Restructuring Agreement

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.



RESTRUCTURING AGREEMENT







This RESTRUCTURING AGREEMENT ("Agreement") is entered into as of February 2, 2005 (the "Effective Date") by and among Baxter Healthcare S.A., a corporation organized under the laws of Switzerland ("BHSA"), Baxter Healthcare Corporation, a company organized under the laws of Delaware ("BHC"), and Cerus Corporation, a company organized under the laws of Delaware ("Cerus"). BHSA and BHC are sometimes collectively referred herein to as "Baxter." The foregoing entities are sometimes referred to herein individually as a "Party" and collectively as the "Parties."





WHEREAS, BHC and Cerus are parties to a Development, Manufacturing and Marketing Agreement, dated as of December 10, 1993, as amended to the date hereof (the " Platelet Agreement") relating to products referred to herein as the "Platelet System" and to a Development, Manufacturing and Marketing Agreement, dated April 1, 1996, as amended and restated June 30, 1998, as further amended to the date hereof (the "RBC/FFP Agreement") relating to products referred to herein as the "Plasma System" and the "RBC System;" (The Platelet System, the Plasma System and the RBC System are sometimes referred to herein individually as a " System" and collectively as the "Systems", and such terms are intended to have the same meanings herein as those set forth in the License Agreement and the Manufacturing and Supply Agreement being entered into concurrently herewith.)





WHEREAS, concurrently with this Agreement, Baxter Capital Corporation and Cerus are entering into an Amendment, Mutual Release and Settlement Agreement (the "BCC Settlement Agreement") relating to a Loan and Security Agreement, dated as of November 15, 2002 (the "Loan Agreement");





WHEREAS, BHA and BHSA are parties to a Research and Development Cost Sharing Agreement, dated January 1, 2001, for the designing, developing, manufacturing and marketing of various blood therapy products, including those related to the INTERCEPT Blood System;





WHEREAS, Baxter and Cerus desire to restructure the arrangements provided for in the Platelet Agreement and the RBC/FFP Agreement and resolve certain disputes that have arisen concerning those agreements, and in furtherance of such objectives Baxter and Cerus are entering into a License Agreement, Manufacturing and Supply Agreement, Transition Services Agreement, and a Trademark License Agreement (to which Baxter International Inc. is also a party) concurrently with this Agreement (such agreements referred to collectively as the " Concurrent Agreements");



WHEREAS, as used in this Agreement, "Commercialization Rights" means, as to a particular country or region, (a) as to Baxter, the right and responsibility of Baxter to



EXECUTION RESTRUCTURING AND SETTLEMENT AGREEMENT







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market, distribute and sell the Platelet System pursuant to the Platelet Agreement, and the Plasma System pursuant to the RBC/FFP Agreement (and as further provided under this Agreement), in that country or region; or (b) as to Cerus, all rights of Cerus hereunder and under the Concurrent Agreements upon termination of Baxter92s Commercialization rights in that country or region. For the purposes of this agreement, references to termination of Baxter Commercialization Rights, or to Cerus gaining Commercialization Rights, in a particular country or region means that licenses and related rights under the Platelet Agreement or the RBC/FFP Agreement, as the case may be, have been released and relinquished to Cerus, pursuant to Section 4 of this Restructuring Agreement;



NOW THEREFORE, in consideration of the premises and the covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows;





1. CONDITIONS. SUBSEQUENT PAYMENT.



1.1 Baxter92s Conditions Precedent. The effectiveness of this Agreement and the obligations of Baxter hereunder are subject to the satisfaction, or waiver by Baxter, of the following conditions precedent:



(a) Cerus shall have delivered, or caused to be delivered, original fully completed, dated and executed originals of this Agreement and the Concurrent Agreements; and



(b) All conditions to be satisfied by Cerus pursuant to Section 7(a) of the BCC Settlement Agreement shall have been satisfied.





1.2 Cerus92 Conditions Precedent. The effectiveness of this Agreement and the obligations of Cerus hereunder are subject to the satisfaction, or waiver by Cerus, of the following conditions precedent:



(a) Baxter shall have delivered, or caused to be delivered, original fully completed, dated and executed originals of this Agreement and the Concurrent Agreements;





(b) All conditions to be satisfied by BCC pursuant to Section 7(b) of the BCC Settlement Agreement shall have been satisfied.





1.3 Subsequent Payment. Baxter shall pay to Cerus the amount of [ * ] Dollars ($ [ * ] ) at the time of the next [ * ] , which shall occur not later than [ * ] . In connection with such payment, BHC represents to Cerus that no payments have been made by BHC to BCC respecting Revenue Sharing Payments (as defined in the Platelet Agreement) due to Cerus with respect to Platelet System sales in the fourth quarter of 2004 (or the first quarter of 2005), any rights to Revenue Sharing payments now reverting to Cerus.






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2. COMMERCIALIZATION RIGHTS, MARKET ACTIVITIES AND FUNDING.



2.1 EU Commercialization Rights Through 2006. Subject to the terms of this Agreement, Baxter shall maintain Commercialization Rights for the Platelet System under the Platelet Agreement and the Plasma System under the RBC/FFP Agreement through December 31, 2006 in the countries listed on Exhibit A to this Agreement, (the "European Territory"). Pursuant to such Commercialization Rights, Baxter shall (a) continue activities to achieve national and local approvals and gain market penetration of the Platelet System, and (b) activities to achieve national and local approvals (assuming CE mark approval) and market penetration of the Plasma System, in the countries of the European Territory. These activities will include pre-launch activities for the Plasma System to be approved by the Governance Committee. Through December 31, 2006 and any Extension Period, as defined below, Baxter will provide, at its expense all the necessary sales and marketing, distribution, regulatory, clinical/education and governmental affairs support to implement the plan to be approved by the Governance Committee. To carry out these activities, Baxter agrees to commit, at its own expense, through December 31, 2006, Baxter personnel comprising not less than [ * ] full-time-equivalent (FTE) employees in the European Territory in the areas itemized above, including not less than [ * ] employees, dedicated full-time, and [ * ] employees dedicated half-time, to marketing sales activities.





2.2 EU Commercialization Rights Extension 2007 97 2008.



(a) Baxter will have the option to continue Commercialization Rights for the Platelet System and the Plasma System in the European Territory from January 1, 2007 through December 31, 2008 (together with any the "Extension Period"); provided that prior to [ * ] , Baxter (i) provides Cerus with written notice of such election, (ii) the Platelet Agreement or the RBC/FFP Agreement has not been previously terminated pursuant to Section 12.1 hereof, and (iii) Baxter provides Cerus with assurance, satisfactory to Cerus in its reasonable judgment (and which could include further escrow of funds for marketing/promotional expenditures), that the funds and resources will be available as committed. As used herein, the term "Extension Period" will mean such period of extension and any period of further extension pursuant to Section 2.3 below. In the event that such conditions are not met by [ * ] , Baxter92s Commercialization Rights shall terminate effective January 1, 2007.



(b) If Baxter exercises the election in Section 2.2(a), Baxter will be obligated, in each of calendar years 2007 and 2008, to (i) expend not less than [ * ] Dollars ($ [ * ] ) per year on marketing/promotional activities in the European Territory for the Platelet System and Plasma System, to be allocated between such programs as approved by the Governance Committee, and (ii) commit, at Baxter92s own expense, not less than [ * ] full-time-equivalent (FTE) employees in the European Territory in the areas itemized above, including not less than [ * ] employees, dedicated full-time and [ * ] employees dedicated half-time, to marketing and sales activities for the Platelet System, and not less than [ * ] additional employees dedicated full-time to marketing and






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sales activities for the Plasma System, unless these commitments are revised through mutual agreement at the Governance Committee. However, if the Plasma System has not then received CE mark approval, and is not expected to receive such approval within such calendar year, the total expenditures for such year will be [ * ] Dollars ($ [ * ] ) and the [ * ] additional employees dedicated to marketing and sales activities for the Plasma System shall not be required for such calendar year.



2.3 EU Commercialization Rights Extension Post-2008.





(a) Subject to Section 8.1 hereof, Baxter will have the option to continue Commercialization Rights for the Platelet System and the Plasma System in the European Territory from January 1, 2009 through December 31, 2010 and for subsequent successive two-year periods; provided that prior to [ * ] of the calendar year preceding the commencement of any such period, Baxter (i) provides Cerus with written notice of such election, (ii) the Platelet Agreement or the RBC/FFP Agreement has not been previously terminated pursuant to Section 12.1 hereof, and (iii) Baxter provides Cerus with assurance, satisfactory to Cerus in its reasonable judgment (and which could include further escrow of funds for marketing/promotional expenditures), that the funds and resources will be available as committed. In the event that such conditions are not met by such February 28, Baxter92s Commercialization Rights shall terminate effective [ * ] of the succeeding calendar year.



(b) If Baxter exercises the election in Section 2.3(a), Baxter will be obligated, in each of calendar years of the further Extension Period, to (i) expend not less than [ * ] Dollars ($ [ * ] ) per year on marketing/promotional activities in the European Territory for the Platelet System and Plasma System, to be allocated between such programs as approved by the Governance Committee, and (ii) commit, at Baxter92s own expense, not less than [ * ] full-time-equivalent (FTE) employees in the European Territory in the areas itemized above, including not less than [ * ] employees, dedicated full-time and [ * ] employees dedicated half-time, to marketing and sales activities for the Platelet System, and not less than [ * ] additional employees dedicated full-time to marketing and sales activities for the Plasma System, unless these commitments are revised through mutual agreement at the Governance Committee. However, if the Plasma System has not then received CE mark approval, and is not expected to receive such approval within such calendar year, the total expenditures for such year will be [ * ] Dollars ($ [ * ] ) and the [ * ] additional employees dedicated to marketing and sales activities for the Plasma System shall not be required for such calendar year.



2.4 Reporting. The Baxter INTERCEPT Marketing Manager for Europe will be the primary contact for the Governance Committee, and will be responsible for reporting on the status and progress of the agreed-upon activities. Baxter will provide a monthly report to Cerus on market activities, including status and progress.



2.5 Intentionally Omitted.






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2.6 Escrow Account.



(a) Baxter will deposit in a joint BHC/Cerus escrow account (the "Escrow Account") pursuant to an Escrow Agreement to be entered into substantially in the form of Exhibit B to this Agreement (the "Escrow Agreement"):



i. [ * ] Dollars ($ [ * ] ) on or before the [ * ] day following [ * ] ;



ii. [ * ] Dollars ($ [ * ] ) on or before [ * ] ; Baxter represents that this amount equals the difference between (x) [ * ] Dollars ($ [ * ] ) and (y) [ * ] by Baxter in the third and fourth calendar quarters of 2004 on marketing and promotional activities for the INTERCEPT Blood System, pursuant to the plan outlined and agreed upon by the Governance Committee, not including Baxter FTE and fringe benefit expenses; and



iii. [ * ] Dollars ($ [ * ] ) on or before [ * ] .



(b) The Governance Committee will meet periodically (not less frequently than quarterly) to review and approve expenditures that have been made for marketing/promotional activities to assure consistency with the previously-approved budget and plan. Upon such approval, duly authorized signatures of Cerus and BHC will jointly sign instructions to the escrow agent to release funds to the Party (BHC, BHSA or Cerus) that incurred the expenditures. With respect to expenditures pursuant to Section 2.8, a duly authorized signatory of Cerus may solely sign instructions to the escrow agent to release funds to BHC for qualifying expenditures under Section 2.8.





2.7 2005962006 Commitment; Release From Escrow For Marketing/Promotional Activities. Amounts deposited into the Escrow Account in 2005 and 2006 will be used to fund marketing/promotional expenses for the 2005 calendar year and 2006 calendar year, respectively, as further discussed in Section 8.1 below. For the avoidance of doubt, these funds will be over and above, and will not be used to fund, Baxter FTE expenses committed in Section 2.1 hereof; provided, however, they may fund expenses of consultants and of additional employees (beyond the FTEs committed pursuant to Section 2.1 hereof) dedicated full-time to sales and marketing of INTERCEPT, if engagement of such resources is approved by the Governance Committee. Approval of marketing and promotional expenditures will be governed by the terms of the Platelet Agreement and the Plasma Agreement, which provide for final plans and strategies to be established by the Management Board (now the Governance Committee) reasonably and in good faith. Baxter and Cerus each agrees that the objective is to expend the full amount of these funds in each respective calendar year, and neither will unreasonably withhold its consent to such expenditures.



2.8 Release From Escrow For Plasma Development. Notwithstanding the foregoing, Cerus may, in its sole discretion, direct that an amount not exceeding Two Million Two Hundred Thousand Dollars ($2,200,000) be released from the Escrow Account to reimburse Baxter for activities that Baxter may undertake at Cerus92 request to






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continue development activities for the Plasma System directed toward CE Mark approval in the European Territory, and related manufacturing and validation, thereby releasing Cerus of the obligation for such payment from Cerus92 own funds. Not more than (a) [ * ] Dollars ($ [ * ] ) of such funds will be released in 2005 (to reimburse Baxter for activities in [ * ] ), and not more than (b) [ * ] Dollars ($ [ * ] ) of such funds will be released in [ * ] (to reimburse Baxter for activities in [ * ] ). Such release of funds will reduce the amount of the funds in the Escrow Account that would otherwise be dedicated to marketing/promotional expenses for the Plasma System, which the Parties agree is [ * ] Dollars ($ [ * ] ) for [ * ] , combined, before such reductions.



2.9 Distribution, Payment of Unused Funds. Subject to Section 2.7, in the event the Governance Committee does not approve expenditure of the full amount of the escrowed funds allocated to [ * ] in that calendar year, or does not approve expenditure of the full amount of funds committed pursuant to Section 2.2(b) hereof in any year of the Extension Period, or if for any reason there are any such escrowed or committed amounts remaining unspent at the end of any such calendar year, the amount of unspent funds in the escrow account will be distributed equally to Baxter and Cerus within [ * ] days following the end of the calendar year. With respect to any amounts committed pursuant to Section 2.2 or Section 2.3 for any Extension Period (if funds representing such amounts are not in the Escrow Account) one-half of the amounts so committed, but unspent, in any calendar year, will be paid by Baxter to Cerus within [ * ] days following the end of the calendar year.



2.10 Marketing Plans and Activities. For 2005, 2006 and of each year of the Extension Period, the joint Baxter/Cerus INTERCEPT marketing team will prepare and present to the Governance Committee a detailed marketing plan and budget for that calendar year for the Platelet System and Plasma System in the countries in the European Territory where Baxter retains Commercialization Rights. The Governance Committee will approve such marketing plan and budget not later than [ * ] and [ * ] respectively of each respective year, and will also by [ * ] agree on a retention plan for dedicated INTERCEPT marketing personnel in the European Territory for 2005 and 2006 and each year of any Extension Period. The Governance Committee must approve any subsequent changes to such plan or budget. Neither Baxter nor Cerus will unreasonably withhold its approval of such plan or budget or subsequent revisions thereto. Cerus will not unilaterally make any commitments to any customers that any studies will be funded by Baxter (including funding through the Escrow Account) relative to such customers. In the event that Cerus does unilaterally make any such commitment, Cerus shall bear the expense of such study.



2.11 North America Commercialization Rights.





(a) Subject to the terms of this Agreement, Baxter shall maintain Commercialization Rights as to the Platelet System in North America. It is understood that the Parties, intend to carry out discussions with the U.S. Food and Drug Administration ("FDA") to gain clarification whether the Platelet System may be approved for marketing in the United States without additional clinical or other activities,






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or whether additional such activities will be required. When such question is answered with reasonable clarity (which the Parties anticipate will occur at a meeting with the FDA, and will not require formal written response from the FDA), Cerus will provide Baxter with a notice requesting Baxter to confirm whether Baxter desires to continue to maintain Commercialization Rights as to the Platelet System in North America. Baxter will have [ * ] days from the date of Cerus92 notice to respond by written notice to Cerus. If Baxter responds that Baxter does not desire to maintain Commercialization Rights as to the Platelet System in North America, or if Baxter fails to respond strictly within such [ * ] day period, Baxter92s Commercialization Rights to the Platelet System in North America will immediately terminate upon such event.



(b) If Baxter92s written notice of response states that Baxter desires to maintain Commercialization Rights as to the Platelet System in North America, then Baxter shall have the following obligations:





(i) Baxter will fund one hundred percent (100%) of further clinical, development or other activities, including without limitation Phase 3b or Phase 4 studies, if required by the FDA for approval to market the Platelet System, and will use commercially reasonable efforts to carry out such activities and gain such approval;



(ii) Baxter will use commercially reasonable efforts to launch the Platelet System in the United States as promptly as possible following FDA approval. Baxter will expend not less than [ * ] Dollars ($ [ * ] ) per year on marketing/promotional activities in North America for the Platelet System during the calendar year preceding market launch and the next following calendar year, and will expend not less than [ * ] Dollars ($ [ * ] ) per year on marketing/promotional activities in North America for the Platelet System each calendar year thereafter. In addition, Baxter will commit not less than [ * ] FTEs to sales and marketing of the Platelet System in North America. The marketing/promotional expenses specified above will be over and above such FTE expenses, unless otherwise agreed by the Governance Committee.





2.12 BioOne Territory Commercialization Rights. With respect to the countries of Japan, China (including all Special Administrative Regions), Taiwan, South Korea, Thailand, Vietnam and Singapore (the "BioOne Territory"), Commercialization Rights continue to the extent provided in Section 4.4 of this Agreement; provided that if a transaction of the nature described in Section 3.2(c) hereof is not entered into with BioOne or another entity within [ * ] months of the date of this Agreement; Commercialization Rights as to the Plasma System will terminate in China (including Hong Kong and other specific administrative regions) and Japan. In such event, the remainder of countries in the BioOne Territory will be considered ROW as to the Plasma System for the purposes of this Agreement.





2.13 Rest of World Commercialization Rights.





(a) As used herein, "Rest of World" or "ROW" means all countries other than the countries of the European Territory, North America and the BioOne






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Territory, as such terms are defined herein; provided however that certain countries may be added to the ROW pursuant to the express provisions hereof.



(b) Subject to the terms of this Agreement, Baxter shall maintain Commercialization Rights for the Platelet System under the Platelet Agreement and the Plasma System under the RBC/FFP Agreement in the countries of the ROW through the period provided for in this Section 2.13.



(c) Baxter92s Commercialization Rights for the ROW will continue in effect for the same period as Baxter92s Commercialization Rights for the European Territory, subject to Section 8 hereof and to the following. For 2005, 2006 and each year of the Extension Period, Baxter will prepare and present to the Governance Committee a detailed marketing plan and budget for that calendar year for the Platelet System and the Plasma System for specific countries in the ROW. For 2005, such plan and budget for such specific countries will be presented not later than [ * ] days after the Effective Date, for approval by the Governance Committee its second calendar quarter meeting (if not approved sooner). For subsequent calendar years, such budget and plan will be presented for approval by the Governance Committee not later than [ * ] of each respective year. Not later than [ * ] of each succeeding year, the Governance Committee will review whether or not Baxter has performed the activities specified in the marketing plan and budget previously approved for each such country. If Baxter has not performed the specified activities in any country, Cerus may elect, by written notice to Baxter, to terminate Baxter92s Commercialization Rights in such country.





(d) If the marketing plan and budget for a particular ROW country presented by Baxter pursuant to Section 2.13(c) above is not approved by the Governance Board, Cerus may elect, by written notice to Baxter, to terminate Baxter92s Commercialization Rights in such country. If Baxter and Cerus disagree at the Governance Committee level on whether the plan should be approved, the matter will be submitted for arbitration pursuant to Section 15.12 hereof.





(e) If Baxter does not provide a marketing plan and budget for any year, as provided in Section 2.13(c) above for a country in the ROW, Cerus may request that Baxter provide such a plan and budget for such country. If Baxter does not provide such a plan for ...