EXHIBIT 10.40

 

Portions of this exhibit were omitted and filed separately with the Secretary of
the Commission pursuant to an application for confidential treatment filed with
the Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934.
Such portions are marked by a series of asterisks.

 

RESEARCH, DEVELOPMENT AND LICENSE AGREEMENT

 

AMONG

 

NEOSE TECHNOLOGIES, INC.

 

AND

 

NOVO NORDISK A/S

 

AND

 

NOVO NORDISK HEALTH CARE AG

 

DATED AS OF NOVEMBER 17, 2003

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Table of Contents

 

          Page

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1.

  

DEFINITIONS

   1

2.

  

CONDUCT OF THE PROJECT AND COMMERCIALIZATION EFFORTS

   7

3.

  

FEES AND DEVELOPMENT PAYMENTS

   9

4.

  

PRODUCT PAYMENTS AND ROYALTIES

   11

5.

  

INTELLECTUAL PROPERTY GRANTS AND RIGHT OF NEGOTIATION

   13

6.

  

OWNERSHIP OF INTELLECTUAL PROPERTY

   15

7.

  

BLOCKING PATENTS

   18

8.

  

SUPPLY AGREEMENT

   19

9.

  

CONFIDENTIALITY

   19

10.

  

REPRESENTATIONS AND WARRANTIES

   21

11.

  

INDEMNIFICATIONS AND LIMITED LIABILITY

   22

12.

  

TERM AND TERMINATION

   24

13.

  

DISPUTE RESOLUTION

   25

14.

  

GOVERNMENT APPROVAL

   26

15.

  

MISCELLANEOUS

   27

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RESEARCH, DEVELOPMENT AND LICENSE AGREEMENT

 

This RESEARCH, DEVELOPMENT AND LICENSE AGREEMENT (“Agreement”), is dated as of
November 17, 2003, among Neose Technologies, Inc., a Delaware corporation
(“Neose”), and Novo Nordisk A/S, a Danish corporation, and Novo Nordisk Health
Care AG, a Swiss Corporation (collectively, “Novo”).

 

BACKGROUND

 

Neose has developed and continues to develop proprietary technologies and
related know-how for the glycosylation, design and remodeling of proteins,
peptides and antibodies. Such glycomodelling technologies are including but not
limited to GlycoAdvanceTM, GlycoPEGylation™ and GlycoConjugation™ technologies.
Neose and Novo are parties to two Research and Development Collaboration
Agreements, dated September 30, 2002 and October 28, 2002, respectively,
relating to the use of Neose’s technologies on Novo’s *****. Novo now wishes to
continue the development of ***** under the terms and conditions of this
Agreement, which includes, among other things, further research and development,
scale-up and technology transfer activities by Neose, and the grant of rights to
Novo under certain patents and know-how owned or controlled by Neose for use in
connection with the development and commercialization of *****.

 

Contemporaneously with the execution and delivery of this Agreement, Neose and
Novo are entering into another Research, Development and License agreement
regarding *****

 

TERMS

 

NOW, THEREFORE, in consideration of the premises and of the mutual agreements
and covenants contained in this Agreement, and intending to be legally bound
hereby, Novo and Neose agree as follows:

 

1. DEFINITIONS. Capitalized terms not otherwise defined shall have the meaning
set forth in this Section 1.

 

1.1 “Affiliate” means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by, or is under common control
with, such Person. Without limiting the foregoing, a Person shall be regarded as
in control of another Person if it owns, or directly or indirectly controls,
more than fifty percent (50%) of the voting stock or other ownership interest of
the other Person.

 

1.2 “Blocking Patent” means any Patent Rights claimed to be owned or Controlled
by a Third Party with respect to which Patent Rights an assertion is being made
by or on behalf of the Third Party that the use of the Neose Technology under
this Agreement infringes such Person’s Patent Rights.

 

1.3 “Calendar Quarter” means any of the respective periods of three (3)
consecutive calendar months ending on March 31, June 30, September 30 or
December 31 during the Term.

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

1.4 “Calendar Year” shall mean the respective periods of twelve (12) consecutive
calendar months ending on December 31 during the Term.

 

1.5 “Commercially Reasonable Efforts” shall mean efforts and resources normally
used by a Party in similar undertakings, taking into account the proprietary
position of the product or technology involved, the regulatory structure
involved, the profitability of such undertaking, the competitiveness of the
relevant marketplace, and other relevant factors.

 

1.6 “Commercial Sale” means any sale of a New Product by Novo, its Affiliates,
or Sublicensees to a Person other than their respective Affiliates or Neose.

 

1.7 “Confidential Information” shall mean any of the Disclosing Party’s
proprietary or confidential information, technical data, trade secrets or
know-how, including, but not limited to, research, product plans, products, the
identity of the Novo Materials, information relating to the Novo Materials,
service plans, services, customer lists and customers, markets, software,
developments, inventions, processes, formulas, technology, designs, drawings,
engineering, marketing, distribution and sales methods and systems, sales and
profit figures, finances and other business information disclosed to the
Recipient by or on behalf of the Disclosing Party, either directly or
indirectly, in writing, orally or by drawings or inspection of documents or
other tangible property.

 

1.8 “Control” or “Controlled” means possession of the ability to grant a license
or sublicense as provided for herein without violating the terms of an agreement
or other arrangement with a Third Party existing before or after the Effective
Date.

 

1.9 “Designated Representative” means, in the case of Neose, its Senior Vice
President, Business and Commercial Development, or such other person designated
by Neose in writing from time to time to Novo, and, in the case of Novo, its
Executive Vice President and Chief Science Officer, or other such other person
designated by Novo in writing from time to time to Neose.

 

1.10 “Disclosing Party” is used as defined in Section 9.1.

 

1.11 “Effective Date” shall mean the later of (i) the date of execution of this
Agreement by both Parties or (ii) if notification is required to be made under
the HSR Act, the expiration or earlier termination of any notice and waiting
period under the HSR Act.

 

1.12 “***** Agreement” means the Research, Development and License Agreement
between Neose and Novo with respect to *****, which is being entered into
contemporaneously with the execution of this Agreement.

 

1.13 “FDA” means the United States Food and Drug Administration and any
successor agency.

 

1.14 “Field of Use” means the development and commercial manufacture of New
Product for *****.

 

1.15 “GMPs” shall mean current good manufacturing practices for the methods to
be used in, and the facilities and controls to be used for, the manufacture,
processing, packing and holding of biological products, all as set forth from
time to time by the FDA, including all amendments and supplements thereto
throughout the term of this Agreement.

 

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1.16 “HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.

 

1.17 “Improvements” means any and all developments, discoveries, inventions,
additions, amendments, modifications, ideas, processes, methods, compositions,
formulae, techniques, information and data, whether or not patentable,
conceived, developed or reduced to practice, that improve or beneficially
change, or enhance the economic and technical attributes of, any Know-How or
Patent Rights or any process, device or composition.

 

1.18 “IND” means an application for an Investigational Exemption for a New Drug
filed with the FDA, or any comparable filing made with a regulatory authority
outside the United States.

 

1.19 “Joint Improvements” means any and all Improvements made, conceived or
reduced to practice jointly by Neose and Novo in the conduct of the Work Plan
under this Agreement, whether patentable or not, other than Neose Improvements
and Novo Improvements.

 

1.20 “Know-How” means any and all formulae, procedures, processes, methods,
designs, know-how, show-how, trade secrets, discoveries, inventions (whether or
not patentable), patent applications, licenses, software and source code,
programs, prototypes, designs, discoveries, techniques, methods, ideas,
concepts, data, engineering and manufacturing information, electronic control
circuits, specifications, diagrams, drawings, schematics, blueprints and parts
lists and other proprietary information, rights and works of authorship, whether
or not reduced to writing.

 

1.21 “M1 Profile for the New Product” means the parameters for candidate
selection required for ***** set forth on Exhibit 1.21, as amended from time to
time in accordance with Section 2.2.

 

1.22 “Mutual Nondisclosure Agreement” means the Amended and Restated Mutual
Nondisclosure Agreement between the Parties dated November 25, 2002.

 

1.23 “Neose Improvements” means any and all Improvements relating to the Neose
Technology made, conceived, or reduced to practice by (i) either Neose or Novo
or both in the conduct of the Work Plan under this Agreement or (ii) either
Neose or jointly by Neose and Novo under this Agreement, in each case, other
than the Novo Materials, the Novo Materials modified using the Neose Technology
and New Product.

 

1.24 “Neose Patents” means all Patent Rights relating to methods and processes
for glycosylation design and remodeling of proteins, peptides and antibodies
that are Controlled by Neose, including, but not limited to: (i) the Patent
Rights listed in Exhibit 1.24, (ii) the Patent Rights developed by Neose in the
conduct of the Work Plan during the Term of this Agreement, and (iii) any later
acquired Patent Rights Controlled by Neose and used to develop any New Product.

 

1.25 “Neose Project-Related Costs” means Neose’s costs of conducting the Work
Plan, which shall be determined in accordance with this Agreement and calculated
as follows: (i) with respect to personnel, at the rate of *****; and (ii) with
respect to materials, at the *****.

 

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1.26 “Neose Technology” means the Neose Patents and any Know-How Controlled by
Neose relating to methods and processes for the *****, including, without
limitation, its GlycoAdvance™, GlycoPEGylation™ and GlycoConjugation™
technologies, and other ***** processes, and all Know-How resulting from work
conducted by Neose during the Term.

 

1.27 “Net Sales” means proceeds from Commercial Sales of New Products by Novo,
its Affiliates or Sublicensees to Third Parties, after deducting (to the extent
actually incurred or reasonably estimated and accrued in accordance with
Generally Accepted Accounting Principles in the United States and to the extent
not already deducted in the amount invoiced): (i) reasonable trade, cash and
quantity discounts or rebates (other than price discounts granted at the time of
sale), reasonable service allowances and reasonable required agent’s
commissions, if any, allowed or paid, (ii) credits or allowances actually given
or made for rejection or return of previously sold products or for retroactive
price reductions (including Medicare, Medicaid, and/or discounts and similar
types or rebates and/or discounts), (iii) taxes, duties or other governmental
charges levied on or measured by the billing amount (excluding income and
franchise taxes), as adjusted for rebates and refunds, and (iv) charges actually
incurred for freight and insurance directly related to the distribution of New
Products (excluding amounts reimbursed by Third Party customers). A “Commercial
Sale of a New Product” is deemed to occur when the invoice is issued, or if no
invoice is issued, upon the earlier of shipment or transfer of title in the New
Product to a Third Party. In the event that New Product is sold or distributed
for use in combination with or as a component of another product or products (a
“Combination Product”), the calculation of Net Sales from such Combination
Product shall be determined as set forth below:

 

If all of the active ingredient components of a Combination Product are also
sold separately and in identical strengths to those contained in the Combination
Product, then the following shall apply: Net Sales shall be calculated as set
forth above on the basis of the gross invoice price of a New Product containing
the same weight of the licensed active ingredient constituent sold independently
[A], divided by the sum of the gross invoice price of all of the active
ingredient constituents sold independently [B + A], multiplied by the gross
invoice price of the Combination Product, as shown by the following formula:

 

 

Net Sales =

      [A]      

x   [gross invoice price of the Combination Product]

    [B + A]    

 

The distribution costs associated with any Combination Product will be allocated
in the same proportion among the licensed active ingredient components and all
other active ingredient components.

 

If the active ingredient components of a Combination Product are not sole
separately in identical strengths to those contained in the Combination Product,
then the parties agree to negotiate in good faith the calculation of Net Sales
with regard to such Combination Product.

 

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1.28 “New Product” shall mean the following: any of the Novo Materials modified
by using the Neose Technology.

 

1.29 “Novo Improvements” means any and all Improvements that are related to the
Novo Materials and/or any of the New Products made, conceived or reduced to
practice by Novo or Neose or both, other than Neose Improvements.

 

1.30 “Novo Materials” means any and all forms of ******, including, but not
limited to, ***** substances.

 

1.31 “Novo Technology” means the Patent Rights and Know-How Controlled by Novo
relating to the Novo Materials.

 

1.32 “Ownership Rights” means any and all right, title and interest under
patent, copyright, trade secret and trademark law, or any other intellectual
property or other law, in and to any Know-How, Patent Rights, or Improvements.

 

1.33 “Parties” means Neose and Novo, collectively.

 

1.34 “Party” means Neose or Novo, as the context requires, or each of Neose and
Novo, individually.

 

1.35 “Patent Rights” shall mean individually and collectively any and all
patents and/or patent applications and provisional applications, all inventions
disclosed therein, and any and all continuations, continuations-in-part,
continued prosecution applications, divisions, renewals, patents of addition,
reissues, confirmations, registrations, revalidations, revisions and
re-examinations thereof, utility models, petty patents, design registrations and
any and all patents issuing therefrom and any and all foreign counterparts
thereof and extensions of any of the foregoing including without limitation
extensions under the U.S. Patent Term Restoration Act, extensions under the
Japanese Patent Law, and Supplementary Protection Certificates (SPCs) according
to Counsel Regulation (EEC) No. 1768/92 and similar extensions for other patents
under any applicable law in any country of the world.

 

1.36 “Permit” means any governmental or regulatory filing, submission, approval,
permit or license that is required by applicable law in any jurisdiction
worldwide for clinical trials, Commercial Sales or other use of any of the New
Products.

 

1.37 “Person” means an individual, corporation, partnership, trust, business
trust, association, joint stock company, joint venture, pool, syndicate, sole
proprietorship, unincorporated organization, government, governmental agency,
authority or instrumentality, or any other form of entity not specifically
listed in this Agreement.

 

1.38 “Product-Candidate” means any new ***** product-candidate Controlled by
Neose during the Term.

 

1.39 “Project” means the project to be conducted hereunder by the Parties in
accordance with the Work Plan.

 

1.40 “Project Manager” means the project managers described in Section 2.4.1.

 

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1.41 “Reagents” means the enzymes and sugar nucleotides required to use the
Neose Technology in the manufacture of New Products.

 

1.42 “Recipient” is used as defined in Section 9.1.

 

1.43 “Regulated Market” means any jurisdiction worldwide that requires a Permit
for clinical trials, Commercial Sales or any other use of a New Product.

 

1.44 “Regulatory Approval” means any marketing authorization (including
authorizations approving a Biologics License Application) required for a New
Product, exclusive of any pricing or third-party reimbursement approval.

 

1.45 “Required Agreement” means any agreement with a Sublicensee required under
Section 5.1.3.

 

1.46 “Steering Committee” means the steering committee established pursuant to
Section 2.4.2, or any successor group appointed by the Parties.

 

1.47 “Sublicensee” means a sublicensee of Novo’s rights under Section 5.

 

1.48 “Supply Agreement” means the supply agreement to be entered into between
Neose and Novo in accordance with Section 8.

 

1.49 “Territory” means the world.

 

1.50 “Term” means the term of this Agreement, which shall commence on the
Effective Date and shall expire or terminate as described in Section 12.

 

1.51 “Third Party” means any Person other than Novo, Neose, or their respective
Affiliates.

 

1.52 “Valid Patent Claim” means a claim of an issued and unexpired patent
forming part of the Neose Patents that has not been held revoked, unenforceable
or invalid by a decision of a court or other government agency of competent
jurisdiction, or unappealable or unappealed within the time allowed for appeal,
or which has not been admitted to be invalid or unenforceable through reissue or
disclaimer or otherwise. For the purposes of determining royalties due and
payment obligations under this Agreement, any claim being prosecuted in a
pending patent application included in the Licensed Patents shall be deemed a
Valid Patent Claim, provided that such claim is not pending for more than *****
in which the subject matter of the claim is disclosed, after which period it
shall cease to be considered a Valid Patent Claim until the patent issues.

 

1.53 “Work Plan” means the Work Plan attached hereto as Exhibit 2.2, and, unless
otherwise specified, as amended from time to time in accordance with Section
2.2.

 

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2. CONDUCT OF THE PROJECT AND COMMERCIALIZATION EFFORTS

 

2.1 Conduct. Commencing promptly after the Effective Date, Neose and Novo will
use Commercially Reasonable Efforts to carry out their respective obligations
under the Work Plan.

 

2.2 Creation and Modification of Work Plan. Attached hereto as Exhibit 2.2 is
the Work Plan, setting forth a project summary and timetable for the research
and development, scale-up and technology transfer activities to be conducted
under this Agreement. Neose shall be responsible for the development of
validated, GMP processes for the production of Reagents for use in the
manufacture of New Products and protocols for the use of the Reagents in the
manufacture of New Products by Novo, all as set forth in Exhibit 2.2. The Work
Plan may be amended or modified from time to time, but only in a writing signed
by each Party’s Designated Representative and specifying the Parties’ estimate
of any additional Neose Project-Related Costs that will be paid by Novo as a
result of such amendment.

 

2.3 Funding

 

2.3.1 Estimate. The Neose Project-Related Costs are estimated to be *****, plus
the cost of materials. This estimate is based upon the Work Plan set forth in
Exhibit 2.2. If the Parties amend the Work Plan in a manner that requires any
new product or service to be provided by Neose (e.g., a new Reagent, expression
system, scale up activity) which is not currently incorporated in the Work Plan,
the Parties shall agree in writing on any increase in the Neose Project-Related
Costs that are authorized in connection with such amendment.

 

2.3.2 Payment. Novo will pay for the Neose Project-Related Costs quarterly in
advance. No earlier than thirty (30) days before the beginning of each Calendar
Quarter following the Effective Date, Neose will invoice Novo for such amount
based on a budgeted estimate of Neose Project-Related Costs for such Calendar
Quarter. Within thirty (30) days after the end of each Calendar Quarter
following the Effective Date, Neose shall submit to Novo a written report
setting forth the actual Neose Project-Related Costs for such Calendar Quarter,
and shall, as applicable, pay to Novo any amounts paid by Novo for such Calendar
Quarter in excess of the actual Neose Project-Related Costs shown in such
report, or invoice Novo for any additional amounts owed hereunder. Novo will pay
all invoices delivered under this Section 2.3 within ***** days after receipt.

 

-7-

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2.4 Management of Project

 

2.4.1 Project Managers. Within thirty (30) days after the Effective Date, each
of the Parties shall appoint a Project Manager, who will be its primary contact
regarding the Project. The Project Managers shall keep each other reasonably
informed of the progress under the Work Plan and shall be responsible for
maintaining appropriate records of the deliberations and decisions of the
Project Managers and the Steering Committee. The Project Managers shall be
responsible for overseeing and directing the day-to-day activities conducted at
their respective sites in accordance with the Work Plan and suggesting changes
for consideration by the Steering Committee. A Party may change its Project
Manager at any time, and from time to time, effective upon notice to the other
Party of such change.

 

2.4.2 Establishment and Responsibilities of Steering Committee. Promptly
following the Effective Date, the Parties will establish a Steering Committee to
monitor the progress of the Work Plan, to evaluate and recommend to the Parties
any proposed amendments or modifications to the Work Plan and the costs thereof,
to approve and monitor compliance with any publication policy provided to it by
Novo, and to carry out all other obligations assigned to it under this Agreement
or by the Parties. Each Party may designate a co-chairperson and secretary of
the Steering Committee.

 

2.4.3 Action by Steering Committee and Dispute Resolution. The Steering
Committee shall consist of such number of members and alternate members as the
Parties may determine from time to time. Each Party shall appoint fifty percent
(50%) of the permanent and alternate members of the Steering Committee. The
members of the Steering Committee shall include members of senior management of
each Party. The members of the Steering Committee representing a Party and
present at a meeting shall have one vote, collectively. If the Steering
Committee cannot reach agreement on any matter, ***** shall be entitled to
*****; provided, however, that if the Steering Committee cannot reach agreement
on any matter involving a change in the scope of work to be conducted by *****
under the Work Plan, the schedule of the work to be conducted by ***** under the
Work Plan, or the *****, such dispute shall resolved in accordance with Section
13.

 

2.4.4 Changes to Steering Committee. Each Party may remove and replace its
representatives on the Steering Committee at any time, without cause, upon
written notice to the other Party. An alternate member designated by a Party
shall be entitled to participate in the absence of a permanent member designated
by such Party. All references to “members” in this Agreement refer to the then
permanent members of the Steering Committee and any alternate member acting in
the place of a permanent member.

 

2.4.5 Meetings. Regular meetings of the Steering Committee shall be scheduled by
the Project Managers or the secretary of the Steering Committee designated by
either Party. Special meetings of the Steering Committee may be called by the
Project Managers or by any two or more members, at least one of whom represents
each Party. Meetings may be in person or by teleconference or videoconference,
and notice of meetings may be by email. Each Party will bear its own costs in
connection with the management of the Project and the Steering Committee.

 

2.4.6 No Waiver. No action, nor any failure to act, by the Steering Committee
shall alter, amend, waive or otherwise affect the obligations of the Parties
under this Agreement. The Parties may amend this Agreement only in accordance
with Section 15.6, and a Party may waive any of its rights under this Agreement
only in accordance with Section 15.9.

 

- 8 -

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2.5 Cooperation. Throughout the Project, each Party shall cooperate with the
other in the conduct of the Work Plan, and will provide such information in its
possession or under its Control to the other Party as is reasonably necessary
for the other Party to comply with and satisfy the requirements of any and all
international, national, state, local or other laws, treaties, rules, procedures
or regulations for purposes of this Agreement, or to carry out its obligations
under this Agreement.

 

2.6 Permits. Prior to the commencement of any clinical trials, Commercial Sales
or other use of any New Product in a Regulated Market, Novo shall obtain at its
expense all Permits required for such activity in the applicable jurisdictions.
Novo shall submit all applications for Permits for the New Products in the name
of Novo or its Affiliates. Novo shall hold all such Permits, if and when
granted, in its name alone. Neose, at Novo’s expense, shall provide reasonable
assistance and technical support to Novo in obtaining the Permits for the New
Products. Novo shall pay all expenses with respect to obtaining the Permits for
the New Products including, without limitation, the cost of clinical trials and
preparation and prosecution of permit applications. Novo shall be solely
responsible for renewing any Permits at its expense. Neose shall supply Novo, at
Novo’s expense, with Reagents for producing New Products under the terms and
conditions of the Supply Agreement.

 

2.7 Additional Development and Commercialization Activities. Except as set forth
in the Work Plan or the Supply Agreement, Neose shall not have any obligation to
perform any further research, development, technology transfer, technical
support, improvements, modifications, or other activities. Novo shall use
Commercially Reasonable Efforts to obtain Regulatory Approvals for, and
Commercial Sales of, each New Product.

 

3. FEES AND DEVELOPMENT PAYMENTS

 

3.1 License Fee. In consideration of the licenses granted by Neose under this
Agreement and the ***** Agreement, Novo shall pay Neose a one-time,
nonrefundable upfront fee of ***** within ten (10) days after the Effective
Date.

 

3.2 Milestone Payments Relating to Development of the New Product. In
consideration of the development efforts of Neose under the Work Plan, Novo
shall pay Neose the amount of each milestone payment set forth in this Section
3.2 upon the occurrence of the earlier to occur of the respective milestone
event with respect to the development of the New Product or the corresponding
anniversary date specified below. The Parties agree that Neose shall have earned
the right to receive a milestone payment, and Novo shall be obligated to pay the
milestone payment and shall have met its diligence obligations with respect to
the milestone, in each case, as a result of either (i) the achievement of the
milestone event prior to the occurrence of the corresponding anniversary date or
(ii) the occurrence, alone, of the corresponding anniversary date.

 

3.2.1 ***** upon the ***** to occur of: (i) the first date on which there shall
be a candidate which has been shown to meet the *****, and Neose shall have
delivered to Novo ***** for the production of such candidate; and (ii) the *****
anniversary of the Effective Date.

 

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3.2.2 ***** upon the earlier to occur of ***** of ***** with respect to the New
Product or the ***** anniversary of the achievement of the milestone described
in Section 3.2.1 above.

 

3.2.3 ***** upon the earlier of ***** of the ***** of the New Product ***** or
the ***** anniversary of the achievement of the milestone described in Section
3.2.2 above.

 

3.2.4 ***** upon the earlier to occur of ***** of the ***** of the New Product
or the ***** anniversary of the achievement of the milestone described in
Section 3.2.3 above.

 

3.2.5 ***** upon the earlier to occur of the first ***** for the New Product or
the ***** anniversary of the achievement of the milestone described in Section
3.2.4 above.

 

3.2.6 ***** upon the ***** of the New Product in *****.

 

3.2.7 ***** upon the ***** of the New Product in *****.

 

3.3 Restriction on Multiple Milestone Payments. The Parties acknowledge and
agree that at anytime prior to the ***** for the New Product, the Steering
Committee may decide to continue the development of the New Product solely with
a back-up candidate if a candidate initially taken into development should fail
for ***** reasons, including, but not limited to, *****, or the occurrence of
*****. In the event that the Steering Committee makes such a decision, this
Agreement shall be amended to reflect, among other things, the resulting changes
to the Work Plan and the Neose Project-Related Costs mutually agreed upon by the
Parties. In such event, Novo ***** be required to pay ***** each of the
milestone payments set forth in Sections ***** through *****.

 

3.4 Coordination with ***** Agreement. The Parties agree that it may be
appropriate to adjust one or more of the anniversary dates set forth in Sections
***** through ***** as a result of ***** limitations (e.g., *****) that may be
encountered by Novo if the New Product and either or both of the products being
developed under the ***** Agreement are scheduled to pass through the same *****
at the same time. Novo may request such an adjustment at any time, and from time
to time, by providing notice of the proposed adjustment to Neose. Promptly after
receipt of such a notice, the Steering Committee shall meet to evaluate the
request. Within thirty (30) days after Novo provides such notice, the Steering
Committee shall provide a written recommendation to both Parties with respect to
such request. Within fifteen (15) days after receipt of any such recommendation,
the Steering Committee shall meet to discuss the recommendation and, if mutually
agreeable, to negotiate and propose to the Parties the terms of amendment(s) to
the Work Plan and this Agreement which would permit Novo to continue developing
the New Product and the ***** in a practical and efficient manner, with the goal
of minimizing the aggregate time to market for the New Product and the *****.

 

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4. PRODUCT PAYMENTS AND ROYALTIES

 

4.1 Royalties on Net Sales. Novo will pay to Neose royalties as a percentage of
annual Net Sales of each New Product during the Term at the applicable rates set
forth in this Section 4.1 and in accordance with this Section 4:

 

4.1.1 ***** of annual Net Sales of the New Product up to *****.

 

4.1.2 ***** of annual Net Sales of the New Product over *****.

 

4.2 Minimum Royalties. Commencing with the first ***** of the ***** full
Calendar Year following the First Commercial Sale of New Product, Novo will pay
minimum royalties in respect of the New Product for such Calendar Year and *****
during the Term, in the amounts set forth in this Section 4.2 and in accordance
with this Section 4:

 

4.2.1 For the ***** Calendar Year following the First Commercial Sale of the New
Product: *****.

 

4.2.2 For the ***** Calendar Year following the First Commercial Sale of the New
Product: *****.

 

4.2.3 For the ***** Calendar Year following the First Commercial Sale of the New
Product and ***** thereafter: *****.

 

All minimum royalty payments made in accordance with this Section 4.2 shall be
***** against royalties payable under Section ***** in respect of the New
Product in the same or any subsequent Calendar Quarter during the same Calendar
Year.

 

4.3 Competitive Product(s). If a Competitive Product (as defined below in this
Section 4.3) reaches a ***** equal to or greater than ***** of the ***** for a
New Product marketed by Novo, then the royalties otherwise payable in accordance
with Section 4.1, and the minimum royalties otherwise payable in accordance with
Section 4.2, with respect to the New Product shall be reduced by the applicable
percentage set forth below:

 

            ***** of Competitive Product            

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Reduction of Royalty Rate Otherwise Payable

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

More than *****

   

More than *****

   

More than *****

   

More than *****

   

 

 

 

 

 

For purposes of this Section 4.3, “Competitive Product” means any product
marketed by a Third Party that is not a Sublicensee of Novo, which product is a
***** with a ***** substantially equivalent to or better than the ***** of the
New Product marketed by Novo.

 

4.4 Royalty Payments. Novo shall make royalty payments to Neose on a quarterly
basis, within forty-five (45) days after the end of each Calendar Quarter.
Royalty payments due under Section 4.1 shall commence, with respect to each New
Product in each country, on the date of first Commercial Sale in such country.

 

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4.5 Currency Conversion. If any currency conversion from a foreign currency into
United States Dollars shall be required in connection with the calculation of
Net Sales, such conversion shall be made using the average exchange rate for the
applicable Calendar Quarter, as reported by the Wall Street Journal.

 

4.6 Payment Reports. Within forty-five (45) days after the close of each
Calendar Quarter, Novo shall furnish to Neose a written report showing in
reasonably specific detail, on a country-by-country basis for each New Product:

 

4.6.1 All Net Sales of the New Product during such quarter expressed in United
States Dollars.

 

4.6.2 The exchange rates used in determining Net Sales of the New Product in
United States Dollars in accordance with Section 4.5.

 

4.6.3 Royalties payable in United States Dollars based upon such Net Sales of
the New Product during such quarter.

 

4.7 Payment Method. Novo shall make all payments under this Agreement in United
States Dollars by bank wire transfer in immediately available funds to Hudson
United Bank, ABA # *****, Acct Name: Neose Technologies, Inc., Acct # *****, or
to such other account as Neose shall designate to Novo in writing before such
payment is due.

 

4.8 Records; Audits. Novo shall, and shall cause its Affiliates and
Sublicensees, if any, to keep complete, true, and accurate books of account and
records in connection with the production and Commercial Sales of New Products
in sufficient detail to permit accurate determination of all figures necessary
for verification of payments required to be made by Novo under this Agreement.
Novo shall, and shall cause its Affiliates and Sublicensees, if any, to,
maintain such records for at least ***** years following the end of the quarter
to which such books and records pertain. Neose shall have the right, at its
expense, through a certified public accounting firm reasonably acceptable to
Novo, to examine the records required to be maintained by Novo, its Affiliates
and Sublicensees under this Section 4.8 upon reasonable notice and during
regular business hours prior to the termination or expiration of this Agreement
and for ***** years thereafter for the purpose of verifying the reports
delivered pursuant to Section 4.6 provided that such examination shall not take
place more often than once a year. Novo may require such certified public
accounting firm to sign a confidential disclosure agreement prior to permitting
such certified public accounting firm to have access to its books, records or
facilities. Such accounting firm shall report to Neose only whether or not the
reports submitted by Novo are accurate for the period covered and the details
concerning any identified discrepancies. If any such audit uncovers an
underpayment, Novo shall promptly pay to Neose the amount of such underpayment.
If any such underpayment exceeds five percent (5%) of the amount due, Novo shall
pay the entire expense of such audit within twenty (20) days after invoice.

 

4.9 Taxes. Novo may deduct the amount of any taxes imposed on Neose which are
required to be withheld or collected by Novo or its Sublicensees under the laws
of any country from amounts owing to Neose hereunder to the extent Novo, its
Affiliates or Sublicensees pay such withholding taxes to the appropriate
governmental authority on behalf of Neose and promptly deliver to Neose a
receipt or other proof of payment of such taxes.

 

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5. INTELLECTUAL PROPERTY GRANTS AND RIGHT OF NEGOTIATION

 

5.1 Neose Technology. Subject to the terms and conditions of this Agreement,
Neose hereby grants, and agrees to grant, to Novo, as of the Effective Date, the
following rights and licenses:

 

5.1.1 Exclusive License. As of the Effective Date, Neose hereby grants, and
agrees to grant, to Novo an exclusive (even as to Neose), royalty-bearing
license under the Neose Technology in the Field of Use during the Term, (i) to
conduct research, sample, develop (including clinical development), manufacture,
make, use, market, promote, sell, offer for sale, have sold, distribute, import
and export New Products in the Territory, and (ii) to use the Reagents in the
Territory solely for the purpose of making New Products. Such license does not
permit Novo (x) to practice or use the Neose Technology outside the Field of Use
or (y) to sublicense any of its rights without the prior written approval of
Neose, except as provided in Section 5.1.2.

 

5.1.2 Limited Sublicense Rights. Novo shall be entitled to grant full
sublicenses to its Affiliates and limited sublicenses to its distribution,
marketing and/or sales partners, in each case, in compliance with the provisions
of this Section 5.1.2 and Section 5.1.3. In any sublicense granted under this
Section 5.1.2 to a Third Party that is not an Affiliate of Novo, Novo may grant
the Sublicensee only the following rights: to market, promote, sell, offer for
sale, have sold, distribute, import and export New Products for Novo. Novo shall
not be entitled to disclose any Confidential Information of Neose to a
non-Affiliate Sublicensee under a sublicense permitted to be granted under this
Section 5.1.2. Novo shall include in each sublicense granted under this Section
5.1.2 all of the terms and conditions necessary to ensure Novo’s compliance with
this Agreement, and the provisions of Section 5.1.4 shall apply to each
sublicense granted under this Section 5.1.2.

 

5.1.3 Required Agreement for Certain Proposed Sublicensees. Prior to entering
into discussions with any proposed sublicensee, Novo shall identify the proposed
sublicensee to Neose. If the proposed sublicensee is not an Affiliate of Novo,
Novo shall obtain the approval of Neose prior to entering into such discussions
and shall obtain the proposed sublicensee’s execution and delivery to Neose of a
non-disclosure and non-use agreement substantially in the form attached hereto
as Exhibit 5.1.3. If the proposed sublicensee is an Affiliate of Novo, Novo may
enter into the proposed sublicense without obtaining the approval of Neose if:
(i) the sublicense between Novo and the Sublicensee/Affiliate provides that
Neose is a third-party beneficiary of the Sublicense, and (ii) Neose receives an
original fully executed copy of the sublicense between Novo and the
Sublicensee/Affiliate within five (5) business days after its execution.

 

5.1.4 Liability. Novo shall remain primarily liable to Neose for the performance
by each Affiliate and Sublicensee in accordance with the terms and conditions of
this Agreement, and each sublicense shall terminate upon the termination of this
Agreement or any breach by the Sublicensee of the Required Agreement between
Neose and the Sublicensee, if any.

 

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5.1.5 Reservation of Rights. Neose hereby reserves to itself all right, title
and interest in and to the Neose Technology not expressly granted in Section
5.1. Without limiting the foregoing, in no event shall this Agreement be
construed to prohibit Neose from engaging in any of the following activities:
(a) practicing the processes, methods and Know-How of the Neose Technology
outside of the Field of Use, including, without limitation, with proteins that
may be considered competitive with any of the New Products, subject, however, to
Novo’s rights with respect to Product-Candidates under Section 5.3; (b)
developing, making, using or selling proteins or Reagents, whether in
conjunction with the Neose Technology or otherwise, outside of the Field of Use;
or (c) entering into and performing agreements with Third Parties regarding any
of the foregoing including, without limitation, research agreements, development
agreements and licensing agreements.

 

5.2 Novo Technology. Subject to the terms and conditions of this Agreement, and
solely to the extent necessary to enable Neose to carry out its obligations
under the Work Plan, Novo hereby grants to Neose, for the term of the Work Plan,
a non-exclusive, royalty-free, license under the Novo Technology to use such
Novo Technology for the sole purpose of carrying out its obligations under the
Work Plan. Novo shall retain at all times all of its rights, title and interest
to the Novo Technology.

 

5.3 Option and Right of First Negotiation

 

5.3.1 Option. Neose hereby grants to Novo an option to negotiate a worldwide
license under the Neose Technology to conduct research, sample, develop
(including clinical development), manufacture, make, use, market, promote, sell,
offer for sale, have sold, distribute, import and export each and every
Product-Candidate. The option granted under this Section 5.3.1 shall be
exercisable by Novo, from time to time during the Term with respect to each
Product-Candidate, within fifteen (15) days after Novo receives notice of the
Product-Candidate from Neose.

 

5.3.2 Negotiations. If Novo duly exercises its option under Section 5.3.1 with
respect to a Product-Candidate, the Parties shall enter into negotiations to
consummate an agreement, which would grant to Novo the license described in
Section 5.3.1 with respect to such Product-Candidate, upon commercially
reasonable terms, to be negotiated promptly, diligently and in good faith by the
Parties. If the Parties shall not have entered into such a license within
forty-five (45) days after Novo’s exercise of its option with respect to such
Product-Candidate, Neose shall be free to proceed with the development and/or
commercialization of the Product-Candidate, whether alone or with a Third Party
or Third Parties, without any further obligation to Novo with respect to such
Product-Candidate, except as provided in Section 5.3.3.

 

5.3.3 Right of First Negotiation. During the Term, Neose shall not enter into an
agreement with a Third Party relating to the use of the Neose Technology for the
further development and commercialization of a Product-Candidate without first
allowing Novo to enter into an agreement with respect to such Product-Candidate
upon substantially the same terms. If Neose shall not have already offered (and
Novo shall not have already refused) substantially the same terms to Novo under
Section 5.3.2, Neose shall provide notice to Novo of the proposed terms and
conditions of any such agreement, and Novo may exercise its right of first
refusal under this Section 5.3.3 by notice to Neose within fifteen (15) days
after receiving the proposed terms and conditions from Neose. If Novo does not
exercise its right of first refusal

 

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with respect to the terms proposed by Neose, or exercises its right of first
refusal but does not enter into an agreement with Neose upon substantially the
proposed terms within thirty (30) days after receipt thereof, Neose shall be
free to proceed with the further development and/or commercialization of such
Product-Candidate with a Third Party or Third Parties, upon terms no more
favorable to the Third Party or Third Parties than those offered to Novo,
without any further obligation to Novo with respect to such Product-Candidate.

 

5.4 No Other Right or Licenses. Except for the rights and licenses expressly
granted in this Agreement, nothing in this Agreement shall be deemed to grant to
any Party any other rights or licenses, including, without limitation, any
implied licenses.

 

6. OWNERSHIP OF INTELLECTUAL PROPERTY

 

6.1 No Transfer of Title. All Ownership Rights in and to the Neose Technology
and the Reagents shall remain at all times with Neose. All Ownership Rights in
the Novo Materials, any New Product, and the Novo Technology shall remain at all
times with Novo, subject to Novo’s obligation to assign certain Ownership Rights
to Neose under Section 6.3.

 

6.2 Improvements

 

6.2.1 Neose Improvements. Any and all Neose Improvements shall be owned by Neose
and shall be deemed to be part of the Neose Technology for all purposes,
including, without limitation, the license granted in Section 5.1. Except as
provided in Section 6.4, any and all Improvements made, conceived, or reduced to
practice solely by Neose shall be owned solely by Neose.

 

6.2.2 Novo Improvements. Except as otherwise provided in Section 6.3, any and
all Novo Improvements shall be owned by Novo for all purposes. Except as set
forth in Section 6.3, any and all Improvements made, conceived, or reduced to
practice, solely by Novo shall be owned solely by Novo.

 

6.2.3 Joint Improvements. Each of Neose and Novo shall own a one-half undivided
interest in any and all Joint Improvements. Neither Party shall be permitted to
license or sublicense its one-half undivided interest in any Joint
Improvement(s) to a Third Party that is not an Affiliate of Novo for use in
connection with any blood *****, except with the prior written approval of the
other Party.

 

6.2.4 Other Improvements. If any Improvements, other than Neose Improvements,
Novo Improvements and Joint Improvements, are made, conceived or reduced to
practice jointly by Neose and Novo under this Agreement, each Party shall own a
one-half undivided interest in and to any and all such Improvements and the
Parties shall not have any restriction with respect to the use thereof or any
requirement to report or account to the other Party with respect to any such
use, unless and except to the extent that the Parties may agree otherwise in
writing.

 

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6.3 Assignment by Novo.

 

6.3.1 Neose Improvements. To the extent that Novo may retain any Ownership
Rights in any Neose Improvements during the Term, Novo hereby irrevocably
assigns and transfers, and agrees to assign and transfer, to Neose any and all
such Ownership Rights, in perpetuity or for the longest period otherwise
permitted by law, without the necessity of further consideration, and Neose
shall be entitled to receive and hold in its own name all such Ownership Rights,
subject to Neose’s obligations to assign certain rights to Novo under Section
6.4.

 

6.3.2 Joint Improvements. If and when Novo terminates the development of New
Product during the Term, Novo hereby irrevocably assigns and transfers, and
agrees to assign and transfer to Neose, in perpetuity or for the longest period
otherwise permitted by law, without the necessity of further consideration, and
Neose shall be entitled to receive and hold in its own name all Ownership Rights
in and to the Joint Improvements. With respect to any Ownership Rights and
licenses that Novo is required to assign and transfer to Neose under this
Section 6.3.2, at the request of Neose, and at Neose’s expense, either before or
after termination of the Term, Novo shall assist Neose in acquiring and
maintaining patent, copyright, trade secret and trademark protection upon, and
confirming Neose’s title in and to, any such respective Ownership Rights, and
Novo shall provide Neose appropriate documentation evidencing the licenses to
which Neose is entitled. Novo’s assistance shall include, but shall not be
limited to, signing all applications, and any other documents and instruments
for patent, copyright and any other proprietary rights, providing executed
license documents, cooperating in legal proceedings, and taking any other
actions considered necessary or desirable by Neose. For the purpose of
facilitating the above assignments, Novo agrees that any and all employees and
contractors employed or engaged by Novo and providing any service in connection
with the Project, prior to providing such service, shall have agreed in writing
to covenants consistent with Novo’s covenants set forth in this Section 6.3.

 

6.4 Assignment by Neose. To the extent that Neose may retain any Ownership
Rights in any Novo Improvements during the Term, Neose hereby irrevocably
assigns and transfers, and agrees to assign and transfer, to Novo any and all
such Ownership Rights, in perpetuity or for the longest period otherwise
permitted by law, without the necessity of further consideration, and Novo shall
be entitled to receive and hold in its own name all such Ownership Rights,
subject to Novo’s obligations to assign or license certain rights to Neose under
Section 6.3. With respect to any Ownership Rights that Neose is required to
assign and transfer to Novo under this Section 6.4, at the request of Novo, and
at Novo’s expense, either before or after the Term, Neose shall assist Novo in
acquiring and maintaining patent, copyright, trade secret and trademark
protection upon, and confirming Novo’s title in and to, any such respective
Ownership Rights. Neose’s assistance shall include, but shall not be limited to,
signing all applications, and any other documents and instruments for patent,
copyright and any other proprietary rights, cooperating in legal proceedings,
and taking any other actions considered necessary or desirable by Novo. For the
purpose of facilitating the above assignments, Neose agrees that any and all
employees and contractors employed or engaged by Neose and providing any service
in connection with the Project, prior to providing such service, shall have
agreed in writing to covenants consistent with Neose’s covenants set forth in
this Section 6.4.

 

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6.5 Prosecution and Maintenance of Patent Rights

 

6.5.1 Solely Owned Patent Rights. Each Party shall, in its sole discretion,
prepare, file, prosecute and maintain all patent applications and patents
covering its Patent Rights and Improvements that the Party owns pursuant to
Section 6. Neose shall use reasonable commercial efforts to provide to Novo for
review and comment, at least ten (10) days prior to filing, all patent claims
relating specifically to the New Product to be filed by Neose, and Neose shall
give due consideration to all comments thereon that are made by Novo within the
period ending two days before the proposed filing date.

 

6.5.2 Patent Rights with Respect to Joint Improvements. With respect to Joint
Improvements, the Parties shall meet to determine whether patent protection is
appropriate and, if so, in which countries, if any, patent applications claiming
such joint inventions and discoveries should be filed. Novo shall file,
prosecute, and maintain, at its expense, such joint patent applications. Novo
may at any time, in its sole discretion, discontinue the preparation,
prosecution or maintenance of such joint patent applications, in which case Novo
will give Neose sufficient notice to enable Neose to, and Neose may, file,
prosecute and maintain such applications.

 

6.6 Enforcement of Ownership Rights

 

6.6.1 Reports of Infringement. Novo shall promptly report in writing to Neose
during the Term any infringement or misappropriation or suspected infringement
or misappropriation of any Neose Technology of which Novo becomes aware and
shall provide Neose with its full cooperation in the protection and enforcement
of the Neose Technology and all available evidence supporting said infringement,
misappropriation, suspected infringement or unauthorized use or
misappropriation. Neose shall reimburse Novo for its reasonable, documented
costs of such cooperation, unless such infringement or misappropriation is by an
Affiliate or Sublicensee of Novo.

 

6.6.2 Right to Institute Suit. Neose shall have the sole right to initiate an
infringement or other appropriate suit against any Third Party who at any time
has infringed or is suspected of infringing or misappropriating, the Neose
Technology. Prior to initiating any such suit, the Designated Representatives
shall consult with each other on an expedited basis, and Neose shall give due
consideration to any reasonable requests Novo may make relating to the
advisability of bringing the suit. Neose shall not enter into any settlement,
consent judgment or other voluntary final disposition of such suit that would
adversely affect Novo’s rights under this Agreement without Novo’s prior written
consent, which consent shall not be unreasonably withheld. In the event that
Neose recovers any sums in such suit by way of damages or in settlement thereof,
Neose shall be entitled to retain the same.

 

6.6.3 Continued Infringement. If Neose fails to either bring suit against or
enter into negotiations for settlement with such Third Party within six (6)
months after receipt of notice of such infringement and Novo is of the opinion
that the alleged infringement or misappropriation of Neose Technology is
occurring in the Field of Use then, upon Novo’s written request, the Parties
shall seek the opinion of patent counsel acceptable to both Parties as to
whether there has been or continues to be a misappropriation or infringement of
the Neose Technology in the Field of Use by such Third Party. If such patent
counsel concurs with Novo’s opinion, Novo shall have the right, but not the
obligation, to bring suit against such Third Party under the Neose Technology
and to join Neose as a party plaintiff. Neose will cooperate with

 

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Novo in any such suit brought against a Third Party and shall have the right to
consult with Novo and to participate in and be represented by counsel in such
suit at its own expense. In the event that Novo recovers any sums in such suit
by way of damages or in settlement thereof, such sums shall be used first to
reimburse each of Novo and Neose for their documented, out-of-pocket legal
expenses, with Novo retaining any remaining amounts.

 

6.7 Novo Trademarks. Subject to its assignment obligations under Section 6.3.2,
Novo shall select and own the trademarks for marketing the New Products in the
Territory. All expenses for (i) registration of such trademarks, and (ii)
bringing, maintaining and prosecuting any action to protect or defend such
trademarks, shall be borne by Novo, and Novo shall retain all recoveries
therefrom.

 

7. BLOCKING PATENTS

 

7.1 Mutual Information. Each Party shall immediately notify the other if a claim
or other proceedings are brought against either Party alleging that the use of
the Neose Technology in making, using or selling the New Product infringes upon
the Patent Rights of a Third Party.

 

7.2 Defense of Third Party Action. If claims or proceedings are brought against
Novo by a Third Party alleging that the use of the Neose Technology to produce a
New Product infringes upon the Patent Rights of a Third Party, the Designated
Representatives shall consult on an expedited basis, and Neose shall give due
consideration to any reasonable request of Novo relating to the proposed defense
or settlement of such claims or proceedings. Subject to Section 7.4, the final
decision whether or not and, as the case may be, how to defend or settle such
claims or proceedings shall be with Neose. Neose shall immediately notify Novo
of such decision sufficiently in advance of any deadlines by which formal
responses are due in any such proceedings to enable Novo to undertake its own
defense and Novo shall have the right to join any such proceedings as a party
thereto at its own expense by counsel of its own choice. Each Party shall
provide the other with such assistance as is reasonably necessary and shall
cooperate in the defense of any such action or proceeding. Neose shall not enter
into any settlement, consent judgment, or other voluntary final disposition of
such suit that would adversely affect Novo’s rights under this Agreement or
which would result in Novo being liable for damages, without Novo’s prior
written consent, which consent shall not be unreasonably withheld.

 

7.3 Declaratory Judgment Action. Neose shall have the right, but not the
obligation, to file any declaratory judgment action in any court of competent
jurisdiction as to questions of validity or infringement of any Third Party
patent relating to the use of the Neose Technology.

 

7.3.1 Cooperation. The Parties shall closely cooperate in any such declaratory
judgment action. In conducting such action, the Parties shall render each other
all reasonable assistance, free of charge. The final strategy in such action
shall be determined by Neose and Neose’s legal counsel in coordination with Novo
and any additional legal counsel of Novo.

 

7.3.2 Costs. Subject to Article 11 hereof, each Party shall bear its own costs
and expenses incurred in connection with actions pursuant to Sections 7.2 and
7.3.

 

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7.4 Third-Party Licenses

 

7.4.1 Novo Third-Party Licenses. In the event that Novo is of the opinion, at
any time during the Term, that a license under any Blocking Patent is necessary
or advisable for purposes of enabling Novo to exercise its license rights under
Section 5.1.1, it shall notify Neose. The Parties shall then seek an opinion of
patent counsel acceptable to both Parties. If such patent counsel concurs with
Novo’s opinion, Novo and Neose shall co-operate to obtain such a license for the
benefit of Novo and, as the case may be, also for Neose, in accordance with the
following provisions:

 

7.4.1.1 Neose shall be primarily responsible for obtaining any such Third Party
license at its own expense. The matter shall be deemed resolved if Neose is
granted a license, *****, under the relevant Blocking Patent that would make the
continued exercise of the rights granted to Novo by Neose hereunder
non-infringing with respect to *****. ***** shall be solely responsible for
*****.

 

7.4.1.2 However, in the event that Neose is unable to resolve the matter in
accordance with Section 7.4.1.1 within one hundred twenty (120) days from
receipt of notice from Novo upon terms that are commercially reasonable to Neose
at Neose’s discretion, then Novo shall be entitled to negotiate a license in
favor of Novo under such Blocking Patents; provided that to the extent that Novo
must ***** under such license, Novo may ***** against any payments owed under
Sections 4.1 or 4.2, provided that no payment owed under Section 4.1 or 4.2
shall be ***** more than ***** as a result of the operation of this Section
7.4.1.2.

 

7.4.1.3 In relation to the negotiation and contracting of any such Blocking
Patent license, the provisions of this Section 7.4 shall prevail over the
provisions of Sections 7.2 and 7.3.

 

8. SUPPLY AGREEMENT

 

No later than ninety (90) days after Novo accepts the first batch of Reagents,
the Parties will execute and deliver the Supply Agreement under which Neose will
be a supplier to Novo of the Reagents needed to produce New Products in the
Field of Use. Pricing for Reagents will be based on Neose’s *****. The Parties
acknowledge and agree that Novo plans to have two production sites for the
supply of Reagents and that the costs of technology transfer to Novo or any
approved Sublicensee will be borne by Novo.

 

9. CONFIDENTIALITY

 

9.1 Confidential Information. With respect to any and all Confidential
Information received by one Party under this Agreement and/or during the course
of the Project, (the “Recipient”) from the other Party (the “Disclosing Party”)
at any time and from time to time prior to the Effective Date or during the
Term, the Recipient for a period of five (5) years from the expiration or
earlier termination of this Agreement: (a) shall maintain the secrecy of, and
hold in strict confidence, the Confidential Information received hereunder; (b)
shall not use such Confidential Information for any other purpose other than in
furtherance of this Agreement; and (c) shall not, without express written
authorization from the Disclosing Party, use, disclose

 

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or grant the use of such Confidential Information to any other Persons except to
those of the Recipient’s directors, officers, employees, and advisors to whom
such disclosure is reasonably necessary in furtherance of this Agreement and
each of whom is otherwise bound to Recipient by contract or legal or fiduciary
obligation at the time of such disclosure to maintain the secrecy of, and hold
in confidence, such Confidential Information. The Recipient shall notify the
Disclosing Party promptly upon discovery of any unauthorized use or disclosure
of the Disclosing Party’s Confidential Information.

 

9.2 Permitted Disclosures. The obligations set forth in Section 9.1 shall not
apply to the extent that the Recipient: (a) is required to disclose information
by law, order or regulation of a governmental agency or a court of competent
jurisdiction, provided that the Recipient shall provide written notice thereof
and sufficient opportunity to the Disclosing Party to object to any such
disclosure or to request confidential treatment thereof; or (b) can demonstrate
that: (i) the information was public knowledge or generally known by publication
in scientific or other journals or other public media at the time of such
disclosure to the Recipient or thereafter became public knowledge or generally
known other than as a result of acts directly or indirectly attributable to the
Recipient in violation hereof; (ii) the information was rightfully known by the
Recipient (as shown by its written records) prior to the date of disclosure to
the Recipient by the Disclosing Party under this Agreement; (iii) the
information was disclosed to the Recipient on an unrestricted basis by a Third
Party not under a duty of confidentiality to the Disclosing Party, or (iv) the
information was independently developed by Recipient (as shown by its written
records) without any use of or access to information of the Disclosing Party. In
addition, provided that Neose maintains the confidentiality of Novo’s name, with
the prior approval of Novo, which approval will not be unreasonably withheld,
Neose will have the right to use data about Novo Materials and New Product (i)
to support a patent application by Neose, and (ii) for promotional purposes,
subject to compliance with any publication plan for the development of the New
Product that shall have been approved by the Steering Committee.

 

9.3 Enforcement. Both Parties agree that it would be impossible or inadequate to
measure and calculate the other Party’s damages from any breach of the covenants
set forth in this Agreement. Accordingly, the Disclosing Party agrees that if
the Recipient breaches any of such covenants, the Disclosing Party will have
available, in addition to any other right or remedy available, the right to
obtain an injunction from a court of competent jurisdiction restraining such
breach or threatened breach and to specific performance of any such provision of
this Agreement. Both Parties further agrees that no bond or other security shall
be required in obtaining such equitable relief and each Party hereby consents to
the issuance of such injunction and to the ordering of specific performance.

 

9.4 Publicity. Except as required by law, all publicity, press releases and
other announcements relating to this Agreement or the transactions contemplated
hereby, shall be reviewed in advance by, and shall be subject to the reasonable
approval of, both Parties. Attached hereto as Exhibit 9.4 is an approved form of
a press release to be issued by Neose upon the execution and delivery of this
Agreement.

 

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10. REPRESENTATIONS AND WARRANTIES

 

10.1 Mutual Representations and Warranties. Each Party hereby represents and
warrants to the other that:

 

10.1.1 The execution, delivery and performance of this Agreement by it have been
duly authorized by all requisite corporate action, and this Agreement has been
duly executed and delivered by and on behalf of such Party.

 

10.1.2 The execution, delivery and performance by such Party of this Agreement
does not (i) conflict with or violate any applicable statute, law, rule or
regulation, (ii) conflict with or violate its charter, bylaws or other
organizational document, or (iii) conflict with or constitute a default under
any contract or agreement of such Party.

 

10.2 Representations and Warranties of Neose. Neose warrants to Novo, as of the
Effective Date, that:

 

10.2.1 It is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, with the power and authority
to sign, deliver and perform all of its obligations under this Agreement.

 

10.2.2 It is the sole and exclusive owner of the Neose Patents, or otherwise
Controls the Neose Patents, and has the full corporate power and authority to
grant the licenses granted hereunder.

 

10.2.3 To Neose’s knowledge, the use of the Neose Technology pursuant to the
terms of this Agreement does not infringe upon the rights of any Third Party.

 

10.2.4 To Neose’s knowledge, there is no Blocking Patent that, if asserted by
Third Parties, would prevent Novo from using the Neose Technology to make New
Products hereunder.

 

10.2.5 To Neose’s knowledge, no claims or proceedings have been brought by Third
Parties alleging the invalidity in whole or in part of any of the Neose Patents.

 

10.3 Representations and Warranties of Novo. Novo warrants to Neose, as of the
Effective Date, that:

 

10.3.1 Novo Nordisk A/S is a corporation duly incorporated, validly existing and
in good standing under the laws of the Kingdom of Denmark, with the power and
authority to sign, deliver and perform all of its obligations under this
Agreement.

 

10.3.2 Novo Nordisk Health Care AG is a corporation duly incorporated, validly
existing and in good standing under the laws of Switzerland, with the power and
authority to sign, deliver and perform all of its obligations under this
Agreement.

 

10.3.3 It is the sole and exclusive owner of the Novo Technology, and has the
full corporate power and authority to grant the licenses granted hereunder.

 

10.3.4 To Novo’s knowledge, the use of the Novo Technology pursuant to the terms
of this Agreement does not infringe upon the rights of any Third Party.

 

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10.3.5 To Novo’s knowledge, there is no Blocking Patent that, if asserted by
Third Parties, would prevent Neose from using the Novo Technology to perform its
activities under the Work Plan.

 

10.3.6 To Novo’s knowledge, no claims or proceedings have been brought by Third
Parties alleging the invalidity in whole or in part of any of the Novo
Technology.

 

10.4 Disclaimer of Warranties. EXCEPT FOR THE WARRANTIES SET FORTH IN SECTION
11.3, EACH PARTY HEREBY DISCLAIMS ANY AND ALL OTHER REPRESENTATIONS AND
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE OR NON-INFRINGEMENT.

 

10.5 Acknowledgment by Novo. Novo acknowledges and hereby agrees that Neose
makes no representations or warranties as to the outcome of the Project,
including without limitation whether the application of the Neose Technology
will improve any of the Novo Materials.

 

11. INDEMNIFICATIONS AND LIMITED LIABILITY

 

11.1 Indemnification by Neose. Neose shall indemnify, defend and hold harmless
Novo and its Affiliates, and each of their respective employees, officers,
directors and agents (each, a “Novo Indemnified Party”) from and against any and
all claims, suits, losses, obligations, damages, deficiencies, costs, penalties,
liabilities (including strict liabilities), assessments, judgments, amounts paid
in settlement, fines, and expenses (including court costs and reasonable fees of
attorneys and other professionals) (individually and collectively, “Losses”)
resulting from or arising in connection with (i) the breach by Neose of any of
its representations or warranties contained in Section 10, (ii) any claim by a
Third Party alleging that the use of the Neose Technology infringes upon the
Patent Rights of such Third Party, and (iii) any activities of Neose under this
Agreement. Notwithstanding the foregoing, Neose shall have no obligation to
indemnify, defend or hold harmless a Novo Indemnified Party for any Losses to
the extent that such Losses were caused by (x) the negligence or willful
misconduct of any of the Novo Indemnified Parties, or (y) a breach by Novo of
any of its representations and warranties set forth in Section 10.

 

11.2 Indemnification by Novo. Novo shall indemnify, defend and hold harmless
Neose and its Affiliates, and each of their respective employees, officers,
directors and agents (each, a “Neose Indemnified Party”) from and against any
and all Losses resulting from or arising in connection with (i) the breach by
Novo of any of its representations and warranties set forth in Section 10, (ii)
the failure of any Affiliate to comply with any obligation of Novo applicable to
the Affiliate under this Agreement, (iii) the failure of any Sublicensee to
comply with any obligation under a sublicense granted by Novo hereunder, (iv)
the promotion, distribution, use, testing, marketing, sale, or other disposition
of any New Product, (v) any claim by a Third Party alleging that the use of the
Novo Technology or the manufacture, sale or use of New Products infringes upon
the Patent Rights of such Third Party, except to the extent such claims arise
solely as a result of the use of Neose Technology, and (vi) any activities of
Novo

 

- 22 -

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

under this Agreement. Notwithstanding the foregoing, Novo shall have no
obligation to indemnify, defend or hold harmless a Neose Indemnified Party for
any Losses to the extent that such Losses were caused by (x) the negligence or
willful misconduct of Neose, its Affiliates, sublicensees, or any of their
respective employees, officers, directors, or agents, or (y) a breach by Neose
of any of its representations and warranties set forth in Section 10.

 

11.3 Indemnification Procedure. Each Party shall provide prompt written notice
to the other of any actual or threatened Loss or claim therefor of which the
other becomes aware; provided that the failure to provide prompt written notice
shall only be a bar to recovering Losses to the extent that a Party was
prejudiced by such failure. In the event of any such actual or threatened Loss
or claim therefor, each Party shall provide the other information and assistance
as the other shall reasonably request for purposes of defense and each Party
shall receive from the other all necessary and reasonable cooperation in such
defense including, but not limited to, the services of employees of the other
Party who are familiar with the transactions or occurrences out of which any
such Loss may have arisen. Each Party shall have the right to participate in and
with respect to the defense of any Loss or Losses with counsel of its choosing
whose fees shall be borne by the Party with liability for indemnification under
Sections 11.1 or 11.2, as the case may be, and no Party shall have the right to
settle any claim or agree to the entry of any judgment or other relief without
the prior consent of the other Party, which consent shall not be withheld
unreasonably.

 

11.4 Consequential Damages. NEITHER PARTY SHALL HAVE ANY LIABILITY TO THE OTHER
PARTY FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY, PUNITIVE OR
INCIDENTAL DAMAGES SUFFERED BY SUCH OTHER PARTY AND ARISING OUT OF OR RELATED TO
THIS AGREEMENT, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING
NEGLIGENCE), INCLUDING, WITHOUT LIMITATION, LOST PROFITS, AND WHETHER OR NOT
SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

11.5 Insurance. During the term of the Supply Agreement, Neose agrees to obtain
and maintain commercial general liability insurance with reputable and
financially secure insurance carriers to cover the use of the Neose Technology
in New Products, with limits of not less than ***** per occurrence and ***** in
the aggregate. Novo agrees to maintain during the Term commercial general
liability insurance with limits of not less than ***** per occurrence and *****
in the aggregate to cover its indemnification obligations under Section 11.2. In
addition, Novo agrees to maintain during the Term clinical trials insurance and
product liability insurance with limits reasonable to cover its indemnification
obligations under Section 11.2. All insurance shall be procured with reputable
and financially secure insurance carriers.

 

- 23 -

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12. TERM AND TERMINATION

 

12.1 Term. The term of this Agreement (the “Term”) shall commence on the
Effective Date and, unless sooner terminated in accordance with Section 12.2,
shall terminate on the expiration of the last to expire patent included in the
Neose Technology incorporating a Valid Patent Claim that would be infringed by
making, using, selling, offering to sell, importing or exporting New Product,
after which Novo shall have a perpetual, fully paid up, royalty free, exclusive
(even as to Neose) license to commercialize New Product.

 

12.2 Termination

 

12.2.1 Termination of Project Plan. If the Project is terminated by mutual
agreement, this Agreement will automatically terminate.

 

12.2.2 No Commercial Sale. If after achievement of the milestone described in
Section 3.2.1, Novo ceases to exert Commercially Reasonable Efforts toward the
development or commercialization of New Product or wishes to terminate the
development of New Product before Regulatory Approval of New Product for reasons
other than ***** relating, in each case, to New Product, Novo shall provide
notice thereof to Neose, specifying the reasons therefor, together with a *****
of *****, and this Agreement will terminate upon receipt by Neose of such notice
and payment from Novo.

 

12.2.3 Termination for Cause.

 

12.2.3.1 Breach. A Party shall have the right to terminate this Agreement at any
time for a material breach of this Agreement by the other Party upon written
notice by the non-breaching Party to the other Party describing such breach in
reasonable detail and stating the non-breaching Party’s intention to terminate
this Agreement, provided that the other Party shall have a period of sixty (60)
days from the date of such notice to cure the breach, or, if such breach is not
susceptible of being cured within such sixty (60) day period, and the breaching
Party utilizes diligent good faith efforts to cure such breach, then such period
shall be extended to one hundred twenty (120) days. If such breach is cured
within the applicable period, the termination notice shall become ineffective.
Otherwise, the termination shall become effective upon the expiration without
cure of the applicable period.

 

12.2.3.2 Bankruptcy. A Party shall have the right to terminate this Agreement at
any time upon the filing or institution of bankruptcy, reorganization,
liquidation or receivership proceedings, or upon an assignment of a substantial
portion of the assets of the benefit of creditors by the other Party, or in the
event a receiver or custodian is appointed for such Party’s business, or if a
substantial portion of such Party’s business is subject to attachment or similar
process; provided, however, that in the case of any involuntary bankruptcy
proceeding, such right to terminate shall only become effective if the
proceeding is not dismissed within sixty (60) days after the filing thereof.

 

12.2.3.3 Termination by Novo. Novo may terminate this Agreement at any time
without cause upon ninety (90) days prior written notice to Neose of such
termination, provided that Novo shall pay to Neose one hundred percent (100%) of
all documented Neose Project-Related Costs and any other costs incurred or
accrued by Neose prior to the effective date of such termination for the conduct
of the Work Plan through the date of termination.

 

- 24 -

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

12.3 Effect of Termination or Expiration

 

12.3.1 Prior Obligations. Termination or expiration of this Agreement shall not
relieve the Parties of any obligation arising prior to the effective date of
such termination or expiration and shall not constitute a waiver of any right of
the Parties under this Agreement as a result of breach or default.

 

12.3.2 Confidential Information. Upon the termination or expiration of this
Agreement, each Recipient shall, as the Disclosing Party may direct, destroy or
return to the Disclosing Party promptly all tangible materials provided to
Recipient by the Disclosing Party that embody the Disclosing Party’s
Confidential Information and shall erase or delete all of the Disclosing Party’s
Confidential Information embodied in any magnetic, optical or intangible medium
or stored or maintained on any information storage and/or retrieval device, and
deliver to the Disclosing Party a certification of such destruction, return,
erasure or deletion signed by an officer of the Disclosing Party.

 

12.3.3 Survival. No termination under this Agreement shall constitute a waiver
of any rights or causes of action that either Party may have for any acts or
omissions or breach under this Agreement by the other Party prior to the
termination date. The following Sections of this Agreement shall survive the
expiration or any termination of this Agreement in accordance with their
respective meanings: Sections 4.8, 5.1.2, 6, 9, 11, 12, 13, 15.2, 15.4, 15.5,
15.7, 15.8, 15.9, 15.10, 15.13 and any other provision required to interpret
this Agreement.

 

12.3.4 Effect on Sublicensees. Any sublicenses granted by Novo hereunder shall
automatically terminate or expire at the same time this Agreement terminates or
expires.

 

13. DISPUTE RESOLUTION

 

13.1 By Senior Officers. Except as otherwise provided in Section 9.3, all
disputes arising under this Agreement will first be submitted in writing for
dispute resolution to the Designated Representative of each Party. If the
dispute is not resolved within forty-five (45) days, the dispute shall be
referred to arbitration in accordance with Section 13.2.

 

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

13.2 Arbitration

 

13.2.1 Rules and Location. Except with respect to disputes arising under Section
9.3, all disputes arising between the Parties under this Agreement that have not
been resolved in accordance with Section 13.1 shall be settled by arbitration
conducted in accordance with the procedures of the International Chamber of
Commerce (“ICC”). The version of the arbitration rules which are in force when
the dispute occurs shall be decisive. The arbitration tribunal shall have one
arbitrator, who shall be selected from the panels of the ICC by agreement of the
Parties, provided, however that if the parties cannot agree on the arbitrator,
the arbitration tribunal shall consist of three arbitrators, one selected by
Neose, one selected by Novo, and the third selected by the other two
arbitrators. The arbitration tribunal may also decide on the validity of the
arbitration agreement. The place of the arbitration tribunal shall be
Philadelphia, Pennsylvania. The arbitration proceedings, orders and writs shall
be in the English language.

 

13.2.2 Judgments. Any award rendered by the arbitrators shall be binding upon
the Parties hereto and shall be final. Judgment upon the award may be entered in
any court of record of competent jurisdiction.

 

13.2.3 Expenses. Each Party shall pay its own expenses of arbitration and the
expenses of the arbitrators shall be equally shared unless otherwise ordered by
the arbitrators.

 

14. GOVERNMENT APPROVAL

 

14.1 HSR Filing. Novo, in consultation with Neose, shall make the determination
as to whether filing under the HSR Act is required. If any HSR filing is
required, to the extent necessary, each Party shall file, as soon as practicable
after the date this Agreement is executed, with the Federal Trade Commission
(the “FTC”) and the Antitrust Division of the United States Department of
Justice (the “Antitrust Division”) the notification and report form (the
“Report”) required under the HSR Act with respect to the transactions as
contemplated hereby and shall reasonably cooperate with the other Party to the
extent necessary to assist the other Party in the preparation of its Report and
to proceed to obtain necessary approvals under the HSR Act, including but not
limited to the expiration or earlier termination of any and all applicable
waiting periods required by the HSR Act. Each Party shall bear its own expenses,
including, without limitation, legal fees, incurred in connection with preparing
such filings.

 

14.2 Obligations. Each Party shall use its good faith efforts to eliminate any
concern on the part of any court or government authority regarding the legality
of the proposed transaction, including, if required by federal or state
antitrust authorities, promptly taking all steps to secure government antitrust
clearance, including, without limitation, cooperating in good faith with any
government investigation including the prompt production of documents and
information demanded by a second request for documents and of witnesses if
requested.

 

14.3 Additional Approvals. Each Party will cooperate and use respectively all
reasonable efforts to make all other registrations, filings and applications, to
give all notices and to obtain as soon as practicable all governmental or other
consents, transfers, approvals, orders, qualifications authorizations, permits
and waivers, if any, and to do all other things necessary or desirable for the
consummation of the transactions as contemplated hereby. Neither Party shall

 

- 26 -

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

be required, however, to divest or out-license products or assets or materially
change its business if doing so is a condition of obtaining approval under the
HSR Act or other governmental approvals of the transactions contemplated by this
Agreement.

 

14.4 Termination. If a Report is required to be filed under the HSR Act, either
Party hereto may terminate this Agreement by written notice to the other Party,
if, within one hundred twenty (120) days after this Agreement is signed by the
Parties, approval of the transactions contemplated by this Agreement under the
HSR Act has not been obtained or the notice and waiting period, as may be
extended by the FTC, under the HSR Act has not expired without adverse action
regarding this Agreement or the transactions contemplated hereby. If this
Agreement is terminated pursuant to this Section 14.4, then, notwithstanding any
provision in this Agreement to the contrary, neither Party hereto shall have any
further obligation to the other Party with respect to the subject matter of this
Agreement.

 

15. MISCELLANEOUS

 

15.1 Force Majeure. Any delays in or failures of performance by either Party
under this Agreement (other than failure to pay amounts due) shall not be
considered a breach of this Agreement if and to the extent caused by occurrences
beyond the reasonable control of the Party affected, including but not limited
to: acts of God, earthquake, new regulations or laws of any government, strikes
or other concerted acts of workers; fire, floods, explosions; riots; wars;
rebellion; and, sabotage, and any time for performances under this Agreement
shall be extended by the time of delay reasonably occasioned by such occurrence.
Each Party agrees to notify the other promptly of any factor, occurrence or
event coming to its attention that may affect its ability to meet its
obligations under this Agreement.

 

15.2 Notices. Any notice, consent or report (each, a “Notice”) required or
permitted to be given by either Party under this Agreement shall be in writing
and shall be either personally delivered or sent by facsimile (confirmed by
internationally-recognized express courier), or by internationally-recognized
express courier (such as Federal Express or DHL), to the other Party at its
address set forth below, or such new address as may from time to time be
supplied under this Agreement by a Party. Except as otherwise set forth in this
Agreement, any Notice shall be effective upon receipt by the addressee. Provided
that all postage or delivery charges are prepaid in full by the sender and the
Notice has been addressed as set forth in this Agreement

 

15.2.2 if such Notice is sent by facsimile (confirmed by internationally
recognized express courier which includes a copy of the report showing the date
and time of transmission), then the Notice shall be deemed to be received upon
transmission (if received on a business day) or the next business day following
transmission; and

 

15.2.3 if such Notice is sent by internationally-recognized express courier,
then the Notice shall be deemed to be received two (2) business days after
deposit with the courier service.

 

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If to Neose:

 

Neose Technologies, Inc.

102 Witmer Road

Horsham, PA 19044

Attention: General Counsel

Fax: 215-315-9100

 

If to Novo Nordisk A/S:

 

Novo Nordisk A/S

Novo Allé

2880 Bagsvaerd

Denmark

Attention: Vice President, Business Development

Fax: 011-45-4442-1830

 

With a copy to the same address:

 

Attention: General Counsel

Fax: 011-45-4498-0670

 

If to Novo Nordisk Health Care AG:

 

Novo Nordisk Health Care AG

Andreasstrasse 15

CH - 8050 Zurich Oerlikon

Switzerland

Attention: Head of Hematology Business Unit

Fax: 011-41-43-222-4404

 

15.3 Governing Law. This Agreement and any controversy, claim or dispute arising
under this Agreement shall be governed by, and construed in accordance with, the
laws of the Commonwealth of Pennsylvania, United States of America, without
regard to the conflicts of law principles of any jurisdiction.

 

15.4 U.S. Export Laws and Regulations. The Parties hereby acknowledge that their
rights and obligations under this Agreement may be subject to the laws and
regulations of the United States of America relating to the export of products
and technical information. Without limitation, each Party shall comply, and
assist the other Party in complying, with all such laws and regulations.

 

15.5 Assignment

 

15.5.1 Consent of Other Party. Neither Party may assign any of its rights or
obligations under the Agreement, in whole or in part, by operation of law or
otherwise, without the prior written consent of the other Party, which consent
shall not be unreasonably withheld, provided that either Party may assign (i)
any of its rights or obligations under this

 

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Agreement in any country to any of its Affiliates, for so long as they remain
Affiliates, and (ii) all of its rights or obligations under this Agreement in
connection with the merger or similar reorganization or sale of all or
substantially all of its assets or a sale of that part of its business relating
to the subject matter of the Agreement. A Party shall notify the other Party in
writing upon making such assignment.

 

15.5.2 Certain Assignments by Neose. In the event that Neose assigns all of its
rights or obligations under this Agreement in connection with the merger or
similar reorganization or sale of all or substantially all of its assets or a
sale of that part of its business relating to the subject matter of this
Agreement, Novo may, within the thirty (30)-day period following receipt of
notice from Neose of such assignment, elect to proceed under this Section 15.5.2
with respect to the provision of any reports required under this Agreement
and/or other disclosure of Confidential Information by Novo hereunder. Novo
shall make such election by notice in writing addressed to Neose and its
successor at the address of Neose set forth in Section 15.2.3 (as amended). From
and after an election by Novo under this Section 15.5.2, Novo shall be entitled
to provide reports required under this Agreement, and/or to provide any other
Confidential Information hereunder, to an independent certified public auditing
firm selected by Neose’s successor and reasonably acceptable to Novo, in lieu of
providing such reports and/or Confidential Information to Neose’s successor.
Such auditing firm shall report to Neose’s successor only (i) whether or not the
reports submitted by Novo are accurate and conform to any related payments made
to Neose’s successor and (ii) whether or not, in respect of other matters
relating to such reports and/or Confidential Information, Novo has complied with
its obligations under this Agreement. Novo shall be responsible for and promptly
shall pay all fees and expenses of the auditing firm in connection with its
services rendered in accordance with this Section 15.5.2.

 

15.5.3 Binding Effect. Any purported assignment in violation of this Section
15.5 shall be null and void. This Agreement shall bind and inure to the benefit
of each Party and its respective permitted successors and assigns.

 

15.6 Amendments. No change, modification, extension, termination or waiver of
the Agreement, or any of the provisions in this Agreement contained, shall be
valid unless made in writing and signed by duly authorized representatives of
the Parties to this Agreement.

 

15.7 Independent Contractors. The Parties to this Agreement are acting as
independent contractors and shall not be considered partners, joint venturers or
agents of the other. Neither Party shall have the right to act on behalf of, or
to bind, the other.

 

15.8 Severability. The provisions of this Agreement are intended to be
severable. If any one or more of the provisions of this Agreement is or becomes
invalid, is ruled illegal by a court of competent jurisdiction or is deemed
unenforceable under the current applicable law from time to time in effect
during the Term, it is the intention of the Parties that the remainder of the
Agreement shall not be affected thereby and shall continue to be construed to
the maximum extent permitted by law at such time. It is further the intention of
the Parties that in lieu of each such provision which is invalid, illegal, or
unenforceable, there shall be substituted or added as part of this Agreement by
such court of competent jurisdiction or any arbitrator(s) appointed pursuant to
Section 13.2, a provision which shall be as similar as possible, in economic and
business objectives as intended by the Parties to such invalid, illegal or
unenforceable provision, but shall be valid, legal and enforceable.

 

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15.9 Waiver. The waiver by either Party to this Agreement of any right under
this Agreement or the failure to perform or of a breach by the other Party shall
not be deemed a waiver of any other right under this Agreement or of any other
breach or failure by said other Party whether of a similar nature or otherwise.

 

15.10 No Third Party Beneficiaries. Each of Neose and Novo intend that only
Neose and Novo will benefit from, and are entitled to enforce the provisions of,
this Agreement and that no Third Party beneficiary is intended under this
Agreement.

 

15.11 Descriptive Headings; Section and Exhibit References. The headings of the
several sections of this Agreement are intended for convenience of reference
only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement. All references in this Agreement to a Section
or Exhibit shall be interpreted as references to the respective Section or
Exhibit of this Agreement unless the context requires otherwise.

 

15.12 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

 

15.13 Entire Agreement. This Agreement, including all exhibits to this Agreement
(the “Attachments”), and the Research and Development Collaboration Agreement
between the Parties dated October 28, 2002 embody the entire understanding
between the Parties and supersede any prior understanding and/or other
agreements between and among them respecting the development of the New Product.
Both this Agreement and the Research and Development Collaboration Agreement
between the Parties dated October 28, 2002 shall remain in effect in accordance
with their respective terms from and after the date on which this Agreement is
executed and delivered by the Parties. There are no representations, agreements,
arrangements or understandings, oral or written, between the Parties to this
Agreement relating to the subject matter of this Agreement, which are not fully
expressed in this Agreement. If any provisions of any such Attachment conflict
with any provisions set forth in this Agreement, the provisions of this
Agreement shall take precedence. The Parties acknowledge and agree that the
Mutual Nondisclosure Agreement remains in full force and effect with respect to
any and all subject matter other than the subject matter of this Agreement or
the ***** Agreement.

 

IN WITNESS WHEREOF, the undersigned Parties, acting through their duly
authorized representatives, have executed this Agreement in multiple
counterparts.

 

NEOSE TECHNOLOGIES, INC.

By:

 

/s/ C. Boyd Clarke

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

Name:

 

C. Boyd Clarke

Title:

 

CEO

 

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

NOVO NORDISK A/S

By:

 

/s/ Mads Krogsgaard Thomsen

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

Name:

 

Mads Krogsgaard Thomse

Title:

 

EVP, CSO

 

NOVO NORDISK HEALTH CARE AG

By:

 

/s/ Klaus Ehrlich

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

Name:

 

Klaus Ehrlich

Title:

 

SVP Europe

 

- 31 -

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Exhibits Index

 

Exhibit 1.21    M1 Profile – Parameters for Candidate Selection for New Product
Exhibit 1.24    Neose Patents as of the date of this Agreement Exhibit 2.2   
Work Plan Exhibit 5.1.3    Required Agreement for Certain Proposed Sublicensees
Exhibit 9.4    Press Release

 

 

- 32 -

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EXHIBIT 1.21

 

M1 Profile – parameters for candidate selection for New

****** Product aiming at providing ****** by administration ******

 

****** Process

 

  • ******

 

  • ******

 

  • ******

 

  • ******

 

  • ******

 

  • ******

 

  • ******

 

  • ******

 

  • ******

 

  • ******

 

  • ******

 

****** data; functional profile

 

  • ******

 

  • ******

 

  • ******

 

******

 

Safety assessment (pre M1 mainly in ******

 

  • ******

 

  • ******

 

  • ******

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

Confidential Information – Neose Technologies, Inc.   EXHIBIT 1.24

 

NEOSE PATENTS AS OF THE DATE OF THIS AGREEMENT

 

*****

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

                              

Country

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

   Case Type

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

   Status

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

   Application Number

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

  Filing Date

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

  Patent Number

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

  Issue Date

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

  Expiration Date

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

*****

   PCT    Granted    *****   *****   *****   *****   *****

*****

   DIV    Pending    *****   *****            

*****

   PCT    Pending    *****   *****            

*****

   PCT    Published    *****   *****            

*****

   PCT    Pending    *****   *****            

*****

   PCT    Published    *****   *****            

*****

   PCT    Pending    *****   *****            

*****

   PCT    Granted    *****   *****   *****   *****   *****

*****

   ORD    Pending    *****   *****   *****        

*****

   CON    Pending    *****   *****            

*****

   CON    Published    *****   *****            

*****

   DIV    Published    *****   *****            

*****

   CON    Pending    *****   *****            

*****

   PRO    Expired    *****   *****            

*****

   RCE    Granted    *****   *****   ******   *****   *****

*****

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Confidential Information – Neose Technologies, Inc.   EXHIBIT 1.24

 

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Confidential Information – Neose Technologies, Inc.   EXHIBIT 1.24

 

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Exhibit 2.2 Work Plan

 

********

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EXHIBIT 5.1.3

 

NEOSE TECHNOLOGIES, INC.

 

FORM OF REQUIRED AGREEMENT FOR PROPOSED SUBLICENSEES

 

This CONFIDENTIALITY AGREEMENT (this “Agreement”) is made as of this      day of
                    , 200_, by and between Neose Technologies, Inc., a Delaware
corporation (“Neose”), and                              , a                     
corporation (“Recipient”).

 

BACKGROUND

 

Neose has developed and continues to develop proprietary technologies and
related know-how for the glycosylation, design and remodeling of proteins,
peptides and antibodies, including, but not limited to its GlycoAdvance™,
GlycoPEGylation™ and GlycoConjugation™ technologies (collectively, the
“Technology”). Pursuant to a Research, Development and License Agreement dated
                         , 2003 (the “License Agreement”), Neose has granted
Novo Nordisk A/S, a Danish corporation (“Novo”), certain exclusive worldwide
rights under the Technology throughout the world, including certain rights to
sublicense. Novo desires to sublicense to Recipient certain rights granted to
Novo under the License Agreement. Novo, therefore, desires to disclose to
Recipient confidential and proprietary information, which is a part of the
Technology and is considered valuable by Neose. As a condition to Novo
disclosing such confidential and valuable proprietary information to Recipient,
Recipient is entering into this Agreement for Neose’s benefit.

 

NOW, THEREFORE, in consideration of the foregoing premises and in consideration
of Novo disclosing Neose’s confidential and proprietary information to
Recipient, and intending to be legally bound hereby, Recipient agrees as
follows:

 

1. Definitions

 

1.1 “Confidential Information” means any and all proprietary or confidential
information of Neose disclosed to Recipient, including, without limitation, all
technical data, trade secrets or know-how, including, but not limited to,
research, product plans, products, service plans, services, customer lists and
customers, markets, software, developments, inventions, processes, formulas,
technology, designs, drawings, engineering, marketing, distribution and sales
methods and systems, sales and profit figures, finances and other business
information disclosed to Recipient related to Neose, either directly or
indirectly, in writing, orally or by drawings or inspection of documents or
other tangible property. The fact that a given piece of information is marked or
identified as confidential or proprietary shall conclusively indicate that such
information is considered Confidential Information, but the failure to so mark
information shall not conclusively determine that such information was or was
not considered Confidential Information.

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1.2 “Neose Know-How” means any and all formulae, procedures, processes, methods,
designs, know-how, show-how, trade secrets, discoveries, inventions (whether or
not patentable), patent applications, licenses, software and source code,
programs, prototypes, designs, discoveries, techniques, methods, ideas,
concepts, data, engineering and manufacturing information, electronic control
circuits, specifications, diagrams, drawings, schematics, blueprints and parts
lists and other proprietary information, rights and works of authorship, whether
or not reduced to writing, controlled by Neose and relating to the Technology.

 

1.3 “Neose Patents” means all patents and patent applications (including all
corresponding foreign patents and patent applications, all divisions,
continuations, continuations-in-part, reissues, renewals, extensions and
additions to any such patents or patent applications) relating to the Technology
licensed by Neose to Novo under the License Agreement.

 

1.4 “Neose Technology” means the Neose Know-How and Neose Patents.

 

1.5 “Person” means an individual, corporation, partnership, trust, business
trust, association, joint stock company, joint venture, syndicate, sole
proprietorship, unincorporated organization, government, governmental agency,
authority or instrumentality, or any other form of entity not specifically
listed in this Agreement.

 

1.6 “Product” means any of the “Novo Materials” (as defined in the License
Agreement modified by using the Neose Technology.

 

1.7 “Sublicense Agreement” means the agreement under which Novo sublicenses to
Recipient certain rights granted by Neose to Novo under the License Agreement.

 

1.8 “Third Party” means any Person other than Recipient, Neose or Novo.

 

2. Non-Disclosure; Non-Use; Reasonable Care

 

2.1 Non-Disclosure. Without the prior written consent of an authorized officer
of Neose, Recipient shall not, directly or indirectly, disclose to any Third
Party any Confidential Information or Neose Know-How.

 

2.2 Non-Use. Without the prior written consent of an authorized officer of
Neose, Recipient shall not, directly or indirectly, use any of the Confidential
Information or Neose Technology for its own benefit or for the benefit of any
Third Party.

 

2.3 Reasonable Care. Recipient shall take all reasonable measures to protect the
secrecy of, and avoid the unauthorized disclosure or use of, the Confidential
Information and Neose Technology, including, without limitation, the following:
(i) Recipient shall exercise the highest degree of care that Recipient uses to
protect

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Recipient’s own confidential and proprietary information of a similar nature;
(ii) Recipient shall disclose Confidential Information and/or Neose Know-How
only to its employees and contractors who have a need to know; and (iii)
Recipient shall require anyone who has access to any of the Confidential
Information and/or Neose Know-How to sign or be a party to an effective
agreement with Recipient, applicable to the Confidential Information and Neose
Know-How, containing provisions that are substantially similar to the terms of
this Agreement. Recipient shall notify Neose in writing of any disclosure,
misuse or misappropriation of any Confidential Information or Neose Technology
that may come to Recipient’s attention.

 

3. Acknowledgements. Recipient acknowledges and agrees that: (i) this Agreement
is necessary for the protection of the legitimate business interests of Neose;
(ii) the execution of this Agreement by an authorized representative of
Recipient and delivery of this Agreement to Neose is a mandatory condition
precedent to Novo disclosing any Confidential Information and any information
concerning the Neose Technology to Recipient, without which Neose would not
permit Novo to disclose such information; (iii) neither Neose nor Novo has
granted to Recipient any rights under the Neose Technology in any manner; and
(iv) because of the unique nature of the Confidential Information and Neose
Technology and its broad applicability to the manufacture and remodeling of
glycoproteins, Neose will not have an adequate remedy at law if Recipient
breaches any term of this Agreement.

 

4. Return of Materials. Upon the earlier of termination of Novo’s license to the
Neose Technology under the License Agreement or termination of the Sublicense
Agreement, Recipient shall: (i) discontinue all use of the Confidential
Information and Neose Technology; (ii) destroy any and all items in its
possession containing any Confidential Information or Neose Technology; and
(iii) certify in writing to Neose, within ten (10) days after Neose’s request
therefor, that Recipient has taken all actions described in this Section 4.

 

5. Intellectual Property

 

5.1 Ownership Rights. All right, title and interest under patent, copyright,
trade secret and trademark law and any other intellectual property or other law
(collectively, “Ownership Rights”), in and to the Confidential Information and
Neose Technology shall remain at all times with Neose. Any and all Ownership
Rights to developments, discoveries, inventions, additions, amendments,
modifications, ideas, processes, methods, compositions, formulae, techniques,
information and data, whether or not patentable, relating to the Neose
Technology, which is made, conceived or reduced to practice by Neose, Novo or
Recipient or any combination of them (“Neose Improvements”) shall be owned by
Neose and shall be deemed to part of the Neose Technology for all purposes.

 

5.2 Assignment. To the extent that Recipient may retain any Ownership Rights in
any Neose Improvements, Recipient hereby irrevocably assigns and transfers to
Neose any and all such Ownership Rights, in perpetuity or for the longest period
otherwise permitted by law, without the necessity of further consideration, and
Neose

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shall be entitled to receive and hold in its own name all such Ownership Rights.
With respect to any Ownership Rights that Recipient may assign and transfer to
Neose under this Section 5.2, at the request of Neose, and at Neose’s expense,
either before or after termination of this Agreement, Recipient shall assist
Neose in acquiring and maintaining patent, copyright, trade secret and trademark
protection upon, and confirming Neose’s title in and to, any such Ownership
Rights. Recipient’s assistance shall include, but shall not be limited to,
signing all applications, and any other documents and instruments for patent,
copyright and any other proprietary rights, cooperating in legal proceedings,
and taking any other actions considered necessary or desirable by Neose. For the
purpose of facilitating the above assignment, Recipient agrees that any and all
employees and contractors employed or engaged by Recipient and providing any
service in connection with the use of the Neose Technology, prior to providing
such service, shall have agreed in writing to covenants consistent with
Recipient’s covenants set forth in this Section 5.2

 

6. Exceptions. The non-disclosure obligations with respect to Confidential
Information and Neose Know-How set forth in Section 2.1 shall not apply to any
information that: (i) at the time of disclosure by or on behalf of Novo or Neose
to Recipient is in, or after disclosure by or on behalf of Novo or Neose becomes
part of, the public domain through no improper act on the part of Recipient or
on the part of any of Recipient’s employees, independent contractors, advisors
or consultants; (ii) is disclosed, published or disseminated by Neose without
any confidentiality constraints; (iii) was in Recipient’s possession free of any
obligation of non-disclosure or non-use at the time of disclosure to Recipient,
as shown by written evidence; (iv) Recipient receives from a Third Party free of
any obligation of non-disclosure or non-use, but only if such Third Party had no
direct or indirect obligation to Neose not to disclose such information; (v) was
developed by Recipient independent of information received hereunder, as shown
by its written records; or (vi) subject to Section 7, is required to be
disclosed by law or pursuant to legal, judicial or administrative process.

 

7. Notice of Required Disclosure. If Recipient is required by judicial or
administrative process to disclose any Confidential Information or Neose
Know-How, then Recipient shall promptly notify Neose and, before disclosing such
Confidential Information or Neose Know-How, allow Neose a reasonable time to
oppose such process.

 

8. Successors; Assignment. This Agreement shall be binding upon Recipient and
Recipient’s successors and assigns and inure to the benefit of Neose and its
successors and assigns. Recipient may not assign its rights or delegate its
obligations under this Agreement, in whole or in part, except with the prior
written consent of Neose, which consent shall not be unreasonably withheld.
Neose may assign this Agreement without seeking or obtaining Recipient’s
consent.

 

9. Governing Law. This Agreement and any controversy, claim or dispute arising
under this Agreement shall be governed by, and construed in accordance with the
laws of the Commonwealth of Pennsylvania, United States of America, without
regard to the conflicts of law principles of any jurisdiction.

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10. Remedies. In addition to any other remedies that may be available, at law,
in equity or otherwise, Neose shall be entitled to obtain injunctive relief to
enforce the provisions of this Agreement without necessity of posting bond.

 

11. Entire Agreement. This Agreement contains the entire agreement and
understanding relating to the subject matter hereof and merges and supersedes
all prior discussions, agreements and understandings. This Agreement may not be
changed or modified, except in a writing signed by both Neose and Recipient. The
failure or delay of Neose to exercise any right under this Agreement shall not
be deemed a waiver of any rights under this Agreement.

 

IN WITNESS WHEREOF, each party has caused its authorized representative to
execute this Agreement as of the date first written above.

 

NEOSE TECHNOLOGIES, INC.

  

[INSERT NAME OF RECIPIENT]

By:

 

 

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By:

 

 

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Name:

 

 

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Name:

 

 

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Title:

 

 

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Title:

 

 

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[GRAPHIC APPEARS HERE]

 

NEOSE TECHNOLOGIES, INC.

102 Witmer Road, Horsham, PA 19044 215.315.9000

fax:215.315.9100

 

email: info@neose.com    www.neose.com

 

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Neose Technologies and Novo Nordisk Sign License Agreements for

Improved Therapeutic Proteins

 

Up to $55.6 Million in Upfront and Milestone Payments

 

HORSHAM, PA, November 17, 2003. Neose Technologies, Inc. (NasdaqNM: NTEC)
announced today that it has entered into two research, development and license
agreements with Novo Nordisk A/S (NYSE: NVO) to use Neose’s GlycoPEGylation™
technology to develop three next-generation proteins within Novo Nordisk’s
therapeutic areas, one of which is currently marketed by them.

 

The license agreements are the result of the research and development
collaboration agreements Neose and Novo Nordisk executed in 2002 and the
successful application of Neose’s GlycoPEGylation technology to three complex
proteins.

 

Under the terms of the new agreements, Neose will receive a $4.3 million upfront
fee and up to $51.3 million in milestone payments based on the progress of the
programs. Novo Nordisk is responsible for funding Neose’s research and
development activities under the agreements, and Neose will receive royalties on
sales of any products commercialized under the agreements. In addition, Neose
could receive additional milestones and royalties on new indications for the two
proteins not currently marketed by Novo Nordisk.

 

“We are pleased that the success of our original collaboration with Novo Nordisk
has led to a broader collaboration on multiple proteins for various indications.
Our work with Novo Nordisk highlights the potential of our GlycoPEGylation
technology to make clinically significant improvements to therapeutic proteins,”
said C. Boyd Clarke, Neose president, chief executive officer and chairman. “We
look forward to moving into the next phase of developing these proteins with a
leader in the field.”

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About GlycoPEGylation

 

Neose’s GlycoPEGylation technology can extend and customize protein half-life by
uniquely linking various size polyethylene glycol (PEG) polymers to glycans that
are remote from the protein’s active site, thereby preserving activity. Proteins
that have not benefited from traditional chemical pegylation may benefit from
GlycoPEGylation.

 

About Novo Nordisk

 

Novo Nordisk is a focused healthcare company. With the broadest diabetes product
portfolio in the industry, including the most advanced products within the area
of insulin delivery systems, Novo Nordisk is a world leader in diabetes care. In
addition, Novo Nordisk has a leading position within haemostasis management,
growth hormone therapy and hormone replacement therapy. Novo Nordisk
manufactures and markets pharmaceutical products and services that make a
significant difference to patients, the medical profession and society. With
headquarters in Denmark, Novo Nordisk employs approximately 18,700 people in 68
countries and markets its products in 179 countries. Novo Nordisk’s B shares are
listed on the stock exchanges in Copenhagen and London. Its ADRs are listed on
the New York Stock Exchange under the symbol ‘NVO’. For further company
information visit www.novonordisk.com

 

About Neose

 

Neose is a biopharmaceutical company focused on the improvement of protein
therapeutics through the application of its proprietary technologies. By
applying its GlycoAdvanceTM and GlycoPEGylationTM technologies, Neose is
developing proprietary protein drugs that are improved versions of currently
marketed therapeutics with proven efficacy. These second generation proteins are
expected to offer significant advantages, including less frequent dosing and
improved safety and efficacy. In addition to developing its own products and
co-developing products with others, Neose is entering into strategic
partnerships for the inclusion of its technologies into products being developed
by other biotechnology and pharmaceutical companies.

 

CONTACTS:

Neose Technologies, Inc.

Robert I. Kriebel

Sr. Vice President and Chief Financial Officer

Barbara Krauter

Manager, Investor Relations

(215) 315-9000

 

For more information, please visit www.neose.com.

 

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of
1995: Statements in this press release regarding our business that are not
historical facts are “forward-looking statements” that involve risks and
uncertainties. For a discussion of these risks and uncertainties, any of which
could cause our actual results to differ from those contained in the
forward-looking statement, see the section entitled “Risk Factors” of our
Registration Statement on Form S-3 dated June 20, 2003, and discussions of
potential risks and uncertainties in our subsequent filings with the SEC.