Partnership Purchase Agreement

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Agreement made as of _________[date] among _________, Inc., a _________ corporation with offices at _________ each of the limited partners in _________ Clinical Partners, L.P., a limited partnership organized and existing under the laws of the State of _________(the "Partnership"), named in the Limited Partner register maintained by the Partnership (the "Limited Partners") and _________ Research Corporation, a _________ corporation and the general partner of the Partnership, with offices at _________(the "General Partner").

 

RECITALS

The business of the Partnership is to conduct research and experimentation relating to Products, including the receipt of necessary governmental approvals; to engage in any and all activities incident to them; and, after receipt of such approvals, to obtain revenues from the sale or other disposition of Products within the Field of Activity (collectively, the "Project").

_________, Inc., the Partnership and the Limited Partners entered into a Joint Venture and Partnership Purchase Option Agreement pursuant to which the Partnership granted to _________, Inc. an option to enter into a joint venture with the Partnership for the manufacture and marketing of Products within the Field of Activity.

_________, Inc. exercised such option and entered into the Joint Venture under a Joint Venture Agreement dated as of _________ among _________, Inc., the Partnership and the General Partner.

Under the provisions of the Option Agreement, the Limited Partners granted to _________, Inc. certain rights to purchase the Limited Partnership Interests of the Limited Partners.

_________, Inc. has determined to purchase the Limited Partnership Interests.

Therefore, in consideration of the covenants and agreements contained in this Agreement and other good and valuable consideration, the receipt and adequacy of which are acknowledged, the Partnership, the Limited Partners and _________, Inc. agree as follows:

 

ARTICLE I.

DEFINITIONS

1.1. Definitions.

Unless otherwise provided, each capitalized term used in this Agreement shall have the meaning assigned to it in the Glossary attached to this Agreement as Schedule I.

 

ARTICLE II.

PURCHASE AND SALE OF PARTNERSHIP INTERESTS

2.1. Purchase of Limited Partner Interests.

Each Limited Partner sells, transfers, assigns, conveys, sets over, grants and delivers to _________, Inc., and _________, Inc. purchases from such Limited Partner, the Limited Partnership Interest of such Limited Partner. At the request and expense of _________, Inc., such Limited Partner shall execute such further proper assignments and instruments as are requested to accomplish and record such purchase and sale and establish the sole ownership of _________, Inc. in and to the Limited Partnership Interest of such Limited Partner.

2.2. Rights After Sale.

After the sales referred to in Section 2.1, each Limited Partner and each Payment Recipient will not make, use or sell the Technology, or any Products, and will not assert that it has any right to prevent _________, Inc. or any assignee or transferee of _________, Inc. from making, using, selling or disclosing or preventing anyone else from making, using, selling or disclosing any part of the Technology or any Product.

2.3. Representations and Warranties of the Limited Partners.

Each Limited Partner represents and warrants that:

(a). It is the sole and lawful owner of the Limited Partnership Interest of such Limited Partner, free and clear of all liens, charges, claims, security interests and encumbrances of every kind, and no other Person or party has any rights, interests or claims in such Limited Partnership Interest.

(b). It has full right, power, capacity and authority to sell to _________, Inc. the Limited Partnership Interest of such Limited Partner, and to consummate the transactions contemplated by this Agreement.

2.4. Representations and Warranties of , Inc. _________,

Inc. represents and warrants that:

(a). _________, Inc. is a corporation duly organized, validly existing and in good standing under the laws of the State of _________. _________, Inc. has full right, power, capacity and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. This Agreement constitutes the valid and legally binding obligation of _________, Inc. in accordance with its terms.

(b). The execution and delivery by _________, Inc. of this Agreement, and the consummation of the transactions contemplated by it, have been duly authorized by all requisite action, require no approval of, filing with or other action by or in respect of, any governmental body, agency or official, do not violate, conflict with, or constitute a default under _________, Inc. Certificate of Incorporation (a true copy of which has been furnished to the Partnership) or the terms and provisions of any agreement, license, trust, indenture or other instrument or restriction, material to the conduct of the business of _________, Inc. to which _________, Inc. is a party or by which it is bound or any law (including without limitation any securities law of the United States or any securities or Blue Sky law of any state thereof), order, award, judgment or decree to which _________, Inc. is a party or by which it is bound.

(c). If _________, Inc. shall have elected to make the Stock Payment or the Combination Payment pursuant to subparagraph 4.1(b) of the Option Agreement:

(i) a registration statement relating to the Stock Payment or Combination Payment, as the case may be, and covering the shares of Common Stock to be delivered to Limited Partners pursuant to subparagraph 3.1(a) (the "Delivered Shares"), has been declared effective by the Securities and Exchange Commission (the "Commission"). Such registration statement, including all exhibits, as amended at the time such registration statement became effective is referred to below as the "Registration Statement" and the prospectus included in it, including the documents, if any, incorporated by reference in this Agreement, in the form in which such prospectus was first filed with the Commission pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the "Act"), shall be referred to as the "Prospectus";

(ii) no stop order suspending the use of the Registration Statement is in effect and no proceedings for such purpose are pending before or threatened by the Commission;

(iii) the Delivered Shares have been registered or qualified for sale under the securities or Blue Sky laws of each jurisdiction in which such registration or qualification is necessary in connection with the issuance and delivery of such Delivered Shares to such Limited Partner, in accordance with subparagraph 3.1(a);

(iv) the documents filed with the Commission and incorporated by reference in the Prospectus, when such documents were filed with the Commission, conformed in all material respects to the requirements of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission under it and none of such documents contained when so filed an untrue statement of a material fact or omitted to state a material fact required to be stated in it, or necessary to make the statements in it in the light of the circumstances under which they were made, not misleading;

(v) the Registration Statement and the Prospectus, when the Registration Statement was declared effective by the Commission and on the Limited Partner Purchase Date, conformed in all material respects to the requirements of the Act, and the rules and regulations of the Commission under it and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated in it or necessary to make the statements in it (in the case of the Prospectus, in the light of the circumstances under which they were made) not misleading; and

(vi) the Delivered Shares have been duly and validly authorized and, when issued to the Limited Partners in accordance with subparagraph 3.1(a), will be validly issued, fully paid and non-assessable and will conform to the description of them in the Prospectus; and when the Delivered Shares are so issued and delivered, the certificates will be in valid and legal form and this Agreement will deliver to the Limited Partners good and marketable title to the Delivered Shares, free and clear of all liens, encumbrances, equities or claims.

2.5. Representations and Warranties of the General Partner.

The General Partner represents and warrants, on behalf of the Partnership, that:

(a). The Partnership is the sole and lawful owner of the Technology, free and clear of all liens, charges, claims, security interests or claims in the Technology, except those in favor of any third parties which have licensed patent or other rights to the Partnership for use in the development of the Technology.

(b). The General Partner has full right, power, capacity and authority to execute and deliver this Agreement, and to consummate the transactions contemplated by it.

(c). The execution and delivery by the General Partner of this Agreement, and the consummation of the transactions contemplated by this Agreement, have been duly authorized by all requisite action, do not violate, conflict with, or constitute a default under, the Limited Partnership Agreement, a true copy of which has been furnished to _________, Inc., or the terms or provisions of any agreement, license, trust, indenture or other instrument or restriction, material to the conduct of the business of the General Partner, to which the General Partner is a party or by which it is bound, or any order, award, judgment or decree to which the General Partner is a party or by which it is bound.

 

ARTICLE III.

PURCHASE PRICE

3.1. Initial Payment.

As complete and full consideration for the sale to _________, Inc. by each Limited Partner of its Limited Partnership Interest _________, Inc. shall pay to each Limited Partner the consideration set forth in Section 3.2 below and either (1) the consideration set forth in subparagraph 3.1(a) below, if _________, Inc. chooses to make the Stock Payment pursuant to subparagraph 4.1(b) of the Option Agreement, (2) the consideration set forth in subparagraph 3.1(b) below, if _________, Inc. chooses to make the Cash Payment pursuant to subparagraph 4.1(b) of the Option Agreement, or (3) the consideration set forth in subparagraphs 3.1(a) and 3.1(b) below relating to the Combination Payment if _________, Inc. chooses to make the Combination Payment pursuant to subparagraph 4.1(b) of the Option Agreement.

(a). If _________, Inc. shall have elected to make the Stock Payment or Combination Payment pursuant to subparagraph 4.1(b) of the Option Agreement, _________, Inc. shall deliver to each Limited Partner, in the manner specified in clause (ii) of this subparagraph 3.1(a), (1) in the case of the Stock Payment, the number of shares of Common Stock that is equal to the quotient of (A) $_____ divided by (B) 90% of the average Closing Price per share of the Common Stock on the twenty trading days immediately preceding the fifth trading day prior to the date (the "Limited Partner Purchase Option Exercise Date") notice is given pursuant to Section 4.2 of the Option Agreement (but not including the Limited Partner Purchase Option Exercise Date), as such number of shares may be adjusted in accordance with clause (i) of this subparagraph 3.1(a), for each Unit of Limited Partnership Interest of such Limited Partner, or (2) in the case of the Combination Payment, the number of shares of Common Stock that would have been delivered to such Limited Partner if _________, Inc. had chosen to make the Stock Payment, multiplied by the Stock Percentage. In the case of partial Units, if any, held by any Limited Partner, the number of such shares to be delivered to such Limited Partner shall be equal to the product obtained by multiplying the proportion that the aggregate amount of such partial Unit bears to $_____ times the number of shares of Common Stock to be delivered to such Limited Partner in respect of each whole Unit.

(i). The number of shares of Common Stock to be delivered to each Limited Partner pursuant to this subparagraph 3.1(a) shall be adjusted as set forth below:

(A). Stock Dividends. If the number of shares of Common Stock outstanding at any time after five trading days prior to the Limited Partner Purchase Option Exercise Date (the "Stock Pricing Date") shall have been increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up of shares of Common Stock, then, immediately after the record date fixed for the determination of holders of Common Stock entitled to receive such stock dividend or the effective date of such subdivision or split-up, as the case may be, the number of shares of Common Stock to be delivered to each Limited Partner pursuant to this subparagraph 3.1(a) shall be appropriately increased so that such Limited Partner thereafter shall be entitled to receive, in the event _________, Inc. exercises its option to purchase the Limited Partnership Interests, the number of shares of Common Stock that such Limited Partner would have owned immediately following such action had the Limited Partnership Interest of such Limited Partner been purchased immediately prior to it by _________, Inc. for the Stock Payment.

(B). Combination of Stock. If the number of shares of Common Stock outstanding at any time after the Stock Pricing Date shall have been decreased by a combination of the outstanding shares of Common Stock, then, immediately after the effective date of such combination, the number of shares of Common Stock to be delivered to each Limited Partner pursuant to this subparagraph 3.1(a) shall be appropriately decreased so that such Limited Partner shall be entitled to receive, in the event _________, Inc. exercises its option to purchase the Limited Partnership Interests, the number of shares of Common Stock that such Limited Partner would have owned immediately following such action had the Limited Partnership Interest of such Limited Partner been purchased immediately prior to it by _________, Inc. for the Stock Payment or the Combination Payment.

(C). Reorganization, etc. If any capital reorganization of _________, Inc., or any reclassification of the Common Stock, or any consolidation of _________, Inc. with or merger of _________, Inc. with or into any other Person or any sale, lease or other transfer of all or substantially all of the assets of _________, Inc. to any other Person, shall be effected in such a way that the holders of Common Stock shall be entitled to receive stock, securities or assets with respect to or in exchange for Common Stock, then each Limited Partner shall, in the event _________, Inc. exercises its option to purchase the Limited Partnership Interests, have the right to receive the kind and amount of stock, securities or assets receivable upon such reorganization, reclassification, consolidation, merger or sale by a holder of the number of shares of Common Stock that such Limited Partner would have been entitled to receive pursuant to this subparagraph 3.1(a) had the Limited Partnership Interest of such Limited Partner been purchased by _________, Inc. for the Stock Payment or the Combination Payment, immediately prior to such reorganization, reclassification, consolidation, merger or sale, subject to adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this subclause 3.1(a)(i).

(D). Rights Offering. If _________, Inc. shall, at any time on or after the Stock Pricing Date, issue rights or warrants to all holders of its Common Stock without any charge to such holders, entitling them to subscribe for or purchase Common Stock (or securities convertible into Common Stock) at a price per share (or having a conversion price per share) that is less than the current Closing Price on the record date for the determination of holders of Common Stock entitled to receive such rights or warrants, then the number of shares of Common Stock to be delivered to each Limited Partner pursuant to this subparagraph 3.1(a) shall be appropriately increased so that each Limited Partner shall be entitled to receive the number of shares of Common Stock determined by multiplying the number of shares such holder would have been entitled to receive immediately prior to such record date had the Limited Partnership Interest of such Limited Partner been purchased immediately prior thereto by _________, Inc. for the Stock Payment or the Combination Payment by a fraction, the denominator of which shall be the number of shares of Common Stock outstanding on such date plus the number of shares of Common Stock that the aggregate offering price of the total number of shares so offered for subscription or purchase (or the aggregate initial conversion price of the convertible securities so offered) would purchase at such current Closing Price, and the numerator of which shall be the number of shares of Common Stock outstanding on such date plus the number of additional shares of Common Stock offered for subscription or purchase (or into which the convertible securities so offered are initially convertible).

(E). Fractional Shares. No fractional shares of Common Stock or scrip shall be issued to any Limited Partner as part of the Stock Payment or Combination Payment. Instead of any fractional shares of Common Stock that would otherwise be issuable to such Limited Partner, _________, Inc. shall pay to such Limited Partner a cash adjustment in respect of such fractional interest in an amount equal to that fractional interest of the average Closing Price of the Common Stock used to determine the number of shares of Common Stock comprising the Stock Payment or Combination Payment pursuant to the first sentence of this subparagraph 3.1(a).

In addition, if any event shall occur during the period of twenty trading days immediately preceding the Stock Pricing Date which, had such event occurred immediately after the Stock Pricing Date, would have required an adjustment pursuant to subclause (A), (B), (C) or (D) above, an appropriate adjustment shall be made in the number of shares of Common Stock to be delivered to each Limited Partner pursuant to this subparagraph 3.1(a).

(ii). The shares of Common Stock to be delivered to each Limited Partner pursuant to this subparagraph 3.1(a) shall be in such denominations and registered in such names as such Limited Partner shall have specified to _________, Inc. not less than 2 business days prior to the Limited Partner Purchase Date; provided that the foregoing shall not entitle any Limited Partner to transfer its Limited Partnership Interest except as provided in the Limited Partnership Agreement. In the absence of any such specification, each Limited Partner shall receive one (1) certificate evidencing the shares of Common Stock to be delivered to such Limited Partner registered in its name. Such shares of Common Stock shall be mailed to such Limited Partner by certified mail, return receipt requested, at the address of such Limited Partner set forth in the Limited Partner register that shall be maintained by the Partnership in accordance with Section 13.9 of the Limited Partnership Agreement. _________, Inc. shall pay all documentary, stamp, transfer or other transaction taxes attributable to the issuance or delivery of the Delivered Shares.

(b). If _________, Inc. elects to make the Cash Payment pursuant to subparagraph 4.1(b) of the Option Agreement, _________, Inc. shall pay to each Limited Partner $_____ on the Limited Partner Purchase Date for each Unit of Limited Partnership Interest of such Limited Partner. In the case of partial Units, if any, held by any Limited Partner, the amount of money to be paid to such Limited Partner shall be equal to the product obtained by multiplying the proportion that the aggregate amount of such partial Unit bears to $_____ by $_____. If _________, Inc. elects to make the Combination payment pursuant to Section 4.1(b) of the Option Agreement, _________, Inc. shall pay to each Limited Partner, on the Purchase Date, the sum of money that would have been payable to such Limited Partner if _________, Inc. had chosen to make the Cash Payment multiplied by the Cash Percentage.

3.2. Payment Stream.

In addition to the Stock Payment, Cash Payment or Combination Payment provided for in subparagraphs 3.1(a) and 3.1(b), _________, Inc. shall pay to each Limited Partner, as of the last business day of each calendar quarter after the Limited Partner Purchase Date, commencing with the calendar quarter in which the Limited Partner Purchase Date falls, an amount equal to its Limited Partner's Percentage of the following amounts:

(i) as of the Limited Partner Purchase Date until the Limited Partner Initial Rate Change Date:

(A) _____% of Direct _________ Product Revenues for such quarter;

(B) _____% of Bulk _________ Product Revenues for such quarter;

(C) _____% of Direct Competitive Product Revenues for such quarter;

(D) _____% of Bulk Competitive Product Revenues for such quarter;

(E) _____% of Direct _________ Product Revenues for such quarter;

(F) _____% of Bulk _________ Product Revenues for such quarter;

provided that if the Sales Agent shall have exercised its option under the Sales Agency Agreement to sell any of the Additional Units (as defined in this Agreement), then the amounts set forth above shall be multiplied by a fraction the numerator of which is _________ plus the number of Additional Units actually sold and the denominator of which is _________.

(ii) as of the Limited Partner Initial Rate Change Date until the Limited Partner Subsequent Rate Change Date, an amount equal to two-thirds of the amounts set forth above in (A)(F), as adjusted (if applicable); and

(iii) as of the Limited Partner Subsequent Rate Change Date, an amount equal to one-third of the amounts set forth above in (A)(F), as adjusted (if applicable);

provided that _________, Inc.'s obligation to make payments pursuant to this Section 3.2 shall terminate on the tenth anniversary of the Limited Partner Purchase Date unless, as of such anniversary, the Limited Partner Subsequent Rate Change Date shall not have occurred, in which case _________, Inc.'s obligation to make payments pursuant to this Section 3.2 shall continue until the twelfth anniversary of the Limited Partner Purchase Date.

3.3. Prepayment.

Notwithstanding Section 3.2, _________, Inc. shall have the right, at any time after the Limited Partner Purchase Date, to make an offer to the Payment Recipients to prepay _________, Inc.'s payment obligations under Section 3.2. _________, Inc. shall notify each Payment Recipient, in accordance with Section 8.7 hereof, of the proposed terms of such offer not more than 90 nor less than 30 days before such Payment Recipient shall be required to indicate in writing whether or not it accepts the terms of such offer. Each Payment Recipient accepting any such offer shall sell its rights to receive payments pursuant to Section 3.2 in accordance with the terms of such offer. If at any time the sum of the Initial Capital Contributions of the Payment Recipients (or, where applicable, the Initial Capital Contribution of the Limited Partner from whom any such Payment Recipient shall have acquired its right to receive payments pursuant to Section 3.2) that shall have accepted the terms of any such offer or offers shall exceed 80% of the Initial Capital Contributions of all Limited Partners, _________, Inc. shall have the right, for a period of thirty (30) days, commencing 1 year after the date (the "Acceptance Date") on which such Payment Recipients shall have indicated such acceptance to prepay _________, Inc.'s payment obligations under Section 3.2, in respect of, each Payment Recipient who has not accepted the terms of any such offer. Such prepayment to each such Payment Recipient shall be an amount equal to such Payment Recipient's Limited Partner's Percentage of an amount equal to the product of (i) 3 times the aggregate payments made to Payment Recipients pursuant to this Agreement for the one (1) year following the Acceptance Date and (ii) the ratio of the number of Units held by all Payment Recipients at the Limited Partner Purchase Date to the number of Units held by Payment Recipients at the Acceptance Date.

3.4. Method of Payment.

      (a) Each Quarterly Payment to a Payment Recipient pursuant to Section 3.2 shall be made by _________, Inc. within 60 days of the last day of each calendar quarter in respect of which _________, Inc. shall be required to make any such payment, at which time there shall also be delivered to such Payment Recipient a financial report of the operations of _________, Inc. upon which such quarterly Payment is based, certified by the Chief Financial Officer, Treasurer or Controller of _________, Inc.

(b). All cash payments to Limited Partners or Payment Recipients pursuant to Section 3.1, 3.2 or 3.3 of this Agreement shall be made by mailing to such Limited Partner or Payment Recipient, as the case may be, in accordance with Section 8.7, a check of _________, Inc. in the amount of such portion of such payment payable to such Payment Recipient or Limited Partner, as the case may be.

(c). A portion of each payment payable pursuant to this Article III to a Payment Recipient which is made more than 6 months after the Limited Partner Purchase Date shall constitute interest on the remaining portion of the payment, and shall be computed at the minimum rate in effect on the Limited Partner Purchase Date at which interest must be stated to avoid the imputation of interest under Section 483 or Section 1274 of the Code.

3.5. Interest.

Any payment pursuant to Section 3.1, 3.2 or 3.3 of this Agreement which is not made on or before the date when due shall accrue interest thereon from and after such date and until the date of payment at the rate of 15% per annum or, if such rate is in excess of the rate then permitted under applicable law, at the highest rate then permitted under applicable law.

3.6. Annual Statement.

_________, Inc. shall cause to be delivered to each Payment Recipient, within 120 days of the end of each fiscal year of _________, Inc., a statement setting forth the basis upon which payments were calculated during the preceding calendar year and the amount of payments payable during and with respect to such fiscal year, reported on by _________, Inc.'s certified public accountants.

3.7. Records.

_________, Inc. shall keep accurate records which are sufficient for the computation of Quarterly Payments and shall make such records available, upon reasonable advance notice, to the Payment Recipients at the place or places where such records are customarily kept, for inspection during normal business hours.

 

ARTICLE IV.

COVENANTS OF GENETECH

_________, Inc. covenants and agrees:

4.1. Prospectus Delivery.

If _________, Inc. elects to make the Stock Payment or Combination Payment pursuant to subparagraph 4.1(b) of the Option Agreement, as expeditiously as possible, to furnish to each Limited Partner such number of copies of the Prospectus as such Limited Partner shall reasonably request, or as shall be necessary in order to conform with the requirements of the Act, or the applicable rules and regulations of the Commission under it, in order to facilitate the sale or other disposition by such Limited Partner of the Delivered Shares delivered to it pursuant to subparagraph 3.1(a) of this Agreement.

4.2. Continued Existence.

Until the Partnership Option Termination Date, to take all action necessary to maintain the existence of the Partnership and to prevent the termination or dissolution thereof, or the winding up of its affairs.

4.3. Payment Recipient Register.

Until the termination of this Agreement, to keep a register (the "Payment Recipient Register") which, subject to such reasonable regulations as it may prescribe, shall contain the names and addresses of each Payment Recipient and, until _________, Inc. shall have received notice of a sale or an assignment made in accordance with Article VII, _________, Inc. shall be entitled to deem and treat each Payment Recipient contained in such register as the Payment Recipient, for the purpose of making payments or giving notices under this Agreement and for all other purposes.

4.4. Partnership Agreement.

To cause the Partnership to deliver a conformed copy of this Agreement to each Limited Partner, promptly after the execution of it.

4.5. Sale of Products.

To use diligence to manufacture and sell Products within the Field of Activity; provided that, if _________, Inc. shall determine that it cannot reasonably use such diligence, it shall use its best efforts to license the Technology to a third party for the highest consideration that is commercially practicable, provided that the Technology may only be licensed if each third party sublicensee agrees in writing to maintain and to make available the records required by Section 3.7 and to make reports containing the substance of the reports required by Sections 3.4 and 3.6.

 

ARTICLE V.

DISCLAIMERS

5.1. Products.

Neither the Partnership nor any Limited Partner makes any warranty (except for the representations and warranties made by it pursuant to Article II hereof), express or implied, and it is expressly agreed that neither the Partnership nor any Limited Partner shall be liable, or in any way responsible, for the operation, performance, serviceability, quality of performance, material or commercial success of any Product or any process related to the Technology, or the use, sale or other disposition of any Product or any process related to the Technology, in whole or in part.

5.2. Technology.

Nothing in this Agreement shall be construed as:

(i) a warranty or representation by the Partnership or any Limited Partner as to the validity or scope of any patent rights forming part of or related to the Technology; or

(ii) a warranty or representation by the Partnership that anything substantially derived from the Technology made, used, sold, or otherwise disposed of under this Agreement is or will be free from infringement of patents of third Persons.

5.3. Patents.

Neither the Partnership nor any Limited Partner makes any representation, or extends any warranty of any kind, either express or implied, or assumes any responsibility whatever with respect to the use, sale, or other disposition by _________, Inc. or its vendees or transferees of products incorporating or made by use of patents or patent applications forming part of or related to the Technology.

 

ARTICLE VI.

TERM AND TERMINATION

This Agreement shall continue in effect until terminated, in whole or in part, in accordance with the following provisions:

6.1. Event of Default.

(a). The events set forth below shall constitute "events of default": (i) the institution of a voluntary case by _________, Inc. under any applicable bankruptcy, insolvency or other similar law in effect, or the consent by _________, Inc. to the entry of an order for relief in any involuntary case under any such law, the consent by _________, Inc. to the appointment of or possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator or similar official of _________, Inc. or of any substantial part of its property, the general assignment by _________, Inc. for the benefit of creditors, or the taking of any corporate action by _________, Inc. in furtherance of any of the foregoing; or (ii) the entry of a decree or order for relief by a court having jurisdiction in the premises in respect to _________, Inc. in an involuntary case under any applicable bankruptcy, insolvency or other similar law in effect, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or similar official of _________, Inc. or of any substantial part of its property or ordering of the winding up or liquidation of its affairs, and any such decree or order shall remain unstayed or undischarged and in effect for a period of 60 days; or (iii) the cessation of operations by _________, Inc.; or (iv) the seizure or attachment of all or a substantial part of the assets of _________, Inc. in conjunction with any action against it by any third party and such seizure or attachment shall not be terminated, vacated or set aside or stayed within 60 days from the date of such seizure or attachment; or (v) if _________, Inc. elects to make the Stock Payment pursuant to subparagraph 4.1(b) of the Option Agreement, a failure by _________, Inc. to deliver to each Limited Partner the shares of Common Stock to be delivered to such Limited Partner pursuant to subparagraph 3.1(a) of this Agreement, or (vi) a failure by _________, Inc. to make any payment required by this Agreement when due, which failure continues for a period of ten (10) days after the date on which the same is due; or (vii) a default in the performance, or breach, of any covenant or warranty of _________, Inc. contained in this Agreement and continuance of such default or breach for a period of 90 days. _________, Inc. shall promptly notify in writing each Payment Recipient upon the occurrence of any event of default. If at the termination of a period commencing upon the occurrence of any event of default and ending 60 days later, the default is not cured to the reasonable satisfaction of each Payment Recipient then each Payment Recipient will have the right to terminate this Agreement with respect to it immediately upon giving notice to such effect to _________, Inc. and shall be free to pursue against _________, Inc. and remedy available at law in equity or by statute or otherwise.

6.2. Termination.

If not terminated earlier pursuant to Section 6.1, this Agreement (except for Sections 2.3, 2.4, 2.5 and Article V) shall terminate when the shares of Common Stock to be delivered to Limited Partners in accordance with subparagraph 3.1(a), if any, shall have been delivered and all payments called for in Article III shall have been made by _________, Inc. to the Payment Recipients and Limited Partners, and the parties shall have no further rights or obligations under this Agreement. The provisions of Sections 2.3, 2.4, 2.5 and Article V shall survive the termination of this Agreement.

6.3. Accrued Payments.

Payments accrued as of the date of termination of this Agreement shall remain due and payable notwithstanding termination.

 

ARTICLE VII.

SALE OR ASSIGNMENT

7.1. Sale or Assignment.

Nothing in this Agreement shall prohibit or restrict _________, Inc. from assigning, transferring or selling any or all of its rights under this Agreement to any Person; provided that, notwithstanding any such assignment, transfer or sale, _________, Inc. shall not be relieved of its obligations, covenants and liabilities under this Agreement unless each Payment Recipient shall have consented and, in the case of any assignment prior to the issuance and delivery by _________, Inc. of the Delivered Shares to the Limited Partners in accordance with subparagraph 3.1(a) or the Cash Payment in accordance with subparagraph 3.1(b), as the case may be, each such Limited Partner who has not received the Delivered Shares or the Cash Payment to be delivered to it, if any, shall have consented. If this Agreement is assigned to any Affiliate of _________, Inc., or to any Person in connection with a merger or consolidation by _________, Inc. with or into such Person, by operation of law or otherwise, no consent shall be required so long as such Affiliate or such Person expressly assumes the due and punctual performance and observance of all of the covenants and agreements contained in this Agreement to be performed by _________, Inc. Subject to any restrictions on transferability required by law, a Payment Recipient may assign or transfer in writing this Agreement or sell any or all of its rights under this Agreement, provided the assignee or transferee delivers to _________, Inc. an opinion of counsel stating that, in the opinion of such counsel (which counsel and opinion shall be satisfactory to _________, Inc.), such assignment or transfer may be legally completed in compliance with Federal and state laws and such other documents as may be reasonably requested by _________, Inc. _________, Inc. and each Payment Recipient shall provide written notice to each other of any such assignment or sale made in accordance with this Section 7.1 no later than 10 days prior to such assignment or sale setting forth the identity and address of the assignee or purchaser and summarizing the terms of the assignment or sale.

 

ARTICLE VIII.

MISCELLANEOUS PROVISIONS

8.1. Entire Agreement.

This Agreement sets forth and constitutes the entire agreement among the parties to this agreement with respect to the subject matter of this Agreement, and shall supersede any and all prior agreements, understandings, promises and representations made by any party to any other party concerning the subject matter of this Agreement and the terms applicable to it. This Agreement may not be released, discharged, amended or modified in any manner except by an instrument in writing signed by each party.

8.2. Parties Independent.

In making and performing this Agreement, the parties act and shall act at all times as independent contractors and nothing contained in this Agreement shall be construed or implied to create an agency, partnership or employer and employee relationship among any of the parties. At no time shall any party make commitments or incur any charges or expenses for or in the name of any other party.

8.3. Severability.

The invalidity or unenforceability of one or more provisions of this Agreement shall not affect the validity or enforceability of any of the other provisions of this Agreement and this Agreement shall be construed in all respects as if such invalid or unenforceable provisions were omitted.

8.4. Construction.

This Agreement shall be deemed to have been entered into and shall be construed and enforced in accordance with the laws of the State of _________ as applied to contracts made and to be performed entirely within _________.

8.5. Non-Waiver of Rights.

The failure of any party to insist, in any one or more instances, upon the performance of any of the terms, covenants or conditions of this Agreement, and to exercise any right under this Agreement, shall not be construed as a waiver or relinquishment of the future performance of any such term, covenant or conditions or the future exercise of such right, but the obligations of any other party with respect to such future performance shall continue in full force and effect.

8.6. Headings.

The headings of the articles, sections and paragraphs used in this Agreement are included for convenience only and are not to be used in construing or interpreting this Agreement.

8.7. Notices.

Unless otherwise provided in this Agreement, any notice or other communication or mailing required or permitted to be made or given to any party pursuant to this Agreement shall be deemed made or given if delivered by hand on the date of such delivery, to such party, if mailed on the fifth day after the date of mailing, if sent to such party by certified or registered mail or air mail, postage prepaid, addressed to it (Attention: Secretary, in the case of _________, Inc.; Secretary, in the case of the General Partner, in each case, at its address set forth on the first page of this Agreement; in the case of a Limited Partner, at its address in the Limited Partner register that shall be maintained by the Partnership in accordance with Section 13.g of the Limited Partnership Agreement; and, in the case of a Payment Recipient, at its address in the Payment Recipient Register or to such other address as shall be designated by written notice, similarly given, to each other party).

8.8. Counterparts.

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

In witness of The parties have caused this Agreement to be duly executed by their authorized officers as of the day and year first above written.

_________, Inc.

By _________

Title:

_________ Research Corporation

By _________

As Attorney-in-Fact for each of the

Limited Partners

_________ Research Corporation,

General Partner

By _________

Title:

 


 

SCHEDULE I.

GLOSSARY

 

(a). "Affiliate" means a Person which directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the Person specified.

(b). "Completion Date" means the date upon which _________, Inc. shall have received written notice to the effect that the Food and Drug Administration ("FDA") has issued to _________, Inc. or the Partnership a Regulatory Approval in the Field of Activity.

(c). "Controls" or "Controlled" means possession of the ability to grant licenses or sublicenses without violating the terms of any agreement or other arrangements with, or the rights of, any third party.

(d). "Core Know-How" means all technical information, know-how data, preclinical and clinical results, techniques, discoveries, inventions, ideas, and other information (whether or not patentable), other than Program Patents, Program Know-How and Core Patents, which: (a) _________, Inc. has or may develop or acquire, (b) _________, Inc. controls, and (c) is necessary in the use, including any use in connection with research and experimentation, manufacture, sale or other disposition of the Products, or any Formulation within the Field of Activity.

(e). "Core Patents" means all patents (including inventor's certificates) issued at any time throughout the world, including any extension, reissue and renewal patents but not including any Program Patents, which: (a) _________, Inc. has or may develop or acquire, (b) _________, Inc. controls, and (c) in the absence of the license granted under the Cross License Agreement would be infringed by the use, including any use in connection with research and experimentation, manufacture, sale or other disposition of the Products, or any Formulation or any intermediate or final product containing the Products within the Field of Activity.

(f). "Cross License Agreement" means the Cross License Agreement dated _________ between the Partnership and _________, Inc. as the same shall be amended or modified from time to time.

(g). "Development Agreement" means the Development Agreement dated _________ between the Partnership and _________, Inc. as the same shall be amended or modified from time to time.

(h). "Field of Activity" means the use, including any use in connection with research and experimentation, manufacture, sale or other disposition in the United States of the Products (or any Formulation) for human pharmaceutical use in the United States.

(i). "Formulation" means the combination of Products with other active or inert ingredients to create a human pharmaceutical product.

(j). "Joint Venture Revenues" means gross proceeds from the sale, license or other disposition, within the Field of Activity, of the Products, any Formulation, or any product embodying or derived from the Technology, less prompt payment discounts and other trade discounts, transportation charges, insurance charges, returns, taxes (not including income taxes) and allowances; in determining Joint Venture Revenues, any Product that is transferred to _________, Inc., or an Affiliate of _________, Inc., for resale, licensing or other disposition by _________, Inc., or such Affiliate, shall not be deemed to have been sold, licensed or otherwise disposed of to a third party or is retained by _________, Inc. or such Affiliate for its own purposes; in the case of any such proceeds recognized by the Venture from the sale or other disposition of any Products, the Managing Venturer shall in good faith use its best efforts to establish a reasonable basis upon which to allocate the portion of such proceeds attributable to the Products, or such part of them (the "Allocated Portion"), and there shall be included in this definition only the Allocated Portion.

(k). "Mode of Treatment" means any method of administering a Formulation to a patient.

(l). "NDA" means an application to the FDA for the sale or other disposition of the Products for an Indication using a Formulation and Mode of Treatment.

(m). "Person" means an individual, a partnership, a joint venture, a corporation, a trust, an estate, an unincorporated organization, or any other entity or a government or any department or agency of it.

(n). "Products" means any physical, chemical or biological material, or any portion of it formulation containing it, produced directly or indirectly, which (a) _________, Inc., during the term of the Development Agreement, own and Controls and (b) is necessary in the use, including any use in connection with research and experimentation, manufacture, sale or other disposition of human pharmaceuticals within the Field of Activity, and any replication of such material or part of such material.

(o). "Program Know-How" means all technical information, know-how, data, preclinical results, techniques, discoveries, inventions, ideas, and other information (whether or not patentable), other than Program Patents, which (a) is developed, made, conceived, created or otherwise acquired by _________, Inc. during and in the course of work in the Research Program and (b) is necessary in the Field of Activity.

(p). "Program Material" means any physical, chemical or biological material (including any Products) which (a) is made, developed or otherwise acquired by _________, Inc. during and in the course of the Research Program and (b) is necessary in the Field of Activity, and any replication of such material or part of such material.

(q). "Program Patent" means any patented invention (or patented discovery or idea) which (a) is made by _________, Inc., alone or together with others, during and in the course of the Research Program, and (b) is necessary in the Field of Activity.

(r). "Regulatory Approval" means (a)(i) in the case of _________[Products] an approval by the FDA of an NDA and (ii) in the case of _________[Products], an approval by the FDA for the sale or other disposition of _________[Products] for an Indication using a Formulation of Products and Mode of Treatment; or (b) in the event of any change in the regulatory process, an approval similar to the foregoing for sale of the Products, or any Formulation.

(s). "Research Program" means any research or experimentation relating to the Field of Activity, conducted, directly or indirectly by _________, Inc. pursuant to the Development Agreement.

(t). "Technology" means collectively all of the right, title and interest of the Partnership, (i) derived by the Partnership under the Cross License Agreement in Biological Materials, Core Know-How and Core Patents, and (ii) all Program Know-How and all Program Patents excluding all of the right, title and interest of _________, Inc. granted to _________, Inc. under the Cross License Agreement, to Program Know-How and Program Patents.

(x). "United States" means the United States of America, its possessions and its territories

 

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