exv10w25



 






Exhibit 10.25




License Agreement




By and between




EntreMed, Inc.




and




Celgene Corporation.




[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.




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     This Agreement effective as of the 23rd day of March, 2005, by and between EntreMed,
Inc., a Delaware corporation having a place of business at 9640 Medical Center Drive, Rockville, MD
20850 (hereinafter “EntreMed”), and Celgene Corporation, a Delaware corporation
having a place of business at 86 Morris Avenue, Summit NJ 07901 (together with its
Affiliates, hereinafter “Celgene”).



WITNESSETH




WHEREAS, EntreMed is engaged in the business of discovering and developing chemical and
biological substances for therapeutic uses;




WHEREAS, Celgene is a company that develops, manufactures, markets and sells
pharmaceutical products for healthcare;




WHEREAS, Celgene owns or Controls certain Patent Rights and
Know-How related to Tubulin Binding Agents listed in Appendix B, and it has the
right to grant certain rights and licenses thereunder as set forth herein; and




WHEREAS, EntreMed desires to obtain a worldwide exclusive license from Celgene
under the Patent Rights and KNOW-HOW to develop, make, manufacture, market, distribute,
promote and sell and have sold the Licensed Product embodying the Tubulin Binding
Agents in the Field in the Territory, and Celgene desires to grant
such a license to EntreMed, on the terms and conditions contained in this
Agreement.




NOW, THEREFORE, in consideration of the premises and the mutual promises herein contained,
Celgene and EntreMed have agreed as follows:




ARTICLE 1 - DEFINITIONS





As used in this Agreement, the following terms shall have the following meanings:





	1.1  	“Affiliate” as applied to either party shall mean any company or other
legal entity other than the party in question in whatever country organized, controlled by or
under common control with that party. The term “control or controlled” with respect to an
Affiliate means ownership or control, directly or indirectly, of at least fifty
percent (50%) of the outstanding stock or voting rights entitled to elect directors.






	1.2  	“Agreement” shall mean this Agreement including the Appendices attached
hereto, each of which constitutes an integral part of the understandings and
Agreements set forth herein.






	1.3  	“Commercially Reasonable Efforts” shall mean the reasonable efforts and resources
that an experienced pharmaceutical or biotechnology company would use to reasonably
diligently develop and commercialize a compound owned by it or to




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	   	which it has rights and which is of similar market potential at a similar stage in
development as the Licensed Product.






	1.4  	“Confidential Information” shall mean (i) the terms of this Agreement
including all Appendices and (ii) with respect to any Party (“Disclosing Party”), any
information relating to the Disclosing Party, the products or the Disclosing Party’s business
(including but not limited to Know-How, technical information, research, personnel,
marketing, strategic or other information) that is disclosed in writing, visually, orally or
in electronic medium to the other Party (“Receiving Party”), whether prior to or after the
Effective Date, in the course of the Parties’ evaluation, negotiation of or
performance under this Agreement which in written or other tangible form shall be
clearly marked as being confidential and if not in written or tangible form when disclosed,
will be indicated upon disclosure as being confidential and then summarized electronically or
in writing and marked as being confidential within thirty (30) days after disclosure, but
shall not include information that:






	 	1.4.1  	the Receiving Party or an Affiliate owned or controlled prior to
receipt from the Disclosing Party, or
	 
	 	1.4.2  	is or becomes public through no fault of the Receiving Party or any
Affiliate thereof, or
	 
	 	1.4.3  	is hereafter developed by the Receiving Party or an Affiliate
independent of any disclosure from the Disclosing Party as evidenced by competent
written evidence, or
	 
	 	1.4.4  	the Receiving Party or an Affiliate obtains from a Third
Party lawfully and not under a confidentiality obligation to the Disclosing
Party, or
	 
	 	1.4.5  	is required to be disclosed by law or regulation, provided that Receiving
Party shall notify providing party forthwith of any such required disclosure.






	1.5  	“Control” shall mean, with respect to any Patent Right or Know-How
 that the Party controlling such right owns a transferable interest or has a license to
practice such Patent Right or Know-How  and has the ability to grant the
other Party access, a license or a sublicense (as applicable) to practice such Patent
Right or Know-How.








	1.6  	“Effective Date” shall mean the date first written above.





	1.7  	“Field” shall mean all oncology indications in humans or animals.




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	1.8  	“First Commercial Sale” shall mean the first sale of Licensed PRODUCT in
any country by EntreMed or any of its Sublicensee or AffiliateS to
any Third Party for consideration.






	1.9  	“Know-How” shall mean the information listed in Appendix B and any and all
unpatented proprietary information and know how, processes, techniques, designs, data and
results in whatsoever form including, without limitation, all biological, toxicological,
chemical information, biochemical information, metabolic, non-clinical, pre-clinical,
clinical, pharmacological, pharmacokinetic data, assay, formulation, quality control,
synthetic process, manufacturing methods, data and specifications, all of which specifically
relate to the development, synthesis, manufacture, use or sale of Licensed Products
embodying the Tubulin Binding Agents which is under the Control of
Celgene and/or any of its Affiliates as of the Effective Date of
this Agreement.






	1.10  	“Licensed Product” shall mean any pharmaceutical product that is comprised of, or
derived at least in part from, the Tubulin Binding Agents.






	1.11  	“License Year” shall mean the period beginning on the Effective Date and
ending on December 31 of that year and each subsequent calendar year during the term of the
Agreement thereafter.






	1.12  	“Marketing Authorization” shall mean any and all marketing authorizations,
regulatory approvals or registrations, including amendments and supplements thereto, granted
by a Regulatory Authority, which are required for marketing, promotion, pricing,
reimbursement and selling of Licensed Products.






	1.13  	“NDA” shall mean any new drug application filed with any Regulatory Authority, which
is necessary for approval to use, market, sell and offer for sale of a Licensed
Product.






	1.14  	“Net Sales” means the gross amount received by EntreMed or its
Affiliates or Sublicensee for sale of Licensed Product to Third
Parties, less:






	 	1.14.1  	sales taxes, value added taxes, excise taxes, and customs duties;
	 
	 	1.14.2  	cost of export licenses and any taxes, fees or other charges associated with the
exportation or importation of Licensed Products;
	 
	 	1.14.3  	rebates accrued, incurred or paid to Federal Medicaid and State Medicare and any
other price reductions required by a governmental agency;
	 
	 	1.14.4  	rejected shipments, returns, and retroactive deductions;




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	 	1.14.5  	the amount received for sales which become the subject of a subsequent temporary or
partial recall by a regulatory agency for safety or efficacy reasons outside the
control of EntreMed; and
	 
	 	1.14.6  	customary cash, quantity, and trade discounts; provided, however, that a sale or
transfer to Affiliates or Sublicensees for re-sale by such
Affiliates or Sublicensees shall not be considered a sale for the
purpose of this provision but the resale by such Affiliates or
Sublicensees shall be a sale for such purposes.
	 
	 	   	A “sale” shall also include a transfer or other disposition for
consideration, but not such transfers or dispositions, without consideration,
for pre-clinical, clinical, regulatory or governmental purposes prior to
receiving marketing approval for the specific indication for which such
transfer is made. In the event that consideration in addition to or in lieu
of money is received for Licensed Product, such
consideration shall be added to the Net Sales as valued on the day
of receipt thereof by EntreMed. To the extent that a Licensed
Product is sold in other than an arms length transaction, Net
Sales shall be the fair market value of such Licensed Product
if sold in an arms length transaction, less the costs identified in this
Article 1.14, Licensed Product shall be considered “sold” at the
earlier of (a) the transfer of title in such Licensed Product to a
person other than an Affiliate or Sublicensee of
EntreMed or (b) the shipment of such Licensed
Product from the manufacturing or warehouse facilities of
EntreMed or its Affiliates or Sublicensees to a
Third Party.






	1.15  	“Patent Right(s)” shall mean the Tubulin Binding Agents that are described
in the following:






	 	1.15.1  	the United States patent applications and patents listed in Appendix A;
	 
	 	1.15.2  	the United States and foreign patents issued from applications listed in Appendix A
and from divisionals and continuations of such applications;
	 
	 	1.15.3  	claims of United States continuation-in-part applications and of equivalent foreign
applications, and of the resulting patent(s), that are directed to subject matter
specifically described in and claim the benefit of the priority of the aforementioned
United States and foreign applications listed in Appendix A;
	 
	 	1.15.4  	claims of all later-filed foreign patent applications, and of the resulting patents,
that are directed to subject matter described in the United States patents and/or
patent applications described in the foregoing subsections of this Article 1.15; and




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	 	1.15.5  	any reissues, re-examinations or extension of United States patents described in the
foregoing subsections of this Article 1.15.






	1.16  	“Payment Period” shall have the meaning as set forth in Article 5.3.1.






	1.17  	“Agents” shall mean any Third Party engaged by EntreMed and/or its
Affiliates in the normal course of their business to market and/or distribute their
product range in finished form under EntreMed’s trademarks in a particular country.






	1.18  	“Regulatory Authority” shall mean any regulatory agency, ministry, department or
other governmental body having authority in any country to control the development,
manufacture, marketing and sale of products.






	1.19  	“Sublicensee” shall mean with respect to a Party any person, company, corporation or
other business entity, other than a Party’s Affiliates, that is granted a sublicense
by EntreMed to develop, make, have made, use, offer for sale and sell Licensed
Product.
	 
	1.20  	“Territory” shall mean each and every country throughout the world.






	1.21  	“Third Party” shall mean any person, entity or corporation other than the Parties
and their Affiliates.






	1.22  	“Valid Claim” shall mean with respect to any country of the Territory a
claim of an issued and unexpired patent or a supplementary protection certificate included
within the Patent Rights in such country which (i) has not been held unenforceable,
unpatentable or invalid by a decision of a court or other governmental agency of competent
jurisdiction, unappealable or unappealed within the time allowed for appeal, (ii) has not been
admitted to be invalid or unenforceable through reissue or disclaimer or otherwise and (iii)
absent a license, would be infringed by the use, making or selling of the Licensed
Product.






	1.23  	“Tubulin Binding Agents” shall mean any compound described in the Patent
Rights.





ARTICLE 2 – GRANT OF RIGHTS





	2.1.  	Exclusive License






	   	Celgene hereby grants to EntreMed an exclusive license, with the full
right to grant sublicenses, under the Patent Rights and the Know-How, to
make, have made, manufacture, have manufactured, use, develop, clinically test, import and
sell Licensed Product in the Field in the Territory. In
addition of any rights reserved by Celgene under this Agreement,
Celgene shall retain a non-




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	   	exclusive license under the Patent Rights to continue its internal research
studies and non-commercial outside research studies with respect to the Tubulin
Binding Agents.






	2.2.  	Sublicenses and other Co-operations 





     Any sublicense granted by EntreMed shall be subject to the terms and conditions
of this Agreement.




	 	2.2.1  	EntreMed may use and grant respective sublicenses to contractors
in the drug development, non-clinical and clinical testing, clinical diagnostic
formulation manufacture and registration of Licensed Product. In the event
that EntreMed intends to grant a sublicense for the distribution, sale
and/or marketing rights of Licensed Product to any Third Party in
the Territory, entremed agrees that Celgene shall have a first
right to negotiate an exclusive or non-exclusive license to the rights offered under
the proposed transaction (“Right of First Discussion”). Celgene
shall have a sixty (60) day period following the date of EntreMed’s written
disclosure of the proposed transaction to exercise its Right of First
Discussion by providing written notice to EntreMed of its desire to
negotiate a license agreement. In the event a license agreement is not executed
within ninety (90) days following the date that Celgene exercises its
Right of First Discussion, EntreMed shall be free to sublicense
such rights to any Third Party, provided, however, that EntreMed
may only offer such sublicense on terms and conditions that are not more favourable
than the last offer made by Celgene to EntreMed.
	 
	 	2.2.2  	EntreMed shall not grant any rights which are inconsistent with
the rights granted to and obligations imposed on EntreMed hereunder. Each
sublicense granted by EntreMed shall include an audit right by
Celgene of the same scope as provided in Article 5.7.
	 
	 	2.2.3  	Any sublicense granted by EntreMed shall provide for the
sublicense termination upon the termination of this Agreement.





ARTICLE 3 – TRADEMARKS





	 	3.1  	EntreMed shall be free to select and to register trademarks at its sole
discretion for sale of Licensed Products in the Territory. Such trademarks
shall be prepared and owned by EntreMed at EntreMed’s expense.





ARTICLE 4 – DEVELOPMENT




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	4.1  	Disclosure of Know-How
	 
	   	Celgene undertakes to disclose within sixty (60) days following the Effective
Date of this Agreement all Know-How Controlled by or in
the possession of Celgene or its Affiliates existing as of the
Effective Date of this Agreement to EntreMed.
	 
	4.2  	Commercially Reasonable Efforts
	 
	   	EntreMed shall use Commercially Reasonable Efforts to develop and
commercialize Licensed Products on a schedule that is consistent with
sound and reasonable business practices and judgment.






	4.3  	Diligence
	 
	   	EntreMed shall use Commercially Reasonable Efforts to bring one or more Licensed
Products to market through a diligent program for exploitation of the Tubulin Binding Agents, Patent Rights
and Know How. Celgene agrees that EntreMed shall have complete control of all
regulatory submissions of Licensed Products to the appropriate regulatory agencies worldwide. Only one
payment will be made for each of the milestones recited under 4.3.1, 4.3.2, 4.3.3 and 4.3.4. Diligence shall be
demonstrated by attaining the following milestones:






	 	4.3.1 within * years of the Effective Date, the * by EntreMed;
	 
	 	4.3.2 within * years of the Effective Date, the * a Licensed Product;
	 
	 	4.3.3 within * years of the Effective Date, the * a Licensed Product; and
	 
	 	4.3.4 within * years of the Effective Date, the * or * to * a Licensed Product.






	4.4  	Failure to Achieve Milestones.
	 
	   	If EntreMed is unable to meet any of the milestone events set forth in Article 4.3
EntreMed, EntreMed shall be entitled to a * extension of the required
milestone event. If after the extension, EntreMed fails to achieve the milestone,
Celgene shall have the option, in its sole discretion, to modify the milestone
event or to terminate this Agreement.






	4.5  	Development Costs
	 
	   	For the time of this Agreement, EntreMed bears all
costs incurred by it in all future non-clinical and clinical
development activities necessary for the development of Licensed
Products.




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	4.6  	 Exchange of Information and Supply of Compounds

	 
	   	The parties, from time to time, but no more that twice a year, may
meet to exchange information on the compounds that are being
developed. In addition, to the extent that Celgene has any of the
Tubulin Binding Agents in its possession, Celgene shall make these
Tubulin Binding Agents available to EntreMed for testing, but it shall
not be obligated to synthesize any new Tubulin Binding Agents for
EntreMed. Neither party shall be obligated to engage in collaborative
research or development activities regarding the Tubulin Binding
Agents, but may do so to the extent that the parties agree in a
separate written arrangement.





ARTICLE 5 – FINANCIAL CONSIDERATION





	5.1.  	Upfront Fee
	 
	   	In consideration of the rights granted by
Celgene to EntreMed hereunder,
EntreMed will pay Celgene the
non-refundable, non-creditable sum of one million US
Dollars ($1,000,000.00) to an account designated by
Celgene to be paid within ten (10) business
days following the Effective Date of this
Agreement.

	 
	5.2.  	Milestone Payments






	 	5.2.1.  	In further consideration of the rights granted by Celgene to
EntreMed hereunder, in particular the licenses set forth in Article 2 above,
EntreMed will pay Celgene milestone payments as follows:





	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 
	 	 	 	 	Event	 	 	Milestone Payment	 
	 	(i)
	 	 	*	 	 	 	 	$	*	 	 
	 	(ii)
	 	 	*	 	 	 	 	$	*	 	 
	 	(iii)
	 	 	*	 	 	 	 	$	*	 	 
	 	(iv)
	 	 	*	 	 	 	 	$	*	 	 
	 	(v)
	 	 	*	 	 	 	 	$	*	 	 
	 	(vi)
	 	 	*	 	 	 	 	$	*	 	 
	 	(vii)
	 	 	*	 	 	 	 	$	*	 	 
	 





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	 	5.2.2.  	EntreMed shall pay Celgene the milestone payments set forth in
Article 5.2.1 within thirty (30) days of the occurrence of the respective milestone
event. For the avoidance of doubt, such milestone payments shall not be due more
than once. The milestone payments are non-refundable, non-cancellable and not
creditable against earned royalties to be paid on the sale of Licensed
Products under this Agreement. The upfront-fee pursuant to Article 5.1.
and all milestone payments shall be paid in US Dollars. As used in Articles 4 and 5,
initiation of a clinical trial means the enrollment of the first patient in such a
trial.





5.3. Royalty Payments





	 	5.3.1.  	In further consideration of the rights granted by Celgene to
EntreMed hereunder, in particular the licenses set forth in Article 2 above,
EntreMed will, within sixty (60) days after the first day of January, April,
July and October of each License Year, commencing upon the First
Commercial Sale, pay Celgene a royalty on Net Sales of
Licensed Products generated in the preceding calendar quarter (“Payment
Period”) as a percentage as set forth below.
	 
	 	5.3.2.  	In countries where
Licensed Products are covered by a Valid
Claim under an unexpired Patent Right, the royalty rate shall be *
percent (*%) of Net Sales of Licensed Products up to *
dollars ($*) calculated on an annual basis for the European countries, Japan and the
United States combined. For all sales over $* in the respective territories the
royalty rate shall be * percent (*%) of Net Sales of Licensed
Products  on an annual basis for the European countries, Japan and the
United States combined. In those countries where there is no patent coverage, the
royalty rate shall be * percent (*%) of Net Sales of Licensed
Products for the * (*) year period following the First Commercial
Sale of such Licensed Products in such country.
	 
	 	5.3.3.  	The above royalty rates shall be payable on a country-by-country basis on the
Net Sales of each Licensed Product from its First Commercial
Sale until the expiration of the royalty term as provided in Articles 5.3.2 and
5.3.6.
	 
	 	5.3.4  	In the event that EntreMed, its Affiliates,
Sublicensees or Agents, in order to exploit the licenses granted to
it by Celgene hereunder in any country, are required to make royalty
payments to one or more Third Parties to obtain a license under their patent
rights in the absence of which the Licensed Product could not legally be
developed, manufactured, clinically tested, registered, marketed or sold in such
country, then EntreMed may deduct * percent (*%) of the royalties paid to
such Third Parties from the royalties due to Celgene with regard to




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	 	   	the respective countries up to a total of * percent (*%) reduction in the
royalty rate due Celgene.
	 
	 	5.3.5.  	No multiple royalties shall be payable because the Licensed Product, their
development, manufacture, use or sale is or shall be covered by more than one
Valid Claim of a patent included in the Patent Rights or more than
one patent under the Patent Rights.
	 
	 	5.3.6.  	With regard to countries where Licensed Products are covered by a
Valid Claim under a Patent Right, EntreMed shall pay
royalties on a country-by-country basis until the expiration of the last to expire of
the Patent Rights.
	 
	 	5.3.7  	If EntreMed grants a sublicense of its rights under this
Agreement pursuant to Article 2.2 of this Agreement in any of the
countries in the Territory, EntreMed shall pay to Celgene
a portion of the upfront payments, milestone payments and other sublicensing fees
received from the sublicense *





EntreMed shall pay to Celgene its portion of any sublicensing fee within thirty
(30) days of EntreMed’s receipt of any sublicensing fee. Sublicensing payments to
Celgene are non-refundable, non-cancellable and not creditable against earned royalties to
be paid on the sale of Licensed Products under this Agreement.





	 	5.3.8  	In establishing a lower royalty payment in those countries in which there
is no patent coverage, as described in Article 5.3.2, the parties recognize, and
EntreMed acknowledges, the substantial value of the technology being
provided to EntreMed under this Agreement, in addition to the grant
of Patent Rights and Tubulin Binding Agents, Celgene has
agreed to transfer to EntreMed the Know-How.






	5.4.  	Royalty Payment and Progress Reports
	 
	   	Each royalty payment shall be accompanied by a written report describing the Net
Sales of the Licensed Product sold by or on behalf of EntreMed, its
Affiliates and Sublicensees during a Payment Period in each
country in the Territory in which such Net Sales of Licensed
Product occurred during the Payment Period, specifying: the gross sales (if
available) and Net Sales in each country’s currency; the applicable royalty rate
under this Agreement; the royalties payable in each country’s currency, including
an accounting of deductions taken in the calculation of Net Sales; the applicable
exchange rate to convert from each country’s currency to US Dollars, under this Article
5.4.; the royalties payable in US Dollars and the minimum royalties pursuant to Article
5.3.4. EntreMed shall provide to Celgene no less than semi-annually, on
July 1




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	   	and January 1 of each year, written progress reports regarding the status of the
development and commercialization of the Patent Rights, Tubulin Binding
Agents and Know-How. Such report shall include progress on research and
development, regulatory approvals, manufacturing, sublicensing, marketing and sales during
the preceding six (6) months.
	 
	5.5.  	Method and Manner of Royalty Payment






	 	5.5.1.  	EntreMed shall deliver to Celgene within sixty (60) days
following the end of each Payment Period a royalty report as set forth in
Article 5.4. along with EntreMed‘s payment to Celgene of any
royalty due and payable to Celgene for such Payment Period.
	 
	 	5.5.2.  	All royalty payments shall be computed and paid in US Dollars at exchange rates as
published by the Wall Street Journal on the last day of the Payment Period.






	5.6.  	Withholding Tax
	 
	   	If laws or regulations require withholding by EntreMed of any taxes imposed
upon Celgene on account of any royalties and advance payments, paid under this
Agreement, such taxes shall be deducted by EntreMed as required by law
from such remittable royalty and advance payment and shall be paid by EntreMed to
the proper tax authorities. Official receipts of payment of any withholding tax shall be
secured and sent to Celgene as evidence of such payment. The Parties shall
exercise their best efforts to ensure that any withholding taxes imposed are reduced as
far as possible under the provisions of any relevant tax treaty.
	 
	5.7.  	Records
	 
	   	EntreMed, its
Affiliates and
Sublicensee, shall keep and
maintain records of sales of Licensed
Product so that the royalties
payable and the royalty statements may be
verified. Such records shall be open to
inspection no more than twice in any one
calendar year during normal business
hours for a five (5) year period after
the royalty period to which such records
relate, by a nationally
independent certified public
accountant selected by Celgene
to whom EntreMed has no
reasonable objections and retained at
Celgene’s expense. Said
accountant shall sign a confidentiality
agreement prepared by EntreMed
and reasonably acceptable to
Celgene and shall then have the
right to examine the records kept
pursuant to this Agreement and
report to Celgene the findings
(but not the underlying data) of said
examination of records as are necessary
to evidence that the records were or were
not maintained and used in accordance
with this Agreement. A copy of
any report provided to Celgene
by the accountant shall be given
concurrently to EntreMed. If
said examination of records reveals any
underpayment(s) of the royalty payable,
then EntreMed shall promptly pay
the balance due to Celgene, and
if the underpayment(s) is/are more than
five percent






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(5%), then EntreMed shall also
bear the expenses of said accountant. If
said examination of records reveals any
overpayment(s) of royalty payable, then
Celgene shall credit the amount
overpaid against
EntreMed’s
future royalty payment(s).




	5.8.  	Overdue Payments
	 
	   	Payments not paid within the time period set forth in this Articles 5 shall bear interest
at a rate of *% above the London Interbank Offered Rate (LIBOR) compounded on a quarterly
basis from the due date until paid in full.





ARTICLE 6 – CONFIDENTIALITY AND PUBLICATION





	6.1  	Confidentiality
	 
	   	Subject to Article 6.2. below, neither Party shall
use or disclose any Confidential
Information received by it pursuant to this
Agreement without the prior written
consent of the other.
	 
	6.2  	Permitted Disclosure
	 
	   	Nothing contained in this Article shall be construed to restrict the Parties from
disclosing Confidential Information as required: (i) for legal, regulatory, tax,
or customs reasons, (ii) for audit purposes, (iii) by court or other government order, or,
(iv) from using such Confidential Information as is reasonably necessary to
perform acts permitted by, or to exploit rights granted under this Agreement,
provided that the disclosing Party shall, in the event of disclosure under Articles (i),
(ii) or (iii) above, provide the other Party copies of any such Confidential
Information at least five (5) business days prior to such disclosure so that the
other Party may make any objections and/or secure any protective provisions it deems
reasonably necessary.
	 
	6.3  	Publication
	 
	   	If either Party wishes to publish any information, data or results regarding the
Licensed Product in written, oral, slide show or other form, a manuscript or copy
of the proposed publication shall first be sent to the other Party at least sixty (60)
days in advance of such publication for review. Unless the reviewing Party informs the
other in writing during this sixty (60) day period that the proposed publication must be
delayed in order to protect a patentable invention or prevented to avoid disclosure of
Confidential Information, the other Party shall be free to publish such results
without restriction. In the event that a delay of the proposed publication is required,
the other Party shall withhold such submission for publication for an additional period,
up to ninety (90) days, or such other period as




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	   	the Parties may mutually agree. In the event that the proposed publication contains
Confidential Information, Articles 6.1 and 6.2 shall apply.
	 
	   	In any event, any reference to either Party in any proposed publication shall only be
allowed upon prior written approval of that Party.
	 
	6.4  	Press Release
	 
	   	Any publication or press release regarding the co-operation between the Parties under this
Agreement requires both Parties’ prior consent with such consent not to be
unreasonably withheld or delayed.





ARTICLE 7 – WARRANTIES AND LIMITATION OF LIABILITIES





	7.1  	By Both Parties
	 
	   	Each party hereby represents and warrants that each has the full right and authority to
enter into this Agreement and that the entry into this Agreement does
not require the consent of a Third Party whose consent has not been obtained.
	 
	7.2  	By Celgene
	 
	   	Celgene represents and warrants as follows:






	 	7.2.1  	that Celgene has not received any notice of infringement of
Third Party patents or notice of interfering subject matter; that, without
having made any special investigation, Celgene is not aware of any
Third Party patents or patent applications that contain any interfering
subject matter, or any issued Third Party patents that would be infringed
by the making, using, selling, offering for sale, or importing by EntreMed
of Tubulin Binding Agents  covered by the Patent Rights in any
country in the territory.
	 
	 	7.2.2  	that the Patent Rights and the Know-How transferred to
EntreMed under this Agreement, constitute the entirety of
Patent Rights and Know-How embodying the Tubulin Binding
Agents;
	 
	 	7.2.3  	that, with regard to the Tubulin Binding Agents,
Celgene has no applications filed or pending with the FDA as of the
Effective Date, including without limitation any Investigational New Drug
or Orphan Drug Status applications.




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	7.3  	Warranty Disclaimer
	 
	   	EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, Celgene MAKES
NO REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND EITHER
EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NON-INFRINGEMENT OR VALIDITY OF ANY Celgene PATENT, KNOW
HOW, Tubulin Binding Agents OR OTHER INTELLECTUAL PROPERTY
RIGHTS.





ARTICLE 8 – INDEMNIFICATION





	8.1  	By Entremed
	 
	   	EntreMed will defend, indemnify and hold harmless
Celgene, its successors, Affiliates and licensors
and their employees, agents, officers, trustees, shareholders and
directors and each of them (the “Celgene Indemnified
Parties”) from and against any and all Third Party claims,
causes of action and costs (including reasonable attorney’s fees) of
any nature made or lawsuits or other proceedings filed or otherwise
instituted against the Celgene Indemnified Parties in
connection with any claims, suits or judgments arising out of any
theory of product liability concerning the development, testing,
manufacture, sale or use of any Licensed Product by
EntreMed, its Affiliates or its
Sublicensees.






	 	8.1.1  	EntreMed’s indemnification under this Article 8.1 shall not apply
to any liability, damage, loss or expense to the extent that it is directly
attributable to the gross negligence, reckless misconduct or intentional misconduct
of Celgene.
	 
	 	8.1.2  	Commencing not later than the date of first use of a Licensed Product
in a clinical trial, EntreMed shall obtain and carry in full force and
effect product liability insurance against any claims, judgments, liabilities and
expenses for which it is obligated to indemnify Celgene and others under
Article 8.1 of this Agreement, in such amounts and with such deductibles as
are customary at the time for companies engaged in a similar business, and shall
provide Celgene with written evidence of such insurance within thirty (30)
days of the first use of a Licensed Product in a clinical trial. The
insurance policy relating to such coverage shall name Celgene as an
additional insured.






	8.2  	By Celgene 
	 
	   	Celgene will defend, indemnify and hold harmless EntreMed, its
successors, Affiliates and licensors and their employees, agents, officers,
trustees, shareholders and directors and each of them (the “EntreMed Indemnified
Parties”)




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	   	from and against any and all Third Party claims, causes of action and costs
(including reasonable attorney’s fees) of any nature made or lawsuits or other proceedings
filed or otherwise instituted against the EntreMed Indemnified Parties in
connection with any claims, suits or judgments arising out of any theory of product
liability concerning the development, testing, manufacture or use of any Celgene
TUBULIN BINDING AGENT by Celgene, its Affiliates or its
Sublicensees prior to the Effective Date.






	 	8.2.1  	Celgene’s indemnification under this Article 9.2 shall not apply
to any liability, damage, loss or expense to the extent that it is directly
attributable to the gross negligence, reckless misconduct or intentional misconduct
of EntreMed.






	8.3  	Conditions to Indemnification. A person or entity that intends to claim
indemnification under this Article 8 (the “Indemnitee”) shall promptly notify the party from
whom indemnification is sought (the “Indemnitor”), of any loss, claim, damage, liability or
action in respect of which the Indemnitee intends to claim such indemnification, and the
Indemnitor shall assume the defense thereof with counsel mutually satisfactory to the
Indemnitee whether or not such claim is rightfully brought; provided, however, that an
Indemnitee shall have the right to retain its own counsel, with the fees and expenses to be
paid by the Indemnitor if Indemnitor does not assume the defense, or if representation of
such Indemnitee by the counsel retained by the Indemnitor would be inappropriate due to
actual or potential differing interests between such Indemnitee and any other person
represented by such counsel in such proceedings. The failure to deliver notice to the
Indemnitor within a reasonable time after the commencement of any such action, only if
prejudicial to its ability to defend such action, shall relieve such Indemnitor of any
liability to the Indemnitee under this Article 8, but the omission so to deliver notice to
the Indemnitor will not relieve it of any liability that it may have to any Indemnitee
otherwise than under this Article 8. The Indemnitor may not settle or otherwise consent to
an adverse judgement in any such loss, claim, damage or other proceeding, that diminshes the
rights or interests of the Indemnitee without the prior express written consent of the
Indemnitee, its consent not to be unreasonably witheld or delayed. The Indemnitee under this
Article 8, its employees and agents, shall cooperate fully with the Indemnitor and its legal
representatives in the investigations of any action, claim or liability covered by this
indemnification.





ARTICLE 9 – PATENT PROSECUTION, INFRINGEMENT AND MARKING





	9.1  	Patent Prosecution






	 	9.1.1  	Celgene shall use reasonable efforts to prepare, file, prosecute
and maintain patent applications and patents directed to licensed
Products covered by the Patent Rights through patent counsel selected by
Celgene and reasonably acceptable to EntreMed, who shall
consult with and keep EntreMed advised with respect thereto in a timely
manner.




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	 	9.1.2  	EntreMed shall reimburse Celgene for * percent (*%) of
reasonable patent expenses in the Territory for the filing, prosecution and
maintenance of the Patent Rights. EntreMed shall reimburse
Celgene, within sixty (60) days after EntreMed receives an itemized
invoice for all patent expenses that are incurred and paid by Celgene after
the Effective Date.






	9.2  	Cooperation In Prosecution






	 	9.2.1  	With respect to any Patent Right, each patent application, office action,
response to office action, request for terminal disclaimer, petition, and request for
reissue or reexamination of any patent issuing from such application shall be provided
to EntreMed sufficently prior to the filing of such application response,
petition, or request to allow for review and comment by EntreMed.
Celgene shall have the right to take any action that, in its judgement, is
necessary to preserve such Patent Right. EntreMed shall have
the right to comment on substantive official actions and shall have the right to
suggest reasonable changes to prosecution strategy as it relates to
EntreMed’s compound development.






	9.5  	Infringement and Declaratory Judgment Actions






	 	9.5.1  	Notification. In the event that either party learns of the
infringement of any  Patent Right, or the filing of a Declaratory
Judgment action alleging the invalidity, unenforceability, or noninfringement
of any Patent Right (“DJ Action”), that party must promptly notify
the other party of the infringement or DJ Action, as the case may
be, in writing, and must provide reasonable evidence of the infringement.
Neither party will notify a Third Party of the infringement of any
Patent Right or of the filing of a DJ Action directed to any Patent
Right without first obtaining consent of the other party, which consent
shall not be unreasonably withheld. 
	 
	 	9.5.2  	Entremed’s
Right To File Infringement Actions. To the
extent Celgene has the right to bring a suit or action to compel the
termination of infringement of the Patent Right, Celgene
hereby grants EntreMed the right and option, but not the obligation,
to bring an action for infringement or to defend against a DJ action, at
its sole expense, in the name of EntreMed. If EntreMed
fails to take a suit or action to compel the termination of infringement within one
hundred and eighty (180) days of learning of such infringement, Celgene shall
have the sole right, but not the obligation, to bring a suit or action against the
infringing entity. No settlement, consent judgment or other voluntary final
disposition of a suit that adversely affects Patent Right may be
entered into without the consent of Celgene, which consent shall not
be unreasonably withheld. 




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	 	9.5.3  	EntreMed’s Right To Defend Declaratory Judgement (DJ)
Actions. In the event that a
DJ Action is brought naming
EntreMed as a defendant, EntreMed shall
have the right to proceed with the litigation or settle such action provided,
however, that no settlement, consent judgment or other voluntary final
disposition of a suit that adversely affects Patent Right may be
entered into without the consent of Celgene.
	 
	 	9.5.4  	Celgene’s
Recovery. In the event that Celgene
shall undertake the enforcement and/or defense of the Patent Right
by litigation, any recovery of damages by Celgene for any such
litigation shall be applied first in satisfaction of any unreimbursed
expenses and legal fees of Celgene relating to the suit. The balance
remaining from any such recovery shall be used to compensate
EntreMed for its lost sales, on the same basis as if they were
Net Sales and the relvant royalty payments to Celgene under this
Agreement shall be made. Any remaining damages shall belong to
Celgene. 
	 
	 	9.5.5  	EntreMed’s
Right To Litigate. In the event that
Celgene elects not to pursue an action for infringement or to defend
against a DJ action, as the case may be, Celgene shall
notify EntreMed in writing of such election and EntreMed
shall have the right and option, but not the obligation, at its cost and
expense, to initiate infringement litigation. Any recovery of
damages by EntreMed for any such litigation shall be applied first
in satisfaction of any unreimbursed expenses and legal fees of EntreMed
relating to the suit. The balance remaining from any such recovery shall be
used to compensate EntreMed for its lost sales, on the same basis as
if they were Net Sales and the relevant royalty payments to Celgene
under this Agreement shall be made. Any remaining damages shall belong to
EntreMed.
	 
	 	9.5.6  	Cooperation. In any infringement suit either party may institute to
enforce or defend the Patent Right pursuant to this
Agreement, the other party hereto shall, at the request of the party
initiating such suit, cooperate in all respects and, to the extent possible,
have its employees testify when requested and make available relevant
records, papers, information, samples, specimens, and the like. All reasonable
out-of-pocket costs incurred in connection with rendering cooperation requested
hereunder shall be paid by the party requesting cooperation. 
	 
	 	9.5.7  	Third
Party Royalty Reduction. In the event that an
infringement action is brought by a Third Party against
EntreMed alleging that EntreMed’s making,
using, offering to sell, selling, or importing of Licensed Products under
the Patent Right
infringes a Third Party patent, and results
in a judgment or settlement requiring royalties to be paid by
EntreMed to such Third Party, the royalties owed by
EntreMed to Celgene under Article 5 of this Agreement shall
be reduced by an amount equal to * percent ( * %) of
the royalties owed to such Third Party, provided




18









 






	 	   	that the royalties owed to Celgene shall not be reduced by an amount
greater than * percent ( * %) of Net Sales.

	 
	 	9.6  	Patent Marking. EntreMed shall mark all
Licensed Products or their containers that are made, used, or sold under the
terms of this Agreement, in accordance with applicable patent marking laws.





ARTICLE 10 – TERM AND TERMINATION





	10.1  	This Agreement shall become effective on the Effective Date. Unless sooner
terminated by any other provision of this Agreement, the term of the
Agreement shall expire with respect to each Licensed Product on a
country-by-country basis upon date of expiration of all royalty obligations in the countries
in the Territory pursuant to Article 5.3.2 and 5.3.7 herein.
	 
	10.2  	Notwithstanding the stipulation in Article 10.1. hereof, either Party shall be entitled at
any time, by giving written notice to the other Party, to terminate this Agreement
with immediate effect in the following itemized events:






	 	10.2.1  	Except as otherwise provided in Article 10.2.2 below, if either Party notifies the
other Party of the fact of major default or material breach of any provision in this
Agreement by the notified Party, and the notified Party fails to take
corrective measures to mitigate or cure such default or breach within ninety (90)
days from the date of notification, provided that notice of termination is given
within six (6) months of the default or breach and prior to correction of the default
or breach;
	 
	 	10.2.2  	If EntreMed at any time defaults in the payment of any sum when due and
fails to make such payment within sixty (60) days after receipt of a written notice
by Celgene; or
	 
	 	10.2.3.  	The other Party files in any court or agency pursuant to any statute or regulation
pertaining to bankruptcy, solvency, or payment of debts, of any state or country, a
petition in bankruptcy or insolvency or for reorganization or for an arrangement or
for the appointment of a receiver or trustee of the Party or of its assets, or if the
other Party proposes a written Agreement of composition or extension of its
debts, or if the other Party shall be served with an involuntary petition against it,
filed in any insolvency proceeding, and such petition shall not be dismissed within
sixty (60) days after the filing thereof, or if the other Party shall propose or be a
Party to any dissolution or liquidation, or if the other Party shall make an
assignment for the benefit of creditors.






	10.3  	EntreMed may, at its discretion, terminate this Agreement at any
time for any reason, upon six (6) months prior written notice to Celgene.




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ARTICLE 11 – EFFECTS OF TERMINATION





	11.1  	In the event of a termination of this Agreement pursuant to Articles 10.2 or 10.3,
the following shall apply:






	 	11.1.1.  	EntreMed shall cease use of the Patent Right, Tubulin Binding
Agents and the Know-How. In addition, EntreMed shall return at
Celgene’s reasonably incurred expense to Celgene any and all
Know-How and Tubulin Binding Agents without delay, including copies
and excerpts as disclosed by Celgene under this Agreement.
	 
	 	11.1.2.  	EntreMed shall notify Celgene of the amount of Licensed
Product   EntreMed and its Affiliates and
Sublicensees then have on hand, the sale of which would, with regard to
Licensed Product, but for the termination, be subject to royalty, and, if
they so wish, EntreMed and its Affiliate and its
Sublicensees and Agents shall thereupon be permitted to sell that
amount of Licensed Product, provided that EntreMed shall pay the
royalty due thereon to Celgene.






	11.2  	In the event of the termination of this Agreement under Articles 10.2 or 10.3,
EntreMed shall transfer to Celgene all of EntreMed’S regulatory
filings for Licensed Products and grant Celgene an exclusive,
royalty free license to use any of EntreMed’s patents, know how, trademarks, data and
Market Authorization for Celgene to make, have made, manufacture, have
manufactured, use, develop, clinically test, import and sell the Licensed Product in
the Territory.
	 
	11.3  	Expiration or termination of this Agreement for any reason shall be without
prejudice to the survival of the following provisions:






	 	11.3.1.  	the obligation of confidentiality provided for in Article 6 hereof;
	 
	 	11.3.2.  	Celgene’s right to receive milestone payments due and accrued up to the
moment of expiration or termination pursuant to Article 5.2;
	 
	 	11.3.3.  	Celgene’s right to receive all payments of the royalties accrued under
Article 5.3. hereof;
	 
	 	11.3.4.  	the rights and ownership in any intellectual property right the respective Party
has obtained prior to expiration or termination;
	 
	 	11.3.5.  	any other rights or remedies which either Party may then or thereafter have
hereunder or at law or in equity or otherwise;
	 
	 	11.3.6  	the obligation of record keeping provided for in Article 5.7; and




20









 






	 	11.3.7  	Articles 1, 8, 10, 11, 12 and 13.





ARTICLE 12 – GOVERNING LAW





	12.1  	This Agreement shall be governed by and interpreted in accordance with the laws of
Delaware, without giving effect to any choice of law rules.





ARTICLE 13 – MISCELLANEOUS





	13.1  	Celgene shall be entitled to assign or otherwise transfer its rights and obligations
under this Agreement in whole or in part to any Third Party.
EntreMed shall not be entitled to assign or otherwise transfer its rights and
obligations under this Agreement in whole or in part to any Third Party
without the prior written consent of Celgene which consent shall not be unreasonably
withheld except that EntreMed may, without the consent of Celgene, assign
this Agreement to a legal successor of all or substantially all of its business or assets.
	 
	13.2  	Any and all rights acquired by EntreMed under this Agreement shall extend
to its Affiliates.
	 
	13.3  	This Agreement sets forth the entire Agreement between the Parties and
supersedes all previous Agreements, written or oral regarding the subject matter
hereof. This Agreement may be amended only by an instrument in writing duly executed
on behalf of the Parties.
	 
	13.4  	Neither Party shall be liable for delay or failure to perform hereunder due to any
contingency beyond its control, including, but not limited to acts of God, fires, floods,
wars, civil wars, sabotage, strikes, governmental laws, ordinances, rules or regulations,
provided, such Party promptly gives to the other Party hereto written notice claiming force
Majeure and uses its best efforts to eliminate the effect of such force Majeure, insofar as is
possible and with all reasonable dispatch.
	 
	13.5  	Any waiver shall be made in writing for it to be effective and unless expressly stated shall
not be a continuing waiver nor shall it prevent the waiving Party from acting upon that or any
subsequent breach or from enforcing any term or condition of this Agreement.
	 
	13.6  	The invalidity of any provision of this Agreement or any loophole in this
Agreement shall not affect the validity of any other provision hereof. The Parties
undertake to replace the invalid provision or close the loophole in the Agreement
with another provision which reflects legally the originally intended commercial objectives of
the Parties as closely as possible.
	 
	13.7  	In the performance of this Agreement each Party shall be an independent contractor,
and therefore, no Party shall be entitled to any benefits applicable to any employee of the
other Party. No Party is authorized to act as an agent for the other




21









 






	   	Party for any purpose, and no Party shall enter into any contract, warranty or
representation as to any matter on behalf of the other Party.
	 
	13.8  	Any notice or other communication required or permitted to be given by either Party under
this Agreement shall be in writing and shall be effective when delivered, if
delivered by hand or by electronic facsimile or five days after mailing if mailed by
registered or certified mail, postage prepaid and return receipt requested, and shall be
addressed to each Party at the following addresses or such other address as may be designated
by notice pursuant to this Article:





	 	 	 	 	 
	

	 	If to Celgene
	 	If to EntreMed
	

	 	Celgene Corporation
	 	EntreMed, Inc.
	

	 	86 Morris Avenue
	 	9640 Medical Center Drive
	

	 	Summit, New Jersey 07901
	 	Rockville, MD 20870
	

	 	Attn: President and Chief Operating
	 	Attn: CEO
	

	 	Officer	 	 






ARTICLE 14 – LIST OF APPENDICES





	14.1  	The following Appendices are incorporated into and made part of this Agreement:





Appendix A: Patent Rights 




Appendix B: KNOW-HOW




IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed in
duplicate by their duly authorized representatives.




	 	 	 	 	 	 	 
	Celgene Corporation	 	EntreMed, Inc.
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	

	 	 
	 	 	 	 
	

	 	          Sol J. Barer
	 	 	 	          James S. Burns
	 
	 	 	 	 	 	 
	Title: President & COO	 	Title: President & CEO






22









 






Appendix A:  Patent Rights (as of Effective Date)




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Type	 	 	Application No.	 	 	Filing Date	 	 	Title	 	 	Status	 	 	Patent No.	 
	 	*

	 	 	*
	 	 	*
	 	 	*
	 	 	*
	 	 	*	 
	 





23









 






Appendix B: KNOW-HOW




	 	 	 
	Title:

	 	Celgene’s Tubulin Binding Agents
	Dated:

	 	November 8, 2004
	From:

	 	Celgene Drug Discovery
	Comment:

	 	As previously provided to EntreMed by Celgene.







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