Exhibit 10.21

 

EXECUTION DRAFT

 

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission.  Asterisks denote omissions.

 

 

DEVELOPMENT, LICENSE AND OPTION AGREEMENT

 

BY AND AMONG

 

MOMENTA PHARMACEUTICALS, INC.,

 

BAXTER INTERNATIONAL INC.,

 

BAXTER HEALTHCARE CORPORATION, AND

 

BAXTER HEALTHCARE SA

 

DATED AS OF DECEMBER 22, 2011

 

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DEVELOPMENT, LICENSE AND OPTION AGREEMENT

 

This Development, License and Option Agreement (the “Agreement”), executed the
22nd day of December, 2011 (the “Execution Date”), is made by and among Momenta
Pharmaceuticals, Inc., a Delaware corporation (“Momenta”), with a principal
place of business at 675 West Kendall Street, Cambridge MA 02142, Baxter
International Inc., a Delaware corporation, with a principal place of business
at One Baxter Parkway, Deerfield IL 60015-4625 (“BII”), Baxter Healthcare
Corporation, a Delaware corporation, with a principal place of business at One
Baxter Parkway, Deerfield IL 60015-4633 (“BHC”) and Baxter Healthcare SA, a
Swiss corporation with a principal place of business at Thurgauerstrasse 130
Glattpark (Opfikon) 8152 Switzerland (“BHSA” and, together with BII and BHC,
“Baxter”). Momenta and Baxter may each be referred to individually as a “Party”
or, collectively, the “Parties”.

 

INTRODUCTION

 

The Parties desire to collaborate with respect to the development and
commercialization of a set number of follow-on versions of reference brand
biologic products (a “Follow-On Biologic”, as further defined below) (the
“Collaboration”, as further defined below). The Parties, as herein outlined,
agree to collaborate, initially, with respect to two (2) Follow-On Biologics,
referred to herein as the “Initial Products”.  Additional Products (defined
below), may be subsequently added to the Collaboration pursuant to the Product
Option (defined below).

 

In consideration of the premises set forth above and the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Momenta and Baxter agree as
follows:

 

ARTICLE 1.
DEFINITIONS

 

Captions; Certain Conventions; Construction.  All captions herein are for
convenience only and shall not be interpreted as having any substantive
meaning.  The Exhibits to this Agreement are incorporated herein by reference
and shall be deemed a part of this Agreement.  Unless otherwise expressly
provided herein or the context of this Agreement otherwise requires, (a) words
of any gender include each other gender, (b) words such as “herein”, “hereof”,
and “hereunder” refer to this Agreement as a whole and not merely to the
particular provision in which such words appear, (c) words using the singular
shall include the plural, and vice versa, (d) the words “include,” “includes”
and “including” shall be deemed to be followed by the phrase “but not limited
to”, “without limitation”, “inter alia” or words of similar import, and
(e) references to “Article,” “Section,” “subsection”, “clause”, or other
subdivision, or Exhibit, without reference to a document are to the specified
provision or Exhibit of this Agreement.  In the event of any conflict between
the operative terms of this Agreement and any Exhibit, the operative terms of
this Agreement shall prevail.  This Agreement shall be construed as if the
Parties drafted it jointly.

 

1.1          “Accounting Standards” shall mean GAAP or IFRS, as applicable,
consistently applied.

 

1.2          “Additional Product(s)” shall have the meaning set forth at
Section 2.2.

 

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1.3          “Additional Product Notice” shall have the meaning set forth at
Section 2.2(d).

 

1.4          “Affiliate” shall mean any corporation, company, partnership, joint
venture and/or firm which controls, is controlled by, or is under common control
with a Party.  For purposes of the foregoing sentence, “control” shall mean (a)
in the case of corporate entities, direct or indirect ownership of at least
fifty percent (50%) of the stock or shares having the right to vote for the
election of directors and (b) in the case of non-corporate entities, direct or
indirect ownership of at least fifty percent (50%) of the equity interest with
the power to direct the management and policies of such non-corporate entities.

 

1.5          “Allocable Legal Expense Share” shall mean with respect to each
Product:

 

(a)           in the event Momenta has not elected to receive a Cost/Profit
Share under Section 4.7: (i) Momenta [**] percent ([**]%) and (ii) Baxter [**]
percent ([**]%), and

 

(b)           in the event Momenta has elected to receive a Cost/Profit Share
under Section 4.7: the Party’s respective Profit Share Percentages with
Momenta’s Profit Share Percentage being as set forth in Section 4.7(b) and
Baxter’s being [**].

 

1.6          “Baxter Improvement(s)” shall mean (a) any new Patent Rights or
Know-How discovered, derived, acquired or developed in the course of the
Collaboration dominated by a pre-existing Patent Right of Baxter, whether or not
patentable, and whether discovered, derived, acquired or developed solely by
Baxter, jointly by the Parties or solely by Momenta and (b) and any Patent
Rights or Know-How discovered, derived, acquired or developed in the course of
the Collaboration solely by Baxter and/or its Affiliates and/or their respective
employees, contractors and/or consultants not dominated by Momenta Patent
Rights.

 

1.7          “Baxter Intellectual Property” shall mean all Baxter Know-How,
Baxter Patent Rights, and Baxter Improvements.

 

1.8          “Baxter Know-How” shall mean all Know-How that is within the
Control of Baxter other than that licensed to Baxter by Momenta pursuant to
Article 6 of this Agreement.

 

1.9          “Baxter Patent Rights” shall mean all Patent Rights that are within
the Control of Baxter other than Patent Rights licensed to Baxter by Momenta
pursuant to Article 6 of this Agreement.

 

1.10        “BPCI Act” shall mean the Biologics Price Competition and Innovation
Act of 2009 within the Patient Protection and Affordable Care Act (the “PPAC
Act”), signed into law in March 2010 as may be subsequently amended after the
Execution Date.  The PPAC Act amended the Public Health Service Act.

 

1.11        “Characterization” or “Characterization Activities” shall mean any
non-clinical chemical, physical and biological characterization of a product and
the applicable reference product performed for the purpose of determining
similarity and/or interchangeability. Characterization may include assessing a
product’s chemical composition, physicochemical properties, sequence,
subcomposition (e.g., subunit composition, topology, and covalent
modifications), stability, integrity and biological activity.  Characterization
may also include

 

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measuring specific attributes or properties (e.g., specific structures, chemical
modifications, chemical connectivities, etc.), aggregate properties, or specific
properties, distribution and relative abundance of variants (i.e., mixtures,
“glycoforms”, or other variants related to a subset of properties or a
description of a product in more comprehensive terms).  Characterization may
include analysis of components other than the active pharmaceutical
ingredient/product (e.g. impurities, host cell proteins, etc.). Characterization
can be qualitative and/or quantitative.  With regard to describing properties
and parameters related to the process of making a product, Characterization may
include a description of cellular, genetic, metabolic and molecular properties
related to a cell line or derivative clones, as well as measurements related to
cell growth, transcriptional profile, post-translational modifications,
viability, product titer, cellular productivity, media composition, physical
parameters (e.g. agitation, gas, pH) and metabolic products.  The
Characterization Activities to be performed as part of the Collaboration shall
be as described in the applicable Product Work Plan.

 

1.12        “Clinical Development” shall mean all clinical Development
activities necessary to bring a Product to market.  The Clinical Development
activities to be performed as part of the Collaboration shall be as described in
the applicable Product Work Plan.

 

1.13        “CMC” shall mean chemistry, manufacturing and control.

 

1.14        “CMC Activities” shall mean the development activities required to
establish the physicochemical properties of the drug substance and the drug
product (the “Product” as further defined below) including (a) determining its
chemical composition (makeup), stability, solubility; (b) development and
qualification/validation of analytical procedures used to characterize the final
product as well as intermediates (based on specifications); (c) clinical
manufacturing and development of control program; (d)  manufacturing,
optimization such that the Product can be made at large scale; (e) process
validation; and (f) the formulation analysis. The CMC Activities to be performed
as part of the Collaboration shall be as described in the applicable Product
Work Plan.

 

1.15        “Collaboration” shall mean the Development and Commercialization of,
and the conduct of the relevant Legal Activities with respect to, the Products
in the relevant countries in the Territory, under this Agreement as described
herein and the applicable Product Work Plans.

 

1.16        “Collaboration Intellectual Property” shall mean all Collaboration
Know-How and Collaboration Patent Rights. Collaboration Intellectual Property
shall exclude Momenta Intellectual Property and Baxter Intellectual Property.

 

1.17        “Collaboration Know-How” shall mean Know-How first discovered,
derived or developed in the course of the Collaboration jointly by the Parties
and/or their Affiliates and/or their respective employees, contractors or
consultants.  Collaboration Know-How shall exclude Momenta Know-How and Baxter
Know-How.

 

1.18        “Collaboration Patent Rights” shall mean Patent Rights first
discovered, derived, or developed in the course of the Collaboration jointly by
the Parties and/or their Affiliates and/or their respective employees,
contractors or consultants.  Collaboration Patent Rights shall exclude Momenta
Patent Rights and Baxter Patent Rights.

 

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1.19        “Commercialize” “Commercialization” and “Commercialization
Activities” shall mean all activities related to the launch and
commercialization of a Product in the respective countries of the Territory.
Such Commercialization Activities may include the development and implementation
of: (a) a compliant Product publication strategy; (b) a Product education
development strategy; (c) a Product registration strategy, including selection,
sequencing and filing of individual country or regional Product license
applications; (d) commercial manufacture of a Product, including: (i) the
development of a commercial inventory and Product supply chain distribution
strategy, (ii) the manufacture of commercial inventory, (iii) the manufacture of
a delivery device for the Product and (iv) the manufacture of the packaging for
the Product; (e) a market access strategy including Product pricing; (f) a
Product branding strategy; (g) a Product sales and marketing strategy; (h) a
Product safety monitoring program (including all safety reporting and
pharmacovigilance activities associated with the Products); (i) a Product
post-marketing clinical and label extension strategy; (j) a Product lifecycle
management strategy; (k) design, development and implementation of patient
support programs and mechanisms; and (l) selling.  For avoidance of doubt, (a)
through (l) above sets forth examples of activities that may constitute
“Commercialization Activities” rather than a list of activities required to be
performed by a Party.  The Commercialization Activities to be performed as part
of the Collaboration for any specific Product shall be as described in the
applicable Product Work Plan.

 

1.20        “Commercialization Costs” shall mean, with respect to a Product, the
out-of-pocket costs paid by a Party to a Third Party related to
Commercialization and FTE Costs actually incurred, after the Effective Date, in
connection with Commercialization of such Product by or on behalf of a Party, in
accordance with the applicable Product Work Plan as determined from the books
and records of the applicable Party and/or its Affiliates maintained in
accordance with the Accounting Standards.

 

1.21        “Commercialization Plan” shall be a section of the Work Plan and
shall be as further described at Section 2.4(b)(iii) herein.

 

1.22        “Commercial Scale” shall mean the scale of a chemical or biological
process for the manufacture of a Product in sufficient quantities to support the
projected supply requirements for the marketed Product as of the First
Commercial Sale of such Product.  Commercial Scale, as it relates to a Product,
shall, as appropriate, be further defined in the applicable Product Work Plan.

 

1.23        “Commercially Reasonable Efforts” shall mean the efforts and
resources customarily used by the relevant party to Develop and/or Commercialize
a product (as applicable), carrying out such activities in a sustained manner
consistent with the efforts that company would use for products with similar
market and profit potential and similar scientific, technical, developmental and
regulatory risks based on conditions then prevailing. It is anticipated that the
level of effort may change over time, reflecting changes in the status of the
product and the relevant marketplace.

 

1.24        “Competing Product” shall mean [**] the relevant country in the
Territory using, with respect to the United States of America (“U.S.”), the [**]
and with respect to countries in the Territory outside of the U.S., [**].  For
purposes of Section 2.3 (Baxter Right of First

 

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Negotiation) only, “Competing Product” shall mean [**].  For purposes of Section
6.6 (Exclusive Collaboration), Competing Product shall also include the [**].

 

1.25        “Competing Product Notice” shall have the meaning set forth at
Section 2.3(b).

 

1.26        “Confidential Information” shall mean (a) all proprietary
information and materials, patentable or otherwise, of a Party which is
disclosed by or on behalf of such Party to the other Party pursuant to and in
contemplation of this Agreement, including, without limitation, biological or
chemical substances, formulations, techniques, methodology, equipment, data,
reports, know-how, sources of supply, patent positioning and business plans,
including any negative developments, and (b) any other information designated by
the disclosing Party to the other Party in writing as confidential or
proprietary, whether or not related to making, using or selling a Product. 
Notwithstanding the foregoing, the term ‘Confidential Information’ shall not
include information:  (w) which is or becomes generally available to the public
other than as a result of disclosure thereof by the receiving Party; (x) which
is lawfully received by the receiving Party on a non-confidential basis from a
Third Party that is not, to the receiving Party’s knowledge, itself under any
obligation of confidentiality or nondisclosure to the disclosing Party or any
other Person with respect to such information; (y) which is already known to the
receiving Party at the time of disclosure by the disclosing Party; or (z) which
can be shown by the receiving Party to have been independently developed by the
receiving Party without reference to the disclosing Party’s Confidential
Information.

 

1.27        “Control” shall mean, with respect to any Patent Rights or any item
of Know-How, the possession, whether by ownership or license (other than
pursuant to this Agreement), by a Party and any of its Affiliates of the ability
to grant access and/or a license as provided herein under such item or right
without violating the terms of any agreement or arrangement with any Third Party
existing before or after the Effective Date.

 

1.28        “Cost of Goods Sold” shall mean, with respect to a Product, the
aggregate of each Party’s cost to commercially manufacture, perform quality
activities, test, package and label such Product (including the buildup of
commercial inventory), calculated as follows:

 

(a)           For such Product, the cost for manufacturing, performance of
quality activities, testing, releasing, packaging, and labeling performed by a
Third Party shall equal the costs as invoiced by such Third Party for the
manufacture, performance of quality activities, testing, releasing, packaging
and labeling of the specified quantity of such Product; and

 

(b)           For such Product, the cost for manufacturing, performance of
quality activities, testing, releasing, packaging, and labeling performed by
Baxter or its Affiliates shall equal the costs that are incurred by Baxter or
its Affiliates in connection with the manufacture, performance of quality
activities, testing, releasing, packaging, labeling and delivery to a
warehouse(s) designated by Baxter of the specified quantity of such Product, and
determined from the books and records of Baxter or its Affiliates maintained in
accordance with Baxter’s policies, practices and Accounting Standards.  For the
avoidance of doubt, Cost of Goods Sold shall include the amount of any royalty
payments made to Momenta.  Baxter retains the right to modify its policies and
practices

 

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to comply with specific changes in the Accounting Standards and as otherwise
deemed necessary or appropriate by Baxter.  In the event any such modification
[**] of Cost of Goods Sold [**], then the Parties [**].

 

(c)           For such Product, the cost for the manufacturing, performance of
quality activities, testing, releasing, packaging and labeling performed by
Momenta or its Affiliates pursuant to this Agreement shall equal the costs that
are incurred by Momenta or its Affiliates in connection with the manufacture,
performance of quality activities testing, releasing, packaging, labeling and
delivery to a warehouse(s) designated by Momenta of the specified quantity of
such Product, and determined from the books and records of Momenta or its
Affiliates maintained in accordance with the Accounting Standards and applicable
policies and practices as such may be modified from time to time.  In the event
any such modification [**] of Cost of Goods Sold [**].

 

(d)           General Guidelines.

 

(i) Cost of Goods Sold must be calculated with reasonable approximation to
actual costs (use of standard cost plus variances (purchase price, production,
etc.) to achieve actual costs), including provisions for and subsequent charges
to obsolescence.  Cost of Goods Sold shall include, but not be limited to labor,
overhead, materials, discards, plant depreciation, plant utilization,
quality-related testing, releasing, stability samples, packaging & labeling and
other cost of goods (e.g. discard provisions for expired material write-offs).

 

(ii) The expected costs to manufacture, perform quality activities, test,
release, package, label and deliver to a warehouse(s) shall include the
manufacturing plant labor, an allocation of plant overhead expenses (examples
may include insurance, facility, support staff personnel, etc.), materials and
supplies, maintenance, discards, depreciation and amortization, royalties,
quality, and other costs attributable to a Product as applicable.

 

(iii) If Third Party Payments for licensed Third Party Patent Rights or Know-How
related to the commercial manufacture, performance of quality activities,
testing, releasing, packaging and/or labeling are payable with respect to a
Product after First Commercial Sale of such Product in the relevant country in
the Territory, such amounts, to the extent such Third Party Payments are not
otherwise expressly allocated among the Parties for payment under Section 4.4,
below, [**] such Third Party Payments [**]. With respect to Products which are
subject to a Cost/Profit Share under Section 4.7, reimbursement of such Third
Party Payments [**] in accordance with the Profit Share Percentage.

 

(iv) The Parties shall discuss in good faith at the JSC [**] with respect to any
[**] or other [**], whether such facility is owned by [**] or a Third Party,
that will be utilized in the manufacture of a Product.  If [**] it will [**] or
[**] a facility with [**] relative to the good faith projected [**], any
decision [**] for such facility [**] in the computation of Cost of Goods Sold
[**].

 

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1.29        “Cost Share” shall mean the sum of (a) the Commercialization Costs
and (b) the Development Expenses to the extent that such Commercialization Costs
and the Development Expenses are incurred following Momenta’s Cost/Profit Share
Election, all multiplied by the Profit Share Percentage elected by Momenta.

 

1.30        “Develop”, “Development” and “Development Activities” shall mean
with respect to a product, all activities related to or in furtherance of the
creation or scientific improvement of such product, or are related to or in
furtherance of the Regulatory Approval of such product, whether such activities
are conducted prior to the filing of a regulatory application for such product
in any country in the Territory or thereafter. Development Activities may
include: (a) Characterization of such product; (b) creation and selection of a
cell line; (c) preclinical and, if applicable, clinical (in human) studies,
bioequivalence studies, development of analytical assays, stability studies and
quality analysis/quality control development, data management, review and
engagement of CROs, document preparation, and other administrative activities
associated with a clinical testing program; (d) development and implementation
of a regulatory and legal strategy to address whether to file a biologics
application under Section 351(a) or an abbreviated application under Section 351
(k) of the BPCI Act, and depending on the pathway selected, whether and how the
Parties plan to utilize the patent resolution process under the 351(k) pathway;
(e) development and implementation of the Product manufacturing process and
strategy, including selection of manufacturing facilities at each scale
(including Commercial Scale); (f) development and implementation of a process
validation strategy; (g) formulation (for drug substance and drug product, as
well as associated stability studies); (h) development and design of a delivery
device for the Product; (i) development and design of the Product packaging; (j)
statistical analysis; (k) pre-launch regulatory affairs; and (l) research and
development expenses associated with Product development after Regulatory
Approval (such as post-marketing studies).  For the avoidance of doubt, the
terms ‘Develop’, ‘Development’ and ‘Development Activities’ shall not include
Commercialization Activities.  For avoidance of doubt, (a) through (l) above
sets forth examples of activities that would constitute “Development Activities”
rather than a list of activities required to be performed by a Party.  The
Development Activities to be performed as part of the Collaboration for any
specific Product shall be as described in the applicable Product Work Plan.

 

1.31        “Development Expenses” shall mean, with respect to a Product, the
costs actually incurred by or on behalf of a Party, including all FTE Costs and
out-of-pocket costs paid by a Party to Third Parties (collectively) after the
Effective Date in connection with the Development of such Product, in accordance
with the relevant Product Work Plan as determined from the books and records of
the applicable Party and/or its Affiliates maintained in accordance with the
Accounting Standards and each Party’s policies and practices as such may be
modified from time to time.

 

1.32        “Effective Date” shall mean the HSR Clearance Date, as defined in
Section 12.12.

 

1.33        “Election Notice” shall have the meaning set forth at Section
2.2(a).

 

1.34        “Enforcement Litigation” shall have the meaning set forth at Section
5.4(c).

 

1.35        “Exercise Notice” shall have the meaning set forth at Section
2.2(d).

 

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1.36        “FDA” or “Food and Drug Administration” shall mean the U.S.  Food
and Drug Administration or any successor entity thereto.

 

1.37        “Field” shall mean human use for all therapeutic indications.

 

1.38        “First Commercial Sale” shall mean, with respect to a Product, the
first sale by Baxter, its sublicensee or any of their respective Affiliates to a
Third Party following receipt of Regulatory Approval in the country of sale.

 

1.39        “Follow-On Biologic” or “FOB” shall mean a biologic product that is
developed by the Parties, with the amino acid sequence identical to the
reference brand biologic, that through Characterization and Development is (a)
intended to have highly similar or indistinguishable physical, chemical,
biological and clinical attributes relative to the reference brand biologic and
(b) is eligible for review and approval by the FDA under Section 351(k) of the
BPCI Act or equivalent EU guidelines, regardless of whether approval is sought
under Section 351(k) or 351(a) or the equivalent EU guidelines for commercial
purposes.

 

1.40        “FTE” shall mean a full time equivalent person year (consisting of a
total of one thousand eight hundred (1,800) hours per year) of work on or
directly related to the Collaboration.

 

1.41        “FTE Costs” shall be as determined by the JSC at the initial JSC
meeting, as such is contemplated in Section 3.3, such FTE Costs to be derived in
accordance with the Accounting Standards. Beginning [**] and each January 1
thereafter during the Term, the FTE Costs as initially determined by the JSC
shall be increased by the lesser of: (a) [**] percent ([**]%) and (b) the
percentage change in the [**] over the prior year.

 

1.42        “GAAP” shall mean U.S.  Generally Accepted Accounting Principles.

 

1.43        “General & Administrative Costs” or “G & A Costs” shall mean
non-sales personnel costs (excluding manufacturing personnel costs) and other
overhead costs that are proportionally allocated to the Product. G &A Costs
shall be a rate, calculated as a percentage of Net Sales, as determined by the
JSC on a product-by-product basis based upon the projected Product budget.  Such
rate shall be determined no later than [**] months following [**] of such
Product if Momenta has exercised its option for a Cost/Profit Share.  The JSC
shall, on an annual basis, adjust the rate to reflect actual budgets for the
following year.  G & A Costs shall be included in Marketing and Selling Costs.

 

1.44        “GMP” or “Good Manufacturing Practice” shall mean the current good
manufacturing practice regulations of the FDA as described in the U.S.  Code of
Federal Regulations or any applicable corresponding foreign regulations or their
respective successor regulations.

 

1.45        “IFRS” shall mean International Financial Reporting Standards.

 

1.46        “IND Acceptance” shall mean, with respect to a Product, the earlier
to occur of the date that (a) the Investigational New Drug (“IND”) exemption or
its equivalent becomes effective in the U.S. or the EU; (b) written notice of a
waiver of the need to file an IND, or

 

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waiver of its equivalent in the U.S. or the EU becomes effective;  or (c)
authorization is obtained from the applicable Regulatory Authority in the U.S.
or the EU to initiate dosing in humans, based on such Regulatory Authority’s
review of analytical data comparing such Product to the reference brand
product.  For avoidance of doubt, the written notice referred to in subsection
(b) above may be in the form of a letter from the relevant Regulatory Authority
approving the development plan of the Parties that does not require human
clinical trials or an actual written waiver of an IND.

 

1.47        “Initial Press Release” shall have the meaning set forth at Section
7.2 herein.

 

1.48        “Initial Products” shall have the meaning set forth in the
Introduction section above, as such are more fully described at Section 2.1.

 

1.49        “Joint Steering Committee” or “JSC” shall have the meaning set forth
in Section 3.1.

 

1.50        “Know-How” shall mean information and materials, including, without
limitation, ideas, concepts, discoveries, inventions, developments,
improvements, know-how, expertise, trade secrets, designs, devices, equipment,
process conditions, production processes and designs, specifications, computer
programs, formulas, techniques, methods, procedures, assay systems and
applications, experimental results, data (including, without limitation,
analytical, toxicological, pharmacological, clinical, bioequivalence, and
stability data), documentation, and reports, whether patentable or otherwise.

 

1.51        “Launch” shall mean, with respect to any Competing Product, the
first commercial sale of such Competing Product unless, within sixty (60) days
of such first commercial sale, the product is no longer being offered for sale
(whether as a result of legal action or otherwise).

 

1.52        “Laws” shall mean all applicable laws, statutes, rules, regulations,
orders, judgments, injunctions, ordinances or other pronouncements having the
binding effect of law of any Regulatory Authority or other governmental
authority, and any rules of any national securities exchanges or securities
listing organizations, in the applicable country in the Territory.

 

1.53        “Legal Activities” shall mean legal work and advice relating to the
Collaboration including, but not limited to: (a) Patent Activities; (b)
regulatory filings and regulatory strategy; (c) citizen’s petitions proceedings
(including filings, appeals and related litigation); (d) patent exchange and
litigation under the BPCI Act (or other similar laws, rules or regulations, as
applicable to one or more Products); (e) litigation strategy; and (f)
governmental inquiries and investigations.

 

1.54        “Legal Expenses” shall mean out-of-pocket expenses associated with
Legal Activities. For the avoidance of doubt, the term ‘Legal Expenses’ shall
not include [**] or [**] costs or expenses with respect to Legal Activities
conducted in support of the Collaboration, and each Party shall be solely
responsible for and pay its [**] costs and expenses. For avoidance of doubt,
Legal Expenses includes the costs of [**] or [**] in connection with Enforcement
Litigation, and any resulting damages payable to Third Parties in connection
with Enforcement Litigation.

 

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1.55                        “Legal Expense Cap” shall mean, for any Product,
[**] Dollars (USD$[**]).

 

1.56                        “Major Countries” shall mean the U.S. , [**], the
United Kingdom, France, Germany, Spain, Italy, [**].

 

1.57                        “Marketing and Selling Costs” shall mean a rate
(calculated as a percentage of Net Sales) as determined by the JSC on a
Product-by-Product and country-by-country basis based upon the projected Product
budget as approved by the JSC.  The rate shall be determined no later than [**]
following IND Acceptance if Momenta has exercised its option for a Cost/Profit
Share.  The JSC shall, if applicable, create two lists reflecting different
‘Marketing and Selling Costs’ rates based upon the Regulatory Approval status of
the Product (with pharmacy substitutability or without pharmacy
substitutability) and the Marketing and Selling Costs rate utilized in the
calculation of the Profit Share shall be the rate reflecting the actual status
of pharmacy substitutability for the Product in the applicable country in the
Territory.  The JSC shall, on [**] basis, adjust these rates to reflect [**] for
the following year.  Marketing and Selling Costs shall include G&A Costs.

 

1.58                        “Mechanism of Action” shall mean that the relevant
Third Party FOB binds to the same antigen as the Product.

 

1.59                        “Minimum Development Criteria” shall mean, with
respect to any product, that Momenta has, in connection with its Development
efforts, (a) delivered [**], (b) achieved [**] of the product [**], and (c) has
delivered [**] consistent with that conducted [**] as of the Execution Date.

 

1.60                        “Momenta Improvement(s)” shall mean (a) any new
Patent Rights or Know-How discovered, derived, acquired or developed in the
course of the Collaboration dominated by a pre-existing Patent Right of Momenta,
whether or not patentable, and whether discovered, derived, acquired or
developed solely by Momenta, jointly by the Parties or solely by Baxter and
(b) and any Patent Rights or Know-How discovered, derived, acquired or developed
in the course of the Collaboration solely by Momenta and/or its Affiliates
and/or their respective employees, contractors and/or consultants not dominated
by Baxter Patent Rights.

 

1.61                        “Momenta Intellectual Property” shall mean all
Momenta Know-How, Momenta Patent Rights and Momenta Improvements.

 

1.62                        “Momenta Know-How” shall mean all Know-How that is
within the Control of Momenta other than that licensed to Momenta by Baxter
pursuant to Article 6 of this Agreement.

 

1.63                        “Momenta Patent Rights” shall mean all Patent Rights
that are within the Control of Momenta other than Patent Rights licensed to
Momenta by Baxter pursuant to Article 6 of this Agreement.

 

1.64                        “Naming” or as a verb “Name” or “Named” shall mean,
with respect to any Additional Product, that such Additional Product has been
selected by Baxter and has been identified to Momenta in writing as an
Additional Product.

 

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1.65                        “Net Sales” shall mean, with respect to a Product,
the gross revenues invoiced by Baxter or its Affiliates or sublicensees to Third
Parties (whether an end-user, a distributor or otherwise) for sales of such
Product within the Territory, less the following deductions, all as determined
from the books and records of Baxter, its Affiliates or sublicensees (or, in the
event Momenta Commercializes a Product as allowed for at Section 2.7(b) or
Section 10.6 herein, references to Baxter herein shall be replaced by “Momenta”)
maintained in accordance with the Accounting Standards:

 

(a)                                 customary trade and quantity discounts
actually allowed and taken;

 

(b)                                 amounts actually allowed or credited due to
returns of Products previously sold as reflected in written invoices (and not to
exceed the original invoice amount);

 

(c)                                  shipping, freight and insurance, to the
extent separately invoiced and charged;

 

(d)                                 credits, allowances and rebates actually
given pursuant to federal, state and/or government-mandated programs, which
require a manufacturer/distributor rebate (including Medicare and Medicaid); and

 

(e)                                  value added or import/export taxes, sales
taxes, excise taxes or customs duties, to the extent applicable to such sale,
and included in the invoice in respect of such sale and actually paid.

 

In the case of any sale of a Product [**].

 

In the case of any sale of a Product between or among Baxter or its Affiliates
or sublicensees for resale, Net Sales shall be calculated as above only on the
value charged or invoiced on the first arm’s length sale thereafter to a Third
Party other than a sublicensee.  Product provided to any Third Party in
connection with any clinical trials shall not be considered for purposes of
calculating Net Sales.

 

If any Product is sold in combination with one or more other products (e.g. a
delivery device) or active ingredients which are not the subject of this
Agreement (as used in this definition of Net Sales, a “Combination”), then the
gross amount invoiced for that Product shall be calculated by multiplying the
gross amount invoiced for such Combination by the fraction A/(A+B), where “A” is
the gross amount invoiced for the Product sold separately and “B” is the gross
amount invoiced for the other active ingredient(s) sold separately.  In the
event that the other active ingredient is not sold separately, then the gross
amount invoiced for that Product shall be calculated by multiplying the gross
amount invoiced for the Combination by the fraction A/C, where “A” is the gross
invoice amount for the Product, if sold separately, and “C” is the gross invoice
amount for the Combination.  In the event that no such separate sales are made,
Net Sales for royalty determination shall be determined by the Parties in good
faith.  Where (A) the consideration for Products includes any [**]; or
(B) Products are transferred by the selling Party, its Affiliate, or a
respective sublicensee, in any manner other than an arms-length, invoiced sale,
the Net Sales [**] shall be the [**] for the period in question in the
applicable country of the Territory.  The [**] shall be determined, wherever
possible, by reference to the [**] in the Territory.

 

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1.66                        “Option Payment” shall have the meaning set forth at
Section 2.2(d).

 

1.67                        “Option Period” shall have the meaning set forth at
Section 2.2(d).

 

1.68                        “Patent Activities” shall mean all activities of the
Parties with respect to freedom to operate, and the preparation, filing,
prosecution, maintenance, enforcement and defense of the Momenta Patent Rights
licensed under Section 6.1, the Baxter Patent Rights licensed under Section 6.2
and Collaboration Patent Rights including activities before the U.S. Patent and
Trademark Office, and international patent offices as well as litigation in
courts in the U.S. and other countries in the Territory.

 

1.69                        “Patent Rights” shall mean all patents (including
all reissues, extensions, substitutions, confirmations, re-registrations,
re-examinations, invalidations, supplementary protection certificates and
patents of addition) and patent applications (including all provisional
applications, continuations, continuations-in-part and divisionals) and, all
foreign counterparts of the foregoing, or as applicable portions thereof or
individual claims therein.

 

1.70                        “Person” shall mean any individual, partnership,
joint venture, limited liability company, corporation, firm, trust, association,
unincorporated organization, Regulatory Authority or any other entity not
specifically listed herein.

 

1.71                        “Phase II Clinical Trial” shall mean a controlled
clinical trial of a pharmaceutical/biologic product in human patients to
evaluate its safety and efficacy in the proposed therapeutic indication, which
may be a single dose or regimen and/or multiple doses and/or regimens, which may
be conducted at multiple centers and while not a customary Phase II study, may
be suitable to obtain Regulatory Approval.  A Phase II Clinical Trial generally
has hundreds of subjects (or less) and is defined in the U.S. as meeting the
requirements set forth in 21 C.F.R 312.21.  A Phase II Clinical Trial is not a
Phase III Clinical Trial simply because it enables Regulatory Approval.

 

1.72                        “Phase III Clinical Trial” shall mean a large scale,
fully-powered, pivotal, multi-center, human clinical trial (but specifically
excluding any Phase II Clinical Trials and any dose ranging and/or proof of
concept studies) to be conducted in a number of patients estimated to be
sufficient (hundreds or thousands of subjects per indication) to primarily
establish the efficacy and safety of a pharmaceutical/biologic product in the
indication being investigated and at a standard suitable to obtain Regulatory
Approval.

 

1.73                        “Process Engineering” or “Process Engineering
Activities” shall mean the design of a biological process (which may include
both upstream cell fermentation process and downstream purification, fill
finish) and/or chemical process to manufacture a biological product with
pre-specified attributes. These attributes may include product yield,
biophysical and physico-chemical properties, specific chemical
structures/modifications related to product glycosylation, protein sequence,
amino acid modifications, tertiary structure, subunit stoichiometry, etc.,
aggregate properties, distribution of variants (e.g., “glycoforms”), biological
activity, pharmacological properties, product stability, integrity, and
immunogenicity.  These attributes may be defined both in qualitative (present or
absent) or quantitative terms, the latter being described for example by an
absolute amount, a relative abundance, or within a specified

 

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range. Process Engineering also means the engineering of a cell line (i.e., cell
line development) and/or choice of clone derived from this cell line (i.e.,
“clonal selection”) with the intent to produce a product with pre-specified
attributes.  The Process Engineering Activities to be performed under this
Agreement shall be as described in the applicable Product Work Plan.

 

1.74                        “Product(s)” shall mean the Initial Products and the
Additional Products; the latter effective as of Baxter’s exercise of the
Additional Product Option.  Each individually a “Product” and, collectively, the
“Products”.

 

1.75                        “Product Option” shall have the meaning set forth at
Section 2.2(d).

 

1.76                        “Profit(s)” shall mean, with respect to a quarter
during which Baxter, its Affiliates and/or distributors is selling a Product in
a country(ies) in the Territory, Net Sales for such Product less (a) Marketing
and Selling Costs and (b) Cost of Goods Sold for the units of such Product sold
(regardless of whether such Product is rejected, returned or recalled).

 

1.77                        “Profit Share” shall mean Profits multiplied by the
elected Profit Share Percentage.

 

1.78                        “Profit Share Election Notice” shall have the
meaning set forth at Section 4.7(a).

 

1.79                        “Profit Share Election Period” shall have the
meaning set forth at Section 4.7.

 

1.80                        “Profit Share Percentage” shall have the meaning set
forth at Section 4.7(b).

 

1.81                        “Quality Management Systems” or “QMS” shall mean
formalized business practices that define management responsibilities for
organizational structure, processes, procedures, and resources needed to fulfill
product/service requirements, customer satisfaction, and continual improvement.

 

1.82                        “Regulatory Approval” shall mean, with respect to a
country, all approvals, licenses, registrations, and regulatory authorizations
required to make, store, import, transport, market and sell a Product in such
country as granted by the relevant Regulatory Authority.  For countries in the
Territory where Regulatory Authority approval is required for pricing or
reimbursement for Product, Regulatory Approval shall not be deemed to occur
until such pricing or reimbursement approval is obtained.

 

1.83                        “Regulatory Authority” shall mean the FDA or any
other counterpart or applicable government authority, court, tribunal,
arbitrator, agency, legislative body, commission or other instrumentality of
(a) any government of any country or territory, (b) any state, province, county,
city or other political subdivision thereof or (c) any supranational body
responsible for granting applicable Regulatory Approvals.

 

1.84                        “Royalty Offset” shall have the meaning set forth at
Section 4.7(d) herein.

 

1.85                        “Selected Third Party Product” shall have the
meaning set forth at Section 2.2(f)(ii).

 

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1.86                        “Selected Third Party Product Election Notice” shall
have the meaning set forth at Section 2.2(f)(ii).

 

1.87                        “Sole Interchangeable Product” shall mean that the
Product is the only commercially available FOB product in a given country in the
Territory that has received a designation, or its equivalent, from the
applicable Regulatory Authority, that pharmacists can substitute the Product for
the reference product without obtaining a prescriber’s consent (e.g., with
respect to the U.S., an interchangeable biological product under
Section 351(k) of the BPCI Act).

 

1.88                        “Sublicense Revenue” shall mean all consideration
received by Baxter or its Affiliates with respect to rights granted to a Third
Party(ies) to Develop or Commercialize a Product(s) for sale in the relevant
country in the Territory, but excluding:  (a) consideration received by Baxter
or its Affiliates as payments for actual direct costs for performing Development
or Commercialization Activities undertaken by Baxter or its Affiliates for, or
in collaboration with, such Third Party(ies) or their Affiliates;
(b) consideration received by Baxter and/or its Affiliates from such Third
Party(ies) or their Affiliates as the purchase price for Baxter’s or any of its
Affiliates’ debt or equity securities, except that consideration that exceeds
the fair market value of such debt or equity securities shall not be so
excluded; and (c) consideration paid by such Third Party(ies) to Baxter or its
Affiliates to purchase such Product(s) (provided, however, that any
consideration greater than the applicable Cost of Goods Sold shall not be so
excluded).

 

1.89                        “Technical De-Risking Criteria” shall be as set
forth in Exhibit 1.89 and Section 2.4(e)(iv).

 

1.90                        “Technology Transfer” shall mean all activities
undertaken to transfer the manufacture of a Product (regardless of the
manufacturing scale) from one party (whether a Third Party or a Party) to
another party (again, whether a Third Party or a Party).  Section 2.8 and
Exhibit 1.90 set forth the rights and responsibilities of the Parties with
respect to Technology Transfer.

 

1.91                        “Territory” shall mean with respect to the Products,
all countries of the world.  Notwithstanding anything contained in this
Agreement to the contrary, any references to ‘Territory’ with respect to
Baxter’s Commercialization obligations is not intended to, nor shall it be
construed to imply, that Baxter is obligated to Commercialize any Product in all
countries or geographies throughout the world.

 

1.92                        “Third Party” shall mean any Person other than
Momenta or Baxter or any Affiliate of either Party.

 

1.93                        “Third Party Additional Product” shall have the
meaning set forth at Section 2.2(f)(i).

 

1.94                        “Third Party Additional Product Notice” shall have
the meaning set forth at Section 2.2(f)(i) herein.

 

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1.95                        “Third Party Payments” shall mean, with respect to a
Product in the relevant country in the Territory, any royalties, license fees,
maintenance fees or other monetary payments made by a Party or its Affiliates to
any Third Party in consideration of a license(s) under the applicable Third
Party Patent Rights or Know-How or other intellectual property rights, when such
license is determined [**].

 

1.96                        “Work Plan” or “Product Work Plan” shall mean, with
respect to a Product, the Product specific plan, developed and approved by the
JSC on an annual basis and modified through the year, outlining the Development
and Commercialization (including the pursuit of Regulatory Approval) of such
Product in the Territory.  The Commercialization Plan shall be a section of the
Work Plan.

 

ARTICLE 2.
DEVELOPMENT AND COMMERCIALIZATION OF THE PRODUCTS

 

2.1                               Initial Products.  The Parties intend and
agree to Develop and Commercialize the Initial Products as outlined in this
Agreement and in accordance with the applicable Work Plan for each Product. 
Such ‘Initial Products’, which are FOBs, are: (a) [**] referred to as [**] for
which [**] is the reference brand product and (b) [**] referred to as [**] is
the reference brand product.

 

2.2                               Additional Products.  Baxter shall have an
option (each a “Product Option”), during the Option Period, to include as
Products in the Collaboration, in addition to the two (2) Initial Products, up
to four (4) additional products (once Named, each an “Additional Product” or
collectively, the “Additional Products”).

 

(a)                                 Selection of the Additional Products.  The
period during which all Additional Products must be Named (the “Naming Period”)
shall commence on the Effective Date of the Agreement and end on the third (3rd)
anniversary of the Effective Date.  Each of the additional products must be
Named by Baxter, in writing, upon the earlier to occur of: (i) [**] of the
Naming Period (i.e. any un-Named potential Additional Products would need to be
Named at the end of the Naming Period or Baxter will lose the rights thereto) or
(ii) [**] days after receiving written notice from Momenta that Momenta has [**]
of a new FOB product to meet the [**] (an “Election Notice”) (i.e. such Election
Notice shall indicate Momenta’s suggestion for a product(s) to be Named as an
Additional Product(s)).  Except as provided for in Section 2.2(b) and
Section 2.2(f) below, once an Additional Product is Named by Baxter [**] to [**]
without [**].  Each of the Additional Products must be [**].

 

(b)                                 Additional Products - Development
Obligations of Momenta.  Momenta shall use Commercially Reasonable Efforts to
Develop, at its sole cost and expense, each of the Additional Products Named by
Baxter until each such Additional Product [**]. Prior to Momenta engaging in any
Development work on an Additional Product, the Parties shall consult and discuss
Momenta’s Development plan for such Additional Product within the JSC.

 

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In the event that Momenta determines it [**] with respect to an Additional
Product Named by Baxter, [**], Momenta shall provide written notice to Baxter of
such determination.  Following Baxter’s receipt of such notice from Momenta,
such Named Additional Product shall no longer be a Named Additional Product and
Baxter shall have the right to Name another product as an Additional Product,
and Momenta shall thereafter have the right, subject to the terms of this
Agreement including, to the extent applicable, the limited licenses granted
herein, to research, develop, manufacture, commercialize or license a Third
Party to research, develop, manufacture or commercialize such former Additional
Product.  In the event that, at the time of Baxter’s receipt of such notice from
Momenta regarding its [**], Baxter has Named all four Additional Products,
Baxter’s right to Name another product as an Additional Product shall be
restricted to the extent Momenta has already entered into an agreement with a
Third Party for the development of any such potential Additional Product.

 

(c)                                  Additional Product Naming Period.

 

(i) Extension of the Naming Period.

 

(1)                                 Baxter shall have the option to extend the
Naming Period for an additional [**] period (to run from the end of the original
termination date of the Naming Period as outlined in Section 2.2(a) above) to
Name any as yet un-Named Additional Products. Such option to extend the Naming
Period shall terminate upon Baxter’s Naming of the final Additional Product;
provided, however, that if [**] of the [**], Momenta determines that it [**] as
contemplated in Section 2.2(b), the terms of the second paragraph of
Section 2.2(b) shall apply and Baxter shall have the ability to Name an
alternative Additional Product.

 

(2)                                 To extend the Naming Period for a particular
product, Baxter must provide Momenta with a written extension notice at least
[**] prior to the end of the [**]. Such extension notice shall indicate the
[**].  For each Naming Period extension so notified, Baxter shall pay to Momenta
Five Million Dollars (USD$5,000,000) within [**] of the [**].

 

(3)                                 If the Naming Period expires and Baxter has
failed to provide the written extension notice as required above or if Baxter
does not pay the relevant extension payment within the timeframe described in
the immediately preceding paragraph, the Naming Period(s), with respect to the
un-Named potential Additional Product(s), will terminate.

 

(4)                                 Notwithstanding the foregoing, the Naming
Period shall be automatically extended (and Baxter shall not be obligated to
make any payment for such extension) for a period of not less than [**] if,
within the [**] prior to [**], Momenta has yet to provide Baxter with an
Election Notice as provided for at Section 2.2(a) with respect to one or more as
yet un-Named Additional Products so as to allow Baxter to make an informed
decision with respect to the Naming of such one or more as yet un-Named

 

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Additional Products.  The Naming Period shall thereafter continue to be extended
for periods of not less than [**] if Momenta again fails to provide such
Election Notice(s).

 

(d)                                 [**] of the [**]; Exercise of the Product
Option.  Upon [**] of the [**] with respect to an Additional Product, Momenta
shall notify Baxter in writing (such notice with respect to each Additional
Product, an “Additional Product Notice”).  Following Baxter’s receipt of the
Additional Product Notice, Baxter shall have the right to include a Named
Additional Product as a Product in the Collaboration (the “Product Option”). 
Baxter may exercise the Product Option with respect to such Additional Product
by providing written notice to Momenta of its desire to include the Additional
Product under the Agreement as a Product (the “Exercise Notice”). The Exercise
Notice must be received by Momenta within [**] following Baxter’s receipt of an
Additional Product Notice with respect to such Additional Product (the “Option
Period”).  Within [**] following delivery of the applicable Additional Product
Exercise Notice, Baxter shall pay to Momenta [**] Dollars (USD$[**]) (the
“Option Payment”).  Except as set forth in Section 2.2(f)(ii), upon Baxter’s
exercise of the Product Option with respect to such Additional Product named in
the Exercise Notice and payment of the Option Payment with respect to such
Additional Product, such Additional Product shall be treated as a Product under
the terms of the Agreement.

 

(e)                                  Failure to Exercise the Product Option.  In
the event Baxter fails to exercise the Product Option by providing the Exercise
Notice within [**] following receipt of the Additional Product Notice as
outlined in Section 2.2(d) above or if Baxter fails to pay the Option Payment
within the timeframe described above, the Product Option, with respect to such
Additional Product, shall expire (subject to Baxter’s right to cure such timely
failure to make the Option Payment), and such product shall not be considered a
Product and shall no longer be considered an Additional Product, and Momenta
shall thereafter have the right, subject to the terms of this Agreement
including, to the extent applicable, the limited licenses granted herein, to
research, develop, manufacture, commercialize or license a Third Party to
research, develop, manufacture or commercialize such former Additional Product. 
For the avoidance of doubt, [**] as provided for in Section 2.2(b) above and
Section 2.2(f) below. If Baxter fails to exercise the Product Option with
respect to a Named Additional Product [**], Baxter shall not have the right to
Name another Additional Product to replace the Additional Product for which it
failed to exercise the Product Option.

 

(f)                                   Third Party Additional Product.

 

(i)                                     Generally.  Commencing [**] following
the Effective Date of the Agreement and continuing until [**] to occur of
(a) the end of the Naming Period or (b) when Baxter has Named all four
(4) Additional Products, if Momenta receives a bona fide offer from a Third
Party for the Third Party to develop or commercialize a FOB [**] (i.e. a
potential Additional Product candidate) developed or to be developed by Momenta
that includes financial terms (“Third Party Additional Product”), Momenta shall
provide written notice to Baxter of such offer (“Third Party Additional Product
Notice”), and shall, to the extent not

 

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otherwise prohibited by the terms of its confidentiality agreement with such
other Third Party, include in such Third Party Additional Product Notice a
redacted copy of the offer itself (but Momenta shall have no obligation to
disclose the identity of such Third Party or the financial terms of such
offer).  Following Baxter’s receipt of the Third Party Additional Product
Notice, Baxter shall have [**] to deliver an Exercise Notice to Momenta,
exercising a Product Option with respect to such Third Party Additional Product,
or in the absence of such notice, Baxter shall forfeit its right to Name that
FOB product as an Additional Product and to include it as a Product in the
Collaboration.  In the event Baxter delivers the Exercise Notice with respect to
the Third Party Additional Product, Baxter shall pay to Momenta the Option
Payment within [**] of delivering the Exercise Notice, and such Third Party
Additional Product shall become a Product under the Agreement.  If Baxter fails
to pay the Option Payment with respect to the Third Party Additional Product
within the timeframe described above, it shall forfeit its right to Name that
FOB product as an Additional Product and to include it as a Product in the
Collaboration.

 

(ii)                                  During the [**], if Baxter delivers to
Momenta an Exercise Notice with respect to a Third Party Additional Product,
thereby including such Third Party Additional Product as Product in the 
Collaboration (the “Selected Third Party Product”), [**] with respect to each
such Selected Third Party Product, to [**] (other than an FOB product for which
Baxter forfeited its rights pursuant to Section 2.2(b), Section 2.2(e),
Section 2.2(f) and Section 2.2(g), as a Product [**] such Selected Third Party
Product.  [**], Momenta shall thereafter have the right, subject to the terms of
this Agreement, to the extent applicable, including, to the extent applicable,
the limited licenses granted herein, to research, develop, manufacture,
commercialize or license a Third Party to research, develop, manufacture or
commercialize such [**] upon the earlier to occur of: (a) [**] following
Momenta’s receipt of the Exercise Notice from Baxter with respect to such
Selected Third Party Product or (b) [**] after Baxter’s receipt of notice from
Momenta that Momenta has [**] (the “Selected Third Party Product Election
Notice”).  Notwithstanding the payment obligations set forth in Section 2.2(d),
during the [**] period following the Effective Date of the Agreement, Baxter
shall not be obligated to [**] with respect to any Third Party Additional
Product for which it has delivered an Exercise Notice until [**] following [**]
that such Product [**].

 

(g)                                  [**].

 

(i)                                     [**] Efforts.  If Baxter (A) [**] a [**]
outside the scope of the Collaboration, whether a FOB product or reference brand
product, or (B) undertakes any efforts with a Third Party to [**] (in either
case, a “[**]”), Baxter shall immediately and automatically forfeit its right to
Name such [**] as an Additional Product under the Agreement and Momenta shall
thereafter have the right, subject to the terms of this Agreement including, to
the extent applicable, the limited licenses granted herein, to directly or
indirectly research, develop, manufacture, or commercialize a FOB product of or
any derivative of such [**],

 

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or to license a Third Party to research, develop, manufacture or commercialize a
FOB product of or any derivative of such [**].

 

(ii)                                  [**].  If Baxter [**] for [**] outside the
scope of the Collaboration, whether a FOB product or reference brand product,
[**] such a product (the “[**]”), Baxter shall have a period of [**] to
determine if it intends to [**]; provided, however that if the [**] is, at the
time of the [**] a marketed product (i.e. has been sold commercially in an
arms-length transaction for therapeutic use) the period shall be [**].  If, upon
the [**] anniversary (or [**] anniversary in the case of a marketed product) of
the transaction in which [**] the relevant [**] Baxter is still in control of
such [**], Baxter shall immediately and automatically forfeit its right to Name
such [**] as an Additional Product under the Agreement and Momenta shall
thereafter have the right, subject to the terms of this Agreement including, to
the extent applicable, the limited licenses granted herein,  to directly or
indirectly research, develop, manufacture, or commercialize a FOB product of or
any derivative of such [**], or to license a Third Party to research, develop,
manufacture or commercialize a FOB product of or any derivative of such [**]. 
In the event the [**] becomes marketed subsequent to Baxter’s [**] of such [**]
and prior to the expiration of such [**]  period, Baxter shall immediately and
automatically forfeit its right to Name such [**] as an Additional Product as
provided for in Section 2.2(g) above.

 

2.3                               Momenta Competing Product; Baxter Right of
First Negotiation.

 

(a)                                 For a period of three (3) years following
IND Acceptance of the first Product, Baxter shall have a right of first
negotiation (the “Right of First Negotiation” or “ROFN”) if: (i) Momenta intends
to develop (either for itself or for a Third Party) a Competing Product (such
ROFN is not available with respect to a FOB product for which Baxter forfeited
its rights pursuant to Sections 2.2(b), 2.2(e), 2.2(f) or 2.2(g), and (ii) all
four Additional Products have been Named or all Product Options have expired.

 

(b)                                 Upon Baxter’s receipt of written
notification from Momenta of its intent to develop such Competing Product(s)
(the “Competing Product Notice”), Baxter shall have [**] to provide written
notice to Momenta of its desire to enter into good faith negotiations to reach
agreement on a partnering transaction with respect to such Competing Product(s)
referenced in the applicable Competing Product Notice.  If Baxter notifies
Momenta of its interest in such Competing Product(s), the Parties shall commence
good faith negotiations toward the execution of a partnering transaction with
respect to such Competing Product(s), but if Baxter and Momenta have not
executed a written agreement reflecting such a transaction with respect to such
Competing Product(s) within [**] of Baxter’s receipt of the Competing Product
Notice, Momenta shall have the right, subject to the terms of this Agreement
including, to the extent applicable, the limited licenses granted herein, to
research, develop, manufacture or commercialize such Competing Products or
license a Third Party to research, develop, manufacture or commercialize such
Competing Product(s).

 

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2.4                               Responsibility for Development and
Commercialization of the Products.

 

(a)                                 Efforts and Cooperation.  The Parties shall,
with respect to each Product, use Commercially Reasonable Efforts to carry out
the Development and Commercialization Activities contemplated hereunder. 
Without limiting the foregoing, at a minimum, each Party shall devote the
resources, as set forth in the applicable Product Work Plan.

 

(b)                                 Work Plans.

 

(i)                                     A preliminary Work Plan with respect to
each of the Initial Products shall be developed and agreed upon by the JSC, as
provided for below, within [**] of the Effective Date. With respect to the
remaining Products contemplated hereunder, a preliminary Product applicable Work
Plan shall be developed within [**] of Momenta’s receipt from Baxter of the
Exercise Notice with respect to such Additional Product (i.e. Baxter’s exercise
of the Product Option with respect to such Additional Product, as provided for
at Section 2.2(d) above or the Selected Third Party Product Exercise Notice
pursuant to Section 2.2(f)(i)).

 

(ii)                                  Each Work Plan shall include, as
appropriate: (A) specific objectives of the Collaboration during the applicable
year; (B) the specific activities to be performed by each Party, or by Third
Parties, in support of the Development and Commercialization of the Products for
the applicable year; (C) contemplated timelines associated with Development and
Commercialization Activities (including contemplated timelines for applicable
regulatory filings); (D) a budget reflecting the resources (including FTEs for
each Party) to be assigned and amounts anticipated to be expended by each Party
in support of the Development and Commercialization of the Products; (E) a
rolling five (5) year plan with a complete Product income statement (product
P&L), which includes (A)-(D) above.

 

(iii)                               The Commercialization plan will initially be
a high-level rolling [**] forecast (the “Commercialization Plan”) and will be
provided within [**] of the Effective Date with respect to the Initial Products
and within [**] after Momenta’s receipt of the Exercise Notice from Baxter with
respect to the inclusion of an Additional Product as a Product in the
Collaboration and updated annually as part of the Work Plan.  Commencing no
later than [**] prior to submission of an application for Regulatory Approval
for each Product in a Major Country, Baxter shall submit to the JSC a more
detailed Commercial Plan as part of the Work Plan section for review and
approval by the JSC (such detail taking into account the time that will elapse
until First Commercial Sale of the Product).

 

(c)                                  Momenta Responsibilities. In general,
subject to the applicable Product Work Plan, the role of the JSC (such role
outlined below at Article 3), and as otherwise outlined in this Article 2,
Momenta shall, with respect to each Product, undertake, and have the right to
[**] with respect to:

 

21

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(i)                                     CMC Activities (including Process
Engineering Activities) prior to GMP; provided, however, that Momenta shall
seek, and consider in good faith, Baxter’s comments with respect to the
manufacture of a Product; and provided further, however, that Momenta shall not
have the right to enter into any agreement with a Third Party with respect to
the manufacture or supply of a Product without Baxter’s prior written consent,
which consent shall not be unreasonably withheld;

 

(ii)                                  Characterization Activities;

 

(iii)                               the regulatory strategy pertaining to
non-clinical demonstration of similarity and interchangeability;

 

(iv)                              prior to the initiation of clinical studies
with respect to a Product, regulatory meetings and communications with the
applicable Regulatory Authority. Such rights outlined in this subsection
(iv) are subject to Section 2.6 below; and

 

(v)                                 all other non-Clinical Development
Activities (including Quality Management Systems if Momenta conducts cGMP
manufacturing activities either itself or through a Third Party) occurring prior
to achievement of IND Acceptance of the Product.

 

(d)                                 Baxter Responsibilities.  In general,
subject to the applicable Product Work Plan, the role of the JSC, and as
otherwise outlined in this Article 2, Baxter shall, with respect to each
Product, undertake, and have the right to [**] with respect to:

 

(i)                                     revising and/or modifying the Clinical
Development strategy following IND Acceptance; provided, however, that Baxter
shall use good faith efforts, acting through the JSC, to achieve consensus on
such strategy and if such consensus is not reached, the Parties shall undertake
an abbreviated dispute resolution process as set forth in Section 12.11;

 

(ii)                            execution of the then-current Clinical
Development strategy;

 

(iii)                         GMP manufacturing and supply of the Products,
including identification and engagement of a contract manufacturer, which may
include engaging Baxter.  Notwithstanding the foregoing, Baxter shall use good
faith efforts to provide Momenta with the opportunity to review and comment on
any draft agreements with a potential contract manufacturer;

 

(iv)                        following the initiation of clinical studies with
respect to a Product, all regulatory filings, meetings and communications with
the applicable Regulatory Authority (including the Clinical Development
obligations of the Parties in relation to a Product to obtain Regulatory
Approval of such Product, as such is determined by communications with
Regulatory Authorities). The rights outlined in this subsection (iv) are subject
to Section 2.6 below;

 

22

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(v)                           all Commercialization Activities; and

 

(vi)                        following IND Acceptance in the applicable country
in the Territory, all matters related to such Product.

 

(e)                                  Joint Responsibilities.  Subject to the
applicable Product Work Plan, the role of the JSC, and as otherwise outlined in
this Article 2, the Parties shall, with respect to each Product, [**] and be
responsible for:

 

(i)                                     developing the Clinical Development
strategy prior to IND Acceptance;

 

(ii)                                  Product registration and regulatory
strategy (including joint preparation and review of related regulatory
applications and briefing books);

 

(iii)                               preparation of the formal IND submission (or
foreign equivalent), as required, (which shall be submitted in the name of one
or both Parties, as allowed for under applicable Law, provided that the IND
shall be,  as applicable, amended prior to the commencement of clinical trials
to reflect only Baxter’s name);

 

(iv)                              developing, reviewing and amending, if
necessary, the Technical De-Risking Criteria for each Product with respect to
items 1.a. and 3. of Exhibit 1.89; provided, however, that for the first Initial
Product (also referred to herein as [**]) the Parties agree that the values for
items 1.a. and 3. shall be [**] and [**] respectively.  For all other Products,
the Technical De-Risking Criteria for such items shall be established by the JSC
within [**] of the [**], or in the case of the second Initial Product  (also
referred to herein as [**]) within [**] of the [**] of this Agreement;

 

(v)                                 following [**] of a Product, CMC Activities
(including quality) with respect to GMP manufacturing; and

 

(vi)                              legal strategy for the Legal Activities (this
subparagraph (vi) is subject to, and does not modify the explicit allocation of 
the roles, rights and responsibilities provided for in Article 5).

 

2.5                               Limitation on [**].  Notwithstanding the
provisions of Sections 2.4(c) and 2.4(d), neither Party shall [**] its [**] to
[**] a [**] pursuant to Sections 2.4(c) and 2.4(d), as applicable, to the extent
it would require the other Party to [**].

 

2.6                               Regulatory Matters.  Notwithstanding the
rights and responsibilities outlined at Sections 2.4(c) and 2.4(d) above, each
Party shall have the opportunity to review and comment on all substantive
communications in advance of any formal meeting with Regulatory Authorities and
appropriate individuals from both Parties, as approved by the JSC, will be
invited as meeting participants to any meetings with the relevant Regulatory
Authorities.

 

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2.7                               Commercialization.

 

(a)                                 Generally.  Baxter shall use Commercially
Reasonable Efforts to Commercialize each Product within [**] following receipt
of Regulatory Approval for the applicable Product in [**]. Baxter shall
Commercialize each Product in [**].

 

(b)                                 Conversion to Non-Exclusive License.  If,
following notice from Momenta that Baxter is in breach of its obligations
pursuant to Section 2.7(a) with respect to a specific Product and a specific
country included in the Major Countries, Baxter fails to cure such breach
pursuant to the terms of Section 10.4  (each such Major Country, a “Breached
Country”), then, notwithstanding the provisions of Section 10.4, Momenta shall
not have the right to terminate this Agreement but rather each of the licenses
granted to Baxter pursuant to Section 6.1 with respect to such Product in such
Breached Country shall no longer be an exclusive license but shall, instead, be
amended, with no further action required by either Party, to reflect a
non-exclusive license and Momenta shall thereafter be entitled to directly
commercialize the Product itself in the applicable Breached Country.   For the
avoidance of doubt, the licenses shall be converted on a Product-by-Product,
country-by-country basis only with respect to those Products and those countries
in which Baxter has breached its obligations and failed to cure such breach
pursuant to the terms of this Agreement.

 

In the event a license granted to Baxter with respect to a Product is converted
to a non-exclusive license in a Breached Country as contemplated above, the
Parties shall take such action as is reasonably necessary to supply Momenta with
access to such Product for distribution or sale in such Breached Country. 
Recognizing that the form of arrangement will vary due to the legal requirements
for appointing a distributor or the holding of a Regulatory Approval, the
Parties will discuss in good faith, taking into consideration, inter alia, the
Major Country in question, the regulatory scheme, the fact that Baxter will also
retain the right to Commercialize the Product in such country, and the actions
Baxter can reasonably take to put Momenta in a position to effectively act as an
non-exclusive authorized distributor. Such actions may include, but shall not be
limited to: (i) the granting to Momenta of a reference right for the applicable
Regulatory Approvals in such country and (ii) the sale to Momenta of the
applicable Product at a transfer price equal to actual Cost of Goods Sold for
such product [**] .

 

(c)                                  Termination.  Notwithstanding the
restriction on termination of this Agreement set forth in Section 2.7(b), if:
(i) the U.S. is a Breached Country with respect to a Product or (ii) (a) there
are [**] or more Breached Countries with respect the applicable Product and
(b) the projected annual gross sales for the applicable Product for all Breached
Countries (as set forth in the Commercialization Plan) exceeds [**] percent
([**]%) of the projected annual gross sales of such Product for all Major
Countries in the Territory, Momenta shall have the right to terminate this
Agreement in the entire Territory by providing written notice to Baxter;
provided, however, that such termination shall be effective solely with respect
to such Product.

 

2.8                               Technology Transfer Costs.  Notwithstanding
any other provision of this Agreement to the contrary, the Parties agree that
all costs and expenses related to Technology Transfer to a contract
manufacturing organization (including Baxter in the event Baxter is the contract
manufacturing organization) that performs the pilot scale manufacturing process
(the

 

24

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“Pilot Scale CMO”) shall be borne [**] and all costs for Technology Transfer
from a Pilot Scale CMO [**] or [**] for the commercial manufacture of the
applicable Product shall be borne [**].

 

ARTICLE 3.
GOVERNANCE

 

It is the intent of the Parties that, subject to Article 2 above, the
Development and Commercialization Activities and associated Legal Activities and
decisions for each Product be conducted and managed on an on-going basis through
the Joint Steering Committee, and any relevant Sub-Committees or working groups
using Commercially Reasonable Efforts.

 

3.1                               Generally. The Parties will establish a joint
steering committee (“Joint Steering Committee” or “JSC”) composed of senior
members from each Party to oversee and manage the Development and
Commercialization of a Product. The structure, scope of responsibility and
authority of the JSC shall be as set forth in this Article 3.

 

3.2                               Structure.  The JSC shall consist of three
(3) representatives from each of Baxter and Momenta.  The JSC shall appoint a
chairperson from among its members, which shall initially be a representative
from Momenta, and then rotate annually between the Parties.  The chairperson
shall be responsible for calling meetings of the JSC and for leading the
meetings.  The initial JSC representatives for each Party shall be set forth in
writing within [**] after the Effective Date.  Each Party may replace its
representatives by providing written notice to the other Party.  Employees and
other representatives of each Party that are not members of the JSC may attend
meetings of the JSC and any Sub-Committees (as defined below) as required to
further the activities contemplated by this Agreement.

 

3.3                               Time and Location of Meetings.  The JSC (and
all Sub-Committees thereof) shall meet at such times and places, in person or by
telephone conferencing, web-conferencing, video conferencing or other electronic
communication, as the JSC shall determine to carry out its responsibilities;
provided, however, that the initial meeting of the JSC shall be held in person
at such location as mutually agreed upon by the Parties no later than [**] after
the Effective Date.  Thereafter, the JSC shall meet in person at least [**]
times each calendar year and shall hold regular teleconferences between meetings
not less frequently than [**].  The location of the in-person meetings shall
alternate between the sites of the two Parties.  If a representative of a Party
is unable to attend a meeting, such Party may designate an alternate to attend
such meeting in place of the absent representative.

 

3.4                               Minutes.  The JSC and all Sub-Committees
thereof shall designate for each meeting one person who shall be responsible for
drafting and issuing minutes of the meeting reflecting all material items
discussed and any agreements of the JSC, which minutes shall be distributed to
all JSC members for review and approval.  Such minutes shall provide a
description in reasonable detail of the discussions held at the meeting and a
list of any actions, decisions or determinations approved by the JSC.  Minutes
of each JSC meeting shall be approved or disapproved, and revised as necessary,
within [**] of each such meeting.  Final minutes of each meeting shall be
distributed to the members of the JSC by the chairperson.

 

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3.5                               Sub-Committees.  At its initial meeting the
JSC shall agree upon the formation of certain sub-committees (each a
“Sub-Committee”), each with an equal number of representatives from Baxter and
Momenta to address specific issues in greater detail.  Unless otherwise agreed
and except with respect to those matters addressed in Sections 2.4(c) and
2.4(d), [**] on all Sub-Committees.  At its initial meeting, the JSC shall
establish and appoint members to the Sub-Committees and each such Sub-Committee
shall hold its first meeting in person within [**] of its formation at such
location designated by the JSC.

 

3.6                               Scope of Authority; Responsibilities.

 

(a)                                 The JSC shall, subject to the restrictions
set forth in this Agreement, have the authority to make decisions relating to
the ongoing management of the relationship between the Parties with respect to
this Agreement. The JSC shall have such other responsibilities as set forth
herein and as the Parties may agree in writing from time to time.

 

(b)                                 For the avoidance of doubt, the JSC shall
have no authority to: (A) amend any of the terms of this Agreement; (B) waive
any rights that either Party may otherwise have pursuant to this Agreement or
otherwise; or (C) allocate the ownership of any Patent Rights or rights to any
Know-How or the Parties’ rights to apply for Patent(s).  Notwithstanding the
foregoing, the JSC may make recommendations to the Parties for amendment of this
Agreement.

 

3.7                               Decisions; Disputes.

 

(a)                                 Except as expressly set forth above in
Sections 2.4(c) and 2.4(d) with respect to certain decisions of the Parties, the
decisions of the JSC (including any Sub-Committee thereof) must be unanimous
with representatives of Baxter having one collective vote and representatives of
Momenta having one collective vote.

 

(b)                                 If a dispute arises regarding matters within
the scope of responsibilities of the JSC, and the JSC fails to reach a unanimous
decision on its resolution within [**] of when the dispute was first presented
to the JSC, then the matter shall be elevated through each Party’s respective
senior management representatives pursuant to Section 12.11 and Exhibit 12.11.

 

3.8                               Costs and Expenses.  Each Party shall be
responsible for all travel costs and out-of-pocket expenses incurred by its
respective representatives in connection with attending the meetings and
otherwise being part of the JSC and of the Sub-Committees.  For the avoidance of
doubt, travel time to and from meetings or other related travel shall not be
counted as part of FTE time.

 

3.9                               Term of the JSC and Sub-Committees.  The JSC
and each Sub-Committee, as applicable, shall, unless otherwise mutually agreed
by the Parties, continue with respect to each Product through the Term of the
Agreement. Following the [**] anniversary of the First Commercial Sale of the
applicable Product, Momenta shall have the right but not the obligation to
participate in the JSC and Sub-Committees that are then-operating in support of
such Product.

 

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ARTICLE 4.
FINANCIAL TERMS

 

4.1                               Payments.

 

(a)                                 Up-Front Payment.  Upon the later of (i) ten
(10) days after the Effective Date of the Agreement, or (ii) January 19, 2012,
Baxter shall make  a one-time payment to Momenta of Thirty Three Million Dollars
(USD$33,000,000).

 

(b)                                 Extension of Naming Period. For each Naming
Period extension requested, Baxter shall pay to Momenta the amount set forth at
Section 2.2(c)(ii).

 

(c)                                  Option Payment. For each Product Option
exercised, Baxter shall pay to Momenta the Option Payment set forth at
Section 2.2(d).

 

4.2                               Development Expenses and Commercialization
Costs. Unless Momenta exercises its option to enter into the Cost/Profit Share
arrangement pursuant to Section 4.10 (in which case the terms set forth in
Section 4.10 shall apply) the following shall apply:

 

(a)                                 Development Expenses. Prior to achievement
of the IND Acceptance, Momenta shall be responsible for Development Expenses
related to the applicable Product, except for clinical (human) studies and GMP
manufacturing activities intended to support Clinical Development.

 

(i) In the event Baxter: (A) fails to proceed with such GMP manufacturing
activities, (B) fails to pay for contracts associated with such GMP
manufacturing activities, or (C) fails to commit in writing to reimburse Momenta
(per below) in relation to a specific Product, for GMP manufacturing activities
which are to be conducted prior to IND Acceptance for such Product, Momenta
shall have the option, but not the obligation, to proceed with such GMP
manufacturing activities in relation to the applicable Product and to charge to
Baxter, following IND Acceptance for such Product, [**] percent ([**]%) of 
Momenta’s Development Expenses incurred for such GMP manufacturing activities. 
Baxter shall provide notice to Momenta of the decision not to proceed with such
GMP manufacturing activities at least [**] prior to the planned initiation of
such GMP manufacturing activities as such is specified in the applicable Product
Work Plan or applicable manufacturing contract(s).

 

(ii) If, following IND Acceptance of a Product, Baxter: (A) fails to proceed
with clinical (human) studies, (B) fails to pay for contracts associated with
such clinical (human) studies, or (C) fails to commit in writing to reimburse
Momenta (per below) in relation to a specific Product, for such clinical (human)
studies, Momenta shall have the option, but not the obligation, to proceed with
such clinical (human) studies in relation to the applicable Product and to
charge to Baxter, [**] percent ([**]%) of Momenta’s Development Expenses
incurred for such clinical (human) studies.  Baxter shall provide notice to
Momenta of the decision not to proceed with such clinical (human) studies
activities at least [**]

 

27

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prior to the planned initiation of such clinical (human) studies as such is
specified in the applicable Product Work Plan or applicable clinical
contract(s).

 

(iii) [**] of an applicable Product, if achievement of the [**] has not yet
occurred, Baxter shall be responsible for [**] percent ([**]%) of Development
Expenses incurred by Momenta [**] of such Product and [**]%) of Development
Expenses incurred by Baxter, [**] of such Product, except with respect to
clinical (human) studies and GMP manufacturing activities intended to support
Clinical Development, for which Baxter will be [**] percent ([**]%)
responsible.  All Development Expenses of the Parties are to be incurred in
accordance with the applicable Product Work Plan.

 

(iv) Following achievement of both: (A) [**] and (B) [**] with respect to the
applicable Product, Baxter shall be responsible for [**] percent ([**]%) of all
Development Expenses associated with such Product incurred after achievement of
both such events, unless Momenta has elected a Cost/Profit Share arrangement as
provided for in Section 4.7 below, in which case Momenta shall be responsible
for the selected Cost Share related to the Additional Products.

 

(v) The [**] will have been determined to have been achieved upon the earlier
of: (A) objective achievement the [**]; (B) JSC determination that the [**]; or
(C) if [**] elects, [**], that it will proceed with the next stage (e.g. [**].)
of Development of the Product.

 

(b)                                 Commercialization Costs. Baxter shall be
responsible for one hundred percent (100%) of all Commercialization Costs
associated with the Products, except where Momenta has elected a Cost/Profit
Share arrangement as provided for in Section 4.7 below, in which case Momenta
shall be responsible for the selected Cost Share related to the Additional
Products.

 

4.3                               Legal Expenses.  Article 5, below, sets forth
the rights and responsibilities of the Parties, including the financial rights
and obligations of the Parties, with respect to the Legal Activities.

 

4.4                               Third Party Payments.

 

(a)                                 Disclosure.  Momenta has disclosed to
Baxter, prior to the Execution Date, all contracts and agreements (whether
written or oral) that could, to Momenta’s knowledge as of the Execution Date,
result in Third Party Payments (including, without limitation license fees,
annual payments, and royalties) for licensed Third Party Patent Rights and/or
Know-How with respect to the Commercialization of the Initial Products.  Baxter
has disclosed to Momenta, prior to the Execution Date, all contracts and
agreements (whether written or oral) that could, to Baxter’s knowledge as of the
Execution Date, result in Third Party Payments (including, without limitation
license fees, annual payments and royalties) for licensed Third Party Patent
Rights and/or Know-How with respect to the Commercialization of the Initial
Products.

 

28

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(b)                                 Reimbursable Third Party Payments:  Neither
Party shall, to its knowledge, enter into an agreement with a Third Party for
licensed Third Party Patent Rights and/or Know-How with respect to the right to
Develop or Commercialize the Product that would result in Third Party Payments
(including without limitation, license fees, annual payments and royalties),
without (i) prior written notice to the other Party, and (ii) the consent of the
JSC, which consent shall not be unreasonably withheld.  Upon the approval of the
JSC of such an agreement, the Parties shall be responsible for, and allocate by
Allocable Legal Expense Share, the Third Party Payments (including, without
limitation license fees, annual payments and royalties) due for licensed Third
Party Patent Rights and Know-How that are related to or are Product-specific
(referred to as “Reimbursable Third Party Payments”). Baxter shall have the
right to treat Third Party Payments for Third Party Patent Rights and/or Know
How related to commercial manufacturing, testing, releasing, packaging and/or
labeling as part of Cost of Goods Sold; provided that with respect to Products
which are subject to a Cost/Profit Share under Section 4.7, reimbursement of
such Third Party Payments shall not be made under this Section 4.4(b) and shall
be  made in connection with the Profit Share Percentage and payments under
Section 4.7.

 

(c)                                  [**] Third Party Payments:  The Parties’
responsibilities with respect to certain other Third Party Payments shall be as
follows:

 

(i) Momenta shall be [**] for and shall pay [**] percent ([**]%) of the Third
Party Payments (including, without limitation license fees, annual payments and
royalties) due for licensed Third Party Patent Rights and Know-How that are not
[**] to one or more Products and which are used by Momenta [**] in Development
of a Product (e.g. Third Party Patent Rights and/or Know-How with respect to a
[**] or [**].

 

(ii) Baxter shall be [**] for and shall pay [**] percent ([**]%) of the Third
Party Payments (including, without limitation license fees, annual payments and
royalties) due for licensed Third Party Patent Rights and Know-How that are used
in the Commercialization of a Product but only to the extent such Third Party
Patent Rights and Know-How are not [**] for the Commercialization of a Product
(e.g. Third Party Patent Rights and/or Know-How related to the [**] of a Product
(e.g., a [**]).

 

(d)                                 [**] to be paid to Momenta.

 

4.5                               Milestone Payments.  Baxter shall pay to
Momenta, in each case subject to the successful achievement of each objective
described below, with respect to each Initial Product or Additional Product (as
noted below):

 

(a)                                 [**] Dollars (USD$[**]) upon achievement of
the [**] for the Initial Product known as [**];

 

(b)                                 [**] Dollars (USD$[**]) upon [**] for each
Initial Product;

 

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(c)                                  [**] Dollars (USD$[**]) upon [**] for [**]
if the [**] occurs on or prior to [**] (this milestone is [**] for such Initial
Product at Section 4.5(b) above);

 

(d)                                 [**] Dollars (USD$[**]) upon [**] if the
[**] occurs on or prior to [**]; (this milestone is [**] for such Initial
Product at Section 4.5(b) above);

 

(e)                                  [**] Dollars (USD[**]) upon the later to
occur of (i) [**] for the applicable Initial Product or (ii) achievement of [**]
for each applicable Initial Product;

 

(f)                                   [**] Dollars (USD$[**]) upon [**] for each
applicable Additional Product;

 

(g)                                  [**] Dollars (USD$[**]) upon the later to
occur of (a) [**] for the applicable Additional Product or (b) [**] for each
applicable Additional Product; and

 

(h)                                 [**] Dollars (USD$[**] for the applicable
Product in either the [**], provided that a [**]; provided, however that if the
[**]:

 

(i) exceed [**] Dollars (USD$[**]) but are less than [**] Dollars (USD$[**] and

 

(ii) exceed [**] Dollars (USD$[**].

 

4.6                               Royalty Payments.  Baxter shall pay to Momenta
a royalty of up to [**] percent ([**]%) of annual Net Sales of the applicable
Product (regardless of the regulatory pathway or law under which the applicable
Product was approved) as follows:

 

(a)                                 [**] percent ([**]%) of annual Net Sales of
the applicable Product; plus

 

(b)                                 Additional royalty of [**] percent ([**]%)
of annual Net Sales of the applicable Product in excess of [**] Dollars
(USD$[**]) in the applicable calendar year.

 

In the [**] of an applicable calendar year in which year-to-date cumulative Net
Sales exceed [**] Dollars (USD$[**]) the allocated portion of quarterly Net
Sales to which the [**]% royalty rate shall be applied shall be determined as
follows: [**] Dollars (USD$[**]) minus cumulative annual Net Sales of the
Product through the [**] that cumulative annual Net Sales of the Product exceeds
[**] Dollars (USD$[**]) / cumulative annual Net Sales of the Product [**] that
cumulative annual Net Sales of the Product exceeds [**] Dollars (USD$[**]) minus
the cumulative annual Net Sales of the Product through [**] that cumulative Net
Sales of the Product exceeds [**] Dollars (USD$[**]) (the “Allocation
Fraction”).

 

In the [**] in which cumulative annual Net Sales are greater than [**] Dollars
(USD$[**]) the allocated portion of quarterly Net Sales to which the [**]%
royalty rate shall be applied shall be determined as follows: ([**]) multiplied
by such [**]); plus

 

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(c)                                  Additional royalty of [**] percent ([**]%)
of annual Net Sales, if the applicable Product is the Sole Interchangeable
Product in the applicable country in the Territory (for purposes of this Section
4.6, in the case of the EU, Territory shall refer to the individual nations in
the EU); plus

 

(d)                                 Additional royalty of one of the following
based upon the number of Competing Products then being sold in the relevant
country in the Territory by a Third Party:

 

Number of
Competing Products
in the applicable
country in the
Territory

 

Additional Royalty

0

 

[**] Percent ([**]%) of annual Net Sales

1

 

[**] Percent ([**]%) of annual Net Sales

2

 

[**] Percent ([**]%) of annual Net Sales

3+

 

[**]

 

Changes to the royalty rate based on the number of Competing Products in the
applicable country in the Territory as outlined this Section 4.6(d) shall take
effect on the first day of the calendar quarter following the Launch or
discontinuation (e.g. no longer offered for sale) of such Competing Product in
such country of the Territory.

 

4.7                               Profit Share.  Momenta will have a one-time
option to opt-into an arrangement whereby Baxter and Momenta share the costs and
profits related to all of the Additional Products (“Cost/Profit Share”) as
further detailed below.  Such option shall be exercisable, at Momenta’s sole
discretion, within [**] following Momenta’s receipt of the [**] (the “Profit
Share Election Period”):

 

(a)                                 Prior to the expiration of the Profit Share
Election Period, Momenta shall have the right to provide written notice to
Baxter (the “Profit Share Election Notice”) of its election to opt-into a
Cost/Profit Share arrangement.

 

(b)                                 Momenta shall have the right to elect a
Cost/Profit Share of either (a) [**] percent ([**]%), (b) [**] percent ([**]%),
or (c) thirty percent (30%) (as applicable, the “Profit Share Percentage”).
Following Momenta’s delivery of the Profit Share Election Notice to Baxter,
Momenta shall be responsible for the elected Cost/Profit Share.  The Parties
agree that ‘Profits’ may be negative (i.e. there may be a loss) depending on the
timing of the election and the success of the Product.

 

(c)                                  Upon delivery of the Profit Share Election
Notice to Baxter with respect to the first Additional Product, the Profit Share
Percentage selected shall also apply to all other Additional Products for which
Baxter provides an Exercise Notice.

 

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(d)                                 Upon Momenta’s delivery to Baxter of the
Election Notice, the royalties otherwise payable by Baxter to Momenta under this
Agreement as set forth in Section 4.6 shall be subject to reduction as outlined
in the table below (such reduction the “Royalty Offset”):

 

Profit Share Percentage
Election

 

Royalty Offset
(% reduction of Royalties
otherwise payable by
Baxter)

 

[**]

%

[**]

%

[**]

%

[**]

%

30

%

[**]

%

 

(For avoidance of doubt, Exhibit 4.7 contains several examples of the operation
of the royalty, milestone and Cost/Profit Share provisions under several
Commercialization scenarios).

 

4.8                               Books and Records.  During the Term of this
Agreement, the Parties shall keep, and shall ensure that their respective
Affiliates and sublicensees shall keep, complete and accurate records in
sufficient detail to make the reports required hereunder, to confirm compliance
with the provisions of this Agreement, to properly reflect all amounts billed,
owed or reported and to verify the amounts payable hereunder for a period of
three (3) years after such payments are made.

 

4.9                               Reports.

 

(a)                                 Cost/Profit Share Reports.  Baxter shall
deliver to Momenta within [**] days after the last day of each calendar quarter
in which the applicable Product is sold a good faith estimate and within [**]
days after the last day of each calendar quarter in which the applicable Product
is sold, a final report setting forth:

 

(i) the gross sales of all Products on a Product-by-Product and
country-by-country basis, sold by Baxter, its Affiliates and sublicensees during
the calendar quarter and the calculation of Net Sales of the Products from gross
sales;

 

(ii) the amount of any Sublicense Revenue received by Baxter during the calendar
quarter, if relevant;

 

(iii) the calculation of the Profits, including detailed information on the Cost
of Goods Sold and Marketing and Selling Expenses, from which the Profits are
determined.  If no Profit Share is due, the report shall so state.

 

(b)                                 Royalty Reports.  Baxter shall deliver to
Momenta [**] days after the last day of each calendar quarter in which the
applicable Product is sold a good faith estimate and within [**] days after the
last day of each calendar quarter in which the applicable Product is sold, a
final report, a report setting forth:

 

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(i) the gross sales of all Products on a Product-by-Product and
country-by-country basis, sold by Baxter, its Affiliates and sublicensees during
the calendar quarter and the calculation of Net Sales of the Products from gross
sales;

 

(ii) the amount of any Sublicense Revenue received by Baxter during the calendar
quarter, if relevant;

 

(iii) the calculation of the royalties, including detailed information on the
royalty rates, from which the royalties are determined.  If no royalty is due,
the report shall so state.

 

(c)                                  Momenta Reporting.  To the extent that
Momenta obtains the right to Commercialize a Product as a result of Baxter’s
breach of Section 2.7, Momenta shall have the same reporting obligations as
Baxter under Sections 4.9(a) and 4.9(b) and all references to Baxter therein
shall be replaced with Momenta and all references to Momenta shall be replaced
with Baxter.

 

(d)                                 Legal Expense Reports.  Each Party shall
deliver to the other Party within ten (10) business days after the last day of
each calendar quarter, a report of the Legal Expenses incurred in such calendar
quarter that are allocated under the Agreement between the Parties, along with a
calculation of the amount allocable to each Party.

 

(e)                                  Reimbursable Third Party Payment Reports. 
Each Party shall deliver to the other Party within [**] days after the last day
of each calendar quarter, a report of the Reimbursable Third Party Payments that
are allocated under the Agreement between the Parties, along with a calculation
of the amount allocable to each Party.

 

4.10                        Cost Share Reports and Payments of Cost Share,
Profit Share, the Up Front Payment, Royalties and Milestones.  If Momenta
exercises its option to enter into the Cost/Profit Share arrangement the
following shall apply:

 

(a)                                 Prior to IND Acceptance — Development
Expenses. Prior to IND Acceptance, Baxter shall invoice Momenta quarterly for
Development Expenses incurred by Baxter in accordance with the applicable
Product Work Plan, promptly following the end of each calendar quarter.

 

(b)                                 [**] and Prior to [**] — Development
Expenses.  [**] and prior to [**], Momenta and Baxter shall each report to the
other the Development Expenses incurred by each Party in accordance with the
applicable Product Work Plan and authorized by the JSC (in the case of Momenta,
such Development Expenses shall mean those expenses incurred by Momenta in
conduct of the Development Activities [**]).  The Party which incurs Development
Expenses in excess of the other Party shall invoice such other Party for [**]
percent ([**]%) of such excess promptly following the end of each calendar
quarter.

 

(c)                                  Following IND Acceptance and [**] —
Development Expenses. Following both IND Acceptance and [**], Momenta shall
invoice Baxter quarterly for Development

 

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Expenses incurred by Momenta in accordance with the applicable Product Work Plan
and authorized by JSC, promptly following the end of each calendar quarter.

 

(d)                                 Commercialization Costs.  Momenta shall
invoice Baxter quarterly for all Commercialization Costs incurred by Momenta as
authorized by the JSC, promptly following the end of each calendar quarter.

 

(e)                                  Legal Expenses and Reimbursable Third Party
Expenses. The Parties shall total each Party’s Allocable Legal Expense Share of
the Legal Expenses and Reimbursable Third Party Payments reported under 4.9(c)
and (e) within [**] days of the end of the last day of the calendar quarter. 
The net amount owing to a Party shall be promptly invoiced by the Party to whom
it is owed to the other Party.

 

(f)                                   Timing of Payments. Unless otherwise
provided herein, (i) Development Expenses, Commercialization Costs, Legal
Expenses, and Reimbursable Third Party Expenses shall be paid within [**] days
of invoice, (ii) all royalties due to Momenta or Baxter under this Agreement
shall be paid within [**] days of the end of the calendar quarter during which
the applicable Net Sales were made, and (iii) if applicable, the Profit Share
due to Momenta under this Agreement shall be paid within [**] days after the
last day of the calendar quarter in which the Profits accrue.  All amounts shall
be paid in U.S. Dollars.  To the extent royalties or Profits on any sales are
made outside the U.S., the amounts payable to Momenta or Baxter for such sales
shall be determined based upon the paying Party’s normal foreign currency
conversion practices throughout the applicable quarter.

 

(g)                                  Overdue Payments. In the event the upfront
payment, any milestone payment, royalty payment, Option Payment, Cost Share or
Profit Share payment, or other such payment owed by Baxter to Momenta, or Cost
Share payment or such other payment owed by Momenta to Baxter, under this
Agreement is not made when due, such outstanding payment shall constitute a
material breach of this Agreement and shall accrue interest (from the date such
payment is due through and including the date upon which full payment is made)
at a rate of one half of one percent (0.5%) per month from the due date until
paid in full, provided that in no event shall said annual rate exceed the
maximum interest rate permitted by law in regard to such payments. Such payment,
when made, shall be accompanied by all interest so accrued. Said interest and
the payment and acceptance thereof shall not negate nor waive the right of
Momenta or Baxter to any other remedy, legal or equitable, to which it is
entitled because of the delinquency of the payment.

 

4.11                        Taxes.  All amounts due to either Party hereunder
shall not be reduced by any value-added tax or any other sales tax or duties;
provided, however, that the Parties shall cooperate to minimize any tax
liability; provided however, that the payor shall deduct any applicable
withholding taxes or similar mandatory governmental charges levied by any
governmental jurisdiction from the amount due to the other party hereunder. 
Baxter and Momenta will cooperate in obtaining any necessary documentation
required under applicable tax law, regulation, or intergovernmental agreement.

 

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4.12                        Audits; Records and Inspection.  Baxter and Momenta
shall keep, and cause its Affiliates and sublicensees to keep, complete, true
and accurate books of account and records for the purpose of determining the
Development Expenses, Commercialization Costs, Reimbursable Third Party
Payments, Legal Expenses, royalty, and, as applicable, the Profit Share, amounts
payable to Momenta or Baxter, as applicable, under this Agreement.  Such books
and records shall be kept at the principal place of business of Baxter or its
Affiliates or authorized sublicensees, or Momenta or its Affiliates, as the case
may be, for at least [**] years following the end of the calendar quarter to
which they pertain.  Upon [**] days prior written notice from a Party, the other
Party shall permit, and shall ensure that its Affiliates and sublicensees shall
permit, an independent certified public accounting firm of recognized national
standing in the U.S., selected by the requesting Party and reasonably acceptable
to the other Party, at the requesting Party’s expense, to have access to such
Party’s (or their Affiliates or sublicensees) records, specific to a country in
a Territory as appropriate, as may be reasonably necessary to verify the
accuracy of any amounts reported, actually paid or payable under this Agreement
for any year ending not more than [**] prior to the date of such request. Such
audits may be made no more than once each calendar year, during normal business
hours at reasonable times mutually agreed by the Parties.  If such accounting
firm concludes that additional amounts were owed to the requesting Party during
such period with respect to such country of the Territory as applicable, or if
the requesting Party overpaid for any rates or fees for products or services
with respect to such country of the Territory, the other Party shall pay such
additional amounts or refund such overpayment (including interest on such
additional sums with respect to such country of the Territory in accordance with
Section 4.10(g)) within [**] days of the date the requesting Party delivers to
the other Party such accounting firm’s written report so concluding. The fees
charged by such accounting firm shall be paid by the requesting Party; provided,
however, that if the audit discloses that the amounts payable to such Party for
the audited period are more than [**] percent ([**]%) of the amounts actually
paid for such period in such country of the Territory as applicable, or if the
audit discloses that the other Party has overcharged the requesting Party for
rates or fees for products or services period in such country of the Territory
as applicable, by over [**] percent ([**]%), then the other Party shall pay the
reasonable fees and expenses charged by such accounting firm. Upon the
expiration of [**] following the end of any calendar year, the calculation of
any amounts payable with respect to such calendar year, or rates or fees charged
for such year shall be binding and conclusive upon the Parties.

 

ARTICLE 5.
INTELLECTUAL PROPERTY AND LITIGATION

 

5.1                               Ownership of Intellectual Property.  Baxter
shall own and retain all right, title, interest and ownership in Baxter
Intellectual Property, including that developed prior to the Effective Date and
that developed independently outside the course of the Collaboration. Momenta
shall own and retain all right, title, interest and ownership in the Momenta
Intellectual Property, including that developed prior to the Effective Date and
that developed independently outside the course of the Collaboration.  The
Parties shall jointly own all Collaboration Intellectual Property developed in
the course of the Collaboration.  For the avoidance of doubt, the Collaboration
commences with the Effective Date with respect to the Initial Products and upon
the exercise of the Product Option with respect to the Additional Products.

 

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5.2                               Improvements.  Baxter shall own all right,
title, interest and ownership in and to Baxter Improvements created in the
course of the Collaboration.  To the extent such Baxter Improvements are
developed by Momenta and/or its Affiliates and/or their respective employees,
contractors or consultants, Momenta hereby assigns to Baxter all right, title
and interest in and to such Baxter Improvements, and all intellectual property
rights therein.  Momenta shall own all right, title, interest and ownership in
and to the Momenta Improvements created in the course of the Collaboration.  To
the extent such Momenta Improvements are developed by Baxter and/or its
Affiliates and/or their respective employees, contractors or consultants, Baxter
hereby assigns to Momenta all right, title and interest in and to such Momenta
Improvements, and all intellectual property rights therein.

 

5.3                               Prosecution and Maintenance of Patent Rights.

 

(a)                                 Generally.  Baxter shall have the right and
responsibility, in its sole discretion, to prepare, file, prosecute and maintain
patent protection with respect to the Baxter Patent Rights.  Momenta shall have
the right and responsibility, in its sole discretion, to prepare, file,
prosecute and maintain patent protection with respect to the Momenta Patent
Rights. The Parties shall have the joint right and responsibility to prepare,
file, prosecute and maintain patent protection with respect to Collaboration
Patent Rights in the names of both Parties. Patent counsel from the Parties
shall jointly review and agree on the appropriate course of action and control
with respect to the preparation, filing, prosecution and maintenance of the
Collaboration Patent Rights.

 

(b)                                 Cooperation.  Each Party shall make
available to the Party filing, prosecuting or maintaining any Collaboration
Patent Rights, or such Party’s authorized attorneys, agents or representatives,
such of its employees whom such controlling Party in its reasonable judgment
deems necessary in order to assist it in obtaining patent protection for such
Collaboration Patent Rights.

 

(c)                                  Responsibility for Legal Expenses.
Responsibility for Legal Expenses associated with patent prosecution and
maintenance shall be as follows:

 

(i) Momenta Patent Rights/Baxter Patent Rights. Momenta shall be responsible for
and shall pay all Legal Expenses associated with the protection of and related
preparation, filing, prosecution and maintenance of the Patent Rights within the
Momenta Intellectual Property.  Baxter shall be responsible for the protection
of and shall pay all Legal Expenses associated with the protection of and
related preparation, filing, prosecution and maintenance of the Patent Rights
within the Baxter Intellectual Property.

 

(ii) Collaboration Patent Rights. Prior to IND Acceptance, Momenta shall be
responsible for and shall pay all expenses associated with the preparation,
filing, prosecution and maintenance of the Collaboration Patent Rights within
the Collaboration Intellectual Property during that time. Upon IND Acceptance,
each Party shall be responsible for [**] percent ([**]%) of the Legal Expenses
associated with the preparation, filing, prosecution and maintenance of the
Collaboration Patent Rights within the Collaboration Intellectual Property

 

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following IND Acceptance. Following achievement of both IND Acceptance and [**]
for a Product, Baxter shall be responsible for one hundred percent (100%) of the
Legal Expenses associated with the preparation, filing, prosecution and
maintenance of Collaboration Patent Rights within the Collaboration Intellectual
Property for that Product.

 

5.4                               Patent Enforcement/Third Party Infringement.

 

(a)                                 Notice.  Each Party shall promptly report to
the other Party during the Term any known or suspected infringement or
unauthorized use of any of the Baxter Intellectual Property, the Momenta
Intellectual Property or the Collaboration Intellectual Property, licensed
pursuant to Sections 6.1, 6.2(c) or 6.3, as the case may be, of which such Party
becomes aware, and shall provide the other Party with all available evidence
supporting such known or suspected infringement or unauthorized use.

 

(b)                                 Initial Meeting.  Promptly following
notification to the other Party of any known or suspected infringement or
unauthorized use of any of the Baxter Intellectual Property, the Momenta
Intellectual Property or Collaboration Intellectual Property, the JSC shall meet
and shall (i) evaluate the notice of infringement and attempt to agree on the
appropriate course of action and control with respect to enforcement proceedings
and (ii) determine which Party or Parties shall initiate the enforcement action.
As part of the process of determining whether to pursue any Enforcement
Litigation matter (as hereinafter defined), the JSC shall also decide whether or
not to seek injunctive relief and/or post a bond in such Enforcement Litigation

 

(c)                                  JSC-Approved Enforcement Litigation.

 

(i) If the Parties, acting through the JSC, agree to proceed with a patent
enforcement or Third Party infringement litigation matter (including seeking
injunctive relief and/or the posting of a bond) (the “Enforcement Litigation”)
the JSC shall at such meeting discuss in good faith selection of the Party that
will take the lead (the “Lead Party”) in managing such Enforcement Litigation. 
The Party that is not the Lead Party shall be referred to as the “Non-Lead
Party”.  Except as expressly set forth below or as otherwise agreed by the
Parties, [**].

 

(ii) The Lead Party shall select counsel for the Enforcement Litigation and
shall have the right to control the Enforcement Litigation, and the Non-Lead
Party shall join the suit as a co-plaintiff.  The Non-Lead Party shall have the
right to participate in the Enforcement Litigation, and provide input directly
to the Lead Party and Lead Party counsel.  Lead Party counsel shall provide
drafts of proposed court filings to the Non-Lead Party for review reasonably in
advance of filing to facilitate comments, input and exchange of ideas unless
exigent circumstances require immediate action. Input will be provided promptly
to counsel.

 

(iii) The Parties and their counsel shall seek to agree on joint Enforcement
Litigation strategy and pleadings recognizing the importance of alignment to the

 

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Enforcement Litigation.  Counsel to the Parties shall also consult regularly to
discuss Enforcement Litigation plans and strategy and conduct Enforcement
Litigation review meetings as needed, but no less frequently than monthly. The
Lead Party shall give due consideration to the Non-Lead Party’s recommendations
and advice with regard to claims, arguments and strategy in the Enforcement
Litigation; provided, however, that if the Parties are unable to reach agreement
on a particular strategy or pleading, then either Party may immediately escalate
the matter to the Parties’ representatives (in the case of Baxter, to the
President of BioScience and in the case of Momenta to its President) to resolve
the matter.  If the matter cannot be resolved in [**] (or such shorter time
period as may be necessary to meet a court deadline), then the Lead Party shall
have the right to proceed without reaching consensus, and the Non-Lead Party
shall have the right not to join in the Lead Party’s pleadings or arguments but
shall continue to participate to the extent necessary to sustain jurisdiction
and to allow the continued assertion of the Non-Lead Party’s damage claim.

 

(iv) All Legal Expenses related to an Enforcement Litigation matter that is
approved by the JSC with respect to a Product (including any bond expenses and
liability associated with the grant of injunctive relief) and damages resulting
from such Enforcement Litigation shall be allocated between the Parties in
accordance with their respective Allocable Legal Expense Shares.  Further, for
the avoidance of doubt, once the JSC has determined that the Parties shall move
forward with an Enforcement Litigation matter, a Party shall not have the right
to thereafter dissent and become a Passive Party pursuant to Section 5.4(d).

 

(d)                                 Non-JSC-Approved Enforcement Litigation.

 

(i)                                     If the Parties are unable to reach
consensus at the JSC on initiating an Enforcement Litigation matter within [**]
(or a shorter period of time if the circumstances warrant immediate action)
following notification to the other Party of any known or suspected infringement
or unauthorized use of any of the Baxter Intellectual Property, the Momenta
Intellectual Property or the Collaboration Intellectual Property, the Parties
shall vote on the matter at the JSC, and if there is still no consensus, then
the affirmative voting Party, if such Party has the sole ownership of the Patent
Rights at issue or if the enforcement action involves Collaboration Patent
Rights, shall have the sole right and option to determine whether or not to
proceed with any Enforcement Litigation.  If such party determines to proceed
with the Enforcement Litigation, such Party (hereinafter the “Active Party”)
shall have the sole and exclusive right to select counsel for the Enforcement
Litigation initiated by it pursuant to this Section 5.4(d).  The Party that is
not the Active Party shall be referred to herein as the “Passive Party”.

 

(ii)                                  In any Enforcement Litigation brought by
the Active Party pursuant to Section 5.4(d), the Passive Party shall join in
such action as a party at the Active Party’s request in the event that an
adverse party asserts, the court rules or other Laws provide, or the Active
Party determines in good faith, that a court would lack jurisdiction based on
the Passive Party’s absence as a party in such

 

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suit or the lack of participation by the Passive Party would materially
prejudice the Enforcement Litigation; but control of such Enforcement Litigation
shall remain with the Active Party.

 

(iii)                               All Legal Expenses related to an Enforcement
Litigation matter that is not approved by the JSC with respect to a Product
(including any bond expenses and liability associated with the grant of
injunctive relief) and damages resulting from such Enforcement Litigation shall
be allocated between the Parties as follows:

 

(1)                                 The Active Party shall initially be
responsible for and shall pay [**] percent ([**]%) of all Legal Expenses
associated with such Enforcement Litigation and the Passive Party shall
initially be responsible for and shall pay [**] percent ([**]%) of such Legal
Expenses; provided, however, that the maximum aggregate Legal Expenses for which
the Passive Party shall be initially be responsible with respect to any specific
Product shall be equal to the Legal Expense Cap.

 

(2)                                 If the Active Party is ultimately successful
in pursuing the Enforcement Litigation Matter, all Legal Expenses for such
Enforcement Litigation matter and all damages resulting from such Enforcement
Litigation shall be allocated between the Parties in accordance with their
respective Allocable Legal Expense Shares.  [**] for which the [**] is liable
pursuant to this Section 5.4(d)(iii)(2) [**] for which the [**] was liable under
Section 5.4(d)(iii)(1) shall be paid to the [**] in [**] (with [**]) with the
[**] being due within [**] following receipt by the Passive Party of written
notice from the Active Party that it has received the final, unappealable court
order in such Enforcement Litigation matter.

 

(3)                                 For the avoidance of doubt, the intent of
the Parties is that each Party shall [**], as expressly set forth above, of [**]
(or “[**]”) in any Enforcement Litigation matter that is [**] subject to the
following:

 

(A)                               If the Active Party [**] the intent is that
the Active Party shall be responsible for [**] percent ([**]%) of the [**]
Dollars (USD$[**]) of Legal Expenses [**].

 

(B)                               If the Active Party [**] the intent is to
ensure that all Legal Expenses are borne by the Parties [**].

 

(iv)                              Settlement.  Neither Party may settle or
consent to an adverse judgment with respect to a suit, including any settlement
or judgment which affects the scope, validity or enforcement of the other
Party’s Intellectual Property, without the express written consent of such other
Party (such consent not to be unreasonably withheld).  However, the Party
bringing suit may settle or consent to an adverse judgment in any action
described without obtaining consent from the other Party as long as any such
settlement or consent judgment does not

 

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impose a financial obligation upon the other Party, or limit the scope of or
invalidate any intellectual property of the other Party.

 

5.5                               Patent Clearance, Exchange and Defensive
Litigation; Third Party Suits.

 

(a)                                 Patent Clearance, Exchange and Litigation.
Within [**] for each Product, the JSC shall task counsel with developing a
Collaboration plan for freedom to operate.  The plan shall take into
consideration alternative development strategies, licensing strategies, patent
clearance under the BPCI Act patent exchange and litigation process, and other
options that optimize the success of the Product and launch timing.  The JSC
shall meet and attempt to agree at least [**] for Regulatory Approval of a
Product as to the appropriate course of action with respect to the patent
clearance, exchange or litigation proceedings that may arise under the BPCI Act
with respect to each Product.  The Parties acknowledge that the timing for
response to the BPCI Act clearance and exchange is brief and that a lead party
will need to be selected to optimize effectiveness for the patent exchange
process.

 

(b)                                 Third Party Suits. In addition, in the event
that a Third Party shall otherwise make any claim or bring any suit or other
proceeding against a Party, or any of its Affiliates, sublicensees, or
customers, for infringement or misappropriation of any intellectual property
rights with respect to the research, development, making, using selling,
offering for sale, import or export of any Product, the Party that becomes aware
of such claim, suit or other proceeding shall notify the other Party and the
Parties shall promptly convene a meeting of the JSC. All litigation matters
contemplated by this Section 5.5 are hereinafter referred to as “Other
Collaboration Litigation”.

 

(i)                                     The JSC shall consider any potential
Other Collaboration Litigation as a regular agenda item in their meetings and
with the intent of being prepared to act in sufficient time to allow the Parties
to make a timely determination and respond to any such actions.  In connection
therewith, the JSC shall discuss in good faith the coordination of all Other
Collaboration Litigation (including patent exchange activities and litigation
defense) and whether one Party should take the lead in any particular activity
or suit.  The JSC shall also determine, if applicable, whether the Parties [**].

 

(ii)                                  Each Party shall have the right to be
represented by its own counsel in such Other Collaboration Litigation matters
unless the Parties elect to engage counsel jointly. The Parties shall cooperate
in good faith, coordinate their input to counsel, and share drafts of proposed
court filings for review reasonably in advance of filing to facilitate comments,
input and exchange of ideas unless exigent circumstances require immediate
action. Input will be provided promptly to counsel.  The Parties and their
counsel shall seek to agree on joint strategy and pleadings recognizing the
importance of alignment.  Counsel to the Parties shall also consult regularly to
discuss plans and strategy, and have review meetings as needed, but no less than
[**] once the BPCI Act exchange process or other litigation commences.  Each
Party shall give due consideration to the other Party’s recommendations and
advice with regard to claims, arguments and

 

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strategy; however, if the Parties are unable to reach agreement on a particular
strategy or pleading, then either Party may immediately escalate the matter to
the Parties representatives (in the case of Baxter, to the President of
BioScience, in the case of Momenta to its President) to resolve the matter.  If
the matter cannot be resolved in [**] (or such shorter time period as may be
necessary to meet a court deadline), then each Party shall have the right [**],
and each Party shall have the right [**].

 

(c)           JSC-Approved Other Collaboration Litigation.

 

(i)            If the Parties, acting through the JSC, agree to proceed with an
Other Collaboration Litigation matter, the JSC shall at such meeting discuss in
good faith selection of the Party that will take the lead (the “Lead Party”) in
managing such Other Collaboration Litigation.  The Party that is not the Lead
Party shall be referred to as the “Non-Lead Party”.  Except as expressly set
forth below or as otherwise agreed by the Parties, [**].

 

(ii)         The Lead Party shall select counsel for the Other Collaboration
Litigation and shall have the right to control the Other Collaboration
Litigation, and the Non-Lead Party shall have the right to be represented by its
own counsel.  The Non-Lead Party shall have the right to participate in the
Other Collaboration Litigation, and provide input directly to the Lead Party and
Lead Party counsel.  Lead Party counsel shall provide drafts of proposed court
filings to the Non-Lead Party for review reasonably in advance of filing to
facilitate comments, input and exchange of ideas unless exigent circumstances
require immediate action. Input will be provided promptly to counsel.

 

(iii)        The Parties and their counsel shall seek to agree on joint Other
Collaboration Litigation strategy and pleadings recognizing the importance of
alignment to the Other Collaboration Litigation.  Counsel to the Parties shall
also consult regularly to discuss Other Collaboration Litigation plans and
strategy and conduct Other Collaboration Litigation review meetings as needed,
but no less frequently than monthly. The Lead Party shall give due consideration
to the Non-Lead Party’s recommendations and advice with regard to claims,
arguments and strategy in the Other Collaboration Litigation; provided, however,
that if the Parties are unable to reach agreement on a particular strategy or
pleading, then either Party may immediately escalate the matter to the Parties’
representatives (in the case of Baxter, to the President of BioScience and in
the case of Momenta to its President) to resolve the matter.  If the matter
cannot be resolved in [**] (or such shorter time period as may be necessary to
meet a court deadline), then the Lead Party shall have the right to proceed
without reaching consensus, and the Non-Lead Party shall have the right not to
join in the other Lead Party’s pleadings or arguments and to assert its own
claims and defenses.

 

(iv)        All Legal Expenses related to an Other Collaboration Litigation
matter that is approved by the JSC with respect to a Product and damages
resulting from such Other Collaboration Litigation shall be allocated between
the

 

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Parties in accordance with their respective Allocable Legal Expense Shares.
Further, for the avoidance of doubt, once the JSC has determined that the
Parties shall move forward with an Other Collaboration Litigation matter, a
Party shall not have the right to thereafter dissent and become a Passive Party
pursuant to Section 5.5(d); but a Non-Lead Party shall have the right to assert
its own claims and defenses if the Lead Party does not elect to assert such
claims and defenses on behalf of such Party.

 

(d)           Non-JSC-Approved Other Collaboration Litigation.

 

(i)            If the Parties are unable to reach consensus at the JSC on
initiating an Other Collaboration Litigation matter, including the initiation of
the patent exchange process under the BPCI Act, matter within [**] (or a shorter
period of time if the circumstances warrant immediate action) following
notification to the other Party of any known or suspected infringement or
unauthorized use of any of the Baxter Intellectual Property, the Momenta
Intellectual Property or Collaboration Intellectual Property, the Parties shall
vote on the matter at the JSC, [**].  If such party determines to proceed with
the Other Collaboration Litigation, such Party (hereinafter the “Active Party”)
shall have the sole and exclusive right to select counsel for the Other
Collaboration Litigation initiated by it pursuant to this Section 5.5(d).  The
Party that is not the Active Party shall be referred to herein as the “Passive
Party”.

 

(ii)           All Legal Expenses related to an Other Collaboration Litigation
matter that is not approved by the JSC with respect to a Product (including any
bond expenses and liability associated with the grant of injunctive relief) and
damages resulting from such Other Collaboration Litigation shall be allocated
between the Parties as follows:

 

(1)           The Active Party shall initially be responsible for and shall pay
[**] percent ([**]%) of all Legal Expenses associated with such Other
Collaboration Litigation and the Passive Party shall initially be responsible
for and shall pay [**] percent ([**]%) of such Legal Expenses; provided,
however, that the maximum aggregate Legal Expenses for which the Passive Party
shall be initially be responsible with respect to any specific Product shall be
equal to the Legal Expense Cap.

 

(2)           If the Active Party is [**], all Legal Expenses for such Other
Collaboration Litigation matter and all damages resulting from such Other
Collaboration Litigation shall be [**] for which the [**] is liable pursuant to
this Section 5.5(d)(ii)(2) [**] for which the [**] was liable under Section
5.5(d)(ii)(1) shall be paid to the [**] in [**] (with [**]) with the [**] being
due within [**] following receipt by the Passive Party of written notice from
the Active Party that it has receive the final, unappealable court order in such
Other Collaboration Litigation matter.

 

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(3)           For the avoidance of doubt, the intent of the Parties is that each
Party shall [**] (or “[**]”) in any Other Collaboration Litigation matter that
is [**] subject to the following:

 

(A)          If the Active Party [**] the intent is that the Active Party shall
be responsible for [**] percent ([**]%) of the first [**] Dollars (USD$[**]) of
Legal Expenses [**].

 

(B)           If the Active Party [**] the intent is to ensure that all Legal
Expenses are borne by the Parties [**].

 

5.6           Citizen’s Petitions and Citizen Petition Litigation.  The JSC
shall review and agree on the appropriate course of action with respect to
citizen’s petition proceedings and litigation. The Parties agree that all Legal
Expenses associated with citizen’s petition proceedings shall be allocated
according to the Parties’ respective Allocable Legal Expense Shares.

 

5.7           Patent Term Extensions.  The Parties shall cooperate, if necessary
and appropriate, with each other in gaining patent term extensions wherever
applicable to Patent Rights controlled by either Party that cover a Product. 
The Parties shall use reasonable efforts to agree upon a joint strategy relating
to patent term extensions, but, in the absence of mutual agreement with respect
to any extension issue, the Patent Rights or the claims of the Patent Rights
shall be selected, by the Party owning or controlling the Patent Rights, on the
basis of the scope, enforceability and remaining term of the Patent Right in the
relevant jurisdiction.  All filings for such extensions shall be made by the
Party owning or controlling such Patent Rights.

 

5.8           Patent Marking.  Baxter shall be responsible for complying with
patent marking statutes in the applicable country in the Territory in which a
Product is sold by Baxter, its Affiliates or its sublicensees.

 

5.9           Participation of Other Persons in the Collaboration. Except as the
Parties may otherwise agree in writing, each of Baxter and Momenta shall be
responsible for executing an appropriate agreement with each employee,
individual contractor, consultant or agent (including, for purposes of clarity,
individuals who regularly work for Affiliates of Baxter or Momenta), as well as
Third Parties working on their respective behalves on the Collaboration,
including a provision requiring such employee, individual contractor,
consultant, agent, or Third Party to assign to Baxter or Momenta, respectively,
all Know-How and Patent Rights which he or she develops or conceives and/or
reduces to practice in the course of his or her work on the Collaboration so
that such Know-How and Patent Rights are Controlled by Baxter or Momenta,
respectively.  Each Party shall use Commercially Reasonable and Diligent Efforts
to enforce the terms of their respective agreements described in this Section
5.9.  Upon written request, each Party shall make available to the other Party
copies of any material agreements with contractors or other Third Parties with
respect to Third Party Payments authorized by the JSC under Section 4.4.

 

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5.10         Disclosure of Know-How.

 

(a)           In connection with the activities contemplated by this Agreement,
the Parties anticipate that certain Know-How will be disclosed between the
Parties. In order to keep accurate records of what each Party considers to be
its Know-How, and for the Parties to monitor their obligations with respect to
such Know-How, the Parties shall establish an electronic registry (the “Know-How
Database Registry”) accessible to both Parties.

 

(b)           Each Party shall designate a Know-How Database Registry manager,
whose responsibility it will be to [**]. Each entry shall [**].  Upon entry of a
document into the Know-How Database Registry, the Know-How Database Registry
manager for the entering Party shall [**]. Such notification shall be through an
email sent either by the entering Party’s Know-How Database Registry manager or
through an automated system wherein an email is sent by the Know-How Database
Registry following entry of the document.

 

(c)           The reviewing Party’s Know-How Database Registry manager shall
have [**], and either [**]; however, in the case of Technology Transfer
documentation, the reviewing Party’s Know-How Database Registry manager shall
have [**], due to the large amount of documents in the Technology Transfer
documentation. If the reviewing Party [**], such document shall be deemed
Know-How of the entering Party. If the reviewing Party [**], the reviewing Party
shall provide written notice to [**] shall be entered in the Know-How Database
Registry referencing the [**].

 

(d)           At such time as the Parties have [**], the original entering Party
shall respond to the [**] provided in the Know-How Database Registry.  The
Parties shall discuss in a timely manner the [**] shall be entered into the
Know-How Database Registry.  If the Parties are not able to [**] of the entering
party, the dispute shall be resolved by senior management of the Parties and if
senior management is not able to come to a prompt resolution, the dispute shall
be resolved pursuant to the terms set forth in Section 12.11.

 

ARTICLE 6.
LICENSES; CHARACTERIZATION OPTION AND EXCLUSIVITY

 

6.1           Licenses to Baxter.

 

(a)           Development License.  Subject to the terms and conditions of this
Agreement, Momenta hereby grants to Baxter, a co-exclusive (co-exclusive with
Momenta), right and license, in the Field, in the Territory under the Momenta
Intellectual Property solely to perform its activities under the applicable
Product Work Plan(s) and Commercialization Plan(s) to Develop and Commercialize
the Products.

 

(b)           Product License.  Subject to the terms and conditions of this
Agreement (to the extent this Section 6.1(b) conflicts with Section 6.1(a)
above, this Section 6.1(b) shall control), Momenta hereby grants to Baxter, an
exclusive, right and license, in the Field, in the Territory, with the right to
grant sublicenses solely as agreed to by the Parties, under the Momenta
Intellectual Property solely to (i) make (and have made), use,

 

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and import the Products for commercial sale and (ii) sell, offer for sale and
have sold the Products.

 

(c)           Covenant.  Baxter shall use such Momenta Intellectual Property
solely for the purposes of exercising its rights and performing its obligations
under this Agreement.

 

6.2           Licenses to Momenta.

 

(a)           Commercialization License.  Subject to the terms and conditions of
this Agreement, Baxter hereby grants to Momenta, a co-exclusive (co-exclusive
with Baxter), right and license, in the Field, in the Territory, under the
Baxter Intellectual Property solely to (i) perform its activities under the
applicable Product Work Plan(s) to Develop the Products and (ii) to the extent
Momenta has rights to Commercialize the Products pursuant to Section 2.7(b) to
perform its activities under the applicable Commercialization Plan.

 

(b)           Development License. Subject to the terms and conditions of this
Agreement (to the extent this Section 6.2(b) conflicts with Section 6.2(a)
above, this Section 6.2(b) shall control), Baxter hereby grants to Momenta, an
exclusive right and license, in the Field, in the Territory, with the right to
grant sublicenses solely as agreed to by the Parties, under the Baxter
Intellectual Property solely to make (and have made), use, and import the
Products for Development.

 

(c)           Covenant.  Momenta shall use such Baxter Intellectual Property
solely for the purposes of exercising its rights and performing its obligations
under this Agreement.

 

6.3           Collaboration Intellectual Property Cross License.  Each Party
grants to the other Party a non-exclusive, royalty-free, worldwide right and
license, with the right to grant sublicenses, to practice the Collaboration
Intellectual Property outside the scope of the Collaboration.

 

6.4           In-Licensed Technology. After the Effective Date, if either Party,
its Affiliates, or sublicensees identify the need for, or are otherwise offered,
a license, covenant not to sue or similar rights to Third Party Patent Rights or
Know-How that such Party or its Affiliates in good faith believes are (a)
necessary to avoid infringement or misappropriation of such Third Party Patent
Right or Know-How based on the Development or Commercialization of the
applicable Product or (b) necessary or useful for the Development or
Commercialization of the applicable Product, prior to commencing negotiations or
entering into an agreement with respect to any such Third Party license or
covenant, such Party shall promptly notify the other Party.  The Parties shall
thereafter conduct good faith discussions, by way of the JSC, regarding whether
such Third Party Patent Rights or Know-How are necessary or useful for the
Development and Commercialization of the Product. The Parties shall agree on
which Party shall negotiate the license, including any associated Third Party
Payments, provided, however, that no definitive license agreement shall be
signed by either Party with regard to such rights without the other Party’s
written consent, which shall not be unreasonably withheld or delayed.

 

6.5           Retained Rights.  Any rights of Momenta not expressly granted to
Baxter under the provisions of this Agreement shall be retained by Momenta and
any rights of Baxter not

 

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expressly granted to Momenta under the provisions of this Agreement shall be
retained by Baxter.

 

6.6           Exclusive Collaboration.  During the Term of the Agreement,
Momenta and Baxter each agree, respectively, that they shall, and shall ensure
that their respective Affiliates and sublicensees shall, collaborate exclusively
on the Development and Commercialization of the Products and shall not develop
or sell a Competing Product to a Product on their own behalf or on behalf of a
Third Party. Should a Party fail to comply with this Section 6.6, such failure
shall be deemed a material breach of the Agreement, providing the non-breaching
Party with the right to terminate the Agreement with respect to the Product for
which the Competing Product was developed.

 

6.7           Protection of Baxter Proprietary Information.  In connection with
its Development Activities in the Collaboration, Momenta will have access to
Baxter’s proprietary technology relating to [**].  Such [**] is primarily
related to the methods used to develop and commercialize [**].  In order to
protect Baxter’s proprietary information, during the Term of the Agreement and
for a period of [**] thereafter, Momenta agrees [**].

 

6.8           Bankruptcy.  All rights and licenses granted under or pursuant to
any Section of this Agreement are, and shall otherwise be deemed to be, for
purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to
“intellectual property” as defined under Section 101(35A) of the U.S. Bankruptcy
Code.  The Parties shall retain and may fully exercise all of their respective
rights and elections under the U.S. Bankruptcy Code.  Upon the bankruptcy of a
Party, the non-bankrupt Party shall further be entitled to a complete duplicate
of (or complete access to, as appropriate) any such intellectual property, and
such, if not already in its possession, shall be promptly delivered to the
non-bankrupt Party, unless the bankrupt Party elects to continue, and continues,
to perform all of its obligations under this Agreement.

 

ARTICLE 7.
CONFIDENTIAL INFORMATION

 

7.1           Confidentiality.  Except as contemplated by this Agreement, each
Party shall hold in confidence and shall not publish or otherwise disclose and
shall not use for any purpose (a) any Confidential Information of the other
Party disclosed to it pursuant to the terms of this Agreement, (b) the terms of
this Agreement, and (c) the transactions contemplated hereby until ten (10)
years after the expiration or termination of this Agreement.  The members of the
JSC and any Sub-Committees shall use pricing and other competitive commercial
information provided by the other Party solely for purposes of the Collaboration
and shall not share such information more broadly within their organizations.

 

7.2           Public Disclosure. The Parties have attached hereto as Exhibit
7.2, a mutually acceptable press release announcing the Collaboration (the
“Initial Press Release”).  The JSC shall review, from time to time, proposed
disclosures of the Parties and consent for such disclosures shall not be
unreasonably withheld.  Except as otherwise required by Law (as reasonably
determined by counsel) and with respect to JSC approved disclosures, as well as
the Initial Press Release as agreed upon between the Parties, neither Party
shall issue a press release or make any other public disclosure of the terms of
this Agreement without the prior approval of

 

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such press release or public disclosure by the other Party.  Each Party shall
submit any such press release or public disclosure to the other Party, and the
receiving Party shall have five (5) business days from receipt to review and
approve any such press release or public disclosure, which approval shall not be
unreasonably withheld.  If the receiving Party does not respond to the other
Party within such five (5) business day period, the press release or public
disclosure shall be deemed approved.  In addition, if a public disclosure is
required by Law, including without limitation in a filing with the Securities
and Exchange Commission, the disclosing Party shall provide copies of the
disclosure reasonably in advance of such filing or other disclosure for the
non-disclosing Party’s prior review and comment.  The first approval of the
contents of a press release or public disclosure shall constitute permission to
use such contents subsequently without submission of the press release or public
disclosure to the other Party for approval.

 

7.3           Legally Required Disclosures.  If the receiving Party or any of
its representatives is required by law, rule or regulation or by order of a
court of law, administrative agency, or other governmental body to disclose any
of the Confidential Information, the receiving Party will (a) promptly provide
the disclosing Party with reasonable advance written notice to enable the
disclosing Party the opportunity to seek, where appropriate, a protective order
or to otherwise prevent or limit such legally required disclosure, (b) use
Commercially Reasonable Efforts to cooperate with the disclosing Party to obtain
such protection, and (c) disclose only the legally required portion of the
Confidential Information.  Any such legally required disclosure will not relieve
the receiving Party from its obligations under this Agreement to otherwise limit
the disclosure and use of such information as Confidential Information.

 

7.4           Confidential Terms.  Except as expressly provided herein, each
Party agrees not to disclose any terms of this Agreement to any Third Party
without the consent of the other Party; provided, however, that disclosures may
be made on a strict need to know basis to actual or prospective investors,
acquirers, financing sources or licensees, or to a Party’s accountants,
attorneys and other professional advisors.

 

7.5           Regulatory Disclosures. With respect to a Product, each of the
Parties agrees to share, upon request, its relevant data from laboratory,
preclinical and clinical studies conducted in support of the regulatory filings
for the Development, approval and marketing of such Product with the other Party
and its Affiliates and sublicensees on a royalty-free basis, provided, however,
that any data so transferred shall be used by the receiving Party and its
Affiliates and sublicensees solely for the purposes authorized under this
Agreement.  Except as set forth in the preceding sentence, if an Affiliate or
sublicensee of a Party shall fail to agree to a reciprocal data sharing
arrangement, such Affiliate or sublicensee, as the case may be, shall not be
entitled to receive the data of the other Party or its Affiliates or
sublicensees.  Each Party agrees to grant to the other the right to
cross-reference any regulatory filing made by a Party with regard to a Product
or any Regulatory Approval received by a Party with regard to a Product as the
other Party believes may be useful or necessary for it to obtain approval to
distribute and sell such Product, consistent with the terms of this Agreement.

 

7.6           Prior Confidentiality Agreements. The Parties are parties to a
Mutual Confidential Disclosure Agreement dated [**], as amended and a Community
of Interest Letter dated [**], as amended on [**] (collectively, the “Prior
Confidentiality Agreements”). The following shall be considered Confidential
Information hereunder, subject to the exceptions in Section 1.26:  (a) all

 

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Confidential Information (as that term is defined in the Prior Confidentiality
Agreements disclosed pursuant to the Prior Confidentiality Agreements, and (b)
the Position Statements (as that term is defined in the Community of Interest
Letter referenced above), which, notwithstanding anything in this Agreement to
the contrary, shall also remain subject to the provisions of Section 3 of such
Community of Interest Letter.

 

ARTICLE 8.
INDEMNIFICATION AND LIMITATION OF LIABILITY

 

8.1           Baxter Indemnification.  Baxter agrees to defend Momenta and its
Affiliates, and their respective agents, directors, officers and employees (the
“Momenta Indemnitees”), at Baxter’s cost and expense, and will indemnify and
hold harmless the Momenta Indemnitees from and against any and all Third Party
product liability related losses, costs, damages, fees or expenses
(collectively, “Momenta Losses”) arising out of any act or omission of Baxter,
its Affiliates, sublicensees, contractors or agents in connection with the
development, use, manufacture, distribution or sale of a Product, including, but
not limited to, any actual or alleged injury, damage, death or other consequence
occurring to any person claimed to result, directly or indirectly, from the
possession, use or consumption of, or treatment with, a Product, whether claimed
by reason of breach of warranty, negligence, product defect or otherwise, and
regardless of the form in which any such claim is made, provided that the
foregoing indemnity shall not apply to the extent that any such Momenta Losses
are attributable to (a) the material breach by Momenta of this Agreement or any
applicable Work Plan, or (b) the gross negligence or willful misconduct of the
Momenta Indemnitees.  In the event of any such claim against any Momenta
Indemnitee, Momenta shall promptly notify Baxter in writing of the claim and
Baxter shall manage and control, at its sole expense, the defense of the claim
and its settlement. Notwithstanding the foregoing no settlements shall be
finalized without obtaining Momenta’s prior written consent, which shall not be
unreasonably withheld, except that in the case of a settlement that does not
require an admission or action on the part of Momenta, and does not harm Momenta
or its ability to comply with its obligations hereunder, Momenta’s consent shall
not be required so long as Momenta is unconditionally released from all
liability in such settlement.  Momenta shall cooperate with Baxter and may, at
its option and expense, be represented in any such action or proceeding. Baxter
shall not be liable for any settlements, litigation costs or expenses incurred
by Momenta Indemnitees without Baxter’s written authorization.

 

8.2           Momenta Indemnification.  Momenta agrees to defend Baxter and its
Affiliates, and their respective agents, directors, officers and employees (the
“Baxter Indemnitees”), at Momenta’s cost and expense, and will indemnify and
hold harmless the Baxter Indemnitees from and against any and all Third Party
product liability related losses, costs, damages, fees or expenses
(collectively, “Baxter Losses”) arising out of any act or omission of Momenta,
its Affiliates, sublicensees, contractors or agents in connection with the
development, use, manufacture, distribution or sale of a Product, including, but
not limited to, any actual or alleged injury, damage, death or other consequence
occurring to any person claimed to result, directly or indirectly, from the
possession, use or consumption of, or treatment with, a Product, whether claimed
by reason of breach of warranty, negligence, product defect or otherwise, and
regardless of the form in which any such claim is made, provided that the
foregoing indemnity shall not apply to the extent that any such Baxter Losses
are attributable to (a) Baxter’s material breach of

 

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this Agreement or an applicable Work Plan, or (b) the gross negligence or
willful misconduct of the Baxter Indemnitees.  In the event of any such claim
against any Baxter Indemnitee, Baxter shall promptly notify Momenta in writing
of the claim and Momenta shall manage and control, at its sole expense, the
defense of the claim and its settlement. Notwithstanding the foregoing no
settlements shall be finalized without obtaining Baxter’s prior written consent,
which shall not be unreasonably withheld, except that in the case of a
settlement that does not require an admission or action on the part of Baxter,
and does not harm Baxter or its ability to comply with its obligations
hereunder, Baxter’s consent shall not be required so long as Baxter is
unconditionally released from all liability in such settlement.  Baxter shall
cooperate with Momenta and may, at its option and expense, be represented in any
such action or proceeding. Momenta shall not be liable for any settlements,
litigation costs or expenses incurred by Baxter Indemnitees without Momenta’s
written authorization.

 

8.3           Insurance.  Each Party shall maintain insurance, including product
liability insurance, with respect to its activities under this Agreement.  Such
insurance shall be in such amounts and subject to such deductibles as are
prevailing in the industry from time to time, provided that, each Party shall
maintain a minimum of an aggregate of [**] Dollars (USD$[**]) in general
comprehensive liability insurance and an aggregate of: (a) [**] Dollars
(USD$[**]) in product liability insurance [**] and (b) [**] Dollars (USD$[**])
in product liability insurance no later than [**] days following [**].

 

8.4           No Consequential Damages.  UNLESS RESULTING FROM A PARTY’S WILLFUL
MISCONDUCT OR FROM A PARTY’S BREACH OF Article 6 OR Article 7, NO PARTY WILL BE
LIABLE TO THE OTHER PARTY OR ITS AFFILIATES FOR SPECIAL, INCIDENTAL,
CONSEQUENTIAL, EXEMPLARY, PUNITIVE, MULTIPLE OR OTHER INDIRECT DAMAGES ARISING
OUT OF THIS AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER, OR FOR LOSS OF
PROFITS, LOSS OF DATA OR LOSS OF USE DAMAGES ARISING FROM OR RELATING TO ANY
BREACH OF THIS AGREEMENT WHETHER BASED UPON WARRANTY, CONTRACT, TORT, STRICT
LIABILITY OR OTHERWISE, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES.  NOTHING IN
THIS SECTION 8.4 IS INTENDED TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR
OBLIGATIONS OF ANY PARTY UNDER THIS AGREEMENT.

 

ARTICLE 9.
EXPORT

 

9.1           General.  The Parties acknowledge that the exportation from the
U.S. of materials, products and related technical data (and the re-export from
elsewhere of U.S. origin items) may be subject to compliance with U.S. export
laws, including without limitation the U.S. Bureau of Export Administration’s
Export Administration Regulations, the Federal Food, Drug and Cosmetic Act and
regulations of the FDA issued thereunder, and the U.S. Department of State’s
International Traffic and Arms Regulations which restrict export, re-export, and
release of materials, products and their related technical data, and the direct
products of such technical data.  The Parties agree to comply with all exports
laws and to commit no act that, directly or indirectly, would violate any U.S.
law, regulation, or treaty, or any other international treaty or

 

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agreement, relating to the export, re-export, or release of any materials,
products or their related technical data to which the U.S. adheres or with which
the U.S. complies.

 

9.2           Delays.  The Parties acknowledge that they cannot be responsible
for any delays attributable to export controls that are beyond the reasonable
control of either Party.

 

9.3           Assistance.  The Parties agree to provide assistance to one
another in connection with each Party’s efforts to fulfill its obligations under
this Article 9.

 

9.4           Other.  The Parties agree not to export, re-export, or release any
item that may be used in the design, development, production, stockpiling or use
of chemical or biological weapons in or by a country listed in Country Group D:
3 of Part 370 to Title 15 of the U.S.  Code of Federal Regulations as it may be
updated from time to time.

 

ARTICLE 10.
DEFAULT OR TERMINATION

 

10.1         Term.  This Agreement shall be binding upon the Parties as of the
Effective Date.  The term of this Agreement (the “Term”) shall commence on the
Execution Date, unless earlier terminated as provided in this Article 10 (the
date of any such termination, the “Termination Date”), shall continue in full
force and effect, on a country-by-country and Product-by-Product basis until
there is no remaining royalty, Profit Share or other payment obligation in such
country with respect to such Product, at which time this Agreement shall expire
in its entirety with respect to such Product in such country.

 

10.2         Termination by Baxter for Convenience.  Baxter shall have the right
to terminate the Agreement in whole or on a Product-by-Product basis at any time
by providing written notice to Momenta.

 

(a)           Termination following IND Acceptance. In the event Baxter elects
to terminate the Agreement with respect to a Product within the sixty (60) day
period following IND Acceptance of such Product, Baxter shall provide six (6)
months prior written notice to Momenta.

 

(b)           Termination prior to Phase II Clinical Trial or Phase III Clinical
Trial.  In the event Baxter elects to terminate the Agreement with respect to a
Product more than sixty (60) days following IND Acceptance of such Product but
before there is the first dosing in humans in a Phase II Clinical Trial or Phase
III Clinical Trial for such Product, Baxter shall provide nine (9) months prior
written notice to Momenta.

 

(c)           Termination Prior to First Regulatory Approval. In the event
Baxter elects to terminate the Agreement with respect to a Product following the
first dosing in humans in a Phase II Clinical Trial or Phase III Clinical Trial
for such Product, but prior to the first Regulatory Approval of the Product,
Baxter shall provide twelve (12) months prior written notice to Momenta.

 

(d)           Termination Following Regulatory Approval. In the event Baxter
elects to terminate the Agreement with respect to a Product following the first
Regulatory

 

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Approval of such Product, Baxter shall provide twelve (12) months prior written
notice to Momenta.

 

(e)           Partial Termination. In the event Baxter elects to terminate the
Agreement with respect to one or more Products (but not the Agreement in whole)
under this Section 10.2, Baxter’s obligations will be as set forth in
Section 10.6, and Momenta shall thereafter have the right, subject to the terms
of this Agreement including, to the extent applicable, the limited licenses
granted herein, to research, develop, manufacture, commercialize or license a
Third Party to research, develop, manufacture, or commercialize such terminated
Product(s).

 

10.3        Termination of Agreement by Momenta for Baxter’s Termination of the
Initial Products. Momenta shall have the right to terminate the Agreement in its
entirety if Baxter elects to terminate both Initial Products prior to IND
Acceptance by providing written notice to Baxter. Momenta shall thereafter have
the right, subject to the terms of this Agreement including, to the extent
applicable, the limited licenses granted herein, to research, develop,
manufacture, or commercialize or license a Third Party to research, develop,
manufacture or commercialize such former Initial Products.

 

10.4        Termination of Agreement for Breach of Material Obligation.  Each
Party shall have the right to terminate the Agreement in whole or on a
Product-by-Product basis, as well on a country-by-country basis for breach of
material obligations as follows:

 

(a)           Except as provided for in Section 10.4(b) below, but subject to
Section 2.7(b) and 2.7(c) above, in the event that a Party shall have breached
or defaulted in the performance of any of its material obligations hereunder and
such breach or default shall continue for a period of [**] days after written
notice of such breach and the intent to terminate is provided to the breaching
Party by the non-breaching Party, the non-breaching Party shall have the right,
but not the obligation, to terminate this Agreement (or, as set forth in
Section 6.6, the relevant Product) effective upon a second written notice to the
breaching Party following the failure of the breaching Party to cure such breach
or default during the [**] day period following the first written notice from
the non-breaching Party.

 

For the avoidance of doubt, Baxter’s failure to perform its obligations pursuant
to Section 4.2(a) with respect to either GMP manufacturing or clinical (in
human) studies shall constitute a material breach of the Agreement.

 

(b)           Subject to Section 2.7(b) and (c), in the event that an alleged
breach or default pertains to a failure to exercise Commercially Reasonable
Efforts, the [**] day notice period in paragraph (a) above shall not commence
until the following additional resolution process is not completed successfully:

 

(i) [**] days after a Party (the “Alleging Party”) alleges a failure of the
other Party to exercise Commercially Reasonable Efforts (the “Alleged Breaching
Party”), the Alleged Breaching Party shall provide a written objective plan that
documents how the Alleged Breaching Party either is performing its obligations

 

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under the Agreement or will within the next [**] be performing its obligations
in accordance with its duty to exercise Commercially Reasonable Efforts.

 

(ii) If the Alleging Party is not satisfied that the written plan objectively
resolves the allegations, then the Alleging Party can elect to proceed under
paragraph (a) without further resolution under this paragraph (b).

 

10.5        Termination for Bankruptcy.  To the extent permitted under
applicable Law, either Party may terminate this Agreement effective immediately
with written notice if the other Party shall file for bankruptcy, shall be
adjudicated bankrupt, shall file a petition under insolvency Laws, shall be
dissolved or shall have a receiver appointed for substantially all of its
property.

 

10.6        Consequences of Termination.

 

(a)           Without limiting any other legal or equitable remedies that either
Party may have, if this Agreement or a Product under the Agreement is terminated
by Baxter pursuant to Section 10.2, by Momenta pursuant to Section 10.3, or is
the result of a termination by Momenta for material breach by Baxter under
Section 10.4, bankruptcy by Baxter under Section 10.5, or force majeure
affecting Baxter under Section 12.6, the following provisions will take effect
as of the effective date of such termination:

 

(i) Baxter will, using Commercially Reasonable Efforts, promptly
[**](A) possession and ownership of all [**] reasonably necessary for and
primarily related to the Development, manufacture or Commercialization of the
terminated Product(s), (B) copies of all [**] reasonably necessary for and
primarily related to the Development, manufacture or Commercialization of the
terminated Product(s), including all [**] relating to the terminated Product(s),
and (C) all [**] containing Confidential Information of Momenta; provided,
however, that Baxter shall be entitled to retain one copy of all such
Confidential Information for purposes of determining its obligations under this
Agreement;

 

(ii) Baxter will either (A) appoint [**] as Baxter’s and/or its Affiliates’
agent for all terminated Product-related matters involving Regulatory
Authorities; (B) serve as [**]; or (C) [**] for the period of time after
termination necessary to allow for an orderly transition of the regulatory file
or Regulatory Approval.  Momenta agrees to use Commercially Reasonable Efforts
to limit this obligation as is practicable under the circumstances;

 

(iii) If, at the time of termination, Baxter is then-currently performing
process development or manufacturing activities for the terminated Products,
Baxter shall upon Momenta’s written request for a reasonable period of time [**]
following receipt of written termination notice) and subject to Momenta’s
agreement to [**], as applicable) associated therewith: (A) continue to perform
such process development activities and/or manufacturing activities for the
terminated Product(s) and/or (B) use good faith reasonable efforts to effect a
transfer of such activities to Momenta or a Third Party.  If Momenta so
requests,

 

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Baxter will assign to Momenta any agreements with Third Parties reasonably
necessary for and primarily relating to the Development, manufacture or
Commercialization of the terminated Product(s) to which Baxter is a party to the
extent permitted by the terms of such agreements; provided, however, that Baxter
shall not be obligated to pay any amounts to the counterparty or to any Third
Party in connection with such assignment;

 

(iv) Except as set forth below in Section 10.6(c), the licenses granted to
Baxter and Momenta pursuant to Article 6 will terminate (except to the extent
necessary to enable Baxter to perform its obligations under this Section 10.6);
provided, however, that if the Agreement is terminated by Momenta pursuant to
Section 10.4 due to Baxter’s breach, (A) the licenses granted to Momenta under
Sections 6.2 and 6.3 will survive for all Baxter Intellectual Property existing
as of the date of termination and (B) Baxter shall grant Momenta (1) a [**]
non-exclusive, sublicenseable [**] license under the Baxter Intellectual
Property existing as of the date of termination and (2) an exclusive,
sublicenseable license under the Collaboration Intellectual Property to make,
have made, use, import, sell and have sold the terminated Products.  Momenta
shall have the right to prosecute and enforce any exclusively licensed
Collaboration Patent Rights.  [**] shall [**] of each Product which, but for the
licenses granted hereunder, would infringe the [**] existing as of the
Termination Date.  The [**] shall be determined by the occurrence or
non-occurrence of the events set forth in Section 10.6(c) but shall be [**]
percent ([**]%) [**] set forth therein, and similarly shall [**] set forth in
clauses (i), (ii) and (iii) of Section 10.6.(c).

 

(v) Baxter will assign to Momenta all right, title and interest in the
trademark(s) for the terminated Products and all goodwill associated therewith.

 

(vi) Baxter will, at Momenta’s sole cost and expense, reasonably cooperate with
Momenta, if requested, to transition all Clinical Development activities
initiated by Baxter prior to the Termination Date;

 

(vii) Baxter shall submit payment to Momenta for any amounts paid by Momenta
related to clinical (human) studies, GMP manufacturing activities, Development
Expenses and Commercialization Costs incurred through the Termination Date for
which Baxter is responsible for under the Agreement, and any milestones achieved
as of the date of termination within sixty (60) days following receipt from
Momenta of a detailed invoice therefore; and

 

(viii) Baxter will, at Momenta’s sole cost and expense, return to Momenta all
inventory of terminated Product in its possession as of the date of termination.

 

In addition, Momenta shall reimburse Baxter for [**] with the performance of the
activities under subsections (i) and (ii), above.

 

(b)           Without limiting any other legal or equitable remedies that either
Party may have, if this Agreement or a Product under the Agreement is terminated
by Baxter as

 

53

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a result of a material breach by Momenta under Section 10.4, the following
provisions will take effect as of the effective date of such termination:

 

(i) Momenta will, as soon as practicable, transfer to Baxter or its designee
(A) copies of all data, reports, records and cell line materials in Momenta’s
possession or control relating to the Development, manufacture or
Commercialization of the terminated Product(s), including all non-clinical and
clinical data relating to the terminated Product(s), cell lines and (B) all
records and materials in Momenta’s possession or control containing Confidential
Information of Baxter; and

 

(ii) The licenses granted to Momenta in Article 6 will terminate and the
licenses and rights granted to Baxter under Article 6 will survive in accordance
with their terms and subject to payment obligations set forth in Article 4.

 

(c)           Termination Without Cause Reimbursement.  If the Agreement or a
Product was terminated by Baxter pursuant to Section 10.2, the licenses granted
to Momenta under Sections 6.2 and 6.3 will survive for all Baxter Intellectual
Property existing as of the date of termination and Baxter shall grant Momenta a
[**], non-exclusive, sublicenseable (subject to the prior written consent of
Baxter which consent shall not be unreasonably withheld, conditioned or delayed)
license under the Baxter Intellectual Property existing as of the date of
termination and an exclusive, sublicenseable license under the Collaboration
Intellectual Property to make, have made, use, import, sell and have sold the
terminated Products pursuant to the following terms:

 

(i)            In the event Baxter terminates the Agreement with respect to a
Product [**] of such Product as provided for at Section 10.2(b), Momenta shall
[**] of such Product, [**] Baxter’s Development Expenses with respect to the
Development of such Product, [**].

 

(ii)           In the event Baxter terminates the Agreement with respect to a
Product [**] of such Product as provided for at Section 10.2(c) herein, Momenta
shall [**] Baxter’s Development Expenses and Commercialization Costs with
respect to the Development and Commercialization of such Product, [**].

 

(iii)          In the event Baxter terminates the Agreement with respect to a
Product following [**] of such Product as provided for at
Section 10.2(d) herein, Momenta shall [**] of such Product, [**] Baxter’s
Development Expenses and Commercialization Costs [**] with respect to the
Development and Commercialization of such Product, [**].

 

10.7        Non-Exclusive Remedy.  Termination of this Agreement shall be in
addition to, and shall not prejudice, the Parties’ remedies at Law or in equity,
including, without limitation, the Parties’ ability to receive legal damages
and/or equitable relief with respect to any breach of this Agreement, regardless
of whether or not such breach was the reason for the termination.

 

10.8        Survival of Liability.  Expiration or termination of this Agreement
for any reason shall not release either Party from any liability that, at the
time of such expiration or termination,

 

54

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has already accrued or that is attributable to a period prior to such expiration
or termination, nor preclude either Party from pursuing any right or remedy it
may have hereunder or at Law or in equity with respect to any breach of this
Agreement.

 

10.9        Survival.  Upon termination of the Agreement as allowed for in this
Article 10, the following sections of this Agreement shall survive: Article 1;
Article 6 (to the extent provided for in Article 10); Article 7; Article 8;
Article 9; Article 12; Section 4.2 (to the extent payments are earned but have
not been paid prior to termination); Section 4.3 (to the extent following
termination Sections 5.3, 5.4, 5.5 and 5.6 survive); Section 4.4 (to the extent
Third Party Payments accrue prior to termination); Section 4.5 (to the extent a
milestone is earned but has not been paid prior to termination); Section 4.6 (to
the extent Royalties are earned but have not been paid prior to termination);
Section 4.7 (to the extent accrued but not paid prior to termination);
Section 4.9; Section 4.10 (with respect to actions and performance occurring
prior to the Termination Date); Section 4.11, Section 4.12; Section 5.1,
Section 5. 2, Section 5.3; Section 5.4 (with respect to Enforcement Litigation
initiated prior to termination); Section 5.5 (with respect to Other
Collaboration Litigation initiated prior to termination); Section 5.6 (with
respect to Citizen’s Petitions proceedings initiated prior to termination);
Section 5.7; Section 5.8; Section 6.5; Section 6.7; Section 6.8;
Section 10.2(e); Section 10.3, Section 10.4; Section 10.5; Section 10.6;
Section 10.7; Section 10.8; Section 10.9 ; and Exhibit 12. 11,

 

ARTICLE 11.
REPRESENTATIONS, WARRANTIES AND COVENANTS

 

11.1        Momenta.  Momenta represents and warrants that, as of the Execution
Date: (a) it has the full right, power and authority to enter into this
Agreement and to grant the rights and licenses granted by it hereunder; (b) to
the knowledge of Momenta, there are no existing or threatened actions, suits or
claims pending with respect to the subject matter hereof or the right of Momenta
to enter into and perform its obligations under this Agreement; (c) it has taken
all necessary action on its part to authorize the execution and delivery of this
Agreement and the performance of its obligations hereunder; (d) this Agreement
has been duly executed and delivered on behalf of it, and constitutes a legal,
valid, binding obligation, enforceable against it in accordance with the terms
hereof; and (e) the execution and delivery of this Agreement and the performance
of its obligations hereunder do not conflict with or violate any requirement of
applicable Laws or regulations and do not conflict with, or constitute a default
under, any contractual obligation of it.

 

11.2        Baxter.  Baxter represents and warrants that as of the Execution
Date: (a) it has the full right, power and authority to enter into this
Agreement and to grant the licenses granted by it hereunder; (b) to the
knowledge of Baxter, there are no existing or threatened actions, suits or
claims pending with respect to the subject matter hereof or the right of Baxter
to enter into and perform its obligations under this Agreement; (c) it has taken
all necessary action on its part to authorize the execution and delivery of this
Agreement and the performance of its obligations hereunder; (d) this Agreement
has been duly executed and delivered on behalf of it, and constitutes a legal,
valid, binding obligation, enforceable against it in accordance with the terms
hereof; and (e) the execution and delivery of this Agreement and the performance
of its obligations hereunder do not conflict with or violate any requirement of
applicable laws or

 

55

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regulations and do not conflict with, or constitute a default under, any
contractual obligation of it.

 

11.3        Compliance with Laws.  Each Party shall carry out all work assigned
to such Party in the applicable Product Work Plan(s) and its other obligations
under this Agreement in material compliance with all applicable Laws, including
(a) the Food, Drug, and Cosmetic Act and any applicable implementing
regulations, and relevant foreign equivalents thereof; (b) GMPs; (c) all other
applicable FDA guidelines and relevant guidelines of applicable regulatory
authorities; (d) all other applicable laws and regulations, including all
applicable federal, national, multinational, state, provincial and local
environmental, health and safety laws and regulations in effect at the time and
place of manufacture of a Product; and (e) all applicable export and import
control laws and regulations.

 

11.4        Commercialization of Products.  Baxter agrees, on behalf of itself
and its Affiliates and sublicensees, not to materially and artificially discount
the price of a Product solely to generate sales of other Baxter products.

 

11.5        Disclaimer.  EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF
ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, OR
VALIDITY OF TECHNOLOGY OR PATENT CLAIMS, WHETHER ISSUED OR PENDING.

 

ARTICLE 12.
MISCELLANEOUS

 

12.1        Governing Laws and Compliance with Laws.  This Agreement shall be
governed by, interpreted and construed in accordance with the substantive Laws
of the State of Delaware, without regard to conflicts of law principles.

 

12.2        Waiver.  It is agreed that no waiver by any Party hereto of any
breach or default of any of the covenants or agreements herein set forth shall
be deemed a waiver as to any subsequent and/or similar breach or default.

 

12.3        Assignments.  Neither this Agreement nor any right or obligation
hereunder may be assigned or delegated, in whole or part, by either Party
without the prior written consent of the other or pursuant to subcontracting or
sublicensing arrangements expressly contemplated herein; provided, however, that
either Party may, without the written consent of the other, assign this
Agreement and its rights and delegate its obligations hereunder in connection
with the transfer or sale of all or substantially all of its business or in the
event of its merger, consolidation, change in control or similar transaction. 
Any permitted assignee shall assume all obligations of its assignor under this
Agreement.  Any purported assignment in violation of this Section 12.3 shall be
void.

 

12.4        Independent Contractors.  The relationship of the Parties hereto is
that of independent contractors.  The Parties hereto are not deemed to be
agents, partners or joint

 

56

--------------------------------------------------------------------------------

 

ventures of the others for any purpose as a result of this Agreement or the
transactions contemplated thereby.

 

12.5        Notices.  Any notice required or permitted to be given under or in
connection with this Agreement shall be deemed to have been sufficiently given
if in writing and sent by certified or registered mail, return receipt
requested, postage prepaid, or sent by a nationally recognized overnight courier
service, or sent by hand delivery, to the representative for such Party at the
address set forth below for such Party.  If a Party changes its representative
or address, written notice shall be given promptly to the other Party of the new
representative or address.  Notice shall be deemed given on the third (3rd)
business day after being sent in the case of delivery by mail, on the first
(1st) business day after being sent in the case of delivery by overnight
courier, and on the date of delivery in the case of delivery by hand.  The
addresses of the Parties and representatives are as follows:

 

If to Momenta:

Momenta Pharmaceuticals, Inc.

 

675 West Kendall Street

 

Cambridge, MA 02142

 

USA

 

Attn: President and CEO

 

 

 

 

With a copy to:

Momenta Pharmaceuticals, Inc.

 

675 West Kendall Street

 

Cambridge, MA 02142

 

USA

 

Attn: General Counsel

 

 

 

 

If to Baxter, Inc.:

Baxter Healthcare Corporation

 

One Baxter Parkway

 

Deerfield, IL 60015

 

USA

 

Attention: President BioScience

 

 

 

 

With a copy to:

Baxter Healthcare Corporation

 

One Baxter Parkway

 

Deerfield, IL 60015

 

USA

 

Attention: General Counsel

 

12.6        Force Majeure.  Neither Party shall be held liable or responsible to
the other nor be deemed to have defaulted under or breached the Agreement for
failure or delay in fulfilling or performing any term of the Agreement
(excluding payment obligations) to the extent, and for so long as, such failure
or delay is caused by or results from causes beyond the reasonable control

 

57

--------------------------------------------------------------------------------

 

of such Party including but not limited to fires, earthquakes, floods,
embargoes, wars, acts of war (whether war is declared or not), terrorist acts,
insurrections, riots, civil commotion, and other similar causes.  Performance
shall be excused only to the extent of and during the reasonable continuance of
such disability.  Any deadline or time for performance specified in a Work Plan
that falls due during or subsequent to the occurrence of any of the disabilities
referred to herein shall be automatically extended for a period of time equal to
the period of such disability.  Each Party shall immediately notify the other
if, by reason of any of the disabilities referred to herein, it is unable to
meet any deadline or time for performance specified in any Exhibit to this
Agreement.  The Parties shall meet to discuss and negotiate in good faith what
modifications to this Agreement should result from this force majeure.  If a
condition constituting force majeure, as defined herein, exists for more than
[**], either Party may terminate this Agreement.

 

12.7        Complete Agreement.  Except with regards to the Community of
Interest Letter Agreement between the Parties dated [**], as amended on [**]
with respect to patent due diligence conduct by Baxter, it is understood and
agreed between Momenta and Baxter that this Agreement constitutes the entire
agreement, both written and oral, between the parties with respect to the
subject matter hereof, and that all prior agreements respecting the subject
matter hereof, whether written or oral, expressed or implied, shall be of no
force or effect.  No amendment or change hereof or addition hereto shall be
effective or binding on either of the parties hereto unless reduced to writing
and executed by the respective duly authorized representatives of Momenta and
Baxter.

 

12.8        Quality Agreement.  No later than [**] prior to Momenta or a Third
Party engaged by Momenta engaging in cGMP activities, the Parties shall enter
into a quality agreement relating to any cGMP Product to be supplied by Momenta.

 

12.9        Severability.  In the event that any provisions of this Agreement
are determined to be invalid or unenforceable by a court of competent
jurisdiction, the remainder of the Agreement shall remain in full force and
effect without such provision.  In such event, the parties shall in good faith
negotiate a substitute clause for any provision declared invalid or
unenforceable, which shall most nearly approximate the intent of the Parties in
entering this Agreement.

 

12.10      Counterparts.  This Agreement may be executed in counterparts, each
of which shall be deemed to be an original and both together shall be deemed to
be one and the same agreement.

 

12.11      Alternative Dispute Resolution.  The Parties recognize that bona fide
disputes may arise which relate to the Parties’ rights and obligations under
this Agreement.  In attempting to resolve any such disputes, the matter shall
first be elevated through each Party’s respective senior management
representatives (in the case of Baxter, to the President of Bioscience, in the
case of Momenta to its President) for resolution.  If the matter remains
unresolved [**] after referral to such senior management representatives the
matter shall be resolved by binding dispute resolution proceedings in accordance
with the procedure set forth in Exhibit 12.11.  Notwithstanding the foregoing,
if the Parties are attempting to resolve a dispute that arises under
Section 2.4(d), and the matter remains unresolved [**] after referral to such
senior management representatives the third sentence of this Section 12.11 shall
not apply but rather, Baxter shall be permitted to make the final decision with
respect to the Clinical Development strategy.

 

58

--------------------------------------------------------------------------------

 

12.12      HSR Act.  The Parties shall use commercially reasonable efforts to
promptly obtain any clearance required under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (15 U.S.C. § 18a) (the “HSR Act”) for the
consummation of this Agreement and the transactions contemplated hereby. Each
Party shall furnish to the other Party reasonably necessary information and
reasonable assistance as the other Party may request in connection with its
compliance with the HSR Act, and any inquiries or requests for additional
information in connection therewith.  Baxter shall pay all costs and expenses
related to any filing pursuant to the HSR Act.  Baxter shall provide Momenta
notice of achievement of the HSR clearance at such time (such date, the “HSR
Clearance Date”) or promptly thereafter as practical. Other than the provisions
of Article 11 and this Section 12.12, the rights and obligations of the Parties
under this Agreement shall not become effective until the HSR Clearance Date, at
which time it shall be immediately effective.  In the event that the HSR
Clearance Date has not been granted within one hundred twenty (120) days after
the Execution Date, either Party may terminate this Agreement by written notice
to the other Party.  For the sake of clarity, none of the provisions of this
Agreement, including without limitation Section 10.6, shall remain in effect
after such termination.

 

[Signature Page Follows]

 

59

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[Signature Page to Development, License and Option Agreement]

 

IN WITNESS WHEREOF, the Parties hereto have set their hand as of the date first
above written.

 

 

MOMENTA PHARMACEUTICALS, INC.

 

 

 

By:

/s/ Craig Wheeler

 

Name:

Craig Wheeler

 

Title:

President and CEO

 

 

 

 

 

 

 

BAXTER INTERNATIONAL INC.

 

 

 

 

By:

/s/ Ludwig N. Hantson

 

Name:

Ludwig N. Hantson

 

Title:

CVP/President BioScience

 

 

 

 

 

 

 

BAXTER HEALTHCARE CORPORATION

 

 

 

 

By:

/s/ Ludwig N. Hantson

 

Name:

Ludwig N. Hantson

 

Title:

CVP/President BioScience

 

 

 

 

 

 

 

BAXTER HEALTHCARE SA

 

 

 

 

By:

/s/ Kevin Holland

 

Name:

Kevin Holland

 

Title:

GM Emerging Markets

 

 

 

 

 

 

 

By:

/s Sarah Byrne-Quinn

 

Name:

Sarah Byrne-Quinn

 

Title:

VP Business Development & Strategy

 

--------------------------------------------------------------------------------

 

Exhibit 1.89
Technical De-Risking Criteria

 

1.                                      Developed, scalable and transferrable
upstream process including:

 

a.                                      Achievement of sufficient, and mutually
agreed to by the JSC, [**];

 

b.                                      Demonstrated scalability from Benchtop
([**]) to Pilot Scale ([**]) and from Pilot Scale to Clinical Scale ([**]) with
product specifications kept within the [**] process);

 

c.                                       Confirmation of post-production cell
line stability (cell culture productivity and genetic stability); and

 

d.                                      [**] or [**] production medium.

 

Note: If the process utilizes a complex media (i.e. inclusion of cell culture
media components like [**] (the “additive”)), reproducibility of the upstream
process needs to be shown for [**] lots of any “additive” used

 

2.                                      Developed, scalable and transferrable
downstream process including:

 

a.                                      Defined product specifications [**]

 

b.                                      Defined impurity profile [**]

 

3.                                      Acceptable protein purification [**]
yield as determined by the JSC.

 

4.                                      [**] plan for the Product, consistent
with a biosimilar or interchangeable biologic development program, including,
but not limited to, its development, manufacture, administration and use.

 

The [**] will have been determined to have been achieved upon the earlier of:
(A) objective achievement the [**]; (B) JSC determination that the [**] for a
Product has been achieved [**]; or (C) if [**] elects, [**], that it will
proceed with the next stage [**] of Development of the Product.

 

For purposes of this Exhibit 1.89, the term “[**]” shall mean the sum of [**].

 

--------------------------------------------------------------------------------

 

Exhibit 1.90
Technology Transfer

 

Operational Responsibility Matrix

 

 

 

Responsibility

 

Cost

 

 

 

MNTA

 

Baxter

 

CMO

 

MNTA

 

Baxter

 

[**]

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

[**]

 

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[**]

 

 

 

 

 

 

 

 

 

 

 

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[**]

 

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[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

[**]

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

[**]

 

[**]

 

 

 

 

 

[**]

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

Responsibility

 

Cost

 

 

 

MNTA

 

Baxter

 

CMO

 

MNTA

 

Baxter

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

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[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

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[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

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[**]

 

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[**]

 

[**]

 

[**]

 

[**]

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

Exhibit 4.7
Examples of the Operation of the Royalty, Milestone and Profit Share Provisions

 

Key Assumptions

 

1)                                     For illustration purposes the following
scenarios of Launch, competition and sales are assumed per quarter, after Launch
for one product:

 

a.                                      Regulatory Approval Status: [**]

 

b.                                      Net quarterly sales:  [**]

 

c.                                       Number of Competitors  [**]

 

Momenta Royalty Calculation

 

2)                                     Royalty payment calculation [**]:

 

a.                                      Payments are calculated at the end of
each quarter, beginning with the quarter in which Product is Launched

 

b.                                      The table below summarizes the royalties
under various conditions to be used in calculations:

 

 

 

 

 

[**]

 

 

 

 

 

Condition

 

[**] Competitors

 

Competitors

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

 

c.                                       In this example, in the quarter when
$[**] threshold is reached the following:

 

--------------------------------------------------------------------------------

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net

 

 

 

Royalty

 

Royalty

 

 

 

Royalty Payment to Momenta ($M)

 

 

 

 

 

Quarter

 

Cum.

 

Rate

 

Rate (End

 

 

 

[**]

 

Profit Share Scenario

 

 

 

 

 

Sales

 

Sales

 

(Start of

 

of

 

 

 

[**]

 

[**]

 

[**]

 

[**]

 

 

 

Territory

 

($M)

 

($M)

 

Quarter)

 

Quarter)

 

Calculation

 

[**]

 

Election

 

Election

 

Election

 

[**]

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[**]

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[**]

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[**]

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

 

 

 

 

 

 

[**]

 

$

[**]

 

$

[**]

 

$

[**]

 

[**]

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[**]

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[**]

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[**]

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

 

 

 

 

 

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

 

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

 

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

 

 

 

 

 

 

 

 

 

 

 

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

 

 

 

 

 

 

[**]

 

$

[**]

 

$

[**]

 

$

[**]

 

[**]

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[**]

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[**]

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

[**]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[**]

 

[**]

 

[**]

 

 

 

[**]

 

[**]

 

[**]

 

 

 

 

 

 

 

[**]

 

[**]

 

[**]

 

[**]

 

Total

 

 

 

[**]

 

[**]

 

 

 

 

 

 

 

[**]

 

[**]

 

[**]

 

[**]

 

 

--------------------------------------------------------------------------------

* Note: In this example, in the quarter when $[**] threshold is reached the
following calculation is used in order to determine the sales levels and their
respective royalties:

 

[**]

 

--------------------------------------------------------------------------------

[g318543ki15i001.gif]

 

Exhibit 7.2
Initial Press Release

 

FOR IMMEDIATE RELEASE

 

Media Contacts
Baxter
Brian Kyhos, (847) 948-4210
Deborah Spak, (847) 948-2349

 

Momenta
Kari Watson,
MacDougall Biomedical Communications, (781) 235-3068

 

Investor Contacts
Baxter
Mary Kay Ladone, (847) 948-3371
Clare Trachtman, (847) 948-3085

 

Momenta
Beverly Holley, (617) 395-5189

 

BAXTER AND MOMENTA ANNOUNCE COLLABORATION
TO DEVELOP AND COMMERCIALIZE FOLLOW-ON BIOLOGICS

 

DEERFIELD, ILL., and CAMBRIDGE, Mass., December 22, 2011 - Baxter International
Inc.  (NYSE:BAX) and Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA) today announced
that they have entered into a global collaboration to develop and commercialize
follow-on biologic products, also known as biosimilars.  Biosimilars replicate
existing, branded biologics used in the treatment of a variety of diseases
including cancer, autoimmune disorders and other chronic conditions.  With this
collaboration, Baxter will leverage its leading clinical development and
biologic manufacturing expertise, global leadership in sterile injectables and
global commercial capabilities, while Momenta will provide its expertise in
high-resolution analytics, characterization, and product and process
development.

 

--------------------------------------------------------------------------------

 

Under the terms of the agreement, Baxter will make an upfront cash payment of
$33 million to Momenta related to the collaboration for up to six follow-on
biologic compounds.  Baxter may make additional payments over the next several
years for the development of the compounds, contingent upon the achievement of
technical, development and regulatory milestones with respect to all six
products.

 

“Baxter is an established leader in biologic treatments for a variety of
diseases.  As biologics have become an increasingly important part of patient
care, the collaboration with Momenta allows us to tap both companies’ expertise
to expand access to these important therapies,” said Ludwig Hantson, President
of Baxter’s BioScience business.  “The collaboration complements Baxter’s
early-stage pipeline and allows the company to expand its leadership in
biologics at a time when the global regulatory pathway for approval is becoming
more clear.”

 

“Momenta and Baxter share a common goal in this collaboration -to create
interchangeable biologic products by taking advantage of Momenta’s innovative
physicochemical and biologic characterization capabilities, coupled with a
quality-by-design approach to process development,” commented Craig Wheeler,
President and CEO of Momenta.  “We are thrilled to have Baxter as a partner. 
Baxter’s global footprint and extensive development, manufacturing and
commercial expertise are exactly what we need to succeed in building a leading
follow-on biologics business.”

 

Baxter and Momenta expect to close the transaction in the first quarter of 2012,
subject to customary closing conditions including the expiration of the waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act.

 

2

--------------------------------------------------------------------------------

 

About Baxter International Inc.

 

Baxter International Inc., through its subsidiaries, develops, manufactures and
markets products that save and sustain the lives of people with hemophilia,
immune disorders, cancer, infectious diseases, kidney disease, trauma and other
chronic and acute medical conditions.  As a global, diversified healthcare
company, Baxter applies a unique combination of expertise in medical devices,
pharmaceuticals and biotechnology to create products that advance patient care
worldwide.

 

About Momenta

 

Momenta Pharmaceuticals is a biotechnology company specializing in the detailed
structural analysis of complex drugs.  Momenta is applying its technology to the
development of generic versions of complex drug products, as well as to the
discovery and development of novel drugs.  Momenta was founded in 2001 and is
headquartered in Cambridge, Mass.  This release includes forward-looking
statements concerning a collaboration agreement between Baxter International
Inc. and Momenta Pharmaceuticals, Inc., including expectations with respect to
the closing of the transaction and milestone payments.  The statements are based
on assumptions about many important factors, including the following, which
could cause actual results to differ materially from those in the
forward-looking statements: satisfaction of closing conditions, including
expiration of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act; satisfaction of regulatory and other requirements; actions of
regulatory bodies and other governmental authorities; changes in laws and
regulations; product quality or patient safety issues; and other risks
identified in each of the company’s most recent filings on Form 10-K and

 

3

--------------------------------------------------------------------------------

 

other SEC filings.  Neither Baxter nor Momenta undertakes to update its
forward-looking statements.

 

###

 

4

--------------------------------------------------------------------------------

 

Exhibit 12.11
Alternative Dispute Resolution

 

(a)                                 The Parties shall attempt to resolve any and
all disputes, claims or controversies arising out of or relating to this
Agreement promptly by negotiation between executives pursuant to Section 12.11
of the Agreement who have authority to settle the controversy.  If such
disputes, claims or controversies are not resolved through such negotiation,
then they shall be submitted for final and binding arbitration pursuant to the
arbitration clause set forth below.  Either Party may initiate arbitration with
respect to the matters submitted to negotiation by filing a written demand for
arbitration at any time following the initial negotiation session.

 

(b)                                 To the extent not resolved by the above
noted negotiation process between the executives of the Parties, any dispute,
claim or controversy arising out of or relating to this Agreement or the breach,
termination, enforcement, interpretation or validity thereof, including the
determination of the scope or applicability of this Agreement to arbitrate,
shall be determined by arbitration in the city of the defendant, in the language
in which the contract was written.  The arbitration shall be administered by the
International Institute for Conflict Prevention & Resolution (CPR) pursuant to
its Arbitration Rules and Procedures.  References herein to any arbitration
rules or procedures mean such rules or procedures as amended from time to time,
including any successor rules or procedures, and references herein to the CPR
include any successor thereto.  The arbitration shall be before [**]
arbitrators.  Each Party shall designate one arbitrator in accordance with the
“screened” appointment procedure provided in Rule 5.4 of the CPR Rules.  The
[**] Party-appointed arbitrators will select the [**], who will serve as the
panel’s chair or president. All [**] arbitrators shall have experience in
licensing and development of biologic products.  This arbitration provision, and
the arbitration itself, shall be governed by the laws of the state of Delaware
and the Federal Arbitration Act, 9 U.S.C. §§ 1-16.

 

(c)                                  Consistent with the expedited nature of
arbitration, each Party will, upon the written request of the other Party,
promptly provide the other with copies of documents on which the producing Party
may rely in support of or in opposition to any claim or defense or in support of
its position.  At the request of a Party, the arbitrators shall have the
discretion to order examination by deposition of witnesses to the extent the
arbitrator deems such additional discovery relevant and appropriate.  It is
contemplated that depositions will be appropriate in disputes involving an
allegation of breach of contract, termination rights, or a claim for damages. 
Depositions shall be limited to a maximum of [**] per Party and shall be held
within [**] of the grant of a request.  Additional depositions may be scheduled
only with the permission of the arbitrators, and for good cause shown. Absent a
showing of good cause, each deposition shall be limited to a maximum of [**]
duration. All objections are reserved for the arbitration hearing except for
objections based on privilege and proprietary or confidential information. The
Parties shall not utilize any other discovery mechanisms, including
international processes and U.S. federal statutes, to obtain additional evidence
for use in the arbitration. Any dispute regarding discovery, or the relevance or
scope thereof, shall be determined by the arbitrators, which

 

--------------------------------------------------------------------------------

 

determination shall be conclusive. Absent a showing of good cause, all discovery
shall be completed within [**] following the appointment of the arbitrators. 
The Arbitrators shall exercise judgment to assure that the scope of discovery is
appropriately proportionate to the magnitude of the dispute and its relevance to
resolution of the dispute.  For example, in resolving a JSC deadlock that does
not involve a claim for damages or breach of contract, discovery may not require
five (5) depositions or significant document disclosure and the briefing of the
proposed Positions (as defined below in paragraph (d)) along with factual and
expert support may be sufficient.

 

(d)                                 Within [**] days of the later of (i) [**] or
(ii) [**], the Parties shall exchange their final arguments as to the
matter(s) under dispute (“Position”) together with a brief or other written
memorandum supporting the merits of their Position.  With respect to disputes
involving a failure of the JSC to reach consensus under Section 2.4(e) that are
not expressly assigned to a Party under the Agreement and have not been resolved
under Section 2.11, the arbitration panel shall select the Position which most
closely reflects a commercially reasonable interpretation of the terms of the
Agreement as the binding Position to be executed by the Parties. In making their
selection the arbitrators shall not modify the terms or conditions of either
Party’s final Position nor shall the arbitrators combine provisions from both
final Positions. With respect to all other disputes, the arbitrators shall have
the authority to award damages or issue a determination resolving the dispute
not limited to the specific positions requested by each Party.  In making their
decision, the arbitrators shall consider the terms and conditions of the
Agreement, the relative merits of the final Proposals, and the written and oral
arguments of the Parties. In the event the arbitrators seek the guidance of the
law of any jurisdiction; the law of the State of Delaware, with the exception of
its choice of law provisions, shall govern.

 

(e)                                  The panel of arbitrators shall have no
power to award non-monetary or equitable relief of any sort.  The arbitrators
will have no authority to award punitive or other damages not measured by the
prevailing Party’s actual damages, except as may be required by statute.  Each
Party expressly waives and foregoes any right to consequential, punitive,
special, exemplary or similar damages or lost profits.  The arbitrators shall
have no power or authority, under the CPR Rules for Non-Administered Arbitration
or otherwise, to relieve the Parties from their agreement hereunder to arbitrate
or otherwise to amend or disregard any provision of this Agreement.  The award
of the arbitrators shall be final, binding and the sole and exclusive remedy to
the Parties.  Either Party may seek to confirm and enforce any final award
entered in arbitration, in any court of competent jurisdiction.  The cost of the
arbitration, including the fees of the arbitrators, shall be borne [**].

 

(f)                                   If an arbitral award does not impose an
injunction on the losing Party or contain a money damages award in excess of
[**] Dollars (USD$[**]), then the arbitral award shall not be appealable and
shall only be subject to such challenges as would otherwise be permissible under
the Federal Arbitration Act, 9 U.S.C. §§ 1-16.  In the event that the
arbitration does result in an arbitral award, which imposes an injunction or a
monetary award in excess of [**] Dollars (USD$[**]), such award may be appealed
to a tribunal of appellate arbitrators via the CPR Arbitration Appeal Procedure.

 

--------------------------------------------------------------------------------

 

(g)                                  Except as may be required by law, neither a
Party nor an arbitrator may disclose the existence, content, or results of any
arbitration hereunder without the prior written consent of both Parties.

 

--------------------------------------------------------------------------------