessee has completely vacated the Subleased Premises and fulfilled its obligations under Section 16 hereof no later than midnight on December 31, 2006. Should Sublessee comply with the foregoing conditions precedent, the Sublease Termination Date shall be December 31, 2006, and this Sublease shall terminate effective at midnight on December 31, 2006. Should Sublessee fail to comply strictly with any of the foregoing conditions precedent, the rights of Sublessee under this Section 25 shall be null and void. 22. Section 26. A new Section 26 is added to the Sublease as follows: "LEASED PREMISES MONITORING SYSTEM". Sublessor agrees that it shall, at Sublessor's sole cost and expense, modify the Premises monitoring system for the Leased Premises in such a manner that Sublessee has an independent system located in the Subleased Premises to access data collected by the Premises monitoring system with respect only to the "former animal facility" located in the Subleased Premises, subject to receipt by Sublessor of the consent of Prime Lessor if such consent is required. The design of such modifications and the specifications for any equipment to be purchased and installed by Sublessor in connection with such modifications shall be subject to Sublessee's prior review and approval, which approval shall not be unreasonably withheld, conditioned or delayed. Sublessor shall assign any warranties for the work performed in making such modifications and for any such equipment to Sublessee. 23. Amendment of Exhibit A. Exhibit A to the Sublease is deleted in its entirety and replaced with Exhibit A attached hereto. 24. Addition of Exhibit A-1. The Sublease is amended by adding Exhibit A-1 attached hereto to the Sublease. 25. Amendment of Exhibit B. Exhibit B to the Sublease is deleted in its entirety and replaced with Exhibit B attached hereto. -3- 26. Broker. Sublessor and Sublessee each represent and warrant to the other than it has not dealt with any broker in connection with this Amendment and will indemnify and hold harmless the other from and against any loss and expenses suffered by either of them as a result of such dealings with any broker. 27. Prime Lessor's Consent. This Amendment shall be contingent upon the Sublessor's receipt of the Prime Lessor's written consent to this Amendment. 28. Confirmation. Except as amended hereby, the Sublease is hereby confirmed and continues in full force and effect. 29. Counterparts. This Amendment may be executed in one or more counterparts which together shall constitute one instrument. 30. Prior Sublandlord Work. Sublessee hereby acknowledges and confirms to Sublessor and Prime Lessor that all work and obligations of Sublessor under the Sublease with respect to the Subleased Premises to be performed on or prior to the date hereof has been fully performed to the satisfaction of the Sublessee as of the date hereof, except for the obligations in Paragraph 22 of this Amendment. 31. Name of Sublessor. In the Sublease and the Consent to Sublease, a comma was included in the name of the Sublessor in error. The comma in the name of the Sublessor under the Sublease and the Consent to Sublease is hereby removed, and the name Antigenics Inc. without a comma is hereby inserted as the correct name of the Sublessor in the Sublease and the Consent to Sublease. 32. Terms; Section References. Terms used herein and not defined herein are used herein as defined in the Sublease. References herein to Sections of the Sublease which use "O" to denote clauses refer to applicable sections of the Sublease even where such parentheses may not be used or "." (or, at various points, "O" or ".") are used instead in the Sublease. -4- IN WITNESS WHEREOF, the parties hereto have executed this Amendment, as a sealed instrument, as of the date first above written. SUBLESSOR: Antigenics Inc., a Massachusetts corporation By: /s/ Jeff D. Clark ------------------------------------------ Name: Jeff D. Clark Title: CFO SUBLESSEE: GTC Biotherapeutics, Inc. By: /s/ John B. Green ------------------------------------------ Name: John B. Green Title: SVP and CFO -5- Exhibit A Primary Space - Third Floor [FLOORPLAN] Approximately 11,852 rentable square feet of Subleased Premises 22 Exhibit A Secondary Space - Second Floor [FLOORPLAN] Approximately 8,036 rentable square feet of Subleased Premises Crosshatched Area is Secondary Space 21 EXHIBIT A-1 Sketch Plan Utility Equipment Area -- -- First Floor [FLOORPLAN] Approximately 3,449 rentable square feet 20 -8- EXHIBIT B FIRST AMENDMENT TO LEASEHOLD LEASE This FIRST AMENDMENT TO LEASEHOLD LEASE (this "Amendment") is made as of March 16, 2004, by and between Antigenics Inc. ("Lessor"), a Massachusetts Corporation with an address of 3 Forbes Road, Lexington, Massachusetts 02421 and which is a wholly-owned subsidiary of Antigenics Inc., a Delaware corporation, and GTC Biotherapeutics, Inc. ("Lessee"), a Massachusetts corporation, whose mailing address is 175 Crossing Boulevard, Suite 410, Framingham, Massachusetts 01702. W I T N E S S E T H: WHEREAS, Lessor and Lessee entered into a Leasehold Lease dated July 19, 2002 (the "Leasehold Lease"); WHEREAS, Lessor and Lessee desire to amend the Leasehold Lease to delete Sublessee's rights to lease equipment located in the "Tertiary Space" (as defined in the Leasehold Lease) and otherwise as provided below. NOW THEREFORE, for good and valuable consideration, the mutual receipt and legal sufficiency of which is hereby acknowledged, Lessor and Lessee do hereby agree as follows: 1. Amendment of Second Whereas Clause. The second Whereas clause of the Leasehold Lease is deleted in its entirety and replaced with the following: "WHEREAS, Lessor and Lessee entered into a Sublease Agreement dated July 16, 2002, as amended by First Amendment to Sublease dated March 16, 2004 (the Sublease Agreement, as amended, is referred to as the "Sublease") for a portion of the Leased Premises (the "Subleased Premised")." 2. Amendment of the First Paragraph of Section 1. The first paragraph of Section 1 of the Leasehold Lease (including subparagraphs (a), (b) and (c) is deleted in its entirety and replaced with the following: "This Leasehold Lease is for the term beginning on the Sublease Commencement Date and terminating on the Sublease Termination Date, unless earlier terminated as provided in Section 25 of the Sublease." 3. Amendment of the Second Paragraph of Section 1. The second paragraph of Section 1 of the Leasehold Lease is amended by deleting the first sentence in its entirety and replacing it with the following: "During the term, Lessee agrees to pay to Lessor the monthly rental amounts set forth as the Leasehold Improvements Allocation, as adjusted by the Leasehold Improvements Allocation Reduction (2004 Amendment), in Exhibit B of the Sublease (the "Leasehold Rent") on or before the first day of each month." 4. Amendment of Section 2. The first and second sentences of Section 2 of the Leasehold Lease is amended by deleting the phrase "Primary Space, Secondary Space and the Tertiary Space" and replacing it with the phrase "Primary Space and Secondary Space" each time they occur. The first sentence of Section 2 is amended by deleting the reference therein to "Exhibit B" and replacing it with a reference to "Exhibit A" attached hereto. The third sentence of Section 2 is deleted in its entirety and replaced with the following: "Lessor shall have no further obligations with respect to the Equipment after the Sublease Commencement Date." 5. Amendment of Section 3(a). Section 3(a) is amended by deleting the reference therein to "Exhibit B" and replacing it with a reference to "Exhibit A" attached hereto. 6. Amendment of Section 3(d)(i). The first sentence of Section 3(d)(i) of the Leasehold Lease is amended by deleting the phrase "for the Primary Space, Secondary Space and Tertiary Space" and replacing it with the phrase "for the Primary Space and Secondary Space". The second sentence of Section 3(d)(i) of the Leasehold Lease is amended by deleting the phrase "and in the event the Lessee elects to exercise its option to sublease the Tertiary Space, January 1, 2007 with respect to Equipment located in the Tertiary Space". 7. Amendment of Section 3(d)(iv). The second sentence of Section (d)(i) of the Leasehold Lease is amended by deleting the phrase "the Primary Space, Secondary Space and Tertiary Space" and replacing it with the phrase "the Primary Space and Secondary Space". 8. Amendment of Section 3(e)(i). Section 3(e)(i) of the Leasehold Lease is amended by deleting the phrase "the Primary Space, Secondary Space and Tertiary Space" and replacing it with the phrase "the Primary Space and Secondary Space". Section 3(i) is further amended by deleting the reference therein to "Schedule C" and replacing it with a reference to "Exhibit A" attached hereto. 9. Amendment of Section 3(f)(iii). Section 3(f)(iii) of the Leasehold Lease is amended by (a) deleting the reference to "Exhibit C" and replacing it with a reference to "Exhibit B" attached hereto, and (b) deleting the phrase "after the earlier of the Sublease Termination Date or the Lessee's leasing of the Tertiary Space" and replacing it with "after the Sublease Termination Date". 10. Amendment of the Section 10. The second sentence of Section 10 is amended by deleting the phrase "34 Commerce Way, Woburn, Massachusetts 01801, Attention: Mr. Neal Gordon" and replacing it with the following: "3 Forbes Road, Lexington, Massachusetts 02421, Attention: SVP of Operations". 11. Amendment of Exhibit A. Exhibit A to the Leasehold Lease is deleted in its entirety and replaced with Exhibit A attached hereto. 12. Amendment of Exhibit B. Exhibit B to the Leasehold Lease is deleted in its entirety and replaced with Exhibit B attached hereto. 13. Amendment of Exhibit C. Exhibit C to the Leasehold Lease is deleted in its entirety. 14. Prime Sublessor Consent. This Amendment shall be contingent upon the Sublessor's receipt of the Prime Sublessor's written consent to this Amendment. -2- 15. Confirmation. Except as amended hereby, the Leasehold Lease is hereby confirmed and continues in full force and effect. 16. Counterparts. This Amendment may be executed in one or more counterparts which together shall constitute one instrument. -3- IN WITNESS WHEREOF, the parties hereto have executed this Amendment, as a sealed instrument, as of the date first above written. LESSOR: Antigenics, Inc., a Massachusetts corporation By: /s/ Jeff D. Clark ------------------------------------------ Name: Jeff D. Clark Title: CFO LESSEE: GTC Biotherapeutics, Inc. By: /s/ John B. Green ------------------------------------------ Name: John B. Green Title: SVP and CFO Exhibit A to Leasehold Lease Agreement Breakdown of Equipment by Room Updated: December 1, 2003
SPACE ROOM EQUIPMENT TAG NUMBER SERIAL NUMBER VENDOR - --------------------------------------------------------------------------------------------------------------------- Animal Facility -- Second Floor 246 6' BSC (Ducted) 1226 Cambridge 56-153CIV 246 4' BSC (Ducted) 4223 Aquila Nuaire 246 1 Getinge Autoclave 4220 Aquila Getinge Research Labs -- Second Floor 260 Fume Hood No Tag Labconco 262 1-4' BSC (Not ducted) 4208 Aquila Nuaire 262 1-6' BSC (Not Ducted) 4209 Aquila Nuaire 264 Cold Room Bally
ANTIGENICS, INC. LEASEHOLD LEASE AGREEMENT - EXHIBIT B TO LEASEHOLD LEASE ADDITIONAL RENT - LEASEHOLD IMPROVEMENTS UPDATED: NOVEMBER 14, 2003 PRIMARY SPACE
PRIMARY SPACE ------------- Total Res & Admin Spending 3rd Floor ----------- ------------- Gross Fixed Assets Leasehold Improvements 5,358,608 1,303,237 ----------- ------------- Total Gross Fixed Assets 5,358,608 1,303,237 Accum. Depr / Amort @ 12/31/01 Leasehold Improvements (1,370,825) (343,150) ----------- ------------- Total Accum Depr / Amort (1,370,825) (343,150) ----------- ------------- Net Gross Fixed Assets $ 3,987,783 $ 960,087 =========== ============= ----------- ------------- NET EQUIPMENT & LEASEHOLD IMPROVEMENTS $ 3,987,783 $ 960,087 ----------- ------------- LEASE MONTHS REMAINING @ 12/31/01 104 AMORTIZATION OF LHI PER MONTH $ 9,231.61 =============
ANTIGENICS, INC. LEASEHOLD LEASE AGREEMENT -- EXHIBIT B (CONTINUED) ADDITIONAL RENT -- LEASEHOLD IMPROVEMENTS UPDATED: NOVEMBER 14, 2003 SECONDARY SPACE SECONDARY SPACE -------------------------- TOTAL RES & ADMIN RESEARCH E-PRISE SPACE SPENDING 3RD FLOOR 2ND FLOOR 2ND FLOOR ____________ _____________ __________ _____________
Gross Fixed Assets Leasehold Improvements 5,358,608 1,303,237 947,178 195,436 ____________ ___________ _________ ________ Total Gross Fixed Assets 5,358,608 1,303,237 947,178 195,436 Accum. Depr/Amort @ 12/31/02 Leasehold Improvements (1,818,334) (451,063) (321,405) (57,481) ___________ ___________ _________ ________ Total Accum Depr/Amort (1,818,334) (451,063) (321,405) (57,481) ___________ ___________ _________ ________ Net Gross Fixed Assets $ 3,540,274 $ 852,174 $ 625,773 $137,955 =========== =========== ========== ======== NET EQUIPMENT & LEASEHOLD IMPROVE- ___________ ___________ __________ ________ MENTS $ 3,540,274 $ 852,174 $ 625,773 $137,955 ___________ ___________ __________ ________ LEASE MONTHS REMAIN- ING @ 12/31/02 92 AMORTIZATION OF LHI PER MONTH $8,301.39 =========
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